/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/100201.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, February 1, 2010, Vol. 11, No. 021 Headlines F I N L A N D DYNEA INTERNATIONAL: Moody's Withdraws 'Caa1' Corp. Family Rating F R A N C E CMA CGM: Profitable at Operating Level, Wansquare Says EUTELSAT COMMUNICATIONS: Moody's Ups Sub. Bank Debt Rating to Ba1 PEUGEOT CITROEN: Aims to Sell 100,000 Sedans in China Annually I R E L A N D BLACKSHORE HOLDINGS: Enters Into Interim Examinership I T A L Y GIANNI VERSACE: Inks Preliminary Agreement with Unions on Job Cuts * ITALY: Can't Afford to Cut Taxes, Debt Nears 120% of GDP K A Z A K H S T A N ATF BANK: Moody's Cuts Junior Subordinated Debt Rating to 'B1' BANK CENTERCREDIT: Moody's Cuts Jr. Subordinated Debt Rating to B3 KAZKOMMERTSBANK: Moody's Junks Junior Subordinated Debt Rating * KAZAKHSTAN: Banks Can't Afford to Write Off Bad Loans, S&P Says N E T H E R L A N D S BEST SME: Moody's Assigns 'Ba1' Rating on EUR105 Mln Class E Notes COPERNICUS EURO: Fitch Puts 'BB'-Rated Class D Notes on Watch Neg. DUTCH MBS: Fitch Affirms Ratings on Class E Notes at 'BB' R O M A N I A * ROMANIA: IMF Team Recommends Unlocking Bailout Loan R U S S I A INDEPENDENT NEWS: Aeroflot Lebedev Stake Sale No Link to Purchase ROSAVIA: Lebedev Stake May Be Used as Currency to Swap for Control SAROVBUSINESSBANK: Fitch Affirms Individual Rating at 'D/E' SEVERSTAL OAO: To Restart Production at Ohio Steel Mill UC RUSAL: VEB May Extend Half of US$4.5 Bln Loan by One Year * RUSSIA: DB Analyst Says Investors Lowball Banks' Difficulties S E R B I A & M O N T E N E G R O * MONTENEGRO: Moody's May Raise Credit Outlook to Stable S W E D E N FORD MOTOR: Geely to Run Volvo Separately to Protect Brand Image ROYAL OPERA: May Be Declared Bankrupt, Managing Director Says S W I T Z E R L A N D OERLIKON CORP: Vekselberg Faces Fine Over Stake Acquisition T U R K E Y ARCELIK AS: Fitch Gives Positive Outlook; Affirms 'BB-' Ratings U K R A I N E * UKRAINE: Mulls Sale of Up to US$1 Bln Eurobonds Next Year * UKRAINIAN CITY OF LVIY: S&P Downgrades Issuer Ratings to 'SD' U N I T E D K I N G D O M CRYSTAL PALACE: Deducted 10 Points Following Administration DIGITAL PAGE: High Court Orders Liquidation FLAMELILY FLOWERS: High Court Orders Liquidation FRANK GALLIERS: Goes Into Administration GATHERING 2009: Goes Into Administration J&G ENGINEERING: Appoints D.W.J. McClean as Liquidator NORTHWEST ENVIRONMENTAL: High Court Orders Liquidation RM CABLES: Appoints D.W.J. McClean as Liquidator SHIV DISTRIBUTION: High Court Orders Liquidation WINDYRIDGE INVESTMENTS: High Court Orders Liquidation * UK: Acquisitions of Insolvent Businesses Remain High, R3 Says * UK: At Mid-Point of W-shaped Recession, Phillips & Co Says * UK: Outdated Fin'l Records Could Prolong Financial Instability X X X X X X X X * 20% of European Chemical Capacity at Risk by 2015, KPMG Says * BOND PRICING: For the Week January 25 to January 29, 2010 ********* ============= F I N L A N D ============= DYNEA INTERNATIONAL: Moody's Withdraws 'Caa1' Corp. Family Rating ----------------------------------------------------------------- Moody's Investors Service has withdrawn all outstanding ratings for Dynea International Oy for business reasons and at the company's request. These ratings were withdrawn: -- Caa1 Corporate Family Rating -- Caa1 Probability of Default Rating The last rating action was on December 15, 2009, when Dynea International Oy's ratings were confirmed at Caa1 and the outlook on the ratings was changed to negative. Dynea International Oy is a diversified specialty chemicals group headquartered in Helsinki, Finland. The group produces industrial and panelboard resins as well as interior and engineered wood solutions for the construction, furniture, automotive and machinery & equipment industry. Dynea reported 2008 revenues of EUR864 million and an EBITDA of EUR41 million. =========== F R A N C E =========== CMA CGM: Profitable at Operating Level, Wansquare Says ------------------------------------------------------ Steve Rhinds at Bloomberg News, citing Wansquare, reports that CMA CGM SA has been profitable at the operating level since October. According to Bloomberg, Wansquare, citing an internal company document, reported CMA had operating profit of US$4.8 million in October, US$11 million in November, US$16 million in December and probably US$21 million in January. As reported by the Troubled Company Reporter-Europe on Dec. 28, 2009, Bloomberg News said CMA CGM bondholders approved changes to the terms of their notes that would allow the company to raise more debt and help it avoid bankruptcy. Bloomberg disclosed company spokeswoman Anne-France Malrieu said in a Dec. 22 telephone interview holders of US$570 million of senior bonds agreed to change the terms of the debt, giving new lenders priority for payment in a default. According to Bloomberg, CMA CGM had warned investors in its euro- and dollar-denominated bonds due 2012 and 2013 that without their agreement, the company might have to seek bankruptcy protection. The company still needs court approval to raise new financing that would be senior to existing debt, Bloomberg said. Citing a Dec. 16 notice to bondholders, Bloomberg said CMA CGM was seeking to restructure US$5.6 billion of borrowing and raise new money. Headquartered in Marseilles, France, CMA CGM S.A. -- http://www.cma-cgm.com/-- ships freight PDQ. The marine transportation company is one of the world's leading container carriers. Through subsidiaries it operates a fleet of about 370 vessels that serve more than 400 ports around the globe, and it maintains a network of about 650 facilities in about 150 countries. In addition to hauling containers by sea, CMA CGM provides logistics services, arranging the transportation of containerized freight by river, road, and rail. The company's tourism division arranges cruises and other travel services. Chairman Jacques Saade founded the company in 1978. EUTELSAT COMMUNICATIONS: Moody's Ups Sub. Bank Debt Rating to Ba1 ------------------------------------------------------------------ Moody's Investors Service assigned a long-term senior unsecured issuer rating of Baa3 to Eutelsat SA (96% owned operating company of Eutelsat Communications SA) and upgraded the rating for the structurally subordinated bank debt at Eutelsat Communications SA to Ba1 (from Ba2). The outlook for all ratings is stable. At the same time the agency withdrew Eutelsat Communications SA's Ba1 Corporate Family Rating and the Ba1 Probability of Default Rating. The ratings upgrade reflects Moody's expectation that Eutelsat Communications group will (i) maintain momentum in its operating performance, having shown resilience and continued strength despite the weak macro-economic environment in 2009 (ii) continue to invest in the replacement and growth of its satellite infrastructure and importantly (iii) improve on current leverage levels (the June 30, 2009 DEBT/EBITDA ratio as measured by Moody's was 3.4x) and manage future discretionary outflows so that the Baa3 rating level can be maintained. For the year ending June 2009, Eutelsat again achieved its revenue and EBITDA margin growth objectives (recorded revenues of Euro 940.5 million with EBITDA margin of 78.9% against its objective of over EUR925 million for revenues with EBITDA margin in excess of 78%) and revised its mid-term growth objectives upwards covering the three year period from FY2009/10 to FY2011/12 of achieving a CAGR of 7% (from ~6% for the three year period from FY2008/9 to FY2010/11) with an EBITDA margin in excess of 77%. With good Q12009-10 results, Eutelsat appears to be on track to achieve its guidance on revenues of over EUR1 billion and of EBITDA in excess of EUR780 million for FY2009-10. The current ratings factor in Moody's expectation that Eutelsat will continue to pursue a strategy focused on maximizing per transponder revenue (new video neighborhoods, HDTV) while exploring new alleyways for incremental growth (KA band, S band, 3D). Within the framework of its ongoing ambitious infrastructure investment program (with an average annual expected capital expenditure of ~Euro 450 million over the three year period from FY2009/10 to FY2011/12), Eutelsat successfully launched three new satellites since the beginning of January 2009 (ATLANTIC BIRD(TM) 4A, W2A, W7) and redeployed some of its existing satellites (for instance -- EUROBIRD(TM) 9A, EUROBIRD(TM) 16, W1) during the year to increase capacity. This has taken some pressure off the company, as fill rates decreased from a tight 97.6% (as of December 31, 2008) to an efficient 88.8% (as of June 30, 2009). Eutelsat remains on track to launch 4 new satellites over the course of calendar year 2010-2011, including KA-SAT, a Ka-band satellite dedicated for consumer broadband service across Europe. While ongoing industry growth should create demand for the substantial incremental transponder capacity being added, some risk of creating overcapacity remains. In particular, the level of (consumer) demand for the broadband services to be delivered by the KA-SAT satellite currently remains difficult to gauge, Moody's said. Eutelsat's business is characterized by high EBITDA margins which translate into strong operational cash flows. However, high levels of capex associated with the current launch program together with a progressive distribution policy (pay-out ratio between 50% and 75% of net income group share during the period FY2009-2012) are expected to continue to fully absorb Eutelsat's free cash flow generation in the near-term. High capex levels reflect both, replacement and considerable growth investment. However, the Baa3 rating factors in Moody's expectation that the company should produce good levels of free cash flow post completion of the current investment program by the end of calendar year 2011 with the launch of ATLANTIC BIRD(TM) 7. For FY2008-09, Eutelsat reported a gross debt (including performance incentives, operating leases and pension adjustments) to EBITDA ratio as calculated by Moody's of 3.4x. Given Moody's expectation of visible EBITDA growth in the near-to-intermediate term, this ratio should improve further despite the limitations on free cash flow generation (see above). While Moody's expects the company to consider add-on acquisitions from time to time, the Baa3 rating is calibrated on the assumption that the improving trend in EBITDA-leverage continues in the near-term. In any case, the agency would expect that the company manages discretionary outflows so that a ratio of Gross Debt/ EBITDA (as adjusted by Moody's) of below 3.5x is maintained. Moody's believes Eutelsat's liquidity position is sufficient for its current needs. The company had cash and cash equivalents of 141.37 million as of June 30, 2009. The agency notes that Eutelsat currently has substantial headroom under its committed revolving credit facilities at Eutelsat SA (Euro 650 million due 2011, of which 200 million was drawn at the end of June 2009) and Eutelsat Communications SA (fully un-drawn EUR 300 million due 2013). The company has no long-term maturities until November 2011 when the Euro 650 million of term loan and Euro 650 million revolving credit facility at Eutelsat SA become due. However, Moody's would expect Eutelsat to arrange for the timely re- financing and/or term-out of the maturing bank debt, given the lumpiness of the company's maturity profile with the remainder of its debt (Euro 1.9 billion of bank facilities at Eutelsat Communications SA) falling due in its entirety in June 2013. The rating assignment reflects Moody's expectation that as the company strives to simplify its existing corporate structure, any future re-financing of Eutelsat group's existing senior unsecured bank debt (due 2011 and 2013) would likely be undertaken by the company at the Eutelsat SA level. The last rating action was on March 19, 2009, when Moody's upgraded the CFR of Eutelsat Communications S.A. to Ba1 (from Ba2). Eutelsat's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry; ii) the capital structure and financial risk of the company; iii) the projected performance of the company over the near to intermediate term; and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Eutelsat's core industry and Eutelsat's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Paris, Eutelsat SA is a 96% owned operating company of Eutelsat communications SA which is a leading, internationally operating supplier of fixed satellite services. PEUGEOT CITROEN: Aims to Sell 100,000 Sedans in China Annually -------------------------------------------------------------- Laurence Frost at Bloomberg News reports that PSA Peugeot Citroen said it's targeting 100,000 annual sales of the planned Peugeot 408 sedan in China as it seeks to more than double its share of the market within six years. Bloomberg relates Executive Vice President Jean-Marc Gales said the mid-sized model will help the Peugeot brand achieve 30% growth in China this year, twice the expected overall market expansion. It will be introduced in April, Bloomberg notes. As reported by the Troubled Company Reporter-Europe on Jan. 19, 2010, Bloomberg News said Peugeot and Mitsubishi Motors Corp.'s managers met in Tokyo to negotiate a deal that may give the French carmaker a controlling stake in the Japanese company. According to Bloomberg, two people familiar with the matter said a transaction would involve a share swap. Bloomberg said acquiring a Mitsubishi stake may stretch finances at Peugeot, which had EUR2 billion (US$2.9 billion) in net industrial debt as of June 30 and bonds rated below investment grade by Standard & Poor's. PSA Peugeot is rated BB+ by Standard & Poor's. PSA Peugeot Citroen S.A. -- http://www.psa-peugeot-citroen.com/ -- is a France-based manufacturer of passenger cars and light commercial vehicles. It produces vehicles under the Peugeot and Citroen brands. In addition to its automobile division, the Company includes Banque PSA Finance, which supports the sale of Peugeot and Citroen vehicles by financing new vehicle and replacement parts inventory for dealers and offering financing and related services to car buyers; Faurecia, an automotive equipment manufacturer focused on four component families: seats, vehicle interior, front end and exhaust systems; Gefco, which offers logistics services covering the entire supply chain, including overland, sea and air transport, industrial logistics, container management, vehicle preparation and distribution, and customs and value added tax (VAT) representation, and Peugeot Motocycles, which manufactures scooters and motorcycles. In 2008, PSA Peugeot Citroen S.A. sold over 3.2 million vehicles in 150 countries worldwide. ============= I R E L A N D ============= BLACKSHORE HOLDINGS: Enters Into Interim Examinership ----------------------------------------------------- Caroline Madden at The Irish Times reports that Blackshore Holdings has gone into interim examinership. Blackshore is the parent company of Galway-based oil distribution business Fate Park, which itself went into examinership last April after developing cash-flow difficulties, the report relates. It is understood that during that course of that examinership, it emerged that one of Fate Park's creditors, Esso, had obtained a parent guarantee from Blackshore, the report states. Esso was Fate Park's biggest creditor, being owed EUR12.5 million. Esso Ireland recently made a petition to the High Court to wind up Blackshore, the report recounts. According to the report, to protect itself from this winding-up petition, which was due to be heard on Monday, February 1, Blackshore obtained court protection on Wednesday and appointed insolvency expert Michael McAteer of Grant Thornton as interim examiner on Thursday. A full examinership hearing will take place on February 8, the report notes. Blackshore Holdings recorded a loss of EUR7.9 million in the year to the end of February 2008, the report discloses. Blackshore Holdings is owned by Galway businessman John Sweeney. It comprises Mr. Sweeney's oil, property and hotel interests. ========= I T A L Y ========= GIANNI VERSACE: Inks Preliminary Agreement with Unions on Job Cuts ------------------------------------------------------------------ Andrew Roberts at Bloomberg News reports that Gianni Versace SpA has signed a preliminary agreement with unions on job cuts in Italy. According to Bloomberg, Versace Chief Executive Officer Gian Giacomo Ferraris said the accord, which includes the closure of the company's three-year-old accessories factory in Burago, near Milan, will be concluded Feb. 4. The cuts will commence in March and end in June, Bloomberg notes. Bloomberg recalls Versace, which was founded by the late Italian designer Gianni Versace in 1978, said Oct. 28 it would eliminate about 350 out of 1,360 positions worldwide, or 26% of its workforce, and scale down investments. Mr. Ferraris, as cited by Bloomberg, said the luxury clothing maker expects to report a EUR30-million (US$42 million) operating loss for 2009, while sales probably fell 19% to EUR273 million, hurt by falling wholesale revenue. Bloomberg relates Mr. Ferraris said about 40 jobs will go at Burago, mainly administrative and warehousing functions, while 37 employees, who have the product "know-how," will move to Versace's ready-to-wear plant in Novara, also near Milan. "We will not touch design, product development or brand management," Bloomberg quoted Mr. Ferraris as saying. Bloomberg says Versace introduced a lower-priced women's wear collection as part of a plan to return to profitability in 2011. The new collection, which is under Donatella Versace's creative direction, is the women's ready-to-wear counterpart to Versace's lower-priced men's line and is also labeled Versace Collection, Bloomberg states. Gianni Versace S.p.A. -- http://www.versace.com/-- is an Italian-based international fashion house. The company produces accessories, fragrances, makeup and home furnishings as well as clothes. * ITALY: Can't Afford to Cut Taxes, Debt Nears 120% of GDP ---------------------------------------------------------- Lorenzo Totaro at Bloomberg News report that Unicredit SpA said Italy can't afford to cut taxes as its debt nears 120% of gross domestic product this year, the second-highest in the European Union after Greece. "Public finances are in a process of evident deterioration, even though the worsening trend is significantly less marked than in the rest of the euro zone," Bloomberg quoted Marco Valli, a Milan-based economist at Unicredit, as saying in an e-mailed report Tuesday. "Italy can't afford any such move any time soon." Italy's debt will rise this year to 117% of GDP, Bloomberg says, citing the European Commission. Servicing it costs about EUR81 billion (US$113.9 billion) a year, Bloomberg notes. According to Bloomberg, Mr. Valli said "The main message we want to provide is that Italy will exit the crisis with a debt-to-GDP ratio around 120%." Mr. Valli, as cited by Bloomberg, said any tax cut "has to come only after structural reforms on the spending side deliver tangible results." =================== K A Z A K H S T A N =================== ATF BANK: Moody's Cuts Junior Subordinated Debt Rating to 'B1' -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on certain hybrid securities of three Kazakh banks, namely Kazkommertsbank, ATF Bank and Bank CenterCredit. This rating action is in line with the rating agency's revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. This concludes Moody's review for possible downgrade that began on November 18, 2009, which was the last rating action date for each issuer. The rating outlook for Kazkommertsbank, ATF Bank and Bank CenterCredit remains negative, and all other ratings on these banks remain unchanged. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that support provided by national governments and central banks to support a troubled bank would, to some extent, benefit the subordinated debt holders as well as the senior creditors. The systemic support for these instruments has not been forthcoming in many cases. Moody's revised methodology largely removes previous assumptions of systemic support, resulting in the rating action. In addition, the revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Rating Action in Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment. The Adjusted BCA reflects the bank's stand-alone credit strength, including parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA is B2 for Kazkommertsbank and is the same as the BCA given that parental and/or cooperative support does not apply. The Adjusted BCA is Ba2 for ATF Bank and includes 3-notches of uplift from its BCA of B2 for parental support from UniCredit SpA. The Adjusted BCA is B1 for Bank CenterCredit and is the same as the BCA given that parental and/or cooperative support does not apply. The hybrid instruments issued by the above mentioned Kazakh banks are perpetual and rank deeply subordinated in liquidation. Coupon payments must be suspended upon breach of minimum capital adequacy ratios or liquidity ratios, or if such payments would result in a breach of those ratios. Any unpaid coupons are non-cumulative. Moody's generally rates such instruments two notches below an issuer's Adjusted BCA. The affected securities of the banks are: * Kazkommertsbank's junior subordinated debt (ISIN US486668AA44) rating was downgraded from B3 to Caa1, which is two notches below the bank's Adjusted BCA of B2. * ATF Bank's junior subordinated debt (ISIN XS0274618247) rating was downgraded from Ba3 to B1, which is two notches below the Adjusted BCA of Ba2. * Bank CenterCredit's junior subordinated debt (ISIN XS0267377454) rating was downgraded from B2 to B3, which is two notches below the Adjusted BCA of B1. BANK CENTERCREDIT: Moody's Cuts Jr. Subordinated Debt Rating to B3 ------------------------------------------------------------------ Moody's Investors Service has downgraded the ratings on certain hybrid securities of three Kazakh banks, namely Kazkommertsbank, ATF Bank and Bank CenterCredit. This rating action is in line with the rating agency's revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. This concludes Moody's review for possible downgrade that began on November 18, 2009, which was the last rating action date for each issuer. The rating outlook for Kazkommertsbank, ATF Bank and Bank CenterCredit remains negative, and all other ratings on these banks remain unchanged. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that support provided by national governments and central banks to support a troubled bank would, to some extent, benefit the subordinated debt holders as well as the senior creditors. The systemic support for these instruments has not been forthcoming in many cases. Moody's revised methodology largely removes previous assumptions of systemic support, resulting in the rating action. In addition, the revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Rating Action in Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment. The Adjusted BCA reflects the bank's stand-alone credit strength, including parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA is B2 for Kazkommertsbank and is the same as the BCA given that parental and/or cooperative support does not apply. The Adjusted BCA is Ba2 for ATF Bank and includes 3-notches of uplift from its BCA of B2 for parental support from UniCredit SpA. The Adjusted BCA is B1 for Bank CenterCredit and is the same as the BCA given that parental and/or cooperative support does not apply. The hybrid instruments issued by the above mentioned Kazakh banks are perpetual and rank deeply subordinated in liquidation. Coupon payments must be suspended upon breach of minimum capital adequacy ratios or liquidity ratios, or if such payments would result in a breach of those ratios. Any unpaid coupons are non-cumulative. Moody's generally rates such instruments two notches below an issuer's Adjusted BCA. The affected securities of the banks are: * Kazkommertsbank's junior subordinated debt (ISIN US486668AA44) rating was downgraded from B3 to Caa1, which is two notches below the bank's Adjusted BCA of B2. * ATF Bank's junior subordinated debt (ISIN XS0274618247) rating was downgraded from Ba3 to B1, which is two notches below the Adjusted BCA of Ba2. * Bank CenterCredit's junior subordinated debt (ISIN XS0267377454) rating was downgraded from B2 to B3, which is two notches below the Adjusted BCA of B1. KAZKOMMERTSBANK: Moody's Junks Junior Subordinated Debt Rating -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on certain hybrid securities of three Kazakh banks, namely Kazkommertsbank, ATF Bank and Bank CenterCredit. This rating action is in line with the rating agency's revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. This concludes Moody's review for possible downgrade that began on November 18, 2009, which was the last rating action date for each issuer. The rating outlook for Kazkommertsbank, ATF Bank and Bank CenterCredit remains negative, and all other ratings on these banks remain unchanged. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that support provided by national governments and central banks to support a troubled bank would, to some extent, benefit the subordinated debt holders as well as the senior creditors. The systemic support for these instruments has not been forthcoming in many cases. Moody's revised methodology largely removes previous assumptions of systemic support, resulting in the rating action. In addition, the revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Rating Action in Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment. The Adjusted BCA reflects the bank's stand-alone credit strength, including parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA is B2 for Kazkommertsbank and is the same as the BCA given that parental and/or cooperative support does not apply. The Adjusted BCA is Ba2 for ATF Bank and includes 3-notches of uplift from its BCA of B2 for parental support from UniCredit SpA. The Adjusted BCA is B1 for Bank CenterCredit and is the same as the BCA given that parental and/or cooperative support does not apply. The hybrid instruments issued by the above mentioned Kazakh banks are perpetual and rank deeply subordinated in liquidation. Coupon payments must be suspended upon breach of minimum capital adequacy ratios or liquidity ratios, or if such payments would result in a breach of those ratios. Any unpaid coupons are non-cumulative. Moody's generally rates such instruments two notches below an issuer's Adjusted BCA. The affected securities of the banks are: * Kazkommertsbank's junior subordinated debt (ISIN US486668AA44) rating was downgraded from B3 to Caa1, which is two notches below the bank's Adjusted BCA of B2. * ATF Bank's junior subordinated debt (ISIN XS0274618247) rating was downgraded from Ba3 to B1, which is two notches below the Adjusted BCA of Ba2. * Bank CenterCredit's junior subordinated debt (ISIN XS0267377454) rating was downgraded from B2 to B3, which is two notches below the Adjusted BCA of B1. * KAZAKHSTAN: Banks Can't Afford to Write Off Bad Loans, S&P Says ----------------------------------------------------------------- Nariman Gizitdinov at Bloomberg News reports that Standard & Poor's said Kazakhstan's banks can't afford to write off nonperforming loans and recognize them as losses because they have "very limited sources of new capital" to compensate. "It's easier to keep the problem loans on balance sheets," Bloomberg quoted Ekaterina Trofimova, a Paris-based S&P bank rating director, as saying in a Jan. 26 interview in Almaty. "Write-offs by Kazakh banks that haven't defaulted won't exceed an average of 5% as lenders focus on restructuring customers' debt." Bloomberg relates the Agency for Financial Supervision, citing preliminary data, on Jan. 26 said on its Web site, Kazakhstan's 38 banks reported a total loss of KZT2.84 trillion (US$19.2 billion) in 2009. According to Bloomberg, the Almaty-based regulator said banks' total assets declined 2.8% in the year to KZT11.56 trillion, while total loans rose 4.3% to KZT9.64 trillion. Bloomberg notes the agency said the share of "hopeless" loans in banks' portfolios was 30.6% in 2009, adding that "questionable" loans accounted for 44% of the total and "standard" loans for 25.4%. According to Bloomberg, the financial regulator said Kazakh banks had KZT3.64 trillion, or 37.7% of total loans, in reserve as of Jan. 1. "We expect provisions to continue increasing and catching up with the real level of problem loans," Ms. Trofimova said, according to Bloomberg. "We would expect Kazakh non-defaulted banks to increase provisions to an average of 24 percent of total loans, but there might be wide deviations." Ms. Trofimova, as cited by Bloomberg, said such banks may begin releasing provisions starting in 2011 as the Kazakh economy improves. ===================== N E T H E R L A N D S ===================== BEST SME: Moody's Assigns 'Ba1' Rating on EUR105 Mln Class E Notes ------------------------------------------------------------------ Moody's Investors Service has withdrawn these ratings of the notes issued by BEST SME 2008 B.V.: -- EUR9,912,000,000 (initial balance) Class A Floating Rate Notes due 2026, previously on 15 December 2008, assigned Aaa -- EUR53,000,000 (initial balance) Class B Floating Rate Notes due 2026, previously on 10 September 2009, confirmed to Aa1 -- EUR262,000,000 (initial balance) Class C Floating Rate Notes due 2026, previously on 10 September 2009, confirmed to Aa3 -- EUR168,000,000 (initial balance) Class D Floating Rate Notes due 2026, previously on 15 December 2008, assigned Baa1 -- EUR105,000,000 (initial balance) Class E Floating Rate Notes due 2026, previously on 15 December 2008, assigned Ba1 The withdrawal of the ratings follows the full redemption of the notes at par on the first Optional Redemption Date on January 11, 2010. Best SME 2008 B.V. is second in a series of transactions backed by loans to Dutch small and medium sized enterprises originated by Rabobank, for an amount of EUR10.5 billion at closing. COPERNICUS EURO: Fitch Puts 'BB'-Rated Class D Notes on Watch Neg. ------------------------------------------------------------------ Fitch Ratings has placed all classes of Copernicus Euro CDO I B.V. on Rating Watch Negative, as listed below: -- Class B-1 notes (ISIN XS0131035007): 'AAA' on RWN -- Class B-2 notes (ISIN XS0131115536): 'AAA' on RWN -- Class C-1 notes (ISIN XS0131036310): 'BBB' on RWN -- Class C-2 notes (ISIN XS0131113838): 'BBB' on RWN -- Class D notes (ISIN XS0131037045): 'B' on RWN; Recovery Rating 'RR1' The RWN reflects the reduction of portfolio interest proceeds to service the interest payment on the notes. As per the December 2009 trustee report, all interest coverage tests have been breached. The class C and class D interest coverage tests have fallen to 58% and 37.2% respectively indicating that expected interest proceeds from the portfolio are not sufficient to ensure the interest payment of class C and class D. At the last payment date in November 2009, principal proceeds have been used to maintain the class C interest payment. This is detrimental to the transaction as the level of credit enhancement is being reduced. The RWN resolution would likely lead to a downgrade of the class C-1, C-2 notes to non-investment grade. Class D notes are at risk of default. Class B-1 and B-2 notes ratings are expected to remain in the high investment-grade categories. Fitch employed its global rating criteria for corporate CDOs to analyse the quality of the underlying assets. In accordance with the agency's cash flow analysis criteria, Fitch also took into account the transactions' priority of payments including relevant structural features such as the excess spread-trapping mechanism and coverage tests. DUTCH MBS: Fitch Affirms Ratings on Class E Notes at 'BB' --------------------------------------------------------- Fitch Ratings has upgraded four tranches and affirmed eight tranches of the Dutch MBS XII & XIV transactions. The rating upgrades reflect the deleveraging of the RMBS transactions that has resulted in increased levels of credit enhancement. The affirmations reflect the stable performance of both transactions to date, with low arrears and losses, despite Netherland's difficult economic environment. Dutch MBS XII & XIV were issued in 2005 and are backed by mortgage loans originated by subsidiaries of NIBC Bank N.V. and serviced by STATER Nederland B.V. and Quion Groep B.V. The transactions have benefited from significant seasoning and deleveraging since issuance. The transactions have had low arrears and losses. Cumulative losses in Dutch MBS XII & XIV were equal to 0.05% and 0.04% of the original balance respectively. Arrears greater than 90 days were equal to 0.15% and 0.37% of the current balance respectively. The losses and arrears to date are well within the rating stresses applied by Fitch. The transactions do not allow for excess spread to cover losses and the first loss piece is the unrated class F notes. Due to the transaction's good performance, the class B and C notes of both transactions have been upgraded. Despite the transaction's good performance, the Outlooks for the class D and E notes of Dutch MBS XII have been revised to Stable from Positive due to the challenging macroeconomic environment in the Netherlands, which could result in a change in borrower behavior. The change in Outlook reflects the low likelihood of a positive rating action, but does not imply that Fitch expects any negative rating migration. Fitch used its EMEA RMBS surveillance criteria, employing its credit cover multiple methodologies, to assess the level of credit support available to each class of notes with respect to the transactions. The rating actions are: Dutch MBS XII B.V.: -- Class A (ISIN XS0216830199): affirmed at 'AAA'; Outlook Stable; Loss Severity rating of 'LS-1' -- IO Strip (ISIN XS0216831916): affirmed at 'AAA' -- Class B (ISIN XS0216832302): upgraded to 'AA+' from 'AA'; Outlook Stable; 'LS-1' -- Class C (ISIN XS0216832724): upgraded to 'A+' from 'A'; Outlook Stable; 'LS-1' -- Class D (ISIN XS0216833375): affirmed at 'BBB+'; Outlook revised to Stable from Positive; 'LS-3' -- Class E (ISIN XS0216835073): affirmed at 'BB'; Outlook revised to Stable from Positive; 'LS-3' Dutch MBS XIV B.V.: -- Class A (ISIN XS0235088779): affirmed at 'AAA'; Outlook Stable; 'LS-1' -- IO Strip (ISIN XS0235093696): affirmed at 'AAA' -- Class B (ISIN XS0235089231): upgraded to 'AA+' from 'AA'; Outlook Stable; 'LS-2' -- Class C (ISIN XS0235090320): upgraded to 'A+' from 'A'; Outlook Stable; 'LS-2' -- Class D (ISIN XS0235091054): affirmed at 'BBB'; Outlook Stable; 'LS-3' -- Class E (ISIN XS0235091724): affirmed at 'BB'; Outlook Stable; 'LS-3' ============= R O M A N I A ============= * ROMANIA: IMF Team Recommends Unlocking Bailout Loan ----------------------------------------------------- Adam Brown and Irina Savu at Bloomberg News report that an International Monetary Fund mission will recommend releasing the next payment of Romania's US$30 billion bailout in February after the nation's one-month-old government won parliamentary approval for the 2010 budget. "By the end of February the money will be here in Romania," Bloomberg quoted Jeffrey Franks, head of an IMF mission to Bucharest, as saying Tuesday after a seven-day visit to Romania. "We are going to the IMF board in mid-February to go on with the next disbursement" of EUR2.3 billion (US$3.2 billion). Bloomberg recalls the bailout package was frozen on Nov. 6 after political infighting toppled the government. The IMF demanded the formation of a new government and the passage of the budget before resuming payments, Bloomberg relates. Prime Minister Emil Boc put together a Cabinet on Dec. 23 and lawmakers approved the spending and revenue plan on Jan. 14, Bloomberg recounts. Mr. Franks, as cited by Bloomberg, said the IMF board will decide on the recommendation in the middle of February. The delayed tranche of EUR1.5 billion, plus EUR800 million that was scheduled for March may be disbursed within days, Bloomberg says. =========== R U S S I A =========== INDEPENDENT NEWS: Aeroflot Lebedev Stake Sale No Link to Purchase ----------------------------------------------------------------- Catherine Belton at The Financial Times reports that Russian tycoon Alexander Lebedev said there is no link between his purchase of Independent News & Media's The Independent and the sale of his Aeroflot shares. Mr. Lebedev, the FT says, is to sell his 25.8% stake in Aeroflot back to the state at a discounted price. The FT relates a spokesman for Mr. Lebedev, who also own London's Evening Standard newspaper, said Aeroflot's board of directors approved the deal, worth approximately US$400 million, at a board meeting last week. Mr. Lebedev, the FT discloses, is in exclusive talks with Independent News & Media, UK media group, to buy The Independent, the UK daily national newspaper and its sister publication The Independent on Sunday. According to the FT, it is understood that the two parties are still negotiating the paper's printing contract with Trinity Mirror and its shared services agreement with Daily Mail & General Trust and pension deficits. As reported by the Troubled Company Reporter-Europe on Dec. 21, 2009, The Financial Times said a successful deal on the Independent titles would result in cost savings because INM announced it was moving its UK newspapers into offices at DMGT's London headquarters last year in an effort to save GBP2 million to GBP3 million in costs. The Independent group had already undergone several waves of job cuts, the FT noted. Independent was widely reported earlier in 2009 to be suffering losses of more than GBP10 million a year, the FT disclosed. Citing the FT, the Troubled Company Reporter-Europe on Nov. 12, 2009, INM secured approval of a proposed debt-for-equity swap refinancing from bondholders. The FT disclosed the plan involves the exchange of EUR123 million (US$184 million, GBP110 million) of bonds for a 46% stake in the new company. According to the FT, under the plan approved by bondholders, existing IN&M shareholders would be diluted to around 52%. About Independent News & Media Headquartered in Dublin, Ireland, Independent News & Media PLC (ISE:IPD) -- http://www.inmplc.com/-- is engaged in printing and publishing of metropolitan, national, provincial and regional newspapers in Australia, India, Ireland, New Zealand, South Africa and the United Kingdom. It also has radio operations in Australia and New Zealand, and outdoor advertising operations in Australia, New Zealand, South-East Asia and across Africa. The Company also has online operations across each of its principal markets. The Company has three business segments: printing, publishing, online and distribution of newspapers and magazines and commercial printing; radio, and outdoor advertising. INM publishes over 200 newspaper and magazine titles, delivering a combined weekly circulation of over 32 million copies with a weekly audience of over 100 million consumers. In March 2008, it acquired The Sligo Champion. During the year ended December 31, 2007, the Company acquired the remaining 50% interest in Toowoomba Newspapers Pty Ltd. ROSAVIA: Lebedev Stake May Be Used as Currency to Swap for Control ------------------------------------------------------------------ Catherine Belton at The Financial Times reports that Russian tycoon Alexander Lebedev is to sell his 25.8% stake in Aeroflot back to the state at a discounted price. The FT relates a spokesman for Mr. Lebedev, who also own London's Evening Standard newspaper, said Aeroflot's board of directors approved the deal, worth approximately US$400 million, at a board meeting last week. According to the FT, the deal could see the state consolidate its control over the country's biggest airline, boosting its stake from 51% to nearly 77%. It could also pave the way for Aeroflot to use part of Mr. Lebedev's stake as currency to swap for control of Rosavia, a rival holding company being set up by Sergei Chemezov, the powerful tycoon, who runs the state conglomerate Russian Technologies, the FT states. Rosavia is being created out of 11 insolvent state and private airlines, including KrasAir, Domededovo Airlines and Samara Airlines, the FT notes. Aeroflot shareholders have feared that the creation of a rival major state airline could undercut Aeroflot, the FT says. According to the FT, insiders say a plan to merge Rosavia and potentially other airline assets into Aeroflot is under discussion, but is still facing opposition. As reported by the Troubled Company Reporter-Europe on Jan. 13, 2010, Bloomberg News said Russia may combine state aviation assets under Aeroflot, the country's largest airline, as the government seeks to help the industry recover from the worst economic slump on record. Acquiring Rosavia would allow Aeroflot "to strengthen its leadership on the market significantly," VTB Capital analysts led by Elena Sakhnova wrote in a research note on Jan. 11, according to Bloomberg. Still, "taking over Rosavia with its large debt burden and near-bankrupt small airlines does not sound in the company's and shareholders' best interests," the note said. SAROVBUSINESSBANK: Fitch Affirms Individual Rating at 'D/E' ----------------------------------------------------------- Fitch Ratings has affirmed and simultaneously withdrawn Russia- based Sarovbusinessbank's ratings, including its Long-term foreign currency Issuer Default Rating of 'B-' with a Stable Outlook. Fitch will no longer provide ratings or analytical coverage of SBB. These ratings have been affirmed and withdrawn: * Long-term foreign currency IDR: affirmed at 'B-'; Outlook Stable; withdrawn * Short-term foreign currency IDR: affirmed at 'B'; withdrawn * Individual Rating: affirmed at 'D/E'; withdrawn * Support Rating: affirmed at '5'; withdrawn * Support Rating Floor: affirmed at 'NF'; withdrawn * National Long-term Rating: affirmed at 'BB-(rus)'; Outlook Stable; withdrawn The rating affirmations reflect SBB's significant loss absorption capacity, currently low reported non-performing loans (loans overdue more than 90 days stood at 1.6% of total loans at end- 2009), and comfortable liquidity. However, SBB has high exposure to the real estate and construction sectors (19% of total loans at end-2009), a significant portion of rolled-over loans (10% of total loans at end-2009), and a short-term funding base. SEVERSTAL OAO: To Restart Production at Ohio Steel Mill ------------------------------------------------------- Maria Kolesnikova and Ilya Khrennikov at Bloomberg News report that OAO Severstal said it will restart production at a mill in northeastern Ohio by the end of the current quarter as demand recovers. According to Bloomberg, Cherepovets, Russia-based Severstal said in a Regulatory News Service statement on Jan. 25 that talks are under way with the United Steel Workers union concerning the number of employees to be recalled to the Warren plant. Bloomberg relates the company also said its Mountain State Carbon coke- making unit will return to full production by the end of this month. "Severstal Warren, a fully integrated steel plant, is scheduled to return to service its blast furnace, steelmaking and hot strip mill facilities late in the first quarter of 2010," Bloomberg quoted the steelmaker as saying. Headquartered in Cherepovets, Russia, Severstal OAO, through its subsidiaries -- http://www.severstal.com/-- operates in seven segments. The mining segment comprises iron ore and coal mining complexes and gold mining assets. The Russian Steel segment comprises the Company's steel production and automotive galvanizing facilities. The Lucchini segment comprises plants and service centers, including Piombino and Ascometal business units. The North America segment consists of two integrated iron and steel mills. Izhora Pipe Mill operates a large-diameter pipe mill in Northwest Russia. The Metalware segment comprises plants containing wire drawing equipment that takes long products from the Russian Steel and Lucchini segments and external suppliers and turns them into products with a higher value for the Russian and International markets. The Financing segment, until November 2007, operated a retail bank. In December 2008, the Company acquired ZAO Trade House Severstal-Invest. In January 2008, it acquired baracom Limited. * * * As reported by the Troubled Company Reporter-Europe on Jan. 22, 2010, Fitch Ratings has affirmed Russia-based metals and mining company OAO Severstal's Long-term foreign currency Issuer Default Rating at 'B+', removed it from Rating Watch Negative and assigned a Negative Outlook. Fitch has simultaneously affirmed Severstal's Long-term local currency IDR at 'B+' and its National Long-term rating at 'A(rus)'. Both these ratings have also been removed from RWN and assigned Negative Outlooks. The Short-term foreign currency IDR is affirmed at 'B'. Severstal's senior unsecured rating is affirmed at 'B+' and removed from RWN. The Recovery Rating for the senior unsecured debt is 'RR4'. Fitch said the Negative Outlook reflects Severstal's high dependence on the speed of recovery in demand and prices for steel products in various markets, high expected leverage in FY09 above 'B+'-rated peers, uncertainties on finalizing restructuring plans for North American and European operations, and the risks in executing these restructuring plans. UC RUSAL: VEB May Extend Half of US$4.5 Bln Loan by One Year ------------------------------------------------------------ Yuriy Humber at Bloomberg News reports that United Co. Rusal's largest creditor, Russian state-controlled lender Vnesheconombank, said it may extend half of a US$4.5 billion loan by one year to help ease the company's debt burden. The bank, which is also called VEB, plans to support Rusal's core activities," Bloomberg quoted VEB Chief Executive Officer Vladimir Dmitriev as saying in an interview in Davos Wednesday. "We're very much concerned for the sustainability of this company." According to Bloomberg, Mr. Dmitriev said VEB can extend half its loan for a year subject to approval from the bank's supervisory board, chaired by Prime Minister Vladimir Putin. Bloomberg recalls Sberbank Chief Executive Officer German Gref said Jan. 21 state-owned OAO Sberbank, Russia's biggest lender, will refinance the other half of the loan. VEB's loan is the last part of Rusal's debt to be restructured, Bloomberg notes. More than 70 lenders renegotiated loans in December in a US$16.8 billion deal, the biggest agreement of its kind in Russia, paving the way for Rusal, controlled by billionaire Oleg Deripaska, to hold a HK$17.4 billion (US$2.2 billion) initial public offering in Hong Kong, Bloomberg recounts. As reported by the Troubled Company Reporter-Europe on Jan. 29, 2010, Bloomberg News said Rusal tumbled 11% in its Hong Kong trading debut as demand for new equity waned after the city's benchmark index dropped from a November high. Bloomberg disclosed the Moscow-based company fell to HK$9.66, the worst Hong Kong debut since Dec. 18, on Wednesday from its listing price of HK$10.80. Rusal, the first 2010 IPO in the city, will use net proceeds of HK$16.7 billion (US$2.1 billion) to pay down US$14.9 billion of debt, Bloomberg said. RUSAL -- http://www.rusal.com/-- is among the world's top aluminum producers, along with Rio Tinto Alcan and Alcoa. Formed in 2000 from various parts of the old Soviet state apparatus, RUSAL produces about 4 million tons of aluminum, 11 million tons of alumina, and 6 million tons of bauxite. Its aluminum business include packaging and foil operations in addition to a network of smelters. Those Soviet spare parts were significantly augmented in 2007 when the company merged with fellow Russian aluminum producer Sual and Glencore's alumina unit. RUSAL is majority owned by Board member Oleg Deripaska, who had owned the company completely prior to the merger. * RUSSIA: DB Analyst Says Investors Lowball Banks' Difficulties --------------------------------------------------------------- Laura Cochrane at Bloomberg News reports that Bob Kommers, an analyst at Deutsche Bank in Moscow, said investors are "underestimating" Russian banks' difficulties as non-performing loans are likely to rise and lending rates decrease, hurting profits. "People are underestimating the risks and overstating the recovery potential," Bloomberg quoted Mr. Kommers as saying Thursday in an interview in London. Mr. Kommers, as cited by Bloomberg, said bad loans in Russia will climb to as high as 20% of all lending this year, based on international definitions of non-performing assets, as companies and individuals miss payments on loans that were restructured during the global recession in 2009. Bloomberg notes Mr. Kommers said banks will also face falling net- interest margins as revenue from lending decreases. ===================================== S E R B I A & M O N T E N E G R O ===================================== * MONTENEGRO: Moody's May Raise Credit Outlook to Stable -------------------------------------------------------- Agnes Lovasz at Bloomberg News reports that Moody's Investors Service may raise the credit outlooks on five emerging European countries by July as their economies recover from recession and their banking systems stabilize. According to Bloomberg, Kenneth Orchard, a London-based senior analyst at Moody's, said in a Jan. 22 telephone interview the rating agency may upgrade to stable from negative the outlooks for Hungary, Latvia, Lithuania, Estonia and Montenegro. The "economies are stabilizing and the financial stresses are diminishing, so there is a possibility that these outlooks may change to stable," Bloomberg quoted Mr. Orchard as saying. "We have seen some improvements in the last three months. This applies equally to all of them." Moody's rates Estonia's foreign-currency debt A1, its highest grade for a non-euro member east European state along with the Czech Republic, Bloomberg discloses. It has a Baa3 rating for Latvia, the lowest investment grade and rates Hungary and Lithuania two steps higher, at Baa1, Bloomberg states. Montenegro has a Ba3 rating from Moody's, three steps below investment grade, Bloomberg notes. =========== S W E D E N =========== FORD MOTOR: Geely to Run Volvo Separately to Protect Brand Image ---------------------------------------------------------------- Patti Waldmeir at The Financial Times reports that Zhejiang Geely Holding Group Co. Ltd. is closing on a deal to buy Volvo Car Corp. from Ford Motor Co. According to the FT, Geely says it plans to run the Swedish group as a separate entity to protect its brand image both in China and overseas. Freeman Shen, Geely's vice-president for international operations, told the FT the company had no plans to move Volvo's main production base or research and development operations to China in the near future. "We want to be careful not to damage the Volvo brand," the FT quoted Mr. Shen as saying. "We don't want the image of a luxury car made in a third world country [where labor is cheap]. We want the image of a European luxury car, albeit owned by a Chinese owner." The deal is expected to be signed before China's lunar new year holiday begins on February 14, the FT notes. Citing the FT, the Troubled Company Reporter-Europe reported on Oct. 30, 2009, that, Ford on Oct. 28 named a consortium headed by Geely as the preferred bidder for Volvo. According to the FT, two people familiar with the matter said the privately held group offered just under US$2 billion for Volvo, although Ford gave no price for Geely's bid. The FT disclosed one of the people said US and Chinese companies were also discussing a deal to see Geely take control from Ford of Volvo's captive finance operations, worth another US$5 billion to US$6 billion. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. At Sept. 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. On March 4, 2009, Ford deferred future interest payments on its 6.50% Junior Subordinated Convertible Debentures due January 15, 2032, beginning with the April 15, 2009 quarterly interest payment. As reported by the Troubled Company Reporter on Nov. 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. ROYAL OPERA: May Be Declared Bankrupt, Managing Director Says ------------------------------------------------------------- Sweden's Royal Opera is facing a financial crisis which may force it to close, SR International reports citing the opera's managing director. According to the report, the opera has debts of almost US$1.4 million. The report relates the managing director said if the budget cannot be brought under control this year, the opera may be declared bankrupt. As part of a series of cost cutting measures the opera has announced the cancellation of this season's only modern production which it is commissioned to stage each year by the Swedish state, the report notes. ===================== S W I T Z E R L A N D ===================== OERLIKON CORP: Vekselberg Faces Fine Over Stake Acquisition ----------------------------------------------------------- Haig Simonian at The Financial Times reports that Swiss authorities are seeking to impose a record CHF120 million (US$114 million) fine on Russian oligarch Viktor Vekselberg and two Austrian investors for allegedly breaching reporting rules in building stakes in the troubled Oerlikon industrial group. According to the FT, Renova, Mr. Vekselberg's holding company, immediately rejected the fine. The FT relates the company denied it had broken any rules in buying two stakes in Oerlikon in 2006, and said it would challenge the decision in court. Mr. Vekselberg faces a CHF40 million fine with Ronny Pecik and Georg Stumpf, the two Austrian investors in Oerlikon, facing similar penalties, the FT notes. The fine, the FT says, represents about 20% of the value of Renova's full stake in Oerlikon, whose shares have plunged in recent months on falling orders, stretched finances and restructuring needs. Oerlikon, the FT discloses, is locked in restructuring talks with its banks, with an initial CHF600 million debt repayment due before the end of the first quarter. The company late last year said it hoped to conclude talks by the end of March, leading to a recapitalization underwritten by Renova, but conditional on the banks forgiving some debts or exchanging debt for equity, the FT recounts. OC Oerlikon Corporation AG Pfaeffikon -- http://www.oerlikon.com/ -- is a Swiss company engaged in the industrial sector. The Company divides its activities into six segments: Oerlikon Textile, providing equipment for the textile production; Oerlikon Coating, offering protective coatings for precision tools and components; Oerlikon Solar, which provides solutions for the manufacturing of thin film silicon solar modules; Oerlikon Vacuum, providing systems for producing vacuums and conveying process gases; Oerlikon Drive Systems, which offers propulsion technology, and Oerlikon Advanced Technologies, providing aerospace and production systems for nanotechnology applications. The Company's solutions are used in a range of industries, including the solar energy, clean technologies, automotive, information technology (IT), textile, machinery and tool manufacturing industry, as well as in the process, space and advanced nanotechnology applications. The Company operates worldwide through 180 sites in 37 countries. =========== T U R K E Y =========== ARCELIK AS: Fitch Gives Positive Outlook; Affirms 'BB-' Ratings --------------------------------------------------------------- Fitch Ratings has revised the Outlooks on Arcelik A.S.'s Long-term Issuer Default Ratings to Positive from Negative, while affirming the company's Long-term foreign and local currency IDRs at 'BB-' respectively. Fitch has also affirmed Arcelik's National Long- term rating at 'AA-(tur)'. The Outlook on the National rating is revised to Stable from Negative. The outlook revision reflects the significant improvement in the company's operating and financial profile in 2009 despite Fitch's forecast that Turkey's 2009 GDP will contract 6%, and the economic downturns in most of Arcelik's export markets. Arcelik's YTD September 2009 results marked a turnaround, with the company generating positive free cash flow during the period due to a major reversal in working capital, no dividend distribution and large reductions in capex in some of its business lines. Arcelik has deleveraged significantly from peak leverage (5.1x at FY08) to a moderate 2x at 9M09 on an annualized basis in a challenging market environment and amid weak consumer confidence. Based on Fitch forecasts, sustainable net leverage (net debt/EBITDA) will remain above 3.0x during 2010 and 2011 versus Arcelik management's expectation of substantially lower leverage metrics as the agency expects a return to normalized levels of working capital in 2010. Therefore, further deleveraging is likely to be challenging in 2010 and beyond, but more evidence on the long-term sustainability of lower working capital needs and improved credit metrics would be positive for Arcelik's ratings. In particular, actual or expected leverage below 3x and funds from operations (FFO) interest coverage above 2.5x on average through the cycle could trigger a positive rating action. Arcelik has been efficient in reducing net debt due to the improvement in working capital, which in turn reflects its better inventory management. The company registered a working capital- to-sales ratio of 38% at 9M09 compared with 47% at YE08. The company raised TRY500 million in cash during H109 through a financial asset disposal and a rights issue, both of which were backed by its majority shareholder, Koc Holding (TRY250 million rights issue plus TRY250 million from the sale of its stake in KFS). Fitch notes the various positive initiatives undertaken by the company to conserve cash, notably the board's recommendation not to pay dividends in 2009, and the reduction in annual capex to maintenance levels only. Arcelik's EBITDA margin increased to 13.4% at 9M09, which is well above management's stated target of 10-11%. Efficient inventory management, lower raw material prices (mainly steel) and higher capacity utilization supported operating margins in 2009. However, Fitch remains concerned that Arcelik will continue to finance a major part of its growing trade receivables with debt due to its existing business model. Arcelik's gross debt decreased to TRY2,444 million at 9M09 from TRY3,492 million at end-2008. Of the TRY2,444 million of gross debt, TRY2,175 million (90% of the total) was due within one year, indicating a shortening in Arcelik's debt maturity profile at face value. Fitch notes that half of Arcelik's revenues and around 30% of gross debt are foreign exchange-denominated. Fitch also notes that Arcelik's trade receivables have a major impact on the gross debt stock, as part of the short-term debt is intended to finance the trade receivables. This significant liability increases the company's refinancing risk, although Fitch notes that a large part of this debt is secured. On a positive note, the company's cash position has improved markedly to TRY955 million at 9M09 from TRY338 million at 9M08. Arcelik is Turkey's largest household appliances manufacturer. It produced 10 million units of white goods and 2.8 million TV sets and reported TRY6.8 billion in consolidated sales in FY08. The company is 57%-owned by Koc Group of Turkey, while 23% of its shares are quoted on the Istanbul Stock Exchange. ============= U K R A I N E ============= * UKRAINE: Mulls Sale of Up to US$1 Bln Eurobonds Next Year ----------------------------------------------------------- Halia Pavliva at Bloomberg News reports that Ukraine's Economy Minister Bohdan Danylyshyn said that the country will seek to borrow US$500 million to US$1 billion by selling Eurobonds as early as next quarter as it looks for ways to restructure its debt. "We have been analyzing the whole debt system," Bloomberg quoted Mr. Danylyshyn as saying in an interview in Kiev Wednesday. "We are in talks with potential participants of the restructuring from the European Union, the U.S. and Japan." Bloomberg notes Mr. Danylyshyn said while the government is considering different currencies for the sale, he thinks the bonds should be denominated in euros. The cost to insure against nonpayment by Ukraine using credit- default swaps is the world's third highest, behind Venezuela and Argentina, Bloomberg discloses. Ukraine's five-year default swaps have dropped to 910 basis points from a record 5,384 basis points in March, Bloomberg recalls. This compares to 483 basis points for Latvia and 179 basis points for Russia, Bloomberg data show. * UKRAINIAN CITY OF LVIY: S&P Downgrades Issuer Ratings to 'SD' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it had lowered its long-term issuer credit and Ukraine national scale ratings on the Ukrainian City of Lviv to 'SD' (selective default) following the city's default on a small coupon payment. S&P also lowered the senior unsecured debt ratings on the Ukrainian hryvnia (UAH) 92 million bond tranche A due July 20, 2012, and tranche B due Dec. 19, 2012, to 'D'. The city defaulted on the tranche A coupon. Standard & Poor's then raised the issuer credit and national scale ratings to 'CCC+/uaBB', and the bond ratings back to 'CCC+/uaBB', because the necessary funds due were transferred. The outlook is negative. "The ratings reflect the very unsupportive and centralized nature of the Ukrainian system of interbudgetary relations," said Standard & Poor's credit analyst Boris Kopeykin. The central government effectively controls local and regional governments' budget execution as revenues come into and expenditures are made from the LRGs' accounts in the central- government treasury. On Jan. 19, 2010, Lviv requested that the treasury transfer money to make a coupon payment due on Friday Jan. 22. However, the treasury didn't make the payment on time. Given the two-business- day grace period, the city defaulted on Jan. 26. After the mayor's request to the central government, the treasury transferred the funds to the paying agent, who received them on Jan. 27. According to the city all the bondholders received the coupon payment on Jan. 27. Based on S&P's understanding, this delay was caused by technical difficulties, and S&P don't expect such a situation involving interest payments to be repeated in the future with respect to Lviv or any of its rated Ukrainian peers. However, Ukrainian LRGs dependence on the treasury system will likely prevent us from rating any Ukrainian LRG above the sovereign under any circumstances in the future. The ratings on Lviv continue to reflect those on Ukraine (foreign currency CCC+/Stable/C; local currency B-/Stable/C; Ukraine national scale 'uaBBB'). The ratings also factor in Lviv's low financial flexibility and financial uncertainty arising from its commitment to upgrade its infrastructure to host several of the Union of European Football Associations' championship matches to be held in Ukraine and Poland in 2012 (EURO 2012), which is causing persistent high expenditure needs and has already resulted in some debt accumulation to finance related projects. The country's economic slowdown, with weaker revenue collection, and the city's weak liquidity position also constrain the ratings. These negatives are offset by Lviv's importance as one of western Ukraine's commercial centers, with a relatively strong and diversified economy in the national context, and ongoing central- government support to the city in expectation of its hosting the EURO 2012. "The negative outlook reflects the probability that the city's debt policy might be aggressive in 2010-2011, leading to faster debt accumulation to finance the EURO 2012 preparations, and result in higher debt service," said Mr. Kopeykin. It also reflects the city's dependence on central-government decisions on its revenue and expenditure responsibilities, particularly on transfers, as well as decisions on salaries in the public sector. It also incorporates S&P's assumption of continued expenditure and liquidity pressures in 2010-2011. S&P might lower the ratings if the city's liquidity position deteriorates further, either due to weaker revenue collection, or if the city's new borrowings result in large foreign currency risks or excessive debt service over the next 12-36 months. In addition, negative rating actions on Ukraine or continued difficulties with the treasury system could result in negative actions on Lviv. =========================== U N I T E D K I N G D O M =========================== CRYSTAL PALACE: Deducted 10 Points Following Administration ----------------------------------------------------------- Bob Bensch at Bloomberg News reports that Crystal Palace was docked 10 points by England's Football League after being placed in administration on Jan. 27. "Following receipt of formal confirmation that Crystal Palace Football Club has gone into administration, the Football League can confirm that a sporting sanction of 10 points will apply with immediate effect," Bloomberg quoted the Football League as saying in a statement on its Web site. According to Bloomberg, the deduction drops Palace to 21st place from ninth place in the Championship with 27 points, three above the bottom three relegation zone. As reported by the Troubled Company Reporter-Europe on Jan. 28, 2010, Crystal Palace went into administration after running into financial problems. The Times disclosed the club has debts estimated at GBP30 million. The club has paid players late this season and was due to face a hearing into a winding-up petition from Revenue & Customs on Jan. 27, the Times said. The Times recalled Simon Jordan, the club's chairman, has been attempting to attract new investment this season, but it was not he who called in the administrators. The call was made by Agilo Ltd., a Cayman Islands-registered company from whom Jordan is believed to have borrowed GBP5 million, according to the Times. The Times related Brendon Guilfoyle, Chris White and John Russell, of the P & A Partnership, have been appointed administrators. They will attempt to find a buyer, the Times states. There are understood to be interested parties, but Mr. Guilfoyle made it plain that he would sell players to raise money if possible, the Times noted. London-based Crystal Palace Football Club -- http://www.cpfc.premiumtv.co.uk/-- plays in the English League. The team, also known as the "Eagles" represents a borough of London called Croydon. It was founded in 1905 by workers at the Crystal Palace, a wrought iron and glass building originally erected in the Hyde Park area of London to house the Great Exhibition of 1851 (the first in a series of World's Fair exhibitions). The Crystal Palace Football Club moved to its current stadium Selhurt Park in 1924. Chairman Simon Jordan took over the club in 2000, ending Crystal Palace's stint with bankruptcy. DIGITAL PAGE: High Court Orders Liquidation ------------------------------------------- In a notice published on January 28, 2010, in the Belfast Telegraph, the official receiver of Digital Page Limited said that on January 21, 2010, the High Court of Justice in Northern Ireland ordered the winding up of the company. The registered office of the company is at: 23-25 Queen Street Coleraine BT52 1BG Northern Ireland FLAMELILY FLOWERS: High Court Orders Liquidation ------------------------------------------------ In a notice published on January 28, 2010, in the Belfast Telegraph, the official receiver of Flamelily Flowers Limited said that on January 21, 2010, the High Court of Justice in Northern Ireland ordered the winding up of the company. The registered office of the company is at: 99 Meadow Bank Lurgan Road Seapatrick Banbridge BT32 4PZ Northern Ireland FRANK GALLIERS: Goes Into Administration ---------------------------------------- Advertizer reports that the Shropshire Council said Frank Galliers, the firm constructing Oswestry's GBP7.9 million Oswald Park project, has gone into administration. "Work is currently halted and the site has been made secure while the council reviews the situation and its options," the report quoted Laura Rowley, Director of Resources at Shropshire Council, as saying. "The council is committed to completing the two projects being undertaken by the company -- the new leisure centre in Oswestry and the refurbishment of Market Drayton market hall -- and are taking the necessary steps to ensure this happens." Based Shrewsbury, Frank Galliers is one of the West Midlands' largest construction companies, employing 138 people. GATHERING 2009: Goes Into Administration ---------------------------------------- BBC News reports that Gathering 2009 Ltd., the company behind the centerpiece of last year's Homecoming celebrations, has gone into administration. According to the report, the firm owes about GBP300,000 to 50 companies in Edinburgh. The event is said to have generated more than GBP10 million for the Scots economy, the report notes. The Gathering attracted 47,000 people from at least 40 countries, the report discloses. According to the report, the Scottish government agreed to GBP300,000 bail-out to cover costs such as policing and it had been hoped Edinburgh City Council would pay the other GBP300,000. J&G ENGINEERING: Appoints D.W.J. McClean as Liquidator ------------------------------------------------------ D.W.J. McClean of Moore Stephens was appointed liquidator of J&G Engineering (NI) Ltd. by the creditors on January 26, 2010. The creditors of the company are required on or before April 30, 2010, to send their names and addresses and particulars of their debt and claims to the liquidator and if so required by him, to come in and prove their debt and claims at such time and place as shall be specified in such notice. The liquidator can be reached at: Moore Stephens Chartered Accountants Donegall House 7 Donegall Square North Belfast BT1 5GB Northern Ireland NORTHWEST ENVIRONMENTAL: High Court Orders Liquidation ------------------------------------------------------ In a notice published on January 28, 2010, in the Belfast Telegraph, the official receiver of Northwest Environmental (NI) Limited said that on January 21, 2010, the High Court of Justice in Northern Ireland ordered the winding up of the company. The registered office of the company is at: 59 Bonds Glen Road Killaloo Londonderry BT47 7ST Nothern Ireland RM CABLES: Appoints D.W.J. McClean as Liquidator ------------------------------------------------ D.W.J. McClean of Moore Stephens was appointed liquidator of RM Cables Ltd. by the creditors on January 25, 2010. The creditors of the company are required on or before April 30, 2010, to send their names and addresses and particulars of their debt and claims to the liquidator and if so required by him, to come in and prove their debt and claims at such time and place as shall be specified in such notice. The liquidator can be reached at: Moore Stephens Chartered Accountants Donegall House 7 Donegall Square North Belfast BT1 5GB Northern Ireland SHIV DISTRIBUTION: High Court Orders Liquidation ------------------------------------------------ In a notice published on January 28, 2010, in the Belfast Telegraph, the official receiver of Shiv Distribution Limited said that on January 21, 2010, the High Court of Justice in Northern Ireland ordered the winding up of the company. The registered office of the company is at: Unit 8c Campsie Industrial Estate Londonderry BT47 6XX Northern Ireland WINDYRIDGE INVESTMENTS: High Court Orders Liquidation ----------------------------------------------------- In a notice published on January 28, 2010, in the Belfast Telegraph, the official receiver of Windyridge Investments Limited said that on January 21, 2010, the High Court of Justice in Northern Ireland ordered the winding up of the company. The registered office of the company is at: Savoy House 1st Floor 16 West Street Portadown BT62 3PD Northern Ireland * UK: Acquisitions of Insolvent Businesses Remain High, R3 Says --------------------------------------------------------------- Acquisitions of insolvent businesses in the UK have more than doubled over the past year and remain at high levels, according to research into mergers and acquisitions by Experian Corpfin on behalf of insolvency trade body R3. During the fourth quarter of 2009, 67 out of the 630 deals completed in the UK -- one in nine of all deals -- involved companies acquired out of administration or other formal insolvency procedures. During the year as a whole, there were 345 acquisitions of distressed businesses, amounting to one in every eight mergers and acquisitions. This compares to 2008 when there were 159 distressed acquisitions, accounting for one in 27 mergers and acquisitions. Peter Sargent, R3 President said: Acquisitions of insolvent businesses have risen significantly and remain high. While pre-pack administrations may account for some of these deals, others will be acquisitions by canny buyers taking the opportunity to pick up bargains while values are low. Either way, these statistics represent businesses being given a second chance of survival. R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK's Insolvency Practitioners from all over the UK. * UK: At Mid-Point of W-shaped Recession, Phillips & Co Says ------------------------------------------------------------ Evidence is mounting that the UK may be at the mid-point of a W-shaped recession, insolvency specialists Phillips & Co. are warning. Helen Phillips, partner at the Buckinghamshire-based firm, says "although the number of companies that failed 2009 fell by 2% compared to 2008, we can expect a substantial rise in corporate insolvencies due during 2010 and 2011." "A similar scenario has been seen previous recessions, and statistics confirm that insolvencies peak one to two years after GDP stops shrinking," Ms. Phillips said. Around 134,000 companies showing material signs of financial distress in the third quarter and 215,000 firms deferring payment of 3.79 billion in tax liabilities through the Business Payment Support Service, which is likely to stop relatively soon. Now is not the time for companies to rest on their laurels, Phillips & Co. said. Phillips & Co., who are licensed insolvency practitioners, say the best way to avoid financial disaster is to spot the warning signs early and ask for expert advice straight away, as this can mean the difference between staying in business and an uncertain future. * UK: Outdated Fin'l Records Could Prolong Financial Instability ---------------------------------------------------------------- npower warns that despite evidence showing the UK economy is now out of recession, out of date financial records could prolong financial instability for many UK businesses. This is likely to impact credit ratings, reducing businesses access to finance and essential supplies, like energy. Companies House records can be anything from 12 to 18 months out of date, which means that a company's financial viability will be judged on its performance mid-recession, irrespective of how well it is doing now. Major credit rating agencies typically use these statutory accounts to assess financial health and, despite the scale of the problem, a large number of businesses have a lack of understanding on how their credit rating can impact their business. Wayne Mitchell, head of corporate sales at npower, explained: "Poor credit ratings mean insurance companies are withdrawing credit insurance for businesses, a necessary guarantee that allows them to negotiate contracts with suppliers. This is impacting businesses access to essential supplies like energy and in the worst cases, could lead to tighter payment terms, restricted forward purchasing and even security deposits. In 2009 more than GBP100 million worth of insurance was withdrawn for our business customers and we predict it will continue to be an issue for many businesses in 2010. "That is why we are calling on businesses, energy suppliers and credit insurers to work together to avoid a credit crisis and prevent businesses facing challenges in securing energy supplies. There needs to be open dialogue and information sharing so that financial decisions are based on real-time data and are not solely reliant on the information held by Companies House." npower is also working closely with the Major Energy Users Council (MEUC) to reach businesses and bring to their attention the importance of carefully managing credit insurance. Andrew Buckley, chief executive at the MEUC said: "This is a major issue for our members and we want to help them avoid any difficulty in negotiating energy contracts due to statutory accounts that bear no resemblance to their current situation. "We believe that increased openness is the only way forward to ensure that suppliers and credit insurers have the full picture before making decisions about a business's financial health. Everyone needs to work together to ensure that out-dated credit ratings do not impede the UK's economic recovery." =============== X X X X X X X X =============== * 20% of European Chemical Capacity at Risk by 2015, KPMG Says -------------------------------------------------------------- The European chemical industry is set to face serious challenges over the next five years, with KPMG forecasting that 20% of the sector's base chemical capacity may become unsustainable by 2015. With global demand collapsing in the wake of the recession and increased competition from low-cost suppliers in the Middle East and China, the European chemical industry is walking uncertainly into the dawn of a new era for global chemical production. However, KPMG believes that companies across the sector will now be forced to take even more severe action by closing unprofitable facilities which will be impacted by new, more efficient plants planned to come on stream outside Europe. Chris Stirling, head of KPMG's chemicals and pharmaceuticals practice in the UK and Europe, said: "Current forecasts suggest that globally, there will be a 15% overcapacity in the ethylene production market by 2015. As a result, as many as 40 of the 200 ethylene crackers around the world may no longer be economically sustainable, with 14 of these at risk in Europe. Closure of these plants could prove to be straw that breaks the camel's back for the European industry, particularly when you consider that at present, the 14 worst ranked plants in Europe account for more than a quarter of total capacity." It is believed small naphtha-fed, land-bound units could be most at risk from closure, while well-integrated LPG-fed coastal units will be less vulnerable. Mr. Stirling said: "While this is cause for concern, it's important to stress however that I don't believe that death knells are ringing across the European industry just yet. Remember that this remains an industry which employs over 1.2 million people and contributed in 2007 to a European Union trade surplus in chemicals of EUR35.4 billion. So, while there's no doubt the shape of the global industry is changing, there are steps that can be taken to ensure that European businesses continue to punch their weight on the worldwide stage." He explained: "For instance, companies need to make hard honest choices now to rationalize those unprofitable facilities that cannot compete with newer, more efficient plants being built outside Europe and instead, ruthlessly focus resources and investment on those chemical clusters which do remain competitive. Additionally, they should also try to capitalize on their historic advantage in innovation to stay ahead of the competition from the East, especially in terms of developing sustainable solutions that will undoubtedly become increasingly in demand over the next few years." Mr. Stirling concluded: "Finally, European firms should actively seek beneficial joint ventures and strategic alliances that provide access to both cheap Middle Eastern feedstocks and the burgeoning Asian markets. While such joint relationships do involve an element of trade-off, they should very much be seen as an opportunity to develop a presence in new overseas territories." About KPMG KPMG is a global network of professional firms providing Audit, Tax and Advisory services. The company operates in 144 countries and has 137,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss cooperative. Each KPMG firm is a legally distinct and separate entity and describes itself as such. * BOND PRICING: For the Week January 25 to January 29, 2010 ----------------------------------------------------------- Issuer Coupon Maturity Currency Price ------ ------ -------- -------- ----- AUSTRIA ------- KOMMUNALKREDIT 4.440 12/20/2030 EUR 64.50 KOMMUNALKREDIT 4.900 6/23/2031 EUR 67.75 OESTER VOLKSBK 5.270 2/8/2027 EUR 93.48 OESTER VOLKSBK 4.170 7/29/2015 EUR 74.88 OESTER VOLKSBK 4.810 7/29/2025 EUR 74.13 RAIFF ZENTRALBK 4.500 9/28/2035 EUR 89.25 BELGIUM ------- FORTIS BANK 8.750 12/7/2010 EUR 19.81 BULGARIA -------- PETROL AD-SOFIA 8.375 10/26/2011 EUR 49.10 CZECH REPUBLIC -------------- CZECH REPUBLIC 2.750 1/16/2036 JPY 66.41 DENMARK ------- DANMARK SKIBSKRD 2.000 11/15/2024 DKK 73.12 FINLAND ------- MUNI FINANCE PLC 1.000 11/21/2016 NZD 70.73 MUNI FINANCE PLC 1.000 10/30/2017 AUD 65.14 MUNI FINANCE PLC 1.000 2/27/2018 AUD 63.99 MUNI FINANCE PLC 0.500 9/24/2020 CAD 60.08 MUNI FINANCE PLC 0.250 6/28/2040 CAD 20.57 MUNI FINANCE PLC 0.500 3/17/2025 CAD 45.35 STORA ENSO OYJ 7.250 4/15/2036 USD 73.92 FRANCE ------ AIR FRANCE-KLM 4.970 4/1/2015 EUR 15.47 ALCATEL SA 4.750 1/1/2011 EUR 16.00 ALCATEL-LUCENT 5.000 1/1/2015 EUR 3.44 ALTRAN TECHNOLOG 6.720 1/1/2015 EUR 5.23 ATARI SA 4.000 4/1/2020 EUR 0.70 ATOS ORIGIN SA 2.500 1/1/2016 EUR 49.84 CALYON 6.000 6/18/2047 EUR 46.51 CAP GEMINI SOGET 3.500 1/1/2014 EUR 41.46 CAP GEMINI SOGET 1.000 1/1/2012 EUR 43.10 CLUB MEDITERRANE 4.375 11/1/2010 EUR 48.40 CMA CGM 5.500 5/16/2012 EUR 66.89 CMA CGM SA 7.250 2/1/2013 USD 65.29 CMA CGM SA 7.250 2/1/2013 USD 65.26 DEXIA MUNI AGNCY 1.000 12/23/2024 EUR 61.67 EURAZEO 6.250 6/10/2014 EUR 56.02 FAURECIA 4.500 1/1/2015 EUR 19.35 GROUPE VIAL 2.500 1/1/2014 EUR 18.49 MAUREL ET PROM 7.125 7/31/2014 EUR 18.36 NEXANS SA 4.000 1/1/2016 EUR 63.69 PEUGEOT SA 4.450 1/1/2016 EUR 31.15 PUBLICIS GROUPE 1.000 1/18/2018 EUR 46.13 PUBLICIS GROUPE 3.125 7/30/2014 EUR 35.60 RHODIA SA 0.500 1/1/2014 EUR 43.24 SOC AIR FRANCE 2.750 4/1/2020 EUR 20.87 SOITEC 6.250 9/9/2014 EUR 11.18 TEM 4.250 1/1/2015 EUR 55.31 THEOLIA 2.000 1/1/2014 EUR 13.93 VALEO 2.375 1/1/2011 EUR 46.00 ZLOMREX INT FIN 8.500 2/1/2014 EUR 34.25 ZLOMREX INT FIN 8.500 2/1/2014 EUR 34.25 GERMANY ------- DEUTSCHE BK LOND 1.000 3/31/2027 USD 45.50 ESCADA AG 7.500 4/1/2012 EUR 16.74 EUROHYPO AG 5.000 5/15/2027 EUR 93.20 HSH NORDBANK AG 4.375 2/14/2017 EUR 68.05 KFW 5.000 10/17/2035 EUR 73.81 L-BANK FOERDERBK 0.500 5/10/2027 CAD 44.49 LB BADEN-WUERTT 2.500 1/30/2034 EUR 63.12 LB BADEN-WUERTT 5.250 10/20/2015 EUR 34.59 RENTENBANK 1.000 3/29/2017 NZD 69.90 SOLON AG SOLAR 1.375 12/6/2012 EUR 39.61 TUI AG 5.500 11/17/2014 EUR 74.43 GREECE ------ HELLENIC REP I/L 2.300 7/25/2030 EUR 68.14 HELLENIC REPUBLI 4.600 9/20/2040 EUR 74.19 HELLENIC REPUBLI 4.500 9/20/2037 EUR 73.94 YIOULA GLASSWORK 9.000 12/1/2015 EUR 59.02 YIOULA GLASSWORK 9.000 12/1/2015 EUR 58.00 HUNGARY ------- REP OF HUNGARY 2.110 10/26/2017 JPY 73.15 IRELAND ------- ALLIED IRISH BKS 5.250 3/10/2025 GBP 64.49 ALLIED IRISH BKS 5.625 11/29/2030 GBP 61.21 BANK OF IRELAND 4.875 1/22/2018 GBP 77.61 DEPFA ACS BANK 4.900 8/24/2035 CAD 61.89 DEPFA ACS BANK 5.125 3/16/2037 USD 75.93 DEPFA ACS BANK 5.125 3/16/2037 USD 75.67 DEPFA ACS BANK 0.500 3/3/2025 CAD 30.10 DEPFA ACS BANK 5.250 3/31/2025 CAD 72.89 IRISH NATIONWIDE 13.000 8/12/2016 GBP 75.40 UT2 FUNDING PLC 5.321 6/30/2016 EUR 66.58 ITALY ----- COMUNE DI MILANO 4.019 6/29/2035 EUR 74.56 ROMULUS FINANCE 5.441 2/20/2023 GBP 74.25 LUXEMBOURG ---------- ARCELORMITTAL 7.250 4/1/2014 EUR 32.95 BREEZE 4.524 4/19/2027 EUR 84.50 GLOBAL YATIRIM H 9.250 7/31/2012 USD 65.50 HELLAS III 8.500 10/15/2013 EUR 63.50 LIGHTHOUSE INTL 8.000 4/30/2014 EUR 65.13 LIGHTHOUSE INTL 8.000 4/30/2014 EUR 64.69 NETHERLANDS ----------- ABN AMRO BANK NV 7.540 6/29/2035 EUR 66.10 AI FINANCE B.V. 10.875 7/15/2012 USD 61.13 AIR BERLIN FINAN 1.500 4/11/2027 EUR 74.26 ALB FINANCE BV 7.875 2/1/2012 EUR 35.77 ALB FINANCE BV 8.750 4/20/2011 USD 35.48 ALB FINANCE BV 9.000 11/22/2010 USD 35.49 ALB FINANCE BV 9.250 9/25/2013 USD 35.53 ARPENI PR INVEST 8.750 5/3/2013 USD 55.25 ARPENI PR INVEST 8.750 5/3/2013 USD 55.25 ASTANA FINANCE 9.000 11/16/2011 USD 25.97 BK NED GEMEENTEN 0.500 6/27/2018 CAD 71.98 BK NED GEMEENTEN 0.500 2/24/2025 CAD 48.94 BLT FINANCE BV 7.500 5/15/2014 USD 67.75 BLT FINANCE BV 7.500 5/15/2014 USD 67.75 BRIT INSURANCE 6.625 12/9/2030 GBP 73.03 CRR BV 10.000 6/19/2011 USD 9.99 ELEC DE CAR FIN 8.500 4/10/2018 USD 68.50 EM.TV FINANCE BV 5.250 5/8/2013 EUR 4.50 IVG FINANCE BV 1.750 3/29/2017 EUR 66.79 NATL INVESTER BK 25.983 5/7/2029 EUR 36.35 NED WATERSCHAPBK 0.500 3/11/2025 CAD 47.72 Q-CELLS INTERNAT 1.375 2/28/2012 EUR 63.98 Q-CELLS INTERNAT 5.750 5/26/2014 EUR 65.94 TEMIR CAPITAL 9.000 11/24/2011 USD 17.75 TEMIR CAPITAL 9.500 5/21/2014 USD 28.00 TEMIR CAPITAL 9.500 5/21/2014 USD 27.88 TJIWI KIMIA FIN 13.250 8/1/2001 USD 0.01 TURANALEM FIN BV 8.500 2/10/2015 USD 40.84 TURANALEM FIN BV 7.125 12/21/2009 GBP 39.17 TURANALEM FIN BV 7.875 6/2/2010 USD 40.74 TURANALEM FIN BV 6.250 9/27/2011 EUR 40.72 TURANALEM FIN BV 7.750 4/25/2013 USD 40.74 TURANALEM FIN BV 8.000 3/24/2014 USD 41.00 TURANALEM FIN BV 8.250 1/22/2037 USD 40.90 TURANALEM FIN BV 8.250 1/22/2037 USD 41.08 NORWAY ------ EKSPORTFINANS 0.500 5/9/2030 CAD 38.13 NORSKE SKOGIND 7.000 6/26/2017 EUR 66.43 POLAND ------ POLAND GOVT BOND 3.300 6/16/2038 JPY 71.56 POLAND-REGD-RSTA 2.810 11/16/2037 JPY 67.01 REP OF POLAND 2.648 3/29/2034 JPY 64.68 REP OF POLAND 3.220 8/4/2034 JPY 73.69 REP OF POLAND 2.620 11/13/2026 JPY 72.38 RUSSIA ------ VOLGATELECOM 12.000 9/3/2013 RUB 1.00 SPAIN ----- BANCAJA EMI SA 2.755 5/11/2037 JPY 66.84 GENERAL DE ALQUI 2.750 8/20/2012 EUR 57.15 MINICENTRALES 4.810 11/29/2034 EUR 64.41 SWEDEN ------ SWEDISH EXP CRED 0.500 12/17/2027 USD 49.15 SWITZERLAND ----------- CYTOS BIOTECH 2.875 2/20/2012 CHF 49.37 UBS AG JERSEY 9.000 8/13/2010 USD 61.65 UBS AG JERSEY 9.500 8/31/2010 USD 63.45 UBS AG JERSEY 10.000 10/25/2010 USD 63.75 UBS AG JERSEY 13.900 1/31/2011 USD 36.71 UBS AG JERSEY 14.640 1/31/2011 USD 38.95 UBS AG JERSEY 16.170 1/31/2011 USD 13.90 UBS AG JERSEY 10.000 2/11/2011 USD 61.28 UBS AG JERSEY 15.250 2/11/2011 USD 12.48 UBS AG JERSEY 8.250 2/28/2011 USD 69.79 UBS AG JERSEY 12.800 2/28/2011 USD 35.28 UBS AG JERSEY 11.330 3/18/2011 USD 18.29 UBS AG JERSEY 11.400 3/18/2011 USD 25.81 UBS AG JERSEY 10.990 3/31/2011 USD 30.98 UBS AG JERSEY 16.160 3/31/2011 USD 45.72 UBS AG JERSEY 10.820 4/21/2011 USD 22.33 UBS AG JERSEY 3.220 7/31/2012 EUR 60.12 UBS AG JERSEY 9.350 9/21/2011 USD 68.90 UBS AG JERSEY 11.150 8/31/2011 USD 38.76 UBS AG JERSEY 10.360 8/19/2011 USD 52.79 UBS AG JERSEY 10.280 8/19/2011 USD 33.99 UBS AG JERSEY 13.000 6/16/2011 USD 50.53 UBS AG JERSEY 10.650 4/29/2011 USD 16.35 UBS AG JERSEY 11.030 4/21/2011 USD 21.54 UBS AG JERSEY 9.000 3/9/2010 USD 58.38 UBS AG JERSEY 9.000 5/18/2010 USD 58.09 UBS AG JERSEY 9.000 6/11/2010 USD 56.74 UBS AG JERSEY 9.000 7/2/2010 USD 57.20 UBS AG JERSEY 9.000 7/19/2010 USD 56.95 UBS AG JERSEY 9.350 7/27/2010 USD 57.60 UNITED KINGDOM -------------- ALPHA CREDIT GRP 2.940 3/4/2035 JPY 72.10 BARCLAYS BK PLC 10.350 1/23/2012 USD 25.77 BARCLAYS BK PLC 10.600 7/21/2011 USD 42.40 BARCLAYS BK PLC 8.550 1/23/2012 USD 10.80 BARCLAYS BK PLC 7.610 6/30/2011 USD 54.33 BARCLAYS BK PLC 11.650 5/20/2010 USD 41.13 BRADFORD&BIN BLD 5.750 12/12/2022 GBP 20.56 BRADFORD&BIN BLD 2.875 10/16/2031 CHF 74.04 BRADFORD&BIN PLC 6.625 6/16/2023 GBP 14.95 CO-OPERATIVE BNK 5.875 3/28/2033 GBP 76.96 EFG HELLAS PLC 2.760 5/11/2035 JPY 68.00 ENTERPRISE INNS 6.375 9/26/2031 GBP 76.67 ENTERPRISE INNS 6.500 12/6/2018 GBP 86.85 F&C ASSET MNGMT 6.750 12/20/2026 GBP 67.69 GREENE KING FIN 5.702 12/15/2034 GBP 72.73 HBOS PLC 4.500 3/18/2030 EUR 71.19 INEOS GRP HLDG 8.500 2/15/2016 USD 67.02 INEOS GRP HLDG 8.500 2/15/2016 USD 68.35 INEOS GRP HLDG 7.875 2/15/2016 EUR 68.03 INEOS GRP HLDG 7.875 2/15/2016 EUR 67.13 MARSTONS ISSUER 5.641 7/15/2035 GBP 73.88 NATL GRID GAS 1.754 10/17/2036 GBP 48.04 NATL GRID GAS 1.771 3/30/2037 GBP 46.61 NBG FINANCE PLC 2.755 6/28/2035 JPY 68.08 NOMURA BANK INTL 0.800 12/21/2020 EUR 61.41 NORTHERN ROCK 9.375 10/17/2021 GBP 61.28 NORTHERN ROCK 5.750 2/28/2017 GBP 52.92 OJSC BANK NADRA 9.250 6/28/2010 USD 15.00 PARAGON GROUP 7.000 4/20/2017 GBP 74.50 PRINCIPALITY BLD 5.375 7/8/2016 GBP 64.40 PRIVATBANK 8.750 2/9/2016 USD 75.42 SPIRIT ISSUER 5.472 12/28/2028 GBP 72.24 TXU EASTERN FNDG 6.450 5/15/2005 USD 2.00 UNIQUE PUB FIN 6.464 3/30/2032 GBP 60.73 UNIQUE PUB FIN 7.395 3/28/2024 GBP 75.23 WESSEX WATER FIN 1.369 7/31/2057 GBP 21.76 ********* 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 2010. 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 * * *