TCR_Public/081218.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

           Thursday, December 18, 2008, Vol. 12, No. 301

                             Headlines


ACA FINANCIAL: S&P Takes Rating Actions on 3 Insured MTN Issues
AGRIPROCESSORS INC: Ch. 11 Case Transferred to Dubuque, Iowa
AHERN RENTALS: S&P Puts 'B+' Long-Term Rating on Negative Watch
ALERITAS CAPITAL: Founder Files Bankruptcy Trying to Save Firm
AMERICAN AXLE: Moody's Junks & Reviews Ratings for Further Cuts

AMERICA CAPITAL: Court Okays First Amended Disclosure Statement
ANTIOCH CO: U.S. Trustee Forms Five-Member Creditors Committee
ASPECT SOFTWARE: Moody's Corrects December 9 Ratings Release
ATLANTIC MARINE: S&P Revises Outlook on 'B+' Rating to Positive
BALLY TECHNOLOGIES: Industry to Remain Under Pressure in 2009

BANC OF AMERICA: Fitch Holds Low-B Ratings on 2 Classes of Certs.
BANK OF AMERICA: Fitch Holds Low-B Ratings on 4 Classes of Certs.
BEAR STEARNS: Fitch Affirms Low-B Ratings on 3 Classes of Certs.
BEAR STEARNS: S&P Junks Ratings on 4 Classes of Certificates
BERKELEY PREMIUM: $2.75MM Sale to Pristine Bay Approved

BLUE AND GREEN: Bankruptcy Case Ends; Creditors Recover 100%
BOWNE & CO: S&P Cuts Credit Rating to B & Junks Debentures Rating
BOYD GAMING: Fitch Says Industry to Remain Under Pressure in 2009
BRIAN TUTTLE: Court Approves Sale of Interest in Jonal Mortgage
BROOKE CAPITAL: Founder Files Bankruptcy Trying to Save Firm

BROOKSTONE INC: S&P Affirms B Rating & Revises Outlook to Negative
CBRE REALTY: S&P Keeps Low-B Ratings on 3 Classes on WatchNegative
CD 2007-CD4: S&P Lowers Ratings on Six Classes of Securities
CENTURY ALUMINUM: S&P Puts 'BB-' Rating on Negative CreditWatch
CHASE COMMERCIAL: Fitch Affirms Low-B Ratings on Two Classes

CHASE MORTGAGE: Moody's Lowers Ratings on 2006 & 2007 Jumbo Deals
CHASEFLEX TRUST: S&P Lowers Ratings on 25 Classes of Certificates
CHECKSMART FINANCIAL: Moody's Confirms Junk Ratings; Outlook Neg.
CHESAPEAKE CORP: Hires Hunton & Williams to Advise on Bankruptcy
CHESAPEAKE CORP: S&P's Rating on 7% Senior Notes Tumbles to 'D'

CHRYSLER LLC: Moody's Says Likely Scenario Is Government Support
CHRYSLER LLC: To Shut for a Month; Cerberus Won't Put More Funds
CIRCUIT CITY: Court OKs Hilco/Gordon as Agents for GOB Sales
CIRCUIT CITY: Seeks to Keep Credit Card Deal w/ Chase Bank
CITIGROUP MORTGAGE: S&P Cuts Ratings on 4 Cert. Classes to Low-B

CONTINENTAL AIRLINES: Fitch Affirms Sr. Debt Rating at 'CCC/RR6'
CREDIT SUISSE: Moody's Junks Ratings on 3 Classes of Certificates
DEL FRISCO'S: S&P Affirms 'B' Credit Rating; Outlook Negative
DELPHI CORP: Chairman Says Detroit 3 Need Pseudo-Bankruptcy
DISTRIBUTED ENERGY: Wants Plan Filing Period Extended to March 2

EQUITY MEDIA: Hearing on Case Conversion to Liquidation Postponed
FORD MOTOR: Moody's Says Likely Scenario Is Government Support
FRONTIER AIRLINES: Court OKs Agreement With IBT Appearance Agents
FRONTIER AIRLINES: IBT Pursues Appeal; Debtor Wants Stay Enforced
FRONTIER AIRLINES: Reports 14.1% Drop in Workforce

FRONTIER AIRLINES: CEO & James Upchurch Dispose of All Shares
GENERAL GROWTH: Has Not Reached Deal With Lenders on $900MM Loan
GENERAL MOTORS: E.D. Mich. Preps for Chapter 11 Filing in Detroit
GENERAL MOTORS: Moody's Says Likely Scenario Is Government Support
GENERAL MOTORS: Will Stop Construction of Flint Factory

GOLDEN STATE FOODS: Lack of Info Cues Moody's to Withdraw Ratings
HARRAH'S ENTERTAINMENT: Industry to Remain Under Pressure in 2009
HEXION SPECIALTY: S&P Keeps Ratings on Negative CreditWatch
HINES HORTICULTURE: Court OKs Sale of All Assets to Black Diamond
HINES HORTICULTURE: Court Approves Disclosure Statement

HUNTSMAN CORP: S&P Keeps 'BB-' Credit Rating on Negative Watch
ILLINOIS FINANCE: Fitch Holds 'BB-' Rating on $80.5 Million Bonds
INN OF THE MOUNTAIN: S&P Junks Corp. & Debt Ratings; Outlook Neg.
JAYS FOODS: Chapter 11 Dismissed Due to Lack of Funds
JED OIL: Alberta Court Extends CCAA Stay Until Feb. 17, 2009

JOHNS MANVILLE: Travelers Appeal Goes to Supreme Court
JP MORGAN COMMERCIAL: Fitch Holds 'C/DR5' Rating on Class J Certs.
KANSAS SOUTHERN: Moody's Rates Proposed Sr. Unsec. Notes at B2
KANSAS SOUTHERN: S&P Assigns 'BB-' Rating on $190MM Senior Notes
KAUPTHING BANK: Court to Hear Chapter 15 Petition on January 21

KB TOYS: U.S. Trustee Forms Seven-Member Creditors Committee
LAGUNA DEVELOPMENT: Industry to Remain Under Pressure in 2009
LANDAMERICA FIN'L: Stewart Balks at Sale; Says It Has "Best" Bid
LANDAMERICA FINANCIAL: Taps Zolfo Cooper's J. Mitchell as CRO
LANDAMERICA FIN'L: Seeks to Remit Segregated Section 1031 Funds

LANDAMERICA FINANCIAL: Investors Seek to Recover 1301 Funds
LANDAMERICA FINANCIAL: Trustee Appoints Creditors Committees
LAS VEGAS SANDS: Gaming Industry to Remain Under Pressure in 2009
LB-UBS COMMERCIAL: Moody's Confirms Low-B Ratings on Six Classes
LEE ENTERPRISES: To Violate Covenants on $306MM of Senior Notes

LEHMAN BROTHERS: Sets Derivative Deals Protocol; Creditors Object
LILLIAN VERNON: Seeks April 31 Extension to File Liquidating Plan
MACH GEN: Moody's Puts B2 Ratings on Review for Possible Upgrade
MERRILL LYNCH: Moody's Cuts Rating on Class E $9.6MM Certs. to B2
MGM MIRAGE: Fitch Keeps Outlook on Low-B Ratings Negative

MGM MIRAGE: Fitch Says Industry to Remain Under Pressure in 2009
MIDWAY GAMES: Will Lay Off 25% of Work Force & Close Texas Studio
MOMENTIVE PERFORMANCE: S&P Cuts Corp. Credit Rating to 'B-'
MOMENTUM PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
MORGAN STANLEY: Moody's Junks Ratings on 3 Classes of Certificates

NEFF CORP: S&P Lowers Corp. Credit Ratings to Selective Default
NES RENTALS: S&P Holds 'B+' Rating & Revises Outlook to Negative
NEWPORT WAVES: Moody's Downgrades Ratings on 29 Classes of Notes
NORTEL NETWORKS: Moody's Junks Rating on Series 2001-1 Certs.
OFFICE DEPOT: Moody's Downgrades CFR to Ba3; Outlook Negative

OLIN CORP: S&P Assigns Preliminary Low-B Ratings on Debts
PARK-OHIO INDUSTRIES: S&P Holds B+ Long-Term Rating; Outlook Neg.
PERKINS & MARIE: S&P Junks Corp. Credit Rating; Outlook Negative
PIERRE FOODS: Consummates Ch. 11 Plan, Exits Bankruptcy
PIERRE FOODS: W. Toler to Lead Firm as CEO Post-Emergence

PFAU PFAU: Case Summary & 11 Largest Unsecured Creditors
POLYONE CORP: S&P Cuts Corp. Credit Rating to 'B'; Outlook Stable
POTLATCH CORP: Fitch Affirms IDR and Revenue Bonds Rating at 'BB+'
PRESERVE LLC: May Borrow Up to $2,000,000 from Scott Krentel
PUEBLO OF SANTA ANA: Industry to Remain Under Pressure in 2009

QUEBECOR WORLD: Four Directors Step Down from Board
REAL ESTATE ASSET: Moody's Affirms Low-B Ratings on Six Classes
ROBERT ORR: Files for Bankruptcy to Keep Brooke & Aleritas Afloat
ROBERT ORR: Case Summary & 18 Largest Unsecured Creditors
ROCKET RESTAURANT: Files for Chapter 11 Protection in Colorado

SASI FINANCE: Moody's Corrects December 8 Ratings Release
SEMGROUP LP: Catsimatidis to Meet Senior Mgt. Monday
SEMGROUP LP: Court Extends Plan Filing Deadline to March 19
SEMGROUP LP: Ex-CEO of Energy Unit & Other Parties Oppose Probe
SEMGROUP LP: Examiner Seeks to Retain Morrison as Counsel

SEMGROUP LP: Holdings' Schedules Of Assets And Liabilities
SEMGROUP LP: Energy Unit's Forbearance Agreement Expires Today
SMITHFIELD FOODS: S&P Cuts Corporate Credit Rating to 'B'
SOLUTIA INC: Supports $14BB Bailout for U.S. Automakers
SOLUTIA INC: Court OKs Trumbull Termination, Allows DuPont Claim

SOLUTIA INC: Accounts for $440MM of $2.9BB PIPE Deals in 2008
SPECTRUM BRANDS: Fitch Affirms & Withdraws Ratings
STATION CASINOS: Gaming Industry to Remain Under Pressure in 2009
STILLWATER MINING: Moody's Junks CFR; Outlook Remains Positive
STONERIDGE INC: Moody's Puts Low-B Ratings on Review for Downgrade

SUNSTATE EQUIPMENT: S&P Affirms 'B+' Rating; Outlook Negative
TENET HEALTHCARE: Board OKs Amendments and Restatement of Bylaws
TENET HEALTHCARE: CEO, Other Execs Disclose Ownership of Stock
THE GAP: Fitch Affirms & Withdraws Low-B Ratings
THORNBURG MORTGAGE: S&P Lifts Counterparty Credit Rating to 'CC'

TREMONT GROUP: More Than Half of Assets Invested in Madoff's Firm
TRIBUNE CO: Teamsters Says Employees Should Be First in Line
TRIMAS CORP: Moody's Affirms B2 CFR & Junks Sr. Sub. Notes Rating
TRONOX INC: Taps Kirkland & Ellis for Bankruptcy Advice
TRUMP ENTERTAINMENT: Industry to Remain Under Pressure in 2009

VICORP RESTAURANTS: To Sell Most of Assets for $59 Million
VICORP RESTAURANTS: To File Stalking Horse Agreement on Dec. 17
WACHOVIA BANK: S&P Lowers Ratings on Classes N & O Certificates
WELLS FARGO: Moody's Downgrades Jumbo Deals Issued in 2006 & 2007
X-RITE INC: CFO Discloses Ownership of 38,000 Equity Interest

X-RITE INC: Appoints Bradley J. Freiburger as Interim CFO
YELLOWSTONE MOUNTAIN: U.S. Trustee Forms 9-Member Creditors Panel
YELLOWSTONE MOUNTAIN: Can Access $19.75 Mil. CrossHarbor Facility

* Fitch: U.S. Gaming Industry Will Remain Under Pressure in 2009
* Moody's Cuts Ratings on 348 Notes Issued by 166 SF CDOs in 2006
* Moody's: Likely Scenario for Big 3 Is Major Government Support
* S&P Corrects Ratings Release to Show Right Debt Type for Venoco
* S&P Cuts Ratings on 19 Classes of Certificates From 6 RMBS Deals

* S&P Lowers Ratings on 99 Classes From 7 U.S. RMBS Transactions
* S&P Junks Two Classes of EURO-Denominated Notes
* S&P Lowers Ratings on 18 Classes From 6 U.S. RMBS Transactions
* S&P Lowers Ratings on 34 Classes From 5 RMBS Transactions

* Chapter 11 Cases With Assets & Liabilities Below $1,000,000


                             *********


ACA FINANCIAL: S&P Takes Rating Actions on 3 Insured MTN Issues
---------------------------------------------------------------
Standard & Poor's Ratings Services took these rating actions on
three bond-insured medium-term note (MTN) issues:

   -- "We raised our ratings on all three bond-insured MTN issues;

   -- "We removed the ratings from CreditWatch with developing
      implications, where they were placed Nov. 25, 2008; and

   -- "We removed our ratings on all three bond-insured MTN
      issues.

S&P said, "These rating actions follow the Dec. 15, 2008,
placement of our financial strength, financial enhancement, and
issuer credit ratings on ACA Financial Guaranty Corp. to 'B' from
'CCC' and our removal of those ratings from CreditWatch
developing, where they were placed Dec. 19, 2007.  We then
withdrew the ratings at the company's request."

RATINGS RAISED AND REMOVED FROM CREDITWATCH DEVELOPING

   * ACA Financial Guaranty Corp.-Supported MTN Issues

Aegis Texas Venture Fund L.P.
US$22.535 mil medium-term notes series 2005 due 08/01/2011

                             Rating
                       To              From
                       --              ----
                       B               CCC/Watch Dev

Whitecap Alabama Growth Fund I LLC
US$14.620 mil medium-term notes series 2004 due 03/01/2014

                             Rating
                       To              From
                       --              ----
                       B               CCC/Watch Dev

Whitecap Louisiana Growth Fund LLC
US$6.8 mil medium-term notes series 2003 due 03/01/2013

                             Rating
                       To              From
                       --              ----
                       B               CCC/Watch Dev


RATINGS WITHDRAWN

   * ACA Financial Guaranty Corp.-Supported MTN Issues

Aegis Texas Venture Fund L.P.
US$22.535 mil medium-term notes series 2005 due 08/01/2011

                             Rating
                       To              From
                       --              ----
                       NR              B

Whitecap Alabama Growth Fund I LLC
US$14.620 mil medium-term notes series 2004 due 03/01/2014

                             Rating
                       To              From
                       --              ----
                       NR              B

Whitecap Louisiana Growth Fund LLC
US$6.8 mil medium-term notes series 2003 due 03/01/2013

                             Rating
                       To              From
                       --              ----
                       NR              B

NR -- Not rated


AGRIPROCESSORS INC: Ch. 11 Case Transferred to Dubuque, Iowa
------------------------------------------------------------
The U.S. Bankruptcy Court, Eastern District of New York (Brooklyn)
has granted the transfer of the venue of Agriprocessors Inc.'s
Chapter 11 cases to the U.S. Bankruptcy Court in Dubuque, Iowa.
Agriprocessors is based in Postville, Iowa.

According to Bloomberg News' Bill Rochelle, the Brooklyn
bankruptcy judge also approved an increase in the secured funding
from $2.5 million to $3.4 million. The loan is provided by First
Bank Business Capital Inc., the secured lender owed $33.5 million.
The bank also filed the motion to change venue.

Meanwhile, Bankruptcy Law360 reports that Florida-based Quantum
Partners Inc. filed a letter of intent Friday in the U.S.
Bankruptcy Court for the Eastern District of New York to provide
up to $50 million in loans to Agriprocessors Inc. in exchange for
taking on a controlling share in the family-owned business.

The Brooklyn Bankruptcy Court previously approved the United
States Trustee for Region 2's request to appoint a Chapter 11
Trustee for the Chapter 11 case of Agriprocessors Inc.  The
secured lender was unwilling to provide financing to the company
without a trustee or a third party in control, Mr.
Rochelle reported.  The Chapter 11 Trustee took control of the
company away from the Rubashkin family.  CEO Sholom Rubashkin was
arrested for defrauding the lender by diverting collateral and
inflating accounts receivables.

                        About Agriprocessors

Headquartered in Postville, Iowa, Agriprocessors Inc. --
http://www.agriprocessor.com/-- operates a kosher meat and
poultry packing processors located at 220 North West Street.  The
company maintains an executive office with 50 employees at 5600
First Avenue in Brooklyn, New York.

The company filed for Chapter 11 protection on Nov. 4, 2008
(Bankr. E. D. N.Y. Case No. 08-47472).  Kevin J. Nash, Esq., at
Finkel Goldstein Rosenbloom & Nash represents the company in its
restructuring effort.  The company listed assets of $100 million
to $500 million and debts of $50 million to $100 million.


AHERN RENTALS: S&P Puts 'B+' Long-Term Rating on Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Ahern
Rentals Inc. on CreditWatch with negative implications, including
the 'B+' long-term corporate credit and senior secured debt
ratings.

"The CreditWatch stems from expected weakening conditions in
nonresidential construction markets and Ahern's constrained
liquidity entering a downturn," said Standard & Poor's credit
analyst John Sico.  "Ahern has not reduced capital spending to the
level that would be anticipated in weakening markets, limiting any
positive free cash flow, and liquidity has suffered as a result of
the company's still-high capital spending.  Although the company
is currently in compliance with financial covenants, a step down
in leverage could become an issue if Ahern fails to maintain
minimum liquidity of $25 million.  The company is leveraged with
debt to EBITDA at about 4.1x as of Sept. 30, 2008 (adjusted for
operating leases). For the existing rating, we expect debt to
EBITDA to average 3.5x-4x."

"We could lower the rating on the company in the near term if
credit metrics continue to weaken and liquidity and headroom on
covenants deteriorates.  Ahern's operating performance could
weaken in 2009 due to the difficulties facing the industry and
result in metrics considerably outside our range of expectations.
As we expect industry conditions to turn down, Ahern needs to cut
back on capital expenditures to generate free cash flow.  We could
lower the rating if free cash flow is not achieved to reduce debt
and provide adequate headroom on covenants."


ALERITAS CAPITAL: Founder Files Bankruptcy Trying to Save Firm
--------------------------------------------------------------
Robert Orr filed for personal bankruptcy after pledging his family
fortune trying to save Brooke Capital Corporation, an insurance
agency franchisor and a public company, and Aleritas Capital
Corp., a finance company specializing in insurance lending and a
public company of which Orr's family indirectly owned
approximately 29%.

Aleritas loaned money to insurance agencies, then packaged the
loans as securities and sold them to Wall Street investors.  To
enhance the credit quality of these securities, Brooke Capital
provided franchising and consulting services to insurance agency
borrowers on behalf of the Wall Street investors.

The refusal of Wall Street investors to pay servicing fees for the
consulting and collateral preservation services provided by Brooke
Capital caused the insurance agency franchisor to collapse from
cash flow shortages and the finance company to collapse from
deterioration of loan quality because the insurance agency
franchisor could no longer afford to provide these critical
services to the finance company's borrowers.

The meltdown of these companies accelerated when a special master,
who was appointed by the court to maintain the status quo until
Brooke Capital's differences with Wall Street investors were
resolved, instead liquidated assets and released insurance agency
franchisees from their agreements.

With Brooke Capital in bankruptcy and Aleritas in liquidation, it
is unlikely Orr will see repayment of approximately $12,000,000
that his family loaned to the companies in recent months.  Another
result of the companies' collapse is that Orr will be required to
repay approximately $25,000,000 of debt that was personally
guaranteed by him as part of Orr's efforts in recent months to
turn around the companies.

"Last year I retired as a company executive, but I came out of
retirement in April of this year to help Aleritas, and later
Brooke Capital, through difficult economic times," Mr. Orr said.
"With the benefit of hindsight, I regret returning as a company
executive because the price paid by my family has been
extraordinary.  I have endured financial ruin and unwarranted
personal attacks," he said

"As an executive taking over management of these troubled
companies just prior to their collapse and as an executive
responsible for making the difficult decisions required to
turnaround these troubled companies, I have become the target of
attack for anyone with a complaint," Mr. Orr continued.

Last year, as a result of merging wholly owned Brooke Capital and
wholly owned Aleritas into existing public companies, most of the
stock of Aleritas and Brooke Capital became directly, or
indirectly, owned by public investors.  "When Aleritas and Brooke
Capital became public companies last year, I believed that I could
slow down after a lifetime of 60-70 hour weeks," Mr. Orr related.
"I believed that my involvement as an executive was not required
because, as an investor in public companies, my investment would
be protected by the management accountability demanded by
independent directors, exchange listing provisions, sophisticated
investors and auditors," Mr. Orr added.

After Aleritas became a public company, Orr did not serve as a
director or officer.  After Brooke Capital became a public
company, Orr remained as a director but relinquished all executive
responsibilities.

Mr. Orr said, "In March of this year it became apparent that I
was naive to rely on public company safeguards to protect my
investment in Aleritas."  Aleritas had become financially troubled
primarily as a result of increased loan losses, a failed
refinancing transaction and rapid expansion in a difficult
economy.  In response to a request from Aleritas' largest
purchaser of loan participations, Orr asked for an emergency
meeting of the Aleritas board on March 31, 2008 to demand the
changes required for a turnaround of the company, including the
appointment of Orr as interim chief executive officer of Aleritas
until the company found a capable replacement with turnaround
experience.

Over the next several weeks, Mr. Orr announced to investors:

   a) a $24 million charge for loan losses and credit impairments,

   b) suspension of the company's growth plans; and

   c) the proposed steps to complete the failed refinancing
      transaction.

During the five months that Mr. Orr and Michael Hess were Aleritas
executives, many unpopular and difficult decisions were
implemented which they believed were required to turn the company
around, including:

   a) working with Brooke Capital to mitigate loan losses
      despite previous tensions between Aleritas and Brooke
      Capital;

   b) negotiating with recalcitrant Wall Street investors for
      payment of servicing fees to assure Brooke Capital's
      continued assistance;

   c) negotiating with lenders to remedy liquidity concerns; and

   d) reducing the amounts of collateral pledge and loan payment
      discrepancies existing on March 31st when Orr and Hess
      became Aleritas executives.

Especially difficult were the decisions made to reduce collateral
pledge and loan payment discrepancies because this involved
decisions regarding payment priorities and collateral quality.

Mr. Orr and Hess first required the completion of conversion to a
new loan accounting process to better track and control collateral
pledges and loan payments.  Although discrepancies were
significantly reduced after March 31st, the resolution of those
discrepancies existing on March 31st sometimes evolved into
different discrepancies as Orr and Hess tried to fairly resolve
these issues.

Brooke Capital has historically provided critical assistance to
franchise agency borrowers as part of a servicing agreement with
Wall Street investors.  During August Brooke Capital experienced
significant cash flow problems because Wall Street investors
refused to pay past due servicing fees owed to Brooke Capital.

Apparently frustrated that they could not collect past due
servicing fees and resolve the company's cash flow problems,
Brooke Capital's chief executive officer, chief operating officer,
senior vice president and general counsel resigned.  Mr. Orr
reluctantly stepped in on August 19th to fill the management void
in Brooke Capital and aggressively pursued collection of past due
servicing fees during the ensuring month that he served as Brooke
Capital's chief executive officer.

Allegations of funds misappropriation leveled against Orr by
WallStreet investors were primarily the result of Brooke Capital
offsetting the past due amounts it was owed from Wall Street
investors by the amounts that Brooke Capital owed to Wall Street
investors.  These offsets were approved by Brooke Capital's legal
counsel and summarized in a court motion.  The dispute between
Wall Street investors and Brooke Capital culminated in the
appointment of a special master on Sept. 17, 2008, and the
resulting collapses of Aleritas and Brooke Capital.

Mr. Orr summarized by saying, "Until the meltdown caused by Wall
Street investors, I was confident that Aleritas and Brooke Capital
were taking the difficult steps required to turn around the
companies.  As a result, my family did not sell any stock -- until
it was seized by the creditors for repayment of a company loan --
and instead purchased approximately $2,000,000 in additional stock
during 2008.  I believed in Aleritas and Brooke Capital."

                      About Aleritas Capital

Aleritas Capital Corporation fka Brooke Credit Corporation lends
primarily to locally-owned businesses that sell insurance.  The
firm's market consists of retail insurance agencies and managing
general agencies, where the sale of insurance is their primary
business.  In addition, it loans money to funeral home owners,
where the sale of insurance is often an important, although not
primary, part of their business.  It focused on lending to small
'main street businesses' across America, primarily in insurance-
related industries which have historically been underserved by
traditional lenders.


AMERICAN AXLE: Moody's Junks & Reviews Ratings for Further Cuts
---------------------------------------------------------------
Moody's Investors Service lowered American Axle & Manufacturing
Holdings, Inc.'s Corporate Family Rating and Probability of
Default Rating to Caa1 from B2 and is reviewing the rating for
further possible downgrade.  In a related action Moody's affirmed
the ratings on the company's bank credit facilities at B2, lowered
the rating on the unsecured guaranteed notes to Caa2 from B2, and
lowered the ratings on the unsecured convertible notes to Caa2
from B2.  The Speculative Grade Liquidity Rating was lowered to
SGL-4 from SGL-3.

The lowering of American Axle's Corporate Family Rating to Caa1
incorporates sustained lower North American production levels at
the Detroit-3 automobile manufacturers, recently announced
production declines, and the likelihood of further production
declines going into 2009.  The action also considers American
Axle's large customer concentrations with General Motors, and the
potential for financial restructurings or bankruptcy filings by
one or more of the Detroit-3 OEMs which could create further
operating disruptions for American Axle.

The review will continue to assess the expected deterioration in
the North American market for SUVs and light trucks, the resulting
pressure on the company's credit metrics, and the eroded financial
condition of the North American operations of the Detroit-3.
American Axle realized important structural cost benefits from the
constructive labor contact that was completed in May 2008, and
from other restructuring actions.  The company has announced
$1.4 billion of new business wins that are expected to further
diversify the company's customer base, products and geographic
mix.  Moody's will evaluate the degree to which these and any
further actions may mitigate the severe downturn in the North
American automotive markets, which is expected to continue into
2009.  The review will also assess the level of liquidity that
American Axle will likely be able to maintain during this
downturn.

The ratings of the bank credit facilities, the unsecured notes and
the convertible notes reflect their priority in Moody's LGD
Methodology.  In November 2008, the company amended its bank
credit facilities which, among other things, provided security to
the lenders in exchange for certain financial covenant and other
amendments; and extended a portion of the reduced commitments to
December 2011 in exchange for additional pricing.  The new
commitment level of $477 million is available until April 2010 and
$369 million of this commitment is available until December 2011.
As a result, the amended bank facility is notched above the
Corporate Family Rating and the unsecured notes are notched below.

The Speculative Grade Liquidity Rating of SGL-4 reflects the
expectation that the company's ability to generate positive free
cash flow over the next twelve months will be pressured by the
announcement of reduced production levels in North America from
the company's largest customer.  At September 30, 2008, the
company reported $454 million of cash.  An additional $117 million
of cash is reclassified as short-term investments in the Reserve
Funds.  Redemptions from the Reserve Funds were temporarily
suspended in September of 2008.  The company maintained
availability of $105 million under the revolving credit facility
at the prior $600 million commitment level.  Availability is now
reduced under the amended $477 million commitment level.
Principal financial covenants under the amended facilities include
a secured debt/EBITDA test and an EBITDA/interest expense test.
Covenants continue to exclude special and non-recurring items such
as the costs related to restructuring under the new labor
agreement.  While the new covenant levels provide additional
cushion, continuing announced production declines in North America
will continue to pressure these cushion levels.  The security
provided to the lenders as part of the bank credit facility
amendment limit the company's alternate sources of liquidity,
subject to lien baskets and sale/leaseback limitations in the
respective indentures.

Ratings lowered and under review:

American Axle & Manufacturing Holdings, Inc.

   * Corporate Family, to Caa1 from B2

   * Probability of Default, to Caa1 from B2

   * Unsecured guaranteed convertible note, to Caa2 (LGD5, 78%)
     from B2 (LGD4, 54 %)

American Axle & Manufacturing, Inc.

   * Unsecured guaranteed notes, to Caa2 (LGD5, 78%) from B2
     (LGD4, 54 %);

   * Speculative Grade Liquidity Rating, to SGL-4 from SGL-3

Ratings affirmed:

   * Secured guaranteed term loan, B2 (LGD2, 26%)

Holdings' obligations are guaranteed by American Axle and vice
versa.

The last rating action was on October 20, 2008, when American
Axle's ratings were placed under review.

American Axle & Manufacturing, Inc., headquartered in Detroit, MI,
is a world leader in the manufacture, design, engineering and
validation of driveline systems and related components and
modules, chassis systems, and metal formed products for light
truck, SUV's and passenger cars.  The company has manufacturing
locations in the USA, Mexico, the United Kingdom, Brazil, China
and Poland. The company reported revenues of $3.2 billion in 2007.


AMERICA CAPITAL: Court Okays First Amended Disclosure Statement
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
approved on Dec. 9, 2008, the disclosure statement filed by
America Capital Corp. in support of its First Amended Plan of
Liquidation.

The Court has set Jan. 19, 2009, as the last day for filing and
serving objections to confirmation of the Plan.  A hearing to
consider confirmation of the Plan is set for Jan. 28, 2009.

As reported in the Troubled Company Reporter on Dec. 2, 2008,
America Capital Corp. delivered to the U.S. Bankruptcy Court for
the Southern District of Florida on Nov. 18, 2008, its First
Amended Plan of Liquidation and First Amended Disclosure
Statement.

The Debtor related that holders of allowed claims would receive
higher recovery under the terms of the Plan than in a liquidation
under Chapter 7 of the Bankruptcy Code.

                          Plan Funding

America Capital's Amended Plan incorporates the plan of
Transcapital Financial Corporation.  American Capital has a 65.19%
ownership interest in TFC, which in turn owns 100% of the common
stock of Trasohio Savings Bank.

The Plan will be funded entirely by the TFC distribution and
recoveries, if any, in respect to certain litigation claims
against third parties.

        Classifications and Distributions Under the Plan

The classifications and distributions under the Plan are:

Class   Type of Claim                      Treatment
-----   -------------                      ---------
1      Allowed Other Priority Claims      Unimpaired

2      Allowed Secured Claim of           Impaired
        SunTrust with regard to the
        AMCAP Notes Claim, which is
        based upon amounts owed under
        the AMCAP Notes Judgment, the
        the AMCAP Notes and the
        Indenture

3      Allowed Unsecured Claims for       Unimpaired
        Senior Indebtedness

4      Allowed Unsecured Claims           Impaired

5      Allowed Equity Interests           Impaired

Allowed Administrative Claims, Priority Tax Claims, and U.S.
Trustee Fees will be paid in full.  Professional Fees and Expense
Claims, as allowed by the Court, will be paid in full on the
Effective Date.

Each holder of an Allowed Other Priority Claim under Class 1 will
be paid in full.

In full and complete satisfaction of any Class 2 Allowed Secured
Claim held by SunTrust with regard to the AMCAP Notes, SunTrust
will receive the Net TFC Distribution and the Net Proceeds of any
Litigation Claims, other than Avoidance Actions (after the
Liquidating Agent first funds the Senior Indebtedness
Distribution, to the extent applicable).  To the extent that it
may exist, any Deficiency Claim SunTrust may have with regard to
the AMCAP Notes Claim will be treated as a Class 4 Allowed
Unsecured Claim, but will not share in the Unsecured Carve-Out.

If the Court determines by final order that the Class 2 or Class 4
AMCAP Notes Claim is subordinate to the Allowed Unsecured Claims
for Senior Indebtedness under Class 3, if any, each Holder of an
Allowed Class 3 Claim will be entitled to receive its allocated
share of the Senior Indebtedness Reserve in full satisfaction of
its Allowed Claim.  Otherwise such Claims will be treated as Class
4 Claims.

Each Holder of an Allowed Class 4 Claim will be entitled to
receive such Holder's Pro Rata Share of (i) the Net TFC
Distribution following full and complete satisfaction of Allowed
Administrative Claims, Allowed Priority Tax Claims, and Allowed
Class 1 and 2 Claims (and in the case of SunTrust only, the net
amount after deducting the Senior Indebtedness Distribution from
the Pro Rata Share of the Net Distribution which Suntrust would
otherwise be entitled to receive; (ii) to the extent SunTrust does
have an Allowed Secured Claim, the Unsecured Carve-Out; provided
however that the SunTrust Deficiency Claim will not receive a
distribution from the Unsecured Carve-Out.

Holders of Allowed Equity Interests under Class 5 will not retain
or receive any property or Distribution under the Plan and all
Equity Interests will be cancelled and extinguished as of the
Effective Date.

Classes 2 and 4 are impaired and entitled to vote.  Equity
interests are deemed to reject.

Except as otherwise provided in the Plan, the Liquidating Agent
will act as disbursing agent under the Plan with respect to all
Distributions to holders of Claims and will make all Distributions
required to be distributed under the applicable provisions of the
Plan, provided however that the Debtor will make the Initial
Distribution under the Plan.

After the Effective Date, the Liquidating Agent will have the sole
authority to compromise and settle, otherwise resolve,
discontinue, abandon or dismiss all such Litigation Claims with
approval of the Court.

A full-text copy of America Capital Corp.'s First Amended Plan of
Liquidation is available for free at:

              http://researcharchives.com/t/s?357e

A full-text copy of the First Amended Disclosure Statement for
America Capital Corp.'s First Amended Plan of Liquidation is
available for free at:

              http://researcharchives.com/t/s?357f

                  About America Capital Corp.

Based in Miami, Florida, America Capital Corp. holds a 65.19%
interest in TransCapital Financial Corporation.  TransCapital
Financial is a holding and management company that conducted
substantially all of its operations through its wholly owned
subsidiary, Transohio Savings Bank, FSB.  Transohio Savings'
key activities as a savings and loans institution were banking and
lending and its primary lending activity was the originating and
purchasing of loans secured by mortgages on residential
properties.  Transohio Savings also endeavored to generate
residential loan originations through branch personnel and real
estate brokers.  Mobile home and home improvement loans were
generated through dealers and contractors and additionally,
Transohio Savings made construction loans generated by contractors
that usually extended to not more than one year in length.

America Capital filed for chapter 11 relief on June 19, 2006
(Bankr. S.D. Fla. Case No. 06-12645).  Cynthia C. Jackson, Esq.,
at Smith Hulsey & Busey, Jeffrey I. Snyder, Esq., Mindy A. Mora,
Esq., and Nicole Testa Mehdipour, Esq., at Bilzin Sumberg,
represents the Debtor as counsel.

When the Debtor filed for protection from its creditors, it listed
total assets of $52,005,000 and total debts of $207,170,268.

TransCapital Financial Corporation also filed for Chapter 11
relief on June 19, 2006 (Bankr. S.D. Fla. Case No, 06-12644).
Its Chapter 11 Plan was confirmed on Sept. 23, 2008.


ANTIOCH CO: U.S. Trustee Forms Five-Member Creditors Committee
--------------------------------------------------------------
The United States Trustee for Region 9 appointed seven creditors
to serve on an Official Committee of Unsecured Creditors for KB
Toys Inc. and its debtor-affiliates.

The creditors committee members are:

   1) Lisa Marie Drew
      8849 Ridgewood
      St. Joseph, MN 56374

   2) Heide Leigh Everett
      8553 Orange Road
      St. Joseph, MN 56374

   3) 2377 Commerce Boulevard, LLC
      Attn: Gary Gottschlich
      Gottschlich & Portune, LLP
      201 E. Sixth St.
      Dayton, OH 45402

   4) Kay Richter
      26352 Huckleberry Court
      Cold Spring MN 56320

   5) Walthall A&B, LP
      Attn: Jenny J. Hyun, Esq.
      c/o Weingarten Realty
      2600 Citadel Plaza Dr., Suite 300
      Houston, TX 77008

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense.  They may investigate the Debtor's business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

                           About Antioch

The Antioch Co. -- http://www.antiochcompany.com/-- which owns
St. Cloud-based Creative Memories.  The company was founded in
1926.  It consists of operating and business units located in
Ohio, Minnesota, Nevada, and Virginia.  The direct-selling
division encompasses the U.S. and Puerto Rico, Canada, Australia,
New Zealand, Germany, Japan and the United Kingdom, with expansion
planned in other European countries.  The Antioch employs more
than 1,090 people and manufactures, packages and markets more than
3,000 products to tens of thousands of independent sales
Consultants and retail dealers.  As reported in the Troubled
Company Reporter on Nov. 17, 2008, The Antioch Co. reached an
agreement with its lenders to restructure its debt.  To facilitate
this agreement, Antioch and six of its subsidiaries filed
voluntary petitions for Chapter 11 protection with the U.S.
Bankruptcy Court for the Southern District of Ohio.  In their
summary of schedules, the Debtors listed $66,388,321 in total
assets and $141,142,236 in total liabilities.


ASPECT SOFTWARE: Moody's Corrects December 9 Ratings Release
------------------------------------------------------------
Moody's Investors Service said that historic ratings for Aspect
Software Inc.'s loan facilities appeared incorrectly in the
December 9, 2008 press release.  The existing ratings for the
senior secured revolving facility and the first lien term loan
should have been listed as Ba3, LGD3, 32% and the second lien term
loan should have been listed as Caa1, LGD5, 85%.

The revised release states:

Moody's Investors Service placed Aspect Software Inc.'s ('Aspect')
ratings under review for possible downgrade.  The rating action
was driven by the company's declining operating performance and
the likely challenges the company will have in meeting financial
loan covenants.  The review will focus on the company's revenue,
profitability and free cash flow prospects for 2009 and beyond as
well as the company's prospects for meeting loan covenants.

These ratings have been placed under review:

   * Corporate family rating, B2

   * Probability of Default, B2

   * $50 million senior secured revolving facility due 2010 --
     Ba3, LGD3, 32%

   * $725 (original amount) million first lien term loan due 2011
     -- Ba3, LGD3, 32%

   * $385 million second lien term loan due 2012 -- Caa1, LGD5,
     85%

The recent decline in performance is primarily driven by declines
in new product sales which were largely driven by cutbacks and
delays in corporate spending.  The company continues to be a
leader in call center software communications systems and their
products continue to receive strong reviews from independent
industry analysts.  Maintenance revenues have held up well year to
date and are likely to continue to hold up in 2009.  Despite
difficulties in top line performance, Aspect continues to produce
strong levels of free cash flow (8.5% free cash flow-to-debt for
the LTM period ended Q3'08) Free cash flow will likely decline in
2009 however as Aspect's customer base reins in spending.

Moody's most recent rating action was in May 2006 when Moody's
changed the ratings outlook to negative reflecting the additional
debt the company took on to fund a special dividend payment.
Aspect's ratings were assigned by evaluating factors Moody's
believes are relevant to the credit profile of the issuer, such as
i) the business risk and competitive position of the company
versus others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk.  These
attributes were compared against other issuers both within and
outside of Aspect's core industry and Aspect's ratings are
believed to be comparable to those of other issuers of similar
credit risk.

Aspect Software Inc. is headquartered in Chelmsford,
Massachusetts.  The company develops, markets, licenses and
supports an integrated suite of contact center software
applications.


ATLANTIC MARINE: S&P Revises Outlook on 'B+' Rating to Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services has revised the outlook on
Atlantic Marine Holding Co. to positive from stable and affirmed
the ratings, including the 'B+' corporate credit rating.  "At the
same time, we also affirmed our 'BB-' bank loan rating on the
company's $230 million secured credit facility, which is being
amended to permit certain proposed acquisitions.  The '2' recovery
rating on the facility is unchanged," S&P said.

"The outlook revision reflects expectations of improving credit
protection measures in 2009 resulting from the proposed
acquisitions, as well as higher revenues and earnings at the
existing operations," said Standard & Poor's credit analyst
Christopher DeNicolo.  Jacksonville, Fla.-based Atlantic Marine
provides maintenance, repair, overhaul, and conversion (MROC)
services for military and commercial vessels, and manufactures and
assembles ships, ship modules, and subsections for ship owners and
other shipyards."

Atlantic Marine plans to acquire two small vessel repair
companies, Millennium Industrial and Marine Solutions Inc. and
Boston Ship Acquisition LLC (both unrated), for a total cost of
$31.5 million, including fees and expenses.  The purchase
agreements also include future earnout payments through 2012 if
certain profitability targets are met, which could total
$12.25 million for Millennium and $15 million for Boston Ship.
The acquisitions will be financed largely with equity from
Atlantic Marine's owner, J.F. Lehman & Co.  The two additions,
which are expected to contribute $35 million to $45 million of
revenue in 2009, will increase the company's presence in the
offshore and government market segments, and expand its geographic
reach to the Northeast by providing facilities in Boston and
Philadelphia.  The transaction is expected to close by the end of
the year.

The ratings on Atlantic Marine reflect weak, but improving, credit
protection measures; a small revenue base (about $300 million pro
forma for the proposed acquisitions), especially compared with
that of some competitors in the government sector; and growth that
is dependent on the more competitive and cyclical nonmilitary and
marine fabrication segments.  These factors are partly offset by
high barriers to entry in the marine repair industry and the
fairly good diversity of the vessels the company services.

Atlantic Marine currently operates out of three locations: Mobile,
Ala. (about 47% of revenues), on the Gulf Coast; Jacksonville,
Fla. (43%), on the Atlantic; and Naval Station Mayport near
Jacksonville (10%), which exclusively services the U.S. Navy.  The
company is able to service ships up to almost 1,000 feet in
length, including large cruise ships.

S&P said, "We expect moderate revenue growth in the intermediate
term largely caused by solid growth in the marine fabrication
business.  Sales in both the government and commercial segments
can be uneven as large vessels are serviced.  Revenues and
earnings in 2008 will be below our initial expectations because of
delays on a marine fabrication contract resulting from the
customer's not providing engineering information on schedule.
Operating margins (before depreciation) are good, at about 20%,
but are likely to decline slightly in 2009 because of lower
margins at some of the acquired operations and a higher proportion
of less-profitable marine fabrication work.  The company does not
publicly release financial data."

"Liquidity is likely to be adequate for near-term financial and
operational needs.  We expect the company to generate modest free
cash flow and have more than $20 million available for borrowings
under the $45 million revolving credit facility after letter-of-
credit usage.  We also expect capital expenditures to remain high,
but manageable, to make improvements to facilities.

"The outlook is positive.  Steady demand in key markets,
contributions from acquisitions, and satisfactory profitability
should result in good revenue and earnings growth and allow for
some debt reduction, thereby improving credit protection measures.
We could raise the ratings if this results in debt to EBITDA
dropping below 2.5x and funds from operations to debt rising above
25% on a sustained basis.  We could revise the outlook back to
stable if demand or profitability in growth areas, especially
marine fabrication, falls significantly below our expectations or
if leverage increases materially (debt to EBITDA above 3.5x) to
fund acquisitions or further dividends."


BALLY TECHNOLOGIES: Industry to Remain Under Pressure in 2009
-------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


BANC OF AMERICA: Fitch Holds Low-B Ratings on 2 Classes of Certs.
-----------------------------------------------------------------
Fitch Ratings has affirmed and assigned Ratings Outlooks to Banc
of America Securities LLC's (BACM) commercial mortgage pass-
through certificates, series 2003-1:

   -- $210.8 million class A-1 at 'AAA'; Outlook Stable;
   -- $506.2 million class A-2 at 'AAA'; Outlook Stable;
   -- Interest-only class XC at 'AAA'; Outlook Stable;
   -- Interest-only class XP-1 at 'AAA'; Outlook Stable;
   -- Interest-only class XP-2 at 'AAA'; Outlook Stable;
   -- $34.9 million class B at 'AAA'; Outlook Stable;
   -- $12.9 million class C at 'AAA'; Outlook Stable;
   -- $24.5 million class D at 'AAA'; Outlook Stable;
   -- $11.6 million class E at 'AAA'; Outlook Stable;
   -- $11.6 million class F at 'AAA'; Outlook Stable;
   -- $11.6 million class G at 'AAA'; Outlook Stable;
   -- $10.3 million class H to 'AA+'; Outlook Stable;
   -- $21.9 million class J to 'A'; Outlook Stable;
   -- $7.7 million class K at 'BBB+'; Outlook Stable;
   -- $6.5 million class L at 'BBB'; Outlook Stable;
   -- $6.5 million class M at 'BBB-'; Outlook Stable;
   -- $5.2 million class N at 'BB'; Outlook Stable;
   -- $3.9 million class O at 'B+'; Outlook Stable;
   -- $1.2 million class SB-A at 'AAA'; Outlook Stable;
   -- $4.5 million class SB-B at 'AAA'; Outlook Stable;
   -- $10.3 million class SB-C at 'AAA'; Outlook Stable;
   -- $3.1 million class SB-D at 'AAA'; Outlook Stable;
   -- $7.0 million class SB-E at 'AAA'; Outlook Stable;
   -- $5.5 million class ES-A at 'AA'; Outlook Stable;
   -- $4 million class ES-B at 'AA-'; Outlook Stable;
   -- $4.3 million class ES-C at 'A+'; Outlook Stable;
   -- $4.5 million class ES-D at 'A'; Outlook Stable;
   -- $3.1 million class ES-E at 'A-'; Outlook Stable;
   -- $3.1 million class ES-F at 'BBB+'; Outlook Stable;
   -- $3.1 million class ES-G at 'BBB'; Outlook Stable;
   -- $9.6 million class ES-H at 'BBB-'; Outlook Stable.

Fitch does not rate the $17.4 million class P, $16.2 million class
WB-A, $8.2 million class WB-B, $1.8 million class WB-C, or $1.8
million class WB-D certificates.

The rating affirmations are the result of sufficient credit
support to absorb Fitch expected losses on specially serviced
loans.  The Rating Outlooks reflect the likely direction of any
rating changes over the next one to two years.  As of the November
2008 distribution date, the pool's aggregate principle balance has
decreased 12.5% to $994.9 million from $1,032.7 million at
issuance.  In total, 26 loans (38.6%) have defeased, including the
shadow rated Sotheby's Building loan (11.7%) and Wellbridge
Portfolio loan (5.2%).

Fitch has identified seven loans of concern (3.0%) of which four
loans (2.1%) are currently in special servicing. Losses are
expected on all loans but will be absorbed by the unrated class P.

The largest Fitch Loan of Concern (0.9%) is secured by a 224 unit
multifamily property in Dallas, TX.  The loan transferred to the
special servicer in October 2008 and is 60 days delinquent.  The
servicer reported year-end (YE) 2007 debt service coverage ratio
(DSCR) was 0.75 times (x) with an occupancy of 85%.

The second largest Fitch Loan of Concern (0.8%) is secured by 13
office buildings in Scottsdale, AZ.  The loan transferred to the
special servicer in April 2008 because of the borrower's request
for relief in the form of waiving the defeasance requirement and
anticipated imminent default.  The property's occupancy has
declined to 16% and there is no effort to lease the vacant space.
The third largest Fitch Loan of Concern (0.5%) is secured by a
68,082 square feet (sf) retail property in Dallas, TX.  The
property's occupancy has declined to 74% as of June 2008 compared
to 93% at issuance.

Fitch reviewed the remaining shadow rated loan and the June 2008
rent roll: Emerald Square Mall (13.3%), the largest loan in the
pool that is secured by a regional mall in North Attleboro, MA.
The loan maintains its investment grade shadow rating due to
stable performance.  As of YE 2007 the property had a servicer
reported DSCR of 1.75x and an occupancy of 94% compared to 2.68x
and 93% at issuance.  The loan is divided into an A (9.6%) and a B
(2.6%) note: the A note, which has been contributed to the pooled
proceeds and the B-note, which is structured as stand-alone rake
classes.  It is an amortizing balloon loan and is scheduled to
mature in March 2013.


BANK OF AMERICA: Fitch Holds Low-B Ratings on 4 Classes of Certs.
-----------------------------------------------------------------
Fitch Ratings affirms Bank of America Commercial Mortgage Inc.
(BACM), series 2003-2, commercial mortgage pass-through
certificates, and assigns Rating Outlooks:

   -- $422.6 million class A-1A at 'AAA' Outlook Stable;
   -- $59.6 million class A-2 at 'AAA' Outlook Stable;
   -- $168.1 million class A-3 at 'AAA' Outlook Stable;
   -- $482.3 million class A-4 at 'AAA' Outlook Stable;
   -- Interest-only class XC at 'AAA' Outlook Stable;
   -- Interest-only class XP at 'AAA' Outlook Stable;
   -- $56.7 million class B at 'AAA' Outlook Stable;
   -- $21.0 million class C at 'AAA' Outlook Stable;
   -- $44.1 million class D at 'AAA' Outlook Stable;
   -- $23.1 million class E at 'AAA' Outlook Stable;
   -- $21.0 million class F at 'AA' Outlook Stable;
   -- $23.1 million class G at 'AA-' Outlook Stable;
   -- $21.0 million class H at 'A' Outlook Stable;
   -- $18.9 million class J at 'BBB+ Outlook Stable;
   -- $10.5 million class K at 'BBB-' Outlook Stable;
   -- $10.5 million class L at 'BB' Outlook Stable;
   -- $8.4 million class M at 'BB-' Outlook Stable;
   -- $8.4 million class N at 'B+ Outlook Negative;
   -- $4.2 million class O at 'B' Outlook Negative;
   -- $2.7 million class BW-A at 'AAA' Outlook Stable;
   -- $1.2 million class BW-B at 'AAA' Outlook Stable;
   -- $8.7 million class BW-C at 'AAA' Outlook Stable;
   -- $2.6 million class BW-D at 'AAA' Outlook Stable;
   -- $3.6 million class BW-E at 'AAA' Outlook Stable;
   -- $3.2 million class BW-F at 'AAA' Outlook Stable;
   -- $3.1 million class BW-G at 'AAA' Outlook Stable;
   -- $2.6 million class BW-H at 'AAA' Outlook Stable;
   -- $2.6 million class BW-J at 'AAA' Outlook Stable;
   -- $2.1 million class BW-K at 'AAA' Outlook Stable;
   -- $3.5 million class BW-L at 'AAA' Outlook Stable.

Fitch does not rate the $23.2 million class P or classes HS-A,
HS-B, HS-C, HS-D or HS-E.

Class A-1 is paid in full.

The Negative Outlooks are due to losses from one loan modification
and expected losses from a loan currently in special servicing.
The affirmations are due to sufficient credit enhancement due to
paydown and defeasance.

The remainder of the pool has exhibited stable performance and
minimal pay down. As of the November 2008 distribution date, the
pool's aggregate certificate balance has decreased 14.4% to $1.51
billion from $1.77 billion at issuance.  In total 27 loans
(30.54%) have defeased, including 1328 Broadway (7.9%), a shadow
rated and second largest loan in the pool.

The modified loan is secured by a 121-unit multifamily property in
Laramie, WY.  The coupon rate is 4.9% and maturity is August 2014.
The loan is performing under modification after the principal was
written down by $4,000,000.  Losses of $3,908,865 were realized by
the trust.  The loan currently in special servicing is secured by
a 561 unit multi-family property located in Irving, TX.  The loan
transferred to special servicer in October 2008 when the borrower
submitted a letter stating their intention to return the property
to the lender.  Currently, the foreclosure is set for early 2009
and the loan is 60 days delinquent.  Given the Negative Outlook
for the multi-family market in Texas, a preliminary Fitch value
indicates losses.  Per the March 31, 2008 servicer operating
statement analysis, the property was 95% occupied and had a debt
service coverage ratio (DSCR) of 0.92 times(x).

Hines-Sumitomo Portfolio (14.0%) and Newgate Mall (2.7%) maintain
their investment grade shadow ratings based on stable loan
performance.  The Hines Sumitomo portfolio, the largest loan in
the pool, is secured by three office properties, two of which are
located in New York, NY and the third in Washington, DC.  The
property located in Washington DC is undergoing a complete
redevelopment after the two largest tenants vacated at the end of
2007.  The property is essentially vacant except for a few retain
tenants.  Three additional floors are being added to the building
to bring the total square footage (sf) to 335,000 from 235,000.
Construction is expected to be completed in the second quarter of
2009.  Approximately 70,000 sf to 80,000 sf of the new building is
pre-leased.  Performance of the other two properties has improved
significantly since issuance and compensates for the majority of
the cash flow lost due to the redevelopment.  The loan is interest
only with a maturity date in 2013.  The senior pooled portion has
a coupon of 4.78% and the non-pooled portion has a coupon of 4.98%
Newgate Mall is a 724,619 square feet anchored retail center in
Ogden, UT.  Occupancy remained has declined to 86.1% from 94.7% at
issuance primarily due to the bankruptcy of Mervyn's.  Excluding
the Mervyn's cash flow, the property is still producing cash flow
in excess of expectations at issuance.  The loan is a balloon with
a coupon rate of 4.8% and maturity in 2010.

Only 0.8% of the pool matures in 2008 and no loans are scheduled
to mature in 2009. The weighted average coupon rate is 5.4%.
There are currently 11 (6.91%) Fitch loans of concern due to
declining DSCR or occupancy, and include the specially serviced
loan.


BEAR STEARNS: Fitch Affirms Low-B Ratings on 3 Classes of Certs.
----------------------------------------------------------------
Fitch Ratings affirms and assigns Rating Outlooks for Bear Stearns
Commercial Mortgage Securities Inc.'s mortgage pass-through
certificates, series 2002-PBW1:

   -- $142.2 million class A-1 at 'AAA'; Outlook Stable;
   -- $385.9 million class A-2 at 'AAA'; Outlook Stable;
   -- Interest-only classes X-1 and X-2 at 'AAA'; Outlook Stable;
   -- $26.5 million class B at 'AAA'; Outlook Stable;
   -- $31.1 million class C at 'AAA'; Outlook Stable;
   -- $8.1 million class D at 'AAA'; Outlook Stable;
   -- $9.2 million class E at 'AAA'; Outlook Stable;
   -- $13.8 million class F at 'AAA'; Outlook Stable;
   -- $13.8 million class G at 'AA'; Outlook Stable;
   -- $16.1 million class H at 'A'; Outlook Stable;
   -- $10.4 million class J at 'BBB+'; Outlook Negative;
   -- $3.5 million class K at 'BBB'; Outlook Negative;
   -- $5.8 million class L at 'BB'; Outlook Negative;
   -- $9.2 million class M at 'B+'; Outlook Negative;
   -- $2.3 million class N at 'B'; Outlook Negative.

Fitch does not rate the $13.8 million class P.

The rating affirmations reflect stable performance of the pool
since Fitch's last rating action.  Rating Outlooks reflect the
likely direction of any rating changes over the next one to two
years.  As of the December 2008 distribution date, the pool has
paid down 24.9%, to $691.5 million from $921.2 million at
issuance.  Nineteen loans (31.1%) are defeased, including Belz
Outlet Center (8.2%), the largest loan in the transaction which
has an investment grade shadow rating from Fitch.

Fitch has identified eighteen loans as Fitch Loans of Concern
(11.8%), including one specially serviced loan (1.6%).  The loan
transferred to the special servicer at the end of November 2008
due to payment default.  The specially serviced asset is a 300-
unit garden apartment complex in Stone Mountain, GA. The servicer
reported debt service coverage ratio (DSCR) is 0.70 times (x) as
of June 2008, compared to 1.39x at issuance.  The area has
suffered from declining economic conditions.

The largest Fitch loan of concern (3.3%) is secured by a 294,850
square foot (sf) office property located in Dayton, OH.  Although
servicer reported DSCR is 1.55x as of June 2008, occupancy has
declined to 65.9% from an occupancy of 82.8% at year-end (YE)
2007.

Fitch reviewed the two non-defeased shadow rated loans in
transaction, the RREEF Textron Portfolio (4.7%), and the CNL
Retail Portfolio (2.8%). Both loans maintain investment grade
shadow ratings due to stable performance.

The RREEF Textron Portfolio loan is secured by seven properties
located in various states, including three multifamily complexes,
one retail property, one office building, one industrial portfolio
and one industrial park.  The Fitch calculated weighted average
portfolio occupancy as of September 2008 was 93.6%, compared to
93.7% at issuance.  The pari passu A-Note loan in the trust is
split into a seven year tranche and ten year tranche, with the
seven year tranche scheduled to mature in 2009.

The CNL Retail Portfolio loan is secured by five single tenant
retail stores totaling 210,885-sf located in Florida and Virginia.
The properties continue to be 100% occupied by the five tenants
since issuance: Barnes & Noble, Sweetbay Supermarkets (f/k/a Kash
n' Karry), Bed Bath & Beyond, Best Buy and Borders Books. The loan
is scheduled to mature in 2012.

No loans are scheduled to mature in 2008.  Five loans (14.3%) are
schedule to mature in 2009, including four non-defeased loans
(6%).  Interest rates on these loans range from 5.95% to 8.04%,
with weighted average mortgage coupon at 6.92%.  Loan maturities
are concentrated in 2012 when 59.5% of the pool, excluding the
defeased loans, will mature.


BEAR STEARNS: S&P Junks Ratings on 4 Classes of Certificates
------------------------------------------------------------
Standard & Poor's Ratings Services lowered it ratings on 12
classes of asset-backed certificates issued by Bear Stearns Asset
Backed Securities Trust 2007-SD2.  "Concurrently, we affirmed our
ratings on eight classes from the same transaction," S&P said.

"The downgrades reflect the accelerated deterioration in the
collateral performance during the most recent five months.  As of
the November 2008 distribution period, approximately 76% of all
losses to date for each of the two loan groups, were incurred
during these five months.  During this period, loan group one
accumulated roughly $2.18 million of its $2.84 million total
losses to date or 1.92% of its original balance, while loan group
two accumulated approximately $10.68 million of its $13.92 million
total losses to date or 6.85% of its original balance.
Furthermore, as of the November 2008 distribution, total
delinquencies were 24.18% and 40.05% for loan groups one and two,
respectively.  As a result, the credit support to the downgrade
classes has diminished significantly, which prompted us to
downgrade classes II-M-4 and II-M-5 to 'D'.  The transaction is 20
months seasoned and loan groups one and two have 75.35% and 69.21%
of their original principal balances outstanding, respectively.

"The affirmations reflect adequate credit support to maintain the
ratings at their current levels.

"Subordination provides credit support for loan groups one and
two, while overcollateralization and excess interest provide
additional credit support for loan group two.

"The collateral for loan group one consists primarily of 30-year,
fixed-rate, fully amortizing first-lien mortgage loans.  The
collateral for loan group two consists primarily of 30-year,
adjustable-rate or hybrid, fully or negatively amortizing, first-
lien mortgage loans."

          RATINGS LOWERED

          Bear Stearns Asset Backed Securities Trust 2007-SD2
          Asset-backed certificates series 2007-SD2
                        Rating
          Class      To         From
          I-B-1      A          AA
          I-B-2      BB         A
          I-B-3      B          BBB
          I-B-4      CCC        BB
          I-B-5      CC         B
          II-A-1     BB         AAA
          II-A-2     BB         AAA
          II-M-1     B          AA+
          II-M-2     CCC        AA
          II-M-3     CC         A
          II-M-4     D          BBB
          II-M-5     D          BBB-

          RATINGS AFFIRMED

          Bear Stearns Asset Backed Securities Trust 2007-SD2
          Asset-backed certificates series 2007-SD2

          Class                                  Rating
          I-A-1A, I-A-1B, I-PO, I-A-2A, I-A-2B   AAA
          I-A-3A, I-A-3B, I-X                    AAA


BERKELEY PREMIUM: $2.75MM Sale to Pristine Bay Approved
-------------------------------------------------------
The Chapter 11 trustee for Berkeley Premium Nutraceuticals
Inc., won tentative approval from the U.S. Bankruptcy Court,
Southern District of Ohio (Cincinnati) to sell the company's
assets to its landlord for $2.75 million, Bloomberg News' Bill
Rochelle reported.

According to Mr. Rochelle, citing court records, no competing bids
were made against the $2.75 million offer.

As reported by the Oct. 13 issue of the Troubled Company Reporter,
citing Bloomberg News, the Chapter 11 Trustee asked for authority
from the U.S. Bankruptcy Court for the Southern District of Ohio
on Oct. 7, 2008, to sell its assets for at least $2.75 million to
Pristine Bay.  Pristine Bay, an affiliate of the Debtor's lender,
Interim Loan LLC, was selected the stalking horse bidder.

Berkeley filed for bankruptcy after a bank and mail fraud
conviction resulted in a judgment for $474 million.  Eleven
company officers including the owner pleaded guilty to crimes
following a government investigation that began in 2004.

Cincinnati, Ohio-based Berkeley Premium Nutraceuticals, Inc. --
http://www.berkeleypremiumnutraceuticals.com/-- makes dietary
supplements.  The Company filed for Chapter 11 bankrupt protection
on September 16, 2008 (Bankr. S.D. Ohio Case No. 08-15012).  Kim
Martin Lewis, Esq., and Patrick Burns, Esq., at Dinsmore & Shohl
LLP represent the Debtor in its restructuring efforts.  The Debtor
listed estimated assets between $1,000,000 to $10,000,000 and
liabilities between $100,000,000 to $500,000,000.


BLUE AND GREEN: Bankruptcy Case Ends; Creditors Recover 100%
------------------------------------------------------------
Thomas Lehman, partner at Tew Cardenas LLP, reported the closing
of the Blue and Green Diamond condominium bankruptcy case, with
all creditors receiving 100% payments for their claims.

"Unlike a typical real estate bankruptcy -- where the only
creditor to get money back is the construction lender -- our team
was able to generate more than $69 million from the sale of
assets," said Mr. Lehman, who represented developer New Florida
Properties throughout the five-year bankruptcy process.  "In this
case we were able to pay 100% to all the creditors and provide
funds to the condominium association for final completion of the
project.  It was a very successful result."

Construction on the Blue and Green Diamonds -- whose two 45-story
oceanfront condominium towers on Miami Beach were among the
tallest such buildings in the U.S. -- began in the late 1990s with
completion in 2000.  However, only about two-thirds of the
development's 630 residential units had been sold.

In November 2001, Union Planters Bank filed for foreclosure on a
$50 million plus construction loan, and three months later New
Florida Properties, led by Brazilian developer Mucio Athayde,
filed for Chapter 11 bankruptcy protection.

"At that time, the project was under a dark cloud," said Mr.
Lehman.  "Brokers wouldn't sell units, the subcontractors would
not work on the Blue and Green Diamonds and the construction
lender would not provide funds to complete the work.  By filing
for Chapter 11 bankruptcy, we were able to address all those
issues in a transparent manner, and put the entire project in a
more positive light."

Under an agreement approved by U.S. Bankruptcy Judge Jay Cristol,
the reorganized project emerged from bankruptcy, supported by a
team of professionals working with Lehman to maximize the asset's
values.  That included selling the remaining 136 units, along with
20 cabanas, 14 parking spaces and 130 storage lockers.

Those sales provided funds for 100% payouts to all creditors, with
a $3.6 million final return to the original developer.  After
sending out those checks in November, the bankruptcy case was
finally closed by Judge Cristol.

"It took five years, but in the end every creditor of the Blue and
Green Diamond bankruptcy case was paid in full," said Barry
Mukamal, a partner at Rachlin LLP who was named plan administrator
on the case in 2006.  "So were the subcontractors, the real estate
brokers and the condominium associations.  In this case, achieving
a consensus on a long-term strategy to sell the units at 'retail'
to individual buyers proved highly beneficial to all the
creditors."

"While every bankruptcy is unique," Mr. Mukamal concludes.  "I
believe we have established the foundation of a formula that can
be of tremendous benefit for these types of workouts."

                      About Tew Cardenas

Tew Cardenas LLP -- http://www.tewlaw.com-- is a full service law
firm with offices in Miami, Tallahassee and Washington, D.C.  The
firm represents, advises, and advocates for a wide array of
clients, including domestic and international companies, federal,
state and local governments, as well as foreign governments and
individuals.  The Tew Cardenas team possesses vast experience
across industries including aviation, communications,
construction, energy, financial services, food & beverage,
hospitality, real estate development, retail and pharmaceutical.

                 About Blue & Green Diamond

Blue & Green Diamond Condominium is located at Miami Beach,
Florida.  Its condominiums are located on over 500 feet of
beachfront and are currently the tallest ocean front condos in the
USA.


BOWNE & CO: S&P Cuts Credit Rating to B & Junks Debentures Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Bowne & Co. Inc. to 'B' from 'BB-'.  "We also lowered
the issue-level rating on Bowne's convertible subordinated
debentures to 'CCC+' (two notches lower than the 'B' corporate
credit rating), from 'B'.  These ratings remain on CreditWatch,
where they were placed with negative implications Nov. 12, 2008.
The recovery rating on the subordinated debt remains at '6',
indicating our expectation of negligible (0% to 10%) recovery for
lenders in the event of a payment default," S&P said.

"The ratings downgrade reflects the rapid deterioration in Bowne's
operating performance and, consequently, the potential for a near-
term covenant violation," said Standard & Poor's credit analyst
Michael Listner.

"Although our expectations for Bowne's operating performance have
always factored in the highly cyclical nature of revenue and
profitability for the firm, the current operating trends have
exceeded our earlier expectations given the extent of the credit
freeze and its impact on transaction volume.  We anticipate that
transactional revenue will continue to be depressed into 2009,
putting further pressure on Bowne's profitability and credit
measures.

"The continued CreditWatch listing reflects our concern over the
possibility of a near-term violation of the total leverage
covenant and an expectation for heightened leverage and limited
liquidity during the first half of 2009, as the company typically
uses cash for working capital purposes in the first half of the
year and repays debt in the latter half.  In resolving the
CreditWatch listing, Standard & Poor's will monitor the progress
and resulting terms of an expected required amendment to the
company's senior credit facility.  Ratings may be lowered further
in the near term if a resolution is not put in place to address
pressures on the capital structure and covenant compliance."


BOYD GAMING: Fitch Says Industry to Remain Under Pressure in 2009
----------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


BRIAN TUTTLE: Court Approves Sale of Interest in Jonal Mortgage
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
approved Brian R. Tuttle and Merja A. Tuttle's emergency motion
permitting TLH-Kram Corp, a related company of the Debtors to sell
and transfer its partial interest in the Jonal Mortgage to AMKBJ
Partners Ltd. LLP for $537,491, in order to provide the funds for
certain obligations of the Debtors and TLH BOS Corp.

TLH-Kram Corp. will distribute the funds to the Debtors, as sole
beneficiaries of the Trust, which is a shareholder of TLH-Kram
Corp.  Brian and Merja Tuttle shall make the required capital
contribution to North Port Land Investment, L.L.L.P.

$500,000 of the sale proceeds will be treated as a Capital
Contribution by the Debtor entity TLH-BOS Corp., the general
partner of North Port Land.  The remaining $37,491 from the sale
of the Jonal Mortgage shall be paid to Brian and Merja Tuttle to
fund living expenses.

Brian R. Tuttle and Merja A. Tuttle of West Palm Beach, Florida,
are real estate developers.  They filed for chapter 11 bankruptcy
on October 15, 2008, before the U.S. Bankruptcy Court for the
Southern District of Florida (Case No. 08-25253).  Debtor-
affiliates that filed separate Chapter 11 petitions are Tuttle
Land Holding Corp. (Case No. 08-25255) and TLH-BOS Corp.
(Case No. 08-25256).  Judge Paul G. Hyman Jr. presides over the
case.  Robert C. Furr, Esq., and Alvin S. Goldstein, Esq., at Furr
& Cohen, serves as the Debtors' bankruptcy counsel.  In their
schedules, the Debtors listed total assets of $69,338,910 and
total debts of $23,605,666.

On Oct. 15, 2008, the Tuttles filed with the Court a Chapter 11
statement of current monthly income, disclosing $18,333 in total
current monthly income, including $14,000 net monthly income from
business operations.


BROOKE CAPITAL: Founder Files Bankruptcy Trying to Save Firm
------------------------------------------------------------
Robert Orr filed personal bankruptcy after pledging his family
fortune trying to save Brooke Capital Corporation, an insurance
agency franchisor and a public company, and Aleritas Capital
Corp., a finance company specializing in insurance lending and a
public company of which Orr's family indirectly owned
approximately 29%.

Aleritas loaned money to insurance agencies, then packaged the
loans as securities and sold them to Wall Street investors.  To
enhance the credit quality of these securities, Brooke Capital
provided franchising and consulting services to insurance agency
borrowers on behalf of the Wall Street investors.

The refusal of Wall Street investors to pay servicing fees for the
consulting and collateral preservation services provided by Brooke
Capital caused the insurance agency franchisor to collapse from
cash flow shortages and the finance company to collapse from
deterioration of loan quality because the insurance agency
franchisor could no longer afford to provide these critical
services to the finance company's borrowers.

The meltdown of these companies accelerated when a special master,
who was appointed by the court to maintain the status quo until
Brooke Capital's differences with Wall Street investors were
resolved, instead liquidated assets and released insurance agency
franchisees from their agreements.

With Brooke Capital in bankruptcy and Aleritas in liquidation, it
is unlikely Orr will see repayment of approximately $12,000,000
that his family loaned to the companies in recent months.  Another
result of the companies' collapse is that Orr will be required to
repay approximately $25,000,000 of debt that was personally
guaranteed by him as part of Orr's efforts in recent months to
turn around the companies.

"Last year I retired as a company executive, but I came out of
retirement in April of this year to help Aleritas, and later
Brooke Capital, through difficult economic times," Mr. Orr said.
"With the benefit of hindsight, I regret returning as a company
executive because the price paid by my family has been
extraordinary.  I have endured financial ruin and unwarranted
personal attacks," he said

"As an executive taking over management of these troubled
companies just prior to their collapse and as an executive
responsible for making the difficult decisions required to
turnaround these troubled companies, I have become the target of
attack for anyone with a complaint," Mr. Orr continued.

Last year, as a result of merging wholly owned Brooke Capital and
wholly owned Aleritas into existing public companies, most of the
stock of Aleritas and Brooke Capital became directly, or
indirectly, owned by public investors.  "When Aleritas and Brooke
Capital became public companies last year, I believed that I could
slow down after a lifetime of 60-70 hour weeks," Mr. Orr related.
"I believed that my involvement as an executive was not required
because, as an investor in public companies, my investment would
be protected by the management accountability demanded by
independent directors, exchange listing provisions, sophisticated
investors and auditors," Mr. Orr added.

After Aleritas became a public company, Orr did not serve as a
director or officer.  After Brooke Capital became a public
company, Orr remained as a director but relinquished all executive
responsibilities.

Mr. Orr said, "In March of this year it became apparent that I
was naive to rely on public company safeguards to protect my
investment in Aleritas."  Aleritas had become financially troubled
primarily as a result of increased loan losses, a failed
refinancing transaction and rapid expansion in a difficult
economy.  In response to a request from Aleritas' largest
purchaser of loan participations, Orr asked for an emergency
meeting of the Aleritas board on March 31, 2008 to demand the
changes required for a turnaround of the company, including the
appointment of Orr as interim chief executive officer of Aleritas
until the company found a capable replacement with turnaround
experience.

Over the next several weeks, Mr. Orr announced to investors:

   a) a $24 million charge for loan losses and credit impairments,

   b) suspension of the company's growth plans; and

   c) the proposed steps to complete the failed refinancing
      transaction.

During the five months that Mr. Orr and Michael Hess were Aleritas
executives, many unpopular and difficult decisions were
implemented which they believed were required to turn the company
around, including:

   a) working with Brooke Capital to mitigate loan losses
      despite previous tensions between Aleritas and Brooke
      Capital;

   b) negotiating with recalcitrant Wall Street investors for
      payment of servicing fees to assure Brooke Capital's
      continued assistance;

   c) negotiating with lenders to remedy liquidity concerns; and

   d) reducing the amounts of collateral pledge and loan payment
      discrepancies existing on March 31st when Orr and Hess
      became Aleritas executives.

Especially difficult were the decisions made to reduce collateral
pledge and loan payment discrepancies because this involved
decisions regarding payment priorities and collateral quality.

Mr. Orr and Hess first required the completion of conversion to a
new loan accounting process to better track and control collateral
pledges and loan payments.  Although discrepancies were
significantly reduced after March 31st, the resolution of those
discrepancies existing on March 31st sometimes evolved into
different discrepancies as Orr and Hess tried to fairly resolve
these issues.

Brooke Capital has historically provided critical assistance to
franchise agency borrowers as part of a servicing agreement with
Wall Street investors.  During August Brooke Capital experienced
significant cash flow problems because Wall Street investors
refused to pay past due servicing fees owed to Brooke Capital.

Apparently frustrated that they could not collect past due
servicing fees and resolve the company's cash flow problems,
Brooke Capital's chief executive officer, chief operating officer,
senior vice president and general counsel resigned.  Mr. Orr
reluctantly stepped in on August 19th to fill the management void
in Brooke Capital and aggressively pursued collection of past due
servicing fees during the ensuring month that he served as Brooke
Capital's chief executive officer.

Allegations of funds misappropriation leveled against Orr by
WallStreet investors were primarily the result of Brooke Capital
offsetting the past due amounts it was owed from Wall Street
investors by the amounts that Brooke Capital owed to Wall Street
investors.  These offsets were approved by Brooke Capital's legal
counsel and summarized in a court motion.  The dispute between
Wall Street investors and Brooke Capital culminated in the
appointment of a special master on Sept. 17, 2008, and the
resulting collapses of Aleritas and Brooke Capital.

Mr. Orr summarized by saying, "Until the meltdown caused by Wall
Street investors, I was confident that Aleritas and Brooke Capital
were taking the difficult steps required to turn around the
companies.  As a result, my family did not sell any stock -- until
it was seized by the creditors for repayment of a company loan --
and instead purchased approximately $2,000,000 in additional stock
during 2008.  I believed in Aleritas and Brooke Capital."

                        About Brooke Corp.

Headquartered in Kansas, Brooke Corp. (NASDAQ: BXXX) --
http://www.brookebanker.com-- is an insurance agency and finance
company.  The company owns 81% of Brooke Capital.  The majority of
the company's stock was owned by Brooke Holding Inc., which, in
turn was owned by the Orr Family.  A creditor of the family, First
United Bank of Chicago, was foreclosed on the BHI stock.  The
company's revenues are generated from sales commissions on the
sales of property and casualty insurance policies, consulting,
lending and brokerage services.

Brooke Corp. and its affiliate, Brooke Capital Corp. filed for
Chapter 11 protection on Oct. 28, 2008 (Bankr. D. Kan. Case No.
08-22786).  Angela R Markley, Esq., is the Debtors' in-house
counsel.  The Debtors listed assets of $512,855,000 and debts of
$447,382,000.


BROOKSTONE INC: S&P Affirms B Rating & Revises Outlook to Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Merrimack, N.H.-based Brookstone Inc. to negative from stable. "At
the same time, we affirmed all ratings on the company, including
the 'B' corporate credit rating," S&P said.

"The revision reflects the severe cutback in consumer spending and
our expectations for performance to be below expectations for the
fourth quarter," said Standard & Poor's credit analyst David
Kuntz.


CBRE REALTY: S&P Keeps Low-B Ratings on 3 Classes on WatchNegative
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on three
classes from CBRE Realty Finance CDO 2007-1 Ltd. (CBRE 2007-1) on
CreditWatch with negative implications.  The ratings on nine other
classes from the transaction remain on CreditWatch with negative
implications, where they were originally placed Aug. 18, 2008.

According to S&P: "The additional CreditWatch placements follow
further analysis of the transaction after we re-valued the
Riverton Apartments.  The property is a 1,230-unit apartment
complex in Harlem, N.Y.  It is encumbered by a whole loan that is
the sixth-largest loan ($225 million, 3%) in the CD 2007-CD4
transaction. Three percent of the CBRE 2007-1 asset pool is a
related mezzanine loan totaling $25 million.  The mezzanine debt
is secured by the equity interests in the Riverton borrower, and
is subordinate to the whole loan.  According to the Oct. 31, 2008,
trustee report, the mezzanine debt was reported as an impaired
asset.  Standard & Poor's recently re-valued the Riverton
property, which has contributed to six rating actions on CD 2007-
CD4.  The property has experienced a substantial valuation decline
of 52% since issuance.

"We placed our ratings on nine classes from CBRE 2007-1 on
CreditWatch negative in August because of concerns with the
Riverton loan.  At that time, the whole loan in CD 2007-CD4 was
transferred to the special servicer after the borrower gave notice
it would not be able to make its Sept. 1, 2008, debt service
placement.  [The] CreditWatch placements reflect the recent
property valuation.

"We will resolve the CreditWatch negative placements on CBRE
2007-1 when we complete our analysis of the transaction, which
will follow discussions with the collateral manager, CBRE Realty
Finance Management LLC.  Since the transaction is an actively
managed collateralized debt obligation (CDO), it is possible that
the transaction's pool composition could change in a manner that
offsets some of the credit deterioration prompted by the Riverton
mezzanine loan."

          RATINGS PLACED ON CREDITWATCH NEGATIVE

          CBRE Realty Finance CDO 2007-1 Ltd.
          Commercial real estate CDO

                        Rating
          Class    To              From
          -----    --              ----
          A-2      AAA/Watch Neg   AAA
          A-2R     AAA/Watch Neg   AAA
          B        AA/Watch Neg    AA

          RATINGS REMAINING ON CREDITWATCH NEGATIVE

          CBRE Realty Finance CDO 2007-1 Ltd.
          Commercial real estate CDO

          Class   Rating
          -----   ------
          C       A+/Watch Neg
          D       A/Watch Neg
          E       A-/Watch Neg
          F       BBB+/Watch Neg
          G       BBB/Watch Neg
          H       BBB-/Watch Neg
          J       BB+/Watch Neg
          K       BB/Watch Neg
          L       BB-/Watch Neg


CD 2007-CD4: S&P Lowers Ratings on Six Classes of Securities
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on six
classes of commercial mortgage-backed securities from CD 2007-CD4
and removed them from CreditWatch with negative implications,
where they were placed Aug. 18, 2008.  "In addition, we affirmed
our ratings on 16 classes from the same transaction," S&P said.

Standard & Poor's revised valuation for the Riverton Apartments
(Riverton) loan is the primary driver of the downgrades.  Standard
& Poor's valuation for this loan has declined substantially since
issuance of the securities.  The downgrades also reflect our
concerns with loans that have reported low debt service coverage
(DSC), or will have low DSC when their initial interest-only (IO)
periods end.

"The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.

     RIVERTON CREDIT CONCERNS

"The Riverton loan is the sixth-largest loan in the pool ($225
million, 3%) and is secured by a 1,230-unit apartment complex in
Harlem, N.Y.  In addition to the senior debt, the equity interests
of the borrower are secured by a $25 million mezzanine loan (3%)
that serves as collateral in the CBRE Realty Finance CDO 2007-1
Ltd. transaction.  The master servicer for the loan, Wachovia Bank
N.A. (Wachovia), transferred the loan to CWCapital on Aug. 8,
2008, after the borrower gave notice that it would not be able to
make the Sept. 1, 2008, debt service payment.

"The borrower was late with the monthly payment as of the December
2008 remittance report, but the loan was less than 30-days
delinquent.  As of the December remittance, the loan had
additional advances, including interest thereon, totaling
$2.3 million.  CWCapital and the borrower had agreed on terms for
a loan modification, but have not executed a modification to date.
CBRE Realty Finance Management LLC, the mezzanine lender, has
scheduled a foreclosure sale on Feb. 20, 2009.

"Standard & Poor's revaluation of the Riverton loan incorporated
the borrower's financial statements for Dec. 31, 2007, and
Sept. 30, 2008, the property's December 2008 rent roll, current
market occupancy and rental rate information, and estimates for
conversion costs and recapture rates.  Standard & Poor's adjusted
valuation has declined 52% from its level at issuance.  The
drivers of the valuation decline include:

     -- Operating expenses are 24% higher than we anticipated at
        issuance.  Utilities, administrative costs, security,
        repairs, and maintenance are the main contributors to the
        increased expenses.

     -- The weighted average rent at market-rent units is 22%
        lower than we anticipated, due in part to current economic
        conditions.

     -- The number of units that have been converted to market is
        less than we expected.  This is due to a lack of units
        obtained through a tenant buyout program. There are
        currently 142 units at market rents, compared with our
        assumption at issuance of 263 units.

     -- The items noted above have affected the property's current
        net cash flow.  They have reduced projected net cash flows
        below the levels we used in our valuation process, which
        utilized a 10-year discounted net cash flow.  The
        resulting terminal valuation is 52% lower than our
        estimate at issuance.  The combination of the size of the
        loan in the transaction and the large decline in our value
        were the drivers of the negative rating actions on CD
        2007-CD4.

"In addition to the value decline, a $19 million debt service
reserve funded at issuance by Stellar Management (Stellar) and
Rockpoint Group LLC, the borrowers of the Riverton loan, has been
depleted.  Currently, there are also two letters of credit
totaling $5.0 million outstanding. Additionally, the loan's base
building reserve account has been r educed to $3.7 million from
$15.6 million at issuance, and the unit replacement reserve
account has been reduced to $7.1 million, down from $13.6 million
at issuance.

"Standard & Poor's met with representatives from Stellar and
CWCapital on Sept. 23, 2008, to tour the property.  Since
purchasing the Riverton Apartments in 2005, Stellar has installed
a fence around the property, installed video camera surveillance,
repaved the walkways, and moved the management office to a new
location.  Excluding the continued renovation of recaptured units,
Stellar is not planning any additional major renovations to the
property.

     ADDITIONAL CREDIT CONCERNS

"In addition to our concerns with the Riverton loan, we have
credit concerns with several loans that have reported low DSC
($850.6 million, 13%), loans that will have a low DSC when their
initial IO periods end ($54.7 million, 1%), and the four other
specially serviced assets (excluding Riverton).  Given current
market conditions, Standard & Poor's is placing particular focus
on loans that have experienced net cash flow declines, and we are
increasing our expected losses for loans that we determine to be
at increased risk of default.  Details for such loans are:

     -- There are 45 loans ($991.0 million) that have or will have
        a reported low DSC.  The loans that reported low DSC have
        experienced a weighted average decline in DSC of 40% since
        issuance.  Twenty-eight ($305.1 million) of the 45 loans
        are credit concerns.  Excluding the Riverton loan, the
        largest loan that is a credit concern is the Lowes at Lake
        Las Vegas ($117.0 million, 2%).  The IO loan is secured by
        a 493-room full-service resort hotel in Henderson, Nev.
        The trailing-12-month revenue per available room (RevPAR)
        at the property for the period ending Oct. 31, 2008, was
        $103.77, down from $126.84 for the comparable period in
        2006.  The performance at the property is down primarily
        because of fewer group bookings and increased
        cancellations. Wachovia reported a DSC of 0.37x for the
        period ending June 30, 2008.

     TRANSACTION SUMMARY

"As of the December 2008 remittance report, the collateral pool
consisted of 378 loans with an aggregate trust balance of $6.6
billion, unchanged since issuance.  Wachovia Bank N.A. reported
financial information for 94% of the pool.  All of the servicer-
provided information was full-year 2007 data or interim 2008 data.
Standard & Poor's calculated a weighted average DSC of 1.47x for
the pool, up from 1.36x at issuance, on an as-is basis.  Four
loans ($13.6 million, 0.2%) in the pool are delinquent and are
currently with CWCapital. The transaction has not experienced any
losses to date.

"The top 10 exposures have an aggregate outstanding balance of
$2.5 billion (38%) and a weighted average DSC of 1.66x, down from
1.89x at issuance.  Standard & Poor's reviewed property
inspections provided by the master servicer for five of the assets
underlying the top 10 exposures in the transaction.  One property
was characterized as "excellent," while the remaining properties
were characterized as "good."

"The credit characteristics of the Ala Moana Portfolio, 9 West
57th Street, and One World financial Center loans are consistent
with those of investment-grade rated obligations.  Standard &
Poor's adjusted values for these loans are comparable to the
valuations at issuance.

"Standard & Poor's stressed the loans on the servicer's watchlist
and the loans with credit issues as part of its analysis.  The
resultant credit enhancement levels support the lowered and
affirmed ratings."

     RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE

     CD 2007-CD4
     Commercial mortgage pass-through certificates series 2007-CD4

               Rating
     Class    To     From      Credit enhancement (%)
     -----    --     ----      ----------------------
     E        A      A+/Watch Neg                7.65
     F        A-     A/Watch Neg                 6.89
     G        BBB+   A-/Watch Neg                5.89
     H        BBB    BBB+/Watch Neg              4.76
     J        BB+    BBB/Watch Neg               3.76
     K        BB-    BBB-/Watch Neg              2.63

     RATINGS AFFIRMED

     CD 2007-CD4
     Commercial mortgage pass-through certificates series 2007-CD4

     Class   Rating   Credit enhancement (%)
     -----   ------   ----------------------
     A-1     AAA                       30.09
     A-2A    AAA                       30.09
     A-2B    AAA                       30.09
     A-SB    AAA                       30.09
     A-3     AAA                       30.09
     A-4     AAA                       30.09
     A-1A    AAA                       30.09
     A-MFX   AAA                       20.06
     A-MFL   AAA                       20.06
     A-J     AAA                       11.16
     B       AA+                       10.53
     C       AA                         9.15
     D       AA-                        8.27
     X-P     AAA                         N/A
     X-C     AAA                         N/A
     X-W     AAA                         N/A

     N/A -- Not applicable.


CENTURY ALUMINUM: S&P Puts 'BB-' Rating on Negative CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'BB-' corporate credit rating, on Monterey, Calif.-based
Century Aluminum Inc. on CreditWatch with negative implications.

"The CreditWatch listing reflects our concern that the company's
operating results and liquidity will be significantly affected by
the recent steep decline in aluminum prices," said Standard &
Poor's credit analyst Marie Shmaruk.

"Although Century's operations in Iceland are relatively low cost,
they are unlikely to fully offset losses that we expect will be
generated at the company's higher cost domestic operations.
Moreover, its liquidity position, consisting of $169 million in
cash and about $88 million available on its $100 million revolving
credit facility at Sept. 30, 2008, may be stretched if low prices
persist.

"In resolving the CreditWatch listing, we will evaluate
management's plans for dealing with the extremely difficult
operating conditions, including plans, if any, to restructure its
business and to enhance its liquidity.


CHASE COMMERCIAL: Fitch Affirms Low-B Ratings on Two Classes
------------------------------------------------------------
Fitch Ratings upgrades Chase Commercial Mortgage Securities
Corp.'s, commercial mortgage pass-through certificates, series
1998-2, and assigns Outlooks:

   -- $57.1 million class F to 'A+' from 'BBB+'; Stable Outlook;
   -- $12.7 million class G to 'A-' from 'BBB-'; Stable Outlook.

Fitch also affirms and assigns outlooks to these classes:

   -- Interest-only class X at 'AAA'; Stable Outlook;
   -- $51.8 million class C at 'AAA'; Stable Outlook;
   -- $72.9 million class D at 'AAA'; Stable Outlook;
   -- $19 million class E at 'AAA'; Stable Outlook;
   -- $22.2 million class H at 'B+'; Stable Outlook;
   -- $9.5 million class I at 'B-'; Negative Outlook.

The $13.3 million class J is not rated by Fitch. Classes A-1, A-2,
and B have paid in full.  The Rating Outlooks reflect the likely
direction of any ratings changes over the next one or two years.
The upgrades are due to additional paydown of 41 loans (30.6%)
since Fitch's last rating action.  Two loans, representing 17.1%
of the pool remain defeased.  As of the November 2008 distribution
date, the transaction's aggregate principal balance has paid down
79.6% to $258.5 million from $1.27 billion at issuance.

Four loans remain in the pool with 2008 maturities or anticipated
repayment dates. The largest loan (49.3%), secured by a retail
property in Towson, MD, had an anticipated repayment date in
November 2008.  The property continues to show improved
performance since issuance. The servicer reported mid-year 2008
DSCR is 1.88x and the property is 95% occupied.  The sponsor,
General Growth Properties, recently indicated to the servicer they
do not intend to pay the loan off and will continue paying debt
service.  The second largest loan (5.8%) with a 2008 maturity date
is secured by a parking facility in Atlanta, GA.  The borrower was
granted a three-month extension to pay off the existing debt, with
the new maturity occurring in January 2009.  Fitch considers this
loan a loan of concern and will continue to monitor the borrower's
progress in obtaining financing.  The remaining two loans with
2008 maturities (6.9%) are currently being specially serviced.

The largest specially serviced loan (4.2%) is secured by a 99,260
square foot (sf) industrial building in Edison, NJ.  The property
is 100% occupied by Revlon through 2013.  The loan became
specially serviced after the borrower was unable to complete
refinancing.  The special servicer is currently working with the
borrower to prepare the property for sale.  Based on Fitch's
preliminary projections of value using the mid-year 2008 servicer
reported net operating income and a stressed cap rate, losses are
not expected at this time.

The remaining specially serviced loan (2.6%) is secured by a
154,375 sf office building in Bingham Farms, MI.  The loan
transferred to the special servicer in May 2008 due to imminent
default as the borrower indicated the loan would not pay off at
maturity, July 1, 2008.  The property's occupancy has declined as
a result of tenant vacancies and a weak market.  The borrower
continues to market the vacant space at the property.  As of
November 2008, the property was 42% occupied. Losses are expected.
The transaction is concentrated by loan size with the largest loan
and top-five largest loans representing 49.3% and 76.5% of the
pool, respectively.  Additionally, geographic concentrations have
increased, with 49.3% of the pool located in MD, 5.8% in GA, and
5.2% in MA. The current ratings reflect these concentrations.


CHASE MORTGAGE: Moody's Lowers Ratings on 2006 & 2007 Jumbo Deals
-----------------------------------------------------------------
Moody's Investors Service has downgraded 256 tranches and
confirmed 4 tranches from 12 Jumbo transactions issued by Chase in
2006 and 2007.

The collateral backing these transactions consists primarily of
first-lien, fixed and adjustable-rate, prime Jumbo mortgage loans.
The actions are triggered by higher than anticipated rates of
delinquency, foreclosure, and REO in the underlying collateral
relative to currently available credit enhancement levels. The
actions listed reflect Moody's revised expected losses on the
Jumbo sector announced in a press release on September 18th, and
are part of Moody's on-going review process.

Moody's final rating actions are based on current ratings, level
of credit enhancement, collateral performance and updated pool-
level loss expectations relative to current level of credit
enhancement. Moody's took into account credit enhancement provided
by seniority, cross-collateralization, time tranching, and other
structural features within the Aaa waterfalls. General loss
estimation methodology is outlined.

Complete rating actions are:

   -- Issuer: Chase Mortgage Finance Trust 2006-S1

Cl. A-1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-P Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust 2007-S6

Cl. 1-A1 Certificate, Downgraded to A3, previously on 12/7/07
Assigned to Aaa

Cl. 1-A2 Certificate, Downgraded to B1, previously on 12/7/07
Assigned to Aa1

Cl. 1-A3 Certificate, Downgraded to Ba3, previously on
12/7/07Assigned to Aaa

Cl. 1-AX Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A1 Certificate, Confirmed at Aaa, previously on 12/7/07
Assigned to Aaa

Cl. 2-A2 Certificate, Downgraded to Ba3, previously on 12/7/07
Assigned to Aa1

Cl. 2-A3 Certificate, Downgraded to Ba2, previously on 12/7/07
Assigned to Aaa

Cl. 2-AX Certificate, Confirmed at Aaa, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-P Certificate, Downgraded to B1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. M Certificate, Downgraded to Caa3, previously on 10/6/08 Aa2
Placed Under Review for Possible Downgrade

Cl. B-1 Certificate, Downgraded to Ca, previously on 10/6/08 A2
Placed Under Review for Possible Downgrade

Cl. B-2 Certificate, Downgraded to Ca, previously on 10/6/08 Baa2
Placed Under Review for Possible Downgrade

Cl. B-3 Certificate, Downgraded to C, previously on 10/6/08 Ba2
Placed Under Review for Possible Downgrade

Cl. B-4 Certificate, Downgraded to C, previously on 10/6/08 B2
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2006-S2

Cl. 1-A1 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A3 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A5 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A6 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A7 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A8 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A9 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A10 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A11 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A12 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A13 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A14 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A15 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A16 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A17 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A18 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A19 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-AX Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A3 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A5 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A6 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A7 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A8 Certificate, Confirmed at Aaa, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-AX Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-P Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-M Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2006-S3

Cl. 1-A1 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A2 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A3 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A4 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A5 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A6 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A7 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-AX Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A1 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A2 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A3 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-AX Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-P Certificate, Downgraded to Baa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-M Certificate, Downgraded to B2, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2006-S4

Cl. A-1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-15 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-18 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-19 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-20 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-21 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-22 Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-23 Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-X Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-P Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-M Certificate, Downgraded to B3, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2007-A3

Cl. 1-A1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A2 Certificate, Downgraded to Baa3, previously on 10/6/08
Aa1 Placed Under Review for Possible Downgrade

Cl. 1-A3 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A5 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A6 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A7 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A8 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A9 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A10 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A11 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A12 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A13 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A14 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A15 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A16 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A17 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A18 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A19 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A20 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A1 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A2 Certificate, Downgraded to Baa3, previously on 10/6/08
Aa1 Placed Under Review for Possible Downgrade

Cl. 2-A3 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A4 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A5 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A6 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A7 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A8 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A9 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A10 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A11 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A12 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A13 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A14 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A15 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A16 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A17 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A18 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A19 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A20 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A21 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A22 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A23 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A1 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A2 Certificate, Downgraded to Baa3, previously on 10/6/08
Aa1 Placed Under Review for Possible Downgrade

Cl. 3-A3 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A4 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A5 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A6 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A7 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A8 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A9 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A10 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A11 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A12 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A13 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A14 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A15 Certificate, Downgraded to Aa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A16 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A17 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A18 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A19 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A20 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 3-A21 Certificate, Downgraded to Aa2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. M Certificate, Downgraded to B2, previously on 10/6/08 Aa2
Placed Under Review for Possible Downgrade

Cl. B-1 Certificate, Downgraded to Caa1, previously on 10/6/08 A2
Placed Under Review for Possible Downgrade

Cl. B-2 Certificate, Downgraded to Caa2, previously on 10/6/08
Baa2 Placed Under Review for Possible Downgrade

Cl. B-3 Certificate, Downgraded to Caa3, previously on 10/6/08 Ba2
Placed Under Review for Possible Downgrade

Cl. B-4 Certificate, Downgraded to Ca, previously on 10/6/08 B2
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2007-S1

Cl. A-1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to Ba1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Aa3, previously on 2/7/07
Assigned to Aaa

Cl. A-10 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to Ba2, previously on 2/7/07
Assigned to Aaa

Cl. A-12 Certificate, Downgraded to Ba2, previously on 2/7/07
Assigned to Aaa

Cl. A-13 Certificate, Downgraded to Ba1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-X Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-P Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-M Certificate, Downgraded to Caa2, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2007-S2

Cl. 1-A1 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A2 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A3 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A4 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A5 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A6 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A7 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A8 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A9 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-AX Certificate, Downgraded to A2, previously on 3/16/07
Assigned to Aaa

Cl. 2-A1 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 2-A2 Certificate, Downgraded to Baa2, previously on 3/16/07
Assigned to Aaa

Cl. 2-A3 Certificate, Downgraded to Baa3, previously on 3/16/07
Assigned to Aaa

Cl. 2-AX Certificate, Downgraded to Baa3, previously on 3/16/07
Assigned to Aaa

Cl. A-P Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-M Certificate, Downgraded to Caa2, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2007-S3

Cl. 1-A-1 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A-2 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A-3 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-5 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-6 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-7 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-8 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-9 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-10 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-11 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-12 Certificate, Downgraded to A3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-13 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-14 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-15 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-16 Certificate, Downgraded to A3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-17 Certificate, Downgraded to A3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. I-A-18 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-19 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. I-A-20 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A-21 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. I-A-22 Certificate, Downgraded to Baa3, previously on 5/11/07
Assigned to Aaa

Cl. I-A-23 Certificate, Downgraded to Baa3, previously on 5/11/07
Assigned to Aaa

Cl. I-A-24 Certificate, Downgraded to Baa3, previously on 5/11/07
Assigned to Aaa

Cl. 1-AX Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A1 Certificate, Downgraded to Ba1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-AX Certificate, Downgraded to Ba1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-P Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-M Certificate, Downgraded to B2, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

Cl. M-1 Certificate, Downgraded to Caa2, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2007-S4

Cl. A-1 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Ba3, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to Baa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Baa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Ba3, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-12 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-15 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-18 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-19 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-X Certificate, Downgraded to Baa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. A-P Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2007-S5

Cl. 1-A1 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A2 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed Under Review for Possible Downgrade

Cl. 1-A19 Certificate, Downgraded to Baa3, previously on 6/29/07
Assigned to Aaa

   -- Issuer: Chase Mortgage Finance Trust, Series 2006-A1

Cl. 1-A1 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A2 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A3 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 1-A4 Certificate, Downgraded to Ba1, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

Cl. 1-AX Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A1 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A3 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 2-A4 Certificate, Downgraded to Ba1, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

Cl. 2-AX Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A1 Certificate, Confirmed at Aaa, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 3-A2 Certificate, Downgraded to Ba1, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

Cl. 4-A1 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed Under Review for Possible Downgrade

Cl. 4-A2 Certificate, Downgraded to Ba1, previously on 10/6/08 Aa1
Placed Under Review for Possible Downgrade

   -- Issuer: Chase Mortgage Finance Trust Series 2007-A1

Cl. 1-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 1-A6 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 2-A4 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 3-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 4-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 5-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 6-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 7-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 8-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 9-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 10-A2 Certificate, Downgraded to Aa1, previously on 3/16/2007
Assigned to Aaa

Cl. 11-A1 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-A2 Certificate, Downgraded to B1, previously on 3/16/2007
Assigned to Aa1

Cl. 11-A3 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-A4 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-A5 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-A6 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-A7 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-A8 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-F1 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-F5 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-F8 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-L1 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-L5 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-L8 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-M1 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-M5 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-M8 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-S1 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-S5 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 11-S8 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 12-A1 Certificate, Downgraded to Aa3, previously on 3/16/2007
Assigned to Aaa

Cl. 12-A2 Certificate, Downgraded to A1, previously on 3/16/2007
Assigned to Aaa

Cl. 12-A3 Certificate, Downgraded to A1, previously on 3/16/2007
Assigned to Aaa

Cl. 12-A4 Certificate, Downgraded to B1, previously on 3/16/2007
Assigned to Aa1

Cl. 12-F3 Certificate, Downgraded to A1, previously on 3/16/2007
Assigned to Aaa

Cl. 12-L3 Certificate, Downgraded to A1, previously on 3/16/2007
Assigned to Aaa

Cl. 12-M3 Certificate, Downgraded to A1, previously on 3/16/2007
Assigned to Aaa

Cl. 12-S3 Certificate, Downgraded to A1, previously on 3/16/2007
Assigned to Aaa

Cl. 13-A1 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 13-A2 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 13-A3 Certificate, Downgraded to B2, previously on 3/16/2007
Assigned to Aa1

Cl. 13-F2 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 13-L2 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 13-M2 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Cl. 13-S2 Certificate, Downgraded to A3, previously on 3/16/2007
Assigned to Aaa

Moody's calculates estimated losses for Jumbo RMBS in a two-stage
process. First, serious delinquencies are projected through late
2009, primarily based upon recent historical performance. These
projected delinquencies are converted into projected losses using
lifetime roll rates (the probability of transition to default)
averaging 40% for 60-day delinquencies, 75% for delinquencies
greater than 90 days, and 90-100% for foreclosure or REO, and
severity assumptions averaging 35%.

The second step is to determine losses for the remaining life of
the deal, following the projection period. Depending on a deal's
performance, including delinquency, default, and prepayment rates,
as well as collateral characteristics, such as loan type (fixed or
adjustable), or loan-to-value ratios and geographic concentrations
of remaining current loans, Moody's assumes varying degrees of
slowing in the loss rate (which is measured by loss-to-
liquidation) for the remaining life of the deal. Typical degrees
of slowing in loss rate after late 2009 range from no slowing at
all to 40% slowing. To take an example, a deal with very poor
early performance due to relatively high loan-to-value ratios and
dropping regional home values would be expected to see markedly
high delinquency and loss rates for the next year. But the high
rate of losses may be expected to slow afterwards, as economic
factors and real estate values begin to stabilize, and a slowing
of 20-40% may be used in the projection. On the other hand, a deal
with stronger early performance that is demonstrating relative
resiliency in the current market environment may not be expected
to have high losses in the near-term, but may be expected to
sustain a similar level of losses for the life of the deal, as the
pool continues to be subject to factors that have more
historically driven prime performance such as borrower life
events, unemployment, and so on.

Loss estimates are subject to variability and, as a result,
realized losses could ultimately turn out higher or lower than
Moody's current expectations. Moody's will continue to evaluate
performance data as it becomes available and will assess the
pattern of potential future defaults and adjust loss expectations
accordingly if necessary.


CHASEFLEX TRUST: S&P Lowers Ratings on 25 Classes of Certificates
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 25
classes of mortgage pass-through certificates from ChaseFlex Trust
Series 2005-2, a residential mortgage-backed securities (RMBS)
transaction backed by U.S. prime jumbo mortgage loan collateral.

According to S&P: "The downgrades reflect our opinion that
projected credit support for the affected classes is insufficient
to maintain the previous ratings, given our current projected
losses. As of the Nov. 25, 2008, distribution, total and severe
delinquencies (as a percentage of the current mortgage pool
balance) and cumulative realized losses (as a percentage of the
original mortgage pool balance) were:

   Total           Severe          Cumulative
   delinquencies   delinquencies   realized losses
   -------------   -------------   ---------------
   9.11%           5.16%           0.15%

"Our lifetime projected losses, as a percentage of the original
mortgage pool balance, for this U.S. RMBS transaction are 1.88%.
The remaining projected lifetime losses and the current credit
support for the senior classes, as a percentage of the current
mortgage pool balance, as well as the multiple of current credit
support (CCS) to the remaining projected lifetime losses (RPL),
are:

   Remaining          Current          Multiple
   projected losses   credit support   CCS/RPL
   ----------------   --------------   --------
   3.22%              8.83%            2.746

"Because the senior classes had a multiple of current credit
support to the remaining projected lifetime losses that was under
3.0 but at least 2.5, we lowered our ratings on these classes to
'A'.

"Subordination provides credit support for this transaction.  The
underlying collateral for this deal consists of four pools of
fixed-rate U.S. prime jumbo mortgage loans.  The loans are secured
primarily by first liens on one- to four-family residential
properties with original terms to maturity (from the first
scheduled payment due date) of no more than 30 years.

"Standard & Poor's will continue to monitor the RMBS transactions
it rates and take rating actions, including CreditWatch
placements, when appropriate."

     RATINGS LOWERED

     ChaseFlex Trust Series 2005-2

                                   Rating
     Class      CUSIP         To             From
     -----      -----         --             ----
     1-A1       16165TAX1     A              AAA
     1-A2       16165TAY9     A              AAA
     2-A1       16165TAZ6     A              AAA
     2-A2       16165TBA0     A              AAA
     3-A1       16165TBB8     A              AAA
     3-A2       16165TBC6     A              AAA
     3-A3       16165TBD4     A              AAA
     3-A4       16165TBE2     A              AAA
     4-A1       16165TBF9     A              AAA
     4-A2       16165TBG7     A              AAA
     4-A3       16165TBH5     A              AAA
     5-A1       16165TBJ1     A              AAA
     5-A3       16165TBL6     A              AAA
     5-A4       16165TBM4     A              AAA
     5-A5       16165TBN2     A              AAA
     5-A6       16165TBP7     A              AAA
     5-A7       16165TBQ5     A              AAA
     5-A8       16165TBR3     A              AAA
     A-P        16165TBT9     A              AAA
     A-X        16165TBS1     A              AAA
     M          16165TBV4     BB             AA
     B-1        16165TBW2     B              A
     B-2        16165TBX0     CCC            BBB
     B-3        16165TBY8     CCC            BB
     B-4        16165TBZ5     CC             CCC


CHECKSMART FINANCIAL: Moody's Confirms Junk Ratings; Outlook Neg.
-----------------------------------------------------------------
Moody's Investors Service confirmed the Corporate Family rating of
Caa2, the senior secured first lien term loan and first lien
revolving credit facility rating of Caa2, and the senior secured
second lien term loan rating of Ca for Checksmart Financial
Company.  The rating outlook is negative.

The rating action reflects Moody's view that Ohio House Bill 545,
which is expected to become effective by 12/31/08, will likely
have a material effect on Checksmart's revenues, earnings, cash
flows, and financial condition, including its longer-term ability
to service the debt taken on in the company's 2006 leveraged
buyout transaction.  However, given the company's current cash
resources and anticipated cash flow, Moody's believes a near-term
payment default is unlikely, and therefore the ratings were
confirmed.

The legislation substantially alters the payday lending business
in Ohio by capping the annual interest rate, lowering the maximum
amount of a loan, extending the minimum life of a loan, capping
the number of loans a consumer could obtain per year, and
mandating that consumers who take more than three payday loans in
a period of 90 days attend a financial literacy program.

As a result of this legislation, Checksmart may be forced to close
or materially revamp the business plan of its 98 stores in Ohio,
the company's home state.  (Checksmart has 253 total stores in 11
states in the US.)

The negative outlook reflects the uncertainty related to the
company's ability to alter its business and financial plan in Ohio
in response to House Bill 545.

These ratings were confirmed with a negative outlook:

  * Corporate Family Rating -- at Caa2
  * Senior Secured First Lien Revolving Credit Facility -- at Caa2
  * Senior Secured First Lien Term Loan -- at Caa2
  * Senior Secured Second Lien Term Loan -- at Ca

The last rating action on Checksmart was on June 4, 2008, when
Moody's downgraded the ratings and left the ratings under review
for possible downgrade.

Based in Dublin, Ohio, Checksmart is a provider of payday lending
loans and offers check cashing services and other financial
products.  The company operates 256 stores in eleven states.


CHESAPEAKE CORP: Hires Hunton & Williams to Advise on Bankruptcy
----------------------------------------------------------------
Bloomberg News' Tiffany Kary reports that Chesapeake Corp. has
hired Hunton & Williams as legal counsel to explore a bankruptcy,
a person familiar with the situation said.

According to Bloomberg, Joe Vagi, a spokesman for Chesapeake, said
he couldn't comment.  The report also notes that Eleanor Kerlow, a
spokeswoman for Richmond-based Hunton & Williams, didn't
immediately return a call for comment.  Alvarez & Marsal, the
restructuring adviser hired in August, can't comment on whether
Chesapeake is close to seeking bankruptcy, spokeswoman Rebecca
Baker said, the report says.

On December 11, 2008, Chesapeake said it signed an amendment and
extension of the forbearance agreement with the required lenders
under its $250-million Senior Secured Credit Facility.  Under the
agreement, the lenders agreed that they will forbear from
exercising their rights and remedies against the company and its
subsidiaries in respect of (i) existing financial condition
covenant defaults and (ii) the company's failure to pay the
interest payment that was due on November 15, 2008, to the holders
of its 10-3/8% Senior Subordinated Notes under the Senior Secured
Credit Facility until December 23, 2008, subject to the terms and
conditions of the forbearance agreement.

Chesapeake entered into the forbearance agreement in November.
The initial period of the lenders' forbearance continued until
December 10, 2008.  At that time, Andrew J. Kohut, Chesapeake
president and chief executive officer, said the company was
engaged in discussions with other parties-in-interest on possible
alternative financial restructuring opportunities. The company had
earlier disclosed that it was in negotiations with an ad hoc
committee of holders of its subordinated debt.

On October 1, 2008, the holders of more than 70% of the principal
amount of the company's outstanding 10-3/8% Sterling-denominated
senior subordinated notes due in 2011 and 7% euro-denominated
senior subordinated notes due in 2014 had formed an ad hoc
committee and retained a third party financial advisor.

According to Mr. Kohut, the December 26 extension "provides us
additional time to finalize arrangements for the short- and long-
term financial liquidity and financial restructuring we need."

Mr. Kohut also said, "We continue to make good progress on our
restructuring plans with our lenders and with a group of holders
of our subordinated debt."

The agreement of the lenders is subject to compliance by the
company and the other Chesapeake subsidiary borrowers under the
Senior Credit Facility with the terms and conditions set forth in
the forbearance agreement.  In addition, the lenders have reserved
the right to terminate the forbearance agreement immediately in
the event that the Subordinated Note Holders accelerate payment of
the 10-3/8% Senior Subordinated Notes and pursue any remedy
against Chesapeake on account of any payment default related
thereto.

The company expects to be able to comply with the requirements of
the forbearance agreement, but if it is not able to do so, or the
forbearance agreement terminates, the lenders under the Senior
Secured Credit Facility could require immediate payment of all
amounts outstanding under the Senior Secured Credit Facility,
terminate their commitments to lend under the Senior Secured
Credit Facility and, pursuant to cross-default provisions in many
of the instruments that govern other outstanding indebtedness of
the company, immediate payment of other outstanding indebtedness
could be required, all of which would have a material adverse
effect on the business, results of operations and financial
condition of the company and would raise substantial doubts about
its ability to continue as a going concern.

Chesapeake Corporation protects and promotes the world's great
brands as a leading international supplier of value-added
specialty paperboard and plastic packaging.  Headquartered in
Richmond, Va., the company is one of Europe's premier suppliers of
folding cartons, leaflets and labels, as well as plastic packaging
for niche markets.  Chesapeake has 44 locations in Europe, North
America, Africa and Asia and employs approximately 5,400 people
worldwide.

As of September 30, 2008, Chesapeake's consolidated balance sheets
showed $936.4 million in total assets, including $340.7 million in
current assets; and $937.1 million in total liabilities, including
$469.2 million in current liabilities, resulting in $500,000 in
stockholders' deficit.


CHESAPEAKE CORP: S&P's Rating on 7% Senior Notes Tumbles to 'D'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue-level ratings
on Chesapeake Corp.'s 7% euro-denominated senior subordinated
notes due 2014 and industrial revenue bonds due 2019 to 'D' from
'CC'.

According to S&P: "The ratings action stems from our assessment
that Chesapeake's ability to service its interest payment
obligations under these debt instruments, including the Dec. 15,
2008, coupon payment on the euro-denominated notes, was likely
blocked by the secured lenders on Chesapeake's $250 million
revolving credit facility.  This is due to the company's
distressed financial situation, which was caused by deteriorating
cash flow and high leverage.  A payment default has not occurred
relative to the legal provisions of the notes.  However, we
consider a default to have occurred when a payment related to an
obligation is not made, even if a grace period exists, if the
nonpayment is a function of the borrower being under financial
stress -- unless we are confident that the payment will be made in
full during the grace period.

"Chesapeake recently announced the extension of the forbearance
agreement with lenders under its revolving credit facility to
Dec. 23, 2008, under which the lenders have agreed to forbear from
exercising their rights and remedies against the company in
respect to existing financial covenant defaults and the company's
failure to pay the interest payment on the sterling-denominated
subordinated notes.

"Chesapeake continues to review financial and strategic
alternatives, which can include a recapitalization, refinancing,
restructuring, or reorganization of its obligations."


CHRYSLER LLC: Moody's Says Likely Scenario Is Government Support
----------------------------------------------------------------
The U.S. Government will likely provide immediate stopgap
financing to bridge the major American auto companies until a more
complete agreement can be reached early in 2009, says Moody's
Investors Service in a new report that outlines the three mostly
likely bailout and bankruptcy scenarios for government help to
Ford, GM and Chrysler.

"We think it's most likely that a prepackaged bankruptcy filing
coupled with government financial assistance will be needed to
restructure the Big Three," said Moody's Senior Vice President
Bruce Clark, a co-author of the report.  "The government will also
probably offer support by providing or guaranteeing debtor-in-
possession or DIP financing, and bondholder losses would probably
be less than 75% in this scenario."

In the wake of the domestic auto manufacturing companies' request
for urgent financial assistance from the federal government, the
Moody's report describes three bailout and bankruptcy scenarios
for Detroit, assesses the probabilities of these scenarios, and
examines the extent of likely losses in each of the scenarios for
auto manufacturer debt holders.  It then assesses the broader
implications of the three scenarios, across the larger economy
generally and specifically on 10 important financial and
industrial sectors.

These include auto-part manufacturers, captive finance companies,
car rental companies, banks, auto dealers, steel, chemicals,
rental car fleet securitizations, state and local governments,
dealer floorplan securitizations, auto loan/lease securitizations,
and rental car fleet securitizations.

"A prepackaged bankruptcy might be the best approach to current
problems, but achieving timely agreement from a broad range of
creditors would be highly difficult, especially given the critical
funding status of GM and Chrysler," said Mr. Clark.

While the analyst and his Moody's colleagues give a prepackaged
bankruptcy filing coupled with government financial assistance a
70% likelihood of coming to pass, they assign a 25% probability of
a government bailout without a near-term automaker bankruptcy.

"Under this less-likely scenario, a comprehensive bailout package
is agreed to that enables the automakers to restructure without
any bankruptcy filings during 2009.  The degree of economic
disruption and direct financial loss for investors would be
contained, at least in the short term," said Mr. Clark.
"Bondholder losses would be the least in this scenario, although
there is a risk that such a reorganization would be inadequate,
and that at least one automaker might file for bankruptcy beyond
2009."

Given only a 5% likelihood, Moody's also considers the "freefall
bankruptcy" scenario without a prepackage plan and without
government involvement.  This would involve the most significant
disruption to the economy, including potential bankruptcies in
associated industries such as auto parts suppliers and auto
dealers.

"The negative consumer sentiment and erosion of franchise value
would make the reorganization process more complex for the
automakers and a Chapter 7 liquidation of at least one of the
automakers possible," said Clark. "Auto bondholder losses could be
in the 75-100% range in this scenario."

The report, "U.S. Automakers: Credit Implications of Three
Scenarios Have Broad Reach," is available at:

                    http://www/moodys.com/


CHRYSLER LLC: To Shut for a Month; Cerberus Won't Put More Funds
----------------------------------------------------------------
Lauren Pollock and Neal E. Boudette at The Wall Street Journal
report that Chrysler LLC will close its manufacturing operations
on Dec. 19, for at least a month.

Work will resume on Jan. 19, WSJ states, citing Chrysler.

According to WSJ, Chrysler is trying to align production and
inventory with U.S. market demand, pointing to tight consumer
credit conditions that lead to dealers losing 20% to 25% of their
sales volume.

            Temporary Halt on Loans for Dealers

WSJ relates that Chrysler Financial said that it may have to
temporarily stop loans that dealers use to purchase new cars.  A
wave of withdrawals from a fund used to pay off those loans led
Chrysler to consider stopping the loans, says the report.

Chrysler Financial's Vice Chairperson and CEO Thomas Gilman,
according to WSJ, said in a letter dated Dec. 12 that dealers have
been withdrawing up to $60 million from the fund daily.  Reminding
dealers that Cash Management Account funds lessen their wholesale
outstandings, Mr. Gilman said in the letter that on Dec. 1, he
informed dealers of changes in their fourth quarter dealer rewards
program and the extension of their 2% CMA bonus through June 30,
2009, and said that since then, there has been an unusual and
unprecedented re-advance on CMA.  Mr. Gilman stated that "the net
effect of a re-advancement is a decrease in our wholesale
capacity, which directly impedes our ability to provide funding
for additional wholesale outstandings.  Daily re-advance requests
are approaching $60 million, well above our historical daily
advances.  Since July, we've made CMA re-advancements of over a
billion and a half dollars.  These re-advancements have been
funded using our liquidity and have provided dealers with the
opportunity to use CMA as a normal course."

The daily rate of withdrawals has constrained wholesale and that
continued significant levels of withdrawals from CMA could force
Chrysler Financial to suspend wholesale funding, WSJ reports,
citing Mr. Gilman.

Mr. Gilman, according to WSJ, asked dealers not to re-advance CMA
funds beyond what is necessary for the operation of their
businesses, maintain current balance, or increase their
participation to take full advantage of the 2% CMA bonus that runs
through June 30, 2009.

The dealers explained that they began withdrawing money from CMA
due to fears on Chrysler's possible bankruptcy, WSJ relates.

Greg Bensinger and Mike Ramsey at Bloomberg News quoted Chrysler
Financial spokesperson Amber Gowen as saying, "Chrysler Financial
finances 75% of all vehicles shipped to U.S. dealers and will
continue to support our dealer body with uninterrupted wholesale
financing."

Chrysler Financial has been discussing with the U.S. Treasury
Department and the office overseeing the Troubled Asset Relief
Program on how to help "break the logjam" in the market for asset-
backed securities like car loans, and that may help the company
"in the form of liquidity to fund wholesale and retail loans,"
Bloomberg states, citing Mr. Gilman.

  Cerberus Explains Detachment in Chrysler's Financial Problem

Heidi N. Moore posted at WSJ's Deal Journal that Sen. Bob Corker
and Rep. Ginny Brown-Wait questioned helping out Chrysler while
parent Cerberus Capital Management refuses to step in to help prop
up the financially troubled company.

Citing a person familiar with the matter, Deal Journal relates
that Cerberus Capital officials said that the company has limited
partners that include stakeholders:

     -- pension funds,
     -- retirees, and
     -- endowments.

"No one is asking General Motors and Ford to pour their money in,
and Cerberus has the same shareholders as they do -- retirees,
pension plans and endowments," Deal Journal quoted the Cerberus
Capital officials as saying.

According to Deal Journal, Cerberus Capital has invested all it is
allowed to in Chrysler.  The $27 billion that Cerberus Capital
manages, Deal Journal says, isn't cash on hand.   The report
states that Cerberus Capital said it can't put more than 5% of its
assets into any one investment.

Cerberus would have to ask permission from its limited partners if
it wants to inject more money into Chrysler, and chances are slim
that the partners would agree to invest-and potentially lose money
on an auto maker so close to bankruptcy that it has hired
bankruptcy advisers, Deal Journal relates.

                       About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products.  The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K., Argentina,
Brazil, Venezuela, China, Japan and Australia.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 3, 2008,
Dominion Bond Rating Service downgraded the ratings of Chrysler
LLC, including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively.  All trends are Negative.  The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term.  With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.

As reported in the Troubled Company Reporter on Aug. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings on Chrysler
LLC, including the corporate credit rating, to 'CCC+' from 'B-'.

On July 31, 2008, TCR said that Fitch Ratings downgraded the
Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'.  The
Rating Outlook is Negative.  The downgrade reflects Chrysler's
restricted access to economic retail financing for its vehicles,
which is expected to result in a further step-down in retail
volumes.  Lack of competitive financing is also expected to result
in more costly subvention payments and other forms of sales
incentives.  Fitch is also concerned with the state of the
securitization market and the ability of the automakers to access
this market on an economic basis over the near term, given the
steep drop in residual values, higher default rates, higher loss
severity being experienced and jittery capital market.

As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating
Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC,
including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively.  All trends are Negative.  The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term.  With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.


CIRCUIT CITY: Court OKs Hilco/Gordon as Agents for GOB Sales
------------------------------------------------------------
According to Bloomberg News' Bill Rochelle, Circuit City Stores
Inc., won final approval from the U.S. Bankruptcy for the Eastern
District of Virginia to continue the employment of Hilco Merchant
Resources LLC and Gordon Brothers Retail Partners LLC as agents to
conduct going-out-of-business sales at the 154 stores that the
company began closing before the Nov. 10 Chapter 11 filing.

The Debtors sought and obtained the Court's authority to assume a
store closing agreement dated November 4, 2008, between:

   * Circuit City Stores, Inc., Circuit City Stores West Coast,
     Inc., and Circuit City's other direct and indirect United
     States subsidiaries; and

   * agent Hilco Merchant Resources, LLC, and Gordon Brothers
     Retail Partners, LLC.

Prior to their bankruptcy filing, the Debtors undertook efforts to
cut costs, streamline operations, and increase profitability, and
has determined to close certain underperforming or unprofitable
retail stores.  On November 5, 2008, the Agent officially began
store closing sales at 154 locations pursuant to the Store
Closing Agreement.

For the Debtors to conclude the Store Closing Sales as quickly
and efficiently as possible, and thereby minimize any unnecessary
administrative expenses, it is essential that they be permitted
to continue performing pursuant to the Store Closing Agreement,
including making all required payments, says Gregg M. Galardi,
Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in
Wilmington, Delaware, the Debtors' proposed counsel.  He notes
that failure to do so at this point would in all likelihood lead
only to unnecessary delay and expense that would in turn disrupt
the Debtors' restructuring efforts.

Mr. Galardi avers that the Agent has overseen the Store Closing
Sales and best knows how to maximize the value to be obtained by
the Debtors' bankruptcy estates during the remainder of the
sales.  Hence, he notes, locating alternate agents would be
extremely difficult because the Debtors already gave the other
major inventory liquidation firms an opportunity to submit
competing bids, and the firms declined.

Mr. Galardi points out that because the Store Closing Sales are
scheduled to conclude within the next four to five weeks, it is
unlikely that any agents could even be found at this stage of the
store closings, or undertake to continue the store closings on an
uninterrupted basis.  To enable the Debtors to obtain the best
possible debtor-in-possession financing terms, he tells the
Court, assumption of the Store Closing Agreement is warranted.

                 About Circuit City Stores, Inc.

Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments: domestic and international.

Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653).  InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.

Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel.  The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as
financial advisors. The Debtors' Canadian general restructuring
counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson
Consultants LLC is the Debtors' claims and voting agent.

The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.

(Circuit City Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


CIRCUIT CITY: Seeks to Keep Credit Card Deal w/ Chase Bank
----------------------------------------------------------
Circuit City Stores Inc., reached an agreement with credit-card
issuer Chase Bank USA N.A. that permits continuation of its
private-label and co-branded credit-card program, Bloomberg News
reports.

According to Bloomberg's Bill Rochelle, the settlement allows
Chase to set aside a $15 million reserve to cover chargebacks by
credit-card holders.  Chase, according to the report, will be
allowed to make chargebacks regardless of whether they relate
to purchases before or after the Chapter 11 filing.

The Court will consider approval of the settlement on Dec. 22

              About Circuit City Stores, Inc.

Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments: domestic and international.

Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653).  InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.

Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel.  The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as
financial advisors. The Debtors' Canadian general restructuring
counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson
Consultants LLC is the Debtors' claims and voting agent.

The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.


CITIGROUP MORTGAGE: S&P Cuts Ratings on 4 Cert. Classes to Low-B
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 10
classes of resecuritized real estate mortgage investment conduit
(re-REMIC) trust certificates from Citigroup Mortgage Loan Trust
2007-9.  "We also affirmed our 'AAA' rating on class III-A-8 from
the same transaction," S&P said.

"This re-REMIC transaction has three separate and distinct
structure groups; however, we rated classes from only two of them.
The affected classes have a current balance of approximately
$118.93 million, compared with an original total principal balance
of approximately $128.24 million at issuance.

"The downgrades reflect our belief that these classes may no
longer have sufficient credit enhancement within the underlying
deal structure to support the ratings at their previous levels.
Our belief is based on our projected lifetime losses on the
underlying transactions, which we derived from a loss curve that
utilizes the dollar amount of loans currently in the delinquency
pipelines of the underlying deals.

"The 'AAA' rating affirmation reflects our belief that this class
has adequate credit support at this rating level from subordinate
classes within the re-REMIC structure to protect it from projected
losses to the underlying classes."

Structure II is a resecuritization of two certificates from
Citigroup Mortgage Loan Trust 2007-6.  Structure III is a
resecuritization of two certificates from Wells Fargo Alternative
Loan 2007-PA2 Trust.  Certain combinations of classes III-A-4
through III-A-9 in structure III may be issued through an exchange
of class III-A-1.  The collateral for the underlying deals
consists of U.S. residential Alternative-A, fixed-rate, first-lien
mortgage loans.  Subordination is the sole means of credit support
in the underlying transactions.

          RATINGS LOWERED

          Citigroup Mortgage Loan Trust 2007-9
          Re-REMIC trust certificates

                                           Rating
          Class                      To              From
          -----                      --              ----
          II-A-1                     BB-             AAA
          II-A-2                     B+              AAA
          II-A-3                     B+              AAA
          III-A-1                    A-              AAA
          III-A-3                    B               AAA
          III-A-4                    A-              AAA
          III-A-5                    A-              AAA
          III-A-6                    A-              AAA
          III-A-7                    A-              AAA
          III-A-9                    A-              AAA

          RATING AFFIRMED

          Citigroup Mortgage Loan Trust 2007-9
          Re-REMIC trust certificates

          Class                     Rating
          -----                     ------
          III-A-8                   AAA


CONTINENTAL AIRLINES: Fitch Affirms Sr. Debt Rating at 'CCC/RR6'
----------------------------------------------------------------
Fitch Ratings has affirmed the debt ratings of Continental
Airlines, Inc. (NYSE: CAL):

   -- Issuer Default Rating (IDR) at 'B-';
   -- Senior Unsecured Debt at 'CCC/RR6'.

The Rating Outlook for CAL is Stable.

Ratings for CAL reflect the airline's high lease-adjusted
leverage, weak and volatile cash flow, as well as the airline
industry's ongoing vulnerability to air travel demand and fuel
price shocks.  The Stable Outlook captures the fact that the
dramatic pull-back in jet fuel prices since mid-summer has put CAL
in a position to deliver somewhat better free cash flow generation
in 2009.  This should allow the carrier to maintain liquidity at
or above current levels while meeting significant fixed financing
obligations.  Unrestricted cash balances, while pressured as a
result of weak operating cash flow in 2008, remain adequate in
light of the high degree of revenue uncertainty that CAL and its
principal airline competitors face as they operate in a period of
extreme macroeconomic stress and credit market tightness.

CAL is positioned to benefit from the collapse in crude oil and
jet fuel prices that has occurred over the last five months,
setting aside the near-term liquidity pressures tied to the
posting of cash collateral with fuel hedge counterparties.  Fitch
estimates that full-year 2009 cash savings of over $1.5 billion
could result from a decline in average jet fuel prices to between
$2.00 and $2.25 per gallon in 2009.  While modest hedges for early
2009 fuel consumption remain in place, most under-water derivative
positions will have expired by next summer.  This should allow CAL
to participate in the upside of significantly lower fuel prices
during a period of soft global energy demand.

The big question for CAL and the entire U.S. industry now is the
degree to which lower fuel costs will offset an anticipated
decline in global air travel demand, passenger yields and revenue
per available seat mile (RASM) as the world falls deeper into
recession.  Some of the typical cyclical pressure on unit revenue
has been mitigated by the capacity rationalization undertaken by
CAL in late summer -- a step that resulted from the unsustainable
fuel cost pressure being felt until mid-year.  The pull-down of
domestic scheduled capacity (approximately 11% in the fourth
quarter) has given CAL and the other big U.S. airlines a head-
start in adapting to a recessionary demand environment.
Nevertheless, Fitch will remain focused on monthly RASM trends
through much of 2009 as the full impact of the economic downturn
on both business and leisure travel demand becomes more clear.
Management has indicated recently that it is prepared to take
further decisive action on capacity if demand weakness
intensifies.  CAL has already taken steps to supplement narrowbody
aircraft retirements by pushing out some Boeing aircraft
deliveries previously planned for 2009.  The carrier now expects
to take 14 Boeing B737NG deliveries next year, and backstop
financing commitments for those aircraft are in place.

CAL's cash obligations for 2009 are manageable in comparison to
forecasted year-end 2008 unrestricted liquidity of $2.6 billion.
Scheduled debt maturities in 2009 total $488 million, and CAL now
expects to make the minimum cash pension funding requirement of
approximately $110 million next year.  This estimate incorporates
the likely impact of substantial declines in pension plan asset
values at Dec. 31, 2008, resulting from the financial market
collapse.

Given the maturity and pension funding profile for 2009, the need
for incremental access to debt capital markets (beyond the
committed aircraft financing) appears limited.  However, looking
ahead to 2010 and 2011, heavy scheduled debt maturities will
likely force CAL to access the credit markets if unrestricted cash
balances are to be maintained above critical levels (in the
$1.5 billion to $2 billion range).  Scheduled debt maturities for
2010 total $921 million, and $1.1 billion in debt comes due in
2011. An easing of credit market tightness over the next few
quarters therefore seems necessary if CAL is to avoid the need to
push aircraft capital commitments out further beyond 2009.

A revision in the Rating Outlook to Negative or a downgrade could
follow in 2009 if a precipitous decline in air travel demand
drives passenger unit revenue comparisons substantially negative
(5%-10% declines in year-over-year RASM).  Alternatively, negative
actions could result from another spike in jet fuel prices to
$3.00 per gallon or higher.  Fitch regards this scenario as
unlikely now given the state of the global economy and weak world
energy demand.


CREDIT SUISSE: Moody's Junks Ratings on 3 Classes of Certificates
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of seven classes
and affirmed 17 classes of Credit Suisse Commercial Mortgage
Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-
C2:

   -- Class A-1, $20,130,679, affirmed at Aaa; previously assigned
      Aaa on 5/29/07

   -- Class A-2, $318,000,000, affirmed at Aaa; previously
      assigned Aaa on 5/29/07

   -- Class A-AB, $64,298,000, affirmed at Aaa; previously
      assigned Aaa on 5/29/07

   -- Class A-3, $368,000,000, affirmed at Aaa; previously
      assigned Aaa on 5/29/07

   -- Class A-1A, $1,531,703,851, affirmed at Aaa; previously
      assigned Aaa on 5/29/07

   -- Class A-M, $229,773,000, affirmed at Aaa; previously
      assigned Aaa on 5/29/07

   -- Class A-MFL, $100,000,000, affirmed at Aaa; previously
      assigned Aaa on 5/29/07

   -- Class A-J, $272,064,000, affirmed at Aaa; previously
      assigned Aaa on 5/29/07

   -- Class A-X, Notional, affirmed at Aaa; previously assigned
      Aaa on 5/29/07

   -- Class B, $16,489,000, affirmed at Aa1; previously assigned
      Aa1 on 5/29/07

   -- Class C, $53,588,000, affirmed at Aa2; previously assigned
      Aa2 on 5/29/07

   -- Class D, $28,855,000, affirmed at Aa3; previously assigned
      Aa3 on 5/29/07

   -- Class E, $16,489,000, affirmed at A1; previously assigned A1
      on 5/29/07

   -- Class F, $28,855,000, affirmed at A2; previously assigned A2
      on 5/29/07

   -- Class G, $28,855,000, affirmed at A3; previously assigned A3
      on 5/29/07

   -- Class H, $45,344,000, affirmed at Baa1; previously assigned
      Baa1 on 5/29/07

   -- Class J, $37,100,000, affirmed at Baa2; previously assigned
      Baa2 on 5/29/07

   -- Class K, $32,977,000, downgraded to Ba1 from Baa3;
      previously assigned Baa3 on 5/29/07

   -- Class L, $8,244,000, downgraded to Ba3 from Ba1; previously
      assigned Ba1 on 5/29/07

   -- Class M, $8,245,000, downgraded to B1 from Ba2; previously
      assigned Ba2 on 5/29/07

   -- Class N, $16,488,000, downgraded to B2 from Ba3; previously
      assigned Ba3 on 5/29/07

   -- Class O, $4,123,000, downgraded to Caa1 from B1; previously
      assigned B1 on 5/29/07

   -- Class P, $12,366,000, downgraded to Caa2 from B2; previously
      assigned B2 on 5/29/07

   -- Class Q, $8,244,000, downgraded to Caa3 from B3; previously
      assigned B3 on 5/29/07

Moody's downgraded Classes K, L, M, N, O, P and Q due to the
overall decline in pool performance and increased dispersion of
loan credit quality.  Moody's weighted average loan to value ratio
is 121% compared to 113% at securitization.  Approximately 59% of
the pool has a LTV in excess of 120% compared to 27% at
securitization.

As of the November 18, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by less than 1% to
$3.29 billion from $3.30 billion at securitization.  The
Certificates are collateralized by 213 mortgage loans ranging in
size from less than 1% to 14% of the pool, with the top 10 loans
representing 45% of the pool.

The pool has not experienced any losses since securitization. The
pool's sixth largest loan, representing 2.8% of the pool ($93
million), is currently in special servicing.  The loan is the
Alliance SAFD-HC4 Loan, secured by 10 multifamily properties
located in Texas (9) and Florida (1).  The loan was transferred to
special servicing in October 2008 due to imminent default.  The
portfolio occupancy was 81% as of September 2008 compared to 86%
at securitization.  Moody's LTV is 161% compared to 115% at
securitization.

Thirty-three loans, representing 24% of the pool, are on the
master servicer's watchlist.  The watchlist includes loans which
meet certain portfolio review guidelines established as part of
the Commercial Mortgage Securities Association's monthly reporting
package.  As part of Moody's ongoing monitoring of a transaction,
Moody's reviews the watchlist to assess which loans have material
issues that could impact performance.

Moody's was provided with partial and full-year year 2007 and
partial-year 2008 operating results for 91% and 77% of the pool,
respectively.

The three largest loans represent 23% of the pool. The largest
loan is the Alliance SAFD-PJ Portfolio Loan ($475 million -- 14%),
which is secured by 32 Class B multifamily properties located in
Texas, Arizona, Florida, Georgia and Tennessee.  The portfolio was
89% occupied as of June 2008, the same as at securitization.
Performance has been adversely impacted by increased operating
expenses. The loan is interest only for the entire 10-year term.
Moody's LTV is 126% compared to 118% at securitization.

The second largest loan is the 599 Lexington Avenue Loan ($475
million -- 5%), which is secured by a 1.0 million square foot
Class A office building located in midtown Manhattan. The property
was 100% leased as of June 2008, the same as at securitization.
The loan is interest only for the entire 10-year term.  Moody's
LTV is 122%, the same as at securitization.

The third largest loan is the Three and Four Westlake Park Loan
($146 million -- 4%), which is secured by two Class A office
properties totaling 976,000 square feet, located in Houston,
Texas. The properties were 100% leased as of September 2008, the
same as at securitization.  Approximately 90% of the property is
leased to energy companies.  The loan is interest only for its
entire five-year term.  Moody's LTV is 118%, the same as at
securitization.


DEL FRISCO'S: S&P Affirms 'B' Credit Rating; Outlook Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on Del
Frisco's Restaurant Group LLC to negative from stable.  "At the
same time, we affirmed the 'B' corporate credit rating on the
company," S&P said.

"The outlook revision reflects that very poor economic conditions
have and will continue to hurt sales at the company's existing
restaurants," said Standard & Poor's credit analyst Charles
Pinson-Rose, "which will stunt the firm's profitability growth and
credit metric improvement."  Consequently, Del Frisco's may have a
difficult time complying with financial covenants of its senior
secured credit facility as they become more restrictive and could
have a problem doing so at the end of 2009 or early 2010.


DELPHI CORP: Chairman Says Detroit 3 Need Pseudo-Bankruptcy
-----------------------------------------------------------
"General Motors Corp., Chrysler LLC, and Ford Motor Company -
need an out-of-court pseudo-bankruptcy that mimics the things
that might happen in a bankruptcy," said Steve Miller, Delphi
Corp. chairman, in an interview with Automotive News.

Mr. Miller, however, believed that bankruptcy and prepackaged
bankruptcy, which served as turnaround tools for Delphi, may not
be suitable to the Detroit 3.  "The Bankruptcy system isn't built
to handle anything as "big, complex and politically sensitive" as
a GM Bankruptcy," he related in the Automotive News interview.

"Prepackaged bankruptcies don't save time because all concessions
need to be made before going to the Court and the situation where
GM and Chrysler are in calls for urgency," Mr. Miller stressed.
Back in 1979, he recalled, it took three months of debate before
Congress signed the bill on loan guarantees on December 21, 1979,
and another six more months for Chrysler to get all stakeholder
concessions required by the law before an automaker could draw
its first guaranteed loan.

The article implied that a March 31 deadline for the Detroit 3 to
line-up concessions from stakeholders may prove to be overly
optimistic.

In 1979, there was Chrysler, one company who needed cash, this
time, there are three companies with different problems,
Mr. Miller pointed out in the interview.  Though a bailout is
about saving jobs, excessive focus on creating jobs would be bad
as in effect, "that would be creating a Job Banks again," he
added in the Automotive interview.

Mr. Miller also cited that an auto czar, instead of micromanaging
the companies, should establish guiding principles and leave the
rest to the management.  "They should just make the companies
healthy and let the market do the rest," he concluded in the
interview.

Mr. Miller was responsible for the 1979 rescue of Chrysler Corp.
and has rehabilitated several troubled companies, the article
noted.

To recall, the U.S. Senate has rejected the proposed $14 billion
financial assistance for General Motors, Chrysler, and Ford
Motor, after the measure was passed by the House of
Representatives.  In light of the Senate's decision, the White
House, according to the Wall Street Journal, said on Friday that
it would consider letting the Big 3 access the $700 billion
financial-rescue plan.  The government's $700 billion Troubled
Asset Relief Program was approved in October and was intended for
financial institutions.

                    About Delphi Corp.

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology.  The company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  Delphi has regional headquarters
in Japan, Brazil and France.

The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007.  The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.  The
Plan has not been consummated after a group led by Appaloosa
Management, L.P., backed out from their proposal to provide
US$2,550,000,000 in equity financing to Delphi.
(Delphi Bankruptcy News, Issue No. 153; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DISTRIBUTED ENERGY: Wants Plan Filing Period Extended to March 2
----------------------------------------------------------------
Distributed Energy Systems Corp. and its wholly owned subsidiary,
NPS Liquidating Inc., f.k.a. Northern Power Systems Inc., ask the
U.S. Bankruptcy Court for the District of Delaware to extend their
exclusive periods to:

  a) file a Chapter 11 plan to March 2, 2009;

  b) solicit acceptances of the plan to May 1, 2009.

This is the Debtors' second request for an extension of these
deadlines.  The Debtors' current exclusive periods to file a
Chapter 11 plan and solicit acceptances of such plan expires on
Dec. 31, 2008, and March 2, 2009, respectively.

The Debtors tell the Court that they have been engaged in
extensive negotiations with the Official Committee of Unsecured
Creditors and Perseus Partners VII, L.P. in an attempt to resolve
the disputes between the Committee and Perseus.

The Debtors also relate that they require the extensions requested
to adequately evaluate their alternatives for a plan in these
Chapter 11 cases.

The Debtors add that the termination of their exclusive periods
would adversely impact their efforts to preserve and maximize the
value of their estates and the progress of these cases.

Distributed Energy Systems Corp. and its wholly owned subsidiary,
Northern Power Systems Inc., filed for Chapter 11 bankruptcy
protection on May 4, 2008 (Bankr. D. Del. Lead Case No. 08-11101).
Robert S. Brady, Esq., Edward J. Kosmowski, Esq., and Robert F.
Poppiti, Jr., at Young, Conaway, Stargatt & Taylor LLP represent
the Debtors in their restructuring efforts.  The Debtors selected
Epiq Systems as their claims agent.  The U.S. Trustee for Region 3
appointed three creditors to serve on an Official Committee of
Unsecured Creditors.  Schuyler G. Carroll, Esq., Robert M. Hirsh,
Esq., and Karen McKinley, Esq., at Arent Fox LLP, in New York,
and John V. Fiorella, Esq., Charles C. Brown, III, Esq., and "J"
Jackson Shrum, Esq., at Archer & Greiner, P.C., in Wilmington,
Delaware, represent the Committee.  The Debtors disclosed in their
schedules, assets of $19,593,387 and debts of $43,558,713.


EQUITY MEDIA: Hearing on Case Conversion to Liquidation Postponed
-----------------------------------------------------------------
Mark Hengel at Arkansasbusiness.com reports that the U.S.
Bankruptcy Court for the Eastern District of Arkansas said that it
has postponed a hearing on Silver Point Finance LLC's plea to
convert Equity Media Holding Corp.'s Chapter 11 reorganization
case to Chapter 7 liquidation due to the winter weather.

According to Arkansasbusiness.com, the hearing was scheduled for
9:00 a.m. on Dec. 16.  No new date was set for the hearing, the
report says.

As reported by the Troubled Company Reporter on Dec. 12, 2008,
Silver Point asked the Court to convert Equity Media's
reorganization case to Chapter 7 liquidation, saying that the
Debtor filed for Chapter 11 protection without any planning nor
exit strategy, and that Equity Media had been a victim of "gross
mismanagement."  Arkansasbusiness.com relates that Equity Media
owes Silver Point about $41.5 million.

                       About Equity Media

Little Rock, Arizona-based Equity Media Holdings Corp. --
http://www.emdaholdings.com/-- fka Equity Broadcasting
Corporation, dba Coconut Palm Acquisition Corp. and Equity
Broadcasting Corp., operates 121 television stations including 23
full power, 38 Class A and 60 low power stations.  The company was
founded in 1998.  The company filed for Chapter 11 protection on
Dec. 8, 2008 (Bankr. E. D. Ariz. Case No. 08-17646).  James F.
Dowden, Esq., who has an office at Little Rock, Arizona,
represents the company in its restructuring effort.  The company
listed assets of $100,000,000 to $500,000,000 and debts of
$50,000,000 to $100,000,000.


FORD MOTOR: Moody's Says Likely Scenario Is Government Support
--------------------------------------------------------------
The U.S. Government will likely provide immediate stopgap
financing to bridge the major American auto companies until a more
complete agreement can be reached early in 2009, says Moody's
Investors Service in a new report that outlines the three mostly
likely bailout and bankruptcy scenarios for government help to
Ford, GM and Chrysler.

"We think it's most likely that a prepackaged bankruptcy filing
coupled with government financial assistance will be needed to
restructure the Big Three," said Moody's Senior Vice President
Bruce Clark, a co-author of the report.  "The government will also
probably offer support by providing or guaranteeing debtor-in-
possession or DIP financing, and bondholder losses would probably
be less than 75% in this scenario."

In the wake of the domestic auto manufacturing companies' request
for urgent financial assistance from the federal government, the
Moody's report describes three bailout and bankruptcy scenarios
for Detroit, assesses the probabilities of these scenarios, and
examines the extent of likely losses in each of the scenarios for
auto manufacturer debt holders.  It then assesses the broader
implications of the three scenarios, across the larger economy
generally and specifically on 10 important financial and
industrial sectors.

These include auto-part manufacturers, captive finance companies,
car rental companies, banks, auto dealers, steel, chemicals,
rental car fleet securitizations, state and local governments,
dealer floorplan securitizations, auto loan/lease securitizations,
and rental car fleet securitizations.

"A prepackaged bankruptcy might be the best approach to current
problems, but achieving timely agreement from a broad range of
creditors would be highly difficult, especially given the critical
funding status of GM and Chrysler," said Mr. Clark.

While the analyst and his Moody's colleagues give a prepackaged
bankruptcy filing coupled with government financial assistance a
70% likelihood of coming to pass, they assign a 25% probability of
a government bailout without a near-term automaker bankruptcy.

"Under this less-likely scenario, a comprehensive bailout package
is agreed to that enables the automakers to restructure without
any bankruptcy filings during 2009.  The degree of economic
disruption and direct financial loss for investors would be
contained, at least in the short term," said Mr. Clark.
"Bondholder losses would be the least in this scenario, although
there is a risk that such a reorganization would be inadequate,
and that at least one automaker might file for bankruptcy beyond
2009."

Given only a 5% likelihood, Moody's also considers the "freefall
bankruptcy" scenario without a prepackage plan and without
government involvement.  This would involve the most significant
disruption to the economy, including potential bankruptcies in
associated industries such as auto parts suppliers and auto
dealers.

"The negative consumer sentiment and erosion of franchise value
would make the reorganization process more complex for the
automakers and a Chapter 7 liquidation of at least one of the
automakers possible," said Mr. Clark.  "Auto bondholder losses
could be in the 75-100% range in this scenario."

The report, "U.S. Automakers: Credit Implications of Three
Scenarios Have Broad Reach," is available at:

                   http://www/moodys.com/


FRONTIER AIRLINES: Court OKs Agreement With IBT Appearance Agents
-----------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York approved a new deal reached by Frontier
Airlines, Inc., and the International Brotherhood of Teamsters

On November 26, 2008, Frontier and the Teamsters told the Court
that they have reached "a tentative long-term concessionary
agreement modifying the terms of the CBA" concerning Appearance
Agents and Maintenance Cleaners, which covers the period from
September 16, 2005, through September 16, 2015.

Frontier Airlines and its debtor-affiliates previously sought the
Court's authority in September 2008, to (i) reject their
collective bargaining agreements with the Teamsters Airline
Division of the International Brotherhood of Teamsters,
and (ii) implement the terms of their bargaining proposal to the
Teamsters, in accordance with Section 1113 of the Bankruptcy
Code.  On November 14, 2008, the Court authorized the rejection of
the CBAs effective October 31, except with respect to the
Appearance Agents and Maintenance Cleaners.

"The [Section 1113 Motion] filed by Frontier on September 12,
2008, only as it applied to the Appearance Agents and Maintenance
Cleaners, is resolved and dismissed," the Court ruled.

The CBAs cover wages, benefits, job security and other employment
conditions for 425 members, specifically:

* aircraft appearance agents and maintenance cleaners;

* aircraft technicians, ground service equipment technicians
   and tool room attendants; and

* material specialists.

The Debtors noted that on an annualized basis, the Section 1113
Proposal saves Frontier $5,100,000, owing to, among other things,
wage and premium reductions with respect to the covered
Employees.

"I would authorize the debtor to reject the IBT agreements with
the exception of the appearance agents' collective bargaining
agreement, which I understand the parties still want to continue
to negotiate," Judge Drain said in his ruling.

Except with respect to the Appearance Agents and Maintenance
Cleaners, the Court also permitted Frontier to implement, and
perform under, the terms of the Section 1113 Proposal, effective
November 1, 2008.

                  The Concessionary Agreement

On November 26, 2008, Frontier and the Teamsters told the Court
that they have reached "a tentative long-term concessionary
agreement modifying the terms of the CBA" concerning Appearance
Agents and Maintenance Cleaners, which covers the period from
September 16, 2005 through September 16, 2015.

Pursuant to the Amended CBA, the Teamsters agree that the wage
rates for all Aircraft Appearance Agents and Maintenance Cleaners
will be reduced as:

                                                Reduction
  Wage Period                                   Percentage
  -----------                                   ----------
  December 12, 2008 through December 11, 2009       6%
  December 12, 2009 through December 11, 2010       6%
  December 12, 2010 through December 11, 2011       3%
  December 12, 2011 through December 12, 2012       1%

Frontier agrees that during its Chapter 11 cases, it will not
seek further relief under Section 1113 of the Bankruptcy Code,
with respect to the Appearance Agent Agreement unless the
Company's financial performance or liquidity materially
deteriorate as compared to the forecasts in the Seabury Group
Business Plan for Frontier Airlines Version 4.2, published
August 4, 2008.

During the term of the Agreement, Frontier agrees not to
partially or fully restore, effective prior to December 12, 2012,
the Wages -- including holiday pay, uniform allowance and
vacation pay -- of the non-supervisory Customer Service Agents,
Catering Agents, Ramp Service Agents, Tower Operations Agents,
and Scouts/Charter Operations Agents in the Customer Service
Workgroup as compared to the pay scales in effect without
providing an equivalent percentage improvement to the Appearance
Agents and Maintenance Cleaners unless:

  -- the restored Customer Service Agents' wages or wage-
     equivalents would still represent an aggregate collective
     concession from the Customer Service Agents' W-2
     compensation as of April 10, 2008, equal to or greater than
     the Appearance Agents' and Maintenance Cleaners'
     concessions in effect at that time; or

  -- the Customer Service Agents' wage restoration arose out of,
     or was otherwise in connection with or attributable to a
     legitimate business purpose, change in circumstances, or
     change in work conditions arising after the effective date
     of the Agreement, which (i) produces identifiable
     efficiencies or savings to the Company and (i) is
     applicable or relevant to the Customer Service Agents but
     not comparably applicable or relevant to the Appearance
     Agents and Maintenance Cleaners.

Effective December 13, 2012, wage scales for Appearance Agents
and Maintenance Cleaners, unless otherwise agreed in the interim,
will revert to the rates set forth in the September 16, 2005
Agreement.  The wage/benefits re-opener under the Agreement will
be extended to December 12, 2012.

Upon the Effective Date of the Concessionary Agreement, the
Teamsters will have an allowed general non-priority unsecured
claim for $472,196 against the Debtors under Section 502 of the
Bankruptcy Code, which is not subject to reconsideration in
respect of the concessions made by the Teamsters under the
Concessionary Agreement.  However, if the IBT pay rates are
restored sooner than December 12, 2012, the Claim will be
adjusted downward by the amount of the incremental wages paid as
a result.

None of the Teamsters or the Appearance Agents or Maintenance
Cleaners will have any other claim or cause of action on account
of the Concessionary Agreement.  Any transfer of all or any part
of the Claim prior to the Company's exit from bankruptcy may only
be made in compliance with the Court's final order dated June 3,
2008, establishing procedures and approving restrictions on
transfers of claims and interests.

The Teamsters will have the sole authority and responsibility to
determine the manner of allocation among Appearance Agents and
Maintenance Cleaners on account of the Teamsters' Claim, provided
that the allocation schedule or formula is delivered to the
Company no later than 30 days prior to the date of distribution.

To the extent reasonably practicable, Frontier will distribute
the Claim proceeds to the identified employees.  The Company will
be responsible for the employer-share of any applicable payroll
taxes.

The Amended Agreement is subject to ratification by the
Appearance Agent and Maintenance Cleaner membership, in
accordance with the Teamsters' constitution.  In a prior
statement, the Union has disclosed that it intended to submit the
Concessionary Agreement for Membership ratification until
December 12, 2008.  As of December 16, no ratification results
have been disclosed by the Union.

A full-text copy of the Concessionary Agreement is available at
no charge at:

http://bankrupt.com/misc/Frontier&IBTConcessionary_AppearanceAgent
s&MaintenanceCleaners.pdf

                   About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provides air transportation
for passengers and freight.  It operates jet service carriers
linking 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.

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.)  Benjamin S. Kaminetzky, Esq., and Hugh
R. McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts.  Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.

(Frontier Airlines Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


FRONTIER AIRLINES: IBT Pursues Appeal; Debtor Wants Stay Enforced
-----------------------------------------------------------------
The Teamsters Airline Division of the International Brotherhood
of Teamsters asks the U.S. District Court for the Southern
District of New York to determine whether the Bankruptcy Court:

  * erred in permitting the reorganization of Frontier Airlines,
    Inc., and its affiliated parties and assuring that all
    affected parties were treated fairly and equitably as required
    by Section 1113 of the Bankruptcy Code;

  * erred in finding that Frontier met its obligation to provide
    timely relevant information to evaluate its proposal as
    its duty to bargain in good faith;

  * erred in granting Frontier's motion to reject its collective
    bargaining agreements with the Teamsters, notwithstanding
    evidence that the airline failed to negotiate in good faith;
    and

  * erred in granting Frontier's Motion based on positions
    Frontier first adopted after the parties' last bargaining
    session, disclosed at the hearing.

As reported by the Dec. 1 edition of the Troubled Company
Reporter, IBT notified the Bankruptcy Court that it will take an
appeal to the District Court for the Southern District of New York
from Judge Robert Drain's order granting Frontier Airlines'
request to reject its collective bargaining agreement with the
Teamsters.

      Frontier Wants Enforcement of Stay Pending Appeal

Pursuant to Rule 8005 of the Federal Rules of Bankruptcy
Procedure, the Teamsters asks the Bankruptcy Court to enforce a
stay pending a ruling on its appeal of the Court's order
rejecting the Union's CBAs with Frontier.

The Stay, to the extent of the order rejecting the CBAs, applies
to the scope, and the subcontracting provisions of, the
Agreements, Marianne Goldstein Robbins, Esq., at Previant,
Goldberg, Uelmen, Gratz, Miller, & Brueggeman, s.c., in
Wisconsin, Milwaukee, said on behalf of the Teamsters.

To recall, Judge Drain approved the Debtors' request to reject
their CBAs with The Teamsters effective October 31, except with
respect to appearance agents and maintenance cleaners.

Judge Drain's Order is hinged upon Frontier's plan to furlough
its heavy maintenance workers during periods in which the airline
does not require heavy maintenance work, and recall these workers
during periods that Frontier has work available.

Among other things, the Court held that Frontier may outsource
its aircraft maintenance only as a last resort -- after it has
exhausted all other options to perform the heavy check work at
its repair station in Denver, Colorado.

Teamsters Local Union No. 961, argued that Frontier's outsourcing
of all of its maintenance work to Aeroman, a company based in El
Salvador, will displace the Union-represented mechanics in the
airline.

In response, the Debtors argued that the imposition of the Stay
is not necessary because Frontier's outsourcing of C-check work
is "a distant prospect -- a last resort -- that all parties agree
will not occur for months or even years, if at all," Benjamin
Kaminetzky, Esq., at Davis Polk & Wardwell, in New York,
emphasized.

In a statement filed with the Court, Elliot Moskowitz, an
associate at Davis Polk & Wardwell, declared that the Teamsters
have acknowledged and reflected in their press release dated
November 3, 2008, that pursuant to the Court's order, Frontier
can outsource maintenance only as a "last resort."

Moreover, even if the "last resort" of outsourcing becomes
necessary, Frontier will have to take a number of steps before
outsourcing can begin, which would push off even further the
possibility of any job loss, Mr. Kaminetzky averred.

Mr. Kaminetzky noted that the Teamsters, as a party seeking a
Stay pending appeal, must also demonstrate a "substantial
possibility" of success on the merits, Mr. Kaminetzky notes,
citing Calpine, 2008 WL 207841, at *4.  In this regard, Mr.
Kaminetzky reiterates that the Court has already ruled in favor
of Frontier with respect to the Union's alleged failures of the
Debtors to:

  (i) provide the dollar amounts or calculations concerning the
      amount needed in overall annual improvements;

(ii) identify the amount required to allow the Debtors to
      reorganize by any means other than its bottom up budgeting
      process identifying the amount that can be obtained; and

(iii) present a quote from a potential contractor which supports
      its claim of that it will realize savings from
      subcontracting.

Mr. Kaminetzky told the Court that the issuance of a Stay "would
send exactly the wrong message" to prospective exit financiers.

"A finding by the Court that the [Teamsters] Union has shown a
substantial possibility of success on the merits of its Appeal
would seriously call into question the durability of the expense
reductions," he maintained.

Additionally, Mr. Kaminetzky added, a Stay would also materially
affect and "make difficult" Frontier's ongoing negotiations with
other constituencies, particularly, with the Frontier Airline
Pilots Association.

Hence, a Stay would complicate the Debtors' ongoing efforts to
secure exit financing, which in turn, would hinder them from
successfully emerging from bankruptcy and subsequently harm all
parties-in-interest.

While the Teamsters asserted that a Stay is in the public
interest because "outsourcing is less safe and will lead to more
cancellations," the Court acknowledged that (i) a host of other
airlines outsource C-Check work, and (ii) Aeroman has a stellar
safety and efficiency record, thereby refuting the Union's
contention, Mr. Kaminetzky noted.

Mr. Kaminetzky added that in the event that the Court finds that
a Stay is warranted, the Stay must be conditioned upon the
posting of an appropriately substantial bond in the amount of not
less than $500,000.  If the Teamsters will not consent to the
posting of a bond in this amount, its "already heavy" burden for
a Stay will be that much greater, Mr. Kaminetzky told Bankruptcy
Court Judge Robert Drain.

                   About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provides air transportation
for passengers and freight.  It operates jet service carriers
linking 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.

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.)  Benjamin S. Kaminetzky, Esq., and Hugh
R. McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts.  Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.

(Frontier Airlines Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


FRONTIER AIRLINES: Reports 14.1% Drop in Workforce
--------------------------------------------------
Frontier Airlines, for the fourth consecutive month, disclosed a
year-over-year drop in the number of its employees, the Denver
Business Journal reports, citing statistics from the Federal
Bureau of Transportation.

The report said Frontier has laid off employees since June 2008.

October saw the largest decline for Frontier, the report says,
where it reported 4,460 full-time equivalent employees at the end
of the month -- down 14.1 percent from October 2007, the airline
revealed in its monthly employee report.  The full-time
equivalent numbers count two part-time employees as being equal
to one full-time worker, according to the newspaper.

The carrier's employee count was down 14%, 10.8% and 6.6% in
September, August and July, respectively, reports the Denver
Journal.

                   About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provides air transportation
for passengers and freight.  It operates jet service carriers
linking 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.

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.)  Benjamin S. Kaminetzky, Esq., and Hugh
R. McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts.  Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.

(Frontier Airlines Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


FRONTIER AIRLINES: CEO & James Upchurch Dispose of All Shares
-------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission dated December 12, 2008, James B. Upchurch, a director
at Frontier Airlines Holdings, Inc., reported that on Dec. 11,
2008, he disposed of 59,620 shares of the Company's common stock
at a $0.2 price.  Following the transaction, he indirectly owned
54,880 shares.

On Dec. 12, 2008, Mr. Upchurch disposed of a total of 30,380
shares of Frontier common stock in two transactions, at prices of
$0.2 and $0.185, leaving him with indirect ownership of 24,500
shares.

Mr. Upchurch added that on Dec. 15, he disposed of an aggregate of
27,500 shares during two separate transactions at prices of $0.18
and $0.185.  Thereafter, he was left with 5,000 shares of Frontier
common stock, which he directly owned.

Matthew R. Henry, attorney-in-fact for Mr. Upchurch said that
after acquiring 5,000 shares of Frontier stock at $0.195 per
share, Mr. Upchurch directly owned 0 shares of the Company's
common stock.

Meanwhile, Sean E. Menke, Frontier Airline's president and chief
executive officer, disclosed with the SEC that on December 15,
2008, he disposed of 13,952 shares of the Company's common stock
at a price of $0.2 per share.  Following the transaction, Mr.
Menke directly and beneficially owned zero shares of Frontier
common stock.


GENERAL GROWTH: Has Not Reached Deal With Lenders on $900MM Loan
----------------------------------------------------------------
General Growth Properties, Inc. has not reached unanimous
agreement with its syndicate of lenders to further extend the
maturity date on the $900 million Fashion Show and Palazzo
mortgage loans.  The company said it is continuing its discussions
with lenders regarding its loans.

GGP is in talks with its syndicate of lenders for a further
extension of the Fashion Show and Palazzo mortgage loans scheduled
to mature on Dec. 12, 2008.

GGP has had considerable difficulty recently in accessing the
secured debt markets.  GGP has almost $1 billion of secured and
unsecured debt maturing by the end of 2008 and an additional $3.1
billion maturing in 2009.

As reported in yesterday's Troubled Company Reporter, Fitch
Ratings has downgraded the Issuer Default Ratings of GGP to 'C'
from 'B' on grounds that "default of some kind appears imminent."

Moody's Investors Service has also downgraded the ratings on
General Growth Properties, Inc., certain of its subsidiaries and
The Rouse Company LP (to Ca from Caa2 senior secured bank debt; to
Ca from Caa2 senior unsecured debt).  The ratings remain on review
for possible downgrade.  The rating action reflects a heightened
likelihood of default and the potential for above average loss
severity in the event of default for debt holders of General
Growth and for Rouse bondholders.  The REIT's failure to repay
$900mm in mortgages on December 12, 2008, will most likely lead to
an imminent acceleration of debt on the Rouse bonds.

Based in Chicago, Illinois, General Growth Properties, Inc.
(NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S.
mall owner with 200-plus shopping malls in 44 states.  General
Growth is a self-administered and self-managed real estate
investment trust.  General Growth owns, manages, leases and
develops retail rental property, primarily shopping centers.
Substantially all of its properties are located in the United
States, but the company also has retail rental property operations
and property management activities -- through unconsolidated joint
ventures -- in Brazil and Turkey.  Its Master Planned Communities
segment includes the development and sale of residential and
commercial land, primarily in large-scale projects in and around
Columbia, Maryland; Houston, Texas; and Summerlin, Nevada, as well
as the development and sale of its one residential condominium
project located in Natick (Boston), Massachusetts.

General Growth said in a regulatory filing Sept. 30 that its
potential inability to address its 2008 or 2009 debt maturities in
a satisfactory fashion raises substantial doubts as to its ability
to continue as a going concern.  General Growth had $29.6 billion
in total assets and $27.3 billion in total liabilities as at
Sept. 30.

                         *     *     *

As reported by the Troubled Company Reporter on Dec. 11, 2008,
Fitch Ratings, has downgraded the Issuer Default Ratings and
outstanding debt ratings of General Growth Properties to 'C' from
'B'.


GENERAL MOTORS: E.D. Mich. Preps for Chapter 11 Filing in Detroit
-----------------------------------------------------------------
The judges sitting in the U.S. Bankruptcy Court for the Eastern
District of Michigan entered an administrative order last week
giving Chief Judge Steven Rhodes the authority to assign "a very
large, complex case of national significance" to a specific
bankruptcy judge "after consulting with the other bankruptcy
judges," rather than using the traditional blind draw system.
Additionally, the administrative order provides that "the
bankruptcy judge to whom the [very large, complex case of national
significance] is assigned shall have the authority to assign
adversary proceedings and contested matters to other bankruptcy
judges as necessary and appropriate."  A copy of the order is
posted at http://www.mieb.uscourts.gov/notices/ao08-24.pdf

The Bankruptcy Court in Detroit announced this week that it is
accepting applications for temporary clerical "positions that may
become available in the next several months."

                     About General Motors

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

As reported in the Troubled Company Reporter on Nov. 10,
2008, General Motors Corporation's balance sheet at
Sept. 30, 2008, showed total assets of $110.425 billion, total
liabilities of $170.3 billion, resulting in a stockholders'
deficit of $59.9 billion.

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings, including
the corporate credit rating, on General Motors Corp. to 'CCC+'
from 'B-' and removed them from CreditWatch, where they had been
placed with negative implications on Oct. 9, 2008.  S&P said that
the outlook is negative.

Fitch Ratings, as reported in the Troubled Company Reporter on
Nov. 11, 2008, placed the Issuer Default Rating of General Motors
on Rating Watch Negative as a result of the company's rapidly
diminishing liquidity position.  Given the current liquidity level
of $16.2 billion and the pace of negative cash flows, Fitch
expects that GM will require direct federal assistance over the
next quarter and the forbearance of trade creditors in order to
avoid default.  With virtually no further access to external
capital and little potential for material asset sales, cash
holdings are expected to shortly reach minimum required operating
levels.  Fitch placed these on Rating Watch Negative:

-- Senior secured at 'B/RR1';
-- Senior unsecured at 'CCC-/RR5'.

As reported in the Troubled Company Reporter on June 24, 2008,
DBRS has placed the ratings of General Motors Corp. and General
Motors of Canada Limited Under Review with Negative Implications.
The rating action reflects the structural deterioration of the
company's operations in North America brought on by high oil
prices and a slowing U.S. Economy.


GENERAL MOTORS: Moody's Says Likely Scenario Is Government Support
------------------------------------------------------------------
The U.S. Government will likely provide immediate stopgap
financing to bridge the major American auto companies until a more
complete agreement can be reached early in 2009, says Moody's
Investors Service in a new report that outlines the three mostly
likely bailout and bankruptcy scenarios for government help to
Ford, GM and Chrysler.

"We think it's most likely that a prepackaged bankruptcy filing
coupled with government financial assistance will be needed to
restructure the Big Three," said Moody's Senior Vice President
Bruce Clark, a co-author of the report.  "The government will also
probably offer support by providing or guaranteeing debtor-in-
possession or DIP financing, and bondholder losses would probably
be less than 75% in this scenario."

In the wake of the domestic auto manufacturing companies' request
for urgent financial assistance from the federal government, the
Moody's report describes three bailout and bankruptcy scenarios
for Detroit, assesses the probabilities of these scenarios, and
examines the extent of likely losses in each of the scenarios for
auto manufacturer debt holders.  It then assesses the broader
implications of the three scenarios, across the larger economy
generally and specifically on 10 important financial and
industrial sectors.

These include auto-part manufacturers, captive finance companies,
car rental companies, banks, auto dealers, steel, chemicals,
rental car fleet securitizations, state and local governments,
dealer floorplan securitizations, auto loan/lease securitizations,
and rental car fleet securitizations.

"A prepackaged bankruptcy might be the best approach to current
problems, but achieving timely agreement from a broad range of
creditors would be highly difficult, especially given the critical
funding status of GM and Chrysler," said Mr. Clark.

While the analyst and his Moody's colleagues give a prepackaged
bankruptcy filing coupled with government financial assistance a
70% likelihood of coming to pass, they assign a 25% probability of
a government bailout without a near-term automaker bankruptcy.

"Under this less-likely scenario, a comprehensive bailout package
is agreed to that enables the automakers to restructure without
any bankruptcy filings during 2009.  The degree of economic
disruption and direct financial loss for investors would be
contained, at least in the short term," said Mr. Clark.
"Bondholder losses would be the least in this scenario, although
there is a risk that such a reorganization would be inadequate,
and that at least one automaker might file for bankruptcy beyond
2009."

Given only a 5% likelihood, Moody's also considers the "freefall
bankruptcy" scenario without a prepackage plan and without
government involvement.  This would involve the most significant
disruption to the economy, including potential bankruptcies in
associated industries such as auto parts suppliers and auto
dealers.

"The negative consumer sentiment and erosion of franchise value
would make the reorganization process more complex for the
automakers and a Chapter 7 liquidation of at least one of the
automakers possible," said Mr. Clark.  "Auto bondholder losses
could be in the 75-100% range in this scenario."

The report, "U.S. Automakers: Credit Implications of Three
Scenarios Have Broad Reach," is available at:

                  http://www/moodys.com/


GENERAL MOTORS: Will Stop Construction of Flint Factory
-------------------------------------------------------
The Associated Press reports that General Motors Corp. said that
it would stop construction works for a factory in Flint, Michigan.

According to The AP, GM is trying to conserve cash so it can
continue operations next year.  The factory, says the report, was
set to make 1.4-liter engines for GM's Chevrolet Cruze and the
Chevy Volt plug-in electric car.

Citing GM spokesperson Sharon Basel, The AP relates that the
construction delay may be temporary until the firm figures out its
cash situation.

The AP quoted Ms. Basel as saying, "Everything that involves heavy
cash outlays obviously is under review.  Our intent is to still go
forward with a new facility bringing that engine to Flint,
Michigan."

Sharon Terlep at The Wall Street Journal reports that GM said on
Tuesday it will proceed with plans to deliver its Chevrolet Volt
electric car by 2010, with or without government bailout.  WSJ
relates that The Volt is GM's most high-profile project

                        Opens China Plant

Norihiko Shrouzu and Patricia Jiayi Ho at The Wall Street Journal
state that GM opened a new passenger-vehicle plant in China on
Wednesday.  The report says that the plant has already started
producing Chevrolet Cruze, the first compact sedan for the Chevy
franchise in China.  The new car would arrive in dealer showrooms
in the second quarter of 2009, the report states, citing GM.

According to WSJ, the Cruze plant is GM's second in Shenyang
operated with Shanghai Automotive Industry Corp., as it already
has a plant there that produces minivans Buick GL8 and the Buick
FirstLand.

WSJ reports that GM has high hopes for the Cruze as Chinese
consumers would likely to become more frugal amid a general
economic slowdown.

                      About General Motors

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

As reported in the Troubled Company Reporter on Nov. 10,
2008, General Motors Corporation's balance sheet at
Sept. 30, 2008, showed total assets of $110.425 billion, total
liabilities of $170.3 billion, resulting in a stockholders'
deficit of $59.9 billion.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings, including
the corporate credit rating, on General Motors Corp. to 'CCC+'
from 'B-' and removed them from CreditWatch, where they had been
placed with negative implications on Oct. 9, 2008.  S&P said that
the outlook is negative.

Fitch Ratings, as reported in the Troubled Company Reporter on
Nov. 11, 2008, placed the Issuer Default Rating of General Motors
on Rating Watch Negative as a result of the company's rapidly
diminishing liquidity position.  Given the current liquidity level
of $16.2 billion and the pace of negative cash flows, Fitch
expects that GM will require direct federal assistance over the
next quarter and the forbearance of trade creditors in order to
avoid default.  With virtually no further access to external
capital and little potential for material asset sales, cash
holdings are expected to shortly reach minimum required operating
levels.  Fitch placed these on Rating Watch Negative:

  -- Senior secured at 'B/RR1';
  -- Senior unsecured at 'CCC-/RR5'.

As reported in the Troubled Company Reporter on June 24, 2008,
DBRS has placed the ratings of General Motors Corp. and General
Motors of Canada Limited Under Review with Negative Implications.
The rating action reflects the structural deterioration of the
company's operations in North America brought on by high oil
prices and a slowing U.S. Economy.


GOLDEN STATE FOODS: Lack of Info Cues Moody's to Withdraw Ratings
-----------------------------------------------------------------
Moody's Investors Service withdrew all ratings of Golden State
Foods Corporation, including the company's B1 corporate family
rating and B1 probability of default rating.  The ratings have
been withdrawn because Moody's believes it lacks adequate
information to maintain a rating.

Ratings withdrawn:

   * Corporate family rating at B1

   * Probability of default rating at B1

   * Senior secured revolving credit agreement, originally
     expiring in February 2009 but repaid early, at B1 (LGD3,48%)

   * Senior secured Term Loan A, originally maturing in February
     2009 but repaid early, at B1 (LGD3,48%)

   * Senior secured Term Loan B, originally maturing in February
     2011 but repaid early, at B1 (LGD3,48%)

   * Subordinated Notes at B3 (LGD5,88%)

Golden State Foods Corporation is an integrated supplier to
McDonald's system, manufacturing and distributing meat products,
liquids and other goods.  This privately owned company is
headquartered in Irvine, California.  Moody's most recent rating
action was the assignment of a probability of default rating to
the company, the affirmation of other long term ratings, and the
assignment of LGD ratings and percentages to the rated debt
instruments on September 21, 2006.


HARRAH'S ENTERTAINMENT: Industry to Remain Under Pressure in 2009
-----------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


HEXION SPECIALTY: S&P Keeps Ratings on Negative CreditWatch
-----------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on Columbus,
Ohio-based Hexion Specialty Chemicals Inc. remain on CreditWatch,
where they were placed with negative implications on July 5, 2007.
The initial CreditWatch placement followed the announcement of
Hexion's proposed debt-financed acquisition of Huntsman Corp. in a
transaction valued at more than $10 billion, including assumed
debt.

According to S&P: "The CreditWatch update follows Hexion's recent
announcement of its settlement agreement and the termination of
its merger agreement with Huntsman.  The settlement agreement
provides for the dismissal of pending lawsuits against Hexion,
which will eliminate the high litigation risk that has weighed
down credit quality.  The lawsuits will be dismissed once Huntsman
receives all payments due to it under the agreements, which are
expected to be made not later than March 31, 2009.  Under the
agreements, Hexion will pay Huntsman a $325 million break-up fee,
which Hexion intends to fund by using an existing committed credit
facility at unrated Hexion LLC, the parent company.  In addition,
certain affiliates of unrated Apollo Management L.P. will pay
Huntsman $425 million in cash and purchase $250 million of
Huntsman convertible notes.  At least $500 million of the payments
are to be made by Dec. 31, 2008.

"In addition to the elimination of legal risk, the termination of
the merger agreement also eliminates the prospect of a more highly
leveraged merged entity.  In a related development, Hexion's
liquidity is expected to be bolstered by a $200 million investment
by affiliates of Apollo.  However, the elimination of these key
risks are offset by the prospect of weaker operating performance
at Hexion and increasing concerns on covenant compliance in 2009.
We are increasingly concerned that the economic slowdown will
result in further deterioration of Hexion's already stretched
financial risk profile.  In particular, we are concerned that
cushions under a financial covenant could deteriorate and
potentially constrain liquidity.  A meaningful portion of Hexion's
sales are to cyclical end markets such as construction and
industrial, which are vulnerable to demand contractions during
economic downturns.  The ongoing broad-based global economic
slowdown has the potential to offset benefits to Hexion's earnings
from its global diversification and from steps undertaken by
management to shore up earnings.

"The company is highly leveraged; total debt to EBITDA is more
than 9x after adjustments to debt, including tax-adjusted unfunded
employee benefit obligations and the capitalized present value of
operating leases.  Our leverage calculation is as of Sept. 30,
2008, and pro forma for the $325 million of borrowings at Hexion
LLC, which will fund the break-up fee.

"As of Sept. 30, 2008, Hexion had about $21 million available
under its $225 million revolving credit facility, $234 million in
cash, and about $66 million available under credit facilities at
subsidiaries.  However, if operating results deteriorate, we
expect the EBITDA cushion under the covenant to decline to low-
single-digit percentage levels.  Such a scenario would be a
material concern given the difficult credit markets facing highly
leveraged companies.

"The ratings on Hexion will remain on CreditWatch negative until
all payments under the settlement agreement have been made to
Huntsman, resulting in the dismissal of lawsuits against Hexion,
and until we have evaluated Hexion's operating performance in the
next few quarters to ascertain the effect of the ongoing economic
slowdown on the company.  The CreditWatch listing also indicates
that the ratings remain at risk of a slight downgrade if
operational issues such as weak earnings in the next few quarters
result in declining covenant cushions and further stretch Hexion's
already highly leveraged financial profile.  The CreditWatch
resolution will address the pending changes to the company's
capital structure, which could affect our recovery analysis and
notching of existing debt issues."

The Troubled Company Reporter reported on Nov. 6, 2008, that
Standard & Poor's Ratings Services lowered its ratings on
Hexion Specialty Chemicals Inc., including the corporate credit
rating to 'B-' from 'B'.  All of the ratings on Hexion remain on
CreditWatch, where they were placed with negative implications on
July 5, 2007.


HINES HORTICULTURE: Court OKs Sale of All Assets to Black Diamond
-----------------------------------------------------------------
The Hon. Kevin J. Carey of the United States Bankruptcy Court for
the District of Delaware authorized the sale of substantially all
assets of Hines Horticulture Inc. and Hines Nurseries Inc. to an
affiliate of Black Diamond Capital LLC, Bloomberg News reports.

According to Bloomberg, the Black Diamond unit was declared the
winning bidder when no other competing offers were made.  The
auction was canceled, the report says.  The Black Diamond unit,
Bloomberg relates, made a $58 million offer in cash and agreed to
take on more than $45.9 million in debts.

Judge Carey said he approved the sale because there is no better
offer, Bloomberg adds.

                     About Hines Horticulture

Headquartered in Irvine, California, Hines Horticulture, Inc. --
http://www.hineshorticulture.com/-- operates nursery facilities
located in Arizona, California, Oregon and Texas.  Through its
affiliate, the company produces and distributes horticultural
products.  The company and its affiliate, Hines Nurseries, Inc.,
filed for Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del.
Lead Case No.08-11922).  Anup Sathy, Esq., Ray C.Schrock, Esq.,
and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructure efforts.  Robert S. Brady, Esq.,
and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor,
serve as the Debtors' co-counsel.  The Debtors selected Epiq
Bankruptcy Solutions LLC as their voting and claims agent, and
Financial Balloting Group LLC as their securities voting agent.
The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors in the Debtors' case.
In its schedules, Hines Horticulture, Inc. listed total assets of
$30,068 and total debts of $218,052,380.  In its schedules, Hines
Nurseries, Inc. listed total assets of $229,231,003 and total
debts of $228,698,592.


HINES HORTICULTURE: Court Approves Disclosure Statement
-------------------------------------------------------
The Hon. Kevin J. Carey of the United States Bankruptcy Court for
the District of Delaware approved a disclosure statement
explaining a Chapter 11 plan of reorganization filed by Hines
Horticulture Inc. and Hines Nurseries Inc. on Aug. 29, 2008.  He
found that the disclosure statement contains adequate information
in accordance to Section 1125 of the United States Bankruptcy
Code.

Judge Carey also approved procedures the Debtors proposed for
solicitation and tabulation of plan votes.  Deadline to vote for
the plan is Jan. 21, 2009.

A hearing is set of Jan. 28, 2009, at 1:30 p.m., to consider
confirmation of the Debtors' plan.  Objections, if any, are due
Jan. 26, 2009

The Troubled Company Reporter on Sept. 2, 2008, said the Debtors'
plan contemplates the sale of substantially all of the Debtors'
assets through a liquidation process.  After the auction, all
remaining assets will be liquidated and the proceeds distributed
to the Debtors' creditors pursuant to the plan.  On the plan's
effective date, proceeds from the sale will be distributed to
holders of claims.

The Debtors selected Black Diamond Management LLC, as stalking-
horse bidder.

The plan classifies interests against and claims in the Debtors in
eight classes.  The classification of interests and claims are:

                 Treatment of Interests and Claims

               Type                               Estimated
      Class   of Claims             Treatment     Recovery
      -----   ---------             ---------     ---------
      1       other priority        unimpaired    100%
               claims

      2       other secured         unimpaired    100%
               claims

      3       prepetition credit    unimpaired    100%
               facility claims

      4       10.25% senior notes   impaired       __%
               claims

      5A      general unsecured     impaired       __%
               claims against
               Hines Horticulture   impaired       __%

      5B      general unsecured     impaired       __%
               claims against
               Hines Nurseries

      6       section 510(b)        impaired        0%
               claims

      7       equity interest in    impaired        0%
               Hines Horticulture

      8       intercompany          impaired        0%
               interests

Classes 4, 5A and 5B are entitled to vote to accept or reject the
plan.

Holders of Class 2 other secured claims will be place in a
separate subclass, and each subclass will be treated as a separate
class for distribution purposes.  Unless otherwise agreed to by
the holders and the Debtors, each holders will receive in full:

   -- the collateral securing the allowed other secured claim; or
   -- a cash distribution in an amount equal to the value of the
      collateral.

Allowed Cass 3 claims will be allowed in the amount of $36,054,784
plus (i) interests and payable from the petition date to the
plan's effective date, and (ii) fees and expenses payable to the
prepetition credit facility agent from the petition date until the
plan's effective.

Holders of Class 10.25% senior notes claims will receive their pro
rata share of the post-consummation trust assets in turn for each
10.25% senior notes claims.

All general unsecured claims against the Debtors will also receive
a pro rate share of the post-consummation trust assets.

Class 6,7 and 8 will not receive any distribution under the plan.

A full-text copy of the Debtors' disclosure statement is available
for free at http://ResearchArchives.com/t/s?3188

A full-text copy of the Debtors' Chapter 11 plan of reorganization
is available for free at http://ResearchArchives.com/t/s?3189

                     About Hines Horticulture

Headquartered in Irvine, California, Hines Horticulture, Inc. --
http://www.hineshorticulture.com/-- operates nursery facilities
located in Arizona, California, Oregon and Texas.  Through its
affiliate, the company produces and distributes horticultural
products.  The company and its affiliate, Hines Nurseries, Inc.,
filed for Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del.
Lead Case No.08-11922).  Anup Sathy, Esq., Ray C.Schrock, Esq.,
and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructure efforts.  Robert S. Brady, Esq.,
and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor,
serve as the Debtors' co-counsel.  The Debtors selected Epiq
Bankruptcy Solutions LLC as their voting and claims agent, and
Financial Balloting Group LLC as their securities voting agent.
The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors in the Debtors' case.
In its schedules, Hines Horticulture, Inc. listed total assets of
$30,068 and total debts of $218,052,380.  In its schedules, Hines
Nurseries, Inc. listed total assets of $229,231,003 and total
debts of $228,698,592.


HUNTSMAN CORP: S&P Keeps 'BB-' Credit Rating on Negative Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services said it is keeping its ratings
on Salt Lake City, Utah-based Huntsman Corp., including the 'BB-'
corporate credit rating, on CreditWatch, where they were placed on
June 26, 2007, with negative implications.

S&P said: "This update follows Huntsman's announcement that it has
terminated its merger agreement with Hexion Specialty Chemicals
Inc. Under the terms of a settlement with Hexion and Apollo
Management L.P., Huntsman expects to receive cash payments of
$1 billion, consisting of $750 million of settlement payments and
$250 million of cash proceeds from the issuance of 10-year
convertible notes to Apollo affiliates, which Huntsman can repay
in cash or common stock.  The settlement payments consist of
$325 million from a break-up fee due from Hexion, which Hexion
will fund through an existing committed credit facility, and
$425 million that Apollo affiliates will fund.  At least
$500 million of the payments are to be paid to Huntsman on or
before Dec. 31, 2008.

"The settlement brings to an end the litigation process against
Apollo and Hexion in connection with Hexion's proposed $10 billion
acquisition of Huntsman, which stalled because of adverse changes
in credit market and business conditions.

"We will keep our ratings on Huntsman on CreditWatch negative
until there is further clarity on the use of the cash proceeds and
after we evaluate the implications of expected debt reduction on
the financial profile of the company," explained Standard & Poor's
credit analyst Kyle Loughlin.  "Also key to resolving the
CreditWatch status of the ratings will be the understanding of
which debt obligations will be reduced with the cash proceeds, so
that we can update our recovery analysis and recovery ratings and
notching of existing rated debt."

"Based on public comments, we expect that Huntsman will use the
vast majority of the proceeds to reduce debt and to bolster
liquidity in the face of sharply trimmed demand for chemicals
products across the industry.  Given the company's capital
structure, we anticipate that it will likely aim its debt
reduction at reducing borrowings under the committed bank credit
facilities to bolster short-term liquidity and to ensure the
company is well positioned to meet the maturity of approximately
$296 million of notes in 2010.

"We expect to resolve the CreditWatch status of the ratings in the
next quarter as more information becomes available on the expected
use of the settlement proceeds and after we review Huntsman's
business and financial outlook now that the merger agreement with
Hexion has been terminated.  Also pending is Huntsman's litigation
against the banks that committed to fund the Hexion merger in
2007.  A jury trial on those claims is set to begin on May 11,
2009."


ILLINOIS FINANCE: Fitch Holds 'BB-' Rating on $80.5 Million Bonds
-----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB-' rating on the $80.5 million
Illinois Finance Authority revenue bonds, series 2005A&B
(Friendship Village of Schaumburg).  The Rating Outlook is revised
to Stable from Negative.

The affirmation at BB-' reflects Friendship Village of
Schaumburg's (FVS) light liquidity position, the on-going
challenge of converting sales to move-ins and a lack of
improvement in occupancy in the Bridgegate (BG) apartments.  At
Oct. 31, 2008 FVS reported 329 days cash on hand (as defined under
the Master Trust Indenture) which includes $25.3 million of
initial entrance fees in the entrance fee reserve account.  Under
the indenture, moneys in the entrance fee reserve account are to
be used to redeem $25 million of the series 2005C variable rate
demand bonds only to the extent that such redemption would not
cause the days cash on hand to fall below the liquidity
requirement which is currently 165 days.  FVS and the bank letter
of credit provider have agreed to keep $10 million in the entrance
fee reserve account and redeem $15 million of the series 2005C
bonds from initial entrance fees.  Amounts in the entrance fee
reserve account used to comply with the liquidity requirement will
be incorporated by Fitch in calculating various liquidity ratios.
Thus, FVS' days cash on hand, cushion ratio and percentage of cash
to debt at Dec. 31, 2008 are expected to be approximately 165, 2.4
times (x) and 17%, respectively.

The continuing weakness in the local residential real estate
market combined with the volatile financial markets has made
converting sales to move-ins highly challenging.  As of Dec. 12,
2008 FVS was in compliance with sales and occupancy covenants on
The Bridgewater Place apartments which were 80% occupied and 86%
sold. Management has been proactive in developing several
marketing initiatives to counteract the current market
environment.  Lead generation has been solid, and sales
initiatives have been successful in improving overall sales
relative to the initial contract offerings.  A marketing
consultant's report has generated recommendations which are being
implemented.  However, inducing potential residents to move-in is
taking longer and requiring greater incentives than expected which
has dampened FVS' financial performance and cash generation from
original projections.  Occupancy in the BG apartments continues to
lag projections reflecting the more difficult sales and marketing
environment and turnover of existing units.  At Oct. 31, 2008,
census in the BG apartments was 363 compared to 365 at March 31,
2008.  Sales of the BG apartments through the 7-month period ended
Oct. 31, 2008 have totaled 49 which is ahead of the 46 recorded in
the same period of the prior year.  However, the turnover of
apartments in BG has kept overall occupancy unchanged.

The Outlook revision to Stable from Negative reflects Fitch's
belief that FVS will continue to generate incremental apartment
sales which will improve liquidity indicators.  Various marketing
initiatives have been successful in spite of the very difficult
operating environment.  Fitch intends to formally review FVS
within the next six months.

Friendship Village of Schaumburg is a Type B continuing care
retirement community (CCRC) currently consisting of 629
independent living apartments, 28 independent living cottages, 99
assisted living units (including 23 dementia units) and 248
skilled nursing beds.  The facility is located in Schaumburg, IL,
approximately 30 miles northwest of downtown Chicago.  In fiscal
2008, FVS had total revenues of $38.8 million.  FVS' disclosure
language provides for annual audited financials and quarterly
financial statements to be delivered to bondholders.  Fitch views
FVS' disclosure language favorably.  Disclosure to date has been
excellent and includes regularly scheduled investor calls.


INN OF THE MOUNTAIN: S&P Junks Corp. & Debt Ratings; Outlook Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Inn of the Mountain Gods
Resort and Casino (IMG) to 'CCC' from 'B'.  The rating outlook is
negative.  IMG is a wholly owned enterprise of the Mescalero
Apache Tribe, a federally recognized tribe located in south-
central New Mexico.

"The ratings downgrade reflects continued weak operating
performance and our concerns surrounding IMG's near-term liquidity
position," noted Standard & Poor's credit analyst Ariel
Silverberg.

"We expect that negative trends will continue at least through the
remainder of IMG's fiscal year (ending April 2009).  Therefore, we
believe that IMG will be challenged in the next 12 months to meet
its fixed obligations related to its senior notes and furniture,
fixtures, and equipment (FF&E) facility, totaling approximately
$30 million, as well as approximately $3 million in annual
maintenance-related capital expenditures.  IMG does not have a
revolving credit facility and must rely primarily on EBITDA
generation to service its obligations.  We estimate that if EBITDA
continues to fall at a low-teens percentage rate (EBITDA for the
first six months of fiscal 2009, ending Oct. 31, 2008, adjusted
for one-time charges, declined 13% year over year), IMG will be
challenged to meet its fixed obligations, and EBITDA interest
coverage will fall to close to 1.0x.

"The 'CCC' corporate credit rating reflects our near-term
liquidity concerns, IMG's status as a sole property operator, and
the remoteness of the casino's location.

"For the 12 months ended Oct. 31, 2008, adjusted debt to EBITDA
was 6.2x (an increase from 5.8x at April 30, 2008) and EBITDA
coverage of interest expense was 1.3x, versus 1.4x at April 30,
2008, due to a decline in EBITDA."

IMG owns and operates the Travel Center Casino, the Inn of the
Mountain Gods Resort and Casino, Ski Apache, and various outdoor
amenities.  The casinos offer a combined 1,444 slot machines and
47 table games.  IMG also owns and operates Ski Apache, the second
largest ski resort in New Mexico, as well as various outdoor
activities.  IMG draws its customer base from western Texas, as
well as population bases in southern New Mexico, such as the
cities of Las Cruces and Roswell nearly 100 miles away.  We expect
customer visitation to increase somewhat, given the recent decline
in gas prices.


JAYS FOODS: Chapter 11 Dismissed Due to Lack of Funds
-----------------------------------------------------
The United States Bankruptcy Court for the Northern District of
Illinois approved the request of Jays Foods Inc., for dismissal of
its Chapter 11 case.

According to Bloomberg News' Bill Rochelle, the Debtor told the
bankruptcy court all the assets are gone; the secured lender is
$2.9 million short of being paid in full, and the remaining
$300,000 will pay only part of the outstanding professional
expenses in the Chapter 11 effort.  Jays Foods, according to
Bloomberg, had sold its assets for $24.8 million to rival
manufacturer Snyder's of Hanover just over a year ago.

Mr. Rochelle relates that the Bankruptcy Court ruled that Jays
Foods' remaining money be used first to pay the U.S. Trustee for
its fees, with leftover funds going next to the professionals, and
then to the secured lender if anything remains.  He adds that
$1.65 million from proceeds for the sale of Jays Foods business
has been set aside to pay professional fees.

                         About Jays Foods

Chicago-based Jays Foods Inc. -- http://www.jaysfoods.com/--
wholesales confectionery products and manufactures snack chip
products.  Jays Foods leases real property, and owns certain
equipment, in Chicago, Illinois where it operates a manufacturing
facility that makes snacks mostly under the Jays, O-KE-DOKE and
Krunchers brand names.  Jays is 100% owned by Jays Holding
Company, Inc.

The company, then known as Jays Food LLC, first filed for chapter
11 protection on March 5, 2004 (Bankr. N.D. Ill. Case No. 04-
08681).  David Missner, Esq., Marc I. Fenton, Esq. and Thomas
Zwartz, Esq. at Piper Rudnick LLP were counsels to the Debtor.  In
the March 2004 case, a Section 363 sale took place and most of the
assets of former Jays Foods were sold to Jays Foods Acquisition
Inc., predecessor to Jays Foods Inc.  The March 2004 case was
closed on or about March 9, 2007.

Select Snacks Inc., on the other hand, owns real property,
improvements and equipment in Jeffersonville, Indiana where it
operates a manufacturing facility that makes private label and co-
manufactured snacks for its customers.  Select Snacks is 100%
owned by Select Snacks Holdings Company, Inc.

Both Select Holding and Jays Holding are 100% owned by Ubiquity
Brands LLC.

As of the Oct. 11, 2007, the Debtors had approximately 943
employees of which Select has 262 (211 union employees and, 51
non-union employees) and Jays has 681 total employees (236 union
employees and 445 non-union employees).

Jays Foods and Select Snacks filed voluntary chapter 11 petitions
on Oct. 11, 2007 (Bankr. N.D. Ill. Case Nos. 07-18768 and
07-18769).  Mark K. Thomas, Esq., Brian I. Swett, Esq., Jeremy T.
Stillings, Esq., Myja K. Kjaer, Esq., at Winston & Strawn LLP,
represent the Debtors.  Kurtzman Carson Consultants LLC serve as
their notice, claims and balloting agent.  The Official Committee
of Unsecured Creditors has selected Jeffrey N. Pomerantz, Esq.,
and Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones
LLP, as its counsel.


JED OIL: Alberta Court Extends CCAA Stay Until Feb. 17, 2009
------------------------------------------------------------
The Court of Queen's Bench of Alberta has extended the "Stay
Period" of JED Oil Inc.'s initial order for its creditor
protection status under the Companies' Creditors Protection Act
from Dec. 15, 2008, to Feb. 17, 2009.

The Court also approved the asset sale by the company and its
subsidiaries of non-core interests in the Ferrier and Wizard Lake
areas of Alberta and the Pinedale area of Wyoming, and enhanced
the powers of their CCAA Monitor to assist in negotiations of
asset sales, to administer their employee retention bonus plan,
and to make recommendations for cost cutting measures.

JED Oil said it also filed this news release as its third Default
Status Report under Canadian National Policy 12-203, pursuant to
which it announced that its financial statements for the third
quarter ended Sept. 30, 200,8 would not be filed by Nov. 14, 2008.

The company's deadline for filings its third quarter financial
statements is the end of the CCAA Stay Period, which has been
extended to Feb. 17, 2009.

The company reports that since announcing the original Notice of
Default on Nov. 5, 2008, and filing its first and second Default
Status Reports on Nov. 19, and Dec. 3, 2008, respectively, there
have not been any additional material changes to the information
contained therein other than the extension of the CCAA Stay
Period; nor any failure by the company to fulfill its intentions
as stated therein, and there are no additional defaults or
anticipated defaults subsequent to such announcement.

The company said it intends to file its next Default Status Report
on Wednesday, Dec. 31, 2008.

                           About JED Oil

JED Oil Inc. (AMEX: JDO) -- http://www.jedoil.com/-- is an
independent energy company that explores, develops, and produces
natural gas, crude oil, and natural gas liquids in Canada and the
United States.  As of Dec. 31, 2007, it had total proved reserves
of 3,035,000 of barrels of oil equivalent.  The company was
founded in 2003 and is headquartered in Didsbury, Canada

As reported in the Troubled company Reporter on June 5, 2008,
JED Oil Inc.'s consolidated balance sheet at March 31, 2008,
showed $90.5 million in total assets, $76.4 million in total
liabilities, and $28.5 million in convertible redeemable preferred
shares, resulting in a $14.4 million total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $15.2 million in total current
assets available to pay $72.0 million in total current
liabilities.

As reported in the Troubled Company Reporter on Aug. 27, 2008, JED
Oil Inc. and its subsidiaries, JED Production Inc., and JED Oil
(USA) Inc. have obtained creditor protection under the Companies'
Creditors Arrangement Act (Canada) pursuant to an Order obtained
on Aug. 13, 2008, from the Court of Queen's Bench of Alberta,
Judicial District of Calgary.


JOHNS MANVILLE: Travelers Appeal Goes to Supreme Court
------------------------------------------------------
Bill Rochelle of Bloomberg News reports that the U.S. Supreme
Court agreed to decide whether a confirmed Chapter 11 plan dealing
with asbestos claims can give insurance companies releases from
all claims.

According to Mr. Rochelle, by agreeing to hear the Manville
appeal, the Supreme Court will have an opportunity to rule on a
core issue in asbestos and non-asbestos bankruptcy cases where
Chapter 11 plans include provisions shutting off suits against
third parties.

The 2nd Circuit opinion, Mr. Rochelle notes, included a notably
brief analysis of "related to" bankruptcy jurisdiction.  The
opinion also included little analysis of Section 524 of the
Bankruptcy Code, the provision giving bankruptcy courts special
powers to deal with asbestos claims.

As reported by the Troubled Company Reporter on March 11, 2008,
the United States Court of Appeals for the Second Circuit held
that a lower court lacked subject matter jurisdiction to enjoin
claims against Travelers Casualty and Surety Company and its
affiliates that were predicated, as a matter of state law, on
Travelers' alleged misconduct, and were unrelated to Johns-
Manville Corp. insurance policy proceeds and the "res" of the
Manville estate.

Circuit Judges Guido Calabresi, Sonia Sotomayor and Richard C.
Wesley, in a 28-page opinion, vacated an order by the U.S.
District Court for the Southern District of New York affirming a
2004 decision by the U.S. Bankruptcy Court for the Southern
District of New York approving settlements entered into by
Travelers.

                     Direct Action Lawsuits

Travelers served as Manville's primary insurer from 1947 through
1976.  Travelers paid nearly $80,000,000 into the bankruptcy
estate -- in addition to $20,000,000 already paid in litigation
expenses on behalf of Manville -- in exchange for a "full and
final release of Manville-related claims."

Travelers' settlement, like those of other Manville insurers, was
predicated upon the bankruptcy court issuing an injunction that
barred suits against Manville's insurers -- including Travelers --
and directed litigation by potential claimants instead against the
Manville Personal Injury Settlement Trust.  The injunction --
embodied in a 1986 order confirming Manville's plan of
reorganization and a separate 1986 Insurance Settlement Order --
channeled to the Manville Trust any and all claims that were based
on, arose out of, or related to  Manville's liability insurance
policies.

The Confirmation Order enjoined "all persons" from commencing any
action against any of the Settling Insurance Companies "for the
purpose of, directly or indirectly, collecting, recovering or
receiving payment of, on or with respect to any Claim . . . or
Other Asbestos Obligation. . . ."

Undeterred by the 1986 orders, various groups of plaintiffs sued
Travelers and other insurers in several states based on statutory
regulation of insurance practices and common law theories.

The statutory claimants assert the rights of individuals who are
dissatisfied with the settlements they received after negotiating
with Travelers acting on behalf of Manville, or who declined to
file personal injury suits against Manville because Travelers
allegedly suppressed information about asbestos hazards and
intentionally propagated an allegedly-fraudulent "state of the
art" defense to frustrate the claimants' rights.  The plaintiffs
allege that Travelers acquired knowledge about the dangers of
asbestos through early asbestosis claims from as far back as the
1950s, "recognized the potential for future escalation of asbestos
litigation and . . . influence[d] Manville's purported failure to
disclose  knowledge about asbestos hazards."

The common law claimants assert that Travelers violated alleged
duties to disclose certain asbestos-related information it learned
from Manville during Travelers' long tenure as Manville's primary
insurer.

                       Travelers Settlement

In June 2002, Travelers asked the Bankruptcy Court to enjoin 26
independent actions pending in Louisiana, Massachusetts, Texas,
and West Virginia state courts pursuant to the 1986 orders.  After
holding a series of hearings, the Bankruptcy Court referred the
matter to mediation and appointed the Honorable Mario M. Cuomo,
former Governor of the state of New York, as mediator.

Three classes of plaintiffs settled with Travelers.  The
settlements, which totaled almost $500,000,000, were conditioned
upon the Bankruptcy Court's entry of an order clarifying that the
Direct Action lawsuits are, and have always been, prohibited by
the 1986 orders.

Bankruptcy Court Judge Burton Lifland, who oversees the Johns
Manville cases, in August 2004 approved the Settlement Agreement
and entered a clarfying order specifying that the Direct Action
lawsuits against Travelers were barred by the 1986 orders.

The District Court affirmed the Bankruptcy Court's findings of
fact and conclusions of law, calling the Direct Action Claims as
"creatively pleaded attempts to collect indirectly against the
Manville insurance policies."  The District Court concluded that
"barring these claims was a proper exercise of jurisdiction."

                      Second Circuit Appeal

Chubb Indemnity Insurance Company and a group of asbestos personal
injury claimants elevated the matter to the Second Circuit, among
others, arguing that the Bankruptcy Court was without jurisdiction
to enjoin third-party non-debtor suits against Travelers.  The
Appellants argued that the Bankruptcy Court failed to properly
distinguish between (a) claims that seek to recover directly from
Travelers for Travelers' separate acts; and true Direct Action
suits that seek to recover from an insurer contractually obligated
to indemnify Manville for its misconduct.

Travelers argued that the Bankruptcy Court was merely enforcing
its prior order.

The Second Circuit said the case concerns the outer reaches of a
bankruptcy court's jurisdiction.

"[W]hile there is no doubt that the bankruptcy court had
jurisdiction to clarify its prior orders, that clarification
cannot be used as a predicate to enjoin claims over which it had
no jurisdiction," the Second Circuit said in its decision dated
Feb. 15, 2008.

The Second Circuit held that the lower courts appeared to view the
jurisdictional inquiry as a factual one: if the direct actions
"arose out of" or are "related to" the Manville-Travelers
relationship, then the court had jurisdiction.  The Second
Circuit, however, noted that factual determination was only half
of the equation, and that the nature and extent of Travelers' duty
to the Direct Action plaintiffs is a function of state law.
Neither the District Court nor the Bankruptcy Court looked to the
laws of the states where the claims arose to determine if indeed
Travelers did have an independent legal duty in its dealing with
plaintiffs, notwithstanding the factual background in which the
duty arose, the Second Circuit said.

The Second Circuit remanded the case for the Bankruptcy Court to
examine whether, in light of the appellate court's opinion, it had
jurisdiction to enjoin claims against Travelers.

Travelers has asserted that if any portion of the Bankruptcy
Court's clarifying order is vacated then all of the relevant
settlements will terminate.

The Second Circuit clarified that it is not offering any opinion
on the matter and will leave it to the settling parties, with the
aid of the Bankruptcy Court, to determine the status of their
settlements.

Manville was, by most sources, the largest manufacturer of
asbestos-containing products and the largest supplier of raw
asbestos in the United States from the 1920s until the 1970s.
Manville sold raw asbestos to manufacturers of asbestos-based
products in 58 countries and distributed its own asbestos-based
products "across the entire spectrum of industries and employment
categories subject to asbestos exposure."

As a result of studies linking asbestos with respiratory disease,
Manville became the target of a growing number of products
liability lawsuits in the 1960s and 1970s.  Buckling under the
weight of its asbestos liability, Manville filed for Chapter 11
protection on August 26, 1982, before Judge Burton Lifland.

To avoid the uncertainty of insurance litigation and to fund its
plan of reorganization, Manville sought to settle its insurance
claims.  Manville obtained in excess of $850,000,000 from
settlements with its insurers.  The U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
Debtors' Second Amended and Restated Plan of Reorganization on
Dec. 22, 1986.


JP MORGAN COMMERCIAL: Fitch Holds 'C/DR5' Rating on Class J Certs.
------------------------------------------------------------------
Fitch Ratings affirms and assigns Rating Outlooks for J.P. Morgan
Commercial Mortgage Finance Corp.'s mortgage pass-through
certificates, series 1999-C8:

   -- $117.2 million class A-2 at 'AAA'; Outlook Stable;
   -- Interest-only class X at 'AAA'; Outlook Stable;
   -- $36.6 million class B at 'AAA'; Outlook Stable;
   -- $32.9 million class C at 'AAA'; Outlook Stable;
   -- $14.6 million class D at 'AAA'; Outlook Stable;
   -- $25.6 million class E at 'AAA'; Outlook Stable;
   -- $11 million class F at 'AAA'; Outlook Stable;
   -- $16.5 million class G at 'A-'; Outlook Stable;
   -- $20.1 million class H at 'B'; Outlook Negative;
   -- $14.8 million class J at 'C/DR5'.

Classes K and NR have been reduced to zero due to realized losses.
Class A-1 has paid in full.

Affirmations are due to sufficient credit enhancement as a result
of amortization, loan repayment, and defeasance.  As of the
November 2008 distribution date, the pool's aggregate performance
has been reduced 60.5% to $289.3 million from $731.5 million.
Rating Outlooks reflect the likely direction of any rating changes
over the next one to two years.

Approximately 33.4% of the pool has defeased, including five of
the top 10 loans. Of the pool, 78% is scheduled to mature in the
next twelve months; however, 35% of these maturing loans have
defeased.

There are currently seven specially serviced loans (16.2%),
including the largest remaining loan.  The largest remaining loan
(7.5%) is backed by a 692-unit multifamily property located in
Rolling Meadows, IL, a suburb of Chicago.  The loan is currently
30 days delinquent and has had a history of delinquency throughout
the life of the loan.  The property is currently listed for sale.
At this time, Fitch does not expect losses to the trust.

The second largest specially serviced loan (2.1%) is backed by a
121,639 square foot office property located in Kansas City, MO.
The loan was transferred on June 2, 2008 due to imminent default.
The special servicer is pursuing foreclosure and expects to take
title by March 2009.  Losses are possible.

Fitch has identified 18 loans (32.1%) as Fitch Loans of Concern.
These include specially serviced loans, loans with DSCRs below 1.0
times, loans with declining occupancies, and loans with other
performance issues.  The largest non-specially serviced Loan of
Concern is collateralized by an office in Seattle, Washington.  A
major tenant occupying approximately 31% of the net rentable area
will vacate in February 2009.  The space is currently being
marketed.


KANSAS SOUTHERN: Moody's Rates Proposed Sr. Unsec. Notes at B2
--------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to Kansas City
Southern Railway Company's proposed senior unsecured notes due
2013.  Parent company The Kansas City Southern's Corporate Family
Rating was affirmed at B1.  The rating outlook is stable.

On December 15, 20008, KCS and KCSR announced plans to commence an
offering of $175 million of Senior Notes due 2013.  The company
intends to use the proceeds from these notes to repurchase
$200 million aggregate principal amount of its 7-1/2% Senior Notes
due 2009 and to pay the fees and expenses associated with such
repurchase.

Kansas City Southern's B1 rating reflects on-going improvement in
the company's railroad operations, stemming largely from high, but
appropriate levels of investment in both its equipment and
infrastructure over the past several years.  Revenue growth,
service levels, and profitability have improved materially over
recent years, and are expected to be sustained at historically
strong levels through 2009 despite volume weakness affecting the
entire industry.  However, as a result of the aggressive capital
spending program, KCS carries significant debt balances, and will
likely continue to do so for the foreseeable future.  Credit
metrics, which are somewhat strong for the B1 rating, are expected
to remain stable for the near term.

The B2 rating on KCSR's senior unsecured notes, one notch below
the corporate family rating, reflects the junior priority of this
class of debt to approximately $400 million of senior secured debt
obligations.

The stable outlook reflects Moody's expectations that the company
will be able to report modest sales growth through 2009, despite
weakness in the U.S. economy in general, and that the current
pricing environment will hold up through this period, resulting in
stable yields.  Moody's expects the company's operating ratio to
remain at or below 80% for the near term.  Also, although debt is
expected to increase over this period, credit metrics are expected
to remain stable as the result of sustained operating
profitability and modest growth.

Ratings would face downward adjustment if the company is
unsuccessful at redeeming substantially all of the near term
maturities, regardless of the outcome of the current notes
offering.  The ratings could also be pressured down following any
unexpected shock to the rail system in either the U.S. or in
Mexico, or loss of fluidity determined by a decline in velocity to
below 20 mph.  Deterioration of credit metrics to levels such as
debt to EBITDA of greater than 5 times or EBIT to interest
coverage of less than 1.8 times would also warrant a lower rating.
Conversely, the rating could be raised following consistently
strong free cash flow at both KCSR and KCSM, with an Operating
Ratio below 80% for a sustained period, and debt to EBITDA (using
Moody's standard adjustments) below 3.8 times at KCSR and KCSM.

The last rating action on KCS and KCSR was an upgrade of the
company's Corporate Family Rating to B1 on May 19, 2008.

Kansas City Southern's ratings were assigned by evaluating factors
Moody's believes are relevant to the credit profile of the issuer,
such as i) the business risk and competitive position of the
company versus others within its industry, ii) the capital
structure and financial risk of the company, iii) the projected
performance of the company over the near to intermediate term, and
iv) management's track record and tolerance for risk.  These
attributes were compared against other issuers both within and
outside of KCS's core industry and KCS's and KCSR's ratings are
believed to be comparable to those of other issuers of similar
credit risk.

Kansas City Southern operates a Class I railway in the central
U.S. and, through its wholly-owned subsidiary Kansas City Southern
de Mexico, S.A. de C.V., owns the concession to operate Mexico's
northeastern railroad. KCS acquired full ownership of KCSM
(formerly TFM, S.A. de C.V.) through a series of transactions
during 2005 from what had been a large minority-ownership
position.


KANSAS SOUTHERN: S&P Assigns 'BB-' Rating on $190MM Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Kansas City Southern Railway Co.'s proposed $190 million senior
notes due 2013.  The issue-level rating on the notes is one notch
higher than the corporate credit ratings on KCSR and its parent,
Kansas City Southern (both entities rated B+/Developing/--).  "We
assigned a '2' recovery rating to this debt, indicating that
lenders can expect substantial (70%-90%) recovery in the event of
a payment default.  The company will use proceeds from the debt
issue, along with other borrowings, to repurchase the $200 million
7.5% senior notes due 2009," S&P said.

Ratings on Kansas City Southern reflect its highly leveraged
capital structure, substantial capital spending requirements, and
challenges associated with its integration of Kansas City Southern
de Mexico S. de R.L. de C.V., the Mexican railroad company it
acquired in April 2005.  Offsetting these risks to some extent are
the favorable characteristics of the U.S. freight railroad
industry and the company's strategically located rail network.

According to S&P: "Kansas City Southern has been spending a
significant amount on capital investments over the past few years,
and this has caused debt levels to remain high and has constrained
liquidity at times.  Still, yield and efficiency improvements have
led to somewhat improved operating performance and this has
translated into improved financial measures.  Funds from
operations (FFO) to debt (adjusted for operating leases) is now in
the upper-teens percentage area (versus 8% in 2005), and adjusted
debt to capital is in the mid-50% area (compared with the low-60%
area in 2005).  Although debt levels are likely to remain
relatively unchanged because of ongoing investments in
infrastructure and equipment, we expect further improvement in
operating metrics over time as the company benefits from some new
revenue opportunities, a continuing favorable pricing environment,
and further efficiency gains.

"However, the slowing U.S. economy will likely temper improvement
over the short term.  Standard & Poor's expects to revise our
rating outlook on Kansas City Southern to stable from developing
upon the successful completion of the proposed debt offering.
While the refinancing will lessen our near-term concerns regarding
liquidity, thus making it less likely that we will lower the
rating, the refinancing does not increase liquidity either.  That,
and the worsening economic picture, makes it less likely that
ratings will be upgraded over the near term."

     Rating List

     Kansas City Southern
     Kansas City Southern Railway Co.
       Corporate Credit Rating                B+/Developing/--

     Rating Assigned

     Kansas City Southern Railway co.
       $190 Mil. Senior Notes Due 2013        BB-
       Recovery Rating                        2


KAUPTHING BANK: Court to Hear Chapter 15 Petition on January 21
---------------------------------------------------------------
On Nov. 30, 2008, Olafur Gardasson, assistant for Kaupthing Bank
hf., in a proceeding under Act No. 21/1991, pending before the
Reykjavik District Court, and foreign representative of the
Debtor, filed a petition under chapter 15 of tigle 11 of the
United States Code in the United States Bankruptcy Court for the
Southern District of New York commencing the Debtor's chapter 15
case ancillary to the Icelandic Proceeding and seeking recognition
for the Icelandic Proceeding as a "foreign main proceeding" under
the Bankruptcy Code and relief in aid of the Icelandic Proceeding.

Pursuant to the Order Scheduling Hearing on Recognition of Foreign
Main Proceeding and Specifying the Form and Manner of Service of
Notice of Chapter 15 Petition and Recognition Hearing, dated
December 1, 2008, the Bankruptcy Court has scheduled a hearing to
consider the Foreign Representative's request for recognition of
the Icelandic Proceeding as a "foreign main proceeding" pursuant
to sections 1517 of the U.S. Bankruptcy Code and related relief on
January 21, 2009 at 10:00 a.m. (Eastern time) before the Honorable
Martin Glenn in Room 501 of the United States Bankruptcy Court,
Alexander Hamilton Custom House, One Bowling Green, New York, NY
10004-1408.

Any party in interest wishing to submit a response or answer to
the relief requested by the Foreign Representative must do
pursuant to the U.S. Bankruptcy Code and the Local and Federal
Rules of Bankruptcy Procedure, including, without limitation, Rule
1011 of the Federal Rules of Bankruptcy Procedure, in writing and
setting for the bases therefore and the nature  and extent of the
respondent's interests in the Debtor's assets, and such response
or answer must be filed with the Office of the Clerk of the Court,
Alexander Hamilton Custom House, One Bowling Green, New York,
NY10004-1408, and served on the attorneys for the Foreign
Representative Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York, 10153 U.S.A., Attn: Marcia L. Goldstein, Gary T.
Holtzer and Sharon J. Richardson, Esquires, so as to be received
by them no later than 5:00 p.m. (Eastern time) on January 8, 2009.
Replies to any such responses or answers shall be filed with the
Court with a copy to Chambers, and served upon the responding
parties so as to be received no later than 5:00 p.m. (Eastern
time) on January 15, 2009.

All parties in interest opposed to the Foreign Representative's
request for relief must appear at the Hearing at the time and
place set forth above.

The hearing may be adjourned from time to time without further
notice other than an announcement in open court at the Hearing of
the adjourned date or dates or any further adjourned hearing.

If no response or objection is timely filed and served as provided
above, the Bankruptcy Court may grant the recognition and relief
requested by the Foreign Representative without further notice or
hearing.

                      About Kaupthing Bank

Headquarted in Reykjavik, Iceland, Kaupthing Bank --
http://www.kaupthing.com-- is engaged in the provision of
financial services, such as private banking, asset management,
pension services, brokerage services, investment banking, as well
as corporate and retail banking.  The Bank's offer is targeted at
companies, institutional investors and individuals.  The Bank is
operational in thirteen countries, including Luxembourg,
Switzerland, the Nordic countries, the United Kingdom and the
United States.  The main subsidiaries include Kaupthing Singer &
Friedlander and FIH Erhvervsbank.

                           *    *    *

As reported in the Troubled Company Reporter-Europe on
October 13, 2008, Fitch Ratings downgraded Kaupthing Bank hf.'s
Long-term Issuer Default rating to 'D' from 'CCC' and removed it
from Rating Watch Evolving.  This follows the announcement that
Kaupthing is now subject to similar arrangements as its two
Icelandic peers, Glitnir Banki and Landsbanki Islands, with the
Icelandic authorities effectively seizing control of the bank.

At the same time, Moody's Investors Service downgraded the bank
financial strength rating (BFSR) of Kaupthing Bank hf to E from
D+, its long-term deposit ratings to Caa1 from Baa3, the long-term
senior debt ratings to Caa2 from Ba1.  In addition, Moody's
downgraded the bank's subordinated debt to C from Ba2 and its
preferred stock to C from B1.  The bank's short-term rating was
downgraded to Not-Prime from P-3.  Moody's is maintaining
Kaupthing's long-term deposit ratings, the long-term senior debt
ratings and its BFSR on review for further possible downgrade.


KB TOYS: U.S. Trustee Forms Seven-Member Creditors Committee
------------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed seven creditors to serve on an Official Committee of
Unsecured Creditors for KB Toys Inc. and its debtor-affiliates.

The creditors committee members are:

   1) Li & Fung Toy Island Mfr.
      Attn: Martin Leder
      1359 Broadway
      New York, NY 10018
      Tel: (646) 839-7007
      Fax: (646) 839-7476

   2) Mattel, Inc.
      Attn: Kathleen Simpson-Taylor
      333 Continental Blvd.
      El Segundo, CA 90245
      Tel: (310) 252-4223
      Fax: (310) 252-5119

   3) Hasbro, Inc.
      Attn: Frada Salo
      200 Narragansett Park Drive
      Pawtucket, RI 02862
      Tel: (401) 431-8102
      Fax: (401) 431-8586

   4) JJ Bean, Inc.
      Attn: Jordan Sadoff
      1546 Bourbon Pkwy.
      Streamwood, IL 60107
      Tel: (630) 837-9974
      Fax: (866) 861-2895

   5) GGP Limited Partnership
      Attn: Julie Minnick Bowden
      110 North Wacker Drive
      Chicago, IL 60606
      Tel: (312) 960-2707
      Fax: (312) 442-6374

   6) Simon Property Group, Inc.
      Attn: Ronald M. Tucker
      225 W. Washington Street,
      Indianapolis, IN 46204
      Tel: (317) 263-2346
      Fax: (317) 263-7901

   7) Big Lots, Inc.
      Attn: Charles W. Haubiel II
      300 Phillipi Road
      Columbus, OH 43228
      Tel: (614) 278-6767
      Fax: (614) 278-3319

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense.  They may investigate the Debtor's business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

                           About KB Toys

Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. --
http://www.kbtoys.com-- operates a chain of retail toy stores.
On Jan. 14, 2008, the Debtor and 69 of its affiliates filed for
protection under Chapter 11 of the Bankruptcy Code, which were
administratively consolidated under Case No. 04-10120.  Two of the
200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of
Massachusetts Inc.  In connection with the emergence of KB Toys
from bankruptcy in August 2005, and the subsequent organizational
restructuring, the assets and operations of may of these prior
debtors were transferred among then existing debtor entities and
consolidated with KB Toys Group.  Furthermore, most of the
entities involved were either dissolved or were merged into
surviving entities, and several of them changed their names.  As
a result, nine Debtors and four inactive special purpose units
which are not debtors.

The company and eight of its affiliates filed for Chapter 11 on
December 11, 2008 (Bankr. D. Del. Lead Case No. 08-13269).  Joel
A. Waite, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway,
Stargatt & Taylor LLP, represent the Debtors in their
restructuring efforts.  The Debtors proposed Wilmer Cutler
Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting
Inc. as financial and restructuring advisor, and Epiq Bankruptcy
Solutions LLC as claims and noticing agent.  When the Debtors
filed for protection from their creditors, they listed assets and
debts between $100 million to $500 million each.


LAGUNA DEVELOPMENT: Industry to Remain Under Pressure in 2009
-------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


LANDAMERICA FIN'L: Stewart Balks at Sale; Says It Has "Best" Bid
----------------------------------------------------------------
Stewart Information Services Corporation said the sale of
LandAmerica Financial Group Inc.'s two principal title insurance
underwriters, Commonwealth Land Title Insurance Company and
Lawyers Title Insurance Corporation, should be denied, asserting
that it had the highest and best offer for those units.

As reported by yesterday's Troubled Company Reporter,
notwithstanding objections by various parties, including Stewart,
the United States Bankruptcy Court for the Eastern District of
Virginia approved Fidelity National Financial Inc.'s acquisition
of Commonwealth and Lawyers Title.

                Stewart's "Highest and Best" Offer

Henry P. Long, III, Esq., at, Hunton & Williams LLP, Richmond,
Virginia, noted that Stewart Information is offering a $5 million
cash payment, the forgiveness of $134.1 million of intercompany
debt, and the ability of the estate's creditors to participate in
the success of the purchased companies via a substantial
$20 million equity stake in Stewart Information at a substantial
discount to tangible book.  Stewart Information's proposal is the
highest and best offer for the Assets, he maintained.

By comparison, Mr. Long said, Stewart would respectfully suggest
that Fidelity's competing offer of about $298 million, though
impressive in the nominal magnitude of the compensation, must
nevertheless be deeply discounted on a real basis given the
tremendous regulatory hurdles facing its consummation.  He
maintained that there is no certainty that, even if all of the
contingency hurdles in Fidelity's Stock Purchase Agreement were
met, the transaction as proposed in the SPA would be achieved as
the value of the asset would then be much lower.

              Stewart, Old Republic Want Market Test

Stewart asserted that it is uncommon for a debtor to seek to
conduct a sale of a significant business unit without at least
establishing some form of bid and auction protocols so that
competing bidders have some degree of assurance that their bids
will be duly considered and presented to the Court, creditors and
other and parties-in-interest.

The Court should order an expedited procedure for identifying all
potential purchasers and establish a bid procedures process for
the submission and evaluation of offers for the Underwriters
Assets, Old Republic International Corporation contended.

Old Republic and its subsidiaries said they weren't contacted by
LFG with respect to the Underwriters sale.  Old Republic
currently holds about 9.9% of LFG's outstanding common stock.

Old Republic warned that Fidelity's acquisition of the
Underwriters would result in Fidelity holding an unacceptably
large share of the national title insurance market, which would
directly threaten the competitive process.  Fidelity's aggregate
market share would total approximately 45%.

           Buyer: Stewart Did Not Make Binding Offer

Augustus C. Epps, Jr., Esq., at Christian & Barton, LLP, in
Richmond Virginia, asserted, on FNF's behalf, that while Stewart
and Old Republic, as potential over-bidders, objected to the Sale
Motion, they do not have a meaningful stake in the outcome of the
Debtors' bankruptcy cases and therefore lack standing to object
to the Sale Motion.  Moreover, he pointed out, despite having
conducted prior due diligence, neither Stewart nor Old Republic
has made a binding offer to purchase the Property.

Mr. Epps noted that the property that is the subject of the Sale
Motion is deteriorating in value by the day.  He said FNF has no
interest in purchasing the Property unless it can consummate the
sale by December 22, 2008.  He averred that FNF's offer is vastly
superior to Stewart's offer, in that FNF has offered $198 million
in cash as opposed to Stewart's offer of $5 million in cash; and
FNF's offer as a whole exceeds that of Stewart by more than
$200 million.

                    Court Denies Objections

Aside from the two potential buyers, other key stakeholders,
including the Official Committee of Unsecured Creditors of
LandAmerica Financial Group, Inc., objected to the sale.  On
behalf of the Committee, Christopher L. Perkins, Esq., at
LeClairRyan, in Richmond Virginia, argued that the sale process is
fundamentally flawed and that there are simply too many important,
unanswered questions to allow the proposed sale to be approved
without considerable scrutiny.  He noted, among other things, that
no evidence has been presented that any effort has been made to
seek out other potential purchasers of the stock of the
Underwriters. The Creditors Committee, according to Bloomberg
News' Bill Rochelle, has request a seven- to 10-day delay in the
sale of the title companies.

In a hearing held December 16, 2008, Judge Heunnekens, however,
opined that Debtors LandAmerica Financial Group, and affiliate
LandAmerica 1031 Exchange Services, Inc., exercised their business
judgment and approved the sale of Commonwealth Land Title
Insurance Company and Lawyers Title Insurance Company to Fidelity
National Title Insurance Company pursuant to an amended stock
purchase agreement.

In response to Stewart's objection and offer, LFG said it was
baffled why Stewart Information didn't a draft agreement before
the Court hearing on the proposed sale.  LFG maintained that it
actively pursued various strategic alternatives, but no other
meaningful offers have emerged.

The Debtors reiterated that they don't have a choice, and must do
everything within their control to sell the Underwriters' stock
without delay.  They averred the FNF's offer remain the best and
only viable offer they can work with.

LFG disclosed in an 8-K filing with the Securities and Exchange
Commission, that it entered into an amended and restated Stock
Purchase Agreement with Fidelity National Title Insurance Company
and Chicago Title Insurance Company on December 12, 2008.

LandAmerica Executive Vice President and Chief Legal Officer
Michelle H. Gluck relates that under the revised terms, FNTIC and
Fidelity National Financial Inc. will acquire (1) the capital
stock of Lawyers Title Insurance Company from LandAmerica, and
(2) Chicago Title Insurance will acquire the capital stock of
Commonwealth Land Title Insurance Company from LandAmerica for an
aggregate purchase price of:

  -- $181,762,521, subject to potential reduction;

  -- shares of FNF common stock equal to $50,000,000 divided by
     the greater of $14 or the closing price of FNF common stock
     on the New York Stock Exchange for the trading day prior to
     the closing date; and

  -- a subordinated promissory note issued by Fidelity in an
     initial principal amount equal to $50,000,000.

In addition, subject to the closing conditions set forth in the
Purchase Agreement, FNTIC will acquire the capital stock of
United Capital Title Insurance Company from an indirect
subsidiary of LandAmerica for a purchase price equal to a
statutory measure of the net worth of United Capital Title as of
the closing.

The Amended Purchase Agreement also provide for these changes:

  (a) If the closing conditions under the Purchase Agreement
      have been satisfied except for California state insurance
      approval with respect to the United Capital Sale and the
      completion of any rehabilitation proceedings with respect
      to United Capital Title, the Sale will close and the
      closing of the United Capital Sale will be deferred until
      the conditions relating to United Capital are either
      satisfied or waived.

  (b) The Purchase Agreement may be terminated by FNTIC or
      Chicago Title Insurance if the closing of the Sale has not
      occurred by December 22, 2008.

  (c) The Purchase Agreement no longer contemplates entry into
      an escrow agreement with respect to LandAmerica's
      indemnification obligations under the Purchase Agreement
      and instead, the indemnification obligations, if any, will
      be funded by a reduction in the principal amount of the
      FNF Note.

                    About LandAmerica Financial

LandAmerica Financial Group, Inc. is a leading provider of real
estate transaction services with offices nationwide and a vast
network of active agents. LandAmerica serves its agent,
residential, commercial and lender customers throughout the
United States, Mexico, Canada, the Caribbean, Latin America,
Europe and Asia.

LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E. D. Virginia, Lead Case No. 08-35994).
Dion W. Hayes, Esq., and John H. Maddock III, Esq., at
McGuireWoods LLP, are the Debtors' bankruptcy counsel.

In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.  (LandAmerica Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


LANDAMERICA FINANCIAL: Taps Zolfo Cooper's J. Mitchell as CRO
-------------------------------------------------------------
Debtor LandAmerica Financial Group, Inc., sought and obtained
authority from the U.S. Bankruptcy Court for the Eastern District
of Virginia to enter into a services agreement with Jonathan A.
Mitchell and Zolfo Cooper Management, LLC.

Pursuant to the Agreement, the Debtor will appoint Mr. Mitchell,
a senior managing director of Zolfo Cooper, as its Chief
Restructuring Officer and additional individuals provided by
Zolfo Cooper that will perform other services required by Zolfo
Cooper and Mr. Mitchell nunc pro tunc to the Petition Date.

Pursuant to an engagement letter, the Debtor engaged Zolfo Cooper
on November 22, 2008, to:

  (i) advise and assist management in forecasting, planning,
      controlling and other aspects of managing cash of the
      Debtor;

(ii) advise and assist it regarding contingency planning for a
      Chapter 11 proceeding, if required;

(iii) advise and assist management in developing restructuring
      alternatives;

(iv) advise and assist management in negotiating and
      implementing the Debtor's selected capital restructuring
      plan with various creditors, as necessary; and

  (v) provide other services as the Debtor requests.

Zolfo Cooper has provided services as of the date of the
engagement letter up to immediately prior to the Debtors'
bankruptcy filing.

Pursuant to a related Services Agreement dated November 26, 2008,
among the parties, Zolfo Cooper and Mr. Mitchell will be
authorized to make decisions with respect to all aspects of the
management and operation of the Debtor's business, in a manner
they deem necessary or appropriate under the direction of the
Board in a manner consistent with the business judgment rule and
the provisions of local law and the Bankruptcy Code.   Zolfo
Cooper, Mr. Mitchell and the Associate Directors, however, will
not have any authority to make decisions with respect to hiring
or terminating officers, executing transactions, or otherwise
committing the Debtor or its resources other than in the ordinary
course of business.

Zolfo Cooper and Mr. Mitchell will keep the Debtor's Board of
Directors fully apprised of their findings, plans and activities.

The services of Zolfo Cooper and Mr. Mitch will be (a) provided
to the Debtor at its request; (b) appropriately directed by the
Debtor so as to avoid duplicative efforts among the professionals
retained in the case; and (c) performed in accordance with
applicable standards of the accounting profession.

Consistent with the terms of the Agreement, the Debtor has
provided a $300,000 security retainer to Zolfo Cooper, which
Zolfo Cooper will hold throughout its engagement.  The retainer
secures final payment of invoices for services rendered to be
rendered by the firm.  As of the Petition Date, Zolfo Cooper did
not hold a prepetition claim against the Debtor for services
rendered.

Zolfo Cooper, Mr. Mitchell and the Associate Directors will be
paid for their services according to these hourly rates:

         Professional              Hourly Rate
         ------------              -----------
         Managing Directors        $695 - $720
         Professional Staff        $200 - $665
         Support Personnel         $45 - $225

In addition to the hourly fees, Zolfo Cooper will also be
entitled to be paid a contingent fee based upon the cash proceeds
generated from the sale of all or a portion of the Debtor's
assets:

  (i) The Debtor will pay Zolfo Cooper 2% of the Proceeds up to
      $50 million but less than $500,000.

(ii) The Debtor will pay Zolfo Cooper 1.5% of the Proceeds
      between $50 million to $100 million.

(iii) The Debtor will pay Zolfo Cooper 1.0% of Proceeds over
      $100 million.

A contingent fee will not be payable to Zolfo Cooper for Proceeds
resulting from the sale of the Debtor's interest in Centennial
Bank or the regulated insurance subsidiaries.

The Debtor will also reimburse Zolfo Cooper's, Mr. Mitchell's and
Associate Directors' reasonable out-of-pocket expenses, including
costs of travel, reproduction, legal counsel, any applicable
state sales or excise tax and other direct expenses.

Because Zolfo Cooper and Mr. Mitchell are not being employed as
professionals under Section 327 of the Bankruptcy Code, they will
not be submitting fee applications pursuant to Sections 330 and
331.  However, on or about the 15th day of each month, Zolfo
Cooper will file and serve a report, which outlines the
compensation and reimbursable expenses set forth in its invoice
from the prior month.

The Debtor will indemnify and hold harmless Mr. Mitchell, the
Associate Directors, and Zolfo Cooper against any losses, claims,
damages, or liabilities arising out of Zolfo Cooper and Mr.
Mitchell's engagement with the Debtor.

Mr. Mitchell, a senior managing director of Zolfo Cooper, says he
has been able to ascertain after due inquiry that none of Zolfo
Cooper's managing directors or employees is related to the
Debtor, its creditors, other parties-in-interest, the U.S.
Trustee or anyone employed in the U.S. Trustee's office; or
represents any interest adverse to any party except that Zolfo
Cooper is connected to the Debtor.

Mr. Mitchell adds that to the extent Zolfo Cooper or its
affiliates may represent or has represented certain of the
Debtor's creditors or other parties-in-interest, that
representation has been in matters unrelated to the Debtor's
Chapter 11 case.

                     Committees Objected

Before the Court entered its ruling, the Official Committee of
Unsecured Creditors of LandAmerica Financial Group, Inc., and
LandAmerica 1031 Exchange Services, Inc., informed the Court of
their position on the Zolfo Cooper and Jonathan Mitchell
retention.

The LES Committee and the LFG Committee complained that the
Contingent Fee to be paid to Zolfo Cooper and Mr. Mitchell is
unreasonable and unjustified under the facts and circumstances
of the Debtors' cases.

Mary A. House, Esq., at Akin Gump Strauss Hauer & Feld LLP,
Dallas, Texas, reminded the Court that

The Committees noted that the Zolfo Cooper Retention provides
that the Contingent Fee will not apply to the sale of LFG's
interest in Centennial Bank and the "regulated insurance
subsidiaries"; however those subsidiaries are not defined.  The
Committees opposed the Application to the extent the Contingent
Fee applies to payment of fees for services which fail to benefit
a debtor's estate.

Moreover, the payment of a set contingent fee for proceeds up to
$50 million is simply not reasonable, the Committees argued, as
it may result in Zolfo Cooper receiving amounts
disproportionately large compared to the size of the cash
proceeds.  They added that LFG has provided no evidence that
Zolfo Cooper was instrumental in the postpetition Sale Motion
process.

The LES Committee is also concerned that although only LFG is
seeking to retain Zolfo Cooper, the firm may ultimately seek
compensation for services allegedly provided to LES.

                    About LandAmerica Financial

LandAmerica Financial Group, Inc. is a leading provider of real
estate transaction services with offices nationwide and a vast
network of active agents. LandAmerica serves its agent,
residential, commercial and lender customers throughout the
United States, Mexico, Canada, the Caribbean, Latin America,
Europe and Asia.

LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E. D. Virginia, Lead Case No. 08-35994).
Dion W. Hayes, Esq., and John H. Maddock III, Esq., at
McGuireWoods LLP, are the Debtors' bankruptcy counsel.

In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.  (LandAmerica Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


LANDAMERICA FIN'L: Seeks to Remit Segregated Section 1031 Funds
---------------------------------------------------------------
Debtor LandAmerica 1031 Exchange Services, Inc., seeks authority
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to remit in full certain segregated funds pursuant to
exchange agreements with customers.

LandAmerica 1031 operated as a qualified intermediary under
Section 1.1031(k)-1(g)(4) of the Treasury Regulations and Section
1031 of the Internal Revenue Code.  Pursuant to Section 1031 of
the Tax Code and Treasury Regulations, if a taxpayer adheres to
certain guidelines, then all or a portion of the gains from the
disposition of business or investment property can be deferred.
To qualify for a tax deferral, the taxpayer must structure the
transaction as an exchange of one property for another of like
kind.  This includes a requirement that the taxpayer receive the
new like kind property within 180 days after the date on which the
taxpayer transferred the relinquished property.  LES entered into
agreements with its customers whereby it acquired the net
proceeds of the sales of relinquished properties in order to
facilitate a like-kind exchange.  LES entered into two primary
types of Exchange Agreements: (i) agreements that require LES to
segregate the applicable Exchange Funds; and (b) agreements that
do not require segregation.

Dion W. Hayes, Esq., at McGuirewoods LLP, in Richmond, Virginia,
relates that all of the Exchange Agreements provide that a
customer will have no right, title or interest in or to the
Exchange Funds or any earnings thereon and that a customer will
have no right, power or option to demand, call for, receive,
pledge or otherwise obtain the benefits of any Exchanged Funds or
any earnings thereon, including interest, if any, earned on the
Exchanged Funds except that the balance of the Exchange Funds, if
any, held by LES after applying the Exchange Funds in accordance
with the Exchange Agreement will be paid to the customer on the
Termination Date.  None of the Exchange Agreements contains
language describing them as an express trust.

Mr. Hayes points out that the Segregated Exchange Agreements,
however, contain provisions that change characterization of the
party that maintains the right, title or interest in or to the
Exchange Funds.  The provisions, among others, require LES to
segregate the applicable Exchange Funds and hold the Segregated
Exchange Funds in a segregated bank account until the Termination
Date.  Moreover, the Segregated Exchange Funds are maintained in
separate bank accounts and associated with the applicable
customer's name and tax identification number.  In this regard,
he avers, the strict segregation requirement of the Segregated
Exchange Funds prevents LES from using the funds which limitation
weighs against including the Segregated Exchange Funds in the
property of LES' estate.  In fact, at least three customers of
LES with Segregated Exchange Funds have filed separately
adversary proceedings, he notes.

As of the Petition Date, the Exchange Funds maintained by LES are
acquired from 450 customers and include 50 Segregated Exchange
Agreements with Exchange Funds aggregating $227.5 million
maintained in segregated in LES accounts.

By this motion, LES seeks the Court's authority to remit in full
the Segregated Exchange Funds in accordance with the Exchange
Agreements and to perform its related obligations in
consideration of the customers' execution of a release, a full-
text copy of which is available for free at:

  http://bankrupt.com/misc/LandAm_SegrExchFundRelease.pdf

Mr. Hayes says nearly every day a Termination Date occurs that
require LES to transfer exchange funds to customers.  He stresses
that if the Segregated Exchange Funds are not transferred, the
Debtors' estates may be subject to increased damage claims
resulting from the failure to consummate a like-kind exchange
with the exchange period in Section 1031 of the Tax Code and
applicable Treasury Regulations.  In addition to claims for the
Segregated Exchange Funds themselves, those damage claims may
include forfeited down payments, acceleration of income taxes
sought to be deferred by the exchange.  Holding hearings, filing
pleadings and sending notice of each proposed settlement would
inhibit LES' timely remittance of the Segregated Exchange Funds,
thus contributing to potential damage claims and would otherwise
be costly, time consuming and inefficient, he tells the Court.

LES further asks the Court to modify the LES Cash Management
Order to authorize but not direct LES to transfer the Segregated
Exchange Funds in accordance with the Segregated Exchange
Agreements.

                    About LandAmerica Financial

LandAmerica Financial Group, Inc. is a leading provider of real
estate transaction services with offices nationwide and a vast
network of active agents. LandAmerica serves its agent,
residential, commercial and lender customers throughout the
United States, Mexico, Canada, the Caribbean, Latin America,
Europe and Asia.

LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E. D. Virginia, Lead Case No. 08-35994).
Dion W. Hayes, Esq., and John H. Maddock III, Esq., at
McGuireWoods LLP, are the Debtors' bankruptcy counsel.

In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.  (LandAmerica Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


LANDAMERICA FINANCIAL: Investors Seek to Recover 1301 Funds
-----------------------------------------------------------
Several creditors are trying to recover funds they had put up
with LandAmerica Financial Group, Inc., in relation to Section
1031 exchanges.  According to The Wall Street Journal, the
creditors had placed on deposit about $400 million with Debtor
LandAmerica 1301 Exchange Services Inc. "to take advantage of a
real-estate strategy known as a 1031 exchange."

Section 1031 of the Internal Revenue Code permits the seller of a
property to use the proceeds of the sale to purchase like kind
property without paying capital gains tax on the sale proceeds.
The seller has 45 days from the date of a sale of relinquished
property to identify like kind replacement property and 180 days
from the date of the sale to close on the purchase of the
replacement property.  To preserve the tax deferral, the seller
cannot take the title to the proceeds, and must instead deposit
the proceeds with a "qualified intermediary" until such time the
seller is ready to close on the replacement property.

LandAmerica 1031 served as a "qualified intermediary" pursuant to
certain separate 1031 Exchange Agreements with several investors.
Under the Agreements, LandAmerica 1031 charges a small fee for
its "intermediary" services and in turn, offers a 0.5% to 1%
return for holding an investor's funds.  The WSJ notes that the
Company puts the investors' funds in "higher yielding auction-
rate securities backed by federally insured student loans."

However, in a letter dated November 24, 2008, LandAmerica 1031
informed investors that it was terminating its operations due to
its inability to sell or borrow against the auction-rate
securities due to poor state of the nation's securities market.
The Company assured investors it has undertaken every effort to
avoid the problem.  The Company also relayed it will be providing
information soon on how the investors can establish claims
relating to the 1031 Exchange Funds.

Subsequently, LandAmerica sought bankruptcy protection on
November 26, 2008, and the investor funds were stayed pursuant to
the Bankruptcy Code.

The investors are also complaining that LandAmerica 1031
continued to do business and commingled the funds they invested
even after the Company disclosed problems with its auction-rate
securities, the WSJ related.

Among the investor creditors of LandAmerica 1031 are Health Care
REIT Inc., Lubexpress Land Company Inc., Lubexpress Operating
Company, Inc., Frontier Pepper's Ferry LLC, and Millard
Refrigerated Services, Inc.  They have initiated complaints
against LandAmerica in the U.S. Bankruptcy Court for the Eastern
District of Virginia with respect to the 1031 exchanges.

Health Care REIT is seeking to recover about $137 million,
Millard about $27 million, and Lubexpress about $9 million in
Section 1031 Funds.

                         Lawsuits Filed

Various investment creditors filed separate complaints to the
Court seeking to recover funds they have put up with Debtor
LandAmerica 1031 Exchange Services, Inc., in relation to Section
1301 exchanges:

  * Health Care REIT, Inc.,

  * Lubexpress Land Company Inc., and Lubexpress Operating
    Company, Inc.,

  * Frontier Pepper's Ferry LLC, and

  * Millard Refrigerated Services, Inc.,

  * Arbor Oaks I, LLC and Arbor Oaks II, LLC

  * Chino Spectrum Center, LLC and Chino Wings, LLC

  * Westminster Peak L.P., Westminster Summit L.P., NMC Summit,
    LLC, and Tower Summit Colorado, LLC

  * Bernadette and Benjamin Aiello

  * Gregg and Hana Opsahl

  * Haddon Square Partners, L.L.C.

  * David R. Shepherd and Merriman Valley Limited Liability Co.

The Investment Creditors closed on the sale of certain of their
properties; and executed Exchange Agreements with LES, wherein
LES agreed, in consideration of certain fees, to act as a
qualified intermediary to hold the proceeds of the sales and to
effectuate Section 1031 tax deferred exchanges on replacement
properties.

The Creditors have deposited these amounts with respect to the
sale proceeds of their assets:


     Millard                           $27,820,256
     Lubexpress                          9,012,188
     Arbor Entities                      5,373,181
     Chino Entities                      5,046,281
     Westminster Entities                2,300,000
     Haddon Square Partners              1,200,000
     Frontier                            1,200,000
     David R. Shepherd/Merriman Valley     822,000
     Bernadette/Benjamin Aiello            800,000+
     Gregg/Hana Opsahl                     584,355

The Creditors have since then found replacement sale transactions
and now require LES to release the Sale Proceeds to complete the
Section 1031 exchange.

The Creditors intend only to transfer legal rights to their
deposited Sale Proceeds to LES.

The Creditors assert that pursuant to separate Exchange
Agreements, they agreed that LES would hold the Sale Proceeds
would be held for their benefit.  Clearly, the Exchange
Agreements provides in part that "[LES] is entering into this
exchange agreement solely for the purpose of facilitating
taxpayer's exchange of the relinquished property for the
replacement property," the Creditors note.

Under the Exchange Agreements, the Creditors point out, LES is
prohibited from commingling the Sale Proceeds with any other
funds not belonging to them.

Accordingly, in separate complaints, the Creditors ask the Court
to:

  (a) declare that the Section 1031 Funds are their property and
      not the Debtors;

  (b) enjoin LES from expending, transferring, or commingling
      the Section 1031 Funds;

  (c) direct LES to immediately return the Sale Proceeds, or, at
      the Creditors' election, to get a substitute qualified
      intermediary; and

  (d) direct LES to make the Funds available on a timely basis
      for the Creditors' acquisition of replacement properties.

                    About LandAmerica Financial

LandAmerica Financial Group, Inc. is a leading provider of real
estate transaction services with offices nationwide and a vast
network of active agents. LandAmerica serves its agent,
residential, commercial and lender customers throughout the
United States, Mexico, Canada, the Caribbean, Latin America,
Europe and Asia.

LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E. D. Virginia, Lead Case No. 08-35994).
Dion W. Hayes, Esq., and John H. Maddock III, Esq., at
McGuireWoods LLP, are the Debtors' bankruptcy counsel.

In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.  (LandAmerica Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


LANDAMERICA FINANCIAL: Trustee Appoints Creditors Committees
------------------------------------------------------------
Pursuant to Section 1102 of the Bankruptcy Code, W. Clarkson
Mcdow, Jr., United States Trustee for Region 3, appointed four
creditors to serve as members of the Official Committee of
Unsecured Creditors of LandAmerica Financial Group, Inc.:

(1) The Bank of New York Mellon, Indenture Trustee
     Attn: Donna Parisi
     101 Barclay Street
     New York, NY 10286
     Tel No.: 614-775-5279
     Fax No.: 614-775-5636
     E-mail: donna.parisi@bnymellon.com

(2) The Prudential Insurance Company of America and related
     managed entities
     Attn: Thomas E. Luther
     Two Prudential Plaza, Suite 5600
     180 N. Stetson Street
     Chicago, IL 60601
     Tel No.: 312-861-4432
     Email: thomas.luther@prudential.com

(3) Vangent, Inc.
     Attn: Cynthia Hotsky
     185 South Broad St.
     Pawcatuck, CT 06379
     Tel No.: 860-599-9729 x 205
     Fax No.: 860-599-9716
     E-mail: cindy.hotsky@vanguard.com

(4) Citadel Equity Fund, Ltd.
     c/o Citadel Investment Grould, LLC
     Attn: Mark Steen
     131 South Dearborn St.
     Chicago, IL 60603
     Tel No.: 312-395-2100
     Fax No.: 312-267-7300
     Email: citadelagreementnotice@citadelgroup.com

The U.S. Trustee also appointed five creditors to serve as members
of the Official Committee of Unsecured Creditors of LandAmerica
1031 Exchange Services, Inc.:

(1) Millmar Holdings, LLC
     Attn: John C. Miller
     909 Hockett Road
     Manakin-Sabot, VA 23103
     Phone: 804-784-4799
     Fax: 804-784-4371
     E-mail: jmiller-1@comcast.net
             Jmiller@millmarhomes.com

(2) Endless Ocean, LLC
     Attn: Richard F. Giacomo
     2 Bonnie Briar Lane
     Larchmont, NY 10538
     Phone: 914-633-3303
     E-mail: rg@lrccapital.com

(3) MB Venture, Ltd.
     Attn: Jay Miller and Howard Miller
     P.O. Box 46468
     St. Petersburg, FL 33741
     Phone: 727-820-3958
     Fax: 727-820-3959
     E-mail: hmiller@trenam.com

(4) Amarillo Tower Limited
     Attn: David L. Long
     5475 G Street
     Chino, CA 91710
     Phone: 909-628-5531
     Fax: 909-628-0970
     E-mail: david@dllong.com

(5) Petaluma Southpoint, LLC
     Attn: Kenneth C. Martin
     P.O. Box 11218
     Santa Rosa, CA 95406
     Phone: 707-494-3849
            707-578-1125 ext. 29
     Fax: 707-578-4124
     E-mail: kmartin185@aol.com

                    About LandAmerica Financial

LandAmerica Financial Group, Inc. is a leading provider of real
estate transaction services with offices nationwide and a vast
network of active agents. LandAmerica serves its agent,
residential, commercial and lender customers throughout the
United States, Mexico, Canada, the Caribbean, Latin America,
Europe and Asia.

LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E. D. Virginia, Lead Case No. 08-35994).
Dion W. Hayes, Esq., and John H. Maddock III, Esq., at
McGuireWoods LLP, are the Debtors' bankruptcy counsel.

In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.  (LandAmerica Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


LAS VEGAS SANDS: Gaming Industry to Remain Under Pressure in 2009
-----------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer.  Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


LB-UBS COMMERCIAL: Moody's Confirms Low-B Ratings on Six Classes
----------------------------------------------------------------
Moody's Investors Service confirms ten rake classes of LB-UBS
Commercial Mortgage Securities Trust, Commercial Mortgage Pass-
Through Certificates, Series 2006-C4:

   -- Class HAF-1, $2,544,000, confirmed at A3; previously placed
      on review on 9/16/08 for possible downgrade

   -- Class HAF-2, $4,887,000, confirmed at Baa1; previously
      placed on review on 9/16/08 for possible downgrade

   -- Class HAF-3, $5,865,000, confirmed at Baa2; previously
      placed on review on 9/16/08 for possible downgrade

   -- Class HAF-4, $5,866,000, confirmed at Baa3; previously
      placed on review on 9/16/08 for possible downgrade

   -- Class HAF-5, $9,775,000, confirmed at Ba1; previously placed
      on review on 9/16/08 for possible downgrade

   -- Class HAF-6, $9,776,000, confirmed at Ba2; previously placed
      on review on 9/16/08 for possible downgrade

   -- Class HAF-7, $7,821,000, confirmed at Ba3; previously placed
      on review on 9/16/08 for possible downgrade

   -- Class HAF-8, $7,818,000, confirmed at B1; previously placed
      on review on 9/16/08 for possible downgrade

   -- Class HAF-9, $9,777,000, confirmed at B2; previously placed
      on review on 9/16/08 for possible downgrade

   -- Class HAF-10, $7,821,000, confirmed at B3; previously placed
      on review on 9/16/08 for possible downgrade

On September 16, 2008, Moody's placed the certificates on review
for possible downgrade due to the uncertainty associated with
Lehman Brothers Holdings Inc. (LBHI) tenancy of 70 Hudson Street.
LBHI occupied 100% of the space at 70 Hudson Street.  Moody's has
confirmed the ratings of these certificates because LBHI's lease
was assumed by and assigned to Barclays Capital Inc. a subsidiary
of Barclays Plc (long term issuer rating - Aa2, on review for
possible downgrade) on September 22, 2008.  Subsequently, on
November 21, 2008, Barclays Capital Inc. assigned the lease to
Long Island Holding A, LLC, an affiliate.

Non-pooled Classes HAF-1, HAF-2, HAF-3, HAF-4, HAF-5, HAF-6,
HAF-7, HAF-8, HAF-9, and HAF-10 are collateralized by the junior
portions of the 70 Hudson Street Loan, the ALMI of North Dallas
Loan, and the Fountains of Miramar Loan.  The senior pooled trust
balance for the 70 Hudson Street Loan is $75.0 million while the
trust junior component is $49.0 million.  The 70 Hudson Street
Loan is secured by a 409,272 square foot office property located
in Jersey City, New Jersey.

Moody's monitors transactions on both a monthly basis through two
sets of quantitative tools: MOST(R) (Moody's Surveillance Trends)
and CMM on Trepp, and a periodic basis through a full review.
Moody's prior full review is summarized in a press release dated
January 31, 2008.


LEE ENTERPRISES: To Violate Covenants on $306MM of Senior Notes
---------------------------------------------------------------
Lee Enterprises, Inc., says an upcoming impairment charge of at
least $180 million will result in a violation of a covenant for
the $306 million of senior notes.

Should Lee be unable to negotiate a waiver, the result would be a
cross-default with the bank loan, the company said, according to
Bill Rochelle of Bloomberg News.  Lee said it's in discussions
with debt holders regarding waivers.

As reported in last Wednesday's Troubled Company Reporter, Lee
Enterprises notified the Securities and Exchange Commission that
it could not file of its annual report on Form 10-K until
Dec. 29, 2008.  It says the delay is necessary because it needs
additional time to complete the complex calculations required to
determine the extent of additional non-cash charges to reduce the
carrying value of goodwill and other intangible assets, a result
of increasing financial market volatility and deteriorating
economic conditions.

The company said it expects the impairment charges to total at
least $180 million after tax for the fourth quarter of the fiscal
year ended Sept. 28, 2008.  A portion of a charge of that
magnitude would also reduce the stockholders' equity of Pulitzer
Inc., a wholly owned subsidiary of the company, and trigger the
need for the noteholders to waive the minimum net worth covenant
in the guaranty agreement related to the $306 million Senior
Notes, a debt facility originated in 2000 by St. Louis Post
Dispatch LLC, a Pulitzer Inc. subsidiary.

Without a waiver by the noteholders, the reduction in Pulitzer
Inc.'s stockholders' equity would constitute an event of default
in the guaranty agreement.  Unless waived, the condition also
would cause a cross-default in Lee's recently amended bank credit
agreement, dating to Lee's acquisition of Pulitzer Inc. in 2005.

Notice of an event of default would allow creditors to exercise
certain remedies granted by the various debt agreements.

Timing of the delivery of various financial statements required by
the Pulitzer Notes, guaranty agreement and credit agreement could
also be delayed by the matters noted above, requiring additional
waivers from the noteholders and Lee's bank lenders.

The Pulitzer Notes mature in April 2009.

On Dec. 12, 2008, KPMG LLP, the company's independent registered
public accounting firm, formally notified the company's audit
committee chairman that, in the absence of further information in
support of the company's ability to meet its obligations as they
become due and comply with certain debt covenants, its auditors'
report on the consolidated financial statements for the year ended
Sept. 28, 2008, to be included in the Annual Report on Form 10-K
will include an explanatory paragraph relating to Lee's ability to
continue as a going concern.

Such a modification of the auditors' report would, unless waived
by the lenders, constitute an event of default under Lee's bank
credit agreement.  KPMG LLP said it will, for the same reasons,
also modify its auditors' reports on the separate financial
statements of Pulitzer Inc. and St. Louis Post-Dispatch LLC,
requiring the need for additional waivers under the compay's
various debt agreements.

Mary Junck, chairman and chief executive officer, said: "As the
economy has continued to worsen, Lee is actively engaged in
discussions with the noteholders to extend or renew the Pulitzer
Notes as soon as possible, and we are simultaneously working to
obtain the necessary waivers under our various debt agreements.
Although the credit markets remain very difficult, lenders have
shown a willingness to work toward acceptable solutions to help us
avoid violating performance conditions in our debt agreements."

"Even in this recession, Lee continues to generate substantial
cash flow, and we continue to believe that Lee will emerge strong
when all the national economic turbulence ends," Mr. Junck said.

                       About Lee Enterprises

Lee Enterprises, Inc. publishes daily newspapers, weekly
newspapers, and specialty publications in the United States.  The
company has a strategic alliance with Yahoo!, Inc. Lee Enterprises
was founded in 1890.  It is based in Davenport, Iowa.


LEHMAN BROTHERS: Sets Derivative Deals Protocol; Creditors Object
-----------------------------------------------------------------
The official committee of unsecured creditors formed in Lehman
Brothers Holdings Inc.'s Chapter 11 cases object to LBHI's
proposed procedures for closing out or selling off thousands of
derivatives contracts.

According to Bloomberg's Bill Rochelle, the Creditors Committee,
noting that over 125 contract parties object to the proposed
procedures, argued that LBHI should not have carte blanche in
closing out or selling the positions.  The Committee contends it
should have oversight, along with the ability to object to
particular transactions.

The Debtors are parties to thousands of derivative contracts in
which the contractual obligations and values are keyed to one or
more underlying assets or indices of asset values and subject to
movements in the financial markets.  In most cases, the
derivative contracts are "securities contracts," "forward
contracts," "repurchase agreements," or "swap agreements" and in
some cases were governed by a "master netting agreement," each as
defined under the Bankruptcy Code. The Debtors entered into the
derivative contracts with various counterparties, some in the
United States and some in foreign countries, for a variety of
reasons that include: (i) hedging against the risks of their
business; (ii) speculating in the changes of market rates or
prices; and/or (iii) financing.

As of Nov. 13, the Debtors are party to approximately 930,000
derivative contract transactions of which approximately 733,000
are purported to have been terminated.

                         Proposed Procedures

LBHI has filed a motion before the U.S. Bankruptcy Court for the
Southern District of New York to implement a protocol for the
assumption and assignment of its derivative contracts.

Robert Lemons, Esq., at Weil Gotshal & Manges, in New York, said
in a court filing that the proposed protocol would help reduce
the costs incurred from the assumption and assignment of the
derivative contracts or from the settlement of claims resulting
from the termination of the contracts.

"Considering the sheer number of derivative contracts, obtaining
court approval for each proposed assumption and assignment or
settlement would result in burdensome administrative expenses for
the estate," Mr. Lemons said.

LBHI proposes this protocol with respect to derivative contracts
it will assume and assign:

  (1) LBHI has five days before the assumption and assignment of
      the derivative contract to notify the person or company
      that is party to the contract.

  (2) The notice must contain:

      * the names and addresses of the parties to the
        contracts;

      * identification of the derivative contracts;

      * a statement that any assignee or its credit support
        provider has a Standard & Poor's or Fitch credit
        rating equal to or higher than A- or a Moody's credit
        rating equal to or higher than A3; any equivalent
        thereof; or the identity of any proposed assignee and
        its credit support provider if neither of them is
        qualified; and

      * any amounts proposed by LBHI to be paid to cure existing
        defaults.

  (3) Any party is deemed to have received adequate assurance
      of future performance if either an assignee or its credit
      support provider is qualified, or LBH no longer have any
      payment or delivery obligations under the contract after
      payment of the cure amount.

  (4) With respect to derivative contracts that may require
      the return of posted collateral as part of a cure amount,
      LBHI should either return the collateral or, if the
      collateral is no longer in its possession, it should pay
      the amount equal to the value of the collateral a day
      before it serves the notice based upon independent third-
      party pricing services.  LBHI's proposed manner of
      returning the collateral, including any amount proposed to
      be paid for collateral that is no longer in its
      possession, must be included in the notice as a cure
      amount.

  (5) Any party should serve its written objection, if any,
      within five days after the notice is served on Weil
      Gotshal & Manges, and Curtis Mallet-Prevost Colt &
      Mosle.  The party must specify the reasons for its
      objection.

  (6) If any party does not timely serve an objection, that
      party is deemed:

      * to have consented to the proposed cure amount, if any,
        and to the assumption and assignment of the contract;

      * to have agreed that the assignee has provided adequate
        assurance of future performance;

      * to have agreed that all defaults under the contract
        have been cured as a result or precondition of the
        assignment, such that the assignee or Lehman Brothers
        Holdings has no liability or obligation with respect
        to any default occurring or continuing prior to the
        assignment;

      * to have waived any right to terminate the contract or
        designate an early termination date under the contract
        as a result of any default that occurred and is
        continuing prior to the date of the assignment; and

      * to have agreed that the terms of the court order
        approving the proposed protocol apply to the
        assignment.

  (7) If LBHI is unable to resolve any objection, it may seek
      authorization of the Court to consummate the proposed
      assignment.  If the dispute is only about the cure amount,
      the company must pay to the party any undisputed portion
      of the proposed cure amount and place the disputed portion
      into a segregated interest-bearing account.  The party is
      entitled to payment from the segregated account of the
      disputed portion and interest earned upon the resolution
      by the Court of the dispute, or agreement between the
      company and the party.

  (8) Unless LBHI solicits bids from at least four potential
      assignees and selects the highest or best bid received,
      the company should obtain the consent of the Official
      Committee of Unsecured Creditors to assume and assign a
      derivative contract pursuant to the proposed protocol.

  (9) If no objection is timely served and the party as well
      as the Creditors Committee consents to the assignment,
      LBHI can assume and assign any derivative contract.  Upon
      the assumption and assignment, the assignee and any
      replacement credit support provider should assume the
      contract with all the defaults having been deemed cured or
      waived.

(10) After the assignment, LBHI should provide notice to the
      party of the effective date of the assignment.  Any
      purported termination notice sent by a party based on a
      default occurring prior to the assignment will be
      ineffective unless a termination notice is received by
      LBHI pursuant to the terms of the contract prior to the
      assignment.

(11) In case the derivative contract has been memorialized
      pursuant to a master agreement, LBHI may assume and assign
      pursuant to the proposed protocol, only all, but not fewer
      than all, of the derivative contract transactions entered
      into pursuant to the master agreement.

(12) As part of and to facilitate any assignment of the
      contract, LBHI may agree to make payments for the benefit
      of the assignee.

Meanwhile, LBHI proposed a protocol for the termination of the
derivative contract and the settlement of the claims resulting
from the termination:

  (a) With respect to any derivative contract, LBHI may enter
      into and execute a termination agreement.

  (b) A termination agreement may resolve and fix amounts
      owing between LBHI and the party.

  (c) In connection with any termination agreement, LBHI is
      authorized but not required to provide a release to the
      party.

  (4) A termination agreement may address and permit the
      collateral or margin held by LBHI or by the party to be
      liquidated or returned in accordance with the derivative
      contract, an applicable master netting agreement or the
      termination agreement.

                         Parties Object

In a statement filed with the Court, Wells Fargo Bank said that it
will not object to the proposed procedures and the ratings
criteria so long as they do not differ significantly from the
procedures and ratings criteria specified in their derivative
contracts with LBHI unit Lehman Brothers Special Financing, Inc.

The derivative contracts allow the various trusts, with Wells
Fargo Bank as trustee, to protect themselves against changes in
interest rates and to obtain access to a steady stream of revenue
in exchange for assuming credit risks.

The contracts are considered key component to maintain the
trusts' credit ratings from Standard & Poor' Rating Services,
Moody's Investor Services and Fitch Inc.

Wells Fargo said that it would also block the approval of the
proposed procedures to the extent that it would result in the
revision of the collateralization requirements stated in the
contracts.

The proposed assumption and assignment of derivative contracts
also drew criticisms from these parties:

  * Bayview Financial, L.P.
  * Bayview Opportunity Master Fund, L.P.
  * Wellmont Health System
  * Royal Bank America
  * Asurion Corporation
  * Siller Wilk LLP
  * Canadian National Resources Limited
  * Caisse De Depot et Placement du Quebec
  * Total Gas & Power Limited
  * Federal Home Loan Bank of Pittsburgh
  * Simpson Meadows
  * Metavante Corporation
  * Portfolio Green German CMBS GMBH
  * E-Capital Profits Limited
  * Cheung Kong Bond Finance Limited
  * NATIXIS Environment & Infrastructures
  * Pacific Life Insurance Company
  * Asbury Atlantic, Inc.
  * Asbury-Solomons, Inc.
  * Metropolitan Transportation Authority
  * The Federal Home Loan Bank of Dallas
  * NetApp, Inc.
  * Iconix Brand Group, Inc.
  * City and County of Denver, Department of Revenue
  * Capital Automotive L.P.
  * Tobacco Settlement Financing Corporation
  * Wachovia Bank, N.A.
  * New South Federal Savings Bank, F.S.B.
  * Delaware River Port Authority
  * The Hotchkiss School
  * Linn Energy, LLC
  * City of Milwaukee, Wisconsin
  * HFF I, LLC
  * Barclays Capital, Inc.
  * South Mississipi Electric Power Association and
    Coast Electric Power Association
  * Georgetown University
  * California Public Employees Retirement System
  * Southern Community Bank and Trust
  * Southern Community Financial Corporation
  * Carolina First Bank
  * Deer Park Road Corporation
  * First Choice Power, L.P.
  * Reynolds American Defined Benefit Master Trust
  * Reliant Energy Services, Inc.
  * Reliant Energy Power Supply, LLC
  * EnergyCo, LLC
  * EnergyCo Marketing and Trading
  * Advanced Graphic Printing, Inc.
  * Thomas Cook AG.
  * Russell Investment Group, Inc.
  * JA Solar Holdings Co., LTD
  * Oklahoma Municipal Power Authority
  * BRE Bank SA
  * Southern California Edison Company
  * Embarcadero Aircraft Securitization Trust
  * University of Pittsburgh
  * West Corporation
  * Danske Bank A/S, London Branch
  * BRM Group, Ltd.
  * A.M. McGregor Home
  * The Toronto-Dominion Bank
  * Banca Italease S.p.A.
  * Fulton Bank
  * EPCO Holdings
  * SunAmerica Life Insurance Company
  * Lexington Insurance Company
  * AIG CDS, Inc.
  * Carlton Communications Limited
  * HarbourView CDO III, Limited
  * Norton Gold Fields Limited
  * Gaston Christian School, Inc.
  * National CineMedia
  * Bryant University
  * Bank of America, National Association
  * New Jersey Housing and Mortgage Finance Agency
  * The Walt Disney Company
  * Deutsche Bank Trust Company Americas
  * Deutsche Bank National Trust Company
  * QVT Financial LP
  * Standard Chartered Bank
  * Bank of New York Mellon
  * The Juilliard School
  * Tullett Prebon Holdings Corporation
  * Aircraft Finance Trust
  * Aliant Bank
  * FirstBank of Puerto Rico
  * National Australia Bank Limited
  * Bremer Financial Corporation
  * Bank of Montreal
  * National Agricultural Cooperative Federation
  * U.S. Bank National Association
  * Hank's Living Trust
  * Lahde Capital Management Inc.
  * Osterreichische Volksbanken-Aktiengesellschaft
    and Etihad Airways
  * Societe Generale
  * Canadian Imperial Bank Commerce
  * Calyon
  * Dexia Bank Internationale a Luxembourg SA
  * Dexia Credit Local
  * Dexia Kommunalbank Deutschland AG
  * Dexia Banque Belgique SA
  * Banif - Banco de Investimento, S.A.
  * Pursuit Opportunity Fund I Master Ltd.
  * Instituto de Credito Oficial
  * Northcrest, Inc.
  * Citigroup, Inc.
  * Exum Ridge CB0 2006-I
  * Exum Ridge CBO 2006-2
  * Exum Ridge CBO 2006-4
  * Energy America LLC
  * Direct Energy Business LLC
  * OHP Opportunity Limited Partnership
  * Occidental Energy Marketing, Inc.

                   About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States.  For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.  Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity.  Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region.  The firm, through predecessor
entities, was founded in 1850.

Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr.
S.D.N.Y. Case No.: 08-13555).  Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.

Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600).  Several other affiliates followed
thereafter.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL).  James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI

Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion.  Nomura Holdings Inc., the
largest brokerage house in Japan, on Sept. 22 reached an agreement
to purchased Lehman Brothers Holdings, Inc.'s operations in Europe
and the Middle East less than 24 hours after it reached a deal to
buy Lehman's operations in the Asia Pacific for US$225 million.
Nomura paid only $2 dollars for Lehman's investment banking and
equities businesses in Europe, but agreed to retain most of
Lehman's employees.

            International Operations Collapse

Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration.  Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on Sept. 15, 2008.  The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.  The
two units of Lehman Brothers Holdings, Inc., which has filed for
bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of JPY4
trillion -- US$38 billion).  Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition.  Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.

Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice.  The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis.  A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.

(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).


LILLIAN VERNON: Seeks April 31 Extension to File Liquidating Plan
-----------------------------------------------------------------
Lillian Vernon Corp. and its debtor-affiliates ask the United
States Bankruptcy Court for the District of Delaware to extend
their exclusive period to file a Chapter 11 plan until April 31.

The hearing is set for Jan. 12.

According to Bill Rochelle of Bloomberg News, the company said it
is working with its official committee of unsecured creditors on
the terms of a liquidating plan.

As reported in the Troubled Company Reporter on April 7, 2008, the
Court authorized the Debtors to sell all their assets to Current
USA for $15.8 million.  Current USA was the successful bidder at
an April 1 auction beating Creative Catalog Corp.  The auction
resulted to a 70% increase in the purchase price for the assets,
Bill Rochelle notes.

                     About Lillian Vernon

Based in Virginia Beach, Virginia, Lillian Vernon Corp. --
http://www.lillianvernon.com/-- and its affiliates are direct
mail specialty catalog and online companies concentrating on the
marketing of gifts, holiday products, toys and children's
products, personal and home accessories, kitchen and houseware
products and garden and outdoor products.  They have developed a
proprietary customer database containing information about its
customers, including such data as order frequency, size and date
of last order and type of products purchased.  The database
contains information with respect to over 27 million customers,
gift recipients and people who have requested its catalogs.  In
the fiscal year ended Feb. 22, 2003, they published 33 catalog
editions and mailed approximately 150,000,000 catalogs to past and
prospective customers.  They also offer products over the
Internet.

The company and six of its affiliates filed for Chapter 11
protection on Feb. 20, 2008 (Bankr. D. Del.,  ase No. 08-
10323).  Ann C. Cordo, Esq., Daniel B. Butz, and Esq., J. Dehney,
Esq. at Morris, Nichols, Arsht & Tunnell, L.L.P. represent the
Debtors in their restructuring efforts.  Lillian Vernon's parent,
Sun Capital Partners Inc., a privately held investment company
with offices in Boca Raton, Fla., is not included in the
bankruptcy filing.  The U.S. Trustee for Region 3 has appointed
creditors to serve on an Official Committee of Unsecured Creditors
in these cases.  The company listed assets of $1 million to
$100 million and debts of $1 million to $100 million in its
bankruptcy filing.


MACH GEN: Moody's Puts B2 Ratings on Review for Possible Upgrade
----------------------------------------------------------------
Moody's Investors Service placed MACH Gen LLC's (MACH Gen or
Project) B2 ratings on its 1st lien debt facilities under review
for possible upgrade.

The rating action reflects the expected repayment of MACH Gen's
1st lien term loan using the net proceeds from the sale of the
1,100 MW Covert power plant.  It is Moody's understanding that the
sale of the Covert plant to Tenaska was completed recently.  Given
the expected sizeable debt reduction, Moody's expects significant
improvement in MACH Gen's credit metrics potentially leading to a
multi-notch increase in MACH Gen's 1st lien debt ratings.  That
being said, Moody's notes that MACH Gen's ratings will continue to
incorporate MACH Gen's 2nd lien term loan which currently totals
approximately $1 billion.

The review for upgrade will consider revised projections from MACH
Gen, the Project's full year 2008 operating performance, MACH
Gen's hedging plans for 2010 and onward, and management's
strategic plans for MACH Gen.

MACH Gen, LLC is the parent holding company of three power
projects totaling 2,532 MW consisting of the 360 MW Millennium
facility in Massachusetts; the 1,080 MW Athens facility in New
York; and the 1,092 MW Harquahala facility in Arizona. MACH Gen is
indirectly owned by a group of financial institutions.

The last rating action was on January 31, 2007, when MACH Gen's B2
ratings on its 1st lien debt facilities were assigned with a
stable outlook.


MERRILL LYNCH: Moody's Cuts Rating on Class E $9.6MM Certs. to B2
-----------------------------------------------------------------
Moody's Investors Service downgraded the rating of one class and
affirmed seven classes of Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1998-C1-CTL:

   -- Class A-2, $954,880, affirmed at Aaa; previously affirmed at
      Aaa on 4/18/2007

   -- Class A-3, $235,868,000, affirmed at Aaa; previously
      affirmed at Aaa on 4/18/2007

   -- Class A-PO, $1,194,653, affirmed at Aaa; previously affirmed
      at Aaa on 4/18/2007

   -- Class IO, Notional, affirmed at Aaa; previously affirmed at
      Aaa on 4/18/2007

   -- Class B, $38,765,000, affirmed at Aa1; previously upgraded
      to Aa1 from Aa2 on 4/18/2007

   -- Class C, $32,304,000, affirmed at A2; previously upgraded to
      A2 from Baa1 on 8/9/2005

   -- Class D, $38,765,000, affirmed at Ba1; previously upgraded
      to Ba1 from Ba2 on 8/9/2005

   -- Class E, $9,691,000, downgraded to B2 from B1; previously
      downgraded to B1 from Ba3 on 4/18/2007

Moody's downgraded Class E due to a decline in the credit quality
of several of the corporate credits supporting the transaction
including Rite Aid Corporation, Circuit City, 24 Hour Fitness,
County of Monroe, Price Chopper and Baptist Hospital.
Collectively, these tenants comprise 46% of the pool.

As of the November 17, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 33%
to $421 million from $630 million at securitization.  The
certificates are supported by 97 loans.  Eighty-five of the loans
are credit tenant lease loans backed by 12 corporate credits.  The
loans range in size from less than 1% to 15% of the pool, with the
top 10 loans representing 45% of the pool.  Twelve loans,
representing 27% of the pool, have defeased and are collateralized
by U.S. Government securities.

Twelve loans have been liquidated from the pool since
securitization, resulting in an aggregate loss of $10.8 million.
Currently there are no loans in special servicing.  Forty-eight
loans, representing 23% of the pool, are on the servicer's
watchlist.  The watchlist includes loans which meet certain
portfolio review guidelines established as part of the Commercial
Mortgage Securities Association's monthly reporting package.  As
part of Moody's ongoing monitoring of a transaction, Moody's
reviews the watchlist to assess which loans have material issues
that could impact performance.  All of the loans backed by
properties leased to Rite Aid are on the watchlist due to the
company's credit rating.

The largest exposure in the pool is Rite Aid Corporation, which
represents approximately 23% of the pool (Moody's senior unsecured
rating Caa2/Caa3, on review for possible downgrade).  Other large
exposures include Georgia Power Company (15%; Moody's senior
unsecured rating A2, stable outlook), Circuit City Stores (11%),
Kroger Co. (7%; Moody's senior unsecured rating Baa2, stable
outlook), 24 Hour Fitness (7%).  No other single exposure
comprises more than 2.5% of the pool.  In November 2008, Circuit
City announced plans to close 155 stores and subsequently filed
for Chapter 11 bankruptcy protection.  One of the properties in
the pool, located in Crystal Lake, Illinois, is included on
Circuit City's list of stores to be closed.

Moody's periodically completes full reviews in addition to
monitoring transactions on a monthly basis.  Moody's prior full
review is summarized in a press release dated April 18, 2007.


MGM MIRAGE: Fitch Keeps Outlook on Low-B Ratings Negative
---------------------------------------------------------
MGM MIRAGE's (MGM) Rating Outlook remains Negative following the
announcement that it entered into an agreement to sell Treasure
Island (TI) to Phil Ruffin for $775 million.  Fitch believes the
gaming operating environment and forward outlook continue to
weaken, which offsets MGM's enhanced near-term liquidity profile.

The Treasure Island asset sale is expected to provide $500 million
in cash at closing, which is anticipated in the second quarter of
2009 (Q2'09).  The remaining $275 million will be in the form of
10% secured notes that will be paid in two installments over a
two-year period after the transaction closes. T his announcement
follows the $750 million New York-New York secured note issuance
on Nov. 14 that provided a net cash increase of $537 million after
consideration of a discount and the repayment of $150 million of
Mandalay notes that were puttable on Nov. 15.

MGM's enhanced liquidity mitigates Fitch's concerns regarding
near-term CityCenter funding requirements and the $1.3 billion of
2009 debt maturities, provided the company focuses on credit
improvement when deploying the capital.  However, the Negative
Outlook continues to incorporate concerns regarding:

   -- The full funding and development risk of CityCenter,
      including the level of residential sales proceeds that will
      be realized;

   -- The credit market environment, given an additional
      $1.1 billion of bond maturities in 2010 and $532 million of
      bond maturities in 2011 in addition to the October 2011
      expiration of its $7 billion credit facility;

   -- The broader consumer economy and Las Vegas operating
      environment, including the potential impact of significant
      additional supply on the Las Vegas Strip over the next 12-18
      months amid weak demand.

Although MGM has enhanced its liquidity in the past month, gaming
operating trends, in addition to trends in other travel-related
industries, materially deteriorated in Q4'08 and Fitch became more
pessimistic on its 2009 outlook.  Last week, Nevada reported that
Las Vegas Strip revenues declined 26% in October, which was the
worst monthly performance during this recession.  In addition,
Fitch believes the 2009 outlook for the Las Vegas destination
market is likely to remain very weak in 2009, with a recovery not
expected until 2010 (see 'Fitch: U.S. Gaming Industry Recovery
Unlikely Until 2010', dated Dec. 16, 2008).

MGM's ratings are:

   -- Issuer Default Rating 'BB-';
   -- Senior secured notes 'BB';
   -- Senior unsecured credit facility 'BB-';
   -- Senior unsecured notes 'BB-';
   -- Senior subordinated notes 'B'.


MGM MIRAGE: Fitch Says Industry to Remain Under Pressure in 2009
----------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


MIDWAY GAMES: Will Lay Off 25% of Work Force & Close Texas Studio
-----------------------------------------------------------------
Midway Games Inc., in response to its current financial position,
decided on Dec. 12, 2008, to implement an expense reduction
program, which included:

     (i) a reduction in force at its Chicago, San Diego, and
         Austin, locations;

    (ii) the closure of its Austin studio; and

   (iii) the suspension of several of its non-core prototype
         games.

As a result of the reduction in force, the headcount at Midway
will be cut by approximately 180 full-time employees, which
represents approximately 25% of its total workforce.  The
reduction in force affects substantially all of the company's
functional groups.  As a result of the reduction in force, the
company expects to incur a cash charge of approximately
$1.6 million in the fourth quarter of 2008.  This charge is
primarily due to expenses related to severance for terminated
employees.

In addition to the charge related to the reduction in force
implemented by Midway Games, the company will incur charges of:

     (i) approximately $19.9 million related to additional non-
         cash expenses as a result of the Fundamental Change that
         triggered an accelerated repurchase schedule with
         respect to the company's 6.0% Notes and 7.125% Notes,
         which was previously disclosed in the company's Current
         Report on Form 8-K filed on December 4, 2008; and

    (ii) approximately $0.2 million of accelerated expenses
         related to unamortized debt issue costs with respect to
         the company's outstanding debts under its Credit
         Agreements with National Amusements, Inc., $70 million
         in which Acquisition Holdings Subsidiary I LLC is
         participating as a result of the Transaction disclosed
         in (a) the company's Current Report on Form 8-K filed on
         December 4, 2008, (b) a Schedule 13D/A filed on
         December 1, 2008, by Sumner M. Redstone, SUMCO, Inc.,
         and National Amusements, Inc., and (c) a Schedule 13D
         filed on December 5, 2008, by Acquisition Holdings
         Subsidiary I LLC, MT Acquisition Holdings LLC, and Mark
         Thomas.

The total of the charges in the fourth quarter will be
approximately $21.7 million.

Lauren Pollock at The Wall Street Journal reports that Midway
Games hired investment bank Lazard Ltd. earlier this month to
advise on the company's options as it struggles with serious debt
issues.  Controlling shareholder Sumner Redstone, says WSJ, had
sold his 87% stake in Midway Games to private investor Mark
Thomas, activating a change-of-control provision on its
convertible notes.  According to the report, Mr. Redstone sold his
stake in Midway Games to try to resolve his debt issues at his
holding company, National Amusements Inc.  The report states that
Mr. Redstone lost hundreds of millions of dollars on his Midway
Games investment.

"The cost-reduction measures are vital for us to rationalize our
operations and provide the resources necessary for our core
properties to succeed," said Matt Booty, president and CEO of
Midway Games.  "These initiatives, along with the other steps we
have taken this year, are a response to the specific challenges we
are facing at Midway, many of which have been amplified by the
current economic conditions."

                       About Midway Games

Based in Chicago, Illinois, Midway Games, Inc. (NYSE: MWY),
formerly Midway Manufacturing -- http://www.midway.com/-- is a
video game publisher.  The company sells video games for play on
home consoles, handheld devices and personal computers to mass
merchandisers, video rental retailers, software specialty
retailers, Internet-based retailers and entertainment software
distributors.  It sells video games primarily in North America,
Europe, Asia, and Australia for the major video game platforms and
handheld devices.

As reported by the Troubled Company Reporter on Nov. 13, 2008,
Midway Games said that it continues to face significant challenges
with respect to liquidity.  In a regulatory filing with the
Securities and Exchange Commission, Midway reported $75.9 million
in net loss for the three months ended September 30, 2008.  Midway
Games also disclosed $167.5 million in total assets, including
$10.3 million in cash and cash equivalents, as of September 30,
2008.  The company had $271.0 million in total liabilities,
including $189.2 million in current liabilities.  Midway Games
said it has experienced annual operating losses since its fiscal
year ended June 30, 2000.


MOMENTIVE PERFORMANCE: S&P Cuts Corp. Credit Rating to 'B-'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Momentive Performance Materials Inc. and its subsidiaries by one
notch, including its corporate credit rating on Momentive to 'B-'
from 'B'.  The outlook is stable.  The recovery ratings remain
unchanged.

"The downgrade reflects concerns that Momentive's heavy debt
burden will make it difficult to generate positive free operating
cash flow in the current weak economic environment," said Standard
& Poor's credit analyst Cynthia Werneth.  The company began
experiencing lower demand for its products in the third quarter of
2008, and this has continued in the fourth quarter.  "We believe
that operating conditions have deteriorated during the last
several weeks as demand for all types of industrial products has
slowed considerably both in and outside the U.S.," added Ms.
Werneth.  Momentive has temporarily idled key facilities in
response to lower orders, and is taking a number of actions to
reduce labor and other operating costs.  "Importantly, we believe
the company has sufficient liquidity to weather several quarters
of anemic sales, earnings, and cash flow.  However, if conditions
are worse than we expect, or if weak market conditions persist for
longer than a few quarters, liquidity could shrink to
uncomfortable levels, and we could take further negative rating
actions.  Even assuming business conditions turn around before
that happens, Momentive is likely to still be very highly
leveraged in 2012, when it will have to refinance its maturing
revolving credit facility."

The rating on silicones and quartz producer Momentive Performance
Materials Inc. reflects its satisfactory business risk profile as
a leading global silicones producer, tempered by its very high
debt leverage since Apollo Management's December 2006 acquisition
of 90% of the company from General Electric Co. (GE) for
$3.9 billion.

Albany, N.Y.- based Momentive is the world's second-largest
silicone producer, and silicones represent about 90% of its
revenues.  The remainder comes from the sale of quartz, primarily
for semiconductors.

According to S&P: "The outlook is stable.  We believe that the
company should be able to weather several quarters of poor
economic conditions and soft sales.  However, we could lower the
ratings if economic weakness, raw material inflation, or other
factors cause the company to consume more cash than we expect, or
if free operating cash flow remains negative for an extended
period of time, eroding liquidity.  We would lower the ratings
into the 'CCC' category if we believe that available liquidity
would last for a year or less.  We could also lower the ratings if
the company makes a below-par exchange offer for any of its debt
and we view the exchange as distressed.  Assuming the company
survives the current economic turmoil, we could lower the ratings
in the longer term if we are approaching the December 2012
revolving credit maturity date and are concerned about the
company's ability to refinance its heavy debt load.  In order to
consider a positive outlook and ultimately a somewhat higher
rating, we would have to see a sustainable trend of positive free
cash generation and debt reduction such that funds from operations
to debt approaches 10%."


MOMENTUM PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Momentum Properties, LLC
        911 Central Avenue
        Box 112 Albany, NY 12206

Bankruptcy Case No.: 08-14188

Chapter 11 Petition Date: December 16, 2008

Court: Northern District of New York (Albany)

Debtor's Counsel: Justin A. Heller, Esq.
                  jheller@nolanandheller.com
                  Nolan & Heller, LLP
                  39 North Pearl St.
                  Albany, NY 12207
                  Tel: (518) 449-3300

Total Assets: $14,856,000

Total Debts: $16,258,125

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim     Claim Amount
   ------                      ---------------     ------------
GMAC Mortgage                  property;           $1,191,002
P.O. Box 4622                  secured: $1,675,000
Waterloo, IA 50704-4622

Carrington Mortgage            property;           $849,799
Services, LLC                  secured: $500,000
P.O. Box 54285
Irvine, CA 92619-4285

Citimortgage, Inc.             property;           $627,165
P.O. Box 9438                  secured: $150,000
Gaithersburg, MD 20898-9438

Specialized Loan Servicing     property;           $586,759
LLC                            secured: 475,000

Washington Mutual Bank         property;           $539,137
                               secured: $325,000

Countrywide Home Loans         property;           $415,424
                               secured: $160,000

Chase Home Finance             property;           $379,042
P.O. Box 24573                 secured: $200,000
Columbus, OH 43224

American Home Mortgage         property;           $367,500
Servicing, Inc.                secured: $250,000

Wachovia Mortgage FSB          property;           $254,901
                               secured: 175,000

Option One Mortgage            property;           $254,811
                               secured: $199,000

Aurora Loan Services           property;           $216,000
                               secured: $130,000

CIT Group/Consumer             property;           $141,537
Finance, Inc.                  secured: $90,000

Citibank, N.A.                 Property;           $86,180
                               secured: $849,799

Montgomery County              property            $53,633
Treasurer

The petition was signed by president and chief executive officer
Geoffrey S. Goldman.


MORGAN STANLEY: Moody's Junks Ratings on 3 Classes of Certificates
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of eight classes
and affirmed 20 classes of Morgan Stanley Capital I Trust 2007-
IQ14, Commercial Mortgage Pass-Through Certificates, Series 2007-
IQ14:

   -- Class A-1, $100,350,168, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class A-2, $682,300,000, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class A-2FL, $500,000,000, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class A-3, $53,800,000, affirmed at Aaa; previously assigned
      Aaa on 6/26/2007

   -- Class A-AB, $140,800,000, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class A-4, $1,062,242,000, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class A-5FL, $150,000,000, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class A-1A, $722,578,591, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class A-M, $420,487,000, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class A-MFL, $70,000,000, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class X, Notional, affirmed at Aaa; previously assigned Aaa
      on 6/26/2007

   -- Class A-J, $200,000,000, affirmed at Aaa, previously
      assigned Aaa on 6/26/2007

   -- Class A-JFL, $192,389,000, affirmed at Aaa; previously
      assigned Aaa on 6/26/2007

   -- Class B, $18,394,000, affirmed at Aa1; previously assigned
      Aa1 on 6/26/2007

   -- Class C, $79,704,000, affirmed at Aa2; previously assigned
      Aa2 on 6/26/2007

   -- Class D, $55,179,000, affirmed at Aa3; previously assigned
      Aa3 on 6/26/2007

   -- Class E, $12,263,000, affirmed at A1; previously assigned A1
      on 6/26/2007

   -- Class F, $42,917,000, affirmed at A2; previously assigned A2
      on 6/26/2007

   -- Class G, $42,918,000, affirmed at A3; previously assigned A3
      on 6/26/2007

   -- Class H, $73,573,000, affirmed at Baa1; previously assigned
      Baa1 on 6/26/2007

   -- Class J, $49,049,000, downgraded to Baa3 from Baa2;
      previously assigned Baa2 on 6/26/2007

   -- Class K, $55,179,000, downgraded to Ba2 from Baa3;
      previously assigned Baa3 on 6/26/2007

   -- Class L, $18,394,000, downgraded to Ba3 from Ba1; previously
      assigned Ba1 on 6/26/2007

   -- Class M, $12,262,000, downgraded to B2 from Ba2; previously
      assigned Ba2 on 6/26/2007

   -- Class N, $24,524,000, downgraded to B3 from Ba3; previously
      assigned Ba3 on 6/26/2007

   -- Class O, $12,262,000, downgraded to Caa1 from B1; previously
      assigned B1 on 6/26/2007

   -- Class P, $12,262,000, downgraded to Caa2 from B2; previously
      assigned B2 on 6/26/2007

   -- Class Q, $18,394,000, downgraded to Caa3 from B3; previously
      assigned B3 on 6/26/2007

Moody's downgraded Classes J, K, L, M, N, O, P and Q due to the
overall decline in pool performance, increased dispersion of loan
credit quality and anticipated losses from loans in special
servicing.  Moody's weighted average loan to value (LTV) ratio is
127% compared to 121% at securitization.  In addition to an
overall increase in LTV, LTV dispersion has increased since
securitization.  Based on Moody's analysis, approximately 60% of
the pool has an LTV in excess of 120% compared to 45% at
securitization.

As of the November 17, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by less than 1% to
$4.88 billion from $4.90 billion at securitization.  The
Certificates are collateralized by 424 mortgage loans ranging in
size from less than 1% to 16% of the pool, with the top 10 loans
representing 41% of the pool.

The pool has not experienced any losses since securitization.
There are five loans currently in special servicing, including the
pool's fourth and eighth largest loans.  The specially serviced
loans represent 6% of the pool.  The largest specially serviced
loan is the New York City Apartment Portfolio ($195.0 million --
4.0%), which is secured by 37 multifamily properties (1,299 units)
located in East Harlem, New York.  The loan was transferred to
special servicing in September 2008 due to the Voluntary
Administrative Receivership filing of the loan's U.K.-based
guarantors, Insureprofit Limited and Starlight Investments
Limited.  This action constituted a non-monetary default of the
loan.  The properties are undergoing a renovation and conversion
of rent regulated units to market rents.  The conversion is
proceeding slower than expected.  At securitization, a
$5.0 million interest reserve was established to cover debt
service shortfalls.  Currently, approximately $1.3 million of this
reserve remains.  The special servicer estimates that the reserve
may be depleted by the end of the third quarter of 2009.  In
addition to the first mortgage loan, there is a $20.0 million
mezzanine loan secured by a pledge of equity interests in the
borrower.  Although Moody's does not anticipate a loss on this
loan in the near term, Moody's current analysis reflects a slower
rate of conversion of units to market rents, higher operating
expenses and a lower market rental growth rate.

The second largest loan in special servicing is the City View
Center Loan ($81.0 million -- 1.7%), which is secured by a 506,000
square foot retail center located in Garfield Heights, Ohio.  The
loan was transferred to special servicing on November 12, 2008,
due to a decline in debt service coverage.  The largest tenant,
Wal-Mart (29% of gross leasable area (GLA); lease expiration
2027), vacated in September 2008 because of concerns about
environmental issues.  The property had previously been utilized
as a quarry and later as a landfill that ceased operations in the
1970's.  The landfill was subsequently capped and a gas extraction
system was installed.  The property is operating under the
supervision of the Ohio EPA, which filed a suit in July 2008
against the developer and borrower over alleged failures to comply
with EPA provisions.  The litigation was settled in early December
and a consent order has been entered into which requires the
previous owner/developer of the property to install supplementary
gas extraction and monitoring systems as well as a leachate
collection system.  Both the previous owner and the current owner
are required to operate and maintain these systems.  Wal-Mart has
not indicated whether it will re-open the store.  Several other
tenants, including Jo-Ann Stores and PetSmart, have also vacated
the center and the Circuit City store is on the company's list of
store closings.  Moody's LTV is 182% compared to 118% at
securitization.  Moody's is currently estimating an aggregate
$2.7 million loss for the remaining specially serviced loans.

Seventy-one loans, representing 14% of the pool, are on the master
servicer's watchlist.  The watchlist includes loans which meet
certain portfolio review guidelines established as part of the
Commercial Mortgage Securities Association's monthly reporting
package.  As part of Moody's ongoing monitoring of a transaction,
Moody's reviews the watchlist to assess which loans have material
issues that could impact performance.

Moody's was provided with partial and full-year year 2007 and
partial-year 2008 operating results for 94% and 59% of the pool,
respectively.

The three largest loan exposures represent 26.3% of the pool. The
largest exposure is the Beacon Seattle & DC Portfolio ($775.0
million -- 15.9%), which represents a pari passu interest in a
$2.7 billion first mortgage loan.  The loan is secured by 20
office properties located in Washington, Virginia and Washington,
DC. The buildings range from 103,000 to 1.1 million square feet
and total 9.8 million square feet.  The portfolio was 92% occupied
as of June 2008 compared to 97% at securitization.  The loan is
interest only for the entire five year term.  Moody's LTV is 158%
compared to 154% at securitization.

The second largest exposure is the Tabor Center and U.S. Bank
Tower Loan ($300.0 million -- 6.1%), which is secured by two Class
A office properties totaling 1.2 million square feet located in
downtown Denver, Colorado.  The overall occupancy of the two
properties was 95% as of March 2008, essentially the same as at
securitization.  The largest tenant is U.S. Bank, which occupies
11% of the premises through December 2016.  The loan is interest
only for its entire five year term.  Moody's LTV is 143%, the same
as at securitization.

The third largest exposure is the PDG Portfolio Loan
($212.0 million -- 4.3%), which is secured by 11 retail properties
located in the Phoenix, Arizona MSA.  The properties range from
35,000 to 288,000 square feet and total 1.5 million square feet.
At securitization, several of the properties were leased at below
market occupancy levels.  It was anticipated that the occupancy of
these properties would increase but this has not yet happened.
The loan is interest only for its entire 10-year term.  Moody's
LTV is 138% compared to 124% at securitization.

Moody's monitors transactions on both a monthly basis through two
sets of quantitative tools: MOST(R) (Moody's Surveillance Trends)
and CMM on Trepp, and a periodic basis through a full review.
Moody's prior full review is summarized in a Pre-Sale Report dated
May 11, 2007.


NEFF CORP: S&P Lowers Corp. Credit Ratings to Selective Default
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Miami-based equipment rental company Neff Corp. (Neff),
and subsidiary Neff Rental Inc., to 'SD' (selective default) from
'CC'.  "We also lowered the issue-level rating on Neff's 10%
senior notes due 2015 to 'D' from 'C'," S&P said.

"At the same time, we removed the ratings from CreditWatch, where
they were placed with negative implications on Nov. 18, 2008.  In
addition, we withdrew our recovery rating on the senior notes.

"The downgrade follows the company's announcement that
approximately $196 million aggregate principal amount of the
senior notes, representing 85% of the outstanding senior notes,
were validly tendered," said Standard & Poor's credit analyst
Helena Song.  "As we noted when we placed ratings on CreditWatch,
we consider the offer a distressed exchange and, as such,
tantamount to a default.  The rating actions reflect effective
completion of the tender offer."

"We will continue to rate Neff and could raise the rating back to
the 'CCC' category or higher, depending on our assessment of the
company's new capital structure and liquidity profile."


NES RENTALS: S&P Holds 'B+' Rating & Revises Outlook to Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on NES
Rentals Holdings Inc. to negative from stable.  "At the same time,
we affirmed all ratings on the company, including the 'B+' long-
term corporate credit rating," S&P said.

"The outlook revision reflects our expectation that, amid
weakening conditions in nonresidential construction markets, NES's
earnings and credit quality could come under pressure," said
Standard & Poor's credit analyst Helena Song.  "We expect that
credit measures (debt to EBITDA) would remain on the higher end of
our expectations for the rating."

The ratings on NES Rentals reflect Standard & Poor's Ratings
Services' assessment of the company's weak business risk profile
as a regional equipment rental provider and its highly leveraged
financial profile.  As a regional company, NES is one of the six
largest operators in the competitive U.S. equipment rental
industry.

Chicago-based NES operates in about 80 locations, offering general
construction and other equipment for rent to construction and
petrochemical companies and other industrial end users.  The
commercial rental equipment industry is highly fragmented and
competitive, and demand relies a great deal on nonresidential
construction.  Competition comes mainly from local equipment
rental companies and other regional companies such as H & E
Equipment Services Inc., Sunbelt Rentals (a unit of U.K.-based
Ashtead Group PLC), and national competitors RSC Equipment Rental
and United Rentals Inc.

Nonresidential construction spending has started to turn down in
2008 and Standard & Poor's expects it to continue to decline in
2009. Rental rates, which have increased for the past several
years, have started to decline, as are utilization rates.

"NES reorganized and emerged from Chapter 11 in February 2004, and
management has reduced the number of its locations to about 80,
mainly as a result of asset sales, improved margins, and reduced
headcount and fixed costs.  We expect the company to reduce
capital spending following a period of increased investments.  NES
expects to remain customer-focused and to grow organically,
compared with its previous strategy of growth through
acquisitions."

"An affiliate of private equity firm Diamond Castle Holdings LLC
acquired NES in July 2006, in a transaction valued at
$850 million.  Debt is still a major component of the capital
structure and leverage is relatively high, at more than 85% debt
to capital (adjusted for operating leases).  We estimated total
debt (adjusted for operating leases) to EBITDA as of Sept. 30,
2008, to be about 4.2x.  The company is in compliance with its
financial covenants.  The current ratings and outlook are based on
the assumption that key end markets, specifically nonresidential
construction markets, will decline by 15% in 2009.  However, we
could lower the rating if nonresidential spending drops
significantly in 2009, or if NES is unlikely to generate more than
$25 million of free operating cash flow in 2009.  Upside potential
for the rating is limited at this point in the cycle."


NEWPORT WAVES: Moody's Downgrades Ratings on 29 Classes of Notes
----------------------------------------------------------------
Moody's Investors Service has downgraded its ratings of twenty-
nine classes of notes issued by Newport Waves CDO.

The Newport Waves CDO transactions are synthetic CDO tranches
referencing the same managed pool of corporate entities.  The
rating actions are a response to the exposure of corporate names
with signigicant credit deterioration in the current economic
environment.  This will weigh on the ratings of the tranches in
this transaction.

Class Description: Series 1 $1,000,000 Sub-Class B3A-$L Notes Due
2014

       Prior Rating: Baa3
       Prior Rating Date: 6/28/2007
       Current Rating: Ba2

Class Description: Series 1 $1,000,000 Sub-Class B3A-$F Notes Due
2014

       Prior Rating: Baa3
       Prior Rating Date: 6/28/2007
       Current Rating: Ba2

Class Description: Series 1 $1,000,000 Sub-Class B3-$F Notes Due
2014

       Prior Rating: Baa3
       Prior Rating Date: 6/28/2007
       Current Rating: Ba2

Class Description: Series 1 $1,250,000 Sub-Class A7-$L Notes Due
2014

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 1 $1,250,000 Sub-Class B2-$L Notes Due
2014

       Prior Rating: Baa2
       Prior Rating Date: 6/28/2007
       Current Rating: Ba1

Class Description: Series 1 $1,500,000 Sub-Class A7B-$F Notes Due
2014

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 1 $2,000,000 Sub-Class A7A-$L Notes Due
2014

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 1 $10,000,000 Sub-Class B3-$L Notes Due
2014

       Prior Rating: Baa3
       Prior Rating Date: 6/28/2007
       Current Rating: Ba2

Class Description: Series 2 $850,000 Sub-Class B2A-$F Notes Due
2017

       Prior Rating: Baa2
       Prior Rating Date: 6/28/2007
       Current Rating: Baa3

Class Description: Series 2 $1,000,000 Sub-Class B2-$F Notes Due
2017

       Prior Rating: Baa2
       Prior Rating Date: 6/28/2007
       Current Rating: Baa3

Class Description: Series 2 $1,000,000 Sub-Class B3-$L Notes Due
2017

       Prior Rating: Baa3
       Prior Rating Date: 6/28/2007
       Current Rating: Ba2

Class Description: Series 2 $1,400,000 Sub-Class A7B-$L Notes Due
2017

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 2 $1,500,000 Sub-Class A7-$LS Notes Due
2017

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 2 $2,400,000 Sub-Class A7D-$F Notes Due
2017

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 2 $5,000,000 Sub-Class A7-$L Notes Due
2017

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 2 $5,000,000 Sub-Class A7A-$L Notes Due
2017

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 2 $5,000,000 Sub-Class A7C-$L Notes Due
2017

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 2 $10,000,000 Sub-Class B2-$L Notes Due
2017

       Prior Rating: Baa2
       Prior Rating Date: 6/28/2007
       Current Rating: Baa3

Class Description: Series 2 $25,000,000 Sub-Class B3-$F Notes Due
2017

       Prior Rating: Baa3
       Prior Rating Date: 6/28/2007
       Current Rating: Ba2

Class Description: Series 3 CLP5,401,000,000 Sub-Class A7-CLP
Notes Due 2017

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 4 Yen500,000,000 Sub-Class A6-YL Notes
Due 2014

       Prior Rating: A2
       Prior Rating Date: 6/28/2007
       Current Rating: Baa1

Class Description: Series 5 $50,000,000 Sub-Class A1-$LMS Notes
Due 2014

       Prior Rating: Aaa
       Prior Rating Date: 6/28/2007
       Current Rating: Aa1

Class Description: Series 5 $60,000,000 Sub-Class A3-$LMS Notes
Due 2014

       Prior Rating: Aa2
       Prior Rating Date: 6/28/2007
       Current Rating: Aa3

Class Description: Series 6 Yen1,000,000,000 Sub-Class A6-YL Notes
Due 2017

       Prior Rating: A2
       Prior Rating Date: 6/28/2007
       Current Rating: Baa1

Class Description: Series 7 EUR8,000,000 Sub-Class A6-EL Notes Due
2014

       Prior Rating: Baa1
       Prior Rating Date: 8/20/2008
       Current Rating: Baa2

Class Description: Series 10 $10,000,000 Sun-Class A5-$L Notes Due
2017

       Prior Rating: A1
       Prior Rating Date: 6/28/2007
       Current Rating: A3

Class Description: EUR20,000,000 A7-ES Newport Waves CDO Linked
CDS

       Prior Rating: A3
       Prior Rating Date: 6/28/2007
       Current Rating: Baa3

Class Description: EUR20,000,000 B2-ES Newport Waves CDO Linked
CDS

       Prior Rating: Baa2
       Prior Rating Date: 6/28/2007
       Current Rating: Ba1

Class Description: $7,500,000 A7-$S New port Waves CDO Linked CDS

       Prior Rating: A3
       Prior Rating Date: 6/28/2007
       Current Rating: Baa2


NORTEL NETWORKS: Moody's Junks Rating on Series 2001-1 Certs.
-------------------------------------------------------------
Moody's Investors Service downgraded the rating of Nortel Networks
Lease Pass-Through Trust, Pass-Through Trust Certificates, Series
2001-1:

   -- Cusip 65656MAA9, $120,350,219, downgraded to Caa2 from B3;
      previously confirmed at B3 on 8/12/2005

Moody's downgraded the transaction's rating to align with the
corporate rating of Nortel Networks Limited which was downgraded
on December 15, 2008 (backed senior unsecured rating Caa2,
negative outlook).

The transaction is supported by a mortgage on two office buildings
situated in Raleigh, North Carolina which are leased to Nortel
Networks Inc., a wholly owned subsidiary of Nortel Networks
Limited.  Nortel guarantees rent payments and performance of the
tenant's obligations under the lease.  The lease is for a 15-year
term, subject to four five-year renewal options.  If the tenant
does not extend the lease, the note will be redeemed by a surety
bond issued by ZC Specialty Insurance Company (financial strength
rating A3, stable outlook).

The rating on the note was assigned by evaluating factors
determined to be applicable to the credit profile of the note,
such as: i) the nature, sufficiency and quality of historical
performance information regarding the asset class as well as for
the transaction sponsor; ii) an analysis of the collateral being
securitized; iii) an analysis of the policies, procedures and
alignment of interests of the key parties to the transaction, most
notably the originator and the servicer; iv) an analysis of the
transaction's governance and legal structure; and vi) a comparison
of these attributes against those of other similar transactions.

In rating this transaction, Moody's used its credit-tenant lease
financing rating methodology.  Under Moody's CTL approach, the
rating of a transaction's certificates is primarily based on the
senior unsecured debt rating (or the corporate family rating) of
the tenant, usually an investment grade rated company, leasing the
real estate collateral supporting the bonds.  This tenant's credit
rating is the key factor in determining the probability of default
on the underlying lease.  The lease generally is "bondable", which
means it is an absolutely net lease, yielding fixed rent, paid to
the trust through a lock-box, sufficient under all circumstances
to pay in full all interest and principal of the loan.  The leased
property should be owned by a bankruptcy-remote, special purpose
borrower, which grants a first lien mortgage and assignment of
rents to the securitization trust.  The dark value of the
collateral, which assumes the property is vacant or "dark", is
then examined, which value must be sufficient, assuming a
bankruptcy of the tenant and rejection of the lease, to support
the expected loss consistent with the certificates' rating.  The
certificates' rating will change as the senior unsecured debt
rating (or the corporate family rating) of the credit tenant may
change.  Moody's also considers the overall structure and legal
integrity of the transaction.


OFFICE DEPOT: Moody's Downgrades CFR to Ba3; Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded Office Depot, Inc.'s
corporate family and probability of default ratings to Ba3, and
downgraded the senior unsecured note rating to B1.  The outlook is
negative.  Office Depot's SGL-3 speculative grade liquidity rating
was affirmed.  This concludes the review for possible downgrade
that was initiated on October 29, 2008.

The downgrade results from a continuing weak sales environment,
which is forcing Office Depot to close underperforming stores, as
well as Moody's expectation that fourth quarter 2008 operating
performance will be weak, with little improvement occurring until
at best late-2009.  The company recently announced that it will be
closing 112 underperforming retail stores, or approximately 9% of
its store base, and 6 of its 33 distribution centers.  "Office
Depot's decision to cull its store and distribution center base
and slow new store openings in the face of a difficult
macroeconomic-driven sales environment makes sense for the long-
term," stated Moody's Senior Analyst Charlie O'Shea.  "The issue
for the short-to-medium-term remains how weak the company's
operating performance and credit metrics will become.  Moody's
feels it likely that Office Depot's leverage will remain well
above 5 times for the foreseeable future, which is more reflective
of a low-Ba/high-B credit profile."

Office Depot's Ba3 rating considers its credit metrics, which have
weakened dramatically thus far in 2008, with the fourth quarter
expected to continue the trend, resulting in a credit profile more
representative of a low-Ba/high B rating.  Debt/EBITDA for the
September 2008 LTM is 5.7 times, with the likelihood that this
level will not improve once fourth quarter 2008 is cycled in.  The
rating also considers ODP's still solid, though weakening, number
two position in the office supplies segment, balanced by the
difficult macroeconomic operating environment in the U.S. which
continues to compress operating performance.  The negative outlook
considers the increased risk that credit metrics may continue to
deteriorate well into 2009.

The affirmation of Office Depot's SGL-3 speculative grade
liquidity rating considers that despite revenue and profit
declines, liquidity remains adequate.  A key factor in the
affirmation is the company's $1.25 billion asset-based revolving
credit facility which has no active financial covenants and should
continue to provide solid alternate liquidity.

Ratings downgraded include:

   * Corporate family rating to Ba3 from Ba1;

   * Probability of default rating to Ba3 from Ba1, and

   * Senior unsecured notes to B1 (LGD-5, 74%) from Ba2
     (LGD-5, 72%)

Rating affirmed:

   * Speculative grade liquidity rating of SGL-3.

The last rating action for Office Depot was the October 29, 2008
placing of the ratings on review for possible downgrade.

Office Depot, Inc., based in Boca Raton, Florida, is the second
largest retailer of office supplies, with LTM September 2008
revenues of $15.1 billion and 1,275 retail locations in North
America.


OLIN CORP: S&P Assigns Preliminary Low-B Ratings on Debts
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BB+'
senior debt and 'BB-' subordinated debt ratings to the new shelf
registration filed Dec. 12, 2008, by Olin Corp. (BB+/Stable/--).
The shelf registration covers an indeterminate amount of senior
and subordinated debt securities, preferred stock, common stock,
and warrants. Proceeds from future drawdowns may be used for
general corporate purposes, including additions to working
capital, capital expenditures, stock repurchases, repayment of
indebtedness, and acquisitions. The Clayton, Mo.-based chemical
manufacturing company had total debt of roughly $250 million at
Sept. 30, 2008.

"Although Olin's shelf registration has been refreshed, we
anticipate that the company will prudently manage its use of
leverage in order to continue to support its current ratings,"
said Standard & Poor's credit analyst James T. Siahaan.

Continued strength in caustic soda pricing should help temper the
weakness in chlorine, with the effects of the most recent pricing
initiatives still to be realized. Operating results are currently
favorable, and should remain reasonable during the near-to-
intermediate term, given the company's currently manageable level
of debt,, a reduction in Olin's funds from operations would have
to be substantial for credit measures to be pressured.

Olin's earnings are considerably exposed to commodity markets that
are subject to changes in economic conditions and the balance
between supply and demand for its key products, a factor that
constrains credit quality prospects.

"If there is a meaningful negative divergence from anticipated
income because of a worse-than-expected business cycle, or if more
debt is added into the capital structure, we could revise the
outlook to negative or lower ratings, Mr. Siahaan said.


PARK-OHIO INDUSTRIES: S&P Holds B+ Long-Term Rating; Outlook Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Cleveland, Ohio-based Park-Ohio Industries Inc. to negative from
stable.  "At the same time, we affirmed our ratings on the
company, including the 'B+' long-term corporate credit rating,"
S&P said.

"The outlook revision reflects weaker-than-expected operating
performance, and credit metrics," said Standard & Poor's credit
analyst Sarah Wyeth.  Earnings have been affected by weakness in
key end markets, particularly auto and heavy-duty truck
manufacturing.  Declining profitability and lower cash generation
could put pressure on the company's debt service coverage
covenant.

"The ratings on Park-Ohio reflect the company's highly leveraged
financial profile and its weak business profile as a diversified
operator of logistics and manufacturing businesses, serving
cyclical and competitive end markets.  Park-Ohio, a wholly owned
subsidiary of unrated Park-Ohio Holdings Corp., operates three
business segments, which serve a variety of end markets, including
transportation, semiconductors, industrial equipment, agricultural
equipment, construction equipment, and aerospace.  The supply
technologies segment (formerly known as integrated logistics
service), which generated about 48% of sales in the first nine
months of 2008, supplies production components via supply chain
management and wholesale distribution services.  The manufacturing
products segment (around 37% of sales) designs and produces forged
and machined products for specific customer applications.  The
aluminum products segment engineers, casts, and produces various
aluminum components for original equipment manufacturers,
primarily in the auto industry, and accounts for about 15% of
sales.

"Park-Ohio's credit quality results from the cyclical,
competitive, and seasonal character of its end markets, including
the auto and heavy-duty truck manufacturing segments, which
account for about 24% and 11% of net sales, respectively.  The
company recently announced that it does not expect to renew the
majority of its business with Navistar, its largest customer, due
to weak profitability, reflecting the current weakness in Park-
Ohio's end markets.  The company's low-margin logistics business
has been hurt by low volumes and high raw material costs, but
could see attractive, long-term growth opportunities from
outsourcing among U.S. manufacturers.  Park-Ohio's business
profile benefits from a broad product line, a relatively large,
somewhat diverse customer base, and good geographic diversity with
foreign sales representing almost 30% of revenues.  Operating
margins (before depreciation and amortization) are in the mid- to
high-single-digits and could deteriorate as end markets weaken
further in 2009.

"Total debt (adjusted for operating leases) to EBITDA was 5.8x on
Sept. 30, 2008. Our expectations for the current rating include a
ratio of 4x to 5x.  Funds from operations (FFO) to total debt is
16%, within our expectation of the midteens percentage area.  The
ratings do not incorporate debt-financed acquisitions.

"We could lower the ratings if debt to EBITDA exceeds 6x or if the
covenant headroom declines meaningfully.  Covenants could be
violated, for example, if EBITDA declines to $65 milion and
capital expenditures remains above $20 million."


PERKINS & MARIE: S&P Junks Corp. Credit Rating; Outlook Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Memphis, Tenn.-based Perkins & Marie Callender's Inc.'s
(Perkins) to 'CCC' from 'B-.'  The outlook is negative.

"The downgrade reflects our growing concern that Perkins'
liquidity may not be adequate to meet the interest payments on its
$190 million unsecured 10% senior notes and $132 million 14%
senior secured notes when they come due in April and May 2009,
respectively," said Standard & Poor's credit analyst Jackie E.
Oberoi.  In addition, Perkins' poor operating performance has led
to weakening credit metrics, with leverage that reached more than
11x as of the 12 months ended Oct. 5, 2008, and interest coverage
of less than 1x.


PIERRE FOODS: Consummates Ch. 11 Plan, Exits Bankruptcy
-------------------------------------------------------
Pierre Foods Inc. said it has consummated its Chapter 11 plan and
exited reorganization on Dec. 12.

"Pierre Foods is emerging from Chapter 11 with a strengthened
balance sheet and is well positioned to capitalize on the
significant opportunities we see today and in the future," said
William Toler, the new CEO of the company.  "The entire team is
energized and looking forward to continuing our growth as a
stronger company. In only five months, the Company has effectively
addressed its financial and operational challenges and laid a
strong foundation for its future.  The expeditious restructuring
of Pierre is a testament to its loyal employees, dedicated
customers and vendors and the strong relationship we have with our
new owner sponsor, Oaktree Capital Management.  I believe everyone
at the Company is energized and excited to continue this success
as we begin operating outside of Chapter 11."

Bloomberg's Bill Rochelle notes that the Plan, which was confirmed
Dec. 11, reduces debt by $266 million, gives control to the
secured lender Oaktree Capital Management LLC, pays 12 percent
cash to unsecured creditors, and converts $242 million in pre-
bankruptcy secured debt into all of the new equity and a $85
million secured, subordinated mezzanine loan.  The secured debt
holders are estimated to recover between 73% and 92%.

As reported by the Dec. 11 issue of the Troubled Company Reporter,
with the Bankruptcy Court's approval of the Plan, funds managed by
Oaktree Capital Management L.P., have become the majority owner of
Pierre.  Oaktree Capital is Pierre's single largest creditor and
provider of the company's debtor-in-possession credit facility.

The Plan also provides for these terms:

-- a portion of the existing prepetition secured indebtedness
    will be satisfied in cash;

-- conversion of $85 million of existing prepetition secured
    indebtedness to a new mezzanine facility;

-- conversion of the remainder of the existing prepetition
    secured indebtedness to 100% of the equity of Reorganized
    Pierre;

-- a new exit facility in the amount of $95 million to fund the
    Company's ongoing operations and pay obligations under the
    Plan.  The Company expects less than $60 million to be drawn
    at exit;

-- the Debtors' Senior Subordinated Notes in the principal
    amount of $125 million will be cancelled; and

-- 12% cash recovery for unsecured creditors including holders
    of Senior Subordinated Notes.

                      About Pierre Foods

Based in Cincinnati, Ohio, Pierre Foods, Inc. --
http://www.pierrefoods.com-- manufactures and sells ready-to-cook
and pre-cook products.  The company and and 13 of its affiliates
filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del.
Lead Case No. 08-11469).  Jonathan S. Henes, Esq., and Lisa G.
Laukitis, Esq., at Kirkland & Ellis; and Daniel J. DeFranceschi,
Esq., and Paul N. Heath, Esq., at Richards, Layton & Finger P.A.,
represent the Debtors in their restructuring efforts.  The Debtors
selected Kurtzman Carson Consultants LLC as their claims agent.
The United States Trustee for Region 3 appointed creditors to
serve on an Official Committee of Unsecured Creditors.  The
Committee selected Michael S. Stamer, Esq., at Akin Gump Strauss
Hauer & Feld LLP, in New York, and James R. Savin, Esq., at Akin
Gump's Washington, D.C. office, as counsel.  Oaktree Capital
Management, the Debtors' DIP lender and which is serving as plan
sponsor, is represented by Van C. Durrer, II, Esq., at Skadden
Arps, Slate Meagher & Flom LLP, in Los Angeles, California.
Wachovia Bank, N.A., the administrative agent under the Debtors'
June 2004 credit agreement, is represented by Gregory Bray, Wsq.,
and Haig Mark Maghakian, Esq., at Milbank Tweed Hadley McCloy LLP


PIERRE FOODS: W. Toler to Lead Firm as CEO Post-Emergence
---------------------------------------------------------
In connection with its emergence, Pierre Foods Inc. said William
Toler, has been named chief executive officer Dec. 12, when the
company emerged from bankruptcy.  Mr. Toler succeeds Norbert
Woodhams, who is retiring from the company.

Pierre's Chapter 11 Plan was confirmed by the United States
Bankruptcy Court for the District of Delaware on Dec. 10, 2008.
In conjunction with the Plan, Pierre has also closed its
$95 million exit financing facility.

Mr. Toler said, "It is an honor to be given the opportunity to
lead Pierre's talented team of employees.  We will get started
right away and utilize the positive momentum from the emergence
from Chapter 11 to keep the Company moving in the right direction.
While there is still work to be done, I believe Pierre is now a
financially stable company and can be a major competitor in the
industry. On behalf of everyone at Pierre, I would like to wish
Norb the best in his future endeavors."

As of Dec. 12, Pierre's new Board of Directors includes:

  -- Steven Kaplan - Chairman of the Board
  -- William D. Toler - Director
  -- Matthew Wilson - Director

Additionally, the company expects to announce the appointment of
two new members of the Board in the coming weeks.

Mr. Toler brings more than 25 years of industry experience to
Pierre Foods.  He most recently served as President of Pinnacle
Foods and was a member of its Board of Directors. Mr. Toler joined
Pinnacle Foods in March 2004 as Executive Vice President, Sales.
Prior to that, Mr. Toler oversaw Aurora's sales department
beginning in April 2003. Previously, he was President of North
America for ICG Commerce, a procurement services company.  Prior
to joining ICG Commerce, Mr. Toler was President of Campbell Sales
Company from 1995 to 2000.  At Campbell Sales Company, he was
responsible for $4 billion in sales, including Campbell Soup
Company's flagship soup brands Condensed, Chunky and Select, V-8
beverages, and Prego and Pace sauces. He joined Campbell Sales
Company from Nabisco, where he was Vice President, Sales and
Integrated Logistics from 1992 to 1995. Prior to Nabisco, he was
Vice President/National Sales Manager for Reckitt & Colman from
1989 to 1992. Mr. Toler began his career at Procter & Gamble,
where he worked from 1981 to 1989.

                      About Pierre Foods

Based in Cincinnati, Ohio, Pierre Foods, Inc. --
http://www.pierrefoods.com-- manufactures and sells ready-to-cook
and pre-cook products.  The company and and 13 of its affiliates
filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del.
Lead Case No. 08-11469).  Jonathan S. Henes, Esq., and Lisa G.
Laukitis, Esq., at Kirkland & Ellis; and Daniel J. DeFranceschi,
Esq., and Paul N. Heath, Esq., at Richards, Layton & Finger P.A.,
represent the Debtors in their restructuring efforts.  The Debtors
selected Kurtzman Carson Consultants LLC as their claims agent.
The United States Trustee for Region 3 appointed creditors to
serve on an Official Committee of Unsecured Creditors.  The
Committee selected Michael S. Stamer, Esq., at Akin Gump Strauss
Hauer & Feld LLP, in New York, and James R. Savin, Esq., at Akin
Gump's Washington, D.C. office, as counsel.  Oaktree Capital
Management, the Debtors' DIP lender and which is serving as plan
sponsor, is represented by Van C. Durrer, II, Esq., at Skadden
Arps, Slate Meagher & Flom LLP, in Los Angeles, California.
Wachovia Bank, N.A., the administrative agent under the Debtors'
June 2004 credit agreement, is represented by Gregory Bray, Wsq.,
and Haig Mark Maghakian, Esq., at Milbank Tweed Hadley McCloy LLP


PFAU PFAU: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Pfau, Pfau & Pfau, LLC
        P.O. Box 838
        Fallbrook, CA 92088

Bankruptcy Case No.: 08-12840

Type of Business: The Debtor is a real estate developer.

Chapter 11 Petition Date: December 16, 2008

Court: Southern District of California (San Diego)

Judge: Peter W. Bowie

Debtor's Counsel: Thomas C. Nelson, Esq.
                  550 West C Street, Suite 1850
                  San Diego, CA 92101
                  Tel: (619) 236-1245

Total Assets: $130,767,480

Total Debts: $48,709,138

The Debtor's Largest Unsecured Creditors:


   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Sheldon Group                  services          $321,618
901 Dove Street, Suite 140
Newport Beach, CA 92660
Tel: (949) 777-9400

Excel Engineering              services          $290,438
440 State Place
Escondido, CA 92029
Tel: (760) 745,8118

Consultants Collaborative      services          $175,000
160 Industrial Street #200
San Marcos, CA 92078
Tel: (760) 471-2365

BHA                            services          $139,510

Angie Wolf Consulting          services          $60,000

The Planning Center            services          $51,768

Summer/Murphy & Partners       servcices         $28,251

Premium Assignment Corp.       services          $10,926

Wesley W. Peltzer              services          $6,048

PBS&J                          services          $5,892

Rick Gittings                  services          $5,850

William Hezmalhalch            services          $3,340

The petition was signed by managing member Ray Gray.


POLYONE CORP: S&P Cuts Corp. Credit Rating to 'B'; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on PolyOne
Corp., including lowering its corporate credit rating to 'B' from
'B+'.  The outlook is stable.

According to S&P: "At Sept. 30, 2008, the company had about $730
million in adjusted debt outstanding.  We adjusted debt to include
capitalized operating leases, an accounts receivable
securitization program, and tax-adjusted pension benefits.

"The downgrade reflects our expectations for weak earnings in the
next several quarters and, consequently, for weaker credit metrics
in 2009," said Standard & Poor's credit analyst Paul Kurias.  "In
particular, the ratio of funds from operations to total debt is
expected to be around 10% in 2009, which is below our expectation
of 15% for the previous rating."

"We could lower the ratings if earnings decline more than we
expect because of weaknesses in the operating environment to the
extent that EBITDA declines meaningfully below the Sept. 30, 2008,
level of about $115 million.  This would result in the key credit
ratio of funds from operations to total debt to be below our
expectations of 10% for the rating.  We will also lower ratings if
liquidity, including availability and cash, declines from current
levels on a sustained basis, or if the EBITDA covenant cushion is
consistently below 10%."


POTLATCH CORP: Fitch Affirms IDR and Revenue Bonds Rating at 'BB+'
------------------------------------------------------------------
Fitch Ratings has taken various rating actions on Potlatch
Corporation's (PCH) Issuer Default Rating (IDR) and debt ratings:

   -- $250 million new senior secured revolving credit facility
      rated 'BBB-';

   -- IDR affirmed at 'BB+';

   -- Revenue bonds affirmed at 'BB+';

   -- Medium term notes, credit sensitive debentures due in 2009
      and 6.95% notes due in 2015 upgraded to 'BBB-' from 'BB+'.

The upgrade of these securities follows their change in status to
secured obligations sharing first liens on specific Idaho
timberlands with the new secured revolver.

The Ratings Outlook has been revised to Stable from Positive.
PCH has just spun out the common shares of Clearwater Paper
Corporation (Clearwater) to its shareholders.  Clearwater owns the
tissue, pulp and paperboard businesses of PCH and the Lewiston
Idaho wood products facility.  PCH will retain its 1.6 million
acres of timberland and its existing lumber, plywood and
particleboard facilities, apart from Lewiston.  The spin-off is
credit positive as it relieves PCH of the majority of its capital
budget and operations which have not yielded returns commensurate
with those earned in the timberland business.

Clearwater paid PCH $50 million prior to the distribution of its
shares and will owe PCH the debt service on its $100 million of
credit sensitive debentures maturing a year from now.  Should
Clearwater be unable to pay PCH the principal of these bonds by
their maturity, Clearwater will secure its obligation to PCH with
the Cypress Bend Arkansas pulp and paperboard mill.  Clearwater's
payment is contingent upon its free cash flow which may be
impaired by the recession and/or its inability to finance the
payment in otherwise tight credit markets.

The affirmation of PCH's IDR and the change in the Rating Outlook
consider potentially higher leverage if Clearwater fails to make
its payments on time as well as changing business conditions in
2009 that are not expected to flatter PCH's wood products or
logging operations.  Wood products is heavily influenced by
housing starts which have been declining, and PCH's logging
operations are heavily influenced by housing starts and the pulp
markets which have started to decline.  The adverse mix of these
circumstances could push PCH's leverage to 3.5 times (x)
debt/EBITDA by Fitch's estimates before business improves.  This
could adjust down quickly to 2.5x if Clearwater satisfies its
obligations.  At the end of the third quarter before the spin-off
of Clearwater, PCH's leverage ratio was 2.4x.


PRESERVE LLC: May Borrow Up to $2,000,000 from Scott Krentel
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted The Preserve, LLC, permission to borrow up $2 million from
Scott Krentel, the managing director of Beaumont 1600, which
funding will be used for the Debtor's postpetition cash needs.

Beaumont 1600, a California Limited Liability Company, is the
manager of the Debtor.

As security for the payment of the loan, Mr. Krentel is granted
junior liens on 112 acres of vacant land in Riverside County,
California, an office building in the downtown business district
of Riverside, California and a senior lien on a fully entitled
finished residential model home in the City of Adelanto, County of
San Bernardino, California.

To the extent that the security granted to Mr. Krentel is
insufficient to fully secure the loan, Mr. Krentel is granted an
administrative expense under Sec. 503(b)(1) of the Bankruptcy
Code, junior to any fees of professionals employed by the Debtor
under Sec. 327.

The loan will bear interest at the rate of 12% p.a., and will be
due and payable on the earlier of the sale or refinance of any of
the Debtor's real estate assets or Dec. 31, 2009.

Riverside, California-based The Preserve, LLC is in the business
of acquiring and making real estate investments.  The company
filed for Chapter 11 relief on Sept. 25, 2008 (Bankr. C. D. Calif.
No. 08-23006).  Jeffrey W. Broker, Esq., at Broker & Associates
Professional Corporation assists the company in its restructuring
efforts.  The company listed assets of $100 million to
$500 million and debts of $10 million to $50 million.


PUEBLO OF SANTA ANA: Industry to Remain Under Pressure in 2009
--------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


QUEBECOR WORLD: Four Directors Step Down from Board
---------------------------------------------------
Quebecor World Inc. said that its board vice-chairmen Pierre Karl
Peladeau and Erik Peladeau, and audit committee chairmen Jean
Neveu and Jean La Couture have resigned from the Board of
Directors.

The officers also serve on the boards of Quebecor Inc. and
Quebecor Media Inc., and have determined that their resignations
are advisable, as a result of the claims that have been filed by
Quebecor Inc. and its subsidiaries as part of Quebecor World's
court protected restructuring process.

The company's lead director Alain Rheaume was named chairman of
the audit committee of the company and was added as a member of
the restructuring committee.

On the one hand, Andre Caille was appointed as member of the audit
committee.  he continues to chair the restructuring committee
along with  Mr. Rheaume, Michele Desjardins and Jacques Mallette.

Quebecor World does not believe the above mentioned resignations
will impact its plan to exit creditor protection as a strong
company in its industry.

                      About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW) -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Ernst & Young, Inc., the monitor of Quebecor World Inc., and its
affiliates' reorganization proceedings under the Canadian
Companies' Creditors Arrangement Act, filed a petition under
Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court
for the Southern District of New York on September 30, 2008, on
behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814).  The chapter 15
case is before Judge James M. Peck.  Kenneth P. Coleman, Esq., at
Allen & Overy LLP, in New York, serves as counsel to the chapter
15 petitioner.

QWI and certain of its subsidiaries commenced the CCAA proceedings
before the Quebec Superior Court (Commercial Division) on
January 20, 2008.  The following day, 53 of QWI's U.S.
subsidiaries, including Quebecor World (USA), Inc., filed
petitions under Chapter 11 of the U.S. Bankruptcy Code.

The Honorable Justice Robert Mongeon oversees the CCAA case.
Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the
Company in the CCAA case.  Ernst & Young Inc. was appointed as
Monitor.

Quebecor World (USA) Inc., its U.S. subsidiary, along with other
U.S. affiliates, filed for chapter 11 bankruptcy before the U.S.
Bankruptcy Court for the Southern District of New York (Lead Case
No. 08-10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter
LLP, represents the Debtors in their restructuring efforts.  The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

QWI is the only entity involved in the CCAA proceedings that is
not a Debtor in the Chapter 11 Cases.

As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000 total
liabilities of $4,326,500,000 preferred shares of $62,000,000
and total shareholders' deficit of $976,400,000.

The Hon. Robert Mongeon of the Quebec Superior Court has extended
until Dec. 14, 2008, the stay under the Canadian Companies'
Creditors Arrangement Act.


REAL ESTATE ASSET: Moody's Affirms Low-B Ratings on Six Classes
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings of 18 classes of
Real Estate Asset Liquidity Trust, Commercial Mortgage Pass-
Through Certificates, Series 2006-3:

   -- Class A-1, $197,979, affirmed at Aaa; previously assigned
      Aaa on 11/29/2006

   -- Class A-2, $165,826,000, affirmed at Aaa; previously on
      assigned Aaa on 11/29/2006

   -- Class XP-1, Notional, affirmed at Aaa; previously assigned
      Aaa on 11/29/2006

   -- Class XP-2, Notional, affirmed at Aaa; previously assigned
      Aaa on 11/29/2006

   -- Class XC-1, Notional, affirmed at Aaa; previously assigned
      Aaa on 11/29/2006

   -- Class XC-2, Notional, affirmed at Aaa; previously assigned
      Aaa on 11/29/2006

   -- Class B, $9,329;000, affirmed at Aa2; previously assigned
      Aa2 on 11/29/2006

   -- Class C, $9,969,000, affirmed at A2; previously assigned A2
      on 11/29/2006

   -- Class D-1, $1,000, affirmed at Baa2; previously assigned
      Baa2 on 11/29/2006

   -- Class D-2, $9,414,000, affirmed at Baa2; previously assigned
      Baa2 on 11/29/2006

   -- Class E-1, $1,000, affirmed at Baa3; previously assigned
      Baa3 on 11/29/2006

   -- Class E-2, $3,726,000, affirmed at Baa3; previously assigned
      Baa3 on 11/29/2006

   -- Class F, $3,557,000, affirmed at Ba1; previously assigned
      Ba1 on 11/29/2006

   -- Class G, $1,235,000, affirmed at Ba2; previously assigned
      Ba2 on 11/29/2006

   -- Class H, $1,065,000, affirmed at Ba3; previously assigned
      Ba3 on 11/29/2006

   -- Class J, $1,065,000, affirmed at B1; previously assigned B1
      on 11/29/2006

   -- Class K, $937,000, affirmed at B2; previously assigned B2 on
      11/29/2006

   -- Class L, $298,000, affirmed at B3; previously assigned B3 on
      11/29/2006

Moody's affirmed the ratings of this Canadian deal due to overall
stable pool performance.  Moody's weighted average loan to value
ratio for the conduit is 85% compared to 86% at securitization and
only one of the five loans with underlying ratings has seen
negative credit migration.

As of the November 12, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 4% to
$408.5 million from $426.0 million at securitization.  The
Certificates are collateralized by 58 loans, ranging in size from
less than 1% to 7% of the pool, with the top 10 conduit loans
representing 36% of the pool.  The pool includes five loans with
underlying ratings, representing 27% of the pool.

The pool has not realized any losses since securitization and
currently there are no loans in special servicing.  One loan,
representing 5.8% of the pool, is on the master servicer's
watchlist.  The watchlist includes loans which meet certain
portfolio review guidelines established as part of the Commercial
Mortgage Securities Association's monthly reporting package.  As
part of Moody's ongoing monitoring of a transaction, Moody's
reviews the watchlist to assess which loans have material issues
that could impact performance.

Moody's was provided with year-end 2007 operating results for 94%
of the pool.

The largest loan with an underlying rating is the Clearbrook Town
Square Loan ($30.1 million -- 7.4%), which is secured by a 188,000
square foot community shopping center located in Abbotsford,
British Columbia.  The center was 99% occupied as of January 2008,
essentially the same as at securitization.  The center is anchored
by Canada Safeway, which occupies 30% of the premises through
October 2012.  Performance has been stable since securitization.
The loan sponsors are RioCan REIT and Kimco North Trust 1.  The
loan is 100% recourse to RioCan REIT.  Moody's current underlying
rating is Baa2, the same as at securitization.

The second loan with an underlying rating is the Place 9-6 Senior
Interest Loan ($23.5 million -- 5.8%), which is secured by a
151,000 square foot Class B office building located in downtown
Calgary, Alberta.  The property was 99% occupied as of May 2008,
the same as at securitization.  However, in October 2008 the
occupancy dropped to 40% due to the lease expiration of Golder
Associates Ltd.  Although the Class B downtown Calgary submarket
is relatively strong, with an estimated vacancy rate of 5% as of
the third quarter 2008, it has weakened somewhat since
securitization and Moody's anticipates a challenging leasing
environment going forward.  The loan is 100% recourse to the
sponsor, Riaz Mamdani.  Moody's current underlying rating is Ba2
compared to Baa3 at securitization.

The third loan with an underlying rating is the Suncor Building
Loan ($20.1 million -- 4.9%), which is secured by a 140,000 square
foot industrial property located in Fort McMurray, Alberta.  The
anchor tenant is Suncor Energy Inc. (Moody's senior unsecured debt
rating -- A3, stable outlook), which leases 97% of the premises
through December 2018.  Moody's current underlying rating is Baa3,
the same as at securitization.

The fourth loan with an underlying rating is the Marriott Montreal
Loan ($19.7 million -- 4.8%), which is secured by a 190 room
Residence Inn hotel located in downtown Montreal, Quebec.  Moody's
current underlying rating is Baa2, the same as at securitization.
The fifth loan with an underlying rating is the Harry Rosen
Building ($17.2 million -- 4.2%), which is secured by a 34,000
square foot retail building located in Toronto, Ontario.  The
property is 100% occupied by Harry Rosen Inc. through September
2012.  Moody's current underlying rating is Aa1, the same as at
securitization.  Reported financial information indicates that the
performance of these loans is in line with Moody's original
expectations.

The top three conduit loans represent 15.1% of the pool.  The
largest conduit loan is the Beedie Group -- Langley Loan ($22.1
million -- 5.4%), which is secured by five industrial buildings in
Langley, British Columbia totaling 306,000 square feet.  The
properties were 96% occupied as of March 2008 compared to 100% at
securitization.  Moody's LTV is 89% compared to 81% at
securitization.

The second largest conduit loan is the Park Lane Mall & Terraces
Loan ($20.8 million -- 5.1%), which is secured by a 265,000 square
foot enclosed retail mall and a 99,000 square foot office building
located in Halifax, Nova Scotia.  The property was 86% occupied as
of January 2008, essentially the same as at securitization.
Moody's LTV is 73% compared to 77% at securitization.

The third largest conduit loan is the Opus Hotel Loan
($18.6 million -- 4.6%), which is secured by a 96 room full
service boutique hotel located in Vancouver, British Columbia.
The hotel's performance had been relatively stable through 2007.
However performance in 2008 dropped due to a decline in business
and tourist travel and near by street construction which has
caused problems with access.  The loan is 60 days delinquent and
the borrower has indicated that cash flow problems may impact debt
service payments for the remainder of the year.  Moody's LTV is
106% compared to 84% at securitization.

Moody's monitors transactions both on a monthly basis through a
quantitative tool: MOST(R) (Moody's Surveillance Trends) and a
periodic basis through a full review.  Moody's prior full review
is summarized in a Pre Sale Report dated November 10, 2006.


ROBERT ORR: Files for Bankruptcy to Keep Brooke & Aleritas Afloat
-----------------------------------------------------------------
Robert Orr filed personal bankruptcy after pledging his family
fortune trying to save Brooke Capital Corporation, an insurance
agency franchisor and a public company, and Aleritas Capital
Corp., a finance company specializing in insurance lending and a
public company of which Orr's family indirectly owned
approximately 29%.

Aleritas loaned money to insurance agencies, then packaged the
loans as securities and sold them to Wall Street investors.  To
enhance the credit quality of these securities, Brooke Capital
provided franchising and consulting services to insurance agency
borrowers on behalf of the Wall Street investors.

The refusal of Wall Street investors to pay servicing fees for the
consulting and collateral preservation services provided by Brooke
Capital caused the insurance agency franchisor to collapse from
cash flow shortages and the finance company to collapse from
deterioration of loan quality because the insurance agency
franchisor could no longer afford to provide these critical
services to the finance company's borrowers.

The meltdown of these companies accelerated when a special master,
who was appointed by the court to maintain the status quo until
Brooke Capital's differences with Wall Street investors were
resolved, instead liquidated assets and released insurance agency
franchisees from their agreements.

With Brooke Capital in bankruptcy and Aleritas in liquidation, it
is unlikely Orr will see repayment of approximately $12,000,000
that his family loaned to the companies in recent months.  Another
result of the companies' collapse is that Orr will be required to
repay approximately $25,000,000 of debt that was personally
guaranteed by him as part of Orr's efforts in recent months to
turn around the companies.

"Last year I retired as a company executive, but I came out of
retirement in April of this year to help Aleritas, and later
Brooke Capital, through difficult economic times," Mr. Orr said.
"With the benefit of hindsight, I regret returning as a company
executive because the price paid by my family has been
extraordinary.  I have endured financial ruin and unwarranted
personal attacks," he said

"As an executive taking over management of these troubled
companies just prior to their collapse and as an executive
responsible for making the difficult decisions required to
turnaround these troubled companies, I have become the target of
attack for anyone with a complaint," Mr. Orr continued.

Last year, as a result of merging wholly owned Brooke Capital and
wholly owned Aleritas into existing public companies, most of the
stock of Aleritas and Brooke Capital became directly, or
indirectly, owned by public investors.  "When Aleritas and Brooke
Capital became public companies last year, I believed that I could
slow down after a lifetime of 60-70 hour weeks," Mr. Orr related.
"I believed that my involvement as an executive was not required
because, as an investor in public companies, my investment would
be protected by the management accountability demanded by
independent directors, exchange listing provisions, sophisticated
investors and auditors," Mr. Orr added.

After Aleritas became a public company, Orr did not serve as a
director or officer.  After Brooke Capital became a public
company, Orr remained as a director but relinquished all executive
responsibilities.

Mr. Orr said, "In March of this year it became apparent that I
was naive to rely on public company safeguards to protect my
investment in Aleritas."  Aleritas had become financially troubled
primarily as a result of increased loan losses, a failed
refinancing transaction and rapid expansion in a difficult
economy.  In response to a request from Aleritas' largest
purchaser of loan participations, Orr asked for an emergency
meeting of the Aleritas board on March 31, 2008 to demand the
changes required for a turnaround of the company, including the
appointment of Orr as interim chief executive officer of Aleritas
until the company found a capable replacement with turnaround
experience.

Over the next several weeks, Mr. Orr announced to investors:

   a) a $24 million charge for loan losses and credit impairments,

   b) suspension of the company's growth plans; and

   c) the proposed steps to complete the failed refinancing
      transaction.

During the five months that Mr. Orr and Michael Hess were Aleritas
executives, many unpopular and difficult decisions were
implemented which they believed were required to turn the company
around, including:

   a) working with Brooke Capital to mitigate loan losses
      despite previous tensions between Aleritas and Brooke
      Capital;

   b) negotiating with recalcitrant Wall Street investors for
      payment of servicing fees to assure Brooke Capital's
      continued assistance;

   c) negotiating with lenders to remedy liquidity concerns; and

   d) reducing the amounts of collateral pledge and loan payment
      discrepancies existing on March 31st when Orr and Hess
      became Aleritas executives.

Especially difficult were the decisions made to reduce collateral
pledge and loan payment discrepancies because this involved
decisions regarding payment priorities and collateral quality.

Mr. Orr and Hess first required the completion of conversion to a
new loan accounting process to better track and control collateral
pledges and loan payments.  Although discrepancies were
significantly reduced after March 31st, the resolution of those
discrepancies existing on March 31st sometimes evolved into
different discrepancies as Orr and Hess tried to fairly resolve
these issues.

Brooke Capital has historically provided critical assistance to
franchise agency borrowers as part of a servicing agreement with
Wall Street investors.  During August Brooke Capital experienced
significant cash flow problems because Wall Street investors
refused to pay past due servicing fees owed to Brooke Capital.

Apparently frustrated that they could not collect past due
servicing fees and resolve the company's cash flow problems,
Brooke Capital's chief executive officer, chief operating officer,
senior vice president and general counsel resigned.  Mr. Orr
reluctantly stepped in on August 19th to fill the management void
in Brooke Capital and aggressively pursued collection of past due
servicing fees during the ensuring month that he served as Brooke
Capital's chief executive officer.

Allegations of funds misappropriation leveled against Orr by
WallStreet investors were primarily the result of Brooke Capital
offsetting the past due amounts it was owed from Wall Street
investors by the amounts that Brooke Capital owed to Wall Street
investors.  These offsets were approved by Brooke Capital's legal
counsel and summarized in a court motion.  The dispute between
Wall Street investors and Brooke Capital culminated in the
appointment of a special master on Sept. 17, 2008, and the
resulting collapses of Aleritas and Brooke Capital.

Mr. Orr summarized by saying, "Until the meltdown caused by Wall
Street investors, I was confident that Aleritas and Brooke Capital
were taking the difficult steps required to turn around the
companies.  As a result, my family did not sell any stock -- until
it was seized by the creditors for repayment of a company loan --
and instead purchased approximately $2,000,000 in additional stock
during 2008.  I believed in Aleritas and Brooke Capital."


ROBERT ORR: Case Summary & 18 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Robert Dean Orr
        P.O. Box 267
        Phillipsburg, KS 67661

Bankruptcy Case No.: 08-13242

Chapter 11 Petition Date: December 16, 2008

Court: District of Kansas (Wichita)

Debtor's Counsel: J. Michael Morris, Esq.
                  jmmorris@kmazlaw.com
                  301 N. Main St., Suite 1600
                  Wichita, KS 67202
                  Tel: (316) 267-0331

Estimated Assets: $100,000 to $500,000

Estimated Debts: $50,000,000 to $100,000,000

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
First United Bank              -                 $13,853,044
7626 W. Lincoln Hi-way
Frankfort, IL 60475

ONB Bank and Trust Company     -                 $11,500,000
2424 E. 21st Street
Tulsa, OK 74114

Citizens Bank                  -                 $9,458,869
1210 Washington Street
Chillicothe, MO 64601

United Bank and Trust          -                 $5,071,112

Fifth Third Bank               -                 $2,700,000

Brooke Holdings                -                 $2,578,985

Security State Bank            -                 $2,000,000

NCMIC                          -                 $1,500,000

Enterprise Bank                -                 $700,000

Enterprise Bank                -                 $700,000

Kaw Valley State Bank          -                 $200,000

Wanda Schmidt                  -                 $50,000

Chase Manhattan                -                 $17,168

Chase Manhattan                -                 $12,997

Kimba Orr                      -                 $10,000

Chase Manhattan                -                 $8,070

Citizens Bank                  -                 $8,000

Expedia Credit Card            -                 $5,700

The petition was signed by Robert Dean Orr, the debtor.


ROCKET RESTAURANT: Files for Chapter 11 Protection in Colorado
--------------------------------------------------------------
Denver Business Journal reports that Rocket Restaurant Ventures
LLC filed for Chapter 11 protection before the U.S. Bankruptcy
Court for the District of Colorado on Dec. 15, 2008.

According to Denver Business, Rocket Restaurant listed assets of
less than $100,000.  Rocket Restaurant said in court documents
that it had $1 million to $10 million in liabilities.

Court documents say that Rocket Restaurant's largest creditor is
Monfort Capital LLC of Eaton, which holds a $880,000 claim.
Denver Business states that other creditors include:

     -- Taubman Cherry Creek LP, which owns the Cherry Creek
        Shopping Center;

     -- Rouse Park Meadows, which owns the Park Meadows mall in
        Littleton; and

     -- Robinson Dairy of Denver.

Denver Business relates that David and Jennifer Giesen, an
entrepreneur who built Steak Escape and Johnny Rockets
restaurants, also filed for Chapter 11 protection, listing assets
of $1 million to $10 million and liabilities of $1 million to
$10 million.

Mr. Giesen, says Denver Business, formed a joint venture with
Charlie Monfort, in 2000 to open about 100 Steak Escape
restaurants in Colorado and California over a 10-year period.
Mr. Giesen at that time had six Steak Escapes in metro Denver,
including a location at the Denver International Airport, the
report states.  According to the report, Mr. Giesen opened Johnny
Rockets restaurants in metro Denver, including locations on the
16th Street Mall in downtown Denver and inside the Cherry Creek
Shopping Center.  Published reports say that in 2003, the Giesen
Restaurant Enterprises closed a dozen Steak Escapes nationwide.


SASI FINANCE: Moody's Corrects December 8 Ratings Release
---------------------------------------------------------
Moody's Investors Service said that due to a data input error,
three tranches were incorrectly placed on review on December 8,
2008.  The ratings are confirmed for these tranches with corrected
data.  The revised release states:

Moody's Investors Service has downgraded the ratings of twelve
tranches and confirmed the ratings of three tranches in the SASI
Finance Limited Partnership 2006-A and the RESIX Finance Limited
Credit-Linked Notes, Series 2006-1 transactions.  The certificates
and notes are protected through subordination, including a non-
amortizing unrated tranche.  The synthetic transaction provides
the owner of a sizable pool of jumbo mortgages credit protection
similar to the credit enhancement provided through subordination
in conventional residential mortgage backed securities (RMBS)
transactions.  The reference portfolio includes prime conforming
and nonconforming balance fixed-rate and adjustable-rate mortgages
purchased from various originators.  The portfolio is generally
static as in most RMBS deals.

Through an agreement with the securities issuer, the Protected
Party pays a fee for the transfer of a portion of the portfolio
risk.  Investors in the securities have an interest in the
holdings of the issuer, which include highly rated investment
instruments, a forward delivery agreement and fee collections on
the agreement with the Protected Party.  Investors are exposed to
risk from the reference portfolio but benefit only indirectly from
cash flows from these assets.

The actions are triggered by higher than anticipated rates of
delinquency, foreclosure, and REO in the underlying collateral
relative to currently available credit enhancement levels.  The
actions listed reflect Moody's revised expected losses on the
Jumbo sector announced in a press release on September 18th,
and are part of Moody's on-going review process.

The ratings on the notes are monitored by evaluating factors
determined to be applicable to the credit profile of the notes,
such as i) the nature, sufficiency, and quality of historical
performance information regarding the asset class ii) an analysis
of the collateral being securitized, iii) an analysis of the
transaction's allocation of collateral cashflow and capital
structure, and (iv) a comparison of these attributes against those
of other similar transactions.

Moody's calculates estimated losses for Jumbo RMBS in a two-stage
process.  First, serious delinquencies are projected through late
2009, primarily based upon recent historical performance.  These
projected delinquencies are converted into projected losses using
lifetime roll rates (the probability of transition to default)
averaging 40% for 60-day delinquencies, 75% for delinquencies
greater than 90 days, and 90-100% for foreclosure or REO, and
severity assumptions averaging 35%.

The second step is to determine losses for the remaining life of
the deal, following the projection period.  Depending on a deal's
performance, including delinquency, default, and prepayment rates,
as well as collateral characteristics, such as loan type (fixed or
adjustable), or loan-to-value ratios and geographic concentrations
of remaining current loans, Moody's assumes varying degrees of
slowing in the loss rate (which is measured by loss-to-
liquidation) for the remaining life of the deal.  Typical degrees
of slowing in loss rate after late 2009 range from no slowing at
all to 40% slowing.  To take an example, a deal with very poor
early performance due to relatively high loan-to-value ratios and
dropping regional home values would be expected to see markedly
high delinquency and loss rates for the next year.  But the high
rate of losses may be expected to slow afterwards, as economic
factors and real estate values begin to stabilize, and a slowing
of 20-40% may be used in the projection.  On the other hand, a
deal with stronger early performance that is demonstrating
relative resiliency in the current market environment may not be
expected to have high losses in the near-term, but may be expected
to sustain a similar level of losses for the life of the deal, as
the pool continues to be subject to factors that have more
historically driven prime performance such as borrower life
events, unemployment, and so on.

Loss estimates are subject to variability and, as a result,
realized losses could ultimately turn out higher or lower than
Moody's current expectations.  Moody's will continue to evaluate
performance data as it becomes available and will assess the
pattern of potential future defaults and adjust loss expectations
accordingly if necessary.

The credit-linked notes in the RESIX shelf replicate the cash flow
of synthetic RMBS securities issued:

RESIX Finance Limited Credit-Linked Notes, Series 2006-1
replicates the cash flows of Class B7, Class B8, Class B9 and
Class B10 issued by the SASI Finance Limited Partnership 2006-A,
Sovereign Asset Synthetic Investment Securities, Series 2006-A
transaction

   -- Issuer: RESIX Finance Limited Credit-Linked Notes,
      Series 2006-1

Cl. B7 Notes, Downgraded to B3, previously on 12/8/2008 Baa3
Placed under Review for Possible Downgrade

Cl. B8 Notes, Downgraded to Caa2, previously on 12/8/2008 Ba2
Placed under Review for Possible Downgrade

Cl. B9 Notes, Downgraded to Ca, previously on 12/8/2008 B3 Placed
under Review for Possible Downgrade

Cl. B10 Notes, Downgraded to Ca, previously on 12/8/2008 Caa2
Placed under Review for Possible Downgrade

   -- Issuer: SASI Finance Limited Partnership 2006-A, Sovereign
      Asset Synthetic Investment Securities, Series 2006-A

Cl. A Tranche exposure, Confirmed at Aaa, previously on 12/8/2008
Aaa Placed under Review for Possible Downgrade

Cl. B1 Tranche exposure, Confirmed at Aa1, previously on 12/8/2008
Aa1 Placed under Review for Possible Downgrade

Cl. B2 Tranche exposure, Confirmed at Aa1, previously on 12/8/2008
Aa1 Placed under Review for Possible Downgrade

Cl. B3 Notes, Downgraded to A1, previously on 12/8/2008 Aa3 Placed
under Review for Possible Downgrade

Cl. B4 Notes, Downgraded to A2, previously on 12/8/2008 Aa3 Placed
under Review for Possible Downgrade

Cl. B5 Notes, Downgraded to Baa1, previously on 12/8/2008 A2
Placed under Review for Possible Downgrade

Cl. B6 Notes, Downgraded to Ba1, previously on 12/8/2008 A3 Placed
under Review for Possible Downgrade

Cl. B7 Notes, Downgraded to B3, previously on 12/8/2008 Baa3
Placed under Review for Possible Downgrade

Cl. B8 Notes, Downgraded to Caa2, previously on 12/8/2008 Ba2
Placed under Review for Possible Downgrade

Cl. B9 Certificate, Downgraded to Ca, previously on 12/8/2008 B3
Placed under Review for Possible Downgrade

Cl. B10 Certificate, Downgraded to Ca, previously on 12/8/2008
Caa2 Placed under Review for Possible Downgrade


SEMGROUP LP: Catsimatidis to Meet Senior Mgt. Monday
----------------------------------------------------
John A. Catsimatidis, chairman of the Red Apple Group of New York,
is planning to meet with the senior management of SemGroup, L. P.,
in Tulsa next Monday to begin the process of formulating a plan of
reorganization for the company.

"I am very pleased with the spirit of cooperation demonstrated by
everyone I have met so far," Mr. Catsimatidis said.  "We have been
reaching out to obtain input from SemGroup's management team and
certain of its creditors."

"Although I have not yet had any discussions with Bank of America,
in its capacity as Administrative Agent for the Senior Secured
Lenders, it has been stated to me that the bank will consider with
its lender group any proposal that I make," Mr. Catsimatidis said.

Mr. Catsimatidis said on Dec. 15, 2008, that he had obtained five
of the nine seats on SemGroup G. P., L. L. C.'s Management
Committee, the equivalent of SemGroup L. P.'s board of directors.

Next week in Tulsa, Mr. Catsimatidis will seek the input of
management and the company's restructuring professionals as a part
of the process of putting together a reorganization plan on behalf
of the company. "Our team intends to work hard on a proposal to
take to SemGroup's Management Committee," Mr. Catsimatidis said.
"We are working toward creating a consensual plan acceptable to
all parties to the proceeding.  We intend to have a preliminary
plan ready for consideration in January, 2009."

                       About SemGroup

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.


SEMGROUP LP: Court Extends Plan Filing Deadline to March 19
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted the
request of SemGroup L.P. and its debtor-affiliates for an
extension of their exclusive right to file a plan of
reorganization and solicit acceptances of that plan.

Specifically, the Court extended (i) the Plan Filing Period until
March 19, 2009, and (ii) the Solicitation Period until May 19,
2009.  The Debtors originally sought for an extension of the Plan
Filing Period to February 19, 2009, and the Solicitation Period
to April 20, 2009.

The Official Committee of Unsecured Creditors, before the Court
entered into the order, said it does not oppose the Debtors'
request for an extension of exclusivity.  The Debtors' decision,
according to the Committee, is based, at least in part, on their
positive statements in the Motion, namely that despite the size
and complexity, the Debtors believe that they are now well-
situated to move forward in the process of developing a
consensual chapter 11 plan after making a material progress in
their Chapter 11 cases.

However, the Committee pointed out that in the event the Debtors
seek an additional extension of exclusivity, the Court should
require the Debtors to make an affirmative showing of clear
progress made toward a plan of reorganization.  The Committee
said the Debtors have not held any substantive plan discussions
with the key constituencies in their bankruptcy cases.  The
Committee hopes and expects that between December 2008 and
March 19, 2008, the Debtors will focus their efforts on making
significant progress toward restructuring their businesses and
emerging from Chapter 11.

Katherine Good, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, in a certificate, stated that no other
response or objection other than the Committee's response was
received.

The Court ruled that all objections to the Motion are resolved,
withdrawn, or otherwise overruled by the Court.

                       About SemGroup

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


SEMGROUP LP: Ex-CEO of Energy Unit & Other Parties Oppose Probe
---------------------------------------------------------------
Sharon Pens, former executive assistant to the president and
chief executive officer of non-debtor SemGroup Energy Partners,
LP, objects to the Semgroup, L.P.'s discovery requests and relates
that she has been completely denied access to the Partnership's
information since she was required to immediately vacate her
Tulsa, Oklahoma office in July 2008.

Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, the Debtors have sought permission from the U.S.
Bankruptcy Court for the District of Delaware to require Kevin
Foxx, former Chief Operating Officer of SemGroup, L.P., Sharon
Pens, former assistant to Thomas L. Kivisto, and Gregory P. Price,
Mr. Kivisto's accounting assistant, to produce certain documents
and to appear for examination.

The Court has already authorized Louis J. Freeh, Esq., the Chapter
11 Examiner, to conduct examinations of the Debtors' current and
former officers, directors and employees, as well as their
auditors, corporate counsel, lenders, investors, and other
counterparties to certain financial transactions, in connection
with his investigation in the prepetition trading practices of
SemGroup, L.P. and its affiliates.  Mr. Freeh has confirmed that
he has served subpoenas to Thomas L. Kivisto, Sharon Pens, and
Gregory Wallace.

Ms. Pens tells the Court that since that time she has been unable
to review or copy a single document, file or record concerning
matters related to the Debtors, or to matters related to any
other business entity for which she was employed or maintained
records.  Ms. Pen also complains that the Debtors' requested
discovery ignores the significant implications of unfocused
inquiries into matters that are, or may be, the subject of her
counsel's work product, and privileged communications between her
and her attorney.

SemGroup Energy, in response, asks the Court to allow it to
participate in the oral examination of its president and chief
executive officer, Kevin Foxx, and limit his examination at one
day.

Bank of America, N.A., agent for the prepetition and postpetition
lenders, asserts that the Debtors' Rule 2004 Motion should be
held in abeyance until the conclusion of the Chapter 11
Examiner's investigation.  The Debtors, BofA insists, should be
prohibited from duplicating any of the Examiner's efforts.

Fortis Bank, SA/NV, and Fortis Capital Corp., requests that any
relief granted by the Court be expanded to include authorization
for Fortis to (i) attend the oral examination of each of the
Respondents under Rule 2004 of the Federal Rules of Bankruptcy
Procedures, and (ii) receive copies of any documents produced by
the Respondents to the Debtors in connection with the Rule 2004
Motion as and when those documents are produced by the
Respondents.  PricewaterhouseCoopers LLP, joins in Fortis'
request.

                 Debtors Address Objections

The Debtors tell the Court that they do not object to the
Partnership's attendance in Mr. Foxx's examination.  However, the
Debtors argue that it is inappropriate to limit Mr. Foxx's
examination at this early stage in the litigation.

In response to Ms. Pen's objection, the Debtors insist that their
Rule 2004 discovery requests on Ms. Pen are all related to the
effective administration of the Debtors' estates and do not
exceed the broad scope of discovery permitted pursuant to Rule
2004.  The Debtors insist that the Court should grant their Rule
2004 Motion because they have established the necessity of
deposing Ms. Pens and obtaining documents within her possession.

The Official Committee of Unsecured Creditors tells the Court
that it supports the Debtors' Rule 2004 Motion for the simple,
yet critical, reason that granting the motions will expedite the
Chapter 11 Examiner's investigation of the Respondents.

The Committee says it has come together with the Debtors and the
Chapter 11 Examiner and reached an agreement themed in
cooperation and coordination with respect to the significant
"discovery exercise" that is the Examiner's investigation.

                       About SemGroup

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


SEMGROUP LP: Examiner Seeks to Retain Morrison as Counsel
---------------------------------------------------------
Louis J. Freeh, the appointed examiner for the Chapter 11 cases of
SemGroup L.P., sought and obtained permission from the U.S.
Bankruptcy Court for the District of Delaware to retain Morrison &
Foerster LLP, as his counsel, effective as of October 19, 2008

The Examiner told the Court that Morrison is an internationally
recognized law firm, having extensive experience and expertise in
the field of debtors' and creditors' rights, business
reorganizations and liquidations under Chapter 11 of the
Bankruptcy Code.  The Examiner retained Morrison to perform
services in connection with his investigation of the Debtors'
trading activities, pursuant to the Examiner's fiduciary duties
and responsibilities under the Bankruptcy Code.

As counsel, Morrison will:

  (a) take all necessary action to assist and advise the
      Examiner in discharging his duties and responsibilities
      under the Examiner Order and the Bankruptcy Code;

  (b) prepare motions, applications, notices, answers, orders,
      and documents on the Examiner's behalf;

  (c) appear in Court to represent the Examiner's interests;

  (d) analyze and advise the Examiner regarding any legal
      issues that arise in connection with the Examiner's
      investigation;

  (e) liaise with the United States Trustee, the Debtors'
      counsel, the Committee, the administrative agent for the
      Debtors' lenders, counsel for witnesses regarding the
      Investigation, and other parties-in-interest;

  (f) assist in preparing the Examiner's report;

  (g) perform all other necessary legal services on the
      Examiner's behalf; and

  (h) assist the Examiner in undertaking additional tasks that
      the Court may direct.

The Debtors will pay Morrison according to the hourly rates for
its professionals, including these principal professionals:

    Professional                     Hourly Rate
    ------------                     -----------
    Brett H. Miller, Esq.                $750
    Adam S. Hoffinger, Esq.              $725
    Melissa A. Hager, Esq.               $595
    Bruce J. Barnard, Esq.               $550
    Erica J. Richards, Esq.              $395
    Laura Guido, Paralegal               $210

The Debtors will also reimburse Morrison for any necessary out-
of-pocket expenses.

Brett H. Miller, Esq., partner at Morrison, assured the Court
that to the best of his knowledge, neither his firm nor any of
its employees has any adverse interests with the Debtors, their
creditors, or any other party in interest.  Morrison is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code, he maintained.

No party objected to the employment application, the Examiner
certifies.

                       About SemGroup

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


SEMGROUP LP: Holdings' Schedules Of Assets And Liabilities
----------------------------------------------------------
A.   Real Property                                            $0

B.   Personal Property
B.1  Cash on hand                                              0
B.2  Bank accounts
      Arvest Bank PO Box 3007                        17,456,524
      Bank of Oklahoma PO Box 2300                            0
      Bank of Oklahoma PO Box 2300                    8,625,748
      Bank of Oklahoma PO Box 2300                        4,766
B.14 Interests in partnerships & joint venture      Undetermined
B.18 Other liquidated debts owing Debtor
      SemGroup, L.P.                                150,000,000
      SemCrude Pipeline, L.L.C.                      50,000,000
      SemMaterials, L.P.                              4,000,000

      TOTAL SCHEDULED ASSETS                       $230,087,038
      =========================================================

C.   Property Claimed as Exempt                               $0

D.   Creditors Holding Secured Claims
      Manchester Securities and Alerian Finance     155,950,000

E.   Creditors Holding Unsecured Priority Claims               0

F.   Creditors Holding Unsecured Non-priority Claims
      SemCrude, L.P.                                 50,000,000
      SemGroup, L.P.                                 14,741,624

G.   Executory Contracts and Unexpired Leases                  0

      TOTAL SCHEDULED LIABILITIES                  $220,691,624
      =========================================================

SemGroup Holdings, L.P., discloses that for the two-year period
immediately preceding the Petition Date, it did not earn income
other than from employment or from the operation of its business.
However, it earned income other than from employment or business
operations:

Year                                    Amount
----                                    ------
2006 Other Income                           $0
2007 Other Income                      340,926
9/30/2008 YTD Other Income             401,902

The Debtor made payments totaling $19,220, to creditors,
excluding brokers, within the period from July 24, 2008, through
October 21, 2008.  It also paid $6,039 for costs related to debt
counseling or bankruptcy, for the period from October 22, 2007 to
October 21, 2008.

In addition, SemGroup Holdings transferred $150,000,000 to
SemGroup, L.P., on June 25, 2008, on account of a loan, via
Manchester Securities Corporation and Alerian Finance Partners,
LP.

                       About SemGroup

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


SEMGROUP LP: Energy Unit's Forbearance Agreement Expires Today
--------------------------------------------------------------
SemGroup Energy Partner, L.P., on December 11, 2008, obtained an
extension of the forbearance agreement under its Amended and
Restated Credit Agreement, dated February 20, 2008, with Wachovia
Bank, National Association, as Administrative Agent, Letter of
Credit Issuer and Swing Line Lender, Bank of America, N.A., as
Syndication Agent and the other lenders.

The Lenders agreed to extend the Forbearance Period until
December 18, 2008.

The Partnership, according to its filings with the Securities and
Exchange Commission, is in productive dialogue with the lenders
regarding entering into a new forbearance agreement on or prior
to December 18, 2008, but no assurance can be given as to the
outcome of those discussions.

The Tulsa World said if the Partnership cannot extend the
forbearance any further, the company might file for bankruptcy,
following its parent.  Some observers, however, pointed out that
the Partnership survived two months in default without the
initial forbearance deal, so the immediate lack of a new one may
not push it to bankruptcy, the Tulsa World related.

The Partnership defaulted on the $150,000,000 Credit Agreement
after its Parent filed for bankruptcy in July 2008.

                       About SemGroup

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


SMITHFIELD FOODS: S&P Cuts Corporate Credit Rating to 'B'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Smithfield Foods Inc. to 'B' from 'BB-'.  "At the same
time, we removed the ratings from CreditWatch with negative
implications where they were originally placed on Dec. 3, 2007,
for weak operating performance in its hog production segment. The
outlook is negative," S&P said.

Smithfield, Va.-based Smithfield Foods had about $3.8 billion of
debt (including capitalized operating leases and pension and
postretirement obligations) as of Oct. 26, 2008.

According to S&P: "The downgrade reflects weak credit metrics for
the rating and our expectation that credit measures will not
rebound to more appropriate levels in the near term.  When we
downgraded the company to 'BB-' on June 27, 2008, we indicated
that we would likely affirm the ratings upon the completion of the
divestiture of the company's beef segment to JBS S.A.
(B+/Negative/--).  The company did receive $580 million of
proceeds from the sale of Smithfield Beef in October 2008, which
was applied to debt reduction under the company's revolving credit
facility.  However, due to the decline in operating performance in
the company's hog production segment, EBITDA margins and credit
measures are weaker than we had previously expected.  In our view,
Smithfield Foods continues to face a very challenging operating
environment in its hog production operations through the remainder
of fiscal 2009 due to soft hog prices.  Although feed costs have
come down considerably over the last several months, those lower
costs will take time to be realized in the company's operating
results.  We estimate that the company's cost for raising hogs is
still well above selling prices.  Furthermore, if pork producers
in the industry do not continue to reduce livestock numbers
(currently, the incentive -- high corn prices -- is no longer
there), then selling prices will not strengthen in calendar 2009
(the company's fiscal 2010).  This could curtail the turnaround
Smithfield Foods anticipates for fiscal 2010."


SOLUTIA INC: Supports $14BB Bailout for U.S. Automakers
-------------------------------------------------------
"Solutia [Inc.] is in favor of federal relief for the U.S.
automakers," GlssBytes.com quoted Paul J. Berra, vice president
of government affairs and communications for Solutia, which
indirectly relies on U.S.-based original equipment manufacturers
for a small percent of its total revenue.

"The U.S. OEMs employ hundreds of thousands of people, and
permeate the broader U.S. economy through their supplier and
dealer networks," Mr. Berra further stated.  "During more normal
economic conditions, the U.S. bankruptcy process provides the
means for successful restructuring without the use of national
policy -- as evidenced by Solutia's own recent emergence from
Chapter 11 reorganization.  Unfortunately, during today's
uncertain economic times, the bankruptcy of large companies such
as the U.S. OEMs would further accentuate our country's economic
decline.  Therefore, we believe the use of national policy is
warranted."

"We're a fan of the bailout. . . We believe that [General Motors
Company] is much bigger than the company itself.  It is a network
of suppliers of which we are one," Republican Newsroom quoted Jay
B. Nesbitt, manager of Solutia Inc.'s facility in Indian Orchard,
Massachusetts.

In the past month, GM and Chrysler LLC engaged in talks with the
U.S. Government for a $14,000,000,000 rescue plan.  On Dec. 11,
2008, the U.S. Senate rejected the bill in a 52-35 procedural
vote.

Both GM and Chrysler have both indicated that they could run out
of cash "within weeks" if the rescue bill is not passed, the
Republican Newsroom reported.  Ford said it has enough cash
through 2009.

On Dec. 18, 2008, the Wall Street Journal reports that Chrysler
will idle manufacturing operations at the end of December 19 for
at least a month "to align production and inventory with U.S.
market demand."  GM halts production at a factory making engines
for the Chevrolet Volt electric car to conserve cash, Bloomberg
News says.

Car-product manufacturers in Springfield, Massachusetts, are
slowing their production as they "wait for the industry to
reorganize and recover," Republican Newsroom noted.

Market Intelligence Center noted that Solutia's stock "has been
showing support around $4.65 and resistance in the $5.83 range."
The company's stock has ranged from a low of $4.09 to a high of
$18.00 for the past 52 weeks, according to MIC.

                  Shareholders to Meet April 22

Meanwhile, Solutia (NYSE: SOA) announced that its Board of
Directors has set Wednesday, April 22, 2009, as the date for its
annual meeting of shareholders.  The meeting will take place at
the company's headquarters in Town and Country, Mo.  The record
date for the annual meeting is February 24, 2009.

                        About Solutia Inc.

Based in St. Louis, Missouri, Solutia Inc. (NYSE: SOA) --
http://www.solutia.com/-- and its subsidiaries, manufactures and
sells chemical-based materials, which are used in consumer and
industrial applications worldwide.

The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.

Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel.  Trumbull Group LLC is the
Debtor's claims and noticing agent.  Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice.  The Official Committee of Retirees of Solutia, Inc., et
al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.

On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement.  On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan.  The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007.  On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan.  Solutia emerged from chapter 11 protection Feb. 28, 2008.

Solutia's $2.05 billion exit financing facility was funded by
Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P.,
and Deutsche Bank Securities Inc.  The exit financing is being
used to pay certain creditors, and for ongoing operations.

(Solutia Bankruptcy News, Issue No. 136; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                           *     *     *

Standard & Poor's Ratings Services said its ratings on Solutia
Inc. (B+/Stable/--) will not change as a result of the company's
recent announcement of a public offering of common shares.


SOLUTIA INC: Court OKs Trumbull Termination, Allows DuPont Claim
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved Solutia, Inc., and its affiliates' request to terminate
Trumbull Group, LLC, as their claims and noticing agent, effective
January 3, 2009.

The Bankruptcy Clerk will serve as the noticing agent to mail and
notices to the estates' creditors and parties-in-interest.  In the
event Trumbull receives any claims or other documents pertaining
to the Reorganized Debtors' Chapter 11 cases, the firm will
transfer those claims or documents to the Federal Archives
as soon as practicable.

The Bankruptcy Court has also approved the stipulation between the
Reorganized Debtors and E.I. DuPont de Nemours and Company, which
provides, among other things, that DuPont is granted an allowed
administrative claim for $600,000.

                        About Solutia Inc.

Based in St. Louis, Missouri, Solutia Inc. (NYSE: SOA) --
http://www.solutia.com/-- and its subsidiaries, manufactures and
sells chemical-based materials, which are used in consumer and
industrial applications worldwide.

The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.

Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel.  Trumbull Group LLC is the
Debtor's claims and noticing agent.  Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice.  The Official Committee of Retirees of Solutia, Inc., et
al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.

On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement.  On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan.  The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007.  On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan.  Solutia emerged from chapter 11 protection Feb. 28, 2008.

Solutia's $2.05 billion exit financing facility was funded by
Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P.,
and Deutsche Bank Securities Inc.  The exit financing is being
used to pay certain creditors, and for ongoing operations.

(Solutia Bankruptcy News, Issue No. 136; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                           *     *     *

Standard & Poor's Ratings Services said its ratings on Solutia
Inc. (B+/Stable/--) will not change as a result of the company's
recent announcement of a public offering of common shares.


SOLUTIA INC: Accounts for $440MM of $2.9BB PIPE Deals in 2008
-------------------------------------------------------------
Many companies, amid the present economic condition, have turned
to private investment in public equity -- PIPE -- transactions to
raise capital, Marie Leone of CFO.com reported.

There have been 78 registered direct deals aggregating
$2,900,000,000 in gross proceeds, representing roughly 8% of the
969 PIPE transactions completed in 2008 for an aggregate
$108,000,000,000, Ms. Leone, citing a report by Sagient Research,
which runs the PlacementTracker database, pointed out.
Registered direct deals grossed $3,700,000,000 in 2007 and
$3,000,000,000 in 2006, she added.

"Registered direct deals," a subset of the PIPE, are PIPEs that
involve shares already registered with the U.S. Securities and
Exchange Commission.  Completing the regulatory paperwork early
through a shelf registration gives companies two to three years
to issue the shares, thereby allowing them to move quickly when
the market conditions are right, CFO.com quoted Stuart Bressman,
an attorney at Proskauer Rose, who works on PIPEs, as saying.

For registered deals, the company's board of directors must
approve the issue, in the same way they would approve any
secondary offering.  But a registered direct offering is
presented only to a tiny group of hand-picked investors and
brokered bilaterally by an investment bank acting as a placement
agent, rather than an underwriter.

In August 2008, Solutia Inc. (NYSE:SOA) launched an underwritten
public offering of 22,307,692 shares of its common stock at a
price of $13 per share for gross proceeds of approximately
$290,000,000.  All of the approximately $277,000,000 of net
proceeds from the offering will be used to partially repay
Solutia's $400,000,000 15.50% bridge credit facility, with an
initial maturity date of Feb. 28, 2009.

In September 2008, Solutia also sold at $14 per share an
underwritten public offering of 10,714,284 shares of its common
stock, with expected gross proceeds of $150,000,000.

CFO.com said, so far, the largest registered direct transactions
of 2008:

                Closing     Gross      Share   Shares   Closing
Company           Date     Proceeds    Price   Issued   Discount
-------          -------   --------    -----   ------   --------
St. Joe Company   03/03  $600,000,000 $35.00 17,100,000   8.97%

Solutia Inc.      11/08   290,000,000  13.00 22,300,000  15.80%
Solutia Inc.      08/21   150,000,000  14.00 11,000,000   8.68%

Regent Energy     07/25   200,000,000  22.18  9,000,000   7.58%
  Partners

H&R Block         10/22   145,000,000  17.50  8,300,000   2.62%

Crosstex Energy   04/09   100,000,000  30.00  3,300,000   8.28%

Omega Healthcare  05/01   100,000,000  16.93  6,000,000   3.26%
  Investors

Vivus Inc.        08/06    65,000,000   7.77  8,400,000  16.00%

Kinder Morgan     02/12    60,000,000  55.65  1,000,000   3.37%
  Energy Partners

Orient-Express    11/14    55,000,000   6.50  8,500,000  21.97%
  Hotels

PIPE transactions "seem to be a silent, safe haven for issuers
unsure whether an offering will attract investors," Ms. Leone
stated.

                        About Solutia Inc.

Based in St. Louis, Missouri, Solutia Inc. (NYSE: SOA) --
http://www.solutia.com/-- and its subsidiaries, manufactures and
sells chemical-based materials, which are used in consumer and
industrial applications worldwide.

The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.

Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel.  Trumbull Group LLC is the
Debtor's claims and noticing agent.  Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice.  The Official Committee of Retirees of Solutia, Inc., et
al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.

On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement.  On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan.  The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007.  On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan.  Solutia emerged from chapter 11 protection Feb. 28, 2008.

Solutia's $2.05 billion exit financing facility was funded by
Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P.,
and Deutsche Bank Securities Inc.  The exit financing is being
used to pay certain creditors, and for ongoing operations.

(Solutia Bankruptcy News, Issue No. 136; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                           *     *     *

Standard & Poor's Ratings Services said its ratings on Solutia
Inc. (B+/Stable/--) will not change as a result of the company's
recent announcement of a public offering of common shares.


SPECTRUM BRANDS: Fitch Affirms & Withdraws Ratings
--------------------------------------------------
Fitch Ratings has affirmed and simultaneously withdrawn its
ratings on Spectrum Brands, Inc. (Spectrum):

   -- Issuer default rating (IDR) of 'CCC';
   -- Senior Term Loan Facility rated 'B/RR1';
   -- Revolving Credit Facility rated 'B/RR1';
   -- Senior Subordinated Notes rated 'CCC-/RR5'.

The Rating Outlook is Negative.

Fitch will no longer provide ratings or analytical coverage of
Spectrum.


STATION CASINOS: Gaming Industry to Remain Under Pressure in 2009
-----------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


STILLWATER MINING: Moody's Junks CFR; Outlook Remains Positive
--------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
of Stillwater Mining Company to Caa1 from B3.  The outlook remains
negative.

The downgrade primarily reflects the company's ongoing challenges
given SWC's high cost structure and the current price environment.
SWC has significant exposure to Ford Motor Company (Caa1 -
Negative) and General Motors Corporation (Ca - Negative), which
are currently experiencing operating difficulties.  Somewhat
mitigating the latter concern is SWC's significant unrestricted
balance sheet cash ($106 million at 09/30/08), lack of near-term
maturities, and limited interest payments given the 1.875% coupon
on its existing $181.5 million senior unsecured convertible notes,
due 2028 (not rated by Moody's).

The downgrade to Caa1 considers that the company, in Moody's
opinion, has entered a capital preservation mode as evidenced by
SWC's announced decision to reduce its capital spending and
restructure its current operations, without which, it would have
burned in excess of approximately $25 million per quarter. Given
the current operational plan, Moody's believes SWC will be
challenged to sustain the business over the intermediate term. The
rating also reflects deteriorating conditions in the domestic
automotive industry and the potential resulting impact on SWC's
credit fundamentals and liquidity position.  The company derives a
substantial cash benefit from the existing contracts.  Without
these, Moody's believes that SWC's operations would be more
uneconomical.

The negative outlook reflects that, despite the restructuring
plan, Moody's believes that SWC could continue to burn cash which
could deplete the currently large cash balance.  The ratings could
be downgraded if Moody's expected unrestricted cash to fall below
$50 million.

Ratings affected by the actions include:

   * Corporate Family Rating lowered to Caa1 from B3

   * Probability of default rating lowered to Caa1 from B3

   * $30 million 8% State of Montana Revenue Bonds due 2020
     affirmed at Caa1 with LGD point estimate changed to LGD 4,
     54% from LGD 4, 64%

   * Outlook Remains Negative

The last rating action was on October 8, 2008, when the ratings of
Stillwater Mining Company were downgraded to B3 from B2 and a
negative outlook was assigned.

Stillwater Mining Company is headquartered in Columbus, Montana.
The company is the only US producer of palladium and platinum and
the only significant producer of platinum group metals outside of
South Africa and Russia.  Revenues for the twelve month period
ending September 30, 2008 were approximately $789 million.


STONERIDGE INC: Moody's Puts Low-B Ratings on Review for Downgrade
------------------------------------------------------------------
Moody's Investors Service placed Warren, Ohio based Stoneridge,
Inc.'s long term ratings, including its B1 Corporate Family Rating
and B2 rating of its $200 million senior unsecured notes
($183 million currently outstanding after repayment), under review
for possible downgrade.  Concurrently, its Speculative Grade
Liquidity rating of SGL-2 was affirmed.

The review for possible downgrade reflects Stoneridge's eroding
operating performance in part due to the rapid deterioration in
the North American production levels especially at the Detroit-3
automobile manufacturers.  Moody's expects these negative factors,
combined with expected lower production level at the commercial
vehicle and heavy truck market (which accounts for approximately
50% of the company's total revenues) and lower production volumes
in international markets (approximately 25% of total revenues)
would likely persist into 2009 and could result in significant
deterioration of Stoneridge's credit metrics going forward.
Despite the substantial downward pressure, Moody's expects the
company would likely maintain a sound liquidity position during
the next twelve months, principally underpinned by its sizeable
cash position, and relatively light near-term debt maturity.

While recognizing its diversification in end markets and
geographic footprints, Stoneridge still has significant exposure
to the auto industry with approximately 40% of its total revenues
generated from products being supplied OEM's and Tier-1 auto
suppliers.  Volume reduction has resulted in weakening trends in
performance through the year as management recently reduced its
2008 earnings guidance substantially and, for the most recent
quarter, the company reported a net loss after many consecutive
quarters of net profits.  Although Stoneridge has so far been on
track in its restructuring effort to reduce operating costs and
improve efficiency, the benefits anticipated from these
initiatives might not be sufficient to offset the expected further
production cuts at automotive OEM's and slow-down in commercial
vehicle segment.

Moody's review will assess the expected deterioration in
Stoneridge's credit metrics over the near term resulting from
North American and European production pressures, and the eroded
financial condition of the North American operations of the
Detroit-3.  Moody's will also consider the fact that while
Stoneridge has successfully implemented restructuring programs in
the past, whether its potential further restructuring initiatives
would be enough to help it sustain its current credit metrics in
the next 12-18 months.

Moody's cautions that Stoneridge has significant operating
exposure (20% of its total revenues) to the Detroit-3 auto makers,
and potential financial restructurings or bankruptcy filings by
one or more of those companies could create further operating
disruptions for the company.  Moody's expects the next few
quarters would be very challenging for auto suppliers in North
America in particular those with material exposure to Detroit-3
such as Stoneridge, as the pace of the deterioration could
accelerate as OEM's are reducing their production levels
substantially from the same level last year at least though the
end of first quarter 2009 (in GM's case, by more than 50%).

The affirmation of SGL-2 anticipates Stoneridge's liquidity
profile is likely to remain good in the next twelve months.
Though its future cash flow generation is expected to weaken as a
result of the challenging operating environment, its liquidity
gains support from its sizeable cash balance standing at
$90 million at the end of third quarter 2008, no significant near-
term debt maturity, and expected access to its external credit
facility with sufficient borrowing base in the coming year.
However, the SGL-2 could be under pressure if the free cash flow
generation became negative on a sustained basis and resulted in
fast erosion in cash balances and/or substantial permanent
borrowing under the revolver.

The rating actions are:

Ratings placed under for possible downgrade:

   * Corporate Family Rating -- B1

   * Probability of Default Rating -- B1

   * $200 million ($183 million outstanding) senior unsecured
     notes due 2012 - B2

Rating affirmed:

   * Speculative Liquidity Rating -- SGL-2

Moody's last rating action on Stoneridge was on July 17, 2008 when
a first time SGL rating was assigned at SGL-2 with no change at
long term ratings and outlook.

Headquartered in Warren, Ohio, Stoneridge is a designer and
manufacturer of highly engineered electrical and electronic
components, modules and systems for automotive, medium and heavy-
duty truck, agricultural and off-highway vehicle markets.  For the
twelve months ended September 30, 2008, the company reported
revenues of $780 million.


SUNSTATE EQUIPMENT: S&P Affirms 'B+' Rating; Outlook Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Sunstate
Equipment Co. LLC to negative from stable.  "We also affirmed all
ratings on the Phoenix-based company, including the 'B+' corporate
credit rating," S&P said.

"This action reflects our expectation of weaker conditions in
nonresidential equipment markets," said Standard & Poor's credit
analyst John R. Sico.  "If Sunstate does not reduce capital
spending to generate positive free cash flow, we could lower the
rating in the next 12 months."


TENET HEALTHCARE: Board OKs Amendments and Restatement of Bylaws
----------------------------------------------------------------
The board of directors of Tenet Healthcare Corporation, upon
recommendation of the Nominating and Corporate Governance
Committee of the board, approved amendments to and a restatement
of the company's Restated Bylaws.  The Restated Bylaws amend the
prior bylaws of the company in these principal respects:

   a) The Restated Bylaws amend and restate Section 2.10, which
      applies to shareholders seeking to propose business or
      nominate directors at a shareholders' meeting, to:

      -- Consolidate the advance notice requirements contained in
         Sections 2.10 and 3.4 into Section 2.10.

      -- Provide that the only business conducted at a special
         meeting will be business brought before the meeting by
         the company in its notice of meeting.

      -- Explicitly provide that Section 2.10 applies to all
         shareholder proposals of business or nominations and is
         the exclusive means for a shareholder to submit such
         business or nominations, other than proposals properly
         brought under Rule 14a-8 of the federal proxy rules.

      -- Expand the required disclosure regarding any shareholder
         making such proposals or nominations and regarding a
         person proposed to be nominated for election as a
         director to include, among other things, all ownership
         interests, hedges, economic incentives, and rights to
         vote any shares of any security of the company.  In
         addition, the advance notice must disclose any material
         agreements between such shareholder and any other persons
         relating to such proposal or nomination and any material
         interest of such shareholder in such proposal or
         nomination.  Also, certain information provided in the
         required notice must be updated so that such information
         is provided (1) as of the date of the notice, (2) no
         later than five business days after the record date, (3)
         within two business days of any change in such
         information and (4) as of the close of business on the
         day preceding the meeting date.

      -- Require a person proposed by a shareholder to be
         nominated for election as a director to (1) deliver a
         completed questionnaire regarding such person's
         background and qualifications, (2) disclose any
         compensatory or other material agreements among the
         nominating shareholder, its affiliates and associates and
         the proposed nominee and (3) represent that he or she has
         no voting agreements and no undisclosed compensation
         arrangements and will comply upon election with the
         company's publicly disclosed governance, conflict of
         interest, confidentiality and stock trading policies.

      -- Allow a shareholder's notice to be considered timely if,
         in the event the number of directors to be elected to the
         board is increased and there is no public announcement of
         the action at least 100 days prior to the first
         anniversary of the preceding year's annual meeting, the
         notice is delivered by the close of business on the 10th
         day after the announcement.

      -- Require inclusion, if the advance notice relates to any
         business other than the nomination of persons for
         election as directors, of the text of any resolutions
         proposed to be adopted, the language of any proposed
         amendments to the Restated Bylaws, and a description of
         all agreements between the shareholder bringing the
         proposal and any other person.

      -- Require that the shareholder making proposals for
         business or nominations be a shareholder of record of the
         Company's stock at the time of giving of notice and at
         the time of the meeting.

   b) The Restated Bylaws amend and restate Article X, which
      applies to indemnification of directors and officers, to:

      -- Provide for mandatory indemnification, to the fullest
         extent permitted by law, of any present or former
         director or officer of the company or any of its
         affiliates or subsidiaries who has served as such a
         director or officer on or after the effective date of the
         Restated Bylaws, for all expenses, liabilities, losses or
         other specified amounts, resulting from a legal
         proceeding arising from any occurrence that takes place
         after the adoption of the Restated Bylaws and that
         relates to the fact that such Indemnitee is or was a
         director or officer of the company or any of its
         affiliates or subsidiaries, or at the request of the
         company, served in one of several specified capacities
         with respect to another entity.

      -- Provide that the company is not required to indemnify an
         Indemnitee in connection with any legal proceeding
         initiated by the Indemnitee except under certain
         specified circumstances.

      -- Require the advancement of expenses to an Indemnitee upon
         receipt of an undertaking by the Indemnitee to repay if
         it is ultimately determined that the Indemnitee is not
         entitled to be indemnified by the company.

      -- Provide that (1) when making a determination of whether
         an Indemnitee is entitled to indemnification under the
         Restated Bylaws, there is a presumption that the
         Indemnitee is entitled to indemnification and the company
         has the burden of proof to overcome that presumption and
         (2) that, in an Indemnitee's lawsuit to enforce its right
         to indemnification under the Restated Bylaws, the company
         must prove with clear and convincing evidence that the
         Indemnitee is not entitled to indemnification.

      -- Require the company to indemnify an Indemnitee for
         expenses that are incurred by an Indemnitee in a lawsuit
         to enforce the Indeminitee's indemnification rights under
         the Restated Bylaws.

      -- Provide that rights to indemnification under the Restated
         Bylaws are non-exclusive, have certain survival rights
         and are deemed to be contractual rights.

      -- Provide that the company has the power to purchase
         insurance or make other financial arrangements on behalf
         of an Indemnitee for any liability and any related
         expenses, except that no such financial arrangement may
         provide protection for a person adjudged by a court of
         competent jurisdiction to be liable for intentional
         misconduct, fraud or a knowing violation of law, except
         with respect to indemnification or advancement of
         expenses ordered by a court.

The amendments to the advance notice requirements are intended to
clarify the intent of the provisions in light of developments in
corporate law and to enhance the board's ability to analyze
shareholder proposals.  The amendments to the indemnification
provisions are intended to enhance the company's ability to
recruit and retain directors and officers.  The prior bylaws
provided that indemnification of directors and officers was
permissive.

A full-text copy of the Restated Bylaws is available for free at
http://ResearchArchives.com/t/s?3658

               About Tenet Healthcare Corporation

Headquartered in Dallas, Texas, Tenet Healthcare Corporation  --
http://www.tenethealth.com/-- through its subsidiaries, owns and
operates acute care hospitals and related ancillary health care
businesses, which include ambulatory surgery centers and
diagnostic imaging centers.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $8.2 billion, total liabilities of $8.1 billion and
shareholders' equity about $136 million.

Tenet Healthcare Corporation (NYSE:THC) today reported net income
of $104 million for its third quarter of 2008, compared to a net
loss of $59 million for its third quarter of 2007.

For nine months ended Sept. 30, 2008, the company reported net
income of $58 million compared to net loss of $14 million for the
same period in the previous year.

                          *     *     *

Moody's Investors Service placed Tenet Healthcare Corporation's
senior unsecured debt rating at 'Caa1' in September 2006.  The
rating still holds to date with a stable outlook.


TENET HEALTHCARE: CEO, Other Execs Disclose Ownership of Stock
--------------------------------------------------------------
Stephen L. Newman, chief operating officer of Tenet Healthcare
Corp. disclosed in a Form 4 filing with the Securities and
Exchange Commission that he acquired 30,000 shares of the
company's common stock on Nov. 5, 2008, at prices of $2.49 to
$2.50 a share.  After these transactions, Mr. Newman may be deemed
to directly own 179,781 shares.  He also disclosed indirectly
owning 750 shares of the company's common stock.  Mr. Newman added
that he also owns other securities of the company.

Trevor Fetter, the company's CEO & president, disclosed in a
separate filing that he acquired 100,000 shares of the company's
common stock on Nov. 5, 2008:

           Securities Acquired     Price per Share
           -------------------     ---------------
                2,100                   $2.64
               17,779                   $2.65
               12,621                   $2.66
                7,800                   $2.67
               26,000                   $2.68
                2,100                   $2.69
               22,739                   $2.7
                8,861                   $2.71

After the transactions, Mr. Fetter may be deemed to 911,321
shares.  Mr. Fetter also stated that he also indirectly owns
10,200 shares of the company's common stock.

Biggs C. Porter, CFO, disclosed that he acquired 10,000 shares of
the company's common stock at $2.04 per share on Nov. 10, 2008.
After the transaction, Mr. Porter may be deemed to indirectly own
25,0000 shares.  He also said that he may be deemed to directly
own 163,826 shares of common stock.  Mr. Porter disclosed directly
owning other securities.

                          Other Officers

Richard Pettingill, the company's director, also disclosed
acquiring 10,000 shares of common stock at $2.64 per share on
Nov. 6, 2008.  He also added that he owns other securities of the
company.

Cathy Fraser senior vice president of the company disclosed in a
separate filings that she may be deemed to directly own 26,059
shares of the company's common stock after the Nov. 6, 2008,
purchase of 10,000 shares at $2.6 per share.  Ms. Fraser also
disclosed directly owning other securities of the company.

In a separate filing, Gary K. Ruff, SVP and general counsel of the
company, disclosed that he acquired 10,000 shares of the company's
common stock on Nov. 5, 2008 at prices of $2.54 to $2.55 a share.
After the acquisitions, Mr. Ruff may be deemed to directly own
27,040 shares.  Mr. Ruff added that he also own other securities
of the company.

               About Tenet Healthcare Corporation

Headquartered in Dallas, Texas, Tenet Healthcare Corporation  --
http://www.tenethealth.com/-- through its subsidiaries, owns and
operates acute care hospitals and related ancillary health care
businesses, which include ambulatory surgery centers and
diagnostic imaging centers.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $8.2 billion, total liabilities of $8.1 billion and
shareholders' equity about $136 million.

Tenet Healthcare Corporation reported net income of $104 million
for its third quarter of 2008, compared to a net loss of
$59 million for its third quarter of 2007.

For nine months ended Sept. 30, 2008, the company reported net
income of $58 million compared to net loss of $14 million for the
same period in the previous year.

                          *     *     *

Moody's Investors Service placed Tenet Healthcare Corporation's
senior unsecured debt rating at 'Caa1' in September 2006.  The
rating still holds to date with a stable outlook.


THE GAP: Fitch Affirms & Withdraws Low-B Ratings
------------------------------------------------
Fitch Ratings has affirmed and simultaneously withdrawn its
ratings on The Gap, Inc. (Gap):

   -- Issuer default rating (IDR) of 'BB+';
   -- Revolving Credit Facility rated 'BB+';
   -- Senior Unsecured Note rated 'BB+'.

The Rating Outlook is Stable.

Fitch will no longer provide ratings or analytical coverage of
Gap.


THORNBURG MORTGAGE: S&P Lifts Counterparty Credit Rating to 'CC'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its counterparty credit
rating on Thornburg Mortgage Inc. to 'CC' from 'D'.  "At the same
time, we also raised our rating on Thornburg's senior notes to
'CC' from 'D'.  The outlook is negative," S&P said.

"This rating change follows Thornburg's announcement that, as of
Dec. 12, 2008, it had paid the missed interest payment on its 8%
senior notes that was due on Nov. 15, 2008.  Since that due date,
the company has successfully tendered its preferred shares,
allowing for a reduction of funding costs on its senior
subordinated notes to 12% from 18%."

"Thornburg has also completed negotiations with its override
agreement counterparties by agreeing to pay them $110 million from
the company's liquidity reserve fund.  This amended agreement
frees Thornburg from any additional margin calls from its
counterparties, which should help the company's liquidity for the
time being," said Standard & Poor's credit analyst Adom
Rosengarten.

"Nevertheless, the company continues to face challenges going
forward.  "Despite the reduced coupon on its senior subordinated
notes, Thornburg's funding costs remain extremely high.  Funding
markets remain strained, and future funding could be difficult to
secure.  This is could become especially significant as the
override agreement's expiration date draws near, and Thornburg
must either pay down the remaining repo funding, extend its
agreement, or find alternate sources of funding," Mr. Rosengarten
added.


TREMONT GROUP: More Than Half of Assets Invested in Madoff's Firm
-----------------------------------------------------------------
Tremont Group Holdings Inc. had US$3.3 billion, or more than half
its total assets, invested with Bernard Madoff, Katherine Burton
of Bloomberg News reports citing a person familiar with the
matter.

The person told Bloomberg News Tremont's Rye Investment Management
unit had US$3.1 billion, virtually all the money the group
managed, allocated to Madoff.

Tremont also had another US$200 million, or about 7% of its total
assets, invested through its fund of funds group, Tremont Capital
Management, the person was cited by Bloomberg News as saying.

According to Bloomberg News, Mr. Madoff was arrested Dec. 11 and
charged with defrauding investors of as much as US$50 billion
through a Ponzi scheme at his New York-based firm's business
advising rich people, hedge funds and institutions.

"We believe Tremont exercised appropriate due diligence in
connection with the Madoff investments," Tremont said in a
statement obtained by Bloomberg News.

New York-based Tremont Group Holdings Inc. --
http://www.tremont.com/-- is the holding company for Tremont
Capital Management (formerly Tremont Advisers), a fund of hedge
funds. Tremont Group manages roughly US$6 billion in assets
through its fund of hedge fund products and multi-manager
portfolios, as well as its single-manager Rye Investment
Management unit.

The Tremont Group has offices in Toronto; London; and Hong Kong.
OppenheimerFunds, which is majority controlled by MassMutual, owns
the Tremont Group.


TRIBUNE CO: Teamsters Says Employees Should Be First in Line
------------------------------------------------------------
Teamsters general president James P. Hoffa said in a statement
that billionaire Sam Zell's decision to take Tribune Co. private
in an overleveraged, doomed deal that swiftly brought down the
161-year-old media giant, placed risks squarely on the shoulders
of Tribune workers.

Mr. Hoffa said, as Tribune's creditors head to bankruptcy court
for payback, these workers should go directly to the front of the
line.  By transferring 100 percent ownership of the company and
some $13 billion of debt to an S-Corp Employee Stock Ownership
Plan in the buyout, Mr. Zell insulated himself from tax
responsibilities and mortgaged the future retirement savings of
Tribune employees, Mr. Hoffa related.  Despite owning 100% of the
company, employees were given no voice in the governance of the
company or in the plan itself.  They've had no say in the terms of
their own debt obligations or decisions related to how best to
service that debt, Mr. Hoffa noted.

Tribune contributions to employee retirement savings for
employee-owners, Mr. Hoffa said, changed from a defined benefit
plan to a defined contribution plan structured as the ESOP.
Employees participating in the ESOP can't diversify their holdings
until they reach age 55, he continued.

According to the statement, the first of the company's
contributions to the ESOP was expected to happen in the first
quarter, but now -- with the Tribune mired in Chapter 11
bankruptcy -- it's unclear whether that will happen or whether
those shares will have any value.  Not everyone lost on the deal.

Tribune executives made millions, including chief executive
officer, Dennis FitzSimons, who engineered the deal with Mr. Zell
and raked in $17.7 million in severance and other payments
and cashed in his stock for $23.8 million, Mr. Hoffa said.
Shareholders traded in stock rated deep into junk territory for
cash representing a 21 percent premium over the stock price just
before the transaction, he added.

The banks that lent Tribune the money, Mr. Hoffa said, shared some
$47 million in fees.

Citigroup and Merrill Lynch who advised Tribune on the deal
received $35.8 million and $37 million respectively.  And
billionaire Mr. Zell, who put up only $315 million in the deal, is
expected to stand ahead of employees in the creditors' line at
bankruptcy court.

Mr. Hoff said, "One thing is for sure -- the Teamsters will remain
vigilant during the bankruptcy process to ensure that our members
and all Tribune employee interests are advanced."

                      About Tribune Company

Headquartered in Chicago, Illinois, Tribune Company --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball
team.  The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141).  The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent.  As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.


TRIMAS CORP: Moody's Affirms B2 CFR & Junks Sr. Sub. Notes Rating
-----------------------------------------------------------------
Moody's Investors Service affirmed TriMas Corporation's corporate
family and probability of default ratings at B2.  In related
rating actions Moody's downgraded the rating for the company's
senior secured bank credit facility to Ba3 from Ba2 and the rating
for the senior subordinated notes due 2012 to Caa1 from B3.
TriMas' speculative grade liquidity remains at SGL-3.  The outlook
is stable.

TriMas' B2 corporate family rating reflects the company's diverse
product offerings and customer diversification, strong market
position within each line of business, and healthy margins and
return metrics.  For some of the financial metrics within Moody's
Global Manufacturing Rating Methodology TriMas' performance could
be seen as to be consistent with a rating higher than the B2
assigned.  Through LTM September 30, 2008, key return metrics
were: EBITA margin - 9.1%, EBITA/average assets - 7.2%, and free
cash flow/debt -- 5.8% (all ratios adjusted per Moody's
methodology).  Yet, these strengths are balanced against its North
American concentration where the company must contend with the
sluggish U.S. economy.  Further constraining the rating is the
company's exposure to the recreational vehicle (RV) and
recreational end markets, which continue to deteriorate, and are a
drag on the company's overall performance.  TriMas should be able
to weather these challenges within the B2 rating level due to the
company's ability to generate free cash flow and the strength of
its Energy Products and Industrial Products businesses, which are
helping to mitigate the declining performance in the RV Trailer
and Recreational Accessories segments.

The ratings for the senior secured bank credit facility and senior
subordinated notes reflect the probability of default of the
company, to which Moody's assigns a PDR of B2.  The downgrades to
the secured credit facility and senior subordinated notes due 2012
result from the revised expectations regarding the loss given
default assessments for these debt instruments.  The inclusion of
the non-U.S. bank debt in the LGD waterfall creates a capital
structure reflecting the potential claims on TriMas in a recovery
scenario.  This debt at the company's foreign operating
subsidiaries acts to increase the loss given default assessment of
the bank credit facility and senior subordinated notes due 2012,
providing pressure to the ratings.

These ratings and assessments were affected by this action:

   * Corporate family rating affirmed at B2;

   * Probability of default affirmed at B2;

   * $407.7 million (originally $410.0 million) senior secured
     bank credit facility downgraded to Ba3 (LGD2, 23%) from Ba2
     (LGD2, 22%); and

   * $337 million (originally $437.8 million) senior subordinated
     notes due 2012 downgraded to Caa1 (LGD5, 77%) from B3
     (LGD5, 76%)

The company's speculative grade liquidity rating of SGL-3 is
unchanged.

The last rating action was on June 26, 2006 at which time Moody's
affirmed TriMas' B2 corporate family rating.

TriMas Corporation is a multi-industrial manufacturer.  The
Company is engaged in five business segments with diverse products
and market channels.  Last twelve months revenues through
September 30, 2008 were approximately $1.1 billion.


TRONOX INC: Taps Kirkland & Ellis for Bankruptcy Advice
-------------------------------------------------------
Bloomberg News' By Tiffany Kary reports that Tronox Inc. has hired
Kirkland & Ellis in Chicago, Illinois, to explore a bankruptcy
filing, a person familiar with the situation said.  The source
told Bloomberg that Kirkland was asked to evaluate a possible
filing.

Robert Gibney, a Tronox spokesman, didn't immediately return a
phone call and e-mail seeking comment, Bloomberg says.

Tronox Worldwide LLC, a wholly owned subsidiary of Tronox
Incorporated, did not make a scheduled payment of interest when
due on December 1, 2008 on its $350,000,000 of 9-1/2% Senior Notes
due 2012 issued pursuant to an Indenture, dated as of November 28,
2005, among Tronox Worldwide LLC, Tronox Finance Corp., and
Citibank, N.A, as trustee.  Failure to make the interest payment
within 30 days of December 1, 2008 would constitute an event of
default under the indenture governing the notes, permitting
holders of at least 25% in principal amount of the notes to
declare the full amount of the notes immediately due and payable.

On December 4, 2008, Tronox Inc. and Tronox Worldwide entered into
a Second Waiver Extension with certain lenders under Tronox
Worldwide's Credit Agreement, dated as of November 28, 2005, as
amended, with the lenders, Lehman Brothers Inc. and Credit Suisse,
as joint lead arrangers and joint bookrunners, ABN Amro Bank N.V.,
as syndication agent, JPMorgan Chase Bank, N.A. and Citicorp USA,
Inc., as co-documentation agents, and Lehman Commercial Paper
Inc., as administrative agent.

The parties previously entered into a Waiver and Amendment to
Credit Agreement dated October 28, 2008, and the Waiver Extension
to the Credit Agreement, dated as of November 20, 2008.  Lenders
holding a majority of the aggregate principal amount of loans
under the Credit Agreement have agreed to waive certain defaults
and events of default that may have occurred due to Tronox
Worldwide's (i) failure to comply for the period of four
consecutive fiscal quarters ending September 30, 2008 with Section
7.1(a) of the Credit Agreement, which requires maintenance of a
maximum Consolidated Total Leverage Ratio, and Section 7.1(b) of
the Credit Agreement, which requires maintenance of a minimum
Consolidated Interest Coverage Ratio, and (ii) submission of the
Borrowing Notice on September 30, 2008, or receipt of any proceeds
in respect thereof, at a time when any default or event of default
had occurred and was continuing.

The Second Waiver Extension amended the term "Waiver Period" to
extend that period from December 5, 2008, to December 19, 2008.
As a result, the Waiver has been extended to expire upon the
earlier to occur of (i) December 19, 2008 and (ii) the occurrence
of any event of default (other than any default waived pursuant to
the Waiver and Amendment) and delivery by any of the lenders of a
notice to Tronox Worldwide, while such event of default is
continuing, stating that the Waiver is being terminated.

There is no assurance that the company will not be in default
under the Credit Agreement in the future.  If the company were to
be in default under the Credit Agreement, its ability to borrow
under the Credit Agreement would be impaired and the lenders could
declare a default which could ultimately cause all amounts due
under the Credit Agreement to become immediately due and payable.

On December 5, 2008, Tronox Funding LLC and Tronox Worldwide
entered into the Fifth Amendment to Receivables Sale Agreement to
the Receivables Sale Agreement with The Royal Bank of Scotland plc
and Amsterdam Funding Corporation, dated as of September 26, 2007.
Amendment No. 5 amended the term "Scheduled Termination Date" in
the Sale Agreement to extend that date from December 5, 2008 to
December 19, 2008.

There is no assurance that the Seller and Tronox Worldwide will be
able to obtain additional amendments or waivers to the Sale
Agreement, or that a Termination Event will not occur under the
Sale Agreement in the future.  The occurrence of a Termination
Event in the future would adversely affect the rights of the
Seller under the Sale Agreement.

A full-text copy of the Second Waiver Extension, dated December 4,
2008, is available at no charge at:

              http://ResearchArchives.com/t/s?3661

A full-text copy of the Fifth Amendment to Receivables Sale
Agreement, dated December 5, 2008, is available at no charge at:

              http://ResearchArchives.com/t/s?3662

                            About Tronox

Headquartered in Oklahoma City, Tronox Incorporated (NYSE:TRX) --
http://www.tronox.com/-- is a producer and marketer of titanium
dioxide pigment, an inorganic white pigment used in paint,
coatings, plastics, paper and many other everyday products. The
company's five pigment plants, which are located in the United
States, Australia, Germany and the Netherlands, supply performance
products to approximately 1,100 customers in 100 countries.  In
addition, Tronox produces electrolytic products, including sodium
chlorate, electrolytic manganese dioxide, boron trichloride,
elemental boron and lithium manganese oxide.

Bloomberg says the company is the world's third largest maker of
titanium dioxide.  According to Bloomberg, DuPont Co. is the
largest maker of the chemical, followed by Saudi-owned National
Titanium Dioxide Co., known a Cristal.

Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008.  The company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.

Tronox has retained the investment banking firm Rothschild Inc. to
further assist the company in evaluating strategic options for the
business.

As of December 4, Robert Y. Brown, III, Tronox Incorporated vice
president of strategic planning and business services was no
longer with the company.


TRUMP ENTERTAINMENT: Industry to Remain Under Pressure in 2009
--------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


VICORP RESTAURANTS: To Sell Most of Assets for $59 Million
----------------------------------------------------------
Vicorp. Restaurants Inc., asks the U.S. Bankruptcy Court for the
District of Delaware to approve at the Dec. 22 hearing procedures
for the sale of substantially all its assets to Fidelity National
Special Opportunities Inc. and Newport Global Advisors, or to
another party at an auction.  Fidelity and Newport, who are both
unsecured bondholders of the Debtors, will form an entity to
purchase the assets.

According to Bloomberg's Bill Rochelle, in accordance with its
agreement with its DIP lenders, Vicorp has signed a letter of
intent with Fidelity/Newport to sell most of its assets for
$59 million in cash.  The sale will be subject to higher and
better offers at an auction.  Vicorp contemplates this schedule:

   -- deadline for competing bids will be January 9.

   -- an auction will be held Jan. 13 if multiple bids are
      received by the bid deadline.

   -- Vicorp will present the results of the auction at the
      Jan. 16 sale hearing.

The Cash Portion of the Purchase Price will include a $20 million
equity contribution.

According to Mr. Rochelle, the purchase price offered by
Fidelity/Newport is to cover senior secured debt, the cost of
curing lease arrears, administrative costs and professional fees.
In addition, Vicorp's creditors will receive warrants to buy 10%
of the common stock in the new company.  Bloomberg adds that the
assets being purchased include lawsuits belonging to Vicorp.

The Debtors relate that pursuant to the Revised Second Amendment
DIP Order, dated Oct. 10, 2008, the Debtors are required to sell
substantially all of their assets on or before Jan. 31, 2009.
The Debtors intend to file with the Court an executed copy of the
Stalking Horse Agreement with the Purchaser no later than
Dec. 17, 2008.

Pursuant to the Letter of Intent, Fidelity/Newport will not
purchase (i) the California locations and the equipment, (ii) the
Hopkins location and the equipment and (iii) the Toughy and
Western location and the equipment.

If Fidelity/Newport is not designated as the Successful Bidder at
the conclusion of the Auction, the Debtors request authority to
pay Fidelity/Newport from the sale proceeds as a superpriority
administrative expense claim pursuant to Section 503(b) of the

Bankruptcy Code a Break-Up fee in the amount equal to 3% of the
Cash Portion of the Purchase Price, a maximum of $1,770,000, based
upon the cash bid of $59,000,000, and an expense reimbursement not
to exceed $750,000.  The Break-Up Fee and Expense Reimbursement
shall be paid in cash irrespective of the form of consideration
received by the Debtors.

Headquartered in Denver, Colorado, VICORP Restaurants, Inc. and VI
Acquisition Corp. -- http://www.vicorpinc.com/-- operate family-
dining restaurants under the Village Inn and Bakers Square brands.
The Debtors also operate 3 pie production facilities that produce
pies that are offered in the Debtors' restaurants and are sold to
select third-party customers including supermarkets and other
restaurant chains.

The Debtors filed separate petitions for Chapter 11 relief on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623).  Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, Ann C. Cordo, Esq., and Donna
L. Culver, Esq., at Morris Nichols Arsht & Tunnell, and Joseph E.
Cotterman, Esq., at Gallagher & Kennedy, P.A., represent the
Debtors as counsel.  The Debtors selected The Garden City
Group, Inc. as their claims agent.  Abhilash M. Raval, Esq.,
Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed
Hadley & McCloy LLP, Domenic E. Pacitti, Esq., and Michael W.
Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers,
represent the Official Committee of Unsecured Creditors of the
Debtors.

When the Debtors filed for protection from their creditors, they
listed estimated assets of $100 million to $500 million and debts
of $100 million to $500 million.


VICORP RESTAURANTS: To File Stalking Horse Agreement on Dec. 17
---------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 17, 2008,
Vicorp. Restaurants Inc. and VI Acquisition Corp. asked the U.S.
Bankruptcy Court for the District of Delaware to approve the
procedures for the sale of substantially all its assets to
Fidelity National Special Opportunities Inc. and Newport Global
Advisors, or to another party at an auction.

Fidelity and Newport, who are both unsecured bondholders of the
Debtors, will form an entity to purchase the assets.

The Debtors tell the Court that they intend to file an executed
copy of the Stalking Horse Agreement with the Purchaser no later
than Dec. 17, 2008.  The entity to be formed by Fidelity and
Newport will act as the "stalking horse" bidder.

As part of the Bid Procedures Order, the Debtors are also
requesting approval of the execution of the Stalking Horse
Agreement, which includes payment of a Break-Up Fee in the amount
equal to 3% of the Cash Portion of the Purchase Price (a maximum
of $1,770,000) and the Expense Reimbursement not to exceed
$750,000, to the extent payable pursuant to the Stalking Horse
Agreement.

Headquartered in Denver, Colorado, VICORP Restaurants, Inc. and VI
Acquisition Corp. -- http://www.vicorpinc.com/-- operate family-
dining restaurants under the Village Inn and Bakers Square brands.
The Debtors also operate 3 pie production facilities that produce
pies that are offered in the Debtors' restaurants and are sold to
select third-party customers including supermarkets and other
restaurant chains.

The Debtors filed separate petitions for Chapter 11 relief on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623).  Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, Ann C. Cordo, Esq., and Donna
L. Culver, Esq., at Morris Nichols Arsht & Tunnell, and Joseph E.
Cotterman, Esq., at Gallagher & Kennedy, P.A., represent the
Debtors as counsel.  The Debtors selected The Garden City
Group, Inc. as their claims agent.  Abhilash M. Raval, Esq.,
Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed
Hadley & McCloy LLP, Domenic E. Pacitti, Esq., and Michael W.
Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers,
represent the Official Committee of Unsecured Creditors of the
Debtors.

When the Debtors filed for protection from their creditors, they
listed estimated assets of $100 million to $500 million and debts
of $100 million to $500 million.


WACHOVIA BANK: S&P Lowers Ratings on Classes N & O Certificates
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes of commercial mortgage pass-through certificates from
Wachovia Bank Commercial Mortgage Trust's series 2003-C9.
"Concurrently, we affirmed our ratings on 15 other classes from
this transaction," S&P said.

"The downgrades reflect expected credit support erosion upon the
eventual resolution of a real estate owned (REO) asset in special
servicing and the actual realized loss incurred upon the payoff of
a $3.7 million loan, formally with the special servicer.  The
downgrades also reflect our concerns with five ($22.6 million, 3%)
of the 11 loans ($34.7 million, 4%) that have reported debt
service coverage (DSC) of less than 1.0x.  The affirmed ratings
reflect credit enhancement levels that provide adequate support
through various stress scenarios.

"Details of the REO asset and the loan previously with the special
servicer, CW Capital, are:

     -- The Coastal Carolina Campus loan ($12.6 million exposure;
        1.4%) is secured by a 120-unit, 432-bed student housing
        complex built in 2002 in Myrtle Beach, S.C.  The loan was
        transferred to special servicing on Jan. 24, 2005, due to
        a monetary default, and the property became REO on Nov. 7,
        2005.  The property was marketed for sale, and a contract
        has recently been executed.

       -- The Aztec MHP/RV Park loan was secured by a 328-pad
          manufactured housing/recreational vehicle park in Mesa,
          Ariz.  The loan matured on Dec. 1, 2008, and was
          transferred to special servicing at that time.  On
          Dec. 10, 2008, this $3.7 million loan paid off at a
          discount, and the trust incurred a loss of approximately
          $77,000, which was incorporated into our rating actions.

"The 11 loans with DSC of less than 1.0x are secured by a variety
of multifamily, manufactured housing, retail, and office
properties, have an average balance of $3.2 million, and have
experienced an average decline in DSC of 40% since issuance.  Six
of these loans were not credit concerns because of improved
occupancies, improved leasing conditions, relatively low leverage,
or a combination of the above.  The five loans that are credit
concerns are secured by multifamily, manufacturing housing,
office, and retail properties.  These properties have experienced
a combination of declining occupancies, deteriorating market
conditions, and higher operating expenses.  These five loans have
experienced an average decline of 40% since issuance.

"As of the Nov. 17, 2008, remittance report, the collateral pool
consisted of 94 loans with an aggregate balance of $903.3 million,
compared with 118 loans with a balance of $1.149 billion at
issuance.  The master servicer, Wachovia Bank N.A. (Wachovia),
reported financial information for 95% of the pool. Eighty-six
percent of the servicer-provided information was full-year 2007
data.  Excluding 11 defeased loans (13%), Standard & Poor's
calculated a weighted average DSC of 1.76x for the pool, compared
with 1.63x at issuance.  There are no delinquent loans; however,
the trust has experienced losses from two loans totaling
$3.2 million.

"The top 10 loan exposures secured by real estate have an
aggregate outstanding balance of $412.7 million (46%) and a
weighted average DSC of 2.03x, up from 1.84x at issuance.
Standard & Poor's reviewed property inspections provided by the
master servicer for all of the assets underlying the top 10
exposures.  Nine of the properties were characterized as "good,"
and one was deemed to be in normal condition for the property's
age and market.

"The credit characteristics of the TSA Office Building, West Oaks
Mall, Park City Center, Meadows Mall, and Columbia Corporate
Center loans are consistent with those of investment-grade rated
obligations.  Details of these loans are:

      -- The TSA Office Building loan has a balance of $95 million
         (11%) and is the largest loan in the pool.  The loan is
         secured by two Class A office buildings containing
         491,126 sq. ft. in Pentagon City, Va.  For the year ended
         Dec. 31, 2007, DSC for this loan was 2.80x, and the
         occupancy is currently 100%.  Standard & Poor's adjusted
         value for this loan is down 3% since issuance.

       -- The West Oaks Mall loan has a balance of $70.4 million
          (8%) and is the second-largest loan in the pool.  The
          loan is secured by 429,318 sq. ft. of space at a
          regional mall in Ocoee, Fla., consisting of 306,460 sq.
          ft. of in-line space and 122,858 sq. ft. of outparcel
          space.  For the year ended Dec. 31, 2007, DSC for this
          loan was 1.98x, and the occupancy was 97.4%.  Standard &
          Poor's adjusted value for this loan is flat since
          issuance.

      -- The Park City Center loan, the third-largest loan in the
          pool, has a trust balance of $60.5 million (7%) and a
          whole loan balance of $150.4 million.  The whole loan
          consists of two $60.5 million pari passu pieces, one
          contributed to the subject transaction and the other
          contributed to the WBCMT 2003-C8 transaction, and a
          $29.4 million subordinate B note held outside of the
          trust.  The loan is secured by 982,548 sq. ft. of a
          1.4-million-sq.-ft. enclosed regional mall in Lancaster,
          Pa.  For the year ended Dec. 31, 2007, DSC for this loan
          was 2.15x, and the occupancy was 98.2%.  Standard &
          Poor's adjusted value for this loan is flat since
          issuance.

      -- The Meadows Mall loan, the fourth-largest loan in the
          pool, has a trust balance of $51.8 million (6%) and a
          whole loan balance of $103.5 million.  The whole loan
          consists of two $60.5 million pari passu pieces, one
          contributed to the subject transaction and the other
          contributed to the COMM 2004-LB2A transaction.  The loan
          is secured by 307,737 sq. ft. of in-line space that is
          part of a 956,392-sq.-ft. regional mall located in Las
          Vegas.  For the year ended Dec. 31, 2007, DSC for this
          loan was 2.21x, and occupancy was 96.0% as of June 30,
          2008.  Standard & Poor's adjusted value for this loan is
          up 27% from issuance.

       -- The Columbia Corporate Center loan has a trust balance
          of $8.6 million and a whole loan balance of
          $17.6 million.  The whole loan consists of an
          $8.6 million A note that was contributed to the subject
          transaction and a $9 million subordinate B note held
          outside of the trust.  The loan is secured by a 146,023-
          sq.-ft. office building in Florham Park, N.J.  For the
          year ended Dec. 31, 2007, DSC for this loan was 2.46x,
          and the property was 100% occupied as of July 22, 2008.
          Standard & Poor's adjusted value for this loan is down
          23% from issuance.

"Wachovia reported a watch list of 12 loans with an aggregate
outstanding balance of $42.0 million (4.6%).  These loans were
placed on the watchlist due to declining DSC and upcoming lease
expirations.

"Standard & Poor's stressed the loans on the watchlist along with
other loans with credit issues as part of its pool analysis.  The
resultant credit enhancement levels support the lowered and
affirmed ratings."

     RATINGS LOWERED

     Wachovia Bank Commercial Mortgage Trust
     Commercial mortgage pass-through certificates series 2003-C9

                  Rating
     Class     To        From   Credit enhancement (%)
     -----     --        ----   ----------------------
     N         B-        B                        2.19
     O         CCC+      B-                       1.87

     RATINGS AFFIRMED

     Wachovia Bank Commercial Mortgage Trust
     Commercial mortgage pass-through certificates series 2003-C9


     Class     Rating           Credit enhancement (%)
     -----     ------           ----------------------
     A-3       AAA                               21.59
     A-4       AAA                               21.59
     B         AAA                               17.77
     C         AA+                               15.87
     D         AA-                               12.21
     E         A+                                10.62
     F         BBB+                               8.87
     G         BBB                                7.12
     H         BBB-                               5.37
     J         BB+                                4.42
     K         BB                                 3.78
     L         BB-                                3.30
     M         B+                                 2.83
     X-P       AAA                                 N/A
     X-C       AAA                                 N/A

     N/A--Not applicable.


WELLS FARGO: Moody's Downgrades Jumbo Deals Issued in 2006 & 2007
-----------------------------------------------------------------
Moody's Investors Service has downgraded 574 tranches and
confirmed 14 tranches from 26 Jumbo transactions issued by Wells
Fargo Mortgage Backed Securities Trust in 2006 and 2007.

The collateral backing these transactions consists primarily of
first-lien, fixed-rate prime Jumbo mortgage loans.  The actions
are triggered by higher than anticipated rates of delinquency,
foreclosure, and REO in the underlying collateral relative to
currently available credit enhancement levels.  The actions listed
reflect Moody's revised expected losses on the Jumbo sector
announced in a press release on September 18, and are part of
Moody's on-going review process.

Moody's final rating actions are based on current ratings, level
of credit enhancement, collateral performance and updated pool-
level loss expectations relative to current level of credit
enhancement.  Moody's took into account credit enhancement
provided by seniority, cross-collateralization, time tranching,
and other structural features within the Aaa waterfalls.  General
loss estimation methodology is outlined.

Complete rating actions are:

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-2 Trust

Cl. I-A-1 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-2 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-3 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-4 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-5 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-6 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-7 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-8 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-9 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-10 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-11 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-12 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-13 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-14 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-16 Certificate, Downgraded to A2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-17 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-3 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-4 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-5 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-6 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-7 Certificate, Downgraded to A3, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. III-A-1 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. III-A-2 Certificate, Downgraded to A3, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. IV-A-1 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. IV-A-2 Certificate, Downgraded to A3, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-3 Trust

Cl. A-1 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-12 Certificate, Downgraded to Baa3, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-4 Trust

Cl. I-A-1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-2 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-3 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-4 Certificate, Downgraded to A2, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. I-A-5 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-6 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-8 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-9 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-10 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-11 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-12 Certificate, Downgraded to Aa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-13 Certificate, Downgraded to A2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-14 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-PO Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-3 Certificate, Downgraded to A2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. II-A-PO Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-6 Trust

Cl. I-A-1 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-3 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-5 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-6 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-7 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-8 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-9 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-10 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-11 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-12 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-13 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-14 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-15 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-16 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-17 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-18 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-19 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-20 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-21 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-22 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-3 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-7 Trust

Cl. I-A-1 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-PO Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. III-A-1 Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-8 Trust

Cl. A-1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Baa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Baa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Baa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Baa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-12 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-15 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-18 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-19 Certificate, Downgraded to A3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-9 Trust

Cl. I-A-1 Certificate, Downgraded to A2, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. I-A-2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-3 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-4 Certificate, Confirmed at Aaa, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-5 Certificate, Downgraded to A2, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. I-A-6 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-7 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-8 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-9 Certificate, Confirmed at Aaa, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-10 Certificate, Downgraded to A2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-11 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-12 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-13 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-14 Certificate, Downgraded to A2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-15 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-16 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-17 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-18 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-19 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-20 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-21 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-22 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-24 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-25 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-26 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-27 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-28 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-29 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-30 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-31 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-32 Certificate, Downgraded to A2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-33 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-34 Certificate, Downgraded to A2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-35 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. B-1 Certificate, Downgraded to Ba2, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-10 Trust

Cl. A-1 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Aa3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Aa3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Confirmed at Aaa, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-12 Certificate, Confirmed at Aaa, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to Aa3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-15 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-18 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-19 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-20 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-21 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-22 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-23 Certificate, Downgraded to Aa3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-24 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-25 Certificate, Confirmed at Aaa, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-11 Trust

Cl. A-1 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-12 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to Ba1, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-18 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-19 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-20 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-12 Trust

Cl. A-1 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to A3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-12 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to A3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-15 Certificate, Downgraded to A3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to A3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to A3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-13 Trust

Cl. A-2 Certificate, Downgraded to Aa2, previously on 10/9/06
Assigned to Aa1

Cl. A-6 Certificate, Downgraded to Aa2, previously on 10/9/06
Assigned to Aa1

Cl. A-9 Certificate, Downgraded to Aa2, previously on 10/9/06
Assigned to Aa1

Cl. A-12 Certificate, Downgraded to Aa2, previously on 10/9/06
Assigned to Aa1

Cl. A-PO Certificate, Downgraded to Aa1, previously on 10/9/06
Assigned to Aaa

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-14 Trust

Cl. A-1 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-15 Trust

Cl. A-1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-16 Trust

Cl. A-1 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-2 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-4 Certificate, Downgraded to Aa3, previously on 11/8/06
Assigned to Aa1

Cl. A-5 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-6 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-7 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-8 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-9 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-10 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-11 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-12 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-13 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-14 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-15 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-16 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-17 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-18 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-19 Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

Cl. A-PO Certificate, Downgraded to Aa2, previously on 11/8/06
Assigned to Aaa

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-17 Trust

Cl. A-1 Certificate, Downgraded to A1, previously on 11/7/06
Assigned to Aaa

Cl. A-2 Certificate, Downgraded to Aa3, previously on 11/7/06
Assigned to Aaa

Cl. A-3 Certificate, Downgraded to A1, previously on 11/7/06
Assigned to Aaa

Cl. A-4 Certificate, Downgraded to A1, previously on 11/7/06
Assigned to Aaa

Cl. A-PO Certificate, Downgraded to A1, previously on 11/7/06
Assigned to Aaa

   -- Issuer: Wells Fargo Mortgage Backed Securities 2006-18 Trust

Cl. A-1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-1 Trust

Cl. A-1 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Baa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Baa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Baa2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-2 Trust

Cl. I-A-1 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-2 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-3 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-4 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-5 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-6 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-7 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-8 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-9 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-10 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-11 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-12 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-13 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-14 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-15 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-16 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-17 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-18 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-19 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-20 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-21 Certificate, Downgraded to Ba1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-22 Certificate, Downgraded to Ba1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Downgraded to Ba1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-3 Trust

Cl. I-A-1 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-2 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-3 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-4 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-5 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-6 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-7 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-8 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-9 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-10 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-11 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-12 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-13 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-14 Certificate, Downgraded to B1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-15 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-16 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-17 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-18 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-19 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-20 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-3 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-4 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-5 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. III-A-1 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-E Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-4 Trust

Cl. A-1 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to B1, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-12 Certificate, Downgraded to B1, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-15 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-18 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-19 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-20 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-21 Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-6 Trust

Cl. A-1 Certificate, Downgraded to Ba1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to A1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Ba3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-7 Trust

Cl. A-1 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-12 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-15 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-18 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-19 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-20 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-21 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-22 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-23 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-24 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-25 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-26 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-27 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-28 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-29 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-30 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-31 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-32 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-33 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-34 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-35 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-36 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-37 Certificate, Downgraded to Baa1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-38 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-39 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-40 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-41 Certificate, Downgraded to Baa1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-42 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-43 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-44 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-45 Certificate, Downgraded to Baa1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-46 Certificate, Downgraded to Baa1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-47 Certificate, Downgraded to Baa1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-48 Certificate, Downgraded to Baa1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-49 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-50 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-51 Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to A3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-8 Trust

Cl. I-A-1 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-2 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-3 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-4 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-5 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-6 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-7 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-8 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-9 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-10 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-11 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-12 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-13 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-14 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-15 Certificate, Downgraded to B1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-16 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-17 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-18 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-19 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-20 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-21 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-22 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-23 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Ba3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-3 Certificate, Downgraded to B1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. II-A-4 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-5 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-6 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-7 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-8 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-9 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-10 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-11 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-12 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-14 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-15 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-16 Certificate, Downgraded to Ba3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-10 Trust

Cl. I-A-1 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-2 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-3 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-4 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-5 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-6 Certificate, Downgraded to A2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. I-A-7 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-8 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-9 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-10 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-11 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-12 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-13 Certificate, Confirmed at Aaa, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-14 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-15 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-16 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-17 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-18 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-19 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-20 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-21 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-22 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-23 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-24 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-25 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-26 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-27 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-28 Certificate, Downgraded to Ba3, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-29 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-30 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-31 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-32 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-34 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-33 Certificate, Downgraded to B1, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. I-A-35 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-36 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-37 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-38 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-39 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-40 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. I-A-41 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Ba2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. II-A-1 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-3 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-5 Certificate, Downgraded to A2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-6 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-7 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-8 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-9 Certificate, Downgraded to Baa3, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-10 Certificate, Downgraded to Ba3, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. II-A-11 Certificate, Downgraded to Ba1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-12 Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-11 Trust

Cl. A-1 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-2 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-3 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-4 Certificate, Downgraded to Aa1, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-5 Certificate, Downgraded to Aa2, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-6 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-7 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-8 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-9 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-10 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-11 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-12 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-13 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-14 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-15 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-16 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-17 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-18 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-19 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-20 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-21 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-22 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-23 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-24 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-25 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-26 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-27 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-28 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-29 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-30 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-31 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-32 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-33 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-34 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-35 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-36 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-37 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-38 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-39 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-40 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-41 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-42 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-43 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-44 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-45 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-46 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-47 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-48 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-49 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-50 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-51 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-52 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-53 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-54 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-55 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-56 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-57 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-58 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-59 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-60 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-61 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-62 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-63 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-64 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-65 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-66 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-67 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-68 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-69 Certificate, Downgraded to Aa3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-70 Certificate, Downgraded to Aa3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-71 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-72 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-73 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-74 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-75 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-76 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-77 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-78 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-79 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-80 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-81 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-82 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-83 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-84 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-85 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-86 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-87 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-88 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-89 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-90 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-91 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-92 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-93 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-94 Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. A-95 Certificate, Downgraded to Aa3, previously on 10/6/08 Aa1
Placed under Review for Possible Downgrade

Cl. A-96 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-97 Certificate, Downgraded to Baa2, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. A-98 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-99 Certificate, Downgraded to Aa3, previously on 10/6/08 Aaa
Placed under Review for Possible Downgrade

Cl. A-PO Certificate, Downgraded to Baa1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

   -- Issuer: Wells Fargo Mortgage Backed Securities 2007-16 Trust

Cl. II-A-1 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-2 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-3 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-4 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-5 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-6 Certificate, Downgraded to A1, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Cl. II-A-7 Certificate, Downgraded to Ba3, previously on 10/6/08
Aa1 Placed under Review for Possible Downgrade

Cl. II-A-PO Certificate, Downgraded to Ba2, previously on 10/6/08
Aaa Placed under Review for Possible Downgrade

Moody's calculates estimated losses for Jumbo RMBS in a two-stage
process.  First, serious delinquencies are projected through late
2009, primarily based upon recent historical performance.  These
projected delinquencies are converted into projected losses using
lifetime roll rates (the probability of transition to default)
averaging 40% for 60-day delinquencies, 75% for delinquencies
greater than 90 days, and 90-100% for foreclosure or REO, and
severity assumptions averaging 35%.

The second step is to determine losses for the remaining life of
the deal, following the projection period.  Depending on a deal's
performance, including delinquency, default, and prepayment rates,
as well as collateral characteristics, such as loan type (fixed or
adjustable), or loan-to-value ratios and geographic concentrations
of remaining current loans, Moody's assumes varying degrees of
slowing in the loss rate (which is measured by loss-to-
liquidation) for the remaining life of the deal.  Typical degrees
of slowing in loss rate after late 2009 range from no slowing at
all to 40% slowing.  To take an example, a deal with very poor
early performance due to relatively high loan-to-value ratios and
dropping regional home values would be expected to see markedly
high delinquency and loss rates for the next year.  But the high
rate of losses may be expected to slow afterwards, as economic
factors and real estate values begin to stabilize, and a slowing
of 20-40% may be used in the projection.  On the other hand, a
deal with stronger early performance that is demonstrating
relative resiliency in the current market environment may not be
expected to have high losses in the near-term, but may be expected
to sustain a similar level of losses for the life of the deal, as
the pool continues to be subject to factors that have more
historically driven prime performance such as borrower life
events, unemployment, and so on.

Loss estimates are subject to variability and, as a result,
realized losses could ultimately turn out higher or lower than
Moody's current expectations.  Moody's will continue to evaluate
performance data as it becomes available and will assess the
pattern of potential future defaults and adjust loss expectations
accordingly if necessary.


X-RITE INC: CFO Discloses Ownership of 38,000 Equity Interest
-------------------------------------------------------------
Bradley J. Freiburger, chief financial officer of X-Rite Inc.,
disclosed in a Form 3 filing with the Securities and Exchange
Commission that he may be deemed to directly own 38,000 shares of
the company's common stock.

On Nov. 1, 2008, the number of outstanding shares of the company's
common stock, par value $.10 per share, was 77,317,883.

X-Rite Incorporated (NASDAQ:XRIT) -- http://www.xrite.com/--
including unit Pantone Inc., develops, manufactures, markets and
supports innovative color solutions through measurement systems,
software, color standards and services. X-Rite serves a range of
industries, including printing, packaging, photography, graphic
design, video, automotive, paints, plastics, textiles, dental and
medical.

                           *     *     *

As reported in the Troubled Company Reporter on Nov. 10, 2008,
Moody's Investors Service upgraded X-Rite, Incorporated corporate
family rating to B3 from Caa1 and upgraded the rating of X-Rite's
first lien senior secured credit facilities to B2 from B3 and the
rating on its second lien term loan to Caa2 from Caa3. The actions
acknowledge the material reduction in financial leverage (debt
reduced to approximately $272 million from pre-equity infusion
levels of $400 million) following the completion of the previously
announced equity infusion and intended sale of life insurance
policies. These ratings actions conclude the review for possible
downgrade that was initiated on May 12, 2008. Moody's also
upgraded the speculative grade liquidity rating to SGL-3 from SGL-
4.


X-RITE INC: Appoints Bradley J. Freiburger as Interim CFO
---------------------------------------------------------
X-Rite, Incorporated appointed Bradley J. Freiburger as interim
chief financial officer of the company.  He will succeed David A.
Rawden, who has served as X-Rite's interim chief financial officer
since May 2008 and is returning to Alix Partners.

Mr. Freiburger has served as X-Rite's vice president and
controller since March 2008, where he has been responsible for the
oversight of budgeting and analysis, tax departments, worldwide
general accounting, credit, accounts payable, consolidations,
financial reporting and SEC reporting functions.  Prior to his
position with X-Rite, Mr. Freiburger held management positions
with Ernst & Young and Arthur Andersen.  Mr. Freiburger is a CPA
and earned a master's degree in business administration from
Michigan State University.

Thomas J. Vacchiano Jr., chief executive officer for X-Rite, said,
"[Mr. Freiburger's] extensive financial background and knowledge
of the current landscape at X-Rite make him uniquely qualified for
this role.  Throughout the recent recapitalization process,
[Mr. Freiburger] worked closely with the company's advisors to
ensure all lender agreements and capital structure needs were
fulfilled.  He has been a great asset to our team and we
appreciate him taking on additional responsibilities."

Mr. Vacchiano added, "On behalf of everyone here at X-Rite, I want
to thank [Mr. Rawden] for his hard work and his significant
contributions to X-Rite.  Our successful completion of a major
recapitalization plan, which provided the company with the
necessary financial flexibility to focus on future opportunities
for the business of color, would have been significantly more
challenging without his leadership and dedication.  We wish him
all the best in his future endeavors."

The company also named William J. Cosgrove as a senior financial
advisor for X-Rite.  The company stated that Mr. Cosgrove is a
nationally recognized leader in the automotive industry with over
40 years of experience.  He retired from Ford Motor Company in
March 2003 after 31 years.  At the time of his retirement,
Mr. Cosgrove was a corporate vice president at Ford and the chief
financial officer and chief of staff for the Premier Automotive
Group, Ford's London-based operating unit for its European luxury
brands - Aston Martin, Jaguar, Land Rover and Volvo.

Mr. Vacchiano concluded, "We are fortunate to have found someone
with [Mr. Cosgrove's] extensive background, and believe he will
serve as a great resource for the company.  We look forward to
working closely with Bill as a key partner of our senior
management team, as he brings a deep understanding of the
financial processes that will help support continuous improvement
in our business performance."

                           About X-Rite

X-Rite Incorporated (NASDAQ:XRIT) -- http://www.xrite.com/--
including unit Pantone Inc., develops, manufactures, markets and
supports innovative color solutions through measurement systems,
software, color standards and services. X-Rite serves a range of
industries, including printing, packaging, photography, graphic
design, video, automotive, paints, plastics, textiles, dental and
medical.

                           *     *     *

As reported in the Troubled Company Reporter on Nov. 10, 2008,
Moody's Investors Service upgraded X-Rite, Incorporated corporate
family rating to B3 from Caa1 and upgraded the rating of X-Rite's
first lien senior secured credit facilities to B2 from B3 and the
rating on its second lien term loan to Caa2 from Caa3. The actions
acknowledge the material reduction in financial leverage (debt
reduced to approximately $272 million from pre-equity infusion
levels of $400 million) following the completion of the previously
announced equity infusion and intended sale of life insurance
policies. These ratings actions conclude the review for possible
downgrade that was initiated on May 12, 2008. Moody's also
upgraded the speculative grade liquidity rating to SGL-3 from SGL-
4.


YELLOWSTONE MOUNTAIN: U.S. Trustee Forms 9-Member Creditors Panel
-----------------------------------------------------------------
Robert D. Miller, Jr., the United States Trustee for Region 18,
appointed nine creditors to serve on an Official Committee of
Unsecured Creditors for Yellowstone Mountain Club LLC and its
debtor-affiliates.

The creditors committee members are:

   1) Jorge Jasson
      c/o Robins, Kaplan, Miller & Ciresi, LLP
      2800 LaSalle Plaza
      800 LaSalle Avenue
      Minneapolis, MN 55402-2015
      Tel: (612) 349-8282

   2) William G. Griffon III
      1901 Bearberry Lane
      Asheville, NC 28803
      Tel: (828) 450-5281

   3) Yoav Rubinstein
      500 Queens Quay West, Suite 1101 E
      Toronto, ON M 5v 3K
      Tel: (203) 247-1850

   4) NorthWestern Corporation Person
      c/o Michael E. Lewis
      40 East Broadway
      Butte, MT 59701
      Tel: (406) 497-2154

   5) Story Distributing Company
      c/o Doug Alexander
      P.O. Box 1201
      Bozeman, MT 59771
      Tel: (406) 587-0702

   6) Wilbur-Ellis Company
      c/o Bob Gaulke
      1325 8th Ave. N.
      Great Falls, MT 59401
      Tel: (406) 452-2619

   7) Garlington, Lohn & Robinson, PLLP
      c/o Steven R. Brown
      199 West Pine
      P.O. Box 7909
      Missoula, MT 59807-7909
      Tel: (406) 523-2500

   8) Cowboy Equipment, LLC
      Roland Schumacher
      80 Shire Trail
      Bozeman, MT 59718
      Tel: (406) 587-0728

   9) Curtco Robb Media, LLC
      c/o Chris Sabian
      P.O. Box 6167
      Malibu, CA 90264
      Tel: (310) 589-7711

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense.  They may investigate the Debtor's business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

                    About Yellowstone Mountain

Headquartered in Rancho, Mirage, Yellowstone Mountain Club LLC is
a private ski and golf community about 20 miles from Yellowstone
National Park.  The company provides both residential units for
sale on the development property along with membership interests.
The company and three of its affiliates filed for Chapter 11
protection on Nov. 10, 2008 (Bankr. D. Mon. Lead Case No.
08-61570).  James A. Ptten, Esq., at Patten, Peterman, Bekkedahl &
Green PLLC, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed assets and debts between $100 million and $500 million
each.


YELLOWSTONE MOUNTAIN: Can Access $19.75 Mil. CrossHarbor Facility
-----------------------------------------------------------------
The Deal's Ben Fidler reports that the Hon. Ralph Kirscher of the
United States Bankruptcy Court for the District of Montana
authorized Yellowstone Mountain Club LLC to obtain, on a final,
basis, up to $19.75 million in postpetition financing from
CrossHarbor Capital Partners LLC.

Mr. Fidler says Judge Kirscher has not issued a final order as of
Monday.  There were certain modifications made to the financing
but details were not immediately available, Mr. Fidler notes.

CrossHarbor Capital's facility, which will mature on April 30,
2009, will incur interest at 15%, Mr. Fidler says.  The lender
will be paid a 3% commitment fee, he adds.

In addition, CrossHarbor Capital required the Debtor to file a
reorganization plan by Feb. 13, 2009, and have it confirmed by
March 31, 2009, Mr. Fidler says.  Otherwise, the Debtor are
compelled to sell its assets by April 30, 2009, pursuant to
Section 363 of the Bankruptcy Code, relates Mr. Fidler.

According to the Deal, CrossHarbor's facility primes original DIP
lender Credit Suisse Group who provided the Debtor about
$4.45 million in postpetition financing with interest at 15%.

                    About Yellowstone Mountain

Headquartered in Rancho, Mirage, Yellowstone Mountain Club LLC is
a private ski and golf community about 20 miles from Yellowstone
National Park.  The company provides both residential units for
sale on the development property along with membership interests.
The company and three of its affiliates filed for Chapter 11
protection on Nov. 10, 2008 (Bankr. D. Mon. Lead Case No.
08-61570).  James A. Ptten, Esq., at Patten, Peterman, Bekkedahl &
Green PLLC, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed assets and debts between $100 million and $500 million
each.


* Fitch: U.S. Gaming Industry Will Remain Under Pressure in 2009
----------------------------------------------------------------
Following one of its most challenging years in recent history, the
U.S. gaming industry will remain under significant pressure in
2009, with a recovery unlikely until 2010, according to Fitch
Ratings.

With a view that the global economy is experiencing a severe
recession, Fitch is forecasting the steepest GDP decline in the
major advanced economies since World War II.  The financial
profile of the U.S. consumer is expected to remain stressed in
2009, as weak employment trends coupled with depressed real estate
and equity prices continue to undermine consumer confidence.  With
net worth and personal income under pressure, and continued tight
household credit conditions, Fitch expects U.S. consumer spending
to decline a sharp 1.6% in 2009 and remain soft into 2010.  These
negative pressures will likely outweigh benefits to consumers from
the decline in energy and commodity prices, in Fitch's view.

The gaming industry experienced a greater impact from the
difficult financial conditions for consumers in 2008 than many
investors expected.  Generally, gaming spend per visit has been
affected more than visitation levels, which can be bolstered by
promotions.  Considering the combined effect of recent declines in
gas prices, and reductions in airline capacity and international
demand, Fitch believes regional/local markets will fare better
than destination markets, such as the Las Vegas Strip.

In its 2008 Outlook, Fitch indicated that it expected the gaming
industry to be more economically sensitive than in previous
downturns, which was clearly exhibited in the past year.
Therefore, Fitch's macro-economic outlook weighs heavily on its
2009 gaming industry outlook.  The main themes and questions that
will affect gaming credit profiles and ratings in 2009 include:

   -- Credit Markets:

Given the capital intensity of the business and refinancing risk,
corporate gaming operators are heavily reliant on access to
external capital sources.  Will the credit markets begin to thaw
after the New Year?  If so, to what degree?  A number of issuers
are at increased risk of bumping up against covenants in 2009, and
will be approaching credit facility expirations in 2010-2011.
Therefore, the bank lending climate will become increasingly
important as 2009 progresses.  Harrah's and Station attempted to
address near-term maturities and/or heavy LBO-related debt loads
with debt exchanges, but Station was unsuccessful and Harrah's has
yet to complete the transaction.  MGM and Ameristar are other
issuers with notable refinancing risk that will become more
concerning as 2009 progresses, although MGM has recently enhanced
its liquidity profile with a secured note issuance and an
announced asset sale;

   -- Depth and Length of Recession:

Will the U.S. economy begin to recover around mid-year 2009, or
will the recession extend into late 2009 or 2010?  Will a consumer
spending recovery lag the broader economy?  As the industry begins
to anniversary the 2008 weakness, will pressure on operating
results moderate?  Or will there be another step down, fueled by
the weak employment trends filtering through the economy?  With
unemployment expected to rise significantly throughout 2009, Fitch
believes that a gaming industry recovery is unlikely until 2010,
particularly if capital markets remain weak.  Continued weak
capital markets and rising unemployment would lead to sustained
pressure on retiree investment portfolios and consumer confidence,
resulting in constrained consumer discretionary spending.
Therefore, Fitch's current Outlook incorporates operating declines
in 2009 at best similar to 2008 on a same-store basis;

   -- Supply Absorption:

How will upcoming new supply be absorbed in Las Vegas amid weak
demand? A significant amount of supply is planned to be added to
the LV Strip market over the next 12-18 months including Wynn
Encore, the Caesars Palace expansion, CityCenter, and
Fontainebleau.  Regarding the impact of the increase in supply,
Fitch believes Wynn is extremely well positioned, but remains
cautious on the credit profiles of MGM, LVS, and Harrah's . In
addition, the Las Vegas Locals market needs to absorb the Eastside
Cannery, Aliante Station, and M Resort supply additions, which
will have a notable impact on both Station and Boyd.

2009 Credit Outlook:

Fitch believes that a prolonged U.S. recession that extends beyond
2009 and into 2010, coupled with an extremely tight credit
environment, will put significant additional pressure on the
balance sheets of already stressed corporate gaming operators.
There was a significant tick up in high yield (HY) gaming defaults
in 2008, with five issuers (French Lick, Tropicana, Greektown,
Herbst, and Majestic Star) defaulting on $2.3 billion of HY market
principal through November 2008.  Three other issuers (Trump,
Station, and Harrah's) are on the cusp of defaulting on debt
obligations.

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.  While Native American gaming
operators are feeling similar pressure on operating trends, the
issuers in Fitch's rated portfolio generally maintain more
conservative financial profiles relative to rating levels, so
those issuers will have somewhat more ability to maintain ratings
in 2009.  Due to more stable free cash flow profiles, stronger
internally generated liquidity positions, a less capital intensive
business model, and more conservative balance sheet management,
gaming suppliers have the most attractive overall credit profiles
and greatest ability to weather the downturn.

Continued Focus On Liquidity:

Given the rapid deterioration of demand and highly leveraged
balance sheets, the liquidity profiles of corporate gaming
operators will remain a focus until credit markets ease and the
economy stabilizes.  Over the course of 2008, numerous gaming
operators increasingly pulled back on planned expansion projects,
reducing expected capital expenditures in an effort to improve
free cash flow profiles.  As the credit crisis worsened, some
companies went further and slashed upcoming maintenance capex
budgets and reduced labor forces.  While cutting maintenance capex
levels provides some short-term liquidity relief, if sustained too
long, it will be detrimental to longer-term credit profiles by
compromising asset quality.

The bank lending environment will be a key factor as 2009
progresses, as a number of issuers are in danger of bumping up
against credit facility covenants.  In addition, a number of
corporate gaming credit facilities expire in the late 2010-2011
time frame.  Those companies will want to avoid those liabilities
becoming current, which means that a number of new agreements are
likely to be entered into by the end of 2009/early 2010.  It is
clear the terms will be much more costly than those of the
existing agreements that were entered into during a more
accommodating credit environment.  In addition, Fitch believes
there may be downward pressure on the size of the commitments as
investment banks seek to limit their own balance sheet exposure,
as was the case in Mohegan's credit facility amendment on Dec. 10.
Downsized commitments will contribute to a slower growth rate for
the industry over the next three-to-five years.

Fitch published a sector liquidity overview in a report on Oct. 23
(Liquidity Focus: U.S. Gaming & Lodging) and follow-up comment on
Nov. 14 (Fitch Provides Update on Recent Gaming Liquidity Trends).
Of the seven issuers that were noted with weak or weak-to-moderate
liquidity profiles, three companies (Trump, Station, and Harrah's)
are now on the cusp of defaulting on their obligations. Two
others, LVS and MGM, announced significant capital raising
transactions since Fitch's initial report.  LVS completed a highly
dilutive $2.1 billion equity sale, while MGM issued a $750 million
secured note sale priced to yield 15%, and also announced a
$775 million asset sale. The remaining two issuers, Ameristar and
Pinnacle, have less immediate needs and minimal upcoming bond
maturities, but will likely need to address potential covenant
violations with their banks in 2009.

Distressed Transactions:

Given the pressure on operating cash flow, current depressed debt
prices, and limited refinancing options, distressed transactions
are likely to continue.  Harrah's and Station have been
negotiating with bondholders regarding the terms of distressed
debt exchanges (DDEs), which is one of three definitions of
default according to Fitch's published criteria (the other two
include failure to make an interest/principal payment, or a
bankruptcy filing or liquidation).  Station announced on Dec. 15
that conditions of the exchange would not be met, so it terminated
the exchange offer. Harrah's exchange offer expires on Dec. 19,
2008.

Although Native American issuers maintain generally more
conservative financial profiles than corporate gaming operators,
their credit profiles have also come under pressure due to the
macro economic environment.  To date, Fitch is unaware of a
distressed workout situation occurring in relation to the bonds of
a Native American gaming issuer, and believes that a DDE would be
the most likely outcome of a workout scenario.  Concurrent with
this outlook, Fitch published, 'Workout Scenario Considerations
for Creditors of Native American Gaming Operators,' dated Dec. 16
and available at 'http://www.fitchratings.com'.

To the extent that credit markets remain tight, Fitch believes
there will be increasing pressure for companies to engage in both
casino and non-operating asset sales in 2009.  However, Fitch
believes potential buyers are limited and credit markets
conditions would make it difficult to complete a transaction.
Despite that, MGM announced on Dec. 15, 2008, that it is selling
Treasure Island to Phil Ruffin, who previously sold the New
Frontier site and is able to provide largely cash financing for
the transaction.  The $775 million purchase price will consist of
$500 million in cash at closing and $275 million in secured notes.
Penn National and Boyd Gaming, with their relatively more
attractive balance sheets, may be able to consider operating asset
purchases early in the credit stabilization cycle.  Wynn also
maintains an attractive liquidity profile and clearly has the
balance sheet to be a buyer.  However, Fitch believes that the
company may be more inclined to purchase attractive real estate
for future development, rather than operating assets that are not
a strategic fit with its brand.

Market Outlook:

Same-store gaming revenues in many large jurisdictions are down in
the mid-to-high single-digit range so far in 2008, and due to
operating leverage, property same-store cash flow declines can be
greater.  The declines since September are notably worse than
year-to-date figures and Fitch believes that gaming operating
trends are likely to remain weak well into 2009.  Fitch believes
it is clear that there will be significant operating pressure in
the first half of 2009.  Although year-over-year comparisons will
get easier in the second-half of 2009, Fitch does not believe
there will be a meaningful gaming recovery until 2010.
Specifically, Fitch's current Outlook incorporates operating
declines in 2009 at best similar to 2008 on a same-store basis.

The largest commercial markets, Las Vegas and Atlantic City, are
experiencing some of the most significant demand pressure, which
Fitch expects to continue into 2009.  Las Vegas Strip revenues
have declined 8.7% year-to-date through October, while Atlantic
City revenues have declined 6.7% year-to-date through November.
In addition to the consumer-driven demand pressures, those markets
are facing additional challenges from competitive supply
increases.

The largest Native American markets of California and Connecticut
are also experiencing significant demand pressure.  In addition,
some Californian Native American operators are struggling to
offset increased fees associated with amended state Class III
gaming compacts signed in 2008 that allowed additional supply.
Certain regions have held up better, such as the mid-south, where
high energy prices for much of the year supported that regional
economy.  However, the recent pullback in energy prices may
pressure the region in upcoming months.  Other less mature markets
in the northeast, specifically Pennsylvania, New York, and Rhode
Island, continued to grow in 2008, resulting in notable
competitive pressure on the more mature markets of Atlantic City
and Connecticut.

Internationally, growth in Macau will moderate in 2009, following
several years of extremely high growth that enabled it to surpass
the Las Vegas Strip as the world's largest market.  The government
has recently implemented visa restrictions and LVS has pulled back
on Cotai Strip development plans.  In addition, the opening of the
Singapore market in 2009-2010 will likely have an impact on Macau.
In terms of the operating environment, Singapore has a lower tax
rate and much more limited competition than Macau, which provides
incentive for LVS to market its Singapore property more heavily
than Macau to its regional customers.

Regulatory Environment in 2009:

State budgets are likely to be increasingly under pressure in the
next few years, which historically has provided governments with
incentive to consider gaming as a revenue source for budget
shortfalls.  However, legislators are likely to be less optimistic
regarding gaming taxes as a lucrative revenue stream.  Gaming tax
revenues have not met expectations in a number of jurisdictions
that recently legalized or expanded gaming.  In addition, with
unfavorable credit markets and struggling corporate operators,
there is likely to be limited appetite for funding new
developments.  Investment appetite will be further dampened if
governments continue to seek extremely high tax rates of 50%+,
which has been the case in the states that most recently legalized
gaming such as Maryland, New York and Pennsylvania.

For example, there has been very limited recent interest from
major corporate gaming operators for Atlantic City's Bader Field
development and Illinois' 10th gaming license.  Kansas passed
gaming legislation in 2007 and opened the bidding process for
commercial casino developments, but the ensuing economic turmoil
contributed to a number of developers withdrawing their bids.  The
state is now likely to rebid some licenses with more liberal
rules.

Native American expansion opportunities may be more likely than
commercial expansion, as recently implemented revenue sharing
rates under Class III gaming compacts have generally been more
reasonable than commercial gaming tax rates for new jurisdictions.
In addition, Fitch believes that gaming expansions may be more
likely a result of relaxed gaming regulations.

In 2009, regulatory changes in certain markets will provide some
credit support to certain issuers.  Regional operators such as
Ameristar, Isle of Capri, Pinnacle and Penn National will benefit
from the recent easing of gaming restrictions in Missouri and
Colorado.  Missouri recently eliminated the $500 loss limit in
exchange for a 1% point increase in the tax rate.  Colorado raised
its betting limit to $100 from $5 and increased daily hours of
operation to 24 from 18.  The Seminole Tribe of Florida continues
to implement table games at its properties pursuant to the Class
III compact it signed in 2007, which has helped offset demand
pressure.  However, the Florida state legislature has yet to
approve the terms of the compact.

Smoking bans remain a secular challenge for the industry, as
political pressure mounts in states across the nation.  In 2008,
gaming revenues in Illinois, Colorado, and New Jersey were
affected by smoking bans.  Gaming operators received a temporary
reprieve in New Jersey, where a full ban was recently delayed by a
year in lieu of maintaining a partial ban.  Although pressure has
increased to enact similar restrictions at Native American
casinos, those operators maintain more flexibility due to their
sovereign status under U.S. law.

Sub-Sector Outlooks:

With respect to sub-sector outlooks, Fitch is providing both a
Fundamental Outlook and a Rating Outlook.  The Fundamental Outlook
indicates the operating trends at the sub-sector level, and can
differ from the Rating Outlook.  The Rating Outlook incorporates a
level of operating deterioration or improvement, and considers the
unique credit profiles of the issuers relative to the Fundamental
Outlook.  The Rating Outlook is largely based on the published
Outlooks in Fitch's rated portfolio.

Corporate Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Negative

The weak fundamental trends combined with generally high leverage
and tight liquidity provides the basis for Fitch's negative
outlook on corporate gaming operators in terms of both operating
fundamentals and credit ratings.

Native American Gaming Operators

   -- Fundamental Outlook: Negative
   -- Rating Outlook: Stable-to-Negative

While Native American gaming operators are feeling similar
pressure on operating trends, the issuers in Fitch's rated
portfolio generally maintain more conservative financial profiles
relative to rating levels, and will have more ability to maintain
ratings in 2009.

Gaming Suppliers

   -- Fundamental Outlook: Stable
   -- Rating Outlook: Stable-to-Positive

There is pressure on gaming operators' maintenance capital
budgets, and the server-based replacement cycle has been slower-
than-anticipated.  However, the slot replacement cycle was already
at a trough, so the demand reduction will be limited, in Fitch's
view, and demand will be supported from new casino openings.  The
Positive Rating Outlook is based on Bally's strong market share
gains since its operating turnaround, and the potential removal of
certain credit-specific rating issues.

SELECT U.S. GAMING ISSUERS

Corporate Gaming Operators (IDR/Outlook)

   -- Ameristar Casinos, Inc. (Not Publicly Rated);
   -- Boyd Gaming Corp. ('BB-'/Outlook Stable);
   -- Harrah's Entertainment, Inc. (Not Publicly Rated);
   -- Isle of Capri Casinos, Inc. (Not Publicly Rated);
   -- Las Vegas Sands Corp. (Not Publicly Rated);
   -- MGM MIRAGE ('BB-'/Outlook Negative);
   -- Penn National Gaming, Inc. (Not Publicly Rated)
   -- Pinnacle Entertainment ('B'/Outlook Negative)
   -- Station Casinos, Inc. (Not Publicly Rated);
   -- Trump Entertainment Resorts, Inc. (Not Publicly Rated);
   -- Wynn Resorts Ltd. (Not Publicly Rated).

Native American Gaming Operators (Issuer Rating/Outlook)

   -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook
      Negative);

   -- Cow Creek Band of Umpqua Tribe of Indians, OR (Not Publicly
      Rated);

   -- CTCLUSI: Confederated Tribes of the Coos, Lower Umpqua and
      Siuslaw Indians, OR (Not Publicly Rated);

   -- Kalispel Tribe (Not Publicly Rated);

   -- Laguna Development Corp., NM ('BB-'/Outlook Stable);

   -- Mashantucket Pequot Tribal Nation (Not Publicly Rated);

   -- Mohegan Tribal Gaming Authority (Not Publicly Rated);

   -- Morongo Band of Mission Indians, CA (Not Publicly Rated);

   -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable);

   -- Quechan Tribe of the Fort Yuma Indian Reservation ('CCC'/
      Negative Watch);

   -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook
      Stable);

   -- Santa Rosa Rancheria Tachi Yokut Tribe, CA (Not Publicly
      Rated);

   -- Seminole Tribe of Florida ('BBB-'/Outlook Stable);

   -- Seneca Gaming Corp. (Not Publicly Rated).

Gaming Suppliers (IDR/Outlook)

   -- Bally Technologies ('BB-'/Outlook Positive)
   -- International Game Technology (Not Publicly Rated)
   -- WMS Industries, Inc. (Not Publicly Rated)


* Moody's Cuts Ratings on 348 Notes Issued by 166 SF CDOs in 2006
-----------------------------------------------------------------
Moody's Investors Service has downgraded its ratings of 348 Notes
issued by certain collateralized debt obligation transactions
backed by structured finance securities, each of which originated
in 2006.

Moody's explained that the rating actions taken are the result of
the application of revised and updated key modelling parameter
assumptions that Moody's uses to rate and monitor ratings of SF
CDOs.  The revisions affect the three key parameters in Moody's
model for rating SF CDOs: asset correlation, default probability
and recovery rate.  Moody's announced the changes to these
assumptions in a press release titled "Moody's Updates its Key
Assumptions for Rating Structured Finance CDOs," published on
December 11, 2008.

Moody's noted that most of the lowered ratings remain on review
for possible downgrade due to the continuing weakness in the
performance of and outlook for structured finance securities that
back SF CDOs.

Moody's anticipates that in the coming days it will announce
additional rating actions applicable to SF CDOs of earlier
vintages as the revised assumptions are applied to those
transactions.

The rating actions are:

Silver Elms CDO plc

Class Description: $490,000,000 Class A-1a Floating Rate Notes,
Due 2051

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 5/29/2008

Class Description: $133,000,000 Class A-1b Delayed Draw Floating
Rate Notes, Due 2051

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 5/29/2008

Caldecott CDO 1, Ltd.

Class Description: U.S.$200,000,000 Class A-1 First Priority
Senior Secured Floating Rate Notes Due 2048

     Current Rating: Caa2, under review for possible downgrade
     Prior Rating: B2, under review for possible downgrade
     Prior Rating Date: 6/2/2008

Ischus Synthetic ABS CDO 2006-2 Ltd.

Class Description: U.S. $575,000,000 Class A-1LA Investor Swap

     Current Rating: B3, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 4/30/2008

Pacific Pinnacle CDO Ltd

Class Description: U.S.$800,000,000 Class A-1LA Floating Rate
Notes Due January 2052

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 8/26/2008

Class Description: Class X Interest Only Notes Due January 2019

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 8/26/2008

Lunar Funding V Plc

Class Description: Series 2006-27 Secured Floating Rate Credit-
linked Notes due 2052-1

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 4/29/2008

Sheffield CDO II, Ltd.

Class Description: U.S.$ 9,000,000 Class S Senior Secured Floating
Rate Notes due 2051

     Current Rating: Aaa, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 12/21/2006

Class Description: U.S.$169,300,000 Class A-1 Variable Funding
Notes due 2051

     Current Rating: A1, under review for possible downgrade
     Prior Rating: Aa1, under review for possible downgrade
     Prior Rating Date: 10/6/2008

Class Description: U.S.$32,500,000 Class A-2 Senior Secured
Floating Rate Notes due 2051

     Current Rating: A3, under review for possible downgrade
     Prior Rating: Aa3, under review for possible downgrade
     Prior Rating Date: 10/6/2008

Class Description: U.S.$32,500,000 Class A-3 Senior Secured
Floating Rate Notes due 2051

     Current Rating: Baa1, under review for possible downgrade
     Prior Rating: A1, under review for possible downgrade
     Prior Rating Date: 10/6/2008

Class Description: U.S.$31,600,000 Class B Senior Secured Floating
Rate Notes due 2051

     Current Rating: Ba2, under review for possible downgrade
     Prior Rating: Baa2, under review for possible downgrade
     Prior Rating Date: 10/6/2008

Triaxx Prime CDO 2006-2, Ltd.

Class Description: U.S.$1,500,000,000 Class A-1A First Priority
Senior Secured Floating Rate Notes Due October 2039

     Current Rating: Aa1, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 12/21/2006

Class Description: U.S.$1,499,950,000 Class A-1B1 First Priority
Senior Secured Floating Rate Notes Due October 2039

     Current Rating: Aa2, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 12/21/2006

Class Description: U.S.$1,499,950,000 Class A-1B2 First Priority
Senior Secured Floating Rate Notes Due October 2039

     Current Rating: Aa2, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 12/21/2006

Class Description: U.S.$100,000 Class A-1BV First Priority Senior
Secured Floating Rate Notes Due October 2039

     Current Rating: Aa2, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 12/21/2006

Class Description: U.S.$400,000,000 Class A-2 Second Priority
Senior Secured Floating Rate Notes Due October 2039

     Current Rating: Aa3, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 12/21/2006

Class Description: U.S.$60,000,000 Class B Third Priority Senior
Secured Floating Rate Notes Due October 2039

     Current Rating: A2, under review for possible downgrade
     Prior Rating: Aa2
     Prior Rating Date: 12/21/2006

Class Description: U.S.$20,000,000 Class X Fourth Priority Junior
Secured Amortizing Deferrable Floating Rate Notes Due October 2039

     Current Rating: Baa1, under review for possible downgrade
     Prior Rating: A1, under review for possible downgrade
     Prior Rating Date: 10/20/2008

Class Description: U.S.$20,000,000 Class C Fifth Priority Junior
Secured Deferrable Floating Rate Notes Due October 2039

     Current Rating: Baa2, under review for possible downgrade
     Prior Rating: A2, under review for possible downgrade
     Prior Rating Date: 10/20/2008

Barramundi CDO I Ltd.

Class Description: Up to U.S.$540,400,000 Class A-1 Senior Secured
Floating Rate Notes Due December 2051

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$56,000,000 Class A-2 Senior Secured
Floating Rate Notes Due December 2051

     Current Rating: Ca
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$76,000,000 Class B Senior Secured Floating
Rate Notes Due December 2051

     Current Rating: Ca
     Prior Rating: Caa3, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Calculus ABS Resecuritization Trust, Series 2006-5

Class Description: US $15,000,000 Calculus ABS Resecuritization
Trust, Series 2006-5 Units

     Current Rating: Baa3, under review for possible downgrade
     Prior Rating: A3, under review for possible downgrade
     Prior Rating Date: 9/25/2008

Calculus ABS Resecuritization Trust, Series 2006-6

Class Description: US $6,670,000 Calculus Resecuritization Trust
Series 2006-6 Units

     Current Rating: Baa1, under review for possible downgrade
     Prior Rating: A1, under review for possible downgrade
     Prior Rating Date: 9/25/2008

HSPI Diversified CDO Fund I, Ltd.

Class Description: U.S. $22,900,000 Class S Senior Secured
Floating Rate Notes due 2014

     Current Rating: B1, under review for possible downgrade
     Prior Rating: Ba1, under review for possible downgrade
     Prior Rating Date: 9/2/2008

Blue Edge ABS CDO Ltd.

Class Description: Up to U.S.$1,076,250,000 Class A-1 Floating
Rate Notes Due 2050

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 6/2/2008

Fortius II Funding, Ltd.

Class Description: U.S.$ 12,700,000 Class S Floating Rate Notes
Due 2010

     Current Rating: Baa3, under review for possible downgrade
     Prior Rating: A3, under review for possible downgrade
     Prior Rating Date: 10/15/2008

Mantoloking CDO 2006-1, Ltd.

Class Description: U.S.$375,000,000 Class A-1 First Priority
Senior Secured Floating Rate Notes due 2046

     Current Rating: B2, under review for possible downgrade
     Prior Rating: Ba2, under review for possible downgrade
     Prior Rating Date: 10/6/2008

Orion 2006-2, Ltd.

Class Description: U.S.$34,000,000 Class S Senior Secured Floating
Rate Notes Due 2014

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 8/26/2008

Strata Trust, Series 2006-24

Class Description: U.S. $55,000,000 Floating Rate Notes due
December 21, 2016

     Current Rating: A2, under review for possible downgrade
     Prior Rating: Aa2, under review for possible downgrade
     Prior Rating Date: 9/29/2008

West Trade Funding CDO II Ltd.

Class Description: U.S.$900,000,000 Class A-1 First Priority
Senior Secured Floating Rate Delayed Draw Notes due 2051

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 5/29/2008

Davis Square Funding VII, Ltd.

Class Description: U.S. $ 20,000,000 Class S Floating Rate Notes
Due 2015

     Current Rating: Aaa, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 1/16/2007

Nassau CDO I, Ltd.

Class Description: U.S.$600,000,000 Class A-1A First Priority
Senior Secured Delayed Draw Floating Rate Notes Due 2051

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 6/5/2008

Class Description: U.S.$600,000,000 Class A-1B First Priority
Senior Secured Floating Rate Notes Due 2051

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 6/5/2008

Citius II Funding, Ltd.

Class Description: Up to U.S.$1,800,000,000 aggregate Principal
Component of commercial paper notes/Class A ST Notes Due 2047

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: Ba1, under review for possible downgrade
     Prior Rating Date: 4/23/2008

Abacus 2006-HGS1, Ltd. Class A-1

Class Description: U.S.$99,000,000 Class A-1 Variable Rate Notes,
Due 2039

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 6/9/2008

Centre Square CDO, Ltd.

Class Description: U.S.$150,000,000 Class A-1 First Priority
Senior Secured Floating Rate Delayed Draw Notes due 2051

     Current Rating: C
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 6/3/2008

Class Description: U.S.$97,500,000 Class A-2A Second Priority
Senior Secured Floating Rate Notes due 2051

     Current Rating: C
     Prior Rating: Ca
     Prior Rating Date: 6/3/2008

Class Description: U.S.$97,500,000 Class A-2B Second Priority
Senior Secured Floating Rate Notes due 2051

     Current Rating: C
     Prior Rating: Ca
     Prior Rating Date: 6/3/2008

Class Description: U.S.$25,000,000 Class A-3 Third Priority Senior
Secured Floating Rate Notes due 2051

     Current Rating: C
     Prior Rating: Ca
     Prior Rating Date: 6/3/2008

Class Description: U.S.$50,000,000 Class B Fourth Priority Senior
Secured Floating Rate Notes due 2051

     Current Rating: C
     Prior Rating: Ca
     Prior Rating Date: 4/3/2008

Class Description: U.S.$22,000,000 Class C Fifth Priority Senior
Secured Floating Rate Notes due 2051

     Current Rating: C
     Prior Rating: Ca
     Prior Rating Date: 4/3/2008

BFC Ajax CDO Ltd.

Class Description: U.S.$275,000,000 Class A Senior Floating Rate
Notes Due 2046

     Current Rating: B2, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 6/25/2008

Class Description: U.S.$15,000,000 Class B Floating Rate Notes Due
2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 5/23/2008

Pine Mountain CDO II Ltd.

Class Description: $392,750,000 Class A Floating Rate Notes Due
November 30, 2046

     Current Rating: Ca
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 5/18/2008

Buchanan 2006-I Segregated Portfolio

Class Description: U.S.$115,000,000 Variable Floating Rate Notes
Due 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Baa2, under review for possible downgrade
     Prior Rating Date: 4/24/2008

Buchanan 2006-II Segregated Portfolio

Class Description: U.S.$72,000,000 Variable Floating Rate Notes
Due 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Ba1, under review for possible downgrade
     Prior Rating Date: 4/24/2008

Buchanan 2006-III Segregated Portfolio

Class Description: U.S.$10,000,000 Variable Floating Rate Notes
Due 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 4/24/2008

Buchanan 2006-IV Segregated Portfolio

Class Description: U.S.$4,000,000 Variable Floating Rate Notes Due
2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 4/24/2008

Orient Point CDO II, Ltd.

Class Description: U.S.$1,350,000,000 Class A First Priority
Senior Secured Floating Rate Notes due 2051

     Current Rating: B3, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 6/4/2008

AMP ABX 2006-1, Ltd.

Class Description: U.S.$65,000,000 Notes Due 2036

     Current Rating: A3, under review for possible downgrade
     Prior Rating: Aa3, under review for possible downgrade
     Prior Rating Date: 9/25/2008

IXIS ABS CDO 3 Ltd.

Class Description: U.S.$16,000,000 Class X Notes Due December 2013

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 5/30/2008

Class Description: U.S.$76,000,000 Class A-1LB Floating Rate Notes
Due December 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 5/30/2008

Class Description: Class A-1LA Investor Swap

     Current Rating: Caa2, under review for possible downgrade
     Prior Rating: B2, under review for possible downgrade
     Prior Rating Date: 5/30/2008

IMAC CDO 2006-1, Ltd.

Class Description: U.S.$75,000,000 Class A-1 First Priority Senior
Secured Floating Rate Delayed Draw Notes due 2051

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 5/30/2008

Istana High Grade ABS CDO I, Ltd.

Class Description: U.S.$600,000,000 Class A-1 First Priority
Delayed Draw Floating Rate Notes Due 2048

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 10/27/2008

House of Europe Funding V PLC

Class Description: EUR 200,000,000 Class A1 House of Europe
Funding V PLC Delayed Draw Note due 2090

     Current Rating: Aa3, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 11/3/2006

Class Description: EUR 580,000,000 Class A1 House of Europe
Funding V PLC Floating Rate Notes due 2090

     Current Rating: Aa3, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 11/3/2006

Class Description: EUR 70,000,000 Class A2 House of Europe Funding
V PLC Floating Rate Notes due 2090

     Current Rating: A2, under review for possible downgrade
     Prior Rating: Aa2, under review for possible downgrade
     Prior Rating Date: 10/9/2008

Class Description: EUR 70,000,000 Class A3-a House of Europe
Funding V PLC Floating Rate Notes due 2090

     Current Rating: Ba2, under review for possible downgrade
     Prior Rating: Baa2, under review for possible downgrade
     Prior Rating Date: 10/9/2008

Class Description: EUR 15,000,000 Class A3-b House of Europe
Funding V PLC Fixed Rate Notes due 2090

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3, under review for possible downgrade
     Prior Rating Date: 10/9/2008

Class Description: EUR 21,000,000 Class B House of Europe Funding
V PLC Floating Rate Notes due 2090

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 10/9/2008

Fort Duquesne CDO 2006-1 Ltd.

Class Description: U.S.$11,000,000 Class X Senior Secured Notes
Due 2046

     Current Rating: B3, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 10/27/2008

Class Description: U.S.$450,000,000 Class A-1A Senior Secured
Floating Rate Notes Due 2046

     Current Rating: Baa1, under review for possible downgrade
     Prior Rating: A1, under review for possible downgrade
     Prior Rating Date: 10/27/2008

Grand Avenue CDO II, Ltd.

Class Description: U.S.$1,128,000,000 Class A-1A Floating Rate
Notes Due 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 6/2/2008

Kent Funding III, Ltd.

Class Description: U.S.$780,000,000 Class A-1 First Priority
Senior Secured Floating Rate Delayed Draw Notes due 2047

     Current Rating: Ba1, under review for possible downgrade
     Prior Rating: A1, under review for possible downgrade
     Prior Rating Date: 5/30/2008

Class Description: U.S.$325,000,000 Class A-2 Second Priority
Senior Secured Floating Rate Notes due 2047

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 5/30/2008

Halcyon Securitized Products Investors ABS CDO I Ltd.

Class Description: Class A-1 Senior Secured Floating Rate Notes,
due 2050

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3, under review for possible downgrade
     Prior Rating Date: 5/18/2008

Class Description: Class A-2 Senior Secured Floating Rate Notes,
due 2050

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 5/18/2008

Ixion PLC HELD 2006-1

Class Description: Series 1 HELD 2006 - 1 USD 242,000,000 Floating
Rate Credit Linked Secured Notes due 2041

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 4/23/2008

Calculus ABS Resecuritization Trust, Series 4

Class Description: US $15,000,000 Calculus ABS Resecuritization
Trust, Series 2006-4 Units

     Current Rating: Baa3, under review for possible downgrade
     Prior Rating: A3, under review for possible downgrade
     Prior Rating Date: 9/26/2008

ABACUS 2006-15, Ltd. (Class A-2)

Class Description: U.S.$70,000,000 Class A-2 Variable Rate Notes,
Due 2045

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 4/29/2008

Parapet 2006 Ltd.

Class Description: U.S.$137,500,000 Class A Floating Rate Notes
Due 2045

     Current Rating: B3, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 5/30/2008

LOCHSONG, LTD.

Class Description: U.S.$ 12,100,000 Class S Floating Rate Notes
Due 2010

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 9/3/2008

Pyxis ABS CDO 2006-1 Ltd.

Class Description: Senior Swap

     Current Rating: Ca
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 5/18/2008

Altius III Funding, Ltd.

Class Description: U.S.$ 17,500,000 Class S Floating Rate Notes
Due 2014

     Current Rating: Aaa, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 9/29/2006

Class Description: U.S.$ 220,000,000 Class A-1a Floating Rate
Notes Due 2041

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 10/23/2008

Class Description: U.S.$ 499,950,000 Class A-1b-1F Floating Rate
Notes Due 2041

     Current Rating: Ba1, under review for possible downgrade
     Prior Rating: Baa1, under review for possible downgrade
     Prior Rating Date: 10/23/2008

Class Description: U.S.$ 300,000,000 Class A-1b-2 Floating Rate
Notes Due 2041

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 10/23/2008

Class Description: U.S.$ 250,000,000 Class A-1b-3 Floating Rate
Notes Due 2041

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 10/23/2008

Class Description: U.S.$ 100,000 Class A-1b-v Floating Rate Notes
Due 2041

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 10/23/2008

Wadsworth CDO, Ltd.

Class Description: U.S.$800,000,000 Class A-1A Senior Secured
Floating Rate Notes due 2046

     Current Rating: Ba2, under review for possible downgrade
     Prior Rating: Baa2, under review for possible downgrade
     Prior Rating Date: 6/25/2008

Class Description: U.S.$256,000,000 Class A-1B Senior Secured
Floating Rate Notes due 2046

     Current Rating: Ba2, under review for possible downgrade
     Prior Rating: Baa2, under review for possible downgrade
     Prior Rating Date: 6/25/2008

Commodore CDO V, Ltd.

Class Description: U.S.$75,000,000 Class A-1A First Priority
Senior Secured Floating Rate Delayed Draw Notes Due 2047

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 6/2/2008

Class Description: U.S.$225,000,000 Class A-1B Second Priority
Senior Secured Floating Rate Notes Due 2047

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 6/2/2008

Rutland Rated Investments Series 31 (Millbrook 2006-4)

Class Description: Series 31 (Millbrook 2006-4) USD 15,500,000
Asset Backed Securities Class A Variable Rate Credit-Linked Notes
due May 2046

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 4/24/2008

Rutland Rated Investments Series 32 (Millbrook 2006-4)

Class Description: Series 32 (Millbrook 2006-4) USD 42,000,000
Asset Backed Securities Class B Variable Rate Credit-Linked Notes
due May 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 4/24/2008

Abacus 2006-11, Ltd.

Class Description: U.S.$45,937,500 Class A-2 Variable Rate Notes,
Due 2045, Series 1

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3, under review for possible downgrade
     Prior Rating Date: 4/29/2008

Class Description: U.S.$45,937,500 Class A-2 Variable Rate Notes,
Due 2045, Series 2

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3, under review for possible downgrade
     Prior Rating Date: 4/29/2008

Class Description: U.S.$82,500,000 Class A-1 Variable Rate Notes,
Due 2045

     Current Rating: Baa2, under review for possible downgrade
     Prior Rating: A2, under review for possible downgrade
     Prior Rating Date: 4/29/2008

Class Description: U.S.$19,375,000 Class B Variable Rate Notes,
Due 2045

     Current Rating: B3, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 4/29/2008

Class Description: U.S.$18,750,000 Class C Variable Rate Notes,
Due 2045

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 4/29/2008

Class Description: U.S. $12,500,000 Class B Series 2 Variable Rate
Notes Due 2045

     Current Rating: B3, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 4/29/2008

Calculus ABS Resecuritization Trust, Series 2006-3

Class Description: U.S. $5,500,000 CALCULUS ABS RESECURITIZATION
TRUST, SERIES 2006-3 UNITS

     Current Rating: Baa1, under review for possible downgrade
     Prior Rating: A1, under review for possible downgrade
     Prior Rating Date: 9/25/2008

Calculus ABS Resecuritization Trust, Series 2006-1

Class Description: US $71,500,000 CALCULUS ABS RESECURITIZATION
TRUST, SERIES 2006-1 UNITS

     Current Rating: Baa3, under review for possible downgrade
     Prior Rating: A3, under review for possible downgrade
     Prior Rating Date: 9/25/2008

Calculus ABS Resecuritization Trust, Series 2006-2

Class Description: US $10,000,000 CALCULUS ABS RESECURITIZATION
TRUST, SERIES 2006-2 UNITS

     Current Rating: Baa1, under review for possible downgrade
     Prior Rating: A1, under review for possible downgrade
     Prior Rating Date: 9/25/2008

ESP Funding I, Ltd.

Class Description: U.S.$225,000,000 Advance Swap between IXIS
Financial Products ("Party A") and ESP Funding I, Ltd. ("Party B")

     Current Rating: Ba1, under review for possible downgrade
     Prior Rating: Baa1, under review for possible downgrade
     Prior Rating Date: 9/26/2008

Triaxx Prime CDO 2006-1, Ltd.

Class Description: U.S.$2,400,000,000 Class A-1 First Priority
Senior Secured Floating Rate Notes due March 2039

     Current Rating: Aa2, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 9/22/2006

Class Description: U.S.$213,600,000 Class A-2 Second Priority
Senior Secured Floating Rate Notes due March 2039

     Current Rating: Aa3, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 9/22/2006

Class Description: U.S.$32,000,000 Class B Third Priority Senior
Secured Floating Rate Notes due March 2039

     Current Rating: A2, under review for possible downgrade
     Prior Rating: Aa2, under review for possible downgrade
     Prior Rating Date: 11/5/2008

Class Description: U.S.$10,700,000 Class X Fourth Priority Junior
Secured Amortizing Deferrable Floating Rate Notes due March 2039

     Current Rating: Baa1, under review for possible downgrade
     Prior Rating: A1, under review for possible downgrade
     Prior Rating Date: 11/5/2008

Class Description: U.S.$10,700,000 Class C Fifth Priority Junior
Secured Deferrable Floating Rate Notes due March 2039

     Current Rating: Baa2, under review for possible downgrade
     Prior Rating: A2, under review for possible downgrade
     Prior Rating Date: 11/5/2008

E*TRADE ABS CDO V, Ltd.

Class Description: U.S.$201,000,000 Class A-1S Senior Secured
Floating Rate Notes Due 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 5/18/2008

Buckingham CDO III Ltd.

Class Description: Up to U.S. $1,350,000,000 Class A ST Notes Due
2051

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: Up to U.S. $1,350,000,000 Class A LT Notes Due
2051

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Mayflower CDO I Ltd.

Class Description: U.S.$20,000,000 Class X Notes Due September
2012

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 5/9/2008

Class Description: U.S.$157,000,000 Class A-1LB Floating Rate
Notes Due June 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 5/9/2008

Class Description: U.S.$609,000,000 Class A-1LA Investor Swap

     Current Rating: B3, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 5/9/2008

Strata Trust, Series 2006-20

Class Description: U.S. $43,000,000 Floating Rate Notes due
September 21, 2013

     Current Rating: A3, under review for possible downgrade
     Prior Rating: Aa3, under review for possible downgrade
     Prior Rating Date: 8/5/2008

Coldwater CDO, Ltd.

Class Description: U.S. $290,000,000 Class A-1 Floating Rate
Senior Secured Notes due 2046

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Stillwater ABS CDO 2006-1, Ltd.

Class Description: Class A-1 First Priority Senior Secured
Floating Rate Term Notes Due 2046

     Current Rating: Ba2, under review for possible downgrade
     Prior Rating: A2, under review for possible downgrade
     Prior Rating Date: 7/30/2008

Tower Hill CDO, Ltd.

Class Description: U.S.$100,000,000 Class A-1 Senior Secured
Floating Rate Notes Due 2016

     Current Rating: A3, under review for possible downgrade
     Prior Rating: Aa3
     Prior Rating Date: 10/15/2008

Class Description: U.S.$112,000,000 Class A-2 Senior Secured
Floating Rate Notes Due 2016

     Current Rating: Baa2, under review for possible downgrade
     Prior Rating: A2
     Prior Rating Date: 10/15/2008

Class Description: U.S.$72,000,000 Class B Senior Secured
Deferrable Interest Floating Rate Notes Due 2016

     Current Rating: Ba1, under review for possible downgrade
     Prior Rating: Baa1
     Prior Rating Date: 10/15/2008

Class Description: U.S.$24,000,000 Class C Senior Secured
Deferrable Interest Floating Rate Notes Due 2016

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3
     Prior Rating Date: 10/15/2008

Class Description: U.S.$60,000,000 Class D Senior Secured
Deferrable Interest Floating Rate Notes Due 2016

     Current Rating: B1, under review for possible downgrade
     Prior Rating: Ba1
     Prior Rating Date: 10/15/2008

Jupiter International 2006-1

Class Description: Jupiter 2006-1

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3
     Prior Rating Date: 8/24/2008

NORTH COVE CDO III, LTD.

Class Description: Unfunded supersenior tranche

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 10/28/2008

ABACUS 2006-9, Ltd.

Class Description: U.S. $40,625,000 Class A-2 Variable Rate Notes,
Due 2041

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 5/30/2008

Class Description: U.S. $35,937,500 Class B Variable Rate Notes,
Due 2041

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 5/30/2008

Class Description: U.S. $25,000,000 Class A-1 Variable Rate Notes
Due 2041

     Current Rating: B3, under review for possible downgrade
     Prior Rating: Ba3, under review for possible downgrade
     Prior Rating Date: 5/30/2008

ART CDO 2006-1, Ltd.

Class Description: U.S.$865,000,000 Class A1S Senior Floating Rate
Notes Due August 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 9/23/2008

Duke Funding XI, Ltd.

Class Description: EUR33,000,000 Class X Floating Rate Notes Due
2013

     Current Rating: Caa2, under review for possible downgrade
     Prior Rating: Ba2, under review for possible downgrade
     Prior Rating Date: 5/1/2008

Class Description: EUR132,000,000 Class A-1E Floating Rate Notes
Due 2046

     Current Rating: Ca
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 5/1/2008

Class Description: EUR88,000,000 Class A-2E Floating Rate Notes
Due 2046

     Current Rating: Ca
     Prior Rating: Caa3, under review for possible downgrade
     Prior Rating Date: 5/1/2008

Class Description: EUR704,000,000 Senior Swap

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: Ba1, under review for possible downgrade
     Prior Rating Date: 5/1/2008

Eolo Investments B.V. in respect of the Series 2006-1

Class Description: Series 2006-1

     Current Rating: Baa3, under review for possible downgrade
     Prior Rating: A3, under review for possible downgrade
     Prior Rating Date: 10/1/2008

Ridgeway Court Funding I, Ltd.

Class Description: Class A1M Notes

     Current Rating: B2, under review for possible downgrade
     Prior Rating: Baa2, under review for possible downgrade
     Prior Rating Date: 5/23/2008

Class Description: Class A1Q Notes

     Current Rating: B2, under review for possible downgrade
     Prior Rating: Baa2, under review for possible downgrade
     Prior Rating Date: 5/23/2008

Class Description: Class A2 Notes

     Current Rating: Ca
     Prior Rating: Caa3, under review for possible downgrade
     Prior Rating Date: 5/23/2008

ARLO VI Limited 2006-4 (SABS)

Class Description: U.S. $15,000,000 Variable Secured Limited
Recourse Credit-Linked Notes due 2040

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 4/24/2008

Marathon Structured Finance CDO I, Ltd.

Class Description: U.S. $30,000,000 Class A-1 Floating Rate
Delayed Draw Notes Due 2046

     Current Rating: Aa2, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 11/29/2006

Class Description: U.S. $128,000,000 Class A-1 Floating Rate Term
Notes Due 2046

     Current Rating: Aa2, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 11/29/2006

Class Description: U.S. $18,000,000 A-2 Floating Rate Notes Due
2046

     Current Rating: Aa3, under review for possible downgrade
     Prior Rating: Aaa
     Prior Rating Date: 11/29/2006

Class Description: U.S. $63,000,000 Class B Floating Rate Notes
Due 2046

     Current Rating: A2, under review for possible downgrade
     Prior Rating: Aa2
     Prior Rating Date: 11/29/2006

Class Description: U.S. $15,000,000 Class C Deferrable Floating
Rate Notes Due 2046

     Current Rating: Baa3, under review for possible downgrade
     Prior Rating: A3, under review for possible downgrade
     Prior Rating Date: 5/30/2008

Class Description: U.S. $22,900,000 Class D Deferrable Floating
Rate Notes Due 2046

     Current Rating: B2, under review for possible downgrade
     Prior Rating: Ba2, under review for possible downgrade
     Prior Rating Date: 5/30/2008

West Coast Funding I, Ltd.

Class Description: U.S.$ 1,187,950,000 Class A-1a Floating Rate
Notes Due 2041

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$ 1,187,950,000 Class A-1b Floating Rate
Notes Due 2041

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$100,000 Class A-1v Floating Rate Notes Due
2041

     Current Rating: Ba3, under review for possible downgrade
     Prior Rating: Baa3, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$81,000,000 Class A-2 Floating Rate Notes
Due 2041

     Current Rating: B1, under review for possible downgrade
     Prior Rating: Ba1, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$81,000,000 Class A-3 Floating Rate Notes
Due 2041

     Current Rating: B1, under review for possible downgrade
     Prior Rating: Ba1, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$54,000,000 Class B Floating Rate Notes Due
2041

     Current Rating: Caa2, under review for possible downgrade
     Prior Rating: B2, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$60,750,000 Class C Deferrable Floating
Rate Notes Due 2041

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Class Description: U.S.$10,000,000 Combination Notes Due 2041

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa1, under review for possible downgrade
     Prior Rating Date: 5/8/2008

Baldwin 2006-VII Segregated Portfolio

Class Description: Class A-1 Notes

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: Caa2, under review for possible downgrade
     Prior Rating Date: 7/29/2008

Knollwood CDO II Ltd.

Class Description: Class A-1VF First Priority Senior Secured
Floating Rate Notes Due 2046

     Current Rating: B1, under review for possible downgrade
     Prior Rating: Ba1, under review for possible downgrade
     Prior Rating Date: 4/23/2008

Class Description: Class A-2S Second Priority Senior Secured
Floating Rate Notes Due 2046

     Current Rating: Caa1, under review for possible downgrade
     Prior Rating: B1, under review for possible downgrade
     Prior Rating Date: 4/23/2008

Class Description: Class A-2J Third Priority Senior Secured
Floating Rate Notes Due 2046

     Current Rating: Caa2, under review for possible downgrade
     Prior Rating: B2, under review for possible downgrade
     Prior Rating Date: 4/23/2008

Class Description: Class B Fourth Priority Senior Secured Floating
Rate Notes Due 2046

     Current Rating: Caa3, under review for possible downgrade
     Prior Rating: B3, under review for possible downgrade
     Prior Rating Date: 4/23/2008

ARLO VI Limited 2006-3 (SABS)

Class Description: U.S. $ 10,000,000 Init