/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/061103.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, November 3, 2006, Vol. 7, No. 219 Headlines A U S T R I A ASS TRANSPORT: Claims Registration Ends November 6 BBV BEDBURGER: Claims Registration Ends November 6 IFT GESELLSCHAFT: Claims Registration Ends November 9 KABARETT DIE KIEBITZENSTEINER: Claims Registration Ends Nov. 8 KARNTNERHOF VERWALTUNGS: Creditors' Meeting Slated for Nov. 6 MARKEER FELD: Claims Registration Ends November 8 WEINHAUS MOEHLE: Claims Registration Ends November 8 B E L G I U M ADVANCED MICRO: Moody's Assigns Loss-Given-Default Ratings ARMSTRONG WORLD: Requests for Payment Deadline Set for Nov. 16 ARMSTRONG WORLD: Sept. 30 Balance Sheet Upside-Down by US$1.2BB GREIF INC: Moody's Assigns Loss-Given-Default Rating B U L G A R I A JETFINANCE INT'L: S&P Rates EUR250-Million EMTN Program at B F I N L A N D INTERGRAPH CORP: S&P Assigns B Rating on Proposed Bank Facility F R A N C E INFONXX INC: Recapitalization Cues Moody's to Place B2 Rating RBS GLOBAL: Moody's Assigns Loss-Given-Default Rating SUPERIOR ESSEX: Moody's Assigns Loss-Given-Default Rating WELLMAN INC: Moody's Reviews Low-B Ratings & May Downgrade WELLMAN INC: S&P Lowers Ratings to B- on Weak Operating Earnings G E R M A N Y ABI TEAK: Korneuburg Court Orders Closing of Business ALLGEMEINE HYPOTHEKENBANK: S&P Cuts Rating on New Business Model LAUSCHA & CO.: Vienna Court Orders Business Shutdown LUNZ OEG: Steyr Court Orders Business Closure NICOLA BOSTELMANN: Claims Registration Period Ends November 6 PHOTRONICS INC: Moody's Assigns Loss-Given-Default Ratings PORTRAIT CORP: Claims Bar Date Slated for November 28 RED HAT: Begins US$325-Mln Stock & Debenture Repurchase Program SANIERUNGS-UND SCHULDNERBERATUNG: Meeting Slated for Nov. 20 TKH LLC: Claims Registration Period Ends November 6 VITAL PLUS: Creditors' Meeting Slated for November 9 G R E E C E INTERGRAPH CORP: S&P Assigns B Rating on Proposed Bank Facility H U N G A R Y BANTA CORP: Inks US$1.3-Bln Acquisition Deal With RR Donnelley BANTA CORP: Moody's May Upgrade Ratings on Acquisition Offer I R E L A N D BENCHMARK ELECTRONICS: Acquisition Deal Spurs S&P's BB- Rating COMMSCOPE INC: Earns US$43.6 Million Net Income in Third Quarter INFONXX INC: Recapitalization Cues Moody's to Place B2 Rating VALASSIS COMMS: Earns US$6.6 Million in Third Quarter 2006 WELLMAN INC: Moody's Reviewing Low-B Ratings & May Downgrade WELLMAN INC: S&P Lowers Ratings to B- on Weak Operating Earnings I T A L Y ROYAL & SUN: Shareholders Approve U.S. Operations Disposal ROYAL & SUN: Ends ADR Program & Delists Stock from NYSE SEVERSTAL OAO: Names Alexei Mordashov as General Director THERMADYNE HOLDINGS: Moody's Assigns Loss-Given-Default Rating K A Z A K H S T A N AKORD-LTD LLP: Creditors Must File Claims by Nov. 29 ATF BANK: Moody's Assigns Ba3 Rating on Loan Participation Notes AVTOTORGSERVICE LLP: Proof of Claim Deadline Slated for Nov. 26 FERROHROM JSC: Claims Registration Ends Nov. 29 J. YRYS: Creditors' Filing Period Ends Nov. 29 KONYS COMPANY: Aktube Court Opens Bankruptcy Proceedings MIRSAT LLP: Aktube Court Begins Bankruptcy Proceedings MOSTOSTROY LLP: Creditors Must File Claims by Dec. 5 PETROSNABSERVICE LLP: Creditors' Claims Due Nov. 26 PROD WEST: Proof of Claim Deadline Slated for Nov. 26 K Y R G Y Z S T A N SAILYK-RESOURCE LLC: Creditors' Claims Due Dec. 15 TEYSI MARKET: Claims Registration Ends Dec. 15 N E T H E R L A N D S BANTA CORP: Inks US$1.3-Bln Acquisition Deal With RR Donnelley BANTA CORP: Moody's May Upgrade Ratings on Acquisition Offer CAIRN CLO: S&P Assigns BB- Rating on EUR10.5-Mln Class E Notes HARBOURMASTER CLO 4: Keeps BB Ratings on EUR10MM Class B2 Notes HEXION SPECIALTY: Eliminates Certain Defaults on Notes HEXION SPECIALTY: Extends Tender Offer for Sr. Notes to Nov. 13 HEXION SPECIALTY: Prices Tender Offer for 9% Senior Notes P O L A N D GETIN FINANCE: Fitch Rates US$150-Million Bond Issue at BB P O R T U G A L WOLVERINE TUBE: Soliciting Consents to Exchange New Equity Notes WOLVERINE TUBE: Moody's Lowers Ratings on Restructuring Program WOLVERINE TUBE: Proposed Exchange Offer Spurs S&P to Cut Ratings R U S S I A BEREZNIKOVSKIY FACTORY: Court Names S. Volkov to Manage Assets BUSINESS PARTNER: Court Starts Bankruptcy Supervision Procedure COAL 95: Primorye Court Names S. Pisarets as Insolvency Manager ERMAKOVSKIY WOODWORKING: Court Names I. Gorn to Manage Assets ILISHEVSKIY ELEVATOR: Court Names Z. Kamalova to Manage Assets KHABAROVSKIY FACTORY: Court Starts Reorganization Process LADA LLC: Primorye Court Names A. Sotnikov as Insolvency Manager LUKOIL OIL: Earns RUR51 Billion for January-September 2006 LUKOIL OAO: Inks Cooperation Agreement with Rostekhnadzor MARSHAL: Tatarstan Court Names V. Shevelev as Insolvency Manager MIYAKINSKIY MANUFACTURING: Names T. Nikolaeva to Manage Assets NIZHNEKAMSKNEFTEKHIM OAO: Fitch Keeps B+ Issuer Default Rating PRESS-PRINT: Moscow Bankruptcy Hearing Slated for December 25 RUSSIA OJSC: Court Starts Bankruptcy Supervision Procedure SEVERSTAL OAO: Names Alexei Mordashov as General Director SITRONICS JSC: Earns US$33.11 Million for First Half 2006 SPASSKIY MEAT: Court Names A. Khayrutdinov to Manage Assets SOLNECHNAYA POLYANA: Bankruptcy Hearing Slated for February 7 STEEL-CONSTRUCTION: Court Names I. Bashmakova to Manage Assets TROLLEYBUS FACTORY: Asset Sale Slated for on November 9 S P A I N BLYTH INC: Moody's Assigns Loss-Given-Default Ratings S W E D E N ARMSTRONG WORLD: Requests for Payment Deadline Set for Nov. 16 ARMSTRONG WORLD: Sept. 30 Balance Sheet Upside-Down by US$1.2BB STENA AB: Improved Financial Profile Cues S&P to Revise Outlook U K R A I N E ALFA BANK: Moody's Assigns B1 Rating on Series B and C Bonds ASTRA-TRANS: Mikolaiv Court Names Vira Fomenko as Liquidator MARKET-TRADE: Court Names Andrij Kulakov as Insolvency Manager NADIYA LLC: Court Names V. Bolhovitin as Insolvency Manager SITRONICS JSC: Earns US$33.11 Million for First Half 2006 TEHELEKTROSERVICE: Creditors Must Submit Claims by Nov. 11 TRANSINFOKOM LLC: Volodimir Glyadchenko to Liquidate Assets URAN-2000: Court Names Mikola Lukashuk as Insolvency Manager U N I T E D K I N G D O M ADEPT FIELD: Claims Filing Period Ends Dec. 11 AMERICAN GREETINGS: Moody's Assigns Loss-Given-Default Ratings BOBCAT PLANT: Creditors' Claims Due Dec. 31 BRITISH BATA: Taps Liquidators from Grant Thornton BROOKLANDS EURO: Fitch Keeps BB Rating on EUR15-Million Notes BUTTERFLY PRESS: H. J. Sorsky Leads Liquidation Procedure COOPER-STANDARD: S&P Lowers Corporate Credit Rating to B CORPORATE INTERNET: Creditors Confirm Liquidator's Appointment DIAMOND CONTRACT: Taps BDO Stoy as Joint Administrators DIRECT DOOR: Appoints M. C. Hepworth to Liquidate Assets EUROPEAN SPARES: Hires Liquidator from Moore Stephens FAREPAK FOOD: Brings In BDO Stoy to Administer Assets FORD MOTOR: Closes Production at Atlanta Assembly Plant G. BRIDGEHOUSE: Names Gerard Keith Rooney as Administrator GANDALF ASIA: Appoints Leigh & Co to Administer Assets GETTY IMAGES: Earns US$37.6 Million in Third Quarter 2006 GETTY IMAGES: Sees Job Cuts, Staff Restructuring HYDAWAYS FARMING: Appoints Joint Administrators from Kroll IBALL WHOLESALE: Names Terry Christopher Evans Liquidator KRISPY KREME: Grants 420,000 Common Shares to Executives LINCOLN CASTINGS: Creditors' Meeting Slated for November 14 LOGIC SYSTEMS: Brings In Ninos Koumettou as Administrator LUDGATE FUNDING: Fitch Puts Low-B Ratings on Two Note Classes M N L PHARMA: Appoints PwC to Administer Assets MARBLE ARCH: Moody's Assigns Ba1 Rating on GBP25.2-Mln Notes MAYFIELD LEISURE: Hires Administrators from Portland Business MILLENNIUM MILLION: Brings In Administrator from Little Badnage NCO GROUP: Special Shareholders' Meeting Set for November 9 NCO GROUP: Moody's Junks Proposed $200 Million Senior Notes NCO GROUP: S&P Assigns B- Rating on US$165-Mln Sr. Unsec. Notes OCA RESTAURANTS: Taps Tomlinsons to Administer Assets ONETV PLC: Appoints Mark S. Goldstein as Administrator P4PROPERTY LIMITED: Hires BDO Stoy as Joint Administrators PEMBRIDGE SQUARE: Fitch Assigns BB+ Rating on EUR16-Mln Notes PHOTRONICS INC: Moody's Assigns Loss-Given-Default Ratings PORTRAIT CORP: Claims Bar Date Slated for November 28 REGENTREALM LTD: S&P Revises Outlook & Removes Ratings RIMTEX LIMITED: Creditors Confirm Liquidator's Appointment SAFRA EASTERN: Liquidators Set Dec. 1 Claims Bar Date SANDHU MENSWEAR: Names Simon Gwinnutt as Administrator SYNTECH SUPPORT: Claims Registration Ends Dec. 13 SYNITA LIMITED: Taps Kroll as Joint Administrators UNITED BISCUITS: S&P Withdraws Ratings After Bond Redemption VEDARIO LIMITED: Taps Administrators from Cresswall Associates WOLVERINE TUBE: Soliciting Consents to Exchange New Equity Notes WOLVERINE TUBE: Moody's Lowers Ratings on Restructuring Program WOLVERINE TUBE: Proposed Exchange Offer Spurs S&P to Cut Ratings * BOOK REVIEW: The Managerial Mystique: Restoring Leadership in Business ********* ============= A U S T R I A ============= ASS TRANSPORT: Claims Registration Ends November 6 -------------------------------------------------- Creditors of ASS Transport-Logistik-Lagerung Ltd. have until Nov. 6 to register their claims with court-appointed provisional administrator Frank Kebekus. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Nov. 27 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Bielefeld Hall 4065 4 Floor Court Route 6 33602 Bielefeld, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Bielefeld opened bankruptcy proceedings against ASS Transport-Logistik-Lagerung Ltd. on Sept. 6. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: ASS Transport-Logistik-Lagerung Ltd. 60 Kensington Church Street GBR-W8 4 DB London United Kingdom Attn: Mike Horst Jansen, Manager Schlehenstr. 9 33803 Steinhagen, Germany The administrator can be contacted at: Dr. Frank Kebekus Liboriberg 21 33098 Paderborn, Germany BBV BEDBURGER: Claims Registration Ends November 6 -------------------------------------------------- Creditors of BBV Bedburger Baustahl Vertriebs GmbH have until Nov. 6 to register their claims with court-appointed provisional administrator Jana Dettmer. Creditors and other interested parties are encouraged to attend the meeting at 11:15 a.m. on Dec. 6 at which time the administrator will present her first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Cologne Meeting Room 142 1st Floor Luxemburger Road 101 50939 Cologne, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Cologne opened bankruptcy proceedings against BBV Bedburger Baustahl Vertriebs GmbH on Sept. 14. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: BBV Bedburger Baustahl Vertriebs GmbH Hauptstr. 19 50859 Cologne, Germany Attn: Vincenzo La Cognata, Manager Turmstr. 4 f 50859 Cologne, Germany The administrator can be contacted at: Jana Dettmer Weyerstrasse 54 50676 Cologne, Germany IFT GESELLSCHAFT: Claims Registration Ends November 9 ----------------------------------------------------- Creditors of IFT Gesellschaft fuer Unternehmens- und Managementberatung mbH have until Nov. 9 to register their claims with court-appointed provisional administrator Klaus Knetter. Creditors and other interested parties are encouraged to attend the meeting at 10:30 a.m. on Nov. 30 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Bielefeld Hall 4065 4 Floor Court Route 6 33602 Bielefeld, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Bielefeld opened bankruptcy proceedings against IFT Gesellschaft fuer Unternehmens- und Managementberatung mbH on Sept. 18. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: IFT Gesellschaft fue Unternehmens- und Managementberatung mbH Brunnenbauerweg 3b 33659 Bielefeld, Germany Attn: Wolfgang Schoen and Wolfgang Gruen, Managers Brinkheide 8 49214 Bad Rothenfelde, Germany The administrator can be contacted at: Klaus Knetter Otto-Brenner-Str. 186 33604 Bielefeld, Germany KABARETT DIE KIEBITZENSTEINER: Claims Registration Ends Nov. 8 -------------------------------------------------------------- Creditors of Kabarett "Die Kiebitzensteiner" GmbH have until Nov. 8 to register their claims with court-appointed provisional administrator Dieter Kuehne. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Dec. 6 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Halle-Saalkreis Hall 1.043 Judicial Center Thueringer Str. 16 06112 Halle, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Halle-Saalkreis opened bankruptcy proceedings against Kabarett "Die Kiebitzensteiner" GmbH on Sept. 8. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Kabarett "Die Kiebitzensteiner" GmbH Grosse Ulrichstr. 7-9 06108 Halle, Germany Attn: Ulf Herden, Manager Karl-Liebknecht-Str. 21 06114 Halle, Germany The administrator can be contacted at: Dr. Dieter Kuehne Walter-Koehn-Road 1b D-04356 Leipzig, Germany Tel: 0341/339890 Fax: 0341/3398929 E-mail: www.kuebler-gbr.de KARNTNERHOF VERWALTUNGS: Creditors' Meeting Slated for Nov. 6 ------------------------------------------------------------- The court-appointed provisional administrator for Karntnerhof Verwaltungs-GmbH, Rolf Rattunde, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 9:00 a.m. on Nov. 6. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg II. Stock Hall 218 District Court Place 1 14057 Berlin, Germany The Court will also verify the claims set out in the administrator's report at 9:00 a.m. on Feb. 12, 2007, at the same venue. Creditors have until Dec. 11 to register their claims with the court-appointed provisional administrator. The District Court of Charlottenburg opened bankruptcy proceedings against Karntnerhof Verwaltungs-GmbH on Sept. 18. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Karntnerhof Verwaltungs-GmbH Grunewaldstrasse 11 A 12165 Berlin, Germany The administrator can be reached at: Rolf Rattunde Kurfuerstendamm 212 10719 Berlin, Germany MARKEER FELD: Claims Registration Ends November 8 ------------------------------------------------- Creditors of Markeer Feld- & Gartensaaten Service GmbH have until Nov. 8 to register their claims with court-appointed provisional administrator Rolf Rattunde. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Dec. 20 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Potsdam Hall 301 3rd Floor Branch Linden Road 6 14467 Potsdam, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Potsdam opened bankruptcy proceedings against Markeer Feld- & Gartensaaten Service GmbH on Sept. 21. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Markeer Feld- & Gartensaaten Service GmbH Attn: Roland Borchert, Manager Bredower Way 1 14641 Markee, Germany The administrator can be contacted at: Rolf Rattunde Kurfuerstendamm 212 10719 Berlin, Germany WEINHAUS MOEHLE: Claims Registration Ends November 8 ---------------------------------------------------- Creditors of Weinhaus Moehle GmbH have until Nov. 8 to register their claims with court-appointed provisional administrator Martin Kienitz. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Nov. 29 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Bielefeld Hall 4065 4 Floor Court Route 6 33602 Bielefeld, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Bielefeld opened bankruptcy proceedings against Weinhaus Moehle GmbH on Sept. 21. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Weinhaus Moehle GmbH Attn: Juergen Robaczek, Manager Weinstr. 38 32549 Bad Oeynhausen, Germany The administrator can be contacted at: Martin Kienitz Ruegenweg 14 32427 Minden, Germanyf ============= B E L G I U M ============= ADVANCED MICRO: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. technology semiconductor and distributor sector, the rating agency affirmed its Ba3 corporate family rating on Advanced Micro Devices, Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$600 Mil. senior unsecured notes B1 Ba3 LGD4 59% Shelf - Sr. Unsecured Notes B1 Ba3 LGD4 59% Shelf - Subor. B2 B2 LGD6 97% Shelf - Preferred B3 B2 LGD6 97% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Sunnyvale, California, Advanced Micro Devices, Inc., -- http://www.amd.com/-- designs and manufactures microprocessors and other semiconductor products. The company has a facility in Singapore. It also has sales offices in Belgium, France, Germany, the United Kingdom, Mexico and Brazil. ARMSTRONG WORLD: Requests for Payment Deadline Set for Nov. 16 -------------------------------------------------------------- Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, reminds the U.S. Bankruptcy Court for the District of Delaware that on Oct. 2, 2006, Armstrong World Industries Inc.'s Fourth Amended Plan of Reorganization became effective. As of the Effective Date, the Plan discharges the Debtor and its estate, assets, properties and interests in property, as provided in Section 1141 of the Bankruptcy Code and the Confirmation Order. The Plan also binds the Debtor and all creditors and parties-in- interest; revests property of the Debtor's estate in Reorganized AWI free and clear of all Claims, Equity Interests, Encumbrances and other interests unless otherwise stated; voids any judgment against the Debtor; and operates as an injunction with respect to any debt discharged. The Asbestos PI Channeling Injunction and the Claims Trading Injunction are in full force and effect, Mr. Madron states. All entities seeking payment for services rendered or reimbursement of expenses incurred through and including the Effective Date under Section 330, or allowance of Administrative Expenses arising under Sections 503(b)(2), 503(b)(3), 503(b)(4), or 503(b)(5) must file a request by Nov. 16, 2006. Any distribution under the Plan that is unclaimed after 180 days following the distribution date will be deemed not to have been made and will be transferred to Reorganized AWI, free and clear of any claims or interests of any entities, including any claims or interests of any governmental unit under escheat principles. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world including Belgium and Sweden. The Company and its debtor-affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The Debtors tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. When the Debtors filed for protection from their creditors, they listed US$4,032,200,000 in total assets and US$3,296,900,000 in liabilities. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. AWI emerged from Chapter 11 protection on Oct. 2, 2006. (Armstrong Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service,Inc., http://bankrupt.com/newsstand/or 215/945-7000). ARMSTRONG WORLD: Sept. 30 Balance Sheet Upside-Down by US$1.2BB --------------------------------------------------------------- Armstrong World Industries Inc. reported third quarter 2006 net sales of US$973.6 million that were 4% higher than third quarter net sales of US$937.0 million in 2005, including a US$13 million favorable impact from foreign exchange rates. Reported operating income for the quarter increased to US$67.4 million from US$66.5 million in the third quarter of 2005. Adjusted operating income for the quarter of US$82.5million increased 27% compared with adjusted operating income of US$65.2 million in the prior year quarter. At Sept. 30, 2006, Armstrong World's balance sheet reflected a stockholder's deficit of US$1,189,500,000. Adjusted numbers exclude spending on restructuring charges and related costs, impacts from legal settlements, environmental charges, foreign exchange and certain other gains and losses to allow meaningful comparisons of operating performance. The year-over-year growth in third quarter 2006 adjusted operating income benefited from price increases in excess of manufacturing cost inflation, improved product mix in European businesses, improved direct manufacturing costs in all businesses, and lower manufacturing period expense in our floor businesses. Increased earnings in our WAVE joint venture also contributed to the growth. Notably, the growth was achieved despite significant volume declines in North American resilient business where vinyl declines offset laminate growth. Resilient Flooring net sales were US$304.8 million in the third quarter of 2006 and US$311.5 million in the same period of 2005. Excluding the favorable impact of foreign exchange rates, net sales decreased 4%. The decline was primarily due to decreased volume for vinyl products in North America. A reported operating loss of US$2.9 million in the quarter compared with reported income in the third quarter of 2005 of US$7.7 million. Adjusted operating income of US$4.5 million compared with US$5.9 million on the same basis in the prior year period. The decline is primarily attributable to lower sales. The benefits of increased manufacturing efficiency were greater than the impact of cost inflation in the period. Wood Flooring net sales of US$217.2 million in the current quarter declined 1% from US$220.2 million in the prior year as weakness in the U.S. housing markets drove volume declines in both engineered and solid wood floors. Reported operating income of US$16.5 million in the quarter was below the US$25.7 million reported in the third quarter of 2005. The reduction in operating income was due to the sales volume decline combined with higher lumber prices and increased promotional spending. Production costs improved during the period. Textiles and Sports Flooring net sales in the third quarter of 2006 increased to US$86.3 million from US$79.7 million. Excluding the effects of favorable foreign exchange rates of US$3.9 million, sales grew 3% primarily on higher volume in carpet tiles and better price realization in broadloom carpet. Reported operating income of US$4.2 million in 2006 increased from US$3.2 million in 2005 on the growth in sales. Building Products net sales of US$304.5 million in the current quarter increased from US$268.2 million in the prior year. Excluding the effects of favorable foreign exchange rates of US$5.0 million, sales increased by 12%, primarily due to price increases made to offset inflationary pressures, and improved product mix in both the U.S. and European markets. Volume increased in North America and the Pacific Rim. Reported operating income increased to US$59.7 million from operating income of US$43.1 million in the third quarter of 2005. The growth was driven by improved price realization, better product mix and increased equity earnings in WAVE. Cabinets net sales in the third quarter of 2006 of US$60.8 million increased 6% from US$57.4 million in 2005 on higher selling prices and improved product mix. Volume decreased slightly. Reported operating income for the third quarter of US$3.8 million improved from the prior year's US$0.3 million operating loss, primarily driven by the sales growth, and lower SG&A spending. Year-to-Date Results For the nine-month period ended Sept. 30, 2006, net sales were US$2,795.7 million compared with US$2,696.7 million reported for the first nine months of 2005. Excluding the US$10.4 million impact from unfavorable foreign exchange rates, net sales increased by 4%. The sales growth was due to improved price and product mix on flat volume, and all segments grew sales except Resilient Flooring. Operating income in the first nine months of 2006 was US$188.1 million compared with operating income of US$110.2 million for the same period in 2005. Adjusted operating income of US$209.9 million increased 59% compared with adjusted operating income of US$131.9 million in the prior year period. The improvement in operating income was primarily due to higher sales, improved manufacturing productivity and reduced SG&A expenses. Outlook For the fourth quarter of 2006, commercial markets are expected to remain strong, while the decline in the U.S. housing market will continue to reduce volumes in our residential businesses. On a consolidated basis, improved prices are anticipated to continue to offset cost inflation, and reductions in direct manufacturing costs will be sustained. Due to fresh start reporting adjustments associated with our Oct. 2, 2006, emergence from Chapter 11, reported fourth quarter operating income would not be comparable to prior periods. The following outlook table includes adjusted operating income on a pre-fresh start reporting basis to facilitate comparison to 2005 fourth quarter adjusted operating income. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The company has operation in Colombia, Costa Rica, Greece Iceland and Asia among others. The Company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The Company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The Company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. (Armstrong Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Oct. 9, 2006 Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the Company's emergence from bankruptcy on Oct. 2, 2006. S&P said the outlook is stable. GREIF INC: Moody's Assigns Loss-Given-Default Rating ---------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its Ba2 Corporate Family Rating for Greif Inc. as well as revised its rating on the company's US$250 million 8.875% senior subordinate notes due 2012 to Ba3 from B1. Those debentures were assigned an LGD5 rating suggesting lenders will experience an 82% loss in the event of default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Delaware, Ohio, Greif, Incorporated, - http://www.greif.com- is engaged in industrial packaging products and services. The company has operations in Australia, Argentina, Brazil, Belgium, China, Malaysia, among others. =============== B U L G A R I A =============== JETFINANCE INT'L: S&P Rates EUR250-Million EMTN Program at B ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary 'B' senior unsecured debt rating to the first tranche of notes to be issued by JetFinance International AD in November 2006, under its EUR250 million EMTN program. At the same time, Standard & Poor's assigned its 'B' short-term and senior unsecured debt ratings to the EUR250 million EMTN program. The ratings on JetFinance reflect: -- its concentrated business in the developing and fast-growing consumer finance market in Bulgaria, which generically has a high risk/reward nature; -- its short operating track record; and -- funding constraints. Positive rating factors include: -- the company's good market position, -- an efficient and well-run business model, and -- strong profitability and capitalization, although capitalization is being eroded by rapid asset growth. JetFinance's performance also benefits from positive economic trends. However, after a rapid buildup of consumer debt in Bulgaria recently, delinquency levels are starting to increase, but remain at manageable levels. ============= F I N L A N D ============= INTERGRAPH CORP: S&P Assigns B Rating on Proposed Bank Facility --------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B' corporate credit rating to Huntsville, Alabama-based Intergraph Corp., a global supplier of spatial information management software. The outlook is positive. "At the same time, we assigned our 'B' bank loan rating, with a recovery rating of '2', to the company's proposed US$465 million first priority senior secured bank facility, which will consist of a US$390 million term loan (due 2014) and a US$75 million revolving credit facility (due 2012), indicating that lenders can expect a substantial (80%-100%) recovery of principal in the event of a payment default," said Standard & Poor's credit analyst David Tsui. The rating agency assigned its 'CCC+' bank loan rating, with a recovery rating of '4', to the proposed US$275 million second priority senior secured bank facility, which will consist of a US$275 million term loan (due 2014), indicating that lenders can expect a marginal (25%-50%) recovery of principal in the event of a payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds from the US$390 million first priority and US$275 million second priority senior secured credit facility, along with US$60 million PIK loan secured by certain non- operating assets and around US$425 million of equity, will be used to fund the purchase of Intergraph by the sponsors group. The rating on Intergraph reflects the highly competitive and consolidating government IT services industry, a short track record at current profitability levels, and high leverage. These factors are partly offset by recurring and predictable revenue stream stemming from long-term contracts and entrenched customer relationships. =========== F R A N C E =========== INFONXX INC: Recapitalization Cues Moody's to Place B2 Rating ------------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating to InfoNXX, Inc. InfoNXX is undertaking a recapitalization to repay existing debt of US$215.1 million, pay a dividend to shareholders of US$300 million, and pay fees and expenses. The transaction is being financed with proposed credit facilities that include a US$200 million senior secured first lien revolver, a US$275 million senior secured first lien term loan, and a US$125 million senior secured second lien term loan. Moody's assigned these first-time ratings to the proposed capital structure: -- US$200 million senior secured first lien revolver maturing Dec. 2010, B1 (LGD3, 35%) -- US$275 million senior secured first lien term loan B due 2012, B1 (LGD3, 35%) -- US$125 million senior secured second lien term loan due 2013, Caa1 (LGD5, 85%) -- Corporate family rating, B2 -- Probability of default rating, B2 The ratings outlook is stable. The ratings reflect significant leverage subsequent to the proposed recapitalization. Pro forma for the recapitalization and after application of Moody's standard adjustments, total debt to adjusted EBITDA at Sept. 30, 2006 was around 4.8 times, adjusted free cash flow to debt was about 7%, and adjusted EBIT coverage of interest expense was about 1.7x. EBITDA has been adjusted to reflect the expected pro forma effects of the company's recent France and Italy launches, two acquisitions, and the addition of a large customer account in the U.S. The key factors limiting InfoNXX's credit ratings are the significant amount of adjustments made to pro forma EBITDA and the company's lack of a track record operating at its current size and leverage. Moody's views InfoNXX's business profile as entailing certain risks. Rapid growth in the past two years, including two acquisitions in 2006, raises uncertainty and integration risk. Other risks include significant customer concentration in the U.S., technology risk regarding potential automated directory assistance, the possibility of wireless customers bringing their directory assistance services in-house, and competitive pricing practices in Europe. Strengths in InfoNXX's business profile include: -- its substantial market share and brand recognition in the U.K., France, and Ireland; -- long-term relationships and contracts with its largest corporate customers; and, -- moderately high switching costs. The B1 rating on the senior secured first lien credit facility reflects the facility's priority position in the capital structure and a Loss Given Default assessment of LGD3. Domestic borrowings under the first lien credit facility benefit from a first priority perfected lien on all tangible and intangible assets of the domestic borrower, InfoNXX, Inc., and the capital stock of its subsidiaries. Foreign borrowings under the first lien credit facility benefit from a first priority perfected lien on all tangible and intangible assets of the foreign borrowers, Carbone S.A.R.L., The Number U.K. Limited, and InfoNXX Lux. The rating on the first lien facility benefits from the loss absorption provided by the second lien term loan. Domestic borrowings are guaranteed by each existing and future domestic subsidiary of the domestic borrower, and the domestic borrower, the domestic guarantors, certain foreign subsidiaries, and each existing and future foreign subsidiary of the domestic borrower guarantee foreign borrowings. A debt allocation mechanism exists under which lenders of the first lien facilities would share losses in the event of a default. The security and guarantees are subject to customary exceptions and limitations. The Caa1 and LGD5 ratings assigned to the US$125 million senior secured second lien term loan reflect its subordination to the sizable amount of first lien debt. The second lien has the same borrowers and guarantees as the first lien facility, has a second priority claim on the same collateral, and also contains a loss-sharing mechanism. The stable ratings outlook reflects Moody's expectation that InfoNXX will successfully integrate its recent acquisitions and maintain solid EBITDA, free cash flow and operating margins. The outlook or ratings could be lowered if InfoNXX loses a significant customer, experiences integration inefficiencies, or encounters other operational difficulties that result in a sustained shortfall in EBITDA below current expectations causing adjusted debt to EBITDA to rise above 5.8x and adjusted EBIT to interest expense to fall below 1.5 times. A track record of sustained operating performance that results in adjusted debt to EBITDA of less than 4.6x and EBIT interest coverage above 1.9x would likely result in a positive change in the outlook or ratings. InfoNXX, Inc. is a non-carrier provider of directory assistance services in the U.S. and Europe particularly in the United Kingdom, France and Ireland. In the U.S., which comprised around one-third of third quarter 2006 revenue, wireless carriers outsource directory assistance calls to InfoNXX under long-term customer agreements. In Europe, the directory assistance market is deregulated and InfoNXX markets its brand and telephone numbers directly to the end user. Revenue for the twelve months ended September 30, 2006 was around US$429 million. RBS GLOBAL: Moody's Assigns Loss-Given-Default Rating ----------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for RBS Global Inc., as well as the Caa1 rating on the company's US$300 million 11.75% Senior Subordinate Notes due 2016 LGD6, 91%. Those debentures were assigned an LGD6 rating suggesting noteholders will experience a 91% loss in the event of default. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$150m Revolver due 2012 B1 Ba2 LGD2 20% US$610m Term Loan Facility due 2013 B1 Ba2 LGD2 20% US$485m 9.50% Sr. Notes due 2014 B3 B3 LGD4 66% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Milwaukee, Wisconsin, RBS Global Inc. -- http://www.rexnord.com/-- is engaged in the manufacture of motion technology products that includes gears, couplings, industrial bearings, flattop chain and modular conveyor belts, special components, industrial chain and aerospace bearings and seals. The company has locations in Brazil, France, Australia and China. SUPERIOR ESSEX: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for Superior Essex Communications LLC, as well as the B3 rating on the company's US$257.1 Million 9.% Senior Unsecured Notes due 2012. Those debentures were assigned an LGD5 rating suggesting noteholders will experience a 76% loss in the event of default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Atlanta, Georgia, Superior Essex Communications LLC -- http://www.superioressex.com/-- is a manufacturer of data communications, cables magnet wire, winding wire and electrical insulations. The company has operations in China, Mexico, and France. WELLMAN INC: Moody's Reviews Low-B Ratings & May Downgrade ---------------------------------------------------------- Moody's Investors Service downgraded Wellman Inc.'s corporate family rating to B3 from B2. The ratings on Wellman's first lien term loan due 2009 and second lien term loan due 2010 were downgraded to B1 and Caa1 from Ba3 and B3, respectively. The company's ratings were also placed under review for further possible downgrade. Ratings changes: * Corporate family rating, B3 from B2 * US$185 million First lien term loan due 2009, B1 from Ba3, LGD2, 29% * US$265 million Second lien term loan due 2010, Caa1 from B3, LGD5, 77% The downgrade of the corporate family rating reflects Wellman's low raw material margins, operating losses in each quarter of 2006, lack of free cash flow in 2006 and elevated leverage. The company has been subject to rising and volatile feedstock prices and has not been able to raise prices to maintain sufficient margins. Additionally, volumes in its fiber business continue to decline. The PET resin industry has suffered from Asian import competition and capacity additions that have limited producers ability to maintain adequate margins, conditions that are likely to worsen in 2007. Funds from operations during 2006 have not been sufficient to meet the company's elevated capital expenditures associated with the PET resin capacity expansion at its Pearl River, MS plant, sizeable working capital growth as a result of higher raw material costs and the startup of new capacity, and hurricane Katrina costs, resulting in an increase in debt of over US$100 million. The continuing review will consider the impact of deteriorating market conditions on the company's cash flows and its ability to maintain compliance with its financial covenant in its revolver over the next 12 months. Furthermore, it will examine the timing of several one-time cash in-flows that are expected to occur over the next 12 months that may improve the company's liquidity. The company expects to reduce costs and raise cash through the restructuring of its U.S. fibers operations and working capital reductions. It is also exploring strategic alternatives for its European operations. Additionally, insurance proceeds covering hurricane Katrina costs could benefit liquidity. Wellman manufactures and markets PET (polyethylene terephthalate) packaging resins under the PermaClear brand name and polyester staple fibers under the Fortrel brand name and engineering resins under the Wellamid Ecolon brand name. Wellman operates five manufacturing sites - three in the U.S., one in Ireland and one in the Netherlands. Wellman is headquartered in Fort Mill, South Carolina and had revenues of US$1.4 billion for the LTM ended Sept. 30, 2006. WELLMAN INC: S&P Lowers Ratings to B- on Weak Operating Earnings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Wellman Inc. by two notches, including its corporate credit rating, to 'B-' from 'B+'. The outlook is negative. "The downgrade follows Wellman's release of its third-quarter 2006 results and reflects significantly weaker-than-expected operating earnings and cash flow, resulting in the deterioration of liquidity and key credit protection measures," said Standard & Poor's credit analyst David Bird. While adverse working capital trends could reverse with lower raw material costs in the months ahead, Standard & Poor's expects business conditions to remain challenging, and Wellman's overall financial profile has weakened beyond expectations at the previous ratings. The rating agency is also concerned that Wellman's liquidity position, previously a supporting factor, could deteriorate further if raw material prices unexpectedly move against the company. Wellman continues to face an unfavorable supply and demand balance in PET resins because of recent capacity additions and ongoing cost pressures from Asian imports. The ratings on Shrewsbury, N.J.-based Wellman reflect a vulnerable business profile that recognizes the company's leading positions in the fragmented PET resin and polyester staple fiber segments of the polyester market, offset by inherent industry cyclicality, considerable competitive pressure from foreign producers primarily in Asia, and exposure to volatile raw material costs, which have remained high throughout 2006. Wellman, with about US$1.4 billion in annual revenues, is a narrowly focused U.S.-based chemical company. The company produces polyester staple fibers primarily for the home furnishing, fiberfill, and apparel markets, and is the second- largest producer of PET resins used in beverage bottles and food containers. Despite Wellman's solid market share of the U.S. market, the company lacks the diversity of some of its competitors and industry peers, which meaningfully heightens its exposure to industry downturns in the PET resins segment. Reduced liquidity and an onerous debt maturity profile during the next several years pressure Wellman's credit quality, particularly if business conditions continue to weaken. The ratings could be lowered further if PET resin markets fail to stabilize as expected because of increasing pressure from imports or if continued raw material price volatility results in further pressure on liquidity. ============= G E R M A N Y ============= ABI TEAK: Korneuburg Court Orders Closing of Business ----------------------------------------------------- The Land Court of Korneuburg entered an order Sept. 20 closing the business of LLC ABI Teak Concept (FN 258684v). Court- appointed property manager Georg Freimueller recommended the business closure after determining that the Debtor's continuing operations would reduce the value of the estate. The property manager can be reached at: Dr. Georg Freimueller c/o Dr. Erwin Senoner Alser Road 21 1080 Vienna, Austria Tel: 01/406 05 51 Fax: 01/406 96 01 E-mail: kanzlei@jus.at Headquartered in Klosterneuburg, Austria, the Debtor declared bankruptcy on July 28 (Bankr. Case No. 36 S 87/06w). Erwin Senoner represents Dr. Freimueller in the bankruptcy proceedings. ALLGEMEINE HYPOTHEKENBANK: S&P Cuts Rating on New Business Model ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on Germany-based Allgemeine HypothekenBank Rheinboden AG to 'BB' from 'BB+', following the review of the new business model the bank has recently started to implement. At the same time, the 'B' short-term rating was affirmed. The outlook remains negative. "The rating action reflects Standard & Poor's expectation that the adoption of the new business model will require an extended length of time, during which AHBR's earnings prospects are likely to remain dim," said Standard & Poor's credit analyst Volker von Kruechten. "In addition, the intended exclusive focus on commercial real estate operations in the difficult and competitive German market in the future, and AHBR's weak track record of its operating and risk management performance in recent years leave considerable uncertainties whether the reshaping can be successfully finalized." The planned far-reaching adjustments to AHBR's strategic focus will substantially alter the bank's business profile -- Standard & Poor's has factored into the rating the expectation that AHBR will finally succeed in selling its public sector financing and retail mortgage business. This could create the chance to ultimately develop a viable business model. After a rebranding to "Corealcredit" scheduled for 2007, the bank will have to prove, however, that it can restore its weakened capital-market reputation, underwrite profitable new business, and gain sufficient expertise to raise profitability and the relative importance of fee income by sales of new and sophisticated advisory services. "The negative outlook reflects Standard & Poor's view that AHBR remains confronted with significant execution risks during its restructuring and repositioning process, taking into consideration its moderate market position, poor business and earnings diversification, and considerable investment needs to develop a high level of expertise in profitable business areas required to cope with strong competition and an ongoing challenging domestic real estate market environment," said Mr. von Kruechten. Standard & Poor's would lower the ratings if the restructuring were to face major operational obstacles that would adversely affect AHBR's profitability, capitalization, and liquidity, or if asset quality were to deteriorate significantly against the expectation of a continued stabilization of German real estate markets. If Lone Star did not comply with its commitment to provide AHBR with adequate capitalization, implications would also be negative. Standard & Poor's would raise the ratings if AHBR were able to establish a favorable track record through the new business model with positive implications for the bank's profitability on a risk-adjusted basis and on its capital strength. LAUSCHA & CO.: Vienna Court Orders Business Shutdown ---------------------------------------------------- The Trade Court of Vienna entered an order Sept. 20 shutting down the business of KEG Lauscha & Co. (FN 251638g). Court- appointed property manager Andrea Prochaska recommended the business shutdown after determining that the continuing operations would reduce the value of the estate. The property manager can be reached at: Mag. Andrea Prochaska Wassergasse 33/12 1030 Vienna, Austria Tel: 718 77 50 Fax: 718 77 50 15 E-mail: anwalt@andrea-prochaska.at Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Aug. 24 (Bankr. Case No. 3 S 116/06p). LUNZ OEG: Steyr Court Orders Business Closure --------------------------------------------- The Land Court of Steyr entered an order Sept. 20 closing the business of OEG Lunz (FN 247854t). Court-appointed property manager Julius Bitter recommended the business closure after determining that the Debtor's continuing operations would reduce the value of the estate. The property manager can be reached at: Dr. Julius Bitter Schmideggstrasse 5 4560 Kirchdorf/Krems, Austria Tel: 07582/60040 E-mail: ra.bitter@aon.at Headquartered in Micheldorf, Austria, the Debtor declared bankruptcy on Sept. 11 (Bankr. Case No. 14 14 S 49/06p). NICOLA BOSTELMANN: Claims Registration Period Ends November 6 ------------------------------------------------------------- Creditors owed money by LLC Nicola Bostelmann & Sohn (FN 186713d) have until Nov. 6 to file written proofs of claims to court-appointed compensation manager Annemarie Kosesnik-Wehrle at: Dr. Eva Riess Zeltgasse 3/13 1080 Vienna, Austria Tel: 402 57 01-0 Fax: 402 57 01/21 E-mail: law@riess.co.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:00 a.m. on Nov. 20 to consider the adoption of the rule by compensation. The meeting of creditors will be held at: The Trade Court of Vienna Room 2102 Vienna, Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Sept. 20 (Bankr. Case No. 45 Sa 6/06w). PHOTRONICS INC: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. technology semiconductor and distributor sector, the rating agency affirmed its B1 corporate family rating on Photronics, Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$190MM 4.75% Convertible Subordinated Notes due 2006 B3 B2 LGD5 73% US$150MM 2.25% Convertible Subordinated Notes due 2008 B3 B2 LGD5 73% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Photronics, Inc. -- http://www.photronics.com/-- is a worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at strategically located manufacturing facilities in Europe, North America, and Asia. In Europe, the company maintains operations in Dresden, Germany and Manchester, U.K. PORTRAIT CORP: Claims Bar Date Slated for November 28 ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York set 5:00 p.m., eastern time, on Nov. 28, 2006, as the last day for persons owed money by Portrait Corp. of America Inc. and its debtor-affiliates to file their proofs of claim against the Debtors. The Bar Date applies to claims that arose on or prior to Aug. 31, 2006. The Proofs Of Claim must be received on or before the Bar Date by: a) if by mail: The U.S. Bankruptcy Court Southern District of New York Attn: Portrait Corp. of America Claims Processing Bowling Green Station P.O. Box 5074 New York, NY 10274-5074 b) if by messenger or overnight courier: Office of the Clerk The U.S. Bankruptcy Court Southern District of New York Re: Portrait Corp. of America Claims Processing One Bowling Green, New York, NY 10274 About Portrait Corporation Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. At June 30, 2006, the Debtor had total assets of $153,205,000 and liabilities of $372,124,000. Going Concern Doubt Eisner LLP raised substantial doubt about Portrait Corp. of America, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Jan. 29, 2006. The auditor pointed to the Company's substantial net loss, negative working capital, stockholders' deficiency, default of certain obligations, which were due on June 15, 2006, and insufficient liquidity to meet those obligations. RED HAT: Begins US$325-Mln Stock & Debenture Repurchase Program --------------------------------------------------------------- Red Hat Inc.'s Board of Directors has authorized a US$325 million Stock and Debenture Repurchase Program. Under the program, the company is authorized to repurchase in aggregate up to US$250 million of the company's common stock and in aggregate up to US$75 million of the company's 0.5% Convertible Senior Debentures due 2024. Repurchases of common stock and Convertible Debentures may be effected, from time to time, either on the open market or in privately negotiated transactions, as applicable. Red Hat Inc. -- http://www.redhat.com/-- provides open source software solutions to the enterprise, including its core enterprise operating system platform, Red Hat Enterprise Linux, as well as other Red Hat enterprise technologies. It employs an open source software development and licensing model that uses the collaborative input of an international community of contributors to develop and enhance software. The company has offices in Singapore, Germany, and Argentina. * * * As reported in the TCR-Europe on Oct. 30, Standard & Poor's Ratings Services revised its outlook on Raleigh, N.C.-based operating systems provider Red Hat Inc. to stable from positive, and affirmed its 'B+' corporate credit rating. SANIERUNGS-UND SCHULDNERBERATUNG: Meeting Slated for Nov. 20 ------------------------------------------------------------ Creditors owed money by LLC Sanierungs - und Schuldnerberatung (FN 264834m) are encouraged to attend the creditors' meeting at 9:30 a.m. on Nov. 20 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of Krems an der Donau Hall A 2nd Floor Krems an der Donau, Austria Headquartered in Krems an der Donau, Austria, the Debtor declared bankruptcy on Sept. 20 (Bankr. Case No. 9 S 47/06v). Alexander Riel serves as the court-appointed property manager of the bankrupt estate. The property manager can be reached at: Dr. Alexander Riel Utzstrasse 7 3500 Krems, Austria Tel: 02732/79 5 20 Fax: 02732/79 5 20-11 E-mail: brenner-riel@ktv-krems.at TKH LLC: Claims Registration Period Ends November 6 --------------------------------------------------- Creditors owed money by LLC TKH (FN 91293f) have until Nov. 6 to file written proofs of claims to court-appointed property manager Michael Ludwig Lang at: Mag. Michael Ludwig Lang Maria Theresien-Road 9/4 1090 Vienna Tel: 3193260 Fax: 31932609 E-mail: lang@brandlang.com Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:45 a.m. on Nov. 20 to consider the adoption of the rule by revision and accountability. The meeting of creditors will be held at: The Trade Court of Vienna Room 1607 16th Floor Vienna, Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Sept. 20 (Bankr. Case No. 28 S 52/06k). VITAL PLUS: Creditors' Meeting Slated for November 9 ---------------------------------------------------- Creditors owed money by LLC Vital Plus For Women (FN 238692v) are encouraged to attend the creditors' meeting at 9:00 a.m. on Nov. 9 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of Feldkirch Hall 45 1st Floor Feldkirch, Austria Headquartered in Dornbirn, Austria, the Debtor declared bankruptcy on Sept. 20 (Bankr. Case No. 13 S 45/06g). Klaus Fischer serves as the court-appointed property manager of the bankrupt estate. Susanne Fink represents Dr. Fischer in the bankruptcy proceedings. The property manager and his representative can be reached at: Dr. Klaus Fischer c/o Mag. Susanne Fink Marktstrasse 12 6850 Dornbirn, Austria Tel: 05572/25871 Fax: 05572/25871-2 E-mail: office@fischer-walla-matt.at =========== G R E E C E =========== INTERGRAPH CORP: S&P Assigns B Rating on Proposed Bank Facility --------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B' corporate credit rating to Huntsville, Alabama-based Intergraph Corp., a global supplier of spatial information management software. The outlook is positive. "At the same time, we assigned our 'B' bank loan rating, with a recovery rating of '2', to the company's proposed US$465 million first priority senior secured bank facility, which will consist of a US$390 million term loan (due 2014) and a US$75 million revolving credit facility (due 2012), indicating that lenders can expect a substantial (80%-100%) recovery of principal in the event of a payment default," said Standard & Poor's credit analyst David Tsui. The rating agency assigned its 'CCC+' bank loan rating, with a recovery rating of '4', to the proposed US$275 million second priority senior secured bank facility, which will consist of a US$275 million term loan (due 2014), indicating that lenders can expect a marginal (25%-50%) recovery of principal in the event of a payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds from the US$390 million first priority and US$275-mln second priority senior secured credit facility, along with US$60 million PIK loan secured by certain non-operating assets and around US$425 million of equity, will be used to fund the purchase of Intergraph by the sponsors group. The rating on Intergraph reflects the highly competitive and consolidating government IT services industry, a short track record at current profitability levels, and high leverage. These factors are partly offset by recurring and predictable revenue stream stemming from long-term contracts and entrenched customer relationships. ============= H U N G A R Y ============= BANTA CORP: Inks US$1.3-Bln Acquisition Deal With RR Donnelley -------------------------------------------------------------- R.R. Donnelley & Sons Company and Banta Corporation have signed a definitive agreement pursuant to which RR Donnelley will acquire Banta, a provider of printing, supply chain management and related services. The all-cash deal is valued at around US$1.3 billion, or US$36.50 per share after the special dividend of US$16.00 per share already declared by Banta. The agreement has been unanimously approved by the Boards of Directors of both companies and is expected to close in the first quarter of 2007. The acquisition is expected to be accretive to RR Donnelley's earnings in the first full year after the closing of the transaction and is subject to customary closing conditions, including regulatory approval and approval of Banta shareholders. The combination will enable RR Donnelley to expand the range of products and services it offers customers, while at the same time enhancing its services to the magazine, catalog, book and direct marketing segments. Banta, with operations in the United States, Europe and Asia, will significantly enhance RR Donnelley's geographic footprint and create opportunities for additional scale in locations where RR Donnelley is already present. Banta has annual revenues of around US$1.5 billion and provides comprehensive printing and digital imaging solutions to leading publishers and direct marketers, including advanced digital content management and e-business services. Banta also provides a wide range of procurement management and other outsourcing capabilities to the world's largest technology companies. "Banta is an exceptional fit with RR Donnelley," Mark A. Angelson, RR Donnelley's Chief Executive Officer, said. "This combination will create immediate cross-selling opportunities with our blue-chip customers as well as offer substantial synergies in our procurement, manufacturing and services operations. We are delighted to have the opportunity to better serve our customers by expanding the flexibility of our combined global manufacturing and service platforms. The addition of Banta furthers our goal of increasing long-term shareholder value and we look forward to maximizing the benefits for our customers, employees and investors." "RR Donnelley's innovative, customer-centered approach, broad product and service mix and emphasis on developing value-added solutions mirrors Banta's," Stephanie A. Streeter, Banta's Chairman and Chief Executive Officer, said. "Joining these two highly successful, complementary companies will result in a combined organization that creates new and exciting opportunities for our customers and employees moving forward. Together, the companies will offer enhanced capabilities and an increased array of options to our customers and I look forward to working closely with RR Donnelley's management to ensure a smooth transition." "Our publishing, catalog and direct marketing customers, in particular, will benefit from combined resources that will allow us to craft even more innovative and responsive solutions," John Paloian, RR Donnelley Group President, Publishing & Retail Services, added. "From digital prepress capabilities through sophisticated logistics, our enhanced flexibility will allow us to address our customers' needs more quickly for cost-effective and compelling communications." Also, RR Donnelley reaffirmed its previously announced 2006 full year non-GAAP net earnings per diluted share from continuing operations earnings guidance to be in the range of US$2.45 to US$2.50, but trending toward the high end of the range. GAAP net earnings per diluted share from continuing operations in 2006 may include restructuring, impairment and integration charges, the resolution of certain tax items and other items that are not currently determinable, but may be significant. For that reason, the company is unable to provide full-year GAAP net earnings estimates at this time. Goldman, Sachs & Co. served as financial advisor to RR Donnelley and Sullivan & Cromwell LLP provided legal counsel. UBS Securities LLC served as financial advisor to Banta and Foley & Lardner LLP provided legal counsel. About RR Donnelley Headquartred in Chicago, IL, R.R. Donnelley & Sons Company -- http://www.rrdonnelley.com/-- provides print and related services, including document-based business process outsourcing. Founded more than 140 years ago, the company provides solutions in commercial printing, direct mail, financial printing, print fulfillment, labels, forms, logistics, call centers, transactional print-and-mail, print management, online services, digital photography, color services, and content and database management to customers in the publishing, healthcare, advertising, retail, technology, financial services and many other industries. About Banta Headquartered in Menasha, Wisconsin, Banta Corporation -- http://www.banta.com/-- provides printing and supply-chain management services. It provides a comprehensive combination of printing, binding and digital imaging solutions to leading publishers and direct marketers. The group operates in Ireland, Hungary, The Netherlands, U.K., Singapore, Hong Kong and China. * * * As reported in the TCR-Europe on Oct. 31, Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Banta Corp., a Menasha, Wis.-based printing and supply chain management services company. At the same time, Standard & Poor's assigned its 'BB' bank loan rating and '3' recovery rating to the company's US$515 million senior secured credit facilities reflecting our expectation for a meaningful (50%-80%) recovery of principal in the event of a payment default. Proceeds from the bank facilities will be primarily used to fund a US$16 per share cash dividend (about US$388 million), refinance certain existing debt, and for general corporate purposes. As reported in the TCR-Europe on Oct. 27, Moody's Investors Service assigned a Ba2 rating to the proposed senior secured bank credit facility of Banta Corp. The majority of the proceeds of the proposed facility will fund an approximately US$390 million special shareholder dividend. Moody's also assigned a Ba2 corporate family rating, a Ba3 probability of default rating, and an SGL-1 speculative grade liquidity rating to Banta. Moody's said the outlook is stable. BANTA CORP: Moody's May Upgrade Ratings on Acquisition Offer ------------------------------------------------------------ Moody's Investors Service affirmed the Baa2 Senior Unsecured and P-2 short-term ratings of RR Donnelley and Sons Co., while placing the Ba2 Corporate Family Rating, Ba2 Senior Secured rating, Ba3 Probability of Default and LGD3 (39%) Loss-Given- Default rating of Banta Corp. under review for possible upgrade. The SGL-1 liquidity rating of Banta remains unchanged. This action reflects the announcement that RRD has made a US$900 million all-cash acquisition offer for Banta US$36.50/share), which has been approved by Banta's Board. Banta will also pay an extraordinary dividend of around US$400 million to its shareholders (US$16/share). The outlook for RRD's ratings remains negative. The affirmation of RRD's long term rating reflects Moody's belief that the acquisition, if consummated, will not negatively affect RRD's credit metrics by 2008, assuming, importantly, that the company dedicates all of its expected cash flow towards debt reduction. Moody's expects an immediate deterioration of credit metrics, but the rating has been maintained because Moody's believes the company is likely to focus on debt reduction following the Banta acquisition. Moody's expects Debt/EBITDA to increase around � of a turn towards 3X, pro-forma for 2006 (after Moody's standard adjustments), before reducing back towards 2x by 2008. Moody's also assumes that there will be some synergy benefits to come from this acquisition by 2008, after usual interim integration and restructuring costs are incurred in 2007. The outlook for RRD's ratings remains negative because of Moody's concerns over the continuing difficult conditions in the printing industry, as well as both acquisition risk and the potential for share buybacks. RRD has been acquisitive over the past several years and although Moody's has concluded that the proposed acquisition of Banta can be accommodated within the existing Baa2 rating, the risk remains that RRD will undertake one or more future acquisitions that will collectively cause a deterioration of expected 2008 credit metrics. As well, even though Moody's is currently assuming that RRD will dedicate all cash flow to debt reduction following the proposed acquisition, the company has nevertheless recently authorized a US$350 million share buyback program. The review of Banta's ratings will focus on the likelihood of the acquisition closing, the potential for RRD to refinance Banta's debt, and the impact on its standalone operating performance and credit metrics caused by its pending ownership by RRD. Rating actions: Issuer: Banta Corporation * Corporate Family Rating, Placed on Review for Possible Upgrade, currently Ba2 * Outlook, Changed To Rating Under Review From Stable RR Donnelley and Sons Co., the world's largest commercial printer with revenue of over US$9 billion, is headquartered in Chicago, Illinois. Banta Corp., a commercial printer with revenue of around US$1.5 billion, is headquartered in Menasha, Wisconsin. ============= I R E L A N D ============= BENCHMARK ELECTRONICS: Acquisition Deal Spurs S&P's BB- Rating -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on Angleton, Texas-based Benchmark Electronics Inc. on CreditWatch with positive implications following the company's announcement that it will acquire Pemstar Inc. in a stock transaction valued at about US$300 million. Pemstar is an electronics manufacturing service company that has good penetration in adjacent markets to Benchmark. Pemstar reported revenues of US$871 million for the fiscal year ended March 31, 2006, around 46% of which (excluding a turnkey sales arrangement) is derived from industrial equipment programs, nearly double Benchmark's revenue contribution from that segment. Profitability has been suppressed by restructuring actions and an unprofitable contract that is being evaluated to determine strategic alternatives. "The acquisition will broaden Benchmark's market reach in higher margin, stable programs in industrial equipment as well as augmenting low cost manufacturing capacity," said Standard & Poor's credit analyst Lucy Patricola. The acquisition will increase Benchmark's revenue by over 30% and enhance its business position, which has been a limiting factor for its ratings. While Benchmark retains sufficient liquidity to extinguish Pemstar debt of about US$100 million, leverage would remain low, under 1x, if the debt remains outstanding. The rating agency will meet with management to discuss and evaluate the enhanced business prospects of the combined companies, as well as any restructuring costs and their impact, to determine the final impact on the rating. COMMSCOPE INC: Earns US$43.6 Million Net Income in Third Quarter ---------------------------------------------------------------- CommScope Inc. disclosed its third quarter results for the period ended Sept. 30, 2006. The company reported record third quarter sales of US$466.1 million and net income of US$43.6 million. The reported net income includes after-tax charges of US$1.9 million related to restructuring costs. Excluding this special item, adjusted third quarter earnings were US$45.5 million. For the third quarter of 2005, CommScope reported sales of US$345.6 million and net income of US$11.5 million. The reported net income included total after-tax charges of US$11.2 million, primarily for equipment impairment related to global manufacturing initiatives. Excluding these special items, adjusted earnings were US$22.7 million. "We delivered record third-quarter results fueled by the expanding global demand for bandwidth," said Frank M. Drendel, CommScope Chairman and Chief Executive Officer. "We believe our performance demonstrates we are executing our strategy well and are strongly positioned for success in 2007." "We posted strong sales growth in all segments," added Mr. Drendel. "Business enterprises are upgrading their Local Area Networks and data centers. Broadband service providers and telecommunication carriers are investing in their infrastructure to provide the 'quadruple play' of video, data, voice and mobility. CommScope's expanding portfolio of infrastructure solutions continues to enable a host of new and exciting communications services." Sales Overview Sales for the third quarter of 2006 increased 34.9% year over year, primarily driven by increased customer demand and price increases in response to higher raw material costs. Enterprise sales rose 41.6% year over year to US$237.7 million. Sales rose across essentially all geographic regions with particular strength in the European region. The strong third quarter growth is primarily due to unusually strong orders received during the second quarter and price increases resulting from increased commodity prices. The Enterprise segment continued to experience organic growth as businesses moved toward consolidated data centers and updated their Local Area Networks to support bandwidth intensive applications. Broadband segment sales rose to US$143.8 million, up 17.6% year over year, as a result of higher prices for coaxial cable products, increased global sales volumes in all regions and a product line acquisition announced earlier this year. Broadband sales continued to be positively affected by competition between cable television operators and telephone companies. Carrier sales rose 52.9% year over year to US$85.0 million due to substantially increased demand for Integrated Cabinet Solutions products. ICS sales increased as domestic telephone companies continued investing in their infrastructure to support video and high-speed data services. Total international sales rose 22.0% year over year to US$137.1 million, or around 29.4% of total company sales. Overall orders booked in the third quarter of 2006 were US$392.6 million, up 6.6% from the year-ago quarter. Global Manufacturing Initiatives CommScope's third quarter 2006 results reflect net pretax restructuring charges of US$3.0 million ($1.9 million after tax) primarily for equipment relocation costs associated with the company's global manufacturing initiatives. The company has essentially completed the Enterprise portion of these initiatives. The Broadband portion of these initiatives is expected to be completed in the first quarter of 2007. Other Third Quarter 2006 Highlights -- CommScope's SYSTIMAX(R) SolutionsTM joined the Cisco Technology Developer Program as an IP Communications Participant Partner. The Cisco Technology Developer Program sets criteria for interoperability testing by independent third parties and enables leading product and services firms to deploy innovative business solutions. This program provides enterprise or service provider customers with information regarding Cisco Technology Developer Partner products and services that an independent testing facility has tested and found to interoperate with Cisco networking technology. -- gross margin for the third quarter rose to 30.0%, up more than 250 basis points year over year and up more than 350 basis points sequentially. The gross margin improvements were primarily due to higher sales volume and selling prices, favorable product mix and the positive impact of the Company's global manufacturing initiatives. -- SG&A for the third quarter of 2006 was US$62.8 million or 13.5% of sales, compared to US$51.3 million or 14.8% of sales in the year-ago quarter. SG&A declined as a percentage of sales primarily due to higher sales levels. -- third quarter 2006 results include US$1.3 million of pretax equity-based compensation expense accounted for in accordance with SFAS No. 123(R). -- operating income for the third quarter of 2006 was US$64.9 million or 13.9% of sales. Excluding restructuring costs, operating income would have been US$67.9 million or 14.6% of sales. In the year-ago quarter, operating income was US$19.9 million or 5.8% of sales. Excluding special items, operating income would have been US$33.9 million or 9.8% of sales for the quarter. -- total depreciation and amortization expense was US$13.4 million for the third quarter, which included US$3.2 million of intangibles amortization. -- net cash provided by operating activities in the third quarter was US$34.8 million, up 22% year over year. Capital spending in the quarter was US$7.6 million. CommScope also recently reported that its wholly owned subsidiary, Connectivity Solutions Manufacturing Inc. had closed on a previously announced agreement to sell real estate consisting of around 70 acres and a 580,000-sq. ft. building at the CSMI manufacturing facility located in Omaha, Nebraska. The sales price for the land and building was around US$11 million. The sale will be recorded in the fourth quarter of 2006. Fourth Quarter 2006 Guidance * for the fourth quarter of 2006, revenue is expected to be US$370-$385 million and operating margin is expected to be 9%-10%, excluding special items; * effective tax rate of around 30%-34%; and * capital spending of around US$5-$8 million. Based on the fourth quarter 2006 guidance, sales for calendar year 2006 are expected to be around US$1.60-$1.62 billion, up 20% year over year. Operating margin for calendar year 2006 is estimated to be around 10.5%, excluding special items. Calendar Year 2007 Guidance * for calendar year 2007, revenue is expected to be in the range of US$1.70-$1.75 billion and operating margin is expected to be 11.5% or better, excluding special items. * effective tax rate of around 30%-34%; * depreciation and amortization expense of around US$50 million; and * capital spending of around US$30-$40 million. "As we move into the seasonally slower fourth quarter, we expect a greater than normal sequential sales decline due primarily to strong shipments in the third quarter," said Executive Vice President and Chief Financial Officer Jearld L. Leonhardt. "Our calendar year 2007 sales guidance is based on our assumption of relatively constant raw material costs, modest volume growth and a stable business environment," noted Leonhardt. "Based upon this revenue outlook, we believe we can deliver another year of good earnings growth." Based in Hickory, North Carolina, CommScope, Inc. (NYSE:CTV) -- http://www.commscope.com/-- designs and manufactures "last mile" cable and connectivity solutions for communication networks. Through its SYSTIMAX(R) Solutions(TM) and Uniprise(R) Solutions brands CommScope is the global leader in structured cabling systems for business enterprise applications. It is also the world's largest manufacturer of coaxial cable for Hybrid Fiber Coaxial applications. Backed by strong research and development, CommScope combines technical expertise and proprietary technology with global manufacturing capability - including those in China, Brazil, Australia and Ireland -- to provide customers with high-performance wired or wireless cabling solutions. * * * Moody's Investors Service confirmed its Ba2 Corporate Family Rating for CommScope Inc. and upgraded its B1 rating on the company's US$250 million Senior Subordinated Note due 2024 to Ba3 in connection with Moody's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. Moody's assigned those debentures an LGD5 rating suggesting noteholders will experience a 73% loss in case of default. INFONXX INC: Recapitalization Cues Moody's to Place B2 Rating ------------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating to InfoNXX, Inc. InfoNXX is undertaking a recapitalization to repay existing debt of US$215.1 million, pay a dividend to shareholders of US$300 million, and pay fees and expenses. The transaction is being financed with proposed credit facilities that include a US$200 million senior secured first lien revolver, a US$275 million senior secured first lien term loan, and a US$125 million senior secured second lien term loan. Moody's assigned these first-time ratings to the proposed capital structure: -- US$200 million senior secured first lien revolver maturing Dec. 2010, B1 (LGD3, 35%) -- US$275 million senior secured first lien term loan B due 2012, B1 (LGD3, 35%) -- US$125 million senior secured second lien term loan due 2013, Caa1 (LGD5, 85%) -- Corporate family rating, B2 -- probability of default rating, B2 The ratings outlook is stable. The ratings reflect significant leverage subsequent to the proposed recapitalization. Pro forma for the recapitalization and after application of Moody's standard adjustments, total debt to adjusted EBITDA at Sept. 30, 2006 was around 4.8 times, adjusted free cash flow to debt was about 7%, and adjusted EBIT coverage of interest expense was about 1.7x. EBITDA has been adjusted to reflect the expected pro forma effects of the company's recent France and Italy launches, two acquisitions, and the addition of a large customer account in the U.S. The key factors limiting InfoNXX's credit ratings are the significant amount of adjustments made to pro forma EBITDA and the company's lack of a track record operating at its current size and leverage. Moody's views InfoNXX's business profile as entailing certain risks. Rapid growth in the past two years, including two acquisitions in 2006, raises uncertainty and integration risk. Other risks include significant customer concentration in the U.S., technology risk regarding potential automated directory assistance, the possibility of wireless customers bringing their directory assistance services in-house, and competitive pricing practices in Europe. Strengths in InfoNXX's business profile include: -- its substantial market share and brand recognition in the U.K., France, and Ireland; -- long-term relationships and contracts with its largest corporate customers; and, -- moderately high switching costs. The B1 rating on the senior secured first lien credit facility reflects the facility's priority position in the capital structure and a Loss Given Default assessment of LGD3. Domestic borrowings under the first lien credit facility benefit from a first priority perfected lien on all tangible and intangible assets of the domestic borrower, InfoNXX, Inc., and the capital stock of its subsidiaries. Foreign borrowings under the first lien credit facility benefit from a first priority perfected lien on all tangible and intangible assets of the foreign borrowers, Carbone S.A.R.L., The Number U.K. Limited, and InfoNXX Lux. The rating on the first lien facility benefits from the loss absorption provided by the second lien term loan. Domestic borrowings are guaranteed by each existing and future domestic subsidiary of the domestic borrower, and foreign borrowings are guaranteed by the domestic borrower, the domestic guarantors, certain foreign subsidiaries, and each existing and future foreign subsidiary of the domestic borrower. A debt allocation mechanism exists under which lenders of the first lien facilities would share losses in the event of a default. The security and guarantees are subject to customary exceptions and limitations. The Caa1 and LGD5 ratings assigned to the US$125 million senior secured second lien term loan reflect its subordination to the sizable amount of first lien debt. The second lien has the same borrowers and guarantees as the first lien facility, has a second priority claim on the same collateral, and also contains a loss-sharing mechanism. The stable ratings outlook reflects Moody's expectation that InfoNXX will successfully integrate its recent acquisitions and maintain solid EBITDA, free cash flow and operating margins. The outlook or ratings could be lowered if InfoNXX loses a significant customer, experiences integration inefficiencies, or encounters other operational difficulties that result in a sustained shortfall in EBITDA below current expectations causing adjusted debt to EBITDA to rise above 5.8x and adjusted EBIT to interest expense to fall below 1.5 times. A track record of sustained operating performance that results in adjusted debt to EBITDA of less than 4.6x and EBIT interest coverage above 1.9x would likely result in a positive change in the outlook or ratings. InfoNXX, Inc. is a non-carrier provider of directory assistance services in the U.S. and Europe particularly in the United Kingdom, France and Ireland. In the U.S., which comprised around one-third of third quarter 2006 revenue, wireless carriers outsource directory assistance calls to InfoNXX under long-term customer agreements. In Europe, the directory assistance market is deregulated and InfoNXX markets its brand and telephone numbers directly to the end user. Revenue for the twelve months ended September 30, 2006 was around US$429 million. VALASSIS COMMS: Earns US$6.6 Million in Third Quarter 2006 ---------------------------------------------------------- Valassis Communications Inc.'s revenues decreased 6.5% to US$248.9 million in the third quarter 2006, compared with the same period of 2005. Valassis Communications' third-quarter net earnings were US$6.6 million. Earnings prior to US$10.1 million (net of tax) in charges related to the proposed acquisition of ADVO and the subsequent lawsuit to rescind the agreement and US$2.3 million (net of tax) of non-recurring charges taken in the third quarter were US$19.0 million. Alan F. Schultz -- Valassis Communications chairperson, president and chief executive officer, said, "While we have made important progress in some areas of our business, year-to-date, our 2006 performance has fallen short of expectations. Clearly, the freestanding insert industry continues to be very price competitive, and in fact, the revenue and profit decline in this segment of our business in Q3 (third quarter) is entirely attributable to pricing. This competitive pricing environment will also negatively impact 2007 FSI revenue and profitability." "Accordingly, we have refocused our efforts on our Strategic Growth Initiative, which has been geared toward attaining sustainable growth and the enhancement of shareholder value. We are confident in and committed to this plan for growth, which addresses four key strategies designed to: grow and diversify our revenue base; restore and enhance profit margins across all business units; leverage data, technology and analytics to enhance our competitive advantage; and enrich and evolve our strong traditions and culture," Mr. Schultz stated. Financial Highlights -- selling, general and administrative expense for the third quarter of 2006 includes US$6.4 million in costs related to the close-down of both the French agency business and the eSettlement business unit of NCH and expenses related to the proposed ADVO acquisition and subsequent efforts to rescind the merger agreement. Without these charges, selling, general and administrative expense decreased 3.9% to US$32.2 million compared to the third quarter of 2005 due to reductions in headcount and incentive compensation expenses, partially offset by the inclusion of US$1.4 million in stock option expense in accordance with FAS123R. -- cash and auction-rate securities at the end of the quarter were US$167.5 million. -- the company's debt position, net of cash and auction-rate securities, was US$92.4 million at quarter-end. -- on Oct. 2, 2006, the company paid a cash settlement in the amount of US$11.3 million in connection with the termination of a US$400 million interest-rate swap contract. The company did not exercise its US$400 million interest-rate swaption contract that expired on Sept. 28, 2006, for which it paid a premium of US$1.0 million. Both of these contracts were entered into as a bridge hedge for a portion of the acquisition financing related to the proposed ADVO transaction pursuant to a merger agreement which the company is now seeking to rescind. These charges have been included in interest expense during the quarter ended Sept. 30, 2006. On Sept. 28, 2006, the company replaced its bridge hedge by entering into a new US$400 million swaption contract. The premium paid for the new swaption was around US$2.1 million, representing the maximum cost to be recognized as interest expense as the swaption is marked to market over the reporting period through Feb. 28, 2007. -- capital expenditures through the first nine months of 2006 were US$8.4 million in comparison to US$22.0 million for the first nine months of 2005. The company expects capital expenditures to be substantially less than the US$20 million level originally forecasted for 2006. Business Segment Discussion -- Market Delivered Free-standing Insert (FSI): Co-op FSI revenues for the third quarter were US$105.9 million, down 7.1% from the third quarter of 2005. This decrease was due to a reduction in FSI pricing compared to the third quarter of 2005. As expected, Valassis' FSI market share during the third quarter of 2006 was up modestly versus the first half of 2006. Management noted that FSI cost of goods sold was down by around 3% for the quarter on a cost per thousand (CPM) basis due to reductions in media insertion rates and the cost of paper. -- Market Delivered Run of Press (ROP): ROP revenues, generated from the brokering of advertising space on behalf of newspapers, were down 17.4% in the third quarter to US$24.6 million due to a change in mix to more fee-based business versus margin-based business. While ROP revenues were down, the company earned US$4.4 million in profit for ROP for the quarter, an increase of 104.4% over the third quarter of 2005. -- Neighborhood Targeted Products (Cluster Targeted): Neighborhood Targeted product revenues decreased 10.0% for the quarter to US$79.0 million. This segment continued to be affected by a pullback in spending due to industry consolidations in the telecommunications and appliance manufacturing industries, and the reduction in spending of a specialty retail customer. As expected, the company had a strong quarter in the sampling business. -- Household Targeted Products (1 to 1): Household Targeted product revenues were flat for the third quarter at US$12.6 million, as a result of securing new business to offset the loss of revenue associated with the discontinuance of PreVision's agency business. The Household Targeted product segment continued to be profitable. -- International & Services: International & Services revenues are comprised of NCH Marketing Services, Valassis Canada and Promotion Watch. International & Services reported revenues of US$26.8 million for the third quarter, up 22.4%, driven by increased revenue from the French media business and Valassis Canada. During the quarter, the company recognized a US$1.7 million non-recurring charge, net of tax, related to the close-down of the French agency business as it continues to transition to a media-based business model. The company also closed down the eSettlement unit of NCH with an associated US$0.6 million non-recurring charge, net of tax. Outlook "Regarding our current 2006 EPS guidance range of US$1.60 to US$1.80 per share, we still have some selling time left in the year and some hard work to do to get to the low end of this range, excluding transaction costs and other, one-time charges," said Mr. Schultz. "Additionally, several factors, including the pending outcome of the ADVO litigation and continuing negotiations of the remaining FSI business to be contracted for 2007, suggest that now is not the best time to provide 2007 EPS guidance. At the same time, we believe existing contracts and those currently in negotiation are expected to lead to a pricing decline next year, similar to the one experienced in 2006, which is around 10 percent," Mr. Schultz concluded. Headquartered in Livonia, Michigan, Valassis Communications Inc. -- http://www.valassis.com/-- offers a wide range of marketing services to consumer-packaged goods manufacturers, retailers, technology companies and other customers with operations in the United States, France, Mexico and Canada. * * * As reported in the TCR-Europe on Nov. 1, Moody's Investors Service downgraded Valassis Communications, Inc.'s senior unsecured note ratings to Ba1 from Baa3. Moody's also assigned a Ba1 Corporate Family Rating, Ba1 Probability of Default Rating, and LGD4 loss given default assessments to Valassis' debt securities. The ratings remain on review for downgrade. Standard & Poor's Ratings Services lowered on July 9, 2006, its corporate credit and senior unsecured ratings on Valassis Communications Inc. to 'BB' from 'BB+' and left the ratings on CreditWatch with negative implications. WELLMAN INC: Moody's Reviewing Low-B Ratings & May Downgrade ------------------------------------------------------------ Moody's Investors Service downgraded Wellman, Inc.'s corporate family rating to B3 from B2. The ratings on Wellman's first lien term loan due 2009 and second lien term loan due 2010 were downgraded to B1 and Caa1 from Ba3 and B3, respectively. The company's ratings were also placed under review for further possible downgrade. Ratings changes: * Corporate family rating, B3 from B2 * US$185 million First lien term loan due 2009, B1 from Ba3, LGD2, 29% * US$265 million Second lien term loan due 2010, Caa1 from B3, LGD5, 77% The downgrade of the corporate family rating reflects Wellman's low raw material margins, operating losses in each quarter of 2006, lack of free cash flow in 2006 and elevated leverage. The company has been subject to rising and volatile feedstock prices and has not been able to raise prices to maintain sufficient margins. Additionally, volumes in its fiber business continue to decline. The PET resin industry has suffered from Asian import competition and capacity additions that have limited producers ability to maintain adequate margins, conditions that are likely to worsen in 2007. Funds from operations during 2006 have not been sufficient to meet the company's elevated capital expenditures associated with the PET resin capacity expansion at its Pearl River, MS plant, sizeable working capital growth as a result of higher raw material costs and the startup of new capacity, and hurricane Katrina costs, resulting in an increase in debt of over US$100 million. The continuing review will consider the impact of deteriorating market conditions on the company's cash flows and its ability to maintain compliance with its financial covenant in its revolver over the next 12 months. Furthermore, it will examine the timing of several one-time cash in-flows that are expected to occur over the next 12 months that may improve the company's liquidity. The company expects to reduce costs and raise cash through the restructuring of its U.S. fibers operations and working capital reductions. It is also exploring strategic alternatives for its European operations. Additionally, insurance proceeds covering hurricane Katrina costs could benefit liquidity. Wellman manufactures and markets PET (polyethylene terephthalate) packaging resins under the PermaClear brand name and polyester staple fibers under the Fortrel brand name and engineering resins under the Wellamid Ecolon brand name. Wellman operates five manufacturing sites - three in the U.S., one in Ireland and one in the Netherlands. Wellman is headquartered in Fort Mill, South Carolina and had revenues of US$1.4 billion for the LTM ended Sept. 30, 2006. WELLMAN INC: S&P Lowers Ratings to B- on Weak Operating Earnings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Wellman Inc. by two notches, including its corporate credit rating, to 'B-' from 'B+'. The outlook is negative. "The downgrade follows Wellman's release of its third-quarter 2006 results and reflects significantly weaker-than-expected operating earnings and cash flow, resulting in the deterioration of liquidity and key credit protection measures," said Standard & Poor's credit analyst David Bird. While adverse working capital trends could reverse with lower raw material costs in the months ahead, Standard & Poor's expects business conditions to remain challenging, and Wellman's overall financial profile has weakened beyond expectations at the previous ratings. The rating agency is also concerned that Wellman's liquidity position, previously a supporting factor, could deteriorate further if raw material prices unexpectedly move against the company. Wellman continues to face an unfavorable supply and demand balance in PET resins because of recent capacity additions and ongoing cost pressures from Asian imports. The ratings on Shrewsbury, N.J.-based Wellman reflect a vulnerable business profile that recognizes the company's leading positions in the fragmented PET resin and polyester staple fiber segments of the polyester market, offset by inherent industry cyclicality, considerable competitive pressure from foreign producers primarily in Asia, and exposure to volatile raw material costs, which have remained high throughout 2006. Wellman, with about US$1.4 billion in annual revenues, is a narrowly focused U.S.-based chemical company. The company produces polyester staple fibers primarily for the home furnishing, fiberfill, and apparel markets, and is the second-largest producer of PET resins used in beverage bottles and food containers. Despite Wellman's solid market share of the U.S. market, the company lacks the diversity of some of its competitors and industry peers, which meaningfully heightens its exposure to industry downturns in the PET resins segment. Reduced liquidity and an onerous debt maturity profile during the next several years pressure Wellman's credit quality, particularly if business conditions continue to weaken. The ratings could be lowered further if PET resin markets fail to stabilize as expected because of increasing pressure from imports or if continued raw material price volatility results in further pressure on liquidity. ========= I T A L Y ========= ROYAL & SUN: Shareholders Approve U.S. Operations Disposal ---------------------------------------------------------------- An Extraordinary General Meeting of Royal & Sun Alliance Insurance Group plc, unanimously approved the disposal of the company's U.S. operations. The decision of the attending shareholders was endorsed by the proxy votes cast. Summary of the proxy votes: For Discretionary Against Withheld ------------- ------------- ------- ---------- 1,868,875,131 1,978,186 359,786 15,592,395 Issued ordinary share capital as at Nov. 1, 2006: 2,961,858,493 The resolution was supported by a majority (99.99%) of the proxy votes cast (for votes plus discretionary). The disposal is subject to regulatory approvals and completion is targeted for yearend. About Royal & Sun Alliance Headquartered in London, United Kingdom, Royal & Sun Alliance Insurance Group Plc -- http://www.royalsunalliance.com/-- provides risk management and insurance solutions through two divisions focusing on property & casualty business and personal insurance. The group consists of three regions -- U.K., Scandinavia and International. The group operates in the U.K., Argentina, Bahrain, Belgium, Brazil, Canada, Chile, China, Colombia, Denmark, Egypt, France, Germany, Hong Kong, India, Ireland, Italy, Latvia, Lithuania, Malaysia, Mexico, Netherland Antilles, the Netherlands, Norway, Oman, Saudi Arabia, Singapore, Sweden, UAE, Uruguay, U.S.A. and Venezuela. * * * As reported in the TCR-Europe on Sept. 29, A.M. Best Co. has placed the financial strength ratings of C++ (Marginal) and the issuer credit ratings of "b" of the Royal & SunAlliance U.S.A. Insurance Pool and Royal Surplus Lines Insurance Company under review with developing implications pending the completion of the proposed sale of these operations to Arrowpoint Capital, a new company formed by the existing management team of these operations. All the above companies are domiciled in Wilmington, Delaware. R&SAUS and RSLIC are U.S. subsidiaries of Royal & Sun Alliance Insurance Group plc (London, England). As reported in the TCR-Europe on March 27, Standard & Poor's Ratings Services lowered its counterparty credit and insurer financial strength ratings on Royal & Sun Alliance Insurance Group PLC's U.S. insurance operations (RSA USA) to 'BB' from 'BB+'. S&P said the outlook remains negative. At the same time, the ratings were withdrawn at the request of the companies' management. ROYAL & SUN: Ends ADR Program & Delists Stock from NYSE ------------------------------------------------------- Royal & Sun Alliance Insurance Group plc has terminated its American Depositary Receipt program and voluntarily delisted from the New York Stock Exchange. Although ADR holders are no longer able to trade in the ADRs, they have until Nov. 30, 2006, to instruct Citigroup N.A., the Depositary, to exchange ADRs for R&SA ordinary shares. Holders who wish to exchange their ADRs for R&SA ordinary shares can call the Depositary on: Tel: 877 248 4237 (U.S.) +1 781 575 4555 (outside U.S.) Any ADRs in existence after Nov. 30, 2006, will be cancelled by the Depositary, who will then sell the R&SA ordinary shares underlying those ADRs, with ADR holders being entitled to the sale proceeds net of the Depositary's expenses and other costs. The Depositary's usual charges will apply to all exchanges of ADRs. In order to terminate R&SA's registration with the U.S. Securities and Exchange Commission and suspend SEC reporting obligations, R&SA must certify that there are less than 300 US holders of each relevant class of security, whether held directly or indirectly. On Oct. 26, 2006, R&SA shareholders approved a resolution to amend R&SA's Articles of Association to include provisions conferring upon the Board the power to require any US holder to sell securities. R&SA subsequently announced that US holders with an interest in less than 250,000 R&SA ordinary shares (equivalent to 50,000 ADRs) would be required to sell their R&SA ordinary shares by not later than Nov. 17, 2006. Further to the notices sent out, ADR holders are reminded that if they exchange their ADRs for R&SA ordinary shares their holdings will be subject to this sale process if: -- they hold less than 50,000 ADRs; -- are U.S. resident; -- appear to the Board to be U.S. resident; -- fail to respond to inquiries as to their status as U.S. residents; or -- fail to prove to R&SA's satisfaction that they are not U.S. residents. About Royal & Sun Alliance Headquartered in London, United Kingdom, Royal & Sun Alliance Insurance Group Plc -- http://www.royalsunalliance.com/-- provides risk management and insurance solutions through two divisions focusing on property & casualty business and personal insurance. The group consists of three regions -- U.K., Scandinavia and International. The group operates in the U.K., Argentina, Bahrain, Belgium, Brazil, Canada, Chile, China, Colombia, Denmark, Egypt, France, Germany, Hong Kong, India, Ireland, Italy, Latvia, Lithuania, Malaysia, Mexico, Netherland Antilles, the Netherlands, Norway, Oman, Saudi Arabia, Singapore, Sweden, UAE, Uruguay, U.S.A. and Venezuela. * * * As reported in the TCR-Europe on Sept. 29, A.M. Best Co. has placed the financial strength ratings of C++ (Marginal) and the issuer credit ratings of "b" of the Royal & SunAlliance U.S.A. Insurance Pool and Royal Surplus Lines Insurance Company under review with developing implications pending the completion of the proposed sale of these operations to Arrowpoint Capital, a new company formed by the existing management team of these operations. All the above companies are domiciled in Wilmington, Delaware. R&SAUS and RSLIC are U.S. subsidiaries of Royal & Sun Alliance Insurance Group plc (London, England). As reported in the TCR-Europe on March 27, Standard & Poor's Ratings Services lowered its counterparty credit and insurer financial strength ratings on Royal & Sun Alliance Insurance Group PLC's U.S. insurance operations (RSA USA) to 'BB' from 'BB+'. S&P said the outlook remains negative. At the same time, the ratings were withdrawn at the request of the companies' management. SEVERSTAL OAO: Names Alexei Mordashov as General Director --------------------------------------------------------- The Board of Directors of OAO Severstal has appointed Alexei Mordashov as General Director, starting Dec. 16, 2006, RIA Novosti says. Mr. Mordashov currently serves as Chairman of Severstal's Board of Directors and General Director of parent company Severstal Shareholder Group. He also holds a 90% stake in Severstal through his family-owned companies, Frontdeal Limited. Mr. Mordashov is offering 15% of the company's shares from his stake, effectively cutting his holdings from 90% to 75%. The company will commence its road show for the listing on Oct. 30. Severstal has acquired the service of Citigroup Inc., UBS AG and Deutsche Bank AG as joint coordinators and bookrunner for the London listing. About Severstal Headquartered in Cherepovets, Russia, OAO Severstal -- http://www.severstal.com/-- is the country's largest steel producer, with steel production of 17.1 million tons in 2005. The Company owns Severstal North America, the fifth largest integrated steel maker in the U.S. with 2005 production of 2.7 million tons, and Lucchini, Italy's second largest steel group with 2005 production of 3.5 million tons. Severstal is one of the world's lowest cost and most profitable steel producers, with 2005 EBITDA per ton of around EUR150 per ton. As of Dec. 31, 2005, Severstal had US$10.75 billion in total assets, US$3.66 billion in total liabilities and US$7.09 billion in total shareholders' equity. * * * As reported in the TCR-Europe on July 5, Standard & Poor's Ratings Services kept its 'B+' long-term corporate credit rating on Russian steelmaker OAO Severstal on CreditWatch with positive implications following the consolidation of the company's mining assets. The rating was placed on CreditWatch on May 26, following the announcement of a previously agreed merger between Severstal and Luxembourg-based steelmaker Arcelor S.A. This merger was cancelled on June 30. As reported in the TCR-Europe on June 28, Fitch Ratings maintained the Rating Watch Positive status for OAO Severstal's ratings of Issuer Default BB-, senior unsecured BB-, Short-term B and National Long-term A+. THERMADYNE HOLDINGS: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the Caa1 Corporate Family Rating for Thermadyne Holdings Corporation, as well as the Caa2 rating on the company's US$175 Million 9.25% Senior Subordinate Notes due Feb. 1, 2014. Those debentures were assigned an LGD5 rating suggesting noteholders will experience a 73% loss in the event of default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in St. Louis Missouri, Thermadyne Holdings Corporation -- http://www.thermadyne.com/-- is a multi-national manufacturer of welding and cutting products. The company has operations in Indonesia, Malaysia, Singapore, Philippines, Italy, Mexico and Brazil. =================== K A Z A K H S T A N =================== AKORD-LTD LLP: Creditors Must File Claims by Nov. 29 ---------------------------------------------------- The Specialized Inter-Regional Economic Court of Mangistau Region declared LLP Akord-Ltd insolvent on Sept. 5. Subsequently, bankruptcy proceedings were introduced at the company. Creditors have until Nov. 29 to submit written proofs of claim to: LLP Akord-Ltd Room 8 2nd Floor Building of Rail Road Station Micro District 28 Aktau Kazakhstan Tel: 8 (3292) 41-15-89 8 (7017) 75-79-29 ATF BANK: Moody's Assigns Ba3 Rating on Loan Participation Notes ---------------------------------------------------------------- Moody's Investors Service assigned a long-term foreign currency debt rating of Ba3 to the upcoming issue of subordinated loan participation notes to be issued on a limited recourse basis by ATF Capital B.V. for the sole purpose of funding a subordinated loan to Kazakhstan's ATFBank. These notes and the underlying loan will qualify as junior subordinated debt as per Moody's classification. The amount of the issue has yet to be determined. The final rating will be assigned upon receipt and review of the final documentation. The outlook for the rating is stable. The rating is based on Moody's assessment of ATFBank's fundamental credit quality which incorporates, apart from the bank's intrinsic financial strength, potential support from the Kazakhstani authorities in the event of need, in reflection of ATFBank's importance to the national banking system as the country's fourth-largest bank with an 8% market share in terms of banking assets as at Dec. 31, 2005. The Tier I securities will be undated perpetual, but will be callable by the issuer commencing from the 10th anniversary from the date of the issue (subject to regulatory approval). The rating also takes account of the relative ranking of the Tier I securities, which will stand senior to equity and preferred stock holders, on a par with unsecured, perpetual, non- cumulative, subordinated obligations, but behind most of the senior unsecured and dated non-perpetual subordinated obligations, in case of liquidation. Moody's also notes that the rating factors in the bank's mandatory obligation to suspend non-cumulative interest payments (in full or in part) on the underlying loan and on the notes, if it were in breach of local prudential capital adequacy requirements or if the payment results in such breach. In evaluating the securities for equity consideration as per Moody's baskets, the agency noted that the securities qualify for basket A (100% debt) based on the callable feature of the notes, the relatively weak trigger for ceasing coupon payments, as well as the securities' ranking in liquidation. ATFBank is headquartered in Almaty, Kazakhstan and reported total consolidated assets of KZT359.1 billion (US$2.7 billion) and total shareholders' equity of KZT27.5 billion (US$206 million) under IFRS as at year-end 2005. AVTOTORGSERVICE LLP: Proof of Claim Deadline Slated for Nov. 26 --------------------------------------------------------------- The Specialized Inter-Regional Economic Court of Kostanai Region declared LLP Avtotorgservice insolvent on Sept. 19. Creditors have until Nov. 26 to submit written proofs of claim to: LLP Avtotorgservice Room 321 Baitursynov Str. 95 Kostanai Kostanai Region Kazakhstan Tel: 8 (3142) 54-59-36 FERROHROM JSC: Claims Registration Ends Nov. 29 ----------------------------------------------- The Trade Union Organization of JSC Ferrohrom has declared insolvency. Creditors have until Nov. 29 to submit written proofs of claim to: The Trade Union Organization Of JSC Ferrohrom Industrial Zone of JSC TNK Kazhrom Aktobe Aktube Region Kazakhstan Tel/Fax: 8 (3132) 50-15-41 J. YRYS: Creditors' Filing Period Ends Nov. 29 ---------------------------------------------- The Specialized Inter-Regional Economic Court of Jambyl Region declared LLP J. Yrys insolvent on Aug. 29. Subsequently, bankruptcy proceedings were introduced at the company. Creditors have until Nov. 29 to submit written proofs of claim to: LLP J. Yrys Side Street 3 Avtomobilnyi, 16 Taraz Jambyl Region Kazakhstan Tel: 8 (3262) 31-60-44 KONYS COMPANY: Aktube Court Opens Bankruptcy Proceedings -------------------------------------------------------- The Specialized Inter-Regional Economic Court of Aktube Region commenced bankruptcy proceedings against LLP Company Konys on Sept. 19. MIRSAT LLP: Aktube Court Begins Bankruptcy Proceedings ------------------------------------------------------ The Specialized Inter-Regional Economic Court of Aktube Region commenced bankruptcy proceedings against LLP Mirsat on Sept. 20. MOSTOSTROY LLP: Creditors Must File Claims by Dec. 5 ---------------------------------------------------- LLP Joint Kazah-Ukrainian Enterprise Mostostroy has declared insolvency. Creditors have until Dec. 5 to submit written proofs of claim to: LLP Mostostroy Motrosov Str. 3 Arshaly Arshaly District Akmola Region Kazakhstan PETROSNABSERVICE LLP: Creditors' Claims Due Nov. 26 --------------------------------------------------- LLP Petrosnabservice has declared insolvency. Creditors have until Nov. 26 to submit written proofs of claim to: LLP Petrosnabservice Abylhair han Ave. 9- 41 Aktobe Aktube Region Kazakhstan PROD WEST: Proof of Claim Deadline Slated for Nov. 26 ----------------------------------------------------- The Specialized Inter-Regional Economic Court of Kostanai Region declared LLP Prod West insolvent on Sept. 7. Creditors have until Nov. 26 to submit written proofs of claim to: LLP Prod West Room 321 Baitursynov Str. 95 Kostanai Kostanai Region Kazakhstan Tel: 8 (3142) 54-59-36 =================== K Y R G Y Z S T A N =================== SAILYK-RESOURCE LLC: Creditors' Claims Due Dec. 15 -------------------------------------------------- LLC Sailyk-Resource has declared insolvency. Creditors have until Dec. 15 to submit written proofs of claim. Inquiries can be addressed to (+996 312) 61-20-47. TEYSI MARKET: Claims Registration Ends Dec. 15 ---------------------------------------------- LLC Teysi Market has declared insolvency. Creditors have until Dec. 15 to submit written proofs of claim. Inquiries can be addressed to (+996 312) 61-20-47. ===================== N E T H E R L A N D S ===================== BANTA CORP: Inks US$1.3-Bln Acquisition Deal With RR Donnelley -------------------------------------------------------------- R.R. Donnelley & Sons Company and Banta Corporation have signed a definitive agreement pursuant to which RR Donnelley will acquire Banta, a provider of printing, supply chain management and related services. The all-cash deal is valued at around US$1.3 billion, or US$36.50 per share after the special dividend of US$16.00 per share already declared by Banta. The agreement has been unanimously approved by the Boards of Directors of both companies and is expected to close in the first quarter of 2007. The acquisition is expected to be accretive to RR Donnelley's earnings in the first full year after the closing of the transaction and is subject to customary closing conditions, including regulatory approval and approval of Banta shareholders. The combination will enable RR Donnelley to expand the range of products and services it offers customers, while at the same time enhancing its services to the magazine, catalog, book and direct marketing segments. Banta, with operations in the United States, Europe and Asia, will significantly enhance RR Donnelley's geographic footprint and create opportunities for additional scale in locations where RR Donnelley is already present. Banta has annual revenues of around US$1.5 billion and provides comprehensive printing and digital imaging solutions to leading publishers and direct marketers, including advanced digital content management and e-business services. Banta also provides a wide range of procurement management and other outsourcing capabilities to the world's largest technology companies. "Banta is an exceptional fit with RR Donnelley," Mark A. Angelson, RR Donnelley's Chief Executive Officer, said. "This combination will create immediate cross-selling opportunities with our blue-chip customers as well as offer substantial synergies in our procurement, manufacturing and services operations. We are delighted to have the opportunity to better serve our customers by expanding the flexibility of our combined global manufacturing and service platforms. The addition of Banta furthers our goal of increasing long-term shareholder value and we look forward to maximizing the benefits for our customers, employees and investors." "RR Donnelley's innovative, customer-centered approach, broad product and service mix and emphasis on developing value-added solutions mirrors Banta's," Stephanie A. Streeter, Banta's Chairman and Chief Executive Officer, said. "Joining these two highly successful, complementary companies will result in a combined organization that creates new and exciting opportunities for our customers and employees moving forward. Together, the companies will offer enhanced capabilities and an increased array of options to our customers and I look forward to working closely with RR Donnelley's management to ensure a smooth transition." "Our publishing, catalog and direct marketing customers, in particular, will benefit from combined resources that will allow us to craft even more innovative and responsive solutions," John Paloian, RR Donnelley Group President, Publishing & Retail Services, added. "From digital prepress capabilities through sophisticated logistics, our enhanced flexibility will allow us to address our customers' needs more quickly for cost-effective and compelling communications." Also, RR Donnelley reaffirmed its previously announced 2006 full year non-GAAP net earnings per diluted share from continuing operations earnings guidance to be in the range of US$2.45 to US$2.50, but trending toward the high end of the range. GAAP net earnings per diluted share from continuing operations in 2006 may include restructuring, impairment and integration charges, the resolution of certain tax items and other items that are not currently determinable, but may be significant. For that reason, the company is unable to provide full-year GAAP net earnings estimates at this time. Goldman, Sachs & Co. served as financial advisor to RR Donnelley and Sullivan & Cromwell LLP provided legal counsel. UBS Securities LLC served as financial advisor to Banta and Foley & Lardner LLP provided legal counsel. About RR Donnelley Headquartred in Chicago, IL, R.R. Donnelley & Sons Company -- http://www.rrdonnelley.com/-- provides print and related services, including document-based business process outsourcing. Founded more than 140 years ago, the company provides solutions in commercial printing, direct mail, financial printing, print fulfillment, labels, forms, logistics, call centers, transactional print-and-mail, print management, online services, digital photography, color services, and content and database management to customers in the publishing, healthcare, advertising, retail, technology, financial services and many other industries. About Banta Headquartered in Menasha, Wisconsin, Banta Corporation -- http://www.banta.com/-- provides printing and supply-chain management services. It provides a comprehensive combination of printing, binding and digital imaging solutions to leading publishers and direct marketers. The group operates in Ireland, Hungary, The Netherlands, U.K., Singapore, Hong Kong and China. * * * As reported in the TCR-Europe on Oct. 31, Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Banta Corp., a Menasha, Wis.-based printing and supply chain management services company. At the same time, Standard & Poor's assigned its 'BB' bank loan rating and '3' recovery rating to the company's US$515 million senior secured credit facilities reflecting our expectation for a meaningful (50%-80%) recovery of principal in the event of a payment default. Proceeds from the bank facilities will be primarily used to fund a US$16 per share cash dividend (about US$388 million), refinance certain existing debt, and for general corporate purposes. As reported in the TCR-Europe on Oct. 27, Moody's Investors Service assigned a Ba2 rating to the proposed senior secured bank credit facility of Banta Corp. The majority of the proceeds of the proposed facility will fund an approximately US$390 million special shareholder dividend. Moody's also assigned a Ba2 corporate family rating, a Ba3 probability of default rating, and an SGL-1 speculative grade liquidity rating to Banta. Moody's said the outlook is stable. BANTA CORP: Moody's May Upgrade Ratings on Acquisition Offer ------------------------------------------------------------ Moody's Investors Service affirmed the Baa2 Senior Unsecured and P-2 short-term ratings of RR Donnelley and Sons Co., while placing the Ba2 Corporate Family Rating, Ba2 Senior Secured rating, Ba3 Probability of Default and LGD3 (39%) Loss-Given- Default rating of Banta Corp. under review for possible upgrade. The SGL-1 liquidity rating of Banta remains unchanged. This action reflects the announcement that RRD has made a US$900 million all-cash acquisition offer for Banta US$36.50/share), which has been approved by Banta's Board. Banta will also pay an extraordinary dividend of around US$400 million to its shareholders (US$16/share). The outlook for RRD's ratings remains negative. The affirmation of RRD's long term rating reflects Moody's belief that the acquisition, if consummated, will not negatively affect RRD's credit metrics by 2008, assuming, importantly, that the company dedicates all of its expected cash flow towards debt reduction. Moody's expects an immediate deterioration of credit metrics, but the rating has been maintained because Moody's believes the company is likely to focus on debt reduction following the Banta acquisition. Moody's expects Debt/EBITDA to increase around 3/4 of a turn towards 3X, pro-forma for 2006 (after Moody's standard adjustments), before reducing back towards 2x by 2008. Moody's also assumes that there will be some synergy benefits to come from this acquisition by 2008, after usual interim integration and restructuring costs are incurred in 2007. The outlook for RRD's ratings remains negative because of Moody's concerns over the continuing difficult conditions in the printing industry, as well as both acquisition risk and the potential for share buybacks. RRD has been acquisitive over the past several years and although Moody's has concluded that the proposed acquisition of Banta can be accommodated within the existing Baa2 rating, the risk remains that RRD will undertake one or more future acquisitions that will collectively cause a deterioration of expected 2008 credit metrics. As well, even though Moody's is currently assuming that RRD will dedicate all cash flow to debt reduction following the proposed acquisition, the company has nevertheless recently authorized a US$350 million share buyback program. The review of Banta's ratings will focus on the likelihood of the acquisition closing, the potential for RRD to refinance Banta's debt, and the impact on its standalone operating performance and credit metrics caused by its pending ownership by RRD. Rating actions: Issuer: Banta Corporation * Corporate Family Rating, Placed on Review for Possible Upgrade, currently Ba2 * Outlook, Changed To Rating Under Review From Stable RR Donnelley and Sons Co., the world's largest commercial printer with revenue of over US$9 billion, is headquartered in Chicago, Illinois. Banta Corp., a commercial printer with revenue of around US$1.5 billion, is headquartered in Menasha, Wisconsin. CAIRN CLO: S&P Assigns BB- Rating on EUR10.5-Mln Class E Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary credit ratings to the secured variable funding and floating-rate notes to be issued by Cairn CLO I B.V., a special purpose entity. The collateral comprises senior and mezzanine leveraged loans, high-yield bonds, and structured finance securities. The transaction has a six-year reinvestment period, and the investment manager will be Cairn Financial Products Ltd. This will be the first European CLO transaction managed by Cairn Financial Products. The class A-1 notes are variable funding notes (VFNs), and the noteholder will comply with Standard & Poor's criteria. At closing the issuer will enter into a VFN purchase agreement under which it will be entitled to draw on a VFN, at any time, up to an amount equal to a maximum of 10% of the capitalization. Amounts drawn under the VFN may be denominated in sterling or euros. Ratings List Cairn CLO I B.V. EUR333.46 Million and GBP11.45 Million Secured Variable Funding And Floating-Rate Notes Prelim. amount and Prelim. currency Class rating (Mil.) ----- ------ ---------- A1-VFN AAA EUR35 A2 AAA EUR169.75 A3 AAA GBP11.45 A4 AAA EUR11.7 B AA EUR30 C A EUR23 D BBB- EUR21.5 E BB- EUR10.5 M Subordinated NR EUR32.01 NR-Not rated. HARBOURMASTER CLO 4: Keeps BB Ratings on EUR10MM Class B2 Notes --------------------------------------------------------------- Fitch Ratings affirmed Harbourmaster CLO 4 B.V. notes following a satisfactory performance review: -- EUR337,000,000 Class A1 floating-rate notes (XS0203060339): AAA; -- EUR28,000,000 Class A2E floating-rate notes (XS0203060925): AAA; -- EUR40,000,000 Class A2F fixed-rate notes (XS0203061063): AAA; -- EUR32,000,000 Class A3 floating-rate notes (XS0203061493): AA; -- EUR16,000,000 Class A4 floating-rate notes (XS0203061659): A; -- EUR11,000,000 Class B1 floating-rate notes (XS0203061907): BBB; -- EUR4,000,000 Class B2E floating-rate notes (XS0203063945): BB; -- EUR6,000,000 Class B2F fixed-rate notes (XS0203062467): BB; -- EUR50,000,000 Class S1 combination notes: AAA; -- EUR6,000,000 Class S2 combination notes: BBB-; and -- EUR5,000,000 Class S3 combination notes: WD. Harbourmaster 4 is arbitrage cash CLO backed by a diversified portfolio of leveraged loans. The affirmation reflects the consistent credit quality of the portfolio, as well as the available credit enhancement in the structure to date. The transaction is in compliance with portfolio guidelines and satisfies Fitch's coverage tests. The credit quality is stable with a current weighted average rating factor of 25.1 compared to 25.2 when ramped-up, both WARFs being equivalent to a B+/B rating. Around 41% of the underlying assets are loans to B rated corporate entities. There have been no defaults since closing. The ratings of the Class A1 and A2 notes address ultimate repayment of principal at maturity and timely payment of interest when due. For all other Classes of notes, the ratings address ultimate payment of principal and interest, including deferred interest, at maturity. The ratings on the S1 and S3 combo notes address the ultimate payment of principal from funds received on their components, while for the S2 combo notes, the rating addresses the ultimate payment of principal and interest at a coupon rate of EURIBOR. Fitch has withdrawn the rating for Class S3 combination notes as the notes have been absorbed back into the original notes. Harbourmaster 4 is the fourth European CLO managed by Harbourmaster Capital Limited. The CDO Asset Manager is rated CAM2 based on strong credit underwriting and workout experience. The transaction constitutes a securitization of primarily senior secured loans and the underlying assets will be replenished in accordance to portfolio guidelines and various financial covenants with respect to obligor, industry and asset type concentration. The issuer can also enter into a sub-participation agreement with financial institutions rated A or above, subject to restrictions. The issuer, Harbourmaster 4, is a limited liability company incorporated under the laws of the Netherlands. HEXION SPECIALTY: Eliminates Certain Defaults on Notes ------------------------------------------------------ Hexion Specialty Chemicals Inc.'s wholly owned finance subsidiaries, Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, entered into a third supplemental indenture to the Indenture dated as of Aug. 12, 2004 and a supplemental indenture to the Indenture dated as of May 20, 2005. The third supplemental indenture dated as of Oct. 26, 2006, to the Indenture dated as of Aug. 12, 2004, by and among Hexion U.S. Finance Corp., Hexion Nova Scotia Finance, ULC, each of the guarantors party thereto, and Wilmington Trust Company, as Trustee, pursuant to which the Second-Priority Senior Secured Floating Rate Notes due 2010 and the 9% Second-Priority Senior Secured Notes due 2014 were issued. The supplemental indenture dated as of Oct. 26, 2006, to the Indenture dated as of May 20, 2005, by and among Hexion U.S. Finance Corp., Hexion Nova Scotia Finance, ULC, each of the guarantors party thereto, and Wilmington Trust Company, as Trustee, pursuant to which the Second-Priority Senior Secured Floating Rate Notes due 2010 were issued. The 2004 Notes Supplemental Indenture and 2005 Notes Supplemental Indenture were entered into in connection with the Company's tender offers and consent solicitations with respect to the 2004 Floating Rate Notes, the 9% Notes and the 2005 Floating Rate Notes, which were commenced Oct. 12, 2006. The Supplemental Indentures amend the terms governing the Notes to, among other things, eliminate most of the restrictive covenants and certain events of default, and delete all references to collateral in the 2004 Notes Indenture and the 2005 Notes Indenture. Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- makes thermosetting resins (or thermosets). Thermosets add a desired quality (heat resistance, gloss, adhesion) to a number of different paints and adhesives. Hexion also makes formaldehyde and other forest product resins, epoxy resins, and raw materials for coatings and inks. The company has 86 manufacturing and distribution facilities in 18 countries. The company's European headquarters is located at Rotterdam in The Netherlands. * * * As reported in TCR-Europe on Oct. 19, Moody's Investors Service assigned B3 ratings to the new guaranteed senior secured second lien notes due 2014 of Hexion Specialty Chemicals Inc. The company expects to issue roughly US$825 million of notes split (55/45) between fixed and floating rate notes. As reported in the Troubled Company Reporter on May 4, Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '3' to Hexion Specialty's US$1.675 billion senior secured term loan and synthetic letter of credit facilities. The rating on the existing US$225 million revolving credit facility was lowered to 'B+' with a recovery rating of '3', from 'BB-' with a recovery rating of '1', to reflect the similar security package as the new term loan and synthetic letter of credit facility. The ratings on the existing senior second secured notes were raised to 'B', with a recovery rating of '3', from 'B-' with a recovery rating of '5'. The ratings on the senior second secured notes reflect the amount of priority claims of the revolving facility and the first-lien term loan lenders. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Hexion and revised the outlook to stable from negative. HEXION SPECIALTY: Extends Tender Offer for Sr. Notes to Nov. 13 --------------------------------------------------------------- Hexion Specialty Chemicals Inc. has extended the expiration date of its cash tender offers, for any and all of the outstanding 9% Second-Priority Senior Secured Notes due 2014 and the Second- Priority Senior Secured Floating Rate Notes due 2010 issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, to 5:00 p.m., New York City time, on Nov. 13, 2006, unless further extended. In connection with the extension of the tender offers Hexion is changing the Price Determination Date for the 9% Notes which shall now be Oct. 30, 2006. As of Oct. 24, 2006, tenders and consents had been received with respect to 100% of the outstanding principal amounts of the Notes. The tender offers and consent solicitations are subject to the terms and conditions set forth in Hexion's Offer to Purchase and Consent Solicitation Statement dated Oct. 12, 2006, and the related Consent and Letter of Transmittal. Hexion has retained Credit Suisse Securities (USA) LLC to act as Dealer Manager in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to: Credit Suisse Securities (USA) LLC Tel: (800) 820-1653 (toll free) (212) 325-7596 (collect) Copies of the Offer Documents and other related documents may be obtained from the information agent for the tender offer and consent solicitation at: D.F. King & Co., Inc. Tel: (800) 290-6426 (toll free) (212) 269-5550 (collect) Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- makes thermosetting resins (or thermosets). Thermosets add a desired quality (heat resistance, gloss, adhesion) to a number of different paints and adhesives. Hexion also makes formaldehyde and other forest product resins, epoxy resins, and raw materials for coatings and inks. The company has 86 manufacturing and distribution facilities in 18 countries. The company's European headquarters is located at Rotterdam in The Netherlands. * * * As reported in TCR-Europe on Oct. 19, Moody's Investors Service assigned B3 ratings to the new guaranteed senior secured second lien notes due 2014 of Hexion Specialty Chemicals Inc. The company expects to issue roughly US$825 million of notes split (55/45) between fixed and floating rate notes. As reported in the Troubled Company Reporter on May 4, Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '3' to Hexion Specialty's US$1.675 billion senior secured term loan and synthetic letter of credit facilities. The rating on the existing US$225 million revolving credit facility was lowered to 'B+' with a recovery rating of '3', from 'BB-' with a recovery rating of '1', to reflect the similar security package as the new term loan and synthetic letter of credit facility. The ratings on the existing senior second secured notes were raised to 'B', with a recovery rating of '3', from 'B-' with a recovery rating of '5'. The ratings on the senior second secured notes reflect the amount of priority claims of the revolving facility and the first-lien term loan lenders. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Hexion and revised the outlook to stable from negative. HEXION SPECIALTY: Prices Tender Offer for 9% Senior Notes --------------------------------------------------------- Hexion Specialty Chemicals Inc. disclosed the consideration to be paid in its cash tender offer and consent solicitation for any and all of the outstanding 9% Second-Priority Senior Secured Notes due 2014, issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC. The tender offer and consent solicitation is subject to the terms and conditions set forth in Hexion's Offer to Purchase and Consent Solicitation Statement dated Oct. 12, 2006, and the related Consent and Letter of Transmittal. The total consideration for the 9% Notes which will be payable in respect of 9% Notes accepted for payment that were validly tendered with consents delivered and not withdrawn on or prior to 5:00 p.m., New York City time, on Oct. 24, 2006, will be US$1,133.84 per US$1,000 principal amount of 9% Notes. Hexion currently expects to accept for payment, subject to conditions set forth in the Offer Documents, all of the validly tendered 9% Notes on Nov. 3, 2006; accordingly, the total consideration for the 9% Notes was determined assuming payment on such date. In addition to the total consideration, which includes a consent payment of US$30 per US$1,000 principal amount of 9% Notes, Hexion will pay accrued and unpaid interest up to but not including the payment date for 9% Notes purchased in the Tender Offer. The tender offer by Hexion will expire at 5:00 p.m., New York City time, on Nov. 13, 2006, unless extended or earlier terminated by Hexion. In the event that the Expiration Date is extended, new pricing terms may be determined. Information regarding the pricing, tender and delivery procedures and conditions to the tender offer and consent solicitation relating to the 9% Notes is contained in the Offer Documents. Hexion's tender offer is subject to the conditions set forth in the Offer Documents including, among other things, Hexion obtaining the financing necessary to pay for the Notes and consents in accordance with the terms of the tender offer and consent solicitation. Hexion has retained Credit Suisse Securities (USA) LLC to act as Dealer Manager in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to: Credit Suisse Securities (USA) LLC Tel: (800) 820-1653 (toll free) (212) 325-7596 (collect) Copies of the Offer Documents and other related documents may be obtained from the information agent for the tender offer and consent solicitation at: D.F. King & Co., Inc. Tel: (800) 290-6426 (toll free) (212) 269-5550 (collect). Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- makes thermosetting resins (or thermosets). Thermosets add a desired quality (heat resistance, gloss, adhesion) to a number of different paints and adhesives. Hexion also makes formaldehyde and other forest product resins, epoxy resins, and raw materials for coatings and inks. The company has 86 manufacturing and distribution facilities in 18 countries. The company's European headquarters is located at Rotterdam in The Netherlands. * * * As reported in TCR-Europe on Oct. 19, Moody's Investors Service assigned B3 ratings to the new guaranteed senior secured second lien notes due 2014 of Hexion Specialty Chemicals Inc. The company expects to issue roughly US$825 million of notes split (55/45) between fixed and floating rate notes. As reported in the Troubled Company Reporter on May 4, Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '3' to Hexion Specialty's US$1.675 billion senior secured term loan and synthetic letter of credit facilities. The rating on the existing US$225 million revolving credit facility was lowered to 'B+' with a recovery rating of '3', from 'BB-' with a recovery rating of '1', to reflect the similar security package as the new term loan and synthetic letter of credit facility. The ratings on the existing senior second secured notes were raised to 'B', with a recovery rating of '3', from 'B-' with a recovery rating of '5'. The ratings on the senior second secured notes reflect the amount of priority claims of the revolving facility and the first-lien term loan lenders. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Hexion and revised the outlook to stable from negative. =========== P O L A N D =========== GETIN FINANCE: Fitch Rates US$150-Million Bond Issue at BB ---------------------------------------------------------- Fitch Ratings assigned Getin Finance Plc's US$150 million bond issue an expected BB rating. The bonds are issued under GF's EUR1 billion debt issuance program and are unconditionally and irrevocably guaranteed by Getin Bank SA. GB's ratings are affirmed at Issuer Default BB with Stable Outlook, Short-term B, Individual D and Support 5. The final rating of the bond is contingent on the receipt of final documents conforming to information already received. The bond issue will have a maturity of two years. Both the bonds and the guarantee of GB have senior status. The net proceeds of the issue will be used to fund GB. GF is a SPV created by GB for the purpose of the above-mentioned debt issuance program. GB is 99.3%-owned by Getin Holding, a privately owned integrated financial group quoted on the Warsaw Stock Exchange. At end-H106 the banks' total assets amounted to PLN8.6 billion (US$2.7 billion). Getin Bank's business model is based on targeting the rapidly growing Polish retail banking market and leveraging third-party distribution channels. =============== P O R T U G A L =============== WOLVERINE TUBE: Soliciting Consents to Exchange New Equity Notes ---------------------------------------------------------------- Wolverine Tube Inc. filed a Registration Statement on Form S-4 with the U.S. Securities and Exchange Commission for an exchange offer and consent solicitation to exchange newly issued equity and a new issue of secured notes for the Company's Senior Notes, subject to certain conditions, including a minimum tender condition and the SEC's declaring the Registration Statement effective. If the Company does proceed with the exchange offer but conditions to the exchange offer and consent solicitation are not satisfied, the Company intends to pursue other alternatives, including, if certain conditions are met, a prepackaged plan of reorganization of Wolverine and certain of its subsidiaries. The Registration Statement filed Wednesday therefore includes solicitation for a Prepackaged Plan under Chapter 11 of the Bankruptcy Code. As previously disclosed, the Company and its advisors have been evaluating refinancing and restructuring alternatives in anticipation of the upcoming maturities of the Company's Secured Revolving Credit Facility and Receivables Sale Facility in 2008 and its outstanding 7.375% Senior Notes and 10.5% Senior Notes in 2008 and 2009, as well as its future projected short-term liquidity needs. As part of that process, Wolverine continues to be engaged in discussions with representatives of its bondholders and other groups as to the most appropriate transaction, if any, to reduce debt and maintain value for its shareholders. If pursued, the Prepackaged Plan would generally provide substantially the same consideration to the holders of the Senior Notes as would the consummation of the exchange offer and consent solicitation. Further, under the contemplated Prepackaged Plan, all administrative claims, priority claims, secured claims and general unsecured claims (other than with respect to the Senior Notes), including trade claims, would be paid in full, and holders of existing common stock would receive a pro rata share of a percentage of the new common stock in certain circumstances. No assurance can be given that either an exchange offer and consent solicitation or a consensual plan will be pursued and agreed upon. Chip Manning, Wolverine's President and Chief Executive Officer stated, "[Wednes]day's filing is another step in the Company's efforts to improve its overall financial health. It is important to note that we are still continuing to explore a range of alternatives, and no decision has been made on which course of action the Company will ultimately take." Manning added, "We continue to believe that liquidity is sufficient to sustain our operations in the near- to mid-term. The Company's restructuring process should have no impact on our day-to-day operations and our customers and vendors can continue to rely on the same high quality service and relationships with Wolverine that they have come to expect." Wolverine Tube, Inc. is a world-class quality partner, providing its customers with copper and copper alloy tube, fabricated products and metal joining products. About the Company Headquartered in Hunstville, Alabama, Wolverine Tube, Inc. -- http://www.wlv.com/-- provides customers with copper and copper alloy tube, fabricated products, brazing alloys, fluxes and lead-free solder, as well as copper and copper alloy rod, bar and other products. The company has manufacturing facilities in Ontario, Mexico, Portugal and China. It maintains sales and marketing offices in the United Kingdom and The Netherlands. * * * In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector in September 2006, the rating agency confirmed the Caa1 Corporate Family Rating for Wolverine Tube Inc., as well as the Caa2 ratings on the company's 7.375% Senior Unsecured Notes due 2008 and the 10.5% Senior Unsecured Notes due 2009. Those debentures were assigned an LGD4 rating suggesting noteholders will experience a 61% loss in the event of default. WOLVERINE TUBE: Moody's Lowers Ratings on Restructuring Program --------------------------------------------------------------- Moody's downgraded the ratings of Wolverine Tube, Inc.'s senior unsecured notes to Caa3 from Caa2 and its corporate family rating to Caa2 from Caa1. The outlook for the company remains negative. This action was prompted by Wolverine's announcement of a restructuring and reorganization program that will involve a debt for equity exchange to the company's current noteholders. If the company does not receive enough support for this offer, Wolverine intends to pursue a prepackaged bankruptcy plan. The downgrade reflects Moody's opinion concerning the impact of the restructuring program on noteholders' ultimate recovery as well as the overall financial strength of Wolverine. Industry competitive dynamics, volatility of raw material prices, and Wolverine's liquidity were also considered in the assessment of the company's ratings and rating outlook. Ratings downgraded: * Corporate Family Rating, to Caa2 from Caa1 * Gtd. Sr. Unsec. 7.375% notes, US$135 million due 2008, to Caa3 from Caa2 (LGD4 -- 62%) * Gtd. Sr. Unsec. 10.5% notes, US$99 million due 2009, to Caa3 from Caa2 (LGD4 -- 62%) Moody's previous rating action on Wolverine was the April 27 downgrade of its long-term debt ratings to Caa2 from Caa1 and its corporate family rating to Caa1 from B3. Wolverine is a North American manufacturer and distributor of copper and copper alloy tube, fabricated products and metal joining products, headquartered in Huntsville, Alabama. Wolverine generated US$1.1 billion in revenues and a net loss of US$45.3 million, for the nine months ended Oct. 1, 2006 as compared to revenues of US$636 million and a net loss of US$19.4 million realized in the same period earlier. WOLVERINE TUBE: Proposed Exchange Offer Spurs S&P to Cut Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Huntsville, Ala.-based Wolverine Tube Inc., to 'CC' from 'CCC+', following Wolverine's exchange offer and solicitation of consent filed [Wednes]day with the SEC. The ratings on the company's senior unsecured notes were also lowered to 'C' from 'CCC'. "The lower ratings on the notes reflect the distressed nature of the proposed exchange and our belief that the value of the exchange offer, if completed, is not equivalent to the value of the original contracted amounts," said Standard & Poor's credit analyst Lisa Tilis. At the same time, Standard & Poor's placed all of the ratings on CreditWatch with negative implications pending the outcome of the proposed restructuring, which could involve a Chapter 11 bankruptcy filing. Wolverine proposes to offer a combination of newly issued common stock and convertible preferred stock and new secured notes to current holders of its US$135 million 7.375% senior notes due August 2008 and US$99 million 10.5% senior notes due April 2009. The exchange offer and consent solicitation is subject to certain conditions, including a minimum tender condition. The exchange offer and consent solicitation is intended to reduce debt and position Wolverine to continue its operational restructuring efforts. Also, if the requirements of the exchange offer are not met, the company is simultaneously soliciting acceptances of a prepackaged plan of reorganization under Chapter 11. The proposed terms for noteholders under the prepackaged plan are substantially the same as under the exchange offer and consent solicitation. Wolverine is also continuing to explore other alternative refinancing and restructuring options. Standard & Poor's believes that it is unlikely that the company will be able to secure such financing in the absence of waivers for its current indentures because of its very high debt leverage and weak operating results. If the distressed exchange is completed, the corporate credit rating will be lowered to 'SD', or selective default, and the ratings on the exchanged notes will be lowered to 'D'. Also, if any interest payments are missed while the company is preparing to effect the exchange or considering its financing options, the relevant issue rating would be lowered to 'D', with no likely impact on the corporate credit rating. Alternatively, if the prepackaged plan of bankruptcy is filed, all ratings will be lowered to 'D'. =========== R U S S I A =========== BEREZNIKOVSKIY FACTORY: Court Names S. Volkov to Manage Assets -------------------------------------------------------------- The Arbitration Court of Perm Region appointed Mr. S. Volkov as Insolvency Manager for LLC Bereznikovskiy Factory of Reinforced Concrete Construction. He can be reached at: S. Volkov Post User Box 6952 614068 Perm Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A 50-5112/2006-B. The Arbitration Court of Perm Region is located at: Lunacharskogo Str. 3 Perm Region Russia The Debtor can be reached at: LLC Bereznikovskiy Factory Of Reinforced Concrete Construction Lenina Pr. 82 Berezniki 618400 Perm Region Russia BUSINESS PARTNER: Court Starts Bankruptcy Supervision Procedure --------------------------------------------------------------- The Arbitration Court of Udmurtiya Republic commenced bankruptcy supervision procedure on LLC Financial Company Business Partner. The case is docketed under Case No. A71-006563/2006-G2. The Temporary Insolvency Manager is: S. Olin Karla Libknekhta 65 Izhevsk 426063 Udmurtiya Republic Russia The Arbitration Court of Udmurtiya Republic is located at: Lomonosova Str. 5 Izhevsk 426004 Udmurtiya Republic Russia The Debtor can be reached at: LLC Financial Company Business Partner Svobody Str. 202 Izhevsk 426057 Udmurtiya Republic Russia COAL 95: Primorye Court Names S. Pisarets as Insolvency Manager --------------------------------------------------------------- The Arbitration Court of Primorye Region appointed Mr. S. Pisarets as Insolvency Manager for CJSC Coal 95. He can be reached at: S. Pisarets Svetlanovskaya Str. 145-1 Vladivostok Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A51-6868/2000 15-64b. The Debtor can be reached at: CJSC Coal 95 Novoshakhtinskij Mikhaylovskiy Region Primorye Region Russia ERMAKOVSKIY WOODWORKING: Court Names I. Gorn to Manage Assets ------------------------------------------------------------- The Arbitration Court of Krasnoyarsk Region appointed Mr. I. Gorn as Insolvency Manager for OJSC Ermakovskiy Woodworking Combine. He can be reached at: I. Gorn Post User Box 2513 634045 Tomsk Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A33-11623/2006. The Debtor can be reached at: OJSC Ermakovskiy Woodworking Combine Promyshlennaya Str. 4 Ermakovskoye Ermakovskiy Region 663820 Krasnoyarsk Region Russia ILISHEVSKIY ELEVATOR: Court Names Z. Kamalova to Manage Assets -------------------------------------------------------------- The Arbitration Court of Bashkortostan Republic appointed Ms. Z. Kamalova as Insolvency Manager for Municipal Unitary Enterprise Ilishevskiy Elevator. She can be reached at: Z. Kamalova Post User Box of Ms. Z. Kamalova Central Post Office Centre Ufa 450000 Bashkortostan Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A-07-40456/04-G-ADM. The Arbitration Court of Bashkortostan Republic is located at: Oktyabrskoy Revolyutsii Str. 63a Ufa Bashkortostan Republic Russia The Debtor can be reached at: Z. Kamalova Post User Box of Ms. Z. Kamalova Central Post Office Centre Ufa 450000 Bashkortostan Republic Russia KHABAROVSKIY FACTORY: Court Starts Reorganization Process --------------------------------------------------------- The Arbitration Court of Khabarovsk Region commenced external management bankruptcy procedure on OJSC Khabarovskiy Factory of Heating Equipment. The case is docketed under Case No. A 73-17766/2005. The External Insolvency Manager is: T. Semenova Post User Box 4227 GOS-13 680013 Khabarovsk Region Russia The Debtor can be reached at: OJSC Khabarovskiy Factory of Heating Equipment Sivorova Str. 73 680015 Khabarovsk Region Russia LADA LLC: Primorye Court Names A. Sotnikov as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Primorye Region appointed Mr. A. Sotnikov as Insolvency Manager for LLC Furniture Factory Lada. He can be reached at: A. Sotnikov Abrekskaya Str. 5 690001 Vladivostok Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A51-6534/06 26-143. The Debtor can be reached at: LLC Furniture Factory Lada Tatarkaya Str. 11 690000 Vladivostok Region Russia LUKOIL OIL: Earns RUR51 Billion for January-September 2006 ---------------------------------------------------------- OAO Lukoil released its financial results for the first nine months of 2006, prepared according to Russian Accounting Standards. For the January-September 2006, Lukoil's net profit dipped 26.8% year-on-year, to RUR51.09 billion. For the third quarter of 2006, the company's net profit slid 42.5% quarter-on-quarter, to RUR7.9 billion. Lukoil blamed lower revenues from its units for the slide in net profit. About Lukoil Headquartered in Moscow, Russia, OAO Lukoil (LSE: LKOD; MICEX, RTS: LKOH) -- http://www.lukoil.com/-- explores and produces oil & gas, petroleum products and petrochemicals, and markets the outputs. Most of the Company's exploration and production activity is located in Russia, and its main resource base is in Western Siberia. * * * As reported in the TCR-Europe on July 12, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Lukoil OAO to 'BB+' from 'BB'. S&P said the outlook is positive. As reported in the TCR-Europe on Jan. 26, Moody's Investors Service has changed the outlook of OAO Lukoil's Ba1 Corporate Family Rating and Ba2 Issuer Rating to positive from stable. Moody's last rating action on LUKOIL was on April 26, when the agency upgraded the company's ratings from Ba2/Ba3 to Ba1/Ba2. LUKOIL OAO: Inks Cooperation Agreement with Rostekhnadzor --------------------------------------------------------- Vagit Alekperov, President of OAO Lukoil, and Konstantin Pulikovsky, Head of the Federal Service on Environmental, Technological and Nuclear Supervision, signed a cooperation agreement between the company and Rostekhnadzor. The aim of the agreement is to facilitate cooperation of the parties in the field of enhanced industrial and environmental safety in OAO Lukoil. The parties agreed to cooperate on: -- improve industrial safety supervision systems within the Lukoil Group, develop integrated industrial safety, labor protection and environmental protection supervision systems; -- participate in improvement of regulations for industrial safety and environmental protection; -- develop and introduce effective forms and techniques of state supervision over safe operation of hazardous production facilities, including development and implementation of integrated industrial safety, labor protection and environmental protection supervision systems within the Lukoil Group; -- ensure efficient cooperation of Rostekhnadzor and its territorial bodies with the Lukoil Group organizations, aimed at a higher quality of preliminary design and project documentation for construction, reconstruction, re-equipment, conservation and liquidation of hazardous production facilities, reduced time of design data consideration, including unlimited application of modern information technologies; -- develop proposals and recommendations for mid- and long- term planning of the LUKOIL Group organizations in the field of industrial and environmental safety, and conservation of mineral resources. The Parties are to set up a working group to implement provisions of the Agreement. The Agreement is valid for three years after it is signed. About Lukoil Headquartered in Moscow, Russia, OAO Lukoil (LSE: LKOD; MICEX, RTS: LKOH) -- http://www.lukoil.com/-- explores and produces oil & gas, petroleum products and petrochemicals, and markets the outputs. Most of the Company's exploration and production activity is located in Russia, and its main resource base is in Western Siberia. * * * As reported in the TCR-Europe on July 12, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Lukoil OAO to 'BB+' from 'BB'. S&P said the outlook is positive. As reported in the TCR-Europe on Jan. 26, Moody's Investors Service has changed the outlook of OAO Lukoil's Ba1 Corporate Family Rating and Ba2 Issuer Rating to positive from stable. Moody's last rating action on LUKOIL was on April 26, when the agency upgraded the company's ratings from Ba2/Ba3 to Ba1/Ba2. MARSHAL: Tatarstan Court Names V. Shevelev as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Tatarstan Republic appointed Mr. V. Shevelev as Insolvency Manager for CJSC Automobile Company Marshal. He can be reached at: V. Shevelev Post User Box 75 Kazan 420021 Tatarstan Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A65-8440/2006-SG4-27. The Arbitration Court of Tatarstan Republic is located at: Room 12 Floor 2 Entrance 2 Building 1 Kremlin Kazan Tatarstan Republic Russia The Debtor can be reached at: CJSC Automobile Company Marshal Polkovaya Str. 4 Vysokaya Gora Vysokogorskiy Region 422700 Tatarstan Republic Russia MIYAKINSKIY MANUFACTURING: Names T. Nikolaeva to Manage Assets -------------------------------------------------------------- The Arbitration Court of Bashkortostan Republic appointed Ms. T. Nikolaeva as Insolvency Manager for OJSC Miyakinskiy Manufacturing Combine (TIN 0238002371). She can be reached at: T. Nikolaeva Gvardeyskaya Str. 37 Ufa 450069 Bashkortostan Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A07-56455/05-G-RKhM. The Arbitration Court of Bashkortostan Republic is located at: Oktyabrskoy Revolyutsii Str. 63a Ufa Bashkortostan Republic Russia The Debtor can be reached at: OJSC Miyakinskiy Manufacturing Combine Shosseynaya Str. 3 Kirziz-Miyaki Miyakinskiy Region 452080 Bashkortostan Republic Russia NIZHNEKAMSKNEFTEKHIM OAO: Fitch Keeps B+ Issuer Default Rating -------------------------------------------------------------- Fitch Ratings affirmed Russia-based petrochemicals producer OAO Nizhnekamskneftekhim's ratings at Issuer Default B+, senior unsecured B+, and Short-term B. The National Long-term rating is affirmed at A. The Outlooks on the Issuer Default and National ratings are Stable. The ratings continue to reflect NKNK's position as the largest petrochemicals producer in Russia, leadership in select products, balanced geographic revenue diversification and adequate profitability. The company also benefits from being included in the Republic of Tatarstan's strategic development program of the oil, gas and petrochemicals industry. Fitch notes that in March 2006 Tatarstan's government entrusted its shareholding in NKNK along with treasury shares to TAIF for five years. TAIF now has 80% of NKNK. However, the government continues to have a golden share, which gives it veto rights on certain decisions taken at the shareholder meeting and by the board of directors. TAIF is a major investment company in Tatarstan with holdings in more than 50 companies. In FY05 TAIF achieved a profit of around RUR12.7 billion and the number of employees in TAIF- controlled companies exceeds 40,000. NKNK is carrying out a sizeable capital expenditure program totaling US$724 million on 12 projects over the period of 2006- 2010, thereby putting considerable pressure on free cash flow generation. Moreover, the size of some of these projects implies significant execution risk. Nonetheless, this should allow NKNK to further improve integration, increase scale and facilitate the launch of higher value-added products. The Stable Outlook reflects Fitch's expectation that the progressive shift in favor of higher value- added products will support stable cash flow generation and a balanced capital structure over the medium term. NKNK's H106 results prepared according to Russian accounting standards showed revenues increase 8.7% year on year to RUR23 billion, as prices were increased to compensate for higher raw material costs. Profit before tax rose 19.4% year on year to RUR2.5 billion. In FY05, revenues increased 24.5% to RUR48.1 billion, due mostly to price increases in the company's main product range. However, price increases were not sufficient to offset an anticipated drop in EBITDAR margin to 12.2% in FY05 from 15.2% in FY04 due to lower margins for the export commodity chemicals. Nonetheless, NKNK's wide range of products has allowed it to maintain a reasonably stable gross margin of around 26% in the past three years. Following the US$200 million eurobond issue in December 2005, NKNK's capital structure has changed, with total adjusted debt accounting for around 43% of total adjusted capitalization. Major credit metrics at FYE05 were adequate for the rating level, with adjusted net debt/operating EBITDAR at 1.9x. Fitch anticipates the company to start de-leveraging from 2007 onwards. Coverage ratios have deteriorated with funds from operations/gross interest decreasing to 4.1x in 2005 from 7.1x in 2004. NKNK has indicated that it does not plan any significant new borrowing in 2006-2007. PRESS-PRINT: Moscow Bankruptcy Hearing Slated for December 25 ------------------------------------------------------------- The Arbitration Court of Moscow Region will convene on Dec. 25 to hear the bankruptcy supervision procedure on OJSC Press-Print (TIN 5045029426). The case is docketed under Case No. A41-K2-12750/06. The Temporary Insolvency Manager is: L. Ponomareva Post User Box 600 603000 N. Novgorod Region Russia The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: OJSC Press-Print Stupino 142800 Moscow Region Russia RUSSIA OJSC: Court Starts Bankruptcy Supervision Procedure ---------------------------------------------------------- The Arbitration Court of Khakasiya Republic commenced bankruptcy supervision procedure on OJSC Breeding Factory Russia. The case is docketed under Case No. A74-3379/2006. The Temporary Insolvency Manager is: I. Domolego Sogrinskaya Str. 45 Abakan 655007 Khakasiya Republic Russia The Debtor can be reached at: OJSC Breeding Factory Russia Mira Str. 17 Novorossiyskoye 655665 Khakasiya Republic Russia SEVERSTAL OAO: Names Alexei Mordashov as General Director --------------------------------------------------------- The Board of Directors of OAO Severstal has appointed Alexei Mordashov as general director effective Dec. 16, 2006, RIA Novosti says. Mr. Mordashov currently serves as Chairman of Severstal's Board of Directors and general director of parent company Severstal Shareholder Group. He also holds a 90% stake in Severstal through his family-owned companies, Frontdeal Limited. Mr. Mordashov is offering 15% of the company's shares from his stake, effectively cutting his holdings from 90% to 75%. The company commenced its road show for the listing on Oct. 30. Severstal has acquired the service of Citigroup Inc., UBS AG and Deutsche Bank AG as joint coordinators and bookrunner for the London listing. About Severstal Headquartered in Cherepovets, Russia, OAO Severstal -- http://www.severstal.com/-- is the country's largest steel producer, with steel production of 17.1 million tons in 2005. The Company owns Severstal North America, the fifth largest integrated steel maker in the U.S. with 2005 production of 2.7 million tons, and Lucchini, Italy's second largest steel group with 2005 production of 3.5 million tons. Severstal is one of the world's lowest cost and most profitable steel producers, with 2005 EBITDA per ton of around EUR150 per ton. As of Dec. 31, 2005, Severstal had US$10.75 billion in total assets, US$3.66 billion in total liabilities and US$7.09 billion in total shareholders' equity. * * * As reported in the TCR-Europe on July 5, Standard & Poor's Ratings Services kept its 'B+' long-term corporate credit rating on Russian steelmaker OAO Severstal on CreditWatch with positive implications following the consolidation of the company's mining assets. The rating was placed on CreditWatch on May 26, following the announcement of a previously agreed merger between Severstal and Luxembourg-based steelmaker Arcelor S.A. This merger was cancelled on June 30. As reported in the TCR-Europe on June 28, Fitch Ratings maintained the Rating Watch Positive status for OAO Severstal's ratings of Issuer Default BB-, senior unsecured BB-, Short-term B and National Long-term A+. SITRONICS JSC: Earns US$33.11 Million for First Half 2006 --------------------------------------------------------- JSC Sitronics released its financial results for the first six months of 2006, prepared according to U.S. Generally Accepted Accounting Principles. For the first six months of 2006, Sitronics posted US$33.11 million in net profit, 26.9% lower than the same period in 2005. The company also posted US$699.44 million in revenues for the January-June period, 65.68% higher than the same interval in 2005. The company's operating profit went down 36.77% to US$62.8 billion and operating income before depreciation and amortization fell 18.5% to US$85.3 million. About Sitronics Headquartered in Moscow, Russia, JSC Sitronics -- http://www.sitronics.com/-- provides telecommunications solutions, IT solutions and microelectronic solutions in the CIS region with a rapidly growing presence in other EEMEA markets. Sistema controls the company. The company also operates in Russia, CIS countries, Eastern Europe, Middle East, Africa and North America. * * * As reported in the Troubled Company Reporter-Europe on Feb. 20, Moody's Investors Service assigned a provisional (P)B3 corporate family rating to the Joint Stock Company Sitronics. Concurrently, Moody's assigned a provisional (P)B3 rating to the proposed notes of up to US$200 million to be issued by Sitronics Finance S.A. Moody's said the outlook on the ratings is stable. On Feb. 16, TCR-Europe reported that Fitch Ratings gave Concern Sitronics JSC a Long-term IDR rating of B- with a Stable Outlook and an expected rating of B- to Sitronics' guaranteed up to US$200 million bond with a maturity of three years. The assignment of the final bond rating is contingent on receipt of final documents conforming to information already received. The ratings take into account that Sitronics is Russia and the CIS region's largest technology group, and its small scale on a global perspective. Sitronics benefits from support of Sistema Joint Stock Financial Corp, its dominant shareholder. Although it does not guarantee Sitronics' obligations, Sitronics is its second largest subsidiary and its default would trigger a cross- default of Sistema's bonds. The Stable Outlook reflects an expectation that although Sitronics' businesses will continue to grow at strong rates, the company is likely to remain a niche player and will not be able to materially improve its competitive position vis-a-vis its larger rivals. SPASSKIY MEAT: Court Names A. Khayrutdinov to Manage Assets ----------------------------------------------------------- The Arbitration Court of Tatarstan Republic appointed Mr. A. Khayrutdinov as Insolvency Manager for OJSC Spasskiy Meat Combine (TIN 1637000339). He can be reached at: A. Khayrutdinov Post User Box 70 Kazan 420111 Tatarstan Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A65-12985/2006-SG4-16. The Arbitration Court of Tatarstan Republic is located at: Room 12 Floor 2 Entrance 2 Building 1 Kremlin Kazan Tatarstan Republic Russia The Debtor can be reached at: A. Khayrutdinov Post User Box 70 Kazan 420111 Tatarstan Republic Russia SOLNECHNAYA POLYANA: Bankruptcy Hearing Slated for February 7 ------------------------------------------------------------- The Arbitration Court of Krasnodar Region will convene at 2:15 p.m. on Feb. 7, 2007, to hear the bankruptcy supervision procedure on Federal State Unitary Enterprise Sanatorium Solnechnaya Polyana (TIN 2325008172). The case is docketed under Case No. A32-18262/2006-2/1243-B. The Temporary Insolvency Manager is: K. Kovalenko Yufimtseva Str. 14 Rostov-na-Donu Russia The Arbitration Court of Krasnodar Region is located at: Krasnaya Str. 6 Krasnodar Region Russia The Debtor can be reached at: Federal State Unitary Enterprise Sanatorium Solnechnaya Polyana Apsheronsk Krasnodar Region Russia STEEL-CONSTRUCTION: Court Names I. Bashmakova to Manage Assets -------------------------------------------------------------- The Arbitration Court of Sakhalin Region appointed Ms. I. Bashmakova as Insolvency Manager for LLC Steel-Construction. She can be reached at: I. Bashmakova Dzerzhinskogo Str. 28 680000 Khabarovsk Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A59-3135/06-S9. The Debtor can be reached at: LLC Steel-Construction Kryukova Str. 168A Yuzhno-Sakhalinsk Russia TROLLEYBUS FACTORY: Asset Sale Slated for on November 9 ------------------------------------------------------- LLC Consult Service, the bidding organizer for OJSC Trolleybus Factory, opened a public auction for the company's properties at 3:40 p.m. on Nov. 9 at: OJSC Trolleybus Factory Assembly Hall 2nd Floor Administrative Building Engels 413105 Saratov Region Russia The Starting Price for the auctioned assets is RUR28,633,800. To participate, bidders have until 3:30 p.m. on Nov. 9 to deposit an amount equivalent to five percent of the starting price to: LLC Consult Service Settlement Account 40702810200000003808 OJSC NVKbank Saratov Region TIN/KPP 6452090339/645201001 Correspondent Account 3010181010000000751 BIK 046311751 Bidding documents must be submitted to: Room 38 2nd Floor Administrative Building OJSC Trolleybus Factory Engels 413105 Saratov Region Russia The Debtor can be reached at: OJSC Trolleybus Factory Engels 413105 Saratov Region Russia ========= S P A I N ========= BLYTH INC: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. consumer products sector, the rating agency confirmed its Ba3 Corporate Family Rating for Blyth, Inc. Additionally, Moody's held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$125M senior unsecured bonds due 2009 Ba3 Ba3 LGD4 55% US$100M senior unsecured bonds due 2013 Ba3 Ba3 LGD4 55% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Greenwich, Connecticut, Blyth Inc. designs, manufactures and markets a line of candles and home fragrance products, tabletop heating products, candle accessories and home decor and giftware products. The company has operations in Italy, Spain, Hong Kong, China, and Australia. =========== S W E D E N =========== ARMSTRONG WORLD: Requests for Payment Deadline Set for Nov. 16 -------------------------------------------------------------- Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, reminds the U.S. Bankruptcy Court for the District of Delaware that on Oct. 2, 2006, Armstrong World Industries Inc.'s Fourth Amended Plan of Reorganization became effective. As of the Effective Date, the Plan discharges the Debtor and its estate, assets, properties and interests in property, as provided in Section 1141 of the Bankruptcy Code and the Confirmation Order. The Plan also binds the Debtor and all creditors and parties-in- interest; revests property of the Debtor's estate in Reorganized AWI free and clear of all Claims, Equity Interests, Encumbrances and other interests unless otherwise stated; voids any judgment against the Debtor; and operates as an injunction with respect to any debt discharged. The Asbestos PI Channeling Injunction and the Claims Trading Injunction are in full force and effect, Mr. Madron states. All entities seeking payment for services rendered or reimbursement of expenses incurred through and including the Effective Date under Section 330, or allowance of Administrative Expenses arising under Sections 503(b)(2), 503(b)(3), 503(b)(4), or 503(b)(5) must file a request by Nov. 16, 2006. Any distribution under the Plan that is unclaimed after 180 days following the distribution date will be deemed not to have been made and will be transferred to Reorganized AWI, free and clear of any claims or interests of any entities, including any claims or interests of any governmental unit under escheat principles. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world including Belgium and Sweden. The Company and its debtor-affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The Debtors tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. When the Debtors filed for protection from their creditors, they listed US$4,032,200,000 in total assets and US$3,296,900,000 in liabilities. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. AWI emerged from Chapter 11 protection on Oct. 2, 2006. (Armstrong Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service,Inc., http://bankrupt.com/newsstand/or 215/945-7000). ARMSTRONG WORLD: Sept. 30 Balance Sheet Upside-Down by US$1.2BB --------------------------------------------------------------- Armstrong World Industries Inc. reported third quarter 2006 net sales of US$973.6 million that were 4% higher than third quarter net sales of US$937.0 million in 2005, including a US$13 million favorable impact from foreign exchange rates. Reported operating income for the quarter increased to US$67.4 million from US$66.5 million in the third quarter of 2005. Adjusted operating income for the quarter of US$82.5million increased 27% compared with adjusted operating income of US$65.2 million in the prior year quarter. At Sept. 30, 2006, Armstrong World's balance sheet reflected a stockholder's deficit of US$1,189,500,000. Adjusted numbers exclude spending on restructuring charges and related costs, impacts from legal settlements, environmental charges, foreign exchange and certain other gains and losses to allow meaningful comparisons of operating performance. The year-over-year growth in third quarter 2006 adjusted operating income benefited from price increases in excess of manufacturing cost inflation, improved product mix in European businesses, improved direct manufacturing costs in all businesses, and lower manufacturing period expense in our floor businesses. Increased earnings in our WAVE joint venture also contributed to the growth. Notably, the growth was achieved despite significant volume declines in North American resilient business where vinyl declines offset laminate growth. Resilient Flooring net sales were US$304.8 million in the third quarter of 2006 and US$311.5 million in the same period of 2005. Excluding the favorable impact of foreign exchange rates, net sales decreased 4%. The decline was primarily due to decreased volume for vinyl products in North America. A reported operating loss of US$2.9 million in the quarter compared with reported income in the third quarter of 2005 of US$7.7 million. Adjusted operating income of US$4.5 million compared with US$5.9 million on the same basis in the prior year period. The decline is primarily attributable to lower sales. The benefits of increased manufacturing efficiency were greater than the impact of cost inflation in the period. Wood Flooring net sales of US$217.2 million in the current quarter declined 1% from US$220.2 million in the prior year as weakness in the U.S. housing markets drove volume declines in both engineered and solid wood floors. Reported operating income of US$16.5 million in the quarter was below the US$25.7 million reported in the third quarter of 2005. The reduction in operating income was due to the sales volume decline combined with higher lumber prices and increased promotional spending. Production costs improved during the period. Textiles and Sports Flooring net sales in the third quarter of 2006 increased to US$86.3 million from US$79.7 million. Excluding the effects of favorable foreign exchange rates of US$3.9 million, sales grew 3% primarily on higher volume in carpet tiles and better price realization in broadloom carpet. Reported operating income of US$4.2 million in 2006 increased from US$3.2 million in 2005 on the growth in sales. Building Products net sales of US$304.5 million in the current quarter increased from US$268.2 million in the prior year. Excluding the effects of favorable foreign exchange rates of US$5.0 million, sales increased by 12%, primarily due to price increases made to offset inflationary pressures, and improved product mix in both the U.S. and European markets. Volume increased in North America and the Pacific Rim. Reported operating income increased to US$59.7 million from operating income of US$43.1 million in the third quarter of 2005. The growth was driven by improved price realization, better product mix and increased equity earnings in WAVE. Cabinets net sales in the third quarter of 2006 of US$60.8 million increased 6% from US$57.4 million in 2005 on higher selling prices and improved product mix. Volume decreased slightly. Reported operating income for the third quarter of US$3.8 million improved from the prior year's US$0.3 million operating loss, primarily driven by the sales growth, and lower SG&A spending. Year-to-Date Results For the nine-month period ended Sept. 30, 2006, net sales were US$2,795.7 million compared with US$2,696.7 million reported for the first nine months of 2005. Excluding the US$10.4 million impact from unfavorable foreign exchange rates, net sales increased by 4%. The sales growth was due to improved price and product mix on flat volume, and all segments grew sales except Resilient Flooring. Operating income in the first nine months of 2006 was US$188.1 million compared with operating income of US$110.2 million for the same period in 2005. Adjusted operating income of US$209.9 million increased 59% compared with adjusted operating income of US$131.9 million in the prior year period. The improvement in operating income was primarily due to higher sales, improved manufacturing productivity and reduced SG&A expenses. Outlook For the fourth quarter of 2006, commercial markets are expected to remain strong, while the decline in the U.S. housing market will continue to reduce volumes in our residential businesses. On a consolidated basis, improved prices are anticipated to continue to offset cost inflation, and reductions in direct manufacturing costs will be sustained. Due to fresh start reporting adjustments associated with our Oct. 2, 2006, emergence from Chapter 11, reported fourth quarter operating income would not be comparable to prior periods. The following outlook table includes adjusted operating income on a pre-fresh start reporting basis to facilitate comparison to 2005 fourth quarter adjusted operating income. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The company has operation in Colombia, Costa Rica, Greece Iceland and Asia among others. The Company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The Company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The Company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. (Armstrong Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Oct. 9, 2006 Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the Company's emergence from bankruptcy on Oct. 2, 2006. S&P said the outlook is stable. STENA AB: Improved Financial Profile Cues S&P to Revise Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Sweden-based conglomerate Stena AB to stable from negative, reflecting the group's improved financial profile and solid operating performance. At the same time, Standard & Poor's affirmed its 'BB+' long-term corporate credit rating and 'BB-' senior unsecured debt rating on Stena. "The outlook revision reflects the gradual restoration of the group's financial profile, which, combined with Stena's solid operating performance, should improve the group's credit measures back to within expectations for the ratings," said Standard & Poor's credit analyst Andreas Kindahl. The ratings on Stena continue to reflect the group's aggressive financial profile and investment policies, as well as its exposure to industries regarded as having worse than average risk characteristics due to significant volatility and high capital intensity. These factors are balanced by the group's experienced management team and diversified business portfolio. In addition, the relatively low risk in Stena's real estate division, solid financial flexibility provided by a substantial amount of liquid assets, and reputation as a quality operator in its shipping-related segments are supporting rating factors. Standard & Poor's expects Stena's cash flow protection measures will remain satisfactory for the rating category, because the group's operating performance should remain relatively stable due to its diversification and the contractual nature of parts of its businesses (especially real estate). Standard & Poor's also expects Stena to remain committed to a disciplined growth strategy, under which any major investments are expected to be financed in such a way that the group's financial profile would not materially weaken from expected levels. Ratings upside is limited due to Stena's aggressive investment strategies and financial policies, which are unlikely to change. Downside risk is largely connected to investment and market risk, especially if individual or several large investments are unsuccessful in conjunction with shipping and drilling market recession. ============= U K R A I N E ============= ALFA BANK: Moody's Assigns B1 Rating on Series B and C Bonds ------------------------------------------------------------ Moody's Investors Service Inc. assigned a B1 global local currency long-term senior unsecured debt rating as well as an Aa2.ua long-term National Scale Rating to the Series "B" and "C" of local currency- (hryvnia) denominated bonds issued by Alfa Bank Ukraine, which represent a senior unsecured claim on the bank. A Not-Prime short-term global local currency rating has also been assigned to Series "B" given the embedded put option, which could be exercised quarterly by the bondholders throughout the issue's life. The issue size is UAH25 million for Series "B" and UAH50 million for Series "C". The outlook for the global ratings is stable, while the NSR carries no specific outlook. According to Moody's, the B1 global scale local currency rating reflects the global default and loss expectation and is not constrained by any foreign currency transfer risk, while the Aa2.ua NSR reflects the standing of the bank's credit quality relative to its domestic peers. Moody's B1 and Not-Prime ratings for the bonds are based on ABU's fundamental credit quality and factors in the bank's ability to fulfill both its long-term and short-term obligations. The latter obligations include those associated with the put option that the bondholders will, according to the terms of the issue, be able to exercise in order to sell the bonds back to the bank quarterly of the Series "B" and on the first, second, third and fourth anniversaries of the Series "C" issues. Moody's notes that, if the bank's credit quality were to deteriorate on these dates, the exercise of the put options might exert additional pressure on its financial condition. Headquartered in Kiev, Ukraine, ABU reported unaudited total IFRS assets of US$641.8 million as at Aug. 31, 2006, and net unaudited profit of US$1.75 million for the eight months ended Aug. 31, 2006. ASTRA-TRANS: Mikolaiv Court Names Vira Fomenko as Liquidator ------------------------------------------------------------ The Economic Court of Mikolaiv Region appointed Vira Fomenko as Liquidator/Insolvency Manager for OJSC Astra-Trans (code EDRPOU 05441022). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 13. The case is docketed as 10/402/06. The Economic Court of Mikolaiv Region is located at: Admiralska Str. 22 54009 Mikolaiv Region Ukraine The Debtor can be reached at: OJSC Astra-Trans Kosmonavtiv Str. 89 54028 Mikolaiv Region Ukraine MARKET-TRADE: Court Names Andrij Kulakov as Insolvency Manager -------------------------------------------------------------- The Economic Court of Dnipropetrovsk Region appointed Andrij Kulakov as Liquidator/Insolvency Manager for LLC Market-Trade (code EDRPOU 32633106). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 19. The case is docketed as B 24/80/06. The Economic Court of Dnipropetrovsk Region is located at: Kujbishev Str. 1a 49600 Dnipropetrovsk Region Ukraine The Debtor can be reached at: LLC Market-Trade Televizijna Str. 5 Krivij Rig 50086 Dnipropetrovsk Region Ukraine NADIYA LLC: Court Names V. Bolhovitin as Insolvency Manager ----------------------------------------------------------- The Economic Court of Vinnitsya Region appointed Mr. V. Bolhovitin as Liquidator/Insolvency Manager for Agricultural LLC Nadiya (code EDRPOU 30870255). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 7. The case is docketed as 5/291-06. The Economic Court of Vinnitsya Region is located at: Hmelnitske Shose 7 21036 Vinnitsya Region Ukraine The Debtor can be reached at: Agricultural LLC Nadiya Kuzmentsi Bar District 23040 Vinnitsya Region Ukraine SITRONICS JSC: Earns US$33.11 Million for First Half 2006 --------------------------------------------------------- JSC Sitronics released its financial results for the first six months of 2006, prepared according to U.S. GAAP. For the first six months of 2006, Sitronics posted US$33.11 million in net profit, 26.9% lower than the same period in 2005. The company also posted US$699.44 million in revenues for the January-June period, 65.68% higher than the same interval in 2005. The company's operating profit went down 36.77% to US$62.8 billion and operating income before depreciation and amortization fell 18.5% to US$85.3 million. About Sitronics Headquartered in Moscow, Russia, JSC Sitronics -- http://www.sitronics.com/-- provides telecommunications solutions, IT solutions and microelectronic solutions in the CIS region with a rapidly growing presence in other EEMEA markets. Sistema controls the company. The company also operates in Russia, CIS countries, Eastern Europe, Middle East, Africa and North America. * * * As reported in the Troubled Company Reporter-Europe on Feb. 20, Moody's Investors Service assigned a provisional (P)B3 corporate family rating to the Joint Stock Company Sitronics. Concurrently, Moody's assigned a provisional (P)B3 rating to the proposed notes of up to US$200 million to be issued by Sitronics Finance S.A. Moody's said the outlook on the ratings is stable. On Feb. 16, TCR-Europe reported that Fitch Ratings gave Sitronics JSC a Long-term IDR rating of B- with a Stable Outlook and an expected rating of B- to Sitronics' guaranteed up to US$200 million bond with a maturity of three years. The assignment of the final bond rating is contingent on receipt of final documents conforming to information already received. The ratings take into account that Sitronics is Russia and the CIS region's largest technology group, and its small scale on a global perspective. Sitronics benefits from support of Sistema Joint Stock Financial Corp, its dominant shareholder. Although it does not guarantee Sitronics' obligations, Sitronics is its second largest subsidiary and its default would trigger a cross- default of Sistema's bonds. The Stable Outlook reflects an expectation that although Sitronics' businesses will continue to grow at strong rates, the company is likely to remain a niche player and will not be able to materially improve its competitive position vis-a-vis its larger rivals. TEHELEKTROSERVICE: Creditors Must Submit Claims by Nov. 11 ---------------------------------------------------------- Creditors of JSCCT Scientific-Production Enterprise Tehelektroservice (code EDRPOU 24443280) have until Nov. 6 to submit written proofs of claim to: Volodimir Glyadchenko Liquidator/Insolvency Manager Kirov Avenue 96/13 49055 Dnipropetrovsk Region Ukraine The Economic Court of Dnipropetrovsk Region commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 27. The case is docketed as B 15/165-06. The Economic Court of Dnipropetrovsk Region is located at: Kujbishev Str. 1a 49600 Dnipropetrovsk Region Ukraine The Debtor can be reached at: JSCCT Scientific-Production Enterprise Tehelektroservice Zaporizke Shose 2A/26 49107 Dnipropetrovsk Region Ukraine TRANSINFOKOM LLC: Volodimir Glyadchenko to Liquidate Assets ----------------------------------------------------------- The Economic Court of Dnipropetrovsk Region appointed Volodimir Glyadchenko as Liquidator/Insolvency Manager for LLC Transinfokom (code EDRPOU 32859966). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 21. The case is docketed as B 26/119-06. The Economic Court of Dnipropetrovsk Region is located at: Kujbishev Str. 1a 49600 Dnipropetrovsk Region Ukraine The Debtor can be reached at: LLC Transinfokom Livarna Str. 17. 49000 Dnipropetrovsk Region Ukraine URAN-2000: Court Names Mikola Lukashuk as Insolvency Manager ------------------------------------------------------------ The Economic Court of Dnipropetrovsk Region appointed Mikola Lukashuk as Liquidator/Insolvency Manager for LLC Uran-2000 (code EDRPOU 30659908). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 26. The case is docketed as B 29/23-06. The Economic Court of Dnipropetrovsk Region is located at: Kujbishev Str. 1a 49600 Dnipropetrovsk Region Ukraine The Debtor can be reached at: LLC Uran-2000 Chkalov Str. 127 Chkalovka Krivij Rig District 53020 Dnipropetrovsk Region Ukraine =========================== U N I T E D K I N G D O M =========================== ADEPT FIELD: Claims Filing Period Ends Dec. 11 ---------------------------------------------- Creditors of Adept Field Marketing Limited have until Dec. 11 to detail their names and addresses and Solicitors, if applicable, together with particulars of their debts or claims, in writing, or in person, to appointed Liquidator Duncan R. Beat at: Tenon Recovery 75 Springfield Road Chelmsford Essex CM2 6JB United Kingdom Headquartered in Ashford, England, Adept Field Marketing Limited -- http://www.adeptfm.com/-- provides cost-effective services including direct sales, brand development and promotion, database management, market research and product trials, and campaign planning. AMERICAN GREETINGS: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. consumer products sector, the rating agency confirmed its Ba1 Corporate Family Rating for American Greetings Corporation. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given- default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$300M sr. sec delay draw term loan due 2013 Ba1 Baa3 LGD2 28% US$350M senior secured revolving credit facility due 2011 Ba1 Baa3 LGD2 28% US$200M senior unsecured notes due 2016 Ba2 Ba2 LGD5 81% US$22.7M senior unsecured notes due 2028 Ba2 Ba2 LGD5 81% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Cleveland, Ohio-based American Greetings Corporation (NYSE: AM) -- http://corporate.americangreetings.com/-- manufactures social expression products. American Greetings also manufactures and sells greeting cards, gift wrap, party goods, candles, balloons, stationery and giftware throughout the world, primarily in Canada, the United Kingdom, Mexico, Australia, New Zealand and South Africa. BOBCAT PLANT: Creditors' Claims Due Dec. 31 ------------------------------------------- Creditors of Bobcat Plant Hire (UK) Limited have until Dec. 31 to send in their full names and addresses, together with full particulars of their debts or claims, to appointed Liquidator Peter O'Duffy at: IP Services Ltd. 9 Woodhill Road Portishead Bristol BS20 7EU United Kingdom Headquartered in Bristol, England, Bobcat Plant Hire (UK) Limited -- http://www.bobcat.co.uk/-- supplies new and used compact machines and attachments from market leaders Komatsu, Bobcat Messersi and Kanga. The company also offers on-site repairs and maintenance as well as service contracts to its customers. BRITISH BATA: Taps Liquidators from Grant Thornton -------------------------------------------------- Anthony Norman Flynn and Andrew David Conquest of Grant Thornton U.K. LLP were appointed Joint Liquidators of The British Bata Shoe Company Limited on Oct. 11 for the creditors' voluntary winding-up procedure. Headquartered in Tilbury, England, The British Bata Shoe Company Limited is a holding company for a group engaged in the manufacture of footwear, overseas trading and also a U.K. property company. BROOKLANDS EURO: Fitch Keeps BB Rating on EUR15-Million Notes ------------------------------------------------------------- Fitch Ratings affirmed Brooklands Euro Reference Linked Notes 2005-1 Limited's collateralized debt obligations: -- EUR50,000,000 Class A1: AAA; -- EUR50,000,000 Class A2: AAA; -- EUR19,000,000 Class B: AA; -- EUR15,000,000 Class C: A; -- EUR13,500,000 Class D1: BBB; -- EUR7,500,000 Class D2: BBB; and -- EUR15,000,000 Class E: BB. The affirmation reflects the transaction's relatively stable performance and adequate credit enhancement levels. The Weighted Average Fitch Factor has remained within the BBB/BBB- rating category, although it has deteriorated slightly to 4.47 from 3.91 in September 2005. The speculative-grade entities represent 10% of the portfolio compared to 3.25% last year. The stable credit enhancement and equity coupon provided by the class F, which serves as a first loss protection, however, has mitigated this increased credit risk in the underlying portfolio. There has been no credit event date. As of the September 2006 trustee report, the portfolio comprised 99 entities compared to 81 in September 2005. Brooklands is a special purpose vehicle incorporated under the laws of the Cayman Islands. Brooklands entered into a credit default swap with UBS AG, London Branch and issued the notes listed above. These notes are collateralized by AAA-rated securities purchased pursuant to a repurchase agreement with UBS. Under the credit default swap, Brooklands agreed to make payments to UBS for losses on a substitutable portfolio of corporate reference entities and ABS reference securities with a notional amount of EUR1 billion. BUTTERFLY PRESS: H. J. Sorsky Leads Liquidation Procedure --------------------------------------------------------- H. J. Sorsky was appointed Liquidator of Butterfly Press Limited on Oct. 17 for the creditors' voluntary winding-up procedure. Headquartered in Aldershot, England, Butterfly Press Limited -- http://www.butterfly-cp.co.uk/-- runs a complete full color printing, finishing and design studio. The company specializes in corporate brochures and magazines. COOPER-STANDARD: S&P Lowers Corporate Credit Rating to B -------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Novi, Mich.-based Cooper-Standard Automotive Inc. to 'B' from 'B+' and removed the rating from CreditWatch with negative implications, where it was placed Aug. 21 following Ford Motor Co.'s announcement of sharp fourth quarter production cuts. The outlook is stable. "The downgrade reflects our view that Cooper-Standard will not reach and sustain credit measures expected for the 'B+' rating in the year ahead. This is because of the company's vulnerability to Ford's planned vehicle production cuts, combined with ongoing tough industry conditions," said Standard & Poor's credit analyst Nancy Messer. Ford platforms provide about 35% of Cooper-Standard's total revenue, and sales of the Ford F-series truck are a significant contributor to Cooper-Standard's earnings. These production cuts come at a time when Cooper-Standard's financial profile is already weak because of poor 2005 results and the company's February 2006 acquisition of ITT Industries Inc.'s fluid-handling systems business, which left it aggressively leveraged. CORPORATE INTERNET: Creditors Confirm Liquidator's Appointment -------------------------------------------------------------- Creditors of Corporate Internet Limited confirmed on Oct. 18 the appointment of E. J. Stonham of Stonham.Co as the company's Liquidator. Headquartered in London, England, Corporate Internet Limited -- http://www.corporateinternet.com/-- provides business-focused products and services which enable organizations to effectively and measurably maximize their investment in Internet technologies. The company's services include web design/redesign, accessibility, web development and management, E-commerce solutions and application development, content management systems, business analysis, corporate e-mail governance capabilities, business outsourcing, and E-security. DIAMOND CONTRACT: Taps BDO Stoy as Joint Administrators ------------------------------------------------------- A. H. Beckingham and M. Thompson of BDO Stoy Hayward LLP were appointed joint administrators of Diamond Contract Services Ltd. (Company Number 02925203) on Oct. 18. BDO Stoy Hayward -- http://www.bdo.co.uk/-- focuses on business assurance (audit), corporate advisory, tax, and investment management services, specializing in such industries as charities, educational institutions, family businesses, financial services, leisure, and hospitality. The company is the U.K. arm of BDO International and has offices in more than 15 cities throughout the U.K. Diamond Contract Services Ltd. can be reached at: Unit 1 Blendworth Studios Blendworth Waterlooville Hampshire PO8 0AG United Kingdom Tel: 023 9257 1524 Fax: 023 9259 5621 DIRECT DOOR: Appoints M. C. Hepworth to Liquidate Assets -------------------------------------------------------- M. C. Hepworth of Hepworth Joyce Associates Ltd. was appointed Liquidator of Direct Door Panels (Brighouse) Limited on Oct. 23 for the creditors' voluntary winding-up proceeding. Headquartered in Brighouse, England, Direct Door Panels (Brighouse) Limited -- http://www.directdoorpanels.com/-- specializes in the manufacturing of uPVC door panels containing traditional, leaded brass lights, Bevels, Colored or Textured glass encapsulated in triple glazed units. EUROPEAN SPARES: Hires Liquidator from Moore Stephens ----------------------------------------------------- Colin Andrew Prescott of Moore Stephens LLP was appointed Liquidator of European Spares Limited on Oct. 23 for the creditors' voluntary winding-up proceeding. Headquartered in Tewkesbury, England, European Spares Limited -- http://www.europeanspares.com/-- sells a range of boiler parts, shower spares and water heaters. FAREPAK FOOD: Brings In BDO Stoy to Administer Assets ----------------------------------------------------- Martha H Thompson and Shagun Dubey of BDO Stoy Hayward LLP were appointed joint administrators of Farepak Food & Gifts Ltd. (Company Number 04740401), Farepak Hampers Ltd. (Company Number 03498710), Farepak Holdings Ltd. (Company Number 04935220), and Farepak Mail Order Ltd. (Company Number 00300110) on Oct. 13. Headquartered in Reading, England, BDO Stoy Hayward -- http://www.bdo.co.uk/-- focuses on business assurance (audit), corporate advisory, tax, and investment management services, specializing in such industries as charities, educational institutions, family businesses, financial services, leisure, and hospitality. The company is the U.K. arm of BDO International and has offices in more than 15 cities throughout the U.K. Farepak Food & Gifts Ltd., Farepak Hampers Ltd., Farepak Holdings Ltd., and Farepak Mail Order Ltd. can be reached at: Farepack House Westmead Industrial Estate Westlea Swindon Wiltshire SN5 7YZ United Kingdom Tel: 01793 486 441 FORD MOTOR: Closes Production at Atlanta Assembly Plant ------------------------------------------------------- Production ended at Ford Motor Company's Atlanta Assembly Plant on Friday, Oct. 27, at 7 a.m. when the company produced its last Ford Taurus. Ford produced 7.5 million Taurus units since the sedan was introduced in 1985. From 1992 to 1996, Taurus was the best- selling car in the United States. Its peak year was 1992 with 409,751 units sold. Ford produced Taurus at two assembly plants -- Atlanta and Chicago -- until 2004 when Chicago Assembly began production of Ford Five Hundred, Freestyle and Mercury Montego. The Atlanta Assembly opened in 1947 and built a variety of historical models including the light trucks, Ford Fairlane, Fairmont, Falcon, Galaxie, Grananda, LTD, Rachero, Torino, Thunderbird, Marquis, Sable and Taurus. For the past five years Atlanta Assembly has ranked among the top 10 most productive assembly plants in North America, as reported by Harbour Consulting. In the 2005 report, Atlanta ranked number one in productivity. Atlanta Assembly employed 1,950 workers, including 1,800 hourly and 150 salaried. The hourly employees, like all UAW-represented Ford employees in the U.S., can select among eight separation, educational and retirement packages. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Oct. 24, 2006, Standard & Poor's Ratings Services placed its 'B' senior unsecured debt issue ratings on Ford Motor Co. on CreditWatch with negative implications. At the same time, S&P affirmed all other ratings on Ford, Ford Motor Credit Co., and related entities, except the rating on Ford Motor Co. Capital Trust II 6.5% cumulative convertible trust preferred securities, which was lowered to 'CCC-' from 'CCC.' At the same time, Fitch Ratings placed Ford Motor's 'B+/RR3' senior unsecured debt on Rating Watch Negative reflecting Ford's intent to hike secured financing that would impair the position of unsecured debt holders. Under Fitch's recovery rating scenario it was estimated that unsecured holders would recover around 68% in a bankruptcy scenario, equating to a Recovery Rating of 'RR3' (50-70% recovery). Moody's Investors Service has disclosed that Ford's very weak third quarter performance, with automotive operations generating a pre-tax loss of US$1.8 billion and a negative operating cash flow of US$3 billion, was consistent with the expectations which led to the September 19 downgrade of the company's long-term rating to B3. G. BRIDGEHOUSE: Names Gerard Keith Rooney as Administrator ---------------------------------------------------------- Gerard Keith Rooney of Rooney Associates was named administrator of G. Bridgehouse & Co. Ltd. (Company Number 00783334) on Oct. 19. The administrator can be reached at: Gerard Keith Rooney Rooney Associates 2nd Floor 19 Castle Street Liverpool L2 4SX United Kingdom Tel: 0151 236 9999 Fax: 0151 236 9777 Web: http://www.rooney.co.uk/ E-mail: mail@rooney.co.uk G. Bridgehouse & Co. Ltd. can be reached at: 30 Knowl Street Stalybridge Cheshire SK15 3AJ United Kingdom Tel: 0161 303 8812 Fax: 0161 338 4115 GANDALF ASIA: Appoints Leigh & Co to Administer Assets ------------------------------------------------------ Martin Henry Linton of Leigh & Co. was appointed administrator of Gandalf Asia Ltd. (Company Number 5144866) on Oct. 6. The administrator can be reached at: Martin Henry Linton Leigh & Co. Brentmead House Britannia Road London, N12 9RU United Kingdom Tel: 020 8446 6767 Headquartered in Richmond, England, Gandalf Asia Ltd. wholesales computers. GETTY IMAGES: Earns US$37.6 Million in Third Quarter 2006 --------------------------------------------------------- Getty Images Inc. reported US$37.6 million of net income for the third quarter ended Sept. 30, 2006, up 3% compared to US$39.3 million in the third quarter of 2005. Revenue grew 7.4% to US$198.1 million from US$184.5 million in the third quarter of 2005. Excluding the effects of changes in currency exchange rates, revenue grew 5.3%. As a percentage of revenue, cost of revenue was 25.4% an improvement from 25.7% in the prior year. "Our third quarter results reflect the dynamic changes that are occurring in our industry, "said Jonathan Klein, co-founder and chief executive officer. "We are announcing a vision that will capitalize on the industry evolution, which is as exciting and as innovative as anything we have done in the past. We will manage aggressively through this transformation, directing resources to areas that provide the most compelling growth opportunities, thereby, setting the foundation for a new stage of growth. Sustained growth will be driven by continuous innovation and a dedication to serve our customers." Income from operations was US$54.7 million, compared to US$58.7 million in the third quarter of 2005. Excluding stock- based compensation, income from operations was US$59 million in the third quarter of 2006, consistent with the third quarter of 2005. Excluding stock-based compensation, the operating margin was 29.8% compared to 32.0% in the third quarter last year. Net cash provided by operating activities was US$181.5 million and the acquisition of property and equipment totaled US$49.6 million in the first nine months of 2006. Cash balances were US$290.7 million at Sept. 30, 2006, up from US$259.5 million at June 30, 2006. For the fourth quarter of 2006, the company expects to report revenue of around US$196 million. For 2006, the company expects to report revenue of around US$800 million. The company has announced a realignment of resources that will result in a charge of around US$5 million in the fourth quarter of the year for employee related costs and a possible additional charge for consolidating certain office space of around US$4 million. Full year and fourth quarter guidance excludes these charges. Headquartered in Seattle, Washington, Getty Images, Inc. -- http://corporate.gettyimages.com/-- creates and distributes visual content. The company has corporate offices in Australia, the United Kingdom and Argentina. * * * Moody's Investors Service upgraded the credit ratings of Getty Images, Inc. and changed the ratings outlook to stable from positive. The upgrade in the corporate family rating to Ba1 from Ba2 reflected Getty's leading market position, improving credit metrics, impressive operating margins and good secular growth trends in the stock imagery market. Moody's also upgraded its rating on the company's US$265 million series B convertible subordinated notes due 2023, to Ba2 from Ba3. GETTY IMAGES: Sees Job Cuts, Staff Restructuring ------------------------------------------------ Getty Images Inc. plans to lay off some of its employees as it proceeds with a staff restructuring, Kim Peterson at the Seattle Times reports. News of the proposed layoffs came in the wake of the company's third quarter results that analysts say fell short of revenue estimates, the Associated Press writes. The company reported US$37.6 million of net income for the third quarter ended Sept. 30, 2006, versus US$39.3 million in the third quarter of 2005. Getty's chief executive officer Jonathan Klein said in the Seattle Times article that increased competition from cheaper image providers is hurting the company. The company expects to improve its finances by, among other things, placing its sales team in direct contact with its key costumers. Andrea James, a Seattle Post-Intelligencer reporter, said the staff restructuring would include a six-fold increase in the company's market development executive staff. Headquartered in Seattle, Washington, Getty Images, Inc. -- http://corporate.gettyimages.com/-- creates and distributes visual content. The company has corporate offices in Australia, the United Kingdom and Argentina. * * * Moody's Investors Service upgraded the credit ratings of Getty Images, Inc. and changed the ratings outlook to stable from positive. The upgrade in the corporate family rating to Ba1 from Ba2 reflected Getty's leading market position, improving credit metrics, impressive operating margins and good secular growth trends in the stock imagery market. Moody's also upgraded its rating on the company's US$265 million series B convertible subordinated notes due 2023, to Ba2 from Ba3. HYDAWAYS FARMING: Appoints Joint Administrators from Kroll ---------------------------------------------------------- R. A. H. Maxwell and S. C. E. Mackellar of Kroll were appointed joint administrators of Hydaways Farming Ltd. (Company Number 04004059) on Oct. 20. Kroll Limited -- http://www.krollworldwide.com/-- offers risk- consulting services worldwide. The firm is an operating unit of Marsh & McLennan Companies, Inc., the global professional services firm. Kroll's services include corporate advisory and restructuring, financial accounting, valuation and litigation, electronic evidence and data recovery, business intelligence and investigations, background screening, and security services. Hydaways Farming Ltd. can be reached at: Hanover Court 5 Queen Street Lichfield Staffordshire WS13 6QD United Kingdom Tel: 0161 838 4500 IBALL WHOLESALE: Names Terry Christopher Evans Liquidator --------------------------------------------------------- Terry Christopher Evans was appointed Liquidator of Iball (Wholesale) Limited on Oct. 20 for the creditors' voluntary winding-up procedure. Headquartered in Romsey, England, Iball (Wholesale) Limited wholesales garden supplies. KRISPY KREME: Grants 420,000 Common Shares to Executives -------------------------------------------------------- The Compensation Committee of the Board of Directors of Krispy Kreme Doughnuts Inc. approved grants of stock options for an aggregate of 900,000 shares of the Company's common stock, including grants to its executive officers. The Company disclosed that the grants included: Executive Officer No. of Shares ---------------- ------------- Jeffrey L. Jervik 150,000 Executive Vice President - Operations Douglas R. Muir 120,000 Chief Accounting Officer Michael C. Phalen 150,000 Chief Financial Officer The Company also disclosed that the date of grant will be the second trading day following the filing of its Annual Report on Form 10-K for the fiscal year ended Jan. 29, 2006. The grants will be made under the Company's 2000 Stock Incentive Plan and a Nonqualified Stock Option Agreement. The exercise price of the options will be the closing price of the Company's common stock on the New York Stock Exchange on the date of the grant. Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme (NYSE: KKD) -- http://www.krispykreme.com/-- is a branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. There are currently approximately 320 Krispy Kreme stores and 80 satellites operating systemwide in 43 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC is a majority-owned subsidiary and franchisee partner of Krispy Kreme Doughnuts, Inc., in the Philadelphia region. Freedom Rings operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated $10 million to $50 million in assets and debts. Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). The bankruptcy filing will facilitate the sale of 12 Krispy Kreme stores, as well as the franchise development rights for Colorado, Minnesota and Wisconsin, for approximately $10 million to Westward Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP represents Glazed in its restructuring efforts. When Glazed filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently restructuring under the Companies' Creditors Arrangement Act. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. The Monitor is attempting to sell the KremeKo business. LINCOLN CASTINGS: Creditors' Meeting Slated for November 14 ----------------------------------------------------------- Creditors of Lincoln Castings Limited (Company Number 01419988) will meet at 11:00 a.m. on Nov. 14 at: Norton Lodge Conference Centre Old Harbour Farm Norton Disney Lincoln Lincolnshire LN6 9JR United Kingdom Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be submitted together with written debt claims at noon on Nov. 13 at: Simon Allport and Ian Best Joint Administrators Ernst & Young LLP 100 Barbirolli Square Manchester M2 3EY United Kingdom Tel: +44 [0] 161 333 3000 Fax: +44 [0] 161 333 3001 Ernst & Young -- http://www.ey.com/-- is global organization help companies in businesses across all industries-from emerging growth companies to global powerhouses-deal with a broad range of business issues. It has 107,000 people in 140 countries around the globe pursue the highest levels of integrity, quality and professionalism to provide clients with a broad array of services relating to audit and risk-related services, tax, and transactions. LOGIC SYSTEMS: Brings In Ninos Koumettou as Administrator --------------------------------------------------------- Ninos Koumettou of Alexander Lawson Jacobs was appointed administrator of Logic Systems Management Ltd. (Company Number 03549166) on Oct. 16. The administrator can be reached at: Ninos Koumettou Alexander Lawson Jacobs 1 Kings Avenue Winchmore Hill London EC1V 2NJ United Kingdom Tel: 0845 260 0590 Logic Systems Management Ltd. can be reached at: 17 Queensway Enfield Middlesex EN3 4SA United Kingdom Tel: 020 7246 8649 Fax: 020 8344 1359 LUDGATE FUNDING: Fitch Puts Low-B Ratings on Two Note Classes ------------------------------------------------------------- Fitch Ratings assigned expected ratings to Ludgate Funding Plc's Series 2006 FF1 GBP377.8 million-equivalent mortgage-backed medium-term notes due 2060: -- GBP-equivalent 114.35 million Class A1: AAA; -- GBP-equivalent 233.95 million Class A2: AAA; -- GBP-equivalent 12 million Class B: AA; -- GBP-equivalent 7.65 million Class C: A; -- GBP-equivalent 4.8 million Class D: BBB; -- GBP-equivalent 2.25 million Class E: BB; and -- GBP-equivalent 2.8 million Class S: BB-. The final ratings are contingent upon receipt of final documents conforming to information already received. This transaction is a securitization of sub-prime residential mortgages originated and located in the U.K. The expected ratings are based on the quality of the collateral, available credit enhancement, the underwriting criteria and the servicing capabilities of Mortgages PLC, and the back up servicing of capabilities of Homeloan Management Limited and the transaction's sound legal structure. Credit enhancement for the Class A notes totals 7.52% and will be provided by the subordination of the Class B notes, the Class C notes, the Class D notes, the Class E notes and an initial and target reserve fund of 0.4%. Interest on the Class S notes will be paid after the replenishment of the reserve fund, if needed, and before principal on the Class S To determine appropriate credit enhancement levels, Fitch analyzed the collateral using its U.K. Residential Mortgage Default Model III. The agency also modeled cash flows using the results of the default model, with structural stresses including various prepayment and interest rate scenarios. The cash flow tests showed that each Class of notes could withstand loan losses at a level corresponding to the related stress scenario without incurring any principal loss or interest shortfall and can retire principal by legal final maturity. M N L PHARMA: Appoints PwC to Administer Assets ----------------------------------------------- David J. Blenkarn and Stephen A. Ellis of PricewaterhouseCoopers LLP were appointed joint administrators of M N L Pharma Ltd. (Company Number 03638599) on Oct. 19. PricewaterhouseCoopers LLP -- http://www.pwcglobal.com/-- provides auditing services, accounting advice, tax compliance and consulting, financial consulting and advisory services to clients in a variety of industries. Headquartered in Aberystwyth, England, M N L Pharma Ltd. -- http://www.mnlpharma.com/-- is engaged in research and development on natural sciences and engineering. MARBLE ARCH: Moody's Assigns Ba1 Rating on GBP25.2-Mln Notes ------------------------------------------------------------ Moody's Investors Service assigned definitive long-term credit ratings to these classes of Notes issued by Marble Arch Residential Securitization No. 4 PLC: -- US$201,400,000 Class A1b Mortgage Backed Floating Rate Notes due 2023: Aaa; -- GBP145,000,000 Class A1c Mortgage Backed Floating Rate Notes due 2023: Aaa; -- US$250,500,000 Class A2b Mortgage Backed Floating Rate Notes due 2040: Aaa; -- GBP56,000,000 Class A2c Mortgage Backed Floating Rate Notes due 2040: Aaa; -- GBP231,000,000 Class A3c Mortgage Backed Floating Rate Notes due 2040: Aaa; -- Detachable A3c Coupons: Aaa; -- EUR36,400,000 Class B1a Mortgage Backed Floating Rate Notes due 2040: Aa3; -- US$27,100,000 Class B1b Mortgage Backed Floating Rate Notes due 2040: Aa3; -- GBP20,000,000 Class B1c Mortgage Backed Floating Rate Notes due 2040: Aa3; -- EUR43,450,000 Class C1a Mortgage Backed Floating Rate Notes due 2040: A2; -- GBP15,000,000 Class C1c Mortgage Backed Floating Rate Notes due 2040: A2; -- EUR20,700,000 Class D1a Mortgage Backed Floating Rate Notes due 2040: Baa1; -- GBP26,000,000 Class D1c Mortgage Backed Floating Rate Notes due 2040: Baa1; and -- GBP25,200,000 Class E1c Mortgage Backed Floating Rate Notes due 2040: Ba1. This transaction represents the fourth securitization of mortgage loans originated by Matlock Bank Limited and also includes loans originated by Langersal No. 2 Limited, Southern Pacific Personal Loans Limited and Southern Pacific Mortgage Limited under the brand names "London Mortgage Company" and "London Personal Loans". The assets supporting the Notes are near prime and non-conforming mortgage loans secured on residential properties in England and Wales. The total debt raised by Marble Arch Residential Securitization No.4 plc will be used to purchase a portfolio of mortgage loans and will be split as follows: 80.00% Class A Notes, 7.00% Class B Notes, 5.25%, Class C Notes, 4.75% Class D1 Notes and 3.00% Class E1c Notes. The reserve fund will be fully funded at closing and will be 1.50% of the initial transaction amount. The ratings of the Notes are based upon the analysis of the characteristics of the mortgage pool backing the Notes, the protection the Notes receive from credit enhancement against defaults and arrears in the mortgage pool, and the legal and structural integrity of the issue. The ratings address the expected loss posed to investors by the legal final maturity. The structure allows for timely payment of interest and ultimate payment of principal at par on or before the rated final legal maturity date. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed but may have a significant effect on the yield to investors. Capstone Mortgage Services Limited, with delegation to Vertex Mortgage Services Ltd. and Lightfoots Solicitors, is the master servicer for the mortgage loans. SMS Mortgage Services Ltd. will be the Standby Servicer for the pool, if the appointment of Capstone as servicer is terminated. MAYFIELD LEISURE: Hires Administrators from Portland Business ------------------------------------------------------------- Michael Robert Fortune and James Richard Tickell of Portland Business & Financial Solutions Ltd. were appointed joint administrators of Mayfield Leisure Ltd. (Company Number 2333346) on Oct. 19. The administrators can be reached at: Michael Robert Fortune and James Richard Tickell Portland Business & Financial Solutions Ltd. Unit B The Outlook Ling Road Poole Dorset BH12 4PY United Kingdom Tel: 012 0271 2810 Mayfield Leisure Ltd. can be reached at: 26 32 Cobham Road Ferndown Industrial Estate Wimborne Dorset BH21 7NP United Kingdom Tel: 01202 855 222 Fax: 01202 892 666 MILLENNIUM MILLION: Brings In Administrator from Little Badnage --------------------------------------------------------------- Robert Charles Millichap of Little Badnage was appointed administrator of Millennium Million Ltd. (formerly Sport Italia Limited) (Company Number: 03600569) on Oct. 20. The administrator can be reached at: Robert Charles Millichap Little Badnage Badnage Lane Tillington Herefordshire HR4 8LP United Kingdom Millennium Million Ltd. can be reached at: Cheltenham Road East Gloucester Gloucestershire GL2 9QL United Kingdom Tel: 01452 858 080 Fax: 01452 858 081 NCO GROUP: Special Shareholders' Meeting Set for November 9 ----------------------------------------------------------- NCO Group Inc. has established a record date and special meeting date for its shareholders to consider and vote on a proposal to adopt the previously announced merger agreement providing for the acquisition of NCO by an entity controlled by One Equity Partners and its affiliates with participation by Michael J. Barrist, Chairman, President and Chief Executive Officer of NCO and certain other members of executive management who will be given an opportunity to participate. NCO shareholders of record at the close of business on Friday, Oct. 13, 2006, will be entitled to notice of the special meeting and to vote on the proposal. The special meeting will be held on Nov. 9, 2006 at 10:00 a.m., local time, at Philadelphia Marriott West, 111 Crawford Avenue in West Conshohocken, Pennsylvania. NCO Group, Inc. -- http://www.ncogroup.com/news/-- provides business process outsourcing services including accounts receivable management, customer relationship management and other services. NCO provides services through 90 offices in the United States, Canada, the United Kingdom, Australia, India, the Philippines, the Caribbean and Panama. NCO GROUP: Moody's Junks Proposed $200 Million Senior Notes ----------------------------------------------------------- Moody's Investors Service assigned a B3 rating to NCO Group, Inc.'s proposed $165 million senior unsecured notes and a Caa1 rating to its proposed $200 million of senior subordinated notes, which are intended to replace a proposed $365 million senior subordinated notes offering that was cancelled. Concurrently, Moody's withdrew the Caa1 rating assigned to the discussed $365 million of senior subordinated notes. Pro-forma for the aforementioned capital mix changes, Moody's affirmed the B2 corporate family rating and the Ba3 rating on the $565 million senior secured credit facility. The rating outlook is stable. On July 21, 2006, NCO entered into a definitive agreement to be acquired by an entity controlled by One Equity Partners, with participation by certain members of senior management. The transaction is expected to close in the fourth quarter of 2006 and is subject to customary closing conditions including the approval of NCO's shareholders. Upon closing of this transaction, NCO's stock will no longer be publicly traded. The transaction is expected to be funded with a $465 million term loan, $200 million of senior subordinated notes, $165 million of senior unsecured floating rate notes, $365 million of cash equity contributed by OEP and $23 million of rollover equity. The ratings benefit from solid pro forma credit metrics for the rating category, high levels of EBIT, leading market positions in receivables management and portfolio management business lines and a good track record of profitability and cash flow generation. The ratings are constrained by the potential for profitability erosion due to increasing competition in portfolio management business, sensitivity of receivable collection trends to a weakening economy and moderate revenue concentration. The Ba3 rating on the senior secured credit facility reflects an LGD 2 loss given default assessment as this facility is secured by a pledge of the assets of the guarantor subsidiaries which comprise about 60% of consolidated EBITDA for the June 30, 2006 LTM period and 65% of the stock of foreign subsidiaries. The LGD 2 assessment benefits from a significant amount of junior debt in the capital structure. The B3 rating on the senior unsecured notes reflects an LGD 4 loss given default assessment given that it is effectively subordinated to the secured credit facility but benefits from $200 million of junior ranking subordinated notes. The Caa1 rating on the senior subordinated notes reflects an LGD 6 loss given default assessment given that it is effectively subordinated to the secured credit facility and the senior unsecured notes. The SGL-2 rating reflects a good liquidity position pro forma for the recapitalization transaction. Moody's took these rating actions: -- Assigned $165 million senior unsecured floating rate notes at B3 (LGD 4, 63%) -- Assigned $200 million senior subordinated notes at Caa1 (LGD 6, 90%) -- Withdrew $365 million senior subordinated notes, rated Caa1 (LGD 5, 82%) -- Affirmed $465 million 7 year senior secured term loan at Ba3 (to LGD 2, 29% from LGD 2, 26%) -- Affirmed $100 million 5 year senior secured revolver at Ba3 (to LGD 2, 29% from LGD 2, 26%) -- Affirmed corporate family rating at B2 -- Affirmed probability-of-default rating at B2 -- Affirmed speculative grade liquidity rating at SGL-2 The stable outlook anticipates moderate revenue and EBIT growth over the next 12-18 months. Cash flow from operations is expected to be used to fund capital expenditures of about $30-$40 million per year, niche acquisitions which complement existing business segments, and required term loan amortization. The ratings could be upgraded if financial performance improves such that EBIT coverage of interest and free cash flow to total debt can be sustained at over 1.7x and 7%, respectively. Given the company's solid position in the rating category, a moderate increase in pricing trends in the portfolio management segment or decline in accounts receivable collection rates will be unlikely to pressure the ratings. However, a sharp downturn in the business which results in EBIT coverage of interest and free cash flow to debt that are expected to sustained at under 1 time and 0%, respectively, could lead to a downgrade. A significant debt financed acquisition that substantially weakens credit metrics and liquidity could also pressure the rating. Based in Horsham, Pennsylvania, NCO is a global provider of business process outsourcing services, primarily focused on accounts receivable management and customer relationship management. The company also purchases and manages past due consumer accounts receivable (PM or portfolio management business) from consumer creditors such as banks, finance companies, retail merchants, utilities, healthcare companies, and other consumer-oriented companies. The company reported revenues of about $1.1 billion for the twelve month period ending June 30, 2006. NCO GROUP: S&P Assigns B- Rating on US$165-Mln Sr. Unsec. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' rating to the US$165 million senior unsecured floating rate notes issued by NCO Group Inc. Standard & Poor's previously assigned a 'B+' long-term counterparty credit rating to NCO, as well as a bank loan rating of 'B+' and a recovery rating of '3' to the company's US$465 million senior secured bank loan and US$100 million revolver. NCO's senior subordinated notes, which were reduced to US$200 million from US$365 million were rated 'B-'. The outlook remains stable. The ratings on NCO are based in part on its -- high leverage and poor capitalization (negative tangible equity), -- marginal cash flow coverage, and -- high level of operational risk. The company's modest profitability, driven in part by its sensitivity to changing market dynamics, is also a primary driver of the rating. Other considerations include: -- NCO's strong niche market position in accounts receivable and collection services, -- well-established client relationships, and -- multiple sourcing channels for the purchase of distressed receivables. OCA RESTAURANTS: Taps Tomlinsons to Administer Assets ----------------------------------------------------- A. H. Tomlinson of Tomlinsons was appointed administrator of OCA Restaurants Ltd. (Company Number 5126320) on Oct. 11. Headquartered Manchester, England, Tomlinsons -- http://www.tomlinsons.co.uk/-- is an independent firm of Licensed Insolvency Practitioners with offices in Manchester, Blackburn and London. It specializes in all types of business recovery and insolvency procedures, as well as offering advice to companies and individuals who believe they may be heading towards, or are already in, financial difficulty. Headquartered in Salford, England, OCA Restaurants Ltd. is engaged in restaurant operations. ONETV PLC: Appoints Mark S. Goldstein as Administrator ------------------------------------------------------ Mark S. Goldstein of DCM Insolvency Services Ltd. was appointed administrator of OneTV PLC (Company Number 05281243) on Oct. 18. The administrator can be reached at: Mark S. Goldstein DCM Insolvency Service Ltd. Kingswood Court 1 Hemlock Close Kingswood Surrey KT20 6QW United Kingdom Tel: 01737 830763 Fax: 01737 83081 E-mail: markmga@aol.com Headquartered in London, England, OneTV PLC is engaged in television broadcasting. P4PROPERTY LIMITED: Hires BDO Stoy as Joint Administrators ---------------------------------------------------------- Martha H. Thompson and Dermot B. Coakley of BDO Stoy Hayward LLP were appointed joint administrators of P4Property (Wallingford) Ltd. (Company Number 05412271) on Oct. 18. Headquartered in Reading, England, BDO Stoy Hayward -- http://www.bdo.co.uk/-- focuses on business assurance (audit), corporate advisory, tax, and investment management services, specializing in such industries as charities, educational institutions, family businesses, financial services, leisure, and hospitality. The company is the U.K. arm of BDO International and has offices in more than 15 cities throughout the U.K. Headquartered in London, England, P4Property (Wallingford) Ltd. is engaged in land acquisition and property development. PEMBRIDGE SQUARE: Fitch Assigns BB+ Rating on EUR16-Mln Notes ------------------------------------------------------------- Fitch Ratings assigned ratings to Pembridge Square Finance Ltd. floating-rate credit-linked notes, which were issued on Oct. 19, 2006: -- EUR17,000,000 class A1 due 2041 AAA; -- EUR80,000,000 class A2 due 2041 AAA; -- EUR70,000,000 class B due 2041 AA+; -- EUR60,000,000 class C due 2041 AA; -- EUR50,000,000 class D due 2041 AA-; -- EUR40,000,000 class E due 2041 A; -- EUR25,000,000 class F due 2041 A-; -- EUR22,000,000 class G due 2041 BBB; and -- EUR16,000,000 class H due 2041 BB+; Pembridge Square Finance Limited is a fully managed synthetic CDO that references a EUR2 billion diversified portfolio. The portfolio consists of primarily investment grade corporate obligations referenced via direct investments and through 10 inner tranche credit default swaps as well as of various investment grade ABS. The transaction is designed to provide credit protection for realized losses on the reference portfolio through a master credit default swap between the issuer and the swap counterparty, KBC Investments Cayman Islands V, Ltd. The legal maturity date of the CDS is January 2041, but this trade is scheduled to amortize on or after January 2017. The rating of the notes addresses the likelihood that investors will receive full and timely payments of interest and ultimate receipt of principal by the scheduled maturity date. Pembridge Square provides protection to the swap counterparty via a CDS that is collateralized with the issuance proceeds of the notes. The issuer will enter into a guaranteed investment contract agreement with KBC Investments Hong Kong Limited, which will allow it to redeem collateral at the purchase price of the principal amounts on the maturity date. Under the GIC agreement, the issuer will pay to the GIC counterparty an amount equal to the net proceeds of issuance of the notes to be used for the purchase of the collateral. Pembridge Square pays the swap counterparty for any losses due to credit events experienced in the portfolio above the first loss amount for each class up to the balance on the notes by liquidating collateral. Any reference obligations in the portfolio can be traded at the discretion of the portfolio swap counterparty, KBC, subject to trading guidelines and portfolio criteria restrictions. While KBC bears no fiduciary responsibility to noteholders, the capital structure of the transaction aligns interests of the portfolio manager with those of the investors through an exclusively subordinate management fee and equity holdings, among other features. The ratings are based upon the structure of the issuer, the financial strength and abilities of KBC as the portfolio swap counterparty, and KBC Bank NV as GIC guarantor. PHOTRONICS INC: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. technology semiconductor and distributor sector, the rating agency affirmed its B1 corporate family rating on Photronics, Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$190MM 4.75% Convertible Subordinated Notes due 2006 B3 B2 LGD5 73% US$150MM 2.25% Convertible Subordinated Notes due 2008 B3 B2 LGD5 73% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Photronics, Inc. -- http://www.photronics.com/-- is a worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at strategically located manufacturing facilities in Europe, North America, and Asia. In Europe, the company maintains operations in Dresden, Germany and Manchester, U.K. PORTRAIT CORP: Claims Bar Date Slated for November 28 ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York set 5:00 p.m., eastern time, on Nov. 28, 2006, as the last day for persons owed money by Portrait Corp. of America Inc. and its debtor-affiliates to file their proofs of claim against the Debtors. The Bar Date applies to claims that arose on or prior to Aug. 31, 2006. The Proofs Of Claim must be received on or before the Bar Date by: a) if by mail: The U.S. Bankruptcy Court Southern District of New York Attn: Portrait Corp. of America Claims Processing Bowling Green Station P.O. Box 5074 New York, NY 10274-5074 b) if by messenger or overnight courier: Office of the Clerk The U.S. Bankruptcy Court Southern District of New York Re: Portrait Corp. of America Claims Processing One Bowling Green, New York, NY 10274 About Portrait Corporation Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. At June 30, 2006, the Debtor had total assets of $153,205,000 and liabilities of $372,124,000. Going Concern Doubt Eisner LLP raised substantial doubt about Portrait Corp. of America, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Jan. 29, 2006. The auditor pointed to the Company's substantial net loss, negative working capital, stockholders' deficiency, default of certain obligations, which were due on June 15, 2006, and insufficient liquidity to meet those obligations. REGENTREALM LTD: S&P Revises Outlook & Removes Ratings ------------------------------------------------------ Standard & Poor's Ratings Services revised the CreditWatch implications of its ratings on U.K.-based biscuits and snacks manufacturer United Biscuits Finance PLC, and its direct subsidiary Regentrealm Ltd., to developing from positive and then removed all its ratings on the group. The withdrawal of the ratings is being made at the request of United Biscuits, following the recent redemption of its senior subordinated notes due 2011. The group no longer has any rated debt outstanding. The ratings were on CreditWatch with positive implications, where they placed on July 10 following an expected improvement to United Biscuit's pro forma financial profile due to proceeds from the divestiture of the group's Southern European business. The group recently announced, however, that its shareholders have agreed to sell United Biscuits to a consortium made up of The Blackstone Group and PAI, raising the concern of possible higher leverage and related pressure on the ratings. The CreditWatch implications were consequently revised to developing before the ratings were withdrawn. RIMTEX LIMITED: Creditors Confirm Liquidator's Appointment ---------------------------------------------------------- Creditors of Rimtex Limited (formerly PJC 2000 Limited) confirmed Oct. 20 the appointment of Ian William Kings of Tenon Recovery as the company's Liquidator. Headquartered in North Shields, England, Rimtex Limited manufactures men's and boys' suits and coats. SAFRA EASTERN: Liquidators Set Dec. 1 Claims Bar Date ----------------------------------------------------- Unsecured creditors of Safra Eastern Europe Fixed Income Fund, Ltd., Clariden Eastern Europe Debt Fund, Ltd., and Indosuez Eastern Europe Fixed Income Fund Ltd. have until Dec. 1, 2006, to submit their proofs of debts to Joint Official Liquidator Nigel James Hamilton at: Nigel James Hamilton Ernst & Young LLP 1 More London Place London SE1 2AF United Kingdom Joint Official Liquidators N. J. Hamilton and W. St. C Hutchinson intend to declare a first dividend to unsecured creditors within the period of one month from Dec. 1, 2006. SANDHU MENSWEAR: Names Simon Gwinnutt as Administrator ------------------------------------------------------ Simon Gwinnutt of Smith Cooper was named administrator of Sandhu Menswear Co. Ltd. (Company Number 03023986) on Oct. 17. The administrator can be reached at: Simon Gwinnutt Smith Cooper Wilmot House St James Court Friar Gate Derby Derbyshire DE1 1BT United Kingdom Tel: 01332 332021 Fax: 01332 290439 E-mail: smg@smithcooper.co.uk Sandhu Menswear Co. Ltd. can be reached at: 1 Castings Road Derby Derbyshire DE23 8YL United Kingdom Tel: 01332 207 960 Fax: 01332 207 957 SYNTECH SUPPORT: Claims Registration Ends Dec. 13 ------------------------------------------------- Creditors of Syntech Support Services Limited have until Dec. 13 to send in their full names, their addresses and descriptions, full particulars of their debts or claims and the names and addresses of their Solicitors, if any, to appointed Liquidator Martin Henry Linton at: Leigh & Co. Brentmead House Britannia Road London N12 9RU United Kingdom The company can be reached at: Syntech Support Services Limited 51 Uckfield Road Enfield Middlesex EN3 6AS United Kingdom Tel: 01992 765 656 SYNITA LIMITED: Taps Kroll as Joint Administrators -------------------------------------------------- R. A. H. Maxwell and S. C. E. Mackellar of Kroll Ltd. were appointed joint administrators of Synita Ltd. (Company Number 05265238) on Oct. 20. Kroll Limited -- http://www.krollworldwide.com/-- offers risk- consulting services worldwide. The firm is an operating unit of Marsh & McLennan Companies, Inc., the global professional services firm. Kroll's services include corporate advisory and restructuring, financial accounting, valuation and litigation, electronic evidence and data recovery, business intelligence and investigations, background screening, and security services. Synita Ltd. can be reached at: 569 Bradford Road Bradford West Yorkshire BD12 7EJ United Kingdom UNITED BISCUITS: S&P Withdraws Ratings After Bond Redemption ------------------------------------------------------------ Standard & Poor's Ratings Services revised the CreditWatch implications of its ratings on U.K.-based biscuits and snacks manufacturer United Biscuits Finance PLC, and its direct subsidiary Regentrealm Ltd., to developing from positive and then removed all its ratings on the group. The withdrawal of the ratings is being made at the request of United Biscuits, following the recent redemption of its senior subordinated notes due 2011. The group no longer has any rated debt outstanding. The ratings were on CreditWatch with positive implications, where they placed on July 10 following an expected improvement to United Biscuit's pro forma financial profile due to proceeds from the divestiture of the group's Southern European business. The group recently announced, however, that its shareholders have agreed to sell United Biscuits to a consortium made up of The Blackstone Group and PAI, raising the concern of possible higher leverage and related pressure on the ratings. The CreditWatch implications were consequently revised to developing before the ratings were withdrawn. VEDARIO LIMITED: Taps Administrators from Cresswall Associates -------------------------------------------------------------- Gordon Craig and Daniel Paul Hennessy of Cresswall Associates Ltd. were appointed joint administrators of Vedario Ltd. (Company Number 01442809) (t/a Don Antonio Limited) on Oct. 6. The administrators can be reached at: Cresswall Associates Ltd. West Lancashire Investment Centre Maple View Whitemoss Business Park Skelmersdale Lancashire WN8 9TG United Kingdom Tel: 01695 712683 Vedario Ltd. can be reached at: 52 Portland Street Manchester Lancashire M1 4QU United Kingdom Tel: 0161 236 0258 Fax: 0161 236 8596 WOLVERINE TUBE: Soliciting Consents to Exchange New Equity Notes ---------------------------------------------------------------- Wolverine Tube Inc. filed a Registration Statement on Form S-4 with the U.S. Securities and Exchange Commission for an exchange offer and consent solicitation to exchange newly issued equity and a new issue of secured notes for the Company's Senior Notes, subject to certain conditions, including a minimum tender condition and the SEC's declaring the Registration Statement effective. If the Company does proceed with the exchange offer but conditions to the exchange offer and consent solicitation are not satisfied, the Company intends to pursue other alternatives, including, if certain conditions are met, a prepackaged plan of reorganization of Wolverine and certain of its subsidiaries. The Registration Statement filed Wednesday therefore includes solicitation for a Prepackaged Plan under Chapter 11 of the Bankruptcy Code. As previously disclosed, the Company and its advisors have been evaluating refinancing and restructuring alternatives in anticipation of the upcoming maturities of the Company's Secured Revolving Credit Facility and Receivables Sale Facility in 2008 and its outstanding 7.375% Senior Notes and 10.5% Senior Notes in 2008 and 2009, as well as its future projected short-term liquidity needs. As part of that process, Wolverine continues to be engaged in discussions with representatives of its bondholders and other groups as to the most appropriate transaction, if any, to reduce debt and maintain value for its shareholders. If pursued, the Prepackaged Plan would generally provide substantially the same consideration to the holders of the Senior Notes as would the consummation of the exchange offer and consent solicitation. Further, under the contemplated Prepackaged Plan, all administrative claims, priority claims, secured claims and general unsecured claims (other than with respect to the Senior Notes), including trade claims, would be paid in full, and holders of existing common stock would receive a pro rata share of a percentage of the new common stock in certain circumstances. No assurance can be given that either an exchange offer and consent solicitation or a consensual plan will be pursued and agreed upon. Chip Manning, Wolverine's President and Chief Executive Officer stated, "[Wednes]day's filing is another step in the Company's efforts to improve its overall financial health. It is important to note that we are still continuing to explore a range of alternatives, and no decision has been made on which course of action the Company will ultimately take." Manning added, "We continue to believe that liquidity is sufficient to sustain our operations in the near- to mid-term. The Company's restructuring process should have no impact on our day-to-day operations and our customers and vendors can continue to rely on the same high quality service and relationships with Wolverine that they have come to expect." Wolverine Tube, Inc. is a world-class quality partner, providing its customers with copper and copper alloy tube, fabricated products and metal joining products. About the Company Headquartered in Hunstville, Alabama, Wolverine Tube, Inc. -- http://www.wlv.com/-- provides customers with copper and copper alloy tube, fabricated products, brazing alloys, fluxes and lead-free solder, as well as copper and copper alloy rod, bar and other products. The company has manufacturing facilities in Ontario, Mexico, Portugal and China. It maintains sales and marketing offices in the United Kingdom and The Netherlands. * * * In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector in September 2006, the rating agency confirmed the Caa1 Corporate Family Rating for Wolverine Tube Inc., as well as the Caa2 ratings on the company's 7.375% Senior Unsecured Notes due 2008 and the 10.5% Senior Unsecured Notes due 2009. Those debentures were assigned an LGD4 rating suggesting noteholders will experience a 61% loss in the event of default. WOLVERINE TUBE: Moody's Lowers Ratings on Restructuring Program --------------------------------------------------------------- Moody's downgraded the ratings of Wolverine Tube, Inc.'s senior unsecured notes to Caa3 from Caa2 and its corporate family rating to Caa2 from Caa1. The outlook for the company remains negative. This action was prompted by Wolverine's announcement of a restructuring and reorganization program that will involve a debt for equity exchange to the company's current noteholders. If the company does not receive enough support for this offer, Wolverine intends to pursue a prepackaged bankruptcy plan. The downgrade reflects Moody's opinion concerning the impact of the restructuring program on noteholders' ultimate recovery as well as the overall financial strength of Wolverine. Industry competitive dynamics, volatility of raw material prices, and Wolverine's liquidity were also considered in the assessment of the company's ratings and rating outlook. Ratings downgraded: * Corporate Family Rating, to Caa2 from Caa1 * Gtd. Sr. Unsec. 7.375% notes, US$135 million due 2008, to Caa3 from Caa2 (LGD4 -- 62%) * Gtd. Sr. Unsec. 10.5% notes, US$99 million due 2009, to Caa3 from Caa2 (LGD4 -- 62%) Moody's previous rating action on Wolverine was the April 27 downgrade of its long-term debt ratings to Caa2 from Caa1 and its corporate family rating to Caa1 from B3. Wolverine is a North American manufacturer and distributor of copper and copper alloy tube, fabricated products and metal joining products, headquartered in Huntsville, Alabama. Wolverine generated US$1.1 billion in revenues and a net loss of US$45.3 million, for the nine months ended Oct. 1, 2006 as compared to revenues of US$636 million and a net loss of US$19.4 million realized in the same period earlier. WOLVERINE TUBE: Proposed Exchange Offer Spurs S&P to Cut Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Huntsville, Ala.-based Wolverine Tube Inc., to 'CC' from 'CCC+', following Wolverine's exchange offer and solicitation of consent filed [Wednes]day with the SEC. The ratings on the company's senior unsecured notes were also lowered to 'C' from 'CCC'. "The lower ratings on the notes reflect the distressed nature of the proposed exchange and our belief that the value of the exchange offer, if completed, is not equivalent to the value of the original contracted amounts," said Standard & Poor's credit analyst Lisa Tilis. At the same time, Standard & Poor's placed all of the ratings on CreditWatch with negative implications pending the outcome of the proposed restructuring, which could involve a Chapter 11 bankruptcy filing. Wolverine proposes to offer a combination of newly issued common stock and convertible preferred stock and new secured notes to current holders of its US$135 million 7.375% senior notes due August 2008 and US$99 million 10.5% senior notes due April 2009. The exchange offer and consent solicitation is subject to certain conditions, including a minimum tender condition. The exchange offer and consent solicitation is intended to reduce debt and position Wolverine to continue its operational restructuring efforts. Also, if the requirements of the exchange offer are not met, the company is simultaneously soliciting acceptances of a prepackaged plan of reorganization under Chapter 11. The proposed terms for noteholders under the prepackaged plan are substantially the same as under the exchange offer and consent solicitation. Wolverine is also continuing to explore other alternative refinancing and restructuring options. Standard & Poor's believes that it is unlikely that the company will be able to secure such financing in the absence of waivers for its current indentures because of its very high debt leverage and weak operating results. If the distressed exchange is completed, the corporate credit rating will be lowered to 'SD', or selective default, and the ratings on the exchanged notes will be lowered to 'D'. Also, if any interest payments are missed while the company is preparing to effect the exchange or considering its financing options, the relevant issue rating would be lowered to 'D', with no likely impact on the corporate credit rating. Alternatively, if the prepackaged plan of bankruptcy is filed, all ratings will be lowered to 'D'. * BOOK REVIEW: The Managerial Mystique: Restoring Leadership in Business --------------------------------------------------------------- Author: Abraham Zaleznik Publisher: Beard Books Paperback: 320 pages List Price: US$34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587982811/internetbankrupt "Business in America has lost its way ... desperately needing leadership to face worldwide economic competition." Zaleznik wrote these words in 1989 when The Managerial Mystique was first published. But his observation remains as true today as it was then. In 1989, the problems included high debt and the decline of major industries such as steel and automobiles. To these problems can now be added outsourcing and the growing economic power of China and India. Zaleznik primarily attributes the weakened condition of American business to errors in business management. "The causes of this decline in competitiveness are complex, but at the forefront is the attitude of American management," he says. Mainly, management strayed from its critically important role of encouraging, nurturing, and recognizing initiative and creativity of individuals. Instead, management concentrated myopically on restructuring, lateral organization, communication, charismatic leadership, and mergers and acquisitions. While each of these strategies has a place in the corporate world, they are not the basis for a strong business that can compete effectively. Zaleznik contends that it is the relationship between management and employees that count the most in generating the ideas, goals, cooperation, and endurance that make a corporation competitive. Zaleznik puts to good use his background in social psychology and psychoanalysis to explore this essential, yet neglected, area of business management. Social psychology and psychoanalysis are not normally associated with business management. However, the author applies these so-called "soft sciences" to business organizational structures and processes. He critiques business organizations and their activities and management at all levels by looking at what has been excluded that really accounts for the quality of a business. Zaleznik points to some high-profile examples to illustrate what is wrong with American management. One is Harold Geneen, the former chief executive officer of ITT, who, the author says, epitomized a managerial approach that stifled company energy and potential. According to Zaleznik, Geneen is one of the many business managers who "have put their faith in numbers, managed by process, and formed elaborate structures to get people to do the predictable thing." Geneen's perspective fails to acknowledge that there are differences between one business and another. That such a belief -- easily disproved by experience -- has come to be the core principle of American business evidences, to Zaleznik's mind, just how far off course American business has strayed. Zaleznik offers a business approach that concentrates on nurturing creativity and moral connections among employees. He recognizes employees as individuals and as a corrective to business practices gone awry. The values advocated by Zaleznik should not be regarded as an alternative technique or peripheral considerations. They are the basis of a strategy that all businesses need to compete effectively. A professor emeritus of Harvard Business School and a certified psychoanalyst, Abraham Zaleznik has an international reputation for his studies and teaching on social psychology in the business setting and the characteristics of managers and leaders. ********* Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. ********* 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 -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Jazel Laureno, Julybien Atadero, Carmel Zamesa Paderog, Joy Agravante, and Zora Jayda Zerrudo Sala, Editors. Copyright 2006. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, 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 Christopher Beard at 240/629-3300. * * * End of Transmission * * *