/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/130626.mbx 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, June 26, 2013, Vol. 16, No. 125 Headlines A U S T R A L I A CASTERTON STATION: Receivers Seize Two Cattle Stations DRILLING & GROUTING: Ferrier Hodgson Appointed as Administrators DTD ENGINEERING: New Operators Set to Rescue Company ELIZA PARK: Sun International Acquires Business NATIONAL BUILDPLAN: Staff to Get Entitlements as DOCA Gets OK SPRING GULLY: Creditors May Receive Full Payment WOLUMLA HOTEL: In Receivership, Business Operations Until June 27 * Moody's Outlook on Australian Airport Sector Remains Stable C H I N A SUNTECH POWER: European Subsidiary Granted Definitive Moratorium H O N G K O N G * Moody's Outlook on the Hong Kong Banking Sector is Negative I N D I A A-1 HEIGHTS: CRISIL Assigns 'B' Ratings to INR100MM Loans COMMANDER VITRIFIED: CRISIL Puts 'BB' Ratings on INR325MM Loans DASMESH MECHANICAL: CRISIL Assigns 'D' Ratings to INR87MM Loans EASTERN GOURMET: CRISIL Assigns 'B' Ratings to INR74.7MM Loans GEE CEE: CRISIL Assigns 'B+' Ratings to INR246.9MM Loans GYAN GANGA: CRISIL Assigns 'BB+' Rating to INR96MM Term Loan KEJ MINERALS: CRISIL Assigns 'B+' Ratings to INR91MM Loans METCAST METALS: CRISIL Assigns 'D' Ratings to INR90MM Loans MODERN STEELS: CRISIL Cuts Ratings on INR1.28BB Loans to 'B+' SAKET PROMOTERS: CRISIL Rates INR450MM LT Bank Loan at 'B+' SANMATI COAL: CRISIL Rates INR70MM Cash Credit at 'CRISIL B+' SURYABALAJI STEELS: CRISIL Puts 'B+' Ratings on INR139.4MM Loans VIRAT ALLOYS: CRISIL Cuts Ratings on INR93.4MM Loans to 'B+' YENEPOYA INSTITUTE: CRISIL Assigns BB Ratings to INR90MM Loans I N D O N E S I A * Bank Indonesia Summoned Over 4 Troubled National Banks Issues J A P A N CITIGROUP GLOBAL: S&P Affirms 'BB+' Rating on Jr. Sub. Note Prog. * MUFG Fine Highlights Japan Banks' Overseas Growth Risks S O U T H K O R E A MAGNACHIP SEMICONDUCTOR: Moody's Lifts CFR, Sr. Bond Rating to B1 X X X X X X X X * Moody's Issues New Report on Risks from Emerging Markets * Upcoming Meetings, Conferences and Seminars - - - - - ================= A U S T R A L I A ================= CASTERTON STATION: Receivers Seize Two Cattle Stations ------------------------------------------------------ Matthew Cranston at The Land reports that the Supreme Court of Queensland has issued a warrant for the seizure of two cattle stations at Hughenden in central Queensland, after an application from receivers PPB Advisory representing the ANZ Banking Group. The Land relates that PPB has been given until next month to take control of Casterton Station and Burslem Station, stoking fears that more receiverships in the struggling cattle industry in Queensland and Northern Territory could be on the way. The Land, citing The Australian Financial Review, said a warrant notice issued on June 13 disclosed that respondents David and Alexander Browning were restrained from entering the properties "until seven days after the date of completion of any sale of Burslem Station and Casterton Station," The Land reports. The report says the warrant follows a prolonged battle between the farmers, who were unavailable for comment, and the bank. The Land quotes bank's spokesman as saying that: "Taking possession of a property is always a resort when all other avenues have been exhausted." DRILLING & GROUTING: Ferrier Hodgson Appointed as Administrators ---------------------------------------------------------------- Darren Weaver -- darren.weaver@fh.com.au -- Ben Johnson -- darren.weaver@fh.com.au -- and Andrew Saker -- darren.weaver@fh.com.au -- of Ferrier Hodgson were appointed Joint and Several Administrators of Drilling & Grouting Services Pty Ltd on June 11, 2013, pursuant to Section 436A of the Corporations Act 2001. Drilling & Grouting Services Pty Ltd was established in Western Australia in 1990 and operated nationally and across South-East Asia. The Company utilises a fully equipped workshop and depot in Perth, Western Australia that performs the design and fabrication of specialised drill rigs and grouting system and essential repairs and maintenance. DTD ENGINEERING: New Operators Set to Rescue Company ---------------------------------------------------- The Border Mail reports that DTD Engineering and its 56 employees' jobs are on the brink of being saved. The Border Mail relates that administrator Chris Chamberlain confirmed on June 24 following a second creditors' meeting a new ownership structure had agreed to take on the ailing business subject to final approval from the ANZ Bank. The new operators include two former owners, Tom Lappin and David Larkin, and Paul Raethel and Gary Cresswell, the report relays. Mr. Cresswell is the general manager of DTD Engineering, the report says. According to the report, Mr. Chamberlain said the creditors agreed to support the proposed deed of company arrangement struck in recent days. DTD Engineering is a major supplier of stainless and carbon steel fabrications and provides onsite mechanical project work to clients in the pulp and paper products industry, wood mill plants, water treatment, food processing and associated industries. Thurgoona-based DTD Engineering went into voluntary administration in May 2013 with debts of about AUD1 million. Chris Chamberlain and Steven Priest of Chamberlains SBR have been appointed as administrators. ELIZA PARK: Sun International Acquires Business ----------------------------------------------- BRW News reports that Eliza Park, the iconic horse stud that collapsed into receivership in mid-June, has been sold to a Hong Kong racing group and will retain ownership of its crack stallion Bel Esprit, the sire of undefeated champion Black Caviar. The business, which was placed in receivership by NAB has been purchased by Sun International, according to BRW News. The report notes that Sun International had been working with the previous owner of Eliza Park, Lee Fleming, in the months before the receivership. Sun International is part of a group owned by Cheng Ting Kong, a businessman who races horses throughout Asia, most of which have the word "sunshine" in their name. The report relates that the group purchased more than $2 million worth of horses at the recent Magic Millions National Weanling Sale, working in conjunction with Eliza Park. The report discloses that the business will be renamed Eliza Park International by the new owners. A sale price for the business has not been disclosed. NATIONAL BUILDPLAN: Staff to Get Entitlements as DOCA Gets OK ------------------------------------------------------------- Catherine Clifford at ABC News reports that employees of the collapsed regional construction company, National Buildplan, will be paid all of their entitlements after creditors signed off on a Deed of Company Arrangement (DOCA). According to ABC News, the Armidale-based company owes AUD58-million to more than 1,000 unsecured creditors across three states, many of them regional sub-contractors. ABC News says the Deed Administrator will have control of the Company for a period of 30 days after execution of the DOCA, which formally took place on June 20. The Director will now regain control at the end of July under strict monitoring to fulfill obligations under the Corporations Act, the report notes. According to the report, administrator Peter Krejci, from BRI- Ferrier, said employees will be paid their entitlements, but it may take up to six months until the targeted sum of AUD5-million set out in the Deed is achieved. "Under the DOCA that's been accepted by creditors we're anticipating coming into funds to meet the claims of employees in full," the report quotes Mr. Krejci as saying. "However, having accepted the DOCA, the estimate is they will get the 100 cents in the dollar albeit having to wait a little while." All but nine of the company's 180 employees remain, with the bulk of them retrenched in mid-April, the report notes. About National Buildplan Construction firm National Buildplan Group entered administration in early April 2013. At that time, it had seven offices and 180 staff in New South Wales, Queensland and Western Australia. Martin Green and Peter Krejci of BRI Ferrier have been appointed as voluntary administrators of National Buildplan Group. The company in the interim has ceased work on its construction projects. The family-owned group posted a AUD2.39 million profit in the 2011-12 financial year before racking up a AUD6.28 million loss over the next nine months. Law firm Everingham Solomons represents a number of subcontractors. SPRING GULLY: Creditors May Receive Full Payment ------------------------------------------------ ABC News reports that Spring Gully and its administrator said creditors can expect to be paid in full, in installments, if they approve a management plan at a meeting on July 1. Copies of a deed of company arrangement were sent to creditors last week by administrator Austin Taylor, the report relays. They outlined a return to profitable levels for Spring Gully's normal business operations due to strong sales and said creditors would get an initial downpayment then quarterly payments until the debt was cleared, according to ABC News. ABC News relates that Spring Gully managing director Kevin Webb said strong support from shoppers had allowed the offer to repay 100 cents in the dollar. "The support that we've been given by our consumers, everybody to be honest, through the corporate world, the media, through our customers, other retailers and I think we all know that the support has been absolutely amazing for Spring Gully," ABC News quotes Mr. Webb as saying. "Through that support, and what's been happening over the last two months as we've traded very strongly, we've been able to put together this proposal that, if the creditors decide to accept it on the first of July, we will then sign that with our creditors and move forward." Spring Gully Foods is one of South Australia's iconic food businesses. The company specialises in jams, chutneys, pickles, sauces and honey. The fourth generation Spring Gully Foods went into voluntary administration April 11, 2013, with debts of more than AUD3 million. According to ABC Rural, managing director Kevin Webb said its financial losses are due to a dramatic fall in retail sales. WOLUMLA HOTEL: In Receivership, Business Operations Until June 27 ----------------------------------------------------------------- Merimbula News reports that the Wolumla Hotel, Wolumla is understood to be in receivership and will be serving last orders tomorrow evening, Thursday, June 27. Credit watch agencies have listed the hotel as under external administration and/or controller appointed, according to Merimbula News. Merimbula News notes that the bank holding the mortgage on the property has called in the receiver although it is unclear whether the bank will move to liquidation or appoint a manager in the hope of getting a return. * Moody's Outlook on Australian Airport Sector Remains Stable ------------------------------------------------------------- Moody's Investors Service has maintained a stable outlook on the rated Australian airport sector on the expectation that aggregate sector revenues will continue to grow, but that such growth is being tempered by growing macro-economic challenges. "We expect softening domestic economic conditions to result in revenue growth falling towards the lower end of our expected range of mid-to-high single digit percentages," says Arnon Musiker, a Moody's Vice President and Senior Analyst. "That said, macro- economic fundamentals, including employment and GDP growth, should support our base case assumption for passenger volume growth - the key driver for airport revenues - of 3 - 5% over the next 12-18 months." Musiker was speaking at the release of a new Moody's report titled "Stable Outlook, but Decreased Capex Visibility Over Medium Term", which details Moody's expectation for the fundamental business conditions in the sector over the next 12-18 months. Moody's also expects China's economy to grow in the 7.5% range after a soft landing in 2012. This should continue to underpin growth in passengers from China and Asia more generally, the sector's highest-growth markets. Moody's expects airports undertaking capital expansions to maintain manageable financial metrics over the next 12-18 months, even though higher capex will increase debt levels for most airports. Over the longer term, Moody's believes there is less visibility on capital expansions. "We see increasingly protracted negotiations between airlines and airports on funding longer-term capital expansion projects. In the absence of certainty, we expect airports to either defer multi- year capex programmes, or potentially invoke regulatory processes which could increase business risk" says Musiker. "A failure of airports to invest in new capacity will likely lead to declining service levels and increase regulatory risk. That said, we believe that the airline and airport sectors have a commonality of interest in airports investing in capacity to accommodate growing passenger volumes. Moody's base case expectation is therefore that the existing light handed regulatory regime will remain in place" Moody's does not anticipate issuers in the sector experiencing setbacks in executing funding plans, as appetite for the sector's debt remains solid, notwithstanding volatility seen in credit markets. The sector has also prefunded around AUD600 million of the AUD2.1 billion of debt maturing over the outlook report, which further mitigates refinancing risk Moody's rates five airports in Australia: Adelaide, Brisbane (Baa2 Stable), Melbourne, Perth and Sydney. These airports accounted for an estimated 77% of domestic passenger movements and 94% of international passengers during 2012. ========= C H I N A ========= SUNTECH POWER: European Subsidiary Granted Definitive Moratorium ---------------------------------------------------------------- Suntech Power Holdings Co., Ltd.'s principal operating subsidiary in Europe, Suntech Power International Ltd., has been granted a definitive moratorium on creditor claims from the judicial authorities in Schaffhausen, Switzerland. The moratorium is for a six month period and may be extended. Previously, on April 9, 2013, SPI had been granted a provisional moratorium for two months on creditor claims as a result of over- indebtedness. The majority of SPI's debt is Suntech inter-company debt. "SPI has already met important milestones in the restructuring process. The definitive moratorium allows SPI time to restructure debt and reach an agreement with creditors. SPI will continue normal operations during this process," said David King, Suntech's CEO. Other than the insolvency and restructuring of Suntech Holdings' Chinese subsidiary Wuxi Suntech Power Co., Ltd., and the SPI composition proceedings, Suntech Holdings is not aware of any similar proceedings regarding any of its other entities. About Suntech Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP) produces solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. As reported by the TCR on March 20, 2013, Suntech Power Holdings Co., Ltd., has received from the trustee of its 3% Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. That event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. ================ H O N G K O N G ================ * Moody's Outlook on the Hong Kong Banking Sector is Negative ------------------------------------------------------------- Moody's Investors Service has changed to negative from stable the outlook for the Hong Kong banking system. The change in outlook reflects Moody's concerns over persistent negative real interest rates and potential property bubbles in the territory, and banks' growing exposures to Mainland China, all of which may contribute to adverse future operating conditions for Hong Kong banks. "Real interest rates in Hong Kong have been negative since early 2009, and are expected to remain so over the outlook horizon, as central banks in major developed markets maintain easy monetary policies," says Sonny Hsu, a Moody's Vice President and Senior Analyst. Persistent low interest rates and limited land supply have driven up asset prices since early 2009 and led to higher consumer and corporate leverage. "The value of residential, commercial, and industrial real estate, parking spaces and taxi licenses have all more than doubled since early 2009 and reached record levels in the past year," adds Hsu. Hsu was speaking on Moody's just released Banking System Outlook for Hong Kong. According to the report, the nature of Hong Kong's banking system is changing rapidly as banks increase their China-related lending and Hong Kong companies derive an increasing part of their business from China. "Hong Kong banks have substantially increased their Mainland China exposures to 16.5% of consolidated total assets at end-2012, up from 9.8% at end-2009," says Hsu. And this trend is set to continue, as banks expand their onshore presence and support the cross-border trade and investments of Mainland corporations. For the most part, the banks have mitigated risks on their Mainland lending by seeking collateral for onshore lending and bank guarantees on offshore lending. While this is an opportunity for the banks and their corporate customers, it also entails risks, with future credit performance likely to be different from past experience. Moody's risk assessment for the banks stands in contrast to their broadly stable and strong financial metrics. Moody's outlook is a directional view on credit quality and should be understood in the context of Hong Kong banks' high credit ratings relative to their global peers. Hong Kong banks continue to rank among the highest-rated banks globally, and their credit strengths include their solid capitalization, sound funding profile and liquidity positions, and established retail franchises. These strengths create buffers that will protect the banks if and when their asset quality deteriorates. Moody's expects stable funding and liquidity conditions to persist in the next 12-18 months as major central banks maintain easy monetary policy. Banks are also expected to report stable profitability over the outlook horizon, but this partly reflects the fact that profitability tends to be a lagging indicator as risks build up. The negative outlook on the banking system contrasts with Moody's stable outlook on the Hong Kong government's Aa1 rating; the sovereign outlook places more emphasis on the government's strong fiscal position. Moody's rates 17 banks in Hong Kong, which together accounted for 70% of total domestic loans at end-2012. Three banking groups dominate the system, with a 49% share of domestic loans: The Hongkong and Shanghai Banking Corp, and its subsidiary Hang Seng Bank; Bank of China (Hong Kong) Limited; and Standard Chartered (Hong Kong) Limited. The other banks each have local loan market shares of between 4% and 0.4%. ========= I N D I A ========= A-1 HEIGHTS: CRISIL Assigns 'B' Ratings to INR100MM Loans --------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of A-1 Heights & Hospitality Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long-Term 8.5 CRISIL B/Stable Bank Loan Facility Term Loan 91.5 CRISIL B/Stable The rating reflects the exposure to risk associated with the company's ongoing hotel project. The rating reflects the favorable location of the proposed hotel with proximity to the city centre and business district of Mumbai and extensive experience of the promoters in the realty industry. Outlook: Stable CRISIL believes that the timely funding, implementation and stabilization of its ongoing hotel project will influence its credit profile over the medium term. The outlook may be revised to 'Positive' if the company generates significantly higher than expected cash accruals, driven by higher occupancy rates and average room realizations, resulting in improvement in debt protection metrics. Conversely, the outlook may be revised to negative if there are significant delays in commissioning of project impacting its debt servicing ability A-1 Heights And Hospitality Private Limited (A-1), (part of Milan Group) is engaged in development of a three star hotel by the name of 'Aureole Hotel' located at Andheri, Mumbai. The overall operations of the company are managed by Mr. Nikhil Samani, promoters of the Milan group.The hotel is expected to be completed by December 2014. Milan group is a Mumbai based real estate development group, promoted by the Samani family. The group is well established in real estate sector in Mumbai. COMMANDER VITRIFIED: CRISIL Puts 'BB' Ratings on INR325MM Loans --------------------------------------------------------------- CRISIL has assigned its 'CRISIL BB/Stable/CRISIL A4+' ratings to the bank facilities of Commander Vitrified Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 222.5 CRISIL BB/Stable Proposed Long-Term 7.5 CRISIL BB/Stable Bank Loan Facility Cash Credit 95.0 CRISIL BB/Stable Letter of credit & 25 CRISIL A4+ Bank Guarantee The ratings reflect CVPL's low off take risk because of its agreement with Somany Ceramics Ltd, the extensive experience of its promoters in the ceramic tile industry and favorable location. These rating strengths are partially offset by the company's weak financial risk profile, marked by high gearing, and susceptibility of its operating margin to raw material price volatility and low bargaining power in a highly competitive industry. Outlook: Stable CRISIL believes that CVPL will continue to benefit over the medium term from extensive experience of promoters in tiles industry and its tie-up with Somany. The outlook may be revised to 'Positive' if the company generates higher-than-expected cash accruals or there is equity infusion leading to significant improvement in financial risk profile. Conversely, the outlook may be revised to 'Negative' if CVPL's revenues and profitability are less than anticipated, or if its working capital requirements are higher than expected, or higher than expected debt funded capital expenditure, leading to further weakening of its financial risk profile. Incorporated in 2011, CVPL, based in Morbi (Gujarat), manufactures value-added digital vitrified tiles. The company started production in June 2012 at its Morbi plant. CVPL reported a profit after tax (PAT) of INR9.9 million on net sales of INR500.9 million for 2012-13 (refers to financial year, April 1 to March 31). DASMESH MECHANICAL: CRISIL Assigns 'D' Ratings to INR87MM Loans --------------------------------------------------------------- CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank facilities of Dasmesh Mechanical Works Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 14.5 CRISIL D Cash Credit 70.0 CRISIL D Letter of Credit 2.5 CRISIL D The ratings reflect instances of delay by DMWPL in servicing its debt; the delays have been caused by the company's weak liquidity. DMWPL's weak liquidity is driven by its low cash accruals, resulting from the decline in its revenues in 2012-13 (refers to financial year, April 1 to March 31), and its debt-funded capital expenditure programme undertaken over the past two years. DMWPL also has a below-average financial risk profile, marked by a high gearing and weak debt protection metrics, and a modest scale of operations. Moreover, it is exposed to cyclicality inherent in the agricultural industry and to changes in government policies. However, DMWPL benefits from the extensive experience of its promoters in the harvester combines and farm implements business and the healthy growth prospects for this industry over the medium term. DMWPL was set up in 2010 by its promoters, Mr. Amar Singh and his family members, to take over the business of their partnership firm, Dasmesh Mechanical Works, which was in the business of manufacturing of farm implements since 1970. DMWPL presently manufactures harvester combines and other farm implements and has manufacturing facility in Malerkotla (Punjab). EASTERN GOURMET: CRISIL Assigns 'B' Ratings to INR74.7MM Loans -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Eastern Gourmet Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15.7 CRISIL B/Stable Term Loan 59.0 CRISIL B/Stable The rating reflects EGPL's modest scale of operations due to initial stage of operations and expected weak financial risk profile, marked by high gearing. These rating weaknesses are partially offset by the benefits that EGPL derives from the extensive experience of its promoters in the agro-related business and healthy demand for the company's products. Outlook: Stable CRISIL believes that EGPL will benefit from the promoters' extensive experience in the agro-related business. The outlook may be revised to 'Positive' if the company ramps up its operations significantly leading to better-than-expected revenues and cash accruals. Conversely, the outlook may be revised to 'Negative' in case of lower revenues and cash accruals or larger-than-expected working capital requirement leading to pressure on the financial risk profile. Incorporated in June 2011, EGPL manufactures pasta with capacity of 1000 kg per month. The company, promoted by Mr. S N Sahoo, has a manufacturing plant in Cuttack (Odisha). The commercial operations of the plant started in November 2012. GEE CEE: CRISIL Assigns 'B+' Ratings to INR246.9MM Loans -------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Gee Cee Hydro Power Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 239.0 CRISIL B+/Stable Working Capital Facility 7.9 CRISIL B+/Stable The rating reflects GCHPPL's exposure to risks associated with the greenfield nature of the project it is implementing, and to hydrology-related risks at its project site. These rating weaknesses are partially offset by the low funding risk for the project because of the sanctioned term loan and funding support from its promoters, and the benefits it is expected to derive from the favorable demand prospects for the power industry. Outlook: Stable CRISIL believes that GCHPPL will benefit over the medium term from the favorable demand prospects for the power industry. The outlook may be revised to 'Positive' on timely completion of the project within the budgeted cost, with significant ramp-up in the company's sales and profitability. Conversely, the outlook may be revised to 'Negative' if there are significant time and cost overruns in the implementation of GCHPPL's project, or lower-than- expected ramp-up in its sales and profitability. GCHPPL was established in 2006 to set up a hydro power plant in the Rampur sub-division of Shimla district (Himachal Pradesh). The company is currently executing a hydro power project with a proposed plant capacity of 4.8 megawatts. The project is a run-of- the-river scheme for hydro power generation on the Nogli stream, a tributary of the River Sutlej. The project site is around 165 kilometres from the district headquarters of Shimla. GYAN GANGA: CRISIL Assigns 'BB+' Rating to INR96MM Term Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISILBB+/Stable' rating to the long-term bank facility of Gyan Ganga Educational Society. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 96 CRISIL BB+/Stable The rating reflects GGES's above-average financial risk profile, supported by increasing cash accruals and funding support from promoters, and extensive course offerings with improvement in occupancy levels. These rating strengths are partially offset by GGES's modest scale of operations, with revenue growth susceptible to the fragmented nature of industry, and vulnerability to regulatory risks associated with educational institutions. For arriving at the rating, CRISIL has treated the unsecured loans of INR45 million (as on March 31, 2013) extended to GGES by its promoters and related parties as neither debt nor equity, as these loans are subordinated to the bank debt and are expected to remain in the business over the long term. Outlook: Stable CRISIL believes that GGES will benefit over the medium term from its established brand 'Krishna' and increase in its occupancy levels. The outlook may be revised to 'Positive' in case the society registers more-than-expected increase in its scale of operations, while it maintains its healthy profitability. Conversely, the outlook may be revised to 'Negative' in case of adverse government regulations or further delay in grant receivables from government, leading to larger-than-expected working capital requirements. GGES was established in 2007 with the objective of running educational institutions. Currently, the society runs two educational institutions: Krishna Institute of Technology (KIoT) and Krishna Institute of Nursing Sciences & Research (KINSR). KIoT commenced operations in 2008. It currently offers bachelor level courses in five engineering branches, along with a master of business administration degree course, with a total of 480 seats per year. KINSR commenced operations in 2011. It currently offers three bachelor level courses in nursing with a total of 120 seats per year. The courses are All India Council For Technical Education (AICTE) approved and the colleges are affiliated to Uttar Pradesh Technical University (UPTU), Lucknow. KEJ MINERALS: CRISIL Assigns 'B+' Ratings to INR91MM Loans ---------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Kej Minerals Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 25.90 CRISIL B+/Stable Proposed Cash 39.10 CRISIL B+/Stable Credit Limit Bank Guarantee 1.50 CRISIL A4 Cash Credit 26.00 CRISIL B+/Stable The ratings reflect KEJ's fluctuating operating profitability due to exposure to iron ore price volatility, large working capital requirements, and susceptibility to government policies and clearances. The ratings also factor in KEJ's weak financial risk profile, marked by a small net worth and high gearing. These rating weaknesses are partially offset by the benefits that KEJ derives from its promoters' extensive experience in the industry and its location advantage of beneficiation plant. Outlook: Stable CRISIL believes that KEJ will continue to benefit over the medium term from the extensive experience of its promoters in this line of business and location advantage of its plant. The outlook may be revised to 'Positive' in case KEJ's financial risk profile improves significantly, most likely because of capital infusion by the promoters' and better-than-expected revenues and profitability. Conversely, the outlook may be revised to 'Negative' in case the company's profitability declines due to raw material price volatility or its revenues decline, resulting in lower-than-expected cash accruals, or if there is a stretch in the company's working capital cycle, or if it undertakes a larger- than-expected, debt-funded capital expenditure, leading to deterioration in its financial risk profile. KEJ was incorporated in 2008, with by Mr. N Kejriwal as managing director. The company set-up an iron ore beneficiation unit and commercial operations commenced in 2010. The company primarily upgrades iron ore (waste dump) through resizing, washing and beneficiation. The company is located in Bengaluru (Karnataka). METCAST METALS: CRISIL Assigns 'D' Ratings to INR90MM Loans ----------------------------------------------------------- CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the long- term bank facilities of Metcast Metals Pvt Ltd. The ratings reflect instances of delay by MMPL in servicing its term debt; the delays have been caused by the company's weak liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 60 CRISIL D Cash Credit 15 CRISIL D Letter of Credit 15 CRISIL D MMPL also has large working capital requirements and is exposed to stabilisation risks as it is in its initial stage of operations. However, the company benefits from its promoters' extensive experience in various industries. Incorporated in 2007, and promoted by Mr. Rakesh Shrivastav and his son Mr. Rahul Shrivastav, MMPL manufactures stainless steel and alloy steel castings used in the steel, power, and engineering industries. The company started its operations from April 2012 and has its foundry at Khurda (Odisha). MODERN STEELS: CRISIL Cuts Ratings on INR1.28BB Loans to 'B+' ------------------------------------------------------------- CRISIL has downgraded the ratings on the bank facilities of Modern Steels Ltd to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB- /Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 730.0 CRISIL B+/Stable (Downgrade from 'CRISIL BB-/Stable') Term Loan 418.8 CRISIL B+/Stable (Downgrade from 'CRISIL BB-/Stable') Letter of Credit 515.0 CRISIL A4 (Downgrade from 'CRISIL BB-/Stable') Working Capital 34.2 CRISIL B+/Stable (Downgrade Term Loan from 'CRISIL BB-/Stable') Funded Interest 102.0 CRISIL B+/Stable (Downgrade Term Loan from 'CRISIL BB-/Stable') The ratings downgrade reflect estimated deterioration in MSL's financial risk profile for 2012-13 (refers to financial year, April 1 to March 31), marked by significant deterioration in the company's gearing and debt protection metrics. Over the near to medium term, CRISIL also believes that MSL's financial risk profile will remain weaker than earlier expected. The estimated deterioration in MSL's financial risk profile is primarily on account of the company's significant estimated losses in 2012-13 leading to significant reduction in its net worth as on March 31, 2013. Although MSL does not have any fixed debt obligations till September 2014, following the restructuring of its debt under the Corporate Debt Restructuring mechanism on March 28, 2013, its liquidity is expected to remain weak on account its large working capital requirements, marked by gross current asset days expected to remain high in the range of 140 to 150 over the near to medium term. The ratings reflect MSL's weak financial risk profile, marked by an average net worth, a high gearing and weak debt protection metrics, large working capital requirements, susceptibility to volatility in raw material prices, dependence on power availability, and average operating efficiency. However, these rating weaknesses are partially offset by the company's established position in the steel rolled products industry along with its recent venture into the business of manufacturing critical grades of alloy steels for the relatively stable two- wheeler industry. Outlook: Stable CRISIL believes that MSL's financial risk profile will remain weak over the medium term, because of the company's debt-funded capital expenditure (capex) plans and large working capital requirements along with low profitability expected over the same period. The outlook may be revised to 'Positive' if MSL registers significant improvement in its scale of operations and profitability, leading to higher-than-expected cash accruals. Conversely, the outlook may be revised to 'Negative' if the company's liquidity weakens on account of larger-than-expected working capital requirements, or substantial debt contracted to fund its capex. MSL was set up in 1974 by Mr. Amarjit Goyal. It is listed on the Bombay Stock Exchange, with its promoters holding almost 62.33 per cent of its shares; the company is headed by Mr. Krishan Kumar Goyal, son of Mr. Amarjit Goyal. MSL manufactures low-alloy and carbon-steel-rolled products for commercial vehicles such as trucks and tractors, passenger vehicles, two-wheelers, and engineering companies. MSL is estimated to report a net loss of around INR140 million on net sales of INR2.74 billion for 2012-13, as against net loss of INR98 million on net sales of INR3.38 billion for 2011-12. SAKET PROMOTERS: CRISIL Rates INR450MM LT Bank Loan at 'B+' ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank loan facilities of Saket Promoters Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long-Term 450 CRISIL B+/Stable Bank Loan Facility Proposed Short-Term 150 CRISIL A4 Bank Loan Facility The ratings reflect SPL's large working capital requirements and its exposure to project implementation risks. These rating weaknesses are partially offset by the extensive experience of the company's promoters in the real estate business. Outlook: Stable CRISIL believes that SPL will benefit over the medium term from the extensive experience of its promoters in the real estate business. The outlook may be revised to 'Positive' if the company reports higher-than-expected revenues and profitability and improves its working capital management, thereby strengthening its cash flows. Conversely, the outlook may be revised to 'Negative' if there are time or/and cost overruns in SPL's project execution, or/and the off-take from its ongoing project is below expectations, and if it undertakes a new, larger-than-expected, debt-funded capital expenditure programme. Incorporated in 2002, SPL is involved in real estate development and execution of civil construction projects in Kolkata (West Bengal). The company's day-to-day activities are being managed by Mr. Sashi Kant Khetan. SANMATI COAL: CRISIL Rates INR70MM Cash Credit at 'CRISIL B+' ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Sanmati Coal & Cokes Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL B+/Stable Letter of Credit 15 CRISIL A4 The ratings reflect Sanmati's below-average financial risk profile, marked by low net worth, high gearing, and weak debt protection metrics. The ratings also reflect Sanmati's modest scale of operations in a highly competitive and fragmented industry, and its low operating margin. These rating weaknesses are partially offset by the extensive experience of Sanmati's promoters in the coal trading business, and the benefits expected from the increasing demand for coal in India. Outlook: Stable CRISIL believes that Sanmati will continue to benefit over the medium term from its promoters' extensive experience in the coal trading business. The outlook may be revised to 'Positive' if the company's financial risk profile improves substantially, driven most likely by higher-than-expected cash accruals or capital infusion, along with efficient working capital management. Conversely the outlook may be revised to 'Negative' in case of further weakening in the company's financial risk profile, particularly liquidity, because of larger-than-expected working capital requirements or lower-than-expected cash accruals. Incorporated in 2012 by Mr. Saurabh Jain, Sanmati trades in non- coking coal. The company is headquartered at Indore and was promoted to take over the business of the Mr. Saurabh Jain's proprietorship firm engaged in the same business. SURYABALAJI STEELS: CRISIL Puts 'B+' Ratings on INR139.4MM Loans ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Suryabalaji Steels Pvt Ltd (SSPL, a part of the Padmabalaji group). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 39.4 CRISIL B+/Stable Cash Credit 100.0 CRISIL B+/Stable Letter of Credit 200.0 CRISIL A4 The ratings reflect the Padmabalaji group's below-average financial risk profile, marked by moderate gearing and weak debt protection metrics and susceptibility of the group's revenues and profitability to end-user industries. These rating weaknesses are partially offset by the benefits that the Padmabalaji group derives from its promoters' extensive experience in steel industries. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of SSPL and Sri Padmabalaji Steels Pvt Ltd (SPSPL), together referred to as the Padmabalaji group, which are engaged in the same line of business and managed by the same promoters with fungible funds. Outlook: Stable CRISIL believes that the Padmabalaji group will continue to benefit, over the medium term, from its diverged products and extensive customer relationship. The outlook may be revised to 'Positive' if the group records a larger-than-expected improvement in revenue and profitability, in addition to sustainable improvement in its debt protection metrics. Conversely, the outlook may be revised to 'Negative' if the group records suboptimal capacity utilisation because of power and raw material shortages resulting in lower-than-expected cash accruals or if it undertakes any significant debt-funded capital expenditure resulting in deterioration in its financial risk profile. SPSPL was set up in 1995 by Mr. M Ravichandhiran and primarily manufactures steel and ferro alloy castings, mild-steel (MS) ingots, and thermo-mechanically treated (TMT) bars and roads. The company has three manufacturing facilities (one each in Annur [Coimbatore, Tamil Nadu], Karaikal [Pondicherry], and Kanjikode [Kerala] and uses different facilities to manufacture different products. SPSPL is a part of the Padmabalaji group, which is based in Coimbatore (Tamil Nadu). SSPL was set up in 2007 and manufactures only MS ingots. SSPL has a manufacturing facility at Pudukottai (Tamil Nadu). On a consolidated basis, the Padmabalaji group reported profit after tax (PAT) of INR50.19 million on net sales of INR3.57 billion for 2011-12 (refers to financial year, April 1 to March 31) as against PAT of INR47.4 million on net sales of INR2.81 billion for 2010-11. VIRAT ALLOYS: CRISIL Cuts Ratings on INR93.4MM Loans to 'B+' ------------------------------------------------------------ CRISIL has downgraded its ratings on the bank facilities of Virat Alloys Pvt Ltd to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB- /Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 9.5 CRISIL A4 (Downgraded from 'CRISIL A4+') Cash Credit 50.0 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Term Loan 43.4 CRISIL B+/Stable(Downgraded from 'CRISIL BB-/Stable') The downgrade reflect deterioration in VAPL's financial risk profile, driven by its stretched liquidity. The liquidity was stretched on account of modest accruals led by lower than expected growth in its scale of operation coupled with less than expected improvement in its margins for near to medium term which are not sufficient to service its term debt obligations. However the term debt obligations are serviced in timely manner by strong promoter support through fund infusion in form of either unsecured loans or capital. Also the average bank lines utilization for twelve months ended on March 2013 were moderate at 85 per cent thereby providing some support to its overall liquidity. Going forward, the financial risk profile is expected to be constrained by its modest networth, high gearing, weak debt protection metrics and stretched liquidity. The ratings continue to reflect VAPL's below-average financial risk profile, marked by a high gearing, and the company's modest scale of operations and susceptibility to intense market competition and to volatility in raw material prices. These rating weaknesses are partially offset by the benefits that VAPL derives from its promoters' extensive experience in the steel industry. Outlook: Stable CRISIL believes that VAPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the company registers significant improvement in its liquidity, led by higher-than- expected growth in its revenues and profitability, along with improvement in its capital structure. Conversely, the outlook may be revised to 'Negative' if VAPL registers further deterioration in its liquidity, most likely on account of decline in its cash accruals as a result of less-than-expected offtake or decline in its operating margin, or if it undertakes a larger-than-expected, debt-funded capital expenditure programme. Incorporated in 2008, VAPL is a semi-integrated company, engaged into manufacturing of stainless steel ingots & flats. VAPL started its activities with SS ingots manufacturing activities in 2009 and later on started producing SS flat products with its manufacturing facilities are located at Kalol (Gujarat). The promoters have an experience of steel industry for last two decades through other group companies. For 2011-12, VAPL reported a profit after tax (PAT) of INR1.1 million on net sales of INR363.7 million, against a profit after tax of INR3.4 million on net sales of INR419.7 million for 2010- 11. YENEPOYA INSTITUTE: CRISIL Assigns BB Ratings to INR90MM Loans -------------------------------------------------------------- CRISIL has assigned its 'CRISIL BB/Stable' rating to the bank facilities of Yenepoya Institute of Medical Sciences and Research Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15 CRISIL BB/Stable Term Loan 75 CRISIL BB/Stable The rating reflects the benefits that Yenepoya Hospital derives from its established position in the healthcare industry and moderate financial risk profile, marked by a moderate gearing and healthy debt protection metrics. These rating strengths are partially offset by Yenepoya Hospital's small scale of operations and geographic concentration. Outlook: Stable CRISIL believes that Yenepoya Hospital will benefit from its long- standing presence in the healthcare market of Mangalore (Karnataka). The outlook may be revised to 'Positive' in case Yenepoya Hospital scales up its operations significantly while maintaining profitability, resulting in an improvement in capital structure. Conversely, the outlook may be revised to 'Negative' in case Yenepoya Hospital reports a decline in its cash accruals or undertakes a larger-than-expected debt to fund its capital expenditure. Yenepoya Hospital was set up as a private limited company in 1974 by Mr. Mohammed Kunhi and Mr. Abdulla Kunhi. Its 200-bed multi- specialty hospital in Mangalore commenced operations in 1993. The hospital also runs a nursing college offering undergraduate and postgraduate degrees. Yenepoya Hospital reported a profit after tax (PAT) of INR7.7 million on net sales of INR186.87 million for 2011-12 (refers to financial year, April 1 to March 31), as against a PAT of INR5.8 million on net sales of INR159.39 million for 2010-11. ================= I N D O N E S I A ================= * Bank Indonesia Summoned Over 4 Troubled National Banks Issues --------------------------------------------------------------- The Jakarta Post reports that Indonesia's House of Representatives' Commission XI on finance and banking is due to summon Bank Indonesia (BI) representatives to discuss numerous issues surrounding four national banks. The banks in question are Bank Mega, Bank Panin, Bank Jabar and Banten and Bank Mestika Dharma, the report discloses. "We want to know more about the problems surrounding these banks," kontan.co.id quoted Commission XI deputy chairman Harry Azhar Azis from the Golkar Party as saying, The Jakarta Post relays. According to the report, Bank Mega has been found guilty of internal negligence surrounding a IDR111 billion deposit belonging to oil and gas services company PT Elnusa. Bank Panin was the target of a IDR30 billion fraud case at one of its branch offices in Banjarmasin, South Kalimantan. Bank Jabar and Banten has been struggling with a on-performing loan case that could cost the state IDR55 billion in losses, while Bank Mestika suffered a robbery of IDR4.5 billion conducted by one of its employees. Meanwhile, BI Deputy Governor Halim Alamsyah said each of the cases at the banks were under police investigation, the report adds. ========= J A P A N ========= CITIGROUP GLOBAL: S&P Affirms 'BB+' Rating on Jr. Sub. Note Prog. ----------------------------------------------------------------- Standard & Poor's Ratings Services said it has revised to stable from negative the outlooks on its 'A' long-term counterparty credit ratings on Citibank Japan Ltd. and Citigroup Global Markets Japan Inc., which are operating subsidiaries of U.S.-based Citigroup Inc. At the same time, S&P affirmed the 'A' long-term and 'A-1' short-term counterparty credit ratings on Citibank Japan and Citigroup Global Markets Japan, and the 'A-' long-term and 'A- 2' short-term counterparty credit ratings on Citigroup Japan Holdings Corp. The outlook on the long-term rating on Citigroup Japan Holdings Corp. remains negative. S&P also affirmed the ratings on Citigroup Global Markets Japan's medium-term note program ('A' for senior unsecured; 'BB+' for junior subordinated) and the ratings on Citigroup Japan Holdings' straight bonds ('A-' for senior unsecured). S&P revised the outlooks on the two Japanese operating subsidiaries to reflect its outlook revision on U.S.-based Citigroup Inc.'s (A-/Negative/A-2) banking subsidiaries to stable from negative; Citigroup indirectly owns 100% of Citibank Japan and Citigroup Global Markets. Also, S&P affirmed its ratings on Citigroup Japan Holdings, the Japanese holding company that owns certain nonbanking business entities such as Citigroup Global Markets Japan, and maintained its negative outlook, mirroring its rating action on the U.S. holding company, which is the direct parent of the Japanese holding company. The negative outlook on the U.S. holding company reflects S&P's view that the likelihood of extraordinary government support to major U.S. bank holding companies may weaken. "We view Citigroup's three Japanese entities as "core" to Citigroup, owing to the high degree of cohesiveness. Under the rating criteria we apply to financial groups, we generally equalize the ratings on a group's "core" subsidiary with the group credit profile (GCP; a GCP is Standard & Poor's opinion of a group's creditworthiness as if the group were a single legal entity) to reflect our view that there is an extremely high likelihood that the "core" subsidiary will receive extraordinary support from the group if necessary. Based on this, we equalize the ratings on the Japanese operating subsidiaries, Citibank Japan and Citigroup Global Markets Japan, with those on the group's main banking subsidiaries. Also, we equalize the ratings on Citigroup Japan Holdings, which is an intermediate holding company of Citigroup in Japan, with those on the U.S. holding company," S&P noted. S&P may consider downgrading the three Japanese entities if it lowers the GCP, or if the Japanese market becomes less important to the group and leads to less cohesiveness with Citigroup or a lower likelihood of receiving extraordinary support from the group. Conversely, S&P may consider upgrading Citibank Japan and Citigroup Global Markets Japan if it raises the ratings on the group's main banking subsidiaries. Also, S&P may revise the outlook on Citigroup Japan Holdings to stable if it raises its outlook on the U.S. holding company. RATINGS LIST Ratings Affirmed; Outlooks Revised To From Citibank Japan Ltd. Citigroup Global Markets Japan Inc. Issuer Credit Rating A/Stable/A-1 A/Negative/A-1 Ratings Affirmed Citigroup Japan Holdings Corp. Issuer Credit Rating A-/Negative/A-2 * MUFG Fine Highlights Japan Banks' Overseas Growth Risks --------------------------------------------------------- Bank of Tokyo-Mitsubishi UFJ's (BTMU) USD250 million settlement with New York State last week over the breach of US sanctions, highlights operational risk that international expansion brings, Fitch Ratings says. The overseas expansion strategies of Japan's "mega banks" could lead to rising costs for complying with many different legal and regulatory frameworks, and also in strengthening compliance systems to support operations in diverse markets. "In addition to the fine, the bank will also retain a compliance consultant to conduct a one-year review. Overall, we believe the penalty and additional compliance costs should be manageable in light of the size of the MUFG group and its earnings," Fitch says. "Furthermore, we expect no significant reputational damage nor impact on Mitsubishi UFJ's business model. The group's capitalisation and internal capital generation have improved in the last four years, strengthening its loss-absorption capacity, and the settlement does not affect its 'A' rating. "Japan's mega banks are pursuing their search for offshore growth opportunities to compensate for stagnant domestic operations and to help diversify earnings. We expect 10%-20% growth in their overseas lending in the current fiscal year, with the focus market being emerging Asia. The agency also believes the enhanced capitalization allows more options for overseas expansion apart from organic growth. Mitsubishi UFJ was recently reported as a potential buyer of a 51% stake in Thailand's fifth-largest bank, Bank of Ayudhya, although this has not been confirmed by the group." Operational risk may rise if corporate governance is not bolstered to support such growth, especially as there is increasing focus on regulatory compliance and related matters for multinational banks. BTMU's settlement follows the fines levied on HSBC (USD1.9bn) and Standard Chartered (USD667m) on breaches of anti-money-laundering regulations in 2012. Another key risk of rapid overseas expansion is credit risk associated with new borrowers in new markets. This has been relatively well-managed so far, with lower impairment loans in overseas lending. But the banks' tolerance for risk may rise, as loan growth is unlikely to be sustained by lending to blue-chip companies alone. BTMU is a wholly owned subsidiary of Mitsubishi UFJ, one of Japan's three mega banks along with Sumitomo Mitsui and Mizuho. ==================== S O U T H K O R E A ==================== MAGNACHIP SEMICONDUCTOR: Moody's Lifts CFR, Sr. Bond Rating to B1 ----------------------------------------------------------------- Moody's Investors Service has upgraded the corporate family rating of MagnaChip Semiconductor Corporation and the senior unsecured bond rating of its supported subsidiary, MagnaChip Semiconductor S.A., to B1 from B2. The ratings outlook is stable. Ratings Rationale: "The ratings upgrade reflects our expectation that MagnaChip's financial and liquidity profiles will remain solid, owing to continued growth in its mobile applications segments such as tablets and smartphones; its strong relationships with its major customers; and its focus on the less capital-intensive chips business," says Yoshio Takahashi, a Moody's Assistant Vice President and Analyst. "In addition, the company has diversified its earnings base by strengthening its power solutions business, a situation that also supports its ratings," he adds. MagnaChip's small scale, its exposure to the volatile consumer electronics industry, and the high degree of customer concentration will remain key risk factors, however, its established relationships with major customers will continue to mitigate downside risks to earnings. Moody's expects MagnaChip's adjusted debt/EBITDA and adjusted debt/capitalization to remain in the 1.5x-2.0x range and below 45%, respectively, given its strong operating performance. MagnaChip is also likely to maintain its solid balance sheet liquidity of $150 million-$200 million in cash and cash equivalents, because its capital expenditure is relatively low as a semiconductor company owing to its focus on analog and mixed signal chips. In addition, the company only has $204 million in total debt consisting entirely of the notes maturing in 2018. The stable outlook reflects Moody's view that the company's core businesses will generate stable earnings and cash flow, allowing it to maintain its low leverage and improve its balance sheet. Moody's also expects MagnaChip to maintain strong balance sheet liquidity. Given MagnaChip's small size and customer concentration in a volatile industry, Moody's does not anticipate any near-term upward pressure on the rating. However, positive momentum could build if the company can: (1) significantly improve its competitive position and diversify its customer base and applications; (2) maintain its strong liquidity position; and (3) improve adjusted debt/EBITDA to below 1.5x and adjusted EBIT/interest expense to over 5x, while maintaining adjusted free cash flow/debt to over 15% on a sustained basis. Downward rating pressure could arise if MagnaChip's: (1) profitability and cash flow weaken, owing to lackluster demand for its major products, resulting in adjusted debt/EBITDA of over 2.5x and adjusted EBIT/interest of below 2.5x; and (2) balance sheet liquidity deteriorates significantly, such that cash on hand falls below $100 million, as a result of aggressive investment plans, high dividend payments or negative free cash flow. The principal methodology used in these ratings was Global Semiconductor Industry Methodology published in December 2012. MagnaChip is a Korean designer and manufacturer of analog and mixed-signal semiconductor products mainly for high-volume consumer applications, such as TVs, personal computers, mobile phones and tablets. =============== X X X X X X X X =============== * Moody's Issues New Report on Risks from Emerging Markets ---------------------------------------------------------- Risks from fluctuations in business and operating conditions, weaker liquidity due to less mature financial markets and sovereign credit distress are likely to weigh more on the credit profiles of emerging markets corporates, says Moody's Investors Service in a Special Comment entitled "Credit Considerations for Corporates in Emerging Markets." Moody's has published its Special Comment in response to increased interest in the additional credit risks and analytical complexities in developing markets. Corporates in emerging markets sometimes experience greater variability in business and operating conditions due to a range of factors. Assessments of corporate credit risk in emerging markets can also be affected by broader sovereign risk considerations given that the history of sovereign credit stress has shown that there are strong credit linkages between corporates, financial institutions and sovereigns. Where the sovereign rating is not a constraint, institutional governance and transparency issues may still result in a lower rating in some cases. It is often the case in some emerging markets that information flow is less consistent, transparency is lower, and legal systems are less predictable. Moody's considers issuer-specific differences as well as differences in the local environment when assessing these risks. Another key challenge in assigning ratings to corporates in developing markets is that their economic, financial and market environments are often prone to greater volatility and exposure to potential shocks over time. In addition, Moody's notes that corporates relying on local financial markets that lack depth and are more prone to stress tend to have weaker liquidity. While demonstrated access to foreign currency capital markets can be beneficial for corporate liquidity by opening multiple financing sources, this can also result in substantial volatility in the local currency value of liabilities due to shifts in foreign exchange rates. The credit considerations noted in Moody's Special Comment are not always relevant for every issuer and are not present to the same degree in every emerging market country. In this context, Moody's also notes that events since the onset of the financial crisis in 2008 are a fresh reminder that broad economic and financial stresses can occur in developed markets as well as in emerging markets. While the document explores additional credit complexities that can often exist for corporates in emerging markets, Moody's recognizes that these risks are not exclusive to emerging markets * Upcoming Meetings, Conferences and Seminars --------------------------------------------- July 11-13, 2013 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. 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- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***