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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, August 18, 2010, Vol. 13, No. 162
Headlines
A U S T R A L I A
LIBERTY FUNDING: Fitch Affirms Ratings on All Classes of Notes
H O N G K O N G
CITIBANK NA: Moody's Assigns Ratings on Three Unfunded Swaps
NEWBASE MANAGEMENT: Placed Under Voluntary Wind-Up Proceedings
OVERSEAS UNION: Lai, Blaauw and Tan Step Down as Liquidators
PARASAND LIMITED: Creditors' Proofs of Debt Due September 3
PHYSICAL PROPERTY: Posts HK138,000 Net Loss in Q2 Ended June 30
PIZZICATO LIMITED: Creditors' Proofs of Debt Due August 30
SCRIPTPRO ASIA: Sole Member Final Meeting Set for September 13
SHENG KUNG: Creditors' Proofs of Debt Due September 15
QUEENSON INTERNATIONAL: Creditors' Proofs of Debt Due September 15
UFI TELECOM: Wong and Leung Step Down as Liquidators
UNION ASIA: Placed Under Voluntary Wind-Up Proceedings
UNION TIME: Creditors' Proofs of Debt Due August 31
VICO INDUSTRIES: Creditors' Meeting Set for August 20
YUEN CHEONG: Wong and Leung Step Down as Liquidators
I N D I A
SURINA IMPEX: Fitch Assigns 'B' National Long-Term Rating
S I N G A P O R E
INTERACTIVE KNOWLEDGE: Creditors Get 18.8428% Recovery on Claims
X X X X X X X X
* Upcoming Meetings, Conferences and Seminars
- - - - -
=================
A U S T R A L I A
=================
LIBERTY FUNDING: Fitch Affirms Ratings on All Classes of Notes
--------------------------------------------------------------
Fitch Ratings has affirmed all classes of notes issued by Liberty
Funding Pty Ltd in respect of the Liberty PRIME Series 2009-1
Trust. The rating actions are:
-- AUD25,825,683 Class A-2 affirmed at 'AAAsf'; Outlook Stable;
Loss Severity Rating 'LS-1';
-- AUD283,000,000 Class A-3 affirmed at 'AAAsf'; Outlook Stable;
Loss Severity Rating 'LS-1';
-- AUD37,800,000 Class AB affirmed at 'AAAsf'; Outlook Stable;
Loss Severity Rating revised to 'LS-1' from 'LS-2';.
-- AUD8,400,000 Class B affirmed at 'AAsf'; Outlook Stable; Loss
Severity Rating 'LS-3';
-- AUD8,400,000 Class C affirmed at 'Asf'; Outlook Stable; Loss
Severity Rating 'LS-3';
-- AUD8,400,0000 Class D affirmed at 'BBBsf'; Outlook Stable;
Loss Severity Rating 'LS-3'; and
-- AUD3,000,000 Class E affirmed at 'BBsf'; Outlook Stable; Loss
Severity Rating 'LS-4'.
The ratings of all classes have been affirmed as the transaction
has performed as expected and is expected to continue to do so.
The transaction is well subordinated at each rating level and the
credit reserve, which provides an additional level of credit
enhancement to the transaction, has now reached the upper limit of
AUD6m via sufficient excess contributions at each payment date.
"No realised losses and a steady rise in credit enhancement have
been notable features of the transaction since closing. The
increase in subordination comes from two primary sources: excess
being distributed to the credit reserve; and the paydown of the
transaction," notes Spencer Wilson, Analyst in Fitch's Structured
Finance team.
The transaction has not suffered any losses to date, despite a
steady deterioration in the performance of the pool in terms of
30+ day arrears, which have increased throughout 2010 to 2.86% as
at July 31, 2010. As of the last payment date, the subordination
percentage has increased substantially, compared to that at
closing, with the Class A-1 note paid in full and the reserve
account standing at the upper limit of AUD6 million. Scheduled
and unscheduled payments have averaged 25.8% throughout the life
of the transaction.
================
H O N G K O N G
================
CITIBANK NA: Moody's Assigns Ratings on Three Unfunded Swaps
------------------------------------------------------------
Moody's Investors Service has assigned these definitive ratings to
the three unfunded credit default swaps between Citibank N.A.,
acting through its London Branch, and Terra II Mezzanine CLO LLC,
a limited liability company organized under the laws of the State
of Delaware:
-- Aa3 (sf) to a EUR136,500,000 Credit Derivative Transaction
(Reference No. 1680) (Class B1), in which the SPV provides
credit protection to Citibank on a 18% to 25% tranche of the
reference portfolio
-- A3 (sf) to a EUR68,250,000 Credit Derivative Transaction
(Reference No. 1681) (Class B2), in which the SPV provides
credit protection to Citibank on a 14.5% to 18% tranche of the
reference portfolio
-- Ba3 (sf) to a EUR87,750,000 Credit Derivative Transaction
(Reference No. 1682) (Class B3), in which the SPV provides
credit protection to Citibank on a 10% to 14.5% tranche of the
reference portfolio
The Moody's ratings measure the risk on an expected loss basis
that the credit protection provider will be required to make
payments in respect of credit events under the terms of the
transaction. The ratings also address any premiums due but not
paid by the protection buyer, up until an early termination date,
if any. The ratings do not address potential losses resulting
from an early termination of the transaction, nor any market risk
associated with the transaction.
Class B1, B2, and B3 are CDS referencing the same replenishable
portfolio of corporate loans. The portfolio is currently, and is
expected to remain, the same as the portfolio referenced by Class
A notes issued by Terra II Senior CLO Ltd. in April 2010.
The reference portfolio consists of senior secured and unsecured
obligations of corporate borrowers in mostly Asian and other
emerging countries. These obligations arise out of bilateral and
agented or syndicated credit agreements originated by Citibank and
its affiliates.
As of the closing date, the credit risk transferred by Citibank
amounts to a portfolio of EUR3 billion in total, scheduled to
terminate in March 2015. The Class B1, B2, and B3 CDS transfer
the mezzanine risk, with an attachment point and detachment point
at 18% and 25%, 14.5% and 18%, and 10% and 14.5% respectively, of
the portfolio to the SPV. The SPV will be responsible for making
good 65% of the credit losses exceeding the attachment point, and
will make credit protection payments amounting to no more than a
total of EUR292.5 million under the respective CDS.
Moody's notes that the three CDS are structured to have some
buffer for future replenishments or portfolio deterioration. The
model outputs for Class B1, B2, and B3 CDS correspond to Aa1, A2,
and Ba1 respectively, higher than the respective assigned ratings,
based on the reference portfolio at the end of May 2010.
Credit events according to the CDS are defined as bankruptcy,
failure to pay, and restructuring.
Losses on each defaulted obligation will be based on the actual
recovery amount received for the principal for the defaulted
obligation. Any workouts will be conducted by Citibank in a
manner applicable to any credit exposures similar to the relevant
reference obligation, irrespective of its inclusion in the
portfolio. The workout will continue until it is formally
concluded or the reference obligation is sold.
The occurrence of a credit event and the compliance of a defaulted
obligation with the eligibility criteria, as well as the
computation of any losses, will be verified by the verification
agent.
Analysis
Moody's initially analyzed and now monitors this transaction using
primarily the methodology and its supplements for corporate
synthetic CDOs as described in Moody's Rating Methodology Report
below:
-- Moody's Approach to Rating Corporate Collateralized Synthetic
Obligations (September 2009)
The main drivers of Moody's analysis of this transaction are:
1. The credit quality of the entities in the portfolio: The
average modeled default probability of the portfolio of 9.32%
for the 4.6-year time to scheduled termination date, based
mostly on a mapping between Citibank's internal rating scale
and Moody's rating scale
2. The average assumed mean for Moody's recovery rate for the
portfolio: 28.63% (based on the end of May 2010 portfolio)
3. Correlation in the portfolio: The simulated default
distribution corresponds to an assumed weighted-average pair-
wise asset correlation of 4.74% (based on the end of May 2010
portfolio)
4. An attachment point and a detachment point for each of the
three CDS as well as the SPV's responsibility to cover 65% of
the loss between their respective attachment points and
detachment points
5. A low rating linkage to the credit quality of Citibank being
the credit protection buyer who is obligated to pay periodic
premiums to the SPV until the transaction terminates
At the end of May 2010, the portfolio comprised 854 reference
obligations by 713 corporate reference entities. The major asset
types were senior unsecured loans (more than 90%). The top three
industries in the initial reference portfolio were Beverage, Food
& Tobacco (7.93%); Chemicals, Plastics, & Rubber (7.85%); and
Energy: Oil & Gas (6.78%).
In terms of geographical diversification, 40.76% of the portfolio
is concentrated in Asia Pacific, 15.05% in South America, 13.61%
in Central America, and the rest in Europe, Middle East, Africa,
India, and Russia. The top five countries are Australia (9.46%),
India (8.00%), Brazil (7.62%), Mexico (7.56%), and South Korea
(7.45%).
Only a small portion of the reference portfolio has public
ratings. For the remaining portfolio, the credit quality of each
reference entities is assessed based on a credit mapping between
Citibank's internal rating scale and Moody's public rating scale,
last updated in early 2010. The end of May 2010 reference
portfolio has a weighted-average rating factor of around 1056,
which corresponds to a Ba1/Ba2 rating.
Moody's CDOROM(TM) was used to measure the potential loss incurred
by noteholders. Moody's CDOROM(TM) is a Monte Carlo simulation
that takes Moody's default probabilities as input. Each obligor
is modelled individually, with a standard multi-factor model
incorporating intra- and inter-industry correlations. The
correlation structure is based on a Gaussian copula. In each
Monte Carlo scenario, defaults are simulated.
V Score
The V Score for this transaction indicates Medium/High uncertainty
about critical assumptions. This is in line with the Medium/High
score for both the Corporate Synthetic CDO Sector. The V Score
for this transaction is driven by a high level uncertainty of
sector performance variability; medium/high level uncertainty in
assessing the portfolio credit quality (which is estimated based
on credit mapping without knowing the exact credit quality of any
individual name); and a medium level uncertainty of the alignment
of interests since the rationale for transaction is for balance
sheet management; as well as other factors.
Parameter Sensitivities
Moody's also ran sensitivities for key parameters for the three
CDS. For instance:
-- if the assumed weighted average default rate of 9.32% used in
determining the initial rating were changed to 11.05%, the
model output for the Class B1 CDS would remains at Aa3, but
the Class B2 CDS would change from A3 to Baa2, and Class B3
CDS would change from Ba3 to B1.
-- if the assumed weighted average default rate of 9.32% used in
determining the initial rating were changed to 12.91%, the
model output for the Class B1 CDS would change from Aa3 toA2,
the Class B2 CDS would change from A3 to Ba1, and Class B3 CDS
would change from Ba3 to B3.
-- if the assumed weighted average recovery rate of 28.63% were
changed to 20%, the model output for all the Class B1, B2, and
B3 CDS would sustain a Aa3, A3, and Ba3.
-- if the assumed weighted average recovery rate of 28.63% were
changed to 10%, the model output for the Class B1 CDS would
change from Aa3 toA1, the Class B2 CDS would change from A3 to
Baa3, and Class B3 CDS would change from Ba3 to B1.
Moody's will monitor these ratings. Any change in these ratings
will be publicly disseminated by Moody's through normal print and
electronic media in accordance with Moody's standard practice at
the time.
NEWBASE MANAGEMENT: Placed Under Voluntary Wind-Up Proceedings
--------------------------------------------------------------
At an extraordinary general meeting held on August 4, 2010,
creditors of Newbase Management Limited resolved to voluntarily
wind up the company's operations.
The company's liquidator is:
Billy Li Sze Kuen
12/F, No. 3 Lockhart Road
Wanchai, Hong Kong
OVERSEAS UNION: Lai, Blaauw and Tan Step Down as Liquidators
------------------------------------------------------------
Lai Kar Yan Derek, Jan G W Blaauw and Tan Man Kou (Deceased)
stepped down as liquidators of Overseas Union Realty Limited on
May 25, 2010.
PARASAND LIMITED: Creditors' Proofs of Debt Due September 3
-----------------------------------------------------------
The Parasand Limited, which is in members' voluntary liquidation,
requires its creditors to file their proofs of debt by Sept. 3,
2010, to be included in the company's dividend distribution.
The company commenced wind-up proceedings on August 2, 2010
The company's liquidators are:
Ying Hing Chiu
Chan Mi Har
1 Queen's Road East
Hong Kong
PHYSICAL PROPERTY: Posts HK138,000 Net Loss in Q2 Ended June 30
---------------------------------------------------------------
Physical Property Holdings Inc. filed its quarterly report on Form
10-Q, reporting a net loss of HK$138,000 on HK$164,000 of revenue
for the three months ended June 30, 2010, compared with a net loss
of HK$104,000 on HK$133,000 of revenue for the same period of
2009.
The Company's balance sheet as of June 30, 2010, showed
HK$10,842,000 in total assets, HK$10,974,000 in total liabilities,
and a stockholders' deficit of HK$132,000.
"The Company had negative working capital of HK$1,107,000 as of
June 30, 2010, and incurred losses of HK$279,000 and HK$239,000
for the six months ended June 30, 2010, and 2009, respectively.
These conditions raised substantial doubt about the Company's
ability to continue as a going concern."
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?693a
Physical Property Holdings Inc. (formerly known as Physical Spa &
Fitness Inc.), through its wholly-owned subsidiary Good Partner
Limited, owns five residential apartments located in Hong Kong.
The Company was incorporated on September 21, 1988, under the laws
of the United States of America.
PIZZICATO LIMITED: Creditors' Proofs of Debt Due August 30
----------------------------------------------------------
Creditors of Pizzicato Limited, which is in members' voluntary
liquidation, are required to file their proofs of debt by
August 30, 2010, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on August 6, 2010.
The company's liquidator is:
Ho Koon Man
28th Floor, Emperor Group Centre
288 Hennessy Road
Wanchai, Hong Kong
SCRIPTPRO ASIA: Sole Member Final Meeting Set for September 13
--------------------------------------------------------------
Sole member of Scriptpro Asia Limited will hold their final
meeting on September 13, 2010, at 10:00 a.m., at 8th Floor,
Gloucester Tower, The Landmark, 15 Queen's Road Central, in Hong
Kong.
At the meeting, Iain Ferguson Bruce, the company's liquidators,
will give a report on the company's wind-up proceedings and
property disposal.
SHENG KUNG: Creditors' Proofs of Debt Due September 15
------------------------------------------------------
Sheng Kung Hui Kindergarten (Mount Butler) Limited, which is in
members' voluntary liquidation, requires its creditors to file
their proofs of debt by September 15, 2010, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on August 13, 2010
The company's liquidators are:
Ng Tze Kin
Yuen Shu Tong
3/F., Malaysia Building
50 Gloucester Road
Wanchai, Hong Kong
QUEENSON INTERNATIONAL: Creditors' Proofs of Debt Due September 15
-----------------------------------------------------------------
Creditors of Queenson International Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by September 15, 2010, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on August 4, 2010.
The company's liquidators are:
Mr. Fong Jen-Chih
Ms. Sombon Benjamas
232/251-256 Mou 4
Pakkred Nontaburi 11120
Thailand
UFI TELECOM: Wong and Leung Step Down as Liquidators
----------------------------------------------------
Wong Ming Lai and Leung Chung Yin stepped down as liquidators of
UFI Telecom Limited on August 1, 2010.
UNION ASIA: Placed Under Voluntary Wind-Up Proceedings
------------------------------------------------------
At an extraordinary general meeting held on August 4, 2010,
creditors of Union Asia Trading Limited resolved to voluntarily
wind up the company's operations.
The company's liquidator is:
Billy Li Sze Kuen
12/F, No. 3 Lockhart Road
Wanchai, Hong Kong
UNION TIME: Creditors' Proofs of Debt Due August 31
---------------------------------------------------
Creditors of Union Time Asia Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by August 31, 2010, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on August 9, 2010.
The company's liquidator is:
Yeung Wai Kwok
Rooms 1001-03, 10/F
Manulife Provident Funds Place
345 Nathan Road
Kowloon
VICO INDUSTRIES: Creditors' Meeting Set for August 20
-----------------------------------------------------
Creditors of Vico Industries Limited will hold their first meeting
on August 27, 2010, at 9:00 a.m., for the purposes provided for in
Sections 241, 242, 243, 244 and 251 of the Companies Ordinance.
The meeting will be held at the offices of FS Asia Advisory
Limited, 14/F, The Hong Kong Club Building, 3A Chater Road,
Central, in Hong Kong.
YUEN CHEONG: Wong and Leung Step Down as Liquidators
----------------------------------------------------
Wong Ming Lai and Leung Chung Yin stepped down as liquidators of
Yuen Cheong Sawmill Limited on August 1, 2010.
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I N D I A
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SURINA IMPEX: Fitch Assigns 'B' National Long-Term Rating
---------------------------------------------------------
Fitch Ratings has assigned India's Surina Impex Pvt. Ltd. a
National Long-term rating of 'B(ind)' with a Stable Outlook. The
agency has also assigned ratings to Surina's bank loans:
-- INR106 million long-term loans: 'B(ind)';
-- INR124 million fund-based working capital limits:
'B(ind)'/'F4(ind)'; and
-- INR21.7 million non-fund based working capital limits:
'F4(ind)'.
The ratings reflect Surina's small scale of operations, an initial
delay in the setting up of its fabric knitting facility,
volatility of its key raw materials prices (i.e. cotton yarn), a
partial completion of its project till date, and limited
experience of its management in manufacturing and executing
projects.
The ratings, however, benefit from the past experience of Surina's
promoters in the trading and export of textiles, fabrics,
garments, etc, group support from other companies under the same
management, and the start of its commercial operations (i.e.
trading in textiles, and partial start of knitting facilities) in
FY10.
Positive rating triggers include a successful installation of
Surina's remaining knitting machines as per schedule, its EBIDTA
margins of beyond 9% with a leverage of below 4x. Negative rating
triggers include Surina's EBIDTA margins of below 5%, its leverage
exceeding 7x, and/ or further delays in the installation of the
remaining knitting machines beyond a quarter.
Surina, incorporated in 2005, has its main manufacturing
facilities at Narayanpur in Kolkata. It is setting up a 3,600 MT
per annum knitting unit at Kolkata. Out of the 40 knitting
machines to be installed, the company has already installed 20 and
started commercial operations since January 2010. The remaining
20 knitting machines are expected to be installed and operational
by October 2010. In Q1FY11, the company reported sales of
INR125.83 million (provisional figures).
=================
S I N G A P O R E
=================
INTERACTIVE KNOWLEDGE: Creditors Get 18.8428% Recovery on Claims
----------------------------------------------------------------
Interactive Knowledge Systems Pte Ltd, declared the first and
final dividend on July 26, 2010.
The company paid 18.8428% to the received claims.
The company's liquidator is:
The Official Receiver
The URA Centre (East Wing)
45 Maxwell Road #06-11
Singapore 069118
===============
X X X X X X X X
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* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
October 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
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Maryland, USA. Valerie C. Udtuhan, Marites O. Claro,
Rousel Elaine T. Fernandez, Joy A. Agravante, Frauline S. Abangan,
and Peter A. Chapman, Editors.
Copyright 2010. All rights reserved. ISSN: 1520-9482.
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