/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/081106.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 Thursday, November 6, 2008, Vol. 9, No. 221 Headlines A U S T R I A DEXIA-KOMMUNALKREDIT: Fitch Cuts Individual Rating to 'D' From 'C' GTE LLC: Claims Registration Period Ends November 19 ROGER KOOP: Claims Registration Period Ends November 17 NANOIDENT TECHNOLOGIES: Claims Registration Ends November 17 NANOIDENT ORGANIC: Claims Registration Period Ends Nov. 17 MARKETING TELESALES: Claims Registration Period Ends Nov. 17 G E R M A N Y ADVENTURE BALLOONING: Claims Registration Period Ends Nov. 11 ASK COMPUTER: Claims Registration Period Ends November 11 ATADO.DE GMBH: Claims Registration Period Ends November 12 DL GEBAUDESERVICE: Claims Registration Period Ends Nov. 11 HEIDELBERGCEMENT AG: Earns EUR2.1BB in First Nine Months of 2008 HEIDELBERGCEMENT AG: Fitch Cuts IDR to 'BB+'; Outlook Negative LANDESBANK BERLIN: Fitch Cuts Individual Rating to 'D' MEGA SUPERMARKT: Claims Registration Period Ends November 11 TAXI GMBH: Claims Registration Period Ends November 11 H U N G A R Y * Moody's Says IMF Package Will Ease Pressure on Hungarian Banks I C E L A N D LANDSBANKI ISLANDS: Moody's Reviews Junk Ratings for Downgrade K A Z A K H S T A N DEN-2002 LLP: Creditors Must File Proofs of Claim by Dec. 12 FAGOT & K: Creditors' Claims Deadline Slated for Dec. 12 GRIZLI LLP: Creditors' Claims Filing Period Ends Dec. 10 HLEBOROBNOYE LLP: Creditors Must Register Claims by Dec. 12 IMPEX STROY: Creditors' Claims Due on Dec. 12 GLOBAL PAY: Creditors Must File Proofs of Claim by Dec. 12 KAZAKHSKY ENERGETICHESKY: Claims Deadline Slated for Dec. 12 LIDERHOST KZ: Creditors' Claims Filing Period Ends Dec. 12 MAKSIMUM MEDIA: Creditors Must Register Claims by Dec. 10 PT PENOPLAST: Creditors' Claims Due on Dec. 10 K Y R G Y Z S T A N DEKA CJSC: Creditors Must File Claims by November 28 M A C E D O N I A * Fitch Changes Macedonia's Outlook to Stable L I T H U A N I A BITE FINANCE: Moody's Reviews Ratings for Possible Downgrade N E T H E R L A N D S LYONDELL BASELL: Fitch Affirms IDRs at 'B'; Outlook Negative P O R T U G A L BANCO PORTUGUES: Moody's Reviews D+ BFSR for Possible Downgrade R U S S I A KOLLEKTOR LLC: Creditor Must File Claims by November 31 MONOLITH GROUP OJSC: Moscow Bankruptcy Hearing Set March 17 NEFTE-REM-SERVIS CJSC: Court Names Temporary Insolvency Manager PRIVOLZHSKIY ABRASIVE: Creditor Must File Claims by November 31 PRO-MASH-OREL CJSC: P. Klimenko Named as Insolvency Manager PYATIGORSKAYA CONSTRUCTION: Claims Deadline Set on Dec. 31 ROS-TRUB-KONTRAKT: Yaroslavskaya Bankruptcy Hearing Set Dec. 3 STROY-VARIANT LLC: Creditors Must File Claims by December 31 TEKH-STANKO-PROM OJSC: Creditors Must File Claims by December 31 ZAONEZHSKAYA FORESTRY: Creditors Must File Claims by Dec. 31 * KALUGA RUSSIA: Fitch Assigns 'BB-' Currency Ratings * YAROSLAVL RUSSIA: Fitch Assigns 'BB-' Currency Ratings S P A I N BANKINTER SERIES: Fitch Holds Junk Rating on Class E Bankinter 12 CODERE SA: Moody's Changes Outlook on B1 CFR to Negative FONDO DE TITULIZACION: Fitch Cuts Class D Rating to 'B' FONDO DE TITULIZACION: Fitch Cuts Class F Tranche to 'C/DR6' S W I T Z E R L A N D EASTERN EUROPEAN: Creditors Must File Proofs of Claim by Nov. 16 HARTMUT BRAUN: Deadline to File Proofs of Claim Set Nov. 16 IMMOFINANZ SCHWYZ: Creditors Have Until Nov. 16 to File Claims METZGEREI BINER: Proofs of Claim Filing Deadline is Nov. 20 PC INVEST: Creditors' Proofs of Claim Due by Nov. 16 PRO-SENSE LLC: Nov. 19 Set as Deadline to File Claims SCHOGGIFACTORY BARBARA: Creditors Must File Claims by Nov. 16 TELLOSA IMMOBILIEN: Deadline to File Proofs of Claim Set Nov. 15 U K R A I N E AGRARIAN-INDUSTRIAL LLC: Creditors Must File Claims by Nov. 14 BEREZNA AGRICULTURAL: Creditors Must File Claims by Nov. 14 GOLDEN SNACK: Creditors Must File Claims by Nov. 14 MOBILE CONNECTION: Creditors Must File Claims by Nov. 14 NOVASEL-DNIEPROPETROVSK: Creditors Must File Claims by Nov. 14 OZON LTD: Creditors Must File Claims by Nov. 14 SMEREKA LLC: Under Bankruptcy Supervision Procedure Nov. 14 SPANEYTA-UKRAINE LLC: Creditors Must File Claims by Nov. 14 ZEBRA-UKRAINE LLC: Creditors Must File Claims by Nov. 14 U N I T E D K I N G D O M ABACROMBIE & CO: High Court Orders Winding Up Proceedings ACTIVE INSTORE: Appoints Joint Administrators from Tenon BURCHELL EDWARDS: Bought Out of Administration by Management COLLIER LITHO: Appoints Joint Administrators from Tenon Recovery CORGI INTERNATIONAL: Placed Two UK Units Into Administration CSW GROUP: Goes Into Administration; Seeks Potential Buyers FIRECHECK HOLDINGS: Taps BDO Stoy as Joint Administrators GOODMAN BAYLIS: Goes Into Administration Weeks After Buyout GUITEL LIMITED: Calls in Administrators from Tenon Recovery HANSON PLC: Fitch Cuts Senior Unsecured Rating to 'BB+' ICESAVE: FSCS Informs Customers on How to Claim Back Savings UPTON PACKAGING: Goes Into Administration VIRGIN MEDIA: Inks Two New Channel Carriage Deals with Sky * UK Business Failures Up 22% in First Nine Months, Experian Says * UK Automotive Insolvencies Up 18% in 3Q2008, Experian Says * October 2008 High Street Retail Activity Drops, Experian Says * R3 Predicts 41% Increase in UK Business Insolvencies for 2009 * Howard Flight Blames Banking Crisis on UK Gov't. Policy Failures * PwC Says Bank of England Should Cut Interest Rates * Fitch Says EU Sovereign Ratings Not Threatened By Bank Bail-Outs * Fitch Says EU Consumer Credit Decline to Affect Junior ABS Notes * Fitch Says Senior Tranches of European CLOs Resilient * Fitch: Severe Global Recession Expected in 2009 * Large Companies with Insolvent Balance Sheet ********* ============= A U S T R I A ============= DEXIA-KOMMUNALKREDIT: Fitch Cuts Individual Rating to 'D' From 'C' ------------------------------------------------------------------ Fitch Ratings downgraded Dexia-Kommunalkredit Bank AG's Long-term Issuer Default Rating (IDR) to 'BBB+' from 'A', Short-term IDR to 'F2' from 'F1' and Individual rating to 'D' from 'C'. Dexia-Kom's Support Rating has been affirmed at '2'. This rating action follows the announcement by majority shareholder, Dexia (rated 'AA-' (AA minus)/Outlook Stable), that Dexia-Kom's Slovakian subsidiary, Dexia Banka Slovensko (DBS), suffered a sizable loss in Q308 following a client-driven foreign currency transaction. The downgrade of Dexia-Kom's Individual rating reflects evidenced weaknesses in the bank's risk management system, diminished financial flexibility due to the loss and its somewhat stretched capitalization. Following the announced loss, Dexia replaced DBS's Chief Executive and announced a capital increase at Dexia-Kom. Kommunalkredit Austria AG (rated 'A+'/Outlook Stable), Dexia-Kom's other core shareholder, will participate in the capital increase. Dexia expects Dexia-Kom's loss to amount to EUR82 million (excluding minorities), which is sizable in proportion to the bank's capital base (EUR376 million Fitch eligible capital at end- H108). Fitch considered Dexia-Kom's capitalization (before the reported loss) as just adequate with a Fitch eligible capital ratio of 7.06% at end-H108. On a pro-forma basis, Dexia-Kom's capital ratios are likely to be below the ratios reported at end- H108 despite the planned capital increase. Fitch acknowledges the planned capital support of Dexia-Kom from its shareholders, Dexia and Kommunalkredit Austria, and as a result Dexia-Kom's IDRs are now based on institutional support from its majority shareholder, rather than the Individual rating. Dexia-Kom is a joint venture between Dexia Credit Local (DCL, owning 50.84%) and Kommunalkredit Austria, which is also in charge of the management and operations of Dexia-Kom. Dexia-Kom focuses on public-sector financing in central and eastern Europe and has a notable presence in Slovakia, Poland, Hungary, the Czech Republic, Croatia, Bulgaria and Romania. Dexia-Kom holds 84.4% in DBS, which accounts for a large share of Dexia-Kom's operations. GTE LLC: Claims Registration Period Ends November 19 ---------------------------------------------------- Creditors owed money by LLC GTE (FN 112907s) have until Nov. 19, 2008, to file written proofs of claim to the court- appointed estate administrator: Stefan Jahns Gonzagagasse 15 1010 Vienna Austria Tel: 532 17 11, Fax: 532 17 11 11 E-mail: kanzlei@jahns.co.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 09.45 a.m. on Dec. 15, 2008, for the examination of claims at: Trade court of Vienna Room 1606 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Oct. 1, 2008, (Bankr. Case No. 4 S 138/08h). ROGER KOOP: Claims Registration Period Ends November 17 ------------------------------------------------------- Creditors owed money by LLC Roger Koop (FN 109643s) have until Nov. 17, 2008, to file written proofs of claim to the court- appointed estate administrator: Dr. Hannelore Pitzal Paulanergasse 9 1040 Vienna Austria Tel: 587 31 11 587 31 12 Fax: 587 87 50 50 E-mail: office@pitzal-partner.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 09.45 a.m. on Dec. 1, 2008, for the examination of claims at: Trade court of Vienna Room 1606 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Oct. 2, 2008, (Bankr. Case No. 3 S 101/08k). NANOIDENT TECHNOLOGIES: Claims Registration Ends November 17 ------------------------------------------------------------ Creditors owed money by JSC NanoIdent Technologies (FN 245032t) have until Nov. 17, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Rudolf Anton Mitterlehner Landstrasse 9 4020 Linz Austria Tel: 0732/771653-0 Fax: 0732/771653-18 E-mail: office@bom.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:00 a.m. on Dec. 9, 2008, for the examination of claims at: Land Court of Linz Room 522 Linz Austria Headquartered in Linz, Austria, the Debtor declared bankruptcy on Oct. 2, 2008 (Bankr. Case No. 12 S 81/08m). NANOIDENT ORGANIC: Claims Registration Period Ends Nov. 17 ---------------------------------------------------------- Creditors owed money by LLC Nanoident Organic Fab (FN 274653b) have until Nov. 17, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Rudolf Anton M4 Landstrasse 9 4020 Linz Austria Tel: 0732/771653-0 Fax: 0732/771653-18 E-mail: office@bom.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11.30 a.m. on Dec. 1, 2008, for the examination of claims at: Land Court of Linz Room 522 Linz Austria Headquartered in Linz, Austria, the Debtor declared bankruptcy on Oct. 2, 2008, (Bankr. Case No. 12 S 82/08h). MARKETING TELESALES: Claims Registration Period Ends Nov. 17 ------------------------------------------------------------ Creditors owed money by Mg Marketing Telesales Ltd (FN 305185b) have until Nov. 17, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Stephan Riel Landstrasser Hauptstrasse 1/2 1030 Vienna Austria Tel: 713 44 33 Fax: 713 10 33 E-mail: kanzlei@jsr.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:30 a.m. on Dec. 1, 2008, for the examination of claims at: Trade court of Vienna Room 1705 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Oct. 2, 2008, (Bankr. Case No. 3 S 95/08b). ============= G E R M A N Y ============= ADVENTURE BALLOONING: Claims Registration Period Ends Nov. 11 ------------------------------------------------------------- Creditors of Adventure Ballooning GmbH have until Nov. 11, 2008, to register their claims with court-appointed insolvency manager Dr. Hans Joerg Laudenbach. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Dec. 11, 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 Giessen Hall 406 Building B Gutfleischstrasse 1 35390 Giessen 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. Hans Joerg Laudenbach Carlo Mierendorff Strasse 15 35398 Giessen Germany Tel: 0641/98292-18 Fax: 0641/98292-16 The District Court of Giessen opened bankruptcy proceedings against Adventure Ballooning GmbH on Sept. 30, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Adventure Ballooning GmbH Untergasse 20 35321 Laubach Germany Attn: Ruthard Bernd Wolf, Liquidator Feuerbachstrasse 24 63452 Hanau Germany ASK COMPUTER: Claims Registration Period Ends November 11 --------------------------------------------------------- Creditors of Ask Computer Electronic GmbH have until Nov. 11, 2008, to register their claims with court-appointed insolvency manager Markus Ernestus. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Dec. 6, 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 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: Markus Ernestus O 3 11+12 68161 Mannheim Germany Tel: (06 21) 53 39 220 The District Court of Karlsruhe opened bankruptcy proceedings against Ask Computer Electronic GmbH on Oct. 9, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Ask Computer Electronic GmbH Attn: Ruediger Schmidt, Manager Sperberstr. 6 68753 Waghausel Germany ATADO.DE GMBH: Claims Registration Period Ends November 12 ---------------------------------------------------------- Creditors of ATADO.de GmbH have until Nov. 12, 2008, to register their claims with court-appointed insolvency manager Stefan Ebeling. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Dec. 10, 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 Braunschweig E 01 Martinikirche 8 38100 Braunschweig 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: Stefan Ebeling Kurt-Schumacher-Strasse 21 D 38102 Braunschweig Germany Tel: (05 31) 2 43 68 26 Fax: (05 31) 24 36 83 31 E-mail: inso@ra-sp.de The District Court of Braunschweig opened bankruptcy proceedings against ATADO.de GmbH on Sept. 19, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: ATADO.de GmbH Attn: Andreas Gollnick, Manager Am Hauptgueterbahnhof 38126 Braunschweig Germany DL GEBAUDESERVICE: Claims Registration Period Ends Nov. 11 ---------------------------------------------------------- Creditors of DL GebAudeservice GmbH have until Nov. 11, 2008, to register their claims with court-appointed insolvency manager Jan- Michael Lippe. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Dec. 22, 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 Saarbruecken Area Hall 24 Branch Office Sulzbach Vopeliusstrasse 2 66280 Sulzbach 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: Jan-Michael Lippe Bahnhofstrasse 101 66111 Saarbruecken Tel: (0681) 976 1900 Fax: (0681) 976 190 111 The District Court of Saarbruecken opened bankruptcy proceedings against DL GebAudeservice GmbH on Oct. 13, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: DL GebAudeservice GmbH Attn: Guiseppe Bertucci, Germany Bruehlstr. 23 66119 Saarbruecken Germany HEIDELBERGCEMENT AG: Earns EUR2.1BB in First Nine Months of 2008 ---------------------------------------------------------------- HeidelbergCement AG released its interim report for January-September 2008. Interim Report Highlights: * Group turnover increases to EUR10.8 billion (+49%) * Operating income rises to EUR1.6 billion (+15.6%) * Realization of synergies from the Hanson integration is proceeding as planned * Immediate cost savings measures complement the "Fitness 2009" program * Turnover and result forecast confirmed, while risks arising form strongly fluctuating exchange rates, volatile energy costs and the potential for further economic weakening still exists Slowdown in Global Growth In the first nine months, Group turnover increased by 49.0% to EUR10,809 million (previous year: 7,254). This was due to the inclusion of Hanson, in particular, but the countries of Eastern Europe as well as the Benelux countries, Scandinavia, Germany, Indonesia, China, and Turkey also contributed to this growth. Excluding exchange rate and consolidation effects, the increase in turnover amounted to 6.3%. Operating income rose by 15.6% to EUR1,552 million (previous year: 1,343). In the first nine months of 2008, the cement and clinker sales volumes of HeidelbergCement rose by 4.6% to 68.5 million tonnes (previous year: 65.5). Excluding consolidation effects, a slight increase of 0.3% was recorded. Deliveries of aggregates more than doubled, reaching 229.4 million tonnes (previous year: 98.4). Ready-mixed concrete sales volumes grew by 58.8% to 33.7 million m3 (previous year: 21.2). Overall, the profit for the financial year increased to EUR2,079.2 million (previous year: 1,901.2). Consequently, the Group share of profit rose to EUR1,984.7 million (previous year: 1,828.7). Realization of Synergies Proceeding as Planned The cornerstones of the process of integrating the Hanson Group were completed by the middle of the year. Far-reaching changes were consistently implemented starting with the restructuring of our organizations in North America and the United Kingdom. Despite the considerable adverse effects of the market development in the US and United Kingdom, the realization of synergies is proceeding as planned. In particular, progress was achieved in bringing together all purchasing activities, standardizing IT and optimizing production structures. A contribution of around EUR135 million for the whole year only partially compensates for the decline in results caused by market-related factors. HeidelbergCement Makes Additional Savings The Group said it has already responded to the weak global growth at an early stage with the "Fitness 2009" program. The anticipated further optimization and efficiency increase in all business lines and the reduction of the administrative costs are expected to generate savings of EUR250 million per year. In addition, the Group disclosed it has addressed the considerable deterioration of the international economy in the past few weeks by introducing further cost-saving measures that will take effect immediately. Despite this, it noted that it has already adjusted at an early stage its structures in the U.S. and United Kingdom to the significantly lower market level in 2008/2009 because of the massive declines on the property markets. The resulting cost reductions will partially take effect this year; their full impact will come in 2009. Prospects The current situation is further characterized by uncertainties on the financial markets and the increasing burdens on the real economy. The forecasts for general economic development have therefore been reduced worldwide. Decisive parameters such as exchange rates and energy prices are more volatile than ever. In this now more difficult environment, HeidelbergCement has fully achieved its internal efficiency improvement and cost reduction goals of the Hanson integration. In addition, in the US and United Kingdom, the adjustment of capacities and optimization of locations are being implemented quickly and are therefore already having a positive impact on costs this year. "As a result of the increasingly deteriorating market situation, we have decided to introduce further cost-saving measures that will take effect immediately, in addition to the "Fitness 2009" program with annual savings of EUR250 million," says Dr Bernd Scheifele, Chairman of the Managing Board. "We will continue to pursue our policies consistently and with a high degree of discipline. We are using free cash flow to reduce our liabilities. For the whole of 2008, we expect a noticeable improvement in Group turnover despite the significant decline in the US and United Kingdom," says Dr Scheifele. The increase is attributable to positive contributions from Europe and the emerging countries as well as consolidation-related growth. Currently, HeidelbergCement assumes to meet its results target. Risks in this context stem from strongly fluctuating exchange rates, volatile energy costs and the potential for further economic weakening. About HeidelbergCement Based in Heidelberg, Germany, HeidelbergCement AG -- http://www.heidelbergcement.com/-- is a global producer of cement, concrete and building materials. The company's core activities include the production and distribution of cement and aggregates, the two raw materials for concrete. It is also engaged in in the provision of such products as ready-mixed concrete, as well as concrete products and elements. In 2007, the company took over Hanson Group. * * * As reported in the Troubled Company Reporter-Europe on Oct. 28, 2008, Standard & Poor's Ratings Services has lowered its long- and short-term corporate credit ratings to 'BB+/B' from 'BBB-/A-3' on Germany-based cement producer HeidelbergCement AG (HC). At the same time, S&P placed all the ratings on CreditWatch with negative implications. On Oct. 27, 2008, the TCR-Europe reported that Moody's Investors Service has downgraded HeidelbergCement's (HC) long-term ratings to Ba1 and the short term rating from P-3 to NP. The outlook for the ratings is negative. In accordance with its established practices, Moody's concurrently assigned a Ba1 Corporate Family Rating to HC and expects to withdraw the long- term issuer rating shortly. The ratings of HC's EMTN program and outstanding and guaranteed bonds are lowered to Ba1. HEIDELBERGCEMENT AG: Fitch Cuts IDR to 'BB+'; Outlook Negative -------------------------------------------------------------- Fitch Ratings downgraded Germany-based HeidelbergCement AG's (HC) Long-term Issuer Default (IDR) and senior unsecured ratings to 'BB+' from 'BBB-' (BBB minus). The Short-term IDR has also been downgraded to 'B' from 'F3'. The Outlook on the Long-term IDR remains Negative. At the same time, Fitch has downgraded subsidiary Hanson plc's (Hanson) senior unsecured rating to 'BB+' from 'BBB-' (BBB minus). The downgrade reflects Fitch's view that tight credit markets, coupled with continued difficult trading conditions in the US construction market and a slowdown or decline in some European markets, will undermine HC's credit metrics over the next two years. In Fitch's view, this could lead to substantial reduction in headroom under existing debt covenants or even a potential covenant breach. The ratings continue to reflect HC's strong operational profile and leading market positions in cement and aggregates, which are essential for establishing a solid market presence in downstream activities such as ready-mixed concrete and concrete products. The group enjoys good diversification by geography -- with presence in 50 countries -- and by end-market. The Negative Outlook reflects the sizable refinancing risk facing HC for its EUR5 billion tranche B Hanson acquisition facility, maturing in May 2010. It also reflects potential further negative pressure on cash flow generation and credit metrics stemming from a more protracted adverse economic environment than currently envisaged. For the Outlook to return to Stable, Fitch will assess HC's success in mitigating the refinancing risk and the company's operating performance compared with Fitch's expectations. In its commentary dated August 7, 2008, Fitch had flagged that a lack of progress in net debt reduction, resulting in a net debt/EBITDA above 3x by FYE10, would likely trigger a single-notch downgrade. The downgrade reflects the revision of Fitch's forecasts, which show net leverage rising above 3x by FYE08. Fitch's forecast assumptions include a possible decline in revenue of up to 4% in 2009 and a flat performance in 2010; slightly deteriorating EBITDA margins up to 2010 and a downward revision of capex spending in 2009. H108 revenue grew 9.2% (10.6% in Q108, 10.7% in FY07) on a like- for-like basis, thanks to solid growth in Europe and emerging markets, which offset a 8.2% decline in north America. However, consolidation of the lower-margin Hanson, which is seasonally weaker in H1, and negative trading conditions in north America affected HC's overall operating income before depreciation margin. The latter declined to 18.4% in H108 from 21% in H107. Proceeds from asset sales and a capital increase in H108 reduced total debt to EUR13 billion at end-H108 from EUR15.5 billion at FYE07. HC is expected to continue to reduce debt during 2008, mainly through cash flow generation. A EUR1 billion bond issued in January 2008 refinanced part of the Hanson acquisition loan. LANDESBANK BERLIN: Fitch Cuts Individual Rating to 'D' ------------------------------------------------------ Fitch Ratings downgraded Germany-based Landesbank Berlin AG's (LBB) Individual rating to 'D' from 'C/D'. The Long- and Short- term Issuer Default ratings (IDR) are affirmed at 'AA-' (AA minus) with Stable Outlook and 'F1+', respectively. The Support rating and Support Rating Floor are affirmed at '1' and 'AA-' (AA minus), respectively. LBB's guaranteed obligations are affirmed at 'AAA', based on the grandfathering of the guarantee provided by its owners. The downgrade reflects Fitch's view of the bank's capacity to absorb problems that, in Fitch's opinion, seem more likely to arise in a weakening operating environment. Fitch considers the bank's eligible capital ratio of 5.65% (based on Landesbank Berlin Holding AG's) as modest, and its high leverage to be a constraining factor in the group's ability to deal with deteriorating market conditions. Although declining, the bank's legacy real estate portfolio remains sizaable and its high NPL ratio and low reserve coverage leave the bank potentially vulnerable to adverse changes in property values. Fitch acknowledges the almost full collateralized nature of these exposures, and no incidence of problem loans from more recent new lending business, but considers that continued successful workouts may be more challenging to achieve in a weakening operating environment. In addition, LBB's sizable capital markets exposure has resulted in heightened market risks relative to its equity base. Given the recent market developments and its investment exposure, Fitch anticipates some further pressure on the bank's profitability. At the same time, the Individual rating reflects the bank's strong market share in Berlin, its strong retail banking franchise and solid funding and good liquidity position. It also reflects the operational support and business opportunities arising from its links to German savings banks, which represent the bank's indirect majority shareholder since August 2007 with a share of 98.6%. LBB's liquidity position benefits from its stable retail customer deposit franchise as well as from high liquidity reserves. LBB's operating profitability is increasingly driven by its commercial real estate business, and would benefit from a strengthening of its more stable retail and corporate banking business. Profitability in 2007 and H108 has been burdened by valuation losses in LBB's capital markets business. A large part of this impact relates to credit spread widening rather than permanent impairment and Fitch notes LBB's low exposure to US sub-prime related assets. LBB's IDR remains at its Support Rating Floor, reflecting Fitch's opinion on the extremely high likelihood of external support being made available by DSGV oe.K., ie Germany's savings banks (S- Group), if ever required. Fitch expects that such support would be channelled through the public banking sector's institutional protection scheme for Germany's savings banks. Should the resources of S-Group ever prove insufficient, Fitch would expect sovereign support to flow through S-Group. Given S-Group's public sector ownership and key position in Germany's fragmented financial sector, Fitch sees an extremely high probability of support for S-Group from the German authorities in case of need. LBB's business model is centered on four operating customer business segments, namely retail and corporate banking, commercial real estate financing and capital markets. At end-June 2008 LBB employed 5,969 full-time staff. MEGA SUPERMARKT: Claims Registration Period Ends November 11 ------------------------------------------------------------ Creditors of Mega Supermarkt GmbH have until Nov. 11, 2008, to register their claims with court-appointed insolvency manager Dr. Martin Dreschers. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Dec. 15, 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 Room D 1.409 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. Martin Dreschers Juelicher Strasse 116 52070 Aachen Tel: 0241/94618-0 Fax: 0241/533562 The District Court of Aachen opened bankruptcy proceedings against Mega Supermarkt GmbH on Oct. 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Mega Supermarkt GmbH Adalbertsteinweg 38-40 52070 Aachen Germany Attn: Yilmaz Karadag, Manager Scheibenstr. 26 52070 Aachen Germany TAXI GMBH: Claims Registration Period Ends November 11 ------------------------------------------------------ Creditors of Taxi GmbH Nordheide have until Nov. 11, 2008, to register their claims with court-appointed insolvency manager Gregor Schoene. Creditors and other interested parties are encouraged to attend the meeting at 9:40 a.m. on Dec. 11, 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 Tostedt Meeting Room I Area CE.02 Linden 23 21255 Tostedt 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: Gregor Schoene Haferweg 22 D 22769 Hamburg Germany Tel: 040 / 89 71 86-0 Fax: 040 / 89 71 86-11 The District Court of Tostedt opened bankruptcy proceedings against Taxi GmbH Nordheide on Oct. 2, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Taxi GmbH Nordheide Attn: Robbie Patke, Manager Tiedemannsweg 2 d 21244 Buchholz Germany ============= H U N G A R Y ============= * Moody's Says IMF Package Will Ease Pressure on Hungarian Banks ---------------------------------------------------------------- Moody's Investors Service said it expects the EUR20 billion package made available to Hungary by the International Monetary Fund (IMF), the European Union and the World Bank to support the government's efforts to alleviate the stress experienced in the Hungarian financial markets and strengthen the financial sector. In Moody's view, the financial package -- which reinforces the recent efforts of the Hungarian authorities and the European Central Bank to support liquidity on the country's financial markets -- should ease the pressure experienced by the Hungarian banking sector in October 2008. Yet some of its expected benefits are likely to materialize gradually and positive rating actions are not envisaged as a direct result of this package. "The growth of the Hungarian banking system has been driven in recent years by strong foreign currency lending to both corporates and retail clients. At end-2007, more than 60% of all outstanding loans were denominated in foreign currencies, this percentage amounting to more than 90% for mortgage and home equity loans originated in recent years (mainly Swiss francs denominated loans). The significant weakening of the forint in October 2008 increased banks' credit risk, while it became more difficult and expensive for them to hedge open FX positions on their balance sheets," explained Gabriel Kadasi, lead analyst at Moody's for Hungarian banks. The financial package is aimed not only at providing budget support but at securing adequate domestic and foreign currency liquidity, as well as strong levels of capital for the banking system. Moody's expects the package will help restore the confidence in Hungary and improve the liquidity and access of Hungarian banks' to foreign currency funding. Although uncertain at this stage, if direct support will be provided to individual banks as part of the agreed package, such support is unlikely to result in a positive rating action primarily as i) all rated banks in Hungary already benefit from a certain level of systemic support and ii) a governmental intervention might reveal fundamental weaknesses that had not been identified and reflected in the bank's rating. "We continue to view the outlook for the direction of fundamental credit conditions in the banking system for the next 12 to 18 months as negative," Mr. Kadasi added. The principal factors underpinning Moody's view are as follows: (i) the fiscal measures planned by the government and the decline in lending activity will translate into a further slowdown in economic growth; (ii) as a result, the Hungarian banks may experience a deterioration in asset quality in both their retail and corporate loan portfolios, which will weigh on their profitability and capital-generating ability; (iii) growth in revenue generation might be sluggish given the worsening operating environment and stricter lending criteria; and (iv) the banks will face higher costs of funding and tight liquidity. The potential volatility of the forint going forward also remains a risk factor. The anticipated slowdown in Hungarian banks' lending will also be driven by expected changes in their foreign currency lending. During the recent market turbulence, many banks suspended or significantly limited their foreign currency loans, especially those in Swiss francs and Japanese yen. However, Moody's does not expect foreign currency lending to disappear in Hungary, as it is significantly cheaper for banks' customers to borrow in foreign currency than in forint. In Moody's view, the slower growth of the banking sector is not necessarily a negative factor in itself after the rapid growth of recent years, as it will allow the banks to fine-tune their risk management systems and clean up their seasoning loan portfolios. However, some banks may face downward rating pressure if their financial fundamentals deteriorate rapidly or their market position weakens substantially. Moody's also cautions that most Hungarian banks are foreign-owned and their high reliance on parental funding makes them vulnerable to developments affecting their parent. Thus, possible changes to the parent's ratings could have also negative implications for the debt and deposit ratings of Hungarian banks, as most of these banks benefit from parental support as per Moody's methodology. ============= I C E L A N D ============= LANDSBANKI ISLANDS: Moody's Reviews Junk Ratings for Downgrade -------------------------------------------------------------- Moody's Investors Service placed the Caa1 long-term deposit and Caa2 debt ratings of Landsbanki Islands hf (Landsbanki) on review for possible downgrade. The review status of these ratings thus replaces the developing outlook assigned to them on October 8, 2008. Landsbanki's bank financial strength rating (BFSR) of E and short-term ratings of Not Prime are already at the lowest possible level and were affirmed. The outlook on the BFSR is now stable. The rating action reflects Moody's view that there is significant downward pressure on Landsbanki's deposit and debt ratings given the latest developments. When Moody's initially assigned the developing outlook, this reflected the high uncertainty in respect of the likelihood and extent of future governmental support for Landsbanki as well as the future viability of the bank's franchise. Landsbanki's domestic assets and deposits have since been transferred to a newly formed bank -- fully owned by the Icelandic Government with the formal name of New Landsbanki Islands hf (New Landsbanki, not rated). As a result, Moody's now views Landsbanki as highly unlikely to receive government support. For the same reason, Moody's also believes that Landsbanki's franchise has been severely impaired. Moody's rating review will be focused on the restructuring process of the bank and the recovery rate of defaulted deposits and senior debt. However, no details have been published yet on the balance sheet structure of both banks. Moody's notes that for the time being no coupons or bonds will be paid pending the restructuring of Landsbanki, including all payments due on foreign-currency-denominated bonds issued by the bank. Moody's previous rating action on Landsbanki was on October 8, 2008, when it was downgraded to Caa1/NP/E from A2/P-1/C-. Headquartered in Reykjavik, Iceland, Landsbanki reported total assets of ISK3,970 billion (EUR32 billion) at the end of June 2008. =================== K A Z A K H S T A N =================== DEN-2002 LLP: Creditors Must File Proofs of Claim by Dec. 12 ------------------------------------------------------------ The Specialized Inter-Regional Economic Court of North Kazakhstan has declared LLP DEN-2002 insolvent. Creditors have until Dec. 12, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of North Kazakhstan Jumabayev Str. 102-25 Petropavlovsk North Kazakhstan Kazakhstan FAGOT & K: Creditors' Claims Deadline Slated for Dec. 12 -------------------------------------------------------- The Specialized Inter-Regional Economic Court of Aktube has declared LLP Fagot & K insolvent. Creditors have until Dec. 12, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Aktube Altynsarin Str. 31 Aktobe Aktube Kazakhstan Tel: 8 (3132) 21-30-32 GRIZLI LLP: Creditors' Claims Filing Period Ends Dec. 10 -------------------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty has declared LLP Grizli insolvent on April 18, 2008. Creditors have until Dec. 10, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Almaty Room 317 Tole bi Str. 295 Almaty Kazakhstan Tel: 8 701 772 00-03 8 777 562 62-33 HLEBOROBNOYE LLP: Creditors Must Register Claims by Dec. 12 ----------------------------------------------------------- The Specialized Inter-Regional Economic Court of Akmola has declared LLP Hleborobnoye insolvent. Creditors have until Dec. 12, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Akmola Room 228 Auelbekov Str. 139a Kokshetau Akmola Kazakhstan Tel: 8 (7162) 25-79-32 IMPEX STROY: Creditors' Claims Due on Dec. 12 --------------------------------------------- LLP Construction Company Impex Stroy has declared liquidation. Creditors have until Dec. 12, 2008, to submit written proofs of claims to: LLP Construction Company Impex Stroy Micro District Samal-2, 16b-20 Almaty Kazakhstan GLOBAL PAY: Creditors Must File Proofs of Claim by Dec. 12 ---------------------------------------------------------- LLP Global Pay Lapyc has declared liquidation. Creditors have until Dec. 12, 2008, to submit written proofs of claims to: LLP Global Pay Lapyc Ospanov Str. 54/1-7 Aktobe Aktube Kazakhstan Tel: 8 (7132) 51-10-51 KAZAKHSKY ENERGETICHESKY: Claims Deadline Slated for Dec. 12 ------------------------------------------------------------ LLP Kazakhsky Energetichesky Injenerny Center (Kazakh Energy Engineer Center) has declared liquidation. Creditors have until Dec. 12, 2008, to submit written proofs of claims to: LLP Kazakhsky Energetichesky Injenerny Center Jandosov Str. 59v-33 Almaty Kazakhstan LIDERHOST KZ: Creditors' Claims Filing Period Ends Dec. 12 ---------------------------------------------------------- LLP Company Liderhost KZ has declared liquidation. Creditors have until Dec. 12, 2008, to submit written proofs of claims to: LLP Company Liderhost KZ Kalinin Str. 28-25 Temirtau Karaganda Kazakhstan MAKSIMUM MEDIA: Creditors Must Register Claims by Dec. 10 --------------------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty has declared LLP Maksimum Media insolvent on Sept. 23, 2008. Creditors have until Dec. 10, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Almaty Rayimbek ave. 12 Erkin Talgarsky Almaty Kazakhstan PT PENOPLAST: Creditors' Claims Due on Dec. 10 ---------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty has declared LLP PT Penoplast insolvent on May 19, 2008. Creditors have until Dec. 10, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Almaty Room 317 Tole bi Str. 295 Almaty Kazakhstan Tel: 8 701 772 00-03 8 777 562 62-33 =================== K Y R G Y Z S T A N =================== DEKA CJSC: Creditors Must File Claims by November 28 ---------------------------------------------------- CJSC Advertisement Agency Deka has declared insolvency. Creditors have until Nov. 28, 2008, to submit written proofs of claim. Inquiries can be addressed to (+996 312) 59-17-47. ================= M A C E D O N I A ================= * Fitch Changes Macedonia's Outlook to Stable --------------------------------------------- Fitch Ratings has revised the Outlook on the Republic of Macedonia's foreign currency and local currency Issuer Default Ratings (IDR) to Stable from Positive. The agency has affirmed the IDRs at 'BB+', the Short-term foreign currency rating at 'B' and the Country Ceiling at 'BBB-'. "The downward revision in the rating Outlook to Stable reflects both a marked widening in the current account deficit this year at a time when financing is becoming more uncertain and adverse political events that make the prospect of Macedonia's EU accession more distant," says Chris Pryce, Director in Fitch's European sovereigns group. Macedonia has experienced a series of political shocks this year. In April, its application for NATO membership was rejected due to the Greek government's objection to the use of Macedonia as the country's name. Many commentators expect that Greece will also refuse to support the EU setting a start date for accession negotiations. The road map and final destination of EU accession provides important economic benefits and an anchor to political stability, particularly in view of the country's ethnic tensions and potential instability in neighboring countries, including Kosovo. Additionally, the handling of national elections this year (effectively a major EU benchmark for Macedonia) was poor. There was sporadic violence and open corruption in some areas which forced second and subsequent elections to be held in a number of constituencies. Local and provincial elections to be held next spring will be closely watched by both domestic and international observers to see if the malign influence of local groups/parties in the worst affected areas has been curbed. Macroeconomic risks have also increased this year. Fitch's main concern is the rapid widening in the current account deficit (CAD), which Fitch projects to reach around 12% of GDP this year, compared with just 3% in 2007 and a virtual balance in 2006. On current macroeconomic policy settings, Fitch expects only a moderate improvement in 2009 and 2010, helped by lower oil prices. On the other hand, the slowdown in the EU economy poses downside risks to exports and remittances (equivalent to around 15% of GDP), which Fitch expects to fall 3% this year. Foreign direct investment has remained relatively strong and could finance around half the CAD this year. However, private sector external borrowing, including by the banks, is rising. Moreover, the global credit crunch will make it more difficult for Macedonia to secure the capital inflows it needs to finance the CAD, risking downward pressure on foreign exchange reserves, which have fallen as a ratio of imports this year, and ultimately could put pressure on the exchange rate, which has been pegged to the euro for over a decade. A major driver of the widening in the CAD has been the exceptional growth in credit to the private sector, admittedly from a low base. This grew by almost 40% in 2007 and despite central bank- induced increases in interest rates and a rather ineffectual cap on loans (set at 40%), as yet has given no clear indication of slackening, though this is likely as capital inflows wane. The government has also contributed to pressures on inflation and the CAD through its expansionary supplementary budget, which increased expenditure. Fitch expects the budget deficit to widen somewhat to about 1.5% of GDP this year from 1.1% in 2007. Further expenditure increases are planned for 2009. Macedonia's rating continues to be underpinned by its moderate and declining government debt-to-GDP ratio, which was 25% at end-2007, below the 'BB' category median of 35%. Other strengths include a moderate external debt ratio and a track record of macroeconomic stability. Economic growth has strengthened in recent years, and Fitch forecasts real GDP growth of about 6% in 2008, up from 5.1% in 2007 and 4% in 2006. However, the global economic slowdown is likely to cause a slowdown in 2009. Recent governments have pursued some reforms in the area of taxation, bureaucratic and judicial reform although much remains to be done before these will have the fully desired impact on economic performance. Macedonia rose to 71st in the World Bank Ease of Doing Business Survey for 2009, up from 79th in 2008. ================= L I T H U A N I A ================= BITE FINANCE: Moody's Reviews Ratings for Possible Downgrade ------------------------------------------------------------ Moody's Investors Service today placed the ratings of Bite Finance International B.V on review for downgrade. Ratings impacted are the B3 corporate family rating; the B3 probability of default rating; the B2 rating on EUR190 million senior secured floating rate notes due 2014; and the Caa2 rating on the EUR110 million senior subordinated floating rate notes due 2017. The review for downgrade was initiated by Moody's increasing concerns over: (a) Bite's high level of indebtedness combined with challenging conditions in both the Lithuanian and Latvian markets; (b) its deteriorating liquidity profile as the group continues to draw on the EUR30 million bank facility due 2014 to help finance the expansion in Latvia; and (c) the risk of failing to meet financial covenants in that facility, as they tighten on a quarterly basis. Although Bite's Lithuanian business -- which has 82% of group assets and provides 91% of total group revenue -- remains profitable, the market is highly competitive and is also slowing. Bite reported 5% growth in Lithuanian service revenue for the nine months to September 30, 2008, but Ebitda was essentially flat. Compared to the same period in 2007, the core postpaid segment -- which generated 65% of Lithuanian service revenue -- is showing slightly lower ARPU, 15% higher customer acquisition costs and 37% greater churn. The expansion of Bite's business into Latvia, where it is a new entrant, remains challenging. Although Latvian service revenue for the nine months to 30 September 2008 grew by 57%, Ebitda became even more negative over the same period and is below expectations at the time of the LBO in February 2007. On the positive side, the company has managed to reduce the cost of its network expansion so that Ebitda minus capex is broadly per expectations. Bite's management is publicly committed to the Latvian expansion strategy, including material capital expenditures over the medium term to continue build-out of the network. Given weaknesses in the core Lithuanian market that underpins the business and the need to service the company's very high debt burden following the LBO, this strategy could lead to ongoing negative group free cash flow. Although Bite expects to see further Ebitda growth in 2009, actual results may be negatively impacted by the generally deteriorating economic environment. Bite has utilized its bank facility to help fund the expansion, and this was drawn at EUR18 million on September 30, 2008. Given the negative free cash flow and the lack of material liquid alternate assets, the company will continue to draw on the facility and its liquidity profile will remain weak despite the absence of any near-term debt maturities. Without additional funding the company may have to re-think its strategy, in particular relating to expansion in Latvia. It may be possible for Bite to suspend the capex program at relatively short notice to address a funding shortfall, although this is not currently envisaged and would then raise broader questions about the group's new strategy. A further problem relates to the company's ongoing requirement to meet its bank leverage (Debt/Ebitda) covenants. The covenant tightens on a quarterly basis, reflecting the LBO business plan assumptions of higher Latvian Ebitda (and possibly an IPO refinancing, which now appears unlikely given financial market conditions). Given the deteriorating economic environment and the company's current Ebitda and debt profile, there is now greater probability that Bite could breach the covenant at some point. The reaction of the banks to this event, and their willingness to call an event of default, may be influenced by the fact they have first ranking access over security. Bite's reported leverage at September 30, 2008 was 9.2x, with Moody's adjusted leverage of 10.7x. Leverage has remained very high as the company has used debt to expand the Latvian network, and as these Latvian operations have remained Ebitda negative. The company has initiated cost reduction measures but prospects for near-term debt reduction -- an important assumption behind the current B3 corporate family rating -- may now be deferred. The retained earnings deficit was reported at about EUR90 million at the same date, with reported shareholder equity of EUR96 million (down from EUR136 million at December 31, 2007). However, changes in the economic and financial environment mean that the company's enterprise value is likely to have deteriorated significantly since the LBO, with fewer potential acquirers of the business or parts of it. It is unclear how much equity value the shareholders believe remains in the business given the very high leverage. In Moody's view, that determination -- together with a view to the benefits of completing the capex program in Latvia - is critical to understanding whether Bite's shareholders might support the company and/or its current business plan with additional funding. Moody's has not considered the recent change in the CEO of the group as a factor in initiating the review for downgrade, as it understands this change is unrelated to business issues. Moody's review will focus on: (a) Bite's strategy and business plan for 2009 and beyond, with a specific focus on the Latvian market; (b) the company's revised credit metrics, with a focus on expected timing of reduction in leverage; (b) the company's liquidity profile, including the prospects for a breach of bank financial covenants; (c) the prospects for additional equity funding to support the company's business plan and/or to avoid any possible default. The rating will be downgraded if there appears to be a material possibility of a covenant breach over the medium term, or if there does not appear to be a reasonable prospect of material near-term improvement in the company's liquidity and/or financial profile. A rating downgrade of at least one notch is currently the most likely outcome of the review. Bite Finance International B.V. is the Dutch holding company of the Lithuanian company Bite Lietuva UAB. Bite is a mobile telecommunications operator in Lithuania and Latvia, which for the nine months to September 30, 2008 reported revenues of about EUR161 million. In February 2007 a private equity consortium led by Mid Europa Partners acquired Bite through a leveraged buyout for a total consideration of EUR443 million. ===================== N E T H E R L A N D S ===================== LYONDELL BASELL: Fitch Affirms IDRs at 'B'; Outlook Negative ------------------------------------------------------------ Fitch Ratings changed Netherlands-based petrochemicals company Lyondell Basell Industries AF SCA's (LBI) Outlook to Negative from Stable. At the same time, Fitch has affirmed LBI's Long-term Issuer Default rating (IDR) at 'B+' and Short-term IDR at 'B'. Fitch has also withdrawn the rating on LBI's USD8bn bridge loan, following the company's amendments to the structure of the loan. The changes will take effect on the original maturity date of December 20, 2008 with retrospective effect from June 16, 2008. The agency has subsequently assigned ratings to the amended loan, which now comprises second- and third-lien loans. The Negative Outlook reflects LBI's lower-than-expected H108 operating results - partly due to volatile feedstock costs - anticipated unfavorable trading results for Q308 and deteriorating business prospects in the US and Europe. LBI's ratings are supported by the group's largely back-ended debt amortization profile and its access to substantial liquidity sources of US$2,856 million at end-June 2008. These consist of including unrestricted cash, un-utilized asset-based loan facilities, committed un-drawn revolving credit facilities (subject to financial covenant compliance) as well as an unsecured 18-month US$750 million revolving credit facility provided by Access Industries in March 2008. LBI has so far been unable to tap the virtually closed high-yield market as planned to refinance its USD8bn bridge loan facility and incurred a substantial increase in interest costs of this facility to around 12% as of June 20, 2008. In a filing with the SEC on October 23, 2008, LBI subsequently agreed with its lenders to roll over outstanding bridge loan commitments expiring on December 20, 2008 into three tranches: US$3.5 billion 12% fixed-rate second- lien loans, US$2 billion floating-rate second-lien loans and USD2.5bn floating-rate third-lien loans. Following an optional 180-day period until April 15, 2009 for conversion into various combinations of second- and third-lien and unsecured notes, fixed- rate second lien loans will otherwise be exchanged into non-call four-year 12%-fixed-rate second-lien notes, with both loans and notes reaching final maturity between 2015-2019. LBI, owned by Access Industries, was formed in December 2007 as a result of a merger between chemical groups, Basell and Lyondell. It is the world's third-largest independent chemical company. The ratings are: -- Lyondell Basell Industries AF SCA (renamed from Basell AF SCA and subsidiaries): Long-term IDR: affirmed at 'B+'; Outlook changed to Negative from Stable Senior notes: affirmed at 'B-' (B minus)/'RR6' -- Lyondell Chemicals Company Long-term IDR: affirmed at 'B+'; Outlook changed to Negative from Stable Secured debentures: affirmed at 'BB+'/'RR1' =============== P O R T U G A L =============== BANCO PORTUGUES: Moody's Reviews D+ BFSR for Possible Downgrade --------------------------------------------------------------- Moody's Investors Service placed the D+ bank financial strength rating (BFSR) of Banco Portugues de Negocios, S.A. (BPN SA) on review for possible downgrade and its Baa3 long-term and Prime-3 short-term debt and deposit ratings on review with direction uncertain. All of these ratings had a negative outlook since June 18, 2008. Moody's also placed the Ba1 issuer rating of the banking group's holding company, BPN SGPS S.A., on review for possible downgrade. The rating actions follow the announcement by the Portuguese government on November 2, that it is nationalizing BPN SA. The state's decision to take over the ownership of the bank is based on the incapacity of BPN SA to remain financially viable after reporting cumulated losses of around EUR700 million and failing to comply with the Bank of Portugal's regulatory capital ratios. As of today, BPN SA will be managed by Caixa Geral de Depositos (Aa1/C), which is Portugal's largest financial institution and fully owned by the state. The review for downgrade of BPN SA's D+ BFSR will focus on the following key considerations: (i) the degree to which the bank's solvency has deteriorated, after reporting high losses and capital levels below the regulatory minimum requirements; (ii) the likelihood and potential amount of a capital injection by the Portuguese government, which would have a positive impact on BPN SA's current very weak capital ratios; (iii) the availability of any other forms of state support such as liquidity lines that would help to reinforce the bank's financial profile; and (iv) Caixa Geral de Depositos' capacity to address the bank's most pressing problems as BPN SA's management is now under its full control. Moody's believes that, once the Portuguese government has made public the precise measures it plans to implement following the nationalization, BPN SA's BFSR could come under further pressure if no immediate actions are taken to ensure the maintenance of the bank's solvency levels. The review with direction uncertain of BPN SA's Baa3 debt and deposit ratings reflects the limited information on the nature of the Portuguese government's ownership of the bank at this stage. On the one hand, this could be a temporary nationalization subject to the resolution of BPN SA's most urgent solvency problems, in which case Moody's would likely downgrade these ratings. On the other hand, it could be a more permanent investment by the State with the intention of remaining as a stable and sole direct or indirect shareholder, a development that could possibly support higher ratings, aligning the bank more closely with the ratings of other wholly state-owned institutions. Moody's also notes that the review for downgrade of BPN SGPS S.A.'s issuer rating reflects the high level of uncertainty regarding the future of the bank's holding company, now that the Portuguese government has taken over the full ownership of BPN SA. A downgrade of this rating could be prompted if BPN SGPS S.A. were left on its own without receiving any form of support from the Portuguese government. These ratings were placed on review for possible downgrade: * Banco Portugues de Negocios SA: Bank financial strength rating of D+. * BPN SGPS S.A.: Issuer rating of Ba1. These ratings were placed on review with direction uncertain: Banco Portugues de Negocios S.A.: * Long-term bank deposit rating of Baa3 * Short-term bank deposit rating of Prime-3 BPN-Cayman, Limited: * Bkd Senior unsecured rating debt of Baa3 * Bkd Subordinated debt rating of Ba1 * Bkd Junior Subordinated debt rating of Ba1 * Bkd Short-term debt rating of Prime-3 Banco Portugues de Negocios, Madeira: * Senior unsecured debt rating of Baa3 * Subordinated debt rating of Ba1 * Junior subordinated debt rating of Ba1 * Short-term debt rating of Prime-3 Moody's previous rating action on BPN SA was on June 18, 2008, when the bank's ratings were downgraded to Baa3/Prime-3/D+ from Baa1/Prime-2/C- as result of its exposure to a number of securities investments, whose declines in market value further constrained the institution's already low capitalization levels. The downgrades also reflected increased management challenges as regards risk appetite, risk management systems, risk measurement tools and practices, which, in Moody's view, were no longer commensurate with a C- BFSR. The outlook on all ratings was changed to negative from stable. Banco Portugues de Negocios, S.A. is based in Lisbon, Portugal and had consolidated total assets of EUR9.6 billion as at June 30, 2008. =========== R U S S I A =========== KOLLEKTOR LLC: Creditor Must File Claims by November 31 ------------------------------------------------------- Creditors of LLC Kollektor (Road Construction Works)have until Nov. 31, 2008, to submit proofs of claims to: S. Abyshev Temporary Insolvency Manager Office 455 Melnikayte Str. 106 Tumen Russia The Arbitration Court of Tumenskaya will convene at 10.15 a.m. on Feb.5, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A-70�6093/3�2008. The Debtor can be reached at: LLC Kollektor Building 3 Shcherbakova Str. 172 Tumen Russia MONOLITH GROUP OJSC: Moscow Bankruptcy Hearing Set March 17 ----------------------------------------------------------- The Arbitration Court of Moscow will convene at 11:45 a.m. on March 17, 2009, to hear bankruptcy proceedings on OJSC Monolith Group. The case is docketed under Case No. A40�72034/06�123- 1140B. The Insolvency Manager is: V. Karnaukh Post User Box 80 127322 Moscow Russia The Debtor can be reached at: OJSC Monolith Group Sadovnicheskaya Naberezhnaya 32/6 Moscow Russia NEFTE-REM-SERVIS CJSC: Court Names Temporary Insolvency Manager --------------------------------------------------------------- The Arbitration Court of Khanty-Mansiysk appointed I. Glukhovchenko as Temporary Insolvency Manager for CJSC Nefte- Rem-Servis (TIN 8603075441) (Mining Equipment Production and Service). The case is docketed under Case No. A75�4456/2008. He can be reached at: Apt. 6 Mira Str.38 Nizhnevartovsk Khanty-Mansiysk 628616 Tumenskaya Russia The Debtor can be reached at: CJSC Nefte-Rem-Servis 9P Str. 31 Panel 8 Zapadny Promuzel Russia PRIVOLZHSKIY ABRASIVE: Creditor Must File Claims by November 31 --------------------------------------------------------------- Creditors of LLC Privolzhskiy Abrasive Tool Plant have until Nov. 31, 2008, to submit proofs of claims to: N. Kalmykov Temporary Insolvency Manager Post User Box 1914 443052 Samara Russia The Arbitration Court of Samara will convene at 1.10 p.m. on Dec. 8, 2008, to hear bankruptcy supervision procedure. The case is docketed under Case No. A55�7748/2008. The Debtor can be reached at: LLC Privolzhskiy Abrasive Tool Plant Shchersa-1 Privolzhskiy Obsharovka 445550 Samarskaya Russia PRO-MASH-OREL CJSC: P. Klimenko Named as Insolvency Manager ----------------------------------------------------------- The Arbitration Court of Orlovskaya appointed P. Klimenko as Insolvency Manager for CJSC Pro-Mash-Orel (Production of Equipment for Food and Processing Industry). The case is docketed under Case No. A48�2690/07�166. He can be reached at: Office 607 Moskovskoe shosse 137 Orel Russia The Debtor can be reached at: CJSC Pro-Mash-Orel Gorkogo Str. 17 Orel Russia PYATIGORSKAYA CONSTRUCTION: Claims Deadline Set on Dec. 31 ---------------------------------------------------------- Creditors of LLC Pyatigorskaya Construction Company (TIN 2632070736) have until Dec. 31, 2008, to submit proofs of claims to: N. Zarutskiy Insolvency Manager Office 45 (8793) Ukrainskaya Str. 64/4 Pyatigorsk 357538 Stavropolskiy Russia The Arbitration Court of Stavropolskiy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A63�5095/08-S5�28. The Debtor can be reached at: LLC Pyatigorskaya Construction Company Pushkinskaya Str. 33 Pyatigorsk Russia ROS-TRUB-KONTRAKT: Yaroslavskaya Bankruptcy Hearing Set Dec. 3 -------------------------------------------------------------- The Arbitration Court of Yaroslavskaya will convene on Dec. 3, 2008, to hear bankruptcy supervision procedure on LLC Ros- Trub-Kontrakt Industrial and Investment Company (Metallurgy). The case is docketed under Case No. A82�4580/2008,�72-B/37. The Temporary Insolvency Manager is: A. Kirillov S. Shchedrina Str. 30 150014 Yaroslavl Russia The Debtor can be reached at: LLC Ros-Trub-Kontrakt Leningradskiy Prospect 38 150044 Yaroslavl Russia STROY-VARIANT LLC: Creditors Must File Claims by December 31 ------------------------------------------------------------ Creditors of LLC Stroy-Variant (TIN 6831023030) (Construction) have until Dec. 31, 2008, to submit proofs of claims to: Ye. Govorova Insolvency Manager Post User Box 8 Kosmonavtov Str. 10 394038 Voronezh Russia The Arbitration Court of Tambovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A-64�1125/08�10. The Debtor can be reached at: LLC Stroy-Variant Proletarskaya Str. 23/5 392000 Tambov Russia TEKH-STANKO-PROM OJSC: Creditors Must File Claims by December 31 ---------------------------------------------------------------- Creditors of OJSC Tekh-Stanko-Prom have until Dec. 31, 2008, to submit proofs of claims to: D. Tselikov Insolvency Manager Office 47 Building 1 Gostinichny Prospect 8 127106 Moscow Russia The Arbitration Court of Kursk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A35�1583/2008-S-19. The Debtor can be reached at: OJSC Tekh-Stanko-Prom Zhukovskogo Str. 31 305010 Kursk Russia ZAONEZHSKAYA FORESTRY: Creditors Must File Claims by Dec. 31 ------------------------------------------------------------ Creditors of LLC Zaonezhskaya Forestry Company have until Dec. 31, 2008, to submit proofs of claims to: S. Sedov Insolvency Manager Vidanskiy Str. 15v Petrozavodsk Russia The Arbitration Court of Karelia commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A2b-1504/2008. The Debtor can be reached at: LLC Zaonezhskaya Forestry Company Lva Rokhlina Str. 1/21 Vilga Karelia Russia * KALUGA RUSSIA: Fitch Assigns 'BB-' Currency Ratings ----------------------------------------------------- Fitch Ratings assigned the Russian Kaluga region Long-term foreign and local currency ratings of 'BB-' (BB minus), a Short-term foreign currency rating of 'B' and a National Long-term rating of 'A+(rus)'. The Outlooks for the Long-term ratings are Stable. The rating action affects RUR2.6 billion outstanding domestic bonds issued by the region. The ratings reflect an increase in the region's overall risk, including its contingent liabilities and below-national average economic strength. The ratings also factor in Kaluga's sound and stable budget performance, with high levels of capital expenditure -- indicating considerable expenditure flexibility -- and prudent budget management. The Stable Outlooks reflect Fitch's expectation that the region will be able to consolidate its budget performance via control over both its operating expenditure and debt burden. The overall scale of the region's economy is relatively modest. Per capita gross regional product (GRP) was 53% of the average of Russian regions in 2006. However, during 2006-2008, the region demonstrated fast economic development and attracted several international strategic investors. Volkswagen AG, PSA Peugeot Citroen, Volvo Truck Corporation and Samsung Electronics are all in the process of setting up manufacturing plants in the region. Kaluga has demonstrated consistent revenue growth; tax revenue rose to RUR11 billion in 2007 from RUR3 billion in 2003. Over the last five years, the region has become more reliant on its own revenue sources and financial aid as a share of total budget revenue declined to 10% in 2007 from 25% in 2003. The region's prudent budget management has resulted in tightly controlled operating expenditure, high capital expenditure and stable budgetary performance. During 2005-2007, Kaluga's operating balance averaged 10% of operating revenue and capital expenditure accounted for 21% of total expenditure. The region has seen a notable increase in its total debt burden during the last five years, albeit from a low base. Nevertheless, its current debt burden remains manageable, with a total debt/current balance payback ratio below three years during 2006- 2008. As at October 1, 2008 the region's direct debt and guarantees totaled RUR6 billion or 25% of expected full-year revenue. The region's contingent liabilities increased to RUR2.8 billion as of October 1, 2008 from RUR243 million at end-2007, due to a single guarantee issued to Development Corporation of Kaluga Region (DCKR), which is majority-owned by the region and actively involved in the infrastructure development of industrial parks. The region guaranteed a RUR2.4 billion bank loan granted to DCKR by Vnesheconombank ('BBB+'/Stable/'F2'), which will be funded indirectly by Kaluga given DCKR's limited revenues. Kaluga is located in the central part of Russia. The region contributed 0.4% of the Russian Federation's GDP in 2006 and accounted for 0.7% of the country's population. * YAROSLAVL RUSSIA: Fitch Assigns 'BB-' Currency Ratings ------------------------------------------------------- Fitch Ratings assigned the Russian Yaroslavl region Long-term foreign and local currency ratings of 'BB-' (BB minus), a Short- term foreign currency rating of 'B' and a National Long-term rating of 'A+(rus)'. The Outlooks for the Long-term ratings are Stable. The rating action affects RUR6.3 billion outstanding domestic bonds issued by the region. The ratings take into account the Yaroslavl region's increased direct debt, high expenditure rigidity and revenue concentration on a small number of tax payers. The ratings also factor in the region's improved budget performance in 2007 and the stable tax revenue generated by its industrial economy. The Stable Outlooks reflect Fitch's expectation that continued tax revenue growth and fiscal discipline will allow the region to consolidate its budget performance, while debt will remain at a manageable level. In 2007, the Yaroslavl region's operating balance reached 12.16% of operating revenue, up from 4.9% in 2006. The region's operating revenue grew 24.3% yoy in 2007, outpacing the 14.9% increase in operating expenditure, allowing the region to improve its liquidity position and narrow its budget deficit. The growth was buoyed by the development of the local economy and more conservative fiscal policy. The region's socio-economic development will be boosted in the medium term by preparations for the 1,000th anniversary celebration of the city of Yaroslavl in 2010. In 2003-2007 the region's debt burden increased and the direct debt/current revenue ratio reached 37% at end-2007 (14% in 2003). However, Yaroslavl optimized its debt structure and bonds accounted for 78.2% of total debt in 2007 which helped to lengthen its maturity profile. The payback ratio improved to four-and-a- half years (2006: 15.6 years). The region's contingent liabilities are modest and composed of the debt of several public sector entities. The region's budget remains rigid on the expenditure side, while its tax revenue is concentrated in top-10 taxpayers, which represented 33.1% of fiscal revenues in 2005-07. Expenditure on staff and transfers, primarily to municipalities, has resulted in high expenditure rigidity reaching 87.2% of the region's operating expenditure in 2003-2007. The flexibility of the regional budget is constrained by the high share of social spending and municipal transfers mandated by the national and regional legislature. The Yaroslavl region is located in the northern part of central Russia. Its gross regional product contributes 0.7% to Russia's national gross domestic product, and its population accounts for 0.9% of the national total. ========= S P A I N ========= BANKINTER SERIES: Fitch Holds Junk Rating on Class E Bankinter 12 ----------------------------------------------------------------- Fitch Ratings has upgraded two tranches and affirmed 12 tranches of the Bankinter series notes. The agency has simultaneously revised the Outlook of Bankinter 9, Series T, Class B and C notes to Stable from Positive. The Class B tranche of Bankinter 7 and Class B, Series P, of Bankinter 9 have been upgraded as both classes benefit from transaction de-leveraging. The change in the Outlooks of Class B and C of Bankinter 9, Series T, to Stable from Positive reflects the challenging conditions in the Spanish housing market and high LTV of the pool. Arrears of the Bankinter series are performing well below the Fitch Spanish arrears index. Delinquency levels, defined as mortgage loans that are in arrears for over three months are, according to the latest investor report, 0.16% and 0.2% for Bankinter 7 and Bankinter 12, respectively. The delinquency level for the portfolio-backing Series P of Bankinter 9 is currently 0.32%, and 0.42% for the portfolio-backing Series T notes. The rating actions are: * Bankinter 7, Fondo de Titulizacion Hipotecaria (Bankinter 7): -- Class A (ISIN ES0313547004): affirmed at 'AAA'; Outlook Stable -- Class B (ISIN ES0313547012): upgraded to 'AA+' from 'AA'; Outlook remains Positive -- Class C (ISIN ES0313547020): affirmed at 'A'; Outlook Positive * Bankinter 9, Fondo de Titulizacion de Activos (Bankinter 9): -- Series P Class A2 (ISIN ES0313814016): affirmed at 'AAA'; Outlook Stable -- Series P Class B (ISIN ES0313814024): upgraded to 'AA' from 'AA-' (AA minus); Outlook remains Positive -- Series P Class C (ISIN ES0313814032): affirmed at 'BBB+'; Outlook Positive -- Class A1: Paid in full July 2006 -- Series T Class A2 (ISIN ES0313814057): affirmed at 'AAA'; Outlook Stable -- Series T Class B (ISIN ES0313814065): affirmed at 'A+'; Outlook revised to Stable from Positive -- Series T Class C (ISIN ES0313814073): affirmed at 'BBB'; Outlook revised to Stable from Positive -- Class A1: Paid in full in July 2006 * Bankinter 12, Fondo de Titulizacion Hipotecaria (Bankinter 12): -- Class A2 (ISIN ES0313715015): affirmed at 'AAA'; Outlook Stable -- Class B (ISIN ES0313715023): affirmed at 'A+'; Outlook revised to Positive from Stable -- Class C (ISIN ES0313715031): affirmed at 'A-'; Outlook revised to Positive from Stable -- Class D (ISIN ES0313715049): affirmed at 'BBB-'; Outlook Stable -- Class E (ISIN ES0313715056): affirmed at 'CCC'; Outlook Stable -- Class A1: Paid in full in June 2007 The Bankinter transactions are RMBS (residential mortgage-backed securities) deals backed by loans originated and secured on property located in Spain, mainly in Madrid and Catalonia. In the three transactions reviewed, the principal payments due on the notes are allocated sequentially, starting with the most senior class followed by the subordinated classes. However, the notes can amortize pro-rata if the subordinated classes represent a predefined percentage of the outstanding note balance. Pro-rata amortization of the notes can only take place if loans in arrears by more than three months are less than the specific values for each transaction. The notes issued by Bankinter 9 are backed by two portfolios, segregated according to their LTV (loan to value) ratios. Series P is backed by a pool of loans with an LTV below 80%, while series T is backed by loans with an LTV above 80%. Both Series P and T benefit from separate reserve funds and have independent and identical priority of payments. CODERE SA: Moody's Changes Outlook on B1 CFR to Negative -------------------------------------------------------- Moody's Investors Service has affirmed the B1 Corporate Family Rating (CFR) of Codere S.A. (Codere) and the B2 ratings of the EUR660 million 8.25% senior notes due 2015 issued by Codere Finance (Luxembourg) S.A. but has changed the outlook to negative from stable, in light of increased uncertainty related to the development of Codere's shareholding structure following notification to the Spanish Stock Exchange Regulation that the c. EUR176 million (plus accrued interest) deferred payment owed by the Martinez Sampedro shareholding family to the former shareholder Franco family was not made when due on October 31, 2008. This non-payment triggers the possibility of either party initiating a sale process over the entire shareholding of the Martinez Sampedros (c. 71% owned directly or indirectly as of end- October 2008). Moody's action is based on concerns over the lack of clarity related to the resolution of this issue in the current financial and economic environment and the potential implications to Codere in respect of change of control provisions or strategic and management direction. This comes at a time when currency volatility in Lat Am and, in particular, economic instability in the Argentinean market (which accounts for 43% of Codere's EBITDA) coupled with a softening in the Spanish business, could result in earnings and cash flow deterioration and put pressure on covenant compliance and overall financial flexibility. Moody's will continue to assess the evolution of the outstanding shareholder issue and potential implications on the business and financial trends for the group. Moody's notes that bondholders have a degree of protection in the face of the ownership uncertainty in that cash leakage from the restricted group is governed by the terms of the indenture (restricted payments test and limitation on indebtedness), which should protect bondholders from the financial profile of Codere being tapped to repay these shareholder obligations outside of its restricted group. Codere is a Spanish-based gaming operator with a focus on gaming machines, bingo halls, off-track betting facilities, casinos and horse race tracks. The company has operations in Spain, Argentina, Mexico, Italy and several other Latin American countries. In the 12 months to end-June 2008, Codere generated revenues of EUR993 million and EBITDA of EUR213 million. FONDO DE TITULIZACION: Fitch Cuts Class D Rating to 'B' ------------------------------------------------------- Fitch Ratings downgraded three tranches of TDA 25, Fondo de Titulizacion (FTA) and revised the Outlook to Negative from Stable on the senior Classes. This reflects the continued increase in defaulted loans, which have now totaled 1.28% of the original collateral balance, and a strong pipeline of arrears that are likely to result in further defaults. The rating actions are: -- Class A (ISIN ES0377929007) affirmed at 'AAA'; Outlook revised to Negative from Stable -- Class NAS-IO (ISIN ESO377929049) affirmed at 'AAA'; Outlook Stable -- Class B (ISIN ES0377929015) downgraded to 'A-' (A minus) from 'A'; Outlook revised to Negative from Stable -- Class C (ISIN ES0377929023) downgraded to 'BB+' from a 'BBB-'(BBB minus); Outlook remains Negative -- Class D (ISIN ES0377929031) downgraded to 'B' from 'BB-' (BB minus); Outlook remains Negative The level of defaults, defined as loans in arrears by more than 12 months, has resulted in the reserve fund being fully utilized to write off these loans. Although this is the first European RMBS transaction to completely exhaust its reserve fund, it should be noted that this has been caused by the provisioning mechanism rather than actual losses. The transaction will therefore receive recoveries on these loans at a later date, and although recoveries to date have been limited, Fitch assumes a lengthy recovery timeline in its analysis of Spanish RMBS and expects that recoveries will return to the transaction. The transaction uses a combined waterfall, and therefore the exhaustion of the reserve fund means that principal can be used to pay interest on the notes. This can occur until the relevant default trigger for each class of notes is breached. The first of these triggers is set at cumulative defaults of 3.9%, at which point the interest on the class D notes will be deferred. Given current performance this trigger is unlikely to be breached in the near future and in the longer term Fitch expects recoveries would replace any principal used to meet interest payments. The Negative Outlook on all tranches reflects the uncertainty with regards to the level of recoveries, plus the increased level of arrears in the transaction. Loans in arrears by more than three months now comprise 6.04% of the current portfolio. The deal has experienced a high roll rate of loans in arrears to default; with virtually all loans that are more than six months in arrears eventually defaulting. The NAS-IO note will mature next year and therefore the Outlook remains Stable. The inclusion of an interest-only note (NAS-IO) reduces the excess spread available to cover defaulted loans. The NAS-IO expires in September 2009 at which point available revenue to cover defaulted loans and potentially rebuild the reserve fund will increase. By this stage Fitch would also expect recoveries to begin to be realized; however, until this happens it is likely that the amount of defaulted loans will continue to be significantly above the available excess spread, meaning that not all defaulted loans will be fully written off. FONDO DE TITULIZACION: Fitch Cuts Class F Tranche to 'C/DR6' ------------------------------------------------------------ Fitch Ratings has downgraded 10 classes from Fondo De Titulizacion De Activos Santander Hipotecario 3 (Shipo3) and Fondo De Titulizacion De Activos Santander Hipotecario 4 (Shipo4) RMBS transactions. The downgrades follow the continued high levels of written-off loans from the pools, which have led to the complete utilization of the reserve funds for both transactions. The Outlooks for all senior tranches are revised to Negative from Stable, reflecting Fitch's concern over the future performance of both transactions. The rating actions are: * Fondo De Titulizacion De Activos Santander Hipotecario 3: -- Class A1 (ISIN ES0338093000): affirmed at 'AAA'; Outlook revised to Negative from Stable. -- Class A2 (ISIN ES0338093018): affirmed at 'AAA'; Outlook revised to Negative from Stable. -- Class A3 (ISIN ES0338093026): affirmed at 'AAA'; Outlook revised to Negative from Stable. -- Class B (ISIN ES0338093034): downgraded to 'AA-' from 'AA'; Outlook revised to Negative from Stable. -- Class C (ISIN ES0338093042): downgraded to 'BBB+' from 'A-'; Outlook remains Negative. -- Class D (ISIN ES0338093059): downgraded to 'BB' from 'BB+'; Outlook remains Negative. -- Class E (ISIN ES0338093067): downgraded to 'B' from 'B+'; Outlook remains Negative -- Class F (ISIN ES 0338093075): downgraded to 'C/DR6' from 'CCC' * Fondo De Titulizacion De Activos Santander Hipotecario 4: -- Class A1 (ISIN ES0337711008): affirmed at 'AAA'; Outlook revised to Negative from Stable. -- Class A2 (ISIN ES0337711016): affirmed at 'AAA'; Outlook revised to Negative from Stable. -- Class A3 (ISIN ES0337711024): affirmed at 'AAA'; Outlook revised to Negative from Stable. -- Class B (ISIN ES0337711032): downgraded to 'AA-' from 'AA'; Outlook revised to Negative from Stable. -- Class C (ISIN ES0337711040): downgraded to 'BBB+' from 'A-'; Outlook revised to Negative from Stable. -- Class D (ISIN ES0337711057): downgraded to 'BB' from 'BB+'; Outlook remains Negative. -- Class E (ISIN ES0337711065): downgraded to 'B' from 'B+'; Outlook remains Negative -- Class F (ISIN ES0338341011): downgraded to 'C/DR6' from 'CCC'; The total value of written-off loans has continued to increase to 1.64% and 1.32% of the current collateral balance for Shipo3 and Shipo4, respectively. These loans have been written off even before meeting the technical definition of defaults in the transaction, as the originator expects a low likelihood of any cure. The high level of write offs has been higher than available excess spread, causing the respective reserves funds to be drawn. As of the last payment date these reserve funds have been fully depleted, significantly reducing the credit enhancement support in the transactions. The decision to write off loans before they trigger the 18 months provisioning mechanism has enabled both transactions to make efficient use of the available excess spread, which would otherwise have flowed through the transaction structure. In addition, foreclosing loans with early arrears should speed up the recovery process which, given a falling house price environment, will help to limit losses. The high weighted average loan-to- value (WALTV) ratio of both transactions -- Shipo3 currently has a WALTV of 85.58% and Shipo4 88.13% -- in combination with an unfavorable housing market suggests many of the defaulted loans are likely to realize a loss on sale. Future rating actions will depend on the level of recoveries achieved on defaulted loans. The Negative Outlook reflects the uncertainty over when the upward trend of arrears will peak, in addition to the volume and timing of defaults. Loans in arrears by more than three months have continued to increase to account for 3.8% and 5.04% of the current collateral balance for Shipo3 and Shipo4 respectively. Fitch has employed its credit-cover multiple methodology in reviewing these transactions to assess the level of credit support available to each class of notes. ===================== S W I T Z E R L A N D ===================== EASTERN EUROPEAN: Creditors Must File Proofs of Claim by Nov. 16 ---------------------------------------------------------------- Creditors owed money by JSC Eastern European Trading are requested to file their proofs of claim by Nov. 16, 2008, to: Dufourstrasse 121 9001 St. Gallen Switzerland The company is currently undergoing liquidation in St. Gallen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 16, 2008. HARTMUT BRAUN: Deadline to File Proofs of Claim Set Nov. 16 ----------------------------------------------------------- Creditors owed money by LLC Hartmut Braun Consulting are requested to file their proofs of claim by Nov. 16, 2008, to: Dr. Hartmut Braun Liquidator Buchenweg 17 4148 Pfeffingen Switzerland The company is currently undergoing liquidation in Pfeffingen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Aug. 15, 2008. IMMOFINANZ SCHWYZ: Creditors Have Until Nov. 16 to File Claims -------------------------------------------------------------- Creditors owed money by JSC Immofinanz Schwyz are requested to file their proofs of claim by Nov. 16, 2008, to: Roland J. Hubatka Liquidator Bosch 23 6331 Huenenberg Switzerland The company is currently undergoing liquidation in Schwyz. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 10, 2008. METZGEREI BINER: Proofs of Claim Filing Deadline is Nov. 20 ----------------------------------------------------------- Creditors owed money by LLC Metzgerei Biner in liquidation, are requested to file their proofs of claim by Nov. 20, 2008, to: Abralaw Notariat Andreas Byland Bundesgasse 26 3001 Bern Switzerland The company is currently undergoing liquidation in Zermatt. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 12, 2008. PC INVEST: Creditors' Proofs of Claim Due by Nov. 16 ---------------------------------------------------- Creditors owed money by JSC PC Invest are requested to file their proofs of claim by Nov. 16, 2008, to: Untermuli 11 6302 Zug Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 29, 2008. PRO-SENSE LLC: Nov. 19 Set as Deadline to File Claims ----------------------------------------------------- Creditors owed money by LLC pro-sense are requested to file their proofs of claim by Nov. 19, 2008, to: Hochstrasse 111 4053 Basel Switzerland The company is currently undergoing liquidation in Basel. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 2, 2008. SCHOGGIFACTORY BARBARA: Creditors Must File Claims by Nov. 16 ------------------------------------------------------------- Creditors owed money by LLC Schoggifactory Barbara Schmid are requested to file their proofs of claim by Nov. 19, 2008, to: Mittlere Gasse 16 5400 Baden Switzerland The company is currently undergoing liquidation in Uster. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 6, 2008. TELLOSA IMMOBILIEN: Deadline to File Proofs of Claim Set Nov. 15 --------------------------------------------------------------- Creditors owed money by JSC Tellosa Immobilien are requested to file their proofs of claim by Nov. 15, 2008, to: Chamerstrasse 172 6300 Zug Switzerland The company is currently undergoing liquidation in Oberageri. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Aug. 18, 2008. ============= U K R A I N E ============= AGRARIAN-INDUSTRIAL LLC: Creditors Must File Claims by Nov. 14 --------------------------------------------------------------- Creditors of Agrarian-Industrial LLC Dumbrava (code EDRPOU 03800617) have until Nov. 14, 2008, to submit proofs of claim to: Mr. Maksimiuk Grigory Liquidator Ropcha Storozhynetsky 59032 Chernovcy Ukraine The Arbitration Court of Chernovcy commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 19, 2008. The case is docketed as 9/46/b. The Economic Court of Chernovcy O. Kobylianska Str. 14 58000 Chernovcy Ukraine The Debtor can be reached at: Agrarian-Industrial LLC Dumbrava Ropcha Storozhynetsky 59032 Chernovcy Ukraine BEREZNA AGRICULTURAL: Creditors Must File Claims by Nov. 14 ------------------------------------------------------------ Creditors of Berezna Agricultural OJSC (code EDRPOU 00851442) have until Nov. 14, 2008, to submit proofs of claim to: Mrs. Riazanova Svetlana Liquidator Ap. 77 Belov Str. 18 14000 Chernigov Ukraine The Arbitration Court of Chernigov commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 3, 2008. The case is docketed as 9/74b. The Economic Court of Chernigov Mir Avenue 20 14000 Chernigov Ukraine The Debtor can be reached at: Berezna Agricultural OJSC Shechenko Str. 5 Berezna Mensky 15622 Chernigov Ukraine GOLDEN SNACK: Creditors Must File Claims by Nov. 14 --------------------------------------------------- Creditors of LLC Golden Snack (code EDRPOU 34298613) have until Nov. 14, 2008, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Arbitration Court of Kyiv commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 29, 2008. The case is docketed as 23/231-b. The Debtor can be reached at: LLC Golden Snack Melnikov Str. 12 04050 Kiev Ukraine MOBILE CONNECTION: Creditors Must File Claims by Nov. 14 --------------------------------------------------------- Creditors of LLC Mobile Connection Zone (code EDRPOU 33493665) have until Nov. 14, 2008, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Arbitration Court of Kyiv commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 29, 2008. The case is docketed as 23/230-b. The Debtor can be reached at: LLC Mobile Connection Zone B. 1 40 years of Oct. Avenue, 120 03127 Kiev Ukraine NOVASEL-DNIEPROPETROVSK: Creditors Must File Claims by Nov. 14 -------------------------------------------------------------- Creditors of LLC Novasel-Dniepropetrovsk (code EDRPOU 33770905) have until Nov. 14, 2008, to submit proofs of claim to: The Economic Court of Dnipropetrovsk Kujbishev Str. 1a 49600 Dnipropetrovsk Ukraine The Arbitration Court of Dnipropetrovsk commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 8, 2008. The case is docketed as B 29/208-08. The Debtor can be reached at: LLC Novasel-Dniepropetrovsk Ap. 26 Karl Liebkneht Str. 5/7 49000 Dnipropetrovsk Ukraine OZON LTD: Creditors Must File Claims by Nov. 14 ----------------------------------------------- Creditors of LLC Ozon Ltd (code EDRPOU 32920731) have until Nov. 14, 2008, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Arbitration Court of Kyiv commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 29, 2008. The case is docketed as 23/229-b. The Debtor can be reached at: LLC Ozon Ltd Melnikov Str. 12 04050 Kiev Ukraine SMEREKA LLC: Under Bankruptcy Supervision Procedure Nov. 14 ------------------------------------------------------------ Creditors of LLC Smereka (code EDRPOU 31516774) have until Nov. 14, 2008, to submit proofs of claim to: Mrs. Dragun Irene Temporary Insolvency Manager Ap. 14 Sobornaya Str. 34 33028 Rovno Ukraine The Economic Court of Kiev commenced bankruptcy supervision procedure on the company on Sept 18, 2008. The case is docketed as 24/317-b. The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Debtor can be reached at: LLC Smereka Zhylianskaya Str. 120-B 01032 Kiev Ukraine SPANEYTA-UKRAINE LLC: Creditors Must File Claims by Nov. 14 ------------------------------------------------------------ Creditors of LLC LLC Spaneyta-Ukraine (code EDRPOU 33494082) have until Nov. 14, 2008, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Arbitration Court of Kyiv commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 29, 2008. The case is docketed as 23/232-b. The Debtor can be reached at: LLC Spaneyta-Ukraine Gorky Str. 95 03150 Kiev Ukraine ZEBRA-UKRAINE LLC: Creditors Must File Claims by Nov. 14 --------------------------------------------------------- Creditors of LLC Zebra-Ukraine (code EDRPOU 34428995) have until Nov. 14, 2008, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Arbitration Court of Kyiv commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 21, 2008. The case is docketed as Sept. 29, 2008. The Debtor can be reached at: LLC Zebra-Ukraine Illinskaya Str. 12 04070 Kiev Ukraine =========================== U N I T E D K I N G D O M =========================== ABACROMBIE & CO: High Court Orders Winding Up Proceedings --------------------------------------------------------- The High Court in Liverpool has ordered winding up proceedings against Abacrombie & Co. Ltd. following an investigation by Companies Investigation Branch (CIB) of the Insolvency Service. CIB's investigation found that there was a lack of commercial benefit to the company's clients, that the company charged excessive fees and lacked any clear charging structure. It was also found that the company operated an inappropriate banking structure and the business model operated by the company was unsustainable. In addition, the company operated with a lack of probity involving inappropriate transactions and advice and there was a lack of transparency as to who was controlling the company. ACTIVE INSTORE: Appoints Joint Administrators from Tenon -------------------------------------------------------- Stanley Donald Burkett-Coltman and Alexander Kinninmonth of Tenon Recovery were appointed joint administrators of Active Instore Ltd. on Oct. 14, 2008. Tenon Recovery -- http://www.tenongroup.com-- provides accounting and business advice to entrepreneurs and owner-managed and private businesses. It has over 1900 staff operating through a network of over 40 offices. The company can be reached at: Active Instore Ltd. 1 Woodend Road Camberley Surrey GU16 6QH England BURCHELL EDWARDS: Bought Out of Administration by Management ------------------------------------------------------------ Evening Telegraph reports that Burchell Edward's parent company Cornerstone The Midlands was immediately bought out of voluntary administration by its management, safeguarding 100 jobs. Michael Bruce, Cornerstone's managing director, agreed to buy the Burchell Edwards name and assets Friday, the report relates. He however said that he was not in a position to say how many creditors were owed money by Cornerstone or how much debt had been written off by going into administration, the report notes. According to Evening Telegraph, administrator Ian Gould of PKF, reached a deal with Cornerstone's main creditor, its bank, for the buy-out to go ahead. Mr. Bruce, the report discloses, cited the bank's reluctance to invest money in Cornerstone to grow the business as the main reason for putting the company into voluntary administration last Friday. Burchell Edwards closed offices in Allestree, Alvaston and Chaddesden and made 23 staff redundant, the report recounts. "It was effectively a package to rescue the business. We were doing reasonably well, better than any other agent, but in order to advance the business we required investment," Mr. Bruce was quoted by Evening Telegraph as saying. "We wanted to grow and develop and secure the business. We had no other alternative." Cornerstone The Midlands is one of Derby's biggest estate agents. COLLIER LITHO: Appoints Joint Administrators from Tenon Recovery ---------------------------------------------------------------- Stanley Donald Burkett-Coltman and Alexander Kinninmonth of Tenon Recovery were appoined joint administrators of Collier Litho Ltd. on Oct. 8, 2008. Tenon Recovery -- http://www.tenongroup.com-- provides accounting and business advice to entrepreneurs and owner-managed and private businesses. It has over 1900 staff operating through a network of over 40 offices. The company can be reached at: Collier Litho Ltd. 43 Mornington Road Chingford London England CORGI INTERNATIONAL: Placed Two UK Units Into Administration ------------------------------------------------------------ Corgi International Ltd. disclosed that two of its wholly owned subsidiaries, Popco Entertainment (UK) Ltd. (formerly Corgi Classics Ltd.) and Popco Distribution Ltd. (formerly Cards Inc.) both United Kingdom (UK) corporations, have been placed into administration, which is the rough equivalent to Chapter 11 reorganization in the United States. BDO Stoy Hayward LLP, Prospect Place, 85 Great North Road, Hatfield, Hertfordshire, AL9 5BS, have been appointed Joint Administrators of the two companies. The business and assets of the UK companies are now managed by the Joint Administrators who act as agents of the companies. Corgi International will continue to sell its products worldwide through their operations in Hong Kong and the United States. About Corgi International Corgi International Ltd (Nasdaq GM:CRGI) is a global Pop Culture company, which develops and markets innovative and high-quality licensed and non-licensed toys, gifts and collectibles distributed via direct, specialty, hobby, collector and mass retail channels worldwide. Marketed under the brand names Master Replicas, PopCo and H2go, the Company's line of products range from premium entertainment prop replicas and limited edition memorabilia to traditional toys and gift merchandise. The Company holds varying licenses for many of entertainment's highest grossing franchises including Disney Classics, Harry Potter, James Bond, Star Trek, Nintendo, Halo and The Beatles, amongst others. Corgi also has partnerships with cutting edge technology innovators around the world. The Company is headquartered in Hong Kong, with operations in Walnut Creek, California, USA and in Watford and Leicester, UK. Corgi's Independent Registered Accounting Firm, Burr, Pilger & Mayer, LLP, noted in their report with respect to its consolidated financial statements for the year ended March 31, 2008, that the Company has suffered reoccurring losses from operations, has a working capital deficiency, an accumulated deficit and negative cash flows, which raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. CSW GROUP: Goes Into Administration; Seeks Potential Buyers ----------------------------------------------------------- CSW Group Ltd. has been placed in administration, leaving the future support of a system used by ten London primary care trusts to monitor child vaccinations unclear, E-Health Insider Primary Care reports. According to the report, administrators of CSW placed an advertisement in the Financial Times stating that the company is in administration and it is seeking potential buyers. CSW, the report discloses, was contracted by BT, the local service provider for London, to develop the Child Health Interim Application to bridge a gap between one child health system being withdrawn and a strategic solution being ready. BT told E-Health Insider that it had been in contact with "both the current CSW management team and the administrators, and will maintain dialogue daily during this period of uncertainty." CSW Group Ltd. is a health IT firm. It owns CSW Health, the Oxford-based specialist in XML-based software applications. FIRECHECK HOLDINGS: Taps BDO Stoy as Joint Administrators --------------------------------------------------------- Toby Scott Underwood and Francis Graham Newton of BDO Stoy Hayward LLP were appointed joint administrators of Firecheck Systems Ltd. and Firecheck Holdings Ltd. on Oct. 16, 2008. BDO Stoy Hayward -- http://www.bdo.co.uk/-- focuses on business assurance (audit), corporate advisory, tax, and investment management services, specializing in such industries as charities, educational institutions, family businesses, financial services, leisure, and hospitality. The company is the U.K. arm of BDO International and has offices in more than 15 cities throughout the U.K. GOODMAN BAYLIS: Goes Into Administration Weeks After Buyout ----------------------------------------------------------- William Mitting at PrintWeek reports that Goodman Baylis has gone into administration just weeks after its buyout by HS Printers. The administration process is being handled by Harris Lipman. HS PrintWeek joint managing director Steve Hardy, as cited by PrintWeek, said the sales at Goodman Baylis were too weak to sustain the business and it would have been trading illegally had it continued. Owners of Borcombe SP, the sister company of Goodman Baylis, are currently exploring options as the fate of the firm hangs in balance, PrintWeek discloses. Citing sources close to the firm, PrintWeek reveals that a buyer has been lined up for Borcombe. The buyer is expected to take over the business as soon as Monday, the report notes. PrintWeek relates that HS Printers acquired the two companies last month but faced a hostile reception from suppliers owing to the bad debt left by former owner MPI. GUITEL LIMITED: Calls in Administrators from Tenon Recovery ----------------------------------------------------------- T. J. Binyon and S. J. Parker of Tenon Recovery were appointed joint administrators of Guitel Ltd. on Oct. 13, 2008. Tenon Recovery -- http://www.tenongroup.com-- provides accounting and business advice to entrepreneurs and owner-managed and private businesses. It has over 1900 staff operating through a network of over 40 offices. The company can be reached at: Guitel Ltd. C/o Tenon Recovery Sherlock House 73 Baker Street London W1U 6RD England HANSON PLC: Fitch Cuts Senior Unsecured Rating to 'BB+' ------------------------------------------------------- Fitch Ratings downgraded Germany-based HeidelbergCement AG's (HC) Long-term Issuer Default (IDR) and senior unsecured ratings to 'BB+' from 'BBB-' (BBB minus). The Short-term IDR has also been downgraded to 'B' from 'F3'. The Outlook on the Long-term IDR remains Negative. At the same time, Fitch has downgraded subsidiary Hanson plc's (Hanson) senior unsecured rating to 'BB+' from 'BBB-' (BBB minus). The downgrade reflects Fitch's view that tight credit markets, coupled with continued difficult trading conditions in the US construction market and a slowdown or decline in some European markets, will undermine HC's credit metrics over the next two years. In Fitch's view, this could lead to substantial reduction in headroom under existing debt covenants or even a potential covenant breach. The ratings continue to reflect HC's strong operational profile and leading market positions in cement and aggregates, which are essential for establishing a solid market presence in downstream activities such as ready-mixed concrete and concrete products. The group enjoys good diversification by geography -- with presence in 50 countries -- and by end-market. The Negative Outlook reflects the sizable refinancing risk facing HC for its EUR5 billion tranche B Hanson acquisition facility, maturing in May 2010. It also reflects potential further negative pressure on cash flow generation and credit metrics stemming from a more protracted adverse economic environment than currently envisaged. For the Outlook to return to Stable, Fitch will assess HC's success in mitigating the refinancing risk and the company's operating performance compared with Fitch's expectations. In its commentary dated August 7, 2008, Fitch had flagged that a lack of progress in net debt reduction, resulting in a net debt/EBITDA above 3x by FYE10, would likely trigger a single-notch downgrade. The downgrade reflects the revision of Fitch's forecasts, which show net leverage rising above 3x by FYE08. Fitch's forecast assumptions include a possible decline in revenue of up to 4% in 2009 and a flat performance in 2010; slightly deteriorating EBITDA margins up to 2010 and a downward revision of capex spending in 2009. H108 revenue grew 9.2% (10.6% in Q108, 10.7% in FY07) on a like- for-like basis, thanks to solid growth in Europe and emerging markets, which offset a 8.2% decline in north America. However, consolidation of the lower-margin Hanson, which is seasonally weaker in H1, and negative trading conditions in north America affected HC's overall operating income before depreciation margin. The latter declined to 18.4% in H108 from 21% in H107. Proceeds from asset sales and a capital increase in H108 reduced total debt to EUR13 billion at end-H108 from EUR15.5 billion at FYE07. HC is expected to continue to reduce debt during 2008, mainly through cash flow generation. A EUR1 billion bond issued in January 2008 refinanced part of the Hanson acquisition loan. ICESAVE: FSCS Informs Customers on How to Claim Back Savings ------------------------------------------------------------ The first emails to UK customers of Icesave are now going out with more information about how to claim back their savings, the Financial Services Compensation Scheme said Tuesday. The email is the first stage of a process that will lead to compensation for thousands of Icesave customers. It will be followed up by FSCS sending second emails to customers, in phases, with a view to starting compensation payments in the second week of November as planned. The second email will provide instructions on how depositors can log on to their existing Icesave accounts in the normal way to complete a short electronic process allowing them to receive their compensation. Once UK depositors complete the process, their money will transfer to their nominated account in a BACS transfer within five working days. The process of sending out the second email is being phased to manage the flow of payments through the system and for security reasons. FSCS Chief Executive Loretta Minghella said: "We are pleased to say the first email is now going to UK Icesave customers with more information about how they can claim back their money. This marks the first stage of an accelerated payout process that will benefit the vast majority of UK Icesave customers. We have been working hard to get the system in place. It is another step towards offering compensation to the vast majority of UK Icesave customers by the end of November." Any Icesave customers who do not receive their first email from FSCS by the close of business on Friday should contact FSCS on 0845 7300 131 (Icesave inquiries only). The Icesave website will be unavailable from Tuesday until the end of the week while it is developed to pay compensation. Customers are asked not to log in until their second email which will specifically invite them to do so. UK Icesave customers who opt not to use the accelerated payout process will still be able to claim compensation using a paper- based application process although this will take longer. The same process will also be used for anyone who does not have a nominated account which is necessary for the accelerated process, although FSCS believes that this may only apply to a minority of UK depositors. As reported in the TCR-Europe on October 9, eligible savers with Icesave are protected by the Icelandic Depositors' and Investors' Guarantee Fund (IDIGF), up to a limit of the first EUR20,887 of their deposits. As an Icelandic bank Icesave is not automatically a member of the FSCS, but it opted to become a 'top-up' member. This means that eligible retail savers with Icesave's UK branch whose savings exceed the Icelandic limit would benefit from top-up compensation from the FSCS covering the amount over the Icelandic limit up to the new FSCS compensation limit for deposits of GBP50,000. Icesave Accounts Frozen All Icesave accounts were frozen in the UK on October 7, when its parent bank, Landsbanki, went into receivership in Iceland, the Daily Telegraph relates. After it emerged that the Icelandic compensation scheme had insufficient funds to meet its guarantees the UK Government stepped in, saying it would protect all UK savers in full, the Daily Telegraph notes. A report in the TCR-Europe disclosed that on October 7, the HM Treasury confirmed that if, as expected, Landsbanki is soon declared in default, the Government will make sure that no retail depositor will lose any money as a result of the closure of Icesave. The Treasury have also confirmed that arrangements are being put in place to ensure that all ISA customers of Icesave will continue to benefit from the tax free status of their accounts. Icesave has approximately 300,000 savers. About the FSCS FSCS is the UK's compensation fund of last resort for customers of financial services firms authorized by the Financial Services Authority or previous financial regulators. This means that FSCS can pay compensation to consumers if an authorized financial services firm is unable, or likely to be unable, to pay claims against it and so is in "default." FSCS protects deposits, life and general insurance firms, investment business (on or after Aug. 28, 1988), home finance (e.g. mortgage) advice and arranging (on or after Oct. 31, 2004), and general insurance policies advice and arranging (on or after Jan. 14, 2005). About Icesave Icesave is the UK branch of Landsbanki Islands hf (trading under the registered name Icesave). It is an EEA bank that is authorized by the Fjarmalaeftirlitio (FME), the financial services regulator in Iceland. UPTON PACKAGING: Goes Into Administration ----------------------------------------- Jill Park at PackagingNews reports that Uptown Packaging has gone into administration. S.J. Parker and T. J. Binyon of Tenon Recovery were appointed joint administrators of the company on Oct. 17, 2008, the report relates. The company, the report says, is believed to be operating. Based in Cornwall, Uptown Packaging supplies all types of packaging from bubblewrap, tapes, carrier bags, paper packaging and eco-friendly bags. VIRGIN MEDIA: Inks Two New Channel Carriage Deals with Sky ---------------------------------------------------------- Following successful negotiations, British Sky Broadcasting plc and Virgin Media Inc., have agreed two new channel carriage deals. The first agreement will see the return, on November 13, of Sky's Basic channels -� including Sky1, Sky2, Sky3, Sky News, Sky Sports News, Sky Arts 1, Sky Arts 2, Sky Real Lives and Sky Real Lives 2 -� to Virgin Media's cable TV service. The second agreement provides for the continued carriage of Virgin Media TV's basic channels �- Living, Living 2, Bravo, Bravo 2, Trouble, Challenge and Virgin 1 -� as part of Sky's retailed channel line-up on satellite. Both deals will run concurrently until June 12, 2011. The agreements include fixed annual carriage fees for the channels with both channel suppliers able to secure additional capped payments if their channels meet certain performance-related targets. Commenting on the agreements, Virgin Media's CEO, Neil Berkett, said: "We are pleased to bring our carriage negotiations with Sky to a successful close. I believe this agreement represents a fair deal and is the right thing for our customers. We recognize the quality and popularity of Sky's channels and look forward to welcoming them back to Virgin Media's TV service. We are also pleased to secure Sky's continued carriage of the VMTV channels until June 2011." Jeremy Darroch, Sky's CEO, adds: "This is great news for Sky and Virgin Media customers alike. We want our channels to be enjoyed by as many people as possible so we're delighted to secure their return to the Virgin Media platform." As part of the agreements, both Sky and Virgin Media have agreed to terminate all High Court proceedings against each other relating to the carriage of their respective basic channels. About Virgin Media Headquartered in London, England, Virgin Media Inc. (fka NTL Inc.) (NASDAQ: VMED) -- http://virginmedia.com/-- provides broadband, digital television, telephony, content and communications services, reaching over 50% of the U.K. homes and 85% of the U.K. businesses. * * * As reported in the TCR-Europe on October 17, 2008, Fitch Ratings affirmed Virgin Media Inc.'s Long-term Issuer Default Rating at 'BB-' with a Stable Outlook and Short-term IDR at 'B', following its announcement that it is seeking amendments to its senior secured facilities. At the same time, Standard & Poor's Ratings Services said that its ratings and outlook on U.K.-based telecommunications provider Virgin Media Inc. (VMI) and related entities (B+/Positive/--) are unchanged by the company's announcement that it has requested various amendments to the senior facilities agreement. * UK Business Failures Up 22% in First Nine Months, Experian Says -------------------------------------------------------------- Experian(R), the global information services company, published its latest insolvency data. The analysis shows that there were 16,591 UK business failures in the first nine months of 2008, representing a 22% increase compared to the same period in 2007. The latest Insolvency Report and Distress Index from Experian's Business Information division also shows that between July 1, and September 30, 2008, 5,957 businesses failed. This represents a 28.2% increase compared to Q3 2007, which saw 4,648 failures. Tony Pullen, Managing Director of Experian's Business Information division, commented: "Our analysis highlights that businesses, now more than ever, need to know who they are dealing with and that their customers and suppliers have the means to pay. "Given the difficult trading conditions and rise in insolvencies, it is important that businesses take the right steps to safeguard the supply of their goods and services. The best approach is to continually monitor customers' and suppliers' commercial integrity against financial performance, credit risk information and payment behaviors. Access to this level of insight provides the intelligence to help businesses manage their exposure to risk." Sector Analysis Of the 34 sectors monitored, 25 saw increases in insolvencies over the year to date compared to the same period in 2007. Meanwhile, seven sectors did not experience an increase in failures in Q3 2008 compared to Q3 2007. Key sectors affected included Business Services with 1,284 insolvencies in Q3 2008 (up 22.3%) taking the annual total for the sector to more than 3,550 failures (up 17.8%). Building and Construction saw 537 failures over the quarter (up 22.9%) with a year to date total of 1,564 failures (up 19.2%). The Property sector, with 434 failures during the quarter (up 221%) saw its annual figure reach 891 failures (up 130.2%). Regional Overview All 14 regions monitored by Experian saw an increase in insolvencies in the first nine months of 2008 compared to 2007. When comparing Q3 2008 and Q3 2007, only two regions -- Northern Ireland and East Anglia -- experienced a decline in failures. The City of London (up 53.7% at 166 failures), Wales (up 47.6% at 134) and Scotland (up 42.7% at 264) saw the greatest increases in quarter-on- quarter failures. Outside of London (969 failures) and the South East (1,163 failures), business failures in volume terms are running at their highest in traditional manufacturing regions in the North West, Yorkshire and the Humber and the West Midlands. Failures in the North West increased by over a third to 800 in Q3 2008 compared to the same period last year. In Yorkshire and the Humber, failures rose by a similar amount to 593 and in the West Midlands by 29.1% to 572. * UK Automotive Insolvencies Up 18% in 3Q2008, Experian Says ------------------------------------------------------------ The number of insolvencies in the automotive industry rose by 18 per cent during Q3 2008 compared to the same period last year, according to the latest figures from Experian(R), the global information services company. Business failures in all industries throughout the UK saw an increase of 28.2 per cent during Q3 2008. Of the 36 industries analyzed by Experian, the automotive industry saw the 17th highest number of insolvencies, with 67 businesses failing. Kirk Fletcher, Managing Director of Experian's Automotive division, said: "Our analysis highlights why it is important for automotive businesses to know that their customers and suppliers have the means to pay their bills. "The best way for automotive businesses to protect themselves is by continually monitoring customers� and suppliers� commercial integrity. Access to this level of detailed insight will provide them with the intelligence to help them manage their exposure to risk." * October 2008 High Street Retail Activity Drops, Experian Says --------------------------------------------------------------- The UK experienced a drop in both online and High Street retail activity during October, according to the latest monthly retail insight report from Experian(R), the global information services company. UK Internet traffic to online retailers decreased by 0.5 per cent (between October 2007 and 2008), representing the first annual decline this year according to Hitwise, an Experian company. On the high street, the Experian Retail Footfall Index recorded 2.2 per cent fewer shoppers compared with October last year. Meanwhile, over three million square foot of new retail floorspace created in 2008 now presents over-capacity problems in a number of major retail destinations across the UK. Retailers also suffered a significant rise in business failures according to the latest Insolvency Report and Distress Index by Experian. Business failures in the non-food retail sector rose by 17.4 percent compared with last October. At the same time, retailers seeking administration orders leapt by 52.9 per in the last 12 months and 31.0 per cent in the last month alone. Robin Goad, Director of Research at Hitwise, said: "UK Internet traffic to online retailers decreased by 0.5 per cent between October 2007 and 2008, the first annual decline this year. Up until now, online retail has been surviving the economic downturn, but this month's data proves that the sector is not immune. "Despite the overall decrease in traffic to the online sector, budget retailers are benefiting from the demands of more price- conscious consumers. UK Internet searches for second hand goods have increased 22 per cent over the last 12 months and, as a result, traffic to Classified Retailers increased by 47 per cent over the same period. "Supermarkets are also benefiting. UK Internet traffic to supermarkets is up 10 per cent year-on-year. Although there has been a small increase in demand for online grocery shopping, the main growth area for supermarkets has been high-ticket consumer electronics goods. "Online consumers searching for laptops and washing machines are increasingly ending up at sites operated by the likes of Tesco, Asda and Sainsburys. The supermarkets are driving this traffic by investing heavily in search marketing campaigns." Commenting on the problem of retail over-capacity, Jonathan de Mello, Director of Retail Consultancy at Experian, said: "This year has seen the opening of an unprecedented number of new shopping centers and while some have clearly moved their towns up the retail rankings, such as Liverpool from 15th place to 5th place, others have had less of a positive impact, particularly in the current economic climate. "For every winner there is a loser and Liverpool has clearly had a negative effect on nearby towns such as Wigan, and even on the rest of Liverpool itself, with John Lewis moving into the new Liverpool One scheme. "Westfield Derby has also hit other areas of retail in the city hard, given the relocation of Marks and Spencer and Debenhams into the scheme. The scheme has enabled the city to compete more effectively with Nottingham and Leicester, but now dominates the retail scene in Derby to the point where there is little or no need to venture outside the walls of the shopping center. The same is true of Leicester where there is little incentive now to leave the newly extended Shires shopping center given its size. In the current economic climate, these schemes will inevitably impact on a large number of retailers. "Retailers may be hoping that the pre-Christmas reduction in the cost of petrol may translate into extra cash to spend on the high street. But as we get closer to Christmas, there will inevitably be winners and losers, and this year it is the discounters, value chains and supermarkets that are expected to come out on top." * R3 Predicts 41% Increase in UK Business Insolvencies for 2009 --------------------------------------------------------------- A survey conducted by R3, the Insolvency Trade Body, paints a grim picture of dramatic rises in both personal and corporate insolvencies over the next year and a half. The survey also shows some worrying trends in practices of securitization of debt which places people's homes in jeopardy. For the first time ever, the UK's Insolvency Practitioners were asked to predict a figure for the number of personal and corporate insolvencies for 2008 and 2009, based on the last known official figures for 2007. The survey was carried out in conjunction with polling agency ComRes. Business Insolvencies R3's President Nick O'Reilly said: "The predicted 41% increase in business insolvencies from 2007 to 2009 is catastrophic and unfortunately will mean we will start to approach the numbers we saw at the peak of the last recession in 1992. For the last three or four years a number of businesses that perhaps were not performing well have been kept alive artificially by the easy availability of credit, which has now dried up." Respondents anticipated a rise from the official figure of 13,091 in 2007 to 15,693 for 2008 and 18,440 for 2009, a 41% increase on 2007. This is a conservative estimate as 18% of respondents choose a figure over "over 20,000" as their prediction for 2009. Personal Insolvencies "By the end of 2009 our members anticipate a worrying increase of 22% on the 2007 figure, which is also incredibly worrying.� said Mr. O'Reilly. "Traditionally the route into personal insolvency is not an overnight process and unsurprisingly people will put off dealing with financial problems until they have exhausted all other options." For 2007, there were 121,796 personal insolvencies, and respondents thought by the end of this year this figure would get to 132,700 but would reach 148,352 by the end of 2009. "We would anticipate a nine month lag, with a spike in the figures for the second quarter of 2009,� said Mr. O'Reilly. Repossessions There is further concern as over half of respondents (54%) are seeing an increasing number of unsecured lenders attempting or achieving securitization of debt against individuals homes. "There is a growing trend in the UK for unsecured lenders to 'move up the chain', an activity banks such as Northern Rock have been practicing. It is now not just non-payment of a mortgage that can lead to repossession of homes unfortunately. This practice goes some way of explaining why the repossession figures are going up." The survey also indicates that secured lender repossessions will "increase a lot" by the end of 2009 according to 56% of respondents. "In a tough financial situation, more and more lenders will find themselves with bad debts, with limited routes open to them," said Nick O'Reilly. "This is sadly an inevitable consequence of overlending in a formerly buoyant market." "The battle for credit has been lost and there is no way out of what is coming. Businesses and individuals will now have to face up to today's tougher climate and seek professional advice as early as possible." The survey also highlights that IPs are on hand to offer advice, with 89% saying they offer their first hour free. * Howard Flight Blames Banking Crisis on UK Gov't. Policy Failures ------------------------------------------------------------------ The Centre for Policy Studies on Tuesday, November 4, published "From Boom to Bust, a report by Howard Flight. In the CPS report, Mr. Flight said: -- The banking crisis has its roots in mistaken monetary and economic policies; and in regulatory failure. -- In the UK, the main monetary policy failure was the imposition of a single cost of living inflation target on the Bank of England. This led to excessive money supply growth and is the underlying cause of excessive borrowing and mortgage and consumer lending. -- The economic failure was to assume that boom and bust had ended; to conflate consumption growth with economic growth; and, as long as five years ago, not to have recognized that lending, debt and house prices were rising too fast. -- The regulatory failures were to remove responsibility for banking oversight and regulation from the Bank of England; and to neglect the clear signals of imminent problems in the banking sector. -- These failures (all largely the responsibility of the Labour Government) created the preconditions which made a banking crisis inevitable in the UK sooner or later. -- The UK outlook is for vicious house price deflation; a severe recession, a falling stock market and a large Sterling devaluation. -- The depth of the current crisis is such that government borrowing is likely to rise to over GBP100 billion this year and for the next two years. There is a growing case for trying to advance private sector infrastructure investment and for cutting taxes. The short-term objective must be to sustain the money supply and economic activity, be to sustain the money supply and economic activity, particularly in the SME sector. -- In the longer term, the UK needs a smaller and more efficient public sector to free up the resources to improve productivity and economic growth. * PwC Says Bank of England Should Cut Interest Rates ---------------------------------------------------- Interest rates should be cut immediately by at least a further 0.5 percentage point to ease the squeeze for UK households, stimulate growth and help get the UK economy back on track, according to economists at PricewaterhouseCoopers LLP. The latest PwC UK Economic Outlook suggests that GDP growth will slow to 1% in 2008 and -0.5% in 2009 as the effects of the credit crunch push the UK into recession. Consumer spending growth is also expected to turn negative at -0.5% in 2009 due to the effects of high debt levels, tighter credit conditions, falling housing wealth, rising unemployment and earlier food and energy bill increases. The report also looks in detail at the state of public finances and suggests that the budget deficit will rise to about GBP70 billion in 2009/10 as the economic downturn takes effect, before easing to about GBP50 billion by 2012/13 as the economy recovers. This would still be an uncomfortably large budget deficit, however, and the report therefore indicates an eventual need for fiscal tightening of around GBP20 billion by 2012/13 to put the public finances back on a more sustainable basis in the medium term. John Hawksworth, head of macroeconomics at PricewaterhouseCoopers LLP, commented: "With unemployment rising, house prices continuing to fall and consumer spending easing, the UK will experience a recession in late 2008 and early 2009 before reaching calmer waters in 2010. "The Bank of England Monetary Policy Committee needs to cut interest rates progressively to 3% or lower in order to prepare the economy for the recovery we hope to see in 2010, and it needs to start this process [today] by cutting rates again by at least half a percentage point to 4% or less. "Significant tax increases or reductions in planned public spending growth seem likely to be needed beyond 2010, but it makes sense in the short term for the government to allow borrowing to rise in response to the economic downturn. There is, however, limited scope for further fiscal stimulus at present over and above the measures that have already been announced and perhaps some front-loading of existing public spending plans." The report also notes that risks to growth are heavily weighted to the downside and therefore suggests that businesses should make contingency plans for a less favorable scenario in which there is a deeper and more prolonged recession, with GDP falling by 2% in 2009 and showing little recovery in 2010. These downside risks have been exacerbated by the recent volatility in the global financial markets and the continuing marked decline of house prices, which the report estimates will in itself knock over 1% off consumer spending in 2009. About PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP -- http://www.pwc.co.uk/-- provides industry-focused assurance, tax and advisory services. It has more than 16,000 partners and staff in offices around the UK. * Fitch Says EU Sovereign Ratings Not Threatened By Bank Bail-Outs ------------------------------------------------------------------ Fitch Ratings says in a report published that bank bail out measures recently introduced across western and northern Europe do not threaten sovereign ratings. While the fiscal costs of the measures are substantial they are within tolerances of existing ratings, but they clearly reduce fiscal room for maneuver in the face of shocks. In Fitch's opinion, it is not appropriate to add together all the various measures, including central bank liquidity support and deposit guarantees, to conclude that government debt has "exploded" to 100% and more of national income (GDP). Instead, Fitch is focused on the direct fiscal costs associated with capital injections into financial institutions, purchases of assets and emergency liquidity support (loans) to troubled institutions. Fitch views government guarantees of bank debt and deposits as a "commitment mechanism" by the sovereign, signaling its willingness to intervene in a bank if it becomes necessary and as a crucial element of underpinning public confidence in the financial system. The risk of these contingent liabilities being crystallized onto government balance sheets on a large scale is, in Fitch's opinion, very low, and the agency will not be adding guarantees to government debt as if the risk has been realized. Nonetheless, the fiscal costs of financial sector support measures recently announced across Europe are large by the standards of past financial crises in advanced economies and range from 6%-7% of GDP in the UK, Germany, Belgium and the Netherlands up to 13% in Switzerland. Fitch estimates that gross fiscal outlays associated with announced bank rescue measures (including emergency liquidity support for troubled institutions) so far total EUR477 billion (equivalent to 4% of western European GDP in 2007). Historical evidence suggests that the net fiscal costs of financial support are typically lower than gross outlays but there are uncertainties in either direction and Fitch does not discount the possibility that further up-front fiscal outlays could be required. The impact on European public finances of the bank bailout measures will be substantial. If the full EUR477 billion is funded by government borrowing, it will increase public debt stocks by 7%. And combined with the expected deterioration in underlying fiscal positions as economic recession takes hold, government debt is projected by Fitch to approach 70% of GDP by 2010, a level last seen in the late 1990s and compared to 61% of GDP (in aggregate for the affected countries) last year. One of the fastest rates of increase in government debt will be in the UK, partly reflecting the size of the underlying fiscal deficit before the crisis. Fitch projects UK government gross debt to reach the Maastricht guideline of 60% of GDP by 2010, its highest level since the mid 1970s. Moreover, the associated increase in the borrowing of European governments will intensify the competition for funds and could place upward pressure on government bond yields. Smaller countries with less liquid government bonds will likely see the greatest impact. This may be mitigated by the fact that the private sector will be borrowing less as de-leveraging continues, but such large scale shifts in the flow of funds could result in volatility. While the cost of future funding could be higher than would otherwise have been the case, Fitch does not anticipate that any highly-rated government will be unable to meet its financing requirements. While the expected increase in government debt is not sufficiently large to threaten sovereign ratings - a public debt/GDP ratio rising above 80% is Fitch's threshold at which a rich country's 'AAA' rating would start coming under downward pressure - fiscal flexibility in the face of future shocks would clearly be reduced. This increases the importance of credible medium-term fiscal strategies to restore public finances to health once an economic recovery is underway early in the next decade. The report "Sovereign Implications of European Bank Bail Outs" is available on the agency's public Web site, http://www.fitchratings.com/ * Fitch Says EU Consumer Credit Decline to Affect Junior ABS Notes ------------------------------------------------------------------ Fitch Ratings says that during the first half of 2008, simultaneous increases in inflation and interest rates had a negative impact on the performance of consumer ABS transactions within certain jurisdictions. Combined with the generally reduced availability of consumer credit, Fitch expects such trends to place increasing pressure on the performance of consumer asset- backed securities (ABS) transactions in the near term. The impact is expected to be most pronounced in the UK, Spain and, to a lesser degree, Italy, but negative rating action is expected to be confined to junior notes. In a special report, Fitch warns that highest-cost unsecured debt is one of the most vulnerable areas in the event of a deep or prolonged recession. This will negatively impact performance of UK credit card and some auto ABS. "Although the UK credit card and German auto loan/lease ABS sectors appear vulnerable to a significant recession, rating actions are likely to be confined to junior tranches," says Philip Walsh, Head of ABS and RMBS for EMEA at Fitch. "In particular, auto transactions with a high residual value component could be challenged by declines in used car prices. Meanwhile, the junior notes of all Fitch-rated UK credit card transactions are already on Negative Outlook, reflecting the deteriorating performance in that sector." Fitch notes that UK credit card deals are to an extent protected by originator capacity for re-pricing to protect excess spread. The report provides an outlook for all European corporate and consumer ABS, broken down by jurisdiction and sector. Entitled, 'European Structured Finance, ABS Outlook - October 2008', it is available at http://www.fitchratings.com/ * Fitch Says Senior Tranches of European CLOs Resilient ------------------------------------------------------- Fitch Ratings says in a report that continued stability of senior CLO ratings and the fact that only a few CLOs were downgraded as a result of Fitch's recent corporate CDO criteria revisions demonstrates continued resilience of senior tranches of European CLO structures. Senior CLO ratings are expected to remain more stable than investment-grade synthetic CDO's even as the operating and financing environment for some of the underlying obligors deteriorate. "Many companies only have limited debt amortization at present and companies that refinanced in recent years have a long refinancing horizon," says Philip McDuell, Head of Structured Credit at Fitch for EMEA and Asia-Pacific. "However, there is a risk of increased negative rating migration on the underlying assets as some leveraged loans issuers begin to struggle to meet their financial projections in an increasingly difficult business environment. The weakest credits or those whose business model is heavily reliant on the economic cycle are therefore exposed to earlier refinancing risk." Meanwhile Fitch notes that European SMEs are also experiencing financial and operating pressure. "Although SME default rates have been low in recent years, in the current environment banks may be less willing to provide support to struggling borrowers than in the past, which could impact default rates negatively," says Lars Jebjerg, Senior Director, European Structured Credit at Fitch. "Recovery prospects are also likely to be negatively affected as, for example, real estate collateral in some areas is subject to market value decline." Since May 2008 Fitch has downgraded many investment-grade synthetic corporate CDO ratings following the application of its revised criteria for rating corporate CDOs. The average synthetic CDO remains significantly exposed to the financials, autos, and retailing sectors, which are expected to see continued negative rating trends. Even where transactions have not faced downgrades so far, credit events to date have in many cases eroded available credit enhancement to the point that the transactions are significantly exposed to downgrade risk if negative rating migration continues for the underlying assets. In the outlook report, Fitch reviews the outlook for all European structured credit asset classes. Entitled, 'European Structured Finance, Structured Credit Outlook - October 2008', it is available at http://www.fitchratings.com/ * Fitch: Severe Global Recession Expected in 2009 ------------------------------------------------- In its latest Global Economic Outlook, Fitch Ratings predicts that the world's major advanced economies -- US, UK, Euro area and Japan -- will next year experience the steepest decline in GDP since World War II. In aggregate GDP growth in these countries is expected to be (minus) -0.8% in 2009, compared to an estimated 1.1% for 2008. Tighter credit conditions, consumer retrenchment and falling corporate investment are expected to combine to deliver an unusually synchronized downturn across the advanced economies. World GDP will grow by just 1% next year -- the slowest rate since the early 1990s -- and compared to an average of 3.5% over the last five years. The combination of recession in developed countries, lower commodity prices and reduced international capital flows will result in a sharp slowdown in growth in emerging markets, though most will avoid outright recession. The rapid intensification of the global credit crisis in the last two months and clearer evidence of household retrenchment, declining corporate investment intentions and falling world trade growth explain the sharp deterioration in the outlook since Fitch's previous Global Economic Outlook was published on July 4, 2008. These factors far outweigh the benefits to income growth in the advanced economies from the decline in commodity prices. Recession driven by a contraction in the supply of credit is uncharted territory for the world economy and there are few historical parallels on which to gauge its possible depth or length. However, the aggressive expansion of central bank liquidity provision since early September, in combination with major fiscal injections into the US and European banking systems will head off the worst-case scenario of widespread deflation. Nevertheless, the process of de-leveraging by households and companies is now underway and this will weigh on spending for some time. Declining asset prices, rising unemployment and job uncertainty will result in higher desired household saving rates, while the deterioration in the cost and availability of household credit will push the adjustment further and faster. Business investment is also likely to fall sharply, consistent with its highly pro-cyclical nature as companies anticipate weak final demand and face tough borrowing conditions. The recent widening of the credit crisis to emerging markets dampens the prospects of companies in the advanced economies switching sales strategies to the developing world as the US consumer retrenches. This will also weigh on investment. In particular, the increasingly likely prospect of a hard landing in eastern Europe will hit German export growth, which has been a mainstay of its recent recovery. Fitch also expects growth in China to slow to just over 7% in 2009, its lowest rate for nearly two decades. Even so, it expects growth in Brazil, Russia, India and China (BRICs) overall to be 5.7%, reflecting policy flexibility, external financial strengths and structural factors. The decline of inflationary pressures from the commodity markets is positive news. It will allow the European Central Bank and the Bank of England to bring down interest rates rapidly, which will ease the de-leveraging process and help banks' profitability. In concert, fiscal policy will also cushion the shock to growth as governments absorb an increasing share of global liquidity through higher borrowing and inject it back into the economy through tax cuts or higher spending. Indeed, the macroeconomic policy response, along with the boost to real incomes from lower commodity prices, forms an important part of the expectation for recovery in 2010. This will, however, be to a rate well below that seen in the last five years, when credit was abundant. The report, "Global Economic Outlook, November 2008" is available at the agency's public site, http://www.fitchratings.com/ * Large Companies with Insolvent Balance Sheet ---------------------------------------------- Shareholders Total Working Equity Assets Capital Ticker (US$MM) (US$MM) (US$MM) ------ ----------- ------- -------- AUSTRIA ------- Libro AG (111) 174 (168) Sky Europe (3) 213 (53) BELGIUM ------- Sabena S.A. (86) 2,223 (280) CZECH REPUBLIC -------------- Ceskomoravska Kolben & Danek Praha Holding (89) 192 (59) Setuza A.S. (61) 139 (62) DENMARK ------- Elite Shipping (28) 101 3 Roskilde Bank (532) 7,877 N.A. FRANCE ------ BSN Glasspack (101) 1,150 159 Grande Paroisse S.A. (927) 629 347 Immob Hoteliere (67) 301 (17) Lab Dosilos (28) 110 (44) Matussiere et Forest S.A. MTF (78) 294 (38) Pagesjaunes GRP PAJ (3,023) 1,377 (453) Rhodia SA (504) 7,213 712 Selcodis S.A. SPVX (21) 140 (36) Trouvay Cauvin (0) 134 9 GERMANY ------- Alno AG ANO (21) 340 (88) Brokat AG (27) 144 109 CBB Holding AG COB (43) 905 N.A. Cinemaxx AG MXC (38) 178 (47) Dortmunder Actien-Brauerei DABG (13) 118 (28) EECH Group AG 0 109 57 EM.TV AG EV4G.BE (22) 849 19 Kaufring AG KAUG (19) 152 (48) Kunert AG (28) 102 29 Maternus Kliniken AG MAK.F (21) 204 (99) P & T Technology 0 109 57 Primacom AG PRC (14) 730 (68) Sander AG (6) 128 31 Sinnleffers AG (4) 454 (182) Spar Handels- AG SPAG (442) 1,433 (294) TA Triumph-Adler TWN (66) 484 (77) Vivanco Gruppe (10) 131 28 GREECE ------ Empedos SA (34) 175 (57) Noussa Spin (11) 450 (107) Petzetakis-PFC PETZP (15) 284 (143) Radio A.Korassidis KORA (101) 181 (164) Commercial Themeliodome (56) 232 (128) United Textiles (11) 450 (107) HUNGARY ------- Brodograde Indus (322) 263 (366) IPK Osijek DD OS (15) 124 (82) OT Optima Teleko (26) 119 8 ICELAND ------- Decode Genetics (186) 111 48 Fortune Mgmt. (119) 265 54 Samsonite Corp. (199) 651 149 IRELAND ------- Elan Corp PLC ELN (388) 1,599 705 Waterford Wed Ut WTFU (506) 820 364 ITALY ----- Binda S.p.A. BND (11) 129 (23) Cirio Finanziaria S.p.A. (422) 1,583 N.A. Gruppo Coin S.p.A. GC (151) 791 (61) Compagnia Italia ICT (138) 527 (318) Credito Fondiario e Industriale S.p.A. (200) 4,215 N.A. Eurofly S.p.A. (8) 180 (52) Fullsix (4) 114 (18) I Viaggi del Ventaglio S.p.A. VVE (64) 529 (127) Olcese S.p.A. OLCI.MI (13) 180 (80) Parmalat Finanziaria S.p.A. (18,421) 4,121 (16,921) Snia S.p.A. SN (25) 488 31 Technodiffusione Italia S.p.A. TDIFF.PK (90) 152 (30) NETHERLANDS ----------- Baan Company N.V. BAAN (8) 610 46 James Hardie Ind. (238) 2,357 184 United Pan-Euro Air UPC (5,506) 5,113 (9,170) NORWAY ------ Interoil Exploration IOX (25) 210 (11) Petroleum-Geo Services PGO (18) 400 (758) POLAND ------ Toora (288) 147 (86) ROMANIA ------- Oltchim RM Valce OLT (7) 673 (170) Rafo Onesti RAF (430) 353 (616) RUSSIA ------ Akcionernoe Brd (116) 134 (24) East Siberia Brd VSNK (113) 148 (10) Gukovugol (58) 144 (148) Omskij Kauchu OMKA (4) 125 (68) OAO Samaraneftegas (332) 892 (611) Vimpel Ship SOVP (116) 135 (24) Zil Auto ZILLP (240) 478 (447) SWEDEN ------ Swedish Match (69) 2,444 545 TURKEY ------ Egs Ege Giyim VE (7) 147 (25) Iktisat Financial (46) 108 N.A. Mudurnu Tavukcul (65) 160 (115) Nergis Holding (77) 299 38 Sifas (17) 117 21 UKRAINE ------- Dniprooblenergo DNON (51) 433 (200) Donetskoblenergo DOON (341) 573 (469) UNITED KINGDOM -------------- Advance Display (3,016) 2,590 (411) Airtours Plc (379) 1,818 (932) Alldays Plc (121) 253 (290) Amer Bus Sys (497) 121 (497) Amey Plc AMY (49) 932 (76) Anker Plc (22) 115 16 Atkins (WS) Plc ATK (46) 1,344 58 Black & Edgingto (140) 203 23 BNB Recruitment (10) 104 38 Booker Plc BKRUY (60) 1,300 (13) Bradstock Group BDK (2) 268 7 British Energy Ltd (5,823) 4,921 533 British Energy Plc BGY (5,823) 4,921 533 British Sky Broadcast (334) 8,126 (388) Carlisle Group (12) 203 30 Compass Group CPG (668) 2,972 (440) Danka Bus (497) 121 (497) Dawson Holdings (18) 226 (63) Dignity Plc DTY (9) 648 71 Easynet Group ESY.L (45) 323 68 Electrical and Music Industries Group EMI (2,266) 2,950 (582) European Home (14) 111 (70) Farepak Plc (14) 111 (70) Gartland Whalley (11) 145 (13) Hilton Food Group (21) 256 (12) Kleeneze Plc (14) 111 (70) Ladbrokes Plc LAD (814) 2,403 (706) Lambert Fenchurch Group (1) 1,823 5 Leeds United (73) 144 (48) M 2003 Plc (2,205) 7,210 (1,078) Mytravel Group MT.L (380) 1,818 (931) New Star Asset (398) 293 21 Next Plc (119) 3,161 (125) Orange Plc ORNGF (594) 2,902 12 Orbis Plc (4) 123 (5) Patientline Plc (55) 125 (10) Preedy Alfred (119) 3,161 (125) Rank Group Plc (132) 1,066 (175) Regus Plc (46) 367 (97) Rentokil Initial (8) 4,178 (886) Saatchi & Saatchi SSI (119) 706 (67) SFI Group SUF (108) 178 (265) Skyepharma Plc SKP (140) 203 23 Smiths News Plc (124) 201 (92) Styles & Wood (57) 107 (9) Telewest Communications Plc TLWT (3,701) 7,579 (10,039) Thorn Emi Plc (2,266) 2,950 (582) Topps Tiles Plc (111) 195 18 UTC Group (12) 204 30 Virgin Mobile (392) 166 (176) Watson & Philip (120) 252 (290) ********* 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. Pius Xerxes V. Tovilla, Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante, 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 * * *