/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/090821.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, August 21, 2009, Vol. 10, No. 165 Headlines F I N L A N D STORA ENSO: To Close Two Mills; 1,100 Jobs at Risk F R A N C E ALCATEL-LUCENT: Appoints Olivier Lauras as Head of Vietnam Unit NORTEL NETWORKS: French Court Extends Deadline to Sell Unit G E R M A N Y GENERAL MOTORS: Board to Meet Today to Discuss Opel Bids HYPO REAL: German Officials Defend EUR100 Bil. Bail-Out LEVEL ONE: Creditors Mull Sale of German Properties I R E L A N D BANTRY BAY: Moody's Withdraws Ratings on Six Classes of Notes CLOVERIE PLC: Moody's Withdraws 'Ca' Rating on Class B Notes CLOVERIE PLC: Moody's Withdraws 'Ca' Rating on 2007-33 Notes EUROCREDIT CDO: Moody's Cuts Rating on Class E Notes to 'Ca' FATE PARK: Court Okays Rescue Plan; 105 Jobs Secured IRON HILL: Moody's Downgrades Rating on Class C Notes to 'B2' I T A L Y SOCOTHERM SPA: Says Potential Bidders Line Up for Assets K Y R G Y Z S T A N SOLID WASTE: Creditors Must File Claims by August 29 L U X E M B O U R G MELCHIOR CDO: S&P Junks Ratings on Three Classes of Notes N E T H E R L A N D S AEGON NV: Fitch Downgrades Ratings on Hybrid Instruments to 'BB' ASTIR BV: S&P Cuts Ratings on Series 27 and Series 31 Notes to CC DALRADIAN EUROPEAN: Moody's Cuts Rating on Class E Notes to 'Caa3' DUCHESS IV: S&P Puts 'BB'-Rated Class E Notes on Watch Negative ELM BV: Moody's Junks Ratings on Four Classes of Notes HEAD NV: Moody's Changes Probability of Default Rating to Caa1/LD JUBILEE CDO: S&P Puts Two 'BB'-Rated Notes on Watch Negative LEOPARD CLO: S&P Puts 'BB'-Rated Class D Notes on Watch Negative P O L A N D LUKAS BANK: Moody's Cuts Bank Financial Strength Rating to 'D+' P O R T U G A L JET REPUBLIC: Halts Operations on Lack of Funding R U S S I A ARGUNSKIY MACHINE: Creditors Must File Claims by August 24 BELOMORSKAYA WOOD: Creditors Must File Claims by August 24 BSK-STROY LLC: Creditors Must File Claims by August 24 BTA BANK: Moody's Junks Long-Term Deposit Ratings From 'B3' DIZAIN-STROY LLC: Creditors Must File Claims by August 24 DON-LES LLC: Creditors Must File Claims by August 24 EVRAZ GROUP: Delong Bid Fails; To Explore "Cheaper" China Options GROS-WOOD CJSC: Creditors Must File Claims by August 24 KERAMOS LLC: Creditors Must File Claims by August 24 KRASNOPOLYANSKAYA PAPER: Creditors Must File Claims by August 24 MOBIL-SPETS LLC: Creditors Must File Claims by August 24 NOVOSIBIRSK METALLURGIC: Creditors Must File Claims by August 24 ONIKS LLC: Creditors Must File Claims by August 24 PARFINO LES: Creditors Must File Claims by August 24 SIB-PROM LLC: Creditors Must File Claims by August 24 SIB-STROY LLC: Creditors Must File Claims by August 25 SILUR LLC: Creditors Must File Claims by August 24 STROY-TRANS LLC: Creditors Must File Claims by August 24 URAL-STROY-KOMPLEKS: Creditors Must File Claims by August 24 URALSKIY FOUNDRY: Creditors Must File Claims by August 24 VOLGA-URAL-STROY: Creditors Must File Claims by August 24 S W E D E N MODERNA FORSAKRINGAR: Moody's Cuts Insurance Fin'l Rating to 'Ba1' S W I T Z E R L A N D COMMS ONE: Creditors Must File Claims by August 24 CORPORATE LEGAL: Claims Filing Deadline is August 24 CRR CENTER: Creditors Must File Claims by August 26 EBS EXPERTENBUERO: Claims Filing Deadline is August 24 EFEKA AG: Claims Filing Deadline is August 24 FS AG: Creditors Must File Claims by August 24 SAFIMEX AG: Claims Filing Deadline is August 25 TABROT AG: Claims Filing Deadline is August 24 UBS AG: Inks Settlement Pact With IRS Regarding Summons T U R K E Y TOPLU KONUT: Fitch Affirms Long-Term Currency Ratings at 'BB-' U K R A I N E ANTENT MELDIS: Creditors Must File Claims by August 23 KAGARLIKINVESTTRADE LLC: Claims Filing Period Ends August 23 KARPATY LTD: Creditors Must File Claims by August 23 MONOBUD-S LLC: Creditors Must File Claims by August 23 NIKOLAYEV-LIDER LLC: Creditors Must File Claims by August 23 PARM MEDICAL: Creditors Must File Claims by August 23 RESOURCE-INVEST-AGRO: Creditors Must File Claims by August 23 TOPOL LLC: Creditors Must File Claims by August 23 YAROPOVICHI AGRICULTURAL: Creditors Must File Claims by August 23 ZODIAC-OMEGA LLC: Creditors Must File Claims by August 23 U N I T E D K I N G D O M AEOLUS CDO: S&P Junks Rating on Class D Notes From 'BBB-' CLARIS LTD: S&P Withdraws 'CCC-' Rating on EUR12 Mil. Notes CLUB ASIA: Mazars Appointed as Administrators EMI GROUP: Terra Firm Ousts UK Pension Fund Head JESSOPS PLC: Nears Debt Restructuring Deal with HSBC LEHMAN BROTHERS: FSA Findings in Structured Products Probe Delayed LLOYDS BANKING: Reviews Cheltenham & Gloucester Closure Plan LOOKERS PLC: Wants Government's Scrappage Scheme Extended NORTHERN ROCK: Fitch Cuts Rating on Hybrid Debt Securities to 'C' NORTHERN ROCK: S&P Lowers Ratings on Seven Securities to 'CC' OPERA FINANCE: Moody's Downgrades Rating on Class D Notes to 'Ba1' STERLING ENERGY: To Raise GBP62.5 Million in Share Placing * BOOK REVIEW: Dangerous Pursuits - Mergers and Acquisitions in ********* ============= F I N L A N D ============= STORA ENSO: To Close Two Mills; 1,100 Jobs at Risk -------------------------------------------------- Diana ben-Aaron and Kati Pohjanpalo at Bloomberg News report that Stora Enso Oyj said it will shutter the Sunila pulp mill during the second quarter and plans to close the Varkaus paper mill complex by the end of next year if poor sales and pricing of uncoated fine paper continue. According to Bloomberg, job losses from Sunila and other planned cuts would total 450, rising to 1,100 if Varkaus is closed. Bloomberg relates Finnish Prime Minister Matti Vanhanen's government said Wednesday in an e-mailed statement that towns affected by the closures will be declared areas of sudden structural change and will be given funds to help create new jobs and prevent long-term unemployment. Bloomberg recalls Stora Enso has closed six mills worldwide since 2006, sold off operations and reduced its workforce by 37% to 29,000 employees. The company currently has 25% of its 80 production sites and 33% of its workforce in Finland. Stora Enso, as cited by Bloomberg, said it will report about EUR592 million in writedowns and other charges in the third quarter. Headquartered in Helsinki, Finland, Stora Enso Oyj -- http://www.storaenso.com/-- is a global paper, packaging and forest products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging and wood products. Stora Enso employs 29,000 people worldwide, and sales in 2008 amounted to EUR11 billion. During the year ended December 31, 2008, the annual production for the Company was 12.7 million tons of paper and board, 1.5 billion square meters of corrugated packaging and 6.9 million cubic meters of sawn wood products, including 3.2 million cubic meters of products. The customers for the Company include publishers, printing houses and paper merchants, as well as the packaging, joinery and construction industries. In August 2007, the Company completed the acquisition of 28% shares in Stora Enso Poland SA. In 2008, the Company completed the disposal of Papyrus Merchant business area. * * * As reported in the Troubled Company Reporter-Europe on July 28, 2009, Fitch Ratings downgraded Finland-based Stora Enso Oyj's Long-term Issuer Default Rating and senior unsecured rating to 'BB' from 'BB+', respectively. The agency affirmed the Short-term IDR of 'B'. The Outlook on the Long-term IDR is Negative. Fitch said the downgrade reflects Fitch's view that the current cyclical erosion in demand is intensifying the challenges faced by Stora and durably impacting its already weak credit profile. =========== F R A N C E =========== ALCATEL-LUCENT: Appoints Olivier Lauras as Head of Vietnam Unit --------------------------------------------------------------- Alcatel-Lucent SA has appointed Olivier Lauras as head of the company's business in Vietnam, effective August 1, 2009. Mr. Lauras will report to Nicolas Van Den Abeele, head of Alcatel- Lucent's activities in South and South East Asia. The company said Mr. Lauras assumes overall responsibility for managing day-to-day operations, as well as taking the lead on strategic business directions for Alcatel-Lucent in Vietnam. "I am very pleased to have Olivier on board in Vietnam to support the ever-increasing potential in this market," said Sean Dolan, president of Alcatel-Lucent Asia Pacific. "Olivier's international experience in sales and operations will reinforce the company's business and presence in the country, and extend the growth path that Alcatel-Lucent has developed in this market." Prior to his appointment in Vietnam, Mr. Lauras was Chief Executing Officer (CEO) for Alcatel-Lucent Pakistan Ltd and Country Senior Officer (CSO) for Pakistan and Afghanistan. Mr. Lauras has been working at Alcatel-Lucent since 1996, holding various management positions in Europe, America and Asia. Alcatel-Lucent has been active and present in Vietnam for 20 years, hosting 250 employees and serving a customer base of major fixed and mobile operators in the country. 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 was affirmed. S&P said the outlook is negative. NORTEL NETWORKS: French Court Extends Deadline to Sell Unit ----------------------------------------------------------- Heather Smith at Bloomberg News reports that Nortel Networks Corp. said the commercial court in Versailles, near Paris, has extended the company's deadline to sell its French research and development unit for another three months. Bloomberg relates Nortel said the commercial court in Versailles approved a request by Michel Clement, general manager for Nortel's French operations, for a one-time extension to Nov. 20. "Within this new extended mandate, we will be able to at least get a secure offer for the business," Bloomberg quoted Isabelle Tadmoury, a Nortel spokeswoman in France, as saying. Ms. Tadmoury, as cited by Bloomberg, said discussions are "advancing" with "multiple" possible buyers. Bloomberg recalls Ericsson AB, the world's largest maker of wireless phone networks, said on July 25 that it will buy Nortel’s wireless equipment unit for USUS$1.13 billion. Bloomberg says the sale is under review by the Canadian government. According to Bloomberg, discussions concerning the French unit's sale focus on its GSM, or global system for mobile communications, business. Bloomberg discloses Ms. Tadmoury said Ernst & Young will release funds as a result of yesterday's court decision to allow severance payments for employees at the French research group. As reported in the Troubled Company Reporter-Europe on July 10, 2009, Bloomberg News said Nortel requested the sale of the unit, one of its two French subsidiaries, as part of bankruptcy procedures filed in London in January 2009. A court in Versailles set an initial deadline of August 20, 2009, for a possible sale of the unit. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) ============= G E R M A N Y ============= GENERAL MOTORS: Board to Meet Today to Discuss Opel Bids -------------------------------------------------------- General Motors Co. directors will conduct a conference call today, Aug. 21, to discuss bids for its Opel division, Katie Merx and Laurence Frost at Bloomberg News report, citing two people familiar with the planning. According to Bloomberg, one of the people who asked not to be identified because the deliberations aren’t public, said the board will weigh those two bids against insolvency. The source told Bloomberg a group led by Aurora, Ontario-based car-parts maker Magna International Inc. is likely to win the bidding, because Germany's EUR4.5-billion (US$6.4 billion) financing package favors it. Credit Guarantees Patrick Donahue at Bloomberg News reports Chancellor Angela Merkel’s government offered to contribute EUR4.5 billion (US$6.4 billion) in credit guarantees toward an offer by Magna for GM’s Opel division. Bloomberg relates Steffen Moritz, an Economy Ministry spokesman, said yesterday in Berlin Germany’s federal and state governments will put forward the entire amount toward Magna’s bid and negotiate with European Union countries afterward. According to Bloomberg, the German chancellor, faced with rising unemployment as national elections loom on Sept. 27, prefers the bid by the Magna, believing it will secure more jobs. Magna Bid On August 17, 2009, the Troubled Company Reporter-Europe, citing Bloomberg News, reported GM received a revised bid from Magna and Sberbank. Bloomberg disclosed Siegfried Wolf, co-chief executive officer of Magna, said Thursday last week Magna and Sberbank are offering to pay about EUR500 million (US$714 million) for a combined 55% stake in Opel. Bloomberg said each of the partners would own 27.5%, leaving GM with 35% and Opel workers holding the remaining 10%. Mr. Wolf, as cited by Bloomberg said, Magna's revised bid addresses cooperation with GM's Chevrolet division and answers any intellectual property questions. According to Bloomberg, Christopher Preuss, a spokesman for GM, said the U.S. carmaker requested an "outline of the financing package" that Germany and other European governments are prepared to offer under the revised proposal. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HYPO REAL: German Officials Defend EUR100 Bil. Bail-Out ------------------------------------------------------- dpa reports that German government insiders defended the state's bailout of Hypo Real Estate Holding AG on Wednesday, during the final stages of a parliamentary inquiry into last year's EUR100-billion rescue of the bank from insolvency. The report relates Secretary of State for Finance Joerg Asmussen and Jens Weidmann, advisor to German Chancellor Angela Merkel, both told the inquiry there had been no alternative to rescuing the mortgage lender. According to the report, both said no errors had been made ahead of the bail-out, and said there had been no indications that problems at the bank threatened its very existence. Mr. Asmussen maintained that he had not acted negligently and had not entered last year's crisis talks unprepared, while Mr. Weidmann justified the government's late response to HRE's looming bankruptcy, explaining that the earlier the government intervened, the greater the banks' demands would have been. The inquiry is due to wind up in September, when its findings will be presented imminently before Germany's general election, on September 27, the report says. Merkel Testimony As reported in the Troubled Company Reporter-Europe on Aug. 4, 2009, Bloomberg News said that the parliamentary committee investigating Hypo Real Estate Holding AG's near-collapse failed in its bid to seek testimony by Chancellor Angel Merkel on her government's role in the rescue of the lender. Bloomberg disclosed Winfried Holz, the committee's chief of staff, said that the panel, "failed to find the required majority" to pass the motion. Hypo almost collapsed in September when its Depfa unit failed to get short-term funding amid the drying-up of inter-bank lending after Lehman Brothers Holdings Inc.'s bankruptcy. Hypo has since received a total of EUR102 billion (US$144 billion) in debt guarantees and credit lines. On July 31, 2009, the Troubled Company Reporter-Europe, citing Bloomberg News, reported that Gerhard Schick, the opposition Green Party's main representative, told fellow panel members that the investigative committee needs to call Ms. Merkel to explain how she defended tax payers' interests in talks with banks on a first rescue package for Hypo. According to Bloomberg, Josef Ackermann, Deutsche Bank AG's chief executive officer, told lawmakers that Ms. Merkel stepped in at the last minute to negotiate a rescue package for Hypo. Expropriation In an Aug. 14 report Deutsche Welle said the German government plans a so-called squeeze-out to eject the remaining investors of Hypo, in exchange for a compensation payment. According to Deutsche Welle, among the remaining shareholders that the state is attempting to cast out is American private equity firm JC Flowers, which invested EUR1.1 billion in HRE as collapsing real estate markets battered the bank in the spring of 2008. The US investor, Deutsche Welle disclosed, has fought the government's takeover attempts, arguing it would ruin Germany's reputation as a safe place for foreign investment. Mr. Flowers will likely receive about 5% of his investment back under the government's buyout plan, Deustche Welle noted. About Hypo Real Estate Germany-based Hypo Real Estate Holding AG (FRA:HRXG) -- http://www.hyporealestate.com/-- is a German holding company for the Hypo Real Estate Group. It is an international real estate financing company, combining commercial real estate financing products with investment banking. The Company divides its operations into three business units: Commercial Real Estate, which provides real estate financing on the international and German market; Public Sector & Infrastructure Finance, and Capital Markets & Asset Management. Hypo Real Estate Group operates through a number of subsidiaries, including, among others, Hypo Real Estate Bank International AG that focuses on Pfandbrief-based commercial real estate financing in all international markets, and offers large-volume investment banking and structured finance transactions; Hypo Real Estate Bank AG that focuses on the commercial real estate financing and refinancing business in Germany, and DEPFA Bank plc in Dublin, Ireland, which is a provider of public finance. * * * As reported in the Troubled Company Reporter-Europe on July 6, 2009, Fitch Ratings affirmed Hypo Real Estate Holding AG's individual rating at 'F'. LEVEL ONE: Creditors Mull Sale of German Properties --------------------------------------------------- Esteban Duarte and Simon Packard at Bloomberg News report that creditors of Level One are preparing to sell 3,247 homes pledged as collateral in an attempt to recover EUR163 million (US$230 million) owed by the company. Bloomberg recalls Level One bought the properties with a loan provided by Credit Suisse Group AG, which packaged the debt into securities sold by special-purpose company Titan Europe 2007-2. The loan, known as Portier, has been in default since August 2008 when Level One's two main holding companies were placed under court administration in the U.K. According to Bloomberg, Capita Asset Services, the manager of the defaulted debt, said in a report it plans "to commence the marketing process of the portfolio" of apartment blocks mostly in the Berlin area. Capita, as cited by Bloomberg, said it will hire a broker and have the estimated values of the homes by the end of August. Bloomberg relates Christian Koehler-Ma, a partner of Berlin insolvency firm Leonhardt Westhelle & Partner and an administrator of Level One companies in Germany, said the sales may take time because "prior investments in the properties" are required before an "orderly and structured sales process" can begin. On Jan. 30, 2009, the Troubled Company Reporter-Europe, citing Monsters and Critics, reported that British-run property investor Level One declared insolvency after being hit by the British slump. M&C disclosed Level One, which invested mainly in substandard communist-era public housing in eastern Germany and Berlin, ran out of credit to renovate the apartments as bank lending tightened up. Citing insolvency administrator Rolf Rattunde, M&C said the group, which owns 20,000 apartments and 500 commercial properties, racked up debts of EUR1.5 billion (US$2 billion). According to M&C, 38 companies in the group applied for protection from creditors. ============= I R E L A N D ============= BANTRY BAY: Moody's Withdraws Ratings on Six Classes of Notes ------------------------------------------------------------- Moody's Investors Service has withdrawn the ratings of six classes of Notes issued by Bantry Bay CDO I P.L.C. due to the liquidation of collateral held by the Issuer. The transaction experienced an Event of Default on 3 December 2007 and the Trustee was directed on January 2009 to liquidate the collateral as a post-event-of-default remedy. Moody's was notified by the Trustee that a final distribution of liquidation proceeds has taken place. As a result of the liquidation, the Class A-1 Notes suffered a loss of 45% on the principal amount whereas all other classes of Notes suffered a 100% loss. The rating actions are: Issuer: Bantry Bay CDO I P.L.C. -- Class A-1 Floating Rate Notes, due 2052, Withdrawn; previously on Apr 23, 2009 Downgraded to Ca -- Class A-2 Floating Rate Notes, due 2052, Withdrawn; previously on Apr 23, 2009 Downgraded to C -- Class A-3 Floating Rate Notes, due 2052, Withdrawn; previously on Jun 17, 2008 Downgraded to C -- Class B Floating Rate Notes, due 2052, Withdrawn; previously on Jun 17, 2008 Downgraded to C -- Class C Deferrable Floating Rate Notes, due 2052, Withdrawn; previously on Feb 22, 2008 Downgraded to C -- Class D Deferrable Floating Rate Notes, due 2052, Withdrawn; previously on Feb 22, 2008 Downgraded to C CLOVERIE PLC: Moody's Withdraws 'Ca' Rating on Class B Notes ------------------------------------------------------------ Moody's Investors Service has withdrawn its ratings of one class of notes issued by Cloverie Plc. The rating action follows the repurchase in full of the notes on the August 15, 2009. The rating action is: Cloverie Plc - Series 2007-32/33 -- US$80,000,000 Series 2007-32 Class B Credit Linked Notes, Withdrawn; previously on Apr 18, 2008 Downgraded to Ca CLOVERIE PLC: Moody's Withdraws 'Ca' Rating on 2007-33 Notes ------------------------------------------------------------ Moody's Investors Service announced it has withdrawn its ratings of one class of notes issued by Cloverie Plc. The rating action follows the repurchase in full of the notes on the August 15, 2009. The rating action is: Issuer: Cloverie Plc - Series 2007-32/33 -- Series 2007-33 US$20,000,000.00 Class C Secured Floating Rate Portfolio Credit Linked Notes due 2050, Withdrawn; previously on April 18, 2008 Downgraded to Ca EUROCREDIT CDO: Moody's Cuts Rating on Class E Notes to 'Ca' ------------------------------------------------------------ Moody's Investors Service announced it has downgraded its ratings of twelve classes of notes issued by EUROCREDIT CDO VII PLC. The transaction is a managed high yield collateralized loan obligation with exposure to predominantly European senior secured loans, as well as some mezzanine loan exposure. According to Moody's, the rating actions taken on the notes are a result of credit deterioration of the underlying portfolio. This is observed in, among other measures as per Trustee Report dated 31 July 2009, a decline in the average credit rating as measured through the weighted average rating factor (currently 2690), an increase in the amount of defaulted securities (currently 7% of the portfolio), an increase in the proportion of securities from issuers rated Caa1 and below (currently 8.36% of the portfolio), and a failure of Class D and Class E Par Value tests. Moody's also performed a sensitivity analysis, including amongst others, a further decline in portfolio weighted average rating factor quality combined with a decrease in the expected recovery rates. The rating actions also reflect Moody's revised assumptions with respect to default probability and the calculation of the Diversity Score as described in the press release dated February 4, 2009, titled "Moody's updates key assumptions for rating CLOs." These revised assumptions have been applied to all corporate credits in the underlying portfolio, the revised assumptions for the treatment of ratings on "Review for Possible Downgrade", "Review for Possible Upgrade", or with a "Negative Outlook" being applied to those corporate credits that are publicly rated. Moody's also notes that a material proportion of the collateral pool consists of debt obligations whose credit quality has been assessed through Moody's Credit Estimates. As credit estimates do not carry credit indicators such as ratings reviews and outlooks, a stress of a quarter notch-equivalent assumed downgrade was applied to each of these estimates. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. Moody's monitors this transaction using primarily the methodology and its supplements for cash flow CLOs as described in Moody's Special Reports and press releases below: -- Moody's Approach to Rating Collateralized Loan Obligations (August 2009) The rating actions are: Issuer: EUROCREDIT CDO VII PLC: -- EUR125M Revolving Loan Facility Notes, Downgraded to Aa2; previously on May 21, 2007 Assigned Aaa -- EUR221.5M Class A Senior Secured Floating Rate Notes due 2023 Notes, Downgraded to Aa2; previously on May 21, 2007 Assigned Aaa -- EUR38.3M Class B Senior Secured Deferrable Floating Rate Notes due 2023-1 Notes, Downgraded to Baa1; previously on March 4, 2009 Aa2 Placed Under Review for Possible Downgrade -- EUR31.2M Class C Senior Secured Deferrable Floating Rate Notes due 2023 Notes, Downgraded to Ba2; previously on March 17, 2009 Downgraded to Baa3 and Remains On Review for Possible Downgrade -- EUR29.1M Class D Senior Secured Deferrable Floating Rate Notes due 2023 Notes, Downgraded to Caa1; previously on March 17, 2009 Downgraded to B1 and Remains On Review for Possible Downgrade -- EUR19.8M Class E Senior Secured Deferrable Floating Rate Notes due 2023-1 Notes, Downgraded to Ca; previously on March 17, 2009 Downgraded to Caa1 and Remains On Review for Possible Downgrade -- EUR4M Class P Combination Notes due 2023 Notes, Downgraded to Ba2; previously on March 4, 2009 A3 Placed Under Review for Possible Downgrade -- EUR8M Class Q Combination Notes due 2023 Notes, Downgraded to Caa1; previously on March 4, 2009 Baa3 Placed Under Review for Possible Downgrade -- EUR15M Class R Combination Notes due 2023 Notes, Downgraded to Ba3; previously on March 4, 2009 Baa1 Placed Under Review for Possible Downgrade -- EUR6M Class S Combination Notes due 2023 Notes, Downgraded to Ba2; previously on March 4, 2009 A3 Placed Under Review for Possible Downgrade -- EUR3M Class V Combination Notes due 2023 Notes, Downgraded to Caa2; previously on March 4, 2009 Baa3 Placed Under Review for Possible Downgrade -- EUR8M Class W Combination Notes due 2023 Notes, Downgraded to B3; previously on March 4, 2009 Baa2 Placed Under Review for Possible Downgrade FATE PARK: Court Okays Rescue Plan; 105 Jobs Secured ---------------------------------------------------- RTE Business reports that the High Court has approved survival proposals put forward by an examiner for Fate Park Ltd., securing 105 jobs at the oil distribution company. According to the report, under the plans, Fate Park trading as Sweeney Oil, and a related company Castlebar Oil Company Ltd,, will be completely taken over by fuel company Tedcastle Holdings, in return for a EUR12 million investment. Under the scheme of arrangement put forward by examiner Billy O'Riordan of PwC, secured creditor AIB, which is owed EUR20 million, will receive EUR6.6 million, while Nire Oil, another secured creditor, will receive EUR250,000 of a debt of EUR5 million. The report recalls Fate Park went into examinership in April as a result the company's running into financial difficulties over cashflow constraints arising from the funding of subsidiaries within the group. Fate Park Ltd. is an oil distribution company. It has 16 depots, 65 trucks, two petrol stations and 15% of the market share in Connacht. IRON HILL: Moody's Downgrades Rating on Class C Notes to 'B2' ------------------------------------------------------------- Moody's Investors Service has downgraded its ratings of two classes of notes issued by Iron Hill CLO Limited. Issuer: Iron Hill CLO Limited -- Class B Senior Secured Deferrable Floating Rate Notes due 2025, Downgraded to Ba3; previously on Mar 4, 2009 Baa3 Placed Under Review for Possible Downgrade -- Class C Senior Secured Deferrable Floating Rate Notes due 2025, Downgraded to B2; previously on Mar 4, 2009 Ba3 Placed Under Review for Possible Downgrade This transaction is a managed cash leveraged loan collateralized loan obligation with exposure to predominantly European senior secured loans. The rating actions reflect Moody's revised assumptions with respect to default probability and the calculation of the Diversity Score as described in the press release dated February 4, 2009, titled "Moody's updates key assumptions for rating CLOs." These revised assumptions have been applied to all corporate credits in the underlying portfolio, the revised assumptions for the treatment of ratings on "Review for Possible Downgrade", "Review for Possible Upgrade", or with a "Negative Outlook" being applied to those corporate credits that are publicly rated. Moody's also notes that a material proportion of the collateral pool consists of debt obligations whose credit quality has been assessed through Moody's Credit Estimates. As credit estimates do not carry credit indicators such as ratings reviews and outlooks, a stress of a quarter notch-equivalent assumed downgrade was applied to each of these estimates. According to Moody's, the rating actions taken on the notes are also a result of credit deterioration of the underlying portfolio. This is observed in, among other measures as per Trustee Report dated 10 July 2009, a decline in the average credit rating as measured through the weighted average rating factor (currently 2914), an increase in the amount of defaulted securities (currently 2.56% of the portfolio), and an increase in the proportion of securities from issuers rated Caa1 and below (currently 13.52% of the portfolio). Moody's also performed a sensitivity analysis, including amongst others, a further decline in portfolio WARF quality. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. ========= I T A L Y ========= SOCOTHERM SPA: Says Potential Bidders Line Up for Assets -------------------------------------------------------- Armorel Kenna at Bloomberg News reports that Socotherm SpA said the sale of assets that fall short of its profit targets or no longer make up a central part of the business is progressing as potential bidders line up. "It's a buyers' world out there, we've got much interest from potential buyers, but if the price isn't right we may look for partners," Bloomberg quoted Socotherm Chairman Zeno Soave as saying in an interview. Mr. Soave, as cited by Bloomberg, said selling assets may cut sales to less than EUR200 million (US$283 million) this year from EUR260 million in 2008, and will help efforts to return to profit in 2009 following a loss of EUR4 million last year. He declined to name units that Socotherm has put up on the block. Bloomberg relates Mr. Soave attributed the company's woes to losses of about US$100 million that stemmed from contracts in Qatar, West Africa and the U.S., as well as lack of credit. Restructuring Plan On Aug. 6, 2009, the Troubled Company Reporter-Europe, citing Bloomberg News, reported that Socotherm was suspended indefinitely from trading in Milan after its board agreed to propose a pre- insolvency restructuring plan. Bloomberg disclosed the company said the restructuring plan protects its goodwill and will give creditors "a greater value than the liquidation value of the individual assets". Socotherm SpA -- http://www.socotherm.com/-- is an Italy-based company which specializes in external and internal anticorrosion coating and thermal insulation for onshore and offshore pipelines. It provides internal and external pipe coating for oil, gas and water transportation industries and specializes in deep-water pipe insulation and coating technology. Other services offered by the Company are: special insulation for ship carriers transporting liquefied gas and for district heating pipelines, asphalt road maintenance, pipeline rehabilitation and the supply of photovoltaic systems on ground or building integrated. It operates throughout the world through four geographical business areas: EMEA with Europe, Middle East and Africa; Asia Pacific with Malaysia, China and Australia; Americas with South and North America, and West Africa with Nigeria and Angola. Socotherm SpA operates through some subsidiaries, among them there are Socotherm (Shashi) Pipe Coating Ltd, Socotherm Field Services Srl and Socopower Srl. =================== K Y R G Y Z S T A N =================== SOLID WASTE: Creditors Must File Claims by August 29 ---------------------------------------------------- LLC Refuse Collection Company Solid Waste is currently undergoing liquidation. Creditors have until August 29, 2009, to submit proofs of claim to: For further information, contact (+996 312) 32-06-65, (0-555) 71-72-79. =================== L U X E M B O U R G =================== MELCHIOR CDO: S&P Junks Ratings on Three Classes of Notes --------------------------------------------------------- Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on the class B-1, B-2, C- 1, C-2, and D notes issued by Melchior CDO I S.A. At the same time, S&P affirmed the rating on the class A-1 notes. The rating actions reflect S&P's assessment of the effect of negative rating migration and defaults in the transaction's underlying portfolio on its cash flows. In S&P's opinion, these recent developments have increased the risk that cash flows from the portfolio may not be sufficient to repay all junior noteholders in full. The transaction has been structured to include interest coverage and collateral coverage tests. While the class A OC, class B OC, class A IC, class B IC, and class C IC ratios exceed their respective triggers, the OC ratios for classes C and D and the IC ratio for class D are failing, with the OC ratio for class D being substantially below 100%. Taking these factors into account, S&P's analysis indicates that the credit enhancement available to classes B-1, B-2, C-1, C-2, and D no longer supports their previous ratings. As such, S&P lowered its ratings on these classes to levels that, in its view, reflect the current likelihood of principal and interest repayment to noteholders. The most recent rating action on Melchior CDO I took place on May 20, when S&P placed the class B-1, B-2, C-1, C-2, and D notes on CreditWatch negative. Melchior CDO I, which is managed by Henderson Global Investors Ltd., is a cash flow collateralized debt obligation of loans, high-yield bonds, and structured finance securities. The transaction closed in July 2001 and is currently in its amortizing period. Ratings List Melchior CDO I S.A. EUR404 Million Fixed- And Floating-Rate Notes, Subordinated, and Combination Notes Ratings Lowered and Removed From CreditWatch Negative Rating ------ Class To From ----- -- ---- B-1 BBB- AA/Watch Neg B-2 BBB- AA/Watch Neg C-1 CCC- BB-/Watch Neg C-2 CCC- BB-/Watch Neg D CCC- B-/Watch Neg Rating Affirmed Class Rating ----- ------ A-1 AAA ===================== N E T H E R L A N D S ===================== AEGON NV: Fitch Downgrades Ratings on Hybrid Instruments to 'BB' ---------------------------------------------------------------- Fitch Ratings has downgraded AEGON N.V.'s and some of its subsidiaries' hybrid debt instruments to 'BB' from 'BBB+' and maintained them on Rating Watch Negative. The downgrade and RWN reflect Fitch's review of the risk of coupon deferral on these instruments, taking into account recent developments -- in particular comments published by the European Commission on the concept of 'burden sharing' for state-aided financial institutions. AEGON received EUR3 billion of support from the Dutch government in December 2008 and is at an early stage of discussions with the EC over the "viability plan" it has submitted in line with the European Union's state aid rules. Fitch notes and views positively AEGON's recent raising of EUR1bn of equity, with which it intends to repay EUR1bn of the government support. Fitch will publish a comment on the issue of burden sharing shortly and will monitor the ratings implications of AEGON's viability plan and ongoing discussions with the EC. The rating action on AEGON's hybrids is consistent with actions taken or expected on the hybrids of several financial institutions that are subject to government support. AEGON's ratings are: AEGON N.V. -- Long-term IDR 'A+'; Outlook Negative -- Senior unsecured debt 'A' -- Subordinated debt 'A-' -- Perpetual capital securities downgraded to 'BB' from 'BBB+'; remain on RWN. -- Short-term IDR and commercial paper programme 'F1' These AEGON subsidiary companies' Long-term IFS ratings are 'AA'; all the companies have a Negative Outlook: -- Merrill Lynch Life Insurance Company; -- ML Life Insurance Company of New York; -- Monumental Life Insurance Company; -- Stonebridge Life Insurance Company; -- Transamerica Financial Life Insurance Company; -- Transamerica Life Canada; -- Transamerica Life Insurance Company; -- Transamerica Life International (Bermuda) Ltd.; and -- Western Reserve Life Assurance Co. of Ohio. These AEGON subsidiary companies' Short-term IDR and Short-term IFS ratings are 'F1+': -- Monumental Life Insurance Company; -- Transamerica Financial Life Insurance Company; and -- Transamerica Life Insurance Company. These AEGON subsidiary companies' secured notes programme and outstanding issues are rated 'AA': -- Monumental Global Funding III (Monumental Global Funding III's outstanding issues short-term ratings are 'F1+'); -- Monumental Global Funding II; and -- Monumental Global Funding Ltd. -- Transamerica Corp.: -- Long-term IDR 'A+'; Negative Outlook -- Transamerica Capital II, Transamerica Capital III: -- Trust preferred stock downgraded to 'BB' from 'BBB+'; remains on RWN AEGON Funding Company LLC: -- Commercial paper 'F1' -- Senior debt 'A' These AEGON subsidiary companies' senior debt and medium-term notes are rated 'A': -- Transamerica Finance Corp. -- Commonwealth General Corporation. ASTIR BV: S&P Cuts Ratings on Series 27 and Series 31 Notes to CC ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its credit ratings on three European synthetic collateralized debt obligation series issued by Astir B.V. Specifically, S&P: -- Downgraded and withdrew its rating on series 27 and 31; and Withdrew S&P's ratings on series 30. Based on S&P's assessment on the credit enhancement in the reference portfolios of series 27 and 31, S&P believes that the 'CC' rating for both series is more appropriate. S&P withdrew the ratings assigned to these series following the arranger's early termination of the notes. Ratings List Astir B.V. Ratings Lowered and Withdrawn EUR10 Million Limited-Recourse Secured Variable-Rate Notes Series 27 (Pearl CDO 1) Rating ------ To From -- ---- CC CCC- NR CC EUR10 Million Limited-Recourse Secured Variable-Rate Notes Series 31 Rating ------ To From -- ---- CC CCC- NR CC Rating Withdrawn EUR10 Million Limited-Recourse Secured Variable-Rate Notes Series 30 Rating ------ To From -- ---- NR CCC- DALRADIAN EUROPEAN: Moody's Cuts Rating on Class E Notes to 'Caa3' ------------------------------------------------------------------ Moody's Investors Service has downgraded its ratings of five classes of notes and two combination notes issued by Dalradian European CLO III B.V. The Class A-1 and the Variable Funding Notes remain Aaa mainly due to the current over collateralization. This transaction is a managed high yield collateralized loan obligation related to a portfolio of senior loans, mezzanine loans, second lien loans and high yield bonds. The rating actions reflects Moody's revised assumptions with respect to default probability and the calculation of the Diversity Score as described in the press release dated February 4, 2009, titled "Moody's updates key assumptions for rating CLOs." These revised assumptions have been applied to all corporate credits in the underlying portfolio, the revised assumptions for the treatment of ratings on "Review for Possible Downgrade", "Review for Possible Upgrade", or with a "Negative Outlook" being applied to those corporate credits that are publicly rated. Moody's also notes that a material proportion of the collateral pool consists of debt obligations whose credit quality has been assessed through Moody's Credit Estimates. As credit estimates do not carry credit indicators such as ratings reviews and outlooks, a stress of a quarter notch-equivalent assumed downgrade was applied to each of these estimates. According to Moody's, the rating actions taken on the notes are also a result of credit deterioration of the underlying portfolio. This is observed in, among other measures as per Trustee Report dated 30 June 2009, a decline in the average credit rating as measured through the weighted average rating factor (currently 2564), an increase in the amount of defaulted securities (currently approximately 10% of the portfolio), an increase in the proportion of securities from issuers rated Caa1 and below (currently 5.57% of the portfolio), and a failure of some Par Value tests. Moody's also performed a sensitivity analysis, including amongst others, a further decline in portfolio WARF quality combined with a decrease in the expected recovery rates. Due to the impact of all the aforementioned stresses, key model inputs used by Moody's in its analysis, such as par, weighted average rating factor, and weighted average recovery rate, may be different from trustee's reported numbers. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. Moody's initially analyzed and continues to monitor this transaction using primarily the methodology and its supplements for cash flow CLOs as described in Moody's Special Reports and press releases: -- Moody's Approach to Rating Collateralized Loan Obligations (August 2009) The rating actions are: Dalradian European CLO III B.V.: -- Class A2 Senior Secured Floating Rate Notes due 2023, Downgraded to Aa1; previously on March 4, 2009 Aaa Placed Under Review for Possible Downgrade -- Class B Deferrable Secured Floating Rate Notes due 2023, Downgraded to A3; previously on March 4, 2009 Aa2 Placed Under Review for Possible Downgrade -- Class C Deferrable Secured Floating Rate Notes due 2023, Downgraded to Ba2; previously on March 17, 2009 Downgraded to Baa3 and Placed Under Review for Possible Downgrade -- Class D Deferrable Secured Floating Rate Notes due 2023, Downgraded to B3; previously on March 17, 2009 Downgraded to B1 and Placed Under Review for Possible Downgrade -- Class E Deferrable Secured Floating Rate Notes due 2023, Downgraded to Caa3; previously on March 17, 2009 Downgraded to Caa1 and Placed Under Review for Possible Downgrade -- Class W Combination Notes due 2023, Downgraded to Ba3; previously on March 4, 2009 Baa1 Placed Under Review for Possible Downgrade -- Class X Combination Notes due 2023, Downgraded to Baa2; previously on March 4, 2009 A3 Placed Under Review for Possible Downgrade DUCHESS IV: S&P Puts 'BB'-Rated Class E Notes on Watch Negative --------------------------------------------------------------- Standard & Poor's Rating Services placed on CreditWatch negative its credit ratings on 23 tranches issued in seven European cash flow collateralized debt obligation transactions. This follows S&P's preliminary review of how recent deterioration in collateral credit quality has affected cash flow CDOs. Generally, in the affected transactions, S&P has observed an increase in the share of assets rated below 'B-' as well as assets S&P treat as nonperforming in its analysis (those rated 'CC', 'SD' {selective default}, and 'D'). A number of transactions have also reported breaches of their overcollateralization tests. In S&P's opinion, these factors increase the risk that cash flows may be insufficient to fully repay certain classes of notes, putting downward pressure on the ratings. In determining whether to place a CDO tranche rating on CreditWatch negative, S&P consider a number of factors, including but not limited to: The percentage of assets (including any change to this percentage) rated below 'B-' based on S&P's calculation, and the percentage of defaults already in the portfolios; S&P's rated overcollateralization metric, which provides an estimate of rating stability for cash CDO tranches based on output from S&P's CDO Evaluator model and a simplified cash flow analysis; Trends in performance results across similar transactions; and The results of S&P's CDO Monitor test. S&P will monitor the transactions' performance and perform further cash flow analyses before resolving these CreditWatch placements in due course. Ratings List Ratings Placed on Creditwatch Negative Leopard CLO II B.V. EUR375 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- C BBB/Watch Neg BBB D BB/Watch Neg BB Jubilee CDO IV B.V. EUR410 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- C A-/Watch Neg A- D-1 BBB/Watch Neg BBB D-2 BBB/Watch Neg BBB E BB/Watch Neg BB E-1 BB/Watch Neg BB Duchess IV CLO B.V. EUR525 Million Secured Floating-Rate Notes Rating ------ Class To From ----- -- ---- D BBB-/Watch Neg BBB- E BB/Watch Neg BB Jubilee CDO V B.V. EUR555 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- C A/Watch Neg A D-1 BBB/Watch Neg BBB D-2 BBB/Watch Neg BBB European Enhanced Loan Fund S.A. EUR400 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- D-1 BBB-/Watch Neg BBB- D-2 BBB-/Watch Neg BBB- D-3 BBB-/Watch Neg BBB- D-4 BBB-/Watch Neg BBB- Eaton Vance CDO VII PLC EUR260 Million And $174 Million Secured Floating-Rate Deferrable Notes Rating ------ Class To From ----- -- ---- C-1 A/Watch Neg A C-2 A/Watch Neg A Panther CDO III B.V. EUR401.65 Million Fixed- And Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B AA-/Watch Neg AA- C1 A-/Watch Neg A- C2 A-/Watch Neg A- Q Combo A-/Watch Neg A- ELM BV: Moody's Junks Ratings on Four Classes of Notes ------------------------------------------------------ Moody's Investors Service has downgraded its ratings of seven classes of notes issued by ELM BV. The transaction is a managed synthetic CDO referencing a portfolio of corporate names. The rating action is a response to credit deterioration in the underlying portfolio which includes Ambac Finanical Group Inc and CIT which were recently downgraded multiple notches. Moody's monitors this transaction using primarily the methodology and its supplements for corporate synthetic CDOs as described in Moody's Special Reports and press releases below: -- Moody's Approach to Rating Corporate Collateralized Synthetic Obligations (April 2009) The rating actions are: ELM B.V. - Morro Bay -- US$4.6M Series 59-Class JSS US$ 4,600,000 due 2013 Notes, Downgraded to Ba1; previously on March 25, 2009 Downgraded to Baa1 -- US$18M Series 65-Class H US$18,000,000 due 2016 Notes, Downgraded to Caa3; previously on March 25, 2009 Downgraded to B3 -- US$125M Series 66-Class JSS US$125,000,000 due 2016 Notes, Downgraded to Baa2; previously on March 25, 2009 Downgraded to A2 -- US$2M Series 67-Class J US$2,000,000 due 2016 Notes, Downgraded to Caa2; previously on March 25, 2009 Downgraded to B1 -- US$9.5M Series 75-Class G US$9,500,000 due 2016 Notes, Downgraded to Caa1; previously on March 25, 2009 Downgraded to Ba3 -- EUR10M Series 81-Class JSS EUR10,000,000 due 2016 Notes, Downgraded to Baa3; previously on March 25, 2009 Downgraded to Baa1 -- US$10M Series 83-Class L US$10,000,000 Short Strategy Linked due 2016 Notes, Downgraded to Caa1; previously on March 25, 2009 Downgraded to Ba3 HEAD NV: Moody's Changes Probability of Default Rating to Caa1/LD ----------------------------------------------------------------- Moody's Investors Service has changed the Probability of Default Rating of Head N.V. to Caa1/LD (Limited Default) from Ca, raised the Corporate Family Rating to Caa1 from Ca and the senior unsecured rating on the EUR135 million notes issued by HTM Sport- und Freizeitgeräte AG due 2014 to Caa3 (LGD5, 86%) from Ca. The outlook on the ratings is negative. Moody's views the completion of the debt exchange as a distressed exchange for the particular securities involved. This is reflected with an LD designation indicating a limited default. Moody's expects to remove the LD designation from the PDR after approximately three business days. Moody's understands that approximately 75% of existing bond holders have accepted the exchange and this will result in overall debt reduction by approximately EUR42 million. The exchange proposal was completed on August 14, 2009 with approximately 75% of note holders, equivalent to EUR85.7 million of outstanding notes, accepting the exchange. Note holders who tendered their notes will receive approximately EUR43.7 million of newly issued Senior secured notes and EUR22.5 million in Head N.V. ordinary shares. Despite the reduction in financial debt resulting from the exchange, the PDR and CFR of Caa1 reflects Moody's view that the company's operating performances are likely to remain subdued over the short to medium term due to ongoing pressure on consumer spending across Europe and North America. The company's top line is expected to remain challenged by the sustained price competition in both the tennis and ski markets, and by pressure on volumes due to the general economic downturn and the winter sports market's steady move towards the rental business. In addition, although the rating agency recognizes management's effort in reducing operating leverage by increasing production in low-cost countries and outsourcing activity, a positive impact on profitability is not expected in the short term. The negative outlook reflects Moody's view that pressure on top line and margin might offset the reduction in financial debt which could challenge an improvement of credit metrics. The outlook reflects also the modest liquidity profile of the group. The outlook could be moved to stable if the company shows signs of improvements in operating margins and success in weathering current difficult market conditions. The new notes will be secured on a pool of inventories, receivables, and cash under certain circumstances, will offer a coupon of 10% and mature in 2012, although the Group has the right to extend the maturity to 2014, in line with the existing senior unsecured notes. The pool of assets offered as a collateral will have to remain at all times greater than the amount of the new senior secured notes. Rating actions: Issuer: Head N.V. -- Probability of Default Rating, moved to Caa1/LD from Ca -- Corporate Family Rating, moved to Caa1 from Ca Issuer: HTM Sport- und Freizeitgerate AG -- Senior Unsecured Regular Bond, moved to Caa3 (LGD5, 86%) from Ca, The last rating action on Head was on April 21, 2009, when Moody's downgraded the company's CFR, PDR and the senior unsecured rating on notes to Ca following the company's announcement of its debt exchange offer. Located in the Netherlands, Head is a leading global manufacturer and marketer of branded sporting goods serving the skiing, tennis and diving markets, with strong market positions and a good reputation for product innovation. The company reported revenues of EUR326 million at FYE December 2008. JUBILEE CDO: S&P Puts Two 'BB'-Rated Notes on Watch Negative ------------------------------------------------------------ Standard & Poor's Rating Services placed on CreditWatch negative its credit ratings on 23 tranches issued in seven European cash flow collateralized debt obligation transactions. This follows S&P's preliminary review of how recent deterioration in collateral credit quality has affected cash flow CDOs. Generally, in the affected transactions, S&P has observed an increase in the share of assets rated below 'B-' as well as assets S&P treat as nonperforming in its analysis (those rated 'CC', 'SD' {selective default}, and 'D'). A number of transactions have also reported breaches of their overcollateralization tests. In S&P's opinion, these factors increase the risk that cash flows may be insufficient to fully repay certain classes of notes, putting downward pressure on the ratings. In determining whether to place a CDO tranche rating on CreditWatch negative, S&P consider a number of factors, including but not limited to: The percentage of assets (including any change to this percentage) rated below 'B-' based on S&P's calculation, and the percentage of defaults already in the portfolios; S&P's rated overcollateralization metric, which provides an estimate of rating stability for cash CDO tranches based on output from S&P's CDO Evaluator model and a simplified cash flow analysis; Trends in performance results across similar transactions; and The results of S&P's CDO Monitor test. S&P will monitor the transactions' performance and perform further cash flow analyses before resolving these CreditWatch placements in due course. Ratings List Ratings Placed on Creditwatch Negative Leopard CLO II B.V. EUR375 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- C BBB/Watch Neg BBB D BB/Watch Neg BB Jubilee CDO IV B.V. EUR410 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- C A-/Watch Neg A- D-1 BBB/Watch Neg BBB D-2 BBB/Watch Neg BBB E BB/Watch Neg BB E-1 BB/Watch Neg BB Duchess IV CLO B.V. EUR525 Million Secured Floating-Rate Notes Rating ------ Class To From ----- -- ---- D BBB-/Watch Neg BBB- E BB/Watch Neg BB Jubilee CDO V B.V. EUR555 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- C A/Watch Neg A D-1 BBB/Watch Neg BBB D-2 BBB/Watch Neg BBB European Enhanced Loan Fund S.A. EUR400 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- D-1 BBB-/Watch Neg BBB- D-2 BBB-/Watch Neg BBB- D-3 BBB-/Watch Neg BBB- D-4 BBB-/Watch Neg BBB- Eaton Vance CDO VII PLC EUR260 Million And $174 Million Secured Floating-Rate Deferrable Notes Rating ------ Class To From ----- -- ---- C-1 A/Watch Neg A C-2 A/Watch Neg A Panther CDO III B.V. EUR401.65 Million Fixed- And Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B AA-/Watch Neg AA- C1 A-/Watch Neg A- C2 A-/Watch Neg A- Q Combo A-/Watch Neg A- LEOPARD CLO: S&P Puts 'BB'-Rated Class D Notes on Watch Negative ---------------------------------------------------------------- Standard & Poor's Rating Services placed on CreditWatch negative its credit ratings on 23 tranches issued in seven European cash flow collateralized debt obligation transactions. This follows S&P's preliminary review of how recent deterioration in collateral credit quality has affected cash flow CDOs. Generally, in the affected transactions, S&P has observed an increase in the share of assets rated below 'B-' as well as assets S&P treat as nonperforming in its analysis (those rated 'CC', 'SD' {selective default}, and 'D'). A number of transactions have also reported breaches of their overcollateralization tests. In S&P's opinion, these factors increase the risk that cash flows may be insufficient to fully repay certain classes of notes, putting downward pressure on the ratings. In determining whether to place a CDO tranche rating on CreditWatch negative, S&P consider a number of factors, including but not limited to: The percentage of assets (including any change to this percentage) rated below 'B-' based on S&P's calculation, and the percentage of defaults already in the portfolios; S&P's rated overcollateralization metric, which provides an estimate of rating stability for cash CDO tranches based on output from S&P's CDO Evaluator model and a simplified cash flow analysis; Trends in performance results across similar transactions; and The results of S&P's CDO Monitor test. S&P will monitor the transactions' performance and perform further cash flow analyses before resolving these CreditWatch placements in due course. Ratings List Ratings Placed on Creditwatch Negative Leopard CLO II B.V. EUR375 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- C BBB/Watch Neg BBB D BB/Watch Neg BB Jubilee CDO IV B.V. EUR410 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- C A-/Watch Neg A- D-1 BBB/Watch Neg BBB D-2 BBB/Watch Neg BBB E BB/Watch Neg BB E-1 BB/Watch Neg BB Duchess IV CLO B.V. EUR525 Million Secured Floating-Rate Notes Rating ------ Class To From ----- -- ---- D BBB-/Watch Neg BBB- E BB/Watch Neg BB Jubilee CDO V B.V. EUR555 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- C A/Watch Neg A D-1 BBB/Watch Neg BBB D-2 BBB/Watch Neg BBB European Enhanced Loan Fund S.A. EUR400 Million Secured Floating- And Fixed-Rate Notes Rating ------ Class To From ----- -- ---- D-1 BBB-/Watch Neg BBB- D-2 BBB-/Watch Neg BBB- D-3 BBB-/Watch Neg BBB- D-4 BBB-/Watch Neg BBB- Eaton Vance CDO VII PLC EUR260 Million And $174 Million Secured Floating-Rate Deferrable Notes Rating ------ Class To From ----- -- ---- C-1 A/Watch Neg A C-2 A/Watch Neg A Panther CDO III B.V. EUR401.65 Million Fixed- And Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B AA-/Watch Neg AA- C1 A-/Watch Neg A- C2 A-/Watch Neg A- Q Combo A-/Watch Neg A- =========== P O L A N D =========== LUKAS BANK: Moody's Cuts Bank Financial Strength Rating to 'D+' --------------------------------------------------------------- Moody's Investors Service has downgraded the bank financial strength rating of Lukas Bank to D+ (mapping to a BCA of Ba1) from C- (which mapped to a BCA of Baa2). Concurrently, Lukas's long- and short-term deposit ratings were downgraded to A3/Prime-2 from A2/Prime-1 respectively. All Lukas's ratings now carry negative outlook. At the same time, the issuer rating of Poland's leading leasing financing company Europejski Fundusz Leasingowy was downgraded to Baa1 with negative outlook, from A2. Lukas Bank and EFL are Polish subsidiaries of France's Crédit Agricole SA (CASA -- rated Aa1/P-1/B-). "The downgrades conclude the reviews initiated on May 26, 2009 and reflect Moody's view that the deterioration in the Polish operating environment is putting pressure on Lukas' and EFL's financial fundamentals and post-provision profitability," says Irakli Pipia, a Moody's Assistant Vice President - Analyst, and lead analyst for these institutions. With the Polish economy having entered a downturn, the likelihood of rising unemployment can be expected to increase losses in Lukas' unsecured consumer portfolios. "Moody's also highlights that the risk profile of corporate entities -- especially in the SME segment -- has been rising since the end of the last year, and affecting the pre- and post-provisioning revenues of EFL," Mr. Pipia added. Declining profitability trends, resulting from the weakening operating environment, have already been evidenced in the financial results of most of the Polish banks rated by Moody's. A marked deterioration in asset quality indicators has also become apparent, prompting most of the banks to increase their provisioning levels, which has contributed to a considerable contraction in their net profitability in 2009. As the market leaders in their respective segments both Lukas and EFL have been susceptible to these general trends. On the other hand, the general system-wide funding position remains relatively comfortable for most of the rated banks, with customer deposits funding close to 100% of loan books. However, Moody's observed that the pricing of, and intense competition for funding, will significantly constrain the growth aspirations and profitability of specialized entities, such as Lukas and EFL (as a non-depository institution), which have a larger proportion of wholesale funding reliance compared to their retail banking peers. The rating agency added however, that being controlled by CASA is likely to prove of significant benefit to Lukas and EFL in ensuring ongoing access to the funding they require. Lukas Bank As Poland's largest specialized consumer lender, which experienced rapid loan portfolio growth rates in the recent past, Lukas has been affected by deterioration in the domestic economic environment. Moody's said that it expects a reduction in Lukas's net profitability as a result of contraction in net interest margins and significantly increased cost of risk. Although the expense base has been managed conservatively, efficiency ratios will come under pressure due to higher funding costs and lower growth prospects. The bank's Tier 1 ratio has declined due to rapid growth over the past three years, and reduced internal capital creation prospects are likely to constrain the ability to restore this to a higher level. In addition, further pressure on the bank's fundamentals could materialize if there is continued contraction in consumer lending coupled with low recovery prospects on the unsecured loan book. This explains Moody's decision to assign a negative outlook to the bank's BFSR. However, Moody's stress-test results of Lukas's granular consumer portfolio also indicate that the bank's historically high provisioning levels could mitigate to some extent the impact of potential losses on its capital. Moody's also considers that due to strong risk management input from its parent CASA as well as support in funding, Lukas's rating is comfortably placed at A3. Moody's very high expectation of support from CASA, thus results in a four notch uplift for the long-term deposit rating, from Lukas' Ba1 BCA. The negative outlook on the bank's long-term ratings reflects the combination of the negative outlooks on the parental and its own BFSRs. Europejski Fundusz Leasingowy The financial fundamentals of EFL (the largest leasing company in Poland) have been put under pressure by increasing delinquencies in the Polish leasing market. The most affected segment in EFL's portfolio was its heavy-vehicles portfolio where the market fell substantially in the second half of 2008. As a non-deposit-taking institution, EFL has higher leverage ratios and is dependent on market funding for its operations. Although Moody's notes that most of the existing funding limits have been maintained and expanded, the rating agency considers that in this environment EFL's funding profile will be a constraining factor to its growth prospects. Given these factors coupled with EFL's specialised and relatively concentrated loan portfolio, Moody's considers that there is additional negative pressure on EFL's financial fundamentals from the current downturn, which reflects the rating agency's negative outlook on the rating. Similar to CASA's banking subsidiary, Moody's consider that a four notch uplift, from EFL's Ba2 BCA, to its Baa1 Issuer Rating, is justified, due to the very high expectation of parental support from CASA. Leasing represents one of the core products for the group and CASA's financial and strategic assistance is evidenced by direct funding and back-up facilities provided to EFL. The negative outlook on EFL's issuer rating also reflects the negative outlook on the parental BFSR. Moody's has incorporated expected losses on bank loan portfolios into its ratings for some time, but the weight that it attaches to certain rating considerations, particularly capital and future earnings prospects, has been increased to better reflect the present conditions. This is discussed in Moody's Special Comment entitled "Calibrating Bank Ratings in the Context of the Global Financial Crisis", published in February 2009. Moody's last rating action on Lukas Bank and Europejski Fundusz Leasingowy was on 26 May 2009 when Moody's placed the ratings of eight Polish banks -- including those of the aforementioned -- on review for possible downgrade. Headquartered in Wroclaw, Poland, Lukas Bank reported consolidated IFRS net income of PLN234 million (EUR56.8 million) in 2008 and total assets of PLN11.3 billion (EUR2.7 billion) as of December 31, 2008. Headquartered in Wroclaw, Poland, Europejski Fundusz Leasingowy reported consolidated IFRS net income of PLN112 million (EUR26.8 million) in 2008 and total assets of PLN6.4 billion (EUR1.55 billion) as of December 31, 2008. These ratings were downgraded: Lukas Bank: -- Bank financial strength rating to D+ from C- -- Local currency deposit rating to A3 from A2 -- Foreign currency deposit rating to A3 from A2 -- Short-term deposit rating to P-2 from P-1 EFL: -- Issuer rating to Baa1 from A2 =============== P O R T U G A L =============== JET REPUBLIC: Halts Operations on Lack of Funding ------------------------------------------------- Jeremy Lemer at The Financial Times reports that Jet Republic Ltd. has suspended its operations after failing to secure crucial funding. "It is with great regret that I announce that Jet Republic appears to be technically insolvent," the FT quoted Jonathan Breeze, founder and chief executive, as saying in an e-mail sent to his 84 employees on Wednesday. "The business expected to receive funds that have not arrived, nor do we expect them to arrive in the immediate future. We needed these funds in order to continue as an operation. As such, we must stop trading immediately." According to the FT, Jet Republic has halted operations at its Portuguese base but its holding company, with headquarters in Switzerland, remains solvent and the company said yesterday it would work with shareholders to protect clients, employees and suppliers. Jet Republic, the FT discloses, has terminated an order from Bombardier Inc. for 110 Learjet 60XR mid-size jets. Jet Republic Ltd. -- http://www.jetrepublic.com/-- is a private aviation company. It typically carries passengers to Europe, the US, Mexico, and the Caribbean, but it also provides special destination service to other parts of the world. =========== R U S S I A =========== ARGUNSKIY MACHINE: Creditors Must File Claims by August 24 ---------------------------------------------------------- Creditors of SUE Argunskiy Machine-Building Plant have until August 24, 2009, to submit proofs of claims to: V. Shabunin Insolvency Manager Office 525 Lenina Str. 392 355000 Stavropol Russia The Arbitration Court of Chechnya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?77–825/08. The Debtor can be reached at: SUE Argunskiy Machine-Building Plant Dzerzhinskogo Str. 23 Argun Russia BELOMORSKAYA WOOD: Creditors Must File Claims by August 24 ---------------------------------------------------------- Creditors of LLC Belomorskaya Wood-Processing Company have until August 24, 2009, to submit proofs of claims to: A. Belyaninov Temporary Insolvency Manager Prospect Lenina 28-37 185035 Petrozavodsk Russia The Arbitration Court of Karelia commenced bankruptcy supervision procedure. The case is docketed under Case No. ?26–1648/2009. BSK-STROY LLC: Creditors Must File Claims by August 24 ------------------------------------------------------ Creditors of LLC BSK-Stroy (TIN 3444158059, PSRN 1083444003378) (Construction) have until August 24, 2009, to submit proofs of claims to: D. Shevchenko Temporary Insolvency Manager Post User Box 3544 400066 Volgograd Russia The Arbitration Court of Volgogradskaya will convene on October 29, 2009 to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?12–11365/09. The Debtor can be reached at: LLC BSK-Stroy Lenina Str. 9 Volgograd Russia BTA BANK: Moody's Junks Long-Term Deposit Ratings From 'B3' ----------------------------------------------------------- Moody's Investors Service has downgraded to Caa2 from B3 the long- term local and foreign currency deposit ratings and foreign currency senior unsecured debt rating of BTA Bank (Russia); the bank's financial strength rating was downgraded to E from E+. Concurrently, Moody's Interfax Rating Agency downgraded the National Scale Rating of BTA Russia to B3.ru from Baa3.ru. At the same time, Moody's and Moody's Interfax announced that they would withdraw all ratings of BTA Bank (Russia) for business reasons. BTA Russia's global deposit and debt ratings had a negative outlook, while the outlook on the BFSR was stable. The bank's Not-Prime short-term local and foreign currency deposit ratings were affirmed before the withdrawal of Moody's ratings. The National Scale Rating carries no specific outlook. Moscow-based Moody's Interfax is majority-owned by Moody's, a leading global rating agency. According to Moody's, the rating downgrade reflects the prolonged deterioration of BTA Russia's financial fundamentals, in particular its liquidity and asset quality, and growing uncertainty about the bank's business model. Moody's and Moody's Interfax's withdrawal of all the aforementioned ratings of BTA Russia for business reasons follows the bank's official request. BTA Russia's loan participation notes previously rated by Moody's remain outstanding in the amount of US$81.8 million maturing on December 21, 2009. Moody's notes that it will no longer maintain rating or research coverage on these loan participation notes. There is no other Moody's rated debt outstanding for BTA Russia. Moody's most recent rating action on BTA Bank (Russia) was taken on February 25, 2009, when the rating agency downgraded the bank's deposit and debt ratings to B3 from B1 and assigned a negative outlook on all of the bank's global scale ratings. Headquartered in Moscow, BTA Bank (Russia) reported total IFRS assets of US$2.4 billion as at YE2008 (YE2007: US$1.4 billion) and total shareholders' equity of US$475 million (YE2007: US$268 million). The bank reported net profits for 2008 of US$5.2 million, compared to US$26.0 million a year earlier. DIZAIN-STROY LLC: Creditors Must File Claims by August 24 --------------------------------------------------------- Creditors of LLC Dizain-Stroy (TIN 3447023395, PSRN 1053478038481, RVC 344701001) (Construction) have until August 24, 2009, to submit proofs of claims to: V. Pismenny Insolvency Manager Post User Box 1883 Ladygina Str. 2 400017 Volgograd Russia The Arbitration Court of Volgogradskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?12–5993/2009. The Debtor can be reached at: LLC Dizain-Stroy Promyslovaya Str. 15 400057 Volgograd Russia DON-LES LLC: Creditors Must File Claims by August 24 ---------------------------------------------------- Creditors of LLC Don-Les-Stroy (TIN 6168018344, RCV 616801001) (Furniture Manufacturing)have until August 24, 2009, to submit proofs of claims to: Yu.Galadzheva Temporary Insolvency Manager Apt. 28 Turgenevskaya Str. 8 344002 Rostov-on-Don Russia The Arbitration Court of Rostovskaya will convene at 2:30 p.m. on September 15, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?53–2419/2009. The Debtor can be reached at: LLC Don-Les-Stroy Bukvennaya Str. 53/144/27 Rostov-on-Don Russia EVRAZ GROUP: Delong Bid Fails; To Explore "Cheaper" China Options ----------------------------------------------------------------- Yuriy Humber at Bloomberg News reports that Evraz Group SA said it will explore "cheaper" options to enter China after its US$1.5 billion bid for Delong Holdings Ltd. failed. Bloomberg relates Evraz said the company's option to raise its stake in Delong, a rolling steel producer and trader, to 51% from the current 10% lapsed after it failed to get antitrust approval from Chinese authorities. "We saw that the option to gain control wasn't happening as Chinese regulators wouldn't consider it," Bloomberg quoted Alexander Boreyko, head of investor relations at Evraz, as saying. "We're looking at several options for a cheaper expansion in China, which is a market we're still interested in." According to Bloomberg, the lapse of the Delong option may help Evraz as it faces almost US$9 billion of debt payments after a two-year, US$8 billion shopping spree for assets in the U.S., South Africa, and Ukraine. Mr. Boreyko told Bloomberg the Russian steelmaker didn’t plan on making the payment for Delong this year. Evraz Group SA. -- http://www.evraz.com/-- is a vertically integrated steel and mining businesses with operations based in the Russian Federation, the United States, Canada, Ukraine, Czech Republic, Italy and South Africa. Evraz’s business is divided into three segments: steel production segment, comprising the production and sale of semi-finished and finished steel products, coke and coking products, and refractory products; the mining segment, comprising the production, enrichment and sale of iron ore and coal, and the vanadium segment, comprising the production and sale of vanadium products. Other operations include management, logistics and supporting activities. During the year ended December 31, 2008, Evraz produced 17.7 million tonnes of crude steel. Evraz’s assets comprise of nine steel plants, five iron ore mining and processing facilities and coal mining assets. During 2008, Evraz acquired Claymont Steel Holdings, In.c., General Scrap Inc and Palmrose Limited. * * * As reported in the Troubled Company Reporter-Europe on Aug. 3, 2009, Fitch Ratings downgraded Russia-based metals and mining company Evraz Group SA's Long-term foreign currency Issuer Default Rating and senior unsecured rating to 'BB-' from 'BB' respectively. Fitch maintained the Rating Watch Negative on Evraz. Fitch said the downgrade reflects Fitch's view that measures undertaken by Evraz's management to-date have not been sufficient to offset a fall in revenues following the significant decrease in global demand and prices for steel products, especially in the construction and infrastructure industry to which Evraz is most exposed. The RWN continues to reflect risks of potential covenant breaches under the company's various facilities. GROS-WOOD CJSC: Creditors Must File Claims by August 24 ------------------------------------------------------- Creditors of CJSC Gros-Wood (Construction Materials) have until August 24, 2009, to submit proofs of claims to: S. Cherkasova Insolvency Manager K. Marksa Str. 21 660049 Krasnoyarsk Russia The Arbitration Court of Krasnoyarskiy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?33–8417/2009. The Debtor can be reached at: CJSC Gros-Wood Krasnoyarskaya Str. 80a Zheleznogorsk 662971 Krasnoyarskiy Russia KERAMOS LLC: Creditors Must File Claims by August 24 ---------------------------------------------------- Creditors of LLC Keramos (TIN 5904090670, PSRN 1025900899166) (Brick Plant) have until August 24, 2009, to submit proofs of claims to: A. Zlotnikov Temporary Insolvency Manager Post User Box 9201 614070 Perm Russia The Arbitration Court of Permskiy will convene on December 9, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?50–11544/2009. The Debtor can be reached at: LLC Keramos Zheleznodorozhnaya Str. 22 Novye Lyady 614105 Perm Russia KRASNOPOLYANSKAYA PAPER: Creditors Must File Claims by August 24 ---------------------------------------------------------------- Creditors of LLC Krasnopolyanskaya Paper Mill (TIN 4421004760, PSRN 1034486260863) have until August 24, 2009, to submit proofs of claims to: V. Ivanov Temporary Insolvency Manager Building 4a 3-y Rabfakovskiy pereulok 5 192012 Saint-Petersburg Russia The Arbitration Court of Kostromskaya will convene at 10:00 a.m. on October 22, 2009, to hear bankruptcy supervision procedure. T he case is docketed under Case No. ?31–2254/2009. The Debtor can be reached at: LLC Krasnopolyanskaya Paper Mill Krasnaya Polyana Ostrovskoy Kostromskaya Russia MOBIL-SPETS LLC: Creditors Must File Claims by August 24 -------------------------------------------------------- Creditors of LLC Mobil-Spets-Stroy (TIN 5615019291, RCV 561501001) (Construction) have until August 24, 2009, to submit proofs of claims to: M. Abrosimov Insolvency Manager Gaya Str. 23a 460000 Orenburg Russia The Arbitration Court of Orenburgskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?47–3999/2009. The Court is located at: The Arbitration Court of Orenburgskaya Volodarskogo Str. 39 460046 Orenburg Russia The Debtor can be reached at: LLC Mobil-Spets-Stroy Soyuznaya Str. 16 Orsk 462406 Orenburgskaya Russia NOVOSIBIRSK METALLURGIC: Creditors Must File Claims by August 24 ---------------------------------------------------------------- Creditors of OJSC Novosibirsk Metallurgic Plant named after Kuzmin (TIN 5404161429, PSRN 1025401486373) have until August 24, 2009, to submit proofs of claims to: Yu.Petrushchenkov Temporary Insolvency Manager Stantsionnaya Str. 28 630108 Novosibirsk Russia The Arbitration Court of Novosibirskaya will convene at 10:30 a.m. on December 9, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. ?45–11378/2009. The Debtor can be reached at: OJSC Novosibirsk Metallurgic Plant named after Kuzmin Stantsionnaya Str. 28 630108 Novosibirsk Russia ONIKS LLC: Creditors Must File Claims by August 24 -------------------------------------------------- Creditors of LLC Oniks (Construction) have until August 24, 2009, to submit proofs of claims to: I. Shirshov Temporary Insolvency Manager Apt. 103 Entuziastov Str. 7 Belaya Kalitva 347042 Rostovskaya Russia The Arbitration Court of Rostovskaya will convene on October 20, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?53–8146/2009. The Debtor can be reached at: LLC Oniks Office 404 Sotsialisticheskaya Str. 2 Taganrog 347905 Rostovskaya Russia PARFINO LES: Creditors Must File Claims by August 24 ---------------------------------------------------- Creditors of LLC Parfino Les (TIN 5312003310, PSRN 1025302189054) (Lumbering) have until August 24, 2009, to submit proofs of claims to: I. Kozhemyakin Temporary Insolvency Manager Vokzalnaya Str. 1A 180004 Pskov Russia The Arbitration Court of Novgorodskaya commenced bankruptcy supervision procedure. The case is docketed under Case No. ?44–1857/2009. SIB-PROM LLC: Creditors Must File Claims by August 24 ----------------------------------------------------- Creditors of LLC Sib-Prom-Stroy (Construction) have until August 24, 2009, to submit proofs of claims to: V. Permikin Temporary Insolvency Manager Post User Box 745 620000 Yekaterinburg Russia The Arbitration Court of Tumenskaya will convene at 9:40 a.m. on October 13, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?70–4067/2009. The Debtor can be reached at: LLC Sib-Prom-Stroy Office 31 Babrynka Str. 69 Tumen 625001 Tumenskaya Russia SIB-STROY LLC: Creditors Must File Claims by August 25 ------------------------------------------------------ Creditors of LLC Sib-Stroy-Sevis (TIN 2223042022, PSRN 1032202063080) (Construction) have until August 25, 2009, to submit proofs of claims to: S. Pupkov Insolvency Manager Post User Box 130 Vorovskogo Str. 140 Barnaul 656002 Altayskiy Russia The Arbitration Court of Altayskiy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ???–3454/2009. The Debtor can be reached at: LLC Sib-Stroy-Sevis A. Petrova Str. 118a Barnaul 656052 Altayskiy Russia SILUR LLC: Creditors Must File Claims by August 24 -------------------------------------------------- Creditors of LLC Silur (TIN 1105015856, PSRN 1031100742771) (Drilling Company)have until August 24, 2009, to submit proofs of claims to: G. Bobkova Insolvency Manager Office 31 Kavalergardskaya Str. 6 191015 Saint-Petersburg Russia The Arbitration Court of Komi commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?29–4402/2009. The Debtor can be reached at: LLC Silur Apt. 12 Building 31 Sosnogorsk Microregion 6 Russia STROY-TRANS LLC: Creditors Must File Claims by August 24 -------------------------------------------------------- Creditors of LLC Stroy-Trans-Servis (TIN 2317049094) (Construction) have until Aug. 24, 2009, to submit proofs of claims to: S. Zaikin Temporary Insolvency Manager Post User Box 84 Kyshtym 456870 Chelyabinskaya Russia The Arbitration Court of Krasnodarskiy will convene at 2:00 p.m. on October 19, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?-32–11832/09– 37/333B. The Debtor can be reached at: LLC Stroy-Trans-Servis Prosveshcheniya Str. 122 Sochi 354340 Krasnodarskiy Russia URAL-STROY-KOMPLEKS: Creditors Must File Claims by August 24 ------------------------------------------------------------ Creditors of LLC Ural-Stroy-Kompleks (TIN 7453155816) (Construction) have until August 24, 2009, to submit proofs of claims to: B. Minigulov Insolvency Manager Apt. 130 Mendeleeva Str. 138 450022 Ufa Russia The Arbitration Court of Chelyabinsk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?-76–24619/2008–48-203. The Debtor can be reached at: LLC Ural-Stroy-Kompleks Prospect Lenina 83 Chelyabinsk Russia URALSKIY FOUNDRY: Creditors Must File Claims by August 24 --------------------------------------------------------- Creditors of LLC Uralskiy Foundry (TIN 5908030746, PRSN 1055904134494) have until August 24, 2009, to submit proofs of claims to: A. Simakov Temporary Insolvency Manager Dekabristov Str. 18-172 Chaykovskiy 617766 Permskiy Russia The Arbitration Court of Permskiy will convene at 10:20 a.m. on December 2, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?50–12767/2009. The Debtor can be reached at: LLC Uralskiy Foundry Krylovskaya Str. 5 Osa Permskiy Russia VOLGA-URAL-STROY: Creditors Must File Claims by August 24 --------------------------------------------------------- Creditors of CJSC Volga-Ural-Stroy (Construction) have until August 24, 2009, to submit proofs of claims to: S. Zhandarov Insolvency Manager Post User Box 14 Balakovo 413840 Saratovskaya Russia The Arbitration Court of Saratovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?-57–19774/08–23. The Debtor can be reached at: CJSC Volga-Ural-Stroy Zelenyy Klin Str. 38 Novouzensk 413362 Saratovskaya Russia =========== S W E D E N =========== MODERNA FORSAKRINGAR: Moody's Cuts Insurance Fin'l Rating to 'Ba1' ------------------------------------------------------------------ Moody's Investors Service announced that it had downgraded the Insurance Financial Strength Rating of Moderna Forsakringar Liv AB to Ba1 and revised the outlook to stable. This rating action concludes the review process initiated on March 3, 2009. Moderna Liv is owned by Chesnara plc, as of July 2009, acquiring the company from Moderna Finance, which in turn was owned by Milestone EHF, an Icelandic investment firm. The rating was placed on review for possible downgrade in March 2009 due to the uncertainty surrounding the future ownership of Moderna Liv following the disclosure that Milestone was selling the Moderna Finance group of companies, of which Moderna Liv was part. Moody's rating review focused on the standalone credit fundamentals of Moderna Liv, as well as the creditworthiness, and commitment to Moderna Liv, of Chesnara. David Masters, Moody's Analyst and lead analyst for Moderna Liv added "While downgrading Moderna Liv, Moody's has maintained an element of parental support to the IFSR of Moderna Liv following its acquisition by Chesnara, driven by Moody's expectations that Chesnara will continue to provide capital support to fund the future growth of the business". Mr. Masters added that the rating downgrade was thus driven primarily by the weakening performance of Moderna Liv at a standalone level, with its Swedish unit linked market share declining to 8.4% at Q1 2009 (YE 2007: 13.5%), together with the continued statutory losses in a challenging operating environment, with the overall life insurance market declining in general. The rating agency added that Chesnara is a listed entity, and in the past few years has enjoyed healthy levels of profitability, relatively low levels of financial leverage and excellent earning coverage, albeit a high dividend payout ratio. Furthermore, the acquisition of Moderna Liv will provide some geographic diversification from its existing UK closed-life operations, although synergies are not expected to be meaningful. The rating agency also noted that positive rating pressure could arise in the event of a meaningful improvement in profitability or market share, if high risk assets fell to below 20% of invested assets, or if the financial fundamentals of Chesnara were to improve materially. Conversely, a failure to improve levels of profitability, a continued decline in market share or deterioration in the willingness/ability of Chesnara to support Moderna could all lead to further negative rating action. Moderna Liv is a Swedish life insurer and, under IFRS at YE2008, reported insurance premium revenue of MSEK 271 and a loss after tax of MSEK 41. This rating was downgraded with a stable outlook: * Moderna Forsakringar Liv AB -- insurance financial strength rating of Ba1 Moody's most recent rating action on Moderna Liv was on March 3, 2009, when the rating of Moderna Liv was placed on review for possible downgrade. ===================== S W I T Z E R L A N D ===================== COMMS ONE: Creditors Must File Claims by August 24 -------------------------------------------------- Creditors of Comms One AG are requested to file their proofs of claim by August 24, 2009, to: Anita Kuhn-Stoeckli Flammbach 1B 5632 Buttwil Switzerland The company is currently undergoing liquidation in Buttwil. The decision about liquidation was accepted at a general meeting held on June 16, 2009. CORPORATE LEGAL: Claims Filing Deadline is August 24 ---------------------------------------------------- Creditors of Corporate Legal AG are requested to file their proofs of claim by August 24, 2009, to: Patrick Hofmanninger Wenigerstrasse 15 9011 St. Gallen Switzerland The company is currently undergoing liquidation in St. Gallen. The decision about liquidation was accepted at an extraordinary general meeting held on March 28, 2009. CRR CENTER: Creditors Must File Claims by August 26 --------------------------------------------------- Creditors of CRR Center GmbH are requested to file their proofs of claim by August 26, 2009, to: CRR Center GmbH Bahnhofstrasse 29 6454 Flueelen Switzerland The company is currently undergoing liquidation in Flueelen. The decision about liquidation was accepted at a shareholders' meeting held on June 22, 2009. EBS EXPERTENBUERO: Claims Filing Deadline is August 24 ------------------------------------------------------ Creditors of EBS Expertenbuero Schuepbach GmbH are requested to file their proofs of claim by August 24, 2009, to: Ulrich Schuepbach Gantrischweg 1 3076 Worb Switzerland The company is currently undergoing liquidation in Worb. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 23, 2009. EFEKA AG: Claims Filing Deadline is August 24 --------------------------------------------- Creditors of Efeka AG are requested to file their proofs of claim by August 24, 2009, to: Efeka AG Grafenauweg 10 6301 Zug Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary general meeting held on April 14, 2009. FS AG: Creditors Must File Claims by August 24 ---------------------------------------------- Creditors of FS AG are requested to file their proofs of claim by August 24, 2009, to: Gianfranco Casciaro Liquidator Zuercherstrasse 499 9015 St. Gallen Switzerland The company is currently undergoing liquidation in St. Gallen. The decision about liquidation was accepted at a general meeting held on June 15, 2009. SAFIMEX AG: Claims Filing Deadline is August 25 ----------------------------------------------- Creditors of Safimex AG are requested to file their proofs of claim by August 25, 2009, to: Safimex AG Grundwiesstr. 2 8700 Kuesnacht Switzerland The company is currently undergoing liquidation in 8700 Küsnacht. The decision about liquidation was accepted at the extraordinary general meeting held on May 18, 2009. TABROT AG: Claims Filing Deadline is August 24 ---------------------------------------------- Creditors of Tabrot AG are requested to file their proofs of claim by August 24, 2009, to: Treuhand AG Gossau Lagerstrasse 4 9201 Gossau Switzerland The company is currently undergoing liquidation in Herisau. The decision about liquidation was accepted at a general meeting held on May 7, 2009. UBS AG: Inks Settlement Pact With IRS Regarding Summons ------------------------------------------------------- UBS AG reported the formal signing of a settlement agreement with the US Internal Revenue Service regarding the John Doe summons issued on July 21, 2008. The summons has been the subject of a civil action in the United States District Court of the Southern District of Florida. The agreement does not call for any payment by UBS. It resolves all issues relating to the alleged breaches of UBS's Qualified Intermediary Agreement with the IRS as set forth in the Notice of Default dated May 15, 2008. As part of the settlement, the parties will promptly file a stipulation with the court to dismiss the enforcement action relating to the John Doe summons. In accordance with the separate agreement between the U.S. and Switzerland, the IRS will submit a request for administrative assistance pursuant to the existing US-Switzerland Double Taxation Treaty to the Swiss Federal Tax Administration (SFTA). This request will seek information relating to certain accounts of U.S. persons maintained at UBS in Switzerland. It is expected that approximately 4,450 accounts will be provided to the SFTA in response to this treaty request. The SFTA will decide which of those accounts should be disclosed to the IRS, and such decisions will be subject to judicial review. UBS is required to provide information on the accounts covered by the treaty request to the SFTA and to send notices to affected U.S. persons encouraging them to take advantage of the IRS's voluntary disclosure practice and to instruct UBS to send their account information and documentation to the IRS. The U.S. government will withdraw the John Doe summons with prejudice as to all accounts not covered by the treaty request no later than December 31, 2009, provided that UBS has complied with those obligations that are required to be performed by that date. The U.S. government will withdraw the John Doe summons with prejudice as to the remaining accounts -- those subject to the treaty request -- no later than August 24, 2010, upon the actual or anticipated delivery to the IRS of information relating to accounts covered by the treaty request that does not differ significantly from the expected results. In addition, the summons will be withdrawn with prejudice as to those remaining accounts if at any time on or after January 1, 2010, the IRS has received information relating to at least 10,000 accounts of U.S. persons maintained at UBS in Switzerland. The sources of the information include, in addition to the treaty request itself, the IRS's voluntary disclosure practice, client instructions to UBS to send account information to the IRS and the Deferred Prosecution Agreement. If neither of these events were to occur by August 24, 2010, the two governments would confer and consult in order to consider alternative mechanisms for achieving the expected levels of account information exchange expected to occur through the treaty request. Possible measures will not impose any financial or new, non-financial obligations on UBS. If these efforts were not successful, the John Doe summons could remain in place beyond August 24, 2010, as to the portion of the accounts covered by the treaty request that have not otherwise been disclosed to the IRS. UBS Chairman Kaspar Villiger said, "This agreement helps resolve one of UBS's most pressing issues. I am confident that the agreement will allow the bank to continue moving forward to rebuild its reputation through solid performance and client service. UBS welcomes the fact that the information-exchange objectives of the settlement can be achieved in a lawful manner under the existing treaty framework between Switzerland and the United States." Josh Fineman and Elena Logutenkova at Bloomberg News reports that the Swiss government said it will sell its 6 billion-franc investment in UBS. The government gave a mandate to three Swiss and foreign banks to sell 332.2 million UBS shares, securing a certain minimum price, the report says, citing Peter Siegenthaler, director of the federal finance administration. UBS, Bloomberg relates, said that the Swiss Confederation will waive its right to receive future coupons on the mandatory convertible notes for a cash amount of 1.8 billion Swiss francs, representing the present value of the future coupon payments. Based in Zurich, Switzerland, UBS AG (VTX:UBSN) -- http://www.ubs.com/-- is a global provider of financial services for wealthy clients. UBS's financial businesses are organized on a worldwide basis into three Business Groups and the Corporate Center. Global Wealth Management & Business Banking consists of three segments: Wealth Management International & Switzerland, Wealth Management US and Business Banking Switzerland. The Business Groups Investment Bank and Global Asset Management constitute one segment each. The Industrial Holdings segment holds all industrial operations controlled by the Group. Global Asset Management provides investment products and services to institutional investors and wholesale intermediaries around the globe. The Investment Bank operates globally as a client-driven investment banking and securities firm. The Industrial Holdings segment comprises the non-financial businesses of UBS, including the private equity business, which primarily invests UBS and third-party funds in unlisted companies. As reported in the Troubled Company Reporter-Europe, UBS has amassed more than US$53 billion in writedowns and losses since the credit crisis began. The bank expects to post a loss in the second quarter of 2009. The bank's net loss for full-year 2008 widened to CHF19.697 billion from of CHF5.247 million in the prior year. Net losses from continuing operations totaled CHF19.327 billion, compared with losses of CHF5.111 billion in the prior year. UBS attributed the losses to negative revenues in its fixed income, currencies and commodities (FICC) area. For the 2008 fourth quarter, UBS incurred a net loss of CHF8.100 billion, down from a net profit of CHF296 million. Net loss from continuing operations was CHF7.997 billion compared with a profit of CHF433 million. The Investment Bank recorded a pre-tax loss of CHF7.483 billion, compared with a pre-tax loss of CHF2.748 billion in the prior quarter. This result was primarily due to trading losses, losses on exposures to monolines and impairment charges taken against leveraged finance commitments. An own credit charge of CHF1.616 billion was recorded by the Investment Bank in fourth quarter 2008, mainly due to redemptions and repurchases of UBS debt during this period. UBS said it will further reduce its headcount to 15,000 by the end of the year. UBS's personnel numbers reduced to 77,783 on December 31, 2008, down by 1,782 from September 30, 2008, with most staff reductions at its investment banking unit. =========== T U R K E Y =========== TOPLU KONUT: Fitch Affirms Long-Term Currency Ratings at 'BB-' -------------------------------------------------------------- Fitch Ratings has assigned Turkey-based Toplu Konut Idaresi Baskanligi a National Long-term rating of 'AA+(tur)' with a Stable Outlook. At the same time, Fitch has affirmed TOKI's Long-term foreign and local currency ratings at 'BB-' and 'BB' respectively. The Outlooks on the Long-term ratings are Stable. TOKI's ratings are equal to the Republic of Turkey's ('BB-'/'BB'/Outlook Stable) and reflect the entity's public-sector status, tight sovereign control and the important role that TOKI provides to the national government's housing policy. A change in Turkey's sovereign rating, TOKI's legal status and/or sovereign control, would likely be reflected by a change in TOKI's rating and/or Outlook. TOKI reports directly to the Prime Minister's Office of the Republic of Turkey. It has no share capital and its reserves are primarily made up of retained earnings. The entity can acquire land owned by the republic at the nominal cost for development. Although it has its own separate budget, TOKI requires Treasury authorization for foreign borrowing and its accounts are audited by the High Council audit office, which reports to the Turkish parliament. TOKI fulfils an important role for the social policy of the national government by providing affordable housing, primarily to low- and middle-income groups, through discount loan facilities. TOKI has surpassed its initial target to construct 250,000 housing units between 2003-2007, and has a current target to provide a cumulative total of 500,000 units by end-2011 of which 368,000 units, as of end-July 2009, have been constructed or mandated. Due to its increased activities, the entity has used short-term debt and is considering alternative funding mechanisms, including debt issuance through tailored financial vehicles. TOKI was established in 1984 as a public sector entity under Law 2985. Its primary role is to build, promote and support the construction of social housing and social facilities and infrastructure. TOKI's role is to implement the national government's housing policy by providing low-cost housing and loan facilities for the purchase of social housing. ============= U K R A I N E ============= ANTENT MELDIS: Creditors Must File Claims by August 23 ------------------------------------------------------ Creditors of LLC Antent Meldis (code EDRPOU 35372116) have until August 23, 2009, to submit proofs of claim to: LLC Vtorsnabgroupp P. Popovich Str. 87 83056 Donetsk Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on June 19, 2009. The case is docketed under Case No. 28/141-b. The Court is located at: The Economic Court of Kiev B. Hmelnitskiy Str. 44-b 01030 Kiev Ukraine The Debtor can be reached at: LLC Antent Meldis Kikvidze Str. 11 01103 Kiev Ukraine KAGARLIKINVESTTRADE LLC: Claims Filing Period Ends August 23 ------------------------------------------------------------ Creditors of LLC Science and Production Firm Kagarlikinvesttrade (code EDRPOU 32547007) have until August 23, 2009, to submit proofs of claim to: Kagarlik regional state tax inspection Insolvency Manager Independency Square 1 Kagarlik 09200 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on June 30, 2009. The case is docketed under Case No. B3/089-09. The Court is located at: The Economic Court of Kiev Komintern Str. 16 01032 Kiev Ukraine The Debtor can be reached at: LLC Science and Production Firm Kagarlikinvesttrade Office 7 Sovetskaya Str. 130a Leonovka Kagarlik 09221 Kiev Ukraine KARPATY LTD: Creditors Must File Claims by August 23 ---------------------------------------------------- Creditors of LLC Agricultural Firm Karpaty Ltd. (code EDRPOU 31792432) have until August 23, 2009, to submit proofs of claim to: O. Savchuk Insolvency Manager Office 39 V. Stus Str. 9 76008 Ivano-Frankovsk Ukraine The Economic Court of Ivano-Frankovsk commenced bankruptcy proceedings against the company on June 3, 2009. The case is docketed under Case No. BP-21/40. The Court is located at: The Economic Court of Ivano-Frankovsk Shevchenko Str. 16 Ivano-Frankovsk Ukraine The Debtor can be reached at: LLC Agricultural Firm Karpaty Ltd. Sobornaya Str. 15 Pidgaychiki Kolomiya Ivano-Frankovsk Ukraine MONOBUD-S LLC: Creditors Must File Claims by August 23 ------------------------------------------------------ Creditors of LLC Monobud-s (code EDRPOU 35428210) have until August 23, 2009, to submit proofs of claim to: T. Tarasenko Office 49 Dobrokhotov Str. 17 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on July 6, 2009. The case is docketed under Case No. 44/336-b. The Court is located at: The Economic Court of Kiev B. Hmelnitskiy Str. 44-b 01030 Kiev Ukraine The Debtor can be reached at: LLC Monobud-s Kikvidze Str. 18 01103 Kiev Ukraine NIKOLAYEV-LIDER LLC: Creditors Must File Claims by August 23 ------------------------------------------------------------ Creditors of LLC Nikolayev-Lider (code EDRPOU 33682840) have until August 23, 2009, to submit proofs of claim to: M. Fomenko Insolvency Manager Office 32 Buzhsky Blvd. 1 Nikolayev Ukraine The Economic Court of Nikolayev commenced bankruptcy proceedings against the company on July 14, 2009. The case is docketed under Case No. 18/75/09. The Court is located at: The Economic Court of Nikolayev Admiralskaya Str. 22-a 54009 Nikolayev Ukraine The Debtor can be reached at: LLC Nikolayev-Lider K. Liebkneht Str. 37 Nikolayev Ukraine PARM MEDICAL: Creditors Must File Claims by August 23 ----------------------------------------------------- Creditors of CJSC Parm Medical Krym Co. Ltd. have until August 23, 2009, to submit proofs of claim to V. Derbin, the company's insolvency manager. The Economic Court of AR Krym commenced bankruptcy proceedings against the company on December 19, 2008. The case is docketed under Case No. 2-3/7565-2008. The Court is located at: The Economic Court of AR Krym R. Luxembourg Str. 29/Rechnaya Str. 11 95000 Simferopol AR Krym Ukraine The Debtor can be reached at: CJSC Parm Medical Krym Co. Ltd. K. Marks Str. 3 95000 Simferopol AR Krym Ukraine RESOURCE-INVEST-AGRO: Creditors Must File Claims by August 23 ------------------------------------------------------------- Creditors of LLC Resource-Invest-Agro have until August 23, 2009, to submit proofs of claim to: V. Zhytnik, the company's insolvency manager. The Economic Court of Zaporozhye commenced bankruptcy proceedings against the company on July 8, 2009. The case is docketed under Case No. 26/37(09). The Court is located at: The Economic Court of Zaporozhye Shaumian Str. 4 69600 Zaporozhye Ukraine The Debtor can be reached at: LLC Resource-Invest-Agro Stepovaya Str. 1-A Mariyevka 70440 Zaporozhye Ukraine TOPOL LLC: Creditors Must File Claims by August 23 -------------------------------------------------- Creditors of LLC Topol (code EDRPOU 13549093) have until August 23, 2009, to submit proofs of claim to: L. Shishkin Insolvency Manager Office 19 Cherniakhovsky Str. 20-A 10014 Zhytomir Ukraine The Economic Court of Zhytomir commenced bankruptcy proceedings against the company on March 5, 2009. The case is docketed under Case No. 3/192b. The Court is located at: The Economic Court of Zhytomir Putiatinsky Square 3/65 Zhytomir Ukraine The Debtor can be reached at: LLC Topol Galchin Andrushevsky Zhytomir Ukraine YAROPOVICHI AGRICULTURAL: Creditors Must File Claims by August 23 ----------------------------------------------------------------- Creditors of Agricultural LLC Yaropovichi (code EDRPOU 03744639) have until August 23, 2009, to submit proofs of claim to: O. Dovzhanitsa Insolvency Manager Uritsky str. 160 Cherniakhov 12301 Zhytomir Ukraine The Economic Court of Zhytomir commenced bankruptcy proceedings against the company on May 19, 2009. The case is docketed under Case No. 4/45-b. The Court is located at: The Economic Court of Zhytomir Putiatinsky Square 3/65 Zhytomir Ukraine The Debtor can be reached at: Agricultural LLC Yaropovichi Yaropovichi Andrushevsky Zhytomir Ukraine ZODIAC-OMEGA LLC: Creditors Must File Claims by August 23 --------------------------------------------------------- Creditors of LLC Zodiac-Omega (code EDRPOU 22280572) have until August 23, 2009, to submit proofs of claim to: L. Talan Insolvency Manager Post Office Box 158 49000 Dnepropetrovsk Ukraine The Economic Court of AR Krym commenced bankruptcy proceedings against the company on July 16, 2009. The case is docketed under Case No. 2-6/529-2009. The Court is located at: The Economic Court of AR Krym R. Luxembourg Str. 29/Rechnaya Str. 11 95000 Simferopol AR Krym Ukraine The Debtor can be reached at: LLC Zodiac-Omega Kirov str. 31 98600 Yalta AR Krym Ukraine =========================== U N I T E D K I N G D O M =========================== AEOLUS CDO: S&P Junks Rating on Class D Notes From 'BBB-' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on the series 2005-3 notes issued by Aeolus CDO Ltd., a European synthetic collateralized debt obligation of commercial mortgage- backed securities transaction. Relying on data from the last trustee report available to us, S&P's analysis indicates that the transaction has experienced a significant negative trend in the ratings on the underlying securities, and the class D coverage tests and the interest diversion test are currently failing. The rating actions reflect S&P's view on deterioration in the credit quality of the underlying portfolio, mainly due to its exposure to European structured finance securities. The rating migration has, in S&P's opinion, been significant and has led to a pronounced increase in the scenario default rates that current credit enhancement may not support. As a result, S&P believes the current credit enhancement cannot support the rise in scenario default rates at existing ratings levels and have lowered S&P's ratings accordingly. S&P will continue to monitor the transaction's performance and expect to resolve the outstanding CreditWatch placements in due course. Ratings List Aeolus CDO Ltd. EUR84 Million Secured Credit-Linked Notes Series 2005-3 Ratings Lowered Rating ------ Class To From ----- -- ---- A A+ AAA B BBB AA C BB A D CCC BBB- CLARIS LTD: S&P Withdraws 'CCC-' Rating on EUR12 Mil. Notes ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'CCC-' credit rating on the EUR12 million floating-rate credit-linked notes series 49/2005 Voltaire issued by Claris Ltd. The withdrawal follows the early redemption of the notes, which took place on Aug. 4, 2009. CLUB ASIA: Mazars Appointed as Administrators --------------------------------------------- AIM magazine reports former Club Asia co-founder Sumerah Ahmed confirmed that the radio station had indeed gone into administration. AIM magazine relates the company has appointed accountancy firm Mazars as its administrators. According to AIM, while in transition the company has returned to business as normal. Rod Weston, a spokesperson for the company, told AIM magazine: "The business has encountered difficulties due to current harsh economic conditions. We are keeping the station on air while marketing it for sale as a going concern. We have already received substantial interest and are liaising with a number of interested parties." EMI GROUP: Terra Firm Ousts UK Pension Fund Head ------------------------------------------------ Dan Sabbagh at The Times reports that Terra Firma has forced out Ian Smellie, head of EMI Group Ltd.'s GBP1 billion UK pension fund, in a long-running row about top-up payments to the scheme. The report relates prior to his departure, Mr. Smellie argued that Terra Firma had weakened EMI by adding to its debt, meaning that it had to make large extra payments to protect the 22,000 members of the pension scheme. According to the report, Terra Firm refused to meet Mr. Smellie's demands for an extra GBP170 million from EMI, which the private equity firm took over in 2007. Citing EMI's accounts, the report discloses the UK final salary scheme, which is closed to new members, had GBP958 million of assets as of March 2008. The accounts, the report notes, also record a surplus of GBP111 million, although that figure is at the heart of the dispute. On July 31, 2009, the Troubled Company Reporter-Europe, citing the Financial Times, reported that investors in Terra Firma backed plans for the private equity firm to inject GBP300 million of equity into EMI Group as part of a potential refinancing of the music group's GBP2.6 billion debts. London-based EMI Group Limited -- http://www.emigroup.com/-- houses recorded music segment EMI Music and EMI Music Publishing. EMI Music distributes CDs, videos, and other formats primarily through imprints Capitol Music Group, EMI Records, and Virgin, and sports a roster of artists such as The Beastie Boys, Norah Jones, and Lenny Kravitz. EMI Music Publishing, the world's largest music publisher, handles the rights to more than a million songs. Private equity firm Terra Firma bought EMI for US$4.9 billion in 2007. JESSOPS PLC: Nears Debt Restructuring Deal with HSBC ---------------------------------------------------- Samantha Pearson and Martin Arnold at The Financial Times report that Jessops plc is close to securing a debt restructuring deal with its bank. The FT relates the company said it would change its year-end from September to November to allow it more time to reach an agreement with HSBC on restructuring its GBP60 million (US$99 million) debt facility. David Adams, Jessop's executive chairman, as cited by the FT, said he still expected the deal to be concluded "within weeks". According to the FT, Mr. Adams said the details of the deal were being finalized by lawyers. The company, the FT notes, has warned the restructuring agreement -- which analysts expect to take the form of a debt-for-equity swap -- is likely to wipe out shareholders. Sales Jessop's like-for-like sales fell 4.7% in the 12 weeks to August 16, the FT discloses. The company said it would make a pre-tax loss before non-recurring charges this year, following its GBP49.8 million pre-tax loss in the year to September 2008, the FT states. Headquarted in Leicester, United Kingdom, Jessops plc -- http://www.jessops.com/-- is a holding company of a group of companies whose principal activity is the retail of photographic products and services. It operates via the Internet and through mail order and telesales. Jessops plc sells a range of digital and analogue cameras, digital and analogue camcorders, binoculars, digital home print solutions, memory cards, film and photographic materials, as well as a range of accessories for the photographic market, including its own brand products. The Company also provides developing and printing, and digital imaging services. The Company is engaged in the business of selling branded photographic equipment. Its subsidiaries include Camera Bond Limited, Camera Mezz Limited, Camera Equity Limited, The Jessop Group Limited, Well Hall (Jersey) Limited, Expert Imaging Limited, MacKinnons of Dyce Limited and Jessops Photographic (Ireland) Limited. LEHMAN BROTHERS: FSA Findings in Structured Products Probe Delayed ------------------------------------------------------------------ Since Lehman Brothers' collapse in September 2008, the Financial Services Authority and Financial Ombudsman Service have been looking at the potential detriment this has caused for investors in the U.K. structured products market. In May, the FSA and Ombudsman agreed that the issues relating to Lehmans-backed structured products should be considered under the "Wider Implications" process1., to allow the FSA to explore all options to achieve the best outcome for consumers. Although the FSA has completed several elements of its work, it has asked the Ombudsman to continue to defer its consideration of complaints by a further three months to allow the FSA to consider the remaining aspects. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LLOYDS BANKING: Reviews Cheltenham & Gloucester Closure Plan ------------------------------------------------------------ Andrew MacAskill at Bloomberg News reports that Lloyds Banking Group Plc said it will review its decision to close all Cheltenham & Gloucester branches. Bloomberg recalls the London-based bank said in June it would shut all 164 Cheltenham and Gloucester branches by November. Lloyds spokeswoman Eleanor Ross declined to give a reason for Wednesday's decision. "This news will bring some relief to the 900 staff who work in C&G branches up and down the UK," Bloomberg quoted Rob MacGregor, national officer at the Unite labor union, as saying in a statement. "The anxiety and stress they have endured over the last 10 weeks since they were told that they would lose their jobs smacks of poor management." Loss On Aug. 10, 2009, the Troubled Company Reporter-Europe, citing Bloomberg News, reported Lloyds posted a loss of GBP3.1 billion (US$5.2 billion) in the first half of 2009 compared with a profit of GBP1.95 billion in the year-earlier period. According to Bloomberg, the bank set aside GBP13.4 billion in the period to cover souring commercial and real estate loans. Lloyds said HBOS accounted for about 80% of the combined bank’s bad loan provisions. Lloyds Chief Executive Officer Eric Daniels, as cited by Bloomberg, said about GBP10 billion of the provisions will be covered by the government's asset protection program. Lloyds sought a GBP17-billion bailout from taxpayers after it agreed to buy HBOS in September in a government- brokered deal to prevent the collapse of Britain's biggest mortgage lender. The U.K. government owns 43% of Lloyds. About Lloyds Banking Group PLC Lloyds Banking Group PLC, formerly Lloyds TSB Group plc, (LON:LLOY) -- http://www.lloydsbankinggroup.com/-- is a United Kingdom-based financial services group providing a range of banking and financial services, primarily in the United Kingdom, to personal and corporate customers. The Company operates in three divisions: UK Retail Banking, Insurance and Investments, and Wholesale and International Banking. Its main business activities are retail, commercial and corporate banking, general insurance, and life, pensions and investment provision. The Company also operates an international banking business with a global footprint in 40 countries. Services are offered through a number of brands, including Lloyds TSB, Halifax, Bank of Scotland, Scottish Widows, Clerical Medical and Cheltenham & Gloucester. On January 16, 2009, Lloyds Banking Group plc acquired HBOS plc. LOOKERS PLC: Wants Government's Scrappage Scheme Extended --------------------------------------------------------- Philip Stafford at The Financial Times reports that Lookers plc has called for the government's car scrappage scheme to be extended. According to the FT, Mr. Peter Jones, managing director of Lookers’ motor division, said the GBP300-million government scheme, enough for about 300,000 cars, had resulted in 155,000 orders placed since the end of May, and 83,000 vehicles delivered. Lookers, as cited by the FT, said it had received "more than its market share" of orders. "It's been a good boost for the economy and we lobby for that to be extended," the FT quoted Mr Jones as saying. The scheme, co-funded by the government and UK car industry, is expected to run out later this year, the FT notes. Balance Sheet Restructuring The FT recalls falling sales overall forced Lookers to restructure its balance sheet and last month it completed a fundraising to raise GBP81 million in an effort to reduce its GBP210 million loan package, which carries rates of between 4 and 10 percentage points over Libor. In other cost-cutting measures, Lookers has cut jobs and shut down loss-making businesses. Headquartered in Manchester, United Kingdom, Lookers PLC -- http://www.lookers.co.uk/-- is a motor retail company engaged in the sale, hire and maintenance of motor vehicles and motorcycles, including the sale of tires, oil, parts and accessories. As at December 31, 2007, the Company was organized into three main business segments: franchised businesses, used car supermarkets and parts distribution. On May 17, 2007, the Company acquired BTN Turbo Charger Service Limited. On August 29, 2007, it acquired certain assets from the Administrator of Dixons Motor Group. On October 26, 2007, the Company acquired Dutton Forshaw Group Limited, the motor retail division of Lloyds TSB Asset Finance Division. NORTHERN ROCK: Fitch Cuts Rating on Hybrid Debt Securities to 'C' ----------------------------------------------------------------- Fitch Ratings has downgraded Northern Rock's hybrid debt securities to 'C'. The ratings of NR's covered bonds are unaffected by this action. The rating action follows an announcement by the bank that it has decided to defer payment on all of its hybrid (tier 1 or upper tier 2) debt coupons. It will pay coupons falling due on two securities where it has already given notice of its intention to pay but will defer later coupons. Although the bank has stated that the coupon payments have been deferred until further notice, Fitch does not expect payments to be started again in the near-to- medium term. "Fitch considers that Northern Rock is likely to retain all deferrable coupons for the foreseeable future, making payments to senior creditors a priority over hybrid creditors, to ensure that, to the extent possible, the senior creditors are paid without recourse to the UK government's guarantee," said Matthew Taylor, Senior Director of Fitch's Financial Institutions team. "After the restructuring of the bank in the autumn, it will be particularly important for AssetCo, which will be wound down as a going concern, to protect the position of the senior creditors." Fitch expects that after the restructuring NR's hybrid debt will belong to AssetCo. The latter will hold the legacy assets of Northern Rock and Fitch expects it also to hold the vast majority of its wholesale liabilities. Ratings of Northern Rock: -- Long-term Issuer Default Rating: 'A-' remains on Rating Watch Evolving -- Short-term Issuer Default Rating affirmed at 'F1+' -- Individual Rating affirmed at 'F' -- Support Rating '1' remains on Rating Watch Negative (RWN) -- Support Rating Floor 'A-' remains on RWE -- Senior debt 'A-' remains on RWE -- Lower tier 2 subordinated debt 'B-' remains on RWN -- Upper tier 2 subordinated debt downgraded to 'C' from 'CCC' -- Tier 1 debt securities downgraded to 'C' from 'CC' In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively, these ratings drive Fitch's Long- and Short-term IDRs. NORTHERN ROCK: S&P Lowers Ratings on Seven Securities to 'CC' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on the seven rated hybrid capital securities issued by Northern Rock PLC (A/Watch Neg/A-1) to 'CC' from 'CCC'. At the same time, the ratings on Northern Rock's lower Tier 2 instruments were lowered to 'CCC' from 'B-'. The counterparty credit ratings on Northern Rock PLC are unaffected by this action. The rating action reflects S&P's view of increased nonpayment risk on these instruments and follows Northern Rock's announcement yesterday. Northern Rock said that it will honor its previously stated intention to pay the next coupon due on two of its hybrid securities, but, referring to its contractual entitlement, it thereafter intends to cease coupon payments on all its hybrid securities until further notice. In S&P's view, Northern Rock's decision to cease the hybrid coupon payments reflects the high degree of stress that the bank is under. Northern Rock had announced on July 1, 2009, that its capital base had reduced to a level below its minimum regulatory capital requirement. On Aug. 4, 2009, the bank announced a loss of GBP740 million for the six months to June 30, 2009. Northern Rock also stated that the capital situation would be addressed through a proposed legal and capital restructuring that they expect to complete before the end of 2009. This restructure is subject to State Aid approval being obtained from the European Commission, which Northern Rock expects in the autumn. S&P considers that Northern Rock's stated intention to cease coupon payments on its hybrid capital securities indicates a substantial risk that these coupons will not be paid. S&P has therefore lowered the ratings to 'CC'. Northern Rock has said that it will make the next two hybrid security coupon payments. These coupons are due to be paid on Aug. 23, 2009, (for the US$100 million floating-rate upper Tier 2 notes) and Sept. 15, 2009 (for the $100 million 8% upper Tier 2 notes). Thereafter, the rated hybrid securities' next coupons are due on various dates between Sept. 21, 2009, and end-June 2010. Northern Rock has said that it does not intend to make these payments. In line with its criteria, S&P lower the ratings on hybrid capital securities to 'C' when the coupon payments are actually missed. Northern Rock's announcement related only to its hybrid capital securities. S&P understands that the bank intends to continue to pay coupons on its lower Tier 2 instruments. S&P understands that the bank would only be contractually obliged to miss coupon payments on these instruments if it was actually insolvent, or if it would become insolvent by making the payment. However, while the government has, in S&P's view, clearly stated its intent to continue to support senior creditors of Northern Rock, S&P view the U.K. as a jurisdiction in which regulatory intent and the legal background indicate a higher default risk on lower Tier 2 issues relative to senior debt. This view is based particularly on the action taken by HM Treasury in respect of Bradford& Bingley PLC (B&B; --/--/A-1), in which the government legislated to allow coupons on B&B's lower Tier 2 issues to be suspended to help conserve the bank's capital. Indeed, S&P sees potential parallels between B&B's current situation as a run-off institution and the entity that could emerge from a restructuring of Northern Rock holding the mortgage back book and other "legacy" assets and liabilities. These "legacy" liabilities could include Northern Rock's lower Tier 2 instruments. In view of this apparent differentiated government stance toward senior and lower Tier 2 noteholders, the evident financial stress that Northern Rock is under, and the decision to defer hybrid coupons, S&P considers that the prospect for continued payment of coupons on lower Tier 2 notes has diminished. S&P has therefore lowered the ratings on these instruments to 'CCC', reflecting S&P's view that there is now a clear and present risk that interest payments on these instruments could be stopped. Ratings List Downgraded Northern Rock PLC A$5 billion MTN program To From -- ---- Subordinated debt CCC B- US$20 billion MTN program US$30 billion EMTN program To From -- ---- Subordinated debt CCC B- Junior subordinated debt CC CCC Hybrid capital securities To From -- ---- CC CCC Subordinated lower Tier 2 bonds To From -- ---- CCC B- OPERA FINANCE: Moody's Downgrades Rating on Class D Notes to 'Ba1' ------------------------------------------------------------------ Moody's Investors Service has downgraded these classes of UK CMBS Notes issued by Opera Finance (MetroCentre) plc (amounts reflect initial outstandings): -- GBP440M A Notes, Downgraded to Aa3; previously on Jul 16, 2009 Aaa Placed Under Review for Possible Downgrade -- GBP52M B Notes, Downgraded to A3; previously on Jul 16, 2009 Aa3 Remains On Review for Possible Downgrade -- GBP40M C Notes, Downgraded to Baa2; previously on Jul 16, 2009 A3 Remains On Review for Possible Downgrade -- GBP68M D Notes, Downgraded to Ba1; previously on Jul 16, 2009 Baa3 Remains On Review for Possible Downgrade Moody's placed the Class B, Class C and Class D Notes on review for possible downgrade on April 8, 2009 and placed the Class A Notes on review for possible downgrade on July 16, 2009. The rating action concludes the review for possible downgrade. The rating action takes Moody's updated central scenarios in account, as described in Moody's Special Report "Moody's Updates on Its Surveillance Approach for EMEA CMBS". 1) Transaction Overview Opera Finance (Metrocentre) plc represents the true-sale securitization of an initially GBP600 million commercial mortgage loan (the "Loan") secured by the MetroCentre shopping centre and arranged by Eurohypo AG. The transaction closed in February 2005. The sponsors are Capital Shopping Centre plc (CSC, a subsidiary of Liberty International plc) and GIC Real Estate (the real estate arm of GIC, the Government of Singapore Investment Corporation) which acquired a 40% interest in March 2007. The Property is located three miles south west of Newcastle in the North East of England and is one of the largest super-regional out-of-town centres in the UK and in Europe. In Moody's view, the quality of the shopping centre is very strong. The loan provides for scheduled amortization over time. However, non-payment of amortization does not constitute an event of default and any amortization due but not paid is deferred to the next payment date. Scheduled amortization is applied sequentially to the Notes. As a result of scheduled amortization to date, the Loan outstanding balance has decreased to GBP563.9 million. The Class A Notes outstanding balance was GBP403.9 million as per the last interest payment date, while the balance of the other classes is unchanged since closing. For voluntary loan prepayments, the borrower can choose to which loan tranche they should be applied. Consequently, such prepayments can be applied to the notes reverse sequentially. At closing, the key strengths of the transaction were the quality of the Property -- Moody's assigned this Property a grade of 1.0, which is the highest possible grading -- the experience of CSC, acting as sponsor and asset manager, and the in-place FRI leases that had at that time the potential of increases due to rent reviews. These features were viewed as the key mitigants against the main weakness of the transaction, the adverse rollover profile (significant leases expiring or breaking in 2011 and 2012). 2) Transaction Performance History Between closing and the end of 2008, the reported ICR has consistently increased (starting at 1.15x and reaching 1.45x during 2008), reflecting rental uplifts and declining interest charges due to amortization. However, over the course of last year, the reported annualized net cash flows have decreased by GBP 5 million (10%) mainly due to increased rental arrears, tenant defaults and void costs. Despite those weaker cash flows, the latest reported ICR (1.33x) remains well above the covenant of 1.20x. The latest revaluation of the Property published in July 2009 in Liberty International plc interim reports shows a value decline of 20% to GBP 691 million from GBP 864 million at closing. Compared to the peak valuation in 2007, the drop is even more pronounced. Based on this updated valuation, the LTV ratio increased to 81.6%, compared to 69.4% at closing. The loan is subject to an LTV covenant of 90%. 3) Rating Rationale The downgrades of the Class A, Class B, Class C, and the Class D Notes follow a detailed re-assessment of the Property and the Loan's credit risk. As outlined in more detail below, the rating action is mainly driven by three factors: (i) The value decline the Property has experienced over the last two years coupled with Moody's expectation that the value will decline further over the foreseeable future. Future value declines will be mainly driven by a reduction in net rental cash flows as opposed to further yield widening. Moody's expects the value to recover moderately from 2012 onwards. (ii) The reduction of net rental cash flow generated by the Property coupled with Moody's expectation that cash flows will decline further over the foreseeable future. The future decline in net rental cash flows will be driven by increasing rental arrears and associated void costs. In addition, the Property and, in turn, the Loan are exposed to significant lease expiries in 2011 and 2012, which might result in increasing vacancy rates and/or lower rental cash flows due to declining market rents. (iii) Anticipated covenant breaches. The loan agreement is subject to an LTV and a forward looking ICR covenant. Based on the lease expiry profile and on Moody's expectations in relation to future rental cash flows and property value, Moody's anticipates that those covenants might be breached in the future. In Moody's opinion, those covenant breaches are likely to be cured by partial prepayments, which would reduce the credit risk of the Loan. However, those prepayments could be allocated reverse sequentially to the outstanding notes and, as such, they would not build up incremental cushion against further value declines for the more senior notes of the transaction. In Moody's view, the default risk of the Loan has increased compared to closing, but is still relatively low. The property value decline experienced since closing has already resulted in an erosion of the property value cushion available to the noteholders. Moody's expects this cushion to erode further. Based on Moody's expected trough values in 2011, taking into account part of the scheduled amortization, but disregarding potential prepayments, Moody's expects an LTV of 91% and note-to- value ratios of 65% for Class A, 73% for Class B, 80% for Class C and 91% for Class D. 4) Moody's Portfolio Analysis Property value. Property values across the UK have fallen significantly and are expected to continue to decline further until 2010/2011. Moody's estimates that the value of the Property securing this transaction has declined by 26% since closing until the first half of 2009, reflecting a value of GBP643 million. Moody's expects the value of the Property to decline further to approximately GBP604 million until the end of 2011. Further value declines will be mainly driven by declines in net cash flows. Moody's expects the value to moderately recover from 2012 onwards. As a consequence, Moody's estimates that the LTV was 87.7% in Q1 2009. Due to the envisaged further value decline, taking into account part of the scheduled amortization but disregarding potential prepayments, Moody's expects the LTV to increase to 91% and to decline to approximately 73% at Loan maturity in February 2015. Moody's has taken the anticipated property value development into account when analyzing the default risk at maturity and the loss given default for the Loan. Based on this value path, the Loan would breach its LTV covenant and in Moody's opinion, a cure of such a breach by prepayments is likely. When reviewing the transaction, Moody's analyzed the impact of partial prepayments on the credit risk of the Loan and on the credit risk of the notes. Property Cash Flows. The reported net cash flows generated by the Property increased consistently since closing but have experienced a significant decline since the beginning of 2008. In Moody's opinion, the net rental cash flows will be negatively impacted going forward by (i) the significant rollover occurring in 2011 and 2012, (ii) the expected declining market rent levels; (iii) the adverse tenant performance with increases in tenant defaults due to the weak retail environment in the UK; and (iv) an increase in vacancies. Although Moody's has given credit to the strategy currently implemented by the sponsors to minimize the decline in cash flows, it has incorporated into its analysis an allowance for deterioration of the rental cash flows. As the Loan is subject to a forward looking ICR covenant, Moody's anticipates this covenant to be breached in the future. As for the LTV covenant, in Moody's view, a cure of such a breach by prepayments is likely. When reviewing the transaction, Moody's analyzed the impact of partial prepayments on the credit risk of the Loan and on the credit risk of the notes. Refinancing Risk. The Loan matures in February 2015. Primarily driven by value declines, in Moody's view, the default risk at maturity has increased compared to the closing analysis. However, Moody's analysis gives credit to the willingness and ability of the sponsors to inject, if necessary, further equity into the deal. In particular, Moody's believes that partial prepayments are likely to occur before maturity, reducing the Loan outstanding balance at closing. Default Risk and Expected Loss. Although being higher than at closing, Moody's still assesses a relatively low default risk for the Loan. The transaction benefits from a very good property and experienced and committed sponsors. However, due to the recent value decline the Property experienced coupled with the expectation of further value decline, driven in part by the adverse lease expiry profile, the noteholders cushion against higher than currently expected declines has eroded and is expected to erode further. The expected loss of the Loan is still relatively low, however the variability around the expected loss has increased, which results in the rating action. STERLING ENERGY: To Raise GBP62.5 Million in Share Placing ---------------------------------------------------------- Sterling said it has conditionally placed 4,807,315,000 new ordinary shares of one pence each at 1.3 pence per share to raise GBP62.5 million (before expenses). Highlights: * Proceeds of the Placing, together with the cash the Company will receive from its operating activities, to be used to: -- repay US$35 million of debt upon receipt of the Placing proceeds; -- provide a stronger negotiating position for the Company in the ongoing sale process relating to the Company’s US assets; * strengthen the working capital position of the Group. The funds could be used to: -- explore the highly prospective Sangaw North block in Kurdistan; -- strengthen the Company's negotiating position in discussions with potential farm in partners for its assets in Cameroon and Madagascar; and -- provide funding for the Company to pursue new opportunities in line with its exploration strategy. * Amended waiver agreement with banks to mid February 2011, conditional upon completion of the Placing. * Board to be strengthened with the addition of Alastair Beardsall as Executive Chairman and Keith Henry as a Non- executive Director. * Placing Price represents a discount of 52.6 per cent. to the closing middle market price on August 13, 2009. * By mid November the Company intends to undertake an open offer to raise approximately GBP20.6 million at the Placing Price, which will give Shareholders, as at the Record Date, the opportunity to subscribe for two new Ordinary Shares for every nine existing Ordinary Shares held. * Company is no longer pursuing any potential takeover approaches it has received. Graeme Thomson, Chief Executive Officer of the Company said: "This placing assures Sterling's future. It achieves the key objectives of dealing with the Company’s debt issues and allows us to make real progress with our high impact exploration assets. Much of the attention will now rightly focus on our plans for drilling our highly prospective acreage in Kurdistan in the fourth quarter. We also have exciting assets in Cameroon and Madagascar and can now go forward into new ventures with a greater technical focus on activities than we have been able to in recent times." Proposed Executive Chairman, Alastair Beardsall also commented: "I am very excited with this opportunity to join the team at Sterling who successfully secured the three world class exploration opportunities. The Placing will allow the Company to implement the amended bank waiver and thus allow everyone to focus on the business of exploration which has the potential to transform the Company. The Company's strengthened financial position will enhance its negotiating position with regard to both the disposal of the USA assets and the potential farmout of some of its exploration interests. The Company has an excellent record of identifying and securing exploration projects and this funding will allow the Company to resume that very important part of the strategy." A circular containing a notice of an Extraordinary General Meeting of the Company, convened for 11:00 a.m. on September 7, 2009, will be sent to shareholders of the Company outlining the terms of the Placing and seeking Shareholder approval to, inter alia, enable the Directors to allot the Placing Shares in connection with the Placing. Sterling Energy plc -- http://www.sterlingenergyplc.com./-- is an oil and gas company. The principal activity of the Company is the exploration for and production of oil and gas in Africa, the Middle East and the United States. Sterling focuses on projects in Africa and the Middle East. Sterling has high potential near- term opportunities in Kurdistan, Madagascar and in Cameroon, as well as production, appraisal and exploration in the USA and production in Mauritania. During the year ended December 31, 2008, Sterling participated in 18 new wells and over 30 recompletions. * BOOK REVIEW: Dangerous Pursuits - Mergers and Acquisitions in the Age of Wall Street ---------------------------------------------------------------- Authors: Walter Adams and James W. Brock Publisher: Beard Books Softcover: 222 pages List Price: US$34.95 First published in 1989, Dangerous Pursuits - Mergers and Acquisitions in the Age of Wall Street analyzes central concerns raised by the flurry of mergers, acquisitions, takeovers, and buyouts as the twentieth century drew to a close. This was a period of great economic vitality that challenged conventional theories and practices. Economists battled over the best way forward. It was a period of time when "coalition capitalism" was offered as an alternative to "cowboy capitalism" -- that is, the belief in economic laissez-faire. As set forth by the authors, "Coalition capitalism, grounded in 'industrial policy,' is the neoliberal Left's riposte to the cowboy capitalism of the Right." Coalition capitalism takes the approach that "planning can be used to improve [a country's] market performance." The authors strive to present a balanced portrayal of the engineers of this economic growth -- those individuals behind the mergers and acquisitions. To some, they were "predators, piranhas, greenmailers." Others, however, see T. Boone Pickens, Carl Icahn, Ivan Boesky, and others as "necessary catalysts for shaking up stodgy managements and for restoring giant corporations to their owners, the shareholders." Even the term "greed" is subject to debate. As a motivation for mergers, "greed is good" - - as notably voiced by the character Gordon Gekko in the movie Wall Street -- was an opinion apparently shared by Ivan Boesky, who told a college graduating class that "greed is all right." On the other hand, Henry Kravis, a top Wall Street leveraged-buyout strategist is quoted as saying, "Greed really turns me off." In discussing the many opinions regarding mergers and acquisitions, Dangerous Pursuits gives the reader a complete picture of a time when the American economy, workplace, and society were transformed. But the authors make no secret that they are concerned that mergers are weakening American business and society. Their position is substantiated in chapters on the effects of mergers from a macro and micro perspective. In a chapter entitled "The Macro Record," Adams and Brock step back from viewing mergers in terms of the parochial interest of the players and look at the "merger game" through the lens of the national interest. Shorn of media hype, the authors find that the "merger game" undermines advances in productivity, obstructs technological development, and weakens competitiveness. What the "game" does do is earn outsized, quick profits for the specialists, lawyers, financiers, and bankers who engage in it. In the chapter "The Micro Record," the authors look at how mergers have affected particular airlines, steel companies, and conglomerates. From this micro perspective, they find that the benefits touted by those with "parochial interests" do not materialize. At best, the mergers, acquisitions, takeovers, and buyouts are seen as impeding the economy from moving ahead. At worst, Taylor and Brock see an "addiction to mergeritis." No one argues that mergers did not produce large profits for some. The authors warn, however, that such success is a "slow and secret poison" to the U.S. economy. One-time President of Michigan State University where he also taught, Walter Adams also taught at European universities, appeared as an expert on economics before Congressional committees, and published other books. James W. Brock has been a member of the economics department faculty at Miami University in Ohio for more than 20 years, and is the coauthor with Walter Adams on several books. ********* 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, Joy A. Agravante and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *