/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/090413.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 Monday, April 13, 2009, Vol. 10, No. 71 Headlines A U S T R I A ENERGIESPARHAUSER LLC: Claims Registration Period Ends April 14 GAILER & FON: Claims Registration Period Ends April 14 IMIS LLC: Claims Registration Period Ends April 15 LWS LLC: Claims Registration Period Ends April 14 MOBILENOVA LLC: Claims Registration Period Ends April 16 MPG METALLBAU: Claims Registration Period Ends April 14 OFFE LLC: Claims Registration Period Ends April 15 WOHNBAU ROMBERGER: Claims Registration Period Ends April 15 B E L G I U M FORTIS BANK: Commission Opens In-Depth Probe Into Alleged Aid E S T O N I A * Fitch Cuts Estonia's Long-term Foreign Currency IDR to 'BBB+' F R A N C E CASINO GUICHARD-PERRACHON: Fitch Affirms 'BB+' Preferred Ratings NATIXIS: Fitch Affirms Individual Rating at 'E' PERNOD RICARD: Sells Wild Turkey; Mulls EUR1 Bil. Rights Issue PERNOD RICARD: Rights Issue Impact Moderately Positive, Fitch Says G E O R G I A * Fitch Affirms Individual Ratings on Four Georgian Banks G E R M A N Y KARMANN: Files for Insolvency, Can't Fund Massive Layoff Plan MASCHINENFABRIK EXNER: Claims Registration Period Ends May 28 MEDIENHAUS MINTZEL: Claims Registration Period Ends May 29 MUREK FASHION: Claims Registration Period Ends May 15 NOVUM STAHLVERARBEITUNGS: Claims Registration Period Ends May 14 PAGODA CENTRO: Claims Registration Period Ends May 14 PANGA DEUTSCHLAND: Claims Registration Period Ends April 25 SSW SCHICHAU: Investors Submit Rescue Plan TUI AG: Moody's Downgrades Corporate Family Rating to 'B2' I C E L A N D TRYGGINGAMIDSTODIN HF: S&P Retains Negative Watch on 'BB' Rating * ICELAND: Gov't Welcomes UK's Icelandic Banking Crisis Report I R E L A N D ALLIED IRISH: Fitch Puts 'D' Individual Rating on Negative Watch CAIRN HIGH: S&P Junks Ratings on Three Classes of Notes IRIS SPV: S&P Raises Rating on US$15 Mil. Notes from 'BB-' * Moody's Takes Multiple Rating Actions on 12 Irish Banks * IRELAND: Corporate Failures Up 170% in First Quarter 2009 K A Z A K H S T A N ABSINTH GROUP: Creditors Must File Claims by May 8 ARENA-PV LLP: Creditors Must File Claims by May 8 AZIMPEX LLP: Creditors Must File Claims by May 8 BIRLIK LLP: Creditors Must File Claims by May 8 DEKA GROUP: Creditors Must File Claims by May 8 DEKOR STYLE: Creditors Must File Claims by May 8 JIHAN XXI: Creditors Must File Claims by May 8 KAMAS LLP: Creditors Must File Claims by May 8 ORDA CREDIT: S&P Affirms 'CCC+/C' Counterparty Credit Rating SERVICE BAGAJ: Creditors Must File Claims by May 8 USTA ART LLP: Creditors Must File Claims by May 8 K Y R G Y Z S T A N KAMI LTD: Creditors Must File Claims by April 17 STAL INVEST: Creditors Must File Claims by April 17 L A T V I A NORVIK BANKA: Fitch Downgrades Individual Rating to 'D/E' * Fitch Corrects Release on Latvia's Rating Downgrade L I T H U A N I A BANKAS SNORAS: Fitch Downgrades Individual Rating to 'D/E' LATVIJAS KRAJBANKA: Fitch Lowers Individual Rating to 'D/E' * Fitch Cuts Lithuania's Long-term Foreign Currency IDR to 'BBB+' L U X E M B O U R G BREEZE FINANCE: Fitch Downgrades Rating on Class B to 'B+' N E T H E R L A N D S FORTIS BANK: S&P Cuts Junior Ratings on EUR2 Bil. Notes to 'BB-' LEVERAGED FINANCE: S&P Cuts Rating on Class IV Notes to 'BB+' R U S S I A BELGAZPROMBANK: Fitch Lifts Individual Rating to 'D/E' CENTERTELECOM OAO: Fitch Lifts LT Issuer Default Rating to 'B+' CONSTRUCTION COMPANY: Court Names Temporary Insolvency Manager IZHEVSKIY AUTOREPAIR: Creditors Must File Claims by May 27 IZOPLAST: Creditors Must File Claims by April 27 MECHEL OAO: Shareholders Sue Firm on "False" Fin'l Statements MIR DEREVA: Creditors Must File Claims by May 27 NAV-DREV: Creditors Must File Claims by April 27 OM-STROY: Creditors Must File Claims by April 27 RG BRANDs: Moody's Downgrades Corporate Family Rating to 'B3' SHULGINSKIY BREWERY: Creditors Must File Claims by April 27 SIB-ENERGO-PROM: Altayskiy Bankruptcy Hearing Set September 9 SISTEMA-HALS JSC: Fitch Puts 'B' Issuer Rating on Evolving Watch STROY-AS: Creditors Must File Claims by May 27 TRANSCREDITBANK: Moody's Changes Outlook on 'D-' BFSR to Negative UC RUSAL: Creditors Shun Holding Co.'s Debt-for-Shares Proposal URAL-LES: Creditors Must File Claims by May 27 VOLGA-TECH-PROM: Creditors Must File Claims by April 27 YUZHNO URALSKIY: Creditors Must File Claims by April 27 * Fitch Cuts Individual Ratings on 5 Foreign-Owned Russian Banks * RUSSIA: Overdue Loans Increasing 20% a Month, Sberbank CEO Says S P A I N CM BANCAJA: Fitch Puts 'CC'-Rated Class E Notes on Watch Negative METROVACESA SA: Owner Inks Debt Refinancing Deal METROVACESA SA: To Review Demerger Deal With French Affiliate S W E D E N GENERAL MOTORS: Creditors to Decide on Saab Fate Today S W I T Z E R L A N D BAUHOF ARCHITEKTEN: Creditors Must File Claims by April 17 GST GREPPER: Deadline to File Proofs of Claim Set April 20 HUMLEN TRADING: Creditors Have Until April 20 to File Claims IPFS JSC: Proof of Claim Filing Deadline is April 22 M&V ADMINISTRATORS: Creditors' Proofs of Claim Due by April 20 MARTIN LEHNER: April 20 Set as Deadline to File Claims MORKER COACHING: Creditors Must File Proofs of Claim by April 20 OVAG INTERNATIONAL: Deadline to File Claims Set April 22 PROXIMUS HELVETICA: Creditors Have Until April 17 to File Claims STAHLIMPEX LLC: Proof of Claim Filing Deadline is April 20 UBS AG: Bans Managers from Travelling Abroad Amid US Fraud Probe U K R A I N E AMIK LLC: Creditors Must File Claims by April 20 ATIKA-DESIGN LLC: Creditors Must File Claims by April 19 AZOV PHARMACEUTICAL: Court Starts Bankruptcy Procedure DONETSKSTEEL CJSC: Fitch Junks Issuer Default Ratings from 'B-' EOM INFORM: Court Starts Bankruptcy Supervision Procedure I. L. Z. FRUIT: Creditors Must File Claims by April 19 KRASNY LUCH: Creditors Must File Claims by April 19 LAN LLC: Creditors Must File Claims by April 20 SMOLINE AGRICULTURAL: Creditors Must File Claims by April 19 SVETLANA LLC: Creditors Must File Claims by April 19 ZACHEPILOVKA MILK: Creditors Must File Claims by April 19 U N I T E D K I N G D O M ARGON CAPITAL: Moody's Cuts Rating on GBP750 Mil. Notes to 'Ba2' CYCLONE MOBILITY: Appoints Administrators from Tenon Recovery DUFFS 93 LTD: Appoints Joint Administrators from Baker Tilly G H LUCAS: Taps Joint Administrators from PKF HENG JIA RETAIL: Brings in Administrators from Tenon Recovery MINDTRACK LTD: Taps Joint Administrators from Baker Tilly RETAIL INSPIRATION: Taps Administrators from Tenon Recovery ROBERT DYAS: Management Team Completes Buyout ROYAL MAIL: European Commission Approves UK Loan Measures STANFORD GROUP: London Judge Orders Freeze on Assets TAYLOR WIMPEY: Fitch Maintains 'CCC' Senior Unsecured Rating TURBO BETA: Moody's Downgrades Corporate Family Rating to 'B3' VEHICLE OPTIONS: Provisional Liquidator Appointed WHITERIGG ALPINES: In Administration; KPMG Appointed * UK: Independent Music Stores Down to 300, ERA Says * UK: Landlords Agree Ten Point Plan to Help Retailers Cut Costs * U.K.: GDP Shrank 1.5% in First Quarter * CBI: Credit Crunch Maybe Becoming Less Severe for UK Businesses * S&P Takes Rating Actions on 481 European Synthetic CDO Tranches * BOND PRICING: For the Week April 6 to April 9, 2009 ********* ============= A U S T R I A ============= ENERGIESPARHAUSER LLC: Claims Registration Period Ends April 14 -------------------------------------------------------------- Creditors owed money by LLC Vertriebsgesellschaft fuer Energiesparhauser (FN 134237h) have until April 14, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Kurt Weinreich Josefstrasse 13 3100 St. Poelten Austria Tel: 02742/72 222 Fax: 02742/72 222-10 E-mail: kanzlei@tws-rae.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:30 a.m. on May 5, 2009, for the examination of claims at: Land Court of St. Poelten (199) Meeting Room 216 St. Poelten Austria Headquartered in St. Poelten, Austria, the Debtor declared bankruptcy on March 5, 2009, (Bankr. Case No. 14 S 41/09h). GAILER & FON: Claims Registration Period Ends April 14 ------------------------------------------------------ Creditors owed money by LLC Gailer & Fon (FN 137397f) have until April 14, 2009, to file written proofs of claim to the court- appointed estate administrator: Herbert Steinwandter Peraustrasse 9 9500 Villach Austria Tel: 04242/28 122 Fax: 04242/28122-22 E-mail: villach@reifundpartner.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 12:00 p.m. on April 20, 2009, for the examination of claims at: Land Court of Klagenfurt (729) Meeting Room 225 Klagenfurt Austria Headquartered in Villach, Austria, the Debtor declared bankruptcy on March 11, 2009, (Bankr. Case No. 41 S 39/09x). IMIS LLC: Claims Registration Period Ends April 15 -------------------------------------------------- Creditors owed money by LLC Imis (FN 252924y) have until April 15, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Stephan Riel Landstrasser Hauptstrasse 1/2 1030 Vienna Austria Tel: 01/713 44 33 Fax: 01/713 10 33 E-mail: kanzlei@jsr.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:15 a.m. on April 29, 2009, for the examination of claims at: Land Court of Korneuburg (119) Room 204 Korneuburg Austria Headquartered in Schwechat, Austria, the Debtor declared bankruptcy on March 12, 2009, (Bankr. Case No. 36 S 35/09b). LWS LLC: Claims Registration Period Ends April 14 ------------------------------------------------- Creditors owed money by LLC LWS (FN 298099g) have until April 14, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Bernhard Hundegger Peraustrasse 33 Parterre 9500 Villach Austria Tel: 04242/24 123 Fax: 04242/23 447 E-mail: kanzlei@rechtsanwalt-villach.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:00 a.m. on April 21, 2009, for the examination of claims at: Land Court of Klagenfurt (729) Meeting Room 225 Klagenfurt Austria Headquartered in Hermagor, Austria, the Debtor declared bankruptcy on April 14, 2009, (Bankr. Case No. 40 S 16/09g). MOBILENOVA LLC: Claims Registration Period Ends April 16 -------------------------------------------------------- Creditors owed money by LLC Mobilenova (FN 289898x) have until April 16, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Michael Zerobin Herzog-Leopold-Str. 2 2700 Wiener Neustadt Austria Tel: 02622/86472 Fax: 02622/86472-4 E-mail: anwalt@zerobin.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:00 a.m. on April 30, 2009, for the examination of claims at: Land Court of Wiener Neustadt (239) Room 15 Wiener Neustadt Austria Headquartered in Wiener Neustadt, Austria, the Debtor declared bankruptcy on March 16, 2009, (Bankr. Case No. 10 S 30/09d). MPG METALLBAU: Claims Registration Period Ends April 14 ------------------------------------------------------- Creditors owed money by LLC MPG Metallbau (FN 279910h) have until April 14, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Gabriella Bardel Hoher Platz 17 9400 Wolfsberg Austria Tel: 04352/2274 Fax: 04352/227416 E-mail: ra.gabriella@bardel.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:00 a.m. on April 21, 2009, for the examination of claims at: Land Court of Klagenfurt (729) Meeting Room 225 Klagenfurt Austria Headquartered in St. Stefan, Austria, the Debtor declared bankruptcy on March 5, 2009, (Bankr. Case No. 40 S 14/09p). OFFE LLC: Claims Registration Period Ends April 15 -------------------------------------------------- Creditors owed money by LLC Offe (FN 204489w) have until April 15, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Richard Proksch Am Heumarkt 9/I/11 1030 Vienna Austria Tel: 01/713 46 51 Fax: 01/713 84 35 E-mail: proksch@eurojuris.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:15 a.m. on April 29, 2009, for the examination of claims at: Land Court of Korneuburg (119) Room 204 Korneuburg Austria Headquartered in Gallbrunn, Austria, the Debtor declared bankruptcy on March 12, 2009, (Bankr. Case No. 36 S 33/09h). WOHNBAU ROMBERGER: Claims Registration Period Ends April 15 ----------------------------------------------------------- Creditors owed money by LLC Wohnbau Romberger (FN 116054v) have until April 15, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Franz Mitterbauer Wiesnerstr. 2 4950 Altheim Austria Tel: 07723/41 141 Fax: 07723/41 141-14 E-mail: amp.altheim@utanet.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:00 a.m. on April 22, 2009, for the examination of claims at: Land Court of Ried im Innkreis (469) Hall 101 Ried im Innkreis Austria Headquartered in Gurten, Austria, the Debtor declared bankruptcy on March 5, 2009, (Bankr. Case No. 17 S 14/09d). ============= B E L G I U M ============= FORTIS BANK: Commission Opens In-Depth Probe Into Alleged Aid ------------------------------------------------------------- The European Commission has opened an in-depth investigation under EC Treaty state aid rules to establish whether state measures in favour of Fortis Bank Nederland (FBN) and the activities of ABN Amro which were acquired by Fortis are in line with EU state aid rules. On October 3, 2008, the Dutch state purchased FBN and provided it with loans amounting to tens of billion of euros. On December 24, 2008, the Dutch state purchased the ABN activities from FBN. At this stage, the Commission has reason to believe that the measures may not be in line with its Communications on state aid to banks during the crisis. In particular, the temporal scope and remuneration of the loan facilities and the purchase price of the ABN activities do not seem to meet the criteria set by the Commission. The opening of an in-depth investigation gives interested parties an opportunity to comment on the proposed measure. It does not in any way prejudge the outcome of the procedure. Competition Commissioner Neelie Kroes said: "The Dutch state was justified in intervening to prevent the bankruptcy of Fortis Bank Nederland, which would have caused a serious disturbance of the Dutch economy. However, the Commission has to ensure that the rescue aid was limited to the minimum necessary and did not create undue distortions of competition liable to cause problems for banks in other Member States." Before its purchase by the Dutch state, FBN was a subsidiary of Fortis Bank. When the latter acquired the Dutch retail, private and merchant banking activities of ABN AMRO, it harbored them within FBN. Without considering the ABN activities, FBN was the fourth largest bank on the Dutch retail and merchant market. In response to the acute difficulties faced by Fortis Bank, which were directly threatening its subsidiary FBN, the Dutch state purchased the latter on October 3, 2008, and immediately provided a loan facility of tens of billions of euros allowing it to reimburse its short term debt to Fortis Bank. Thereby, FBN was effectively separated from Fortis Bank. The Commission's preliminary view is that this facility constitutes state aid to FBN and potentially also to the ABN activities. At this stage, the Commission has reason to believe that this aid may not fulfil the conditions laid down in the Communication on how the state aid rules apply to banks during the current crisis. In particular, it doubts that the amount and duration of the facility is limited to the minimum. Moreover, the Commission has doubts that the interest charged by the state is sufficient to avoid distortions of competition and does not merely provide cheap funding to FBN and the ABN assets. The Commission will also investigate thoroughly the purchase of the ABN activities from FBN for a price of EUR6.5 billion on December 24, 2008. The price paid by the Dutch state may have been above the market value of these activities, thereby providing an aid to FBN. It seems that this measure actually had the effect of a recapitalization of FBN. The Commission doubts whether the condition for recapitalizing banks are fulfilled. Finally, the Commission is in close contact with the Dutch authorities on the implementation of its merger decision in the Fortis/ABN AMRO case. About Fortis N.V. Headquartered in Brussels, Belgium, Fortis N.V. -- http://www.fortis.com/-- is an international provider of banking and insurance services to personal, business and institutional customers. The Company operates in four core businesses: Retail Banking, Asset Management and Private Banking, Merchant Banking and Insurance. The Company delivers a package of financial products and services through its own channels and via intermediaries and other partners. In May 2007, Fortis N.V. finalized the acquisition of a 50.45% stake in Pacific Century Insurance Holdings Limited. As of June 15, 2007, the Company had acquired a 98.59% stake in Pacific Century Insurance Holdings Limited. In July 2008, the Company sold International Asset Management Limited (IAM). ============= E S T O N I A ============= * Fitch Cuts Estonia's Long-term Foreign Currency IDR to 'BBB+' --------------------------------------------------------------- This comment corrects a version published earlier. Fitch has downgraded Latvia's Long-term Issuer Default Rating to 'BB+', and not to 'BB-' (BB minus) as was incorrectly stated in one place in the prior comment. The corrected comment is: Fitch Ratings has downgraded the Long-term foreign and local currency Issuer Default ratings and the Short-term foreign currency IDRs of Estonia, Latvia and Lithuania by one notch. The Long-term foreign currency IDRs are now 'BBB+', 'BB+' and 'BBB' respectively. The downgrade of Latvia's ratings reflects the deterioration in the prospects for the Latvian economy and elevated risk of policy slippage since the agreement of the EUR7.5 billion loan package with the IMF, EU and other international lenders in December 2008. The downgrade of Estonia's and Lithuania's ratings reflects the deterioration in economic prospects which will increase pressure on their macroeconomic policy frameworks. It also reflects their vulnerability to negative developments in Latvia, where risks have increased, through three channels: trade, common ownership of the banking system and resident confidence in local currencies and the banking system. While the devaluation of the Latvian LVL is not Fitch's base case, such an event would increase pressure on the Lithuanian LTL and the Estonian EEK. Fitch has also downgraded Estonia and Lithuania's Country Ceilings by one notch and Latvia's Country Ceiling by two notches. The Outlooks on the Long-term ratings remain Negative. Fitch is forecasting that the Latvian economy will contract by 12% in 2009, making it much harder for the government to implement its target budget deficit of 4.7% of GDP, which it passed on the assumption of a 5% contraction. On unchanged policies, Fitch estimates that the budget deficit could rise to 10% of GDP in 2009. Austerity measures implemented following the agreement with the IMF, EU and other international lenders in December 2008 contributed to a public backlash culminating in demonstrations in Riga in mid-January 2009 which led to the collapse of the four- party coalition government led by Prime Minister Ivars Godmanis in February. A new five-party coalition government led by former opposition party "New Era" took office in March 2009, but is only planning to submit draft budget amendments to parliament by late May. This lack of progress in revising the budget has led to the IMF delaying the disbursement of the EUR200 million tranche of funds which was scheduled for payment in Q109. Fitch is concerned that the risk to policy implementation has risen, which could lead to delays in the disbursement of the EUR1.7 billion Latvia is scheduled to receive from international lenders in Q209. While still not Fitch's base case scenario, the risk of devaluation in Latvia has risen as the implementation of the IMF programme has come under pressure. Devaluation would be severely negative given the high level of external debt (128% of GDP at end-2008) and the high proportion of foreign currency bank loans. Nevertheless, retaining the peg to the euro requires substantial falls in nominal wages to restore competitiveness, particularly as the flexible currencies of some non-Baltic neighboring countries have depreciated, while the global recession is hitting exports, making macroeconomic re-balancing more difficult. Fitch has downgraded Latvia's Country Ceiling by two notches to 'BBB'. The Country Ceiling is now two notches above the foreign currency IDR. The narrowing of the differential reflects a slightly larger increase in the risk of external financial pressures that could prompt sovereign actions to restrict private capital flows. Given the deterioration in economic prospects in Estonia and Lithuania, it will be harder for their governments to implement their adopted budget deficit targets of 2.9% of GDP and 2.1% of GDP respectively. Both countries are keen to keep their budget deficits below 3% of GDP to ensure compliance with the Maastricht criteria on public finances so they can adopt the euro as soon as possible. Fitch is now forecasting that the Lithuanian economy will contract by 10% in 2009, compared to its forecast of a 5% contraction in December 2008, when it downgraded Lithuania's foreign currency IDR to 'BBB+'. Following the implementation of measures to cut expenditure and raise revenues as pledged in December 2008, the Conservative-led government agreed earlier in April to cut budget expenditure by a further 3.5% of GDP and will submit proposals to revise the budget to parliament in April, with further expenditure cuts possible in June. However, Fitch notes that the implementation of austerity measures in December 2008 led to public protests against the government and the risk of a public backlash against further budget cuts may constrain the government's room for maneuver. The Estonian economy contracted by 3.6% in 2008 (and 17.2% in Q408 on a quarter-on-quarter annualized basis) and Fitch is forecasting that it will contract by 10% in 2009. The general government budget deficit was 3% of GDP in 2008, although a supplementary budget passed in early 2008 revised the budget target to balance from a 1% of GDP surplus. The government passed the 2009 budget with a target deficit of 1.7% of GDP but subsequently widened the target to 2.9% of GDP with a supplementary budget in February 2009 which made expenditure cuts of around 3.5% of GDP. However, with the economic downturn now more severe than expected, and revenues falling below-target, the government is set to propose new expenditure-cutting measures by the end of April 2009. Fitch believes that further measures to improve the budgetary position will be difficult to implement and the budget deficit may well rise above the targeted 2.9% of GDP. Fitch notes that the Estonian government's general government fiscal reserves of 9% of GDP at end-2008 mean it has the flexibility of financing at least part of its budget deficit. Its low general government debt level of 4.8% of GDP at end-2008 is a support to the rating. Fitch notes that imbalances in all three Baltic countries are being unwound. Current account deficits in Q408 narrowed to 5.5% of GDP in Estonia, 3.8% of GDP in Lithuania and 8.3% of GDP in Latvia and Fitch is forecasting current account deficits in the low single-digits for all three countries in 2009. Inflation rates are also declining with year-on-year inflation falling to 2.0% in Estonia in March 2009, and 8.5% in Lithuania and 9.4% in Latvia in February 2009 (from respective peaks of 11.6%, 12.7% and 17.7% during 2008). Nevertheless, this rebalancing is taking a toll on the real economy through falling property prices, deteriorating bank asset quality and rising unemployment and will increase political pressure on governments as they seek to impose fiscal austerity measures. Furthermore, all three Baltic countries' near-term external financing requirements remain high: Fitch estimates that short-term debt at end-2008 and medium and long-term amortization for 2009 (albeit much of this is to foreign parent banks) is US$16.7 billion in Latvia, compared to international reserves of US$5.3 billion at end-2008; US$15.5 billion in Estonia, compared to reserves of US$3.9 billion and US$13.5 billion in Lithuania compared to reserves of US$6.4 billion. Estonia: -- Long-term foreign currency IDR: downgraded to 'BBB+' from 'A- ' (A minus). Outlook Negative -- Long-term local currency IDR: downgraded to 'A-' (A minus) from 'A'. Outlook Negative -- Short-term foreign currency IDR downgraded to 'F2' from 'F1' -- Country Ceiling: downgraded to 'A+' from 'AA-' (AA minus) Latvia: -- Long-term foreign currency IDR: downgraded to 'BB+' from 'BBB-' (BBB minus). Outlook Negative -- Long-term local currency IDR: downgraded to 'BBB-' (BBB minus) from 'BBB'. Outlook Negative -- Short-term foreign currency IDR: downgraded to 'B' from 'F3' -- Country Ceiling: downgraded to 'BBB' from 'A-' (A minus) Lithuania: -- Long-term foreign currency IDR: downgraded to 'BBB' from 'BBB+'. Outlook Negative -- Long-term local currency IDR: downgraded to 'BBB+' from 'A-' (A minus). Outlook Negative -- Short-term foreign currency IDR: downgraded to 'F3' from 'F2'. -- Country Ceiling: downgraded to 'A' from 'A+' =========== F R A N C E =========== CASINO GUICHARD-PERRACHON: Fitch Affirms 'BB+' Preferred Ratings ---------------------------------------------------------------- Fitch Ratings has affirmed Casino Guichard-Perrachon SA's Long- term Issuer Default rating and senior unsecured rating at 'BBB-' (BBB minus) and Short-term IDR at 'F3'. Fitch also affirmed Casino's EUR600 million perpetual preferred constant maturity swap securities at 'BB+'. The Outlook for the Long-term IDR is Stable. "Casino's ratings reflect the group's overall business performance resilience, thanks to its multi-format strategy, private label development and a more focused international portfolio of activities," said Johnny Da Silva, Director in Fitch's European Retail Leisure Consumer Products team. "The group's adjusted leverage remains high due to its EUR1.5 billion off-balance sheet obligations and therefore, Fitch sees low rating headroom at the current rating." The French food retail market continues to be difficult due to a weak economic environment, price deflation and competition among main food retailers. In France, most of Casino's retail formats have performed in line with management's expectations and have shown resilience, thanks to the group's multi-format strategy. However, Fitch expects that the economic outlook, intense price competition and the implementation of the recent French Law "LME" to put pressure on the group's domestic revenue and operating margin in 2009. Casino has refocused its international portfolio (29% of the group's FY08 operating profit) mainly towards Brazil, Colombia and Thailand, where the group enjoys strong market positions. Key challenges for the group's international portfolio include consolidating leading positions and managing country risks. Casino's financial profile was stable at FYE08, with net debt/EBITDA unchanged at 2.5x. The group aims to reduce the ratio to 2.2x at end-2010. The group's lease-adjusted net debt/EBITDAR also remained broadly stable at 3.8x at FYE08 (FYE07: 3.7x). Fitch's calculation of these ratios includes adjustments of EUR163 million for the group's securitized assets, EUR300 million related to its deeply subordinated notes, EUR259 million for the equity swap with Exito and EUR460 million of annual operating leases that Fitch capitalizes. Fitch also computes and monitors an all-in leverage ratio encompassing all of Casino's off-balance sheet obligations (mainly put options). This all-in debt/EBITDAR ratio deteriorated slightly to 4.2x at FYE08 (FYE07: 4x) due to increased operating leases and increased value of the Monoprix put option at EUR1.2 billion at FYE08 (versus EUR850 million in FYE07). Fitch sees this adjusted leverage ratio high for the current rating but is reassured by the group's EUR1 billion asset disposal that should be completed by end-2010 and by the reduced capex to EUR800 million announced in March 2009. These measures should help improve its credit metrics over the next two years. Casino has adequate liquidity to meet its off-balance sheet obligations with cash and equivalent of about EUR1.5 billion (net of overdrafts) and undrawn bank facilities of about EUR2 billion as of FYE08. In Fitch's view, Casino's parent company, Rallye, presently has sufficient liquidity to service its debt obligation with no debt maturing in 2009. The agency does not expect Rallye to significantly constrain Casino's de-leveraging financial policy in the near term. The ratings could come under pressure if the group's overall operating performance in 2009 worsens more than in Q408, or if the group fails to improve its adjusted debt ratio. NATIXIS: Fitch Affirms Individual Rating at 'E' ----------------------------------------------- Fitch Ratings has revised the Support Rating Floors assigned to Credit Agricole (and its central body Credit Agricole S.A.), BNP Paribas, Societe Generale, Groupe Caisse d'Epargne (and its central body Caisse Nationale des Caisses d'Epargne et de Prevoyance) and Groupe Banque Populaire (and its central body Banque Federale des Banques Populaires) to 'A+' from 'A-' (A minus). The agency has simultaneously removed the Rating Watch Negative on GCE's, CNCE's, GBP's and BFBP's Long-term Issuer Default Ratings of 'A+', and upgraded GCE's, CNCE's, GBP's and BFBP's Short-term IDRs to 'F1+' from 'F1'. As a result of these rating actions, Fitch has also taken these rating actions in respect of the above-mentioned banks and their affiliates. BNP Paribas: -- Long-term IDR: affirmed at 'AA'; Negative Outlook -- Short-term IDR: affirmed at 'F1+' -- Individual Rating: affirmed at 'B' -- Support Rating: affirmed at '1' -- Support Rating Floor: revised to 'A+' from 'A-' (A minus) -- Senior debt: affirmed at 'AA' -- Subordinated debt: affirmed at 'AA-' (AA minus) -- Short-term debt: affirmed at 'F1+' BNP Paribas Capital Trust, Capital Trust III, Capital Trust IV and Capital Trust VI: -- Preferred stock: affirmed at 'AA-' (AA minus) BNP Paribas Public Sector SCF: -- Long-term IDR: affirmed at 'AA'; Negative Outlook -- Short-term IDR: affirmed at 'F1+' -- Support Rating: affirmed at '1' BNP Paribas Finance Inc: -- Commercial paper: affirmed at 'F1+' BNP Paribas US Medium Term Notes Program LLC: -- Senior debt: affirmed at 'AA' -- Short-term debt: affirmed at 'F1+' -- Subordinated debt: affirmed at 'AA-' (AA minus) Societe Generale -- Long-term IDR: affirmed at 'AA-' (AA minus); Negative Outlook -- Short-term IDR: affirmed at 'F1+' -- Individual Rating: affirmed at 'B/C' -- Support Rating: affirmed at '1' -- Support Rating Floor: revised to 'A+' from 'A-' (A minus) -- Senior debt: affirmed at 'AA-' (AA minus) -- Subordinated debt: affirmed at 'A+' -- Commercial paper: affirmed at 'F1+' -- Short-term debt: affirmed at 'F1+' SG Capital Trust I and III: -- Preferred stock: affirmed at 'A+' Societe Generale SCF: -- Long-term IDR: affirmed at 'AA-' (AA minus); Negative Outlook Credit Agricole: -- Long-term IDR: affirmed at 'AA-' (AA minus); Stable Outlook -- Short-term IDR: affirmed at 'F1+' -- Individual Rating: affirmed at 'B' -- Support Rating: affirmed at '1' -- Support Rating Floor: revised to 'A+' from 'A-' (A minus) Credit Agricole S.A.: -- Long-term IDR: affirmed at 'AA-' (AA minus); Stable Outlook -- Short-term IDR: affirmed at 'F1+' -- Support Rating: affirmed at '1' -- Support Rating Floor: revised to 'A+' from 'A-' (A minus) -- Senior debt: affirmed at 'AA-' (AA minus) -- Subordinated debt: affirmed at 'A+' -- Short-term debt: affirmed at 'F1+' CA Preferred Funding Trust I, II, & III: -- Preferred Stock: affirmed at 'A+' Groupe Caisse d'Epargne : -- Long-term IDR: affirmed at 'A+'; removed from RWN; assigned a Stable Outlook -- Short-term IDR: upgraded to 'F1+' from 'F1' -- Individual Rating: affirmed at 'C/D' -- Support Rating: affirmed at '1' -- Support Rating Floor: revised to 'A+' from 'A-' (A minus) Caisse Nationale des Caisses d'Epargne et de Prevoyance: -- Long-term IDR: affirmed at 'A+'; removed from RWN; assigned a Stable Outlook -- Short-term IDR: upgraded to 'F1+' from 'F1' -- Support Rating: affirmed at '1' -- Support Rating Floor: revised to 'A+' from 'A-' (A minus) -- Senior debt: affirmed at 'A+'; removed from RWN -- Dated subordinated debt: affirmed at 'A'; removed from RWN -- Undated subordinated debt: remain at 'BB+'; on RWN -- Commercial paper: upgraded to 'F1+' from 'F1' -- Senior ST notes: upgraded to 'F1+' from 'F1' Natixis: -- Long-term IDR: affirmed at 'A+'; removed from RWN; assigned a Stable Outlook -- Short-term IDR: upgraded to 'F1+' from 'F1' -- Individual Rating: affirmed at 'E' -- Support Rating: affirmed at '1' -- Senior debt: affirmed at 'A+'; removed from RWN -- Dated subordinated debt: affirmed at 'A'; removed from RWN -- Undated subordinated debt: remain at 'BB+'; on RWN -- Commercial paper: upgraded to 'F1+' from 'F1' -- Short-term notes: upgraded to 'F1+' from 'F1' -- Short-term guaranteed notes: upgraded to 'F1+' from 'F1' Natixis (Commitments Guaranteed by CDC): -- Senior notes: affirmed at 'AAA' -- CP: affirmed at 'F1+' Natixis (Commitments Guaranteed by CNCE): -- Senior notes: affirmed at 'A+'; removed from RWN NBP Capital Trust I: -- Preferred stock: Remain at 'BB+'; on RWN Credit Foncier de France: -- Long-term IDR: affirmed at 'A+'; removed from RWN; assigned a Stable Outlook -- Short-term IDR: upgraded to 'F1+' from 'F1' -- Individual Rating: affirmed at 'C' -- Support Rating: affirmed at '1' -- Senior notes: affirmed at 'A+'; removed from RWN -- Subordinated notes: affirmed at 'A'; removed from RWN -- Obligations foncieres of Compagnie de Financement Foncier are not impacted Banque Palatine: -- Long-term IDR: affirmed at 'A+'; removed from RWN; assigned a Stable Outlook -- Short-term IDR: upgraded to 'F1+' from 'F1' -- Individual Rating: affirmed at 'C' -- Support Rating: affirmed at '1' Groupe Banque Populaire: -- Long-term IDR: affirmed at 'A+'; removed from RWN; assigned a Stable Outlook -- Short-term IDR: upgraded to 'F1+' from 'F1' -- Individual Rating: affirmed at 'C/D' -- Support Rating: affirmed at '1' -- Support Rating Floor: revised to 'A+' from 'A-' (A minus) Banque Federale des Banques Populaires : -- Long-term IDR: affirmed at 'A+'; removed from RWN; assigned a Stable Outlook -- Short-term IDR: upgraded to 'F1+' from 'F1' -- Support Rating: affirmed at '1' -- Support Rating Floor: revised to 'A+' from 'A-' (A minus) -- Senior debt: affirmed at 'A+'; removed from RWN -- Dated subordinated debt: affirmed at 'A'; removed from RWN These GBP entities' Long-term IDRs of 'A+' have been removed from RWN and assigned Stable Outlooks respectively. Their Short-term IDRs have been upgraded to 'F1+' from 'F1': * Banque Populaire Atlantique * Banque Populaire Bourgogne, Franche-Comte * Banque Populaire Centre Atlantique * Banque Populaire Cote d'Azur * Banque Populaire d'Alsace * Banque Populaire de l'Ouest * Banque Populaire de Lorraine-Champagne * Banque Populaire des Alpes * Banque Populaire du Massif-Central * Banque Populaire du Nord * Banque Populaire du Sud * Banque Populaire du Sud-Ouest * Banque Populaire Loire et Lyonnais * Banque Populaire Occitane * Banque Populaire Provencale et Corse * Banque Populaire Rives de Paris * Banque Populaire Val-de-France * BRED - Banque Populaire * CASDEN - Banque Populaire * Credit Cooperatif * Groupe Credit Cooperatif * Credit Maritime Mutuel * Societe Centrale de Credit Maritime Mutuel The ratings of the GBP entities listed above are being maintained by Fitch as a service to investors. GBP did not participate in the rating process other than through the medium of its public disclosure. PERNOD RICARD: Sells Wild Turkey; Mulls EUR1 Bil. Rights Issue -------------------------------------------------------------- Pernod Ricard said on Wednesday it has signed a definitive agreement to sell its Wild Turkey American straight bourbon and related businesses to Gruppo Campari for a total purchase price of US$575 million to be paid in cash, or EUR433 million at current exchange rate, representing approximately 10 times the brand's historic contribution after advertising and promotion. The transaction includes the Wild Turkey brands, along with American Honey liqueur, distillery facilities in Kentucky and related assets, together with aged bulk bourbon inventory. It also provides that Pernod Ricard will continue to distribute the Wild Turkey brands in Australia and New Zealand, for a transitory period, and in Japan, the second largest non-US market, pursuant to distribution agreements with Campari. The transaction is subject to antitrust approvals and is expected to close in the second quarter. BNP Paribas and J.P. Morgan acted as financial advisors to Pernod Ricard and Debevoise & Plimpton LLP acted as legal advisor. The sale of Wild Turkey is an important part of the EUR1 billion disposal plan of non strategic assets communicated after the Vin & Sprit acquisition. With the disposals of Glendronach, Cruzan, Bisquit, as well as of the Serkova and Vin & Sprit brands sold at the request of the competition authorities, the overall disposal gross proceeds reach approximately EUR577 million as of Wednesday, April 8. The Group confirms its intention to complete this plan within 12 months. Rights Issue Pernod Ricard intends to raise EUR1 billion in equity capital by way of a rights issue ("augmentation de capital avec maintien du droit preferentiel de souscription") in order to enable existing shareholders to support the Group and preserve their interests. Proceeds will be used to pay down debt. The proceeds from the rights issue and the completion of the well- advanced non strategic assets disposal plan will allow the Group to strengthen its balance sheet and address the major part of its refinancing needs until July 2013. Besides, the rights issue will allow for quicker decrease of the Group's Net Debt /EBITDA ratio which will further reduce the syndicated loan margins. Societe Anonyme Paul Ricard and its subsidiary Lirix have confirmed their support to the rights issue and will subscribe through a cash-neutral transaction ("operation blanche"). Groupe Bruxelles Lambert has also signaled its confidence in the Group's outlook by indicating its intention to fully subscribe to its pro rata share of the rights issue. A group of banks is currently advising Pernod Ricard in connection with the rights issue, which it intends to launch as soon as possible, subject to both market conditions and agreement on final terms by the Board of Directors. It is also subject to the granting of a visa by the French market regulator AMF on the related prospectus. Full-year 2008/09 Dividend Policy In line with the objective of strengthening the capital structure, the Board of Directors intends to submit to the vote of the next annual general meeting of shareholders the following full-year 2008/09 dividend policy: * Overall pay-out to shareholders equivalent to a third of net income from recurring operations, in keeping with the Group's long-term dividend policy * Cash dividend per share of EUR0.50 to be paid in July 2009, equivalent to roughly 38% of the EUR1.32 dividend paid for the 2007/08 fiscal year. The remainder will be paid in the form of a free distribution of new shares issued through the capitalization of reserves, which will be proposed at the next annual shareholders' meeting. Organic Sales Growth As previously announced, Q3 2008/09 organic sales growth should be negative. As anticipated, growth was adversely impacted by one- off technical items: Chinese New Year's Eve being later in the year, increases in excise duties and a larger than anticipated de- stocking from our wholesalers and distributors. De-stocking is the result of wholesalers and distributors reducing inventories due to credit tightening but also due to Pernod Ricard's greater focus on receivable risk management. As a result, organic growth should be negative at around -13% for Q3 2008/09. This trend does not reflect demand from final consumers as measured by consumer panels . Indeed, those panels remained in line in 2009 with the trends observed during H1. In this context, Pernod Ricard aims for organic growth in profit from recurring operations of between +3% and +5% for the 2008/09 fiscal year (versus between +5% and +8% previously announced). The successful integration of Vin & Sprit, the accelerated implementation of synergies and an average cost of borrowing below 5% allow the Group to confirm its guidance of double-digit growth in Group net profit from recurring operations, which for the first time should exceed EUR1 billion over the full 2008/09 fiscal year, based on exchange and interest rates as of March 30, 2009. Pernod Ricard's target to achieve free cash flow from recurring operations of close to EUR1 billion over the full 2008/09 fiscal year is also confirmed. Pierre Pringuet, Chief Executive Officer, said: "Confirmation of our target for strong growth in net income despite current environment demonstrates Pernod Ricard�s resilient business profile". He added: "By accelerating its deleveraging plan, Pernod Ricard will enhance its financial flexibility for growth." About Pernod Ricard Headquartered in Paris, France, Pernod Ricard -- http://www.pernod-ricard.com/-- produces and distributes spirits and wines. The company operates in Europe, North America, Central and South America, and the Asia-Pacific region. * * * As reported in the Troubled Company Reporter-Europe on Feb. 25, 2009, Fitch Ratings affirmed French wine and spirit maker Pernod Ricard SA's Long-term Issuer Default Rating and senior unsecured rating at 'BB+' respectively. The Short-term IDR was affirmed at 'B'. The Long-term IDR's Outlook remains Negative. PERNOD RICARD: Rights Issue Impact Moderately Positive, Fitch Says ------------------------------------------------------------------ Fitch Ratings said French wine and spirit maker Pernod Ricard SA's (Pernod; BB+; Negative Outlook) planned rights issue of EUR1 billion, combined with progress in its asset disposal program and the decision to not pay in cash two thirds of the FY09 dividend, would have a moderately positive impact on its credit profile when completed. Fitch calculates that the EUR1 billion rights issue and a one-off EUR200 million cash saving on the FY09 dividend payment could improve Pernod's leverage (net debt/EBITDA) by approximately 0.5x. According to the agency's forecasts, this would bring forward by almost one year management's plan to de-leverage to 4.5x-5x by FYE10 and approximately 4x by FYE11. As of December 2008, Pernod had net debt of EUR13 billion, yielding an annualized and seasonally adjusted net debt/EBITDA of approximately 6x, a level which Fitch reiterates is incompatible with the current 'BB+' rating. "These measures represent a positive step by Pernod in the direction of achieving their net debt targets," said Giulio Lombardi, Senior Director in Fitch's European Retail, Leisure and Consumer Products Group. "However, the uncertainty surrounding the timing and success of the rights issue, which is currently not underwritten, and remaining asset disposals, combined with lower than expected 3Q09 trading results, are reflected in Fitch's existing concerns over Pernod's credit profile." In its latest affirmation of Pernod's rating on February 23, 2009, Fitch had said that "an additional factor underpinning the affirmation of Pernod's ratings is that management has reinforced its commitment to de-leverage and to achieve an investment-grade rating through the announcement in October 2008 of a EUR1 billion asset disposal program". While the announcement of the sale of the Wild Turkey brand for EUR433 million and the EUR1 billion rights issue confirm Pernod's commitment, Fitch remains concerned about the evolution of the company's profits amid subdued consumer confidence and disposable income. Over the past two quarters, these macroeconomic factors have contributed to a sharp de-stocking process by wholesalers in the important US market as well as stagnation in global consumption of the more profitable above-premium spirits, causing the two industry leaders, Diageo ('A'; Negative Outlook) and Pernod, to revise down their profit guidance for FY09. Fitch will reassess Pernod's credit profile when more details about the timing of the rights issue and its terms are confirmed. ============= G E O R G I A ============= * Fitch Affirms Individual Ratings on Four Georgian Banks --------------------------------------------------------- Fitch Ratings has placed the Long-term Issuer Default Ratings of four Georgian banks - ProCredit Bank (Georgia) (Long-term foreign currency IDR 'B+'), JSC VTB Bank (Georgia) ('B+'), Bank of Georgia ('B') and TBC Bank ('B') on Rating Watch Negative. The rating actions follow the placement of Georgia's sovereign Long-term foreign and local currency IDRs of 'B+' on RWN. The RWN on PCG's and VTBG's ratings reflects the potential for Georgian transfer and convertibility risks to increase, and therefore the Georgian Country Ceiling of 'B+' to be revised lower, together with a downgrade of the sovereign ratings. Higher transfer and convertibility risks and a lower Country Ceiling would indicate a weaker probability of these banks being able to utilise financial support from their majority shareholders in order to meet obligations to creditors. The IDRs of PCG and VTBG are driven by the potential for support from their majority owners: Germany's ProCredit Holding AG (Long-term IDR 'BBB-' (BBB minus)/Stable, Individual 'D'; 93.6% stake in PCG), and Russian state-controlled JSC VTB Bank (Long-term IDR 'BBB'/Negative, Individual 'C/D', 84.7% stake in VTBG). The RWN on the ratings of BOG and TBC reflect the risk that a sovereign downgrade would trigger a downgrade of these banks because of a weakening of the Georgian authorities' ability to provide support to them in case of need. Fitch also notes that material or prolonged political instability, which would increase risks to capital inflows and economic stability, would not only be likely to lead to a sovereign downgrade, but would also be negative for the banking sector. Additionally, Fitch is concerned about deteriorating asset quality and the high level of foreign currency lending at both BOG and TBC. However, Fitch also notes the banks' currently reasonable capital and liquidity positions. As a result, the agency does not preclude the possibility of affirming the Long-term IDRs of BOG and TBC even if the sovereign is downgraded to 'B'. Fitch will resolve the RWN on the four banks referenced in this commentary after the resolution of the RWN on the sovereign and a review of the financial positions of BOG and TBC at that time. Rating actions: ProCredit Bank (Georgia) -- Long-term foreign currency IDR of 'B+' put on RWN -- Long-term local currency IDR of 'BB-' (BB minus) put on RWN -- Short-term foreign and local currency IDRs affirmed at 'B' -- Support Rating affirmed at '4' -- Individual Rating affirmed at 'D' JSC VTB Bank (Georgia) -- Long-term foreign currency IDR of 'B+' put on RWN -- Short-term foreign currency IDR affirmed at 'B' -- Support Rating affirmed at '4' -- Individual Rating affirmed at 'D/E' Bank of Georgia -- Long-term foreign and local currency IDRs of 'B' put on RWN -- Senior unsecured debt rating of 'B' put on RWN; Recovery Rating at 'RR4' -- Support Rating Floor of 'B' put on RWN -- Support Rating of '4' put on RWN -- Short-term foreign and local currency IDRs affirmed at 'B' -- Individual Rating affirmed at "D" TBC Bank -- Long-term foreign currency IDR of 'B' put on RWN -- Support Rating Floor of 'B' put on RWN -- Support Rating of '4' put on RWN -- Short-term foreign currency IDR affirmed at 'B' -- Individual Rating affirmed at 'D' ============= G E R M A N Y ============= KARMANN: Files for Insolvency, Can't Fund Massive Layoff Plan ------------------------------------------------------------- Christiaan Hetzner at Reuters reports Osnabrueck, Germany-based independent contract carmaker and cabrio roof-top specialist Karmann has filed for insolvency as it could not pay for a massive layoff plan agreed with labor representatives. The report notes that while the company presented a restructuring plan in September 2008, deteriorating finances made it unable to pay for a wave of 2,240 layoffs, half of its 4,460 German workers. The company, as cited by the report, said "The sheer unexpected drop in revenue led to the inability to finance the social plan that was agreed with labor representatives." The company, the report discloses, generated revenue of EUR1.3 billion (US$1.72 billion) last year. However, a spokesman said operations would continue at the company since it had virtually no bank debt, the report discloses. The report relates Karmann said in a staement "Together with the court-appointed insolvency administrator, the goal will be to lead the newly structured Karmann corporate group into a secure future and save as many jobs as possible." MASCHINENFABRIK EXNER: Claims Registration Period Ends May 28 ------------------------------------------------------------- Creditors of Gesellschaft mit beschrankter Haftung have until May 28, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 8:50 a.m. on June 22, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Bochum Hall A29 Ground Floor Main Building Viktoriastrasse 14 44787 Bochum 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: Manfred Gottschalk Kirchender Dorfweg 14 58313 Herdecke Germany The court opened bankruptcy proceedings against the company on April 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Maschinenfabrik Exner Gesellschaft mit beschrankter Haftung Ruesbergstr. 74 58456 Witten Germany Attn: Magdalene Kienle und Werner Kienle MEDIENHAUS MINTZEL: Claims Registration Period Ends May 29 ---------------------------------------------------------- Creditors of Medienhaus Mintzel-Muench GmbH have until May 29, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 1:15 p.m. on June 30, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Hof Meeting Room 012 Ground Floor Berliner Place 1 95030 Hof 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: Prof. Dr. Bernd Schneiderbanger Kreuzsteinstrasse 41 95028 Hof Germany Tel: 09281/71550 Fax: 09281/715555 The court opened bankruptcy proceedings against the company on April 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Medienhaus Mintzel-Muench GmbH Attn: Peter Glasslen, Manager Oberer Torplatz 1 95028 Hof Germany MUREK FASHION: Claims Registration Period Ends May 15 ----------------------------------------------------- Creditors of Murek Fashion Verwaltungs GmbH have until May 15, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 11:40 a.m. on June 8, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Hamburg Hall B 405 Fourth Floor Annex Civil Justice Bldg. Sievkingplatz 1 20355 Hamburg 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: Reinhard Titz Gertrudenstrasse 3 20095 Hamburg Germany The court opened bankruptcy proceedings against the company on April 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Murek Fashion Verwaltungs GmbH Modering 3 22457 Hamburg Germany Attn: Heiner Boss, Manager Jenischstrasse 29 22609 Hamburg Germany NOVUM STAHLVERARBEITUNGS: Claims Registration Period Ends May 14 ---------------------------------------------------------------- Creditors of Novum Stahlverarbeitungs Gmbh have until May 14, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on June 4, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court Muenster Meeting Hall 112 B Gerichtsstr. 2-6 48149 Muenster 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. Norbert Kuepper Paderborner Str. 11 33415 Verl Germany Tel: 05246/9275-0 Fax: +495246927511 The court opened bankruptcy proceedings against the company on April 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Novum Stahlverarbeitungs Gmbh Bunsenstrasse 17-19 59229 Ahlen Germany Attn: Mario Scholz Speckenstrasse 51 59302 Oelde Germany PAGODA CENTRO: Claims Registration Period Ends May 14 ----------------------------------------------------- Creditors of Pagoda Centro GmbH have until May 14, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on June 22, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Duisburg Hall C407 Kardinal-Galen-Strasse 124-132 47058 Duisburg 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: Thomas Schmitz Am Flohbusch 1 47802 Krefeld Germany The court opened bankruptcy proceedings against the company on April 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Pagoda Centro GmbH Promenade 70 46047 Oberhausen Germany Attn: Chao Hui Yeh, Manager Martin-Luther-Ring 118 47447 Moers Germany PANGA DEUTSCHLAND: Claims Registration Period Ends April 25 ----------------------------------------------------------- Creditors of Panga Deutschland GmbH have until April 25, 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 May 13, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Duesseldorf Meeting Hall A 341 Fourth Floor Muehlenstrasse 34 40213 Duesseldorf 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. Paul Fink Koenigsallee 33 40212 Duesseldorf Germany The court opened bankruptcy proceedings against the company on April 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Panga Deutschland GmbH Ronsdorfer Strasse 74 40233 Duesseldorf Germany Attn: Nedeljko Zjacic, Manager Ulenbergstrasse 101 40225 Duesseldorf Germany SSW SCHICHAU: Investors Submit Rescue Plan ------------------------------------------ Lloyd's List reports that a group of investors has put forward a rescue plan for SSW Schichau Seebeck Shipyard GmbH. According to the report, SSW owners Dieter Petram and Karl Ehlerding, and Bremerhaven-based steel construction company Roenner, are preparing a bid in order to convert the yard into a steel construction firm. "We are in negotiations with the insolvency administrator at the moment," the report quoted Lloyd Werft managing director Werner Lueken as saying. The report recalls the shipyard, which employs 320 people, filed for bankruptcy in January 2009 under massive debts. Citing Uwe Lissau, president of Bremerhaven's local court, where the insolvency proceedings have been opened, the report discloses under the new plan, SSW co-owner Karl-Heinz Jahncke will leave, while Mr. Ehlerding, Roenner and Lloyd Werft will take over a quarter stake each. Mr. Lissau, as cited by the report, said the yard's employees will be moved to a transitional company, where they will be trained for their new tasks. The report notes according to Mr. Lissau, the agreement had been reached on most points of the rescue plan for SSW. Creditors have to agree to the plan in a meeting on May 25, the report states. Headquartered in Bremerhaven, Germany, SSW Schichau Seebeck Shipyard GmbH -- http://www.schichau-seebeck-shipyard.com/-- specializes in building ferries, roll-on/roll-off ships and cruise liners as well as container and special purpose ships. TUI AG: Moody's Downgrades Corporate Family Rating to 'B2' ---------------------------------------------------------- Moody's Investors Service has lowered to B2 from B1 the Corporate Family Rating and Probability of Default Rating and to Caa1 from B3 the subordinated rating of TUI AG. The B3 senior unsecured rating is confirmed. The outlook is negative. The rating action follows the company's recent divestment of its Hapag-Lloyd shipping arm to a consortium for a total cash inflow of EUR1.6 billion, after factoring in TUI AG's retention of a 43.3% stake in Hapag-Lloyd at a cost of about EUR900 million. TUI AG has further made available credit lines of up to EUR1.1 billion with different maturities of up to three years to the consortium that is acquiring Hapag-Lloyd, of which EUR700 million have been drawn. As such, the immediate cash inflow from the transaction is lower than had originally been anticipated, while TUI AG retains a put option on its remaining stake that can be exercised as of 2012. Moody's notes that TUI AG will retain only a minority interest in both its travel and shipping subsidiaries, but majority voting rights in TUI Travel, which will therefore continue to be consolidated in TUI AG's accounts. As such, Moody's believes that TUI AG will be more characteristic of a holding company, but notes that the company has at its discretion, among other options, the ability to use some of the proceeds from the Hapag-Lloyd divestment to reinvest in the TUI Travel subsidiary and regain its majority ownership. Moody's believes that on a consolidated basis, the group will continue to exhibit high leverage for the rating category, as Moody's estimate net debt/EBITDA to be close to 7x on a pro-forma basis after the transaction. However, Moody's recognizes that the metrics for 2008 are impacted by significant restructuring costs for the integration of First Choice into TUI Travel which are not expected to be recurring. From a liquidity perspective, Moody's notes that the transaction will benefit TUI AG's cash position in the short-term, with the EUR1.2 billion cash balance at the holding company at FYE 2008 being supplemented by an EUR900 million cash inflow after intercompany loans, leaving a cash balance at the holding company of EUR2.1 billion. Over the longer-term, however, the rating is constrained by the significant debt maturities in coming years at the holding company level, with limited access to cash flows at subsidiaries. Moody's notes, further, that the holding company's longer-term liquidity profile will depend on the repayment of intercompany loans outstanding (EUR1.1 billion to Hapag-Lloyd and its acquiring consortium and EUR1 billion to TUI Travel), as well the put option to the consortium as of 2012. As such, Moody's will continue to monitor the performance of the shipping division in its assessment of TUI AG's credit profile. Finally, Moody's will monitor the use of proceeds from the recent divestment of Hapag-Lloyd in terms of debt reduction or reinvestment possibilities, as stipulated under the terms of TUI AG's bonds, and the impact of this from a bondholder's perspective. Under the current group structure and the fact that there currently exists no cross default between the holding and operating companies, Moody's no longer applies its Loss Given Default methodology to TUI AG. The differential between the B2 Corporate Family and Probability of Default Ratings and the senior unsecured and subordinated ratings, at B3 and Caa1, respectively, reflects the high level of indebtedness at the holding company and Moody's view that the bonds retain limited access to cash flows at the subsidiaries. Moody's notes that if TUI were to regain majority ownership of TUI Travel plc, that entity would once again become subject to the conditions of TUI AG's bonds in terms of limitations on the subsidiary's ability to assume debt. The negative outlook reflects mainly the group's high leverage, and Moody's view that the industry outlook for both divisions remains challenging, in particular for shipping. The outlook could be stabilised if the consolidated group were to show a clear trend towards deleveraging, with gross leverage falling below 6.5x, with a concurrent improvement in the longer-term liquidity outlook of the holding company. A deteriorating earnings trend, or a weakening in the liquidity profile, possibly as a result of a delay in the receipt of outstanding inter-company loans, would likely cause negative pressure on the ratings. TUI AG' ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of TUI AG' core industry and TUI AG's ratings are believed to be comparable to those of other issuers of similar credit risk. The last rating action for TUI AG was implemented on 13 October 2008, when the ratings were placed under review for possible downgrade. TUI, headquartered in Hanover, Germany, is Europe's largest integrated tourism group, and currently retains a 43.3% stake in Hapag-Lloyd, which is a leading provider of container shipping services. In 2008, the group reported revenues and underlying EBITA of EUR24.9 billion and EUR759 million, respectively. Tourism accounted for about 75% of revenues, and shipping and other activities for the remainder. ============= I C E L A N D ============= TRYGGINGAMIDSTODIN HF: S&P Retains Negative Watch on 'BB' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services commented on its CreditWatch placement of Iceland-based insurer Tryggingamidstodin hf. The 'BB' long-term counterparty credit and insurer financial strength ratings remain on CreditWatch with negative implications. The ratings were originally placed on CreditWatch with negative implications on Oct. 7, 2008, following the application by TM's parent company, Stodir hf. (not rated), for bankruptcy protection. This was initially granted up until October 20, but has since been granted two periods of extension, the most recent of which expired on April 6. Standard & Poor's considers that uncertainties still remain over TM's future ownership and financial position. S&P understands that on April 6, Stodir obtained permission from the Reykjavik courts to reach an agreement with its creditors. S&P is unable to predict with any certainty how long this process will take, although upon its conclusion S&P expects to have enough information to enable us to resolve the CreditWatch status and the extent of any possible downgrade. In the case of TM's subsidiary, Norway-based non-life insurer, NEMI Forsikring ASA, the 'BB' long- term counterparty credit and insurer financial strength ratings remain on CreditWatch with developing implications. S&P understands that regulatory approval for NEMI's acquisition by Copenhagen-based insurer Alpha Group (not rated) is imminent and S&P expects to make a further announcement shortly. S&P will continue to monitor developments closely and take actions as appropriate. * ICELAND: Gov't Welcomes UK's Icelandic Banking Crisis Report -------------------------------------------------------------- The Icelandic government has welcomed the Treasury Committee report on the banking crisis and considers it to be a meaningful contribution to the explanation of the events in October. Johanna Siguroardottir, the Prime Minister of Iceland, has written to Gordon Brown the Prime Minister of the UK, asking for his reactions to findings in the Treasury Commmittee report on the actions taken by the UK government early October when the Icelandic banks collapsed. The Freezing Order, issued by the UK government on 8 October 2008 on the authority of the UK Anti- Terrorism, Crime and Security Act 2001, freezes certain funds relating to Landsbanki, including those owned, held or controlled by the Icelandic Government and authorities. Later the UK authorities effectively took over Kaupthing Singer&Friedlander, a subsidiary of Kaupthing, put the bank into administration and transferred most of its retail deposits to the Dutch bank, ING. The House of Commons Treasury Committee published its first report on the banking crisis on April 4. The report: Banking Crisis: The impact of the failure of the Icelandic banks -- Treasury Contents, notes that the use of the Anti-Terrorism, Crime and Security Act 2001 was too strong an instrument to use against Iceland and the Icelandic banks at the beginning of the banking crisis. Furthermore, the report goes on to critcize the behavior of the Chancellor of the Exchequer in relation to Iceland. The report states: "The use of the Anti-Terrorism, Crime and Security Act 2001 had considerable implications for the Icelandic authorities in maintaining a functioning financial system. We call on the Treasury to consider how appropriate the use of this legislation would be in any similar circumstances in the future. The use of this Act inevitably stigmatises those subject to it and a less blunt instrument would be more appropriate." The committee also examined the conversation between the two finance ministers, Mr. Mathiesen of Iceland and Mr. Darling of the UK, and said it had found no evidence to back Mr. Darling's allegations that his Icelandic counterpart had said that the Icelandic government would not honor its obligations and therefore it would be necessary to apply the Security Act against Icelandic interests. The Icelandic government has welcomed the report and considered it to be a meaningful contribution to the explanation of the events in October. According to Mr. S.J.Sigfusson, minister of finance, addressing the Icelandic Parliament, Althingi, the report would possibly make it less difficult to get the now state-run bank Landsbanki removed from the HM Treasury's list of regimes subjected to financial sanction by the British government, which also includes Al-Qaida, the Taliban and North Korea. The committee also notes that there migth be flaws in European banking law, referring to issues surrounding the cross-border regulation of financial institutions. The report says: "Our Banking Crisis inquiry, and specifically the problem of the failure of the Icelandic banks, has raised issues surrounding the cross-border regulation of financial institutions. Considerable taxpayer support has been required to provide rapid compensation to onshore UK depositors in Icelandic banks that 'passported' into the UK. This area of European law requires further consideration, and we will return to this topic in our future inquiry onto the banking crisis within its international context, with specific reference to the regulation of subsidiaries and branches of cross- border financial institutions." ============= I R E L A N D ============= ALLIED IRISH: Fitch Puts 'D' Individual Rating on Negative Watch ---------------------------------------------------------------- Fitch Ratings has downgraded Allied Irish Banks' and Bank of Ireland's Long-term Issuer Default Ratings to 'A-' (A minus) from 'A'. This follows the downgrade of the Long-term IDR of the Republic of Ireland to 'AA+' from 'AAA' and the assignment of a Negative Outlook. The agency has also revised down AIB's and BoI's Support Rating Floors to 'A-' (A minus) from 'A'. At the same time, Fitch has placed AIB's Individual Rating of 'D' and BoI's Individual Rating of 'C/D' on Rating Watch Negative. Fitch has also downgraded the banks' subordinated debt and hybrid instrument ratings while maintaining the latter's ratings on RWN. At the same time, the agency has affirmed the banks' other ratings. AIB's and BoI's Support Rating Floors continue to reflect the high probability of support from the Irish financial authorities, should it be further required. AIB's and BoI's Short-term IDRs reflect the guarantee provided by the Irish government for all non-hybrid funding. This guarantee is in place until September 2010. The RWN on the banks' Individual Rating reflects Fitch's expectation that the two banks might see larger losses in the current financial year when certain commercial property loans are transferred to Ireland's National Asset Management Agency at a discount. Although the transfer of assets to NAMA should give greater certainty about the banks' asset quality and potential impact on their profitability going forward, this might result in an acceleration of credit losses potentially exceeding the banks' pre-impairment operating profit in the current financial year and probably absorbing some of the banks' capital. As a result, Fitch believes that further capital injections on top of the combined EUR7 billion already received may be needed. The agency will examine over the coming weeks the size of the potential losses and therefore to what extent the banks' profitability and capital might be impacted. The Individual Ratings also reflect the banks' strong domestic franchises benefiting from stable retail deposits. However, Fitch expects further deterioration in the asset quality of the banks' residential mortgage and corporate loans books due to weaker prospects of the Irish economy and rapidly rising unemployment which will put the banks' profitability under continuing pressure. The downgrade of both banks' preference shares and AIB's upper tier two notes and the RWN reflect the increasing possibility of coupon deferral especially in light of the larger-than-anticipated credit losses following the asset transfer to NAMA. In view of the banks' expected losses and the relatively large size of the coupon payments Fitch has concerns about the banks' ability to pay the coupons on the preference shares. However, the agency notes that AIB and BoI have expressed their intention to continue paying coupons. AIB and BoI are the two largest banks in Ireland providing a wide range of financial services to retail and corporate customers. Both banks have a large market share in retail deposits. However, AIB has been more active in property lending than its slightly smaller rival, BoI. Allied Irish Banks plc -- Long-term IDR downgraded to 'A-' (A minus) from 'A'; Stable Outlook -- Senior debt downgraded to 'A-' (A minus) from 'A' -- Government-guaranteed notes downgraded to 'AA+' from 'AAA', removed from RWN -- Short-term IDR affirmed at 'F1+' -- Individual rating 'D' placed on RWN -- Support rating affirmed at '1' -- Support Rating Floor revised to 'A-' (A minus) from 'A' -- Subordinated debt downgraded to 'BBB+' from 'A-' (A minus) -- Upper tier 2 debt downgraded to 'B+' from 'BB+'; remains on RWN -- Preference shares downgraded to 'B' from 'BB'; remain on RWN AIB Bank (CI) Limited -- Long-term IDR downgraded to 'A-' (A minus) from 'A'; Stable Outlook -- Short-term IDR affirmed at 'F1+' -- Individual rating 'D' placed on RWN -- Support rating affirmed at '1' AIB Group (UK) plc -- Long-term IDR downgraded to 'A-' (A minus) from 'A'; Stable Outlook -- Short-term IDR affirmed at 'F1+' -- Individual rating 'D' placed on RWN -- Support rating affirmed at '1' Bank of Ireland -- Long-term IDR downgraded to 'A-' (A minus) from 'A'; Stable Outlook -- Senior debt downgraded to 'A-' (A minus) from 'A' -- Government-guaranteed notes downgraded to 'AA+' from 'AAA'; removed from RWN -- Short-term IDR affirmed at 'F1+' -- Individual rating 'C/D' placed on RWN -- Support rating affirmed at '1' -- Support Rating Floor revised to 'A-' (A minus) from 'A' -- Subordinated debt downgraded to 'BBB+' from 'A-' (A minus) -- Preference shares downgraded to 'B' from 'BB'; remain on RWN CAIRN HIGH: S&P Junks Ratings on Three Classes of Notes ------------------------------------------------------- Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on the class A1, A2, B, and C notes, and its principal-only rating on the class E notes issued by Cairn High Grade ABS CDO I PLC, a cash flow collateralized debt obligation of asset-backed securities transaction that closed in August 2005. The rating actions follow a full review of the transaction including a cash flow analysis, which took into account S&P's assessment of the continued credit deterioration of the assets that S&P has observed in the transaction's underlying portfolio and the breach of certain transaction-specific tests. According to information provided to us by the trustee, the transaction currently fails the class A/B and the class C/D overcollateralization test ratios set out in the transaction documents. Both overcollateralization test results are currently below 100%, implying that the portfolio's adjusted par value is lower than the total principal amount outstanding of the class A1, A2, B, C, and D notes. The class D notes are unrated. The portfolio's par value, used to calculate the overcollateralization test, is reduced by adjustments applied to the par value of defaulted assets and certain other assets, such as those rated 'BB+' or lower and those purchased at prices below 97% of face value. The portfolio is comprised primarily of U.S. prime and subprime residential mortgage-backed securities, and to a lesser extent U.S. collateralized loan obligations, U.S. Trust Preferred CDOs, U.S. CDOs of ABS, and U.S. student loans. Based on the asset ratings that S&P consider appropriate in S&P's analysis, 15% of the portfolio is currently rated 'CCC+' or lower, of which 6% is rated 'CC'. Assets on CreditWatch negative comprise 32% of the total portfolio. In S&P's opinion, the deterioration in the portfolio's credit quality has led to an increase in the scenario default rates. At the same time, S&P's cash flow analysis indicates that break- even default rates for all rated classes have fallen. In S&P's view, SDRs have risen and break-even default rates have fallen to levels that are no longer consistent with the ratings previously assigned to the class A1, A2, B, C, and E notes, and S&P has therefore lowered their ratings. Ratings List Cairn High Grade ABS CDO I PLC US$1 Billion Floating-Rate Notes Ratings Lowered and Removed From CreditWatch Negative Rating ------ Class To From ----- -- ---- A1 CCC- AA-/Watch Neg A2 CC BBB+/Watch Neg B CC BB-/Watch Neg C CC CCC+/Watch Neg E CCp CCC-p/Watch Neg IRIS SPV: S&P Raises Rating on US$15 Mil. Notes from 'BB-' ---------------------------------------------------------- Standard & Poor's Ratings Services raised to 'A+' from 'BB-' and removed from CreditWatch negative its credit rating on the US$15 million Avon Ridge 2006-1 floating-rate credit-linked notes series 3/2006 issued by Iris SPV PLC. This rating action follows an upward revision to the attachment point for these notes, which is now sufficient, in S&P's opinion, to support an 'A+' rating. * Moody's Takes Multiple Rating Actions on 12 Irish Banks --------------------------------------------------------- Moody's Investors Service has taken multiple rating actions on 12 Irish banks. Moody's has been incorporating expected losses on bank loan portfolios into its ratings for some time. However, it has considerably increased those expectations because of the continuing deterioration in the outlook for commercial real estate prices, the likelihood of more corporate defaults as the Irish economy enters a deep recession, and the current erosion in residential loan performance, including the buy-to-let mortgages that account for around 25% of the Irish market. "We believe that these losses are likely to significantly weaken the capital positions of most Irish banks and building societies over the next two years" said Ross Abercromby, Vice President/Senior Analyst and lead analyst at Moody's for the Irish banks. Moody's rating actions are based on the view that the global economic crisis will lead to significantly higher credit losses than previously anticipated, as well as a refinement to Moody's approach to rating banks in the current environment. Although Moody's Bank Financial Strength Rating methodology remains unchanged, the weight attached to certain rating considerations, particularly capital and future earnings prospects, has been increased to better reflect the present conditions. Impact of The National Asset Management Agency A key risk to the Irish banks in the current environment is their large exposures to residential and commercial development, given the substantial reduction in asset prices and even higher falls in land values. As a result of this, the Irish government has announced that it will establish, subject to European Commission State aid approval, a "National Asset Management Agency"; this entity will be an asset management company that property development assets will be transferred to, removing them from the banks' balance sheets. It is estimated that up to EUR90 billion of development loans, and certain property investment loans, including those outside Ireland, will be shifted to NAMA. The loans will be transferred at a written-down value, and the banks will receive either government bonds or government guaranteed bonds in return for the loans. Moody's believe that the main beneficiaries of this new support scheme will be Allied Irish Banks and Bank of Ireland, although other entities will be eligible to participate. Rating Actions The rating actions incorporate the expected losses on other asset classes, including residential and commercial mortgages in an extremely challenging economic environment, as well as the agency's revised support assumptions. Moody's support assumptions are in line with Moody's expectation for banks in highly rated countries receiving, (or that are expected to receive) systemic support. (i) Allied Irish Banks: The BFSR has been downgraded to D with a developing outlook, from C negative outlook; the Aa3/P-1 senior debt & deposit and the A1 subordinated debt ratings were affirmed and the junior subordinated debt ratings were downgraded to A2 from A1, all with a negative outlook; preference shares and Tier 1 hybrids were downgraded to B1 from A2, with a developing outlook. (ii) Bank of Ireland: The BFSR has been downgraded to D with a developing outlook, from C negative outlook; the Aa3/P-1 senior debt & deposit and the A1 subordinated debt ratings were affirmed and the junior subordinated debt ratings were downgraded to A2 from A1, all with a negative outlook; preference shares and Tier 1 hybrids were downgraded to B1 from A2, with a developing outlook. (iii) ICS Building Society: The BFSR has been downgraded to D with a developing outlook, from C negative outlook; the A1/P-1 deposit ratings were affirmed. (iv) EBS Building Society: The BFSR has been downgraded to D with a developing outlook, from C- negative outlook; the A2/P-1 senior debt and deposit ratings were affirmed and the A3 subordinated debt rating was affirmed, all with a negative outlook; preferred stock was downgraded to B1 from Baa1, with a developing outlook. (v) Irish Life & Permanent: The BFSR has been downgraded to D with a negative outlook, from C, on review for possible downgrade; the A1/P-1 senior debt & deposit and the A2 subordinated debt ratings were affirmed, and the junior subordinated debt ratings were downgraded to A3 from A2, all with a negative outlook. (vi) Ulster Bank Limited: The BFSR has been downgraded to D, on review for possible downgrade, from C negative outlook; the A1/P-1 deposit ratings were downgraded to A2/P-1, on review for possible downgrade. (vii) Ulster Bank Ireland: The BFSR has been downgraded to D, on review for possible downgrade, from C negative outlook; the A1/P-1 senior debt & deposit ratings were downgraded to A2/P-1, on review for possible downgrade. (viii) First Active: The BFSR has been downgraded to D, on review for possible downgrade, from C negative outlook; the A1/P-1 senior debt & deposit ratings were downgraded to A2/P-1, and the subordinated debt rating to A3 from A2, all on review for possible downgrade. (ix) Bank of Scotland (Ireland): The BFSR has been downgraded to D, on review for possible downgrade, from C- stable outlook; the A2/P-1 deposit ratings are on review for possible downgrade. (x) KBC Bank Ireland: The BFSR has been downgraded to D- with a negative outlook, from C- stable outlook; the A2/P-1 senior debt & deposit ratings and the A3 subordinated debt rating was downgraded to Baa2/P-2 and Baa3, and the junior subordinated debt rating was downgraded to Ba1 from A3, all with a negative outlook. (xi) Irish Nationwide Building Society: The BFSR has been downgraded to E+ with a negative outlook, from D- negative outlook; the Baa3/P-3 senior debt & deposit ratings and Ba1 subordinated debt ratings were affirmed, all with a negative outlook. (xii) Zurich Bank: The BFSR has been downgraded to D- with a negative outlook, from D stable outlook; the A1/P-1 deposit ratings were affirmed, as was the A2 senior debt rating and the A3 subordinated debt rating. The outlook is stable. Downgrades and Reviews for Downgrade on Bank Financial Strength Ratings The BFSRs of Allied Irish Banks, Bank of Ireland, and EBS Building Society were downgraded to D (mapping to a baseline credit assessment - "BCA" - of Ba2), with a developing outlook. This reflects Moody's increased loss expectations as detailed above, and it is consistent with Moody's definition that a bank with a D BFSR may need periodic outside support. The developing outlook on these institutions incorporates the extremely challenging economy, as well as the uncertainties around how the establishment of NAMA will affect the capital bases and ongoing profitability of the institutions. The BFSR of Bank of Ireland's mortgage lending subsidiary ICS Building Society was also downgraded in line with its parent. The downgrades of the BFSRs of Irish Life & Permanent to D (BCA: Ba2), negative outlook, and of KBC Bank Ireland to D- (BCA: Ba3), negative outlook, are based on Moody's opinion that credit losses on residential mortgages, including buy-to-let (to which both institutions have a large exposure), will likely be substantially higher than previously anticipated as the unemployment rate in Ireland continues to increase rapidly. However, the BFSR of IL&P benefits from its strong position in the life assurance market through Irish Life, the market leader, and this diversification is an important element in the D BFSR. The negative outlook also indicates Moody's expectation that IL&P will not benefit to the same extent as other institutions from the establishment of NAMA, as well as the increasing dependence on ECB funding. KBC Bank Ireland's exposure to the Irish corporate market may lead to further stress on profitability and provisioning as the economy deteriorates further. The negative outlook on KBC Bank Ireland's BFSR also reflects continuing concerns over the funding profile that is increasingly dependent on its Belgian parent. The rating action on IL&P concludes the review for possible downgrade on the BFSR initiated on February 17, 2009. The downgrade of the BFSR of Irish Nationwide Building Society to E+ (BCA: B3) is a result of Moody's view that losses on commercial real estate and development finance will continue to increase; in the current environment, Moody's believe it will be difficult for the society to generate enough capital to cover the expected increased loan losses. As Moody's have highlighted previously, the high concentration risk within the portfolio also remains a key concern. The outlook remains negative. The downgrades of the BFSRs of Bank of Scotland (Ireland) and of Ulster Bank and its two subsidiaries, Ulster Bank Ireland and First Active to D (BCA: Ba2), are based on Moody's view that the increased loan losses are likely to put substantial downward pressure on the stand-alone creditworthiness of the banks, especially given their relatively light capitalization. The BFSRs also remain on review for possible downgrade. These reviews will focus on the ability of the banks to place assets in the UK's Asset Protection Scheme through the respective ultimate parents, Royal Bank of Scotland and Lloyds Banking Group, and how the mechanics of this scheme will affect the BOSI and Ulster Bank legal entities. The downgrade of the BFSR of Zurich Bank to D- (BCA: Ba3) is also a result of Moody's view that losses on commercial real estate and development finance will continue to increase; in the current environment, Moody's believe that it will be difficult for the bank to generate enough capital to cover the likely increase in loan losses. The outlook remains negative. Limited Impact on Bank Deposit and Senior Debt Ratings The bank deposit and senior debt ratings of Allied Irish Banks (Aa3/P-1, negative outlook), Anglo Irish Bank (A2/P-1, negative outlook), Bank of Ireland (Aa3/P-1, negative outlook), EBS Building Society (A2/P-1, negative outlook), ICS Building Society (A1/P-1, negative outlook), Irish Life & Permanent (A1/P-1, negative outlook), Irish Nationwide Building Society (Baa3/P-3, negative outlook), and Zurich Bank (A1/P-1, stable outlook) were affirmed. These actions are generally consistent with Moody's expectation for banks in highly rated countries receiving, (or that are expected to receive) systemic support. . The A2/P-1 bank deposit and senior debt ratings of Bank of Scotland (Ireland) have been placed on review for possible downgrade in line with the review on its BFSR. If the BFSR is downgraded, it is likely that the deposit ratings would also move down. The long-term bank deposit and senior debt ratings of Ulster Bank and its subsidiaries have been downgraded to A2 from A1, and they remain on review for possible downgrade. The Prime-1 short-term rating is also placed on review for possible downgrade. These actions again reflect the fact that, if the BFSR were to be downgraded, then it is likely that the deposit ratings would also move down. The bank deposit and senior debt ratings of KBC Bank Ireland were downgraded to Baa2/P-2 from A2/P-1. This is a result of the weaker BFSR; although mitigated to a certain degree by the high level of parental support from Belgium's KBC Bank that is incorporated into the rating, this leads to deposit ratings of Baa2/P-2. For Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, and EBS and Irish Nationwide Building Societies, the senior and dated subordinated debt covered by the Irish government guarantee maturing prior to September 29 2010, rated Aaa with a negative outlook, is unaffected by this action. Downgrade of Subordinated and Hybrid Debt In its Special Comment dated December 2008, Moody's began a dialogue with market participants regarding a potential change to its bank hybrid notching practices. The proposal explores the possibility of removing systemic support from bank hybrid ratings, and it considered wider notching based on the hybrid's risk characteristics. This process continues for banks generally, but as Moody's noted in its Special Comment, subordinated and hybrid ratings will be adjusted as appropriate, should circumstances warrant. Moody's ratings on banks' subordinated and hybrid securities generally reflect the assumption that, if a government extends financial support to a bank in difficulty, that support would also benefit subordinated and hybrid investors. As has been observed in the case of Anglo Irish Bank, however, systemic support does not always include supporting certain hybrid or Tier 1 instruments. In light of the heightened potential for restructuring of banks in Ireland, as highlighted by the actions detailed above on the BFSRs, Moody's believes that potential losses to hybrid and Tier 1 investors are more closely aligned to the bank's BFSR. Given the current Irish government guarantee on dated subordinated debt (for the six rated institutions covered under the guarantee), and acknowledging Moody's current guidelines for rating junior securities, Moody's will continue to notch the ratings of Irish banks' subordinated and junior subordinated debt from the supported senior debt rating. Subordinated debt will continue to be rated one notch below the senior debt rating, whereas the notching of junior subordinated debt is widened to two notches. Moody's view is that systemic support for hybrid and Tier 1 instruments in Ireland is likely to be lower in the future, however, so the anchor for the notching of these instruments will be the baseline credit assessment, which maps from the intrinsic strength of the bank as indicated by Moody's published Bank Financial Strength Rating. The actual notching for hybrid and Tier 1 instruments from the BCA is two notches. The junior subordinated or hybrid instruments of these institutions have been affected by this action: * Allied Irish Banks - Junior subordinated debt downgraded to A2 from A1, and preference shares and tier 1 hybrids downgraded to B1 from A2. Outlook is developing in line with the BFSR. * Bank of Ireland - Junior subordinated debt downgraded to A2 from A1, and preference shares and tier 1 hybrids downgraded to B1 from A2. Outlook is developing in line with the BFSR. * EBS Building Society - Backed preferred stock downgraded to B1 from Baa1. Outlook is developing in line with the BFSR. * Irish Life & Permanent - Junior subordinated debt downgraded to A3 from A2. Outlook remains negative. * KBC Bank Ireland - Subordinated debt downgraded to Baa3 from A3, in line with the action on the senior debt rating. Junior subordinated debt downgraded to Ba1 from A3. Outlook remains negative. * First Active and First Active Treasury plc - Subordinated debt downgraded to A3 from A2. These ratings are all placed on review for further downgrade in line with the review on the banks senior debt ratings. The last rating actions on the Irish banks were: * AIB - The last rating action on AIB was on February 12, 2009 when the bank's BFSR was downgraded to C from B- and the long- term ratings were downgraded to Aa3 from Aa2. * Anglo Irish Bank - The last rating action on Anglo Irish Bank was on January 19, 2009 when the BFSR was downgraded to E+ from C+ and the long-term ratings were downgraded to A2 from A1. * Bank of Ireland - The last rating action on Bank of Ireland was on February 12, 2009 when the bank's BFSR was downgraded to C from B- and the long-term ratings were downgraded to Aa3 from Aa2. * Bank of Scotland (Ireland) - The last rating action on Bank of Ireland was on February 16, 2009 when the bank's long-term rating was downgraded to A2 from Aa3. * EBS Building Society - The last rating action on EBS Building Society was on February 5, 2009 when the outlook on the society's backed-Aaa rated Government guaranteed bonds was changed to negative from stable. * ICS Building Society - The last rating action on ICS Building Society was on February 12, 2009 when the outlook on the C BFSR was changed to negative from stable, and the long-term ratings were downgraded to A1 from Aa3. * Irish Life & Permanent - The last rating action on Irish Life & Permanent was on February 17, 2009 when the BFSR was downgraded to C, on review for further downgrade, from C+ and the long-term ratings were downgraded to A1 from Aa3. * Irish Nationwide Building Society - The last rating action on Irish Nationwide Building Society was on February 16, 2009 when the BFSR was downgraded to D- from C- and the long-term ratings were downgraded to Baa3 from Baa1. * KBC Bank Ireland - The last rating action on KBC Bank Ireland was on January 26, 2009 when the long-term ratings were downgraded to A2 from A1. * Ulster Bank Limited and subsidiaries - The last rating action on Ulster Bank Limited and subsidiaries was on January 21, 2009 when the BFSRs of Ulster Bank Limited and Ulster Bank Ireland Limited were downgraded to C from C+, the C BFSR of First Active was confirmed and the long-term ratings of the three institutions were downgraded to A1 from Aa2. . * Zurich Bank - Moody's last rating action on Zurich Bank was in April 2007 when the long-term bank deposit rating was affirmed at A2 following the implementation of Moody's JDA methodology. All of the banks with the exception of Ulster Bank Limited are headquartered in Dublin, Ireland. Ulster Bank Limited is headquartered in Belfast, United Kingdom. * IRELAND: Corporate Failures Up 170% in First Quarter 2009 ----------------------------------------------------------- The number of Creditors' Voluntary Liquidations, High Court Liquidations, Receiverships and Examinerships in the three months ended March 31, 2009 has increased by a staggering 170% on the same period in 2008, according to figures compiled by FGS Corporate Restructuring & Insolvency. Figures compiled by FGS show that 351 companies were placed in liquidation, receivership or examinership in the first 3 months of 2009, representing a dramatic increase sharp increase (170%) on the 130 failures for the same period in 2008. The acceleration in the number of failures in 2009 has continued from the final 3 months of 2008 where some 279 failures occurred. Should the trend continue for the remainder of 2009 it is probable that some 1400 to 1500 failures will occur compared to 753 failures in 2008. The figures, while representing significant increases are not overly surprising when set against a backdrop of continued recession both nationally and internationally fuelled by the ongoing lack of liquidity, cashflow constraints, increasing unemployment, negative consumer sentiment etc. The ongoing demise in the construction sector is obvious from the statistics. 126 or 36% of all failures occurred in this sector. This compares with 28% in 2007 and 41% in 2008. To put these figures into context, there were more failures recorded within the sector in the first 3 months of 2009 than were recorded in the same periods in 2006, 2007 and 2008 collectively. The failures in the construction sector, in the main, continue to be small to medium sized developers and or sub contractors. However in the past number of weeks there has been an increase in the size of the entities failing. The ongoing reduction in house prices, a virtual stop in the number of new units being built, uncertainty regarding the availability of credit for small to medium type developers all indicate that much uncertainty is likely to prevail in the short term. It is likely that margins for sub contractors will continue to be eroded due to increased competitiveness. With regard to the trends emerging from the first three months of 2009 it is noted that Dublin continues to account for the majority of failures. Some 130 or 37% of all failures in the period took place in the capital in contrast to 34 or (42%) in 2007 and 61 (47%) in 2008. Significant increases in the number of failures in Cork (11 in 2008 as opposed to 43 in 2009); Galway (5 in 2008 as opposed to 22 in 2009) and Wicklow (2 in 2008 with 18 in 2008) should be noted. Notable trends in the industry sectors, in which the failures have occurred, include the significant increase in failures in the hospitality sector such as pubs, restaurants and suppliers to the industry where 56 collapses occurred or 16% of the total. This compares with 14 failures in the sector in the same period in 2008. Other notable sectors in which failures occurred were professional services (18), retail (28) of which 13 were recorded in the clothing retail area and home furnishings / interior design (35). In addition the motor industry experienced a dramatic increase in failures from 0 in 2008 to 23 in 2009. A significant increase in the number of receiverships was recorded in the first three months of 2009 when compared with the same period in 2008. Between January and March 2009 financial institutions/debenture holders appointed receivers to 35 businesses as opposed to a mere 11 in the same period in 2008. The majority of these receivership appointments have occurred in the construction/development and hospitality sectors. The utilization of the examinership process has also increased in the first quarter of 2009. A total of 13 companies had examiners appointed to them in the first three months of 2009 as opposed to 4 in the same period in 2008. It would appear that there is now a greater awareness and appetite amongst distressed and ailing businesses to look at restructuring options, in particular examinerships as a credible alternative to the traditional liquidation or receivership process. However this must be measured against the recent comments from Justice Peter Kelly regarding the number of companies that do not successfully come through the process. It is anticipated that the numbers of receiverships and examinerships will continue to increase throughout 2009. =================== K A Z A K H S T A N =================== ABSINTH GROUP: Creditors Must File Claims by May 8 -------------------------------------------------- LLP Absinth Group has declared insolvency. Creditors have until May 8, 2009, to submit written proofs of claim to: Balzak Str. 2a-40 Almaty Kazakhstan Tel: 8 (7272) 67-18-77 8 (7772( 17-19-67 ARENA-PV LLP: Creditors Must File Claims by May 8 ------------------------------------------------- The Specialized Inter-Regional Economic Court of Pavlodar has declared LLP Trade Firm Arena-PV insolvent. Creditors have until May 8, 2009, to submit written proofs of claim to: Djambulskaya Str. 6 Pavlodar Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Pavlodar Djambulskaya Str. 6 Pavlodar Kazakhstan AZIMPEX LLP: Creditors Must File Claims by May 8 ------------------------------------------------ LLP Azimpex has declared insolvency. Creditors have until May 8, 2009, to submit written proofs of claim to: Furmanov Str. 247a-3 Almaty Kazakhstan BIRLIK LLP: Creditors Must File Claims by May 8 ----------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda has declared LLP Birlik insolvent. Creditors have until May 8, 2009, to submit written proofs of claim to: Alalykin Str. 9 Karaganda Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Karaganda Alalykin Str. 9 Karaganda Kazakhstan DEKA GROUP: Creditors Must File Claims by May 8 ----------------------------------------------- LLP Deka Group has declared insolvency. Creditors have until May 8, 2009, to submit written proofs of claim to: Pobeda Ave. 115-67 Sary-Arka Astana Kazakhstan DEKOR STYLE: Creditors Must File Claims by May 8 ------------------------------------------------ The Specialized Inter-Regional Economic Court of Kostanai has declared LLP Dekor Style insolvent. Creditors have until May 8, 2009, to submit written proofs of claim to: Gogol Str. 177a Kostanai Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Kostanai Baitursynov Str. 70 Kostanai Kazakhstan JIHAN XXI: Creditors Must File Claims by May 8 ---------------------------------------------- The Specialized Inter-Regional Economic Court of Kostanai has declared LLP Jihan XXI insolvent. Creditors have until May 8, 2009, to submit written proofs of claim to: Baitursynov Str. 70 Kostanai Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Kostanai Baitursynov Str. 70 Kostanai Kazakhstan KAMAS LLP: Creditors Must File Claims by May 8 ---------------------------------------------- The Specialized Inter-Regional Economic Court of Kostanai has declared LLP Kamas insolvent. Creditors have until May 8, 2009, to submit written proofs of claim to: Baitursynov Str. 70 Kostanai Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Kostanai Baitursynov Str. 70 Kostanai Kazakhstan ORDA CREDIT: S&P Affirms 'CCC+/C' Counterparty Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'CCC+/C' counterparty credit and 'kzB+' Kazakhstan national scale ratings on ORDA Credit. The ratings were subsequently withdrawn at the company's request. The outlook at the time of the withdrawal was stable. As a result of the withdrawal, ORDA Credit will no longer be subject to Standard & Poor's surveillance. There are no outstanding issues rated. SERVICE BAGAJ: Creditors Must File Claims by May 8 -------------------------------------------------- The Specialized Inter-Regional Economic Court of Kyzylorda has declared LLP Kyzylorda Service Bagaj insolvent. Creditors have until May 8, 2009, to submit written proofs of claim to: Aiteke bi Str. 29 120014 Kyzylorda Kyzylorda Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Kyzylorda Aiteke bi Str. 29 120014 Kyzylorda Kyzylorda USTA ART LLP: Creditors Must File Claims by May 8 ------------------------------------------------- The Specialized Inter-Regional Economic Court of Aktube has declared LLP Usta Art insolvent. Creditors have until May 8, 2009, to submit written proofs of claim to: Satpayev Str. 16 Aktobe Aktube Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Aktube Satpayev Str. 16 Aktobe Aktube Kazakhstan =================== K Y R G Y Z S T A N =================== KAMI LTD: Creditors Must File Claims by April 17 ------------------------------------------------ Creditors of LLC Manufacturing Commercial Firm Kami Ltd. have until April 17, 2009, to submit proofs of claim. The company can be reached at: LLC Manufacturing Commercial Firm Kami Ltd. Tel: (+996 312) 41-80-19 STAL INVEST: Creditors Must File Claims by April 17 --------------------------------------------------- Creditors of LLC Stal Invest have until April 17, 2009, to submit proofs of claim to: Karagaisky Side Street 30 Bishkek Kyrgyzstan =========== L A T V I A =========== NORVIK BANKA: Fitch Downgrades Individual Rating to 'D/E' --------------------------------------------------------- Fitch Ratings has downgraded Latvia-based Norvik Banka's Long-term Issuer Default and Individual ratings to 'B' from 'B+' and 'D/E' from 'D', respectively. This reflects Fitch's opinion that Norvik Banka's asset quality and profitability may be further adversely affected by the deteriorating economic environment in Latvia. The Long-term IDR 'B' and the Short-term IDR 'B' remain on Rating Watch Negative. The Individual Rating has also been placed on RWN. Norvik Banka's Support Rating and Support Rating Floor were affirmed at '5' and 'No Floor' respectively. Loan impairment charges as a percentage of gross loans increased to a high 4% of gross loans in 2008 from 0.47% in 2007 and may increase further. Except for the unsecured consumer loan portfolio (around 9% of total gross loans) Norvik's conservative collateral requirements should provide a partial buffer to further defaults on the bank's loan portfolio. Nevertheless, the deepening recession in Latvia and negative economic trends globally could further reduce the value of collateral and result in a further rise in impairment charges. This raises the risk that credit losses may feed through to capital and put some pressure on Tier 1 ratio, which stood at 12.1% at end-2008. Although the bank's diversification away from non-interest-bearing non-resident deposits to interest-bearing resident deposits has improved the stability of the deposit base, this has also increased funding costs. Several Latvian banks were placed on RWN on December 3, 2008, following the decision by the Latvian government and the Financial and Capital Market Commission on December 1, 2008, to restrict the fulfilment by Parex Banka of its obligations. This decision restricted deposit withdrawals by certain parties. The measures had been taken to stabilise the deposit outflow from Parex, and Fitch was concerned that, this may negatively affect depositor confidence, especially non-resident depositors, increasing the risk of a deposit freeze on the whole Latvian banking system. Fitch will also monitor the ability of the bank to either repay or roll-over syndicated and bilateral borrowings maturing this year. Norvik Banka was the 10th-largest bank by assets in Latvia at end- 2008. After Straumborg, a family-owned Icelandic investment company, bought a majority stake in January 2006, Norvik Banka's strategy has been increasingly focused on its domestic business rather than on serving non-resident clients, although progress in achieving this transformation has been relatively slow. * Fitch Corrects Release on Latvia's Rating Downgrade ----------------------------------------------------- This comment corrects a version published earlier. Fitch has downgraded Latvia's Long-term Issuer Default Rating to 'BB+', and not to 'BB-' (BB minus) as was incorrectly stated in one place in the prior comment. The corrected comment is: Fitch Ratings has downgraded the Long-term foreign and local currency Issuer Default ratings and the Short-term foreign currency IDRs of Estonia, Latvia and Lithuania by one notch. The Long-term foreign currency IDRs are now 'BBB+', 'BB+' and 'BBB' respectively. The downgrade of Latvia's ratings reflects the deterioration in the prospects for the Latvian economy and elevated risk of policy slippage since the agreement of the EUR7.5 billion loan package with the IMF, EU and other international lenders in December 2008. The downgrade of Estonia's and Lithuania's ratings reflects the deterioration in economic prospects which will increase pressure on their macroeconomic policy frameworks. It also reflects their vulnerability to negative developments in Latvia, where risks have increased, through three channels: trade, common ownership of the banking system and resident confidence in local currencies and the banking system. While the devaluation of the Latvian LVL is not Fitch's base case, such an event would increase pressure on the Lithuanian LTL and the Estonian EEK. Fitch has also downgraded Estonia and Lithuania's Country Ceilings by one notch and Latvia's Country Ceiling by two notches. The Outlooks on the Long-term ratings remain Negative. Fitch is forecasting that the Latvian economy will contract by 12% in 2009, making it much harder for the government to implement its target budget deficit of 4.7% of GDP, which it passed on the assumption of a 5% contraction. On unchanged policies, Fitch estimates that the budget deficit could rise to 10% of GDP in 2009. Austerity measures implemented following the agreement with the IMF, EU and other international lenders in December 2008 contributed to a public backlash culminating in demonstrations in Riga in mid-January 2009 which led to the collapse of the four- party coalition government led by Prime Minister Ivars Godmanis in February. A new five-party coalition government led by former opposition party "New Era" took office in March 2009, but is only planning to submit draft budget amendments to parliament by late May. This lack of progress in revising the budget has led to the IMF delaying the disbursement of the EUR200 million tranche of funds which was scheduled for payment in Q109. Fitch is concerned that the risk to policy implementation has risen, which could lead to delays in the disbursement of the EUR1.7 billion Latvia is scheduled to receive from international lenders in Q209. While still not Fitch's base case scenario, the risk of devaluation in Latvia has risen as the implementation of the IMF programme has come under pressure. Devaluation would be severely negative given the high level of external debt (128% of GDP at end-2008) and the high proportion of foreign currency bank loans. Nevertheless, retaining the peg to the euro requires substantial falls in nominal wages to restore competitiveness, particularly as the flexible currencies of some non-Baltic neighboring countries have depreciated, while the global recession is hitting exports, making macroeconomic re-balancing more difficult. Fitch has downgraded Latvia's Country Ceiling by two notches to 'BBB'. The Country Ceiling is now two notches above the foreign currency IDR. The narrowing of the differential reflects a slightly larger increase in the risk of external financial pressures that could prompt sovereign actions to restrict private capital flows. Given the deterioration in economic prospects in Estonia and Lithuania, it will be harder for their governments to implement their adopted budget deficit targets of 2.9% of GDP and 2.1% of GDP respectively. Both countries are keen to keep their budget deficits below 3% of GDP to ensure compliance with the Maastricht criteria on public finances so they can adopt the euro as soon as possible. Fitch is now forecasting that the Lithuanian economy will contract by 10% in 2009, compared to its forecast of a 5% contraction in December 2008, when it downgraded Lithuania's foreign currency IDR to 'BBB+'. Following the implementation of measures to cut expenditure and raise revenues as pledged in December 2008, the Conservative-led government agreed earlier in April to cut budget expenditure by a further 3.5% of GDP and will submit proposals to revise the budget to parliament in April, with further expenditure cuts possible in June. However, Fitch notes that the implementation of austerity measures in December 2008 led to public protests against the government and the risk of a public backlash against further budget cuts may constrain the government's room for maneuver. The Estonian economy contracted by 3.6% in 2008 (and 17.2% in Q408 on a quarter-on-quarter annualized basis) and Fitch is forecasting that it will contract by 10% in 2009. The general government budget deficit was 3% of GDP in 2008, although a supplementary budget passed in early 2008 revised the budget target to balance from a 1% of GDP surplus. The government passed the 2009 budget with a target deficit of 1.7% of GDP but subsequently widened the target to 2.9% of GDP with a supplementary budget in February 2009 which made expenditure cuts of around 3.5% of GDP. However, with the economic downturn now more severe than expected, and revenues falling below-target, the government is set to propose new expenditure-cutting measures by the end of April 2009. Fitch believes that further measures to improve the budgetary position will be difficult to implement and the budget deficit may well rise above the targeted 2.9% of GDP. Fitch notes that the Estonian government's general government fiscal reserves of 9% of GDP at end-2008 mean it has the flexibility of financing at least part of its budget deficit. Its low general government debt level of 4.8% of GDP at end-2008 is a support to the rating. Fitch notes that imbalances in all three Baltic countries are being unwound. Current account deficits in Q408 narrowed to 5.5% of GDP in Estonia, 3.8% of GDP in Lithuania and 8.3% of GDP in Latvia and Fitch is forecasting current account deficits in the low single-digits for all three countries in 2009. Inflation rates are also declining with year-on-year inflation falling to 2.0% in Estonia in March 2009, and 8.5% in Lithuania and 9.4% in Latvia in February 2009 (from respective peaks of 11.6%, 12.7% and 17.7% during 2008). Nevertheless, this rebalancing is taking a toll on the real economy through falling property prices, deteriorating bank asset quality and rising unemployment and will increase political pressure on governments as they seek to impose fiscal austerity measures. Furthermore, all three Baltic countries' near-term external financing requirements remain high: Fitch estimates that short-term debt at end-2008 and medium and long-term amortization for 2009 (albeit much of this is to foreign parent banks) is US$16.7 billion in Latvia, compared to international reserves of US$5.3 billion at end-2008; US$15.5 billion in Estonia, compared to reserves of US$3.9 billion and US$13.5 billion in Lithuania compared to reserves of US$6.4 billion. Estonia: -- Long-term foreign currency IDR: downgraded to 'BBB+' from 'A- ' (A minus). Outlook Negative -- Long-term local currency IDR: downgraded to 'A-' (A minus) from 'A'. Outlook Negative -- Short-term foreign currency IDR downgraded to 'F2' from 'F1' -- Country Ceiling: downgraded to 'A+' from 'AA-' (AA minus) Latvia: -- Long-term foreign currency IDR: downgraded to 'BB+' from 'BBB-' (BBB minus). Outlook Negative -- Long-term local currency IDR: downgraded to 'BBB-' (BBB minus) from 'BBB'. Outlook Negative -- Short-term foreign currency IDR: downgraded to 'B' from 'F3' -- Country Ceiling: downgraded to 'BBB' from 'A-' (A minus) Lithuania: -- Long-term foreign currency IDR: downgraded to 'BBB' from 'BBB+'. Outlook Negative -- Long-term local currency IDR: downgraded to 'BBB+' from 'A-' (A minus). Outlook Negative -- Short-term foreign currency IDR: downgraded to 'F3' from 'F2'. -- Country Ceiling: downgraded to 'A' from 'A+' ================= L I T H U A N I A ================= BANKAS SNORAS: Fitch Downgrades Individual Rating to 'D/E' ---------------------------------------------------------- Fitch Ratings has downgraded Lithuania-based Bankas Snoras's Long- term Issuer Default Rating to 'B+' from 'BB-' (BB minus) and downgraded its Latvian subsidiary's, Latvijas Krajbanka, Long-term IDR to 'B' from 'B+'. The rating Outlook for Snoras's Long-term IDR remains Negative. Fitch has also downgraded Snoras's and Krajbanka's Individual Ratings to 'D/E' from 'D'. The agency has additionally downgraded Krajbanka's Support Rating to '5' from '4', and affirmed Snoras's Support Rating Floor at 'B+' while downgrading its outstanding Eurobonds to 'B+' from 'BB-' (BB minus). Fitch has simultaneously withdrawn all of Krajbanka's ratings and will no longer provide rating or analytical coverage of this entity. The downgrades of Snoras's and Krajbanka's Long-term IDRs and Individual Ratings reflect the fast deterioration of the operating environment in Lithuania and Latvia. This has already been reflected in deteriorating asset quality and rising impairment charges for Q408 which are likely to continue during 2009. Impairment charges consumed a large portion of pre-impairment operating profit for 2008, 60% for Krajbanka and 96% for Snoras based on consolidated accounts. Apart from a rising share of loans with recognized impairment (2.8% of total gross loans) at the consolidated level at end-2008, the share of overdue loans has also increased with loans more than 90 days overdue, but not impaired, accounting for 2.9% of total gross loans at end-2008. Except for the unsecured consumer loan portfolio (around 26% of consolidated gross loans), both banks have had conservative collateral requirements resulting in relatively low loan-to-value ratios. This has established a partial buffer against a further growth in defaults in the banks' corporate, real estate and mortgage books. Nevertheless, as most of the collateral is in the form of real estate, the deepening recession in the banks' respective markets could further reduce the value of collateral and result in further rise in impairment charges. Coupled with a likely deterioration of profitability at the pre-impairment operating level, this raises the risk that credit losses may feed through to capital. The loss absorption capacity of both banks is limited as manifested by the relatively low Tier 1 ratios of 8.4% and 7.56% for Krajbanka and Snoras respectively. Both banks are in the process of raising capital: Krajbanka plans to increase its Tier 1 capital, while Snoras intends to raise its Tier 2 capital. The downgrade of Krajbanka's Support Rating reflects the limited financial flexibility of Snoras to support capital in its subsidiary, unless new capital is injected to Snoras. Snoras's Support Rating reflects the limited probability of support from the Lithuanian authorities, if required, in view of the bank's market share of resident retail deposits which is about 13%. Snoras was the sixth-largest bank in Lithuania, with around 6.4% of sector assets as of end-2008. The bank is 67.28%-owned by Russian businessman Vladimir Antonov and 25.01% by the Chairman of Snoras's board, Raimondas Baranauskas. Snoras has a modern and wide-ranging distribution network. The bank has domestic subsidiaries offering mainly leasing, asset management services and real estate management. Krajbanka is a small bank, which ranked as Latvia's ninth-largest by assets at end-2008. It is a universal bank, serving mainly small- to medium-sized enterprises and individuals. The rating actions are: Bankas Snoras -- Long-term IDR downgraded to 'B+' from 'BB-' (BB minus); Outlook Negative -- Short-term IDR affirmed at 'B' -- Individual Rating downgraded to 'D/E' from 'D' -- Support Rating affirmed at '4' -- Support Rating Floor affirmed at 'B+' -- Outstanding Eurobonds downgraded to 'B+' from 'BB-' (BB minus) Latvijas Krajbanka -- Long-term IDR downgraded to 'B' from 'B+' and withdrawn -- Short-term IDR affirmed at 'B' and withdrawn -- Individual Rating downgraded to 'D/E' from 'D' and withdrawn -- Support Rating downgraded to '5' from '4' and withdrawn LATVIJAS KRAJBANKA: Fitch Lowers Individual Rating to 'D/E' ----------------------------------------------------------- Fitch Ratings has downgraded Lithuania-based Bankas Snoras's Long- term Issuer Default Rating to 'B+' from 'BB-' (BB minus) and downgraded its Latvian subsidiary's, Latvijas Krajbanka, Long-term IDR to 'B' from 'B+'. The rating Outlook for Snoras's Long-term IDR remains Negative. Fitch has also downgraded Snoras's and Krajbanka's Individual Ratings to 'D/E' from 'D'. The agency has additionally downgraded Krajbanka's Support Rating to '5' from '4', and affirmed Snoras's Support Rating Floor at 'B+' while downgrading its outstanding Eurobonds to 'B+' from 'BB-' (BB minus). Fitch has simultaneously withdrawn all of Krajbanka's ratings and will no longer provide rating or analytical coverage of this entity. The downgrades of Snoras's and Krajbanka's Long-term IDRs and Individual Ratings reflect the fast deterioration of the operating environment in Lithuania and Latvia. This has already been reflected in deteriorating asset quality and rising impairment charges for Q408 which are likely to continue during 2009. Impairment charges consumed a large portion of pre-impairment operating profit for 2008, 60% for Krajbanka and 96% for Snoras based on consolidated accounts. Apart from a rising share of loans with recognized impairment (2.8% of total gross loans) at the consolidated level at end-2008, the share of overdue loans has also increased with loans more than 90 days overdue, but not impaired, accounting for 2.9% of total gross loans at end-2008. Except for the unsecured consumer loan portfolio (around 26% of consolidated gross loans), both banks have had conservative collateral requirements resulting in relatively low loan-to-value ratios. This has established a partial buffer against a further growth in defaults in the banks' corporate, real estate and mortgage books. Nevertheless, as most of the collateral is in the form of real estate, the deepening recession in the banks' respective markets could further reduce the value of collateral and result in further rise in impairment charges. Coupled with a likely deterioration of profitability at the pre-impairment operating level, this raises the risk that credit losses may feed through to capital. The loss absorption capacity of both banks is limited as manifested by the relatively low Tier 1 ratios of 8.4% and 7.56% for Krajbanka and Snoras respectively. Both banks are in the process of raising capital: Krajbanka plans to increase its Tier 1 capital, while Snoras intends to raise its Tier 2 capital. The downgrade of Krajbanka's Support Rating reflects the limited financial flexibility of Snoras to support capital in its subsidiary, unless new capital is injected to Snoras. Snoras's Support Rating reflects the limited probability of support from the Lithuanian authorities, if required, in view of the bank's market share of resident retail deposits which is about 13%. Snoras was the sixth-largest bank in Lithuania, with around 6.4% of sector assets as of end-2008. The bank is 67.28%-owned by Russian businessman Vladimir Antonov and 25.01% by the Chairman of Snoras's board, Raimondas Baranauskas. Snoras has a modern and wide-ranging distribution network. The bank has domestic subsidiaries offering mainly leasing, asset management services and real estate management. Krajbanka is a small bank, which ranked as Latvia's ninth-largest by assets at end-2008. It is a universal bank, serving mainly small- to medium-sized enterprises and individuals. The rating actions are: Bankas Snoras -- Long-term IDR downgraded to 'B+' from 'BB-' (BB minus); Outlook Negative -- Short-term IDR affirmed at 'B' -- Individual Rating downgraded to 'D/E' from 'D' -- Support Rating affirmed at '4' -- Support Rating Floor affirmed at 'B+' -- Outstanding Eurobonds downgraded to 'B+' from 'BB-' (BB minus) Latvijas Krajbanka -- Long-term IDR downgraded to 'B' from 'B+' and withdrawn -- Short-term IDR affirmed at 'B' and withdrawn -- Individual Rating downgraded to 'D/E' from 'D' and withdrawn -- Support Rating downgraded to '5' from '4' and withdrawn * Fitch Cuts Lithuania's Long-term Foreign Currency IDR to 'BBB+' ----------------------------------------------------------------- This comment corrects a version published earlier. Fitch has downgraded Latvia's Long-term Issuer Default Rating to 'BB+', and not to 'BB-' (BB minus) as was incorrectly stated in one place in the prior comment. The corrected comment is: Fitch Ratings has downgraded the Long-term foreign and local currency Issuer Default ratings and the Short-term foreign currency IDRs of Estonia, Latvia and Lithuania by one notch. The Long-term foreign currency IDRs are now 'BBB+', 'BB+' and 'BBB' respectively. The downgrade of Latvia's ratings reflects the deterioration in the prospects for the Latvian economy and elevated risk of policy slippage since the agreement of the EUR7.5 billion loan package with the IMF, EU and other international lenders in December 2008. The downgrade of Estonia's and Lithuania's ratings reflects the deterioration in economic prospects which will increase pressure on their macroeconomic policy frameworks. It also reflects their vulnerability to negative developments in Latvia, where risks have increased, through three channels: trade, common ownership of the banking system and resident confidence in local currencies and the banking system. While the devaluation of the Latvian LVL is not Fitch's base case, such an event would increase pressure on the Lithuanian LTL and the Estonian EEK. Fitch has also downgraded Estonia and Lithuania's Country Ceilings by one notch and Latvia's Country Ceiling by two notches. The Outlooks on the Long-term ratings remain Negative. Fitch is forecasting that the Latvian economy will contract by 12% in 2009, making it much harder for the government to implement its target budget deficit of 4.7% of GDP, which it passed on the assumption of a 5% contraction. On unchanged policies, Fitch estimates that the budget deficit could rise to 10% of GDP in 2009. Austerity measures implemented following the agreement with the IMF, EU and other international lenders in December 2008 contributed to a public backlash culminating in demonstrations in Riga in mid-January 2009 which led to the collapse of the four- party coalition government led by Prime Minister Ivars Godmanis in February. A new five-party coalition government led by former opposition party "New Era" took office in March 2009, but is only planning to submit draft budget amendments to parliament by late May. This lack of progress in revising the budget has led to the IMF delaying the disbursement of the EUR200 million tranche of funds which was scheduled for payment in Q109. Fitch is concerned that the risk to policy implementation has risen, which could lead to delays in the disbursement of the EUR1.7 billion Latvia is scheduled to receive from international lenders in Q209. While still not Fitch's base case scenario, the risk of devaluation in Latvia has risen as the implementation of the IMF programme has come under pressure. Devaluation would be severely negative given the high level of external debt (128% of GDP at end-2008) and the high proportion of foreign currency bank loans. Nevertheless, retaining the peg to the euro requires substantial falls in nominal wages to restore competitiveness, particularly as the flexible currencies of some non-Baltic neighboring countries have depreciated, while the global recession is hitting exports, making macroeconomic re-balancing more difficult. Fitch has downgraded Latvia's Country Ceiling by two notches to 'BBB'. The Country Ceiling is now two notches above the foreign currency IDR. The narrowing of the differential reflects a slightly larger increase in the risk of external financial pressures that could prompt sovereign actions to restrict private capital flows. Given the deterioration in economic prospects in Estonia and Lithuania, it will be harder for their governments to implement their adopted budget deficit targets of 2.9% of GDP and 2.1% of GDP respectively. Both countries are keen to keep their budget deficits below 3% of GDP to ensure compliance with the Maastricht criteria on public finances so they can adopt the euro as soon as possible. Fitch is now forecasting that the Lithuanian economy will contract by 10% in 2009, compared to its forecast of a 5% contraction in December 2008, when it downgraded Lithuania's foreign currency IDR to 'BBB+'. Following the implementation of measures to cut expenditure and raise revenues as pledged in December 2008, the Conservative-led government agreed earlier in April to cut budget expenditure by a further 3.5% of GDP and will submit proposals to revise the budget to parliament in April, with further expenditure cuts possible in June. However, Fitch notes that the implementation of austerity measures in December 2008 led to public protests against the government and the risk of a public backlash against further budget cuts may constrain the government's room for maneuver. The Estonian economy contracted by 3.6% in 2008 (and 17.2% in Q408 on a quarter-on-quarter annualized basis) and Fitch is forecasting that it will contract by 10% in 2009. The general government budget deficit was 3% of GDP in 2008, although a supplementary budget passed in early 2008 revised the budget target to balance from a 1% of GDP surplus. The government passed the 2009 budget with a target deficit of 1.7% of GDP but subsequently widened the target to 2.9% of GDP with a supplementary budget in February 2009 which made expenditure cuts of around 3.5% of GDP. However, with the economic downturn now more severe than expected, and revenues falling below-target, the government is set to propose new expenditure-cutting measures by the end of April 2009. Fitch believes that further measures to improve the budgetary position will be difficult to implement and the budget deficit may well rise above the targeted 2.9% of GDP. Fitch notes that the Estonian government's general government fiscal reserves of 9% of GDP at end-2008 mean it has the flexibility of financing at least part of its budget deficit. Its low general government debt level of 4.8% of GDP at end-2008 is a support to the rating. Fitch notes that imbalances in all three Baltic countries are being unwound. Current account deficits in Q408 narrowed to 5.5% of GDP in Estonia, 3.8% of GDP in Lithuania and 8.3% of GDP in Latvia and Fitch is forecasting current account deficits in the low single-digits for all three countries in 2009. Inflation rates are also declining with year-on-year inflation falling to 2.0% in Estonia in March 2009, and 8.5% in Lithuania and 9.4% in Latvia in February 2009 (from respective peaks of 11.6%, 12.7% and 17.7% during 2008). Nevertheless, this rebalancing is taking a toll on the real economy through falling property prices, deteriorating bank asset quality and rising unemployment and will increase political pressure on governments as they seek to impose fiscal austerity measures. Furthermore, all three Baltic countries' near-term external financing requirements remain high: Fitch estimates that short-term debt at end-2008 and medium and long-term amortization for 2009 (albeit much of this is to foreign parent banks) is US$16.7 billion in Latvia, compared to international reserves of US$5.3 billion at end-2008; US$15.5 billion in Estonia, compared to reserves of US$3.9 billion and US$13.5 billion in Lithuania compared to reserves of US$6.4 billion. Estonia: -- Long-term foreign currency IDR: downgraded to 'BBB+' from 'A- ' (A minus). Outlook Negative -- Long-term local currency IDR: downgraded to 'A-' (A minus) from 'A'. Outlook Negative -- Short-term foreign currency IDR downgraded to 'F2' from 'F1' -- Country Ceiling: downgraded to 'A+' from 'AA-' (AA minus) Latvia: -- Long-term foreign currency IDR: downgraded to 'BB+' from 'BBB-' (BBB minus). Outlook Negative -- Long-term local currency IDR: downgraded to 'BBB-' (BBB minus) from 'BBB'. Outlook Negative -- Short-term foreign currency IDR: downgraded to 'B' from 'F3' -- Country Ceiling: downgraded to 'BBB' from 'A-' (A minus) Lithuania: -- Long-term foreign currency IDR: downgraded to 'BBB' from 'BBB+'. Outlook Negative -- Long-term local currency IDR: downgraded to 'BBB+' from 'A-' (A minus). Outlook Negative -- Short-term foreign currency IDR: downgraded to 'F3' from 'F2'. -- Country Ceiling: downgraded to 'A' from 'A+' =================== L U X E M B O U R G =================== BREEZE FINANCE: Fitch Downgrades Rating on Class B to 'B+' ---------------------------------------------------------- Fitch Ratings has downgraded these Breeze Finance S.A.'s notes: -- EUR279.9 million class A (XS0294895999) downgraded to 'BBB-' (BBB minus) from 'BBB'; Outlook Stable -- EUR81.8 million class B (XS0294895726) downgraded to 'B+' from 'BB'; Outlook Negative Breeze 3 is a Luxembourg SPV that issued three classes of notes on April 19, 2007, for an aggregate issuance amount of EUR455 million to finance the acquisition and completion of a portfolio of wind farms located in Germany and France, as well as establishing various reserve accounts. The notes will be repaid from the cash flow generated by the sale of the energy produced by the wind farms, mainly under regulated tariffs. Operating costs during 2008 were significantly higher compared to original expectations. According to the information received from Breeze 3, total expenditures pre debt service were some EUR2.2 million higher than projected during 2008, primarily as a result of underestimations, cost omissions and the revision of the ranking of payments to the decommissioning reserve account (previously considered as subordinated, but in practice senior to debt service). Although approximately EUR1 million of such cost- overruns is considered to be a one-off, the debt service coverage ratio for both classes of notes is expected to drop materially compared to initial expectations. Additional concerns affecting the Breeze 3 wind farm portfolio have arisen from the technical issues causing cracks in the blades of some Nordex turbines. The blades on five turbines were replaced during 2008 with LM blades and are now operating normally. One S77 turbine at the Flechtdorf Helmscheid wind farm will, in the coming week, also receive new LM blades. The remaining four turbines are back in operation, but have to be checked regularly for safety reason. A permanent solution has yet to be identified. Seventeen Vestas V90 turbines continue to lack insurance cover for damage to their foundations not caused by external factors. Fitch gains comfort from the fact that none of the turbines' foundations currently display any cracks, and from the active management of the issue by the operator of the Breeze 3 portfolio. The construction of all wind farms in the portfolio was completed in December 2008 with the beginning of the operation of the last remaining project, Conteville. However, the portfolio will suffer during 2009 the decommissioning of the two remaining HSW turbines at the Pombsen wind farm (representing about 0.75% of the portfolio P50), whose operation has been considered uneconomical due to poor technical conditions. This adds to the previous decommissioning of another turbine at the same project and of one NEG-Micon turbine at the Vahlbruch wind farm in early 2008. The loss of the latter turbine highlights what in Fitch's view is a weakness in the transaction structure in that the damage insurance reimbursement for the loss of the Vahlbruch turbine will effectively be released to the class C notes rather than being trapped within the structure or used to repay debt. Energy production during 2008 at 544.3 GWh was some 1% and 9% lower than the P90 and P50 forecasts respectively. This was due to below average wind conditions as well as low technical availability (approximately 95% compared to the expected 97%) resulting from the shutdown of ten Nordex turbines. Revenues were further impacted negatively by the low energy price received for the Combusins, Derval and Xambes wind farms as a result of the cancellation on August 6, 2008, of the decree regulating the tariff payable to French wind farms. However, this situation has now been resolved, as the French government passed a new decree on 28 December 2008 reinforcing the provisions of the previous one. During 2008, DSCR stood at a strong 1.81x and 1.30x for the class A and B notes respectively. Such ratios will be significantly lower, starting from 2009, as a consequence of the full principal amortisation schedule becoming due. The effect of the negative events affecting the transaction is most significant and immediate on the class B notes. This is due to the lower debt service reserve available to the class B notes compared to class A (approximately three months of principal and interest payments against six months on the most senior class) and the identified structural weakness relating to the allocation of damage insurance reimbursements. Additional concerns for the class B notes derive from the technical issues affecting the blades of four Nordex turbines at the Flechtdorf project, as well as the persisting uncertainty regarding the foundations of seventeen Vestas turbines. Class B notes may come under further severe stress during 2009 as a result of one-off expenses linked to a funding shortfall on the French wind farms (anticipated to be about EUR0.5 million thanks to the netting off of some EUR0.7 million of turnkey price reductions for the same projects), and the exceptionally poor wind conditions experienced during the first two months of the year. ===================== N E T H E R L A N D S ===================== FORTIS BANK: S&P Cuts Junior Ratings on EUR2 Bil. Notes to 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it has affirmed its 'A/A-1' long- and short-term counterparty credit ratings on Fortis Bank Nederland (Holding) N.V. and removed them from CreditWatch, where they were placed on Oct. 6, 2008, with developing implications. The outlook is developing. At the same time, S&P lowered the junior subordinated rating on FBNH's EUR2 billion mandatory convertible securities to 'BB-' from 'BB' and maintained them on CreditWatch with developing implications. FBNH's government-guaranteed debt, which S&P rates 'AAA/A-1+', is not affected by this rating action. "The ratings on FBNH reflect the support from its shareholder, the Dutch state, as well as its only adequate stand-alone credit profile," said Standard & Poor's credit analyst Elisabeth Grandin. The bank is the fourth-largest Dutch bank, and benefits from a moderate risk profile with limited reliance on volatile investment banking type revenues and a loan portfolio focus on the Dutch economy. Its major weakness is its currently poor stand-alone funding profile, as well as the challenge represented by re- establishing itself as an independent bank. The 'BB-' junior subordinated rating on the MCS reflects S&P's view of higher risk of suspension for hybrid instruments issued by banks that have a moderate stand-alone credit profile and where government support is a key rating factor. "The developing outlook means that S&P could affirm, raise, or lower our ratings over the next 18 months depending on the outcome of the restructuring process currently under way," said Ms. Grandin. S&P expects FBNH or the new banking group resulting from its combination with ABN AMRO activities that the Dutch state purchased to continue benefiting from the Dutch government's strong support in the coming years. S&P also expects FBNH to show only moderate further pressure in its underlying financial performance, to progressively improve its funding profile, and to improve its enterprise risk management through the successful separation from its former parent. Failure to meet these expectations and in particular to stabilize the bank's franchise would put pressure on the ratings. The ratings could also be negatively affected by compensating measures resulting from the EU investigation into alleged state aid. A positive rating action would depend on a successful combination of FBNH with the ABN AMRO activities that results in a fundamental improvement in its stand-alone credit profile. While the bank's business position in The Netherlands and its funding mix will clearly benefit from the combination, there is only limited information available about the financial and business profiles of the ABN AMRO activities. The likelihood of positive rating actions will also reflect the execution risks related to the merger and the prospect for a reduction in Dutch government involvement in the medium term. Creditwatch To resolve the CreditWatch on the MCS, S&P need to assess the impact on FBNH's capital position and financial flexibility of the EU inquiry, if any, and in turn what impact that could have on the bank's capacity to pay the coupon. However, the short-term nature of the instrument before its planned December 2010 conversion reduces uncertainty. S&P'S CRITERIA FOR HOLDING COMPANIES AND FORTIS BANK NEDERLAND (HOLDING) N.V. FBNH is the holding company of Fortis Bank Nederland and is also a regulated bank. It has no operational activities and relies on the dividends upstreamed in particular from FBN. FBN and FBNH are fully integrated from an operational point of view. Standard & Poor's typically applies a one-notch rating differential between the rating on an operational banking entity and that on its holding company. Because FBNH recently announced that it plans to merge FBNH with FBN to simplify its legal organization, and taking also into consideration FBNH's banking status, S&P decided not to apply any notching and equalize the rating on FBNH with the implied rating on FBN. LEVERAGED FINANCE: S&P Cuts Rating on Class IV Notes to 'BB+' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its rating on the class IV notes issued by Leveraged Finance Europe Capital IV B.V. At the same time, S&P affirmed and removed from CreditWatch negative the class II, III, and V notes and affirmed the ratings on the remaining notes. On Feb. 17, S&P placed the class II to V notes on CreditWatch negative following a preliminary review of the effect of recent developments on European collateralized loan obligations. The rating actions follow S&P's full review of the transaction, including a cash flow analysis. This shows that the likelihood that the class IV notes will not be repaid in full has, in S&P's opinion, increased to a level no longer consistent with the notes' previous rating. Further, S&P considers that the likelihood of the class I-D, I-N, revolving facility, II, III, and V notes being repaid remains consistent with the current ratings, and S&P has thus affirmed these ratings. In S&P's analysis S&P calculated scenario default rates at different rating levels for various classes of notes. S&P also assessed, using a cash flow model, the future level of defaults the portfolio could withstand and the transaction to still fully repay each class of notes (the breakeven default rate; BDR). S&P's analysis highlighted that the SDRs have risen as a result of credit deterioration in the underlying portfolio--and at the same time BDRs have fallen due to par value losses following the default of certain corporate obligors in the portfolio. Leveraged Finance Europe Capital IV is an arbitrage cash flow CLO managed by BNP Paribas that closed in October 2006. The portfolio comprises senior secured and mezzanine loans. As recently announced, S&P's criteria for rating cash flow CLOs are under review. As highlighted in the notices below, S&P is soliciting feedback from market participants regarding proposed changes to S&P's CLO criteria. S&P will evaluate the market feedback, which may result in further changes to the criteria. This may affect S&P's ratings on the notes issued by Leveraged Finance European Capital IV. The rating actions are unrelated to these proposed criteria changes. Ratings List Leveraged Finance Europe Capital IV B.V. EUR306.8 Million Floating-Rate Notes Rating Lowered and Removed from CreditWatch Negative Rating ------ Class To From ----- -- ---- IV BB+ BBB-/Watch Neg Ratings Affirmed and Removed from CreditWatch Negative Rating ------ Class To From ----- -- ---- II AA AA/Watch Neg III A A/Watch Neg V BB- BB-/Watch Neg Ratings Affirmed Class Rating ----- ------ I-D AAA I-N AAA Revolving facility AAA =========== R U S S I A =========== BELGAZPROMBANK: Fitch Lifts Individual Rating to 'D/E' ------------------------------------------------------ Fitch Ratings has affirmed Belgazprombank's Long-term Issuer Default Rating at 'B' with a Stable Outlook and upgraded its Individual Rating to 'D/E' from 'E'. Fitch has simultaneously affirmed BGB's other ratings. BGB's IDRs and Support Rating of '4' reflect Fitch's view on the likelihood of support from the bank's controlling shareholders, OAO Gazprom (Gazprom, 'BBB'/Negative) and affiliated JSB Gazprombank. Fitch believes that Gazprom's ability and propensity to provide support to BGB, in case of need, are strong. However, Belarusian transfer and convertibility risks may limit the extent to which BGB could utilize such support, and therefore impose constraints on BGB's IDRs and Support Rating. The upgrade of BGB's Individual Rating recognizes the bank's significantly improved loss absorption capacity, the bank's progress in reducing the concentration of its loan book, continued strong profitability, healthy liquidity and good-to-date reported asset quality. BGB's Individual Rating also reflects its strong track record in SME lending, the special role played by the bank in Gazprom's settlement system and reasonable risk management systems. However, BGB's Individual Rating also takes into account the challenging operating environment, its relatively limited franchise, a high share of wholesale and foreign currency funding, the unseasoned loan portfolio and a high share of foreign currency lending. Individual Ratings reflect a bank's standalone risk and do not take account of the potential for external support. BGB grew its loan portfolio by 56% in 2008 (99% in 2007) and reduced exposure to the largest 20 borrowers to 0.4x of equity at end-2008 from 2.3x of equity at end-2007. The seasoning of the bank's loan portfolio under worsening macroeconomic conditions, coupled with a high share of foreign currency lending (61% at end- 2008), are likely to noticeably increase the level of non- performing loans from the currently low level (loans overdue by 90 days and above were only 0.8% of gross loans at end-2008). However, Fitch believes that following a US$75 million capital injection from the shareholders in 2008, the bank has significant loss absorption capacity and is reasonably positioned to withstand the challenges of the deteriorating operating environment. BGB's Tier 1 Basel ratio improved to 22.6% at end-2008 from 12.6% at end-2007, and a further capital injection of US$75 million (equivalent to 75% of end-2008 capital) is planned for 2009. At the same time, BGB's reliance on wholesale funding and near term refinancing risks are mitigated by a high level of liquidity (cash, interbank placements and securities accounted for one third of non-equity funding at end-2008) and access to a liquidity support line from the shareholders (US$30 million of which was un- drawn at end-March 2009). The upside potential for all BGB's ratings is currently limited given country risks and the challenging operating environment. Downside pressure on the Long-term IDR would result from a further deterioration of Belarus' country risk and/or changes in Fitch's view on the likelihood of support from Gazprom and group companies. The Individual Rating could come under downward pressure if asset quality deteriorates considerably, for example in the case of a further substantial devaluation of the BYR, and in particular should the planned new equity injection not materialize for any reason. BGB is the seventh largest bank in Belarus with a 2% share of system assets at end-2008. BGB is 48% owned by Gazprom and 48% by Gazprombank. The bank focuses on lending to the Belarusian private sector, particularly SME and retail sectors. BGB's ratings are: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Stable -- Short-term foreign currency IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual Rating: upgraded to 'D/E' from 'E' CENTERTELECOM OAO: Fitch Lifts LT Issuer Default Rating to 'B+' --------------------------------------------------------------- Fitch Ratings has upgraded Russia-based OAO Centertelecom's ratings to Long-term Issuer Default 'B+' from 'B' and National Long-term 'A(rus)' from 'BBB(rus)'. The National senior unsecured rating was upgraded to 'A(rus)' from 'BBB(rus)'. Its Short-term IDR was affirmed at 'B'. The Outlooks on the Long-term IDR and National Long-term rating are Stable. "The fixed-line telecom business is likely to demonstrate strong resilience in the downturn which will support CT's financial performance. Although refinancing risks remain a concern, the company is planning dramatic capex cuts and operating expenditure savings in 2009, which will boost free cash flow generation and help it manage any debt redemption calls," said Nikolay Lukashevich, Senior Director in Fitch's European TMT team. Fitch notes that usage of both fixed line and mobile is unlikely to suffer significantly as a result of the economic crisis, particularly in the non-corporate segment. Although corporate revenues are under more pressure, this is mitigated by continuing broadband expansion and regulator-endorsed tariff increases on local services at slightly below the CPI inflation. The latest hike was in March this year at 8% on average. With no significant threats to revenues, margins will be supported by an ongoing cost- cutting programme. In light of tight credit conditions, the company is cutting capex in 2009, and potentially keeping a tight control on it over the medium term with an aim to boost free cash flow generation. Prior high investments in the network and completion of the universal telecoms service program at end-2008 have allowed CT to be flexible on capex for at least two years, without negatively impacting growth prospects or competitiveness. However, Fitch remains concerned with CT's refinancing and liquidity risks. Although the company had only RUB461 million of cash on its balance sheet at end-September 2008, since Q308 it has sought to preserve cash to meet any debt redemption calls. The largest short-term exposure is a RUB5.6 billion domestic bond maturing in August 2009. These risks are mitigated by a low and declining leverage (with an estimated net debt/EBITDA at slightly above 1.7x at end-2008) and strong free cash flow generation in 2009 and possibly in 2010. Fitch notes that the management is strongly committed to extracting cash from its business to repay debt. As a company under indirect government control and in a strategically important industry, CT benefits from special relationships with the largest state-controlled domestic banks, which improves the company's refinancing prospects. In addition, CT continues to be funded by private banks, with Orgresbank ('BBB+', Negative Outlook) recently announcing a principal agreement to issue a EUR27m loan to the company. The ratings also reflect CT's dominant position as a regional incumbent fixed-line telecom operator with a diversified and stable subscriber base and control over the last-mile infrastructure. With competition primarily driven by the long- term transition to mobile technology from the fixed-line, the so far mild pressure from fixed-to-mobile substitution in the voice segment has been compensated by the company's rapidly rising broadband market share and customer base. The regulatory environment remains benign for the entire fixed-line telecoms industry, including CT. The ratings also take into account the influence of 50.8% shareholder, Svyazinvest, on the decision- making process at CT and its potential lobbying support, although no direct cash support is expected for the company. CONSTRUCTION COMPANY: Court Names Temporary Insolvency Manager -------------------------------------------------------------- The Arbitration Court of Smolenskaya appointed A. Morozov as Temporary Insolvency Manager for LLC Construction Company-12 (TIN 6731043480,PSRN 1036758319663). The case is docketed under Case No. A62�238/2009,. He can be reached at: Post User Box 13 394038 Voronezh Russia The Debtor can be reached at: LLC Construction Company-12 Kirova St. 38-21 Smolensk Russia IZHEVSKIY AUTOREPAIR: Creditors Must File Claims by May 27 ---------------------------------------------------------- Creditors of LLC Izhevskiy Autorepair Plant (TIN 1833045015) have until May 27, 2009, to submit proofs of claims to: O. Tebenkov Insolvency Manager 50 let Pionerii St. 26 426033 Izhevsk Udmurtia Russia The Arbitration Court of Udmurtia commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A71�8371/2008-G15. The Debtor can be reached at: LLC Izhevskiy Autorepair Plant Vladivostokskaya St. 1a Izhevsk Udmurtia Russia IZOPLAST: Creditors Must File Claims by April 27 ------------------------------------------------ Creditors of LLC Izoplast (Chemicals Production) have until April 27, 2009, to submit proofs of claims to: V. Trostonetskaya Temporary Insolvency Manager Post User Box 6 630004 Novosibirsk Russia The Arbitration Court of Novosibirskaya will convene at 3:00 p.m. on June 3, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A45�19430/2008. The Debtor can be reached at: LLC Izoplast Fabrichnaya St.10 630007 Novosibirsk Russia MECHEL OAO: Shareholders Sue Firm on "False" Fin'l Statements ------------------------------------------------------------- Braden Reddall at Reuters reports Mechel OAO has been sued in the U.S. by shareholders accusing the company of not keeping investors up to date on a damaging 2008 antitrust probe and of making false financial statements. The report recalls the U.S.-listed mining and metals company was investigated in Russia for coking coal price-fixing and the Russian government fined Mechel and imposed a 15 percent price cut on the company. According to Reuters, in the lawsuit, the plaintiffs, led by shareholder Dean Frederick, accused Mechel of not disclosing enough information about its behavior, the investigation, the fines or the threat to future revenue, and that its "financial statements were materially false and misleading at all relevant times." The report relates the class action lawsuit, filed in the U.S. District Court for the Southern District of New York on April 8, is on behalf of those who bought the stock between Oct. 3, 2007 and July 25, 2008. The case is Frederick v. Mechel OAO, 09-cv-3617, U.S. District Court, Southern District of New York (Manhattan), according to Bloomberg News. Russia-based Mechel OAO (RTD:MTLRG) -- http://www.mechel.ru/-- is a vertically integrated mining and metals company. The mining business consists of coal, iron ore and nickel mines in Russia. The Company also provide coal washing services, both to the coal- mining subsidiaries and to third parties. The steel business comprises the production and sale of semi-finished steel products, carbon and specialty long products, carbon and stainless flat products and downstream metal products, including hardware, stampings and forgings. It is also engaged in the power business. In April 2008, it acquired Ductil Steel S.A. As of January 1, 2008, the Company had coal reserves totalling 510.3 million tons, of which approximately 44.4% was coking coal. On September 24, 2008, Mechel OAO, through its subsidiary, Mechel Service OOO, announced the acquisition of a 100% stake in HBL Holding GmbH. In February 2009, the Company acquired an 100% interest in Skyblock Limited. In February 2009, the Company acquired 100% interest in Bluestone ?oal. MIR DEREVA: Creditors Must File Claims by May 27 ------------------------------------------------ Creditors of LLC Mir Dereva (TIN 1326192324, PSRN 1041316017390) (Wood-Processing) have until May 27, 2009, to submit proofs of claims to: A. Kuznetsov Insolvency Manager Fedoseyenko St. 17/104 430001 Saransk Mordovia Russia The Arbitration Court of Mordovia will convene on Sept. 11, 2009, to hear bankruptcy proceedings. The case is docketed under Case No. A39�3527/2008. The Debtor can be reached at: LLC Mir Dereva Polezhayeva St. 2 Saransk Mordovia Russia NAV-DREV: Creditors Must File Claims by April 27 ------------------------------------------------ Creditors of LLC Nav-Drev (TIN 5223033672) have until April 27, 2009, to submit proofs of claims to: A. Gasparyan Temporary Insolvency Manager Apt.72 Polevaya St. 6/1 Kstovo 607650 Nizhegorodskaya Russia Tel: 9030415375. The Arbitration Court of Nizhegorodskaya will convene on July 21, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A43�32848 / 2008�36�289. The Debtor can be reached at: LLC Nav-Drev Klubnaya St. 5 Navashino Nizhegorodskaya Russia OM-STROY: Creditors Must File Claims by April 27 ------------------------------------------------ Creditors of LLC Om-Stroy-2001 (TIN 5503072032, PSRN 1035504007142) (Construction) have until April 27, 2009, to submit proofs of claims to: N. Utochenko Temporary Insolvency Manager Apt.136 Prospect Mira 106a 644089 Omsk Russia The Arbitration Court of Omskaya will convene on July 7, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A46�19198/2008. The Debtor can be reached at: LLC Om-Stroy-2001 24-ya Severnaya St. 172g Omsk Russia RG BRANDs: Moody's Downgrades Corporate Family Rating to 'B3' ------------------------------------------------------------- Moody's Investors Service has downgraded to B3 from B2 the corporate family rating and probability of default rating of JSC RG Brands. The ratings remain under review for possible downgrade. "The rating action reflects Moody's expectation that, despite the automatic price adjustment mechanisms embedded in most existing contracts between RG Brands and its suppliers, the depreciation of the Kazakh tenge will reduce the company's margins in 2009 and increase its mostly foreign-denominated debt," said Stefano del Zompo, lead analyst for RG Brands at Moody's. "This will likely lead to credit metrics beyond the targets set by Moody's for the rating category and a breach in the existing covenants in the first quarter of this year." The company's 2008 results were only slightly below Moody's expectation of EBITDA margins above 15% and Debt/EBITDA around 4.5x helped by effective management of working capital. For 2009, Moody's forecasts EBITDA margins in the low teens, a Debt/EBITDA ratio above 5.0x and coverage ratios trending toward par, which would make the company better positioned in the B3 rating category than the present B2, although Moody's recognizes the mostly long term nature of RG Brands' debt profile. "The current ratings reflect Moody's belief that the European Bank of Restructuring and Development will remain supportive of the company and will likely agree to an amendment of its covenants going forward to provide for the devaluation of the Kazakh tenge and the difficult market environment," explains Mr. del Zompo. "However, the headroom within the new covenant structure might remain limited in the medium term." The rating remains under review for possible further downgrade. Moody's review will continue to focus on: (1) the likelihood that the company will be able to renegotiate its existing covenants with the EBRD and its other banks, and maintain sufficient headroom under the new covenant structure; (2) the short- to medium-term prospects of the company and its capacity to withstand the current economic downturn; and (3) the company's financial plan and ability to improve credit metrics. The last rating action was implemented on 26 February 2009, when Moody's placed the company's B2 ratings under review for possible downgrade. Headquartered in Almaty, Kazakhstan, JSC RG Brands is a leading food and beverage producer in Central Asia. The company, which is 100% owned by the Resmi Group and RG Brands' management team, was established in 1994 and has rapidly grown through acquisitions. In 2007, the company reported sales and EBITDA of around KZT25 billion (US$220 million) and KZT3.4 billion (US$28.3 million), respectively, and is expected to report 2008 results broadly in line with the previous year's. SHULGINSKIY BREWERY: Creditors Must File Claims by April 27 ----------------------------------------------------------- Creditors of CJSC Shulginskiy Brewery have until April 27, 2009, to submit proofs of claims to: V. Rudenko Temporary Insolvency Manager Post User Box 12 630110 Novosibirsk Russia The Arbitration Court of Novosibirskaya will convene at 2:00 p.m. on Aug. 5, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A45�2614/2009,. The Debtor can be reached at: CJSC Shulginskiy Brewery Office 18 Yadrintsevskaya St. 55 630000 Novosibirsk Russia SIB-ENERGO-PROM: Altayskiy Bankruptcy Hearing Set September 9 ------------------------------------------------------------- The Arbitration Court of Altayskiy will convene at 10:45 a.m. on Sept. 9, 2009, to hear bankruptcy supervision procedure on LLC Sib-Energo-Prom (TIN 2221004127, PSRN 1022200893670) (Power Equipment Production). The case is docketed under Case No. A03� 1669/09B. The Temporary Insolvency Manager is: Yu.Rodionov Office 1 5-i Armii St. 4 Omsk Russia The Debtor can be reached at: LLC Sib-Energo-Prom Krasnoarmeyskiy prospect 81 656049 Barnaul Russia SISTEMA-HALS JSC: Fitch Puts 'B' Issuer Rating on Evolving Watch ---------------------------------------------------------------- Fitch Ratings has placed Russian property developer JSC Sistema- Hals' Long-term Issuer Default Rating and Short-term IDR of 'B', respectively, and National Long-term Rating of 'BBB-(BBB minus) (rus)' on Rating Watch Evolving. The rating action follows the announcement on April 7, 2009, that Bank VTB ('BBB'/Negative Outlook) may acquire a 51% stake in SH from Sistema Joint Stock Financial Corp. (Sistema, 'BB-'(BB minus)/Rating Watch Negative). The RWE status reflects the possibility that SH's ratings could be affirmed, downgraded or upgraded once the transaction is completed (which is subject to regulatory approval). Fitch currently notches up SH's ratings by approximately one to two levels to reflect the expectation of continuing support from its stronger majority shareholder (Sistema). Although Sistema does not guarantee SH's debt, the notching reflects the perceived linkage between the two entities (based on Fitch's Parent and Subsidiary Rating Linkage methodology), including Sistema's high level of ownership in SH, operational and family links, a shared brand name and cross-default linkage. This has been underlined over the past 12 months by tangible evidence of support from Sistema, including arms-length lending to SH from Sistema subsidiaries and the pledge of assets by Sistema to assist SH with external debt financing. However, should the deal with VTB be completed, Sistema will no longer be the majority shareholder of SH and therefore it is unlikely to continue offering the same level of financial support as previously. As the full terms of the transaction are currently unknown, it is unclear whether VTB will offer any form of support to SH going forward. Without a similar level of support, the ratings are likely to be downgraded by one to two notches to mirror SH's standalone credit profile. However, if VTB does offer substantial parental support, such as legal guarantees, the ratings may be upgraded to reflect VTB's stronger ability to offer financial assistance compared to Sistema, as reflected by its stronger credit rating. Fitch notes that irrespective of parental linkage considerations, the transaction could also have an impact on SH's standalone profile. VTB has declared its intention to restructure a portion of SH's debt, which could improve SH's standalone liquidity position and/or credit ratios, especially if a sizeable amount of short-term debt was to be refinanced. However, the standalone profile could also be negatively impacted if VTB decides to materially increase gross debt levels at SH, restructure the asset base (such as transferring or disposing of assets), or increase the level of secured debt (hence creating subordination issues for unsecured creditors). Fitch is also aware that one or more of SH's debt packages contain a change of control clause which could be triggered by the VTB transaction, which in turn could have a negative impact on SH's liquidity profile if one or more debt packages had to be prepaid as a result. The lack of visibility on VTB's intentions, and the impact this will have on SH's ratings are reflected in the RWE. In resolving the RWE, the agency will assess whether the transaction has any material impact on the parental linkage considerations and on the standalone profile of SH. Fitch's review will include an assessment of (i) SH's liquidity (including refinancing prospects and any change of control considerations), (ii) any changes to the asset base and project portfolio, (iii) SH's financial strategy (including a potential restructuring of debt and possible subordination), and (iv) parental linkage issues. Fitch will seek to resolve the RWE shortly after the transaction closes, which is anticipated to be within the next two to three months. STROY-AS: Creditors Must File Claims by May 27 ---------------------------------------------- Creditors of LLC Stroy-AS (TIN 4214024743) (Construction) have until May 27, 2009, to submit proofs of claims to: D.Kotin Insolvency Manager Office 203 Petrenko St. 13 Prokopyevsk 653052 Kemerovskaya Russia The Arbitration Court of Kemerovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A27�10383/2008�4. The Debtor can be reached at: LLC Stroy-AS Bryanskaya St. 12/45 Mezhdurechensk Kemerovskaya Russia TRANSCREDITBANK: Moody's Changes Outlook on 'D-' BFSR to Negative ----------------------------------------------------------------- Moody's Investors Service has changed the outlook on the D- bank financial strength rating, Ba1 long-term global foreign currency deposit rating as well as Ba1 senior unsecured debt rating of TransCreditBank to negative from stable and affirmed all of the bank's ratings. In addition, Moody's Interfax has also affirmed TCB's Aa1.ru National scale rating. Moscow-based Moody's Interfax is majority owned by Moody's, a leading global rating agency. The debt and deposit rating affirmations follow the recent announcement that the issuer rating of the bank's parent Russian Railways Joint Stock Company has been downgraded to Baa1 from A3 with a negative outlook. TCB's debt and deposit ratings incorporate Moody's assessment of high probability of support from Russian Railways in the event of need, given TCB's controlling ownership by Russian Railways and importance for its operations. In accordance with Moody's Joint Default Assessment Methodology, the downgrade by one notch of Russian Railways issuer rating has not affected TCB's debt and deposit ratings. The BFSR outlook change reflects Moody's view that the deteriorating operating environment is likely to lead to worsening asset quality which is likely to exert significant pressure on the bank's capitalization, liquidity and profitability. More positively, Moody's notes that a significant share of the bank's loan book (ca. 15% of the corporate loans book at end-Q3 2008) is issued to group entities of Russian Railways or entities whose credit risk is closely linked to that of Russian Railways' performance benefiting from their higher-than-average credit quality. In respect of their retail portfolio, up to 80% of this loan portfolio is granted to employees of Russian Railways. "Although the average credit quality of TCB's loan book is therefore better than that of its peers, the non-Russian Railways loan book is still exposed to the same risks of deteriorating macroeconomic environment. In addition, the economic environment is also negatively affecting Russian Railways companies as reflected in a negative outlook on Russian Railways Baa1 issuer rating," says Vladlen Kuznetsov, a Moscow-based Moody's Assistant Vice President - Analyst, and lead analyst for this issuer. TCB's funding base is concentrated, with ca. 40% of the customer accounts represented by Russian Railways. At the same time, the bank is significantly dependant on wholesale funding which accounted for 30% of total funding, although the largest part is longer term (more than one year). While there are currently no immediate concerns about liquidity, the significantly deteriorated asset quality accompanied by significant withdrawals from Russian Railways or from any other large customer, and/or large wholesale debt repayments are likely to exert pressure on liquidity. The negative outlook on the TCB's debt and deposit rating is a reflection of i) some uncertainty with regard to the level of Russian Railways' commitment to maintaining its controlling ownership and its willingness to extend support going forward as evidenced by management's intention to reduce its stakes in the bank and classifying TCB as a non-core asset; ii) negative outlooks on TCB's BFSR and Russian Railways' issuer ratings reflecting the possible deterioration of their credit strength. Moody's notes that while TCB's shareholders have been committed in the past to capitalizing the bank, a decrease in the parental support assumptions which could be decided if Russian Railways' ownership (direct and indirect) were to decline significantly. This would likely prompt a downgrade of TCB's deposit and debt ratings. Moody's previous rating action on TCB was on July 17, 2008, when the rating agency affirmed the bank's ratings. Headquartered in Moscow, TCB had total assets of RUB189 billion and equity of RUB14.4 billion at end-Q3 2008. TCB's main focus is on servicing the needs of Russian Railways and the bank has its branch network in locations that enable it to better provide services to its parent's regional entities and their employees. UC RUSAL: Creditors Shun Holding Co.'s Debt-for-Shares Proposal --------------------------------------------------------------- United Co. Rusal's holding company, Basic Element, said its creditors aren't interested in converting debt into shares and that loan restructuring talks need to be completed by the fall, Yuriy Humber at Bloomberg News reports. Basic Element, which holds 54 percent of Rusal, offered banks shares of some industrial assets and doesn't rule out ceding stakes to reduce borrowings, the report relates citing Deputy Chief Executive Officer Olga Zinovieva. Companies fully or part-owned by Basic Element have total debts of more than US$20 billion, Ms. Zinovieva said as cited by the news agency, adding the investment company may have to sell some assets. "In some cases, we're in talks for banks to take a stake in our business, but they don�t want to," Ms. Zinovieva said in an e- mailed answer to questions from Bloomberg News. "Not every creditor is ready to invest billions in new technology and development." Although as Ms. Zinovieva said Basic Element itself has almost no debt, Rusal, which signed a standstill agreement with its lenders in March, has until early May to negotiate the terms of a long- term debt. Rusal is seeking to extend its repayments on the loan to five to 10 years and link them to the aluminum price in London, Bloomberg News says. As reported in the Troubled Company Reporter-Europe on March 20, 2009, Russia's First Deputy Prime Minister Igor Shuvalov, as cited by Bloomberg News, said Rusal won't be bailed out by the government. According to the Bloomberg News, Mr. Shuvalov said he's held "unofficial" talks with Rusal's creditors to make clear that the government isn't considering buying a stake in the company or restructuring the company's debt. However, Mr. Shuvalov, as cited by the news agency, said the government may allow Rusal to pay foreign creditors in shares. Rusal isn't counting on financial help from the government and plans to reorganize its borrowings and cut costs, the Moscow-based company said in an e-mail obtained by Bloomberg News. In a statement, Rusal said the standstill agreement covers more than 30 transactions, including syndicated and bi-lateral loan agreements, bank guarantees and letters of credit, which involve more than 70 banks. The agreement obtained support from majority of RUSAL's international lending banks and Russian lenders as well, the company said. At present, Rusal's debt is US$14 billion, including US$7.4 billion owed to its international banks. Credit Suisse Group, BNP Paribas SA, Merrill Lynch & Co., ABN Amro Holding NV, Citigroup Inc., Natixis, Commerzbank AG, ING Groep NV and Calyon are among Rusal's creditors, according to data compiled by Bloomberg. In December 2008, Rusal initiated a dialogue with its international lending banks who formed a coordinating committee to continue discussions with the company and its advisers about potential amendments of the company's credit facilities in view of the situation in the aluminum market. The agreement follows Rusal's recent comprehensive program designed to reduce costs, optimize the production process, cut production costs and increase the overall efficiency of the business. About UC RUSAL Headquartered in Moscow, Russia, United Company RUSAL -- http://www.rusal.com/-- is an aluminum producer. Formed in 2000 from various parts of the old Soviet state apparatus, RUSAL produces about 4 million tons of aluminum, 11 million tons of alumina, and 6 million tons of bauxite. Its aluminum business include packaging and foil operations in addition to a network of smelters. Those Soviet spare parts were significantly augmented in 2007 when the company merged with fellow Russian aluminum producer Sual and Glencore's alumina unit. RUSAL is majority owned by Board member Oleg Deripaska, who had owned the company completely prior to the merger. URAL-LES: Creditors Must File Claims by May 27 ---------------------------------------------- Creditors of LLC Ural-Les (Lumbering) have until May 27, 2009, to submit proofs of claims to: A. Fedorets Insolvency Manager Gorkogo St. 31 620075 Yekaterinburg Russia The Arbitration Court of Sverdlovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A60�12261/2008-S11. The Debtor can be reached at: LLC Ural-Les Gagarina St. 1/2A Russkiy Potam Achitskiy 623244 Sverdlovskaya Russia VOLGA-TECH-PROM: Creditors Must File Claims by April 27 ------------------------------------------------------- Creditors of LLC Volga-Tech-Prom (TIN 6330021602, PSRN 1026303117455) (Chemical Industry) have until April 27, 2009, to submit proofs of claims to: V. Gordeyev Temporary Insolvency Manager Office 2 Zavodskoe Shosse 13 443022 Samara Russia The Arbitration Court of Samarskaya commenced bankruptcy supervision procedure. The case is docketed under Case No. A55� 2009,0/2008. The Debtor can be reached at: LLC Volga-Tech-Prom Ordzhnokidze St. 1 Chapayevsk 446116 Samarskaya Russia YUZHNO URALSKIY: Creditors Must File Claims by April 27 ------------------------------------------------------- Creditors of CJSC Yuzhno Uralskiy Mechanical Plant (TIN 7453092098) have until April 27, 2009, to submit proofs of claims to: Ye. Kleyn Temporary Insolvency Manager Fedorova St. 1a Chelyabinsk 454048 Chelyabinskaya Russia The Arbitration Court of Chelyabinskaya commenced bankruptcy supervision procedure. The case is docketed under Case No. A76� 26134/2008�32-7. The Debtor can be reached at: CJSC Yuzhno-Uralskiy Mechanical Plant Entuziastov St. 2 Chelyabinsk Russia * Fitch Cuts Individual Ratings on 5 Foreign-Owned Russian Banks ---------------------------------------------------------------- Fitch Ratings has affirmed five foreign-owned Russian banks' Long- term Issuer Default Ratings at 'BBB+' with a Negative Outlook, whilst downgrading the banks' Individual Ratings. The Individual ratings of Rosbank, ZAO Raiffeisenbank and ZAO UniCredit Bank have been downgraded to 'D' from 'C/D' and Absolut Bank and Orgresbank to 'D/E' from 'D'. The downgrade of the Individual Ratings reflects ongoing and likely future asset quality deterioration at the banks in the currently difficult Russian operating environment. The downgrades also take account of the relatively tight capital positions under which parent banks are operating their subsidiaries, and therefore the subsidiary banks' limited ability to absorb loan losses without requiring recapitalization from their owners. Individual Ratings reflect a bank's standalone risk and do not take account of the potential for external support. The affirmation of the five banks' Long-term IDRs at 'BBB+' reflects Fitch's view that the probability of the banks receiving support, in case of need, remains high due to the still strong ability and willingness of their owners to provide assistance. Rosbank is 57.57%-owned by France's Societe Generale ('AA-'((AA minus))/Negative); ZAO Raiffeisenbank is 99.97%-owned by Raiffeisen International Bank-Holding AG, which in turn is 68.5%- owned by Austria's Raiffeisen Zentralbank Osterreich AG (Support Rating '1'); ZAO UniCredit Bank is 100%-owned by UniCredit S.p.A. ('A+'/Negative) through its subsidiary UniCredit Bank Austria AG; Absolut Bank is 95%-owned by Belgium-based KBC Bank ('A+'/Negative); Orgresbank is 91%-owned by Nordea Bank AB ('AA-'((AA minus))/Stable) and the acquisition of an additional 9% by Nordea Bank AB is in the process of being registered by the Central Bank of Russia. The assessment of the banks referenced in this comment forms the latest part of a broader Fitch review of all the banks rated by the agency in Russia, with the main focus on asset quality, loss absorption capacity and contingency recapitalization plans. The rating actions are: Absolut Bank -- Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook Negative -- Senior unsecured debt: affirmed at 'BBB+' -- Short-term foreign currency IDR: affirmed at 'F2' -- Individual Rating: downgraded to 'D/E' from 'D' -- Support Rating: affirmed at '2' -- National Long-term Rating: affirmed at 'AAA(rus) '; Outlook Stable Orgresbank -- Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook Negative -- Short-term foreign currency IDR: affirmed at 'F2' -- Individual Rating: downgraded to 'D/E' from 'D' -- Support Rating: affirmed at '2' -- National Long-term Rating: affirmed at 'AAA(rus) '; Outlook Stable Rosbank -- Long-term foreign and local currency IDR: affirmed at 'BBB+'; Outlook Negative -- Senior unsecured debt: affirmed at 'BBB+'; Short-term rating affirmed at 'F2' -- Short-term foreign currency IDR: affirmed at 'F2' -- Individual Rating: downgraded to 'D' from 'C/D' -- Support Rating: affirmed at '2' -- National Long-term Rating: affirmed at 'AAA(rus) '; Outlook Stable ZAO Raiffeisenbank -- Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook Negative -- Senior unsecured debt: affirmed at 'BBB+'; Short-term rating affirmed at 'F2' -- Short-term foreign currency IDR: affirmed at 'F2' -- Individual Rating: downgraded to 'D' from 'C/D' -- Support Rating: affirmed at '2' -- National Long-term Rating: affirmed at 'AAA(rus) '; Outlook Stable ZAO UniCredit Bank -- Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook Negative -- Long-term local currency IDR: affirmed at 'BBB+'; Outlook Negative -- Short-term foreign currency IDR: affirmed at 'F2' -- Short-term local currency IDR: affirmed at 'F2' -- Individual Rating: downgraded to 'D' from 'C/D' -- Support Rating: affirmed at '2' * RUSSIA: Overdue Loans Increasing 20% a Month, Sberbank CEO Says ----------------------------------------------------------------- Russian overdue bank loans are increasing by 20 percent a month, a pace that will bankrupt weak lenders as the financial crisis deepens, Bloomberg News reports citing OAO Sberbank Chief Executive Officer German Gref at a conference in Moscow Wednesday last week. The report relates according to Mr. Gref, a former economy minister, businesses and consumers are still struggling to repay loans, more than half a year after the crisis started, paving the way for a new round of problems. Russian companies and individuals owe RUR18.4 trillion (US$549 billion) to domestic banks, Bloomberg News says citing central bank data. The government expects the amount of non-performing loans to rise to 10 percent by the end of the year from 3.2 percent at the start of March, the report says. Mr. Gref said about 3.7 percent of Russian bank loans are delinquent now, the report relates. Prime Minister Vladimir Putin's government plans to spend RUR1.4 trillion this year to bolster banks and stimulate the economy, Bloomberg News says. ========= S P A I N ========= CM BANCAJA: Fitch Puts 'CC'-Rated Class E Notes on Watch Negative ----------------------------------------------------------------- Fitch Ratings has placed CM Bancaja 1, Fondo De Titulizacion De Activos's on Rating Watch Negative. The transaction is a cash flow securitization of a static pool of secured loans granted by Caja de Ahorros de Valencia Castellon y Alicante (rated 'A-'(A minus)/Stable/'F2') to Spanish small and medium-sized enterprises and bigger companies. -- Class A (ISIN ES0379349006): 'AAA'; placed on RWN -- Class B (ISIN ES0379349014): 'A'; placed on RWN -- Class C (ISIN ES0379349022): 'BBB'; placed on RWN -- Class D (ISIN ES0379349030): 'BB'; placed on RWN -- Class E (ISIN ES0379349048): 'CC'; placed on RWN The RWN reflects the potential for heightened concentration risk within the underlying portfolio. As of February 28, 2009, the 10 largest obligors made up 44.9% of the portfolio and their weighted average remaining term is 8.6 years. Due to the long-dated nature of these assets, Fitch believes the concentration of the top 10 largest obligors is likely to become more significant as the transaction de-leverages. The largest obligor, which made up 9.2% of the portfolio, had payments in arrears. Fitch understands that the obligor is now performing but has had liquidity problems in the past. The portfolio has not seen any significant deterioration, with 90+ day delinquencies at 2% of outstanding portfolio balance. As the transaction is meeting the stated conditions for pro-rata amortization, the outstanding balances of the class B, C and D notes have started amortizing pro rata with the Class A notes since September 2008. The reserve fund and class E notes have also started amortizing since December 2008. As delinquency levels are fairly low, the pro-rata amortization of the class A, B, C and D notes as well as the amortization of the reserve fund and class E notes are likely to continue, which reduces credit support for the whole structure and the senior notes in particular. Although credit enhancement has doubled since close, the transaction remains vulnerable to defaults by the large obligors. Fitch has thus requested more detailed information on the largest obligors and the rest of the portfolio in order to update its default probabilities and recovery assumptions. Due to the low number of obligors, Fitch intends to apply its corporate CDO methodology to the transaction in resolving the RWNs. The issuer is legally represented and managed by Titulizacion de Activos SGFT, SA (the Sociedad Gestora), a special-purpose management company with limited liability incorporated under the laws of Spain. METROVACESA SA: Owner Inks Debt Refinancing Deal ------------------------------------------------ Clara Vilar at Reuters reports that Spain's Sanahuja family, which holds a 30 percent stake in Metrovacesa SA, said on Wednesday that it has reached a deal with creditors to refinance a EUR486 (US$641 million) syndicated loan. The deal, the report says, allows the Sanahuja family's company, Sacresa, to delay repayment of the debt for another four years. According to the report, the Sacresa loan was made by La Caixa, Barclays, Caixa Catalunya and the Catalan Finance Institute and is backed by Metrovacesa shares. Sacresa, as cited by the report, said on Monday the refinancing agreement "allows the Sanahuja family to provide stability to its stake in Metrovacesa." The report notes the Sanahujas still have another EUR700 million syndicated loan outstanding, led by HSBC and also backed by Metrovacesa shares. About Metrovacesa SA Headquartered in Madrid, Spain, Metrovacesa SA (MCE:MVC) -- http://www.metrovacesa.es/-- is a company active in the real estate sector. Its activities include the acquisition, purchase, promotion and management of properties primarily for rental purposes. Its portfolio is structured in six divisions: Offices, comprising over 500,000 square meters of leasable surface area; Shopping Centers, including five operating centers and two in development; Hotels, comprising 14 operating hotels and three in construction; Homes, providing residential property construction and development services; Car Parks, operating 13 parking lots located in Madrid, Valencia, Soria and Santa Cruz de Tenerife, and Land, which portfolio consists of more than three million square meters of land. The Company is a parent of Grupo Metrovacesa, a group which comprises a number of entities with operations established in the United Kingdom, Germany and France. METROVACESA SA: To Review Demerger Deal With French Affiliate ------------------------------------------------------------- Paul Day at Reuters reports that Metrovacesa SA said on Wednesday it would review its demerger deal with its French affiliate, Gecina. The report relates Gecina said on Tuesday its board had voted against the split, which would have given the unit its independence from Metrovacesa for a portfolio of office properties in Paris which in 2007 had a gross asset value of EUR2.3 billion. The report notes analysts said the split, which was proposed in 2007, had since become financially unattractive for Gecina following a sharp drop in property prices. Metrovacesa, as cited by the report, said it would look into the Gecina decision to see if circumstances now made the demerger deal unworkable. The report recalls the two companies agreed to split over a power struggle between shareholder factions who disagreed on the management and direction Metrovacesa was taking following the companies' merger. About Metrovacesa SA Headquartered in Madrid, Spain, Metrovacesa SA (MCE:MVC) -- http://www.metrovacesa.es/-- is a company active in the real estate sector. Its activities include the acquisition, purchase, promotion and management of properties primarily for rental purposes. Its portfolio is structured in six divisions: Offices, comprising over 500,000 square meters of leasable surface area; Shopping Centers, including five operating centers and two in development; Hotels, comprising 14 operating hotels and three in construction; Homes, providing residential property construction and development services; Car Parks, operating 13 parking lots located in Madrid, Valencia, Soria and Santa Cruz de Tenerife, and Land, which portfolio consists of more than three million square meters of land. The Company is a parent of Grupo Metrovacesa, a group which comprises a number of entities with operations established in the United Kingdom, Germany and France. =========== S W E D E N =========== GENERAL MOTORS: Creditors to Decide on Saab Fate Today ------------------------------------------------------ Agence France-Presse reports that creditors will decide in a court hearing today, April 13, if General Motors Corp. Swedish unit Saab Automobile AB's legal restructuring process can continue. Swedish news agency TT relates that some 1,300 creditors have been summoned to the hearing in the Vaenersborg district court in southwestern Sweden. If any of the creditors opposes the restructuring process that Saab started on February 20 to stave off bankruptcy and become an independent unit, the company would either have to declare bankruptcy or seek a buyer. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on November 10, 2008, General Motors Corporation's balance sheet at September 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. General Motors Corp. admitted in its viability plan submitted to the U.S. Treasury on February 17 that it considered bankruptcy scenarios, but ruled out the idea, citing that a Chapter 11 filing would result to plummeting sales, more loans required from the U.S. government, and the collapse of dealers and suppliers. A copy of GM's viability plan is available at: http://researcharchives.com/t/s?39a4 The U.S. Treasury and U.S. President Barack Obama's automotive task force are currently reviewing the Plan, which requires an additional US$16.6 billion on top of US$13.4 billion already loaned by the government to GM. As reported in the Troubled Company Reporter on November 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on November 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. ===================== S W I T Z E R L A N D ===================== BAUHOF ARCHITEKTEN: Creditors Must File Claims by April 17 ---------------------------------------------------------- Creditors owed money by LLC Bauhof Architekten are requested to file their proofs of claim by April 17, 2009, to: Michael Stoller Sickingerstrasse 6 3014 Bern Switzerland The company is currently undergoing liquidation in Bern. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 1, 2008. GST GREPPER: Deadline to File Proofs of Claim Set April 20 ---------------------------------------------------------- Creditors owed money by LLC GST Grepper are requested to file their proofs of claim by April 20, 2009, to: Zistli 9 Steinegg 9050 Appenzell Switzerland The company is currently undergoing liquidation in Appenzell. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Feb. 20, 2009. HUMLEN TRADING: Creditors Have Until April 20 to File Claims ------------------------------------------------------------ Creditors owed money by JSC Humlen Trading are requested to file their proofs of claim by April 20, 2009, to: JSC Rosenberg Treuhand & Revision Rosenbergstrasse 72 9000 St. Gallen Switzerland The company is currently undergoing liquidation in St. Gallen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 15, 2007. IPFS JSC: Proof of Claim Filing Deadline is April 22 ---------------------------------------------------- Creditors owed money by JSC IPFS International Patient Financial Services Corporation are requested to file their proofs of claim by April 22, 2009, to: Huobmattstrasse 3 6045 Meggen Switzerland The company is currently undergoing liquidation in Meggen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Jan. 26, 2009. M&V ADMINISTRATORS: Creditors' Proofs of Claim Due by April 20 -------------------------------------------------------------- Creditors owed money by LLC M&V Administrators are requested to file their proofs of claim by April 20, 2009, to: Trust Company Igma-Treuhand Maria Trninic Stauffacherstrasse 1 6020 Emmenbrucke Switzerland The company is currently undergoing liquidation in Luzern. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Dec. 12, 2008. MARTIN LEHNER: April 20 Set as Deadline to File Claims ------------------------------------------------------ Creditors owed money by LLC Martin Lehner are requested to file their proofs of claim by April 20, 2009, to: Martin Lehner Schlossgasse 16 5723 Teufenthal Switzerland The company is currently undergoing liquidation in Teufenthal AG. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Feb. 24, 2009. MORKER COACHING: Creditors Must File Proofs of Claim by April 20 ---------------------------------------------------------------- Creditors owed money by LLC Morker Coaching & Consulting are requested to file their proofs of claim by April 20, 2009, to: Rene Morker Kirchweg 30 8102 Oberengstringen Switzerland The company is currently undergoing liquidation in Oberengstringen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on March 6, 2009. OVAG INTERNATIONAL: Deadline to File Claims Set April 22 -------------------------------------------------------- Creditors owed money by JSC OVAG International Collections are requested to file their proofs of claim by April 22, 2009, to: Huobmattstrasse 3 6045 Meggen Switzerland The company is currently undergoing liquidation in Meggen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Jan. 26, 2009. PROXIMUS HELVETICA: Creditors Have Until April 17 to File Claims ---------------------------------------------------------------- Creditors owed money by LLC Proximus Helvetica are requested to file their proofs of claim by April 17, 2009, to: Josef Schopfer JSC KS Treuhand Bahnhofstrasse 14 9450 Altstatten Switzerland The company is currently undergoing liquidation in Altstatten. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Feb. 24, 2009. STAHLIMPEX LLC: Proof of Claim Filing Deadline is April 20 ---------------------------------------------------------- Creditors owed money by LLC Stahlimpex are requested to file their proofs of claim by April 20, 2009, to: Rene Marti Schwyzerstrasse 30 8805 Richterswil Switzerland The company is currently undergoing liquidation in C Zurich RT. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Jan. 13, 2009. UBS AG: Bans Managers from Travelling Abroad Amid US Fraud Probe ---------------------------------------------------------------- BBC News reported that UBS AG has banned company managers who deal with foreign clients from travelling abroad amid an ongoing US fraud investigation. UBS, BBC disclosed, is being investigated by the US authorities over alleged fraud and tax evasion involving US citizens. UBS, however, denied the travel ban had been put in place specifically to protect senior staff from American authorities, BBC noted. BBC recalled the bank earlier gave US officials the names of some 300 Americans it has advised, but refused to identify 52,000 others. Charges As reported in the Troubled Company Reporter-Europe on Feb. 20, 2009, the U.S. Securities and Exchange Commission said it filed Feb. 18 an enforcement action against UBS, charging the firm with acting as an unregistered broker-dealer and investment adviser. The SEC's complaint, filed in the U.S. District Court for the District of Columbia, alleged that UBS's conduct facilitated the ability of certain U.S. clients to maintain undisclosed accounts in Switzerland and other foreign countries, which enabled those clients to avoid paying taxes related to the assets in those accounts. UBS agreed to settle the SEC's charges by consenting to the issuance of a final judgment that permanently enjoins UBS and orders it to disgorge US$200 million. In connection with a related criminal investigation, UBS entered into a deferred prosecution agreement with the Department of Justice pursuant to which UBS will pay an additional US$180 million in disgorgement, as well as US$400 million in tax-related payments. As alleged in the SEC's complaint, from at least 1999 through 2008, UBS acted as an unregistered broker-dealer and investment adviser to thousands of U.S. persons and offshore entities with United States citizens as beneficial owners. UBS had at least 11,000 to 14,000 of such clients and held billions of dollars of assets for them. The U.S. cross-border business provided UBS with revenues of US$120 million to US$140 million per year. The SEC also alleged that UBS conducted that cross-border business largely through client advisers located primarily in Switzerland, who were not associated with a registered broker-dealer or investment adviser. These client advisers traveled to the U.S., on average, two to three times per year on trips that generally varied in duration from one to three weeks. In many instances, the client advisers attended exclusive events such as art shows, yachting events, and sporting events that were often sponsored by UBS, for the purpose of soliciting and communicating with United States cross-border clients. UBS also used other U.S. jurisdictional means such as telephones, facsimiles, mail and e- mail to provide securities services to its U.S. cross-border clients. The SEC further alleged that UBS was aware that it was required to be registered with the SEC. UBS took action to conceal its use of U.S. jurisdictional means to provide securities services. Among other things, client advisers typically traveled to the U.S. with encrypted laptop computers that they used to provide account- related information, to show marketing materials for securities products, and occasionally to communicate orders for securities transactions to UBS in Switzerland. Client advisers also received training on how to avoid detection by U.S. authorities of their activities in the U.S. About UBS AG Based in Zurich, Switzerland, UBS AG (VTX:UBSN) -- http://www.ubs.com/-- is a global provider of financial services for wealthy clients. UBS's financial businesses are organized on a worldwide basis into three Business Groups and the Corporate Center. Global Wealth Management & Business Banking consists of three segments: Wealth Management International & Switzerland, Wealth Management US and Business Banking Switzerland. The Business Groups Investment Bank and Global Asset Management constitute one segment each. The Industrial Holdings segment holds all industrial operations controlled by the Group. Global Asset Management provides investment products and services to institutional investors and wholesale intermediaries around the globe. The Investment Bank operates globally as a client-driven investment banking and securities firm. The Industrial Holdings segment comprises the non-financial businesses of UBS, including the private equity business, which primarily invests UBS and third-party funds in unlisted companies. * * * As reported in the Troubled Company Reporter-Europe on March 9, 2009, Fitch Ratings downgraded UBS's Individual rating to 'D' from 'C' reflecting Fitch's concerns over the medium-term earnings outlook for the bank amid the impact of ongoing reputational and litigation issues on the stability of its key private banking and wealth management franchise and persistently challenging market conditions facing its investment banking franchise. ============= U K R A I N E ============= AMIK LLC: Creditors Must File Claims by April 20 ------------------------------------------------ Creditors of LLC Amik (EDRPOU 32582963) have until April 20, 2009, to submit proofs of claim to: N. Vishnevskaya Insolvency Manager Komsomolsky Avenue 15-39 83000 Donetsk Ukraine The Economic Court of Donetsk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 45/203. The Court is located at: The Economic Court of Donetsk Artem street 157 Donetsk Ukraine The Debtor can be reached at: LLC Amik Kuybishev St. 42 83102 Donetsk Ukraine ATIKA-DESIGN LLC: Creditors Must File Claims by April 19 -------------------------------------------------------- Creditors of LLC Atika-Design (EDRPOU 32541010) have until April 19, 2009, to submit proofs of claim to: J. Bagno Insolvency Manager Trubnikov Avenue 105/3 Nikopol 53200 Dnepropetrovsk Ukraine The Economic Court of Dnepropetrovsk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No B15/68-09. The Court is located at: The Economic Court of Dnepropetrovsk Kujbishev St. 1a 49600 Dnepropetrovsk Ukraine The Debtor can be reached at: LLC Atika-Design Kirov St. 98 Dnepropetrovsk Ukraine AZOV PHARMACEUTICAL: Court Starts Bankruptcy Procedure ------------------------------------------------------ The Economic Court of Donetsk commenced bankruptcy supervision procedure on LLC Science-Production Firm Azov Pharmaceutical Equipment (EDRPOU 24159107). The Temporary Insolvency Manager is: S. Pilipenko Office 81 Metallurgov Avenue 25 Mariupol 87500 Donetsk Ukraine The Court is located at: The Economic Court of Donetsk Artem Street 157 Donetsk Ukraine The Debtor can be reached at: LLC Science-Production Firm Azov Pharmaceutical Equipment Metropolistskaya St. 51 Mariupol 87515 Donetsk Ukraine DONETSKSTEEL CJSC: Fitch Junks Issuer Default Ratings from 'B-' --------------------------------------------------------------- Fitch Ratings has downgraded Ukrainian-based CJSC Donetsksteel Iron and Steel Works' Long-term foreign and local currency Issuer Default ratings to 'CCC' from 'B-' (B minus), Short-term foreign and local currency IDRs to 'C' from 'B', National Long-term rating and National senior unsecured rating to 'BB-(BB minus)(ukr)' from 'BBB-(BBB minus)(ukr)' and National Short-term rating to 'B(ukr)' from 'F3(ukr)'. All ratings remain on Rating Watch Negative. At the same time, Fitch has withdrawn Donetsksteel's ratings. Fitch will no longer provide ratings or analytical coverage on this issuer. The downgrades and RWN reflect Fitch's expectation that Donetsksteel's financial position is likely to weaken over the next 12 months following the deterioration in the coal and metal market environment which Fitch believes will continue longer than expected. This increases the likelihood of a breach of covenants over the next 12 months of the net debt/EBITDA ratio (net leverage) and the EBITDA/net interest expense ratio (net interest coverage), which are present in Donetsksteel's loan agreements with several banks. EOM INFORM: Court Starts Bankruptcy Supervision Procedure --------------------------------------------------------- The Economic Court of Donetsk commenced bankruptcy supervision procedure on OJSC EOM Inform (EDRPOU 05703158). The Temporary Insolvency Manager is: I. Bilenko Office 17 Shepelev St. 6 Gorlovka 84624 Donetsk Ukraine The Court is located at: The Economic Court of Donetsk Artem Street 157 Donetsk Ukraine The Debtor can be reached at: OJSC EOM Inform Mechanical St. 14 Torez 86607 Donetsk Ukraine I. L. Z. FRUIT: Creditors Must File Claims by April 19 ------------------------------------------------------ Creditors of LLC I. L. Z. FRUIT (EDRPOU 31861424) have until April 19, 2009, to submit proofs of claim to: E. Kondra Insolvency Manager Office 48 Kozatskaya St. 14 Energodar 71500 Zaporozhye Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 44/79-b. 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 I. L. Z. Fruit Volinskaya St. 34/1 03151 Kiev Ukraine KRASNY LUCH: Creditors Must File Claims by April 19 --------------------------------------------------- Creditors of STATE Enterprise Krasny Luch Shaft-Sinking Department (EDRPOU 24855054) have until April 19, 2009, to submit proofs of claim to: N. Khaylo Insolvency Manager Karbishev St. 12/157 Stakhanov 94000 Lugansk Ukraine The Economic Court of Lugansk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 20/9?. The Court is located at: The Economic Court of Lugansk Great Patriotic War square 3a 91000 Lugansk Ukraine The Debtor can be reached at: State Enterprise Krasny Luch Shaft-Sinking Department Pogorelov St. 9 Krasny Luch Lugansk Ukraine LAN LLC: Creditors Must File Claims by April 20 ----------------------------------------------- Creditors of LLC Lan (EDRPOU 32505134) have until April 20, 2009, to submit proofs of claim to: I. Cherny Insolvency Manager Post Office Box 89 01024 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No B3/222-08. The Court is located at: The Economic Court of Kiev Komintern Street 16 01032 Kiev Ukraine The Debtor can be reached at: LLC Lan Khomenko St. 15 Ivankov Kiev Ukraine SMOLINE AGRICULTURAL: Creditors Must File Claims by April 19 ------------------------------------------------------------ Creditors of OJSC Smoline Agricultural Machine-Technological Station (EDRPOU 03117458) have until April 19, 2009, to submit proofs of claim to: P. Dotsenko Insolvency Manager Office 2 Popovich St. 3 Novoukrainka 27100 Kirovograd Ukraine The Economic Court of Kirovograd commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 11/112. The Court is located at: The Economic Court of Kirovograd Lunacharsky St. 22 25002 Kirovograd Ukraine The Debtor can be reached at: OJSC Smoline Agricultural Machine-Technological Station Smoline Maloviskovsky 26223 Kirovograd Ukraine SVETLANA LLC: Creditors Must File Claims by April 19 ---------------------------------------------------- Creditors of LLC Svetlana (EDRPOU 13483678) have until April 19, 2009, to submit proofs of claim to: D. Avilov Insolvency Manager Office 33 Alexandrov St. 1 83030 Donetsk Ukraine The Economic Court of Donetsk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No 57/15b. The Court is located at: The Economic Court of Donetsk Artem Street 157 Donetsk Ukraine The Debtor can be reached at: LLC Svetlana Fedor Zaytsev St. 46-A 83086 Donetsk Ukraine ZACHEPILOVKA MILK: Creditors Must File Claims by April 19 --------------------------------------------------------- Creditors of LLC Milk Product � Zachepilovka Milk Plant (EDRPOU 32548718) have until April 19, 2009, to submit proofs of claim to: A. Darmostuk Insolvency Manager Office 33 Mironositskaya St. 65 61002 Kharkov Ukraine The Economic Court of Kharkov commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No B-19/185-08. The Court is located at: The Economic Court of Kharkov Svoboda Square 5 61022 Kharkov Ukraine =========================== U N I T E D K I N G D O M =========================== ARGON CAPITAL: Moody's Cuts Rating on GBP750 Mil. Notes to 'Ba2' ---------------------------------------------------------------- Moody's Investors Service announced it has downgraded and left on review for further possible downgrade its ratings of one class of notes issued by Argon Capital Limited Company. The transaction is a repacking of Preference Shares issued by Royal Bank of Scotland PLC. This rating action follows the downgrade of the preference share rating of Royal Bank of Scotland Group PLC to Ba2 on review for possible downgrade from A3. The rating of the Series 100 notes is a pass-through of this preference shares rating. Moody's initially analyzed and continues to monitor this transaction using primarily the methodology and its supplements for repackaged securities as described in Moody's Special Reports below: -- Repackaged Securities (October 2001) -- Moody's Refines It's Approach to Rating Structured Notes (July 1997) The rating action is: Argon Capital PLC: (1) Series 100 GBP750,000,000 Perpetual Non-Cumulative Securities: -- Current Rating: Ba2, on review for possible downgrade -- Prior Rating: A3 -- Prior Rating Date: 24 February 2009, downgraded to A3 from A1 under review for possible downgrade CYCLONE MOBILITY: Appoints Administrators from Tenon Recovery ------------------------------------------------------------- Christopher Ratten and Jeremy Woodside of Tenon Recovery were appointed joint administrators of Cyclone Mobility and Fitness Ltd. on March 19, 2009. The company can be reached at: Cyclone Mobility and Fitness Ltd. Unit 5 Apex Court Bassendale Road Wirral International Business Park Bromborough Wirral CH62 3RE England DUFFS 93 LTD: Appoints Joint Administrators from Baker Tilly ------------------------------------------------------------ Andrew Martin Sheridan and Simon Peter Bower of Baker Tilly Restructuring and Recovery LLP were appointed joint administrators of Duffs 93 Ltd. on March 25, 2009. The company can be reached through Baker Tilly Restructuring and Recovery LLP at: Hartwell House 55-61 Victoria Street Bristol BS1 6AD England G H LUCAS: Taps Joint Administrators from PKF --------------------------------------------- Kerry Franchina Bailey and Jonathan David Newell of PKF (UK) LLP were appointed joint administrators of G H Lucas & Co. Ltd. on March 20, 2009. The company can be reached through PKF (UK) LLP at: Sovereign House Queen Street Manchester M2 5HR England HENG JIA RETAIL: Brings in Administrators from Tenon Recovery ------------------------------------------------------------- Christopher Ratten and Jeremy Woodside of Tenon Recovery were appointed joint administrators of Heng Jia Retail Inspiration Trading Co Ltd. on March 25, 2009. The company can be reached through Tenon Recovery at: Arkwright House Parsonage Gardens Manchester M3 2LF England MINDTRACK LTD: Taps Joint Administrators from Baker Tilly --------------------------------------------------------- Andrew Martin Sheridan and Simon Peter Bower of Baker Tilly Restructuring and Recovery LLP were appointed joint administrators of Mindtrack Ltd. on March 25, 2009. The company can be reached through Baker Tilly Restructuring and Recovery LLP at: Hartwell House 55-61 Victoria Street Bristol BS1 6AD England RETAIL INSPIRATION: Taps Administrators from Tenon Recovery ----------------------------------------------------------- Christopher Ratten and Jeremy Woodside of Tenon Recovery were appointed joint administrators of Retail Inspiration (Ireland) Ltd. on March 25, 2009. The company can be reached through Tenon Recovery at: Arkwright House Parsonage Gardens Manchester M3 2LF England ROBERT DYAS: Management Team Completes Buyout --------------------------------------------- Marietta Cauchi at Dow Jones Newswires reports that Robert Dyas' management said Wednesday it has completed a buyout of the company from private equity owners Change Capital Partners. Dow Jones relates the company's lenders, led by Lloyds Banking Group PLC (LYG), have agreed to roll over their debt which is about GBP30 million. BBC News recalls there had been administration fears unless it could get a new financing deal with its major lenders. Dow Jones notes that while there will be no debt-for-equity swap immediately, a company spokesman said this couldn't be ruled out for the future. Chris Tryhorn at guardian.co.uk reports that the buyout, led by chief executive Steven Round and the new non-executive chairman Ian Gray, wiped out Change Capital's GBP29 million investment in Robert Dyas. Change Capital, guardian.co.uk states, is thought to have put in GBP7 million of equity and GBP22 million of loans as part of its GBP61 million deal to acquire the company in 2004. According to BBC, the new owners have "no current plans" to close stores or axe jobs. Robert Dyas employs 1,250 staff at its 99 electrical and hardware stores, BBC discloses. On April 8, 2009, the Troubled Company Reporter-Europe, citing The Times, reported that the management team said "the company continues to trade profitably in the run-up to the Easter trading period and all the stores currently remain open." Headquartered in Leatherhead, Surrey, Robert Dyas Holdings Ltd. -- http://www.robertdyas.co.uk-- is a housewares and hardware retailer. ROYAL MAIL: European Commission Approves UK Loan Measures --------------------------------------------------------- The European Commission has decided that four state measures granted in favor of the UK postal incumbent Royal Mail between 2001 and 2007 are in line with EU state aid rules. The Commission concluded that three out of the four measures did not contain state aid because they were granted under market conditions. In the case of a fourth measure, which concerned Royal Mail's pension liabilities, the Commission authorized it under EC Treaty rules allowing state aid to facilitate certain economic activities (Article 87.3c) because it covered abnormal costs which had arisen from the previous period when Royal Mail had a monopoly over the letters market. None of the measures had been notified to the Commission, but the Commission opened a state aid investigation in 2007 following complaints. This decision does not cover measures announced by the UK authorities in December 2008, on which the Commission and the UK authorities are now in contact. Competition Commissioner Neelie Kroes said "After complaints from competitors of Royal Mail, we started a long and complex investigation. I am glad that we have been able to resolve the issues. We now look forward to a timely notification of new measures in favor of Royal Mail that were announced in December and will require a detailed examination in close collaboration with the UK authorities." In February 2007, the Commission started an investigation into several UK measures in favour of Royal Mail, in response to complaints by competitors. The UK had not notified the measures, because it contended that they did not constitute state aid. The Commission's investigation found that three loan measures granted in 2001, 2003 (extended in 2007) and 2007, totalling GBP1.7 billion (EUR1.9 billion at today's values) were free of state aid because they were granted on commercial terms. The Commission could not reach the same conclusion concerning a fourth measure, under which the UK Government released GBP850 million from reserves of Royal Mail which were under specific state control for the creation of an escrow account in favor of its pension scheme, extending the period over which it could address its large pensions deficit. However, in view of the size of the historic pensions liabilities of Royal Mail, some of which were built up when the business had a letters monopoly, the Commission concluded that any aid contained in the pension measure was compatible with the Single Market under Article 87(3)(c) of the EC Treaty. The reasoning followed by the Commission to authorize the pensions measure has some parallels with a decision taken in October 2007 approving aid granted by France to "La Poste" in respect of its pensions liabilities. However, there are also important differences, arising from the different pensions systems which apply more generally in the two Member States. This decision does not concern the separate measures in favor of Royal Mail's subsidiary, Post Office Limited (POL), which runs the network of post offices. The Commission has approved a series of measures in favor of POL, most recently in November 2007. The decision does not concern either the UK authorities' proposals for Royal Mail announced in December 2008 in response to the recommendations of the Hooper report. STANFORD GROUP: London Judge Orders Freeze on Assets ---------------------------------------------------- The U.S. Securities and Exchange Commission won an order April 6, 2009, extending a freeze on the U.K. assets of Texas financier R. Allen Stanford, who is accused of running an US$8 billion Ponzi scheme. According to James Lumley of Bloomberg News, Justice Colin Mackay at the High Court in London signed an order freezing the assets until April 27. Bloomberg relates that the SEC sued Stanford on Feb. 17 for allegedly running a "massive, ongoing fraud" through the sale of high-yield certificates of deposit by Antiguan-based Stanford International Bank Limited. The SEC suit claims Stanford skimmed US$1.6 billion in personal loans from his companies. David Wolfson, a lawyer representing the SEC in London, told Mr. Mackay that he had been in contact with the U.K. banks that held Stanford's assets, and they were "holding the fort." About Stanford Group Stanford Financial Group was a privately held global network of independent, affiliated financial services companies led by Chairman and CEO Sir Allen Stanford. The first Stanford Company was founded by his grandfather, Lodis B. Stanford in 1932. Stanford's core businesses are private wealth management and investment banking for institutions and emerging growth companies. Stanford had over US$50 billion in assets under management or advisement. The U.S. Securities and Exchange Commission, on February 17, 2009, charged R. Allen Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. Mr. Stanford's companies include Stanford International Bank, Stanford Group Company (SGC), and investment adviser Stanford Capital Management. The U.S. District Court for the Northern District of Texas (Dallas) appointed Ralph Janvey as receiver for Stanford Group. TAYLOR WIMPEY: Fitch Maintains 'CCC' Senior Unsecured Rating ------------------------------------------------------------ Fitch Ratings has maintained Taylor Wimpey plc's Long-term Issuer Default rating and senior unsecured 'CCC' ratings and Short-term 'C' IDR on Rating Watch Negative. This follows the announcement by TW that it has reached a signed agreement with some of its creditors (namely its bank and US private placement (creditors) to restructure its debt. The Recovery Rating on TW's senior unsecured debt instruments is 'RR4'. TW's agreement with its bank and USPP creditors is an important step in its efforts to avoid a covenant breach under its existing debt facilities. However, the deal still requires official bondholder consent, which will be sought at a bondholder meeting on April 30, 2009. Although consent appears likely given that, according to official regulatory filings, 76-78% of TW's bondholders have already provided irrevocable undertakings in support of the proposal (relative to the 75% consent threshold contractually required), there remains a risk, albeit small, that the deal could still be disrupted. Therefore, Fitch has chosen to maintain its RWN until the deal has been formally concluded with all parties. Fitch is concerned that the debt restructuring could result in TW's senior unsecured debt becoming structurally subordinated. Under the existing financial structure, all of TW's financial debt ranks as senior unsecured. Its pension liabilities have also so far been assumed by Fitch to rank as senior unsecured obligations. However, the proposed new structure will result in GBP416 million of undrawn committed debt facilities (out of a total GBP2,470 million) being granted security over a portion of TW's UK land bank. TW's two pension schemes (with a full buyout cost estimated at GBP1,177 million as of FYE07) may also be considered as structurally senior going forward given yesterday's statement from TW that the schemes have "structural seniority over other unsecured creditors." Should Fitch assess that these combined GBP1,593 million of liabilities are structurally senior, it is possible that recovery rates for senior unsecured creditors will diminish from their current level of 39% (based on H108 numbers, and equating to a Recovery Rating of 'RR4'). As a result, TW's senior unsecured rating could be notched down from the IDR. Fitch will seek to assess this potential subordination after the debt restructuring has been formally agreed by all parties and final documents are available. At this point, Fitch will also assess whether the restructuring has resulted in any form of coercive debt exchange (effectively a de-facto forced reduction in terms from a creditor's perspective), although this appears unlikely given that the creditors have been offered various incentives by TW, such as a step-up in cash-pay coupon, warrants and payment-in-kind interest. Nevertheless, downside risks to the rating remain, as reflected by the RWN status. Fitch will seek to resolve the RWN on TW's ratings shortly after the bondholder meeting on April 30, 2009. The ratings could be downgraded, possibly by more than one notch, if TW is unsuccessful in obtaining the required level of bondholder consent, therefore putting the debt restructuring in jeopardy, or if Fitch determines that the terms of the debt restructuring effectively cause a CDE. Similarly, the senior unsecured ratings could be downgraded if concerns about structural subordination are confirmed. Conversely, the ratings could be affirmed at their existing levels should a debt restructuring be successfully completed without any of the aforementioned concerns materializing. Following a successful completion of the restructuring process, Fitch will also then undertake a full review of TW's new financing structure and strategy to assess the new underlying credit profile of TW, which could result in further rating changes. TURBO BETA: Moody's Downgrades Corporate Family Rating to 'B3' -------------------------------------------------------------- Moody's Investors Service has downgraded to B3 from B2 the corporate family rating and probability of default rating of Turbo Beta Ltd (consolidated with its subsidiaries, Abbot), the ultimate holding company for drilling contractor Abbot Group Ltd. At the same time, Moody's downgraded to B2 from B1 the rating on the US$1.625 billion Senior Facilities raised by Turbo Alpha Ltd, the immediate holding company of Abbot Group Ltd. LGD assessment remains unchanged at LGD3 (34%). The outlook for all ratings is negative. This rating action concludes the review initiated on 16 March 2009. The rating downgrades reflect Moody's view that, given the growing likelihood of a substantial and potentially prolonged downturn in demand for drilling and oilfield services, Abbot's cash flow generation in 2009 and possibly 2010 will likely be weaker than in 2008. As a result, Moody's believes that Abbot will be unable to reduce its leverage (expressed as net debt to EBITDA, as adjusted by the agency) over the short- to medium-term significantly below the 2008 level of approximately 6x in order to maintain its B2 corporate family and B1 senior secured ratings. At their revised levels, current ratings assume that the capex and cost reduction measures taken by the group, combined with the general resiliency of its drilling business stemming from medium- term contracts and exposure to less volatile international markets, will support mildly positive free cash-flow generation over the coming financial year. This should in turn allow the company to maintain leverage not materially higher than 6x, in Moody's opinion. Ratings also factor in the group's adequate liquidity position and visibility over future cash flows underpinned by an order book of over US$2 billion. The negative outlook reflects the likelihood that Abbot may breach its financial covenants by early 2010 in the absence of a material and prompt recovery in demand for drilling services -- which is currently not foreseen. However, the rating outlook could be stabilized if there is evidence of shareholder support that would improve significantly Abbot's financial position, hence allow it to maintain adequate and sustainable headroom under its existing covenants. Moody's last rating action on Abbot was on March 16, 2009, when the rating agency downgraded the corporate family rating of Turbo Beta Ltd to B2 and the rating on the Senior Facilities raised by Turbo Alpha Ltd to B1, and placed these ratings on review for further possible downgrade. Headquartered in Aberdeen, UK, Abbot Group Ltd is a provider of onshore and offshore drilling services to both IOCs and NOCs in the Eastern Hemisphere. Its ultimate owner is First Reserve Corporation, a US private equity firm specialised in the energy industry. In 2008, Abbot reported revenues of around US$1.9 billion. VEHICLE OPTIONS: Provisional Liquidator Appointed ------------------------------------------------- The Secretary of State for Business, Enterprise and Regulatory Reform has presented petitions in the High Court in London to wind up Vehicle Options Limited, Group20 Limited and VehicleOptions Fleet Limited in the public interest. Vehicle Options Limited sold franchises for the provision of vehicle finance but entered creditors voluntary liquidation on October 22, 2008. It is believed VehicleOptions Fleet Limited operates a similar business model. Group20 Limited sells franchises for and membership of a 'Supercar' club. The petitions to wind up the companies were presented following an investigation carried out by Companies Investigation Branch under section 447 of the Companies Act as amended. The case is now subject to High Court action and no further information will be made available until the petitions are heard in the High Court on May 13, 2009. The registered office of Vehicle Options Limited is at: Sherlock House 73 Baker Street London W1U 6RD The registered office of Group20 Limited is at: 16-17 Copperfields Spital Street Dartford Kent DA1 2DE The registered office of VehicleOptions Fleet Limited is at: 16-17 Copperfields Spital Street Dartford Kent DA1 2DE Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk WHITERIGG ALPINES: In Administration; KPMG Appointed ---------------------------------------------------- Paul Flint and Brian Green from KPMG Restructuring in Manchester have been appointed Joint Administrators of Whiterigg Alpines Limited, the Chorley-based grower and supplier of alpine rockery plants. The business, which employs 91 people at its Lancashire base and has a turnover of circa GBP4.5million, is the largest alpine plant grower in the UK, supplying more than 200 garden centres around the country. The business continues to trade with the existing workforce under the control of the Joint Administrators while a buyer is sought for the business and assets. Paul Flint, joint administrator and associate partner at KPMG in Manchester, said, "As we are now entering one of the busiest parts of the year for companies in the horticultural industry, we will be working closely with the existing workforce at Whiterigg Alpines Limited to trade the business as a going concern. We would encourage any parties who may be interested in acquiring the business and its assets to contact us as soon as possible." * UK: Independent Music Stores Down to 300, ERA Says ---------------------------------------------------- James Hall at the Daily Telegraph reports that according to trade body Entertainment Retailers Association, a quarter of all of the UK's independent record stores have closed in the past year. The report relates that ERA's latest census of the sector showed that there are barely 300 independent music stores left in the UK, down from 408 in 2007. The report says increases in sales of digital download, the encroachment of supermarkets into the entertainment market and the general economic downturn have led to the closures. Stephen Godfroy, a director at Rough Trade Retail, which operates the Rough Trade East store in London's East End, as cited by the report, said that the independent record store sector is "going through a process of renewal". "Like any other sector, music has a number of outdated outlets that have not moved with the times and are caught between two ends of a polarized market," the report quoted Mr. Godfroy as saying. * UK: Landlords Agree Ten Point Plan to Help Retailers Cut Costs ---------------------------------------------------------------- The British Property Federation said Monday last week that some of the BPF's biggest landlord members have agreed a ten point plan to help retailers cut costs, sealing a truce with Topshop, Next and numerous other high profile chains. It comes two weeks after a major public row over the way rents are paid with many retailers claiming that the regime of quarterly advanced payments was causing cash-flow problems. The plan follows trials running since autumn 2008 to help reduce occupation costs for retailers struggling to cope with the impact of the recession. A pilot project at four shopping centers looked at ways to drive savings through temporary initiatives, short-term deferral of maintenance projects and other operational costs, while driving longer-term savings through improved process and by mutually identifying changes to service requirements. The scheme has been extremely successful with projected savings achieved of between 10% and 20% in the initial four shopping centers. Liz Peace, chief executive of the BPF, said: "This is evidence that a real difference can be made when landlords work together with their tenants. While the property industry has been as badly hit by the downturn as retailers, we are obviously keen to help our tenants survive and are prepared to work with them to improve efficiency, cut costs and do whatever we can to make sure that both sides of the business can get through these challenging times." Others involved in the pilots include New Look executive chairman Phil Wrigley, Next property director Andrew Varley and British Land director of retail property management David Tudor-Morgan. * British Land projecting a 20% saving in Meadowhall, Sheffield * Land Securities a 13.1% saving in the White Rose Centre in Leeds * PRUPIM, as managers of The Mall, Cribbs Causeway an 11% saving * Westfield a 10.2% saving at Merry Hill, Dudley. The plan builds on the lessons learnt from the pilot and from an open and constructive dialogue between the retailers and landlords that sprang from the collaborative working Group. Last November, BPF president Francis Salway, who is chief executive of Land Securities, the UK's biggest property firm, wrote to over 500 property firms to encourage them to constrain service charges. Commenting on the new plan Richard Akers, Land Securities head of retail, said: "We all know the retail market is difficult and as major landlords it is a win-win situation if we can help to strengthen the position of our retailers. The Ten Point Plan has been created so that it can be applied in almost any shopping centre to help identify potential savings. It is a checklist to assist landlords in evaluating current practise within their portfolios and even when no savings can be made it can provide a consistent framework on which to review costs." Chris Harris, Arcadia Group's property director, said: "A key ingredient to the success and output of this initiative has been the open and constructive dialogue and close collaboration between the participating landlords and retailers. It is hoped that other landlords can now be persuaded to adopt this philosophy." Andrew Varley, Next property director, said: "What we are trying to do is get more transparency for retailers. Why do we need to pay 10% managing agents' fees, for example? It is about drilling down to find out why certain costs are so high at certain centres. We would like every landlord to look at this." LandSecs and British Land have already rolled out the cuts in service charges to the other centres in their portfolios. Mr. Akers said: "We all know the retail market is difficult and, as major landlords, it is a win-win situation if we can help to strengthen the position of our retailers. "The 10-point plan has been created so that it can be applied in almost any shopping centre to help identify potential savings. "It is a checklist to assist landlords in evaluating current practice within their portfolios. Even when no savings can be made, it can provide a consistent framework on which to review costs." Landlords on Board * British Land * Capital & Regional * Capital Shopping Centres * Land Securities * Legal & General * Prupim * Westfield 10-point plan The campaign will focus on these 10 cost-efficiency issues: * Engagement with retailers * Hours of operation * Cleaning and environment * Waste management * Security * Administration, procurement and purchasing of services * Plant and fabric maintenance * Utilities and energy management * Customer service * Marketing * U.K.: GDP Shrank 1.5% in First Quarter ---------------------------------------- Brian Swint at Bloomberg News reports the National Institute of Economic and Social Research said the U.K. economy shrank 1.5 percent in the first quarter. The drop in gross domestic product followed a 1.6 percent decline in the last three months of 2008, the report relates citing Niesr, whose clients include the U.K. Treasury. Consumer confidence last month matched the lowest level in at least four years, Nationwide Building Society said in a separate report obtained by the news agency. * CBI: Credit Crunch Maybe Becoming Less Severe for UK Businesses ----------------------------------------------------------------- There are signs that the credit crunch may have become less severe for some businesses, according to the latest CBI figures published April 4. Firms were less negative in the March CBI Access to Finance Survey than they were in February about the availability of new and existing credit over the previous three months. For new credit, the net percentage of firms saying availability had deteriorated in the past three months was a balance of -36%, compared with -59% in February. For existing credit, the balance was -16% compared with -25%. Ian McCafferty, the CBI's Chief Economic Adviser said: "Fewer firms said in March that the availability of credit had got worse for them in the past three months than did so in February or January. The view that the pace of deterioration is easing correlates with what businesses are starting to tell us on the ground. "Firms are not saying that credit conditions are getting better, but the severity of the disruption is no longer worsening as sharply as it was three months ago. And the combination of easier monetary policy and the government's measures to support the banking sector may be starting to have an impact." Numbers of companies expecting conditions to worsen in the next three months fell back a little in March, with a balance of -36% slightly better than -38% the previous month. Firms said the cost of finance continued to rise and access to trade credit insurance has worsened over the past three months. The survey contains a range of other findings about the availability of finance: Nearly half of firms (46%) say they have cut staff numbers over the past three months as a result of the credit crunch, a slight increase on February's figure (40%). Staff hours have stabilized, even though output is still coming down, and firms are cutting back on training budgets and capital investment. For the third month running, the very largest firms, employing over 5000 staff, were most widely affected. Most of the companies in this size bracket (86%) that had sought new finance said its availability had got worse in the last three months. This was the case for just 15% of large businesses and 54% of small and medium- sized companies (SMEs). In the next three months, just under a third of the very largest firms (29%) expect access to new credit will get worse, which is the case for just over a third of large firms (36%) and SMEs (38%). The cost of existing finance has become more of a concern in March. Just over a third of firms said the cost of existing finance had risen in the past three months compared with just over a quarter in February. Problems with the availability of trade credit insurance have intensified. Nearly half (48%) of firms surveyed said they use the insurance to cover the supply of goods to customers. Of these, nearly three-quarters (72%) said its availability had worsened in the past three months, hindering their ability to secure contracts. * S&P Takes Rating Actions on 481 European Synthetic CDO Tranches ----------------------------------------------------------------- After running its month-end SROC (synthetic rated overcollateralization) figures, Standard & Poor's Ratings Services took CreditWatch actions on 481 European synthetic collateralized debt obligation tranches. Specifically, ratings on: -- 435 tranches were placed on CreditWatch negative; -- 5 tranches were affirmed and removed from CreditWatch negative; -- 19 tranches were removed from CreditWatch positive and placed on CreditWatch negative; and -- 22 tranches were affirmed and removed from CreditWatch positive. Of the 454 tranches placed on CreditWatch negative: -- 15 reference U.S. residential mortgage-backed securities and U.S. CDOs that are exposed to U.S. RMBS, which have experienced recent negative rating actions. -- 439 have experienced corporate downgrades in their portfolios. This table provides a summary of the CreditWatch actions S&P has taken on European synthetic CDO tranches as well as key corporate downgrades since Oct. 6, 2008. CreditWatch Summary Watch Neg Watch Pos (no. of (no. of Key corporate tranches) tranches) downgrades* --------- --------- ------------- Nov-08 300 0 Fortis N.V. (A-/Developing to BBB-/Watch Neg) Oct. 6, 2008 Glitnir Bank (CCC/Watch Neg to D) Oct. 9, 2008 Dec�08 203 0 Residential Capital, LLC (CCC+/Negative to CC/Watch Neg) Nov. 20, 2008 Financial Guaranty Insurance Co. (BB/Watch Neg to CCC/Negative) Nov. 24, 2008 Jan�09 364 0 Citigroup Inc. (AA-/Watch Neg to A/Stable) Dec. 19, 2008 Morgan Stanley (A+/Negative to A/Negative) Dec. 19, 2008 Feb�09 315 6 International Lease Finance Corp. (A-/Watch Dev to BBB+/Watch Dev) Jan. 21, 2009 Thomson S.A. (B/Watch Neg to CC/Negative) Jan. 29, 2009 Mar-09 98 34 MBIA Inc. (A-/Negative to BB/Negative) Feb. 18, 2009 MBIA Insurance Corp. (AA/Negative to BBB+/Negative) Feb. 18, 2009 Apr-09 454 0 MGIC Investment Corp. (BB+/Watch Neg to CCC/Negative) March 13, 2009 MGM Mirage (B/Watch Neg to CCC/Negative) March 19, 2009 * Those corporate names that have experienced a significant notch downgrade or upgrade as well as being widely referenced within European Synthetic CDOs. The SROC levels for the ratings placed on CreditWatch negative fell below 100% during the March month-end run. S&P will publish these SROC figures in the SROC report covering March 2009, which is imminent. The Global SROC Report provides SROC and other performance metrics on over 3,500 individual CDO tranches. The current ratings are based on S&P's criteria for rating synthetic CDOs. As recently announced, however, these criteria are under review (see "Related Research"). As highlighted in this notice, S&P is soliciting feedback from market participants regarding proposed changes to S&P's collateralized loan obligation and CDO criteria. S&P will evaluate the market feedback, which may result in changes to the criteria. Any such criteria changes, as well as other credit factors, may have an impact on S&P's ratings on the notes affected by the rating actions. * BOND PRICING: For the Week April 6 to April 9, 2009 ----------------------------------------------------- Issuer Coupon Maturity Currency Price ------ ------ -------- -------- ----- AUSTRIA ------- Oester Volksbk 4.810 07/29/25 EUR 77.65 CYPRUS ------ Abh Financial Lt 8.200 06/25/12 USD 54.57 Alfa MTN invest 9.250 06/24/13 USD 52.21 FRANCE ------ Alcatel SA 4.750 01/01/11 EUR 13.17 Alcatel SA 6.380 04/07/14 EUR 58.73 Axa SA 7.130 12/15/20 GBP 72.56 Axa SA 8.600 12/15/30 USD 75.13 BNP Paribas 0.2500 12/20/14 USD 73.72 Calyon 6.000 06/18/47 EUR 37.85 Soc Air France 2.750 04/01/20 EUR 19.38 Wavecom SA 1.750 01/01/14 EUR 30.76 GERMANY ------- Bayer AG 5.000 07/29/2105 EUR 69.17 Bayerische Lndbk 4.250 10/05/16 EUR 71.73 Bayerische Lndbk 4.500 02/07/19 EUR 66.72 GREECE ------ Antenna TV SA 7.250 02/15/15 EUR 54.50 Antenna TV SA 7.250 02/15/15 EUR 54.75 HUNGARY ------- Agrokor 7.000 11/23/11 EUR 66.17 IRELAND ------- Aegon Global 3.250 12/09/10 EUR 80.97 Aegon Global 4.250 01/23/12 EUR 76.32 Alfa Bank 8.630 12/09/15 USD 54.57 Alfa Bank 8.640 02/22/17 USD 52.21 Allied Irish Bks 7.880 07/05/23 GBP 64.09 Allied Irish Bks 5.250 03/10/25 GBP 54.04 Allied Irish Bks 5.630 11/29/30 GBP 50.96 Ardagh Glass 7.130 06/15/17 EUR 64.88 Ardagh Glass 7.130 06/15/17 EUR 65.46 Banesto Finance 6.120 11/07/37 EUR 6.12 Bank Soyuz 9.380 02/16/10 USD 72.48 LUXEMBOURG ---------- Acergy SA 2.250 10/11/13 USD 72.36 Ak Bars Bank 9.250 06/20/11 USD 63.92 Alrosa Finance 8.880 11/17/14 USD 68.71 Bank of Moscow 7.340 05/13/13 USD 66.03 Bank of Moscow 7.500 11/25/15 USD 54.12 Bank of Moscow 6.810 05/10/17 USD 43.37 Beverage Pack 8.000 12/15/16 EUR 73.00 Beverage Pack 8.000 12/15/16 EUR 73.29 Beverage Pack 9.500 06/15/17 EUR 47.00 Beverage Pack 9.500 06/15/17 EUR 47.13 NETHERLANDS ----------- ABN Amro Bank NV 6.000 03/16/35 EUR 48.80 ABN Amro Bank NV 6.250 06/29/35 EUR 39.12 Achmea Hypobk 4.300 04/03/24 EUR 72.73 Achmea Hypobk 4.000 12/27/24 EUR 68.78 Aegon NV 6.130 12/15/31 GBP 66.58 Air Berlin Finan 1.500 04/11/27 EUR 35.12 ALB Finance BV 9.750 02/14/11 GBP 22.48 ALB Finance BV 7.880 02/01/12 EUR 20.97 Alfa Bk Ukraine 9.750 12/22/09 USD 56.47 Allianz Finance 6.130 05/31/22 EUR 72.27 Allianz Finance 6.500 01/13/25 EUR 72.15 ASM Holding NV 5.750 06/13/17 EUR 63.25 ASM Intl NV 4.250 12/06/11 USD 70.00 Astana Finance 7.880 06/08/10 EUR 21.25 Astana Finance 9.000 11/16/11 USD 24.96 ATF Capital BV 9.250 02/21/14 USD 41.53 Bk Ned Gemeenten 0.500 06/27/18 CAD 71.90 Bk Ned Gemeenten 0.500 02/24/25 CAD 47.69 Hit Finance BV 4.880 10/27/21 EUR 70.23 JSC Bank Georgia 9.000 02/08/12 USD 39.84 Turanalem Fin BV 7.880 06/02/10 USD 32.48 Turanalem Fin BV 6.250 09/27/11 EUR 25.47 Turanalem Fin BV 7.750 04/25/13 USD 26.15 Turanalem Fin BV 8.000 03/24/14 USD 22.73 Turanalem Fin BV 8.500 02/10/15 USD 25.93 Turanalem Fin BV 8.250 01/22/37 USD 23.70 Turanalem Fin BV 8.250 01/22/37 USD 24.36 ROMANIA ------- Bucharest 4.130 06/22/15 EUR 49.83 SPAIN ----- Ayt Cedulas Caja 3.750 12/14/22 EUR 79.35 Ayt Cedulas Caja 3.750 06/30/25 EUR 73.78 Banco Bilbao Viz 4.380 10/20/19 EUR 67.82 UNITED KINGDOM -------------- Amlin Plc 6.500 12/19/26 GBP 66.43 Anglian Wat Fin 2.400 04/20/35 GBP 49.45 Arsenal Sec 5.140 09/01/29 GBP 69.77 Ashtead Holdings 8.630 08/01/15 USD 56.38 Ashtead Holdings 8.630 08/01/15 USD 55.75 Aspire Defence 4.670 03/31/40 GBP 64.21 Aspire Defence 4.670 03/31/40 GBP 63.71 Aviva Plc 5.250 10/02/23 EUR 42.74 Aviva Plc 6.880 05/22/38 EUR 39.64 Aviva Plc 6.880 05/22/58 EUR 53.02 Azovstal 9.130 02/28/11 USD 32.45 Barclays Bk Plc 9.750 09/30/09 GBP 76.65 Barclays Bk Plc 6.000 01/23/18 EUR 71.43 Barclays Bk Plc 4.500 03/04/19 EUR 68.91 Barclays Bk Plc 5.750 09/14/26 GBP 68.64 Barclays Bk Plc 6.330 09/23/32 GBP 70.67 Bradford&Bin Bld 4.250 05/04/16 EUR 79.22 Bradford&Bin Bld 4.880 06/28/17 EUR 79.69 Bradford&Bin Bld 6.630 06/16/23 GBP 10.38 Bradford&Bin Bld 4.910 02/01/47 EUR 60.50 Brit Insurance 6.630 12/09/30 GBP 55.56 British Airways 8.750 08/23/16 GBP 73.20 British Land Co 5.260 09/24/35 GBP 71.70 British Land Co 5.260 09/24/35 GBP 70.61 British Tel Plc 5.750 12/07/28 GBP 73.13 British Tel Plc 6.380 06/23/37 GBP 72.98 Britannia Bldg 5.750 12/02/24 GBP 66.91 Britannia Bldg 5.880 03/28/33 GBP 61.18 Brixton Plc 6.000 12/30/10 GBP 70.06 Brixton Plc 5.250 10/21/15 GBP 33.04 Brixton Plc 6.000 09/30/19 GBP 44.53 Broadgate Finance 5.000 10/05/31 GBP 70.82 Broadgate Finance 5.100 04/05/33 GBP 62.98 Broadgate Finance 4.820 07/05/33 GBP 73.77 CGNU Plc 6.130 11/16/26 GBP 51.55 Guardian Royal 6.630 08/21/23 GBP 95.92 Heating Finance 7.880 03/31/14 GBP 47.75 ********* 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. 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