/raid1/www/Hosts/bankrupt/TCREUR_Public/090508.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, May 8, 2009, Vol. 10, No. 90
Headlines
A U S T R I A
DM - DEIN MASSIVHAUS: Claims Registration Period Ends May 11
PETER SOMMEREGGER : Claims Registration Period Ends May 11
UMO ELEKTRO: Claims Registration Period Ends May 11
F R A N C E
ALCATEL-LUCENT: Posts EUR402 Million Loss in First Quarter 2009
G E O R G I A
BTA BANK: Fitch Puts 'CCC' Issuer Default Rating on Negative Watch
G E R M A N Y
BL GMBH: Claims Registration Period Ends May 29
CITY-REINIGUNGS GMBH: Claims Registration Period Ends May 29
CKV GMBH: Claims Registration Period Ends June 12
EVIPROGA ZAHNTECHNIK: Claims Registration Period Ends June 15
HEIDELBERGCEMENT AG: Seeks to Extend Maturity of EUR9 Bln Debt
ISB ABBUNDZENTRUM: Claims Registration Period Ends June 3
LANOR ENERGY: Claims Registration Period Ends June 15
LBB GMBH: Claims Registration Period Ends June 15
MAGISTA ARBEITSVERMITTLUNG: Claims Registration Ends May 19
METAL TECHNOLOGIES: Files for Preliminary Insolvency
RA INNENAUSBAU: Claims Registration Period Ends May 19
TBM SUPPLIES: Claims Registration Period Ends May 20
TW BAU: Claims Registration Period Ends May 29
I R E L A N D
LUNAR FUNDING: Moody's Cuts Rating on EUR10 Mil. Notes to 'B3'
I T A L Y
CHRYSLER LLC: Hedge Funds Named; Fiat Deal Has Legal Questions
CHRYSLER LLC: Court Approves Fiat-Led Auction for Business
CHRYSLER LLC: Reached Initial Pact With Kia Before Courting Fiat
FIAT SPA: Denies It Will Cut 18,000 Jobs Following GM Europe Deal
FIAT SPA: S&P Retains Negative Watch on 'BB+' Corporate Rating
K A Z A K H S T A N
HALYK SAVINGS: S&P Lowers LT Counterparty Credit Ratings to 'BB'
KAZKOMMERTSBANK: S&P Cuts LT Counterparty Credit Ratings to 'B+'
* Fitch Downgrades Ratings on Three Banks in Kazakhstan
K Y R G Y Z S T A N
BI MOBILE: Creditors Must File Claims by May 29
SOFTWARE DEVELOPMENT: Creditors Must File Claims by May 29
STOLICHNY OJSC: Court Names D. Kadinov as Insolvency Manager
L U X E M B O U R G
BERNARD L. MADOFF: Luxembourg's CSSF Says Fund Industry Recovering
R O M A N I A
* ROMANIA: Corporate Insolvencies Up 58% in First Quarter 2009
R U S S I A
ALROSA: To Resume Sale of Diamonds This Month
KARBO-KHIM OJSC: Creditors Must File Claims by June 24
MEGAFON OJSC: Moody's Changes Outlook on 'Ba2' Rating to Positive
MOBILE TELESYSTEMS: Inks Deal w/ Banks to Reschedule US$630MM Loan
PAMIR CONSTRUCTION: Creditors Must File Claims by June 24
PERMSKAYA FUEL: Permskiy Bankruptcy Hearing Set September 14
PERMSKIY RACETRACK: Creditors Must File Claims by May 24
RENOVA HOLDING: Moody's Withdraws 'B1' Corporate Family Rating
TRANSSIBERIAN REINSURANCE: Fitch Affirms Insurer Rating at 'BB-'
VTB BANK: Posts RUB5.9 Bln Net Loss for First Four Months of 2009
S P A I N
IM PASTOR 4: Moody's Cuts Rating on Class D Notes to 'B3'
IM PASTOR 4: Moody's Junks Rating on Class D Notes
S W E D E N
FORD MOTOR: Geely Reviewing Volvo Unit's Books, Bloomberg New Says
FORD MOTOR: Three Firms Bid for Volvo Unit
GENERAL MOTORS: Renault Eyeing Saturn; Geely Bids for Saab Unit
SAAB AB: Not In Talks With Fiat Over Takeover, CEO Says
SAS AB: S&P Affirms 'B' Long-Term Corporate Credit Rating
U K R A I N E
ALFA BANK: Moody's Retains 'E+' Bank Financial Strength Rating
AT-TRADING GROUP: Creditors Must File Claims by May 15
MIOK LLC: Creditors Must File Claims by May 15
MIRGOROD INDUSTRIAL: Court Starts Bankruptcy Supervision Procedure
MOLOCHANSK MILK: Court Starts Bankruptcy Supervision Procedure
VIKTORIYA JSC: Creditors Must File Claims by May 15
U N I T E D K I N G D O M
BARCLAYS PLC: Not Contemplating Another Capital Raising
DSG INTERNATIONAL: Moody's Confirms 'Ba3' Corporate Family Rating
EUROPEAN MEDITATION: Wound-Up by High Court
GEMINI PLC: Fitch Junks Ratings on Three Classes of Notes
INEOS GROUP: Seeks Extension of Covenant Waivers
PINTON ESTATES: Forced Into Receivership After Bond Coupon Default
PREFERRED RESIDENTIAL: S&P Cuts Rating on Class FTc Notes to 'B-'
ROYAL WORCESTER: Clearance Sale at Factory Outlets Starts Today
SMART PFI: Fitch Cuts Rating on GBP4.3 Mln Class F Notes to 'B-'
TATA MOTORS: Talks on JLR Financing Continues, UK Gov't Says
THOMAS WALKER: Administrators Put Assets for Sale
WILLIAM VERRY: Goes Into Administration; McLaren Buys Contracts
* BOOK REVIEW: Megamergers
*********
=============
A U S T R I A
=============
DM - DEIN MASSIVHAUS: Claims Registration Period Ends May 11
------------------------------------------------------------
Creditors owed money by DM - Dein Massivhaus GmbH have until
May 11, 2009, to file written proofs of claim to the court-
appointed estate administrator:
Dr. Rudolf Pototschnig
Peraustrasse 31
9500 Villach
Austria
Tel: 04242/27835
Fax: 04242/26107-19
E-Mail: rae.pototschnig-winkler@aon.at
Creditors and other interested parties are encouraged to attend
the creditors' meeting at 9:30 a.m. on May 18, 2009, for the
examination of claims at:
Land Court of Klagenfurt
Meeting Room 225
Second Floor
Klagenfurt
Austria
PETER SOMMEREGGER : Claims Registration Period Ends May 11
----------------------------------------------------------
Creditors owed money by Dipl. Ing. Peter Sommeregger GmbH have
until May 11, 2009, to file written proofs of claim to the court-
appointed estate administrator:
Dr. Rudolf Denzel Rechtsanwalt
Moritschstrasse 1
9500 Villach
Austria
Tel: 04242/24915
Fax: 04242/24069
E-mail: office@denzel-patterer.at
Creditors and other interested parties are encouraged to attend
the creditors' meeting at 10:00 a.m. on May 18, 2009, for the
examination of claims.
UMO ELEKTRO: Claims Registration Period Ends May 11
---------------------------------------------------
Creditors owed money by Umo Elektro Untermoser GmbH have until
May 11, 2009, to file written proofs of claim to the court-
appointed estate administrator:
Mag. Cornelia Strauss
Dr. Arthur Lemisch Platz 4
9020 Klagenfurt
Austria
Tel: 0463/55 4 80
Fax: 0463/55 4 80-4
E-mail: rechtsanwalt@mag-strauss.at
Creditors and other interested parties are encouraged to attend
the creditors' meeting at 11:00 a.m. on May 18, 2009, for the
examination of claims at:
Land Court of Klagenfurt
Meeting Room 225
Second Floor
Klagenfurt
Austria
===========
F R A N C E
===========
ALCATEL-LUCENT: Posts EUR402 Million Loss in First Quarter 2009
---------------------------------------------------------------
AFP reports that Alcatel-Lucent posted a loss of EUR402 million in
the first quater of 2009 compared with a loss in the same period
of last year of EUR181 million.
Alcatel-Lucent, AFP discloses, reported an operating loss,
excluding writedowns of good will arising from the takeover of
Lucent by Alcatel of EUR254 million compared to a profit of EUR36
million 12 months earlier. The group's sales figure fell
6.9 percent to EUR3.6 billion, owing mainly to a slump on the
North American market, AFP states.
"Alcatel-Lucent has reported an operating loss twice as big as the
consensus expectation and restructuring costs counted for a
further EUR178 million in consuming the company's cash," AFP
quoted brokers Aurel BGC as saying. AFP notes according to Aurel
BGC, "the financial profile of Alcatel's credit is deteriorating
further."
AFP relates the group, which is restructuring after heavy losses,
said that 2009 would be a year of "transition" and finance
director Paul Tufano said the company intended to return to net
profit "in the second half of 2010 and for the whole of 2011."
About Alcatel-Lucent SA
France-based Alcatel-Lucent SA (Euronext Paris and NYSE: ALU) --
http://www.alcatel-lucent.com/-- provides product offerings that
enable service providers, enterprises and governments worldwide,
to deliver voice, data and video communication services to end
users. In the field of fixed, mobile and converged broadband
networking, Internet protocol (IP) technologies, applications and
services, the company offers the end-to-end product offerings that
enable communications services for residential, business customers
and customers. It has operations in more than 130 countries. It
has three segments: Carrier, Enterprise and Services. The Carrier
segment is organized into seven business divisions: IP, fixed
access, optics, multicore, applications, code division multiple
access networks and mobile access. Its Enterprise business
segment provides software, hardware and services that interconnect
networks, people, processes and knowledge. Its Services business
segment integrates clients' networks. In October 2008, the
company completed the acquisition of Motive, Inc.
* * *
As reported in the Troubled Company Reporter-Europe on March 5,
2009, Standard & Poor's Ratings Services lowered to 'B+' from
'BB-' its long-term corporate credit ratings and senior unsecured
ratings on France-based telecom equipment and services supplier
Alcatel Lucent and its subsidiary Alcatel-Lucent USA Inc.
(formerly Lucent Technologies Inc.). The 'B' short-term rating on
Alcatel Lucent has been affirmed. The outlook is negative.
=============
G E O R G I A
=============
BTA BANK: Fitch Puts 'CCC' Issuer Default Rating on Negative Watch
------------------------------------------------------------------
Fitch Ratings has put JSC BTA Bank (Georgia)'s 'CCC' Long-term
Issuer Default Rating (IDR) on Rating Watch Negative.
The RWN reflects the heightened near-term liquidity risk faced by
the bank in light of the maturing of funding facilities provided
by BTA Bank (Kazakhstan) ('RD' (Restricted Default)). In May
2009, alone, scheduled repayments by BTA Georgia to BTA Kazakhstan
are greater than the liquid assets held by BTA Georgia as of mid-
April. To date, it has not been possible to obtain clarification
from BTA Kazakhstan or BTA Georgia as to whether some or all of
these funding facilities might be extended.
Other risks for BTA Georgia, in common with other Georgian banks,
are asset quality deterioration in a challenging operating
environment and the high proportion of foreign currency lending.
The RWN will be resolved once the impact of the scheduled funding
repayments on BTA Georgia's liquidity profile becomes apparent and
Fitch has considered the broader implications for the bank's
financial profile and strategy of ongoing developments at BTA
Kazakhstan.
Although BTA Kazakhstan holds a 49% stake in BTA Georgia, the
majority of BTA Georgia's shares are understood to be controlled
by the now minority shareholders of BTA Kazakhstan (who hold a 27%
stake in BTA Georgia) and their Georgian partners (24%).
Rating actions:
-- Long-term IDR 'CCC', placed on Rating Watch Negative
-- Short-term IDR: affirmed at 'C'
-- Individual rating: affirmed at 'E'
-- Support rating: affirmed at '5'
=============
G E R M A N Y
=============
BL GMBH: Claims Registration Period Ends May 29
-----------------------------------------------
Creditors of BL 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 9:00 a.m. on July 3, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Detmold
Meeting Room 12
Gerichtsstrasse 6
32756 Detmold
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:
Matthias Landwehr
Gerichts St. 12
32791 Lage
Germany
The court opened bankruptcy proceedings against the company on
April 22, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
BL GmbH
An der Hellruesche 16 a
32105 Bad Salzuflen
Germany
Attn: Horst Andreas, Manager
Eduard-Windhorst- St. 34
33604 Bielefeld
Germany
CITY-REINIGUNGS GMBH: Claims Registration Period Ends May 29
------------------------------------------------------------
Creditors of City-Reinigungs 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 10:50 a.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 Magdeburg
Hall 13
Breiter Weg 203 - 206
39104 Magdeburg
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:
Cathleen Tetzel
Halberstadter Strasse 115
39112 Magdeburg
Germany
Tel: 0391-7276484
Fax: 0391-7276486
E-mail: t-s-insolvenzverwaltung@primacom.net
The court opened bankruptcy proceedings against the company on
April 24, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
City-Reinigungs GmbH
Allee-Center
Ernst-Reuter-Allee 11
39104 Magdeburg
Germany
Attn: Thomas Borowsky, Manager
Falterstieg 14
39104 Magdeburg
Germany
CKV GMBH: Claims Registration Period Ends June 12
-------------------------------------------------
Creditors of CKV GmbH Berlin i. L.have until June 12, 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 July 15, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Potsdam
Hall 24
Justice Center
Jagerallee 10 - 12
14469 Potsdam
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:
Justus Schneidewind
Behlertstrasse 28 a
14469 Potsdam
Germany
The court opened bankruptcy proceedings against the company on
April 24, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
CKV GmbH Berlin i. L.
Attn: Rolf Bartzsch, Manager
Berliner Strasse 13 E
15831 Mahlow
Germany
EVIPROGA ZAHNTECHNIK: Claims Registration Period Ends June 15
-------------------------------------------------------------
Creditors of Eviproga Zahntechnik GmbH have until June 15, 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 July 14, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Celle Nebenstelle
Hall 014
Ground Floor
Branch Mill Road 4
29221 Celle
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:
Hans-Peter Valentiner
Bahnhof St. 30 A
29221 Celle
Germany
Tel: 05141/28011
Fax: 05141/24722
E-mail: Rae_valentiner_blaha_buchholz@gmx.de
The court opened bankruptcy proceedings against the company on
April 23, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
Eviproga Zahntechnik GmbH
Attn: Heiner Betz, Manager
Moorkamp 35
29223 Celle
Germany
HEIDELBERGCEMENT AG: Seeks to Extend Maturity of EUR9 Bln Debt
--------------------------------------------------------------
HeidelbergCement seeks to extend the maturity of its entire bank
debt of about EUR9 billion (US$12.05 billion) to 2011, Alexander
Huebner and Tessa Walsh report citing a person familiar with the
negotiations.
The report relates the source said Wednesday the company is
already on track to secure an extension of a EUR600 million loan
that was initially due May 14. The source, as cited in the
report, said the negotiations were still underway. "The company
is cautiously optimistic," the report quoted the source as saying.
The EUR600 million loan will be extended for two months until
July 17 at a rate of 425 basis points over EURIBOR to give lenders
more time to consider a second phase of the refinancing, the
report says citing a second banker close to the deal. The report
states the second banker said the second part of the refinancing
will extend the maturity of the EUR600 million loan from July 2009
to December 2011, along with the EUR5 billion B tranche, which
would otherwise mature in May 2010. The report notes bankers have
been asked to respond to the second phase, which is widely viewed
as more challenging, by the end of May.
The report discloses the current refinancing is being arranged by
Deutsche Bank and Royal Bank of Scotland, along with Nordea and
Commerzbank. Morgan Stanley is acting as advisor to
HeidelbergCement, the report states.
About HeidelbergCement
Based in Heidelberg, Germany, HeidelbergCement AG (FRA:HEI) --
http://www.heidelbergcement.com/-- is a global producer of
cement, concrete and building materials. The Company's core
activities include the production and distribution of cement and
aggregates, the two raw materials for concrete. It is also
engaged in in the provision of such products as ready-mixed
concrete, as well as concrete products and elements. It divides
its activities into four group areas: Europe-Central Asia, North
America, Asia-Australia-Africa-Mediterranean and Group Services.
It divides its products into three lines: cement, aggregates and
concrete and building products. Its products include sand,
gravel, crushed stone, white cement, trass cement, masonry cement,
aquament and portland cement for hydraulic engineering, as well as
light, heavy and aerated concrete building blocks, pavers,
prefabricated ceilings and walls, prefabricated cellar units and
prefabricated sewage works units, among others. In 2007, the
Company took over Hanson Group.
* * *
As reported in the Troubled Company Reporter-Europe on March 10,
2009, Standard & Poor's Ratings Services said that it lowered its
long-term corporate credit rating on HeidelbergCement AG to 'B-'
from 'B+'. The 'B' short-term corporate credit rating was
affirmed.
At the same time, the senior unsecured debt ratings were lowered
to 'CCC+' from 'B'. All ratings remain on CreditWatch negative
where they were placed on Oct. 24, 2008.
On Feb. 11, 2009, the TCR-Europe reported that Moody's Investors
Service downgraded HeidelbergCement's corporate family and issue
ratings to B1 from Ba3. The ratings were put on review for
further downgrade.
ISB ABBUNDZENTRUM: Claims Registration Period Ends June 3
---------------------------------------------------------
Creditors of ISB Abbundzentrum GmbH have until June 3, 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 July 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 Rostock
Hall 330
Zochstrasse 18057
Rostock
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:
Bjoern Junge
Graf-Schack-Strasse 14
18055 Rostock
Germany
The court opened bankruptcy proceedings against the company on
April 22, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
ISB Abbundzentrum GmbH
Attn: Dirk Kaireitis, Manager
Silder Moor 4
18196 Kavelstorf
Germany
LANOR ENERGY: Claims Registration Period Ends June 15
-----------------------------------------------------
Creditors of Lanor Energy Systems Deutschland GmbH have until June
15, 2009, to register their claims with court-appointed insolvency
manager.
Creditors and other interested parties are encouraged to attend
the meeting at 8:30 a.m. on July 21, 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:
Udo Claes-Hellmich
Overwegstrasse 47
45879 Gelsenkirchen
Germany
The court opened bankruptcy proceedings against the company on
April 27, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
Lanor Energy Systems Deutschland GmbH
Winkelfeld 4
45739 Oer-Erkenschwick
Germany
Attn: Dr. Markus Hoppe, Manager
Buntspechtweg 13
58239 Schwerte
LBB GMBH: Claims Registration Period Ends June 15
-------------------------------------------------
Creditors of LBB GmbH have until June 15, 2009, to register their
claims with court-appointed insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at 8:15 a.m. on July 9, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Wuerzburg
Room 14
Second Stock
Tiepolostr. 6
Wuerzburg
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:
Stefan Beck
Augustinerstr. 5
97070 Wuerzburg
Germany
Tel: 0931/355520
The court opened bankruptcy proceedings against the company on
April 27, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
LBB GmbH
Attn: Christoph Baumann and
Herbert Blank, Managers
Winterhauser St. 65 a
97084 Wuerzburg
Germany
MAGISTA ARBEITSVERMITTLUNG: Claims Registration Ends May 19
-----------------------------------------------------------
Creditors of Magista Arbeitsvermittlung & Personalberatung GmbH
have until May 19, 2009, to register their claims with court-
appointed insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at 2:05 p.m. on July 16, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Hannover
Hall 226
Second Upper Floor
Service Bldg.
Hamburger Allee 26
30161 Hannover
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:
Kaufmann Torsten Gutmann
Kriegerstrasse 44
30161 Hannover
Germany
Tel: 0511 22062680
Fax: 0511 22062689
The court opened bankruptcy proceedings against the company on
April 21, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
Magista Arbeitsvermittlung &
Personalberatung GmbH
Attn: Wilfried Lackert, Manager
Siemensstrasse 12
30916 Isernhagen
Germany
METAL TECHNOLOGIES: Files for Preliminary Insolvency
----------------------------------------------------
Metal Bulletin reports that according to the commercial register
of the district court of Wuerzburg, Metal Technologies Kitzingen
GmbH filed for preliminary insolvency last week.
Bruno Fraas was appointed preliminary insolvency administrator to
the company, Metal Bulletin relates.
Headquartered in Kitzingen, Germany, Metal Technologies Kitzingen
GmbH -- http://www.mtk-giesserei.de/-- is one of the ten biggest
foundries in Germany. As a development supplier, the company
focuses on the automotive industry and on mechanical engineering.
RA INNENAUSBAU: Claims Registration Period Ends May 19
------------------------------------------------------
Creditors of RA Innenausbau GmbH have until May 19, 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 9, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Offenbach am Main
Hall 166N
First Floor
Kaiserstrasse 16-18
63065 Offenbach am Main
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:
Fatma Kreft
Neue Mainzer St. 84
60311 Frankfurt am Main
Germany
Tel: 069/6773677-0
Fax: 069/6773677-20
The court opened bankruptcy proceedings against the company on
April 21, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
RA Innenausbau GmbH
Flur St. 5
63500 Seligenstadt
Germany
Attn: Rainer Rau, Manager
Sandweg 11
63500 Seligenstadt
Germany
TBM SUPPLIES: Claims Registration Period Ends May 20
----------------------------------------------------
Creditors of TBM Supplies & Service GmbH have until May 20, 2009,
to register their claims with court-appointed insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at noon on June 10, 2009, at which time the insolvency
manager will present his first report.
The meeting of creditors will be held at:
The District Court of Kleve
Meeting Hall C 58
Ground Floor
Schlossberg 1
47533 Kleve
Germany
Claims set out in the insolvency manager's report will be verified
by the court during this meeting. Creditors may also constitute a
creditors' committee or opt to appoint a new insolvency manager.
The insolvency manager can be reached at:
Natascha Habura
Eichendorffstrasse 25
47800 Krefeld
Germany
Tel: 0215180580
Fax: 02151805858
The court opened bankruptcy proceedings against the company on
April 23, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
TBM Supplies & Service GmbH
Weseler St. 4
46519 Alpen
Germany
Attn: Ralf Mrnka, Manager
Oleanderweg 77
47445 Moers
Germany
TW BAU: Claims Registration Period Ends May 29
----------------------------------------------
Creditors of TW Bau 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 11.00 a.m. on July 1, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Stralsund
Hall AE 26
House A
Bielkenhagen 9
Stralsund
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:
Stefan Schuppa
Bleichstrasse 15
17489 Greifswald
Germany
The court opened bankruptcy proceedings against the company on
April 23, 2009. Consequently, all pending proceedings against the
company have been automatically stayed.
The Debtor can be reached at:
TW Bau GmbH
Attn: Werner Riedelsheimer, Manager
Am Helmshager Berg 2
17489 Greifswald
Germany
=============
I R E L A N D
=============
LUNAR FUNDING: Moody's Cuts Rating on EUR10 Mil. Notes to 'B3'
--------------------------------------------------------------
Moody's Investors Service has downgraded its rating of the note
issued by Lunar Funding I Series 2.
This note is a repack of Class Q Combination Secured Credit-Linked
Notes due 2019 of Skye CLO I Limited and the 4.625 per cent Notes
due 2013 of BK Ned Gemeenten BNG.
The Class Q Combination Notes are made of EUR3 million of the
unrated equity tranche of Skye CLO and EUR2 million of the Class E
tranche of Skye CLO, while the 4.625 per cent Notes due 2013 of BK
Ned Gemeenten BNG are the collateral for EUR5 million of the Super
Senior Swap of Skye CLO.
While the original balance of this note is EUR10 million, the
current rated balance of this note is only EUR6.65 million after
taking into account past equity distributions and partial
amortization of the Super Senior Swap.
The rating action is linked to the recent rating actions on Skye
CLO on April 27, 2009, at which time Class E Notes were downgraded
to Caa1.
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 actions are:
Lunar Funding I Series 2:
(1) EUR10 million Secured Asset-Backed Notes due 2019
-- Current Rating: B3
-- Prior Rating: Baa3, on review for possible downgrade
-- Prior Rating Action: 13 March 2009, Baa3 placed under review
for possible downgrade
=========
I T A L Y
=========
CHRYSLER LLC: Hedge Funds Named; Fiat Deal Has Legal Questions
--------------------------------------------------------------
As widely reported, U.S. President Barack Obama called certain
holders of Chrysler LLC's first lien debt as "speculators" in
public criticism for refusing to join Chrysler's biggest banks in
the government-brokered deal to wipe out Chrysler's US$6.9 billion
debt and move forward with an out-of-court alliance with Fiat.
White & Case LLP, counsel for these dissident lenders, asked the
U.S. Bankruptcy Court for the Southern District of New York to
allow it to withhold the identities of its clients from the
public. Under Rule 2019 of the Federal Rules of Bankruptcy
Procedure, lawyers are required to disclose the names of their
clients when they appear in bankruptcy cases.
The non-TARP lenders, constituting debt holders who didn't receive
funding in the Troubled Assets Relief Program, wanted relief from
that requirement, citing dozens of death threats after they have
been chastised by President Obama. The non-TARP lenders' lawyer
has also claimed that public opinion has been inflamed against his
clients by Michigan Governor Jennifer Granholm, who said those
objecting to the Chrysler reorganization were "a few greedy hedge
funds," Bloomberg's Bill Rochelle said.
Judge Arthur Gonzalez, however, denied the group's request to
reveal its members' identities only to the bankruptcy court.
Judge Gonzalez said the lenders have no evidence that keeping
their identities private would help protect them, Bloomberg
reported.
As a result, when White & Case filed its verified statement under
FRBP Rule 2019, its list of clients was not redacted, as earlier
proposed. Its clients are:
Schultze Master Fund Ltd.
3000 Westchester Avenue, Ste. 204
Purchase, NY 10577
Arrow Distressed Securities Fund
3000 Westchester Avenue, Ste. 204
Purchase, NY 10577
Schultze Apex Master Fund 3000
Westchester Avenue, Ste. 204
Purchase, NY 10577
Stairway Capital Management II, L.P.
519 RXR Plaza
Uniondale, NY 11556
Group G Partners LP
800 Third Avenue, 23rd Floor
New York, NY 10022
GGCP Sequoia L.P.
800 Third Avenue, 23rd Floor
New York, NY 10022
Oppenheimer Senior Floating Rate Fund
Two World Financial Center
225 Liberty Street
New York, NY 10281
Oppenheimer Master Loan Fund LLC
Two World Financial Center
225 Liberty Street
New York, NY 10281
Foxhill Opportunity Master Fund, LP
502 Carnegie Center
Princeton, NJ 08540
According to Bloomberg, Judge Gonzalez said criticism is inherent
in any bankruptcy, and President Obama shouldn't be singled out as
an exceptional party given the government's involvement with
Chrysler.
Robert W. Hamilton, Esq., a lawyer for Chrysler, said that the
threats couldn't be taken seriously, as they were postings on an
Internet message board affiliated with the Washington Post.
"Anyone with a passing familiarity with the hyperbolic rants on
such boards on the Internet would not take such comments
seriously."
Some Hedge Funds Have Backed Out
According to the Rule 2019 disclosure, "White & Case has
represented, at various times prior to today, other Senior Lenders
who have elected for various reasons to withdraw from the Chrysler
Non-TARP Lenders, and is aware of other Senior Lenders who have
not consented to the current proposal made by the Debtors to the
Senior Lenders but who have declined to join the Chrysler Non-
TARP Lenders, as a consequence of concerns stemming from publicity
of these chapter 11 cases."
A decreasing number of creditors remain willing to ask this Court
for fair treatment under the law, said Gerard H. Uzzi, Esq., at
White & Case. "The pressure on the Chrysler Non-TARP Lenders
grows by the hour. For this reason, a number of lenders have
sought representation in this case, but only on the condition that
their identity not be disclosed publicly," the lawyer said in a
motion seeking to redact the Rule 2019 disclosure.
The Non-TARP lenders aver the that, as of May 5, 2009, they
collectively are the beneficial owner of, or the holder or manager
of, various accounts with investment authority, contractual
authority or voting authority for more than US$295,000,000
principal amount of the senior secured first lien debt. The first
lien debt incurred by Chrysler aggregate US$6.9 billion.
Each of the Chrysler Non-TARP Lenders will lose money for their
investors based on the current proposal made by the Debtors to the
Senior Lenders, Gerard H. Uzzi, Esq., at White & Case, said. None
of the Chrysler Non-TARP Lenders hold any credit default swaps or
hedges with respect to their holdings of senior debt.
The first-lien lenders also denied that they have refused to any
concessions pre-bankruptcy. They said they offered a compromise
where they would be willing to accept 60% of the US$6.9 billion
rather than the 29 percent, or US$2 billion, offered by the
government.
White & Case may be contacted at:
WHITE & CASE LLP
1155 Avenue of the Americas
New York, New York 10036-2787
Telephone: (212) 819-8200
Facsimile: (212) 354-8113
Legality of Fiat Deal Questioned
According to Mr. Uzzi, on April 30, the first time a U.S.
President made a national address announcing a Chapter 11 filing,
President Obama singled out creditors who did not agree to the
government's intentions regarding Chrysler, which includes paying
billions of dollars to unsecured creditors while paying first-lien
secured creditors less than thirty cents on the dollar.
The President publicly chastised these secured creditors for
having the temerity to enforce their constitutional rights in this
court of law, branding them as "speculators," making clear that "I
don't stand with them." Mr. Uzzi asserts that the President's
remarks announcing the bankruptcy filing are merely "the most
public in a series of steps undertaken by the current
administration to subvert the rule of law by forcing Chrysler
stakeholders to agree to a sub rosa plan of reorganization which
wholly ignores time honored bankruptcy principles."
Ann Woolner, in a commentary at Bloomberg, said that the Fiat-
Chrysler deal may be good for the economy, but the Chrysler deal
with Fiat, which is to be accomplished under Section 363 of the
Bankruptcy Code, is not "legal."
The non-TARP lenders, which constitute the minority, assert that
paying billions to unsecured creditors violates the rules of
priority in bankruptcy because they are to receive only
US$2 billion, which they say is the "rough equivalent" of what
they
would realize in liquidation, Mr. Rochelle said.
Under Chrysler's bankruptcy package, secured lenders holding
US$6.9 billion will only recover 30%. Some unsecured creditors,
which are of lower rank to the secured lenders, however, will
receive payments in the U.S. government and Fiat-backed plan for
Chrysler.
The plan "would bulldoze well-established rights of secured
creditors, property rights the U.S. Constitution guarantees,"
Ms. Woolner says. Section 1129(b)(2) of the Bankruptcy Code,
known as the "absolute priority rule", provides that a plan under
Chapter 11 is "fair and equitable" with respect to a dissenting
impaired class of claimants if the creditors in the class receive
or retain property of a value equal to the allowed amount of their
claims or, failing that, no creditor of lesser priority, or
shareholder, receives any distribution under the plan.
The non-TARP lenders said improper payments to junior creditors
include US$5.3 billion going to trade suppliers, US$4.5 billion
for warranty claims and employee wages, US$9.8 billion for
workers' benefits, and US$5 billion toward under-funded pensions.
According to Ms. Woolner, a Sec. 363 sale is perfectly legal when
a sound business reason demands it and when it isn't
reorganization in disguise. But she says that the transaction
appears to be aimed at resolving creditors claims and may be sub
rosa plan of reorganization, a secret reordering dressed up to
look like a sale, which is forbid by bankruptcy law.
Regardless if the Chrysler-Fiat transaction doesn't appear to be a
true sale or whether it appears to favor junior creditors over
senior creditors, the bankruptcy judge may still end up approving
the deal, Ms. Woolner says.
"There's an enormous momentum in favor of the government
plan," Ms. Woolner quoted Jay Westbrook, who teaches bankruptcy
law at the University of Texas, as saying.
In response to questions of whether the "absolute priority rule"
will kill the sale, Jim McCafferty, in an article, points to
Chrysler's opening memorandum which focused on the US Supreme
Court's classic pronouncement in NLRB v. Bildisco & Bildisco, 465
U.S. 513, 528 (1984), where the Court stated that the "fundamental
purpose of reorganization is to prevent the debtor from going into
liquidation, with an attendant loss of jobs and possible misuse of
economic resources." This principle, Chrysler argues, is
paramount and (quoting NY's judicial patriarch, Bankruptcy Judge
Lifland, in the old Eastern Airlines case) "all other bankruptcy
policies are subordinated" to it.
Mr. McCafferty, on the other hand, says that a Supreme Court
pronouncement that would favor the Non-Tarp lenders is Raleigh v.
Ill. Dep't of Rev., 530 U.S. 15, 24-25 (2000) (argued in victory
by now Chicago Bankruptcy Judge Ben Goldgar), where the Court
stated:
Bankruptcy courts are not authorized in the name of equity to
make wholesale substitution of underlying law controlling the
validity of creditors' entitlements, but are limited to what
the Bankruptcy Code itself provides.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge
and Mopar(R) brand vehicles and products. The company has dealers
worldwide, including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan, and Australia.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for US$7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to US$6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the US$4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler has reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler's says that as of Dec. 31, 2008, it had US$39,336,000,000
in assets and US$55,233,000,000 in debts. Chrysler had US$1.9
billion in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Court Approves Fiat-Led Auction for Business
----------------------------------------------------------
Judge Arthur Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York approved the proposed sale process
for Chrysler LLC's operating assets.
Under the Court-approved process, Chrysler would transfer its
assets to a new company in which Italy's Fiat SpA would initially
hold a 20% stake, absent higher and better bids at an auction on
May 27. Bids will be due May 20. Chrysler will return to the
Court to seek approval of the results of the auction at a hearing
also on May 27.
Judge Gonzalez, according to Bloomberg, also approved a
US$35 million breakup fee for Fiat if it's outbid at the auction.
Chrysler's financial adviser, Greenhill & Co., said the Fiat offer
was fair and the only deal available to Chrysler.
Judge Gonzalez concluded the hearing on 11 p.m. on May 5,
overruling objections by a dissident group of first-lien lenders.
The group has been blamed by President Barack Obama for Chrysler's
bankruptcy filing after they refused to support an out-of-court
restructuring plan backed by Fiat and the U.S. and Canadian
government.
Judge Gonzalez denied the request of the "non-TARP lenders" who
constitute a minority of the first-lien lenders -- majority of the
first lien-lenders support the Fiat transaction -- to withhold
their identities from the public. Under Rule 2019 of the Federal
Rules of Bankruptcy Procedure, lawyers firms disclose the name of
their clients when they appear in bankruptcy cases. The non-TARP
lenders, constituting debt holders who didn't receive funding in
the Troubled Assets Relief Program, wanted relief from that
requirement, citing dozens of death threats after they have been
chastised by President Obama. The non-TARP lenders' lawyer has
also claimed that public opinion has been inflamed against his
clients by Michigan Governor Jennifer Granholm, who said those
objecting to the Chrysler reorganization were "a few greedy hedge
funds."
The objecting lenders also previously filed more papers protesting
procedures in which other bids would be due May 15 in advance of a
May 21 hearing for approval of the sale. The Company agreed to
move the schedule back nearly a week at the request of the newly-
appointed creditors' committee. Under the Court-approved
procedures, competing bids will be due May 20.
The objectors argued that the proposed sale rules "in effect
preclude anyone but the government from bidding." The lenders
objected to the auction rules that require that bids not be
conditioned on the ability to raise financing or to investigate
Chrysler's financial condition.
The creditors also took issue with requirements that competing
bids must agree to union labor contracts "without any showing that
such agreements benefit the estate." In addition, they didn't
believe other bidders should be compelled to "assume billions in
liabilities held by certain favored unsecured creditors."
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge
and Mopar(R) brand vehicles and products. The company has dealers
worldwide, including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan, and Australia.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for US$7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to US$6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the US$4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler has reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler's says that as of Dec. 31, 2008, it had US$39,336,000,000
in assets and US$55,233,000,000 in debts. Chrysler had US$1.9
billion in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Reached Initial Pact With Kia Before Courting Fiat
----------------------------------------------------------------
Chad Bray and David McLaughlin at Dow Jones Newswires report that
Chrysler LLC wood companies for potential alliances and reached an
agreement with Kia Motors Corp. last year before negotiating a
merger with Fiat SpA.
According to Dow Jones, former Chrysler vice chairperson Tom
LaSorda spent almost all of his time seeking to forge
relationships with global automakers, including Nissan Motor Co.,
and General Motors Co., as slumping sales in the U.S. continued to
erode the Company's financial stability.
According to Dow Jones, Chrysler chief procurement officer Scott
R. Garberding said that the Company reached an initial agreement
with Kia about purchasing that Company's vehicle and selling it as
a Dodge. Dow Jones relates that Mr. Garberding said during a
hearing at the U.S. Bankruptcy Court for the Southern District of
New York that Chrysler negotiated a term sheet to purchase and
modify a vehicle from Kia, which later backed out of the deal due
to manufacturing issues.
Dow Jones notes that the potential Kia partnership shows how dire
Chrysler's situation had become and how far it was willing to go
to protect its survival.
Chrysler, says Dow Jones, will now sell most of its assets to a
new company that will be owned by Fiat, the United Auto Workers
union, and the U.S. and Canadian governments. Dow Jones states
that the Court is considering rules for selling Chrysler to Fiat
or another bidder.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge
and Mopar(R) brand vehicles and products. The Company has dealers
worldwide, including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan, and Australia.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for US$7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to US$6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the US$4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler has reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler's says that as of Dec. 31, 2008, it had US$39,336,000,000
in assets and US$55,233,000,000 in debts. Chrysler had US$1.9
billion in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
FIAT SPA: Denies It Will Cut 18,000 Jobs Following GM Europe Deal
-----------------------------------------------------------------
BBC News reports that Italy's Fiat SpA has denied a report in
Germany's Frankfurter Allgemeine Zeitung newspaper that it
would cut 18,000 jobs and shut down 10 assembly and component
sites if it reached a deal with GM Europe.
BBC relates The Frankfurter Allgemeine Zeitung report, citing an
internal Fiat strategy plan dated April 3, said that Vauxhall
assembly lines in Luton and Ellesmere Port, as well as the Opel
factory in Antwerp, Belgium, would be among those shut down, along
with Fiat factories in Pomigliano, near Naples, and in Termini
Imerese, Sicily. The German paper added three Opel plants
producing gearboxes -- Bochum, Kaiserslautern and Ruesselsheim,
Germany -- would also be partially shut down, BBC states.
Fiat, however, said the information was not generated by Fiat and
did not form part of any plan prepared by the Italian carmaker,
BBC notes.
On May 6, 2009, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported that Sergio Marchionne, chief executive
officer of Fiat SpA, on Monday presented his plan for Opel,
General Motors Corp.'s German unit. Bloomberg News related after
meeting with Mr. Marchionne, Germany Economy Minister Guttenberg
told reporters that Fiat's proposal would retain Opel's factories
in three of four German cities, although he said a fourth plant,
in Kaiserslautern, may be shut. Fiat plans to keep the Opel brand
and won't put its own debt into Opel under its proposal, Bloomberg
News said citing Mr. Guttenberg. According to Bloomberg News,
Fiat may spin off its automobile unit following a purchase of the
German unit.
About Fiat SpA
Headquartered in Turin, Italy, Fiat SpA (BIT:F) --
http://www.fiatgroup.com/-- is principally engaged in the design,
manufacture and sale of automobiles, trucks, wheel loaders,
excavators, telehandlers, tractors and combine harvesters.
Through its subsidiaries, Fiat operates mainly in five business
areas: Automobiles, including sectors led by Maserati SpA, Ferrari
SpA and Fiat Group Automobiles SpA, which design, produce and sell
cars under the Fiat, Alfa Romeo, Lancia, Fiat Professional,
Abarth, Ferrari and Maserati brands; Agricultural and Construction
Equipment, which is led by Case New Holland Global NV; Trucks and
Commercial Vehicles, which is led by Iveco SpA; Components and
Production Systems, which includes the sectors led by Magneti
Marelli Holding SpA, Teksid SpA, Comau SpA and Fiat Powertrain
Technologies SpA, and Other Businesses, which includes the sectors
led by Fiat Services SpA, a publishing house Editrice La Stampa
SpA and an advertising agency Publikompass SpA.
* * *
As reported in the Troubled Company Reporter-Europe on Feb. 25,
2009, Moody's Investors Service downgraded Fiat S.p.A's long term
ratings to Ba1 from Baa3 and its short term ratings to Not Prime
from Prime-3. The outlook on the ratings is negative. At the
same time Moody's assigned a Ba1 Corporate Family Rating. The
rating action concluded Moody's review for downgrade initiated on
January 15, 2009.
FIAT SPA: S&P Retains Negative Watch on 'BB+' Corporate Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB+' long-term
corporate credit rating on Italian industrial group Fiat SpA
remains on CreditWatch with negative implications, where it was
placed on Jan. 22, 2009. At the same time, the 'B' short-term
corporate credit rating was affirmed.
"The CreditWatch status reflects S&P's view of Fiat's weak
liquidity profile and the possible change in group structure as a
result of Fiat's willingness to assess the viability of a merger
of the activities of Fiat Group Automobiles (including the
interest in Chrysler) and General Motors Europe into a new
company," said Standard & Poor's credit analyst Barbara
Castellano.
S&P views the current situation as very unpredictable since it
involves several companies and governments. S&P expects to
monitor any developments over the coming weeks and comment or take
rating actions as S&P deems appropriate.
On April 30, 2009, Fiat closed an agreement with the U.S.
government giving the Italian company 20% of the equity of the
reorganized Chrysler that will emerge from the bankruptcy process.
In exchange, Chrysler will be able to use some of Fiat's
intellectual properties and technologies, as well as receive
ongoing management services to help it in the turnaround. Fiat
will also have the right to receive up to 15% in additional equity
in three 5% tranches, each in exchange for meeting certain
technical performance metrics. In addition, Fiat will receive an
option to acquire another 16% shareholding between Jan. 1, 2013,
and June 30, 2016, under specific conditions.
S&P considers the turnaround of Chrysler to be a challenging
target that will require the dedication of a number of managers
and technical employees of the Fiat group. On top of this
initiative, Fiat intends to merge its automobile activities with
General Motor's European subsidiaries Opel and Vauxhall. This
merger is now under discussion with the German government, which
is under public pressure to financially support the German
automaker Opel. If this second deal is concluded, the auto group
resulting from the joining of Fiat Group Automobiles, Chrysler,
and Opel/Vauxhall would produce about 6 million vehicles annually.
In this case, Fiat would evaluate several corporate structures,
including the potential spin off of Fiat Group Automobiles and the
subsequent listing of a new company that combines those activities
with the activities of General Motors Europe.
S&P aims to resolve the CreditWatch listing once S&P has received
enough information on the conclusion of Fiat's discussions to
enlarge its auto activities through the merger with General
Motor's European activities. Before the resolution, S&P also
expect to gain more clarity on the structure of the Fiat group and
on the initial steps Fiat is undertaking to improve the situation
at Chrysler.
"We will focus our attention on Fiat's capacity to generate cash
and fulfill its financial obligations, its ability to strengthen
its current weak liquidity profile, and the evolution of the Fiat
group's operating performance in the current difficult market
environment," said Ms. Castellano. "We aim to solve the
CreditWatch listing in the next 90 days, but if this is impossible
due to the lack of the needed information, S&P will provide an
updated opinion on the issue."
===================
K A Z A K H S T A N
===================
HALYK SAVINGS: S&P Lowers LT Counterparty Credit Ratings to 'BB'
----------------------------------------------------------------
Standard & Poor's Ratings Services said it downgraded two leading
Kazakhstan-based banks, Kazkommertsbank (JSC) and Halyk Savings
Bank of Kazakhstan.
S&P lowered the long-term counterparty credit ratings on KKB to
'B+' from 'BB-' and on Halyk to 'BB-' from 'BB'. The outlooks on
both banks are negative. At the same time, S&P affirmed the 'B'
short-term counterparty credit ratings on both banks.
"The rating actions reflect our uncertainty regarding future
support for KKB and Halyk from the Kazakh government," said
Standard & Poor's credit analyst Ekaterina Trofimova.
In light of this, S&P has revised its classification of the
Republic of Kazakhstan (foreign currency BBB-/Negative/A-3, local
currency BBB/Negative/A-3) to "supportive" from "interventionist"
with regard to the government's propensity to intervene and
support systemically important banks.
S&P continues to view KKB and Halyk as highly important to the
Kazakh economy and financial sector, and both remain government-
related entities under Standard & Poor's criteria. In accordance
with S&P's methodology for rating GREs, its assessment of the
potential for a government to provide extraordinary support to
systemically important private sector banks is based on a
country's willingness, track record, and financial ability to
provide support, subject to legal and regulatory barriers.
The recent failures of BTA Bank J.S.C. (D/--/D) and Alliance Bank
JSC (SD/--/SD), both of which S&P previously classified as
systemically important banks in Kazakhstan, raise questions about
the government's willingness and ability to rescue financial
institutions and enable them to honor all their foreign and local
currency debts. Bank BTA failed despite its being majority owned
by the government, for example. Moral hazard concerns and the
strategic priority given to protecting the country's fiscal
reserves have constrained Kazakhstan's commitment to support its
banks, in S&P's opinion.
S&P notes the Kazakh government has provided funding and capital
support to its major banks -- over US$7 billion since the second
half of 2008. But these actions were not sufficient to prevent
the Bank BTA and Alliance failures. S&P no longer includes a one-
notch uplift, over the stand-alone credit profiles, in the long-
term counterparty credit ratings on KKB and Halyk, to reflect
future government support for these two banking groups.
KKB and Halyk remain systemically important GREs under S&P's
methodology. The government recently took a 21% stake in Halyk
and is in the process of obtaining a minority stake -- not to
exceed 25% -- in KKB.
S&P believes the Kazakh government will likely continue taking
supportive actions for KKB and Halyk, including the provision of
additional funding and making further capital investments. The
ratings on KKB and Halyk factor in material government support
measures implemented to date.
The negative outlooks on KKB and Halyk reflect the difficulties
both banks will likely encounter, S&P believes, in refinancing
existing funding with respect to future business growth. S&P
expects asset quality will deteriorate further at the two banks,
negatively affecting their capitalizations and financial
performances.
If this deterioration is greater than S&P expects or if Kazakh
economic problems deepen to the extent that S&P perceives they
materially affect Kazakh bank fundamentals, S&P would lower the
ratings on KKB, Halyk, or both.
The potential for an upgrade of either bank is currently slim, at
least until domestic market pressures ease -- a development S&P
considers unlikely in the near term. Significant reductions in
wholesale funding and loan concentrations, lower foreign currency
lending, stronger capitalization, improved asset quality, and
sustainable good financial performance would lead to us to raise
the ratings on one or both of the banks, depending on how each
bank negotiates the difficult operating environment in Kazakhstan.
KAZKOMMERTSBANK: S&P Cuts LT Counterparty Credit Ratings to 'B+'
----------------------------------------------------------------
Standard & Poor's Ratings Services said it downgraded two leading
Kazakhstan-based banks, Kazkommertsbank (JSC) and Halyk Savings
Bank of Kazakhstan.
S&P lowered the long-term counterparty credit ratings on KKB to
'B+' from 'BB-' and on Halyk to 'BB-' from 'BB'. The outlooks on
both banks are negative. At the same time, S&P affirmed the 'B'
short-term counterparty credit ratings on both banks.
"The rating actions reflect our uncertainty regarding future
support for KKB and Halyk from the Kazakh government," said
Standard & Poor's credit analyst Ekaterina Trofimova.
In light of this, S&P has revised its classification of the
Republic of Kazakhstan (foreign currency BBB-/Negative/A-3, local
currency BBB/Negative/A-3) to "supportive" from "interventionist"
with regard to the government's propensity to intervene and
support systemically important banks.
S&P continues to view KKB and Halyk as highly important to the
Kazakh economy and financial sector, and both remain government-
related entities under Standard & Poor's criteria. In accordance
with S&P's methodology for rating GREs, its assessment of the
potential for a government to provide extraordinary support to
systemically important private sector banks is based on a
country's willingness, track record, and financial ability to
provide support, subject to legal and regulatory barriers.
The recent failures of BTA Bank J.S.C. (D/--/D) and Alliance Bank
JSC (SD/--/SD), both of which S&P previously classified as
systemically important banks in Kazakhstan, raise questions about
the government's willingness and ability to rescue financial
institutions and enable them to honor all their foreign and local
currency debts. Bank BTA failed despite its being majority owned
by the government, for example. Moral hazard concerns and the
strategic priority given to protecting the country's fiscal
reserves have constrained Kazakhstan's commitment to support its
banks, in S&P's opinion.
S&P notes the Kazakh government has provided funding and capital
support to its major banks -- over US$7 billion since the second
half of 2008. But these actions were not sufficient to prevent
the Bank BTA and Alliance failures. S&P no longer includes a one-
notch uplift, over the stand-alone credit profiles, in the long-
term counterparty credit ratings on KKB and Halyk, to reflect
future government support for these two banking groups.
KKB and Halyk remain systemically important GREs under S&P's
methodology. The government recently took a 21% stake in Halyk
and is in the process of obtaining a minority stake -- not to
exceed 25% -- in KKB.
S&P believes the Kazakh government will likely continue taking
supportive actions for KKB and Halyk, including the provision of
additional funding and making further capital investments. The
ratings on KKB and Halyk factor in material government support
measures implemented to date.
The negative outlooks on KKB and Halyk reflect the difficulties
both banks will likely encounter, S&P believes, in refinancing
existing funding with respect to future business growth. S&P
expects asset quality will deteriorate further at the two banks,
negatively affecting their capitalizations and financial
performances.
If this deterioration is greater than S&P expects or if Kazakh
economic problems deepen to the extent that S&P perceives they
materially affect Kazakh bank fundamentals, S&P would lower the
ratings on KKB, Halyk, or both.
The potential for an upgrade of either bank is currently slim, at
least until domestic market pressures ease -- a development S&P
considers unlikely in the near term. Significant reductions in
wholesale funding and loan concentrations, lower foreign currency
lending, stronger capitalization, improved asset quality, and
sustainable good financial performance would lead to us to raise
the ratings on one or both of the banks, depending on how each
bank negotiates the difficult operating environment in Kazakhstan.
* Fitch Downgrades Ratings on Three Banks in Kazakhstan
-------------------------------------------------------
Fitch Ratings has downgraded three Kazakh banks -- Halyk Bank,
Kazkommertsbank and Bank CenterCredit -- and non-bank lender
Astana Finance on support and asset quality concerns. Halyk has
been downgraded to Long-term Issuer Default 'B+' from 'BB-', KKB
to 'B-' from 'BB-', BCC to 'B' from 'B+' and AF to 'CCC' from
'B+'. The agency has also downgraded Moskommertsbank, the Russian
subsidiary of KKB, to 'CCC' from 'B-', and Astana Finance Leasing,
a subsidiary of AF, to 'CCC' from 'B+'.
The downgrades reflect a combination of support and asset quality
concerns. Fitch has revised downwards its expectations of
government support for the country's leading financial
institutions following the defaults of BTA Bank ('RD' (Restricted
Default)) and Alliance Bank JSC ('RD') and the agency's
understanding that there is now a limited willingness on the part
of the Kazakh authorities to provide further capital support to
the banking sector. In Fitch's view, the Kazakh authorities might
consider moderate further capital injections, beyond those already
announced, for the country's leading banks, but substantial
contributions are now unlikely to be forthcoming. At the same
time, Fitch's concerns about banks' potential capital requirements
have increased following further sharp deterioration in reported
asset quality in Q109 and reviews of individual banks' loan books
during recent meetings. In the agency's view, reported asset
quality metrics are likely to continue to worsen in the next few
months as the extent of underlying problems in banks' loan books
becomes more apparent, portfolios continue to season and the
impact of the February 2009 KZT devaluation continues to feed
through into loan performance.
Halyk's reported asset quality has deteriorated sharply, with
loans overdue by 90 days according to local regulatory data up to
8.7% at end-Q109 from 6.4% at end-2008, and those overdue by one
day increasing to a high 22% from 13.1%. The regulatory total
capital ratio of 11.3% at end-Q109 (pro forma 13.1% allowing for
the expected KZT33 billion preference share issue) and
reserves/gross loans ratio of 14.4% provide only limited loss
absorption capacity, given asset quality trends. Relative to KKB,
Halyk's credit profile is supported by its somewhat less high risk
loan book, the much lower proportion of foreign funding (reducing
the potential attractiveness of debt restructuring), the bank's
smaller size (reducing the potential cost of government support)
and the close relationship between the ultimate majority
shareholders (the President's daughter and son-in-law) and the
Kazakh authorities. However, if asset quality continues to
deteriorate without further new capital injections (beyond the
planned KZT33 billion) coming in, Halyk will likely be downgraded
further, a risk reflected in the Negative Outlook on the bank.
The recent worsening in reported asset quality numbers at KKB has
not been as sharp as at some peers (90 day overdues reported to
the local regulator up to 6.3% from 5.4% during Q109; one day
overdues up to 16% from 11.5%). However, in Fitch's view these
numbers severely underestimate the scope of asset quality problems
at the bank, with a significant part of the portfolio already
restructured and the majority of the bank's largest loans showing
clear signs of impairment. The regulatory capital ratio of 12.1%
at end-Q109 (13.2% pro forma allowing for the expected KZT36
billion equity injection) and reserves/loans ratio of 19.8%
provide inadequate loss absorption capacity, in the agency's view,
given the scope of asset quality problems, and significant
recapitalisation is likely to be needed. The very high proportion
of foreign funding is a further weakness, and restructuring of
this could ultimately be seen by the Kazakh authorities as the
preferred way to support the capital position of the bank should
its credit profile continue to weaken. The Negative Outlook
reflects the potential for further asset quality deterioration,
which could lead to the bank's recapitalization needs
crystallizing in the forthcoming months.
Although BCC's reported loan impairment has increased (90 day
overdues reported to the local regulator up to 4.4% from 2.5% in
Q109; one day overdues up to12.2% from 7.7%), asset quality
remains less bad than at peers. Loss absorption capacity is also
reasonable, with the end-Q109 regulatory capital ratio standing at
18.3% and reserves/loans ratio 10.2%, and, as at Halyk, the
proportion of foreign funding is more moderate than at peers. The
Evolving Outlook reflects the potential for BCC to be downgraded
further, should asset quality continue to deteriorate without
minority shareholder Kookmin Bank ('A+'/Negative Outlook)
completing its takeover of the bank. However, the Outlook also
takes into account the potential for a multi-notch upgrade of BCC
should Kookmin ultimately increase its ownership from the current
30% to a majority stake and become a strategic shareholder of the
bank.
The downgrade and RWN on AF reflect increased uncertainty about
the readiness of the Kazakh authorities to support the company,
and the risk that deterioration in the company's credit profile
could result in it needing to restructure its liabilities. AF's
credit profile is undermined by its weak capital and liquidity
positions, deteriorating asset quality, high individual borrower
concentrations and exposure to the construction/real estate sector
and high dependence on foreign wholesale funding.
Rating actions are:
Halyk Bank of Kazakhstan
-- Long-term foreign currency IDR: downgraded to 'B+' from 'BB-\
'; removed from RWN; Negative Outlook assigned
-- Long-term local currency IDR: downgraded to 'B+' from 'BB-';
removed from RWN; Negative Outlook assigned
-- Short-term foreign currency IDR: affirmed at 'B'
-- Short-term local currency IDR: affirmed at 'B'
-- Support rating: downgraded to '5' from '3'; removed from RWN
-- Individual rating: downgraded to 'D/E' from 'D'
-- Support Rating Floor: revised to 'No Floor' from 'BB-';
removed from RWN
-- Senior unsecured debt: downgraded to 'B+' from 'BB-'; removed
from RWN; Recovery Rating assigned at 'RR4'
Kazkommertsbank
-- Long-term foreign currency IDR: downgraded to 'B-' from 'BB-
'; RWN removed; Negative Outlook assigned
-- Long-term local currency IDR: downgraded to 'B-' from 'BB-';
RWN removed; Negative Outlook assigned
-- Short-term foreign currency IDR: affirmed at 'B'
-- Short-term local currency IDR: affirmed at 'B'
-- Support rating: downgraded to '5' from '3'; removed from RWN
-- Individual rating: downgraded to 'E' from 'D/E'
-- Support Rating Floor: revised to 'No Floor' from 'BB-';
removed from RWN
-- Senior unsecured debt: downgraded to 'B-' from 'BB-'; removed
from RWN; Recovery Rating assigned at 'RR4'
-- Subordinated debt: downgraded to 'CC' from 'B+'; removed from
RWN; Recovery Rating assigned at 'RR6'
-- Tier 1 perpetual subordinated notes: downgraded to 'CC' from
'B-'; removed from RWN; Recovery Rating assigned at 'RR6'
CB Moskommertsbank
-- Long-term foreign currency IDR: downgraded to 'CCC' from 'B-
'; Outlook Negative
-- Short-term foreign currency IDR: downgraded to 'C' from 'B'
-- National Long-term rating: downgraded to 'B-(rus)' from 'BB-
(rus)'; Outlook Negative
-- Individual rating: affirmed at 'E'
-- Support rating: affirmed at '5'
Bank Centercredit
-- Long-term foreign currency IDR: downgraded to 'B' from 'B+';
removed from RWN; assigned Evolving Outlook
-- Short-term foreign currency IDR: affirmed at 'B'
-- Support rating: downgraded to '5' from '4'
-- Individual rating: downgraded to 'D/E' from 'D';
-- Support Rating Floor: revised to 'No Floor' from 'B+';
removed from RWN; rating withdrawn
-- Senior unsecured debt: downgraded to 'B' from 'B+', removed
from RWN; Recovery Rating at 'RR4'
JSC Astana Finance
-- Long-term foreign currency IDR: downgraded to 'CCC' from
'B+'; remains on RWN
-- Long-term local currency IDR: downgraded to 'CCC' from 'B+';
remains from RWN
-- Short-term foreign currency IDR: downgraded to 'C' from 'B'
-- National Long-term rating: downgraded to 'B-(kaz))' from
'BBB-(kaz))'; remains on RWN
-- Individual rating: downgraded to 'E' from 'D/E'
-- Support rating: downgraded to '5' from '4', removed from RWN
-- Support Rating Floor: revised to 'No Floor' from 'B+',
removed from RWN
-- Senior unsecured debt: downgraded to 'CCC' from 'B+'; remains
on RWN; Recovery Rating at 'RR4'
Astana Finance Leasing Company JSC
-- Long-term foreign currency IDR: downgraded to 'CCC' from
'B+'; remains on RWN
-- Long-term local currency IDR: downgraded to 'CCC' from 'B+';
remains on RWN
-- Short-term foreign currency IDR: downgraded to 'C' from 'B'
-- National Long-term rating: downgraded to 'B-(kaz))' from
'BBB-(kaz))'; remains on RWN
-- Support rating: downgraded to '5' from '4'; removed from RWN
===================
K Y R G Y Z S T A N
===================
BI MOBILE: Creditors Must File Claims by May 29
-----------------------------------------------
CJSC Bi Mobile has shut down. Creditors have until May 29, 2009,
to submit proofs of claim to:
Mir Ave. 17/1
Bishkek
Kyrgyzstan
Tel: (0-775) 97-59-09
SOFTWARE DEVELOPMENT: Creditors Must File Claims by May 29
----------------------------------------------------------
LLC Software Development Studio has shut down. Creditors have
until May 29, 2009, to submit proofs of claim.
For futher information, contact (0-555) 88-34-42.
STOLICHNY OJSC: Court Names D. Kadinov as Insolvency Manager
------------------------------------------------------------
The Inter-District Court of Bishkek for Economic Issues appointed
D. Kadinov as insolvency manager for OJSC Stolichny. He can be
reached at:
D. Kadinov
Kuliev Str. 3
Bishkek
Kyrgyzstan
The court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
ED-1221/08mbc5.
===================
L U X E M B O U R G
===================
BERNARD L. MADOFF: Luxembourg's CSSF Says Fund Industry Recovering
------------------------------------------------------------------
Stephanie Bodoni at Bloomberg News reports that Jean Guill,
director-general of Luxembourg's Commission de Surveillance du
Secteur Financier, said Bernard L. Madoff's global fraud will have
little long-term effect on the country's EUR1.53 trillion (US$2
trillion) fund industry, noting that given "the size of the
Luxembourg fund market, Madoff is very small."
"It may be a huge figure for a single investor, but it makes up
less than 1 percent of assets managed by Luxembourg funds," Mr.
Guill told Bloomberg News in an interview at the CSSF.
Mr. Guill, as cited in the report, said that as the fallout from
Mr. Madoff's arrest and March 12 guilty plea have faded, the
nation’s mutual fund industry, the largest in Europe, has
recovered.
According to Bloomberg News, the CSSF has been forced to seek the
liquidation of three funds that invested with Mr. Madoff's firm
and another 14 funds and sub- funds have ceased redemptions to
customers while European investors have sued banks, auditors and
even the CSSF seeking damages, redemptions and access to documents
for use in future lawsuits. The report relates the regulator is
proceeding with investigations into custodian banks including
Luxembourg units of UBS AG and HSBC Holdings Plc that handled
money for investment funds.
The report says the CSSF in June will release a report on HSBC's
unit, the custodian bank for Herald (Lux) US Absolute Return Fund,
one of the three funds dissolved by the CSSF. In addition, Mr.
Guill is waiting for a reply from UBS to claims that it committed
a "grave breach" of oversight in its role as custodian bank for
the funds, the report notes.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC was a market maker in
U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq
stocks. The firm moved large blocks of stock for institutional
clients by splitting up orders or arranging off-exchange
transactions between parties. It also performed clearing and
settlement services. Clients included brokerages, banks, and
other financial institutions. In addition, Madoff Securities
managed assets for high-net-worth individuals, hedge funds, and
other institutional investors.
The firm is being liquidated in the aftermath of a fraud scandal
involving founder Bernard L. Madoff.
As reported by the Troubled Company Reporter on Dec. 15, 2008, the
Securities and Exchange Commission charged Mr. Madoff and his
investment firm with securities fraud for a multi-billion dollar
Ponzi scheme that he perpetrated on advisory clients of his firm.
The estimated losses from Madoff's fraud were allegedly at least
50 billion.
Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S.
istrict Court for the Southern District of New York granted the
application of the Securities Investor Protection Corporation for
a decree adjudicating that the customers of BLMIS are in need of
the protection afforded by the Securities Investor Protection Act
of 1970. Irving H. Picard, Esq., was appointed as trustee for the
liquidation of BLMIS, and Baker & Hostetler LLP was appointed as
counsel.
Mr. Madoff, if found guilty of all counts, would be imprisoned for
150 years, but legal experts expect the actual sentence to be much
lower and would still be an effective life sentence for the 70-
year-old defendant, WSJ notes. Mr. Madoff, WSJ relates, would
also face millions of dollars in possible criminal fines. The
report says that Mr. Madoff has been free on bail since his arrest
on December 11, 2008. There was no plea agreement with Mr. Madoff
in which leniency in sentencing might be recommended, the report
states, citing prosecutors.
=============
R O M A N I A
=============
* ROMANIA: Corporate Insolvencies Up 58% in First Quarter 2009
--------------------------------------------------------------
The total number of firms that entered insolvency in Romania in
the first quarter increased by 58% over the same period in 2008 to
5,173, Curierul National reports citing credit risk management
company Coface.
The report says of the total number of insolvent companies in the
first quarter of the year, 2,084 were under general insolvency
procedure, 888 under simplified insolvency procedure, 2183 in
bankruptcy and 18 under judicial reorganization.
The report relates according to Coface, there will be over 20,000
Romanian companies in cessation of payments at the end of the
year, 40% more as compared to the end of 2008. The report
discloses at the end of 2008, a total of 14,483 companies were
under various stages of the insolvency procedure. Of these, 6,022
firms were under general insolvency procedure, 4,771 under
simplified insolvency procedure, 3,672 in bankruptcy and 18 under
judicial reorganization.
===========
R U S S I A
===========
ALROSA: To Resume Sale of Diamonds This Month
---------------------------------------------
Alrosa will resume in May the sale of diamonds, RIA Novosti
reports citing Sergei Vybornov, the company's CEO.
Mr. Vybornov, as cited in the report, said the company had already
signed contracts with five companies on diamond sales worth some
US$300 million by the end of the year. The report recalls the
company earlier suspended the sale of diamonds due to the ongoing
economic crisis.
About Alrosa
ALROSA Co. Ltd. -- http://eng.alrosa.ru/eng/-- is engaged in the
exploration, mining, manufacture and sales of diamonds and one of
the world's major rough diamond producers. ALROSA produces about
20% of the world's rough diamond output and accounts for almost
100% of all rough diamonds produced in Russia.
* * *
As reported in the Troubled Company Reporter-Europe on April 9,
2009, Moody's Investors Service downgraded from Ba2 to Ba3 the
corporate family ratings of ALROSA Company Ltd. and senior
unsecured US$500 million 2014 notes raised by the group at ALROSA
Finance SA and guaranteed by ALROSA Company Ltd. The outlook is
negative.
KARBO-KHIM OJSC: Creditors Must File Claims by June 24
------------------------------------------------------
The Arbitration Court of Nizhegorodskaya commenced bankruptcy
proceedings against OJSC Karbo-Khim (TIN 5239000785) (Wood
Chemical Industry) after finding the company insolvent. The case
is docketed under Case No. ?43–29797/2008, 33–176.
Creditors have until June 24, 2009, to submit proofs of claims to:
O. Shelyakin
Insolvency Manager
Post User Box 151
105005 Moscow
Russia
The Court is located at:
The Arbitration Court of Nizhegorodskaya
Building 9
Kremlin
Nizhny Novgorod
Russia
The Debtor can be reached at:
OJSC Karbo-Khim
Lenina Str. 24
Syava
Shakhunskiy
Nizhegorodskaya
Russia
MEGAFON OJSC: Moody's Changes Outlook on 'Ba2' Rating to Positive
-----------------------------------------------------------------
Moody's Investors Service has changed the outlook to positive for
the Ba2 corporate family rating of OJSC MegaFon and the Ba2 rating
of the company's existing US$375 million senior notes.
The change in outlook reflects (i) the company's continued strong
operating performance, (ii) solid financial strength metrics,
(iii) good liquidity risk profile, and (iv) the resolution of
shareholder disputes relating to the company's ownership. The
positive outlook for the ratings also reflects Moody's
expectations that the mobile market in Russia is likely to
continue growing, albeit at a slower rate than in the past,
despite the economic contraction in the country.
Moody's expects the company to continue to grow its revenue and
EBITDA in 2009. Revenue and EBITDA growth will be further
supported by increasing core usage, enhancing value-added services
and improving operational efficiency. However, the EBITDA margin
is expected to decline.
MegaFon intends to invest approximately US$250 million in the 3G
network in 2009, in compliance with its capex commitments
following the award of the 3G licence. Overall, capital
expenditures are likely to remain relatively high, at around 20%
of 2009 revenue. The company has also indicated that it might pay
its shareholders a dividend in 2009, based on 2008 earnings.
Nevertheless, Moody's expects the company to generate positive
free cash flow going forward. MegaFon is also interested in
evaluating M&A transactions on a selective basis. The Ba2 rating
with positive outlook is based upon Moody's expectations that
distributions to shareholders and acquisitions will be managed
such that the balance sheet does not materially deteriorate and
that financial flexibility will be maintained.
Moody's understands that the prolonged dispute in share ownership
has been resolved. The company's shareholder structure is now:
25.1% Alfa Group, 43.8% TeliaSonera Group, 31.1% Usmanov Group.
The Ba2 rating takes into account: (i) a high level of mobile
penetration in the Russian mobile market (as of Q4 2008, official
mobile SIM-card penetration in Russia was at 129% while single-
user penetration was estimated at approximately 75-80%); (ii)
MegaFon's relatively high churn compared to its peers; and (iii)
the company's auditor has issued a Material Weakness Letter for
the year 2008, but Moody's understands that MegaFon has continued
to implement a number of measures to ensure the robustness of its
financial controls.
Moody's previous rating action was implemented on January 14,
2008, when the rating agency upgraded Megafon's corporate family
rating to Ba2 from Ba3 with stable outlook.
MegaFon is the third-largest mobile operator in Russia. It is the
only mobile operation covering all regions in the Russian
Federation, with a relatively minor presence in the Republic of
Tajikistan. The company generated US$7.0 billion in revenue and
US$3.5 billion in reported EBITDA for the financial year ending
December 31, 2008.
MOBILE TELESYSTEMS: Inks Deal w/ Banks to Reschedule US$630MM Loan
------------------------------------------------------------------
Mobile TeleSystems OJSC has agreed with a group of foreign banks
to reschedule its US$630 million syndicated loan until 2012, RIA
Novosti reports citing a source in banking quarters.
The report recalls MTS raised a syndicated loan facility worth a
total of US$1.33 billion in April 2006 for the refinancing of its
liabilities, and also for general corporate needs, including the
acquisition of companies. The loan facility was granted in two
tranches, US$630 million, which will have to be repaid at an
annual interest rate of LIBOR plus 6.5%, and US$730 million, for
three and five years, respectively, the report notes. The loan
facility, the report discloses, was arranged by The Bank of Tokyo-
Mitsubishi UFJ Ltd., Bayerische Landesbank, HSBC Bank plc, ING
Bank N.V., Raiffeisen Zentralbank Oesterreich AG and Sumitomo
Mitsui Banking Corporation Europe Limited. Later, some other
major foreign banks joined the loan syndicate as its underwriters
and managers, the report recounts.
The report relates according to the source, the reschedule
agreement with the banks is expected to be signed next week.
Headquartered in Moscow, Russia, Mobile TeleSystems OJSC (MTS) --
http://www.mtsgsm.com/-- is a provider of mobile cellular
communications services in Russia, Uzbekistan, Turkmenistan,
Armenia and Ukraine. The Company had a subscriber base of 82
million (57.4 million in Russia, 20 million in Ukraine, 2.8
million in Uzbekistan, 0.4 million in Turkmenistan and 1.4 million
in Armenia) at December 31, 2007. In addition to standard voice
services, MTS offers its subscribers value-added services,
including voice mail, short message service (SMS), general packet
radio service (GPRS), and various SMS- and GPRS-based information
and entertainment services (including multi-media message service.
The Company also offers its subscribers the ability to roam
automatically throughout Europe and in much of the rest of the
world, and as of December 31, 2007, it had bilateral roaming
agreements with 501 wireless operators in 201 countries. In
February 2009, the Company acquired Narico Holdings Limited.
* * *
OJSC Mobile TeleSystems currently carries a 'BB+' long-term issuer
default rating from Fitch Ratings with a negative outlook.
PAMIR CONSTRUCTION: Creditors Must File Claims by June 24
---------------------------------------------------------
The Arbitration Court of Omskaya commenced bankruptcy proceedings
against LLC Pamir Construction Company after finding the company
insolvent. The case is docketed under Case No. ?46-2722/2009.
Creditors have until June 24, 2009, to submit proofs of claims to:
S. Okulov
Insolvency Manager
Prospect Mira 189
644085 Omsk
Russia
PERMSKAYA FUEL: Permskiy Bankruptcy Hearing Set September 14
------------------------------------------------------------
The Arbitration Court of Permskiy will convene at 10:00 a.m. on
Sept. 14, 2009, to hear bankruptcy supervision procedure on CJSC
Permskaya Fuel Company (TIN 5902137725, PSRN 1025900521635). The
case is docketed under Case No. ?50–4329/2009.
The Temporary Insolvency Manager is:
I. Obukhov
Post User Box 10850
614056 Perm
Russia
The Debtor can be reached at:
CJSC Permskaya Fuel Company
Pushkina Str.13-121
614000 Perm
Russia
PERMSKIY RACETRACK: Creditors Must File Claims by May 24
--------------------------------------------------------
Creditors of OJSC Permskiy Racetrack (TIN 5905000528, PSRN
1025901213601) have until May 24, 2009, to submit proofs of claims
to:
L. Shlyapin
Temporary Insolvency Manager
Post User Box 2583
614070 Perm
Russia
The Arbitration Court of Permskiy will convene at 10:30 a.m. on
Aug. 14, 2009, to hear bankruptcy supervision procedure on the
company. The case is docketed under Case No. ?50–5506/2009.
The Debtor can be reached at:
OJSC Permskiy Racetrack
Shosse Kosmonavtov162
614065 Perm
Russia
RENOVA HOLDING: Moody's Withdraws 'B1' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service withdrew the B1 corporate family rating,
B2 probability of default rating and A2.ru national scale rating
of Renova Holding Ltd for business reasons at the company's
request.
Moody's previous rating action on Renova was on the April 7, 2009,
when the rating agency downgraded the corporate family rating of
Renova by one notch to B1, assigned national scale rating A2.ru
and assigned the negative outlook for the ratings.
Renova Holding Ltd is a Bahamas-based investment holding company
with principal investments in TNK-BP, UC RUSAL, a number of
Russian power generation and distribution companies, as well as
chemical, machinery, telecoms and media and real estate companies
in Russia and Europe.
TRANSSIBERIAN REINSURANCE: Fitch Affirms Insurer Rating at 'BB-'
----------------------------------------------------------------
Fitch Ratings has revised Russia-based Transsiberian Reinsurance
Corporation's Outlook to Negative from Stable. At the same time,
the agency has affirmed the company's Insurer Financial Strength
rating at 'BB-' and National IFS rating at 'A+(rus)'.
The Outlook revision reflects Fitch's expectation that Transsib
Re's underwriting earnings may weaken in light of the worsening
economic environment in Russia and the company's other key
markets. It also reflects the increased risk for investment
losses given the modest credit quality of Transsib Re's investment
portfolio. The reinsurer recorded a net loss of RUB23.9 million
in 2008 (2007: profit of RUB27.2 million) as a result of
investment losses and deterioration in underwriting performance.
The company recorded a profit of RUB15.3 million in Q109, although
this result was strongly supported by foreign exchange gains. The
Fitch-calculated loss ratio deteriorated to 77.2% in 2008 (2007:
69.7%) on a Russian GAAP basis, and to 92.7% in Q109, and Fitch
will be monitoring the development of this indicator.
Additionally, Fitch notes the reasonably significant proportion of
corporate bonds of low credit quality in the investment portfolio,
as well as the concentration of bank deposits in one bank, and the
increased potential for investment losses in the current market
environment. Positively, Fitch recognises the good capital
position of the company, which improved in Q109, Transsib Re's
strength in its chosen niche, and the experienced management team.
Transsib Re was established in 1992. Shareholding control rests
with the management, although the shareholding structure is widely
spread. Transsib Re has four offices in Russia and a branch
office in the Czech Republic and writes business in Russia, CIS
and other emerging European and Asian markets. At FYE08, its
gross assets stood at RUB1.1 billion.
VTB BANK: Posts RUB5.9 Bln Net Loss for First Four Months of 2009
-----------------------------------------------------------------
VTB Bank posted a net loss of RUB5.9 billion for the first four
months of 2009 as compared to the net profit of RUB 1.99 billion
posted over the first quarter of 2009. The decreased net profit
in April was primarily caused by closing forward exchange
contracts and by negative revaluation of its currency positions.
The bank said another factor affecting its performance in April
was allocation to loan impairment provisions, which by May 1
accounted for 3.2% of the Corporate Loan Portfolio.
As of May 1, 2009, VTB's assets were RUB2,636 billion as compared
to RUB2,721 billion posted on April 1, 2009. Against the year-
start, the assets have increased 3%.
The bank's corporate portfolio amounted to RUB1,588 billion, which
is an 8% increase for the first four months of the current year.
Corporate customers' accounts and deposits reached RUB864 billion,
having increased 20% since the year-start.
The unconsolidated financial statements have been prepared under
Russian Accounting Standards only for the Parent Bank, JSC VTB
Bank.
Bank VTB OAO (Bank VTB OJSC), formerly Bank vneshney torgovli or
Vneshtorgbank OAO, -- http://www.vtb.ru/-- is a Russia-based
bank, which is involved in the provision of banking and financial
products and services. It offers such services as the opening and
keeping bank accounts of physical and legal persons, offering
debit and credit cards and safety deposit boxes, cash and non-cash
money transfers, syndication arrangement for financial
institutions, derivative instruments, currency exchange,
securities and banknote trading, export and import payments,
lending services, international settlements, custody services,
card transactions, payroll and other services. It is a member of
the Association of Russian Banks (ARB), International Capital
Market Association and others. It operates through numerous
representative offices and branches, subsidiaries and affiliated
companies located in Russia, Europe, Asia and Africa. In December
2008, the Company acquired a 51% stake in Azerbaijani AF-Bank.
* * *
Bank VTB OAO currently carries a 'D' individual rating from Fitch
Ratings.
=========
S P A I N
=========
IM PASTOR 4: Moody's Cuts Rating on Class D Notes to 'B3'
---------------------------------------------------------
Moody's Investors Service has downgraded the ratings of:
-- the junior notes issued by IM Pastor 3 Fondo de Titulacion de
Activos (IM 3),
-- the mezzanine and junior notes issued by IM Pastor 4 Fondo de
Titulacion de Activos (IM 4)
The rating action was prompted by the worse-than-expected
performance of the collateral backing the notes and Moody's
methodology update for rating Spanish RMBS, released on 23 July
2008. The downgrades also reflect Moody's negative sector outlook
for Spanish RMBS and the weakening of the macro-economic
environment in Spain, including the expected increase in
unemployment rates projected for 2009 and 2010.
IM 3 and IM 4 closed in June 2005 and June 2006 respectively.
Both transactions are backed by a portfolio of first-ranking
mortgage loans secured on residential properties located in Spain,
for an overall balance at closing of EUR1 billion (IM 3) and
EUR920 million (IM 4). The securitized mortgage portfolio
benefits from a relatively low weighted average LTV (currently
58.4% and 58.6% respectively), with no loan exceeding 80% LTV at
closing. The two pools are fairly exposed to the Mediterranean
coast with concentration in Catalonia (currently 32% and 23%
respectively) and Valencia (8% and 13% respectively). A
significant share of the securitized mortgage loans has been
originated via brokers or other external channels, representing
40% (IM 3) and 26% (IM 4) of current pool balance at the end of
February 2009. Concentrations of loans in Spanish coastal regions
and loans originated via brokers are among the risk
characteristics that result in higher credit enhancement
requirement for a given rating under Moody's updated methodology
for rating Spanish RMBS.
The rapidly increasing levels of delinquent and defaulted loans
have ultimately resulted in drawings to the reserve fund in both
these transactions. According to the latest investors cash flow
statements released in late March, the reserve funds currently
represent 71% and 45% of the required balances in IM 4 and IM 3
respectively. Moody's anticipates that the weakening of the
economic conditions will continue to cause higher arrears and
defaults. Available funds in both transactions will ultimately
increase as recoveries from written-off loans are collected.
However, the pace at which loans are moving from arrears into
defaults suggests that further reserve fund drawings are likely to
occur -- with the amortization of the mezzanine and junior notes
likely to remain sequential as a conserquence of the breach of
pro-rata amortization triggers.
Credit trends in IM 3 and IM 4 currently underperform arrears and
defaults experienced by similarly seasoned low LTV Spanish RMBS
transactions. At the end of March 2009, the loans more than 90
days in arrears amount to 3.9% and 3.2% of current pool balance in
IM 3 and IM 4 respectively. The cumulative defaults (calculated
as the aggregate of defaults ever occurred in each reporting
period) represent approximately 1.5% of original balance for both
transactions.
A loan-by-loan analysis of all delinquent and defaulted loans
indicates that loans originated via external channels,
particularly in the region of Valencia and Catalonia, exhibit
significantly higher delinquencies and default rates than loans
originated at Banco Pastor's branches or via its internet website.
The default rate of broker originated loans (calculated at the
defaulted loans amount divided by original pool balance of loans
originated via brokers) is between 2 to 3 times higher that the
default rate of mortgage loans originated by Banco Pastor. This
analysis also highlighted that loans to non-Spanish nationals are
experiencing significantly higher defaults than loans granted to
Spanish borrowers. Loan to non-Spanish borrowers currently
represent about a third of total defaults in IM 3 and IM 4,
compared to the overall share of loans to non-Spanish borrowers
standing at 12% and 8% of the current pool balances respectively.
Moody's has revised its loss expectation for both transactions to
reflect the collateral performance to date as well as Moody's
negative outlook for the Spanish housing market, in the context of
a weakening macro-economic environment. Moody's has increased the
loss expectation for IM 3 and IM 4 to 1.4% and 1.6% of original
balance respectively. Moody's has also assessed loan-by-loan
information for the outstanding portfolios to determine the
increase in credit support consistent with target rating levels
and the volatility of the distribution of future losses. As a
result, Moody's has updated its MILAN Aaa credit enhancement
(MILAN Aaa CE) assumptions to 5.8% for IM 3 and 5.2% for IM 4.
The loss expectation and the Milan Aaa CE are the two key
parameters used by Moody's to calibrate its loss distribution
curve, which is one of the core inputs in the cash-flow model it
uses to rate RMBS transactions. The current available credit
enhancement for the Aaa classes (including subordination and
reserve fund) is equal to 8.8% in IM 3 and 6.4% in IM 4.
These transactions include artificial write-off of loans (1) more
than 12 months delinquent or (2) for which there are no
expectations of them becoming current. This typical Spanish RMBS
mechanism speeds up the off balance sheet treatment of a non-
performing loan compared to waiting for the "natural write-off";
thus, the amount of notes collateralized by non-performing loans
and, consequently, the negative carry, is minimised.
Both transactions include an interest rate swap to hedge interest
rate risk in the transaction, securing a weighted-average interest
rate on the notes plus 40bps excess spread and, in IM 4 only,
covering the servicing fee if Banco Pastor is to be replaced as
servicer. Banco Pastor (A2/P-1) acts as swap counterparty in both
transactions -- benefiting from the additional support of Banco
Popular (Aa2/P-1) acting as swap guarantor in IM 4.
On November 4, 2008, the Spanish Government announced a program to
assist unemployed, self-employed and pensioner borrowers through a
form of mortgage subsidy aid. It is unclear how this programme
will be implemented, and if it is implemented, how the
transactions will be affected, although both liquidity and credit
implications are possible, according to Moody's. However, any
implications for the ratings will ultimately depend on the actual
financial aid conditions which are approved.
Moody's ratings address the expected loss posed to investors by
the legal final maturity of the notes. Moody's ratings address
only the credit risks associated with the transaction. Other risks
have not been addressed, but may have a significant effect on
yield to investors.
Moody's initially analysed the transactions referred to in this
press release using the rating methodology for Spanish RMBS
transactions as described in the report "Moody's Approach to
Rating Spanish RMBS: the 'Milan' Model", March 2005, and it
monitors the performance of the transaction using rating
methodologies described in the reports "Moody's Updated
Methodology for Rating Spanish RMBS", July 2008, and "Revising
Default/Loss Assumptions Over the Life of an ABS/RMBS
Transaction", December 2008. These reports can be found at
www.moodys.com. No rating action was taken on the notes issued by
IM 3 and IM4 since closing. Moody's will continue to closely
monitor the performance of the transactions.
List of Detailed Rating Actions
IM Pastor 3 Fondo de Titulacion de Activos
-- Class C, Downgraded to Baa2 from A3; previously Assigned A3
on June 14, 2005
-- Class D, Downgraded to B3 from Baa3; previously Assigned Baa3
on June 14, 2005
IM Pastor 4 Fondo de Titulacion de Activos
-- Class B, Downgraded to A1 from Aa3; previously Assigned Aa3
on June 6, 2006
-- Class C, Downgraded to Ba2 from Baa1; previously Assigned
Baa1 on June 6, 2006
-- Class D, Downgraded to Caa2 from Ba1; previously Assigned Ba1
on June 6, 2006
IM PASTOR 4: Moody's Junks Rating on Class D Notes
--------------------------------------------------
Moody's Investors Service has downgraded the ratings of:
-- the junior notes issued by IM Pastor 3 Fondo de Titulacion de
Activos (IM 3),
-- the mezzanine and junior notes issued by IM Pastor 4 Fondo de
Titulacion de Activos (IM 4)
The rating action was prompted by the worse-than-expected
performance of the collateral backing the notes and Moody's
methodology update for rating Spanish RMBS, released on 23 July
2008. The downgrades also reflect Moody's negative sector outlook
for Spanish RMBS and the weakening of the macro-economic
environment in Spain, including the expected increase in
unemployment rates projected for 2009 and 2010.
IM 3 and IM 4 closed in June 2005 and June 2006 respectively.
Both transactions are backed by a portfolio of first-ranking
mortgage loans secured on residential properties located in Spain,
for an overall balance at closing of EUR1 billion (IM 3) and
EUR920 million (IM 4). The securitized mortgage portfolio
benefits from a relatively low weighted average LTV (currently
58.4% and 58.6% respectively), with no loan exceeding 80% LTV at
closing. The two pools are fairly exposed to the Mediterranean
coast with concentration in Catalonia (currently 32% and 23%
respectively) and Valencia (8% and 13% respectively). A
significant share of the securitized mortgage loans has been
originated via brokers or other external channels, representing
40% (IM 3) and 26% (IM 4) of current pool balance at the end of
February 2009. Concentrations of loans in Spanish coastal regions
and loans originated via brokers are among the risk
characteristics that result in higher credit enhancement
requirement for a given rating under Moody's updated methodology
for rating Spanish RMBS.
The rapidly increasing levels of delinquent and defaulted loans
have ultimately resulted in drawings to the reserve fund in both
these transactions. According to the latest investors cash flow
statements released in late March, the reserve funds currently
represent 71% and 45% of the required balances in IM 4 and IM 3
respectively. Moody's anticipates that the weakening of the
economic conditions will continue to cause higher arrears and
defaults. Available funds in both transactions will ultimately
increase as recoveries from written-off loans are collected.
However, the pace at which loans are moving from arrears into
defaults suggests that further reserve fund drawings are likely to
occur -- with the amortization of the mezzanine and junior notes
likely to remain sequential as a conserquence of the breach of
pro-rata amortization triggers.
Credit trends in IM 3 and IM 4 currently underperform arrears and
defaults experienced by similarly seasoned low LTV Spanish RMBS
transactions. At the end of March 2009, the loans more than 90
days in arrears amount to 3.9% and 3.2% of current pool balance in
IM 3 and IM 4 respectively. The cumulative defaults (calculated
as the aggregate of defaults ever occurred in each reporting
period) represent approximately 1.5% of original balance for both
transactions.
A loan-by-loan analysis of all delinquent and defaulted loans
indicates that loans originated via external channels,
particularly in the region of Valencia and Catalonia, exhibit
significantly higher delinquencies and default rates than loans
originated at Banco Pastor's branches or via its internet website.
The default rate of broker originated loans (calculated at the
defaulted loans amount divided by original pool balance of loans
originated via brokers) is between 2 to 3 times higher that the
default rate of mortgage loans originated by Banco Pastor. This
analysis also highlighted that loans to non-Spanish nationals are
experiencing significantly higher defaults than loans granted to
Spanish borrowers. Loan to non-Spanish borrowers currently
represent about a third of total defaults in IM 3 and IM 4,
compared to the overall share of loans to non-Spanish borrowers
standing at 12% and 8% of the current pool balances respectively.
Moody's has revised its loss expectation for both transactions to
reflect the collateral performance to date as well as Moody's
negative outlook for the Spanish housing market, in the context of
a weakening macro-economic environment. Moody's has increased the
loss expectation for IM 3 and IM 4 to 1.4% and 1.6% of original
balance respectively. Moody's has also assessed loan-by-loan
information for the outstanding portfolios to determine the
increase in credit support consistent with target rating levels
and the volatility of the distribution of future losses. As a
result, Moody's has updated its MILAN Aaa credit enhancement
(MILAN Aaa CE) assumptions to 5.8% for IM 3 and 5.2% for IM 4.
The loss expectation and the Milan Aaa CE are the two key
parameters used by Moody's to calibrate its loss distribution
curve, which is one of the core inputs in the cash-flow model it
uses to rate RMBS transactions. The current available credit
enhancement for the Aaa classes (including subordination and
reserve fund) is equal to 8.8% in IM 3 and 6.4% in IM 4.
These transactions include artificial write-off of loans (1) more
than 12 months delinquent or (2) for which there are no
expectations of them becoming current. This typical Spanish RMBS
mechanism speeds up the off balance sheet treatment of a non-
performing loan compared to waiting for the "natural write-off";
thus, the amount of notes collateralized by non-performing loans
and, consequently, the negative carry, is minimised.
Both transactions include an interest rate swap to hedge interest
rate risk in the transaction, securing a weighted-average interest
rate on the notes plus 40bps excess spread and, in IM 4 only,
covering the servicing fee if Banco Pastor is to be replaced as
servicer. Banco Pastor (A2/P-1) acts as swap counterparty in both
transactions -- benefiting from the additional support of Banco
Popular (Aa2/P-1) acting as swap guarantor in IM 4.
On November 4, 2008, the Spanish Government announced a program to
assist unemployed, self-employed and pensioner borrowers through a
form of mortgage subsidy aid. It is unclear how this programme
will be implemented, and if it is implemented, how the
transactions will be affected, although both liquidity and credit
implications are possible, according to Moody's. However, any
implications for the ratings will ultimately depend on the actual
financial aid conditions which are approved.
Moody's ratings address the expected loss posed to investors by
the legal final maturity of the notes. Moody's ratings address
only the credit risks associated with the transaction. Other risks
have not been addressed, but may have a significant effect on
yield to investors.
Moody's initially analysed the transactions referred to in this
press release using the rating methodology for Spanish RMBS
transactions as described in the report "Moody's Approach to
Rating Spanish RMBS: the 'Milan' Model", March 2005, and it
monitors the performance of the transaction using rating
methodologies described in the reports "Moody's Updated
Methodology for Rating Spanish RMBS", July 2008, and "Revising
Default/Loss Assumptions Over the Life of an ABS/RMBS
Transaction", December 2008. These reports can be found at
www.moodys.com. No rating action was taken on the notes issued by
IM 3 and IM4 since closing. Moody's will continue to closely
monitor the performance of the transactions.
List of Detailed Rating Actions
IM Pastor 3 Fondo de Titulacion de Activos
-- Class C, Downgraded to Baa2 from A3; previously Assigned A3
on June 14, 2005
-- Class D, Downgraded to B3 from Baa3; previously Assigned Baa3
on June 14, 2005
IM Pastor 4 Fondo de Titulacion de Activos
-- Class B, Downgraded to A1 from Aa3; previously Assigned Aa3
on June 6, 2006
-- Class C, Downgraded to Ba2 from Baa1; previously Assigned
Baa1 on June 6, 2006
-- Class D, Downgraded to Caa2 from Ba1; previously Assigned Ba1
on June 6, 2006
===========
S W E D E N
===========
FORD MOTOR: Geely Reviewing Volvo Unit's Books, Bloomberg New Says
------------------------------------------------------------------
Geely Holding Group Co., China's biggest privately owned carmaker,
and at least two more bidders are reviewing the books of Ford
Motor Co.'s Volvo unit, Bloomberg News reports citing three people
familiar with the talks. Geely sent a team to Volvo's factory in
Gothenburg, Sweden last month to scrutinize the automaker's
financial records, the people, who declined to be identified
because the talks are private, said in the report. Geely
submitted a formal bid in March, one of the people said as cited
by Bloomberg News.
The report recalls Volvo Chief Executive Officer Stephen Odell
told employees in an April 24 memo obtained by Bloomberg News his
managers would meet potential buyers in coming months.
Ford Chief Executive Officer Alan Mulally, as cited by Bloomberg
News, told reporters at a Michigan car factory on May 6 the sale
of Volvo "is the next step in the process."
Bloomberg News relates two of the people said Ford is seeking
about US$2 billion for Volvo, less than a third of what it paid
for the maker of station wagons a decade ago. In December, the
report recalls, Ford put Volvo up for sale after the Swedish
brand's U.S. sales slid 31 percent.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The Company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region.
In Europe, the Company maintains a presence in Sweden, and the
United Kingdom. The Company also distributes its brands in
various Latin-American regions, including Argentina and Brazil.
* * *
As reported by the Troubled Company Reporter on April 15, 2009,
Standard & Poor's Ratings Services raised its ratings on Ford
Motor Co. and related entities, including the corporate credit
rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit
Co. are unchanged, at 'CCC+', and the ratings on FCE Bank
PLC, Ford Credit's European bank, are also unchanged, at 'B-',
maintaining the one-notch rating differential between FCE and its
parent Ford Credit. S&P said that the outlook on all entities is
negative.
Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3. The outlook is
negative. The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring to
achieve the same UAW concessions that General Motors and Chrysler
are likely to achieve as a result of the recently-approved
government bailout loans. Such a balance sheet restructuring
would likely entail a loss for bond holders and would be viewed by
Moody's as a distressed exchange and consequently treated as a
default for analytic purposes.
FORD MOTOR: Three Firms Bid for Volvo Unit
------------------------------------------
Geely Holding Group Co. and at least three more bidders are
reviewing the books of Ford Motor Co.'s Volvo, Cathy Chan, Keith
Naughton, and Ambereen Choudhury at Bloomberg News report, citing
people familiar with the matter.
According to Bloomberg, the sources said that Geely sent a team to
Volvo's factory in Gothenburg, Sweden, in April to scrutinize the
company's financial records.
Bloomberg, citing people familiar with the matter, relates that
Ford is seeking US$2 billion for Volvo, less than a third of what
it paid for the unit a decade ago. Ford put Volvo up for sale in
December 2008 after the unit's U.S. sales dropped 31%, says
Bloomberg.
Ford Tries Controlling Absenteeism to Cut Costs
Jeff Bennett at Dow Jones Newswires relates that Ford may cut a
few more millions in costs from its annual operations by
controlling absenteeism.
Dow Jones states that Ford CEO Alan Mulally credited much of the
Focus's future profitability to the new round of concessions it
forged with the United Auto Workers. The report says that the
concessions are allowing Ford to close some of its attendance
loopholes by changing the rules on overtime and ending the
practice of paying cash for unused vacation.
Four years ago, Ford's absenteeism rate was 7.6%, Dow Jones says,
citing Ford manufacturing chief Joe Hinrichs. The report quoted
Mr. Hinrichs as saying, "We can save up to US$60 million with
every
one% improvement in absenteeism. In the past there were
opportunities for abuse by those that wanted to work the system.
That has changed."
According to Dow Jones, hourly employees are now paid overtime
after 40 hours of work instead of at the end of eight hour shifts,
and a worker can no longer cash in his unused vacation time for
pay at year-end.
Dow Jones states that UAW Vice President Bob King said that the
union had no problem supporting the changes. According to the
report, Mr. King said, "Someone else has to pick up the load when
a person isn't there. There is a definite negative impact on the
product when people aren't there."
"Absenteeism is a serious problem because of the costs associated
with keeping extra people to fill those slots and the impact on
efficiency. If you have a team leader and he is busy covering for
the absent employee then he spends all his time on the line rather
than working to improve the operations," Dow Jones quoted Ron
Harbour, who produces an annual report on auto manufacturing for
consultant Oliver Wyman, as saying.
Matthew Dolan and Stephen Power at The Wall Street Journal relates
that Ford Motor isn't planning to match the temporary shutdown of
auto manufacturing plants and widespread closure of car
dealerships outlined in recent days by General Motors Corp. and
Chrysler LLC. Citing Mr. Hinrich, WSJ states that GM won't mimic
the scaled-back production at its rivals, who have been hit by
cars and trucks piling up unsold on dealers' lots. "We have our
inventory under control," the report quoted Mr. Hinrichs as
saying.
The precarious state of auto parts suppliers remains Ford's
greatest concern after Chrysler filed for bankruptcy protection,
WSJ says, citing Ford executive chairperson Bill Ford. Mr. Ford,
according to WSJ, said that he was confident that the auto task
force fully understood the need to support the industry's shared
supplier base.
According to WSJ, Ford CEO Alan Mulally said that the Company
wouldn't accelerate or alter its plans to cut the number of its
dealerships in the U.S., as the Company was already making good
progress in reducing the number of its dealers, largely in
metropolitan areas where Ford has too many.
Mr. Ford, WSJ reports, has agreed with those who have cautioned
that a significant increase in government fuel-economy standards
may not be prudent while gas prices remain low.
WSJ notes that Mr. Mr. Ford has long been a vocal advocate inside
the Company of pursuing more environmentally friendly policies
including the electrification of vehicles. According to WSJ, Mr.
Ford said that he favors a gas tax to help stabilize gas prices,
which then could help Ford and other automakers who are investing
in small cars and electrified vehicles.
Ford Invests US$550MM to Build New Global Small Cars
Ford is investing US$550 million to transform its Michigan
Assembly Plant into a lean, green and flexible manufacturing
complex that will build Ford's next-generation Focus global small
car along with a new battery-electric version of the Focus for the
North American market.
The plant, formerly the production site for Ford Expedition and
Lincoln Navigators SUVs, is one of three North American light
truck plants Ford is retooling to build fuel-efficient global
small cars in the coming years. The new Focus will begin rolling
off the line next year and the battery-electric version of the
Focus -- Ford's first all-electric passenger car -- debuts in
2011.
As part of the retooling, Ford will consolidate its operations
from Wayne Assembly Plant. When production launches in 2010,
approximately 3,200 employees will be building the new Focus at
Michigan Assembly Plant. At the plant, Ford and United Auto
Workers are developing modern new operating practices to ensure
high quality and even greater efficiency.
"The transformation of Michigan Assembly Plant embodies the larger
transformation under way at Ford," said Mr. Alan Mulally. "This
is about investing in modern, efficient and flexible American
manufacturing. It is about fuel economy and the electrification
of vehicles. It is about leveraging our expertise and vehicle
platforms around the world and partnering with the UAW to deliver
best-in-class global small cars. It is about skilled and
motivated teams working together in new ways to create the future
of automobile manufacturing in the United States."
The reinvention of Michigan Assembly, once one of the world's most
profitable auto plants during the SUV boom of the late 1990s, is
rooted in the fundamental strategic shift by Ford to leverage its
global assets to bring six world-class small cars to the American
market by the end of 2012. To produce the vehicles, Ford is
converting three truck and SUV plants to car plants -- Michigan
Assembly, Cuautitlan Assembly in Mexico, which begins building the
new Fiesta subcompact early next year; and Louisville Assembly,
which will be converted to produce small vehicles from Ford's
global Focus platform beginning in 2011.
The new Focus is being developed in Europe -- where Ford is a
leader in small cars -- off a new global C-car platform. Over
time, the new platform will be the basis for more than 2 million
units annually around the world, including Focus and other
derivatives, allowing Ford to leverage economies of scale to
improve investment efficiency.
The zero-emission Focus battery-electric vehicle, which is being
developed in partnership with Magna International, features a
high-voltage electric motor powered by a high capacity Lithium Ion
battery pack and charged by plugging in to a 110-volt or 220-volt
outlet. The vehicle is one part of a larger strategy Ford
announced in January to develop electric vehicles for North
America quickly and affordably by leveraging its global platform
capability.
In addition to the Focus battery electric vehicle, Ford is
collaborating with Smith Electric to sell a Transit Connect
battery electric commercial vehicle for North America in 2010.
Ford's product plans also include a next-generation hybrid vehicle
in 2012 and a plug-in hybrid vehicle in 2012.
"We're changing from a company focused mainly on trucks and SUVs
to a company with a balanced product lineup that includes even
more high-quality, fuel-efficient small cars, hybrids and all-
electric vehicles," said Mark Fields, Ford's president of The
Americas. "As customers move to more fuel-efficient vehicles,
we'll be there with more of the products they really want."
Investing in American manufacturing
The US$550 million investment in Michigan Assembly includes more
than US$430 million in manufacturing investment at the site, as
well as US$120 million for launch and engineering costs. In
addition, Ford will be making significant investment in supplier
tooling to support the plant.
The state of Michigan, Wayne County and the city of Wayne
contributed more than US$160 million in tax credits and grants to
support Ford's expansion opportunities. Key elements include:
-- tax incentives based on job retention at the site;
-- a Brownfield tax incentive for economic rehabilitation of
the site;
-- tax incentives to support integration of advanced
batteries into new product development programs; and
-- local property tax incentives for new investments at the
site.
Michigan Assembly Plant will be designated as the state's first
automotive technology anchor site. This designation will support
Ford's efforts by providing additional tax incentives to locate
advanced technology suppliers in Michigan, related to future
automotive technology applications.
Michigan Assembly Transformation
At the heart of the plant's manufacturing transformation is a
flexible body shop operation, which uses reprogrammable tooling in
the body shop, standardized equipment in the paint shop and a
common-build sequence in final assembly, enabling production of
multiple models in the same plant.
Aiding in the implementation of flexible manufacturing is Ford's
industry-leading virtual manufacturing technology. In the virtual
world, engineers and plant operators evaluate tooling and product
interfaces before costly installations are made on the plant
floor. This method of collaboration improves launch quality and
enables speed of execution.
In a flexible body shop, at least 80% of the robotic equipment can
be programmed to weld various sized vehicles. This "non-product
specific" equipment gives the body shop its flexibility and
provides more efficient use of the facility.
The plant also will employ an efficient, synchronous material
flow, where the material will move in kits to each operator,
providing employees with the tools they need in the sequence they
will need them. The plant features an integrated stamping
facility, which allows the stamping and welding of all large
sheet-metal parts on-site, ensuring maximum quality and minimum
overhead.
Modern Work Rules
Along with the physical transformation at Michigan Assembly Plant,
the UAW and Ford are working on a framework of new and class-
leading operating practices that will enable the plant to operate
at a high level of productivity while producing best-in-class
quality products in a safe work environment.
As part of this framework, Ford and the UAW are committed to
establishing a strong, progressive culture at Michigan Assembly
Plant that is based on teamwork, joint problem solving and
continuous improvement.
"The UAW is a key partner in enabling us to build these world-
class vehicles competitively in the United States," said Joe
Hinrichs, group vice president, Global Manufacturing and Labor
Affairs. "This agreement will allow the work force to build on
their quality commitment while improving productivity at the
plant."
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The Company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region.
In Europe, the Company maintains a presence in Sweden, and the
United Kingdom. The Company also distributes its brands in
various Latin-American regions, including Argentina and Brazil.
* * *
As reported by the Troubled Company Reporter on April 15, 2009,
Standard & Poor's Ratings Services said it raised its ratings on
Ford Motor Co. and related entities, including the corporate
credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor
Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank
PLC, Ford Credit's European bank, are also unchanged, at 'B-',
maintaining the one-notch rating differential between FCE and its
parent Ford Credit. S&P said that the outlook on all entities is
negative.
Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3. The outlook is
negative. The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring to
achieve the same UAW concessions that General Motors and Chrysler
are likely to achieve as a result of the recently-approved
government bailout loans. Such a balance sheet restructuring
would likely entail a loss for bond holders and would be viewed by
Moody's as a distressed exchange and consequently treated as a
default for analytic purposes.
GENERAL MOTORS: Renault Eyeing Saturn; Geely Bids for Saab Unit
---------------------------------------------------------------
John D. Stoll and Norihiko Shirouzu at The Wall Street Journal
report that General Motors Corp.'s Saturn and Saab units have
attracted two potential buyers.
WSJ says that GM is considering several options for Saturn,
including the closure of the unit. Citing people familiar with
the matter, WSJ states that Renault SA, which controls Nissan
Motor Corp. and Samsung Motors, has joined the list of Saturn's
suitors and is in talks with GM about potentially acquiring the
brand.
People familiar with the matter said that Saturn would be
Renault's launching pad for growth in North America, WSJ relates.
According to WSJ, the sources said that under a deal being
negotiated, Renault could eventually use the Saturn network of
400-plus dealers to sell its own cars, including vehicles made by
Renault or Samsung and sold as Saturns. WSJ, citing one of the
sources, states that Renault could eventually build Saturn
vehicles in the U.S. if the brand supports solid sales volumes.
WSJ says that any move with Saturn will require the approval of
the U.S. Treasury Department.
WSJ states that any buyer of the Saturn division likely wouldn't
put direct cash in the deal, but would need to take on liabilities
and the costs of running the business. GM, says the report,
currently aims to stop building Saturn's five models by year-end.
Some of these dealers have been working to save Saturn by forming
investor groups or helping GM find a buyer for the brand. GM may
be open to building Saturn products on a contract basis under the
right circumstances.
Geely Wants Saab
According to WSJ, people familiar with the matter said that Geely
Automobile Holdings Ltd. has submitted a bid to acquire GM's Saab
unit.
Citing people familiar with the matter, WSJ states that a team of
Geely executives traveled to Sweden during the past few weeks to
tour Saab's production and research-and-development facilities,
and to meet with members of the Swedish auto maker's management
team, before submitting a bid for Saab.
WSJ relates that Geely, which is one of "three to four" serious
bidders for Saab, submitted a bid earlier for Ford Motor Co.'s
Volvo unit in Sweden. WSJ notes that the Saab bid could be
designed to pressure Ford to respond to Geely's bid for Volvo, or
to raise Geely's chances of acquiring a foreign car maker in case
the Volvo effort fails.
If an automaker or an investor is bidding for Saab to shift its
production out of Sweden, that might not bode well with the
Swedish government, which is moving to provide loan guarantees to
bail Saab out of its financial trouble, WSJ says citing Saab
spokesperson Eric Geers.
Analyst Doubt U.S. Govt Could Recover Money Lent to GM
Josh Mitchell and Eric Morath at Dow Jones Newswires report that
financial analysts doubt on GM's ability to repay the U.S.
government loans, given the Company's debt load and sales outlook.
According to Dow Jones, GM has admitted that it can't repay the
U.S. loans in the original time frame and is proposing that the
U.S. Treasury Department accept majority ownership -- a 51% stake
-- of the Company in exchange for wiping out about US$10 billion
in debt. Talks on this proposal are ongoing, says Dow Jones.
Citing analysts, Dow Jones relates that the government still may
lose at least some of the US$15.4 billion it has lent GM since
January 2009. Dow Jones states that the analysts said that it
would likely take years of profits and a significant appreciation
of GM's value for the government to get back all of its money, a
time frame which, according to Dow Jones, would appear to conflict
with the Obama administration's insistence that any government
takeover of the Company be short-lived.
Dow Jones quoted Moody's Economy.com director Joe Brusuelas as
saying, "Should a GM bankruptcy not proceed as the government
wishes, or demand for GM automobiles doesn't rebound, there is an
outsized risk that the government could sustain substantial
losses."
With a stake in GM, the U.S. government "will be left to wait, and
hope that GM can pull out of this nosedive and be a successful
company when this is done," Dow Jones states, citing IHS Global
Insight automotive analyst Aaron Bragman.
About General Motors Corp.
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.
For the 2008 calendar year, GM reported an adjusted net loss,
excluding special items, of US$16.8 billion. This compares to an
adjusted net loss of US$279 million. Including special items, the
company reported a loss of US$30.9 billion, compared to a reported
loss of US$43.3 billion in 2007, which included a non-cash special
charge of US$38.3 billion in the third quarter related to the
valuation allowance against deferred tax assets.
As of December 31, 2008, GM reported US$91,047,000,000 in total
assets, US$176,387,000,000 in total liabilities, and
US$86,154,000,000 in stockholders' deficit.
GM 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.
Going Concern Doubt
Deloitte & Touche LLP, has said there is substantial doubt about
GM's ability to continue as a going concern after reviewing GM's
2008 financial report. Deloitte cited the Company's recurring
losses from operations, stockholders' deficit and failure to
generate sufficient cash flow to meet the Company's obligations
and sustain the its operations. It said GM's future is dependent
on the Company's ability to execute the Company's Viability Plan
successfully or otherwise address these matters. If the Company
fails to do so for any reason, the Company would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code.
Standard & Poor's Ratings Services on April 10 lowered its issue-
level rating on GM's US$4.5 billion senior secured revolving
credit facility to 'CCC-' (one notch above the 'CC' corporate
credit rating on the company) from 'CCC'. It revised the recovery
rating on this facility to '2' from '1', indicating its view that
lenders can expect substantial (70% to 90%) recovery in the event
of a payment default. The corporate credit rating remains
unchanged, at 'CC', reflecting its view of the likelihood that GM
will default -- through either a bankruptcy or a distressed debt
exchange.
Moody's Investors Service said February 18 that the risk of a
bankruptcy filing by GM and Chrysler remains high. The last
rating action on GM and Chrysler was a downgrade of their
Corporate Family Ratings to Ca on December 3, 2008.
SAAB AB: Not In Talks With Fiat Over Takeover, CEO Says
-------------------------------------------------------
Monsters and Critics reports Saab chief executive Jan Ake Jonsson
said Tuesday the Swedish-based carmaker is not in talks with
Italy's Fiat SpA over a possible takeover.
The report relates Mr. Jonsson told Sodermanlands Nyheter
newspaper there are many serious parties interested in taking over
Saab, which filed for bankruptcy protection in February while it
attempts to reorganize its business.
On Feb. 23, 2009, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported Saab Automobile filed for protection
from creditors after parent General Motors Corp. said it will cut
ties with the Swedish carmaker following two decades of losses.
Mr. Jonsson said in a statement that the Trollhaettan, Sweden-
based Company filed for reorganization with a Swedish district
court to separate itself from GM and bring resources back to
Sweden.
The Associated Press reported February 13 that Saab AB turned to a
fourth-quarter loss, mainly hurt by charges taken for project
delays, and warned it may have to cut more jobs going forward.
Saab reported a loss of SEK724 million (US$86 million), compared
with a previous profit of around SEK1 billion in the same
quarter last year. The shortfall, according to the report, was
mainly attributed to provisions and write-downs of just over
SEK1.5 billion to account for delays in major projects.
About SAAB AB
Saab AB is a Sweden-based technology company active within the
defense, aviation and space industries. It operates through three
principal segments. Defense and Security Solutions develops and
manufactures command, control and communication systems. Systems
and Products produces and sells systems, products and components
for defense, aviation, space and civil security internationally.
Aeronautics comprises both military and civilian aeronautics
operations, including the Gripen program, which uses technology to
perform air-to-air and air-to-surface operational missions. The
Company consists of such business units as Saab Aerotech, Saab
Communication, Saab Grintek, Saab Systems, Combitech, Saab
Surveillance Systems, Saab Avitronics, Saab Barracuda, Saab Bofors
Dynamics, Saab Space, Saab Training Systems, Saab Microwave
Systems, Saab Underwater Systems, Saab Aerosystems, Saab
Aerostructures, Saab Aircraft Leasing and Gripen International.
Saab AB is headquartered in Stockholm, Sweden.
SAS AB: S&P Affirms 'B' Long-Term Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B' long-
term corporate credit rating on Scandinavian airline group SAS AB.
At the same time, the rating was removed from CreditWatch, where
it was placed with positive implications on Feb. 3, 2009,
following SAS's announcement of a proposed rights issue of about
Swedish krona 6 billion. The outlook is stable.
"The affirmation reflects the strengthening of SAS's capital
structure provided by the completion of the rights issue in April
2009, which increases financial flexibility and improves tight
liquidity," said Standard & Poor's credit analyst Leigh Bailey.
"We believe that the additional capital, and extension of major
debt maturities by at least two years, will stabilize SAS's
stretched credit profile and provide a firmer financial base for
the group's efforts to pursue strategic initiatives.
"In our view, the group's "Core SAS" strategic plan should support
underlying trading performance in a tough operating environment.
However, downside risk remains since the market is extremely
unpredictable and the timing of any recovery is uncertain. At
March 31, 2009, credit protection measures were weak for the
rating, with funds from operations to adjusted debt of just 4%.
The 'B' rating factors in the assumption that this ratio will
improve during 2009 to about 10%."
The capital increase from the rights issue forms an important
pillar of SAS's plan to implement its Core SAS strategy and
thereby secure long-term competitiveness and financial health.
The group's aim is to create a streamlined organization based
around its Nordic home, focused more on higher-yielding business
travelers. According to SAS, after implementation of all
announced savings programs, the estimated gap in annual costs
between the group and its most effective competitors will fall to
around SEK1 billion in 2011 from the current level of
SEK4 billion. SAS believes that it will continue to have a higher
cost base compared with its local low-cost competitors. This is
principally due to collective bargaining agreements with the
unions as along with certain inefficiencies in other parts of the
group's businesses.
Standard & Poor's believes that SAS's liquidity needs should be
adequately covered over the next 12 months. S&P anticipates that
the group will sufficiently improve its underlying operating
performance to bring adjusted funds to operations to about 10%,
from its current depressed levels, which is in line with a 'B'
credit profile. Even so, execution of the group's cost-savings
program in line with its strategic plan, careful management of
labor relations, and low-cost competition will in S&P's view
remain long-term challenges.
A marked slowdown in demand, or failure to achieve profitability
improvements in line with expectations, could lead to a negative
outlook or lowering of the rating if liquidity were to weaken
markedly or the recovery of credit metrics were to be threatened.
S&P considers an outlook revision to positive unlikely in the
current trading environment.
=============
U K R A I N E
=============
ALFA BANK: Moody's Retains 'E+' Bank Financial Strength Rating
--------------------------------------------------------------
Moody's downgrades Alfa Bank Ukraine's ratings to B3/Baa3.ua
All long-term ratings remain on review for possible further
downgrade.
Moody's Investors Service has downgraded Alfa Bank Ukraine's local
currency deposit rating to B3 from Ba3, foreign currency deposit
rating to B3 from B2, local and foreign currency senior unsecured
debt ratings to B3 from Ba3, and its National Scale Rating to
Baa3.ua from Aa1.ua. The bank financial strength rating of Alfa
Bank Ukraine remains unchanged at E+, but now it maps to a
Baseline Credit Assessment of B3 vs. the previous BCA of B2. All
of the bank's long-term ratings remain on review for possible
further downgrade.
The rating action is in response to the announcement on May 5,
2009 that Alfa Bank Ukraine defaulted on its US$100 million
Eurobonds due on May 4, 2009. The five-day grace period to make
this payment expires on May 11, 2009.
Moody's understand that the default resulted from the bank's
inability to acquire sufficient amount of US dollar funds in time
on the local interbank market due to foreign currency restrictions
and low market liquidity. Alfa Bank Ukraine expects that it would
be able to purchase sufficient dollars to repay the Eurobonds
before the grace period expires.
While acknowledging the difficulties caused by the foreign
currency restrictions, Moody's cautions on Alfa Bank Ukraine's
heightened liquidity risks caused by inefficient liquidity
management and substantial upcoming market debt repayments (over
US$800 million maturing or puttable in 2009). These increased
risks resulted in the lowering of the bank's BCA to B3 from B2.
The rating agency also notes that the deposit and debt ratings of
Alfa Bank Ukraine, owned by the main shareholders of Russia's Alfa
Bank, used to enjoy a two-notch uplift from Alfa Bank Russia,
through which shareholders' support was expected to be provided.
As timely support from shareholders, directly or through Alfa Bank
Russia, has not been provided to Alfa Bank Ukraine to avoid the
default, Moody's considers parental support in the latter's
ratings now inappropriate. Consequently, no further support from
Alfa Bank Russia is factored in Alfa Bank Ukraine's ratings.
Moody's will monitor the repayment of the Eurobonds by Alfa Bank
Ukraine to conclude the review process of the ratings. If the
bank repays these bonds within the grace period, the debt and
deposit ratings are likely to be confirmed. Conversely, a failure
to make the payment within the grace period may result in a
further rating downgrade.
The previous rating action on Alfa Bank Ukraine was on February
25, 2009, when the bank's foreign currency deposit and debt
ratings were placed on review for possible downgrade.
Headquartered in Kiev, Alfa Bank Ukraine reported total assets of
US$3.8 billion and total equity of US$447 million according to the
IFRS financial statements at year-end 2008.
AT-TRADING GROUP: Creditors Must File Claims by May 15
------------------------------------------------------
Creditors of LLC At-trading Group (code EDRPOU 35370208) have
until May 15, 2009, to submit proofs of claim to:
LLC Fjorg Alliance
Insolvency Manager
Office 197
Yanvarskogo Vosstaniya St. 3-b
01010 Kiev
Ukraine
The Economic Court of Kiev commenced bankruptcy proceedings
against the company on May 2, 2008. The case is docketed under
Case No. 24/75-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 At-trading Group
Kikvidze Str. 18
01103 Kiev
Ukraine
MIOK LLC: Creditors Must File Claims by May 15
----------------------------------------------
Creditors of LLC Miok (code EDRPOU 32500278) have until May 15,
2009, to submit proofs of claim to:
E. Vasin
Insolvency Manager
Office 11
Vavilov Avenue 5
36004 Poltava
Ukraine
The Economic Court of Poltava commenced bankruptcy proceedings
against the company on Sept. 2, 2008. The case is docketed under
Case No. 4/20.
The Court is located at:
The Economic Court of Poltava
Zigin St. 1
36000 Poltava
Ukraine
The Debtor can be reached at:
LLC Miok
Reznetsky Lane 13
Mirgorod
Poltava
Ukraine
MIRGOROD INDUSTRIAL: Court Starts Bankruptcy Supervision Procedure
------------------------------------------------------------------
The Economic Court of Poltava commenced bankruptcy supervision
procedure on LLC Mirgorod Industrial Set (code EDRPOU 33172084).
The Insolvency Manager is:
A. Tereschenko
Office 1
Frunze St. 113-b
36000 Poltava
Ukraine
The Court is located at:
The Economic Court of Poltava
Zigin St. 1
36000 Poltava
Ukraine
The Debtor can be reached at:
LLC Mirgorod Industrial Set
Shyshatsky Lane 10
Mirgorod
37600 Poltava
Ukraine
MOLOCHANSK MILK: Court Starts Bankruptcy Supervision Procedure
-------------------------------------------------------------
The Economic Court of Zaporozhye commenced bankruptcy supervision
procedure on OJSC Molochansk Milk-Tinned Enterprise (code EDRPOU
00418053).
The Insolvency Manager is:
A. Tsibulevsky
40 years of Soviet Ukraine St. 82-A
69035 Zaporozhye
Ukraine
The Court is located at:
The Economic Court of Zaporozhye region
Shaumian St. 4
69600 Zaporozhye
Ukraine
The Debtor can be reached at:
OJSC Molochansk Milk-Tinned Enterprise
Lugovaya St. 83
Molochansk
71716 Zaporozhye
Ukraine
VIKTORIYA JSC: Creditors Must File Claims by May 15
---------------------------------------------------
Creditors of Open Agricultural Production Seeds Joint Stock
Company Agricultural Firm Viktoriya (code EDRPOU 32500278) have
until May 15, 2009, to submit proofs of claim to:
E. Vasin
Insolvency Manager
Office 11
Vavilov Avenue 5
36004 Poltava
Ukraine
The Economic Court of Poltava commenced bankruptcy proceedings
against the company on March 17, 2008. The case is docketed under
Case No. 23/48.
The Court is located at:
The Economic Court of Poltava
Zigin St. 1
36000 Poltava
Ukraine
The Debtor can be reached at:
Viktoriya JSC
Zhuki
Globinsky
39025 Poltava
Ukraine
===========================
U N I T E D K I N G D O M
===========================
BARCLAYS PLC: Not Contemplating Another Capital Raising
-------------------------------------------------------
Ragnhild Kjetland at Dow Jones Newswires reports that Barclays plc
Chief Financial Officer Chris Lucas said Thursday that the bank
still has no plans to raise more capital.
"We think our capital base is appropriate and the results of the
first quarter confirm that," Mr. Lucas, as cited by Dow Jones,
said, referring to retained earnings as the best source of
boosting the capital ratio.
Dow Jones states Barclays earlier said its net profit in the first
three months rose 12% to GBP826 million from GBP736 million
a year earlier. According to Dow Jones, the results were hurt by
GBP2.15 billion in write-downs on credit market exposures, up from
GBP1.01 billion a year ago.
In a May 5 report Ben Harrington at Telegraph.co.uk disclosed
Panmure Gordon analyst Sandy Chen wrote "Given that Barclays'
share price has more than quintupled since mid-March, and market
sentiment for banks has improved greatly, we think that management
must be contemplating another capital raising sooner rather than
later." Telegraph.co.uk recalls a string of other stockbrokers
last week upgraded Barclays shares with a target price of 300p.
Telegraph.co.uk relates in a bearish note, Mr. Chen argued that
the bank's earnings and capital could still be hit by a rise in
bad debts on its more esoteric loans, such as collateralized loan
obligations.
Barclays, Telegraph.co.uk recounts, has already secured a capital
injection from selling iShares, the exchange-traded funds
business, to private equity firm CVC Capital Partners.
As reported in Troubled Company Reporter-Europe on Jan. 16, 2009,
BBC News recalled in November, Barclays shareholders voted
overwhelmingly in favor of a plan to raise GBP7 billion, mainly
from investors in the Middle East, instead of going to the UK
government for help. BBC said the bank's shareholders decided
against taking money from the UK banking bail-out package because
of the stipulations attached, which would have included
restrictions on dividends, having government representatives on
the board and a requirement to put its UK interests ahead of those
of the bank overseas.
About Barclays PLC
Barclays PLC -- -- http://www.barclays.com/-- offers commercial
and investment banking, insurance, financial, asset management and
related services.
The Company's subsidiary, Barclays Bank plc, operates over 2,000
branches in the United Kingdom and around 900 branches overseas.
DSG INTERNATIONAL: Moody's Confirms 'Ba3' Corporate Family Rating
-----------------------------------------------------------------
Moody's Investors Service has confirmed the Ba3 Corporate Family
Rating and Probability of Default Rating of DSG International plc.
Concurrently, Moody's has downgraded the long term senior
unsecured rating of the bond to B1 (LGD5, 81%) from Ba3 (LGD4,
51%) because bank lenders will benefit from guarantees from
various subsidiaries representing approximately 80% of total gross
assets where the guarantee provided to bondholders remains
unchanged, representing around 40% of total gross assets. This in
Moody's view supports a notching down of the bond rating one notch
from the CFR. The outlook on the ratings is negative. This
action concludes the review for possible downgrade initiated by
Moody's on January 19, 2009.
"The rating action reflects Moody's opinion that DSGi will benefit
from more financial flexibility going forward," explains Yasmina
Serghini-Douvin, an Assistant Vice President-Analyst in Moody's
Corporate Finance Group. On April 30, 2009, DSGi announced that
it will undertake a fully underwritten Placing and Rights Issue to
raise net proceeds of about GBP294 million, together with a
renegotiation of the terms of the company's revolving credit
facility and letter of credit facilities agreements.
"Moody's understands that the successful execution of the Placing
and Rights Issue, conditional upon the vote of the shareholders on
19 May 2009, will provide DSGi with new financing for its ongoing
Transformation and Renewal Plan, reduce its reliance on its
revolving credit facility and help secure necessary headroom under
the financial covenants until the maturity of the agreements,"
said Ms. Serghini-Douvin. This will occur at a time when the
company's performance has been under severe pressure from a major
contraction in consumer demand for electrical and electronic
products leading to a steep deterioration in company's credit
metrics, which remain weak for the rating category. The company
will nevertheless be subject to new representations and
restrictions, particularly on returns to shareholders and capital
expenditure.
Moody's views positively management's steps to improve performance
through a revamping of its stores in the UK and the Nordic region,
the turnaround of its loss-making Italian operations and the
rationalization of the cost structure throughout the business.
While Moody's recognizes that the average profit uplift delivered
by the reformatted stores is encouraging, the next few quarters
will be challenging and could hurt the results of the
restructuring through prolonged negative like for like sales
growth, which was down 11% in the 22 weeks to 18 April 2009, or
insufficient returns from the investments.
As free cash flow is expected to be limited in FY2009/10, Moody's
highlights that DSGi's liquidity profile is primarily supported by
its continued access to its GBP400 million revolving credit
facility and limited debt repayments, with the outstanding
GBP300 million bond maturing in November 2012.
The negative outlook reflects DSGi's high financial leverage
(estimated slightly above 6x at FYE2008/09), adjusted for a
significant amount of capitalized operating lease commitments,
weakened performance and execution risks attached to the
Transformation and Renewal Plan. A negative rating action could
result from a decline in margins or credit metrics such that Debt
to EBITDA fails to move towards 5.5x in FYE2009/10. The outlook
could be stabilized when there is evidence of an increase in
profits and leverage is reduced below 5.5x on a sustainable basis.
Moody's previous rating action on DSGi was on January 19, 2009,
when the rating agency placed DSGi's ratings under review for
possible downgrade.
Headquartered in Hemel Hempstead, England, DSG International plc
is one of Europe's leading specialist consumer electrical
retailers. It posted revenues of GBP8.5 billion for the fiscal
year ending in April 2008.
EUROPEAN MEDITATION: Wound-Up by High Court
-------------------------------------------
A Rochdale-based company which contacted victims of fraud and
falsely claimed to be able to obtain compensation for their losses
has been wound-up in the High Court following an investigation by
the Companies Investigation Branch of The Insolvency Service.
European Mediation Limited cold-called victims of previous frauds
and stated that it was able to recover their losses from the
European Compensation Fund. Although the company purported to act
on a no win no fee basis it required the client to make an up
front payment of 10% of the compensation to be sought. The
investigation found no evidence to suggest that the fund described
by the company exists.
According to its website the company operated from its registered
office address at 6 Pearson Close, Milnrow, Rochdale. This address
was found to be a terraced house which was listed as the
residential address of one of the company's directors and it is
believed that the telesales staff were based at a call centre in
Malaga, Spain. The directors of the company could not be located
at the addresses they had provided to the Registrar of Companies.
Information provided by the company's bankers show that it had
received an income of some GBP670,000. None of the clients who
had paid monies to the company are known to have received any
compensation or valuable service and the funds had been withdrawn
from the account for the benefit of the company's directors and
associated businesses.
In winding up European Mediation Limited the Court held that the
company had operated in a manner contrary to the public interest
by falsely claiming to be able to obtain compensation for client
losses; by providing false and misleading information on its
website about its trading address and the number of years it had
been operating; by providing false information to the Registrar of
Companies relating to the residential addresses of the directors;
and that the company officers had failed to cooperate with the
investigation.
The registered office of European Mediation Limited is at:
European Mediation Limited
6 Pearson Close
Rochdale
Lancashire
OL16 3UL
The company was incorporated in August 2008.
All public enquiries concerning the affairs of the companies
should be made to:
The Official Receiver
Public Interest Unit
2nd Floor
3 Piccadilly Place
London Road
Manchester
M1 3BN
Tel: 0161 234 8531
Email: piu.north@insolvency.gsi.gov.uk
GEMINI PLC: Fitch Junks Ratings on Three Classes of Notes
---------------------------------------------------------
Fitch Ratings has downgraded Gemini (Eclipse 2006-3) plc's five
classes of notes, due July 2016:
-- GBP569.15 million class A due July 2016 (XS0273575107):
downgraded to 'BBB-'(BBB minus) from 'AAA'; Outlook revised
to Negative from Stable
-- GBP27.76 million class B due July 2016 (XS0273576289):
downgraded to 'BB' from 'AAA'; remains on Outlook Negative
-- GBP101.8 million class C due July 2016 (XS0273576446):
downgraded to 'CCC' from 'A'; remains on Outlook Negative;
assigned a Recovery Rating of 'RR5'
-- GBP81.4 million class D due July 2016 (XS0273576792)
downgraded to 'CC' from 'BBB'; remains on Outlook Negative;
assigned a Rating Recovery of 'RR6'
-- GBP70.21 million class E due July 2016 (XS0273576958):
downgraded to 'CC' from 'BB'; remains on Outlook Negative;
assigned a Rating Recovery of 'RR6'
The notes issued by Gemini (Eclipse 2006-3) plc are secured
against a GBP850.4 million interest-only senior loan originated in
November 2006 by Barclays Bank PLC ('AA'/'F1+'/Stable). In
combination with a GBP105.8 million junior loan, the securitized
loan is secured against a portfolio of 35 generally secondary
quality properties. The loans breached their LTV covenants in
July 2008 as a result of a downward revaluation of the properties,
and were subsequently transferred into special servicing, where
they have remained since. The last revaluation of the collateral,
in September 2008, reported a value of GBP801.4 million, and a
senior LTV of 106.1%. The momentum of generally falling values
has continued since then and Fitch presently estimates the current
market value at GBP627 million, and a Fitch senior LTV of 135%.
The properties are shopping centers and offices located around the
UK, with some exposure to logistics and retail warehouses.
Although income is fairly stable and granular, in a handful of
retail properties vacancy rates are rising or remain excessively
high, which may prove difficult to reverse. Overall vacancy rates
have fallen, although not enough to prevent the interest coverage
ratio from declining as rental top up payments gradually roll off
in accordance with a set quarterly schedule agreed at closing.
There are two borrower-level interest rate swaps which are both
due to mature in July 2026, 10 years after loan maturity and seven
years after bond legal maturity. Recent falls in swap rates have
precipitated a negative mark-to-market amount of GBP113 million in
total (as of April 14), and since this amount ranks prior to the
notes, it represents an increase in the leverage of all the notes.
Including this liability, Fitch's calculation for the senior MTM
LTV rises above 150%. Although the MTM amount may decline as the
swaps' duration falls over time, the long-datedness of the swaps
means that unless applicable rates rise, a material MTM amount
would be payable out of loan recovery proceeds before principal is
repaid to noteholders, irrespective of the timing of a potential
liquidation.
At present, there is a combination of low swap rates and high
property yields. Although in such an environment the long
duration of the swaps reduces the flexibility available to the
servicer, the prospect of the "yield gap" narrowing over time,
either as swap rates rise or property yields fall, may encourage
the servicer to hold off from liquidation and allow the duration
of the swap to decline. The granularity and quality of income,
coupled with a relatively benign lease break profile, ought to
facilitate this and are therefore moderating forces in Fitch's
rating action.
Servicing is currently being managed by CB Richard Ellis Loan
Servicing Limited (CBRELS). This operation, which has a Primary
Servicer Rating of 'CPS3+UK', replaced Barclays Capital Mortgage
Servicing ('CPS2UK') in April 2009. Although Fitch has not
assigned a UK Special Servicer Rating to CBRELS, the agency
conducted a review of its special servicing capabilities, which it
deemed sufficient for this transaction. The servicing transfer
does not have any immediate impact on ratings.
INEOS GROUP: Seeks Extension of Covenant Waivers
------------------------------------------------
Tom Freke at Reuters reports that Ineos Group has requested for an
extension of covenant waivers to allow a group of lenders to
review a new five-year business plan.
The report relates Ineos, which is being advised by Lazard & Co.,
said a "sounding group" of lenders has appointed Deloitte as
accounting adviser and Houlihan Lokey as financial adviser to
assess the plan.
According to the report, lenders have until May 22 to respond to
the request. The waiver would run until July 17, the report says.
The report recalls Ineos, which owes a total of EUR7.5 billion
(US$9.99 billion), secured a six-month covenant waiver in December
as it ran close to breaching restrictions on its debt, which gave
it time to present a new business plan to lenders. Citing a
source close to the situation, the report states part of the plan,
drawn up by accounting firm KPMG, addresses the future capital
structure for the company. The sources, as cited in the report,
said discussion between the Ineos and lenders would likely focus
on the appropriate debt level of the company in the future.
Headquartered in Southampton, United Kingdom, INEOS Group --
http://www.ineos.com-- is a diversified chemical company
consisting of several businesses. Product lines include ethylene
oxide-based specialty and intermediate chemicals, fluorochemicals
used as refrigerants and propellants, and phenol and acetate
products. INEOS Chlor makes chlor-alkali chemicals, and INEOS
Films and Compounds manufactures PVC and PET films. INEOS Group
was formed in 1998 after a management buyout led by CEO Jim
Ratcliffe, who controls the group. Ratcliffe has placed INEOS
among the world's top chemical companies (with ExxonMobil, Dow,
and BASF) through his many and varied acquisitions.
* * *
As reported in the Troubled Company Reporter-Europe on Jan. 28,
2009, Moody's Investors Service downgraded the Corporate Family
Rating of Ineos Group Holdings plc to Caa2 (from B3). The ratings
assigned to the instruments raised by its subsidiaries were also
downgraded. The outlook on the ratings remains negative.
PINTON ESTATES: Forced Into Receivership After Bond Coupon Default
------------------------------------------------------------------
Chris Bourke at Bloomberg News reports that Pinton Estates Plc, a
U.K. property company controlled by Leo Noe, was forced into
receivership by its creditors after failing to collect enough rent
to pay bond payments.
Pinton, which has GBP70 million debenture, couldn't pay the whole
of its half-year coupon in March, the report says citing a May 1
statement. The report relates Nigel Letheren, a spokesman for the
bond's trustee Prudential Assurance Co. Ltd., said on Tuesday
Deloitte LLP was appointed as the company's joint receiver and
manager by at least 20 percent of Pinton's bondholders, the
required minimum.
The report notes according to Regulatory News Service statements,
Estates & General Plc and Ashpol Plc, two other companies
controlled by Mr. Noe's family investment company, also have
breached bond terms. The report discloses Estates & General,
which Noe bought in 2004 for GBP71 million, is trying to refinance
a GBP3 million pound debenture that expired on December 31, while
Ashpol, which breached the terms of its GBP75 billion debenture
after the properties it was secured against fell in value, is
being asked by the debenture's trustee, Law Debenture Trustees
Ltd, to provide more equity to meet the terms of its agreement.
Citing accounts filed at Companies House, the report states Pinton
reported a GBP6.1 million loss and Ashpol an GBP11.3 million loss
for the year ended March 31, 2008.
PREFERRED RESIDENTIAL: S&P Cuts Rating on Class FTc Notes to 'B-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed and removed from
CreditWatch positive its credit ratings on the class B1 notes and
lowered and removed from CreditWatch negative its credit ratings
on the class E notes issued by Preferred Residential Securities
05-1 PLC. PRS 05-1's class D1c notes remain on CreditWatch
negative. At the same time, S&P lowered and removed from
CreditWatch negative S&P's credit ratings on the class D1c, E1c,
ETc, and FTc notes issued by Preferred Residential Securities 05-2
PLC. S&P affirmed all other classes of notes (see list below).
These rating actions follow credit and cash flow analyses based on
the most recent loan-level information S&P has received and a
review of the March 2009 investor reports. These reports showed
arrears and losses that are higher than S&P's nonconforming index
for transactions with similar seasoning. S&P's index includes all
U.K. nonconforming RMBS transactions that S&P rate, and compares
arrears and losses based on the transaction seasoning. Both deals
have reportedly drawn on their reserve funds.
PRS 05-1 and PRS 05-2 were issued in 2005 and the senior classes
now have substantial credit enhancement. However, the
deterioration in pool performance and the high losses have offset
this improvement in credit enhancement, and have increased the
risk to the junior classes.
Of the mortgages in the PRS 05-1 portfolio, 47.06% are currently
in arrears by more than 30 days, of which 68.58% (or 32.27% of the
total pool) are more than 90 days in arrears. Cumulative losses
since closing (April 2005) are 1.65% of the original collateral
balance. The weighted-average loss severity (based on the total
balance at sale) was 31.01% in the last interest period and 14.14%
since inception. If losses continue to increase, S&P is of the
view that there may be further reserve fund draws and the excess
spread may not be sufficient to repay the ensuing principal
deficiency ledger balances leaving the deal undercollateralized.
In spite of the high arrears, the sole reserve fund draw in March
was less than 1% of the available reserve fund as the excess
spread has, so far, been sufficient to pay down most of the PDLs.
The class D1c notes remain on CreditWatch negative pending S&P's
observations of the upward trend of arrears and loss severities.
S&P will look to resolve the CreditWatch placement on PRS 05-1's
class D1c notes when S&P receives the June investor report and
perform further cash flow analysis.
PRS 05-2 also shows high arrears. Of the portfolio, 49.31% is
reported delinquent of which 66.82% (32.95% of the total pool) is
more than 90 days in arrears. Cumulative losses since closing
(November 2005) are 1.63% of the original collateral balance. The
weighted-average loss severity (based on the total balance at
sale) was 25.53% in the latest interest period and 14.34% since
inception. This deal has drawn on its reserve fund in the past
three quarters and the reserve fund balance is GBP1,215,815 (81%
of the target level). As with PRS 05-1, S&P notes that if the
reserve is fully drawn, the deal becomes more reliant on spread to
meet interest payments and to repay any PDL balances.
Ratings List
Ratings Lowered and Removed From Creditwatch Negative
Preferred Residential Securities 05-1 PLC
EUR188 Million and GBP271 Million Mortgage-Backed
Floating-Rate Notes
Rating
------
Class To From
----- -- ----
E B BB/Watch Neg
Preferred Residential Securities 05-2 PLC
GBP183.85 Million, EUR125 Million and US$70.5 Million
Mortgage-Backed Floating-Rate Notes
Rating
------
Class To From
----- -- ----
D1c BB BBB-/Watch Neg
E1c B BB/Watch Neg
ETc B BB/Watch Neg
FTc B- B/Watch Neg
Ratings Remaining On Creditwatch Negative
Preferred Residential Securities 05-1 PLC
EUR188 Million and GBP271 Million Mortgage-Backed
Floating-Rate Notes
Class Rating
----- ------
D1c BBB/Watch Neg
Ratings Removed From Creditwatch Positive And Affirmed
Preferred Residential Securities 05-1 PLC
EUR188 Million and GBP271 Million Mortgage-Backed
Floating-Rate Notes
Rating
------
Class To From
----- -- ----
B1a AA AA/Watch Pos
B1c AA AA/Watch Pos
Ratings Affirmed
Preferred Residential Securities 05-1 PLC
EUR188 Million and GBP271 Million Mortgage-Backed
Floating-Rate Notes
Class Rating
----- ------
A2c AAA
C1c A
Preferred Residential Securities 05-2 PLC
GBP183.85 Million, EUR125 Million and US$70.5 Million
Mortgage-Backed Floating-Rate Notes
Class Rating
----- ------
A2a AAA
A2c AAA
B1a AA
B1c AA
C1a A
C1c A
ROYAL WORCESTER: Clearance Sale at Factory Outlets Starts Today
---------------------------------------------------------------
Following the sale of Royal Worcester & Spode intellectual
property to UK AIM listed company Portmeirion Group Plc,
administrators from PricewaterhouseCoopers LLP will be holding a
final closure sale at the Worcester and Spode factory outlets,
following the closure of the outlets at Trentham and Clarks
Village Street.
The company warehouse in Newcastle-under-Lyme is due to close at
the end of May 2009 and all stock is being made available for
purchase at the Worcester & Spode factory outlets in what will be
a last chance to buy for consumers.
The "final closure sale", with prices to reflect the current
economic climate, will begin today May 8, 2009. With a definitive
amount of stock to sell, the administrators anticipate the closure
sale will be finished by the end of May 2009.
The locations of the outlet stores running the sale are:
Worcester:
Royal Worcester
Severn Street
Worcester
WR1 2NE
Spode:
Church Street
Stoke-on-Trent
Staffordshire
ST4 1BX
Matthew Hammond, Rob Hunt and Mike Jervis of
PricewaterhouseCoopers LLP were appointed joint administrators to
Royal Worcester & Spode Ltd on Nov. 6, 2008.
Royal Worcester & Spode Ltd sources, manufactures and sells
earthenware and china products from three operational sites in the
UK and one site in North America. The main UK trading subsidiary
is The Porcelain and Fine China Companies Limited which is also
now in administration. The US trading subsidiary is The Royal
China and Porcelain Companies Inc which remains outside the formal
administration regime.
SMART PFI: Fitch Cuts Rating on GBP4.3 Mln Class F Notes to 'B-'
----------------------------------------------------------------
Fitch Ratings has downgraded all seven note classes of SMART PFI
2007 GmbH and assigned all the notes, which are due in 2042,
Stable Outlooks.
Rating actions:
-- GBP0.1 million class A+ (ISIN: XS0291523065): downgraded to
'A+' from 'AAA'; assigned a Stable Outlook
-- GBP5 million class A (ISIN: XS0291523578): downgraded to
'BBB+' from 'AAA'; assigned a Stable Outlook
-- GBP3.25 million class B (ISIN: XS0291523735): downgraded to
'BBB' from 'AA'; assigned a Stable Outlook
-- GBP2.55 million class C (ISIN: XS0291523818): downgraded to
'BBB-' from 'A'; assigned a Stable Outlook
-- GBP4.75 million class D (ISIN: XS0291524030): downgraded to
'BB+' from 'BBB'; assigned a Stable Outlook
-- GBP5.7 million class E (ISIN: XS0291524204): downgraded to
'BB-' from 'BB'; assigned a Stable Outlook
-- GBP4.3 million class F (ISIN: XS0291524386): downgraded to
'B-' from 'B'; assigned a Stable Outlook
SMART PFI 2007 GmbH is a synthetic securitization of exposures to
certain project loans under the Private Finance Initiative and
Public and Private Partnership projects in the UK originated by
Sumitomo Mitsui Banking Corporation Europe Ltd (rated
'A+'/'F1'/Rating Watch Negative).
The downgrades reflect Fitch's view on the credit risk of the
rated notes following the release of the agency's revised Project
Finance CDO rating criteria on August 18, 2008. At the time of
the release of its new PF CDO criteria, Fitch noted that it would
be reviewing its ratings to establish consistency for existing and
new ratings. The key drivers of the rating actions are the
revised cumulative asset default rates and target CDO default
probabilities for PF CDOs which is similar to that for corporate
CDOs. However, Fitch has modified the term structure of defaults
to reflect the varied risks in the different phases of a project
for PF CDOs.
The ratings of the underlying loans have been stable. However,
Fitch's view on the recoveries on a limited portion of the
portfolio has become moderately more conservative. There have
been no substitutions in the portfolio which still contains 46
loans from 34 obligors, and there have been no defaults to date.
As outlined in the revised PF CDO criteria, the complex nature of
PF assets and portfolios requires more analysis outside of a
quantitative model, and hence the criteria framework entails a
three step process. Besides analyzing the portfolio using Fitch's
proprietary Portfolio Credit Model - step 1, Fitch tested obligor
concentration by looking at rating obligor coverage tests -- step
2. For example, when assets were ranked on an expected loss
basis, assuming Fitch's recovery expectations, class A+ was able
to withstand the default of four issuers rated 'BBB+' or below and
class E was able to withstand the default of only one issuer. The
rating obligor coverage tests were also stressed for different
recovery assumptions and the transaction proved to be fairly
sensitive to changes in recovery expectations. For example, if
recoveries were assumed to be approximately 41% (50% of the
weighted average recovery rate of the portfolio), then class A+
would only be able to withstand the default of two issuers rated
'BBB+' or below and class E would not be able to withstand the
default of even one issuer. As part of step 3, other stress tests
such as country and sector concentration, risks of facility
management providers defaulting, and property risk inherent in
residual value loans were also performed.
Based on Fitch's analysis from the three step process, the current
credit enhancement of 8.09%, 6.84%, 6.03%, 5.39%, 4.20%, 2.78% and
1.70% for classes A+, A, B, C, D, E and F respectively is not
sufficient to support the prior ratings.
SMART PFI 2007 GmbH is a bankruptcy-remote, special purpose
vehicle incorporated with limited liability under the laws of
Germany. At closing, SMBCE bought protection under a bank swap,
in respect of a GBP400m reference portfolio, from the German
public agency Kreditanstalt fur Wiederaufbau's (KfW, rated
'AAA'/'F1+'/Stable). KfW hedged its exposure by entering into a
senior credit default swap with a senior swap provider and issuing
certificates of indebtedness (Schuldscheine), which have been
purchased by SMART PFI 2007 GmbH using the proceeds from the
issuance of credit-linked notes.
At close, the transaction had a four-year replenishing period,
which now has two years remaining, during which maturing and
amortising exposures may be replenished with other exposures,
subject to satisfying certain eligibility criteria. The ratings
of the notes are linked to the credit quality of the certificates
of indebtedness issued by KfW. Therefore, if KfW were to be
downgraded below 'AAA'/'F1+', any note rated higher than the then-
outstanding rating of KfW would be downgraded accordingly.
TATA MOTORS: Talks on JLR Financing Continues, UK Gov't Says
------------------------------------------------------------
Reuters reports that the British government said on Wednesday that
negotiations with Jaguar Land Rover and its parent company,
India's Tata Motors, on guaranteeing financing are continuing
despite reports that the talks were on the verge of collapse after
a dispute over the terms of a loan from the European Investment
Bank.
Graham Ruddick of Telegraph.co.uk reports JLR needs guarantees on
a GBP340 million loan from the EIB and a GBP400 million financial
package from state-backed banks Royal Bank of Scotland and Lloyds
Banking Group.
Citing sources close to the negotiations, Graham Ruddick of
Telegraph.co.uk discloses the terms of the loan set by the
government for underwriting the EIB loan, which is intended for
the development of green technology, include the right to demand a
veto over all decisions taken by the company, the ability to
choose the chairman, a permanent seat on the board, extra
investment into JLR of GBP300 million by Tata, and guarantees of
no further job cuts among the 15,000 UK employees.
Telegraph.co.uk notes the government has also said it will only
guarantee GBP175 million of the loan and that, if it is taken up,
it will charge JLR 15pc of the total to provide it.
Reuters relates the Department of Business, Enterprise and
Regulatory Reform said the "primary financing responsibility" for
Jaguar Land Rover lies with Tata.
"We have been actively encouraging them for the last six months to
put together a long-term funding package," Reuters quoted the
Department of Business, Enterprise and Regulatory Reform as
saying. "In parallel, we have been talking to banks on their
behalf, have appointed financial advisers to assist and we are
prepared to guarantee loans from the European Investment Bank on
the right terms."
India's largest automobile company, Tata Motors Limited --
http://www.tatamotors.com/-- is mainly engaged in the business
of automobile products consisting of all types of commercial and
passenger vehicles, including financing of the vehicles sold by
the company. The company's operating segments consists of
Automotive and Others. In addition to its automotive products,
it offers construction equipment, engineering solutions and
software operations. TML is listed on the Bombay Stock
Exchange, the National Stock Exchange of India and New York
Stock Exchange. It was ultimately 33.4% owned by the Tata Group
as of December 2007.
Tata Motors has operations in Russia and the United Kingdom.
* * *
As reported in the Troubled Company Reporter-Asia Pacific on
Mar. 27, 2009, Standard & Poor's Ratings Services lowered its
corporate credit rating on India-based automaker Tata Motors Ltd.
to 'B+' from 'BB-'. The rating remains on CreditWatch with
negative implications, where it was placed on Dec. 12, 2008. At
the same time, S&P lowered its issue rating on the company's
senior unsecured notes to 'B+' from 'BB-' and also kept the rating
on CreditWatch with negative implications.
S&P said the rating action follows material deterioration in Tata
Motors' cash flows and related metrics on a consolidated basis,
derived from an adverse operating environment, which, combined
with significantly high debt levels, will affect its credit
protection measures beyond those consistent with a 'BB' rating
category.
THOMAS WALKER: Administrators Put Assets for Sale
-------------------------------------------------
Thomas Walker Plc's joint administrators, Kim Rayment and Jo
Wright, offer for sale the company and its UK subsidiaries'
business and assets.
Principal features of the assets for sale include:
-- freeholder premises in Digbeth and Kings Norton;
-- the business and assets of TW Staming Limited in
Digbeth supplying non-ferrous stampings to the
construction industry -- turnover approximately
GBP3 million; and
-- the business and assets of Thomas Walker UK Limited in Kings
Norton supplying identity products and garment fasteners --
turnover approximately GBP3.5 million.
For further information, contact:
Simon Ling
BDO Stoy Hayward LLP
Tel: 0121 352 6265
Email: simon.ling@bdo.co.uk
Website: www.bdo.co.uk
WILLIAM VERRY: Goes Into Administration; McLaren Buys Contracts
---------------------------------------------------------------
Grant Prior at contractjournal.com reports that William Verry Ltd,
trading as Verry Construction, has gone into administration.
The company said on its Web site G. S. Kinlan & Shay Bannon were
appointed as joint administrators on May 5, 2009.
Citing a company spokesman, the report discloses McLaren
Construction "has reached agreement with the administrators for
the sale and purchase of certain of the company's assets and,
subject to the agreement of the respective employers, the novation
of selected contracts".
Headquartered in London, William Verry Ltd --
http://www.verryconstruction.co.uk-- is a general contracting
company. The company works on a wide range of commercial,
institutional, and residential buildings and is engaged in
refurbishment, new building, and fitting-out projects. Typical
contracts range from GBP430,000 to GBP24 million. Founded in 1832
as a repair and maintenance contractor for city buildings, William
Verry has grown into a group of companies focusing on
construction, facilities management, and specialist glazing
systems. Its client roster includes Alcatel, the BBC, and
Mercedes-Benz.
* BOOK REVIEW: Megamergers
--------------------------
Author: Kenneth M. Davidson
Publisher: Beard Books
Hardcover: 427 pages
Listprice: US$34.95
Review by Henry Berry
Megamergers are nothing new to the business world. One of the
first occurred in 1901, when Carnegie Steel merged with several
rival steel corporations, resulting in the billion-dollar United
States Steel. Since then, megamergers have been a part of
American business. However, the author notes that megamergers
have historically "occurred sporadically and been understandable"
on face value. By contrast, in recent decades there has been a
"current wave of large mergers [that] is unprecedented."
In Megamergers - Corporate America's Billion-Dollar Takeovers,
Davidson looks at the unprecedented number of megamergers
occurring today and considers whether this signals a change in the
thinking of U.S. business leaders. Legislators, corporate
executives, mergers specialists, and anyone else involved in, or
affected by, megamergers will find this book enlightening.
An announcement of a merger is usually accompanied with the
pronouncements that it will result in greater synergies,
operational efficiencies, and improved servicing of markets.
Davidson questions whether this has, in fact, been the case. He
analyzes the subsequent financial performance of the corporate
behemoths produced by these megamergers and concludes that the
majority of them were not justifiable nor, ultimately, productive.
Davidson is an admitted skeptic about the value of mergers to the
overall economy and to employees, stockholders, and consumers. He
is critical of the overly optimistic rationales prevalent in
today's business climate that lead many businesspersons into
mergers. For the most part, though, he keeps his biases in check.
He rejects many of the common criticisms of mergers. For example,
he finds unpersuasive the argument that mergers should be rejected
on the ground that they undermine market competitiveness. Nor,
does he say, is it worthwhile to revisit the ongoing debate over
whether "risk arbitrageurs are good guys or bad guys."
The author states that his "first intention [is] to paint a
picture of what is happening [to] clarify the issues involved and
areas of dispute." He offers a balanced examination of the
megamerger phenomenon, particularly as it pertains to the energy
and financial services industries. He goes beyond seeing
megamergers only as phenomena of contemporary corporate culture,
and his analyses go beyond mere statistics. Megamergers have
their roots not only in business ambitions and current trends, but
also in human nature. Recognizing this, the author also addresses
the psychology underlying megamergers. As noted in the section
"The Acquisition Imperative," mergers present a temptation to the
decision-making executives of successful companies "look[ing]
beyond their product and consider[ing] the disposal of excess
profits." Davidson explains why a merger appears to many
executives to be a better option than distributing profits to
shareholders, starting new businesses, or investing in securities.
The informed perspective Davidson offers in this book, first
published in 2003, is just as relevant today. It is a book that
brings new wisdom to old ways of thinking about megamergers.
An attorney for the U. S. Federal Trade Commission for 25 years,
Kenneth M. Davidson has also been a corporate attorney and a
visiting law professor.
*********
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.
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