/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/090218.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, February 18, 2009, Vol. 10, No. 34 Headlines A U S T R I A CARPE DIEM: Claims Registration Period Ends February 23 DEKOR-WOLF LLC: Claims Registration Period Ends February 24 ERDBAU-AUINGER LLC: Claims Registration Period Ends Feb. 24 KARL HANTSCHEL: Claims Registration Period Ends Feb. 24 B E L G I U M ETHIAS SA: S&P Retains Negative Watch on 'BB-' Sub. Debt Rating F R A N C E SOCIETE GENERALE: S&P Downgrades & Withdraws 'BB' Rating on Notes SOCIETE GENERALE: S&P Junks and Vacates Rating on EUR5 Mil. Notes G E R M A N Y G & K HEIZUNG-SANITAR: Claims Registration Ends March 10 KADGO STAHLBAU: Claims Registration Period Ends March 2 LINUX NETWORX: Claims Registration Period Ends March 9 LUMA BEDACHUNGS: Claims Registration Period Ends March 12 R & W PARKETT: Claims Registration Period Ends February 23 TALISMAN-6 FINANCE: S&P Lowers Rating on Class F Notes to 'D' VLT-2000 VERKEHRSLEITTECHNIK: Claims Registration Ends March 17 * GERMANY: Economy Contracted by 2.1% in Fourth Quarter 2008 G R E E C E STAR BULK: Lenders Grant Waiver on Certain Loan Covenants I R E L A N D ANGLO IRISH: Irish Life Executives Step Down Over Loan Controversy BERNARD L. MADOFF: Trustee Seeks to Hire EFC for Irish Proceedings DENHOLME: Goes Into Liquidation; 300 Jobs Affected DESMOND MURTAGH: In Receivership; KPMG Appointed DOUGLAS WALLACE: Reduction in Demand Spurs Examinership ELY MEDICAL: Interim Examiner Appointed IRISH NATIONWIDE: Moody's Cuts Financial Strength Rating to 'D-' SWISSCO LTD: Former Workers Demand Better Redundancy Payments * IRELAND: Could Default on National Debt K A Z A K H S T A N CITY STROY: Creditors Must File Claims by March 20 EURO TRANSIT: Creditors Must File Claims by March 27 JAR ASIA: Creditors Must File Claims by March 27 NEFTE SNUB: Creditors Must File Claims by March 27 ROMANICO INTERNATIONAL: Creditors Must File Claims by March 20 SEYMAR ALI: Creditors Must File Claims by March 27 STROY COM XXI: Creditors Must File Claims by March 27 ZELEN STROY: Creditors Must File Claims by March 27 * S&P Cuts Counterparty Credit Ratings on 5 Kazakh Banks to Low-B K Y R G Y Z S T A N SHOORAT LLC: Creditors Must File Claims by March 13 N E T H E R L A N D S PALLAS CDO: Fitch Junks Ratings on Two Classes of Notes LYONDELBASELL: To Temprorarily Idle LDPE Units in UK and France LYONDELLBASELL INDUSTRIES: Payment Default Cues S&P's 'D' Rating R U S S I A ANGARA-LES LLC: Creditors Must File Claims by March 6 DRAIV ALYUMINEVYE: Creditors Must File Claims by March 6 FEDERAL BANK: S&P Assigns 'B-' Long-Term Counterparty Rating GRAND-D LLC: Creditors Must File Claims by April 6 INTERWOOD LLC: Creditors Must File Claims by March 6 IZO-STROY LLC: Creditors Must File Claims by March 6 LIPETSK MACHINE-REPAIR: Creditors Must File Claims by March 6 PRESS-FORGING PLANT CJSC: Creditors Must File Claims by March 6 SVECHINSKIY LUMBER: Creditors Must File Claims by March 6 TULUCHI-LES LLC: Creditors Must File Claims by March 6 URALSIB-YUG BANK: S&P Assigns 'B' Counterparty Credit Ratings VORONEZHSKIY ALUMINUM: Creditors Must File Claims by March 6 S P A I N CABLEUROPA SAU: S&P Junks Corporate Credit Rating to 'CCC+' S W E D E N KAUPTHING BANK: Alandsbanken to Buy Swedish Unit for SEK414 Mln S W I T Z E R L A N D 3 C HOLDING: Creditors Must File Proofs of Claim by February 21 BAAS & ROOST: Deadline to File Proofs of Claim Set February 21 CHAMALEON BAU: Creditors Have Until February 21 to File Claims DPS INVEST: Proof of Claim Filing Deadline Set February 22 MYJOB BUCHS: Creditors' Proofs of Claim Due by February 21 SHOWAG WATCH: February 21 Set as Deadline to File Claims U K R A I N E ALIV LLC: Creditors Must File Claims by February 29 CONCORD CJSC: Court Starts Bankruptcy Supervision Procedure EVRIS LLC: Creditors Must File Claims by February 29 HYPPO-POLESYE LLC: Creditors Must File Claims by February 28 INTELLECT LLC: Court Starts Bankruptcy Supervision Procedure INTERNATIONAL TRADING: Creditors Must File Claims by February 28 STEPLIS STEEL: Creditors Must File Claims by February 29 TRADEIMPE KS: Court Starts Bankruptcy Supervision Procedure * Fitch Cuts Currency Ratings on Three Ukrainian Cities to 'B' * UKRAINE: Liquidity Stress Could Spur Default, Paul Biszko Says U N I T E D K I N G D O M AROSA FUNDING: Moody's Withdraws Ratings on Two B3-Rated Notes ASSCHER FINANCE: Moody's Withdraws 'C' Ratings on Various Notes CHROME FUNDING: S&P Downgrades Rating on Series 11 Notes to 'D' CULLINAN FINANCE: Moody's Withdraws 'Ca' Rating on Income Note EPIC PLC: Fitch Junks Ratings on GBP29.2 Mil. Class F Notes EUROHOME MORTGAGES: S&P Cuts Ratings on Class C 2007-1 Notes to B HERCULES PLC: S&P Lowers Rating on Class E Notes to 'BB' IVORY CDO: Fitch Cuts Ratings on Class E Notes to 'CCC' LEHMAN BROTHERS: Moody's Confirms and Withdraws 'B/MR1+' Rating LLOYDS BANKING: Expects GBP10 Billion Full Year Loss for HBOS SUNJUICE LTD: Appoints Joint Administrators from PwC FUNDWORKS UK: Tenon Recovery Named Joint Administrators NORTH WEST ESTATES: Taps Administrators from Tenon Recovery PROPERTY FINDERS: Appoints Administrators from Tenon Recovery VITESSE PRINT: Owes Creditors More Than GBP3 Million WH WILMOT: To Be Placed Into Administration ********* ============= A U S T R I A ============= CARPE DIEM: Claims Registration Period Ends February 23 ------------------------------------------------------- Creditors owed money by LLC Carpe Diem (FN 47402i) have until Feb. 23, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Michael Krautzer Hans-Gasser-Platz 3/II 9500 Villach Austria Tel: 04242/21223 Fax: 04242/21223-33 E-mail: mitzner.krautzer@utanet.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:00 a.m. on March 2, 2009, for the examination of claims at: Land Court of Klagenfurt (729) Meeting Room 225 Klagenfurt Austria Headquartered in Paternion, Austria, the Debtor declared bankruptcy on Jan. 20, 2009, (Bankr. Case No. 41 S 13/09y). DEKOR-WOLF LLC: Claims Registration Period Ends February 24 ----------------------------------------------------------- Creditors owed money by LLC Dekor-Wolf (FN 110590h) have until Feb. 24, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Ulla Reisch Kremser Gasse 4 3100 St. Pölten Austria Tel: 02742/35 15 50 Fax: 02742/35 15 50-5 E-mail: office.st.poelten@ulsr.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:50 a.m. on March 17, 2009, for the examination of claims at: Land Court of St. Poelten (199) Room 216 St. Poelten Austria Headquartered in Tulln, Austria, the Debtor declared bankruptcy on Jan. 20, 2009, (Bankr. Case No. 14 S 11/09x). ERDBAU-AUINGER LLC: Claims Registration Period Ends Feb. 24 ----------------------------------------------------------- Creditors owed money by LLC Erdbau-Auinger (FN 92778p) have until Feb. 24, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Walter Eisl Ardaggerstrasse 14 3300 Amstetten Austria Tel: 07472/685 40 Fax: 07472/685 40-15 E-mail: kanzlei@rechtsanwalt-eisl.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:50 a.m. on March 17, 2009, for the examination of claims at: Land Court of St. Poelten (199) Room 216 St. Poelten Austria Headquartered in Amstetten, Austria, the Debtor declared bankruptcy on Jan. 22, 2009, (Bankr. Case No. 14 S 13/09s). KARL HANTSCHEL: Claims Registration Period Ends Feb. 24 ------------------------------------------------------- Creditors owed money by LLC Karl Hantschel (FN 091139d) have until Feb. 24, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Wolfgang Strasser Hauptplatz 11 4300 St. Valentin Austria Tel: 07435/52 4 37 Fax: 07435/52 437-21 E-mail: st-valentin@advocat24.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:30 a.m. on March 17, 2009, for the examination of claims at: Land Court of St. Poelten (199) Room 216 St. Poelten Austria Headquartered in Ennsdorf bei Enns, Austria, the Debtor declared bankruptcy on Jan. 20, 2009, (Bankr. Case No. 14 S 10/09z). ============= B E L G I U M ============= ETHIAS SA: S&P Retains Negative Watch on 'BB-' Sub. Debt Rating --------------------------------------------------------------- Fitch Ratings affirmed Ethias S.A.'s Insurer Financial Strength rating and Long-term Issuer Default Rating at 'BBB-' (BBB minus) while removing them from Rating Watch Negative. The agency also affirmed the IFS ratings of Ethias Droit Commun and Bel Re at 'BBB-' (BBB minus) and removed them from RWN. The Outlook on all IFS ratings and the IDR is Stable. Ethias S.A.'s subordinated debt rating of 'BB-' (BB minus) remains on RWN. The affirmations follow the confirmation of the finalization of the group's reorganization, including the approval of the European Commission anti-trust body. Ethias S.A.'s subordinated debt rating of 'BB-' (BB minus) remains on RWN to reflect the increase in deferral risk according to the agency, especially if operating conditions worsen. As a group, Ethias is one of the leading composite insurers in Belgium by written premiums with around 1.1 million individual clients. =========== F R A N C E =========== SOCIETE GENERALE: S&P Downgrades & Withdraws 'BB' Rating on Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'BB' from 'BBB-', removed from CreditWatch negative, and then withdrew its credit rating on the EUR2 million Gascogne floating-rate credit-linked notes series 7243/04-11 issued by SGA Societe Generale Acceptance N.V. The rating withdrawal follows an early redemption of the notes. SOCIETE GENERALE: S&P Junks and Vacates Rating on EUR5 Mil. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'CCC+' from 'B-', removed from CreditWatch negative, and then withdrew its credit rating on the EUR5 million Gascogne fixed-rate CDO credit-linked notes series 8350/05-5 issued by Société Générale. The rating withdrawal follows an early redemption of the notes. ============= G E R M A N Y ============= G & K HEIZUNG-SANITAR: Claims Registration Ends March 10 -------------------------------------------------------- Creditors of G & K Heizung-Sanitar GmbH have until March 10, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 1:20 p.m. on April 7, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Dessau-Rosslau Hall 123 Willy-Lohmann-Str. 33 Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Volkhard Frenzel Magdeburger Strasse 23 06112 Halle Germany Tel: 0345/2311111 Fax: 0345/2311199 The District Court opened bankruptcy proceedings against the company on Feb. 5, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: G & K Heizung-Sanitar GmbH Strasse der Jugend 3 06917 Jessen Germany Attn: Lutz Peter Braun, Manager Dorfstrasse 118 06917 Hemsendorf Germany KADGO STAHLBAU: Claims Registration Period Ends March 2 ------------------------------------------------------- Creditors of Kadgo Stahlbau GmbH have until March 2, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 12:00 p.m. on March 23, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Kleve Meeting Hall C 58 Ground Floor Schlossberg 1 47533 Kleve Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Rainer Beck Rheinstrasse 75 47623 Kevelaer Germany Tel: 0283297720 Fax: 02832799875 The District Court opened bankruptcy proceedings against the company on Jan. 29, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Kadgo Stahlbau GmbH Attn: Thomas Grygiel, Manager Ulmenweg 19 46509 Xanten Germany LINUX NETWORX: Claims Registration Period Ends March 9 ------------------------------------------------------ Creditors of Linux Networx GmbH have until March 9, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:40 a.m. on April 6, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Kaiserslautern Hall 11 Station Route 24 67655 Kaiserslautern Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Michael Wellstein C/o Gesper, Hermes & Partner GBR L 11 20-22 68161 Mannheim Germany Tel: 0621/129430 Fax: 0621/152466 The District Court opened bankruptcy proceedings against the company on Feb. 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Linux Networx GmbH Fraunhofer Platz 1 67663 Kaiserslautern Germany Attn: David Frederick Sundstrom, Manager 14944 Pony Express Road Bluffdale Germany LUMA BEDACHUNGS: Claims Registration Period Ends March 12 --------------------------------------------------------- Creditors of Luma Bedachungs GmbH have until March 12, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on March 27, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Hameln Hall 108 Zehnthof 1 31785 Hameln Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Ruediger Marahrens Gerichtsfach 150 Lilly-Reich-Str. 7 31137 Hildesheim Germany Tel: 05121/697720 Fax: 05121/6977220 The District Court opened bankruptcy proceedings against the company on Feb. 5, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Luma Bedachungs GmbH Attn: Drasko Gligoric, Manager Fischbecker Str. 58 31785 Hameln Germany R & W PARKETT: Claims Registration Period Ends February 23 ---------------------------------------------------------- Creditors of R & W Parkett GmbH have until Feb. 23, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:20 a.m. on March 16, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Essen Meeting Hall 293 Second Floor Zweigertstr. 52 45130 Essen Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Rolf Otto Neukirchen Zweigertstr. 28-30 45130 Essen England The District Court opened bankruptcy proceedings against the company on Feb. 2, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: R & W Parkett GmbH Attn: Michael Reinholz, Manager Bruesseler Str. 57 45968 Gladbeck Germany TALISMAN-6 FINANCE: S&P Lowers Rating on Class F Notes to 'D' ------------------------------------------------------------- Standard & Poor's Rating Services lowered to 'D' from 'CCC-' and removed from CreditWatch negative its credit rating on the class F notes issued by Talisman-6 Finance PLC. In addition, S&P has lowered its rating on the class E notes to 'B' from 'BB' and kept on CreditWatch negative and put the rating on the class D notes on CreditWatch negative. S&P has taken these rating actions due to a shortfall in interest due on the class F notes and also because S&P anticipates a principal loss as a result of the performance of the Cherry loan. On the April 2008 interest payment date, a payment default occurred under the Cherry loan. This resulted in drawings under the liquidity facility and the loan being transferred into special servicing. The Cherry loan remains in payment default and the liquidity available for the class F notes (EUR950,000) is now exhausted. In July 2008, a new valuation of the properties was provided, estimating a value at EUR50.02 million (against a Day 1 value of EUR70.76 million), which resulted in a revised loan-to-value ratio of 118.6%. The loan collateral comprises 11 predominantly residential properties (2,133 units at closing) in East Germany. Most of the assets are in average-to-good locations, but face strong competition and demographic challenges, including an ageing and declining population, within their respective micro-markets. This is especially true for the properties located in Gross Schacksdorf, Pirna, Chemitz, and some of the Meissen assets. S&P understands the special servicer is working with the borrower on an updated business plan to determine how best to resolve the defaults. S&P has not received detailed information on the performance of the assets, such as tenancy schedule, gross rental income, and net rental income. S&P understands that the special servicer is in the process of obtaining relevant information about the portfolio in conjunction with a newly appointed property manager. However, in the light of the July 2008 valuation, S&P considers that a significant principal loss is likely to occur for this loan and consequently for the notes. Accordingly, S&P has lowered its rating on the class E and F notes and put the class D notes on CreditWatch negative. Ratings List Talisman-6 Finance PLC EUR1.067 Billion Commercial Mortgage-Backed Floating-Rate Notes Rating Lowered and Kept on CreditWatch Negative Rating ------ Class To From ----- -- ---- E B/Watch Neg BB/Watch Neg Rating Lowered and Removed from CreditWatch Negative Rating ------ Class To From ----- -- ---- F D CCC-/Watch Neg Rating Placed On CreditWatch Negative Rating ------ Class To From ----- -- ---- D BBB/Watch Neg BBB VLT-2000 VERKEHRSLEITTECHNIK: Claims Registration Ends March 17 --------------------------------------------------------------- Creditors of VLT-2000 Verkehrsleittechnik GmbH have until March 17, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 11:30 a.m. on April 20, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Schwerin Hall 7 Demmlerplatz 14 Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Michael Wilkens Elbchaussee 140 22763 Hamburg Germany Tel: 040/ 8802051 The District Court opened bankruptcy proceedings against the company on Feb. 2, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: VLT-2000 Verkehrsleittechnik GmbH Attn: Dieter Pidinkowski, Manager Karl-Liebknecht-Strasse 2b 19395 Karow Germany * GERMANY: Economy Contracted by 2.1% in Fourth Quarter 2008 ------------------------------------------------------------ The Germany economy shrank by 2.1% in the fourth quarter of 2008, the biggest quarterly decline since German reunification in 1990, Breakingnews.ie reports citing the country's Federal Statistic Office. According to Breakingnews.ie, it was the third consecutive quarterly contraction in gross domestic product. The report recalls in both the second and third quarters, the economy shrank by 0.5%. As reported in the TCR-Europe on Nov. 24, 2008, BBC News said Germany officially slipped into a recession. Klaus Schruefer at SEB expected a further contraction in the fourth quarter, BBC disclosed. BBC said the gloomy forecasts were based on the glut of recent indicators showing a slowdown in the German economy. Citing the economy ministry in Berlin, BBC noted orders for goods produced by the world's largest exporter fell 8% between August and September. Orders from outside Europe fell 11.4%, while domestic orders dropped 4.3%. =========== G R E E C E =========== STAR BULK: Lenders Grant Waiver on Certain Loan Covenants --------------------------------------------------------- Star Bulk Carriers Corp. said it has reached agreements in principle with its lenders to obtain waivers for certain covenants including minimum asset coverage covenants contained in its loan agreements. With respect to the US$120 million facility, the lender will waive the loan-to-value ratio covenant through January 31, 2010. The Company will provide a first preferred mortgage on the currently debt-free vessel Star Alpha and pledge an account containing US$6 million as further security for this facility. With respect to the US$150 million facility, the lenders will waive the security cover requirement through February 28, 2010, and the Minimum Asset Coverage Ratio for the year 2010 will be reduced to 110% from 125%. The Company will provide first preferred mortgages on the currently debt-free vessels Star Kappa and Star Ypsilon and will pledge an account containing US$9 million as further security for this facility. With respect to the US$35 million facility, the lender will waive the security cover requirement through February 28, 2010, and the Minimum Asset Coverage Ratio for the year 2010 will be reduced to 110% from 125%. The Company will pledge an account containing US$5 million as further security for this facility. The interest spread for each of the loans will be adjusted to 2% per annum for the duration of the respective waiver period. The agreements require final approval by the credit committees of the respective lenders. The Company also said that under the terms of the agreements, its cash dividends and its share repurchases are being suspended. Akis Tsirigakis, CEO of Star Bulk, commented: "We are pleased with the successful outcome of our discussions with our lenders and the recent significant fleet employment developments strengthening the position of the Company in the current market environment. Our fleet's contracted operating days coverage is now 93% in 2009 when taking into account time charter and COA contracts, providing significant cash flow visibility. The suspension of our dividend will reinforce our liquidity and balance sheet." Star Beta Meanwhile, the Company also disclosed new charter for The Star Beta, a Capesize vessel of 174,691 dwt, built in 1993, which has been time chartered for a period of 13 to 15 months at a gross daily rate of US$32,500. The vessel is expected to be delivered to its new charterers within February 2009. About Star Bulk Based in Athens, Greece, Star Bulk Carriers Corp. (NASDAQ:SBLK) -- http://www.starbulk.com/-- is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. The Company's fleet carries a variety of drybulk commodities, including coal, iron ore, and grains, or major bulks, as well as bauxite, phosphate, fertilizers and steel products, or minor bulks. As of June 25, 2008, it owned and operated a fleet of 11 vessels consisting of three Capesize, one Panamax, and seven Supramax drybulk carriers with an average age of 10 years and a combined cargo carrying capacity of approximately 1.0 million deadweight ton. In January 2008, the Company had taken delivery of the Star Gamma (ex C Duckling), a Supramax vessel of 53,098 deadweight tons built in 2002, in Japan. In January 2008, it also took the delivery of the M/V Star Beta (ex B Duckling), a Capesize vessel of 174,691 deadweight tons built in 1993; the Star Zeta (ex I Duckling), a Supramax vessel of 52,994 deadweight tons built in 2003. ============= I R E L A N D ============= ANGLO IRISH: Irish Life Executives Step Down Over Loan Controversy ------------------------------------------------------------------ Roland Gribben at The Daily Telegraph reports that three senior executives at Irish Life & Permanent resigned over their role in the controversy surrounding a deposit made by the group in Anglo Irish Bank. According to The Daily Telegraph, Peter Fitzpatrick, finance director; David Gantly, head of group treasury; and chief executive Denis Casey quit their posts last week. Mr. Casey stepped down Friday last week following government pressure. The Daily Telegraph notes that while Irish Life conceded that mistakes had been made, it said the two executives who resigned were only trying to support the financial services sector when they approved the transfer. Irish Life, as cited by Bloomberg News, said it supported Anglo Irish with deposits totaling EUR7.45 billion, or US$9.6 billion, in September to help the bank "in the face of an unprecedented threat to the stability of the Irish financial system." However, Finance Minister Brian Lenihan argued the transactions may have created a "false impression" about Anglo's deposit base, Bloomberg News recounts. Casey's resignation was an "an essential first step in repairing the reputational damage done to the Irish financial system," Bloomberg News quoted Mr. Lenihan as saying. Probe Breakingnews.ie discloses the Financial Regulator is investigating officers in both Irish Life and AIB. The investigating officers have been mandated to complete their work in both banks as a matter of extreme urgency, Breakingnews.ie notes. Breakingnews.ie relates the Financial Regulator views as completely unacceptable the issues which have emerged relating to the two bank's transactions. It said it encouraged Irish banks to work together where necessary so as to continue to use normal inter-bank funding arrangements for liquidity purposes, Breakingnews.ie adds. About Anglo Irish Bank Headquartered in Dublin, Ireland, Anglo Irish Bank Corporation plc -- http://www.angloirishbank.ie/-- operates in three core areas: Business Lending, Treasury and Wealth Management. * * * As reported in the TCR-Europe on Jan. 23, 2009, Standard & Poor's Ratings Services said that it lowered its ratings on GBP300 million 6.25% Tier 1 preference shares issued by Anglo Irish Bank Corp. Ltd. (previously a public limited company; A-/Watch Neg/A-1) to 'D' from 'B'. At the same time, the 'B' issue ratings on these preference shares were removed from CreditWatch, where they had been placed with negative implications on Sept. 30, 2008. The 'B' issue ratings on Anglo's other undated perpetual instruments are unchanged. On Jan. 21, 2009, the TCR-Europe reported that Moody's Investors Service had downgraded the long-term bank deposit rating and senior unsecured debt rating of Anglo Irish Bank Corporation to A2 from A1, concluding the review on these ratings initiated in October 2008. The bank's Prime-1 short-term bank deposit and debt ratings were affirmed. Anglo Irish Bank's BFSR was downgraded to E+ (mapping to a baseline credit assessment of B2), from C+ (baseline credit assessment equivalent of A2), on review for possible downgrade. BERNARD L. MADOFF: Trustee Seeks to Hire EFC for Irish Proceedings ------------------------------------------------------------------ Irving H. Picard, Esq., as trustee for the liquidation of the business of Bernard L. Madoff Investment Securities LLC, under the Securities Investor Protection Act, seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to hire the law firm Eugene F. Collins, an Irish firm of solicitors, as special counsel. Aside from liquidation cases in the United States and United Kingdom, proceedings have been initiated in the High Court, Dublin, Ireland that require the Trustee's participation and representation therein. Actions are currently pending before the High Court between (i) Thema International Fund PLC as plaintiff and HSBC Securities Services (Ireland) Limited and HSBC Institutional Trust Services (Ireland) Limited as defendants, (ii) AA (Alternative Advantage) as plaintiff and HSBC Securities Services (Ireland) Limited and HSBC Institutional Trust Services (Ireland) Limited as defendants (the "AA Proceeding") and (iii) Fortis Prime Fund Solutions Custodial Services (Ireland) Limited as plaintiff and HSBC Securities Services (Ireland) Limited and Defender Fund as defendant. The Irish Proceedings relate to certain monies that plaintiffs claim the defendants are holding for its benefit arising out of subscriptions and redemptions to and from BLMIS. Specifically, the High Court held a hearing in the Thema Proceeding on February 10, 2009 at which it instructed the Trustee to file and claims and evidence by March 2, 2009 and adjourned the matter until March 12,2009. The Trustee was represented at the hearing by EFC, with the understanding that the continued representation of the Trustee must be approved by the New York Bankruptcy Court. The Trustee has determined that it is necessary to engage counsel to represent him in the Irish Proceedings. As EFC has already represented the Trustee in the Thema Proceeding and is familiar with these matters, the Trustee proposes to retain and employ EFC as its special counsel with regard to the Irish Proceedings, and any matters related to other proceedings in Ireland as directed by the Trustee, nunc pro tunc as of February 9, 2009. The Trustee seeks to retain EFC as special counsel because of its knowledge, expertise and experience in liquidation proceedings in Ireland. Mr. Picard asserts that the services of EFC are necessary and essential to enable him to execute faithfully his duties. He adds that, to the best of his knowledge, the members, counsel and associates of EFC are disinterested pursuant to Section 8eee(b)(3) of SIPA and do not hold or represent any interest adverse to the Debtor's estate in respect of the matter for which EFC is to be retained. EFC will be compensated at its normal hourly rates, less a l0% discount. Applications for compensation to EFC will be filed with the Bankruptcy Court pursuant to applicable statutes and rules. EFC's discounted hourly rates are: Level of Experience Discounted Rate (EUR) ------------------- --------------------- Partner 450 Associate 315 Junior 100 The Securities Investor Protection Corporation has no objection to the retention of special counsel for the Irish Proceedings. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in US stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on Dec. 15, 2008, the Securities and Exchange Commission charged Bernard L. Madoff and his investment firm, Bernard L. Madoff Investment Securities LLC, with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Madoff's fraud were at least US$50 billion Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. DENHOLME: Goes Into Liquidation; 300 Jobs Affected -------------------------------------------------- Denholme, the company behind retail chain Sasha, has gone into liquidation, resulting in the loss of 300 jobs, The Irish Times reports. According to The Irish Times, Denholme failed to attract new investment, prompting the liquidation. David Carson of Deloitte has been appointed liquidator to Denholme, which went into examinership late last year following difficult trading conditions, The Irish Times relates. RTE Business recalls Mr. Carson was appointed as examiner by the High Court in December. However, Denholme, as cited by Breakingnews.ie, said "In the period since that appointment there has been a marked deterioration in the trading conditions faced by the group. It noted "there was no longer a reasonable prospect of survival." Sasha, The Irish Times discloses, has 42 stores across Ireland and has been trading for 27 years. DESMOND MURTAGH: In Receivership; KPMG Appointed ------------------------------------------------ Ian Kehoe at The Sunday Business Post reports that ACC has decided to appoint a receiver to Desmond Murtagh Construction's retirement village development after it became concerned about the company's financial position. According to the report, the company, which had works in progress valued at EUR15.3 million at the end of April 2007, has suffered from the subsequent decline in the property market. The receiver, accountant Kieran Wallace of KPMG, is currently assessing the financial position of the company's developments, including houses in Cavan, Belturbet and Arva in Co Cavan, as well as shops and offices in Ballinamore in Co Leitrim. DOUGLAS WALLACE: Reduction in Demand Spurs Examinership ------------------------------------------------------- Ian Kehoe at The Sunday Business Post reports that Douglas Wallace Architects & Designers, the architecture firm behind the Dundrum Town Centre and the G Hotel in Galway, has gone into examinership after being hit by the massive decline in Ireland's construction industry and worsening economic conditions. The report relates the company was unable to meet its historic liabilities as it "has experienced a major reduction in demand for its services in Ireland." The company, as cited by the report, said it expects its revenues to drop to about EUR7 million in 2009 from EUR15 million last year, blaming the downturn in the construction sector. The report recalls the company petitioned the High Court last week to be placed into examinership, in an effort to avoid liquidation. Ken Fennell, a partner in accountancy firm Kavanagh Fennell, has been appointed as interim examiner, the report recounts. The report states a full hearing on the petition will be heard in the coming days. According to the report, the court heard that the company had a reasonable chance of survival if the examiner secured new investment and restructured its debts. Douglas Wallace, the report discloses, is one of the biggest architecture practices in Ireland. The company has operations in Dublin, Belfast, London and Prague. It employs almost 200 people at its peak, the report adds. The report notes the company's directors do not intend to place either the London or Prague office into examinership. ELY MEDICAL: Interim Examiner Appointed --------------------------------------- Ian Kehoe at The Sunday Business Post reports that Ely Medical has petitioned the High Court to be placed into examinership following a period of difficult trading conditions. The report relates the court has appointed Neil Hughes, managing partner of accountancy firm Hughes Blake, as interim examiner to the company, which has annual revenues of about EUR12 million. The petition for the appointment of an examiner will be heard in the coming days, the report notes. In a statement, the company, as cited by the report, said "A reorganization will take place, as well as investment into the business to ensure a positive future". "The staff jobs are secure, as well as the future of the business," the report quoted the company as saying. The report discloses that according to the company, its backer Paul McGlade had invested EUR5 million into the business over the last three years. Mr. McGlade injected a total EUR1.5 million into the group last year, the report states citing a statement from the company. Ely Medical owns the Optima laser eye surgery business and the Body Clinic in Dublin. IRISH NATIONWIDE: Moody's Cuts Financial Strength Rating to 'D-' ---------------------------------------------------------------- Moody's Investors Service has downgraded the long-term bank deposit rating and the senior debt rating of Irish Nationwide Building Society to Baa3 from Baa1. The society's subordinated debt has been downgraded to Ba1. The bank financial strength rating was lowered to D- (mapping to a baseline credit assessment - "BCA" - of Ba3) from C- (BCA of Baa2). The outlook is negative. The short term debt and deposit ratings were downgraded to Prime-3 from Prime-2. This concludes the review on the bank's ratings initiated on September 4, 2008. The backed-Aaa rated senior debt, maturing prior to September 29, 2010, and the backed short-term issuer rating of Prime-1, covered by the Irish government guarantee, are unaffected by this action. The downgrade of the BFSR to D-, with a negative outlook, reflects Moody's expectation that impairments in the society's commercial property loan book will continue to increase, as well as the poor asset quality within the residential mortgage book. Given Moody's loss expectations for the loan portfolio, the society's capital levels have the potential to be eroded to levels which are consistent with a low D range bank financial strength rating. The negative outlook reflects that the rapid deterioration in land and property values in Ireland and the UK that have eroded the high loan-to-value ratios on the commercial property and development loan book and the deteriorating economic conditions in both Ireland and the UK may lead to further pressure on asset quality beyond Moody's current expectations. Additionally given the poor performance of the commercial property markets and the likelihood that the demand for commercial property lending is likely to remain low in the medium term, Moody's believes that the current business model of the society will need to change. Currently around 80% of the loan book is commercial property based and only 20% is residential lending. Moody's expect the society to aim to increase the proportion of residential lending, however as the society's position in the Irish residential mortgage market has also weakened in recent years, as the concentration on commercial property increased, Moody's considers that this will be challenging. The society's strategic response to these challenges includes reducing the size of its balance sheet, and although this will reduce the funding requirement it will have a negative impact on the ability of the society to generate pre-provision earnings. Furthermore Moody's have previously noted the high concentration risk within the portfolio, and although Moody's expect the society to work down some of its largest exposures, the concentration risk within the portfolio remains high. As the economic environment deteriorates this could potentially lead to substantially higher provisioning requirements. The Baa3 long-term bank deposit and senior debt ratings of INBS incorporate three notches of uplift from the Ba3 BCA. This takes into account the support from the Irish government evidenced by the inclusion of Irish Nationwide in the guarantee scheme, and Moody's expectation that further support would be forthcoming if needed. Due to the downgrade of INBS's senior debt rating to Baa3, Moody's also downgrades INBS's Mortgage Backed Promissory Notes to Baa1. The ratings of the Mortgage Backed Promissory Notes benefit from a two notch uplift from the issuer's senior debt rating. The last rating action on INBS was on September 4, 2008 when the ratings were downgraded to Baa1/C- and placed on review for further possible downgrade. Irish Nationwide Building Society, headquartered in Dublin, Ireland, had total assets of EUR16.1 billion at year-end 2007. SWISSCO LTD: Former Workers Demand Better Redundancy Payments ------------------------------------------------------------- RTE Business reports that more than 150 former employees of Swissco Ltd staged a protest outside the company's Cork plant Monday, demanding better redundancy payments. The report recalls the workers were left with only statutory redundancy when the company closed in December. As reported in the TCR-Europe on Dec. 19, 2008, citing The Irish Times, the company's 154 staff were told they were to be made redundant after a liquidator was appointed to the company following a period of examinership. According to RTE Business, the company was put into liquidation after attempts to find new investment failed. A Swissco spokesman, as cited by the Irish Times, said the company had been unprofitable for some time. However, RTE Business notes staff were told the parent company was profitable. The machinery at the Cork plant is being auctioned later this week, RTE Business adds. * IRELAND: Could Default on National Debt ----------------------------------------- Ian Dey at The Sunday Times reports that fears are mounting that Ireland could default on its national debt. The cost of buying insurance against Irish government bonds hit record highs on Friday, having almost tripled in a week, making Ireland the most troubled economy in Europe according to debt- market investors, The Sunday Times relates. The Sunday Times discloses the cost of insuring Irish debt rose to 350 basis points, meaning for every GBP100 of debt it would cost GBP3.50 to insure against default. Ireland's national debt could reach EUR70 billion, The Sunday Times states. This year the country is set to borrow an additional EUR15 billion (GBP13.4 billion), The Sunday Times notes. Traders, as cited by Independent. ie, said Friday the the cost of insuring against a default on Irish government bonds surged to record levels on concern the high price of bank bailouts and economic stimulus packages will strain public finances. Citing BNP Paribas SA, Independent.ie says the debts held by Irish financial institutions are more than 11 times the size of the economy. Elena Moya of guardian.co.uk recounts that according to the European Commission, Ireland's budget deficit is expected to reach EUR18 billion, almost four times the European Union limit. Moody's Changes Outlook to Negative On January 30, Moody's Investors Service changed the outlook to negative from stable on Ireland's Aaa debt ratings. The change in outlook reflects Moody's view that the current economic crisis is likely to significantly affect Ireland's economic strength and government financial strength for the years to come -- both in absolute terms and relative to the country's rating peers. "That said, Ireland's Aaa ratings remain appropriate at this point, as the country entered the current financial crisis in a relatively favorable fiscal position and as it is too early to conclude that most of the factors that contributed to its economic vitality have been structurally eroded" said Dietmar Hornung, a Vice President-Senior Analyst in Moody's Sovereign Risk Group. Thanks to the budget surpluses of recent years, Ireland has indeed some room to maneuver, even under the current circumstances, the rating agency said. Moody's assessment of "very high" government financial strength reflects the country's still relatively low level of government debt. Weak Economic Activity Moody's observes that Ireland's pronounced weakness in economic activity is translating into a distinct reversal of public finance dynamics. Furthermore, Ireland's fiscal adjustment capacity seems constrained, as the government can only modestly raise taxes without risking further damage to its economic model. Moody's recognizes that Ireland's economic activity is contracting on the back of a severe correction in the housing market, as well as faltering consumption in connection with increased job uncertainty and a steep decline in investment. Export growth has also been trending downwards. "Moreover, the sizable indebtedness of households points to a particularly painful de-leveraging process," said Mr. Hornung. Furthermore, Moody's regards the government liabilities that could possibly arise from the troubled banking system as considerable. At the end of September 2008, the Irish government announced a two-year guarantee to stabilize its banking system -- an 'intervention' which represents an off-balance sheet liability for the government. In December 2008, the government announced a EUR5.5 billion recapitalization of three banks. In January this year, Anglo Irish Bank was nationalized. Possible Rating Cut Moody's notes that a downgrade would follow if Ireland, in the coming year, were to exhibit: (i) an economic downturn suggesting a structural erosion of what underpins the Irish "economic model"; (ii) a further significant deterioration of government financial strength, aggravated by liabilities arising from the troubled banking system; and/or (iii) a fiscal adjustment capacity that would fall short of being able to stabilize -- in the foreseeable future -- debt coverage ratios (debt/GDP, debt/general government revenue) and debt affordability indicators (interest payment/revenue) at levels compatible with a Aaa rating. Moody's last rating action with respect to the Government of Ireland occurred in May 1998 when the foreign currency government bond rating was raised to Aaa from Aa1. =================== K A Z A K H S T A N =================== CITY STROY: Creditors Must File Claims by March 20 -------------------------------------------------- The Specialized Inter-Regional Economic Court of Kyzylorda has declared LLP CITY STROY K insolvent. Creditors have until March 20, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of Kyzylorda Aiteke bi St. 29 120014 Kyzylorda Kyzylorda Kazakhstan EURO TRANSIT: Creditors Must File Claims by March 27 ---------------------------------------------------- LLP Euro Transit Plus has declared insolvency. Creditors have until March 27, 2009, to submit proofs of claim to: Abulhair Han ave. 69-37 Aktobe Aktube Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Aktube Satpayev St. 16 Aktobe Aktube Kazakhstan JAR ASIA: Creditors Must File Claims by March 27 ------------------------------------------------ The Specialized Inter-Regional Economic Court of Kyzylorda has declared LLP Jar Asia Ltd insolvent. Creditors have until March 27, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of Kyzylorda Aiteke bi St. 29 120014 Kyzylorda Kyzylorda Kazakhstan NEFTE SNUB: Creditors Must File Claims by March 27 -------------------------------------------------- LLP Nefte Snub Complect has declared insolvency. Creditors have until March 27, 2009, to submit proofs of claim to: Apt. 57 Auezov St. 108 Saryarka district Astana Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Astana Abai Ave. 36 Astana Kazakhstan ROMANICO INTERNATIONAL: Creditors Must File Claims by March 20 -------------------------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty has declared LLP Romanico International insolvent. Creditors have until March 20, 2009, to submit proofs of claim to: Apt. 43 Building 13 Micro District "Mamyr-1" Almaty Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Baizakov St. 273b Almaty Kazakhstan SEYMAR ALI: Creditors Must File Claims by March 27 -------------------------------------------------- LLP Seymar Ali Investment Inc has declared insolvency. Creditors have until March 27, 2009, to submit proofs of claim to: Lumumba St. 9 Almaty Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Baizakov St. 273b Almaty Kazakhstan STROY COM XXI: Creditors Must File Claims by March 27 ----------------------------------------------------- LLP Stroy Com XXI has declared insolvency. Creditors have until March 27, 2009, to submit proofs of claim to: Apt. 2 Mojaisky St. 5a Almaty district Astana Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Astana Abai Ave. 36 Astana Kazakhstan ZELEN STROY: Creditors Must File Claims by March 27 --------------------------------------------------- The Specialized Inter-Regional Economic Court of Aktube has declared LLP Zelen Stroy Snub insolvent. Creditors have until March 27, 2009, to submit proofs of claim to: Altynsarin St. 31 Aktobe Aktube Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Aktube Satpayev St. 16 Aktobe Aktube Kazakhstan * S&P Cuts Counterparty Credit Ratings on 5 Kazakh Banks to Low-B ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term counterparty credit ratings on five large banks and one mortgage company in the Republic of Kazakhstan (foreign currency BBB-/Negative/A-3, local currency BBB/Negative/A-3), namely Kazkommertsbank, Halyk Savings Bank of Kazakhstan, Alliance Bank JSC, and BTA Bank J.S.C., and BTA's subsidiaries Temirbank JSC and BTA Ipoteka Mortgage Co. The long-term counterparty credit ratings on Alliance, BTA, Temirbank, and BTAI remain on CreditWatch with developing implications, where they were placed on Feb. 3, 2009, on the announcement of the government proposed acquisition of majority stakes in these banks. "The rating actions reflect S&P's view of the continuing downward pressure on the entities' stand-alone credit profiles due, among other things, to significant asset quality deterioration, which is depleting their capitalization," said Standard & Poor's credit analyst Ekaterina Trofimova. "Also contributing to the rating actions are continuing funding and liquidity challenges and the instability of deposits." These entities are also affected by the current global liquidity crisis and a domestic economic slowdown, both of which continue to erode liquidity levels and asset quality. "We estimate loans under stress at 20% for the banking sector in Kazakhstan, and provisioning coverage is only slowly approaching this level," said Ms. Trofimova. The 17% devaluation of the Kazakh tenge on Feb. 4, 2009, will, in S&P's view, further contribute to the deterioration in these entities' asset quality, given their extensive foreign currency lending (over 50% of the system loans) to unhedged corporates and individuals whose respective revenues are in tenge. S&P believes that the second chief risk of the devaluation is that confidence in monetary stability and, by association, the banking system, could weaken further, triggering more downward pressure on the exchange rate. This could, in turn, result in a further loss of system deposits. In S&P's view, government support measures -- including the state taking over majority ownership of BTA and Alliance, the recapitalization of KKB and Halyk, and the placement of substantial state deposits at systemically important banks (KKB, Halyk, BTA, and Alliance) -- only partly reduce market pressure. "In S&P's view, there are few current indications of banking sector recovery and S&P believes that the resolution of the sector's problems will be a lengthy process, pressuring banks' creditworthiness," added Ms. Trofimova. The government's support plan appears to mainly focus on the four systemically important banks and risks putting additional pressure on smaller banks. These measures fit with S&P's classification of Kazakhstan as an "interventionist" country regarding its support of systemically important banks. As such, the long-term ratings on KKB, Halyk, and Alliance are one notch higher than their stand-alone credit profiles and two notches higher for BTA. For BTA, S&P now gives greater weight for potential government support in the long-term ratings, compared with other systemically important banks in the country, due to its majority government ownership. S&P notes that the government's majority takeover of Alliance has still not been completed and is likely to take some time. As S&P considers BTAI to be a strategically important subsidiary of BTA, S&P has given BTAI a one-notch uplift from its long-term stand-alone credit profile. As BTA is considering selling Temirbank, S&P do not consider Temirbank to be a strategically important subsidiary of BTA. Nevertheless, S&P is incorporating a one-notch uplift from Temirbank's stand-alone credit profile, reflecting S&P's expectation of a moderate likelihood of support by BTA. S&P believes that smaller institutions are likely to be challenged to maintain customer confidence and meet more conservative regulatory capital requirements in the coming months. "At the same time, S&P acknowledge the local regulators' more hands-on and proactive supervision, as well as Kazakh banks' efforts to increase their provisioning coverage and better recognize and resolve problem loans," said Ms. Trofimova. S&P expects to resolve the CreditWatch placements of Alliance, BTA, Temirbank, and BTAI on obtaining further clarification on the government's ownership implications for the entities' creditworthiness, strategies, and financial flexibility. Barring any further deterioration in their operating environments, S&P may raise the ratings on these four institutions if S&P considers that extraordinary state support is more likely, or if the government's enhancement measures sustainably strengthen the entities' stand-alone credit profiles. However, if asset quality and liquidity deterioration continue and exceed S&P's current expectations, and if they are not sufficiently offset by new capital and funding injections and operational enhancements, S&P will likely lower the ratings. The same factors might also drive lower ratings on KKB and Halyk, and explain the negative outlooks on their ratings. Ratings List Downgraded; CreditWatch/Outlook Action Kazkommertsbank To From -- ---- Counterparty Credit Rating BB-/Negative/B BB/Negative/B Certificate Of Deposit BB-/B BB/B Halyk Savings Bank of Kazakhstan To From -- ---- Counterparty Credit Rating BB/Negative/B BB+/Negative/B Certificate Of Deposit BB/B BB+/B Alliance Bank JSC To From -- ---- Counterparty Credit Rating B/Watch Dev/B B+/Watch Dev/B Certificate Of Deposit B/Watch Dev/B B+/Watch Dev/B BTA Bank J.S.C. To From -- ---- Counterparty Credit Rating B+/Watch Dev/B BB/Watch Dev/B Certificate Of Deposit B+/Watch Dev/B BB/Watch Dev/B BTA Ipoteka Mortgage Co. To From -- ---- Counterparty Credit Rating B+/Watch Dev/B BB-/Watch Dev/B Certificate Of Deposit B+/Watch Dev/B BB-/Watch Dev/B Kazakhstan National Scale Rating kzBBB/Watch Dev kzBBB+/Watch Dev Temirbank JSC To From -- ---- Counterparty Credit Rating B/Watch Dev/B B+/Watch Dev/B Certificate Of Deposit B/Watch Dev/B B+/Watch Dev/B Kazakhstan National Scale Rating kzBB+/Watch Dev kzBBB/Watch Dev NB: This list does not include all ratings affected. =================== K Y R G Y Z S T A N =================== SHOORAT LLC: Creditors Must File Claims by March 13 --------------------------------------------------- Joint Kyrgyz Chinese LLC Shoorat has declared insolvency. Creditors have until March 13, 2009, to submit written proofs of claims to: Joint Kyrgyz Chinese LLC Shoorat Mendeleyev St. 197a Bishkek Kyrgyzstan ===================== N E T H E R L A N D S ===================== PALLAS CDO: Fitch Junks Ratings on Two Classes of Notes ------------------------------------------------------- Fitch Ratings has downgraded seven classes of Pallas CDO II B.V.'s notes, removed the notes from Rating Watch Negative, and assigned a Stable Outlook to five of the notes as detailed below. -- EUR75 million class A-1-a (ISIN XS0268818209): downgraded to 'BBB' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR275 million class A-1-d (ISIN XS0271520669): downgraded to 'BBB' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR44.5 million class A-2 (ISIN XS0268904546): downgraded to 'BB' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR16 million class B (ISIN XS0268818548): downgraded to 'B' from 'AA'; removed from RWN; assigned a Stable Outlook -- EUR10.5 million class C (ISIN XS0268818894): downgraded to 'B-' (B minus) from 'A'; removed from RWN; assigned a Stable Outlook -- EUR2.5 million class D-1-a (ISIN XS0268819199): downgraded to 'CCC' from 'BBB-' (BBB minus); removed from RWN -- EUR12 million class D-1-b (ISIN XS0268819272): downgraded to 'CCC' from 'BBB-' (BBB minus); removed from RWN The downgrades reflect Fitch's view on the credit risk of the rated tranches following the release of the agency's revised Structured Finance CDO rating criteria on December 16, 2008, as well as credit deterioration to the collateral pool. Pallas CDO II BV is a securitization of mainly European structured finance assets with a total note issuance of EUR455 million. The application of the new SF CDO rating criteria incorporates Fitch's view on industry and vintage concentration risks and the propensity for low recoveries upon default, particularly for thin tranches. While the downgrade of the class A-1-a, A-1-d, A2, and B notes was driven by Fitch's revised criteria, the downgrade of the class C, D-1-a and D-1-b notes was additionally linked to the transaction's actual performance. While all overcollateralization tests are currently passing, the class C OC test is currently at 106.71% compared to a test minimum level of 103.08%. Given the current macroeconomic climate, Fitch expects further negative portfolio migration which could result in a higher percentage of 'CCC' assets. The resulting OC adjustments for 'CCC' assets may result in the class C OC test breaching, which would divert interest payments from the class D notes to amortize the senior notes. In Fitch's view, while not imminent, the breach of the class C OC test in a stressed environment would make the likelihood of full recovery of the class D notes more remote. In conducting its analysis, Fitch made a three-notch downward adjustment for any names on RWN under the default analysis of its Portfolio Credit Model. On an adjusted basis approximately 24.7% of the assets are treated as sub-investment grade. The weighted average portfolio quality is 'BBB-'(BBB minus)/'BB+' and 4.9% of the portfolio is on RWN by rating driver. Three assets are currently defaulted which represent 0.6% of the portfolio, and 1.45% are rated at 'CCC' or below. As per the trustee report dated January 6, 2009, the portfolio contains 201 assets from 163 obligors, with the largest obligor accounting for approximately 2.9% of the outstanding portfolio, and the three largest obligors accounting for 6.4% of the outstanding portfolio amount. The largest single asset class is RMBS with 50% of the portfolio volume. The two largest vintages are 2007 and 2006 making up 24.7% and 21.8% of the portfolio respectively, while the four largest country concentrations are the United Kingdom, the Netherlands, Spain and Italy making up 26.9%, 20.7% 12.2% and 11.7% of the portfolio respectively. The portfolio is actively managed by M&G Investment Management Limited (which is rated 'CAM2+' with respect to the Structured Finance CDO Asset Manager Rating on Fitch's CDO Asset Manager Rating scale). LYONDELBASELL: To Temprorarily Idle LDPE Units in UK and France --------------------------------------------------------------- LyondellBasell Industries on Wednesday, Feb. 11, 2009, said that it has taken steps to temporarily idle its low density polyethylene units at Carrington, United Kingdom, and Fos-sur-Mer, France, into the second quarter of 2009. The Carrington unit has a nameplate capacity of 185 KT per year, and the Fos plant has a nameplate capacity of 110 KT per year. "Although demand for polyethylene has significantly improved compared to the fourth quarter of last year, normal patterns have not been achieved yet. This measure is another step in our efforts to continue our business in a way that is economically reasonable. Our flexibility in polyethylene production in Europe is helping to optimize our physical assets while continuing to meet the needs of our customers," said Richard Roudeix, LyondellBasell's Vice President for Polyethylene in Europe. About LyondellBasell LyondellBasell Industries -- http://www.lyondellbasell.com/-- is a refiner of crude oil; a significant producer of gasoline blending components; a global manufacturer of chemicals and polymers, including polyolefins and advanced polyolefins; and the leading developer and licensor of technologies for the production of polymers. Following the acquisition of Lyondell in 2007, LyondellBasell became the world's largest independent producer of polypropylene and advanced polyolefins products, a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. The group is estimated to generate 2007 revenues of US$44 billion and EBITDA of US$4.1 billion reflecting strong performance of Lyondell and Basell businesses at the top of the cycle. LyondellBasell is saddled with debt as part of its US$12.7 billion merger in 2007. As reported by the Troubled Company Reporter, the company has brought on board Kevin M. McShea of AlixPartners, LLP as Chief Restructuring Officer of LyondellBasell and its subsidiaries. The company also has hired advisers, including Evercore and New York law firm Cadwalader, Wickersham & Taft LLP, to advise it on its restructuring efforts. Lyondell disclosed in its latest quarterly results that it has US$27.12 billion in assets and US$228 million stockholders' deficit as of Sept. 30, 2008. It incurred a US$232 million net loss in the three months ended Sept. 30, 2008, compared to a US$206 million net profit during the same period in 2007. Headquartered in Houston, Texas, Equistar Chemicals LP, is a wholly owned subsidiary of Lyondell Chemical Company, which produces ethylene, propylene and polyethylene in North America and ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder. For three months ended Sept. 30, 2008, Equistar Chemicals posted net loss of US$271 million compared to net income of US$22 million for the same period in the previous year. At Sept. 30, 2008, Equistar Chemicals' balance sheet showed total assets of US$9.0 billion and total liabilities of US$19.0 billion, resulting in a partners' deficit of US$9.9 billion. * * * On Jan. 12, 2009, the TCR-Europe reported that Fitch Ratings downgraded Netherlands-based petrochemicals company LyondellBasell Industries AF SCA's U.S.-based subsidiaries - Lyondell Chemical Company, Equistar Chemicals L.P. and Millenium Americas Inc - to Long-term Issuer Default 'D' from 'C' and removed them from Rating Watch Negative. The agency also assigned a Long-term IDR 'D' to Lyondell Basell Finance Co. The rating action follows the recent announcement that the U.S. Companies have filed for bankruptcy. At the same time, LBI's Long- and Short-term IDRs of C' remain on RWN. As reported in the TCR-Europe on Jan. 9, 2009, Moody's Investors Service downgraded the corporate family rating of LyondellBasell Industries AF SCA to Ca from Caa2 and also downgraded ratings on the debt instruments raised by the group. The outlook on the ratings is stable. The rating action follows the announcement made by the company on January 6, 2009 that its US subsidiaries and one of its non Dutch holding companies in Europe have filed to reorganize its operations and balance sheet under Chapter 11 of the US Bankruptcy Code citing a profound deterioration in the trading conditions in December 2008. As reported in the TCR-Europe, on Jan. 7, 2009, Standard & Poor's lowered its long-term corporate credit rating on the three main U.S. subsidiaries of European holding company LyondellBasell Industries AF S.C.A. (LyondellBasell) – namely Lyondell Chemical Co., Equistar Chemicals L.P., and Millennium Chemicals Inc. -- to 'D' from 'CC'. This action followed the voluntary filings for Chapter 11 bankruptcy protection by these entities, along with other U.S. subsidiaries of LyondellBasell and a related German holding company on Jan. 6, 2009. The long-term rating on LyondellBasell, meanwhile, remains at 'SD', indicating a selective default. LYONDELLBASELL INDUSTRIES: Payment Default Cues S&P's 'D' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on The Netherlands-based petrochemicals producer LyondellBasell Industries AF S.C.A. to 'D' from 'SD'. S&P also lowered the subordinated debt ratings on the US$615 million and EUR500 million European bonds due 2015 issued by the company to 'D' from 'C'. "The rating action follows LyondellBasell's payment default on coupons of the two bonds on Feb. 15, 2009," said Standard & Poor's credit analyst Tobias Mock. "Although there is a grace period of 30 days, S&P do not consider it likely that the company will pay the coupons within this period." The issue rating on Basell Finance Co. B.V.'s US$300 million notes due 2027 remains at 'C' because no payment default has occurred on them. The next coupon payment is scheduled for March 15, 2009, and S&P considers it unlikely that Basell Finance will make this payment. As of Feb. 16, LyondellBasell has not filed for bankruptcy. =========== R U S S I A =========== ANGARA-LES LLC: Creditors Must File Claims by March 6 ----------------------------------------------------- Creditors of LLC Angara-Les (TIN 3911009003, RVC 391101001, PSRN 1023902006644) (Forestry) have until March 6, 2009, to submit proofs of claims to: A. Popov Temporary Insolvency Manager Office 5 Gogolya St. 12 236008 Kaliningrad Russia The Arbitration Court of Kaliningradskaya will convene on April 6, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A21 – 9790/2008. The Debtor can be reached at: LLC Angara-Les Iskry St. 38 Sovetsk 238750 Kaliningradskaya Russia DRAIV ALYUMINEVYE: Creditors Must File Claims by March 6 -------------------------------------------------------- Creditors of LLC Draiv-Alyuminevye Konstruktsii (TIN 3808074584) (Door and Window Assembly Production) have until March 6, 2009, to submit proofs of claims to: O. Lukina Temporary Insolvency Manager Post User Box 165 664047 Irkutsk Russia The Arbitration Court of Irkutskaya will convene on June 3, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A19–19553/08–60. The Debtor can be reached at: LLC Draiv-Alyuminevye Konstruktsii Zimnyaya St. 1 664000 Irkutsk Russia FEDERAL BANK: S&P Assigns 'B-' Long-Term Counterparty Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B-' long- term and 'C' short-term counterparty credit ratings to Moscow- based Federal Bank for Innovation and Development. The outlook is negative. At the same time, the bank was assigned an 'ruBBB-' Russia national scale rating. "The ratings on FBID are constrained by increased system risks, highlighted by the domestic market turmoil and deteriorating economic environment," said Standard & Poor's credit analyst Victor Nikolskiy. Further constraints are the bank's increasing credit risks, accentuated by high industry and single-party concentrations; its very small size; limited franchise; and undiversified funding base, which is dominated by demand deposits. These factors are mitigated by FBID's adequate liquidity and capitalization, limited market risk, and stable client base, which has remained loyal to the bank during the financial market turbulence. The ratings reflect the bank's stand-alone credit profile and do not include any uplift for extraordinary external support. FBID is a small bank that ranks among the top 300 by assets in Russia, with total assets of Russian ruble (RUR)5.8 billion (US$198 million) on Dec. 31, 2008. Its core clientele includes small and midsize companies involved in the trade, leasing, and manufacturing sectors. The bank is managed by a stable team of managers with many years of service. At year-end 2008, the bank's liquidity was strong, with cash and bank placements representing about 42% of total assets. This was mainly thanks to large deposit inflows from key customers. S&P expects some of this liquidity to diminish as business customers withdraw funds to pay suppliers. This cyclicality has been observed in previous years, so S&P expects liquidity to be weaker over the next few months. The bank's funding base is undiversified and cyclical, largely comprising customer deposits, which represented 95% of liabilities on Dec. 31, 2008, with corporate current accounts making up about 80%. Because more than 83% of customers' funds are held in demand deposit accounts, the bank is exposed to significant maturity mismatches. However, customer accounts showed no negative dynamics in the second half of 2008 and proved resilient to the panic-induced outflows observed at other institutions. "The negative outlook reflects our opinion that the deteriorating operating environment in Russia will hamper FBID's financial profile and performance," said Mr. Nikolskiy. Although the ratings already incorporate the high cyclicality of the bank's funding base, a dramatic deterioration of FBID's funding profile could lead to a downgrade. In addition, a material weakening of asset quality and profitability would put downward pressure on the ratings. A positive rating action is unlikely in the near term, but could occur if S&P sees a significant improvement in the bank's operating environment and a clear demonstration of the resilience of its financial profile. GRAND-D LLC: Creditors Must File Claims by April 6 -------------------------------------------------- Creditors of LLC Grand-D (TIN 4101089669) (Precious Stones and Metals Crop) have until April 6, 2009, to submit proofs of claims to: A. Dutov Insolvency Manager Post User Box 95 Proletarskaya St. 10 685000 Magadan Russia The Arbitration Court of Kamchatskiy will convene at 10:00 a.m. on May 8, 2009, to hear bankruptcy proceedings. The case is docketed under Case No. A24–4299/2008. The Debtor can be reached at: LLC Grand-D Beringa St. 104a Petropavlovsk-Kamchatskiy 683016 Kamchatskiy Russia INTERWOOD LLC: Creditors Must File Claims by March 6 ---------------------------------------------------- Creditors of LLC Interwood (TIN 2506008978, PSRN 1062506000831) (Cargo Transportation and Storage) have until March 6, 2009, to submit proofs of claims to: O. Yakimov Insolvency Manager Post User Box 106/14 Sheronova St. 7 680020 Khabarovsk Russia The Arbitration Court of Primorskiy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A51–2794/08–15/23B. The Debtor can be reached at: LLC Interwood Zheleznodorozhnaya St. 30 692133 Dalnerechensk Primorskiy Russia IZO-STROY LLC: Creditors Must File Claims by March 6 ---------------------------------------------------- Creditors of LLC Izo-Stroy (TIN 5405344584, PSRN 1075405013067) (Construction) have until March 6, 2009, to submit proofs of claims to: O. Kurmashev Temporary Insolvency Manager Post User Box 2486 Prokopyevsk 653052 Kemerovskaya Russia The Arbitration Court of Kemerovskaya will convene on April 30, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A27–14431/2008–4. The Debtor can be reached at: LLC Izo-Story Pirogova St. 5 Novokuznetsk 654000 Kemerovskaya Russia LIPETSK MACHINE-REPAIR: Creditors Must File Claims by March 6 ------------------------------------------------------------- Creditors of CJSC Lipetsk Machine-Repair Enterprise (TIN 4826039898, RVC 482401001, PSRN 1034800557087) have until March 6, 2009, to submit proofs of claims to: A. Toropchin Temporary Insolvency Manager Apt. 150 Lipovskaya St. 8 398002 Lipetsk Russia Tel: (0742) 33–41-26 The Arbitration Court of Lipetskaya will convene at 2:20 p.m. on May 21, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A36–4044/2008. The Court is located at: The Arbitration Court of Lipetskaya Office 521 Skorokhodova St. 2 398019 Lipetsk Russia The Debtor can be reached at: CJSC Lipetsk Machine-Repair Enterprise Udarnikov St. 95 398902 Lipetsk Russia PRESS-FORGING PLANT CJSC: Creditors Must File Claims by March 6 --------------------------------------------------------------- Creditors of CJSC Press-Forging Plant (TIN 6140020336) have until March 6, 2009, to submit proofs of claims to: Ye. Savchenko Temporary Insolvency Manager Degtyareva St. 31 400006 Volgograd Russia The Arbitration Court of Rostovskaya commenced bankruptcy supervision procedure. The case is docketed under Case No. A53– 11292/2008-S1–21. The Debtor can be reached at: CJSC Press-Forging Plant Zavodskaya St. 1 Azov Rostovskaya Russia SVECHINSKIY LUMBER: Creditors Must File Claims by March 6 --------------------------------------------------------- Creditors of ME Svechinskiy Lumber Factory (TIN 4328001490) have until March 6, 2009, to submit proofs of claims to: G. Devyatykh Insolvency Manager Volodarskogo St. 75 610020 Kirov Russia The Arbitration Court of Kirovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A28–13133/2008–334/10. The Debtor can be reached at: ME Svechinskiy Lumber Factory Totmyanina St. 19 Svecha Svechinskiy Kirovskaya Russia TULUCHI-LES LLC: Creditors Must File Claims by March 6 ------------------------------------------------------ Creditors of LLC Tuluchi-Les (TIN 2709008518) (Timber Construction Structures Production) have until March 6, 2009, to submit proofs of claims to: V. Veselkov Temporary Insolvency Manager Post User Box 6/12 680000 Khabarovsk Russia The Arbitration Court of Khabarovskiy commenced bankruptcy supervision procedure. The case is docketed under Case No. A73– 13858/2008. The Debtor can be reached at: LLC Tuluchi-Les Apt. 2 Ruchnaya St. 4 Tuluchi Vaninskiy Khabarovskiy Russia URALSIB-YUG BANK: S&P Assigns 'B' Counterparty Credit Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' long- term and 'B' short-term counterparty credit ratings to Russia- based URALSIB-YUG Bank OJSC. The outlook is developing. At the same time, the bank was assigned an 'ruA-' Russia national scale rating. "The ratings reflect the increased system risks in the Russian Federation (foreign currency BBB/Negative/A-3; local currency BBB+/Negative/A-2) as a result of the market turmoil and deteriorating economic environment; the bank's fragile funding base, which is vulnerable to panic-induced deposit outflows; increasing credit risks stemming from the deteriorating economic environment; and ongoing systemwide liquidity tension," said Standard & Poor's credit analyst Maria Malyukova. Positive rating factors include the bank's strong links to, and support from, Bank URALSIB (BB-/Negative/B), which includes integration of major business and risk-management systems and policies as well as funding support. In addition, URALSIB-YUG Bank benefits from its good market position and brand recognition in Krasnodar Krai (BB/Stable/--; Russia national scale 'ruAA'), good core profitability, and adequate capitalization. The ratings on URALSIB-YUG Bank incorporate a one-notch uplift above the bank's stand-alone credit profile to reflect ongoing and expected support from the URALSIB group. URALSIB-YUG Bank is 88.38% owned by URALSIB Financial Corp. (FC URALSIB; not rated), accounting for 10% of FC URALSIB's total assets and representing a significant part of its banking business in Krasnodar Krai, in Russia's Southern Federal District. URALSIB-YUG Bank has strong links to Bank URALSIB. URALSIB-YUG Bank is a regional bank that ranks among Russia's top 100 banks. It had total assets of RUR26.5 billion (about US$960 million) on Nov. 30, 2008. The bank focuses primarily on retail customers and small and midsize businesses and has a good market position within Krasnodar Krai. Despite the market turmoil, the bank has maintained good profitability, benefiting from a high share of commission income and a high interest margin, thanks to low funding costs because of a large proportion of demand deposit accounts. "The developing outlook captures a combination of factors that currently influence URALSIB-YUG Bank," said Ms. Malyukova. "On the negative side, the ongoing financial market turbulence and deteriorating business environment will likely weigh on the business and financial profiles of URALSIB-YUG Bank and Bank URALSIB. On the positive side, URALSIB-YUG Bank's business and operational links to Bank URALSIB are strong in anticipation of the possible merger, which could boost URALSIB-YUG Bank's creditworthiness and business standing." VORONEZHSKIY ALUMINUM: Creditors Must File Claims by March 6 ------------------------------------------------------------ Creditors of CJSC Voronezhskiy Aluminum Plant (TIN 3661041160, PSRN 1073668000702) have until March 6, 2009, to submit proofs of claims to: S. Strelnikov Temporary Insolvency Manager Office 606 Svobody St. 75 394006 Voronezh Russia The Arbitration Court of Voronezhskaya will convene at 10:30 a.m. on May 13, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A14– 6325/2008/55/16B. The Court is located at: The Arbitration Court of Voronezhskaya Office 609 Srednemoskovskaya St. 77 Voronezh Russia The Debtor can be reached at: CJSC Voronezhskiy Aluminum Plant Zemlyachki St. 1 Voronezh Russia ========= S P A I N ========= CABLEUROPA SAU: S&P Junks Corporate Credit Rating to 'CCC+' ----------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Spanish cable operator Cableuropa S.A.U., to 'CCC+' from 'B'. The outlook is negative. At the same time, S&P lowered the ratings on the senior unsecured debt issued by financing vehicles ONO Finance PLC and ONO Finance II PLC and guaranteed by Cableuropa to 'CCC-' from 'CCC+'. The recovery rating on this debt is unchanged at '6', indicating S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. All ratings were removed from CreditWatch with negative implications, where they were placed on Nov. 28, 2008, following Cableuropa's publication of its third-quarter 2008 results and a review of its financial and business prospects. At Sept. 30, 2008, Cableuropa had EUR4.2 billion of gross debt on balance sheet, including a fully drawn EUR3.5 billion senior secured credit facility and EUR450 million of senior unsecured notes. Cash in hand amounted to EUR318 million. "The rating actions reflect our opinion that, absent a refinancing or some other step, which may be challenging to complete in the context of the current capital market conditions, it may be difficult for Cableuropa to tackle its upcoming heavy debt maturities," said Standard & Poor's credit analyst Guillaume Trentin. Specifically, Cableuropa reports that it faces senior debt amortizations of EUR36 million in 2009, EUR414 million in 2010, and EUR590 million in 2011, and also relies on the ongoing roll over of around EUR150 million in 365-day bilateral lines with local banks. Cableuropa reports that its free operating cash flow continued to be negative in recent months, totaling a negative EUR171 million in the nine months to Sept. 30, 2008, owing to the company's heavy investments and Spain's slowing economy. "Cash burn is slowing and FOCF could turn positive in full-year 2009 because Cableuropa reports that it has decided to implement substantial cuts in capital expenditure and a large reduction in headcount" said Mr. Trentin. "Still, in any case, S&P believes Cableuropa's cash generation will likely be significantly lower than its debt service requirements." Consequently, S&P expects Cableuropa to use part of its available cash of EUR318 million at Sept. 30, 2008, to finance the EUR71 million deferred Auna acquisition payment in first-quarter 2009 and its first senior debt amortization scheduled in fourth- quarter 2009, somewhat reducing its cash reserves. The rating on Cableuropa is constrained by its need to refinance its capital structure over the next year, continued negative FOCF, and high debt leverage. S&P views an additional constraint as being the heightened competition in the Spanish telecommunications and TV markets in the country's worsening economic environment. The rating is supported by Cableuropa's position as Spain's No. 2 facility-based provider of triple-play services and its improvement of profitability to levels prior to the Auna acquisition. The negative outlook reflects S&P's view of Cableuropa's ability to refinance its demanding debt maturity profile over the next year amid poor capital market conditions. Also factored into S&P's outlook are S&P's views about the company's deteriorating trading prospects and diminished capital investments which could lead to a tightening of covenant headroom below acceptable levels (below 10%). S&P could possibly downgrade Cableuropa if its liquidity position is stretched further as a result of the inability to secure financing and/or if its cash position falls to a level insufficient to meet even the next debt repayment. Conversely, Cableuropa's successful refinancing of its capital structure, combined with a marked improvement in its free cash flow generation could likely trigger a positive rating action. S&P has no indication that Cableuropa's management intends to consider a discounted exchange offer for its senior debt or its unsecured bonds, which are currently trading at very low levels. If Cableuropa were to explore this option, S&P would consider any exchange offer as distressed given the company's weak liquidity and the challenging trading environment. The execution of distressed exchange offers is tantamount to default under S&P's general criteria. S&P also notes that a number of low-rated companies have recently executed discounted exchange offers. =========== S W E D E N =========== KAUPTHING BANK: Alandsbanken to Buy Swedish Unit for SEK414 Mln --------------------------------------------------------------- Alandsbanken Abp will acquire Kaupthing Bank Sverige AB, Kaupthing Bank hf's Swedish unit, for SEK414 million (US$49.5 million) in cash. In a Feb. 16 statement Alandsbanken said the acquisition includes Kaupthing Bank Sverige's Private Banking, Asset Management and Capital Markets operations. However, the main part of the corporate loan book and certain other assets, including the indirect Lehman Brothers exposure, will be transferred to the Icelandic parent company, Kaupthing Hf in connection with the closing of the transaction. Ongoing litigations will not have any financial impact on Alandsbanken. The rescue loan provided by the Swedish Central Bank will be repaid in full. As a result, Kaupthing Bank Sverige's balance sheet is estimated to decrease from SEK9 billion at December 31, 2008 to SEK5 billion. Equity is estimated to be SEK840 million following the completion of the acquisition. Alandsbanken said the acquisition is expected to have a positive contribution to its result for 2009, including restructuring costs. Effects on liquidity and tier 1 ratios are expected to be minor. The acquisition is subject to regulatory approval and customary closing terms and conditions (including final year-end closing and other balance sheet relating measures, and the transfer of liabilities). The goal is to finalize the acquisition winthin a couple of weeks. Peter Wikloef, Managing Director, commented: "For a long time, our ambition has been to disembark on the Swedish market. Through this acquisition we reach 20,000 customers straight away, and increase our business volume by 20 percent. We have thoroughly analyzed Kaupthing Bank Sweden and found a high-quality operation with skilled employees and great customer relations which makes an attractive base for our launch in the Swedish market." About Kaupthing Bank Headquartered in Reykjavik, Iceland, Kaupthing Bank hf. -- http://www.kaupthing.com-- is engaged in the provision of financial services, such as private banking, asset management, pension services, brokerage services, investment banking, as well as corporate and retail banking. The Bank's offer is targeted at companies, institutional investors and individuals. The Bank is operational in thirteen countries, including Luxembourg, Switzerland, the Nordic countries, the United Kingdom and the United States. The main subsidiaries include Kaupthing Singer & Friedlander and FIH Erhvervsbank. * * * As reported in the Troubled Company Reporter on Nov. 30, 2008, Olafur Gardasson, assistant for Kaupthing Bank hf., in a proceeding under Act No. 21/1991, pending before the Reykjavik District Court, and foreign representative of the Debtor, filed a petition under chapter 15 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York commencing the Debtor's chapter 15 case ancillary to the Icelandic Proceeding and seeking recognition for the Icelandic Proceeding as a "foreign main proceeding" under the Bankruptcy Code and relief in aid of the Icelandic Proceeding. Citing a court filing by Olafur Gardarsson, Reuters disclosed Kaupthing has about US$14.8 billion of principal assets, including US$222 million located in the United States, and US$26 billion of principal indebtedness. ===================== S W I T Z E R L A N D ===================== 3 C HOLDING: Creditors Must File Proofs of Claim by February 21 --------------------------------------------------------------- Creditors owed money by JSC 3 C Holding International are requested to file their proofs of claim by Feb. 21, 2009, to: Anita Harder Liquidator JSC JPC Holding Ramistrasse 8 8024 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 10, 2008. BAAS & ROOST: Deadline to File Proofs of Claim Set February 21 -------------------------------------------------------------- Creditors owed money by LLC Baas & Roost are requested to file their proofs of claim by Feb. 21, 2009, to: The Company Haussmann & Partner Liquidator Seefeldstrasse 45 8008 Zurich Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 5, 2008. CHAMALEON BAU: Creditors Have Until February 21 to File Claims -------------------------------------------------------------- Creditors owed money by LLC Chamaleon Bau are requested to file their proofs of claim by Feb. 21, 2009, to: Stefan Fischer Liquidator Mattenweg 7 3273 Kappelen Switzerland The company is currently undergoing liquidation in Toffen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 16, 2008. DPS INVEST: Proof of Claim Filing Deadline Set February 22 ---------------------------------------------------------- Creditors owed money by JSC DPS Invest are requested to file their proofs of claim by Feb. 22, 2009, to: The Notary's Office Schwarz + Neuenschwander Christian Neuenschwander Neuengasse 25 3011 Bern Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 18, 2008. MYJOB BUCHS: Creditors' Proofs of Claim Due by February 21 ---------------------------------------------------------- Creditors owed money by LLC MyJob Buchs are requested to file their proofs of claim by Feb. 21, 2009, to: Martin Modde Bahnhofstrasse 17 9470 Buchs SG Switzerland The company is currently undergoing liquidation in Buchs SG. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 9, 2008. SHOWAG WATCH: February 21 Set as Deadline to File Claims -------------------------------------------------------- Creditors owed money by LLC Showag Watch Solutions are requested to file their proofs of claim by Feb. 21, 2009, to: Mario Romano Bruhlstrasse 15 5304 Endingen Switzerland The company is currently undergoing liquidation in Endingen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 9, 2008. ============= U K R A I N E ============= ALIV LLC: Creditors Must File Claims by February 29 --------------------------------------------------- Creditors of LLC Production and Commerce Firm Aliv (EDRPOU 20924752) have until Feb. 29, 2009, to submit proofs of claim to: Arbitral Manager O. Decheva Insolvency Manager Post Office Box 16A 69009 Odessa Ukraine The Economic Court of Odessa region commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 32/107-08-4074. The Court is located at: The Economic Court of Odessa region Shevchenko avenue 29 65009 Odessa Ukraine The Debtor can be reached at: LLC Production and Commerce Firm Aliv Tiraspol highway 16 65052 Odessa Ukraine CONCORD CJSC: Court Starts Bankruptcy Supervision Procedure ---------------------------------------------------------- The Economic Court of Poltava region commenced bankruptcy supervision procedure on CJSC Concord (EDRPOU 31622782). The Temporary Insolvency Manager is: Arbitral Manager S. Bonchak Office 6 50 Years of USSR St. 29 Kremenchuk 39600 Poltava region Ukraine The Court is located at: The Economic Court of Poltava region Zigin St. 1 36000 Poltava Ukraine The Debtor can be reached at: CJSC Concord Yarmakov St. 9 Kremenchuk 39600 Poltava region Ukraine EVRIS LLC: Creditors Must File Claims by February 29 ---------------------------------------------------- Creditors of LLC Evris (EDRPOU 20122308) have until Feb. 29, 2009, to submit proofs of claim to Insolvency Manager O. Zhylich. The Economic Court of Volin region commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 1/114-b. The Court is located at: The Economic Court of Volin region Volia avenue 54 Lutsk Volin region Ukraine HYPPO-POLESYE LLC: Creditors Must File Claims by February 28 ------------------------------------------------------------ Creditors of LLC HYPPO-POLESYE (EDRPOU 34308626) have until Feb. 28, 2009, to submit proofs of claim to Insolvency Manager I. Radik The Economic Court of Kharkov region commenced bankruptcy proceedings against the company after finding it insolvent. The Court is located at: The Economic Court of Kharkov region 8th Entrance Derzhprom Svoboda Square, 5 61022, Kharkov Ukraine The Debtor can be reached at: LLC Hyppo-Polesye Office 75 Traktorostroiteley avenue 140-B Kharkov Ukraine INTELLECT LLC: Court Starts Bankruptcy Supervision Procedure ---------------------------------------------------------- The Economic Court of Kiev commenced bankruptcy supervision procedure on LLC Innovative and Introduction Center Intellect (EDRPOU 34188252). The Temporary Insolvency Manager is: Arbitral Manager O. Chabak Kuybishev St. 20A Borzna 16400 Chernigov region Ukraine The Court is located at: The Economic Court of Kiev B. Hmelnitskiy street 44-b 01030, Kiev Ukraine The Debtor can be reached at: LLC Innovative and Introduction Center Intellect Office 414 Gnat Yura St. 9 03148 Kiev Ukraine INTERNATIONAL TRADING: Creditors Must File Claims by February 28 ---------------------------------------------------------------- Creditors of LLC International Trading Service (EDRPOU 25489835) have until Feb. 28, 2009, to submit proofs of claim to: Arbitral Manager O. Shestopalov Insolvency Manager Post Office Box 1064 69104 Zaporozhye Ukraine The Economic Court of Zaporozhye region commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 19/353/08. The Court is located at: The Economic Court of Zaporozhye region Shaumian street 4 69001 Zaporozhye Ukraine The Debtor can be reached at: LLC International Trading Service Yuzhnoukrainskaya St. 3/3 69600 Zaporozhye Ukraine STEPLIS STEEL: Creditors Must File Claims by February 29 -------------------------------------------------------- Creditors of LLC Steplis Steel (EDRPOU 34663944) have until Feb. 29, 2009, to submit proofs of claim to: A. Deliukin Insolvency Manager Gorky St. 95 03150 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 43/274. The Court is located at: The Economic Court of Kiev B. Hmelnitskiy street 44-b 01030, Kiev Ukraine The Debtor can be reached at: LLC Steplis Steel Gorky St. 95 03150 Kiev Ukraine TRADEIMPE KS: Court Starts Bankruptcy Supervision Procedure ----------------------------------------------------------- The Economic Court of Poltava region commenced bankruptcy supervision procedure on LLC Tradeimpeks Ltd. (EDRPOU 31175282). The Temporary Insolvency Manager is: Arbitral Manager E. Vasin Office 11 Vavilov Avenue 5 36004 Poltava Ukraine The Court is located at: The Economic Court of Poltava region Zigin St. 1 36000 Poltava Ukraine The Debtor can be reached at: LLC Tradeimpeks Ltd. Polovko St. 62 Poltava Ukraine * Fitch Cuts Currency Ratings on Three Ukrainian Cities to 'B' -------------------------------------------------------------- Fitch Ratings has downgraded the Long-term foreign and local currency ratings of Ukraine's City of Kyiv, the City of Odessa and the City of Kharkov. The Outlooks for the Long-term foreign and local currency ratings are Negative. The rating actions follow the downgrade of Ukraine's Long-term foreign and local currency Issuer Default Ratings to 'B' from 'B+' due to the increased risk of a banking and currency crisis in Ukraine caused by intensified stress on the financial system. The Outlooks on the sovereign ratings are Negative. Cities whose ratings are affected: The City of Kyiv: -- Long-term foreign and local currency ratings downgraded to 'B' from 'B+'. Outlooks Negative. -- Short-term foreign currency rating affirmed at 'B'. -- National Long-term rating downgraded to 'AA(ukr)' from 'AA+(ukr)'. Outlook Stable. The action affects the city's three outstanding eurobonds totalling USD700m. The City of Odessa: -- Long-term foreign and local currency ratings downgraded to 'B' from 'B+'. Outlooks Negative. -- Short-term foreign currency rating affirmed at 'B'. -- National Long-term rating affirmed at 'AA-(AA minus)(ukr)'. Outlook Stable. The City of Kharkov: -- Long-term foreign and local currency ratings downgraded to 'B' from 'B+'. Outlooks Negative. -- Short-term foreign currency rating is affirmed at 'B'. -- National Long-term rating affirmed at 'AA-(AA minus)(ukr)'. Outlook Stable. * UKRAINE: Liquidity Stress Could Spur Default, Paul Biszko Says ---------------------------------------------------------------- Vidya Ram at Forbes reports that Paul Biszko, senior emerging market strategist at RBC Capital in Toronto, warned "debts particularly on the private sector side and extreme liquidity stress could push Ukraine into default." The report relates that according to Mr. Biszko there is "little chance of bilateral cash" coming through. The report recalls the International Monentary Fund said on Feb. 7 it was delaying second US$1.9 billion tranche of a US$16.4 billion loan to Ukraine, prompting Ukraine's finance minister Viktor Pynzenyk to resign Thursday last week. Ukraine's prime minister Yulia Timoshenko has been urging the Group of Seven nations to step in with support with a US$5 billion loan, the report says. Citing Tom Fallon, head of emerging markets at fund manager La Francaise des Placements, the report states Ukraine may be able to struggle through the current year, because its external debt that must be repaid this year represent less than a project 10.0% of fiscal revenues. Ukraine, the report recounts, had pledged to slash its budget deficit by US$4.9%, to US$10 billion, or 1.1% of gross domestic product. The report however notes that with elections coming up next year, and an economy suffering as a result of a plummeting currency and falling commodity prices, it is very unlikely to do so in the future. Fitch Downgrades Issuer Default Ratings As reported in the TCR-Europe on Feb. 16, 2009, Fitch Ratings downgraded Ukraine's Long-term foreign and local currency Issuer Default Ratings to 'B' from 'B+'. This reflects increased risk of a banking and currency crisis in Ukraine, due to intensified stress on the financial system and greater risks to successful implementation of Ukraine's IMF-supported program. The Outlooks on both IDRs are Negative. The rating agency also downgraded the Country Ceiling to 'B' from 'B+'. The Short-term foreign currency IDR is affirmed at 'B'. "The political consensus needed for Ukraine to adhere to its IMF- backed program is fragile, while the global and regional macroeconomic environment has deteriorated further since the previous downgrade in October 2008," said Andrew Colquhoun, Director in Fitch's Sovereigns Group. Stress on Ukraine's heavily-dollarized financial system has intensified. Local-currency deposits in the banking system fell 7.4% month-on-month in January 2009, while FX deposits fell 2.2%. The central bank has taken six banks into administration. Fitch downgraded the Individual ratings of six banks since October 2008. The NBU has announced that larger banks so far audited need an additional UAH22 billion in capital, around 2% of projected 2009 GDP. More will be needed as smaller banks are audited, while a further deterioration in the economy or a sharp fall in the UAH could increase the requirement, and potentially the call on the sovereign to provide the resources. The UAH remains under downwards pressure. The NBU has come under political pressure to stem the currency's depreciation, even at the cost of draining reserves, which fell to US$28.8 billion by end-January 2009, 24% down from an end-August 2008 peak of US$38.1 billion. A full banking and currency crisis would damage the real economy and the sovereign's financing options, directly impairing sovereign creditworthiness. The sovereign faces a US$0.5 billion eurobond maturity in August 2009, and a possible additional CHF768 million in September 2009 if holders choose to exercise put options. The sovereign's ability to service this debt remains supported by reserves of US$28.8 billion, although Fitch is concerned that willingness to pay may be eroded by a full financial crisis. The IMF has warned that risks remain high to successful implementation of Ukraine's program, matching US$16.4 billion of IMF finance to tough policy conditions including a freer exchange- rate float and a fiscal tightening towards balance. The degree of exchange rate management by the NBU, arguably, has gone against the spirit of the program, while the 2009 budget targets a deficit of 3% of GDP. On balance, Fitch still expects the next US$1.9 billion tranche to be disbursed, possibly with a delay. However, Fitch is concerned that the program is at risk from the difficulty of securing the necessary policy consensus in a challenging political environment. Even if the program remains on track, the further deterioration in global economic prospects since October 2008 adds to the difficulties facing Ukraine. Fitch expects the economy to contract 4.5% in 2009, making fiscal tightening more difficult to implement. =========================== U N I T E D K I N G D O M =========================== AROSA FUNDING: Moody's Withdraws Ratings on Two B3-Rated Notes -------------------------------------------------------------- Moody's withdrew the ratings of two classes of notes issued by Arosa Funding Limited. The notes were redeemed in full on 10 July, 2008. The rating actions are: Arosa Funding Limited Series 2004-6: (1) EUR3,000,000 Class A Secured Credit-Linked Fixed Rate Notes due 2013 -- Current Rating: WR -- Prior Rating: B3, under review for possible downgrade (2) EUR25,000,000 Class B Secured Credit-Linked Floating Rate Notes due 2013 -- Current Rating: WR -- Prior Rating: B3, under review for possible downgrade ASSCHER FINANCE: Moody's Withdraws 'C' Ratings on Various Notes --------------------------------------------------------------- Moody's Investors Service announced that, following the repayment in full of the last outstanding senior debt and exchange of mezzanine debt for unrated securities, as of January 14, 2009, it has withdrawn the ratings assigned to the senior debt programs and Mezzanine Capital Note program of Asscher Finance Limited and Asscher Finance Corporation, Asscher does not intend to issue any further debt from its senior debt programs. The rating action is: Asscher Finance Limited and Asscher Finance Corporation (1) Euro Commercial Paper program -- Current Rating: WR -- Prior Rating: Prime-1 (2) Euro Medium Term Note program -- Current Rating: WR -- Prior Rating: Aaa/Prime-1 (3) Euro Mezzanine Capital Note program -- Current Rating: WR -- Prior Rating: C (4) U.S. Commercial Paper program -- Current Rating: WR -- Prior Rating: Prime-1 (5) U.S. Medium Term Note program -- Current Rating: WR -- Prior Rating: Aaa/Prime-1 (6) U.S. Mezzanine Capital Note program -- Current Rating: WR -- Prior Rating: C CHROME FUNDING: S&P Downgrades Rating on Series 11 Notes to 'D' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered and kept on CreditWatch negative its ratings on series 9 and 10 issued by Chrome Funding Ltd. At the same time, S&P lowered to 'D' and removed from CreditWatch negative S&P's rating on the series 11 notes. The downgrades follow deterioration in the credit quality of the underlying reference portfolio in the form of downgrades and CreditWatch placements of reference entities. Credit event notices have also been issued for more than one entity. Credit events typically result in portfolio losses, which reduce the credit enhancement for the notes that reference a portfolio. Since S&P placed the notes on CreditWatch negative on Dec. 17, 2008, S&P has reviewed the transaction including the credit and equity default swaps referenced in the portfolio. In the past few days S&P has received notification that a further three equity default swap credit events have occurred. Following these credit events, the subordination available to the series 11 notes is likely to be reduced completely and the investors are unlikely to receive their principal in full. Therefore, S&P has lowered the series 11 rating to 'D'. In S&P's opinion, the volatility in the global equity market has contributed to a significant decline in the credit quality of the portfolio over a very short period of time. The ratings on series 9 and 10 remain on CreditWatch negative. The portfolio references entities via 30 second-to-default baskets, with each basket referencing three credit default swaps and one equity default swap. A second-to-default basket would be considered in default if two of the underlying reference entities in the basket trigger a credit event. Following the credit events in the reference portfolio, it now contains three defaulted baskets. Each series that S&P has taken a rating action on has the same reference portfolio, including credit default swaps and equity default swaps. A credit event on an equity default swap can be called once the underlying stock price reaches a predetermined level. Credit event notices have been received on some credit default swap and equity default swap reference entities. Ratings List Chrome Funding Ltd. Ratings Lowered and Kept on Creditwatch Negative EUR35 Million Floating-Rate Secured Credit- And Equity-Linked Notes Series 9 (ACEO 30/4) Ratings ------- Class To From ----- -- ---- A B-/Watch Neg AAA/Watch Neg EUR15 Million Floating-Rate Secured Credit- and Equity-Linked Notes Series 10 (ACEO 30/4) Ratings ------- Class To From ----- -- ---- B B-/Watch Neg AAA/Watch Neg Rating Lowered and Removed from Creditwatch Negative EUR24.5 Million Floating-Rate Secured Credit- And Equity-Linked Notes Series 11 (ACEO 30/4) Ratings ------- Class To From ----- -- ---- C D AA/Watch Neg CULLINAN FINANCE: Moody's Withdraws 'Ca' Rating on Income Note -------------------------------------------------------------- Moody's Investors Service announced that, following the repayment in full of the last outstanding senior debt and exchange of junior debt for unrated securities, as of January 14, 2009, it has withdrawn the ratings assigned to the debt programs of Cullinan Finance Limited and Cullinan Finance Corporation. Cullinan does not intend to issue any further debt from its debt programs. The rating action is: Cullinan Finance Limited and Cullinan Finance Corporation (1) Euro Commercial Paper program -- Current Rating: WR -- Prior Rating: Prime-1 (2) Euro Medium Term Note program -- Current Rating: WR -- Prior Rating: Aaa/Prime-1 (3) U.S. Commercial Paper program -- Current Rating: WR -- Prior Rating: Prime-1 (4) U.S. Medium Term Note program -- Current Rating: WR -- Prior Rating: Aaa/Prime-1 (5) Income Note program -- Current Rating: WR -- Prior Rating: Ca EPIC PLC: Fitch Junks Ratings on GBP29.2 Mil. Class F Notes ----------------------------------------------------------- Fitch Ratings has downgraded Epic (Industrious) plc's commercial mortgage-backed notes due April 2014: -- GBP299.7 million Class A XS0268560785: downgraded to 'AA' from 'AAA'; Outlook Negative -- GBP49 million Class B XS0268561759: downgraded to 'A' from 'AAA'; Outlook Negative -- GBP19.4 million Class C XS0268562484: downgraded to 'BBB' from 'AA'; Outlook Negative -- GBP37.4 million Class D XS0268562641: downgraded to 'BB' from 'AA'; Outlook Negative -- GBP37.9 million Class E XS0268563615: downgraded to 'B' from 'A'; Outlook Negative -- GBP29.2 million Class F XS0268564266: downgraded to 'CCC' from 'BBB'; assigned 'DR5' The downgrade reflects the deteriorating credit quality of the transaction, as evidenced by the decline in collateral value. Following the revaluation of the portfolio in June 2008 and the resulting market value decline of 20.4% to GBP521.4 million, the loan-to-value ratio increased to 90.7% from 74.7% at closing. The LTV covenant of 75% was tested in September 2008, resulting in a loan event of default and the issuance of a credit event notice. Fitch estimates that the value is likely to have since fallen further, as secondary industrial assets continue to be severely affected by increased yields; the current Fitch LTV of 107.9% implies there is no equity value left in the collateral. Also in September 2008, following working capital shortfalls and the lack of a suitable solution, the borrower was placed into administrative receivership at the request of its directors. Ernst & Young was appointed as joint administrative receiver; following this appointment, information regarding the transaction has been in short supply. Despite the adverse situation of both the borrower and the loan, Fitch considers that an enforcement of the security, resulting in a liquidation of the portfolio, is unlikely given prevailing market conditions, with the most likely course of action being a debt restructuring. While the transaction includes a number of subordinated creditors, the magnitude of the value decline has blocked their ability to enforce the security. At the October 2008 interest payment date, only GBP4.5 million of the GBP7.7 million interest due was paid. The shortfall of GBP3.2 million has been capitalized, increasing the outstanding loan balance to GBP475.9 million. Neither net operating income nor the interest coverage ratio was reported; however, the missed interest payment suggests a 50% decline in NOI and a ICR of approximately 0.6x. As the reported gross income only fell by 7% from the last IPD, the drop in NOI appears to have been caused by a higher-than- expected level of costs. It is not clear at this stage whether this is a permanent increase in irrecoverable property operating costs, or transitory expenditure (eg advisory costs) associated with an attempt to restructure the borrower group and debts. However, given the relatively low operating expenses generally associated with industrial assets, Fitch considers that the interest shortfall is likely to have resulted from one or more one-off cost items. Fitch will continue to monitor the performance of the transaction. EUROHOME MORTGAGES: S&P Cuts Ratings on Class C 2007-1 Notes to B ----------------------------------------------------------------- Standard & Poor's Ratings Services took various rating actions on notes issued by Eurohome UK Mortgages 2007-1 PLC and Eurohome UK Mortgages 2007-2 PLC. Specifically, S&P lowered and placed on CreditWatch negative S&P's ratings on four tranches, placed nine tranches on CreditWatch negative, and affirmed the MERCs in both deals. The downgrades of the class B2 and C notes in both transactions follow deteriorating collateral performance and S&P's expectation of increasing losses. The fall in U.K. house prices and the effect of depressed sale prices on repossessions has led to significantly increased losses and loss severities for both deals. The reserve funds for Eurohome 2007-1 and Eurohome 2007-2 are currently 65.61% and 77.55% of the required amounts, respectively. The current inventories of repossessions and cumulative losses increased significantly in the last quarter. S&P expects further heavy losses in coming quarters and increasing loss severities for both transactions, causing further reserve fund draws. S&P will resolve the CreditWatch placements after the March interest payment date. Ratings List Eurohome UK Mortgages 2007-1 PLC GBP350.000 Million Mortgage-Backed Floating-Rate Notes Plus an Overissuance of GBP4.725 Million Excess-Spread-Backed Floating-Rate Notes Ratings Lowered and Placed on CreditWatch Negative Rating ------ Class To From ----- -- ---- B2 BB-/Watch Neg BB C B/Watch Neg BB Ratings Placed on CreditWatch Negative Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA M1 AA/Watch Neg AA M2 A/Watch Neg A B1 BBB/Watch Neg BBB Rating Affirmed Class Rating ----- ------ MERCs AAA Eurohome UK Mortgages 2007-2 PLC GBP453 Million, EUR70 Million Mortgage-Backed Floating-Rate Notes, Plus an Overissuance Of GBP7.5 Million Excess-Spread-Backed Floating-Rate Notes Ratings Lowered And Placed On CreditWatch Negative Rating ------ Class To From ----- -- ---- B2 BB-/Watch Neg BB C B/Watch Neg BB Ratings Placed On CreditWatch Negative Rating ------ Class To From ----- -- ---- A2 AAA/Watch Neg AAA A3 AAA/Watch Neg AAA M1 AA/Watch Neg AA M2 A/Watch Neg A B1 BBB/Watch Neg BBB Rating Affirmed Class Rating ----- ------ MERCs AAA HERCULES PLC: S&P Lowers Rating on Class E Notes to 'BB' -------------------------------------------------------- Standard & Poor's Rating Services lowered its credit ratings on the class D and E notes issued by HERCULES (ECLIPSE 2006-4) PLC due to concerns about the credit quality of the underlying loans. At the same time, S&P removed the class E notes from CreditWatch negative. The ratings on the other classes remain unaffected. On Sept. 24, 2008, S&P placed the class E notes on CreditWatch negative principally due to S&P's concerns regarding the predominantly single-tenant exposure of the Welbeck and Booker loans and additional concerns for the term and refinance risk of the Cannon Bridge loan. These loans account for 31.4% of the current total loan balance. The rating actions follow a review of all loans in this transaction based on individual loan data reported by the servicer for the October 2008 interest payment date and overall transaction data recently reported by the cash manager for the January 2009 interest payment date. S&P's outlook for the Cannon Bridge property has deteriorated. S&P understands that Standard Bank has taken space elsewhere and that it intends to vacate the property in September 2009 on expiry of three of its four leases. The drop in cash flow that will follow, together with a significant reduction in take-up of City of London offices, falling rental values, and market value declines in this sector since early 2007 mean that, in S&P's view, there is an increased risk that proceeds from a sale (or refinance) of the Cannon Bridge property may not be sufficient to repay the senior loan in full. If the cash flow falls as S&P expect, with the sponsor unable to achieve new lettings and taking into account the cash reserve and potential void costs, S&P believes that a breach of the whole-loan interest coverage ratio covenant before loan maturity is possible. In addition to Cannon Bridge, two loans (Booker and Welbeck) are each secured by a portfolio of properties let almost entirely to one tenant: Booker Cash & Carry and the Noble Organization, respectively, neither of which S&P currently rates. S&P has considered these loans against a range of scenarios including one in which the tenants default. The properties these tenants occupy are secondary/tertiary and in S&P's opinion the market value declines of these type of assets has been severe. Therefore, in a scenario where one of the tenants defaults during the term of the loan, there is an increased risk that sale (or refinance) proceeds could be insufficient to repay the senior loan in full. S&P will shortly publish S&P's transaction update report on HERCULES (ECLIPSE 2006-4), which will contain a more detailed review of the loans in this transaction as well as key features of the transaction structure. HERCULES (ECLIPSE 2006-4) is a true-sale transaction that closed in December 2006 and is backed by a pool of seven loans secured against commercial property in the U.K. None of the loans has prepaid in full since closing and the outstanding note balance is GBP801.77 million (down from GBP814.95 million at closing). Ratings List HERCULES (ECLIPSE 2006-4) PLC GBP814.95 Million Commercial Mortgage-Backed Floating-Rate Notes Rating Lowered Class To From ----- -- ---- D BBB A Rating Lowered And Removed From CreditWatch Negative Class To From ----- -- ---- E BB BBB/Watch Neg IVORY CDO: Fitch Cuts Ratings on Class E Notes to 'CCC' ------------------------------------------------------- Fitch Ratings has downgraded six classes of Ivory CDO Limited notes, removed the notes from Rating Watch Negative, and assigned a Stable Outlook to five of the notes as detailed below. -- EUR146 million class A1 (ISIN XS0309311909): downgraded to 'BBB+' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR6 million class A2 (ISIN XS0309350477): downgraded to 'BBB' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR12 million class B (ISIN XS0309352093): downgraded to 'BBB-' (BBB minus) from 'AA'; removed from RWN; assigned a Stable Outlook -- EUR12 million class C (ISIN XS0309353653): downgraded to 'BB' from 'A'; removed from RWN; assigned a Stable Outlook -- EUR12 million class D (ISIN XS0309357050): downgraded to 'B-' (B minus) from 'BBB'; removed from RWN; assigned a Stable Outlook -- EUR2.5 million class E (ISIN XS0309358298): downgraded to 'CCC' from 'BB'; removed from RWN The downgrades reflect Fitch's view on the credit risk of the rated tranches following the release of the agency's revised Structured Finance CDO rating criteria on December 16, 2008, as well as credit deterioration in the collateral pool. Ivory CDO Limited is a securitization of European structured finance assets with a total note issuance of EUR200 million. The application of the new SF CDO rating criteria incorporates Fitch's view on industry and vintage concentration risks and the propensity for low recoveries upon default, particularly for thin tranches. While the downgrade of the class A1, A2, B and C notes was driven by Fitch's revised criteria, the downgrade of the class D and E notes was additionally linked to the transaction's actual performance. While all overcollateralization tests are currently passing, the class D OC test is currently at 103.6% compared to a test minimum level of 101%. Given the current macroeconomic climate, Fitch expects further negative portfolio migration which could result in a higher percentage of 'CCC' assets. The resulting OC adjustments for 'CCC' assets may result in the class D OC test breaching, which would divert interest payments from the class E notes to amortize the senior notes. In Fitch's view, while not imminent, the breach of the class D OC test in a stressed environment would make the likelihood of full recovery of the class E notes more remote. In conducting its analysis, Fitch makes a three notch downward adjustment for any names on RWN for default analysis in its Portfolio Credit Model. On an adjusted basis approximately 29.3% of the assets are treated as sub-investment grade. The weighted average portfolio quality is 'BBB-' (BBB minus) and 9% of the portfolio is on RWN by rating driver. One asset is currently defaulted which represents 1.1% of the portfolio. As per the trustee report dated January 16, 2009, the portfolio contains 75 assets from 64 obligors, with the largest obligor accounting for approximately 3.6% of the outstanding portfolio amount, and the three largest obligors accounting for 10% of the outstanding portfolio amount. The largest single industry is RMBS with 28.2% of the portfolio volume. The two largest vintages are 2006 and 2007, making up 41% and 34.8% of the portfolio respectively, while the three largest country concentrations are the Netherlands, UK, and Germany, representing 28.5%, 20.9% and 14.8% of the portfolio respectively. The portfolio is actively managed by Societe Generale Asset Management Alternative Investments S.A (rated 'CAM2' on Fitch's CDO Asset Manager Rating scale). LEHMAN BROTHERS: Moody's Confirms and Withdraws 'B/MR1+' Rating --------------------------------------------------------------- Moody's Investors Service has confirmed and simultaneously withdrawn the B/MR1+ money market fund ratings of two sub-funds of the Lehman Brothers Liquidity Funds plc, the Lehman Euro Liquidity Fund and the Lehman Sterling Liquidity Fund. The Funds were terminated January 29, 2009. Shareholders of the Euro fund were paid back in full. Shareholders of the Sterling fund received 97% of their assets, whereas the manager is expecting to pay the balance on or shortly after the date the final asset is either sold or matures which is expected to be no later than June 2009. The last rating action on the two funds was dated September 22, 2008, when following the Funds' suspension of redemptions, Moody's downgraded the funds to B/MR1+ and placed them on review for further downgrade. LLOYDS BANKING: Expects GBP10 Billion Full Year Loss for HBOS ------------------------------------------------------------- Lloyds Banking Group plc's HBOS plc is expected to report an underlying loss before tax of some GBP8.5 billion for the year ended December 31, 2008, due to the increasingly difficult market conditions, acceleration in the deterioration of credit quality and falls in estimated asset values. News of the projected loss sent Lloyds Banking Group plc's shares down by 32% on Friday, The Wall Street Journal reported. In a Feb. 13 statement, Lloyds Banking Group plc said on a statutory basis, adjusting for the impact of short term fluctuations (c.GBP0.25 billion), loss on sale of businesses (c.GBP0.85 billion), FSCS levy (c.GBP0.2 billion) and goodwill impairment (c.GBP0.15 billion), HBOS plc's loss before tax is expected to be approximately GBP10 billion, before the policyholder tax charge which is currently expected to be approximately GBP0.9 billion. According to Lloyds Banking Group plc's statement, the key elements of the loss are the GBP4 billion impact of market dislocation and approximately GBP7 billion of impairments in the HBOS corporate division. "The market dislocation has been driven by deterioration in asset quality and falling market valuations. The impairments are, principally as a result of applying a more conservative provisioning methodology consistent with that used by Lloyds TSB, and reflecting the acceleration in the deterioration in the economy, some GBP1.6 billion higher than our expectations when we issued our shareholder circular at the beginning of November last year," the statement said. Lloyds TSB Group meanwhile expects to report a profit before tax from its continuing businesses, including the impact of approximately GBP1.3 billion from market dislocation, of some GBP2.4 billion. On a statutory basis, adjusting for the impact of insurance volatility of c.GBP0.75 billion, and aggregate provisions of c.GBP0.4 billion in respect of the Financial Services Compensation Scheme (FSCS) levy, certain historic US dollar payments and goodwill write-downs, profit before tax is expected to be in the region of GBP1.3 billion, before the policyholder interests volatility charge which is currently expected to be c.GBP0.5 billion. The Journal relates that analysts, expecting more write-downs, said Lloyds Banking Group plc is now one of the most thinly capitalized U.K. banks, with a Tier 1 capital ratio of 6.5%. Sandy Chen, an analyst at Panmure Gordon in London, as cited by the Journal, said he now expects GBP11 billion in pretax pro-forma losses for 2009. Lloyds Banking Group plc currently estimates that its Core tier 1 capital ratio at December 31, 2008 will be within the range of 6.0 - 6.5 per cent, which is significantly in excess of its regulatory capital requirements. Lloyds Banking Group plc scheduled release of its full results on February 27, 2009. Lloyds Banking Group plc (NYSE:LYG) -- http://www.lloydsbankinggroup.com/-- formerly Lloyds TSB Group plc, is a United Kingdom-based financial services company, whose businesses provide a range of banking and financial services in the United Kingdom and a limited number of locations overseas. The operations of Lloyds TSB Group in the United Kingdom were conducted through over 2,000 branches of Lloyds TSB Bank, Lloyds TSB Scotland plc and Cheltenham & Gloucester plc during the year ended December 31, 2007. Cheltenham & Gloucester plc (C&G) is the company's specialist mortgage arranger. Following the transfer of its mortgage lending and deposits to Lloyds TSB Bank, during 2007, C&G arranges mortgages for Lloyds TSB Bank rather than for its own account. International business is conducted mainly in the United States and continental Europe. Lloyds TSB Group's services in these countries are offered through branches of Lloyds TSB Bank. In January 2009, the company acquired HBOS plc. SUNJUICE LTD: Appoints Joint Administrators from PwC ---------------------------------------------------- On Jan. 28, 2009, Robert Nicholas Lewis and Derek Anthony Howell of PricewaterhouseCoopers LLP were appointed joint administrators of: -- Serious Food Ltd. -- Sunjuice Ltd. -- Astrol Properties Ltd. The companies can be reached at: Sun House Llantrisant Business Park Pontyclunn Mid Glamorgan CF72 8LF England FUNDWORKS UK: Tenon Recovery Named Joint Administrators ------------------------------------------------------- T. J. Binyon and C. D. Wilson of Tenon Recovery were appointed joint administrators of Fundworks UK Ltd. on Jan. 30. The company can be reached through Tenon Recovery at: Sherlock House 73 Baker Street London W1U 6RD England NORTH WEST ESTATES: Taps Administrators from Tenon Recovery ----------------------------------------------------------- Nicholas Charles Simmonds and Timothy John Edward Dolder of Tenon Recovery were appointed joint administrators of North West Estates Plc on Jan. 29, 2009. The company can be reached at: North West Estates Plc 1 Hillingdon Road Uxbridge Middlesex England PROPERTY FINDERS: Appoints Administrators from Tenon Recovery ------------------------------------------------------------- On Jan. 30, 2009, Joanne Kim Rolls and Trevor John Binyon of Tenon Recovery were appointed joint administrators of: -- Richmond Green Marketing Limited -- Property Finders International Limited -- PFI Events Limited -- PFI Media Limited The companies can be reached at: Lion House Red Lion Street Richmond Surrey TW9 1RE England VITESSE PRINT: Owes Creditors More Than GBP3 Million ---------------------------------------------------- Adam Hooker at PrintWeek reports that London-based printer Vitesse Print owed more than GBP3 million to creditors when it went into liquidation in January. Citing a copy of the creditors' report, PrintWeek discloses Citymine, the company's parent, is the largest creditor. Citymine, PrintWeek states, was owed GBP620,000, while a number of banks, finance companies and HMRC were owed around GBP1 million combined. The company also owed more than GBP200,000 to paper companies, PrintWeek adds. PrintWeek relates Richard Pick, director of Vitesse, cited several reasons behind the company's liquidation, including a GBP200,000 drop in the company's invoice discounting, reduced credit limit and pressure to pay suppliers sooner, pressure from clients to pay later, as well as overcapacity in lithographic printing. However, it is thought that the major reason for the liquidation was the purchase of Axis Print in August 2007, PrintWeek notes. PrintWeek says the GBP500,000 acquisition of Axis ended up costing a lot more. Vitesse, PrintWeek recalls, lost a contract with English Heritage in early 2009 after the client lost faith in the company's ability to meet requirements. PrintWeek recounts according to the creditors' report, the company struggled to make a profit in the past five years, recording losses in 2004 and 2006 but a small profit each subsequent year. On July 31, 2008, turnover had increased over that time, reaching GBP4.8 million with a GBP216,000 loss. WH WILMOT: To Be Placed Into Administration ------------------------------------------- Alun Thorne at Birmingham Post reports Birmingham-based nine carat gold watch maker WH Wilmot, owned by Tony Shepherd, is to be placed into administration after trading for nearly 150 years. The report relates according to Laurence Pagden, of insolvency specialists Benedict Mackenzie, "the company is insolvent and has ceased trading." The company, the report states, had been hit by the soaring price of gold and the economic downturn. "The firm has been accruing losses and the support it was receiving from its holding company could not continue," the report quoted Mr. Pagden as saying. "There were no orders in hand to complete – most of the time was spent by workers cleaning machinery." Citing Mr. Pagden, the report discloses WH Wilmot owed more than GBP1 million to parent company Saunders Group, also owned by Mr. Shepherd. The company's nine staff have been laid off, the report notes. ********* 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. Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Pius Xerxes V. Tovilla, Joy A. Agravante, Marie Therese V. Profetana and Peter A. Chapman, Editors. Copyright 2009. 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 * * *