/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080428.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, April 28, 2008, Vol. 12, No. 100 Headlines 155 EAST: Moody's Slashes Ratings to 'Caa3' on High Default Risk ABSC HOME: Principal Write-downs Cue S&P's Eight Rating Cuts ABSPOKE 2006-IA: Moody's Reviews 'Ba1' Rating on $100 Mil. Notes ABSPOKE 2005-IC: Moody's Junks Rating on $25 Mil. Notes ABSPOKE 2005-IC2: Moody's Junks Rating on $5 Mil. Notes From Baa2 ABSPOKE 2006-IIC: Moody's Reviews 'B2' Rating on $15 Mil. Notes ABSPOKE 2006-III: Three Classes of Notes Get Moody's Rating Cuts ABSPOKE 2005-X: Moody's Reviews 'Ba3' Rating on JPY2 Bil. Notes ABSPOKE 2005-XII B: Moody's Reviews 'Ba1' Rating on $24.5MM Notes ARCAP 2005-RR5: Fitch Downgrades Ratings on 15 Classes of Certs. ASARCO LLC: Grupo Mexico to Submit Reorganization Plan for ASARCO ASARCO LLC: Affiliates Ask Joint Administration of Ch. 11 Cases B&B INSURANCE: A.M. Best Assigns 'b+' Issuer Credit Rating BAYBERRY FUNDING: Moody's Reviews 'Ba2' Rating on $42.5 Mil. Notes BEAR STEARNS: SEC Doesn't Reveal Reasons on Withdrawing from Probe BEAR STEARNS COMMERCIAL: Fitch Affirms Low-B Ratings on Six Certs. BEAR STEARNS TRUST: Moody's Cuts Ratings on Higher Delinquencies BENAZZI CDO: Three Classes of Notes Get Moody's Rating Downgrades BRYAN COUNTY: Moody's Holds 'Caa3' Rating on 1990A Revenue Bonds BUCHANAN SPC: Four Classes of Notes Get Moody's Rating Downgrades BUFFETS HOLDINGS: Court Approves FTI as Panel's Financial Advisor BUFFETS HOLDINGS: Asks Court to Enjoin Workers from Pursuing Case CALAMOS INVESTMENTS: To Refinance $939MM of Fund's Pref. Stocks CASAS INVESTMENTS: Case Summary & Largest Unsecured Creditor CASSANDRA THOMAS: Voluntary Chapter 11 Case Summary CAVTEL HOLDINGS: Operating Challenges Cue Moody's Rating Reviews C-BASS CBO: Five Classes of Notes Acquire Moody's Rating Cuts CDC MORTGAGE: Eight Classes of Certs. Get S&P's Rating Downgrades CENTRAL ILLINOIS: Has Until August 31 To File Chapter 11 Plan CENTRAL ILLINOIS: Court Okays $80MM Sale of Assets to CIE Energy CI WORLDWIDE: Voluntary Chapter 11 Case Summary CINCINNATI BELL: Dec. 31 Balance Sheet Upside-Down by $667 Million CITIUS I: Moody's Reviews 'Ba1' Rating on Two $1.8 Bil. Notes CITIUS II: Poor Credit Quality Prompts Moody's Rating Downgrades CLINICAL PET: Case Summary & 20 Largest Unsecured Creditors CMP SUSQUEHANNA: S&P Changes Outlook to Stable, Holds 'B-' Rating CONGOLEUM CORP: Ernst & Young Raises Substantial Doubt CONTINENTAL AIRLINES: Chooses Not to Merge with United Air Lines COUNTRYWIDE FINANCIAL: Mozilo's Pay Plummeted Nearly 80% in 2007 CREDIT DEFAULT: Moody's Junks Ratings on 12 Credit Default Swaps CREST 2000-1: Moody's Downgrades Rating on $21 Mil. Notes to 'B2' CRYSTAL RIVER: Six Classes of Notes Get Fitch's Rating Downgrades CST INDUSTRIES: Moody's Keeps 'B1' Rating on Upsized $135MM Loan CWABS TRUST: S&P Downgrades Ratings on 15 Mortgage Certificates DALLAGLIO CDO: Moody's Reviews 'Ba2' Rating on $22 Mil. Notes DALLAGLIO CDO: Moody's Downgrades Three Classes of Floating Notes DEN-MARK CONSTRUCTION: Case Summary & 68 Largest Unsec. Creditors DIAMOND GLASS: Court Approves Guggenheim's $7 Mil. DIP Financing DIOMED HOLDINGS: Seeks Court Okay to Sell Assets to AngioDynamics DIOMED HOLDINGS: May Use Lenders' Cash Collateral on Interim Basis DIOMED HOLDINGS: Selects Fladgate LLP as U.K. Legal Counsel DRS TECHNOLOGIES: Fitch Affirms Issuer Default Rating at 'B+' DUKE FUNDING IV: Moody's Cuts Ratings on Three Classes of Notes DUKE FUNDING VI: Seven Classes of Notes Get Moody's Rating Cuts DUKE FUNDING VII: Moody's Cuts Ratings on 11 Note Classes DUKE FUNDING IX: Nine Classes of Notes Get Moody's Rating Cuts DUKE FUNDING HIGH: Moody's Cuts Rating on $250MM Notes DUKE FUNDING HIGH: Moody's Cuts Ratings on Eight Classes of Notes DUKE FUNDING HIGH: Moody's Cuts Ratings on $1.5BB Notes Due 2050 DUNMORE HOMES: Files First Amended Plan of Liquidation EMPIRE LAND: Case Summary & 85 Largest Unsecured Creditors EOS AIRLINES: Files for Chapter 11 Protection in New York EOS AIRLINES: Voluntary Chapter 11 Case Summary FAIRWEST ENERGY: Unit's Lender Demands Repayment of $10.63MM Loan FOSTER WHEELER: Moody's Raises Corporate Family Rating to 'Ba2' FREMONT HOME: S&P Downgrades Ratings on Two Classes of Certs. FRONTIER AIRLINES: Wants to Get Faegre & Benson as Special Counsel GARY FIRMENDER: Case Summary & 13 Largest Unsecured Creditors GALVESTON PROPERTY: Moody's Confirms 'Caa1' Rating on 1991A Bonds GAMESTOP CORP: Moody's Lifts Ratings to Ba1 on Strong Performance GEMSTONE CDO IV: Moody's Cuts Ratings on Six Classes of Notes GEMSTONE CDO V: Eight Classes of Notes Get Moody's Rating Cuts GEMSTONE CDO VI: Five Classes of Notes Get Moody's Junk Ratings GENERAL MOTORS: GMAC and ResCap Downgrades Cue S&P's Neg. Watch GEOEYE INC: Moody's Upgrades Corporate Family Rating to 'Caa1' G-FORCE CDO: Fitch Downgrades Ratings on Seven Classes to Low Bs GLOBAL FUELS: Case Summary & 14 Largest Unsecured Creditors GREENPOINT MORTGAGE: Moody's Downgrades Ratings on Two Tranches GSAMP TRUST: Eroding Credit Support Cues S&P's Rating Downgrades HARRINGTON SCHWEERS: Involuntary Chapter 11 Case Summary HOMEBANC MORTGAGE: Moody's Downgrades Ratings on Three Tranches HOOP HOLDINGS: Wants Goulston & Storrs as Real Estate Counsel HSI ASSET: Seven Tranches Get Moody's Rating Cuts on Delinquencies HUBCO INC: Files Voluntary Chapter 11 Case Summary HUDSON MEZZANINE: Moody's Reviews 'Ba2' Rating on $240 Mil. Notes HUDSON MEZZANINE: Moody's Reviews 'Ba3' Rating on $1.2 Bil Swap INTERSTATE BAKERIES: Court Adjourns Confirmation Hearing Sine Die INTERSTATE BAKERIES: Court Sets DIP Facility Hearing April 29 IMPAC SECURED: Delinquency Cues Moody's Rating Cuts on 32 Tranches INDEPENDENCE COUNTY: S&P Cuts Rating on $29.3 Mil. Bonds to 'B' INERGY LP: Moody's Confirms 'Ba3' Ratings and Positive Outlook INERGY LP: S&P Attaches 'B+' Rating on $200 Mil. Senior Notes INPHONIC INC: Treasury Balks at Plan and Disclosure Statement ISCHUS HIGH: Six Classes of Notes Obtain Moody's Rating Downgrades ISCHUS MEZZANINE: Moody's Downgrades Ratings on Eight Classes IXION PLC: Three Classes of Notes Get Moody's Junk Ratings IXION PLC: Moody's Junks Rating on Tranche A Notes IXION PLC: Eroding Credit Quality Prompts Moody's Rating Cuts JP MORGAN: S&P Downgrades Cert. Ratings on Eroding Credit Support KAISER NETHERLANDS: Case Summary & 20 Largest Unsecured Creditors KENMARE 2005-I: Moody's Reviews 'B2' Rating on $50 Mil. Notes KIMBALL HILL: Moody's Cuts Rating on $203MM Notes to C KLEROS REAL: Moody's Junks Rating on $30 Mil. Notes From 'A3' KNOLLWOOD CDO: Seven Classes of Notes Get Moody's Rating Cuts LAGUNA SECA: Moody's Junks Ratings on Three Classes of Notes LANDSOURCE COMMUNITIES: Gets Default Notice on $1BB Obligation LB-UBS COMMERCIAL: Fitch Confirms Low-B Ratings on Three Classes LENNAR CORP: Venture Unit Gets Default Notice on $1BB Obligation LNR CDO: Fitch Downgrades Ratings on Seven Note Classes to Low-Bs LONG BEACH: Deterioration in Credit Support Cues S&P's Rating Cuts MAGNOLIA FINANCE: Moody's Junks Ratings on Seven Classes of Notes MAIN KNITTING: Chapter 15 Petition Summary MAJESTIC STAR: S&P's Cuts Corporate Credit Rating to 'CCC+' MONTAUK POINT: Weak Credit Quality Cues Moody's Rating Downgrades MARGATE FUNDING: Moody's Reviews 'Ba1' Rating on $30 Mil. Notes MEDIACOM COMMS: Dec. 31 Balance Sheet Upside-Down by $253 Million MERRILL LYNCH MORTGAGE: S&P Cuts Ratings on Five Classes of Certs. MEZZANINE PORTFOLIO: Moody's Junks Rating on $7.5MM Notes From B3 MICHAEL KESSEL: Case Summary & 13 Largest Unsecured Creditors ML-CFC COMMERCIAL: Fitch Maintains Low-B Ratings on Six Classes MORTGAGEIT CERTIFICATES: Moody's Downgrades Ratings on 12 Tranches MSC-MEDICAL SERVICES: Moody's Junks Rating on Weak Credit Metrics MUSICLAND HOLDING: Court Awards Professionals $10MM Final Payment NEW CENTURY ALTERNATIVE: Moody's Cuts Ratings on 10 Tranches NWGOC CREDIT DERIVATIVE: Moody's Reviews 'Ba1' Rating NORTH COVE: Moody's to Review B1 Rating on $44 Mil. Notes NORTHAMPTON GENERATING: Fitch Cuts Rating on $153 Mil. Bonds to B OSYKA CORP: Court Approves Bidding Procedures for Sale of Assets OWNIT MORTGAGE: S&P Downgrades Ratings on Three Certificates PENTON BUSINESS: S&P Puts 'B' Rating on Negative CreditWatch PITG GAMING: S&P Rates Corporate Credit 'B-' With Negative Outlook PRIDE INT'L: BOD's Actions May Cue Seadrill's Buyout, Fitch Says PROTECTED VEHICLES: Can Access GC Financial's Cash Collateral RADNOR HOLDINGS: Judge Walsh Approves Disclosure Statement RADNOR HOLDINGS: Plan Confirmation Hearing Set on June 12 RAMP TRUSTS: 35 Classes of Certs. Get S&P's Rating Downgrades RASC 2005-KS3: S&P Downgrades Ratings on Two Classes of Certs. REDENVELOPE INC: Court OKs $4.5MM DIP Loan & Creative Catalogs APA REGAL ENTERTAINMENT: March 27 Balance Sheet Upside-Down by $185MM RELIANT ENERGY: Wants Chapter 11 Trustee Appointed RENAISSANCE HOME: S&P Downgrades Ratings on 20 Asset-backed Certs. RESIDENTIAL CAPITAL: Taps Thomas Marano as Non-Exec Board Chairman RESIDENTIAL CAPITAL: S&P Junks Ratings on Board Members' Stepdown RUTLAND RATED: Moody's Reviews Ratings on Two Classes of Notes SEA CONTAINERS: SCSL Panel Asks Documents on Pension Dispute SHARPER IMAGE: Chooses to Pursue Sale of Business and Assets SORIN CDO: Six Classes of Notes Acquire Moody's Rating Downgrades SOUNDVIEW HOME: High Delinquencies Cue Moody's Nine Rating Cuts SPECIALTY UNDERWRITING: S&P Downgrades Ratings on 20 Cert. Classes SR TELECOM: Changes Name to SRX Post After Acquisition STANDARD PACIFIC: Posts $767.3 Million Net Loss in 2007 STATIC RESIDENTIAL: Poor Credit Quality Cues Moody's Rating Cuts STATIC RESIDENTIAL: Moody's Reviews 'Ba2' Rating on $46 Mil. Notes STATIC RESIDENTIAL: Moody's Reviews 'Ba2' Rating on $10 Mil. Notes STATIC RESIDENTIAL: Moody's Lowers Ratings on Five Note Classes STILLWATER ABS: Moody's Downgrades Ratings on Six Classes of Notes STRIKE PETROLEUM: Gets Letter Demanding Repayment of $10.63MM Loan SUMMER STREET: Moody's Cuts Ratings on $63 Mil. Notes to 'B3' SUMMER STREET: Two Classes of Notes Acquire Moody's Junk Ratings SUPERIOR OFFSHORE: Files For Chapter 11 Bankruptcy in Texas SUPERIOR OFFSHORE: Case Summary & 20 Largest Unsecured Creditors TAYLOR CAPITAL: Posts $10 Mil. Net Loss in Year Ended December 31 TERM CDO: Moody's Downgrades Ratings on Four Classes of Notes TERWIN MORTGAGE: S&P Downgrades Ratings on Certificate Classes TERWIN MORTGAGE: Credit Support Erosion Cues S&P's 11 Rating Cuts UAL CORP: Continental Airlines Chooses Not to Merge with United UAL CORP: Begins Merger Discussions with US Airways US AIRWAYS: Begins Merger Discussions with United Airlines USA COMMERCIAL: SEC Files Lawsuit Against Former CEO for Fraud WACHOVIA MORTGAGE: Moody's Downgrades Ratings on 15 Tranches WALTER INDUSTRIES: Moody's Rates Proposed Revolver 'B2' WALTER INDUSTRIES: S&P Affirms 'BB' Rating on Revolver Due 2010 WELLMAN INC: Creditors' Committee Balks at CRO Employment WELLMAN INC: Creditors' Panel Wants Sale Incentive Plan Modified WELLMAN INC: U.S. Trustee Asks Court to Reject Sale Incentive Plan WELLS FARGO: Six Tranches Acquire Moody's Rating Downgrades WENDY'S INTERNATIONAL: Inks $2BB Buyout Deal with Triarc Companies WENDY'S INT'L: Triarc Deal Prompts Moody's 'Ba3' Rating Reviews WENDY'S INT'L: Triarc Deal Cues S&P's Negative Watch on BB- Rating WHATELY CDO: Moody's Cuts Note Ratings on Poor Credit Quality * S&P Downgrades Ratings on 184 RMBS Classes From 27 Transactions * Moody's Says Homebuilding Industry Faces Continued Challenge * Credit Roundtable Strategizes to Lessen Event Risk, Moody's Says * Three Lawyers Join Proskauer Rose's New York Office * Husch & Eppenberger and Blackwell Officially Reveal Merger * BOND PRICING: For the Week of Apr. 21 - Apr. 25, 2008 ********* 155 EAST: Moody's Slashes Ratings to 'Caa3' on High Default Risk ---------------------------------------------------------------- Moody's Investors Service downgraded 155 East Tropicana LLC's corporate family rating and probability of default rating as well as the rating on the $130 million 8.75% senior secured notes due 2012 to Caa3 from Caa1. It also affirmed the SGL-4 speculative grade liquidity rating. The outlook is negative. The rating action is based on the increased risk of default through a potential distressed exchange offer or a missed debt service payment in the next twelve months, should the pending acquisition by Hedwigs Las Vegas Top Tier LLC fail and the company's EBITDA weaken further. Given the prolonged turbulence in the credit markets, the rating agency expresses skepticism regarding the materialization of the Transaction in its current terms, which was initiated on April 30, 2007, and is concerned about 155 East Tropicana's ability to meet its future debt service obligations, should the senior secured notes remain outstanding and the company fail to improve EBITDA in a sustainable way. Moody's also notes that the revolver expires on March 30, 2009, two days before a coupon payment date. Since the opening of the renovated Hooters Casino Hotel in February 2006, the ramp up has been well below expectations. The negative outlook reflects the risk of further deterioration with regards to operating performance and liquidity, as cost cutting measures might not fully offset the weakening of the company's revenues due to reduced traffic and lower consumer spending. Ratings downgraded: -- Corporate Family Rating to Caa3 -- Probability of Default Rating to Caa3 -- Rating of Senior Secured Notes due 2012 to Caa3 (unchanged LGD assessment of LGD4/57%) 155 East Tropicana, LLC owns the Hooters Casino Hotel in Las Vegas, Nevada. The property is located one-half block from the intersection of Tropicana Avenue and Las Vegas Boulevard, a major intersection on the Las Vegas Strip. The Hooters Casino Hotel features 696 hotel rooms and an approximately 29,000 square-foot casino. The company generated approximately $65 million in net revenues in 2007. ABSC HOME: Principal Write-downs Cue S&P's Eight Rating Cuts ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on eight classes of asset-backed certificates from four transactions issued by Asset Backed Securities Corp. Home Equity Loan Trust, Centex Home Equity Loan Trust, and Meritage Mortgage Loan Trust. Concurrently, S&P affirmed its ratings on the remaining 25 classes from these transactions. The downgrades reflect principal write-downs, reduced credit enhancement as a result of monthly realized losses, and a high amount of severe delinquencies (90-plus days, foreclosures, and REOs). As of the March 25, 2008, remittance date, cumulative realized losses, as a percentage of the original pool balances, were 9.25% (Asset Backed Securities Corp. series 2004-HE4), 4.59% (Centex series 2002-C), 3.41% (Meritage series 2004-1), and 2.74% (Meritage series 2004-2). Severe delinquencies totaled approximately $9.036 million for Meritage series 2004-1. For Asset Backed Securities Corp. series 2004-HE4, losses have outpaced excess interest by 2.6x over the past six months. These transactions incurred principal write-downs during the March remittance period totaling $738,092 for Asset Backed Securities Corp. 2004-HE4's class M8; $45,074 for Centex series 2002-C's class B-2; $487,189 for Meritage series 2004-1's class M-7; and $159,272 for Meritage series 2004-2's class M-10. As a result, S&P downgraded these classes to 'D'. The affirmations reflect sufficient credit enhancement available to support the ratings at their current levels. Subordination, overcollateralization, and excess spread provide credit support for these transactions. The collateral for these transactions originally consisted primarily of fixed- and adjustable-rate, first- and second-lien mortgage loans. Ratings Lowered Asset Backed Securities Corporation Home Equity Loan Trust Rating ------ Series Class CUSIP To From ------ ----- ----- -- ---- 2004-HE4 M5 04541GKG6 B BB 2004-HE4 M8 04541GKK7 D CCC Centex Home Equity Loan Trust Rating ------ Series Class CUSIP To From ------ ----- ----- -- ---- 2002-C B-2 152314FV7 D CCC Meritage Mortgage Loan Trust Rating ------ Series Class CUSIP To From ------ ----- ----- -- ---- 2004-1 M-2 59001FAR2 BB BB+ 2004-1 M-3 59001FAS0 B BB 2004-1 M-4 59001FAT8 B- B 2004-1 M-7 59001FAW1 D CCC 2004-2 M-10 59001FBP5 D CCC Ratings Affirmed Asset Backed Securities Corp. Home Equity Loan Trust Series Class CUSIP Rating ------ ----- ----- ------ 2004-HE4 A1 04541GKA9 AAA 2004-HE4 M1 04541GKC5 AA 2004-HE4 M2 04541GKD3 AA 2004-HE4 M3 04541GKE1 AA- 2004-HE4 M4 04541GKF8 BBB 2004-HE4 M6 04541GKH4 B- 2004-HE4 M7 04541GKJ0 CCC Centex Home Equity Loan Trust Series Class CUSIP Rating ------ ----- ----- ------ 2002-C AF-4 152314FM7 AAA 2002-C AF-5 152314FN5 AAA 2002-C AF-6 152314FP0 AAA 2002-C M-1 152314FS4 AA 2002-C M-2 152314FT2 A 2002-C B-1 152314FU9 CCC Meritage Mortgage Loan Trust Series Class CUSIP Rating ------ ----- ----- ------ 2004-1 M-1 59001FAQ4 BBB 2004-1 M-5 59001FAU5 CCC 2004-1 M-6 59001FAV3 CCC 2004-2 M-1 59001FBE0 AA+ 2004-2 M-2 59001FBF7 AA+ 2004-2 M-3 59001FBG5 AA 2004-2 M-4 59001FBH3 BBB- 2004-2 M-5 59001FBJ9 BB 2004-2 M-6 59001FBK6 B 2004-2 M-7 59001FBL4 CCC 2004-2 M-8 59001FBM2 CCC 2004-2 M-9 59001FBN0 CCC ABSPOKE 2006-IA: Moody's Reviews 'Ba1' Rating on $100 Mil. Notes ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these class of notes issued by ABSpoke 2006-IA Segregated Portfolio: Class Description: $100,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: Aaa -- Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2005-IC: Moody's Junks Rating on $25 Mil. Notes ------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the rating on these note issued by ABSpoke 2005-IC, Ltd. Class Description: $25,000,000 Fixed Rate Notes due 2042 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2005-IC2: Moody's Junks Rating on $5 Mil. Notes From Baa2 ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the rating on these note issued by ABSpoke 2005-IC2, Ltd. Class Description: $5,000,000 Variable Floating Rate Notes due 2042 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2006-IIC: Moody's Reviews 'B2' Rating on $15 Mil. Notes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the rating on these notes issued by ABSpoke 2006-IIC: Class Description: $15,000,000 Variable Floating Rate Notes Due 2037 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2006-III: Three Classes of Notes Get Moody's Rating Cuts ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by ABSpoke 2006-III: Class Description: $20,000,000 Variable Floating Rate Notes Due 2045, Series 2006-IIIA -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $30,000,000 Variable Floating Rate Notes Due 2045, Series 2006-IIIB -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $30,000,000 Variable Floating Rate Notes Due 2045, Series 2006-IIIC -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2005-X: Moody's Reviews 'Ba3' Rating on JPY2 Bil. Notes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these note issued by ABSpoke 2005-X, Ltd. Class Description: JPY2,000,000,000 Variable Floating Rate Notes Due 2015 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2005-XII B: Moody's Reviews 'Ba1' Rating on $24.5MM Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these note issued by ABSpoke 2005-XII B, Ltd.: Class Description: $24,500,000 Variable Floating Rate Notes due December 20, 2035 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ARCAP 2005-RR5: Fitch Downgrades Ratings on 15 Classes of Certs. ---------------------------------------------------------------- Fitch Ratings downgraded and assigned Distressed Recovery ratings to ARCap 2005-RR5 Resecuritization, Inc., commercial mortgage- backed securities pass-through certificates, series 2005-RR5 (ARCap 2005-RR5): -- $26.1 million class A-1 to 'BBB' from 'AAA'; -- $26.1 million class A-2 to 'BB' from 'AAA'; -- $26.2 million class A-3 to 'BB' from 'AAA'; -- $21.9 million class B to 'B' from 'AA'; -- $21.9 million class C to 'B' from 'A'; -- $3.1 million class D to 'B-' from 'A-'; -- $12.5 million class E to 'B-' from 'BBB+'; -- $9.4 million class F to 'B-' from 'BBB'; -- $9.4 million class G to 'B-' from 'BBB-'; -- $15.7 million class H to 'B-' from 'BB+'; -- $6.3 million class J to 'B-' from 'BB'; -- $9.4 million class K to 'B-' from 'BB-'; -- $9.4 million class L to 'CC/DR4' from 'B'; -- $9.4 million class M to 'CC/DR4' from 'B-/DR1'; -- $9.4 million class N to 'C/DR6' from 'CCC/DR3'. Additionally, Fitch has removed all downgraded classes from Rating Watch Negative, where they were originally placed on Jan. 16, 2008 and Dec. 12, 2007. The $1.2 million class O is not rated by Fitch. ARCap 2005-RR5 is backed by CMBS B-pieces and closed Aug. 16, 2005. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. A predecessor to Centerline REIT Inc. selected the initial collateral, and Centerline REIT Inc. (rated 'CAM1-' by Fitch as a CDO Asset Manager) currently serves as the collateral administrator. The collateral for this RE-REMIC consists of high-yielding junior bonds of CMBS and ReREMIC transactions. The underlying assets of the CMBS bonds, by their nature, face similar exposures to losses from any downturn in the commercial real estate market as well as refinancing risks at the assets' maturity dates. As a mitigant, however, the underlying CMBS transactions do have significant geographic, property type and tenant diversity. While Fitch continues to believe investment grade CMBS will perform well even in a heightened stress environment, the risks facing first loss and junior rated bonds within the capital structure of CMBS transactions have increased with expectations of a rise in commercial real estate defaults from current low levels. Even a relatively modest increase in CRE losses could be material for these CMBS B-piece resecuritizations. In reviewing CMBS Re-REMICs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches. Additional ratings considerations include seasoning of underlying collateral, obligor diversity, actual bond performance and projected losses. The specific credit characteristics that are factored into Fitch's rating review are discussed below. ARCap 2005-RR5 is collateralized by all or a portion of 18 classes of fixed-rate CMBS in 15 separate underlying transactions (70.8%) and the five most junior classes of ARCap 2004-RR3 (29.2%). All performance and collateral information is based on the March 24, 2008 trustee report and discussions with the collateral administrator. The pool's obligor diversity is considered below-average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1999 to 2005 (an average of 6.3 years of seasoning). Approximately 74.7% of the collateral is currently rated below 'B-' or not rated, and, therefore, is more susceptible to losses in the near-term. This concentration is one of the highest of all CMBS B-piece resecuritizations rated by Fitch. Overall, a significant portion of the collateral is below investment grade with only 2.3% investment grade. ARCap 2005-RR5 holds 2.7% in the 'BB' category and 20.3% in the 'B' category. The collateral has realized $89 million in losses to date, which represents 29% of the original collateral. Based on the original below 'B-' balance of $262.3 million, this loss rate equates to a 33.9% loss rate on the below 'B-' collateral, which is higher than other CMBS B-piece resecuritizations rated by Fitch. Additional losses are projected with $103 million of the loans in the underlying CMBS transactions currently 60 days or more delinquent. ASARCO LLC: Grupo Mexico to Submit Reorganization Plan for ASARCO ----------------------------------------------------------------- Grupo Mexico, S.A.B. de C.V., the ultimate parent of ASARCO LLC and its debtor-affiliates, will propose a sponsored reorganization plan through an auction procedure approved by the U.S. Bankruptcy Court for the Southern District of Texas to ensure the company's creditors are paid full or unimpaired. Although the company objects to the auction process, it is finalizing a proposal in an effort to guarantee the fair valuation of Asarco LLC's assets and reestablish its control of the company. The company welcomes the involvement of a Court-appointed examiner, who will oversee the auction and ensure the integrity of the process. The company believes that with a full payment plan, there is no reason to accept any purchase of assets proposal, and the legal team is prepared to pursue all legal remedies to guarantee that the auction results in the full valuation of Asarco LLC's assets. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Affiliates Ask Joint Administration of Ch. 11 Cases --------------------------------------------------------------- ASARCO LLC and its debtor-affiliates previously advised the U.S. Bankruptcy Court for the Southern District of Texas that, to complete the resolution of all of the Debtors' asbestos and environmental liabilities, additional subsidiaries would need to file for bankruptcy protection. The Debtors believe that Chapter 11 protection will provide a global resolution of the liabilities and will afford the surviving entities a clean start. Consequently, six affiliates of ASARCO LLC filed separate voluntary Chapter 11 petitions at the U.S. Bankruptcy Court for the Southern District of Texas on April 21, 2008. The additional ASARCO Debtors are: Entity Case No. ------ -------- Wyoming Mining & Milling Co. 08-20197 Alta Mining & Development Co. 08-20198 Tulipan Co., Inc. 08-20199 Blackhawk Mining & Development Co., Ltd. 08-20200 Peru Mining Exploration & Development Co. 08-20201 Green Hill Cleveland Mining Co. 08-20202 The debtor affiliates asked the Court to jointly administer their cases with ASARCO LLC's Chapter 11 case. They are represented by the law firm, Baker Botts L.L.P. Wyoming Mining, Blackhawk Mining, and Green Hill disclosed that it owes certain obligations under a consent decree, dated February 11, 1994, with the U.S. Department of Justice Environment and Natural Resources Division. Alta Mining, Green Hill, Peru Mining, Tulipan and Wyoming Mining listed not more than $50,000, in assets and liabilities. Blackhawk Mining listed assets between $100,000 and $500,000, and liabilities from $0 to $50,000. The debtor affiliates disclosed that they owe certain pension amounts to the Pension Benefit Guaranty Corporation, certain intercompany loans from ASARCO LLC, and various unpaid taxes to the Utah State Tax Commission. Other ASARCO affiliates that have sought protection under Chapter 11 are: * Lac d'Amiante Du Quebec Ltee, * CAPCO Pipe Company, Inc., * Cement Asbestos Products Company, * Lake Asbestos of Quebec, Ltd., * LAQ Canada, Ltd., * Encycle, Inc., * ASARCO Consulting, Inc., * AR Sacaton LLC, * Southern Peru Holdings LLC, * ASARCO Exploration Company Inc., * Salero Ranch, Unit III, Community Association, Inc., * Government Gulch Mining Company, Limited, * AR Mexican Explorations, Inc., * ASARCO Master, Inc., * ASARCO Oil and Gas Company, Inc., * Bridgeview Management Company, Inc., * ALC, Inc., * American Smelting and Refining Company, and * Covington Land Company. One of ASARCO's affiliate, Encycle/Texas, Inc., filed a Chapter 11 petition in 2005 but the case was subsequently converted to a Chapter 7 liquidation proceeding. The company is currently in the process of soliciting bids for potential plan sponsors and selling its assets to finance the plan. Two of the company's bondholders, Harbinger Capital Partners Master Fund I, Ltd., and Citigroup Global Markets, Inc., have expressed support for the sale process initiated by ASARCO LLC. The Arizona Republic said that BHP Billiton, Rio Tinto, and a group backed by Glencore AG expressed interest in bidding for ASARCO. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). B&B INSURANCE: A.M. Best Assigns 'b+' Issuer Credit Rating ---------------------------------------------------------- A.M. Best Co. assigned the financial strength rating of C++ (Marginal) and an issuer credit rating of "b+" to B&B Insurance Co., OJSI. The outlook for both ratings is stable. The ratings reflect the company's insufficient level of financial strength to support the business according to A.M. Best's risk- based capital model, partially mitigated by its established position as the largest private insurer in a small but developing Belarusian insurance market, with moderate financial performance. The company has a weak level of risk-adjusted capitalisation, dictated by a low level of capital and surplus relative to significant premium and investment risks. A.M. Best believes that the company's strategy to increase retained earnings through lower dividend payments of 15%, with projected premium growth up to 15% per annum, would improve its capital position going forward, though it is still likely to remain constrained. B&B has established itself as the largest private insurer with a 9% share of the local non-life market, which is dominated by government owned insurance companies. The company has acquitted itself well in a market that has undergone significant legislative changes. However, going forward B&B faces further challenges maintaining its position operating in an uncertain insurance environment. The company has consistently achieved positive underwriting results with a loss ratio of 83% in 2007, supported by moderate return of approximately 5% on investments. A.M. Best believes that despite these positive underwriting results and a comprehensive reinsurance programme, the net maximum exposures are material enough to impact further B&B's capital position. BAYBERRY FUNDING: Moody's Reviews 'Ba2' Rating on $42.5 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Bayberry Funding, Ltd.: Class Description: $86,000,000 Class III Senior Floating Rate Notes Due 2041 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $17,250,000 Class IV Mezzanine Floating Rate Deferrable Notes Due 2041 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $42,500,000 Class V Mezzanine Floating Rate Deferrable Notes Due 2041 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. BEAR STEARNS: SEC Doesn't Reveal Reasons on Withdrawing from Probe ------------------------------------------------------------------ The U.S. Securities and Exchange Commission did not divulge reasons why it withdrew from further investigation on Bear Stearns Cos. Inc.'s anomalies in pricing securities, Reuters reports. The SEC said its reasons were confidential. "The Commission does not disclose the existence or nonexistence of an investigation or information generated in any investigation unless made a matter of public record in proceedings brought before the Commission or the courts," Reuters quotes SEC Chairman Christopher Cox in an April 16 letter. The letter was a response to a congressional request asking the SEC why it withdrew from the probe. As reported in the Troubled Company Reporter on March 20, 2008, the SEC disclosed that the federal regulator is considering potential investigation into Bear Stearns' conduct prior to the investment bank's acquisition agreement with J.P. Morgan Chase & Co. The SEC's Division of Enforcement wrote a letter concerning investigations and potential future inquiries into conduct and statements by Bear Stearns before the public announcement of the transaction with JPMorgan. The Division investigates possible violations of the securities laws as appropriate, said the SEC. Among the things the Division looks for are potential indications of insider trading or manipulation of markets through the dissemination of false or misleading information to investors by companies or other market participants. The SEC brings enforcement actions when it concludes the securities laws have been violated. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BEAR STEARNS COMMERCIAL: Fitch Affirms Low-B Ratings on Six Certs. ------------------------------------------------------------------ Fitch Ratings affirmed Bear Stearns Commercial Mortgage Securities Trust 2007-TOP26, commercial mortgage pass-through certificates: -- $65.1 million class A-1 at 'AAA'; -- $177 million class A-2 at 'AAA'; -- $65.4 million class A-3 at 'AAA'; -- $78 million class A-AB at 'AAA'; -- $91.9 million class A-4 at 'AAA'; -- $50.1 million class A-1A at 'AAA'; -- $210.6 million class A-M at 'AAA'; -- $160.6 million class A-J at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $42.1 million class B at 'AA'; -- $18.4 million class C at 'AA-'; -- $29 million class D at 'A'; -- $15.8 million class E at 'A-'; -- $18.4 million class F at 'BBB+'; -- $18.4 million class G at 'BBB'; -- $18.4 million class H at 'BBB-'; -- $2.6 million class J at 'BB+'; -- $2.6 million class K at 'BB'; -- $5.3 million class L at 'BB-'; -- $2.6 million class M at 'B+'; -- $5.3 million class N at 'B'; -- $2.6 million class O at 'B-'. Fitch does not rate the $15.8 million class P. The rating affirmations are the result of stable performance since issuance. As of the April 2008 remittance report, the transaction has paid down 0.5% to $2.095 billion from $2.106 billion at issuance. There have been no delinquencies since issuance. Fitch reviewed the most recent servicer provided operating statement analysis reports for the 14 shadow rated loans in the transaction: One Dag Hammerskjold Plaza (7.2%), Fulbright Tower (3.9%), 503 Broadway (1.4%), Harmony Marketplace (1.4%), Stony Point East (1%), Stony Point West (0.3%), Fox Chapel Shopping Center (0.7%), Byram Plaza Shopping Center (0.7%), HSBC Sioux Falls (0.7%), 38-05 to 38-17 and 37-27/29 Main Street (0.5%), 213 West 35th Street (0.5%), Bridgeport Stop & Shop II (0.5%), Westover Apartments (0.3%) and Whole Foods Santa Monica (0.3%). Based on their stable performance since issuance the loans maintain their investment grade shadow ratings. One Dag Hammerskjold Plaza (7.2%) is a 782,928 square foot (sf) office property located on 2nd Avenue between 47th and 48th Streets in the Grand Central and UN submarket of Manhattan. Major tenants include Interpublic Group, Telerep, and Babcock & Brown, L.P. As of Jan. 1, 2008, occupancy at the property is 97% compared to 97.1% at issuance. Fulbright Tower (3.9%) is a 1.2 million sf office tower located in the Houston, Texas central business district and is part of the Houston Center Complex, also known as 3 Houston Center. The property is also within walking distance to the George R. Brown Convention Center, Minute Maid Park, Toyota Center, and Hilton Americas and Four Seasons Hotels. Major tenants include Fulbright & Jaworski, Hydro Gulf of Mexico and Key Energy Services. As of March 26, 2008 occupancy has increased to 91.3% from 89% at issuance. Fitch will continue to monitor the performance of the shadow rated loans as year end 2007 financial statements become available. BEAR STEARNS TRUST: Moody's Cuts Ratings on Higher Delinquencies ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 98 tranches from 18 Alt-A transactions issued by Bear Stearns. Fifty seven tranches remain on review for possible further downgrade. Additionally, 34 tranches were placed on review for possible downgrade, and the ratings on 5 tranches were confirmed. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. Ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: Bear Stearns ARM Trust 2005-6 -- Cl. B-2, Downgraded to A3 from A2 -- Cl. B-3, Downgraded to Ba1 from Baa2 Issuer: Bear Stearns ARM Trust 2005-12 -- Cl. II-1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-3-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-4-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-5-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Aa3 from Aa2 -- Cl. I-B-2, Downgraded to Baa1 from A2 -- Cl. I-B-3, Downgraded to Ba3 from Baa3 -- Cl. II-B-1, Downgraded to Baa1 from Aa2 -- Cl. II-B-2, Downgraded to B1 from A2 -- Cl. II-B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC5 -- Cl. I-B-1, Confirmed at Baa1 -- Cl. I-B-2, Confirmed at Baa2 -- Cl. I-B-4, Downgraded to Ca from Ba2 -- Cl. I-B-3, Downgraded to B1 from Baa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC6 -- Cl. I-B-2, Confirmed at Baa2 -- Cl. I-B-3, Confirmed at Baa3 -- Cl. I-B-4, Downgraded to Caa3 from Ba2 -- Cl. II-B-2, Downgraded to Ba3 from Baa1 Issuer: Bear Stearns Asset Backed Securities Trust I Series 2005- AC7 -- Cl. B-2, Confirmed at Baa2 -- Cl. B-3, Downgraded to Ba2 from Baa3 -- Cl. B-4, Downgraded to Ca from Ba2 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC8 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-8, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-10, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC9 -- Cl. M-1, Downgraded to Aa3 from Aa2 -- Cl. M-2, Downgraded to Baa1 from A2 -- Cl. M-3, Downgraded to Ba1 from A3 -- Cl. B-1, Downgraded to Ba2 from Baa1 -- Cl. B-2, Downgraded to B3 from Baa2 -- Cl. B-3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Ca from Caa2 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC1 -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-2X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-M-2, Downgraded to Baa1 from A2 -- Cl. I-M-3, Downgraded to Ba2 from A3 -- Cl. I-B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-3, Downgraded to Ca from Ba3 -- Cl. I-B-4, Downgraded to Ca from Caa3 -- Cl. II-B-1, Downgraded to Ba3 from Aa2 -- Cl. II-B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-3, Downgraded to Ca from B3 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC2 -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-M-2, Downgraded to Baa1 from A2 -- Cl. I-M-3, Downgraded to Ba3 from A3 -- Cl. I-B-1, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-3, Downgraded to Ca from B1 -- Cl. II-B-1, Downgraded to Ba2 from Aa2 -- Cl. II-B-3, Downgraded to Ca from B3 -- Cl. II-B-2, Downgraded to Ca from Ba1 -- Cl. I-B-4, Downgraded to Ca from Caa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC3 -- Cl. M-3, Downgraded to Baa3 from A3 -- Cl. B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B1 -- Cl. B-4, Downgraded to Ca from Caa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC4 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-1, Downgraded to B1 from Aa2 -- Cl. M-2, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba1 -- Cl. B-4, Downgraded to Ca from Ba3 -- Cl. B-5, Downgraded to Ca from B3 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC5 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba1 -- Cl. B-4, Downgraded to Ca from Ba3 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC1 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa2 -- Cl. M-2, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Ba2 -- Cl. B-3, Downgraded to Ca from B1 -- Cl. B-4, Downgraded to Ca from Caa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC2 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa2 -- Cl. M-2, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba1 -- Cl. B-2, Downgraded to Ca from Ba3 -- Cl. B-3, Downgraded to Ca from Caa1 -- Cl. B-4, Downgraded to Ca from Caa2 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC3 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba1 -- Cl. B-2, Downgraded to Ca from Ba2 -- Cl. B-3, Downgraded to Ca from Caa1 -- Cl. B-4, Downgraded to Ca from Caa2 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC4 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa2 -- Cl. M-2, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Caa1 -- Cl. B-2, Downgraded to Ca from Caa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC5 -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-7, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to Ba3 from Aa2 -- Cl. B-2, Downgraded to B2 from Ba2 Issuer: Bear Stearns Mortgage Funding Trust 2006-AC1 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa2 -- Cl. M-2, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba1 -- Cl. B-2, Downgraded to Ca from B1 -- Cl. B-3, Downgraded to Ca from B2 -- Cl. B-4, Downgraded to Ca from B3 BENAZZI CDO: Three Classes of Notes Get Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Benazzi CDO 2005-1 Ltd.: Class Description: $20,000,000 Class A Floating Rate Notes having a Final Maturity Date in December 2040 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $50,000,000 Class B Floating Rate Notes having a Final Maturity Date in December 2040 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $30,000,000 Class C Floating Rate Notes having a Final Maturity Date in December 2040 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. BRYAN COUNTY: Moody's Holds 'Caa3' Rating on 1990A Revenue Bonds ---------------------------------------------------------------- Moody's Investors Service affirmed the Caa3 rating on the Bryan County Economic Development Authority, Oklahoma, Single Family Mortgage Revenue Refunding Bonds, Series 1990A. The amount of debt outstanding is $1,080,000. The outlook on the rating is negative. The program consists of 43 loans with an aggregate principal amount outstanding of $395,493 as of March 31, 2008 (un-audited). The trustee reports that of the $395,493, two loans totaling $21,552 were classified as being up to 60 days past due. The Caa3 rating reflects the continued deterioration of the program's financial strength. This is evidenced by the asset-to- debt ratio which is currently 0.6421, down from 0.71 as of Dec. 31, 2006 and 0.814 as of Dec. 31, 2004. Approximately 55.75% of the program's assets are invested in guaranteed investment contracts whose rate of return is less than the coupon on the bonds (8.6%), resulting in negative arbitrage. The program has historically experienced rapid prepayments of loans. The amount of bonds likely to be affected by a default is directly tied to the prepayment speed of the remaining mortgage loans as borrowers prepay on their mortgage loans, causing negative revenues for the program. The faster the prepayment speed, the greater percentage of outstanding bonds that will likely receive less than the full principal and interest amount due. The bonds are scheduled to mature on Jan. 1, 2011. Outlook The rating outlook for the bonds is negative due to the expected continued deterioration of the program's financial position. BUCHANAN SPC: Four Classes of Notes Get Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Buchanan SPC: Portfolio: Buchanan 2006-I Segregated Portfolio Class Description: $115,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Portfolio: Buchanan 2006-II Segregated Portfolio Class Description: $72,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Portfolio: Buchanan 2006-III Segregated Portfolio Class Description: $10,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Portfolio: Buchanan 2006-IV Segregated Portfolio Class Description: $4,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. BUFFETS HOLDINGS: Court Approves FTI as Panel's Financial Advisor ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware gave authority to the Official Committee of Unsecured Creditors of Buffets Holdings Inc. and its debtor-affiliates to retain FTI Consulting, Inc., as its financial advisors. As reported in the Troubled Company Reporter on March 5, 2008, FTI will provide consulting and advisory services, including: * assistance in the review of financial related disclosures required by the Court, including schedules of assets and liabilities, statements of financial affairs and monthly operating reports; * assistance with information and analyses required pursuant to the DIP financing including, but not limited to, preparation for hearings regarding the use of cash collateral and DIP financing; * assistance and advice to the Committee with respect to the Debtors' identification of core business assets and the disposition of assets or liquidation of unprofitable operations; * assistance with a review of the Debtors' performance of cost and benefit evaluations with respect to the affirmation or rejection of varous executory contracts and leases; * assistance regarding an evaluation of the present level of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; * assistance in the review of financial information distributed by the Debtors to creditors and others, including, but not limited to, cash flow projections and budgets; * attendance at meetings and assistance in discussions with the Debtors, potential investors, banks, other secured lenders, the Committee and any other official committees organized in the Chapter 11 proceedings, the U.S. Trustee, and other parties-in-interest, as requested; * assistance in the review or preparation of information and analysis necessary for the confirmation of a plan; * assistance in the valuation of the business and review of capital structure alternatives; * assistance in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; and * other general business consulting or other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in the Chapter 11 proceeding. According to Jason D. Schauer, a representative of Levine Leichtman Capital Partners Deep Value Fund LP, co-chairperson of the Committee, the panel recognizes that FTI has a wealth of experience in providing financial advisory services in restructurings and reorganizations and enjoys an excellent reputation for services it has rendered in large and complex Chapter 11 cases. Mr. Schauer contended that the services of FTI are deemed necessary to enable the Committee to assess and monitor the efforts of the Debtors and their professional advisors to maximize the value of the Debtors' estates. Mr. Schauer told the Court that FTI is not owed any amounts with respect to prepetition fees and expenses. In exchange for its services, FTI will be paid a fixed monthly fee of $200,000, plus reimbursement of actual and necessary expenses. Upon completion of the cases, FTI will receive a completion fee of up to $1,000,000. The Completion Fee will be considered earned and payable upon: -- the confirmation of a plan of reorganization or liquidation; or -- the sale or liquidation of all or substantially all of the Debtors' assets. Michael C. Eisenband, a senior managing director of FTI, assures the Court that his firm does not represent any other entity having an adverse interest in connection with the Chapter 11 cases, and is eligible to represent the Committee under Section 1103(b) of the Bankruptcy Code. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BUFFETS HOLDINGS: Asks Court to Enjoin Workers from Pursuing Case ----------------------------------------------------------------- Buffets Holdings Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to issue a declaratory judgment against James Harris, individually and on behalf of a putative class of approximately 780 individuals employed by certain of the Debtors who worked in salaried restaurant management positions at HomeTown Buffet branded restaurants in California. The HTB Action In November 2004, two former employees of HomeTown Buffet, Inc., Elaine Tiffany and Shannon Whitehead, filed a complaint against HTB in the San Francisco Superior Court on their own behalf, and on behalf of the Putative Class, which matter was subsequently removed to the U.S. District Court for the Northern District of California, Oakland Division. The HTB Complaint asserts causes of action for various provisions of the California Labor Code and California Business and Professional Code. The basis for the allegations in the HTB Complaint is that HTB and OCB Restaurant Company, LLC, misclassified approximately 780 individuals employed by certain of the Debtors who worked in salaried restaurant management positions at HomeTown Buffet branded restaurants in California as "exempt" employees and as such, improperly denied the managers overtime pay in violation of California law. The HTB Complaint further alleges that HTB and OCB failed to provide the managers with required rest and meal periods, failed to provide itemized wage statements, and took illegal deductions from the class members' bonus pay. Ultimately, the parties accepted terms of a mediator's proposed settlement on March 1,2007. On August 1, 2007, Dostart Clapp Gordon & Coveney, LLP -- the Putative Class Counsel -- filed a motion with the District Court seeking preliminary approval of the proposed classwide settlement. The preliminarily approved settlement provided that the Putative Class would be certified for settlement purposes only, and that HTB and OCB would establish a $7,000,000 settlement fund to pay claims of the Putative Class, fees of Putative Class Counsel, litigation expenses, claims administration expenses, and enhancements to the individuals who served as class representatives. The preliminary approved settlement would have released various claims. On September 12, 2007, the District Court preliminarily approved the settlement subject to class approval and scheduled a final "fairness hearing" for January 22, 2008. However, on January 22, each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code, which automatically stayed any further proceedings in the HTB Action. The PAGA Action In March 2008, the Putative Class Counsel filed a complaint in the Superior Court of California, County of San Diego, against Mario O. Lee, Jane L. Binzak, and Michael A. Stout, as well as other unknown individuals who allegedly acted on behalf of HTB. The PAGA Complaint was filed on behalf of Mr. Harris, who asserts causes of action for recovery of civil penalties under Section 2698 of the California Labor Code, on his own behalf and on behalf of the same Putative Class as defined in the HTB Action. Mr. Harris alleges a right to payment from the PAGA Defendants on the basis that HTB allegedly failed to provide overtime pay, meal periods, or rest periods pursuant to the California Labor Code and Wage Order 5-2001 of the California Industrial Welfare Commission. The PAGA Complaint seeks a judgment against each defendant, jointly and severally, in the amount of (i) $50 per employee per member of the Putative Class per pay period for the alleged initial violation, (ii) $100 per member of the Putative Class per pay period for each alleged subsequent violation, (iii) an amount sufficient to recover the alleged underpaid wages, and (iv) reasonable attorney's fees and costs. Article 8 of the Certificate of Incorporation of Buffets Holdings, Inc., the ultimate parent of each of the Debtors, as well as Article 7 of the Bylaws of Buffets Holdings, Inc., provide that officers and directors are indemnified to the fullest extent authorized by Delaware law. Under California law, the Debtors have a mandatory obligation to defend all employees who acted with the actual or apparent authority of the Debtors, even if the action taken was unlawful. This obligation exists unless and until it is ultimately proven that an individual knew his or her action was unlawful. Accordingly, the Debtors have an obligation to reimburse and indemnify any and all PAGA Defendants for any costs incurred or liabilities proven in connection with the PAGA Action. PAGA Action Violates Automatic Stay Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, notes that the allegations purporting to provide the basis for the PAGA Action are similar, if not identical allegations that purported to provide the basis for the HTB Action, and requests a considerable sum from individual defendants who likely could not satisfy any judgment, if proven. The Debtors, hence, ask Judge Walrath to declare that: (a) the filing of the PAGA Action was in violation of the automatic stay pursuant to Section 362(a) of the Bankruptcy Code by exposing the Debtors to potential indemnification claims pursuant to the certificate of incorporation and bylaws of the Debtors, as well as pursuant to state law, as well as threats of vicarious liability in the PAGA Action, thus forcing the Debtors to appear and defend themselves and their employees against the PAGA Action; (b) the filing of the PAGA Action was in violation of the automatic stay by exposing the Debtors to collateral estoppel and imputed admissions that will be raised in the context of the stayed HTB Action, thus forcing the Debtors to appear and defend themselves and their employees against the PAGA Action; and (c) the continued prosecution of the PAGA Action will distract the Debtors' key personnel and frustrate the purposes of the automatic stay, thus causing irreparable harm to the Debtors' ability to reorganize. The Debtors also ask the Court to enjoin the continued prosecution of the PAGA Action and enjoin the Putative Class from commencing any lawsuit or proceeding against the Debtors or the PAGA Defendants based on the facts alleged in the HTB Action and the PAGA Action. Ms. Morgan reminds the Court that Section 362 prohibits the commencement or continuation of any actions against a debtor that were or could have been commenced prior to the banlauptcy filing, or which seek to recover for any claim that arose prior to the commencement of the banlauptcy case, or of any act to obtain possession or exercise control over the property of the debtor's estate. Although the PAGA Action does not name the Debtors as defendants, it is, in fact, the real party in interest to the litigation, Mr. Moragn says. Given the nature of the claims, the Debtors will be forced to appear and defend against the claims in order to protect their own interests, she adds. "The PAGA Action exposes the Debtors to potential indemnification obligations, as well as the threat of vicarious liability, collateral estoppel and imputed admissions," Ms. Morgan tells Judge Walrath. "Thus, failure to appear and defend could have irreparable adverse consequences on the Debtors' estates." Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CALAMOS INVESTMENTS: To Refinance $939MM of Fund's Pref. Stocks --------------------------------------------------------------- Calamos Investments intends to refinance an aggregate of $939 million of the outstanding auction rate preferred securities issued by two of its closed-end funds. The funds are the Calamos Global Total Return Fund and the Calamos Strategic Total Return Fund. "We have worked very hard to structure a solution that makes sense for each fund and all shareholders," John P. Calamos, Sr., the chairman, chief executive officer and co-chief investment officer of Calamos Investments, stated. "We continue to work toward solutions across our entire closed-end fund complex and hope to have additional statements in the weeks to come." Calamos has secured an alternative form of borrowing that will enable, based on current market conditions, CGO to redeem all of its $59 million of outstanding ARPs and CSQ to redeem approximately 81.5% or $880 million of its outstanding ARPs. The aggregate $939 million in refinancing represents approximately 41% of the total auction rate preferred outstanding in the five Calamos closed-end funds. Upon completion of the refinancings, which have been approved by the board of trustees of both CGO and CSQ, the leverage ratio for each of the funds is not expected to materially change and the funds will continue to meet the asset coverage requirements of the Investment Company Act of 1940. Since the amount of refinancing for CSQ is less than the total amount outstanding, this refinancing will take place pro rata by auction series. It is important to note that the Depository Trust Company, the securities' holder of record, will determine how to allocate this partial redemption of shares among each participant broker-dealer account. Each participant broker- dealer, as nominee for underlying beneficial owners or street name shareholders, in turn will determine how redeemed shares are allocated among its beneficial owners. The data will show the shares outstanding per series and the number that the fund will redeem via this refinancing. a) Auction Series: Monday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 b) Auction Series: Tuesday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 c) Auction Series: Wednesday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 d) Auction Series: Thursday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 e) Auction Series: Friday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 f) Auction Series: A (28-Day) Shares Outstanding: 4,000 Percent to be Redeemed: 81.5% Amount to be Redeemed: $81,500,000 g) Auction Series: B (28-Day) Shares Outstanding: 4,000 Percent to be Redeemed: 81.5% Amount to be Redeemed: $81,500,000 CGO and CSQ expect to begin issuing redemption notices in the next several days and redemptions will coincide with the completion of the refinancing transaction. Calamos acknowledges that there is still much work to be done and intends to continue aggressively pursuing refinancing solutions across all funds. With respect to its other three funds, Calamos Convertible Opportunities and Income Fund, Calamos Convertible and High Income Fund and Calamos Global Dynamic Income Fund, not affected by this transaction, the company is working hard on financing solutions and are in advanced stages of negotiations with lenders. "We have over 30 years of experience investing through difficult market environments, but this liquidity crisis has presented unique challenges," said Mr. Calamos. "We continue to monitor developments closely. We maintain a high degree of confidence in the long-term positioning of the Calamos portfolios, and will seek to capitalize on the opportunities that volatile markets often bring." About Calamos Investments Headquartered in Naperville, Illinois, Calamos Investments -- http://www.calamos.com-- is a diversified investment firm offering equity, fixed-income, convertible and alternative investment strategies, among others. The firm serves institutions and individuals via separately managed accounts and a family of open-end and closed-end funds, providing a risk-managed approach to capital appreciation and income-producing strategies. CASAS INVESTMENTS: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Casas Investments, Inc. 5601 East Slauson Avenue Commerce, CA 90040 Bankruptcy Case No.: 08-4857 Chapter 11 Petition Date: April 13, 2008 Court: Central District of California (Los Angeles) Debtor's Counsel: Steven Earl Smith, Esq. 20969 Ventura Blvd. Ste 230 Woodland Hills, CA 91364 Phone: 818-430-7770 E-mail: sesmithesq@aol.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hanmi Bank $672,935 Commercial Loan Dept. secured value 850,000 3660 Wilshire Blvd. Ste. 1050/1034 Los Angeles, CA 90010 CASSANDRA THOMAS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Cassandra Faye Thomas 514-C Woodrow Wilson Jackson, MS 39296 Bankruptcy Case No.: 08-01215 Chapter 11 Petition Date: April 14, 2008 Court: Southern District of Mississippi (Jackson Divisional Office) U.S. Trustee: R. Michael Bolen 100 W. Capitol St. Suite 706 Jackson, MS 39269 Phone: (601) 965-5241 Debtor's Counsel: Paul Mathis, Jr., Esq. 365 West Reed Rd. P.O. Box 936 Greenville, MS 38702 662-332-6660 Fax : 662-332-6668 E-mail: paulmathis@bellsouth.net Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million The Debtor did not file a list of its largest unsecured creditors. CAVTEL HOLDINGS: Operating Challenges Cue Moody's Rating Reviews ---------------------------------------------------------------- Moody's Investors Service placed the ratings of CavTel Holdings, LLC.'s under review for a possible downgrade. The review will address Cavalier's B3 corporate family rating, the B3 rating on the senior secured credit facilities and the Caa1 probability of default rating. The decision to put the ratings under review reflects Cavalier's continuing operational challenges in integrating TalkAmerica Holdings, which Cavalier acquired in December 2006, and the highly competitive environment in Cavalier's markets. The weaker sales to residential and commercial customers, the high churn of residential customers and the related bad debt expenses have contributed to cash flow falling short of the rating agency's previous projections. As a result of the decline in the Company's EBITDA in 2007, Cavalier is on the verge of violating financial covenants under its credit facility. The Company has initiated an amendment process with the bank group, and in Moody's view, the lenders will likely conduct an analysis of the company's business model as a condition of the amendment approval. Moody's also notes that Cavalier continues to realize cost synergies from the integration of Talk America, and may have flexibility in slowing its capital spending to preserve liquidity and generate positive free cash flow in 2008. Moody's will monitor the developments with the bank group. The conclusion of the review will be greately influenced by the outcome of the amendment process, as the Company's fundamental credit profile still exhibits B3 rating characteristics. However, as the history of CLECs restructurings has demonstrated a rapid deterioration of value of companies operating in bankruptcy, in the event that the Company does not come to terms with its lenders on an amendment, Moody's may downgrade Cavalier's ratings by more than one notch. Issuer: CavTel Holdings, LLC On Review for Possible Downgrade: -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently Caa1 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B3 -- $20M Senior Secured Bank Credit Facility Due 2011, Placed on Review for Possible Downgrade, currently B3 -- $415M Senior Secured Bank Credit Facility Due 2012, Placed on Review for Possible Downgrade, currently B3 Outlook Actions: -- Outlook, Changed To Rating Under Review From Stable Moody's review will focus on a) the Company's ability to successfully obtain an amendment from its lenders resetting the covenant levels to give it operating flexibility over the next 12 months, b) Moody's comfort with the company's business plan going forward, including rationalizing its residential and business sales strategies, c) the forward capital spending required to support the residential business, and d) the company's path to restore free cash flow growth. Cavalier is a competitive local exchange carrier based in Richmond, Virginia. C-BASS CBO: Five Classes of Notes Acquire Moody's Rating Cuts ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by C- Bass CBO XIX Ltd.: Class Description: $292,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due October 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $100,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due October 2047 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's has downgraded these notes: Class Description: $42,000,000 B Third Priority Senior Secured Floating Rate Notes Due October 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $23,000,000 Class C Fourth Priority Secured Floating Rate Deferrable Interest Notes Due October 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $10,000,000 Class D Fifth Priority Secured Floating Rate Deferrable Interest Notes Due October 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CDC MORTGAGE: Eight Classes of Certs. Get S&P's Rating Downgrades ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on eight classes of mortgage pass-through certificates from CDC Mortgage Capital Trust's series 2002-HE2 and 2003-HE4. In addition, S&P affirmed its ratings on the remaining classes from these two transactions. The lowered ratings reflect the deterioration of available credit support for these transactions, combined with projected credit support percentages that are insufficient to maintain the ratings at their previous levels. S&P's projected credit support percentages are based on the dollar amount of loans in the delinquency pipeline. The failure of excess interest to cover monthly losses has resulted in the complete erosion of overcollateralization for these transactions. This O/C deficiency caused principal write-downs to both the B-1 (2002-HE2) and B-3 (2003-HE4) classes, which prompted us to downgrade them to 'D'. As of the March 25, 2008, remittance date, cumulative losses for series 2002-HE2 were 3.49% of the original pool balance. Total delinquencies were 45.97% of the current pool balance and severe delinquencies (90-plus days, foreclosures, and REOs) were 29.88% of the current pool balance. Cumulative losses for series 2003-HE4 were 1.90% of the original pool balance. Total and severe delinquencies were 26.40% and 18.34% of the current pool balance, respectively. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the ratings at their current levels. Credit support for these classes averaged 72.5% of the current pool balance. In comparison, the ratio of current credit enhancement to original enhancements averaged 3.38x. A combination of subordination, excess interest, and O/C (prior to its complete erosion) provide credit enhancement for these transactions. The collateral supporting these series consists of a subprime pool of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered CDC Mortgage Capital Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-HE2 M-1 BB- AA 2002-HE2 M-2 CCC A 2002-HE2 B-1 D CCC 2003-HE4 M-2 BB A 2003-HE4 M-3 B A- 2003-HE4 B-1 CCC BB 2003-HE4 B-2 CCC B 2003-HE4 B-3 D CCC Ratings Affirmed CDC Mortgage Capital Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2003-HE4 A-3 AAA 2003-HE4 M-1 AA CENTRAL ILLINOIS: Has Until August 31 To File Chapter 11 Plan ------------------------------------------------------------- The Hon. Thomas L. Perkins of the United States Bankruptcy Court for the Central District of Illinois approved a request by the Central Illinois Energy LLC to further extend the exclusive periods to file a Chapter 11 plan and solicit acceptances of that plan until Aug. 31, 2008. The Debtor say it needs more time because it is unable to prepare and file a Chapter 11 plan of reorganization. In its motion, the Debtor asked the Court to extend the plan filing period until Sept. 8, 2008, and solicit acceptances of that plan until July 10, 2008. About Central Illinois Energy Based in Canton, Illinois, Central Illinois Energy LLC -- http://www.centralillinoisenergy.com/-- operates a 37-million gallons-per-year ethanol plant. The Debtor filed for Chapter 11 protection on Dec. 13, 2007 (Bankr. C.D. Ill. Case No 07-82817). Barry M. Barash, Esq., at Barash & Everett, LLC, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 10 has not appointed creditors to serve on an Official Committee of Unsecured Creditors in this case. When the Debtor filed for protection from its creditors, it listed assets between $1 million to $100 million, and more than $100 million in liabilities. CENTRAL ILLINOIS: Court Okays $80MM Sale of Assets to CIE Energy ---------------------------------------------------------------- The Hon. Thomas L. Perkins of the United States Bankruptcy Court for the Central District of Illinois approved the sale of substantially all assets of Central Illinois Energy LLC to New CIE Energy Opco LLC for $80,000,000 credited bid under an asset purchase agreement dated April 23, 2008. The credited bid is comprised of a $5,500,000 postpetition financing and a portion of the $87,500,000 prepetition financing from Credit Suisse, Cayman Islands Branch, as administrative agent, and other financial institutions. Under the agreement, New CIE Energy will assume all executory contracts for all mechanics liens of at least $25,000,000, Ethanol Producer Magazine reports. New CIE Energy will complete the unfinished ethanol plant in Canton, Illinois to cost at most $30,000,000, as part of the deal, report says. Barry M. Barash, Esq., at Barash & Everett, LLC in Galesburg, Illinois, say the Debtor is presently evaluating any fraudulent conveyances during the Chapter 11 case, which is expected to finish in the next succeeding weeks. Mr. Barash says in court documents the general unsecured creditors may get the first $3,000,000 of any distribution; however, provided, all valid claims of the prepetition secured lenders are paid in full. On the closing date, New CIE Energy is expected to provide, among other things, 100% in the amounts transferred from the 401(k) plan to employees of the Debtor affected by the transaction. The sale is expected to complete by April 30, 2008. A full-text copy of the Asset Purchase Agreement dated April 23, 2008, is available for free at: http://ResearchArchives.com/t/s?2b3c About Central Illinois Energy Based in Canton, Illinois, Central Illinois Energy LLC -- http://www.centralillinoisenergy.com/-- operates a 37-million gallons-per-year ethanol plant. The Debtor filed for Chapter 11 protection on Dec. 13, 2007 (Bankr. C.D. Ill. Case No 07-82817). Barry M. Barash, Esq., at Barash & Everett, LLC, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 10 has not appointed creditors to serve on an Official Committee of Unsecured Creditors in this case. When the Debtor filed for protection from its creditors, it listed assets between $1 million to $100 million, and more than $100 million in liabilities. CI WORLDWIDE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: C.I. Worldwide, LLC 5017 N. Coolidge Ave. Tampa, FL 33614 Bankruptcy Case No.: 08-05575 Type of Business: The Debtor delivers wood molding products from South American and domestic mills. See http://www.constructionimports.com/ Chapter 11 Petition Date: April 22, 2008 Court: Middle District of Florida (Tampa) Debtor's Counsel: Michael C. Markham, Esq. E-mail: mikem@jpfirm.com Johnson Pope Bokor Ruppel & Burns, LLP P.O. Box 1368 Clearwater, FL 33757 Tel: (727) 461-1818 Fax: (727) 443-6548 http://www.jpfirm.com/ Estimated Assets: Unknown Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. CINCINNATI BELL: Dec. 31 Balance Sheet Upside-Down by $667 Million ------------------------------------------------------------------ Cincinnati Bell Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $2.020 billion in total assets and $2.687 billion in total liabilities, resulting in a $667 million total stockholders' deficit. The company reported net income of $700,000 for the fourth quarter ended Dec. 31, 2007, compared with net income of $22.8 million in the same period of 2006. Excluding restructuring charges, net income was $23 million. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) equaled $118 million, up $6 million, or 6% from a year ago. Revenue was $360 million, an increase of $31 million or 10% from the prior year quarter. Operating income was $41 million and included a pre-tax restructuring charge of $38 million related to the company's previously announced restructuring plan. "2007 was an outstanding year for Cincinnati Bell. Investments in our Wireless and Technology Solutions segments drove significant rates of revenue and operating income growth," said Jack Cassidy, president and chief executive officer of Cincinnati Bell Inc. "Despite the intense competition in our market, consistent execution of our strategy has produced the ninth consecutive quarter of revenue growth and sixth consecutive quarter of combined Adjusted EBITDA growth in our three operating segments," he said. Full-Year Results Revenue in 2007 totaled $1.349 billion, an increase of $79 million or 6 percent from 2006. Operating income for the year was $282 million with net income of $73 million. Net income excluding special items was $96 million, up $7 million from 2006 also excluding special items. Adjusted EBITDA equaled $473 million representing a year-over-year increase of 3%. Financial and Operations Overview "Combined Wireless and Technology Solutions revenue and EBITDA growth continue to offset Wireline profit erosion caused by consumer access line loss," said Brian Ross, chief financial officer of Cincinnati Bell Inc. "As a result, cash flow remains strong, our balance sheet is solid and our operations are well- positioned for 2008." Quarterly free cash flow was $10 million, which included a $22 million data center customer prepayment, with which the company accelerated $20 million of future mandatory pension contributions. Free cash flow for 2007 equaled $59 million. Capital expenditures were $81 million in the quarter and $234 million, or 17% of revenue, for the year. Year-end net debt totaled $1.98 billion, down $27 million from the end of 2006. Liquidity and Capital Resources As of Dec. 31, 2007, the company held $26.1 million in cash and cash equivalents, which is a $53.3 million decrease compared to Dec. 31, 2006. At Dec. 31, 2006, the company held excess cash to make significant payments of capital expenditures in early 2007. The company's primary sources of cash in 2008 will be cash generated by operations and borrowings from the revolving credit facility under which the company had $167.9 million of availability at Dec. 31, 2007. The company's total indebtedness was $2.009 billion at Dec. 31, 2007 compared to $2.073 billion at Dec. 31, 2006. As of Dec. 31, 2007, the company had $55.0 million of outstanding borrowings under its revolving credit facility and had outstanding letters of credit totaling $27.1 million, leaving $167.9 million in additional borrowing availability under its $250 million revolving credit facility. * * * Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?2b1a About Cincinnati Bell Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. CITIUS I: Moody's Reviews 'Ba1' Rating on Two $1.8 Bil. Notes ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Citius I Funding, Ltd.: Class Description: Up to $1,800,000,000 Class A LT Notes -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: Up to $1,800,000,000 Class A ST Notes -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $70,000,000 Class A-1 Secured Floating Rate Notes, due 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $25,000,000 Class A-2 Secured Floating Rate Notes, due 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CITIUS II: Poor Credit Quality Prompts Moody's Rating Downgrades ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Citius II Funding, Ltd.: Class Description: $1,800,000,000 aggregate Principal Component of commercial paper notes -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $95,000,000 Class A Secured Floating Rate Notes Due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: $50,000,000 Class B Secured Floating Rate Notes Due 2047 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CLINICAL PET: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Clinical PET of Ocala, LLC dba Radiological Institute of the Villages 3143 S.W. 32nd Avenue, Suite 100 Ocala, FL 34474 Bankruptcy Case No.: 08-02214 Type of Business: The Debtor offers positron emission tomography imaging services, computed tomography services and women's imaging services. See http://www.www.clinicalpet.com/ Chapter 11 Petition Date: April 22, 2008 Court: Middle District of Florida (Jacksonville) Debtor's Counsel: Robert Altman, Esq. E-mail: robertaltman@bellsouth.net AFD 5256 Silver Lake Dr. Palatka, FL 32177-8524 Tel: (386) 325-4691 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ GE Healthcare Financial $950,000 Services 20225 Watertower Blvd., Ste. 100 Brookfield, WI 53045 Banc of America $179,492 Leasing & Capital, LLC Attn: Foley & Lardiner, LLP 111 North Orange Ave., Ste. 1800 Orlando, FL 32801 Regions Bank $97,019 P.O. Box 277293 Atlanta, GA 30384-7293 Petnet Pharmaceuticals $60,600 James K. Leeward Rentals $39,096 Marlin Leasing Corp. $35,000 Crippen Trice & Hornby, LLP $32,727 Deltacom $27,319 Discover Card Services $19,676 Medspan, LLC $12,128 Star Banner $10,692 Office Depot $10,546 Sanders Medical Products, Inc. $10,500 PSS-North Florida $8,057 The Lamar Cos. $8,050 Lossing Insurance $7,606 Ocala Electric Utility $6,244 CNMC $6,200 Viatronix $5,325 Siemens Medical Solutions, $4,611 USA, Inc. CMP SUSQUEHANNA: S&P Changes Outlook to Stable, Holds 'B-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Atlanta, Georgia-based CMP Susquehanna Radio Holdings Corp. to stable from positive. "The action reflects our expectation that leverage will remain very high over the intermediate term, despite the company's realization of significant cost savings and EBITDA margin expansion in 2007," explained Standard & Poor's credit analyst Jeanne Mathewson. S&P believes the majority of cost savings have been achieved and further EBITDA margin expansion will be more challenging in 2008, especially in light of economic weakness and unfavorable secular trends in radio advertising demand. S&P also affirmed the ratings, including the 'B-' corporate credit rating. The rating on CMP Susquehanna reflects its very high leverage, unfavorable secular trends in radio advertising demand, advertising cyclicality, competition from much larger rivals, and a concentration of revenue and free cash flow in a few key markets. The company's portfolio of large-market radio stations, radio broadcasting's good margin and discretionary cash flow potential, and largely resilient station asset values partially offset these factors. CONGOLEUM CORP: Ernst & Young Raises Substantial Doubt ------------------------------------------------------ Congoleum Corporation has filed its 2007 annual report with the U.S. Securities and Exchange Commission. In that report, the company's management said there is "substantial doubt about the company's ability to continue as a going concern unless it obtains relief from its substantial asbestos liabilities through a successful reorganization under Chapter 11 of the Bankruptcy Code." Moreover, Ernst & Young LLP, the company's auditor, raised substantial doubt about the company's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. Ernst & Young related that the company "has been and continues to be named in a significant number of lawsuits stemming primarily from the company's manufacture of asbestos-containing products. The company has recorded significant charges to earnings to reflect its estimate of costs associated with this litigation. On Dec. 31, 2003, Congoleum filed a voluntary petition with the U.S. Bankruptcy Court for the District of New Jersey (Case No. 03- 51524) seeking relief under Chapter 11 of the United States Bankruptcy Code, as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago." For the year ended Dec. 31, 2007, the company posted a $691,000 net loss on $204,262,000 of net sales compared with $679,000 of net income on $219,474 of net sales in 2006. At Dec. 31, 2007, the company's balance sheet showed $172,705,000 in total assets and $219,161,000 in total liabilities, resulting in a $46,456,000 stockholders' deficit. The company's accumulated deficit at Dec. 31, 2007, stood at $46,456,000. Update on Bankruptcy On Feb. 5, 2008, R. Scott Williams, Esq., the Court-appointed Future Claimants' Representative, the Asbestos Claimants' Committee, the Bondholders' Committee and Congoleum jointly filed the Joint Plan. The Bankruptcy Court approved the disclosure statement for the Joint Plan in February 2008, and a confirmation hearing is scheduled for June 26, 2008. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b19 About Congoleum Corp. Based in Mercerville, N.J., Congoleum Corporation (AMEX:CGM) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., of Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. CONTINENTAL AIRLINES: Chooses Not to Merge with United Air Lines ---------------------------------------------------------------- Continental Airlines Inc.'s Chairman and Chief Executive Officer Larry Kellner and President Jeff Smisek disclosed to more than 45,000 employees that the company's Board of Directors unanimously supported the management's recommendation that, in the current industry environment, the best course for Continental is not to merge with another airline at this time. As reported in the Troubled Company Reporter on April 21, 2008, two people briefed on the matter said that Continental Airlines and UAL Corp.'s unit United Airlines Inc. have already laid most of the groundwork for a merger, and are prepared to move quickly to wrap up a deal if ever the Delta Air Lines Inc. and Northwest Airlines Corp. merger pushes through, says Reuters. A person familiar with the talks also revealed that merging the labor unions of United and Continental is not likely to present a problem since extensive discussions have already been held between the two sides, Ms. Johnsson reports. Chris Walsh of the Rocky Mountain News notes that experts say a merger with Continental is the best option for United, as the two have complementary strengths, particularly when it comes to their route networks. According to the two executives, the Board very carefully considered all the risks and benefits of a merger with another airline, and determined that the risks of a merger at this time outweigh the potential rewards, as compared to Continental's prospects on a standalone basis. The management will, however, continue to review potential alliances and its membership in SkyTeam. Continental is considering alternatives to SkyTeam as its carefully evaluates which major global alliance will be best for Continental over the long term. While some would prefer to see Continental pursue a merger, the company strongly believes it has made the right decision -- one that is in the best interests of its stockholders, co-workers, customers and the communities it serves. Messrs. Kellner and Smisek relate that every U.S. carrier, including Continental, is under enormous pressure from record high fuel prices, a slowing U.S. economy and a weak dollar. In today's harsh environment, the company must continue to adjust its business model to ensure it to successfully navigate through these difficult times, so that in the future it can once again grow and prosper. In the meantime, Continental must all continue to concentrate on what it does so well: delivering clean, safe and reliable air transportation every day. Even in these tough times, Messrs. Kellner and Smisek said, Continental has great strengths. It has an enviable position in the New York market, a powerful hub in Houston, and hubs in Cleveland and Guam. Continental has a solid trans-Atlantic route network, which has recently been enhanced by our access to London Heathrow. It also has a great Latin American network and a growing portfolio of routes to India and Asia. Continental flies the youngest, most fuel-efficient fleet and have the best new aircraft order book among the major network carriers. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,900 daily departures throughout the Americas, Europe and Asia, serving 144 domestic and 139 international destinations. More than 500 additional points are served via SkyTeam alliance airlines. With more than 45,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year. * * * As reported in the Troubled Company Reporter on April 22, 2008, Standard & Poor's Ratings Services revised its rating outlook on Continental Airlines Inc. (B/Negative/B-3) to negative from stable. S&P also placed its ratings on selected enhanced equipment trust certificates that are secured by regional jets on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Dec. 27, 2007, Fitch Ratings affirmed Continental Airlines 'B-' issuer default rating with a stable outlook. COUNTRYWIDE FINANCIAL: Mozilo's Pay Plummeted Nearly 80% in 2007 ---------------------------------------------------------------- Angelo Mozilo, chief executive of Countrywide Financial Corp., had his compensation slashed by 79% to $10.8 million in 2007, according to the company's amended 10-K filing with the U.S. Securities and Exchange Commission. The SEC filing reflected the officers' total compensation for 2006 and 2007, inclusive of, among others, stock and option awards, and compensation based on an executive incentive plan: 2006 2007 % Cut ----------- ----------- ----- Angelo R. Mozilo $51,755,223 $10,812,297 79% Eric P. Sieracki $2,606,045 $2,251,288 14% David Sambol $11,973,379 $10,363,566 13% Carlos M. Garcia $4,846,391 $2,415,607 50% Andrew Gissinger III $2,120,070 $4,846,391 -- Mr. Mozilo's option awards had the most significant decrease, from $26.6 million in 2006 to $3.4 million in 2007. Because Mr. Mozilo was eligible for retirement in fiscal 2006, his fiscal 2006 equity awards would have vested pursuant to his previous employment agreement had he retired during fiscal 2006. As a result, the amount reported for fiscal 2006 reflects the full grant date fair value of Mr. Mozilo's equity compensation in fiscal 2006. According to the company, Mr. Mozilo's fiscal 2007 equity awards would not have vested upon his retirement pursuant to his 2007 employment agreement and accordingly, the amounts reported for fiscal 2007 reflect only a portion of the grant date fair value of Mr. Mozilo's equity compensation. Mr. Mozilo's $20.4 million non-equity incentive plan compensation in 2006 was entirely scrapped, pursuant to his employment agreement. As reported in the Troubled Company Reporter on Jan. 30, 2008, Mr. Mozilo gave up his severance pay of approximately $37.5 million. He also forfeited various other benefits, and his annual compensation of $400,000, pursuant to an agreement to serve the company as a consultant after his retirement. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. CREDIT DEFAULT: Moody's Junks Ratings on 12 Credit Default Swaps ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings on these Credit Default Swaps: Class Description: Portfolio Credit Default Swap (Markov Chain I A) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain I B) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain I C) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain II A) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain II B) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain II C) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain III A) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain III B) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain III C) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain IV A) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain IV B) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: Mezzanine Portfolio Credit Default Swap (Markov Chain IV C) $25,000,000 Initial Tranche Notional Amount Credit Default Swap due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CREST 2000-1: Moody's Downgrades Rating on $21 Mil. Notes to 'B2' ----------------------------------------------------------------- Moody's Investors Service confirmed the ratings on these notes issued by Crest 2000-1, Ltd.: Class Description: $50,000,000 Class B Second Priority Fixed Rate Term Notes, Due 2036 -- Prior Rating: Aa1, on review for possible upgrade -- Current Rating: Aa1 Class Description: $22,500,000 Class C Third Priority Fixed Rate Term Notes, Due 2036 -- Prior Rating: A3, on review for possible upgrade -- Current Rating: A3 Class Description: $21,000,000 Class D Fourth Priority Fixed Rate Term Notes, Due 2036 -- Prior Rating: B2, on review for possible upgrade -- Current Rating: B2 According to Moody's, upon further review, the expected losses posed to note holders are consistent with the current ratings. CRYSTAL RIVER: Six Classes of Notes Get Fitch's Rating Downgrades ----------------------------------------------------------------- Fitch Ratings downgraded seven classes and affirmed three classes of notes issued by Crystal River Resecuritization CDO 2006-1, Ltd. or LLC (Crystal River 2006): -- $222.5 million class A affirmed at 'AAA'; -- $35.1 million class B affirmed at 'AA'; -- $17.6 million class C affirmed at 'A+'; -- $19.5 million class D downgraded to 'BBB' from 'A-'; -- $10.7 million class E downgraded to 'BB' from 'BBB+'; -- $9.3 million class F downgraded to 'BB' from 'BBB'; -- $4.4 million class G downgraded to 'B' from 'BBB-'; -- $5.9 million class H downgraded to 'B' from 'BBB-'; -- $14.6 million class J downgraded to 'B' from 'BB'; -- $19.5 million class K downgraded to 'B-' from 'B'. Additionally, Fitch has removed all classes from Rating Watch Negative, where they were originally placed on Jan. 16, 2008. Fitch does not rate the preferred shares. Crystal River 2006 is a static commercial real estate collateralized debt obligation that closed on Jan. 12, 2007. Crystal River 2006 is backed by commercial mortgage backed securities B-pieces and mezzanine bonds. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. Hyperion Brookfield Crystal River Capital Advisors selected the initial collateral and serves as the collateral administrator. The collateral for this CDO primarily consists of mezzanine and high-yielding junior bonds of CMBS transactions. The underlying assets of the CMBS bonds, by their nature, face similar exposures to losses from any downturn in the commercial real estate market as well as refinancing risks at the assets' maturity dates. As a mitigant, however, the underlying CMBS transactions do have significant geographic, property type and tenant diversity. While Fitch continues to believe investment grade CMBS will perform well even in a heightened stress environment, the risks facing first loss and junior rated bonds within the capital structure of CMBS transactions have increased with expectations of a rise in commercial real estate defaults from current low levels. Even a relatively modest increase in commercial real estate losses could be material for these portfolios. In reviewing CRE CDOs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches. Additional ratings considerations include seasoning of underlying collateral, obligor diversity, actual bond performance and projected losses. The specific credit characteristics that are factored into Fitch's rating review are discussed below. Crystal River is collateralized by all or a portion of 71 classes of fixed-rate CMBS in 32 separate underlying transactions. All performance and collateral information is based on the March 2008 trustee report. The pool's obligor diversity is considered average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 2002 to 2007 (an average of two years of seasoning). Approximately 9.6% of the collateral currently is rated below 'B-' or not rated, and therefore, is more susceptible to losses in the near-term. While a significant portion of the collateral is below investment grade (44%), the majority is investment grade (56%), including 55.9% in the 'BBB' category. Crystal River 2006 holds 25% in the 'BB' category and 9.4% in the 'B' category. Although the collateral has realized no losses to date, losses are projected with $294.2 million of the loans in the underlying CMBS transactions currently 60 days or more delinquent according to the current trustee report. Some of the bonds do have a significant amount of subordination that can withstand future losses in the short term. Fitch conducted cash flow modeling to test the transaction's structure under various default and interest rate scenarios. The ratings on the class A and B notes address the timely payment of interest and ultimate repayment of principal. The ratings on classes C, D, E, F, G, H, J and K address the ultimate payment of interest and ultimate repayment of principal. CST INDUSTRIES: Moody's Keeps 'B1' Rating on Upsized $135MM Loan ---------------------------------------------------------------- Moody's Investors Service affirmed the B1 rating on CST Industries, Inc.'s recently upsized $135 million senior secured term loan. Simultaneously, Moody's affirmed CST's B2 Corporate Family Rating and B1 senior secured credit facility rating. The rating outlook remains stable. Proceeds from the add-on to the term loan will finance a $33 million acquisition. The B2 CFR affirmation reflects a business whose overall profile can accommodate a modestly sized leveraging transaction. Although the transaction will result in leverage rising from 4.6x to the 5x range on a proforma Dec. 31, 2007 basis, the acquisition will be complementary to CST's existing business. The ratings are supported by CST's position as a leading manufacturer in the small but fast-growing sub-segment of the $2.5 billion US factory-fabricated tank market, its broad customer base and diverse end markets, and its success in having achieved most of its revenue and EBITDA targets. These strengths are offset by the risks associated with a small overall size, limited cash flows, and high leverage, which provides the company less flexibility to navigate challenging conditions. Due to the potential lags in CST's pass-through of rising steel costs, Moody's projects that margins will likely decline in the near-term and there could be heightened working capital needs in the coming quarters. The stable outlook incorporates an expectation that CST's leverage will trend to below 5x over the next year and that the company will remain free cash flow positive despite escalating steel prices. The debt-funded acquisition has reduced the company's financial flexibility at the B2 rating. The ratings could face downward pressure if CST's adjusted leverage rises above 6.0x or if the company generates negative free cash flow. -- $135 million Senior Secured First Lien Term Loan, Affirmed B1 (changed to LGD 3, 36% from LGD 3, 34%) -- $20 million Senior Secured Revolving Credit Facility, Affirmed B1 (changed to LGD 3, 36% from LGD 3, 34%) -- Affirmed B2 Corporate Family Rating -- Stable ratings outlook remains Moody's last published on CST on Aug. 3, 2006 when the ratings were first assigned. CST Industries, headquartered in Kansas City, Kansas, is a global manufacturer and erector of pre-engineered factory-coated storage tanks and geodesic domes. End markets include municipal water, ag feed, waste, wastewater, oilfield, alternative energy, plastics, chemicals and other industrial storage systems. CWABS TRUST: S&P Downgrades Ratings on 15 Mortgage Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 15 classes of mortgage pass-through certificates from one CWABS Trust and four Alternative Loan Trust transactions issued in 2005. Concurrently, S&P affirmed its ratings on 97 classes from the same transactions. The downgrades reflect a rise in severe delinquencies relative to credit support. Severe delinquencies (90-plus days, foreclosures, and REOs) for rated residential mortgage-backed securities backed by Alternative-A loans increased 16.86% between January 2008 and March 2008. The affected deals experienced a similar rise in severe delinquencies. The affirmations reflect current credit support percentages that are sufficient to support the ratings at their current levels and protect them from actual and projected losses. The collateral for these deals consists of Alt-A, fixed- and adjustable-rate mortgage loans secured by one- to four-family residential properties. Ratings Lowered Alternative Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2005-27 B-1 A AA- 2005-27 B-2 BB BBB+ 2005-27 B-3 B BB+ 2005-27 B-4 CCC B+ 2005-31 1-B-3 B BB 2005-31 1-B-4 CCC B 2005-76 M-7 BB BBB- 2005-76 M-8 B BB+ 2005-81 M-5 BBB A- 2005-81 B-1 B+ BBB 2005-81 B-2 B BB 2005-81 B-3 B- B CWABS Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2005-HYB9 B-1 BBB+ A 2005-HYB9 B-2 B+ BB 2005-HYB9 B-3 CCC B Ratings Affirmed Alternative Loan Trust Transaction Class Rating ----------- ----- ------ 2005-27 1-A-1 AAA 2005-27 1-A-10 AAA 2005-27 1-A-2 AAA 2005-27 1-A-3 AAA 2005-27 1-A-4 AAA 2005-27 1-A-5 AAA 2005-27 1-A-6 AAA 2005-27 1-A-7 AAA 2005-27 1-A-8 AAA 2005-27 1-A-9 AAA 2005-27 1-X-1 AAA 2005-27 1-X-2 AAA 2005-27 1-X-3 AAA 2005-27 2-A-1 AAA 2005-27 2-A-2 AAA 2005-27 2-A-3 AAA 2005-27 2-A-4 AAA 2005-27 2-A-5 AAA 2005-27 2-A-6 AAA 2005-27 2-X-1 AAA 2005-27 2-X-2 AAA 2005-27 3-A-1 AAA 2005-27 3-A-2 AAA 2005-27 3-A-3 AAA 2005-27 3-A-4 AAA 2005-27 3-A-5 AAA 2005-27 3-X-1 AAA 2005-27 3-X-2 AAA 2005-27 3-X-3 AAA 2005-27 A-R AAA 2005-27 M-X AAA 2005-27 M AA+ 2005-31 1-A-1 AAA 2005-31 1-A-2 AAA 2005-31 1-A-3 AAA 2005-31 1-M-X AAA 2005-31 1-X AAA 2005-31 2-A-1 AAA 2005-31 2-A-2 AAA 2005-31 2-A-3 AAA 2005-31 2-M-X AAA 2005-31 2X AAA 2005-31 A-R AAA 2005-31 1-M AA+ 2005-31 2-M AA+ 2005-31 1-B-1 AA 2005-31 2-B-1 AA 2005-31 1-B-2 A 2005-31 2-B-2 A- 2005-31 2-B-3 BB 2005-31 2-B-4 B 2005-76 1-A-1 AAA 2005-76 1-A-2 AAA 2005-76 2-A-1 AAA 2005-76 2-A-2 AAA 2005-76 2-A-3 AAA 2005-76 2-A-4 AAA 2005-76 3-A-1 AAA 2005-76 3-A-2 AAA 2005-76 3-A-3 AAA 2005-76 A-R AAA 2005-76 M-1 AA+ 2005-76 M-2 AA 2005-76 M-3 A+ 2005-76 M-4 A 2005-76 M-5 A 2005-76 M-6 BBB+ 2005-81 A-1 AAA 2005-81 A-2 AAA 2005-81 A-3 AAA 2005-81 A-4 AAA 2005-81 A-R AAA 2005-81 X-1 AAA 2005-81 X-2 AAA 2005-81 M-1 AA+ 2005-81 M-2 AA 2005-81 M-3 AA- 2005-81 M-4 A+ CWABS Trust Transaction Class Rating ----------- ----- ------ 2005-HYB9 1-A-1 AAA 2005-HYB9 1-A-2 AAA 2005-HYB9 2-A-1 AAA 2005-HYB9 2-A-2 AAA 2005-HYB9 3-A-1-A AAA 2005-HYB9 3-A-1-B AAA 2005-HYB9 3-A-2-A AAA 2005-HYB9 3-A-2-B AAA 2005-HYB9 4-A-1 AAA 2005-HYB9 4-A-2 AAA 2005-HYB9 5-A-1 AAA 2005-HYB9 5-A-2 AAA 2005-HYB9 M-1 AA+ 2005-HYB9 1-IO AA 2005-HYB9 2-IO AA 2005-HYB9 3-IO AA 2005-HYB9 4-IO AA 2005-HYB9 5-IO AA 2005-HYB9 M-2 AA DALLAGLIO CDO: Moody's Reviews 'Ba2' Rating on $22 Mil. Notes ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Dallaglio CDO 2005-1 Ltd: Class Description: $25,000,000 Class B Floating Rate Notes -- Prior Rating: Aaa -- Current Rating: Aa2, on review for possible downgrade Class Description: $53,000,000 Class C Floating Rate Notes -- Prior Rating: Aa2 -- Current Rating: A3, on review for possible downgrade Class Description: $22,000,000 Class D Floating Rate Notes -- Prior Rating: A2 -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying reference pool, which consists primarily of structured finance securities. DALLAGLIO CDO: Moody's Downgrades Three Classes of Floating Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Dallaglio CDO 2005-2 Ltd.: Class Description: $19,500,000 Class B Floating Rate Notes -- Prior Rating: Aa1 -- Current Rating: Baa3, on review for possible downgrade Class Description: $45,500,000 Class C Floating Rate Notes -- Prior Rating: Aa3 -- Current Rating: Ba2, on review for possible downgrade Class Description: $35,000,000 Class D Floating Rate Notes -- Prior Rating: A3 -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying reference pool, which consists primarily of structured finance securities. DEN-MARK CONSTRUCTION: Case Summary & 68 Largest Unsec. Creditors ----------------------------------------------------------------- Lead Debtor: Den-Mark Construction, Inc. 416 US Hwy. 1, Ste. B Youngsville, NC 27596 Bankruptcy Case No.: 08-02764 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Den-Mark Homes SC, Inc. 08-02766 Marcus Edwards Development, LLC 08-02768 M&D Development, LLC 08-02769 Type of Business: The Debtor constructs single-family houses. Chapter 11 Petition Date: April 24, 2008 Court: Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtors' Counsel: Trawick H. Stubbs, Jr., Esq. Email: efile@stubbsperdue.com Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 http://www.stubbsperdue.com/ Estimated Assets Estimated Debts ---------------- --------------- Den-Mark Construction, Inc. $10 million to $10 million to $50 million $50 million Den-Mark Homes SC, Inc. $10 million to $1 million to $50 million $10 million Marcus Edwards Development, $10 million to $10 million to LLC $50 million $50 million M&D Development, LLC $1 million to $10 million to $10 million $50 million A. Den-Mark Construction, Inc's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Stock Building Supply $943,416 Attn: Manager or Agent P.O. Box 277291 Atlanta, GA 30384-7291 Rugworks, LLC $152,279 Attn: Manager or Agent 5325 Lumley Rd. Durham, NC 27703 Brock Cabinets $129,331 Attn: Manager or Agent 2218 Wingate Road Fayetteville, NC 28304 Casey Services, Inc. $100,898 Carolina Sunrock, LLC $66,519 Environmental Prop. Svc. $55,400 Green & Wooten Insurance $54,226 Howard Perry & Walston $51,107 Lights Unlimited, Inc. $41,556 Smith Insulation, Inc. $39,926 Willow Tree Landscaping $37,533 Manor House Carpet $34,362 Carpet Gang $30,016 Tricity Insulation $29,017 Youngsville Management Co. $23,703 Taylor's Nursery $23,633 Cabinet Connection of N.C. $23,243 Cawthorne, Moss et al $23,189 Southeast Fireplace, Inc. $21,445 Color Landscapes, M. Dicky $20,930 B. Den-Mark Homes SC, Inc's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Brock Cabinets $138,036 Attn: Manager or Agent 2218 Wingate Road Fayetteville, NC 28304 Horry County Tax Office $115,361 Attn: Managing Agent P.O. Box 1828 Conway, SC 29528 Carolina Ground Works, LLC $22,833 Attn: Manager or Agent P.O. Box 976 Conway, SC 29528 Rugworks Coastal, LLC $22,447 IPE Construction, LLC $21,526 Myrtle Beach Bldg Supply $14,947 Prime Time Construction $14,103 Bri-Darra Landscaping $11,750 Exquisite Siding, Inc. $10,859 Tile Roofing, Inc. $10,660 Professional Concrete, Inc. $9,767 Rhino Industries, LLC $9,115 Atlantic Bldg. Comp. & Svcs. $9,035 Omni Services of SC, Inc. $6,240 J&M Plumbing, Inc. $5,683 Ferguson Enterprises, Inc. $5,402 East Coast Constr Cleanup $3,750 Bank of America $2,254 Sentry Films $2,035 Building Prep Services $1,895 C. Marcus Edwards Development, LLC's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Cawthorne, Moss et al $101,902 Attn: Manager or Agent P.O. Box 1253 Wake Forest, NC 27588 HG Reynolds Company, Inc. $48,948 Attn: Manager or Agent P.O. Box 209 Henderson, NC 27536 Adam's Grading & Hauling $35,774 Attn: Manager or Agent 1178 Old Drug Store Rd Garner, NC 27529 CrowleyCrisp & Assoc., Inc. $31,639 Terratech Engineers Inc. $29,316 Warren Perry Narron $19,954 New Home Guide $12,475 Central Carolina Soil $12,246 EcoScience Corp. $10,211 Coates Grading & Hauling $10,000 Custom Signs, Inc. $8,777 Ramey Kemp & Assoc Inc. $7,134 Network Communications, Inc. $6,770 Jerry Turner & Assoc., Inc. $5,599 Howard Perry & Walston $4,595 Coldwell Banker Advantage $3,750 Gemini Youngsville Crossing $3,500 Triangle Services Group $2,555 Fonville Morisey & Barefoot $2,340 Baxley's Landscape Co. $1,500 D. M&D Development, LLC's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Horry County Tax Office $26,134 Attn: Manager or Agent P.O. Box 1828 Conway, SC 29528 South Strand Landscaping $16,037 Attn: Manager or Agent 41 Beard Lane Pawleys Island, SC 29585 Bri-Darra Landscaping $14,475 Attn: Manager or Agent P.O. Box 1733 Conway, SC 29528 Carolina Mailboxes, Inc. $10,598 DDC Engineers, Inc. $10,423 SC Dept. of Revenue Form SC1065 for year $9,150 ended December 31, 2007 RWF Construction, LLC $8,500 Land Engineering Services $300 DIAMOND GLASS: Court Approves Guggenheim's $7 Mil. DIP Financing ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved, in a final basis, the request of Diamond Glass Inc. and its debtor-affiliate DT Subsidiary Corp. to borrow $7 million in new debtor-in-possession financing from Guggenheim Corporate Funding LLC, as agent for the senior secured lenders. The financing is inclusive of the $3.1 million the Debtors were authorized to borrow on April 2, 2008. The Court also approved the timetable proposed by the Debtors on a going concern sale process, leading to an auction to be conducted on June 5, 2008. These rulings followed negotiations which led to a settlement of all objections brought by the Official Committee of Unsecured Creditors. The Debtors' bankruptcy counsel Michael P. Richman of Foley & Lardner LLP, informed the Court that more than 40 different parties had signed the paperwork and received preliminary financial and other information, and expressed the hope that bidding would be lively and competitive. The Court also gave final approval to all the motions to which interim approval had previously been granted on April 2, 2008, including motions to pay employee benefits, prepetition wages, critical vendors, and otherwise to continue to operate fully in the ordinary course of business. "We are extremely pleased to have agreement with our Creditors' Committee to support our Company and our sale process. We have done as well as we could possibly have hoped in assuring the best chances for the company's long-term survival," said President Bill Cogswell. Headquartered in Kingston, Pennsylvania, Diamond Glass Inc. -- http://www.diamongtriumph.com/http://www.daimondtriumphglass.com/ -- is a provider of automotive glass replacement and repair services. The company and and its debtor-affiliate DT Subsidiary Corp., filed for Chapter 11 bankruptcy petition on April 1, 2008 (Bankr. D. Del. Lead Case No. 08-10601). Donald J. Bowman Jr., Esq. and Joseph M. Barry, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy protection, they listed estimated assets of between $10 million to $50 million and estimated debts of between $100 million to $500 million. DIOMED HOLDINGS: Seeks Court Okay to Sell Assets to AngioDynamics ----------------------------------------------------------------- Diomed Holdings Inc. and Diomed Inc. asked permission from the U.S. Bankruptcy Court for the District of Massachusetts to sell their medical device development and marketing business operations and majority of their estates to AngioDynamics Inc. The total consideration for the sale of the assets will be the buyer's assumption of some liabilities and an amount in cash of $8,000,000, subject to adjustment under a sale agreement. The buyer will assume liabilities arising after the closing of the deal including ordinary course of business wage of employees who will be absorbed by the new owner. This wage is valued at a maximum of $160,000 with respect to salaries plus $160,000 with respect to commissions. A break-up fee of $250,000 will be paid to the buyer at the closing of an alternative transaction. About Diomed Holdings Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX: DIO) -- http://www.evlt.com/and http://www.diomedinc.com/-- develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT(R) laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy for use in cancer treatments, and dental and general surgical applications. Diomed Holdings has no assets other than its 100% ownership in Diomed Inc., its operating unit. Diomed Inc. owns 100% of Diomed Ltd. in the United Kingdom and Diolaser Mexico SA de CV in Mexico. The company and its affiliate, Diomed Inc., filed for Chapter 11 protection on March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart LLP, is the Debtors local counsel and McGuireWoods LLP is its general counsel. Goulston & Storrs P.C. is counsel to the Official Committee of Unsecured Creditors. The company's schedules show total assets of $19,936,479 and total liabilities of $14,743,485. The American Stock Exchange delisting of Diomed's stock is effective on April 28, 2008, unless postponed by the Securities and Exchange Commission. DIOMED HOLDINGS: May Use Lenders' Cash Collateral on Interim Basis ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Massachusetts gave Diomed Holdings Inc. and Diomed Inc. interim approval to use lenders' cash collateral. In March 2008, the Debtors told the Court that they need to use cash collateral for the continued management and operations of their business. The Debtors particularly said that they have to fund efforts to sell their assets. The Debtors related that the use of cash collateral alone won't sustain their cash needs beyond the initial weeks of the cases. Access to additional post-petition credit will be necessary to pay for future daily operating costs associated with the Debtors' ordinary course operations in order to finalize the terms of and consummate, subject to Court approval, a transaction for the sale of their operating assets. Creditors Holding Interest in Cash Collateral Based on a court document, Hercules Technology Growth Capital Inc., Iroquis Capital LP, Cranshire Capital LP, Portside Growth and Opportunity Fund, and Rockmore Investment Master Fund Ltd. are among those that have interests in the cash collateral. a. Hercules Term Loan The Debtors disclose that they are borrowers under a certain loan and security agreement dated Sept. 28, 2007, with Hercules as lender. Hercules loaned the Debtors with a principal amount of $10,000,000 allowing the Debtors to draw $6,000,000 on the closing date. The Debtors can then draw up to $4,000,000 to be advanced in minimum increments of $2,000,000 beginning Jan. 31, 2008, until March 30, 2008. The loan agreement with Hercules has a prime rate plus 3.20%, plus additional 5% following event of default. The Debtors granted Hercules in its assets, including inventory but excluding 35% of the capital stock of foreign units and the capital stock of Luminetix Corp. As of the bankruptcy filing, the Debtors are obligated to Hercules in the amount of $6,000,000 with respect to term loan, plus costs. b. 2004 Variable Rate Convertible Debentures Diomed Holdings issued variable rate convertible debentures in October 2004, held as of the bankruptcy filing, by four investors, Iroquis, Cranshire, Portside and Rockmore. The debentures mature on Oct. 25, 2008, or at an earlier date, in cash or common stock. In the event of mandatory repayment, the debentures is subject to a 30% prepayment premium. The debentures bear interest at a variable rate of the greater of 500 basis points over six-month LIBOR, or 10%, subject to an increase to 18% following event of default. Diomed Holdings initially issued $7,000,000 of convertible debentures, the amount was reduced over time. The conversion price of the debentures is currently at $0.70 per share. Although the debentures were unsecured when issued in 2004, a subordinated security interest was granted to the debenture holders as a condition to the debenture holders' consent to the Hercules Term Loan on Sept. 28, 2007. As of the bankruptcy filing, the balance of the outstanding debentures was $3,536,090, plus costs. c. Other Liabilities The Debtors have other current liabilities, including general unsecured liquidated accounts payable of $1,652,001 and accrued expenses of $3,755,612, totaling $5,407,614. Debtors' Assets The Debtors disclose that as of Feb. 29, 2008, they hold accounts receivable of $1,612,917, cash and cash equivalents of $309,273, inventory of $2,626,306, prepaid expenses of $456,805, property and equipment of $862,337, long-term assets of $4,408,240, and other assets of $14,700,000. The total value of the Debtors' assets as of Feb. 29, 2008, reached about $24,975,881. About Diomed Holdings Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX: DIO) -- http://www.evlt.com/and http://www.diomedinc.com/-- develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT(R) laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy for use in cancer treatments, and dental and general surgical applications. Diomed Holdings has no assets other than its 100% ownership in Diomed Inc., its operating unit. Diomed Inc. owns 100% of Diomed Ltd. in the United Kingdom and Diolaser Mexico SA de CV in Mexico. The company and its affiliate, Diomed Inc., filed for Chapter 11 protection on March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart LLP, is the Debtors local counsel and McGuireWoods LLP is its general counsel. Goulston & Storrs P.C. is counsel to the Official Committee of Unsecured Creditors. The company's schedules show total assets of $19,936,479 and total liabilities of $14,743,485. The American Stock Exchange delisting of Diomed's stock is effective on April 28, 2008, unless postponed by the Securities and Exchange Commission. DIOMED HOLDINGS: Selects Fladgate LLP as U.K. Legal Counsel ----------------------------------------------------------- Diomed Holdings Inc. and Diomed Inc. seek permission from the U.S. Bankruptcy Court for the District of Massachusetts to engage Fladgate LLP as their United Kingdom counsel. The Debtors continue to operate their businesses, including their operations in the United Kingdom and Mexico through their units, Diomed Ltd. and Diolaser Mexico SA de CV. The Debtors told the Court that Fladgate LLP will represent their interests with respect to Diomed Ltd., effective as of the date of their retention motion. Fladgate LLP will render various legal services necessary in the Debtors' cases. According to the motion, Diomed Ltd. was formed under the laws of the United Kingdom, and 100% of Diomed Ltd. is owned by Diomed Inc. Contemporaneous with the filings in the U.S., Diomed Ltd. filed documents in Court commencing administration proceeding in the United Kingdom. Based on the motion, Fladgate LLP's rates range from $550 to $850 for attorneys and $350 for paralegals. The Debtors assured the Court that "Fladgate is well-qualified to represent them in the cases in an efficient and timely manner." They added that Fladgate LLP won't duplicate the services to be rendered by its other counsels and hired professionals. The firm can be reached at: Rupert Connell, Esq. (rconnell@faldgate.com) Edward Marriott, Esq. (emarriottl@faldgate.com) Fladgate LLP 25 North Row London, W1K6DJ Tel: +44 (0)20 7323 4747 Fax: +44 (0)20 7629 4414 In his affidavit, Mr. Connell said that his firm has over 80 attorneys, has a large and diversified law practice. He said that although his firm may have a client roll encompassing several entities that may have interests in the Debtors' cases, Fladgate will not represent other client in matters related to the Debtors during the pendency of the case. About Diomed Holdings Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX: DIO) -- http://www.evlt.com/and http://www.diomedinc.com/-- develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT(R) laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy for use in cancer treatments, and dental and general surgical applications. Diomed Holdings has no assets other than its 100% ownership in Diomed Inc., its operating unit. Diomed Inc. owns 100% of Diomed Ltd. in the United Kingdom and Diolaser Mexico SA de CV in Mexico. The company and its affiliate, Diomed Inc., filed for Chapter 11 protection on March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart LLP, is the Debtors local counsel and McGuireWoods LLP is its general counsel. Goulston & Storrs P.C. is counsel to the Official Committee of Unsecured Creditors. The company's schedules show total assets of $19,936,479 and total liabilities of $14,743,485. The American Stock Exchange delisting of Diomed's stock is effective on April 28, 2008, unless postponed by the Securities and Exchange Commission. DRS TECHNOLOGIES: Fitch Affirms Issuer Default Rating at 'B+' ------------------------------------------------------------- Fitch Ratings affirmed DRS Technologies, Inc.'s Issuer Default Rating and outstanding credit ratings as: -- IDR 'B+'; -- Senior secured revolving credit facility 'BB+/RR1'; -- Senior secured term loan 'BB+/RR1'; -- Senior unsecured notes 'BB+/RR1'; -- Senior unsecured convertible notes 'BB+/RR1'; -- Senior subordinated notes 'B/RR5'. Approximately $1.66 billion of outstanding debt is affected by these actions. Fitch has also revised DRS' Rating Outlook to Positive from Stable. The Rating Outlook revision is based on positive fundamental trends and a favorable operating environment. As DRS moves into fiscal year 2009, Fitch expects that the company's earnings and cash flow will likely improve and leverage will likely continue to decline. Fitch also expects that DRS will likely continue to make modest debt repayments to move closer to its target leverage ratio of 3.0 times (x)-3.5x. DRS' ratings and Outlook incorporate expectations for healthy levels of free cash flow and the assumption that smaller bolt-on acquisitions will continue to be part of the company's strategy. In addition, the Outlook is supported by continued strong U.S. defense budgets and the continuing benefits of supplemental budgets for the foreseeable future. If DRS maintains commitment to lower leverage, the ratings could be reviewed for an upgrade in the coming year. However, the company's financial strategy continues to incorporate growth through acquisitions and if substantive acquisitions occur, the ratings and Outlook could be constrained, depending on deal size and potential financing structure. Reductions in spending for Iraq and Afghanistan could also constrain the ratings. The ratings are supported by continued high levels of defense spending, strong organic growth, good free cash flow generation, expected growth in homeland security spending, and good profitability. The ratings also consider DRS' diversification within the defense and homeland security arena, and the alignment between DRS' products and services and expected Department of Defense and Homeland Security needs. Concerns relate to future acquisition plans, relatively high exposure to current operations in Iraq and Afghanistan (and associated supplemental funding), high debt levels and leverage, modest margin contraction, and some concern about execution on new programs (following the Thermal Weapon Systems II program set back in fiscal first quarter-2007). Fitch's Recovery Rating analysis indicates that, in a hypothetical distressed scenario, the senior secured revolver and term debt would obtain full recovery. After paying off bank debt, Fitch estimates there would be sufficient enterprise value to also fully cover the $350 million, 6.625% senior unsecured notes and the $345 million, 2% convertible senior notes. The expected full recovery on these tranches warrants the 'RR1' rating and each issue is notched three levels above the IDR to 'BB+', in line with the bank facility. The senior subordinated notes achieve an estimated recovery at the high end of the 'RR5' category range (11% - 30%), and are therefore rated one notch below the IDR at 'B'. DRS is strategically and competitively well positioned for sustainable cash flow and earnings generation. Strong organic growth, a diverse product mix, and product offerings aligned with the increasingly high-tech needs of the armed forces, all lend to DRS' strong operating profile and prospects for continued credit support. DRS achieved organic revenue growth of 17% for the first nine months of fiscal 2008 as a number of programs converted from development to production. Organic growth was 14.8% in fiscal 2007, and 13% in FY 2006. As DRS has historically been acquisitive, the healthy growth rates in existing business is a positive sign of the underlying strength of its position (as well as a reflection of the favorable defense environment). Funded backlog grew 18% for the first nine months of FY 2008 ended Dec. 31, 2007 to $3.6 billion. The book to bill ratio was 1.23x for the same period. Leverage has been declining steadily since early 2006 when ESSI was acquired, which boosted leverage from 4.0x to 7.6x at FYE March 31, 2006. DRS has been consistently making modest debt repayments since second fiscal quarter-2007. Total Debt EBITDA for the LTM period ended Dec. 31, 2007 was 4.3x. Fitch expects that the company will continue to make debt repayments on its term loan facility in FY 2009. Term loan outstanding was $145.2 million at Dec. 31, 2007. In the absence of significant acquisitions or lower supplemental defense spending, Fitch expects DRS' leverage will move below 4.0x, while EBITDA interest coverage should move above 4.0x during the coming year. DRS has benefited from the conflicts in Iraq and Afghanistan, which continue to appear to be long-term commitments. Revenues related to these operations could account for nearly 10% of DRS' turnover. With the prospect of a new US president being elected, there is some possibility that the commitment to these conflicts will be reduced or eliminated. The current conflicts have been funded in large measure through supplemental DoD appropriations, and Fitch believes these supplemental budgets could be affected as soon as fiscal 2009 under a new president. If there were an abrupt reduction, DRS would likely feel limited immediate impact as existing equipment is reset. However, a drawdown of operations would eventually have some impact on DRS, as the majority of revenues are related to the US Army and several of the company's top revenue generating products are directly related to active engagement of forces. Fitch views this exposure as an intermediate term risk that could act as a constraint on the ratings, depending on the speed of any potential drawdown of operations, as well as potential offsetting organic or acquired growth. As of Dec. 31, 2007, liquidity totaled $416.5 million, comprised of $48 million in cash and $368.5 million of available revolver. Scheduled debt maturities of about $5 million per year for the next several years are modest. The current credit facility expires in 2012 and 2013. Fitch believes that DRS' capital structure is stable and sustainable as over 90% of total debt is fixed rate with an extended, laddered maturity profile. DUKE FUNDING IV: Moody's Cuts Ratings on Three Classes of Notes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Duke Funding IV, Ltd.: Class Description: $42,000,000 Class B Second Priority Senior Secured Floating Rate Notes Due 2038 -- Prior Rating: Aa2 -- Current Rating: A1, on review for possible downgrade Class Description: $17,500,000 Class C Mezzanine Secured Floating Rate Notes Due 2038 -- Prior Rating: Baa2 -- Current Rating: Ba1, on review for possible downgrade Class Description: $11,000,000 Preference Shares -- Prior Rating: Baa3 -- Current Rating: B2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. DUKE FUNDING VI: Seven Classes of Notes Get Moody's Rating Cuts --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Duke Funding VI, Ltd.: Class Description: $655,500,000 Class A1S Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aaa -- Current Rating: A2, on review for possible downgrade Class Description: $128,000,000 Class A1J Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aaa -- Current Rating: Baa2, on review for possible downgrade Class Description: $43,000,000 Class A2 Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aa2 -- Current Rating: Ba2, on review for possible downgrade In addition Moody's also downgraded these notes: Class Description: $47,500,000 Class A3 Senior Secured Deferrable Interest Floating Rate Notes Due 2039 -- Prior Rating: A2 -- Current Rating: Ca Class Description: $32,500,000 Class BV Mezzanine Secured Floating Rate Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: Ca Class Description: $5,500,000 Class BF Mezzanine Secured Floating Rate Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: Ca Class Description: $10,000,000 Composite 2 Securities Due 2039 -- Prior Rating: Baa3 -- Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. DUKE FUNDING VII: Moody's Cuts Ratings on 11 Note Classes --------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade the ratings on these notes issued by Duke Funding VII, Ltd: Class Description: $382,000,000 Class I-A1 Senior Secured Floating Rate Notes Due 2034 -- Prior Rating: Aaa -- Current Rating: A1, on review for possible downgrade Class Description: $129,900,000 Class I-A2 Senior Secured Floating Rate Notes Due 2034 -- Prior Rating: Aaa -- Current Rating: A1, on review for possible downgrade Class Description: $100,000 Class I-A2v Senior Secured Floating Rate Notes Due 2034 -- Prior Rating: Aaa -- Current Rating: A1, on review for possible downgrade Class Description: U.S. 98,500,000 Class II Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aaa -- Current Rating: Ba1, on review for possible downgrade Class Description: $61,000,000 Class III-A Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aa2 -- Current Rating: B2, on review for possible downgrade Class Description: $3,500,000 Class III-B Senior Secured Fixed Rate Notes Due 2039 -- Prior Rating: Aa2 -- Current Rating: B2, on review for possible downgrade Class Description: $10,000,000 Class X Combination Notes Due 2039 -- Prior Rating: Baa3 -- Current Rating: Ba2, on review for possible downgrade Class Description: $4,000,000 Class Y Combination Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: B1, on review for possible downgrade Class Description: $7,000,000 Class Z Combination Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $39,500,000 Class IV-A Mezzanine Secured Floating Rate Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: Ca Class Description: $5,500,000 Class IV-B Mezzanine Secured Fixed Rate Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. DUKE FUNDING IX: Nine Classes of Notes Get Moody's Rating Cuts -------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Duke Funding IX, Ltd.: Class Description: $1,675,000,000 Senior Swap Agreement dated as of Nov. 9, 2005 -- Prior Rating: Aaa -- Current Rating: Baa2, on review for possible downgrade Class Description: $143,750,000 Class A1 Senior Secured Floating Rate Notes due March 9, 2045 -- Prior Rating: Aaa -- Current Rating: Ba2, on review for possible downgrade Class Description: $8,000,000 Class A2F Senior Secured Fixed Rate Notes due March 9, 2045 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $292,000,000 Class A2V Senior Secured Floating Rate Notes due March 9, 2045 -- Prior Rating: Aa2 -- Current Rating: B1, on review for possible downgrade Class Description: $16,000,000 Combination Notes due March 9, 2045 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade In addition, Moody's also downgraded these notes: Class Description: $10,000,000 Class A3F Secured Deferrable Interest Fixed Rate Notes due March 9, 2045 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $165,000,000 Class A3V Secured Deferrable Interest Floating Rate Notes due March 9, 2045 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $87,500,000 Class B Mezzanine Secured Deferrable Interest Floating Rate Notes due March 9, 2045 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: C Class Description: $118,750,000 Subordinated Notes due March 9, 2045 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. DUKE FUNDING HIGH: Moody's Cuts Rating on $250MM Notes ------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Duke Funding High Grade III, Ltd.: Class Description: $102,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aaa -- Current Rating: Aa3, on review for possible downgrade Class Description: $8,000,000 Class B-1 Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aa1 -- Current Rating: A1, on review for possible downgrade Class Description: $8,000,000 Class B-2 Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aa3 -- Current Rating: A2, on review for possible downgrade Class Description: $44,000,000 Class C-1 Junior Secured Floating Rate Deferrable Interest Notes Due 2049 -- Prior Rating: A1 -- Current Rating: Baa3, on review for possible downgrade Class Description: $44,000,000 Class C-2 Junior Secured Floating Rate Deferrable Interest Notes Due 2049 -- Prior Rating: A3 -- Current Rating: Ba2, on review for possible downgrade Class Description: $12,000,000 Class D Mezzanine Secured Floating Rate Deferrable Interest Notes Due 2049 -- Prior Rating: Baa2 -- Current Rating: Caa2, on review for possible downgrade Class Description: $32,000,000 Subordinated Notes Due 2049 -- Prior Rating: Ba2 -- Current Rating: Caa3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. DUKE FUNDING HIGH: Moody's Cuts Ratings on Eight Classes of Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Duke Funding High Grade IV, Ltd.: Class Description: $1,312,500,000 Class A-1 Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $61,500,000 Class A-2 Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aaa -- Current Rating: Aa2, on review for possible downgrade Class Description: $22,500,000 Class B-1 Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aa1, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $19,500,000 Class B-2 Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: A1, on review for possible downgrade Class Description: $27,000,000 Class C-1 Junior Secured Floating Rate Deferrable Interest Notes Due 2050 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $27,000,000 Class C-2 Junior Secured Floating Rate Deferrable Interest Notes Due 2050 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $12,000,000 Class D Mezzanine Secured Floating Rate Deferrable Interest Notes Due 2050 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade In addition, Moody's also downgraded these notes: Class Description: $18,000,000 Subordinated Notes Due 2050 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. DUKE FUNDING HIGH: Moody's Cuts Ratings on $1.5BB Notes Due 2050 ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Duke Funding High Grade V, Ltd.: Class Description: $1,260,000,000 Class A-1 Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aaa -- Current Rating: A3, on review for possible downgrade Class Description: $108,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aaa -- Current Rating: Ba2, on review for possible downgrade Class Description: $78,000,000 Class B Senior Secured Floating Rate Notes Due 2050 -- Prior Rating: Aa2 -- Current Rating: B2, on review for possible downgrade In addition, Moody's downgraded these notes: Class Description: $21,000,000 Class C Junior Secured Floating Rate Deferrable Interest Notes Due 2050 -- Prior Rating: A1 -- Current Rating: Ca Class Description: $15,000,000 Class D Mezzanine Secured Floating Rate Deferrable Interest Notes Due 2050 -- Prior Rating: Baa2 -- Current Rating: Ca Class Description: $18,000,000 Subordinated Notes Due 2050 -- Prior Rating: Ba1 -- Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. DUNMORE HOMES: Files First Amended Plan of Liquidation ------------------------------------------------------ Dunmore Homes, Inc., delivered to the U.S. Bankruptcy Court for the Eastern District of California a blackline version of its First Amended Disclosure Statement and Plan of Liquidation dated April 22, 2008. Dunmore Vice President for Finance Doug Strauch relates that among the modifications reflected in the Amended Plan are the inclusion of a new class of claims and revised data on the Cordano Options and trust preferred Securities. Intercompany Claims The Amended Plan includes a new classification of claim, Class 6 Intercompany Claims. Before the bankruptcy filing, the Debtor maintained a consolidated cash management system, whereby it maintained a main disbursement account in its name with each of the Debtor's subsidiaries maintaining accounts in their respective names. In the ordinary course of business, funds were transferred to and from the Debtor's books as intercompany payables and receivables. As of the Petition Date, the total amount of intercompany claims was $33,890,091. The total amount of receivables due from the Debtor's subsidiaries as booked by the Debtor was $12,142,953. The Debtor estimates the value of the receivables at $0 because the Subsidiaries have no equity in its property and no cash to satisfy the claims. Holders of intercompany claims to be scheduled will have the opportunity to file a proof of claim in connection with the scheduled claims. Mr. Strauch says that from an economic standpoint the Transfers could more properly be characterized as shareholder distributions or subject to subordination. Mr. Strauch relates that there are no written agreements between the Debtor and a subsidiary in connection with the Transfers. There were also no notes evidencing the obligations, no evidence of interest accruing and no repayment terms. Class 5 and 6 Claims Distributions on Allowed Noteholder Claims will be made through the Indenture Trustee, unless the Indenture Trustee authorizes the Liquidation Trustee to make distributions and the Liquidation Trustee agrees. Class 6 Claims are impaired; will be subordinated to Allowed Claims in Class 3, Class 4 and Class 5; and will not receive or retain any property or interest in property under the Amended Plan unless all Class 3, 4, and 5 claims are paid in full with interest. Trust Preferred Securities In June 2005, Dunmore Homes California entered into an indenture agreement with the Bank of New York, whereby it issued and sold to a certain trust certain junior subordinated notes that will mature on July 30, 2035. The trust issued the "Trust Preferred Securities," which, in turn, beneficially own the junior subordinated notes. As of the bankruptcy filing, the aggregate amount outstanding with respect to the junior subordinated notes, and thus to the holders of the Trust Preferred Securities was approximately $20 million. The Debtor assumed Dunmore California's obligations under the junior subordinated notes and Trust Preferred Securities pursuant to the sale of its business to Michael Kane. The Indenture Agreement provides, inter alia, that the junior subordinated notes are "subordinate and subject in right of payment to the prior payment in full of all Senior Debt." Accordingly, the Amended Plan separately classifies the Claims of Noteholders to enable the Amended Plan to give effect to the subordination provisions in the Indenture Agreement. Thus, distributions from the Liquidation Trust of distributable cash or property made in respect of any allowed Class 5 claim will take account of provisions in the Indenture Agreement making senior debt the beneficiary of the Indenture Agreement's subordination provisions. The Debtor believes that the Noteholders' Claims are subordinate to the deficiency claims of the secured lender and are subordinate to any other claim that: -- derives from the Debtor's borrowing of money; -- is evidenced by a bond, debenture, note or similar instrument; -- is an obligation for reimbursement for a letter of credit, banker's acceptance or similar facility issued to the Debtor; -- is for the deferred purchase price of property or services; -- is a capital lease obligation; -- is for a derivative product like rate or commodity forward contracts, options, and swaps; -- is a guaranty, indemnity, or other claim for which the Debtor is responsible, which is based on the obligatin of another person to pay a claim for which the Debtor is responsible, which is based on the obligation of another person to pay a claim of a similar type; -- is based on a renewal, extension, refunding, amendment or modification of any obligation; or -- is for a premium owed but is not for costs, expense or fees. No claim is entitled to the benefits of subordination if it is: (a) a trade account payable; (b) an accrued liability arising in the ordinary course of the Debtor's business; (c) refers in any instrument issued with respect to it that it is not senior to the debt issued under the Indenture Agreement; (d) a debt obligation incurred to acquire non-real estate related assets; or (e) derives from a debt security that is subordinated or expressly made pari passa with the debt issued under the Indenture Agreement. The Cordano Options The Amended Plan also revised certain data with respect to the "Cordano Options," to address an objection the Cordano family delivered to the Court with respect the proposed Plan. The Debtor relates that it has an option to purchase 19.8 acres of property in Sacramento County, California, identified as 9980 and 9850 Gerber Road, from the Cordano family with an estimated value in excess of the option exercise price of $815,000. Dunmore California, the buyer, exercised its first "Closing Notice" to the sellers in October 2006. Under the terms of the agreement, the Cordano Sellers could continue to extend the closing date annually, until 2013, provided that one of the Cordano Sellers, Ms. Lena Cordano, had not died. Ms. Cordano, however, died on December 27, 2007. Pursuant to the option agreements, the Cordano Sellers are to notify the Debtor that they are willing to close escrow within 30 days after Ms. Cordano's death or whether they seek the 180-day period to remove tenants and personal property from the premises. If the Seller's Notice to Proceed requires the Removal Period, then the closing date will be 180 days after the delivery of Seller's Notice to Proceed. The Cordano Sellers sent the Seller's Notice to Proceed to the Debtor on Jan. 23, 2008. The Cordano Sellers also filed Claim No. 297 for $33,308, asserting among other things, indemnification for unpaid costs for and related to rezoning in connection with the properties pursuant to certain agreements between the Cordano Sellers and the Debtor. The Amended Plan notes that the Debtor has included the Cordano Option on its list of assumed contracts and has submitted the same as an exhibit to the Plan. A full-text copy of the blackline version of the Dunmore Amended Disclosure Statement and Plan of Liquidation is available for free at http://bankrupt.com/misc/DunmoreBlacklinePlan&DS.pdf About Dunmore Homes Based in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. In January 2008, the U.S. Bankruptcy Court for the Southern District of New York ordered the transfer of Debtor's Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor disclosed $20,743,147 in total assets and $250,252,312 in total debts in its schedules of assets and liabilities filed with the Court. (Dunmore Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EMPIRE LAND: Case Summary & 85 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Empire Land, LLC dba Empire Land Development, LLC 1809 Excise Ave., Ste. 208 Ontario, CA 91761 Tel: (909) 544-5000 Bankruptcy Case No.: 08-14592 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Aviat Homes, L.P. 08-14599 Empire Construction, L.P. 08-14604 Empire Global Holdings, L.P. 08-14608 Empire Residential Construction, L.P. 08-14611 Empire Residential Sales, L.P. 08-14613 Prestige Homes, L.P. 08-14614 Wheeler Land, L.P. 08-14615 Type of Business: With over a hundred affiliates, the Debtors belong to the "The Empire Companies", a group of residential land, homebuilding and financing companies that develop masterplanned communities and other land and construction projects located mainly in California and Arizona. See http://www.epinc.com/ Chapter 11 Petition Date: April 25, 2008 Court: Central District Of California (Riverside) Judge: Meredith A. Jury Debtors' Counsel: James Stang, Esq. Email: jstang@pszjlaw.com Pachulski Stang Ziehl & Jones, LLP 10100 Santa Monica Blvd. 1100 Los Angeles, CA 90067 Tel: (310) 277-6910 Fax: ((310) 201-0760 http:))www.pszjlaw.com) Empire Land, LLC's Financial Condition: Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million A. Empire Land, LLC's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pomona First Federal Bank & Unsecured loan $5,112,470 Trust Attn: Judith Will 9467 Milliken Ave. Tel: (800) 733-4636 Fax: (909) 481-3115 David Evans & Assoc., Inc. trade debt $73,505 1955 Chicago Ave., Ste. 200 Riverside, CA 92507 Tel: (951) 682-8500 Fax: (951) 682-8505 Insite Environmental, Inc. trade debt $43,091 6653 Embarcadero Dr., Ste.Q Stockton, CA 95219 Tel: (209) 472-8650 Fax: (209) 472-8654 Dahlin Group, Inc. trade debt $42,083 Pacific Advanced Civil trade debt $23,220 Engineer Mark Thomas and Co., Inc. trade debt $11,591 Hanley Wood, LLC trade debt $10,752 L&L Environmental, Inc. trade debt $4,250 MDS Consulting trade debt $4,069 Martin Holiday Unsecured Loan $2,500 Pitney Bowes Global trade debt $1,948 AEI CASC Engineering trade debt $1,899 Landscape Development, Inc. trade debt $1,200 OCB Reprographics, Inc. trade debt $757 Southern California Edison utilities $531 Com. firstCHOICE trade debt $178 Northwood Reprographics trade debt $90 City of Moreno Valley trade debt $81 B. Aviat Homes, LP does not have any creditors who are not insiders. C. Empire Construction, LP's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Teichert Construction trade debt $7,467,473 P.O. Box 15002 Sacramento, CA 95851 Tel: (916) 484-3011 Fax: (916) 484-6506 Allan E. Seward Engineering trade debt $4,755,655 27825 Smyth Drive Valencia, CA 91355 Tel: (661) 294-0065 Fax: (661) 294-0833 Griffith Co trade debt $4,750,654 12631 E. Imperial Hwy, Ste. F230 Santa Fe Springs, CA 90670 Tel: (706) 398-3322 Fax: (569) 929-1128 Dennis M. McCoy & Sons, Inc. trade debt $4,628,895 2820 Townsgate Road Westlake Village, CA 91361 Tel: (805) 449-0065 Fax: (805) 449-0065 Slater, Inc. trade debt $4,233,880 P.O. Box 759 Fontana, CA 92334 Tel: (909) 822-6800 Fax: (909) 822-7647 R.T. Frankian & Associates, trade debt $4,199,081 Inc. 1329 Scott Road Burbank, CA 91504 Tel: (818) 531-1501 Fax: (818) 531-1511 Brockmeier Engineers, Inc. trade debt $3,835,391 1304 Olympic Blvd. Santa Monica, CA 90404-3726 Tel: (310) 450-2879 Fax: (310) 450-9127 ArchaeoPaleo Resource trade debt $3,143,134 Management, Inc. 13368 Beach Ave. Marina Del Rey, CA 90292 Tel: (310) 823-2850 Fax: (310) 823-2851 Total Concept Landscape trade debt $3,093,560 Architecture, Inc. 27905 Smyth Drive Valencia, CA 91355-4034 Tel: (661) 702-1011 Fax: (661) 702-0293 West Coast Engineering trade debt $2,581,778 Construction 40757 11th Street West Palmdale, CA 93551 Tel: (661) 225-9894 Fax: (661) 225-9865 DK Associates, Inc. trade debt $2,384,851 1440 Maria Lane, Ste. 200 Walnut Creek, CA 94596 Tel: (925) 932-6868 Fax: (925) 932-0910 L&L Environmental, Inc. trade debt $2,258,784 1269 Pomona Road, Ste. 102 Corona, CA 92882 Tel: (909) 279-9608 Fax: (909) 279-9506 GeoTek trade debt $1,857,650 6835 Escondido St., Ste. A Las Vegas, NV 89119 Tel: (702) 897-1424 Fax: (702) 897-2213 Griffin Dewatering Corp. trade debt $1,821,918 P.O. Box 972958 Dallas, TX 75397-2987 Tel: (800) 431-1510 Fax: ((713) 675-4820 Sikand Engineering trade debt $1,765,417 Associates 15230 Burbank Blvd., Ste. 100 Van Nuys, CA 91411 Tel: (818) 787-8550 Fax: ((818) 901-7451 R.B.F. Consulting trade debt $1,686,965 40810 Country Center Drive, Ste. 100 Temecula, CA 92591-6022 Tel: (951) 676-8042 Fax: ((951) 676-7240 Terry A. Foster trade debt $1,551,725 P.O. Box 901867 Palmdale, CA 93590-1867 Tel: (661) 270-9336 Fax: ((661) 270-9395 Mohaddes Meyer Associates, trade debt $1,260,809 Inc. Dept. 2123 Los Angeles, CA 90084-2123 Tel: (213) 488-0345 Fax: ((213) 488-9440 Forma Engineering, Inc. trade debt $1,127,317 10814 Reseda Blvd. Northridge, CA 91326 Tel: (818) 832-1710 Fax: ((818) 332-1740 GeoSyntec Consultants, Inc. trade debt $1,111,418 5901 Broken Sound Parkway N.W., Ste. 300 Boca Raton, FL 33487-2775 Tel: (561) 995-0900 Fax: ((561) 995-0925 D. Empire Global Holdings, LP does not have any creditors who are not insiders. E. Empire Residential Construction, LP's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ H.L. Chapman Pipeline trade debt $209,799 Construction 9250 F.M. 2243 Leander, TX 78641 Tel: (512-259-7662 Fax: (512-259-7870 Perlman Architects of Arizona trade debt $121,926 Inc. 4150 N. Drinkwater Blvd. Ste. 240 Scottsdale, AZ 85251 Tel: (480) 951-5900 Fax: (480) 650-7908 Creative Touch Interiors trade debt $115,014 1720 E. Grant Street Phoenix, AZ 85034 Tel: (928) 445-8551 Fax: (928) 778-7708 Triple H. Excavation, LLC trade debt $91,779 Jowell's Cabinets, Inc. trade debt $89,368 Fortress, Inc. trade debt $75,605 Arizona Home Centers trade debt $68,700 Robert Max Lind trade debt $68,659 Lyon Engineering and trade debt $40,112 Development Danielian Associates trade debt $37,419 Paul Johnson Drywall trade debt $30,712 Clear Channel Outdoor trade debt $29,145 Ignace Brothers, Inc. trade debt $27,179 SM Painting Co., Inc. trade debt $26,662 Younger Brothers Construction trade debt $26,111 Agassiz Landscape Group, LLC trade debt $25,119 Hanson Aggregates Arizona, trade debt $23,078 Inc. Manpower-Arizona trade debt $21,307 Bullock's Travel trade debt $20,000 Western Technologies, Inc. trade debt $18,969 F. Empire Residential Sales, LP does not have any creditors who are not insiders. G. Prestige Homes, LP's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Murrieta Development Co., Inc. trade debt $142,399 42540 Rio Nedo Rd. Temecula, CA 92590 Tel: (951) 719-1680 Fax: (951) 719-1684 Mon-May Enterprises trade debt $136,478 8075 Terraza Court Riverside, CA 92508 Tel: (909) 874-2372 Fax: (909) 874-2035 Henderson Masonry & Concrete trade debt $68,295 Attn: Coface Collection North America, Inc. P.O. Box 8510 Metairie, LA 70011-8510 Tel: (800) 509-6060 328 (ext.) Fax: (504) 200-2553 RCR Companies (L.A. Division) trade debt $61,001 Campbells Carpets, Inc. trade debt $57,253 Pacific Utility Installation, trade debt $56,392 Brennan Electric, Inc. trade debt $54,621 Janco Industries, Inc. trade debt $51,212 Golden State Fence Co. trade debt $49,860 Mon-May Framing Corp. trade debt $45,272 Richard Lopez Construction trade debt $42,612 Pinnacle Builders, Inc. trade debt $31,170 Northpoint Security Services trade debt $29,716 M&M Plumbing, Inc. trade debt $27,602 Nadel Retail Architects, LLP trade debt $27,521 Dependable Sheet Metal trade debt $24,391 Leonard's Carpet Service, Inc. trade debt $24,035 Tristan Engineering Contractor trade debt $23,060 Mission Pools trade debt $21,164 R.C. Wendt Painting trade debt $20,910 H. Wheeler Land, LP's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Teichert Construction trade debt $154,698 P.O. Box 15002 Sacramento, CA 95851 Tel: (916) 484-3011 Fax: (916) 484-6506 MTW Group Tsuboi Mamuyac & trade debt $49,208 Ass 10411 Old Placerville Road, Ste. 205 Sacramento, CA 95827 Tel: (916) 369-3990 Fax: (916) 369-3995 Kasl Consulting Engineers, trade debt $33,258 Inc. 4200 N. Freeway Blvd., Ste. 1 Sacramento, CA 95834 Tel: (916) 929-8127 Fax: (916) 929-0621 David Taussig & Associates trade debt $6,910 Olivehurst Public Utilities utilities $5,002 District Gibson & Skordal, LLC trade debt $153 HSBC Business Solutions professional services $19 EOS AIRLINES: Files for Chapter 11 Protection in New York --------------------------------------------------------- Eos Airlines Inc. filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The petition was filed April 26, 2008, in the U.S. Bankruptcy Court in the Southern District of New York. Eos said it will immediately implement a reduction in its workforce, eliminating the positions of most of its employees, and will cease operations entirely after April 27, 2008. "After overcoming today's extremely challenging economic and credit environment to negotiate terms for a round of financing, it is regrettable that we were forced to take this action," Jack Williams, Eos' chief executive, said. "We had been clear since closing on our last round of financing that we would need additional capital. As difficult as it is to raise funds in the current environment, investors believe in our business model and we were on the verge of success. "Unfortunately, just as we were working toward closing on an investment that would have carried us to corporate profitability in 2009, some issues arose that we could not overcome. It is regrettable that, even though investors continue to be enthusiastic about our business model, and even though we had a term sheet in hand, we were unable to close on the financing we needed. That leaves us with insufficient cash on hand to continue operations." "There are times in business when even though you execute your business plan and even though your employees do their jobs beautifully, external forces prevent you from controlling your own destiny. "I want to express my appreciation to our dedicated employees and to the many Guests who have become like family to us." Headquartered in Staten Island, New York, Eos Airlines Inc. -- http://www.eosairlines.com/-- is a premium class New York to London carrier, which is known for its operational excellence and uncrowded Guest experience. EOS AIRLINES: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Eos Airlines, Inc. aka FDBA Atlantic Express, Inc. 287 Bowman Ave., 4th Fl. Purchase, NY 10577 Tel: (914) 417-2100 Bankruptcy Case No.: 08-22581 Type of Business: The Debtor is a transatlantic airline. See http://www.eosairlines.com/ Chapter 11 Petition Date: April 26, 2008 Court: Southern District of New York (White Plains) Judge: Adlai S. Hardin Jr. Debtor's Counsel: Stephen D. Lerner, Esq. Email: slerner@ssd.com Squire Sanders & Dempsey, LLP 221 E. Fourth St., Ste. 2900 Cincinnati, OH 45202-4036 Tel: (513) 361-1200 Fax: (513) 361-1201 http://www.ssd.com/ Total Assets: $70,233,455 Total Debts: $34,858,485 The Debtor did not file a list of its largest unsecured creditors. FAIRWEST ENERGY: Unit's Lender Demands Repayment of $10.63MM Loan ----------------------------------------------------------------- On April 18, 2008, Strike Petroleum Ltd., a 100% subsidiary of FairWest Energy Corporation received a demand to repay its outstanding indebtedness with a secured lender. The Lender has informed Strike that as of April 17, 2008, Strike owed the Lender $10.63 million of principal and accrued interest of $0.17 million. If the amount due to the Lender is not paid, the Lender has the right to enforce its security. Strike is a wholly owned subsidiary of FairWest and is solely responsible for its secured debt with the Lender. Negotiations between Strike and the Lender to date have not resulted in a mutually agreeable agreement between the two parties. FairWest and Strike intend to pursue ongoing negotiations with the Lender to find a satisfactory resolution to valuation differences. If both company are unable to make a deal, FairWest and Strike said they will cooperate with the Lender to permit an orderly liquidation of the Strike assets. Strike's estimated March 2008 working interest production of 172 barrels of oil equivalent per day represented 20.5% of FairWest's estimated March 2008 total production of 840 BOE/D. FairWest's discretionary cash flow will not be impacted materially if liquidation of Strike is the final remedy as the present free cash flow from the Strike assets is currently dedicated to the Lender. The FairWest management team and board of directors anticipate that in the event the Strike assets are liquidated the result will be a significant reduction to the bank debt component of FairWest's consolidated working capital deficiency. The resolution of the Strike situation will free up management resources and cash flow to focus on production and reserve additions associated with its non-Strike assets. This will occur through a defined program of acquisition, exploitation, development and exploration opportunities. FairWest has recently signed an Indicative letter to increase its credit facilities with a Canadian bank that is not related to Strike's Lender based on production success in other core areas. The proceeds of FairWest's increased bank financing will be used to make payments to FairWest's trade creditors. About FairWest Energy FairWest Energy Corporation (TSX:FEC) -- http://www.fairwestenergy.com/-- is a Calgary, Alberta based junior oil and gas company that acquires, explores, develops and produces crude oil and natural gas in the provinces of Alberta and Saskatchewan. About Strike Petroleum Strike Petroleum Ltd. operates in the oil and gas industry in Calagary, Alberta. It produces natural gas, and oil and liquids. During the fiscal year ended September 30, 2006 (fiscal 2006), the Company drilled 28 wells (26.1 net) of which 24 (22.6 net) were successful gas wells, two (1.5 net) were successful oil wells, and two were dry and abandoned. During fiscal 2006, the company held 12,629 acres of land position through purchases and farm-in arrangements. As of Sept. 30, 2006, Strike's oil, natural gas and natural gas liquids volumes averaged 482 boepd (barrels of oil equivalent per day). On Jan. 24, 2007, the company entered into an arrangement agreement with FairWest Energy Corporation whereby FairWest will acquire all of the issued and outstanding shares and options of Strike. FOSTER WHEELER: Moody's Raises Corporate Family Rating to 'Ba2' --------------------------------------------------------------- Moody's Investors Service upgraded Foster Wheeler LLC's corporate family rating to Ba2 from Ba3, and raised its senior secured rating to Baa2 from Baa3. The outlook continues to be positive. The rating action reflects the significant and ongoing improvements in FW's operating results and financial profile driven by strong end market demand in both its business segments and the company's ability to obtain and profitably execute key projects at rapidly escalating levels of scale. This success has resulted in a marked strengthening of the company's credit profile warranting an upgrade to the Ba2 rating level. The positive outlook signals Moody's belief that FW's ratings stand to be further enhanced should the company demonstrate a continued commitment to its conservative capital structure and reduced variability in top line revenues and operating earnings, which historically have been sigificiant. The rating also considers FW's ongoing asbestos litigation issues and the potential for the company to direct its growing cash balances to acquisition acitivity, introducing integration risk into future results. These constraints are offset by a strong market position, favorable end market demand and prospects for continued organic growth, along with current levels of profitability and cash flow generation that are consistent with a higher rating. Upgrades: Issuer: Foster Wheeler LLC -- Probability of Default Rating, Upgraded to Ba2 from Ba3 -- Corporate Family Rating, Upgraded to Ba2 from Ba3 -- Senior Secured Bank Credit Facility, Upgraded to Baa2, LGD1, 4% from Baa3, LGD1, 3% Foster Wheeler LLC, a wholly owned subsidiary of Foster Wheeler LTD, is a leading international engineering, construction and project management contractor and power equipment supplier. Consolidated revenues were $5.1 billion in 2007. FREMONT HOME: S&P Downgrades Ratings on Two Classes of Certs. ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-3 and M-4 asset-backed certificates from Fremont Home Loan Trust 2002-1 and removed them from CreditWatch with negative implications. In addition, S&P placed its 'AAA' ratings on classes M-1 and M-2 on CreditWatch with negative implications. The negative rating actions reflect several adverse performance trends for this transaction. As of the March 2008 remittance period, overcollateralization was $465,405, which is below its $1.09 million target. Although this pool has paid down to $8.27 million, just 3.81% of the original pool balance, approximately $2.01 million of the remaining balance is delinquent, and $1.23 million is seriously delinquent. While classes M-3 and M-4 have remaining balances of approximately $197,000 and $51,000, respectively, class M-3 has received no principal for seven months, and class M-4 hasn't received principal payments for 30 months. The six- and 12-month average losses for this transaction are $82,466 and $58,055, respectively, while the deal is experiencing a 12-month average loss severity of 49%. Depending on the timing of losses, applying the 49% loss severity can cause a rating default of classes M-3 and M-4. Although the deal is passing its cumulative loss and delinquency triggers, S&P is concerned that the transaction's current collateral is insufficient to pay down the certificates. While classes M-1 and M-2 currently have $7.56 million of their principal balances remaining, only $6.26 million of the collateral pool is current. S&P will closely monitor the outcome of the transaction's delinquency pipeline, future realized losses, and the paydown of the remaining classes in the upcoming remittance periods. With only 83 loans remaining in this pool, the transaction's performance may be volatile from period to period. A combination of subordination, excess spread, and O/C provides credit support to this subprime transaction. Ratings Lowered and Removed From CreditWatch Negative Fremont Home Loan Trust 2002-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-3 35729PAE0 CCC BBB/Watch Neg M-4 35729PAF7 CCC BBB-/Watch Neg Ratings Placed on CreditWatch Negative Fremont Home Loan Trust 2002-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 35729PAC4 AAA/Watch Neg AAA M-2 35729PAD2 AAA/Watch Neg AAA FRONTIER AIRLINES: Wants to Get Faegre & Benson as Special Counsel ------------------------------------------------------------------ Frontier Airlines Holdings Inc. and its subsidiaries seek permission from the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Faegre & Benson LLP as their special counsel, effective as of the Debtors' bankruptcy filing date, with respect to various corporate, securities, and litigation matters and any claims or disputes of the Debtors made by or against First Data Corporation. The Debtors are party to a Merchant Services Airline Bankcard Agreement with First Data Corp., a bankcard processor. Majority of the tickets sold for the Debtors' flights involve a bankcard transaction processed by First Data Corp. The filing of the Chapter 11 cases was triggered by the actions about to be taken by First Data Corp. in increasing -- beginning on April 11, 2008 -- the collateral required under the Bankcard Agreement from $54,500,000 to $130,000,000, beginning with a retention of 50% of the Debtors bankcard sales proceeds under the Bankcard Agreement. As a result of the Chapter 11 filing, the Debtors anticipate the need for legal counsel with respect to any claims or disputes of the Debtors made by or against First Data Corp. Edward M. Christie, III, the Debtors' senior vice president for finance, says Faegre & Benson possesses extensive experience in Chapter 11 reorganization cases and other debt restructuring proceedings, as well as extensive knowledge of corporate transactional, litigation and related fields. Douglas Wright, a partner at Faegre & Benson, has been the corporate and securities counsel to the Debtors since their formation in 1994. This gives the firm a special understanding of the Debtors' business operations and legal issues as a result of longstanding and significant representation, Mr. Christie says. Moreover, the firm has been involved in counseling the Debtors specifically with respect to credit card issues prior to their Chapter 11 cases. Thus, Mr. Christie says, Faegre & Benson is well-qualified to represent the Debtors in an efficient and effective manner as special counsel with respect to credit processor issues, corporate securities and litigation matters, and any claims or disputes of the Debtors made by or against First Data Corp. Mr. Christie says that the Debtors are separately seeking the Court's authorization to employ as their counsel in the Chapter 11 cases (i) Davis Polk & Waldwell as general restructuring counsel and (ii) Togut, Segal & Segal LLP as general conflicts counsel. According to Mr. Christie, DPW is unable to represent the Debtor in any litigation involving First Data Corp. due to conflict of interest. Faegre & Benson is expected to work closely with the Debtors, DPW, Togut, and each of the Debtors' other retained professionals to clearly delineate each professional's duties to prevent unnecessary duplication of work. Faegre & Benson will be paid based on its customary hourly rates and reimbursed for actual, reasonable and necessary out-of-pocket expenses. The firm's hourly rates are: Partners $375 to $695 Associates/Special Counsel $175 to $420 Paralegals and Clerks $140 to &285 The attorneys and paralegals who will primarily work on the Debtors' case, and their billing rates are: Professional Position Rate ------------ -------- ---- Douglas R. Wright Partner $550 Michael R. Stewart Partner 625 Dennis M. Ryan Partner 565 Jerome A. Miranowski Partner 565 Jeffrey Sherman Partner 500 Michael Krauss Partner 375 Heather Carson Perkins Partner 410 Jason Day Associate 385 Brandee L. Caswell Associate 380 Theresa H. Dykoschak Associate 265 Kristy M. Koeltzow Paralegal 255 Kristin L. Dunlop Paralegal 255 Debrah L. Wegler Paralegal 230 Within the one-year period prior to the Petition Date, Faegre & Benson received from the Debtors $440,000 for services rendered and related expenses. There are no outstanding amounts owed to the firm on account of services or expenses incurred prepetition. In addition, prior to the Petition Date, Faegre & Benson received $300,000 in retainer payments for services to be rendered and for expenses incurred in connection with the Debtors Chapter 11 cases. Mr. Ryan assures the Court that Faergre & Benson is not connected with the Debtors, their creditors, other parties-in-interest or the U.S. Trustee or any person employed by the Office of the U.S. Trustee, and does not hold any interest adverse to the Debtors or their estates with respect to the matters upon which it is to be engaged. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297 thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Epiq Bankruptcy LLC is Debtors' Notice & Claims Agent and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. (Frontier Airlines Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GARY FIRMENDER: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Gary William Firmender P.O. Box 308 Isle Of Palms, SC 29451 Bankruptcy Case No.: 08-02220 Chapter 11 Petition Date: April 14, 2008 Court: District of South Carolina (Charleston) Judge: David R. Duncan Debtor's Counsel: Kevin Campbell, Esq. (kcampbell@campbell-law-firm.com) Campbell Law Firm P.A. P.O. Box 684 890 Jonnie Dodds Boulevard Mount Pleasant, SC 29465 Tel: (843) 884-6874 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 13 largest unsecured creditors: Entity Claim Amount ------ ------------ First Charter $700,000 P.O. Box 37927 Charlotte, NC 28237 First Reliance $183,475 2170 West Palmetto Street Florence, SC 29501 Gray Macauly $150,000 20 20th Avenue Isle of Palms, SC 29451 Crescent Bank $122,305 Community Resource Bank $104,475 First Reliance $93,014 Suntrust $80,000 Elizabeth Sanders $62,000 Community Resource Bank $40,475 City of Columbia Water $4,250 Capital One $586 BB & T $562 U.S. Postal Service $125 GALVESTON PROPERTY: Moody's Confirms 'Caa1' Rating on 1991A Bonds ----------------------------------------------------------------- Moody's Investors Service affirmed the Caa1 rating on the Galveston Property Finance Authority, Inc., Texas, Single Family Mortgage Revenue Bonds Series 1991A. The amount of debt outstanding is $265,000. The outlook on the rating is stable. The program consists of 25 loans that were originated during 1980 and 1981. The trustee reports that as of April 7, 2008 (un- audited), the principal amount of loans outstanding was $220,803 of which $21,340 (one loan) was classified as being 60 days or more past due. There is a pool insurance policy with MGIC (Moody's financial strength rating of Aa2 on watch for possible downgrade) with a loss limit in excess of the outstanding loan balance to cover losses to the program from defaulted loans. Although the asset-to-debt ratio of 1.0479 may suggest a higher rating, Moody's has affirmed the rating for these reasons: (1) The program currently relies on $61,179 in the investment fund to cover the spread between outstanding bonds and loans. The investment fund is currently earning 7.50% while the coupon on the bonds is 8.50%. (2) The delinquent loan is approximately 9.65% of the total loan portfolio. The bonds are scheduled to mature on Sept. 1, 2011. Outlook The rating outlook for the bonds is stable due to the sizeable spread between bonds and loans outstanding. GAMESTOP CORP: Moody's Lifts Ratings to Ba1 on Strong Performance ----------------------------------------------------------------- Moody's Investors Service upgraded the long-term debt ratings of GameStop Corp., corporate family and probability of default ratings to Ba1 from Ba2, and affirmed the speculative grade liquidity rating at SGL-1. The rating outlook is stable. The upgrade reflects the company's strong operating performance combined with a continuous reduction in its funded debt level. This has resulted in a significant improvement in credit metrics to investment grade levels, debt to EBITDA has fallen to 3.0 times, EBITA to interest expense has risen to 4.0 times, and free cash flow to net debt has risen to 17.0%. These ratings are upgraded: -- Corporate family rating to Ba1 from Ba2; -- Probability of default rating to Ba1 from Ba2; and -- Senior unsecured notes to Ba1 (LGD4, 63%) from Ba3 (LGD4, 61%). These rating is affirmed: Speculative grade liquidity rating of SGL-1. GameStop's Ba1 corporate family rating is supported by the company's strong credit metrics and the company's market position as the leading specialty retailer of electronic games with a particular strength in the used game business. The electronic games segment is one of the few retail segments that continues to exhibit growing demand and has not yet become impacted by the downloading of content off the internet. In addition, the rating category also reflects the company's moderate scale with revenues of $7.1 billion, its international store footprint, and its very good liquidity, including a $400 million asset based revolving credit facility. The rating category is primarily constrained by the long term future risk that electronic gaming content will be made available to download off the internet; potentially placing GameStop in a challenging competitive position given its sizable store base. The rating category also reflects the risk of the company over expanding its store base given its very aggressive store expansion plans. In addition, the rating category reflects the company's product offering, which is highly discretionary and exposed to frequent renewal cycles, and by its high seasonality, which exposes the company to a "make or break" fourth quarter holiday selling season. The stable rating outlook reflects Moody's expectation that the company will maintain its current level of strong credit metrics along with moderate financial policies, which include very good liquidity and a very modest level of fold in acquisitions. GameStop Corp., headquartered in Grapevine, Texas, is the world's largest specialty retailer of video game products and PC entertainment software. The company operates 5,266 stores in the United States, Australia, Canada, and Europe primarily under the names GameStop and EBGames. Revenues for the fiscal year ended Feb. 2, 2008 were approximately $7.1 billion. GEMSTONE CDO IV: Moody's Cuts Ratings on Six Classes of Notes ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade the ratings on these notes issued by Gemstone CDO IV Ltd.: Class Description: Class A-2 Floating Rate Notes Due February 2041 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: Class A-3 Floating Rate Notes Due February 2041 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: Class B Floating Rate Notes Due February 2041 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: Class C Floating Rate Deferrable Interest Notes Due February 2041 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: Class D Floating Rate Deferrable Interest Notes Due February 2041 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: Class E Floating Rate Deferrable Interest Notes Due February 2041 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. GEMSTONE CDO V: Eight Classes of Notes Get Moody's Rating Cuts -------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Gemstone CDO V Ltd.: Class Description: $243,800,000 Class A-1 Floating Rate Notes Due September 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $152,200,000 Class A-2 Floating Rate Notes Due September 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $61,000,000 Class A-3 Floating Rate Notes Due September 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $50,000,000 Class A-4 Floating Rate Notes Due September 2046 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $67,500,000 Class B Floating Rate Notes Due September 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $21,700,000 Class C Floating Rate Deferrable Interest Notes Due September 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $37,400,000 Class D Floating Rate Deferrable Interest Notes Due September 2046 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $10,100,000 Class E Floating Rate Deferrable Interest Notes Due September 2046 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. GEMSTONE CDO VI: Five Classes of Notes Get Moody's Junk Ratings --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Gemstone CDO VI Ltd.: Class Description: $446,250,000 Class A-1 Floating Rate Notes due August 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $78,750,000 Class A-2 Floating Rate Notes due August 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $66,500,000 Class B Floating Rate Notes due August 2046 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $26,000,000 Class C Floating Rate Deferrable Interest Notes due August 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $35,250,000 Class D Floating Rate Deferrable Interest Notes due August 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $10,500,000 Class E Floating Rate Deferrable Interest Notes due August 2046 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. GENERAL MOTORS: GMAC and ResCap Downgrades Cue S&P's Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. remain on CreditWatch with negative implications, where they were placed March 17, 2008. The CreditWatch update follows downgrades of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and Residential Capital LLC (CCC+/Watch Neg/C). The rating actions on Residential Capital LLC and GMAC were triggered by the resignation of the only independent directors at Residential Capital LLC. "We don't expect GM to provide any significant capital to GMAC or indirectly to Residential Capital," said Standard & Poor's credit analyst Robert Schulz, "nor are they required to do so in the future." S&P's ratings does not incorporate any transfer of substantial capital to GMAC. GM's ratings were originally placed on CreditWatch because of the strike at major supplier American Axle & Manufacturing Holdings Inc. The American Axle strike has now lasted two months and forced production shutdowns at several GM plants that produce full-size pickups and SUVs. In addition, GM workers began a strike last week over local work issues at an assembly plant in Delta Township, Michigan, which produces a popular line of crossover utility vehicles. Although S&P expects these labor issues to be resolved, the timing, and therefore the full extent, of their effect on GM's liquidity is unknown. S&P expects the American Axle strike to contribute to a very large use of cash in GM's first-quarter 2008 results, which GM will announce in the next few weeks, and the effect will be magnified by the timing of GM's payables and receivables. The first quarter will be hurt by the negative cash effect of reduced truck shipments and little to no offsetting benefit from reduced payments to suppliers, including American Axle. The second quarter will be affected as well, and in light of weak sales, GM's production levels could remain under pressure even once the American Axle strike is over. Still, GM should be able to maintain ample available liquidity; at year-end 2007, the company had $27.3 billion, including cash, marketable securities, and $600 million in short-term VEBA funds. Another uncertainty for GM, although less of a pressing issue in the near term, is former supplier Delphi Corp.'s difficulties in emerging from bankruptcy. S&P still believes the comprehensive costs to GM of Delphi's reorganization will remain within the scope of GM's liquidity. Still, the current capital market turmoil may keep Delphi in Chapter 11 for several more months, if not the rest of this year. S&P's ratings does not leave any room for GM to make substantial cash payments to support a Delphi emergence. S&P's resolution of the GM CreditWatch will likely not occur until the American Axle strike has been resolved. GEOEYE INC: Moody's Upgrades Corporate Family Rating to 'Caa1' -------------------------------------------------------------- Moody's upgraded GeoEye Inc.'s corporate family rating to Caa1 from Caa2 and, at the same time, GeoEye's speculative grade liquidity rating was upgraded to SGL-2 (good liquidity) from SGL-3 (adequate liquidity). The rating action was prompted by the combination of ongoing financial performance, a significant cash balance, and disclosure that a key asset driving financial results, the IKONOS high resolution imaging satellite, is now expected to have a useful life that extends "at least through 2010". Consequently, despite launch of the company's next generation high resolution satellite being delayed by the service provider, it appears there will be more than sufficient cash flow during the intervening period. This causes the speculative grade liquidity rating to upgraded. In addition, with reduced uncertainty, Moody's assessment of GeoEye's probability of default rate is revised to B3 from Caa1. In turn, with the CFR being an expression of expected loss, and being a function of the relationship between the PDR and the recovery rate (the estimate of applicable recovery remains unchanged), the revised PDR causes the EL (i.e. the CFR) to be upgraded by one notch to Caa1. Application of Moody's loss given default methodology also resulted in the rating for the company's $250 mm senior secured FRN due June 30, 2012 being upgraded to Caa1 from Caa2. The relevant LGD assessment was also revised. The stable outlook balances the potential of a further reduction in GeoEye's PDR subsequent to the pending satellite launch with the risks of either or both of launch failure and operational difficulties. Upgrades: Issuer: Geoeye Inc. -- Corporate Family Rating, Upgraded to Caa1 from Caa2 -- Probability of Default Rating, Upgraded to B3 from Caa1 -- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 -- Senior Secured Regular Bond/Debenture, Upgraded to Caa1 Headquartered in Dulles, Virginia, GeoEye, Inc. is a commercial satellite imagery company operating three earth imaging satellites - OrbView-2, OrbView-3 and IKONOS. The company also owns and operates a network of ground stations, an extensive archive of images and possesses advanced geospatial imagery processing capabilities. G-FORCE CDO: Fitch Downgrades Ratings on Seven Classes to Low Bs ---------------------------------------------------------------- Fitch Ratings downgraded 10 classes and affirmed three classes of notes issued by G-Force CDO 2006-1, Ltd. or Corp., (G-Force 2006-1): -- $55.9 million class A-1 affirmed at 'AAA'; -- $74.6 million class A-2 affirmed at 'AAA'; -- $135.3 million class A-3 downgraded to 'AA' from 'AAA'; -- $201.7 million class SSFL affirmed at 'AAA'; -- $67 million class JRFL downgraded to 'AA' from 'AAA'; -- $42.9 million class B downgraded to 'BBB' from 'AA+'; -- $18.7 million class C downgraded to 'BB' from 'AA'; -- $31.9 million class D downgraded to 'BB from 'A+'; -- $28.6 million class E downgraded to 'B' from 'A'; -- $12.1 million class F downgraded to 'B' from 'A-'; -- $22 million class G downgraded to 'B-' from 'BBB+'; -- $16.5 million class H downgraded to 'B-' from 'BBB'; -- $22 million class J downgraded to 'B-' from 'BBB-'. Additionally, Fitch has removed classes A-3, JRFL, and B through J from Rating Watch Negative, where they were originally placed on Jan. 16, 2008 and Dec. 12, 2007. Fitch does not rate the preferred shares. G-Force 2006-1 is a commercial real estate collateralized debt obligation primarily backed by commercial mortgage backed securities B-pieces that closed on Sept. 13, 2006. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. G Funds Asset Management, LLC, of which the sole members are Capmark Investments, LP (rated 'CAM1-' by Fitch as a CDO Asset Manager) and Goff Moore Strategic Partners, LP, serves as the collateral administrator. The collateral for this CDO consists of CMBS bonds, ReREMIC bonds, and three CRE loans (all of which have been defeased). The underlying assets of the CMBS bonds, by their nature, face similar exposures to losses from any downturn in the commercial real estate market as well as refinancing risks at the assets' maturity dates. As a mitigant, however, the underlying CMBS transactions do have significant geographic, property type and tenant diversity. While Fitch continues to believe investment grade CMBS will perform well even in a heightened stress environment, the risks facing first loss and junior rated bonds within the capital structure of CMBS transactions have increased with expectations of a rise in commercial real estate defaults from current low levels. Even a relatively modest increase in commercial real estate losses could be material for these portfolios. In reviewing CRE CDOs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches. Additional ratings considerations include seasoning of underlying collateral, obligor diversity, actual bond performance and projected losses. G-Force 2006-1 is collateralized by all or a portion of 83 classes of CMBS from 39 separate underlying transactions (78%), the seven most junior classes of G-Force 2005-RR2 (17.5%) and three CRE loans that have been defeased (4.5%). All performance and collateral information is based on the March 2008 trustee report and discussions with the collateral administrator. The pool's obligor diversity is considered average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1997 to 2006 (an average of 5.6 years of seasoning). All 2005 and 2006 CMBS collateral is rated 'AAA'. Based on Fitch derived ratings, approximately 21.3% of the collateral currently is rated below 'B-' or not rated, and therefore, is more susceptible to losses in the near-term. While overall a significant portion of the collateral is below investment grade, approximately 46.4% is investment grade. G- Force 2006-1 holds 16.6% in the 'BB' category and 15.8% in the 'B' category. The collateral has realized $28.9 million in losses to date, which represents 3.3% of the original collateral. Based on the original below 'B-' balance of $204.8 million, this loss rate equates to only a 14.1% loss rate on the below 'B-' collateral. Additional losses are projected with $268.1 million of the loans in the underlying CMBS transactions currently 60 days or more delinquent. Additionally, $132.3 million of the loans in the underlying CMBS transactions in G-Force 2005-RR2 are currently 60 days or more delinquent, and any losses would directly translate into losses for G-Force 2006-1, which owns 100% of the seven most junior classes of G-Force 2055-RR2. The ratings on classes A-1, A-2, A-3, SSFL, JRFL, B, C, D and E address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of the principal by the legal final maturity date. The ratings of the class F, G, H, and J notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. GLOBAL FUELS: Case Summary & 14 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Global Fuels, LLC P.O. Box 606 Jackson, TN 38302 Bankruptcy Case No.: 08-11334 Type of Business: The Debtor provides diesel fuels. Chapter 11 Petition Date: April 11, 2008 Court: Western District of Tennessee (Jackson) Judge: G. Harvey Boswell Debtors' Counsel: Michael T. Tabor, Esq. (marissav@bellsouth.net) 203 S. Shannon P.O. Box 2877 Jackson, TN 38302-2877 Tel: (731) 424-3074 Total Assets: $1,768,694 Total Debts: $2,132,654 Consolidated Debtors' List of 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Tennessee Bank service station $1,805,502 National Assoc. located on 4.2 acres; 325 Oil Well Rd. Value of Security: Jackson, TN 38305 1,700,000.00 Superway Petroleum $78,000 Sam Safia 795 Airways Blvd. Jackson, TN 38301 Mohammed Haiba $75,000 c/o Greg Minton, Atty. P.O. Box 359 Medina, TN 38355 Gary & Lisa Taylor inventory; value of $66,000 Gary A. Taylor Investment security: $20,0000 Company David Willoughby $39,000 Willoughby, Inc. Anderson Crenshaw $14,664 Marlin Leasing $11,258 Madison County property taxes $11,014 US Food Service, Inc. $8,492 NACM/Lamar Ad. $7,250 LTD Financial $6,956 Dell Financial State of Tennessee excise tax $6,000 Department of Revenue Jackson Restaurant Supply $2,908 Commercial Recovery $154 GREENPOINT MORTGAGE: Moody's Downgrades Ratings on Two Tranches --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 2 tranches from Greenpoint Mortgage Funding Trust 2005-HY1. The collateral backing the transaction consists primarily of hybrid, adjustable- rate mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: Greenpoint Mortgage Funding Trust 2005-HY1 -- Cl. M-5, Downgraded to Ba3 from Baa2 -- Cl. M-6, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade GSAMP TRUST: Eroding Credit Support Cues S&P's Rating Downgrades ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 67 classes of mortgage pass-through certificates from 12 transactions issued by GSAMP Trust, JPMorgan Mortgage Acquisition Trust, Long Beach Mortgage Loan Trust, and Terwin Mortgage Trust. Concurrently, S&P placed its ratings on 18 classes on CreditWatch with negative implications and affirmed S&P's ratings on 31 classes from these transactions. Of the 12 subprime transactions S&P reviewed, six were issued in 2005 and six were issued in 2006. The downgrades reflect deterioration in available credit support to these classes. S&P addressed only the defaulted classes from the affected 2006 deals because S&P had analyzed these transactions as part of another recent review. Although a combination of subordination, excess spread, and overcollateralization provides credit support to these subprime transactions, O/C has been reduced to zero for all 12 transactions, which are seasoned 18 to 36 months. S&P lowered 15 ratings to 'D' due to the complete erosion of credit support and realized losses incurred by the classes. As of the March 2008 remittance period, cumulative losses for the affected 2005 deals, as a percentage of the respective original pool balances, ranged from 1.85% (Terwin Mortgage Trust Series TMTS 2005-6HE) to 3.40% (Long Beach Mortgage Loan Trust 2005-WL1, structure 1). Severe delinquencies (90-plus days, foreclosures, and REOs) for the 2005 affected transactions ranged from 23.65% (Long Beach Mortgage Loan Trust 2005-WL1, structure 2) to 39.66% (Long Beach Mortgage Loan Trust 2005-3) of the current pool balances. The amount of severe delinquencies has significantly increased for all 2005 deals during recent months, and the delinquency pipelines do not indicate that these levels will improve. Most of these deals are failing their delinquency and loss triggers due to the high levels of delinquencies and significant monthly net losses. S&P placed its ratings on 18 classes from three transactions issued in 2005 on CreditWatch negative. While each of the certificate classes with ratings placed on CreditWatch negative lacks what S&P believes to be a sufficient amount of credit enhancement relative to projected losses, S&P will take no further rating actions until S&P has completed additional analysis. S&P expects to further evaluate the date of the projected defaults versus the date of payment in full, as well as the relationships between projected credit support and projected losses throughout the remaining life of each certificate. The affirmations of the remaining classes from these transactions reflect loss coverage percentages that were sufficient at the current rating levels as of the March 2008 distribution period. Ratings Lowered GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-WMC1 M-4 362341PY9 CCC A+ 2005-WMC1 M-5 362341PZ6 CCC A 2005-WMC1 M-6 362341PW3 CCC A- 2005-WMC1 B-1 362341QA0 CCC BBB+ 2005-WMC1 B-2 362341QB8 CC BBB+ 2005-WMC1 B-3 362341QC6 CC BB+ 2005-WMC1 B-4 362341QD4 CC B 2005-WMC1 B-5 362341QE2 D CCC 2006-FM1 B-4 362334PW8 D CC JPMorgan Mortgage Acquisition Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-WMC3 M-10 46629KAR0 D CC Long Beach Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-3 M-4 542514PA6 CCC A+ 2005-3 M-5 542514PB4 CCC A 2005-3 M-6 542514PC2 CCC A- 2005-3 M-7 542514PD0 CC BBB+ 2005-3 M-8 542514PE8 CC BB 2005-3 M-9 542514PF5 CC BB- 2005-3 M-10 542514PG3 CC B 2005-3 M-11 542514PH1 D CCC 2005-WL1 III-M1 542514MF8 AA AA+ 2005-WL1 III-M2 542514MG6 BBB AA 2005-WL1 III-M3 542514MH4 B A+ 2005-WL1 I/II-M5 542514LM4 BBB A 2005-WL1 III-M4 542514MJ0 CCC A 2005-WL1 I/II-M6 542514LN2 BB- A- 2005-WL1 III-M5 542514MK7 CCC A- 2005-WL1 I/II-M7 542514LP7 B BBB+ 2005-WL1 III-M6 542514ML5 CCC BBB+ 2005-WL1 I/II-M8 542514LQ5 CCC BBB 2005-WL1 III-M7 542514MM3 CCC BBB 2005-WL1 III-M8 542514MN1 CC BBB 2005-WL1 I/II-M9 542514LR3 CCC BBB- 2005-WL1 III-M9 542514MS0 CC BBB- 2005-WL1 I/II-B1 542514LS1 CC BB+ 2005-WL1 I/II-M10 542514LW2 CCC BB+ 2005-WL1 III-B1 542514MP6 CC BB+ 2005-WL1 III-B2 542514MQ4 D BB 2005-WL1 I/II-B2 542514LT9 D BB- 2005-WL1 I/II-B3 542514LU6 D BB- 2005-WL1 III-B3 542514MR2 D B+ 2005-WL2 M-3 542514ND2 A AA- 2005-WL2 M-4 542514NE0 BBB A+ 2005-WL2 M-5 542514NF7 BB A+ 2005-WL2 M-6 542514NG5 B A 2005-WL2 M-7 542514NH3 CCC BBB+ 2005-WL2 M-8 542514NJ9 CCC BBB+ 2005-WL2 M-9 542514NK6 CCC BBB 2005-WL2 M-10 542514NL4 CCC BB+ 2005-WL2 B-1 542514NQ3 CC B 2005-WL2 B-2 542514NR1 CC CCC 2005-WL2 B-3 542514NS9 D CCC 2006-2 M-10 542514UE2 D CC 2006-3 B 542514UX0 D CC 2006-4 M-11 54251MAR5 D CC 2006-WL2 B-1 542514SP0 D CC Terwin Mortgage Trust Rating Transaction Class CUSIP To From TMTS 2005-16HE M-4A 881561ZP2 CCC BB TMTS 2005-16HE M-4B 881561ZQ0 CCC B TMTS 2005-16HE M-5A 881561ZR8 CC B TMTS 2005-16HE M-5B 881561ZS6 CC B TMTS 2005-16HE M-6A 881561ZT4 CC B TMTS 2005-16HE M-6B 881561ZU1 CC B TMTS 2005-16HE B-1 881561ZV9 CC CCC TMTS 2005-16HE B-2 881561ZW7 CC CCC TMTS 2005-16HE B-3 881561ZX5 D CCC TMTS 2005-6HE B-2 881561RG1 BB BBB+ TMTS 2005-6HE B-3 881561RH9 B BB TMTS 2005-6HE B-4 881561TH7 CC CCC TMTS 2005-6HE B-5 881561TJ3 D CCC Ratings Placed on CreditWatch Negative GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-WMC1 M-1 362341PU7 AA+/Watch Neg AA+ 2005-WMC1 M-2 362341PV5 AA/Watch Neg AA 2005-WMC1 M-3 362341PX1 AA-/Watch Neg AA- Long Beach Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-3 I-A 542514NT7 AAA/Watch Neg AAA 2005-3 II-A2 542514NV2 AAA/Watch Neg AAA 2005-3 II-A3 542514NW0 AAA/Watch Neg AAA 2005-3 M-1 542514NX8 AA+/Watch Neg AA+ 2005-3 M-2 542514NY6 AA/Watch Neg AA 2005-3 M-3 542514NZ3 AA-/Watch Neg AA- Terwin Mortgage Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-16HE AF-3 881561ZB3 AAA/Watch Neg AAA 2005-16HE AV-2 881561ZF4 AAA/Watch Neg AAA 2005-16HE AV-3 881561ZG2 AAA/Watch Neg AAA 2005-16HE M-1A 881561ZH0 AA+/Watch Neg AA+ 2005-16HE M-1B 881561ZJ6 AA+/Watch Neg AA+ 2005-16HE M-2A 881561ZK3 AA/Watch Neg AA 2005-16HE M-2B 881561ZL1 AA/Watch Neg AA 2005-16HE M-3A 881561ZM9 A+/Watch Neg A+ 2005-16HE M-3B 881561ZN7 BBB+/Watch Neg BBB+ Ratings Affirmed GSAMP Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-WMC1 A-3 362341PS2 AAA 2005-WMC1 A-4 362341PT0 AAA Long Beach Mortgage Loan Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-WL1 I-A-1 542514LC6 AAA 2005-WL1 II-A4 542514LG7 AAA 2005-WL1 III-A3 542514ME1 AAA 2005-WL1 I/II-M1 542514LH5 AA+ 2005-WL1 I/II-M2 542514LJ1 AA 2005-WL1 I/II-M3 542514LK8 AA- 2005-WL1 I/II-M4 542514LL6 A+ 2005-WL2 I-A1 542514NM2 AAA 2005-WL2 I-A2 542514MV3 AAA 2005-WL2 II-A1 542514NN0 AAA 2005-WL2 II-A2 542514NP5 AAA 2005-WL2 III-A1 542514MW1 AAA 2005-WL2 III-A1A 542514MX9 AAA 2005-WL2 III-A3 542514MZ4 AAA 2005-WL2 III-A4 542514NA8 AAA 2005-WL2 M-1 542514NB6 AA+ 2005-WL2 M-2 542514NC4 AA Terwin Mortgage Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-16HE AF-2 881561ZA5 AAA 2005-16HE AF-4 881561ZC1 AAA 2005-16HE AF-5 881561ZD9 AAA 2005-6HE A-1C 881561QX5 AAA 2005-6HE S 881561QY3 AAA 2005-6HE M-1 881561QZ0 AA+ 2005-6HE M-2 881561RA4 AA+ 2005-6HE M-3 881561RB2 AA 2005-6HE M-4 881561RC0 AA 2005-6HE M-5 881561RD8 A+ 2005-6HE M-6 881561RE6 A+ 2005-6HE B-1 881561RF3 A HARRINGTON SCHWEERS: Involuntary Chapter 11 Case Summary -------------------------------------------------------- Alleged Debtor: Harrington Schweers Dattilo & McClelland, P.C. 100 Ross St. Pittsburgh, PA 15219 Case Number: 08-22622 Type of Business: The Debtor is a law firm. Involuntary Petition Date: April 22, 2008 Court: Western District of Pennsylvania (Pittsburgh) Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Joyce I. Freehling litigation $10,000 106 Carol Drive Saxonburg, PA 16056 Lloyd M. Miller litigation $10,000 157 Silvergrass Pass Grayson, GA 30017 Deborah E. Miller litigation $10,000 157 Silvergrass Pass Grayson, GA 30017 Kay Wilbert litigation $10,000 201 Colony Court Pittsburgh, PA 15205 Albie P. Rutyna litigation $10,000 11 Ciara Drive New Castle, PA 16105 Mary Jane Rutyna litigation $10,000 11 Ciara Drive New Castle, PA 16105 Judith M. Johnson litigation $10,000 109 Industry Street Pittsburgh, PA 15210 Gertrude Stevenson litigation $10,000 230 Locust Street Butler, PA 16001 George P. Nowack litigation $10,000 1311 Apache Drive Espyville, PA 16424 Ronald Giamberdini litigation $10,000 62 Windcrest Road Cecil, PA 15231 Barbara Giamberdini litigation $10,000 62 Windcrest Road Cecil, PA 15231 HOMEBANC MORTGAGE: Moody's Downgrades Ratings on Three Tranches --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 3 tranches from Homebanc Mortgage Trust 2007-1. Two downgraded tranches remain on review for possible further downgrade. Additionally, 6 tranches were placed on review for possible downgrade. The collateral backing the transaction consists primarily of first-lien, adjustable-rate, Alt-A mortgage loans. The ratings were downgraded or placed on review, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: Homebanc Mortgage Trust 2007-1 -- Cl. I-1A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-1X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-2A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. I-2X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-3A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. I-3X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Ba3 from Aa2 -- Cl. I-B-2, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. I-B-3, Downgraded to B2 from Ba1; Placed Under Review for further Possible Downgrade HOOP HOLDINGS: Wants Goulston & Storrs as Real Estate Counsel ------------------------------------------------------------- Hoop Holdings LLC and its debtor-affiliates seek permission from the United States Bankruptcy Court for the District of Delaware to employ Goulston & Storrs PC as special real estate counsel nunc pro tunc to the Debtors' bankruptcy filing. The Debtors relate that G&S is well acquainted with the Debtors' real estate lease portfolio and issues related thereto because they engaged G&S to advise them regarding their store leases in January 2008. G&S will advise the Debtors on issues relating to their store leases, including their disposition. The Debtors state that the services rendered by G&S will not duplicate the services rendered by any other professionals employed by the Debtors in these bankruptcy cases. David M. Abromowitz, Esq., a director of Coulston & Storrs PC tells the Court that the firm's customary hourly rates for professionals are: Professionals Hourly Rate ------------- ----------- Directors $440 - $690 Counsel $400 - $650 Associates $265 - $445 Paralegals $170 - $330 Mr. Abromowitz adds that the Debtors paid G&S a retainer of $100,000. Subject to Court approval, the Debtors agreed that G&S may hold the retainer as a security throughout the Debtors' bankruptcy cases until G&S' fees and expenses are approved on a final basis. Mr. Abromowitz assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About Hoop Holdings Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and operates gift, novelty, and souvenir shops. The company and two of its affiliates (Hoop Retail Stores, LLC and Hoop Canada Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008 (Bankr. D. Del. Lead Case No.08-10544). Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 has not appointed creditors to serve on an official committee of unsecured creditors or examiner under these cases. When the Debtors' filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. HSI ASSET: Seven Tranches Get Moody's Rating Cuts on Delinquencies ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 7 tranches from two HSI Asset Loan Obligation Trust deals. Three tranches remain on review for possible further downgrade. Additionally, 14 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed, Alt-A mortgage loans. The ratings were downgraded or placed on review, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: HSI Asset Loan Obligation Trust 2006-2 -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-8, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-10, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-11, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-A-12, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-IO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-IO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Ba3 -- Cl. B-3, Downgraded to Ca from B3 Issuer: HSI Asset Loan Obligation Trust 2007-WF1 -- Cl. M-4, Downgraded to Baa1 from A3 -- Cl. M-5, Downgraded to B1 from Baa1 -- Cl. M-6, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade HUBCO INC: Files Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: HUBCO, Inc. 11714 Charles Road Houston, TX 77041 Bankruptcy Case No.: 08-32465 Type of Business: The Debtor manufactures textile products. See: http://www.hubcoinc.com/ Chapter 11 Petition Date: April 17, 2008 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtors' Counsel: Margaret Maxwell McClure, Esq. (mccluremar@aol.com) 909 Fannin, Suite 3810 Houston, TX 77010 Tel: (713) 659-1333 Fax: (713) 658-0334 Estimated Assets: unknown Estimated Debts: unknown The Debtor did not file a list of its Largest Unsecured Creditors. HUDSON MEZZANINE: Moody's Reviews 'Ba2' Rating on $240 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Hudson Mezzanine Funding 2006-2, Ltd.: Class Description: $240,000,000 Class A-1 Floating Rate Notes due 2042 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $46,000,000 Class A-2 Floating Rate Notes due 2042 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $56,000,000 Class B Floating Rate Notes due 2042 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $20,000,000 Class C Deferrable Floating Rate Notes due 2042 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $18,000,000 Class D Deferrable Floating Rate Notes due 2042 -- Prior Rating: Ca -- Current Rating: C Class Description: $4,000,000 Class E Deferrable Floating Rate Notes due 2042 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. HUDSON MEZZANINE: Moody's Reviews 'Ba3' Rating on $1.2 Bil Swap --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade the ratings on these notes issued by Hudson Mezzanine Funding 2006-1, Ltd.: Class Description: $1,200,000,000 Senior Swap with Goldman Sachs International -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $120,000,000 Class A-b Floating Rate Notes due 2042 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $ 110,000,000 Class A-f Floating Rate Notes due 2042 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $230,000,000 Class B Floating Rate Notes due 2042 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $170,000,000 Class C Deferrable Floating Rate Notes due 2042 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $84,000,000 Class D Deferrable Floating Rate Notes due 2042 -- Prior Rating: Ca -- Current Rating: C Class Description: $26,000,000 Class E Deferrable Floating Rate Notes Due 2042 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. INTERSTATE BAKERIES: Court Adjourns Confirmation Hearing Sine Die ----------------------------------------------------------------- The Honorable Jerry W. Venters of the U.S. Bankruptcy Court for the Western District of Missouri has continued, to a date yet to be determined, the hearing to consider confirmation of the First Amended Joint Plan of Reorganization filed by Interstate Bakeries Corporation and eight of its subsidiaries and affiliates. As reported in the Troubled Company Reporter on April 21, 2008, the Debtors told the Court that additional time is necessary for it to continue its ongoing discussions with multiple parties regarding modifications to its plan of reorganization, and related exit financing, that would allow IBC to emerge from Chapter 11 as a stand-alone company. The additional time, the Debtors explained, is also needed so it could continue to pursue the on- going sale process which was initiated to sell all or portions of the Debtors' businesses and assets in the event that a stand-alone reorganization plan is not achievable. The Debtors intended to file further pleadings with the Court regarding either of these options as appropriate. The Court continued the hearing to allow the Debtors to continue discussions with multiple parties regarding modifications to their Plan, and related exit financing that would allow them to emerge from Chapter 11 as a stand-alone company. "The parties are still in talks and want more time to continue those," IBC spokeswoman Maya Pagoda had told The Associated Press. The Debtors said in a statement that they also need more time to continue to pursue the on-going sale process, which was initiated to sell all or portions of their businesses and assets in the event that a stand-alone reorganization plan is not achievable. One issue looming over the Plan is that IBC has been unable to reach agreement with the International Brotherhood of Teamsters, which represents about 9,000 of the company's 25,000 workers, The Kansas City Star had reported. The union has refused to agree to additional concessions IBC is seeking so it can "remake its delivery system." IBC said those changes are necessary "to have a shot at future success." At the Teamsters' insistence, the Debtors agreed to insert language in their Amended Disclosure Statement that IBC has not had substantive talks with the union since October 2007. The Teamsters, along with Yucaipa Cos., a Los Angeles hedge fund headed by billionaire Ron Burkle, have previously told the Court that they intended to make an offer for IBC, but have yet to file a competing Chapter 11 plan with the court. At the Confirmation Hearing, the Court will also hear matters relating to the Debtors' proposed substantive consolidation, and the request of the Official Committee of Unsecured Creditors to designate the IBC Creditor Trustee. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received Court approval of the First Amended Disclosure Statement. (Interstate Bakeries Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). INTERSTATE BAKERIES: Court Sets DIP Facility Hearing April 29 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri will convene a hearing on April 29, 2008, at 1:30 p.m., to consider approval of a request by Interstate Bakeries Corp. and its debtor-affiliates to enter into a second amended debtor-in- possession credit facility, which provides for an increase in the aggregate principal amount of commitments from $200 million to $250 million, and an extension of the maturity date from June 2, 2008, to Sept. 30, 2008. As reported in the Troubled Company Reporter on April 21, 2008, IBC executed a commitment for financing with certain of the existing lenders under its current debtor-in-possession credit facility, other new lenders and JPMorgan Chase Bank NA, as administrative agent and collateral agent for the lenders, which provides for an amended and restated credit facility to replace the current DIP credit facility that expires on June 2, 2008. Under the terms of the commitment letter, the maturity of the DIP credit facility would be extended to Sept. 30, 2008, and the amount available for borrowing under the DIP credit facility would be increased from $200 million to $250 million. The commitment is subject to a number of conditions, including final documentation and Bankruptcy Court approval. Interstate Bakeries filed a motion with the U.S. Bankruptcy Court for the Western District of Missouri seeking authorization to enter into the amended and restate DIP credit facility and requesting that a hearing on this matter be held on April 29, 2008, a date that had previously been held on the court's calendar. There can be no assurance that the company will be able to obtain financing on the terms proposed in the amended and restated DIP credit facility, or at all. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received Court approval of the First Amended Disclosure Statement. (Interstate Bakeries Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). IMPAC SECURED: Delinquency Cues Moody's Rating Cuts on 32 Tranches ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 32 tranches from 10 Alt-A transactions backed by Impac originated collateral. Additionally, 20 senior tranches were confirmed at Aaa. The collateral backing these transactions consists primarily of first- lien, fixed and adjustable-rate, Alt-A mortgage loans. Ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. Certain tranches were confirmed due to additional enhancement provided by structural features. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: Bear Stearns Asset Backed Securities I Trust 2006-IM1 -- Cl. A-1, Confirmed at Aaa -- Cl. A-2, Confirmed at Aaa -- Cl. A-3, Confirmed at Aaa -- Cl. A-4, Confirmed at Aaa -- Cl. A-5, Confirmed at Aaa -- Cl. A-6, Confirmed at Aaa -- Cl. A-7, Downgraded to A2 from Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2005-2 -- Cl. A-1, Downgraded to Aa1 from Aaa -- Cl. A-1M, Downgraded to A1 from Aaa -- Cl. A-2B, Confirmed at Aaa -- Cl. A-2C, Downgraded to Aa3 from Aaa -- Cl. A-2D, Downgraded to A1 from Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-1 -- Cl. 1-A-1-1, Downgraded to A3 from Aaa -- Cl. 1-A-1-2, Downgraded to Ba1 from Aaa -- Cl. 1-A-2A, Confirmed at Aaa -- Cl. 1-A-2B, Downgraded to Baa1 from Aaa -- Cl. 1-A-2C, Downgraded to Ba1 from Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-2 -- Cl. 1-A1-1, Downgraded to Baa1 from Aaa -- Cl. 1-A1-2, Downgraded to Ba3 from Aaa -- Cl. 1-A2-A, Downgraded to A2 from Aaa -- Cl. 1-A2-B, Downgraded to Ba2 from Aaa -- Cl. 1-A2-C, Downgraded to Ba3 from Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-3 -- Cl. A-2, Downgraded to A1 from Aaa -- Cl. A-2M, Downgraded to Ba3 from Aaa -- Cl. A-3, Downgraded to A1 from Aaa -- Cl. A-3M, Downgraded to Ba3 from Aaa -- Cl. A-4, Downgraded to Aa3 from Aaa -- Cl. A-4M, Downgraded to Ba2 from Aaa -- Cl. A-5, Downgraded to A1 from Aaa -- Cl. A-5M, Downgraded to Ba2 from Aaa -- Cl. A-6, Downgraded to A1 from Aaa -- Cl. A-6M, Downgraded to Ba3 from Aaa -- Cl. A-7, Downgraded to Ba3 from Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-4 -- Cl. A-1, Downgraded to A1 from Aaa -- Cl. A-2A, Downgraded to Aa2 from Aaa -- Cl. A-2B, Downgraded to A1 from Aaa -- Cl. A-2C, Downgraded to A2 from Aaa -- Cl. A-M, Downgraded to Ba3 from Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2006-5 -- Cl. 1-A1-A, Confirmed at Aaa -- Cl. 1-A1-B, Confirmed at Aaa -- Cl. 1-A1-C, Confirmed at Aaa -- Cl. 1-AM, Downgraded to Ba2 from Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2007-1 -- Cl. A-1, Confirmed at Aaa -- Cl. A-2, Confirmed at Aaa -- Cl. A-3, Confirmed at Aaa -- Cl. A-M, Downgraded to Baa3 from Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2007-2 -- Cl. 1-A1-A, Confirmed at Aaa -- Cl. 1-A1-B, Confirmed at Aaa -- Cl. 1-A1-C, Confirmed at Aaa Issuer: Impac Secured Assets Corp. Mortgage Pass-Through Certificates, Series 2007-3 -- Cl. A1-A, Confirmed at Aaa -- Cl. A1-B, Confirmed at Aaa -- Cl. A1-C, Confirmed at Aaa INDEPENDENCE COUNTY: S&P Cuts Rating on $29.3 Mil. Bonds to 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its underlying rating on Independence County, Arkansas' $29.3 million power revenue bonds due 2033 to 'B' from 'BB-'. The rating remains on CreditWatch with negative implications. The county issued the bonds and used proceeds to fund 11.1 MW hydroelectric project Independence County Hydroelectric, which is the obligor for bond repayment. ACA Financial Guaranty Corp. (ACA; CCC/Watch Dev/--) insures the bonds. The downgrade reflects the continued weakening of the project's operating cash flow and liquidity due primarily to the delay in adding a cap to Dam 3 to increase its height by three feet. The delay has been caused by heavy rainfall and continued higher-than- normal river levels. Currently, government authorities are controlling releases from upstream dams to mitigate the flooding downstream. The uncertainty of the releases prevents construction scheduling. The county now estimates the cap will be completed in the summer of 2008. The prior target completion date was end of March or early April, but now it could be up to five months later than that. S&P estimates that there are sufficient funds in project accounts to cover the May 1, 2008 principal and interest payments of about $1.3 million on the senior bonds, but not enough funds to cover the scheduled principal and interest payments on the subordinate bonds (not rated) of about $700,000. S&P expects that after the May 1 payment on the senior bonds, there will be about $1.6 million remaining in the senior bond debt service reserve account. These funds are not available to the subordinate bonds. Under the terms of the subordination agreement, the subordinate bonds do not have rights under a payment default situation to cross-accelerate the senior debt. However, project operations and maintenance expenses are paid after subordinate debt service, so there is a risk to O&M payments. This is another factor in the downgrade given the reduced cash flows from operations. The senior bond indenture allows the bond insurer, ACA, to release gross receipts from the waterfall to cover O&M--i.e., to pay O&M expenses before subordinate debt. ACA insures both the rated senior and unrated subordinated debt. The county is exploring an injection of cash from the City of Clarksville, Arkansas, the power off-taker, that would help cover the May 1 subordinate debt payment, some capital improvements, and a number of O&M payments. The proposal is that in exchange for this cash injection, Clarksville will receive a discount on future power costs. While this cash infusion would provide credit support for the project now, such discounts may lower future cash flow and increase credit risk. Clarksville expects to decide on this funding at the end of this week. "The continued CreditWatch negative listing reflects the potential for a further downgrade if we do not have assurance that the project can meet its financial obligations with operational cash flow and liquidity," said Standard & Poor's credit analyst Trevor D'Olier-Lees. INERGY LP: Moody's Confirms 'Ba3' Ratings and Positive Outlook -------------------------------------------------------------- Moody's Investors Service affirmed Inergy, L.P.'s ratings and left the outlook positive in conjunction with the company's proposed $150 million add-on notes offering. Moody's is assigning a B1 (LGD 4, 68%) rating to the company's add-on notes offering while simultaneously affirming the company's Ba3 corporate family, Ba3 probability of default rating, the B1 and LGD 4 (the point estimate is moving from 67% to 68%) ratings on the existing senior unsecured notes, and its SGL-3 speculative grade liquidity ratings. Moody's does not rate the company's $425 million senior secured revolving credit facilities ($350 million acquisition facility and $75 million working capital facility) or the company's general partner Inergy Holdings L.P. The positive outlook reflects Inergy's ongoing diversification strategy into the midstream arena which provides the company with growth of its more durable fee-based earnings and cash flows while helping to somewhat offset the seasonality and declining organic volumes due to rising customer conservation that affect its propane cash flows. With the recently acquired Arlington Storage Corporation, LLC, and the future development of the Thomas Corner natural gas storage facility, Inergy is poised to become one the largest natural gas storage operators in the Northeast. When combined with the completion of the West Coast project, about 30% to 40% of NRGY's consolidated EBITDA is expected to be generated from the more stable midstream segment. The positive outlook also assumes the company will continue on its path of improving its financial profile. While leverage has (adjusted debt EBITDA) increased to approximately 4.1x from 3.5x, it is still within the range acceptable at the current ratings level and in Moody's view, still has the momentum to improve over the next 12 to 18 months. The increase in the current leverage is partially driven by the large upfront capital spending needed to complete NRGY's West Coast and Northwest lateral projects. However, once completed, these projects are expected to generate additional fee-based EBITDA, which along with recent acquisitions would bring run-rate leverage back to within the 3.5x range over the next couple of quarters. While Moody's expects Inergy to remain a consolidator in the fragmented propane industry, the positive outlook assumes the company will fund those acquisitions with sufficient equity so as to maintain it its trajectory of lower leverage that is more in-line with a higher rating. However, an upgrade would require demonstration that the West Coast and North Lateral projects are completed on time and on budget, and that essentially all of the additional capacity locked up under firm, fee-based contracts with almost no commodity price exposure. In addition, an upgrade would also require that there is sufficient up front equity funding done in conjunction with future acquisitions in order to maintain the momentum of leverage (measured by adjusted debt EBTIDA) trending towards 3.0x. The outlook could revert to stable if leverage is not maintained within the 3.5x to 4.0x range or if the West Coast and North Lateral projects are delayed or run into cost overruns which would result in a delayed leverage improvement or if the company cannot maintain its retail propane margins in the face of increasing customer conservation. The Ba3 corporate family rating is supported by the company's increased scale based on asset size, which is in-line with other Ba3 rated MLP propane peers. However, with completion of expansion projects at the Northeast storage facilities and West Coast NGL facilities, NRGY's pro-forma scale is expected to be on the higher end of the Ba3 MLP Propane ratings universe. The company's expansion into the midstream sector provides durable fee-based recurring earnings to offset the seasonal cash flows from propane operations, providing NRGY greater diversification than some of its similarly rated peers, though somewhat offset by its larger wholesale business which carries lower margins. The company's average profitability and returns, leverage, and expected cash flow coverage of interest, cash distributions, and capital spending are also in line with the other Ba rated propane companies. S&P expects Inergy to remain acquisitive while the highly fragmented propane distribution industry heads towards consolidation, however, the Ba3 rating is supportive of future acquisitions as long as sufficient equity financing is provided. The SGL-3 rating is supported by Moody's expectation that internal cash flows will cover the majority of maintenance capital expenditures, interest payments, working capital requirements, and cash distributions to unit holders; the company will maintain sufficient cushion under the facilities' covenants; and ample availability under the revolving credit facilities. The SGL-3 rating continues to be tempered by the company's need to distribute all of its free cash flow to the Master Limited Partnership unit holders; significant scale of organic projects which may require a degree of funding under the credit facilities assuming; and the seasonality of the propane business which requires use of the credit facilities during inventory build up and subsequent receivable collections. The credit facilities are secured by all Inergy's assets leaving no alternate sources of readily available liquidity. NRGY, headquartered in Kansas City, Missouri, is a publicly traded master limited partnership that owns and operates one of the largest geographically diverse retail and wholesale propane supply, marketing, and distribution businesses in the United States. Additionally, NRGY owns and operates a natural gas storage facility located approximately 150 miles northwest of New York City and a natural gas liquids business located near Bakersfield, California. INERGY LP: S&P Attaches 'B+' Rating on $200 Mil. Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue credit rating to Inergy L.P.'s $200 million senior unsecured notes due 2016 and, at the same time, assigned its '5' recovery rating to this debt and affirmed its '5' recovery rating on Inergy's unsecured debt. The '5' recovery rating indicates that lenders can expect modest (10%-30%) recovery in the event of payment default. Standard & Poor's also affirmed the company's corporate credit rating of 'BB-'. The offering proceeds will refinance debt on Inergy's revolving acquisition credit facility. The outlook remains stable. As of Dec. 31, 2007, Kansas City, Missouri-based retail and wholesale propane distributor Inergy had $876 million of debt. "The rating on Inergy reflects the partnership's weak business risk profile and aggressive financial profile," noted Standard & Poor's credit analyst Michael V. Grande. Rating concerns include the master limited partnership structure, an aggressive growth strategy, and exposure to weather, seasonal demand patterns, and changing commodity prices. "These concerns are only partially offset by the propane segment's favorable operating characteristics, which include a high percentage of residential customers in attractive markets, and Inergy's natural gas storage operations that provide more stable cash flows," he continued. Exposure to weather, seasonal demand patterns, and changing commodity prices remain a credit concern. Warm winters over the past three years and current high propane prices continue to contribute to customer conservation, which, in turn, may factor into reduced profitability and cash flows. Inergy has partially mitigated these risks by improving margins despite warmer weather and high commodity prices. However the company's ability to protect its margins will remain a key rating consideration. The outlook on Inergy is stable. The stable outlook is based on the solid operating performance of the propane and midstream segments and the expectation that the company will maintain its current financial metrics. An upgrade or positive outlook revision depends on further growth of midstream assets, sustained high margins from the propane segment, and disciplined, conservatively financed acquisitions. Conversely, Standard & Poor's could lower the rating or revise the outlook to negative if the financial profile deteriorates due to subpar cash flow, deteriorating distribution coverage, or significant acquisition activity that weakens financial metrics. INPHONIC INC: Treasury Balks at Plan and Disclosure Statement ------------------------------------------------------------- The Department of Treasury of the State of Michigan objects to InPhonic Inc. and its debtor-affiliates, and the Official Committee of Unsecured Creditors' Joint Chapter 11 Plan of Liquidation dated April 14, 2008, and a Disclosure Statement explaining that plan to the United States Bankruptcy Court for the District of Delaware. As reported by the Troubled Company Reporter on April 17, 2008, the Debtors and the Committee delivered a Joint Liquidation Plan and a Disclosure Statement explaining that plan. The objection alleges that the Plan does not provide for the payment of interest on the Treasury's administrative and priority tax claims of $21,013 in the aggregate, if claims are not paid on the distribution date. The Debtors' business operations resulted in liabilities to the Treasury for withholding taxes and use taxes. The Treasury says interest on priority and secured tax claims must be paid at a rate determined by the "prevailing market rate for a loan of a term equal to the payout period." The Treasury's current interest rate for bankruptcy tax claims is 9%. Accordingly, the Treasury asks the Court to deny the Debtors' request for confirmation. Overview of the Plan The Plan provides for the orderly liquidation of the Debtors' estates, and for the merger of all of their estates and consolidation of assets and liabilities into SN Liquidation on the effective date. Because substantially all of the Debtors' operating assets have been sold as part of the sale, the Plan further provides for the creation of litigation trust to administer the Debtors' remaining assets and assess the value of these assets. Pursuant to the Plan, eight distinct legal entities are being liquidated. The remaining assets, among other things, include any causes of action against the recipients of stock redemption payments and claims, former directors and officers. These causes of action are central to the success of the Plan and the distribution of any value to the general unsecured claim holders. On Dec. 13, 2008, the Court approved the Debtors' request to sell substantially all of their assets to Adeptio INPC Funding LLC for $50,000,000, under an asset purchase agreement dated Nov. 8, 2007. Treatment of Claims and Interest Under the Plan, these creditors are expected to get 100% recovery including: -- administrative claim, totaling $1,482,000; -- priority tax claims; and -- priority non-tax claims. Assume Liability Claims will be satisfied by Adeptio INPC pursuant to the terms of the asset purchase agreement. After the effective date, holders of Other Secured Claims are expected to get, either: i) cash equal to the amount of the allowed claims; ii) the collateral securing the claims; or iii) other treatment agreed by the Debtors and holders. Holders of the Allowed Secured Lender Claims will receive a $20,000,000 Secured Lender's Deficiency Claim, which entitle the holder to a pro rata share in the litigation trust interest. Each Holder of an Allowed General Unsecured Claim will receive its pro rata share in the ligation trust interest. The Debtors believe there are a total of approximately $204,964,908 in General Unsecured Claims. Intercompany and Equity Claims will be canceled. Holders of these claims will not receive or retain any property on account of their claims. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2aad A full-text copy of the Joint Chapter 11 Plan of Liquidation is available for free at http://ResearchArchives.com/t/s?2aae About InPhonic Inc. Headquartered in Washington, DC, InPhonic Inc. (NASDAQ:INPC)-- http://www.inphonic.com/-- provides internet and wireless services. The company through its wholly owned subsidiary, CAIS Acquisition II, market broadband and VOIP services. The company maintained operations centers in Largo, Maryland; Reston, Virginia; and Great Falls, Virginia. As reported in Troubled Company Reporter on Feb. 12, 2008, the Court authorized the Debtors to change their name and the caption of the bankruptcy case to SN Liquidation, Inc. The company and its debtor-affiliates filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to 07-11673). Mary E. Augustine, Esq., and Neil B. Glassman, Esq., at The Bayard Firm, in Wilmington, Delaware, represent the Debtors. The Debtors selected BMC Group Inc. as their claims, noticing and balloting agent. The United States Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Kurt F. Gwynne, Esq., and Robert P. Simons, Esq., at Reed Smith LLP, represent the Committee. When the Debtors filed from protection from their creditors, they listed total assets of $120,916,991 and total debts of $179,402,834. ISCHUS HIGH: Six Classes of Notes Obtain Moody's Rating Downgrades ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for further possible downgrade the ratings on these notes issued by Ischus High Grade Funding I Ltd., : Class Description: $1,041,5000 Class A1S Senior Floating Rate Notes Due 2046 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $85,000,000 Class A1J Senior Floating Rate Notes Due 2046 -- Prior Rating: Aaa -- Current Rating: A2, on review for possible downgrade Class Description: $17,000,000 Class A2 Senior Floating Rate Notes Due 2046 -- Prior Rating: Aa2 -- Current Rating: Baa2, on review for possible downgrade Class Description: $30,500,000 Class A3 Deferrable Floating Rate Notes Due 2046 -- Prior Rating: A2 -- Current Rating: Ba2, on review for possible downgrade In addition, Moody's has also downgraded these notes: Class Description: $12,500,000 Class B Deferrable Floating Rate Notes Due 2046 -- Prior Rating: Baa2 -- Current Rating: Ca Class Description: $3,000,000 Class C Deferrable Floating Rate Notes Due 2046 -- Prior Rating: Ba1 -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio ISCHUS MEZZANINE: Moody's Downgrades Ratings on Eight Classes ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Ischus Mezzanine CDO III, Ltd.: Class Description: $396,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $68,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $62,000,000 Class B-1 Third Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: $10,000,000 Class B-2 Fourth Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca Class Description: $19,000,000 Class C Fifth Priority Senior Secured Deferrable Floating Rate Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $20,000,000 Class D Mezzanine Secured Deferrable Floating Rate Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $7,000,000 Class E Secured Deferrable Floating Rate Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. IXION PLC: Three Classes of Notes Get Moody's Junk Ratings ---------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Ixion plc: Issuer: Ixion plc Series 16 Class Description: $15,000,000 Floating Rate Portfolio Credit Linked Secured Notes due 2037 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Issuer: Ixion plc Series 17 Class Description: $7,500,000 Floating Rate Portfolio Credit Linked Secured Notes due 2037 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Issuer: Ixion plc Series 18 Class Description: $7,500,000 Floating Rate Portfolio Credit Linked Secured Notes due 2037 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. IXION PLC: Moody's Junks Rating on Tranche A Notes -------------------------------------------------- Moody's Investors Service downgraded the rating on these notes issued by Ixion PLC Matrix 2007-1 Series 20: Class Description: Tranche A $20,000,000 Floating Rate Portfolio Credit Linked Secured Notes due 2037 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. IXION PLC: Eroding Credit Quality Prompts Moody's Rating Cuts ------------------------------------------------------------- Moody's Investors Service downgraded the ratings of these three classes of notes issued by Issuer Ixion PLC HELD 2006-1, and left one of these ratings on review for further possible downgrade: Class Description: Series 1 HELD 2006-1 $ 242,000,000 Floating Rate Credit Linked Secured Notes due 2041 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: Series 2 HELD 2006-1 $ 80,000,000 Floating Rate Credit Linked Secured Notes due 2041 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: Series 3 HELD 2006-1 $ 15,000,000 Floating Rate Credit Linked Secured Notes due 2041 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. JP MORGAN: S&P Downgrades Cert. Ratings on Eroding Credit Support ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 67 classes of mortgage pass-through certificates from 12 transactions issued by GSAMP Trust, JPMorgan Mortgage Acquisition Trust, Long Beach Mortgage Loan Trust, and Terwin Mortgage Trust. Concurrently, S&P placed its ratings on 18 classes on CreditWatch with negative implications and affirmed S&P's ratings on 31 classes from these transactions. Of the 12 subprime transactions S&P reviewed, six were issued in 2005 and six were issued in 2006. The downgrades reflect deterioration in available credit support to these classes. S&P addressed only the defaulted classes from the affected 2006 deals because S&P had analyzed these transactions as part of another recent review. Although a combination of subordination, excess spread, and overcollateralization provides credit support to these subprime transactions, O/C has been reduced to zero for all 12 transactions, which are seasoned 18 to 36 months. S&P lowered 15 ratings to 'D' due to the complete erosion of credit support and realized losses incurred by the classes. As of the March 2008 remittance period, cumulative losses for the affected 2005 deals, as a percentage of the respective original pool balances, ranged from 1.85% (Terwin Mortgage Trust Series TMTS 2005-6HE) to 3.40% (Long Beach Mortgage Loan Trust 2005-WL1, structure 1). Severe delinquencies (90-plus days, foreclosures, and REOs) for the 2005 affected transactions ranged from 23.65% (Long Beach Mortgage Loan Trust 2005-WL1, structure 2) to 39.66% (Long Beach Mortgage Loan Trust 2005-3) of the current pool balances. The amount of severe delinquencies has significantly increased for all 2005 deals during recent months, and the delinquency pipelines do not indicate that these levels will improve. Most of these deals are failing their delinquency and loss triggers due to the high levels of delinquencies and significant monthly net losses. S&P placed its ratings on 18 classes from three transactions issued in 2005 on CreditWatch negative. While each of the certificate classes with ratings placed on CreditWatch negative lacks what S&P believes to be a sufficient amount of credit enhancement relative to projected losses, S&P will take no further rating actions until S&P has completed additional analysis. S&P expects to further evaluate the date of the projected defaults versus the date of payment in full, as well as the relationships between projected credit support and projected losses throughout the remaining life of each certificate. The affirmations of the remaining classes from these transactions reflect loss coverage percentages that were sufficient at the current rating levels as of the March 2008 distribution period. Ratings Lowered GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-WMC1 M-4 362341PY9 CCC A+ 2005-WMC1 M-5 362341PZ6 CCC A 2005-WMC1 M-6 362341PW3 CCC A- 2005-WMC1 B-1 362341QA0 CCC BBB+ 2005-WMC1 B-2 362341QB8 CC BBB+ 2005-WMC1 B-3 362341QC6 CC BB+ 2005-WMC1 B-4 362341QD4 CC B 2005-WMC1 B-5 362341QE2 D CCC 2006-FM1 B-4 362334PW8 D CC JPMorgan Mortgage Acquisition Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-WMC3 M-10 46629KAR0 D CC Long Beach Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-3 M-4 542514PA6 CCC A+ 2005-3 M-5 542514PB4 CCC A 2005-3 M-6 542514PC2 CCC A- 2005-3 M-7 542514PD0 CC BBB+ 2005-3 M-8 542514PE8 CC BB 2005-3 M-9 542514PF5 CC BB- 2005-3 M-10 542514PG3 CC B 2005-3 M-11 542514PH1 D CCC 2005-WL1 III-M1 542514MF8 AA AA+ 2005-WL1 III-M2 542514MG6 BBB AA 2005-WL1 III-M3 542514MH4 B A+ 2005-WL1 I/II-M5 542514LM4 BBB A 2005-WL1 III-M4 542514MJ0 CCC A 2005-WL1 I/II-M6 542514LN2 BB- A- 2005-WL1 III-M5 542514MK7 CCC A- 2005-WL1 I/II-M7 542514LP7 B BBB+ 2005-WL1 III-M6 542514ML5 CCC BBB+ 2005-WL1 I/II-M8 542514LQ5 CCC BBB 2005-WL1 III-M7 542514MM3 CCC BBB 2005-WL1 III-M8 542514MN1 CC BBB 2005-WL1 I/II-M9 542514LR3 CCC BBB- 2005-WL1 III-M9 542514MS0 CC BBB- 2005-WL1 I/II-B1 542514LS1 CC BB+ 2005-WL1 I/II-M10 542514LW2 CCC BB+ 2005-WL1 III-B1 542514MP6 CC BB+ 2005-WL1 III-B2 542514MQ4 D BB 2005-WL1 I/II-B2 542514LT9 D BB- 2005-WL1 I/II-B3 542514LU6 D BB- 2005-WL1 III-B3 542514MR2 D B+ 2005-WL2 M-3 542514ND2 A AA- 2005-WL2 M-4 542514NE0 BBB A+ 2005-WL2 M-5 542514NF7 BB A+ 2005-WL2 M-6 542514NG5 B A 2005-WL2 M-7 542514NH3 CCC BBB+ 2005-WL2 M-8 542514NJ9 CCC BBB+ 2005-WL2 M-9 542514NK6 CCC BBB 2005-WL2 M-10 542514NL4 CCC BB+ 2005-WL2 B-1 542514NQ3 CC B 2005-WL2 B-2 542514NR1 CC CCC 2005-WL2 B-3 542514NS9 D CCC 2006-2 M-10 542514UE2 D CC 2006-3 B 542514UX0 D CC 2006-4 M-11 54251MAR5 D CC 2006-WL2 B-1 542514SP0 D CC Terwin Mortgage Trust Rating Transaction Class CUSIP To From TMTS 2005-16HE M-4A 881561ZP2 CCC BB TMTS 2005-16HE M-4B 881561ZQ0 CCC B TMTS 2005-16HE M-5A 881561ZR8 CC B TMTS 2005-16HE M-5B 881561ZS6 CC B TMTS 2005-16HE M-6A 881561ZT4 CC B TMTS 2005-16HE M-6B 881561ZU1 CC B TMTS 2005-16HE B-1 881561ZV9 CC CCC TMTS 2005-16HE B-2 881561ZW7 CC CCC TMTS 2005-16HE B-3 881561ZX5 D CCC TMTS 2005-6HE B-2 881561RG1 BB BBB+ TMTS 2005-6HE B-3 881561RH9 B BB TMTS 2005-6HE B-4 881561TH7 CC CCC TMTS 2005-6HE B-5 881561TJ3 D CCC Ratings Placed on CreditWatch Negative GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-WMC1 M-1 362341PU7 AA+/Watch Neg AA+ 2005-WMC1 M-2 362341PV5 AA/Watch Neg AA 2005-WMC1 M-3 362341PX1 AA-/Watch Neg AA- Long Beach Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-3 I-A 542514NT7 AAA/Watch Neg AAA 2005-3 II-A2 542514NV2 AAA/Watch Neg AAA 2005-3 II-A3 542514NW0 AAA/Watch Neg AAA 2005-3 M-1 542514NX8 AA+/Watch Neg AA+ 2005-3 M-2 542514NY6 AA/Watch Neg AA 2005-3 M-3 542514NZ3 AA-/Watch Neg AA- Terwin Mortgage Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-16HE AF-3 881561ZB3 AAA/Watch Neg AAA 2005-16HE AV-2 881561ZF4 AAA/Watch Neg AAA 2005-16HE AV-3 881561ZG2 AAA/Watch Neg AAA 2005-16HE M-1A 881561ZH0 AA+/Watch Neg AA+ 2005-16HE M-1B 881561ZJ6 AA+/Watch Neg AA+ 2005-16HE M-2A 881561ZK3 AA/Watch Neg AA 2005-16HE M-2B 881561ZL1 AA/Watch Neg AA 2005-16HE M-3A 881561ZM9 A+/Watch Neg A+ 2005-16HE M-3B 881561ZN7 BBB+/Watch Neg BBB+ Ratings Affirmed GSAMP Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-WMC1 A-3 362341PS2 AAA 2005-WMC1 A-4 362341PT0 AAA Long Beach Mortgage Loan Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-WL1 I-A-1 542514LC6 AAA 2005-WL1 II-A4 542514LG7 AAA 2005-WL1 III-A3 542514ME1 AAA 2005-WL1 I/II-M1 542514LH5 AA+ 2005-WL1 I/II-M2 542514LJ1 AA 2005-WL1 I/II-M3 542514LK8 AA- 2005-WL1 I/II-M4 542514LL6 A+ 2005-WL2 I-A1 542514NM2 AAA 2005-WL2 I-A2 542514MV3 AAA 2005-WL2 II-A1 542514NN0 AAA 2005-WL2 II-A2 542514NP5 AAA 2005-WL2 III-A1 542514MW1 AAA 2005-WL2 III-A1A 542514MX9 AAA 2005-WL2 III-A3 542514MZ4 AAA 2005-WL2 III-A4 542514NA8 AAA 2005-WL2 M-1 542514NB6 AA+ 2005-WL2 M-2 542514NC4 AA Terwin Mortgage Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-16HE AF-2 881561ZA5 AAA 2005-16HE AF-4 881561ZC1 AAA 2005-16HE AF-5 881561ZD9 AAA 2005-6HE A-1C 881561QX5 AAA 2005-6HE S 881561QY3 AAA 2005-6HE M-1 881561QZ0 AA+ 2005-6HE M-2 881561RA4 AA+ 2005-6HE M-3 881561RB2 AA 2005-6HE M-4 881561RC0 AA 2005-6HE M-5 881561RD8 A+ 2005-6HE M-6 881561RE6 A+ 2005-6HE B-1 881561RF3 A KAISER NETHERLANDS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Kaiser Netherlands, B.V. Attn: Kaiser Group Holdings, Inc. 9300 Lee Highway Fairfax, VA 22031 Bankruptcy Case No.: 08-22623 Type of Business: The Debtor is a bankrupt affiliate of Kaiser Group International, Inc., which provides hazardous waste management services. On June 9, 2000, Kaiser Group International and 38 of its domestic subsidiaries voluntarily filed for protection under Chapter 11 of the United States Bankruptcy Code in the District of Delaware (Case Nos. 00-2263 to 00-2301). Kaiser Group International emerged from bankruptcy with a confirmed Second Amended Plan of Reorganization declared effective on Dec. 18, 2000. See http://www.kaisergroup.com Chapter 11 Petition Date: April 22, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: David W. Lampl, Esq. Email: bankruptcy@leechtishman.com Leech Tishman Fuscaldo & Lampl, LLC Citizens Bank Bldg. 30th Fl. 525 William Penn Place Pittsburgh, PA 15219 Tel: (412) 261-1600 Fax: (412) 227-5551 http://www.leechtishman.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $50 million to $100 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kaiser Group Holdings, Inc. project support $21,237,503 9300 Lee Highway billings Fairfax, VA 22031 Mittal Steel Ostrava A.S. ICC arbitration $4,061,499 Vratimovska 689 award 708 00 Ostrava-Pustkovec Sigma Lutin (Sigma DIZ s.r.o.) trade $810,918 Jana Sigmunda 79, 738 50 Lutin Attn: Mr. Petr Budinsky Ostrava Czech Republic Mostostal trade $778,674 (Mostostal Zabrze Holding S.A.) Wolnosci 191, 41-800 Zabrze, Poland MGT (MGT Group, a.s.) trade $558,122 Proskovicka 686 700 30 Ostrava-Vyskovice Ostrava Czech Republic VS-Invest (VS Invest, a.s.) trade $541,230 Rudna 30a 700 00 Ostrava-Vyskovice Ostrava Czech Republic Metalconsult trade $281,190 (Metalconsult, s.r.o.) Opletalova 37, 110 00 Prada 1 Ostrava Czech Republic Elcom A.S. (Elcom a.s.) trade $259,559 Hudcova 76a 612 48 Brno Ostrava Czech Republic Slovacke trade $232,332 NRC trade $148,358 Elektromont (Elektromont a.s.) trade $129,899 Alpine IPS trade $124,732 NH Zabreh trade $74,392 Klimaservis (Klimaservbis vos) trade $50,534 Holec (Eaton Holec Medium trade $44,430 Volt) VS-Invest (VS Invest, a.s.) trade $38,563 Spel (Spel, s.r.o.) trade $26,724 Ingstav (TCHAS s.r.o., Divize) trade $10,312 Bess (VP Bess, s.r.o.) trade $6,962 ZWZ trade $2,723 KENMARE 2005-I: Moody's Reviews 'B2' Rating on $50 Mil. Notes ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for downgrade the rating on these notes issued by Kenmare 2005-I, Ltd. Class Description: $50,000,000 Variable Floating Rate Notes Due July 25 2048 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. KIMBALL HILL: Moody's Cuts Rating on $203MM Notes to C ------------------------------------------------------ Moody's Investors Service lowered all the ratings of Kimball Hill, Inc. following its filing for protection under Chapter 11 of the US Bankruptcy Code, including its corporate family rating to Ca from Caa2, its probability of default rating to D from Caa2, and its senior subordinated debt rating to C from Ca. Subsequent to this rating action, Moody's will withdraw all of Kimball Hill's ratings. These specific rating actions were taken: -- Corporate family rating lowered to Ca from Caa2 -- Probability of default rating lowered to D from Caa2; -- Rating on the $203 million senior subordinated notes lowered to C (LGD-5, 88%) from Ca (LGD-6, 90%). Moody's intends to withdraw all of these ratings shortly. Founded in Chicago in 1969, Kimball Hill, Inc. is one of the largest private homebuilders in the U.S. Revenues and net income for the trailing twelve months ended Dec. 31, 2007 were approximately $804 million and ($246) million, respectively. KLEROS REAL: Moody's Junks Rating on $30 Mil. Notes From 'A3' ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Kleros Real Estate CDO I, Ltd.: Class Description: $900,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due October 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $30,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due October -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $18,700,000 Class B Third Priority Senior Secured Floating Rate Notes Due October 2046 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade In addition Moody's also downgraded these notes: Class Description: $20,000,000 Class C Fourth Priority Senior Secured Floating Rate Notes Due October 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $26,000,000 Class D Fifth Priority Mezzanine Deferrable Fixed Rate Notes Due October 2046 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. KNOLLWOOD CDO: Seven Classes of Notes Get Moody's Rating Cuts ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Knollwood CDO II Ltd.: Class Description: Class A-1VF First Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: Class A-2S Second Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: Class A-2J Third Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: Class B Fourth Priority Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade In addition, Moody's downgraded these notes: Class Description: Class C Fifth Priority Senior Secured Deferrable Floating Rate Notes Due 2046 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: Class D Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2046 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: C Class Description: Class E Seventh Priorty Mezzanine Secured Deferrable Floating Rate Notes 2046 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. LAGUNA SECA: Moody's Junks Ratings on Three Classes of Notes ------------------------------------------------------------ Moody's Investors Service downgraded ratings of seven classes of notes issued by Laguna Seca Funding I, Ltd., and left on review for possible further downgrade the rating of one of these classes of notes. The notes affected by this rating action are: Class Description: Up to $250,000,000 Class A-1 VFN Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $65,000,000 Class A-2 Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $65,000,000 Class A-3 Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: $40,000,000 Class A-4 Senior Secured Floating Rate Notes due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: $32,000,000 Class B Mezzanine Secured Deferrable Floating Rate Notes due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $15,000,000 Class C Mezzanine Secured Deferrable Floating Rate Notes due 2047 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: C Class Description: $13,000,000 Class D Mezzanine Secured Deferrable Floating Rate Notes due 2047 -- Prior Rating: Ca -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on April 4, 2008, as reported by the Trustee, of an event of default caused by a failure of the Net Outstanding Portfolio Collateral Balance to equal or exceed the sum of the Commitment Amount plus the Aggregate Outstanding Amount of the Class A-1, A-2, and A-3 Notes, as described in Section 5.1(h) of the Indenture dated March 28, 2007. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with the tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued following the event of default. Because of this uncertainty, the rating assigned to the Class A-1 Notes remain on review for possible further action. Laguna Seca Funding I, Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. LANDSOURCE COMMUNITIES: Gets Default Notice on $1BB Obligation -------------------------------------------------------------- LandSource Communities Development LLC, a large real estate joint venture by California Public Employees' Retirement System and Lennar Corporation, obtained the default notice despite negotiations to restructure $1.24 billion of debt, Michael Corkery of The Wall Street Journal's relates. As reported in the Troubled Company Reporter on April 22, 2008, LandSource Communities were in talks with lenders on restructuring a $1.24 billion debt after missing payments. WSJ relates that the extension period to meet its current loan terms, including a required payment, granted to the partnership has expired on April 16. According to TCR, LandSource is the most recent homebuilder hit by the slump in the housing market. LandSource's debt is syndicated issued by at least 100 creditors with Barclays Capital as arranger, TCR reports. The report reveals that LandSource's assets were valued at $2.6 billion last year. WSJ discloses that 68% of LandSource is owned by MW Housing Partners that includes CalPERS and 16% is owned by Cerberus Capital unit, LNR. The default notice will not increase the company's debt considerations, WSJ says citing LandSource spokeswoman Tamara Taylor. Ms. Taylor told WSJ that LandSource's equity holders aren't liable for the loan. The company remains in talks with its lenders, WSJ states. Lennar's Two Vegas Projects Receive Notices of Default As reported in the Troubled Company Reporter on March 17, 2008, two default notices were sent to Inspirada and Kyle Canyon Gateway, two large housing projects in Las Vegas and joint ventures involving Lennar, among others. The default notices were issued after an interest payment on a $765 million loan was left unpaid. The companies involved in the projects are presently negotiating with lenders, a loan syndicate headed by J.P. Morgan Chase & Co. and Wachovia Corp. The partners in default are trying to talk out the loan terms, which were patterned on past market conditions. Headquartered in Miami, Florida, Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/-- founded in 1954, builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides mortgage financing, title insurance, and closing services for both buyers of the company's homes and others. LandSource Communities Development LLC is a partnership that includes the California Public Employees' Retirement System and home builder Lennar Corporation. It owns thousands of acres of land in California, including 15,000 acres north of downtown Los Angeles. LB-UBS COMMERCIAL: Fitch Confirms Low-B Ratings on Three Classes ---------------------------------------------------------------- Fitch Ratings affirms LB-UBS commercial mortgage pass-through certificates, series 2003-C5: -- $236.7 million class A-2 at 'AAA'; -- $220 million class A-3 at 'AAA'; -- $328.1 million class A-4 at 'AAA'; -- Interest-only (I/O) class X-CL at 'AAA; -- Interest-only (I/O) class X-CP at 'AAA; -- $22.8 million class B at 'AAA'; -- $24.6 million class C at 'AAA'; -- $15.8 million class D at 'AAA'; -- $15.8 million class E at 'AAA'; -- $22.8 million class F at 'AA'; -- $17.6 million class G at 'A+'; -- $15.8 million class H at 'A'; -- $10.5 million class J at 'A-'; -- $14 million class K at 'BBB+'; -- $12.3 million class L at 'BB+'; -- $5.3 million class M at 'BB'; -- $3.5 million class N at 'BB-'. Class A-1 has paid in full. Fitch does not rate classes P, Q, S or T. The classes are affirmed due to stable Fitch-expected credit enhancement levels since Fitch's last rating action. As of the April 2008 distribution date, the pool's aggregate principal balance has decreased 29.4% to $992 million from $1.41 billion at issuance. 25.4% of the pool has fully defeased, including one shadow-rated loan (7.8%). There are two specially serviced loans (1.9%), both with expected losses. All expected losses are anticipated to be fully absorbed by the non-rated class T. The largest specially serviced loan (1.6%) is secured by a portfolio of two manufactured housing communities in Lennon and Saginaw, Michigan. The loan was transferred due to poor performance pending maturity. The other specially serviced loan (0.3%) is secured by a multifamily property located in Augusta, Georgia. The loan was transferred to special servicing in February 2007 due to delinquency. At issuance, there were eight shadow-rated loans. One has paid in full (John Hancock Tower), and one is fully defeased - 70 Hudson Street (7.8%). The six remaining non-defeased shadow-rated loans comprise 30.9% of the pool. Fitch reviewed recent operating statement analysis reports, rent rolls, and other performance information provided by the master servicer. The largest shadow-rated loan, the Westfield Shoppingtown Portfolio (14.6%), is secured by two cross-collateralized cross- defaulted regional malls. Westfield Shoppingtown Plaza Bonita consists of 429,474 square feet of an 820,353sf enclosed regional mall located in National City, California. Westfield Shoppingtown Vancouver consists of 413,372sf of an 883,219sf regional mall located in Vancouver, Washington. As of year-end 2007 the Fitch- stressed debt-service coverage for the portfolio has increased to 1.63 times (x) compared to 1.40x at issuance. The mall's combined overall occupancy as of YE 2007 was 84% compared to 86.3% at issuance. The Fitch-stressed debt service coverage ratio is calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balances and a hypothetical mortgage constant. The loan matures on June 11, 2033. The other five shadow-rated loans, GGP Oakwood Mall (5.2%), GGP Mall of the Bluffs (3.9%), GGP Birchwood Mall (3.9%), The Mall at Steamtown (3.9%) and GGP Pierre Bossier Mall (3.3%) have had stable or improved performance since issuance. Nine loans comprising 22.5% of the pool mature in 2008, four of which (16.3%) are shadow rated investment grade. One of the loans (1.2%) that matures in 2008 is specially serviced, and the other eight are performing. All of the investment-grade loans that mature in 2008 are secured by shopping centers managed by General Growth Properties, a Real Estate Investment Trust. The maturing GGP loans have coupon rates that range from 3.4% to 4.9% and a weighted average Fitch-stressed DSCR of 1.76x. Occupancy has been stable-to-improved since issuance, and all of the loans are current. LENNAR CORP: Venture Unit Gets Default Notice on $1BB Obligation ---------------------------------------------------------------- LandSource Communities Development LLC, a large real estate joint venture by California Public Employees' Retirement System and Lennar Corporation, obtained the default notice despite negotiations to restructure $1.24 billion of debt, Michael Corkery of The Wall Street Journal's relates. As reported in the Troubled Company Reporter on April 22, 2008, LandSource Communities were in talks with lenders on restructuring a $1.24 billion debt after missing payments. WSJ relates that the extension period to meet its current loan terms, including a required payment, granted to the partnership has expired on April 16. According to TCR, LandSource is the most recent homebuilder hit by the slump in the housing market. LandSource's debt is syndicated issued by at least 100 creditors with Barclays Capital as arranger, TCR reports. The report reveals that LandSource's assets were valued at $2.6 billion last year. WSJ discloses that 68% of LandSource is owned by MW Housing Partners that includes CalPERS and 16% is owned by Cerberus Capital unit, LNR. The default notice will not increase the company's debt considerations, WSJ says citing LandSource spokeswoman Tamara Taylor. Ms. Taylor told WSJ that LandSource's equity holders aren't liable for the loan. The company remains in talks with its lenders, WSJ states. Lennar's Two Vegas Projects Receive Notices of Default As reported in the Troubled Company Reporter on March 17, 2008, two default notices were sent to Inspirada and Kyle Canyon Gateway, two large housing projects in Las Vegas and joint ventures involving Lennar, among others. The default notices were issued after an interest payment on a $765 million loan was left unpaid. The companies involved in the projects are presently negotiating with lenders, a loan syndicate headed by J.P. Morgan Chase & Co. and Wachovia Corp. The partners in default are trying to talk out the loan terms, which were patterned on past market conditions. Headquartered in Miami, Florida, Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/-- founded in 1954, builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides mortgage financing, title insurance, and closing services for both buyers of the company's homes and others. LandSource Communities Development LLC is a partnership that includes the California Public Employees' Retirement System and home builder Lennar Corporation. It owns thousands of acres of land in California, including 15,000 acres north of downtown Los Angeles. LNR CDO: Fitch Downgrades Ratings on Seven Note Classes to Low-Bs ----------------------------------------------------------------- Fitch Ratings downgraded 11 classes of notes issued by LNR CDO IV series 2006-1 Ltd. or Corp.(LNR CDO IV): -- $474.4 million class A to 'AA' from 'AAA'; -- $204.2 million class B-FL to 'BBB' from 'AA'; -- $10 million class B-FX to 'BBB' from 'AA'; -- $55 million class C-FX to 'BB' from 'A'; -- $73.2 million class C-FL to 'BB' from 'A'; -- $54.1 million class D-FX to 'BB' from 'A-'; -- $10 million class D-FL to 'BB' from 'A-'; -- $72.1 million class E to 'B' from 'BBB+'; -- $31.1 million class F-FX to 'B' from 'BBB'; -- $25 million class F-FL to 'B' from 'BBB'; -- $78.1 million class G to 'B-' from 'BBB-'. Additionally, Fitch has removed classes A through G from Rating Watch Negative, where they were originally placed on Jan. 16, 2008. Fitch does not rate classes H, J, K, and preferred shares. LNR CDO IV is a commercial real estate collateralized debt obligation primarily backed by commercial mortgage backed securities B-pieces that closed on March 2, 2006. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. LNR Partners, Inc. (rated 'CSS1' by Fitch as a commercial mortgage special servicer) selected the initial collateral and serves as the collateral administrator. The collateral for this CDO consists predominantly of high- yielding junior CMBS bonds. The underlying assets of the CMBS bonds, by their nature, face similar exposures to losses from any downturn in the commercial real estate market as well as refinancing risks at the assets' maturity dates. As a mitigant, however, the underlying CMBS transactions do have significant geographic, property type and tenant diversity. While Fitch continues to believe investment grade CMBS will perform well even in a heightened stress environment, the risks facing first loss and junior rated bonds within the capital structure of CMBS transactions have increased with expectations of a rise in commercial real estate defaults from current low levels. Even a relatively modest increase in commercial real estate losses could be material for these portfolios. In reviewing CRE CDOs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches. Additional ratings considerations include seasoning of underlying collateral, obligor diversity, actual bond performance and projected losses. LNR CDO IV is collateralized by all or a portion of 154 classes of CMBS from 38 separate underlying transactions. All performance and collateral information is based on the March 2008 trustee report and discussions with the collateral administrator. The pool's obligor diversity is considered average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1997 to 2006 (an average of 3.6 years of seasoning). Approximately 35.4% of the collateral currently is rated below 'B-' or not rated, and therefore, is more susceptible to losses in the near-term. The majority of the collateral is below investment grade, and approximately 2.7% is investment grade. LNR CDO IV holds 40% in the 'BB' category and 23% in the 'B' category. The collateral has realized approximately $3 million in losses to date, 0.2% of the original collateral. Given the seasoning of the collateral, this loss rate is relatively low. However, additional losses are projected with $360 million of the loans in the underlying CMBS transactions currently 60 days or more delinquent. Fitch conducted cash flow modeling to test the transaction's structure under various default and interest rate stress scenarios. The ratings on the class A,B-FL, and B-FX notes address the timely payment of interest and ultimate repayment of principal. The ratings on classes C-FX, C-FL, D-FX, D-FL, E, F- FX, F-FL and G address the ultimate payment of interest and ultimate repayment of principal. LONG BEACH: Deterioration in Credit Support Cues S&P's Rating Cuts ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 67 classes of mortgage pass-through certificates from 12 transactions issued by GSAMP Trust, JPMorgan Mortgage Acquisition Trust, Long Beach Mortgage Loan Trust, and Terwin Mortgage Trust. Concurrently, S&P placed its ratings on 18 classes on CreditWatch with negative implications and affirmed S&P's ratings on 31 classes from these transactions. Of the 12 subprime transactions S&P reviewed, six were issued in 2005 and six were issued in 2006. The downgrades reflect deterioration in available credit support to these classes. S&P addressed only the defaulted classes from the affected 2006 deals because S&P had analyzed these transactions as part of another recent review. Although a combination of subordination, excess spread, and overcollateralization provides credit support to these subprime transactions, O/C has been reduced to zero for all 12 transactions, which are seasoned 18 to 36 months. S&P lowered 15 ratings to 'D' due to the complete erosion of credit support and realized losses incurred by the classes. As of the March 2008 remittance period, cumulative losses for the affected 2005 deals, as a percentage of the respective original pool balances, ranged from 1.85% (Terwin Mortgage Trust Series TMTS 2005-6HE) to 3.40% (Long Beach Mortgage Loan Trust 2005-WL1, structure 1). Severe delinquencies (90-plus days, foreclosures, and REOs) for the 2005 affected transactions ranged from 23.65% (Long Beach Mortgage Loan Trust 2005-WL1, structure 2) to 39.66% (Long Beach Mortgage Loan Trust 2005-3) of the current pool balances. The amount of severe delinquencies has significantly increased for all 2005 deals during recent months, and the delinquency pipelines do not indicate that these levels will improve. Most of these deals are failing their delinquency and loss triggers due to the high levels of delinquencies and significant monthly net losses. S&P placed its ratings on 18 classes from three transactions issued in 2005 on CreditWatch negative. While each of the certificate classes with ratings placed on CreditWatch negative lacks what S&P believes to be a sufficient amount of credit enhancement relative to projected losses, S&P will take no further rating actions until S&P has completed additional analysis. S&P expects to further evaluate the date of the projected defaults versus the date of payment in full, as well as the relationships between projected credit support and projected losses throughout the remaining life of each certificate. The affirmations of the remaining classes from these transactions reflect loss coverage percentages that were sufficient at the current rating levels as of the March 2008 distribution period. Ratings Lowered GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-WMC1 M-4 362341PY9 CCC A+ 2005-WMC1 M-5 362341PZ6 CCC A 2005-WMC1 M-6 362341PW3 CCC A- 2005-WMC1 B-1 362341QA0 CCC BBB+ 2005-WMC1 B-2 362341QB8 CC BBB+ 2005-WMC1 B-3 362341QC6 CC BB+ 2005-WMC1 B-4 362341QD4 CC B 2005-WMC1 B-5 362341QE2 D CCC 2006-FM1 B-4 362334PW8 D CC JPMorgan Mortgage Acquisition Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-WMC3 M-10 46629KAR0 D CC Long Beach Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-3 M-4 542514PA6 CCC A+ 2005-3 M-5 542514PB4 CCC A 2005-3 M-6 542514PC2 CCC A- 2005-3 M-7 542514PD0 CC BBB+ 2005-3 M-8 542514PE8 CC BB 2005-3 M-9 542514PF5 CC BB- 2005-3 M-10 542514PG3 CC B 2005-3 M-11 542514PH1 D CCC 2005-WL1 III-M1 542514MF8 AA AA+ 2005-WL1 III-M2 542514MG6 BBB AA 2005-WL1 III-M3 542514MH4 B A+ 2005-WL1 I/II-M5 542514LM4 BBB A 2005-WL1 III-M4 542514MJ0 CCC A 2005-WL1 I/II-M6 542514LN2 BB- A- 2005-WL1 III-M5 542514MK7 CCC A- 2005-WL1 I/II-M7 542514LP7 B BBB+ 2005-WL1 III-M6 542514ML5 CCC BBB+ 2005-WL1 I/II-M8 542514LQ5 CCC BBB 2005-WL1 III-M7 542514MM3 CCC BBB 2005-WL1 III-M8 542514MN1 CC BBB 2005-WL1 I/II-M9 542514LR3 CCC BBB- 2005-WL1 III-M9 542514MS0 CC BBB- 2005-WL1 I/II-B1 542514LS1 CC BB+ 2005-WL1 I/II-M10 542514LW2 CCC BB+ 2005-WL1 III-B1 542514MP6 CC BB+ 2005-WL1 III-B2 542514MQ4 D BB 2005-WL1 I/II-B2 542514LT9 D BB- 2005-WL1 I/II-B3 542514LU6 D BB- 2005-WL1 III-B3 542514MR2 D B+ 2005-WL2 M-3 542514ND2 A AA- 2005-WL2 M-4 542514NE0 BBB A+ 2005-WL2 M-5 542514NF7 BB A+ 2005-WL2 M-6 542514NG5 B A 2005-WL2 M-7 542514NH3 CCC BBB+ 2005-WL2 M-8 542514NJ9 CCC BBB+ 2005-WL2 M-9 542514NK6 CCC BBB 2005-WL2 M-10 542514NL4 CCC BB+ 2005-WL2 B-1 542514NQ3 CC B 2005-WL2 B-2 542514NR1 CC CCC 2005-WL2 B-3 542514NS9 D CCC 2006-2 M-10 542514UE2 D CC 2006-3 B 542514UX0 D CC 2006-4 M-11 54251MAR5 D CC 2006-WL2 B-1 542514SP0 D CC Terwin Mortgage Trust Rating Transaction Class CUSIP To From TMTS 2005-16HE M-4A 881561ZP2 CCC BB TMTS 2005-16HE M-4B 881561ZQ0 CCC B TMTS 2005-16HE M-5A 881561ZR8 CC B TMTS 2005-16HE M-5B 881561ZS6 CC B TMTS 2005-16HE M-6A 881561ZT4 CC B TMTS 2005-16HE M-6B 881561ZU1 CC B TMTS 2005-16HE B-1 881561ZV9 CC CCC TMTS 2005-16HE B-2 881561ZW7 CC CCC TMTS 2005-16HE B-3 881561ZX5 D CCC TMTS 2005-6HE B-2 881561RG1 BB BBB+ TMTS 2005-6HE B-3 881561RH9 B BB TMTS 2005-6HE B-4 881561TH7 CC CCC TMTS 2005-6HE B-5 881561TJ3 D CCC Ratings Placed on CreditWatch Negative GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-WMC1 M-1 362341PU7 AA+/Watch Neg AA+ 2005-WMC1 M-2 362341PV5 AA/Watch Neg AA 2005-WMC1 M-3 362341PX1 AA-/Watch Neg AA- Long Beach Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-3 I-A 542514NT7 AAA/Watch Neg AAA 2005-3 II-A2 542514NV2 AAA/Watch Neg AAA 2005-3 II-A3 542514NW0 AAA/Watch Neg AAA 2005-3 M-1 542514NX8 AA+/Watch Neg AA+ 2005-3 M-2 542514NY6 AA/Watch Neg AA 2005-3 M-3 542514NZ3 AA-/Watch Neg AA- Terwin Mortgage Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-16HE AF-3 881561ZB3 AAA/Watch Neg AAA 2005-16HE AV-2 881561ZF4 AAA/Watch Neg AAA 2005-16HE AV-3 881561ZG2 AAA/Watch Neg AAA 2005-16HE M-1A 881561ZH0 AA+/Watch Neg AA+ 2005-16HE M-1B 881561ZJ6 AA+/Watch Neg AA+ 2005-16HE M-2A 881561ZK3 AA/Watch Neg AA 2005-16HE M-2B 881561ZL1 AA/Watch Neg AA 2005-16HE M-3A 881561ZM9 A+/Watch Neg A+ 2005-16HE M-3B 881561ZN7 BBB+/Watch Neg BBB+ Ratings Affirmed GSAMP Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-WMC1 A-3 362341PS2 AAA 2005-WMC1 A-4 362341PT0 AAA Long Beach Mortgage Loan Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-WL1 I-A-1 542514LC6 AAA 2005-WL1 II-A4 542514LG7 AAA 2005-WL1 III-A3 542514ME1 AAA 2005-WL1 I/II-M1 542514LH5 AA+ 2005-WL1 I/II-M2 542514LJ1 AA 2005-WL1 I/II-M3 542514LK8 AA- 2005-WL1 I/II-M4 542514LL6 A+ 2005-WL2 I-A1 542514NM2 AAA 2005-WL2 I-A2 542514MV3 AAA 2005-WL2 II-A1 542514NN0 AAA 2005-WL2 II-A2 542514NP5 AAA 2005-WL2 III-A1 542514MW1 AAA 2005-WL2 III-A1A 542514MX9 AAA 2005-WL2 III-A3 542514MZ4 AAA 2005-WL2 III-A4 542514NA8 AAA 2005-WL2 M-1 542514NB6 AA+ 2005-WL2 M-2 542514NC4 AA Terwin Mortgage Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-16HE AF-2 881561ZA5 AAA 2005-16HE AF-4 881561ZC1 AAA 2005-16HE AF-5 881561ZD9 AAA 2005-6HE A-1C 881561QX5 AAA 2005-6HE S 881561QY3 AAA 2005-6HE M-1 881561QZ0 AA+ 2005-6HE M-2 881561RA4 AA+ 2005-6HE M-3 881561RB2 AA 2005-6HE M-4 881561RC0 AA 2005-6HE M-5 881561RD8 A+ 2005-6HE M-6 881561RE6 A+ 2005-6HE B-1 881561RF3 A MAGNOLIA FINANCE: Moody's Junks Ratings on Seven Classes of Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Magnolia Finance II plc: Class Description: Series 2006-8B $ 17,500,000 ABS Portfolio Variable Rate Notes due November 2044 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: Series 2006-9A $ 55,000,000 ABS Portfolio Variable Rate Notes due March 2045 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: Series 2006-8C $ 33,500,000 ABS Portfolio Variable Rate Notes due November 2044 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: Series 2006-8DG GBP 5,000,000 ABS Portfolio Variable Rate Notes due November 2044 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca Class Description: Series 2006-8DU $ 50,500,000 ABS Portfolio Variable Rate Notes due November 2044 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca Class Description: Series 2006-9B $ 50,000,000 ABS Portfolio Variable Rate Notes due March 2045 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: Series 2006-9E2 $ 4,250,000 ABS Portfolio Variable Rate Notes due November 2037 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. MAIN KNITTING: Chapter 15 Petition Summary ------------------------------------------ Petitioner: Ernst & Young, Inc. Attn: Deily, Mooney & Glastetter, LLP 8 Thurlow Terrace Albany, NY 12203 Debtor: Main Knitting, Inc. 6666 Saint-Urbain Street Montreal, Canada Case No.: 08-11272 Debtor-affiliates filing separate Chapter 15 petitions: Entity Case No. ------ -------- Main Knitting Inc. (USA) 08-11273 Main Knitting (USA), LLC 08-11274 Type of Business: The Debtors manufacture and sell clothing in Montreal, Quebec, Canada. In addition, they have operations in Champlain, New York, where their products are imported and distributed. See http://www.mainknit.com/ On April 1, 2008, the Debtors filed a Petition for the Issuance of an Initial Order Pursuant to Sections 4, 5, and 11 of the Companies Creditors Arrangement Act (CCAA) with the Canadian Court. On April 3, 2008, the Canadian Court issued its Initial Order pursuant to Sections 4, 5 and 11 of CCAA, as amended. On April 14, 2008, the Canadian Court extended the stay provided for by the Initial Order to and including May 22, 2008. Chapter 15 Petition Date: April 24, 2008 Court: Northern District of New York (Albany) Petitioner's Counsel: Jonathan D. Deily, Esq. Email: jdeily@deilylawfirm.com Deily, Mooney & Glastetter, LLP 8 Thurlow Terrace Albany, NY 12203 Tel: (518) 436-0344 http://www.deilylawfirm.com/ Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million MAJESTIC STAR: S&P's Cuts Corporate Credit Rating to 'CCC+' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Las Vegas, Nevada-based Majestic Star Casino LLC; the corporate credit rating was lowered to 'CCC+' from 'B-'. Ratings on the company were removed from CreditWatch, where they were placed Feb. 13, 2008, with negative implications. The rating outlook is negative. The rating downgrade reflects S&P's increased concern about Majestic Star's liquidity position -- despite a recent amendment to the covenants governing its $80 million revolving credit facility -- given existing and anticipated negative trends in the operating performance of its properties. In addition, beginning on Oct. 15, 2008, cash interest under a $63.5 million senior unsecured note issued by Majestic Star's parent company, Majestic Holdco LLC, will begin to accrue, with the first payment due on April 15, 2009. These notes, which were issued to partially finance the Trump Indiana acquisition in late 2005, are structured to accrue pay-in-kind interest until Oct. 15, 2008. Given Majestic Star's limited liquidity, as well as restrictions on distributions imposed by the company's debt obligations, the ability to meet this first cash interest payment is doubtful under the existing capital structure. As of Dec. 31, 2007, credit measures were weak, with total debt to EBITDA of 8.9x and EBITDA coverage of interest of 1.1x (including HoldCo debt and PIK interest). The 'CCC+' rating reflects heightened concern regarding the company's ability to service its debt obligations over the next 12 months, its second-tier positions within highly competitive markets, and limited flexibility to invest in its assets given weak credit metrics and modest cash flow generation. Majestic Star's credit measures as of Dec. 31, 2007 were weak. Operating lease-adjusted debt leverage, including the senior unsecured HoldCo notes, was 8.9x. In addition, EBITDA coverage of interest has continued to decline to just 1.1x, including PIK interest on the HoldCo notes. Given the previously mentioned competitive issues, these metrics are likely to weaken over the next few quarters. MONTAUK POINT: Weak Credit Quality Cues Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Montauk Point CDO II, Ltd.: Class Description: $340,000,000 Class A-1S Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $34,250,000 Class A-1J Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade In addition, Moody's downgraded these notes: Class Description: $50,000,000 Class A-2 Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $15,000,000 Class A-3 Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $15,500,000 Class A-4 Secured Deferrable Floating Rate Notes due 2046 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C Class Description: $20,500,000 Class B Secured Deferrable Floating Rate Notes due 2046 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $5,000,000 Class C Secured Deferrable Floating Rate Notes due 2046 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: C According to Moody's Investors Service, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. MARGATE FUNDING: Moody's Reviews 'Ba1' Rating on $30 Mil. Notes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Margate Funding I, Ltd. Class Description: $100,000,000 Class A1J Senior Secured Floating Rate Notes Due 2044 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $40,000,000 Class A2 Senior Secured Floating Rate Notes due 2044 -- Prior Rating: Aa2 -- Current Rating: Aa3, on review for possible downgrade Class Description: $30,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes due 2044 -- Prior Rating: A3 -- Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. MEDIACOM COMMS: Dec. 31 Balance Sheet Upside-Down by $253 Million ----------------------------------------------------------------- Mediacom Communications Corp.'s consolidated balance sheet at Dec. 31, 2007, showed $3.615 billion in total assets, and $3.868 billion in total liabilities, resulting in a $253 million total stockholders' deficit. At Dec. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $125 million in total current assets available to pay $393 million in total current liabilities. Fourth Quarter Results The company reported a net loss of $36.9 million for the fourth quarter ended Dec. 31, 2007, compared with a net loss of $3.6 million for the same period of 2006. Revenues increased 6.2% to $332.5 million from $313.1 million in the fourth quarter of 2006, reflecting strong contributions from Mediacom's data and phone businesses. Total operating costs grew 5.4% to $213.0 million, primarily due to: (i) higher expenses related to corresponding growth in phone and data customers; (ii) increases in programming unit costs; (iii) greater taxes and fees; and (iv) higher billing and marketing expenses; offset in part by a reduction in call center telecommunications and advertising sales expenses. Adjusted operating income before depreciation and amortization (Adjusted OIBDA) increased 7.7% to $119.5 million, resulting in an Adjusted OIBDA margin of 36.0%, up from 35.5% in the prior year period. 2007 Results The company incurred a net loss for the year ended Dec. 31, 2007, of $95.1 million, as compared to a net loss of $124.9 million for the year ended Dec. 31, 2006. Revenues rose 6.9% to $1.293 billion from $1.210 billion in 2006, largely attributable to the growth in the company's data and phone customers. Revenue generating units (RGUs) grew 5.1% year-over- year, and average total monthly revenue per RGU was 0.9% higher than the prior year. a) Video Revenues Video revenues increased 1.1%, due to higher service fees from the company's advanced video products and services such as DVRs and HDTV, offset by a lower number of basic subscribers. During the year ended Dec. 31, 2007, the company lost 56,000 basic subscribers, including a significant number of basic subscribers lost in connection with the retransmission consent dispute with an owner of a major television broadcast group, and the sale of the period of cable systems serving on a net basis 6,300 basic subscribers, as compared to a loss of 43,000 basic subscribers in the prior year. b) Data Revenues Data revenues rose 17.4%, primarily due to a 13.8% year-over-year increase in data customers. Data customers grew by 80,000, as compared to a gain of 100,000 in the prior year, ending the year with 658,000 customers, or a 23.2% penetration of estimated homes passed. c) Phone Revenues Phone revenues grew 107.0%, primarily due to a 76.2% year-over- year increase in phone customers. Phone customers grew by 80,000, as compared to a gain of 83,000 in the prior year, ending the year with 185,000 customers, or a 7.3% penetration of estimated marketable phone homes. As of Dec. 31, 2007, Mediacom Phone was marketed to nearly 90% of the company's 2.84 million estimated homes passed. d) Advertising Revenues Advertising revenues increased by 4.2%, as a result of stronger national advertising sales, despite a meaningful decline in political advertising from the prior year. Service Costs Service costs rose 10.4% to $544.1 million, primarily due to customer growth in the company's phone and HSD services and increases in programming and field operating expenses. SG&A Expenses Selling, general and administrative expenses rose 4.5% to $264.0 million, principally due to higher marketing, bad debt and billing expenses, offset in part by reductions in telecommunication and employee benefit costs. Selling, general and administrative expenses as a percentage of revenues were 20.4% and 20.9% for the years ended Dec. 31, 2007, and 2006, respectively. Corporate Expenses Corporate expenses rose 8.6% to $27.6 million, principally due to increases in non-cash, share-based compensation, and legal fees. Corporate expenses as a percentage of revenues were 2.1% for each of the years ended Dec. 31, 2007, and 2006. Depreciation and Amortization Depreciation and amortization increased 9.0% to $235.3 million, primarily due to increased deployment of customer premise equipment and related installation activities. Adjusted OIBDA Adjusted OIBDA rose 4.2% to $463.0 million, due to revenue growth, especially in data and phone, offset in part by increases in service costs and selling, general and administrative expenses. Operating income decreased 0.6% to $222.3 million, largely due to higher depreciation and amortization and service costs. Interest Expense Interest expense, net, increased by 5.2% to $239.0 million, primarily due to higher average indebtedness, the expiration of certain interest rate hedging agreements with favorable rates and higher market interest rates on variable rate debt. Losses on Derivatives The company recorded losses on derivatives amounting to $22.9 million and $15.8 million for the years ended Dec. 31, 2007, and 2006, respectively, related to interest rate exchange agreements, or "interest rate swaps," that the company entered into with counterparties to fix the interest rate on a portion of the its variable rate debt to reduce the potential volatility in interest expense that would otherwise result from changes in variable market interest rates. As of Dec. 31, 2007, the company had interest rate swaps with an aggregate notional amount of $1.0 billion. Loss on Early Extinguishment of Debt The company incurred a loss on early extinguishment of debt of $35.8 million for the year ended Dec. 31, 2006, as a result of the company's redemption of its 11% senior notes due 2013. There was no loss on early extinguishment of debt in the year ended Dec. 31, 2007. Provision for Income Taxes The provision for income taxes was approximately $57.6 million for the year ended Dec. 31, 2007, as compared to a provision for income taxes of $59.7 million for the year ended Dec. 31, 2006. During the year ended Dec. 31, 2007, the company determined that an additional portion of its deferred tax assets from net operating loss carryforwards will not be realized under the more- likely-than-not standard required by SFAS No. 109, "Accounting for Income Taxes." As a result, the company increased its valuation allowance and recognized a $57.3 million corresponding non-cash charge to income tax expense for the year ended Dec. 31, 2007. Management's Comments "We finished 2007 on a strong note, as we realized in the fourth quarter the highest Adjusted OIBDA growth and RGU gains of the year, made possible in part by a dramatic reduction in basic subscriber losses," said Rocco B. Commisso, Mediacom's chairman and chief executive officer. "Combined revenues from our data and phone products grew by 23%, reflecting their penetration gains as customers increasingly recognize the value proposition of our "ViP" triple play offers." "In 2008, we plan to make greater investments in our cable network, mainly to ready ourselves for the digital transition in February 2009. However, even after increased capital spending, we see an improvement of about $18 million in free cash flow relative to 2007, as we expect a meaningful reduction in interest expense," concluded Mr. Commisso. Liquidity and Capital Resources The company expects to meet interest expense and principal payments, capital spending and other requirements through a combination of net cash flows from operating activities, borrowing availability under its bank credit facilities and the company's ability to secure future external financing. As of Dec. 31, 2007, the company's total debt was $3.215 billion. Of this amount, $94.5 million matures during the year ending Dec. 31, 2008. During the year ended Dec. 31, 2007, the company paid cash interest of $245.1 million, net of capitalized interest. As of Dec. 31, 2007, the company had unused revolving credit commitments of $645.4 million, all of which could be borrowed and used for general corporate purposes based on the terms and conditions of our debt arrangements. * * * Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?2b1b About Mediacom Communications Based in Middletown, New York, Mediacom Communications Corporation (Nasdaq: MCCC) -- http://www.mediacomcc.com/-- is a cable television company focused on serving the smaller cities and towns in the United States. The companyoffers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high-definition television, high-speed Internet access and phone service. * * * As reported in the Troubled Company Reporter on March 6, 2008, Moody's Investors Service affirmed its 'B1' corporate family rating for Mediacom Communications Corp.. The rating outlook remains stable. MERRILL LYNCH MORTGAGE: S&P Cuts Ratings on Five Classes of Certs. ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on five classes of mortgage loan asset-backed certificates from Merrill Lynch Mortgage Investors Trust 2005-FM1 and removed them from CreditWatch with negative implications. The rating on the class M-2 certificates remains on CreditWatch with negative implications. Concurrently, S&P affirmed its ratings on the remaining classes from this transaction. The lowered ratings reflect the deterioration of available credit support for these transactions combined with projected credit support percentages that are insufficient to maintain the ratings at their previous levels. S&P's projected credit support percentages are based on the dollar amount of loans in the delinquency pipeline. Based on the current collateral performance of this transaction, S&P projects future credit enhancement will be significantly lower than the original credit support for the previous ratings. Over time, the failure of excess interest to cover monthly losses has completely depleted overcollateralization, leading to a principal write-down of class B-3 in September of 2007, which prompted us to downgrade the class to 'D'. Cumulative losses for this transaction were 2.01% of the original pool balance. Total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) were 45.30% and 31.97% of the current pool balance, respectively. Over the past 12 months, the amount of severe delinquencies in this transaction has increased by $42.66 million, or 1.8x. Standard & Poor's will continue to closely monitor the performance of the class M-2 certificates. If projected credit support continues to deteriorate, S&P will take further negative rating action on this class within the next several months. Conversely, if this trend reverses, S&P will affirm the rating and remove it from CreditWatch. The affirmations reflect current and projected credit support percentages that are sufficient to support the ratings at their current levels. As of the March 2008 distribution report, credit support for these classes averaged 32.67% of the current pool balance. In comparison, the ratio of current credit enhancement to original enhancements averaged 2.79x. A combination of subordination, excess interest, and O/C (prior to its complete erosion) provide credit enhancement for this transaction. The collateral supporting this series consists of a subprime pool of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered and Removed From CreditWatch Negative Merrill Lynch Mortgage Investors Trust 2005-FM1 Mortgage loan asset-backed certificates Rating ------ Class To From ----- -- ---- M-3 BBB AA-/Watch Neg M-4 B+ BBB+/Watch Neg M-5 B BB/Watch Neg M-6 CCC B/Watch Neg B-1 CCC B/Watch Neg Rating Remaining on CreditWatch Negative Merrill Lynch Mortgage Investors Trust 2005-FM1 Mortgage loan asset-backed certificates Class Rating ----- ------ M-2 AA/Watch Neg Ratings Affirmed Merrill Lynch Mortgage Investors Trust 2005-FM1 Mortgage loan asset-backed certificates Class Rating ----- ------ A-1A, A-1B AAA A-2C, A-2D AAA M-1 AA+ B-2 CCC MEZZANINE PORTFOLIO: Moody's Junks Rating on $7.5MM Notes From B3 ----------------------------------------------------------------- Moody's Investors Service downgraded the rating on these notes issued by Mezzanine Portfolio Credit Default Swap (Sub-Swap III): Class Description: $7,500,000 Initial Tranche Notional Amount Credit Default Swap -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. MICHAEL KESSEL: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Michael W. Kessel 12 Lexington Avenue Bradford, MA 01835 Bankruptcy Case No.: 08-40940 Chapter 11 Petition Date: March 27, 2008 Court: District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtor's Counsel: Michael B. Feinman (mbf@feinmanlaw.com) Feinman Law Offices 23 Main Street Andover, MA 01810 Tel: (978) 4750-080 Fax: (978) 4750-852 Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Homecomings Financial Value of Collateral: $432,000 P.O. Box 8900036 $310,000 Dallas, TX 75389 Countrywide Home Loans Value of Collateral: $410,000 P.O. Box 961206 $310,000 FTWX-22 Forth Worth, TX 76161-0206 Countrywide Home Loans Value of Collateral: $410,000 P.O. Box 660694 $310,000 Dallas, TX 75266-0694 ASC Value of Collateral: $362,416 P.O. Box 1820 $300,000 Newark, NJ 070101 Value of Collateral: $334,700 $300,000 Value of Collateral: $126,000 $0 Washington Mutual $247,834 American Express $93,000 Bank of America N.A. $56,000 Specialized Loan Services Value of Collateral: $33,000 $18,000 Bank of America $29,000 Chase Cardmember Services $16,000 Chase $14,700 Berube Brothers $14,000 Citibank $12,500 ML-CFC COMMERCIAL: Fitch Maintains Low-B Ratings on Six Classes --------------------------------------------------------------- Fitch Ratings affirmed ML-CFC Commercial Mortgage Trust's commercial mortgage pass-through certificates, series 2007-6: -- $23,532,102 class A-1 at 'AAA'; -- $170,430,000 class A-2 at 'AAA'; -- $150,000,000 class A-2FL at 'AAA'; -- $60,689,000 class A-3 at 'AAA'; -- $728,987,000 class A-4 at 'AAA'; -- $364,195,028 class A-1A at 'AAA'; -- $214,593,000 class AM at 'AAA'; -- $107,403,000 class A-J at 'AAA'; -- $75,000,000 class AJ-FL at 'AAA'; -- $2,145,926,359 class X* at 'AAA'; -- $42,919,000 class B at 'AA'; -- $16,094,000 class C at 'AA-'; -- $34,872,000 class D at 'A'; -- $18,776,000 class E at 'A-'; -- $24,142,000 class F at 'BBB+'; -- $24,142,000 class G at 'BBB'; -- $26,824,000 class H at 'BBB-'; -- $5,365,000 class J at 'BB+'; -- $5,365,000 class K at 'BB'; -- $5,364,000 class L at 'BB-'; -- $5,365,000 class M at 'B+'; -- $5,365,000 class N at 'B'; -- $5,365,000 class P at 'B-'; -- $26,824,359 class Q at 'NR'. * Notional amount and interest only. The affirmations are the result of stable performance since issuance. As of the March 2008 distribution date, the pool's certificate balance has decreased 0.22% to $2,141,611,489 from $2,145,926,359 at issuance. There have been no specially serviced or delinquent loans since issuance. Eighty-two loans (83.4%) are interest-only or partial interest-only. Fitch reviewed servicer provided operating statement analysis for the two shadow rated loans: Peter Cooper Village and Stuyvesant Town (9.5%), and Westfield Park (7.0%). Due to their stable performance since issuance the loans maintain their investment grade shadow ratings. Peter Cooper Village and Stuyvesant Town (9.5%) is the largest loan in the pool and is collateralized by a multifamily property comprised of 56 multistory buildings with 110 different addresses, situated on 80 acres, including a total of 11,227 residential apartments located in Manhattan, New York. In addition to the residential component, the complex contains approximately 100,000 square feet of retail space, 20,000 sf of professional office space, and six parking garages with 2,260 licensed spaces. The property benefits from the strong sponsorship of Tishman Speyer Properties, LP and Blackrock Realty. The trust portion represents a $1.5 million pari passu piece of the entire $3.0 billion A-note. There is an additional $1.5 billion of mezzanine debt outside the trust. As of Feb. 15, 2008, occupancy is 92.7% compared to 98.3% at issuance. Westfield Park (7.0%) is a 1,588,360 sf regional mall, located in Strongsville, Ohio. The mall is anchored by Dillards (210,992 SF), Macy's (178,173 SF), Sears (167,400 SF), and J.C. Penny (145,330 SF), which are not part of the collateral. As of December 2007, the in-line occupancy was 95.3% compared to 89.4% at issuance. MORTGAGEIT CERTIFICATES: Moody's Downgrades Ratings on 12 Tranches ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 12 tranches from two Alt-A transactions issued by MortgageIT. Seven tranches remain on review for possible further downgrade. Additionally, 5 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded or placed on review, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: MortgageIT Mortgage Loan Trust, Mortgage Loan Pass-Through Certificates, Series 2006-1 -- Cl. 1-A1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-B1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 1-B2, Downgraded to Ca from Ba2 -- Cl. 1-B3, Downgraded to Ca from B3 Issuer: MortgageIT Securities Corp. Mortgage Loan Trust, Series 2007-1 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Ba3 -- Cl. M-8, Downgraded to Ca from B1 -- Cl. M-9, Downgraded to Ca from B3 MSC-MEDICAL SERVICES: Moody's Junks Rating on Weak Credit Metrics ----------------------------------------------------------------- Moody's Investors Service lowered MSC-Medical Services Company's Corporate Family Rating to Caa1 from B3. Concurrently, Moody's lowered the Probability of Default Rating to Caa1 from B3 and the rating on the $150 million Second Lien Notes to Caa1 from B3. The ratings outlook remains negative. The downgrade of the company's Corporate Family Rating to Caa1 from B3 reflects the company's weak credit metrics which were lower than Moody's expectations resulting from the loss of the pharmaceutical benefits management contract with Liberty Mutual, its largest customer, in 2007. The downgrade also reflects the company's weak liquidity profile, significant customer concentration with the top 10 customers comprising 43.4% of the company's unadjusted billings, and non-exclusivity of the company's contracts. The negative ratings outlook reflects the absence of cushion under MSC's credit metrics if the company were to experience a further material loss of customers and insufficient replacement of new business. The outlook also reflects that the company will not use its cash outside of Moody's expectations. These ratings were downgraded: -- Corporate Family Rating to Caa1 from B3; -- Probability of Default Rating to Caa1 from B3, and; -- Rating on the $150 million Second Lien Notes due 2011 to Caa1 (LGD3/44%) from B3 (LGD3/46%). Headquartered in Jacksonville, Florida, MSC-Medical Services Company is one of the largest procurement providers of pharmacy and medical products and services to workers' compensation payors in the U.S. For the twelve months ended Dec. 31, 2007, the company reported approximately $313 million in revenues. MUSICLAND HOLDING: Court Awards Professionals $10MM Final Payment ----------------------------------------------------------------- At the behest of the retained professionals in Musicland Holdings Corp. and its debtor-affiliates, the Honorable Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York awards these firms their final fees and expenses: Professional Fee Period Fees Expenses ------------ ---------- ---- -------- Kirkland & Ellis 01/12/2006-01/18/2008 $5,306,660 $403,829 FTI Consulting, Inc. 12/12/2005-01/12/2006 1,183,738 123,414 Hahn & Hessen LLP 02/21/2006-01/20/2006 1,704,729 85,027 Curtis, 01/13/2006-01/18/2008 996,198 33,005 Mallet-Prevost, Colt & Mosle LLP Guiliani Capital 01/20/2006-01/18/2008 467,000 22,842 Advisors, LLC Olsham Grundman 01/25/2006-02/29/2008 381,583 20,751 Frome Rosenzweig & Woolsky LLP Donlin, Recano & 02/09/2006-01/18/2008 42,466 12,761 Company, Inc. About Musicland Holding Based in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. At March 31, 2007, the Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation with the Court. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. The Debtor's Second Amended Joint Plan of Liquidation was declared effective as of Jan. 30, 2008. (Musicland Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NEW CENTURY ALTERNATIVE: Moody's Cuts Ratings on 10 Tranches ------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 10 tranches from two Alt-A transactions issued by New Century Alternative Mortgage Loan Trust. Three tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded or placed on review, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: New Century Alternative Mortgage Loan Trust 2006-ALT1 -- Cl. M-4, Downgraded to A2 from A1 -- Cl. M-5, Downgraded to Baa2 from A2 -- Cl. M-6, Downgraded to Ba3 from A3 Issuer: New Century Alternative Mortgage Loan Trust 2006-ALT2 -- Cl. M-1, Downgraded to A1 from Aa1 -- Cl. M-2, Downgraded to Baa2 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3 -- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba2 NWGOC CREDIT DERIVATIVE: Moody's Reviews 'Ba1' Rating ----------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the rating on these Credit Derivative Transaction: Class Description: Credit Derivative Transaction Ref. No. NWGOC -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the reference portfolio. NORTH COVE: Moody's to Review B1 Rating on $44 Mil. Notes --------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by North Cove CDO III, Ltd.: Class Description: $132,000,000 Class A First Priority Senior Secured Floating Rate Notes Due 2045 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $74,000,000 Class B Second Priority Senior Secured Floating Rate Notes Due 2045 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $44,000,000 Class C Third Priority Senior Secured Floating Rate Notes Due 2045 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. NORTHAMPTON GENERATING: Fitch Cuts Rating on $153 Mil. Bonds to B ----------------------------------------------------------------- Fitch Ratings downgraded the rating on Northampton Generating Co., L.P.'s $153 million senior tax-exempt series 1994 A resource recovery revenue bonds due 2009 to 2019 to 'B' from 'BB-'. The Rating Outlook is Stable. The debt was issued by the Pennsylvania Economic Development Financing Authority in 1994 and the proceeds loaned to Northampton. The rating action is due to Fitch's expectation that Northampton will frequently rely on reserve accounts and deferment of subordinated expenses to pay its scheduled debt service through maturity of the rated bonds. Fitch expects current fuel price levels to persist, which have risen significantly since 2005. Higher fuel costs largely are due to petroleum coke prices, which have risen to uneconomic levels, and substantially increased transportation fuel costs. Tire-derived fuel was approved for use in 2007 and is being utilized in the current fuel mix, but is not expected by Fitch to significantly improve the average cost of fuel. Northampton has been susceptible to a variety of operating issues that reduce cash flow. The capacity factor in 2007 was approximately 88%, and the debt service coverage ratio was approximately 1.0 times. Escalation of contracted revenue rates has lagged original projections, and the fixed portion of revenue rates will step down in 2010, coinciding with peak scheduled senior debt service. Debt service coverage ratios are projected to fluctuate near break-even levels for the remaining term of the rated bonds. In January 2008, the Pennsylvania Public Utility Commission denied approval of a proposed amendment to Northampton's power purchase agreement. The amendment would have terminated the PPA and proposed a restructuring of the rated bonds. Barring relief from its obligations under the PPA, Fitch expects Northampton's operating cash flows and financial cushion to remain weak through the term of the debt. Northampton consists of a 112 megawatt coal-fired qualifying facility in Northampton County, Pennsylvania, that supplies energy to Metropolitan Edison Co. (Issuer Default Rating 'BBB-' by Fitch) under a long-term PPA. Northampton is structured as a limited partnership and is owned by indirect subsidiaries of EIF Management, LLC and Cogentrix Energy, LLC. Subsidiaries of Cogentrix manage the partnership and perform operations and maintenance at the facility. OSYKA CORP: Court Approves Bidding Procedures for Sale of Assets ---------------------------------------------------------------- The Hon. Marvin Isgur of the United States Bankruptcy Court for the Southern District of Texas approved Osyka Corporation and Osyka Permian LLC's proposed bidding procedures for the sale of their assets, Dawn McCarty of Bloomberg News reports. A hearing to consider final approval of the sale is scheduled on July 17, 2008, reports say. As reported in the Troubled Company Reporter on April 14, 2008, the Debtors have entered into a settlement agreement with their secured lenders J. Aron & Company and Texas Capital Bank, relating to the allocation of a minimum "strike price" of at least $67 million. The secured lenders also agreed to put off their $66.5 million credit bid under the agreement. All qualified bids along with a "good faith deposit" of 10% of the initial purchase price must be submitted no later than 5:00 p.m., on July 3, 2008. An auction will be held on July 10, 2008, at 1:30 p.m., at 515 Rusk, Courtroom 404 in Houston, Texas. During the auction, bidding will commence with the highest qualified bid and continue in minimum increments of at least $100,000. A full-text copy of the Settlement Agreement is available for free at http://ResearchArchives.com/t/s?2a74 About Osyka Corporation Headquartered in Houston, Texas, Osyka Corporation -- http://www.osyka.com/-- is an oil and gas company. The company filed for Chapter 11 protection on March 3, 2008 (Bankr. S.D. Tex. Case No.08-31467). H. Rey Stroube, III, Esq., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. Bloomberg says, citing court documents filed March 28, 2008, that the Debtors listed total assets of $109.7 million and total debts of $83.8 million during their bankruptcy filing. OWNIT MORTGAGE: S&P Downgrades Ratings on Three Certificates ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on the class M-1, M-2, and M-3 mortgage pass-through certificates from Ownit Mortgage Loan Trust Series 2005-3 and removed them from CreditWatch with negative implications. At the same time, S&P affirmed its ratings on the remaining classes from this transaction. The lowered ratings reflect the deterioration of available credit support for this transaction, combined with projected credit support percentages that are insufficient to maintain the ratings at their previous levels. S&P's projected credit support percentages are based on the dollar amount of loans in the delinquency pipeline. S&P removed the lowered ratings from CreditWatch because, based on historical performance, the revised ratings are representative of the credit support available to the affected classes. Based on the current collateral performance of this transaction, S&P projects that future credit enhancement will be significantly lower than the original credit support for the previous ratings. The failure of credit support to cover monthly losses over time caused a principal write-down to class B-3 in October of 2007. As of the March 25, 2008, remittance, cumulative losses for this transaction were 2.78% of the transaction's original pool balance. Total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) were 48.46% and 36.52% of the current pool balance, respectively. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the ratings at their current levels. As of the March 2008 remittance report, credit support for the classes with affirmed ratings averaged 12.94% of the current pool balance. Comparatively, the ratio of current credit enhancement to original enhancement averaged 1.56x. A combination of subordination, excess interest, and overcollateralization (before it was completely eroded) provide credit enhancement for this transaction. The collateral supporting this series consists of a pool of fixed- and adjustable-rate subprime mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered and Removed From CreditWatch Negative Ownit Mortgage Loan Trust Series 2005-3 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-1 BB A/Watch Neg M-2 CCC BB/Watch Neg M-3 CCC B/Watch Neg Ratings Affirmed Ownit Mortgage Loan Trust Series 2005-3 Mortgage pass-through certificates Class Rating ----- ------ A-1A, A-1B AAA A-2B, A-3 AAA B-1 CCC B-2 CCC PENTON BUSINESS: S&P Puts 'B' Rating on Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on New York City-based business-to business media company Penton Business Media Holdings, including the 'B' corporate credit rating, on CreditWatch with negative implications. "This action is due to the company's announcement that it will not be filing its audited financials within the allotted 110-day period," explained Standard & Poor's credit analyst Tulip Lim. Management stated that the cause of the delay is a disagreement with its auditors regarding how to value of some of its intellectual property and related intangibles. The company expects to take an impairment charge of $1.5 million to $2 million on its intangible assets. It posted draft financial statements for 2007 and expects to complete its audit at the end of the 30- day grace period. S&P analyzes Penton Business Media Holdings on a consolidated basis with Penton Business Media Inc. and Penton Media Inc. Penton's delayed filing has resulted in a notice of default because its covenants under its credit agreement stipulate that the company supply timely financial statements. Other areas of concern are pressure on the publishing side of the business, which represents a majority of the company's revenue, the recent departure of its CFO, and somewhat slower than expected realization of merger-related synergies. Standard & Poor's may lower the rating, possibly by more than one notch, if the company is unable to file audited financial statements or if it is unable to obtain waivers from lenders on a timely basis. S&P expects to resolve the CreditWatch status of the ratings following the filing of Penton's audit and S&P's review of it, a discussion with management regarding business outlook, and meaningful progress in hiring a new CFO. PITG GAMING: S&P Rates Corporate Credit 'B-' With Negative Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to PITG Gaming HoldCo. The rating outlook is negative. At the same time, Standard & Poor's assigned its ratings to PITG HoldCo's proposed $380 million senior secured first-lien credit facility, consisting of a $10 million revolving credit and a $370 million term loan, both due in 2011. The first-lien facility is rated 'B' (one notch higher than the 'B-' corporate credit rating on the company) with a recovery rating of '2', indicating the expectation for substantial (70% to 90%) recovery of principal in the event of a payment default. In addition, S&P rated the company's proposed $250 million senior secured second-lien term loan due 2011 'CCC' (two notches lower than the corporate credit rating) with a recovery rating of '6', indicating the expectation for negligible (0% to 10%) recovery in the event of a payment default. Proceeds from the proposed bank facilities, combined with additional subordinated debt issued by PITG Gaming Super HoldCo (the 100% owner of PITG HoldCo), will be used to refinance an existing bridge loan, pay transaction costs, establish reserve accounts, and to fund the construction of the company's casino in Pittsburgh, Pennsylvania (Majestic Star Casino Pittsburgh). Total project costs, including the purchase of land, construction, licensing fees, and financing costs, are $770 million. The 'B-' corporate credit rating reflects: 1. The significant fixed-charge burden for the property, given the proposed financing structure that includes no cash equity; 2. A limited start-up period provided by the interest reserve account, since initial cash interest payments for the first- and second-lien facilities are due about one quarter after the scheduled opening (this time frame would be compressed in the event of construction delays); and 3. Construction and start-up risks associated with the planned facility. These factors are somewhat tempered by these: 1. A sizable population base from which to draw from in the greater Pittsburgh metropolitan area; 2. Relatively limited existing and anticipated gaming competition; 3. Solid slot machine revenue metrics generated by the company's closest competitor, The Meadows, located about 25 miles south of the proposed site, which suggests good demand characteristics in the region; and 4. Four months of construction on the project is already completed, with approximately $48 million of hard costs already spent. PITG Gaming Super HoldCo (the parent of PITG HoldCo) is 83% indirectly owned by Barden Development Inc. and 17% by certain minority investors. BDI is controlled by Detroit, Mich.-based entrepreneur Don Barden. Through two subsidiaries, Majestic Holdco LLC and Barden Nevada Gaming LLC, BDI is also the owner of five casino properties in Indiana, Mississippi, Colorado, and Las Vegas. Majestic Holdco LLC is the owner of The Majestic Star Casino LLC. (CCC+/Negative/--) Financings at Majestic Star and PITG HoldCo are structured to be nonrecourse between the two operating entities. "While our ratings on Majestic Star incorporate a view of the consolidated enterprise owned by BDI, this does not mean that the ratings on each entity will be the same at all times, and they are currently one notch apart," explained Standard & Poor's credit analyst Ben Bubeck. "It does mean that the strategic relationship between the entities is deemed an important factor that will always have a bearing on the ratings." The higher ratings on PITG HoldCo reflect S&P's modestly higher level of comfort with the liquidity profile of that entity than with that of Majestic Star, at least over the near term. Also, since BDI does not own 100% of PITG HoldCo, there are minority investors whose strategic interests may differ from those of BDI. PRIDE INT'L: BOD's Actions May Cue Seadrill's Buyout, Fitch Says ---------------------------------------------------------------- Pride International announced that its Board of Directors has revised the company's Stockholder Rights Plan to lower the threshold level of beneficial ownership that would trigger the poison pill from 15% to 10% for acquisitions by Seadrill Limited and its affiliates and associates. Pride's Board of Directors took this step in response to Seadrill's acquisition of an approximately 9.9% ownership stake in Pride. In addition, Seadrill has made a filing under the Hart-Scott- Rodino Antitrust Improvements Act of 1976 to permit it to acquire Pride securities. It is unclear at this time if Pride's Board of Directors has taken this step for the purpose of remaining independent or in order to engage in more formal negotiations with Seadrill. Fitch notes that one potential outcome stemming from the announcement is that Pride could be acquired by Seadrill. If an acquisition should occur, Pride bondholders are protected by a change of control provision in the company's $500 million of 7.375% senior notes due 2014. Bondholders have the ability to force the company to repurchase the notes at 101% of par plus accrued and unpaid interest, but only if the change in control results in a ratings downgrade. Additionally, Pride's $500 million senior secured credit facility contains a change of control protection for lenders. The revolver was undrawn at year-end 2007 and had only $13.3 million of letters of credit on the facility. Lenders of the company's $300 million of 3.25% convertible senior notes due 2033 contain multiple protections. Noteholders have the right to require the company to repurchase the notes on May 1, 2008 at 100% of the principal amount plus accrued and unpaid interest. More importantly, the notes are convertible into Pride's common stock at a conversion rate of 38.9045 shares per $1,000 principal amount of notes (equal to a conversion price of $25.704 per share). The notes are currently convertible and Pride has announced its plans to redeem the notes on May 16, 2008, effectively forcing noteholders to convert before May 15, 2008. Pride currently expects to pay approximately $300 million in cash in connection with the conversion and the remaining amount satisfied in shares. Fitch has not taken any rating actions on Pride as a result of the current disclosure by the company. Fitch would note that should Seadrill succeed in acquiring Pride, negative rating action at Pride remains a possibility. Seadrill currently operates with significantly higher leverage than its peers in the offshore drilling market. In addition, Seadrill has been significantly more aggressive in acquiring and building newbuilds on a speculative basis than has Pride or others in the industry. Pride's ratings reflect the significant improvement the company has made in reducing debt and capitalizing on the strong offshore drilling environment to sell non-core assets and refocus the company as an offshore drilling contractor with a focus on deepwater assets. Pride's credit metrics reflect these improvements as well as the strong market conditions for offshore drilling rigs. For the last 12 months ending Dec. 31, 2007, Pride generated $918.3 million of EBITDA, and free cash flow was $28.6 million. Credit metrics were robust with interest coverage of 11 times and debt-to-EBITDA of 1.3x. Fitch currently maintains these ratings for Pride: -- Issuer Default Rating at 'BB'; -- Senior unsecured at 'BB'; -- Senior secured bank facility at 'BBB-'; -- Senior convertible notes at 'BB'. The Rating Outlook is Stable. PROTECTED VEHICLES: Can Access GC Financial's Cash Collateral ------------------------------------------------------------- Protected Vehicles Inc. obtained authority from the U.S. Bankruptcy Court for the District of South Carolina to use cash collateral on which it lender, GC Financial Services, Inc., asserts a security interest and lien. As reported in the Troubled Company Reporter on March 17, 2008, the Debtor said it will use the funds to pay postpetition payroll, payroll taxes and expenses of the Debtor's business. Prior to the bankruptcy filing: (a) the Debtor and GCFS executed a Term Sheet dated May 8, 2006 and other related documents; and (b) the Debtor and GCFS executed that certain Security Agreement dated as of June 29, 2006; and (c) the Debtor executed that certain Demand Note dated as of Sept. 30, 2007 in the amount of $15 million; and (d) GCFS filed a UCC-1 Financing Statement with the South Carolina Secretary of State's Office on Oct. 4, 2007. Under the GCFS Loan Documents, GCFS asserted a first priority lien and security interest in all of the Debtor's accounts, inventory, equipment, general intangibles, chattel paper, instruments, documents, and any and all proceeds, product, profits or offspring of the foregoing, all as described in the GCFS Loan Documents. As adequate protection of the interest of GCFS in the prepetition collateral and cash collateral, the Court grants GCFS first priority, perfected replacement liens and security interests in all of the Debtor's assets. The Debtor will limit its use of Cash Collateral to amounts specified in a weekly budget. A full-text copy of the Debtor's weekly budget is available for free at http://researcharchives.com/t/s?2933 North Charleston, South Carolina-based Protected Vehicles Inc. aka PVI -- http://www.protectedvehicles.com/-- founded in 2005, designs and manufactures ballistic and blast protected vehicles using technology derived from Rhodesian and South African vehicle development programs. The Debtor filed for chapter 11 protection on Feb. 5, 2008 (Bankr. D.S.C. Case No. 08-00783). G. William McCarthy, Jr., Esq., at McCarthy Law Firm LLC represents the Debtor in its restructuring efforts. Its largest unsecured creditor is the United States Marine Corps with a claim for $15,801,765. In February 2008, the Debtor listed assets of $24 million and debts of $54.1 million. RADNOR HOLDINGS: Judge Walsh Approves Disclosure Statement ---------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the adequacy of Radnor Holdings Corporation and its debtor-affiliates' Disclosure Statement dated March 20, 2008, explaining the Debtors' Amended Chapter 11 Plan of Liquidation. Judge Walsh set June 2, 2008, as deadline for creditors to vote whether to accept or reject the Debtors' Plan. As reported in the Troubled Company Reporter on March 26, 2008, the Debtors submitted to the Court a Disclosure Statement explaining their Amended Liquidation Plan. Overview of the Plan The Plan contemplates the liquidation of the Debtors' assets and the resolution of the outstanding claims against and interest in the Debtors. The Plan provides for the distribution of certain proceeds from any sale and the creation of a liquidating trust that will administer and liquidate all remaining property of the Debtors. Treatment of Claims Under the plan, these claims will be paid in full in cash, including: -- Administrative claims; -- Priority Tax Claims; -- Assumed Liabilities Claims; -- Other Secured Claims; and -- Non-Tax Priority Claims. On the distribution date, holders of secured lender claims, totaling approximately $28 million, will also receive in full from the liquidating trustee. The holders and their agent have the right to prove that claims exceed $28 million. Payment of these claims will be secured by all of the assets and property of the estate. Each holders of Midland claims will be entitled to the rights provided in the Midland Loan documents. However, certain of the covenants and other terms of that documents will be modified, as of the effective date of the Plan. Holders of General Unsecured claims will receive in full a pro rata share of the initial distribution amount, after secured lender's claims are paid in full. On the effective date of the plan, these claims will be canceled and each holders of these claim will not receive any property: -- Intercompany claims; -- Subordinated 510(c) claims; -- Subordinated 510(b) claims; and -- Old Equity Interests. A full-text copy of Radnor's Disclosure Statement dated March 20, 2008, is available for free at: http://ResearchArchives.com/t/s?2986 A full-text copy of Radnor's First Amended Joint Chapter 11 Plan of Liquidation is available for free at: http://ResearchArchives.com/t/s?286f Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Lead Case No. 06-10894). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., Sarah E. Pierce, Esq., Timothy R. Pohl, Esq., Patrick J. Nash, Jr., Esq., and Rena M. Samole, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represent the Debtors. The U.S. Trustee recently disbanded the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RADNOR HOLDINGS: Plan Confirmation Hearing Set on June 12 --------------------------------------------------------- The Hon. Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware will convene a hearing on June 12, 2008, at 10:00 a.m., to consider confirmation of the Amended Chapter 11 Plan of Liquidation of Radnor Holdings Corporation and its debtor- affiliates. Objections, if any, are due June 5, 2008, at 4:00 p.m. Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Lead Case No. 06-10894). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., Sarah E. Pierce, Esq., Timothy R. Pohl, Esq., Patrick J. Nash, Jr., Esq., and Rena M. Samole, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represent the Debtors. The U.S. Trustee recently disbanded the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RAMP TRUSTS: 35 Classes of Certs. Get S&P's Rating Downgrades ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 35 classes of asset-backed pass-through certificates from various RAMP transactions. Furthermore, S&P affirmed its ratings on the remaining classes from these transactions. The lowered ratings reflect the deterioration of available credit support for these transactions, combined with projected credit support percentages that are insufficient to maintain the previous ratings. S&P's projected credit support percentages are based on the dollar amount of loans in the delinquency pipeline. Based on the current collateral performance of these transactions, S&P projects future credit enhancement will be significantly lower than the original credit support for the former ratings. As of the March 25, 2008, remittance date, cumulative losses for these transactions ranged from 1.45% (series 2005-EFC5) to 4.12% (series 2004-KR1, loan group 2) of the transaction's original pool balances. Total delinquencies ranged from 33.92% (series 2005- EFC1) to 49.87% (series 2004-KR2, loan group 1) of the current pool balances, and severe delinquencies (90-plus days, foreclosures, and REOs) ranged from 25.42% (series 2005-EFC5) to 34.95% (series 2004-KR1, loan group 1) of the current pool balances. Over the past 12 months, the balance of loans that are considered severely delinquent for these transactions has increased on average by $22.88 million, or 1.60x. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the ratings at their current levels. As of the March 2008 remittance report, credit support for the classes with affirmed ratings ranged from 16.95% (series 2004-KR1) to 90.87% (series 2004-KR2) of the current pool balances. Comparatively, the ratio of current credit enhancement to original enhancement ranged from 3.99x to 4.51x. A combination of subordination, excess interest, and overcollateralization provides credit enhancement for these transactions. The collateral supporting these series consists of subprime pools of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered RAMP Series Trust Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2004-KR1 M-I-2 BB A 2004-KR1 M-I-3 B A- 2004-KR1 M-I-4 CCC BBB+ 2004-KR1 M-I-5 CCC BBB 2004-KR1 M-I-6 CCC BBB- 2004-KR1 M-II-2 CCC A+ 2004-KR1 M-II-3 CCC BBB 2004-KR2 M-I-3 BBB- A- 2004-KR2 M-I-4 B BBB+ 2004-KR2 M-I-5 CCC BBB 2004-KR2 M-II-3 CCC BBB 2005-EFC1 B-1 B+ BB+ 2005-EFC1 B-2 CCC BB 2005-EFC2 M-7 BBB A- 2005-EFC2 M-8 BB BBB+ 2005-EFC2 M-9 B+ BBB 2005-EFC2 M-10 B BBB- 2005-EFC3 M-8 BBB BBB+ 2005-EFC3 M-9 BB BBB 2005-EFC3 M-10 B BBB- 2005-EFC4 M-6 BBB A 2005-EFC4 M-7 BB+ A- 2005-EFC4 M-8 BB BBB+ 2005-EFC4 M-9 B BBB 2005-EFC4 M-10 B- BBB- 2005-EFC5 M-6 BBB+ A+ 2005-EFC5 M-7 BB A 2005-EFC5 M-8 BB- A- 2005-EFC5 M-9 BBB B 2005-EFC5 M-10 CCC BBB- 2005-EFC6 M-5 A+ AA 2005-EFC6 M-6 BBB- A+ 2005-EFC6 M-7 BB- A 2005-EFC6 M-8 B BBB+ 2005-EFC6 M-9 CCC BBB Ratings Affirmed RAMP Series Trust Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 2004-KR1 M-I-1 AA 2004-KR1 M-II-1 AA+ 2004-KR2 M-I-1 AA 2004-KR2 M-I-2 A 2004-KR2 M-II-1 AA 2004-KR2 M-II-2 A 2005-EFC1 A-I-4 AAA 2005-EFC1 A-II AAA 2005-EFC1 M-1 AA+ 2005-EFC1 M-2 AA 2005-EFC1 M-3 AA- 2005-EFC1 M-4 A+ 2005-EFC1 M-5 A 2005-EFC1 M-6 A- 2005-EFC1 M-7 BBB+ 2005-EFC1 M-8 BBB 2005-EFC1 M-9 BBB- 2005-EFC2 A-1, A-2, A-3 AAA 2005-EFC2 M-1 AA+ 2005-EFC2 M-2 AA 2005-EFC2 M-3, M-4 AA- 2005-EFC2 M-5 A+ 2005-EFC2 M-6 A 2005-EFC3 A-I-2 AAA 2005-EFC3 A-I-3, A-II AAA 2005-EFC3 M-1, M-2 AA+ 2005-EFC3 M-3 AA 2005-EFC3 M-4 AA- 2005-EFC3 M-5 A+ 2005-EFC3 M-6 A 2005-EFC3 M-7 A- 2005-EFC4 A-1, A-2, A-3 AAA 2005-EFC4 M-1, M-2 AA+ 2005-EFC4 M-3 AA 2005-EFC4 M-4 AA- 2005-EFC4 M-5 A+ 2005-EFC5 A-2 AAA 2005-EFC5 A-3, M-1 AAA 2005-EFC5 M-2, M-3 AA+ 2005-EFC5 M-4 AA 2005-EFC5 M-5 AA- 2005-EFC6 A-I-2 AAA 2005-EFC6 A-I-3, A-II AAA 2005-EFC6 M-1, M-2, M-3 AA+ 2005-EFC6 M-4 AA RASC 2005-KS3: S&P Downgrades Ratings on Two Classes of Certs. -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class B-3 and B-4 home equity mortgage asset-backed pass-through certificates from RASC Series 2005-KS3 Trust. In addition, S&P affirmed its ratings on the remaining classes from this transaction. The lowered ratings reflect the deterioration of available credit support for this transaction combined with projected credit support percentages that are insufficient to maintain the ratings at their previous levels. S&P's projected credit support percentages are based on the dollar amount of loans in the delinquency pipeline. The failure of excess interest to cover monthly losses has resulted in the complete erosion of overcollateralization for this transaction. This O/C deficiency has caused a principal write-down for the B-4 class, which prompted us to downgrade the class to 'D'. As of the March 25, 2008, distribution date, cumulative losses for this transaction were 2.57% of the original pool balance. Total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) were 31.48% and 22.82% of the current pool balance, respectively. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the ratings at their current levels. As of the March 2008 remittance report, credit support for these classes ranged from 11.22% to 53.68% of the current pool balance. In comparison, the ratio of current credit enhancement to original enhancement ranged from 1.62x to 3.02x. A combination of subordination, excess interest, and O/C provides credit enhancement for this transaction. The collateral supporting this series consists of a pool of fixed- and adjustable-rate subprime mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered RASC Series 2005-KS3 Trust Home equity mortgage asset-backed pass-through certificates Rating ------ Class To From ----- -- ---- B-3 CCC B B-4 D CCC Ratings Affirmed RASC Series 2005-KS3 Trust Home equity mortgage asset-backed pass-through certificates Class Rating ----- ------ A-4 AAA M-1, M-2 AA+ M-3 AA M-4 AA- M-5 A+ M-6 A M-7 A- M-8 BBB+ M-9 BBB M-10 BBB- B-1 BB+ B-2 BB REDENVELOPE INC: Court OKs $4.5MM DIP Loan & Creative Catalogs APA ------------------------------------------------------------------ In connection with its Chapter 11 case pending before the U.S. Bankruptcy Court for the Northern District of California, RedEnvelope Inc. received Court approval on April 22, 2008, to enter into a $4.5 million debtor-in-possession credit facility and loan agreement with Granite Creek Partners Agent, LLC, as agent, Creative Catalogs Corporation and Granite Creek FlexCap I, L.P. as the lenders. The Court also approved certain asset sale procedures, which among other things, identifies Creative Catalogs as the stalking horse bidder. In addition, the Court revised the sale procedures of an Asset Purchase Agreement between the company and Creative Catalogs Corp. dated April 17, 2008. The Court capped the breakup fee at 4.5% of the cash consideration of $5.7 million, eliminated the 2% expense reimbursement provision, and also changed the initial overbid amount from $500,000 to $350,000. "We are pleased that the decision made by the Bankruptcy Court [] will allow us more than adequate financing for the coming weeks and will allow us to return to business and payment as usual," Phil Neri, the Company's Chief Financial Officer, said. "In addition, we believe that this process will allow us to maximize the return for existing creditors," according to him. The Court has scheduled the sale hearing and auction of the company's assets for May 27, 2008 at 9:30 a.m. A final Court order regarding sale procedures is expected to be issued on or about today, April 28, 2008. Those interested in submitting bids should contact the company in writing at: RedEnvelope Inc. 149 New Montgomery Street San Francisco, CA 94105 For information regarding the company, the auction or the bankruptcy filing, contact: A. Stone Douglass Chief Restructuring Officer Phone: (415) 512-6122 Based in San Francisco, California, RedEnvelope Inc. (OTC:REDE) -- http://www.redenvelope.com-- is an online retailer of upscale gifts. RedEnvelope offers a collection of gifts through its catalog, web store and phone store. Its in-house design team creates products and its merchants source products domestically and from various parts of the world, often commissioning artists and vendors to create gifts. It offers an assortment of products in 12 categories with core product categories that include jewelry, home, men's and women's accessories and new baby gifts. RedEnvelope has an internal database of approximately 3.4 million customer names, with approximately 514,000 new customers added during the fiscal year ended April 2, 2007. The company filed for Chapter 11 protection on April 17, 2008 (N.D. Ca. Case No. 08-30659). Doris A. Kaelin, Esq., Janice M. Murray, Esq., John Walshe Murray, Esq., Robert A. Franklin, Esq. at Murray & Murray, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets of $21,781,415 and debts of $15,302,142. REGAL ENTERTAINMENT: March 27 Balance Sheet Upside-Down by $185MM ----------------------------------------------------------------- Regal Entertainment Group disclosed on Thursday its financial results for first fiscal quarter ended March 27, 2008. The company reported total assets of $2.634 billion and total stockholders' deficit of $185.8 million at March 27, 2008, compared with total assets of $2.635 billion and total stockholders' deficit of $119.3 million at Dec. 27, 2007. Total debt was $2.069 billion at March 27, 2008, versus total debt of $1.965 billion at Dec. 27, 2007. Net loss was $3.0 million in the first quarter of 2008, which included a $33.0 million after-tax loss on debt extinguishment, compared to net income of $229.1 million in the first quarter of 2007, which benefited from a $209.0 million after-tax gain on the National CineMedia IPO transaction. Total revenue for the first quarter ended March 27, 2008, was $626.8 million compared to total revenue of $625.0 million for the first quarter of 2007. Adjusted EBITDA was $131.1 million for the first quarter of 2008, compared with Adjusted EBITDA of $120.5 million during the quarter ended March 29, 2007. This represented an Adjusted EBITDA margin of approximately 20.9%, compared with Adjusted EBITDA margin of 19.3% during the quarter ended March 29, 2007. "Strong box office results again produced record total revenue and Adjusted EBITDA during the first quarter of 2008," stated Mike Campbell, chief executive officer of Regal Entertainment Group. "We look forward to completing the acquisition of Consolidated Theatres and to a summer film slate featuring both proven franchise films and big-budget original content," Campbell continued. Results for the Year Ended Dec. 27, 2007 Total revenues for the year ended Dec. 27, 2007, were $2.661 billion and consisted of $1.805 billion of admissions revenue, $735.0 million of concessions revenues and $121.7 million of other operating revenues, and increased 2.4% from total revenues of $2.598 billion for the year ended Dec. 28, 2006. For the year ended Dec. 27, 2007, income from operations totaled approximately $322.2 million, which represents an increase of $13.7 million, or 4.4%, from $308.5 million in 2006. For the year ended Dec. 27, 2007, net income totaled $363.0 million, which represents an increase of $276.7 million, from net income of $86.3 million in the 2006. The increase in net income in 2007 was primarily attributable to the increase in operating income, a $209.0 million after tax gain on the National CineMedia IPO transaction, a $17.2 million after tax gain in connection with the sale of the company's equity interest in Fandango Inc., the impact of earnings recognized from National CineMedia, a reduction of net interest expense, and the impact of a $22.2 million after tax loss on debt extinguishment recorded in 2006 in connection with conversions of a portion of the company's 3 3/4% Convertible Senior Notes due May 15, 2008. As of Dec. 27, 2007, the company had approximately $1.683 billion aggregate principal amount outstanding under the term loan facility with Credit Suisse, Cayman Islands Branch, $123.7 million aggregate principal amount outstanding under the Convertible Senior Notes, and $51.5 million aggregate principal amount outstanding under the Regal Cinemas 9 3/8% Senior Subordinated Notes due Feb. 1, 2012. As of Dec. 27, 2007, the company had approximately $800,000 outstanding in letters of credit, leaving approximately $99.2 million available for drawing under its $100 million Revolving Facility, which will mature on Oct. 27, 2011. Full-text copies of the company's consolidated financial statements for the year ended Dec. 27, 2007, are available for free at http://researcharchives.com/t/s?2b1d About Regal Entertainment Headquartered in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/-- operates a geographically diverse theatre circuit in the United States, consisting of 6,385 screens in 525 locations in 39 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on March 13, 2008, Moody's Investors Service affirmed Regal Entertainment Group's Ba3 corporate family and Ba3 probability of default ratings, and the other instrument ratings following the company's offering of new $190 million 6.25% senior convertible notes due 2011. The outlook remains stable. RELIANT ENERGY: Wants Chapter 11 Trustee Appointed -------------------------------------------------- Reliant Energy Channelview L.P. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to appoint a Chapter 11 trustee in their bankruptcy cases. Asset Sale The Debtors had entered into a $475 million credit agreement with a syndicate of banks to finance construction of a power plant in Channelview, Texas. As of the date of bankruptcy, approximately $341.4 million is outstanding under the secured credit facility. The Debtors subsequently agreed to sell substantially all of their assets. Kelson Energy IV LLC was the stalking horse bidder. The executory contracts sought to be assumed and assigned excluded a certain Cash Flow Participation Agreement between the Debtors and Equistar Chemicals L.P. because no buyer expressed interest in purchasing the Debtors' assets if the CFPA was included. In a Court-approved auction, GIM Cogeneration Channelview LLC ended up as the highest bidder for the assets with its $500 million offer. Equistar opposed the sale, reasoning that it excluded the CFPA. The Court did not approve the sale to GIM holding that the CFPA was not severable from other contracts that were to be assumed and assigned. Avoiding Impropriety Since the commencement of the sale process the Debtors and their ultimate parent, Reliant Energy Inc., have worked together at structuring the sale of the Channelview Facility. The Debtors lamented that the Court's decision undercut their ability to consummate the proposed sale to GIM. In addition, the Debtors say, Equistar has been adamant and has not consented to particular measures or settlements with Reliant to resolve the stalled sale. Since no settlement was reached between these parties, the Debtors understand that Reliant intends to fully pursue its claims and other rights. Under the circumstances, the Debtors note, a potential divergence of interest between the Debtors and Reliant exists. The Debtors say that they also wish to avoid even the appearance of impropriety in their bankruptcy proceedings. Moreover, although the agreement with GIM remains in effect, the failure to obtain a sale order that complies with theagreement ultimately would allow GIM to terminate the agreement, the Debtors add. The Debtors tell the Court that the appointment of a Chapter 11 Trustee as an independent, third party fiduciary to manage the Debtors' affairs, may facilitate the successful resolution of their cases. About Reliant Energy Channelview Based in Houston, Reliant Energy Channelview L.P. -- http://www.reliant.com/-- owns a power plant located near Houston, and is an indirect wholly owned subsidiary of Reliant Energy Inc. The company and its three affiliates, Reliant Energy Channelview (Texas) LLC, Reliant Energy Channelview (Delaware) LLC, and Reliant Energy Services Channelview LLC filed for chapter 11 protection on Aug. 20, 2007 (Bankr. D. Del. Lead Case No. 07-11160). Jason M. Madron, Esq., Lee E. Kaufman, Esq., Mark D. Collins, Esq., Paul Noble Heath, Esq., Richards, Robert J. Stearn Jr., Esq., at Layton & Finger P.A., and Timothy P. Cairns, Pachulski Stang Ziehl & Jones represent the Debtors. The U.S. Trustee for Region 3 appointed an Official Committee of Unsecured Creditors in the Debtors' cases. David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamiltion LLP, represent the Committee. When the Debtors filed for protection from their creditors, they listed total assets of $362,000,000 and total debts of $342,000,000. RENAISSANCE HOME: S&P Downgrades Ratings on 20 Asset-backed Certs. ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 20 classes of home equity loan asset-backed certificates from various Renaissance Home Equity Loan Trust transactions. Furthermore, S&P affirmed its ratings on the remaining classes from these transactions. The lowered ratings reflect the deterioration of available credit support for these transactions, combined with projected credit support percentages--based on the amount of loans in the delinquency pipeline-that are insufficient to maintain the ratings at their previous levels. Based on the current collateral performance of these transactions, S&P's project that future credit enhancement will be significantly lower than the original credit support for the former ratings. As of the March 25, 2008, remittance, cumulative losses for these transactions ranged from 0.52% (series 2005-4) to 1.81% (series 2004-4, loan group 1) of the transactions' original pool balances. Total delinquencies ranged from 13.53% (series 2003-3) to 53.79% (series 2004-4, loan group 1) of the current pool balances. Severe delinquencies (90- plus days, foreclosures, and REOs) ranged from 9.07% (series 2003- 3) to 42.05% (series 2004-4, loan group 1) of the current pool balances. Over the past 12 months, the balance of severe delinquencies for these transactions has increased, on average, by $5.6 million, or 1.09x, from the previous year. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the ratings at their current levels. As of the March 2008 remittance report, credit support for these classes averaged 29.56% of the current pool balance. In comparison, the ratio of current credit enhancement to original averaged 1.93x. A combination of subordination, excess interest, and overcollateralization provides credit enhancement for these transactions. The collateral supporting this series consists of subprime pools of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Renaissance Home Equity Loan Trust Home equity loan asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-2 M-3 BB+ BBB+ 2003-2 M-4 B BBB 2003-4 M-6 BB BBB- 2004-1 M-6 BB BBB- 2004-4 MV-3 B BBB 2004-4 MV-4 CCC BBB- 2005-1 M-9 BB BBB- 2005-2 M-8 BBB- BBB 2005-2 M-9 BB BBB- 2005-3 M-5 A A+ 2005-3 M-6 BBB A 2005-3 M-7 BB+ A- 2005-3 M-8 BB BBB+ 2005-3 M-9 B BBB- 2005-4 M-5 A+ AA- 2005-4 M-6 BBB A+ 2005-4 M-7 BB A 2005-4 M-8 BB- A- 2005-4 M-9 B BBB 2005-4 M-10 B- BBB- Ratings Affirmed Renaissance Home Equity Loan Trust Home equity loan asset-backed certificates Series Class Rating ------ ----- ------ 2003-2 A AAA 2003-2 M-1 AA 2003-2 M-2A, M-2F A 2003-3 A AAA 2003-3 M-1 AA 2003-3 M-2A, M-2F A 2003-3 M-3 A- 2003-3 M-4 BBB+ 2003-3 M-5 BBB 2003-3 M-6 BBB- 2003-4 A-1, A-3 AAA 2003-4 M-1 AA 2003-4 M-2A, M-2F A 2003-4 M-3 A- 2003-4 M-4 BBB+ 2003-4 M-5 BBB 2004-1 AV-1, AV-3 AAA 2004-1 M-1 AA 2004-1 M-2 A 2004-1 M-3 A- 2004-1 M-4 BBB+ 2004-1 M-5 BBB 2004-4 AV-3 AAA 2004-4 MV-1 AA 2004-4 MV-2 A 2004-4 AF-3, AF-4 AAA 2004-4 AF-5, AF-6 AAA 2004-4 MF-1 AA+ 2004-4 MF-2 AA 2004-4 MF-3 AA- 2004-4 MF-4 A+ 2004-4 MF-5 A 2004-4 MF-6 A- 2004-4 MF-7 BBB+ 2004-4 MF-8 BBB 2004-4 MF-9 BBB- 2005-1 AV-2, AV-3, AAA 2005-1 AF-3, AF-4, AF-5 AAA 2005-1 AF-6 AAA 2005-1 M-1 AA+ 2005-1 M-2 AA 2005-1 M-3 AA- 2005-1 M-4 A+ 2005-1 M-5 A 2005-1 M-6 A- 2005-1 M-7 BBB+ 2005-1 M-8 BBB 2005-2 AF-3, AF-4 AAA 2005-2 AF-5, AF-6, AAA 2005-2 AV-2, AV-3 AAA 2005-2 M-1 AA+ 2005-2 M-2 AA 2005-2 M-3 AA- 2005-2 M-4 A+ 2005-2 M-5 A 2005-2 M-6 A- 2005-2 M-7 BBB+ 2005-3 AF-2, AF-3, AF-4 AAA 2005-3 AF-5, AF-6, AAA 2005-3 AV-2, AV-3 AAA 2005-3 M-1, M-2 AA+ 2005-3 M-3 AA 2005-3 M-4 AA- 2005-4 A-2 AAA 2005-4 A-3, A-4, A-5 AAA 2005-4 A-6 AAA 2005-4 M-1, M-2 AA+ 2005-4 M-3, M-4 AA RESIDENTIAL CAPITAL: Taps Thomas Marano as Non-Exec Board Chairman ------------------------------------------------------------------ Residential Capital, LLC, an indirect wholly owned subsidiary of GMAC Financial Services, disclosed that Thomas Marano, former senior managing director and global head of Mortgage and Asset- Backed Securities at Bear Stearns & Co., Inc., has been appointed to serve as ResCap's non-executive chairman of the board of directors, succeeding former chairman Michael Rossi. As previously announced, Mr. Rossi resigned from the board effective March 17, 2008, due to medical reasons. In addition to joining the ResCap board, Mr. Marano has been appointed to the board's executive committee, where he will serve with ResCap's chief executive officer Jim Jones. In addition to the appointment of Marano, ResCap also announced the election to the board of Joshua Weintraub, formerly a senior managing director with Bear Stearns' global mortgage operations, who has also been appointed to the board's executive committee, and James Young, ResCap's chief financial officer. The new members join existing board members Alvaro G. de Molina, GMAC chief executive officer; Jim Jones, ResCap CEO; David Walker, GMAC treasurer; Linda Zukauckas, GMAC group vice president of finance; and Ronald Kravit, managing principal, Cerberus Real Estate Capital Management, L.P. "The addition of these board members brings strong and fresh executive experience and operational expertise to ResCap's Board of Directors," CEO Jim Jones said. "In his more than 25 years with Bear Stearns, Tom Marano was instrumental in creating and expanding the firm's mortgage business, including most recently as the person in charge of mortgage trading and origination. His exceptional background and experience will undoubtedly add significant value to the leadership of ResCap, and we are excited that he will be joined on the board by Josh and Jim, both of whom are exceptional talents." The new board members will replace departed members Eric Feldstein, Sanjiv Khattri and Paul Bossidy. ResCap is also conducting a search to identify two additional independent directors, to be appointed as soon as practicable, to replace Thomas Jacob and Thomas Melzer, who left the ResCap board earlier this week. "On behalf of ResCap, I would like to thank all of the departing directors for their commitment and service to ResCap, and we wish them well," Mr. Jones said. Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. RESIDENTIAL CAPITAL: S&P Junks Ratings on Board Members' Stepdown ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Residential Capital LLC to 'CCC+' from 'B' following the announcement that two independent board members have resigned. S&P also placed Residential Capital LLC's ratings on CreditWatch with negative implications. At the same time, S&P lowered its ratings on GMAC LLC, parent company of Residential Capital LLC, to 'B' from 'B+'. The outlook on GMAC remains negative. "The rating action on Residential Capital LLC reflects two related corporate governance concerns," said Standard & Poor's credit analyst John Bartko. "One, that departures indicate disagreement (or dissension) on the board regarding the best approach in addressing the challenges facing the company, and two, that, although the independent directors had full fiduciary responsibilities to all stakeholders, under certain circumstances as defined in Residential Capital LLC's operating agreement they would be required to consider specifically the interests of creditors. Their departure may compromise the interests of debtholders." In addition, the company has not indicated the reason for the departure of the directors, who were the only independent directors on the Residential Capital LLC board. S&P will monitor the board's progress in finding replacements. The directors' departures sharpens S&P's concerns regarding Residential Capital LLC's performance, which reflects the continued turmoil in the housing and mortgage markets. The company's exposure to troubled asset types and the weakened economy create expectations of continued performance pressures. Residential Capital LLC's capital position was enhanced during the first quarter by GMAC's acquisition of $1.2 billion in debt in the open markets. Even after this action, Residential Capital LLC's capital position is strained. The rating action on GMAC reflects S&P's concerns regarding Residential Capital LLC's stressed condition, the likelihood that Residential Capital LLC will require additional support, and the concern that GMAC will bear the brunt of future support needs. In addition, S&P is concerned about pressured performance at GMAC's core auto finance business, given broad capital market challenges and lower 2008 light-vehicle sales. Weakening asset-quality performance has already been seen, and S&P expects the economy to weaken further. Capital support for Residential Capital LLC is of paramount importance. It is apparent at this point that after providing several billion dollars of support, GMAC's parents, Cerberus Capital Management L.P. (51% ownership) and General Motors Corp. (49%), are expecting GMAC to exercise strategic alternatives to support Residential Capital rather than providing their own capital. S&P's ratings on Residential Capital LLC are on CreditWatch with negative implications. S&P expects further downgrades to be driven by Residential Capital LLC's failure to secure capital in excess of anticipated quarterly losses or liquidity deterioration, which would lessen the company's ability to navigate through upcoming debt maturities. A return of Residential Capital LLC's outlook to stable presumes the board of directors would be configured so as to reinstate debtholder advocacy beyond insider members, and would depend on whether the company can generate sustained earnings and grow and maintain capital at adequate levels. RUTLAND RATED: Moody's Reviews Ratings on Two Classes of Notes -------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Rutland Rated Investments: Class Description: Series 31 (Millbrook 2006-4) $ 15,500,000 Asset-Backed Securities Class A Variable Rate Credit-Linked Notes due May 2046 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: Series 32 (Millbrook 2006-4) $ 42,000,000 Asset-Backed Securities Class B Variable Rate Credit-Linked Notes due May 2046 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: Series 33 (Millbrook 2006-4) $ 22,500,000 Asset-Backed Securities Class C Variable Rate Credit-Linked Notes due May 2046 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. SEA CONTAINERS: SCSL Panel Asks Documents on Pension Dispute ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Sea Containers Services Ltd. asks the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to compel the Official Committee of Unsecured Creditors of Sea Containers Ltd. to produce documents that have been withheld on the basis of the common interest privileges between the SCL Committee and the DIP Lenders or the Bondholders. As reported in the Troubled Company Reporter on Feb. 20, 2008, the Debtors asked the Court to approve the pension scheme agreement between them and the trustees of the two main Sea Containers Pension Schemes to agree on the amount of their claims against the Sea Containers estate. As a result of extensive negotiations that commenced prior to the bankruptcy filing and have continued throughout these Chapter 11 cases, the Debtors, their Official Committee of Unsecured Creditors, and the Trustees agreed to the Settlement under which the Schemes' claims against the Debtors are fully resolved. The SCSL Committee's Document Requests seek to obtain from the SCL Committee various categories of documents directly relevant to the issues raised by its objection to the Settlement, including: -- documents relating to the SCL Committee's evaluation and analysis of the Pension Schemes' claims; -- documents concerning communications between the SCL Committee and the Debtors or their creditors about: * the Pension Schemes' claims; * the SCL Committee's contention that the Pension Schemes and the SCSL Committee violated the automatic stay; and * set-off rights between the Debtors; and -- documents relating to the grounds raised in the objection to the Pension Schemes' proofs of claim filed by the SCL Committee. Mr. Stratton says the SCL Committee has not produced, and does not intend to produce, a privilege log for the documents withheld based on the common interest privileges it asserted. Although the parties did agree that privilege logs need not be produced for documents withheld based on the attorney-client privilege or attorney-work product doctrine, reflecting communications between the committees and their members and advisors, no agreement was reached with respect to documents withheld based on a common interest privilege, he continues. Dispute on Common Interests David B. Stratton, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, argues that the SCL Committee's assertion that it has a "common interest" privilege with respect to all communications between the SCL Committee and two groups of creditors, the DIP Lenders, and a group of unsecured bondholders represented by Kramer Levin Naftalis & Frankel LLP, is not supported by law. Mr. Stratton tells Judge Carey that there is no common interest between the DIP Lenders and the SCL Committee. He asserts that the interests of the DIP Lenders, by virtue of their position, differ significantly from, and potentially conflict with, the interests of unsecured creditors. He notes that it was this divergence in interest that led the U.S. Trustee to remove certain noteholders, who became DIP Lenders, from the original SCL Committee. Hence, he points out, the SCL Committee cannot withhold communications with the DIP Lenders under the guise of a "common interest" privilege. Although the SCL Committee and the Bondholders may share a common commercial interest, that interest alone is insufficient to give rise to a common interest privilege, Mr. Stratton argues. He contends that the SCL Committee cannot demonstrate that it shares a common legal interest with the Bondholders in opposing the Debtors' request to approve the settlement regarding the pension claims. As a result of the expansive privileges asserted by the SCL Committee, its entire document production consists of seven documents, a number of which are duplicates, totaling eleven pages in the aggregate, Mr. Stratton tells the Court. He notes that the SCSL Committee, the Sea Containers 1983 Pension Scheme and the Sea Containers 1990 Pension Scheme have produced more than 20,000 pages of documents in response to the SCL Committee's discovery requests. Objections A. SCL Committee The SCL Committee tells Judge Carey that the SCSL Committee's document requests seek to compel disclosure of communications among the SCL Committee, creditors and DIP Lenders concerning: -- the claims asserted by the Pension Schemes; -- whether the SCSL Committee acted in violation of the automatic stay in taking steps to procure the Pension Claims; -- the Debtors' request to approve the Settlement; and -- any settlement discussions regarding the Pension Claims. William H. Sudell, Jr., Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, says the SCL Committee is stranger to the Settlement and the request to approve the Settlement because it played no part in the facts and circumstances that form the basis for the Pension Claims and equalization matters that were resolved in the Settlement. Hence, he asserts, there is no historical fact that the SCL Committee could provide documents that would be in any way relevant in evaluating the issues presented by the Settlement. Mr. Sudell contends that the communications among the SCL Committee, certain creditors, and the DIP Lenders, that the SCSL Committee seeks to compel took place in aid of a common interest arising in connection with litigation -- resisting the dilutive effect on creditors of allowance of the Pension Claims in an inflated amount. He notes that the communications necessarily took place in the conduct of SCL Committee's duties as an official committee. The communications are irrelevant to the facts that would determine the merits of the Settlement Request, and are protected by the common-interest privilege, Mr. Suddell argues. He adds that the disclosure of the communications would chill the: -- SCL Committee from carrying its function, -- creditors from obtaining the benefit of the official committee, and -- inhibit the orderly plan process. Hence, the SCL Committee asks the Court to deny the request to compel. B. Bondholders Bondholders Contrarian Capital Advisors, LLC; J.P. Morgan Securities Inc.; Credit Trading Group; Post Advisory Group, LLC; Trilogy Capital LLC; and Varde Investment Partners, L.P.; say that while they are not aware of the specific documents the SCL Committee has withheld pursuant to the common interest privilege, there can be little debate that the privilege applies to communications between the SCL Committee and the Bondholders, and their counsel and advisors. The Bondholders inform the Court that they have had numerous detailed communications concerning the legal merits of the Pension Claims and the Settlement Request, as well as strategy and tactics related to the SCL Committee's litigation against both. They relate that included in their communications are the objectives and interests of the Bondholders and the SCL Committee. Hence, the Bondholders point out that their privileged communications with the SCL Committee fall squarely within the common interest privilege. The Bondholders also argue that they share a common legal interest with the SCL Committee in assuring that the allowed amount of the Pension Claims conforms to all applicable legal requirements, and in challenging a Settlement, which fails to reasonably reflect those requirements. Accordingly, the Bondholders ask the Court to deny SCSL Committee's request. C. Mariner Investment Group Mariner Investment Group Inc., one of the DIP Lenders, joins and supports the SCL Committee's objection to the request. Mariner objects to the document production request as it relates to communications between Mariner Investment and the SCL Committee concerning the Pension Claims. Janet M. Weiss, Esq., at Gibson, Dunn & Crutcher LLP, in New York, contends that communications with Mariner Investment could not possibly have any bearing on approval of the Pension Settlement because it has not filed any objection or other pleadings in connection with the settlement. She adds that the request is not, by any stretch, "reasonably calculated to lead to the discovery of admissible evidence," pursuant to Rule 26(b)(1) of the Federal Rules of Civil Procedure. "The [SCSL] Committee's request for communications between Mariner and the SCL Committee is merely a litigation tactic designed to chill open discussions between Mariner and the SCL Committee, which is representing Mariner's substantial interests as a bondholder," Ms. Weiss points out. Ms. Weiss further argues that the request, which is specifically aimed at the DIP Lenders is "nothing more than an intimidation tactic," which creates wasteful expense and harms to the bankruptcy estates. Hence, Mariner Investment asks the Court to limit the scope of the SCSL Committee's discovery to exclude documents reflecting any communications with the DIP Lenders relating to the Pension Claims. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Debtors were not able to file a Chapter 11 plan of reorganization on April 15, 2008. (Sea Containers Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHARPER IMAGE: Chooses to Pursue Sale of Business and Assets ------------------------------------------------------------ Sharper Image Corp. has elected to pursue a sale of its business and assets pursuant to the provisions of the bankruptcy code, the company disclosed in a statement. "[G]iven the present retail climate and specialty nature of the Company, as well as the limited financing available to the Company, a sale of its business and assets at this time will preserve values and yield the best recovery to the company," said Robert Conway, the company's chief executive officer. Any sale will be subject to court approval. According to the statement, Sharper Image will solicit indications of interest from potential acquirers, and bid and auction procedures will be established as soon as reasonably practicable. The company intends to complete the sale process and seek court approval of the sale by the end of May 2008. Persons interested in acquiring all or part of the business or assets are directed to contact Robert Del Genio at Telephone Number (212) 813-1300. Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. An Official Committee of UnsecuredCreditors has been appointed in the case. When the Debtor filed for bankruptcy, it listed total assets of US$251,500,000 and total debts of US$199,000,000. (Sharper Image Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SORIN CDO: Six Classes of Notes Acquire Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Sorin CDO VI Ltd.: Class Description: $346,500,000 Class A-1LA Floating Rate Notes Due 2052 -- Prior Rating: Aaa -- Current Rating: A3, on review for possible downgrade Class Description: $49,500,000 Class A-1LB Floating Rate Notes Due 2052 -- Prior Rating: Aaa -- Current Rating: Ba1, on review for possible downgrade Class Description: $79,200,000 Class A-2L Floating Rate Notes Due 2052 -- Prior Rating: Aa2 -- Current Rating: Ba3, on review for possible downgrade Class Description: $22,000,000 Class A-3L Floating Rate Notes Due 2052 -- Prior Rating: A2 -- Current Rating: Caa1, on review for possible downgrade In addition Moody's also downgraded these notes: Class Description: $27,500,000 Class B-1L Floating Rate Notes Due 2052 -- Prior Rating: Baa2 -- Current Rating: Ca Class Description: $5,500,000 Class B-2L Floating Rate Notes Due 2052 -- Prior Rating: Ba1 -- Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of Structured Finance Securities. SOUNDVIEW HOME: High Delinquencies Cue Moody's Nine Rating Cuts --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 9 tranches from Soundview Home Loan Trust 2006-WF1. Five tranches remain on review for possible further downgrade. The collateral backing the transaction consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: Soundview Home Loan Trust 2006-WF1 -- Cl. M-2, Downgraded to A3 from Aa2 -- Cl. M-3, Downgraded to Ba2 from Aa3 -- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba1 -- Cl. M-10, Downgraded to Ca from Ba2 SPECIALTY UNDERWRITING: S&P Downgrades Ratings on 20 Cert. Classes ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 20 classes of mortgage pass-through certificates from one Specialty Underwriting and Residential Finance Trust, one Structured Adjustable Rate Mortgage Loan Trust transaction, two Adjustable Rate Mortgage Trust transactions, and four IndyMac INDX Mortgage Loan Trust transactions issued in 2004 and 2005. At the same time, S&P affirmed its ratings on 104 classes from the same transactions. These transactions are backed by Alternative-A mortgage loan collateral. The downgrades reflect S&P's opinion that available credit support for the affected classes is no longer adequate to support the previous ratings. Severe delinquencies among rated residential mortgage-backed securities backed by Alt-A loans among the 2004 and 2005 securitizations continue to increase. Additionally, the rise in the inventory of unsold homes (REOs and foreclosures) continues to negatively pressure housing prices, which has led to increased loss severities, roll rates, and losses. The affirmations reflect current credit support percentages that are sufficient to support the ratings at their current levels and protect them from actual and projected losses. The collateral for these deals consists of Alt-A, fixed- and adjustable-rate mortgage loans secured by one- to four-family residential properties. Ratings Lowered Adjustable Rate Mortgage Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2004-2 C-B-5 CCC B 2004-5 C-B-6 CCC B IndyMac INDX Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2004-AR1 B-5 CCC B 2004-AR3 B-4 B BB 2004-AR3 B-5 CCC B 2004-AR9 B-4 B BB 2004-AR9 B-5 CCC B 2005-AR31 B-1 A AA 2005-AR31 B-2 BB A 2005-AR31 B-3 B BBB 2005-AR31 B-4 CCC BB 2005-AR31 B-5 D CCC Specialty Underwriting and Residential Finance Trust (SURF) Rating ------ Transaction Class To From ----------- ----- -- ---- 2004-AA1 B-5 CCC B Structured Adjustable Rate Mortgage Loan Trust (SARM) Rating ------ Transaction Class To From ----------- ----- -- ---- 2005-2 B4 BBB A 2005-2 B5 BB+ BBB+ 2005-2 B6 BB BBB 2005-2 BX BB BBB 2005-2 B7 B BBB- 2005-2 B8 CCC BB 2005-2 B9 CCC B Ratings Affirmed Adjustable Rate Mortgage Trust Transaction Class Rating ----------- ----- ------ 2004-2 1-A-1 AAA 2004-2 2-A-1 AAA 2004-2 2-A-2 AAA 2004-2 2-A-X AAA 2004-2 3-A-1 AAA 2004-2 3-A-X AAA 2004-2 4-A-1 AAA 2004-2 4-A-2 AAA 2004-2 4-A-3 AAA 2004-2 4-A-X AAA 2004-2 5-A-1 AAA 2004-2 6-A-1 AAA 2004-2 7-A-1-1 AAA 2004-2 7-A-1-2 AAA 2004-2 7-A-2 AAA 2004-2 7-A-3 AAA 2004-2 7-A-4 AAA 2004-2 7-A-6 AAA 2004-2 7-M-1 AA 2004-2 C-B-1 AA 2004-2 C-B-1X AA 2004-2 7-M-2 A 2004-2 C-B-2 A- 2004-2 7-M-3 BBB+ 2004-2 7-M-4 BBB+ 2004-2 C-B-3 BBB- 2004-2 C-B-4 BB 2004-5 1-A-1 AAA 2004-5 2-A-1 AAA 2004-5 3-A-1 AAA 2004-5 4-A-1 AAA 2004-5 5-A-1 AAA 2004-5 6-A-1 AAA 2004-5 7-A-1-1 AAA 2004-5 7-A-1-2 AAA 2004-5 7-A-2 AAA 2004-5 C-B-1 AA+ 2004-5 7-M-1 AA 2004-5 C-B-2 AA 2004-5 7-M-2 A 2004-5 C-B-3 A 2004-5 7-M-3 BBB+ 2004-5 C-B-4 BBB+ 2004-5 7-M-4 BBB- 2004-5 C-B-5 BB IndyMac INDX Mortgage Loan Trust Transaction Class Rating ----------- ----- ------ 2004-AR1 1-A-1 AAA 2004-AR1 2-A-1 AAA 2004-AR1 A-R AAA 2004-AR1 A-X-2 AAA 2004-AR1 B-1 AA 2004-AR1 B-2 A 2004-AR1 B-3 BBB 2004-AR1 B-4 BB 2004-AR3 A-1 AAA 2004-AR3 A-X-2 AAA 2004-AR3 B-1 AA+ 2004-AR3 B-2 A+ 2004-AR3 B-3 BBB+ 2004-AR9 1-A AAA 2004-AR9 2-A AAA 2004-AR9 3-A AAA 2004-AR9 4-A AAA 2004-AR9 5-A-1 AAA 2004-AR9 5-A-2 AAA 2004-AR9 5-A-3 AAA 2004-AR9 A-R AAA 2004-AR9 B-1 AA+ 2004-AR9 5-M-1 AA 2004-AR9 B-2 A+ 2004-AR9 5-M-2 A 2004-AR9 5-M-3 BBB+ 2004-AR9 5-M-4 BBB+ 2004-AR9 5-M-5 BBB+ 2004-AR9 B-3 BBB+ 2005-AR31 1-A-1 AAA 2005-AR31 1-A-2 AAA 2005-AR31 2-A-1 AAA 2005-AR31 2-A-2 AAA 2005-AR31 3-A-1 AAA 2005-AR31 4-A-1 AAA 2005-AR31 4-A-2 AAA 2005-AR31 5-A-1 AAA 2005-AR31 5-A-2 AAA 2005-AR31 A-R AAA 2005-AR31 A-X AAA Specialty Underwriting and Residential Finance Trust (SURF) Transaction Class Rating ----------- ----- ------ 2004-AA1 I-A-1 AAA 2004-AA1 II-A-1 AAA 2004-AA1 II-A-2 AAA 2004-AA1 II-A3 AAA 2004-AA1 II-IO AAA 2004-AA1 I-IO AAA 2004-AA1 II-PO AAA 2004-AA1 I-PO AAA 2004-AA1 B-1 AA 2004-AA1 B-2 A 2004-AA1 B-3 BBB 2004-AA1 B-4 BB Structured Adjustable Rate Mortgage Loan Trust (SARM) Transaction Class Rating ----------- ----- ------ 2005-2 A1 AAA 2005-2 A2 AAA 2005-2 A2X1 AAA 2005-2 A2X2 AAA 2005-2 B1 AA 2005-2 B2 AA 2005-2 B3 A+ SR TELECOM: Changes Name to SRX Post After Acquisition ------------------------------------------------------ SR Telecom Inc. changed its name to SRX Post Holdings Inc. The company's common shares are expected to trade on the Toronto Stock Exchange under this new name in the coming days. As announced on April 4, 2008, the company sold the majority of its assets, including its brand, trademarks, intellectual property, patents, inventories and equipment relating to its symmetryONE and WiMAX Forum-certified symmetryMX product lines to Sherbrooke (Quebec)-based Groupe Lagasse. Group Lagasse operated the business since April 4, 2008 under the name SR Telecom & Co. S.E.C. as a Groupe Lagasse wholly owned subsidiary. About SR Telecom Headquartered in Quebec, Canada, SR Telecom (TSX: SRX) -- http://www.srtelecom.com/-- delivers broadband wireless access (BWA) solutions that enable service providers to deploy voice, Internet and next-generation services in urban, suburban and remote areas. The company has offices in Mexico, France and Thailand. SR Telecom Inc.'s consolidated balance sheet at June 30, 2007, showed C$83.9 million in total assets and C$97.9 million in total liabilities, resulting in a C$14.0 million total stockholders' deficit. SR Telecom is currently operating under the protection of the Companies' Creditors Arrangement Act (CCAA). The company filed for creditor protection under the CCAA on Nov. 19, 2007. On Feb. 29, 2008, it obtained a court order to extend the period of the Court-ordered stay of proceedings under the CCAA to May 2, 2008. STANDARD PACIFIC: Posts $767.3 Million Net Loss in 2007 ------------------------------------------------------- Standard Pacific Corp. reported a net loss of $767.3 million for the year ended Dec. 31, 2007, compared to net income of $123.7 million for 2006. Homebuilding revenues for the year were $2.889 billion versus $3.740 billion last year. The company's fiscal year results included pretax impairment charges (including discontinued operations) of $1.093 billion, or $670.7 million after tax, delineated as follows: -- $456.1 million for ongoing consolidated real estate inventories; $336.0 million for land sold or held for sale; -- $211.8 million for the company's share of joint venture inventory impairment charges; -- $23.1 million for land deposit and capitalized pre-acquisition cost write-offs for abandoned projects; and -- $65.8 million for goodwill impairment charges. The 2007 full year results also included a non-cash charge of $180.5 million for the FAS 109 deferred tax asset valuation allowance that the company was required to take for the quarter ended Dec. 31, 2007. "In the face of unprecedented housing market conditions, Standard Pacific delivered measurable progress on our plan to generate cash, pay down debt and improve our liquidity position," commented Stephen J. Scarborough, chairman, chief executive and president of the company. "We reduced inventory levels and generated cash across a number of different fronts. We exceeded our home delivery target for the fourth quarter. We also sold lots in a number of markets in order to generate cash from both sale proceeds and from our ability to monetize the loss on sale through NOL carrybacks for federal income tax purposes. In addition, we tightened our geographic footprint by substantially exiting two non-core markets, Tucson and San Antonio. Finally, we continued to adjust and improve the company's overhead and cost structure to right-size the organization and produce homes more efficiently." Mr. Scarborough went on to state that, "As we enter 2008, we anticipate that housing market conditions will continue to weaken, resulting in a decrease in company-wide deliveries. In response, we plan to cut new home starts, new community openings and spends for land acquisitions and site development costs, and continue to balance overhead to sales levels. Based on our current view of market conditions, we expect to generate positive cash flow during the year even after paying off the remaining balance of the 2008 senior notes." Cash Generation and Debt Reduction Results Standard Pacific ended the year with more than $219 million of homebuilding cash on its balance sheet while reducing the balance outstanding under the company's revolving credit facility during the 2007 fourth quarter by more than $163 million to $90 million. In addition, the company began to retire its $150 million of 6 1/2% senior notes due Oct. 1, 2008, through the open market purchase in the fourth quarter of $24 million of those notes, and the company paid down its trust deed notes payable by nearly $66 million. As a result of Standard Pacific's NOL carrybacks for federal income taxes, the company expects to receive a tax refund of approximately $235 million during the 2008 first quarter. Joint Venture Project Rationalization The company exited six joint ventures during the fourth quarter for aggregate net cash payments totaling approximately $3.0 million. In addition, the Company accelerated the take down of lots from one Southern California venture while acquiring its share of unstarted lots from another Southern California joint venture, both moves to maximize tax cash flow benefits. As a result of these actions, combined with activity in previous quarters, the company saw its absolute level of joint venture debt (including discontinued operations) decline year over year by 39% to $771 million. Since the end of 2006, the company has reduced the number of lots in its joint ventures (including discontinued operations) by 45%. Looking ahead, the company will continue to carefully monitor its joint venture portfolio. Backlog The dollar value of the company's backlog (excluding joint ventures) decreased 50% from the year earlier period to $442.7 million at Dec. 31, 2007, reflecting a slowdown in order activity and increased cancellation rates experienced during 2007 as well as a shorter average escrow period for home sales. Long-Term Debt At Dec. 31, 2007, the company had total long-term debt of $1.774 billion, compared to total long-term debt of $1.940 billion at Dec. 31, 2006. Long-term debt represents the revolving credit facility, trust deed and other notes payable, and senior and senior subordinated notes payable, and excludes $11.4 million of indebtedness related to liabilities from inventories not owned. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $3.401 billion in total assets, $2.368 billion in total liabilities, $38 million in minority interests, and $995 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?2b23 About Standard Pacific Headquartered in Irvine, California, Standard Pacific Corp. (NYSE:SPF) -- http://www.standardpacifichomes.com/-- operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The company also provides mortgage financing and title services to its homebuyers through its subsidiaries and joint ventures, Standard Pacific Mortgage Inc., SPH Home Mortgage, Universal Land Title of South Florida and SPH Title. * * * As reported in the Troubled Company Reporter on Feb. 19, 2008, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Standard Pacific Corp. to 'B+' from 'BB-'. Additionally, S&P lowered its rating on the company's senior subordinated debt to 'B-' from 'B'. The outlook remains negative. STATIC RESIDENTIAL: Poor Credit Quality Cues Moody's Rating Cuts ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Static Residential CDO 2006-A Ltd.: Class Description: Up to $475,000,000 Class A-1(a) Floating Rate Notes Due 2038 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $197,000,000 Class A-1(b) Floating Rate Notes Due 2038 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $110,000,000 Class A-2 Floating Rate Notes Due 2038 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $80,000,000 Class B Floating Rate Notes Due 2038 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $35,000,000 Class C Deferrable Interest Floating Rate Notes Due 2038 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $43,000,000 Class D Deferrable Interest Floating Rate Notes Due 2038 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $18,000,000 Class E Deferrable Interest Floating Rate Notes Due 2038 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. STATIC RESIDENTIAL: Moody's Reviews 'Ba2' Rating on $46 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Static Residential CDO 2005-B Ltd.: Class Description: $671,000,000 Class A-1 Floating Rate Notes Due November 2040 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A1, on review for possible downgrade Class Description: $100,000,000 Class A-2 Floating Rate Notes Due November 2040 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $88,000,000 Class B Floating Rate Notes Due November 2040 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $35,000,000 Class C Deferrable Interest Floating Rate Notes Due November 2040 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $46,000,000 Class D Deferrable Interest Floating Rate Notes Due November 2040 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. STATIC RESIDENTIAL: Moody's Reviews 'Ba2' Rating on $10 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Static Residential CDO 2005-C Ltd.: Class Description: Up to $325,000,000 Class A-1 Variable Funding Notes Due 2038 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A1, on review for possible downgrade Class Description: $59,500,000 Class A-2 Floating Rate Notes Due 2038 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $44,000,000 Class B Floating Rate Notes Due 2038 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $17,500,000 Class C Deferrable Interest Floating Rate Notes Due 2038 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $23,000,000 Class D Deferrable Interest Floating Rate Notes Due 2038 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $10,000,000 Class E Deferrable Interest Floating Rate Notes Due 2038 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. STATIC RESIDENTIAL: Moody's Lowers Ratings on Five Note Classes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Static Residential CDO 2005-A Ltd.: Class Description: $328,250,000 ClassA-1 Floating Rate Notes Due July 2040 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa2, on review for possible downgrade Class Description: $55,000,000 Class A-2 Floating Rate Notes Due July 2040 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A1, on review for possible downgrade Class Description: $45,000,000 Class B Floating Rate Notes Due July 2040 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $16,000,000 Class C Floating Rate Notes Due July 2040 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $25,000,000 Class D Floating Rate Notes Due July 2040 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. STILLWATER ABS: Moody's Downgrades Ratings on Six Classes of Notes ------------------------------------------------------------------ Moody's Investors Service downgraded ratings of six classes of notes issued by Stillwater ABS CDO 2006-1, Ltd. and left on review for possible further downgrade the ratings of three of these classes. The notes affected by this rating action are as follows: (1) Class Description: $520,000,000 Class A-1 First Priority Senior Secured Floating Rate Term Notes Due 2046 -- Prior Rating: Aaa -- Current Rating: Aa3, on review for possible downgrade (2) Class Description: $72,475,000 Class A-2 Second Priority Senior Secured Floating Rate Term Notes Due 2046 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade (3) Class Description: $26,000,000 Class A-3 Third Priority Senior Secured Floating Rate Term Notes Due 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade (4) Class Description: $11,050,000 Class B Fourth Priority Senior Secured Floating Rate Term Notes Due 2046 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ca (5) Class Description: $8,125,000 Class C Fifth Priority Secured Floating Rate Deferrable Interest Term Notes Due 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: C (6) Class Description: $4,550,000 Class D Sixth Priority Secured Floating Rate Deferrable Interest Term Notes, Due 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence as reported by the Trustee on April 14, 2008, of an event of default caused when the Class AB Overcollateralization Ratio falls below 95%, as described in Section 5.1(i) of the Indenture dated Aug. 17, 2006. Stillwater ABS CDO 2006-1, Ltd. is a collateralized debt obligation mainly backed by a portfolio of structured finance securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of further remedies to be pursued following the default event. Because of this uncertainty, the ratings assigned to Class A-1 Notes, Class A-2 Notes and Class A-3 Notes remain on review for possible further action. STRIKE PETROLEUM: Gets Letter Demanding Repayment of $10.63MM Loan ------------------------------------------------------------------ On April 18, 2008, Strike Petroleum Ltd., a 100% subsidiary of FairWest Energy Corporation, received a demand to repay its outstanding indebtedness with its secured lender. The Lender has informed Strike that as of April 17, 2008, Strike owed the Lender $10.63 million of principal and accrued interest of $0.17 million. If the amount due to the Lender is not paid, the Lender has the right to enforce its security. Strike is a wholly owned subsidiary of FairWest and is solely responsible for its secured debt with the Lender. Negotiations between Strike and the Lender to date have not resulted in a mutually agreeable agreement between the two parties. FairWest and Strike intend to pursue ongoing negotiations with the Lender to find a satisfactory resolution to valuation differences. If both company are unable to make a deal, FairWest and Strike said they will cooperate with the Lender to permit an orderly liquidation of the Strike assets. Strike's estimated March 2008 working interest production of 172 barrels of oil equivalent per day represented 20.5% of FairWest's estimated March 2008 total production of 840 BOE/D. FairWest's discretionary cash flow will not be impacted materially if liquidation of Strike is the final remedy as the present free cash flow from the Strike assets is currently dedicated to the Lender. The FairWest management team and board of directors anticipate that in the event the Strike assets are liquidated the result will be a significant reduction to the bank debt component of FairWest's consolidated working capital deficiency. The resolution of the Strike situation will free up management resources and cash flow to focus on production and reserve additions associated with its non-Strike assets. This will occur through a defined program of acquisition, exploitation, development and exploration opportunities. FairWest has recently signed an Indicative letter to increase its credit facilities with a Canadian bank that is not related to Strike's Lender based on production success in other core areas. The proceeds of FairWest's increased bank financing will be used to make payments to FairWest's trade creditors. About FairWest Energy FairWest Energy Corporation (TSX:FEC) -- http://www.fairwestenergy.com/-- is a Calgary, Alberta based junior oil and gas company that acquires, explores, develops and produces crude oil and natural gas in the provinces of Alberta and Saskatchewan. About Strike Petroleum Strike Petroleum Ltd. operates in the oil and gas industry in Calagary, Alberta. It produces natural gas, and oil and liquids. During the fiscal year ended September 30, 2006 (fiscal 2006), the Company drilled 28 wells (26.1 net) of which 24 (22.6 net) were successful gas wells, two (1.5 net) were successful oil wells, and two were dry and abandoned. During fiscal 2006, the company held 12,629 acres of land position through purchases and farm-in arrangements. As of Sept. 30, 2006, Strike's oil, natural gas and natural gas liquids volumes averaged 482 boepd (barrels of oil equivalent per day). On Jan. 24, 2007, the company entered into an arrangement agreement with FairWest Energy Corporation whereby FairWest will acquire all of the issued and outstanding shares and options of Strike. SUMMER STREET: Moody's Cuts Ratings on $63 Mil. Notes to 'B3' ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings of these notes issued by Summer Street 2007-1, Ltd.: Class Description: $80,000,000 Class A-1SA Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $63,000,000 Class A-1SB Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Summer Street 2007-1, Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. On January 31, 2008 the transaction experienced an event of default caused by a failure of the Class A Overcollateralization Ratio to be greater than or equal to the required amount pursuant Section 5.1(i) of the Indenture dated June 5, 2007. That event of default is continuing. The rating actions taken reflect continuing deterioration in the credit quality of the underlying portfolio and the increased expected loss associated with the transaction. Losses are attributed to diminished credit quality on the underlying portfolio. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, the controlling class may be entitled to direct the Trustee to take particular actions with respect to the Collateral. The severity of losses may depend on the timing and choice of remedy to be pursued by the controlling class. Because of this uncertainty, the ratings of these two classes of notes issued by Summer Street 2007-1, Ltd. are left on review for possible further action. SUMMER STREET: Two Classes of Notes Acquire Moody's Junk Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Summer Street 2005-HG1, Ltd.: Class Description: $935,000,000 Class A-1 Floating Rate Senior Secured Notes Due 2045 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $100,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2045 -- Prior Rating: Aaa -- Current Rating: Baa2, on review for possible downgrade Class Description: $21,500,000 Class B Floating Rate Subordinate Secured Notes Due 2045 -- Prior Rating: Aa2 -- Current Rating: Ba1, on review for possible downgrade Class Description: $15,000,000 Class C Floating Rate Subordinate Secured Deferrable Notes Due 2045 -- Prior Rating: A2 -- Current Rating: B3, on review for possible downgrade Class Description: $13,100,000 Class D Floating Rate Subordinate Secured Deferrable Notes Due 2045 -- Prior Rating: Baa2 -- Current Rating: Caa1, on review for possible downgrade In addition, Moody's also downgraded these notes: Class Description: $15,400,000 Class E Income Notes Due 2045 -- Prior Rating: Ba3 -- Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of RMBS securities. SUPERIOR OFFSHORE: Files For Chapter 11 Bankruptcy in Texas ----------------------------------------------------------- Superior Offshore International Inc. filed a voluntary bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of Texas. The company said it will continue to operate its business as "debtor in possession" under the jurisdiction of the Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. The company has ceased all ongoing operations, and all of its employees have been terminated except for those necessary to assist in the wind-down of its affairs, according to the company's regulatory filing with the Securities and Exchange Commission. On April 24, 2008, James Perskey, Leon Codron and E. Donald Terry resigned from the company's board of directors. Mr. Terry also resigned as the company's president and chief executive officer. Thomas E. Damon has resigned as the company's executive vice president and chief financial officer, and Steven J. Singer has resigned as the company's executive vice president and general counsel. Wayne M. Rose has resigned as the company's senior vice president- commercial, and David Weinhoffer has been terminated as executive vice president; however Mr. Rose and Mr. Weinhoffer each have been rehired by the company to assist in the wind-down process. The company's board of directors has appointed H. Malcolm Lovett, Jr., of Strategic Capital Corporation, as a director and as its chief restructuring officer. Mr. Lovett will perform the duties and assume the responsibilities of the president of the company. To date, the company's board of directors consists of Mr. Lovett and Eric Smith and Mr. Lovett. NASDAQ's Delisting Notice On April 23, 2008, the company received a delisting notice from the Nasdaq's Listing Qualifications Department, citing the company's failure to timely file its Annual Report on Form 10-K for the year ended Dec. 31, 2007. The company then said that it needed additional time to complete its financial statement review and approval process and needed to provide additional documentation to its independent registered public accounting firm, KPMG LLP, in order to resolve certain pending items. The Nasdaq's notice indicated that the company's common stock was subject to delisting from The Nasdaq Stock Market at the opening of business on April 28, 2008, unless the company requested a hearing in accordance with the Nasdaq Marketplace Rules. The company at the time said it does not intend to request such a hearing. In addition, the company said its negotiations to obtain additional financing in order to address its liquidity position has contributed to the delay. Credit Facility On April 10, 2008, the company and JPMorgan Chase Bank, N.A., as administrative agent, entered into a Fifth Amendment to Credit Agreement and Consent, effective as of April 4, 2008, to the Credit Agreement dated as of February 27, 2007 among the company, the lenders party thereto and the Administrative Agent, as amended. Among other things, the amendment provided that on May 8, 2008, the commitments of each of the lenders under the Credit Agreement will automatically terminate and the principal of all outstanding loans, together with accrued and unpaid interest thereon, and all other outstanding obligations of the company under the Credit Agreement and any other loan document will become immediately due and payable. Furthermore, the Amendment also reduced the sublimit up to which the Company may request the issuance of letters of credit under the Credit Agreement to $11,993,000 for the period from and including April 10, 2008 to but excluding May 8, 2008. In addition, the Amendment reduced the aggregate amount of the lenders' commitment to make revolving loans and to acquire participations in Letters of Credit, Overadvances and Swingline Loans to $16,993,000. The amendment also reduced the sublimit up to which each lender may make revolving loans to the Company from $5,000,000 to $0, in weekly increments of $1,250,000 between April 10 and May 8, 2008. Pursuant to the amendment, the administrative agent consented to the sale by the company of two of its four-point vessels, the Gulf Diver IV and Gulf Diver V, and a crane located at its fabrication facility in Amelia, Louisiana, provided that the Company applies 100% the net proceeds of these sales to the prepayment of its obligations under the Credit Agreement. On April 10, 2008 the company and the administrative agent entered into a collateral account agreement, effective as of April 4, 2008, as security for certain letters of credit outstanding as of the date of the amendment and the agreement. Under the agreement, the company has granted to the administrative agent a security interest in, among other things, all cash, instruments, securities, other financial assets and funds deposited from time to time in the collateral account established under the Agreement. A full-text copy of the Amended Credit Agreement is available for free at http://ResearchArchives.com/t/s?2b30 A full-text copy of the Collateral Account Agreement is available for free at http://ResearchArchives.com/t/s?2b31 About Superior Offshore Headquartered in Houston Texas, Superior Offshore (Nasdaq: DEEP) -- http://www.superioroffshore.com/-- provides subsea construction and commercial diving services to the offshore oil and gas industry. The company's construction services include installation, upgrading and decommissioning of pipelines and production infrastructure. The company operates a fleet of seven service vessels and provides remotely operated vehicles (ROVs) and saturation diving systems for deepwater and harsh environment operations. * * * The company's consolidated balance sheets showed total assets of $300,532,000 and total debts of $141,139,000 for the quarterly period ended Sept. 30, 2007. The company incurred $1,038,000 in net loss in nine months ended Sept. 30, 2007, compared with $37,000,000 in net income the previous year. SUPERIOR OFFSHORE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Superior Offshore International, Inc. 717 Texas Avenue, Suite 3150 Houston, TX 77002 Bankruptcy Case No.: 08-32590 Type of Business: The Debtor provides subsea construction and commercial diving services to the offshore oil and gas industry, serving operators in the outer continental shelf and deep waters of the U.S. Gulf of Mexico as well as offshore Mexico, Latin America, Africa and the Middle East. See http://www.superioroffshore.com/ Chapter 11 Petition Date: April 24, 2008 Court: Southern District of Texas (Houston) Judge: Wesley W. Steen Debtor's Counsel: David Ronald Jones, Esq. Email: djones@porterhedges.com Joshua Walton Wolfshohl, Esq. Email: jwolfshohl@porterhedges.com Porter & Hedges LLP 1000 Main St., 36th Flr. Houston, TX 77002-6336 Tel: (713) 226-6653, (713) 226-6695 Fax: (713) 226-6253, (713) 226-6295 http://www.porterhedges.com/ Total Assets: $300,532,000 Total Debts: $141,139,000 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Superior Subsea Personnel $7,069,897 Services. P.O. Box 309GT Ugland House S. Church St. George Town, Grand Caym. Gulmar Offshore Middle East $3,763,314 Crossmar, Inc. $3,283,597 P.O. Box 446 1950 S. Van Ave. Houma, LA 70361 Amertrin $1,404,010 PL#1 Exchange Lots Couva, Trinidad, WI L&L Oil and Gas Services, LL $961,305 P.O. Box 201617 Dallas, TX 75320-1617 Hornbeck Offshore Services, $718,953 LLC P.O. Box 54863 New Orleans, LA 70154 Bracewell & Giuliani $672,023 711 Louisiana St., Ste. 2300 Houston, TX 77002-2770 KPMG, LLP $546,703 Dept. 0721 P.O. Box 120001 Dallas, TX 75312-0721 Arc Control, Inc. $504,295 4875 Tufts Rd. Mobile, AL 36619 Integra Service Technologies $502,445 P.O. Box 972353 Dallas, TX 75397-2353 Goodcrane Corp. $468,434 6631 Rixie Rd. S.E. Olympia, WA 98501 Morgan City Rentals $414,440 P.O. Box 2946 Morgan City, LA 70381 Buxo Trinidad & Tobago, Ltd. $387,702 P.O. Box 1973, Wrightson Rd. Port of Spain, Trinidad, WI Unique System, LLC $365,465 1205 Tool St. New Iberia, LA 70560 Mako Technologies, LLC $312,248 P.O. Box 3186 Morgan city, LA 70381 Opportune $312,121 711 Louisiana St., Ste. 1770 Houston, TX 77002 Pharma-Safe, LLC $310,525 P.O. Box 1059 10271 Flordia Blvd. Walker, LA 70785 IRS $310,357 P.O. Box 249 Memphis, TN 38101 Det Norske Vertias $282,209 3445 North Causeway Blvd. AAA Bldg., Ste. 707 Metaire, LA 70002 Airplus International, Inc. $255,136 P.O. Box 7247-6064 Philadelphia, PA 19170 TAYLOR CAPITAL: Posts $10 Mil. Net Loss in Year Ended December 31 ----------------------------------------------------------------- Taylor Capital Group Inc. reported net loss of $9.6 million for the year ended Dec. 31, 2007, compared with net income of $46.2 million in 2006. The net loss in 2007 was attributable to a non-cash, after-tax charge of $23.2 million for the write-off of goodwill in the fourth quarter. This one-time write-off of all of the company's recorded goodwill was driven by the trading of the company's common stock at a discount to book value and had no impact on the company's cash flows, tangible book value or regulatory capital. Excluding this one-time charge for the write-off of goodwill, net operating earnings were $13.7 million. The largest component of the decline in operating earnings was attributable to a $31.9 million provision for loan losses in 2007, compared with a provision of $6.0 million in 2006. Additionally, net interest income in 2007 declined $6.5 million, or 5.8%, as a result of a lower net interest margin in 2007. Net income in 2006 included $15.5 million of tax benefits associated with the resolution of particular tax uncertainties. The fourth quarter of 2007 reflected a net loss of $29.3 million compared with net income of $7.2 million in the third quarter of 2007. The decrease in income resulted from a $23.2 million write- off of goodwill and a $23.0 million provision for loan losses in the fourth quarter, compared with a $3.4 million provision in the third quarter. The cause of the increased provision was further deterioration in loans relating to residential construction and land development. Net income in the third quarter of 2007 also included $2.2 million of loan syndication fees, while no such fees were received in the fourth quarter of 2007. Liquidity and Capital Resources At Dec. 31, 2007, its total assets increased $176.8 million, to $3.56 billion compared to total assets of $3.38 billion at Dec. 31, 2006. The growth in total assets was mainly funded with increased other borrowings of $126.7 million and increased Federal Home Loan Bank or FHLB advances of $125.0 million. Cash inflow from operations exceeded cash outflows by $39.9 million in 2007. The company believes that its current sources of funds are adequate to meet all of its financial commitments and asset growth targets for 2008. Its net cash outflows from investing activities for the year ended Dec. 31, 2007, was $260.8 million. During 2007, the net cash outflow was primarily invested in $344.1 million of available-for- sale investment securities. Its net cash inflows from financing activities for year ended Dec. 31, 2007, was $169.5 million. During 2007, the cash inflows were from net increases in other borrowings of $126.7 million and FHLB advances of $125.0 million. Cash was utilized in 2007 to fund net deposit outflows of $61.1 million and its repurchase of $17.6 million in shares of its common stock. During 2007, the company repurchased 629,661 shares of its common stock under its stock repurchase program at a total cost of $17.6 million. Total shares outstanding at Dec. 31, 2007, were 10,551,994, compared with 11,131,059 at Dec. 31, 2006. Stock repurchases in the fourth quarter of 2007 totaled 254,900 shares at a cost of $6.5 million. About Taylor Capital Headquartered in Illinois, Chicago, Taylor Capital Group Inc. (Nasdaq: TAYC) -- http://www.taylorcapitalgroup.com/-- is a bank- holding company. The company derives virtually all of its revenue from its subsidiary, Cole Taylor Bank, which presently operates 11 banking centers throughout the Chicago metropolitan area. At Dec. 31, 2007, the company's consolidated balance sheet showed $3.556 billion in total assets, $2.580 billion in total deposits, $722.0 million in other liabilities, and $254.3 million in total stockholders' equity. * * * As reported in the Troubled company Reporter on Feb. 1, 2008, Fitch Ratings downgraded the individual rating of the company to 'C' from 'B/C'. The rating outlook has been revised to negative from stable. TERM CDO: Moody's Downgrades Ratings on Four Classes of Notes ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Term CDO 2007-1 Ltd. Class Description: $105,000,000 Class A-1LA Floating Rate Notes Due January 2038 -- Prior Rating: Aaa, Review for Possible Downgrade -- Current Rating: Ba2, Review for Possible Downgrade Class Description: $21,000,000 Class A-1LB Floating Rate Notes Due January 2038 -- Prior Rating: A1, Possible Downgrade -- Current Rating: Caa3, Review for Possible Downgrade In addition, Moody's downgraded the ratings on these notes: Class Description: $28,000,000 Class A-2L Floating Rate Notes Due January 2038 -- Prior Rating: Baa2, Review for Possible Downgrade -- Current Rating: Ca Class Description: $18,000,000 Class A-3L Floating Rate Deferrable Notes Due January 2038 -- Prior Rating: Caa2, Review for Possible Downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. TERWIN MORTGAGE: S&P Downgrades Ratings on Certificate Classes -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 67 classes of mortgage pass-through certificates from 12 transactions issued by GSAMP Trust, JPMorgan Mortgage Acquisition Trust, Long Beach Mortgage Loan Trust, and Terwin Mortgage Trust. Concurrently, S&P placed its ratings on 18 classes on CreditWatch with negative implications and affirmed S&P's ratings on 31 classes from these transactions. Of the 12 subprime transactions S&P reviewed, six were issued in 2005 and six were issued in 2006. The downgrades reflect deterioration in available credit support to these classes. S&P addressed only the defaulted classes from the affected 2006 deals because S&P had analyzed these transactions as part of another recent review. Although a combination of subordination, excess spread, and overcollateralization provides credit support to these subprime transactions, O/C has been reduced to zero for all 12 transactions, which are seasoned 18 to 36 months. S&P lowered 15 ratings to 'D' due to the complete erosion of credit support and realized losses incurred by the classes. As of the March 2008 remittance period, cumulative losses for the affected 2005 deals, as a percentage of the respective original pool balances, ranged from 1.85% (Terwin Mortgage Trust Series TMTS 2005-6HE) to 3.40% (Long Beach Mortgage Loan Trust 2005-WL1, structure 1). Severe delinquencies (90-plus days, foreclosures, and REOs) for the 2005 affected transactions ranged from 23.65% (Long Beach Mortgage Loan Trust 2005-WL1, structure 2) to 39.66% (Long Beach Mortgage Loan Trust 2005-3) of the current pool balances. The amount of severe delinquencies has significantly increased for all 2005 deals during recent months, and the delinquency pipelines do not indicate that these levels will improve. Most of these deals are failing their delinquency and loss triggers due to the high levels of delinquencies and significant monthly net losses. S&P placed its ratings on 18 classes from three transactions issued in 2005 on CreditWatch negative. While each of the certificate classes with ratings placed on CreditWatch negative lacks what S&P believes to be a sufficient amount of credit enhancement relative to projected losses, S&P will take no further rating actions until S&P has completed additional analysis. S&P expects to further evaluate the date of the projected defaults versus the date of payment in full, as well as the relationships between projected credit support and projected losses throughout the remaining life of each certificate. The affirmations of the remaining classes from these transactions reflect loss coverage percentages that were sufficient at the current rating levels as of the March 2008 distribution period. Ratings Lowered GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-WMC1 M-4 362341PY9 CCC A+ 2005-WMC1 M-5 362341PZ6 CCC A 2005-WMC1 M-6 362341PW3 CCC A- 2005-WMC1 B-1 362341QA0 CCC BBB+ 2005-WMC1 B-2 362341QB8 CC BBB+ 2005-WMC1 B-3 362341QC6 CC BB+ 2005-WMC1 B-4 362341QD4 CC B 2005-WMC1 B-5 362341QE2 D CCC 2006-FM1 B-4 362334PW8 D CC JPMorgan Mortgage Acquisition Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-WMC3 M-10 46629KAR0 D CC Long Beach Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-3 M-4 542514PA6 CCC A+ 2005-3 M-5 542514PB4 CCC A 2005-3 M-6 542514PC2 CCC A- 2005-3 M-7 542514PD0 CC BBB+ 2005-3 M-8 542514PE8 CC BB 2005-3 M-9 542514PF5 CC BB- 2005-3 M-10 542514PG3 CC B 2005-3 M-11 542514PH1 D CCC 2005-WL1 III-M1 542514MF8 AA AA+ 2005-WL1 III-M2 542514MG6 BBB AA 2005-WL1 III-M3 542514MH4 B A+ 2005-WL1 I/II-M5 542514LM4 BBB A 2005-WL1 III-M4 542514MJ0 CCC A 2005-WL1 I/II-M6 542514LN2 BB- A- 2005-WL1 III-M5 542514MK7 CCC A- 2005-WL1 I/II-M7 542514LP7 B BBB+ 2005-WL1 III-M6 542514ML5 CCC BBB+ 2005-WL1 I/II-M8 542514LQ5 CCC BBB 2005-WL1 III-M7 542514MM3 CCC BBB 2005-WL1 III-M8 542514MN1 CC BBB 2005-WL1 I/II-M9 542514LR3 CCC BBB- 2005-WL1 III-M9 542514MS0 CC BBB- 2005-WL1 I/II-B1 542514LS1 CC BB+ 2005-WL1 I/II-M10 542514LW2 CCC BB+ 2005-WL1 III-B1 542514MP6 CC BB+ 2005-WL1 III-B2 542514MQ4 D BB 2005-WL1 I/II-B2 542514LT9 D BB- 2005-WL1 I/II-B3 542514LU6 D BB- 2005-WL1 III-B3 542514MR2 D B+ 2005-WL2 M-3 542514ND2 A AA- 2005-WL2 M-4 542514NE0 BBB A+ 2005-WL2 M-5 542514NF7 BB A+ 2005-WL2 M-6 542514NG5 B A 2005-WL2 M-7 542514NH3 CCC BBB+ 2005-WL2 M-8 542514NJ9 CCC BBB+ 2005-WL2 M-9 542514NK6 CCC BBB 2005-WL2 M-10 542514NL4 CCC BB+ 2005-WL2 B-1 542514NQ3 CC B 2005-WL2 B-2 542514NR1 CC CCC 2005-WL2 B-3 542514NS9 D CCC 2006-2 M-10 542514UE2 D CC 2006-3 B 542514UX0 D CC 2006-4 M-11 54251MAR5 D CC 2006-WL2 B-1 542514SP0 D CC Terwin Mortgage Trust Rating Transaction Class CUSIP To From TMTS 2005-16HE M-4A 881561ZP2 CCC BB TMTS 2005-16HE M-4B 881561ZQ0 CCC B TMTS 2005-16HE M-5A 881561ZR8 CC B TMTS 2005-16HE M-5B 881561ZS6 CC B TMTS 2005-16HE M-6A 881561ZT4 CC B TMTS 2005-16HE M-6B 881561ZU1 CC B TMTS 2005-16HE B-1 881561ZV9 CC CCC TMTS 2005-16HE B-2 881561ZW7 CC CCC TMTS 2005-16HE B-3 881561ZX5 D CCC TMTS 2005-6HE B-2 881561RG1 BB BBB+ TMTS 2005-6HE B-3 881561RH9 B BB TMTS 2005-6HE B-4 881561TH7 CC CCC TMTS 2005-6HE B-5 881561TJ3 D CCC Ratings Placed on CreditWatch Negative GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-WMC1 M-1 362341PU7 AA+/Watch Neg AA+ 2005-WMC1 M-2 362341PV5 AA/Watch Neg AA 2005-WMC1 M-3 362341PX1 AA-/Watch Neg AA- Long Beach Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-3 I-A 542514NT7 AAA/Watch Neg AAA 2005-3 II-A2 542514NV2 AAA/Watch Neg AAA 2005-3 II-A3 542514NW0 AAA/Watch Neg AAA 2005-3 M-1 542514NX8 AA+/Watch Neg AA+ 2005-3 M-2 542514NY6 AA/Watch Neg AA 2005-3 M-3 542514NZ3 AA-/Watch Neg AA- Terwin Mortgage Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-16HE AF-3 881561ZB3 AAA/Watch Neg AAA 2005-16HE AV-2 881561ZF4 AAA/Watch Neg AAA 2005-16HE AV-3 881561ZG2 AAA/Watch Neg AAA 2005-16HE M-1A 881561ZH0 AA+/Watch Neg AA+ 2005-16HE M-1B 881561ZJ6 AA+/Watch Neg AA+ 2005-16HE M-2A 881561ZK3 AA/Watch Neg AA 2005-16HE M-2B 881561ZL1 AA/Watch Neg AA 2005-16HE M-3A 881561ZM9 A+/Watch Neg A+ 2005-16HE M-3B 881561ZN7 BBB+/Watch Neg BBB+ Ratings Affirmed GSAMP Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-WMC1 A-3 362341PS2 AAA 2005-WMC1 A-4 362341PT0 AAA Long Beach Mortgage Loan Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-WL1 I-A-1 542514LC6 AAA 2005-WL1 II-A4 542514LG7 AAA 2005-WL1 III-A3 542514ME1 AAA 2005-WL1 I/II-M1 542514LH5 AA+ 2005-WL1 I/II-M2 542514LJ1 AA 2005-WL1 I/II-M3 542514LK8 AA- 2005-WL1 I/II-M4 542514LL6 A+ 2005-WL2 I-A1 542514NM2 AAA 2005-WL2 I-A2 542514MV3 AAA 2005-WL2 II-A1 542514NN0 AAA 2005-WL2 II-A2 542514NP5 AAA 2005-WL2 III-A1 542514MW1 AAA 2005-WL2 III-A1A 542514MX9 AAA 2005-WL2 III-A3 542514MZ4 AAA 2005-WL2 III-A4 542514NA8 AAA 2005-WL2 M-1 542514NB6 AA+ 2005-WL2 M-2 542514NC4 AA Terwin Mortgage Trust Transaction Class CUSIP Rating ----------- ----- ----- ------ 2005-16HE AF-2 881561ZA5 AAA 2005-16HE AF-4 881561ZC1 AAA 2005-16HE AF-5 881561ZD9 AAA 2005-6HE A-1C 881561QX5 AAA 2005-6HE S 881561QY3 AAA 2005-6HE M-1 881561QZ0 AA+ 2005-6HE M-2 881561RA4 AA+ 2005-6HE M-3 881561RB2 AA 2005-6HE M-4 881561RC0 AA 2005-6HE M-5 881561RD8 A+ 2005-6HE M-6 881561RE6 A+ 2005-6HE B-1 881561RF3 A TERWIN MORTGAGE: Credit Support Erosion Cues S&P's 11 Rating Cuts ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 11 classes of asset-backed certificates from Terwin Mortgage Trust Series TMTS 2005-18ALT. At the same time, S&P placed its ratings on classes A-4 and P-X on CreditWatch with negative implications. Furthermore, S&P affirmed its ratings on the remaining four classes from this transaction. The downgrade of class B-4 to 'D' from 'CCC' reflects the complete erosion of credit support and the subsequent write-downs for this class. Class B-4 realized $261,346 in losses during the March 2008 remittance period. The lowered ratings on the remaining classes and the CreditWatch placements of classes A-4 and P-X reflect a steady increase in the dollar amount of loans in the transaction's delinquency pipeline over the past six months, combined with deterioration in credit support due to realized losses. The high levels of total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) in this transaction indicate that losses will continue to increase and further erode available credit support. Severe delinquencies have risen by 43% over the past six remittance periods to $40.059 million, while the average monthly net loss over the same period was $585,733. As of the March 2008 remittance period, cumulative realized losses were $5,378,184, or 1.51% of the original principal balance; total delinquencies were 30.86% of the current principal balance; and severe delinquencies were 18.31% of the current principal balance. The lowered ratings are in line with S&P's projected credit enhancement amounts following the liquidation of many of the loans currently in the transaction's delinquency pipeline. S&P's expected losses also factor in loans that are now current but may default in the future. The affirmations reflect current and projected credit support percentages that are sufficient to support the certificates at their current rating levels. The initial credit enhancement percentages meet or exceed the amount required for the affirmed ratings. Subordination is the primary source of credit support for this transaction. The underlying collateral for the deal consists primarily of fixed- and adjustable-rate, conventional mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Terwin Mortgage Trust Series TMTS 2005-18ALT Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- TMTS 2005-18ALT M-1 BBB+ AA+ TMTS 2005-18ALT M-2 BB AA TMTS 2005-18ALT M-3 BB- AA- TMTS 2005-18ALT M-4 B+ A+ TMTS 2005-18ALT M-5 B BBB+ TMTS 2005-18ALT M-6 B- BB TMTS 2005-18ALT M-X B- BB TMTS 2005-18ALT B-1 CCC BB TMTS 2005-18ALT B-2 CCC B TMTS 2005-18ALT B-X CCC B TMTS 2005-18ALT B-4 D CCC Ratings Placed on CreditWatch Negative Terwin Mortgage Trust Series TMTS 2005-18ALT Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- TMTS 2005-18ALT A-4 AAA/Watch Neg AAA TMTS 2005-18ALT P-X AAA/Watch Neg AAA Ratings Affirmed Terwin Mortgage Trust Serie TMTS 2005-18ALT Asset-backed certificates Series Class Rating ------ ----- ------ TMTS 2005-18ALT A-1 AAA TMTS 2005-18ALT A-2 AAA TMTS 2005-18ALT A-3 AAA TMTS 2005-18ALT B-3 CCC UAL CORP: Continental Airlines Chooses Not to Merge with United --------------------------------------------------------------- Continental Airlines Inc.'s Chairman and Chief Executive Officer Larry Kellner and President Jeff Smisek disclosed to more than 45,000 employees that the company's Board of Directors unanimously supported the management's recommendation that, in the current industry environment, the best course for Continental is not to merge with another airline at this time. As reported in the Troubled Company Reporter on March 20, 2008, UAL Corp., United Air Lines Inc.'s parent, planned to pursue a consolidation with Continental Airlines if given the go-ahead, to create the airline industry's biggest carrier, United Press International reports. Stephen Canale, a union representative on United Airlines' board of directors, said that Continental is "without question" the first choice for a United merger. According to the two executives, the Board very carefully considered all the risks and benefits of a merger with another airline, and determined that the risks of a merger at this time outweigh the potential rewards, as compared to Continental's prospects on a standalone basis. The management will, however, continue to review potential alliances and its membership in SkyTeam. Continental is considering alternatives to SkyTeam as its carefully evaluates which major global alliance will be best for Continental over the long term. While some would prefer to see Continental pursue a merger, the company strongly believes it has made the right decision -- one that is in the best interests of its stockholders, co-workers, customers and the communities it serves. Messrs. Kellner and Smisek relate that every U.S. carrier, including Continental, is under enormous pressure from record high fuel prices, a slowing U.S. economy and a weak dollar. In today's harsh environment, the company must continue to adjust its business model to ensure it to successfully navigate through these difficult times, so that in the future it can once again grow and prosper. In the meantime, Continental must all continue to concentrate on what it does so well: delivering clean, safe and reliable air transportation every day. Even in these tough times, Messrs. Kellner and Smisek said, Continental has great strengths. It has an enviable position in the New York market, a powerful hub in Houston, and hubs in Cleveland and Guam. Continental has a solid trans-Atlantic route network, which has recently been enhanced by our access to London Heathrow. It also has a great Latin American network and a growing portfolio of routes to India and Asia. Continental flies the youngest, most fuel-efficient fleet and have the best new aircraft order book among the major network carriers. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,900 daily departures throughout the Americas, Europe and Asia, serving 144 domestic and 139 international destinations. More than 500 additional points are served via SkyTeam alliance airlines. With more than 45,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). * * * Moody's Investor Service placed UAL Corp.'s long term corporate family and probability ratings at 'B2' in January 2007. The ratings still hold to date with a stable outlook. UAL CORP: Begins Merger Discussions with US Airways --------------------------------------------------- US Airways Group Inc. recently got together with United Airlines, Inc. to discuss a potential merger, which would revive a consolidation that was turned down by regulators in 2001, Ted Reed of the TheStreet.com reported. US Airways and United were already having discussions even before Delta Airlines, Inc. and Northwest Airlines Corp. announced plans to merge, a person familiar with the situation had disclosed. However, the Delta-Northwest deal has spurred talks of a Continental-United consolidation, which could push US Airways out of the picture, the source said. US Airways Chief Executive Officer Doug Parker made no move to counter speculations that US Airways may be involved in another merger. But he did say that if US Airways does take part in a merger, "we will do so because we believe it is the best interests of our employees and our airline." Mr. Parker added that despite the problems associated with the 2005 merger between America West and US Airways, the carrier is stronger today as a result, said Mr. Reed. Meanwhile, an airline analyst wrote in a research note this week, that a US Airways-United deal has "considerable merit" and would be less complicated than a UAL-Continental merger, The Charlotte Observer reported. According to the Observer, a US Airways-United merger could be easier when it comes to aligning the wages of pilots, combining fleets and reducing flights and seats. DOT Reduces Fine The U.S. Department of Transportation reduced the fine it imposed against US Airways Group Inc. for problems related to the company's reporting of flight delays, the Pittsburgh Business Times reports. The Business Times says the fine has been reduced from $50,000 to $30,000. US Airways had explained that the "problem stemmed from melding reservation systems after the 2005 merger with America West Airlines," according to the paper. "This stemmed from having two separate reservations system prior to our March 2007 reservations system integration," US Airways spokesman Morgan Durrant said, reports Business Times. "What likely happened is that someone called a pre-merger America West reservations center and asked for on-time performance information for a pre-merger US Airways flight. At any rate, the issue is fixed and on-time performance information is available to callers who ask." The DOT requires U.S. carriers to disclose flight delays to federal government and consumers. USAIR Builds New Maintenance Plant US Airways started building a new equipment maintenance plant at the Philadelphia International Airport on April 17, 2008, Linda Loyd of The Philadelphia Inquirer reports. US Airways expects the 58,000-square-foot plant to be completed late next year, at an estimated total cost of $18,000,000, Ms. Loyd notes. The plant will consolidate three existing US Airways repair facilities at the airport, The Philadelphia Inquirer says. About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) - http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc., Material Services Company, Inc., and Airways Assurance Limited, LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' Chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 158; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 26, 2008, Standard & Poor's Ratings Services revised its outlook on US Airways Group Inc. to stable from positive. S&P has affirmed all ratings, including the 'B-' long-term corporate credit rating. The TCR reported on April 17, 2008, that Fitch Ratings has affirmed the debt ratings of US Airways Group, Inc. as: Issuer Default Rating at 'B-'; Secured term loan rating at 'BB-/RR1'; and Senior unsecured rating at 'CCC/RR6'. Fitch's ratings apply to approximately $1.7 billion in outstanding debt. The Rating Outlook has been revised to Stable from Positive. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on April 22, 2008, Standard & Poor's Ratings Services revised its rating outlook on UAL Corp. and its United Air Lines Inc. subsidiary (both rated B/Negative/--) to negative from stable. On April 24, 2008, the TCR related that Standard & Poor's Ratings Services said that its ratings and outlook on UAL Corp., parent of United Air Lines Inc. (both rated B/Negative/--) are not affected by UAL's report of a heavy first-quarter loss. UAL reported a first-quarter $542 million pretax loss, as much higher fuel prices more than offset increased revenues. S&P had revised its rating outlook on both entities to negative from stable on April 16, 2008. In that outlook revision, S&P cited very high fuel prices and the expected effect on UAL revenues of a weak U.S. economy. US AIRWAYS: Begins Merger Discussions with United Airlines ---------------------------------------------------------- US Airways Group Inc. recently got together with United Airlines, Inc. to discuss a potential merger, which would revive a consolidation that was turned down by regulators in 2001, Ted Reed of the TheStreet.com reported. US Airways and United were already having discussions even before Delta Airlines, Inc. and Northwest Airlines Corp. announced plans to merge, a person familiar with the situation had disclosed. However, the Delta-Northwest deal has spurred talks of a Continental-United consolidation, which could push US Airways out of the picture, the source said. US Airways Chief Executive Officer Doug Parker made no move to counter speculations that US Airways may be involved in another merger. But he did say that if US Airways does take part in a merger, "we will do so because we believe it is the best interests of our employees and our airline." Mr. Parker added that despite the problems associated with the 2005 merger between America West and US Airways, the carrier is stronger today as a result, said Mr. Reed. Meanwhile, an airline analyst wrote in a research note this week, that a US Airways-United deal has "considerable merit" and would be less complicated than a UAL-Continental merger, The Charlotte Observer reported. According to the Observer, a US Airways-United merger could be easier when it comes to aligning the wages of pilots, combining fleets and reducing flights and seats. DOT Reduces Fine The U.S. Department of Transportation reduced the fine it imposed against US Airways Group Inc. for problems related to the company's reporting of flight delays, the Pittsburgh Business Times reports. The Business Times says the fine has been reduced from $50,000 to $30,000. US Airways had explained that the "problem stemmed from melding reservation systems after the 2005 merger with America West Airlines," according to the paper. "This stemmed from having two separate reservations system prior to our March 2007 reservations system integration," US Airways spokesman Morgan Durrant said, reports Business Times. "What likely happened is that someone called a pre-merger America West reservations center and asked for on-time performance information for a pre-merger US Airways flight. At any rate, the issue is fixed and on-time performance information is available to callers who ask." The DOT requires U.S. carriers to disclose flight delays to federal government and consumers. USAIR Builds New Maintenance Plant US Airways started building a new equipment maintenance plant at the Philadelphia International Airport on April 17, 2008, Linda Loyd of The Philadelphia Inquirer reports. US Airways expects the 58,000-square-foot plant to be completed late next year, at an estimated total cost of $18,000,000, Ms. Loyd notes. The plant will consolidate three existing US Airways repair facilities at the airport, The Philadelphia Inquirer says. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on April 22, 2008, Standard & Poor's Ratings Services revised its rating outlook on UAL Corp. and its United Air Lines Inc. subsidiary (both rated B/Negative/--) to negative from stable. On April 24, 2008, the TCR related that Standard & Poor's Ratings Services said that its ratings and outlook on UAL Corp., parent of United Air Lines Inc. (both rated B/Negative/--) are not affected by UAL's report of a heavy first-quarter loss. UAL reported a first-quarter $542 million pretax loss, as much higher fuel prices more than offset increased revenues. S&P had revised its rating outlook on both entities to negative from stable on April 16, 2008. In that outlook revision, S&P cited very high fuel prices and the expected effect on UAL revenues of a weak U.S. economy. About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) - http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc., Material Services Company, Inc., and Airways Assurance Limited, LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' Chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 158; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 26, 2008, Standard & Poor's Ratings Services revised its outlook on US Airways Group Inc. to stable from positive. S&P has affirmed all ratings, including the 'B-' long-term corporate credit rating. The TCR reported on April 17, 2008, that Fitch Ratings has affirmed the debt ratings of US Airways Group, Inc. as: Issuer Default Rating at 'B-'; Secured term loan rating at 'BB-/RR1'; and Senior unsecured rating at 'CCC/RR6'. Fitch's ratings apply to approximately $1.7 billion in outstanding debt. The Rating Outlook has been revised to Stable from Positive. USA COMMERCIAL: SEC Files Lawsuit Against Former CEO for Fraud -------------------------------------------------------------- The U.S. Securities and Exchange Commission filed a lawsuit in the U.S. District Court for the District of Nevada against Joseph Milanowski, the former president of USA Commercial Mortgage Company, for fraud and misappropriation of the company's trust fund. The company, doing business as USA Capital, raised more than $960 million from approximately 6,800 investors through various investments in real estate loans. The fraud case against Mr. Milanowski relates to one of USA Capital's investment vehicles, the USA Capital Diversified Trust Deed Fund, which from May 2000 to September 2005 raised $150 million from 1,900 investors. Contrary to the representations to the Fund investors, the SEC relates, Mr. Milanowski used the vast majority of the Fund's offering proceeds to make unsecured loans to entities affiliated with him, which entities eventually defaulted on the loans. As a result of Mr. Milanowski's misuse of the Fund's money and the large number of defaulted loans, USA Capital, certain of its affiliates, and the Fund filed for Chapter 11 protection in April 2006 and the Fund investors lost over half of their investments. The SEC accused Mr. Milanowski of: -- violating Sections 5(a) and 5(c) of the Securities Act by not registering or filing a registration statement with the SEC; and -- violating Section 17(a) and Section 10(b) of the Securities Act by offering, selling, or purchasing securities by the use of means or instruments of communication in interstate commerce or by the use of mails: a) with scienter, employed devices, or schemes to defraud; b) to obtain money or property by means of untrue statements of material fact or by omitting to state a material fact necessary in order to mislead; c) to engage in transactions, practices, or courses of business which would be classified as fraud or deceit upon the purchaser. About USA Capital Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba USA Capital -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, and Annette W. Jarvis, Esq., at Ray Quinney & Nebeker, P.C., represent the Debtors in their restructuring efforts. Thomas J. Allison, a senior managing director at Mesirow Financial Interim Management LLC, has been employed as Chief Restructuring Officer for the Debtors. Susan M. Freeman, Esq., and Rob Charles, Esq., at Lewis and Roca LLP represent the Official Committee of Unsecured Creditors of USA Commercial Mortgage Company. Edward M. Burr at Sierra Consulting Group, LLC, gives financial advice to the Creditors Committee of USA Mortgage. Marc A. Levinson, Esq., and Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP, and Bob L. Olson, Esq., and Anne M. Loraditch, Esq., at Beckley Singleton, Chartered, represent the Official Committee of Equity Security Holders of USA Capital Diversified Trust Deed Fund, LLC. FTI Consulting, Inc., gives financial advice to the Equity Committee of USA Diversified. Candace C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon, Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent the Official Committee of Equity Security Holders of USA Capital First Trust Deed Fund, LLC. Matthew A. Kvarda, at Alvarez & Marsal, LLC, gives financial advise to the Equity Committee of USA First. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 million and $50 million. The Debtor's Chapter 11 plan of reorganization was confirmed on Jan. 8, 2007. WACHOVIA MORTGAGE: Moody's Downgrades Ratings on 15 Tranches ------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 15 tranches from two Alt-A transactions issued by Wachovia Mortgage Loan Trust. Ten tranches remain on review for possible further downgrade. Additionally, 6 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded or placed on review, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: Wachovia Mortgage Loan Trust, Series 2006-ALT1 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba1 -- Cl. B-2, Downgraded to Ca from Ba3 Issuer: Wachovia Mortgage Loan Trust, Series 2006-AMN1 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A3 from Aa1; -- Cl. M-2, Downgraded to Ba2 from Aa2; -- Cl. M-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba1 WALTER INDUSTRIES: Moody's Rates Proposed Revolver 'B2' ------------------------------------------------------- Moody's Investors Service assigned a B2, LGD3 rating to Walter Industries' proposed senior secured revolver, and at the same time lowered the senior secured rating on Term Loan B to B2 from B1. Moody's also lowered the corporate family and probability of default ratings to B2 from B1. The rating outlook is stable. The B2 corporate family rating reflects the small, highly concentrated nature of Walter's two met coal mines from which it derives most of its cash flow, the substantial increase in recourse debt, its high level of OPEB, workers' comp and Black Lung obligations relative to its similarly rated coal mining peers, and its aggressive debt repayment obligations in 2009 pro forma for the proposed facility. Underground coal mining is a risky and capital intensive business and Walter is a small-sized coal miner (6 million tons per year). The rating also reflects the strong cash flow expected to be generated by Walter's predominantly met coal operation in the next 12 to 18 months as a result of currently extraordinarily high met coal prices, and also considers the modest cash flow streams from the Sloss and natural gas businesses. The B2 rating assumes that Walter will complete its intended separation of the financing and homebuilding business later this year. This segment operates through Walter's home mortgage finance subsidiary, Walter Mortgage Company. Downgrades: Issuer: Walter Industries, Incorporated -- Probability of Default Rating, Downgraded to B2 from B1 -- Corporate Family Rating, Downgraded to B2 from B1 -- Senior Secured Bank Credit Facility, Downgraded to a range of 48 - LGD3 to B2 from a range of 47 - LGD3 to B1 Outlook Actions: Issuer: Walter Industries, Incorporated -- Outlook, Changed To Stable From Negative Moody's last rating action on Walter Industries was to lower the corporate family rating to B1, Negative outlook from Ba3, Stable, on Nov. 29, 2007. Walter Industries, Incorporated, based in Tampa, Florida, is currently a diversified company with operations engaged in the production of high-quality metallurgical coal for worldwide markets and in the production of natural gas, and has historically been engaged in affordable homebuilding, and related financing. The company has indicated its intention to separate the homebuilding and related financing business from the metallurgical coal and natural gas business with a targeted execution in the second half of this year. For the year ended Dec. 31, 2007, net sales and revenues were approximately $1.2 billion. WALTER INDUSTRIES: S&P Affirms 'BB' Rating on Revolver Due 2010 --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' rating on Walter Industries Inc.'s senior secured revolving credit facility due 2010. The recovery rating remains unchanged at '1'. The affirmation follows the company's proposed increase in the size of the revolver by $250 million, to $475 million. The ratings indicate the expectation of very high (90% to 100%) recovery in the event of a payment default. Walter will use the increased availability to repay its mortgage warehousing facilities supporting the financing unit of its homebuilding business. The facilities have a current balance of $214 million. Proceeds will also be used to fund the current backlog in the company's homebuilding segment. Availability under the revolving credit facility will step down quarterly beginning March 31, 2009, to a $250 million commitment on Dec. 31, 2009. Pro forma for the proposed transaction, S&P expects Walter Industries to have approximately $850 million of adjusted debt (using S&P's captive finance methodology to separate financing unit debt) including S&P's standard adjustments for operating leases and postretirement obligations. "The ratings reflect the limited size and scope of operations of its core coal mining business, its significant leverage, and the difficult mining conditions in its Southern Appalachian operations," said Standard & Poor's credit analyst Sherwin Brandford. "The ratings also reflect its high-quality metallurgical coal reserves and currently favorable metallurgical coal prices." Ratings List Walter Industries Inc. Corporate credit rating B+/Stable/-- $450 mil term loan B due 2012 BB Recovery rating 1 Rating Affirmed U.S. revolving credit fac due 2010 BB Recovery rating 1 WELLMAN INC: Creditors' Committee Balks at CRO Employment --------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy case of Wellman Inc. and its debtor-affiliates tells the U.S. Bankruptcy Court for the Southern District of New York that the Debtors do not need a chief restructuring officer since they already have a sufficient management team, two large firms and a major investment bank, to help them operate their business, run their bankruptcy cases, and sell assets. As reported in the Troubled Company Reporter on April 11, 2008, the Debtors sought authority from the Court to employ Conway, Del Genio, Gries & Co., LLC, to provide restructuring management services. The Debtors stated it selected CDG because of its long- standing reputation in assisting companies through complex financial restructuring, including Chapter 11 cases. Since CDG was founded, it has advised on over 90 restructuring and interim management transactions. The panel says that retaining a chief restructuring officer at the cost of $125,000 a month, where administrative insolvency is a distinct possibility makes little sense. According to the Creditors Committee, the retention of Conway, Del Genio, Gries & Co., LLC, provides no benefit to the Debtors' estates, other than comfort to the secured creditors regarding the Debtors' financial reporting. "Handling financial information tops the list of services CDG will provide, including cash flow projections, variance analyses and collateral monitoring reports of particular interest to the secured creditors," the Creditors Committee points out. The Committee adds that the list of other services that CDG will provide can be efficiently rendered by their retained professionals. The Creditors Committee further says that the unsecured creditors should not be burdened by the costs associated with CDG's retention since they will not benefit from the firm's services. It urges the Court to modify the proposed order approving the employment to provide that CDG will be paid exclusively from the secured creditors' collateral that is subject to valid and perfected prepetition liens. "If the secured creditors want to pay to have an outside executive at the Debtors, that is their prerogative," the Creditors Committee avers. "But assets otherwise available to unsecured creditors should not be compromised by a retention that provides no benefit to unsecured creditors." Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WELLMAN INC: Creditors' Panel Wants Sale Incentive Plan Modified ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Wellman Inc. and its debtor-affiliates' bankruptcy case asked the U.S. Bankruptcy Court for the Southern District of New York to modify the Sale and Reorganization Incentive Plan to provide that the program will be paid by each of the three secured creditor constituencies and unsecured creditors. As reported in the Troubled Company Reporter on April 9, 2008, the Debtors sought permission from the Court to implement an incentive plan for their eight senior managers and other employees in connection with the sale or reorganization of their business. To recall, the Debtors are required to sell all their assets by mid-August 2008 in return for $225 million in postpetition loan arranged by Deutsche Bank Securities Inc. The sale proceeds will be used to pay off the DIP Loan, and the prepetition lenders that hold a collateral in the Debtors' assets. The Sale and Reorganization Incentive Plan will provide a base bonus pool of $2.7 million, in which $2 million will be paid to the eight senior managers based on an agreed distribution while the rest will be paid to the other employees on a discretionary basis. They will get their bonuses after the sale has been completed or the reorganization plan has been confirmed. The eight senior managers who are entitled to payment are Tom Duff, Keith Phillips, Mark Ruday, Joe Tucker, Steve Ates, Ian Shaw, David Styka, and Barry Taylor. The Incentive Plan also includes an additional incentive bonus to maximize sale transaction value. The senior managers and the other employees will get an incremental bonus of 2% of the total consideration for transaction values that exceed $400 million, or 1% for transaction values for $350 million to $400 million. The Debtors believe the Incentive Plan will keep the senior managers and the other employees focused in managing the business in the midst of an expedited sale process, given their increased workload and economic insecurity. The Creditors Committee informs the Court that it does not question the Debtors' business judgment that the Incentive Plan is necessary. It points out, however, that only the secured creditors will benefit from the efforts of the senior managers unless the proceeds realized from the asset sale exceed the Debtors' secured debt obligations. The Creditors Committee further says that the costs of the Incentive Plan will accrue as unsecured administrative expense claims, which are entitled to payment in full before payment of the general unsecured claims. "The result is entirely inequitable. The costs of the [Sale and Reorganization Incentive Plan] should be paid from the proceeds of the sale and should be allocated among the various creditor constituencies based on their recoveries from the proceeds," it points out. The Creditors Committee suggests that each creditor constituency should set aside from the portion of the sale proceeds distributable to the creditor constituency an amount equal to the product of: (i) the total amount due under the program; and (ii) a fraction, the numerator of which should be the amount of the sale proceeds that can be allocated to the constituency and the denominator of which should be the aggregate sale proceeds. "The allocation will fairly divide the responsibility to satisfy the financial obligations imposed by the [program] between the various creditor constituencies in these cases on the basis of the benefit derived from the sale and, therefore, the [Sale and Reorganization Incentive Plan]," the Creditors Committee avers. Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WELLMAN INC: U.S. Trustee Asks Court to Reject Sale Incentive Plan ------------------------------------------------------------------ Diana G. Adams, the United States Trustee for Region 2, asks the U.S. Bankruptcy Court for the Southern District of New York to deny the implementation of the Sale and Reorganization Incentive Plan of Wellman Inc. and its debtor-affiliates. As reported in the Troubled Company Reporter on April 9, 2008, the Debtors sought permission from the Court to implement an incentive plan for their eight senior managers and other employees in connection with the sale or reorganization of their business. To recall, the Debtors are required to sell all their assets by mid-August 2008 in return for the $225 million in postpetition loan arranged by Deutsche Bank Securities Inc. The sale proceeds will be used to pay off the DIP Loan, and the prepetition lenders that hold a collateral in the Debtors' assets. The Sale and Reorganization Incentive Plan will provide a base bonus pool of $2.7 million, in which $2 million will be paid to the eight senior managers based on an agreed distribution while the rest will be paid to the other employees on a discretionary basis. They will get their bonuses after the sale has been completed or the reorganization plan has been confirmed. The eight senior managers who are entitled to payment are Tom Duff, Keith Phillips, Mark Ruday, Joe Tucker, Steve Ates, Ian Shaw, David Styka, and Barry Taylor. The Incentive Plan also includes an additional incentive bonus to maximize sale transaction value. The senior managers and the other employees will get an incremental bonus of 2% of the total consideration for transaction values that exceed $400 million, or 1% for transaction values for $350 million to $400 million. The Debtors believe the Incentive Plan will keep the senior managers and the other employees focused in managing the business in the midst of an expedited sale process, given their increased workload and economic insecurity. Section 503(c) of the Bankruptcy Code, which took effect with the enactment of the Bankruptcy Abuse and Consumer Protection Act of 2005, bars retention payments to a debtor's insiders, unless specific requirements are achieved. The specific requirements, which are provided under Section 503(c)(1), are: * the payment is essential to retain an employee that has a bona fide job offer from another business at the same or greater rate of compensation; * the services provided are essential to the survival of the business; and * either (i) the amount of the transfer is not greater than 10 times the amount of the mean transfer given to non- management employees for any purpose during the calendar year in which the transfer is made, or (ii) if no similar transfer is made for the benefit of non-management employees during such calendar year, the amount of the transfer is not greater than 25% of the amount of any similar transfer made for the benefit of such insider for any purpose during the calendar year before the transfer was made. The U.S. Trustee says the Plan "improperly attempts to bypass these important new provisions by recharacterizing the proposed bonuses as financial 'incentive' payments." That the Debtors have chosen to style the bonuses as the "Wellman Sale and Reorganization Incentive Plan," as opposed to more properly referring to these proposed bonuses as retention payments, does not exempt them from their burden of proof under Section 503(c)(1), states Andrew D. Velez-Rivera, trial attorney at the Office of the U.S. Trustee. The U.S. Trustee notes the Debtors have not (i) moved for authority under Section 503(c)(1); (ii) fulfilled their burden of presenting any evidence that would permit the Court to determine if the payments satisfy the statutory requisites; and (iii) set forth any grounds why Section 503(c)(1) does not apply. She further says that even if the Debtors were able to prove that Section 503(c)(1) does not apply, the proposed bonuses would still fail to meet the applicable "business judgment" test. According to the U.S. Trustee, the sale price proposed as the benchmark for the bonuses bears little relationship to the efforts of the senior managers beyond the duties they already have as fiduciaries in the Debtors' bankruptcy cases. She further argues that paying discretionary bonuses to the senior managers is not a sound exercise of the Debtors' business judgment, in light of the uncertainty that the Second Lien Lenders will be paid in full, and that the unsecured creditors will be paid anything. Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WELLS FARGO: Six Tranches Acquire Moody's Rating Downgrades ----------------------------------------------------------- Moody's Investors Service downgraded the ratings of 6 tranches from Wells Fargo Alternative Loan 2005-2 Trust. One tranche remains on review for possible further downgrade. Additionally, 14 tranches from Wells Fargo Alternative Loan 2007-PA01 Trust were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded or placed on review, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions are a result of Moody's on-going review process. Complete rating actions are: Issuer: Wells Fargo Alternative Loan 2005-2 Trust -- Cl. M-2, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to A1 from Aa2 -- Cl. M-4, Downgraded to Ba3 from A3 -- Cl. M-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba3 -- Cl. B-2, Downgraded to Ca from B2 Issuer: Wells Fargo Alternative Loan 2007-PA01 Trust -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-10, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-11, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-12, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-13, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-WIO, Placed on Review for Possible Downgrade, currently Aaa WENDY'S INTERNATIONAL: Inks $2BB Buyout Deal with Triarc Companies ------------------------------------------------------------------ Wendy's International Inc. has signed a definitive merger agreement with Triarc Companies Inc., the franchisor of the Arby's restaurant system, for a $2.34 billion all-stock transaction. Wendy's shareholders will receive a fixed ratio of 4.25 shares of Triarc Class A Common Stock for each share of Wendy's common stock they own. Wendy's climbed 4.6% in New York Stock Exchange composite trading on Thursday after Triarc said it will offer 4.25 shares for each Wendy's share, Josh Fineman and Zachary Mider of Bloomberg report. That values the chain's Class A shares at about $26.78 each, 5.7% higher than the previous closing price, Bloomberg relates. Bloomberg cites Cowen & Co. analyst Paul Westra, saying: "The announcement is definitely a psychological disappointment, especially after the rather embarrassingly long one-year search." "The drawn-out uncertainty ultimately led to a fundamental deterioration of the Wendy's business." Various reports say Wendy's profits totaled $4.1 million, or 5 cents, a share for the quarter ended March 30, down from $14.7 million, or 15 cents a share, a year ago. Revenue lowered to $513 million from $522 million a year ago, reports note. Triarc will have a hard time restructuring the foodchain, Janet Adamy of WSJ, relates. After more than two years of bitter public exchanges with Wendy's, Triarc chairman Nelson Peltz and the company's new management will have to win the trust of franchisees and employees, WSJ notes. Objectives The transaction is expected to bring together Arby's and Wendy's, two quick service restaurant brands. The combined systems will have approximately 10,000 restaurant units and pro forma annual system sales of approximately $12.5 billion. The company relates it will position it as the nation's third largest quick service restaurant company. Under the agreement, Triarc's shareholders will be asked to approve a charter amendment pursuant to which each share of Triarc's Class B Common Stock, Series 1, will be converted into one share of its Class A Common Stock, resulting in a post-merger company with a single class of common stock. Arby's and Wendy's will operate as autonomous brand business units headquartered in Atlanta, Georgia, and in Dublin, Ohio, each dedicated to operational improvements. The new company expects to pursue daypart expansion, focused on breakfast, expansion for both brands, and growth through future acquisitions and new unit development. A consolidated support center to be based in Atlanta will oversee all public company responsibilities and other central service functions. As a result, substantial corporate overhead savings are expected. Roland Smith, Triarc's chief executive officer, will continue in that role for the combined company and also will become chief executive officer of the Wendy's brand. Triarc will change its corporate name post-merger to include the name "Wendy's" and to reflect its new identity as the owner of this recognized restaurant brand. Triarc's board of directors will also be reconstituted and will have 12 members, including two directors nominated by Wendy's. Triarc's chairman, Nelson Peltz and its vice chairman, Peter May, who together own shares representing approximately 35% of the voting power of Triarc's outstanding stock, have committed to vote their shares in favor of the transaction. Trian Partners, an investment management firm which Messrs. Peltz and May own together with Edward P. Garden, through its beneficial ownership of 9.8% of Wendy's stock, is the largest shareholder of Wendy's and has agreed to vote its shares in favor of the transaction. "We believe the combination of Arby's and Wendy's will create a powerful new restaurant company and a 'must own' restaurant stock with significant upside potential as we execute on the many opportunities we see to expand and improve these two very valuable brands," Mr. Smith said. "Working together with the Wendy's team, we expect to improve margins significantly at Wendy's company-owned stores, Mr. Smith added. "We also expect to drive significant synergies and improve efficiency, resulting in substantial annual savings for our combined organization. Through the execution of major operating improvements and the realization of synergies, we expect to generate substantial value for shareholders. We also expect to execute on a number of growth initiatives for the combined organization that should further increase shareholder value." The combination of Arby's and Wendy's is expected to create several important levers to enhance shareholder value: -- Arby's will leverage its management team's established track record of operational excellence to improve the results of Wendy's company-owned stores. Planned operating improvements at Wendy's company-owned stores are estimated to generate approximately $100 million of annual incremental operating profit over time through improved costs associated with food, labor and general operating expenses. -- Fully realized synergies and overhead savings are expected to reach an annual run rate of approximately $60 million over time through the elimination of duplicate corporate functions and a streamlining of support services. -- U.S and international expansions are planned for both brands. Daypart expansion will be focused on breakfast well as snacks and late night, and dual-concept unit development will be explored in high-cost real estate markets. "We are committed to operating as a highly focused organization and to fully realize the many operating and strategic opportunities we will have as a result of bringing Arby's and Wendy's together, while at the same time maintaining the strong identity and integrity of both brands, Mr. Smith stated. Mr. Smith has served as chief executive officer of Triarc Companies Inc. since June 2007 and chief executive officer of Arby's Restaurant Group Inc. since April 2006. Previously, he served as president and chief executive officer of American Golf Corporation and National Golf Properties, President and chief executive officer of AMF Bowling Worldwide Inc., and president and chief executive officer of Arby's Inc., dba Triarc Restaurant Group. Mr. Smith is a graduate of the U.S. Military Academy at West Point, New York. "Over the past 12 months, the Special Committee of the Wendy's Board conducted a rigorous process that will result in Wendy's shareholders receiving a premium for their shares," James V. Pickett, Wendy's chairman, said. "We believe this transaction with Triarc is in the best interests of all of Wendy's constituencies and represents superior value to what the board anticipates Wendy's would have generated as an independent company. "Wendy's directors deeply appreciate the patience and dedication of our shareholders, franchisees and employees during a long process," Mr. Pickett said. "Wendy's needs stability and bringing closure will enable our employees and franchisees to focus solely on the business and customers. The board and management look forward to working with the Triarc team." The transaction has been approved by the boards of directors of both companies. The transaction is subject to regulatory approvals and customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction also requires the approval of Triarc and Wendy's shareholders. The transaction is expected to close in the second half of 2008. Advisors Wachovia Securities and Merrill Lynch & Co. acted as Triarc's financial advisors, Paul Weiss Rifkind Wharton & Garrison LLP and Jones Day acted as Triarc's legal counsel and Cadwalader Wickersham & Taft LLC acted as Trian Fund Management L.P.'s legal counsel. Wendy's financial advisors were J.P. Morgan Securities Inc. and Greenhill & Co. LLC. Wendy's legal advisors were Akin Gump Strauss Hauer & Feld LLP and Winston and Strawn, and the Special Committee's legal advisor was Baker Hostetler. About Triarc Companies Inc. Headquartered in New York City, Triarc Companies Inc. (NYSE:TRY.B/TRY) -- http://www.triarc.com/-- is a holding company and, through its subsidiaries, is currently the franchisor of the Arby's restaurant system and the owner of approximately 94% of the voting interests, 64% of the capital interests and at least 52% of the profits interests in Deerfield & Company LLC, an asset management firm. The Arby's restaurant system is comprised of approximately 3,600 restaurants, of which, as of Dec. 31, 2006, 1,061 were owned and operated by the company's subsidiaries. Deerfield & Company LLC, through its wholly-owned subsidiary, Deerfield Capital Management LLC, is a Chicago-based asset manager offering a diverse range of fixed income and credit-related strategies to institutional investors with about $13.2 billion under management as of Dec. 31, 2006. About Wendy's International Based in Dublin, Ohio, Wendy's International Inc. (NYSE: WEN) -- http://www.wendysintl.com/-- is one of the world's largest and most successful restaurant operating and franchising companies, with more than 6,300 Wendy's Old Fashioned Hamburgers restaurants in North America and more than 300 international Wendy's restaurants. At Dec. 30, 2007, the company's balance sheet showed total assets of $1.79 billion, total liabilities of $0.99 billion, and total shareholders' equity of $0.80 billion. WENDY'S INT'L: Triarc Deal Prompts Moody's 'Ba3' Rating Reviews --------------------------------------------------------------- Moody's Investors Service stated that it continues the review for possible downgrade the ratings of Wendy's International Inc.'s following the announcement that Triarc Companies, Inc., the franchisor of the Arby's restaurant system, and Wendy's have signed a definitive merger agreement for an all-stock transaction. Wendy's ratings remain of review for possible downgrade because if the merger occurs, the combined entity will continue to face earnings pressure from the weak operating environment, and business risks associated with implementation of new management's plan to improve operating performance. As well, the combined entity will have weaker credit metrics than Wendy's on a standalone basis. The review will focus on management's plan to achieve operational improvements as well as the combined entity's future capital structure, liquidity, and financial policy. Wendy's International, Inc. Ratings on review for further possible downgrade are; -- Corporate family rating at Ba3 -- Probability of default rating at Ba3 -- Senior unsecured notes rating at Ba3 -- Senior unsecured shelf rating at (P)Ba3 -- Subordinated shelf at (P)B2 -- Preferred stock shelf at (P)B2 Wendy's International, Inc., headquartered in Dublin Ohio, owns and franchises Wendy's Old Fashion Hamburger restaurants. Total revenues in 2006 were approximately $2.4 billion. WENDY'S INT'L: Triarc Deal Cues S&P's Negative Watch on BB- Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its ratings on Wendy's International Inc., including the 'BB-' corporate credit rating, would remain on CreditWatch, where they had been placed with negative implications on April 26, 2007. This CreditWatch update follows Wendy's announcement that it signed a definitive merger agreement with Triarc Companies Inc. in which Wendy's shareholder's will receive of fixed ratio of 4.25 shares of Triarc Class A Common Stock for each share of Wendy's common stock (total consideration is approximately 2.34 billion). The merger is subject to shareholder and regulatory approval. The transaction represents about eight times Wendy's 2007 EBIDTA. The merger of Wendy's with Triarc, whose only operating subsidiary is Arby's Restaurant Group Inc. (Arby's) (B+/Watch Dev/--), may result in Standard & Poor's lowering the rating on Wendy's debt; however, any downgrade will likely be limited to one notch. "Arby's has a weaker business profile and higher financial risk than Wendy's, and the new entity would be subject to significant integration risk," said Standard & Poor's credit analyst Diane Shand. Pro forma for the merger, lease-adjusted debt to EBITDA at the combined company will be high at about 3.9x, which does not account for any potential cost savings or operational improvements. Under the agreement, Arby's and Wendy's will operate as autonomous business brand units. Standard & Poor's believes the combined entity will achieve some cost savings. However, progress in improving the Wendy's operations could be slow and uneven given the intensely competitive nature of the quick service sector of the restaurant industry, the weak U.S. economy, and cost pressures facing the industry. Wendy's same-store sales trends have underperformed the industry for a number of years as a result of lack of new product offerings and poor advertising campaigns. "We believe that both concepts' margins will be under pressure for at least the next year due to high commodity costs and weak consumer demand," said Ms. Shand. Arby's same-store sales were below industry average last year, but the company improved operating performance through cost reductions and new unit growth. Standard & Poor's will resolve the CreditWatch upon completion of the merger and following a discussion with management on the operating strategies and financial policy of the new entity. WHATELY CDO: Moody's Cuts Note Ratings on Poor Credit Quality ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Whately CDO I, Ltd.: Class Description: $6,000,000 Class A-1BF Fixed Rate Notes Due June 2044 -- Prior Rating: Aaa -- Current Rating: A3, on review for possible downgrade Class Description: $63,000,000 Class A-1BV Floating Rate Notes Due June 2044 (the "Class A-1BV Notes") -- Prior Rating: Aaa -- Current Rating: A3, on review for possible downgrade Class Description: $27,000,000 Class A-2 Floating Rate Notes Due June 2044 -- Prior Rating: Aa2 -- Current Rating: Ba2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $12,000,000 Class A-3 Floating Rate Deferrable Interest Notes Due June 2044 -- Prior Rating: A2 -- Current Rating: Ca Class Description: $10,000,000 Class BV Floating Rate Deferrable Interest Notes Due June 2044 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: C Class Description: $4,000,000 Class BF Fixed Rate Deferrable Interest Notes Due June 2044 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. * S&P Downgrades Ratings on 184 RMBS Classes From 27 Transactions ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 184 classes of residential mortgage-backed securities from 27 transactions backed by U.S. closed-end second-lien mortgage collateral. At the same time, S&P removed 166 ratings from CreditWatch negative, where they were placed on March 26, 2008. The distribution of the actions involving the 166 ratings removed from CreditWatch negative is: -- One rating was lowered to 'D' from 'BBB/Watch Neg'; -- 75 ratings from 21 transactions were lowered to 'CC'; -- 53 ratings from 19 transactions were lowered to 'CCC'; -- 29 ratings from 12 transactions were lowered to 'B'; -- Seven ratings from four transactions were lowered to 'BB'; and -- One rating from one transaction was lowered to 'BBB' from 'A+/Watch Neg; The distribution of the rating actions involving the 18 ratings only being lowered is: -- One rating was lowered to 'D' from 'BBB'; -- 15 ratings from three transactions were lowered to 'CC'; and -- Two ratings from one transaction were lowered to 'CCC'; Additionally, S&P's ratings on 24 classes from 10 deals remain on CreditWatch negative. S&P also downgraded five classes from four deals due to the downgrade of the respective bond insurers. Of these actions, S&P downgraded four to 'A-/Watch Neg' based on the rating of XL Capital Assurance Inc. and downgraded one 'A+' based on the rating on CIFG Assurance North America. Finally, S&P affirmed its ratings on two classes from two deals, one of which S&P removed from CreditWatch negative. Downgrades TO 'D' S&P downgraded class II-B-1 from Bear Stearns Second Lien Trust 2007-1 and class III-M-2 from American Home Mortgage Assets Trust 2007-3 to 'D' from 'BBB'. The rating on class II-B-1 from the Bear Stearns deal was previously on CreditWatch negative. Additionally, S&P has lowered its ratings on the mezzanine classes from these two transactions that are above these defaulted classes to speculative-grade. As of the March 2008 distribution period, cumulative realized losses for the deals with ratings lowered to 'D' were 9.80% (Bear Stearns Second Lien Trust 2007-1, loan group II) and 12.76% (American Home Mortgage Assets Trust 2007-3, loan group III) of the original principal balances, and total delinquencies (30-plus days, foreclosures, and real estates owned {REOs}) were 19.53% (Bear Stearns Second Lien Trust 2007-1, loan group II) and 17.38% (American Home Mortgage Assets Trust 2007-3, loan group III) of the current principal balances. Seasoning for these transactions were 11 months (Bear Stearns Second Lien Trust 2007-1, loan group II) and nine months (American Home Mortgage Assets Trust 2007-3, loan group III). These transactions have outstanding pool factors of approximately 81.24% (Bear Stearns Second Lien Trust 2007-1, loan group II) and 79.19% (American Home Mortgage Assets Trust 2007-3, loan group III). Subordination, overcollateralization, and excess interest cash flow provide credit support for these transactions. The collateral originally consisted of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Standard & Poor's Surveillance Assumptions S&P has incorporated into its stress test the current charge-off rate and delinquency levels S&P have observed in recent performance data. In Standard & Poor's opinion, monthly performance data reveals that the closed-end second-lien RMBS deals from the 2007 vintage are performing poorly and are experiencing increased loss rates, which are eroding credit support. This view is supported by S&P's review of the most recent performance data, which, S&P believes, reflects increased delinquencies, and the resulting level of monthly charge-offs among the closed-end second-lien mortgage loans supporting these transactions. As of the March 2008 distribution, total delinquencies for the transactions issued in 2007 with ratings lowered were 11.88%. The total delinquency percentages have increased from the December 2007 distribution to the March 2008 distribution by 25.55% for the 2007 issuance. It is worth noting that the foreclosure and REO portions of the total delinquencies was evidenced in only a few deals and represent a small percentage of the total delinquencies given that closed-end second-lien transactions usually have charge-offs after 180 days. Furthermore, cumulative charge-offs for the transactions issued in 2007 have increased to 6.26% as of March 2008 from 2.45% in December 2007, representing an increase of 155%. In light of what Standard & Poor's views as worsening collateral performance, S&P has applied a stressful cumulative loss curve from the high combined loan-to-value transactions issued in 1996 to project losses for the closed-end second-lien transactions covered in this review. Applying this derived curve for 2007 closed-end second-lien RMBS deals yields an average projected lifetime loss of about 57.10% of the original pool balance of the collateral underlying the 2007 transactions. Individual transactions have projected losses ranging from 11.56% to 88.36%. Impact on Current Ratings This closed-end second-lien RMBS rating actions affect a total of 27 U.S. closed-end second-lien RMBS transactions issued in 2007. The 184 downgraded classes had an original total principal balance of approximately $13.09 billion, which represents 72.97% of the approximately $17.94 billion in U.S. RMBS backed by closed-end second-lien mortgage loans rated by Standard & Poor's during 2007. The 184 classes do not include the five classes that were downgraded due to the downgrade of a related bond insurer. During the 2007 period, the total balance of U.S. RMBS securities backed by all types of residential mortgage loans issued in the non-agency market was more than $640.21 billion. This downgraded closed-end second-lien classes represent approximately 2.04% of this total. Standard & Poor's is taking these actions because it believes that losses on U.S. RMBS backed by closed-end second-lien collateral issued in the time period referenced above will significantly exceed historical precedent and because recent performance data indicates that performance is likely to be worse than previously anticipated. S&P believes that this poor performance results from a combination of factors including, but not limited to, an environment of looser underwriting standards; pressure on home prices; speculative borrowing behavior; risk layering (the combination of several risk elements for one single borrower); high CLTVs; financial pressure on borrowers resulting from payment increases on first-lien mortgages; and questionable data quality. Furthermore, in the past, when borrowers had difficulty managing their mortgage payments, they were more readily able to refinance. As a result of tighter underwriting standards and home price erosion in various regions of the country, S&P believes it is now more difficult to refinance, which will result in further delinquencies and defaults. Based upon S&P's review, of the $13.09 billion in downgraded closed-end second-lien classes, 20.32% were rated 'BBB' or lower before This rating actions. The resulting ratings associated with the downgraded classes, as a percentage of the total $13.09 billion in downgraded securities, are: Rating No. of Orig. cert Percentage of total category classes bal. actions by bal. -------- ------- ---------- ------------------- BBB 1 $207,051,000 3.72% BB 7 $848,213,000 15.24% B 29 $1,230,153,000 22.11% CCC 55 $2,318,801,100 41.68% CC 90 $944,839,000 16.98% D 2 $14,925,000 0.27% The classes with ratings that remain on CreditWatch negative require additional monitoring and analysis. S&P will update the market with its disposition on these classes as soon as S&P completes its analysis. Bond-insured Classes S&P lowered its ratings on the five bond-insured classes so they are in line with the current rating on the respective insurer. Impact ON ABCP, SIVs, AND CDOs Standard & Poor's has performed a global review of its rated asset-backed commercial paper conduits with exposure to the affected classes backed by U.S. closed-end second-lien collateral. Based on the review, S&P believes that these rating actions do not adversely affect the ratings on these ABCP conduits. Standard & Poor's has also reviewed all rated structured investment vehicle and SIV-lite structures with regard to exposure to these U.S. closed-end second-lien classes. In S&P's view, the review shows that the ratings on SIV-lites are not adversely affected by these rating actions. S&P have identified a limited amount of exposure to SIV structures; however, the exposure is largely in vehicles that currently have 'D' ratings. Therefore, the ratings impact is limited. Standard & Poor's has also completed a global review of the collateralized debt obligation transactions it rates with regard to exposure to these downgraded U.S. closed-end second-lien classes. S&P's review shows that these rating actions will have a limited impact on a number of CDO transactions. As a result, S&P will be conducting a review of these CDO transactions and will inform the market of any rating changes. Standard & Poor's will continue to monitor the performance of the U.S. closed-end second-lien RMBS transactions. S&P regularly review S&P's assumptions as new information becomes available, and S&P will continue to revise S&P's assumptions, publish updates, and keep market participants informed of changes. * Moody's Says Homebuilding Industry Faces Continued Challenge -------------------------------------------------------------- The already weakened homebuilding industry, wracked by a wave of credit rating downgrades in 2007, is contending with a generally tougher stance from lenders as 2008 unfolds, according to a new report from Moody's Investors Service. The ratings agency's Special Comment also states that the pace of downgrades may exceed expectations if the economy slips into recession, albeit at a slower pace than that in 2007. In addition, lower-rated companies are likely be particularly vulnerable to their lenders' tougher stance as the year unfolds, says Moody's. Some of these companies face heightened risk of default amid mounting liquidity pressures and further covenant violations. "It is likely that banks will finally begin to hold homebuilders accountable for their failure to generate cash, maintain adequate liquidity, and reduce outstanding debt to levels more appropriate for their current revenue run rates in 2008," says Moody's VP and Senior Credit Officer Joseph Snider. Compounding homebuilders' woes, banks have become much less likely to automatically waive compliance with covenants or amend covenants on the verge of being breached, says Snider. "A smattering of issuers have recently had first-hand experience of their banks' newly strict attitude." According to Moody's, potential difficulties homebuilders and other corporate borrowers are expected to face in 2008 include: large increases in borrowing spreads, tightened security documentation and borrowing-base requirements, and reduced revolver borrowing availability and shortened maturity dates. "As banks harden the line in 2008, we expect a number of homebuilders to face growing resistance when requesting covenant waivers or amendments," says Snider, "which could lead to forced acceleration of debt repayments and consequent bankruptcy filings." * Credit Roundtable Strategizes to Lessen Event Risk, Moody's Says ------------------------------------------------------------------ The Credit Roundtable's initiative on model covenants marks an important development in the investment-grade bond universe, says Moody's Investors Service. The Roundtable - which represents over fifty fixed-income investors - seeks to strengthen substantive legal protections against unexpected events, frequently initiated by issuers themselves, which can lead to sudden credit deterioration in investment portfolios, says Moody's. In particular, the Roundtable stresses the importance of the contract-formation process by standardizing covenants, simplifying their often convoluted structure and by seeking to alter the dynamics of the investment-grade road show. "The Roundtable also recognizes that typical investment-grade indentures often provide superficial protection, which is evident only upon reading the fine print, after the 'event' has taken place," says Moody's VP and Senior Credit Officer Alexander Dill. In addition, the model covenants also serve an important educative goal of focusing the fixed-income markets' attention on the role of covenants as a contract right in protecting against event risk, says Dill. "The Roundtable has adopted the appropriate approach to mitigating event risk by emphasizing bondholders' contractual rights and remedies by making them more transparent and easier to grasp." Moody's notes that its research dovetails with market demand for transparency through its own Covenant Quality Assessment service, launched in late 2006, which highlights gaps in bondholder protection on individual bonds against a set of predefined objective criteria. Importantly, the Roundtable's proposed model covenants improve upon existing versions by closing gaps in protection and expanding restrictive coverage while retaining a flexible framework that allows issuers sufficient room to continue operating their business, says Moody's. "The Roundtable wants a more meaningful dialogue with the issuer community, as well as a meeting of minds to establish terms of the bond contract," says Dill. "A simplified, uniform covenant structure would make it easier for investors to quickly grasp the strengths and weaknesses of a given covenant package and compare it against its market peers." While it is too early to tell the extent to which the model covenants become the market standard, the Roundtable initiative has already had an impact, with several deals in 2008 adopting its "change of control" version, says Moody's. * Three Lawyers Join Proskauer Rose's New York Office ----------------------------------------------------- Proskauer Rose LLP said that Jeffrey D. Neuburger, Robert E. Freeman and Kristen J. Mathews will join the firm as partners in New York. Mr. Neuburger, Mr. Freeman and Ms. Mathews join Proskauer from Thelen Reid Brown Raysman & Steiner LLP, where Mr. Neuburger was chair of the Technology, Media and Communications Department, Mr. Freeman was head of the Sports Practice, and Ms. Mathews was head of the Privacy and Data Security Practice Group. They will also be accompanied by two associates. All will be part of Proskauers Technology Practice Group and its newly-formed Technology, Media & Communications Practice Group, which will be headed by Mr. Neuburger. "[The] practices of [Messrs. Neuburger and Freeman and Ms. Mathews] will be a powerful strategic addition to our already formidable IP, media and technology transactional capabilities," said Allen I. Fagin, chairman of Proskauer. "It's fair to say that this expansion, which builds on our already substantial capabilities in sports, media and entertainment, privacy and data protection, and digital rights, assures that we are a true destination practice when it comes to our clients' technology needs." "Proskauer offers our clients depth and excellence in our core practices and so many related areas," said Mr. Neuburger. "We are very excited about joining the team." Mr. Neuburger advises clients with respect to complex technology and intellectual property issues, acquisitions, licensing arrangements and joint ventures, particularly in connection with digital distribution of content, e-commerce issues, cable and broadcast television and other media distribution platforms. He also has extensive experience in privacy, data security, electronic signatures, and other related matters. Prior to practicing law, he was an executive in the information technology operations of GE Capital. He received his J.D. from Pace University School of Law and his B.S. from the State University of New York at Albany. Mr. Freeman's practice emphasizes IP-related transactional matters. He regularly handles complex transactions relating to sports, cable, television, sponsorships and endorsements, software development, entertainment, and emerging technologies as well as general business and IP matters. He also works on matters relating to the traditional and online production and distribution of content, streaming media, digital rights management, and the supply, licensing, outsourcing, marketing and distribution of computer and telecommunications products and services. He received his J.D. from Georgetown University Law Center and his A.B. from Princeton University. Ms. Mathews specializes in technology, e-commerce and media- related transactions and advice, with concentrations in the areas of data privacy, data security, direct marketing and online advertising. She regularly advises clients on a wide range of technology related matters including: responding to data security breach incidents, preparing privacy and data security policies, open source software issues, payment card data security, and telematics. She is certified as an information privacy professional (CIPP) by the International Association of Privacy Professionals. She received her J.D. from Boston College Law School and her B.A. from Washington University. Mr. Neuburger, Mr. Freeman and Ms. Mathews will be the latest additions to Proskauer's transactional practice. The firm has also opened offices in Chicago, London and Sao Paulo over the past nine months. About Proskauer Rose Proskauer Rose LLP, -- http://www.proskauer.com/-- founded in 1875, is an international law firm providing a wide variety of legal services to clients worldwide from offices in Boca Raton, Boston, Chicago, London, Los Angeles, New Orleans, New York, Newark, Paris, Sao Paulo, and Washington, D.C. The firm has wide experience in all areas of practice important to businesses and individuals including corporate finance, mergers and acquisitions, general commercial litigation, corporate governance matters, conducting internal corporate investigations, white collar criminal defense, private equity and fund formation, patent and intellectual property litigation and prosecution, labor and employment law, real estate transactions, bankruptcy and reorganizations, trusts and estates, and taxation. Its clients span industries including chemicals, entertainment, financial services, health care, information technology, insurance, internet, lodging and gaming, manufacturing, media and communications, pharmaceuticals, real estate investment, sports, and transportation. * Husch & Eppenberger and Blackwell Officially Reveal Merger ------------------------------------------------------------ Husch & Eppenberger LLC and Blackwell Sanders LLP have merged to become Husch Blackwell Sanders LLP, Bankruptcy Law 360 reports, citing a recent official announcement by the merged firm. The partners approved the merger last December 2007, and the merger became effective on Feb. 29, 2008. "Regional, national and global companies have relied on our firm because we offer a breadth of experience and, in certain cases, dominant practices, normally found only in mega-market firms located in New York, Chicago, Atlanta, Houston and San Francisco," said Joseph P. Conran, co-chairman of the new firm. "Our national-level competitive practices, along with our Midwestern rates, provide compelling value to our clients." "Through the merger of our legacy firms, we have grown to more than 630 lawyers. With new Chicago and Denver office openings scheduled in March, we will serve 12 markets stretching from Washington, D.C. to Denver, with international reach through our London office," said David A. Fenley, co-chairman. Husch Blackwell Sanders will have anticipated revenues topping $275 million for 2008. At this size, the new firm will rank among the top 100 firms in the country based on revenue. Fenley and Conran lead the new firm as co-chairmen. The new firm has a 6-member executive board including the co-chairmen along with Tom Carney, Greg Smith, Bob Tomaso and Maurice Watson. Husch Blackwell Sanders LLP -- http://www.huschblackwell.com/-- is a full service law firm with approximately 630 attorneys in thirteen markets stretching from Washington, D.C. to Denver, with international reach through our London office. The firm is a combination of two of the region's nationally recognized law firms, Husch & Eppenberger, LLC and Blackwell Sanders LLP. * BOND PRICING: For the Week of Apr. 21 - Apr. 25, 2008 ------------------------------------------------------- Issuer Ticker Coupon Maturity Price ------ ------ ------ -------- ----- BOWATER INC ABH 6.500 6/15/13 62.32 ABITIBI-CONS FIN ABH 7.875 8/ 1/09 65.00 BOWATER INC ABH 9.375 12/15/21 61.48 BOWATER INC ABH 9.500 10/15/12 64.75 AMBAC INC ABK 5.950 12/ 5/35 70.25 AMBAC INC ABK 6.150 2/15/37 44.17 AMERICREDIT CORP ACF 0.750 9/15/11 64.00 AMERICREDIT CORP ACF 2.125 9/15/13 55.50 ALESCO FINANCIAL AFN 7.625 5/15/27 45.00 ATHEROGENICS INC AGIX 1.500 2/ 1/12 14.66 ATHEROGENICS INC AGIX 4.500 9/ 1/08 51.50 ATHEROGENICS INC AGIX 4.500 3/ 1/11 18.00 ASSURED GUARANTY AGO 6.400 12/15/66 70.00 ALION SCIENCE ALISCI 10.250 2/ 1/15 58.25 LUCENT TECH ALUFP 2.750 6/15/25 74.78 LUCENT TECH ALUFP 6.500 1/15/28 71.30 AMD AMD 5.750 8/15/12 72.18 AMD AMD 6.000 5/ 1/15 62.36 AMER COLOR GRAPH AMERCO 10.000 6/15/10 29.00 HILLS STORES CO AMESQ 12.500 7/ 1/03 0.38 AMES TRUE TEMPER AMETRU 10.000 7/15/12 49.06 ACME METALS INC AMIIQ 12.500 8/ 1/02 0.01 AMER MEDIA OPER AMRMED 8.875 1/15/11 66.49 AMER MEDIA OPER AMRMED 10.250 5/ 1/09 65.52 EMPIRE GAS CORP APU 9.000 12/31/07 0.01 ARVINMERITOR INC ARM 4.000 2/15/27 74.41 ARRIS GROUP INC ARRS 2.000 11/15/26 70.11 ALERIS INTL INC ARS 10.000 12/15/16 67.58 ASHTON WOODS USA ASHWOO 9.500 10/ 1/15 54.00 ASPECT MEDICAL ASPM 2.500 6/15/14 51.78 ALLTEL CORP AT 6.500 11/ 1/13 71.79 ALLTEL CORP AT 6.800 5/ 1/29 61.23 ALLTEL CORP AT 7.000 3/15/16 69.70 ALLTEL CORP AT 7.875 7/ 1/32 64.95 AVENTINE RENEW AVR 10.000 4/ 1/17 63.58 BANK NEW ENGLAND BANKNE 8.750 4/ 1/99 7.38 BANK NEW ENGLAND BANKNE 9.500 2/15/96 13.00 BANK NEW ENGLAND BANKNE 9.875 9/15/99 7.00 BALLY TOTAL FITN BFTH 13.000 7/15/11 73.00 BANKUNITED CAP BKUNA 3.125 3/ 1/34 50.28 NORTHERN PAC RY BNI 3.000 1/ 1/47 50.00 NORTHERN PAC RY BNI 3.000 1/ 1/47 50.00 BURLINGTON NORTH BNI 3.200 1/ 1/45 52.96 BUFFETS INC BOCB 12.500 11/ 1/14 2.25 BON-TON STORES BONT 10.250 3/15/14 65.11 BORLAND SOFTWARE BORL 2.750 2/15/12 65.45 BRODER BROS CO BRODER 11.250 10/15/10 68.00 BEAR STEARNS CO BSC 4.850 7/15/18 68.60 BEAR STEARNS CO BSC 5.000 7/15/18 69.62 BEAR STEARNS CO BSC 5.000 4/15/19 67.24 BEAR STEARNS CO BSC 5.050 11/15/19 66.30 BEAR STEARNS CO BSC 5.100 7/15/18 70.30 BEAR STEARNS CO BSC 5.100 6/16/23 60.77 BEAR STEARNS CO BSC 5.150 7/15/23 61.15 BEAR STEARNS CO BSC 5.250 7/15/23 61.96 BEAR STEARNS CO BSC 5.250 3/15/24 60.91 BEAR STEARNS CO BSC 5.260 3/15/24 60.99 BEAR STEARNS CO BSC 5.300 4/15/29 60.89 BEAR STEARNS CO BSC 5.320 7/15/18 71.81 BEAR STEARNS CO BSC 5.350 2/15/30 62.30 BEAR STEARNS CO BSC 5.350 11/15/29 61.35 BEAR STEARNS CO BSC 5.375 2/15/30 61.58 BEAR STEARNS CO BSC 5.400 3/15/24 62.12 BEAR STEARNS CO BSC 5.425 2/15/30 62.03 BEAR STEARNS CO BSC 5.430 10/15/29 61.75 BEAR STEARNS CO BSC 5.450 4/15/19 70.36 BEAR STEARNS CO BSC 5.450 4/15/29 62.23 BEAR STEARNS CO BSC 5.450 2/15/30 62.26 BEAR STEARNS CO BSC 5.470 4/15/19 70.50 BEAR STEARNS CO BSC 5.470 4/15/30 62.45 BEAR STEARNS CO BSC 5.480 9/15/29 62.51 BEAR STEARNS CO BSC 5.500 3/28/23 64.08 BEAR STEARNS CO BSC 5.500 11/15/29 62.34 BEAR STEARNS CO BSC 5.500 12/15/29 62.69 BEAR STEARNS CO BSC 5.500 1/15/30 62.70 BEAR STEARNS CO BSC 5.500 3/15/30 62.72 BEAR STEARNS CO BSC 5.520 10/15/29 62.52 BEAR STEARNS CO BSC 5.525 4/15/19 70.88 BEAR STEARNS CO BSC 5.550 2/15/24 63.35 BEAR STEARNS CO BSC 5.550 3/15/24 63.34 BEAR STEARNS CO BSC 5.550 10/15/29 63.14 BEAR STEARNS CO BSC 5.550 12/15/29 62.76 BEAR STEARNS CO BSC 5.570 7/15/23 64.57 BEAR STEARNS CO BSC 5.570 10/15/29 63.32 BEAR STEARNS CO BSC 5.580 3/15/30 63.44 BEAR STEARNS CO BSC 5.600 2/15/21 68.61 BEAR STEARNS CO BSC 5.600 11/15/23 63.79 BEAR STEARNS CO BSC 5.600 9/15/29 63.58 BEAR STEARNS CO BSC 5.600 11/15/29 63.59 BEAR STEARNS CO BSC 5.600 11/15/29 63.59 BEAR STEARNS CO BSC 5.600 12/15/29 63.59 BEAR STEARNS CO BSC 5.600 1/15/30 63.60 BEAR STEARNS CO BSC 5.600 1/15/30 63.60 BEAR STEARNS CO BSC 5.600 4/15/30 63.62 BEAR STEARNS CO BSC 5.620 2/15/24 63.92 BEAR STEARNS CO BSC 5.620 2/15/24 63.90 BEAR STEARNS CO BSC 5.625 3/15/30 63.40 BEAR STEARNS CO BSC 5.650 11/15/23 64.19 BEAR STEARNS CO BSC 5.650 11/15/23 64.19 BEAR STEARNS CO BSC 5.650 4/15/30 64.07 BEAR STEARNS CO BSC 5.700 10/15/23 64.62 BEAR STEARNS CO BSC 5.700 9/15/29 64.48 BEAR STEARNS CO BSC 5.700 3/15/30 64.52 BEAR STEARNS CO BSC 5.710 5/15/19 71.99 BEAR STEARNS CO BSC 5.725 3/15/30 64.74 BEAR STEARNS CO BSC 5.730 12/15/29 64.76 BEAR STEARNS CO BSC 5.750 8/15/18 73.80 BEAR STEARNS CO BSC 5.750 10/15/23 65.02 BEAR STEARNS CO BSC 5.750 2/15/24 64.95 BEAR STEARNS CO BSC 5.750 4/15/29 64.90 BEAR STEARNS CO BSC 5.770 10/15/23 65.18 BEAR STEARNS CO BSC 5.770 4/15/29 65.08 BEAR STEARNS CO BSC 5.780 4/15/30 65.25 BEAR STEARNS CO BSC 5.800 8/15/18 74.13 BEAR STEARNS CO BSC 5.800 9/15/23 65.44 BEAR STEARNS CO BSC 5.800 4/15/29 65.34 BEAR STEARNS CO BSC 5.800 9/15/29 65.38 BEAR STEARNS CO BSC 5.830 8/15/18 74.34 BEAR STEARNS CO BSC 5.850 9/15/23 65.84 BEAR STEARNS CO BSC 5.850 8/15/29 65.81 BEAR STEARNS CO BSC 5.850 8/15/29 65.81 BEAR STEARNS CO BSC 5.850 8/27/30 65.92 BEAR STEARNS CO BSC 5.900 8/15/18 74.81 BEAR STEARNS CO BSC 5.900 7/15/29 66.25 BEAR STEARNS CO BSC 6.000 6/15/19 73.85 BEAR STEARNS CO BSC 6.000 11/29/22 68.66 BEAR STEARNS CO BSC 6.000 1/17/23 68.42 BEAR STEARNS CO BSC 6.000 1/23/23 68.40 BEAR STEARNS CO BSC 6.000 8/15/23 67.06 BEAR STEARNS CO BSC 6.000 9/15/23 67.04 BEAR STEARNS CO BSC 6.000 3/31/26 66.74 BEAR STEARNS CO BSC 6.000 5/15/29 67.13 BEAR STEARNS CO BSC 6.000 7/15/29 67.14 BEAR STEARNS CO BSC 6.000 8/15/29 67.15 BEAR STEARNS CO BSC 6.000 8/15/29 67.15 BEAR STEARNS CO BSC 6.000 2/24/31 67.60 BEAR STEARNS CO BSC 6.000 5/15/37 66.39 BEAR STEARNS CO BSC 6.050 8/15/23 67.46 BEAR STEARNS CO BSC 6.050 9/15/23 67.44 BEAR STEARNS CO BSC 6.050 5/15/29 67.02 BEAR STEARNS CO BSC 6.080 8/15/23 67.70 BEAR STEARNS CO BSC 6.100 9/27/22 69.73 BEAR STEARNS CO BSC 6.100 11/29/22 69.46 BEAR STEARNS CO BSC 6.100 8/15/23 67.86 BEAR STEARNS CO BSC 6.125 7/15/29 68.26 BEAR STEARNS CO BSC 6.150 7/15/29 68.48 BEAR STEARNS CO BSC 6.200 6/15/29 68.92 BEAR STEARNS CO BSC 6.200 6/15/29 68.92 BEAR STEARNS CO BSC 6.240 5/15/29 69.27 BEAR STEARNS CO BSC 6.260 6/15/29 69.45 BEAR STEARNS CO BSC 6.300 6/15/29 69.09 BEAR STEARNS CO BSC 6.340 5/15/29 70.16 BEAR STEARNS CO BSC 6.500 11/27/26 72.33 BEAZER HOMES USA BZH 4.625 6/15/24 70.33 BEAZER HOMES USA BZH 6.500 11/15/13 69.25 BEAZER HOMES USA BZH 6.875 7/15/15 70.23 BEAZER HOMES USA BZH 8.125 6/15/16 72.05 BEAZER HOMES USA BZH 8.375 4/15/12 73.69 BEAZER HOMES USA BZH 8.625 5/15/11 74.29 CAPMARK FINL GRP CAPMRK 5.875 5/10/12 65.48 CAPMARK FINL GRP CAPMRK 6.300 5/10/17 61.08 CROWN CORK &SEAL CCK 7.500 12/15/96 67.24 COMPUCREDIT CCRT 3.625 5/30/25 42.45 COMPUCREDIT CCRT 5.875 11/30/35 40.00 CLEAR CHANNEL CCU 4.900 5/15/15 60.18 CLEAR CHANNEL CCU 5.500 9/15/14 64.34 CLEAR CHANNEL CCU 5.500 12/15/16 58.57 CLEAR CHANNEL CCU 5.750 1/15/13 73.19 CLEAR CHANNEL CCU 6.875 6/15/18 65.00 CLEAR CHANNEL CCU 7.250 10/15/27 63.29 CELL GENESYS INC CEGE 3.125 11/ 1/11 66.23 WITCO CORP CEM 6.875 2/ 1/26 67.13 COUNTRYWIDE FINL CFC 5.250 5/11/20 67.48 COUNTRYWIDE FINL CFC 5.250 5/27/20 67.39 COUNTRYWIDE HOME CFC 5.500 5/16/18 73.38 COUNTRYWIDE FINL CFC 5.750 1/24/31 66.10 COUNTRYWIDE FINL CFC 5.800 1/27/31 66.57 COUNTRYWIDE FINL CFC 6.000 3/23/21 70.58 COUNTRYWIDE FINL CFC 6.000 4/ 6/21 70.51 COUNTRYWIDE FINL CFC 6.000 4/13/21 71.39 COUNTRYWIDE HOME CFC 6.000 5/16/23 67.10 COUNTRYWIDE FINL CFC 6.000 3/16/26 66.73 COUNTRYWIDE HOME CFC 6.000 7/23/29 67.22 COUNTRYWIDE FINL CFC 6.000 11/22/30 68.40 COUNTRYWIDE FINL CFC 6.000 11/14/35 67.11 COUNTRYWIDE FINL CFC 6.000 12/14/35 66.10 COUNTRYWIDE FINL CFC 6.000 2/ 8/36 66.07 COUNTRYWIDE FINL CFC 6.030 8/25/20 71.82 COUNTRYWIDE FINL CFC 6.125 4/26/21 71.92 COUNTRYWIDE HOME CFC 6.150 6/25/29 68.91 COUNTRYWIDE HOME CFC 6.200 7/16/29 69.34 COUNTRYWIDE FINL CFC 6.250 5/15/16 64.87 COUNTRYWIDE FINL CFC 6.300 4/28/36 70.79 CONGOLEUM CORP CGMC 8.625 8/ 1/08 73.88 CHS ELECTRONICS CHSWQ 9.875 4/15/05 0.52 CHARTER COMM LP CHTR 5.875 11/16/09 67.04 CHARTER COMM LP CHTR 6.500 10/ 1/27 48.50 CIH CHTR 9.920 4/ 1/14 47.55 CHARTER COMM HLD CHTR 10.000 5/15/11 61.12 CIH CHTR 10.000 5/15/14 48.46 CCH I LLC CHTR 11.000 10/ 1/15 68.14 CCH I LLC CHTR 11.000 10/ 1/15 68.60 CHARTER COMM HLD CHTR 11.125 1/15/11 67.00 CIH CHTR 11.125 1/15/14 48.85 CHARTER COMM HLD CHTR 11.750 5/15/11 59.00 CIT GROUP INC CIT 4.700 12/15/09 62.00 CIT GROUP INC CIT 4.750 12/15/10 67.70 CIT GROUP INC CIT 5.000 11/15/09 69.88 CIT GROUP INC CIT 5.000 2/13/14 63.00 CIT GROUP INC CIT 5.000 2/ 1/15 71.45 CIT GROUP INC CIT 5.125 9/30/14 65.90 CIT GROUP INC CIT 5.250 9/15/10 72.25 CIT GROUP INC CIT 5.250 11/15/11 61.88 CIT GROUP INC CIT 5.400 3/ 7/13 67.53 CIT GROUP INC CIT 5.400 1/30/16 64.58 CIT GROUP INC CIT 5.600 4/27/11 68.20 CIT GROUP INC CIT 5.650 2/13/17 71.64 CIT GROUP INC CIT 5.850 9/15/16 64.49 CIT GROUP INC CIT 6.100 3/15/67 32.00 CIT GROUP INC CIT 6.150 9/15/21 68.43 CIT GROUP INC CIT 6.250 9/15/09 62.00 CIT GROUP INC CIT 6.250 9/15/09 62.00 CIT GROUP INC CIT 6.250 9/15/21 74.66 CIT GROUP INC CIT 6.250 11/15/21 69.05 CIT GROUP INC CIT 6.750 3/15/11 71.59 CIT GROUP INC CIT 7.250 3/15/12 63.75 CIT GROUP INC CIT 7.625 11/30/12 71.14 CIT GROUP INC CIT 7.750 3/15/13 52.38 CIT GROUP INC CIT 7.900 3/15/13 52.75 COLLINS & AIKMAN CKCR 10.750 12/31/11 0.26 CLAIRE'S STORES CLAIRE 9.250 6/ 1/15 65.73 CLAIRE'S STORES CLAIRE 9.625 6/ 1/15 54.00 CLAIRE'S STORES CLAIRE 10.500 6/ 1/17 45.23 COMERICA CAP TR CMA 6.576 2/20/37 64.00 CMP SUSQUEHANNA CMLS 9.875 5/15/14 66.00 NEW PLAN EXCEL CNPAU 5.300 1/15/15 74.88 NEW PLAN REALTY CNPAU 6.900 2/15/28 56.50 NEW PLAN EXCEL CNPAU 7.500 7/30/29 55.00 NEW PLAN REALTY CNPAU 7.650 11/ 2/26 56.50 NEW PLAN REALTY CNPAU 7.680 11/ 2/26 61.71 NEW PLAN REALTY CNPAU 7.970 8/14/26 56.50 NEW ORL GRT N RR CNRCN 5.000 7/ 1/32 52.97 GULF MOBILE OHIO CNRCN 5.000 12/ 1/56 72.50 CONSTAR INTL CNST 11.000 12/ 1/12 60.25 CONEXANT SYSTEMS CNXT 4.000 3/ 1/26 68.25 CAPITAL 1 IV COF 6.745 2/17/37 69.38 COOPER-STANDARD COOPER 8.375 12/15/14 74.25 COMPLETE MGMT CPMIQ 8.000 8/15/03 0.00 CURAGEN CORP CRGN 4.000 2/15/11 71.00 CAPITALSOURCE CSE 4.000 7/15/34 72.65 CAPITALSOURCE CSE 7.250 7/15/37 66.50 CUSTOM FOOD PROD CUSTFD 8.000 2/ 1/07 0.05 CV THERAPEUTICS CVTX 2.750 5/16/12 74.00 CV THERAPEUTICS CVTX 3.250 8/16/13 73.07 CITIZENS UTIL CO CZN 6.800 8/15/26 72.94 CITIZENS UTIL CO CZN 7.000 11/ 1/25 71.13 CITIZENS UTIL CO CZN 7.050 10/ 1/46 67.94 CITIZENS UTIL CO CZN 7.450 7/ 1/35 68.43 DELTA AIR LINES DAL 8.000 12/ 1/15 65.00 DELTA AIR LINES DAL 10.500 4/30/16 70.00 DECODE GENETICS DCGN 3.500 4/15/11 41.25 DECODE GENETICS DCGN 3.500 4/15/11 52.75 DIME COMM CAP I DCOM 7.000 4/14/34 75.00 DELPHI CORP DPH 6.197 11/15/33 19.50 DELPHI CORP DPH 6.500 8/15/13 33.09 DELPHI CORP DPH 8.250 10/15/33 15.00 DURA OPERATING DRRA 8.625 4/15/12 13.77 DURA OPERATING DRRA 9.000 5/ 1/09 0.05 ENCORE CAPITAL ECPG 3.375 9/19/10 66.62 EOP OPERATING LP EOP 6.750 2/15/12 70.10 EPIX MEDICAL INC EPIX 3.000 6/15/24 67.50 WHEELING-PITT ST ESMK 5.000 8/ 1/11 59.00 E*TRADE FINL ETFC 7.375 9/15/13 68.29 E*TRADE FINL ETFC 7.875 12/ 1/15 68.06 ADVANCED MED OPT EYE 3.250 8/ 1/26 72.86 FORD MOTOR CRED F 5.000 2/22/11 72.65 FORD MOTOR CRED F 5.200 3/21/11 72.75 FORD MOTOR CRED F 5.250 9/20/11 70.00 FORD MOTOR CRED F 5.400 10/20/11 70.50 FORD MOTOR CRED F 5.400 10/20/11 71.18 FORD MOTOR CRED F 5.450 4/20/11 70.30 FORD MOTOR CRED F 5.500 10/20/11 73.39 FORD MOTOR CRED F 5.550 8/22/11 72.52 FORD MOTOR CRED F 5.550 9/20/11 73.22 FORD MOTOR CRED F 5.600 8/22/11 71.50 FORD MOTOR CRED F 5.600 9/20/11 72.25 FORD MOTOR CRED F 5.650 12/20/10 75.00 FORD MOTOR CRED F 5.650 7/20/11 72.25 FORD MOTOR CRED F 5.650 12/20/11 69.06 FORD MOTOR CRED F 5.650 1/21/14 69.12 FORD MOTOR CRED F 5.750 1/21/14 63.00 FORD MOTOR CRED F 5.750 2/20/14 64.25 FORD MOTOR CRED F 5.750 2/20/14 65.50 FORD MOTOR CRED F 5.900 2/20/14 72.54 FORD MOTOR CRED F 6.000 1/21/14 67.37 FORD MOTOR CRED F 6.000 3/20/14 72.84 FORD MOTOR CRED F 6.000 3/20/14 67.68 FORD MOTOR CRED F 6.000 3/20/14 66.01 FORD MOTOR CRED F 6.000 3/20/14 60.09 FORD MOTOR CRED F 6.000 11/20/14 63.92 FORD MOTOR CRED F 6.000 11/20/14 73.48 FORD MOTOR CRED F 6.000 11/20/14 63.80 FORD MOTOR CRED F 6.000 1/20/15 62.77 FORD MOTOR CRED F 6.000 2/20/15 61.00 FORD MOTOR CRED F 6.050 2/20/14 70.76 FORD MOTOR CRED F 6.050 3/20/14 63.00 FORD MOTOR CRED F 6.050 4/21/14 72.65 FORD MOTOR CRED F 6.050 12/22/14 59.94 FORD MOTOR CRED F 6.050 12/22/14 62.82 FORD MOTOR CRED F 6.050 12/22/14 69.36 FORD MOTOR CRED F 6.050 2/20/15 60.44 FORD MOTOR CRED F 6.100 2/20/15 65.35 FORD MOTOR CRED F 6.150 12/22/14 73.47 FORD MOTOR CRED F 6.150 1/20/15 61.23 FORD MOTOR CRED F 6.200 5/20/11 74.72 FORD MOTOR CRED F 6.200 4/21/14 66.48 FORD MOTOR CRED F 6.200 3/20/15 59.66 FORD MOTOR CRED F 6.250 6/20/11 73.58 FORD MOTOR CRED F 6.250 6/20/11 73.87 FORD MOTOR CRED F 6.250 3/20/12 74.42 FORD MOTOR CRED F 6.250 12/20/13 72.89 FORD MOTOR CRED F 6.250 4/21/14 66.91 FORD MOTOR CRED F 6.250 1/20/15 61.54 FORD MOTOR CRED F 6.250 3/20/15 58.50 FORD MOTOR CRED F 6.300 5/20/14 65.24 FORD MOTOR CRED F 6.350 4/21/14 65.87 FORD MOTOR CO F 6.375 2/ 1/29 59.11 FORD MOTOR CRED F 6.500 12/20/13 68.15 FORD MOTOR CRED F 6.500 2/20/15 66.22 FORD MOTOR CRED F 6.500 3/20/15 64.81 FORD MOTOR CO F 6.500 8/ 1/18 62.56 FORD MOTOR CRED F 6.520 3/10/13 69.51 FORD MOTOR CRED F 6.550 12/20/13 73.71 FORD MOTOR CRED F 6.550 7/21/14 63.42 FORD MOTOR CRED F 6.600 10/21/13 69.93 FORD MOTOR CO F 6.625 2/15/28 58.02 FORD MOTOR CO F 6.625 10/ 1/28 58.84 FORD MOTOR CRED F 6.650 10/21/13 64.00 FORD MOTOR CRED F 6.650 6/20/14 66.15 FORD MOTOR CRED F 6.750 10/21/13 63.50 FORD MOTOR CRED F 6.750 6/20/14 72.71 FORD MOTOR CRED F 6.800 6/20/14 64.24 FORD MOTOR CRED F 6.800 6/20/14 68.08 FORD MOTOR CRED F 6.850 9/20/13 70.72 FORD MOTOR CRED F 6.850 5/20/14 64.42 FORD MOTOR CRED F 6.850 6/20/14 64.63 FORD MOTOR CRED F 6.950 5/20/14 67.62 FORD MOTOR CRED F 7.000 8/15/12 71.31 FORD MOTOR CRED F 7.050 9/20/13 71.14 FORD MOTOR CRED F 7.100 9/20/13 71.77 FORD MOTOR CRED F 7.100 9/20/13 70.68 FORD MOTOR CO F 7.125 11/15/25 59.96 FORD MOTOR CRED F 7.250 7/20/17 59.35 FORD MOTOR CRED F 7.250 7/20/17 58.65 FORD MOTOR CRED F 7.300 4/20/15 65.92 FORD MOTOR CRED F 7.350 5/15/12 73.72 FORD MOTOR CRED F 7.350 3/20/15 68.15 FORD MOTOR CRED F 7.350 9/15/15 64.76 FORD MOTOR CRED F 7.400 8/21/17 61.41 FORD MOTOR CO F 7.400 11/ 1/46 60.20 FORD MOTOR CO F 7.450 7/16/31 64.28 FORD MOTOR CO F 7.500 8/ 1/26 61.68 FORD MOTOR CRED F 7.500 8/20/32 51.69 FORD MOTOR CRED F 7.550 9/30/15 65.49 FORD MOTOR CO F 7.700 5/15/97 60.10 FORD MOTOR CO F 7.750 6/15/43 61.49 FORD MOTOR CRED F 7.900 5/18/15 68.26 FORD MOTOR CO F 8.875 1/15/22 71.12 FORD MOTOR CO F 8.900 1/15/32 71.28 FORD MOTOR CO F 9.215 9/15/21 71.94 FORD HOLDINGS F 9.300 3/ 1/30 70.86 FORD HOLDINGS F 9.375 3/ 1/20 73.80 FORD MOTOR CO F 9.980 2/15/47 73.74 FONTAINEBLEAU LA FBLEAU 10.250 6/15/15 68.93 FIRST DATA CORP FDC 4.700 8/ 1/13 47.00 FIRST DATA CORP FDC 4.850 10/ 1/14 61.48 FIRST DATA CORP FDC 4.950 6/15/15 55.20 FIRST DATA CORP FDC 5.625 11/ 1/11 72.02 FIFTH THIRD CAP FITB 6.500 4/15/37 75.00 FEDDERS NORTH AM FJCC 9.875 3/ 1/14 8.00 FREMONT GEN CORP FMT 7.875 3/17/09 60.00 FINLAY FINE JWLY FNLY 8.375 6/ 1/12 33.51 FINOVA GROUP FNVG 7.500 11/15/09 13.26 FRONTIER AIRLINE FRNT 5.000 12/15/25 58.19 FREESCALE SEMICO FSL 10.125 12/15/16 68.47 FULTON CAP TRUST FULT 6.290 2/ 1/36 72.46 MEDIANEWS GROUP GARDEN 6.375 4/ 1/14 50.20 MEDIANEWS GROUP GARDEN 6.875 10/ 1/13 51.50 GOLDEN BOOKS PUB GBKF 10.750 12/31/04 0.01 GEORGIA GULF CRP GGC 7.125 12/15/13 71.80 GEORGIA GULF CRP GGC 9.500 10/15/14 74.85 GEORGIA GULF CRP GGC 10.750 10/15/16 64.80 GULF STATES STL GLFSTS 13.500 4/15/03 0.01 GENERAL MOTORS GM 6.750 5/ 1/28 56.08 GENERAL MOTORS GM 7.375 5/23/48 59.42 GENERAL MOTORS GM 7.400 9/ 1/25 62.83 GENERAL MOTORS GM 7.700 4/15/16 72.53 GENERAL MOTORS GM 8.100 6/15/24 65.72 GENERAL MOTORS GM 8.250 7/15/23 68.28 GENERAL MOTORS GM 8.375 7/15/33 69.68 GENERAL MOTORS GM 8.800 3/ 1/21 72.15 GENERAL MOTORS GM 9.400 7/15/21 74.77 GMAC GMAC 5.250 1/15/14 58.32 GMAC GMAC 5.350 1/15/14 66.00 GMAC GMAC 5.700 6/15/13 73.83 GMAC GMAC 5.700 10/15/13 58.55 GMAC GMAC 5.700 12/15/13 60.28 GMAC GMAC 5.750 1/15/14 63.21 GMAC GMAC 5.850 5/15/13 57.41 GMAC GMAC 5.850 6/15/13 66.19 GMAC GMAC 5.850 6/15/13 60.70 GMAC GMAC 5.900 12/15/13 73.00 GMAC GMAC 5.900 1/15/19 51.98 GMAC GMAC 5.900 1/15/19 49.30 GMAC GMAC 5.900 2/15/19 52.33 GMAC GMAC 5.900 10/15/19 47.52 GMAC LLC GMAC 6.000 4/ 1/11 72.57 GMAC LLC GMAC 6.000 12/15/11 71.64 GMAC GMAC 6.000 7/15/13 63.78 GMAC GMAC 6.000 11/15/13 58.83 GMAC GMAC 6.000 12/15/13 61.00 GMAC GMAC 6.000 2/15/19 46.83 GMAC GMAC 6.000 2/15/19 52.62 GMAC GMAC 6.000 2/15/19 55.56 GMAC GMAC 6.000 3/15/19 51.77 GMAC GMAC 6.000 3/15/19 53.66 GMAC GMAC 6.000 3/15/19 52.95 GMAC GMAC 6.000 3/15/19 54.07 GMAC GMAC 6.000 3/15/19 51.38 GMAC GMAC 6.000 4/15/19 55.56 GMAC GMAC 6.000 9/15/19 50.92 GMAC GMAC 6.000 9/15/19 51.56 GMAC GMAC 6.050 8/15/19 51.89 GMAC GMAC 6.050 8/15/19 51.81 GMAC GMAC 6.050 10/15/19 50.88 GMAC GMAC 6.100 11/15/13 66.81 GMAC GMAC 6.100 9/15/19 52.07 GMAC GMAC 6.125 10/15/19 50.69 GMAC GMAC 6.150 9/15/13 67.64 GMAC GMAC 6.150 11/15/13 66.99 GMAC GMAC 6.150 12/15/13 66.68 GMAC GMAC 6.150 8/15/19 52.50 GMAC GMAC 6.150 9/15/19 54.50 GMAC GMAC 6.150 10/15/19 51.13 GMAC GMAC 6.200 11/15/13 61.06 GMAC GMAC 6.200 4/15/19 52.04 GMAC GMAC 6.250 7/15/13 61.53 GMAC GMAC 6.250 10/15/13 60.73 GMAC GMAC 6.250 11/15/13 56.74 GMAC GMAC 6.250 12/15/18 58.40 GMAC GMAC 6.250 1/15/19 52.87 GMAC GMAC 6.250 4/15/19 53.46 GMAC GMAC 6.250 5/15/19 53.92 GMAC GMAC 6.250 7/15/19 51.43 GMAC GMAC 6.300 3/15/13 74.50 GMAC GMAC 6.300 10/15/13 67.18 GMAC GMAC 6.300 11/15/13 57.29 GMAC GMAC 6.300 8/15/19 51.99 GMAC GMAC 6.300 8/15/19 51.99 GMAC GMAC 6.350 5/15/13 62.04 GMAC GMAC 6.350 4/15/19 53.93 GMAC GMAC 6.350 7/15/19 52.06 GMAC GMAC 6.350 7/15/19 53.69 GMAC GMAC 6.375 8/ 1/13 69.64 GMAC GMAC 6.375 1/15/14 67.23 GMAC GMAC 6.400 3/15/13 63.33 GMAC GMAC 6.400 12/15/18 52.44 GMAC GMAC 6.400 11/15/19 50.00 GMAC GMAC 6.400 11/15/19 52.80 GMAC GMAC 6.450 2/15/13 72.00 GMAC LLC GMAC 6.500 5/15/12 74.77 GMAC LLC GMAC 6.500 6/15/12 74.99 GMAC LLC GMAC 6.500 6/15/12 74.99 GMAC GMAC 6.500 7/15/12 61.45 GMAC GMAC 6.500 2/15/13 70.11 GMAC GMAC 6.500 3/15/13 61.20 GMAC GMAC 6.500 4/15/13 68.00 GMAC GMAC 6.500 5/15/13 72.20 GMAC GMAC 6.500 6/15/13 69.85 GMAC GMAC 6.500 8/15/13 69.22 GMAC GMAC 6.500 11/15/13 60.40 GMAC GMAC 6.500 6/15/18 55.00 GMAC GMAC 6.500 11/15/18 49.80 GMAC GMAC 6.500 12/15/18 61.54 GMAC GMAC 6.500 12/15/18 54.54 GMAC GMAC 6.500 5/15/19 54.26 GMAC GMAC 6.500 1/15/20 59.37 GMAC GMAC 6.500 2/15/20 66.32 GMAC GMAC 6.550 12/15/19 56.00 GMAC GMAC 6.600 8/15/16 54.78 GMAC GMAC 6.600 5/15/18 54.21 GMAC GMAC 6.600 6/15/19 55.21 GMAC GMAC 6.600 6/15/19 54.70 GMAC GMAC 6.625 10/15/11 71.69 GMAC LLC GMAC 6.625 5/15/12 71.51 GMAC GMAC 6.650 6/15/18 54.32 GMAC GMAC 6.650 10/15/18 51.44 GMAC GMAC 6.650 10/15/18 52.25 GMAC GMAC 6.650 2/15/20 69.50 GMAC GMAC 6.700 5/15/14 62.39 GMAC GMAC 6.700 5/15/14 62.02 GMAC GMAC 6.700 6/15/14 67.37 GMAC GMAC 6.700 8/15/16 57.36 GMAC GMAC 6.700 6/15/18 51.00 GMAC GMAC 6.700 6/15/18 56.68 GMAC GMAC 6.700 11/15/18 54.66 GMAC GMAC 6.700 6/15/19 54.34 GMAC GMAC 6.700 12/15/19 54.45 GMAC GMAC 6.750 9/15/11 73.19 GMAC LLC GMAC 6.750 7/15/12 66.23 GMAC GMAC 6.750 9/15/12 66.07 GMAC GMAC 6.750 9/15/12 72.75 GMAC GMAC 6.750 10/15/12 65.82 GMAC GMAC 6.750 4/15/13 64.74 GMAC GMAC 6.750 4/15/13 63.49 GMAC GMAC 6.750 6/15/14 69.07 GMAC GMAC 6.750 12/ 1/14 68.81 GMAC GMAC 6.750 7/15/16 58.93 GMAC GMAC 6.750 8/15/16 58.66 GMAC GMAC 6.750 9/15/16 66.31 GMAC GMAC 6.750 6/15/17 57.45 GMAC GMAC 6.750 3/15/18 51.77 GMAC GMAC 6.750 7/15/18 55.38 GMAC GMAC 6.750 9/15/18 54.33 GMAC GMAC 6.750 10/15/18 55.91 GMAC GMAC 6.750 11/15/18 54.82 GMAC GMAC 6.750 5/15/19 54.48 GMAC GMAC 6.750 5/15/19 55.36 GMAC GMAC 6.750 6/15/19 54.49 GMAC GMAC 6.750 6/15/19 59.53 GMAC GMAC 6.750 3/15/20 63.90 GMAC GMAC 6.800 2/15/13 61.50 GMAC GMAC 6.800 4/15/13 63.70 GMAC GMAC 6.800 9/15/18 54.96 GMAC GMAC 6.800 10/15/18 49.77 GMAC GMAC 6.850 5/15/18 56.02 GMAC GMAC 6.875 8/28/12 72.11 GMAC GMAC 6.875 10/15/12 66.17 GMAC GMAC 6.875 4/15/13 73.80 GMAC GMAC 6.875 8/15/16 66.00 GMAC GMAC 6.875 7/15/18 56.63 GMAC GMAC 6.900 6/15/17 57.47 GMAC GMAC 6.900 7/15/18 57.00 GMAC GMAC 6.900 8/15/18 61.09 GMAC GMAC 6.950 6/15/17 58.88 GMAC GMAC 7.000 10/15/11 74.81 GMAC GMAC 7.000 9/15/12 66.94 GMAC GMAC 7.000 10/15/12 72.25 GMAC GMAC 7.000 11/15/12 64.44 GMAC GMAC 7.000 12/15/12 68.75 GMAC GMAC 7.000 1/15/13 65.10 GMAC GMAC 7.000 6/15/17 60.69 GMAC GMAC 7.000 7/15/17 57.63 GMAC GMAC 7.000 2/15/18 56.64 GMAC GMAC 7.000 2/15/18 56.89 GMAC GMAC 7.000 2/15/18 56.22 GMAC GMAC 7.000 3/15/18 55.58 GMAC GMAC 7.000 5/15/18 60.00 GMAC GMAC 7.000 9/15/18 58.77 GMAC GMAC 7.000 2/15/21 58.22 GMAC GMAC 7.000 9/15/21 56.62 GMAC GMAC 7.000 9/15/21 53.26 GMAC GMAC 7.000 6/15/22 55.24 GMAC GMAC 7.000 11/15/23 51.42 GMAC GMAC 7.000 11/15/24 52.50 GMAC GMAC 7.000 11/15/24 55.00 GMAC GMAC 7.000 11/15/24 55.17 GMAC GMAC 7.050 3/15/18 60.00 GMAC GMAC 7.050 3/15/18 56.58 GMAC GMAC 7.050 4/15/18 55.90 GMAC GMAC 7.100 9/15/12 73.84 GMAC GMAC 7.100 1/15/13 66.56 GMAC GMAC 7.100 1/15/13 67.20 GMAC GMAC 7.125 8/15/12 69.81 GMAC GMAC 7.125 12/15/12 70.64 GMAC GMAC 7.125 10/15/17 57.38 GMAC GMAC 7.150 11/15/12 68.43 GMAC GMAC 7.150 9/15/18 57.54 GMAC GMAC 7.150 1/15/25 52.50 GMAC GMAC 7.150 3/15/17 52.06 GMAC GMAC 7.200 10/15/25 59.47 GMAC GMAC 7.200 10/15/17 59.55 GMAC GMAC 7.250 8/15/12 69.44 GMAC GMAC 7.250 12/15/12 63.00 GMAC GMAC 7.250 9/15/17 59.89 GMAC GMAC 7.250 9/15/17 57.96 GMAC GMAC 7.250 9/15/17 64.00 GMAC GMAC 7.250 9/15/17 58.78 GMAC GMAC 7.250 1/15/18 53.39 GMAC GMAC 7.250 4/15/18 56.38 GMAC GMAC 7.250 4/15/18 55.95 GMAC GMAC 7.250 8/15/18 58.50 GMAC GMAC 7.250 8/15/18 58.66 GMAC GMAC 7.250 9/15/18 57.15 GMAC GMAC 7.250 1/15/25 56.33 GMAC GMAC 7.250 2/15/25 52.66 GMAC GMAC 7.250 3/15/25 54.14 GMAC GMAC 7.300 12/15/17 58.96 GMAC GMAC 7.300 1/15/18 59.84 GMAC GMAC 7.300 1/15/18 56.75 GMAC GMAC 7.350 4/15/18 55.61 GMAC GMAC 7.375 11/15/16 60.96 GMAC GMAC 7.375 4/15/18 58.13 GMAC GMAC 7.400 12/15/17 62.15 GMAC GMAC 7.500 10/15/12 66.12 GMAC GMAC 7.500 11/15/16 61.64 GMAC GMAC 7.500 8/15/17 53.00 GMAC GMAC 7.500 11/15/17 58.35 GMAC GMAC 7.500 11/15/17 54.90 GMAC GMAC 7.500 12/15/17 60.29 GMAC GMAC 7.500 3/15/25 55.69 GMAC GMAC 7.625 11/15/12 67.64 GMAC GMAC 7.750 10/15/17 55.61 GMAC GMAC 7.875 11/15/12 64.38 GMAC GMAC 8.000 10/15/17 66.33 GMAC GMAC 8.000 11/15/17 60.98 GMAC GMAC 8.000 3/15/25 57.08 GMAC GMAC 8.125 11/15/17 59.70 GMAC GMAC 8.400 8/15/15 66.40 GMAC GMAC 8.650 8/15/15 71.85 GMAC GMAC 9.000 7/15/15 67.44 GMAC GMAC 9.000 7/15/20 69.80 OUTBOARD MARINE GRNMRN 9.125 4/15/17 6.75 OUTBOARD MARINE GRNMRN 10.750 6/ 1/08 10.06 GS CAPITAL II GS 5.793 12/29/49 72.27 REALOGY CORP H 10.500 4/15/14 67.98 REALOGY CORP H 12.375 4/15/15 47.61 HUNTINGTON NATL HBAN 5.375 2/28/19 70.12 COLUMBIA/HCA HCA 7.050 12/ 1/27 70.81 COLUMBIA/HCA HCA 7.500 11/15/95 72.95 COLUMBIA/HCA HCA 7.750 7/15/36 74.39 HECHINGER CO HECINV 9.450 11/15/12 1.67 HERBST GAMING HERBST 7.000 11/15/14 15.00 HERBST GAMING HERBST 8.125 6/ 1/12 15.50 HARRAHS OPER CO HET 5.375 12/15/13 65.80 HARRAHS OPER CO HET 5.625 6/ 1/15 58.75 HARRAHS OPER CO HET 5.750 10/ 1/17 56.85 HARRAHS OPER CO HET 6.500 6/ 1/16 59.95 HUMAN GENOME HGSI 2.250 8/15/12 70.03 HINES NURSERIES HORT 10.250 10/ 1/11 55.06 K HOVNANIAN ENTR HOV 6.000 1/15/10 63.98 K HOVNANIAN ENTR HOV 6.250 1/15/15 66.58 K HOVNANIAN ENTR HOV 6.250 1/15/16 66.19 K HOVNANIAN ENTR HOV 6.375 12/15/14 66.70 K HOVNANIAN ENTR HOV 6.500 1/15/14 66.42 K HOVNANIAN ENTR HOV 7.500 5/15/16 67.16 K HOVNANIAN ENTR HOV 7.750 5/15/13 51.53 K HOVNANIAN ENTR HOV 8.000 4/ 1/12 72.01 K HOVNANIAN ENTR HOV 8.875 4/ 1/12 54.65 HERCULES INC HPC 6.500 6/30/29 66.38 HEADWATERS INC HW 2.500 2/ 1/14 73.50 BORDEN INC HXN 7.875 2/15/23 57.74 BORDEN INC HXN 8.375 4/15/16 65.05 BORDEN INC HXN 9.200 3/15/21 56.00 IDEARC INC IAR 8.000 11/15/16 63.26 IMPERIAL CREDIT ICII 9.875 1/15/07 0.01 ION MEDIA IION 11.000 7/31/13 33.62 IKON OFFICE IKN 6.750 12/ 1/25 68.58 ISOLAGEN INC ILE 3.500 11/ 1/24 11.00 IRIDIUM LLC/CAP IRILLC 10.875 7/15/05 0.50 IRIDIUM LLC/CAP IRILLC 11.250 7/15/05 1.81 IRIDIUM LLC/CAP IRILLC 13.000 7/15/05 1.31 IRIDIUM LLC/CAP IRILLC 14.000 7/15/05 1.50 ISLE OF CAPRI ISLE 7.000 3/ 1/14 69.74 IT GROUP INC ITXGE 11.250 4/ 1/09 0.27 JB POINDEXTER JBPOIN 8.750 3/15/14 64.48 JONES APPAREL JNY 6.125 11/15/34 72.53 JP MORGAN CHASE JPM 10.000 7/31/08 69.60 KEYSTONE AUTO OP KEAUOP 9.750 11/ 1/13 56.59 KELLSTROM INDS KELLQ 5.750 10/15/02 0.01 KEMET CORP KEM 2.250 11/15/26 71.98 KEYCORP CAP VII KEY 5.700 6/15/35 68.50 KIMBALL HILL INC KIMHIL 10.500 12/15/12 14.95 KULICKE & SOFFA KLIC 0.875 6/ 1/12 68.85 KAISER ALUMINUM KLUCQ 9.875 2/15/02 0.01 KAISER ALUMINUM KLUCQ 12.750 2/ 1/03 2.50 KMART 95-K3 PT KMRT 8.540 1/ 2/15 0.01 K MART FUNDING KMRT 8.800 7/ 1/10 10.00 KMART 95-K4 PT KMRT 9.350 1/ 2/20 0.01 KMART 95-K2 PT KMRT 9.780 1/ 5/20 0.01 LIBERTY MEDIA L 3.250 3/15/31 66.50 LIBERTY MEDIA L 3.500 1/15/31 62.00 LIBERTY MEDIA L 3.750 2/15/30 47.50 LIBERTY MEDIA L 4.000 11/15/29 57.23 LIFETIME BRANDS LCUT 4.750 7/15/11 71.75 LEHMAN BROS HLDG LEH 5.000 3/27/13 74.64 LEHMAN BROS HLDG LEH 5.000 6/10/23 68.50 LEHMAN BROS HLDG LEH 5.250 9/14/19 72.25 LEHMAN BROS HLDG LEH 5.350 3/13/20 70.00 LEHMAN BROS HLDG LEH 5.350 6/14/30 67.25 LEHMAN BROS HLDG LEH 5.375 5/ 6/23 70.10 LEHMAN BROS HLDG LEH 5.400 3/ 6/20 71.10 LEHMAN BROS HLDG LEH 5.400 3/20/20 74.09 LEHMAN BROS HLDG LEH 5.400 3/30/29 67.93 LEHMAN BROS HLDG LEH 5.450 7/19/30 69.49 LEHMAN BROS HLDG LEH 5.450 9/20/30 63.79 LEHMAN BROS HLDG LEH 5.500 2/27/20 75.00 LEHMAN BROS HLDG LEH 5.500 3/14/23 73.44 LEHMAN BROS HLDG LEH 5.500 4/ 8/23 72.00 LEHMAN BROS HLDG LEH 5.500 4/15/23 74.18 LEHMAN BROS HLDG LEH 5.500 4/23/23 71.25 LEHMAN BROS HLDG LEH 5.500 1/27/29 71.93 LEHMAN BROS HLDG LEH 5.500 8/ 2/30 67.50 LEHMAN BROS HLDG LEH 5.550 3/ 9/29 74.25 LEHMAN BROS HLDG LEH 5.600 2/17/29 65.63 LEHMAN BROS HLDG LEH 5.600 3/ 2/29 66.27 LEHMAN BROS HLDG LEH 5.600 5/ 3/30 68.12 LEHMAN BROS HLDG LEH 5.650 11/23/29 72.55 LEHMAN BROS HLDG LEH 5.650 12/31/34 62.44 LEHMAN BROS HLDG LEH 5.700 2/10/29 73.34 LEHMAN BROS HLDG LEH 5.700 4/13/29 73.69 LEHMAN BROS HLDG LEH 5.750 3/27/23 72.95 LEHMAN BROS HLDG LEH 5.750 10/15/23 73.26 LEHMAN BROS HLDG LEH 5.750 10/21/23 74.00 LEHMAN BROS HLDG LEH 5.750 12/16/28 69.88 LEHMAN BROS HLDG LEH 5.750 8/24/29 72.80 LEHMAN BROS HLDG LEH 5.750 9/14/29 70.75 LEHMAN BROS HLDG LEH 5.750 10/12/29 70.00 LEHMAN BROS HLDG LEH 5.750 3/29/30 73.21 LEHMAN BROS HLDG LEH 5.800 10/25/30 69.55 LEHMAN BROS HLDG LEH 5.850 11/ 8/30 61.50 LEHMAN BROS HLDG LEH 5.900 5/ 4/29 72.44 LEHMAN BROS HLDG LEH 6.000 11/18/28 70.32 LEHMAN BROS HLDG LEH 6.000 7/20/29 69.79 LEHMAN BROS HLDG LEH 6.000 4/30/34 67.88 LEHMAN BROS HLDG LEH 6.000 2/24/36 70.85 LEHMAN BROS HLDG LEH 9.500 5/ 1/08 66.90 LEINER HEALTH LEINER 11.000 6/ 1/12 0.12 LANDRY'S RESTAUR LNY 7.500 12/15/14 75.00 LIFECARE HOLDING LTACH 9.250 8/15/13 45.20 LTV CORP LTVCQ 8.200 9/15/07 0.00 LEVEL 3 COMM INC LVLT 2.875 7/15/10 68.38 LEVEL 3 COMM INC LVLT 3.500 6/15/12 65.48 LEVEL 3 FIN INC LVLT 8.750 2/15/17 73.52 MILLENNIUM AMER LYO 7.625 11/15/26 64.69 MAJESTIC STAR MAJEST 9.750 1/15/11 39.85 MAGNA ENTERTAINM MECA 7.250 12/15/09 62.00 MAGNA ENTERTAINM MECA 8.550 6/15/10 69.00 MERRILL LYNCH MER 10.000 3/ 6/09 23.80 MERRILL LYNCH MER 12.000 3/26/10 25.00 MERISANT CO MERI 9.500 7/15/13 70.50 MERIX CORP MERX 4.000 5/15/13 61.52 METALDYNE CORP METALD 10.000 11/ 1/13 61.25 METALDYNE CORP METALD 11.000 6/15/12 38.57 HARLAND CLARKE MFW 9.500 5/15/15 73.05 MASONITE CORP MHM 11.000 4/ 6/15 67.88 MHS HOLDINGS CO MHSHLD 16.875 9/22/04 0.01 KNIGHT RIDDER MNI 4.625 11/ 1/14 64.50 KNIGHT RIDDER MNI 5.750 9/ 1/17 64.55 KNIGHT RIDDER MNI 6.875 3/15/29 59.77 KNIGHT RIDDER MNI 7.150 11/ 1/27 62.27 MANNKIND CORP MNKD 3.750 12/15/13 64.38 MOMENTIVE PERFOR MOMENT 11.500 12/ 1/16 74.95 MORRIS PUBLISH MORPUB 7.000 8/ 1/13 56.00 MOVIE GALLERY MOVI 11.000 5/ 1/12 14.95 MRS FIELDS MRSFLD 9.000 3/15/11 73.75 MERITAGE HOMES MTH 6.250 3/15/15 73.03 MERITAGE CORP MTH 7.000 5/ 1/14 73.89 MICRON TECH MU 1.875 6/ 1/14 73.54 MUZAK LLC MUZK 9.875 3/15/09 70.00 SCOTIA PAC CO MXM 7.110 1/20/14 72.43 SCOTIA PAC CO MXM 7.710 1/20/14 71.93 MILACRON ESCROW MZ 11.500 5/15/11 74.77 NORTH ATL TRADNG NATRC 9.250 3/ 1/12 62.00 NEENAH CORP NEENAH 9.500 1/ 1/17 70.00 NEFF CORP NEFF 10.000 6/ 1/15 45.48 NETWORK COMMUNIC NETCOM 10.750 12/ 1/13 75.00 NATL FINANCIAL NFP 0.750 2/ 1/12 67.29 NATL STEEL CORP NSTLQ 8.375 8/ 1/06 0.01 NATL STEEL CORP NSTLQ 9.875 3/ 1/09 0.01 NORTHERN TEL CAP NT 7.875 6/15/26 71.05 NORTEK INC NTK 8.500 9/ 1/14 74.30 NTK HOLDINGS INC NTK 10.750 3/ 1/14 51.39 NUVEEN INVEST NUVINV 5.500 9/15/15 63.80 NORTHWST STL&WIR NWSW 9.500 6/15/01 0.01 REALTY INCOME O 5.875 3/15/35 71.30 OWENS CORNING OC 7.000 12/ 1/36 70.09 OMNICARE INC OCR 3.250 12/15/35 65.66 OAKWOOD HOMES OKWHQ 8.125 3/ 1/09 4.25 AMER & FORGN PWR OMX 5.000 3/ 1/30 54.86 OSCIENT PHARM OSCI 3.500 4/15/11 30.00 OUTBACK STEAKHSE OSI 10.000 6/15/15 60.89 PAC-WEST TELECOM PACW 13.500 2/ 1/09 0.06 PAC-WEST TELECOM PACW 13.500 2/ 1/09 1.00 PCA LLC/PCA FIN PCALLC 11.875 8/ 1/09 4.19 RESTAURANT CO PFR 10.000 10/ 1/13 61.31 PIERRE FOODS INC PIERRE 9.875 7/15/12 66.00 PLY GEM INDUST PLYGEM 9.000 2/15/12 69.59 PORTOLA PACKAGIN PORTOL 8.250 2/ 1/12 64.41 PARTNERRE FIN PRE 6.440 12/ 1/66 75.00 PROPEX FABRICS PROPEX 10.000 12/ 1/12 10.50 PRIMUS TELECOM PRTL 3.750 9/15/10 49.50 PRIMUS TELECOM PRTL 5.000 6/30/09 53.12 PRIMUS TELECOM PRTL 8.000 1/15/14 43.57 POPE & TALBOT PTBT 8.375 6/ 1/13 10.00 POPE & TALBOT PTBT 8.375 6/ 1/13 12.12 NUTRITIONAL SRC PUEBLO 10.125 8/ 1/09 8.55 POWERWAVE TECH PWAV 1.875 11/15/24 60.00 POWERWAVE TECH PWAV 3.875 10/ 1/27 58.84 PIXELWORKS INC PXLW 1.750 5/15/24 70.00 QUALITY DISTRIBU QLTY 9.000 11/15/10 65.25 RITE AID CORP RAD 6.875 8/15/13 64.92 RITE AID CORP RAD 6.875 12/15/28 52.05 RITE AID CORP RAD 7.700 2/15/27 57.03 RADNOR HOLDINGS RADHOL 11.000 3/15/10 0.12 RDM SPORTS GROUP RDMG 11.750 7/15/02 3.25 RESIDENTIAL CAP RESCAP 6.000 2/22/11 45.62 RESIDENTIAL CAP RESCAP 6.125 11/21/08 61.95 RESIDENTIAL CAP RESCAP 6.375 6/30/10 48.15 RESIDENTIAL CAP RESCAP 6.500 6/ 1/12 45.93 RESIDENTIAL CAP RESCAP 6.500 4/17/13 45.88 RESIDENTIAL CAP RESCAP 6.875 6/30/15 46.20 RF MICRO DEVICES RFMD 0.750 4/15/12 69.98 RF MICRO DEVICES RFMD 1.000 4/15/14 65.00 RH DONNELLEY RHD 6.875 1/15/13 57.04 RH DONNELLEY RHD 6.875 1/15/13 57.36 RH DONNELLEY RHD 6.875 1/15/13 57.53 DEX MEDIA INC RHD 8.000 11/15/13 70.90 RH DONNELLEY RHD 8.875 1/15/16 59.32 RH DONNELLEY RHD 8.875 10/15/17 59.01 ROTECH HEALTHCA ROHI 9.500 4/ 1/12 74.82 RADIO ONE INC ROIA 6.375 2/15/13 60.50 RENTECH INC RTK 4.000 4/15/13 55.25 NEXTEL COMMUNIC S 5.950 3/15/14 70.74 NEXTEL COMMUNIC S 5.950 3/15/14 73.20 NEXTEL COMMUNIC S 6.875 10/31/13 74.50 SPRINT CAP CORP S 6.875 11/15/28 74.38 SPECIAL DEVICES SDII 11.375 12/15/08 42.00 SECURUS TECH SECRUS 11.000 9/ 1/11 72.66 STANCORP FINL SFG 6.900 5/29/67 75.00 ISTAR FINANCIAL SFI 5.150 3/ 1/12 73.24 ISTAR FINANCIAL SFI 5.500 6/15/12 74.66 ISTAR FINANCIAL SFI 5.800 3/15/11 74.89 ISTAR FINANCIAL SFI 5.875 3/15/16 69.31 SEARS ROEBUCK AC SHLD 6.500 12/ 1/28 73.18 SEARS ROEBUCK AC SHLD 6.750 1/15/28 72.07 SEARS ROEBUCK AC SHLD 7.000 6/ 1/32 70.93 SIX FLAGS INC SIX 4.500 5/15/15 54.50 SIX FLAGS INC SIX 8.875 2/ 1/10 67.60 SIX FLAGS INC SIX 9.625 6/ 1/14 55.83 SIX FLAGS INC SIX 9.750 4/15/13 56.55 SLM CORP SLMA 4.550 6/15/13 68.26 SLM CORP SLMA 4.800 12/15/28 64.00 SLM CORP SLMA 5.000 12/15/13 68.15 SLM CORP SLMA 5.000 6/15/18 69.14 SLM CORP SLMA 5.000 6/15/19 66.30 SLM CORP SLMA 5.000 9/15/20 71.12 SLM CORP SLMA 5.000 6/15/28 66.00 SLM CORP SLMA 5.050 3/15/23 64.37 SLM CORP SLMA 5.190 4/24/19 68.50 SLM CORP SLMA 5.200 12/15/20 66.73 SLM CORP SLMA 5.200 3/15/28 68.23 SLM CORP SLMA 5.250 9/15/15 74.00 SLM CORP SLMA 5.250 6/15/28 62.40 SLM CORP SLMA 5.250 12/15/28 66.68 SLM CORP SLMA 5.300 12/15/28 66.38 SLM CORP SLMA 5.350 6/15/25 67.50 SLM CORP SLMA 5.350 6/15/25 68.84 SLM CORP SLMA 5.350 6/15/28 68.34 SLM CORP SLMA 5.400 3/15/19 70.95 SLM CORP SLMA 5.400 3/15/30 59.18 SLM CORP SLMA 5.400 6/15/30 62.45 SLM CORP SLMA 5.450 3/15/18 74.09 SLM CORP SLMA 5.450 12/15/20 74.32 SLM CORP SLMA 5.450 3/15/23 58.90 SLM CORP SLMA 5.450 3/15/28 70.64 SLM CORP SLMA 5.450 6/15/28 70.50 SLM CORP SLMA 5.450 6/15/28 63.09 SLM CORP SLMA 5.500 3/15/19 71.65 SLM CORP SLMA 5.500 6/15/19 71.97 SLM CORP SLMA 5.500 6/15/28 69.38 SLM CORP SLMA 5.500 6/15/29 59.83 SLM CORP SLMA 5.500 6/15/29 59.31 SLM CORP SLMA 5.500 6/15/29 61.12 SLM CORP SLMA 5.500 3/15/30 62.50 SLM CORP SLMA 5.500 3/15/30 63.69 SLM CORP SLMA 5.500 6/15/30 66.50 SLM CORP SLMA 5.500 12/15/30 60.21 SLM CORP SLMA 5.500 12/15/30 61.27 SLM CORP SLMA 5.550 6/15/25 59.51 SLM CORP SLMA 5.550 3/15/28 71.87 SLM CORP SLMA 5.550 6/15/28 74.79 SLM CORP SLMA 5.550 3/15/29 69.80 SLM CORP SLMA 5.600 3/15/22 66.67 SLM CORP SLMA 5.600 3/15/24 75.00 SLM CORP SLMA 5.600 3/15/29 69.33 SLM CORP SLMA 5.600 3/15/29 53.00 SLM CORP SLMA 5.600 3/15/29 69.35 SLM CORP SLMA 5.600 6/15/29 67.47 SLM CORP SLMA 5.600 12/15/29 66.07 SLM CORP SLMA 5.625 1/25/25 64.39 SLM CORP SLMA 5.625 8/ 1/33 73.10 SLM CORP SLMA 5.650 3/15/18 70.11 SLM CORP SLMA 5.650 6/15/22 66.62 SLM CORP SLMA 5.650 6/15/22 66.62 SLM CORP SLMA 5.650 3/15/29 68.69 SLM CORP SLMA 5.650 12/15/29 62.85 SLM CORP SLMA 5.650 12/15/29 62.22 SLM CORP SLMA 5.650 12/15/29 59.26 SLM CORP SLMA 5.650 3/15/30 66.50 SLM CORP SLMA 5.650 6/15/30 59.18 SLM CORP SLMA 5.650 3/15/32 64.56 SLM CORP SLMA 5.700 3/15/29 65.09 SLM CORP SLMA 5.700 3/15/29 56.37 SLM CORP SLMA 5.700 3/15/29 67.10 SLM CORP SLMA 5.700 3/15/29 65.20 SLM CORP SLMA 5.700 3/15/29 57.16 SLM CORP SLMA 5.700 12/15/29 57.16 SLM CORP SLMA 5.700 3/15/30 64.20 SLM CORP SLMA 5.700 3/15/32 65.00 SLM CORP SLMA 5.750 3/15/29 60.29 SLM CORP SLMA 5.750 3/15/29 62.29 SLM CORP SLMA 5.750 3/15/29 61.61 SLM CORP SLMA 5.750 6/15/29 63.80 SLM CORP SLMA 5.750 6/15/29 62.82 SLM CORP SLMA 5.750 9/15/29 64.38 SLM CORP SLMA 5.750 9/15/29 61.22 SLM CORP SLMA 5.750 12/15/29 58.80 SLM CORP SLMA 5.750 12/15/29 64.18 SLM CORP SLMA 5.750 12/15/29 67.20 SLM CORP SLMA 5.750 12/15/29 63.77 SLM CORP SLMA 5.750 3/15/30 64.65 SLM CORP SLMA 5.750 3/15/30 59.37 SLM CORP SLMA 5.750 6/15/32 65.43 SLM CORP SLMA 5.750 6/15/32 65.43 SLM CORP SLMA 5.800 12/15/29 63.35 SLM CORP SLMA 5.800 3/15/32 65.86 SLM CORP SLMA 5.800 3/15/32 65.86 SLM CORP SLMA 5.800 3/15/32 65.86 SLM CORP SLMA 5.850 9/15/29 56.87 SLM CORP SLMA 5.850 9/15/29 65.80 SLM CORP SLMA 5.850 12/15/31 66.44 SLM CORP SLMA 5.850 3/15/32 66.30 SLM CORP SLMA 5.850 3/15/32 66.30 SLM CORP SLMA 5.850 3/15/32 66.30 SLM CORP SLMA 5.850 6/15/32 66.29 SLM CORP SLMA 5.850 6/15/32 66.29 SLM CORP SLMA 6.000 6/15/19 74.87 SLM CORP SLMA 6.000 6/15/19 69.50 SLM CORP SLMA 6.000 6/15/19 63.59 SLM CORP SLMA 6.000 9/15/19 74.83 SLM CORP SLMA 6.000 6/15/21 73.93 SLM CORP SLMA 6.000 6/15/21 68.55 SLM CORP SLMA 6.000 6/15/21 73.08 SLM CORP SLMA 6.000 6/15/26 66.26 SLM CORP SLMA 6.000 6/15/26 63.00 SLM CORP SLMA 6.000 12/15/26 67.41 SLM CORP SLMA 6.000 12/15/26 70.10 SLM CORP SLMA 6.000 12/15/26 63.75 SLM CORP SLMA 6.000 12/15/26 65.91 SLM CORP SLMA 6.000 3/15/27 66.68 SLM CORP SLMA 6.000 12/15/28 74.25 SLM CORP SLMA 6.000 12/15/28 71.95 SLM CORP SLMA 6.000 3/15/29 59.67 SLM CORP SLMA 6.000 6/15/29 63.13 SLM CORP SLMA 6.000 6/15/29 64.25 SLM CORP SLMA 6.000 6/15/29 62.98 SLM CORP SLMA 6.000 9/15/29 62.53 SLM CORP SLMA 6.000 9/15/29 65.42 SLM CORP SLMA 6.000 9/15/29 60.12 SLM CORP SLMA 6.000 6/15/31 65.97 SLM CORP SLMA 6.000 12/15/31 65.30 SLM CORP SLMA 6.000 12/15/31 67.18 SLM CORP SLMA 6.000 12/15/31 63.35 SLM CORP SLMA 6.000 12/15/31 58.92 SLM CORP SLMA 6.000 3/15/37 65.85 SLM CORP SLMA 6.000 3/15/37 65.85 SLM CORP SLMA 6.000 3/15/37 65.85 SLM CORP SLMA 6.050 12/15/26 62.35 SLM CORP SLMA 6.050 12/15/31 64.42 SLM CORP SLMA 6.100 6/15/21 74.31 SLM CORP SLMA 6.100 9/15/21 71.66 SLM CORP SLMA 6.100 12/15/28 68.72 SLM CORP SLMA 6.100 12/15/31 59.75 SLM CORP SLMA 6.150 3/10/21 71.76 SLM CORP SLMA 6.150 6/15/21 73.34 SLM CORP SLMA 6.150 6/15/21 72.10 SLM CORP SLMA 6.150 9/15/29 67.80 SLM CORP SLMA 6.150 9/15/29 66.23 SLM CORP SLMA 6.200 12/15/31 68.30 SLM CORP SLMA 6.250 6/15/29 65.30 SLM CORP SLMA 6.250 6/15/29 66.80 SLM CORP SLMA 6.250 6/15/29 70.00 SLM CORP SLMA 6.250 9/15/29 67.01 SLM CORP SLMA 6.250 9/15/29 73.26 SLM CORP SLMA 6.250 9/15/29 69.74 SLM CORP SLMA 6.250 9/15/31 64.75 SLM CORP SLMA 6.250 9/15/31 72.01 SLM CORP SLMA 6.300 9/15/31 67.21 SLM CORP SLMA 6.350 9/15/31 72.12 SLM CORP SLMA 6.350 9/15/31 68.91 SLM CORP SLMA 6.400 9/15/31 68.86 SLM CORP SLMA 6.450 9/15/31 63.45 SLM CORP SLMA 6.500 9/15/31 62.56 SLM CORP SLMA 6.850 7/ 7/36 73.36 SANDISK CORP SNDK 1.000 5/15/13 71.71 SPACEHAB INC SPAB 5.500 10/15/10 60.25 SPECTRUM BRANDS SPC 7.375 2/ 1/15 64.45 STANDRD PAC CORP SPF 6.000 10/ 1/12 61.00 STANDRD PAC CORP SPF 6.250 4/ 1/14 69.68 STANDRD PAC CORP SPF 6.875 5/15/11 71.96 STANDARD PACIFIC SPF 7.000 8/15/15 70.03 STANDRD PAC CORP SPF 7.750 3/15/13 70.77 STANDARD PACIFIC SPF 9.250 4/15/12 57.61 SPANSION LLC SPSN 11.250 1/15/16 63.71 STANLEY-MARTIN STANMA 9.750 8/15/15 47.87 STATION CASINOS STN 6.500 2/ 1/14 61.30 STATION CASINOS STN 6.625 3/15/18 57.72 STATION CASINOS STN 6.875 3/ 1/16 59.01 SERVICEMASTER CO SVM 7.100 3/ 1/18 48.00 SERVICEMASTER CO SVM 7.450 8/15/27 53.30 ALBERTSON'S INC SVU 6.520 4/10/28 66.14 ALBERTSON'S INC SVU 6.530 4/10/28 66.23 ALBERTSON'S INC SVU 6.560 7/26/27 67.11 ALBERTSON'S INC SVU 6.570 2/23/28 66.67 ALBERTSON'S INC SVU 6.630 6/ 2/28 67.05 ALBERTSON'S INC SVU 7.110 7/22/27 71.83 ALBERTSON'S INC SVU 7.150 7/23/27 72.17 SWIFT TRANS CO SWFT 12.500 5/15/17 41.47 TEKNI-PLEX INC TEKNI 12.750 6/15/10 55.31 TENET HEALTHCARE THC 6.875 11/15/31 68.44 TOM'S FOODS INC TOMSFD 10.500 11/ 1/04 0.26 TOUSA INC TOUS 7.500 3/15/11 7.50 TOUSA INC TOUS 7.500 1/15/15 8.00 TOUSA INC TOUS 9.000 7/ 1/10 49.33 TOUSA INC TOUS 9.000 7/ 1/10 45.00 TOUSA INC TOUS 10.375 7/ 1/12 7.50 TOYS R US TOY 7.375 10/15/18 68.15 TOYS R US TOY 7.875 4/15/13 73.75 TRIBUNE CO TRB 4.875 8/15/10 54.99 TRIBUNE CO TRB 5.250 8/15/15 39.44 TIMES MIRROR CO TRB 6.610 9/15/27 32.00 TIMES MIRROR CO TRB 7.250 3/ 1/13 45.67 TIMES MIRROR CO TRB 7.250 11/15/96 40.56 TIMES MIRROR CO TRB 7.500 7/ 1/23 39.38 TRUMP ENTERTNMNT TRMP 8.500 6/ 1/15 67.15 WIMAR OP LLC/FIN TROPEN 9.625 12/15/14 52.58 BUILDERS TRANSPT TRUKQ 8.000 8/15/05 0.00 TRUE TEMPER TRUTEM 8.375 9/15/11 53.00 TRISM INC TSMX 12.000 2/15/05 0.01 IBP INC TSN 7.125 2/ 1/26 74.96 TRANSTEXAS GAS TTXGQ 15.000 3/15/05 0.07 TREX CO INC TWP 6.000 7/ 1/12 72.00 RJ TOWER CORP TWRAUT 12.000 6/ 1/13 1.75 TXU CORP TXU 6.500 11/15/24 71.04 TXU CORP TXU 6.550 11/15/34 70.65 TEXAS UTIL ELEC TXU 8.175 1/30/37 74.29 UNITED AIR LINES UAUA 10.020 3/22/14 47.50 UNITED AIR LINES UAUA 10.110 2/19/49 46.00 US AIR INC UAWGQ 10.300 7/15/49 0.00 US AIR INC UAWGQ 10.550 1/15/49 0.01 US AIR INC UAWGQ 10.700 1/15/49 0.01 US AIR INC UAWGQ 10.900 1/ 1/49 0.01 UNITED HOMES INC UHOMES 11.000 3/15/05 0.00 USEC INC USU 3.000 10/ 1/14 56.10 VISTEON CORP VC 7.000 3/10/14 62.52 VERTIS INC VERTIS 10.875 6/15/09 37.95 VIROPHARMA INC VPHM 2.000 3/15/17 70.35 VICORP RESTAURNT VRES 10.500 4/15/11 24.50 VERASUN ENERGY VSE 9.375 6/ 1/17 65.30 VESTA INSUR GRP VTAI 8.750 7/15/25 2.32 WACHOVIA CORP WB 9.250 4/10/08 59.79 WCI COMMUNITIES WCI 4.000 8/ 5/23 68.00 WCI COMMUNITIES WCI 9.125 5/ 1/12 50.16 WINSTAR COMM INC WCIIQ 10.000 3/15/08 0.00 WERNER HOLDINGS WERNER 10.000 11/15/07 0.01 WILLIAM LYON WLS 7.500 2/15/14 51.33 WILLIAM LYON WLS 7.625 12/15/12 52.16 WILLIAM LYON WLS 10.750 4/ 1/13 53.14 WASH MUT BANK NV WM 5.125 1/15/15 73.84 WASH MUTUAL PFD WM 6.665 12/31/49 60.65 WORNICK CO WORNCK 10.875 7/15/11 65.50 YOUNG BROADCSTNG YBTVA 8.750 1/15/14 59.47 YOUNG BROADCSTNG YBTVA 10.000 3/ 1/11 61.98 ********* 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. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. 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 ***