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/raid1/www/Hosts/bankrupt/TCR_Public/070723.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 23, 2007, Vol. 11, No. 172 Headlines ADVANCED MICRO: Posts $600 Million Net Loss in Qtr. Ended June 30 ALLETE INC: Declares Quarterly Dividend of 41 Cents Per Share AMERCABLE INC: S&P Rates $15 Million Credit Facility at B AMERICAN CAPITAL: Obtains $1 Billion Proceeds from Stock Offering AMR CORP: Earns $317 Million in Second Quarter Ended June 30 ANDREW CORPORATION: Submits Pre-merger Notification Filings ANDREW CORPORATION: Inks Second Amendment to Credit Agreement ASSOCIATED ESTATES: Moody's Affirms Ratings and Revises Outlook AVANTAIR INC: March 31 Balance Sheet Upside-down by $7.6 Million AVISTAR COMMS: June 30 Balance Sheet Upside-Down by $3.5 Million BANK OF AMERICA: S&P Affirms Ratings on 154 Certificate Classes BARBARA DAU: Involuntary Chapter 11 Case Summary BUILDING MATERIALS: Moody's Lowers Corporate Family Rating to B1 C-BASS 2007-CB6: Moody's Rates Class B-1 Certificates at Ba1 CALEDONIA MINING: Posts CDN$533,000 Net Loss in Qtr Ended March 31 CG JCF: Moody's Assigns Corporate Family Rating at B2 CG JCF: S&P Assigns Counterparty Credit Rating at B+ CHESAPEAKE ENERGY: Earns $258 Million in Quarter Ended March 31 CHESAPEAKE ENERGY: Sells Oklahoma City Real Estate to SandRidege CHESAPEAKE ENERGY: Inks Joint Venture Agreements with Anadarko CHRYSLER AUTOMOTIVE: Acquires BMW's 50% Tritec Motors Stake CHRYSLER AUTOMOTIVE: To Invest $1.2BB in Brampton Assembly Plant CITATION CORP: Completes Financial Restructuring under Chapter 11 CITIGROUP COMM: Stable Performance Cues Fitch to Affirm Ratings COI MIDWEST: Plan Confirmation Hearing Scheduled on August 22 COMMUNICATIONS & POWER: S&P Affirms Corporate Credit Rating at B+ COMMSCOPE INC: Submits Pre-merger Notification Filings CONCORD REAL: Fitch Affirms BB Rating on $18.6MM Class H Notes CORNELL COMPANIES: Improved Performance Cues S&P to Lift Ratings CROWN HOLDINGS: June 30 Balance Sheet Upside-down by $388 Million CWABS TRUST: Moody's Rates Class B Certificates at Ba1 DAVITA INC: Extends 6-5/8% Sr. Notes Exchange Offer to July 25 DELPHINUS CDO: Fitch Rates $15MM Class E Mezzanine Notes at BB DORAL FINANCIAL: Closes Sale of 968 Mil. Shares to Doral Holdings DORAL FINANCIAL: Moody's Confirms B2 Senior Debt Rating ENTERPRISE GP: S&P Rates $1 Billion Term Loan at BB- EPOD INTERNATIONAL: March 31 Balance Sheet Upside-down by $670,892 FITNESS COMPANY: Organizational Meeting Scheduled on July 27 FRIENDSHIP VILLAGE: Fitch Affirms Rating on Revenue Bonds at BB+ GATEHOUSE MEDIA: Completed Offering Cues S&P to Affirm Ratings GB RICHARDSON: Voluntary Chapter 11 Case Summary GENERAL MOTORS: Reports Global 2nd Qtr. Sales of 2.4 Mil. Vehicles GENESIS HEALTHCARE: S&P Withdraws B+ Corporate Credit Rating GSI GROUP: Gets Requisite Consents to Amendment Senior Notes HANCOCK FABRICS: Amends Bylaws to Allow Uncertified Shares HANCOCK FABRICS: Panel Retains Grant Thornton as Financial Advisor HANSCOM FAMILY: S&P Lowers Rating on Series 2004B Bonds to BB HERSHEY CO: Weak Performance Cues S&P's Negative CreditWatch HILLCREST SAYLOR: Case Summary & 20 Largest Unsecured Creditors INTERPOOL INC: Moody's Withdraws B1 Corporate Family Rating JARDEN CORP: Moody's Affirms B1 Corporate Family Rating JP MORGAN: Fitch Affirms BB- Rating on $19.7MM Class M Certs. LBREP/L SUNCAL: Housing Downturn Cues S&P to Lower Rating to B- MASTR ASSET: S&P Takes Rating Actions on Various Certs. Classes MCCLATCHY COMPANY: Earns $40 Million in Second Qtr. Ended June 30 MCCLATCHY CO: Seattle Times to Pay $24 Mil. Settlement to Hearst MCMORAN EXPLORATION: Expects to Close Newfield Buy in August 2007 MCMORAN EXPLORATION: June 30 Balance Sheet Upside-Down by $49.9MM MERRILL LYNCH: S&P Preliminary Rates $23MM Class E Notes at BB MEYER-SUTTON: Court Converts Ch. 11 Case to Ch. 7 Liquidation MICHIGAN LECTROLS: Case Summary & 16 Largest Unsecured Creditors MORGAN STANLEY: Fitch Affirms B- Rating on $2.5MM Class O Certs. MOUNT AIRY: High Pro Forma Debt Leverage Cues S&P's B Rating NEWCASTLE CDO: Fitch Holds BB Rating on $13.5MM Class V-FX Notes NEWFIELD EXPLORATION: McMoRan Agreement to Close in August 2007 NYLSTAR INC: Has Until August 17 to File Schedules and Statements OASYS MOBILE: Organizational Meeting Scheduled for August 1 ORBITAL SCIENCES: Earns $13.8 Million in Quarter Ended June 30 OSLO REINSURANCE: Chapter 15 Petition Summary PACIFICNET INC: Earns $308,000 in Quarter Ended March 31 PALM INC: High Debt Leverage Cues S&P's B Corporate Credit Rating PARALLEL PETROLEUM: Moody's Assigns Corporate Family Rating at B3 PATIENT PORTAL: Posts Net Loss of $106,360 in Qtr Ended March 31 PAUL SCHWENDENER: Wants Until August 20 to File Schedules PETRO STOPPING: Moody's Withdraws B2 Corporate Family Rating POLYONE CORP: Inks Canadian Receivables Purchase Agreement POTLATCH CORP: Board Declares Distribution on Common Stock PRODUCTION RESOURCE: Moody's Assigns Corporate Family Rating at B1 ROADHOUSE GRILL: Jan. 28 Balance Sheet Upside-down by $17.5 Mil. ROMA PLAZA: Voluntary Chapter 11 Case Summary SENSIENT TECH: Improved Performance Cues S&P's Stable Outlook SUB SURFACE: Bruce Beattie Resigns as Chief Executive Officer SUNSTATE EQUIPMENT: Moody's Lifts Corporate Family Rating to B1 TARGA RESOURCES: Commences Tender Offer for 8-1/2% Senior Notes TARGA RESOURCES: Moody's Holds B1 Corporate Family Rating TARGA RESOURCES: S&P Lowers Corporate Credit Rating to B TEXAS INDUSTRIES: S&P Rates Proposed $200MM Credit Facility at BB- TRANSDERM LABS: March 31 Balance Sheet Upside-Down by $36.4 Mil. UNITEDHEALTH GROUP: Earns $1.2 Billion in Second Quarter 2007 VERTRUE INC: Inks Amended Merger Agreement with Velo WACHOVIA BANK: Moody's Assigns Low-B Ratings to Six Cert. Classes WARNER MUSIC: S&P Says BB- Rating Still Under Negative Watch WERNER LADDER: Committee Wants Ch. 11 Cases Converted to Ch. 7 WILLIAMS SCOTSMAN: Algeco Deal Cues Moody's to Review Ratings WILLIAMS SCOTSMAN: Algeco Deal Cues S&P's Developing CreditWatch YEARLING-BURRY: 341(a) Creditors Meeting Set for August 28 YEARLING-BURRY: Court Approves Jennings Haugh as Counsel * Fitch Updates Q-IFS Ratings on 555 Insurance Companies * S&P Places Ratings on 17 Tranches Under Negative CreditWatch * S&P Lowers Ratings on 93 Tranches from 75 Transactions * Donlin Recano Partners w/ Beard Group to Provide Bankr. News * BOND PRICING: For the week of July 16 - July 20, 2007 ********* ADVANCED MICRO: Posts $600 Million Net Loss in Qtr. Ended June 30 ----------------------------------------------------------------- Advanced Micro Devices Inc. reported second quarter 2007 revenue of $1.4 billion, an operating loss of $457 million, and a net loss of $600 million. These results include an impact of $130 million from ATI acquisition-related and integration charges of $78 million, employee stock-based compensation expense of $31 million, severance charges of $16 million and debt issuance charges of $5 million. In the first quarter of 2007, AMD reported revenue of $1.2 billion, net loss of $611 million, and an operating loss of $504 million. In the second quarter of 2006, AMD reported revenue of $1.2 billion, net income of $89 million, and operating income of $102 million. Second quarter 2007 gross margin was 34%, excluding stock-based compensation expense, acquisition-related and severance charges, compared to 31% in the first quarter of 2007 and 57% in the second quarter of 2006. The increase from the prior quarter was largely due to increased microprocessor unit shipments. The second quarter gross margin was impacted by a write-off of older microprocessor inventory of about $30 million. At June 30, 2007, the company's total assets were $13.2 billion, total liabilities were $8.7 billion, and total stockholders' equity was $4.5 billion. "While we made solid progress in the second quarter across a number of fronts, we must improve our financial results," said Robert J. Rivet, AMD's chief financial officer. "We achieved a 12% sequential revenue increase, improved the gross margin and won back microprocessor unit and revenue market share. Strong distribution channel demand, initial sales to Toshiba, and a broader adoption of AMD platforms led to a 38% sequential increase in microprocessor unit shipments. In addition, our Graphics business gained momentum at the end of the quarter as we began shipping the new ATI Radeon HD(TM) 2000 family of graphics processors. "We continue to focus on realigning our business model and reducing our capital expenditures and cost structure in the second half of the year." In the seasonally up third quarter, AMD expects revenue to increase in line with seasonality. Additional Highlights Additional highlights during the second quarter of 2007 include: -- Toshiba chose AMD as a strategic supplier for its new series of Satellite notebook computers powered by an AMD platform featuring AMD Turion(TM) 64 X2 dual-core mobile technology and the AMD M690 chipset. -- Customers continued to adopt AMD-based solutions across a broader portion of their product offerings. -- AMD announced that initial revenue shipments of the industry's first native x86 quad-core processor, "Barcelona," will commence in the third quarter in both standard and low-power versions. AMD broadened its portfolio of product offerings in the quarter. -- AMD disclosed details of its next-generation platform for notebook computing, codenamed "Puma." The platform pairs AMD's next-generation notebook processor, "Griffin," with the next-generation AMD "RS780" mobile chipset. "Puma" represents one of the first results of the "new AMD," delivering an optimized mobile solution with extended battery life, graphics and video processing enhancements and improved overall system performance. -- The Italian stock exchange, Borsa Italiana, joined the growing roster of global exchange customers running their business on AMD Opteron processor based technology, including NYSE Group Inc., the International Securities Exchange's Stock Exchange, London Stock Exchange, Luxembourg Stock Exchange, Montreal Exchange and Philadelphia Stock Exchange. About AMD Advanced Micro Devices Inc. -- http://www.amd.com/-- (NYSE: AMD) designs and manufactures microprocessors and other semiconductor products. * * * As reported in the Troubled Company Reporter on May 2, 2007, Moody's Investors Service affirmed AMD's B1 corporate family rating while revising to Ba2 from Ba3 the ratings on both the currently secured $390 million notes due 2012 (2012 Note) and the $1.7 billion remainder of the original $2.5 billion term loan due 2013. The rating outlook remains negative. ALLETE INC: Declares Quarterly Dividend of 41 Cents Per Share ------------------------------------------------------------- ALLETE Inc.'s board of directors has declared a quarterly dividend of 41 cents per share of common stock. On an annual basis, the dividend is equivalent to $1.64 per share, unchanged from the previous quarter. The regular quarterly dividend on common stock is payable September 1 to shareholders of record at the close of business Aug. 15, 2007. Headquartered in Duluth, Minnesota, ALLETE Inc. (NYSE:ALE) -- http://www.allete.com/-- generates, transmits, distributes and markets electrical power for retail and wholesale customers in the Upper Midwest. ALLETE also owns a significant portfolio of real estate in Florida, and BNI Coal in North Dakota. * * * Moody's Investor Services rated ALLETE Inc.'s preferred stock at Ba1 on July 2001. AMERCABLE INC: S&P Rates $15 Million Credit Facility at B --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' senior secured bank loan and '2' recovery ratings to the $15 million revolving credit facility of AmerCable Inc. (B-/Stable/--). At the same time, S&P raised the bank loan ratings on the $100 million first- lien term loan to 'B', one notch above the corporate credit rating, from 'B-' and revised the recovery rating to '2', from '3'. The '2' recovery rating indicates the expectation of substantial (70%-90%) recovery in the event of a payment default. The revision is due to the decrease in the first-lien term loan debt to $100 million from $135 million and the removal of the revolving credit facility's super priority status over the first- lien term loan. Ratings List AmerCable Inc. Corporate Credit Rating B-/Stable/-- Ratings Assigned $15 mil sr scrd rev crd facil B Recov rtg 2 Ratings Revised To From -- ---- $100 mil first-lien term ln B B- Recov rtg 2 3 AMERICAN CAPITAL: Obtains $1 Billion Proceeds from Stock Offering ----------------------------------------------------------------- American Capital Strategies Ltd. closed its previously announced public offering of common stock and that the underwriters have exercised in part their over-allotment option. As a result, 22.4 million shares of common stock were sold in the offering at $45.05 per share. Of those shares, 17.4 million were offered directly by the Company and 5 million were sold in connection with agreements to purchase common stock from American Capital for delivery at future dates. The total gross proceeds from the offering, including the over-allotment, were about $1 billion. Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia Capital Markets, LLC were the joint-lead book- running managers for the offering. Morgan Stanley & Co. Incorporated and UBS Securities LLC were the co-lead managers and A.G. Edwards & Sons, Inc. and RBC Capital Markets Corporation were co-managers for the offering. The offering was made under American Capital's existing shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, American Capital entered into Forward Sale Agreements with Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia Capital Markets, LLC or certain of their respective affiliates under which American Capital agreed to sell to the Counter-Parties in the aggregate 5 million shares of common stock at the same offering price per share as the 17.4 million shares being offered directly by American Capital in this offering, subject to certain adjustments. The timing of these sales, which must occur within the next year, will generally be determined by American Capital. The company will physically settle each forward sale agreement by delivering shares of common stock to the counter-party under the relevant Forward Sale Agreement and such counter-party will deliver the Offering Price subject to certain adjustments to the company upon each settlement. In connection with hedging their respective exposures under the forward sale agreements, the counter-parties borrowed from third party lenders and sold in the aggregate 5 million of the offered shares of the company's common stock at the close of the offering on June 22, 2007, at the offering price. American Capital expects to use substantially all of the net proceeds of about $748 million from the direct sale of 17.4 million shares of common stock for general corporate purposes, including for the company's investment and lending activities and to repay indebtedness owed under existing revolving credit facilities. American Capital expects to use substantially all of the net proceeds from the shares of common stock being offered pursuant to the forward sale agreements, which initially are valued at about $215 million, subject to certain adjustments, for general corporate purposes, including for the company's investment and lending activities and to repay indebtedness owed under existing revolving credit facilities. Reducing borrowings under the revolving credit facilities will create availability under the facilities, which will generally be used for funding future American Capital investments and general corporate purposes. About American Capital American Capital Strategies Ltd. (Nasdaq: ACAS) -- http://www.americancapital.com/-- is a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies and commercial loan obligations. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital can invest up to $300 million per transaction. * * * As reported in the Troubled Company Reporter on July 11, 2007, Moody's Investors Service assigned a Baa2 rating to American Capital Strategies, Ltd. $500 million combined debt offering. In addition, Moody's assigned a (P)Baa2 senior, unsecured and a (P)Ba1 preferred stock rating to ACAS's $5 billion shelf registration. The ratings outlook is stable. AMR CORP: Earns $317 Million in Second Quarter Ended June 30 ------------------------------------------------------------ AMR Corporation reported a net profit of $317 million on total operating revenues of $5.9 billion for the second quarter of 2007. The current quarter results compare to a net profit of $291 million on total operating revenues of $6.0 billion in the second quarter of 2006. "Our company overcame exceptional weather challenges and historically high fuel prices to earn our fifth consecutive quarterly profit and our largest quarterly net profit since we launched our Turnaround Plan more than four years ago," said AMR chairman and chief executive officer Gerard Arpey. "Weather has been an enormous obstacle this year, but our employees have stepped up to help take care of customers and continue our momentum toward long-term success. Our improved performance has allowed us to strengthen our balance sheet and reinvest in products and services to create a stronger company, but we must remain mindful that painfully high fuel prices and continuing intense competition present formidable challenges for the remainder of the year and beyond." Operational Performance American's mainline passenger revenue per available seat mile (unit revenue) increased by 3.6 percent in the second quarter compared to the year-ago quarter. American's mainline load factor - or the percentage of total seats filled - was a record 83.6 percent during the second quarter, compared to 82.6 percent in the second quarter of 2006. American's second-quarter yield, which represents average fares, increased 2.3 percent compared to the second quarter of 2006, its ninth consecutive quarter of year-over-year yield increases. AMR reported second quarter consolidated revenues of approximately $5.9 billion, a decrease of 1.6 percent year over year. AMR estimates that severe weather disruptions reduced second quarter consolidated revenue by nearly $50 million and reduced its net profit for the second quarter by approximately $0.12 per diluted share. American's mainline cost per available seat mile (unit cost) in the second quarter increased 2.4 percent year over year, which was 1.2 percentage points higher than it would have been if not for the significant weather impact. Excluding fuel, mainline unit costs in the second quarter increased by 3.5 percent year over year. Due to weather impact during the period from April 1 through June 20, American cancelled 1.8 percent of its scheduled second quarter mainline departures. Thereafter, American had more than 1,000 weather-related cancellations during the last 10 days of June, increasing total weather-related cancellations during the quarter to 2.1 percent of second quarter scheduled mainline departures. Mainline capacity, or total available seat miles, in the second quarter decreased by 4.4 percent compared to the same period in 2006. "While our year-over-year capacity decline in the second quarter includes some impact from weather cancellations, we believe that our disciplined and careful approach to managing capacity has been an important factor in our improved financial performance," Arpey said. "This approach has helped us to improve profitability and generate better returns on our investments in the business." Balance Sheet Improvement Mr. Arpey noted that AMR continued to strengthen its balance sheet in the second quarter by reducing debt and improving its liquidity position. AMR ended the second quarter with approximately $6.4 billion in cash and short-term investments, including a restricted balance of $470 million, compared to a balance of $5.7 billion in cash and short-term investments, including a restricted balance of $525 million, at the end of the second quarter of 2006. AMR reduced Total Debt, which the company defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, to $17.3 billion at the end of the second quarter of 2007, compared to $19.4 billion a year earlier. AMR reduced Net Debt from $14.2 billion at the end of the second quarter of 2006 to $11.4 billion at the end of the second quarter of 2007. The company's interest expense was $235 million in the second quarter of 2007, a 9.6% year-over-year decrease. AMR contributed $118 million to its employees' defined benefit pension plans in the second quarter and contributed an additional $86 million on July 13, 2007. The company has contributed a total of $266 million to these plans in 2007 as part of its expected full-year contribution amount of $364 million. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on May 25, 2007, Standard & Poor's Ratings Services assigned its 'CCC+' rating to American Airlines Inc.'s (B/Positive/--) $125 million Dallas/Fort Worth International Airport special facility revenue refunding bonds, series 2007, due 2030. The bonds are guaranteed by American's parent, AMR Corp. (B/Positive/B-2), and are secured by payments made by American to the airport authority. Proceeds are being used to refund the outstanding revenue bonds, series 1992 (rated 'CCC+'), whose rating is withdrawn. ANDREW CORPORATION: Submits Pre-merger Notification Filings ----------------------------------------------------------- CommScope Inc. and Andrew Corporation submitted their pre-merger notification filings as required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to the proposed acquisition by CommScope Inc. of Andrew Corp. In connection with the proposed merger, CommScope intends to file a registration statement with the Securities and Exchange Commission on Form S-4 and CommScope Inc. and Andrew Corp. expect to mail a proxy statement/ prospectus to Andrew Corp.'s stockholders containing information about the merger. The registration statement and the proxy statement/prospectus will contain important information about CommScope Inc., Andrew Corp., the merger, and related matters. As reported in the Troubled Company Reporter on June 29, 2007, CommScope Inc. and Andrew Corporation entered into a definitive agreement on June 27, 2007, unanimously approved by their respective Boards of Directors, under which CommScope will acquire all of the outstanding shares of Andrew for $15.00 per share, at least 90% in cash, creating a global leader in infrastructure solutions for communications networks. The transaction, which is valued at approximately $2.6 billion, is expected to be accretive to CommScope's cash earnings per share, excluding special items, in the first full year after closing. The $15.00 per share purchase price represents a premium of approximately 13% over Andrew's average closing share price for the last 30 trading days, a 21% premium over Andrew's average closing share price for the last 60 trading days, and a 16% premium over the closing price of Andrew's common stock on Tuesday, June 26, 2007. About CommScope Based in Hickory, North Carolina, CommScope, Inc. (NYSE:CTV) -- http://www.commscope.com/-- designs and manufactures "last mile" cable and connectivity solutions for communication networks. Through its SYSTIMAX(R) Solutions(TM) and Uniprise(R) Solutions brands CommScope is the global leader in structured cabling systems for business enterprise applications. It is also the world's largest manufacturer of coaxial cable for Hybrid Fiber Coaxial applications. Backed by strong research and development, CommScope combines technical expertise and proprietary technology with global manufacturing capability to provide customers with high-performance wired or wireless cabling solutions. CommScope has facilities in Brazil, Australia, China and Ireland. About Andrew Corp. Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. * * * As reported in the Troubled Company Reporter on June 29, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Andrew Corp. to 'BB-' from 'BB' and placed the rating on CreditWatch with negative implications, following announcement of the merger. ANDREW CORPORATION: Inks Second Amendment to Credit Agreement ------------------------------------------------------------- Andrew Corporation, as of July 13, 2007, entered into a Second Amendment to Credit Agreement with certain financial institutions named in the Second Amendment and Bank of America, National Association, as Administrative Agent, for the Lenders and as L/C Issuer. The Second Amendment amends in certain respects Andrew's Credit Agreement dated as of Sept. 29, 2005, as amended by a First Amendment to Credit Agreement dated as of June 16, 2006. The Second Amendment amended the Credit Agreement such that any agreement entered into by Andrew and CommScope, Inc. in furtherance of the proposed merger between them would not be taken into account for purposes of determining if a change of control of Andrew had occurred until the earlier to occur of the date of the consummation of the CommScope Merger Transaction and March 31, 2008, unless the agreements concerning the CommScope Merger Transaction have been previously terminated. In addition, the Administrative Agent and Lenders also waived any event of default under the Credit Facility occurring due to a change of control of Andrew resulting from any agreement entered into between Andrew and CommScope in furtherance of the CommScope Merger Transaction until the earlier to occur of the date of the consummation of the CommScope Merger Transaction and March 31, 2008. About Andrew Corp. Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. * * * As reported in the Troubled Company Reporter on June 29, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Andrew Corp. to 'BB-' from 'BB' and placed the rating on CreditWatch with negative implications, following announcement of the merger. ASSOCIATED ESTATES: Moody's Affirms Ratings and Revises Outlook --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Associated Estates (senior unsecured debt shelf rating at (P)B1) and revised its rating outlook for the REIT to positive, from stable. "The positive rating outlook for Associated Estates reflects the REIT's ability to strengthen it operating performance, while also reducing its leverage and enhancing its financial flexibility," says Lori Marks, Moody's analyst. According to Moody's, Associated Estates' performance historically lagged that of many of its multifamily REIT peers due to its concentration in weaker Midwest markets, which comprised about 69% of net operating income as of 1Q07. These markets have strengthened over the past 18 months, enabling the REIT's core portfolio to post 4.9% revenue growth in 1Q07. Moody's also notes that Associated Estates improved its financial flexibility with a new $100 million unsecured credit facility, which replaced its two small secured revolvers, and with an increasing number of unencumbered assets. Furthermore, the REIT made progress on executing its plan to sell weaker-performing assets and reduce leverage. Associated Estates' effective leverage, although still high at 58% of gross assets, declined from 63% at year-end 2005. Moody's believes Associated Estates' geographic concentration and market position remain important credit challenges. The REIT's geographic concentration in Midwestern markets that are susceptible to strong competition from single-family housing and its small size provide limited opportunity for leadership. Moody's expects Associated Estates to make progress with its portfolio repositioning efforts, but it will take time to meaningfully alter its growth profile. Moody's indicated that a rating upgrade would depend on further sound operating performance, coupled with a reduction in effective leverage closer to 50% of gross assets and improvement in fixed charge above 1.6x. An ability to reduce geographic concentration, with no state comprising more than one-third of total NOI, would also provide upgrade momentum, as would a demonstrated capacity to grow. A return to a stable rating outlook would reflect an inability to achieve these prescribed credit metrics, most notably progress at reducing leverage and secured debt. Furthermore, a deterioration in operating performance would also cause Moody's to revise the rating outlook back to stable. These ratings were affirmed with a positive outlook: Associated Estates Realty Corporation -- (P)B1 senior unsecured debt shelf; -- (P)B3 preferred stock shelf Associated Estates Realty Corporation [NYSE: AEC] is a real estate investment trust headquartered in Richmond Heights, Ohio, USA. The REIT directly or indirectly owns, manages or is a joint venture partner in 99 multifamily properties located in 10 states. AVANTAIR INC: March 31 Balance Sheet Upside-down by $7.6 Million ---------------------------------------------------------------- Avaintair Inc.'s balance sheet at March 31, 2007, showed $148.8 million in total assets and $156.4 million in total liabilities, resulting in a $7.6 million total stockholders' deficit. At March 31, 2007, the company's balance sheet also showed strained liquidity with $25.3 million in total current assets available to pay $26 million in total current liabilities. Avantair Inc. reported a net loss of $7.5 million on total revenue of $19.9 million for the third quarter ended March 31, 2007, compared with a net loss of $7.4 million on total revenue of $11.8 million for the same period ended March 31, 2006. The increase in revenues reflects a year-over-year increase in aircraft shares from 308.5 to 444.5, price increases on these shares, and higher maintenance and management fees. Revenues from fractional aircraft shares sold were $7.4 million for the third quarter of fiscal 2007, an increase of 42.3% compared to $5.2 million for the third quarter of fiscal 2006. Revenues from maintenance and management fees were $10.1 million for the third quarter of fiscal 2007, an increase of 57.8% compared to $6.4 million for the third quarter of fiscal 2006. "We are pleased with our third quarter results," commented Mr. Steven Santo, chief executive office of Avantair. "Total revenues increased over 68% and the maintenance and management fee portion of our business grew over 57%, despite Piaggio's supply chain issues we spoke about on last quarter's call. Importantly, our current delivery schedule remains on track with our previously announced expectations. We added one aircraft in the third fiscal quarter and expect to take delivery of four planes in the fourth fiscal quarter. We continue to anticipate that we will to hit our fiscal year-end target of 37 aircraft in the fleet, as we have already taken delivery of one aircraft in the fourth fiscal quarter and the other three are already in the country." Cost of flight operations for the third quarter of fiscal 2007 were $13.9 million, or 69.8% of revenue compared to $8.8 million, or 74.6% of revenue for the third quarter of fiscal 2006. Cost of flight operations were negatively impacted by unanticipated maintenance work, which was required to repair damage to two planes caused by a third-party land-based towing operator and one aircraft damaged in a training incident. "While operating expense as a percent of revenue declined year over year," commented Mr. Santo, "it was higher than we had anticipated this quarter primarily due to maintenance work on the three damaged planes. These maintenance issues were in no way related to the performance, safety, or reliability of the Piaggio Avanti aircraft. While we believe this was an unusual occurrence and do not anticipate this type of disruption going forward, we have taken steps to prevent similar events in the future. We expect to recover all of the non-recurring expenses in the third fiscal quarter relating to the maintenance events discussed above in the fourth fiscal quarter. We anticipate these recoveries will have a significant favorable impact on our fourth fiscal quarter financial results." General and administrative expenses for the third quarter of fiscal 2007 were $4.2 million, or 21.1% of revenue, compared to $4.1 million, or 34.7% of revenue for the third quarter of fiscal 2006. Selling expenses for the third quarter of fiscal 2007 were $1.0 million, or 5.0% of revenue, compared to $1.2 million, or 10.2% of revenue, for the same period last year. Total operating expenses for the third quarter of fiscal 2007 were $26.1 million, or 131.2% of revenue, compared to $18.5 million, or 156.8% of revenue, for the third quarter of fiscal 2006. Loss from operations for the third quarter of fiscal 2007 was $6.3 million, an improvement of approximately $400,000 from the loss of $6.7 million for the third quarter of fiscal 2006. For the nine months ended March 31, 2007, total revenues were approximately $54.6 million, an increase of 58.3% as compared to $34.5 million for the first nine months of fiscal 2006. Loss from operations for the nine months ended March 31, 2007, was approximately $15.3 million compared to a loss of $12.2 million for the first nine months of fiscal 2006. Net loss for the nine months ended March 31, 2007 was $17.8 million compared to a loss of $13.6 million for the first nine months of fiscal 2006. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?2182 About Avantair Inc. Based in Clearwater, Florida, Avantair Inc. (OTC BB: AAIR.OB) -- http://www.avantair.com/-- is the exclusive North American provider of fractional aircraft shares in the Piaggio Avanti P.180 aircraft. Avantair is the fifth largest company in the North American fractional aircraft industry and the only publicly-traded standalone fractional operator. The company currently manages a fleet of 33 planes with another 52 Piaggio Avanti IIs on order. It also recently announced an order of 20 Embraer Phenom 100s. Avantair, with operations in 5 states and approximately 270 employees, offers private travel solutions for individuals and companies at a fraction of the cost of whole aircraft ownership. AVISTAR COMMS: June 30 Balance Sheet Upside-Down by $3.5 Million ---------------------------------------------------------------- Avistar Communications Corporation reported total assets of $16.1 million and total liabilities of $19.6 million, resulting in total stockholders' deficit of $3.5 million at June 30, 2007. As of June 30, 2007, Avistar had cash, cash equivalents and marketable securities of $10.1 million. Revenue for the three months ended June 30, 2007, was $5.9 million, compared to revenue of $2.4 million for the three months ended March 31, 2007, and $1.8 million for the three months ended June 30, 2006. Revenue for the three months ended June 30, 2007, includes $4 million in licensing revenue from the recently announced licensing agreement with Radvision Ltd. Income from settlement and patent licensing was $1.1 million for each of the three months ended June 30, 2007, and June 30, 2006. Income from settlement and patent licensing was $13.1 million for the three months ended March 31, 2007. Avistar reported a net income of $400,000 for the three months ended June 30, 2007. Avistar reported a net income of $4.5 million for the three months ended March 31, 2007, and a net loss of $3.7 million, for the three months ended June 30, 2006. Employee stock compensation expense for equity based compensation required by Financial Accounting Standard No. 123R was $600,000 for the three months ended June 30, 2007, $700,000 for the three months ended March 31, 2007, and $500,000 for the three months ended June 30, 2006. Revenue for the six months ended June 30, 2007, was $8.3 million, as compared to $3.6 million for the six months ended June 30, 2006. Income from settlement and patent licensing for the six months ended June 30, 2007 was $14.1 million, as compared to $2.1 million for the six months ended June 30, 2006. Avistar reported a net income of $4.9 million for the six months ended June 30, 2007. For the six months ended June 30, 2006, Avistar reported a net loss of $6.8 million. "Avistar's most recent results represent the second quarterly profit this year, and thereby place the company in a profit position on a year-to-date basis. Both of the first and second quarter net income results reflect the benefit of our patent licensing agreements- with the Tandberg litigation settlement benefiting the first quarter, and our more-recently announced Radvision licensing agreement influencing the second quarter. These developments represent Avistar's active licensing program, whereby we seek to partner with technology companies in the areas of unified communication and collaboration," stated Gerald J. Burnett, chairman and chief executive officer of Avistar. "As a reminder, when Avistar's management evaluates our business progress, we consider the sum of reported revenue and income from settlement and patent licensing activities, the latter of which records proceeds from licenses entered into following the start of litigation. Using this management perspective, the Tandberg and Radvision licenses fueled a year-to-date revenue plus income from settlement and patent licensing total of $22.4 million. This result exceeds what we had accomplished at mid-year 2006, and for the full year of 2006." Dr. Burnett continued, "Also during the second quarter, our wholly-owned subsidiary, Collaboration Properties Inc., engaged Ocean Tomo LLC, a leading appraisal and services firm with specialized expertise in valuing patents, to conduct an independent valuation of our intellectual property portfolio. The results of this analysis indicate that the potential net present value of monetizing CPI's intellectual property may represent a multiple of Avistar's current market capitalization. Although this analysis and resultant opinion seem to ascribe substantial value to a dimension of Avistar, it is important to note that it does not represent an offer to buy CPI's intellectual property by any person, nor guarantee that the suggested value can in fact be realized." Dr. Burnett continued, "Avistar has two primary revenue engines, one which seeks to monetize our extensive intellectual property portfolio through an active licensing and technology partnering program, with the second being our product and services business. In the latter arena, I would like to once again welcome Simon Moss, who joined Avistar this week as President, with initial focus on our product and partnering activities. Simon's accomplished background is well-suited to the needs and opportunities that are present for Avistar. We expect Simon to enhance our thought-leadership and position in the growing unified communications and collaboration marketplace." About Avistar Communications Avistar Communications Corporation (NASDAQ: AVSR) -- http://www.avistar.com/-- develops, markets, and supports a video collaboration platform for the enterprise, all powered by the AvistarVOS(TM) software. Founded in 1993, Avistar is headquartered in Redwood Shores, California, with sales offices in New York and London. Collaboration Properties, Inc. (CPI), a wholly owned subsidiary of Avistar, holds a current portfolio of 71 patents for inventions in the primary areas of video and network technology. CPI pursues patents for presence-based interactions, desktop video, recorded and live media at the desktop, multimedia documents, data sharing, and a rich-service network video architecture that supports Avistar's product suite and customers. CPI offers licenses to its patent portfolio and Avistar's video-enabling technologies to companies in the video conferencing, rich-media services, public networking, and related industries. BANK OF AMERICA: S&P Affirms Ratings on 154 Certificate Classes --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 154 classes of mortgage pass-through certificates from seven Bank of America Mortgage Securities Inc. transactions. The affirmed ratings reflect adequate actual and projected credit enhancement that is sufficient to support the certificates at the current rating levels. As of the June 2007 remittance period, total delinquencies ranged from 0.00% (loan group 4 from series 2004-3 and loan group 2 from series 2005-5) to 33.46% (loan group 2 from series 2002-G) of the current pool balances, while severe delinquencies (90-plus days, foreclosures, and REOs) ranged from 0.00% (loan groups from various series) to 14.74% (loan group 2 from series 2002-G). Cumulative realized losses, as a percentage of the original pool balances, ranged from 0.00% (loan groups from various series) to 0.05% (series 2004-A). Subordination provides credit support for these transactions. The underlying collateral backing the certificates originally consisted of conventional, fully amortizing five-, 10-, 15-, and 30-year fixed- or adjustable-rate mortgage loans, which are secured by first liens on one- to four-family residential properties. Ratings Affirmed Bank of America Mortgage Securities Inc. Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2002-G I-A-1, I-A-2, I-A-3, I-A-4, I-A-5 AAA 2002-G A-PT, 2-A-1, 2-B-1, 2-B-2 AAA 2002-G 2-B-3 A+ 2004-3 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6 AAA 2004-3 1-A-7, 1-A-8, 1-A-9, 1-A-10, 1-A-11, 1-A-12 AAA 2004-3 1-A-13, 1-A-14, 1-A-15, 1-A-16, 1-A-17 AAA 2004-3 1-A-18, 1-A-20, 1-A-21, 1-A-22, 1-A-23 AAA 2004-3 1-A-24, 1-A-25, 1-A-26, 1-A-27, 2-A-1 AAA 2004-3 2-A-2, 2-A-3, 2-A-4, 2-A-5, 2-A-6, 2-A-8 AAA 2004-3 2-A-9, 2-A-10, 2-A-11, 2-A-12, 2-A-14 AAA 2004-3 2-A-15, 2-A-16, 3-A-1, 3-A-2, 3-A-3 AAA 2004-3 4-A-1, A-PO, 15-IO, 30-IO AAA 2004-3 1-B-1, X-B-1 AA 2004-3 1-B-2, X-B-2, 3-B-2 A 2004-3 1-B-3, X-B-3, 3-B-3 BBB 2004-3 1-B-4, X-B-4, 3-B-4 BB 2004-3 1-B-5, X-B-5, 3-B-5 B 2004-A 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 3-A-1 AAA 2004-A B-1 AA 2004-A B-2 A 2004-A B-3 BBB 2004-A B-4 BB 2004-A B-5 B 2004-C 1-A-1, 2-A-1, 2-A-2, 3-A-1 AAA 2004-C B-1 AA 2004-C B-2 A 2004-C B-3 BBB 2004-C B-4 BB 2004-C B-5 B 2005-5 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6 AAA 2005-5 1-A-7, 1-A-8, 1-A-9, 1-A-10, 1-A-11, 1-A-12 AAA 2005-5 1-A-13, 1-A-14, 1-A-15, 1-A-16, 1-A-17 AAA 2005-5 1-A-18, 1-A-19, 1-A-20, 1-A-21, 1-A-22 AAA 2005-5 1-A-23, 1-A-24, 1-A-25, 1-A-26, 2-A-1 AAA 2005-5 30-IO, 30-PO, 15-IO, 15-PO AAA 2005-5 15-B-1 AA 2005-5 15-B-2 A 2005-5 15-B-3 BBB 2005-5 15-B-4 BB 2005-5 30-B-5, 15-B-5 B 2005-G 1-A-1, 1-A-2, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5 AAA 2005-G 3-A-1, 3-A-2, 4-A-1, 4-A-2, 4-A-3, 4-A-4 AAA 2005-G B-5 B 2005-L 1-A-1, 1-A-2, 2-A-1, 2-A-2, 2-A-3, 2-A-4 AAA 2005-L 2-A-5, 3-A-1, 3-A-2, 4-A-1, 4-A-2 AAA 2005-L B-5 B BARBARA DAU: Involuntary Chapter 11 Case Summary ------------------------------------------------ Alleged Debtor: Barbara Dau Properties, LLC 31970 East Ocean Lane Arch Cape, OR 97102 Case Number: 07-32859 Involuntary Petition Date: July 19, 2007 Court: District of Oregon Judge: Elizabeth L. Perris Petitioner's Counsel: Albert N. Kennedy, Esq. Tonkon Torp LLP Pioneer Tower, Suite 1600 888 Southwest 5th Avenue Portland, OR 97204 Tel: (503) 802-2013 Fax: (503) 274-8779 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ James R. Shaw Loan $69,979 Barbara Shaw 79924 Cannon Road Arch Cape, OR 97102 BUILDING MATERIALS: Moody's Lowers Corporate Family Rating to B1 ---------------------------------------------------------------- Moody's Investors Service lowered the ratings of Building Materials Holding Corporation, including its corporate family rating to B1 from Ba2, its probability-of-default rating to B2 from Ba3, and its first-lien bank credit facility rating to B1 (LGD3, 38%) from Ba2 (LGD3, 41%). The outlook is stable. The downgrade was prompted by Moodys' concerns over the expectation that homebuilding market conditions will remain weak throughout 2007 and into 2008, and will continue to exert pressure on the company's operating performance. Moody's remains concerned about the company's dependence on the cyclical homebuilding industry, as well as residual integration risks associated with its acquisitions. BMHC's scale, healthy liquidity, continuing focus on growing contribution from higher-margin value-added products within its sales mix, and its leading industry position support the B1 rating. The stable ratings outlook presumes that the company will be able to cut costs, reduce capital expenditures, and manage working capital needs to avoid technical default under its bank credit agreements. The company remains among one of the largest suppliers to most national home builders. Headquartered in San Francisco, California, BMHC, a Fortune 1000 company, is one of the largest providers of residential construction services and building materials in the United States. BMHC serves the homebuilding industry through two subsidiaries: SelectBuild provides construction services to high-volume production homebuilders in key growth markets across the country; and BMC West distributes building materials and manufactures building components for professional builders and contractors in the western and southern states. C-BASS 2007-CB6: Moody's Rates Class B-1 Certificates at Ba1 ------------------------------------------------------------ Moody's Investors Service assigned a Aaa rating to the senior certificates issued by C-BASS 2007-CB6 Trust, and ratings ranging from Aa1 to Ba1 to the mezzanine and subordinate certificates in the deal. The securitization is backed by adjustable-rate and fixed-rate subprime residential mortgage loans acquired by C-BASS. The collateral was originated by New Century Mortgage Corporation (42.79%), Wilmington Finance Inc. (28.41%), Ameriquest Mortgage Company (10.58%) and other originators, none of which originated more than 10% of the mortgage loans. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination and overcollateralization. The certificates also benefit from an interest rate swap agreement and an interest rate cap agreement provided by JPMorgan Chase Bank, NA. Moody's expects collateral losses to range from 5.55% to 6.05%. Litton Loan Servicing LP will service the loans. Moody's has assigned Litton Loan Servicing LP its top servicer quality rating of SQ1 as a primary servicer of subprime residential mortgage loans. The complete rating actions are: C-BASS 2007-CB6 Trust C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB6 -- Cl. A-1, Assigned Aaa -- Cl. A-2, Assigned Aaa -- Cl. A-3, Assigned Aaa -- Cl. A-4, Assigned Aaa -- Cl. M-1, Assigned Aa1 -- Cl. M-2, Assigned Aa2 -- Cl. M-3, Assigned Aa3 -- Cl. M-4, Assigned A1 -- Cl. M-5, Assigned A2 -- Cl. M-6, Assigned A3 -- Cl. M-7, Assigned Baa1 -- Cl. M-8, Assigned Baa2 -- Cl. M-9, Assigned Baa3 -- Cl. B-1, Assigned Ba1 CALEDONIA MINING: Posts CDN$533,000 Net Loss in Qtr Ended March 31 ------------------------------------------------------------------ Caledonia Mining Corp. reported a net loss of CDN$533,000 on sales of CDN$13.4 million for the first quarter ended March 31, 2007, compared with a net loss of CDN$2.3 million on sales of CDN$1,000 for the same period ended March 31, 2006. Caledonia Mining reported revenue of CDN$13.4 million from the Blanket gold mine, on sales of 4,352 ounces of gold. The loss for the quarter was due to the reduced ounces sold while Zimbabwean inflation of 1800%, on an annualized basis, resulted in huge increases in the same period. Cash available at the quarter end totaled CDN$126,000. Gold production for the quarter was 3,700 ounces. The reduced ounces produced during the first quarter 2007 were due to the planned shutdown of the No. 4 shaft, in association with the mine expansion currently underway. Commenting on the results, Stefan Hayden, president and chief executive officer, said "I am pleased to report a satisfactory operational performance from the Blanket Mine of 3,700 ounces of gold, in the context of a planned mine and plant expansion and against the backdrop of a difficult mining economic environment in Zimbabwe. Whilst other gold mines have been forced to stop production, due to severe cash flow shortages, Blanket has been able to continue mining, with the switch to liquid cyanide being particularly timeous for continuing plant operations." At March 31, 2007, the company's balance sheet showed CDN$45.2 million in total assets, CDN$21.4 million in total liabilities, and CDN$23.8 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?209d Going Concern Doubt BDO Dunwoody LLP's audit report of Caledonia Mining Corp.'s consolidated financial statements for the years ended Dec. 31, 2006, and 2005, is expressed in accordance with Canadian reporting standards which do not require a reference in the auditor's report to events and conditions which cast doubt on the company's ability to continue as a going concern in the auditors' report when these are adequately disclosed in the financial statements. The company's ability to continue as a going concern is dependent upon attaining profitable operations, realizing proceeds from the disposal of mineral properties and obtaining sufficient financing to meet its liabilities, its obligations with respect to operating expenditures and expenditures required on its mineral properties. Since inception from February 1992, Caledonia has recorded a loss in every year except 1994 and 2000. As at March 31, 2007, the consolidated accumulated deficit was CDN$167.8 million. About Caledonia Mining Caledonia Mining Corporation (TSX: CAL) (OTC BB: CALVF) (AIM: CMCL) -- www.caledoniaminin.com -- is a Canadian registered mining, exploration and development corporation that owns a diversified portfolio of carefully selected, high quality mines and exploration properties in Southern Africa and Canada. In June 2006 Caledonia acquired the Blanket Mine in Zimbabwe from Kinross Gold Corporation of Toronto. Caledonia's two South African gold mines, Barbrook Mine and Eersteling Gold Mine, are both currently on care-and-maintenance and were put up for sale in December 2006. CG JCF: Moody's Assigns Corporate Family Rating at B2 ----------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating to C.G. JCF Corp., a holding company formed by private equity firm J.C. Flowers & Co. LLC to acquire a diversified set of insurance and retirement services businesses. The operations to be acquired include the life and commercial insurance services as well as the retirement services of The BISYS Group, Inc. for cash consideration of about $720 million. The commercial insurance services operations will be combined with those of Crump Group, Inc., a wholesale property & casualty insurance broker already owned by JCF. The total enterprise will conduct business under the Crump name through three main segments: life insurance services, commercial insurance services and retirement services. In a related transaction, Citigroup Inc. will acquire the BISYS holding company and its other operations, mainly BISYS Fund Services and Alternative Investment Services. Moody's also assigned B2 ratings to the $40 million senior secured revolver and the $515 million senior secured term loan to be issued by CGJCF in connection with the proposed acquisition. Net proceeds will be used to repay existing debt of about $46 million, to help fund the acquisition, and to pay related fees and expenses. The credit facilities will be secured by substantially all of Crump's assets and secured by all of its material subsidiaries. The rating outlook for the company is stable. According to Moody's, the ratings reflect the new company's position as the largest US wholesale insurance broker in terms of life and property & casualty premiums placed. The company also ranks among the largest independent providers of record keeping and administration services for institutional retirement plans, with particular expertise in serving small and mid-sized employers. Crump generates well diversified revenues and profits on a pro forma basis, and its financial flexibility metrics are in line with those of companies rated toward the upper end of the B range. These strengths are tempered, however, by Crump's lack of operating history as a consolidated enterprise. The firm must integrate two property & casualty brokers of similar size and it must develop an effective holding company to oversee the three business segments. The rating agency noted that EBITDA growth at the BISYS units has been constrained over the past couple of years by SEC investigations and by uncertainty surrounding future ownership of the firm. BISYS and the SEC reached settlement agreements with regard to the investigations during the fall of 2006, and potential future liabilities related to the investigations have been assumed by Citigroup. Crump will have ongoing exposure to errors and omissions claims as an ordinary component of its professional services businesses. Moody's expects that the Crump segments will gradually resume growth under the new ownership structure. Moody's cited the following factors that could lead to an upgrade of the CGJCF ratings: i. development of an effective holding company and successful integration of the property & casualty brokerage operations, ii. adjusted (EBITDA -- capex) coverage of interest exceeding 3 times, iii. free-cash-flow-to-debt ratio remaining above 8.0 percent, and iv. adjusted debt-to-EBITDA ratio below 4.5 times. Moody's cited the following factors that could lead to a downgrade of the ratings: i. adjusted (EBITDA -- capex) coverage of interest below 1.5 times, ii. adjusted debt-to-EBITDA ratio above 5.5 times, or iii. a sustained period with no organic growth. Based in Roseland, New Jersey, Crump is a diversified insurance brokerage and retirement services firm. On a pro forma basis, the consolidated firm generated revenues of about $480 million for the 12 months ended June 30, 2007. CG JCF: S&P Assigns Counterparty Credit Rating at B+ ---------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' counterparty credit rating to C.G. JCF Corp., the intermediate holding company of the Crump Group Inc. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' senior secured bank loan rating to C.G. JCF Corp.'s proposed $555 million of senior secured credit facilities, which consist of a $515 million seven-year first lien senior secured loan and a $40 million six-year revolver. "The ratings actions are in response to the company's plans to leverage its balance sheet following the plans of the private equity sponsor, JC Flowers & Co. LLC, to acquire the BISYS Group Inc.'s wholesale life, commercial property/casualty brokerage, and retirement services divisions from Citigroup Inc. for $719.9 million," said Standard & Poor's credit analyst Tracy Dolin. "The transaction will be financed in part with the proposed $555 million of senior secured credit facilities. The $40 million revolver is expected to remain untapped at debt issuance." Crump will also use some of these proceeds to refinance its $46 million of existing debt. JC Flowers will be combining its existing commercial insurance business, Crump, with BISYS Commercial Insurance Services. The combined companies along with BISYS' life and retirement services divisions will be rebranded as the Crump Group Inc. The transaction is expected to close on Aug. 1, 2007. As Citi retains BISYS's parent company, JC Flowers will create a new holding company for Crump to perform certain legal, human resources, and other corporate shared services. At the same time, Citi retains BSG's legacy liabilities. Crump's financial flexibility will be constrained because of its highly leveraged capital structure. The company's lending multiple will be approximately 4.6x for the last 12 months ending June 30, 2007, post-transaction. The company's plan to leverage its balance sheet will result in a weak adjusted EBIT fixed-charge coverage and adjusted EBITDA fixed-charge coverage of 1.7x and 2.8x, respectively, in 2007. Partially offsetting a more leveraged balance sheet is JC Flowers' $260 million equity contribution. As a result, debt-to-capital will be 59% at the close of the acquisition. Standard & Poor's believes that the acquisition of BISYS' life, commercial, and retirement segments enhances Crump's competitive position in the wholesale insurance brokerage sector. The combined entity will become the largest domestic wholesale broker, based on commercial and life premiums written. BISYS is also a good strategic fit to the combined group as it increases Crump's product offerings and geographic footprint in underserved areas with minimal overlap. Crump faces integration and execution risks pertaining to BISYS's commercial P/C wholesale brokering unit. These risks are less significant for BISYS's other segments as the company intends to run these operations independently. Standard & Poor's believes the combined company chose to rebrand all operations as the Crump Group Inc. to distinguish itself from the prior management troubles and damage to reputation caused by BISYS's predecessor. Overall, successful integration is critical to S&P's assessment of the group's ability to achieve anticipated revenue synergies. The outlook is stable. Standard & Poor's believes that the company will continue to remain cash-flow-positive and meet its restrictive covenants in the near to intermediate term. Standard & Poor's expects the company to produce EBITDA coverage of more than 2.5x, with total debt to capital of less than 60% in 2007 and 2008. S&P expect the company will achieve EBITDA margins in excess of 20%, prospectively. Crump's 2007 pretax operating income and ROR will stay marginal because of interest expenses and amortization of intangible assets. However, this negative effect will be somewhat alleviated in the following years as the company gradually pays down its debt. Standard & Poor's expects Crump to sustain its marginal competitive position in 2007 and 2008 through its diversified revenue stream, which can better cope with business cycle volatility. Crump will be challenged to grow its wholesale commercial business top line during a softening P/C rate environment in 2007 and 2008. If the company's interest-coverage and debt-leverage metrics fall short of S&P's expectations, the outlook or ratings could be revised downward, especially if the company's margins compress. This could precipitate unsatisfactory coverage metrics, given the level of increased debt. If the company is able to improve its financial profile materially such that these metrics exceed S&P's expectations significantly, Standard & Poor's will consider revising the outlook to positive. CHESAPEAKE ENERGY: Earns $258 Million in Quarter Ended March 31 --------------------------------------------------------------- Chesapeake Energy Corp. reported net income of $258 million on total revenues of $1.58 billion and production of 153.7 billion cubic feet of natural gas equivalent for the first quarter ended March 31, 2007, compared with net income of $624 million on total revenues of $1.94 billion and production of 152.1 billion cubic feet of natural gas equivalent for the same period ended March 31, 2006. Cash flow provided by operating activities was $977 million for the quarter ended March 31, 2007, compared with operating cash flow of $967 million for the same period last year. EBITDA, defined as net income before income taxes, interest expense, and depreciation, depletion and amortization expense, was $924.1 million, compared with EBITDA of $1.41 billion for the quarter ended March 31, 2006. The company's 2007 first quarter net income and EBITDA include an unrealized after-tax mark-to- market loss of $193 million resulting from the company's oil and natural gas and interest rate hedging programs. Aubrey K. McClendon, Chesapeake's chief executive officer, commented, "We are pleased to report outstanding financial and operational results for the 2007 first quarter. The company delivered attractive production and reserve growth and generated impressive profit margins that were enhanced by the company's well-executed hedging strategy. Our focused business strategy, value-added growth, tremendous inventory of undrilled locations and valuable hedge positions clearly differentiate Chesapeake in the industry. At March 31, 2007, the company's consolidated financial statements showed $25.73 billion in total assets, $14.65 billion in total liabilities, and $11.08 billion in total stockholders' equity. The company's consolidated financial statements for the quarter ended March 31, 2007, also showed strained liquidity with $1.22 billion in total current assets available to pay $2.18 billion in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?21aa About Chesapeake Energy Based in Oklahoma City, Oklahoma, Chesapeake Energy Corporation (NYSE: CHK) -- http://www.chkenergy.com/-- produces natural gas in the U.S. The company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the U.S. * * * As reported in the Troubled Company Reporter on May 11, 2007, Moody's Investors Service assigned a Ba2 rating to Chesapeake Energy's pending $1 billion of 30-year contingent convertible senior notes and affirmed its existing Ba2 corporate family, Ba2 probability of default, Ba2 senior unsecured note rate, SGL-2 speculative grade liquidity, and Baa3 secured hedging facility ratings. Net note proceeds would retire a like amount of CHK's roughly $1.6 billion of existing secured bank debt. The Ba2 note rating is assigned under Moody's Loss Given Default notching methodology. The rating outlook is stable. CHESAPEAKE ENERGY: Sells Oklahoma City Real Estate to SandRidege ---------------------------------------------------------------- Chesapeake Energy Corporation and SandRidge Energy Inc. have executed a transaction by which SandRidge acquired from Chesapeake certain downtown Oklahoma City real estate assets that Chesapeake acquired from Anadarko Petroleum Corporation. Chesapeake and Anadarko also disclosed a separate oil and gas transaction involving a portion of Chesapeake and Anadarko's assets in the Deep Haley area in the Delaware Basin of West Texas. As part of that transaction with Anadarko, an affiliate of Chesapeake acquired the Oklahoma City real estate Anadarko acquired in August 2006 as a result of its acquisition of Kerr- McGee Corporation. The Oklahoma City real estate includes the Kerr-McGee Tower and surrounding buildings on the block bounded by Robinson, Robert S. Kerr, Broadway and Dean A. McGee Avenues, three surface parking lots northeast of the Kerr-McGee Tower, approximately 70 acres on the south side of the Oklahoma River east of the Downtown Airpark and other property in southwest Oklahoma City. Chesapeake has retained certain properties for future use, redevelopment or resale and SandRidge purchased the Chesapeake affiliate thereby acquiring ownership of the remaining properties which include the Kerr-McGee Tower, the surrounding buildings and the three parking lots. SandRidge plans to renovate Kerr-McGee Tower and to relocate its corporate headquarters from the Valliance Bank Building in late 2007 or early 2008. In addition, Chesapeake and SandRidge have agreed to renovate Kerr Park and to maintain it at no cost to Oklahoma City for at least the next 10 years. Aubrey K. McClendon, Chesapeake's chairman and chief executive officer, commented, "I am very happy to have helped return Kerr- McGee Tower to local ownership and use. Several months ago we began working with Anadarko on a significant property transaction involving a portion of their assets in the Deep Haley area. Along the way, it became clear that in order to bridge a valuation impasse, we would need an innovative way to create additional value for Chesapeake in the transaction. The Kerr-McGee properties became the last chip on the table to make the Anadarko- Chesapeake deal work for both parties. Knowing that Chesapeake did not have a need for Kerr-McGee Tower, I contacted my friend and Chesapeake co-founder Tom Ward to see if he would be interested in acquiring the Tower from us and helping restore and maintain Kerr Park. Tom was very agreeable to my offer. Tom and I have asked Rand Elliott of Elliot & Associates to develop a new plan for Kerr Park and we look forward to working with him to return the park to its former status as the jewel of downtown." Tom L. Ward, SandRidge's chairman and chief executive officer, stated, "I am also very pleased to announce this transaction with Chesapeake whereby SandRidge now owns one of Oklahoma City's largest and most important buildings. Our company is growing very rapidly and the Kerr-McGee Tower is an ideal location for our corporate headquarters. I look forward to becoming a member of the downtown business community and to contributing to the ongoing renaissance of downtown Oklahoma City. I am also very happy that we were able to accomplish this transaction through working with Aubrey, my long-time friend and Chesapeake co-founder." About SandRidge Energy Headquartered in Okahoma City, SandRidge Energy Inc. -- http://www.sandridgeenergy.com/-- is an oil and natural gas company. SandRidge also owns and operates drilling rigs and a related oil field services business operating under the Lariat Services Inc. brand name; gas gathering, marketing and processing facilities; and, through its subsidiary, PetroSource Energy Company CO2 treating and transportation facilities and tertiary oil recovery operations. SandRidge focuses its exploration and production activities in West Texas, the Cotton Valley Trend in East Texas and the Gulf Coast. SandRidge also owns oil and gas properties in the Piceance Basin of Colorado, the Gulf of Mexico and the Anadarko and Arkoma Basins. About Chesapeake Energy Based in Oklahoma City, Oklahoma, Chesapeake Energy Corporation (NYSE: CHK) -- http://www.chkenergy.com/-- produces natural gas in the U.S. The company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the U.S. * * * As reported in the Troubled Company Reporter on May 11, 2007, Moody's Investors Service assigned a Ba2 rating to Chesapeake Energy's pending $1 billion of 30-year contingent convertible senior notes and affirmed its existing Ba2 corporate family, Ba2 probability of default, Ba2 senior unsecured note rate, SGL-2 speculative grade liquidity, and Baa3 secured hedging facility ratings. Net note proceeds would retire a like amount of CHK's roughly $1.6 billion of existing secured bank debt. The Ba2 note rating is assigned under Moody's Loss Given Default notching methodology. The rating outlook is stable. CHESAPEAKE ENERGY: Inks Joint Venture Agreements with Anadarko -------------------------------------------------------------- Chesapeake Energy Corporation and Anadarko Petroleum Corporation completed multiple agreements, including a joint venture involving Chesapeake and Anadarko assets in the Deep Haley area of the Delaware Basin in West Texas. Through the formation of a joint venture and other separate agreements, Chesapeake received: - 25% of Anadarko's existing Deep Haley area production; - 25% of Anadarko's leasehold in the central and eastern portions of the Deep Haley area; - 50% of Anadarko's leasehold and contractual rights in the western portion of the Deep Haley area; - A lease from Anadarko on 2,100 net acres in the Fayetteville Shale play in Arkansas; - An assignment of 5,600 net acres of undeveloped leasehold in the Anadarko Basin in western Oklahoma; and - The Oklahoma City real estate assets acquired by Anadarko last year as part of its acquisition of Kerr-McGee Corporation. Through the formation of the joint venture and other separate agreements, Anadarko received: - Approximately $310 million in cash and other consideration, including reimbursement of capital expenditures previously incurred by Anadarko in connection with the development of the Deep Haley properties and Chesapeake's commitment to fund a portion of Anadarko's future Deep Haley area capital costs; and - 50% of certain Chesapeake non-producing leasehold interests in Loving County, Texas. In total, Anadarko and Chesapeake will jointly evaluate and explore more than 1 million gross acres in the Deep Haley area, on which drilling, completion, production and midstream operations will be shared on roughly a 50/50 basis. The two companies plan an aggressive drilling program for the area, with Anadarko and Chesapeake each currently operating eight drilling rigs in the Deep Haley area with the possibility of increasing drilling activity as the joint venture develops. Aubrey K. McClendon, Chesapeake's chairman and chief executive officer, commented, "We are very pleased to announce this transaction with Anadarko. We have long admired Anadarko's capabilities in deep gas exploration and we are now excited to join forces with them in the Deep Haley area, one of the country's premier deep gas exploration projects. Our recent drilling results in the Deep Haley area have been exceptional and we are confident that by joining forces with Anadarko the technical teams of the two companies will continue to enjoy success in drilling prolific wells in the Deep Haley area. As reported during our 2007 first quarter earnings conference call last month, Chesapeake's most recent seven wells in the Deep Haley area generated a combined 90 mmcfe per day of gross production during May. We hope to drill many more similarly productive wells in our new partnership with Anadarko in the years to come. In addition, we are pleased to purchase the former Kerr-McGee properties in Oklahoma City. These properties are important to our community and we are happy to return them to local ownership." James T. Hackett, Anadarko's chairman, president and chief executive officer stated, "This transaction fits our strategy very well and positions us for continued growth from a core asset with a partner that understands this play. The Deep Haley area in West Texas has recovered over 1.4 TCF from the over-pressured Pennsylvanian formations. Anadarko started work in the basin in 2003 and employed state-of-the-art drilling and completion technology with great success. After accumulating the rights to over 400,000 net acres, it was time to expand our drilling operations and we are glad to have Chesapeake jointly involved with us. Working collaboratively will enable our companies to maximize value by accelerating development of the considerable resources in the play. Our substantial combined position provides us with meaningful upside potential from future drilling activity, and we look forward to working with Chesapeake to continue delivering these resources to American consumers." About Anadarko Petroleum Headquartered in The Woodlands, Texas, Anadarko Petroleum Corporation (NYSE: APC) -- http://www.anadarko.com/-- is an independent oil and gas exploration and production company, with 3.0 billion barrels-equivalent of proved reserves as of year-end 2006, making it one of the world's largest independent exploration and production companies. About Chesapeake Energy Based in Oklahoma City, Oklahoma, Chesapeake Energy Corporation (NYSE: CHK) -- http://www.chkenergy.com/-- produces natural gas in the U.S. The company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the U.S. * * * As reported in the Troubled Company Reporter on May 11, 2007, Moody's Investors Service assigned a Ba2 rating to Chesapeake Energy's pending $1 billion of 30-year contingent convertible senior notes and affirmed its existing Ba2 corporate family, Ba2 probability of default, Ba2 senior unsecured note rate, SGL-2 speculative grade liquidity, and Baa3 secured hedging facility ratings. Net note proceeds would retire a like amount of CHK's roughly $1.6 billion of existing secured bank debt. The Ba2 note rating is assigned under Moody's Loss Given Default notching methodology. The rating outlook is stable. CHRYSLER AUTOMOTIVE: Acquires BMW's 50% Tritec Motors Stake ----------------------------------------------------------- BMW AG has sold its 50% stake in Brazilian engine joint venture Tritec Motors Limitada to Chrysler Automotive LLC, Reuters reports. Financial terms of the deal, which requires regulatory approval, were not disclosed. "Chrysler Group has assumed the responsibility for exploring long- term options for the Tritec operations whereby all possible alternatives for continuing the business for the long run are under analysis. This may include a sale of the facility to a third party," BMW said in a statement. Founded in 1997, Tritec makes 1.4- and 1.6-litre four-cylinder petrol engines for BMW's Mini brand and some Chrysler models. The plant boasts of an annual production capacity of around 250,000 units. Large-scale production started in January 2000, Reuters states. About Chrysler Automotive Based in Stuttgart, Germany, Chrysler Automotive LLC 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. * * * As reported in the Troubled Company Reporter on July 4, 2007, Moody's Investors Service assigned a first-time B3 Corporate Family Rating to Chrysler Automotive LLC, a B1 (LGD3, 33%) rating to the company's $10 billion senior secured, first-lien term loan, and a Caa1 (LGD4, 66%) rating to its $2 billion senior secured, second-lien term loan. The company's Probability of Default is B3 and the outlook is stable. CHRYSLER AUTOMOTIVE: To Invest $1.2BB in Brampton Assembly Plant ---------------------------------------------------------------- Chrysler Automotive LLC will invest $1.2 billion in its Brampton Assembly Plant in Ontario for the next generation of the Chrysler 300 series, Dodge Magnum and Dodge Charger. The Brampton Assembly Plant also celebrated the one millionth LX rear-wheel drive vehicle platform will roll-off the line with employees and CAW officials. "Because of Brampton's ability to meet safety, quality, delivery, cost and morale metrics, we're pleased to announce that Brampton will be the future home of Chrysler Automotive's full-size car platform," Frank Ewasyshyn, Executive Vice President for Manufacturing, said. "We appreciate the support of the CAW and employees in assisting the Company in moving forward with investment decisions." The Brampton Assembly Plant will also gain plant product loading volumes, adding production responsibility for all international (BUX) LX-based vehicles in calendar year 2010. The total plant program investment for the additional product is $500 million. The international LX vehicles are currently produced at Magna Steyr's facility in Graz, Austria. The Magna Steyr facility also produces the Jeep(R) Grand Cherokee, Jeep Commander and Chrysler minivan vehicles for markets outside of North America. The one millionth LX was an award-winning Chrysler 300, rolling- off the line as part of the employee celebration. The Chrysler 300 was launched in January 2004, followed by the Dodge Magnum two months later. The AWD models began production in mid-2004. In April of 2005, the Dodge Charger was added to the Brampton Assembly manufacturing porfolio. "We are very pleased that our commitment has allowed Brampton Assembly to gain not only an additional product, but also a significant production commitment moving forward," Alberto Gonzalez, Plant Manager - Brampton Assembly Plant, said. "We are also extremely proud to be celebrating the one millionth LX, as this represents the significant market success of this product." The Brampton Assembly Plant was built in 1968 and acquired by Chrysler Corporation with the purchase of American Motors Corporation in 1987. The facility produces the Chrysler 300, Dodge Magnum, and Dodge Charger, and will produce the Dodge Challenger on a three-shift operation and employs approximately 4,000 hourly workers. About Chrysler Automotive Based in Stuttgart, Germany, Chrysler Automotive LLC 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. * * * As reported in the Troubled Company Reporter on July 4, 2007, Moody's Investors Service assigned a first-time B3 Corporate Family Rating to Chrysler Automotive LLC, a B1 (LGD3, 33%) rating to the company's $10 billion senior secured, first-lien term loan, and a Caa1 (LGD4, 66%) rating to its $2 billion senior secured, second-lien term loan. The company's Probability of Default is B3 and the outlook is stable. CITATION CORP: Completes Financial Restructuring under Chapter 11 ----------------------------------------------------------------- Citation Corporation completed a financial restructuring under Chapter 11 of the Bankruptcy Code. Carl Marks Advisory Group LLC, the New York-based investment banking and corporate revitalization firm, served as financial advisor. Less than a month after Citation filed a voluntary petition for a prepackaged reorganization under Chapter 11 in U.S. Bankruptcy Court for the Northern District of Alabama, the company emerged from bankruptcy on April 6, 2007. Under the Plan of Reorganization, the company's lenders, led by JPMorgan Chase & Co., exchanged $191 million in debt for all reorganized company common stock and a new $30 million loan. "Carl Marks Advisory Group's investment banking expertise, coupled with its interim operational and consulting management, provided Citation with a broad and comprehensive range of services and resources," Ed Buker, CEO, Citation Corporation, said. "CMAG assisted Citation in facing a multitude of issues leading up to the filing and provided the company with the resources to effectively emerge from the restructuring." "Successfully emerging from bankruptcy in less than 30 days was made possible by the cooperation of all the company's key constituents," Warren H. Feder, a partner of Carl Marks who heads the investment banking team, said. "With its restructured balance sheet and strength in key markets, Citation is well positioned to grow its business profitably in the years ahead." About Carl Marks Advisory Group LLC Carl Marks Advisory Group LLC -- http://www.carlmarks.com/-- an affiliate of Carl Marks & Co. provides a wide array of investment banking and financial and operational advisory services to the middle market, including mergers and acquisitions advice, debt and equity capital placements, financial restructuring plans, strategic business assessments, improvement plans and interim management. The firm has offices in New York and Charlotte, North Carolina. About Citation Corporation Headquartered in Birmingham, Alabama, Citation Corporation -- http://www.citation.net/-- designs, develops and manufactures cast, forged and machined components for the capital and durable goods industries, including the automotive and industrial markets. Citation uses aluminum, steel, gray iron, and ductile iron as the raw materials in its various manufacturing processes. Citation employs 2,900 in Alabama, Texas, Indiana, Michigan, North Carolina and Wisconsin. The Debtor and its debtor-affiliates previously filed for protection on Sept. 18, 2004 (Bankr. N.D. Ala. Case No. 04-08130). Michael Leo Hall, Esq., and Rita H. Dixon, Esq., at Burr & Forman LLP, represented the Debtors in their first bankruptcy. Judge Tamara O. Mitchell confirmed the company's Second Amended Joint Plan of Reorganization on May 18, 2005. The Debtor and 11 debtor-affiliates filed for their second bankruptcy on March 12, 2007 (Bankr. N.D. Ala. Case Nos. 07-01153 to 07-01162). David S. Heller, Esq., at Latham & Watkins LLP, and Michael Leo Hall, Esq., at Burr & Forman LLP, represent the Debtors. Citation's schedules filed with the Court showed total assets of $157,242,049 and total debts of $253,270,918. * * * As reported in the Troubled Company Reporter on July 17, 2007, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Citation Corp. The previous rating on Citation, an auto supplier, was withdrawn upon the company's bankruptcy filing in March 2007, and the rating assigned reflects the company's new capital structure since its emergence from bankruptcy in April. The outlook is stable. CITIGROUP COMM: Stable Performance Cues Fitch to Affirm Ratings --------------------------------------------------------------- Fitch affirms Citigroup Commercial Mortgage Trust, series 2006-C4, certificates as: -- $71.7 million class A-1 'AAA'; -- $152.7 million class A-2 'AAA'; -- $135.2 million class A-SB 'AAA'; -- $831.3 million class A-3 'AAA'; -- $384.4 million class A-1A 'AAA'; -- $266.4 million class A-M 'AAA'; -- $164.1 million class A-J 'AAA'; -- Interest only class X AAA'; -- $50.9 million class B 'AA'; -- $25.5 million class C 'AA-'; -- $31.1 million class D 'A'; -- $22.6 million class E 'A-'; -- $28.3 million class F 'BBB+'; -- $28.3 million class G 'BBB'; -- $25.5 million class H 'BBB-'; -- $11.3 million class J 'BB+'; -- $8.5 million class K 'BB'; -- $8.5 million class L 'BB-'; -- $5.7 million class M 'B+'; -- $5.7 million class N 'B'; -- $5.7 million class O 'B-'. Fitch does not rate the $22 million class P. The rating affirmations are due to stable collateral performance since issuance. As of the June 2007 distribution date, the pool's aggregate certificate balance has decreased 0.4% to $2.25 billion from $2.26 billion at issuance. There are no delinquent or specially serviced loans. Fitch reviewed the one credit assessed loan in the transaction, Reckson II Office Portfolio(3.2%). The loan maintains investment grade credit assessment due to stable performance. The Reckson II Office Portfolio loan is secured by seven office properties totaling 915,558 square feet, six of which are located in upstate New York, one in Northern New Jersey. The weighted average occupancy as of March 2007 increased to 96.1% from 94.8% at issuance. COI MIDWEST: Plan Confirmation Hearing Scheduled on August 22 ------------------------------------------------------------- The Honorable Richard M. Neiter of the United States Bankruptcy Court for the Central District of California will convene a hearing on Aug. 20, 2007, at 2:00 p.m., at Courtroom 1645, 255 E. Temple Street in Los Angeles, California, to consider confirmation of COI Midwest Investment LLC's Amended Chapter 11 Plan of Reorganization. Objections, if any, are due Aug 23, 2007. The Plan will be funded from the proceeds of the sale of the Debtor's property, estimated approximately $13.8 million. The Debtor assures the Court that the amount is more than enough to insure all Secured and General Unsecured Claims. Treatment of Claims Under the Plan, Administrative and Priority Tax Claims will be paid in full on the effective date. Secured Claim of Wells Fargo, totaling $8.6 million, will also be paid in full. Holders of Priority Unsecured Claims will be paid in cash equal to the allowed amount of the claim on the effective date. General Unsecured Claims, excluding DSC Entities, totaling $2.5 million, will be paid in full, including postpetition interest from the Debtor's bankruptcy filing through the date of payment of allowed claims under Section 1961(a) of the Bankruptcy Code. General Unsecured Claims of DSC Entities, totaling $3.6 million, will also be paid in full. Holders of Equity Interests will retain their interest in the Debtor. Headquartered in the City of Industry, California, COI Midwest Investments LLC leases its real property in Canyon Road. The Company filed for bankruptcy protection on June 1, 2006 (Bankr. C.D. Calif. Case No. 06-12329). Ron Bender, Esq., and David B. Golubchik, Esq., at Levene, Neale, Bender, Rankin & Brill, LLP, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for bankruptcy, it listed estimated assets between $10 million and $50 million and estimated debts between $1 million and $10 million. COMMUNICATIONS & POWER: S&P Affirms Corporate Credit Rating at B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Communications & Power Industries Inc. and its parent, CPI International Inc., including the 'B+' corporate credit rating on both entities. The outlook is stable. At the same time, S&P assigned a 'BB' bank loan rating and '1' recovery rating to CPI's proposed $160 million amended and restated credit facility, indicating expectations of a very high (90%-100%) recovery in the event of payment default. The proceeds from the amended credit facility will be used to refinance the existing term loan and $58 million of the senior floating rate notes at CPI International. The company is also using a portion of its cash to make a small acquisition. Pro forma for the refinancing and the acquisition, debt levels will remain unchanged. "The ratings on CPI reflect a highly leveraged capital structure and modest scope of operations, offset somewhat by leading positions in niche markets," said Standard & Poor's credit analyst Christopher DeNicolo. The company is a leading provider of vacuum electron devices used in commercial and defense applications requiring high-power and/or high-frequency power generation. VEDs are used in radar, electronic warfare, satellite communications, and certain medical, industrial, and scientific applications. Debt leverage has been high due to the company's LBO in 2003 and subsequent debt-financed dividends. However, in May 2006, CPI International issued 2.9 million shares of stock in an IPO and used approximately $48 million of the proceeds to reduce bank borrowings. Therefore debt to EBITDA has declined to around 4x. Earnings growth and debt reduction using excess cash flows should result in steadily declining leverage measures. Other financial measures should also improve modestly, with EBITDA interest coverage expected to stay in the 3x-3.5x area and funds from operations to debt in the 15%-20% range, consistent with current ratings. CPI is first or second in all of the markets in which it competes. Program diversity is good, with no one program accounting for more than 6% of revenue, and almost 60% of programs are sole source. A significant portion of CPI's products are consumable, resulting in a steady stream of generally higher-margin aftermarket sales, which account for approximately 50% of total revenue. Modest earnings growth and debt repayment from excess cash flows should result in a steadily improving financial profile. However, any improvement could be constrained by acquisitions. The outlook could be revised to positive if debt reduction results in a sustained improvement in credit protection measures. The outlook could be revised to negative if leverage does not decline as expected as a result of lower cash generation or acquisitions. COMMSCOPE INC: Submits Pre-merger Notification Filings ------------------------------------------------------- CommScope Inc. and Andrew Corporation submitted their pre-merger notification filings as required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to the proposed acquisition by CommScope Inc. of Andrew Corp. In connection with the proposed merger, CommScope Inc. intends to file a registration statement with the Securities and Exchange Commission on Form S-4 and CommScope Inc. and Andrew Corp. expect to mail a proxy statement/ prospectus to Andrew Corp.'s stockholders containing information about the merger. The registration statement and the proxy statement/prospectus will contain important information about CommScope Inc., Andrew Corp., the merger, and related matters. As reported in the Troubled Company Reporter on June 29, 2007, CommScope Inc. and Andrew Corporation entered into a definitive agreement on June 27, 2007, unanimously approved by their respective Boards of Directors, under which CommScope will acquire all of the outstanding shares of Andrew for $15.00 per share, at least 90% in cash, creating a global leader in infrastructure solutions for communications networks. The transaction, which is valued at approximately $2.6 billion, is expected to be accretive to CommScope's cash earnings per share, excluding special items, in the first full year after closing. The $15.00 per share purchase price represents a premium of approximately 13% over Andrew's average closing share price for the last 30 trading days, a 21% premium over Andrew's average closing share price for the last 60 trading days, and a 16% premium over the closing price of Andrew's common stock on Tuesday, June 26, 2007. About Andrew Corp. Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. About CommScope Based in Hickory, North Carolina, CommScope, Inc. (NYSE:CTV) -- http://www.commscope.com/-- designs and manufactures "last mile" cable and connectivity solutions for communication networks. Through its SYSTIMAX(R) Solutions(TM) and Uniprise(R) Solutions brands CommScope is the global leader in structured cabling systems for business enterprise applications. It is also the world's largest manufacturer of coaxial cable for Hybrid Fiber Coaxial applications. Backed by strong research and development, CommScope combines technical expertise and proprietary technology with global manufacturing capability to provide customers with high-performance wired or wireless cabling solutions. CommScope has facilities in Brazil, Australia, China and Ireland. * * * CommScope carries Standard & Poor's Rating Services BB corporate credit rating with a stable outlook. CONCORD REAL: Fitch Affirms BB Rating on $18.6MM Class H Notes -------------------------------------------------------------- Fitch affirms all classes of Concord Real Estate CDO 2006-1 as: -- $202,275,000 class A-1 at 'AAA'; -- $23,250,000 class A-2 at 'AAA'; -- $46,500,000 class B at 'AA+'; -- $20,925,000 class C at 'AA'; -- $37,200,000 class D at 'A'; -- $22,087,000 class E at 'BBB+'; -- $24,413,000 class F at 'BBB-'; -- $18,600,000 class G at 'BBB-'; -- $18,600,000 class H at 'BB'. Deal Summary: Concord Real Estate CDO 2006-1 is a $465,000,000 revolving commercial real estate cash flow CDO that closed on Dec. 21, 2006. As of the June 19, 2007 effective date trustee report and Fitch categorization, the CDO was substantially invested as follows: whole loans/A-notes (18.0%), B-notes (35.3%), commercial real estate mezzanine loans (21.1%), commercial mortgage backed securities (CMBS) (20.1%), CRE CDOs (4.8%). Only 0.6% of the CDO is in cash. The portfolio is selected and monitored by WRP Management, LLC, as collateral asset manager. Concord Real Estate CDO 2006-1 has a five-year reinvestment period, during which, if all reinvestment criteria are satisfied, principal proceeds may be used to invest in substitute collateral. The reinvestment period ends January 2012. Collateral Manager: Winthrop Realty Partners, L.P. is the external advisor to the collateral manager for Concord Real Estate CDO 2006-1. WRP Management, LLC, a newly formed entity owned collectively by Winthrop Realty Trust and Lexington Realty Trust, is the collateral manager. Winthrop REIT and Lexington have entered into a 50%/50% joint venture to manage CDOs that will be used as financing vehicles for the benefit of both REITs. The debt- funding platform created by this partnership invests primarily in CMBS, whole loans, B-notes and mezzanine loans. Winthrop is a privately owned full-service national real estate investment and management company that, together with it affiliated entities, currently owns and/or manages approximately $3.5 billion in real estate assets throughout the country, as well as about $80 million in CMBS. The whole loans are specially serviced by Ocwen Loan Servicing, LLC, (rated 'CSS2' by Fitch). Performance Summary: Concord Real Estate CDO 2006-1 became effective on June 19, 2007. As of the effective date, the 'as-is' Fitch Poolwide Expected Loss increased slightly to 21.50% from 21.125% at close. The CDO has above average reinvestment flexibility with 13.250% cushion based on its current weighted average spread of 2.52%. The CDO's covenanted PEL varies depending on the in-place WAS. Based on this WAS matrix, the maximum allowable PEL is 34.750% and the minimum is 30.250%. The increase to PEL is due to a slight deterioration in the quality of the commercial real estate loans (75% of the pool), however, the newly contributed securities (25% of the pool) had an accretive effect on the CDO. The weighted average rating factor of securities decreased to 7.54 from 7.82 at close, both corresponding to an average rating of 'BBB-/BB+'. At close, the CDO was 79.5% ($369.7 million) ramped. As of the effective date, the CDO is now 99.4% invested. Based on the invested amount, the pool has migrated towards a higher percentage of whole loans/A-notes (1.5% since close) and rated securities (6.5% increase to CMBS and CRE CDOs since close) and less mezzanine loans (6.5% decrease since close) and B-notes (1.5% since close). As of the effective date, the CDO was failing portfolio collateral quality test number 26, which requires that CMBS Securities and CRE CDO securities should have a stated maturity date later than five years past the Stated Maturity but this test was cured on June 27, 2007, by trading in three CMBS bonds with shorter remaining average lives and removing a CRE CDO bond ($12.5 million) which was triggering the failure. The CDO is now in compliance with all of its reinvestment covenants. The WAS has increased since close to 2.52% from 2.39%. The weighted average coupon has also increased to 7.05% from 7.03%, and remains above the 6.50% covenant. Of the pool, 29.7% of the loans are fixed-rate and 67.6% are floating rate. The weighted average life has increased to 4.6 years from 4.1 years at close, which continues to imply that the loans will fully turnover during the reinvestment period. Collateral Analysis: Since close, five loans and seven CMBS/CRE CDO securities have been added to the pool while two loans have paid off, resulting in a net increase of three loans and seven CMBS/CRE CDO bonds totaling $96.2 million (a 20% increase to the CDO par balance). As of the effective date, the CDO is within all of its property type covenants. Office loans comprise the largest percentage of assets at 35.8%. Hotel loans have the next highest percentage at 23.2%. At close, the largest exposure of loans was hotels (27.18%) and the second was office (25.09%). The CDO is also within all its geographic location covenants with the highest percentage invested in Arizona (17.0%), followed by New York (10.4%). The remaining assets consist of CMBS and CRE CDOs. CMBS (20.1%) is comprised of 13 classes in 12 transactions and range in rating from 'BB-' to 'BBB+'. CRE CDOs (4.8%) consist of two classes in two transactions that are rated 'BBB-' and 'BBB'. The classes' ratings are based on Fitch's actual rating, or on Fitch's internal credit assessment for those classes not rated by Fitch. The Fitch Loan Diversity Index score is 385, which is considered average concentration relative to other CRE CDOs. The pool currently consists of 21 loans and 15 rated securities, of which none represents more than 7.6% of the ramped portfolio. The over-collateralization ratios of all classes have remained stable since close, while the interest coverage ratios have decreased over the same period. Both tests are above their covenants, as of the June 2007 trustee report. Rating Definitions: The ratings of the class A-1, A-2, B and C notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class D, E, F, G, and H notes address the likelihood that investors will receive ultimate interest and deferred interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. Upgrades during the reinvestment period are unlikely given the pool could still migrate to the PEL covenant. The Fitch PEL is a measure of the hypothetical loss inherent in the pool at the 'AA' stress environment before taking into account the structural features of the CDO liabilities. Fitch PEL encompasses all loan, property, and poolwide characteristics modeled by Fitch. Ongoing Surveillance: Fitch will continue to monitor and review this transaction for future rating adjustments. The surveillance team will conduct a review whenever there is approximately 15% change in the collateral composition or semi-annually. CORNELL COMPANIES: Improved Performance Cues S&P to Lift Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Houston, Texas-based Cornell Companies Inc. to 'B' from 'B-'. At the same time, Standard & Poor's raised its rating on the company's senior unsecured notes to 'B-' from 'CCC+'. The ratings were removed from CreditWatch, where they were placed with positive implications on May 9, 2007, reflecting Cornell's sustained improvement in operating performance and stronger financial risk profile. "The upgrade reflects Cornell's improved operating performance, more favorable industry fundamentals, and strengthened credit protection measures," said Standard & Poor's credit analyst Mark Salierno. The outlook is stable. The ratings on Cornell reflect its narrow business focus, limited size, customer concentration, and leveraged financial profile. These risks are somewhat offset by favorable demographic trends within the niche private domestic corrections services industry. Cornell is a narrowly focused company providing corrections, treatment, and educational services to U.S. federal, state, and local government agencies. The company's services include adult secure, juvenile (32% of 2006 sales and 18% of operating income), and community corrections (18% of 2006 sales and just under 18% of operating income). With a service capacity of more than 18,000 beds in the U.S., Cornell is the third-largest participant in the U.S. niche privatized corrections industry. CROWN HOLDINGS: June 30 Balance Sheet Upside-down by $388 Million ----------------------------------------------------------------- Crown Holdings Inc.'s consolidated balance sheet at June 30, 2007, showed $6.79 billion in total assets and $7.18 billion in total liabilities, resulting in a $388 million total shareholders' deficit. The company reported net income of $88 million for the second quarter ended June 30, 2007, compared with net income of $50 million for the same period ended June 30, 2006. Net sales in the second quarter rose to $1.99 billion, up 11.7% over the $1.78 million in the second quarter of 2006. The increase was primarily the result of higher sales unit volumes across most product lines and geographies, the pass-through of higher raw material costs and favorable foreign currency translation. Approximately 71% of sales were generated outside the U.S. in both the second quarter of 2007 and 2006. Second quarter gross profit grew 15.5% to $283 million over the $245 million in the 2006 second quarter. As a percentage of net sales, gross profit expanded to 14.2% in the second quarter from 13.8% in the second quarter last year. Stronger sales unit volumes, increased operating efficiencies and productivity gains drove the improvements. Selling and administrative expense in the second quarter was $93 million compared to $74 million in last year's second quarter. The increase is attributable to a higher accrual for incentive compensation costs, foreign currency translation and general inflationary increases. Segment income (a non-GAAP measure defined by the company as gross profit less selling and administrative expense) grew to $190 million in the second quarter, up 11.1% over the $171 million in the 2006 second quarter. Segment income as a percentage of net sales was 9.5% in the second quarter compared to 9.6% in the second quarter last year. Commenting on the results, John W. Conway, chairman and chief executive officer, stated, "The company continued to build momentum in the second quarter through a combination of positive factors. In our Americas Beverage business, volumes and margins are returning to their 2005 levels due to sales unit recovery in North America, strong Latin American results and an increase in specialty cans in our overall sales mix. Equally important, margin recovery in our European Beverage business is on plan. At the same time, our North America Food business continues to improve. The company remains on plan to generate strong free cash flow in 2007, which will be available to pay down debt and repurchase shares. Looking ahead, our new beverage can plant in Cambodia will begin operating in the third quarter. This will further expand and diversify our world class manufacturing portfolio with entry into another fast growing emerging market." Interest expense in the second quarter was $77 million compared to $70 million in the second quarter of 2006. The increase reflects the impact of higher average short-term borrowing rates and foreign currency translation. Net income from continuing operations in the second quarter was $88 million, compared to $74 million in the second quarter of 2006. Included within net income from continuing operations, the company recorded a net gain of $4 million reflecting a net gain of $8 million related to gain on sale of assets offset by a net loss of $4 million related to restructuring actions. In last year's second quarter, the company reported a net gain of $2 million related to financial foreign exchange gains offset by restructuring charges. At June 30, 2007, the company's consolidated balance sheet showed $6.79 billion in total assets and $7.18 billion in total liabilities, resulting in a $388 million total shareholders' deficit. About Crown Holdings Philadelphia, Pa.-based Crown Holdings Inc. (NYSE: CCK) -- http://www.crowncork.com/-- through its affiliated companies, supplies packaging products to consumer marketing companies around the world. CWABS TRUST: Moody's Rates Class B Certificates at Ba1 ------------------------------------------------------ Moody's Investors Service assigned a Aaa rating to the senior certificates issued by CWABS Asset-Backed Certificates Trust 2007- BC3 and ratings ranging from Aa1 to Ba1 to the mezzanine and subordinate certificates in the deal. The securitization is backed by adjustable-rate and fixed-rate, first lien subprime residential mortgage loans acquired by Countrywide Home Loans, Inc. The collateral was originated by Wilmington Finance Incorporated, Decision One Mortgage Company, LLC, Quick Loan Funding Inc., CIT Group/Consumer Finance, Inc., and other mortgage lenders, none of which originated more than 10% of the mortgage loans. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, excess spread, overcollateralization, and an interest-rate swap agreement with Deutsche Bank AG. Moody's expects collateral losses to range from 4.25% to 4.75%. Countrywide Home Loans Servicing LP will act as master servicer. The complete rating actions are: CWABS Asset-Backed Certificates Trust 2007-BC3 Asset-Backed Certificates, Series 2007-BC3 -- Cl. 1-A, Assigned Aaa -- Cl. 2-A-1, Assigned Aaa -- Cl. 2-A-2, Assigned Aaa -- Cl. 2-A-3, Assigned Aaa -- Cl. 2-A-4, Assigned Aaa -- Cl. M-1, Assigned Aa1 -- Cl. M-2, Assigned Aa2 -- Cl. M-3, Assigned Aa3 -- Cl. M-4, Assigned A1 -- Cl. M-5, Assigned A2 -- Cl. M-6, Assigned A3 -- Cl. M-7, Assigned Baa1 -- Cl. M-8, Assigned Baa2 -- Cl. M-9, Assigned Baa3 -- Cl. B, Assigned Ba1 -- Cl. A-R, Assigned Aaa DAVITA INC: Extends 6-5/8% Sr. Notes Exchange Offer to July 25 -------------------------------------------------------------- DaVita Inc. has extended the expiration date of its offer to exchange its 6-5/8% Senior Notes due 2013 which have been registered under the Securities Act of 1933, as amended, for any and all of its outstanding 6-5/8% Senior Notes due 2013 issued on Feb. 23, 2007, until 5:00 p.m., New York City time, on July 25, 2007, unless earlier terminated or extended by DaVita in its sole discretion. The exchange offer was scheduled to expire on Wednesday, July 18, 2007. DaVita was advised by The Bank of New York Trust Company N.A., the exchange agent for the offer, that as of the close of business on July 18, 2007, approximately $398 million aggregate principal amount of its 6-5/8% Senior Notes due 2013 were validly tendered and not withdrawn pursuant to the exchange offer. For more information on the exchange offer: The Bank of New York Trust Company N.A. Attention: Ms. Diane Amoroso c/o The Bank of New York Corporate Trust Operations, Reorganization Unit 101 Barclay Street, 7E New York, NY 10286 Telephone (212) 298-1915 About DaVita Inc. Headquartered in El Segundo, California, DaVita Inc. (NYSE: DVA) -- http://www.davita.com/-- provides dialysis services for patients suffering from chronic kidney failure. It provides services at kidney dialysis centers and home peritoneal dialysis programs domestically in 42 states, and the District of Columbia. As of Dec. 31, 2006, DaVita operated or managed over 1,300 outpatient facilities serving approximately 104,000 patients. * * * As reported in the Troubled Company Reporter on April 16, 2007, Fitch Ratings revised its Rating Outlook for DaVita Inc. to Positive from Stable. In addition, Fitch affirmed DaVita's ratings: issuer default rating 'B+'; bank credit facility 'BB/RR2'; senior subordinated notes 'B-/RR6'; senior unsecured notes 'B/RR5'. DELPHINUS CDO: Fitch Rates $15MM Class E Mezzanine Notes at BB -------------------------------------------------------------- Fitch has assigned these ratings to Delphinus CDO 2007-1, Ltd. & Delphinus CDO 2007-1, LLC,: -- $640,000,000 super senior floating-rate notes 'AAA'; -- $73,500,000 class A-1A senior floating-rate notes 'AAA'; -- $86,500,000 class A-1B senior floating-rate notes 'AAA'; -- $160,000,000 Class A-1C senior floating-rate notes 'AAA'; -- $27,000,000 class S senior floating-rate notes 'AAA'; -- $144,500,000 class A-2 senior floating-rate notes 'AAA'; -- $138,500,000 class A-3 senior floating-rate notes 'AAA'; -- $131,000,000 class B senior floating-rate notes 'AA'; -- $77,500,000 class C mezzanine floating-rate deferrable interest notes 'A'; -- $48,000,000 class D-1 mezzanine floating-rate deferrable interest notes 'BBB+'; -- $30,500,000 class D-2 mezzanine floating-rate deferrable interest notes 'BBB-'; -- $15,000,000 class D-3 mezzanine floating-rate deferrable interest notes 'BBB-'; -- $15,000,000 class E mezzanine floating-rate deferrable interest notes 'BB'. All notes are due 2047 except the class S notes, which are due 2012. DORAL FINANCIAL: Closes Sale of 968 Mil. Shares to Doral Holdings ----------------------------------------------------------------- Doral Financial Corporation had closed the sale of 968,263,968 shares of its common stock, $0.01 par value per share, to Doral Holdings Delaware LLC, a newly formed entity in which Bear Stearns Merchant Banking and other investors, including funds managed by Marathon Asset Management, Perry Capital, the D. E. Shaw group and Tennenbaum Capital Partners, invested. After the closing, Doral Holdings will own approximately 90% of the common shares of Doral that are outstanding. The company's currently outstanding shares of common stock will continue to be traded in the New York Stock Exchange under the company's current symbol, "DRL." "We appreciate the confidence which professional investors are showing in Doral Financial's potential through this substantial investment," Glen R. Wakeman, chief executive officer and president, stated. "We are also most thankful for the support that we have received from our depositors, our customers, our regulators, our employees and existing shareholders with respect to our successful recapitalization." "Doral Financial now moves forward in sound fashion with Doral Bank as its strong core foundation," Mr. Wakeman stated. "Our future growth will be pursued on a path of compliance, productivity and top-of-the-line service to build the value of Doral to all its constituents." "The investment by Doral Holdings demonstrates our commitment to Doral's management team and their strategic vision," David E. King, senior managing director and partner of Bear Stearns Merchant Banking, said. "The investor group recognizes that a lot of work and dedication will be required on the part of Doral's management and its employees to continue to build Doral's brand and profitability. We are looking forward to the opportunities that lay ahead." About Doral Financial Corp. Based in New York City, Doral Financial Corporation (NYSE: DRL) -- http://www.doralfinancial.com/-- is a diversified financial services company engaged in mortgage banking, banking, investment banking activities, institutional securities and insurance agency operations. Its activities are principally conducted in Puerto Rico and in the New York City metropolitan area. Doral is the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency Inc. and Doral Bank FSB, a federal savings bank based in New York City. DORAL FINANCIAL: Moody's Confirms B2 Senior Debt Rating ------------------------------------------------------- Moody's Investors Service confirmed the B2 senior debt rating of Doral Financial Corporation. The rating had been on review for possible downgrade since Jan. 5, 2007. Following the rating confirmation, the rating outlook is stable. The rating action follows the $610 million recapitalization of Doral by Doral Holdings Delaware, LLC, a new entity. The recapitalization was led by Bear Stearns Merchant Banking and a number of other investors. The proceeds from the capital raise, combined with other financial resources, will enable Doral to repay $625 million of debt that matures on July 20. The review for possible downgrade reflected the uncertainty regarding the repayment of that debt. Moody's anticipates that Doral's strengthened management team, having solved its liquidity crisis, will focus on executing its community bank business strategy on Puerto Rico. The rating agency added that successful execution of the plan will result in positive rating pressure and could ultimately support a higher rating. While management has accomplished a great deal in moving the company forward, Doral continues to operate under several regulatory agreements, has a comparatively high level of nonperforming assets, and has not yet returned to profitability. Moreover, Doral's business strategy is evolving and Puerto Rico is currently in an economic recession, which has challenged the profitability and asset quality of all the island's banks. As a result, despite the recapitalization, Moody's did not take a more positive rating action at this time. Doral Financial, headquartered in San Juan, Puerto Rico, reported total assets of $11.5 billion at March 31, 2007. ENTERPRISE GP: S&P Rates $1 Billion Term Loan at BB- ---------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Enterprise GP Holdings L.P. and its $1 billion term loan B due 2014. At the same time, S&P affirmed the 'BB-' corporate credit rating on EPCO Holdings Inc. and removed the rating from CreditWatch with negative implications. The corporate credit rating on EPCO was placed on CreditWatch on May 8, 2007. Furthermore, S&P assigned a 'BB-' rating to EPCO's $900 million term loan B due 2014. The removal of the EPCO rating from CreditWatch reflects S&P's conclusion that the additional debt at EPE is unlikely to materially disadvantage EPCO lenders, because EPCO lenders have access to additional cash flow sources than lenders at EPE. Furthermore, S&P expect that EPE's minority stake in Energy Transfer Equity will provide sufficient, incremental cash flow to support the consolidated debt profile of EPE and EPCO. In addition, a recovery rating of '3' was assigned to the EPE and EPCO term loans to reflect S&P's expectation that lenders to both entities will realize meaningful recovery (50% to 70% of principal) based on our simulated default scenario. The outlook on EPE and EPCO is stable. EPE is a holding company that owns the general partnership interests and some limited partnership interests in the Enterprise Products Partners L.P. (BBB-/Stable/--) and the TEPPCO Partners LP (BBB-/Stable/--) master limited partnerships. The EPE term loan will be used to provide permanent financing for the company's recent acquisition of a 35% minority interest in the general partner of Energy Transfer Equity, the general partner of Energy Transfer Partners LP (BBB-/Stable/--; unsolicited rating). The stable outlook on EPE and EPCO reflects our near-term expectations for continuing stability in the distribution growth of Enterprise Products, TEPPCO, and Energy Transfer Partners. "The outlook could be revised to negative or ratings could be lowered if the financial health of any of the underlying MLPs deteriorates or if distribution growth at the MLP falls below current expectations," said Standard & Poor's credit analyst Michael Messer. "The outlook could be revised to positive or ratings could be raised if debt reduction occurs as planned at EPCO Holdings and no new leverage is added at EPE," he continued. EPOD INTERNATIONAL: March 31 Balance Sheet Upside-down by $670,892 ------------------------------------------------------------------ EPOD International Inc.'s balance sheet at March 31, 2007, showed $2,003,232 million in total assets and $2,674,124 million in total liabilities, resulting in a $670,892 total stockholders' deficit. The company's balance sheet at March 31, 2007, also showed strained liquidity with $769,146 in total current assets available to pay $2.7 million in total current liabilities. The company reported a net loss of $173,069 for the first quarter ended March 31, 2007, compared with a net loss of $312,930 for the same period last year. The company reported zero revenues in both periods. The decrease in net loss is primarily due to the decrease in total operating expenses. Decreases were recorded in general and administrative expenses, legal and professional expenses, research and development expenses, and depreciation and amortization expenses. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?20a2 Going Concern Doubt Williams & Webster P.S., in Spokane, Washington, expressed substantial doubt about EPOD International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's significant and ongoing operating losses. About Epod International EPOD International Inc. (OTCBB: EPOI) -- http://www.epodinc.com/ -- is in the process of developing and producing innovative energy management and electronic technology with the intent to license and sell such products and technology. FITNESS COMPANY: Organizational Meeting Scheduled on July 27 ------------------------------------------------------------ The U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in The Fitness Company Holdings Group, Inc., and its debtor-affiliates' chapter 11 cases at 10:00 a.m., on July 27, 2007, at the J. Caleb Boggs Federal Building, Room 2112, 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 Debtors' 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. Headquartered in Morristown, New Jersey, The Fitness Company Holdings Group, Inc. -- http://www.thefitnesscompany.com/-- owns and operates fitness centers. The company and three of its affiliates filed for chapter 11 protection on July 13, 2007 (Bankr. D. Del. Case Nos. 07-10936 through 07-10939). Kathleen Campbell Davis, Esq., at Campbell & Levine, L.L.C., represents the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. FRIENDSHIP VILLAGE: Fitch Affirms Rating on Revenue Bonds at BB+ ---------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' rating on Friendship Village of Schaumburg's, Illinois, outstanding $80.5 million of series 2005 A&B revenue bonds issued through the Illinois Finance Authority. Fitch has also placed the bonds on Rating Watch Negative. The Rating Watch Negative reflects the cancellation risk on pre- sale deposits that are being converted into residency agreements and the increasing number of independent living unit vacancies in FVS' existing Bridgegate apartment building. With the opening of the new Bridgewater Place project, current depositors are expected to execute a residency agreement by mid-August. While FVS has returned to compliance with marketing covenants as of the March 31, 2007 and June 30, 2007 testing dates, Fitch is concerned that as depositors are asked to execute a residency agreement a rise in cancellations may occur which may lead to a violation of the Sept. 30, 2007 marketing covenant. Currently, FVS has 136 pre-sale agreements and is required to have 138 by Sept. 30, 2007. In addition, census in the Bridgegate apartments has steadily declined from 456 March 31, 2006 to 433 at March 31, 2007 and management anticipates additional vacancies in Bridgegate to occur as certain existing residents relocate to Bridgewater Place. Management is reviewing their pricing matrix to assure that all units are appropriately priced to achieve stabilized occupancy. Fitch expects to formally review FVS again in three months. A violation of Bridgewater Place marketing covenants and/or a continued decline in census at Bridgegate may cause downward rating action. The rating affirmation at 'BB+' reflects a solid start to occupancy of Bridgewater Place, adequate debt service coverage and weak liquidity indicators. The new Bridgewater Place expansion opened for occupancy on June 19th, 2007. Through July 17th, approximately 58 units have been occupied with another 16 units expected to be occupied by early August. Including the scheduled move-ins, FVS is comfortably ahead of its occupancy projections which is viewed positively by Fitch. Debt service coverage in fiscal 2006 and 2007 was adequate at 2.4 times and 2.2x, respectively. FVS's unrestricted cash and investments totaled $14.8 million as of March 31, 2007 which translated into 171 days cash on hand and just 11% of long term debt. However, FVS' liquidity position should grow dramatically as entrance fees on the Bridgewater Place units are collected. Management has projected days cash on hand to grow to 355 by the end of fiscal 2008 (year ending March 31, 2008). Friendship Village of Schaumburg is a Type B Continuing Care Retirement Community currently consisting of 640 independent living apartments, 28 independent living cottages, 99 assisted living units (including 23 dementia units) and 248 skilled nursing beds. The facility is located in Schaumburg, IL, approximately 30 miles northwest of downtown Chicago. In fiscal 2007, FVS had total revenues of $33.6 million. FVS' disclosure language provides for annual audited financials and quarterly financial statements to be delivered to bondholders. Fitch views FVS' disclosure language favorably. Disclosure to date has been excellent and includes regularly scheduled investor calls. GATEHOUSE MEDIA: Completed Offering Cues S&P to Affirm Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on GateHouse Media Operating Inc., including the 'B+' corporate credit rating. S&P removed the ratings from CreditWatch, where they were placed on April 13, 2007 with negative implications, following the company's announcement that it had agreed to acquire four daily newspapers from Gannett Co. (A-/Stable/A-2) for $410 million. The rating outlook is stable. At the same time, Standard & Poor's revised its recovery rating on GateHouse's $1.235 billion bank facility to '2', indicating that lenders can expect substantial (70% to 90%) recovery in the event of a payment default, from '1'. The 'BB-' issue-level rating on this secured debt was affirmed and removed from CreditWatch. The affirmation follows GateHouse's announcement that it has completed its follow-on equity offering of 17 million shares, priced at $18.45 per share. The company plans to use proceeds from the transaction to repay its $300 million bridge loan credit facility and for general corporate purposes. The offering also includes a greenshoe option, which grants the underwriters the option to purchase up to an additional 1.7 million shares, although it has not yet been determined whether they will exercise this option. "The 'B+' corporate credit rating on GateHouse is based on the consolidated credit quality of its holding company parent, GateHouse Media Inc.," noted Standard & Poor's credit analyst Peggy Hebard. "The rating reflects the company's highly leveraged capital structure as a result of its initial capitalization and growth through acquisition. In addition, GateHouse is expected to pay out a major portion of its free operating cash flow as dividends. These factors are offset, in part, by the company's fairly stable revenues and cash flow throughout the advertising cycle. This is attributable to GateHouse's geographic diversity and the fact that its operations are primarily in non-metropolitan markets where it is the major source of local news and print advertising. The company also benefits from healthy operating cash flow margins, modest capital expenditures, minimal cash income taxes, and no required debt amortization." GB RICHARDSON: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: G.B. Richardson Property Management Corp. 143 West 19th Street Jacksonville, FL 32206 Bankruptcy Case No.: 07-02972 Chapter 11 Petition Date: July 15, 2007 Court: Middle District of Florida (Jacksonville) Debtor's Counsel: Gerald B. Stewart, Esq. 220 East Forsyth Street Jacksonville, FL 32202 Tel: (904) 353-8876 Fax: (904) 356-2776 Estimated Assets: Unstated Estimated Debts: Unstated The Debtor did not file a list of its 20 largest unsecured creditors. GENERAL MOTORS: Reports Global 2nd Qtr. Sales of 2.4 Mil. Vehicles ------------------------------------------------------------------ General Motors Corp. sold 2.405 million cars and trucks around the world in the second quarter of 2007, reporting record sales outside the United States, according to preliminary sales figures. GM sold 2.395 million vehicles in the second quarter last year. "GM's second quarter sales were driven by exceptionally strong demand in emerging markets," John Middlebrook, GM vice president, Global Sales, Service and Marketing Operations, said. "GM global sales of 4.67 million vehicles for the first half of the year reflects solid results, in fact we're on track to have our second- best annual sales performance in our almost 100-year history. In the second quarter we experienced record sales growth around the globe including 20% growth in Latin America, Africa and the Middle East -- an all-time quarterly record for that region, and 8% growth in the Asia/Pacific region. We're also pleased to see almost 5% growth in Europe where we sold more than 574,000 vehicles." Chevrolet global sales of 1.13 million vehicles in the second quarter of 2007 were up more than 4,000 vehicles compared with a year ago. The brand grew by 34% in Europe, 24% in Latin America, Africa and the Middle East and 3% in Asia-Pacific. Saturn sales in the United States and Canada were up 27%, based largely on the popularity of three new vehicles, the Sky roadster, Aura mid-car and Outlook mid-utility crossover vehicle. Saturn is launching the all-new Vue small utility crossover and soon will introduce the Astra small car. Saturn has two hybrid offerings in its lineup, the Aura Green Line and Vue Green Line. Second quarter sales outside the United States has set a record. At 1.39 million vehicles, Q2 2007 sales outside of the United States accounted for about 58% of GM's total global sales, growing at close to 8% compared with Q2 2006, outpacing the industry average growth rate of 6%. In the Latin America, Africa and Middle East region, GM sales surged to 293,300 vehicles, up 20% in volume compared with 2006, which set the industry and GM record for the second quarter. Sales in Brazil were up 23% for the quarter. In the Asia/Pacific region, GM sales of 338,000 vehicles were 8% higher than the previous year's second quarter, and were a record for the quarter. GM China sales of 234,000 vehicles posted a more than 6% sales increase compared with 2006. GM remained the top- selling automaker in China. With these results, GM is on track to become the first manufacturer in China to exceed one million vehicles sold annually. GM's sales in China include sales by SAIC-GM-Wuling, in which GM owns the maximum permissible interest for a foreign company, 34%. In Europe, GM also set a quarterly sales record with deliveries of 574,000 vehicles, up 5%. Growth in Russia, up 106%, led the increase. Chevrolet achieved record European sales of 114,900 vehicles, up 34%, and is fueling GM's growth in Russia. Vauxhall sales strength in the UK helped offset significant reductions in the German market, keeping Opel/Vauxhall share in Europe at 7.4% for the first half of the year. In North America, planned reductions in daily rental sales and softness in the U.S. market due to increasing fuel prices and concerns about housing, resulted in sales of 1.2 million vehicles, a decline of 7% compared with a strong quarter the previous year. Despite a competitive market for full-size pickups, GM continues to show pickup truck segment leadership with share gains in the quarter thanks to the North America Truck of the Year Chevrolet Silverado and all-new GMC Sierra. GM's mid-car and mid-utility crossover segments also saw retail sales gains on the strength of mid-cars Saturn Aura, Pontiac G6 and Chevrolet Impala, and mid- utility crossovers GMC Acadia, Saturn Outlook and Buick Enclave. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908, GM employs about 280,000 people around the world. With global manufactures its cars and trucks in 33 countries. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on May 28, 2007, Standard & Poor's Ratings Services placed General Motors Corp.'s corporate credit rating at B/Negative/B-3. At the same time, Moody's Investors Service affirmed GM's B3 Corporate Family Rating and B3 Probability of Default Rating, and maintained its SGL-3 Speculative Grade Liquidity Rating. The rating outlook remains negative. GENESIS HEALTHCARE: S&P Withdraws B+ Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings on Genesis HealthCare Corp., including the 'B+' corporate credit rating, after removing them from CreditWatch. "The company completed its acquisition by private equity firms Formation Capital and JER Partners," explained Standard & Poor's credit analyst David Peknay. All of Genesis's prior debt was repaid on July 13, 2007. GSI GROUP: Gets Requisite Consents to Amendment Senior Notes ------------------------------------------------------------ The GSI Group, Inc. received the requisite consents to adopt all of the proposed amendments to the indenture related to its outstanding 12% Senior Notes due 2013. The consent solicitation and the related tender offer are being made in connection with the previously announced merger of the company's parent, GSI Holdings Corp., with an affiliate of Centerbridge Capital Partners L.P. As of 5:00 p.m., New York City time, on July 13, 2007, the company had received consents and tendered Notes in respect of 100% of the aggregate outstanding principal amount of Notes. It is expected that the supplemental indenture effecting the proposed amendments will be executed shortly but such proposed amendments will only become operative immediately prior to the acceptance for payment of all Notes that are validly tendered (and not withdrawn) on or prior to the Consent Payment Deadline. The Consent Payment Deadline with respect to the tender offer and consent solicitation has now passed and withdrawal rights have terminated. The tender offer will expire at midnight, New York City time, on Aug. 13, 2007, unless extended or earlier terminated by the company. The tender offer and consent solicitation relating to the Notes are being made upon the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated June 29, 2007, and the related Consent and Letter of Transmittal. Further details about the terms and conditions of the tender offer and consent solicitation are set forth in the Offer to Purchase. The company has retained UBS Securities LLC to act as the Dealer Manager for the tender offer and Solicitation Agent for the consent solicitation. About The GSI Group The GSI Group Inc. -- http://www.grainsystems.com/-- manufactures agricultural equipment. The company's grain, swine and poultry products are used by producers and purchasers of grain, and by producers of swine and poultry. The company is comprised of several manufacturing divisions. Grain Systems (GSI), and GSI International are the grain storage, drying and material handling divisions of The GSI Group. GSI manufactures galvanized steel storage bins and many types of grain drying systems including portable, stacked, tower and process dryers. In addition, GSI carries a full line of material handling equipment including augers, bin sweeps, bucket elevators, conveyors, distributors, chain loop systems, and grain spreaders. The GSI Group markets its products to over 75 countries worldwide through a network of independent dealers to grain/protein producers and large commercial businesses. * * * As reported in the Troubled Company Reporter on July 18, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Assumption, Illinois-based GSI Group Inc. and revised its outlook to stable from negative. HANCOCK FABRICS: Amends Bylaws to Allow Uncertified Shares ---------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Larry D. Fair, vice president of finance of Hancock Fabrics Inc., relates that effective July 3, 2007, the Board of Directors of Hancock Fabrics approved the Amended and Restated Bylaws of the Company. The sole change in the Amended and Restated Bylaws appears in Article IV - Section 3 to allow for the issuance by the Company of uncertificated shares in book entry format. By allowing uncertificated shares, the Company may participate in the Direct Registration System, which is currently administered by The Depository Trust Company. The Direct Registration System allows investors to have securities registered in their names without the issuance of physical certificates and allows investors to transfer securities electronically without being subject to the risks and delays associated with transferring physical certificates, according to Mr. Fair. A full-text copy of the Amended and Restated Bylaws and the amended Article IV-Section 3 is available for free at: http://researcharchives.com/t/s?21ac About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and six of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. (Hancock Fabric Bankruptcy News, Issue No. 13, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Panel Retains Grant Thornton as Financial Advisor ------------------------------------------------------------------ The United States Bankruptcy Court for the District of Delaware has authorized the Official Committee of Unsecured Creditors in Hancock Fabrics Inc. and debtor-affiliates' bankruptcy cases to retain Grant Thornton as its financial advisor nunc pro tunc to April 4, 2007. Grant Thornton's liability will not exceed the fees the firm receives for the portion of the work giving rise to that liability, the Court rules. In addition, the Creditors Committee agrees that Grant Thornton will not be liable for any exemplary damages or loss. As reported in the Troubled Company Reporter on May 11, 2007, Mukesh Bhat, the Committee's co-chairperson, told the Court that the Debtors are large, complex enterprises and the Official Committee of Unsecured Creditors requires the services of an experienced financial advisor, As financial advisor, Grant Thornton is expected to assist and advise the Creditors Committee in the analysis of: (a) the Debtors' current financial position; (b) the Debtors' business plans, cash flow projections, restructuring programs, selling, general and administrative structure and other reports prepared by the Debtors; (c) proposed transactions or other actions for which the Debtors or other parties-in-interest seek Court approval, including the evaluation of competing bids in connection with the divestiture of corporate assets, DIP financing or use of cash collateral; (d) the Debtors' internally prepared financial statements and related documentation to evaluate performance of the Debtors as compared to their projected results; (e) the development, evaluation and documentation of any plan of reorganization or strategic transactions; and (f) the Debtors' hypothetical liquidation analyses under various scenarios. Grant Thornton will also assist and advise the Creditors Committee in other services, including other bankruptcy reorganization and related litigation support efforts, tax services, valuation assistance, corporate finance, management and administrative advice, and compensation and benefits. Furthermore, Grant Thornton will attend and advise at meetings with the Creditors Committee and its counsel and the Debtors' representatives and other parties. Grant Thornton will be paid according to its standard hourly rates, subject to a 15% discount: Professional Hourly Rate ------------ ----------- Partner/Principal/Director $575 - $625 Senior Manager $455 - $520 Manager $390 - $425 Senior Consultant $270 - $340 Consultant $205 - $215 Paraprofessional $75 - $150 In addition to professional fees, Grant Thornton will be reimbursed for any reasonable and necessary expenses, including travel, report production, delivery services and other costs. James A. Peko, a principal at Grant Thornton, assured the Court that his firm does not represent any interest adverse to the Creditors Committee, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and six of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. (Hancock Fabric Bankruptcy News, Issue No. 13, http://bankrupt.com/newsstand/or 215/945-7000). HANSCOM FAMILY: S&P Lowers Rating on Series 2004B Bonds to BB ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Hanscom Family Housing, LLC's taxable military housing revenue bonds series 2004A and B to 'BBB+' and 'BB' from 'AA' and 'A', and placed the ratings on CreditWatch developing due to projected weak debt service coverage. The rating actions reflect Standard & Poor's financial projections of debt service coverage of 1.42x for 2004A and 1.14x for 2004B based on 2006 unaudited financial statements. Although the debt service coverage for Hanscom Family Housing, LLC is significantly strong, there are contributing factors that may cause the coverage to weaken. Based on Standard & Poor's projections, the contributing factors are negligible BAH increases over the past several years and lower than expected NOI, due to construction delays, and diminished capitalized interest in 2007, which was a source of revenue eligible to pay debt service on the bonds. The developing CreditWatch implications are the result of the significant delays in construction completion with only 11% of the scheduled new construction complete along with the fact that audited financial statements have not been complete and reviewed by Standard & Poor's for 2006. Hanscom Family Housing, LLC series 2004A and B revenue bonds have semiannual interest payment dates in April and October. Standard & Poor's has received verified fund balances from the trustee, which indicates that at the projected debt service coverage level, the Oct. 15 payment date will be met without withdrawing money from the DSRF for the Series A and B bonds. It is uncertain if a withdraw on the DSRF will be required for the Series B bonds for the future debt service payment due to the financial stresses. The debt service reserve fund for both the series 2004A and 2004B bonds are funded at the maximum annual debt service. Factors that could lead to a rating upgrade include debt service coverage higher than projected after release and review of audited financial statements, and a recovery plan finalized in the near future. Factors that could lead to a downgrade include debt service coverage lower than anticipated, invasion of the debt service reserve fund and failure to finalize a recovery plan. The stable outlook reflects the base's high essentiality and favorable location, coupled with the strength of the Boston area's real estate market and the fact that the project consists of all newly constructed units. Standard & Poor's expects demand for family housing units at Hanscom Air Force Base to sustain occupancy rates, pledged revenues, and debt service coverage consistent with current rating levels. Downward rating action could occur if vacancy rates and/or expenses were to significantly exceed projections, thereby lowering coverage well below forecasted levels. HERSHEY CO: Weak Performance Cues S&P's Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on The Hershey Co. on CreditWatch with negative implications, meaning that the ratings could either be lowered or affirmed following the completion of S&P's review. Total debt outstanding at Hershey was about $2.2 billion at July 1, 2007. "The CreditWatch placement reflects weak year-to-date performance, and another downward revision to Hershey's earnings outlook for 2007 primarily due to increasing dairy input costs and slower- than-expected improvement in the U.S. business," said Standard & Poor's credit analyst Alison Sullivan. Prior to the earnings guidance revision, the company lowered fiscal 2007 earnings expectations in May 2007. "We are concerned about the continued decline in financial performance as credit measures are already weak for the rating." Adjusted EBITDA was flat year-to-date after adding back business realignment charges. Standard & Poor's estimates total debt to EBITDA to be near 2x for the 12 months ended July 2, 2007. Standard & Poor's will review Hershey's operating, strategic, and financial plans with management, before resolving the CreditWatch listing. HILLCREST SAYLOR: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Hillcrest Saylor Dairy Farms, L.L.C. 3684 Kingwood Road Rockwood, PA 15557-7802 Bankruptcy Case No.: 07-70808 Type of business: The Debtor owns and operates a dairy farm. Chapter 11 Petition Date: July 13, 2007 Court: Western District of Pennsylvania (Johnstown) Debtor's Counsel: David J. Novak, Esq. Spence, Custer, Saylor, Wolfe & Rose, L.L.C. 400 U.S. Bank Building, P.O. Box 280 Johnstown, PA 15907 Tel: (814) 536-0735 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hernley Harvesting trade debt $65,000 432 Ream Road New Paris, PA 15554 Yachere Feed, Inc. trade debt $49,437 412 Somerset Avenue Rockwood, PA 15501 Luther P. Miller, Inc. trade debt $43,986 821 Oden Street Confluence, PA 15424 Animal Medical Center trade debt $42,249 Kinard & Associates trade debt $41,964 Commodity Blenders, Inc. trade debt $41,411 Harlan L. Fricke trade debt $34,545 Nel Net, Inc. trade debt $31,484 Furst McNess trade debt $30,579 J.&L. Hay trade debt $27,000 Academy Collection trade debt $26,176 Service, Inc. A.T.&T. Universal Card Renaissance Nutrition, trade debt $23,837 Inc. George Hay trade debt $20,000 John Sines/Sines trade debt $17,500 Harvesting A.A.A. Financial Service trade debt $15,012 Van Bremen's Refrigeration trade debt $10,736 & Dairy Service, Inc. Lancaster Dairy/Tri-State trade debt $9,788 Discover trade debt $9,427 Embry-Riddle Aeronautical trade debt $9,052 University Dave Eckman trade debt $8,123 INTERPOOL INC: Moody's Withdraws B1 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service withdrew the corporate ratings on Interpool, Inc. upon the announcement the company's shareholders have approved the purchase of Interpool by certain private equity funds managed by affiliates of Fortress Investment Group, LLC. As a part of the transaction, all unsecured debt will be redeemed or fully tendered upon closure. Due to the structure of the transaction, the purchaser has no obligation to provide financial disclosure going forward. This action is associated with the corporate debt ratings on Interpool, Inc. and is not related to Moody's ratings on Interpool's securitized funding. The ratings have been withdrawn because Moody's believes it lacks adequate information to maintain a rating. These ratings were withdrawn: Interpool, Inc. -- Corporate Family (formerly rated B1) -- Senior Unsecured Notes (formerly rated B2) Interpool Capital Trust -- Capital Trust Securities (formerly rated Caa1) Interpool, Inc., headquartered in Princeton, New Jersey, reported about $2.2 billion in total assets as of March 31, 2007. JARDEN CORP: Moody's Affirms B1 Corporate Family Rating -------------------------------------------------------- Moody's Investors Service affirmed Jarden Corporation's B1 corporate family, B1 probability of default, and B3 senior subordinated notes ratings and revised the company's rating outlook to positive from developing. At the same time, Moody's downgraded Jarden's senior secured term loan rating to Ba3 from Ba2, as a result of the company expanding its senior secured term loan by $500 million, via its "accordion" feature, to $1.475 million. Proceeds from the $500 million expansion of term loan B, as well as proceeds from the company's proposed new $400 million asset based revolver (not rated by Moody's) and the company's $300 million accounts receivable securitization program, will be used to fund the cash portion of the acquisition of K2 including the tender of the $200 million K2 senior unsecured notes. Jarden anticipates canceling its existing $200 million senior secured revolving credit facility, and Moody's anticipates withdrawing the Ba2 rating on this facility upon termination. Moody's expects to withdraw all K2 ratings upon closing and successful tender for outstanding rated debt of K2. "The positive rating outlook reflects the progress that Jarden has made integrating various acquisitions over the past three years, which has increased the company's scale of operations and diversification across a number of product categories where it has leading positions", said Scott Tuhy, Vice President/Senior Analyst with Moody's. The proposed acquisition of K2, on the heels of the recent Pure Fishing acquisition, is consistent with the company's strategies, resulting in pro forma sales in excess of $5.5 billion. Successful integration of these recent acquisitions, while at the same time continuing to show sustained organic revenue growth and improved margins in Jarden's existing businesses, could lead to positive rating momentum. The downgrade of Jarden's senior secured term loan to Ba3 from Ba2 reflects the change in capital mix with increased senior debt of $500 million, without a significant increase in junior capital in this transaction. The Ba3 rating of the senior secured term loan reflects the company's B1 probability of default rating and a loss given default assessment of LGD 3, reflecting the security provided to the term loan lenders and support from the high level of junior capital. The B3 senior subordinated notes rating reflects the company's B1 probability of default rating and a loss given default assessment of LGD 5 reflecting its junior ranking to the company's secured credit facilities. These ratings were affirmed: -- Corporate Family Rating and Probability of Default Rating at B1 These ratings were downgraded and assessments amended: -- $1.475 Billion (increased from $975 million) senior secured term loan to Ba3 from Ba2 (LGD 3 -- 36%, was LGD 2 -- 29%) These ratings were affirmed and assessments amended: -- $650 million senior subordinated notes at B3 (LGD 5 -- 80%, was LGD 5 -- 83%) Jarden Corporation is a leading manufacturer and distributor of niche consumer products used in and around the home. The company's primary segment includes Consumer Solutions, Branded Consumables, and Outdoor. Headquartered in Rye, NY the company reported consolidated net sales of about $3.85 billion for the 12 month period ended Dec. 31, 2006. JP MORGAN: Fitch Affirms BB- Rating on $19.7MM Class M Certs. ------------------------------------------------------------- Fitch has affirmed J.P. Morgan Chase Commercial Mortgage Securities Corp., series 2006-LDP7, commercial mortgage pass- through certificates as: -- $82.5 million class A-1 at 'AAA'; -- $255.8 million class A-2 at 'AAA'; -- $75 million class A-3A at 'AAA'; -- $100 million class A-3FL at 'AAA'; -- $94.1 million class A-3B at 'AAA'; -- $1.6 billion class A-4 at 'AAA'; -- $170.2 million class A-SB at 'AAA'; -- $351.7 million class A-1A at 'AAA'; -- $394 million class A-M at 'AAA'; -- $310.2 million class A-J at 'AAA'; -- Interest-only class X at 'AAA'; -- $78.8 million class B at 'AA'; -- $44.3 million class C at 'AA-'; -- $14.8 million class D at 'A+'; -- $39.4 million class E at 'A'; -- $39.4 million class F at 'A-'; -- $49.2 million class G at 'BBB+'; -- $39.4 million class H at 'BBB'; -- $44.3 million class J at 'BBB-'; -- $14.8 million class K at 'BB+'; -- $14.8 million class L at 'BB'; -- $19.7 million class M at 'BB-'. Fitch does not rate the $4.9 million class N, $14.8 million class P, $14.8 million class Q and $44.3 million class NR. The rating affirmations are the result of stable performance and minimal pay down since issuance. As of the July 2007 remittance report, the transaction has paid down 0.4% to $3.92 billion from $3.94 billion at issuance. To date there have been no delinquent or specially serviced loans. LBREP/L SUNCAL: Housing Downturn Cues S&P to Lower Rating to B- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issuer credit rating assigned to LBREP/L SunCal Master I LLC to 'B-' from 'B+'. At the same time, S&P lowered the ratings on the first-lien loans to 'B-' with a '3' recovery rating from 'BB-' with a '1' recovery rating and the rating on the second-lien loan to 'CCC' with a '6' recovery rating from 'B+' with a '2' recovery rating. Concurrently, S&P removed the ratings from CreditWatch, where they were placed with negative implications on Dec. 14, 2006. The outlook is negative. "The downgrades resulted from the sharp housing downturn, which has materially curtailed homebuilders' demand for lots within LBREP's master-planned communities and has negatively affected liquidity," explained Standard & Poor's credit analyst James Fielding. "Slower anticipated absorption and higher development expenditures have also raised leverage on a net-present-value basis and have negatively affected recovery estimates." While the sponsors' contribution of a modest amount of equity and the addition of deeply subordinated debt temporarily alleviated near-term funding concerns, additional capital will be required to meet liquidity needs in the medium term. The negative outlook reflects the severity and duration of the national housing downturn, which has caused major homebuilders to halt land purchases, forfeit lot option deposits, and impair land holdings. Standard & Poor's will lower the ratings further if these conditions continue to negatively affect demand for parcels within LBREP's master-planned communities or if the company funds additional cash shortfalls with debt instead of sponsor equity. MASTR ASSET: S&P Takes Rating Actions on Various Certs. Classes --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on nine classes of mortgage pass-through certificates from four MASTR Asset Securitization Trust series issued in 2003. At the same time, S&P affirmed its ratings on the remaining classes from these four transactions as well as those from 24 other MASTR series. The raised ratings reflect adequate actual and projected credit support percentages, as well as low delinquencies and minimal realized losses. The upgraded classes are primarily backed by 15- and 30-year mortgage loans and have at least 1.56x the original loss coverage levels associated with the higher ratings. The appreciated credit support percentages resulted from the shifting interest structure and significant principal prepayments on the underlying collateral. As of the June 2007 remittance period, the pools supporting the nine upgraded classes had outstanding balances ranging from 17.76% (series 2003-1) to 32.88% (series 2003-4) of their original sizes. Furthermore, total delinquencies in the upgraded series ranged between 0.42% (series 2003-4) and 1.58% (series 2003-2) of the current pool principal balances, with the largest percentage of severe delinquencies (90-plus days, foreclosures, and REOs) coming from series 2003-3 (0.52%). Cumulative realized losses ranged from 0.00% (series 2003-2, 2003-3, and 2003-4) to 0.04% (series 2003-1) of the original pool balances. The affirmed ratings reflect adequate actual and projected credit enhancement levels that are sufficient to support the certificates at their current rating levels. The mortgage pools backing the classes with the affirmed ratings had total delinquencies ranging from 0.00% (various series) to 2.10% (series 2004-9) and severe delinquencies ranging from 0.00% (various series) to 0.63% (series 2006-1). Cumulative realized losses, as a percentage of the original pool balances, ranged from 0.00% (all series except the 2003-1 series) to 0.04% (series 2003-1). Additionally, during the June 2007 remittance period, all pools experienced zero monthly net losses. Subordination provides credit support for these transactions. This senior-subordinate structure has shifting interest features and cross-collateralization. The underlying collateral backing the certificates primarily consists of 15- and 30-year prime fixed-rate mortgage loans secured by first liens on one- to four- family residential properties. Ratings Raised MASTR Asset Securitization Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-1 30-B-3 AA- A+ 2003-1 30-B-4 A- BBB+ 2003-2 30-B-3 AA AA- 2003-2 30-B-4 A A- 2003-3 B-3 A+ A 2003-3 B-4 BBB+ BBB 2003-4 6-B-2 AA AA- 2003-4 6-B-3 A- BBB+ 2003-4 6-B-4 BBB- BB+ Ratings Affirmed MASTR Asset Securitization Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2002-8 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-11, 1-PO AAA 2002-8 1-A-X, 2-A-5, 2-A-6, 2-PO, 2-A-X, B-1, B-2 AAA 2002-8 B-3 AA+ 2003-1 1-A-1, 2-A-3, 2-A-4, 2-A-6, 2-A-8, 2-A-10, 2-A-11 AAA 2003-1 2-A-12, 2-A-13, 2-A-14, 2-A-15, 2-A-16, 2-A-17, 2-A-18 AAA 2003-1 2-A-20, 3-A-1, 3-A-2, 3-A-3, 3-A-4, 3-A-5, 3-A-6 AAA 2003-1 3-A-7, PO, 15-A-X, 30-A-X, 15-B-1, 30-B-1 AAA 2003-1 15-B-2, 30-B-2 AA+ 2003-1 15-B-3 A+ 2003-1 15-B-4 BBB 2003-1 15-B-5 BB 2003-1 30-B-5 B+ 2003-2 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-6, 2-A-7, 2-A-8 AAA 2003-2 2-A-9, 2-A-10, 3-A-2, 3-A-5, 3-A-10, 3-A-11, 3-A-12 AAA 2003-2 3-A-13, 3-A-14, 15-A-X, PO, 15-B-1, 30-A-X, 30-B-1 AAA 2003-2 30-B-2 AA+ 2003-2 15-B-2 AA- 2003-2 15-B-3 BBB+ 2003-2 15-B-4 BB+ 2003-2 30-B-5 BB 2003-2 15-B-5 B 2003-3 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 3-A-2, 3-A-3 AAA 2003-3 3-A-4, 3-A-5, 3-A-6, 3-A-7, 3-A-8, 3-A-15, 3-A-16 AAA 2003-3 3-A-17, 3-A-18, 4-A-1, 5-A-1, PO-1, PO-2 AAA 2003-3 A-X-1, A-X-2, A-X-3, A-X-4, B-1 AAA 2003-3 B-2 AA+ 2003-3 B-5 BB 2003-4 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5, 2-A-6, 2-A-7 AAA 2003-4 3-A-1, 3-A-2, 4-A-1, 4-A-2, 4-A-3, 5-A-1, 6-A-1, 6-A-2 AAA 2003-4 6-A-3, 6-A-5, 6-A-6, 6-A-7, 6-A-8, 6-A-9, 6-A-10, 6-A-11 AAA 2003-4 6-A-16, 6-A-17, 7-A-1, 7-A-2, 8-A-1, 8-A-2, 8-A-3, 8-A-4 AAA 2003-4 C-A-1, C-A-2, PO, 15-A-X, 30-A-X AAA 2003-4 B-1, 6-B-1 AA+ 2003-4 B-2 AA 2003-4 B-3 A 2003-4 B-4 BBB 2003-4 B-5 B+ 2003-4 6-B-5 B 2003-5 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5, 3-A-1 AAA 2003-5 4-A-1, 4-A-2, 4-A-3, 4-A-4, 4-A-5, 5-A-1 AAA 2003-5 15-PO, 30-PO, 15-AX, 30-AX AAA 2003-5 B-1 AA+ 2003-5 B-2 A+ 2003-5 B-3 BBB+ 2003-5 B-4 BB 2003-5 B-5 B 2003-6 1-A-1, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 3-A-5, 4-A-1 AAA 2003-6 5-A-1, 6-A-1, 6-A-2, 6-A-3, 6-A-4, 6-A-5, 6-A-6 AAA 2003-6 6-A-7, 6-A-8, 6-A-9, 7-A-1, 8-A-1, 9-A-1, 9-A-2 AAA 2003-6 9-A-3, 9-A-4, 9-A-5, 9-A-6, 9-A-7, PO AAA 2003-6 PP-A-X, 15-A-X, 30-A-X AAA 2003-6 15-B-1 AA+ 2003-6 30-B-1 AA 2003-6 15-B-2 A+ 2003-6 30-B-2 A 2003-6 15-B-3, 30-B-3 BBB 2003-6 15-B-4, 30-B-4 BB 2003-6 15-B-5, 30-B-5 B 2003-7 1-A-1, 1-A-2, 1-A-3, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5 AAA 2003-7 2-A-6, 2-A-7, 3-A-1, 3-A-2, 4-A-1, 4-A-2, 4-A-3, 4-A-4 AAA 2003-7 4-A-6, 4-A-7, 4-A-8, 4-A-12, 4-A-18, 4-A-19, 4-A-21 AAA 2003-7 4-A-22, 4-A-24, 4-A-32, 4-A-33, 4-A-34, 4-A-35, 4-A-36 AAA 2003-7 4-A-37, 4-A-38, 4-A-41, 4-A-42, 4-A-44, 4-A-45, 4-A-46 AAA 2003-7 5-A-1, 15-PO, 30-PO, PP-A-X, 15-A-X, 30-A-X AAA 2003-7 B-1 AA 2003-7 B-2 A 2003-7 B-3 BBB 2003-7 B-4 BB 2003-7 B-5 B 2003-8 1-A-1, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 3-A-4, 3-A-5, 3-A-6 AAA 2003-8 3-A-7, 3-A-8, 3-A-9, 3-A-10, 3-A-11, 3-A-12, 3-A-13 AAA 2003-8 4-A-1, 4-A-2, 5-A-1, 5-A-2, 6-A-1, 7-A-1, 8-A-1 AAA 2003-8 15-PO, 30-PO, PP-A-X, 15-A-X, 30-A-X AAA 2003-8 B-1 AA 2003-8 B-2 A 2003-8 B-3 BBB 2003-8 B-4 BB 2003-8 B-5 B 2003-9 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5, 2-A-6, 2-A-7 AAA 2003-9 2-A-8, 2-A-9, 2-A-10, 2-A-11, 2-A-12, 3-A-1, 4-A-1 AAA 2003-9 4-A-2, 5-A-1, 5-A-2, 5-A-3, 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2003-9 B-1 AA 2003-9 B-2 A 2003-9 B-3 BBB 2003-9 B-4 BB 2003-9 B-5 B 2003-10 1-A-1, 1-A-2, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 3-A-4 AAA 2003-10 3-A-5, 3-A-6, 3-A-7, 4-A-1, 5-A-1, 6-A-1 AAA 2003-10 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2003-10 B-1 AA 2003-10 B-2 A 2003-10 B-3 BBB 2003-10 B-4 BB 2003-10 B-5 B 2003-11 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5, 2-A-6, 2-A-7 AAA 2003-11 2-A-8, 2-A-9, 2-A-10, 2-A-11, 2-A-12, 3-A-1, 3-A-2 AAA 2003-11 3-A-3, 4-A-1, 5-A-1, 5-A-2, 6-A-1, 6-A-2, 6-A-3, 6-A-4 AAA 2003-11 6-A-6, 6-A-7, 6-A-8, 6-A-9, 6-A-10, 6-A-11, 6-A-12 AAA 2003-11 6-A-13, 6-A-14, 6-A-15, 6-A-16, 6-A-17, 7-A-1, 7-A-2 AAA 2003-11 7-A-3, 7-A-4, 7-A-5, 7-A-6, 7-A-7, 8-A-1, 9-A-1, 9-A-2 AAA 2003-11 9-A-3, 9-A-4, 9-A-5, 9-A-6, 9-A-7, 9-A-8, 10-A-1 AAA 2003-11 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2003-11 B-1 AA 2003-11 B-2 A 2003-11 B-3 BBB 2003-11 B-4 BB 2003-11 B-5 B 2003-12 1-A-1, 1-A-2, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 3-A-4, 3-A-5 AAA 2003-12 3-A-6, 3-A-7, 3-A-8, 3-A-9, 3-A-10, 4-A-1, 5-A-1, 5-A-2 AAA 2003-12 6-A-1, 6-A-2, 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2003-12 B-1 AA 2003-12 B-2 A 2003-12 B-3 BBB 2003-12 B-4 BB 2003-12 B-5 B 2004-1 1-A-1, 1-A-3, 1-A-6, 1-A-7, 1-A-8, 1-A-9, 1-A-10, 1-A-11 AAA 2004-1 1-A-12, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 3-A-4, 3-A-5, 3-A-6 AAA 2004-1 3-A-7, 3-A-8, 4-A-1, 4-A-2, 5-A-4, 5-A-8, 5-A-13, 5-A-14 AAA 2004-1 5-A-15, 5-A-16, 5-A-17, 5-A-18, 5-A-19, 5-A-20 AAA 2004-1 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2004-1 B-1 AA 2004-1 B-2 A 2004-1 B-3 BBB 2004-1 B-4 BB 2004-1 B-5 B 2004-3 1-A-1, 1-A-2, 1-A-3, 2-A-1, 3-A-1, 3-A-2, 4-A-2, 4-A-3 AAA 2004-3 4-A-4, 4-A-5, 4-A-6, 4-A-7, 4-A-8, 4-A-9, 4-A-10 AAA 2004-3 4-A-11, 4-A-12, 4-A-13, 4-A-14, 4-A-15, 5-A-1 AAA 2004-3 PO, 5-A-X, 15-A-X, 30-A-X AAA 2004-3 B-1 AA 2004-3 B-2 A 2004-3 B-3 BBB 2004-3 B-4 BB 2004-3 B-5 B 2004-4 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6, 1-A-7, 1-A-8 AAA 2004-4 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5, 2-A-6, 2-A-7, 2-A-8 AAA 2004-4 3-A-1, PO, 15-A-X, 30-A-X AAA 2004-4 B-4 BB 2004-4 B-5 B 2004-5 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6, 2-A-1 AAA 2004-5 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2004-5 B-3 BBB- 2004-5 B-4 BB 2004-5 B-5 B 2004-6 1-A-1, 1-A-2, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5, 2-A-6 AAA 2004-6 2-A-7, 2-A-8, 2-A-9, 2-A-10, 2-A-11, 2-A-12, 2-A-13 AAA 2004-6 2-A-14, 2-A-15, 3-A-1, 4-A-1, 5-A-1, 5-A-2, 6-A-1, 7-A-1 AAA 2004-6 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2004-6 1-B-1, B-1 AA 2004-6 1-B-2, B-2 A 2004-6 1-B-3, B-3 BBB 2004-6 1-B-4, B-4 BB 2004-6 1-B-5, B-5 B 2004-8 1-A-1, 2-A-1, 3-A-1, 4-A-2, 4-A-3 AAA 2004-8 PO, A-X AAA 2004-8 B-1, 4-B-1 AA 2004-8 B-2, 4-B-2 A 2004-8 B-3, 4-B-3 BBB 2004-8 B-4, 4-B-4 BB 2004-8 B-5, 4-B-5 B 2004-9 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 3-A-1, 3-A-2, 3-A-3 AAA 2004-9 3-A-4, 3-A-5, 3-A-6, 3-A-7, 4-A-1, 5-A-1, 6-A-1, 7-A-1 AAA 2004-9 8-A-2, PO, 15-A-X, 30-A-X AAA 2004-9 15-B-1, 8-B-1 AA 2004-9 15-B-2, 8-B-2 A 2004-9 15-B-3, 8-B-3 BBB 2004-9 30-B-3 BBB- 2004-9 15-B-4, 8-B-4, 30-B-4 BB 2004-9 15-B-5, 8-B-5, 30-B-5 B 2004-10 1-A-1, 2-A-1, 2-A-2, 2-A-3, 3-A-1, 4-A-1, 4-A-2, 4-A-3 AAA 2004-10 4-A-4, 5-A-1, 5-A-2, 5-A-3, 5-A-4, 5-A-5, 5-A-6, 6-A-1 AAA 2004-10 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2004-10 B-1 AA 2004-10 B-2 A 2004-10 B-3 BBB 2004-10 B-4 BB 2004-10 B-5 B 2004-11 1-A-1, 2-A-1, 3-A-1, 4-A-1, 4-A-2, 4-A-3, 4-A-4, 4-A-5 AAA 2004-11 5-A-1, 5-A-2, 5-A-3, 5-A-4, 5-A-5 AAA 2004-11 15-PO, 30-PO, 15-A-X, 30-A-X AAA 2004-11 B-5 B 2004-P2 A-1, A-1-IO, A-2 AAA 2004-P2 B-1 AA 2004-P2 B-2 A 2004-P2 B-3 BBB 2004-P2 B-4 BB 2004-P2 B-5 B 2005-1 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5, 2-A-6 AAA 2005-1 2-A-7, 2-A-8, 2-A-9, 15-A-X, 30-A-X, 15-PO, 30-PO AAA 2005-1 B-1 AA 2005-1 B-4 BB 2005-1 B-5 B 2005-2 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6 AAA 2005-2 2-A-1, 2-A-2, 3-A-1, 4-A-1, PO, A-X AAA 2005-2 B-1 AA 2005-2 B-2 A 2005-2 B-3 BBB 2005-2 B-4 BB 2005-2 B-5 B 2006-1 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6, 1-A-7 AAA 2006-1 1-A-8, 1-A-9, 1-A-10, 1-A-11, 1-A-12, 1-A-13, 1-A-14 AAA 2006-1 2-A-1, 2-A-2, 3-A-1, 3-A-2, 4-A-1 AAA 2006-1 A-LR, A-UR, 15-A-X, 30-A-X, 15-PO, 30-PO AAA 2006-1 B-1 AA 2006-1 B-2 A 2006-1 B-3 BBB 2006-1 B-4 BB 2006-1 B-5 B 2006-2 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6, 1-A-7 AAA 2006-2 1-A-8, 1-A-9, 1-A-10, 1-A-11, 1-A-12, 1-A-13, 1-A-14 AAA 2006-2 1-A-15, 1-A-16, 1-A-17, 1-A-18, 1-A-19, 1-A-20, 1-A-21 AAA 2006-2 1-A-22, 1-A-23, 1-A-24, 1-A-25, 1-A-26, 1-A-27, 1-A-28 AAA 2006-2 1-A-29, 1-A-30, 1-A-31, 1-A-32, 1-A-33, 1-A-34, 1-A-35 AAA 2006-2 2-A-1, 2-A-2, 2-A-3, A-LR, A-UR, PO, A-X AAA 2006-2 B-1 AA 2006-2 B-2 A 2006-2 B-3 BBB 2006-2 B-4 BB 2006-2 B-5 B 2006-3 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6, 1-A-7 AAA 2006-3 1-A-8, 1-A-9, 1-A-10, 1-A-11, 2-A-1, 2-A-2, 2-A-3 AAA 2006-3 2-A-4, 2-A-5, 3-A-1, 15-PO, 30-PO, 15-AX, 30-AX AAA 2006-3 B-1 AA- 2006-3 B-2 A- 2006-3 B-3 BBB 2006-3 B-4 BB- 2006-3 B-5 B MCCLATCHY COMPANY: Earns $40 Million in Second Qtr. Ended June 30 ----------------------------------------------------------------- The McClatchy Company's total net income for the 2007 quarter was $40 million, compared to total net income of $44.1 million, in the 2006 second quarter. Second quarter 2007 earnings from continuing operations of $39.2 million, subject to final resolution of the accounting treatment of The Seattle Times settlement. Earnings from continuing operations in the second quarter of 2006 were $32.2 million. Discontinued operations reflect the results of the Minneapolis Star Tribune newspaper which was sold on March 5, 2007. As a result of the acquisition of Knight Ridder on June 27, 2006, the company issued 35 million Class A shares which negatively impacted earnings per share for the 2007 quarter. Revenues from continuing operations in the second quarter of 2007 were $580 million, compared to revenues from continuing operations of $212 million in 2006. The increase in revenues reflects the addition of 20 newspapers acquired in the acquisition. On a pro forma basis, including all newspapers as if they had been owned since the beginning of 2006, revenues from continuing operations were down 8.3% from 2006 pro forma second quarter revenues of $632.4 million. Advertising revenues were $488.3 million, down 9.8% from pro forma advertising in 2006, and circulation revenues were $69.7 million, down 4.6% on a pro forma basis. Earnings from continuing operations included a loss from the company's investments in unconsolidated companies of $3.4 million, compared to income in the second quarter of 2006, of $500,000. The 2007 loss was due primarily to the operating results of its newsprint investments, which were partially offset by income from other investments. First Half Results The company's total net income, including the results of discontinued operations, for the first half of 2007 was $49 million, compared to total net income of $71.9 million, in 2006. Earnings from continuing operations for the first half of 2007 were $53.8 million, compared to earnings from continuing operations of $54 million, in the first half of 2006. Revenues from continuing operations in the first half of 2007 were $1.15 billion, up $740.1 million from 2006 revenues of $406.5 million, due primarily to the addition of the 20 former Knight Ridder newspapers acquired in the third quarter of 2006. Advertising revenues totaled $965.3 million and circulation revenues were $141.6 million. On a pro forma basis, including the 20 former Knight Ridder newspapers in the first half 2006, total revenues in 2007 would have been down 6.7%, with advertising revenues down 7.6%, and circulation revenues down 4.1%. Cash operating expenses were down 9.3% in the first half and operating cash flow was up 2.4% in the first six months of the year. Interest expense from continuing operations for the first half of 2007 includes $5.7 million related to $530 million in debt repaid from the proceeds of the sale of the Star Tribune on March 5, 2007. However, the operations of the Star Tribune were included in discontinued operations during the first two months of 2007. In addition, earnings from continuing operations included a loss from its investments in unconsolidated companies of $13.1 million, primarily related to its newsprint joint ventures as discussed above, compared to income in the first half of 2006 of $900,000. Management's Comments Commenting on second quarter and first half results, Gary Pruitt, chairman and chief executive officer, said, "Advertising results worsened across the board in the second quarter of 2007, but particularly in real estate advertising. Nearly three-quarters of our advertising declines are coming from California and Florida, two regions that benefited strongly from the real estate boom, and are likewise being hurt in the subsequent real estate slowdown. Advertising revenues were down 17.8% in these two regions in the second quarter and were down 14.4% through June 2007. The housing sector is an important component of these states' economies. Hence, California and Florida also account for a majority of the decline in auto and employment advertising, as the real estate downturn is having an impact on these categories as well. Cyclical factors represent a significant portion of the current advertising downturn. In looking longer term, we feel good about our California and Florida regions. They were the best performers in the recent past, and we expect them to be strong performers again. In the meantime, our other regions are faring better and we continued to focus on cost controls to help offset the impact of the revenue challenges. "We were pleased to see our operating cash flow increase 4.4% to $155.7 million in the quarter and we were able to show substantial improvement in operating cash flow margin-up 3.3 points from the pro forma 2006 quarter to 26.9% in the second quarter of 2007. We believe few newspaper operations can show growth in operating cash flow and related margins in this environment. "As we look to the third quarter, we expect continued declines in real estate advertising, particularly in the California and Florida newspapers. We expect no substantial improvement in advertising trends before the fourth quarter of 2007 and expect that revenues will likely still be negative in that quarter. Also, we expect to record losses from our equity investments that reflect the impact of lower newsprint prices and higher raw material prices on the results of both SP Newsprint Co (SP) and Ponderay Newsprint Company. We expect our total equity losses to equate to seven cents per share in the third quarter largely from these equity investments. As a result of the recently announced strategic alternative review at SP we are seeking to monetize this asset for our shareholders and end the equity losses from that investment, although the timing of any transaction is not yet clear. "With our portfolio of newspapers and digital assets in growth markets, new alliances with technology companies, and changes we are making in our cost structure, we approach the future with confidence. As we mentioned at the Mid-Year Media Conference last month, we are continuing our talks with Gannett and Tribune about changing our affiliate agreement with CareerBuilder to be more equitable for our newspapers and are hopeful that a resolution will be reached shortly. It is our clear preference to remain with CareerBuilder, and we will update investors once we have made a decision on our online employment solution. "In the meantime, we are working hard to offset the impact of revenue declines by exerting strong cost discipline. We are building a company for the long term, and we plan on generating value for our shareholders." Pat Talamantes, McClatchy's chief financial officer, said, "Debt at the end of the second quarter was $2.68 billion, down approximately $79 million since the end of the first quarter of 2007. Currently, we are in the midst of several de-leveraging transactions related to the sale of certain assets and real property. With these transactions and free cash generated by operations we expect to reduce debt by approximately $600 million to $700 million over the next 18 months." About The McClatchy The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 31 daily newspapers and approximately 50 non-dailies. McClatchy- owned newspapers include The Miami Herald, The Sacramento Bee, the (Fort Worth) Star-Telegram, The Kansas City Star, The Charlotte Observer, and The (Raleigh) News & Observer. * * * As reported in the Troubled Company Reporter on May 10, 2007, Standard & Poor's Ratings Services lowered its ratings on the senior unsecured debt assumed by The McClatchy Co. from Knight Ridder Inc. to 'BB-' from 'BB+'. The ratings were removed from CreditWatch, where they were placed with negative implications on May 3, 2007. At the same time, all other ratings on McClatchy, including the 'BB+' corporate credit rating, were affirmed. The rating outlook is stable. MCCLATCHY CO: Seattle Times to Pay $24 Mil. Settlement to Hearst ---------------------------------------------------------------- During the second quarter of 2007, The Seattle Times Company, in which The McClatchy Company owns a 49.5% equity interest, and The Hearst Corporation entered into an agreement to settle certain outstanding legal issues and amend their joint operating agreement. As a result, STC is expected to make a payment of about $24 million to Hearst in the third quarter of 2007. The company is in the process of reviewing the agreement and the appropriate accounting treatment. The company's share of such payment may be capitalized, or may be expensed as part of equity loss in the second quarter of 2007. If expensed in the second quarter of 2007, the impact on earnings will be a charge equal to six cents per share. The final accounting treatment for this item will be reflected in the company's second quarter 2007 results in its Form 10-Q filed with the Securities and Exchange Commission on or before Aug. 10, 2007. About Hearst Corporation The Hearst Corporation -- http://www.hearstcorp.com/-- is a diversified communications company with operations in the newspaper, magazine, broadcasting, entertainment and syndication, interactive media and business media industries. Hearst Newspapers publishes 12 daily newspapers nationwide. Hearst Magazines publishes magazines in the United States and more than 100 countries. Hearst Broadcasting includes television stations, radio stations, and an interest in a television/production company. Hearst Entertainment and Syndication includes cable network partnerships, television programming activities and newspaper syndication and merchandise licensing operations. Hearst Interactive Media manages consumer- and business-related Internet sites, and makes strategic investments in Internet- related companies. About The Seattle Times The Seattle Times Company -- http://www.seattletimescompany.com/ -- 110-year-old locally owned, private and independent news and information company. Founded in 1896 by Alden J. Blethen, The Seattle Times Company is a fourth- and fifth-generation family business. Its flagship newspaper, The Seattle Times, is the largest daily newspaper in Washington state and the largest Sunday newspaper in the Northwest. Under a joint operating agreement we also manage advertising, production, circulation and marketing for the Seattle Post- Intelligencer, a separately owned newspaper with a separate and competitive news department. About The McClatchy The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 31 daily newspapers and approximately 50 non-dailies. McClatchy- owned newspapers include The Miami Herald, The Sacramento Bee, the (Fort Worth) Star-Telegram, The Kansas City Star, The Charlotte Observer, and The (Raleigh) News & Observer. MCMORAN EXPLORATION: Expects to Close Newfield Buy in August 2007 ----------------------------------------------------------------- McMoRan Exploration Company's agreement in June 2007 to purchase the Gulf of Mexico Shelf oil and gas properties of Newfield Exploration Company and certain exploration rights for cash consideration of $1.1 billion is expected to close in August 2007, subject to customary closing conditions. The transaction was effective July 1, 2007. The acquisition will provide McMoRan a diversified portfolio of oil and gas properties with significant production and cash flow generating capacity and an expanded exploration acreage position to pursue opportunities on the Shelf of the Gulf of Mexico. McMoRan has received financing commitments from JPMorgan and Merrill Lynch & Co., which will be used to fund the transaction, repay McMoRan's existing $100 million term loan and provide working capital. The financing commitment includes a secured revolving bank credit facility and an interim bridge loan facility. McMoRan currently expects to close the transaction with a $700 million bank credit facility, a portion of which will be undrawn, and $800 million in bridge financing. McMoRan expects to issue long-term notes and equity and equity-linked securities to replace the bridge loan facility. The properties include 125 fields on 146 offshore blocks currently producing approximately 263 MMcfe/d and which averaged 267 MMcfe/d in the second quarter of 2007. Proved reserves as of July 1, 2007 for these properties, are estimated at 327 billion cubic feet of natural gas equivalents (Bcfe), approximately 70 percent of which are natural gas. Approximately ninety percent of the proved reserves for the acquired properties were based on estimates by Ryder Scott Company, L.P. Offshore leases included in the purchase agreement total approximately 1.3 million gross acres. McMoRan is also acquiring a 50% interest in Newfield's nonproducing exploration leases on the Shelf and certain of Newfield's interests in leases associated with its Treasure Island prospect inventory. Upon closing, McMoRan will be appointed operator of the Treasure Island leases subject to customary approvals. McMoRan is retaining personnel and contractors that have supported Newfield's management of the acquired properties. In addition, the explorationists from McMoRan and Newfield will jointly pursue exploration activities on nonproducing leases on the Shelf held by Newfield. About Newfield Exploration Newfield Exploration Company (NYSE: NFX) -- http://www.newfld.com/ -- engages in the exploration, development, and acquisition of crude oil and natural gas properties primarily in the United States. As of Dec. 31, 2006, the company had proved reserves of 2.3 trillion cubic feet equivalent. The company was founded in 1988 and is based in Houston, Texas. About McMoran Exploration McMoRan Exploration Company (NYSE: MMR) -- http://www.mcmoran.com-- is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of the Main Pass Energy HubTM which will be used for the receipt and processing of liquefied natural gas and the storage and distribution of natural gas. MCMORAN EXPLORATION: June 30 Balance Sheet Upside-Down by $49.9MM ----------------------------------------------------------------- McMoRan Exploration Co. had total assets of $446 million, total liabilities of $495.9 million, and total stockholders' deficit of $49.9 million at June 30, 2007. Net loss was $6.5 million for the second quarter of 2007, compared with net income of $14.1 million, for the second quarter of 2006. McMoRan's net loss from continuing operations for the second quarter of 2007 totaled $4.2 million, including $5.3 million of exploration expense and $2.8 million of start-up costs associated with Main Pass Energy Hub(TM). During the second quarter of 2006, McMoRan's income from continuing operations totaled $16.1 million, including $6.8 million of exploration expense and $2.9 million of MPEH(TM) start-up costs. McMoRan's second-quarter 2007 oil and gas revenues totaled $45 million, compared to $50.3 million during the second quarter of 2006. During the second quarter of 2007, McMoRan's sales volumes totaled 2.9 Bcf of gas and 349,100 barrels of oil and condensate, including 160,900 barrels from Main Pass Block 299, compared to 3.9 Bcf of gas and 360,700 barrels of oil and condensate, including 203,600 barrels from Main Pass Block 299, in the second quarter of 2006. McMoRan's second-quarter comparable average realizations for gas were $8.07 per thousand cubic feet (Mcf) in 2007 and $6.90 per Mcf in 2006; for oil and condensate, including Main Pass Block 299, McMoRan received an average of $62.87 per barrel in second-quarter 2007 compared to $64.96 per barrel in second-quarter 2006. Capital Expenditures Capital expenditures totaled $38.2 million for the second quarter of 2007 and $76.6 million for the six-months ended June 30, 2007. Capital expenditures are expected to approximate $225 million for the year, including approximately $160 million for exploration and development expenditures associated with McMoRan's deep gas activities and $65 million for development costs associated with the Newfield properties in the second half of 2007. Spending may be increased as additional opportunities become available or to fund additional development capital expenditures on successful wells. In addition, McMoRan plans to incur approximately $6 million to advance commercialization of the MPEH(TM) in the second half of 2007. Preferred Stock Conversion In June 2007, all of the holders of McMoRan's 5% Convertible Preferred Stock elected to convert into common stock, resulting in the issuance of approximately 6.2 million shares of McMoRan common stock. After giving effect to this transaction, common shares outstanding total approximately 34.7 million shares. The transaction will result in preferred dividend savings of $1.5 million per annum. Highlights -- Agreement to acquire Gulf of Mexico Shelf properties from Newfield Exploration Company for $1.1 billion. Transaction is expected to close in August 2007. -- Positive drilling results from the Flatrock exploratory well at South Marsh Island Block 212 indicate a potential major discovery. Drilling continues to evaluate deeper bjectives. -- Three additional exploration wells in-progress: -- Cottonwood Point discovery at Vermilion Block 31 -- Wireline logs have indicated 43 feet of net hydrocarbons -- Drilling continues to evaluate deeper objectives -- Cas, South Timbalier Block 70 -- Mound Point South, Louisiana State Lease 340 -- McMoRan has reported 17 discoveries on 31 prospects drilled and evaluated since 2004, including four discoveries in 2007. Four additional prospects are either in progress or not fully evaluated. -- Second-quarter 2007 production averaged 54 million cubic feet of natural gas equivalents (MMcfe/d) net to McMoRan, compared with second-quarter 2006 average production of 67 MMcfe/d. -- Pro forma third-quarter 2007 production is expected to average 300 MMcfe/d net to McMoRan, including production from properties acquired in the Newfield transaction. James R. Moffett and Richard C. Adkerson, McMoRan's Co-Chairmen, said: "The recently announced results from our Flatrock prospect, indicating a potential major discovery, demonstrate our opportunities to add significant reserves and production through our active Deep Gas exploration program. The acquisition of the Newfield's Gulf of Mexico shelf properties, with its significant reserves and production, will provide attractive exploration and development opportunities to augment McMoRan's focused Deep Gas exploration strategy and create a dynamic company with strong cash flows and high impact exploration projects." Main Pass Energy Hub(Tm) Update McMoRan is continuing discussions with potential LNG suppliers as well as gas marketers and consumers in the United States to develop commercial arrangements for the facilities. As previously reported, MARAD approved McMoRan's license application for its MPEH(TM) project in January 2007. About McMoran Exploration McMoRan Exploration Co. (NYSE: MMR) -- http://www.mcmoran.com-- is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of the Main Pass Energy HubTM which will be used for the receipt and processing of liquefied natural gas and the storage and distribution of natural gas. MERRILL LYNCH: S&P Preliminary Rates $23MM Class E Notes at BB -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Merrill Lynch CLO 2007-1 Ltd./Merrill Lynch CLO 2007-1 LLC's $372 million floating-rate notes due 2021. The preliminary ratings are based on information as of July 19, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit support 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; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. Preliminary Ratings Assigned Merrill Lynch CLO 2007-1 Ltd./Merrill Lynch CLO 2007-1 LLC Class Rating Amount ----- ------ ------ A-1 AAA $60,000,000 A-2* AAA $200,000,000 B AA $38,000,000 C A $30,000,000 D BBB $21,000,000 E BB $23,000,000 Income notes NR $41,300,000 * Approximately $20 million of the class A-2 delayed draw notes will be funded on the closing date. The remaining $180 million will be drawn until the end of the reinvestment period, as needed to meet collateral funding needs, provided that the total class A- 2 note issuance does not exceed $200 million. NR -- Not rated. MEYER-SUTTON: Court Converts Ch. 11 Case to Ch. 7 Liquidation ------------------------------------------------------------- The Honorable W. Homer Drake of the U.S. Bankruptcy Court for the Northern District of Georgia converted the Chapter 11 cases of Meyer-Sutton Homes Inc. to a Chapter 7 liquidation proceeding, Associated Press reports. According to AP, the decree resolved disagreements between the Debtor and bank lenders over property sale profits. The Debtor filed a motion last month, requesting to continue selling 350 homes and lots in the Atlanta area, while preparing a reorganization plan, AP relates. However, bank lenders barred its approval after a discord over proceeds distribution. Judge Drake appointed U.S. Trustee Gray W. Brown to oversee the liquidation of the Debtor's assets and distribute the proceeds to creditors, according to the report. Headquartered in Fayetteville, Georgia, Meyer-Sutton Homes Inc. and its affiliate, Meyer-Sutton Land Acquisition Inc. -- http://www.meyersutton.com/-- are engaged in the business of purchasing developed residential lots for speculative and pre-sold construction. The companies filed for chapter 11 protection on June 4, 2007 (Bankr. N.D. Ga. Case Nos. 07-11307 and 07-11306). Christopher S. Strickland, Esq. at Levine, Block & Strickland, L.L.P. represents the Debtors in their restructuring efforts. When they filed for bankruptcy, Meyer-Sutton Homes listed estimated assets and debts between $10 million to $50 million while Meyer-Sutton Land listed estimated assets and debts between $1 million to $10 million. MICHIGAN LECTROLS: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Michigan Lectrols Corp. 8246 Goldie Commerce Township, MI 48390 Bankruptcy Case No.: 07-53510 Type of business: The Debtor supplies the factory automation marketplace with electrical and electronic component and custom assembly solutions. See http://www.lectrols.com/ Chapter 11 Petition Date: July 12, 2007 Court: Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Kenneth M. Schneider, Esq. Kimberly Ross Clayson, Esq. Schneider Miller, P.C. 645 Griswold, Suite 3900 Detroit, MI 48226 Tel: (313) 237-0850 Total Assets: $245,422 Total Debts: $1,045,479 Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kenneth and Patricia business loan $360,000 Wissner 1524 Port Austin Road Port Austin, MI 48467 Charter One Bank all asset lien; $371,287 P.O. Box 9799 value of security: Providence, RI $438,684 02940-9799 Capital One S.B.A. business loan $90,112 P.O. Box 60024 City of Industry, CA 91716-0024 Scott and Rachel Deming default judgment $73,500 Wells Fargo MasterCard credit card $35,342 purchases Scott and Rachel Deming default judgment $73,500 J.P. Morgan Chase c/o credit card $23,646 R.M.S. purchases American Express credit card $23,384 purchases Bank of America credit card $20,343 Wilmington, DE purchases Citibank credit card $9,908 purchases Citicorp VISA credit card $8,822 purchases Bank of America credit card $8,500 Newark, De purchases Capital One credit card $6,800 Baltimore, MD purchases A.S.G. credit card $6,630 purchases First Equity credit card $6,412 purchases Home Depot credit card $791 Purchases MORGAN STANLEY: Fitch Affirms B- Rating on $2.5MM Class O Certs. ---------------------------------------------------------------- Fitch Ratings has affirmed these classes of Morgan Stanley Capital I Trust 2005-TOP17 commercial mortgage pass-through certificates: -- $18.8 million class A-2 at 'AAA'; -- $56.8 million class A-3 at 'AAA'; -- $85.6 million class A-4 at 'AAA'; -- $58.2 million class A-AB at 'AAA'; -- $576 million class A-5 at 'AAA'; -- Interest-only classes X-1 at 'AAA'; -- Interest-only classes X-2 at 'AAA'; -- $74.8 million class A-J at 'AAA' -- $20.8 million class B at 'AA'; -- $7.4 million class C at 'AA-'; -- $11 million class D at 'A'; -- $9.8 million class E at 'A-'; -- $6.1 million class F at 'BBB+'; -- $7.4 million class G at 'BBB'; -- $7.4 million class H at 'BBB-'; -- $2.5 million class J at 'BB+'; -- $3.7 million class K at 'BB'; -- $3.7 million class L at 'BB-'; -- $1.2 million class M at 'B+'; -- $1.2 million class N at 'B'; -- $2.5 million class O at 'B-'. Fitch does not rate the $7.4 million class P. Class A-1 has paid in full. The affirmations are the result of stable pool performance and limited scheduled amortization since Fitch's last rating action. As of the June 2007 distribution date, the pool's aggregate principal balance has decreased 1.9% to $962.1 million from $980.7 million at issuance. To date one loan (1.6%) has defeased. There are currently no delinquent or specially serviced loans. There are eight credit assessed loans (24.4%) in the pool. The largest of these loans, the Wells REF Portfolio (8.3%), is secured by nine office properties in various states containing a total of 2.9 million square feet. As of year-end 2006 all of the properties are 100% leased and performance has remained stable since issuance. The loan is one of three pari passu A notes which are securitized in MSCI 2004-HQ4 and MSDW 2005-HQ5 transactions. Fitch reviewed YE 2006 servicer provided operating statement analysis reports for the remaining seven credit assessed loans: Towers Crescent (3.8%), Travis Tower (3.8%), The Maritime Hotel (2.6%), 101 Ash Street (2.1%), Azalea Square (1.7%), International Plaza (1.2%), and Bon Aire Apartments (0.9%). Based on their stable performance since issuance the loans maintain their investment grade credit assessments. MOUNT AIRY: High Pro Forma Debt Leverage Cues S&P's B Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Mount Airy #1 LLC. The rating outlook is positive. At the same time, Standard & Poor's assigned its loan and recovery ratings to the company's proposed $480 million first-lien secured financing, comprising a $395 million term loan, a $60 million delayed-draw term loan, and a $25 million revolving credit facility. The issue rating on the secured credit facility is 'B+' with a recovery rating of '2', indicating that lenders can expect substantial (70% to 90%) recovery in the event of a payment default. Proceeds from the bank facility will be used to fund the completion of the construction of the Mount Airy Casino Resort in Mt. Pocono, Pennsylvania, as well as fund property acquisition costs, pre-opening expenses, and financing fees and expenses. "The 'B' corporate credit rating reflects Mount Airy's high pro forma debt leverage, somewhat challenged location relative to Pennsylvania competitors, narrow business focus operating in a single market, and prospects for increased competition in the Pennsylvania gaming market," said Standard & Poor's credit analyst Ariel Silverberg. "These factors are partially tempered by the expected quality of the facility, which is nearly complete, and the good preliminary operating metrics in Pennsylvania, particularly at nearby Pocono Downs." Mount Airy LLC is a private company; therefore, public financial information is not available. However, pro forma credit measures are good for the rating and are expected to improve as the facility ramps up. NEWCASTLE CDO: Fitch Holds BB Rating on $13.5MM Class V-FX Notes ---------------------------------------------------------------- Fitch Ratings has affirmed eight classes of notes issued by Newcastle CDO IV, Ltd. / Corp. These actions are the result of Fitch's review process and are effective immediately: -- $353,250,000 class I notes affirm at 'AAA'; -- $13,000,000 class II-FL notes affirm at 'AA'; -- $7,250,000 class II-FX notes affirm at 'AA'; -- $7,500,000 class III-FL notes affirm at 'A'; -- $15,000,000 class III-FX notes affirm at 'A'; -- $9,000,000 class IV-FL notes affirm at 'BBB'; -- $9,000,000 class IV-FX notes affirm at 'BBB'; and -- $13,500,000 class V-FX notes affirm at 'BB'. Newcastle IV is a managed collateralized debt obligation, which closed March 30, 2004. The portfolio is composed of 53.6% commercial mortgage-backed securities, 20.6% residential mortgage- backed securities, 21.1 % real estate investment trust securities, 1.8% commercial real estate loans, and 2.9% asset backed securities. Newcastle IV is revolving until March 2009. Newcastle Investment Corp. selected the initial collateral and serves as the collateral manager. Newcastle is currently rated 'CAM1' by Fitch. The affirmations are due to the stable performance of the transaction. The weighted average rating of the assets has remained stable at 'BBB/BBB-'. As of the June 2007 trustee report, the class I, II, III and IV overcollateralization ratios have remained stable at 127.26%, 120.4%, 113.52% and 108.59%, respectively against their triggers of 117.20%, 113.30%, 108.30% and 105.9%, respectively. There are currently no defaulted assets in the portfolio. Although all of the RMBS exposure is subprime, only 1.28% identified as 2005 vintage. This rating affirmation incorporates Fitch's revised methodology for 2005 and 2006 vintage subprime RMBS in which the default probability of these assets is increased by 25% in the Default VECTOR Model. The CMBS assets in the collateral pool range from the 2000 vintage to the 2006 with 80.7% of CMBS assets being of the 2004 and earlier vintage. Due to defeasance and amortization, Fitch believes these CMBS vintages are a positive factor in this transaction. Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. The rating of the class I notes addresses the likelihood that investors will receive timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class II, III, IV and V notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. NEWFIELD EXPLORATION: McMoRan Agreement to Close in August 2007 --------------------------------------------------------------- The agreement between Newfield Exploration Company and McMoRan Exploration Company in June 2007, pursuant to which, Newfield agreed to purchase the Gulf of Mexico Shelf oil and gas properties of Newfield and certain exploration rights for cash consideration of $1.1 billion is expected to close in August 2007, subject to customary closing conditions. The transaction was effective July 1, 2007. The acquisition will provide McMoRan a diversified portfolio of oil and gas properties with significant production and cash flow generating capacity and an expanded exploration acreage position to pursue opportunities on the Shelf of the Gulf of Mexico. McMoRan has received financing commitments from JPMorgan and Merrill Lynch & Co., which will be used to fund the transaction, repay McMoRan's existing $100 million term loan and provide working capital. The financing commitment includes a secured revolving bank credit facility and an interim bridge loan facility. McMoRan currently expects to close the transaction with a $700 million bank credit facility, a portion of which will be undrawn, and $800 million in bridge financing. McMoRan expects to issue long-term notes and equity and equity-linked securities to replace the bridge loan facility. The properties include 125 fields on 146 offshore blocks currently producing approximately 263 MMcfe/d and which averaged 267 MMcfe/d in the second quarter of 2007. Proved reserves as of July 1, 2007 for these properties, are estimated at 327 billion cubic feet of natural gas equivalents, approximately 70 percent of which are natural gas. Approximately ninety percent of the proved reserves for the acquired properties were based on estimates by Ryder Scott Company, L.P. Offshore leases included in the purchase agreement total approximately 1.3 million gross acres. McMoRan is also acquiring a 50% interest in Newfield's nonproducing exploration leases on the Shelf and certain of Newfield's interests in leases associated with its Treasure Island prospect inventory. Upon closing, McMoRan will be appointed operator of the Treasure Island leases subject to customary approvals. McMoRan is retaining personnel and contractors that have supported Newfield's management of the acquired properties. In addition, the explorationists from McMoRan and Newfield will jointly pursue exploration activities on nonproducing leases on the Shelf held by Newfield. About McMoran Exploration McMoRan Exploration Company (NYSE: MMR) - http://www.mcmoran.com-- is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of the Main Pass Energy HubTM which will be used for the receipt and processing of liquefied natural gas and the storage and distribution of natural gas. About Newfield Exploration Newfield Exploration Company (NYSE: NFX) -- http://www.newfld.com/ -- engages in the exploration, development, and acquisition of crude oil and natural gas properties primarily in the United States. As of Dec. 31, 2006, the company had proved reserves of 2.3 trillion cubic feet equivalent. The company was founded in 1988 and is based in Houston, Texas. * * * As of June 25, 2007, Newfield Exploration Company continues to carry Fitch's BB+ long term issuer default rating. Fitch rates the company's bank loan debt and senior unsecured debt at BB+ while its senior subordinate rating is at BB-. The outlook remains stable. At the same time, the company also bears Moody's Investor Services' Ba2 long term corporate family rating and probability of default rating, Ba1 senior unsecured debt, Ba3 senior subordinate rating, and B1 preferred stock rating. The outlook is stable. The company also continues to carry Standard & Poor's BB+ long term foreign and local issuer debt ratings. The outlook remains stable. NYLSTAR INC: Has Until August 17 to File Schedules and Statements ----------------------------------------------------------------- The United States Bankruptcy Court for the Western District of Virginia extended until Aug. 17, 2007, Nylstar Inc.'s deadline to file its schedules of assets and liabilities and statement of financial affairs. The Debtor tells the Court that it needs significant amount of time to prepare and compile the schedules and statements. During the first few days of bankruptcy, the Debtor was unable to prepare it schedules and statements by the required deadline. The Debtor assures the Court that it notified the U.S. Trustee's office, Internal Revenue Service and the secured lenders' counsel regarding its request for extension. Headquartered in Ridgeway, Virginia, Nylstar Inc. -- http://www.nylstar.com/-- manufactures nylon fibers. The company filed for Chapter 11 protection on July 5, 2007 (Bankr. W.D. Va. Case No.: 07-61227). Richard C. Maxwell, Esq., at Woods, Rogers & Hazlegrove, P.L.C., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed to date on this case. When the Debtor filed for bankruptcy, its listed assets and debts between $50 Million and $100 Million. OASYS MOBILE: Organizational Meeting Scheduled for August 1 ----------------------------------------------------------- The U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Oasys Mobile, Inc.'s chapter 11 case at 10:00 a.m., on Aug. 1, 2007, at the J. Caleb Boggs Federal Building, Room 5209, 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 Debtors' 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. About Oasys Mobile Oasys Mobile, Inc. -- http://www.oasysmobileinc.com/-- (OTC BB:OYSM) is a developer, publisher and aggregator of premium mobile games, mobile media applications and services. Oasys Mobile content is distributed through an extensive Carrier network that accounts for 97% of all wireless subscribers in the US. Additionally, Oasys Mobile maintains multiple direct and indirect relationships with international carriers. Through its white- label services, Oasys Mobile also helps Carriers and other content companies expand their customer base by incorporating rich mobile content into their product and brand offerings. The company filed for chapter 11 protection on July 18, 2007 (Bankr. D. Del. Case No. 07-10961). Kurt F. Gwynne, Esq., at Reed Smith LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $1 million and $100 million. ORBITAL SCIENCES: Earns $13.8 Million in Quarter Ended June 30 -------------------------------------------------------------- Orbital Sciences Corporation disclosed its preliminary financial results for the second quarter ended June 30, 2007, and first six months of 2007. Second quarter net income increased 40% to $13.8 million in 2007, compared to $9.9 million in 2006. Orbital's second quarter revenues increased 39% to $273.3 million in 2007, compared to $197.0 million in 2006. The company's second quarter operating income rose 29% to $21.5 million in 2007, as compared to $16.8 million in 2006. Orbital reported second quarter 2007 free cash flow of $17.3 million compared to free cash flow of $31.6 million in the second quarter of 2006. Commenting on Orbital's second quarter 2007 results, Mr. David W. Thompson, chairman and chief executive officer, said, "The company reported solid financial performance in the second quarter of 2007, with strong increases in revenue, operating income and earnings per share. Our satellite and space systems segment posted robust revenue and operating profit growth, while our launch vehicles segment generated very solid growth as well." He added, "These operating results, combined with strong new business bookings achieved in the second quarter, continue to signal an optimistic outlook for Orbital this year." For the first half of 2007, Orbital reported revenues of $501.5 million, up 29% as compared to $389.2 million in the first half of 2006. The company's operating income for the first half of 2007 was $39.1 million, up 19% as compared to $32.7 million in 2006. Net income for the first half of 2007 was $25.3 million, compared to $18.8 million in the first half of 2006. Orbital generated $21.2 million of free cash flow in the first half of 2007, compared to $54.2 million during the same period in 2006. Orbital's unrestricted cash balance increased to $219.4 million as of June 30, 2007. The company repurchased approximately 0.5 million shares of its common stock for $10.0 million in the second quarter of 2007. This stock repurchase is pursuant to a 12-month, $50 million securities repurchase program authorized by the company's Board of Directors in April 2007. New Business Highlights During the second quarter of 2007, Orbital received approximately $565 million in new firm and option contract bookings. In addition, the company received approximately $30 million of option exercises under existing contracts. Year-to-date, Orbital received approximately $1.09 billion in new firm and option contract bookings, and approximately $205 million of option exercises under existing contracts. As of June 30, 2007, the company's firm contract backlog was approximately $2.04 billion and its total backlog, including options, indefinite-quantity contracts and undefinitized orders, was approximately $4.02 billion. Operational Highlights Orbital carried out six satellite and launch systems missions during the second quarter of 2007, all of which were successful. These operational events included two space launch vehicle launches on consecutive days in April. On April 24, Orbital launched a Minotaur I space launch vehicle for the U.S. Air Force from Wallops Flight Facility in Virginia. The next day, Orbital launched a Pegasus rocket for NASA from Vandenberg Air Force Base in California. At June 30, 2007, the company's consolidated balance sheet showed $769.6 million in total assets, $347.5 million in total liabilities, and $422.1 million in total stockholders' equity. About Orbital Sciences Orbital Sciences Corp. (NYSE: ORB) -- http://www.orbital.com/-- develops and manufactures small rockets and space systems for commercial, military and civil government customers. * * * Orbital Sciences $143.8 million 2.4375% convertible subordinated notes due in 2027 carries Standard & Poor's Ratings Services B+ rating. That rating was assigned in December 2006. OSLO REINSURANCE: Chapter 15 Petition Summary --------------------------------------------- Petitioner: Jan C.H. Endresen Sidley Austin LLP 787 Seventh Avenue New York, NY 10019 212 839-5300 Debtor: Oslo Reinsurance Company ASA fdba Storebrand-Norden Reinsurance Company Limited AS fdba Uni Storebrand International Insurance AS fdba Storebrand Reinsurance Company Limited AS fdba Storebrand International Reinsurance Company Limited AS fdba Storebrand International Insurance AS Ruselokkveien 14 0251 Oslo, Norway Case No.: 07-12212 Type of Business: The Debtor is a European insurance company. Chapter 15 Petition Date: July 19, 2007 Court: Southern District of New York (Manhattan) Petitioner's Counsel: Geoffrey T. Raicht, Esq. Sidley Austin LLP 787 Seventh Avenue New York, NY 10019 Tel: (212) 839-5300 Fax: (212) 839-5599 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million PACIFICNET INC: Earns $308,000 in Quarter Ended March 31 -------------------------------------------------------- PacificNet Inc. reported net income of $308,000 on net revenues of $9.3 million for the first quarter ended March 31, 2007, compared with net income of $801,000 on net revenues of $6.7 million for the same period ended March 31, 2006. The increase in revenues was mainly due to the Telecom & Gaming, primarily driven by the company's high growth gaming technology businesses, and organic growth in Outsourcing Services Group, which posted a quarter-over-quarter increase of 42.3% and 31.1% respectively. The decrease in net income was solely due to diminishing income from discontinued operations as a result of the company shifting from Telecom Value-Added Services that are highly susceptible to adverse billing policy changes administered by China Mobile. In addition, minority interests for the three months ended March 31, 2007, totaled $534,000 compared with $86,000 for the same period of the prior year, representing minority ownership interests in subsidiaries consolidated in the company's consolidated financial statements. Gross profit for the three months ended March 31, 2007, was $2.5 million, a significant increase of 88% as compared to $1.4 million for the same period ended March 31, 2006. Selling, general and administrative expenses totaled $1.6 million for the three months ended March 31, 2007, an increase of 45% from $1.1 million for the three months ended March 31, 2006. Income from operations increased 1,100% to $800,000 for the three months ended March 31, 2007, compared to $62,000 for the same period last year. Income tax provision was $68,000 for the three months ended March 31, 2007, as compared to $17,000 for the three months ended March 31, 2006. At March 31, 2007, the company's balance sheet showed $45.4 million in total assets, $21.4 million in total liabilities, $7.1 million in minority interest, and $16.8 million in total stockholders' equity. As on March 31, 2007, the company's accumulated deficit was $47,431,000. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?20a5 Going Concern Doubt Kabani & Company Inc., in Los Angeles, expressed substantial doubt about PacificNet Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's net losses of $20,093,000, negative cash flow in operating activities amounting to $8,885,000 in the year ended Dec. 31, 2006, and the company's accumulated deficit was $47,739,000 as of December 31, 2006. In addition, the auditing firm reported that the company is in default on its convertible debenture obligation. About PacificNet Inc. PacificNet Inc. (NasdaqGM: PACT) provides gaming technology, e- commerce, and Customer Relationship Management (CRM) in China. The company's gaming products are specially designed for the Chinese and Asian gamers. PacificNet's gaming clients include the leading hotels, casinos, and gaming operators in Macau, Asia, and Europe, and the company's ecommerce and CRM clients include the leading telecom companies, banks, insurance, travel, marketing and business services companies and telecom consumers in Greater China such as China Telecom, China Mobile, Unicom, PCCW, Hutchison Telecom, Bell24, Motorola, Nokia, SONY, TCL, Huawei, American Express, Citibank, HSBC, Bank of China, Bank of East Asia, DBS, TNT, China and Hong Kong government. PacificNet employs about 1,200 staff in its various subsidiaries throughout China with offices in Hong Kong, Beijing, Shanghai, Shenzhen, Guangzhou, Macau and Zhuhai China, USA, and the Philippines. PALM INC: High Debt Leverage Cues S&P's B Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Services Ratings Services assigned its 'B' corporate credit rating to Sunnyvale, California-based Palm Inc. The outlook is stable. The action follows a planned recapitalization, including a term loan, a preferred equity investment by private equity firm Elevation Partners, and a cash dividend to common shareholders. At the same time, Standard & Poor's assigned a 'B+' bank loan rating and '2' recovery rating to Palm Inc.'s proposed $40 million revolving credit agreement maturing in 2012, and a 'B+' bank loan rating and '2' recovery rating to the proposed $400 million term loan maturing in 2013. The '2' recovery rating on the term loan and revolver indicates that lenders can expect substantial (70%- 90%) recovery of principal in the event of default. All ratings are based on preliminary offering statements and are subject to review upon receipt of final documentation. "The 'B' corporate credit rating reflects the company's high debt leverage and limited product range, substantial customer concentration, and significant price pressures, resulting in modest operating margins," said Standard & Poor's credit analyst Bruce Hyman. These factors are partly offset by Palm's good position in its key addressable markets, and good historical track record in product innovation, and its good liquidity. With revenues totaling $1.5 billion during fiscal 2007, Palm is a major provider of smartphones and PDA handhelds. Nearly 80% of Palm's total sales come from smartphones, while handhelds (20%) are a good cash flow generator in a declining market. PARALLEL PETROLEUM: Moody's Assigns Corporate Family Rating at B3 ----------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and Probability of Default rating to Parallel Petroleum Corporation. Concurrently, Moody's also assigned a Caa1, LGD5 (77%) rating to Parallel's proposed $150 million senior unsecured notes and assigned a speculative grade liquidity rating of SGL-3. The outlook is stable. Simultaneously with the closing of the notes offering, Parallel will amend and restate its $350 million senior secured credit facility to decrease its borrowing base from $190 million as of March 31, 2007 to $150 million. Proceeds from the notes will be used to retire its $50 million second lien term loan and to repay a portion of the outstanding borrowings under Parallel's senior secured revolver. The assigned ratings assume these transactions occur as expected and are subject to a review of the final documents and terms. The SGL-3 liquidity rating indicates adequate liquidity over the next four quarters due to expected available bank borrowing capacity under the senior secured credit facility and sufficient covenant headroom. Pete Speer, Moody's Vice-President/Senior Analyst commented, "The B3 corporate family rating is supported by Parallel's core property holdings in the Permian Basin, which provide a durable long-lived production base to fund the company's natural gas resource plays in the Barnett Shale in North Texas and the Wolfcamp in New Mexico. Parallel's participation with Chesapeake in the Barnett Shale and operations in Wolfcamp provide visible production growth at costs that appear competitive with B3 rated peers. However, the company's overall proved developed reserve base of just under 20 million boe is small and its portfolio diversification is low given its heavy reliance on only three Permian fields, which comprise 69% of total proved reserves and 45% of current production. " With total proved reserves of 37.9 mmboe at March 31, 2007 and estimated second quarter production of about 6,000 boe/day, Parallel is among the smallest E&P companies that Moody's rates. Parallel also has relatively high leverage of $10.74/boe on PD reserves. Leverage will continue to increase given Parallel's large development program that will result in negative free cash flow and additional revolver borrowings throughout the year in addition to the notes that will place long-term debt into the company's capital structure. In addition, Parallel is not the operator of most of its Barnett Shale properties and cannot control timing of future additional capital expenditures for the projects. Moody's believes that Parallel will need to maintain access to significant amounts of capital in order to keep up with aggressive drilling plans for these two resource plays. In the first quarter of 2007, Parallel's full cycle costs increased to $35, primarily reflecting higher interest costs per boe resulting from the increased borrowings to fund development capex. Parallel's leveraged full cycle ratio of 1.8x at March 31, 2007 decreased due to declining unit cash margins. Despite strong up-cycle commodity prices, unit cash margins continue to be pressured by the sector-wide problem of rising services costs. While Parallel has not been able to avoid these increasing cost trends, its cash costs of about $23/boe are lower than most B3 rated peers. In addition, the company's 2006 all sources and drillbit F&D costs were both competitive at around $13 and $12, respectively. The company's proposed $150 million senior notes will be unsecured, rank pari passu to all existing and future senior unsecured debt, and will be guaranteed on a senior unsecured basis by future domestic subsidiaries. The notes will be subordinated to the senior secured borrowings under the revolver. Under Moody's LGD methodology, the size of the senior secured revolver resulted in a notching down of the notes to Caa1, or one rating below the B3 CFR. However, Moody's notes that if the borrowing base is expanded and the implied borrowings under Moody's LGD methodology thereby increase above the amount of the senior notes outstanding then this could trigger a double-notching of the notes from the corporate family rating to Caa2. Based on the company's forecasts, it is possible that in 2008 Parallel will either have to refinance some revolver debt through the issuance of additional senior unsecured notes or pay off some of these borrowings using proceeds from an equity offering in order to avoid a double notching of the notes. The stable outlook is based on an expectation of generally supportive commodity prices for the remainder of 2007 and that Parallel will substantially achieve it's near term production growth targets and keep its unit operating generally in-line with its forecasts. Due to Parallel's increasing debt levels and small proved reserves and production scale, a ratings upgrade in the near to medium term is unlikely. However, if the company were to significantly increase its size and geographic diversification through a largely equity funded acquisition, a positive outlook or ratings upgrade could result depending on the commodity price environment and the company's operating results at that time. The ratings could be pressured if quarterly production trends were not to resume a sequential upward trend, reserve replacement and total costs materially increase and are not offset by sufficiently high prices to support margins, and/or if Parallel were unable to maintain adequate amounts of liquidity while funding its CapEx requirements. Parallel Petroleum Corporation is an independent exploration and production company based in Midland, Texas. PATIENT PORTAL: Posts Net Loss of $106,360 in Qtr Ended March 31 ---------------------------------------------------------------- Patient Portal Technologies Inc. reported a net loss of $106,360 on net sales of $251,978 for the first quarter ended March 31, 2007, compared with a net loss of $46,966 on zero revenues for the same period ended March 31, 2006. The company reported no revenue for the three months ended March 31, 2006, due to the divestiture of its former operating subsidiary in September 2005. In December 2006, the company acquired a new operating subsidiary, Patient Portal Connect Inc., and the revenues for this reporting period reflect the revenues of this operating subsidiary. Revenues for the three months ended March 31, 2007, were derived from hospital service contracts acquired by the company during this quarter. Cost of sales for the three months ended March 31, 2007, were $239,231. Selling and marketing expenses were $90,053 for the three months ended March 31, 2007, and research and development expenses were $29,054. At March 31, 2007, the company's balance sheet showed $1,439,990 in total assets, $424,724 in total liabilities, and $1,018,831 in total stockholders' equity. The company's balance sheet at March 31, 2007, also showed strained liquidity with $133,850 in total current assets available to pay $424,724 in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?20a3 Going Concern Doubt Walden Certified Public Accountant P.A., in Sunny Isles, Florida, expressed substantial doubt about Patient Portal Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. About Patient Portal Patient Portal Technologies Inc. (Other OTC: PPRG.PK) -- http://www.patientportal.com/-- through its newly acquired subsidiary, Patient Portal Connect Inc., provides integrated workflow solutions in the healthcare industry. Its proprietary systems were developed in close coordination with hospital industry partners to provide multi-layer functionality across a wide spectrum of critical patient-centric workflows that result in immediate improvements in cost savings, patient outcomes, and revenue growth for hospitals. PAUL SCHWENDENER: Wants Until August 20 to File Schedules --------------------------------------------------------- Paul H. Schwendener Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the Northern District of Illinois to extend on Aug. 20, 2007, to file its schedules of assets and liabilities and statement of financial affairs. The Debtors tell the Court that it needs time to gather information from various books and records, reports, agreements and tax returns in order to accurately and completely prepare their schedules and statements. The Court will convene hearing on July 25, 2007, at 10:00 a.m., to consider the Debtors' request. Headquartered in Westmont, Illinois, Paul H. Schwendener Inc. -- http://www.schwendener.com/-- provides construction services and consultancy. The company and four affiliates filed for Chapter 11 protection on July 8, 2007 (Bankr. N.D. Ill. Case No. 07-12145). Allen J. Guon, Esq., Mark L. Radtke, Esq., and Steven B. Towbin, Esq., at Shaw, Gussis, Fishman, Glantz, Wolfson & Tow, represent the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed to date on this case. When the Debtors filed for bankruptcy, its listed estimated assets and debts between $1 million to $100 million. PETRO STOPPING: Moody's Withdraws B2 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service withdrew its ratings of Petro Stopping Centers L.P. The withdrawals follow the recent sales of Petro and its parent, Petro Stopping Centers Holdings L.P. Petro has become a subsidiary of TravelCenters of America, which has advised that it will not provide stand-alone financial information of Petro from the May 31, 2007 acquisition date. The withdrawal of the B2 Corporate Family Rating and the B2 rating on the 9% Senior Secured Notes due 2012 was due to the inability to monitor Petro's future credit profile since the company will no longer provide stand-alone financial information. According to TravelCenters, Petro covenant defeased the notes by depositing with the notes trustee, U.S. Treasury obligations in an amount sufficient to meet all interest, principal and premiums due on the first call date of Feb. 15, 2008. The withdrawal of the Ba2 rating on the senior secured credit facility follows the repayment and termination of this facility upon the closing of the sale of the company. Withdrawals: Issuer: Petro Stopping Centers, L.P. -- Probability of Default Rating, Withdrawn, previously rated B2 -- Corporate Family Rating, Withdrawn, previously rated B2 -- Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba2, 09 - LGD1 -- Senior Secured Regular Bond/Debenture, Withdrawn, previously rated B2, 55 - LGD4 Outlook Actions: Issuer: Petro Stopping Centers, L.P. -- Outlook, changed to rating withdrawn from stable Petro Stopping Centers, headquartered in El Paso, Texas, has a network of 69 full-service travel centers along U.S. interstate highways. TravelCenters of America LLC, headquartered in Westlake, Ohio, has a network of 233 sites, including those of Petro, located in 41 states and Canada. POLYONE CORP: Inks Canadian Receivables Purchase Agreement ---------------------------------------------------------- PolyOne Corporation, on Friday, entered into a Canadian Receivables Purchase Agreement among the company, as servicer, PolyOne Funding Canada Corporation, as seller, Citicorp USA Inc., as administrative agent, National City Business Credit, Inc., as syndication agent, and the banks and other financial institutions party thereto, as initial purchasers. In connection with the Purchase Agreement, the company also entered into the Canadian Receivables Sale Agreement, dated as of July 13, 2007, by and among the company, as buyer's servicer, PolyOne Canada Inc. as the seller, and PolyOne Funding Canada Corp., as the buyer. Under the Purchase and Sale Agreements, from time to time, PolyOne Canada Inc. will sell its Canadian receivables to PolyOne Funding Canada Corp., which will then sell interests in the receivables to the banks and other financial institutions party to the Purchase Agreement on the terms and subject to the conditions of the Purchase Agreement. The Purchase Agreement provides up to $25 million in funding, based on availability of eligible trade accounts receivable and other customary factors. Headquartered in northeast Ohio, PolyOne Corporation (NYSE: POL) -- http://www.polyone.com/-- provides of specialized polymer materials, services and solutions. PolyOne has operations in North America, Europe, Asia and Australia, and joint ventures in North America and South America. * * * As reported in the Troubled Company Reporter on July 13, 2007, Fitch Ratings upgraded PolyOne Corporation's Issuer Default Rating to 'BB-' from 'B'; and Senior unsecured debt and debentures rating to 'BB-' from 'B+/RR3'. The Rating Outlook is Stable. POTLATCH CORP: Board Declares Distribution on Common Stock ---------------------------------------------------------- The board of directors of Potlatch Corporation has declared a quarterly distribution on the company's common stock. The distribution of $0.49 per share is payable Sept. 17, 2007, to stockholders of record on Aug. 31, 2007. Headquartered in Spokane, Washington, Potlatch Corporation (NYSE:PCH) - http://www.potlatchcorp.com/-- is a Real Estate Investment Trust with approximately 1.5 million acres of forestland in Arkansas, Idaho, Minnesota and Wisconsin. Through its taxable REIT subsidiary, the company also operates 13 manufacturing facilities that produce lumber and panel products and bleached pulp products, including paperboard and tissue. The company also conducts a real estate development business through its taxable REIT subsidiary. Potlatch is committed to providing superior returns to stockholders through long-term stewardship of its resources. * * * As reported in the Troubled Company Reporter on Jan. 17, 2007, Fitch has affirmed the Potlatch Corporation's senior unsecured public and bank credit facility and Issuer Default Ratings of 'BB+' and revised its Rating Outlook to Positive. PRODUCTION RESOURCE: Moody's Assigns Corporate Family Rating at B1 ------------------------------------------------------------------ Moody's Investors Service assigned to Production Resource Group, L.L.C. a B1 Corporate Family Rating, a B1 Probability of Default Rating and a B1 rating to the proposed $400 million senior secured credit facility. The rating outlook is stable. The Jordan Company's Resolute Fund II, L.P. signed an agreement to acquire PRG for a total enterprise value of $630 million, including related fees and expenses. The purchase price represents about 8.4 times pro forma EBITDA for the twelve months ended June 30, 2007. The transaction will be financed with a $325 million senior secured term loan and a $305 million common stock investment by Jordan and management. A $75 million senior secured revolver is expected to be undrawn at close. The B1 Corporate Family Rating is constrained by cash flow metrics that are modestly weak for the rating category, moderate geographic concentration and vulnerability of the company's revenues to an economic downturn. These concerns are partially mitigated by a recurring and highly visible rental revenue stream, a notable track record of profitable growth, an impressive market share in lighting services and the diversity of PRG's end markets. Weakness in free cash flow metrics is partially mitigated by the company's ability to scale back discretionary capital expenditures in the event of an economic slowdown. These ratings/assessments were assigned to PRG: -- $325 million senior secured term loan due 2014, B1 (LGD3, 48%) -- $75 million senior secured revolver due 2013, B1 (LGD3, 48%) -- Corporate Family Rating, B1 -- Probability of Default Rating, B1 The stable rating outlook anticipates modest growth in rental and distribution revenues and a continued high level of project-based labor and installation revenues over the next year. Revenues from concerts, theatrical productions and corporate trade shows are expected to continue to grow at a steady pace in the near term. Production Resource Group, L.L.C. is a leading provider of lighting equipment and services to a variety of end markets within the live event industry. About 47% of PRG's revenues are earned through equipment rental, with remaining revenues generated from equipment sales and services. For the twelve months ended June 30, 2007, revenues were about $347 million. ROADHOUSE GRILL: Jan. 28 Balance Sheet Upside-down by $17.5 Mil. ---------------------------------------------------------------- At Jan. 28, 2007, Roadhouse Grill Inc.'s consolidated balance sheet showed $22.1 million in total assets and $39.6 million in total liabilities, resulting in a $17.5 million total stockholders' deficit. The company's balance sheet at Jan. 28, 2007, also showed strained liquidity with $2.7 million in total current assets available to pay $32.5 million in total current liabilities. The company reported a net loss of $1.9 million on total revenues of $23.1 million for the thirteen weeks ended Jan. 28, 2007, compared with a net loss of $3.2 million on total revenues of $26.6 million for the same period ended Jan. 22, 2006. The decrease in revenues is primarily attributable to a decrease in customer headcount, partially offset by an increase in check average resulting primarily from menu price changes that were implemented in March 2005. The decrease in net loss may be primarily attributable to the decrease in depreciation and amortization expenses and the decrease in general and administrative costs. Depreciation and amortization expense decreased $200,000, or 11.5%, to $1.1 million during the fiscal 2007 third quarter from $1.3 million during the fiscal 2006 third quarter. General and administrative costs decreased $1.0 million, or 53.7%, to $800,000 from $1.8 million for the fiscal 2006 third quarter. The decrease is primarily due to a reduction in legal and professional fees, partially offset by increased bank fees and costs associated with the investment banking process. Full-text copies of the company's consolidated financial statements for the thirteen weeks ended Jan. 28, 2007, are available for free at http://researcharchives.com/t/s?20a0 Default In August 2005, the company entered into a loan agreement with its principal shareholder under which they initially borrowed $1.25 million. In October 2005, they entered into an amended and restated loan agreement with their principal shareholder under which they borrowed an additional $2.0 million. In each of March and May 2006, the loan agreement was further amended, thereby allowing them to borrow, in the aggregate, an additional $1.6 million. The loan was further increased in July 2006 to its current borrowing level. The loan is currently in default. The company owes their majority shareholder about $8.1 million, including accrued but unpaid interest. Going Concern Doubt As reported in the Troubled Company Reporter on May 25, 2007, Rachlin Cohen & Holtz L.L.P., in Fort Lauderdale, Florida, expressed substantial doubt about Roadhouse Grill Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended April 30, 2006. The auditing firm said "the company has suffered recurring net losses and has also experienced cash flow constraints which have resulted in the company being delinquent in certain payments to creditors, including taxing authorities." About Roadhouse Grill Based in Pompano Beach, Florida, Roadhouse Grill, Inc. -- (Other OTC: GRLL) -- http://www.roadhousegrill.com/-- currently owns and operates 57 full-service, casual-dining restaurants located in 10 states including Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, New York, North Carolina, Ohio and South Carolina. ROMA PLAZA: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Roma Plaza 1, L.P. 2180 Arpeggio Drive Henderson, NV 89052 Bankruptcy Case No.: 07-14366 Type of Business: The Debtor is a developer of mid-rise condominiums in Las Vegas, South Boulevard area. Chapter 11 Petition Date: July 19, 2007 Court: District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Michael Eliot Kulwin, Esq. 317 South 6th Street, 2nd Floor Las Vegas, NV 89101 Tel: (702) 387-5533 Debtor's financial condition as of June 16, 2007: Total Assets: $19,337,200 Total Debts: $9,990,468 The Debtor did not file a list of its 20 largest unsecured creditors. SENSIENT TECH: Improved Performance Cues S&P's Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Milwaukee, Wisconsin-based Sensient Technologies Corp. to stable from negative. At the same time, Standard & Poor's affirmed its 'BB+' corporate credit and senior unsecured debt ratings on the company. Approximately $508 million of debt was outstanding as of June 30, 2007. "The revised outlook is based on the company's improved operating performance, and its total debt to EBITDA improving to below 3x, from 3.7x in fiscal 2005," said Standard & Poor's credit analyst Patrick Jeffrey. This improvement was driven by the company's focus on improving operating efficiencies and utilizing free cash flow to reduce debt. "We expect the company will continue to reduce leverage over the near term and manage any acquisition activity in line with the current ratings," said Mr. Jeffrey. The ratings on Sensient reflect the company's position as a leading industrial marketer of value-added flavors, fragrances, and colors; its improved operating performance over the past 18 months following several years of inconsistent performance; and its still moderately high debt leverage. SUB SURFACE: Bruce Beattie Resigns as Chief Executive Officer ------------------------------------------------------------- Sub Surface Waste Management of Delaware Inc. disclosed in a Form 8-K filing with the U.S. Securities and Exchange Commission that on July 5, 2007, Mr. Bruce Beattie disclosed his resignation as the chief executive officer and as a director of Sub Surface Waste Management of Delaware Inc., effective immediately. Mr. Beattie did not serve on any committees of the Board of Directors. Mr. Beattie resigned for personal reasons. As a result of Mr. Beattie's resignation, the company's chief executive officer position is currently vacant. The company intends to appoint a new chief executive officer as soon as practicable. About Sub Surface Waste Sub Surface Waste Management of Delaware Inc. (OTC BB: SSWM.OB) was formed under the laws of the State of Utah in January, 1986 and re-domiciled to the state of Delaware in February 2001. The company designs, installs and operates proprietary soil and groundwater remediation systems. As of March 31, 2007, U.S. Microbics Inc., and subsidiaries control about 79% of the outstanding voting stock of the company. At March 31, 2007, the company's balance sheet showed total assets of $1,453,615, and total liabilities of $2,008,216, resulting in total stockholders' deficiency of $554,601. SUNSTATE EQUIPMENT: Moody's Lifts Corporate Family Rating to B1 --------------------------------------------------------------- Moody's Investors Service upgraded both the corporate family rating and probability of default rating of Sunstate Equipment Co., LLC to B1 from B2. The rating on Sunstate's $150 million second lien notes remains unchanged at B3, LGD 5 with the loss given default assessment changing to 80% from 76%. The rating outlook is stable. The ratings on the $150 million second lien notes remain unchanged despite the better probability of default rating because of the first lien revolver commitment increase, to $225 million from $175 million in February 2007, applied to Moody's LGD methodology that implies a two notch difference between the probability of default rating and the second lien notes rating, rather than the previous one notch difference. That is, in Moody's view, the probability of Sunstate's default has decreased but, given default, loss assessment on the second lien notes has slightly increased with the larger first lien commitment. Moody's does not rate Sunstate's first lien revolving credit facility which would rank ahead of the second lien notes in a recovery scenario. The upgrade to Sunstate's corporate family rating reflects the company's strong margin and return levels relative to other B2- rated equipment rental companies. Despite taking about $70 million in non-tax distributions since 2005, Sunstate's fleet has been expanded, aged younger and overall leverage has slightly declined. Going forward, Moody's expects that Sunstate will moderate its capital spending with more moderate nonresidential construction growth which should notably improve free cash flow leverage metrics. The foregoing statement assumes some non tax distributions and some reduction in outstanding debt. With a period of lower expected leverage upcoming, the company will be better positioned to absorb a downturn in demand or negative events. The rating outlook is stable reflecting Moody's view that Sunstate's debt protection measures should remain supportive of the B1 rating through the intermediate term. The key risk that Sunstate will continue to face is the cyclicality of the construction market. Additionally, prudence by the company with respect to size and timing of future non-tax related distributions will impact ratings stability. Sunstate should now be better able to withstand a cyclical downturn due to both the increased liquidity and the younger aged fleet. Sunstate, headquartered in Phoenix, Arizona, is a regional equipment supplier with 46 branches predominately in the Southwest regions. Original rental fleet equipment cost was $350 million at March 31, 2007. TARGA RESOURCES: Commences Tender Offer for 8-1/2% Senior Notes --------------------------------------------------------------- Targa Resources Inc. and Targa Resources Finance Corporation have commenced a cash tender offer to purchase any and all of their outstanding 8-1/2% Senior Notes due 2013, (CUSIP Nos. 87611UAB7 and U87566AB8), of which $250 million in aggregate principal amount was outstanding as of July 19, 2007, and a solicitation of consents from the registered holders of the notes to certain proposed amendments to the indenture governing the notes and to the waiver of the Issuers' and their subsidiary guarantors' obligations under a related registration rights agreement. The tender offer is scheduled to expire at 12:00 midnight, New York City time, on Aug. 15, 2007, unless extended or earlier terminated. Holders of notes must tender and not withdraw their Notes and deliver and not rescind their corresponding Consents on or before the consent date, which is 5:00 p.m., New York City time, on Aug. 1, 2007, unless extended or earlier terminated, to receive the total consideration, which includes a consent payment of $30 per $1,000 principal amount of notes. Holders of notes who tender their notes after the consent date and on or before the expiration date will receive the purchase price, which is the total consideration minus the consent payment. The total consideration for each $1,000 principal amount of the notes tendered and accepted for payment will be determined in the manner described in the Statement by reference to the fixed spread of 50 basis points over the yield based on the bid side price of the reference treasury security, 4.625% U.S. Treasury Notes due Nov. 15, 2009, as calculated by the dealer manager at 2:00 p.m., New York City time, on Aug. 1, 2007. In addition to the total consideration or the purchase price, as applicable, holders of Notes tendered and accepted for payment will receive accrued and unpaid interest on the Notes from the last interest payment date for the Notes to the applicable settlement date. Notes tendered may be withdrawn and consents delivered may be revoked at any time on or prior to the withdrawal date, which is 5:00 p.m., New York City time, on Aug. 1, 2007. Notes tendered on or prior to the withdrawal date that are not validly withdrawn on or prior to the withdrawal date may not be withdrawn thereafter. Tenders of Notes after the withdrawal date may not be withdrawn. The Issuers currently expect to have an initial settlement for Notes tendered on or before the consent date promptly after the consent date and the satisfaction of the Financing Condition, followed by a final settlement promptly after the expiration of the tender offer for Notes tendered after the consent date. The Issuers reserve the right to extend or forego the initial settlement date, as a result of which the initial settlement date may occur as late as the final settlement date. The tender offer and consent solicitation are conditioned on the satisfaction of certain conditions, including: a) the tender on or prior to the consent date of notes representing a majority of the principal amount of the notes outstanding; b) the execution by the trustee of the supplemental indenture implementing the proposed amendments following receipt of the requisite consents; and c) the consummation of a new bank credit facility on terms satisfactory to the issuers. The issuers expect to fund the purchase of the notes with the net proceeds from the new bank financing and cash on hand. If the financing condition or any other condition in the statement is not satisfied, the Issuers are not obligated to accept for purchase, or to pay for, notes tendered and may delay the acceptance for payment of any tendered notes, in each event subject to applicable laws, and may terminate, extend or amend the tender offer and may postpone the acceptance for purchase of, and payment for, notes so tendered. The issuers have retained Credit Suisse Securities (USA) LLC to serve as dealer manager for the tender offer and solicitation agent for the consent solicitation and have retained D.F. King & Co. Inc. to serve as the depositary and information agent for the tender offer and consent solicitation. Requests for documents may be directed to: D.F. King & Co. Inc. 48 Wall Street New York, NY 10005 Tel (800) 735-3107 (212) 269-5550 Questions regarding the tender offer or consent solicitation may be directed to Credit Suisse Securities (USA) LLC at (212) 325- 4951 or (212) 325-7596. About Targa Resources Partners Headquartered in Houston, Texas, Targa Resources, Inc. (Nasdaq: NGLS) -- http://www.targaresources.com/-- is an independent midstream energy company formed in 2003 by management and Warburg Pincus, the global private equity firm and a leading energy investor, to pursue gas gathering, processing and pipeline asset acquisition opportunities. TARGA RESOURCES: Moody's Holds B1 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service affirmed Targa Resources, Inc.'s B1 Corporate Family Rating and assigned Ba3 ratings (LGD 3, 40%) to its proposed first lien credit facilities comprised of a $1.525 billion term loan, a $300 million revolving credit facility, and a $300 million synthetic letter of credit facility. Moody's also assigned a B3 rating (LGD 5, 88%) to Targa's proposed $350 million second lien term loan. Proceeds from the proposed credit facilities will be used to refinance Targa's existing indebtedness, including funding a tender offer for its 8.5% senior unsecured notes due 2013, and to fund a $414 million distribution to shareholders. The rating outlook remains negative. Targa's B1 CFR reflects its sizable operating footprint and market position. Targa's substantial gathering and processing assets include over 11,000 miles of natural gas and NGL pipelines and ownership interests in 22 processing plants, 16 of which are operated by Targa. These assets are positioned in the Permian Basin, along the Gulf Coast including onshore Louisiana and a number of coastal straddle plants, and in North Texas through its ownership interest in Targa Resources Partners LP. Targa also has an NGL logistics and marketing division, which makes up 15%-20% of its annual operating margin. This division includes fractionation, terminaling, wholesale marketing and transportation, and NGL distribution and marketing activities. Relative to its peers, including Copano Energy, Atlas Pipeline Partners, MarkWest Energy Partners, and Regency Energy Partners, all of which currently have a B1 CFR, Targa is notably larger and more diversified across the midstream value chain. However, Targa is more leveraged at about 6x debt/EBITDA as compared to its peers which tend to maintain leverage in the 3x-5x range, depending on acquisitions and spending on organic growth projects. Despite the debt-funded distribution, Moody's is affirming Targa's CFR because its leverage remains at a level consistent with where it was when Moody's downgraded Targa's ratings in September 2006 following its decision not to sell its North Texas assets. This is because net proceeds from the IPO of Targa's MLP, which was formed with the North Texas assets, were used to repay debt in February of this year. Net proceeds from the IPO and cash borrowed under a revolving credit facility at the MLP were upstreamed to Targa which, along with cash on hand, were used to repay a $700 million term loan. On a consolidated basis, debt was reduced by a net $405 million as a result of the drop-down, which is roughly the amount of the proposed distribution. As a result, pro forma consolidated leverage is approximately the same as it was at year-end 2006. The ratings assume that Targa's leverage will continue to hover around 6x on a consolidated basis, depending on transactions including future distributions. Targa has stated its intentions to offer the MLP the opportunity to purchase substantially all of its remaining businesses and has positioned these potential drop-downs as central to its strategy to delever. Assuming that the drop-downs are financed with 50/50 debt/equity at the MLP and also assuming that 100% of the net proceeds to the parent are used repay debt, these drop-downs are deleveraging in terms of consolidated debt/EBITDA and EBITDA/interest. However, Moody's observes that these drop-downs are not as deleveraging in terms of "fixed" charges because they essentially substitute one yield-paying instrument for another. Also, the drop-downs weaken the credit in that they result in additional structural subordination. In addition, the MLP does not guarantee the credit facilities and the assets in the MLP do not serve as security for the credit facilities. Regarding the deleveraging strategy, Moody's notes that a 100% sweep of net proceeds against debt may not necessarily occur. Under the terms of the draft credit agreement, when pro forma secured leverage is less than 6x, only 50% of net proceeds are required to sweep against the term loan. Furthermore, there is a reinvestment provision such that asset sale proceeds may be reinvested in the business instead of being used to reduce debt. Moody's also changed Targa's Speculative Grade Liquidity (SGL) rating back to SGL-2 from SGL-3. In January 2007, Moody's lowered Targa's liquidity rating to SGL-3 to reflect the risks associated with repaying or refinancing its $700 million term loan that was due in October 2007. This term loan was repaid with proceeds associated with the drop-down of Targa's North Texas assets into the MLP, which completed its IPO in February. Following the proposed transactions, Targa is expected to have cash balances in excess of $100 million and a $300 million undrawn revolving credit facility. Targa Resources, Inc. is headquartered in Houston, Texas. TARGA RESOURCES: S&P Lowers Corporate Credit Rating to B -------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on midstream energy company Targa Resources Inc. to 'B' from 'B+' and removed it from CreditWatch negative, where it was placed on Oct. 31, 2006. At the same time, S&P assigned its 'B+' rating, one notch above the corporate credit rating, and '2' recovery rating to Targa's proposed $2.125 billion senior secured first-lien credit facilities, and a 'CCC+' rating and '6' recovery rating to the company's proposed $350 million senior secured second-lien term loan, based on preliminary terms and conditions. The outlook is stable. Proceeds from the proposed credit facilities will be used to refinance Targa's existing credit facility, repay its $250 million senior unsecured notes due 2013, and make a sizable distribution to equity owners, including Warburg Pincus, Merrill Lynch, and management. The rating actions reflect pro forma credit metrics, which are more consistent with the 'B' corporate credit rating category given Targa's business risks in the midstream energy space. The pre-existing CreditWatch listing was specifically tied to already elevated leverage. The stable outlook reflects the leveraging impact of the pending transaction, somewhat mitigated by the deleveraging effect of the MLP IPO in February," said Standard & Poor's credit analyst Plana Lee. Stronger credit metrics, continued management of commodity price risk through hedging, and better-than-expected volumes could improve ratings. Conversely, weaker credit metrics or continued susceptibility to customer concentration could lead to downward ratings movement. TEXAS INDUSTRIES: S&P Rates Proposed $200MM Credit Facility at BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB-' rating to the proposed $200 million unsecured revolving credit facility due 2012 of Texas Industries Inc. (BB/Positive/--). TXI will use the proceeds from the proposed revolving credit facility mainly to refinance existing revolving facility borrowings and for general corporate purposes, including working capital and capital expenditures. S&P will withdraw the rating on the company's existing revolving facility once the new facility is funded. The company's proposed facility will not be assigned a recovery rating given its unsecured status. At the same time, S&P affirmed its existing ratings on TXI, including its 'BB-' corporate credit rating. The outlook remains positive. Total debt outstanding at May 31, 2007, was about $275 million. "An upgrade is possible if TXI completes its capital expansion plans on schedule and at the anticipated cost level; generates the expected improvements in revenues, operating margins, and free cash flow; and reduces debt to EBITDA below 2x," said Standard & Poor's credit analyst Michael Scerbo. "We could revise the outlook back to stable if end-markets soften more than expected or if operating costs escalate unexpectedly, causing earnings and cash flow to decline significantly from current expectations." Dallas, Texas-based Texas Industries is a regional producer of cement, aggregates, and concrete with major markets in Texas and California. TRANSDERM LABS: March 31 Balance Sheet Upside-Down by $36.4 Mil. ---------------------------------------------------------------- Transderm Laboratories Corp.'s consolidated balance sheet at March 31, 2007, showed $5.2 million in total assets and $41.6 million in total liabilities, resulting in a $36.4 million total stockholders' deficit. The company's consolidated balance sheet at March 31, 2007, also showed strained liquidity with $3.6 million in total current assets available to pay $29.8 million in total current liabilities. The company reported a net loss of $621,000 on net sales of $1.1 million for the first quarter ended March 31, 2007, compared with a net loss of $434,000 on net sales of $1.6 million for the same period ended March 31, 2006. The increase in net loss was attributable primarily to a decline in sales, partly offset by the increase in product development income. The decrease in net sales, which consisted exclusively of sales of transdermal nitroglycerin patches, was primarily due to a 57% decline in sales to one of the company's largest customers. Product development income for the three months ended March 31, 2007, which consisted of revenues generated from research and development projects the company is undertaking for two customers, increased to $268,000, from product development income of $5,000 for the same period in 2006. At March 31, 2007, the company had aggregate debts and liabilities of $41.6 million. These debts and liabilities include $7.6 million of royalties due under the Key License and $30.9 million to Health-Chem. The company has sustained operating losses in each of the last three years. In addition, at March 31, 2007, Health-Chem owes $11.6 million under outstanding debentures which became due in 1999 and under which it currently is in default, which exerts pressure on the financial condition of the Group as a whole. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?21b0 Going Concern Doubt As reported in the Troubled Company Reporter on April 24, 2007, Demetrius & Company LLC, in Wayne, N.J., expressed substantial doubt about Transderm Laboratories Corporation's ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's having defaulted on payments to its bondholders and licensors, and working capital deficiencies. About Transderm Laboratories Transderm Laboratories Corporation (Other OTC: TLCC.PK) manufactures controlled release products to deliver drugs topically or transdermally. The company conducts the majority of its business through its 98.5%-owned subsidiary, Hercon Laboratories Corporation. Health-Chem owns 90% of the company's outstanding common stock. UNITEDHEALTH GROUP: Earns $1.2 Billion in Second Quarter 2007 ------------------------------------------------------------- UnitedHealth Group Inc. reported second quarter ended June 30, 2007, consolidated net earnings of $1.2 billion grew $216 million or 22 percent year-over-year. Consolidated earnings from operations in the second quarter were $2 billion, up $358 million or 21% year-over-year. Consolidated second quarter revenues approached $19 billion, increasing $1.1 billion or 6 percent year- over-year. Second quarter consolidated revenues include $25 million in net capital gains, compared to $6 million in net capital losses in the second quarter of 2006 and $1 million in net capital losses in the first quarter of 2007. The consolidated operating margin of 10.7 percent expanded due to margin gains in the Health Care Services business segment. Consolidated operating margin increased 140 basis points year- over-year and 150 basis points sequentially, excluding 409A charges. The consolidated medical care ratio of 80.5 percent improved 110 basis points year-over-year and 220 basis points sequentially. Both the year-over-year and sequential improvements in this ratio reflect continued strong performance across Ovations seniors businesses, partially offset by increases in the UnitedHealthcare medical care ratio. During the second quarter of 2007, the company realized favorable development of $100 million in its estimates of medical costs incurred in 2006. The Company realized an additional $10 million of favorable development in its estimates of medical costs incurred in the first quarter of 2007. These compare to $150 million of favorable development in the second quarter of 2006, all of which related to the previous year. Second quarter operating costs were 13.8 percent of revenue, a decrease of 10 basis points from 13.9 percent in the second quarter of 2006 and an increase of 70 basis points from the first quarter of 2007, excluding 409A charges. The largest single factor impacting the sequential percentage increase was the effect of the timing of Medicare prescription drug plan revenue recognition under GAAP on this calculation. The second quarter income tax rate of 36.7 percent was consistent with 36.8 percent in both the second quarter of 2006 and the first quarter of 2007. Medical costs payable, excluding the AARP division of Ovations, increased by $216 million year-over-year to $7.3 billion at June 30, 2007. Medical costs days payable was 52 days for the quarter, consistent with recent results. Second quarter return on equity was 23 percent. At June 30, 2007, the company had total assets of $53 billion, total liabilities of $32 billion, resulting in total stockholders' equity of $21 billion. Stephen J. Hemsley, president and chief executive officer of UnitedHealth Group, said, "Our uniquely diversified business model enables us to deliver strong and sustainable performance, as reflected in the positive results in earnings and cash flows from operations this quarter. Importantly, we continue to advance distinctive capabilities in such areas as care facilitation, financial services, network development and relationships, and in our ability to help people become more effective health care consumers and achieve better health outcomes. We expect to continue to leverage these capabilities into sustained growth and performance in 2008 and beyond." About UnitedHealth Group Headquartered in Minneapolis, Minn., UnitedHealth Group Inc. (NYSE: UNH) -- http://www.unitedhealthgroup.com/-- is a diversified health and well-being company which offers offers a broad spectrum of products and services through six operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix. Through its family of businesses, UnitedHealth Group serves approximately 70 million individuals nationwide. * * * The company's 2-1/4% senior convertible debentures due 2023 carry Standard & Poor's BB+ rating. VERTRUE INC: Inks Amended Merger Agreement with Velo ---------------------------------------------------- Vertrue Incorporated has entered into an amendment to its merger agreement with Velo Holdings Inc. and Velo Acquisition Inc. The terms of the amendment increase the merger consideration payable to Vertrue's stockholders to $50 per share in cash, without interest, from $48.50 per share in cash, without interest. The increased merger consideration represents a 24.6% premium over the undisturbed stock price of $40.12 per share on Jan. 23, 2007. A special committee of independent directors and the full board of directors of Vertrue have approved the amendment, and the full board of directors of Vertrue has recommended that Vertrue's stockholders adopt the merger agreement, as amended by the amendment, at the reconvened special meeting of stockholders on July 31, 2007, which was originally scheduled for July 12, 2007. FTN Midwest Securities Corp., financial advisor to the special committee, provided a fairness opinion to the special committee regarding the increased merger consideration. Jefferies Broadview, a division of Jefferies & Co., financial advisor to the board of directors of Vertrue, provided a fairness opinion to the board of directors of Vertrue regarding the increased merger consideration. In addition, Velo Holdings has entered into an agreement with Brencourt Advisors LLC, a beneficial owner of approximately 28.1% of Vertrue's common stock, pursuant to which Brencourt has agreed to vote all of its shares of Vertrue's common stock in favor of the adoption of the amended merger agreement and Velo Holdings has granted to Brencourt the right to acquire up to an amount of $25 million in equity securities of Velo Holdings. Oak Investment Partners, which was originally part of the investor group formed to acquire Vertrue, has determined not to participate in the merger transaction at the increased $50 per share merger consideration. The equity for replacing the entire amount of Oak's equity commitment and the aggregate amount of the increased merger consideration will be provided by One Equity Partners, Rho Ventures and, if Brencourt exercises its right to invest. Vertrue has also entered into an amendment to its Stockholder Protection Rights Agreement to exempt the transactions contemplated by the agreement between Velo Holdings and Brencourt. Stockholders who have questions about the merger, need assistance in submitting their proxies or voting their shares should contact Vertrue's proxy solicitor: Georgeson Inc. 17 State Street, 10th Floor New York, NY 10004 Telephone (212) 440-9800 (for banks and brokers) (866) 577-4994 (for all others) About Vertrue Incorporated Headquartered in Norwalk, Connecticut, Vertrue Incorporated (Nasdaq: VTRU) -- http://www.vertrue.com/-- is an Internet marketing services company. Vertrue operates a diverse group of marketing businesses that share a unified mission: to provide every consumer with access to direct-to-consumer savings across its five vertical markets of healthcare, personal property, security/insurance, discounts and personals, which are all offered online through a set of diverse Internet marketing channels. * * * As reported in the Troubled Company Reporter on July 2, 2007, Standard & Poor's Ratings Services assigned bank loan and recovery ratings to the proposed $660 million senior secured credit facilities of membership marketing company Vertrue Inc. (B+/Watch Negative/--). WACHOVIA BANK: Moody's Assigns Low-B Ratings to Six Cert. Classes ----------------------------------------------------------------- Moody's Investors Service assigned definitive ratings to securities issued by Wachovia Bank Commercial Mortgage Trust 2007- C32. The provisional ratings issued on June 18, 2007 have been replaced with these definitive ratings: -- Class A-1, $25,707,000, rated Aaa -- Class A-1A, $443,196,000, rated Aaa -- Class A-2, $946,379,000, rated Aaa -- Class A-PB, $62,827,000, rated Aaa -- Class A-3, $948,589,000, rated Aaa -- Class IO, $3,823,853,068*, rated Aaa -- Class A-J, $253,330,000, rated Aaa -- Class B, $43,019,000, rated Aa1 -- Class C, $47,798,000, rated Aa2 -- Class D, $28,679,000, rated Aa3 -- Class E, $28,679,000, rated A1 -- Class F, $38,238,000, rated A2 -- Class A-4FL, $250,000,000, rated Aaa -- Class A-MFL, $382,385,000, rated Aaa -- Class G, $43,018,000, rated A3 -- Class H, $47,799,000, rated Baa1 -- Class J, $52,578,000, rated Baa2 -- Class K, $33,458,000, rated Baa3 -- Class L, $19,120,000, rated Ba1 -- Class M, $9,559,000, rated Ba2 -- Class N, $14,340,000, rated Ba3 -- Class O, $9,559,000, rated B1 -- Class P, $9,560,000, rated B2 -- Class Q, $9,560,000, rated B3 * Approximate notional amount Moody's assigned definitive ratings to these additional class of certificates: -- Class A-4M, $227,273,000*, rated Aaa - P-1 -- Class A-4MS, $22,727,000*, rated Aaa -- Class A-MM, $347,623,000*, rated Aaa - P-1 -- Class A-MMS, $34,762,000*, rated Aaa * Approximate notional amount Moody's withdrew the provisional ratings of these class of certificates: -- Class A-4, $250,000,000, WR -- Class A-M, $382,385,000, WR WARNER MUSIC: S&P Says BB- Rating Still Under Negative Watch ------------------------------------------------------------ Standard & Poor's Ratings Services said that its ratings for Warner Music Group, including the 'BB-' corporate credit rating, remain on CreditWatch with negative implications. The ratings have been on CreditWatch because of S&Ps' concern about the company's interest in EMI Group PLC. S&P still see uncertainty surrounding management's alternate strategies following WMG's statement that it will not submit a competing bid for EMI. In addition, year-over-year revenue and EBITDA decreased by roughly 2% and 8%, respectively, in the company's second fiscal quarter ended March 31, 2007. Declines in recorded music revenue and EBITDA, which reflect tough release comparisons from the previous year and continued physical sale declines, were partially offset by gains in publishing. Debt to EBITDA was roughly 5.1x, which is somewhat weak for the rating. S&P expect the company's third fiscal quarter (ended June 30, 2007) to be relatively flat, with easier release comparisons coming in the fiscal fourth quarter. WERNER LADDER: Committee Wants Ch. 11 Cases Converted to Ch. 7 -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Werner Holding Co. (DE) Inc. aka Werner Ladder Company and its debtor-affiliates asks the U.S. Bankruptcy Court for the District of Delaware to convert the Debtors' Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code. The Creditors Committee believes that there are insufficient assets in the Debtors' estate to confirm a Chapter 11 plan within a reasonable time, in that: (i) the $750,000 wind-down budget, which New Werner Holding Co. (DE), LLC, agreed to pay as an assumed liability under the Asset Purchase Agreement to fund certain invoiced expenses, is insufficient to pay the wind-down expenses of the Debtors' estates; and (ii) there is no funding to pay other administrative expense and priority claims during plan confirmation. The Creditors Committee further believes that converting the Debtors' cases to Chapter 7, rather than dismissing the cases, is in the best interests of the general unsecured creditors because a Chapter 7 trustee may promptly begin liquidating the remaining assets pursuant to the Court-approved stipulation among the Committee; Levine Leichtman Capital Partners III, L.P., together with Milk Street Investors LLC; and other major parties-in- interest. Under the Stipulation, the Committee agreed to conditionally withdraw its objection to the Debtors' request to sell substantially all of their assets in exchange for certain funding obligations and agreements of the other parties, as well as New Werner, that would pay the expenses to wind down the estates and pursue causes of action. The Sale proceeds would be shared with the general unsecured creditors. The Stipulation provides, among other things, that Levine Leichtman will: (1) advance (a) roughly $1,900,000 to fund the expenses associated with pursuing the estates' causes of action that were not sold to New Werner, and (b) up to an additional $250,000 for the costs of administering the Debtors' assets other than the causes of action; in exchange, Levine Leichtman has the right to act as, or appoint, a designee of the Debtors' estates to pursue and liquidated the causes of action; (2) hold an allowed superpriority claim under Section 507 of the Bankruptcy Code in an approximate amount of $97,000,000; and (3) share a percentage of the recoveries on account of its Section 507(b) Claim with the unsecured creditors. The Wind-Down Budget was also negotiated by the Debtors and the Committee pursuant to the Stipulation. Victoria W. Counihan, Esq., at Greenberg Traurig, LLP, in Wilmington, Delaware, told the Court that those rights and protections were critical to the Committee's agreement to withdraw its Sale objection and to allow New Werner to acquire the Debtors' businesses, as a going concern, outside of a Chapter 11 plan. As of the closing of the Debtors' asset sale on June 8, 2007, Ms. Counihan related, the Debtors have not conducted any business operations. She said the Debtors' directors have resigned, and on June 15, Charles A. Stanziale, Jr., was appointed as interim director of the Debtors. Moreover, in accordance with the Stipulation, Levine Leichtman and Committee selected Mr. Stanziale to serve as the liquidation trustee under the Committee's proposed liquidating plan. The Committee stated that the liquidation trustee would perform many of the same duties required of a Chapter 7 trustee if the Debtors' Chapter 11 cases are converted. Difficulties With Plan Effort In accordance with the Stipulation, the Committee filed a Liquidating Plan and an accompanying disclosure statement as reported in the Troubled Company Reporter on June 29, 2007. In light of the filing of its Conversion Motion, the Committee is continuing the Disclosure Statement hearing, currently scheduled for July 24 at 10:00 a.m., to August 23 at 2:00 p.m. The Plan provides that, once effective, the causes of action and other assets excluded from the Sale will be transferred to a liquidation trust. The primary beneficiaries under the proposed liquidation trust are Levine Leichtman and the general unsecured creditors. The Plan further provides that, with certain exceptions, all administrative expense and priority claims will be paid in full at confirmation. Ms. Counihan stated that the Plan was based on the assumptions that: * the only administrative expenses would be the wind-down expenses of the Debtors' estates that were provided for in the Wind-Down Budget; and * there were no administrative and priority claims remaining from the pre-Sale period. However, those assumptions turned out to be untrue, Ms. Counihan revealed. Based on the Committee's recent budget analysis, Ms. Counihan explained, there is a shortfall in the Wind-Down Budget of approximately $450,000 and other unfunded administrative expense and priority claims totaling well in excess of $75,000,000. Without any additional funding to the Debtors' estates, the Committee believes that it will be unable to confirm the Plan in its current form, or any other Chapter 11 plan within a reasonable period of time. A full-text copy of the Committee's Budget Analysis is available for free at http://ResearchArchives.com/t/s?21b3 Stipulation & New Werner Funding Will Remain Effective in Chapter 7 Ms. Counihan stated that while the Stipulation contains provisions contemplating a confirmed plan, the effectives of the Stipulation is not contingent upon plan confirmation. She noted that the parties expressly agreed that the Stipulation would remain binding and fully enforceable upon the Chapter 7 conversion. Therefore, Ms. Counihan said, Levine Leichtman will still be required to share its recoveries on account of the Section 507(b) Claim and provide the full amount of the LLCP Funding to the Chapter 7 estates, notwithstanding the conversion of the Debtors' cases to Chapter 7. Moreover, the Stipulation will be binding upon the Chapter 7 trustee if the Debtors' cases are converted. Ms. Counihan added that as an assumed liability under the Asset Purchase Agreement, the Chapter 7 conversion will have no impact on New Werner's obligation to pay the wind-down expenses of the Debtors' estates up to $750,000. The Committee wants the Court to confirm that all rights and protections provided to the panel, the Debtors' estates, Levine Leichtman and the general unsecured creditors, including the right to share in recoveries from the Section 507(b) Claim; Levine's obligation to provide the LLCP Funding; Levine's right to appoint the Litigation Designee; and New Werner's obligations to pay up to $750,000 in wind-down expenses of the Debtors' estates, will remain fully binding and enforceable following the Chapter 7 Conversion. Chap. 7 Conversion is Appropriate & Necessary Ms. Counihan told the Court that, given the continuing loss of value of the Debtors' assets and the build-up of administrative expenses -- roughly $200,000 per month in professional fees and retiree costs alone -- there is a continuing and substantial loss to, and diminution of, the Debtors' estates within the meaning of Section 1112(b)(4). Ms. Counihan added that there is no reasonable likelihood of rehabilitation of the Debtors' cases. As a result of the sale and the Debtors' continued deteriorating financial situation, coupled with the ongoing accrual of administrative expenses, the only viable option remaining is to liquidate the Debtors' assets under Chapter 7, Ms. Counihan said. If the Debtors' cases are converted to a Chapter 7 proceeding, the Committee supports the appointment of Mr. Stanziale as the Chapter 7 trustee for the Debtors' estates because of his familiarity with the Debtors' cases and his current experience as a Chapter 7 trustee in three cases pending in the District of Delaware. About Werner Holding Co. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or (215/945-7000). WILLIAMS SCOTSMAN: Algeco Deal Cues Moody's to Review Ratings ------------------------------------------------------------- Moody's Investors Service placed all ratings of Williams Scotsman, Inc. (Corporate Family at B1) on review for possible downgrade. The review was prompted by Williams Scotsman's announcement that it is to be acquired by the parent company of Algeco for $2.2 billion. Algeco is a private European company that has a similar business profile to Williams Scotsman. The merger agreement was approved by Williams Scotsman's Board of Directors. Pending all approvals, the transaction is expected to close in the fourth quarter. The review will focus on the proposed acquisition that could represent a change in the capital structure of the company, if approved and closed. Given an initial review of the transaction, Moody's notes it is possible that leverage at both the operating and holding companies could increase. In addition, under the terms of the transaction, Williams Scotsman may and intends to solicit alternative proposals from third parties. This brings added uncertainty to the ultimate capital structure of the company. Moody's stated that it will also evaluate the terms and the structure of the transaction. Moody's recognizes that there are "change of control" provisions in the senior notes that require Williams Scotsman to tender for the notes. If the transaction is consummated and there is a full tender, it is possible the outcome of this review would be a withdrawal of all ratings. These ratings were placed on review for possible downgrade: Williams Scotsman, Inc. -- Corporate Family -- B1 -- Senior Secured Credit Facility -- B1 -- Senior Unsecured Notes -- B2 Williams Scotsman International, Inc. is headquartered in Baltimore, Maryland, and is a provider of modular space solutions in North America and Europe. WILLIAMS SCOTSMAN: Algeco Deal Cues S&P's Developing CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Williams Scotsman Inc., including the 'BB-' corporate credit rating, on CreditWatch with developing implications. The rating action follows the modular space lessor's announcement of its agreement to be acquired by the parent company of unrated Algeco, the European space rental company, for $2.2 billion of cash. Williams Scotsman intends to solicit alternative proposals from other parties through Aug. 17, 2007. "The agreement to an alternative proposal from either a strategic or financial buyer could result in a ratings upgrade or downgrade, depending upon how the transaction is financed," said Standard & Poor's credit analyst Betsy Snyder. "Alternatively, if the proposed acquisition by Algeco is completed, Williams Scotsman's rated debt will be refinanced and we will withdraw all ratings." Baltimore, Maryland-based Williams Scotsman is a leading lessor of modular space and storage units with a fleet of over 118,000 units and a network of more than 100 locations in North America and Spain. Algeco is the largest renter of accommodation and portable storage units in Europe, with a fleet of approximately 175,000 units. Upon completion of the acquisition, the combined company will operate in 16 countries. The proposed transaction is expected to close in the fourth quarter of 2007 subject to shareholder and regulatory approvals. Standard & Poor's will assess Algeco's and other potential proposals to resolve the CreditWatch. S&P could affirm ratings on the senior notes as a result of a change of control provision in the notes. YEARLING-BURRY: 341(a) Creditors Meeting Set for August 28 ---------------------------------------------------------- Ilene W. Lashinsky, the U.S. Trustee for Region 14, will convene a meeting of Yearling-Burry 15 LLP's creditors on Aug. 28, 2007, at 2:00 p.m. at the U.S. Trustee Meeting Room, 230 North First Avenue, Suite 102 in Phoenix, Arizona. This is the first meeting of creditors required under 11 U.S.C. Section 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Yearling-Burry 15 Headquartered in Paradise Valley, Ariz., Yearling-Burry 15 LLP filed for chapter 11 protection on June 9, 2007 (Bankr. D. Ariz. Case No. 07-03225). When the Debtor filed for protection from their creditors, they listed estimated assets and debts between $1 million to $100 million. The Debtor's exclusive period to file a chapter 11 plan expires on Oct. 7, 2007. YEARLING-BURRY: Court Approves Jennings Haugh as Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona gave Yearling-Burry 15 LLP authority permission to employ Jennings, Haug & Cunning LLP as its attorney. As the Debtors' attorney, firm is expected to: a) give the Debtor-in-Possession legal advice with respect to his power and duties as Debtor-in-Possession in the continued operation of the Debtor's business and management of Debtor's property; b) prepare on behalf of the Debtor-in-Possession the necessary applications, schedules, statement of affairs, plans of reorganizations, answers, orders, reports and other legal papers; c) represent the Debtor-in-Possession at sale hearings, confirmations hearings, contested and adversary hearings as may be necessary; and d) perform all other legal services for the Debtor which may be necessary herein. The firm's professionals billing rates are: Professional Hourly Rate ------------ ----------- Other Partners $235 - $385 Associates $175 - $210 Paralegals $125 Dean M. Dinner, Esq., a partner of the firm, will bill $310 for this engagement. Mr. Dinner assures the Court that the firm does not hold any interest adverse to the Debtor's estate and creditors and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Dinner can be reached at: Dean M. Dinner, Esq. Jennings, Haug and Cunningham, LLP 2800 North Central Avenue, Suite 1800 Phoenix, AZ 85004-1049 Tel: (602) 234-7800 Fax: (602) 277-5595 http://www.jhc-law.com/ About Yearling-Burry 15 Headquartered in Paradise Valley, Ariz., Yearling-Burry 15 LLP filed for chapter 11 protection on June 9, 2007 (Bankr. D. Ariz. Case No. 07-03225). When the Debtor filed for protection from their creditors, they listed estimated assets and debts between $1 million to $100 million. The Debtor's exclusive period to file a chapter 11 plan expires on Oct. 7, 2007. * Fitch Updates Q-IFS Ratings on 555 Insurance Companies -------------------------------------------------------- Fitch Ratings has updated its Quantitative Insurer Financial Strength ratings for 555 U.S. property/casualty insurance companies. At the same time, Fitch has assigned new Q-IFS ratings to 80 U.S. property/casualty insurers. Of the 555 updated ratings, there are 69 upgrades, 25 downgrades, and 381 affirmations. Fitch notes that the number of upgrades relative to downgrades reflects the improvements in credit fundamentals experienced by the rated companies during the 2006 financial year. Including the 555 Q-IFS ratings, Fitch currently maintains coverage on 958 U.S. property/casualty insurance companies that collectively make up about 74% of total industry net premiums written. In addition, Fitch is withdrawing 23 previously existing Q-IFS ratings as these various property/casualty insurance companies no longer meet Fitch's criteria to be eligible to receive a Q-IFS rating. Q-IFS ratings are generated solely on a statistical model utilizing the five most recent years of statutory financial statement information. The model incorporates 'rating logic' that mirrors many aspects of the quantitative analysis that is used to assign traditional IFS ratings. While recognizing the limitations associated with using a strict quantitative rating approach, Fitch believes that IFS ratings do provide a reasonable representation of the company's stand-alone financial strength and operating profile. Q-IFS Ratings/No. of Companies * 'AAA'/0; * 'AA'/0; * 'A'/199; * 'BBB'/299; * 'BB'/42; * 'B'/10; * 'CCC'/5; Average Net Premiums Written: $149 Million Traditional IFS Ratings/No. of Companies * 'AAA'/11; * 'AA'/228; * 'A'/151; * 'BBB'/8; * 'BB'/3; * 'B'/1; * 'CCC'/1; * Average Net Premiums Written: $615 Million Combined/No. of Companies * 'AAA'/11; * 'AA'/228; * 'A'/350; * 'BBB'/307; * 'BB'/45; * 'B'/11; * 'CCC'/6; * Average Net Premiums Written: $345 Million Fitch has affirmed these Q-IFS ratings: Entity/NAIC Code/Affirmed Rating -- A. Central Insurance Company (NY)/11105/'BBBq'; -- Aaa Mid-Atlantic Insurance Company (PA)/10675/'BBBq'; -- Aaa Mid-Atlantic Insurance Company of New Jersey (NJ)/42960/'BBBq'; -- Acceptance Indemnity Insurance Company (NE)/20010/'BBBq'; -- ACUITY, A Mutual Insurance Company (WI)/14184/'Aq'; -- Addison Insurance Company (IL)/10324/'Aq'; -- Aegis Security Insurance Company (PA)/33898/'BBBq'; -- Affirmative Insurance Company (IL)/42609/'BBBq'; -- Agency Insurance Company of Maryland, Inc. (MD)/35173/'BBBq'; -- Agri General Insurance Company (IA)/42757/'BBBq'; -- Agricultural Workers Mutual Auto Insurance Company (TX)/18430/'BBBq'; -- Alabama Municipal Insurance Corporation (AL)/17710/'BBBq'; -- Alaska National Insurance Company (AK)/38733/'Aq'; -- All America Insurance Company (OH)/20222/'Aq'; -- Allied Eastern Indemnity Company (PA)/11242/'BBBq'; -- Amcomp Assurance Corporation (FL)/25402/'BBBq'; -- Amcomp Preferred Insurance Company (FL)/10346/'BBBq'; -- American Agricultural Insurance Company (IN)/10103/'BBBq'; -- American Century Casualty Company (TX)/10807/'BBBq'; -- American Compensation Insurance Company (MN)/45934/'BBBq'; -- American Family Home Insurance Company (FL)/23450/'BBBq'; -- American Hallmark Insurance Company of Texas (TX)/43494/'BBBq'; -- American Hardware Mutual Insurance Company (OH)/13331/'Aq'; -- American Independent Insurance Company (PA)/17957/'BBq'; -- American Interstate Insurance Company (LA)/31895/'BBBq'; -- American Interstate Insurance Company of Texas (TX)/12228/'BBBq'; -- American Mining Insurance Company (AL)/15911/'BBBq'; -- American Modern Home Insurance Company (OH)/23469/'BBBq'; -- American Modern Select Insurance Company (OH)/38652/'BBBq'; -- American National General Insurance Company (MO)/39942/'BBBq'; -- American National Property And Casualty Company (MO)/28401/'Aq'; -- American Safety Casualty Insurance Company (DE)/39969/'BBBq'; -- American Safety Indemnity Company (OK)/25433/'BBBq'; -- American Safety Risk Retention Group, Inc (VT)/25448/'BBBq'; -- American Select Insurance Company (OH)/19992/'Aq'; -- American Sentinel Insurance Company (PA)/17965/'BBBq'; -- American Service Insurance Company, Inc. (IL)/42897/'BBBq'; -- American Southern Home Insurance Company (FL)/41998/'BBBq'; -- American Southern Insurance Company (KS)/10235/'BBBq'; -- American Steamship Owners Mutual Protection & Indemnity Association, Inc. (NY)/13366/'CCCq'; -- American Vehicle Insurance Company (FL)/10790/'BBBq'; -- American Western Home Insurance Company (OK)/35912/'BBBq'; -- Amguard Insurance Company (PA)/42390/'BBBq'; -- Amica Mutual Insurance Company (RI)/19976/'Aq'; -- Arag Insurance Company (IA)/34738/'BBBq'; -- Arbella Indemnity Insurance Company (MA)/10017/'BBBq'; -- Arbella Mutual Insurance Company (MA)/17000/'BBBq'; -- Arbella Protection Insurance Company (MA)/41360/'BBBq'; -- Argonaut Great Central Insurance Company (IL)/19860/'BBBq'; -- Argonaut Insurance Company (IL)/19801/'BBBq'; -- Argonaut Limited Risk Insurance Company (IL)/26409/'BBBq'; -- Argonaut-Midwest Insurance Company (IL)/19828/'BBBq'; -- Argonaut-Southwest Insurance Company (LA)/19844/'BBBq'; -- Armed Forces Insurance Exchange (KS)/41459/'Bq'; -- Associated Industries Insurance Company, Inc. (FL)/23140/'Bq'; -- Association Insurance Company (GA)/11240/'Aq'; -- Atlantic Casualty Insurance Company (NC)/42846/'BBBq'; -- Atlantic Mutual Insurance Company (NY)/19895/'Bq'; -- Atlantic States Insurance Company (PA)/22586/'Aq'; -- Attorneys Liability Protection Society, Inc., A Risk Retention Group (MT)/32450/'BBq'; -- Austin Mutual Insurance Company (MN)/13412/'BBBq'; -- Auto Club Family Insurance Company (MO)/27235/'BBBq'; -- Auto-Owners Insurance Company (MI)/18988/'Aq'; -- Badger Mutual Insurance Company (WI)/13420/'Aq'; -- Bancinsure, Inc. (OK)/18538/'BBBq'; -- Bankers Independent Insurance Company (PA)/13455/'BBq'; -- Bay State Insurance Company (MA)/19763/'Aq'; -- Brethren Mutual Insurance Company (MD)/13501/'Aq'; -- Buckeye State Mutual Insurance Company (OH)/16713/'BBBq'; -- Builders Insurance (A Mutual Captive Company) (GA)/10704/'Aq'; -- California Capital Insurance Company (CA)/13544/'Aq'; -- California State Automobile Association Inter-Insurance Bureau (CA)/15539/'Aq'; -- Cambridge Mutual Fire Insurance Company (MA)/19771/'Aq'; -- Cameron Mutual Insurance Company (MO)/15725/'BBBq'; -- Canal Insurance Company (SC)/10464/'Aq'; -- Capital City Insurance Company, Inc. (SC)/30589/'BBBq'; -- Centennial Insurance Company (NY)/19909/'Bq'; -- Central Mutual Insurance Company (OH)/20230/'Aq'; -- Cherokee Insurance Company (MI)/10642/'Aq'; -- Church Mutual Insurance Company (WI)/18767/'Aq'; -- Club Exchange Corporation, Atty-In-Fact For Automobile Club Inter-Insurance Exchange (MO)/15512/'BBBq'; -- Colony Insurance Company (VA)/39993/'Aq'; -- Colony National Insurance Company (VA)/34118/'Aq'; -- Colony Specialty Insurance Company (OH)/36927/'Aq'; -- Commonwealth Reinsurance Company (MA)/10230/'BBBq'; -- Concord General Mutual Insurance Company (NH)/20672/'BBBq'; -- Consumers Insurance USA, Inc. (TN)/10204/'BBBq'; -- Contractors Bonding and Insurance Company (WA)/37206/'Aq'; -- Co-Operative Insurance Companies (VT)/18686/'BBBq'; -- Cotton States Mutual Insurance Company (GA)/20966/'Aq'; -- Country Mutual Insurance Company (IL)/20990/'Aq'; -- Courtesy Insurance Company (FL)/26492/'Aq'; -- Covenant Insurance Company (CT)/10062/'BBBq'; -- Crusader Insurance Company (CA)/14010/'BBBq'; -- Cumberland Insurance Company Inc. (NJ)/10448/'BBBq'; -- Cumberland Mutual Fire Insurance Company (NJ)/13684/'BBBq'; -- Dairyland Insurance Company (WI)/21164/'Aq'; -- Developers Surety and Indemnity Company (IA)/12718/'BBBq'; -- Diamond State Insurance Company (IN)/42048/'BBBq'; -- Donegal Mutual Insurance Company (PA)/13692/'Aq'; -- Dorchester Mutual Insurance Company (MA)/13706/'BBBq'; -- Dryden Mutual Insurance Company (NY)/13919/'BBBq'; -- Dtric Insurance Company, Limited (HI)/37265/'BBBq'; -- Eagle West Insurance Company (CA)/12890/'Aq'; -- Eastern Alliance Insurance Company (PA)/10724/'BBBq'; -- Eastguard Insurance Company (PA)/14702/'BBBq'; -- Electric Insurance Company (MA)/21261/'BBBq'; -- EMC Reinsurance Company (IA)/40509/'Aq'; -- Erie and Niagara Insurance Association (NY)/10374/'BBBq'; -- Erie Insurance Company (PA)/26263/'Aq'; -- Erie Insurance Company of New York (NY)/16233/'Aq'; -- Erie Insurance Exchange (PA)/26271/'Aq'; -- Farm Bureau General Insurance Company of Michigan (MI)/21547/'BBBq'; -- Farm Bureau Mutual Insurance Company (IA)/13773/'BBBq'; -- Farm Bureau Mutual Insurance Company of Idaho (ID)/13765/'BBBq'; -- Farm Bureau Town & Country Insurance Company of Missouri (MO)/26859/'BBBq'; -- Farm Family Casualty Insurance Company (NY)/13803/'Aq'; -- Farmers Automobile Insurance Association Farmers Automobile Management Corp., Atty-In-Fact (IL)/24201/'Aq'; -- Farmers Casualty Insurance Company (IA)/13811/'Aq'; -- Farmers Mutual Fire Insurance Company of Salem County (NJ)/13854/'BBBq'; -- Farmers Mutual Insurance Company of Nebraska (NE)/13889/'Aq'; -- Farmers Mutual Protective Association (TX)/21733/'BBBq'; -- Farmers Union Mutual Insurance (ND)/32670/'BBBq'; -- FCCI Insurance Company (FL)/10178/'BBBq'; -- Federated Mutual Insurance Company (MN)/13935/'Aq'; -- Federated National Insurance Company (FL)/27980/'CCCq'; -- Federated Rural Electric Insurance Exchange (KS)/11118/'Aq'; -- Federated Service Insurance Company (MN)/28304/'Aq'; -- Fidelity Mohawk Insurance Company (NJ)/15750/'Aq'; -- Financial Pacific Insurance Company (CA)/31453/'BBBq'; -- Firstcomp Insurance Company (NE)/27626/'BBBq'; -- Firstline National Insurance Company (MD)/40100/'BBBq'; -- Fitchburg Mutual Insurance Company (MA)/13943/'BBBq'; -- Florida Farm Bureau Casualty Insurance Company (FL)/31216/'BBBq'; -- Florida Hospitality Mutual Insurance Company (FL)/10699/'BBBq'; -- Florists' Mutual Insurance Company (IL)/13978/'BBBq'; -- FMI Insurance Company (NJ)/37699/'Aq'; -- Founders Insurance Company (IL)/14249/'BBBq'; -- Frankenmuth Mutual Insurance Company (MI)/13986/'Aq'; -- Franklin Insurance Company (PA)/10728/'BBBq'; -- Franklin Mutual Insurance Company (NJ)/16454/'Aq'; -- Fremont Insurance Company (MI)/13994/'BBBq'; -- Georgia Farm Bureau Mutual Insurance Company (GA)/14001/'BBBq'; -- Germania Insurance Company (TX)/36854/'BBBq'; -- Germantown Mutual Insurance Company (WI)/14036/'BBBq'; -- Goodville Mutual Casualty Company (PA)/14044/'Aq'; -- Grain Dealers Mutual Insurance Company (IN)/22098/'BBq'; -- Grange Indemnity Insurance Company (OH)/10322/'Aq'; -- Grange Insurance Association (WA)/22101/'BBBq'; -- Grange Insurance Company of Michigan (OH)/11136/'Aq'; -- Grange Mutual Casualty Company (OH)/14060/'Aq'; -- Greater New York Mutual Insurance Company (NY)/22187/'Aq'; -- Grinnell Mutual Reinsurance Company (IA)/14117/'Aq'; -- Grinnell Select Insurance Company (IA)/16144/'BBBq'; -- Guideone Mutual Insurance Company (IA)/15032/'BBBq'; -- Guideone Property & Casualty Insurance Company (IA)/13984/'BBBq'; -- Guideone Specialty Mutual Insurance Company (IA)/14559/'BBBq'; -- Harco National Insurance Company (IL)/26433/'Aq'; -- Harford Mutual Insurance Company (MD)/14141/'BBBq'; -- Hastings Mutual Insurance Company (MI)/14176/'Aq'; -- Haulers Insurance Company, Inc. (TN)/31550/'BBBq'; -- Hawaii Employers' Mutual Insurance Company, Inc. (HI)/10781/'Aq'; -- High Point Preferred Insurance Company (NJ)/28959/'BBBq'; -- Hochheim Prairie Farm Mutual Insurance Association (TX)/31054/'BBBq'; -- Holyoke Mutual Insurance Company in Salem (MA)/14206/'Aq'; -- Home and Farm Insurance Company (IN)/17639/'BBBq'; -- Home-Owners Insurance Company (MI)/26638/'Aq'; -- Housing Authority Property Insurance, A Mutual Company (VT)/10069/'Aq'; -- Housing Authority Risk Retention Group, Inc. (VT)/26797/'BBBq'; -- Illinois Casualty Company (A Mutual Insurance Company) (IL)/15571/'BBBq'; -- Imperial Fire and Casualty Insurance Company (LA)/44369/'BBBq'; -- IMT Insurance Company (Mutual) (IA)/14257/'Aq'; -- Indiana Farmers Mutual Insurance Company (IN)/22624/'BBBq'; -- Indiana Lumbermens Mutual Insurance Company (IN)/14265/'BBBq'; -- Insurance Company of Greater New York (NY)/22195/'Aq'; -- Integrity Mutual Insurance Company (WI)/14303/'Aq'; -- Interinsurance Exchange of The Automobile Club (CA)/15598/'Aq'; -- International Fidelity Insurance Company (NJ)/11592/'BBBq'; -- Iowa American Insurance Company (IA)/31577/'Aq'; -- Iowa Mutual Insurance Company (IA)/14338/'Aq'; -- Island Insurance Company, Limited (HI)/22845/'Aq'; -- Kentucky Farm Bureau Mutual Insurance Company (KY)/22993/'Aq'; -- Keystone Insurance Company (PA)/11681/'BBBq'; -- Lackawanna Casualty Company (PA)/11703/'BBBq'; -- Lafayette Insurance Company (LA)/18295/'Aq'; -- Landmark American Insurance Company (OK)/33138/'BBq'; -- Lemic Insurance Company (LA)/10708/'BBq'; -- Lexon Insurance Company (TX)/13307/'BBBq'; -- Liberty American Insurance Company (FL)/10955/'Aq'; -- Liberty American Select Insurance Company (FL)/32760/'Aq'; -- Lightning Rod Mutual Insurance Company (OH)/26123/'BBBq'; -- Litchfield Mutual Fire Insurance Company (CT)/32085/'BBq'; -- Lititz Mutual Insurance Company (PA)/14400/'BBBq'; -- Louisiana Farm Bureau Mutual Insurance Company (LA)/14427/'BBq'; -- Louisiana Workers' Compensation Corporation (LA)/22350/'Aq'; -- Loya Insurance Company (TX)/11198/'BBBq'; -- Lumbermen's Underwriting Alliance-U.S. Epperson Underwriting Co.,Atty. (MO)/23108/'BBBq'; -- Madison Mutual Insurance Company (IL)/14443/'BBBq'; -- Majestic Insurance Company (CA)/42269/'BBBq'; -- Medmarc Casualty Insurance Company (VT)/22241/'BBBq'; -- Medmarc Mutual Insurance Company (VT)/32089/'BBBq'; -- Mercer Insurance Company (PA)/14478/'BBBq'; -- Mercer Insurance Company of NJ, Inc. (NJ)/43540/'BBBq'; -- Meridian Citizens Mutual Insurance Company (IN)/10502/'Aq'; -- Merrimack Mutual Fire Insurance Company (MA)/19798/'Aq'; -- Michigan Construction Industry Mutual Insurance Company (MI)/10998/'BBBq'; -- Middlesex Insurance Company (WI)/23434/'Aq'; -- Middlesex Mutual Assurance Company (CT)/14532/'Aq'; -- Midwest Family Mutual Insurance Company (MN)/23574/'BBBq'; -- Milbank Insurance Company (SD)/41653/'Aq'; -- Millers Capital Insurance Company (PA)/14575/'BBBq'; -- Mmg Insurance Company (ME)/15997/'BBBq'; -- Monterey Insurance Company (CA)/23540/'Aq'; -- Motorists Mutual Insurance Company (OH)/14621/'Aq'; -- Mountain States Indemnity Company (NM)/10177/'BBBq'; -- Mountain States Mutual Casualty Company (NM)/14648/'BBBq'; -- Mountain Valley Indemnity Company (NH)/10205/'BBBq'; -- Mountain West Farm Bureau Mutual Insurance Company (WY)/29440/'Aq'; -- Mutual Benefit Insurance Company (PA)/14664/'BBBq'; -- Mutual of Enumclaw Insurance Company (WA)/14761/'BBBq'; -- National American Insurance Company (OK)/23663/'BBBq'; -- National Lloyds Insurance Company (TX)/15474/'Aq'; -- National Mutual Insurance Company (OH)/20184/'BBBq'; -- National Security Fire & Casualty Company (AL)/12114/'BBBq'; -- Nevada Capital Insurance Company (NV)/11165/'Aq'; -- New England Guaranty Insurance Co, Inc. (VT)/25852/'BBBq'; -- New Jersey Casualty Insurance Company (NJ)/10732/'BBBq'; -- New Jersey Citizens United Reciprocal Exchange (NJ)/37028/'BBq'; -- New Jersey Manufacturers Insurance Company (NJ)/12122/'Aq'; -- New Jersey Re-Insurance Company (NJ)/35432/'Aq'; -- New London County Mutual Insurance Company (CT)/14826/'BBBq'; -- New Mexico Mutual Casualty Company (NM)/40627/'BBBq'; -- New York Central Mutual Fire Insurance Company (NY)/14834/'BBBq'; -- New York Municipal Insurance Reciprocal (NY)/20690/'BBBq'; -- New York Schools Insurance Reciprocal (NY)/34843/'BBBq'; -- Nodak Mutual Insurance Company (ND)/34592/'BBBq'; -- Noetic Specialty Insurance Company (IL)/17400/'BBBq'; -- Norfolk & Dedham Mutual Fire Insurance Company (MA)/23965/'BBBq'; -- Norguard Insurance Company (PA)/31470/'BBBq'; -- North Carolina Farm Bureau Mutual Insurance Company (NC)/14842/'Aq'; -- North Star Mutual Insurance Company (MN)/14850/'Aq'; -- Nova Casualty Company (NY)/42552/'BBBq'; -- Nuclear Electric Insurance Limited (DE)/34215/'BBBq'; -- Ocean Harbor Casualty Insurance Company (FL)/12360/'BBBq'; -- Ohio Farmers Insurance Company (OH)/24104/'Aq'; -- Ohio Indemnity Company (OH)/26565/'BBBq'; -- Oklahoma Farm Bureau Mutual Insurance Company (OK)/21563/'BBBq'; -- Oklahoma Farmers Union Mutual Insurance Company (OK)/41475/'BBBq'; -- Old Guard Insurance Company (OH)/17558/'Aq'; -- Old United Casualty Company (KS)/37060/'Aq'; -- Oregon Mutual Insurance Company (OR)/14907/'BBBq'; -- Owners Insurance Company (OH)/32700/'Aq'; -- Pacific Specialty Insurance Company (CA)/37850/'Aq'; -- Palisades Safety and Insurance Association (NJ)/22050/'BBBq'; -- Paramount Insurance Company (NY)/40177/'BBBq'; -- Partners Mutual Insurance Company (WI)/13439/'BBq'; -- Patrons Fire Insurance Company of Rhode Island (CT)/30937/'BBq'; -- Patrons Mutual Insurance Company of Connecticut (CT)/14923/'BBq'; -- Patrons Oxford Insurance Company (ME)/28290/'Aq'; -- Pekin Insurance Company (IL)/24228/'Aq'; -- Pemco Insurance Company (WA)/18805/'BBBq'; -- Pemco Mutual Insurance Company (WA)/24341/'BBBq'; -- Peninsula Insurance Company (MD)/14958/'BBBq'; -- Penn Millers Insurance Company (PA)/14982/'BBBq'; -- Penn National Security Insurance Company (PA)/32441/'Aq'; -- Penn Patriot Insurance Company (VA)/10121/'Aq'; -- Penn-America Insurance Company (PA)/32859/'Aq'; -- Penn-Star Insurance Company (PA)/10673/'Aq'; -- Pennsylvania Lumbermens Mutual Insurance Company (PA)/14974/'Aq'; -- Pennsylvania National Mutual Casualty Insurance Company (PA)/14990/'Aq'; -- Permanent General Assurance Corporation (TN)/37648/'BBBq'; -- Permanent General Assurance Corporation of Ohio (OH)/22906/'BBBq'; -- Pharmacists Mutual Insurance Company (IA)/13714/'BBBq'; -- Philadelphia Contributionship Insurance Company (PA)/17914/'BBBq'; -- Philadelphia Indemnity Insurance Company (PA)/18058/'Aq'; -- Philadelphia Insurance Company (PA)/23850/'Aq'; -- Phoenix Indemnity Insurance Company (AZ)/34037/'BBBq'; -- Pioneer State Mutual Insurance Company (MI)/18309/'Aq'; -- Plymouth Rock Assurance Corporation (MA)/14737/'BBBq'; -- Preferred Mutual Insurance Company (NY)/15024/'BBBq'; -- Pre-Paid Legal Casualty, Inc. (OK)/37869/'BBBq'; -- Preserver Insurance Company (NJ)/15586/'BBBq'; -- Proformance Insurance Company (NJ)/10100/'BBBq'; -- Property-Owners Insurance Company (IN)/32905/'Aq'; -- Providence Mutual Fire Insurance Company (RI)/15040/'BBBq'; -- Public Service Mutual Insurance Company (NY)/15059/'BBBq'; -- Quincy Mutual Fire Insurance Company (MA)/15067/'Aq'; -- Ram Mutual Insurance Company (MN)/16330/'BBBq'; -- Republic Mutual Insurance Company (OH)/20192/'BBBq'; -- Residence Mutual Insurance Company (CA)/15776/'Aq'; -- Rider Insurance Company (NJ)/34509/'BBBq'; -- Rockford Mutual Insurance Company (IL)/27065/'BBBq'; -- RSUI Indemnity Company (NH)/22314/'Aq'; -- Rural Mutual Insurance Company (WI)/15091/'Aq'; -- Safe Auto Insurance Company (OH)/25405/'BBBq'; -- Safety Indemnity Insurance Company (MA)/33618/'Aq'; -- Safety Insurance Company (MA)/39454/'Aq'; -- Safeway Insurance Company (IL)/12521/'BBBq'; -- Safeway Insurance Company of Alabama, Inc. (AL)/11223/'BBBq'; -- Safeway Insurance Company of Georgia (GA)/25640/'BBBq'; -- Safeway Insurance Company of Louisiana (LA)/10248/'BBBq'; -- Sagamore Insurance Company (IN)/40460/'BBBq'; -- SAIF Corporation (OR)/36196/'BBBq'; -- Seaworthy Insurance Company (MD)/37923/'BBBq'; -- Secura Insurance, A Mutual Company (WI)/22543/'Aq'; -- Secura Supreme Insurance Company (WI)/10239/'Aq'; -- Security Mutual Insurance Company (NY)/15113/'BBq'; -- Select Markets Insurance Company (IL)/19836/'BBBq'; -- Select Risk Insurance Company (PA)/17752/'BBBq'; -- Sentry Insurance A Mutual Company (WI)/24988/'Aq'; -- Sentry Select Insurance Company (WI)/21180/'Aq'; -- Service Lloyds Insurance Company (TX)/43389/'Aq'; -- Shelter General Insurance Company (MO)/23361/'BBBq'; -- Shelter Mutual Insurance Company (MO)/23388/'Aq'; -- Shelter Reinsurance Company (MO)/26557/'BBBq'; -- Silver Oak Casualty, Inc. (LA)/26869/'BBBq'; -- Society Insurance, A Mutual Company (WI)/15261/'BBBq'; -- Sonnenberg Mutual Insurance Company (OH)/10271/'BBBq'; -- Southern Farm Bureau Casualty Insurance Company (MS)/18325/'Aq'; -- Southern General Insurance Company (GA)/37141/'BBq'; -- Southern Insurance Company of Virginia (VA)/26867/'BBBq'; -- Southern-Owners Insurance Company (FL)/10190/'Aq'; -- State Auto Insurance Company of Ohio (OH)/11017/'Aq'; -- State Auto National Insurance Company (OH)/19530/'BBBq'; -- State Auto Property & Casualty Insurance Company (IA)/25127/'Aq'; -- State Automobile Mutual Insurance Company (OH)/25135/'Aq'; -- State-Wide Insurance Company (NY)/25275/'BBBq'; -- Sterling Insurance Company (NY)/15210/'BBBq'; -- Stratford Insurance Company (NH)/40436/'Aq'; -- Strathmore Insurance Company (NY)/11024/'Aq'; -- Summit Insurance Company (CT)/37354/'BBBq'; -- Sutter Insurance Company (CA)/32107/'BBBq'; -- T.H.E. Insurance Company (LA)/12866/'Aq'; -- Tennessee Farmers Assurance Company (TN)/41220/'Aq'; -- Tennessee Farmers Mutual Insurance Company (TN)/15245/'Aq'; -- Texas Mutual Insurance Company (TX)/22945/'Aq'; -- The Beacon Mutual Insurance Company (RI)/24017/'BBBq'; -- The Celina Mutual Insurance Company (OH)/20176/'BBBq'; -- The Gray Insurance Company (LA)/36307/'BBBq'; -- The Personal Service Insurance Company (OH)/12289/'BBq'; -- Topa Insurance Company (CA)/18031/'BBBq'; -- Transguard Insurance Company of America, Inc (IL)/28886/'BBBq'; -- Trustgard Insurance Company (OH)/40118/'Aq'; -- Tudor Insurance Company (NH)/37982/'Aq'; -- U.S. Security Insurance Company (FL)/21300/'BBq'; -- Union Mutual Fire Insurance Company (VT)/25860/'BBBq'; -- United Educators Insurance, A Reciprocal Risk Retention Group (VT)/10020/'Aq'; -- United Farm Family Insurance Company (NY)/29963/'Aq'; -- United Farm Family Mutual Insurance Company (IN)/15288/'BBBq'; -- United Fire & Casualty Company (IA)/13021/'Aq'; -- United Fire & Indemnity Company (TX)/19496/'Aq'; -- United Fire Lloyds (TX)/43559/'Aq'; -- United National Casualty Insurance Company (IN)/11445/'BBBq'; -- United National Insurance Company (PA)/13064/'BBBq'; -- United National Specialty Insurance Company (WI)/41335/'BBBq'; -- United Ohio Insurance Company (OH)/13072/'Aq'; -- Universal Casualty Company (IL)/42862/'BBBq'; -- Utica First Insurance Company (NY)/15326/'BBBq'; -- Vanliner Insurance Company (MO)/21172/'BBBq'; -- Vermont Mutual Insurance Company (VT)/26018/'Aq'; -- Vinings Insurance Company (SC)/16632/'Aq'; -- Virginia Farm Bureau Fire and Casualty Insurance Company (VA)/26026/'BBBq'; -- Virginia Farm Bureau Mutual Insurance Company (VA)/26034/'BBBq'; -- Virginia Farm Bureau Town and Country Insurance Company (VA)/10086/'BBBq'; -- Wawanesa General Insurance Company (CA)/10683/'BBBq'; -- Wawanesa Mutual Insurance Company (CA)/31526/'Aq'; -- West Bend Mutual Insurance Company (WI)/15350/'Aq'; -- Western Agricultural Insurance Company (IA)/27871/'BBBq'; -- Western Mutual Insurance Company (CA)/13625/'Aq'; -- Western National Mutual Insurance Company (MN)/15377/'Aq'; -- Western Reserve Mutual Casualty Company (OH)/26131/'BBBq'; -- Western United Insurance Company (CA)/37770/'Aq'; -- Western World Insurance Company (NH)/13196/'Aq'; -- Westfield Insurance Company (OH)/24112/'Aq'; -- Westfield National Insurance Company (OH)/24120/'Aq'; -- Westguard Insurance Company (PA)/11981/'BBBq'; -- Wilshire Insurance Company (NC)/13234/'BBBq'; -- Wilson Mutual Insurance Company (WI)/19950/'Aq'; -- Wisconsin Mutual Insurance Company (WI)/27022/'BBBq'; -- Wisconsin Reinsurance Corporation (WI)/30260/'BBBq'; -- Workmen's Auto Insurance Company (CA)/13250/'BBq'; Fitch has withdrawn these Q-IFS ratings: Entity/NAIC Code/Prior Rating -- Aequicap Insurance Company (FL)/24619/'BBq'; -- Allegheny Mutual Casualty Company (PA)/13285/'BBq'; -- Allied World Assurance Company (U.S.) Inc. (DE)/19489/'BBBq'; -- American Country Insurance Company (IL)/38237/'BBq'; -- Apollo Casualty Company (IL)/10343/'BBBq'; -- Colorado Farm Bureau Mutual Insurance Company (CO)/13641/'BBBq'; -- Diamond Insurance Company (IL)/10659/'BBq'; -- Equity Insurance Company (TX)/28746/'BBq'; -- First Acceptance Insurance Company, Inc. (TX)/10336/'BBq'; -- Georgia Casualty & Surety Company (GA)/11258/'BBq'; -- Gramercy Insurance Company (TX)/43265/'BBq'; -- Imperial Casualty & Indemnity Company (OK)/11487/'BBq'; -- Mississippi Farm Bureau Mutual Insurance Company (MS)/14605/'CCCq'; -- Nevada Contractors Insurance Company, Inc. (NV)/11020/'BBq'; -- New Jersey Indemnity Insurance Company (NJ)/10978/'Aq'; -- Newmarket Underwriters Insurance Company (NH)/10690/'BBBq'; -- Probuilders Specialty Insurance Company, RRG (DC)/11671/'BBq'; -- Providence Property & Casualty Insurance Company (OK)/28711/'BBq'; -- Republic Western Insurance Company (AZ)/31089/'BBq'; -- Rutgers Casualty Insurance Company (NJ)/41378/'BBq'; -- Sterling Casualty Insurance Company (CA)/42277/'BBq'; -- Village Automobile Insurance Company, Inc. (GA)/11508/'BBBq'; -- Young America Insurance Company (TX)/27090/'BBq'; * S&P Places Ratings on 17 Tranches Under Negative CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 17 tranches from eight U.S. cash flow and hybrid CDO of ABS transactions on CreditWatch with negative implications following the downgrade of 418 classes of U.S. residential mortgage-backed securities backed by closed-end second-lien mortgage collateral. All but one of the eight CDO transactions with ratings placed on CreditWatch were issued during 2006; the remaining transaction was issued in 2003. Two of the eight are high-grade SF CDOs of ABS, and the remaining six are mezzanine SF CDOs of ABS, collateralized largely by 'A' and 'BBB' rated tranches of RMBS and other structured finance securities. The exposures to the downgraded U.S. RMBS backed by closed-end second-lien collateral in the CDO transactions with ratings placed on CreditWatch ranged from 6.6% to 14.2% of the collateral assets. An additional five CDOs with significant (3% or more) exposure to the U.S. RMBS backed by closed-end second-lien collateral downgraded earlier already had tranche ratings on CreditWatch negative in connection with an ongoing review of CDOs with exposure to U.S. RMBS transactions backed by subprime first-lien mortgage collateral that were downgraded on July 12, 2007. These CDOs did not see additional tranche ratings placed on CreditWatch negative due to exposure to the U.S. RMBS transactions backed by closed-end second-lien collateral downgraded July 20, 2007. Standard & Poor's is continuing its review of cash flow and hybrid CDO transactions with exposure to downgraded RMBS and will take action on the CDO ratings where appropriate. Ratings Placed On Creditwatch Negative Rating ------ Transaction Class To From ----------- ----- -- ---- MKP CBO VI Ltd. B AA/Watch Neg AA MKP CBO VI Ltd. C A/Watch Neg A MKP CBO VI Ltd. D BBB/Watch Neg BBB E*Trade ABS CDO V Ltd. B BBB/Watch Neg BBB Montrose Harbor CDO I D BBB/Watch Neg BBB Kleros Real Estate CDO I D BB/Watch Neg BB Kleros Real Estate CDO II C AA-/Watch Neg AA- Kleros Real Estate CDO II E BB/Watch Neg BB Orion 2006-1 Ltd. A AAA/Watch Neg AAA Orion 2006-2 Ltd. A-2 AAA/Watch Neg AAA Orion 2006-2 Ltd. C-1 A/Watch Neg A Orion 2006-2 Ltd. C-2 A-/Watch Neg A- Orion 2006-2 Ltd. D-1 BBB/Watch Neg BBB Orion 2006-2 Ltd. D-2 BBB-/Watch Neg BBB- Orion 2006-2 Ltd. E BB+/Watch Neg BB+ Trainer Wortham First Republic CBO III D BBB/Watch Neg BBB Trainer Wortham First Republic CBO III Pref. shares BB/Watch Neg BB * S&P Lowers Ratings on 93 Tranches from 75 Transactions -------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 93 tranches from 75 U.S. synthetic collateralized debt obligation of asset-backed securities transactions. The downgrades follow a review of all of Standard & Poor's rated synthetic CDO transactions with exposure to U.S. residential mortgage-backed securities backed by subprime first-lien collateral that saw ratings lowered on July 12, 2007. Additionally, Standard & Poor's stated that it had incorporated the downgrade of closed-end second-lien RMBS classes earlier into its analysis of the synthetic CDO transactions, and that the U.S. closed-end second-lien RMBS rating actions taken earlier would have no further impact on the ratings assigned to synthetic CDOs. As part of its surveillance process, Standard & Poor's reviews its rated synthetic CDO transactions monthly via the synthetic rated overcollateralization process and publishes the SROC ratios and other performance metrics each month. All of the synthetic CDOs with lowered ratings had SROC ratios that fell below 100% at the current rating levels after the July 12 U.S. subprime first-lien RMBS downgrades and now have SROC ratios above 100% at the new, lower rating levels. Ratings Lowered Rating ------ Transaction/series Class To From ------------------ ----- -- ---- Abacus 2006-11 Ltd. A-2 Ser 1 AA+ AAA Abacus 2006-11 Ltd. A-2 Ser 2 AA+ AAA Abacus 2006-11 Ltd. B A+ AA- Abacus 2006-11 Ltd. B Ser 2 A+ AA- Abacus 2006-11 Ltd. C BBB+ A- Abacus 2006-11 Ltd. D BBB- BBB Abacus 2006-14 Ltd. A-2 A+ AAA Abacus 2006-14 Ltd. A-2 (Ser2) A+ AAA Abacus 2006-14 Ltd. B BBB+ AA- Abacus 2006-14 Ltd. C BBB- A- ARLO VI Ltd. Series 2006 (Army Pier I) Notes A A+ Series 2006 (Charleston Springs) Notes BBB+ A- Series 2006 (Marine Park I) Notes AA- AA Series 2006 (Old Orchard) Notes AA+ AAA Series 2006 (Pine Brook) Notes AA+ AAA Series 2006 (Shark River) Notes BBB+ A- Series 2006 (South Pier I) Notes A- A Series 2006-1 (SABS) Notes A+ AA- Series 2006-2 (SABS) Notes A AA- Series 2006-4 (SABS) Notes A+ AA- Series 2006-5 (SABS) Notes A+ AA- Series 2006-6 (SABS) Notes BBB+ A- Series 2006-8 (SABS) A A A+ B BBB+ A- Series 2006-9 (SABS) A A A+ B BBB+ A- Series 2006-10 (SABS) A A A+ B BBB+ A- ARLO VII Ltd. Series 2007-1 (SABS) Notes AA+ AAA Buchanan SPC Series 2006-I A1J AA+ AAA Series 2006-II A2 AA- AA Series 2006-IV B BBB- BBB Coliseum SPC BALLISTA 2007-II Notes AA+ AAA BALLISTA 2007-III Notes BBB A+ Cookson SPC Series 2007-7 Notes BB- BBB Series 2007-8 Notes BBB- A Coriolanus Ltd. Series 39 Tranche BBB- BBB+ Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #804055 A Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #804055 B Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #804055 C-1 Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #804055 C-2 Tranche BBB+srb A-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #804055 D-1 Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #804055 D-2 Tranche BBB+srb A-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #804055 E Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 A1 Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 A2 Tranche BBB+srb A-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 B1 Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 B2 Tranche BBB+srb A-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 C1 Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 C2 Tranche BBB+srb A-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 D1 Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 D2 Tranche BBB+srb A-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 E1 Tranche A+srb AA-srb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #826480 E2 Tranche BBB+srb A-srb Credit Default Swap Swap Risk Rating-Protection Buyer, Markov Chain I C Tranche AA+srb AAAsrb Credit Default Swap Swap Risk Rating-Protection Buyer, Markov Chain IV C Tranche AA+srb AAAsrb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #AUGUSTA PEAK Tranche BB+srb BBBsrb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #BISON PEAK Tranche BBB-srb BBBsrb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #CARIBOU PEAK Tranche BB+srb BBBsrb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #GRAYS PEAK Tranche BB+srb BBBsrb Credit Default Swap Swap Risk Rating-Protection Buyer, CDS Reference #PTARMIGAN PEAK Tranche BB+srb BBBsrb Eirles Two Ltd. Series 251 BBB A- Series 252 BBB- BBB Series 261 BBB+ A Series 257 A+ AA Series 258 BBB+ A Series 259 A AA- Series 264 BBB A- Series 265 BBB+ A Series 266 BBB- BBB Ixion PLC Series 29 J BBB BBB+ Magnolia Finance II PLC Series 2006-8C Series C AA+ AAA Series 2006-8DG Series DG BBB+ A Series 2006-8DU Series DU BBB+ A Series 2006-8E Series E BB+ BBB Series 2006-8F Series F BB+ BBB- Series 2006-9B Notes AA AAA Series 2006-9E2 Notes BBB- BBB+ Series 2006-9F1 Notes BB+ BBB Series 2006-9F2 Notes BB+ BBB Rutland Rated Investments Millbrook 2006-4 Series 31 A AA AAA Millbrook 2006-4 Series 32 B A- AA- Millbrook 2006-4 Series 33 C BBB+ A- Millbrook 2006-4 Series 34 E BBB- BBB Millbrook 2006-4 Series 35 D BBB BBB+ Millbrook 2007-1 Series 39 Notes A+ AA- Millbrook 2007-1 Series 41 Notes A+ AA- USP SPC Series Jackson 2006-I Notes A+ AAA Series Jackson 2006-II Notes BBB+ AA Series Jackson 2006-IIA Notes BBB+ AA Series Jackson 2006-III Notes BBB+ AA- Series Jackson 2006-IV Notes BBB- A Series Jackson 2006-V Notes BB- BBB * Donlin Recano Partners w/ Beard Group to Provide Bankr. News -------------------------------------------------------------- Donlin Recano & Company, Inc. has partnered with Frederick, Maryland-based Beard Group Inc. to provide the latest in comprehensive bankruptcy news. "With thousands of people already utilizing our website daily for information on our previously filed cases, we believe keeping turnaround professionals additionally informed about breaking industry news is critically important," commented Lou Recano, Donlin Recano's Chief Executive Officer. "News is our business and joining with Donlin Recano to bring turnaround professionals the latest industry news on a real time basis is just one innovative way to assure easy access to breaking stories of the day," commented Christopher Beard, President of Beard Group, publisher of the Troubled Company Reporter. About The Beard Group Beard Group Inc. -- http://www.beardgroup.com-- offers a comprehensive range of leading-edge products and services to legal and business professionals. These include traditional and electronic publishing, databank document search and delivery, and conferences. About Donlin Recano Headquartered in New York City, Donlin Recano -- http://www.donlinrecano.com/-- is a claims management company that has served over 200 national clients across a broad range of industries and business sectors. Working with counsel, turnaround advisors and the affected company, Donlin Recano helps organize and guide Chapter 11 clients through administrative bankruptcy tasks, including provision of Web site-accessible information, formation of professional call centers, management of claims, balloting, distribution and other administrative services. The company also provides Web based information services for creditors committees as required by The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. * BOND PRICING: For the week of July 16 - July 20, 2007 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 0 ABC Rail Product 10.500% 12/31/04 0 Acme Metals Inc 12.500% 08/01/02 0 AHI-DFLT07/05 8.625% 10/01/07 71 Aladdin Gaming 13.500% 03/01/10 0 Albertson's Inc 6.520% 04/10/28 74 Allegiance Tel 11.750% 02/15/08 51 Allegiance Tel 12.875% 05/15/08 16 Amer & Forgn Pwr 5.000% 03/01/30 66 Atherogenics Inc 1.500% 02/01/12 47 Atlantic Coast 6.000% 02/15/34 6 Bank New England 8.750% 04/01/99 8 Bank New England 9.500% 02/15/96 14 Bank New England 9.875% 09/15/99 9 Budget Group Inc 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 54 Calpine Gener Co 11.500% 04/01/11 38 Cell Therapeutic 5.750% 06/15/08 72 Collins & Aikman 10.750% 12/31/11 2 Color Tile Inc 10.750% 12/15/01 0 Comprehensive Care 7.500% 04/15/10 60 Decode Genetics 3.500% 04/15/11 73 Decode Genetics 3.500% 04/15/11 72 Delta Mills Inc 9.625% 09/01/07 16 Desa Intl Inc 9.875% 12/15/07 0 Deutsche Bank NY 8.500% 11/15/16 66 Diamond Triumph 9.250% 04/01/08 64 Dura Operating 8.625% 04/15/12 66 Dura Operating 9.000% 05/01/09 11 Dura Operating 9.000% 05/01/09 7 Dvi Inc 9.875 02/01/04 10 Encysive Pharma 2.500% 03/15/12 64 Exodus Comm Inc 11.250% 07/01/08 0 Fedders North Am 9.875% 03/01/14 33 Finova Group 7.500% 11/15/09 21 Florsheim Group 12.750 09/01/02 0 Ford Motor Co 6.375% 02/01/29 73 Ford Motor Co 6.625% 02/15/28 74 Ford Motor Co 6.625% 10/01/28 74 Golden Books Pub 10.750% 12/31/04 0 Gulf States STL 13.500% 04/15/03 0 Insight Health 9.875% 11/01/11 31 Iridium LLC/CAP 10.875% 07/15/05 15 Iridium LLC/CAP 11.250% 07/15/05 16 Iridium LLC/CAP 13.000% 07/15/05 18 Iridium LLC/CAP 14.000% 07/15/05 17 JTS Corp 5.250% 04/29/02 0 Kaiser Aluminum 9.875% 02/15/02 21 Kaiser Aluminum 12.750% 02/01/03 11 Kellstrom Inds 5.500 06/15/03 2 Lehman Bros Holding 10.000% 10/30/13 69 Lehman Bros Holding 11.000% 10/25/17 75 Liberty Media 3.750% 02/15/30 62 Liberty Media 4.000% 11/15/29 66 Lifecare Holding 9.250% 08/15/13 67 Missouri PAC RR 5.000% 01/01/45 75 Motorola Inc 5.220% 10/01/97 71 Movie Gallery 11.000% 05/01/12 22 New Orl Grt N RR 5.000% 07/01/32 66 Northern Pacific RY 3.000% 01/01/47 52 Northern Pacific RY 3.000% 01/01/47 52 Northwest Steel & Wire 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 72 O'Sullivan Ind 10.630% 10/01/08 0 Oakwood Homes 7.875% 03/01/04 11 Oscient Pharma 3.500% 04/15/11 74 Outboard Marine 9.125% 04/15/17 0 Pac-West Telecom 13.500% 02/01/09 25 Pac-West Telecom 13.500% 02/01/09 11 PCA LLC/PCA FIN 11.875 08/01/09 5 Pegasus Satellite 9.625% 10/15/49 0 Pegasus Satellite 12.375% 08/01/08 0 Piedmont Aviat 10.250% 01/15/49 0 Piedmont Aviat 10.250% 01/15/49 0 Polaroid Corp 6.750% 01/15/02 0 Polaroid Corp 7.250% 01/15/07 0 Polaroid Corp 11.500% 02/15/06 0 Primus Telecom 3.750% 09/15/10 73 Primus Telecom 8.000% 01/15/14 73 Radnor Holdings 11.000% 03/15/10 0 Read-Rite Corp 6.500% 09/01/04 0 RJ Tower Corp. 12.000% 06/01/13 3 Scott Cable Comm 16.000% 07/18/02 0 SLM Corp 5.500% 06/15/29 74 SLM Corp 5.500% 03/15/30 73 SLM Corp 5.500% 03/15/30 74 SLM Corp 5.500% 12/15/30 74 SLM Corp 5.600% 12/15/29 74 SLM Corp 5.750% 03/15/30 75 SLM Corp 5.850% 12/15/31 75 Spacehab Inc 5.500% 10/15/10 52 Times Mirror Co 7.250% 11/15/96 69 Tom's Foods Inc 10.500% 11/01/04 2 Tousa Inc 7.500% 03/15/11 71 Tousa Inc 7.500% 01/15/15 68 TransTexas Gas 15.000% 03/15/05 0 United Air Lines 9.200% 03/22/08 52 United Air Lines 10.125% 03/22/15 52 United Homes Inc. 11.000% 03/15/05 0 US Air Inc. 10.550% 01/15/49 0 US Air Inc. 10.680% 06/27/08 14 US Air Inc. 10.700% 01/01/49 0 US Air Inc. 10.700% 01/15/49 0 US Air Inc. 10.800% 01/01/49 0 US Air Inc. 10.800% 01/01/49 0 US Air Inc. 10.900% 01/01/49 0 USAutos Trust 2.212% 03/03/11 7 Vesta Insurance Group 8.750% 07/15/25 4 Werner Holdings 10.000% 11/15/07 3 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 5.000% 08/01/11 70 Wheeling-Pitt St 6.000% 08/01/10 70 Winstar Comm Inc 10.000% 03/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 Winstar Comm 14.000% 10/15/05 0 ********* 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, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, Sheena Jusay, 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 ***