/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/131007.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 Monday, October 7, 2013, Vol. 16, No. 198 Headlines A U S T R A L I A DEVELOPMENT MANAGEMENT: Clifton Hall Appointed as Liquidators HOUSE OF LINDNER: Clifton Hall Appointed as Liquidators MIRABELA NICKEL: Moody's Cuts CFR & Sr. Debt Ratings to Caa3 MURRAWEE FARMS: In Receivership as Buyers Stay Clear NINE ENTERTAINMENT: Moody's Puts 'Ba2' Rating on US$ Term Loan NUFARM LTD: S&P Revises Outlook on 'BB' CCR to Negative RELIANCE RAIL: Moody's Raises Senior Secured Rating to 'B2' REVIC PTY: Clifton Hall Appointed as Liquidators RWS GROUP: Clifton Hall Appointed as Liquidators WALTON CONSTRUCTION: In Administration; 30 Jobs Axed * Moody's: Prime Residential Mortgage Arrears Improved in July C H I N A CHINA PROPERTIES: S&P Places 'B-' Rating on US$-Denominated Notes SINOCOKING COAL: Friedman LLP Raises Going Concern Doubt I N D I A AHIMSA INDUSTRIES: CARE Assigns 'BB' Rating to INR12.54cr Loans AKANKSHA AUTOMOBILES: ICRA Reaffirms 'BB' Rating on INR3cr Loan ALBA ASIA: CARE Revises Rating on INR34.56cr Loans to 'BB-' BIR STEELS: ICRA Suspends 'B+' Rating on INR3.17cr Loans ESSAR STEEL: CARE Cuts Ratings on INR31,500cr Loans to 'D' JSL LIFESTYLE: CARE Revises Rating on INR10cr Bank Loan to 'BB' M&M CHOCOLATES: ICRA Upgrades Rating on INR13.6cr Loans to 'B' MANAV BIO-CHEM: ICRA Assigns 'BB-' Rating to INR1cr Loan MSM STEELS: CARE Revises Rating on INR67.71cr Loans to 'B+' NIKI AGRO: CARE Rates INR11.70cr LT Bank Loans at 'BB' PANDA TECHNOLOGIES: ICRA Assigns 'BB' Ratings to INR8.4cr Loans RAJENDRA ENGINEERING: CARE Rates INR5.45cr LT Bank Loans at 'BB-' SUNIL HEALTHCARE: ICRA Reaffirms 'BB+' Rating on INR7.8cr Loans TUTICORIN COAL: CARE Revises Rating on INR281cr Loans to 'BB-' VANITA AGROCHEM: ICRA Revises Ratings on INR15.97cr Loans to BB+ VIDHYA PHARMACHEM: ICRA Suspends 'BB' Rating on INR54cr Loans WEST QUAY: CARE Revises Rating on INR116.5cr Loans to 'BB-' J A P A N HN TRUST: Fitch Affirms 'BB' Rating on Class A3 Senior BIs * Moody's Says Japanese RMBS Default Rose Slightly in July N E W Z E A L A N D SOLID ENERGY: Annual Loss Grows to NZ$335 Million P H I L I P P I N E S NATIONAL POWER: Moody's Hikes Senior Unsecured Rating From Ba1 POWER SECTOR ASSETS: Moody's Ups Sr. Unsec. Bond Rating From Ba1 RURAL BANK OF HAGONOY: PDIC to Pay Depositors Starting Oct. 10 RURAL BANK OF STO. TOMAS: PDIC to Pay Depositors Starting Oct. 9 * Moody's Hikes Ratings on 4 Philippine Banks to Investment Grade * PHILIPPINES: Moody's Hikes Rating From 'Ba1' S I N G A P O R E FIRST SHIP: S&P Keeps 'B' CCR on CreditWatch Negative GLOBAL A&T: S&P Assigns 'B' Rating to US$502.257MM Notes T A I W A N E.SUN COMMERCIAL: Moody's Affirms 'D+' Bank Fin. Strength Rating - - - - - ================= A U S T R A L I A ================= DEVELOPMENT MANAGEMENT: Clifton Hall Appointed as Liquidators ------------------------------------------------------------- Timothy Clifton and Mark Hall of Clifton Hall were appointed as Joint and Several Liquidators of Development Management (Australia) Pty. Ltd. on Sept. 30, 2013. HOUSE OF LINDNER: Clifton Hall Appointed as Liquidators ------------------------------------------------------- Timothy Clifton and Mark Hall of Clifton Hall were appointed as Joint and Several Liquidators of House of Lindner Proprietary Limited on Sept. 27, 2013. MIRABELA NICKEL: Moody's Cuts CFR & Sr. Debt Ratings to Caa3 ------------------------------------------------------------ Moody's Investors Service has downgraded Mirabela Nickel Limited's Corporate Family Rating and Senior Unsecured debt ratings to Caa3 from Caa1. The outlook on the ratings is negative. The downgrade reflects heightened likelihood of default on Mirabela's rated senior unsecured notes. The downgrade follows the announcement by the company that the potential termination of the sales agreement with Votorantim Metais Niquel S.A. (Votorantim) may constitute an event of default under its subsidiaries' bank facility in place with Banco Bradesco S.A (Bradesco). The downgrade concludes the review for downgrade initiated on 27 September 2013 when Mirabela announced that it had received notification from one of its two customers, Votorantim, that it intends to close its smelting facilities from November 2013 and considers that the concentrate sales agreement in place with Mirabela will terminate at the end of November 2013. Through its subsidiary Mirabela Mineraco do Brasil Ltda, Mirabela has a USD50 million facility with Bradesco, which is secured by the Company's contract with Votorantim. Ratings Rationale "The downgrade reflects the heightened probability of default following the company's announcement and increased expected loss for the company's creditors in the near term", says Matt Moore a Moody's Vice President and Senior Analyst. " In the event that Bradesco chooses to enforce its rights by accelerating repayment of the facility, Moody's believes this would trigger the cross default provisions under Mirabela's USD395 million senior unsecured notes", adds Moore who is also Lead Analyst for the company. "The Caa3 rating captures Mirabela's reliance upon successful negotiations with Banco Bradesco to avert a potential default under Moody's definitions. The rating downgrade also reflects our opinion that, even should the company be successful in avoiding acceleration of the facility and cross default on the senior unsecured notes, the company will still have inadequate liquidity to meet its debt repayment obligations and capital expenditure requirements in FY14", says Moore. At current nickel prices, Moody's expects the company will generate negative operating cash flow and this combined with the company's capital expenditure requirements and debt repayment obligations over the next 6 to 9 months will lead to negative free cash flow in excess of the company's current cash balances. The company's cash position has deteriorated to around USD80 million as of the end of August 2013, down from USD108 million at June 30, 2013. Mirabela is scheduled to repay the USD50 million Bradesco facility within 2014. Payments are scheduled to be made in 3 equal installments payable in January, July and December. In addition, the company has announced that it believes capital expenditure requirements in 2014 could be materially higher than the USD35 to USD45 million expected for the year ended December 31, 2013. The negative outlook reflects the imminent potential for acceleration of the Bradesco Facility and subsequent likelihood of cross default on the company's senior unsecured notes. Mirabela Nickel Ltd based in Perth, Western Australia, is a single asset nickel producer. Mirabela's principal asset is the Santa Rita Project in Bahia State, Brazil. MURRAWEE FARMS: In Receivership as Buyers Stay Clear ----------------------------------------------------- Bridget Carter at The Australian reports that the Murrawee Farms, one of Australia's largest orchard properties, which has been owned by a family in regional Victoria for two decades, has collapsed into the hands of receivers after a recent marketing campaign failed to result in a sale. Real estate firm CBRE had the property on the market via an expressions of interest campaign in June but the financier, believed to be the National Australia Bank, called in the loans last month and the real estate firm would now sell the property on behalf of receiver Sellers Muldoon Benton, according to The Australian. The report relates that previously the land was thought to be worth about US$15 million. The Australian notes that in recent marketing material, CBRE said the operation included about 150ha planted with several stone fruit and table grape varieties and had contract processing capabilities of up to six million kilograms of fruit nationally. The property was owned by Tony Tripodi and his wife Gaye, who has been the Victoria Farmers Federated stone fruit president. The report recalls that during an inquiry into the Swan Hill farming community two years ago, Ms. Tripodi said profitability in horticulture had been, and would continue to be, "very tough" and that Murrawee Farms had been affected by drought during the past decade. Ms. Tripodi also blamed pricing control by the supermarkets on the difficulties, saying "we are price takers, purely and simply," the report relates. The report notes that properties on sale throughout Australia include several big dairy farms such as Tasmania's Van Diemen's Land Company. The report relates that sources said last month the property was being circled by the China Investment Corporation and Fonterra, but CIC has since walked away from a potential deal. The Murrawee Farms property, 336km northwest of Melbourne, includes four irrigated horticultural properties across 217.3ha in Victoria's renowned Swan Hill stone fruit region. NINE ENTERTAINMENT: Moody's Puts 'Ba2' Rating on US$ Term Loan -------------------------------------------------------------- Moody's Investors Service has assigned a definitive Ba2 senior secured rating to a US$ Term Loan Facility (equivalent to around AUD198.7 million) entered into by Nine Entertainment Group Pty Ltd and Nine Entertainment (Delaware) Corporation, 100% owned and guaranteed subsidiaries of Nine Entertainment Co Holdings Limited ("NEC"). The facility was originally assigned a provisional (P)Ba2 rating on September 5, 2013; the assignment of the definitive Ba2 rating follows review of the final Term Loans documentation. The loan rated is a US$185 million Senior Secured Facility due February 2020. The loan is guaranteed by NEC and certain of its subsidiaries. The loan is secured on a first-priority basis by substantially all the material-owned assets of NEC and guarantors. Ratings Rationale "The acquisition of WIN Perth, which will be largely debt-funded via this issuance, can be accommodated within the tolerance levels set for the rating but reduces headroom to accommodate any material deterioration in operating performance," says Maurice O'Connell, a Moody's Vice President -- Senior Analyst. " "NEC's appetite for debt-funded acquisitions has raised the level of uncertainty built into the company's rating and diminishes Moody's expectation of an ongoing stable business profile. Further largely debt funded acquisitions could place material pressure on the company's rating and/or outlook and would raise the likelihood of a negative rating action," said Mr. O'Connell. NEC's Ba2 rating reflects its strong operating profile combined with a moderately conservative financial profile post implementation of a Scheme of Arrangement completed in January 2013. The company's strong operating profile is driven by its national scale operations which provide it with a good ability to withstand and absorb localised weak operating conditions or sporadic market disruptions, across its entire network. At the same time, NEC has a solid track record of strong audience and revenue share as well as a good degree of diversification across different advertising channels. Nevertheless we consider that NEC faces strong competition from other Free to Air networks which could impact on margins depending on the success of future content. With no plans for dividends in the near term and manageable capex, the leverage ratio should gradually improve. Also driving the rating is NEC's liquidity profile which Moody's considers to be strong. The rating considers the earnings diversification provided by NEC's Events and Digital operations. Finally, the rating also considers a degree of uncertainty around the future capital structure due to the complex shareholder structure and the potential for the capital structure to change following a possible IPO in the short to medium term. The stable rating outlook reflects the solid liquidity and our expectation that NEC will continue its focus on maintaining sufficient financial leverage to cushion any adverse industry developments. Ratings could be downgraded if debt-to-EBITDA ratios are sustained above 4.25x (including Moody's standard adjustments) which could be due to operating weakness, acquisitions or cash distributions to shareholders. Failure to maintain good liquidity including a comfortable cushion to financial covenants to absorb a cyclical downturn in revenue could also result in a downgrade. Further largely debt funded acquisitions would likely reduce headroom within the rating and raise the potential for negative rating action. NUFARM LTD: S&P Revises Outlook on 'BB' CCR to Negative ------------------------------------------------------- Standard & Poor's Ratings Services said that it has revised the outlook on its 'BB' long-term corporate credit rating on Australia-based Nufarm Ltd. to negative from stable. At the same time, S&P has affirmed the 'BB' corporate credit rating, issue ratings, and related recovery ratings. "The outlook revision to negative reflects Nufarm's weaker cash flows and higher debt in year ended July 31, 2013 because of a build-up of inventories that adversely affected its working capital management," Standard & Poor's credit analyst Brenda Wardlaw said. "While there are early signs of positive demand in some markets, there remains the risk that Nufarm may find it challenging to restore its financial metrics during fiscal 2014." Competitive market dynamics, such as those in Australia, may limit recovery of margins. In addition, the company has decided to increase its dividends by 33.3%. S&P views the dividend increase, while not material in cash terms, reflects Nufarm's expectations of an improvement in financial performance, which may not be fully achieved given its exposure to competitive markets and unpredictable weather conditions. In fiscal 2013, Nufarm's EBITDA from Australia and New Zealand was 19%, North America 18%, Europe 28%, South America 15%, and Asia 8% (excluding seeds 12%). Strategic alliances with its largest shareholder Sumitomo Chemical Co. Ltd. (23% interest, not rated) are beneficial to Nufarm. The loss of distribution arrangements with Monsanto Co. from August 2013 and a subsidiary of BASF SE from March 2014 will contribute to a more competitive market dynamic in the Australian market. Nufarm's cash flow protection metrics in fiscal 2013 were weak for S&P's assessment of a "significant" financial profile. S&P views restoration of these metrics will be a key determinant of Nufarm's credit quality in the short term. The significant deterioration in free cash flow generation was of particular concern from a credit perspective. Working capital management also remains a key consideration for the rating. Nufarm's financial results evidence the significant seasonality of the business, with its strong bias to second-half earnings. Ms. Wardlaw added: "The negative outlook reflects our view that Nufarm may face challenges in restoring its metrics to those comfortably in line with our expectations for the 'BB' rating. If the company is unable to restore its adjusted debt to EBITDA to about 3.5x and generate meaningful positive free operating cash flow metrics, or its liquidity deteriorates during the next 12 months, we may lower the rating to 'BB-'." S&P may revise the outlook to stable if Nufarm were to restore its metrics and demonstrate its commitment to sustaining its metrics in line with S&P's expectations for the rating. A stable outlook would assume that Nufarm's appetite for acquisitions remained modest and focused predominantly on small bolt-on opportunities. A significant improvement in working capital management to mitigate its exposure to the volatile agribusiness sector would be evidenced by adjusted debt to EBITDA about 3.5x, and a return to generating meaningful positive free operating cash flow. RELIANCE RAIL: Moody's Raises Senior Secured Rating to 'B2' ----------------------------------------------------------- Moody's Investors Service has upgraded the senior secured rating of Reliance Rail Finance Pty Ltd (RRF) to B2 from B3. Moody's has also upgraded RRF's subordinated debt rating to Caa1 from Caa2. The ratings outlook is positive. Ratings Rationale "The ratings upgrade reflects Reliance Rail's improved funding position, following the final scheduled drawdown under its bank facilities to fund the completion of the Waratah trains project, which is being delivered under a public private partnerships (PPP) framework." says Spencer Ng, a Moody's Assistant Vice President and Analyst. RRF is the funding vehicle for Reliance Rail, which in turn is the consortium appointed to manufacture and maintain 78 new trains for Sydney Trains, whose obligations under the project are backed by the State of New South Wales (Aaa stable). "Reliance Rail's bank facilities, totaling AUD357 million, have been an important source of funding for the train project. The previous rating incorporated concerns that Reliance Rail may not be able to draw down the facility after the banks issued a reservation of rights notice in 2011. Now that the company has progressively drawn down under the facilities in full, it has the necessary funds to complete its manufacturing obligations," adds Ng. The positive outlook reflects the increased likelihood that Reliance Rail can successfully complete the remaining 23 trains (as of end September) and start transitioning into the full operations phase over the next nine months. "Reliance Rail has established consistent train production over the last year, averaging approximately three trains per month. Its production track record so far supports its ability to deliver the remaining trains within the revised completion target of the middle of next year," says Ng. After completion of the trains, Reliance Rail's rating would be driven by the performance of its fleet in service and its refinancing risk when AUD1.15 million (maturing in 2018 and 2019) is due to be refinanced. If the trains are delivered on time based on current schedule, Reliance Rail's refinancing task would benefit from its experience in operating the trains that would already be in service. Having said that, operational challenges could emerge, at least during the initial period of operations, given the logistical challenge of managing a larger fleet of 78 trains. Moody's will also take into consideration the project's refinancing exposure leading up to 2018. If Reliance Rail could secure the vital AUD175 million conditional equity injection from the State of New South Wales, as previously agreed, then that would alleviate refinancing risk. Nevertheless, the project is still exposed to deterioration in debt market conditions, which would affect both its ability to secure the required funds as well as its ability to meet the pre-conditions for the State capital injection. The B2 rating could be upgraded upon completion of the final train. On the other hand, the rating could experience downward pressure if: 1) there are further delays in the completion of the remaining trains, 2) the operating performance of the completed trains deteriorates substantially from current levels, or 3) there is a significant deterioration in capital market conditions leading up to 2018. Reliance Rail Finance Pty Ltd is the funding vehicle for the Reliance Rail Group, which in turn was the successful consortium appointed by Sydney Trains in 2006 to deliver the NSW Rolling Stock public private partnership project. Reliance Rail is in the process of completing its manufacture of 78, eight-car Waratah trains for the Sydney suburban rail network and has completed an associated maintenance facility. The consortium will also maintain the trains and the maintenance facility from completion until 2043. REVIC PTY: Clifton Hall Appointed as Liquidators ------------------------------------------------ Timothy Clifton and Mark Hall of Clifton Hall were appointed as Joint and Several Liquidators of Revic Pty Ltd on Sept. 30, 2013. A meeting of creditors will be held at 10:30 a.m. on Oct. 11, 2013, in the offices of Clifton Hall, Level 1, 12 Gilles Street, in Adelaide. RWS GROUP: Clifton Hall Appointed as Liquidators ------------------------------------------------ Timothy Clifton and Mark Hall of Clifton Hall were appointed as Joint and Several Liquidators of RWS Group Pty Ltd on Sept. 25, 2013. WALTON CONSTRUCTION: In Administration; 30 Jobs Axed ---------------------------------------------------- Eli Greenblat at The Sydney Morning Herald reports that Walton Construction, the construction company that worked on the AUD103 million refurbishment of department store David Jones store in Melbourne, has collapsed with the expected loss of 30 jobs. After 20 years and more than AUD2 billion worth of projects in four states, the Walton Construction company has been placed in administration, SMH discloses. According to the report, founder and managing director of Walton, Craig Walton said it was the toughest day of his life. "It is also the saddest day because of the impact on our employees and their families who have been so loyal and outstandingly professional over the whole journey," the report quotes Mr. Walton as saying. SMH relates that Mr. Walton said the two companies in the Walton group had been engulfed by the downturn in the construction industry since the global financial crisis and some poor results on projects in New South Wales. At its peak, Walton had 340 employees and turned over AUD360 million a year, SMH notes. Key projects included the AUD103 million David Jones refurbishment in Melbourne. * Moody's: Prime Residential Mortgage Arrears Improved in July -------------------------------------------------------------- Moody's Investors Service says that delinquencies in excess of 30 days in the Australian prime residential mortgage market measured 1.40% in July, down from 1.52% in June, and an improvement from 1.50% in July last year. "Looking ahead, we expect the performance trends witnessed to date in 2013 to continue with stable delinquencies, underpinned by expected GDP growth of 2.0% to 3.0%, the current low interest rate environment, and a steady unemployment rate of 5.0% to 6.0%," says Jennifer Wu, a Moody's Vice President and Senior Credit Officer. Ms. Wu was speaking on a just-released Moody's report, titled "Global Structured Finance Collateral Performance Review." Moody's report says Australian prime 60-day-plus arrears in July, of 0.81% also compare favorably to all economies covered in the report, except for Japan's 0.28%. ========= C H I N A ========= CHINA PROPERTIES: S&P Places 'B-' Rating on US$-Denominated Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' long-term issue rating and 'cnB' long-term Greater China regional scale rating to a proposed issue of U.S. dollar-denominated senior unsecured notes by China Properties Group Ltd. (B-/Stable/--; cnB/--). The Chinese property developer intends to use the issuance proceeds for expansion, refinancing debt, and for general working capital purposes. The rating on the notes is subject to S&P's review of the final issuance documentation. S&P do not notch down the issue rating from the corporate credit rating on China Properties because it expects the company to maintain its priority debt at less than 15% of total assets over the next 12 months. The ratio was below this threshold for speculative-grade companies in 2012. In S&P's view, the refinancing risk could be high for China Properties' US$137 million offshore loan due in December 2013. This is because the company's cash holding is low as a result of weak sales execution. Nevertheless, S&P expects China Properties to be able to borrow from onshore banks, thanks to its land reserves at prime locations. The company also has a record of shareholder financing support in the past several years. The rating on China Properties reflects S&P's view of the company's very limited number of projects, significant execution risks, and "weak" liquidity, as S&P's criteria define the term. China Properties' fully-paid and low-cost land bank, and support from its largest shareholder temper these weaknesses. S&P assess the company's business risk profile as "vulnerable" and its financial risk profile as "highly leveraged." The stable outlook on the corporate credit rating reflects S&P's expectation that China Properties will improve its property sales over the next 12 months. S&P anticipates that the largest shareholder will continue to support the company, while its financial performance remains weak. SINOCOKING COAL: Friedman LLP Raises Going Concern Doubt -------------------------------------------------------- SinoCoking Coal and Coke Chemical Industries, Inc., filed with the U.S. Securities and Exchange Commission on Sept. 30, 2013, its annual report on Form 10-K for the fiscal year ended June 30, 2013. Friedman LLP, in New York, N.Y., said that the Company has a working capital deficiency which raises substantial doubt on the Company's ability to continue as a going concern. The Company reported net income of $1.0 million on $66.7 million of revenue in fiscal 2013, compared with net income of $12.5 million on $78.9 million of revenue in fiscal 2012. "Our revenue in fiscal 2013 decreased by approximately 15.49% from a year ago as sales of most products slowed. 59% of the revenue was derived from coke products as compared to 51% in fiscal 2012, and 41% from coal products as compared to 49% in fiscal 2012." The Company's balance sheet at June 30, 2013, showed $201.3 million in total assets, $68.5 million in total liabilities, and equity of $132.8 million. A copy of the Form 10-K is available at http://is.gd/DXA2EX Headquartered in Pingdingshan, Henan Province, in the People's Republic of China, SinoCoking Coal and Coke Chemical Industries, Inc., was organized on September 30, 1996, under the laws of the State of Florida. The Company is a vertically-integrated coal and coke producer based in the People's Republic of China. All of the Company's business operations are conducted by a variable interest entity, Henan Pingdingshan Hongli Coal & Coking Co., Ltd., which is controlled by Top Favour's wholly-owned subsidiary, Pingdingshan Hongyuan Energy Science and Technology Development Co., Ltd., through a series of contractual arrangements. ========= I N D I A ========= AHIMSA INDUSTRIES: CARE Assigns 'BB' Rating to INR12.54cr Loans --------------------------------------------------------------- CARE assigns 'CARE BB' and 'CARE A4' ratings to the bank facilities of Ahimsa Industries Private Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 12.54 CARE BB Assigned Short-term Bank Facilities 5.50 CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Ahimsa Industries Private Limited are primarily constrained on account of the limited track record of its manufacturing operations, high degree of supplier concentration, modest scale of operations with a low net-worth base, working capital intensive operations and susceptibility of its profit margins to volatility in raw material prices and foreign exchange rates. The ratings, however, favorably take into account the vast experience of the promoters, favorable outlook for the packaging industry and moderate solvency and debt coverage indicators. The ability of AIPL to increase its scale of operations and improve its profitability along with the effective management of its working capital requirements will be the key rating sensitivity. Ahmedabad-based AIPL was incorporated in 1996 by Mr Ashutosh Gandhi and his wife, Ms Sneha Gandhi, to undertake the trading of confectionery machinery and injection and blow-molding moulds as well as for executing turnkey projects as a merchant exporter. From January 2012, AIPL also started manufacturing of "Polyethylene Terephthalate (PET) preforms" at Piplaj near Ahmedabad. The capacity of the plant is 3,600 metric tonnes per annum (MTPA). Besides AIPL, the promoter group also manages "General Additive Private Limited" which manufactures flavours and fragrances. AIPL has its registered brand name "Greenpet" under which it sells PET preforms. During FY13 (refers to the period April 1 to March 31), AIPL reported a PAT of INR1.48 crore on a Total Operating Income (TOI) of INR15.01 crore as against a PAT of INR0.28 crore on a TOI of INR6.86 crore in FY12. AKANKSHA AUTOMOBILES: ICRA Reaffirms 'BB' Rating on INR3cr Loan --------------------------------------------------------------- ICRA has reaffirmed the long term rating at [ICRA]BB for the INR3.0 Cr fund based limits of Akanksha Automobiles (Private) Limited. ICRA has also reaffirmed the short term rating at [ICRA]A4 for the INR12.0 Cr short-term, fund based facilities of the company. The outlook on the long-term rating is reaffirmed at 'stable'. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Cash Credit 3.0 [ICRA]BB (Stable) reaffirmed Short Term Fund 11.0 [ICRA]A4 reaffirmed Based Limits Unallocated 1.0 [ICRA]A4 reaffirmed The ratings reaffirmation takes into account AAPL's healthy market position by virtue of being the sole MSIL dealer in the areas assigned territories and an established track record of operations. The rating also takes comfort because of continuous expansion as the company is constantly opening up of new service and sale outlet. The ratings continue to be constrained by the company's moderate scale of operations, weak profitability and limited financial flexibility on account of weak cash flows and high gearing. Going forward, the ratings will remain sensitive to the company's ability to manage its working capital. Akanksha Automobiles Pvt. Ltd. was started in 1997 by Singhal Family with one showroom at Moradabad dealing into automobile dealership of Maruti. However the same has been sold to existing promoter i.e. Agrawal Family and Goel Family from April 2003. Mr. Puneet Agrawal and Mr. Amit Goel are currently handling the entire operations of the company and have expanded the operations to four showrooms in Moradabad, Rampur, Amroha and Chandausi. While the showroom at Moradabad operates since 1997, the showroom at Rampur was recently started in 2008. The company added the sales outlets in Amroha and Chandausi in late FY12. ALBA ASIA: CARE Revises Rating on INR34.56cr Loans to 'BB-' ----------------------------------------------------------- CARE revises the long-term ratings and reaffirms the short-term ratings assigned to the bank facilities of Alba Asia Private Limited [erstwhile ABG LDA Bulk Handling Pvt Ltd.], West Quay Multiport Private Limited & Tuticorin Coal Terminal Private Limited. Alba Asia Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 34.56 CARE BB- Revised from CARE BB Long-term/Short-term 20.00 CARE BB-/CARE A4 Bank Facilities Revised from CARE BB/CARE A4 Based on the unconditional and irrevocable Corporate Guarantee provided by AAPL to its group companies WQMPL & TCTPL, CARE has assigned the following ratings to the bank facilities of WQMPL & TCTPL. 1. West Quay Multiport Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 116.50 CARE BB-(SO) Revised from CARE BB(SO) Short-term Bank Facilities 25.00 CARE A4(SO) Reaffirmed 2. Tuticorin Coal Terminal Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 281 CARE BB-(SO) Revised from CARE BB(SO) Short-term Bank Facilities 47 CARE A4(SO) Reaffirmed Rating Rationale The revision in the ratings factors the deterioration in the operational and financial performance of the company during FY13. The ratings continued to be constrained by the company's stressed debt coverage indicators, the issuance of substantial amount of the corporate guarantee towards its group companies and equity commitment towards the green-field port projects being executed by the group companies. The ratings, however, continue to derive strength from the financial support received from the promoter, the experience of Alba Asia Private Limited's (AAPL) promoters in handling port operations and the favourable long-term growth prospects for the bulk cargo handling business in India. The ability of the company to gainfully deploy its idle assets and the timely receipt of funds for meeting its equity commitments and debt obligations remain the key rating sensitivities. Furthermore, the successful completion of the various projects in its group companies would also augment the financial profile of the company. Alba Asia Private Limited (erstwhile ABG LDA Bulk Handling Private Limited ) is a Joint Venture between ABG Infralogistics Limited (ABG Infra) through its wholly owned subsidiary, ABG Ports Pvt. Ltd and Louis Dreyfus Armateurs (LDA), France, holding 51% and 49% equity stake respectively in AAPL. The promoters ABG Infra as well as LDA have extensive experience in handling port operations. AAPL owns, operates, maintains and rents cranes of various types and capacity, which are deployed for different applications, mainly to the companies from the ports sector. At present, the company operates at the Vishakhapatnam Port and New Mangalore Port. AAPL was awarded two contracts for the development of port terminals for which the company had formed Special Purpose Vehicles (SPVs) to execute the same. For FY13 (Provisional), AAPL reported a total operating income of INR24.26 crore and a PAT of INR0.17 crore as compared to a total operating income of INR29.41 crore and a net loss of INR2.35 crore during FY12. BIR STEELS: ICRA Suspends 'B+' Rating on INR3.17cr Loans -------------------------------------------------------- ICRA has suspended the '[ICRA]B+' and '[ICRA]A4' ratings assigned to the INR3.17 crore fund based and non fund based facilities of Bir Steels Pvt Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. According to its suspension policy, ICRA may suspend any rating outstanding if in its opinion there is insufficient information to assess such rating during the surveillance exercise. ESSAR STEEL: CARE Cuts Ratings on INR31,500cr Loans to 'D' ---------------------------------------------------------- CARE revises the ratings assigned to the facilities and instruments and withdraws the rating assigned to CP/STD of Essar Steel India Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term/Short-term Bank 31,500 'CARE D' Revised from Facilities CARE BBB-/CARE A3 Rating Rationale The ratings reflect the ongoing delays in servicing of debt obligations by the company on account of its weakened liquidity position as a result of continuing net losses. Incorporated in 1976, Essar Steel India Ltd. is a part of the Essar Group and is having integrated steel manufacturing facilities at Hazira, Gujarat and iron ore beneficiation and pelletisation facilities in Odisha. The Essar group has global footprint in the steel industry with manufacturing facilities located in Canada, USA, Middle East as well as Asia. Through its recent completion of expansion at its plant located at Hazira (Gujarat), the company has added capacities to manufacture steel through three major routes viz Blast furnace, Direct Reduced Iron (DRI) and Corex, taking the total steel-making capacity at the location to 10 mmtpa. ESIL has manufacturing capabilities across the steel value chain including ore processing, intermediate as well as value-added steel. During FY13 (refers to the period from April 1, 2012 to March 31, 2013), ESIL incurred a net loss of INR2,785 crore on a total income of INR19,190 crore as against a net loss of INR1,252 crore on a total income of INR18,551 crore during FY12 (refers to the period from April 1, 2011 to March 31, 2012). JSL LIFESTYLE: CARE Revises Rating on INR10cr Bank Loan to 'BB' --------------------------------------------------------------- CARE revises/reaffirms rating assigned to the bank facilities of JSL Lifestyle Ltd. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 10.00 CARE BB Revised from CARE BB- Long/Short-term Bank 1.25 CARE A4 Reaffirmed Facilities Rating Rationale The revision in the long-term rating takes into account the healthy growth in JSL Lifestyle Ltd's (JLL) total operating income and improvement in the company's capital structure as well as debt coverage indicators. The ratings continue to derive strengths from the established track record of the promoter group and its continued support to JLL both in terms of assured raw material supplies as well as funding support in the form of unsecured loans. The ratings however, continue to remain constrained by small scale of operations of JLL, the company's working-capital intensive nature of business operations and high accumulated losses leading to leveraged capital structure. The ratings also factor in the company's exposure to risks related to high customer concentration and foreign exchange fluctuations. Going forward, the ability of JLL to profitably scale up operations while effectively managing its working capital cycle and further improve its capital structure shall remain the key rating sensitivities. JLL (formerly Austenitic Creations Pvt Ltd) was incorporated in 2003 as a division of Jindal Stainless Limited (JSL, rated CARE C/CARE A4) with the objective of manufacturing of stainless steel lifestyle products. The division became the subsidiary of JSL in 2006 and is primarily engaged in the manufacturing and retailing of stainless steel lifestyle products and accessories under the brand name 'Artd'inox'. It offers various lifestyle products categorized under tableware, serving ware, gift items, home accessories and office accessories made of steel, glass and ceramic. The company also operates as an Original Equipment Manufacturer (OEM) for Whirlpool in the export market, whereas in domestic market it sells its products through distributors and retails stores. It sources raw material viz. stainless steel sheet from its parent JSL. The manufacturing facility of JLL is situated at Jhajjar, Haryana with an installed capacity of 4,800 Metric Tonnes Per Annum (MTPA) as on March 31, 2013. During FY13 (refers to the period April 01 to March 31), JLL registered PBILDT and PAT of INR9.06 crore and INR3.26 crore, respectively, on a total operating income of INR85.67 crore. M&M CHOCOLATES: ICRA Upgrades Rating on INR13.6cr Loans to 'B' -------------------------------------------------------------- ICRA has upgraded the rating for INR13.60 crore fund based facilities of M&M Chocolates from '[ICRA]B-' to '[ICRA]B'. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Fund based limits 13.60 Upgraded to [ICRA]B from [ICRA]B- The rating upgrade primarily takes into account the improved capacity utilization of the plant owing to increase in off take from its customers resulting in a significant increase in the operating income and the profitability of the firm and a consequent improvement in its debt and interest coverage indicators. Despite the increase in offtake, ICRA notes that, the installed capacity of 12000 Tons per Annum (TPA) continues to remain under-utilized with an average capacity utilisation of 30- 35% per annum in H1FY2013-14. However the recent agreement with CIL for manufacturing of chocolate of 6000 TPA on job work basis is expected to substantially improve the capacity utilization of the plant resulting in further improvement in MMC's cash accruals. The rating also draws comfort from the established track record of the promoter in the chocolate industry resulting in acquisition and retention of reputed customers. Further, ICRA continues to favourably factor in the synergies derived from Group Company, M&M Cocoa Products Pvt Ltd, and the several tax benefits enjoyed by the company due to the location of its plant. The rating however continues to be constrained by the vulnerability of MMC's profitability to adverse movements in raw material prices, high customer concentration with top 2 customers contributing to about 60% of the total revenue and risks pertaining to withdrawal of capital and limited ability to raise external capital owing to its constitution as a partnership firm. This apart, the rating continues to be adversely impacted by the relatively weak financial profile of the firm primarily on account of debt funded under-utilised capacity and high working capital intensity. M&M Chocolates was initially started as a proprietary concern by Mr. Durga Prasad in FY2009. In November 2009, it got converted into a partnership firm. The firm is engaged in manufacturing of bulk chocolates (confectionary) which are primarily marketed to industrial clients. M&M has set up a 12000 tonnes per annum (TPA) chocolate/confectionery manufacturing plant in Baddi, Himachal Pradesh (HP). The said location makes the firm eligible for tax benefits provided by the state of HP. Recent Results MMC recorded INR39.49 crore of operating income and a profit after tax of INR1.32 crore in FY13 as against an OI of INR18.93 crore and net loss of INR1.57 crore in FY12. MANAV BIO-CHEM: ICRA Assigns 'BB-' Rating to INR1cr Loan -------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]BB- and a short-term rating of [ICRA]A4 to the fund-based and non-fund based limits of Manav Bio-Chem Impex Pvt. Ltd. aggregating to INR8.00 Cr. The long-term rating has a stable outlook. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Fund Based Limit-Bill 1.00 [ICRA]A4 assigned discounting Fund based limit- 1.00 [ICRA]BB-(stable) assigned Cash credit Non-fund based limits- 7.00 [ICRA]A4 assigned Letter of Credit The ratings are constrained by the company's small scale of operations in chemical trading business segment as well as its weak financial risk profile as indicated by low profitability margins and modest coverage indicators. ICRA notes that the company's profitability margins remain exposed to the adverse fluctuations in prices of chemicals. The ratings are further constrained by the company's high supplier concentration as a result of high dependence on a single supplier and intense competitive pressures from both organized and unorganized segments. The ratings, however, consider favorably the long and established track record of the company's promoter in the chemical industry, healthy growth in operating revenues, company's reputed customer base and established relationships as authorized agent with its key suppliers which manufacture Carbon di-sulphide. Incorporated in 2005 in Mumbai, Manav Bio-Chem Impex Pvt. Ltd. is a private limited company promoted by Mr. Mukesh Shah and is engaged in trading of chemicals, solvents and bulk drug intermediaries. Besides Carbon Di-Sulphide, the company also deals in other chemicals including Acetic acid, Acetone, Chloroform, Glycerine and many other chemicals, albeit on a smaller scale. The company is an authorized agent for carbon di-sulphide for Century Rayon and also an authorized dealer of CS2 for its two major customers. For FY 2012, the company reported Profit after Tax (PAT) of INR0.20 Cr. on an operating income of INR44.84 Cr. For FY 2013, the company has reported profit before tax of INR0.47 Cr. on an operating income of INR57.40 Cr. (provisional) MSM STEELS: CARE Revises Rating on INR67.71cr Loans to 'B+' ----------------------------------------------------------- CARE revises/reaffirms the rating assigned to the bank facilities of MSM Steels Private Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 67.71 CARE B+ revised from CARE B Short-term Bank Facilities 6.80 CARE A4 Reaffirmed Rating Rationale The revision in the long-term rating factors in the successful completion and commencement of production from billet manufacturing facility coupled with the moderately stable solvency position of MSM Steels Private Limited. The ratings continue to be constrained by MSMPL's short track record of operations, susceptibility of margins to volatility in raw material prices along with its presence in the highly fragmented and competitive TMT bar industry. The ratings continue to draw strength from the experienced and resourceful promoters, partially integrated nature of its manufacturing facility and favorable demand outlook for TMT bars. The ability of the company to improve its profit margins and manage volatility in raw material prices along with the overall improvement in the capital structure remain the key rating sensitivities.! MSM Steels Private Limited was initially incorporated as a partnership firm and its constitution was subsequently changed to private limited in 2010. Based in the Latur district of Maharashtra, MSMPL is a part of the Malang group primarily engaged in the real estate industry. MSMPL has set up a steel re-rolling mill at Latur with an installed capacity of 54,000 Metric Tonne Per Anum (MTPA) for manufacturing thermo-mechanically treated (TMT) steel bars with FY13 (refers to the period April 1 to March 31) being the first full year of operations. The TMT bars are sold under the brand name as Gajraj 500 TMX bars. In FY13, as a part of the backward integration strategy MSMPL setup its billet manufacturing plant in Latur with a capacity of 105,000 MTPA. In FY13, MSMPL registered a PAT of INR2.30 crore against the total operating income of INR134.87 crore. NIKI AGRO: CARE Rates INR11.70cr LT Bank Loans at 'BB' ------------------------------------------------------ CARE assigns 'CARE BB' rating to the bank facilities of Niki Agro Products Private Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 11.70 CARE BB Assigned Rating Rationale The rating assigned to the bank facility of Niki Agro Products Private Limited (NAPPL) is constrained on account of its weak financial risk profile marked by thin profitability margins high overall gearing and stretched liquidity position, its presence in a highly fragmented industry with susceptibility to fluctuation in raw material prices and high dependence on government policies and foreign exchange fluctuation risk. The above constraints outweigh the strengths derived from the experienced promoters and long track record of operations along with established relations with customers and suppliers and a reputed customer base. The ability of the company to improve profitability margins and capital structure is the key rating sensitivity. Incorporated in 2001, Niki Agro Products Private Limited, the Jalgaon-based company, was promoted by Mr Kantilal Jain and Mr Deepak Jain. The company is engaged in the processing and trading of pulses comprising of Toor dal, Moong dal, Urad dal, Masoor dal, Lobia, Chana, Rajma, dried peas etc. During FY13 (refers to the period April 1 to March 31), NAPPL has generated 85% of its revenues from processing of pulses and 15% from the trading of pulses. NAPPL has four processing units located at Jalgaon, Maharashtra with an aggregate processing capacity of 21,000 Metric Tonnes Per Annum (MTPA). The company supplies its products directly as well as through agents and brokers under the brand names of "Deep", "Peacock", "Manik Panna" and "Dil". In FY13 (refers to the period April 1 to March 31), NAPPL registered a PAT of INR0.18 crore on total operating income of INR51.93 crore as against PAT of INR0.17 crore on total operating income of INR42.94 crore in FY12. PANDA TECHNOLOGIES: ICRA Assigns 'BB' Ratings to INR8.4cr Loans --------------------------------------------------------------- ICRA has reaffirmed [ICRA]BB rating for the enhanced INR8.40 Crore (enhanced from INR4.90 Crores) long term fund based facilities bank facilities of Panda Technologies India Private Limited. ICRA has also reaffirmed [ICRA] A4+ rating to the INR2.60 Crore (enhanced from INR1.40 Crores) non fund based facilities of PTPL. The outlook on the long term rating is reaffirmed at 'Stable'. The ratings assigned to bank facilities of PTPL were earlier suspended by ICRA in July 2013. Amount Facilities (INR crore) Ratings ----------- ---------- ------- Term Loan 0.4 [ICRA]BB (Stable) reaffirmed/assigned Fund Based Facilities 8.0 [ICRA]BB(Stable) reaffirmed/assigned Non Fund Based 2.6 [ICRA]A4+ Facilities reaffirmed/assigned The rating reaffirmation takes into account the company's trading operations across various product lines such as construction equipments, industrial motors, pumps and valves as well as recent entry into EPC contracts business besides healthy growth in operations and profitability. The ratings are, however, constrained by the company's modest scale of operations as well as moderate financial risk profile characterised by average debt coverage indicators. PTPL's ability to manage its financial risk profile as well as increase its scale of operations would be the key rating sensitivities going forward. Panda Technologies India Private Limited was incorporated in 1987 and was reconstituted as Private Limited in 2000. The company started as a dealer for premium industrial valves division of Larsen & Toubro Ltd. It diversified to related field such as pumps, motors, compressors etc by starting Dealerships of Kirloskar Brothers Limited and Crompton & Greaves for industrial pumps and motors. Later, it entered into construction equipment business with dealership of Terex Corporation (2004) and Dealership of Ace cranes. In the year 2009, the company leveraged its experience in pumps, valves and construction equipment, and started gaining EPC contract business for pumping stations and water supply, cooling water, firefighting system etc. RAJENDRA ENGINEERING: CARE Rates INR5.45cr LT Bank Loans at 'BB-' ----------------------------------------------------------------- CARE assigns 'CARE BB-/CARE A4' ratings to the bank facilities of Rajendra Engineering Udyog Pvt Ltd. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 5.45 CARE BB- Assigned Short-term Bank Facilities 0.50 CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Rajendra Engineering Udyog Pvt Ltd are primarily constrained by its small scale of operations coupled with working capital intensive nature of operations and susceptibility of its margins to fluctuation in raw material prices. The ratings are further constrained by highly competitive and fragmented nature of the industry. The ratings, however, draw comfort from experienced promoters, moderate capital structure and coverage indicators. Going forward, the ability of REUPL to scale up its operations while maintaining profitability margins and effective working capital management shall be key rating sensitivities. Rajendra Engineering Udyog Pvt Ltd was incorporated in April 1988. The company was taken over by the present management viz Mr Gulshan Kumar Luthra and Mr Kshitij Luthra in 2001. REUPL is engaged in dyeing and colouring of fabrics and its processing facility is located at Meerut, Uttar Pradesh. The company also does the same on job-work basis. As on March 31, 2013, the installed capacity of the plant is 30,000 Tonnes Per Annum (TPA) of fabrics. REUPL procures raw materials consisting of both cotton and synthetics fabrics domestically and sells its products mainly in Northern India through agents and distributors to garments manufacturers. During FY12 (refers to the period April 1 to March 31), REUPL reported a PAT of INR0.22 crore on a total operating income of INR22.85 crore. REUPL has achieved a total operating income of INR26.50 crore during FY13 (based on unaudited results). SUNIL HEALTHCARE: ICRA Reaffirms 'BB+' Rating on INR7.8cr Loans --------------------------------------------------------------- ICRA has reaffirmed "[ICRA]BB+" rating outstanding for the INR18.64 crore bank facilities of Sunil Healthcare Limited. The outlook on the long-term rating is reaffirmed as "Stable". ICRA has also reaffirmed "[ICRA]A4+" rating for the INR24.34 crore bank facilities of the company. The total rated limits are INR26.64 crore (of which INR10.84 crore of bank limits have been rated on both long term and short term scales and INR5.50 crore are the sub limit of WCDL limits). Amount Facilities (INR crore) Ratings ----------- ----------- ------- Term Loans 7.17 [ICRA]BB+ (Stable) reaffirmed Cash Credit/WCDL 10.84 [ICRA] BB+ (Stable)/ [ICRA]A4+ reaffirmed PCFC/PSFC/PCL (5.50) [ICRA]A4+ reaffirmed Letter of Credit 7.90 [ICRA]A4+ reaffirmed Bank Guarantee 0.10 [ICRA]A4+ reaffirmed Unallocated 0.63 [ICRA]BB+ (Stable) reaffirmed The rating reaffirmation takes into account SHL's long standing presence in the capsule manufacturing and diversified customer base including established players such as Pfizer Limited and Glaxosmithkline Pharmaceuticals Limited among others. The assigned rating also takes into account the company's plans to market other high margin pharmaceutical products thereby expanding its product portfolio. The company makes empty hard gelatin capsule (EHGC) shells, which is characterized by high competitive intensity and limited pricing power with price negotiation with major customers on an annual basis. The ratings are also constrained by the high working capital intensity and vulnerability to foreign exchange fluctuations of the business that would impact the overall profitability. Further, there has been pressure on credit metrics in light of ongoing capex plan for new products, a segment where the company has limited track record. Going forward, the ratings will remain sensitive to the company's ability to maintain its financial profile as it continues to incur high capex for capacity enhancement. Sunil Healthcare Limited is a manufacturer of Empty Hard Gelatin Capsule Shells and commenced operations in 1973 by the name of Sunil Synchem Ltd. with installed capacity of 200 million shells. The capsule shells are sold across India as well as exported to over 20 countries in Africa, Middle East, South America and Asia, Thailand, Malaysia and Latin America. In 2004, the company was renamed to Sunil Healthcare Limited. The company's manufacturing facility is situated in Alwar and is spread across 3.5 acres. The facility is equipped with machinery and utilities to manufacture 7 billion Empty hard gelatin capsules per annum. The company is certified by WHO-GMP and is also accredited with DMF IV registration by United States Food and Drug Administration (US FDA). Recent Results In 2012-13, SHL reported Net Sales of INR46.1 Crore, Profit before Depreciation, Interest and Tax (PBDIT) of INR7.3 Crore and Profit after Tax (PAT) of INR2.2 Crore. TUTICORIN COAL: CARE Revises Rating on INR281cr Loans to 'BB-' -------------------------------------------------------------- CARE revises the long-term ratings and reaffirms the short-term ratings assigned to the bank facilities of Alba Asia Private Limited [erstwhile ABG LDA Bulk Handling Pvt Ltd.], West Quay Multiport Private Limited & Tuticorin Coal Terminal Private Limited. Alba Asia Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 34.56 CARE BB- Revised from CARE BB Long-term/Short-term 20.00 CARE BB-/CARE A4 Bank Facilities Revised from CARE BB/CARE A4 Based on the unconditional and irrevocable Corporate Guarantee provided by AAPL to its group companies WQMPL & TCTPL, CARE has assigned the following ratings to the bank facilities of WQMPL & TCTPL. 1. West Quay Multiport Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 116.50 CARE BB-(SO) Revised from CARE BB(SO) Short-term Bank Facilities 25.00 CARE A4(SO) Reaffirmed 2. Tuticorin Coal Terminal Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 281 CARE BB-(SO) Revised from CARE BB(SO) Short-term Bank Facilities 47 CARE A4(SO) Reaffirmed Rating Rationale The revision in the ratings factors the deterioration in the operational and financial performance of the company during FY13. The ratings continued to be constrained by the company's stressed debt coverage indicators, the issuance of substantial amount of the corporate guarantee towards its group companies and equity commitment towards the green-field port projects being executed by the group companies. The ratings, however, continue to derive strength from the financial support received from the promoter, the experience of Alba Asia Private Limited's promoters in handling port operations and the favorable long-term growth prospects for the bulk cargo handling business in India. The ability of the company to gainfully deploy its idle assets and the timely receipt of funds for meeting its equity commitments and debt obligations remain the key rating sensitivities. Furthermore, the successful completion of the various projects in its group companies would also augment the financial profile of the company. Alba Asia Private Limited (erstwhile ABG LDA Bulk Handling Private Limited ) is a Joint Venture between ABG Infralogistics Limited (ABG Infra) through its wholly owned subsidiary, ABG Ports Pvt. Ltd and Louis Dreyfus Armateurs (LDA), France, holding 51% and 49% equity stake respectively in AAPL. The promoters ABG Infra as well as LDA have extensive experience in handling port operations. AAPL owns, operates, maintains and rents cranes of various types and capacity, which are deployed for different applications, mainly to the companies from the ports sector. At present, the company operates at the Vishakhapatnam Port and New Mangalore Port. AAPL was awarded two contracts for the development of port terminals for which the company had formed Special Purpose Vehicles (SPVs) to execute the same. For FY13 (Provisional), AAPL reported a total operating income of INR24.26 crore and a PAT of INR0.17 crore as compared to a total operating income of INR29.41 crore and a net loss of INR2.35 crore during FY12. VANITA AGROCHEM: ICRA Revises Ratings on INR15.97cr Loans to BB+ ---------------------------------------------------------------- ICRA has revised the rating assigned to the INR15.97 crore (enhanced from INR13.61 crore) long term fund based facilities of Vanita Agrochem (India) Private Limited from [ICRA]BB to [ICRA]BB+. The outlook on the long term rating is stable. ICRA has also revised the rating assigned to the INR0.03 crore short term non-fund based facilities of VAPL from [ICRA]A4 to [ICRA]A4+. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long term, fund based 3.97 Revised to [ICRA]BB+ Limits-Term Loan (Stable) from [ICRA]BB (stable) Long term, fund based 12.00 Revised to [ICRA]BB+ limits-Cash Credit (Stable) from [ICRA]BB (stable) Short term, non-fund 0.03 Revised to [ICRA]A4+ based limits-BG from [ICRA]A4 The rating revision takes into consideration strengthening of the financial profile owing to higher than expected revenue growth and margins on the back of improved realizations. The water soluble segment of the fertiliser industry continues to be supported by the state government's initiatives to support drip irrigation and is expected to grow strongly over the medium term. The ratings continue to derive strength from the long standing experience of the promoters in the agro chemical industry and the wide product portfolio coupled with strong distribution network in Maharashtra. Expansion of the marketing network into the adjoining states is likely to stem the near term growth of the company. The ratings, however, are constrained by modest scale of operations with high concentration of revenues towards Maharashtra. The growth and profitability remain susceptible to agro climatic conditions, regulatory changes and foreign exchange fluctuations given the company's requirement of imported chemicals. ICRA also takes note of the increasing degree of competition with the entry of established players in the water soluble segment of the industry. Incorporated in the year 2003 Vanita Agrochem (India) Private Limited is primarily engaged in manufacture of Agro inputs (Water soluble fertilisers and micro nutrients). The promoter initially carried out trading of textile chemicals in 1995 and later of chemicals required for jaggery production and water treatment chemicals as a consignment stockist for Nalco chemicals USA. The company provides a wide range of branded agro inputs in the form of Water Soluble fertilisers, Micro Nutrients and Plant Growth Regulators. It has a manufacturing at Ichalkaranji, Kolhapur. VIDHYA PHARMACHEM: ICRA Suspends 'BB' Rating on INR54cr Loans ------------------------------------------------------------- ICRA has suspended [ICRA]BB (Stable)/[ICRA]A4 rating assigned to the INR54.00 crore, bank guarantee facilities of Vidhya Pharmachem Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. WEST QUAY: CARE Revises Rating on INR116.5cr Loans to 'BB-' ----------------------------------------------------------- CARE revises the long-term ratings and reaffirms the short-term ratings assigned to the bank facilities of Alba Asia Private Limited [erstwhile ABG LDA Bulk Handling Pvt Ltd.], West Quay Multiport Private Limited & Tuticorin Coal Terminal Private Limited. Alba Asia Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 34.56 CARE BB- Revised from CARE BB Long-term/Short-term 20.00 CARE BB-/CARE A4 Bank Facilities Revised from CARE BB/CARE A4 Based on the unconditional and irrevocable Corporate Guarantee provided by AAPL to its group companies WQMPL & TCTPL, CARE has assigned the following ratings to the bank facilities of WQMPL & TCTPL. 1. West Quay Multiport Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 116.50 CARE BB-(SO) Revised from CARE BB(SO) Short-term Bank Facilities 25.00 CARE A4(SO) Reaffirmed 2. Tuticorin Coal Terminal Private Limited Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 281 CARE BB-(SO) Revised from CARE BB(SO) Short-term Bank Facilities 47 CARE A4(SO) Reaffirmed Rating Rationale The revision in the ratings factors the deterioration in the operational and financial performance of the company during FY13. The ratings continued to be constrained by the company's stressed debt coverage indicators, the issuance of substantial amount of the corporate guarantee towards its group companies and equity commitment towards the green-field port projects being executed by the group companies. The ratings, however, continue to derive strength from the financial support received from the promoter, the experience of Alba Asia Private Limited's (AAPL) promoters in handling port operations and the favourable long-term growth prospects for the bulk cargo handling business in India. The ability of the company to gainfully deploy its idle assets and the timely receipt of funds for meeting its equity commitments and debt obligations remain the key rating sensitivities. Furthermore, the successful completion of the various projects in its group companies would also augment the financial profile of the company. Alba Asia Private Limited (erstwhile ABG LDA Bulk Handling Private Limited ) is a Joint Venture between ABG Infralogistics Limited (ABG Infra) through its wholly owned subsidiary, ABG Ports Pvt. Ltd and Louis Dreyfus Armateurs (LDA), France, holding 51% and 49% equity stake respectively in AAPL. The promoters ABG Infra as well as LDA have extensive experience in handling port operations. AAPL owns, operates, maintains and rents cranes of various types and capacity, which are deployed for different applications, mainly to the companies from the ports sector. At present, the company operates at the Vishakhapatnam Port and New Mangalore Port. AAPL was awarded two contracts for the development of port terminals for which the company had formed Special Purpose Vehicles (SPVs) to execute the same. For FY13 (Provisional), AAPL reported a total operating income of INR24.26 crore and a PAT of INR0.17 crore as compared to a total operating income of INR29.41 crore and a net loss of INR2.35 crore during FY12. ========= J A P A N ========= HN TRUST: Fitch Affirms 'BB' Rating on Class A3 Senior BIs ---------------------------------------------------------- Fitch Ratings has upgraded one and affirmed four senior beneficial interests (BIs) from HN Trust. The rating actions are listed below: JPY140m Class A1 senior BIs affirmed at 'AA+sf'; Outlook Stable; JPY60m Class A2 senior BIs affirmed at 'BBBsf'; Outlook Stable; JPY20m Class A3 senior BIs affirmed at 'BBsf'; Outlook Stable; JPY600m Class B1 senior BIs affirmed at 'AA+sf'; Outlook Stable; and JPY447.7m Class B2 senior BIs upgraded to 'A+sf' from 'Asf'; Outlook Stable. All balances as of 2 October 2013 The transaction is a re-securitisation of two junior BIs issued prior to the issuance of these senior BIs, and is ultimately backed by multiple residential mortgage loan pools. Key Rating Drivers The upgrades of the class B2 senior BIs reflect the growth in credit enhancement (CE) levels benefiting from the excess spread in the underlying transaction. The affirmations of other rated classes reflect Fitch's view that the available CE levels are sufficient to support the current ratings. The overall transaction performance remains within the agency's expectations. The ratings of the class A1 and B1 senior BIs are constrained by the exposure to the account bank, which does not satisfy the agency's counterparty criteria to support higher ratings. Rating Sensitivities An unexpected material increase in delinquencies, defaults and loss severities from defaulted loans in the underlying pools may lead to negative rating actions. In addition, the ratings of the class A1-A3 senior BIs may be affected by the prepayment performance of the underlying mortgage pools. * Moody's Says Japanese RMBS Default Rose Slightly in July ---------------------------------------------------------- Moody's Japan K.K. says that performance for Japanese CMBS and auto loan ABS continued to improve in August and July 2013, while the default rate for RMBS rose slightly in July 2013. For CMBS, the default rate -- expressed as the outstanding defaulted loan amount compared to the total loan amount -- fell to 17.6% in August 2013 from 21.8% in July 2013, and from 33.1% a year ago. For RMBS and auto loan ABS, their most recent data is for July 2013. For RMBS, the annualized default rate rose to 0.16% in July 2013 from 0.12% in June 2013. In recent years, the rate has averaged around 0.15%, and ranged between 0.08% and 0.30%. For auto loans ABS, the annualized default rate fell to 0.66% in July 2013 from 0.75% in June 2013. Looking ahead, Moody's expects the performance trends for RMBS and auto loan ABS to remain stable because of the relatively high job security of most borrowers. The data was contained in Moody's just-released Global Structured Finance Collateral Performance Review. ==================== N E W Z E A L A N D ==================== SOLID ENERGY: Annual Loss Grows to NZ$335 Million ------------------------------------------------- Adam Bennett at The New Zealand Herald reports that troubled state-owned coal miner Solid Energy's losses ballooned to NZ$335 million. The company said in its latest financial results released October 4, a deterioration from its NZ$40 million loss last year was largely down to asset write downs of NZ$215.3 million and NZ$102.2 million in one off restructuring, redundancy and closure costs, according to the Herald. Underlying earnings dropped fell 78 per cent NZ$22.2 million which chairman Mark Ford said was "a less than satisfactory trading performance" even given the weak global coal market, the Herald relays. "But we do believe that Solid Energy has a good operating future now that we have focused the business on cash generation, and reduced and contained costs," the report quotes Mr. Ford as saying. "The carrying values of our coal assets are likely to remain low for some time as we expect that international export prices will remain depressed in the short to medium term." The Herald relates that Mr. Ford said the write-downs "draw a line under those parts of the business that no longer form part of our future and acknowledge that any future improvement in value will come from our core coal mining activities. Solid Energy New Zealand Ltd is New Zealand's largest coal mining company and an investor in research and commercialisation of sustainable forms of energy that use coal, coal seam gas, biomass, biodiesel and solar. Solid Energy's core mining business includes hard coking coal, primarily for export to steel mills throughout Asia, and thermal coal for the Huntly power station and other domestic customers in the steel, dairy and cement industries. ===================== P H I L I P P I N E S ===================== NATIONAL POWER: Moody's Hikes Senior Unsecured Rating From Ba1 -------------------------------------------------------------- Moody's Investors Service has upgraded to Baa3 from Ba1, the senior unsecured rating of National Power Corporation (NPC). The rating outlook is positive. The rating action follows Moody's decision to upgrade the Philippine government's long-term foreign-currency and local- currency ratings to Baa3 with a positive outlook on October 3, 2013. This concludes the review of NPC's rating for upgrade on July 26, 2013, following Moody's decision to place the government's ratings on review for upgrade. Ratings Rationale "The Baa3 senior unsecured bond rating reflects the Philippine government's unconditional and irrevocable guarantee for NPC's rated long-term bonds," says Mic Kang, a Moody's Vice President and Senior Analyst. NPC has transferred 99.9% of its rated US dollar bonds to Power Sector Assets & Liabilities Management Corporation -- which was also upgraded to Baa3 with a positive outlook as a result of the sovereign rating upgrade -- including $300 million due in 2028 and $160 million due in 2016. The positive outlook is in line with that of the sovereign's, reflecting the government's guarantee on the bond. An upgrade of the sovereign rating could result in an upgrade of NPC's bond rating. Similarly, a downgrade in the sovereign rating could also trigger a rating downgrade for NPC's bond. NPC is wholly owned by the government. It primarily operates and manages the power facilities that have been transferred to PSALM. POWER SECTOR ASSETS: Moody's Ups Sr. Unsec. Bond Rating From Ba1 ---------------------------------------------------------------- Moody's Investors Service has upgraded to Baa3 from Ba1 the senior unsecured bond rating of Power Sector Assets & Liabilities Management Corporation (PSALM). Moody's has also assigned PSALM a Baa3 issuer rating and has withdrawn its Ba1 corporate family rating. The ratings outlook is positive. These rating actions follow Moody's decision to upgrade the Philippine government's long-term foreign-currency and local- currency ratings to Baa3 with a positive outlook on 3 October 2013. This concludes the review of PSALM's ratings for upgrade, which began on 26 July 2013, following Moody's decision to place the government's ratings on review for upgrade. RATINGS RATIONALE "PSALM's ratings are underpinned by its distinct policy role and its close integration with the government," says Mic Kang, a Moody's Vice President and Senior Analyst. Its policy role is to restructure and reform the Philippine power sector. In addition, the government is obligated to assume any remaining assets and liabilities at the end of PSALM's corporate life. "The government has provided unconditional and irrevocable guarantees for debt issued by PSALM and transferred from National Power Corporation," adds Kang. National Power Corporation (NPC) -- whose senior unsecured rating was also upgraded to Baa3 with a positive outlook as a result of the sovereign rating upgrade -- has transferred to PSALM more than 99% of its rated US dollar bonds, including $300 million due in 2028 and $160 million due in 2016. The positive outlook is in line with that of the sovereign's, reflecting PSALM's close linkage with the government. An upgrade of the sovereign rating could result in an upgrade of PSALM's ratings. Similarly, a downgrade in the sovereign rating could also trigger a rating downgrade for PSALM. Furthermore, any change in PSALM's policy role - a scenario we consider unlikely - could exert pressure on the ratings. Power Sector Asset & Liabilities Corporation, wholly owned and controlled by the Philippine government, was established in 2001 to take ownership of, and manage, all generation-related assets, liabilities, contracts with independent power producers, real estate and other disposable assets of NPC, including National Transmission Corporation, and to privatize and sell these assets to liquidate NPC's financial obligations. RURAL BANK OF HAGONOY: PDIC to Pay Depositors Starting Oct. 10 -------------------------------------------------------------- The Philippine Deposit Insurance Corporation (PDIC) will service the deposit insurance claims of depositors of the closed Rural Bank of Hagonoy (Davao del Sur), Inc. on October 10, 11 and 14, 2013, from 7:30 a.m. to 3:00 p.m. Servicing of claims will be conducted at the bank's premises located in Guihing, Hagonoy, Davao del Sur. Depositors whose accounts have balances of more than PHP15,000 and who have outstanding obligations with the Rural Bank of Hagonoy regardless of type of account are required to file their deposit insurance claims. The announcement on the claims settlement operations of Rural Bank of Hagonoy is posted at the bank's premises and on the PDIC website, www.pdic.gov.ph. On October 2, 2013, PDIC started dispatching total payments amounting to PHP0.670 million in the form of postal money orders (PMOs), through the Philippine Postal Corporation, to depositors who are not required to file deposit insurance claims. These are depositors who have account balances of PHP15,000 and below, who have no outstanding obligations with the Rural Bank of Hagonoy, and who have complete and updated addresses in the bank's records or have updated their addresses using the PDIC Mailing Address Update Form. When filing deposit insurance claims, depositors are advised to personally present their duly accomplished Claim Form, original evidence of deposit, and two (2) original valid photo-bearing IDs with signature of the depositor. Depositors may also file their claims through mail and enclose the same set of document requirements. Depositors who are below 18 years old should submit either a photocopy of their Birth Certificate issued by the National Statistics Office (NSO) or a duly certified copy issued by the Local Civil Registrar as an additional requirement. Claimants who are not the signatories in the bank records are required to submit an original copy of a notarized Special Power of Attorney of the depositor or parent of a minor depositor. The procedures and requirements for the filing of deposit insurance claims are posted in the PDIC website, www.pdic.gov.ph. The Claim Form and format of the Special Power of Attorney may also be downloaded from the PDIC website. Depositors who are not able to file their claims during the claims settlement operations period may submit their claims either through mail to PDIC or personally at the PDIC Office, 4th Floor, SSS Bldg., 6782 Ayala Avenue corner V.A. Rufino Street, Makati City starting on October 23, 2013. In accordance with the provisions of the PDIC Charter, the last day for filing deposit insurance claims in the closed Rural Bank of Hagonoy is on September 21, 2015. After this date, PDIC as Deposit Insurer, shall no longer accept any deposit insurance claim. The PDIC said that all valid claims will be paid. For deposits to be considered valid, it must be recorded in the bank's records and must have evidence of inflow of funds, based on the results of PDIC examination. PDIC, as Receiver, has the authority to adjust the insurance rate on the unpaid interest offered by a bank if this is deemed unreasonable. RURAL BANK OF STO. TOMAS: PDIC to Pay Depositors Starting Oct. 9 ---------------------------------------------------------------- The Philippine Deposit Insurance Corporation (PDIC) will start servicing the deposit insurance claims of depositors of the closed Rural Bank of Sto. Tomas (Davao del Norte), Inc. on October 9, 2013. Servicing of claims for accounts maintained at the bank's Head Office will be conducted at the bank's premises along R. Magsaysay Avenue, Sto. Tomas, Davao del Norte until October 14, 2013. Meanwhile, claims of depositors of the bank's Braulio Dujali Branch will be serviced at its premises located in Poblacion Dujali, Braulio E. Dujali, Davao del Norte until October 11. Claims of depositors of the Asuncion Branch will be serviced at its premises at E. Aguinaldo cor. A. Mabini St., Poblacion, Asuncion, Davao del Norte, also until October 11. Depositors whose accounts have balances of more than PHP15,000 and who have outstanding obligations with Rural Bank of Sto. Tomas regardless of type of account are required to file their deposit insurance claims. The announcement on the claims settlement operations of Rural Bank of Sto. Tomas is posted at the bank's premises and on the PDIC website, www.pdic.gov.ph. On September 30, 2013, PDIC started dispatching total payments amounting to PHP6.7 million in the form of postal money orders (PMOs), through the Philippine Postal Corporation, to depositors who are not required to file deposit insurance claims. These are depositors who have account balances of PHP15,000 and below, who have no outstanding obligations with Rural Bank of Sto. Tomas, and who have complete and updated addresses in the bank's records or have updated their addresses using the PDIC Mailing Address Update Form. When filing deposit insurance claims, depositors are advised to personally present their duly accomplished Claim Form, original evidence of deposit, and two (2) original valid photo-bearing IDs with signature of the depositor. Depositors may also file their claims through mail and enclose the same set of document requirements. Depositors who are below 18 years old should submit either a photocopy of their Birth Certificate issued by the National Statistics Office (NSO) or a duly certified copy issued by the Local Civil Registrar as an additional requirement. Claimants who are not the signatories in the bank records are required to submit an original copy of a notarized Special Power of Attorney of the depositor or parent of a minor depositor. The procedures and requirements for the filing of deposit insurance claims are posted in the PDIC website, www.pdic.gov.ph. The Claim Form and format of the Special Power of Attorney may also be downloaded from the PDIC website. Depositors who are not able to file their claims during the claims settlement operations period may submit their claims either through mail to PDIC or personally at the PDIC Office, 4th Floor, SSS Bldg., 6782 Ayala Avenue corner V.A. Rufino Street, Makati City starting on October 24, 2013. In accordance with the provisions of the PDIC Charter, the last day for filing deposit insurance claims in the closed Rural Bank of Sto. Tomas is on September 16, 2015. After this date, PDIC as Deposit Insurer, shall no longer accept any deposit insurance claim. The PDIC said that all valid claims will be paid. For deposits to be considered valid, it must be recorded in the bank's records and must have evidence of inflow of funds, based on the results of PDIC examination. PDIC, as Receiver, has the authority to adjust the insurance rate on the unpaid interest offered by a bank if this is deemed unreasonable. * Moody's Hikes Ratings on 4 Philippine Banks to Investment Grade ----------------------------------------------------------------- Moody's Investors Service has upgraded the deposit ratings of four Philippine banks to Baa3/Prime-3 from Ba1/Not Prime, which means they are now investment grade, following the rating upgrade of the Government of the Philippines' debt ratings to Baa3 from Ba1. The rating action concludes the review for upgrade announced on July 25, 2013. At the same time, Moody's also raised the banks' baseline credit assessment (BCA) of three of these banks to reflect improvements in their standalone credit profiles, including two that reached investment grade on a standalone basis. The banks whose deposit ratings are affected are BDO Unibank, Inc. (BDO), Bank of the Philippine Islands (BPI), Land Bank of the Philippines (LBP) and Metropolitan Bank & Trust Company (MBT). The credit strength of the government is an important input in our assessment of the government's capacity to provide support in times of stress, and we believe that due to their systemic importance these four banks are more likely to fully benefit from the higher rating of the government. Also, the rating outlook on these banks' deposit ratings is positive, in line with the positive outlook of the sovereign bond rating. More specifically, for BDO, the bank's senior unsecured debt rating was upgraded to Baa3 from Ba1 along with its deposit rating; as well as its bank financial strength rating (BFSR) to D+ from D, which maps to a BCA of ba1. In addition, Moody's raised BPI's and MBT's baseline credit assessment (BCA) to baa3 from ba1. As a result, the following ratings of MBT which are notched off the bank's adjusted BCA are also upgraded: local currency subordinated debt rating upgraded to Ba1 from Ba2; foreign currency subordinated debt rating upgraded to Ba2 (hyb) from Ba3 (hyb); foreign currency preferred stock rating upgraded to Ba3 (hyb) from B1 (hyb). Ratings Rationale The rating actions are in line with the upgrade of the Philippines sovereign's bond ratings to Baa3 from Ba1. The sovereign rating action on the Philippines is discussed in greater detail in Moody's press release of October 3, 2013. There are two main drivers of the rating actions. First, some of the positive drivers of the sovereign rating action are reflected in an improved operating environment for the Philippine banking system, particularly its major banks. They include the robust growth performance of the Philippine economy despite slowing global external demand; the strong domestic consumption that has been supported by steady remittance inflows, and in turn, contributed to the banks' healthy credit growth and profitability; well-anchored inflation and no strong signs of overheating in asset markets, which underpin the banking system's improved asset quality. All of these positive dynamics of the operating environment have resulted in the upward revisions of the BCAs of BPI, MBT and BDO. Second, the improved creditworthiness of the Philippine government also results in its stronger capacity to support the banks. This has resulted in the upgrades to Baa3 of BDO's and LBP's deposit ratings. Moreover, the outlooks on all four banks' deposit ratings are positive, reflecting Moody's expectation that further upward pressure on the Philippine Government's rating would likely result in upward movements on these four bank ratings given Moody's support assumptions. BCA OF BPI & MBT REVISED TO baa3 The revision of BPI's and MBT's BCA to baa3 from ba1 considers the banks' track record of above-industry average risk-adjusted profitability and their dominant presence in the domestic corporate and consumer segments. It also takes into account the banks' consistently robust capital and liquidity profiles, which in our view, reflects the banks' discipline and prudence in business growth. Overall, Moody's view the credit profiles of BPI and MBT to be among the most defensive and best positioned to withstand a cyclical downturn among Moody's rated banks in the Philippines. Overall, the two banks have credit metrics that compare well with other baa3 banks in the region. BCA OF BDO REVISED TO ba1 The revision of BDO's BFSR/BCA to D+/ba1 from D/ba2 reflects the bank's improving risk-adjusted profitability and asset quality, and importantly, its enhanced loss-absorption buffers driven by the higher levels of capitalization and loan loss provisioning. The BCA also reflects the bank's leading market shares in the Philippines, and its weaker metrics particularly higher credit concentration in large borrowers and lower cost efficiency relative to peer banks. DEPOSIT RATINGS OF BPI, MBT, BDO & LBP UPGRADED TO Baa3 The Baa3 deposit ratings of BPI and MBT takes into account Moody's expectation of a very high probability of systemic support from the Philippine government, but the ratings do not benefit from any support uplift from the banks' baa3 BCA. The ratings are positioned at the same level as the sovereign rating of the Philippines of Baa3, to reflect the high correlation of banking and sovereign credit risk in the Philippines, attributed to (i) the banks' domestically-focused businesses that do not benefit from any meaningful cross-border diversification, and (ii) their high level of direct government debt exposure. BDO's Baa3 deposit rating and senior unsecured debt rating are underpinned by its ba1 BCA, and one notch of uplift resulting from Moody's expectation of very high systemic support for the banks in times of need. Moody's view of systemic support for the bank stem from the bank's entrenched market position, reflected primarily by its leading market share of system loans and deposits. LBP's Baa3 deposit rating benefits from three notches of uplift from the bank's ba3 BCA. Moody's assess the probability of systemic support for LBP to be very high, due to its sizable deposit and loan market shares domestically, its 100% ownership by the Philippine government, and importantly, its unique public policy role of financing the country's priority sectors which include small farmers and fishermen, agri-business, and micro-, small- and medium-sized enterprises. WHAT COULD CHANGE THE RATING UP/DOWN BPI and MBT Given the positive outlook on the banks' deposit ratings, the upgrade of the sovereign rating would likely lead to an upgrade of the banks' deposit ratings, assuming the banks' credit metrics remain robust. It is unlikely for BPI and MBT to be rated above the sovereign as we view the correlation between the banks and the sovereign to be high. In the event that the sovereign is upgraded, the following factors could result in an upgrade of the banks' BCA: [1] reduction of its non-performing assets (non-performing loans (NPL) and foreclosed assets) to below 15% of equity and loan loss reserves; [2] continued maintenance of net income at more than 2.5% of average risk-weighted assets; and/or [3] high level of loss absorption capacity reflected by Tier 1 ratio of above 12%. MBT's subordinated debt ratings are linked to its BCA, and could be upgraded when the BCA is upgraded. The banks' BCAs could be downgraded or the positive outlook on the banks' deposit ratings could be revised to stable if: [1] aggressive organic expansion or acquisitions result in a significant increase in the banks' risk profile; and/or [2] the operating environment weakens significantly or underwriting practices become loose, resulting in resulting in the non- performing assets increasing to more than 20% of equity and loan loss reserves; and/or [3] there is a material decline in the banks' capital buffer, such that Tier 1 ratio falls below 10%. BDO The following factors could result in an upward revision of BDO's BCA: [1] reduction of its non-performing assets to below 20% of equity and loan loss reserves while continuing to rein in credit costs; [2] evidence that it can continue to rein in credit costs and improve its risk-adjusted profitability, reflected by net income of above 2.5% of average risk-weighted assets; and/or [3] high level of loss absorption capacity reflected by its continuing to maintain its Tier 1 ratio above 12%. The bank's ratings could be downgraded or the positive outlook on the bank's deposit and debt ratings could be revised to stable if: [1] aggressive organic expansion or acquisitions result in a significant increase in its risk profile; and/or [2] the operating environment weakens significantly or underwriting practices become loose, resulting in the non-performing assets increasing to more than 25% of equity and loan loss reserves ; and/or [3] a material decline in its capital buffer, such that Tier 1 ratio falls below 10%. LBP Given the positive outlook on the bank's deposit ratings, the upgrade of the sovereign rating would likely lead to an upgrade of the bank's deposit ratings, assuming the bank's credit metrics remain robust. It is unlikely for LBP to be rated above the sovereign as we view the correlation between the banks and the sovereign to be high. The following factors could result in upward pressure on LBP's BCA: [1] significant diversification of its funding sources that reduces its reliance on government-related funding and exposure to policy risks; and/or [2] improvement in the timeliness and transparency of financial reporting; and/or [3] significant reductions in credit risk concentrations in individual borrower and industry groups. The bank's BCA could be downgraded or the positive outlook on the bank's deposit ratings could be revised to stable if [1] the operating environment weakens significantly or underwriting practices become loose, resulting in the non-performing loan (NPL) ratio exceeding 5%; and/or [2] a rise in NPLs without a corresponding increase in loan loss provisions, resulting in the NPL coverage falling below 80%; and/or [3] its capital buffer declines materially, such that Tier 1 capital ratio falls below 10%; and/or [4] its funding profile showing signs of weakening for prolonged periods beyond two quarters, which could be reflected by a loans-to-deposits ratio of above 70%. The ratings of the four banks are as listed below. BDO Unibank, Inc Bank Financial Strength Rating (BFSR) of D+, which maps to ba1 baseline credit assessment (BCA) Local and foreign currency deposits rated Baa3/Prime-3 Foreign currency senior unsecured debt rated Baa3 The outlook of its long term deposit rating and foreign currency senior unsecured debt rating is revised to positive from stable. All other ratings have a stable outlook. Bank of the Philippine Islands BFSR of D+, which maps to a baa3 BCA Local and foreign currency deposits rated Baa3/Prime-3 The outlook of its long term deposit ratings is revised to positive from stable. All other ratings have a stable outlook. Metropolitan Bank & Trust Company BFSR of D+, which maps to a baa3 BCA Local and foreign currency deposits rated Baa3/Prime-3 Local currency subordinated debt rated Ba1 Foreign currency subordinated debt rated Ba2(hyb) Foreign currency preferred stock rated Ba3(hyb) The outlook of its long term deposit ratings is revised to positive from stable. All other ratings have a stable outlook. Land Bank of the Philippines BFSR of D-, which maps to a ba3 BCA Local and foreign currency deposits rated Baa3/Prime-3 The outlook of its long term deposit ratings is revised to positive from stable. All other ratings have a stable outlook. All four banks are headquartered in Manila and reported total assets as follows. BDO Unibank, Inc: PHP1.3 trillion ($31 billion) as at June 30, 2013. Bank of the Philippine Islands: PHP1.0 trillion ($24 billion) as at June 30, 2013. Metropolitan Bank & Trust Company: PHP1.2 billion ($28 billion) as at June 30, 2013. Land Bank of the Philippines: PHP737 billion ($18 billion) as at March 31, 2013. * PHILIPPINES: Moody's Hikes Rating From 'Ba1' ---------------------------------------------- Moody's Investors Service has upgraded the rating of the Government of the Philippines by one notch to Baa3 from Ba1. At the same time, Moody's has assigned a positive outlook to the rating. The rating action concludes the review for upgrade announced on July 25, 2013. The factors that prompted the review remain intact, namely the sustainability of the country's (1) robust economic performance; (2) ongoing fiscal and debt consolidation; and (3) political stability and improved governance. In addition, the stability of the Philippines' funding conditions -- during the recent bout of market volatility in emerging markets -- points to the country's relative lack of vulnerability to external financial shocks, such as those arising from anticipated tapering by the US Federal Reserve of its quantitative easing policy. In a related rating action, Moody's has upgraded the government's foreign currency shelf rating to (P)Baa3 and the ratings for the liabilities of the country's central bank, Bangko Sentral ng Pilipinas (BSP), to Baa3. These have also been assigned a positive outlook. RATINGS RATIONALE Rationale for the Upgrade The Philippines' economic performance has entered a structural shift to higher growth, accompanied by low inflation. Real GDP expanded by 6.8% in 2012 and 7.6% year-on-year in the first half of 2013. These levels are among the fastest rates of growth in Asia-Pacific and across emerging markets globally. At the same time, CPI inflation remains well anchored and is currently below the central bank's target range. The new growth path is being reinforced in part by improved fiscal management. Revenue growth has accommodated sizeable increases in infrastructure and social spending, although revenue generation remains weak when compared with investment-grade countries overall. Nevertheless, since 2008, the Philippine government has regularly recorded fiscal deficits that are narrower than the Baa3-rated median. Primary surpluses recorded in eight of the past 10 years will likely continue over the five-year medium-term horizon, allowing for further consolidation of the government's debt burden. Yet, government debt as measured against GDP will remain higher than most similarly rated peers. Over the past few months, the prospects of Fed tapering had only a muted effect on funding conditions for the Philippines. An underlying shift in the government's funding profile has contributed to the country's resilience to such external financial shocks. Although the Philippine government is the largest sovereign issuer of US dollar-denominated securities in the Asia- Pacific based on total debt outstanding, it is now much more reliant on domestic sources of financing. The government's improved ability to fund itself onshore reflects both the country's healthy external payments position and the ample liquidity in its banking system, which is also the only system worldwide deemed by Moody's to have a positive outlook. In addition, the Aquino administration has maintained its popularity among voters, which in turn supports the further institutionalization of reforms for good governance. This situation has in turn been reflected in improving third-party assessments of institutional quality and international competitiveness. The Philippines will maintain a current account surplus, which has been bolstered by remittance inflows from overseas Filipinos and services exports, particularly from the business process outsourcing sector. These flows are likely to remain strong, if not strengthen, over the outlook horizon. The Philippines' external strengths are reflected in the falling external debt to GDP ratio and the ample stock of gross international reserves, which now exceeds the country's total external debt. Moody's has also raised the Philippines' long-term foreign currency (FC) bond ceiling to Baa1 from Baa2 as well as its long- term FC deposit ceiling to Baa3 from Ba1. In addition, Moody's has raised the short-term FC bond ceiling to P-2 from P-3, while changing the short-term FC deposit ceiling to P-3 from "Not Prime." These ceilings act as a cap on the ratings that can be assigned to the FC obligations of other entities domiciled in the country. The Philippines' local currency (LC) bond and deposit ceilings remain unchanged at A2. Rationale for the Positive Outlook The positive outlook for the Baa3 rating reflects the expectation of continued economic outperformance by the Philippines relative to peers, which, in turn, would further support debt consolidation and associated improvements in debt affordability and sustainability. Moreover, sustained political stability points to better prospects for reform over the second half of the current presidential administration. What Could Change The Rating Up/Down Continued improvements in the country's main debt metrics and growth dynamics will support further upgrades. In view of the currently positive outlook on the Philippines' sovereign rating, a downward rating movement is unlikely over the short term. However, the emergence of macroeconomic instability -- which leads to a substantial deterioration in fiscal/debt metrics, a rise in debt-servicing costs, and/or an erosion of the country's external payments position -- could exert downward pressure on the rating. GDP per capita (PPP basis, US$): 4,412 (2012 Actual) (also known as Per Capita Income) Real GDP growth (% change): 6.8% (2012 Actual) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 2.9% (2012 Actual) Gen. Gov. Financial Balance/GDP: -2.4% (2012 Actual) (also known as Fiscal Balance) Current Account Balance/GDP: 2.9% (2012 Actual) (also known as External Balance) External debt/GDP: 32.3% (2012 Actual) Level of economic development: Moderate level of economic resilience Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. On October 1, 2013, a rating committee was called to discuss the rating of the Philippines, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have materially increased. The issuer's institutional strength/framework has materially strengthened. The issuer's fiscal or financial strength, including its debt profile, has materially strengthened. The systemic risk in which the issuer operates has not materially changed. The issuer's susceptibility to event risks has not materially changed. An analysis of this issuer, relative to its peers, indicates that a repositioning of its rating would be appropriate. ================= S I N G A P O R E ================= FIRST SHIP: S&P Keeps 'B' CCR on CreditWatch Negative ----------------------------------------------------- Standard & Poor's Ratings Services kept its 'B' long-term corporate credit rating and its 'axB+' long-term ASEAN regional scale rating on Singapore-based First Ship Lease Trust (FSL) on CreditWatch, where they were placed with negative implications on July 4, 2013. "We kept the ratings on CreditWatch with negative implications because we are uncertain about FSL's compliance with its covenants beyond Dec. 31, 2013, when the current covenant waiver expires," said Standard & Poor's credit analyst Katsuyuki Nakai. "The company's debt servicing capacity has also weakened because of its deteriorating cash flow." FSL's lender banks have extended the relaxation on the covenants until December 2013. However, S&P believes the company will not fulfill covenants relating to the minimum debt service coverage and security value-to-loan ratio unless the banks further extend the relaxation. As a result, S&P still assess FSL's liquidity as "less than adequate," as its criteria define the term. However, S&P believes that the breach of covenants will not lead to an acceleration of loan repayment. FSL's headroom to make principal payments on its amortizing loan has reduced, in S&P's view. Over the past one to two years, several FSL vessel charter contracts have been terminated or renegotiated because the counterparties faced financial difficulties. The company is therefore more exposed to market volatility while redeploying vessels. S&P expects FSL's funds from operations to be about US$41 million in 2013, lower than its annual amortizing principal (US$44 million). The company's cash holdings are therefore likely to decline further toward the end of this year. "We expect to resolve the CreditWatch before the end of December 2013, after we have more clarity on FSL's treatment of its bank loan covenants or any changes in the terms and conditions of the bank loan," said Mr. Nakai. "We will also review FSL's debt service capacity and cash flow resilience in 2014 on the basis of the company's business operations and the strategy of its new management." GLOBAL A&T: S&P Assigns 'B' Rating to US$502.257MM Notes -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term issue rating to the additional US$502.257 million senior secured notes issued by Global A&T Electronics Ltd. (GATE: B/Stable/--; axBB-/--). S&P do not assign a recovery rating to the notes because GATE has been gradually diversifying outside Singapore, into markets and jurisdictions where Standard & Poor's does not assign recovery ratings. GATE exchanged its second-lien notes due 2015 for the additional senior secured notes. S&P believes the company's decision to exchange the notes was based on opportunity and not distress. S&P's view is based on the following: -- Noteholders' security has improved as the additional notes rank equally with the 'B' rated US$625 million senior secured notes, sharing the same maturity and indenture; and -- The exchange price at 92.5% of the principal amount is not at a discount to the market price of the existing senior secured notes, which currently trade at about 70% of the principal amount. S&P believes the early refinancing of the second-lien notes is positive for GATE's overall debt maturity profile. The company's leverage will largely remain unaffected. The rating on GATE, however, continues to be constrained by the financial sponsors' ownership in the company and the competitive nature of the cyclical semiconductor industry. GATE's business risk profile is "weak" and its financial risk profile is "highly leveraged." =========== T A I W A N =========== E.SUN COMMERCIAL: Moody's Affirms 'D+' Bank Fin. Strength Rating ---------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of E.Sun Commercial Bank, Ltd. (E.Sun Bank). The affected ratings are E.Sun Bank's standalone bank financial strength rating of D+, which is equivalent to a baseline credit assessment (BCA) of baa3 on the long-term scale, its Baa1 long- term foreign currency bank deposit rating, and its Prime-2 short- term foreign currency bank deposit ratings. At the same time, Moody's has affirmed the Baa2 long-term local currency and foreign currency issuer ratings, and the Prime-2 short-term local currency issuer rating of E.Sun Financial Holding Company Limited (E.Sun Financial). The rating outlook of all ratings is stable. RATINGS RATIONALE E.SUN BANK "The affirmation of E.Sun Bank's BCA reflects our view that the bank continues to show the standalone credit characteristics of a bank rated at baa3," says Ginger Kao, a Moody's Analyst. "The affirmation of its BCA reflects the bank's latest improvements in its profitability and capitalization, supplemented by its persistent asset quality resilience and well-diversified loan mix," adds Ms. Kao. The deposit ratings also factor in Moody's assessment that the probability of support for the bank from the Taiwanese government (Aa3 stable) remains high, given the bank's good market position and our assessment that the Taiwanese government has history and a high willingness to support the banking industry given its importance to the economy. Consequently, the Baa1 rating includes an uplift of two notches from the bank's baa3 BCA. The standalone baa3 BCA considers the bank's well-known and growing franchise and a prudent risk culture that has resulted in stable asset quality. Its sound liquidity, strong asset quality, and adequate capitalization also underpin the BCA with a loan-to- deposit ratio of 74.0%, an impaired loan ratio of 0.57% and a Tier 1 capital ratio of 8.5% at end-June 2013. The bank's earnings have improved and we expect further gradual improvement, driven by a slight widening in its net interest margin, higher fee-based income and falling credit costs, continuing the trend of improvement seen between 2009 and 2012. But, despite the improvement, its profitability is still relatively weak to its global peers, given the market's fragmented state, low interest rates and excessive liquidity. In addition, E.Sun Bank's capitalization has more than recovered from its 2008 drop and hit new highs in 2011 and 2012, mainly through capital injections and earnings retention. Moody's believes that its improved capitalization has created a better loss absorption cushion, which helps it to withstand potential asset pressure. This is particularly important in the context of the bank's relatively weak profitability by global standards. Nevertheless, the bank's Tier 1 capital ratio fell to 8.5% at end- June 2013, mainly reflecting the impact of a strong year-over-year loan growth of 13% in 1H 2013 versus the industry average of 4%, in addition to Taiwan's implementation of Basel III and international financial reporting standards (IFRS) in 2013. Finally, like other Taiwanese peers, its rather high single- borrower concentration by global standards could pose a risk during economic down cycles. While maintaining its asset quality at current levels, Moody's could upgrade the BCA if E.Sun Bank: (1) consistently improves its profitability, such that net income exceeds 1.3% of average risk weighted assets (RWA); (2) significantly reduces the concentration of its top 20 borrowers to below 750% of pre-provision income, and below 100% of Tier 1 capital; and/or (3) consistently maintains its Tier 1 capital ratio above 9%. On the other hand, Moody's could lower the bank's BCA if it demonstrates: (1) an overly aggressive growth strategy, either through acquisitions or organic growth, that pressures its financial fundamentals and management resources; (2) a significant deterioration in profitability, with net income/average RWA below 0.6%; and/or (3) a reduction in its common equity Tier 1 capital ratio to below 7.5%. E.SUN FINANCIAL The affirmation of E.Sun Financial's Baa2 long-term and Prime-2 short-term issuer ratings reflect the good credit profile of the company's banking subsidiary, E.Sun Bank, and the group's modest financial fundamentals. E.Sun Financial's ratings also incorporate Moody's expectation that the Taiwanese government will support financial holding groups, if needed, particularly those that are heavily engaged in the banking sector, which in turn is vital to the economy. However, the ratings also take into account its limited business diversification outside the highly competitive banking sector of Taiwan. E.Sun Bank accounted for 99% of the group's total assets and contributed 93% of net profits for 1H 2013. E.Sun Financial's ratings therefore largely reflect E.Sun Bank's overall performance. Moody's would upgrade the rating following an upgrade of E.Sun Bank's ratings and/or enhanced franchise value and improved income diversity. On the other hand, Moody's could downgrade the rating if (1) a deterioration in the financial metrics of E.Sun Bank and other operating subsidiaries occurred, and/or (2) substantial increases occurred in financial leverage -- for instance with double leverage in excess of 120% -- as a result of acquisitions or a more aggressive financial policy. List of Ratings The following ratings all have a stable outlook. E.Sun Bank: - BFSR/BCA: D+/baa3 - Long-term foreign currency bank deposit ratings: Baa1 - Short-term foreign currency bank deposit ratings: P-2 E.Sun Financial: - Long-term local currency and foreign currency issuer rating: Baa2 - Short-term local currency issuer rating: P-2 E.Sun Bank and E.Sun Financial are both headquartered in Taipei. As of June 30, 2013, E. Sun Bank reported assets of TWD1.32 trillion, while E.Sun Financial reported consolidated assets of TWD1.33 trillion. ********* 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 ***