/raid1/www/Hosts/bankrupt/TCR_Public/070119.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, January 19, 2007, Vol. 11, No. 16
Headlines
AAMES MORTGAGE: Moody's Puts Class B Certificates on Review
AETNA INDUSTRIES: Delaware Court Closes Chapter 11 Cases
ALLIED HOLDINGS: Rutlands Ask Court Again to Appoint Equity Panel
ALLIED HOLDINGS: Ad Hoc Panel Wants Shareholders' Meetings Held
AMERICAN COMMERCIAL: Launches Offer for $119.5MM of 9-1/2% Notes
AMERICAN PACIFIC: Moody's Lifts Corporate Family Rating to B1
AMR CORP: Board Okays 2007 Annual Incentive Plan for American Air
AMR CORPORATION: Earns $17 Million in Fourth Quarter of 2006
ANALYTICAL SURVEYS: Pannell Kerr Raises Going Concern Doubt
ARBOR OF NATCHITOCHES: Voluntary Chapter 11 Case Summary
ARMSTRONG WORLD: Asks District Court if Sea-Pac Appeal is Proper
ARMSTRONG WORLD: Wants Intercompany Claims Okayed up to $3 Million
BANCROFT CAP: Case Summary & 20 Largest Unsecured Creditors
BEAR STEARNS: Fitch Rates $1 Mil. Class II-B-5 Certificates at B
BRAND SERVICES: First Reserve Offer Cues S&P's Neg. CreditWatch
CABLEVISION SYSTEMS: Fitch Holds Junk Rating on Sr. Unsecured Debt
CDO REPACK: S&P Puts Class D Notes Rating on Negative CreditWatch
CENTEX HOME: S&P Cuts Rating on Class B-2 Certs. to BB from BBB-
CHARLIE MAC: S&P Affirms Rating on Class B-5 Certificates at B
CLFX CORP: Moody's Places Ba3 Rating on Review, and may Downgrade
COGECO CABLE: DBRS Holds Rating on Senior Secured Notes at BB
DAVID COLETTA: Voluntary Chapter 11 Case Summary
DELPHI CORP: Will Supply Protection Systems to Chery Automotive
DLJ COMMERCIAL: Moody's Holds Junk Ratings on $20.7 Million Certs.
DURA AUTOMOTIVE: RSM Updates Ontario Court on Chapter 11 Cases
DURA AUTOMOTIVE: Ontario Ct. Recognizes U.S. Ct.'s Final DIP Order
EDGEWATER FOODS: Nov. 30 Balance Sheet Upside-Down by $22.4 Mil.
ENTECH ENVIRONMENTAL: Mendoza Berger Raises Going Concern Doubt
FAIRPOINT COMMS: S&P Places BB- Corp. Credit Rating on Pos. Watch
FIRST FRANKLIN: Moody's Downgrades Ratings on Eight Cert. Classes
FOAMEX INT'L: Wants to Solicit Plan Acceptances Until February 14
GENERAL MOTORS: Sells More Than 9 Million Vehicles Globally
GENESIS HEALTHCARE: Joint Venture Deal Cues Moody's Ratings Review
GENESIS HEALTHCARE: S&P Lowers Corporate Credit Rating to B+
GENESIS TECHNOLOGY: Sherb & Co. Raises Going Concern Doubt
GERDAU AMERISTEEL: S&P Puts BB Corp. Credit Rating on Pos. Watch
GLOBAL POWER: Court Okays Saul Ewing as Equity Panel's Co-Counsel
GLOBAL POWER: Court Sets April 18 as General Claims Bar Date
GLOBAL POWER: U.S. Trustee Amends Creditors Committee Membership
GSAMP TRUST: Moody's Cuts Ratings on Two Securitized Debt Tranches
HEALTH MANAGEMENT: Fitch Lowers Issuer Default Rating to BB-
HEALTH MANAGEMENT: Moody's Rates Proposed Credit Facilities at Ba2
HEALTH MANAGEMENT: S&P Lowers Corp. Credit Rating to B+ from BBB
HEALTHWAYS INC: 2007 First Quarter Net Income Increases to $11.8MM
HEALTHWAYS INC: Moody's Rates $600 Mil. Credit Facilities at Ba2
HEALTHWAYS INC: S&P Puts 'BB' Rating on Corporate Credit
HEMOSOL CORP: Ontario Court Extends Plan Sponsorship Agreement
HERITAGE MEDICAL: Case Summary & Three Largest Unsecured Creditors
HOLLINGER INC: Chief Restructuring Officer Randall Benson Resigns
HOLLINGER INC: Ontario Superior Court Extends Stay Until June 8
INTERPOOL INC: Fitch Places BB Debenture Ratings on Negative Watch
ISLE OF CAPRI: Tim Hinkly, President and COO, Resigns
JOE MARTINEZ: Voluntary Chapter 11 Case Summary
KAD PROPERTIES: Case Summary & Six Largest Unsecured Creditors
LAMINATE KINGDOM: Involuntary Chapter 11 Case Summary
LIFEPOINT HOSPITALS: S&P Lowers Corporate Credit Rating to BB-
LIGAND PHARMA: John Higgins Succeeds Henry Blissenbach as CEO
MORGAN STANLEY: Moody's Junks Rating on $4.5 Mil. Class K Certs.
ON TOP COMMS: Has Until April 19 to Decide on La. Studio Lease
ORIGEN FINANCIAL: Weak Performance Cues Moody's Junk Cert. Rating
PIER 1: Moody's Junks Corp. Family Rating, Places Negative Outlook
PILGRIM'S PRIDE: Protein Acquisition Merges with Gold Kist
PILGRIM'S PRIDE: S&P Lowers Corporate Credit Rating to BB-
PITTSFIELD WEAVING: Court Okays Nixon Peabody as Special Counsel
REFCO INC: CFTC Objects to Mr. McNeil's Case Conversion Request
REFCO INC: Payments to Professionals Reaches $145.3 Million
ROYAL OAKS: Case Summary & 40 Largest Unsecured Creditors
SACO I: Moody's Junks Rating on Series 2004-1 Class B-2 Certs.
SACRED HEART: Moody's Downgrades Debt Rating to B1 from Ba3
SCOTTS MIRACLE: S&P Holds Corporate Credit Rating at BB
SEA CONTAINERS: Can File Chapter 11 Plan Until June 12
SEA CONTAINERS: Can Decide on Leases Until May 13
SEW CAL LOGO: Moore & Associates Raises Going Concern Doubt
SONIC CORP: 2007 1st Fiscal Qtr. Net Income Decreases to $15.3 MM
STEINWAY MUSICAL: Terminates Dennis Bamber Asset Purchase Pact
TERWIN MORTGAGE: Moody's Junks Rating on Class B-7 Debentures
UAL CORPORATION: Moody's Places Corporate Family Rating at B2
UNICO INC: Posts $4.8 Million Net Loss in Quarter Ended Nov. 30
UNITED AIR: Moody's Assigns B1 Rating on $2.1 Billion Senior Loan
UNITED AIR: S&P Rates $1.8 Billion Term Loan Due 2014 at B+
UNITED STATES STEEL: S&P Lifts Corporate Credit Rating to BB+
USI HOLDINGS: GS Deal Prompts Moody's Review on B1 Credit Rating
VERILINK CORP: Court OKs 2nd Amended Joint Plan of Reorganization
VERILINK CORP: Court Sets January 29 Plan Confirmation Hearing
WELLS FARGO: S&P Takes Action on Various Certificates
WESTON NURSERIES: Files Joint Plan and Disclosure Statement
WINSTAR COMMS: Can Reclaim Proceeds of Escrowed Accounts
WINSTAR COMMS: Ch. 7 Trustee & Patient Safety Okay to Revise Pact
WOODWIND & THE BRASSWIND: Panel Wants Milbank Tweed as Counsel
ZACHARIA RHOADS: Voluntary Chapter 11 Case Summary
* Donlin Recano Opens Office in Chicago
* BOOK REVIEW: Partners: Forming Strategic Alliances in
Health Care
*********
AAMES MORTGAGE: Moody's Puts Class B Certificates on Review
-----------------------------------------------------------
Moody's Investors Service has placed under review for possible
downgrade two tranches from one Aames Mortgage deal issued in
2003. The transaction consists of first and second lien,
adjustable and fixed-rate subprime mortgage loans. The loans were
originated by Aames Capital Corporation and are serviced by
Wilshire Credit Corporation.
The subordinate certificates are being reviewed for possible
downgrade based on the fact that existing credit enhancement
levels may be low given the current projected losses on the
underlying pool. Overcollateralization is currently below its
50 bp floor and future losses could cause further erosion of the
overcollateralization and put pressure on the most subordinate
tranches. Although the deal is performing within Moody's original
expectations, the current credit support deterioration can be
attributed to the deal passing performance triggers and therefore
releasing a large amount of overcollateralization.
These are the rating actions:
* Aames Mortgage Trust 2003-1
-- Class M-6, current rating Baa3, under review for
possible downgrade
-- Class B, current rating Ba1, under review for possible
downgrade
AETNA INDUSTRIES: Delaware Court Closes Chapter 11 Cases
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware entered a
final decree on Jan. 11, 2007, closing the Chapter 11 bankruptcy
case of Aetna Industries Inc.
The Debtor relates that substantial consummation has occurred in
its case and its plan of reorganization has been declared
effective. Pursuant to that Plan, the property required to be
transferred was substantially transferred and dealt with by the
Debtor, all anticipated distributions have been made, and all
adversary proceedings have been settled and resolved.
Further, the Debtor notes that no other motions, pleadings, and
adversary proceedings remain before the Court.
Aetna Industries Inc. supplies modules, welded subassemblies and
chassis parts used as original equipment components in the North
American automobile industry. The company filed for Chapter 11
protection on Feb. 11, 2002, listing estimated assets and debts of
more than $100 million. Mark Minuti, Esq., at Saul Ewing LLP and
Robert Welsberg, Esq., at Carson Fischer, PLC represent the
Debtor. Christopher S. Sontchi, Esq., at Ashby & Geddes, serves
as counsel to the Official Committee of Unsecured Creditors.
ALLIED HOLDINGS: Rutlands Ask Court Again to Appoint Equity Panel
-----------------------------------------------------------------
Guy W. Rutland, III, Guy W. Rutland, IV, and Robert J. Rutland
support the renewed request for the appointment of an official
committee of equity security holders filed by Virtus Capital LP,
Hawk Opportunity Fund, L.P., Aspen Advisors, LP, Sopris Capital
Advisors, LLC and Armory Advisors, LP, the equity holders in
Allied Holdings, Inc.'s Chapter 11 case.
The Rutland Family, which collectively holds 30% of Allied
Holdings Inc.'s common stock, sought the appointment of an
official equity committee. Virtus, Hawk, Aspen, and Sopris filed
joinders to that request. The Honorable Homer Drake of the U.S.
Bankruptcy Court for the Northern District of Georgia denied the
request without prejudice.
The Rutland Family, as the original movants for the appointment
of an Official Committee of Equity Security Holders, informs the
Court that numerous circumstances have changed since Judge Drake
entered his order and that grounds exist for the appointment of
an Official Equity Committee, Anna M. Humnicky, Esq., at Cohen
Pollock Merlin & Small, in Atlanta, Georgia, relates.
Accordingly, the Rutland Family asks the Court to direct the
appointment of an Official Committee of Equity Security Holders.
As reported in the Troubled Company Reporter on Jan. 12, 2007,
Yucaipa American Alliance Fund I L.P., Yucaipa American Alliance
(Parallel) Fund I L.P., the Official Committee of Unsecured
Creditors, and William T. Neary, the U.S. Trustee for Region 6,
have all supported the Debtor's motion to deny the appointment of
an official equity committee. The opposing parties explained to
the Court, among other reasons, that:
-- the shareholders are adequately represented by the Debtors'
board of directors, management, and advisors;
-- the Ad Hoc Equity Committee are well-financed funds
capable of representing their interests; and
-- holders of old equity failed to demonstrate that the
Debtors do not appear to be "hopelessly insolvent."
About Allied Holdings
Headquartered in Decatur, Georgia, Allied Holdings Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 37;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
ALLIED HOLDINGS: Ad Hoc Panel Wants Shareholders' Meetings Held
---------------------------------------------------------------
Virtus Capital LP, Hawk Opportunity Fund, L.P., Aspen Advisors,
LP, Sopris Capital Advisors, LLC, Armory Advisors, and Cypress
Management Advisors LLC -- collectively, the ad hoc committee of
equity security holders -- ask the U.S. Bankruptcy Court for the
Northern District of Georgia to compel Allied Holdings Inc. to
convene its annual shareholders' meetings for 2006 and 2007 for
the purpose of electing directors.
On Nov. 24, 2006, Virtus Capital made a written demand that
Allied hold an annual meeting pursuant to Code Section 14-2-703
of the Official Code of Georgia Annotated.
According to Paul N. Silverstein, Esq., at Andrews Kurth LLP, in
New York, the Debtors' current board of directors has failed to
conduct a shareholder meeting for over 19 months, despite the
requirement in the Amended Bylaws of Allied and applicable
provisions of Georgia law that require annual meetings of
shareholders.
Mr. Silverstein notes that Section 2.2 of the Bylaws mandates
that the Company hold an annual meeting of its shareholders each
year on a date and at a time determined by the Board, at which
period the Shareholders will elect a Board of Directors and
transact any other business as may properly come before the
meeting.
Under Georgia law, a court may "order a meeting to be held on
application of a shareholder of the corporation if an annual
meeting was not held within the earlier of six months after the
end of the fiscal year of the corporation or 15 months after its
last annual meeting."
Allied's last shareholders' meeting was held on May 24, 2005,
Mr. Silverstein points out.
Mr. Silverstein relates that Allied currently has 10 directors in
three staggered classes. Hugh E. Sawyer, Robert J. Rutland,
David Q. Bannister, and William Benton would have been the
subject of a vote of the shareholders at the meeting that should
have been held in May 2006. The terms of Thomas E. Boland, Guy
W. Rutland III, and B.F. Wilson, Jr., currently expire in May
2007.
Mr. Silverstein asserts that equity holders have a right to seek
an order compelling a shareholders' meeting during the pendency
of a reorganization case, which emanates from the fundamental
principle of corporate democracy that the shareholders' right to
govern their corporation is generally uncompromised by the
reorganization process.
Not only has Allied's Board brushed aside the Bylaws, but it has
made decisions that have failed to maximize the value of the
Debtors' estate for the benefit of stockholders, Mr. Silverstein
says. Board members Robert Rutland, Guy Rutland III, and Guy
Rutland IV, recognized that the Board is not adequately
representing stockholders and sought for the appointment of an
official equity committee.
Mr. Silverstein adds that even if the election of a new Board
causes the reorganization proceedings to shift in a new direction
that will be the result of the Allied Board finally being held
accountable to its shareholders.
The Ad Hoc Equity Committee's actions in seeking to compel annual
shareholders' meetings for 2006 and 2007 are a far cry from a
scheme to sabotage the reorganization proceedings that would
constitute "clear abuse," Mr. Silverstein assures the Court.
Rather, the Ad Hoc Equity Committee seeks to maximize the value
of the Debtors' estate for the benefit of stockholders, in
addition to creditors.
About Allied Holdings
Headquartered in Decatur, Georgia, Allied Holdings Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 37;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
AMERICAN COMMERCIAL: Launches Offer for $119.5MM of 9-1/2% Notes
----------------------------------------------------------------
American Commercial Lines LLC, a wholly owned subsidiary of
American Commercial Lines Inc., commenced a cash tender offer
and consent solicitation for any and all of its outstanding
9-1/2% Senior Notes due 2015 (CUSIP Nos. 02519QAB8, 02519QAA0).
There are currently approximately $119.5 million in aggregate
principal amount of the Notes outstanding. The tender offer is
being made upon the terms, and subject to the conditions, set
forth in the Offer to Purchase and Consent Solicitation Statement
dated Jan. 17, 2007, and related Consent and Letter of
Transmittal, which more fully set forth the terms of the tender
offer and consent solicitation.
The consent solicitation is scheduled to expire at 5:00 p.m., New
York City time, on Jan. 30, 2007, unless extended. The tender
offer is scheduled to expire at 5:00 p.m., New York City time, on
Feb. 14, 2007, unless extended. Holders may only withdraw their
tenders before the withdrawal deadline, which is expected to occur
promptly following the Consent Expiration Date, except as may be
required by law or as may be extended under the Offer to Purchase.
The total consideration for each $1,000 principal amount of Notes
validly tendered is the price equal to (i) the sum of (a) the
present value on the initial settlement date of $1,047.50 payable
on Feb. 15, 2010 plus (b) the present value on the initial
settlement date of the interest payments that would accrue and be
payable from the last interest payment date prior to the initial
settlement date until the First Call Date, determined on the basis
of a yield equal to the sum of (A) the yield to maturity on the
3.5% U.S. Treasury Note due Feb. 15, 2010, based on the bid-side
price of the Reference Security as of 2:00 p.m., New York City
time, on Jan. 30, 2007, as displayed on the Bloomberg Government
Pricing Monitor Page PX5, plus (B) 50 basis points, minus (ii)
accrued and unpaid interest to, but not including, the initial
settlement date.
The total consideration includes a consent payment of $30 per
$1,000 principal amount of Notes payable in respect of Notes
validly tendered and not withdrawn and as to which consents to the
proposed amendments are delivered on or prior to the Consent
Expiration Date.
Holders must validly tender on or prior to the Consent Expiration
Date and not withdraw Notes in order to be eligible to receive the
total consideration for such Notes purchased in the tender offer.
Holders who validly tender their Notes after the Consent
Expiration Date and on or prior to the Offer Expiration Date will
be eligible to receive an amount, paid in cash, equal to the total
consideration less the $30 Consent Payment per $1,000 principal
amount of Notes. Holders whose Notes are accepted for payment in
the offer shall receive accrued and unpaid interest in respect of
such purchased Notes from the last interest payment date to, but
not including, the applicable settlement date.
Holders tendering Notes will be required to consent to proposed
amendments to the indentures governing the Notes, which will
eliminate substantially all of the restrictive covenants, several
affirmative covenants and certain events of default contained in
the indenture and modify the covenant regarding mergers,
consolidations and transfers of the Company's properties and
assets. Adoption of the proposed amendments requires the consent
of at least a majority of the outstanding principal amount of the
Notes. The consummation of the tender offer and consent
solicitation is subject to the conditions set forth in the Offer
to Purchase, including, among other things, the receipt of
consents of Note holders representing the majority in aggregate
principal amount of the Notes.
The complete terms and conditions of the tender offer and consent
solicitation are described in the Offer to Purchase, copies of
which may be obtained by contacting Global Bondholder Services
Corporation, the information agent for the tender offer and
consent solicitation, at (866) 794-2200 (toll free). Questions
regarding the tender offer and consent solicitation may be
directed to the dealer manager for the tender offer and consent
solicitation, Merrill Lynch & Co., which may be contacted at (888)
654-8637 (toll free).
Based in Jeffersonville, Indiana, American Commercial Lines LLC
-- http://www.aclines.com/-- is a fully integrated network of
marine transportation companies, operating approximately 3,375
barges and 140 towboats on the inland waterways of North and South
America and transporting more than 45 million tons of freight
annually. In addition, ACL operates marine construction, repair
and ancillary service facilities, and river terminals. At the end
of 2004, ACL employed approximately 2,660 individuals.
* * *
As reported in the Troubled Company Reporter on Nov. 21, 2006,
in connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the Transportation sector, the rating agency
confirmed its B1 Corporate Family Rating for American Commercial
Lines LLC, and held its rating on the company's 9.5% Senior Notes
Due 2015. In addition, Moody's assigned an LGD5 rating to those
bonds, suggesting noteholders will experience an 80% loss in the
event of a default.
AMERICAN PACIFIC: Moody's Lifts Corporate Family Rating to B1
-------------------------------------------------------------
Moody's upgraded American Pacific Corporation's corporate family
rating to B1 and assigned a B2 rating to its new $110 million
guaranteed senior unsecured notes due 2015. The new notes are
being issued to refinance AMPAC's existing first and second lien
term loans and subordinated seller note as well as finance a final
earnout payment associated with the 2005 acquisition of its fine
chemicals business. AMPAC is also refinancing its revolving
credit facility. Moody's ratings on the existing revolving credit
facility and term loans will be withdrawn at the conclusion of the
refinancing.
The outlook for AMPAC's long-term ratings remains stable.
These summarizes the ratings activity:
* American Pacific Corporation
* Ratings changes:
-- Corporate family rating, B1 from B2
-- Probability of default rating, B1 from B2
-- $10 million Gtd senior secured first lien revolving
credit facility due 2010, Ba2 from Ba3, LGD2, 27%
-- $65 million Gtd senior secured first lien term loan due
2010, Ba2 from Ba3, LGD2, 27%
-- $20 million Gtd senior secured second lien term loan due
2011, B2 from B3, LGD4, 67%
* Ratings assignments:
-- $110 million Gtd senior unsecured notes due 2015, B2,
LGD4, 58%
* Ratings affirmed:
-- Speculative grade liquidity rating, SGL-3
The upgrade of AMPAC's corporate family rating reflects the firm's
strong 2006 performance following the successful integration of
its Fine Chemicals business, which was a step-out acquisition,
expansion of its pharmaceuticals manufacturing facilities and
renegotiation of its ammonium perchlorate contract with its
primary customer to provide for improved profitability at lower
sales volumes. AMPAC approximately doubled its revenues to $142
million in 2006, while improving its EBITDA margins.
Additionally, AMPAC sold its 50% interest in Energetic Systems for
$7.5 million and completed construction and commenced operation of
its perchlorate remediation facility in Henderson, Nevada. Going
forward capital expenditures for this environmental project are
expected to be much less than during the initial construction
phase.
The ratings reflect AMPAC's more diverse business mix, higher
expected profitability, greater revenue visibility due to backlogs
in its Fine Chemicals and Aerospace Equipment businesses, its sole
supplier or dual supplier status for several of its major
products, and better cash flow generating ability. The ratings are
tempered by the firm's small size, relatively high level of debt,
significant capital expenditures needed to grow the business,
customer concentration and environmental liabilities.
The stable outlook reflects the improved operating performance and
expectations that its retained cash flow will improve further in
2007 and 2008. The significant order backlog in the Fine
Chemicals and Aerospace Equipment businesses provides improved
visibility of revenues for the next year, while the renegotiated
ammonium perchlorate contract will likely provide for consistent
profitability in that business. In the near-term, upward movement
in the ratings is unlikely due to the firm's modest size. The
ratings could come under downward pressure if AMPAC were to make
significant acquisitions or if the company failed to generate
meaningful free cash flow.
American Pacific Corporation manufactures chemical and aerospace
products, including active pharmaceutical ingredients, perchlorate
chemicals used primarily in space propulsion, in-space propellant
thrusters, Halotron, a clean fire extinguishing agent, sodium
azide and water treatment equipment. AMPAC, headquartered in Las
Vegas, Nevada, had revenues of $142 million for the LTM ending
Sept. 30, 2006.
AMR CORP: Board Okays 2007 Annual Incentive Plan for American Air
-----------------------------------------------------------------
The compensation committee of the board of directors of AMR
Corporation has approved the company's 2007 annual incentive plan
for American Airlines Inc.
All U.S. based employees of American Airlines are eligible to
participate in the AIP (including AMR's executive officers). The
AIP is American Airline's annual bonus plan and provides for the
payment of awards in the event financial or customer service
metrics are satisfied.
Specifically, the compensation committee approved the amendment
and restatement of these compensation programs for officers
(including AMR's executive officers) and certain key employees of
American Airlines:
a) The 2005-2007 Performance Share Plan for Officers and Key
Employees, and the related 2005-2007 Performance Share
Agreements; and
b) The 2005 Deferred Share Award Agreements.
The amendment and restatement of the 2005-2007 Performance Share
Plan will result in a distribution of cash and stock upon the
attainment of performance criteria. The anticipated distribution
date is April 2008.
The amendment and restatement of the 2005 Deferred Share
Agreements will result in a distribution of stock upon the
recipient being employed by a wholly owned subsidiary of AMR on
the vesting date. The anticipated distribution date is July 2008.
The compensation committee also made certain grants to AMR's
executive officers under the 2005-2007 Performance Share Plan and
the 2005 Deferred Share Agreements. These grants replaced unit
grants under earlier plans.
Based in Fort Worth, Texas, AMR Corporation is the parent company
of American Airlines Inc. American Airlines -- http://www.AA.com/
-- is the world's largest airline. American, American Eagle and
the AmericanConnection regional airlines serve more than 250
cities in over 40 countries with more than 3,800 daily flights.
The combined network fleet numbers more than 1,000 aircraft.
American Airlines is a founding member of the oneworld Alliance,
whose members serve more than 600 destinations in over 135
countries and territories.
* * *
In June 2003, Moody's Investors Service placed AMR Corp.'s senior
unsecured debt and long-term corporate family ratings at Caa2 and
B3 respectively. Those ratings were placed with a stable outlook.
Moody's also assigned the company's probability of default rating
at B3 on Sept. 26, 2006.
AMR's senior unsecured debt and long-term issuer default rating
carry Fitch's CCC and B- ratings respectively.
On Feb. 22, 2006, Standard & Poor's placed B rating on the
company's long-term local and foreign issuer credits.
AMR CORPORATION: Earns $17 Million in Fourth Quarter of 2006
------------------------------------------------------------
AMR Corporation reported a $17 million net profit for the fourth
quarter of 2006. The current quarter results compare to a net
loss of $600 million in the fourth quarter of 2005. Excluding the
$191 million net charge for special items, AMR's fourth quarter
2005 net loss was $409 million.
For 2006, AMR posted a $231 million net profit compared to a net
loss of $857 million in 2005. AMR's 2005 loss would have been
$677 million excluding a $180 million net charge for special
items.
"By producing a fourth quarter and full year profit for the
first time since 2000, the people of American Airlines made 2006
a proud milestone in our ongoing turnaround," said AMR Chairman
and CEO Gerard Arpey. "We executed on every facet of our
Turnaround Plan - from bolstering our financial and competitive
positions to investing in our product and strengthening our
employee pension plans. With the combined effort of the entire
American Airlines team, we expect to build on our momentum in
2007."
Arpey noted significant improvement to the company's cash
balance, a notable increase in the funding status of its defined
benefit pension plans, and continued debt reduction as examples
of AMR's strong momentum in 2006.
AMR contributed $323 million to its defined benefit pension
plans in 2006, including a $100 million contribution in the
fourth quarter that went beyond the company's 2006 funding
requirement of $223 million. The company's 2006 pension
contributions, along with strong pension fund asset returns,
helped to increase the assets held in trust for its defined
benefit pension plans by $800 million to $8.5 billion at the end
of 2006 and also helped to improve the accumulated benefit
obligation funding status of AMR's pension plans to 85%, up from
78% at the end of 2005.
AMR ended 2006 with $5.2 billion in cash and short-term
investments, including a restricted balance of $468 million,
compared to a balance of $4.3 billion in cash and short-term
investments at the end of 2005, including a restricted balance of
$510 million.
The company reduced total debt, which includes the principal
amount of airport facility tax-exempt bonds and the present value
of aircraft operating lease obligations, to $18.4 billion at the
end of the fourth quarter of 2006, compared to $20.1 billion a
year earlier. In addition to $1.2 billion in scheduled principal
payments that AMR made in 2006, the company purchased $190 million
of its outstanding debt and lease obligations during the year.
AMR reduced net debt, which is defined as total debt less
unrestricted cash and short-term investments, from $16.3 billion
at the end of 2005 to $13.6 billion at the end of 2006.
AMR reported fourth quarter consolidated revenues of approximately
$5.4 billion, an increase of 4.4% year over year. Consolidated
2006 revenues totaled $22.6 billion, an 8.9% increase over 2005
and a nearly 30% increase over the company's $17.4 billion in
total revenue in 2003, the year AMR launched its Turnaround Plan.
In the fourth quarter, other revenues, including sales from
such sources as confirmed flight changes, buy-on-board food
services, and third-party maintenance work, increased
11.7% year over year to $347 million.
American's mainline load factor -- or the percentage of total
seats filled -- was a record 78.8% during the fourth quarter,
compared to 77.9% in the final quarter of 2005, and yield, which
represents average fares, increased 4.0% compared to the fourth
quarter of 2005. American's passenger revenue per available seat
mile (unit revenue) for the fourth quarter increased 5.1% compared
to the year-ago quarter.
For the full year, unit revenue improved 8.8% versus 2005.
American's mainline cost per available seat mile (unit cost)
in the fourth quarter was down 5.6% year over year. Excluding
fuel and special items, mainline unit cost for the fourth quarter
increased 0.5% year over year. For the full year, mainline unit
costs increased 3.8% from 2005, however, excluding fuel and
special items, these costs increased by 1.3%.
During the fourth quarter, AMR paid $120 million less for fuel
than it would have paid at prices prevailing from the prior-
year period. The company estimates that its Fuel Smart
conservation program helps American save more than 90 million
gallons of fuel annually.
"Our execution under all four tenets of our Turnaround Plan
has improved our financial performance and allowed us to continue
to meet our obligations to shareholders, lenders, employees and
customers," Arpey said. "We have a lot of work left to do, but
the track we are on today is the right track to position our
company for long-term success."
4.5% Senior Notes Become
Convertible to Common Stock
As reported in the Troubled Company Reporter on Jan. 15, 2007,
AMR Corp.'s 4.5% senior convertible notes due 2024 have become
convertible into shares of AMR common stock.
The Notes have become convertible because the sale price of AMR's
common stock for at least 20 trading days in a period of 30
consecutive trading days ending on Dec. 31, 2006, was greater than
120% of the conversion price per share of AMR common stock on the
last trading day of year.
AMR's shares rose 29% in the fourth quarter.
Based in Fort Worth, Texas, AMR Corporation is the parent company
of American Airlines Inc. American Airlines -- http://www.AA.com/
-- is the world's largest airline. American, American Eagle and
the AmericanConnection regional airlines serve more than 250
cities in over 40 countries with more than 3,800 daily flights.
The combined network fleet numbers more than 1,000 aircraft.
American Airlines is a founding member of the oneworld Alliance,
whose members serve more than 600 destinations in over 135
countries and territories.
* * *
In June 2003, Moody's Investors Service placed AMR Corp.'s senior
unsecured debt and long-term corporate family ratings at Caa2 and
B3 respectively. Those ratings were placed with a stable outlook.
Moody's also assigned the company's probability of default rating
at B3 on Sept. 26, 2006.
AMR's senior unsecured debt and long-term issuer default rating
carry Fitch's CCC and B- ratings respectively.
On Feb. 22, 2006, Standard & Poor's placed B rating on the
company's long-term local and foreign issuer credits.
ANALYTICAL SURVEYS: Pannell Kerr Raises Going Concern Doubt
-----------------------------------------------------------
Pannell Kerr Forster of Texas P.C. in Houston, Texas, raised
substantial doubt about Analytical Surveys Inc.'s ability to
continue as a going concern after auditing its consolidated
financial statements for the year ended Sept. 30, 2006, and 2005.
The auditor pointed to the company's significant operating losses
in 2006 and prior years and need of external financing in place to
fund working capital requirements.
Analytical Surveys Inc.'s revenue for the fiscal year ended
Sept. 30, 2006, was $4.3 million compared with $6.1 million in
fiscal 2005. The company reduced its net loss available to common
shareholders to $383,000 from $3.3 million in fiscal 2005.
"The substantial reduction in our net loss resulted from improved
performance on our geographic information systems contracts, a
significant reduction in our overhead expenses, and the sale of
our Wisconsin production center, ASI chief executive officer Lori
Jones said.
"These enhancements came at the same time we worked to build a
meaningful presence for our ASI Energy Division within the oil and
gas industry.
"We are pleased by the progress we have made in this regard, and
intend to build on this momentum throughout fiscal 2007."
For the year ended Sept. 30, 2006, the company's balance sheet
showed $5.037 million in total assets, $2.501 million in total
liabilities, and $2.536 million in total stockholders' equity.
The company's stockholders' equity stood at $1.629 million at
Sept. 30, 2005.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?18a6
Traditional GIS Business
The company's traditional GIS data conversion business has
decreased dramatically in the past years, causing it to incur
severe operating losses.
Through cost cutting measures, it has substantially reduced its
operating losses in fiscal 2006. It collected approximately
$1 million subsequent to Sept. 30, 2006, pursuant to the
completion of production phases of its contract with Worldwide
Service Inc.
However, such cash flow derived solely from this business may be
insufficient to meet the operating and capital requirements of its
business beyond the first fiscal quarter of 2007.
Oil and Natural Gas Exploration
The company's entry into the oil and natural gas exploration and
production business is very recent. Although several oil and gas
investments have been made, the Washita County well known as the
Adrienne 1-9 is its largest investment to date, and significant
emphasis has been placed upon this investment.
The Adrienne 1-9 offsets a well drilled by Marathon Oil Company,
the Folks 1-17, which reported gas volume through May 2006
totaling more than 2 billion cubic feet of natural gas, with the
most current month's reported production for the well totaling
approximately 420 million cubic feet. However, there is no
assurance that the Adrienne 1-9 will produce natural gas.
About Analytical Surveys
Headquartered in San Antonio, Tex., Analytical Surveys Inc.
(Nasdaq: ANLT) -- http://www.asienergy.com/-- provides utility-
industry data collection, creation, and management services for
the geographic information systems markets. The company has
recently transitioned its focus toward the development of oil and
gas exploration and production opportunities. ASI's Energy
Division is focused on high-quality exploratory and developmental
drilling opportunities, as well as purchase of proven reserves
with upside potential attributable to behind-pipe reserves, infill
drilling, deeper reservoirs, and field extension opportunities.
ARBOR OF NATCHITOCHES: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: The Arbor of Natchitoches, LLC
2500 North 7th Street, Suite 400
West Monroe, LA 71291
Bankruptcy Case No.: 07-30045
Chapter 11 Petition Date: January 16, 2007
Court: Western District of Louisiana (Monroe)
Debtor's Counsel: John T. Scott, Esq.
P.O. Box 1966
West Monroe, LA 71294-1966
Tel: (318) 325-1966
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
ARMSTRONG WORLD: Asks District Court if Sea-Pac Appeal is Proper
----------------------------------------------------------------
Armstrong World Industries Inc. asks the U.S. District Court for
the District of Delaware to determine whether the U.S. Bankruptcy
Court for the District of Delaware properly found that Sea-Pac
Sales Company failed to timely initiate arbitration under the
terms of the expired underlying agreements because it did not do
so within 70 days of the dispute arising.
AWI also asks the District Court to determine that based on the
facts presented to her, the Honorable Judith K. Fitzgerald of the
U.S. Bankruptcy Court for the District of Delaware correctly
concluded that the Bankruptcy Court, rather than a panel of
arbitrators, could determine that Sea-Pac failed to timely
initiate arbitration.
Jason M. Madron, Esq., at Richards, Layton & Finger P.A., in
Wilmington, Delaware, notes that in November 2004, Sea-Pac Sales
Company filed a proof of claim asserting breaches by Armstrong
World Industries, Inc., beginning in 2000 and 2002. Sea-Pac
notified AWI on numerous occasions of the alleged breaches, but
never requested mediation or arbitration until Sept. 15, 2006.
As reported in the Troubled Company Reporter on Jan. 10, 2007,
Sea-Pac took to the U.S. District Court for the District of
Delaware an appeal from the U.S. Bankruptcy Court for the District
of Delaware's order, for reasons stated on the record at the Oct.
23, 2006 hearing, denying its request:
(i) to stay Armstrong World Industries, Inc.'s claims
objection proceeding pending mediation or arbitration in
accordance with provisions of certain agreements; and
(ii) for relief from automatic stay or, in the alternative,
from the discharge injunction under AWI's Plan of
Reorganization.
Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc.
-- http://www.armstrong.com/-- the major operating subsidiary of
Armstrong Holdings, Inc., designs, manufactures and sells interior
floor coverings and ceiling systems, around the world.
The company and its affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469).
StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell
C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts. The company and its
affiliates tapped the Feinberg Group for analysis, evaluation, and
treatment of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The
District Court Judge Robreno confirmed AWI's Modified Plan on
Aug. 14, 2006. The Clerk entered the formal written confirmation
order on Aug. 18, 2006. The company's "Fourth Amended Plan of
Reorganization, as Modified," has become effective and AWI has
emerged from Chapter 11. (Armstrong Bankruptcy News, Issue
No. 106; Bankruptcy Creditors' Service,Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Oct. 9, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the company's emergence from bankruptcy on Oct. 2, 2006.
The outlook is stable.
ARMSTRONG WORLD: Wants Intercompany Claims Okayed up to $3 Million
------------------------------------------------------------------
Armstrong World Industries Inc. asks the U.S. Bankruptcy Court for
the District of Delaware to allow the intercompany claims asserted
by Armstrong Holdings Inc. and Armstrong Worldwide Inc. as
prepetition unsecured claims in Class 6 under its fourth amended
plan of reorganization in an aggregate amount of $3,000,000, and
to disallow the Intercompany Claims in excess of $3,000,000.
AHI was the parent holding company of AWI and owned all AWWD
stock, which in turn owned all of AWI's stock.
AHI became the parent company of AWI on May 1, 2000, following AWI
shareholders' approval of a plan of exchange under which each
share of AWI common stock was automatically exchanged for one
share of AHI common stock. Stock certificates that formerly
represented shares of AWI were automatically converted into
certificates representing the same number of shares of AHI. AHI
and AWWD did not have any significant assets or operations other
than their respective equity interests.
As of AWI's bankruptcy filing, and as a result of certain
prepetition relationships and transactions, AHI and AWWD each
filed a prepetition claim in a contingent and unliquidated amount
against AWI in its Chapter 11 case. AWWD held Claim No. 3059 and
AHI held Claim No. 3060.
The Modified Plan eliminated the distribution of any consideration
to existing equity, thus, the Intercompany Claims remain disputed
and have not been resolved, Jason M. Madron, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, tells the Court.
To the extent the Intercompany Claims are allowed, they would be
treated as unsecured claims under Class 6 of the Modified Plan. In
light of the contingent and unliquidated nature of the ntercompany
Claims, and to facilitate the calculation of the pro rata share
with respect to Class 6 of the Modified Plan, AWI, AHI and AWWD
entered into a stipulation and agreement with respect to
unliquidated claims of AHI and AWWD, dated Nov. 2, 2006,
Mr. Madron informs the Court.
Pursuant to the Stipulation, the Intercompany Claims, "to the
extent Allowed, shall be prepetition Unsecured Claims in Class 6
under the [Modified] Plan and shall be capped in the aggregate
amount of $30,000,000."
The Stipulation further provides that subject to the approval of
the Court, the parties agree the aggregate minimum amount of the
Intercompany Claims will be $3,000,000.
Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc.
-- http://www.armstrong.com/-- the major operating subsidiary of
Armstrong Holdings, Inc., designs, manufactures and sells interior
floor coverings and ceiling systems, around the world.
The company and its affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469). StephenKarotkin,
Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied,
Esq., at Richards, Layton & Finger, P.A., represent the Debtors in
their restructuring efforts. The company and its affiliates
tapped the Feinberg Group for analysis, evaluation, and treatment
of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The
District Court Judge Robreno confirmed AWI's Modified Plan on
Aug. 14, 2006. The Clerk entered the formal written confirmation
order on Aug. 18, 2006. The company's "Fourth Amended Plan of
Reorganization, as Modified," has become effective and AWI has
emerged from Chapter 11.
* * *
As reported in the Troubled Company Reporter on Oct. 9, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the Company's emergence from bankruptcy on Oct. 2, 2006.
The outlook is stable.
BANCROFT CAP: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Bancroft Cap Company
P.O. Box 1207
Cabot, AR 72023
Bankruptcy Case No.: 07-10234
Type of Business: The Debtor designs and manufactures uniform
headwear for military, airlines, police, fire,
security, and the U.S. post office.
See http://www.bancroftcaps.com/
Chapter 11 Petition Date: January 16, 2007
Court: Eastern District of Arkansas (Little Rock)
Debtor's Counsel: Frederick S. Wetzel, Esq.
Frederick S. Wetzel, P.A.
200 North State Street, Suite 200
Little Rock, AR 72201
Tel: (501) 663-0535
Total Assets: $3,919,386
Total Debts: $1,945,557
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
R.M. Ott, Inc. $77,415
1352 Main Street
Millis, MA 02054
MCM Data Services, Inc. $37,215
Box 3261
Abilene, TX 79604
Day Leather Corp. $29,702
1715 Cortland Court
Addison, IL 60101
The Leather Group, Inc. $18,103
UPS $10,541
Wonder State Box Co. $10,321
M.J. Cahn Co., Inc. $10,210
Mitchell Williams Selig Gates & Woodyard $9,062
Paul Dubin Co., Inc. $8,773
Action Embroidery $7,649
Texon $7,200
Arvest Central Bank $6,962
Lederfabrik Garnier $6,820
HLC Industries $6,535
Alco Dyes & Chemicals $6,362
Shaheen Art Services $6,300
Cobmex $4,521
Watkins Motor Lines, Inc. $4,513
Scarborough Company $4,145
Mann, Hasson & Co., PA $3,573
BEAR STEARNS: Fitch Rates $1 Mil. Class II-B-5 Certificates at B
----------------------------------------------------------------
Fitch rates Bear Stearns Asset Backed Securities Trust 2007-SD1,
Asset-Backed Certificates, series 2007-SD1:
-- $42,448,000 class I-A-1 'AAA';
-- $26,591,000 class I-A-2A 'AAA';
-- $2,799,000 class I-A-2B 'AAA';
-- $30,299,000 class I-A-3A 'AAA';
-- $3,190,000 class I-A-3B 'AAA';
-- $1,963,098 class I-PO 'AAA';
-- Interest Only class I-X 'AAA';
-- $54,876,000 class II-1A-1 'AAA';
-- $6,860,000 class II-1A-2 'AAA';
-- $41,008,000 class II-2A-1 'AAA';
-- $5,127,000 class II-2A-2 'AAA';
-- $36,674,000 class II-3A-1 'AAA';
-- $4,585,000 class II-3A-2 'AAA';
-- $5,410,000 class I-B-1 'AA';
-- $7,870,000 class II-B-1 'AA';
-- $3,040,000 class I-B-2 'A';
-- $2,983,000 class II-B-2 'A';
-- $1,945,000 class I-B-3 'BBB';
-- $2,154,000 class II-B-3 'BBB';
-- $1,216,000 class I-B-4 'BB';
-- $911,000 class II-B-4 'BB';
-- $790,000 class I-B-5 'B'; and,
-- $1,907,801 class II-B-5 'B'.
The 'AAA' rating of class I certificates reflects the 11.75%
credit enhancement provided by the 4.45% class I-B-1, 2.50% class
I-B-2, 1.6% class I-B-3, 1% class I-B-4, 0.65% class I-B-5, and
1.55% class I-B-6.
The 'AAA' rating of class II certificates reflects the 10% credit
enhancement provided by the 4.75% class II-B-1, 1.80% class II-B-
2, 1.30% class II-B-3, 0.55% class II-B-4, 0.45% class II-B-5, and
1.15% class II-B-6. In addition, the ratings on the certificates
reflect the quality of the underlying collateral, and Fitch's
level of confidence in the integrity of the legal and financial
structure of the transaction.
The mortgage pool consists of fixed, hybrid and adjustable rate
mortgage loans secured by first liens on one- to four-family
residential properties. Loan Group I consists of fixed rate
mortgages with an aggregate principal balance of $121,575,802.
Loan Group II consists of hybrid and adjustable rate mortgages
with an aggregate principal balance of $165,701,801. The class I
certificates will be entitled to receive distributions solely with
respect to Group I mortgage loans. The class II certificates will
be entitled to receive distributions solely with respect to Group
II mortgage loans. As of the cut-off date, Dec 1, 2006, the
mortgage loans had a weighted average loan-to-value ratio of
78.75% and 70.54%, weighted average coupon of 6.435% and 5.836%,
and an average principal balance of $185,047 and $354,064, for
loan group I and group II, respectively. Single-family properties
account for 73.10% of the mortgage pool for group I and 75.93% for
group II. The two largest state concentrations are Florida, and
California for the two loan groups.
None of the mortgage loans is a 'high cost' loan as defined under
any local, state or federal laws.
Bear Stearns Asset Backed Securities I LLC deposited the loans
into the trust, which issued the certificates, representing
beneficial ownership in the trust. Citibank, N.A. will act as
Trustee. EMC Mortgage Corp., rated 'RMS3+' by Fitch, will act as
Master Servicer for this transaction.
BRAND SERVICES: First Reserve Offer Cues S&P's Neg. CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' corporate credit
rating on Brand Services Inc. on CreditWatch with negative
implications after the news that private equity sponsor First
Reserve Corp. has signed an agreement to acquire Brand Services.
Concurrently, the ratings were removed from CreditWatch with
positive implications, where they were placed on May 24, 2006.
"The CreditWatch listing indicates that Brand could become more
leveraged as a result of the transaction, and that the ratings
could be affirmed or lowered depending on the overall financing of
the transaction and credit quality," said Standard & Poor's credit
analyst Aniki Saha-Yannopoulos.
CABLEVISION SYSTEMS: Fitch Holds Junk Rating on Sr. Unsecured Debt
------------------------------------------------------------------
Fitch has affirmed the 'B+' Issuer Default Rating assigned to
Cablevision Systems Corporation and its wholly owned subsidiary
CSC Holdings, Inc. and has removed CVC and CSC from Rating Watch
Negative.
In addition, Fitch has affirmed specific issue ratings and
Recovery Ratings assigned to CSC as well as removed these ratings
from Rating Watch Negative.
The Rating Outlook on Cablevision and CSC is Negative.
Approximately $12.6 billion of debt as of Sept. 30, 2006 is
affected by Fitch's action.
Fitch's rating action follows the rejection by the Special
Transaction Committee of an offer from CVC's controlling
shareholders to acquire the outstanding shares of CVC for $30 per
share in an all cash transaction.
Fitch originally placed the ratings of CVC and CSC on Rating Watch
Negative on Oct. 9, 2006 after the report that Cablevision's
controlling shareholder, the Dolan family, offered to buy out
Cablevision's public shareholders for $27 per share in an all cash
transaction. The original offer was subsequently increased on
Jan. 12, 2007 to $30 per share. Since the $30 per share offer was
characterized by the Dolans' as their best and final offer, Fitch
does not expect further negotiation between the parties regarding
the purchase offer.
Fitch's ratings and Negative Rating Outlook reflect Fitch's
ongoing concern related to the company's financial policy and the
potential for the company to continue to place greater priority on
returning capital to shareholders at the expense of bond holders.
Additionally the rating outlook considers the possibility that
company management will use distributions from the restricted
group to fund other investments. Fitch expects that the negative
rating outlook will remain in place until the company's credit
profile has sufficient financial flexibility relative to the
rating category to potentially accommodate such management
decisions in a credit neutral manner.
Fitch has affirmed these ratings:
-- Issuer Default Rating 'B+';
-- Senior Unsecured Debt 'CCC+/RR6'.
Fitch also affirmed these CSC ratings:
-- IDR 'B+';
-- CSC Senior secured bank facility 'BB/RR1';
-- Senior unsecured debt - 'BB-/RR3';
Fitch's Recovery Ratings are a relative indicator of creditor
recovery prospects on a given obligation within an issuers'
capital structure in the event of a default.
CDO REPACK: S&P Puts Class D Notes Rating on Negative CreditWatch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on classes
D-1 and D-2 from CDO Repack SPC Ltd.'s series BSCMS 1999-CLF1
class D notes due 2030 on CreditWatch with negative implications.
The sole source of cash flow for these two classes comes from the
class D certificates from Bear Stearns Commercial Mortgage
Securities' series 1999-CLF1 transaction. The rating on the class
D certificate from this transaction is currently on CreditWatch
with negative implications because of diminished credit support
for the class caused by the liquidation of an asset occupied by
Winn-Dixie.
Standard & Poor's will resolve the CreditWatch placement after S&P
completes a full review of the Bear Stearns 1999-CLF1 transaction.
Ratings Placed On Creditwatch Negative
CDO Repack SPC Ltd.
BSCMS 1999-CLF1 Class D Notes Due 2030
Rating
------
Class To From
----- -- ----
D-1 BBB-/Watch Neg BBB-
D-2 BB+/Watch Neg BB+
CENTEX HOME: S&P Cuts Rating on Class B-2 Certs. to BB from BBB-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B-2 mortgage-backed security issued by Centex Home Equity Loan
Trust 2002-C to 'BB' from 'BBB-'.
Concurrently, the ratings on classes B-1 and B-2 from this series
were placed on CreditWatch with negative implications. In
addition, the rating on class BV from series 2002-A remains on
CreditWatch negative. At the same time, the ratings on 195
other Centex Home Equity Loan Trust transactions were affirmed.
The downgrade and CreditWatch placements are based on pool
performance that has allowed monthly losses to outpace monthly
excess interest, allowing the overcollateralization level to
decline below its target. Currently, O/C is 0.38% of the original
pool balance, below its target of 0.50%. In addition, 18.23% of
the loans in the current pool are severely delinquent.
Cumulative losses are 3.30% of the original pool balance.
The affirmations on the non-bond-insured certificates are based on
current credit support levels that are adequate to maintain the
current ratings on the securities. In these transactions,
cumulative losses range from 0.00% to 3.3% of the original pool
balances. In addition, 90-plus-day delinquencies range from 2.44%
to 18.94% of the current pool balances. The affirmations on the
bond-insured transactions are based on the financial strength
rating of the related insurance company, either MBIA Insurance
Corp. or Financial Security Assurance Inc.
Standard & Poor's will closely monitor the performance of the
transaction on CreditWatch. If monthly losses decline to a point
at which they no longer outpace monthly excess interest, and the
level of O/C has not been further eroded, Standard & Poor's will
affirm the ratings and remove them from CreditWatch.
Conversely, if losses continue to outpace excess interest, and the
level of O/C continues to decline, further negative rating actions
can be expected.
All of these transactions receive credit support from a
combination of excess interest, O/C, and subordination. In
addition, series 1999-2 and 1999-3 receive credit support from
bond insurance policies issued either by MBIA Insurance Corp. or
Financial Security Assurance Inc. The transactions with bond
insurance are denoted with an asterisk in the rating list below.
The underlying collateral for these transactions is mostly fixed-
or adjustable-rate, 30-year mortgage loans on one- to four-family
homes. These loans were either originated or purchased by Centex
Home Equity Corp. according to the guidelines that target
borrowers with less-then-perfect credit histories. The proceeds
from these mortgage loans were used to finance property
improvements, consolidate debt, refinance existing mortgage loans,
provide a limited amount of cash to the borrower, or a combination
thereof.
Rating Lowered And Placed On Creditwatch Negative
Centex Home Equity Loan Trust
Series Class To From
------ ----- -- ----
2002-C B-2 BB/Watch Neg BBB-
Rating Placed On Creditwatch Negative
Centex Home Equity Loan Trust
Rating
------
Series Class To From
------ ----- -- -----
2002-C B-1 BBB/Watch Neg BBB
Rating Remaining On Creditwatch Negative
Centex Home Equity Loan Trust
Series Class Rating
------ ----- ------
2002-A BV BBB-/Watch Neg
Ratings Affirmed
Centex Home Equity Loan Trust
Series Class Rating
------ ----- ------
1999-2* A-5, A-6, A-7 AAA
1999-3* A-1, A-2 AAA
2002-A AF-4, AF-5, AF-6, A-V AAA
2002-A MF-1, MV-1 AA
2002-A MF-2, MV-2 A
2002-A BF BBB
2002-C AF-4, AF-5, AF-6 AAA
2002-C A-V NR
2002-C M-1 AA
2002-C M-2 A
2002-D AF-4, AF-5, AF-6 AAA
2002-D M-1 AA+
2002-D M-2 A
2002-D B BBB
2003-A AF-4, AF-5, A-6, A-IO AAA
2003-A M-1 AA+
2003-A M-2 A
2003-A M-3 BBB+
2003-A B BBB
2003-B AF-4, AF-5, AF-6, AV AAA
2003-B M-1 AA+
2003-B M-2 A
2003-B M-3 BBB+
2003-B B BBB
2003-C AF-4, AF-5, AF-6 AAA
2003-C M-1 AA
2003-C M-2 A
2003-C M-3 BBB+
2003-C B BBB
2004-A AF-4, AF-5, AF-6 AAA
2004-A M-1 AA
2004-A M-2 A+
2004-A M-3 A
2004-A M-4 A-
2004-A M-5 BBB+
2004-A B BBB
2004-B AF-3, AF-4, AF-5, AF-6 AAA
2004-B AV-1, AV-4, AV-5 AAA
2004-B M-1 AA+
2004-B M-2 AA
2004-B M-3 AA-
2004-B M-4 A+
2004-B M-5 A
2004-B M-6 A-
2004-B M-7 BBB+
2004-B B BBB
2004-C AF-1, AF-2, AF-3, AF-4, AF-5 AAA
2004-C AF-6, AV-1, AV-2, AV-3, AV-4 AAA
2004-C AV-5 AAA
2004-C M-1 AA+
2004-C M-2 AA
2004-C M-3 AA-
2004-C M-4 A+
2004-C M-5 A
2004-C M-6 A-
2004-C M-7 BBB+
2004-C B BBB
2004-D AF-2, AF-3, AF-4, AF-5, AF-6 AAA
2004-D AV-1, AV-2, AV-4, AV-5 AAA
2004-D MF-1, MV-1 AA
2004-D MV-2 AA-
2004-D MV-3 A+
2004-D MF-2, MV-4 A
2004-D MV-5 A-
2004-D MF-3, MV-6 BBB+
2004-D BF, BV BBB
2005-A AF-1, AF-2, AF-3, AF-4, AF-5 AAA
2005-A AF-6, AV-2, AV-3 AAA
2005-A M-1 AA+
2005-A M-2 AA
2005-A M-3 AA-
2005-A M-4 A+
2005-A M-5 A
2005-A M-6 A-
2005-A M-7 BBB+
2005-A B BBB
2005-B AF-1, AF-2, AF-3, AF-4, AF-5 AAA
2005-B AF-6, AV-1, AV-2, AV-3, AV-4 AAA
2005-B M-1 AA+
2005-B M-2 AA
2005-B M-3 AA-
2005-B M-4 A+
2005-B M-5 A
2005-B M-6 A-
2005-B M-7 BBB+
2005-B B BBB
2005-C AF-1, AF-2, AF-3, AF-4, AF-5 AAA
2005-C AF-6, AV-1, AV-2, AV-3 AAA
2005-C M-1 AA+
2005-C M-2 AA
2005-C M-3 AA-
2005-C M-4 A+
2005-C M-5 A
2005-C M-6 A-
2005-C M-7 BBB+
2005-C B-1 BBB
2005-C B-2 BBB-
2005-D AF-1, AF-2, AF-3, AF-4, AF-5 AAA
2005-D AF-6, AV-1, AV-2 AAA
2005-D M-1 AA+
2005-D M-2 AA
2005-D M-3 AA-
2005-D M-4 A+
2005-D M-5 A
2005-D M-6 A-
2005-D M-7 BBB+
2005-D B-1 BBB
2005-D B-2 BBB-
2005-D B-3 BB+
2006-A AV-1, AV-2, AV-3, AV-4 AAA
2006-A M-1 AA+
2006-A M-2, M-4 AA
2006-A M-5 A+
2006-A M-6 A
2006-A M-7 A-
2006-A M-8 BBB+
2006-A M-9, M-11 BBB-
*Denotes bond insurance.
Analytic services provided by Standard & Poor's Ratings Services
(Ratings Services) are the result of separate activities designed
to preserve the independence and objectivity of ratings opinions.
The credit ratings and observations contained herein are solely
statements of opinion and not statements of fact or
recommendations to purchase, hold, or sell any securities or make
any other investment decisions. Accordingly, any user of the
information contained herein should not rely on any credit rating
or other opinion contained herein in making any investment
decision. Ratings are based on information rec
CHARLIE MAC: S&P Affirms Rating on Class B-5 Certificates at B
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
26 classes of mortgage pass-through certificates from Charlie Mac
Trust's series 2004-1 and 2004-2.
The affirmations reflect actual and projected credit enhancement
percentages that are sufficient to support the assigned ratings.
The projected credit support percentages are 1.25% and 1.19% for
series 2004-1 and 2004-2, respectively. The mortgage loans in
both series have experienced zero cumulative losses and very low
delinquencies.
Credit support for these transactions is provided by
subordination, with a shifting interest feature. In addition,
class L from series 2004-2 is also supported by a letter of credit
facility provided by U.S. Central Federal Credit Union. Each pool
of mortgage loans consists of fixed-rate, fully amortizing,
conventional, first-lien mortgages secured by
residential properties.
Ratings Affirmed
Charlie Mac Trust
Mortgage Pass-Through Certificates
Series Class Rating
------ ----- ------
2004-1 A-1,A-2,A-3,A-4 AAA
2004-1 A-5,A-6,A-7,A-8,A-9,PO AAA
2004-1 R-I,R-II,R-III AAA
2004-1 B-1 AA
2004-1 B-2 A
2004-1 B-3 BBB
2004-1 B-4 BB
2004-1 B-5 B
2004-2 A-1,A-2,A-3,A-R,L AAA
2004-2 B-1 AA
2004-2 B-2 A
2004-2 B-3 BBB
CLFX CORP: Moody's Places Ba3 Rating on Review, and may Downgrade
-----------------------------------------------------------------
Moody's Investors Service has placed all ratings for CLFX
Corporation under review for possible downgrade. Colfax's still
pending acquisition of Lubrication Systems Co. for $28.5 million,
subsequent financing via a $55 million add-on to its existing Term
Loan B, and an increase to total adjusted leverage prompted
Moody's review. The company's inability to produce free cash flow
-- contrary to Moody's previous expectations -- at or near the
peak of an industry cycle, a relatively high level of ongoing
contingent liabilities, and Moody's uncertainty regarding Colfax's
business and financial strategies also prompted the review.
On Review for Possible Downgrade:
* CLFX Corporation
-- Corporate Family Rating, Placed on Review for Possible
Downgrade, currently Ba3
Outlook Actions:
* CLFX Corporation
-- Outlook, Changed To Rating Under Review From Stable
Moody's review will focus on Colfax's ability to deliver on
Moody's previous expectations of free cash flow, the asbestos-
related liabilities and settlement costs and the potential for
material acquisitions, which could result in a more aggressive
capital structure. While the Term Loan B add-on increases
unadjusted leverage and is in line with Ba-rated diversified
manufacturing issuers, high adjusted leverage, free cash flow
generation materially below Moody's expectations, the projected
cash costs associated with on-going asbestos litigation and future
pension funding requirements weakly position the company relative
to its Ba3-rated peers.
Adjusting Colfax's debt for approximately $75 million of asbestos-
related liabilities, nearly $90 million of underfunded pension
obligations along with Moody's other standard adjustments, results
in leverage of over 5 times pro forma 2006 EBITDA.
Additionally, Moody's review will also consider Colfax's longer-
term exposure to cyclical end-markets, its debt-financed growth
strategy, and the potential for the company to distribute future
cash flow to shareholders in lieu of debt reduction.
Moody's acknowledge Colfax's strong brand names and defensible,
niche market positions in the global pump market, diverse customer
base and solid interest coverage. Favorable sales and order
trends in many of Colfax's sector and geographic end markets,
strong recent operating performance as well as the potential for
further operational improvements help mitigate credit risk.
Additionally, though nominal in size and scale, LSC appears to be
a complementary acquisition and should provide Colfax with
improved sales opportunities.
During the review, Moody's conclusion that Colfax will remain
unable to deliver on free cash flow expectations, or is highly
likely to undertake capital structure transforming acquisitions
within the rating horizon could prompt a one-notch downgrade to
the Ba3 corporate family rating. More specifically, Moody's
belief that Colfax will likely encounter margin contraction, have
higher than expected asbestos-related litigation payments, or
undertake materially leveraging acquisitions or shareholder
distributions that suggest free cash flow-to-adjusted debt below
5% in 2007 could prompt a downgrade.
Moody's could confirm the Ba3 corporate family rating if there
appears a high probability that margins will continue to improve,
and that Colfax will be able to meet Moody's previous cash flow
expectations on a forward-looking basis, and will use such cash to
reduce adjusted debt in lieu of shareholder distributions.
Moody's notes that Colfax's bank debt includes a $50 million
revolver due 2008, the aforementioned $178.5 million Term Loan B
due 2011 and a ?27 million Term Loan C due 2011. In addition to
financing the LSC acquisition, the company will use the remaining
proceeds from the $55 million Term Loan B add-on to pay down $11.5
million of revolver outstandings, prepay an expected 2007 pension
obligation of $8.6 million, and for fees and expenses.
Additionally, Moody's notes that Colfax has amended its credit
agreement primarily to allow for the $55 million Term Loan B
add-on, to reset several financial covenant levels and to permit
the LSC acquisition without utilizing existing acquisition
availability under the credit agreement.
CLFX Corporation, based in Richmond, Virginia, is a global
manufacturer of flow control products, with estimated pro forma
revenues in excess of $410 million for the year ended
Dec. 31, 2006.
COGECO CABLE: DBRS Holds Rating on Senior Secured Notes at BB
-------------------------------------------------------------
Dominion Bond Rating Service confirmed the ratings of Cogeco Cable
Inc., Senior Secured Notes & Debentures at BB; and Second Secured
Debentures, Series A, at BB (low), and has changed the trends to
Positive from Stable following the announcement by the Company
that it intends to issue up to $192 million of equity. DBRS
expects the proceeds to be used for debt repayment and for general
corporate purposes.
The Positive trend reflects the Company's commitment to debt
reduction following Cogeco's acquisition of Cabovisao-Televisao
por Cabo, S.A. in August, 2006, financed entirely by debt.
Assuming the entire amount of the proceeds are used for debt
reduction, DBRS expects the Company's credit metrics to improve
moderately, with debt-to-EBITDA approaching 3.2x and cash flow-to-
debt in excess of 0.2x by the end of 2007. DBRS also expects
Cogeco's free cash flow to continue to be modestly positive in
fiscal 2007 with further moderate upside potential depending on
the timing of its debt-reduction efforts.
DBRS notes the Company's Canadian operations continue to
demonstrate strong performance due to subscriber gains, growth
in new services and reduced churn rates due to its bundling
strategy. However, DBRS also notes the Company's rating includes
the increased business risk surrounding its Portugal operations,
including the competitive landscape and the regulatory
environment.
DBRS notes the Positive trend is based on expectations that: the
Company will use the proceeds of the equity offering for debt
reduction; Cogeco will remain free cash flow positive; and the
financial performance will remain in line with DBRS's current
expectations. DBRS notes the potential for an improvement in
ratings following further debt reduction, equity issuances and
increased comfort regarding its business risk profile in Portugal.
DAVID COLETTA: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: David Coletta
6241-45 Dicks Avenue
Philadelphia, PA 19142
Bankruptcy Case No.: 07-10285
Chapter 11 Petition Date: January 16, 2007
Court: Eastern District of Pennsylvania (Philadelphia)
Judge: Eric L. Frank
Debtor's Counsel: Carol B. McCullough, Esq.
McCullough & Eisenberg PC
530 West Street Road, Suite 201
Warminster, PA 18974
Tel: (215) 957-6411
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of his 20 Largest Unsecured
Creditors.
DELPHI CORP: Will Supply Protection Systems to Chery Automotive
---------------------------------------------------------------
Chery Automotive Co. Ltd. has awarded Delphi Corporation a
contract to provide complete Occupant Protection Systems and
integrated navigation system for several of Chery's platforms
starting in 2009, Delphi officials announced.
Delphi will integrate comprehensive Occupant Protection Systems
that match the needs of each of Chery's vehicles.
Beginning in 2009, Delphi will supply all driver and passenger
airbags, curtain airbags, side airbags, passenger seat occupant
detection systems, airbag control units, side- and frontal-impact
sensors, and seat-track position sensors on all vehicles that
Chery is currently producing.
For select Chery vehicles to be announced at a later date, Delphi
will also supply a camera-based back-up aid system and navigation
system. Delphi's integrated navigation radio LCD display will
also serve as a source for looking at what is behind the vehicle
while backing and map display.
"It is truly exciting to be named a major safety supplier for
China's fastest growing domestic auto company," said Dan Salmons,
Delphi Electronics & Safety managing director of Asia/Pacific.
"Our job now is to execute and help Chery continue on its
expansion into new markets. This business also helps Delphi
further diversify our customer portfolio."
Since 1997, Chery Automobile has grown its volume from 50,000
units in 2002 to almost 300,000 in 2006. Chery expects to
increase its production and sales volume to 1,000,000 units in
2010.
The company produces seven vehicles including Eastar, Tiggo, A5,
Cowin, V5, QQ3 and QQ6.
Chery started exporting vehicles in 2001. Last year, the company
shipped nearly 20,000 units to more than 50 countries. Future
plans call for Chery to export vehicles to the United States, the
world's largest car market.
"Chery chose Delphi over our competitors because of our price
competitiveness, capability and knowledge of the North American
market," said Charles Goad, Delphi Electronics & Safety
Entertainment & Communications Executive. "Our capability to
offer complete systems was a distinct advantage for Delphi."
Delphi designed and manufactured its first airbags in 1974.
Today, the company produces more than 20,000,000 airbag systems
per year to help vehicle manufacturers meet requirements specified
by the U.S. Federal government.
Delphi offers a number of frontal airbag designs with adaptive
features like cushion deployment volume, inflation output and
venting based on crash conditions. Delphi's dual depth airbags
are designed to enhance protection of a vehicle's front seat
occupants -- no matter what their size -- in moderate to severe
crash situations. Delphi's frontal airbags are compatible with
customer instrument panels and therefore ease of assembly.
Designed to deploy from the vehicle's roof rail, Delphi's curtain
airbags provide head protection and can be used in combination
with Delphi's door-or-seat mounted side impact airbags.
Delphi's passive occupant detection system is designed to help
automakers meet U.S. regulations. A sensing system built into the
seat detects loading force on the front passenger seat and
classifies the seat as empty or the occupant as an adult or child.
The system helps reduce potential for airbag-induced injury by
suppressing the airbag if the occupant is below a weight
threshold. It also prevents deploying the airbag unnecessarily by
suppressing the airbag if the seat is empty.
The nerve center of Delphi's occupant protection system is the
airbag control unit. This sophisticated electronic unit
interfaces with Delphi's frontal impact sensors, side impact
sensors and occupant status sensors, vehicle indicators and the
deployable safety devices. Using crash-sensing algorithms, the
airbag control unit assesses crash event severity and direction
and uses this strategy to deploy frontal, side or devices to
disconnect the battery. Delphi's Forewarn Back-Up Aid uses a
monocular camera to help prevent back up accidents. This assists
the driver in seeing what is behind the vehicle on a screen in
the instrument panel while backing up.
The Chery integrated radio navigation system sourced from Delphi
will include touch screen operation DVD, USB, MP3, SD, and rear
seat entertainment controls.
Delphi began investing in China in 1993 and now has 15 facilities
across the country. These operations manufacture more than 40
categories of products for customers in China and overseas.
Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) --
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. (Delphi Corporation Bankruptcy News,
Issue No. 54; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DLJ COMMERCIAL: Moody's Holds Junk Ratings on $20.7 Million Certs.
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of three classes
and affirmed the ratings of 11 classes of DLJ Commercial Mortgage
Corp., Commercial Mortgage Pass-Through Certificates, Series 1999-
CG3 as:
-- Class A-1A, $8,606,460, Fixed, affirmed at Aaa
-- Class A-1B, $509,118,000, Fixed, affirmed at Aaa
-- Class S, Notional, affirmed at Aaa
-- Class A-1C, $17,716,000,Fixed, affirmed at Aaa
-- Class A-2, $25,000,000, Fixed, affirmed at Aaa
-- Class A-3, $49,461,000, Fixed, affirmed at Aaa
-- Class A-4, $13,489,000, Fixed, affirmed at Aaa
-- Class A-5, $15,738,000, Fixed, upgraded to Aaa from Aa2
-- Class B-1, $17,986,000 WAC, upgraded to Aa1 from A1
-- Class B-2, $15,737,000, WAC, upgraded to A3 from Baa2
-- Class B-4, $13,489,000, Fixed, affirmed at Ba2
-- Class B-7, $8,993,000, Fixed, affirmed at Ca
-- Class B-8, $8,993,000, Fixed, affirmed at C
-- Class C, $2,765,142, Fixed, affirmed at C
As of the Jan. 10, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 16.1%
to $754.3 million from $899.3 million at securitization. The
Certificates are collateralized by 144 mortgage loans ranging from
less than 1% to 6.1% of the pool with the 10 largest loans
representing 39.7% of the pool. The largest loan in the pool is
an investment grade shadow rated loan. Forty loans, representing
46.0% of the pool, have defeased and have been replaced with U.S.
Government securities.
Eight loans have been liquidated from the pool, resulting in
aggregate realized losses of approximately $12.9 million. Four
loans, representing 2% of the pool, are currently in special
servicing. Moody's has estimated aggregate losses of
approximately $7.9 million for the specially serviced loans.
Thirty-six loans, representing 16.5% 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 94.7% and 97.7% respectively, of the pool's
performing loans. Moody's loan to value ratio for the conduit
component, excluding specially serviced loans, is 85.2% compared
to 88.7% at Moody's last full review in January 2006 and compared
to 87.7% at securitization. Moody's is upgrading Classes A-5, B-1
and B-2 due to defeasance, increased subordination levels and
stable overall pool performance. Classes A-3, A-4 A-5 and B-1
were upgraded on Dec. 8, 2006, based on a Q tool based portfolio
review.
The shadow rated loan is the LaSalle Hotel Portfolio Loan, which
consists of two cross collateralized loans secured by two hotel
properties. The largest property is the Sheraton Bloomington
Hotel, a 565-room convention hotel located in Bloomington,
Minnesota. The second property is the Westin City Center Hotel, a
407-room full service hotel located in Dallas, Texas. The
performance of both hotels has improved since last review,
especially the Westin Town Center. The portfolio's overall RevPAR
for 2005 was $74.68, compared to $63.57 at last review. The loan
also benefits from a 25-year amortization schedule and has
amortized by approximately 12.0% since securitization. Moody's
current shadow rating is Baa3, compared to Ba2 at last review.
The top three non-defeased conduit loans represent 7.1% of the
pool. The largest non-defeased conduit loan is the Atrium Loan,
which is secured by a 162,000 square foot office building located
in San Mateo, California. The property's recent performance has
been impacted by significant lease rollover that occurred in 2004
and 2005 and a decline in rental rates due to the softness of the
San Francisco office market. The property was 88% leased as of
September 2006 and it is expected that vacancy will increase by
over 10% in February 2007 due to the lease expiration of Orbital
Data Group. The loan has been on the master servicer's watchlist
for over a year due to low debt service coverage. Moody's LTV is
in excess of 100% compared to 90% at last review.
The second largest non-defeased conduit loan is the West End Court
Loan, which is secured by a 94,000 square foot Class B office
building located in Washington, D.C. The property is anchored by
The Congressional Quarterly, U.S. Department of Agriculture and
CQ Press. The property is 100% occupied. Moody's LTV is 70.9%,
compared to 90.1% at last review.
The third largest non-defeased conduit loan is the Ameriserve
Loan, which is secured by two food distribution facilities
totaling 362,000 square feet. The properties are 100% leased and
are located in New Jersey and Michigan. Moody's LTV is 76.5%,
compared to 77.1% at last review.
The pool's collateral is a mix of U.S. Government securities,
multifamily, retail, office, lodging and industrial and self
storage. The collateral properties are located in 34 states plus
the District of Columbia. The top five state concentrations are
California, Texas, Minnesota, North Carolina and Michigan. All of
the loans are fixed rate.
DURA AUTOMOTIVE: RSM Updates Ontario Court on Chapter 11 Cases
--------------------------------------------------------------
RSM Richter Inc., as Dura Automotive Systems Inc. and its debtor-
affiliates' information officer, delivered its first report with
the Ontario Superior Court of Justice (Commercial List) in Canada
to:
(a) provide with background information concerning the
Debtors, including information with respect to their
Canadian operations;
(b) provide updates with respect to developments in the
Debtors' restructuring proceedings since November 1, 2006;
(c) summarize and seek approval of its activities since
November 1, 2006; and
(d) recommend that the Ontario Court approve the Debtors'
request for an extension of its stay of proceedings to
March 15, 2007.
A full-text copy of RSM Richter's First Report is available for
free at http://ResearchArchives.com/t/s?18a7
RSM Richter reported these material developments with respect to
the Debtors' Canadian operations:
(1) the Canadian facilities at Bracebridge, Stratford and
Brantford, comprising the Debtors' Canadian operations,
have terminated a number of employees:
A. Hourly Unionized Employees
No. of Hourly No. of Hourly
Employees Employees as
Facilities Terminated of 11/01/06
---------- ------------- -------------
Bracebridge 57 220
Stratford 23 238
Brantford 34 90
B. Salaried Employees
No. of Salaried No. of Salaried
Employees Employees as
Facilities Terminated of 11/01/06
---------- ------------- -------------
Bracebridge 8 72
Stratford -- 42
Brantford -- 23
(2) the Canadian facilities have continued to operate in the
normal course. To the extent requested, RSM Richter has
been assisting the Canadian Operations with common
"day-one" issues that the facilities faced when they
entered formal insolvency proceedings.
RSM Richter attended a meeting on December 4, 2006, with the
Debtors and the International Association of Machinists and
Aerospace Workers to inform IAMAW an opportunity to detail its
concerns with respect to various employee issues.
IAMAW, Local Lodge No. 1927, represents the hourly workforce at
the Stratford Facility. Local 61 of the Canadian Automotive
Workers' Union represents the hourly workforce at the Bracebridge
Facility while CAW's Local 397 represents the Brantford
Facility's hourly workforce.
Moreover, RSM Richter:
* reviewed and commented on certain of the Debtors' draft
application materials;
* posted copies of various Court materials, including the
Ontario Court's Initial Order dated November 1, 2006, on
its Web site;
* placed a notice regarding the Debtors' Canadian filings
in The Globe and Mail (National Edition) around Nov. 6,
2006;
* spoke routinely with each Canadian facility in order to
determine if any critical issues are affecting operations;
* convened periodic conference calls with each of the
facilities;
* worked intensively with the Bracebridge Facility to assist
it to obtain a continued supply of goods and services;
* responded to calls from creditors or suppliers concerning
the Debtors' proceedings;
* attended at conference calls with the Canadian Debtors
and their legal counsel, Davies Ward Phillips and Vineberg
LLP, to discuss the operational issues and other
developments; and
* corresponded with Davies Ward to stay apprised of the
developments in the Debtors' Chapter 11 proceedings.
Stay Extended to March 15
At the Debtors' request, Justice Lederman extends to March 15,
2007, the expiration of the stay enjoining and restraining
creditors and parties-in-interest from initiating or continuing
actions in any court or tribunal in Canada against the Debtors or
that affect the their ability to carry on their business.
In support of the Debtors' request, RSM Richter informed the
Ontario Court that the Debtors have been diligently pursuing
restructuring initiatives and have been acting in good faith.
The Court approves the activities and conduct of RSM Richter as
set forth in the First Report.
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. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DURA AUTOMOTIVE: Ontario Ct. Recognizes U.S. Ct.'s Final DIP Order
------------------------------------------------------------------
The Honorable Justice Lederman of the Ontario Superior Court of
Justice (Commercial List) in Canada rules that the Final DIP
Order dated Nov. 21, 2006, of the U.S. Bankruptcy Court for the
District of Delaware is given full effect in all provinces and
territories of Canada.
Justice Lederman previously granted the directors and officers of
Dura Automotive Systems Inc.'s Canadian affiliates a charge on the
Debtors' property not exceeding $2,500,000 in the aggregate, as
security for the their indemnification obligations to their
directors and officers.
Justice Lederman declared that the Directors' Charge rank
subordinate and junior in priority to the claims, liens, charges
and security interests arising in connection with the first lien
revolver.
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. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
EDGEWATER FOODS: Nov. 30 Balance Sheet Upside-Down by $22.4 Mil.
----------------------------------------------------------------
Edgewater International Foods Inc.'s balance sheet at Nov. 30,
2006, showed $4.4 million in total assets and $26.9 million in
total liabilities, resulting in a $22.4 million total
stockholders' deficit.
The company's balance sheet at Nov. 30, 2006, also showed strained
liquidity with $2.3 million in total current assets available to
pay $3.5 million in total current liabilities.
Edgewater International Foods Inc. reported a $3.1 million net
loss on $123,187 of revenues for the first quarter ended
Nov. 30, 2006, compared with a $330,742 net loss on $160,035 of
revenues for the same period in 2005.
The decrease in revenue was mainly the result of a slower than
anticipated start to the 2004 harvest and an unexpected early
season winter storm that forced the company to curtail harvesting
operations during at least one week in November. Revenue during
the quarter ended Nov. 30, 2005, was also bolstered by a one-time
sale on inventory equipment and larger scallop seed sales.
The increase in net loss is mainly due to a loss of approximately
$2.8 million related to the change in the fair value of warrants.
No such loss was recorded for the period ended Nov. 30, 2005.
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?18a2
Going Concern Doubt
LBB & Associates Ltd. LLP in Houston, Texas, expressed substantial
doubt about Edgewater Foods International Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Aug. 31,
2006. The auditing firm pointed to the company's recurring
operating losses since inception.
About Edgewater Foods
Based in Qualicum Beach, B.C., Edgewater Foods International Inc.
(OTC BB: EDWT.OB) -- http://www.edgewaterfoods.com/-- is the
parent company of Island Scallops Ltd., a Vancouver Island
aquaculture company. ISL was established in 1989 and for over 15
years has successfully operated a scallop farming and marine
hatchery business. ISL is dedicated to the farming, processing
and marketing of high quality, high value marine species: scallops
and sablefish.
ENTECH ENVIRONMENTAL: Mendoza Berger Raises Going Concern Doubt
---------------------------------------------------------------
Mendoza Berger & Company LLP, in Irvine, California, expressed
substantial doubt about Entech Environmental Technologies Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the year ended
Sept. 30, 2006. The auditing firm cited the company's significant
losses from operations and that the company's viability is
dependent upon its ability to obtain future financing and the
success of its future operations.
Entech Environmental reported a $1.5 million net loss on
$4.6 million of revenues for the year ended Sept. 30, 2006,
compared with a $1.2 million net loss on $5.1 million of revenues
for the year ended Sept. 30, 2005.
During 2006, the company recognized $2.2 million in revenue from
construction services and $2.4 million from maintenance services.
The decrease in revenues is because the company had more
construction and maintenance contracts in 2005 than 2006.
Loss from continuing operations for 2006 totaled $1.28 million as
compared to $1.15 million in 2005.
The company recorded a loss from discontinued operations of
$184,787 for 2006 compared to $81,952 for 2005 related to the
disposal of the Consumer Services division.
At Sept. 30, 2006, the company's balance sheet showed $1.7 million
in total assets and $3.4 million in total liabilities, resulting
in a $1.7 million total stockholders' deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $1.2 million in total current assets
available to pay $3.2 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?189a
About Entech
Entech Environmental Technologies Inc. (OTCBB: EEVT), fka Cyber
Public Relations Inc., owns and operates three subsidiary
construction related firms and is a provider of construction,
repair, and maintenance services for fueling related businesses in
California, Arizona and Nevada. The company offers complete
planning and construction services for gas stations, convenience
stores, fast food restaurants, retail shopping centers, and truck
stops, as well as comprehensive remodeling and re-imaging services
and, regulatory compliance testing. The company provides
diagnostic and maintenance services to petroleum service stations
in the southwestern part of the United States of America.
FAIRPOINT COMMS: S&P Places BB- Corp. Credit Rating on Pos. Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
Charlotte, North Carolina-based FairPoint Communications
Inc., including its 'BB-' corporate credit rating, on CreditWatch
with positive implications.
However the '4' recovery rating on the bank loan is not on
CreditWatch.
"The CreditWatch placement follows the announcement that FairPoint
plans to merge with a newly formed wireline company created by the
spin-off of a portion of Verizon Communication Inc's. wireline
assets," said Standard & Poor's credit analyst Susan Madison.
"The CreditWatch placement reflects our expectation that the
greater scale and market presence of the combined company modestly
strengthens FairPoint's business profile," said Ms. Madison.
FairPoint and Verizon expect to complete the proposed spin-off and
merger transactions over the next 12 months. The merger is
conditional upon several state and federal regulatory approvals,
approval by FairPoint shareholders, and satisfaction of other
customary closing conditions.
FIRST FRANKLIN: Moody's Downgrades Ratings on Eight Cert. Classes
-----------------------------------------------------------------
Moody's Investors Service downgraded nine certificates from three
First Franklin Mortgage deals, issued in 2001 and 2003.
Moody's has also placed on review for possible downgrade five
certificates from two First Franklin Mortgage deals, issued in
2003. The transactions consist of subprime first-lien adjustable
and fixed-rate mortgage loans. The loans are all originated by
First Franklin Financial Corporation.
The nine subordinate certificates from the First Franklin Series
2001-FF2, 2003-FF1 and 2003-FF4 transactions have been downgraded
while five subordinate certificates from the First Franklin Series
2003-FFH1 and 2003-FFH2 transactions have been placed on review
for possible downgrade.
These actions have been taken because existing credit enhancement
levels are low given the current projected losses on the
underlying pools. All the pools in these transactions have passed
their performance triggers causing erosion in credit support in
the form of tranche pay down and overcolateralization being
released. The pool of mortgages has seen losses in recent months
and future loss could cause a more significant erosion of the OC.
The underlying pools in the transaction are below the OC floor as
of the December reporting date.
These are the rating actions:
* First Franklin Mortgage Loan Trust
-- Series 2001-FF2; Class M-2, downgraded to Ba3 from A2
-- Series 2001-FF2; Class M-3, downgraded to B3 from Baa2
-- Series 2003-FF1; Class M-2, downgraded to Baa2 from A2
-- Series 2003-FF1; Class M-3F,downgraded to B1 from Baa1
-- Series 2003-FF1; Class M-3V,downgraded to B1 from Baa1
-- Series 2003-FF1; Class M-4, downgraded to B1 from Baa2
-- Series 2003-FF4; Class M-4, downgraded to Ba1 from Baa1
-- Series 2003-FF4; Class M-5, downgraded to Ba2 from Baa2
-- Series 2003-FF4; Class M-6, downgraded to Ba3 from Baa3
Review for Downgrade:
-- Series 2003-FFH1; Class M-4, current rating Baa1, under
review for possible downgrade;
-- Series 2003-FFH1; Class M-5, current rating Baa3, under
review for possible downgrade;
-- Series 2003-FFH1; Class M-6, current rating B1, under
review for possible downgrade;
-- Series 2003-FFH2; Class M-6, current rating Baa3, under
review for possible downgrade; and,
-- Series 2003-FFH2; Class B, current rating Ba2, under review
for possible downgrade.
FOAMEX INT'L: Wants to Solicit Plan Acceptances Until February 14
-----------------------------------------------------------------
Foamex International Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend, until
Feb. 14, 2007, their exclusive period within which they can
solicit acceptances to their Court-approved Plan of
Reorganization.
The Court, in a November 2006 order approving the Disclosure
Statement explaining the Debtors' Reorganization Plan, set today
as the last day to solicit acceptances to that Plan. The Court
also scheduled a Feb. 1, 2007 hearing to consider confirmation of
the Plan.
"Although the Debtors expect that the Plan will be confirmed at
the Feb. 1, 2007 confirmation hearing, the Debtors submit that a
brief extension of the exclusive period is necessary to ensure the
Debtors maintain exclusivity through the completion of the
confirmation process," Pauline K. Morgan, Esq., at Young Conaway
Stargatt & Taylor, LLP, in Wilmington, Delaware, says.
Ms. Morgan assures the Court that the requested extension will not
prejudice any creditor or shareholder.
Headquartered in Linwood, Pennsylvania, Foamex International Inc.
(FMXIQ.PK) -- http://www.foamex.com/-- is the world's leading
producer of comfort cushioning for bedding, furniture, carpet
cushion and automotive markets. The company also manufactures
high-performance polymers for diverse applications in the
industrial, aerospace, defense, electronics and computer
industries. The company and eight affiliates filed for chapter 11
protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685
through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton &
Garrison LLP, represent the Debtors in their restructuring
efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers
LLP are advising the ad hoc committee of Senior Secured
Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq.,
at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul
Ewings, LP, represent the Official Committee of Unsecured
Creditors. As of July 3, 2005, the Debtors reported $620,826,000
in total assets and $744,757,000 in total debts. On
Nov. 27, 2006, the Court approved the adequacy of the Debtors'
Second Amended Disclosure Statement. A hearing is set on Feb. 1,
2007, to consider confirmation of the Debtors' Second Amended Plan
of Reorganization.
GENERAL MOTORS: Sells More Than 9 Million Vehicles Globally
-----------------------------------------------------------
General Motors Corp. sold 9.09 million cars and trucks around the
world in 2006, according to preliminary sales figures released.
It marked the third time (2006, 2005, and 1978) the world's
largest automaker has sold more than 9 million vehicles in a
calendar year.
2006 global sales were down less than 1% from the 9.17 million
vehicles sold in 2005, reflecting a number of factors, including
planned cuts of 75,000 vehicles in daily rental fleet sales in the
United States and offsetting growth in other global markets.
"GM had some notable sales successes as we continued to expand in
key growth markets around the world in 2006," John Middlebrook, GM
vice president, Global Sales, Service and Marketing Operations
said.
"In 2006, we saw 18% growth in the Asia/Pacific region, and 17%
growth in the Latin America, Africa, and Middle East region.
We're also seeing improving results in Europe where we sold more
than 2 million vehicles for the first time."
The expansion of GM's four global brands -- Chevrolet, HUMMER,
Saab, and Cadillac -- is showing concrete signs of success.
Global sales of GM's value brand, Chevrolet, were 4.3 million
vehicles compared with 2005 sales of 4.37 million. Chevrolet
showed growth in all three regions outside North America, with the
strongest performance in the Latin America, Africa and the Middle
East region, with an additional 19% (144,000 vehicles) delivered
over the 2005 level. Chevrolet also performed well in the
Asia/Pacific region, which also was up 19%. There was a 15%
increase in Chevrolet sales in Europe, compared with 2005. The
Chevrolet Aveo helped Chevrolet field a strong competitor in the
very competitive global small car market.
GM also retains its strong truck portfolio, evidenced by HUMMER
sales that grew nearly 34% globally in 2006, with 82,000 vehicles
delivered, compared with 61,000 in 2005. This performance was
paced by the continued strength of the midsize H3. While much of
this growth was in the United States (up 26%), HUMMER also saw
significant expansion in Mexico and Canada.
Saab's 2006 global sales set a record at more than 133,000
vehicles. Saab had its highest sales volume ever in Europe,
exceeding 90,000 vehicles and record sales in Spain, Belgium, and
Canada.
Cadillac posted a sales increase outside of North America last
year, thanks to 22% sales growth in Europe.
Global sales highlights include:
* At 4.97 million vehicles, 2006 sales outside of the United
States accounted for about 55% of GM's total global sales,
growing at close to 7% compared with 2005, outpacing the
industry average growth rate of 6%. The industry has seen a
10 million vehicle increase in the global automotive market
in the past five years, and the market now tops 67 million.
* In the Asia/Pacific region, GM sales of 1.26 million vehicles
topped 1 million vehicles for the second consecutive year,
and GM China saw more than 32% sales growth compared with
2005, outpacing the country's industry growth rate of 26%.
GM was the top-selling automaker in China in 2006, with
877,000 vehicles sold. For the first time, GM sold more
Buicks in China (304,000) than in the United States
(241,000).
* In the Latin America, Africa and Middle East region, GM sales
reached an all-time record 1.03 million vehicles, exceeding
1 million vehicles for the first time, up 17% in volume
compared with 2005. Truck sales were up 21% and car sales
were up 16%. GM saw volume increases in 10 of 11 major Latin
America, Africa, and Middle East markets in 2006. GM do
Brazil set an all-time domestic sales record with
410,000 vehicles delivered.
* In Europe, GM sales -- for the first time -- exceeded
2 million vehicles, up about 1%. Growth in Eastern Europe,
up 59%, led the increase. Cadillac, Corvette, HUMMER, Saab,
and Chevrolet set European sales records for their brands.
Chevrolet achieved record sales of more than
340,000 vehicles, up 15%. Saab sold more than
90,000 vehicles, beating its previous European sales record
of 82,000 sold in 2005.
Several of GM's regional brands also experienced notable growth in
2006.
Opel and Vauxhall sold 1.6 million vehicles, growing share in
14 European markets. The brands achieved segment leadership with
Meriva and Zafira -- in the monocab segment -- and second position
with Astra in the popular compact segment.
Saturn sales in the United States and Canada were up 5% compared
with 2005, largely on the popularity of the new 2007 Aura, Sky,
and Vue Green Line Hybrid. Saturn expects stronger sales this
year as it continues the launch of the Outlook crossover and
welcomes the Ion small-car replacement, Astra.
GM Holden sold 147,000 vehicles in 2006 and the brand strengthened
its second-place position in Australia, as the Commodore remained
that country's best-selling car for the 11th consecutive year.
As GM executes the North America turnaround plan, much media
attention has focused on the global sales horse races between GM
and its competitors. "Being the largest car company in the world
can't be a focus, it has to be a by-product of giving people in
each market the vehicles they really want. GM enjoys that
position today," Mr. Middlebrook said.
"GM employees remain focused on delivering cars and trucks that
lead in design, quality and technology. We believe our newest
products reflect that commitment. But no one should question our
continued resolve to compete head-to-head with every automaker."
About General Motors Corp.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader since 1931. Founded in 1908, GM employs about 284,000
people around the world. It has manufacturing operations in
33 countries and its vehicles are sold in 200 countries. GM sells
cars and trucks under these brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with negative implications, where
they were placed March 29, 2006. S&P said the outlook is
negative.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
proposed $1.5 billion secured term loan of General Motors Corp.
The term loan is expected to be secured by a first priority
perfected security interest in all of the US machinery and
equipment, and special tools of General Motors and Saturn Corp.
GENESIS HEALTHCARE: Joint Venture Deal Cues Moody's Ratings Review
------------------------------------------------------------------
Moody's Investors Service placed the Ba3 Corporate Family Rating
and all debt instrument ratings of Genesis HealthCare Corporation
under review for possible downgrade after the report that the
company had entered into a definitive agreement to be acquired by
a joint venture between affiliates of Formation Capital, LLC and
JER Partners.
The review will focus primarily on the level of financial leverage
used to complete the transaction, which has been valued at
approximately $1.7 billion, including the assumption of
approximately $450 million of existing debt. The review will also
consider the resulting capital and corporate structure as those
details become available.
If the existing debt is repaid, Moody's anticipates it will
confirm and withdraw the current ratings of the existing debt
instruments. Moody's notes that the existing notes contain a
change of control provision requiring an offer to repurchase the
notes at a purchase price equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest.
These ratings were placed under review for possible downgrade:
-- Senior secured revolving credit facility due 2010, Baa3,
LGD1, 9%
-- 8% Senior subordinated notes due 2013, B1, LGD4, 63%
-- Corporate Family Rating, Ba3
-- Probability of Default Rating, Ba3
Genesis HealthCare Corporation is a leading long-term care
provider in the United States, with a primary focus on inpatient
and rehabilitation therapy services. As of Sep. 30, 2006 the
company operated 210 eldercare centers, including 176 skilled
nursing centers, 26 assisted living residences and 8 transitional
care units. Genesis also provides management services to
independently and jointly owned eldercare centers. For the fiscal
year ended Sept. 30, 2006, the company reported net revenue of
$1.77 billion.
GENESIS HEALTHCARE: S&P Lowers Corporate Credit Rating to B+
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Kennett Square, Pennsylvania-based nursing home owner
and operator Genesis HealthCare Corp. to 'B+' from 'BB-'. At the
same time, the rating was placed on CreditWatch with negative
implications, after the report that the company has agreed to be
acquired by a joint venture between Formation Capital and JER
Partners. The transaction is valued at about $1.7 billion.
"We expect that the transaction will include the issuance of a
significant amount of new debt," said Standard & Poor's credit
analyst David Peknay.
"The corporate credit rating may be lowered further because we
believe Genesis' financial profile will be substantially weakened.
We will review the financing plans before resolving the
CreditWatch listing. Also, we anticipate that the company's
existing subordinated debt will be repaid. The rating on
this debt will be withdrawn at that time."
Genesis owns and operates over 200 skilled nursing centers and
assisted living residences in 12 Eastern states.
GENESIS TECHNOLOGY: Sherb & Co. Raises Going Concern Doubt
----------------------------------------------------------
Sherb & Co. LLC in Boca Raton, Florida, expressed substantial
doubt about Genesis Technology Group Inc.'s ability to continue as
a going concern after auditing the company's consolidated
financial statements for the year ended Sept. 30, 2006. The
auditing firm cited that the company has an accumulated deficit of
$16,568,619 and has cash used in operations of $914,353 for the
year ended Sept. 30, 2006.
Genesis Technology reported $2.9 million of net income on
6.7 million of revenues for the year ended Sept. 30, 2006,
compared with a $3.7 million net loss on $154,580 of revenues for
the year ended Sept. 30, 2005.
The increase in revenue is primarily attributable to a Share
Exchange Agreement closed on Sept. 28, 2006, by and among S.E.
Asia Trading Company Inc. whereby Genesis Equity Partners LLC, the
company 51%-owned subsidiary, received 13,209,600 restricted
common shares of S.E. Asia Trading for services performed in
helping Lotus Pharmaceutical International Inc. facilitate the
merger with S.E. Asia Trading and for other business development
services.
At Sept. 30, 2006, the company's balance sheet showed $7.2 million
in total assets, $433,213 in total liabilities, $1.6 million in
minority interest, and $5.2 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the year ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?189b
* * *
Genesis Technology Group Inc. (OTC BB: GTEC.OB) --
http://www.genesis-technology.net/-- is a business development
and marketing firm that specializes in advising and providing a
turn key solution for Chinese small and mid-sized
companies entering Western markets.
GERDAU AMERISTEEL: S&P Puts BB Corp. Credit Rating on Pos. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'BB' corporate credit rating, on Tampa, Florida-based Gerdau
Ameristeel Corp. on CreditWatch with positive implications.
"The action reflects Gerdau's improved business and financial
profile and healthy industry conditions," said Standard & Poor's
credit analyst Marie Shmaruk.
"With several years of strong steel prices, Gerdau has been able
to improve its capital structure, resulting in very strong credit
metrics, while concurrently diversifying its operations and mix.
The placement also reflects our expectations for reasonable,
albeit lower, pricing to continue for the near-to- intermediate
term."
Although the steel industry is cyclical, volatile and subject to
the constant threat of imports, the ongoing consolidation should
result in more price stability.
"We remain concerned about the continued growth of global steel
capacity and its ability to find its way to domestic markets," Ms.
Shmaruk added.
"However, Gerdau's improved profile should enable it to better
manage future downturns."
In resolving the CreditWatch, Standard & Poor's will review the
company's 2007 operating and capital plans, and evaluate the
sustainability of its strong financial condition over a range of
business conditions.
GLOBAL POWER: Court Okays Saul Ewing as Equity Panel's Co-Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave
the Official Committee of Equity Security Holders of Global Power
Equipment Group and its debtor-affiliates to retain Saul Ewing
LLP, as its co-counsel, nunc pro tunc to Dec. 1, 2006.
The firm will work with Brown, Rudnick, Berlack, Israels, LLP, who
is also the Equity Committee's co-counsel, to represent its
interest relating to the Debtors' chapter 11 cases.
The firm is expected to:
a) advise the Equity Committee with respect to its rights,
duties and powers in these chapter 11 cases;
b) assist and advise the Equity Committee in its
consultations with the Debtors relative to the
administration of these chapter 11 cases;
c) assist the Equity Committee in analyzing the claims of
the Debtors' creditors and the Debtors' capital structure
and in negotiating with holders of claims and equity
interest;
d) assist the Equity Committee in its investigation of the
acts, conduct, assets, liabilities and financial
condition of the Debtors and of the operation of the
Debtors' businesses;
e) assist the Equity Committee in its investigation of the
liens and claims of the Debtors' prepetition lenders and
the prosecution of any claims or causes of action
revealed by the investigation;
f) assist the Equity Committee in its analysis of, and
negotiations with, the Debtors or any third party
concerning matters related to, among other things, the
assumption or rejection of certain leases of
nonresidential real property and executory contracts,
asset dispositions, financing of other transactions and
the terms of one or more plans of reorganization for the
Debtors and accompanying disclosure statements and
related plan documents;
g) assist and advise the Equity Committee as to its
communications to equity holders regarding significant
matters in these chapter 11 cases;
h) represent the Equity Committee at hearings and other
proceedings;
i) review and analyze applications, orders, statements of
operations and schedules filed with the Court and advise
the Equity Committee as to their propriety;
j) assist the Equity Committee in preparing pleadings and
applications as may be necessary in furtherance of the
Equity Committee's interests and objectives;
k) prepare, on behalf of the Equity Committee, any
pleadings, including without limitations, motions,
memoranda, complaints, adversary complaints, objections
or comments in connection with any of the foregoing; and
l) perform other legal services as may be required or are
otherwise deemed to be in the interests of the Equity
Committee in accordance with the Equity Committee's
powers and duties as set forth in the Bankruptcy Code,
Bankruptcy Rules or other applicable law.
Mark Minuti, Esq., a partner of the firm, will bill $475 per hour
for this engagement. He also discloses that the firm's designated
professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Jeremy W. Ryan, Esq. Associate $330
Patrick J. Railey, Esq. Associate $260
G. David Dean, Esq. Associate $235
Jason E. Kittinger Paralegal $150
The firm's other professionals bill:
Designation Hourly Rate
----------- -----------
Partners $335-$650
Special Counsel $250-$440
Paraprofessionals $95-$215
Mr. Minuti assures the Court that the firm does not hold any
interest adverse to the Debtors, its estate or creditors.
Mr. Minuti can be reached at:
Mark Minuti, Esq.
222 Delaware Avenue
Suite 1200
P.O. Box 1266
Wilmington, DE 19899
Tel: (302) 421-6800
Fax: (302) 421-6813
http://www.saul.com/
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.
GLOBAL POWER: Court Sets April 18 as General Claims Bar Date
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware set
April 18, 2007, as the deadline for all creditors and governmental
units owed money by Global Power Equipment Group Inc. and its
debtor-affiliates on the account of claims arising prior to
Sept. 28, 2006.
Copies of written proofs of claim must be sent or hand delivered
on or before the April 18 Bar Date to:
Global Power Equipment Group, Inc.
c/o Alix Partners LLC
2100 McKinney Avenue, Suite 800
Dallas, Texas 75201
The Court also set May 18, 2007, as the deadline for all
creditors, including the Debtors, owed money by co-Debtors,
sureties or guarantors, on accounts of claims arising prior to
Sept. 28, 2006.
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.
GLOBAL POWER: U.S. Trustee Amends Creditors Committee Membership
----------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, amends the
membership of the Official Committee of Unsecured Creditors in
Global Power Equipment Group Inc. and its debtor-affiliates'
chapter 11 case, to reflect the resignation of D.B. Zwirn Special
Opportunity Fund, L.P.
The Creditors Committee is now composed of:
1. Steelhead Investments Ltd.
Attn: Jeffrey D. Estes
c/o HBK Investments L.P.
300 Crescent Court
Dallas, TX 75201
Phone: 214-758-6107
Fax: 214-758-1207;
2. Kings Road Investments Ltd.
Attn: Erik M.W. Casperson
598 Madison Avenue, 14th Floor,
New York, NY 10022
Phone: 212-359-7331
Fax: 212-359-7303;
3. Aarding Thermal Acoustics B.V.,
Attn: Norbert Pieterse/Hugo V. Vredendaal
Industrieweg 5g
Nunspeet, The Netherlands, 8071 C.S.
Phone: 31-341-252635
Fax: 31-341-262112;
4. Fan Group Inc.
Attn: John E. Tinsley
1701 Terminal Road
Suite B
Niles, MI 49120
Phone: 269-687-1216
Fax: 269-683-2789;
5. Turner Industries, Inc.
Attn: Don Wendt, 1700 South Westport Drive
Port Allen, LA 70767,
Phone: 225-376-4157
Fax: 225-376-4176; and
6. Cogburn Bros. Inc.
Attn: Scott Sullivan, 3300 Faye Rd.
Jacksonville, FL 32226
Phone: 904-358-7344
Fax: 904-358-0446.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
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.
GSAMP TRUST: Moody's Cuts Ratings on Two Securitized Debt Tranches
------------------------------------------------------------------
Moody's Investors Service has downgraded two tranches from GSAMP
Trust 2004-SEA2. The transaction was issued with seasoned
subprime mortgage loans, some of which had experienced delinquency
prior to securitization.
The tranches from 2004-SEA2 are being downgraded based upon rapid
deterioration of overcollateralization and subordination caused by
an accelerating pace of losses. The losses are attributed to a
high frequency of defaulted loans and substantial severity of loss
on liquidated collateral.
These are the rating actions:
* GSAMP Trust 2004-SEA2
-- Class M-3; Downgraded to Ba2 from Baa3
-- Class M-4; Downgraded to B3 from Ba2
HEALTH MANAGEMENT: Fitch Lowers Issuer Default Rating to BB-
------------------------------------------------------------
Fitch Ratings has downgraded Health Management Associates, Inc.
debt:
-- Issuer Default Rating to 'BB-' from 'BBB+';
-- Newly secured senior notes to 'BB' from 'BBB+'; and,
-- Subordinated convertible notes to 'B+' from 'BBB'.
Fitch has also assigned a 'BB' to HMA's new senior secured bank
facility and simultaneously withdrawn the unsecured 'BBB+'
existing bank facility.
The Rating Outlook is Stable.
Fitch's downgrade stems from the increase in leverage resulting
from HMA's debt-financed dividend of $10 per share. Fitch's
rating actions affect $4.225 billion of funded debt and credit
facilities.
The dividend will be financed with a new credit facility
consisting of a $2.750 billion 7-year term loan B and a
$500 million 6-year revolver. The proceeds from the term loan
will be used to pay the dividend of approximately $2.423 billion,
and $275 million will be used to pay off the existing revolver.
HMA believes a recapitalized balance sheet with more leverage is
appropriate, as operating cash flows can service this level of
debt. There is also a desire to return cash to shareholders.
Fitch views the recapitalization as a shift in financial policy to
higher than historical leverage. In the near term, Fitch expects
HMA will suspend all periodic dividends and participate in minimal
acquisition activities, while pre-paying portions of the term
loan.
Upon closing, the $400 million previously unsecured 6.125% notes
due 2016 will become secured equally with the new credit facility.
Further, the convertible notes' conversion price will be adjusted
down due to this 'specified corporate transaction' as outlined in
the note's indenture. With the reduced conversion price and a
rating trigger likely tripped, holders of the convertible notes
may have the opportunity to convert their holdings.
Fitch believes conversion risk is manageable. If holders do not
convert, the next put date is Aug. 1, 2008 and Fitch will monitor
the likelihood of puts as that date approaches. Leading up to the
previous put date of Aug. 1, 2006, HMA offered a non-put payment
in the form of increased interest payments. Fitch believes
another non-put payment prior to the 2008 put is an alternative to
refinancing if a put seems imminent. If the convertible notes are
put to the company, they must be settled in cash and re-financing
options are laid out in the new bank facility. Fitch believes the
refinancing risk is manageable. However, subsequently a higher
interest payment may be necessary, causing some strain on the
credit metrics.
Further driving the rating are issues affecting the entire
industry such as bad debt and soft volumes, offset by continued
strong pricing and HMA's industry leading operating margin. HMA,
like its peers, has been struggling with an escalation in bad debt
from the increased uninsured population and increased patient
burden of higher co-pays and coinsurance. Volumes are expected to
track flat to slightly up, thus organic growth will most likely
come from pricing increases. HMA lags its peers in managed care
pricing increases, but the company has highlighted this as an
opportunity for 2007. With high margins HMA, is positioned better
than some of its peers to weather increases in expenses from
higher self-pay volumes and their associated increases in bad debt
expense.
HMA has also reported a change in their bad debt write-off
methodology, resulting in a $200 million charge in the fourth
quarter 2006. Pursuant to the new methodology, HMA will
immediately write-off a significant portion of self-pay
receivables. Historically HMA let these receivables age 150 days
until June 30, 2005 when the aging was reduced to 120 days. The
company would then write-off any remaining balances at 100%. With
the new methodology, any balances not expensed initially that
remain unpaid after 360 days will be written off. Fitch believes
this new methodology will better match self-pay revenues with
costs associated with treating self-pay volumes. Large increases
in self-pay admissions will be captured in allowance for doubtful
accounts in the quarter in which they occur. Fitch further
believes a $200 million charge should sufficiently account for the
balance in self-pay receivables that needs to be written off to
comply with the new methodology.
Fitch expects pro forma leverage will be over 5x. By the end of
fiscal 2007, Fitch expects leverage to drop to, or below 5x. Fitch
projects interest coverage at the end of fiscal 2007 to be close
to 3x. Free-cash-flow is expected to be between $100 and $150
million for the full-year 2007.
Fitch's ratings in this sector allow room for some deterioration
in credit metrics as increases in leverage are expected from
acquisition activity and cash generation offsets these increases.
In HMA's downgraded credit rating, there is little room for
deterioration of the credit metrics and Fitch will watch carefully
the use of cash and funding of any future acquisitions. These
ratings are based on the preliminary credit agreement. If the
final document differs materially, the ratings will be revisited.
HEALTH MANAGEMENT: Moody's Rates Proposed Credit Facilities at Ba2
------------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the proposed
senior secured credit facilities of Health Management Associates,
Inc.
Moody's also assigned HMA a Corporate Family Rating of Ba3.
The outlook for the ratings is stable.
The proceeds of the proposed offering are expected to be used
primarily to fund a one-time dividend of approximately
$2.4 billion, or roughly $10 per share. The remainder of the
proceeds will be used to repay existing amounts drawn under the
current revolving line of credit and to finance the transaction
costs. In addition to the proposed credit facility, $1.1 billion
of existing debt will remain outstanding including $400 million of
senior notes due 2016 and $588 million of convertible senior
subordinated notes. In accordance with the terms of the indenture
the $400 million senior notes will be secured and guaranteed and
will rank equally in priority to the proposed credit facilities.
These are the rating actions:
-- $500 million senior secured revolving credit facility, Ba2,
LGD3, 42%
-- $2,750 million senior secured term loan, Ba2, LGD3, 42%
-- Corporate Family Rating, Ba3
-- Probability of Default Rating, Ba3
HMA's rating reflects the key factors enumerated in Moody's Global
For-Profit Hospital Rating Methodology. The Ba3 Corporate Family
Rating is supported by HMA's considerable scale as one of the
largest non-urban hospital operators in the US. Its strategic
focus on non-urban markets often allows its hospitals to benefit
from a less competitive environment.
"HMA generates stable operating cash flow and positive free cash
flow and demonstrates strong EBIT margins relative to its peer
group," said Dean Diaz, Vice President-Senior Analyst,
The rating is also supported by the stable trends in pricing,
measured as growth in same-facility revenue per adjusted
admission, which continues to be favorable for the hospital
industry and for HMA.
"The rating is constrained by the significant amount of financial
leverage HMA will assume in the transaction and the resulting
decapitalization of the company," Mr. Diaz added.
Additionally, cash flow coverage of debt and interest coverage
metrics are expected to decrease to levels appropriate for the
single B rating category following the transaction. The rating
also reflects the anemic admissions volume growth in the company's
facilities and Moody's continued concern about bad debt expense
with regard to HMA, and the for-profit hospital industry as a
whole. Further, the rating reflects the company's modest
geographic diversity, with roughly half of all facilities located
in Florida and Mississippi.
HEALTH MANAGEMENT: S&P Lowers Corp. Credit Rating to B+ from BBB
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Naples,
Florida-based Health Management Associates Inc.
The corporate credit rating was lowered to 'B+' from 'BBB', and
the rating outlook is stable.
At the same time, Standard & Poor's assigned its loan and recovery
ratings to HMA's proposed $3.25 billion senior secured bank
facilities, consisting of a $500 million revolving credit due 2013
and a $2.75 billion term loan B due 2014. The facilities are
rated 'B+' with a recovery rating of '3', indicating the
expectation for meaningful recovery of principal in the event of a
payment default.
In addition, the rating on the company's $400 million senior
unsecured notes due 2016 was lowered to 'B+' from 'BBB'. These
notes will become secured by the same collateral as the bank
facility on an equal and ratable basis; therefore,
Standard & Poor's also assigned them a recovery rating of '3'.
"The rating downgrade reflects the dramatic increase in HMA's
debt, the consequent weakening of the company's credit profile,
and a more aggressive financial policy," said Standard & Poor's
credit analyst David Peknay.
"HMA will use proceeds from the bank facilities to pay a $10 per
share one-time dividend to common shareholders, and to repay
existing debt. This comes at a time when the company's operations
will continue to feel the pressure of higher bad debt, relatively
flat patient volume, and increasing operating
expenses relative to reimbursement increases."
The company's financial flexibility to deal with its challenges
will be diminished once it completes the upcoming dividend
transaction. Lease-adjusted debt to EBITDA will increase to about
5.5x from 2.2x. Funds from operations to lease-adjusted debt will
decline to about 11%--a large decline from 30% as of
Sept. 30, 2006.
Standard & Poor's believe this metric may remain below 15% for at
least the next couple of years. Standard & Poor's expects the
$200 million or so increase in interest expense, along with the
difficult operating environment, which will limit profitability
growth, to prevent any meaningful debt reduction for the next
couple of years.
HEALTHWAYS INC: 2007 First Quarter Net Income Increases to $11.8MM
------------------------------------------------------------------
Healthways Inc. president and chief executive officer Ben R.
Leedle, Jr., has announced financial results for the first quarter
of fiscal 2007.
Revenues increased 29% for the first quarter, which ended Nov. 30,
2006, to $117,055,000 from $90,592,000 for the first quarter of
fiscal 2006.
Net income grew 83% to $11,834,000 from $6,456,000.
"We are pleased to report substantial profitable growth for the
first quarter of fiscal 2007 as a result of the outstanding
performance of our core commercial business, which produced
earnings 10% above the high end of our first-quarter guidance for
this component of our business," Mr. Leedle said.
"This performance reflected the continued substantial expansion of
our lives under management from existing and new health plan
customers, particularly through the growth of our business with
self-insured employers on behalf of these customers.
"Our core business growth is being driven by rising demand from
health plans and employers for programs that engage people at
every point along the healthcare continuum.
"Healthways is meeting this demand through its differentiated
Health and Care SupportSM services, which are the industry's most
comprehensive, single source solution to improving people's health
and lowering their healthcare costs.
"With the completion of the acquisition of Axia Health Management
LLC on Dec. 1, 2006, we are even better positioned to meet future
demand for comprehensive, personalized and integrated programs and
services proven to successfully engage entire populations, one
person at a time.
"Further, the profitable growth of our core business has continued
to support our initiatives to expand our addressable markets
beyond the approximately 200 million individuals who comprise the
domestic commercial market."
Core Commercial Business Delivers Profitable Results
Healthways produced 76% growth in earnings per diluted share from
its core commercial business for the first quarter of fiscal 2007
compared to the first quarter of fiscal 2006.
This growth, which follows a comparable-quarter increase in
earnings per diluted share for the fourth fiscal quarter of 2006
of 68%, is primarily attributable to the 45% expansion of actual
lives under management for self-insured employers to 967,000 from
666,000 at the end of the first quarter of fiscal 2006.
Care Support contracts with self-insured employers on behalf of
our health plan customers totaled 616 at the end of the first
quarter, up 41% from 437 at the same time in fiscal 2006.
The expansion of our business with self-insured employers
primarily drove the 36% increase in total actual lives under
management to 2,462,000 at the end of the first quarter of fiscal
2007 from 1,814,000 at the end of the first quarter of fiscal
2006. It also accounted for our backlog of annualized revenues of
$7.9 million at the end of the first quarter of fiscal 2007.
Growth Momentum Continues with 46 New, Expanded or
Extended Health Plan and Direct-to-Employer Contracts
-- Healthways' potential for further significant profitable
growth within its core commercial business is reflected by
the addition, since the end of fiscal 2006, of 14 new,
expanded, or extended contracts with existing and new health
plan customers and 32 additional contracts, which include
29 myhealthIQSM consumer-directed Health SupportSM contracts
and three direct-to-employer Health and Care Support
contracts.
-- Healthways expanded and extended its relationship with Rocky
Mountain Health Plans making its myhealthIQ services
available to the plan's employer customers. Healthways will
continue to provide diabetes, coronary artery disease,
and heart failure Care SupportSM services to the plan's
members, which it initiated under a three year contract in
July 2004.
-- The company announced a two-year contract extension with
Saint Mary's Health Plans, marking the third contract
expansion since the original contract for diabetes services
was signed in October 2000. Under the latest expansion,
Healthways will add its Care Support programs for end-stage
renal disease and chronic kidney disease to its current
offering, which includes diabetes, chronic obstructive
pulmonary disease, asthma, 11 impact conditions and
high-risk care management.
-- Healthways entered a new contract with VISTA Healthplans, a
Florida-based commercial and Medicare Advantage insurer, for
Health Support programs that include health risk assessment,
fitness center access, online coaching and personal health
improvement programs for physical activity, nutrition, and
smoking cessation services for certain of its commercial
members, as well as the Forever Fit physical activity
program for seniors and an innovative massage therapy
benefit to its Medicare members.
-- Healthways announced an expansion of its existing contract
with Blue Shield of California under which the company makes
its diabetes, CAD, COPD and asthma Care Support programs
available to the plan's fully-insured members, as it has
been with the plan's self-insured employer customers. The
new agreement also extends the term of the relationship
until December 2009.
-- The company extended its existing six-year relationship with
HealthSpring for 18 months. Under the new agreement
HealthSpring and the company will extend their joint
learnings about effective programming for a Medicare
Advantage population to continue to make appropriate program
modifications and to expand their highly successful
physician pay-for-performance pilot, at scale, across all of
HealthSpring's plans.
-- Healthways signed a new three-year contract with The Boeing
Company to bring Healthways' full suite of Care Support
services to approximately 304,000 Boeing employees and
dependents, up from 260,000 previously. Healthways began
providing services to Boeing in 2004 through a self-insured
employer contract on behalf of its health plan customer, The
Regence Group. The transition to a direct-to-employer
contract was facilitated by Regence, for whom Boeing remains
a customer, and by Boeing's healthcare consultant, Mercer.
-- At the start of calendar 2007, the company launched 11 new
Health Support contracts that Axia signed prior to the
closing of the acquisition on Dec. 1, 2006, including nine
for health plans' Medicare Advantage programs. These
contracts include two new Silver Sneakers(R) Fitness Program
contracts, which provide health and wellness programs for
seniors, with Blue Cross Blue Shield of Arkansas and
Presbyterian Health Plan. Seven of the remaining contracts
are for the Forever Fit physical activity program for
seniors and were signed with Coventry Health Care, Gateway
Health Plan, AvMed Health Plans, Capital BlueCross, Peoples
Health Network, Metcare, and America's Health Choice. The
final two contracts are for the company's QuitNet smoking
cessation and coaching services for two large employers.
-- The company continued to expand the number of myHealthIQ
contracts, with 29 new agreements signed since the start of
fiscal 2007, putting the company on pace to double the
number of these contracts for the second consecutive fiscal
year. The company believes the market's reception of
myHealthIQ is representative of the potential of Healthways'
ongoing innovative initiatives to develop and implement
Health and Care Support programs that meaningfully engage
whole populations.
New Markets
The company believes its investments in the Medicare and
International markets will provide significant long-term growth
opportunities and returns for its shareholders. At the same time,
the early stage of these markets makes it difficult to predict, in
the short term, the levels of revenues and earnings associated
with those efforts.
MHS Pilots
Based on the receipt of essentially complete first-year data,
which revealed smaller separation from the control group than
reflected in previous reports, the company's net per share costs
in the MHS pilots for the first fiscal quarter of 2007 totaled
$0.10 per diluted share, $0.04 more than previously estimated.
For the first 15 months of the pilots, per member per month
beneficiary costs, including inflation, have been held flat, which
the company believes reflects meaningful impact resulting from
program interventions.
To date, however, the control group costs as reflected in the most
recent report released by CMS' third party actuarial firm are also
unchanged, and do not reflect anticipated increases provided by
CMS nor the results of historical national and regionally-specific
trends identified by third-party actuarial analysis of the
Standard Analytical File (better known as the Medicare 5% Sample).
The company has brought this issue to CMS' attention and has
received the Agency's commitment to pursue understanding and
resolution of this anomaly in a timely manner.
While the company has no direct control over the timing of this
review by CMS, it will communicate progress toward resolution.
Based on the strength of the company's performance with the
intervention group, particularly as compared to the Medicare 5%
Sample data, as well as the questions raised by the unanticipated
trend of control group costs, the company is maintaining its
fiscal 2007 guidance related to the MHS pilots until this issue
can be resolved to the satisfaction of all parties.
International Development
The company's investments in the international market are
proceeding in accordance with its plan and estimates. The company
continues to progress in building the infrastructure and
developing the operating plan to meet increasing international
demand for programs that effectively address rising healthcare
costs. As previously announced, the company continues to expect
to sign its first international contract in fiscal 2007.
Cash Flow from Operations More than Doubles
Cash flow from operations increased 108% to $9.4 million for the
first quarter of 2007 from $4.5 million for the first quarter of
fiscal 2006.
Because first-quarter cash flow reflects the payout of accrued
bonuses for the prior fiscal year, Healthways' first quarter
results were on plan for achieving its full-year target for cash
flow from operations of $125 million to $130 million.
Cash and cash equivalents were $161.9 million at the quarter's
end, with no bank debt and stockholders' equity of $293.6 million.
After the end of the first quarter, Healthways used approximately
$108 million in cash and approximately $350 million in borrowings
under a new $600 million credit facility to fund the Axia
acquisition.
Financial Guidance
Healthways affirmed its financial guidance for fiscal year 2007
and established its guidance for the second quarter of the fiscal
year.
The company's guidance for revenues for fiscal 2007 is in a range
of $667 million to $701 million, a 62% to 70% increase over 2006
revenues of $412 million.
The MHS pilots are expected to account for $22 million to
$29 million of these revenues, with the remainder expected from
its core commercial business including approximately three fiscal
quarters from the Axia acquisition on Dec. 1, 2006.
While the company expects to sign international business in fiscal
2007, the company's guidance does not include any revenues or
implementation and operating expenses from international contracts
at this time.
Summary
Mr. Leedle added, "Our guidance for fiscal 2007 highlights the
strength of our core commercial business and its role in enabling
us to fund our investment in developing the new government and
international markets.
"These markets each represent very large long-term potential
growth opportunities, but as with any development stage business,
there is more inherent uncertainty with respect to their short-
term growth than our proven core commercial business.
"Our original MHS guidance for fiscal 2007 was based on our
performance in fiscal 2006 including our expectations of both
recovering the revenues not recognized in fiscal 2006 and
recognizing at least as much new revenue, relative to the
decrementing population, in fiscal 2007.
"Given the inherent difficulties in predicting the exact timing
and extent of progression of our new market initiatives, we
provided a broad range in our MHS guidance. For the reasons
stated earlier, we are not changing our full year MHS guidance at
this time."
Mr. Leedle concluded, "Our results for the first quarter clearly
demonstrate continuing strong momentum in our core commercial
market for our historic suite of Health and Care Support services.
"Moreover, the large number of new Health Support contracts
reflects that we not only accurately anticipated a significant
market shift in which employers are increasingly demanding
effective health support solutions that address quality, cost and
personalization of services for their employees, but also acted
effectively to position the company as the unqualified industry
leader to meet that accelerating demand.
"We also believe that these capabilities will enable us to be the
first to market with a completely integrated WholeHealth solution
that will enable those who pay for health care services -- plans,
employers, governments and individual consumers -- to assure
provision of the highest quality proven and personalized Health
and Care Support solutions for their entire population."
Balance Sheet
At Nov. 30, 2006, the company's balance sheet showed
$396.931 million in total assets, $103.342 million in total
liabilities, and $293.589 million in total stockholders' equity.
Full-text copies of the company's 2007 fiscal first quarter
financials are available for free at:
http://ResearchArchives.com/t/s?18a3
About Healthways Inc.
Healthways Inc. (NASDAQ: HWAY) -- http://www.healthways.com/--
provides specialized, comprehensive Health and Care SupportSM
solutions to help millions of people maintain or improve their
health and, as a result, reduce overall healthcare costs.
Healthways' programs are designed to help healthy individuals stay
healthy, mitigate and slow the progression of disease associated
with family or lifestyle risk factors, and promote the best
possible health for those already affected by disease. Healthways
also provides a national, fully accredited complementary and
alternative Health Provider Network, offering convenient access to
individuals who seek health services outside of, and in
conjunction with, the traditional healthcare system.
HEALTHWAYS INC: Moody's Rates $600 Mil. Credit Facilities at Ba2
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating to Healthways
Inc.'s credit facilities, including a $400 million revolver and a
$200 million term loan B. The credit facilities are intended to
partially fund the acquisition of Axia Health Management Inc., a
privately held health support company. Moody's also assigned a
Corporate Family Rating of Ba2, a Probability of Default Rating of
Ba3 and a speculative grade liquidity rating of SGL-1.
The outlook for the ratings is stable.
The ratings reflected Healthways' strong revenue growth, sizable
margins and solid financial metrics. The ratings also
incorporated Moody's expectations that Healthways will benefit
from favorable demographic trends, increased scale associated with
the acquisition and expanded scope into the health support market.
Moody's expected the combined company to maintain stable margins
over the intermediate term while paying down amounts drawn on the
revolver to fund the acquisition.
The ratings are constrained by the continued customer
concentration and relatively small revenue base. Further, the
intended acquisition is the largest in the company's history and
the ratings reflect integration risk and Moody's expectation of a
continued acquisition strategy.
Additionally, the ratings acknowledged the potential risks
associated with revenue and earnings volatility as a result of
Medicare Health Support pilot programs.
The stable ratings outlook reflected Moody's expectation that the
company will able to integrate the Axia business while continuing
to grow its existing book of business. The ratings also reflected
Moody's expectation of a measured approach toward acquisitions and
maintenance of conservative financial policies, including rapid
repayment of amounts outstanding under the revolver.
Moody's expected the company to use available cash flow to repay
amounts outstanding on the revolver. If the company diverges from
its conservative financial policy and significantly increases
leverage for either acquisitions or expansion, Moody's could
revise the outlook to negative or downgrade the ratings.
Given the company's appetite for acquisitions, relatively small
size and customer concentration, Moody's does not believe an
upgrade in the near term is likely.
The assignment of the Speculative Grade Liquidity Rating of SGL-1
reflects Moody's belief that the company will have very good
liquidity over the next four quarters. Contributing factors
include the expectation of cash flows that are sufficient to fund
all working capital and capital expenditure needs and access to
the unused portion of the $400 million revolver.
Moody's assigned these ratings:
-- Corporate Family Rating, Ba2
-- Revolving Credit Facility due 2011, Ba2 (LGD3, 31%)
-- Term Loan B due 2013, Ba2 (LGD3, 31%)
-- Speculative Grade Liquidity Rating, SGL-1
-- Probability of Default Rating, Ba3
Headquartered in Nashville, Tennessee, Healthways Inc. provides
Health and Care Support programs and services, including disease
management, care enhancement services and Outcomes-Driven Wellness
programs to health plans, hospitals, governments and employers.
Healthways recognized revenue of approximately $412 million for
the fiscal year ended Aug. 31, 2006.
HEALTHWAYS INC: S&P Puts 'BB' Rating on Corporate Credit
--------------------------------------------------------
Standard & Poor's Ratings Services has assigned its 'BB' corporate
credit rating to Nashville, Tenn.-based Healthways Inc.
The rating outlook is stable.
At the same time, Standard & Poor's assigned its loan and recovery
ratings to the Healthways' $400 million senior secured revolving
credit facility due in 2011 and $200 million senior secured term
loan B due in 2013. The secured financing was rated 'BB' with a
recovery rating of '2', indicating the expectation for substantial
(80%-100%) recovery of principal in the event of a payment
default.
Proceeds from the financing was used to acquire Axia Health
Management LLC, a provider of integrated preventive health
solutions, for $459 million.
"The rating on Healthways reflects the company's narrow business
focus, surmountable barriers to competitive entry, and revenue and
channel concentration," Standard & Poor's credit analyst Jesse
Juliano said.
"These risks are partially offset by the strong demand for
Healthways' services, their positive momentum in the disease
management business, and the company's historically conservative
financial profile."
Healthways is a provider of disease and wellness management
services in the U.S. The company has become the leader in the
disease management industry by signing large commercial health
plan contracts, which have spurred Healthways' rapid growth.
The company manages chronic diseases and episodic conditions, such
as diabetes, cardiovascular diseases, respiratory disorders,
cancer, depression, and others, in addition to outcomes-driven
wellness programs for commercial health plans, self-insured
employers, and the government, to reduce health care costs.
HEMOSOL CORP: Ontario Court Extends Plan Sponsorship Agreement
--------------------------------------------------------------
PricewaterhouseCoopers Inc., in its capacity as interim receiver
of the assets, property and undertaking of Hemosol Corp. and its
affiliate Hemosol L.P., has agreed to an extension of the date by
which certain conditions of the Plan Sponsorship Agreement with
2092248 Ontario Inc. have to be met, pending release of the
decision in respect of a motion brought by the Plan Sponsor that
was heard January 3 and 4, 2007.
The Plan Sponsorship Agreement continues to be conditional upon
obtaining the approval of Hemosol's creditors and the Court on a
proposed CCAA plan of compromise.
The Plan Sponsor will now have until the earlier of
Jan. 26, 2007, and five business days following the release of the
Decision to meet these conditions or seek a further extension from
the Receiver.
As reported in the Troubled Company Reporter on Oct. 26, 2006,
Hemosol Corp. had filed its Plan of Compromise, Arrangement and
Reorganization with the Ontario Superior Court of Justice. If the
proposed CCAA plan of compromise is implemented, it will result in
a substantial dilution of the equity of Hemosol held by the
shareholders existing at the time of implementation.
About Hemosol Corp.
Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/
-- is an integrated biopharmaceutical developer and manufacturer
of biologics, particularly blood-related protein based
therapeutics. Information on Hemosol's restructuring is available
at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html
Hemosol Corp. and Hemosol LP filed a Notice of Intention to Make
a Proposal Pursuant to Section 50.4 (1) of the Bankruptcy and
Insolvency Act on Nov. 24, 2005. The company had defaulted in
the payment of interest under its $20 million credit facility.
Hemosol said that it would require additional capital to
continue as a going concern and is in discussions with its
secured creditors with respect to its current financial position.
On Dec. 5, 2005, PricewaterhouseCoopers Inc. was appointed interim
receiver of the companies.
HERITAGE MEDICAL: Case Summary & Three Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Heritage Medical Properties, LLC
1400 South Patriot Drive
Yorktown, IN 47396
Bankruptcy Case No.: 07-10078
Chapter 11 Petition Date: January 16, 2007
Court: Northern District of Indiana (Fort Wayne)
Judge: Robert E. Grant
Debtor's Counsel: Grant F. Shipley, Esq.
Shipley & Associates
233 West Baker Street
Fort Wayne, IN 46802-3413
Tel: (260) 422-2700
Fax: (260)424-2960
Total Assets: $15,934,559
Total Debts: $16,692,418
Debtor's Three Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Dennis DiAmico Accounting services $1,000
3645 North Briarwood Lane,
Suite B
Muncie, IN 47304
AmeriCare Living Centers Leasor Unknown
III, LLC
421 South Walnut Plaza
Muncie, IN 47305
Hoosier Enterprises, Inc. Leasor Unknown
9455 Delegates Row
Indianapolis, IN 46250
HOLLINGER INC: Chief Restructuring Officer Randall Benson Resigns
-----------------------------------------------------------------
Hollinger Inc. reported that Randall Benson will be stepping down
as chief restructuring officer and as director, after a short
transition period.
After the transition, G. Wesley Voorheis, a member of the board of
directors and chair of its Litigation Committee, will be appointed
chief executive officer.
Mr. Benson joined Hollinger as chief restructuring officer, and
was appointed to the Board, in July 2005. In the past 18 months,
he has overseen the management of Hollinger's activities leading
to an agreement with the Ontario Securities Commission on the form
of presentation of Hollinger's financial statements to be filed
for 2003 through 2006, the sale of residual non-core assets,
including the disposition of the company's office at 10 Toronto
Street, a cooperation agreement with the U.S. Department of
Justice, as well as reductions in operating costs.
"Randy Benson joined Hollinger at an extremely challenging time,"
said Stanley Beck, chairman. "He has made a substantial
contribution to the company and its ability to assert its rights
on behalf of shareholders. The Board thanks him for his efforts."
Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B)
-- http://www.hollingerinc.com/-- owns approximately 70.1% voting
and 19.7% equity interest in Sun-Times Media Group Inc. (formerly
Hollinger International Inc.), a newspaper publisher with assets,
which include the Chicago Sun-Times and a large number of
community newspapers in the Chicago area. Hollinger also owns a
portfolio of commercial real estate in Canada.
Litigation Risks
Hollinger Inc. faces various court cases and investigations:
(1) a consolidated class action complaint filed in Chicago,
Illinois;
(2) a class action lawsuit that was filed in the Saskatchewan
Court of Queen's Bench on Sept. 7, 2004;
(3) a $425,000,000 fraud and damage suit filed in the State
of Illinois by International;
(4) a lawsuit seeking enforcement of a Nov. 15, 2003,
restructuring proposal to uphold a Shareholders' Rights
Plan, a declaration that corporate by-laws were invalid
and to prevent the closing of a certain transaction;
(5) a lawsuit filed by International seeking injunctive relief
for the return of documents of which it claims ownership;
(6) a $5,000,000 damage action commenced by a lessor of an
aircraft lease, in which Hollinger was the guarantor;
(7) an action commenced by the United States Securities and
Exchange Commission on Nov. 15, 2004, seeking injunctive,
monetary and other equitable relief; and
(8) investigation by the enforcement division of the OSC.
On April 20, 2005, the Court issued two orders by which the
Ravelston Corporation Limited and Ravelston Management Inc. were:
(i) placed in receivership pursuant to the Bankruptcy & Insolvency
Act (Canada) and the Courts of Justice Act (Ontario); and (ii)
granted protection pursuant to the Companies' Creditors
Arrangement Act (Canada).
HOLLINGER INC: Ontario Superior Court Extends Stay Until June 8
---------------------------------------------------------------
Hollinger Inc. reported that the Ontario Superior Court of Justice
extended the stay of proceedings against the Ravelston Entities to
June 8, 2007, pursuant to the provisions of the companies'
Creditors Arrangement Act (Canada).
The company intended to seek confirmation of the secured
obligations owed by Ravelston to the company and its subsidiary,
Domgroup Ltd., and declare the applicable security agreements
valid, perfected and enforceable in accordance with their terms.
Supplemental Financial Information
As of the close of business Jan. 5, 2007, Hollinger and its
subsidiaries - other than Sun-Times and its subsidiaries - had
approximately $31.1 million of cash or cash equivalents on hand,
including restricted cash. The company owned, directly or
indirectly, 782,923 shares of Class A Common Stock and 14,990,000
shares of Class B Common Stock of Sun-Times. Based on the January
5, 2007 closing price of the shares of Class A Common Stock of
Sun-Times on the NYSE of $4.80, the market value of the company's
direct and indirect holdings in Sun-Times was $75.7 million.
All of Hollinger's interest in the shares of Class A Common Stock
of Sun-Times is being held in escrow in support of future
retractions of its Series II Preference Shares. All of
Hollinger's interest in the shares of Class B Common Stock of Sun-
Times is pledged as security in connection with the senior notes
and the second senior notes.
Hollinger has previously deposited approximately CDN$8.8 million
in trust with the law firm of Aird & Berlis LLP, as trustee, in
support of certain obligations the company may have indemnified to
six former independent directors and two current officers. In
addition, CDN$759,000 has been deposited in escrow with the law
firm of Davies Ward Phillips & Vineberg LLP in support of the
obligations of a certain Hollinger subsidiary.
As of Jan. 5, 2007, there was approximately $72 million aggregate
collateral securing the $78 million principal amount of the Senior
Notes and the $15 million principal amount of the Second Senior
Notes outstanding.
Hollinger is current on all payments due under its outstanding
Senior Notes and Second Senior Notes. However, it is non-
compliant under the Indentures governing the Notes with respect to
certain financial reporting obligations and other covenants
arising from the insolvency proceedings of the Ravelston Entities.
Neither the trustee under the Indentures nor the holders of the
Notes have taken any action as a result of the defaults.
Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B)
-- http://www.hollingerinc.com/-- owns approximately 70.1% voting
and 19.7% equity interest in Sun-Times Media Group Inc. (formerly
Hollinger International Inc.), a newspaper publisher with assets,
which include the Chicago Sun-Times and a large number of
community newspapers in the Chicago area. Hollinger also owns a
portfolio of commercial real estate in Canada.
Litigation Risks
Hollinger Inc. faces various court cases and investigations:
(1) a consolidated class action complaint filed in Chicago,
Illinois;
(2) a class action lawsuit that was filed in the Saskatchewan
Court of Queen's Bench on Sept. 7, 2004;
(3) a $425,000,000 fraud and damage suit filed in the State
of Illinois by International;
(4) a lawsuit seeking enforcement of a Nov. 15, 2003,
restructuring proposal to uphold a Shareholders' Rights
Plan, a declaration that corporate by-laws were invalid
and to prevent the closing of a certain transaction;
(5) a lawsuit filed by International seeking injunctive relief
for the return of documents of which it claims ownership;
(6) a $5,000,000 damage action commenced by a lessor of an
aircraft lease, in which Hollinger was the guarantor;
(7) an action commenced by the United States Securities and
Exchange Commission on Nov. 15, 2004, seeking injunctive,
monetary and other equitable relief; and
(8) investigation by the enforcement division of the OSC.
On April 20, 2005, the Court issued two orders by which the
Ravelston Corporation Limited and Ravelston Management Inc. were:
(i) placed in receivership pursuant to the Bankruptcy & Insolvency
Act (Canada) and the Courts of Justice Act (Ontario); and (ii)
granted protection pursuant to the Companies' Creditors
Arrangement Act (Canada).
INTERPOOL INC: Fitch Places BB Debenture Ratings on Negative Watch
------------------------------------------------------------------
Fitch places these ratings on Rating Watch Negative:
Interpool Inc.
-- Long-term Issuer Default Rating 'BB+';
-- Senior unsecured debt 'BB+'; and,
-- Senior secured credit facility 'BBB-'.
Interpool Containers Limited
-- Long-term IDR 'BB+'.
Interpool Capital Trust
-- Preferred stock 'BB-'.
The action reflects the proposed acquisition of all of the
outstanding common stock for $24 per share in cash by the chief
executive officer, supported by other significant stockholders and
an investment fund affiliated with Fortis Merchant Banking, a
division of Fortis.
The proposed acquisition would be financed through a combination
of equity from Fortis and equity investments from current
significant shareholders that include the CEO plus debt financing
of the company based on commitment provided by an affiliate of
Fortis Merchant Banking for up to $1.8 billion.
Fitch recognizes that the current financial profile of the company
may be affected negatively by the underlying financing structure
of this proposed acquisition and that it may result in an increase
in leverage, lower liquidity, and a decrease in unencumbered
revenue generating assets.
Furthermore, depending on the severity of the deterioration in the
current financial profile of the company, ratings may be
downgraded beyond one notch. Further, depending on the mix of
debt employed, the current notching between the secured and
unsecured senior debt could widen. Also, the preferred stock
rating could be further notched from the senior unsecured debt.
Headquartered in Princeton, New Jersey, with roots dating to 1968,
Interpool Inc. is the holding company for Interpool Limited,
Interpool Containers Limited, and Trac Lease, Inc. Interpool is
publicly traded and listed on the New York Stock Exchange.
ISLE OF CAPRI: Tim Hinkly, President and COO, Resigns
-----------------------------------------------------
Isle of Capri Casinos Inc.'s president and chief operating
officer, Tim Hinkley, is stepping down. The company is initiating
a comprehensive search for his replacement.
"We are tremendously grateful for Tim's visionary leadership and
unparalleled contribution to our growth over the past 17 years.
Tim has successfully led our Company through a period of
significant evolution and development, fostering our unique
culture and spearheading the next generation of the Isle brand.
Tim did an unbelievable job leading the company through the
hurricanes of 2005, and reopening our properties in record time.
He brought hope and encouragement to everyone affected by the
storms. From his initial role as general manager at our first
casino in Biloxi, Miss. to serving as president and chief
operating officer, he has positioned the Company for the future.
I am saddened by Tim's decision to leave Isle of Capri and we wish
him well," said Bernard Goldstein, chairman and chief executive
officer.
Mr. Hinkley will remain in his current role until a replacement is
named.
Based in Biloxi, Miss., Isle of Capri Casinos Inc. (Nasdaq: ISLE)
-- http://www.islecorp.com/-- develops and owns gaming and
entertainment facilities. The Company owns and operates riverboat
and dockside casinos in Biloxi, Vicksburg, Lula and Natchez,
Miss.; Bossier City and Lake Charles (two riverboats), La.;
Bettendorf, Davenport and Marquette, Iowa; and Kansas City and
Boonville, Mo. The Company also owns a 57% interest in and
operates land-based casinos in Black Hawk (two casinos) and
Cripple Creek, Colorado. Isle of Capri's international gaming
interests include a casino that it operates in Freeport, Grand
Bahama, and a 2/3 ownership interest in casinos in Dudley, Walsal
and Wolverhampton, England. The company also owns and operates
Pompano Park Harness Racing Track in Pompano Beach, Fla.
* * *
Moody's Investors Service affirmed its Ba3 Corporate Family Rating
on Isle of Capri Casinos in connection with its implementation of
the new Probability-of-Default and Loss-Given-Default rating
methodology for the Gaming, Lodging & Leisure sector. Moody's
assigned LGD ratings to four of the Company's debts including a
LGD5 rating on its 9% Sr. Sub. Notes, suggesting debt holders will
experience a 76% loss in the event of a default.
As reported in the Troubled Company Reporter on Nov. 8, 2006,
Standard & Poor's Ratings Services affirmed ratings on Isle of
Capri Casinos Inc., including its 'BB-' corporate credit rating.
At the same time, Standard & Poor's removed the ratings from
CreditWatch, where they were placed on Oct. 4, 2006, with negative
implications. The outlook is stable.
JOE MARTINEZ: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Joe Martinez, Sr.
Eleanor Martinez
aka Martinez Farms
aka Martinez Hay
aka Schrubbery Florist
P.O. Box 1648
Parker, AZ 85344
Bankruptcy Case No.: 07-00016
Chapter 11 Petition Date: January 16, 2007
Court: District of Arizona (Yuma)
Debtors' Counsel: Robert M. Cook, Esq.
Law Offices of Robert M. Cook
Missouri Commons
Suite #185 1440 East Missouri
Phoenix, AZ 85014
Tel: (602) 285-0288
Fax: (602) 285-0388
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtors did not file a list of their 20 Largest Unsecured
Creditors.
KAD PROPERTIES: Case Summary & Six Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: KAD Properties, L.L.C.
c/o William Dickey
1201 Overstreet Drive
Prescott, AZ 86303
Bankruptcy Case No.: 07-00158
Type of Business: The Debtor is engaged in the business of
residential rentals.
Chapter 11 Petition Date: January 16, 2007
Court: District of Arizona (Phoenix)
Judge: Redfield T. Baum PCT Sr.
Debtor's Counsel: J. Kent Mackinlay, Esq.
Warnock, Mackinlay & Associates, PLLC
1019 South Stapley Drive
Mesa, AZ 85204
Tel: (480) 898-9239
Fax: (480) 833-2175
Total Assets: $1,390,000
Total Debts: $911,500
Debtor's Six Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Carl Richardson Shareholder's loan Unknown
7148 E. Granite Peaks
Prescott Valley, AZ 86314
Eva Warren Shareholder's loan Unknown
210 Cana Circle
Nashville, TN 37205
George Rombaugh Shareholder's loan Unknown
252 W. Soaring Ave.
Prescott, AZ 86301
James Scordato Shareholder's loan Unknown
3455 W. Road 2 North
Prescott Valley, AZ 86314
Joseph Knochel Shareholder's loan Unknown
1728 Meadowridge
Prescott, AZ 86301
William Dickey Shareholder's loan Unknown
1201 Overstreet
Prescott, AZ 86303
LAMINATE KINGDOM: Involuntary Chapter 11 Case Summary
-----------------------------------------------------
Alleged Debtor: Laminate Kingdom, LLC
dba Floors Today
aka R & R Master Holdings, LLC
8405 Northwest 53 Street
Miami, FL 33166
Case Number: 07-10279
Involuntary Petition Date: January 16, 2007
Chapter: 11
Court: Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Petitioners' Counsel: Gary M. Freedman, Esq.
Tabas, Freedman, Soloff & Miller, P.A.
25 Southeast 2nd Avenue
Suite 919
Miami, FL 33131
Tel: (305) 375-8171
Fax: (305) 381-7708
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Tribune Company Advertisement in $255,214
435 North Michigan Avenue Sun Sentinel and
3rd Floor Orlando Sentinel
Chicago, IL 60611
The Miami Herald Media Co. Advertising $136,590
c/o Erasmo Acosta
1 Herald Plaza
Miami, FL 33132-1693
Herst Newspapers Advertising $102,530
Partnership L.P.
c/o William T. Kazanecki
Houston Chronicle Pub. Div.
801 Texas Avenue
Houston, TX 77002
WSVN-TV Channel 7 Advertisement $72,267
c/o Vivian M. Crews
1401 79 Street Causeway
Miami Beach, FL 33141
Star Telegram Optg, Ltd. Advertising $59,808
c/o Roger Provost, CFO
685 John B. Sias Parkway
Ft. Worth, TX 76134
The Charlotte Observer Advertisement $15,889
c/o Michael J. Murphy
P.O. Box 32188
Charlotte, NC 28232
LIFEPOINT HOSPITALS: S&P Lowers Corporate Credit Rating to BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Brentwood, Tennessee-based hospital owner and operator LifePoint
Hospitals Inc. The corporate credit rating was lowered to
'BB-' from 'BB'.
The rating outlook is stable.
"The rating downgrade reflects the company's operating weakness,
which impaired its ability to improve its financial profile to a
level by the end of 2006 that we stated was necessary in order to
retain the 'BB' rating," said Standard & Poor's credit analyst
David Peknay.
LifePoint operates 53 facilities in 20 states. This increased in
April 2005 from 30 hospitals in 9 states with the acquisition of
Province Healthcare Inc., and again in June 2006 with the
acquisition of four hospitals from HCA Inc. These acquisitions
expanded LifePoint's market breadth with a much larger hospital
portfolio and lessened the company's revenue state concentration,
particularly with regard to Kentucky.
These acquisitions and the associated financing had increased
lease-adjusted debt to EBITDA on a pro forma basis to about 3.8x
with the Province transaction. However, unexpected difficulties
at certain facilities, coupled with more challenging industry
conditions, resulted in underperformance. Lease-adjusted debt to
EBITDA increased to 4.2x as of Sept. 30, 2006, instead of
decreasing to a level that approached the low-3x area, as
we had expected. LifePoint's recently reported guidance for 2007
is below its earlier expectations and reflects management's
opinion that the hospital environment will remain difficult for at
least the next year.
Though the company is in the process of divesting certain
facilities, Standard & Poor's believes that its credit profile
will remain consistent with the rating for the foreseeable
future.
Challenging industry conditions for hospital providers include
higher bad debt, pricing pressures, and relatively weak patient
volume trends. In addition, LifePoint remains subject to
uncertain third-party reimbursement, particularly from managed
care companies, as historically high annual rate increases
diminish.
LIGAND PHARMA: John Higgins Succeeds Henry Blissenbach as CEO
-------------------------------------------------------------
Ligand Pharmaceuticals Incorporated disclosed that John L. Higgins
is joining the company as chief executive officer, president and a
member of its board of directors, succeeding Henry F. Blissenbach
who has served as chairman and interim chief executive officer
since August 2006. Mr. Blissenbach will continue as chairman of
the Board.
"Mr. Higgins is a proven leader with extensive deal-making
experience, outstanding strategic instincts and strong
relationships with Wall Street. His experience and track record
in creating value with biopharmaceutical companies will be a
tremendous asset to Ligand as our exciting product pipeline
advances," said Mr. Blissenbach. "We are pleased to appoint
Mr. Higgins to lead our Company and to complete the restructuring
of the business. In the near-term we are focused on closing the
sale of AVINZA to King Pharmaceuticals, and upon doing so we will
be able to focus our efforts on advancing our multiple pipeline
projects."
The company also disclosed that Mr. Higgins brings to Ligand over
14 years of corporate development, financing, strategic planning,
commercialization and investment banking experience in the
biopharmaceutical industry.
Prior to joining Ligand, Mr. Higgins was chief financial officer,
executive vice president, Finance, Administration and Corporate
Development of Connetics Corporation, a public specialty
pharmaceutical company, until its acquisition by Stiefel
Laboratories, Inc. in December 2006. During his tenure of nearly
a decade at PersonName Connetics, Mr. Higgins played a key
leadership role in numerous strategic initiatives including major
acquisitions, divestitures, multiple product and technology
licensing transactions and financings. Mr. Higgins earned an A.B.
in Economics, Magna Cum Laude, from Colgate University.
Ligand Pharmaceuticals Incorporated (NASDAQ:LGND)
-- http://www.ligand.com/-- discovers, develops and markets new
drugs that address critical unmet medical needs of patients in the
areas of cancer, pain, skin diseases, men's and women's hormone-
related diseases, osteoporosis, metabolic disorders, and
cardiovascular and inflammatory diseases. Ligand's proprietary
drug discovery and development programs are based on gene
transcription technology, primarily related to intracellular
receptors.
* * *
As reported in the Troubled Company Reporter on Dec. 6, 2006,
Ligand Pharmaceuticals Incorporated's balance sheet at
Sept. 30, 2006, showed $231,867,000 in total assets and
$470,712,000 in total liabilities, resulting in a $251,190,000
stockholders' deficit. At June 30, 2006, the company had a
stockholders' deficit of $238.5 million.
MORGAN STANLEY: Moody's Junks Rating on $4.5 Mil. Class K Certs.
----------------------------------------------------------------
Moody's Investors Service upgraded the rating of one class,
downgraded the rating of one class and affirmed the ratings of 13
classes of Morgan Stanley Dean Witter Capital I Trust 2002-IQ3,
Commercial Mortgage Pass-Through Certificates, Series 2002-IQ3 as:
-- Class A-2, $63,352,045, Fixed, affirmed at Aaa
-- Class A-3, $86,675,228, Fixed, affirmed at Aaa
-- Class A-4, $482,862,000, Fixed, affirmed at Aaa
-- Class X-1, Notional, affirmed at Aaa
-- Class X-2, Notional, affirmed at Aaa
-- Class X-Y, Notional, affirmed at Aaa
-- Class B, $26,152,000, Fixed, upgraded to Aa1 from Aa2
-- Class C, $27,289,000, Fixed, affirmed at A2
-- Class D, $2,274,000, Fixed, affirmed at A3
-- Class E, $13,645,000, Fixed, affirmed at Baa1
-- Class F, $10,233,000, Fixed, affirmed at Baa2
-- Class G, $6,823,000, Fixed, affirmed at Baa3
-- Class H, $10,233,000, Fixed, affirmed at Ba3
-- Class J, $9,097,000, Fixed, affirmed at B2
-- Class K, $4,548,000, Fixed, downgraded to Caa1 from B3
As of the Jan. 15, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately
16% to $763.6 million from $909.6 million at securitization. The
Certificates are collateralized by 209 mortgage loans ranging in
size from less than 1% to 8.3% of the pool, with the top 10 loans
representing 39.1% of the pool. The pool includes 41 residential
cooperative loans, which are shadow rated Aaa, and a shadow rated
loan. Four loans, representing 2.7% of the pool, have defeased
and are collateralized by U.S. Government securities.
The pool has experienced a minimal loss of approximately $4,000
since securitization. Twenty nine loans, representing 19.6% of
the pool, are on the master servicer's watchlist. Currently two
loans, representing 4.4% of the pool, are in special servicing.
The largest specially serviced loan is the Tulsa Distribution
Center Loan, which is secured by a 758,000 square foot warehouse
and distribution facility located in Tulsa, Oklahoma. The
improvements consist of 5.5% office, 30.7% refrigerated warehouse
and 63.8% climate controlled warehouse. At securitization the
property was 100% leased to the Fleming Company, which declared
bankruptcy in April 2003 and subsequently rejected its lease. The
loan was transferred to special servicing in June 2005 due to
delinquency and was transferred to the trust via deed-in-lieu of
foreclosure in November 2005. Moody's has estimated a loss of
approximately $15.5 million from this loan. No losses are
expected from the other specially serviced loan.
Moody's was provided with full year 2005 and partial year 2006
operating results for approximately 94.4% and 43.9% respectively,
of the performing loans. Moody's loan to value ratio for the
conduit component, excluding the specially serviced loans, is
76.3% compared to 78% at Moody's last full review in November 2005
and compared to 77.4% at securitization. Moody's is upgrading
Class B due to increased credit support levels and stable overall
pool performance. Moody's is downgrading Class K due to
anticipated losses from the specially serviced loans and LTV
dispersion. Based on Moody's analysis, 14.3% of the pool has a
LTV greater than 100%, compared to 6.7% at last review and
compared to 1% at securitization.
The shadow rated loan is the 2731 San Tomas Expressway Loan, which
is secured by a 125,000 square foot Class A office building
located in Santa Clara, California. The property is 100% leased
to Nvidia Corporation through January 2012. The property's
occupancy and financial performance have been stable, although the
overall Santa Clara market has declined significantly since
securitization. Moody's current shadow rating is Ba1, the same as
at last review.
The top three conduit loans represent 20.6% of the outstanding
pool balance. The largest conduit loan is the 77 P Street Office
Loan, which is secured by a 342,000 square foot office building
located in the Capitol Hill submarket of Washington, D.C. The
property is 100% occupied, the same as at last review. All the
tenants are departments of the Washington, D.C. municipal
government with leases expiring in June 2011, November 2011 and
April 2012. Moody's LTV is 83.1%, compared to 88.1% at last
review.
The second largest conduit loan is the One Seaport Plaza Loan,
which represents a 34.1% participation interest in a
$182.8 million first mortgage loan. The loan is secured by a
1.1 million square foot Class A office building located on Water
Street in New York City. The property is 100% leased, compared to
94.0% at last review. The largest tenants include Wachovia Bank,
N.A., and AON Corporation. Moody's LTV is 63.7%, compared to
78.0% at last review.
The third largest conduit loan is the Richards Building Loan,
which is secured by a leasehold mortgage on a 126,000 square foot
biotechnology office building located in Cambridge, Massachusetts.
The property is 100% occupied as of May 2006, compared to 94% at
last review. The largest tenants are Alkermes and Genzyme
Corporation. Moody's LTV is 88.7%, compared to 95% at last
review.
The pool's collateral is a mix of office and mixed use, retail,
industrial and self storage, residential cooperative, multifamily,
U.S. Government securities and lodging. The collateral properties
are located in 37 states and Washington, D.C. The highest state
concentrations are New York, California, Washington, D.C.,
Massachusetts and Michigan. All of the loans are fixed rate.
ON TOP COMMS: Has Until April 19 to Decide on La. Studio Lease
--------------------------------------------------------------
The Honorable Paul Mannes of the U.S. Bankruptcy Court for the
District of Maryland further extended until April 19, 2006, the
period within which On Top Communications LLC and its debtor-
affiliates can elect to assume, assume and assign, or reject their
unexpired nonresidential real property lease for studio space
located at 27104 Highway 23, in Port Sulphur, Louisiana.
This is the Debtors' thirteenth request for extension.
The Debtors inform the Court that they are in the process of
evaluating new methods of operating and new proposals for
returning the radio station to full operations, including the use
of a temporary broadcast facility. In addition, the Debtors had
negotiated with the senior secured lenders and BC Liquidity Fund
I, LLC, to get the station back on the air.
The Debtor expects that this be their final motion.
Headquartered in Lanham, Maryland, On Top Communications LLC and
its affiliates acquire, own and operate FM radio stations located
in the Southeastern United States. The company and its debtor-
affiliates filed for chapter 11 protection on July 29, 2005
(Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of
Bowie, Maryland, represents the Debtors in their restructuring
efforts. No Official Committee of Unsecured Creditors has been
appointed in this case. When the Debtors filed for protection
from their creditors, they estimated assets and debts of $10
million to $50 million.
ORIGEN FINANCIAL: Weak Performance Cues Moody's Junk Cert. Rating
-----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings on two
mezzanine certificates from Origen's 2001-A Manufactured Housing
securitization. The loans were originated and are serviced by
Origen Financial Inc.
Moody's previously downgraded several senior, mezzanine and
subordinate certificates from Origen's 2001-A and 2002-A
manufacturing housing securitizations in September 2004 and in
March 2005. The current action is prompted by the continued
weaker-than anticipated performance of the pool, as reflected by
the high level of cumulative losses and repossessions and erosion
of credit support. Since losses have exceeded the available
amount of excess spread, the overcollateralization has been
completely eroded.
As a result, the Class B Certificates have been completely written
down and the Class M-2 Certificates are currently realizing
losses. The rating action reflects the fact that the M-1
Certificates may incur losses in the future.
These are the rating actions:
* Origen Manufactured Housing Contract
* Senior/Subordinate Asset-Backed Certificates, Series 2001-A
-- Class M-1 Certificates, downgraded from B1 to B3
-- Class M-2 Certificates, downgraded from Ca to C
Origen is a Delaware limited liability company with its
headquarters in Southfield, Michigan. The company is primarily
engaged in the business of underwriting, originating and servicing
manufactured housing contracts.
PIER 1: Moody's Junks Corp. Family Rating, Places Negative Outlook
------------------------------------------------------------------
Moody's Investors Service downgraded Pier 1 Imports Inc.'s
corporate family rating to Caa1 from B3 after its continuing
operating struggles and modest performance over the 2006 holiday
season.
The rating outlook was revised to negative.
"The company's new advertising campaign did not drive the expected
customer traffic over the holiday season" said Kevin Cassidy, Vice
President/Senior Analyst at Moody's.
"With continuing same store sales compression, Moody's expects
that the recent trend of negative EBIT margins will continue in
the near term " Mr. Cassidy further states.
"Moody's believes the company has adequate liquidity in the near
term with over $170 million of cash as of November 2006 and about
$200 million available under its $325 million revolving credit
facility".
However, Mr. Cassidy further stated that "if Pier 1's liquidity
becomes strained over the next few months, its ratings could be
lowered." The key indicator Moody's will be focusing on will be
having at least $200 million of cash on hand and available
borrowings.
The negative outlook reflects Moody's expectation that same store
sales and operating margins may continue to be negative in the
near term and that the company may accelerate its store
divestiture program or accelerate its pursuit of strategic
alternatives. The negative outlook also reflects Moody's
expectation that adjusted leverage will remain in the double
digits over the next twelve to eighteen months.
PILGRIM'S PRIDE: Protein Acquisition Merges with Gold Kist
----------------------------------------------------------
Pilgrim's Pride Corporation's wholly owned subsidiary, Protein
Acquisition Corporation, filed with the Delaware Secretary of
State a Certificate of Ownership and Merger.
Protein was merged with and into Gold Kist Inc., which is the
surviving corporation in the merger, thereby becoming a wholly
owned subsidiary of Pilgrim's Pride.
As reported in the Troubled Company Reporter on Jan. 12, 2007,
Pilgrim's Pride completed its acquisition of Gold Kist, following
its completed tender offer.
The Merger was consummated in accordance with the terms of the
Agreement and Plan of Merger by and among the company, Gold Kist
and Protein. Pursuant to the Merger Agreement, each share then
outstanding was canceled and converted automatically into the
right to receive $21 per share in cash without interest.
Immediately following the filing of the Certificate of Ownership
and Merger, Gold Kist filed a certificate of amendment of amended
and restated certificate of incorporation, which changed the name
of Gold Kist to Pilgrim's Pride Corporation of Georgia, Inc.
About Gold Kist
Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS)
-- http://www.goldkist.com/-- operates a fully integrated chicken
production, processing and marketing business. Gold Kist's
production operations include nine divisions located in Alabama,
Florida, Georgia, North Carolina and South Carolina.
About Pilgrim's Pride
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corp.
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the United
States, Mexico and in Puerto Rico. Pilgrim's Pride employs
approximately 40,000 people and has major operations in Texas,
Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina,
Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and
Puerto Rico, with other facilities in Arizona, Florida, Iowa,
Mississippi and Utah.
* * *
Moody's Investors Service's held its Ba2 Corporate Family Rating
for Pilgrim's Pride Corp. In addition, Moody's revised or held
its probability-of-default ratings and assigned loss-given-default
ratings on the company's note issues, including an LGD6 rating on
its $100 million 9.25% Sr. Sub. Global Notes Due Nov. 15, 2013,
suggesting noteholders will experience a 95% loss in the event of
a default.
As reported in the Troubled Company Reporter on Dec. 6, 2006,
Standard & Poor's Ratings Services reported that its 'BB'
corporate credit rating and other ratings on the second-largest
U.S. poultry processor, Pilgrim's Pride Corp., remain on
CreditWatch with negative implications, where they were originally
placed Aug. 21, 2006.
PILGRIM'S PRIDE: S&P Lowers Corporate Credit Rating to BB-
----------------------------------------------------------
Standard & Poor's Ratings Services reported that the corporate
credit rating on the largest U.S. poultry processor, Pilgrim's
Pride Corp., was lowered to 'BB-' from 'BB'. The ratings were
removed from CreditWatch with negative implications where they
were originally placed on Aug. 21, 2006.
The downgrade reflects the company's highly leveraged financial
profile after the completion of its acquisition of Gold Kist Inc.,
the third largest poultry producer in the U.S. Gold Kist was
acquired for $21.00 per share or $1.1 billion and the assumption
of $144 million of debt.
At the same time, Standard & Poor's assigned its 'B' ratings to
the company's proposed $250 million senior unsecured notes due
2015 and $200 million of senior subordinated notes due 2017.
Proceeds from this financing will be used to repay the
$450 million bridge term loan used to close the acquisition, along
with an amended and restated bank facility, on
Jan. 9, 2007. The senior unsecured notes are rated two notches
below the corporate credit rating due to the amount of priority
debt.
The ratings on the outstanding debt of Gold Kist were withdrawn.
The outlook is negative. Pro forma for the transaction,
Pittsburg, Texas-based Pilgrim's Pride will have about
$1.85 billion of debt.
PITTSFIELD WEAVING: Court Okays Nixon Peabody as Special Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire
granted the request of Pittsfield Weaving Company to employ Nixon
Peabody LLP as its special patent counsel.
Nixon Peabody is expected to:
a) pay certain domestic issue fees, publication fees and taxes
due and prepare the related filings with respect to the
Debtor's patents and pending applications for additional
patents;
b) pay certain Annuity and Maintenance fees and taxes due
internationally and prepare the related filings with respect
to the Debtor's patents and patents pending, including,
without limitation, in Canada, China, Switzerland, Germany,
Great Britain, South Korea and Brazil;
c) file certain Notices of Appeal with respect to the Debtor's
patents and patents pending;
d) file certain Information Disclosure Statements with respect
to the Debtor's patents and patents pending;
e) provide certain notice to the Debtor with respect to the
Debtor's patents and patents pending.
The Debtor discloses that David Resnick, a partner at Nixon
Peabody, will bill $490 an hour for performing patent-related
services and exigent patent services. Other attorneys and
paralegals who will assist Mr. Resnick will bill between $150 to
$425 per hour.
Although Nixon Peabody holds and has asserted a non-priority
unsecured claim in the amount of $75,147 against the Debtor for
services provided prepetition, the amount of that claim is
insignificant in relation to the importance of resolving the
Exigent Patent Issues on the favorable payment terms offered by
Nixon Peabody as special counsel.
Mr. Resnick assures the Court that his firm does not hold or
represent any interest adverse to the Debtors' estates and is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Based in Pittsfield, New Hampshire, Pittsfield Weaving Company --
-- http://www.pwcolabel.com/-- provides brand identification to
the apparel and soft goods industries, and manufactures woven and
printed labels and RFID/EADS solutions. The company filed it
chapter 11 protection on Sept. 20, 2006 (Bankr. D. NH Case
No. 06-11214). Williams S. Gannon, Esq., at William S. Gannon
PLLC represent the Debtor in its restructuring efforts. Bruce A.
Harwood, Esq., at Sheehan Phinney Bass + Green, PA serves as
counsel to the Official Committee of Unsecured Creditors.
Pittsfield Weaving estimated its assets and debts at $10 million
to $50 million when it filed for protection from its creditors.
REFCO INC: CFTC Objects to Mr. McNeil's Case Conversion Request
---------------------------------------------------------------
Commodity Futures Trading Commission asks the Honorable Robert D.
Drain of the U.S. Bankruptcy Court for the Southern District of
New York to deny Michael A. McNeil's request to convert Refco F/X
Associates, LLC's and all Refco companies' cases from a Chapter 11
case to Chapter 7 of the Bankruptcy Code because the relief he is
seeking is not available under the Bankruptcy Code.
Glynn L. Mays, Esq., Senior Assistant General Counsel of CFTC, in
Washington, D.C., tells the Court that, pursuant to the limits
provided under Subchapter IV of Chapter 7 of the Bankruptcy Code,
any customers of FXA, are not eligible for relief under that
subchapter.
Ms. Mays contends that while, in general, the Commodity Exchange
Act requires that transactions should be conducted on or subject
to the rules of a board of trade designated or registered by the
CFTC as a contract market or derivatives transaction execution
facility, retail foreign currency futures transactions may be
conducted away from a contract market under a CEA statutory
exemption.
According to Ms. Mays, Subchapter IV applies to and requires that
bankruptcy proceedings be conducted under Chapter 7 for any
"commodity broker" as defined in Section 101(6).
Section 101(6) defines commodity broker as a futures commission
merchant with respect to which there is a "customer." Section
761(9) defines "customer" as an entity that holds a claim against
the futures commission merchant on account of a commodity contract
made, received, acquired, or held by or through that merchant.
Moreover, Section 761(4) defines "commodity contract" with respect
to a futures commission merchant, as a "contract for the purchase
or sale of a commodity for future delivery on, or subject to the
rules of, a contract market or board of trade." That is, Ms. Mays
clarifies, only contracts traded "on exchange" are included.
Ms. Mays notes that Mr. McNeil's claim is that FXA engaged in
futures business, however, the record seems clear that its
business was not "on exchange." Thus, she asserts, Subchapter IV
of Chapter 7 could not apply.
Furthermore, Ms. Mays says, Mr. McNeil asserted that FXA is
required to liquidate under Subchapter IV on the basis that it was
also a "foreign futures commission merchant," a "leverage
transaction merchant," a "clearing organization," and a "commodity
options dealer."
Rather than go through separate eligibility requirements for each
one of those types of entities under Subchapter IV, Mr. McNeil
provides virtually no factual context for his assertions,
Ms. Mays points out.
About Refco Inc.
Headquartered in New York City, Refco Inc. (OTC: RFXCQ) --
http://www.refco.com/-- is a diversified financial services
organization with operations in 14 countries and an extensive
global institutional and retail client base. Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore. In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and $16.8 billion in debts to
the Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada. Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner
is represented by Bingham McCutchen LLP. RCM is Refco's
operating subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262).
Refco Commodity Management, Inc., formerly known as CIS
Investments, Inc., a debtor-affiliate of Refco Inc., filed for
chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No.
06-12436). (Refco Bankruptcy News, Issue No. 54; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
Plan Update
On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along
with Marc S. Kirschner, the Chapter 11 Trustee for the estate of
Refco Capital Markets, Ltd., delivered a Chapter 11 plan of
reorganization and accompanying Disclosure Statement to the Court.
On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure
Statement and on Oct. 13, filed a Modified Amended Disclosure
Statement. On Oct. 16, 2006, the Court gave its tentative
approval on the Disclosure Statement and the Court Clerk entered
an order on Oct. 20, 2006.
On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and
certain of its direct and indirect subsidiaries, including Refco
Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed
by the Court. That Plan became effective on Dec. 26, 2007.
REFCO INC: Payments to Professionals Reaches $145.3 Million
-----------------------------------------------------------
Refco Inc. has paid $145.3 million of fees and expenses to 34
firms of lawyers and restructuring professionals working for the
company or its creditors committee through the end of 2006, the
Associated Press reports.
Court documents disclose that Skadden, Arps, Slate, Meagher &
Flom, the company's lead counsel, collected $38.8 million in fees.
J. Gregory Milmoe, Esq., at Skadden Arps, told AP that the fees
were justified given the complexity of the case. The final tab
could reach to $180 million, he said.
AP reveals that the company also paid these firms:
-- Milbank Tweed Hadley & McCloy LLP for $17.4 million;
-- AlixPartners LLC for $24.4 million;
-- FTI Consulting for $11.8 million; and
-- Goldin Associates for $10.1 million.
Reports show that in December, the company has rewarded
$1.81 billion to creditors, with the bulk of that amount going to
Refco Capital Markets Ltd. creditors, Refco's offshore unit.
Refco Capital owns $83% of the $670 million Refco still holds in
its safety box.
About Refco Inc.
Headquartered in New York City, Refco Inc. (OTC: RFXCQ) --
http://www.refco.com/-- is a diversified financial services
organization with operations in 14 countries and an extensive
global institutional and retail client base. Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore. In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and $16.8 billion in debts to
the Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada. Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner
is represented by Bingham McCutchen LLP. RCM is Refco's
operating subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262).
Refco Commodity Management, Inc., formerly known as CIS
Investments, Inc., a debtor-affiliate of Refco Inc., filed for
chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No.
06-12436).
Plan Update
On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along
with Marc S. Kirschner, the Chapter 11 Trustee for the estate of
Refco Capital Markets, Ltd., delivered a Chapter 11 plan of
reorganization and accompanying Disclosure Statement to the Court.
On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure
Statement and on Oct. 13, filed a Modified Amended Disclosure
Statement. On Oct. 16, 2006, the Court gave its tentative
approval on the Disclosure Statement and the Court Clerk entered
an order on Oct. 20, 2006.
On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and
certain of its direct and indirect subsidiaries, including Refco
Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed
by the Court. That Plan became effective on Dec. 26, 2006.
ROYAL OAKS: Case Summary & 40 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: Royal Oaks JH, LLC
dba Royal Oaks Manor Apartments
dba Royal Oaks Manor Apartments
3260 Blume
San Pablo, CA
Bankruptcy Case No.: 07-30225
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Royal Oaks BB, LLC 07-30224
Chapter 11 Petition Date: January 16, 2007
Court: Northern District of Texas (Dallas)
Judge: Stacey G. Jernigan
Debtors' Counsel: Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Estimated Assets Estimated Debts
---------------- ---------------
Royal Oaks JH, LLC Less than $10,000 $1 Million to
$100 Million
Royal Oaks BB, LLC Less than $10,000 $100,000 to
$1 Million
A. Royal Oaks JH, LLC's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Welsfargo $6,286,265
Midland Loan Services, Inc.
Lockbox Number 771223
Chicago, IL 60677-1002
Cirro Energy $82,977
P.O. Box 911504
Dallas, TX 75391-1504
City of Grand Prairie $53,839
P.O. Box 534045
Grand Prairie, TX 75053-4045
Gexa Energy $103,392
20 Greenway Plaza, Suite 600
Houston, TX 77043
Heartland Private Service, Inc. $3,951
All Star and Colors $3,424
Hughes $2,116
AAA Apartment Staffing $2,082
Justice of the Peace #4 $1,601
Redi Carpet $1,550
APE $1,534
Ameristar Screen and Glass $1,412
Direct Service Company $1,127
Green Oasts Lawn Service $1,000
Five Star Contractors, Inc. $595
The Steward Organization $593
Dayton Square $586
Advantage Financial Services $561
Law Office of Kim Larence, P.C. $316
Apartment Association of Greater Dallas $227
B. Royal Oaks BB, LLC's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Gexa Energy $103,392
20 Greenway Plaza, Suite 600
Houston, TX 77043
Cirro Energy $82,977
P.O. Box 911504
Dallas, TX 75391-1504
City of Grand Prairie $53,839
P.O. Box 534045
Grand Prairie, TX 75053-4045
Heartland Private Service, Inc. $3,951
All Star and Colors $3,424
Hughes $2,116
AAA Apartment Staffing $2,082
Justice of the Peace #4 $1,601
Redi Carpet $1,550
APE $1,534
Ameristar Screen and Glass $1,412
Direct Service Company $1,127
Green Oasts Lawn Service $1,000
Five Star Contractors, Inc. $595
The Steward Organization $593
Dayton Square $586
Advantage Financial Services $561
Law Office of Kim Larence, P.C. $316
Apartment Association of Greater Dallas $227
A to Z Contractors $216
SACO I: Moody's Junks Rating on Series 2004-1 Class B-2 Certs.
--------------------------------------------------------------
Moody's Investors Service has downgraded two certificates from two
deals issued by SACO I Trust. The actions are based on the
analysis of the credit enhancement provided by subordination,
overcollateralization and excess spread relative to the expected
loss. These transactions are backed by closed end seconds, and
have seen recent losses that have exceeded the excess spread
available thereby depleting the overcollateralization.
These are the rating actions:
* SACO I Trust
-- 2004-1, Class B-2, Downgraded from B3 to Caa2
-- 2005-2, Class B-4, Downgraded from Ba2 to Ba3
SACRED HEART: Moody's Downgrades Debt Rating to B1 from Ba3
-----------------------------------------------------------
Moody's Investors Service has downgraded Sacred Heart Health
System's debt rating to B1 from Ba3 and removed the rating from
Watchlist for downgrade, where it was placed on Oct. 13, 2006.
The outlook is negative.
The rating applies to $43.5 million of rated debt outstanding,
including approximately $10.3 million of variable rate debt backed
by an LOC provided by Wachovia Bank. The LOC backed debt is rated
under a "two party pay" analysis that incorporates both SHHS' and
Wachovia's rating.
Despite improved interim operating performance, increased volumes
in FY 06, and renewal of the letter of credit, the rating
downgrade is primarily due to increased competitive pressures
which Moody's feels may affect a trend of declining acute care
volumes in four of the last five years.
Legal security:
The Series 2005 bonds are secured by a gross revenue pledge of the
Obligated Group, which is comprised of Sacred Heart Health System
and Sacred Heart Hospital of Allentown, the flagship facility and
a member of SHHS. Additionally, the Hospital's obligations will
be secured by a mortgage of SHH's main building in Allentown. The
bonds are secured by a fully funded debt service reserve fund
equal to maximum annual debt services of the Series 2005 bonds.
Interest rate derivatives:
None
Strengths:
-- New president and CEO recently installed with a focus on
physician relationships. After four consecutive years of
declining operating performance, Moody's believes the
change in management will provide a fresh perspective
-- SHHS has developed a niche in non acute care services,
including nursery, transitional care, adult behavioral
medicine, and adult psychiatry volumes, demonstrated by the
28% increase in non acute care volumes since 2003,
resulting in increased disproportionate share payments.
-- No significant debt plans for several years
Challenges:
-- After receiving a one year extension of the LOC, provided
by Wachovia, SHHS will have to secure a renewal when the
letter expires on Feb. 28, 2008
-- Declining market share through FY 05 in an increasingly
competitive service area with two larger competitors in the
immediate service area, one of which has announced plans to
offer cardiac services in January, 2007, and embark on an
expansion project that will double bed capacity by 2011
-- Average age of plant has increased in recent years to
14.1 years; deferred maintenance remains an ongoing concern
Recent developments:
The rating downgrade to B1 from Ba3 reflects intensified
competition in the primary service area that has resulted in
erosion of market share in recent years. Located in Allentown,
Pennsylvania, SHHS has historically drawn 50% of its inpatient
admissions from the City of Allentown, which Moody's views as
demographically unfavorable, with below average household income
of $32,000, well below the state median of $40,000. SHHS holds a
7% market share in the competitive environment of the Lehigh
Valley market, which has declined in recent years from 9% to Baa1-
rated St. Luke's Hospital and Health Network and A1-rated Lehigh
Valley Health Network. Notably, SLHHN opened a newly renovated,
100 bed facility in Allentown in 2003, and plans to add 26 beds by
2009 and double bed capacity by 2011. Similarly, SHHS' inpatient
admissions have decreased 8.1% since 2002, although ED volumes
have grown 33%. Though 95.5% of SHHS' primary care admissions are
referred by physicians that solely have admitting privileges at
SHHS, the remaining 4.5% remains vulnerable to potential volume
erosion. And while acute care volumes have decreased 20% since
2003, SHHS has experienced a 36% increase in non-acute care
services, including transitional care, adult behavioral medicine,
and adult psychiatry. As a result of increased non-acute care
volume, disproportionate share payments increased $0.7 million
since FY 02 and $0.3 million increase in FY 06.
After the fourth consecutive year of operating decline and a
$9.7 million loss in FY 06, financial performance at SHHS has
rebounded through the first five months of FY 07, with revenues
increasing 7% at SHH due to volume increases, a higher case mix,
improved payer mix, as well as improved revenue collection
stemming from the installation of electronic medical records.
Expenses remained flat through the first five months, increasing
1.7% over five months of FY 2006 performance. Zero salary
increases as well as improved supply expense contracts have
allowed for expense containment, although management expects to
rollout a 2% wage increase in February. SHH reported a
$1.3 million operating income through four months of FY 07, up
from a $0.8 million loss after four months of FY 06, although
losses of $1.8 million at the system level stemming from employed
physician practices, which refer 25% of admissions, continue to
suppress system performance. The hospital represents
approximately 88% of the system revenues.
Due to operating improvement in the interim period, absolute
liquidity has improved by $0.7 million, although concerns
surrounding an increase in average payment days at the hospital to
68 days after five months of FY 07 from 50 days after five months
of FY 06 remain. Due to operating performance in FY 06, SHHS was
in violation of the 1.2x debt service coverage covenant and was
required to engage a consultant to cure the violation. SHHS
expects to satisfy this covenant going forward and has budgeted
for a $1.0 million loss at the system level in FY 07. Wachovia
Bank recently extended the LOC, which backs $10.3 million of rated
debt, and expires on Feb. 28, 2008. Despite improved operating
performance in the interim period, Moody's believes that renewal
risk still remains.
Outlook:
The negative outlook is attributable to increased competitive
pressures in the primary service area and the subsequent volumes
pressures that remain outstanding.
What could change the rating -- up
Material and sustained improvement in operating performance,
growth and stabilization in volumes, strengthened cash and related
measures and market share growth.
What could change the rating -- down
Further declines in operating performance, or decreases in
liquidity, or a material increase in debt without commensurate
increases in cash flow.
Key indicators:
Assumptions & Adjustments:
* Based on financial statements for Sacred Heart Healthcare
System
* First number reflects audit year ended June 30, 2005
* Second number reflects audit year ended June 30, 2006
* Investment returns normalized at 6% unless otherwise noted
-- Inpatient admissions: 8,298; 8,547
-- Total operating revenues: $122,056; $127,487
-- Moody's-adjusted net revenue available for debt service:
$$8229; $1,701
-- Total debt outstanding: $51,357; $47,892
-- Maximum annual debt service: $5,360; $5,360
-- MADS Coverage with reported investment income: 1.43x;
0.25x
-- Moody's-adjusted MADS Coverage with normalized
investment income: 1.54x; 0.32x
-- Debt-to-cash flow: 9.42; -35.28
-- Days cash on hand: 73 days; 63 days
-- Cash-to-debt: 46.9%; 47.3%
-- Operating margin: -4.1%; -7.6%
-- Operating cash flow margin: 3.6%; -0.3%
RATED DEBT:
* Sacred Heart HealthCare System
-- Series 1998 A, $7.5 million outstanding; fixed rate;
rated B1
-- Series 1998 B, $10.3 million outstanding; variable rate;
for rating, reference Moody's update report dated
Jan. 17th, 2007
-- Series 2005, $25.6 million outstanding; fixed rate;
rated B1
SCOTTS MIRACLE: S&P Holds Corporate Credit Rating at BB
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB' corporate credit rating, on lawn and garden care products
supplier The Scotts Miracle-Gro Co.
The ratings have been removed from CreditWatch with negative
implications, where they were placed on Dec. 13, 2006 after the
company's report that it will return $750 million to its
shareholders through a $500 million special one-time cash dividend
and fund share repurchases of up to $250 million.
The outlook is negative.
As of Sept. 30, 2006, Scotts had about $481.2 million in
total debt outstanding, excluding operating lease obligations.
Scotts will have about $1.7 billion in debt outstanding subsequent
to its leveraged recapitalization. The company plans to fund the
share repurchase and special dividend through a proposed $2.1
billion senior secured credit facility, consisting of a $1.55
billion revolving credit facility due 2012 and a
$550 million term loan A due 2012. As part of the plan, the
company intends to launch a tender offer to repurchase its
existing $200 million of 6.625% senior subordinated notes. Upon
successful completion of the tender, Standard & Poor's would
withdraw the 'B+' rating on the company's subordinated notes.
Scotts expects to complete the recapitalization by March
31, 2007.
"The 'BB' rating reflects the competitive markets in which the
company participates, the seasonal nature of its revenue streams,
an increasingly concentrated retail base, and a more aggressive
financial policy," said Standard & Poor's credit analyst Chris
Johnson.
"Partially mitigating these factors are the company's leading
market positions and well-recognized brand names."
Pro forma for the transaction, the company will become highly
leveraged. Pro forma lease adjusted average debt to EBITDA is
expected to be about 4.2x compared with average leverage of about
2.0x at Sept. 30, 2006. Pro forma funds from operation to total
average debt is expected to be about 15% compared with just below
30% prior to the planned transactions.
Standard & Poor's expects the company to apply a portion of
adjusted free operating cash flows to debt reduction, to bring
average debt leverage to levels more appropriate for the rating
category over the intermediate term.
SEA CONTAINERS: Can File Chapter 11 Plan Until June 12
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended,
until June 12, 2007, Sea Containers, Ltd. and its debtor-
affiliates' exclusive period to propose and file a plan of
reorganization, and to solicit acceptances of that plan to and
including Aug. 11, 2007.
As reported in the Troubled Company Reporter on Jan. 8, 2007,
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, told the Court that the Debtors'
sufficiently large and complex cases warrant an extension of their
Exclusive Periods. As of June 30, 2006, the Debtors had total
assets having a net book value of $1,673,000,000, including assets
of their former subsidiary Silja Oy Ab which has since been sold.
According to Mr. Brady, the company's capital structure adds
additional complexity because many of the Non-Debtor Subsidiaries
have historically relied on the Debtors to provide financing for
their various operational needs, including funding for the payment
of Non-Debtor Subsidiaries' creditors, funding required to
preserve the value of assets held by Non-Debtor Subsidiaries, and
funding to maintain the business operations of the Non-Debtor
Subsidiaries.
The Debtors' Chapter 11 Cases have the additional complexity of
dealing with foreign creditors, vendors and legal issues in a
multitude of foreign jurisdictions, including the coordination
with the JPLs and the proceedings in Bermuda, Mr. Brady adds.
About Sea Containers
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. (NYSE:
SCRA, SCRB) -- http://www.seacontainers.com/-- provides passenger
and freight transport and marine container leasing. Registered in
Bermuda, the company has regional operating offices in London,
Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The
company is owned almost entirely by United States shareholders and
its primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On October 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE Arca
after the company's failure to file its 2005 annual report on Form
10-K and its quarterly reports on Form 10-Q during 2006 with the
U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they reported
US$1.7 billion in total assets and US$1.6 billion in total
debts. (Sea Containers Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
SEA CONTAINERS: Can Decide on Leases Until May 13
-------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware extended, until May 13, 2007, Sea Containers,
Ltd. and its debtor-affiliates' original 120-day period to assume
or reject real property leases, pursuant to Section 365(d)(4) of
the Bankruptcy Code.
As reported in the Troubled Company Reporter, Jan. 8, 2007, the
Real Property Leases include the Debtors' headquarters and office
spaces in London, United Kingdom, which are also being used by the
Debtors' direct and indirect U.K. subsidiaries, related Robert S.
Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware. Mr. Brady also disclosed that the Debtors
conduct substantially all of their business activities from the
Premises.
Mr. Brady informed Judge Carey that Sea Containers Services is
not prepared to:
(i) assume the Premises Leases and obligate the estate for
the remaining five year terms under the Premises Leases;
or
(ii) reject the Leases before the expiration of the 120 days
set forth in Section 365(d)(4) because Sea Containers
Services' and the U.K. Subsidiaries' operations would be
required to immediately relocate.
Mr. Brady said an extension is warranted primarily because the
Debtors are current on its obligations under the Premises Leases
and intend to continue to fulfill their obligations under the
Leases on a timely basis, unless the Leases are rejected.
About Sea Containers
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On October 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they reported
US$1.7 billion in total assets and US$1.6 billion in total
debts. (Sea Containers Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
SEW CAL LOGO: Moore & Associates Raises Going Concern Doubt
-----------------------------------------------------------
Moore & Associates, Chartered, in Las Vegas, Nevada, expressed
substantial doubt about Sew Cal Logo Inc.'s ability to continue as
a going concern after reviewing the company's consolidated
financial statements for the first quarter ended Nov. 30, 2006.
The auditing firm pointed to the accumulated losses during the
last five years of operations. A review is substantially less in
scope than an audit in accordance with generally accepted auditing
standards.
Sew Cal Logo Inc. reported a $284,482 net loss on $566,033 of
revenues compared to a $101,555 net loss on $654,657 of revenues
for the same period in 2005.
The net decrease in revenues is primarily due to loss of private
label business as the market for headwear manufacturing continued
moving to Chinese imports.
The increase in net loss is primarily due to the $218,866 increase
in total expenses.
The bulk of the increase in expenses is attributed to increases in
rent expense, general and administrative expenses, officer and
administrative compensation, and consulting, legal and accounting
expenses.
At Nov. 30, 2006, the company's balance sheet showed $1.3 million
in total assets and $2.6 million in total liabilities, resulting
in a $1.3 million total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Nov. 30, 2006, are available for
free at http://researcharchives.com/t/s?18a4
Based in Los Angeles, Calif., Sew Cal Logo Inc. (OTCBB: SEWCE.OB)
-- http://www.sewcal.com/-- produces custom embroidered hats,
sportswear and related corporate identification apparel.
Clientele includes Fortune 500 companies, major motion picture and
television studios, as well as numerous local schools, shops and
small businesses.
SONIC CORP: 2007 1st Fiscal Qtr. Net Income Decreases to $15.3 MM
-----------------------------------------------------------------
Sonic Corp. has announced the results for the first quarter of
fiscal 2007, which ended Nov. 30, 2006.
Highlights of the company's performance included:
-- System-wide same-store sales growth of 3.4%;
-- The opening of 37 new drive-ins versus a total of 33 in the
first quarter last year;
-- A 9% increase in total revenues to $174.8 million from
$159.8 million in the prior-year period;
-- An 11% increase in income from operations to $30.5 million
from $27.6 million in the year-earlier period; and
-- Lower net income for the quarter, down 7% to $15.3 million
from $16.4 million for the first quarter last year, because
of higher interest and debt extinguishment expenses that are
reflected in the $5.7 million increase in net interest
expense.
Commenting on the announcement, Clifford Hudson, chairman and
chief executive officer, said, "We are pleased to report that the
opening quarter of fiscal 2007 reflected continued momentum in our
operations and significant achievements by the company to enhance
long-term stockholder value.
"Operationally, we were gratified to see our top-line momentum
continue, underscoring the ongoing success of sales-driving
strategies that helped push same-store sales 3.4% higher -- near
the high end of our long-term target range.
"Likewise, we witnessed healthy drive-in expansion with a 12%
increase in the number of new restaurants opened versus the same
quarter last year.
"Drawing on our strong balance sheet and solid cash flows, we also
completed a series of transactions during the first quarter that
resulted in repurchases of approximately 20% of our previously
outstanding stock.
"These steps provided immediate and direct benefits for selling
stockholders while enhancing Sonic's ability to deliver stronger
earnings growth over the long term."
First Quarter Results
Revenues for the first fiscal quarter rose 9% to $174.8 million
from $159.8 million in the year-earlier period, with the year-
over-year increase reflecting higher same-store sales, new unit
growth, and higher franchising income related to new franchise
drive-in development as well as the company's ascending royalty
rate.
Net income declined 7% to $15.3 million versus $16.4 million last
year.
Sonic's system-wide same-store sales increased 3.4% during the
first quarter versus 4.7% in the year-earlier period, reflecting a
4% increase at franchise drive-ins and a 0.6% increase at partner
drive-ins.
Sales at franchise drive-ins have continued to benefit from the
implementation of Sonic's PAYS program (credit card terminals at
each drive-in stall), which has been in place for more than a year
at partner drive-ins.
The roll-out of PAYS to franchise drive-ins, which began in
February 2005 and now extends to over 90% of Sonic's eligible
drive-ins versus 50% in the year-earlier quarter, is expected to
have an ongoing positive impact on franchisee same-store sales
over the remainder of calendar 2007.
During the first quarter, Sonic opened 37 new drive-ins, including
34 franchise drive-ins, compared with a total of 33 in the year-
earlier period, which included 30 by franchisees.
Sonic anticipates opening a total of 180 to 200 new drive-ins in
fiscal 2007, including approximately 150 to 160 by franchisees.
"Sonic continues to benefit from a multi-layered approach to
overall growth and profitability," Mr. Hudson added. "Our system-
wide marketing expenditures are on track to exceed $160 million
this year, an increase of more than 10% over fiscal 2006
expenditures, and will maintain our increased focus on national
cable advertising.
"New product news also remains key to our sales results, helping
keep Sonic relevant and compelling to consumers and building sales
in our non-traditional day parts such as mornings, afternoons and
evenings.
"These initiatives, together with the ongoing positive impact of
our PAYS program, continue to represent strong drivers that
produced solid same-store sales growth again this quarter.
"Importantly, these favorable sales trends have extended into
December, with estimated system-wide same- store sales above our
2% to 4% long-term growth target.
"While the second quarter is typically our most volatile, due to
the possibility of inclement weather conditions, we are pleased to
begin the quarter with solid sales momentum."
Mr. Hudson pointed out that Sonic's multi-layered strategies also
have provided direct benefits for the company's franchisees and
partners in the form of higher average unit volumes and drive-in
level profits.
Both of these measures reached record levels in fiscal 2006 and
continued to increase in the first quarter. "These higher returns
are tangible and compelling incentives that should continue to
fuel our expansion and help sustain our momentum in fiscal 2007,"
he said.
Mr. Hudson noted also that the company continued to implement its
new retrofit program in the first quarter, completing the retrofit
of 13 partner drive-ins.
Sonic began testing its new retrofit look in 2003 and, while
certain elements of the new look have been implemented in
approximately 130 partner drive-ins, fewer than one-half of the
drive-ins retrofitted to date have the final and complete version.
The company plans to roll out the retrofit program to an
additional 135 partner drive-ins this fiscal year. In January
2007, Sonic also will begin to extend the program to franchise
drive-ins and expects to complete the retrofit of 250 to 300
franchise drive-ins during fiscal 2007.
During the first quarter of fiscal 2007, Sonic repurchased a total
of $405.9 million of its common stock, including $366.1 million
repurchased through its tender offer.
New Loan
To fund the tender offer, the company negotiated a new
$586 million credit agreement, including a $100 million, five-year
revolving credit facility and a $486 million, seven-year term loan
facility.
On Dec. 20, 2006, Sonic completed an $800 million securitized
financing in the form of $600 million of fixed-rate senior notes
and $200 million of variable-rate notes to refinance the Bank
Loan.
Sonic expects that the fixed-rate notes will have an effective
weighted average fixed interest rate on a GAAP basis of
approximately 5.9%, after giving effect to hedging arrangements
entered into in contemplation of the transaction.
Loan origination costs will add an additional 80 basis points to
interest expense, producing an overall weighted average interest
cost of 6.7% on the fixed-rate notes.
Interest on the variable-rate notes will be payable at per annum
rates equal to LIBOR plus 105 basis points. Sonic has not drawn
on the variable notes to date and will pay a commitment fee of
0.5% on the unused portion of the variable notes facility.
Balance Sheet
At Nov. 30, 2006, the company's balance sheet showed
$652.456 million in total assets, $651.828 million in total
liabilities, and $628,000 in total stockholders' equity.
The company's stockholders' equity stood at $391.693 million at
Aug. 31, 2006.
The company's balance sheet at Nov. 30, 2006, showed strained
liquidity of $18.848 million due to low total current assets of
$54.365 million available to pay total current liabilities of
$73.213 million.
Full-text copies of the company's first fiscal quarter financials
are available for free at http://ResearchArchives.com/t/s?18b0
About Sonic Corp.
Sonic Corp. (Nasdaq: SONC) -- http://www.sonicdrivein.com/-- is
America's Drive-In. It originally started as a hamburger and root
beer stand in 1953 in Shawnee, Okla., called Top Hat Drive-In, and
then changed its name to Sonic in 1959. The first drive-in to
adopt the Sonic name is still serving customers in Stillwater,
Okla. Sonic has more than 3,200 drive-ins coast to coast and in
Mexico, where more than a million customers eat every day.
* * *
As reported in the Troubled Company Reporter on Aug. 16, 2006,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Oklahoma City, Oklahoma-based quick-service
restaurant operator Sonic Corp. S&P said the outlook is stable.
STEINWAY MUSICAL: Terminates Dennis Bamber Asset Purchase Pact
--------------------------------------------------------------
Steinway Musical Instruments Inc. provided a notice of termination
of the asset purchase agreement with Dennis Bamber Inc. dba The
Woodwind & The Brasswind.
As reported in the Troubled Company Reporter on Dec. 21, 2006,
Steinway has been named the lead bidder in the auction for music
retailer The Woodwind & The Brasswind, which filed for Chapter 11
bankruptcy protection in November 2006 after losing a lawsuit.
Based on the due diligence performed, the company has concluded
that there will be a failure of certain conditions necessary to
close the transaction. Therefore, Steinway is exercising its
right to terminate the agreement. The timing and effect of the
termination is subject to approval by the U.S. Bankruptcy Court
for the Northern District of Indiana.
About The Woodwind & The Brasswind
Headquartered in South Bend, Indiana, Dennis Bamber, Inc. dba The
Woodwind & The Brasswind sells musical instruments through its
retail store, catalogs and Internet sites. The company filed for
chapter 11 protection on Nov. 21, 2006 (Bankr. N.D. Ind. Case No.
06-31800). Howard L. Adelman, Esq., at Adelman & Gettleman, Ltd.,
in Chicago, Illinois, represents the Debtor. When the Debtor
filed for protection from its creditors, it estimated assets and
debts between $1 million and $100 million.
About Steinway Musical Instruments
Steinway Musical Instruments, Inc. (NYSE: LVB), through its
Steinway and Conn-Selmer divisions, manufactures musical
instruments. Its notable products include Bach Stradivarius
trumpets, Selmer Paris saxophones, C.G. Conn French horns, Leblanc
clarinets, King trombones, Ludwig snare drums and Steinway & Sons
pianos.
* * *
As reported in the Troubled Company Reporter on Nov. 7, 2006,
Standard & Poor's Ratings Services placed its ratings for Steinway
Musical Instruments Inc., including the 'BB-' corporate credit
rating, on CreditWatch with negative implications.
As reported in the Troubled Company Reporter on Oct. 3, 2006,
in connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. consumer products sector, the rating
agency confirmed its Ba3 Corporate Family Rating for Steinway
Musical Instruments, and downgraded its Ba3 rating to B1 on the
company's $175 million senior unsecured notes. Additionally,
Moody's assigned an LGD4 rating to those bonds, suggesting
noteholders will experience a 64% loss in the event of a default.
TERWIN MORTGAGE: Moody's Junks Rating on Class B-7 Debentures
-------------------------------------------------------------
Moody's Investors Service has downgraded the rating of the Class
B-7 tranche from Terwin Mortgage Trust 2006-2HGS. The collateral
backing this transaction consists of second lien residential
mortgage loans. The downgrade is based upon the recent, rapid
pace of losses which have deteriorated credit enhancement to the
point where it is unlikely that the downgraded class will receive
full repayment of principal.
These are the rating actions:
* Terwin Mortgage Trust 2006-2HGS
-- Class B-7, Downgraded to Caa3, Previously Ba3
UAL CORPORATION: Moody's Places Corporate Family Rating at B2
-------------------------------------------------------------
Moody's Investors Service assigned B1, LGD-3 42% ratings to the
United Air Lines Inc. $2.1 billion Senior Secured Revolving Credit
and Term Loan.
Moody's also assigned the B2 corporate family and probability of
default rating and a stable outlook at UAL Corporation. At the
same time, Moody's withdrew its corporate family and probability
of default ratings assigned at the United level and affirmed its
SGL-2 speculative grade liquidity rating. Moody's will withdraw
the ratings on United's existing $3 billion of revolving credit
and term loans once the new Bank Facilities close.
The rating outlook is stable.
Moody's notes that United's financial performance has improved
steadily since reorganizing through bankruptcy, with operating
performance and key credit metrics consistent with the B2
corporate family rating. The airline's lowered cost structure,
now more competitive with other main line carriers, as well as
high demand for passenger traffic, should produce steadily
improving financial results over the near term with better credit
metrics.
Additionally, the company anticipates reducing its balance sheet
debt by $900 million by utilizing a portion of its cash on hand.
Liquidity is expected to remain strong, nonetheless, with well
over $3 billion of cash on hand following the debt reduction,
along with Moody's expectation that operations will generate solid
free cash flow over the near term. Consequently, Debt to EBITDA
should moderate somewhat during 2007 as reduced cash commitments
are met through retained cash flows rather than incurring new
debt.
However, an element constraining the rating is United's EBITDA
margin. At 13.5%, it was somewhat below the average level of
similar US airlines for the first nine months of 2006 as United
has yet to generate an adequate revenue premium despite its
extensive route network. In addition, there is meaningful merger
risk for United, along with many of the US passenger airlines.
"While a merger of United with another mainline carrier could have
operational benefits over the longer term, there would also be
considerable integration issues as well as the potential for an
even higher level of indebtedness to finance any combination",
according to Bob Jankowitz, Senior Vice President at Moody's.
Beyond any near-term merger risk, over time United will need to
address its considerable re-fleeting requirement. The investment
level could be considerable and leverage would likely increase if
it adds new aircraft, although none are currently on order.
United plans a $1.8 billion term loan and a $300 million revolving
credit. These Bank Facilities are to be secured largely by
United's valuable Atlantic and Pacific routes, along with certain
related facilities and certain spare engines, among other assets.
While the appraised values of the collateral adequately cover the
secured debt, there has been considerable volatility in the
historic valuation of these routes and values could fall during an
industry downturn. As part of the refinancing, a considerable
amount of aircraft and spare parts will be released from the
existing collateral pool. As these aircraft and spare parts can
be used to secure additional financing, if needed, Moody's views
the transaction as somewhat beneficial to United's liquidity.
The stable outlook reflects Moody's expectation of further
improvements to the company's operating and financial performance
in the near term, resulting from further operating cost reductions
and unit revenue growth. Downward pressure could occur should a
deteriorating operating environment, combined with flat or rising
unit operating costs, lead to EBITDA margin less than 10% or EBIT
to interest expense moving towards 1.0x. A meaningful increase to
leverage due to resumption of mainline aircraft deliveries or
another event could also pressure the rating down absent an
offsetting expectation of strong operating improvements. The
ratings could be raised if internally-generated cash flows are
sufficient to sustain EBIT to interest expense in the range of
2.0x and retained cash flow to debt is in the range of 15%.
Ratings assigned:
-- United Air Lines, Inc. Senior secured bank credit
facilities at B1, LGD-3 42%
-- The corporate family rating and probability of default of
B2 and stable outlook was reassigned to the UAL Corporation
level, and the corporate family and probability of default
rating at United Air Lines, Inc. level was withdrawn.
UAL Corporation, is the holding company parent of United Air
Lines, Inc. Based in Elk Grove, IL, United Air Lines, Inc. is one
of the world's largest passenger airlines.
UNICO INC: Posts $4.8 Million Net Loss in Quarter Ended Nov. 30
---------------------------------------------------------------
Unico Inc. filed its financial statements for the third quarter
ended Nov. 30, 2006, with the Securities and Exchange Commission
on Jan. 16, 2007.
Unico Inc. reported a $4.8 million net loss for the third quarter
ended Nov. 30, 2006, compared with a $467,695 net loss for the
same period in 2005.
Unico Inc. had no revenues in the third quarter ended Nov. 30,
2006, compared with revenues of $25,000 in the same period in
2005.
The $4.4 million increase in net loss is primarily due to a
$2.7 million increase in loss on settlement of debt, an $856,170
increase in interest expense, and an $891,903 increase in
derivative loss on debentures.
At Nov. 30, 2006, the company's balance sheet showed $1.9 million
in total assets and $7.7 million in total liabilities, resulting
in a $5.8 million total stockholders' deficit.
The company's balance sheet at Nov. 30, 2006, also showed strained
liquidity with zero current assets available to pay $7.7 million
in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Nov. 30, 2006, are available for
free at http://researcharchives.com/t/s?18a0
Going Concern Doubt
As reported in the Troubled Company Reporter on July 25, 2006, HJ
Associates & Consultants LLP, expressed substantial doubt about
Unico Inc.'s ability to continue as a going concern after
auditing the company's financial statements for the years ended
Feb. 28, 2006, and 2005. The auditing firm pointed to the
company's recurring losses from operations and stockholders'
deficit.
About Unico
Unico Inc. (OTC BB: UCOI.OB) -- operated as a business development
company as defined by the Investment Company Act of 1940 from July
12, 2004 until October 2005. The decision to withdraw the
business development company election was made in consideration
for the company's change in operating strategy away from
individual investments towards more fully developing the mining
operations already acquired.
The company presently has three wholly owned subsidiaries, Deer
Trail Mining Company LLC, Silver Bell Mining Company Inc., and
Bromide Basin Mining Company LLC.
UNITED AIR: Moody's Assigns B1 Rating on $2.1 Billion Senior Loan
-----------------------------------------------------------------
Moody's Investors Service assigned B1, LGD-3 42% ratings to the
United Air Lines Inc. $2.1 billion Senior Secured Revolving Credit
and Term Loan.
Moody's also assigned the B2 corporate family and probability of
default rating and a stable outlook at UAL Corporation. At the
same time, Moody's withdrew its corporate family and probability
of default ratings assigned at the United level and affirmed its
SGL-2 speculative grade liquidity rating. Moody's will withdraw
the ratings on United's existing $3 billion of revolving credit
and term loans once the new Bank Facilities close.
The rating outlook is stable.
Moody's notes that United's financial performance has improved
steadily since reorganizing through bankruptcy, with operating
performance and key credit metrics consistent with the B2
corporate family rating. The airline's lowered cost structure,
now more competitive with other main line carriers, as well as
high demand for passenger traffic, should produce steadily
improving financial results over the near term with better credit
metrics.
Additionally, the company anticipates reducing its balance sheet
debt by $900 million by utilizing a portion of its cash on hand.
Liquidity is expected to remain strong, nonetheless, with well
over $3 billion of cash on hand following the debt reduction,
along with Moody's expectation that operations will generate solid
free cash flow over the near term. Consequently, Debt to EBITDA
should moderate somewhat during 2007 as reduced cash commitments
are met through retained cash flows rather than incurring new
debt.
However, an element constraining the rating is United's EBITDA
margin. At 13.5%, it was somewhat below the average level of
similar US airlines for the first nine months of 2006 as United
has yet to generate an adequate revenue premium despite its
extensive route network. In addition, there is meaningful merger
risk for United, along with many of the US passenger airlines.
"While a merger of United with another mainline carrier could have
operational benefits over the longer term, there would also be
considerable integration issues as well as the potential for an
even higher level of indebtedness to finance any combination",
according to Bob Jankowitz, Senior Vice President at Moody's.
Beyond any near-term merger risk, over time United will need to
address its considerable re-fleeting requirement. The investment
level could be considerable and leverage would likely increase if
it adds new aircraft, although none are currently on order.
United plans a $1.8 billion term loan and a $300 million revolving
credit. These Bank Facilities are to be secured largely by
United's valuable Atlantic and Pacific routes, along with certain
related facilities and certain spare engines, among other assets.
While the appraised values of the collateral adequately cover the
secured debt, there has been considerable volatility in the
historic valuation of these routes and values could fall during an
industry downturn. As part of the refinancing, a considerable
amount of aircraft and spare parts will be released from the
existing collateral pool. As these aircraft and spare parts can
be used to secure additional financing, if needed, Moody's views
the transaction as somewhat beneficial to United's liquidity.
The stable outlook reflects Moody's expectation of further
improvements to the company's operating and financial performance
in the near term, resulting from further operating cost reductions
and unit revenue growth. Downward pressure could occur should a
deteriorating operating environment, combined with flat or rising
unit operating costs, lead to EBITDA margin less than 10% or EBIT
to interest expense moving towards 1.0x. A meaningful increase to
leverage due to resumption of mainline aircraft deliveries or
another event could also pressure the rating down absent an
offsetting expectation of strong operating improvements. The
ratings could be raised if internally-generated cash flows are
sufficient to sustain EBIT to interest expense in the range of
2.0x and retained cash flow to debt is in the range of 15%.
Ratings assigned:
-- United Air Lines, Inc. Senior secured bank credit
facilities at B1, LGD-3 42%
-- The corporate family rating and probability of default of
B2 and stable outlook was reassigned to the UAL Corporation
level, and the corporate family and probability of default
rating at United Air Lines, Inc. level was withdrawn.
UAL Corporation, is the holding company parent of United Air
Lines, Inc. Based in Elk Grove, IL, United Air Lines, Inc. is one
of the world's largest passenger airlines.
UNITED AIR: S&P Rates $1.8 Billion Term Loan Due 2014 at B+
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
United Air Lines Inc.'s $300 million senior secured bank revolving
credit due 2012 and $1.8 billion term loan due 2014, currently
being syndicated.
In addition, a '1' recovery rating is assigned, indicating a high
expectation of full recovery of principal in the event of a second
United bankruptcy. Parent UAL Corp. guarantees the facility. In
addition, Standard & Poor's affirmed its 'B'
corporate credit ratings on United and parent UAL Corp.
"The 'B+' bank loan rating and '1' recovery rating reflect
collateral coverage by United's valuable Pacific route rights and
certain other assets that provides a high expectation of full
recovery of principal in the event of a second United bankruptcy,"
said Standard & Poor's credit analyst Philip Baggaley.
"The proposed facility replaces a larger $3.0 billion bankruptcy
exit facility arranged in early 2006."
The corporate credit ratings on UAL and United, which emerged from
Chapter 11 bankruptcy reorganization Feb. 1, 2006, reflect
United's participation in the price-competitive, cyclical, and
capital-intensive airline industry; pricing pressure from low-cost
carriers in the U.S. domestic market; and an overall highly
leveraged financial profile. These weaknesses are mitigated
somewhat by United's extensive and well-positioned route system
and by reductions in labor costs and financial obligations
achieved in bankruptcy.
United is the second-largest U.S. airline, and like other
traditional, hub-and-spoke airlines, it has suffered heavy losses
during 2001 through 2005, due to the effects of terrorism, high
fuel prices, and heightened low-cost competition in the U.S.
domestic market. United and UAL entered Chapter 11 in December
2002, and, through a long and difficult reorganization, used the
bankruptcy process to reduce United's exposure to the competitive
U.S. domestic market; secure substantial labor cost reductions in
negotiations with its unions, terminate defined-benefit pensions
plans; and reduce total debt and lease obligations by about one
quarter.
UAL should report gradually improving earnings and credit
measures, but the extent of improvement will depend on the
company's success in implementing further cost-cutting measures
and on general airline industry conditions. The outlook could be
revised to positive if industry conditions remain favorable and
UAL can execute on its planned revenue and operating cost
initiatives, which together could generate material financial
improvement. Adverse industry conditions, which could include the
effects of a significant economic slowdown or major terrorism, are
the most likely potential causes of a revision to a negative
outlook.
UNITED STATES STEEL: S&P Lifts Corporate Credit Rating to BB+
-------------------------------------------------------------
Standard & Poor's Ratings Service raised its corporate credit
rating on Pittsburgh, Pennsylvania-based United States Steel Corp
to 'BB+' from 'BB' and removed all ratings from CreditWatch, where
they had been placed with positive implications on
July 27, 2006.
At the same time, Standard & Poor's raised its rating on the
company's senior unsecured debt to 'BB+' from 'BB'.
The outlook is stable.
"The upgrade reflects U.S. Steel's strong financial performance,
improved balance sheet, and significant position in the North
American steel market," said Standard & Poor's credit analyst
Marie Shmaruk.
Benefiting from nearly three years of favorable steel market
conditions, U.S. Steel has experienced strong profitability and
healthy cash flows that have allowed it to improve its financial
leverage while prudently financing its growth, modernization, and
efficiency initiatives.
Barring a significant, prolonged downturn in the global steel
industry, U.S. Steel should continue to generate positive free
cash flow in 2007.
"We expect that U.S. Steel will likely continue to seek growth
opportunities in a rapidly consolidating industry," Ms. Shmaruk
said, "but we expect it to undertake such initiatives prudently,
limiting an increase in its debt leverage by using some of its
high cash balances, while focusing on operations that enhance its
overall cost profile.
"We could revise the outlook to negative if the company encounters
a prolonged cyclical downturn or a protracted period of
significant pricing pressure from low-price imports that
significantly weakens its financial profile. We could also revise
the outlook to negative if the company makes debt-financed
acquisitions that significantly weaken its credit profile,
although we do not expect this. Conversely, we could revise the
outlook to positive if the company maintains current debt levels,
communicates a financial policy indicative of an investment-grade
profile, continues to significantly reduce retiree obligations,
and demonstrates operating and cost flexibility over a range of
market cycles."
USI HOLDINGS: GS Deal Prompts Moody's Review on B1 Credit Rating
----------------------------------------------------------------
Moody's Investors Service has placed the B1 rating on the senior
secured credit facilities of USI Holdings Corporation under review
with direction uncertain after the company's report that it has
entered into a merger agreement to be acquired by GS Capital
Partners, a private equity affiliate of Goldman, Sachs & Co. The
total value of the transaction is estimated at
$1.4 billion, including repayment of USIH's existing debt. The
transaction is expected to close during the second quarter of
2007.
According to Moody's, the review will focus on USIH's financing
and strategic plans in connection with the reported merger. The
company has some capacity for increased financial leverage at its
current rating level, although a substantial increase in leverage
could put downward pressure on the rating.
On the other hand, Moody's expects that the new owners will
support further expansion of USIH, through organic growth and
acquisitions, which could have positive credit implications.
Specific factors that could lead to an upgrade include sustained
operating margins above 15%; sustained net profit margins above
5%; EBIT coverage of interest, adjusted for lease obligations,
consistently above 3x; and an adjusted debt-to-EBITDA ratio
consistently below 4x. Factors that could lead to a downgrade
include a decline in operating margins to less than 10%; adjusted
EBIT coverage of interest falling below 2x; or an adjusted
debt-to-EBITDA ratio above 5x.
Moody's last rating report on USIH took place on Oct. 5, 2006,
when the B1 rating was affirmed following the company's
announcement that it would raise an additional $100 million of
term loan debt through the accordion feature in its existing
credit agreement.
USIH, based in Briarcliff Manor, New York, is the ninth-largest US
insurance brokerage firm. Through subsidiaries across the US, the
company distributes property & casualty insurance and employee
benefits products and services to small and mid-sized businesses.
USIH reported total revenues of $402 million and net income of
$19.8 million for the first nine months of 2006. Shareholders'
equity was $435 million as of Sept. 30, 2006.
VERILINK CORP: Court OKs 2nd Amended Joint Plan of Reorganization
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
approved the Second Amended Disclosure Statement describing
Verilink Corporation and its debtor-affiliate, Larscom
Incorporated's Second Amended Joint Plan of Reorganization.
Under the Approved Amended Plan, a liquidating trust will be
created and all remaining assets of the Debtors will be
transferred into it. The proposed initial liquidating trustee is
Darryl Laddin of Arnall Golden Gregory LLP.
Treatment of Claims
Holders of Class 2 Priority Tax Claims will receive either payment
in full on the effective date of the plan or regular cash
installments over a period determined by the liquidating
Trustee. The amount of priority tax claims in the Debtors'
schedules total $27,564.
Class 3 Employee Priority Claims are entitled to payment in full
plus interest at 6% from the effective date of the Plan to the
date paid.
The secured claims of the noteholders were satisfied and released
in connection with the sale of substantially all of the Debtors'
assets.
The claims of secured creditors, other than the noteholders, RBC
Centura Bank, Agilent Financial Services, Oce Financial Services
Inc., and MetLife, will receive either a single cash payment in an
amount equal to the holder's allowed claim, a return of the assets
securing the claim, or deferred cash payments having a present
value as of the effective date of the plan equal to the value of
the collateral securing the claim.
The noteholders' secured claims have been fully satisfied and
released. The Debtors consented to relief from the stay for RBC
Centura Bank to apply a certificate securing a letter of credit
which had been issued to MetLife. Consequently, RBC Centura
Bank's secured claim has been satisfied. MetLife has drawn on the
letter of credit securing its claim, so any remaining claim of
MetLife is unsecured. Finally, the claims of Agilent Financial
Services and Oce Financial Services Inc. are based on equipment
leases. The equipment leases have been rejected.
Holders of Class 6 Claims Administrative Convenience Class will
receive 10% of their allowed claims from the available
distributable cash after payment or reserve for payment of all
claims in previous classes.
General Unsecured Creditors will receive a pro rata share of
available distributable cash after payment or reserve for payment
of all allowed claims in previous classes. Additionally,
creditors in Class 7 will receive a pro rata distribution of the
liquidating trustee's stock that is not liquidated and each holder
of an allowed class 7 general unsecured claim who is not also a
holder of an allowed class 8 interest on the record date will
receive 100 shares of unsecured creditors' stock.
All outstanding shares in the Debtors will be reversed such that
the total amount outstanding to existing shareholders will
be no more than 10,000 common shares in Verilink.
About Verilink Corporation
Headquartered in Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- was in the business of providing
broadband access solutions. The company developed, manufactured,
and marketed products that enable carriers and enterprises to
build converged access networks to deliver communications services
to their end customers. The company and its debtor-affiliate,
Larscom Inc., filed for chapter 11 protection on April 9, 2006
(Bankr. N.D. Ala. Case No. 06-80566 & 06-80567). Robert McCay
Dearing Mercer, Esq., at Powell Goldstein LLP, represents the
Debtors. Darryl S. Laddin, Esq., at Arnall Golden Gregory LLP and
Jayna Partain Lamar, Esq., at Maynard, Cooper & Gale, P.C., give
legal advice to the Official Committee of Unsecured Creditors.
When the Debtors filed for protection from their creditors, they
listed total assets of $37,221,000 and total debts of $23,913,000.
VERILINK CORP: Court Sets January 29 Plan Confirmation Hearing
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
will convene a hearing at 10:00 a.m. on Jan. 29, 2007, to consider
confirmation of the Second Amended Disclosure Statement describing
Verilink Corporation and its debtor-affiliate, Larscom Inc.'s
Second Amended Joint Plan of Reorganization.
Filing period for any objections to the confirmation of the plan
expired on Jan. 16, 2007.
Headquartered in Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- was in the business of providing
broadband access solutions. The company developed, manufactured,
and marketed products that enable carriers and enterprises to
build converged access networks to deliver communications services
to their end customers. The company and its debtor-affiliate,
Larscom Inc., filed for chapter 11 protection on April 9, 2006
(Bankr. N.D. Ala. Case No. 06-80566 & 06-80567). Robert McCay
Dearing Mercer, Esq., at Powell Goldstein LLP, represents the
Debtors. Darryl S. Laddin, Esq., at Arnall Golden Gregory LLP and
Jayna Partain Lamar, Esq., at Maynard, Cooper & Gale, P.C., give
legal advice to the Official Committee of Unsecured Creditors.
When the Debtors filed for protection from their creditors, they
listed total assets of $37,221,000 and total debts of $23,913,000.
WELLS FARGO: S&P Takes Action on Various Certificates
-----------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 45
classes of mortgage pass-through certificates from 10 Wells Fargo
Mortgage Backed Securities Trust transactions.
Concurrently, four classes were placed on CreditWatch with
negative implications. At the same time, ratings were affirmed on
numerous other classes issued by Wells Fargo Mortgage Backed
Securities Trust, Wells Fargo Alternative Loan Trust, and Wells
Fargo Home Equity Asset-Backed Securities Trust.
The raised ratings reflect a significant increase in credit
support percentages to the subordinate classes due to the rapid
paydown of principal, the shifting interest structure of the
transactions, and minimal losses. The majority of the series with
raised ratings have paid down to less than 30% of their original
pool balances. Cumulative realized losses are very low for all of
the upgraded series. Series 2003-3 has experienced losses
totaling 3 basis points of its original pool balance, the most
losses reported by any of the upgraded deals. Total delinquencies
ranged from 0.00% to 3.19% of the current pool balances.
The CreditWatch placements affecting the ratings on the class B-5
certificates from series 2003-10, 2004-7, 2004-8, and 2004-G
reflect large balances of mortgage loans in foreclosure(Fcl) that
outweigh remaining credit support.
-- For series 2003-10, approximately $824,000 of the loans are
in Fcl properties, compared with $252,074 of remaining
credit support;
-- For series 2004-7, $867,000 of the loans are in Fcl
properties, compared with $164,405 of remaining credit
support;
-- For series 2004-8, $365,000 of the loans are in Fcl
properties, compared with $166,731 of remaining credit
support; and,
-- For series 2004-G, $821,000 of the loans are in Fcl
properties, compared with $400,948 of remaining credit
support.
Standard & Poor's will continue to closely monitor the performance
of these transactions. Standard & Poor's will downgrade the
classes with ratings on CreditWatch if the delinquent mortgage
loans cause realized losses. However, if the
delinquent mortgage loans become current or do not result in large
realized losses, Standard & Poor's will affirm the ratings and
remove them from CreditWatch.
Credit support for these transactions is provided by
subordination. The affirmations reflect stable credit support
percentages and no losses.
The collateral backing the certificates consists of prime, first-
lien mortgage loans secured by one- to four-family residential
properties.
Ratings Raised
Wells Fargo Mortgage Backed Securities Trust
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2003-1 I-B-2 AA+ AA
2003-1 I-B-3 A+ A
2003-1 I-B-4 BBB+ BBB
2003-1 I-B-5 BB+ BB
2003-1 II-B-2 AA+ AA
2003-1 II-B-3 AA- A+
2003-1 II-B-4 A- BBB+
2003-2 B-2 AA+ AA
2003-2 B-3 A+ A
2003-2 B-4 BBB+ BBB
2003-2 B-5 BB+ BB
2003-3 I-B-1 AAA AA+
2003-3 I-B-2 AA AA-
2003-3 II-B-2 AA AA-
2003-3 I-B-3 A- BBB+
2003-3 II-B-3 A- BBB+
2003-3 I-B-4 BB+ BB
2003-3 II-B-4 BBB- BB+
2003-3 II-B-5 BB- B+
2003-6 B-1 AA+ AA
2003-6 B-2 A+ A
2003-6 B-3 BBB+ BBB
2003-6 B-4 BB+ BB
2003-A B-2 AA+ AA
2003-A B-3 A+ A
2003-A B-4 BBB+ BBB
2003-A B-5 BB- B+
2003-D B-1 AAA AA+
2003-D B-2 AA AA-
2003-D B-3 A A-
2003-D B-4 BBB- BB+
2003-D B-5 B+ B
2003-E B-1 AA+ AA
2003-E B-2 A+ A
2004-I B-1 AA+ AA
2004-I B-2 A+ A
2004-I B-3 BBB+ BBB
2004-I B-4 BB+ BB
2004-T B-2 A+ A
2004-T B-3 BBB+ BBB
2004-T B-4 BB+ BB
2004-U B-1 AA+ AA
2004-U B-2 A+ A
2004-U B-3 BBB+ BBB
Ratings Placed On Creditwatch Negative
Wells Fargo Mortgage Backed Securities Trust
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- -----
2003-10 B-5 B/Watch Neg B
2004-7 B-5 B/Watch Neg B
2004-8 B-5 B/Watch Neg B
2004-G B-5 B/Watch Neg B
Ratings Affirmed
Wells Fargo Alternative Loan Trust
Mortgage Pass-Through Certificates
Series Class Rating
------ ----- ------
2002-1 I-A-1,I-A-R,II-A-1,A-PO AAA
2005-2 A-1,A-2,A-3,A-4,A-5,R-1,R-2 AAA
2005-2 M-1 AA+
2005-2 M-2 AA
2005-2 M-3 AA-
2005-2 M-4 A
2005-2 M-5 A-
2005-2 B-1 BBB
2005-2 B-2 BBB-
2005-2 B-3 BB+
Wells Fargo Home Equity Asset-Backed Securities Trust
Mortgage Pass-Through Certificates
Series Class Rating
------ ----- ------
2005-1 AI-1A,AI-1B,AII-1 AAA
2005-1 M-1,M-2 AA+
2005-1 M-3,M-4 AA
2005-1 M-5 AA-
2005-1 M-6 A+
2005-1 M-7 A
2005-1 M-8 A-
2005-1 M-9 BBB+
2005-1 M-10 BBB
2005-1 M-11 BBB-
2005-1 M-12 BB+
2005-1 M-13,M-14 BB
2005-2 AI-1A,AI-1B,AII-1,AII-2,AII-3 AAA
2005-2 M-1,M-2 AA+
2005-2 M-3,M-4 AA
2005-2 M-5 AA-
2005-2 M-6 A+
2005-2 M-7 A
2005-2 M-8 A-
2005-2 M-9 BBB+
2005-2 M-10 BBB
2005-2 M-11 BBB-
2005-2 M-12 BB+
2005-2 M-13 BB
2005-3 AI-1A,AI-1B,AII-1,AII-2,AII-3,RII-1 AAA
2005-3 RII-2,RII-3,M-1 AAA
2005-3 M-2,M-3 AA+
2005-3 M-4,M-5 AA
2005-3 M-6 AA-
2005-3 M-7 A+
2005-3 M-8,M-9 A
2005-3 M-10 A-
2005-3 M-11 BBB+
2005-4 AI-1,AI-2,AI-3,AII-1,AII-2,AII-3 AAA
2005-4 M-1 AA+
2005-4 M-2 AA
2005-4 M-3 AA-
2005-4 M-4 A+
2005-4 M-5 A
2005-4 M-6 A-
2005-4 M-7 BBB+
2005-4 M-8 BBB
2005-4 M-9 BBB-
2005-4 B-1 BB+
2006-1 A-1,A-2,A-3,A-4,R,R-C,R-X AAA
2006-1 M-1,M-2 AA+
2006-1 M-3,M-4 AA
2006-1 M-5 AA-
2006-1 M-6 A+
2006-1 M-7 A
2006-1 M-8 A-
2006-1 M-9 BBB+
2006-1 M-10 BBB
2006-1 M-11 BB+
Wells Fargo Mortgage Backed Securities Trust
Mortgage pass-through certificates
Series Class Rating
------ ----- ------
2002-1 A-2,A-PO,B-1,B-2 AAA
2002-1 B-3 AA+
2002-18 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-8 AAA
2002-18 I-A-16,I-A-17 AAA
2002-18 II-A-4,II-A-5,II-A-18,II-A-WIO,A-PO AAA
2002-18 B-1,B-2 AAA
2002-18 B-3 AA+
2002-20 A-3,A-4,A-5,A-PO,B-1,B-2 AAA
2002-20 B-3 AA+
2002-22 I-A-9,I-A-12,II-A-4,II-A-10,II-A-PO AAA
2002-22 I-A-WIO,II-A-WIO,B-1,B-2,B-3 AAA
2003-1 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2003-1 I-A-8,I-A-9,I-A-10 AAA
2003-1 II-A-6,II-A-7,II-A-8,II-A-9,A-PO,I-B-1 AAA
2003-1 II-B-1 AAA
2003-1 II-B-5 B
2003-2 A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9,A-10 AAA
2003-2 A-11,A-PO,B-1 AAA
2003-3 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2003-3 I-A-8,I-A-9,I-A-10,I-A-11,I-A-12,I-A-13 AAA
2003-3 I-A-14,I-A-15,I-A-16,I-A-17,I-A-18,I-A-19 AAA
2003-3 I-A-20,I-A-21,I-A-22,I-A-23,I-A-24 AAA
2003-3 II-A-1,A-PO AAA
2003-3 II-B-1 AA+
2003-3 I-B-5 B
2003-6 I-A-1,I-A-PO,II-A-1,II-A-2,II-A-3,II-A-PO AAA
2003-6 B-5 B
2003-7 A-1,A-2,A-3,A-4,A-PO AAA
2003-7 B-1 AA
2003-7 B-2 A
2003-7 B-3 BBB
2003-7 B-4 BB
2003-7 B-5 B
2003-8 A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-9,A-PO AAA
2003-8 B-1 AA
2003-8 B-2 A
2003-8 B-3 BBB
2003-8 B-4 BB
2003-8 B-5 B
2003-9 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2003-9 I-A-8,I-A-9,I-A-10,I-A-11,I-A-12,I-A-13 AAA
2003-9 I-A-14,I-A-15,I-A-16,A-PO,II-A-1 AAA
2003-10 A-1,A-2,A-3,A-4,A-PO AAA
2003-10 B-1 AA
2003-10 B-2 A
2003-10 B-3 BBB
2003-10 B-4 BB
2003-11 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-8 AAA
2003-11 I-A-9,I-A-10,I-A-11,I-A-12,I-A-13,I-A-PO AAA
2003-11 II-A-1,II-A-PO AAA
2003-11 B-1 AA
2003-11 B-2 A
2003-11 B-3 BBB
2003-11 B-4 BB
2003-11 B-5 B
2003-12 A-1,A-2,A-3,A-PO AAA
2003-12 B-1 AA
2003-12 B-2 A
2003-12 B-3 BBB
2003-12 B-4 BB
2003-12 B-5 B
2003-13 A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-PO AAA
2003-13 B-1 AA
2003-13 B-2 A
2003-13 B-3 BBB
2003-13 B-4 BB
2003-13 B-5 B
2003-14 I-A-1,I-A-2,I-A-3,I-A-4,II-A-1,II-A-2,A-PO AAA
2003-14 B-1 AA
2003-14 B-2 A
2003-14 B-3 BBB
2003-14 B-4 BB
2003-14 B-5 B
2003-15 I-A-1,I-A-2,I-A-3,II-A-1,A-PO AAA
2003-15 B-1 AA
2003-15 B-2 A
2003-15 B-3 BBB
2003-15 B-4 BB
2003-15 B-5 B
2003-16 I-A-1,II-A-1,II-A-2,II-A-3,II-A-4,II-A-IO AAA
2003-16 III-A-1,III-A-2,A-PO AAA
2003-16 B-1 AA
2003-16 B-2 A
2003-16 B-3 BBB
2003-16 B-4 BB
2003-16 B-5 B
2003-17 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2003-17 I-A-8,I-A-9,I-A-10,I-A-11,I-A-12,I-A-13 AAA
2003-17 I-A-14,I-A-IO,II-A-1,II-A-2,II-A-3,II-A-4 AAA
2003-17 II-A-5,II-A-6,II-A-7,II-A-8,II-A-9,II-A-10 AAA
2003-17 II-A-11,A-PO AAA
2003-17 B-1 AA
2003-17 B-2 A
2003-17 B-3 BBB
2003-17 B-4 BB
2003-17 B-5 B
2003-18 A-1,A-2,A-3,A-4,A-5,A-PO,A-R AAA
2003-18 B-1 AA
2003-18 B-2 A
2003-18 B-3 BBB
2003-18 B-4 BB
2003-18 B-5 B
2003-19 A-1,A-2,A-3,A-4,A-PO AAA
2003-19 B-1 AA
2003-19 B-2 A
2003-19 B-3 BBB
2003-19 B-4 BB
2003-19 B-5 B
2003-A A-5,A-6,A-7,B-1 AAA
2003-C A-4,A-5,A-6,A-7,A-8,A-9,B-1 AAA
2003-C B-2 AA
2003-C B-3 A+
2003-C B-4 BBB
2003-C B-5 BB
2003-D A-1 AAA
2003-E A-1,A-2,A-3,A-4,A-WIO AAA
2003-E B-3 BBB
2003-E B-4 BB
2003-E B-5 B
2003-F A-1 AAA
2003-F B-1 AA+
2003-F B-2 A
2003-F B-3 BBB+
2003-F B-4 BB
2003-F B-5 B
2003-G A-1,A-IO AAA
2003-G B-1 AA
2003-G B-2 A
2003-G B-3 BBB
2003-G B-4 BB
2003-G B-5 B
2003-H A-1 AAA
2003-H B-1 AA
2003-H B-2 A
2003-H B-3 BBB
2003-H B-4 BB
2003-H B-5 B
2003-J I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2003-J I-A-8,I-A-9,I-A-10,I-A-11,I-A-12 AAA
2003-J II-A-1,II-A-2,II-A-3,II-A-4,II-A-5,II-A-6 AAA
2003-J II-A-7,III-A-1,III-A-2,III-A-3 AAA
2003-J IV-A-1,IV-A-2,IV-A-3,V-A-1 AAA
2003-J B-1 AA
2003-J B-2 A
2003-J B-3 BBB
2003-J B-4 BB
2003-J B-5 B
2003-K I-A-1,I-A-2,I-A-3,I-A-4,I-A-5 AAA
2003-K II-A-1,II-A-2,II-A-3,II-A-4,II-A-5,II-A-6 AAA
2003-K II-A-7,III-A-1,III-A-2,III-A-3,III-A-4 AAA
2003-K IV-A-1 AAA
2003-K B-1 AA
2003-K B-2 A
2003-K B-3 BBB
2003-K B-4 BB
2003-K B-5 B
2003-L I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,II-A-1 AAA
2003-L B-1 AA
2003-L B-2 A
2003-L B-3 BBB
2003-L B-4 BB
2003-L B-5 B
2003-M A-1,A-2,A-3 AAA
2003-M B-1 AA
2003-M B-2 A
2003-M B-3 BBB
2003-M B-4 BB
2003-M B-5 B
2003-N I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6 AAA
2003-N I-A-R,I-A-LR,II-A-1,II-A-2,II-A-3,II-A-4 AAA
2003-N III-A-1,III-A-2,III-A-3,III-A-4 AAA
2003-N B-1 AA
2003-N B-2 A
2003-N B-3 BBB
2003-N B-4 BB
2003-N B-5 B
2003-O I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6 AAA
2003-O I-A-7,I-A-8,I-A-9,I-A-10,I-A-11 AAA
2003-O II-A-1,II-A-2,II-A-3,III-A-1,III-A-2 AAA
2003-O III-A-3,IV-A-1,IV-A-2,V-A-1 AAA
2003-O B-1 AA
2003-O B-2 A
2003-O B-3 BBB
2003-O B-4 BB
2003-O B-5 B
2004-1 A-1,A-2,*A-3,A-4,A-5,A-6,A-7,A-8,A-9 AAA
2004-1 A-10,A-11,A-12,A-13,A-14,A-15,A-16,A-17 AAA
2004-1 A-18,A-19,A-20,A-21,A-22,A-23,A-24,A-25 AAA
2004-1 A-26,A-27,A-28,A-29,A-30,A-31,A-32,A-33 AAA
2004-1 A-34,A-35,A-36,A-37,A-39,A-PO,A-WIO AAA
2004-1 B-1 AA
2004-1 B-2 A
2004-1 B-3 BBB
2004-1 B-4 BB
2004-1 B-5 B
2004-2 A-1,A-PO AAA
2004-2 B-1 AA
2004-2 B-2 A
2004-2 B-3 BBB
2004-2 B-4 BB
2004-2 B-5 B
2004-3 A-1,A-PO AAA
2004-3 B-1 AA
2004-3 B-2 A
2004-3 B-3 BBB
2004-3 B-4 BB
2004-3 B-5 B
2004-5 I-A-1,I-A-PO,II-A-1,II-A-R,II-A-LR,II-A-PO AAA
2004-5 B-1 AA
2004-5 B-2 A
2004-5 B-3 BBB
2004-5 B-4 BB
2004-5 B-5 B
2004-6 A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9,A-10 AAA
2004-6 A-11,A-12,A-13,A-14,A-15,A-16,A-PO,A-R AAA
2004-6 B-1 AA
2004-6 B-2 A
2004-6 B-3 BBB
2004-6 B-4 BB
2004-6 B-5 B
2004-7 I-A-1,I-A-IO,I-A-R,I-A-LR,II-A-1,II-A-2,A-PO AAA
2004-7 B-1 AA
2004-7 B-2 A
2004-7 B-3 BBB
2004-7 B-4 BB
2004-8 A-1,A-2,A-3,A-4,A-5,A-6,A-R,A-PO AAA
2004-8 B-1 AA
2004-8 B-2 A
2004-8 B-3 BBB
2004-8 B-4 BB
2004-A A-1 AAA
2004-A B-1 AA
2004-A B-2 A
2004-A B-3 BBB
2004-A B-4 BB
2004-A B-5 B
2004-B A-1 AAA
2004-B B-1 AA
2004-B B-2 A
2004-B B-3 BBB
2004-B B-4 BB
2004-B B-5 B
2004-C A-1 AAA
2004-C B-1 AA
2004-C B-2 A
2004-C B-3 BBB
2004-C B-4 BB
2004-C B-5 B
2004-CC A-1,A-R AAA
2004-CC B-1 AA
2004-CC B-2 A
2004-CC B-3 BBB
2004-CC B-4 BB
2004-CC B-5 B
2004-D A-1,A-2,A-IO AAA
2004-D B-1 AA
2004-D B-2 A
2004-D B-3 BBB
2004-D B-4 BB
2004-D B-5 B
2004-E A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9 AAA
2004-E A-10,A-11 AAA
2004-E B-1 AA
2004-E B-2 A
2004-E B-3 BBB
2004-E B-4 BB
2004-E B-5 B
2004-EE I-A-1,II-A-1,II-A-2,II-A-3,II-A-R,II-A-LR AAA
2004-EE III-A-1,III-A-2,III-A-3 AAA
2004-EE B-1 AA
2004-EE B-2 A
2004-EE B-3 BBB
2004-EE B-4 BB
2004-EE B-5 B
2004-F A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9 AAA
2004-F A-10,A-11 AAA
2004-F B-1 AA
2004-F B-2 A
2004-F B-3 BBB
2004-F B-4 BB
2004-F B-5 B
2004-G A-1,A-2,A-3,A-4 AAA
2004-G B-1 AA
2004-G B-2 A
2004-G B-3 BBB
2004-G B-4 BB
2004-H A-1,A-2 AAA
2004-H B-1 AA
2004-H B-2 A
2004-H B-3 BBB
2004-H B-4 BB
2004-H B-5 B
2004-I I-A-1,I-A-2,II-A-1,II-A-R,II-A-LR AAA
2004-I B-5 B
2004-J A-1,A-R AAA
2004-J B-1 AA
2004-J B-2 A
2004-J B-3 BBB
2004-J B-4 BB
2004-J B-5 B
2004-K I-A-1,I-A-2,I-A-3,I-A-R,I-A-LR,II-A-1 AAA
2004-K II-A-2,II-A-3,II-A-4,II-A-5,II-A-6,II-A-7 AAA
2004-K II-A-8,II-9,II-A-10,II-A-11,II-A-12 AAA
2004-K B-1 AA
2004-K B-2 A
2004-K B-3 BBB
2004-K B-4 BB
2004-K B-5 B
2004-L A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9,A-R AAA
2004-L B-1 AA
2004-L B-2 A
2004-L B-3 BBB
2004-L B-4 BB
2004-L B-5 B
2004-M A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-R,A-LR AAA
2004-M B-1 AA
2004-M B-2 A
2004-M B-3 BBB
2004-M B-4 BB
2004-M B-5 B
2004-N A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9,A-10 AAA
2004-N A-R,A-LR AAA
2004-N B-1 AA
2004-N B-2 A
2004-N B-3 BBB
2004-N B-4 BB
2004-N B-5 B
2004-O A-1,A-R AAA
2004-O B-1 AA
2004-O B-2 A
2004-O B-3 BBB
2004-O B-4 BB
2004-O B-5 B
2004-P I-A-1,II-A-1,II-A-R,II-A-LR AAA
2004-P B-1 AA
2004-P B-2 A
2004-P B-3 BBB
2004-P B-4 BB
2004-P B-5 B
2004-Q I-A-1,I-A-2,I-A-3,I-A-R,I-A-LR,II-A-1 AAA
2004-Q II-A-2 AAA
2004-Q B-1 AA
2004-Q B-2 A
2004-Q B-3 BBB
2004-Q B-4 BB
2004-Q B-5 B
2004-R I-A-1,I-A-2,II-A-1,II-A-R,II-A-LR AAA
2004-R B-1 AA
2004-R B-2 A
2004-R B-3 BBB
2004-R B-4 BB
2004-R B-5 B
2004-S A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-R AAA
2004-S B-1 AA
2004-S B-2 A
2004-S B-3 BBB
2004-S B-4 BB
2004-S B-5 B
2004-T A-1,A-R AAA
2004-T B-1 AA
2004-T B-5 B
2004-U A-1,A-R AAA
2004-U B-4 BB
2004-U B-5 B
2004-V I-A-1,I-A-2,I-A-3,I-A-R,I-A-LR,II-A-1 AAA
2004-V B-1 AA
2004-V B-2 A
2004-v B-3 BBB
2004-V B-4 BB
2004-V B-5 B
2004-X I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-R, AAA
2004-X I-A-LR,II-A-1,II-A-2 AAA
2004-X B-1 AA
2004-X B-2 A
2004-X B-3 BBB
2004-X B-4 BB
2004-X B-5 B
2004-Y I-A-1,I-A-2,I-A-3,II-A-1,II-A-R,III-A-1 AAA
2004-Y III-A-2,III-A-3,III-A-4,III-A-5 AAA
2004-Y B-1 AA
2004-Y B-2 A
2004-Y B-3 BBB
2004-Y B-4 BB
2004-Y B-5 B
2004-Z I-A-1,1-A-2,II-A-1,II-A-2,II-A-IO,II-A-R AAA
2004-Z B-1 AA
2004-Z B-2 A
2004-Z B-3 BBB
2005-1 I-A-1,I-A-R,I-A-LR,II-A-1,III-A-1,A-WIO AAA
2005-1 A-PO AAA
2005-1 B-1 AA
2005-1 B-2 A
2005-1 B-3 BBB
2005-1 B-4 BB
2005-1 B-5 B
2005-9 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2005-9 I-A-8,I-A-9,I-A-10,I-A-11,I-A-12,I-A-13 AAA
2005-9 I-A-14,I-A-15,I-A-16,I-A-PO,I-A-R,II-A-1 AAA
2005-9 II-A-2,II-A-3,II-A-4,II-A-5,II-A-6,II-A-7 AAA
2005-9 II-A-8,II-A-9,II-A-10,II-A-11,II-A-12 AAA
2005-9 II-A-PO AAA
2005-9 B-1 AA
2005-9 B-2 A
2005-9 B-3 BBB
2005-9 B-4 BB
2005-9 B-5 B
2005-12 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-8 AAA
2005-12 I-A-9,I-A-10,II-A-1,II-A-2,II-A-R,A-PO AAA
2005-13 A-1,A-R,A-PO AAA
2005-14 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2005-14 I-A-8,I-A-9,I-A-10,I-A-11,I-A-PO,I-A-R AAA
2005-14 II-A-1,II-A-2,II-A-PO AAA
2005-14 II-B-5 B
2005-AR1 I-A-1,I-A-2,I-A-IO,II-A-1,II-A-IO AAA
2005-AR1 I-B-1,II-B-1 AA
2005-AR1 I-B-2,II-B-2 A
2005-AR1 I-B-3,II-B-3 BBB
2005-AR1 I-B-4,II-B-4 BB
2005-AR1 I-B-5,II-B-5 B
2005-AR3 I-A-1,1-A-2,II-A-1,II-A-R,II-A-LR AAA
2005-AR3 B-1 AA
2005-AR3 B-2 A
2005-AR3 B-3 BBB
2005-AR3 B-4 BB
2005-AR3 B-5 B
2005-AR7 I-A-1,I-A-2,I-A-R,I-A-LR,II-A-1,II-A-2 AAA
2005-AR7 B-1 AA
2005-AR7 B-2 A
2005-AR7 B-3 BBB
2005-AR7 B-4 BB
2005-AR7 B-5 B
2005-AR8 I-A-1,I-A-2,II-A-1,II-A-R,II-A-LR,III-A-1 AAA
2005-AR8 III-A-2,III-A-3 AAA
2005-AR8 B-1 AA
2005-AR8 B-2 A
2005-AR8 B-3 BBB
2005-AR8 B-4 BB
2005-AR8 B-5 B
2005-AR9 I-A-1,I-A-2,II-A-1,II-A-2,III-A-1,III-A-2 AAA
2005-AR9 IV-A-1,IV-A-2 AAA
2005-AR9 B-1 AA
2005-AR9 B-2 A
2005-AR9 B-3 BBB
2005-AR9 B-4 BB
2005-AR9 B-5 B
2005-AR10 I-A-1,I-A-2,II-A-1,II-A-2,II-A-3,II-A-4 AAA
2005-AR10 II-A-5,II-A-6,II-A-7,II-A-8,II-A-10,II-A-11 AAA
2005-AR10 II-A-12,II-A-13,II-A-14,II-A-15,II-A-16 AAA
2005-AR10 II-A-17,II-A-18,II-A-19,II-A-20 AAA
2005-AR10 B-1 AA
2005-AR10 B-2 A
2005-AR10 B-3 BBB
2005-AR10 B-4 BB
2005-AR10 B-5 B
2005-AR11 I-A-1,II-A AAA
2005-AR11 I-B-1,II-B-1 AA
2005-AR11 I-B-2,II-B-2 A
2005-AR11 I-B-3,II-B-3 BBB
2005-AR11 I-B-4,II-B-4 BB
2005-AR11 I-B-5,II-B-5 B
2005-AR12 I-A-1,I-A-2,I-A-R,II-A-1,II-A-3,II-A-4 AAA
2005-AR12 II-A-5,II-A-6,II-A-7,II-A-8,II-A-9,II-A-10 AAA
2005-AR12 II-A-11 AAA
2005-AR12 B-1 AA
2005-AR12 B-2 A
2005-AR12 B-3 BBB
2005-AR12 B-4 BB
2005-AR12 B-5 B
2005-AR13 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2005-AR13 I-A-R,II-A-1,II-A-2,III-A-1,IV-A-1,A-1,A-2 AAA
2005-AR13 A-3 AAA
2005-AR13 B-1 AA
2005-AR13 B-2 A
2005-AR13 B-3 BBB
2005-AR13 B-4 BB
2005-AR13 B-5 B
2005-AR14 A-1,A-2,A-3,A-4,A-5,A-6,A-R AAA
2005-AR14 B-1 AA
2005-AR14 B-2 A
2005-AR14 B-3 BBB
2005-AR14 B-4 BB
2005-AR14 B-5 B
2005-AR15 I-A-1,I-A-2,I-A-3,I-A-3,I-A-4,I-A-5,I-A-6 AAA
2005-AR15 I-A-7,I-A-8,I-A-9,I-A-10,I-A-R,II-A-1 AAA
2005-AR15 II-A-2 AAA
2005-AR15 B-5 B
2006-4 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5,I-A-6,I-A-7 AAA
2006-4 I-A-8,I-A-9,I-A-9,I-A-10,I-A-11,I-A-12 AAA
2006-4 I-A-13,I-A-14,I-A-PO,I-A-R AAA
2006-AR1 I-A-1,II-A-1,II-A-2,II-A-3,II-A-4,II-A-5 AAA
2006-AR1 II-A-6,II-A-R AAA
2006-AR1 B-1 AA
2006-AR1 B-2 A
2006-AR1 B-3 BBB
2006-AR1 B-4 BB
2006-AR1 B-5
2006-AR2 I-A-1,I-A-R,II-A-1,II-A-2,II-A-3,II-A-4 AAA
2006-AR2 II-A-5,II-A-6,II-A-IO AAA
2006-AR2 B-10 BB
2006-AR2 B-11 B
2006-AR3 A-1,A-2,A-3,A-4,A-5,A-R AAA
2006-AR4 I-A-1,I-A-2,II-A-1,II-A-2,II-A-3,II-A-4 AAA
2006-AR4 II-A-5,II-A-6,II-A-R AAA
2006-AR8 I-A-1,I-A-2,I-A-3,I-A-4,I-A-R,II-A-1 AAA
2006-AR8 II-A-2,II-A-3,II-A-4,II-A-5,II-A-6,II-A-7 AAA
2006-AR8 III-A-1,III-A-2,III-A-3 AAA
2006-AR8 B-5 B
2006-AR10 1A-1,1A-2,IIA-1,IIA-2,IIIA-1,IIIA-2,IVA-1 AAA
2006-AR10 IVA-2,VA-1,VA2,VA-3,VA-4,VA-5,VA-6,VA-7 AAA
2006-AR10 IA-R AAA
WESTON NURSERIES: Files Joint Plan and Disclosure Statement
-----------------------------------------------------------
Weston Nurseries Inc. and Mezitt Agricultural Corporation filed
with the U.S. Bankruptcy Court for the District of Massachusetts a
Joint Disclosure Statement explaining their Joint Chapter 11 Plan
of Reorganization.
Overview of the Plan
The Debtors Plan will mostly be funded from a portion of the sale
proceeds of the entire issued and outstanding shares of MezAg's
stock, together with Weston, Roger N. Mezitt, R. Wayne Mezitt,
Peter Mezitt, which owns certain real estate, or alternatively, a
sale of the real property owned by Weston, MezAg, the Mezitts and
certain of their relatives to Boulder Capital LLC or its nominee,
Hopkinton Farms LLC.
Boulder, or other counteroffers at the Section 363 Sale, will
acquire between 700 and 800 acres of the Real Property by
purchasing all of the stock in MezAg, together with certain
parcels of the Real Property not owned by MezAg.
The Plan contemplates for the reorganization of Weston as a going
concern, and for the payment of all of its allowed claims through
the use of:
a) a portion of the Weston Sale proceeds;
b) a portion of the funds that the Debtor will borrow on a
secured basis from Business Alliance Capital Company,
Boulder, or other lender or purchaser as the Debtor may
determine;
c) to the extent necessary, the revenues generated by the
operation of the Debtor's business after the Plan
confirmation; and
d) the proceeds of recoveries realized from the prosecution or
settlement of any causes of action if the Court disapproved
the Settlement Agreement.
The Settlement Agreement resolved issues that existed among and
between members of the Mezitt Family and provided for a land
configuration that facilitated the proposed Sale to Boulder.
The Plan also provides that upon the closing of the MezAg stock,
sale, MezAg will cease all operations. In addition, MezAg will
close its chapter 11 case following the plan confirmation, the
resolution of all claims against it, the completion of all
required distributions under the Plan.
Treatment of Claims
Under the Joint Plan, First Pioneer Farm Credit, ACA's allowed
secured claim, holding debts secured by mortgage liens of the
Debtors' real property, will be satisfied in full from the sale
proceeds.
Business Alliance holding allowed secured claim will also be paid
in full.
Weston's allowed claims of its administrative and priority
creditors will receive full payment.
MezAg's allowed claims of its administrative and priority and
general unsecured creditors will receive full payment.
The Debtors relate that the claims of general unsecured creditors
totaling to $1.8 million, other than MezAg and the Mezzitts'
claims, will be paid in full. The Debtors' allowed general
unsecured claims of insiders would be paid according to the terms
of a settlement agreement.
As of Weston's chapter 11 filing, Roger N. Mezitt and his wife,
and R. Wayne Mezitt and his wife, each own 13% of the issued
Weston stock. Pursuant to the Plan, Roger's outstanding shares of
Weston stock will be transferred to Wayne, and the EVM Trust,
which owns the remaining 74% of that stock. Wayne will retain the
same percentage interest of the issued stock.
When MezAg's filed for bankruptcy, Wayne and Roger each own 50% of
MezAg's outstanding stock. As part of the proposed sale to
Boulder, all of MezAg stock, will be sold, or alternatively,
pursuant to the sale, a buyer may purchase certain of the real
property owned by the Debtors and certain of the Mezitt family
members.
A full-text copy of the Debtors' Disclosure Statement is available
for a fee at:
http://webadmin.bankrupt.com/cgi-
bin/researcharchives/radmin?action=doc&op=view&docid=070118213255
About Weston Nurseries
Headquartered in Hopkinton, Massachusetts, Weston Nurseries, Inc.,
-- http://www.westonnurseries.com/-- is central New England's
premier resource in designing, creating, and enjoying outdoor
living areas. Weston Nurseries grows and sells plants, trees,
shrubs, and perennials. The Company filed for chapter 11
protection on Oct. 14, 2005 (Bankr. D. Mass. Case No. 05-49884).
Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, represents
the Debtor in its restructuring efforts. Michael J. Fencer, Esq.,
and Steven C. Reingold, Esq., at Jager Smith, PC, represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it estimated assets and debts
of $10 million to $50 million.
WINSTAR COMMS: Can Reclaim Proceeds of Escrowed Accounts
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Winstar Holdings LLC to obtain proceeds of escrowed amounts
relating to:
(a) a dispute with Nextel Communications, Inc.; and
(b) leases for the premises located at:
* 600 West Broadway, in San Diego, California; and
* 2001 6th Avenue, in Seattle, Washington.
As reported in the Troubled Company Reporter on Jan. 3, 2007,
David Albalah, Esq., at Bracewell & Giuliani LLP, in New York,
informed the Court that Winstar has not received any cure notices
with respect to the Properties or the Nextel Dispute.
The Nextel Dispute involved a disagreement between Nextel and
Winstar on phone usage charges before Winstar established its own
account in 2002, Mr. Albalah related. He added that at that
time, Winstar paid Nextel the undisputed portion of the amounts
owed and created the Nextel Escrow as a good faith gesture to
reach a compromise with the remaining balance.
Mr. Albalah argued that the proceeds of the Nextel Escrow should
be returned to Winstar because:
* since 2002, Winstar has not received communications from
Nextel as to whether Nextel intends to, or has a right to,
assert any claims against the Nextel Escrow; and
* Winstar believes it does not owe Nextel any of the amounts
held in the Nextel Escrow.
About Winstar Communications
Based in New York, New York, Winstar Communications, Inc.,
provides broadband services to business customers. The company
and its debtor-affiliates filed for chapter 11 protection on April
18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through
01-01462). The Debtors obtained the court's approval converting
their case to a chapter 7 liquidation proceeding in January 2002.
Christine C. Shubert serves as the Debtors' chapter 7 trustee.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts. (Winstar
Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
WINSTAR COMMS: Ch. 7 Trustee & Patient Safety Okay to Revise Pact
-----------------------------------------------------------------
Christine C. Shubert, the Chapter 7 Trustee in Winstar
Communications Inc.'s liquidation proceeding, and Patient Safety
Technologies Inc. have agreed to revise their settlement agreement
replacing Patient Safety's prior counsel and attorney escrow
account with Patient Safety's newly retained escrow agent.
The U.S. Bankruptcy Court for the District of Delaware had already
approved the Settlement Agreement between the parties on
Nov. 7, 2006. Through a Court-approved stipulation, Patient
Safety has disengaged the legal services of Richard J. Babnick,
Esq., and Sichenzie Ross Friedman Ference LLP, and has retained
the services of Transfer Online at 317 S.W. Alder Street, in
Portland, Oregon, to serve as Patient Safety's escrow agent and
maintain its escrow account.
The Revised Settlement Agreement specifically provides that of
the remaining $600,000 due after the first $150,000 payment by
September 11, 2006, payments will be made to Ms. Shubert at 25%
of the gross amount of all equity capital raised by Patient
Safety.
To effectuate the payments, Patient Safety will deposit 100% of
its equity raises in Transfer Online's escrow account. It will
also disburse, from the capital raises, 25% of those funds for
Ms. Shubert and 75% as directed by Patient Safety. The payments
will be made to Ms. Shubert within five business days after the
closing of any capital raise and Transfer Online's receipt of the
funds from Patient Safety's capital raises in Transfer Online's
account. Each payment will be credited against the $600,000
balance until it is paid in full.
However, if there are insufficient equity raises, (i) at least
$150,000 of the $600,000 balance owed will be paid to Ms. Shubert
on or before January 1, 2007, and (ii) a second $150,000 of the
remaining $450,000 balance will be paid to Ms. Shubert by
April 1, 2007. If the first and second milestones have not been
achieved by those dates via the equity raises, Patient Safety
will promptly pay Winstar Global an amount equal to the
difference between those amounts previously paid to Winstar
Global and the partial amount to achieve the two milestones.
Any funds held in Transfer Online's escrow account for Winstar
Global's benefit will be included in calculating whether Patient
Safety has satisfied the First and Second Milestones.
All other terms and conditions of the Settlement Agreement will
remain as originally drafted.
About Winstar Communications
Based in New York, New York, Winstar Communications, Inc.,
provides broadband services to business customers. The company
and its debtor-affiliates filed for chapter 11 protection on
April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through
01-01462). The Debtors obtained the court's approval converting
their case to a chapter 7 liquidation proceeding in January 2002.
Christine C. Shubert serves as the Debtors' chapter 7 trustee.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts. (Winstar
Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
WOODWIND & THE BRASSWIND: Panel Wants Milbank Tweed as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of The Woodwind &
The Brasswind dba Dennis Bamber Inc. asks the U.S. Bankruptcy
Court for the Northern District of Indiana, for permission to
employ Milbank Tweed Hadley McCloy LLP, as its counsel.
Milbank Tweed will:
a) advise the Committee with respect to its rights, powers
and duties in this case, and to assist the Committee in
exercising and fulfilling the rights, powers and duties;
b) assist and advise the Committee in its consultations with
the Debtor concerning the administration of this
reorganization proceeding;
c) assist the Committee in analyzing the claims of the
Debtor's creditors and in negotiating with the creditors;
d) assist with the Committee's investigation of the acts,
conduct, assets, liabilities, financial affairs and
condition of the Debtor and of the operation of the
Debtor's business;
e) assist the Committee in analyzing and negotiating any
proposed transaction involving the sale of disposition of
the Debtor's business assets and operations, including in
connection with the expedited sale process already
underway in this case;
f) assist the Committee in its analysis of, and negotiations
concerning the terms, formulation and structure of any
plan of reorganization or liquidation for the Debtor;
g) assist the Committee in connection with any litigation
affecting the Debtor's assets and business operations,
the Debtor's chapter 11 case, the confirmation and
implementation of a Plan, and the outcome of the Debtor's
chapter 11 case;
h) assist and advise the Committee with respect to its
communications with the general creditor body regarding
significant matters in this case;
i) review and analyze all applications, orders, statements
of operations and schedules filed with the Court and
advise the Committee with respect thereto;
j) assist the Committee in evaluating, and pursuing if
necessary, where appropriate and authorized, claims and
causes of action;
k) assist the Committee in preparing pleadings and
applications as may be necessary in furtherance of the
Committee's interests and objectives;
l) represent the Committee at all hearing and other
proceedings; and
m) perform other legal services as may be required and are
deemed to be in the interest of the Committee on
accordance with the Committee's powers and duties as set
forth in the Bankruptcy Code.
The firm's professionals billing rates are:
Designation Hourly Rate
----------- -----------
Junior Associates $225
Senior Partners $850
Legal Assistants $155 - $295
Thomas R. Kreller, Esq., a partner of the firm, assures the Court
that the firm does not hold any interest adverse to the Debtor's
estate or creditors.
Mr. Kreller can be reached at:
Thomas R. Kreller, Esq.
Milbank, Tweed, Hadley & McCloy LLP
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017-5735
Tel: (213) 892-4000
Fax: (213) 629-5063
http://www.milbank.com/en
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 Debtor filed for protection from its creditors, they
estimated assets and debts between $1 million and $100 million.
ZACHARIA RHOADS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Zacharia Lamar Rhoads
fdba Auto Rama
fdba Auto Rama, L.L.C.
3048 North 5100 East
Eden, UT 84310
Bankruptcy Case No.: 07-20169
Chapter 11 Petition Date: January 16, 2007
Court: District of Utah (Salt Lake City)
Judge: Glen E. Clark
Debtor's Counsel: Anna W. Drake, Esq.
Anna W. Drake, P.C.
215 South State Street, Suite 550
Salt Lake City, UT 84111
Tel: (801) 328-9792
Fax: (801) 530-5955
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtor's list of 20 largest unsecured creditors is not
available at press time.
* Donlin Recano Opens Office in Chicago
---------------------------------------
Donlin, Recano & Company Inc., a claims management company, has
branched into Chicago.
The firm's new office can be reached at:
Donlin, Recano & Company Inc.
One Magnificent Mile
Suite 1400
980 North Michigan Avenue
Chicago, IL 60611
Tel: (312)988-4845
Fax: (312)214-3510
Since its inception in 1989, Donlin Recano has assisted over 200
chapter 11 clients in their reorganization efforts.
Donlin Recano has its main office in Suite 1206, No. 419 Park
Avenue South, New York City. For more information, visit
http://www.donlinrecano.com/
* BOOK REVIEW: Partners: Forming Strategic Alliances in
Health Care
-------------------------------------------------------
Authors: Arnold D. Kaluzny, Howard S. Zuckerman, and
Thomas C. Ricketts III
Publisher: Beard Books
Paperback: 204 pages
List Price: $34.95
Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587981513/internetbankrupt
From Henry Berry, Nightingale's Healthcare News, November 2006:
The content of Partners: Forming Strategic Alliances in Health
Care comes from a November 1993 conference in Chapel Hill, North
Carolina, that was held in conjunction with the Clinton
Administration's proposals for sweeping change in the nation's
healthcare system. The conference was attended by 80 of the
nation's top healthcare administrators, academicians, physicians,
and lawyers.
In a foreword to the book, which is a reprint of a 1995
publication, Kenneth F. Thorpe, Deputy Assistant Secretary for
Health Policy at the Department of Health and Human Services at
the time, conveys the Clinton Administration's position that
strategic alliances are of particular value in healthcare.
Not surprisingly, strategic alliances were to play an important
role in the Administration's proposals for healthcare reform. The
Administration's approach did not get far politically and thus did
not bring reform.
Nonetheless, the healthcare field has come to recognize the
pertinence and value of strategic alliances, which have been
embraced in business fields where change in consumer interests,
technology, research, delivery systems, and other areas is
ongoing.
In sections that are well organized, both topically and with
internal references, the fundamentals and benefits of strategic
alliances are explained.
The book also offers instructive experiences in forming and
administering such alliances.
Strategic alliances were not simply an approach touted by the
Clinton Administration as a way of effecting healthcare reform.
Nor were strategic alliances a theory arising from the business
conditions and challenges at the time.
Strategic alliances were, instead, a widespread arrangement to
deal with the business environment of the early 1990s. This
environment continues to this day, with no end in sight.
For the most part, today's healthcare industry is characterized by
new, often problematic, opportunities and challenges in greatly
expanding markets that can be changed overnight by a financial
report or research finding, new legislation and regulation, or the
introduction of new technology.
Howard Zuckerman, one of the editors, expresses it well, saying
that the healthcare industry is a "turbulent environment [where]
companies around the globe and across a multitude of industries
are turning to alliances as a cooperative, inter-organizational
mechanism for adaptation."
Strategic alliances uniquely enable participating organizations to
extend their operational reach and work toward desirable strategic
ends.
Strategic alliances have thus become more than an ad hoc
arrangement to help healthcare organizations get through a tough
stretch or resolve a pressing problem.
Strategic alliances have been incorporated into the healthcare
field as an ever-present operational and strategic consideration.
In the contemporary environment of continual change and
unpredictable developments, many organizations face circumstances
where strategic alliance is necessary to stay timely and
competitive.
As Mr. Zuckerman notes, "Strategic alliances are designed to
achieve strategic purposes not attainable by a single
organization, providing flexibility and responsiveness while
retaining the basic fabric of participating organizations."
The rationale to form strategic alliances is the same for
healthcare organizations as it is for other business entities.
Organizations form strategic alliances because they recognize
their value in engendering flexibility and bringing access to an
ever-broadening array of resources and markets.
As Barry Stein, president of Goodmeasure Inc. notes, these are not
trivial benefits, but are essential considerations of any
corporation that hopes to remain relevant and vibrant.
Healthcare organizations of all sizes and in all markets can enjoy
the benefits offered by strategic alliances. Says Mr. Stein,
"Alliances tend to be particularly important in unfamiliar
markets.
"For larger organizations trying to enter local markets, it is
sound practice to build local alliances because local knowledge
and connections are valuable.
"Smaller organizations in local markets can take advantage of
network ties outside their traditional boundaries to tap broader
or perhaps global sources of materials, capital, or expertise."
While strategic alliances offer enhanced operational capabilities
and higher strategic goals to practically every healthcare
organization, such advantages are not gained automatically.
Apart from whether strategic alliances prove fruitful, the
inevitable management issues can be difficult to resolve. If an
alliance is to be workable and beneficial, certain challenges have
to be met by experienced, capable businesspersons.
Some alliances come apart; and some do not fulfill their purposes.
Even for strategic alliances that work, the management
complexities are enormous.
As one participant in the conference observed, the "rewards...must
be incredible to justify all the extra short-term costs that go
along with them."
Partners: Forming Strategic Alliances in Health Care identifies
the pros and cons of strategic alliances and offers advice and
commentary on how to eliminate or minimize difficulties so
healthcare organizations can partake of the rewards that strategic
alliances singularly make possible.
Arnold D. Kaluzny, Howard S. Zuckerman, and Thomas C. Ricketts III
are all professors in university health policy and administration
departments. Geoffrey B. Walton is a top executive with Strategic
Integration and Practice Operations at Sun Health, an Arizona
company.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
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however, be complete or accurate. The Monday Bond Pricing table
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public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
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Don't be fooled. Assets, for example, reported at historical cost
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related conferences are encouraged. Send announcements to
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cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
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Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
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Monthly Operating Reports are summarized in every Saturday edition
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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, Shimero R. Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Robert Max Victor M. Quiblat II, Rizande B.
Delos Santos, Cherry A. Soriano-Baaclo, Jason A. Nieva, Melvin C.
Tabao, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A.
Chapman, Editors.
Copyright 2007. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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*** End of Transmission ***