/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070306.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 6, 2007, Vol. 11, No. 55 Headlines ADVA-LITE: Case Summary & 30 Largest Unsecured Creditors ADVA-LITE: Organizational Meeting Scheduled on March 13 ADVANCED MARKETING: Wants to Pay Employee Sale-Related Incentives ALASKA AIR: Posts $52.6 Million Net Loss in Year Ended December 31 ALLIANCE ONE: Selling $150 Million of 8.5% Senior Unsecured Notes ALLIED HOLDINGS: Discloses Treatment of Claims Under Chap. 11 Plan ALLIED HOLDINGS: Discloses Financial Projections Under Ch. 11 Plan ANN-LEE CONSTRUCTION: Can Use Cash Collateral on Interim Basis ANN-LEE CONSTRUCTION: U.S. Trustee Picks 3-Member Creditor's Panel ARBOR OF FARMERVILLE: Voluntary Chapter 11 Case Summary ARCTIC GLACIER: DBRS Confirms BB Rating on Senior Secured Notes ASARCO LLC: ASARCO Master Wants to Enter into Earth Tech Contract ATLANTIC & WESTERN: PXRE Default Prompts Fitch's Negative Watch ASSOCIATED VISUAL: Case Summary & 28 Largest Unsecured Creditors AVNET INC: Moody's Rates $250 Million Senior Notes at Ba1 BANC OF AMERICA: Fitch Rates $1.7 Mil. Class B-5 Certificates at B BANC OF AMERICA: Fitch Rates $11.7 Million Class P Certs. at B- BANC OF AMERICA: Fitch Puts Low-B Ratings on Four Cert. Classes BEARINGPOINT INC: Reports Inability to File 2006 Form 10-K BEARINGPOINT INC: Secures Limited Waiver from Lenders BEARINGPOINT INC: Discloses Preliminary 2006 Financial Results BELDEN CDT: Earns $65.9 Million in Year Ended 2006 BELDEN CDT: Moody's Holds Rating and Revises Outlook to Positive BELDEN CDT: S&P Lifts Corporate Credit Rating to BB+ from BB- BRANKLE BROKERAGE: Case Summary and 7 Largest Unsecured Creditors BUCKEYE TECH: Plans to Redeem $5 Million of 9-1/4% Senior Notes CALPINE CORP: Gets Court Nod to Contribute $23 Mil. to Greenfield CALPINE CORP: Equity Panel Wants Perella as Financial Advisor CAPRIUS INC: Completes $2.5 Million Preferred Stock Placement CHASE MORTGAGE: Fitch Rates $1.6MM Class II-B4 Certificates at B CITIMORTGAGE: Fitch Rates $2.4 Mil. Class B-5 Certificates at B CITIZENS COMMS: Pa. Commission Okays Commonwealth Telephone Buy COLTS 2007-1: Fitch Rates $22 Million Class E Interest Notes at BB CONSTELLATION BRANDS: Fitch Shaves Issuer Default Rating to BB- CONSUMERS ENERGY: Earns $184 Million in Year Ended December 31 CORRECTIONS CORP: S&P Lifts Corporate Credit Rating to BB from BB- CWALT INC: Fitch Rates $1.29 Million Class B-4 Certificates at B CWALT INC: Fitch Rates $6.31 Million Class B-4 Certificates at B CWALT INC: Fitch Rates $1.75 Million Class B-4 certificates at B CWMBS INC: Fitch Rates $1.1 Million Class B-4 Certificates at B DAIMLERCHRYSLER AG: Blackstone is Lead Contender for U.S. Unit DAKOTA ARMS: Court Approves Sale of Business to Technology Funding DEAN FOODS: Discloses $15 Per Share Special Dividend Plan DEAN FOODS: Special Dividend Plan Cues S&P to Lower Ratings DELHAIZE AMERICA: Good Performance Cues S&P's Positive Outlook DIAMOND ENT: Dec. 31 Balance Sheet Upside-Down by $7.2 Million DOBSON COMMUNICATIONS: Earns $12.7 Million in Year Ended Dec. 31 EMI GROUP: Junks Warner's $4.1 Billion Takeover Bid ENRON CORP: Court Okays $13.5 Million Kirkland & UC Settlement ERIC NADEL: Case Summary and Largest Unsecured Creditor EXCEPTIONAL TECH: Starts Distribution Under Liquidation Plan FEDERAL-MOGUL: Ernst & Young Raises Going Concern Doubt FORD MOTOR: Signs Deal Selling APCO to Trident IV GAP INC: Earns $219 Million for Period Ended February 3 GARDNER ZINE: Case Summary & 20 Largest Unsecured Creditors GREEN SPRINGS: Fitch Holds Junk Rating on $14.6 Mil. Revenue Bonds HILTON HOTELS: Scandic Hotel Sale Prompts S&P to Lift Ratings HM RIVERGROUP: S&P Places B- Corporate Credit Rating on Neg. Watch INDYMAC MBS: Fitch Rates $1.6 Million Class B-5 Certificates at B ITRON INC: Completes Private Placement of 4,086,958 Shares ITRON INC: Earns $33.8 Million in Year Ended December 31 JP MORGAN: Fitch Rates $1.5 Million Class C-B-5 Certificates at B JONG SUNG PARK: Case Summary & 32 Largest Unsecured Creditors KEVIN HAMMERSMITH: Case Summary & 20 Largest Unsecured Creditors KIRSHAN SUDAN: Chapter 15 Petition Summary KYPHON INC.: Reports $39.7 Million Net Income in Yr. Ended Dec. 31 LA WEST: Case Summary & 20 Largest Unsecured Creditors LB-UBS: Fitch Places Low-B Ratings on Three Certificate Classes LCM V: S&P Assigns BB Rating on $16.5 Million Class E Notes LENOX GROUP: Market Decline Prompts Minnesota Facility Closure LEVEL 3: Gets Requisite Consents for 11% Senior Notes due 2008 LEVI STRAUSS: S&P Rates Proposed $325 Million Senior Loan at B MENDOCINO COAST: S&P Slashes Bonds' Rating to B from BBB MERITAGE HOMES: Fitch Rates $150 Million Senior Notes at B+ MERRILL LYNCH: Fitch Lifts Certificates' Rating & Puts Watch NATIONSLINK FUNDING: S&P Holds Class F Certificates' Rating at B NEW CENTURY: Delays Filing of Form 10-K for Year Ended Dec. 31 NEW CENTURY: Delay in SEC Filings Cue S&P to Lower Rating to B NORMA BARLOW: Case Summary & 10 Largest Unsecured Creditors NORTEL NETWORKS: DBRS Says Restatements Won't Affect Low-B Ratings ON SEMICONDUCTOR: Dec. 31 Balance Sheet Upside-Down by $225.4 Mil. PACIFIC LUMBER: Scopac Taps Blackstone as Financial Advisor PACIFIC LUMBER: Scopac Wants to Employ Logan as Claims Agent PENNSYLVANIA PORT AUTHORITY: Fitch Holds BB+ Rating on Bonds PROCARE AUTOMOTIVE: Court Confirms Amended Liquidation Plan RAY'S DEVELOPMENT: Case Summary & 10 Largest Unsecured Creditors REALOGY CORP: Moody's Rates Proposed $4.27 Billion Facility at Ba3 RELIANT ENERGY: S&P Holds B Rating and Revises Outlook to Positive RESIDENTIAL ACCREDIT: Fitch Rates $4MM Class B-2 Certificates at B RESIDENTIAL FUNDING: Fitch Rates $944,300 class B-2 Certs. at B RIVERDEEP INTERACTIVE: Filing Delay Cues S&P's Negative Watch ROGERS COMMS: Fitch Lifts Issuer Default Rating to BBB- from BB SCHOONER TRUST: DBRS Confirms Low-B Ratings on Six Class Certs. SEALY CORPORATION: Earns $74 Million in Year Ended November 26 SGS INTERNATIONAL: Good Performance Cues S&P's Stable Outlook SIGN SERVICES: Case Summary & 11 Largest Unsecured Creditors TENNECO INC: Timothy Donovan Resigns as Executive Vice-President TENNECO INC: Moody's Rates $830 Million Loans at Ba1 TENNECO INC: S&P Rates Proposed $830 Mil. Bank Facilities at BB TOWER RECORDS: Court Sets March 15 Auction Sale of IP Assets TOWER RECORDS: Selects Hilco Merchant as Liquidation Consultant TOWER RECORDS: Northridge Lease Assignment Period Moved to Mar. 30 TXU CORP: S&P Pares Corporate Credit Rating to BB from BBB- WAMU MORTGAGE: Fitch Rates $4.9 Mil. Class 4-B-5 Certificates at B WELLS FARGO: Fitch Assigns Low-B Ratings to 4 Certificate Classes WELLS FARGO: Fitch Rates $2.8 Mil. Class B-5 Certificates at B WESTWAYS FUNDING: Fitch Rates $77 Million Income Notes at BB WILLIAM KENT LUTZ: Case Summary & 18 Largest Unsecured Creditors WM BOLTHOUSE: Poor Performance Cues S&P's Negative CreditWatch * Seneca Financial Relocates Offices to New York City * Large Companies with Insolvent Balance Sheets ********* ADVA-LITE: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------- Lead Debtor: Adva-Lite, Inc. 7340 Bryan Dairy Road Largo, FL 33777 Bankruptcy Case No.: 07-10264 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Toppers, LLC 07-10265 CGI, Inc. 07-10267 It's All Greek To Me, Inc. 07-10269 Corvest Promotional Products, Inc. 07-10270 Corvest Group, Inc. 07-10271 Type of Business: Adva-Lite, It's All Greek, and Toppers are subsidiaries of Corvest Promotional. Adva-Lite manufactures and markets personal lighting gizmos, writing instruments, beverageware, and tools. It's All Greek provides custom plush products. Toppers offers sports bags, totes, luggage, caps, and other business accessories. Chapter 11 Petition Date: February 28, 2007 Court: District of Delaware (Delaware) Judge: Kevin J. Carey Debtors' Counsel: Kara Hammond Coyle, Esq. Young Conaway Stargatt & Taylor LLP 1000 West Street, 17th Floor Brandywine Building Wilmington, DE 19801 Tel: (302) 571-6600 Estimated Assets Estimated Debts ---------------- --------------- Adva-Lite, Inc. $1 Million to $1 Million to $100 Million $100 Million Toppers, LLC $1 Million to $1 Million to $100 Million $100 Million CGI, Inc. Less than $10,000 Less than $10,000 It's All Greek To Me, $1 Million to $1 Million to Inc. $100 Million $100 Million Corvest Promotional $1 Million to $1 Million to Products, Inc. $100 Million $100 Million Corvest Group, Inc. Less than $10,000 Less than $10,000 Debtors' Consolidated List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ PNC Equity Management Noteholder - Corvest $29,120,000 One PNC Plaza Group Inc. 249 Fifth Avenue Pittsburgh, PA 15222-2707 Maxim Trade - Toppers $2,897,774 2nd Floor Sund Chaing Road Taipei, Taiwan Maxim Trade - Adva-Lite $1,527,810 2nd Floor Sund Chaing Road Taipei, Taiwan UPS Supply Chain Trade - Corvest $919,864 Solutions Inc. Promotional P.O. Box 371232 Pittsburgh, PA 15250-7232 Hollco Int'l (HK) Ltd. Trade - Toppers $813,554 Unit 901 9/F Lip Po Sun Plaza 28 Canton TR Tsim Sha Tsui Knowloon, Hong Kong Cheer Honest Int'l Ltd. Trade - Toppers $534,107 Room 19, 7/F Block A 6 Wang Lkwun Road Proficient Ind Knowloon, Hong Kong Tung Fat Industries Ltd. Trade - Adva-Lite $435,144 11/F Kwong on Bank Building 728-730 Nathan Road Mongkok Knowloon, Hong Kong Global Headwear Ltd. Trade - Toppers $358,718 Room 1803-1806 18/F Ent Square 3 39 Wang Chiu Road Knowloon Bay Knowloon, Hong Kong Arandell Corporation Trade - Corvest $321,874 Attn: Bobbi Pfeiffer Promotional North 82 West 13118 Leon Road Memomonee Falls, WI 53051-3328 Green Toyland Limited Trade - It's All $311,620 #174-3 Keoyeo-Dong Greek to Me Songpa-Ku Seoul, Korea D J Plush Toys Trade - It's All $311,499 Room 1701-2 113-115 Greek to Me Argyle Street Mongkok Knowloon, Hong Kong Maxim Trade - It's All $254,122 No. 641 Hongzong Road Greek to Me Shanghai, China Pepper Hamilton LLP Trade - Corvest $217,460 400 Berwyn Park Promotional 899 Cassat Road Berwyn, PA 19312-1183 Joong A Toy Co., Ltd. Trade - It's All $197,239 Greek to Me Trivest Service Corp. Trade - Corvest $174,605 Promotional Jeyson Industrial Trade - Toppers $168,124 Index Industrial Corp. Trade - Toppers $153,364 Trade Am Int'l Trade - Toppers $88,692 Tore Corporation Trade - It's All $87,166 Greek to Me Eric Beare Trade - Adva-Lite $83,681 Super Union Industrial Lrd. Trade - It's All $81,043 Greek to Me Zenobia Creations Trade - It's All $79,266 Greek to Me UPS Trade - Toppers $72,883 Der lee Enterprises Trade - Toppers $69,732 Headwind Ceramic Ltd. Trade - Adva-Lite $66,766 Marsh USA - Atlanta Trade - Corvest $63,277 Promotional CDI International Trade - Adva-Lite $62,591 China Sourcing, Inc. Trade - Adva-Lite $53,676 John Manufacturing, Ltd. Trade - Adva-Lite $51,663 Precision Litho Service, Inc. Trade - Corvest $44,006 Promotional ADVA-LITE: Organizational Meeting Scheduled on March 13 ------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Adva-Lite, Inc. and its debtor-affiliates' chapter 11 cases at 10:00 a.m., on March 13, 2007, at Room 5209, J. Caleb Boggs Federal Building, 844 North King Street in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtor's cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtor will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. 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 that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in Largo, Fla., Adva-Lite, Inc. --http://www.advalite.com/ -- a wholly owned subsidiary of Corvest Promotional Products, Inc., manufactures and markets personal lighting gizmos, writing instruments, beverageware, and tools. The company's affiliate, It's All Greek To Me, Inc., provides custom plush products. Toppers LLC, another affiliate, offers sports bags, totes, luggage, caps, and other business accessories. ADVANCED MARKETING: Wants to Pay Employee Sale-Related Incentives ----------------------------------------------------------------- Advanced Marketing Services and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for approval for the payment of: a) sale-related incentives to AMS employees including members of senior management (AMS Management Incentive Plan) b) retention plan to certain AMS non-management employees (AMS Employee Retention Plan) c) allowing all payments thereunder as administrative expenses of the estates. This request is being made to ensure the continued availability of qualified, trained, and motivated personnel and executives necessary to bring an AMS sale to completion and to oversee and implement the complicated business arrangements necessary to effect a sale of the business or its material parts and an inventory return program. As reported in the Troubled Company Reporter on Feb. 27, 2007, AMS and Baker & Taylor Inc. signed on Feb. 16, 2007, an asset purchase agreement for the sale of majority of Debtor's assets. As reported in the Troubled Company Reporter on Feb. 23, 2007, the Court approved the asset purchase agreement between Publishers Group West Inc. and Perseus Books LLC pursuant to which PGW will transition to Perseus the books and business of all publishers who consented to the deal. The aforementioned plans were formulated to provide incentives and reward the performance of critical employees who were called upon to take on additional responsibilities and expend significantly more hours working than contemplated by the normal terms of their employment, as part of Debtors' efforts to negotiate and close the PGW transaction and solicit interest of Baker & Taylor and potential overbidders for the AMS business. The approval and implementation of the AMS Management Incentive Plan and AMS Employee Retention Plan assures not only continued services for the consenting publishers under the asset purchase agreement between PGW and Perseus, but also a significant reduction in claims against the estate of PGW. Under the Perseus deal, PGW will continue to provide transition services to Perseus following the closing. Furthermore, the services of these key employees will be required in order to complete the return of $40 million of inventory not to be acquired by Baker & Taylor in the 20 days contemplated by the asset purchase agreement the company signed with Baker & Taylor. Management Incentive Plan Summary A pool of funds shall be made available to the AMS Incentive Plan Participants (the "Incentive Compensation Pool"), conditioned upon the occurrence of either the closing of the asset to Baker & Taylor or a transaction that is higher or otherwise better. As a further condition to payment, AMS has required the successful completion of an inventory return program. The Baker & Taylor sale documents currently provide that, unless otherwise agreed by Baker & Taylor, all inventory must be removed from AMS's facilities within 20 days of closing to the extent that it is not sold to Baker &Taylor. The initial amount of the Incentive Compensation Pool shall be $765,000. Additional compensation will only be earned upon consummation of an alternative transaction of a higher or better value than the value that the Debtors would receive upon consummation of the Baker & Taylor sale. The increase, if any, to the Incentive Compensation Pool will only increase as the aggregate consideration received by the Debtors increases, subject to the further condition that the aggregate consideration received by the Debtors are sufficient to pay the break up fee (if any) owed to Baker & Taylor under the asset purchase agreement. Debtors propose that the Incentive Compensation Pool receive 1% of any additional consideration in excess of the purchase price under the asset purchase agreement. For any additional consideration that exceeds $2 million above the purchase price under the asset purchase agreement, the Incentive Compensation Pool shall receive 2% of such excess consideration. Employee Retention Plan Summary The new AMS Employee Retention Plan provides for payments to certain additional key employees of AMS based on their continued employments with AMS (the "AMS Retention Payments"). The Debtors have determined that the total anticipated cost of the AMS Employee Retention Program is approximately $915,000, net of applicable employer paid taxes. The AMS Employee Retention Program applies to approximately 67 employees. Pursuant to the Plan, key employees are eligible to receive bonuses in the range of $7,500 to $50,000, based on (1) a conideration of their compensation in effect upon their approval for participation in the AMS Employee Retention Plan, (2) employment position classification, and (3) continued employment with the Debtors on April 30, 2007. Importantly, any key employee that receive an offer of employment by Baker & Taylor will not be eligible for payment under the plan. Debtors believe that the potential costs associated with the loss of employees would be far in excess of the combined costs of the AMS Employee Retention Plan, and that without the Plan, the employees will leave, causing an interruption in AMS's business operations and irreversible harm to the value of the estates. The Debtors also believe that the loss of these key employees may make it impossible to close the sale to Baker & Taylor and thus to realize value for the estate, and will make the inventory program contemplated by the agreement with Baker & Taylor more expensive to implement. Debtors Arguments Implementation of the AMS Employee Programs pursuant to Section 363(b) of the Bankruptcy Code is a valid Exercise of the Debtors' judgment. -- Debtors have articulated a valid business reason for implementing the AMS Management Incentive Plan. -- The AMS Employee Retention Plan is supported by a valid business reason. Implementation of the AMS Employee Programs may additionally be authorized pursuant to Section 105(a) of the Bankruptcy Code. Based in San Diego, California, Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Apr. 28, 2007. ALASKA AIR: Posts $52.6 Million Net Loss in Year Ended December 31 ------------------------------------------------------------------ Alaska Air Group Inc. reported a full year net loss of $52.6 million on total operating revenues of $3.3 billion in 2006, compared to a net loss of $5.9 million on total operating revenues of $3 billion in 2005. The 2006 results include charges related to the transition to an all-Boeing 737 fleet at Alaska Airlines and for voluntary severance programs related to new labor contracts, as well as mark-to-market fuel hedging adjustments. The 2005 results similarly include mark-to-market fuel hedge adjustments, voluntary severance program charges, a refund of Mexico navigation fees and the cumulative effect of a change in the company's maintenance accounting policy. Excluding the impact of these items, 2006 net income would have been $137.7 million, compared to a net income of $55 million in 2005. The company reported a fourth quarter net loss of $11.6 million on total operating revenues of $790.3 million in 2006, compared to a net loss of $33 million on total operating revenues of $730.6 million in the fourth quarter of 2005. "While unit revenue growth slowed somewhat during the fourth quarter, our full year adjusted earnings show steady improvement over the last five years," said Bill Ayer, the company's chairman and chief executive officer. "This positive trend reflects the commitment of employees at Alaska and Horizon to achieve our customer, operational and financial goals. Alaska's transition by the end of 2008 to an all-737 fleet will further our efforts to reduce costs while delivering a compelling customer value." Because the company achieved a number of financial and operational goals, Air Group employees have earned $36.8 million of incentive pay. This is the highest incentive payout in the company's history. In addition, the marked improvement in operating cash flows allowed the company to contribute nearly $122 million to its defined benefit pension plans in 2006, bringing the funded percentage to nearly 80 percent based on the projected benefit obligation of the plans. At Dec. 31, 2006, the company's balance sheet showed $4.1 billion in total assets, $3.2 billion in total liabilities, and $885.5 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1aaf Alaska Air Group had cash and short-term investments at Dec. 31, 2006, of approximately $1 billion, compared to $983 million at Dec. 31, 2005. The company's debt-to-capital ratio, assuming aircraft operating leases are capitalized at seven times annualized rent, improved to 72 percent as of Dec. 31, 2006. About Alaska Air Group Seattle, Wash.-based Alaska Air Group Inc. (NYSE: ALK) -- http://alaskaair.com/-- is a holding company with two principal subsidiaries, Alaska Airlines Inc. and Horizon Air Industries Inc. Alaska Airlines and Horizon Air together serve 89 cities through an expansive network throughout Alaska, the Lower 48, Canada and Mexico. * * * As reported in the Troubled Company Reporter on Nov. 6, 2006, Moody's Investors Service affirmed the corporate family rating of Alaska Air Group Inc. and the Equipment Trust Certificate rating of Alaska Airlines Inc. at B1, and changed the outlook to stable from negative. ALLIANCE ONE: Selling $150 Million of 8.5% Senior Unsecured Notes ----------------------------------------------------------------- Alliance One International Inc. has agreed to sell $150 million an aggregate principal amount of unsecured 8.5% senior notes due 2012. The senior notes will be sold at 99.507% of their face amount. The company intends to use the proceeds of the proposed offering to repay outstanding borrowings under its existing senior secured term loans. The offering of the notes is subject to certain customary closing conditions. Based in Morrisville, North Carolina, Alliance One International, Inc. (NYSE:AOI) -- http://www.aointl.com/-- is a leaf tobacco merchant. The company has worldwide operations in Argentina, Bangladesh, Brazil, Bulgaria, Canada, China, France, Philippines, Malaysia, and Singapore. * * * As reported in the Troubled Company Reporter on Sept. 27, 2006, Moody's Investors Service's confirmed its B2 Corporate Family Rating for Alliance One International, Inc., and upgraded its B2 rating on the Company's $300 million senior secured revolver to B1. In addition, Moody's assigned an LGD3 rating to notes, suggesting noteholders will experience a 37% loss in the event of a default. ALLIED HOLDINGS: Discloses Treatment of Claims Under Chap. 11 Plan ------------------------------------------------------------------ Allied Holdings, Inc., and its debtor-affiliates, together with Yucaipa Co., their largest single unsecured creditor, and the Teamsters National Automobile Transportation Industry Negotiating Committee, which represents the interests of approximately 3,300 of their employees, delivered to the Honorable Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia on March 2, 2007, a Joint Plan of Reorganization for the resolution of outstanding claims and interests against the Debtors. The Plan Proponents also presented to Judge Mullins a disclosure statement intended to provide "adequate information" to enable creditors to make an informed judgment on the Joint Plan. According to the Disclosure Statement, the linchpin to the Debtors' reorganization is an amendment to their collective bargaining agreement with the Teamsters. The amendment provides for concessions, not exceeding $35,000,000 annually, from the terms of the original CBA for a three-year period. Jeffrey W. Kelley, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, relates that, under the Plan, the Debtors will be reorganized through, among other things, the consummation of various transactions: (i) payment in cash of all secured claims arising under or pursuant to the debtor-in-possession credit documents; (ii) payment in cash, reinstatement, return of collateral or other treatment of other secured claims agreed between the holder of each claim and Yucaipa; (iii) distribution of new common stock on a pro rata basis to the holders of allowed general unsecured claims; (iv) cancellation of the existing interests in the Debtors; (v) assumption of equipment leases, customer contracts, and real property leases that are favorable to the Debtors' businesses; and (vi) the funding of the debt or equity financing to be provided on the effective date to the Reorganized Debtors. The Plan contemplates the reorganization and ongoing business operations of the Debtors, and the resolution of the outstanding claims against and interests in the Debtors pursuant to Sections 1129(a) and 1123 of the Bankruptcy Code. Pursuant to a stipulation, the Debtors and Yucaipa agreed that any Plan and Disclosure Statement filed on March 2 would be deemed timely filed. Treatment of Claims Pursuant to Section 1123(a)(l), administrative expense claims, claims of the DIP lenders and priority tax claims against the Debtors are not classified for purposes of voting on, or receiving Distributions under the Plan: Entitled Class Designation Impairment Recovery to Vote? ----- ----------- ---------- -------- -------- n/a Administrative Unimpaired 100% No Expense Claims n/a Priority Tax Claims Unimpaired 100% No n/a DIP Financing Unimpaired 100% No During the Chapter 11 Cases, the holders of prepetition lender claims with respect to the prepetition loan facility for $180,000,000 received, in full satisfaction of their claims, Cash equal to 100% of their Claims and, as a result, Prepetition Lender Claims are not classified for purposes of voting on or receiving Distributions under the Plan. For classification, voting, and treatment purposes, the Plan classifies all Claims against and Interests in the Debtors into 11 separate classes: Entitled Class Designation Impairment Recovery to Vote? ----- ----------- ---------- -------- -------- 1 Other Secured Claims Unimpaired/ N.A. Yes if Impaired Impaired; Depending on No if Recovery Unimpaired 2 Priority Non-Tax Unimpaired N.A. No Claims 3 Workers' Compensation Unimpaired 100% No Claims 4A General Unsecured Impaired [ ]% Yes Claims 4B Insured Claims Impaired [ ]% Yes 4C Other Insured Claims Impaired [ ]% Yes 5 Intercompany Claims Impaired 0% No 6 Subordinated General Impaired N.A. No Unsecured Claims 7A Old Allied Holdings Impaired 0% No Common Stock 7B Old Other Debtors Impaired 0% No Common Stock 7C Old Allied Holdings Impaired 0% No Stock Rights Each Holder of an Allowed Secured Claim in Class 1 will, in the discretion of Yucaipa, after consultation with the Debtors and the Official Committee of Unsecured Creditors, receive, in full satisfaction, settlement, release and discharge of, and in exchange for, its Allowed Class 1 Claim, any one or a combination of any of these: (i) Cash in an amount equal to the Allowed Class 1 Claim; (ii) deferred Cash payments totaling at least the Allowed amount of the Allowed Class 1 Claim, of a value, as of the Effective Date, of at least the value of that Holder's interest in the Debtors' property securing the Allowed Class 1 Claim; (iii) the property of the Debtors securing the holder's Allowed Class 1 Claim; (iv) Cash payments or liens amounting to the indubitable equivalent of the value of the holder's interest in the Debtors' property securing the Allowed Class 1 Claim; (v) reinstatement of the Allowed Class 1 Claim; or (vi) other treatment as Yucaipa and the holder will have agreed upon in writing. The Plan Proponents expect that the Claims of the members certain subclasses of Class 1 will be Unimpaired under Sections (i) and (v); and the Claims of the members of certain subclasses of Class 1 will be Impaired under Sections (ii), (iii), (iv) and (vi). Holders of Allowed Other Secured Claims will be paid in full, receive their collateral back, receive payments over time or receive some other treatment that provides them with the "indubitable equivalent" of their claims. Holders of Allowed Administrative Expense Claims and holders of Allowed Priority Non-Tax Claims will generally receive a one-time Cash payment equal to the Allowed Claim amounts of their Claims in satisfaction of those Claims. Each Holder of an Allowed Priority Tax Claim due and payable on or prior to the Effective Date either: (a) will be paid the full unpaid amount of the Allowed Priority Tax Claim in Cash on the Effective Date, or on other terms as may be agreed upon by the Holder, Yucaipa or the Reorganized Debtors; (b) will receive deferred Cash payments, over a period ending not later than six years from the date of assessment, totaling the principal amount of the Priority Tax Claim plus simple interest on any outstanding balance from the Effective Date calculated at a fixed rate of 4% per annum from the Effective Date, or a lesser rate agreed to by a particular taxing authority; or (c) otherwise will be paid as provided for in a Court order. Holders of Allowed General Unsecured Claims will receive a pro rata distribution of new Allied Holdings common stock. Holders of equity interests will receive nothing under the Plan. Assumption of Contracts and Leases On the Effective Date, in addition to all executory contracts and unexpired leases that have been previously assumed by the Debtors, all executory contracts and unexpired leases of the Reorganized Debtors are deemed assumed in accordance with the provisions and requirements of Sections 365 and 1123. Yucaipa, after consultation with the Debtors and the Creditors Committee will file the Contract/Lease Schedule. Yucaipa reserves the right to amend the Contract/Lease Schedule at any time up to 10 days before the confirmation hearing to add a contract or lease and up to three days before the Confirmation Hearing to delete a contract or lease. All executory contracts or unexpired leases of the Reorganized Debtors not set forth on the Contract/Lease Schedule that were not previously rejected will be deemed rejected as of the Effective Date. Any Holder of any Claim arising from the rejection of an executory contract or unexpired lease must file a proof of claim within the earlier of 30 days following entry of a Court order authorizing the rejection or 30 days after the confirmation date. Entry of a confirmation order will constitute approval of the rejections. Each executory contract and unexpired lease assumed and assigned will remain in full force and effect and be fully enforceable by the applicable Reorganized Debtor. The failure of any non-Debtor party to an executory contract or unexpired lease to file and serve an objection to the cure amount listed on the Contract/Lease Schedule for an executory contract or unexpired lease will be deemed consent to the cure amount. The CBA between the Teamsters and the Debtors will be amended and assumed by the Reorganized Debtors. A full-text copy of the amended labor deal term sheet is available for free at: http://researcharchives.com/t/s?1abf Continued Corporate Existence After the Effective Date, each of the Reorganized Debtors will continue to exist in accordance with the law in the jurisdiction in which it is incorporated or organized and pursuant to its certificate of incorporation and bylaws or other applicable organizational document in effect prior to the Effective Date. On and after the Effective Date, all property of the estates, including all Claims, rights and causes of action and any property acquired by any Debtor or Reorganized Debtor under or in connection with the Plan, will vest in the Reorganized Debtors free and clear of all Claims, Liens, charges, other encumbrances and Interests. Each of the Reorganized Debtors may operate its business, may use, acquire and dispose of property, may retain, compensate and pay any professionals or advisors, and compromise or settle any Claims or Interests without supervision of or approval by the Bankruptcy Court and free and clear of any restrictions of the Bankruptcy Code or the Federal Rules of Bankruptcy Procedure other than restrictions expressly imposed by the Plan or the confirmation order. The Plan is premised on the substantive consolidation of all of the Debtors with respect to the treatment of all Claims and Interests except for the Other Secured Claims in Class 1, which claims will be deemed to apply separately with respect to the Plan proposed by each Debtor. The Plan will serve as a request by the Plan Proponents, in lieu of a separate motion, to the Court, that it grant substantive consolidation with respect to the treatment of all Claims and Interests other than Class 1 Claims so that on the Effective Date: (a) all intercompany claims will be eliminated; (b) all assets and liabilities of the Debtors will be merged or treated as though they were merged; (c) all guarantees of the Debtors of the obligations of any other Debtor and any joint or several liability of any of the Debtors will be eliminated; and (d) each Claim or Interest, except for Other Secured Claims, against any Debtor will be deemed filed against the consolidated Debtors and all Claims filed against more than one Debtor for the same liability will be deemed one claim against any obligation of the consolidated Debtors. The Reorganized Debtors will obtain exit financing on the Effective Date. Term sheets relating to the Exit Financing will be contained in a Plan supplement. The Reorganized Debtors will have the right and authority without further Court order to raise additional capital and obtain additional financing that the boards of directors of the applicable Reorganized Debtors deem appropriate. In addition, the Reorganized Debtors will issue authorized New Common Stock to the Reorganized Debtor that was that Debtor's corporate parent prior to the Effective Date, so that each Reorganized Debtor will retain its 100% ownership of its prepetition subsidiary. Canadian Operations Sale One of Allied's major competitors is Performance Transportation Services, Inc., which is the parent company for E & L Transport Company, Hadley Auto Transport and Leaseway Auto Carrier. Yucaipa owns majority of the equity interests in PTS and has appointed designees to the PTS board of directors. After the Effective Date, the Reorganized Debtors will consider selling, subject to the discretion of Yucaipa, all of their assets utilized in connection with their operations in Canada. If the Reorganized Debtors engage in a sale process with respect to the Canadian Operations Sale, it is contemplated that PTS/Leaseway Motorcar Transport Company would act as a stalking horse bidder for that sale. For a Canadian Operations Sale to be effectuated, the value of the consideration received by the Reorganized Debtors must equal or exceed the imputed value of the Canadian operations, as derived from the implied EBITDA multiples used in the valuation of the Reorganized Debtors. Amended Governing Documents and By-Laws The amended by-laws and the amended and restated articles of incorporation, partnership agreement or limited liability company operating agreement of each of the Reorganized Debtors prepared pursuant to the Plan, will be contained in the Plan Supplement and will be adopted as may be required to be consistent with the provisions of the Plan and the Bankruptcy Code. The Amended Governing Documents of Reorganized Allied Holdings will, among other things, authorize the issuance of common stock in amounts not less than the amounts necessary to permit the distributions required or contemplated by the Plan and provide for a provision prohibiting the issuance of non-voting equity securities. The initial board will have five members, including: (1) a new chief executive officer who will be selected by Yucaipa and will be reasonably acceptable to the Teamsters and the Creditors Committee; (2) one member chosen by the Creditors Committee who will be reasonably acceptable to Yucaipa; and (3) three other members selected by Yucaipa. Pursuant to the terms of the amended CBA, the Teamsters will have certain observer rights with respect to the Initial Board. The proposed identity of the members of the Initial Board and the new CEO will be disclosed on or prior to the date of the hearing on the approval of the Disclosure Statement with respect to the Plan, or as soon as practicable. The remaining members of senior management will continue to serve until the Effective Date pursuant to their existing terms of compensation and subject to terms and conditions mutually acceptable to the Initial Board and the applicable member of management. The Initial Board of Allied Holdings will choose the members of the Boards of Directors of the other Reorganized Debtors on the Effective Date or as soon as practicable. As of the Effective Date, the Reorganized Debtors will have authority to maintain, amend or revise existing employment, retirement, welfare, incentive, severance, indemnification and other agreements with their active directors, officers and employees, and enter into new employment, retirement, welfare, incentive, severance, indemnification and other agreements for active and retired employees. Reorganized Allied Holdings will be authorized to reserve from the authorized shares of New Common Stock, that number of shares of New Common Stock required for issuance to the Holders of Allowed Claims as and when required under the Plan. The Initial Board may reduce the number of shares of New Common Stock so reserved at any time as it deems appropriate to the extent it determines in good faith that the reserve is in excess of the number of shares needed to satisfy requirements. In the event the Initial Board determines in its discretion to register the New Allied Holdings Common Stock with the Securities and Exchange Commission, or if Reorganized Allied Holdings is required under applicable securities laws to do so, Reorganized Allied Holdings will list the New Allied Holdings Common Stock on a national securities exchange or for quotation on a national automated interdealer quotation system within one year of the Effective Date unless the Initial Board determines otherwise. Reorganized Allied Holdings will have no liability if it is unable to list the New Allied Holdings Common Stock. Persons receiving distributions of New Allied Holdings Common Stock, by accepting the distribution, will have agreed to cooperate with Reorganized Allied Holdings' reasonable requests for assistance. Consummation of the Plan The conditions precedent to confirmation of the Plan that must be satisfied or waived are: * the Bankruptcy Court will have approved the Disclosure Statement with respect to the Plan in form and substance that is acceptable to Yucaipa, and reasonably acceptable to the Debtors and the Creditors Committee; * the Confirmation Order will have been signed by the Court and entered on the docket of the Chapter 11 Cases; * the Plan will be in form and substance satisfactory to Yucaipa, and reasonably acceptable to the Debtors and the Creditors Committee; * the Plan Supplement and the exhibits will be in form and substance satisfactory to Yucaipa after consultation with the Debtors and the Creditors Committee; * the Debtors will have obtained a written commitment for the Exit Financing in form and substance satisfactory to Yucaipa after consultation with the Debtors and the Creditors Committee; and * the Debtors and Teamsters will have entered into agreements and the Court will have entered orders, each in form and substance satisfactory to Yucaipa and Teamsters in their sole discretion, providing for approval of modified collective bargaining agreements in form and substance satisfactory to each of the Plan Proponents. The Plan will be consummated on the Effective Date, which date is conditioned on, inter alia: * all conditions to Plan Confirmation will remain satisfied; * each Court order will have become a final order; * the Confirmation Order and supporting findings of fact and conclusions of law will be entered by the Court in form and substance reasonably acceptable to each of the Plan Proponents and the Creditors Committee and will have become a Final Order; * all documents and agreements to be executed on the Effective Date or otherwise necessary to implement the Plan will be in form and substance that is acceptable to Yucaipa after consultation with the Creditors Committee and reasonably acceptable to the Debtors; * the closing and initial funding will have occurred under the Exit Financing and all conditions precedent to its consummation will have been waived or satisfied; * the Plan Proponents will have received any authorization, consent, regulatory approval, ruling, letter, opinion, or document that may be necessary to implement the Plan and that is required by law, regulation, or order, which have not been revoked; * the New Common Stock will have been issued in accordance with the Plan; and * the Effective Date will have occurred prior to six months after the Confirmation Date. A full-text copy of the Joint Plan of Reorganization is available for free at http://researcharchives.com/t/s?1ac0 A full-text copy of the Disclosure Statement is also available for free at http://researcharchives.com/t/s?1ac1 Teamsters Support Plan "Allied's filing is a giant step in saving the company from liquidation and saving the jobs of 3,500 Teamsters," said Fred Zuckerman, Director of the Teamsters Carhaul Division. The filing clears the way for Teamsters at Allied to vote on the Yucaipa plan. "The Yucaipa plan is not perfect, but it is the best way to make sure that our 3,500 members' futures remain secure," Zuckerman said. "I have personally attended more than 15 local union meetings and spoken to nearly 1,000 Allied members to explain the terms of the Yucaipa proposal. While our members are angry at what Hugh Sawyer did to their company most have told me that they are going to support the plan because they understand that their jobs, union contract, pensions and health care benefits will remain secure and Allied will be managed better in the future under a new CEO." While members will be asked to approve a 15-percent wage reduction during the next three years, Zuckerman said the overall plan is the best alternative to Allied going out of business. "The money from those concessions will go to new equipment, and members will keep their retirement security, health and welfare benefits," Zuckerman said. "I promise members that more information will be available soon, and they will get the chance to ask more questions before the ballots must be returned." Allied Teamsters will get to vote on the plan-ratification will take place within 45 days. The International Union will send information to members soon. About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- 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. 42; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) ALLIED HOLDINGS: Discloses Financial Projections Under Ch. 11 Plan ------------------------------------------------------------------ To demonstrate the feasibility of their Joint Chapter 11 Plan of Reorganization, Allied Holdings, Inc. and its debtor-affiliates, Yucaipa Co., and the Teamsters National Automobile Transportation Industry Negotiating Committee have prepared pro forma financial projections for fiscal years 2007 through 2010. The Financial Projections indicate that the Reorganized Debtors should have sufficient cash flow to pay and service their debt obligations, including the exit financing, all payments required to be made pursuant to the Plan, and to fund their restructured operations. According to the Plan Proponents, the Plan satisfies the feasibility requirement of Section 1129(a)(11) of the Bankruptcy Code. The Plan Proponents caution that no representations can be made as to the accuracy of the Financial Projections or as to the Reorganized Debtors' ability to achieve the projected results. The actual results may vary from the Financial Projections, and the variations may be material and adverse. Allied Holdings, Inc., and Subsidiaries Actual and Projected Consolidated Income Statements Forecast Forecast Forecast Forecast 2007 2008 2009 2010 -------- -------- -------- -------- Total Revenue $818,948 $842,482 $847,778 $864,996 Operating Income (Loss) 20,264 42,196 37,106 37,479 EBITDA 52,619 82,574 81,201 86,374 The Plan Proponents are Allied Holdings, Inc., Allied Automotive Group, Inc., Allied Systems, Ltd. (L.P.), Allied Systems (Canada) Company, QAT, Inc., RMX LLC, Transport Support LLC, F.J. Boutell Driveaway LLC, Allied Freight Broker LLC, GACS Incorporated, Commercial Carriers, Inc., Axis Group, Inc., Axis Netherlands, LLC, Axis Areta, LLC, Logistic Technology, LLC, Logistic Systems, LLC, CT Services, Inc., Cordin Transport LLC, Terminal Services LLC, Axis Canada Company, Ace Operations, LLC, and AH Industries Inc., and Yucaipa American Alliance Fund I, LP and Yucaipa Alliance (Parallel) Fund I, LP and The Teamsters National Automobile Transportation Industry Negotiating Committee. About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- 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. 42; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) ANN-LEE CONSTRUCTION: Can Use Cash Collateral on Interim Basis -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania authorized, on an interim basis, Ann-Lee Construction and Supply Company, Inc., to use S&T Bank's cash collateral. The Debtor tells the Court that it has an aggregate outstanding balance of $1,890,000, against S&T Bank. Brian B. Dutton, Esq., at Grene & Birsic P.C., said that S&T Bank asserted a security interest in, inter alia, substantially all of the Debtor's assets. As adequate protection, the Debtor will extend its security interest in the collateral and cash collateral, and postpetition, providing that it will make certain adequate protection payments. The Court will convene a hearing at 10:00 a.m., on March 30, 2007, to consider final approval of the Debtor's use of the cash collateral. Based in Saltsburg, Pennsylvania, Ann-Lee Construction and Supply Company, Inc. offers construction consulting & management services. The company filed for Chapter 11 protection on Jan. 11, 2007 (Bankr. W.D. Pa. Case No. 07-20226). Michael J. Henny, Esq., at the Law Offices of Michael J. Henny, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. ANN-LEE CONSTRUCTION: U.S. Trustee Picks 3-Member Creditor's Panel ------------------------------------------------------------------ Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, appointed three creditors to serve on an Official Committee of Unsecured Creditors in Ann-Lee Construction and Supply Company, Inc.'s chapter 11 case: 1. M.H. Corbin, Inc. Attn: Martha M. Corbin 8420 Estates Court Plain City, OH 43064 Tel: (614) 873-5216 Fax: (614) 873-8095 2. LSG Trucking, Inc. Attn: LuAnn J. Grubb 5 State Street Everett, PA 15537 Tel: (814) 652-9550 Fax: (814) 652-6230 3. W.C. McQuaide, Inc. dba McQuaide Truckload Attn: William F. McQuaide 153 Macridge Avenue Johnstown, PA 15904 Tel: (814) 269-6110 Fax: (814) 652-6230 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Ann-Lee's expense. They may investigate the Ann-Lee's 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 Ann-Lee 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. Based in Saltsburg, Pennsylvania, Ann-Lee Construction and Supply Company, Inc. offers construction consulting & management services. The company filed for Chapter 11 protection on Jan. 11, 2007 (Bankr. W.D. Pa. Case No. 07-20226). Michael J. Henny, Esq. and Joseph V. Luvara, Esq. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. ARBOR OF FARMERVILLE: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: The Arbor of Farmerville, LLC 2500 North 7th Street, Suite 400 West Monroe, LA 71291 Bankruptcy Case No.: 07-30260 Chapter 11 Petition Date: February 27, 2007 Court: Western District of Louisiana (Monroe) Judge: Henley A. Hunter 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 does not have any unsecured creditors. ARCTIC GLACIER: DBRS Confirms BB Rating on Senior Secured Notes --------------------------------------------------------------- Dominion Bond Rating Service confirmed the ratings for Arctic Glacier Inc. and Arctic Glacier International Inc., removed from Under Review-with Developing Implications status where they were placed on Nov. 1, 2006 because of proposed changes to the taxation of Income Funds. Ratings confirmed: * Bank Credit Facilities BB Stb * Senior Secured Notes BB Stb * Extendible Conv. Unsec. Subor. Debentures B (high) Stb Removal from Under Review reflects Arctic Glacier's relatively unique status in the income fund market. As approximately 70% of annual taxable income is derived outside of Canada, the proposed changes to the taxation of income funds are not expected to have an impact on Arctic Glacier's ability to maintain distributions at current levels and maintain a consistent leverage policy. Indicative of this consistent leverage policy, Arctic Glacier recently returned credit metrics to historic levels through a $70 million equity issue. This equity reduced debt, which had been used to finance acquisitions in 2006. These acquisitions bolstered the company's position as one of two large participants in a fragmented and consolidating market. Arctic Glacier's acquisition strategy has resulted in greater critical mass, better leveraging of fixed costs and stronger geographic diversification, which helps to counteract the sensitivity to regional weather conditions. In particular, the acquisition of California Ice also takes Arctic Glacier into markets with a longer peak season for ice consumption. The company is the market-share leader in most areas in which it operates, providing advantages such as greater route density, more efficient operations; opportunity to supply large retailers who favor larger suppliers and the ability to develop a brand name in a commodity type industry. The company remains susceptible to risks relating to weather which may create cyclicality. Additional challenges include integration risks; sensitivity to input costs, including energy and packaging; and sensitivity to currency movements. Credit ratings are also constrained by the Company being owned by an income fund, resulting in most operating cash flows being used for distributions to unit-holders. Acquisitions are likely to continue but are expected to be on a smaller scale as few large opportunities remain. ASARCO LLC: ASARCO Master Wants to Enter into Earth Tech Contract ----------------------------------------------------------------- ASARCO Master Inc. seeks permission from the U.S. Bankruptcy Court for the Southern District of Texas to enter into the Earth Tech Contract with its predecessor, Federated Metals Corporation. Federated Metals owned a property located on Market Street, in Houston, Texas, which was used for lead operations. In June 1993, the Texas Water Commission issued an Agreed Order under which ASARCO Master and Federated Metals agreed to conduct a remedial investigation of hazardous substances allegedly present at the Market Street Site. ASARCO Master is currently undertaking an investigation and remedial work at the Market Street Site. In connection with this, ASARCO Master entered into a professional services contract with Earth Tech Inc., for environmental remedial work from Jan. 26, 2007, through Dec. 31, 2007. Pursuant to the Services Contract, Earth Tech will: (a) provide professional and field services to support ASARCO Master in performing site assessments and remedial investigations at the Market Street Site; (b) provide ASARCO Master with a monthly forecast budget; and (c) provide monthly reports describing the technical and financial progress at the Market Street Site. ASARCO Master says the total cost for Earth Tech's work will not exceed $450,000. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Judge Schmidt extended the Debtors' exclusive period to file a plan of reorganization to April 6, 2007, and their exclusive period to solicit acceptances of that plan to June 6, 2007. ATLANTIC & WESTERN: PXRE Default Prompts Fitch's Negative Watch --------------------------------------------------------------- Fitch Ratings placed the 'BB' ratings of the class A notes and the 'B' ratings of the class B notes of Atlantic & Western Re Ltd. on Rating Watch Negative. The rating actions affect $300 million of Atlantic & Western Re notes. Atlantic & Western Re provided coverage to PXRE Reinsurance Ltd., a Bermuda-based reinsurer, on a five-year reinsurance contract. PXRE did not pay the premium due Feb. 8, 2007 under the reinsurance contract. The non-payment resulted in a default under the reinsurance contract which, in turn, will result in an early termination of the reinsurance contract. PXRE subsequently reported that it intended to make a payment on May 8, 2007 consisting of the premium payment due that date, the premium payment that was due on Feb. 8, and the early termination premium of $11.0 million specified in the reinsurance contract. The $300 million of note principal is held in trust for the benefit of the note holders. As a result, Fitch expects note holders to have very nearly a full recovery under the default. Fitch expects the Rating Watch to be in effect until the May 8, 2007 premium payment date. If the outstanding quarterly and early termination premiums are paid on that date, Fitch expects to affirm the existing ratings and withdraw them due to the early termination of the transaction. If the payments are not made on that date, Fitch will likely downgrade the ratings commensurate with the degree to which the payments were not fully made. Atlantic & Western Re is a Cayman Islands-domiciled insurance company formed solely to issue the notes, enter into a reinsurance contract with PXRE, and to conduct activities related to the notes' issuance. The affected notes are listed below: * Atlantic & Western Re, Ltd. -- $100 million class A notes due Nov. 15, 2010 'BB' rating placed on Rating Watch Negative and -- 200 million class B notes due Nov. 15, 2010 'B' rating placed on Rating Watch Negative. ASSOCIATED VISUAL: Case Summary & 28 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Associated Visual Communications, Inc. aka AVC, Inc. 236 Walnut Avenue Northeast Canton, OH 44702 Bankruptcy Case No.: 07-60471 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- G & A, Ltd. 07-60472 Chapter 11 Petition Date: February 27, 2007 Court: Northern District of Ohio (Canton) Judge: Russ Kendig Debtors' Counsel: Anthony J. DeGirolamo, Esq. 116 Cleveland Avenue, Northwest, Suite 625 Canton, OH 44702 Tel: (330) 588-9700 Fax: (330) 588-9713 Total Assets Total Debts ------------ ----------- Associated Visual Communications, Inc. $1,257,208 $3,431,261 G & A, Ltd. $592,600 $1,514,119 A. Associated Visual Communications, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Zion Bank Bank loan $360,455 National Real Estate Group P.O. Box 26304 Salt Lake City, UT 84126 Laird Plastics Trade debt $280,359 2830 Gilchrist Road Akron, OH 44305 Continental/Frazen Litho Trade debt $168,989 952 East 72nd Street Cleveland, OH 44103 Internal Revenue Service $146,068 Cincinnati, OH 45999 Flutes LLC Trade debt $121,427 8252 Zionsville Road Indianapolis, IN 46268 Nazdar Cincinnati Trade debt $75,352 Cleveland Plastic Firms Trade debt $70,564 Bureau of Workers Bank loan $55,133 Compensation Burlan Corp. Trade debt $40,864 Employee Temps Staffing Trade debt $38,220 Sebring Container Trade debt $37,332 NFIB Trade debt $36,507 KKS Industries Trade debt $34,772 Citi Business Cards Trade debt $22,629 State Of Ohio- ODJFS Bank loan $22,595 Spartech Plastics Trade debt $21,983 Capital One Trade debt $21,295 Yellow Freight Systems Trade debt $20,707 NFIB Trade debt $19,188 Chase Trade debt $17,833 B. G & A, Ltd.'s Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dominion East Ohio Trade debt $1,610 P.O. Box 26785 Richmond, VA 23261-6785 Dominion East Ohio Trade debt $1,036 P.O. Box 26785 Richmond, VA 23261-6785 American Electric Power Trade debt $711 P.O. Box 24402 Canton, OH 44701 Waste Management Trade debt $559 1006 West Walnut Street Canal Winchester, OH 43110 Canton City Utilities Trade debt $380 626 30th Street Northeast Canton, OH 44709 Canton City Utilities Trade debt $200 626 30th Street Northeast Canton, OH 44709 Canton City Utilities Trade debt $152 626 30th Street Northeast Canton, OH 44709 American Electric Power Trade debt $80 P.O. Box 24402 Canton, OH 44701 AVNET INC: Moody's Rates $250 Million Senior Notes at Ba1 --------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating and positive outlook to Avnet, Inc.'s offering of $250 million senior notes due 2014. The new issue proceeds will be used to refinance short-term debt incurred to fund Avnet's purchase of Access Distribution from General Electric, which closed on Dec. 31, 2006. The $412.5 million acquisition was funded through a combination of debt and cash-on-hand. Although debt has increased, the purchase is not expected to materially weaken credit protection measures and internal liquidity given Avnet's higher operating cash flow levels plus the additive cash flow generated by Access. Moody's expect pro forma debt to EBITDA to increase modestly to 2.5x on a Moody's adjusted basis compared to 2.2x as of LTM Dec. 30, 2006. With approximately $2 billion in revenues, Access is expected to deepen Avnet's existing Sun relationship, adding complementary product lines and expanding the Technology Solution Group's geographic coverage. In addition to improved scale, $15 million of anticipated cost synergies and immediate accretion to earnings, the acquisition is expected to generate sales synergies via cross-selling opportunities into the customer bases of both Access and Avnet. New rating assigned with a positive outlook: * $250 million Senior Unsecured Notes due 2014, Ba1, LGD-3, 49% Avnet, Inc., headquartered in Phoenix, Arizona, is one of the largest worldwide distributors of electronic components and computer products, primarily for industrial customers. Revenues and EBITDA for the last twelve months ended Dec. 30, 2006 were $14.8 billion and $666 million, respectively. BANC OF AMERICA: Fitch Rates $1.7 Mil. Class B-5 Certificates at B ------------------------------------------------------------------ Fitch rates Banc of America Funding Corporation's mortgage pass-through certificates, series 2007-2: -- $541,931,205 classes 1-A-1 through 1-A-42, 1-A-R, 30-IO, 30- PO, and 2-A-1 senior certificates 'AAA'; -- $9,679,000 class M-1 'AA+'; -- $4,839,000 class B-1 'AA'; -- $4,269,000 class B-2 'A'; -- $3,131,000 class B-3 'BBB'; -- $2,277,000 class B-4 'BB'; -- $1,708,000 class B-5 'B'. The 'AAA' ratings on the senior certificates reflect the 4.80% subordination provided by the 1.70% class M-1, the 0.85% class B-1, the 0.75% class B-2, the 0.55% class B-3, the 0.40% privately offered class B-4, the 0.30% privately offered class B-5, and the 0.25% privately offered class B-6. The ratings on the class M-1, B-1, B-2, B-3, B-4 and B-5 certificates reflect each certificate's respective level of subordination. Class B-6 is not rated by Fitch. This transaction contains certain classes designated as exchangeable REMIC certificates and exchangeable certificates. Exchangeable REMIC certificates: 1-A-3, 1-A-4, 1-A-5, 1-A-6, 1-A- 7, 1-A-8, 1-A-9, 1-A-10, 1-A-11, 1-A-12, 1-A-13, 1-A-14, and 1-A- 17 Exchangeable certificates: 1-A-2, 1-A-24, 1-A-25, 1-A-26, 1-A-27, 1-A-29, 1-A-30, 1-A-31, 1-A-32, 1-A-33, 1-A-34, 1-A-35, 1-A-36, 1- A-37, 1-A-38, 1-A-39, 1-A-40 and 1-A-42 All other classes are regular certificates. All or a portion of certain classes of offered exchangeable REMIC certificates may be exchanged for a proportionate interest in the related exchangeable certificates. All or a portion of the exchangeable certificates may also be exchanged for the related offered exchangeable REMIC certificates in the same manner. This process may occur repeatedly. The classes of offered exchangeable REMIC certificates and of exchangeable certificates that are outstanding at any given time, and the outstanding principal balances and notional amounts of these classes, will depend upon any related distributions of principal, as well as any exchanges that occur. Offered exchangeable REMIC certificates and exchangeable certificates in any combination may be exchanged only in the proportions shown in the governing documents. Holders of exchangeable certificates will be the beneficial owners of a proportionate interest in the certificates in the related combination group and will receive a proportionate share of the distributions on those certificates. With respect to any distribution date, the aggregate amount of principal and interest distributable to, and amount of principal and interest losses and interest shortfalls on, all of the exchangeable certificates in any exchangeable combination on such distribution date will be identical to the aggregate amount of principal and interest distributable to, and amount of principal and interest losses and interest shortfalls on, all of the exchangeable REMIC certificates in the related REMIC combination on such distribution date. Fitch believes the amount of credit enhancement will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral purchased by Banc of America Funding Corporation, the integrity of the legal and financial structures, and the master servicing capabilities of Wells Fargo Bank, N.A. The collateral consists of 973 fully amortizing, fixed interest rate, first lien mortgage loans, with original terms to maturity of 120 to 360 months. The aggregate unpaid principal balance of the pool is $569,257,532 as of the Feb. 1, 2007, cut-off date and the average principal balance is $585,054. The weighted average original loan-to-value ratio of the loan pool is approximately 72.70; approximately 3.04% of the loans have an OLTV greater than 80%. The weighted average coupon of the mortgage loans is 6.514% and the weighted average FICO score is 734. Cash-out and rate/term refinance loans represent 33.25% and 21.02% of the loan pool, respectively. The states that represent the largest geographic concentration are California (30.51%), Texas (13.70%), and Florida (13.54%). All other states have a concentration of less than 5%. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. BAFC, a special purpose corporation, purchased the mortgage loans from Bank of America, National Association; Wells Fargo Bank, National Association; and National City Mortgage Co., and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. All other originators are less than 5% of the mortgage pool. Wells Fargo Bank N.A. will serve as master servicer and as securities administrator. U.S. Bank, N.A. will serve as trustee. For federal income tax purposes, elections will be made to treat the trust as multiple real estate mortgage investment conduits. BANC OF AMERICA: Fitch Rates $11.7 Million Class P Certs. at B- --------------------------------------------------------------- Fitch rates Banc of America Commercial Mortgage, Inc., series 2007-1, commercial mortgage pass-through certificates: -- $57,000,000 class A-1 'AAA'; -- $293,000,000 class A-2 'AAA'; -- $444,000,000 class A-3 'AAA'; -- $68,473,000 class A-AB 'AAA'; -- $698,700,000 class A-4 'AAA'; -- $640,477,000 class A-1A 'AAA'; -- $3,145,214,397 class XW 'AAA'; -- $214,521,000 class A-MFX 'AAA'; -- $259,480,000 class A-J 'AAA'; -- $27,521,000 class B 'AA+'; -- $100,000,000 class A-MFL 'AAA'; -- $35,383,000 class C 'AA'; -- $27,521,000 class D 'AA-'; -- $39,315,000 class E 'A'; -- $39,315,000 class F 'A-'; -- $35,384,000 class G 'BBB+'; -- $35,384,000 class H 'BBB'; -- $39,315,000 class J 'BBB-'; -- $7,863,000 class K 'BB+'; -- $11,795,000 class L 'BB'; -- $7,863,000 class M 'BB-'; -- $3,931,000 class N 'B+'; -- $7,863,000 class O 'B'; and -- $11,795,000 class P 'B-'. The $39,315,397 class Q is not rated by Fitch. Classes A-1, A-2, A-3, A-AB, A-4, A-1A, XW, A-MFX, A-J, B are offered publicly, while classes A-MFL, C,D,E,F,G,H,J,K,L,M,N,O,P, and Q are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 157 fixed-rate loans having an aggregate principal balance of approximately $3,145,214,397, as of the cutoff date. BANC OF AMERICA: Fitch Puts Low-B Ratings on Four Cert. Classes ---------------------------------------------------------------- Banc of America Mortgage Securities, Inc.'s mortgage pass-through certificates, series 2007-1, are rated by Fitch Ratings: Group 1: -- $650,754,370 classes 1-A-1 through 1-A-32, 1-A-R, 1-IO, and 1-PO senior certificates 'AAA'; -- $8,436,000 class 1-M 'AA+' -- $6,074,000 class 1-B-1 'AA'; -- $3,712,000 class 1-B-2 'A'; -- $2,024,000 class 1-B-3 'BBB'; -- $1,350,000 class 1-B-4 'BB'; and -- $1,012,000 class 1-B-5 'B'. Group 2: -- $340,934,178 classes 2-A-1 through 2-A-26, 2-IO and 2-PO 'AAA'; -- $4,053,000 class 2-M 'AA+'; -- $2,644,000 class 2-B-1 'AA'; -- $1,938,000 class 2-B-2 'A'; -- $1,058,000 class 2-B-3 'BBB'; -- $705,000 class 2-B-4 'BB'; and -- $528,000 class 2-B-5 'B'. The 'AAA' ratings on the Group 1 senior certificates reflects the 3.50% subordination provided by the 1.25% class 1-M, 0.90% class 1-B-1, 0.55% class 1-B-2, 0.30% class 1-B-3, 0.20% class 1-B-4, 0.15% privately offered class 1-B-5, and 0.15% privately offered class 1-B-6. The ratings for classes, 1-M, 1-B-1, 1-B-2, 1-B-3, 1-B-4, and 1-B-5 are based on their respective subordination. Class 1-B-6 is not rated by Fitch. The 'AAA' ratings on the Group 2 senior certificates reflects the 3.25% subordination provided by the 1.15% class 2-M, 0.75% class 2-B-1, 0.55% class 2-B-2, 0.30% class 2-B-3, 0.20% privately offered class 2-B-4, 0.15% privately offered class 2-B-5 and 0.15% privately offered class 2-B-6. The ratings for, 2-M, 2-B-1, 2-B-2, 2-B-3, 2-B-4, and 2-B-5 are based on their respective subordination. Class 2-B-6 is not rated by Fitch The ratings also reflect the quality of the underlying collateral, the primary servicing capabilities of Bank of America Mortgage, N.A., and Fitch's confidence in the integrity of the legal and financial structure of the transaction. The mortgage pool of Group 1 consists of 1,110 recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to four-family residential mortgage loans with remaining terms to stated maturity ranging from 240 to 360 months. The aggregate outstanding balance of the Group 1 pool as of the Feb. 1, 2007 cut-off date, is $674,869,666, with an average balance of $607,991 and a weighted average coupon of 6.429%. The weighted average original loan-to-value ratio for the mortgage loans in the pool is approximately 71.93%. The weighted average FICO credit score is 752. Second homes comprise 9.33%, and 0.64% are investor occupied properties. Rate/Term and cash-out refinances account for 15.73% and 21.71% of the loans in the pool. The states that represent the largest geographic concentration of mortgaged properties are California (40.25%), and Florida (10.06%). All other states represent less than 5% of the aggregate pool balance as of the cut-off date. The mortgage pool of Group 2 consists of 572 recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to four-family residential mortgage loans with remaining terms to stated maturity ranging from 240 to 360 months. The aggregate outstanding balance of the Group 2 pool as of the cut-off date is $352,454,718, with an average balance of $616,180 and a WAC of 6.429%. The weighted average OLTV for the mortgage loans in the pool is approximately 71.54%. The weighted average FICO credit score is 755. Second homes comprise 7.79%, and 1.04% are investor occupied properties. Rate/Term and cash-out refinances account for 15.09% and 21% of the loans in the pool. The states that represent the largest geographic concentration of mortgaged properties are California (44.37%), and Florida (8.32%). All other states represent less than 5% of the aggregate pool balance as of the cut-off date. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. Banc of America Mortgage Securities, Inc. deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, elections will be made to treat the trust as multiple real estate mortgage investment conduits. Wells Fargo Bank, N.A. will act as trustee. BEARINGPOINT INC: Reports Inability to File 2006 Form 10-K ---------------------------------------------------------- BearingPoint Inc. notified the New York Stock Exchange on March 1, 2007, that it will be unable to file its 2006 Form 10-K in timely manner. As a result, the company will be subject to the procedures specified in Section 802.01E of the NYSE's Listed Company Manual which, among other things, provides that the NYSE will monitor the company and the filing status of the 2006 Form 10-K. If the company has not filed its 2006 Form 10-K within six months of the filing due date of the 2006 Form 10-K, the NYSE will determine whether the company should be given up to an additional six months to file its 2006 Form 10-K. The NYSE may instead commence suspension and delisting procedures. The company expects to receive a letter from the NYSE regarding these procedures. About BearingPoint Headquartered in McLean, Virginia, BearingPoint, Inc., (NYSE: BE) -- http://www.BearingPoint.com/-- provides of management and technology consulting services to Global 2000 companies and government organizations in 60 countries worldwide. The firm has approximately 17,500 employees, and major practice areas focusing on the Public Services, Financial Services and Commercial Services markets. BearingPoint has global locations including in Indonesia, Australia, Austria, China, India, Japan, Mexico, Portugal, Singapore and Thailand. * * * Moody's Investors Service's rated BearingPoint Inc.'s 2.5% Series A Convertible Subordinated Debentures due 2024 at B3. BEARINGPOINT INC: Secures Limited Waiver from Lenders ----------------------------------------------------- BearingPoint Inc. disclosed that on Feb. 28, 2007, it obtained a limited waiver to the Fifth Amended Credit Agreement, dated as of Oct. 31, 2006 among the company, BearingPoint, LLC, the guarantors party, the lenders party, General Electric Capital Corporation, as syndication agent and collateral agent, Wells Fargo Foothill, LLC, as documentation agent, UBS Securities, LLC, as lead arranger, UBS AG Stamford Branch, as issuing bank and administrative agent, and UBS Loan Finance LLC, as swingline lender. BearingPoint Inc. disclosed that on Feb. 28, 2007, it obtained a limited waiver to the Credit Agreement, dated as of July 19, 2005 and as amended by the First Amendment dated as of Dec. 21, 2005, the Second Amendment dated as of March 30, 2006, the Third Amendment dated as of July 19, 2006, the Fourth Amendment dated as of Sept. 29, 2006, and the Fifth Amendment dated as of Oct. 31, 2006 among the company, BearingPoint, LLC, the guarantors party, the lenders party, General Electric Capital Corporation, as syndication agent and collateral agent, Wells Fargo Foothill, LLC, as documentation agent, UBS Securities, LLC, as lead arranger, UBS AG Stamford Branch, as issuing bank and administrative agent, and UBS Loan Finance LLC, as swingline lender. Senior Secured Credit Facility On July 19, 2005, the company entered into a $150 million Senior Secured Credit Facility, which was amended on Dec. 21, 2005, March 30, 2006, July 19, 2006, Sept. 29, 2006 and Oct. 31, 2006. The 2005 Credit Facility provides for revolving credit and advances, including issuance of letters of credit. Advances under the revolving credit line are limited by the available borrowing base, which is based upon a percentage of eligible accounts receivable. As of Dec. 31, 2005, the company did not have availability under the borrowing base. As of Sept. 30, 2006, the company had approximately $22 million available under the borrowing base. Among other things, the Waiver waives the delivery requirement of the company's Form 10-K for the year ended Dec. 31, 2006 and of its Forms 10-Q for the fiscal quarters ended March 31, 2006 and June 30, 2006 until March 15, 2007. About BearingPoint Headquartered in McLean, Virginia, BearingPoint, Inc., (NYSE: BE) -- http://www.BearingPoint.com/-- provides of management and technology consulting services to Global 2000 companies and government organizations in 60 countries worldwide. The firm has approximately 17,500 employees, and major practice areas focusing on the Public Services, Financial Services and Commercial Services markets. BearingPoint has global locations including in Indonesia, Australia, Austria, China, India, Japan, Mexico, Portugal, Singapore and Thailand. * * * Moody's Investors Service's rated BearingPoint Inc.'s 2.5% Series A Convertible Subordinated Debentures due 2024 at B3. BEARINGPOINT INC: Discloses Preliminary 2006 Financial Results -------------------------------------------------------------- BearingPoint, Inc. reported preliminary, unaudited results for its fiscal year ending Dec. 31, 2006. Gross revenue for 2006 is expected to be in the range of $3.45 to $3.55 billion, representing a 2% to 5% growth rate over 2005. Net revenue for 2006 is expected to be in the range of $2.55 to $2.65 billion, an approximately 5% to 10% increase over the prior year. Net loss before tax for 2006 is expected to be in the range of $144 to $214 million. The factors that will impact the 2006 net loss before tax include, among other things: * significant finance and accounting costs related to the completion of its 2006 financial statements and related audit, approximately $252 million, * occupancy costs, approximately $142 million, * systems costs, approximately $126 million, and * settlement of contractual disputes, approximately $67 million. The preliminary, unaudited information provided is, in part, based on the company's current estimate of results from operations for the second half of 2006, and remains subject to change based on actual results, the subsequent occurrence or identification of events prior to the completion of the closing and audit of its 2006 financial statements, as well as any further adjustments made in connection with the closing and audit procedures. The company also cautioned that estimated payments in connection with the settlement of its dispute with Hawaiian Telcom Communications, Inc., anticipated costs related to the design and implementation of its North American financial systems upgrades, payments of employee bonuses and other additional accrued expenses for 2006 could significantly impact its cash balances for the first quarter of fiscal 2007, if recently improved cash collection levels are not sustained. "Our year-over-year top-line growth is evidence that our strategy is working and, while we continued to experience abnormally high infrastructure expense, our business units' performance continues to improve," CEO Harry You commented. "I am extremely proud of the work our people are doing and that BearingPoint continues to be the management and technology consulting firm of choice for many government and commercial clients worldwide." Employee Ownership Stake Exploration The company also stated that its Board of Directors has authorized exploration of the feasibility of providing a significant employee ownership stake in the company's EMEA (Europe, Middle East and Africa) business unit to the employees of that unit. Through external investment and employee acquisitions, the company would expect to monetize a significant portion of its investment in its EMEA business unit. This decision is consistent with the company's stated goals of increasing shareholder value, increasing employee ownership, strengthening its balance sheet, and boosting customer confidence. At this time, the work is exploratory and no specific plans or timetable for a final decision have been approved by the Board. "We have been considering a number of strategic options to maximize value for our shareholders and to make BearingPoint a stronger company, both financially and operationally," Mr. You said. "Putting additional equity in the hands of our employees is consistent with our stated objectives. We believe that exploring this option for our EMEA business unit will enable us to accelerate our vision to become the next great consultancy and springboard the Company's growth." About BearingPoint Headquartered in McLean, Virginia, BearingPoint, Inc., (NYSE: BE) -- http://www.BearingPoint.com/-- provides of management and technology consulting services to Global 2000 companies and government organizations in 60 countries worldwide. The firm has approximately 17,500 employees, and major practice areas focusing on the Public Services, Financial Services and Commercial Services markets. BearingPoint has global locations including in Indonesia, Australia, Austria, China, India, Japan, Mexico, Portugal, Singapore and Thailand. * * * Moody's Investors Service's rated BearingPoint Inc.'s 2.5% Series A Convertible Subordinated Debentures due 2024 at B3. BELDEN CDT: Earns $65.9 Million in Year Ended 2006 -------------------------------------------------- Belden CDT Inc. filed with the U.S. Securities and Exchange Commission its Annual Report on Form 10-K for the year ended Dec. 31, 2006. For the year ended Dec. 31, 2006, the company reported net income of $65,935,000 on $1,495,811,000 of revenues compared to net income of $47,558,000 on revenues of $1,245,669,000 for the year ended Dec. 31, 2005. At Dec. 31, 2006, the company's balance sheet showed $1,355,968,000 in total assets and $512,067,000 in total liabilities resulting in a total stockholders' equity of $843,901,000. Pending Acquisitions In January 2007, the company disclosed the pending acquisition of HAC for approximately $260.0 million in cash. In February 2007, the company disclosed the pending acquisition of LTK for approximately $195.0 million in cash. The company anticipates that these and any other acquisitions consummated in 2007 will be funded with available cash, internally-generated funds, and cash obtained through external borrowings. Capital Expenditures Planned capital expenditures for 2007 are approximately $60.0 million, which includes the construction of new manufacturing facilities in Mexico and China. These these capital expenditures will be funded with available cash, internally- generated funds, and cash obtained through external borrowings. Debt Obligations The company said that its outstanding debt obligations as of Dec. 31, 2006 consisted of: * $110.0 million of 4.00% convertible subordinated debentures due in 2023, and * $62.0 million of medium-term notes. In January 2007, the company discovered that it was in technical default of a covenant in each of the two medium-term note agreements. Rather than request a waiver for these covenant violations, the company elected to redeem the outstanding notes. In February 2007, the company redeemed the notes in the aggregate principal amount of $62.0 million and, in connection therewith, paid a make-whole premium of approximately $2.0 million. The redemption was made with cash on hand. Senior Credit Facility Amendment During 2006, the company maintained a revolving senior credit facility totaling $165.0 million that was secured by the overall cash flow and tangible assets, other than real property, in the United States. The facility had a fixed term expiring in January 2011. There were no borrowings outstanding under this facility at any time during 2006. In February 2007, the company entered into an amendment to its existing revolving senior credit facility, which provides that the amount of the revolver commitment be increased from $165.0 million to $225.0 million as well as amends certain restrictive covenants governing affiliate indebtedness and asset sales. The agreement for the revolving credit facility contains various customary affirmative and negative covenants and other provisions, including restrictions on the incurrence of debt, maintenance of a maximum leverage ratio, maintenance of a fixed charge coverage ratio, and minimum net worth. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1ab9 About Belden CDT Headquartered in St. Louis, Missouri, Belden CDT Inc. (NYSE:BDC) -- http://www.belden.com/-- designs, manufactures and markets high-speed electronic cables, connectivity products and related items for the specialty electronics and data networking markets. The Company operates in two segments: the Electronics segment and the Networking segment. The Electronics segment designs, manufactures and markets metallic and fiber optic cable products with primarily industrial, video/sound/security and transportation/defense applications. These products are sold principally through distributors or directly to systems integrators and original equipment manufacturers. The Networking segment designs, manufactures and markets metallic cable, fiber optic cable, connectivity and other non-cable products primarily with networking/communications applications. These products are sold principally through distributors or directly to systems integrators, OEMs and large telecommunications companies. BELDEN CDT: Moody's Holds Rating and Revises Outlook to Positive ---------------------------------------------------------------- Moody's Investors Service affirmed Belden CDT Inc.'s Ba2 corporate family rating and changed the outlook to positive. Moody's also assigned instrument ratings of Baa3 to the company's recently upsized $225 million senior secured revolving credit facility and Ba2 to the proposed $350 million subordinated note issuance. The new debt and cash on hand will be used to acquire Hirschmann Automation and Control GmbH and LTK Wiring Co. Ltd. The change in outlook to positive reflects the relatively new management team's success in improving operations and the increased geographic, customer and product line diversification the acquisitions will bring. New ratings assigned: * $225 million senior secured revolving credit facility due 2011, Baa3, LGD2, 13% * $350 million senior subordinated notes anticipated to be due 2017, Ba2, LGD4, 57% Affirmed: * Corporate family rating, Ba2 * $110 million subordinated convertible notes due 2023, B1, LGD6, 93% The Ba2 rating reflects the companies leading market positions in several niches within the electronic cable and connector industries, strong credit metrics and strong cash flow generating capability. The credit metrics, particularly debt to EBITDA of 2.3x are strong for the rating category and suggestive of a higher rating. The ratings are constrained however by the cyclical nature of the cable and connector industries, recent increases in raw materials and inherent risks with the acquisition and integration of two geographically disperse companies. The positive outlook indicates Moody's view that the ratings have a reasonable likelihood of being upgraded over the next 18 months. The executive management team has come on board since October 2005 and has initiated several programs to reduce costs and focus on improving profitability. The new team has been able to achieve significant growth in revenues and operating margins in the face of rapidly increasing copper prices. The acquisitions of HAC and LTK will result in a short term increase in leverage and introduce some integration risk but Moody's believes the diversification and the access to new high growth markets the acquisitions bring is a net positive to the company. While the ratings and outlook anticipate some degree of continued debt financed acquisitions, to the extent debt to EBITDA approaches 3.0x, the outlook however could then return to stable. Belden CDT Inc. is a leading designer and manufacturer of advanced connectivity products for the global network communication and specialty electronic marketplaces with trailing twelve month revenues of $1.5 billion. The company is headquartered in St. Louis, Missouri. BELDEN CDT: S&P Lifts Corporate Credit Rating to BB+ from BB- ------------------------------------------------------------- Standard & Poor's Rating Services raised its corporate credit rating on St. Louis, Missouri-based Belden CDT Inc. to 'BB+' from 'BB-', and upgraded the rating on the $110 million convertible debentures to 'BB-' from 'B'. Standard & Poor's also assigned a 'BBB-' rating to the company's existing senior secured revolving credit facility totaling $225 million (upsized from $165 million), and assigned a 'BB-' rating to the proposed $350 million Senior Subordinated notes due 2017. The facility also has a recovery rating of '1', indicating the expectation for full recovery of principal in the event of a payment default. The proposed financing would be used to fund several recent acquisitions as well as provide liquidity. The outlook is revised to stable from positive. "The upgrade reflects the continued improvement in profitability and in financial leverage, which was 2.4x as of December 2006, pro forma for the proposed financing and two recent acquisitions," said Standard & Poor's credit analyst Stephanie Crane Mergenthaler. The company continues to benefit from increased profitability and solid free cash flow, which is being driven by demand for specialty electronics in the industrial and data networking markets, higher prices, as well as operating efficiencies generated by restructuring and inventory management. The financing provides funding to pay for two recently announced and pending acquisitions, Hirschmann Automation and Control in Germany, and LTK Wiring in China. It also provides increased liquidity to invest in growing the business, as well as for potential future debt repayments. The ratings reflect the company's participation in the highly competitive and cyclical wire and cable markets, partially offset by improving profitability, solid positions in segments of the relatively more value-added specialty electronic wire segments, and a currently moderate financial profile for the rating. BRANKLE BROKERAGE: Case Summary and 7 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Brankle Brokerage & Leasing, Inc. 637 South Lincoln Boulevard Marion, IN 46953 Bankruptcy Case No.: 07-10450 Chapter 11 Petition Date: March 2, 2007 Court: Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Grant F. Shipley, Esq. 233 West Baker Street Fort Wayne, IN 46802-3413 Tel: (260) 422-2700 Fax: (260) 424-2960 Total Assets: $5,104,039 Total Debts: $5,146,876 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Old National Bank Secured by $1,035,577 P.O. Box 3728 Mortgage on TN 37736-3728 Real Estate held by Dennis & Carol Brankle Freightliner $319,251 Secured: $32,000 DCS Truck Financial Freightliner $106,949 P.O. Box 2916 Secured: Milwaukee, WI 53201-2916 $86,000 Freightliner $91,545 Secured: $74,000 Freightliner $101,980 Secured: $85,000 Freightliner $108,594 Secured: $93,000 Freightliner $99,431 Secured: $84,000 Freightliner $419,244 Secured: $320,000 Freightliner $341,818 Secured: $315,000 Center Capital Corporation Freightliners $413,850 P.O. Box 330 Secured: Hartford, CT 06141-0330 $378,000 Trailers $203,790 Secured: $187,000 G.E. Transportation Finance Freightliners $93,063 P.O. Box 822108 Secured: Philadelphia, PA 19182-2108 $64,000 Trailers $203,382 Secured: $180,000 PlainsCapital Leasing Trailers $387,633 17304 Preston Road Secured: Suite 925 $360,000 Dallas, TX 75252 Wells Fargo NW-1878 Vanguards $203,512 P.O. Box 1450 Secured: Minneapolis, MN 55485-8178 $190,000 Volvo Financial Service Volvo Vehicles $189,366 P.O. Box 7247-0236 Secured: Philadelphia, PA 19170-0236 $144,000 Volvo Vehicle $97,843 Secured: $74,000 BUCKEYE TECH: Plans to Redeem $5 Million of 9-1/4% Senior Notes --------------------------------------------------------------- Buckeye Technologies Inc. intends to call for redemption $5 million in aggregate principal amount of its outstanding 9-1/4% Senior Subordinated Notes due 2008, or about 8% of the outstanding 2008 Notes, on or about March 30, 2007, in accordance with their terms. The company said that a formal notice of redemption will be sent separately to the affected holders of the 2008 Notes, in accordance with the terms of the indenture for the 2008 Notes. About Buckeye Technologies Headquartered in Memphis, Tennessee, Buckeye Technologies Inc. (NYSE:BKI) -- http://www.bkitech.com/-- manufactures and markets specialty fibers and nonwoven materials. The company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods. * * * The company carries Standard & Poor's BB- Corporate Credit Rating and Moody's Investors Service's B2 Corporate Family Rating. CALPINE CORP: Gets Court Nod to Contribute $23 Mil. to Greenfield ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New york authorized the Calpine Corporation and its debtor-affiliates to make the $23,000,000 additional contribution to the Greenfield Partnership, subject to the consent of the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Holders, and the Unofficial Committee of Second Lien Debtholders. As reported in the Troubled Company Reporter on Feb. 14, 2007, the Debtors asked the Court for permission to make the additional contribution to the non-recourse project level financing for Greenfield Energy Center LP. The Court previously authorized the Debtors to take all actions necessary to effectuate the Greenfield Project. Intervening events, however, have delayed closing of the Greenfield Financing Transaction: 1. Calpine Energy Services Canada, Ltd., a Canadian Debtor and 50% shareholder in the General Partner, has refused to transfer its ownership interest to another wholly owned Calpine entity or pledge its ownership interest to the project lenders as required under the project financing documents. 2. The Canadian Debtors have filed an avoidance action in the Court of Queen's Bench of Alberta, alleging that the U.S. Debtors' limited partnership interest had been transferred for insufficient consideration prepetition. David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York, relates, that the U.S. and Canadian Debtors are in discussions to reach a global resolution of all cross-border issues including issues related to the Greenfield Project. Pending resolution of the issues, the Debtors are required to inform Mitsui & Co., Ltd., its joint venturer, whether they intend to make an additional capital contribution of up to $23,000,000, on or before March 5, 2007, or risk the dilution of its 50% ownership interest in the Greenfield Project. The Debtors must make the additional $23,000,000 capital contribution within 10 business days after March 5, 2007, to prevent dilution, according to Mr. Seligman. About Calpine Corporation Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. The Debtors' exclusive period to file chapter 11 plan of reorganization expires on June 20, 2007. (Calpine Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Equity Panel Wants Perella as Financial Advisor ------------------------------------------------------------- The Equity Committee of Calpine Corporation and its debtor- affiliates' asks the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Perella Wienberg Partners, LP, as its financial advisors, nunc pro tunc Jan. 5, 2007. The Official Committee of Equity Security Holders relates that the Debtors have presented a detailed business plan and are now conducting detailed due diligence sessions for professionals only. The Debtors have also informed their constituents that they are seeking financings for a plan of reorganization, which they hope to file by June 2007. The Equity Committee, thus, believes that the retention of a financial advisor is necessary for it to effectively fulfill its fiduciary duties as the representative of the equity security holders' interests. The Equity Committee, however, is mindful of the fees associated with the retention of additional professionals. As the Equity Committee's financial advisor, PWP will: (a) evaluate the Debtors' assets and liabilities; (b) analyze the Debtors' financial and operating statements; (c) analyze the Debtors' business plans and forecasts; (d) evaluate the Debtors' liquidity, their DIP financing, cash collateral usage and adequate protection; (e) provide specific valuation or other financial analyses as the Equity Committee may require in connection with the bankruptcy cases; (f) assist and advise the Equity Committee in examining and analyzing any potential or proposed strategy for restructuring or adjusting the Debtors' outstanding indebtedness or overall capital structure; (g) advise the Equity Committee on the current state of the "restructuring" market and, in particular, the capital markets, including access to the capital markets in conjunction with the Restructuring; (h) render other financial advisory services as may from time to time be agreed upon pursuant to a separate written agreement by the Equity Committee and PWP; and (i) provide testimony in Court, on behalf of the Equity Committee, if necessary. The Equity Committee negotiated with PWP a fee structure, which provides that any fees payable to PWP will be taken from the equity shareholders' recovery pursuant to any confirmed reorganization plan, J.D. Kritser, chairman of the Equity Committee, tells the Court. In exchange for its services, PWP will receive: (a) a $150,000 non-refundable monthly fee payable from the equity security holders' recovery, the accrual of which will commence on Jan. 5, 2007, and will continue until the Transaction; and (b) a transaction fee equal to a percentage of the equity security holders' recovery calculated based on the Incremental Recovery to Equity in any Transaction. If the Recovery is less than $500,000,000, the Transaction Fee will be equal to 0.2% times the Recovery. The total Transaction Fee and Monthly Fees will not exceed $40,000,000, Mr. Kritser says. Derron S. Slonecker, a partner at PWP, assures the Court that his firm does not represent interests adverse to the Equity Committee, the Debtors and their estates. Mr. Slonecker adds that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Calpine Corporation Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. The Debtors' exclusive period to file chapter 11 plan of reorganization expires on June 20, 2007. (Calpine Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CAPRIUS INC: Completes $2.5 Million Preferred Stock Placement ------------------------------------------------------------- Caprius Inc. has completed a private placement for $2.5 million of a newly created Series E Preferred Stock initially convertible into 6,250,000 shares of Common Stock on Mar. 1, 2007. The company said that the warrants to purchase an additional 3,125,000 shares, at an exercise price of $0.50 per share, to four institutional investors including Special Situations Fund, a company's principal stockholder. "over the past four quarters we have seen sequential revenue growth as a result of increasing market acceptance of our SteriMed Systems" Dwight Morgan, Chairman and CEO of Caprius, commenting on the placement, stated. "This financing provides the resources we need to continue to drive market penetration and take advantage of the exciting new opportunities that lie ahead of us." The company has agreed to register the resale of the shares of Common Stock underlying the securities sold in the placement. The net proceeds of approximately $2,350,000, after placement fees and expenses, will be used for working capital and repayment of a $100,000 bridge loan. The company also announced that as of Feb. 23, 2007, Dwight Morgan also assumed the position of Chairman. Additionally, the company has appointed Roger W. Miller to the Board of Directors to fill to a vacancy created by the resignation of Dr. Jeffrey L. Hymes. About Caprius Caprius, Inc. (OTCBB: CAPS) -- http://www.caprius.com/-- is a manufacturer of proprietary equipment for the on-site disinfection and disposal of infectious medical waste through its subsidiary, M.C.M. Environmental Technologies, Inc. Going Concern Doubt Marcum & Kliegman, LLP, in New York, raised substantial doubt about Trans Energy's Inability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Sept. 30, 2006 and 2005. The auditor pointed to the Company's recurring losses from operations. CHASE MORTGAGE: Fitch Rates $1.6MM Class II-B4 Certificates at B ---------------------------------------------------------------- Chase Mortgage Finance Trust, series 2007-A1, is rated by Fitch: -- $3,674,899,100 classes 1-A1 through 1-A6, 2-A1 through 2-A-4, 3-A1, 3-A2, 4-A1, 4-A2, 5-A1, 5-A2, 6-A1, 6-A2, 7-A1, 7-A2, 8-A1, 8-A2, 9-A1, 9-A2, 10-A1, 10-A2, 11-A1 through 11-A8, 11-M1, 11-S1, 11-L1, 11-F1, 11-M5, 11-S5, 11-L5, 11-F5, 11-M8, 11-S8, 11-L8, 11-F8, 12-A1 through 12-A4, 12-M3, 12-S3, 12-L3, 12-F3, 13-A1 through 13-A3, 13-M2, 13-S2, 13-L2, 13-F2 and A-R (senior certificates) 'AAA'; -- $27,527,000 class II-M 'AA'; -- $7,864,000 class II-B1 'A'; -- $3,370,000 class II-B2 'BBB'; -- $2,808,000 privately offered class II-B-3 'BB'; and -- $1,685,000 privately offered II-B4 'B'. The 'AAA' rating on the mortgage pool I senior classes reflects the 1.10% subordination provided by the 0.50% class I-M, the 0.20% class I-B1, the 0.15% class I-B2, the 0.10% privately offered class I-B3, the 0.05% privately offered class I-B4, the 0.10% privately offered class I-B5. The 'AAA' rating on the mortgage pool II senior classes reflects the 4.05% subordination provided by the 2.45% class II-M, the 0.70% class II-B1, the 0.30% class II-B2, the 0.25% privately offered class II-B3, the 0.15% privately offered class II-B4 and the 0.20% privately offered and not-rated class II-B5 certificates. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the primary servicing capabilities of JPMorgan Chase Bank, N.A. This transaction contains certain classes designated as exchangeable certificates and others as regular certificates. Class 11-M1, 11-S1, 11-L1, 11-F1, 11-A3, 11-A4, 11-A5, 11-M5, 11- S5, 11-L5, 11-F5, 11-A6, 11-A7, 11-A8, 11-M8, 11-S8, 11-L8, 11-F8, 12-M3, 12-S3, 12-L3, 12-F3, 13-M2, 13-S2, 13-L2, 13-F2 are exchangeable certificates. Classes 1-A1 through 1-A6, 2-A1 through 2-A-4, 3-A1, 3-A2, 4-A1, 4-A2, 5-A1, 5-A2, 6-A1, 6-A2, 7-A1, 7-A2, 8-A1, 8-A2, 9-A1, 9-A2, 10-A1, 10-A2, 11-A1, 11-A2, 12-A1, 12-A2, 12-A4, 13-A1, 13-A3, A- R, I-M, I-B1, I-B2, I-B3, I-B4, I-B5, II-M, II-B1, II-B2, II-B3, II-B4, and II-B5 are regular certificates. The holder of the exchangeable initial certificates in any exchangeable combination may exchange all or part of each class of such exchangeable initial certificates for a proportionate interest in the related exchangeable certificates. The holder of any class of exchangeable certificates may exchange all or part of such class for a proportionate interest in each such class of exchangeable initial certificates or for other exchangeable certificates in the related exchangeable combination. The classes of exchangeable initial certificates and exchangeable certificates that are outstanding on any date and the outstanding principal balances of any such classes will depend upon the aggregate distributions of principal made to such classes, as well as any exchanges that may have occurred on or prior to such date. For the purposes of the exchanges and the calculation of the principal balance of any class of exchangeable initial certificates, to the extent that exchanges of exchangeable initial certificates for exchangeable certificates occur, the aggregate principal balance of the exchangeable initial certificates will be deemed to include the principal balance of such exchangeable certificates issued in the exchange, and the principal balance of such exchangeable certificates will be deemed to be zero. Exchangeable initial certificates in any exchangeable combination and the related exchangeable certificates may be exchanged only in the specified proportion that the original principal balances of such certificates bear to one another. Any holders of exchangeable certificates will be the beneficial owners of an interest in the exchangeable initial certificates in the related exchangeable combination and will receive a proportionate share, in the aggregate, of the aggregate distributions on those certificates. With respect to any distribution date, the aggregate amount of principal and interest distributable to any classes of exchangeable certificates and the exchangeable initial certificates in the related exchangeable combination then outstanding on such distribution date will be equal to the aggregate amount of principal and interest otherwise distributable to all of the exchangeable initial certificates in the related exchangeable combination on such distribution date as if no exchangeable certificates were then outstanding. Mortgage pool I consists of 4,496 adjustable-rate first-lien residential mortgage loans with stated maturity of not more than 30 years with an aggregate principal balance of $2,641,672,565 as of the cut-off date of Feb. 1, 2007. The mortgage pool has a weighted average original loan-to-value ratio of 63.92% with a weighted average mortgage rate of 4.6761%. The weighted-average current FICO score of the loans is 751. The average loan balance is $587,561 and the loans are primarily concentrated in California (43.09%), New York (18.23%) and Florida (7.29%). Mortgage pool II consists of 1,627 adjustable-rate first-lien residential mortgage loans with stated maturity of not more than 30 years with an aggregate principal balance of $1,123,504,307 as of the cut-off date of Feb. 1, 2007. The mortgage pool has a weighted average OLTV of 69.53% with a WAMR of 6.069%. The weighted-average current FICO score of the loans is 741. The average loan balance is $690,537 and the loans are primarily concentrated in California (48.86%), New York (16.26%) and Florida (8.05%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The Bank of New York Trust Company, N.A will serve as trustee. Chase Mortgage Finance Corporation deposited the loans in the trust which issued the certificates. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CITIMORTGAGE: Fitch Rates $2.4 Mil. Class B-5 Certificates at B ---------------------------------------------------------------- Fitch rates CitiMortgage Alternative Loan Trust's series 2007-A2 REMIC pass-through certificates: -- $652,180,918 classes IA-1 through IA-16, IA-IO, IIA-1, IIA- IO and A-PO certificates (senior certificates) 'AAA'; -- $15,781,000 class B-1 'AA'; -- $6,175,000 class B-2 'A'; -- $4,459,000 class B-3 'BBB'; -- $2,744,000 class B-4 'BB'; and -- $2,401,000 class B-5 'B'. The $2,404,551 class B-6 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 4.95% subordination provided by the 2.30% class B-1, 0.90% class B-2, 0.65% class B-3, 0.40% privately offered class B-4, 0.35% privately offered class B-5, and 0.35% privately offered class B- 6. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and CitiMortgage, Inc.'s servicing capabilities as primary servicer. As of the cut-off date, Feb. 1, 2007, the mortgage pool consists of 2,230 conventional, fully amortizing, 10- to 30-year, fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an aggregate principal balance of approximately $686,145,469, located primarily in California (30.51%), New York (8.08%) and Florida (5.67%). The weighted average current loan to value ratio of the mortgage loans is 72.02%. Approximately 66% of the loans were originated under a reduced documentation program. Condo and co-op properties account for 7.16% of the total pool. Cash-out refinance loans and investor properties represent 42.69% and 11.99% of the pool, respectively. The average balance of the mortgage loans in the pool is approximately $307,689. The weighted average coupon of the loans is 6.635% and the weighted average remaining term is 352 months. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The mortgage loans were originated or acquired by CMI and in turn sold to CMSI. A special purpose corporation, CMSI, deposited the loans into the trust, which then issued the certificates. U.S. Bank National Association will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CITIZENS COMMS: Pa. Commission Okays Commonwealth Telephone Buy --------------------------------------------------------------- Citizens Communications Company and Commonwealth Telephone Enterprises Inc. have disclosed that the Pennsylvania Public Utility Commission approved the proposed acquisition of Commonwealth by Citizens during their meeting on Mar. 1, 2007. This completes all required regulatory approvals for the acquisition. The parties anticipate that the transaction will close during the first half of March 2007. However, the transaction is still subject to certain customary closing conditions. About Citizens Communications Based in Stamford, Connecticut, Citizens Communications Company fka Citizens Utilities (NYSE: CZN) -- http://www.czn.net/-- provides phone, TV, and Internet services to more than two million access lines in parts of 23 states, primarily in rural and suburban markets, where it is the incumbent local-exchange carrier operating under the Frontier brand. * * * In December 2006, Standard & Poor's Ratings Services assigned a 'BB+' rating to $400 million of 7.875% senior unsecured notes due 2027 issued by Stamford, Connecticut-based Citizens Communications Co. At the same time, Fitch Ratings assigned a 'BB' rating and Moody's Investors Service assigned Ba2 rating to the company's proposed private placement of $250 million senior unsecured notes due 2027. COLTS 2007-1: Fitch Rates $22 Million Class E Interest Notes at BB ------------------------------------------------------------------ Fitch assigns these ratings to COLTS 2007-1 Ltd. and COLTS 2007-1 LLC: -- $260,000,000 class A Floating Rate Notes due 2021 'AAA'; -- $22,250,000 class B Floating Rate Notes due 2021 'AA'; -- $40,000,000 class C Floating Rate Deferrable Interest Notes due 2021 'A'; -- $21,215,000 class D Floating Rate Deferrable Interest Notes due 2021 'BBB'; and -- $22,250,000 class E Floating Rate Deferrable Interest Notes due 2021 'BB'. CONSTELLATION BRANDS: Fitch Shaves Issuer Default Rating to BB- --------------------------------------------------------------- Fitch Ratings has downgraded its ratings on Constellation Brands Inc. (STZ): -- Issuer Default Rating to 'BB-' from 'BB'; -- Bank credit facility to 'BB-' from 'BB'; -- Senior unsecured notes to 'BB-' from 'BB'; -- Senior subordinated notes to 'B+' from 'BB-'. The Rating Outlook has been revised to Negative. Fitch's ratings apply to STZ's $3.9 billion credit facilities, $1.2 billion of senior unsecured debt, and $250 million of senior subordinated notes. The downgrade and Outlook revision reflect STZ's disclosure that a $500 million share repurchase program has been authorized on top of the pending SVEDKA acquisition. The company's debt levels are expected to be meaningfully higher in fiscal 2008 ending Feb. 29, 2008, than originally anticipated, even considering the Vincor acquisition, and demonstrate management's willingness to operate at higher leverage levels. In addition, ongoing difficulties in its U.K. operations and plans to reduce U.S. distributor inventory levels in 2008 will affect cash flow in fiscal 2008, limiting any improvement in credit measures despite a full-year contribution from Vincor. The company completed the acquisition of Vincor on June 5, 2006 for $1.4 billion following major acquisitions of BRL Hardy Ltd. for $1.2 billion in 2003 and Robert Mondavi Corp. for $1.4 billion in 2004. Since December 2004, STZ has also made many niche acquisitions including minority positions. These acquisitions have provided STZ with leading market positions and a broad portfolio of wine, spirits and beer in diversified global markets. Over the intermediate term, it is likely that the company will continue to make acquisitions that could result in financial and operational stress. Leverage has increased as a result of successive acquisitions financed primarily with debt, with a significant increase in interest expense. STZ has an excellent track record of integrating such acquisitions. The company had applied cash flow to reduce debt, support capital spending, and restructure acquired operations to enhance productivity and was able to sell non-essential assets. This previous pattern of reducing debt prior to taking on additional acquisitions appears to have been broken and the company may be becoming more aggressive regarding stock repurchases. CONSUMERS ENERGY: Earns $184 Million in Year Ended December 31 -------------------------------------------------------------- Consumers Energy Company reported a net income of $184 million on operating revenue of $5.7 billion for the year ended Dec. 31, 2006, compared with a $96 million net loss on operating revenue of $5.2 billion for 2005. The increase in net income is primarily due to the absence of a 2005 impairment charge of $1.184 billion to property, plant, and equipment at the Midland Cogeneration Venture Limited Partnership offset partially by charges of $218 million related to the sale of the MCV Partnership recorded in 2006. Consumers Energy has a 49% interest in the MCV Partnership through CMS Midland Inc. The increase also reflects higher net income from the electric utility business, primarily due to increased revenue resulting from an electric rate order, the expiration of rate caps on residential customers, and the return of former Retail Open Access customers to full-service rates. Partially offsetting these increases are higher operating and maintenance costs at the company's electric utility, and a reduction in net income from the company's gas utility. Lower, weather-driven sales at the gas utility exceeded the benefits from lower operating costs and a gas rate increase authorized by the Michigan Public Service Commission in November of 2006. At Dec. 31, 2006, the company's balance sheet showed $12.8 billion in total assets, $9.8 billion in total liabilities, and $3 billion in total stockholders' equity. Liquidity Resources At Dec. 31, 2006, $94 million consolidated cash was on hand, which includes $57 million of restricted cash. Net cash provided by operating activities was $474 million, a decrease of $166 million versus 2005. This was the result of decreases in the MCV Partnership gas supplier funds on deposit, accounts payable and income tax payments to the parent. These changes were offset partially by a decrease in accounts receivable and reduced inventory purchases. Net cash used in investing activities was $673 million, an increase of $11 million versus 2005. This increase was due to cash relinquished from the sale of assets, an increase in capital expenditures and cost to retire property and a decrease in net proceeds from investments. These changes were partially offset by a decrease in restricted cash and restricted short-term investments. Net cash used in financing activities was $180 million, an increase of $447 million versus 2005. This increase was due to a decrease of $500 million in contributions from the parent and an increase in net retirement of long-term debt. These changes were partially offset by a decrease in common stock dividends payments of $130 million. About Consumers Energy Company Headquartered in Jackson, Michigan, Consumers Energy Company (NYSE: CMS-PA, CMS-PB) -- http://www.consumersenergy.com/-- a wholly owned subsidiary of CMS Energy Corporation, is a combination of electric and natural gas utility that serves more than 3.5 million customers in Michigan's Lower Peninsula. * * * Consumers Energy carries Fitch's 'BB' on its LT Issuer Default Rating, a 'BB+' on its Bank Loan Debt Rating, a 'BB' on its Senior Unsecured Debt Rating, and a 'BB-' on its Preferred Stock Rating. The company also carries Moody's 'Ba2' Preferred Stock Rating. It also carries S&P's 'BB' on both LT Foreign Issuer Credit and LT Local Issuer Credit Ratings. CORRECTIONS CORP: S&P Lifts Corporate Credit Rating to BB from BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings on prison and correctional services company Corrections Corp. of America to 'BB' from 'BB-'. The outlook is stable. "The upgrade reflects CCA's strong operating performance, more favorable industry fundamentals, and improved credit protection measures," said Standard & Poor's credit analyst Mark Salierno. The ratings on CCA reflect the company's narrow business focus, political risk, and leveraged financial profile. These factors are somewhat mitigated by the company's leading position in the highly regulated U.S. private correctional facility management industry and favorable demographic trends. CCA specializes in owning, operating, and managing prisons and other correctional facilities, and provides inmate residential services and prisoner transportation for government agencies. CWALT INC: Fitch Rates $1.29 Million Class B-4 Certificates at B ---------------------------------------------------------------- Fitch rates CWALT, Inc.'s mortgage pass-through certificates, alternative loan trust 2007-6: -- $350.56 million classes A-1 through A-9, X, PO, and A-R certificates (senior certificates) 'AAA'; -- $185,000 class M-A certificates 'AA+'; -- $9.64 million class M certificates 'AA'; -- $3.52 million class B-1 certificates 'A' -- $2.59 million class B-2 certificates 'BBB'; -- $1.84 million privately offered class B-3 certificates 'BB'; -- $1.29 million privately offered class B-4 certificates 'B'. The 'AAA' rating on the senior certificates reflects the 5.50% subordination provided by the 0.05% Class M-A, the 2.60% Class M, the 0.95% Class B-1, the 0.70% Class B-2, the 0.50% privately offered Class B-3, 0.35% privately offered Class B-4 and the 0.35% privately offered Class B-5. Classes M-A, M, B-1, B-2, B-3, and B-4 are rated 'AA+', 'AA', 'A', 'BBB', 'BB' and 'B' based on their respective subordination only. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the rating also reflects the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Countrywide Home Loans Servicing LP, rated 'RMS1-' by Fitch, a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The mortgage pool consists primarily of 40-year conventional, fully amortizing mortgage loans totaling $370,965,058 as of the cut-off date on Feb. 1, 2007, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average original-loan-to-value of 71.58%. The weighted average FICO credit score is approximately 710. Cash-out refinance loans represent 56.3% of the mortgage pool and second homes 1.2%. The average loan balance is $277,046. The three states that represent the largest portion of mortgage loans are California (46.1%), Florida (7.7%), and New York (5.3%). All other states represent less than 5% of the cut-off date pool balance. CWALT purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The Bank of New York will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CWALT INC: Fitch Rates $6.31 Million Class B-4 Certificates at B ---------------------------------------------------------------- Fitch rates CWALT, Inc.'s mortgage pass-through certificates, Alternative Loan Trust 2007-5CB: -- $1,501.46 million classes 1-A-1 through 1-A-37, 2-A-1 through 2-A-7, 1-X, 2-X, PO, and A-R senior certificates 'AAA'; -- $33.92 million class M 'AA'; -- $14.20 million class B-1 'A' -- $10.25 million class B-2 'BBB'; -- $7.10 million privately offered class B-3 'BB'; and -- $6.31 million privately offered class B-4 'B'. The 'AAA' rating on the senior certificates reflects the 4.85% subordination provided by the 2.15% class M, the 0.90% class B-1, the 0.65% class B-2, 0.45% privately offered class B-3, 0.40% privately offered class B-4 and the 0.30% privately offered class B-5 (not rated by Fitch). Classes M, B-1, B-2, B-3, and B-4 are rated 'AA', 'A', 'BBB', 'BB' and 'B' based on their respective subordination only. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the rating also reflects the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Countrywide Home Loans Servicing LP, a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The mortgage pool consists of two loan groups. Loan Group 1 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $1,431,457,250 as of the cut-off date on Feb. 1, 2007, secured by first liens on one-to four- family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average original-loan- to-value of 70.09%. The weighted average FICO credit score is approximately 715. Cash-out refinance loans represent 41.9% of the mortgage pool and second homes 4.4%. The average loan balance is $219,280. The three states that represent the largest portion of mortgage loans are California (22.6%), Florida (10.6%), and Arizona (5.3%). All other states represent less than 5% of the cut-off date pool balance. Loan Group 2 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $146,537,216 as of the cut-off date on Feb. 1, 2007, secured by first liens on one-to four- family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average OLTV of 70.19%. The weighted average FICO credit score is approximately 714. Cash-out refinance loans represent 42% of the mortgage pool and second homes 4.7%. The average loan balance is $226,838. The states that represent the largest portion of mortgage loans are California (22.7%), Florida (7.1%), and Arizona (5.2%). All other states represent less than 5% of the cut-off date pool balance. CWALT purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. CWALT INC: Fitch Rates $1.75 Million Class B-4 certificates at B ---------------------------------------------------------------- Fitch rates CWALT, Inc.'s mortgage pass-through certificates, alternative loan trust 2007-4CB: -- $561.59 million classes 1-A-1 through 1-A-42, 2-A-1 through 2-A-9, 1-X, 2-X, PO, and A-R certificates 'AAA'; -- $9.65 million class M certificates 'AA'; -- $4.68 million class B-1 certificates 'A' -- $3.21 million class B-2 certificates 'BBB'; -- $2.34 million privately offered class B-3 certificates 'BB'; and -- $1.75 million privately offered class B-4 certificates 'B'. The 'AAA' rating on the senior certificates reflects the 4.00% subordination provided by the 1.65% Class M, the 0.80% Class B-1, the 0.55% Class B-2, the 0.40% privately offered Class B-3, 0.30% privately offered Class B-4, and the 0.30% privately offered Class B-5 (not rated by Fitch). Classes M, B-1, B-2, B-3, and B-4 are rated 'AA', 'A', 'BBB', 'BB' and 'B' based on their respective subordination only. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the rating also reflects the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the master servicing capabilities of Countrywide Home Loans Servicing LP, rated 'RMS1-' by Fitch, a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The mortgage pool consists of two loan groups. Loan Group 1 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $527,999,353 as of the cut-off date on Feb. 1, 2007, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average original-loan-to-value of 67.35%. The weighted average FICO credit score is approximately 725. Cash-out refinance loans represent 38.3% of the mortgage pool and second homes 2.6%. The average loan balance is $230,165. The three states that represent the largest portion of mortgage loans are California (29.5%), Florida (6.9%), and Washington (5.0%). All other states represent less than 5% of the cut-off date pool balance. Loan Group 2 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $56,996,299 as of the cut-off date on Feb. 1, 2007, secured by first liens on one- to four- family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average OLTV of 77.51%. The weighted average FICO credit score is approximately 691. Cash-out refinance loans represent 29.9% of the mortgage pool and second homes 6.1%. The average loan balance is $179,234. The states that represent the largest portion of mortgage loans are Florida (13.2%), California (10.5%), Texas (7.3%), Illinois (6.9%), and New Jersey (5.5%). All other states represent less than 5% of the cut-off date pool balance. CWALT purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The Bank of New York will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CWMBS INC: Fitch Rates $1.1 Million Class B-4 Certificates at B --------------------------------------------------------------- Fitch rates CWMBS, Inc.'s mortgage pass-through certificates, CHL Mortgage Pass-Through Trust 2007-3: -- $1,101,103,960 classes A-1 through A-44, X, PO, and A-R senior certificates 'AAA'; -- $28,674,500 class M 'AA'; -- $6,881,900 class B-1 'A'; -- $4,588,000 class B-2 'BBB'; -- $2,293,900 class B-3 'BB'; and -- $1,147,000 class B-4 'B'. The 'AAA' rating on the senior certificates reflects the 4% subordination provided by the 2.50% class M, the 0.60% class B-1, the 0.40% class B-2, the 0.20% privately offered class B-3, the 0.10% privately offered class B-4 and the 0.20% privately offered class B-5 (not rated by Fitch). Classes M, B-1, B-2, B-3, and B-4 are rated 'AA', 'A', 'BBB', 'BB' and 'B' based on their respective subordination only. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the rating also reflects the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Countrywide Home Loans Servicing LP, a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The mortgage pool consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $1,146,983,296 as of the cut-off date on Feb. 1, 2007, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average original loan-to-value ratio of 73.01%. The weighted average FICO credit score is approximately 744. Cash-out refinance loans represent 31.0% of the mortgage pool and second homes 5.6%. The average loan balance is $625,059. The states that represent the largest portion of mortgage loans are California (41.2%) and Virginia (5.1%). All other states represent less than 5% of the pool as of the cut-off date. CWMBS purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The Bank of New York will serve as trustee. DAIMLERCHRYSLER AG: Blackstone is Lead Contender for U.S. Unit -------------------------------------------------------------- Blackstone Group is the leading contender to buy DaimlerChrysler AG's Chrysler Group, Reuters reports, citing The Detroit News. According to the report, the private equity firm is moving forward with a detailed analysis of Chrysler's finances and operations with an eye toward making a formal bid. Other possible buyers to the German automaker's troubled U.S. unit include Cerberus Capital Management, Reuters said, quoting The Detroit News. Reuters relates that two sources close to the sales said last week that a detailed sales prospectus for Chrysler Group bidders should be completed soon, the first step toward a potential sale that would unwind the 1998 merger that created DaimlerChrysler. Private equity firms are expected to be among the potential bidders for Chrysler that would consider the automaker's sale- related documents, the sources told Reuters. Lower February Sales As reported in the Troubled Company Reporter on Mar. 2, 2007, DaimlerChrysler AG's Chrysler Group reported sales for February 2007 of 174,506 units; down 8% compared with February 2006 with 190,367 units. All sales figures are reported unadjusted. "In a generally soft market environment in February, the Chrysler Group had good traffic and solid customer interest especially for our newly launched, fuel efficient models like the Dodge Avenger, Dodge Caliber, and Jeep(R) Compass. Also, the Jeep Wrangler had its best February ever," Chrysler Group Vice President for Sales and Field Operations Steven Landry said. The Dodge Avenger posted sales of 5,205 units. The vehicle is one of the Chrysler Group's five new models that achieve 30 miles per gallon or better in highway driving. Jeep Wrangler and Wrangler Unlimited continued to post strong sales in February with 9,240 units, a rise of 63% over February 2006 sales of 5,673 units. February 2007 marks the best month of February in the history of the Jeep Wrangler. Sales of the Jeep Compass increased 3% over the previous month with 4,071 units compared with 3,965 units in January 2007. The Dodge Caliber finished February with sales of 9,900 units, an increase of 14% compared with last month with 8,672 units. Dodge Ram pickup sales continued to increase after an already strong January and posted sales of 28,633 units, up by 17% over the previous month with 24,379 units. "Building on the sales momentum of the Dodge Ram in the first two months of 2007, March will be the Chrysler Group's 'National Truck Month.' "Our marketing approach will primarily focus on our biggest volume model, the Dodge Ram, and tie it with the value of one of our most successful product features, the legendary HEMI(R) engine," Chrysler Group Vice President for Sales and Dealer Operations Michael Manley said. "Customers have the opportunity to get a no-extra-charge HEMI engine upgrade for the Dodge Ram 1500 as well as the Dodge Durango. We are confident that 'National Truck Month' will resonate well with our customers." Chrysler Group finished the month with 492,230 units of inventory, or a 68-day supply. Inventory is down by 8% compared with February 2006 when it was at 532,534 units. About DaimlerChrysler Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The company's worldwide locations are located in: Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam and Australia. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DAKOTA ARMS: Court Approves Sale of Business to Technology Funding ------------------------------------------------------------------ Dakota Arms Inc. obtained authority from the U.S. Bankruptcy Court for the District of Minnesota to sell substantially all of its assets to Technology Funding Group LLC for $1.12 million in cash plus the assumption of certain debt, Bill Rochelle of Bloomberg News reports. According to the source, Technology Funding will subordinate its $8.9 million unsecured claim to the claims of other unsecured creditors and provide funding to continue a lawsuit aiming void the security interest held by First Western Securities LLC on the grounds that it was not properly perfected. After expenses, Technology Funding will split recoveries in the lawsuit, giving creditors 60% and keeping the rest, the report said. Alliance Management Inc. serves as the Debtor's investment banker in the sale of its assets. For the engagement, Alliance Management will receive a $10,000 retainer, and a success fee of 3.00% of the purchase price paid for Debtor or its assets, provided that purchase price equals or exceeds $3 million. The firm's services will also be paid a straight hourly rate of $325. Headquartered in Sturgis, South Dakota, Dakota Arms Inc. sold guns and firearms. The company filed a chapter 11 petition on July 6, 2006 (Bankr. D. Minn. Case No. 06-41315). Faye Knowles, Esq., and Ryan Murphy, Esq., at Fredrikson & Byron, PA represent the Debtor in its restructuring efforts. Henry T. Wang, Esq., at Gary Plant Mooty Mooty & Bennett PA, and Chrystal Donnell, Esq., at Faegre & Benson serve as counsel to the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it estimated assets and debts between $1 million to $10 million. DEAN FOODS: Discloses $15 Per Share Special Dividend Plan --------------------------------------------------------- Dean Foods Company reported plans to return $15.00 per share to shareholders through a one-time special cash dividend totaling approximately $2 billion. The special dividend will be financed by a recapitalization of the company's balance sheet through $4.8 billion in new senior secured credit facilities. "Dean Foods is an organization with strong momentum as reflected in our 2006 results and positive outlook for 2007," said Gregg Engles, Chairman and Chief Executive Officer. "Over the past several years we've consolidated the industry and developed a leading market position through significant strategic acquisitions and investments in building out our branded portfolio. With this platform in place, we are now entering the next phase of our evolution. Over the next few years, we will be focused primarily on leveraging our scale to drive internal growth through maximizing productivity and efficiencies across our business." Mr. Engles continued, "Given our internal focus, our strong cash flows, and the incredible liquidity and flexibility of today's debt capital markets, the appropriate finance decision for Dean Foods today is to increase our exposure to the debt markets and return equity capital to shareholders, while enabling them to continue to participate in the Company's future performance and growth." The special dividend declared by Dean Foods' Board of Directors is payable on April 2, 2007, to shareholders of record as of March 27, 2007. The dividend is subject to the completion of the company's new senior secured credit facilities. Dean Foods common stock will start trading on an ex-dividend basis beginning on April 3, 2007, the day after the payment date, in accordance with NYSE rules. Shareholders who sell their shares prior to or on the payment date of April 2, 2007 will also be selling their right to receive the special cash dividend. Shareholders are advised to contact their financial advisor before selling their shares. The total aggregate size of the dividend will depend upon the number of shares outstanding on the March 27, 2007 record date. The company will distribute $15.00 per share to shareholders as of the record date. As of Feb. 23, 2007, Dean Foods had 128.95 million shares outstanding, which would result in a total dividend of $1.93 billion. "Given our financial and business characteristics, Dean Foods is ideally positioned to take advantage of current attractive credit market conditions to recapitalize our balance sheet and lower our total cost of capital," said Jack Callahan, Executive Vice President and Chief Financial Officer. "After a thorough analysis, we have targeted an initial leverage level that we believe is a prudent and efficient use of our balance sheet while preserving flexibility to meet our capital needs and growth objectives, including pursuing highly compelling tuck-in acquisitions." For U.S. federal income tax purposes, shareholders will receive a Form 1099-DIV in early 2008 to notify them of the division between the dividend and non-dividend portions of the special dividend. The process of determining these amounts, which entails a comprehensive review and analysis of the Company's history, is well underway. Shareholders are encouraged to consult with their own tax and financial advisors regarding the implications of this special dividend. The $4.8 billion fully underwritten financing package is being arranged by JPMorgan Securities, Bank of America Securities LLC, and Wachovia Capital Markets. Completion of the facility, which will replace the company's current facility, is subject to customary closing conditions. The new facility is currently planned to consist of a combination of a: * $1.5 billion 5-year senior secured revolving credit facility, * $1.5 billion 5-year senior secured term loan A, and * $1.8 billion 7-year senior secured term loan B. The company will also be replacing its existing receivables facility with a new secured $500 million facility. The company's publicly traded notes will remain outstanding without modification. The company had disclosed on Nov. 29, 2006, that its Borad of Directors authorized an increase in the share repurchase program of up to $300 million, of which approximately $220 million remains. As a result of the recapitalization and one-time cash dividend distribution, the company does not anticipate making additional stock repurchases in the near term. Banc of America Securities LLC is acting as financial advisor to Dean Foods in this transaction. "For the first quarter, which will conclude before the recapitalization becomes effective, we continue to expect adjusted earnings per share of between $0.44 and $0.46," said Mr. Callahan. "For the full year 2007, we continue to expect operating profit growth of around 7%, consistent with our previous guidance. However, with the increase in interest expense we are taking on for the remainder of the year, we now expect full year adjusted earnings of between $1.72 and $1.78 per share for 2007, depending, in part, on the finalization of the new capital structure." The adjustments to the earnings per share calculation exclude the net impact of facility closing costs, reorganizations, non-recurring charges and discontinued operations. About Dean Foods Dean Foods Company (NYSE: DF) -- http://www.deanfoods.com/-- is one of the leading food and beverage companies in the United States. Its Dairy Group division is the largest processor and distributor of milk and other dairy products in the country, with products sold under more than 50 familiar local and regional brands and a wide array of private labels. The Company's WhiteWave Foods subsidiary markets and sells a variety of well- known dairy and dairy-related products, such as Silk(R) soymilk, Horizon Organic(R) milk and other dairy products and International Delight(R) coffee creamers. WhiteWave Foods' Rachel's Organic(R) brand is the largest organic milk brand and third largest organic yogurt brand in the United Kingdom. DEAN FOODS: Special Dividend Plan Cues S&P to Lower Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Dean Foods Co. and its wholly owned subsidiary, Dean Holding Co., including its long-term corporate credit rating to 'BB' from 'BB+', following the company's report of a one-time special cash dividend of $15.00 per share or approximately $2 billion. A new $4.8 billion senior secured credit facility will be used to pay the special dividend. Standard & Poor's assigned its loan and recovery ratings to Dean Foods' proposed $4.8 billion senior secured credit facility. The credit facility was rated 'BB' with a recovery rating of '2', indicating an expectation for substantial recoveryof principal in the event of a payment default. The rating is based on preliminary documents and is subject to review of the final documentation. Upon closing of this transaction, the ratings on Dean Foods' existing $3.0 billion senior secured credit facility will be withdrawn. The senior unsecured debt is rated two notches below the corporate credit rating, reflecting the sizeable amount of secured debt. The outlook is stable. Pro forma for the transaction, Dallas, Texas-based Dean Foods will have about $5.3 billion in debt outstanding. "The downgrade reflects a more aggressive financial policy, given the company's willingness to fund this large dividend with 100% debt financing, and a weaker financial profile. Pro forma for the transaction, credit metrics are weak for the rating, but we believe with the company's cash-generating ability, Dean Foods will quickly improve credit protection measures to levels more appropriate for the rating in the next three years," said Standard & Poor's credit analyst Jayne Ross. DELHAIZE AMERICA: Good Performance Cues S&P's Positive Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Delhaize America Inc. to positive from stable reflecting improving financial measures, a trend that the rating agency anticipates will continue. At the same time, Standard & Poor's affirmed the company's 'BB+' corporate credit and other senior unsecured ratings. "The company's debt protection measures have been improving slowly, though steadily, but are beginning to approach levels that are considered characteristic of investment grade," said Standard & Poor's credit analyst Gerald Hirschberg. Given Delhaize's good market position and efficient operations, Standard & Poor's expects that this improving trend will continue in 2007 despite a challenging environment for U.S. supermarkets. If the company maintains its good business position and manages to improve FFO to debt to above 25% and debt to EBITDA to 2.5x, Standard & Poor's could raise the rating. An outlook revision back to stable is unlikely, but could develop if business and financial measures do not continue to improve. The rating on Delhaize America Inc. is based on its participation in the highly competitive supermarket industry, regional concentration, smaller scale relative to major operators, and somewhat weak credit protection measures. These factors are mitigated by the good track record of its core business, Food Lion (80% of the store base); increasing format diversification; and above-average operating margins. "Industry pressures include intensified competition from both traditional and nontraditional food retailers, such as supercenters, which are rapidly expanding their presence, and overall soft consumer spending for groceries," said Mr. Hirschberg. Salisbury, North Carolina-based Delhaize America operates about 1,540 supermarkets on the East Coast primarily under the Food Lion, Hannaford, Kash n' Karry, and Sweetbay banners. Sales and profit have been pressured by increasing competition, although Delhaize has fared better than most, with satisfactory same-store sales and operating margins near the top of the range of rated supermarkets. Delhaize's comparable-store sales grew 1.1% in 2005, following 1.5% growth in 2004. The company's lease-adjusted operating margin approximated 9.8% for the l2 months ended September 2006, comparing favorably with margins of about 7% for rated U.S. supermarkets. DIAMOND ENT: Dec. 31 Balance Sheet Upside-Down by $7.2 Million -------------------------------------------------------------- Diamond Entertainment Corp. reported a net loss of $5.5 million on net sales of $874,268 for the third quarter ended Dec. 31, 2006, compared with a net loss of $221,099 on net sales of $1.6 million for the same period in 2005. The decrease in net sales was primarily due to the industry shift from videocassette programs to DVD programs together with decreased orders from major customers for DVD and videocassette products. Operating loss was approximately $148,000 as compared to an operating loss of approximately $221,000 for the same period last year. The decrease in operating loss of approximately $73,000 arose primarily from a decrease in gross profit of approximately $305,000 and an increase in operating expenses of approximately $378,000. The net loss was primarily due to interest expense - derivatives and warrants of $6.7 million, versus zero in 2005, in connection with the company's convertible notes and warrants outstanding as of Dec. 31, 2006. At Dec. 31, 2006, the company's balance sheet showed total assets of $3.1 million and total liabilities of $10.3 million, resulting in a total stockholders' deficit of $7.2 million. The company's balance sheet at Dec. 31, 2006, also showed strained liquidity with current assets of $2.7 million available to pay current liabilities of $10.3 million. Full-text copies of the company's consolidated financial statements for the quarter ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1aae Going Concern Doubt Pohl, McNabola, Berg and Company, LLP, raised substantial doubt about Diamond Entertainment's ability to continue as a going concern after auditing the company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the company's substantial losses and negative cash flows from operations for the year ended March 31, 2006. About Diamond Entertainment Based in Walnut, California, Diamond Entertainment Corporation (OTC BB: DMEC.OB) dba e-DMEC, markets and sells a variety of DVD and videocassette titles to the budget home video and DVD market. DOBSON COMMUNICATIONS: Earns $12.7 Million in Year Ended Dec. 31 ---------------------------------------------------------------- Dobson Communications Corp. reported net income of $12,781,157 for the year ended Dec. 31, 2006, compared with net loss of $121,610,063 for the year ended Dec. 31, 2005. Total operating revenues for the year 2006, of $1,271,096,000, up from $1,179,462,000 for the previous year. The increase in total operating revenues in 2006 was driven by increases in service revenues from $858,385,000 in 2005 to $918,785,000 in 2006, roaming revenues from $258,407,000 in 2005 to $283,277,000 in 2006, and equipment and other revenues from $62,670,000 in 2005 to $69,034,000 in 2006. The company's primary operating expense categories include cost of service, cost of equipment, marketing and selling costs, general and administrative costs, depreciation, and amortization and gain on disposition of operating assets. Total cost of service for 2006 and 2006 were $340,943,000 and $296,594,000, respectively. For the year ended Dec. 31, 2006, the company's cost of equipment and marketing and selling costs increased compared to the year ended Dec. 31, 2005, while its general and administrative costs decreased in 2006, compared to 2005. Depreciation and amortization expense has remained fairly constant for the years ended Dec. 31, 2006, 2005 and 2004. Gain on disposition of operating assets for the year ended Dec. 31, 2006 and 2005 was a result of the sale and leaseback of 564 of the company's towers during 2005. On June 30, 2005, the company recognized $900,000 of the gain from the transactions and deferred the remaining gain of $62.7 million, which will be recognized over the lease term of ten years. The company expects to recognize a gain of approximately $6.3 million per year over the original life of the lease. As of Dec. 31, 2006, the company listed $3,494,752,259 in total assets of which $285,680,630 is current, $252,090,884 in total current liabilities, $2,605,105,934 in credit facilities and debt securities, $241,451,899 in mandatorily net redeemable preferred stock, $6,465,131 in minority interests, $62,357,050 in deferred gain on disposition of operating assets and other long-term liabilities, and $191,585,972 in total stockholders' deficit. Its December 31 balance sheet also showed 1,249,986,135 in accumulated deficit and $1,663 in accumulated other comprehensive loss. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1ab8. About Dobson Communications corp. Headquartered in Oklahoma City, Dobson Communications Corp. (Nasdaq: DCEL) -- http://www.dobson.net/-- provides wireless phone services to rural and suburban markets in the U.S. It owns wireless operations in 16 states and has two wholly owned subsidiaries, Dobson Cellular Systems, Inc. and American Cellular Corp. * * * As reported by the Troubled Company Reporter on March 1, 2007, Moody's Investors Service upgraded the corporate family and probability of default rating of American Cellular Corp.'s parent, Dobson Communications Corp. to B2 from B3 while raising its speculative grade liquidity rating to SGL-1 from SGL-2. EMI GROUP: Junks Warner's $4.1 Billion Takeover Bid --------------------------------------------------- The Board of Directors of EMI Group plc rejected a $4.1 billion non-binding takeover bid from Warner Music Group Corp. saying that the price of 260 pence per share in cash for EMI is inadequate. The Board concluded that "it is not in the best interests of EMI shareholders to entertain a pre-conditional offer which would entail prolonged regulatory uncertainty and unacceptable operational risk at a critical time for the Company." There can be no certainty that the approach by WMG will lead to an offer being made for the Company or as to the terms on which any offer might be made. EMI remains focused on maximizing the performance of the business including implementation of the restructuring program disclosed on January 12. As reported in the TCR-Europe on Feb. 27, Warner Music approached EMI on Jan. 24, after it obtained the support of Brussels-based Impala, a trade group for independent European record labels ending its opposition to a Warner-EMI merger, reports say. WMG clarified Feb. 21 that any possible takeover offer for EMI Group PLC is likely to be solely in cash. In 2006, EMI and Warner were locked in a GBP2.3 billion takeover battle. The deal was halted in June 2006 following the annulment of the 2004 Sony-BMG tie-up by a European Court. Analysts believed that an EMI-Warner merger could generate cost savings of about GBP150 million a year. About Warner Music Group Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- became the only stand-alone music company to be publicly traded in the United States in May 2005 that operates through numerous international affiliates and licensees in more than 50 countries. Warner Music is home to a collection of record labels in the music industry including Asylum, Atlantic, Bad Boy, Cordless, East West, Elektra, Lava, Maverick, Nonesuch, Reprise, Rhino, Rykodisc, Sire, Warner Bros., and Word. About EMI Group Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries and with licensees in a further 20. The group has operations in China, Brazil, and Hungary. The group employs over 6,600 people. Revenues in 2005 were near GBP2 billion and operating profit generated was over GBP225 million. EMI Music operates the world famous recording facilities Abbey Road Studios in London and Capitol Studios in Los Angeles. * * * As reported in the Troubled Company Reporter on Feb. 7, 2007, Standard & Poor's Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on U.K.-based music group EMI Group PLC to 'BB-' from 'BB'. The 'B' short-term rating was affirmed. At the same time, the long-term corporate credit rating and debt ratings were put on CreditWatch with negative implications. ENRON CORP: Court Okays $13.5 Million Kirkland & UC Settlement -------------------------------------------------------------- The Honorable Melinda Harmon of the U.S. Bankruptcy Court for the Southern District of Texas has approved a $13,500,000 settlement agreement between University of California Board of Regents and Kirkland & Ellis LLP, Bloomberg News reports. The UC Regents, who lost about $145,000,000 on Enron Corp. investments, are lead plaintiffs in the Enron securities litigation, Bloomberg News states. "We're pleased with this latest success in recovering investments lost in the Enron fraud," said Trey Davis, spokesman for the UC Regents, according to Bloomberg News. "We will continue to press ahead to recover the most possible for all victimized investors." The remaining defendants in the Class Action Lawsuit include Enron's former lenders, Merrill Lynch & Co., Credit Suisse Group, and Barclays Plc. Judge Harmon rescheduled the April 9 trial to April 16 after refusing to delay the case indefinitely while an appeals court rules whether shareholders can continue to sue the Enron Lenders, Bloomberg News reports. Certain investors are also pressing charges against other former Enron lenders, including Toronto Dominion Bank and Royal Bank of Scotland Group Plc. However, the claims have not yet been scheduled for trial, Bloomberg News says. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 187 and 183; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ERIC NADEL: Case Summary and Largest Unsecured Creditor ------------------------------------------------------- Debtor: Eric J. Nadel 3201 Northeast 183 Street, Suite 1506 Aventura, FL 33160 Bankruptcy Case No.: 07-11419 Chapter 11 Petition Date: March 2, 2007 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: John M. Cruz II, Esq. 901 South State Road 7, Suite 360 Hollywood, FL 33023 Tel: (954) 965-0511 Fax: (954) 965-0499 Estimated Assets: Unknown Estimated Debts: $10 Million to $50 Million Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Raymond and Barbara Tomzak $21,000,000 c/o Stanley M. Sacks, Esq. 633 South Andrews Avenue Fort Lauderdale, FL 33301 EXCEPTIONAL TECH: Starts Distribution Under Liquidation Plan ------------------------------------------------------------ Exceptional Technologies Fund 5 Inc. will proceed with the Plan of Liquidation approved by its shareholders on Dec. 20, 2006. As reported in Troubled Company Reporter on Dec. 22, 2006, the Plan of Liquidation contemplates the distribution of the company's investment assets to its shareholders, the delisting of the common shares of the company from the TSX Venture Exchange and, ultimately, the voluntary dissolution of the company. The Plan's relevant dates are: * Monday, March 12, 2007 - Halt in Trading; * Thursday, March 15, 2007 - Record Date for Distribution of Investment Assets; and * March 30, 2007 - Distribution Date. Only shareholders of record as of the Record Date will receive a distribution on the Distribution Date. It is intended that shares of the company will cease to trade on the Exchange as of Monday, March 12, 2007, and that delisting of the shares will occur thereafter. The company will be dissolved on completion of the Plan of Liquidation. There are currently 5,949,011 issued and outstanding common shares of the company. Investment Assets To Be Distributed The company's current portfolio investments, and the portion of such investments to be distributed on a pro-rata basis to shareholders as of the Record Date, are as follows: Name of Securities Securities to be Porfolio Held by Distributed on the Company ExFund 5 Distribution Date -------- ---------- ------------------ TIR Systems Ltd. 1,225,000 $1,175,000 TIR Shares Common Shares Vigil Health 4,010,058 100% of the Vigil Solutions, Inc. Common Shares Shares Idelix Software 714,286 $100% of Idelix Shares, Inc. Common Shares through distribution of 350,000 Sieres 1 Idelix Securities Preferred Shares Receipts representing a 200,000 Series 2 beneficial interest in Preferred Shares the Idelix Shares Tantalus Systems 154,166 100% of Tantalus Shares, Corporation Common Shares through distribution of 264,898 Tantalus Securities Preferred Shares Receipts representing a Beneficial interest in The Tantalus Shares Other Relevant Information In order to complete the Plan of Liquidation on a timely basis, shareholders of the company will be receiving beneficial (but not legal or registered) ownership of the company's investment holdings in the non-publicly traded securities of Idelix Software Inc. and Tantalus Systems Corp. held by the company. Accordingly, shareholders of the company as of the Record Date will receive their pro-rata share of "receipts" evidencing beneficial ownership in the securities of Idelix held by the company and their pro-rata share of "receipts" evidencing beneficial ownership in the securities of Tantalus held by the company. Discovery Capital Management Corp., a wholly owned subsidiary of Discovery Capital Corporation and the former manager of the Company, will act as custodian of the Idelix Securities Receipts and the Tantalus Securities Receipts until such time as there is a liquidity event in either Idelix or Tantalus that results in the Manager receiving cash or securities that are freely tradable, for distribution when such cash or securities are available, to shareholders of the company as of the Record Date. For these purposes, the Manager will obtain from the company's transfer agent a list of shareholders of record, as of the Record Date, and maintain this list for future distribution purposes. The services of the company's transfer agent, Computershare Investor Services Inc., will be terminated upon dissolution of the company. The Manager will also hold in custody 50,000 shares of TIR Systems Ltd. in order to defray the current working capital deficiency of the Company (which includes payment of approximately $63,000 in management fees up to Dec. 31, 2006, the final date for which these fees were payable, as well as a liability under the Small Business Venture Capital Act to repay tax credits of approximately $21,000), as well as the costs of completing the Plan of Liquidation. In addition, certain miscellaneous debt instruments with two former venture investments, currently totaling less than approximately $40,000, will also be held in custody to defray such expenses. As a result of the above and the distribution of all other investment assets of the company, it is not presently anticipated that any cash will form part of the Liquidating Distribution. Tax Information The exact income tax consequences of the Plan of Liquidation to each shareholder of the company will depend on each Shareholder's particular circumstances. Management strongly recommends that all shareholders of the company consult their own tax advisors for personal tax advice on the tax consequences of the Plan of Liquidation, and to do so prior to the Record Date. The following general information is provided for the assistance of shareholders, but should not be relied upon as tax advice for individual circumstances: An RRSP or RRIF trustee acting on behalf of an RRSP or RRIF that is a shareholder of the company, may decide that it cannot continue to hold the Idelix Securities Receipts and the Tantalus Securities Receipts in the RRSP or RRIF. In such event, the Trustee may distribute the Securities Receipts out to the annuitant or beneficiary of such RRSP. This will result in a taxable distribution to the recipient in an amount equal to the value of the Securities Receipts distributed. Although management understands that the Securities Receipts may be qualified investments for RRSPs and RRIFs, it will not be feasible, or even possible, for management to satisfy each Trustee that the Securities Receipts will be qualified investments. If the Securities Receipts are not accepted as qualified investments, the annuitant or beneficiary may be subject to income tax. Accordingly, individuals who are annuitants or beneficiaries of RRSPs or RRIFs which are shareholders should consult their tax advisors to determine the tax consequences to them of receiving a distribution from their RRSPs or RRIFs of Securities Receipts, or to determine whether it is possible and appropriate, prior to the Record Date, to "swap" their ExFund 5 shares out of their RRSPs or RRIFs in order that the Securities Receipts are received, at the outset, in a non-RRSP or RRIF account. Exceptional Technologies Fund 5 (VCC) Inc.'s (TSX VENTURE:XF) primary business objective was to achieve capital appreciation through investing in a portfolio of securities of technology eligible small businesses which qualify as "eligible investments" under the Small Business Venture Capital Act. FEDERAL-MOGUL: Ernst & Young Raises Going Concern Doubt ------------------------------------------------------- Ernst & Young LLP, in Detroit, Michigan, expressed substantial doubt about Federal-Mogul Corp.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to uncertainties inherent in the bankruptcy process, referring to Federal-Mogul Corp. and its wholly-owned United States subsidiaries' voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy code, and the joint filing of certain Federal-Mogul subsidiaries in the United Kingdom for Chapter 11 and Administration under the United Kingdom Insolvency Act of 1986. Federal-Mogul reported a net loss of $549.6 million on net sales of $6.326 billion for the year ended Dec. 31, 2006, compared with a net loss of $334.2 million on net sales of $6.286 billion for the year ended Dec. 31, 2005. Of the $40 million increase in net sales in 2006, $33 million is due to favorable foreign currency. Included in Federal-Mogul's loss before income taxes for 2006 is a charge of $501 million associated with the settlement of the U.K. pension plans. Gross margin increased by $64 million in 2006, primarily due to productivity and restructuring initiatives and the reduced pension expense of $21 million associated with the settlement of the U.K. pension plants, partially offset by the increase in raw material costs over the prior year. Results for the full year were also impacted by reduced selling, general and administrative expenses, reduced charges related to asset impairments, reduced costs associated with the company's Chapter 11 proceedings, and higher average interest rates. "We are pleased with the progress achieved in 2006 and the company's improvement in operational performance. We maintain our focus on the implementation of our global profitable growth strategy to provide leading products, services and innovative technology that create value for our customers worldwide while satisfying our employee and stakeholder expectations," said Chairman, President and Chief Executive Officer Jos, Maria Alapont. "Federal-Mogul reached resolution of the Company Voluntary Arrangements for emergence of the United Kingdom administrated companies with activities in the Americas, Europe and Asia- Pacific, and has received U.S. Bankruptcy Court approval on the supplemental disclosure statement of our plan of reorganization. These are significant milestones toward exit from Chapter 11 and our commitment to confirm, on the hearing date set for May 8, 2007, our restructuring plan to emerge." At Dec. 31, 2006, the company's balance sheet showed $7.179 billion in total assets, $8.872 billion in total liabilities, $54.2 million in minority interest in consolidated subsidiaries, resulting in a $1.747 billion total stockholders' deficit. Cash Flows Net cash used by operating activities totaled $422 million for the year ended Dec. 31, 2006, compared to net cash provided by operating activities of $318 million for 2005. Net cash flow used by investing activities was $239 million in 2006, compared to net cash flow used by investing activities of $160 million in 2005. Cash flow provided from financing activities was $608 million during 2006, compared to cash flow used by financing activities of $406 during 2005. This change primarily resulted from the release of $762 million in restricted cash in 2006, partially offset by net payments on the company's available credit facilities. About Federal-Mogul Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some $6 billion. The company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. FORD MOTOR: Signs Deal Selling APCO to Trident IV -------------------------------------------------- Ford Motor Company has entered into a definitive agreement to sell Automobile Protection Corporation to Trident IV, L.P., a private equity fund managed by Stone Point Capital LLC. The transaction is the result of the review of strategic options for the business announced by Ford on Oct. 11, 2006. The sale is expected to close during the second quarter and is subject to customary closing conditions, including applicable regulatory approvals. Terms and conditions specific to the agreement are not being disclosed at this time. Last week, Ford estimated $11,182 million in total life-time costs for restructuring actions. Of the total $11,182 million of estimated costs, Ford says that $9,982 million has been accrued in 2006 and the balance, which is primarily related to salaried personnel-reduction programs, is expected to be accrued in the first quarter of 2007. The company expects a curtailment gain for other postretirement employee benefit obligations related to hourly personnel separations that occur in 2007, which gain the company expects to record in 2007. Of the estimated costs, those relating to Job Bank Benefits and personnel-reduction programs also constitute cash expenditure estimates. The restructuring cost estimates relate to the automaker's previously announced commitment to accelerate its restructuring plan, referred to as Way Forward plan. The "Way Forward" plan includes closing plants and laying off up to 45,000 employees. About APCO APCO, a wholly owned subsidiary of Ford Motor Company, was purchased by Ford Motor Company in July 1999. APCO offers vehicle service contracts and related after-market products to dealers of all makes and models. About Trident Stone Point Capital is a global private equity firm based in Greenwich, Conn., that manages the Trident Funds and has raised more than $8 billion in committed capital to make investments in the global insurance and financial services industries. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury, and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4'. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3 billion of senior convertible notes due 2036. GAP INC: Earns $219 Million for Period Ended February 3 ------------------------------------------------------- Gap Inc. earned $219 million on net revenues of $4.9 billion for the 14 weeks ended Feb. 3, 2007, compared to net income of $337 million on $4.8 billion of net revenues for the 13 weeks ended Jan. 28, 2006. The company also earned $778 million on $15.9 billion of net revenues for the 53 weeks ended Feb. 3, 2007, compared to a net income of $1.1 billion on net revenues of $16 billion for the 52 weeks ended Jan. 28, 2006. The company noted that fiscal year 2006 had 53 weeks versus 52 weeks in fiscal 2005. "We were not satisfied with our 2006 results and are taking action," said Bob Fisher, interim president and chief executive officer of Gap Inc. "In 2007, we are focusing on three priorities: fixing our core business by creating the right product and outstanding store experiences; retaining and developing the best talent in the industry; and examining our organizational structure to ensure that we enable our brands to make decisions and effect change more efficiently. I am confident that we are taking the necessary actions to revitalize our brands." Since January 2007, the company has taken the following actions: * Leadership changes. The company's board of directors announced a change in the chief executive officer position. Mr. Fisher, the company's current non-employee chairman of the board of directors, stepped in to serve as interim president and chief executive officer. The company is in the final stages of selecting a search firm for a permanent chief executive officer. In addition, the company announced Marka Hansen, former president of Banana Republic, as the new president of Gap Brand and Michael Cape as the new executive vice president of marketing for Old Navy. * Conversion of Old Navy's Outlet stores into Old Navy stores. In order to drive improved returns and leverage its existing retail channel, the company made the decision in February to convert its 45 Old Navy Outlet stores into stand-alone Old Navy stores. The company expects the conversion to be completed by October 2007. * Closure of distribution facility. As part of the company's on-going assessment of its network capacity, it made the decision in February to close a distribution facility in Hebron, Kentucky. * Closure of Forth & Towne. After thorough analysis revealed that the concept was not demonstrating enough potential to deliver acceptable long-term return on investment, the company announced on Feb. 26, 2007 that it would close Forth & Towne. The company plans to close all 19 stores by the end of June 2007. Net sales for the 14 weeks ended Feb. 3, 2007 rose 2% to $4.9 billion, compared with $4.8 billion for the 13 weeks ended Jan. 28, 2006. Comparable store sales for the 13 weeks ended Jan. 27, 2007 decreased 7%, compared with a decrease of 6% for the fourth quarter of the prior year. Net sales for the 53 weeks ended Feb. 3, 2007 were $15.9 billion. Net sales were $16 billion for the 52 weeks ended Jan. 28, 2006. Comparable store sales for the 52 weeks ended Jan. 27, 2007 decreased 7%, compared with a decrease of 5% in the prior year. The company's online sales for the 53 weeks ended Feb. 3, 2007 increased 23 percent compared with the 52 weeks ended Jan. 28, 2006. About Gap Inc. Headquartered in San Francisco, California, Gap Inc. (NYSE: GPS) -- http://www.gapinc.com/-- is an international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic, Old Navy, Forth & Towne and Piperlime brand names. Gap Inc. operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Ireland and Japan. In addition, Gap Inc. is expanding its international presence with franchise agreements for Gap and Banana Republic in Southeast Asia and the Middle East. * * * As reported in the Troubled Company Reporter on Feb. 7, 2007, Moody's Investors Service downgraded Gap Inc. senior unsecured notes to Ba1 and assigned a corporate family rating of Ba1 and speculative grade liquidity rating of SGL-1. The rating outlook is stable. GARDNER ZINE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Gardner Zine LLC 78 Rockland Avenue Maynard, MA 01754 Bankruptcy Case No.: 07-40711 Chapter 11 Petition Date: February 28, 2007 Court: District of Massachusetts (Worcester) Judge: Henry J. Boroff Debtor's Counsel: David B. Madoff, Esq. Madoff &Khoury LLP 124 Washington Street, Suite 202 Foxboro, MA 02035 Tel: (508) 543-0040 Fax: (508) 543-0020 Total Assets: $6,500,000 Total Debts: $5,220,259 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Baystate Water Works, Inc. $39,873 P.O. Box 2276 Littleton, MA 01460 Atlantic Blasting Co., Inc. Subcontractor $35,520 296 West Street Milford, MA 01757 Acton Survey & Engineering, $29,408 Inc. 97 Great Road, Unit 6 Acton, MA 01720 PJ Keating Company $27,562 Andrew C. Fantasia & $13,110 Associates People's Fuel, Inc. $12,557 Thompson Pump & Manufacturing $6,468 Co., Inc. Podgurski Corporation $6,229 D'Agostine, Levine, Parra & $5,686 Netburn, PC William N. LaMarre Concrete $4,868 Products, Inc. Mini Construction, Inc. $3,600 Pipe Plus, Inc. $3,505 Clog Masters $2,433 Smith Pipeline Services $2,100 American Express $2,002 Ralph D. Kilfoyle $1,745 dba RDK Associates D.L. Maher $1,415 Airport John $1,059 JCF Construction Subcontractor $1,050 Ferguson/JD Daddario #1196 $787 GREEN SPRINGS: Fitch Holds Junk Rating on $14.6 Mil. Revenue Bonds ------------------------------------------------------------------ Fitch Ratings affirms the 'CCC' rating on the approximately $14,600,000 of outstanding Village of Green Springs, Ohio, health care facilities revenue bonds, series 1994A and revises the Rating Outlook to Positive from Stable. The bonds are secured by a pledge of gross receipts, a mortgage on the facility and a debt service reserve fund. A rating in the 'CCC' category means that default, while not likely, is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic conditions. With annual revenues less than $18 million, thin liquidity, and a history of significant operating losses, St. Francis Health Care Centre has very little ability to withstand adverse economic conditions or utilization downturns. A high debt burden, increasing service area competition, and future capital needs further limit operational flexibility. Nevertheless, the new management team's recent actions to dissolve the defined benefit pension plan and overhaul the marketing focus have led to an uptick in profitability and provide the rationale for the Positive Rating Outlook. Fitch will review the results of the 2006 audit when available, assess the sustainability of recently reported expense reductions, and determine if an upgrade within the current category is warranted. Rating improvement beyond the 'CCC' category is not likely without significant and maintained liquidity and profitability improvement. Unaudited results for fiscal 2006 show operating income of $1.7 million, which reflects a one-time approximately $2.5 million gain related to the dissolution of SFHCC's defined benefit pension plan. Absent the gain, the adjusted approximate $800,000 loss from operations is comparable to the prior year. SFHCC is budgeting a modest operating gain of $119,000 for fiscal 2007, which should be achievable if utilization projections materialize as expected. SFHCC reported debt service coverage by earnings before interest, taxes, depreciation and amortization of 2.9x unaudited, up from the 1.3 x for fiscal 2005 and reflecting the improved operating performance in fiscal 2006. Without the one-time gain, coverage in fiscal 2006 would have been 1.2x. SFHCC is budgeting coverage of 1.8x for fiscal 2007, which exceeds its covenanted ratio of 1.2x. SFHCC had covenant violations in 1999, 2001, and 2002. In addition, maximum annual debt service as a percentage of total revenues was 7.6% in fiscal 2006. SFHCC's internal statements do not include the SFHCC foundation and show cash levels down compared to prior years. Management reported that cash at fiscal 2006 was negatively affected by a delay in reimbursement which has since been rectified and that current cash levels are comparable to fiscal 2005. Despite this apparent stabilization, SFHCC's liquidity position remains weak and provides the organization with limited flexibility. SFHCC is located 45 miles southeast of Toledo and relies on hospitals in the Fremont, Bellevue and Toledo areas for referrals. New long term acute care hospital and skilled nursing facility competitors have entered these markets which will pressure SFHCC's patient volume. SFHCC's average age of plant was high at 15.3 years at the end of fiscal 2006, which reflects low capital spending. Capital expenditures as a percentage of depreciation expense average 18.7% from fiscal 2001-2005. While this strategy has supported cash flow, Fitch believes increased capital spending will be necessary in a competitive environment. SFHCC consists of a 36-bed LTACH and a 148-bed, dually certified for Medicare and Medicaid SNF. Both the LTACH and the SNF sit on a 30-acre campus in Green Springs, Ohio. St. Francis has total revenues of $17.6 million in fiscal 2005. SFHCC does not covenant to disclose annual audited financial statements or quarterly financial statements to the Nationally Recognized Municipal Securities Information Repositories or bondholders. However, Fitch notes disclosure to the NRMSIRs was not standard industry practice when the series 1994A bonds were issued. SFHCC does not disclosure to the NRMSIRs and management has stated that it is unsure if it will change its practices to date, which Fitch views negatively. HILTON HOTELS: Scandic Hotel Sale Prompts S&P to Lift Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and senior unsecured ratings on Hilton Hotels Corp. to 'BB+' from 'BB' and removed the ratings from CreditWatch where they were placed with positive implications on Jan. 31, 2007. The outlook is stable. The upgrade reflects a pace of deleveraging that is faster than the expectation at the time of the company's February 2006 acquisition of Hilton International. The upgrade follows the announced sale today of the company's Scandic-branded hotel portfolio to private equity firm EQT for $1 billion in net proceeds. "We view the Scandic sale favorably because Hilton is expected to use the $1 billion in net sale proceeds to repay debt. In addition, the sale would result in the transfer of a meaningful portion of Hilton's fixed lease obligations, as well as improve margins in Hilton's global lodging portfolio," said Standard & Poor's credit analyst Emile Courtney. HM RIVERGROUP: S&P Places B- Corporate Credit Rating on Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on HM Rivergroup PLC and its subsidiary, Riverdeep Interactive Learning USA Inc., on CreditWatch with negative implications, based on Standard & Poor's concern about the ability of intermediate parent Riverdeep Interactive Learning Ltd. to issue upcoming financial statements on a timely basis. Ratings on CreditWatch: * HM River -- Corporate Credit Rating, B- * Riverdeep Interactive Learning USA, Inc. -- Corporate Credit Rating, B- RILL has replaced its auditors following the resignation of Ernst & Young. Under the company's lending agreements, RILL must produce financial statements by March 31, 2007, which it expects it can do. However, a delay in issuing financial statements could lead to an event of default, unless lenders waive their rights relating to the company's reporting requirements. Consolidated total debt and preferred stock at Sept. 30, 2006, totaled roughly $3.5 billion. Separately, Riverdeep Interactive Learning USA Inc. is no longer marketing its $250 million add-on to its senior secured first-lien term loan B. The company had intended to use the proceeds from this transaction to reduce the $1.07 billion increasing-rate bridge loan that helped finance HM Rivergroup PLC's December 2006 acquisition of Houghton Mifflin LLC, which would have reduced interest costs slightly. "We will resolve the CreditWatch listing after reviewing the company's operations, cash flow, and liquidity, as shown on its audited financial statements for the fiscal year ended Dec. 31, 2006," said Standard & Poor's credit analyst Hal F. Diamond. INDYMAC MBS: Fitch Rates $1.6 Million Class B-5 Certificates at B ----------------------------------------------------------------- Fitch rates IndyMac MBS, Inc., Residential Asset Securitization Trust 2007-A3, residential mortgage pass-through certificates: -- 349.15 million classes 1-A-1 through 1-A-4, 2-A-1, 2-A-2, PO, and A-R 'AAA' (senior certificates); -- $9.61 million class B-1 and B-1IO 'AA'; -- $4.27 million class B-2 and B-2IO 'A'; -- $3.16 million class B-3 'BBB'; -- $2.04 million privately offered class B-4 'BB'; and -- $1.67 million privately offered class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 5.99% subordination provided by the 2.59% class B-1, the 1.15% class B-2, the .85% class B-3, the 0.55% non-offered class B-4, the 0.45% non-offered class B-5, and the 0.40% non-offered and non-rated class B-6. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults, as well as bankruptcy, fraud, and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, the strength of the legal and financial structures, and the capabilities of IndyMac Bank, FSB as a servicer. The mortgage pool consists of 1,385 recently originated, conventional, fixed-rate, first lien, one- to four-family residential mortgage loans with original terms to stated maturity of 20 or 30 years. As of the Feb. 1, 2007, cut-off date, the pool had an aggregate principal balance of approximately $371,388,138. The average loan balance is $268,150, and the weighted average original loan-to-value ratio for the mortgage loans in the pool is approximately 72.64%. The weighted average FICO credit score for the pool is approximately 703. Cash-out and rate/term refinance loans represent 47.94% and 22.62% of the pool, respectively. Second and investor-occupied homes account for 1.97% and 8.88% of the pool, respectively. The states that represent the largest geographic concentration are California (40.71%), Florida (10.18%), and New York (9.16%). None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. The loans were originated or purchased by IndyMac Bank, F.S.B., and were subsequently sold to IndyMac MBS, Inc. IndyMac MBS, Inc. deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, elections will be made to treat the trust as separate multiple real estate mortgage investment conduits. Deutsche Bank National Trust Company will act as trustee. ITRON INC: Completes Private Placement of 4,086,958 Shares ---------------------------------------------------------- Itron Inc. has completed the private placement of 4,086,958 shares of its common stock to ten institutional investors. As reported, the company issued 4,086,958 million shares of its common stock, no par value, to certain institutional investors pursuant to a securities purchase agreement dated Feb. 25, 2007, for an aggregate purchase price of $235.0 million, or $57.50 per share, which represents a 5% discount from the five-day average share closing price during the week of Feb. 12, 2007 of $60.52. Net proceeds were $225.3 million. About Itron Itron Inc. (NASDAQ: ITRI) -- http://www.itron.com/-- is a technology provider and critical source of knowledge to the global energy and water industries. Nearly 3,000 utilities worldwide rely on Itron technology to provide the knowledge they require to optimize the delivery and use of energy and water. Itron creates value for its clients by providing industry-leading solutions for electricity metering; meter data collection; energy information management; demand response; load forecasting, analysis and consulting services; distribution system design and optimization; web-based workforce automation; and enterprise and residential energy management. Effective April 2006, Itron has acquired Brazil's ELO Tecnologia. Itron Tecnologia has offices and a manufacturing assembly facility in Campinas and offices in Santiago. The company maintains operations in Canada, Qatar, Mexico, Taiwan, France and Australia, The Netherlands, and The United Kingdom. * * * As reported in the Troubled Company Reporter on Mar. 2, 2007, Standard & Poor's Ratings Services placed its ratings, including its 'BB-' corporate credit rating, on Itron Inc. on CreditWatch with negative implications. ITRON INC: Earns $33.8 Million in Year Ended December 31 -------------------------------------------------------- Itron Inc. reported net earnings of $33.8 million on total revenues of $644 million for the year ended Dec. 31, 2006, compared with net earnings of $33.1 million on total revenues of $552.7 million a year ago. Sales revenues increased $90.7 million in 2006, compared with 2005, as a result of increased sales of electricity meters, automated meter reading gas modules and installation services. Service revenues, consisting of post-sale maintenance support and outsourcing revenues, increased slightly in 2006, compared with 2005. One customer, Progress Energy, represented 16% of total revenues for the year ended Dec. 31, 2006. No single customer represented more than 10% of total revenues for 2005. Sales gross margin was $244.8 million in 2006, compared to $211.8 million in 2005. As a percentage of revenue, this was slightly lower compared with 2005, due to a shift in product mix, including a higher portion of installation services. Service gross margin was $22.7 million in 2006, compared with $21.8 million in 2005. Operating expenses increased to $205.7 million in 2006, from $187.4 million in 2005. The increase in total operating expenses is mainly due to approximately $8.3 million associated with the company's adoption of SFAS 123(R), which requires expensing of stock-based compensation, and the $11.7 million increase in product development expenses, mainly due to the development of the company's advanced metering infrastructure (AMI) solution. Total other expense was $9.5 million in 2006, compared to $18.7 million in 2005. The decrease in other expense was mainly due to the increase in interest income to $9.5 million in 2006, from interest income of $302,000 in 2005. The company recorded income tax expenses of $18.5 million in 2006, compared with an income tax benefit of $5.5 million in 2005. The 2005 actual income tax rate was a benefit of 20%, which was lower than the statutory tax rate due to the benefit of research credits and the completion of a research credit study for the years 1997 through 2004, in which the company recognized a $5.9 million net tax credit as an offset to the provision for income taxes. In addition, as part of a reorganization of the company's legal entities for operational efficiencies, the company recognized $8 million in deferred tax assets from prior years that had been fully reserved, associated primarily with certain foreign operations. At Dec. 31, 2006, the company's balance sheet showed $988.5 million in total assets, $597.5 million in total liabilities, and $391 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1ab6 Cash and Cash Equivalents At Dec. 31, 2006, the company had $361,405 in cash and cash equivalents, compared to $33,638 at Dec. 31, 2005. The increase in cash and cash equivalents during 2006 resulted from $345 million of convertible notes issued in August 2006, the proceeds of which were placed in cash equivalents and short-term investments with the intent to invest in complementary businesses, products or technologies. About Itron Inc. Itron Inc. (NASDAQ: ITRI) -- http://www.itron.com/-- provides solutions to electric, gas and water utilities worldwide to enable them to optimize the delivery and use of energy and water. Solutions include electric meters, handheld computers, mobile and fixed network automated meter reading (AMR), advanced metering infrastructure (AMI), water leak detection and related software and services. Additionally, the company sells enterprise software to manage, analyze and forecast important utility data. * * * As reported in the Troubled Company Reporter on Mar. 2, 2007, Standard & Poor's Ratings Services placed its ratings, including its 'BB-' corporate credit rating, on Itron Inc. on CreditWatch with negative implications. JP MORGAN: Fitch Rates $1.5 Million Class C-B-5 Certificates at B ----------------------------------------------------------------- J.P. Morgan Alternative Loan Trust mortgage pass-through certificates, series 2007-A1, are rated by Fitch Ratings: Aggregate Pool A (Pools 2-3): -- $248.8 million classes 2-A-1, 2-A-2, 3-A-1, 3-A-2, 2-P and A-R 'AAA'; -- $5.9 million class C-B-1 'AA'; -- $3.2 million class C-B-2 'A'; -- $1.8 million class C-B-3 'BBB'; -- $1.7 million, privately offered, class C-B-4 'BB'; and -- $1.5 million, privately offered, class C-B-5 'B'. For Aggregate Pool A (Pools 2-3), the 'AAA' rating on the senior classes reflects the 5.75% subordination provided by the 2.25% class C-B-1, the 1.20% class C-B-2, the 0.70% class C-B-3, the 0.65% privately offered class C-B-4, the 0.55% privately offered class C-B-5, and the 0.40% privately offered, non-rated class C-B-6. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the primary servicing capabilities of JP Mortgage Chase Bank, N.A., and Countrywide Home Loan Servicing. The holders of the REMIC certificates may exchange all or part of each class of such REMIC certificates for a proportionate interest in the exchangeable certificates in the related exchangeable combination. The holders of each class of exchangeable certificates in an exchangeable combination may also exchange all or part of such class for a proportionate interest in each class of related REMIC certificates. The classes of REMIC certificates and of exchangeable certificates that are outstanding on any date and the outstanding principal balances of these classes will depend upon the aggregate distributions of principal made to such classes, as well as any exchanges that have occurred on or prior to such date. Holders of exchangeable certificates will be the beneficial owners of an interest in the related REMIC certificates and will receive a proportionate share, in the aggregate, of the distributions on those certificates. The Aggregate Pool A (Pools 2-3) mortgage loans consist of 562 loans with a scheduled balance of $264,024,459. The average unpaid principal balance as of the cut-off date is $469,794. The weighted average original loan-to-value ratio is 73.67%. The weighted average mortgage rate of the pool is 6.311%. States with large concentrations of loans are California (57.78%), Florida (4.55%), and Maryland (4.03%). HSBC Bank USA, National Association, will act as trustee. J.P. Morgan Acceptance Corporation I, a special purpose corporation, deposited the loans in the trust which issued the certificates. For federal income tax purposes, the trustee will elect to treat all or portion of the assets of the trust funds as comprising multiple real estate mortgage investment conduits. JONG SUNG PARK: Case Summary & 32 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Jong Sung Park Kyung Ok Park 500 Pendleton Lake Road Raleigh, NC 27614 Bankruptcy Case No.: 07-00385 Debtor affiliates filing separate chapter 11 petition on Feb. 22, 2007: Entity Case No. ------ -------- Deluxe Cleaners of Durham, Inc. 07-00268 Type of Business: Jong Sung Park owns Deluxe Cleaners. Chapter 11 Petition Date: February 27, 2007 Court: Eastern District of North Carolina (Raleigh) Judge: A. Thomas Small Debtors' Counsel: Danny Bradford, Esq. Paul D. Bradford, PLLC 3200 Beechleaf Court, Suite 100 Raleigh, NC 27604 Tel: (919) 424-8345 Fax: (919) 424-8395 Total Assets Total Debts ------------ ----------- Jong Sung Park and $2,343,693 $5,821,986 Kyung Ok Park Deluxe Cleaners of $100,000 to $1 Million to Durham, Inc. $1 Million $100 Million A. Jong Sung Park and Kyung Ok Park's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ A.D. Myers Builders, LLC House and lot $1,314,280 3626 Guess Road located at 2341 Durham, NC 27705 Kendricks Court in Raleigh, North Carolina 27613 Value of Security: $230,000 Senior lien: $202,292 Countrywide House and lot $975,000 450 American Street located at 500 Simi Valley, CA 93065 Pendleton Lake Road in Raleigh, North Carolina 27614 Value of security: $1,750,000 $ Senior lien: $1,254,999 Wachovia Bank Commercial Washers, Dryers, $500,000 Loans - Raleigh Pressing Machine, P.O. Box 19367 Drycleaning Machine, Raleigh, NC 27619 Boiler, Hot Water Heater and other Related machinery and equipment used by Deluxe Value of security: $200,000 Wachovia Bank Commercial Washers, Dryers, $400,000 Loans - Raleigh Pressing Machine, P.O. Box 19367 Drycleaning Machine, Raleigh, NC 27619 Boiler, Hot Water Heater and other Related machinery and equipment used by Deluxe Value of security: $200,000 Senior lien: $500,000 The Law Office of Legal Services $324,072 James P. Laurie, 8311 Six Forks Road, Suite 111 Raleigh, NC 27615 Banner Machinery Corporation Claimant and Debtors $256,198 P.O. Box 337 are involved in Benson, NC 27504 arbitration that includes counterlcaims against Debtors, for alleged contract damages related to equipment purchased Sun O. Hellner Personal loan $142,500 Toms, Mills & Kuruc, PLLC Legal Services $53,782 Monogram Bank N America CreditCard $53,111 Chase CreditCard $49,854 Fitzgerald & Associates, LLC Expert fees $42,001 Chae C. Yi Personal loan $30,000 RBC Centura Credit card $24,850 purchases Chase CreditCard $24,247 Advanta Credit card $23,268 purchases Bunn & Arnold, PLLC Legal Services $21,150 Charles L. Park Personal loan $20,000 Citibank CreditCard $17,138 Wachovia Bank Na/ftu Check, CheckCreditor, $19,917 or Line of Credit Wyrick, Robbins, Yates & Legal services $24,863 Ponton B. Deluxe Cleaners of Durham, Inc.'s 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ A.D. Myers Builders, LLC The lien has not $1,314,280 3626 Guess Road attached to any of Durham, NC 27705 Deluxe's property, as the claim of lien filed in file number 04M186, Durham County, was against Deluxe's lease Wachovia Bank Commercial Washers, Dryers, $500,000 Loans - Raleigh Pressing Machine, P.O. Box 19367 Drycleaning Machine, Raleigh, NC 27619 Boiler, Hot Water Heater and other Related machinery and equipment used by Deluxe Value of security: $200,000 Wachovia Bank Commercial Washers, Dryers, $400,000 Loans - Raleigh Pressing Machine, P.O. Box 19367 Drycleaning Machine, Raleigh, NC 27619 Boiler, Hot Water Heater and other Related machinery and equipment used by Deluxe Value of security: $200,000 Senior lien: $500,000 The Law Office of Legal services $324,072 James P. Laurie, 8311 Six Forks Road Suite 111 Raleigh, NC 27615 Banner Machinery Corporation Claimant & Principles $256,198 P.O. Box 337 of Deluxe are involved Benson, NC 27504 in arbitration that includes counterlcaims against Principals, for alleged contract damages Comfort Engineers, Inc. Debtor's leasehold $97,767 interest in the real property located at 1811 Martin Luther King Parkway in Durham, NC 27707 Comfort Engineers, Inc. Debtor's leasehold $97,767 interest in the real property located at 1811 Martin Luther King Parkway in Durham, NC 27707 Toms, Mills & Kuruc, PLLC Legal services $60,899 Fitzgerald & Associates, LLC Expert fees $42,001 Bunn & Arnold, PLLC Legal services $21,150 Barrett, Irvin and Jordan Deluxe's leasehold $12,666 Construction, Inc. interest in the real property located at 1811 Martin Luther King Parkway, Durham, NC 27707 City of Durham - Dept. of False alarm $3,650 Finance penalties KEVIN HAMMERSMITH: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Kevin J. Hammersmith 1670 Woodstock Road Woodstock, MD 21163 Bankruptcy Case No.: 07-11852 Chapter 11 Petition Date: February 28, 2007 Court: District of Maryland (Baltimore) Judge: Robert A. Gordon Debtor's Counsel: John C. Schropp, Esq. Coon & Cole, LLC 305 West Chesapeake Avenue, Suite 105 Towson, MD 21204 Tel: (410) 825-5717 Fax: (410) 825-6023 Total Assets: $914,211 Total Debts: $1,821,830 The Debtor did not file a list of his 20 Largest Unsecured Creditors. KIRSHAN SUDAN: Chapter 15 Petition Summary ------------------------------------------ Debtor: Kirshan K. Sudan 4965 Bourret Avenue, #14 Montreal, Quebec H3W1L3 Case No.: 07-11166 Chapter 15 Petition Date: February 15, 2007 Court: Northern District of Ohio (Cleveland) Judge: Arthur I. Harris Debtor's Counsel: Christopher B. Wick, Esq. Hahn Loeser + Parks LLP 3300 BP Tower 200 Public Square Cleveland, OH 44114-2301 Tel: (216) 621-0150 Fax: (216) 241-2824 Estimated Assets: $100,000 to $1 Million Estimated Debts: $100,000 to $1 Million KYPHON INC.: Reports $39.7 Million Net Income in Yr. Ended Dec. 31 ------------------------------------------------------------------ Kyphon, Inc. reported net income of 39.7 million on net sales of $407.7 million for the year ended Dec. 31, 2006, compared with net income of $29.8 million on net sales of $306 million for 2005, an increase of $101.7 million. The increase in net sales in 2006 primarily resulted from an increase in the number of physicians trained in the use of its KyphX instruments to approximately 2,400 physicians in 2006 from 2,200 in 2005. As of Dec. 31, 2006, the company's balance sheet showed $428.6 million in total assets, $ 83.9 in total liabilities, resulting to $344.7 million in total stockholders' equity. Its December 31 balance sheet also showed $301.4 million in total current assets and $73.4 million in total current liabilities. Liquidity and Capital Resources At Dec. 31, 2006, the company had $81.9 million of cash and cash equivalents, $120.2 million of short-term investments, and working capital of $228 million. Its cash and cash equivalents and investments increased by $7.7 million during 2006. In October 2006, the company entered into a syndicated credit facility which provided a five-year $300 million revolving line of credit, including a $50 million sublimit for the issuance of standby letters of credit, a $25 million sublimit for swing line loans, and a $100 million sublimit for multicurrency borrowings. In conjunction with the acquisition of St. Francis, Kyphon, together with certain of its subsidiaries, the company amended the October 2006 credit facility on Jan. 18, 2007. It entered into a credit agreement to replace and refinance the above- described credit facility with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, and Banc of America Securities LLC as sole lead arranger and sole book manager. The Credit Agreement provides for a $250 million senior secured revolving credit facility, maturing Oct. 20, 2011, which can be expanded to $300 million under certain circumstances. The Facility was used to finance the acquisition of St. Francis, and may be used for general corporate purposes. The revolving credit facility will bear interest at Base Rate plus 0.25-1.25 or LIBOR plus 1.25% to 2.25%. Kyphon's obligations under the Facility are secured by substantially all of its assets. In February 2007, the company issued $200 million aggregate principal amount of Convertible Senior Notes due 2012 and $200 million aggregate principal amount of Convertible Senior Notes due 2014. Interest on the notes due 2012 will be paid semiannually at a rate of 1% per year and interest on the notes due 2014 will be paid semiannually at a rate of 1.25% per year. On Feb. 6, 2007, the company used net proceeds of approximately $355 million from the issuance of the Convertible Senior Notes, together with borrowings under the Revolving Credit Facility, to prepay the Term Loan Facility in its entirety. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1ab1. About Kyphon, Inc. Kyphon develops and markets medical devices designed to restore spinal function and diagnose low back pain using minimally invasive technologies. The company's products are used in balloon kyphoplasty for the treatment of spinal fractures caused by osteoporosis or cancer, and in the Functional Anaesthetic Discography procedure for diagnosing low back pain due to degenerative disc disease. The company has expanded into lumbar spinal stenosis treatment following their recent acquisition of St. Francis. The company reported about $407.8 million of revenues for the year ended Dec. 31, 2006. * * * As reported in the Troubled Company Reporter on Feb. 13, 2007, Moody's Investors Service upgraded the rating of Kyphon, Inc.'s $300 million senior secured revolver to Ba1 from B1 following the issuance of $400 million in convertible senior unsecured notes. LA WEST: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: LA West, Inc. 17322 Westfield Park Road, Suite 100 Westfield, IN 46074 Bankruptcy Case No.: 07-01556 Chapter 11 Petition Date: March 2, 2007 Court: Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtor's Counsel: David R. Krebs, Esq. Hostetler & Kowalik P.C. 101 West Ohio Street, Suite 2100 Indianapolis, IN 46204 Tel: (317) 262-1001 Fax: (317) 262-1010 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Barnes & Thornburg LLP Legal Services $81,395 11 South Meridian Street Indianapolis, IN 46204 Daugherty & Daugherty, Inc. Open Account $42,120 dba Mike Daugherty Chevrolet 2449 Fulton Avenue Sacramento, CA 95825 QC Metal Fab, Inc. Open Account $40,121 1025 All Pro Drive Elkhart, IN 46514 Automotive Color & Supply Open Account $30,710 Prime Wheel Open Account $29,937 Preferred Chevrolet Open Account $18,593 First Choice of Elkhart Open Account $15,924 Newhall Klein, Inc. Open Account $15,869 Logistics by Bontreger Open Account $15,247 Indianapolis Diversified Open Account $14,148 Machining Keystone Automotive Operations Open Account $12,726 Charles H. Morse Open Account $11,246 Owens Products Open Account $9,394 Midwest Mobile Supply Open Account $6,776 Ground Force Suspension Open Account $6,758 Gibson Insurance Corp. Open Account $6,580 Dylux Technology, Inc. Open Account $6,502 R&L Carriers Open Account $5,934 Quality Driveaway Open Account $5,717 Baker & Daniels Legal Services $5,694 LB-UBS: Fitch Places Low-B Ratings on Three Certificate Classes --------------------------------------------------------------- Fitch Ratings-New York-27 February 2007: Fitch rates LB-UBS Commercial Mortgage Trust 2007-C1, commercial mortgage pass- through certificates as follows: --$62,000,000 Class A-1 'AAA'; --$211,000,000 Class A-2 'AAA'; --$225,000,000 Class A-3 'AAA'; --$95,000,000 Class A-AB 'AAA'; --$1,156,051,000 Class A-4 'AAA'; --$850,172,000 Class A-1A 'AAA'; --$371,318,000 Class A-M 'AAA'; --$315,620,000 Class A-J 'AAA'; --$861,922,250 Class X-CP 'AAA'; --$2,784,882,625 Class X-W 'AAA'; --$928,294,208 Class X-CL 'AAA'; --$27,849,000 Class B 'AA+'; --$55,697,000 Class C 'AA'; --$37,132,000 Class D 'AA-'; --$18,566,000 Class E 'A+'; --$32,490,000 Class F 'A'; --$32,491,000 Class G 'A-'; --$41,773,000 Class H 'BBB+'; --$41,773,000 Class J 'BBB'; --$51,056,000 Class K 'BBB-'; --$9,283,000 Class L 'BB+'; --$9,283,000 Class M 'BB'; --$9,283,000 Class N 'BB-'; --$4,642,000 Class P 'NR'; --$9,283,000 Class Q 'NR'; --$9,283,000 Class S 'NR'; --$37,131,833 Class T 'NR'; --$33,457,011 Class BMP 'NR'. Classes A-1, A-2, A-3, A-AB, A-1A, A-M, A-J, A-CP, B, C, D, E, F, X-CP and X-W are offered publicly, while classes X-CL, G, H, J, K, L, M, N, P, Q, S, and T are privately placed pursuant to rule 144A of the Securities Act of 1933. With the exception of the BMP certificates, which represent an interest in a subordinate note secured by the Bethany Maryland Portfolio, the certificates represent beneficial ownership interest in the trust, primary assets of which are 145 fixed-rate loans having an aggregate principal balance of approximately $3,713,176,833 as of the cutoff date. LCM V: S&P Assigns BB Rating on $16.5 Million Class E Notes ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to LCM V Ltd.'s $552 million floating-rate notes due 2019. The preliminary ratings are based on information as of March 2, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit enhancement provided to each class of notes through the subordination of cash flows to the more junior classes; -- The transaction's cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The experience of the collateral manager; and -- The legal structure of the transaction, including the bankruptcy remoteness of the issuer. Preliminary Ratings Assigned LCM V Ltd. Class Rating Amount ---- ----- ------------ A-1 AAA $370,500,000 A-2 AAA $42,000,000 B AA $63,000,000 C A $41,250,000 D BBB $18,750,000 E BB $16,500,000 Subordinated notes NR $48,000,000 NR -- Not rated. LENOX GROUP: Market Decline Prompts Minnesota Facility Closure -------------------------------------------------------------- Lenox Group Inc. intends to close its Rogers, Minnesota distribution facility in October 2007 to consolidate such operations with its distribution center in Hagerstown, Maryland. The company expects to incur approximately $2 million in expense for the closing and consolidation, exclusive of any severance or other employee costs associated with the closing, which cannot be estimated at this time. The company said that the expense principally includes the costs associated with lease termination and restoration, impairment of remaining leaseholds improvements and abandonment of assets and inventory and equipment relocation, with approximately $1.2 million of the expense related to lease obligations, approximately $0.5 million related to lease impairment costs and approximately $0.3 million related to relocation costs. The company expects the consolidation to be largely completed by October 2007, with all expenses to be recorded in 2007. The company is taking this action due to the continued decline of the collectible market over the past few years, coupled with overcapacity in distribution. The consolidation is expected to benefit Lenox by streamlining its distribution system, increasing efficiency and reducing overall costs. On Mar. 1, 2007, the company reported that it reduced its workforce by 47 employees at its fine bone china manufacturing facility in Kinston, North Carolina. The company said that the workforce reduction was made to align staffing levels with the facility's decreased production volume, primarily due to the company having fewer company-operated retail stores. About Lenox Group Based in Eden Prarie, Minnesota, Lenox Group Inc (NYSE: LNX) was formed on Sept. 1, 2005, when Department 56 Inc., a designer, wholesaler and retailer of collectibles and giftware products purchased Lenox Inc., a designer, manufacturer and marketer of fine china, dinnerware, silverware, crystal, and giftware products. The Company sells its products through wholesale customers who operate gift, specialty and department store locations in the United States and Canada, company-operated retail stores, and direct-to-the-consumer through catalogs, direct mail, and the Internet. * * * As reported in Troubled Company Reporter on Jan. 15, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Lenox Group Inc. to 'CCC+' from 'B+'. The rating on the senior secured debt was lowered to 'B-' from 'BB-' and the recovery rating was affirmed at '1', indicating expectations for a full recovery of principal. LEVEL 3: Gets Requisite Consents for 11% Senior Notes due 2008 -------------------------------------------------------------- As part of its tender offer and consent solicitation for Level 3 Communications, Inc.'s 11% Senior Notes due 2008 and Level 3 Financing, Inc.'s tender offer for its Floating Rate Senior Notes due 2011, as of 12:01 a.m., New York City time, on March 1, 2007, Level 3 Communications, Inc., had accepted tenders and consents for approximately 73% of the aggregate principal amount outstanding of the 11% Notes and Level 3 Financing had accepted tenders and consents for approximately 96% of the aggregate principal amount outstanding of the Floating Rate Notes. In connection with the tender offer and related consent solicitation for the 11% Notes, on March 1, 2007, Level 3 Communications, Inc., entered into a Supplemental Indenture amending the Indenture, dated as of Feb. 29, 2000, between Level 3 Communications, Inc., and The Bank of New York, as Trustee, relating to the 11% Notes. The 11% Supplemental Indenture amends the 11% Note Indenture to eliminate substantially all of the covenants and certain events of default and related provisions contained in the 11% Note Indenture. In connection with the tender offer and related consent solicitation for the Floating Rate Notes, on March 1, 2007, Level 3 Financing, Inc. entered into a Supplemental Indenture amending the Indenture, dated as of March 14, 2006, among Level 3 Financing, as Guarantor, Level 3 Financing, Inc., as Issuer, and The Bank of New York, as Trustee, relating to the Floating Rate Notes. The Floating Rate Supplemental Indenture was entered into among Level 3 Communications, Inc., Level 3 Financing, Inc., Level 3 Communications, LLC, Broadwing Financial Services, Inc. and The Bank of New York, as Trustee. The Floating Rate Supplemental Indenture amends the Floating Rate Note Indenture to (i) eliminate substantially all of the covenants and certain events of default and related provisions contained in the Floating Rate Indenture and (ii) modify the provisions in the Floating Rate Indenture providing for satisfaction and discharge and covenant defeasance. The tender offer for the 11% Notes and the tender offer for the Floating Rate Notes are each scheduled to expire at 12:01 a.m., New York City time, on March 15, 2007. Notes tendered in the Tender Offers after the Consent Time, but prior to the Expiration Date will not receive a consent payment. Notes tendered in the Tender Offers on or prior to the Consent Time may no longer be withdrawn. The settlement date for notes tendered in the Tender Offers on or prior to the Consent Time was March 1, 2007. Copies of each Offer to Purchase and each related Letter of Transmittal may be obtained from the Information Agent for the Tender Offers, Global Bondholder Services Corporation, at (212) 430-3774 and (866) 389-1500 (toll-free). Merrill Lynch & Co. is the Dealer Manager for the Tender Offers. Questions regarding the tender offer may be directed to Merrill Lynch & Co. at (888) 654-8637 (toll-free) and (212) 449-4914. About Level 3 Headquartered in Broomfield, Colorado, Level 3 Communications Inc. (Nasdaq: LVLT) -- http://www.level3.com/-- is an international communications company. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. * * * As reported in the Troubled Company Reporter on Feb. 23, 2007, Standard & Poor's Rating Services raised its ratings on Broomfield, Colorado-based Level 3 Communications Inc. and wholly owned subsidiary, Level 3 Financing Inc., including the corporate credit rating, which was raised to 'B-' from 'CCC+'. The outlook is stable. As reported in the Troubled Company Reporter on Feb. 14, 2007, Moody's Investors Service assigned a B1 rating to Level 3 Financing Inc.'s new $1 billion term loan and a B3 rating to the $1 billion fixed and floating rate notes at Financing. Moody's affirmed Level 3 Communications, Inc.'s corporate family rating at Caa1 with a stable outlook, as the pro-forma leverage is expected to remain in the 8.5x range, as Moody's expects the company to use the additional liquidity to refinance higher coupon debt. LEVI STRAUSS: S&P Rates Proposed $325 Million Senior Loan at B -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to apparel marketer and distributor Levi Strauss & Co.'s proposed $325 million senior unsecured term loan due 2014. Proceeds from the term loan, along with cash on hand, will be used to retire or fully call the existing $380 million floating rate notes due April 2012. At the same time, Standard & Poor's said it raised all of its ratings on the San Francisco-based company by one notch, including raising its 'B-' long-term corporate credit rating to 'B'. The outlook is positive. "The rating upgrade incorporates the company's continued improved operating performance and enhanced liquidity profile, its increased financial flexibility from its proposed refinancing, and our expectation that the positive operating trends will continue," said Standard & Poor's credit analyst Susan Ding. The ratings on Levi Strauss & Co. reflect its leveraged financial profile and participation in the intensely competitive denim and casual pants market. The ratings also incorporate the inherent fashion risk in the apparel industry, and company-specific rating concerns, including management's ability to fully turn around the company, revitalize its brands, and sustain its revenue base. MENDOCINO COAST: S&P Slashes Bonds' Rating to B from BBB -------------------------------------------------------- Standard & Poor's Ratings Services lowered its underlying rating to 'B' from 'BBB+' on the Mendocino Coast Health Care District, California's GO bonds. The outlook is negative. "In a Nov. 10, 2006, letter accompanying the district's fiscal 2006 financial statements, the district's auditor expressed doubt about the district's ability to continue as a going concern," said Standard & Poor's credit analyst Rob Williams. "The district reported sizable deficits in fiscals 2005 and 2006, significantly depleting cash balances and reserves, due in part to the reclassification of $4 million in receivable as uncollectible as well as rising costs, low utilization, and weak billing practices." At the end of calendar 2006, the district hired a new CEO, CFO, and business manager at the board's direction. New management is tasked with implementing a plan to increase revenues, control costs, and increase cash flow through better management of billing and accounts receivable. While staff currently anticipates that the district's performance will stabilize, further deterioration could lead to the district's inability to support ongoing operations given limited cash reserves and significantly weakened operating margins. The district owns and operates the Mendocino Coast Hospital, a 49-bed, acute-care facility that is located in the City of Fort Bragg, approximately 180 miles north of San Francisco. The hospital is designated as a sole community provider and offers a full range of inpatient and outpatient services. The rating change affects $5.4 million in GO debt. The county continues to levy property tax on behalf of the district to pay GO debt service, although the bonds carry the full faith and credit pledge of the district. The district also has $3 million in hospital revenue bonds outstanding, which is not rated by Standard & Poor's. MERITAGE HOMES: Fitch Rates $150 Million Senior Notes at B+ ----------------------------------------------------------- Fitch Ratings has assigned a 'B+' rating to Meritage Homes Corporation's $150 million, 7.73% senior subordinated notes due April 30, 2017. The 'BB' Issuer Default Rating and senior unsecured rating are affirmed. The Rating Outlook is Stable. The company used the proceeds of $147.2 million from the private placement to pay down borrowings under its revolving credit facility. The housing sector is in the midst of a meaningful, multi-year downturn. Meritage has been increasing its sales and marketing efforts, focusing on reducing speculative inventory, reducing its lot supply, reassessing land positions, renegotiating option contracts and reducing overhead and direct construction costs. During this current downturn Meritage, like most builders, has leveraged the financial flexibility of land options, walking away from over priced lots. These builders have also reported meaningful charges associated with write downs of land values. Fitch anticipates a lesser amount of these non-cash real estate charges will be reported by Meritage in 2007. Fitch expects Meritage will continue to manage its liquidity as is appropriate for this current housing downturn. Coverage ratios are expected to be lower in 2007. Ratings for Meritage are based on the company's successful execution of its business model, conservative land policies and geographic and product line diversity. The company has been an active consolidator in the homebuilding industry which has led to above average growth during the seven years concluding 2005, but had kept leverage levels somewhat higher than its peers until the past few years. Management has also exhibited an ability to quickly and successfully integrate its acquisitions. In any case, now that the company has reached current scale there may be relatively less use of acquisitions going forward and acquisitions are likely to be smaller relative to Meritage's current size. Risk factors include the inherent cyclicality of the homebuilding industry. The ratings also manifest the company's aggressive, yet controlled growth strategy and Meritage's capitalization and size. Currently, the company's EBITDA, EBIT and FFO to interest ratios tend to be somewhat stronger than the average public builder, while its turnover ratio is higher and its leverage, FFO adjusted leverage and debt to EBITDA ratios are better. Although the company has certainly benefited from the generally strong housing market of recent years, a degree of profit enhancement is also attributed to purchasing, design and engineering, access to capital and other scale economies that have been captured by the large national and regional public homebuilders in relation to non-public builders. These economies, the company's presale operating strategy and return on equity and return on assets orientation provide the framework to soften the margin impact of declining market conditions in comparison to previous cycles. Meritage's ratio of sales value of backlog to debt, consistently at least 2.0x from 1997 to 2005, was 1.6x as of year-end 2006 - still a reasonably comfortable cushion. Meritage's sales are reasonably dispersed among its 14 metropolitan markets. Typically, about 70%-75% of home deliveries are to first and second time trade up buyers, 10%-15% to entry level buyers, 5% are to luxury home buyers and 5%-10% to active adult (retiree) buyers. The company is positioned in six of the 10 largest single family markets in the country. The company was ranked in 2005 among the 10 largest builders in Phoenix/Mesa, Ft. Worth/Arlington, Austin/Roundrock, Tucson, Oakland, Stockton, CA, Dallas/Plano/Irving, San Antonio, Naples/Marcos Island, FL and Pittsburgh by Builder Magazine. Meritage employs quite conservative land and construction strategies. The company typically options or purchases land only after necessary entitlements have been obtained so that development or construction may begin as market conditions dictate. Meritage extensively uses lot options. The use of non-specific performance rolling options gives the company the ability to renegotiate price/terms or void the option which limits down side risk in market downturns and provides the opportunity to hold land with minimal investment. As of Dec. 31, 2006, 83% of its lots were controlled through options - a higher percentage than almost all other public builders. Total lots, including those owned, were approximately 44,075 at Dec. 31, 2006. This represents a 4.2 year supply based on trailing 12 months deliveries. Typically 85%-90% of its homes are pre-sold. The balance are homes under construction or homes completed in advance of a customer's order. Meritage's inventory of presold homes under construction was 38.5% of total inventories as of Dec. 31, 2006, representing very liquid assets. Land held for development usually represents 1-6% of real estate inventories and was only 0.7% as of Dec. 31, 2006. Meritage has limited off balance sheet activities, excluding the option activities. The company has only one housing joint venture, but participates in approximately 20 land development JVs. The company also participates in financial services JVs in certain markets. The profits generated are primarily fees for originating mortgages and gain on sale of servicing. Meritage and/or its JV partners occasionally provide limited repayment guarantees on debt of certain unconsolidated entities on a pro rata share basis. As of Dec. 31, 2006, the company had limited repayment guarantees of about $38.6 million. Meritage's unconsolidated JVs debt/capitalization ratio was 63.9% as of Dec. 31, 2006, while net debt to capitalization was 63.2%. Meritage's consolidated debt/capitalization ratio was 42.2% as of Dec. 31, 2006. Meritage has completed 11 acquisitions since going public in 1996. The company has also entered markets on a 'greenfield' basis. The acquisitions have enabled the company to build its position, often broadening product and customer bases in existing markets. They have also enabled the company to enter new markets. The combinations typically were funded by debt and to a lesser degree by stock. Frequently, there were earn-outs which reduced risk and served to retain key management. Now that Meritage has reasonable scale there may be less use of acquisitions going forward. On average acquisitions are likely to be smaller relative to Meritage's current size. Fitch believes that management would balance debt and stock as acquisition currency to at least maintain current credit ratios. In any case, Fitch does not expect the company to make consequential acquisitions, while the housing market is contracting. Meritage's liquidity is ample. As of Dec. 31, 2006, the company had $57.0 million in cash and equivalents and $449 million in borrowing availability on its $850 million revolving credit facility, maturing May 2010. The company has irregularly purchased moderate amounts of its stock in the past. The company repurchased $105.4 million in common stock in 2006. $52.0 million of which was purchased from John Landon, the company's former co-CEO and co-chairman. The current remaining repurchase authorization is $130.2 million. In mid-May 2006 the company's co-chairman and co-CEO, John R. Landon resigned. Mr. Landon had been with Meritage since 1997 when Texas-based Legacy Homes, a company founded in 1987, merged with Monterey Homes to form Meritage Homes. Steve Hilton, the company's other co-chairman and co-CEO remained as the sole chairman and CEO. In mid-October 2006, Meritage announced the appointment of Steve Davis as executive VP - national homebuilding operations, reporting to Steve Hilton. MERRILL LYNCH: Fitch Lifts Certificates' Rating & Puts Watch ------------------------------------------------------------ Fitch Ratings has upgraded and placed on Rating Watch Positive Merrill Lynch Mortgage Investors, Inc.'s commercial mortgage pass-through certificates, series 1996-C2: -- $60.4 million class F to 'BBB+' from 'BB+' and placed on Rating Watch Positive. In addition, Fitch affirms these classes: -- Interest only class IO 'AAA'; -- $39.8 million class G 'B-'. Fitch does not rate the $2.7 million class H. Classes A-1 through E have paid in full. The upgrade of class F reflects the payoff of the Shilo loans as well as a reduction in Fitch-projected losses for the pool. Class F has also been placed on Rating Watch Positive pending receipt of year-end 2006 financials. As of the February 2007 distribution date, the pool's aggregate certificate balance has decreased 91% to $102.9 million from $1.1 billion at issuance. Realized losses to date total $31.4 million. Currently, one loan (1.9%) is in special servicing due to maturity default. The loan is collateralized by a 45-unit multifamily property in New Milford, Connecticut. The loan is projected to pay in full in the first quarter of 2006. Minimal losses, if any, are projected upon the disposition of this loan. Fitch is concerned about the increasingly concentrated nature of this pool, with 35 loans currently remaining. The pool also has high exposure to Florida, which represents 35.8% of the pool. However, 52% of the pool is fully amortizing and the YE 2005 weighted-average debt service coverage ratio for the pool's top five loans is 1.48x. Fitch has identified 14 loans (14.2%) as Fitch Loans of Concern, which includes the specially serviced loans and those loans with low debt service coverage ratio and declining occupancies. The largest Loan of Concern is secured by a 367-unit hotel property located in Kissimmee, Florida. The hotel has been experiencing cash flow declines since 2001 due to the over-saturation of the Orlando hotel market. However, the borrower remains committed to the property, and recently completed renovations should improve the hotel's appeal. Per the December 2006 site inspection, average daily occupancy was 63.6%. NATIONSLINK FUNDING: S&P Holds Class F Certificates' Rating at B ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on two classes of commercial loan pass-through certificates from NationsLink Funding Corp.'s series 1999-LTL-1. Concurrently, the ratings on six other classes from this series were affirmed. The raised ratings reflect increased credit support due to the scheduled amortization of the underlying mortgage collateral, which consists of credit-tenant lease loans and non-CTL loans. The upgrades also reflect the strong operating performance of the non-CTL loans. The affirmed ratings reflect adequate credit support levels. As of the Feb. 22, 2007, remittance report, the collateral pool consisted of 119 loans with an aggregate principal balance of $311.6 million, down 37% from $492.5 million and 128 loans at issuance. One hundred and three loans ($244.7 million, 79%) are fully amortizing CTL loans. Of the remaining 16 loans ($66.9 million, 21%), eight ($47.2 million, 15%) are fully amortizing and eight ($19.7 million, 6%) are amortizing balloon loans. The pool has experienced one realized loss totaling $45,443, and no loans are delinquent or with the special servicer. Midland Loan Services Inc., the master servicer, provided recent property inspection reports for the 10 largest exposures. All of the properties were noted to be in "good" or "excellent" condition. Midland provided Dec. 31, 2005, net cash flow debt service coverage figures for 96% of the non-CTL loans. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.81x, up significantly from 1.44x at issuance. The weighted average credit rating for the loans in the CTL pool is 'BBB,' down from 'A-' at issuance. Although the credit quality of the assets in the CTL pool has declined, it has been mitigated by amortization. Seven loans have bondable CTLs ($53.1 million), while 96 ($191.6 million) have triple- or double-net CTLs that are supplemented by lease enhancement policies provided by Lexington Insurance Co. ('AA+/Stable' financial strength rating). The weighted average credit rating for the loans in the CTL pool is 'BBB,' down from 'A-' at issuance. The top five tenants make up 47% ($114.2 million) of the CTL portion of the pool: Koninklijke Ahold N.V. (11%, BB+/Positive/B); Rite Aid Corp. (10%, B+/Watch Neg/B-2); Home Depot Inc. (10%, A+/Stable/A-1); CVS Corp. (9%, BBB+/Watch Dev/A-2); and Walgreen Co. (7%, A+/Stable/A-1). Midland reported five loans ($16.5 million, 5%) on its Feb. 15, 2007, watchlist, four of which are CTL loans. The four CTL loans are on the watchlist for a variety of reasons, including poor property inspections, vacancies, and possible store closings. All four loans, however, are current and have leases that extend to or beyond their maturities. The remaining loan is on the watchlist due to a decline in DSC, which was 1.05x for the six months ended June 2006. To perform its review, Standard & Poor's used a bifurcated analysis of the transaction: Standard & Poor's examined the underlying tenants and guarantors for the CTL portion of the pool and conducted a real estate analysis for the remaining loans in the pool. The ratings on the certificates may fluctuate over time as the ratings on the underlying tenants and guarantors change for the CTL portion of the pool. Standard & Poor's stressed various loans in its analysis and reviewed the resultant credit enhancement levels in conjunction with the levels determined by Standard & Poor's credit lease default model. Ratings Raised NationsLink Funding Corp. Commercial Loan Pass-Through Certificates Series 1999-Ltl-1 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ B AAA AA+ 22.51% C A+ A 15.79% Ratings Affirmed NationsLink Funding Corp. Commercial Loan Pass-Through Certificates Series 1999-Ltl-1 Class Rating Credit enhancement ----- ------ ------------------ A2 AAA 30.81% A3 AAA 30.81% D BBB 5.91% E BB 2.36% F B 1.17% X AAA N.A. N.A. -- Not applicable. NEW CENTURY: Delays Filing of Form 10-K for Year Ended Dec. 31 -------------------------------------------------------------- New Century Financial Corp. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it won't be able to file its Annual Report on Form 10-K for the year ended Dec. 31, 2006, by the required deadline. As reported in the Troubled Company Reporter on Feb. 20, 2007, the company disclosed that it will restate its consolidated financial results for the quarters ended March 31, June 30 and September 30, 2006 to correct errors the company discovered in its application of generally accepted accounting principles regarding the company's allowance for loan repurchase losses. Audit Committee Investigation In connection with the restatement process, the Audit Committee of the company's Board of Directors, advised by its independent counsel who is assisted by forensic accountants, has initiated its own independent investigation into the issues giving rise to the company's need to restate its 2006 interim financial statements, as well as issues pertaining to the Company's valuation of residual interests in securitizations in 2006 and prior periods. The Audit Committee will expand the scope of its investigation as may be necessary to cover other matters that are developed in the course of its investigation or otherwise come to its attention. The 2006 Form 10-K will be filed after this investigation is complete. In addition, the company is determining the amount of the adjustment to the estimated fair value of its residual interests in securitizations to reflect revised prepayment, cumulative loss and discount rate assumptions with respect to the mortgage loans underlying these assets. The company is revising the assumptions to reflect relevant data such as recent loss experience, changing market conditions and updated expectations regarding higher credit losses and faster prepayment speeds. Material Weakness In accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the company's management is assessing the effectiveness of its internal control over financial reporting as of Dec. 31, 2006, and expects to conclude that there were material weaknesses in the internal control over financial reporting as of Dec. 31, 2006. After management completes its assessment, the Company will include the assessment in the 2006 Form 10-K. The assessment will discuss the material weaknesses that management identifies and the actions that have been and will be taken to remediate these material weaknesses. The considerable work associated with the foregoing matters has delayed the company's completion of the financial and other information to be included in the 2006 Form 10-K. The company is working diligently to finalize its financial statements for the year ended Dec. 31, 2006. In addition, the company is working to provide its independent registered public accounting firm, KPMG LLP, the information that it needs in order to complete its audit of the company's financial statements and internal control over financial reporting. KPMG has informed the company that, among other matters, it will need to be informed of the results of the Audit Committee's investigation and the results of the company's negotiations with its credit providers for covenant waivers and amendments as described in Part IV before completing its audit. About New Century Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. NEW CENTURY: Delay in SEC Filings Cue S&P to Lower Rating to B -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on New Century Financial Corp to 'B' from 'BB-.' The rating remains on CreditWatch with negative implications. "We have growing concerns regarding the amount of financial stress facing New Century following the company's announcement that it will delay the release of its fourth-quarter and full-year 2006 results, as well as the restatement of the first three quarters of 2006. In a residential mortgage market where investors and other participants are rapidly losing confidence, it may be a challenge for the company to work through current credit trends," said Standard & Poor's credit analyst Adom Rosengarten. New Century specializes in high-risk subprime lending. The company's core subprime loans have experienced significant credit deterioration during the past few quarters and Standard & Poor's expects these negative credit trends to continue into 2007. As early payment defaults increased in 2006, New Century has been forced to repurchase a growing number of troubled loans. Upon repurchase, the value of these loans has declined significantly, causing higher credit-related expenses and leading to lower profitability. The restatement is due to a misapplication of SFAS 140 - Accounting for the Transfers and Servicing of Financial Assets and Extinguishment of Liabilities, relating to the company's allowance for loan repurchases. New Century has stated that it underestimated the amount necessary for this allowance as well as the volumes of EPD's during these quarters. These negative operating trends are putting pressure on the company's liquidity profile and may place it at risk of violating critical debt covenants in the coming quarters. Given the uncertain nature of New Century's operating results and the implications of possible further credit quality decline, the rating will remain on CreditWatch with negative implications until the situation becomes more stable. NORMA BARLOW: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Norma Cole Barlow dba Twin Oaks Bed & Breakfast 9565 East Liberty Road Villa Rica, GA 30180 Bankruptcy Case No.: 07-10536 Chapter 11 Petition Date: March 2, 2007 Court: Northern District of Georgia (Newnan) Judge: W. Homer Drake Debtor's Counsel: George M. Geeslin, Esq. Eight Piedmont Center, Suite 550 3525 Piedmont Road, Northeast Atlanta, GA 30305-1565 Tel: (404) 841-3464 Fax: (404) 816-1108 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Georgia Dept. of Revenue Sales and Use Tax $2,000 P.O. Box 105296 Atlanta, GA 30348 Georgia Power Electric Utility $910 42 Community Square Villa Rica, GA 30180 Blossman Glass $650 8905 Highway 5 Douglasville, GA 30134 Internal Revenue Service $525 Personal Property Tax $450 Parisian Credit Card $360 BellSouth Phone Service $350 Douglas Public Health Medical Services $350 Comcast Cable $300 Lowe's Credit Card $250 NORTEL NETWORKS: DBRS Says Restatements Won't Affect Low-B Ratings ----------------------------------------------------------------- Dominion Bond Rating Service notes that Nortel Networks Corporation accounting restatements will not have an immediate impact on its B (low) long-term ratings. DBRS recognizes the size of the accounting restatements are not material and are all non-cash in nature. In addition, the company expects to have its 2006 10K filed by the required Mar. 16, 2007 deadline. However, DBRS has become more concerned regarding Nortel's financial reporting mechanisms. Although the company has publicly indicated that the probability of further accounting restatements have likely become "slimmer," the probability of last minute restatement could still exist until the substantial implementation of its new financial control reporting system which is not expected to occur until the second half of 2007. DBRS acknowledges that management has made progress on the previously identified five major internal control weaknesses outlined in its 2005 10K filing. However, it is still somewhat disconcerting that internal control breaches, even minor ones, have led to increased uncertainty about financial reporting. DBRS will now more closely monitor the change in auditors at Nortel as well as the departure of the current CFO, both of which are occurring during what now appears to be a time of somewhat heightened uncertainty, especially relating to confidence in accurate and timely financial reporting from Nortel. If the filing of accurate financial statements, along with a clear succession path of the company's financial unit is not properly addressed in the near-term, DBRS reserves the right to take negative rating action based solely on these issues, regardless of the financial performance of the Company. DBRS notes that based on current unaudited figures, Nortel's business performance appears acceptable for its current ratings, which is also supported by the Company facing no substantial near-term maturities, a substantial cash balance estimated by management at $3.5 billion, along with the expectation of continued support from Export Development Canada though its $750 million support facility. DBRS estimates that Nortel has approximately $4.5 billion in gross debt outstanding. Notwithstanding, DBRS believes that Nortel needs to put its internal control issues behind it as the communication equipment vendor market continues to undergo a structural shift as a result of competitors merging to create greater economies of scale, while new entrants from emerging markets continue to price aggressively, taking market share away from more established vendors such as Nortel. ON SEMICONDUCTOR: Dec. 31 Balance Sheet Upside-Down by $225.4 Mil. ------------------------------------------------------------------ On Semiconductor Corp. reported net income of $272.1 million on total revenues of $1.532 billion for the year ended Dec. 31, 2006, compared with net income of $100.6 million on total revenues of $1.261 billion in 2005. 2006 net income included $6.9 million in restructuring, asset impairment and other benefits, while 2005 net income included $3.3 million in restructuring, asset impairment and other charges. The company's gross margin increased by approximately 530 basis points to 38.5 percent in 2006 from 33.2 percent in 2005. During the fourth quarter of 2006, the company reported net income of $87.4 million on $401.6 million of total revenues. Net income for the fourth quarter of 2006 included $10.2 million in restructuring, asset impairment and other benefits primarily related to a favorable insurance settlement and gains on idle real property sales. Fourth quarter 2006 results also included approximately $3 million associated with stock based compensation expense due to the adoption of FAS 123(R) Share Based Payment. "2006 was another strong year for the company," said Keith Jackson, ON Semiconductor president and CEO. "For the year, we achieved the highest gross margin, net income and earnings per fully diluted share in the company's history and enter 2007 in a position to continue our strong financial performance. "During the last quarter of 2006, we successfully executed a series of financial transactions enabling the company to reduce the overall cost of its debt and repurchase approximately 12 percent of the company's then outstanding shares of common stock. As we enter 2007, we are excited about our financial prospects for the year which should be fueled by our new product pipeline and ongoing design wins in the Computing, Digital Consumer, Automotive and Power Regulation markets." At Dec. 31, 2006, the company's balance sheet showed $1.416 billion in total assets, $1.621 billion in total liabilities, $20.8 million in minority interests in consolidated subsidiaries, resulting in a $225.4 million total stockholders' deficit. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1ab4 About ON Semiconductor ON Semiconductor Corp. (NASDAQ: ONNN) -- http://www.onsemi.com/ -- supplies power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. The company has operations in Japan and the Czech Republic. PACIFIC LUMBER: Scopac Taps Blackstone as Financial Advisor ----------------------------------------------------------- Scotia Pacific Company LLC seeks the permission of the United States Bankruptcy Court for the Southern District of Texas to employ The Blackstone Group L.P. as its financial advisor. After considering various alternative candidates, Scopac has selected Blackstone to serve as its financial advisor because of the firm's diverse experience and extensive knowledge in the fields of advisory services and bankruptcy. As Scopac's financial advisor, Blackstone will: (a) assist in the evaluation of Scopac's business and prospects; (b) assist in the development of Scopac's long-term business plan and related financial projections; (c) assist in the development of financial data and presentations to the Bankruptcy Court, Scopac's Board of Managers, various creditors and other third parties; (d) analyze Scopac's financial liquidity; (e) evaluate Scopac's debt capacity and alternative capital structures; (f) analyze various restructuring scenarios and the potential impact of the scenarios on the ability to maximize Scopac's estate; (g) provide strategic advice with regard to the Plan; (h) assist in the evaluation of and raising of debt and equity as new financing as part of Scopac's bankruptcy case or Scopac's plan of liquidation or reorganization; (i) participate in negotiations among Scopac and its creditors, suppliers, lessors and other interested parties, as appropriate; (j) value securities offered by Scopac in connection with a plan; (k) provide expert witness testimony as needed; and (l) provide other advisory services as are customarily provided in connection with the analysis and negotiation of a plan as requested and mutually agreed. Scopac will pay Blackstone these fees for the firm's contemplated services: * A $150,000 monthly advisory fee beginning payable on the effective date. Subsequent monthly payments will be payable in advance on each monthly anniversary thereafter. * A $4,150,000 restructuring fee, payable on the consummation of a plan. * A debt financing fee of 2% of the total facility size of any debt financing arranged by Blackstone from non-current lenders, payable upon funding of the facility. * An equity financing fee of 4% of the total equity capital secured by Blackstone from third-party sources, payable upon the funding of the equity capital. Steven Zelin, Blackstone Group's senior managing director, relates that PALCO retained the firm under a PALCO Prepetition Assignment to represent it in its restructuring and reorganization efforts. In connection with the PALCO Prepetition Assignment, Blackstone was paid a $200,000 retainer and a $25,000 expense advance. Subsequently Blackstone received another $39,133 from PALCO for actual out-of-pocket expenses. Blackstone, thereafter, executed an engagement letter to represent PALCO on January 22, 2007. Mr. Zelin assures the Court that Blackstone is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and holds no interest adverse to Scopac for the matters for which it is to be employed. Responses 1. Creditors Committee Maxim B. Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in San Francisco, California, asserts that Scopac's Application should be denied for these reasons: -- There is no emergency to hire Blackstone Group. Scopac's engagement letter with Blackstone Group was signed on January 22, 2007, but Scopac waited weeks before filing its application to hire the firm. -- The Applications filed by Scopac and Pacific Lumber Company to hire Blackstone cannot be considered independent of one another. -- The Official Committee of Unsecured Creditors needs more time to evaluate the proposed compensation structure, which intends to dish out an unjustified and overstated $5,000,000 success fee. 2. Noteholder Committee The Ad Hoc Committee of Timber Noteholders raises the same objection as that of the Creditors' Committee. The Noteholder Committee asks the Court to deny the Application because: (a) Scopac failed to justify the existence of an emergency for the approval of the Application; (b) divergent interests exist, which are separate and distinct from each individual debtor affiliate, and raises the question as to whether or not Blackstone's employment would result in duplicative and overlapping services; (c) Scopac does not need a financial advisor in view of its status as a single asset real estate debtor; and (d) the $4,150,000 success fee sought by Blackstone is unreasonable. Should the Court approve the Blackstone Application, the Noteholder Committee opposes the use of Scopac's cash collateral to pay for Blackstone's services. Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transactions pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on May 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 6, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Scopac Wants to Employ Logan as Claims Agent ------------------------------------------------------------ Scotia Pacific Company LLC seeks the authority of the United States Bankruptcy Court for the Southern District of Texas to employ Logan & Company Inc. as its claims and noticing agent. Scopac believes that Logan's retention would be in its best interest considering the firm's experience, and the competitiveness of its fees. As Scopac's Claims and Noticing Agent, Logan will: (a) prepare and serve required notices in the Scopac's case; (b) file with the Bankruptcy Clerk's Office a declaration of service that includes a copy of the notice involved, an alphabetical list of persons to whom the notice was served and the date and manner of service; (c) maintain copies of all proofs of claim and proofs of interest filed; (d) maintain official an claims register for Scopac by docketing all proofs of claim and proofs of interest on claims register; (e) implement necessary security measures to ensure the completeness and integrity of the claims register; (f) transmit to the Bankruptcy Clerk's Office a copy of the claims register on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; (g) provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours; (h) record all transfers of claims and provide notice of those transfers pursuant to Rule 3001(e) of the Federal Rules on Bankruptcy Procedure; (i) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; (j) promptly comply with further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; (k) tabulate acceptances and rejections to any plan of reorganization and or liquidation filed by Scopac; (l) provide other claims processing, noticing, and related administrative services as may be required from time to time by Scopac; and (m) act as Scopac's balloting agent. Logan agrees to carry out unique functions and will use reasonable efforts to coordinate with Scopac's other professionals to avoid the unnecessary duplication of services. Logan understands that it will be deemed an agent of the Court for the limited purpose of receiving proofs of claim pursuant to Section 105(a) of the Bankruptcy Code. Scopac agrees to pay Logan's standard rates for its services, expenses and supplies at rates in effect on the day the services or supplies are provided, including any related necessary expenses. Scopac has agreed to make a $1,500 advance payment to Logan to be applied to the final bill. Kathleen Logan, president of Logan & Company, assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transactions pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on May 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 6, http://bankrupt.com/newsstand/or 215/945-7000). PENNSYLVANIA PORT AUTHORITY: Fitch Holds BB+ Rating on Bonds ------------------------------------------------------------ Fitch Ratings affirms the rating on approximately $2.2 million series 1997 Erie-Western Pennsylvania Port Authority revenue bonds at 'BB+'. The Rating Outlook is revised to Stable from Negative. Port bonds are secured by a pledge of port operating revenues together with income derived from the Commonwealth of Pennsylvania subject to annual appropriation by the state general assembly. Fitch does not rate the authority's $3 million series 2006 revenue bonds, but that debt was factored into the port's rating and outlook. The series 1997 bonds were initially underwritten by PNC Capital Markets. The 'BB+' rating is principally supported by the historical grant support given by the commonwealth and also on the essentiality of products shipped through the port to the regional construction industry. The rating also acknowledges the significant credit risks, which include the port's negative operating margin and its reliance on the state grant to close the shortfall in operating income, fund debt service and pay for capital projects. The Outlook was changed to Stable because port does retain some flexibility to meet its financial obligations over the next several years. Furthermore, improvement in the port's credit rating or outlook is not wholly dependent on the port returning to break-even or positive operations, net of commonwealth support. Ongoing state support to fund debt service and close the gap in operations, combined with the port's improved fiscal 2006 fund balances, should offset the expected operating deficits over the medium term while management develops steps to return its operations to break-even or more stable financial performance. The port should also gain significant financial flexibility in fiscal 2011 and beyond when the series 1997 bonds are fully paid and debt service drops to $424,000 from $1.1 million currently. Rating improvement in the medium term is possible if the port continues to demonstrate prudent capital project management to better time project expenses with available revenues, succeeds at minimizing or stabilizing the operating loss or implements programs that generate additional revenue streams. The port finished fiscal year 2006 with a $1.1 million operating loss, a significant increase from the previous year's $573,000 operating loss. Revenues for fiscal 2006 were comparable to 2005 but expenses for 2005 and 2006 were much higher than previous years due to the cost of repairs related to a mudslide on port property. Management has estimated that repair and mitigation costs totaled approximately $780,000 in the last two fiscal years, but should decline to $50,000 for fiscal 2007 as most of the work is complete. Unrestricted cash balances, however, improved to $3.1 million as of January 2007 from $2.2 million at the close of fiscal 2005 due in part to the sale of a parcel of land for $1 million and to a $1.3 million settlement received as part of a separate legal suit concerning a port contractor. Overall port operations have run a combined $3.3 million operating deficit since fiscal year 1999 due to increasing operating expenses related to new projects. The largest of these projects was the Erie Intermodal Center, a 33,500 square foot facility which provides a central terminal for the city of Erie's various transportation systems. Port management had expected that the center's rental income would cover operating expenses. However, the center itself has incurred a combined $450,000 operating deficit since opening in fiscal 2003. Additional rental space at the center is limited, thus management's ability to close the port's overall operating deficit will largely depend on efforts to control or cut expenses at the center or increase revenues from other port operations. The port derives a significant portion of its income from fixed long-term operating leases, limiting management's ability to regularly adjust rates and resulting in revenue growth averaging just 2% per year since 1999. Fitch believes that ongoing operating deficits are likely in the near term. The port in recent years has also become increasingly dependent on its annual state grant, which serves to balance annual operations but is subject to appropriation risk as the state is not obligated to fund operations, debt service or capital projects at the port. The port received $1.5 million in funds from 1986 through 1997, and $2 million from 1997 through 2003, $1.7 million for fiscal 2004 due to slowed economic growth, and increased grants of $2 million in fiscal 2005, $2.5 million in fiscal 2006 and $2.6 million in fiscal 2007. Prior to 1999, the grant was generally allocated to pay principal and interest on the bonds and to fund capital projects, but beginning with the port's operating losses in fiscal 1999, management has needed to allocate portions of the grant towards operating costs as well. The $2.5 million state grant received in fiscal 2006 funded approximately $1.2 million in debt service, $921,000 in operations and $414,000 in capital projects. PROCARE AUTOMOTIVE: Court Confirms Amended Liquidation Plan ----------------------------------------------------------- The Hon. Pat E. Morgenstern-Clarren of the U.S. Bankruptcy Court for the Northern District of Ohio confirmed ProCare Automotive Service Solutions LLC's amended chapter 11 plan of liquidation. Overview of the Modified Plan The Plan provides for the classification and treatment of claims against and interest in the Debtor. Pursuant to a creditor trust agreement, the Debtor will establish a "creditor trust" for the purpose of: a) administering and liquidating creditor trust assets; b) resolving all disputed claims to the extent not previously resolved by the Debtor; and c) making all distributions provided for under the Plan in respect of Class 3 Allowed Claims and all other claims that become allowed claims following to the effective date of the Plan; provided however, that no real property assets of the Debtor will be transferred to the creditor trust and only the net proceeds from the disposition of the real property assets will be remitted to the creditor trust and once remitted, that proceeds will then become creditor trust assets. Treatment of Claims Under the Amended Plan, each holder of allowed administrative claims, priority tax claims and other priority claims will be paid in full. Holders of other secured claims will receive, on the distribution date, cash in an amount equal to the allowed amount of their other secured claims. Allowed general unsecured claims are entitled to their pro rata share of the available cash. Holders of non-compensatory damages claims will receive nothing in any distribution under the Plan and all equity interests will be cancelled. Based in Independence, Ohio, ProCare Automotive Service Solutions, LLC -- http://www.procareauto.com/-- offered maintenance and repair services to all makes and models of foreign, domestic, light truck, and commercial-fleet vehicles. ProCare operated 82 retail locations in eight metropolitan areas throughout three states. The Debtor filed for chapter 11 protection on March 5, 2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R. Lepene, Esq., Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson Hine LLP, represent the Debtor. Scott N. Opincar, Esq., at McDonald Hopkins Co., LPA, represents the Official Committee of Unsecured Creditors. Joseph M. Geraghty at Conway MacKenzie & Dunleavy gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. RAY'S DEVELOPMENT: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Ray's Development LLC P.O. Box 1292 Knightdale, NC 27545 Bankruptcy Case No.: 07-00392 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Rogdrick LLC 07-00393 Smithfield Road LLC 07-00394 Evolution VII LLC 07-00395 Chapter 11 Petition Date: February 28, 2007 Court: Eastern District of North Carolina (Raleigh) Judge: A. Thomas Small Debtors' Counsel: Douglas Q. Wickham, Esq. Hatch, Little & Bunn, LLP P.O. Box 527 Raleigh, NC 27602 Tel: (919) 856-3940 Fax: (919) 856-3950 Estimated Assets Estimated Debts ---------------- --------------- Ray's Development LLC $1 Million to Not Stated $100 Million Rogdrick LLC $1 Million to $1 Million to $100 Million $100 Million Smithfield Road LLC $100,000 to $100,000 to $1 Million $1 Million Evolution VII LLC $1 Million to $1 Million to $100 Million $100 Million A. Ray's Development LLC's Seven Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Coastal Credit Union $19,184 Attn: Managing Agent P.O. Box 30495 Tampa, FL 33630 Bank of America $18,771 Attn: Managing Agent P.O. Box 2463 Spokane, WA 99210-2463 Lowes $18,589 Attn: Managing Agent P.O. Box 2918 Shawnee Mission, KS 66201 Bank of America $11,520 Attn: Managing Agent P.O. Box 2463 Spokane, WA 99210-2463 Interior Distributors $10,398 Attn: Managing Agent P.O. Box 14126 Raleigh, NC 27620 Wake County Revenue Department $8,487 Attn: Managing Agent P.O. Box 2331 Raleigh, NC 27602-2331 Citibusiness $3,800 Attn: Managing Agent P.O. Box 44180 Jacksonville, FL 32231-4180 B. Rogdrick LLC's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Wake County Revenue Department $11,755 Attn: Managing Agent P.O. Box 2331 Raleigh, NC 27602-2331 C. Smithfield Road LLC's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Wake County Revenue Department $1,977 Attn: Managing Agent P.O. Box 2331 Raleigh, NC 27602-2331 D. Evolution VII LLC's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Wake County Revenue Department $4,743 Attn: Managing Agent P.O. Box 2331 Raleigh, NC 27602-2331 REALOGY CORP: Moody's Rates Proposed $4.27 Billion Facility at Ba3 ------------------------------------------------------------------ Moody's Investors Service assigned a provisional corporate family rating of B3 in connection with the pending leveraged buyout of Realogy Corporation. Moody's concurrently assigned a Ba3 rating to the proposed $4.27 billion senior secured credit facility, which along with senior unsecured and subordinated indebtedness, will be used to finance the leveraged buyout. The B3 Corporate Family Rating of Realogy reflects weak pro forma financial strength and profitability metrics, Moody's expectation of continued softness in the residential real estate market in the intermediate term and minimal business line diversification. The ratings are supported by leading market positions, strong brands and long term growth fundamentals for the existing home segment of the residential real estate industry. The $4.27 billion senior secured credit facility consists of -- a $1.45 billion term loan facility; -- a $1.22 billion delayed draw term loan facility; -- a $750 million revolving credit facility; and -- an $850 million synthetic letter of credit facility. The provisional ratings will be converted to definitive ratings upon the closing of the transaction. The rating outlook for Realogy is stable. On Dec. 19, 2006, Moody's placed the Baa2 senior unsecured note ratings of Realogy Corporation on review for possible downgrade following its disclosure that it had entered into a definitive agreement to be acquired by an affiliate of Apollo Management, L.P. The buyout is expected to be financed with a $1.45 billion term loan facility, $220 million of initial borrowings under a $750 million revolving credit facility, $2 billion of senior unsecured cash pay notes, $750 million of senior unsecured PIK toggle notes, $900 million of senior subordinated notes and an equity contribution of $2.0 billion. Consummation of the merger is not subject to a financing condition, but is subject to other conditions, including receipt of the affirmative vote of the holders of a majority of the outstanding shares of Realogy, insurance regulatory approvals, and other customary closing conditions. The buyout is expected to close in April 2007. The $1.22 billion delayed draw term loan facility may be used to redeem up to $1.2 billion of existing fixed and floating rate senior unsecured notes of Realogy to the extent put to the Company after a ratings downgrade to non investment grade and change of control. Of the $1.2 billion delayed draw facility, $970 million will be available through July 31, 2007 and can be used to complete any change of control offers with respect to the existing senior notes. The remaining $250 million will be available through Oct. 31, 2007 and may be used to complete any change of control offers or to fund the redemption of the $250 million of existing floating rate notes once their par call period commences on Oct. 22, 2007. The indenture governing the existing senior notes provide that if Realogy experiences a change of control and the ratings on the notes are lowered to non-investment grade by each rating agency within 60 days after the change in control, the company will be required to offer to purchase the notes at 100% of their principal amount, plus accrued and unpaid interest. Upon closing of the buyout, the existing senior notes of Realogy will become secured in accordance with the terms of the indenture and will rank pari passu with the new secured bank facilities of the company. If the company obtains shareholder approval for the adoption of the merger agreement, Moody's will conclude its review for possible downgrade and lower the ratings on the existing senior notes to Ba3. The Ba3 rating would reflect the notes expected priority position in the post-acquisition capital structure and the significant amount of junior ranking debt and non-debt obligations. Moody's affirmed the Baa2 ratings on the existing $1.65 billion senior unsecured credit facility since the rating agency expects this debt to be repaid in connection with the closing of the transaction. Moody's will withdraw the senior unsecured credit facility ratings upon closing of the transaction. These ratings were assigned: * Realogy Corp. -- $750 million 6 year secured revolving credit facility, Ba3, LGD2, 19% -- $1.45 billion 7.5 year secured term loan, Ba3, LGD2, 19% -- $1.22 billion 7.5 year delayed draw term loan facility, Ba3, LGD2, 19% -- $850 million 7.5 year secured synthetic letter of credit facility, Ba3, LGD2, 19% -- Corporate family rating, B3 -- Probability of Default rating, B3 The above ratings are subject to Moody's review of final documentation. These ratings remain on review for downgrade: * Realogy Corp. -- $250 million floating rate senior unsecured notes due 2009, Baa2 -- $450 million senior unsecured notes due 2011, Baa2 -- $500 million senior unsecured notes due 2016, Baa2 -- Senior unsecured issuer rating, Baa2 Affirmed: -- $1.05 billion senior unsecured revolving credit facility due 2011, Baa2 -- $600 million senior unsecured term loan facility due 2011, Baa2 Realogy Corporation is one of the largest real estate service companies in the world with reported revenues of about $6.5 billion in the year ended Dec. 31, 2006. The company operates in four segments: real estate franchise services, company owned real estate brokerage services, relocation services and title and settlement services. The franchise brand portfolio includes Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby's International Realty. RELIANT ENERGY: S&P Holds B Rating and Revises Outlook to Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Reliant Energy Inc. and revised the outlook on the company to positive from stable. The ratings action is the result of the annual review for Reliant Energy and its subsidiaries and accounts for improvement in the company's financial profile. "If Reliant can demonstrate consistently strong cash flow generation while preserving a strong capital structure in the medium term, we could potentially raise the rating on the company," said Standard & Poor's credit analyst Dimitri Nikas. Reliant Energy's capital structure improved during 2006, a result of debt repayment and the conversion into equity of some of its debt. Reliant Energy has a weak business risk profile, characterized by high business risk, unregulated retail electricity supply, and wholesale electricity generation operations. These operations have been challenged in the past few years, both from an operational and regulatory perspective, performing below expectations. RESIDENTIAL ACCREDIT: Fitch Rates $4MM Class B-2 Certificates at B ------------------------------------------------------------------ Fitch rates Residential Accredit Loans, Inc. mortgage pass-through certificates, series 2007-QS3: -- $906,027,412 classes A-1 through A-6, A-P, A-V and R certificates (senior certificates) 'AAA'; -- $32,063,500 class M-1 'AA'; -- $11,173,500 class M-2 'A'; and -- $8,258,700 class M-3 'BBB'; In addition, Fitch rates privately offered subordinate certificates as: -- $100 class P 'AAA'; -- $5,829,700 class B-1 'BB'; and -- $4,372,200 class B-2 'B'. The $3,886,523 class B-3 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 6.75% subordination provided by the 3.30% class M-1, the 1.15% class M-2, the 0.85% class M-3, the privately offered 0.60% class B-1, the 0.45% privately offered class B-2 and the 0.40% privately offered class B-3. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and Residential Funding Corp.'s servicing capabilities as master servicer. As of the cut-off date, Feb. 1, 2007, the mortgage pool consists of 3,594 conventional, fully amortizing, 30-year fixed-rate, mortgage loans secured by first liens on one- to four-family residential properties with an aggregate principal balance of $971,611,637. The mortgage pool has a weighted average original loan-to-value ratio of 73.77%. The pool has a weighted average FICO score of 703, and approximately 35.55% and 20.01% of the mortgage loans possess FICO scores greater than or equal to 720 and less than 660, respectively. Equity refinance loans account for 41.01%, and second homes account for 2.98%. The average loan balance of the loans in the pool is $270,343. The three states that represent the largest portion of the loans in the pool are California (17.05%), Florida (12.64%) and New Jersey (7.58%). All of the mortgage loans were purchased by the depositor through its affiliate, Residential Funding, from unaffiliated sellers as described in this prospectus supplement and in the prospectus, except in the case of approximately 45.8% of the mortgage loans, which were purchased by the depositor through its affiliate, Residential Funding, from Homecomings, a wholly-owned subsidiary of Residential Funding, and approximately 7.4% of the mortgage loans, which were purchased by the depositor through its affiliate, Residential Funding, from GMAC Mortgage, LLC, an affiliate of Residential Funding. No unaffiliated seller sold more than 10% of the mortgage loans to Residential Funding. Approximately 59.4% of the mortgage loans are being subserviced by Homecomings, a wholly-owned subsidiary of Residential Funding and approximately 13.6% of the mortgage loans are being subserviced by GMAC Mortgage, LLC, an affiliate of Residential Funding. None of the mortgage loans were subject to the Home Ownership and Equity Protection Act of 1994. Furthermore, none of the mortgage loans are loans that, under applicable state or local law in effect at the time of origination of the loan are referred to as (1) 'high-cost' or 'covered' loans or (2) any other similar designation if the law imposes greater restrictions or additional legal liability for residential mortgage loans with high interest rates, points and/or fees. The mortgage loans were originated under GMAC-RFC's Expanded Criteria Mortgage Program. Alt-A program loans are often marked by one or more of the following attributes: a non-owner-occupied property; the absence of income verification; or a loan-to-value ratio or debt service/income ratio that is higher than other guidelines permit. In analyzing the collateral pool, Fitch adjusted its frequency of foreclosure and loss assumptions to account for the presence of these attributes. Deutsche Bank Trust Company Americas will serve as trustee. RALI, a special purpose corporation, deposited the loans in the trust, which issued the certificates. For federal income tax purposes, an election will be made to treat the trust fund as a real estate mortgage investment conduit. RESIDENTIAL FUNDING: Fitch Rates $944,300 class B-2 Certs. at B --------------------------------------------------------------- Fitch rates Residential Funding Mortgage Securities I, Inc.'s mortgage pass-through certificates series 2007-S2: -- $454,480,459 classes A-1 through A-14, A-P, A-V, R-I and R-II certificates (senior certificates) 'AAA'; -- $9,444,500 class M-1 'AA'; -- $3,069,200 class M-2 'A'; -- $2,361,000 class M-3 'BBB'; -- $944,400 privately offered class B-1 'BB'; and -- $944,300 privately offered class B-2 'B'. The $944,453 (privately offered) class B-3 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 3.75% subordination provided by the 2% class M-1, the 0.65% class M-2, the 0.50% class M-3, the 0.20% privately offered class B-1, the 0.20% privately offered class B-2 and the 0.20% privately offered class B-3. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and Residential Funding Corp.'s master servicing capabilities. As of the cut-off date, Feb. 1, 2007, the mortgage pool consists of 952 conventional, fully amortizing, 30-year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an aggregate principal balance of approximately $472,188,313. The mortgage pool has a weighted average original loan-to-value ratio of 70.93%. The weighted-average FICO score of the loans in the pool is 738, and approximately 65.99% of the mortgage loans possess FICO scores greater than or equal to 720 and 6.92% of the mortgage loans posses FICO scores less than 660. Loans originated under a reduced loan documentation program account for approximately 38.44 % of the pool, equity refinance loans account for 36.62%, and second homes account for 4.91%. The average loan balance of the loans in the pool is approximately $495,996. The three states that represent the largest portion of the loans in the pool are California (33.94%), Virginia (10.76%), and New Jersey (5.44%). None of the mortgage loans were subject to the Home Ownership and Equity Protection Act of 1994. Furthermore, none of the mortgage loans in the pool are mortgage loans that are referred to as 'high-cost' or 'covered' loans or any other similar designation under applicable state or local law in effect at the time of origination of such loan if the law imposes greater restrictions or additional legal liability for residential mortgage loans with high interest rates, points and/or fees. All of the mortgage loans were purchased by the depositor through its affiliate, Residential Funding, from unaffiliated sellers as described in this prospectus supplement and in the accompanying prospectus, except in the case of approximately 35.2% and 19.5% of the mortgage loans, which were purchased by the depositor through its affiliate, Residential Funding, from Homecomings and GMAC Mortgage, LLC, respectively. Approximately 11.7% of the mortgage loans were purchased by Residential Funding from First Savings Mortgage Corp., an unaffiliated seller. Except as described in the preceding sentence, no unaffiliated seller sold more than approximately 5.7% of the mortgage loans to Residential Funding. Approximately 57.1% and 34.8% of the mortgage loans are being subserviced by Homecomings and GMAC Mortgage, LLC, respectively, each an affiliate of Residential Funding. U.S. Bank National Association will serve as trustee. RFMSI, a special purpose corporation, deposited the loans in the trust, which issued the certificates. For federal income tax purposes, an election will be made to treat the trust fund as two real estate mortgage investment conduit. RIVERDEEP INTERACTIVE: Filing Delay Cues S&P's Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on HM Rivergroup PLC and its subsidiary, Riverdeep Interactive Learning USA Inc., on CreditWatch with negative implications, based on Standard & Poor's concern about the ability of intermediate parent Riverdeep Interactive Learning Ltd. to issue upcoming financial statements on a timely basis. Ratings on CreditWatch: * HM River -- Corporate Credit Rating, B- * Riverdeep Interactive Learning USA, Inc. -- Corporate Credit Rating, B- RILL has replaced its auditors following the resignation of Ernst & Young. Under the company's lending agreements, RILL must produce financial statements by March 31, 2007, which it expects it can do. However, a delay in issuing financial statements could lead to an event of default, unless lenders waive their rights relating to the company's reporting requirements. Consolidated total debt and preferred stock at Sept. 30, 2006, totaled roughly $3.5 billion. Separately, Riverdeep Interactive Learning USA Inc. is no longer marketing its $250 million add-on to its senior secured first-lien term loan B. The company had intended to use the proceeds from this transaction to reduce the $1.07 billion increasing-rate bridge loan that helped finance HM Rivergroup PLC's December 2006 acquisition of Houghton Mifflin LLC, which would have reduced interest costs slightly. "We will resolve the CreditWatch listing after reviewing the company's operations, cash flow, and liquidity, as shown on its audited financial statements for the fiscal year ended Dec. 31, 2006," said Standard & Poor's credit analyst Hal F. Diamond. ROGERS COMMS: Fitch Lifts Issuer Default Rating to BBB- from BB --------------------------------------------------------------- Fitch has upgraded the ratings for Rogers Communications Inc. and its subsidiaries as: Rogers Communications Inc. -- Issuer Default Rating 'BBB-' from 'BB'. Rogers Wireless Inc. -- IDR 'BBB-' from 'BB'; and -- Senior secured notes 'BBB-' from 'BB+'. Rogers Cable Inc. -- IDR 'BBB-' from 'BB'; and -- Senior secured second priority notes 'BBB-' from 'BB+'. Fitch also affirms the senior subordinated ratings of Wireless at 'BB'. The Rating Outlook is Stable for Rogers and its subsidiaries. Approximately $6.3 billion of debt securities are affected by these actions. The upgrades reflect Roger's rapidly improving credit measures driven by the increasing profitability at the wireless segment that has exceeded expectations, debt reduction of approximately $750 million during 2006 and its robust bundled service offering across the wireless and cable assets. Accordingly, free cash flow based on Fitch adjustments improved in excess of $800 million in 2006 compared with a deficit of approximately $166 million in 2005. Leverage has likewise improved to 3.0x compared to 4.2x at the end of 2005. Fitch expects RCI will continue to improve credit measures in 2007 with leverage decreasing to the low to mid 2's. Rogers has realized the inherent operating leverage and ability to scale the wireless operations given the relatively supportive regulatory and balanced competitive environments. As a result during 2006, Wireless significantly increasing its profitability as evidenced by the following metrics: -- Total ARPU increased 8% in 2006 to $56.1 with data ARPU up 39% to $6.0; -- Total Churn decreased 30 basis points to 1.8%; -- Postpaid subscriber growth showed strength with a 12% increase to 5.4 million. -- CPGA increased slightly by 3% to $399 and CPGA as a % of lifetime revenue decreased approximately 300 basis points to 12.9%; -- Total revenue increased 19% to $4.6B; -- EBITDA margin increased significantly by over 800 basis points to 43%; and -- Free cash flow surged by approximately 70% to $1.3 billion. In Fitch's opinion, the favorable characteristics of the Canadian wireless industry suggest stability and more predictable operating performance that set the stage for healthy revenue and cash flow prospects particularly when compared to the U.S. The Canadian wireless industry benefits from three comparatively sized players, lower penetration rates, relatively lower minute usage, low churn and positively trending ARPU. Consequently industry EBITDA margins for the LTM are in excess of 41%, approximately 850 basis points higher than the U.S. Fitch does not expect the introduction of number portability in 2007 to adversely affect the wireless industry although a spectrum auction expected in early 2008 of 105 MHz spectrum in the 2GHz range could have negative credit implications for the industry particularly if spectrum is set aside for new entrants. Over the medium-term, Fitch believes Rogers Wireless will continue with solid subscriber growth with modest increases to ARPU resulting in greater free cash flow despite higher capital spending requirements for its HSDPA network although margin expansion should slow considerably. Fitch believes that the combination of Rogers Cable's scale and its unique set of assets that position the company to offer a quadruple play will drive further improvement to Rogers Cable's credit profile during 2007. In Fitch's opinion the company's service bundling strategy enhances Rogers Cable's competitive position relative to direct broadcast satellite providers and other incumbent telephone companies. Credit concerns include the on - going cash requirements at cable. With materially higher capital requirements in 2007, the free cash flow deficit at Cable will not improve and could increase moderately. Fitch continues to believe that the company's core cable and telephone businesses are well positioned to generate positive free cash flow. However, Fitch anticipates that Rogers Home Phone will continue to use cash during 2007 as the company scales this segment. Rogers' liquidity position is strong given the cash generation at Wireless, the undrawn revolver capacity at its three subsidiaries, Cable's declining cash requirements and the significant flexibility in advancing funds throughout the company. At the end of 2006, Rogers had approximately $2.1 billion of undrawn revolver capacity through its three main operating subsidiaries. Wireless maintains a $700 million bank credit facility maturing in 2010 that was undrawn at the end of 2006. Cable's bank credit facility is $1.0 billion consisting of two tranches: a $600 million revolving credit facility that matures in 2010 and a $400 million revolver that also matures in 2010, which were both undrawn. Subsequent to the end of 2006, Cable repaid the $450 million note maturing in February 2007 primarily using funds drawn from the Wireless bank facility. Rogers has the ability to redeem or refinance its $550 million senior secured floating rate notes with a current redemption price of 102. After Dec. 15, 2008, the $400 million senior subordinated notes are redeemable at a price of 104. Fitch notes that the company controls a collateral release option on the Cable debt, which could be used to help simplify Rogers' capital structure. All of the Cable debt includes a springing release of security provision in the event the senior secured notes are rated investment grade by two agencies and there is no other debt or cross currency agreement secured by a bond issued under the Cable deed of trust. However, this is not the case for Wireless. The senior secured debentures maturing in 2016 as well as bank and swap agreements do not contain the springing release provision. The ratings do not currently consider any potential M&A activity. Fitch anticipates that if Rogers implements any shareholder friendly initiatives, such as a share repurchase program, the plans would be consistent with its current ratings. SCHOONER TRUST: DBRS Confirms Low-B Ratings on Six Class Certs. --------------------------------------------------------------- Dominion Bond Rating Service finalized the provisional ratings of the following classes of Schooner Trust, Series 2007-7 Commercial Mortgage Pass-Through Certificates: * Class A-1 at AAA * Class A-2 at AAA * Class XP at AAA * Class XC at AAA * Class B at AA * Class C at A * Class D at BBB * Class E at BBB (low) * Class F at BB (high) * Class G at BB * Class H at BB (low) * Class J at B (high) * Class K at B * Class L at B (low) The XP and XC balances are notional. The trends are Stable. The collateral consists of 72 fixed-rate loans secured by 73 multi-family and commercial properties. The portfolio has a balance of CDN$427,572,194. Although approximately 50.2% of loan collateral is located in Ontario, this is mitigated by Ontario being the largest province with a highly urbanized population. Based on DBRS's site inspections, 6.9% of the sample properties were considered to have excellent property quality and 26.9% of the sample to have above-average property quality. Fifty-five per cent of the pool provides for full or partial recourse to the loans. The collateral properties are predominantly located in urban locations. DBRS shadow-rates one loan -- MTS Building, representing 9.6% of the pool -- investment grade at BBB (low). The investment-grade shadow-rated loans indicate the long-term stability of the underlying assets. The pool weighted-average DBRS-stressed term debt service coverage ratio is 1.35x; the weighted-average DBRS-stressed refinance DSCR is 1.39x. The DBRS-stressed loan-to-value is 81.5% and seven loans, 16.8% of the pool, have a DBRS-stressed LTV greater than 90%. SEALY CORPORATION: Earns $74 Million in Year Ended November 26 -------------------------------------------------------------- Sealy Corp. reported net earnings of $74 million on net sales of $1.582 billion for the fiscal year ended Nov. 26, 2006, compared with net earnings of $68.5 million on net sales of $1.469 billion for the comparable period a year earlier. Gross profit was $707.9 million, or 44.7% of sales, versus $651.6 million, or 44.3% of sales, for the comparable period a year earlier. Fiscal 2006 results include $34.2 million of charges related to the company's IPO and associated debt extinguishments, $26.7 million of incremental cost related to the launch of Sealy's new products and $2.6 million of incremental expense for non-cash compensation versus the comparable prior year, partially offset by a reduction in charges of $5.7 million due to changes in estimates underlying the reserves for workers' compensation claims. Net sales for the fiscal quarter ended Nov. 26, 2006, increased 8.4% to $395.3 million from $364.6 million for the comparable period a year earlier on unit volume growth of 4.9% and average unit selling price increase of 3.3%. International net sales increased $22.9 million or 26.1% to $110.7 million. Domestic net sales increased 2.8% to $284.6 million as average unit selling price improved 4.4% and unit volume declined 1.6%. Fourth quarter gross profit was $177.5 million, or 44.9% of sales, versus $159.5 million, or 43.7% of sales, for the comparable period a year earlier. The improvement in gross profit as a percent of sales was driven by improved manufacturing efficiencies including a reduction in the reserve for workers' compensation claims, partially offset by increased floor sample discounts and the strength of Sealy's international business and domestic promotional lines which carry lower gross margins compared to the company average. Net income for the fourth quarter was $21.5 million, versus $15.2 million for the comparable period a year ago. Fourth quarter results include incremental pre-tax expenses of $5.9 million related to the launch of Sealy's new products and $400,000 of incremental expense for non-cash compensation versus the comparable prior year period. "I am pleased with our achievements in 2006, including over 20% growth in our international markets, near doubling of our specialty business, an improving trend in domestic unit shipments, and ongoing strengthening in promotional mattresses, a segment where we were historically underrepresented. We accomplished these in light of a challenging industry and competitive environment during a year in which we also completed the biggest product transition in the Company's history," said David J. McIlquham, Sealy's Chairman and Chief Executive Officer. At Nov. 26, 2006, the company's balance sheet showed $1.002 billion in total assets, $1.155 in total liabilities, and $20.3 million in common stock and options subject to redemption, resulting in a $172.8 million total stockholders' deficit. Cash and Cash Equivalents As of Nov. 26, 2006, Sealy's cash and cash equivalent balance was $45.6 million versus $36.6 million at the beginning of the fiscal year. The company has reduced total debt net of cash by $149.3 million to $786.9 million since the beginning of the fiscal year. This reduction was attributable to proceeds from the company's initial public offering (IPO) and strong operating cash flow, partially offset by the addition of $26.5 million in financing obligations and $30.9 million in capital expenditures. About Sealy Corp. Sealy Corporation (NYSE: ZZ) -- http://www.sealy.com/ -- is the largest bedding manufacturer in the world with sales of nearly $1.6 billion in 2006. The company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), Stearns & Foster(R), and Bassett(R) brands. Sealy has the largest market share and highest consumer awareness of any bedding brand in North America. Domestically, Sealy has 21 plants and sells its products to 2,900 customers with more than 7,000 retail outlets. Sealy is also a leading supplier to the hospitality industry. * * * Sealy Corp. carries Standard & Poor's 'BB-' Long Term Foreign Issuer Credit and Long Term Local Issuer Credit ratings. Ratings were effective May 24, 2006. Outlook is Stable. SGS INTERNATIONAL: Good Performance Cues S&P's Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on SGS International Inc. to stable from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'B+' corporate credit rating. The outlook revision reflects Standard & Poor's increased comfort with SGS International's operating and financial strategies since its acquisition by Citigroup Venture Capital Equity Partners L.P. at the end of 2005. SGS International is expected to continue to generate a meaningful amount of free operating cash flow, which will help fund the company's acquisition and debt reduction activities. S&P expects that SGS International will be able to maintain its debt to EBITDA measure in the mid-4x to mid-5x range. Near-term ratings upside is currently limited due to Standard & Poor's expectations for continued growth through acquisition. Also, if the company is unsuccessful in finding appropriate acquisitions, there is the potential for special dividends. However, if SGS International demonstrates the ability and willingness to maintain leverage below the mid-4x area over time, higher ratings would be considered. A consideration for lower ratings is currently less likely, given Standard & Poor's increased comfort with the company's operating strategy. SIGN SERVICES: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Sign Services, LLC dba Ad-Craft 5601 Old Boonville Highway Evansville, IN 47715 Bankruptcy Case No.: 07-701097 Type of Business: The Debtor manufactures electric signs and illuminated awnings. Chapter 11 Petition Date: February 16, 2007 Court: District of Indiana (Evansville) Judge: Basil H. Lorch III Debtor's Counsel: Douglas Warren Patterson, Esq. Law Office of Douglas Patterson 2221 West Franklin Street Evansville, IN 47712 Tel: (812) 424-2991 Fax: (812) 468-8690 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ San-Dare, Inc 82D03-0606-CC- $404,195 P.O. Box 3872 2441 purchase of Secured: Evansville, IN 47737 Ad-Craft; third $675,18 7 lien on all business assets Unsecured: (inventory, $742,933 materials, accounts receivables, etc.) Mounts Electric, Inc. Services rendered $39,0525 P.O. Box 3273 Evansville, IN 47731 McCormick Insurance Agency Commercial $7,319 1115 Weed Lane insurance Vincennes, IN 47591 Internal Revenue Service 941 Taxes $26,432 N. Glantz & Sons Purchases of $23,734 merchandise Powers Welding Purchases of $23,734 merchandise Tubelite Company, Inc. Purchase of $11,339 merchandise Wright Express Credit card $10,171 Fleet Fueling purchases Meyer Plastics Purchases of $5,703 merchandise Meuth Construction Purchases of $5,272 Supply,Inc. merchandise Verizon Wireless Cellular phone $4,198 service TENNECO INC: Timothy Donovan Resigns as Executive Vice-President ---------------------------------------------------------------- Tenneco Inc. disclosed that Timothy R. Donovan, executive vice president, general counsel and member of the board of directors, is leaving the company to pursue another opportunity. His resignation from Tenneco is effective March 16, 2007. His resignation from the company's board of directors was effective February 28, 2007. Tim joined Tenneco as senior vice president and general counsel in August 1999. Both internal and external candidates will be considered to fill the general counsel position. "Tim has played an important role in establishing Tenneco as a successful stand-alone company. Over the past seven years, his leadership and strong legal counsel have greatly facilitated Tenneco's restructuring efforts and growth strategies around the world," said Gregg Sherrill, chairman and CEO, Tenneco. "On behalf of all Tenneco employees, I thank Tim for his outstanding contributions and dedication. We wish him much success in his new endeavor." Headquartered in Lake Forest, Ill., Tenneco Inc. (NYSE: TEN) -- http://www.tenneco.com/-- is a global producer of automotive emission control and ride control systems and products. As an automotive parts supplier, the company designs, engineers, manufactures, markets and sells individual component parts for vehicles, as well as groups of components that are combined as modules or systems within vehicles. Tenneco serves both original equipment manufacturers and replacement markets worldwide through such brands as Monroe(R), Rancho, Clevite(R)Elastomers, and Fric Rot ride control products, and Walker(R), Fonos and Gillet(TM) emission control products. The company's aftermarket customers include full line and specialty warehouse distributors, retailers, jobbers, installer chains and car dealers. TENNECO INC: Moody's Rates $830 Million Loans at Ba1 ---------------------------------------------------- Moody's Investors Service has assigned Ba1 ratings to the new first-lien senior secured credit facilities of Tenneco Automotive, Inc. In a related action, Moody's has affirmed these ratings: * the company's Corporate Family Rating at B1; and, * the ratings on the senior secured second-lien notes and senior subordinated notes, at B1 and B3, respectively. The outlook remains stable. Tenneco's business profile as an automotive component supplier is strong, benefiting from good geographic and customer diversity and well balanced exposures to the original equipment and aftermarket segments. The company's leading positions in the markets it serves are well defended by ongoing investment in new technologies. Tenneco's emission technologies for diesel engines and portfolio of ride control technologies for passenger and commercial vehicles should enable it to increase its content on vehicle platforms and demonstrate strong revenue growth even as overall automotive demand weakens. These attributes are potentially supportive of a higher rating under Moody's rating methodology for auto parts suppliers. However, the ratings balance these strengths against the company's high financial leverage and moderate profit margins; which yield overall financial metrics more consistent with the assigned rating. For the fiscal year ending Dec. 31, 2006. Tenneco's debt/EBITDA is approximately 4.3x, while EBIT/Interest is approximately 1.5x. Going forward, Tenneco expects increased revenue to result from higher booked business in emission controls and greater penetration in the commercial vehicle exhaust segment. Margins should be stable through this time frame as continuing industry pressures and the greater amounts of lower margin substrate sales in revenue are offset by new business growth and continuing efforts to control costs. Nevertheless, the company will face some headwinds from lower production volumes at key automotive OEMs, and ongoing commodity cost volatility. The refinancing should also moderate borrowing costs and enhance the company's overall financial flexibility. Upon closing of the new senior secured credit facilities Tenneco is expected to have full access to its $375 million revolving credit and unused availability under the $177.5 million letter of credit/revolving credit facility. The company also maintains large cash balances which could be used to reduce debt, although indenture provisions currently place some limitations on the ability to reduce some of the company's higher coupon obligations during the near term. Ratings assigned: * Ba1, LGD2, 16% to the five-year $375 million first lien senior secured revolving credit facility; * Ba1, LGD2, 16% to the seven-year $177.5 million first lien senior secured L/C and revolving credit facility; * Ba1, LGD2, 16% to the five-year $100 million term loan A; * Ba1, LGD2, 16% to the seven-year $177.5 million first lien senior secured term Loan B; Ratings affirmed: * B1 Corporate Family rating; * B1 Probability of Default rating; * B1 rating for the $475 million 10.25% guaranteed senior secured second-lien notes due 2013, with the LGD Assessment changed to LGD3, 43% from LGD3, 42%; * B3, LGD6, 92% rating for the 8.625% guaranteed senior subordinated unsecured notes due November 2014, These ratings will be withdrawn upon their refinancing: * Tenneco's guaranteed credit facilities consisting of: -- Ba1, LGD2, 16% on the $320 million first-lien senior secured revolving credit facility due December 2008; -- Ba1, LGD2, 16% on the $155 million first-lien senior secured term loan B letter of credit/revolving loan facility due December 2010; -- Ba1, LGD2, 16% on the $356 million remaining first-lien senior secured term loan B facility due December 2010; The last rating action was on Sept. 22, 2006 when the LGD Methodology was applied. The rating outlook is stable. Future events that could improve Tenneco's rating or rating outlook include the generation of material new business awards that facilitate improved margins coupled with debt reduction that enhances overall credit metrics. Consideration for a higher rating or outlook could arise if any combination of these factors were to increase EBIT/Interest coverage to over 2.0x or reduce leverage below 4.0x. Assuming no protracted disruptions in automotive production, downward pressure on the ratings is not expected during the near term. Consideration for a lower outlook or rating could arise if credit metrics were to deteriorate such that leverage, measured by Debt/EBITDA, were to exceed 5.0x or if EBIT/Interest coverage fell to 1.0x on a sustained basis. The ratings could also be adversely affected if the company's current sound liquidity profile were to weaken. Tenneco, headquartered in Lake Forest, Illinois, is a leading manufacturer of automotive ride control and emissions control products and systems for both the worldwide original equipment market and aftermarket. Annual revenues are approximately $4.7 billion. TENNECO INC: S&P Rates Proposed $830 Mil. Bank Facilities at BB --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' bank loan ratings and recovery ratings of '1' to Tenneco Inc.'s proposed $830 million bank facilities, indicating expectations for recovery of 100% of principal in the event of a payment default. In addition, a recovery rating of '3' was assigned Tenneco's existing $475 million 10.25% senior secured notes due July 15, 2013, indicating Standard & Poor's expectation of meaningful prospects for recovery in the event of a payment default. The rating was also raised to 'B+' from 'B'. Standard & Poor's will withdraw its ratings on Tenneco's existing bank facilities upon the closing of the proposed bank facilities. Tenneco's ratings reflect the company's weak business profile and highly leveraged, but stable, financial profile. Tenneco's credit measures modestly slipped in 2006 amid a difficult environment in the second half of the year. The company benefits from good diversity among its customers, business platforms, and regions of operation. However, Tenneco is still exposed to declining vehicle production by its large customers; General Motors Corp. and Ford Motor Co. TOWER RECORDS: Court Sets March 15 Auction Sale of IP Assets ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved the bidding procedures proposed by MTS Inc. dba Tower Records and its debtor-affiliates for the sale of their intellectual property assets, subject to higher and better offers. The IP Assets include the Debtors' website business, including Tower.com, trademarks, and international licenses. The Court set the auction sale for March 15, 2007, 10:00 a.m. ET, at the offices of Akin Gump Strauss Hauer & Feld LLP, 590 Madison Avenue in New York. Potential bidders must be able submit a written offer to purchase any or all of the IP Assets by March 12, 2007. The prevailing bidder must consummate and fund the sale prior to 4:00 p.m. ET on March 20, 2007, while the back-up bidder must be able to keep its bid open and irrevocable until the later of 5:00 p.m. ET on March 21, 2006, or the closing of the purchase by the prevailing bidder. The Court will convene a hearing at 2:00 p.m. ET on March 19, 2007, to consider the sale of the IP Assets to the winning bidder. Objections to the sale, if any, are due on or before noon ET on March 16, 2007. IP Assets The IP Assets were part of the Debtors' Court-approved auction in October 2006, but were never sold due to the inability of the Debtors to close sale transactions. On Sept. 6, 2006, the Debtors obtained Court approval for the sale of substantially all of their assets. The Debtors' assets were auctioned in October 2006 in accordance with a consortium of bids made by multiple parties. Included in the consortium of bids was the successful bid of Norton LLC for, among other things, the Debtors' website business. According to the Debtors, the sale of the website business did not push through because of some business, technical and operational issues that became apparent in the course of the negotiations. CIT Obligation At the commencement of their chapter 11 cases, the Debtors' capital structure included approximately $80 million in first priority secured debt owed to CIT Group/Business Credit Inc. as well as more than $70 million of second priority secured debt asserted by secured trade vendors. In addition, the Debtors estimate that they face at least another $50 million in unsecured claims. Proceeds from the October Auction Sale were used to pay in full the first priority secured debt the Debtors owe CIT. About Tower Records Headquartered in West Sacramento, California, MTS Inc., dba Tower Records -- http://www.towerrecords.com/-- is a retailer of music in the U.S., with nearly 100 company-owned music, book, and video stores. The company and its affiliates previously filed for chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No. 04-10394). The Court confirmed the Debtors' plan on March 15, 2004. The company and seven of its affiliates filed their second voluntary chapter 11 petition on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger, P.A. and O'Melveny & Myers LLP represent the Debtors. The Official Committee of Unsecured Creditors is represented by McGuirewoods LLP and Cozen O'Connor. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a plan expires on March 26, 2007. TOWER RECORDS: Selects Hilco Merchant as Liquidation Consultant --------------------------------------------------------------- MTS Inc. dba Tower Records and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Hilco Merchant Resources LLC as their retail inventory liquidation consultant. Hilco will serve as consultant with respect to the potential dispute that the Debtors have with the joint venture of the Great American Group LLC and Hudson Capital Group LLC. Specifically, Hilco will assist the Debtors and its professionals in analyzing the appropriate adjustment to the retail price of merchandise, if any, due to the agent under the agency agreement and applicable documents governing the conduct of store closing or going-out-of-business sales for the Debtors. At the Debtors' request, Hilco will also communicate with the Debtors' creditor constituencies and will provide expert witness testimony on the matter in connection with applicable court proceedings. Hilco will be compensated through a percentage fee basis: Final Guaranteed Amount (millions) Percentage Fee ---------------------------------- -------------- $99.5 - $100.0 0% $100.0 - $101.0 5% $101.0 - $102.0 9% $102.0 - $103.0 13% $103.0 - $104.0 17% $104.0 + 20% To the best of the Debtors' knowledge, Hilco does not hold any interest adverse to their estates. About Tower Records Headquartered in West Sacramento, California, MTS Inc., dba Tower Records -- http://www.towerrecords.com/-- is a retailer of music in the U.S., with nearly 100 company-owned music, book, and video stores. The company and its affiliates previously filed for chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No. 04-10394). The Court confirmed the Debtors' plan on March 15, 2004. The company and seven of its affiliates filed their second voluntary chapter 11 petition on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger, P.A. and O'Melveny & Myers LLP represent the Debtors. The Official Committee of Unsecured Creditors is represented by McGuirewoods LLP and Cozen O'Connor. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a plan expires on March 26, 2007. TOWER RECORDS: Northridge Lease Assignment Period Moved to Mar. 30 ------------------------------------------------------------------ On Oct. 25, 2006, the U.S. Bankruptcy Court for the District of Delaware entered an order approving the: a) execution and delivery of certain designation rights agreements between MTS Inc. dba Tower Records; its debtor- affiliates; and a joint venture comprised of Great American Group LLC, Hudson Capital Group LLC, Crystal Capital Fund LP, and Retail Consulting Services LLC; and b) consummation of the transactions contemplated by the designation rights agreement. The designation rights agreement grants the Joint Venture, as purchaser, exclusive right to select and identify, from time to time between the effective date of the designation rights agreement and March 18, 2007, one or more designees to which any or all of the Debtors' nonresidential leasehold interests may be sold and assigned. On Nov. 17, 2006, the Court gave the Debtors until March 18, 2007, to assume or reject nonresidential leases. One of the Debtors is party to a lease agreement with Nordhoff Way LLC, as successor in interest to the Williams Family Trust, for the premises located at 19320 Nordhoff Street, in Northridge, California. Subsequently, pursuant to the lease decision order, the Joint Venture delivered a notice to the Debtors, Nordhoff, and other parties-in-interest of the Joint Venture's intent to cause the assumption by the Debtors, and assignment to the Joint Venture's designee, of the Northridge Lease. Nordhoff objected. Accordingly, in a stipulation approved by the Court, the Debtors, the Joint Venture, and Nordhoff agreed that: -- to give the parties sufficient time to draft definitive documentation with respect to the Northridge Lease only, the designation rights period and assignment period will be extended until March 30, 2007; and -- the hearing on Nordhoff's objection to the assumption and assignment of the Northridge Lease is adjourned to March 12, 2007. About Tower Records Headquartered in West Sacramento, California, MTS Inc., dba Tower Records -- http://www.towerrecords.com/-- is a retailer of music in the U.S., with nearly 100 company-owned music, book, and video stores. The company and its affiliates previously filed for chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No. 04-10394). The Court confirmed the Debtors' plan on March 15, 2004. The company and seven of its affiliates filed their second voluntary chapter 11 petition on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger, P.A. and O'Melveny & Myers LLP represent the Debtors. The Official Committee of Unsecured Creditors is represented by McGuirewoods LLP and Cozen O'Connor. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a plan expires on March 26, 2007. TXU CORP: S&P Pares Corporate Credit Rating to BB from BBB- ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Dallas, Texas-based TXU Corp. to 'BB' from 'BBB-'. Standard & Poor's also lowered its senior unsecured debt rating on the company to 'B+' from 'BB+'. The ratings on TXU remain on CreditWatch with negative implications. "The downgrade follows the company's filing of its 10K stating its plan to incur about $24.6 billion in additional debt under a preliminary capital plan developed by an investor group led by Kohlberg Kravis Roberts & Co. (KKR) and Texas Pacific Group," said Standard & Poor's credit analyst Terry Pratt. KKR and Texas Pacific plan to acquire TXU for about $32 billion. Standard & Poor's also lowered its corporate credit rating and senior unsecured debt ratings on TXU Energy Co. LLC to 'BB' from 'BBB-'. TXU Energy is TXU's competitive retail and wholesale electricity provider. The ratings on TXU Energy also remain on CreditWatch with negative implications. However, Standard & Poor's did not lower its 'BBB-' corporate credit, senior secured, and senior unsecured debt ratings on TXU Electric Delivery Co. TXU Delivery is TXU's regulated transmission and distribution company. These ratings remain on CreditWatch with negative implications. The reason Standard & Poor's did not lower the ratings on TXU Delivery is management's strongly expressed intention to maintain TXU Delivery's current credit rating by various means, including a ring-fencing structure to separate it from TXU and affiliates and by a pledge not to increase debt at this entity. The potential for management to fail in this goal is reflecting in the CreditWatch listing. Standard & Poor's also lowered its corporate credit rating on TXU U.S. Holdings Co.'s to 'BB' from 'BBB'. This company is a holding entity between TXU and TXU Energy. The rating remains on CreditWatch with negative implications. If the acquisition is successful and the capitalization plan defined by management is established, Standard & Poor's expects to further downgrade TXU and TXU Energy. The corporate credit ratins will likely fall to somewhere in the 'B' category. Under the proposed plan, TXU Energy will incur large senior secured debt and credit facilities and senior unsecured debt, which will increase default and loss risk for existing unsecured debt. Based on the rating agency's preliminary analysis, TXU Energy's financial profile will be severely stressed with the added debt burden. There is a potential that the company's large hedging program through at least 2012 could result in more stable cash flows and help pay down some of the company's debt load. Given the introduction of a large amount of secured debt, the ratings on TXU Energy's existing unsecured debt could fall well below TXU Energy's final corporate credit rating. TXU Delivery's corporate credit rating would also fall; however, the favorable potential for strong recovery given a default could lead to TXU Delivery's debt being rated above its final corporate credit rating. There are numerous factors that could derail this acquisition, including regulatory and legislative action in Texas. The decision to lower the rating despite this uncertainty reflects Standard & Poor's view that TXU management has relaxed its policy of limiting debt to levels commensurate with an investment-grade rating and that they have clearly sent a message that they have little allegence to the current bondholders. That the TXU Board approved the acquisition by the private equity groups who have a demonstrated record adding leverage supports Standard & Poor's conclusion. Furthermore, TXU could fall under additional pressure to lower its rates based on the investor group's decision to offer price discounts of up to 10% through Sept 2008. Standard & Poor's expects to resolve the CreditWatch placement prior to the consummation of the transaction following more detailed analysis of management's plan of capitalization and business strategy. WAMU MORTGAGE: Fitch Rates $4.9 Mil. Class 4-B-5 Certificates at B ------------------------------------------------------------------ Fitch rates WaMu Mortgage Pass-Through Certificates, series 2007-HY3: Groups 1 and 2: -- $1,148,714,100 classes 1-A1, 1-A2, 2-A1 and 2-A2, and R (senior certificates) 'AAA'. The classes L-B-1 through L-B-6 certificates are not rated by Fitch. Group 3: -- $373,354,000 classes 3-A1 through 3-A4 (senior certificates) 'AAA'. The classes 3-B-1 through 3-B-6 certificates are not rated by Fitch. Group 4: -- $1,352,752,000 classes 4-A1 and 4-A2 (senior certificates) 'AAA'; -- $21,137,000 class 4-B-1 'AA'; -- $12,682,000 class 4-B-2 'A'; -- $7,045,000 class 4-B-3 'BBB'; -- $7,045,000 class 4-B-4 'BB'; and -- $4,931,000 class 4-B-5 'B'. The class 4-B-6 certificate is not rated by Fitch. The 'AAA' rating on the Group 1 and 2 senior certificates reflects the 4.75% subordination provided by the 2.15% class L-B-1, the 0.90% class L-B-2, the 0.60% class L-B-3, the 0.45% privately offered class L-B-4, the 0.40% privately offered class L-B-5, and the 0.25% privately offered class L-B-6. Classes L-B-1 through L- B-6 are not rated by Fitch. The 'AAA' rating on the Group 3 senior certificates reflects the 3.50% subordination provided by the 1.60% class 3-B-1, the 0.70% class 3-B-2, the 0.45% class 3-B-3, the 0.30% privately offered class 3-B-4, the 0.30% privately offered class 3-B-5, and the 0.15% privately offered class 3-B-6. Classes 3-B-1 through 3-B-6 are not rated by Fitch. The 'AAA' rating on the Group 4 senior certificates reflects the 4.00% subordination provided by the 1.50% class 4-B-1, the 0.90% class 4-B-2, the 0.50% class 4-B-3, the 0.50% privately offered class 4-B-4, the 0.35% privately offered class 4-B-5, and the 0.25% privately offered class 4-B-6. Class 4-B-6 is not rated by Fitch. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and Washington Mutual Bank's servicing capabilities as servicer. Fitch currently rates Washington Mutual Bank 'RMS2+' for prime servicing. The certificates represent ownership interests in a trust fund that consists of four pools of mortgage loans. The senior certificates whose class designation begins with 1, 2, 3, and 4 correspond to pools 1, 2, 3, and 4, respectively. In certain limited circumstances, principal and interest collected from loan group 1 or 2 may be used to pay principal or interest, or both, to the senior certificates related to the other of those two loan groups. The Group 3 and Group 4 certificates receive payments from the related pool 3 and pool 4 loans only. Group 1 consists of 773 conventional, hybrid adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties, all of which have original terms to maturity of approximately 30 years. The loans have an initial fixed interest rate period of approximately five years. Thereafter, the interest rate will adjust annually for all the group 1 mortgage loans based on an index plus a margin. Approximately 97.8% of the mortgage loans have interest-only payments scheduled, with principal and interest payments beginning on the first interest rate adjustment date. The aggregate principal balance of this group is $633,917,086 and the average principal balance as of the cut-off date is $820,074. The weighted average original loan-to-value ratio is 67.9%. Cash-out and rate/term refinance loans represent 47.00% and 37.31% of the loan group, respectively. The states that represent the largest portion of mortgage loans are California (70.10%) and Illinois (5.27%). All other states represent less than 5% of the loan pool. Group 2 consists of 663 conventional, hybrid adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties, all of which have original terms to maturity of approximately 30 years. The loans have an initial fixed interest rate period of approximately seven years. Thereafter, the interest rate will adjust annually for all the group 2 mortgage loans based on an index plus a margin. Approximately 97% of the mortgage loans have interest-only payments scheduled, with principal and interest payments beginning on the first interest rate adjustment date. The aggregate principal balance of this group is $572,083,530 and the average principal balance as of the cut-off date is $862,871. The weighted average OLTV is 65.9%. Cash-out and rate/term refinance loans represent 44.92% and 37.43% of the loan group, respectively. The states that represent the largest portion of mortgage loans is California (68.82%), Florida (6.06%), and Washington (5.09%). All other states represent less than 5% of the loan pool. Group 3 consists of 443 conventional, hybrid adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties, all of which have original terms to maturity of approximately 30 years. The loans have an initial fixed interest rate period of approximately 10 years. Thereafter, the interest rate will adjust annually for all the group 3 mortgage loans based on an index plus a margin. Approximately 97.9% of the mortgage loans have interest-only payments scheduled, with principal and interest payments beginning on the first interest rate adjustment date. The aggregate principal balance of this group is $386,896,032 and the average principal balance as of the cut-off date is $873,354. The weighted average OLTV is 63.1%. Cash-out and rate/term refinance loans represent 43.24% and 35.82% of the loan group, respectively. The states that represent the largest portion of mortgage loans are California (69.95%) and New York (8.13%). All other states represent less than 5% of the loan pool. Group 4 consists of 1,989 conventional, hybrid adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties, all of which have original terms to maturity of approximately 30 years. The loans have an initial fixed interest rate period of approximately five years. Thereafter, the interest rate will adjust annually for all the group 4 mortgage loans based on an index plus a margin. Approximately 82.7% of the mortgage loans have interest-only payments scheduled, with principal and interest payments beginning on the first interest rate adjustment date. The aggregate principal balance of this group is $1,409,116,985 and the average principal balance as of the cut-off date is $708,455. The weighted average OLTV is 69.9%. Cash-out and rate/term refinance loans represent 36.81% and 25.20% of the loan group, respectively. The states that represent the largest portion of mortgage loans are California (64.00%) and Massachusetts (5.46%). All other states represent less than 5% of the loan pool. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The certificates are issued pursuant to a pooling and servicing agreement dated July 1, 2006 among WaMu Asset Acceptance Corp., as depositor, Washington Mutual Bank, as servicer, and LaSalle Bank National Association, as trustee. For federal income tax purposes, elections will be made to treat the trust as three separate real estate mortgage investment conduits. WELLS FARGO: Fitch Assigns Low-B Ratings to 4 Certificate Classes ----------------------------------------------------------------- Wells Fargo's mortgage pass-through certificates, series 2007-2, are rated by Fitch Ratings: Groups I & II: -- $1,072,273,840 classes I-A-1 through I-A-22, II-A-1, II-A-2, A-PO, and I-A-R senior certificates 'AAA'; -- $23,890,000 class Cr-B-1 'AA'; -- $6,111,000 class Cr-B-2 'A'; -- $3,333,000 class Cr-B-3 'BBB'; -- $2,223,000 class Cr-B-4 'BB'; -- $1,666,000 class Cr-B-5 'B'. Group III: -- $389,769,760 classes III-A-1 through III-A-6, and III-A-PO senior certificates 'AAA'; -- $7,603,000 class III-B-1 'AA'; -- $800,000 class III-B-2 'A'; -- $801,000 class III-B-3 'BBB'; -- $400,000 class III-B-4 'BB'; -- $400,000 class III-B-5 'B'. The 'AAA' ratings on the Group I and Group II senior certificates reflect the 3.50% subordination provided by the 2.15% class Cr-B-1, the 0.55% class Cr-B-2, the 0.30% class Cr-B-3, the 0.20% privately offered class Cr-B-4, the 0.15% privately offered class Cr-B-5, and the 0.15% privately offered class Cr-B-6. The ratings on the class Cr-B-1, Cr-B-2, Cr-B-3, Cr-B-4, and Cr-B-5 certificates are based on their respective subordination. Class Cr-B-6 is not rated by Fitch. The 'AAA' ratings on the Group III senior certificates reflect the 2.60% subordination provided by the 1.90% class III-B-1, the 0.20% class III-B-2, the 0.20% class III-B-3, the 0.10% privately offered class III-B-4, the 0.10% privately offered class III-B-5, and the 0.10% privately offered class III-B-6. The ratings on the class III-B-1, III-B-2, III-B-3, III-B-4, and III-B-5 certificates are based on their respective subordination. Class III-B-6 is not rated by Fitch. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures, and the primary servicing capabilities of Wells Fargo Bank, N.A. Group I and Group II consist of 2,121 fixed interest rate, first lien mortgage loans, with an original weighted average term to maturity of approximately 30 years. The aggregate unpaid principal balance of the pool is $1,111,164,576 as of Feb. 1, 2007, and the average principal balance is $523,887. The weighted average original loan-to-value ratio of the loan pool is approximately 72.03%; 2.25% of the loans have an OLTV greater than 80%. The weighted average coupon of the mortgage loans is 6.389%, and the weighted average FICO score is 742. The states that represent the largest geographic concentration are California (36.98%), New York (7.11%), Maryland (6.19%), and Virginia (5.51%). All other states represent less than 5% of the outstanding balance of the pool. Group III consists of 698 fixed interest rate, first lien mortgage loans, with an original WAM of approximately 30 years. The aggregate unpaid principal balance of the pool is $400,174,309 as of Feb. 1, 2007, and the average principal balance is $573,316. The weighted average original loan-to-value ratio of the loan pool is approximately 75.84%; 10.53% of the loans have an OLTV greater than 80%. The WAC of the mortgage loans is 5.989%, and the weighted average FICO score is 755. The states that represent the largest geographic concentration are California (21.62%), New Jersey (9.05%), Washington (8.36%), Illinois (6.93%), and Virginia (6.36%). All other states represent less than 5% of the outstanding balance of the pool. None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. All of the mortgage loans were generally originated in conformity with underwriting standards of WFB. WFB sold the loans to Wells Fargo Asset Securities Corporation, a special purpose corporation, who deposited the loans into the trust. The trust issued the certificates in exchange for the mortgage loans. WFB will act as servicer and custodian, and HSBC Bank USA, National Association will act as trustee. Elections will be made to treat the trust as two separate real estate mortgage investment conduit for federal income tax purposes. WELLS FARGO: Fitch Rates $2.8 Mil. Class B-5 Certificates at B -------------------------------------------------------------- Fitch rates Wells Fargo mortgage asset-backed pass-through certificates, series 2007-PA1: -- $677,576,739 classes A-1 to A-13, A-WIO, A-PO, and A-R (senior certificates) 'AAA'; -- $26,046,000 class B-1 'AA'; -- $6,512,000 class B-2 'A'; -- $5,065,000 class B-3 'BBB'; -- $3,256,000 class B-4 'BB'; and -- $2,894,000 class B-5 'B'. The 'AAA' ratings on the senior certificates reflect the 6.35% subordination provided by the 3.60% class B-1, the 0.90% class B-2, the 0.70% class B-3, the 0.45% privately offered class B-4, the 0.40% privately offered class B-5, and the 0.30% privately offered class B-6. The ratings on the class B-1, B-2, B-3, B-4, and B-5 certificates are based on their respective subordination. Class B-6 is not rated by Fitch. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures, and the primary servicing capabilities of Wells Fargo Bank, N.A. The transaction consists of one group of 2,403 fully amortizing, fixed interest rate, first lien mortgage loans, with an original weighted average term to maturity of approximately 30 years. The aggregate unpaid principal balance of the pool is $723,520,492 as of Feb. 1, 2007, and the average principal balance is $301,091. The weighted average original loan-to-value ratio of the loan pool is approximately 74.03%; 11.06% of the loans have an OLTV greater than 80%. The weighted average coupon of the mortgage loans is 6.684%, and the weighted average FICO score is 728. The states that represent the largest geographic concentration are California (26.09%), New York (12.82%), and Florida (8.65%). All other states represent less than 5% of the outstanding balance of the pool. None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. All of the mortgage loans were generally originated in conformity with underwriting standards of WFB. WFB sold the loans to Wells Fargo Asset Securities Corporation, a special purpose corporation, who deposited the loans into the trust. The trust issued the certificates in exchange for the mortgage loans. WFB will act as servicer and custodian, and HSBC Bank USA, National Association will act as trustee. Elections will be made to treat the trust as two separate real estate mortgage investment conduit for federal income tax purposes. WESTWAYS FUNDING: Fitch Rates $77 Million Income Notes at BB ------------------------------------------------------------ Fitch assigns ratings to Westways Funding X, Ltd. and Westways Funding X, Inc. -- $435,000,000 class A floating-rate senior notes, due Jan. 31, 2014 'AAA'; -- $30,000,000 Class B floating-rate senior subordinate notes, due Jan. 31, 2014 'AA'; -- $10,000,000 class LB senior subordinate loan interests, due Jan. 31, 2014 'AA'; -- $30,000,000 class C floating-rate subordinate notes, due Jan. 31, 2014 'A'; -- $10,000,000 class LC subordinate loan interests, due Jan. 31, 2014 'A'; -- $30,000,000 class D floating-rate junior subordinate notes, due Jan. 31, 2014 'BBB'; -- $10,000,000 class LD junior subordinate loan interests, due Jan. 31, 2014 2011 'BBB'; -- $77,230,000 income notes, due Jan. 31, 2014 'BB'. WILLIAM KENT LUTZ: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: William Kent Lutz Sandra Sue Lutz 4330 Drake Road Cincinnati, OH 45243 Bankruptcy Case No.: 07-10792 Chapter 11 Petition Date: February 28, 2007 Court: Southern District of Ohio (Cincinnati) Judge: J. Vincent Aug Jr. Debtor's Counsel: Eric W. Goering, Esq. Goering & Goering 220 West Third Street, Third Floor Cincinnati, OH 45202 Tel: (513) 621-0912 Total Assets: $2,029,139 Total Debts: $1,992,719 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Goods $48,311 P.O. Box 360001 * 373020263373000 Ft Lauderdale, FL 33336-0001 U.S. Bank Goods $47,902 P.O. Box 790408 * 5441-1340-2193-5690 Saint Louis, MO 63179-0408 * 5410-1426-0200-1441 CitiCards Goods $38,807 P.O. Box 6401 * 5410658452377730 The Lakes, NV 88901 * 4018040139121998 * 5410658436025389 Bank of America (MBNA) Goods $38,589 PO Box 15137 * 5490994158029223 Wilmington, DE 198865137 * 5490995772119944 * 549099831148-0835 * 5490998311480835 * 532963199999-0896 * 5490995998130550 * 426429899758-2864 Chase Goods $36,570 P.O. Box 15904 * 4253313300202044 Wilmington, DE 19886-5904 * 521150122233137 Fairfield Wyndham .0076 interest in $26,859 units 340-351 Fairfield Downtown Condos Value of security: $15,000 First National Bank Omaha Goods $15,946 Direct Merchants Bank Goods $15,257 District Director IRS Income Taxes $14,745 0514,745.57 06 not filed U.S. Bank Goods $14,370 * 4264298468060390 State of Ohio Income taxes $11,607 Department of Taxation 031,800 044,182.63 055,625 06 not filed Macys Goods $4,600 * 424584546091 Louise Lawn Care & Service $3,512 Landscaping Bill Varney Moving & Storage Storage $3,300 Moeves Plumbing Disputed claim $2,214 on unsufficient pump University Club Service $1,853 Nelson Brothers Services $1,543 Capital One Bank Goods $175 WM BOLTHOUSE: Poor Performance Cues S&P's Negative CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings (including its 'B+' corporate credit rating) on Bakersfield, California-based Wm. Bolthouse Farms Inc. on CreditWatch with negative implications. "The CreditWatch placement follows weaker-than-expected fiscal year-to-date results," said Standard & Poor's credit analyst Alison Sullivan. While sales grew 17% for the year-to-date Dec. 31, 2006 period, EBITDA declined about 9% due to higher carrot production costs and higher beverage input costs. Revolver borrowing has also been higher than anticipated due to an acquisition in August 2006. "We had previously expected Bolthouse to reduce leverage to about 5x by fiscal year-end March 2007," said Ms. Sullivan. "We believe the company will be challenged to meet these expectations." Standard & Poor's will review Bolthouse's operating and financial plans with management before resolving the CreditWatch listing. The ratings could be lowered or affirmed following the completion of the review. * Seneca Financial Relocates Offices to New York City ----------------------------------------------------- Seneca Financial Group, Inc. reported after 14 years in Greenwich, Connecticut, the relocation of its offices to New York City to accommodate the company's increased activity. The new office is located at 60 East 42nd Street, Suite 421 in New York. The telephone and fax numbers have also changed: Telephone: (212) 286-7011 and Fax: (212) 286-7018. "Coming to New York City reflects our ongoing commitment to provide the highest degree of service and personal attention to our clients," said James Harris, president and founder of Seneca Financial Group. Seneca Financial Group is a specialized investment-banking firm focused on private and public corporate restructurings. Seneca is based in New York. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Accuray Inc ARAY (50) 144 3 AFC Enterprises AFCE (40) 157 4 Alaska Comm Sys ALSK (25) 562 13 AMR Corp. AMR (606) 29,145 (1,603) Atherogenics Inc. AGIX (153) 132 146 Bare Essentials BARE (228) 156 54 Blount International BLT (105) 430 118 CableVision System CVC (5,289) 9,844 (763) Centennial Comm CYCL (1,092) 1,422 112 Choice Hotels CHH (62) 303 (53) Clorox Co. CLX (33) 3,624 (540) Compass Minerals CMP (65) 706 165 Corel Corp. CRE (12) 130 31 Crown Holdings CCK (449) 918 190 Crown Media HL CRWN (449) 918 190 CV Therapeutics CVTX (46) 421 303 Dayton Superior DSUP (101) 322 82 Deluxe Corp DLX (66) 1,267 (462) Denny's Corporation DENN (231) N.A. N.A. Domino's Pizza DPZ (565) 380 11 Dun & Bradstreet DNB (396) 1,360 (161) Echostar Comm DISH (219) 9,768 1,008 Embarq Corp EQ (468) 9,091 (241) Emeritus Corp. ESC (115) 713 (34) Empire Resorts NYNY (25) 61 (2) Encysive Pharm ENCY (88) 69 33 Enzon Pharmaceutical ENZN (56) 404 150 Extendicare Real EXE-U (24) 1,315 (112) Foamex Intl FMXI (404) 607 21 Gencorp Inc. GY (96) 1,021 4 Graftech International GTI (110) 906 349 HCA Inc HCA (10,332) 23,611 2,502 I2 Technologies ITWO (25) 190 17 ICOS Corp ICOS (18) 285 112 IDEARC Inc IAR (8,846) 1,318 15 IMAX Corp IMAX (33) 243 84 Immunomedics Inc IMMU (24) 45 15 Indevus Pharma IDEV (133) 91 51 Investools Inc. IEDU (62) 132 (75) J Crew Group Inc. JCG (55) 414 128 Koppers Holdings KOP (80) 649 162 Life Sciences LSR (25) 205 23 Ligand Pharm LGND (239) 232 (162) Lodgenet Entertainment LNET (58) 263 20 McMoran Exploration MMR (18) 431 (27) Mediacom Comm MCCC (95) 3,652 (266) Navisite Inc. NAVI (4) 100 (9) New River Pharma NRPH (65) 170 135 NPS Pharm Inc. NPSP (182) 237 150 ON Semiconductor ONNN (205) 1,417 268 Paetec Holding PAET (287) 238 7 Qwest Communication Q (1,445) 21,239 (1,506) Radnet Inc. RDNT (79) 131 (2) Regal Entertainment RGC (20) 2,469 (315) Rural Cellular RCCC (540) 1,410 164 Rural/Metro Corp. RURL (89) 305 51 Savvis Inc. SVVS (138) 467 25 Sealy Corp. ZZ (152) 1,003 57 Sirius Satellite SIRI (389) 1,658 (258) St. John Knits Inc. SJKI (52) 213 80 Sun-Times Media SVN (322) 905 (383) Syntroleum Corp. SYNM (14) 44 32 Town Sports Int. CLUB (25) 417 (55) Unisys Corp. UIS (64) 4,037 307 Weight Watchers WTW (68) 1,002 (82) Western Union WU (315) 5,321 869 Worldspace Inc. WRSP (1,574) 604 140 WR Grace & Co. GRA (504) 3,620 920 XM Satellite XMSR (398) 1,841 (262) Xoma Ltd. XOMA (38) 56 16 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Cherry A. Soriano-Baaclo, Melvin C. Tabao, Melanie C. Pador, Tara Marie A. Martin, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2007. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***