/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/081015.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 Wednesday, October 15, 2008, Vol. 9, No. 205 Headlines A U S T R I A IMPULS LLC: Claims Registration Period Ends October 29 K&B ISOLIERTECHNIK: Claims Registration Period Ends October 29 SPECIAL CAR: Claims Registration Period Ends October 30 B E L G I U M FORTIS NV: To Focus on International Insurance; May Delist Shares FORTIS NV: Bank Unit Not Sold to Deutsche Bank, Dutch Finance Says D E N M A R K * EU Commission Approves Danish State Support Scheme for Banks F R A N C E NOYON: Goes Into Administration WINDEREMRE XII: S&P Lowers Ratings on Class F and G Notes to BB G E R M A N Y ALLGEMEINE BAU-VERWALTUNGS: Creditors Meeting Slated for Oct. 22 CAMPA BIODIESEL: Creditors' Meeting Slated for October 21 COUPONTIP VERWALTUNGS: Claims Registration Period Ends Oct. 22 EPICEPT CORP: European Commission Okays Sale of Ceplene Drug EPICEPT CORP: Plans to Raise US$50,000,000 By Issuing Securities GROSSARTIGE NACHTE: Claims Registration Period Ends Oct. 21 HYPO REAL: Denies Giving Wrong Information About Liquidity Needs HYPO REAL: Supervisory Board Chair Kurt F. Viermetz Steps Down LEAR CORPORATION: Reduces 2008 Sales Outlook by US$1,000,000,000 PUTLITZER REKO: Claims Registration Period Ends Oct. 22 SAN BAU: Claims Registration Period Ends October 20 SANDKULL BAUUNTERNEHMUNG: Claims Registration Ends Oct. 20 SCHATTNER OPTIK: Claims Registration Period Ends Oct. 22 SYSTEMPARTNER COMPUTERVERTRIEBS: Claims Filing Ends October 20 TUI AG: Moody's Places B1 CFR on Review for Possible Downgrade WINDERMERE: S&P Cuts Ratings on XIV, VIII, XI and Green CMBS Notes WINTERGARTEN VARIETE: Creditors Meeting Slated for Oct. 22 WWB PROJEKTENTWICKLUNG: Claims Registration Period Ends Oct. 20 ZEITZER MALER: Claims Registration Period Ends Oct. 21 I C E L A N D BAUGUR GROUP: CEO Dismisses Administration Rumors LANDSBANKI ISLANDS: Straumur Cancels Share Purchase Agreement K A Z A K H S T A N AKM-TRADING LLP: Creditors Must File Claims by November 25 ANSHY & K LLP: Claims Deadline Slated for November 25 EKUS LLP: Claims Filing Period Ends November 21 FRMP-PAVLODAR: Creditors' Claims Due on November 25 GF CONSTRUCTION: Claims Registration Ends November 25 JARYK-PAGE LLP: Creditors Must File Claims by November 25 MARKET-PLUS LLP: Claims Deadline Slated for November 25 SHANYRAK FANANCIAL: Claims Filing Period Ends November 25 TAZA-EL LLP: Creditors' Claims Due on November 25 URAL CASPIE: Claims Registration Ends November 25 K Y R G Y Z S T A N BAI EMIR: Creditors Must File Claims by November 14 N E T H E R L A N D S EURAMAX INTERNATIONAL: Moody's Junks Corporate Family Rating R U S S I A KASKAD LLC: Voronezh Bankruptcy Hearing Set November 26 NOVUS-OIL CJSC: Creditor Must File Claims by November 3 PROMTEKS AVA: Creditors Must File Claims by November 26 RBC INFORMATION: S&P Cuts Credit Rating to B Over Liquidity Risks SIB-GOR-MASH OJSC: Creditors Must File Claims by November 26 SIBIR ENERGY: Denies Being Subject of Margin Calls STREZHEVOY-NEFTE-DOR-STROY: Claims Filing Period Ends Nov. 26 UST-KUBINSKIY LES-PROM-KHOZ: Claims Filing Period Ends Nov. 26 ZAP-SIB-REGION-GAZ: Court Starts Bankruptcy Supervision Process S P A I N SAEZ MERINO: Seeks Court Authority to Liquidate Business S W E D E N FORD MOTOR: Analysts Worried Firm May Run Out of Cash FORD MOTOR: CEO Mulally Says Bankruptcy Not an Option FORD MOTOR: Lewis Booth Will Replace Don Leclair as CFO FORD MOTOR: U.S. Chief Dismisses Rumor of Mazda Stake Sale FORD MOTOR: S&P Puts 'B-' Long-Term Rating on Negative CreditWatch SVITHOID TANKERS: Applies for Insolvent Liquidation S W I T Z E R L A N D ATELIER BLAZEJEWSKI: Creditors Must File Claims by Nov. 30 EO2 LLC: Deadline to File Proofs of Claim Set Dec. 12 GENERAL MOTORS: In Talks with Cerberus to Acquire Chrysler GENERAL MOTORS: Analysts Worried Firm May Run Out of Cash GENERAL MOTORS: Says Bankruptcy Not an Option GENERAL MOTORS: Market Woes Cue S&P to Put 'B-' Rating on WatchNeg R. FLACH ELEKTRONIK: Creditors Have Until Oct. 31 to File Claims RITTERSPORN JSC: Proofs of Claim Filing Deadline is Oct. 31 SPIESER AUTOHANDEL: Creditors' Proofs of Claim Due by Dec. 16 TAC JSC: Oct. 31 Set as Deadline to File Claims VESCOR JSC: Deadline to File Proofs of Claim Set Nov. 30 U K R A I N E ACHILLES-2005 LLC: Creditors Must File Claims by October 17 BROVARY RESEARCH-EXPERIMENTAL: Claims Filing Ends October 18 DEKALOG LLC: Creditors Must File Claims by October 18 DNIPRO-PRODUCT LLC: Creditors Must File Claims by October 18 KATKO LLC: Creditors Must File Claims by October 17 KLN LLC: Creditors Must File Claims by October 18 NADRA BANK: Fitch Lowers Individual Rating to 'E' from 'D/E' REGION WHOLESALE: Creditors Must File Claims by October 17 V.A.N. LLC: Creditors Must File Claims by October 17 * S&P Revises Outlooks on Three B-Rated Ukrainian Banks to Neg. * Fitch Says Ukrainian Banks Risks Hike as Global Turmoil Worsens * UKRAINE: Central Bank Moves to Stabilize Banking Sector U N I T E D K I N G D O M AMERICAN INTERNATIONAL: Uses Additional US$9BB From Gov't Loan AMERICAN INTERNATIONAL: Gov't to Name Trustees to Manage Stake AMERICAN INT'L: Aware of Potential Woes in Valuing Contracts APPROVED PROPERTIES: Claims Filing Period Ends November 14 BAUGUR GROUP: CEO Dismisses Administration Rumors BLUELA LTD: Brings in Liquidators from Vantis Business Recovery CHESS II: S&P Cuts Rating on Series 31 Notes to 'D' E.B. CROWHURST: Calls in Liquidators from Mazars EM FINANCIAL: Goes Into Administration; Buyer in the Sidelines F&C EVENT: To Propose Voluntary Liquidation in December 2008 HBOS PLC: Lloyds CEO Aims to Complete Rescue Deal Immediately HOUSE OF EUROPE: Moody's Cuts Ratings on 4 Classes of Notes to 'C' MICAP PLC: Petitions Court to Appoint Administrators PMI GROUP: Moody's Reviewing 'Ba1' Jr. Subordinated Debt Rating ROYAL BANK: Gets GBP20 Bil. Cash Injection from UK Government SEA VENTURES: Goes Into Administration * Fitch Lifts Support Floors on Eight UK Banks Over Gov't Support * European Corporate Securitizations Remain Stable, S&P Reports ********* ============= A U S T R I A ============= IMPULS LLC: Claims Registration Period Ends October 29 ------------------------------------------------------ Creditors owed money by LLC Impuls have until Oct. 29, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Stefan Langer Oelzeltgasse 4 1030 Vienna Austria Tel: 712 63 02, 713 61 92 Fax: DW 22 E-mail: kanzlei@kosesnik-langer.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:50 a.m. on Nov. 12, 2008, for the examination of claims at: The Trade Court of Vienna Room 1707 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Sept. 10, 2008, (Bankr. Case No. 2 S 113/08t). Dr. Annemarie Kosesnik-Wehrle represents Dr. Langer in the bankruptcy proceedings. K&B ISOLIERTECHNIK: Claims Registration Period Ends October 29 -------------------------------------------------------------- Creditors owed money by LLC K&B Isoliertechnik have until Oct. 29, 2008, to file written proofs of claim to the court-appointed estate administrator: Mag. Andrea Eisner Weyrgasse 8/7 1030 Vienna Austria Tel: 712 04 77 Fax: 712 04 77-12 E-mail: office@ra-eisner.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:00 a.m. on Nov. 12, 2008, for the examination of claims at: The Trade Court of Vienna Room 1705 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Sept. 17, 2008, (Bankr. Case No. 3 S 108/08i). SPECIAL CAR: Claims Registration Period Ends October 30 ------------------------------------------------------- Creditors owed money by LLC Special Car Center have until Oct. 30, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Johann Leitner Vogelweiderstrasse 9 4600 Wels Austria Tel: 07242/26651 Fax: 07242/26651-19 E-mail: office@hans-leitner.eu Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:20 a.m. on Nov. 6, 2008, for the examination of claims at: The Land Court of Wels 1st floor Maria Theresia Str. 12 Wels Austria Headquartered in Wels, Austria, the Debtor declared bankruptcy on Sept. 17, 2008, (Bankr. Case No. 20 S 113/08f). ============= B E L G I U M ============= FORTIS NV: To Focus on International Insurance; May Delist Shares ----------------------------------------------------------------- Fortis N.V. outlined Tuesday a leaner company focused on international insurance while its shares dropped around 78% to EUR1.22 after a six-day trading suspension, various reports say. The company is now valued at EUR2.86 billion or US$3.91 billion, merely a tenth of its value in September. Reports relate that at a conference call, chief executive officer, Filip Dierckx, said the company's strategy and structure after its "metamorphosis" was still to be decided. He added that "[a]ll options are open." With the dwindling value of the company, they are considering to delist Fortis from Brussels and Amsterdam, the reports quote Mr. Dierckx as stating. As reported by the Troubled Company Reporter-Europe on Oct. 7, 2008, Fortis announced that the Belgian government has acquired the remaining share (50% + one share) of Fortis Bank SA/NV. The Belgian government reached an agreement with BNP Paribas on the subsequent transfer of a majority interest in Fortis Bank SA/NV. Furthermore, Fortis announced that BNP Paribas will acquire 100% of Fortis Insurance Belgium. The Fortis Board of Directors approved these transactions. The deals, the reports state, left Fortis with only its international insurance business and a 66% stake in a EUR10.4 billion portfolio of structured credit products. Fortis said this portfolio was marked at 57% of par, lower than some analysts had expected. About Fortis N.V. Headquartered in Brussels, Belgium, Fortis N.V. -- http://www.fortis.com/-- is an international provider of banking and insurance services to personal, business and institutional customers. The Company operates in four core businesses: Retail Banking, Asset Management and Private Banking, Merchant Banking and Insurance. The Company delivers a package of financial products and services through its own channels and via intermediaries and other partners. In May 2007, Fortis N.V. finalized the acquisition of a 50.45% stake in Pacific Century Insurance Holdings Limited. As of June 15, 2007, the Company had acquired a 98.59% stake in Pacific Century Insurance Holdings Limited. In July 2008, the Company sold International Asset Management Limited (IAM). * * * As reported by the Troubled Company Reporter on Oct. 9, 2008, Moody's Investors Service downgraded Fortis SA/NV and Fortis N.V. long term issuer ratings to Baa2 from Baa1, and the ratings were placed under review for possible downgrade. Debt ratings benefiting from subordinated and preferred guarantees from the joint holding companies were downgraded to Baa3 and Ba1 respectively. Certain securities benefiting from joint and several guarantees from the holding companies and Fortis ASR Levensverzkering N.V. were confirmed at Baa3 with a developing outlook. Moody's also downgraded the insurance financial strength rating of Fortis Insurance Company (Asia) Ltd (FICA) to Baa1 from A3, and the backed senior unsecured debt of Fortis Capital (Asia) Ltd, a wholly-owned subsidiary of FICA, to Baa2 from Baa1. These ratings now carry a developing outlook. The Group's CP rating was affirmed at P-2 and placed under review for possible downgrade. FORTIS NV: Bank Unit Not Sold to Deutsche Bank, Dutch Finance Says ------------------------------------------------------------------ Reuters writes that the Dutch Finance Ministry has denied a report that Deutsche Bank may buy Fortis Bank Nederland instead of ABN AMRO's Dutch operations, a deal put on hold by the nationalization of Fortis's Dutch holdings. Reuters notes the Dutch newspaper Telgraaf reported on Friday, without naming sources, that the Dutch central bank (DNB) was backing the alternative deal after it halted Fortis's sale of EUR709 million (US$970 million) worth of Dutch ABN AMRO assets to Deutsche Bank last week. Fortis needed to sell some operations to meet European Commission antitrust demands after buying ABN AMRO last year. The Dutch Finance Ministry, according to the report, said no talks were being held with any party to sell Fortis' Dutch operations. Deutsche Bank did not immediately comment, and ABN declined to comment on the report, Reuters says. To comply with EC's antitrust demands, Fortis agreed to the sale of two units servicing large corporate clients, 13 commercial advisory branches for medium-sized clients, parts of Hollandsche Bank Unie N.V. and factoring services company IFN Finance, Reuters notes. Telgraaf said the alternative deal being discussed could see those businesses remain part of ABN AMRO instead, with Deutsche Bank getting Fortis's Dutch operations, which are smaller but include retail branches, Reuters relates. Price details were not disclosed. As reported by the Troubled Company Reporter-Europe on Oct. 7, 2008, Fortis announced that the Belgian government acquired the remaining share (50% + one share) of Fortis Bank SA/NV. The Belgian government reached an agreement with BNP Paribas on the subsequent transfer of a majority interest in Fortis Bank SA/NV. Furthermore, Fortis announced that BNP Paribas will acquire 100% of Fortis Insurance Belgium. The Fortis Board of Directors approved these transactions. The proceeds from the sale, announced on Oct. 3, 2008, of the Dutch activities to the Dutch State for EUR16.8 billion have been allocated. Reuters recalls that the DNB halted Fortis' deal with Deutsche Bank on September 30. Fortis, as cited by Reuters, said the move was due to "exceptional circumstances on international financial markets, the uncertainty with regard to the future shareholder in ABN AMRO Bank, and the implications of this uncertainty for all parties involved." About Fortis N.V. Headquartered in Brussels, Belgium, Fortis N.V. -- http://www.fortis.com/-- is an international provider of banking and insurance services to personal, business and institutional customers. The Company operates in four core businesses: Retail Banking, Asset Management and Private Banking, Merchant Banking and Insurance. The Company delivers a package of financial products and services through its own channels and via intermediaries and other partners. In May 2007, Fortis N.V. finalized the acquisition of a 50.45% stake in Pacific Century Insurance Holdings Limited. As of June 15, 2007, the Company had acquired a 98.59% stake in Pacific Century Insurance Holdings Limited. In July 2008, the Company sold International Asset Management Limited (IAM). * * * As reported by the Troubled Company Reporter on Oct. 9, 2008, Moody's Investors Service has downgraded Fortis SA/NV and Fortis N.V. long term issuer ratings to Baa2 from Baa1, and the ratings were placed under review for possible downgrade. Debt ratings benefiting from subordinated and preferred guarantees from the joint holding companies were downgraded to Baa3 and Ba1 respectively. Certain securities benefiting from joint and several guarantees from the holding companies and Fortis ASR Levensverzkering N.V. were confirmed at Baa3 with a developing outlook. Moody's also downgraded the insurance financial strength rating of Fortis Insurance Company (Asia) Ltd (FICA) to Baa1 from A3, and the backed senior unsecured debt of Fortis Capital (Asia) Ltd, a wholly-owned subsidiary of FICA, to Baa2 from Baa1. These ratings now carry a developing outlook. The Group's CP rating was affirmed at P-2 and placed under review for possible downgrade. ============= D E N M A R K ============= * EU Commission Approves Danish State Support Scheme for Banks -------------------------------------------------------------- The European Commission has approved under EC Treaty state aid rules a Danish scheme aimed at restoring confidence in the Danish financial markets in order to remedy a serious disturbance in the economy of Denmark. The scheme would provide liquidity facilities for banks operating in Denmark and protect depositors and ordinary creditors in case of insolvency. The Danish authorities notified the measure on October 8 and it was approved within two days by the Commission under a new simplified procedure for emergency rescue measures. The Commission found the scheme to be compatible with EU state aid rules because it is the most appropriate means to address the risk of a severe disturbance in the Danish economy, while keeping potential distortions of competition to a minimum through effective safeguard mechanisms. The Commission took into particular account that the guarantee scheme is limited to fundamentally sound financial institutions while insolvent banks need to be immediately unwound, that it is open to all banks established in Denmark but that it requires a significant financial contribution which ensures that an adequate premium is paid for the guarantee. Moreover, the scheme ensures that the participating banks can neither on an individual nor on an aggregate level significantly expand their activities, as measured against established benchmarks The scheme will be remain in force for two years. Competition Commissioner Neelie Kroes said: "The Danish scheme, following the changes I requested, is an excellent example of the type of intervention that can strengthen financial markets, without making the situation worse in other countries. Excellent co-operation with Denmark, our new simplified adoption procedure for rescue measures and a lot of hard work mean that we have been able to contribute to and approve a good example of how to support banks in the current financial turmoil in record time." The Danish authorities notified a support scheme on October 8, designed to stabilize the Danish financial markets through two different measures: * a guarantee on claims by depositors and ordinary creditors (of unsecured and unsubordinated debt), * a legally established company to wind up banks that do not fulfill statutory solvency requirements and for which no viable private solution could be achieved. The measures would be financed by private contributions through Det Private Beredskap (DPB), the Danish Contingency Association. DPB would pay an annual premium over two years of DKK15 billion (around EUR2 billion. In addition it has to put up DKK10 billion (around EUR1.3 billion) to cover losses in the winding-up company in any event, and would cover additional losses of up to DKK10 billion, once the first DKK 25 billion have been spent. Any losses exceeding these contributions would be taken over by the State. The Commission concluded that the measures were in line with the EU state aid rules (Article 87(3)(b) of the EC Treaty), because they constituted an appropriate, necessary and proportionate means to remedy a serious disturbance in the Danish economy. A special feature of the scheme is that it is limited to limited to fundamentally sound financial institutions that are affected by the current liquidity crises. It aims at overcoming the current international market failure where even such fundamentally sound financial institutions have problems to obtain liquidity. By ensuring lenders that they will be repaid confidence in the interbanking market shall be re-established. Moreover, the scheme is open to all banks established in Denmark. The banks would pay an appropriate premium to remunerate the debt guarantee. The State support is kept to a minimum through a high private participation and the system might even be wholly self- financing, as the State would cover only losses that occur in excess of the significant financing of DPB which is equal to 2 % of the GDP of Denmark. Moreover, participating banks would not be allowed to expand their activities but would have to adopt a cautious strategy and strengthen their balance sheets, under the monitoring of a newly established the Financial Surveillance Authority. This is ensured not only regarding the individual banks but also at an aggregate level and will be measured against concrete, well-established benchmarks. These safeguards would ensure that potential distortions of competition are minimized and that the beneficiaries receive only the aid that is strictly necessary to overcome the difficulty. A side effect of the scheme is that once a bank became insolvent, it would be mandatory to wind it up. It is in this case that the creditor guarantee would be drawn. To wind up the bank a private solution would have to be sought before committing additional state resources. Where this was not possible, the bank would have to be liquidated whereas the banks could be sold in parts in an open, unconditional and non-discriminatory manner. If the bank was of a significant size, this would need to be individually notified to the Commission Finally, the Danish authorities have committed to notify the Commission in due time if they seek a prolongation of the scheme. Moreover, they will review the functioning of the scheme on a bi- annual basis and therefore provide the Commission with half-yearly reports. =========== F R A N C E =========== NOYON: Goes Into Administration ------------------------------- Noyon has gone into administration for an initial period of six months following a constant reduction in turnover, Stuart Todd of just-style.com reports. Noyon, the report relates, blamed its financial difficulties on the slide in consumer purchasing power in the Europe and the US as it hit demand for textile goods. The report adds the company implemented a series of restructuring programs in response to fierce competition in Asia. In 2007, the company racked up losses of EUR2.8 million (US$3.83 million) on a turnover of EUR42 million compared to losses of EUR1.4 million on turnover of EUR53 million in 2006, the report discloses. The company's turnover four years ago had totaled EUR70 million (US$95.84 million), the report notes. Based in Calais, France, Noyon manufactures lace for lingerie and dresses. It was founded in 1919. WINDEREMRE XII: S&P Lowers Ratings on Class F and G Notes to BB --------------------------------------------------------------- Standard & Poor's Ratings Services has lowered and kept on CreditWatch with negative implications its ratings on the class F and G notes issued by Windermere XII FCC. At the same time, S&P has kept the class A, B, C, D, and E notes on CreditWatch negative. All classes of notes in this transaction were initially placed on CreditWatch negative on Sept. 17, following recent rating actions on Lehman Brothers Inc. and related entities. The rating actions follow an initial review of the implications of the Lehman involvement as a hedging counterparty and sponsor in this transaction, and the general collateral performance. This is a single-loan transaction secured by an office property� Coeur Defense�located in La Defense, France. This modern, grade A complex comprising two high-rise towers (39 floors) and three additional buildings (over nine floors) provides a total of 159,000 sq. m. of office and 18,000 sq m. of ancillary accommodation. To hedge the interest rate risk resulting from floating-rate interest obligations under the loan which was securitized, the borrower had entered into a cap agreement with Lehman Brothers International (Europe) guaranteed by Lehman Brothers Holding, Inc. The premiums were fully paid at closing. Following the insolvency of the hedging provider and the guarantor, it is unclear whether and at what interest rate level the borrower may be able to secure a new hedging arrangement. Any new hedging arrangement or its absence will have a direct effect on the borrower's ability to fulfill its payment obligations under the loan. In addition, certain excess cash flow was expected to be available to build up reserves to mitigate potential shortfalls during key periods of the loan term, when a potentially significant number of leases could break or expire. In accordance with the six-monthly revaluation of the property, an updated report (by Cushman & Wakefield) as of September 2008 shows a current market value of EUR1.77 billion. As a result, the whole loan-to-value (LTV) ratio is 92.5% and the senior loan LTV ratio is 85.8%, resulting in a breach of the whole loan LTV ratio covenant of 80%. A loan event of default can only be triggered if the breach continues for two consecutive quarters and will not be remedied within three months. With the outlook for commercial property values continuing to deteriorate in France, S&P believes that the current LTV ratio breach is likely to continue and potentially increase further. S&P also considers that it will be challenging for the borrower to cure this breach given the deteriorating cash flow generated by the asset, because of the following developments: -� Approximately 9% by letting area has remained vacant since closing; -� Genegis, the largest tenant in the property (accounting for 18%), has exercised a break option as of March 2009 for a part of its accommodation equating to EUR8 million in rent (or 8.2% of the total passing rent); -� Oracle, which accounts for 5.8% of the passing rent or EUR5.7 million, left the property in September 2008; and -� Microsoft, which accounts for 2.7% of the passing rent or EUR2.6 million, has also indicated that it will leave at lease expiry in June 2009. In addition, leases representing about 59.6% of the passing rent, or EUR58 million a year, expire or have break options in 2010. These factors have significantly increased the likelihood of a loan default either because of a nonpayment or a covenant breach. S&P therefore has concerns regarding both the ability to pay timely interest and the ability to repay the whole loan principal balance at loan maturity in July 2012, or through enforcement. S&P will continue to closely monitor and evaluate information available on the loan and the performance of the asset securing this transaction. S&P will also analyze the effect any new hedging arrangements may have on the ability to pay interest due under the loan and to build up mitigating reserves. Windermere XII FCC -- EUR1.519 Billion Commercial Mortgage-Backed Floating-Rate Notes Ratings Lowered And Kept On CreditWatch Negative: Class To From ----- -- ---- F BB/Watch Neg BBB/Watch Neg G BB/Watch Neg BBB/Watch Neg Ratings Kept On CreditWatch Negative: A AAA/Watch Neg B AAA/Watch Neg C AA/Watch Neg D A/Watch Neg E A/Watch Neg ============= G E R M A N Y ============= ALLGEMEINE BAU-VERWALTUNGS: Creditors Meeting Slated for Oct. 22 ---------------------------------------------------------------- The court-appointed insolvency manager for AVM Allgemeine Bau- Verwaltungs- und Management-GmbH & Co. KapHag Fonds Vierzehn Wohnen am Schloss Charlottenburg KG, Dr. Dirk Wittkowski, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 11:45 a.m. on Oct. 22, 2008. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg Second Stock Hall 218 Amtsgerichtsplatz 1 14057 Berlin Germany The Court will also verify the claims set out in the insolvency manager's report at 11:30 a.m. on Jan. 28, 2008, at the same venue. Creditors have until Charlottenburg to register their claims with the court-appointed insolvency manager. The insolvency manager can be reached at: Dr. Dirk Wittkowski Kirchblick 11 14129 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against AVM Allgemeine Bau-Verwaltungs- und Management-GmbH & Co. KapHag Fonds Vierzehn Wohnen am Schloss Charlottenburg KG on Sept. 5, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: AVM Allgemeine Bau-Verwaltungs- und Management-GmbH & Co. KapHag Fonds Vierzehn Wohnen am Schloss Charlottenburg KG Oranienstrasse 196 10999 Berlin Germany CAMPA BIODIESEL: Creditors' Meeting Slated for October 21 --------------------------------------------------------- The court-appointed insolvency manager for Campa Biodiesel GmbH & Co. KG, Bruno Fraas will present his first report on the Company's insolvency proceedings at a creditors' meeting at 9:15 a.m. on Oct. 21, 2008. The meeting of creditors and other interested parties will be held at: The District Court of Wuerzburg Meeting Hall 2 Second Stock Virchowstr. 14 Wuerzburg Germany The Court will also verify the claims set out in the insolvency manager's report at 8:30 a.m. on Nov. 25, 2008, at the same venue. Creditors have until Oct. 30, 2008, to register their claims with the court-appointed insolvency manager. The insolvency manager can be reached at: Bruno Fraas Heinestr. 7b 97070 Wuerzburg Germany Tel: 0931/359800 The District Court of Wuerzburg opened bankruptcy proceedings against Campa Biodiesel GmbH & Co. KG on Sept. 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Campa Biodiesel GmbH & Co. KG Jahnstr. 2 97199 Ochsenfurt Germany COUPONTIP VERWALTUNGS: Claims Registration Period Ends Oct. 22 -------------------------------------------------------------- Creditors of coupontip Verwaltungs GmbH have until Oct. 22, 2008, to register their claims with court-appointed insolvency manager Holger Bluemle. Creditors and other interested parties are encouraged to attend the meeting at 11:30 a.m. on Nov. 18, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Karlsruhe Hall IV First Floor Schlossplatz 23 76131 Karlsruhe Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Holger Bluemle Kriegsstr. 113 76135 Karlsruhe Germany Tel: (07 21) 91 95 70 The District Court of Karlsruhe opened bankruptcy proceedings against coupontip Verwaltungs GmbH on Sept. 5, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: coupontip Verwaltungs GmbH Attn: Annette Engelhardt, Manager Vichystr. 9 76646 Bruchsal Germany EPICEPT CORP: European Commission Okays Sale of Ceplene Drug ------------------------------------------------------------ EpiCept Corporation disclosed in a Securities and Exchange Commission filing that the European Commission has granted full marketing authorization on Ceplene (histamine dihydrochloride) for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia in first remission. The approval allows Ceplene to be marketed in the 27 member states of the European Union, as well as in Iceland, Liechtenstein and Norway. About EpiCept Corporation Based in Tarrytown, New York, EpiCept Corporation (NASDAQ:EPCT) -- http://www.epicept.com/-- is a specialty pharmaceutical company focused on the development of pharmaceutical products for the treatment of cancer and pain. The company has a portfolio of five product candidates in active stages of development. It includes an oncology product candidate submitted for European registration, two oncology compounds, a pain product candidate for the treatment of peripheral neuropathies and another pain product candidate for the treatment of acute back pain. The two wholly owned subsidiaries of the company are Maxim, based in San Diego, California, and EpiCept GmbH, based in Munich, Germany, which are engaged in research and development activities. Going Concern Doubt Deloitte & Touche LLP, in Parsippany, New Jersey, expressed substantial doubt about EpiCept Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and stockholders' deficit. The company disclosed in its Form 10-Q for the second quarter ended June 30, 2008, a net loss of US$7,765,000. EpiCept Corp.'s consolidated balance sheet at June 30, 2008, showed total assets of US$3,093,000, total liabilities of US$22,598,000, and a stockholders' deficit of US$19,505,000, compared to a deficit of US$14,177,000 at Dec. 31, 2007. The company said it expects to incur substantial net losses, in the aggregate and on a per share basis, for the foreseeable future as it attempts to market and sell Ceplene(R). "We are unable to predict the extent of these future net losses, or when we may attain profitability, if at all. These net losses, among other things, have had and will continue to have an adverse effect on our stockholders' equity. We anticipate that for the foreseeable future our ability to generate revenues and achieve profitability will be dependent on the successful commercialization of Ceplene(R). There is no assurance that we will be able to obtain or maintain governmental regulatory approvals to market Ceplene(R) in Europe. If we are unable to generate significant revenue from Ceplene(R), or attain profitability, we may not be able to sustain our operations." EPICEPT CORP: Plans to Raise US$50,000,000 By Issuing Securities -------------------------------------------------------------- EpiCept Corporation has filed a registration statement with the Securities and Exchange Commission filing to register an indeterminate number or amount of securities, as may from time to time be sold. The statement relates to US$50,000,000 worth of indeterminate number of: -- common stock at US$0.0001 par value; -- preferred stock at US$0.0001 par value; -- convertible debt securities; -- warrants; and -- units. EpiCept also filed a prospectus using a "shelf" registration process. Under this shelf registration process, the company may, from time to time, offer or sell the securities in one or more offerings up to a total amount of US$50,000,000. A copy of the share prospectus is available free of charge at: http://researcharchives.com/t/s?33c2 About EpiCept Corporation Based in Tarrytown, New York, EpiCept Corporation (NASDAQ:EPCT) -- http://www.epicept.com/-- is a specialty pharmaceutical company focused on the development of pharmaceutical products for the treatment of cancer and pain. The company has a portfolio of five product candidates in active stages of development. It includes an oncology product candidate submitted for European registration, two oncology compounds, a pain product candidate for the treatment of peripheral neuropathies and another pain product candidate for the treatment of acute back pain. The two wholly owned subsidiaries of the company are Maxim, based in San Diego, California, and EpiCept GmbH, based in Munich, Germany, which are engaged in research and development activities. Going Concern Doubt Deloitte & Touche LLP, in Parsippany, New Jersey, expressed substantial doubt about EpiCept Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and stockholders' deficit. The company disclosed in its Form 10-Q for the second quarter ended June 30, 2008, a net loss of US$7,765,000. EpiCept Corp.'s consolidated balance sheet at June 30, 2008, showed total assets of US$3,093,000, total liabilities of US$22,598,000, and a stockholders' deficit of US$19,505,000, compared to a deficit of US$14,177,000 at Dec. 31, 2007. The company said it expects to incur substantial net losses, in the aggregate and on a per share basis, for the foreseeable future as it attempts to market and sell Ceplene(R). "We are unable to predict the extent of these future net losses, or when we may attain profitability, if at all. These net losses, among other things, have had and will continue to have an adverse effect on our stockholders' equity. We anticipate that for the foreseeable future our ability to generate revenues and achieve profitability will be dependent on the successful commercialization of Ceplene(R). There is no assurance that we will be able to obtain or maintain governmental regulatory approvals to market Ceplene(R) in Europe. If we are unable to generate significant revenue from Ceplene(R), or attain profitability, we may not be able to sustain our operations." GROSSARTIGE NACHTE: Claims Registration Period Ends Oct. 21 ----------------------------------------------------------- Creditors of Grossartige Nachte GmbH have until Oct. 21, 2008, to register their claims with court-appointed insolvency manager Sabine Prager. Creditors and other interested parties are encouraged to attend the meeting at 10:10 a.m. on Nov. 11, 2008, at which time the insolvency manager will present her first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Munich Meeting Room 102 Infanteriestr. 5 80097 Munich Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Sabine Prager Nymphenburgerstr. 139 80636 Muenchen Germany Tel: 089/120260 Fax: 089/12026127 The District Court of Munich opened bankruptcy proceedings against Grossartige Nachte GmbH on Sept. 15, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Grossartige Nachte GmbH Leopoldstr. 69 80801 Muenchen Germany HYPO REAL: Denies Giving Wrong Information About Liquidity Needs ---------------------------------------------------------------- Hypo Real Estate dismissed a report that it gave misleading information about its liquidity needs while securing a government- led rescue package to address a refinancing squeeze, Christian Kraemer writes for Reuters. "The management of Hypo Real Estate Holding AG rejects accusations of deliberately giving wrong information about its liquidity requirements," a spokesman for HRE was quoted by Reuters as saying. As reported in the TCR-Europe, by end-September, HRE faced a liquidity crisis due to its short-term refinancing strategy as the crisis of confidence among banks worsened in mid-September 2008 following Lehman Brothers Holdings filing for bankruptcy protection. In a press release dated Oct. 6, 2008, HRE said the finance sector will grant the group an additional secured credit line of EUR15 billion. This is in addition to the EUR35 billion already offered jointly by the German Government and finance sector. HRE noted this increase became necessary as a result of the intensification of the financial crisis. The Government is providing a guarantee of up to EUR35 billion. About Hypo Real Estate Group Following the acquisition of DEPFA Bank plc in October 2007, Munich, Germany-based Hypo Real Estate Group �- http://www.hyporealestate.com/-- has evolved into one of the leading international financial services providers for commercial real estate lending, public finance and infrastructure finance. The Group, with total assets of EUR395 billion, 1,900 employees and offices across Europe, the Americas and Asia, consists of the non-operational listed Hypo Real Estate Holding AG and operational entities. Hypo Real Estate Bank International AG and Hypo Real Estate Bank AG conduct the international real estate financing business. DEPFA and DEPFA Deutsche Pfandbriefbank AG conduct the public sector and infrastructure finance business. HYPO REAL: Supervisory Board Chair Kurt F. Viermetz Steps Down -------------------------------------------------------------- With the Supervisory Board of Hypo Real Estate Holding AG having refilled key positions on the Management Board at the start of this week, the Chairman of the Supervisory Board, Kurt F. Viermetz, has abdicated his mandate as Chairman of the Supervisory Board. Mr. Viermetz stated: "With the replacements to the Management Board and the fundamental settlement of the liquidity support, my most urgent tasks have been fulfilled. I can now step down from the Supervisory Board in the knowledge that, despite the extraordinarily difficult state of the finance sector, the foundations for a sound new beginning have been laid." Next Monday already, Dr. Axel Wieandt as CEO and Dr. Kai Wilhelm Franzmeyer as Member of the Board and Treasurer, will begin their duties in the company. With the resignation of Mr. Viermetz, his former deputy on the Supervisory Board, Professor Dr. Klaus Pohle, will fill the position of Chairman on an interim basis. Professor Pohle stated: "Hypo Real Estate Group is very grateful to Kurt Viermetz. Like no other, he facilitated the company by his steady leadership and vast international experience from its difficult beginnings following the spin-off from HVB to become one of the leading global commercial real estate financing houses. Despite the crisis of recent weeks, his prudence and decisiveness contributed greatly to the company gaining the chance of a new start with the help of the German Government, the Central Bank and various financial institutes. The Supervisory Board and the shareholders of Hypo Real Estate Holding AG owe Mr. Viermetz their highest respect for his achievement and for his decision to leave the Chairmanship of the Supervisory Board in new hands." On behalf of Supervisory Board Member, Mr. J.C. Flowers, Professor Pohle stated: "The investors associated with me, and I myself, have the greatest respect for the achievements and enormous commitment of Kurt Viermetz on behalf of Hypo Real Estate Group. We thank him for his excellent co-operation." As reported in the TCR-Europe, by end-September, the group faced a liquidity crisis due to its short-term refinancing strategy as the crisis of confidence among banks worsened in mid-September 2008 following Lehman Brothers Holdings filing for bankruptcy protection. About Hypo Real Estate Group Following the acquisition of DEPFA Bank plc in October 2007, Munich, Germany-based Hypo Real Estate Group �- http://www.hyporealestate.com/-- has evolved into one of the leading international financial services providers for commercial real estate lending, public finance and infrastructure finance. The Group, with total assets of EUR395 billion, 1,900 employees and offices across Europe, the Americas and Asia, consists of the non-operational listed Hypo Real Estate Holding AG and operational entities. Hypo Real Estate Bank International AG and Hypo Real Estate Bank AG conduct the international real estate financing business. DEPFA and DEPFA Deutsche Pfandbriefbank AG conduct the public sector and infrastructure finance business. LEAR CORPORATION: Reduces 2008 Sales Outlook by US$1,000,000,000 ---------------------------------------------------------------- Lear Corp. disclosed that as a result of deteriorating and volatile industry and general economic conditions, it is reducing its full-year 2008 sales outlook from US$15 billion to approximately US$14 billion and now sees income before interest, other expense, income taxes, restructuring costs and other special items down about 20% from the previous guidance of US$550 million to US$600 million provided on July 29, 2008, based on current production estimates. Even with the lower sales and earnings forecast, Lear expects to generate positive free cash flow for the year. Rapidly declining North American vehicle sales and production generally, combined with a major shift in product mix to smaller passenger vehicles in the U.S., as well as slowing sales and lower production in Europe are the major factors impacting the company's financial outlook for the remainder of 2008. "Lear has been very pro-active in restructuring global operations and taking steps to maintain a strong liquidity position," said Bob Rossiter, Lear's chairman, chief executive officer and president. "As conditions have deteriorated, we have aggressively responded by taking actions to reduce our cost structure. As a result, we expect to generate positive free cash flow for the year. However, like all automotive suppliers, we are being adversely impacted by lower production volumes." Based in Southfield, Michigan, Lear Corporation (NYSE: LEA) -- http://www.lear.com/-- supplies automotive seating systems, electrical distribution systems and electronic products. Lear's world-class products are designed, engineered and manufactured by a diverse team of more than 90,000 employees at 236 facilities in 33 countries. Lear's headquarters are in Southfield, Michigan. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. * * * As reported in the Troubled Company Reporter on Sept. 30, 2008, Standard & Poor's Ratings Services has raised its issue-level rating on Lear Corp.'s US$1 billion senior secured term loan facility (US$988 million outstanding) to 'BB' from 'BB-' and revised the recovery rating to '1' from '2'. In addition, S&P lowered its issue-level ratings on Lear's senior unsecured notes to 'B' from 'B+' and revised the recovery rating to '5' from '4', indicating the expectation of modest recovery in the event of a payment default. PUTLITZER REKO: Claims Registration Period Ends Oct. 22 ------------------------------------------------------- Creditors of Putlitzer-REKO-Bau GmbH have until Oct. 22, 2008, to register their claims with court-appointed insolvency manager Michael Krause. Creditors and other interested parties are encouraged to attend the meeting at 8:00 a.m. on Nov. 21, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Neuruppin Hall 325 Karl-Marx-Strasse 18a 16816 Neuruppin Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Michael Krause Putlitzer Strasse 30 16928 Pritzwalk Germany The District Court of Neuruppin opened bankruptcy proceedings against Putlitzer-REKO-Bau GmbH on Aug. 22, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Putlitzer-REKO-Bau GmbH Attn: Thomas Noethling, Manager Mertensdorfer Weg 13 16949 Putlitz Germany SAN BAU: Claims Registration Period Ends October 20 --------------------------------------------------- Creditors of SAN Bau GmbH have until Oct. 20, 2008, to register their claims with court-appointed insolvency manager Axel Bierbach. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Dec. 1, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Munich Meeting Hall 102 Infanteriestr. 5 80097 Munich Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Axel Bierbach Schwanthaler Str. 32 80336 Munich Germany Tel: 089/54511-0 Fax: 089/54511444 The District Court of Munich opened bankruptcy proceedings against SAN Bau GmbH on Sept. 2, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: SAN Bau GmbH Attn: Yasin Sancak, Manager Meindlstr. 19 81373 Munich Germany SANDKULL BAUUNTERNEHMUNG: Claims Registration Ends Oct. 20 ---------------------------------------------------------- Creditors of Sandkull Bauunternehmung GmbH have until Oct. 20, 2008, to register their claims with court-appointed insolvency manager Dr. Ralf Sinz. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Nov. 25, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Aachen Meeting Hall D 1.409 First Floor Adalbertsteinweg 92 52070 Aachen Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Ralf Sinz Heissbergstr. 20-22 52066 Aachen Germany Tel: 02411605757 Fax: 02411605758 The District Court of Aachen opened bankruptcy proceedings against Sandkull Bauunternehmung GmbH on Aug. 27, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Sandkull Bauunternehmung GmbH Attn: Ralf Martin Barth, Manager Schroufstrasse 69 52078 Aachen Germany SCHATTNER OPTIK: Claims Registration Period Ends Oct. 22 -------------------------------------------------------- Creditors of Schattner Optik GmbH & Co. KG have until Oct. 22, 2008, to register their claims with court-appointed insolvency manager Paul Wieschemann. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Nov. 24, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Kaiserslautern Hall 11 Station Route 24 67655 Kaiserslautern Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Paul Wieschemann Flickerstal 2 67657 Kaiserslautern Germany Tel: 0631/341950 Fax: 0631/470269 The District Court of Kaiserslautern opened bankruptcy proceedings against Schattner Optik GmbH & Co. KG on Sept. 3, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Schattner Optik GmbH & Co. KG Attn: Schattner Optik Verwaltungs GmbH, Manager Marktstr. 16 67655 Kaiserslautern Germany SYSTEMPARTNER COMPUTERVERTRIEBS: Claims Filing Ends October 20 -------------------------------------------------------------- Creditors of Systempartner Computervertriebs GmbH have until Oct. 20, 2008, to register their claims with court-appointed insolvency manager Carola Damm. Creditors and other interested parties are encouraged to attend the meeting at 9:15 a.m. on Nov. 20, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Korbach Hall 39 Hauptgebaude Hagenstrasse 2 34497 Korbach Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Carola Damm RA'e Bohlig Hoehle und Kollegen Briloner Landstrasse 14 34497 Korbach Germany Tel: 05631-9509-70 Fax: 05631-9509-19 The District Court of Korbach opened bankruptcy proceedings against Systempartner Computervertriebs GmbH on Sept. 25, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Systempartner Computervertriebs GmbH Briloner Landstrasse 35A 34497 Korbach Germany TUI AG: Moody's Places B1 CFR on Review for Possible Downgrade -------------------------------------------------------------- Moody's Investors Service has placed the B1 Corporate Family Rating and the B3 senior unsecured and subordinated ratings of TUI AG on review for possible downgrade. The action follows the company's announcement that it intends to divest its Hapag-Lloyd shipping division to a consortium of German investors for a net consideration of about EUR3.3 billion, including the deconsolidation of about EUR1.3 billion in net debt. The transaction is expected to close in the first quarter of 2009. The rating action reflects the company's reduced business diversification following the planned sale of its shipping division, the uncertainties related to the use of proceeds, as well as the company's stated intention to pay a special dividend in 2009, which Moody's views as indicative of a shareholder- oriented policy when the company's metrics were already deemed weak for the current rating category. The acquisition of Hapag-Lloyd by third parties will be carried out through a bidco, in which TUI AG will reinvest EUR700 million for a one third stake in Hapag-Lloyd. The review reflects current uncertainty about the use of proceeds and the size of the company's potential special dividend which is expected to be announced in the first quarter of 2009. According to the terms of TUI AG's bonds, the proceeds can either be reinvested within 360 days or otherwise must be used to pay down indebtedness. Moody's notes that the company is considering to acquire the outstanding shares that it does not own in its remaining subsidiary, TUI Travel plc, in which it currently owns 41% of the shares. If the company were to regain control of a majority ownership of TUI Travel plc, this would reduce any debt repayment at the group level insofar as the funds are reinvested, but would in turn give the group full access to TUI Travel's cash flows as well as its cash balance going forward, which Moody's had not previously factored into our analysis of liquidity for TUI AG. Moody's further notes that under this scenario, TUI Travel would once again be bound by the restrictions of debt at the subsidiary level by the terms of TUI AG's bonds, thus preventing further structural subordination for TUI AG's bonds. Should the group opt to pay down debt, Moody's notes that the group would retain only a minority stake in both its tourism and shipping divisions, such that its cash earnings would be limited to dividends from those entities as well as the hotel division. The review will therefore focus on: i) the use of proceeds from the transaction; ii) the size of the expected special dividend; and iii) the company's overall operating performance, in light of the difficult trading conditions and its greater exposure to the tourism sector going forward. Moody's views the transaction positively from a liquidity perspective under the possible scenarios mentioned above. In case of no reinvestment, Moody's notes that the current cash balance at the holding level of EUR1.2 billion would be supplemented by the net inflow of about EUR2 billion from the divestment, as well as the remaining inter-company loan repayments from TUI Travel plc, which currently amount to about EUR1 billion and are repayable at the latest by January 2011. The company also expects to receive about EUR900 million from ship financing prior to the disposal of Hapag-Lloyd. Moody's nevertheless notes that the holding company has substantial debt repayments coming due, notably bonds maturing every year until 2013. TUI, headquartered in Hanover, Germany, is Europe's largest integrated tourism group and a leading provider of container shipping services with reported revenues and underlying EBITA of EUR21.9 billion and EUR616 million, respectively, in 2007. WINDERMERE: S&P Cuts Ratings on XIV, VIII, XI and Green CMBS Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services has lowered and kept on CreditWatch with negative implications its ratings on several classes of notes issued by Windermere XIV CMBS Ltd., Windermere VIII CMBS PLC, Windermere XI CMBS PLC, and Portfolio Green German CMBS GmbH. All ratings on all other classes of notes in these transactions remain on CreditWatch negative. Lehman Brothers Inc. entities are involved in a number European commercial mortgage-backed securities (CMBS) transactions as hedge counterparty, seller, tenant, and sponsor. On Sept. 17, S&P placed almost all tranches in 15 CMBS transactions on CreditWatch negative. The rating actions are a result of concerns that defaults on swap arrangements (if any) could cause potential losses on CMBS notes. There is a significant reliance in European CMBS on swap arrangements at the issuer level because most borrower loans are fixed-rate obligations, whereas issuer obligations under the notes are floating-rate. Without swaps in place to fund the difference (if any) between fixed-rate payments received by it and floating- rate payments due by it, the issuer could be exposed to a risk of shortfall in amounts available to pay the interest due under the notes. Lehman entities are swap counterparties in 12 of these transactions. S&P understands that the trustees are in active discussion with noteholders and that a range of options are being implemented or being put to noteholders for a decision to resolve the issues that are created by an insolvent swap counterparty at the issuer level. However, there is still uncertainty as to whether replacement arrangements will be implemented by the next interest payment dates (IPDs)�later in October for most of the transactions. In view of the importance of the issuer-level swap arrangements, S&P has considered the effect for 11 of the transactions of nonpayment by Lehman entities of their swap obligations at the next IPD. Assuming full payment by borrowers of their loan-level obligations (fixed or floating) and on the basis of expected interest rates and potential interest rate movements, S&P considers that the issuer may not have sufficient funds to cover all interest payments due under notes on the next IPD in some of the transactions. Assuming that liquidity is then drawn to cover shortfalls, S&P considers that these drawings may not be recoverable from other sources (such as excess cash) and may result ultimately in principal losses to the notes on which it has taken the rating actions. The different levels of downgrades are the result of the severity of the ultimate losses that S&P foresees for the particular class of notes, the complexity of the underlying transaction arrangements, the visibility (or lack thereof) of new swap arrangements, and the liquidity arrangements that differ across the transactions. In S&P's analysis of the effect of nonpayment under the swaps on the next IPD, S&P also considered break-even swap rates for each class of notes. In light of the current swift changes in interest rates, S&P will closely monitor the progress of arrangements being implemented to resolve the risks posed by nonperformance under the swaps. S&P is also considering the implications for the borrower- level swaps to which Lehman entities are counterparty and it continues to analyze the implications of Lehman's nonperformance of its obligations across the transactions in its other capacities. Further rating actions may result as S&P gets greater visibility on the range of issues. All notes therefore remain on CreditWatch negative in the transactions on which S&P has taken action and on the remaining transactions, as: -� FIP Funding S.r.l.; -� Imser Securitization 2 S.r.l.; -� Windermere VII FCC; -� Windermere IX CMBS (Multifamily) S.A.; -� Windermere X CMBS Ltd.; -� Canary Wharf Finance II PLC; -� Broadgate Financing PLC; -� Diversity Funding No. 1 Ltd.; -� Excalibur Funding No. 1 PLC; and -� Paris Prime Commercial Real Estate FCC. Lehman is not hedge counterparty for Canary Wharf Finance II, Broadgate Financing, Diversity Funding No. 1, and Opera Finance (Univ-Inest). Finally, for reasons in addition to the swap issues discussed here, S&P lowered the ratings on the class F and G notes in Windermere XII FCC to BB/Watch Neg from BBB/Watch Neg. Ratings Lowered And Kept On CreditWatch Negative: Windermere XIV CMBS Ltd. -- EUR1.12 Billion Commercial Mortgage-Backed Floating-Rate Notes Class To From ----- -- ---- F BB/Watch Neg BBB-/Watch Neg Windermere VIII CMBS PLC -- GBP1,037.79 Million Commercial Mortgage-Backed Floating-Rate Notes Class To From ----- -- ----- E BB-/Watch Neg BB/Watch Neg Windermere XI CMBS PLC -- GBP707.767 Million Commercial Mortgage-Backed Floating-Rate Notes Class To From ----- -- ---- E B/Watch Neg BB/Watch Neg Portfolio GREEN German CMBS GmbH: -- EUR585.411 Million Secured Floating-Rate Notes Class To From ----- -- ---- E BB-/Watch Neg BB/Watch Neg F B-/Watch Neg B/Watch Neg G B-/Watch Neg B/Watch Neg WINTERGARTEN VARIETE: Creditors Meeting Slated for Oct. 22 ---------------------------------------------------------- The court-appointed insolvency manager for Wintergarten Variete Theater Betriebsgesellschaft mbH, Dr. Petra Hilgers, will present her first report on the Company's insolvency proceedings at a creditors' meeting at 10:40 a.m. on Oct. 22, 2008. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg Second Stock Hall 218 Amtsgerichtsplatz 1 14057 Berlin Germany The Court will also verify the claims set out in the insolvency manager's report at 10:15 a.m. on Jan. 28, 2009, at the same venue. Creditors have until Nov. 28, 2008, to register their claims with the court-appointed insolvency manager. The insolvency manager can be reached at: Dr. Petra Hilgers Goethestr. 85 10623 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against Wintergarten Variete Theater Betriebsgesellschaft mbH on Sept. 24, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Wintergarten Variete Theater Betriebsgesellschaft mbH Potsdamer Strasse 96 10785 Berlin Germany WWB PROJEKTENTWICKLUNG: Claims Registration Period Ends Oct. 20 --------------------------------------------------------------- Creditors of WWB Projektentwicklung und Bau GmbH have until Oct. 20, 2008, to register their claims with court-appointed insolvency manager Hubertus Freiherr Erffa von. Creditors and other interested parties are encouraged to attend the meeting at 9:45 a.m. on Nov. 18, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Leipzig Hall 056 Ground Floor Enforcement Court Bernhard Goering Strasse 64 04275 Leipzig Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Hubertus Freiherr Erffa von Eilenburger Str. 1A 04317 Leipzig Germany The District Court of Leipzig opened bankruptcy proceedings against WWB Projektentwicklung und Bau GmbH on Sept. 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: WWB Projektentwicklung und Bau GmbH St.-Georgen-Strasse 19 04720 Doebeln Germany ZEITZER MALER: Claims Registration Period Ends Oct. 21 ------------------------------------------------------ Creditors of Zeitzer Maler und Korrosionsschutz GmbH have until Oct. 21, 2008, to register their claims with court-appointed insolvency manager Dr. Thilo Korn LL.M.. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Nov. 18, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Halle (Saal) Hall 1.043 Judicial Center Thueringer Str. 16 06112 Halle Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Thilo Korn LL.M. Karl-Heine-Str. 16 04229 Leipzig Germany Tel: 0341/984110 Fax: 0341/9841111 The District Court of Halle (Saal) opened bankruptcy proceedings against Zeitzer Maler und Korrosionsschutz GmbH on Aug. 29, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Zeitzer Maler und Korrosionsschutz GmbH Attn: Gerd Machtig, Manager Theodor-Arnold-Promenade 26 06712 Zeitz Germany ============= I C E L A N D ============= BAUGUR GROUP: CEO Dismisses Administration Rumors ------------------------------------------------- Baugur Group dismissed media speculation that it was considering placing its UK holding company into administration, just-style.com says. On Monday, the Daily Telegraph reported that Baugur is exploring various options for the company, including a possible administration, and that it entered talks with advisers BDO Stoy Hayward. Baugur CEO Gunnar Sigurdsson however told just-style "We would like to make clear that Baugur has not appointed any advisers," adding "We continue to monitor the situation in Iceland, where possible maintain a dialogue with the banks and manage and plan our business accordingly. We have no plans to place our UK business into administration." The group, just-style.com relates, is currently in talks with retail entrepreneur Sir Philip Green over a possible investment in its UK portfolio following the collapse of Icelandic banking system last week. On Sunday, Baugur chairman Jon Asgeir Johannesson warned that the group's investment could "fall one after another" unless it completed a deal with Mr. Green to buy Baugur's debt from the Icelandic banks and the Government, the Daily Telegraph noted. Baugur Group -- http://baugur.com/-- is an international investment company in the retail and fashion sectors in the UK, the USA and Scandinavia. Companies related to Baugur employ some 53,000 people worldwide in over 3,700 stores with a total turnover of GBP5.0 billion. Among Baugur's principal investments are the supermarket chain Iceland, the toy retailer Hamleys, the jewellery chain Goldsmiths, fashion chains Whistles and Jane Norman, fashion company Mosaic Fashions, renowned UK department store chain, House of Fraser, the famous Danish department store chain Magasin du Nord and Illum, one of Denmark's largest department stores. LANDSBANKI ISLANDS: Straumur Cancels Share Purchase Agreement ------------------------------------------------------------- Straumur-Burdaras Investment Bank hf. has canceled its share purchase agreement with Landsbanki Islands hf. As announced on Oct. 1, 2008, Straumur and Landsbanki signed an agreement whereby Straumur acquired, subject to the approval of relevant regulatory and competition authorities, the majority of Landsbanki's overseas corporate finance and brokerage platforms for a consideration of EUR380 million. The agreement applied to 100% of Landsbanki Securities (UK) Ltd and Landsbanki Kepler, as well as Landsbanki's 84% stake in Merrion Landsbanki. On Oct. 7, 2008, Landsbanki announced that the Icelandic Financial Services Authority (FME) had decided to take over the powers invested in Landsbanki's shareholders meeting and Landsbanki's Board of Directors. Furthermore, that the FME had appointed a receivership committee which had assumed the role of Landsbanki's Board of Directors with immediate effect. Furthermore, UK authorities announced on Oct. 8, 2008, that they had taken steps to freeze assets of Landsbanki in the UK. Staumur said for these reasons, it has become clear that Landsbanki will not be in a position to fulfill its obligations under the share purchase agreement. About Straumur Headquartered in Reykjavik, Iceland, Straumur-Burdaras Investment Bank hf. -- http://www.straumur.net-- offers a complete range of integrated financial services focusing on small and medium sized companies, institutional investors and individuals. The services provided include capital markets, corporate finance, debt finance, and asset management. Straumur is Iceland's largest pure-play investment bank. The Bank had total assets of EUR6,201 million as at the end of Q2 2008. Through organic growth and strategic acquisitions, the Bank has established operations in ten countries including the UK, Denmark, Sweden, Finland and the Czech Republic and now employs 520 people. About Landsbanki Headquartered in Reykjavik, Iceland, Landsbanki Islands hf. -- http://www.landsbanki.is-- is engaged in the provision of retail, corporate an investment banking services. The Bank's product range includes financial products and services, such as specialty insurance and real estate financing, for both corporate and private clients. It is also operational through a number of subsidiaries, including Heritable Bank Ltd, operating consultancy and financing services for residential development; Landsbanki Holdings Europe SA, a Luxembourg-based holding company providing banking services; Landsbanki Guernsey Ltd, offering retail banking; Landsbanki Securities (UK) Holdings plc, engaged in the provision of stockbrokers and financial services; Landsvaki hf, an operation company for mutual funds; Verdbrefun hf, a securitization company; Landsbankinn eignarhaldsfelag hf, a real estate company, and others. * * * As reported in the TCR-Europe on Oct. 10, 2008, Moody's Investors Service has downgraded the bank financial strength rating (BFSR) of Landsbanki Islands hf to E from C-, its long-term deposit ratings to Caa1 from A2 and its senior unsecured ratings to Caa2 from A2. Consequently, the bank's Prime-1 short-term rating was downgraded to Not-Prime. In addition, the bank's subordinated, junior subordinated and preferred stock ratings were downgraded to C. The outlook on all ratings is developing. At the same time, Fitch Ratings has downgraded the Long-term Issuer Default ratings of Glitnir Banki hf. and Landsbanki Islands to 'B' from 'BBB-' and 'BBB' respectively, and that of Straumur Burduras Investment Bank to 'BB-' from 'BB+'. The ratings of Kaupthing Bank hf. are under review. This rating action follows the announcement of legislative measures providing for broad authority to Icelandic authorities to intervene in the Icelandic financial system and the statement that Landsbanki has been placed in receivership, and reflects Fitch's view that both the ability and propensity of the Icelandic authorities to support the Icelandic banking system are becoming increasingly compromised. The support rating floor for the major Icelandic banks is now 'B'. Both Glitnir, following the acquisition by the Icelandic authorities last month of a 75% stake, and Landsbanki, which was placed in receivership, are now at their support rating floor. Glitnir's Individual rating of 'F' is affirmed and Landsbanki's Individual rating has been downgraded to 'F' from 'C' to reflect the receivership arrangement. =================== K A Z A K H S T A N =================== AKM-TRADING LLP: Creditors Must File Claims by November 25 ---------------------------------------------------------- LLP AKM-Trading has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP AKM-Trading Markov Str. 43 Almaty Kazakhstan ANSHY & K LLP: Claims Deadline Slated for November 25 ----------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda has declared LLP Anshy & K insolvent. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Karaganda Jambyl Str. 9 Karaganda Kazakhstan EKUS LLP: Claims Filing Period Ends November 21 ----------------------------------------------- The Specialized Inter-Regional Economic Court of Mangistau has declared LLP Ekus insolvent on Sept. 16, 2008. Creditors have until Nov. 21, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Mangistau Building of Former Kindergarten 51 Micro District 27 Aktau Mangistau Kazakhstan FRMP-PAVLODAR: Creditors' Claims Due on November 25 --------------------------------------------------- LLP Microcredit Organization FRMP-Pavlodar has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP Microcredit Organization FRMP-Pavlodar Lenin Str. 119 140000, Pavlodar Kazakhstan GF CONSTRUCTION: Claims Registration Ends November 25 ----------------------------------------------------- LLP Construction Company GF Construction has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP Construction Company GF Construction Mametov Str. 57 Birlik Talgarsky District 041600, Almaty Kazakhstan JARYK-PAGE LLP: Creditors Must File Claims by November 25 --------------------------------------------------------- The Specialized Inter-Regional Economic Court of South Kazakhstan has declared LLP Jaryk-Page insolvent on Sept. 19, 2008. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of South Kazakhstan Ilyaev Str. 24 Shymkent South Kazakhstan Kazakhstan Tel: 8 (7252) 53-48-34, 54-02-36 MARKET-PLUS LLP: Claims Deadline Slated for November 25 ------------------------------------------------------- The Specialized Inter-Regional Economic Court of South Kazakhstan has declared LLP Market-Plus insolvent on Sept. 19, 2008. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of South Kazakhstan Ilyaev Str. 24 Shymkent South Kazakhstan Kazakhstan Tel: 8 (7252) 53-48-34, 54-02-36 SHANYRAK FANANCIAL: Claims Filing Period Ends November 25 --------------------------------------------------------- LLP Microcredit Organization shanyrak Fanancial Group has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP Microcredit Organization Shanyrak Fanancial Group Alpamys Str. 28 Micro District Shanyrak-1 Almaty Kazakhstan Tel: 8 (7272) 63-75-82 TAZA-EL LLP: Creditors' Claims Due on November 25 ------------------------------------------------- LLP Corporation Taza-El has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP Corporation Taza-El Micro District Orbita-1, 28-44 Almaty Kazakhstan URAL CASPIE: Claims Registration Ends November 25 ------------------------------------------------- LLP Ural Caspie Impex has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP Ural Caspie Impex Micro District Samal-3, 12-41 Almaty Kazakhstan =================== K Y R G Y Z S T A N =================== BAI EMIR: Creditors Must File Claims by November 14 --------------------------------------------------- LLC Firms Bai Emir has shut down. Creditors have until Nov. 14, 2008, to submit written proofs of claim. Inquiries can be addressed to (0-543) 92-12-57. ===================== N E T H E R L A N D S ===================== EURAMAX INTERNATIONAL: Moody's Junks Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service downgraded the long-term ratings of Euramax International, Inc. Moody's believes that there is substantial risk that the company will violate its financial covenants in the third quarter of 2008 due to growing softness in the company's end-markets, particularly within its European operations and building products segment. Moody's believes these markets will further soften into 2009. The company's maximum leverage ratio steps down in the third quarter of 2008, triggering the likelihood of a technical default. As a result, the company will likely need to re-negotiate financial covenants with its lenders under difficult credit conditions. The negative outlook for Euramax reflects weakness in the domestic recreational vehicle market and certain construction markets and margin erosion. A sustained deterioration in operating performance or credit metrics due to a further decline in product demand or the inability to successfully amend the company's credit agreement could result in a further downgrade of the ratings. The outlook could be stabilized if the company expands its cash flow or successfully re-negotiates covenants with its lenders. Moody's has noted that aluminum prices have decreased considerably in the last few months and will benefit the company's cash flows in the near term. Ratings Downgraded: Issuer: Euramax International, Inc. -- Corporate Family Rating, downgraded to Caa1 from B2 -- First Lien Sr. Secured Term Loan, downgraded to B3 (LGD3, 34%) from B1 -- First Lien Sr. Secured Revolver, downgraded to B3 (LGD3, 34%) from B1 -- Second Lien Sr, Secured Term Loan, downgraded to Caa2 (LGD5, 80%) from Caa1 -- Outlook, Changed to Negative from Review for Possible Downgrade Issuer: Euramax Netherlands B.V. -- First Lien Sr. Secured Term Loan, downgraded to B3 (LGD3, 34%) from B1 -- First Lien Sr. Secured Revolver, downgraded to B3 (LGD3, 34%) from B1 -- Outlook, Changed to Negative from Review for Possible Downgrade Headquartered in Norcross, Georgia, Euramax International Inc. is an international producer of value-added aluminum, steel, vinyl and fiberglass products. =========== R U S S I A =========== KASKAD LLC: Voronezh Bankruptcy Hearing Set November 26 ------------------------------------------------------- The Arbitration Court of Voronezh will convene at 10:30 a.m. on Nov. 26, 2008, to hear bankruptcy supervision procedure on LLC Kaskad (Electric Motor Production). The case is docketed under Case No. A14�6357�2008/34/20B. The Temporary Insolvency Manager is: V. Tulinov Office 27 Kirova Str.9 394018 Voronezh Russia The Court is located at: The Arbitration Court of Voronezh Room 606 Srednemoskovskaya Str. 77 Voronezh Russia The Debtor can be reached at: LLC Kaskad Domostroiteley Str. 14a Voronezh Russia NOVUS-OIL CJSC: Creditor Must File Claims by November 3 ------------------------------------------------------- Creditors of CJSC Novus-Oil have until Nov. 3, 2008, to submit proofs of claims to: G. Shabunin Temporary Insolvency Manager Post User Box 12 Post Office 6 394006 Voronezh Russia The Arbitration Court of Voronezhskaya will convene at 10:00 a.m. on Dec. 24, 2008, to hear bankruptcy supervision procedure. The case is docketed under Case No. A14�4942�2006/121/27B . The Court is located at: The Arbitration Court of Voronezhskaya Office 602 Srednemoskovskaya Str. 77 Voronezh Russia The Court is located at: The Arbitration Court of Voronezhskaya Room 606 Srednemoskovskaya Str. 77 Voronezh Russia The Debtor can be reached at: CJSC Novus-Oil Srednemoskovskaya str. 28 394030 Voronezh Russia PROMTEKS AVA: Creditors Must File Claims by November 26 ------------------------------------------------------- Creditors of LLC Promteks Ava have until Nov. 26, 2008, to submit proofs of claims to: A. Anikeyev Insolvency Manager Apt. 2 Sverdlova Str. 116 Tambovskaya Rzhaksa Russia The Arbitration Court of Tambovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A64-7644/07-25. The Court is located at: The Arbitration Court of Tambov Penzenskaya Str. 67/12 392020 Tambov Russia The Debtor can be reached at: LLC Promteks Ava Naberezhnaya Str. 90/2 Tambov Russia RBC INFORMATION: S&P Cuts Credit Rating to B Over Liquidity Risks ----------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its long-term corporate credit rating on Russian media group OJSC RBC Information Systems to 'B' from 'B+'. At the same time, the Russia national scale rating and the senior unsecured bond ratings were lowered to 'ruBBB+' from 'ruA+'. The 'B' short-term corporate credit rating was affirmed. In addition, the ratings were placed on CreditWatch with negative implications. "The rating actions on RBC reflect a combination of heightened risks to the group's liquidity position in view of rapidly deteriorating global and Russian credit market conditions arising from: the group's reliance on short-term debt funding to finance its business expansion; its partial reliance on financial investments, mostly stock market securities, to bridge its funding needs during 2009; the slow pace of progress in its refinancing efforts; and some recent pressures in certain parts of the Russian advertising markets," said S&P's credit analyst Raam Ratnam. Until the second quarter of 2008, RBC's cash and short-term investments of US$232 million exceeded its short-term debt of US$158 million. In the third quarter of 2008, S&P believes that investments would constitute more than 50% of RBC's short-term resources, as the cash balance itself would have declined due to debt repayment and payment for acquisitions and capital expenditure. Given the recent sharp fall in equity prices in Russia and poor stock exchange trading conditions, S&P estimates the financial investment part of RBC's liquidity to have considerably eroded, which implies that, together with available cash balances, the company no longer has sufficient liquid assets to cover debt obligations through the end of 2009. The group's capacity to meet its debt obligations is therefore dependant upon the rollover of debt maturities or issuance of new debt, which is obviously challenging in the current credit environment. In addition to the liquidity and refinancing risks, the CreditWatch placement reflects S&P's concerns regarding the unavailability of audited financial statements for 2007, and consequently, RBC not fulfilling its reporting commitments to its lenders. Furthermore, S&P expects that the current economic conditions and market pressures in Russia to result in RBC's inability to sustain its strong operating performance of the first half in the second half of the year. RBC's credit profile benefits from its solidifying market position, continuing scale expansion, and improving revenue diversification. RBC reported a strong performance in the first half of 2008: Revenues rose to US$109 million, a 42% increase year on year, and the consolidated EBITDA margin increased to 30%-32%. The diversity of its client base of 5,500 should partially mitigate RBC's exposure to the cyclical advertising market in Russia, which despite some recent downward pressures, is still growing at a fast pace. S&P will continue to closely monitor the situation. S&P expects to resolve the CreditWatch placement over the next few weeks by assessing RBC's plans to: refinance its 2009 debt maturities, put in place suitable financing to cover debt obligations at least until year-end 2009, rapidly monetize its financial investments, and reduce its cost base while continuing to increase its share of the Russian media market. Upon resolution of the CreditWatch placement, the ratings could be either lowered or affirmed. A further downgrade by one to three notches is possible if RBC is unable to rapidly address its weak liquidity and near-term refinancing needs. A negative rating action is also likely if the group is unable to publish its 2007 audited financial statements under International Financial Reporting Standards without any material qualifications within the next one month or if it reports EBITDA margins of less than 15% for the year ending 2008. However, the ratings could be affirmed if RBC is able to rapidly secure its 2008 and 2009 debt obligations through adequate refinancing and demonstrate its ability to prudently manage its liquidity and financial reporting process, as long as the current delay with respect to publication of the 2007 audited financial statements is limited in scope and nature. SIB-GOR-MASH OJSC: Creditors Must File Claims by November 26 ------------------------------------------------------------ Creditors of OJSC Sib-Gor-Mash Research and Development Enterprise (TIN 3519002630) have until Nov. 26, 2008, to submit proofs of claims to: V. Poroshkov Insolvency Manager Post User Box 232 630102 Novosibirsk Russia The Arbitration Court of Vologodskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A13�1502/2008. The Debtor can be reached at: OJSC Sib-Gor-Mash Research and Development Enterprise Kombinatskiy pereulok 3 Novosibirsk Russia SIBIR ENERGY: Denies Being Subject of Margin Calls -------------------------------------------------- At the behest of its top shareholder, Bennfield Ltd, Russia- focused oil firm Sibir Energy PLc last week said it had not been the subject of margin calls, Reuters reported on October 9. "Bennfield has authorized the company to inform the market that neither it nor any of its shareholders has been the subject of margin calls. These facilities have been reduced where necessary and are in good standing," Reuters quotes the company as stating. About Sibir Energy Sibir Energy plc (Sibir) (LON: SBE) is an independent oil and gas exploration and production company. The company also refines and sells oil and gas products. Its areas of oil and gas exploration and production activity are in the Khanty-Mansiysk Okrug in Western Siberia, in the Russian Federation. During the year ended Dec. 31, 2007, all of the company's business was conducted in Russia, through its investment in subsidiaries operating in the oil and gas industry. Its wholly owned subsidiaries include Caraline Trading Limited, Sibenergy (Cyprus) Limited, Kangol Enterprises Limited, Glafeta Holdings Limited, Expid Holdings Limited, Yaklort Holdings Limited, Visini Holdings Limited, Labico Holdings Limited and Hitchens Global SA. In September 2007, Sibir acquired Moscow Oil and Gas Company (MOGC) and as a result increased its interest in Mostnefteprodukt by a further 38% stake. Since Dec. 31, 2007, the investment was treated as a subsidiary. STREZHEVOY-NEFTE-DOR-STROY: Claims Filing Period Ends Nov. 26 ------------------------------------------------------------- Creditors of CLSC Strezhevoy-Nefte-Dor-Stroy have until Nov. 26, 2008, to submit proofs of claims to: G. Kudashkina Insolvency Manager Post User Box 342 Volgogradskaya Str. 30 650056 Kemerovo Russia The Arbitration Court of Tomskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A67-610/08. The Court can be reached at: The Arbitration Court of Tomskaya Kirova Pr. 10 634050 Tomsk Russia The Debtor can be reached at: CLSC Strezhevoy-Nefte-Dor-Story Stroiteley Str. 83 Strezhevoy 636780 Tomskaya Russia UST-KUBINSKIY LES-PROM-KHOZ: Claims Filing Period Ends Nov. 26 -------------------------------------------------------------- Creditors of LLC Ust-Kubinskiy (TIN 3519002630) have until Nov. 26, 2008, to submit proofs of claims to: I. Shubin Insolvency Manager Apt. 6 Novgorodskaya Str. 27a 160022 Vologda Russia The Arbitration Court of Vologodskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A13�1502/2008. The Debtor can be reached at: LLC Ust-Kubinskiy Ustye Russia ZAP-SIB-REGION-GAZ: Court Starts Bankruptcy Supervision Process --------------------------------------------------------------- The Arbitration Court of Moscow commenced bankruptcy supervision procedure on LLC Zap-Sib-Region-Gaz (TIN 7730160673). The case is docketed under Case No. A40-26301/08-103-76B. The Temporary Insolvency Manager is: V. Ananyev Apt.145 Building 2 Sumskaya Str.8 121170 Moscow Russia Tel: 89162322835 The Court is located at: The Arbitration Court of Moscow Building 1 Novaya Basmannaya Str.13/2 107078 Moscow Russia The Debtor can be reached at: LLC Zap-Sib-Region-Gaz Oleko Dudicha Str. 3 121096 Moscow Russia ========= S P A I N ========= SAEZ MERINO: Seeks Court Authority to Liquidate Business -------------------------------------------------------- Lois brand jeans maker Saez Merino is going into liquidation after being hit by the credit crisis and a sharp economic slowdown in Spain, Sarah Morris of Reuters reports, citing Jose Mesa of Union General de Trabajadores de Espana. Mr. Mesa said the company, which also makes other well-known Spanish labels like Caroche, Caster and Cimarron, is closing its two factories. It is also laying off around 350 workers, Reuters discloses. He noted the company had already been operating under creditor protection, and that there had been a plan to pay creditors over 5 years with a 30%, Reuters relates. According to media reports, the company presented the request for liquidation to the court Wednesday last week, Reuters reveals. Meanwhile, the Lois brand, with its trademark bull logo, could be sold to another company as part of the bankruptcy process, Reuters adds. =========== S W E D E N =========== FORD MOTOR: Analysts Worried Firm May Run Out of Cash ----------------------------------------------------- Bill Vlasic at The New York Times reports that with vehicle sales declining, analysts are concerned about the liquidity of General Motors Corp. and Ford Motor Co. and their ability to finance operations as their revenues decline and as they continue to eat into cash reserves. Dow Jones Newswires relates that as GM and Ford shares continue to decline, concerns grew that the auto makers won't be able to turn their operations around before running dangerously low on cash. Matthew Dolan and John Stoll at The Wall Street Journal report that on Thursday, GM closed down 31%, or US$2.15, at US$4.76, while Ford dropped 22%, or 58 cents, to US$2.08, in New York Stock Exchange composite trading. WSJ states that GM ended the day with a market value of US$3.9 billion, while Ford had a US$6 billion market value. According to Dow Jones, decline in the companies' domestic sales aren't expected to improve in the near term. Dow Jones states that Gimme Credit high-yield analyst Shelly Lombard wrote in a Thursday research note that Ford appears to have enough liquidity between cash on hand and credit lines to fund operations for nine to 12 quarters. Dow Jones relates that Ms. Lombard doubted Ford's long-term viability, saying that the liquidity could evaporate soon as U.S. vehicle sales continue to drop. Dow Jones reports that Ford Chief Executive Alan Mulally said at the Paris Auto Show that the company has the "appropriate amount" of liquidity and that he will continue cutting production to meet declining demand. Investor Kirk Kerkorian, who owns a 6.5% stake in Ford, has said he is willing to provide additional capital to fund the company's restructuring, the report states. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Aug. 5, 2008, Fitch Ratings has downgraded the issuer default rating of Ford Motor Company and Ford Motor Credit Company LLC to 'B-' from 'B'. The Rating Outlook remains Negative. The downgrade reflects: the further deterioration in Ford's U.S. sales as a result of economic conditions, an adverse product mix and the most recent jump in gas prices; portfolio deterioration at Ford Credit and heightened concern regarding economic access to capital to support financing requirements; and escalating commodity costs that will remain a significant offset to cost reduction efforts. FORD MOTOR: CEO Mulally Says Bankruptcy Not an Option ----------------------------------------------------- Ford Motor Co.'s President and CEO Alan Mulally said in an interview that despite new questions from analysts and credit- rating agencies about Ford's current cash-burn rate and future liquidity position, a bankruptcy filing is not an option for Ford, The Wall Street Journal reports. WSJ quoted Mr. Mulally as saying, "It makes absolutely no sense to us. Everything we are doing is to manage our cash and right-size the company appropriately. It makes no sense." Citing Standard & Poor's lead automotive credit analyst Robert Schulz, Jeff Green and Greg Bensinger at Bloomberg News report that Ford may be forced into bankruptcy as the global credit freeze damps U.S. sales, and "macro factors could overwhelm them at some point," even as Ford vows to stick with its turnaround plans. Ford's spokesperson Mark Truby said that the company has a cash cushion, referring to US$23.4 billion borrowed in 2006 to help pay for closing down plants and cutting jobs while developing new models, Bloomberg relates. Ford is evaluating its liquidity, the report says, citing Mr. Truby. Mr. Mulally said Ford will discuss its future production levels when it releases third-quarter results this month, WSJ relates. Ford must adjust its production to match softening demand, the report says, citing Mr. Mulally. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Oct. 10, 2008, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company by one notch to 'CCC' from 'B-'. FORD MOTOR: Lewis Booth Will Replace Don Leclair as CFO ------------------------------------------------------- Ford Motor Co.'s Chief Financial Officer Don Leclair will retire on Nov. 1, after an accomplished 32-year career. Mr. Leclair, 56, was named Executive Vice President and CFO in August 2003. He joined Ford in 1976. "I have appreciated my time at Ford and now look forward to spending more time with my family and pursuing other interests," Mr. Leclair said. Matthew Dolan and Jeff Bennett at The Wall Street Journal report that Ford's President and CEO Alan Mulally said that Mr. Leclair's retirement was not linked to differences over the future direction of the company or prompted by some kind of financial surprise or accounting change surfacing in Ford's coming quarterly report. Lewis Booth -- who played a leading role in the successful transformation of Ford of Europe and Mazda during the past decade -- will become the company's Executive Vice President and Chief Financial Officer. Mr. Mulally said, "Don's expertise and business acumen have been invaluable to Ford. Under his leadership, Ford has made significant progress in lowering costs, improving quality, improving efficiency, divesting non-core assets, improving our balance sheet and moving us to our One Ford." Messrs. Leclair and Booth will work together in the coming weeks to ensure a smooth transition. Mr. Mulally said, "Lewis Booth is one of the strongest and most experienced leaders within Ford and the auto industry. He was instrumental in the transformation of Mazda and Ford of Europe to profitability and growth. He has built a strong and successful team in Ford of Europe that is well positioned to continue the momentum. And he has put in place new leadership at Volvo to turn around its results and build the strength of this premium brand." Mr. Booth comes to the CFO position with broad operational experience in Europe, Asia, and North America as well as a deep background in finance and product development. Mr. Booth, 59, was named to his present position in 2005 and also formerly was responsible for the Premier Automotive Group. He joined Ford of Europe in 1978 as a financial analyst. During his career, he has had a series of senior leadership positions around the world, including Ford of Europe, Ford Asia Pacific, Ford South Africa, Mazda and Ford's Finance, Truck Operations, Product Development, Manufacturing and Sales operations in Europe, Asia and North America. Mr. Mulally stated, "Lewis' global experience, track record and many years of leadership in Ford's finance operations make him the ideal CFO. He has proven success integrating Ford of Europe into a profitable, lean and highly efficient operation. We now are turning to Lewis to apply his extensive operational and financial experience to work even closer with our operating teams around the world as we accelerate the transition to our One Ford vision and, in the process, transforming Ford into a lean global enterprise and returning the company to sustainable profitability." New Executive Vice President at Ford Europe Ford also said that John Fleming is appointed Executive Vice President and Chairman and CEO, Ford of Europe, succeeding Mr. Booth. Mr. Fleming will assume responsibility for Ford of Europe, Volvo Car Corporation, and Ford's Export Operations & Global Growth Initiatives. He will report directly to Mr. Mulally. Mr. Mulally said, "John is a proven executive who has demonstrated strong results. Under John's leadership, Ford of Europe has grown its sales and profitability. I have every confidence he will continue to lead Ford of Europe and now Volvo to even stronger success in the future." Mr. Fleming, 57, was named Group Vice President and President and CEO, Ford of Europe, in 2005. He joined Ford's manufacturing operations in the UK in 1967. During his career, Mr. Fleming has served in a variety of leadership positions in Ford's global Manufacturing operations, including managing four automotive assembly plants and three stamping and component plants. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Oct. 10, 2008, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company by one notch to 'CCC' from 'B-'. FORD MOTOR: U.S. Chief Dismisses Rumor of Mazda Stake Sale ---------------------------------------------------------- Matthew Dolan at The Wall Street Journal reports that Ford Motor Co.'s chief of U.S. operations, Mark Fields, said that reports about the company selling its controlling stake in Mazda Motor Co. are speculative. Citing two people familiar with the matter, WSJ states that Ford's board approved the possible sale as part of an effort to boost its finances amid a drop in global auto sales and investor questions about the company's cash reserves. WSJ relates that on Monday, Mr. Fields said that Ford and Mazda have worked closely over the decades on the basic architecture of vehicles that each company sells under different model names, but the companies would be able to function without the other because their design and manufacturing operations remain wholly independent. According to the report, Mr. Fieds told reporters at an event for Ford's new F-150 pickup truck, "Each company has the full capability" to bring their products to market without the other. Ford and Mazda are operationally independent despite joint ventures, WSJ says, citing Mr. Fields. According to the report, Mazda and Ford run some joint ventures around the world, including the Auto Alliance International plant in Flat Rock, Michigan. Ford will keep at least part of its interest in Mazda because of their joint design and manufacturing operations, the report says, citing a person familiar with the company's plans. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Oct. 10, 2008, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company by one notch to 'CCC' from 'B-'. FORD MOTOR: S&P Puts 'B-' Long-Term Rating on Negative CreditWatch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B-' long-term corporate credit and other ratings on U.S. automaker Ford Motor Co. on CreditWatch with negative implications. "The CreditWatch placement reflects the rapidly weakening state of most global automotive markets along with capital market conditions that will remain a major challenge for the foreseeable future," said Standard & Poor's credit analyst Robert Schulz. Included in the CreditWatch placement is Ford's finance unit, Ford Motor Credit Co. (B-/Watch Neg/--). S&P believes Ford has adequate liquidity for at least the rest of 2008 as measured by cash balances, and available bank facilities, but the accelerating deteriorating industry fundamentals will be a serious challenge to liquidity during 2009. SVITHOID TANKERS: Applies for Insolvent Liquidation --------------------------------------------------- The Board of Directors in Svithoid Tankers AB has decided on Sunday, Oct. 12, 2008, to investigate the possibilities for a company reorganization. After having reviewed the circumstances, it has become clear that the prerequisites do not exist. The Board has therefore decided to apply for insolvent liquidation. Svithoid Tankers AB -- http://www.svithoidtankers.com/-- is a Swedish shipping company with focus on smaller, modern product and chemical tankers. The company owns and operates vessels with high standards that always fulfill all the latest environmental. ===================== S W I T Z E R L A N D ===================== ATELIER BLAZEJEWSKI: Creditors Must File Claims by Nov. 30 ---------------------------------------------------------- Creditors owed money by LLC Atelier Blazejewski are requested to file their proofs of claim by Nov. 30, 2008, to: Roman Blazejewski Hegenheimerstrasse 50 4055 Basel Switzerland The company is currently undergoing liquidation in Basel. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on July 7, 2008. EO2 LLC: Deadline to File Proofs of Claim Set Dec. 12 ----------------------------------------------------- Creditors owed money by LLC EO2 are requested to file their proofs of claim by Dec. 12, 2008, to: Johannes Mayer Pilgerweg 4 8802 Kilchberg Switzerland The company is currently undergoing liquidation in Kilchberg ZH SZ. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 20, 2007. GENERAL MOTORS: In Talks with Cerberus to Acquire Chrysler ---------------------------------------------------------- General Motors Corp. has been in talks to acquire Chrysler LLC, Jeffrey McCracken and John D. Stoll at The Wall Street Journal reporty, citing people familiar with the matter. According to WSJ, the sources said that Chrysler owner Cerberus Capital Management LLC proposed a swap in which GM would acquire Chrysler's automotive operations, and in turn give Cerberus its remaining 49% stake in GMAC. The sources told WSJ that the problems in the financial markets has halted talks between Cerberus Capital and GM, but the talks could be renewed once markets stabilize. One of the sources said that GM wants to let go of its 49% stake in GMAC due to the negative impact the once- profitable finance arm is having on its balance sheet, WSJ reports. A source said that GM expects as much as US$10 billion in cost- cutting if it reaches a deal with Cerberus Capital, WSJ relates. "Without referencing this specific rumor, as we've often said, GM officials routinely discuss issues of mutual interest with other auto makers. As a policy, we do not confirm or comment publicly on those private discussions, which in many cases do not lead anywhere," GM spokesperson quoted Tony Cervone as saying. Cerberus Capital agreed in 2006 to acquire a majority stake in GMAC for US$14 billion. According to WSJ, Cerberus Capital was hoping to gain from GMAC's then-profitable mortgage arm Rescap; expand the car-lending business in a global auto industry that was projected to grow rapidly; and that by de-linking GMAC from GM, the lending company's credit rating would improve, lowering its cost of capital. GMAC's value has declined in recent quarters due to exposure to subprime home loans, car loans, and leases, WSJ states. The GMAC stake is currently valued at US$6 billion to US$7 billion, WSJ says, citing people familiar with the discussions. According to the report, GM is considering various options for GMAC amid difficulties in raising money for loans and an unwillingness at GMAC to continue offering dealers and buyers cheap financing. WSJ reports that if negotiations with GM fail, Cerberus Capital will continue exploring options for Chrysler. GM, says WSJ, had backed off from a potential acquisition of Chrysler when it was being sold by Daimler. Sources said that by acquiring Chrysler, GM could lessen costs by cutting plants, blue-collar jobs and corporate overhead, WSJ states. According to WSJ, investors might worry that GM would be acquiring more troubled operations while it is still trying to fix its own problems, shedding nameplates and dealers of its own. WSJ relates that GM's fund-raising drive could benefit from acquiring Chrysler, which has been able to hoard cash despite dropping sales and production in its U.S. market, by backing away from many capital-intensive projects, like constructs new component plants, over the past 14 months. GM's fund-raising drive is slated to raise US$15 billion over the next 15 months through asset sales, secured financing, and cost cuts, WSJ states. WSJ reports that a GM-Chrysler deal would involve the rationalizing of more than 100 automotive plants and 190,000 workers in North America, and would likely force a streamlining of 11 automotive brands -- from Chrysler to Cadillac -- and more than 10,000 auto dealers in the U.S., Mexico, and Canada. Cerberus Capital appears undaunted by problems with its GMAC investment, according to WSJ. The report states that Cerberus Capital's chief said in a letter to its investors in September, "This is an historic opportunity in the U.S. residential and commercial real estate markets. Both whole loans and mortgage securities are trading at, in our view, ridiculously low historically distressed levels, and pressures on financial institutions globally to relieve their balance sheets of these assets have created a unique and attractive distressed investing opportunity....While we have received a lot of press about certain companies and their problems, not only will these companies not have a significant effect on our performance, but they all, in our view, are conservatively valued and some may have real upside from the mark." GM Board May be Skeptic on Chrysler Deal General Motors Corp.'s board may be skeptic about the firm's acquisition of Chrysler LLC, John D. Stoll, Matthew Dolan, and Neal E. Boudette at The Wall Street Journal report. Citing people familiar with the matter, WSJ relates that the board gave a "cool reception" to the planned acquisition after GM's management discussed the matter at a meeting last week. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. GENERAL MOTORS: Analysts Worried Firm May Run Out of Cash --------------------------------------------------------- Bill Vlasic at The New York Times reports that with vehicle sales declining, analysts are concerned about the liquidity of General Motors Corp. and Ford Motor Co. and their ability to finance operations as their revenues decline and as they continue to eat into cash reserves. Dow Jones Newswires relates that as GM and Ford shares continue to decline, concerns grew that the auto makers won't be able to turn their operations around before running dangerously low on cash. Matthew Dolan and John Stoll at The Wall Street Journal report that on Thursday, GM closed down 31%, or US$2.15, at US$4.76, while Ford dropped 22%, or 58 cents, to US$2.08, in New York Stock Exchange composite trading. WSJ states that GM ended the day with a market value of US$3.9 billion, while Ford had a US$6 billion market value. According to Dow Jones, decline in the companies' domestic sales aren't expected to improve in the near term. Dow Jones states that Gimme Credit high-yield analyst Shelly Lombard wrote in a Thursday research note that Ford appears to have enough liquidity between cash on hand and credit lines to fund operations for nine to 12 quarters. Dow Jones relates that Ms. Lombard doubted Ford's long-term viability, saying that the liquidity could evaporate soon as U.S. vehicle sales continue to drop. Dow Jones reports that Ford Chief Executive Alan Mulally said at the Paris Auto Show that the company has the "appropriate amount" of liquidity and that he will continue cutting production to meet declining demand. Investor Kirk Kerkorian, who owns a 6.5% stake in Ford, has said he is willing to provide additional capital to fund the company's restructuring, the report states. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Aug. 5, 2008, Fitch Ratings has downgraded the issuer default rating of Ford Motor Company and Ford Motor Credit Company LLC to 'B-' from 'B'. The Rating Outlook remains Negative. The downgrade reflects: the further deterioration in Ford's U.S. sales as a result of economic conditions, an adverse product mix and the most recent jump in gas prices; portfolio deterioration at Ford Credit and heightened concern regarding economic access to capital to support financing requirements; and escalating commodity costs that will remain a significant offset to cost reduction efforts. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. GENERAL MOTORS: Says Bankruptcy Not an Option --------------------------------------------- The Wall Street Journal reports that General Motors Corp. has denied that it is considering filing for bankruptcy. Frank Ahrens at The Washington Post relates that the plunge in GM's shares of stock spurred speculation that the company might be edging towards bankruptcy. Citing Standard & Poor's lead automotive credit analyst Robert Schulz, Jeff Green and Greg Bensinger at Bloomberg News report that GM may be forced into bankruptcy, as "macro factors could overwhelm them at some point," even as the company vows to stick with its turnaround plans. GM said in a statement on Friday, "Clearly, we face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets. But bankruptcy protection is not an option GM is considering." According to Reuters, Barclays Capital also cut its price target for GM on Friday, saying that GM's cash needs were increasing due to the risk of weaker global auto sales. Reuters states that Barclays analyst Brian Johnson said in a note for clients, "With auto sales stalled in the (United States) and beginning to contract in the rest of the world, we believe GM's cash needs are increasing." Mr. Johnson said that GM would need to raise US$10.3 billion to maintain liquidity of US$14 billion through next year, up from his earlier estimate of US$7.3 billion over the same period, Reuters states. WSJ relates that GM is expected to disclose more production capacity reductions in the coming weeks, likely on closing plants that stamp auto parts or build engines and transmissions. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. GENERAL MOTORS: Market Woes Cue S&P to Put 'B-' Rating on WatchNeg ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on U.S. automaker General Motors Corp., including the 'B-' long-term corporate credit rating, on CreditWatch with negative implications. "The CreditWatch placement reflects the rapidly weakening state of most global automotive markets, along with capital market conditions that will remain a serious challenge for the foreseeable future," said Standard & Poor's credit analyst Robert Schulz. S&P also placed its ratings on GM's 49%-owned finance affiliate GMAC LLC, including the 'B-' long-term counterparty credit rating, on CreditWatch with negative implications. At this time, ratings on GMAC unit Residential Capital LLC (CCC+/Negative/C) are not on CreditWatch. S&P believes GM currently has adequate liquidity for at least the rest of 2008 as measured by cash balances and available bank facilities, but the accelerating deterioration in industry fundamentals will be a serious challenge to liquidity during 2009. R. FLACH ELEKTRONIK: Creditors Have Until Oct. 31 to File Claims --------------------------------------------------------------- Creditors owed money by JSC R. Flach Elektronik are requested to file their proofs of claim by Oct. 31, 2008, to: Heiligholzstr. 42 4142 Munchenstein Switzerland The company is currently undergoing liquidation in Munchenstein BL. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 2, 2008. RITTERSPORN JSC: Proofs of Claim Filing Deadline is Oct. 31 ----------------------------------------------------------- Creditors owed money by JSC Rittersporn are requested to file their proofs of claim by Oct. 31, 2008, to: Jurg Muller Fabrikstrasse 4 4562 Biberist Switzerland The company is currently undergoing liquidation in Biberist. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 2, 2008. SPIESER AUTOHANDEL: Creditors' Proofs of Claim Due by Dec. 16 ------------------------------------------------------------- Creditors owed money by LLC Spieser Autohandel are requested to file their proofs of claim by Dec. 16, 2008, to: Dr. Martin Michel Mail Box 333 8853 Lachen 6 Switzerland The company is currently undergoing liquidation in Schubelbach SZ. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on March 8, 2007. TAC JSC: Oct. 31 Set as Deadline to File Claims ----------------------------------------------- Creditors owed money by JSC Tac are requested to file their proofs of claim by Oct. 31, 2008, to: JSC Tac 8610 Uster Switzerland The company is currently undergoing liquidation in Uster. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 2, 2008. VESCOR JSC: Deadline to File Proofs of Claim Set Nov. 30 -------------------------------------------------------- Creditors owed money by JSC Vescor are requested to file their proofs of claim by Nov. 30, 2008, to: Schutzengelstrasse 38 6340 Baar 6 Switzerland The company is currently undergoing liquidation in Baar. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Aug. 18, 2008. ============= U K R A I N E ============= ACHILLES-2005 LLC: Creditors Must File Claims by October 17 ----------------------------------------------------------- Creditors of LLC Achilles-2005 (code EDRPOU 33903172) have until Oct. 17, 2008, to submit proofs of claim to: Sergey Zozulia Liquidator/Insolvency Manager Ap. 31 Shevchenko Boulevard 250 18000 Cherkassy Ukraine Tel: 8(067)470-1806 The Economic Court of Cherkassy commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 5, 2008. The case is docketed as 10/3652. The Economic Court of Cherkassy Shevchenko Avenue 307 18005 Cherkassy Ukraine The Debtor can be reached at: LLC Achilles-2005 Gromov Str. 167 18000 Cherkassy Ukraine BROVARY RESEARCH-EXPERIMENTAL: Claims Filing Ends October 18 ------------------------------------------------------------ Creditors of OJSC Brovary Research-Experimental Plant (code EDRPOU 01349489) have until Oct. 18, 2008, to submit proofs of claim to: Bogdan Krupka Temporary insolvency manager Ap. 193 Independency Str. 2 Brovary Kiev Ukraine The Economic Court of Kiev commenced the bankruptcy supervision procedure on the company on July 22, 2008. The case is docketed as B3/106-08. The Economic Court of Kiev Komintern Str. 16 01032 Kiev Ukraine The Debtor can be reached at: OJSC Brovary Research-Experimental Plant Kutuzov Str. 57 Brovary Kiev Ukraine DEKALOG LLC: Creditors Must File Claims by October 18 ----------------------------------------------------- Creditors of LLC Dekalog (code EDRPOU 30781804) have until Oct. 18, 2008, to submit proofs of claim to: Alexander Borodiy Liquidator/Insolvency Manager P.O. Box 48 02068 Kiev Ukraine Tel: 8(044)223-86-37 The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 10, 2008. The case is docketed as B 11/243-08. The Economic Court of Kiev Komintern Str. 16 01032 Kiev Ukraine The Debtor can be reached at: LLC Dekalog Promyshlennaya Str. 5 Vishnevoye Kiev Ukraine DNIPRO-PRODUCT LLC: Creditors Must File Claims by October 18 ------------------------------------------------------------ Creditors of LLC Dnipro-Product (code EDRPOU 32780963) have until Oct. 18, 2008, to submit proofs of claim to: Victoriya Androsova Temporary Insolvency Manager Yangel Str. 17/112 49089 Dnipropetrovsk Ukraine Tel: 8(056)792-59-10 The Economic Court of Dnipropetrovsk commenced bankruptcy supervision procedure on the company on Aug. 18, 2008. The case is docketed as 26/177-08. The Economic Court of Dnipropetrovsk Kujbishev Str. 1a 49600 Dnipropetrovsk Ukraine The Debtor can be reached at: LLC Dnipro-Product 152nd Division Str. 3 49033 Dnipropetrovsk Ukraine KATKO LLC: Creditors Must File Claims by October 17 --------------------------------------------------- Creditors of LLC Katko (code EDRPOU 34842268) have until Oct. 17, 2008, to submit proofs of claim to: LLC Law Effective Justice Liquidator/Insolvency Manager Ofc. 197 Ivan Mazepa Str. 3B 01010 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 26, 2008. The case is docketed as B19/353-08. The Debtor can be reached at: LLC Katko Kurchatov Str. 6-A Vasilkov 08600 Kiev Ukraine KLN LLC: Creditors Must File Claims by October 18 ------------------------------------------------- Creditors of LLC KLN (code EDRPOU 31457913) have until Oct. 18, 2008, to submit proofs of claim to: Sergey Zagorodny Liquidator/Insolvency Manager Ap. 12 Stroiteley Str. 21/9 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 28, 2008. The case is docketed as 50/255. The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Debtor can be reached at: LLC KLN Verbitsky Str. 30 Kiev Ukraine NADRA BANK: Fitch Lowers Individual Rating to 'E' from 'D/E' ------------------------------------------------------------ Fitch Ratings has changed Ukraine-based Nadra Bank's Outlook to Negative and downgraded its Individual rating to 'E' from 'D/E'. The rating actions reflect deterioration in the bank's asset quality, while the bank's liquidity position has also come under some pressure. Loans with payments overdue by 90 days or more increased to 7.4% at end-H108 from 5.7% at end-2007, while those overdue for up to 90 days grew very fast during H108, indicating the potential for a further rise in problem exposures. Although write-offs have been minimal during the last two years and Fitch understands that most of the NPLs are secured, the agency regards the bank's loan impairment levels as high, particularly in light of the relatively favorable credit environment. Furthermore, reserve coverage of NPLs is low and the quality of capital is weak, with a significant part of this coming from revaluations of investments with limited liquidity. Nadra's liquidity position has also come under some pressure in recent weeks. However, the bank has received a UAH1.5 billion (equivalent of US$309 million) one-year collateralized refinancing facility from the National Bank of Ukraine which should improve its financial flexibility and help it to repay a US$100 million eurobond and a US$130 million syndicated loan, both due in November 2008. Fitch understands that the bank's borrowings and placements on the domestic interbank market are broadly matched by amounts and tenors; however, the bank, like many others in Ukraine, could be vulnerable to a sustained outflow of customer funds. Nadra's Long-term Issuer Default Rating of 'B-' is now driven by potential support from the Ukrainian authorities, reflecting what Fitch views as a significant propensity of the latter to provide support to a bank of Nadra's size. The Negative Outlook on the Long-term IDR reflects that on the sovereign's ratings, and Nadra would likely be downgraded if the sovereign rating is downgraded. Against this, a reversal of asset quality trends, strengthening of capitalization and improvement of liquidity would be positive for the bank's credit profile. Nadra is the seventh-largest Ukrainian bank by asset size, with a strong presence in the retail segment and about 3.4% of system assets at end-H108. The bank currently has the sixth-largest nationwide network of branches and outlets, the fifth-largest network of ATMs and the third-largest network of plastic card- acquiring terminals. About 87% of Nadra's shares are ultimately held by three individuals (including 33.4% held by Nadra's CEO, Igor Gilenko). Foreign portfolio investors jointly own 8%, including East Capital Fund's 7%. Rating actions taken: -- Long-term IDR affirmed at 'B-'; Outlook changed to Negative from Positive -- Senior unsecured debt: affirmed at 'B-', RR4 -- Short-term IDR: affirmed at 'B' -- Individual Rating: downgraded to 'E' from 'D/E' -- Support Rating: affirmed at '5' -- Support floor: affirmed at 'B-' REGION WHOLESALE: Creditors Must File Claims by October 17 ---------------------------------------------------------- Creditors of LLC Region Wholesale Service (code EDRPOU 33160215) have until Oct. 17, 2008, to submit proofs of claim to: The Economic Court of Dnipropetrovsk Kujbishev Str. 1a 49600 Dnipropetrovsk Ukraine The Economic Court of Dnipropetrovsk commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 4, 2008. The case is docketed as B 15/217-08. The Debtor can be reached at: LLC Region Wholesale Service Apt. 235 Fuchik Str. 30 49027 Dnipropetrovsk Ukraine V.A.N. LLC: Creditors Must File Claims by October 17 ---------------------------------------------------- Creditors of LLC V.A.N. (code EDRPOU 35282405) have until Oct. 17, 2008, to submit proofs of claim to: LLC Law Effective Justice Liquidator/Insolvency Manager Ofc. 197 Ivan Mazepa Str. 3B 01010 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 26, 2008. The case is docketed as B19/352-08. The Debtor can be reached at: LLC V.A.N. Kurchatov Str. 6-A Vasilkov 08600 Kiev Ukraine * S&P Revises Outlooks on Three B-Rated Ukrainian Banks to Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services has revised its outlooks on the long-term counterparty credit ratings on three Ukrainian banks to negative from stable. In addition, the long-term ratings on the banks were affirmed, and the Ukrainian national scale ratings on two of the affected banks were lowered. S&P also affirmed the ratings on two other Ukrainian banks, on which the outlooks remain stable. "The outlook revisions reflect our growing concerns about the adverse impact of high inflation and currency devaluation," said S&P's credit analyst Annette Ess. "We are also concerned about the affect of the ongoing international market turbulence on the financial and commercial profiles of Ukrainian banks, and the consequent increasing pressure on their asset quality, liquidity, and funding." Positively, the government is putting in place an array of measures to help stabilize the banking system. These measures include a new regulation (No. 319) which places a moratorium on the early redemption of term deposits, restricts asset growth, and forbids issuing foreign currency loans to borrowers without an income in foreign currencies. The Central Bank of Ukraine (CBU) also announced liquidity support up to 60% of regulative capital to Ukrainian banks that are not involved in speculative operations. CBU refinancing increased to Ukrainian hryvnia (UAH) 6.45 billion (US$1.1 billion) in the first eight days of October compared with UAH5.96 billion for the whole of September. On Oct. 8, CBU carried out a tender for funds worth UAH1.66 billion among 25 financial institutions. S&P expects that continuing high inflation and a weakening hryvnia will reduce the ability of borrowers -- especially consumers and small and midsize enterprises -- to repay debt obligations, leading to marked asset-quality deterioration. The banking sector is highly vulnerable to political instability and depositor confidence. This could lead to a flight to quality among retail depositors. Higher funding costs and reduced debt-market access are especially detrimental to small and midsize players and those which have sizable amounts of debt maturing in the short term. Moreover, instability on the interbank market exacerbates liquidity problems. S&P maintains its stable outlook on Ukrsotsbank OJSC, reflecting expected support from its strategic parent UniCredit SpA (A+/Negative/A-1). S&P also maintains its stable outlook on UNEX BANK; the low rating already incorporates a high degree of vulnerability to an adverse operating environment. The lowering of the Ukraine national scale ratings on Alfa-Bank Ukraine and JSC KREDOBANK reflects a more granular credit rating approach under S&P's national ratings scale. Ratings List To From Outlook Action/Downgrade Nadra Bank Counterparty Credit Rating B-/Negative/-- B-/Stable/-- Alfa-Bank Ukraine Counterparty Credit Rating B+/Negative/B B+/Stable/B Ukraine National Scale uaA- uaA JSC KREDOBANK Counterparty Credit Rating B+/Negative/B B+/Stable/B Ukraine National Scale uaA- uaA Ratings Affirmed Ukrsotsbank OJSC Counterparty Credit Rating B+/Stable/B UNEX BANK Counterparty Credit Rating CCC+/Stable/C Ukraine National Scale uaB+ * Fitch Says Ukrainian Banks Risks Hike as Global Turmoil Worsens ----------------------------------------------------------------- Fitch Ratings states that near-term risks have increased considerably for Ukrainian banks as a combination of global financial market turmoil, worsening macroeconomic fundamentals and political uncertainty have resulted in deposit outflow, tighter domestic money markets and exchange rate volatility. Banks' asset quality is also likely to deteriorate as loan books season, liquidity in the economy tightens and unhedged foreign currency borrowers potentially face a greater debt burden. Measures taken by the National Bank to bolster sector liquidity are viewed positively, but may not be sufficient should market conditions deteriorate further. Liquidity and asset quality issues have already resulted in negative rating actions on two banks - Rodovid and Nadra - in recent days, and further negative actions are possible as Fitch reviews the impact of current developments on rated institutions. Sustained or worsened financial instability could also further damage the credit fundamentals of the Ukrainian sovereign (rated Long-term IDR 'BB-' with a Negative Outlook). In common with many economies globally, both developed and emerging, Ukraine currently faces a combination of tight interbank market liquidity, sharply reduced asset prices, a credit squeeze and slowing economic growth. However, in Ukraine the risks for the banking sector are compounded by the rapid loan growth of recent years; political uncertainty and the absence of a credible government in the run-up to the December parliamentary elections; volatility in the UAH/US$ exchange rate (which climbed above 5.6 in intraday trading on Wednesday of last week before falling back to the 5.2-5.3 range by the end of the week on the back of NBU intervention); and the high proportion of foreign currency lending (51% as of August 2008). Retail deposit outflows have reportedly increased in the last two weeks following the failure of the country's sixth-largest bank, Prominvest, and as a result of exchange rate volatility. A credit strength for the banking sector compared to CIS peers is the relatively high foreign ownership (36%); however, Fitch notes that combined foreign and state ownership is higher in Russia (approximately 64%) than in Ukraine (44%), leaving a larger proportion of institutions in the latter market where shareholder support is less certain. In Ukraine, in Fitch's view, near-term risks are highest among medium-sized and small banks, many of which have grown faster than the sector in recent years, often with weak risk management infrastructure and a high reliance on short-term funding. Fitch views as positive for Ukrainian banks the additional liquidity support measures put in place by the NBU, including those announced. In particular, banks can receive secured one- year loans from the NBU in an amount up to 60% of regulatory capital, and were instructed not to repay retail term deposits or other funding before maturity. Reserve requirements on short-term foreign borrowings were reduced to 0% from 20%. Previously, the NBU had also stepped in to manage the failure of Prominvest. However, Fitch notes that these measures may not be sufficient to protect the liquidity of individual institutions which have been highly dependent on the domestic interbank market, in particular should customer funding continue to contract. There is also a high degree of uncertainty as to whether the authorities would recapitalize banks in case of significant credit losses, in particular in respect to smaller institutions. * UKRAINE: Central Bank Moves to Stabilize Banking Sector --------------------------------------------------------- Ukraine's central bank, The National Bank of Ukraine (NBU), on Monday imposed a six-month freeze on the early withdrawal of deposits from commercial banks to prevent a run, more than tripled its guarantee on deposits to US$38,000 (EUR28,100, GBP22,350) and increased reserve requirements for banks, The Financial Times reports. The FT says the NBU recently offered more than US$1 billion in emergency aid to thwart liquidity and solvency problems at a handful of banks including Prominvestbank, which received a US$600 million rescue package. The moves, according to the FT, are meant to stabilize the country's fragile banking sector, which has been shaken by declining confidence, a falling currency and a deepening political crisis. The FT says the NBU's deputy chief, Volodymyr Korotyuk, expects the measures to stabilize the situation within one month or earlier. Tim Ash, an analyst at the Royal Bank of Scotland, estimated some 4% of deposits, or US$3 billion, was withdrawn from Ukrainian banks in October, the FT relates. Ukraine, whose economy has in recent years been boosted by high prices on steel, its main export, and a lending boom financed by heavy foreign borrowing by domestic banks, is now experiencing falling steel prices, says the FT. Also, a widening current account deficit have put pressure on the country's currency and access to fresh credit facilities has dried up with the credit crunch, the FT adds. Meanwhile, FT relates Ukraine president Viktor Yushchenko is having a conflict with then ally premier Yulia Tymoshenko over a decree scheduling Ukraine's third parliamentary election for December 7. According to FT, Ms. Tymoshenko defied the vote, insisting it would complicate the country's ability to grapple with the world financial crisis. =========================== U N I T E D K I N G D O M =========================== AMERICAN INTERNATIONAL: Uses Additional US$9BB From Gov't Loan -------------------------------------------------------------- Liam Pleven, Carrick Mollenkamp, and Craig Karmin at The Wall Street Journal report that American International Group Inc. drew down another US$9 billion from the federal loan to meet demands for cash from its trading partners. According to WSJ, AIG has now borrowed US$70.3 billion from the government in three weeks. WSJ says that the government raised the loan it is offering to AIG to US$122.8 billion on Wednesday, due to the threat of losses from AIG's lending program. WSJ quoted a person familiar with the matter, "The Fed had no idea the capital markets would seize up and the stock markets would keep falling; both put AIG in a severe cash bind." WSJ relates that much of the Fed's original loan to AIG was used to: -- providing collateral to AIG's trading partners on complex derivatives known as credit default swaps, and -- covering losses in AIG's securities-lending program. Citing Texas Department of Insurance's chief financial analyst Doug Slape, WSJ states that AIG's securities-lender customers "flooded the program for their collateral, creating a mini-run" on the company. Mr. Slape said that AIG started drawing down on the federal loan commitment to cover the collateral requests, according to the report. The insurance department is keeping an eye on three AIG insurance units due to the securities-lending exposure, WSJ relates, citing Mr. Slape. California Department of Insurance spokesperson, Darrel Ng, said that the state is looking at the securities- lending practices of insurers in California, WSJ states. According to the report, the New York Fed and outside experts that the Fed hired are trying to assess how money is flowing within and from AIG, and has been sending personnel to AIG divisions to assess the company's risks and its risk-management procedures. About American International Group Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. US$85,000,000,000 Federal Reserve Loan The Federal Reserve Bank of New York extended to AIG a revolving credit facility up to US$85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The Credit Facility provides for a 79.9% equity interest in AIG. The Credit Facility provides for an initial gross commitment fee of 2% of the total Credit Facility on the closing date. AIG, in a regulatory filing with the Securities and Exchange Commission, said it will pay a commitment fee on undrawn amounts at the rate of 8.5% per annum. Interest and the commitment fees are generally payable through an increase in the outstanding balance under the Credit Facility. Borrowings under the Credit Facility are conditioned on the NY Fed being reasonably satisfied with, among other things, AIG's corporate governance. AIG is required to repay the Credit Facility from, among other things, the proceeds of certain asset sales and issuances of debt or equity securities. These mandatory repayments permanently reduce the amount available to be borrowed under the Credit Facility. In a statement, the company said "AIG is a solid company with over US$1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services has revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and International Lease Finance Corp. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008 that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of US$5.36 billion compared to 2007 second quarter net income of US$4.28 billion. Second quarter 2008 adjusted net loss was US$1.32 billion, compared to adjusted net income of US$4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was US$13.16 billion, compared to net income of US$8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was US$4.88 billion, compared to adjusted net income of US$9.02 billion in the first six months of 2007. AMERICAN INTERNATIONAL: Gov't to Name Trustees to Manage Stake -------------------------------------------------------------- Sudeep Reddy at The Wall Street Journal reports that the Federal Reserve will appoint trustees to oversee the U.S. government's almost 80% stake stake in American International Group, Inc. According to WSJ, the central bank will select within two weeks three individuals with business experience to manage the stake and voting rights in AIG, taking over that role from the Federal Reserve and Treasury officials. WSJ states that the trustees would eventually sell the government shares, and the proceeds would go into federal coffers. The report says that the trustees would hire their own advisers. WSJ relates that as lender, the Federal Reserve is responsible for ensuring that AIG pays interest on the government loan and repays the central bank. According to the report, the government might want to operate AIG more aggressively to boost the company's value, to ensure that taxpayers have a better chance of being rewarded. AIG, says WSJ, will maintain a board of directors, but the loan agreement allows the trustees to appoint or replace the directors. AIG said in a statement that its agreement with the government requires the company "to use reasonable efforts" to make its board "satisfactory to the trust" within 10 days of the trust's creation. Federal Reserve officials expect to remain involved in discussions about asset sales as they are critical to the AIG loans being repaid, WSJ states. Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. The Federal Reserve Bank of New York has extended to AIG a revolving credit facility up to US$85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The revolving credit facility will contain affirmative and negative covenants, including a covenant to pay down the facility with the proceeds of asset sales. The summary of terms also provides for a 79.9% equity interest in AIG. The corporate approvals and formalities necessary to create this equity interest will depend upon its form. In a statement, the company said "AIG is a solid company with over US$1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. S&P raised its ratings on preferred stock of International Lease Finance Corp. (ILFC; A-/Watch Dev/A-1) to 'BBB' from 'B', and revised the CreditWatch implications to developing from negative. All other ILFC ratings remain on CreditWatch with developing implications. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008, that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of US$5.36 billion compared to 2007 second quarter net income of US$4.28 billion. Second quarter 2008 adjusted net loss was US$1.32 billion, compared to adjusted net income of US$4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was US$13.16 billion, compared to net income of US$8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was US$4.88 billion, compared to adjusted net income of US$9.02 billion in the first six months of 2007. AMERICAN INT'L: Aware of Potential Woes in Valuing Contracts ------------------------------------------------------------ Documents from the congressional investigators indicate that top American International Group Inc. officials were aware of potential problems in valuing derivative contracts before the transactions caused the company's shareholders severe pain, Liam Pleven and Amir Efrati at The Wall Street Journal report. WSJ relates that the derivative-contract problems would have driven AIG into bankruptcy. WSJ states that an investigation began earlier this year on how candid company officials were with investors at a December 2007 investor conference and whether officials at AIG's financial-products unit, which sold the derivatives contracts, misled AIG's outside auditor. Joseph St. Denis, a former internal AIG auditor, said in a letter to the House Committee on Oversight and Government Reform that in early September 2007, that he learned that AIG's financial- products unit had been asked for billions of dollars in collateral related to derivatives it had sold, WSJ states. According to the report, Mr. St. Denis said, in a letter disclosed during the congressional hearing on Tuesday, that he had early on raised concerns about being excluded from conversations about the valuation of the derivatives. WSJ states that the derivatives, or credit-default swaps, protect buyers against the risk of default on other investments. WSJ says that AIG believed that the possibility of making payouts was remote. The valuation model of one of AIG's trading partners "apparently indicated" that the unit "was in a potentially material liability position," WSJ says, citing Mr. St. Denis, who denied of his involvement in the valuation of the swaps at AIG. According to WSJ, Mr. St. Denis said that in the last week of September 2007, the unit's chief, Joseph Cassano, said that he had excluded Mr. St. Denis "because I was concerned that you would pollute the process." WSJ reports that Mr. St. Denis said he resigned from AIG on Oct. 1, 2007, and that he told AIG's chief auditor Michael Roemer about Mr. Cassano's comment. A committee chairperson said that Mr. Cassano earned US$280 million over eight years at AIG, WSJ states. Mr. Cassano left AIG in March and was slated to receive $1 million a month through the end of this year, but the contract was terminated before the congressional hearing, according to the report. Determining the values for the swaps in a rapidly changing market is complex and "it can't be the case that your [trading partner in swaps transactions] is the definer of what the value is," WSJ says, citing F. Joseph Warin, the attorney for Mr. Cassano. According to the report, Mr. Warin said that the supervision of Mr. Cassano by AIG was transparent and interactive and Mr. Cassano would continue to be cooperative with the investigation. In November 2007, AIG said the swaps had dropped by US$352 million in value, WSJ says. A Pricewaterhouse official said at an audit-committee meeting in January that the valuation process for the swaps "needs improvement from a control perspective," WSJ reports. Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. The Federal Reserve Bank of New York has extended to AIG a revolving credit facility up to US$85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The revolving credit facility will contain affirmative and negative covenants, including a covenant to pay down the facility with the proceeds of asset sales. The summary of terms also provides for a 79.9% equity interest in AIG. The corporate approvals and formalities necessary to create this equity interest will depend upon its form. In a statement, the company said "AIG is a solid company with over US$1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. S&P raised its ratings on preferred stock of International Lease Finance Corp. (ILFC; A-/Watch Dev/A-1) to 'BBB' from 'B', and revised the CreditWatch implications to developing from negative. All other ILFC ratings remain on CreditWatch with developing implications. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008, that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of US$5.36 billion compared to 2007 second quarter net income of US$4.28 billion. Second quarter 2008 adjusted net loss was US$1.32 billion, compared to adjusted net income of US$4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was US$13.16 billion, compared to net income of US$8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was US$4.88 billion, compared to adjusted net income of US$9.02 billion in the first six months of 2007. APPROVED PROPERTIES: Claims Filing Period Ends November 14 ---------------------------------------------------------- Creditors of Approved Properties Abroad Ltd. have until Nov. 14, 2008, 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: Robert Leonard Harry Knight Joint Liquidator Vantis Business Recovery Services Judd House 16 East Street Tonbridge Kent TN9 1HG England Robert Leonard Harry Knight and Mark Newman of Vantis Business Recovery Services were appointed joint liquidators of the company by the members and creditors on Sept. 29, 2008. BAUGUR GROUP: CEO Dismisses Administration Rumors ------------------------------------------------- Baugur Group dismissed media speculation that it was considering placing its UK holding company into administration, just-style.com says. On Monday, the Daily Telegraph reported that Baugur is exploring various options for the company, including a possible administration, and that it entered talks with advisers BDO Stoy Hayward. Baugur CEO Gunnar Sigurdsson however told just-style "We would like to make clear that Baugur has not appointed any advisers," adding "We continue to monitor the situation in Iceland, where possible maintain a dialogue with the banks and manage and plan our business accordingly. We have no plans to place our UK business into administration." The group, just-style.com relates, is currently in talks with retail entrepreneur Sir Philip Green over a possible investment in its UK portfolio following the collapse of Icelandic banking system last week. On Sunday, Baugur chairman Jon Asgeir Johannesson warned that the group's investment could "fall one after another" unless it completed a deal with Mr. Green to buy Baugur's debt from the Icelandic banks and the Government, the Daily Telegraph noted. Baugur Group -- http://baugur.com/-- is an international investment company in the retail and fashion sectors in the UK, the USA and Scandinavia. Companies related to Baugur employ some 53,000 people worldwide in over 3,700 stores with a total turnover of GBP5.0 billion. Among Baugur's principal investments are the supermarket chain Iceland, the toy retailer Hamleys, the jewellery chain Goldsmiths, fashion chains Whistles and Jane Norman, fashion company Mosaic Fashions, renowned UK department store chain, House of Fraser, the famous Danish department store chain Magasin du Nord and Illum, one of Denmark's largest department stores. BLUELA LTD: Brings in Liquidators from Vantis Business Recovery --------------------------------------------------------------- P. Atkinson and D. C. Wilson of Vantis Business Recovery Serviceswere appointed joint liquidators of Bluela Ltd. (t/a Saks Hairdressers) on Sept. 30, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached at: Bluela Ltd. Vantis Business Recovery Services 43-45 Butts Green Road Hornchurch Essex RM11 2JX England CHESS II: S&P Cuts Rating on Series 31 Notes to 'D' --------------------------------------------------- Standard & Poor's Ratings Services has lowered to 'D', removed from CreditWatch with negative implications, and then withdrawn its credit ratings on three constant proportion debt obligation (CPDO) transactions. At the same time, S&P has withdrawn the credit rating on one CPDO. The rating actions follow the spread widening and increasing volatility in the credit derivatives market, which have led to three CPDOs' net asset value (NAV) to fall below 10%. The 10% trigger is referred to as the "cash-out" trigger. Once, the NAV falls below 10% the transaction is unwound. The low NAV on the three affected transactions means that noteholders will suffer principal losses, so S&P lowered the ratings to 'D'. S&P also withdrew them. The rating assigned to Chess II Ltd. series 33 has been withdrawn at the issuer's request. Ratings Lowered, Removed From CreditWatch Negative, Withdrawn: Castle Finance I Ltd. -- US$100 Million Surf Constant Proportion Debt Obligation Notes Transaction To From ----------- -- ---- Series 8 D CCC/Watch Neg NR D Chess II Ltd. -- US$30 Million Surf Constant Proportion Debt Obligation Floating-Rate Notes Transaction To From ----------- -- ---- Series 30 D CCC/Watch Neg NR D Chess II Ltd. -- CHF200 Million Surf Constant Proportion Debt Obligation Fixed-Rate Notes Transaction To From ----------- -- ---- Series 31 D CCC/Watch Neg NR D Rating Withdrawn: Chess II Ltd. -- EUR50 Million Surf Constant Proportion Debt Obligation Notes Transaction To From ----------- -- ---- Series 33 NR B/Watch Neg E.B. CROWHURST: Calls in Liquidators from Mazars ------------------------------------------------ Simon David Chandler and Alistair Steven Wood of Mazars LLP were appointed joint liquidators of E.B. Crowhurst and Co. Ltd. on Sept. 25, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached at: E.B. Crowhurst and Co. Ltd. c/o Mazars LLP The Broadway Dudley DY1 4PY England EM FINANCIAL: Goes Into Administration; Buyer in the Sidelines -------------------------------------------------------------- Beacon Mortgage Packaging is poised to take over Em Financial's unoffered mortgage business pipeline as soon as administrators have been appointed to Em, mortgagesolutions-online.com reports. Mr. Roger Morris, Em managing director, said, "After much soul searching, we believe we have made the right decision and leave our unoffered pipeline business in the capable hands of Dave Symondson and his team at Beacon Mortgage Packaging." Mr. Symondson, Beacon Mortgage Packaging director, has announced that the negotiations have been successful. "As a result of this no broker need worry about the procuration income they were expecting from Em Financial on unoffered cases as this now becomes Beacon Mortgage Packaging's responsibility," Mr. Symondson added. F&C EVENT: To Propose Voluntary Liquidation in December 2008 ------------------------------------------------------------ F&C Event Driven Ltd will propose to put the company into voluntary liquidation during its extraordinary general meeting in December, Thomson Financial News reports. Forty-five percent of its assets are expected to be distributed to shareholders after the general meeting. The remaining assets will be distributed whenever possible. HBOS PLC: Lloyds CEO Aims to Complete Rescue Deal Immediately ------------------------------------------------------------- Eric Daniels, chief executive of Lloyds TSB, signaled Monday that he wanted to complete the all-share rescue deal of HBOS Plc as quickly as possible even though he had renegotiated the terms, The Financial Times reports. According to the report, Mr. Daniels told analysts that the large amount of fresh capital being raised by HBOS had meant that "we had to relook at the terms� saying the capital costs something. The Telegraph writes that HBOS is also placing GBP3 billion of preference shares with the Government. After both shares issues, HBOS tier 1 capital ratio will be 12%, a significant strengthening for a company that, according to Citigroup in September, had about GBP258 billion in customer deposits and lending GBP456 billion. The Telegraph comments that Lloyds gets to acquire HBOS that is stronger, but for a cheaper price. The Troubled Company Reporter-Europe reported on Oct. 14, 2008, that according to the Times Online, Lloyds TSB will raise about GBP5.5 billion, consisting of GBP4.5 billion in ordinary shares and GBP1 billion of preference shares. The ordinary shares will be sold for GBP173.3 each, also an 8.5% discount to last Friday's closing price. No dividends will be paid until the preference shares are paid off in full. Analysts at Cazenove cited by the Times Online speculated that this could take several years. Mr. Daniels, FT reports, added that Lloyds now had greater certainty and a narrower idea of potential fair value adjustments on HBOS' loan book which had come under greater scrutiny in the negotiations. He told analysts that he is pleased with the purchase. FT quotes one person familiar with the situation as saying that the deal had never been in serious danger of collapsing but it had become clear that HBOS had been hit by deteriorating market conditions since the first-half results and so the previous terms were no longer appropriate. Should the Lloyds-HBOS deal falls apart, the government is ready to address the problems at HBOS, including full-blown nationalization, FT relates. UBS, Citigroup and Merrill Lynch are advising Lloyds TSB on the deal and HBOS is being advised by Morgan Stanley and DrKW, FT adds. As cited by the TCR-Europe, Times Online and The Telegraph U.K. said that the U.K. government will bail out HBOS Plc by purchasing GBP8.5 billion of the company's shares at GBP113.6, an 8.5% discount to the company's closing price last Friday. Reuters said that the government has reserved GBP37 billion in taxpayers' money to rescue three major banks and become the banks' major shareholder. Bloomberg News reported Sunday that U.K. Prime Minister Gordon Brown's government will take majority stakes in Royal Bank of Scotland Group Plc and HBOS Plc. This will give the state control of a third of Britain's bank branches in an effort to contain the financial crisis, Bloomberg said citing two people familiar with the matter. About HBOS Plc HBOS Plc (LON: HBOS) is a United-Kingdom based company. It is the holding company of the HBOS Group. It operates through five divisions: Retail, Corporate, Insurance & Investment, International and Treasury & Asset Management. The company's Retail range of products includes personal and business banking products and services to 23 million customers. HOUSE OF EUROPE: Moody's Cuts Ratings on 4 Classes of Notes to 'C' ------------------------------------------------------------------ Moody's Investors Service has downgraded and left on review for possible downgrade the notes issued by House of Europe Funding V PLC: Class Description: EUR70,000,000 Class A-2 Floating Rate Notes due 2090 -- Prior Rating Aaa -- Prior Rating Date: 11/3/2006 -- Current Rating: Aa2, on review for possible downgrade Class Description: EUR70,000,000 Class A-3a Floating Rate Notes due 2090 -- Prior Rating: Aaa -- Prior Rating Date: 11/3/2006 -- Current Rating: Baa2, on review for possible downgrade Class Description: EUR15,000,000 Class A-3b Fixed Rate Notes due 2090 -- Prior Rating: Aaa -- Prior Rating Date: 11/3/2006 -- Current Rating: Baa3, on review for possible downgrade Class Description: EUR21,000,000 Class B House of Europe Funding V PLC Floating Rate Notes due 2090 -- Prior Rating: Aa2, on review for possible downgrade -- Prior Rating Date: 5/23/2008 -- Current Rating: B3, on review for possible downgrade In addition, Moody's also downgraded the ratings on these notes: Class Description: EUR21,000,000 Class C House of Europe Funding V PLC Deferrable Floating Rate Notes due 2090 -- Prior Rating: Caa1, on review for possible downgrade -- Prior Rating Date: 5/23/2008 -- Current Rating: C Class Description: EUR9,000,000 Class D House of Europe Funding V PLC Deferrable Floating Rate Notes due 2090 -- Prior Rating: Ca -- Prior Rating Date: 5/23/2008 -- Current Rating: C Class Description: EUR4,000,000 Class E1 House of Europe Funding V PLC Deferrable Floating Rate Notes due 2090 -- Prior Rating: Ca -- Prior Rating Date: 5/23/2008 -- Current Rating: C Class Description: EUR6,000,000 Class E2 House of Europe Funding V PLC Deferrable Floating Rate Notes due 2090 -- Prior Rating: Ca -- Prior Rating Date: 5/23/2008 -- Current Rating: C According to Moody's, these rating actions are as a result of the deterioration in the credit quality of the transaction's underlying collateral pool consisting primarily of structured finance securities. MICAP PLC: Petitions Court to Appoint Administrators ---------------------------------------------------- The Board of Micap plc, having carefully considered the financial position of the Company, has issued an application to the Court to appoint Administrators. In August 2008, the Board stated that negotiations with the Company's creditors were necessary to stabilize the Company's financial position. However, one particular creditor proceeded to issue a winding up petition. In the circumstances the Board felt it was a better course of action to apply to appoint Administrators to seek to achieve a better realization for creditors than on a winding up. The Administration application is due to be heard at 10.30 a.m. on Oct. 28, 2008, in the Manchester District Registry. Micap Encapsulates Ltd, the wholly owned subsidiary which manufactures and sells food ingredients from a plant in Athlone, Ireland, is unaffected by this action. PMI GROUP: Moody's Reviewing 'Ba1' Jr. Subordinated Debt Rating --------------------------------------------------------------- Moody's Investors Service is placing on review for possible downgrade the A3 insurance financial strength rating of the PMI Group's US and European mortgage insurance operations. Moody's has also placed the Baa3 senior unsecured debt and Ba1 junior subordinated debt ratings of the holding company, PMI Group, under review for possible downgrade. The Aa3 insurance financial strength rating of PMI Mortgage Insurance Ltd, the Australian mortgage insurer, remains under review for further downgrade pending the closing of the announced acquisition of PMI Australia and PMI Asia by QBE Insurance Group Ltd. Moody's said that these rating actions primarily reflect the rating agency's expectation of further stress on the company's risk-adjusted capital position in light of continued deterioration in housing fundamentals, as reflected in the upward revisions to Moody's loss expectations for certain residential mortgage-backed securities announced in September. Over the next several weeks, Moody's will update its evaluation of capital adequacy for the mortgage insurer. "This analysis will be based on updated information about the company's underlying portfolio performance, incorporating revised expectations about performance across different loan types" said Moody's senior vice president, Arlene Isaacs-Lowe. Moody's will consider updated estimates of capital adequacy in the context of potential capital strengthening measures or other strategies that may be under consideration at the company. The rating review will also incorporate Moody's consideration of the degree to which various initiatives being pursued at the US Federal level may serve to mitigate the rising trend of mortgage loan defaults. These ratings were placed on review for possible downgrade: * The PMI Group, Inc. -- senior unsecured debt at Baa3, junior subordinated debt at Ba1, provisional rating on senior unsecured debt at (P)Baa3, provisional rating on subordinated debt at (P)Ba1, and provisional rating on preferred stock at (P) Ba2; * PMI Mortgage Insurance Co. -- insurance financial strength at A3; * PMI Insurance Co. -- insurance financial strength at A3; * PMI Mortgage Insurance Company Limited -- insurance financial strength at A3. This rating remains under review for possible downgrade: * PMI Mortgage Insurance Ltd -- insurance financial strength at Aa3. The last rating action on PMI occurred on July 9, 2008 when the ratings were downgraded with a negative outlook. The PMI Group, Inc. (NYSE: PMI), headquartered in Walnut Creek, CA, is the holding company for PMI Mortgage Insurance Co., including its wholly owned subsidiaries and affiliated companies in Australia, Europe and Asia. The PMI Group, Inc. also owns a 50% interest in CMG Mortgage Insurance Co., a 42% interest in FGIC Corporation, and a 23.7% interest in RAM Reinsurance Company Ltd. Through its wholly owned subsidiaries and partial interest in affiliated companies, PMI offers residential mortgage insurance and credit enhancement products, financial guaranty insurance, and financial guaranty reinsurance. PMI has operations in Asia, Australia and New Zealand, Europe, and the United States. In Europe, PMI has offices in Milan, Italy, Brussels, Belgium, Frankfurt, Germany, and London, UK. ROYAL BANK: Gets GBP20 Bil. Cash Injection from UK Government ------------------------------------------------------------- The Royal Bank of Scotland Group Plc obtained a GBP20 billion (US$34 billion) lifeline from the British government in exchange for 60% of RBS, unless investors agree to purchase stock to be offered later this year at 65.5 pence apiece, Bloomberg News reports. The U.K. also will buy GBP5 billion of preference shares that pay 12% interest, Bloomberg News says. The company, the report discloses, won't pay any dividends until it repays the government- owned preference shares which it plans to repay within five years. Bloomberg News cited Finance Director Guy Whittaker as saying that RBS will pay about 1.3% more than the London interbank offered rate, or Libor, to guarantee some of its short- and medium-term borrowing. As part of the capital injection, the bank's chief executive, Fred Goodwin, will step down and will be replaced by Stephen Hester. Mr. Goodwin became RBS' CEO in 2000. Mr. Hester is currently British Land Company PLC's chief executive. Bloomberg News says Mr. Goodwin has waived his right to bonuses and compensation for early termination of his contract and won't receive about GBP1.2 million for forfeiting his 12-month notice period. He will continue to draw his salary until Mr. Hester takes over, helping the bank sell assets, reduce jobs and lessen its dependence on capital markets funding, the report relates. RBS investment and corporate banking head Johnny Cameron will also resign from the board immediately while Chairman Tom McKillop will step down at the bank's next shareholder meeting in April, according to Bloomberg News. RBS, the report relates, will not pay cash bonuses to executive directors this year and next. RBS has written down GBP5.9 billion of assets this year and posted a loss of GBP761 million in the first half of the year amid rising defaults and a slumping housing market in Britain and the U.S., where it lends to consumers and companies through its Citizens unit, Bloomberg News says. The bank, the report adds, may also take losses of as much as EUR500 million (US$673 million) on holdings tied to Icelandic banks, which were rescued by the island country's government last week. RBS meanwhile is in advanced talks with two buyers to sell its insurance business to bolster capital, cover additional credit writedowns and meet government criteria for insuring its short- and medium-term loans as part of Britain's plan to help unlock capital markets, Bloomberg News relates. Separately, The Associated Press reports that the Bank of China reaffirmed its strategic partnership with Royal Bank of Scotland on Monday following the British government's bailout of the ailing lender. According to AP, a consortium led by Royal Bank of Scotland paid US$3.1 billion for a 9.6% strategic stake in the Chinese bank in January 2006. "We will maintain strategic partner relations with RBS and jointly push forward the development of this strategic partnership," the Bank of China said in a statement cited by the AP. Headquartered in Edinburgh, Scotland, The Royal Bank of Scotland Group plc (RBS) -- http://www.rbs.com/-- is a holding company of The Royal Bank of Scotland plc (Royal Bank) and National Westminster Bank Plc (NatWest), which are United Kingdom-based clearing banks. The Company's activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On Oct. 17, 2007, RFS Holdings B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V. (ABN AMRO). In July 2008, the company disposed its entire interest in Global Voice Group Ltd. SEA VENTURES: Goes Into Administration -------------------------------------- Sea Ventures Ltd., a boat dealership, went into administration on Oct. 8, 2008, the BoatingBusiness reports. Administrators were appointed from Portland Business & Financial Solutions. According to the report, administrator Mike Field said Sea Ventures just didn't sell boats quick enough to keep their heads above water. Mr. Field is now looking for buyers for its 29 boats, the report relates. Sea Ventures Ltd. -- http://www.sea-ventures.co.uk/-- was the main Jeanneau agent (largest in the UK) for Yachts and Rigiflex safety boats and dinghies. The company is also the UK importer for Aquador powerboats, Sabre Motor Yachts, Back Cove powerboats and Rodman Muse Motor Yachts. * Fitch Lifts Support Floors on Eight UK Banks Over Gov't Support ----------------------------------------------------------------- The support measures announced by the UK government go beyond what has been announced to date by any other regulator or government and demonstrate an exceptionally strong commitment to underpin the stability of the UK financial sector, according to Fitch Ratings, which has upgraded the Support Floors on the following eight UK banks: -- Bank of Scotland plc; -- Barclays Bank plc; -- HSBC Bank plc; -- Lloyds TSB Bank plc; -- Royal Bank of Scotland plc; -- Abbey National plc; -- Nationwide Building Society; -- Standard Chartered Bank plc. Fitch's Support Rating Floors indicate a level below which the agency will not lower banks' long term Issuer Default Ratings. Over the coming days, Fitch will review the IDRs of those banks currently above the new Support Rating Floors and the Individual Ratings of all the named banks. This review will take into consideration the impact on the capital, funding and liquidity positions of the banks as well as the longer term outlook for a further deterioration of the operating environment in relevant markets. It will also consider whether any of the above mentioned institutions would, in line with Fitch's definitions, have failed without the measures taken by the UK authorities. Fitch will review measures taken by other national authorities in a similar way as details become available. Fitch has taken these rating actions on the UK banks listed below: Bank of Scotland plc -- Support Floor upgraded to 'AA-' from 'A-'; -- Support Rating affirmed at '1'. Barclays Bank plc -- Support Floor upgraded to 'AA-' from 'A-'; -- Support Rating affirmed at '1'. HSBC Bank plc -- Support Floor upgraded to 'AA-' from 'A-'; -- Support Rating affirmed at '1'. Lloyds TSB Bank plc -- Support Floor upgraded to 'AA-' from 'A-'; -- Support Rating affirmed at '1'. Royal Bank of Scotland plc -- Support Floor upgraded to 'AA-' from 'A-'; -- Support Rating affirmed at '1'. Abbey National plc -- Support Floor upgraded to 'AA-' from 'BBB+'; -- Support Rating upgraded to '1' from '2'. Nationwide Building Society -- Support Floor upgraded to 'AA-' from 'BBB+'; -- Support Rating upgraded to '1' from '2'. Standard Chartered Bank plc -- Support Floor upgraded to 'A-' from 'BB+'; -- Support Rating upgraded to '1' from '3'. * European Corporate Securitizations Remain Stable, S&P Reports --------------------------------------------------------------- Overall, the underlying credit quality of European corporate securitizations has continued to remain stable, according to an industry report card published by Standard & Poor's Ratings Services. In the six months since S&P's last European Corporate Securitization Industry Report Card, there have been a number of developments across the various sectors. In the U.K. pub sector, for instance, there have been two consecutive poor summer trading periods. In the social housing sector, there have been updated policy changes that will take effect in 2009. Finally, in the insurance-linked securities (ILS) sector, S&P updated the default table it used to rate insurance securitizations in May 2008. These developments led to several rating actions. Despite this, the historical stability continues to be evident on underlying transaction performance across the asset class as a whole. Overall, European corporate securitization transactions continue to perform in line with S&P's expectations. Over the past six months, downgrades only slightly outnumbered upgrades of S&P's underlying ratings (SPURs). Despite the difficult trading conditions predicted for the period ahead, S&P generally expects underlying asset performance to remain within its base-case estimates, although certain industries, e.g., pubs or motorway service stations, have struggled more than in recent memory. Additionally, S&P had seen rating actions on counterparties. Depending on the role of these counterparties, transactions may have also had their ratings affected. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. 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/booksto 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. Zora Jayda Zerrudo Sala, Pius Xerxes Tovilla, Joy Agravante, Melanie Pador, Marie Therese V. Profetana and Peter A. Chapman, Editors. Copyright 2008. 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$625 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 * * *