/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/101014.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 Thursday, October 14, 2010, Vol. 11, No. 203 Headlines B E L A R U S POLONIKA: May Be Closed Down; Faces Suit From Tax Inspection Chief B U L G A R I A * BULGARIA: Commercial Registry Act Amendments Still Pending C Z E C H R E P U B L I C CET21 SPOL: Moody's Assigns 'Ba3' Rating to EUR170 Mil. Notes CET 21: S&P Assigns 'B' Issue Rating to Senior Secured Notes I R E L A N D EBS BUILDING: Irish Life Mulls Right Issue in Merger Bid IRISH NATIONWIDE: Bondholders Seek to Band Together NARA CABLE: Moody's Assigns 'B2' Rating to EUR500 Mil. Notes PIERSE CONTRACTING: High Court Appoints Interim Examiner PUNCH TAVERNS: Mulls Disposal of 1,300 Outlets to Reduce Debt RUSHYDRO FINANCE: Moody's Assigns 'Ba1' Rating to Notes I T A L Y ARES FINANCE: Fitch Junks Ratings on Two Classes of Notes L U X E M B O U R G BOZEL SA: Gets Nod to Hire BDO as U.S. Financial Advisor P O L A N D * Marek Krol Joins Chadbourne's Warsaw Office R O M A N I A BLUE AIR: Request for Suspension of Insolvency Procedures Rejected R U S S I A B&N BANK: Moody's Assigns 'B2' Rating to Senior Unsec. Bonds CREDIT BANK: Moody's Assigns 'B1' Rating to Senior Unsec. Debt GAZPROMBANK OAO: Moody's Assigns Long-Term Rating to Senior Debt MOSCOW BANK: Moody's Assigns 'B1' Rating to Senior Unsec. Debt MOSCOW MORTGAGE: Moody's Assigns 'Ba2' Rating to Senior Debt PETROCOMMERCE BANK: Moody's Assigns 'Ba3' Long-Term Debt Rating RUSHYDRO FINANCE: Fitch Assigns 'BB+' Senior Unsecured Rating TRANSCREDITBANK JSC: Moody's Assigns 'Ba1' Rating to Senior Debt * Fitch Affirms 'BB-' Long-Term Ratings on Ulyanovsk Region S P A I N ABENGOA FINANCE: Fitch Assigns 'BB' Rating to Senior Notes FONDO DE TITULIZACION: S&P Affirms Low-B Ratings on Various Notes TDA 24: Default Risk Cues S&P to Lower Rating on Class D Notes S W I T Z E R L A N D UBS AG: Fitch Upgrades Individual Rating to 'C' From 'D' U K R A I N E UKRTELECOM OAO: May Be Put Up for Auction on December 28 * Moody's Changes Outlook on Ukraine's 'B2' Bond Rating to Stable U N I T E D K I N G D O M EXOVA HOLDINGS: Moody's Assigns 'B2' Corporate Family Rating HIGHFIELD JUNIORS: Near Collapse After Treasurer Stole Funds INVISTA REAL ESTATE: To Delist & Sell Off Assets JOSEPH DANENZA: U.S. Court Recognizes Chapter 15 Proceeding LEISURE AND GAMING: Hopes to Avoid Administration LIVERPOOL FOOTBALL: Holding Company In Default; May Face Collapse LIVERPOOL FOOTBALL CLUB: Could Still Face Administration LIVERPOOL FOOTBALL CLUB: Peter Lim Won't Rule Out Buying Firm NEWINGTON NURSERIES: Goes Into Compulsory Liquidation PRONUPTIA CORNWALL: To Be Put in Liquidation by End of October STERLINGMAX I: S&P Cuts Ratings on Two Classes of Notes to 'BB-' TARGETFOLLOW ESTATE: High Court Gives 2 Weeks to Secure Investment TOTAL FITNESS: Boss Blames High Rents for Unit's Administration VOICESERVE INC: Earns US$125,500 in June 30 Quarter * UK: Retail Insolvency Rates Fall to Pre-2007 Levels, PwC Says X X X X X X X X * EUROPE: US$316BB of Junk-Rated Corporate Debt Needs Refinancing * EUROPE: Junk Yields Tumble to Lowest Since Before Crisis * Upcoming Meetings, Conferences and Seminars ********* ============= B E L A R U S ============= POLONIKA: May Be Closed Down; Faces Suit From Tax Inspection Chief ------------------------------------------------------------------ The chief of the tax inspection of Leninski district of Hrodna filed a lawsuit to the Economic Court of Hrodna Region, World Countries reports, citing Charter97. World Countries says the tax inspection chief offered to open bankruptcy proceedings against Polonika firm that works at the unrecognized Union of Poles. The case was heard on October 11, Radio Svaboda said. According to the report, Polonika was fined about 40,000 dollars after auditing by tax inspection. According to head of the Union of Poles Anzhalika Arehva (Andzelika Orechwa), officers of the tax inspection said the firm was engaged in humanitarian activity but paid taxes. The report notes the Union of Poles doesn't agree with this. Anzhalika Arehva thinks the tax inspection is not right. The Union has all necessary proofs, World Countries relates. Polonika's activity included lessons of Polish language for dwellers of Hrodna. =============== B U L G A R I A =============== * BULGARIA: Commercial Registry Act Amendments Still Pending ------------------------------------------------------------ Dnevnik.bg reports that progress on pressing amendments to the Commercial Registry Act without which the liquidation of 900,000 companies will cost taxpayers BGN450 million remains uncertain. According to Dnevnik.bg, unofficial reports claim that yet another working group has been tasked with drafting the bill but has not come up with specific texts. Dnevnik.bg relates in July and August, the Justice Ministry announced two projects but none has made its way to the Cabinet and Parliament. Dnevnik.bg notes under the proposals, sole proprietors and branches of foreign companies that fail to reregister by January 1, 2011, will automatically cease to exist and will be struck off the registry. Commercial entities and co-operatives will be removed from turnover and they will be banned from making use of their property, striking deals and making payments to business partners, Dnevnik.bg relates. Three months ahead of the expiry of the three-year period that Bulgarian businesses were given to re-register, just 285,301 firms have registered with the agency and almost 900,000 have not done so, Dnevnik.bg discloses. With the December 31 deadline looming large, it is impossible to register more than 50,000 to 60,000 companies within the 80 working days left, Dnevnik.bg states. =========================== C Z E C H R E P U B L I C =========================== CET21 SPOL: Moody's Assigns 'Ba3' Rating to EUR170 Mil. Notes ------------------------------------------------------------- Moody's Investors Service has assigned a (P)Ba3 rating to the EUR170 million senior secured notes due 2017 to be issued by CET21 spol. s r.o. CET21 is a wholly owned subsidiary of Central European Media Enterprises Ltd, with operations in the Czech Republic and Slovakia. Moody's has also affirmed CME's B2 corporate family rating, with a negative outlook. Together with the new notes, CET21 intends to enter into a CZK1.5 billion (EUR60 million) revolving credit facility. CET 21 intends to use proceeds from the new notes to repay its CZK2.8 billion secured facility, as well as about EUR49 million of a shareholder loan from CME (which in turn will use the proceeds to reduce parent indebtedness). Ratings Rationale The (P)Ba3 rating for the new 2017 notes reflects their relatively strong position within CME's capital structure. The amount of the new notes is relatively limited compared with CME's group debt of over US$1.2 billion. The new notes and revolver will benefit from the same security and guarantees as CME's existing notes; and from security over CET21's shares and substantially all of its assets. Moody's notes that although the 2017 notes will be secured on the assets of CET21, the refinancing does not ring fence CET21 credit risk from the rest of the CME group. The terms of the new notes and the revolver are not expected to restrict cashflow from CET21 being applied to service existing debt at the parent company. Hence the ratings uplift for the notes from the B2 CFR arises from the additional security provided to those noteholders (essentially over the assets of CET21). At the same time, Moody's notes that the CME group will continue to have limited flexibility to incur new debt. Under the existing parent indentures, the incurrence coverage ratio for CME remains below 2x; and the bond issuance and drawings under CET21's new revolving credit facilities will substantially exhaust capacity under the basket carve-out. The incurrence test of 2.25x CET21's OIBDA under the new 2017 notes further limits the ability to incur additional secured debt at CET21. CME's negative outlook reflects ongoing pressures in the group's TV advertising markets and delayed recovery prospects, with limited visibility. The (P)Ba3 rating on the new 2017 notes incorporates this weak positioning of CME's position within the B2 rating category. Conversely, a stabilization of CME's credit profile could result in a degree of positive pressure on the rating of new bond. Moody's issues provisional instrument ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will Endeavour to assign a definitive rating to the notes. A definitive rating may differ from a provisional rating. The CET Group is an entertainment and media company that operates broadcasting, content and new media businesses in the Czech Republic and in Slovakia. The CET Group's main television channels include TV NOVA (Czech Republic) and TV MARKIZA (Slovak Republic), which are market leaders based on their all-day and prime-time audience shares since 1994 and 1996, respectively. During the year ending 31 December 2009, TV NOVA and TV MARKIZA had prime-time audience shares of 47% and 33%, respectively. Over the same period, the CET Group generated net revenues of US$378 million and OIBDA of US$142 million; and in the six months ending 30 June 2010, the company generated net revenues of US$170 million and OIBDA of US$53 million. CME, a Bermuda-incorporated company, is the indirect parent company of CET Group, of which it owns 100%. CME is a vertically integrated media company with networks and content production units in six Central and Eastern European countries. Launched in 1994, CME now operates 21 channels. For the year ending 31 December 2009, after adjusting for the sale of Ukraine, CME generated net revenues of US$682 million and OIBDA of US$115 million. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. The rating has been disclosed to the rated entity or its designated agents and issued with no amendment resulting from that disclosure. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. CET 21: S&P Assigns 'B' Issue Rating to Senior Secured Notes ------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its long- term corporate credit rating on Bermuda-registered emerging markets TV broadcaster Central European Media Enterprises Ltd. at 'B'. The outlook is stable. At the same time, S&P assigned a 'B' issue rating to the EUR170 million senior secured notes due 2017 issued by CME's subsidiary CET 21 spol.s.r.o. The issue rating is in line with, and is capped by, the CCR on CME. In addition, S&P lowered to 'B-' from 'B' the issue rating on CME's US$475 million senior secured convertible notes due 2013, EUR440 million notes due 2016, and EUR150 million notes due 2014. "The affirmation follows CME's launch of a EUR170 million senior secured notes issue at CET 21, CME's main subsidiary that owns the most profitable Czech and Slovak Republic operations," said Standard & Poor's credit analyst Patrizia D'Amico. CME will use EUR115 million of the EUR170 million to refinance its Czech koruna 2.8 billion (approximately US$160.7 million) facility in the Czech Republic. CME is also close to finalizing a CZK1.5 billion revolving credit facility at CET 21. S&P understands that CME is planning to use the remaining proceeds of the senior secured notes (EUR49 million), together with approximately CZK750 million (approximately US$43 million) from the RCF, and some cash on the balance sheet, to repurchase up to US$200 million of existing debt. In S&P's view, the proposed refinancing boosts the group's maturity profile, leaving CME with no debt due until 2013 and improving the debt maturity profile thereafter. "Given that the new senior secured notes and the RCF will be located at CET 21, the amount of structural priority liabilities relative to total assets has increased above S&P's 30% threshold, triggering the one-notch downgrade of the existing notes at CME," said Ms. D'Amico. In S&P's opinion, CME's liquidity will remain adequate over the next few quarters, supported mainly by large cash balances and an improved debt maturity profile following the refinancing. This is despite S&P's view that free cash flow in 2010 will be significantly negative. However, in S&P's view, CME's negative free cash flow is likely to decrease progressively over the next few quarters, owing to slow improvements in advertising markets, CME's exit from the heavily loss-making Ukrainian operations, and the integration of the free cash flow-generating Bulgarian TV group bTV, which started showing a positive operating trend in the second quarter of 2010. S&P therefore anticipates, under its scenario of a gradual recovery in CME's advertising markets in 2011, that the company may generate or approach positive free cash flow in 2011. S&P also anticipates that CME will continue to sustain or improve both its audience and its advertising market shares in the foreseeable future. The outlook does not factor in any material debt-funded acquisition. Downward rating pressure could stem from significant operating underperformance and/or a materially larger deterioration in CME's liquidity than S&P anticipates over the next few quarters, including higher-than-anticipated negative free cash flows in 2010 and 2011. A return to a more aggressive financial policy, such as a significant debt-funded acquisition resulting in reduced liquidity and significantly higher leverage than S&P anticipates, would also weigh negatively on the ratings. A positive rating action could result from a material improvement in advertising spending in the company's key markets that translates into strong EBITDA margin growth, significantly improved prospects for free cash flow generation, and faster deleveraging than S&P anticipates. ============= I R E L A N D ============= EBS BUILDING: Irish Life Mulls Right Issue in Merger Bid -------------------------------------------------------- Irish Life & Permanent, the country's biggest life assurer and mortgage lender, is in talks to hire four banks, including Citigroup and Deutsche Bank, to underwrite a rights offering, Joe Brennan at Irish Examiner reports, citing two people with knowledge of the discussions. According to Irish Examiner, the people, who declined to be identified because the talks are private, said the lender is also in talks with Royal Bank of Scotland Group and Davy to manage the share sale, which would depend on the bank succeeding in its bid to merge a unit with EBS Building Society, the mortgage lender being sold by the Irish government. Irish Life is seeking to separate Permanent TSB, its banking unit, and combine the division with EBS, Irish Examiner discloses. Irish Examiner notes to separate the unit Irish Life needs to provide Permanent with about EUR925 million of additional capital. Irish Life is pressing the government to provide EBS with a EUR785 million capital injection before the merger, Irish Examiner says, citing three people with direct knowledge of the matter. "We've indicated that we will undertake a rights issue in the event of engaging in a transaction involving EBS," Irish Life spokesman Ray Gordon said in an e-mail, according to Irish Examiner. EBS is seeking to raise the EUR785 million to meet capital requirements set by the Financial Regulator after racking up losses on commercial real estate, Irish Examiner discloses. The government has already injected EUR350 million of capital into EBS and has committed to providing the remainder of what's needed if it does not secure outside investment, Irish Examiner states. EBS Building Society is Ireland's largest building society. Servicing more than 400,000 members, it distributes its products through a branch and franchised agency network as well as handling direct business both over the telephone and via the Internet. EBS Building Society provides mortgage lending, savings, investments, and insurance products in Ireland. * * * As reported by the Troubled Company Reporter-Europe on June 7, 2010, Moody's Investors Service downgraded the non-cumulative Tier 1 instruments of EBS Building Society to Ca from Caa1 (issued through EBS Capital No1 S.A.), and the dated subordinated debt one notch to Baa1 from A3. These rating actions follow the issuance of a "Special Investment Share" to the Irish government that is similar in scope to a nationalization, and the forthcoming issuance of a Promissory Note to the government that will provide capital to the society. The other ratings of the society including the D BFSR, the A2 long-term bank deposit and senior debt rating and the Aa1-rated government guaranteed debt were all unaffected. IRISH NATIONWIDE: Bondholders Seek to Band Together --------------------------------------------------- Jennifer Hughes and Anousha Sakoui at The Financial Times report that bondholders in Irish Nationwide are seeking to band together to face the government in potential negotiations over any losses they could suffer as part of a restructuring. The effort comes after Brian Lenihan, Ireland's finance minister, refused to rule out the possibility of a renegotiation with senior bondholders, as well as holders of subordinated bonds, which take losses earlier than senior debt, the FT discloses. According to the FT, holders of some of Irish Nationwide's subordinated bonds have mandated Bingham McCutchen, the law firm, to organize a conference call today, Oct. 14, to discuss the situation and to include senior bondholders. The FT says the Irish Nationwide bond group is however not necessarily seeking enough bondholders to help them legally block any action against them -- a common practice in restructurings -- because it is not clear yet what action the Irish government, with its far-ranging powers, will take. The FT relates a person familiar with the discussions said the group wants to develop a common approach on how best to interact with the government. Irish Nationwide has about GBP700 million of debt outstanding from four bond issues, the FT notes. Irish Nationwide Building Society, headquartered in Dublin, had total assets of EUR14.4 billion at year-end 2008. * * * As reported by the Troubled Company Reporter-Europe on Sept. 6, 2010, Fitch Ratings upgraded the Individual rating of Irish Nationwide Building Society to 'E' from 'F'. Fitch said the upgrade of INBS's Individual Rating to 'E' recognizes the government's injection of EUR2.7 billion capital into the society, but also acknowledges that the society is still likely to require further external support. The sale at a loss of loans to NAMA is likely to lead the society to report losses in 2010 which Fitch expects to be larger than the society's capital base. Fitch thus expects that the society will require additional capital to comply with the Irish Financial Regulator's minimum capital requirements of an 8% Tier 1 capital ratio by end-2010. NARA CABLE: Moody's Assigns 'B2' Rating to EUR500 Mil. Notes ------------------------------------------------------------ Moody's Investors Service has assigned a provisional (P)B2 rating to the EUR500 million of senior secured notes due in 2018 to be issued by Nara Cable Funding Limited, a financial vehicle incorporated in Ireland that will on lend the funds to Cableuropa S.A.U. Concurrently, Moody's (i) affirmed ONO's B3 corporate family rating and all other ratings; and (ii) changed the outlook on all ratings to positive from stable. Moody's issues provisional instrument ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavour to assign a definitive rating to the notes. A definitive rating may differ from a provisional rating. Rating Rationale "Moody's decision to change the outlook on the ratings to positive from stable reflects the progress that the company is making in reducing its refinancing risk in 2013 by extending its debt maturity profile," says Iv�n Palacios, a Moody's Vice President -- Senior Analyst and lead analyst for ONO. "However, Moody's also notes that ONO still faces material refinancing challenges in 2013," adds Mr Palacios. The proposed bond issuance is the second step of a broader refinancing plan, which was initiated in May 2010, when ONO reached an agreement with its lenders under the senior facilities agreement to incorporate part of the facilities due in 2010-2012 into new forward-start facilities due in 2013. Nara will now issue EUR500 million of senior secured notes, the proceeds of which will be on lent to Cableuropa, S.A.U. under a new tranche of the EUR3.6 billion senior facilities agreement and used to prepay and cancel an equivalent amount of senior bank debt. The new notes will therefore rank pari passu with the existing senior secured facilities. The (P)B2 rating of the new notes is one notch higher than the B3 CFR, reflecting the impact of the presence of junior debt in the company's capital structure. This primarily comprises ONO Finance II's EUR270 million senior unsecured bond (due 2014) and ONO Finance's EUR180 million senior unsecured bond (due 2014). The new bond issuance will have a neutral impact on ONO's leverage, as the proceeds from the proposed bond will be used to refinance existing senior bank facilities. Moody's expects ONO to report leverage of around 5.3x (as adjusted by Moody's) for financial year (FY) 2010. This is a moderate level for the rating category, and a sign that upward pressure could develop on the rating over the short to medium term. ONO's rating has been constrained by liquidity and refinancing risk considerations, and the issuance of the senior secured bond due in 2018 is positive because it extends the company's debt maturity profile and reduces its refinancing wall in 2013. Nevertheless, the 2013 refinancing wall remains large (around EUR2.7 billion, post transaction) and will require ONO to continue improving its debt maturity profile. Upward rating pressure could develop if ONO (i) progresses in extending its debt maturity profile; and (ii) management continues to execute the company's revised business plan against the backdrop of the tough economic environment in Spain. More specifically, Moody's will continue to monitor the extent to which ONO delivers sustainable operating performance and free cash flow generation in accordance with its plan and guidance shared with the market in terms of revenue, EBITDA and free cash flow. Downward pressure could be exerted on the rating as a result of (i) a failure by ONO to deliver operational performance in line with its plan and guidance, in terms of the company making continued progress in strengthening its credit and cash flow metrics on a quarterly basis; or (ii) the re-emergence of liquidity concerns, if ONO fails to proactively address the refinancing of the 2013 debt maturities. Moody's most recent rating action on ONO was implemented on 16 April 2010, when the company's outlook was changed to stable from negative. Headquartered in Madrid, Cableuropa, S.A.U. (ONO) is Spain's largest cable operator and leading alternative provider of telecommunications, broadband and internet and pay-TV services. It is the only cable operator with national coverage. In FY 2009, ONO reported revenues of around EUR1.5 billion and EBITDA of EUR730 million. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. The rating has been disclosed to the rated entity or its designated agents and issued with no amendment resulting from that disclosure. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. PIERSE CONTRACTING: High Court Appoints Interim Examiner -------------------------------------------------------- BreakingNews.ie reports that the High Court has appointed an interim examiner to Pierse Contracting and Pierse Building Services. According to BreakingNews.ie, Mr. Justice Brian McGovern on Tuesday evening said he was satisfied to appoint chartered accountant John McStay as interim examiner to both companies. BreakingNews.ie notes the firms cited the economic downturn and cash flow difficulties caused by bad debts of approximately EUR30 million on completed works as the reasons why it has sought the protection of the courts. The judge made the matter returnable to later this month, BreakingNews.ie states. BreakingNews.ie relates moving the petition on behalf of the companies, Rossa Fanning BL said that an independent accountant's report said it believes that the companies have a reasonable prospect of survival as going concerns if certain steps are taken. These include getting acceptance from the High Court of an appropriate scheme of arrangement by the creditors and member of the company, BreakingNews.ie says. The firms also require an investment of funds that would support its future working capital requirements, the continued cooperation of its key suppliers and contractors, and an agreement with NAMA of any proposals put forward in respect on ensuring the two firms' survival, BreakingNews.ie discloses. Pierse Contracting and Pierse Building Services are involved in the fitting out and refurbishing of premises for blue chip clients in Ireland. The firms, which employed 700 at their peak, now have 211 employees. PUNCH TAVERNS: Mulls Disposal of 1,300 Outlets to Reduce Debt ------------------------------------------------------------- Perry Gourley at The Scotsman reports that Punch Taverns on Wednesday disclosed plans to dispose of 1,300 outlets to reduce its debt and focus on a core portfolio. According to The Scotsman, the group, which owns or manages nearly 400 pubs in Scotland, said it wanted to reduce its current holding of 4,700 pubs and would sell ones where it believed "long-term viability is compromised" by the year end. "While we remain committed to the future of the British pub, we believe that fundamental change in consumer habits will result in some pubs not surviving," The Scotsman quoted the company as saying. The Scotsman relates Punch Taverns reported bottom-line losses of GBP160 million during the year due to a GBP218 million write-down on the value of its non-core pubs. Net debt fell by GBP322 million to GBP3.14 billion, The Scotsman discloses. As reported by the Troubled Company Reporter-Europe on April 1, 2010, the FT said Punch Taverns, in common with many others in the UK's pub sector, suffered a torrid few years as the smoking ban and then recession hurt sales and profits. The FT disclosed Punch's debt mountain, accumulated during several years of rapid expansion, means it has had less flexibility than its rivals to respond to the downturn. The company sought to tackle its narrowing headroom on loan covenants by scrapping its dividend, raising GBP375 million through an emergency share issue, disposing of assets and using the money to buy back some of its debt at a discount, according to the FT. The FT noted that while net debt, which peaked at GBP4.9 billion in 2007, had fallen to GBP3.3 billion, this still represents about seven times group earnings before interest, tax, depreciation and amortization and six times the group's equity value. The FT said the company remained highly leveraged. Punch's balance sheet stress had been further compounded by continued weak trading at its core leased and tenanted business, according to the FT. Such had been the state of trading that Moody's, the ratings agency, warned in the autumn that Punch's credit position was likely to worsen as it would be difficult to pay back debt at the pace that earnings fell, the FT said. Punch Taverns plc -- http://www.punchtaverns.com/-- is a pub company in the United Kingdom, with over 8,400 pubs across its leased and managed portfolio. The Company is engaged in the trading activities in the operation of public houses either under the leased model or as directly managed by the Company. The leased model involves the granting of leases to tenants who operate the pub as their own business, paying rent to the Company, purchasing beer and other drinks from it and entering into profit sharing arrangements for income from leisure machines. Pubs that are directly managed involve the employment of a manager to operate each managed pub and the Group receives all revenues generated by the pub and is responsible for costs. During the fiscal year ended August 23, 2008, Punch Taverns plc acquired 20 pubs and 39 pubs were sold. RUSHYDRO FINANCE: Moody's Assigns 'Ba1' Rating to Notes ------------------------------------------------------- Moody's Investors Service has assigned a (P)Ba1 rating with stable outlook to the proposed rouble-denominated Loan Participation Notes to be issued by RusHydro Finance Limited, a special purpose vehicle, incorporated under the laws of Ireland, of JSC RusHydro, for the sole purpose of financing a loan to RusHydro. Ratings Rationale The (P) Ba1 rating assigned to the Notes is equivalent to RusHydro's corporate family rating, given that RusHydro Finance is issuing the Notes for the sole purpose of financing a loan to RusHydro and therefore Noteholders are relying solely on the latter's creditworthiness to service and repay the Notes. RusHydro will use proceeds of the respective loan for general corporate purposes, including investments. The provisional rating and provisional LGD assessment of LGD4 are based on the assumption that the Notes will rank pari passu with other senior unsecured and unsubordinated financial indebtedness of RusHydro (apart from obligations mandatorily preferred by law). The proposed Notes are subject to some restrictions and covenants, including a limitation on incurrence of indebtedness. Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavor to assign a definitive rating to the Notes. A definitive rating may differ from a provisional rating. Moody's regards RusHydro as a government-related issuer. In accordance with Moody's GRI rating methodology, the ratings of RusHydro and of the proposed Notes incorporate uplift from RusHydro's standalone credit quality measured by a Baseline Credit Assessment of 13 (on a scale of 1 to 21 and equivalent to Ba3). The uplift to the BCA is driven by the credit quality of the Russian government, which owns around 60% of the company's shares, and Moody's assessment of strong probability of state support in the event of financial distress, as well as high default dependence between the company and the government. RusHydro's ratings remain constrained by the low visibility of the evolution of its credit profile in the medium term, with headroom under the company's financial metrics regarded as transitional. At the same time, the ratings are underpinned by the company's strong business fundamentals as Russia's largest low-cost hydro generator, which is well positioned to benefit from the liberalization of Russia's wholesale power market and should be able to absorb the risks of market fluctuations. The outlook on the ratings is stable, factoring in the headroom in the company's financial profile at the end of 2009 and its expected medium-term development within the current rating category and acceptable liquidity. Moody's currently considers an upward revision in RusHydro's ratings to be unlikely in the near term as the company's credit profile is expected to evolve, pressured by the challenges both specific to the company and the Russian electric utility sector. RusHydro's BCA could be negatively impacted, if there were a negative shift in the evolving regulatory and market framework and the company failed to limit deterioration of its financial profile, with the Debt-to-EBITDA ratio above 3x, while FFO interest coverage and the RCF-to-Debt ratios fall below 5.0x and 30%, respectively. The company's inability to maintain adequate liquidity could also pressure the rating. Negative pressure on the rating could also result from Moody's assessment of a material reduction in the probability of state support. Headquartered in Moscow, RusHydro is Russia's largest generator of hydro electricity. RusHydro is controlled by the Russian government, whose stake in the company is approximately 60%. In 2009, the company's contribution to Russia's total installed capacity and electricity output was around 12%, if the SS HPP capacity was counted, and 9%, respectively. In 2009, RusHydro's IFRS revenues were RUB115.6 billion (approximately US$3.7 billion). Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information, confidential and proprietary Moody's Analytics' information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. ========= I T A L Y ========= ARES FINANCE: Fitch Junks Ratings on Two Classes of Notes --------------------------------------------------------- Fitch Ratings has downgraded Ares Finance S.r.l.'s class E and F floating-rate notes, due March 2011, and assigned Recovery Ratings: -- EUR11.9m class E (XS0134905388): downgraded to 'CCsf' from 'BBsf'; 'RR3' assigned -- EUR15m class F (XS0134905545): downgraded to 'Csf' from 'Bsf'; 'RR6' assigned The downgrade reflects the further weakening in collections performance, as of September 2010, which is expected to result in a failure to repay the outstanding notes by the legal final maturity in March 2011. Between March and September 2010, gross recoveries were only EUR10.1 million, the lowest level since transaction closing in September 2001 and, compared to EUR18.7 million for the six-month period to March 2010, below Fitch's expectations for the period. Total cumulative gross collections as of September 2010 were EUR770.1 million. The ongoing delays between the final resolution of claims in the distribution phase and the actual receipt of collections by the servicer expose the remaining classes to a notable risk of a missed principal payment. Although Fitch believes that the portfolio will be able to continue to generate recoveries after March 2011, according to the transaction documentation the notes will be cancelled by legal final maturity. As a result, the noteholders will have no further claims against the collateral after March 2011. Approximately EUR24 million of expected recoveries from positions with full court resolution are currently either deposited in tribunal accounts or pending payment of the auction price. The distribution process has been remarkably inefficient throughout the life of the transaction. This has slowed down the repayment of the notes, while increasing expenses including servicer, legal and asset manager fees. In the last collection period, net recoveries available for distribution after senior fees (EUR3.4 million) were only EUR6.7 million. Although 16% of the outstanding portfolio by gross book value is in the distribution phase, 72% by GBV consists of bankrupted claims, for which the recovery timing is generally longer than for claims where a borrower is solvent. Moreover, the longer timeframe of tribunals in central and southern Italy also explains the delayed resolution of many claims at an advanced legal stage. Ares Finance S.r.l. is a securitization of a portfolio of Italian NPLs serviced and managed by Societa Gestione Crediti S.r.l./Archon Group Italia S.r.l. (rated 'RSS2+'/'CSS2+'). As of September 2010, the outstanding portfolio consisted of 3,923 unresolved claims with a total GBV of EUR834.7 million. At closing, the GBV of the pool was EUR1,540.4 million. The pool is mainly located in central and southern Italy (36% and 34% by GBV, respectively) and primarily consists of residential claims (33% by GBV). =================== L U X E M B O U R G =================== BOZEL SA: Gets Nod to Hire BDO as U.S. Financial Advisor -------------------------------------------------------- Bozel S.A. sought and obtained authorization from the U.S. Bankruptcy Court for the Southern District of New York to employ BDO Consulting Corporate Advisors, LLC, as financial advisor to the Debtor effective as of August 6, 2010. BDO Consulting will, among other things: -- at the request of the Debtor's sole director, marshall and analyze the books and records of the Debtor and Bozel LLC and perform analysis as required; -- at the request of the Debtor's sole director, assist in managing the day-to-day affairs of the Debtor and Bozel LLC; -- prepare and file with the Court all required financial and operational reports of the Debtor; and -- at the request of the Debtor's sole director, develop financial and management presentations of the Debtor or Bozel LLC as may be required. BDO Consulting will be paid based on the hourly rates of its personnel: Partners/Managing Directors US$550 to US$800 Directors/Senior Managers/Principals US$350 to US$600 Managers/Vice Presidents US$225-US$500 Seniors/Associates US$200-US$350 Staff US$125-US$225 To the best of the Debtor's knowledge, BDO Consulting is a "disinterested person," as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. Bozel S.A. is a mineral mining company based in Luxembourg. Bozel S.A. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-11802) on April 6, 2010. In its petition, the Debtor estimated assets ranging from US$50 million to US$100 million, and debts ranging from US$10 million to US$50 million. William F. Savino, Esq., Daniel F. Brown, Esq., and Beth Ann Bivona, Esq., at Damon Morey LLP in Buffalo, N.Y., represent the Debtor. =========== P O L A N D =========== * Marek Krol Joins Chadbourne's Warsaw Office --------------------------------------------- The international law firm Chadbourne & Parke LLP disclosed that top Polish banking and finance attorney Marek Krol has joined the firm as an international partner and in the Warsaw office. Mr. Krol was most recently a partner at CMS Cameron McKenna, where he served as head of the banking and finance department. Previously, he led the structured finance department at White & Case. Mr. Krol advises clients on banking and finance transactions, including project financing, real estate investments, syndicated loans, air transportation and maritime equipment purchase financing, loan repayments, bond issues, debt instruments and securitization. He has extensive experience advising on real estate finance projects involving hotels, office buildings and commercial and recreational centers. Mr. Krol has represented clients in negotiations for the acquisition of large commercial properties, obtaining administrative approvals, fund formation and negotiating lease agreements with commercial building owners. Mr. Krol previously worked for the Polish government in the legal department of the Ministry of Foreign Economic Cooperation, the Ministry of Foreign Trade and the Ministry of Foreign Affairs. He also served at KPMG Poland and as legal director in a major Polish bank, where he advised on the formation of bank syndicates financing some of the largest investment projects in Poland. "Marek's inside knowledge of the Polish banking system, as well as his project finance experience, make him an excellent fit for Chadbourne," said Chadbourne Managing Partner Charles K. O'Neill. "As our Warsaw office prepares to celebrate its 20th anniversary, the addition of Marek to our finance team demonstrates our commitment to the Polish banking and finance industry and enhances our ability to provide clients with sound legal advice on even the most complex transactions." "Chadbourne is very pleased to welcome Marek as we strengthen our finance practice in Warsaw," said Wlodzimierz Radzikowski, Managing Partner of Chadbourne's Warsaw office. "His robust experience and skill in the banking and finance sectors make him a tremendous asset to our team and our clients." Mr. Krol is a graduate of the Faculty of Law and Administration and the Faculty of Political Sciences at the University of Warsaw. About Chadbourne & Parke LLP Chadbourne & Parke LLP -- http://www.chadbourne.com/-- an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, venture capital and emerging companies, energy/renewable energy, communications and technology, commercial and products liability litigation, arbitration/IDR, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Russia, Central and Eastern Europe, the Middle East and Latin America. The Firm has offices in New York, Washington, DC, Los Angeles, Mexico City, Sao Paulo, London, Moscow, St. Petersburg, Warsaw, Kyiv, Almaty, Dubai and Beijing. ============= R O M A N I A ============= BLUE AIR: Request for Suspension of Insolvency Procedures Rejected ------------------------------------------------------------------ The Bucharest Court of Law rejected Blue Air's request for suspension of insolvency procedures brought by four of its creditors, Financiarul.ro reports, citing judiciary administrator Remus Borza of Assistance Insolv. "Bucharest Tribunal rejected on October 6 the Blue Air request for the suspension of the insolvency procedure and as such this procedure has been launched. We are to continue the process of company restructuring, so that these debts are paid," Financial.ro quoted Mr. Borza as saying. According to Financial.ro, Mr. Borza said Blue Air owes EUR200,000 to creditors. The company insists that the insolvency was eschewed through the debt payment to the companies who filed the lawsuit, Financial.ro, notes. As reported in the Troubled Company Reporter-Europe on Oct. 12, 2010, MEDIAFAX said the Bucharest Court allowed insolvency claims against Blue Air filed by airline Carpatair and Service Excellence Solutions. MEDIAFAX disclosed Blue Air representative Florentina Ivan said the airline will challenge the court's ruling as it registers no debts to the two companies. Gheorghe Racaru, the parent group's strategy and development manager said Blue Air will continue to operate, either on its own or under a court-appointed Administrator, according to MEDIAFAX. Blue Air is the largest Romanian private air operator. The airline operates flights to more than 50 destinations in Europe, being the official transporter for the Romanian Posts. It offers tickets to destinations outside Europe, in partnership with Blue Panorama. =========== R U S S I A =========== B&N BANK: Moody's Assigns 'B2' Rating to Senior Unsec. Bonds ------------------------------------------------------------ Moody's assigns a B2 long-term global local currency debt rating to B&N Bank's senior unsecured RUB1 billion bond issuance maturing in 2013. The rating carries a stable outlook. Any subsequent senior debt issuance by B&N Bank will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. Ratings Rationale The assigned rating is in line with B&N Bank's global local currency deposit rating, which is in turn based on the bank's E+ Bank Financial Strength rating, which maps to a baseline credit assessment of B2. The deposit and debt rating of B2 does not incorporate any uplift either from shareholder or from systemic support. B&N's BFSR is primarily constrained by, the challenging operating environment in Russia, relatively high concentrations in the loan portfolio, current pressure on profitability in consequence of asset quality deterioration and a squeeze in interest margins, and some corporate governance and risk management issues - which is, however, common for Russian banks. The rating also takes into account the bank's good visibility in the retail-deposit-taking market, adequate geographical diversification of its business within Russia and satisfactory financial indicators - notably, capitalization and a sound liquidity profile. Headquartered in Moscow, Russia, B&N Bank reported total assets of RUB85.3 billion and net loss of RUB1,661 million according to IFRS at YE 2009. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, public information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. CREDIT BANK: Moody's Assigns 'B1' Rating to Senior Unsec. Debt -------------------------------------------------------------- Moody's assigns a B1 long-term global local currency debt rating to Credit Bank of Moscow's senior unsecured debt. The rating carries a Stable outlook. Any subsequent senior debt issuance by CBM will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. The rating of B1 was assigned to these debt instruments; -- RUB3,000M Senior Unsecured Regular Bond due 4/08/2015 -- RUB2,000M Senior Unsecured Regular Bond due 7/14/2015 -- RUB2,000M Senior Unsecured Regular Bond due 8/07/2012 -- RUB2,000M Senior Unsecured Regular Bond due 4/25/2012 -- RUB2,000M Senior Unsecured Regular Bond due 3/15/2011 Ratings Rationale The assigned rating is in line with CBM's global local currency deposit rating of B1, which is in turn based on the bank's E+ BFSR (mapping to a baseline credit assessment of B1). It does not incorporate any expectation of systemic or shareholder support for CBM in case of need. The rating is constrained by CBM's modest market positions, significant exposure to market risk which renders profitability volatile, moderately high risk appetite and potentially vulnerable liquidity which is dependent on volatile sources. More positively, the BFSR reflects the bank's established market positions in certain niches, resulting in solid stable income generation power, reasonable efficiency, and historically adequate capitalization supported by the shareholder. Headquartered in Moscow, Russia, Credit Bank of Moscow reported total assets of RUB87 billion and net income of RUB780 million according to IFRS at YE 2009. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. GAZPROMBANK OAO: Moody's Assigns Long-Term Rating to Senior Debt ---------------------------------------------------------------- Moody's assigns a Baa3 long-term global local currency debt rating to Gazprombank's senior unsecured debt. The rating carries a stable outlook. Any subsequent senior debt issuance by Gazprombank will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. The rating of Baa3 was assigned to these debt instruments -- RUB5,000M Senior Unsecured Regualar Bond due 1/27/2011 -- RUB10,000M Senior Unsecured Regualar Bond due 10/10/2011 -- RUB20,000M Senior Unsecured Regular Bond due 11/15/2012 -- RUB20,000M Senior Unsecured Regular Bond due 11/22/2012 -- RUB5,000M Senior Unsecured Regular Bond due 11/20/2013 Ratings Rationale The assigned rating is in line with Gazprombank global local currency deposit rating of Baa3, which is in turn based on (i) the bank's E+ BFSR (mapping to a baseline credit assessment of B2); and (ii) Moody's assessment of a high probability of support in the event of need from either Gazprom (stand-alone credit risk profile equivalent to a Ba1 and an issuer rating of Baa1/stable) or the Russian authorities (debt rating of Baa1/stable) --which results in a five notch uplift from its B2 BCA. The E+ BFSR is constrained by potential corporate governance issues that reflect Gazprombank's role in fulfilling economic objectives for Gazprom and the state: it is extensively involved in financing projects and undertaking acquisitions for Gazprom (potentially undermining its capital and liquidity position) and acts as a tool to support the banking sector and the real economy in times of crisis. The BFSR is also constrained by the bank's modest capital position, which suffered one-off losses from its derivative and securities positions, high level of earnings volatility, and high single-name and sectoral concentrations on both sides of the balance sheet. The BFSR also reflects the difficult operating environment. The rating is, however, underpinned by Gazprombank's well- established franchise in servicing Russia's gas industry and related industries, stemming from: (i) its role as the house bank for Gazprom; (ii) its better-than-average access to liquidity thanks to its link with Gazprom and its role as a government agent in promoting its economic objectives; (iii) its position as the third-largest bank in the country; and (iv) its exposure to the country's largest companies, which are important for the economy and are eligible for state assistance in times of crisis. The bank's Baa3 global local currency deposit rating is based on Moody's assessment of a very high probability of support from either Gazprom or the Russian authorities in the event of need, based on Gazprombank's state ownership and importance to Gazprom's operations and the banking system as a whole, as the third-largest bank in Russia. Headquartered in Moscow, Russia, Gazprombank reported total assets of US$57.6 billion and net income of US$1.9 billion according to IFRS at YE 2009. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. MOSCOW BANK: Moody's Assigns 'B1' Rating to Senior Unsec. Debt -------------------------------------------------------------- Moody's assigns a B1 long-term global local currency debt rating to senior unsecured debt of Moscow Bank for Reconstruction and Development. The rating carries a stable outlook. Any subsequent local currency senior unsecured debt issuance by MBRD will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. The rating of B1 was assigned to these debt instruments: -- RUB5,000M Senior Unsecured Regular Bonds due 12.06.2014 -- RUB5,000M Senior Unsecured Regular Bonds due 27.02.2014 -- RUB3,000M Senior Unsecured Regular Bonds due 23.04.2013 -- RUB3,000M Senior Unsecured Regular Bonds due 28.03.2013 Ratings Rationale The assigned rating is in line with MBRD's global local currency deposit rating, which is in turn based on (i) the bank's E+ BFSR (mapping to a baseline credit assessment of B2); and (ii) Moody's assessment of a moderate probability of support in the event of need from the bank's controlling shareholder -- JSFC Sistema (Sistema, rated Ba3 with stable outlook) -- which results in a one-notch uplift from the bank's B2 BCA. MBRD's E+ BFSR is constrained by the bank's still considerable (albeit somewhat reduced) credit exposure to related parties, the significant concentration of the loan portfolio and funding base, its weak financial performance and the deterioration of its asset quality. At the same time, MBRD's rating reflects the ongoing strategic and operational assistance provided to the bank by its parent, which is proven, inter alia, by regular capital injections to the bank and the provision of subordinated loans, as well as by the funding support stemming from Sistema group of companies. Moody's maintains its assumptions of a moderate probability of parental support to MBRD from Sistema (which controlled directly or indirectly 96.15% in MBRD as at YE2009), in case of need. The rating agency also recognizes the high degree of interdependence between the parent and the subsidiary, as evidenced by deep involvement of MBRD in providing financial services to Sistema companies and the bank's high reliance on funding inflowing from the related parties. These assumptions currently result in a one- notch uplift of MBRD's deposit ratings to B1 from the bank's BCA of B2. Headquartered in Moscow, Russia, MBRD reported total consolidated assets of US$7.3 billion, total equity of US$354 million and net loss of US$89 million according to IFRS at 31 December 2009. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. MOSCOW MORTGAGE: Moody's Assigns 'Ba2' Rating to Senior Debt ------------------------------------------------------------ Moody's assigns a Ba2 long-term global local currency debt rating to Moscow Mortgage Agency's senior unsecured debt. The rating carries a Stable outlook. Any subsequent senior debt issuance by MMA will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. The rating of Ba2 was assigned to these debt instruments: -- RUB1,500M Senior Unsecured Regular Bond due 23.02.2012 -- RUB2,000M Senior Unsecured Regular Bond due 17.07.2014 Ratings Rationale The assigned rating is in line with MMA's Ba2 global local currency deposit rating, which is in turn based on (i) the bank's E+ BFSR (mapping to a baseline credit assessment of B3); and (ii) Moody's assessment of a high probability of support in the event of need from the bank's controlling shareholder -- City of Moscow (Baa1/Stable) -- which results in a multi- notch uplift from its B3 BCA. The BFSR is constrained by the limitations of MMA's niche market -- predominantly under the City of Moscow's funding programs -- which makes its business potentially exposed to changes in the strategic priorities of the City's government. It also results in low efficiency of capital usage and suppressed stable revenue generation, compared with independent market players. In addition, the nature of MMA's business results in significant long-term exposures to the construction sector. Retail lending risks are significantly mitigated by the natural credit enhancements and nature of regional concentration (Moscow region), although its corporate loan book is more vulnerable, and is exposed to the longer term macroeconomic shocks. Funding has historically been significantly dependant on the shareholders' desire to provide financing (including through MMA's sister bank -- Bank of Moscow) and wholesale funding. As a result, any significant rise in third-party leverage could trigger a significant liquidity squeeze, if refinancing is not an option. At the same time, the rating is supported by the willingness and ability of the shareholders to provide on-going capital, compensation of expenses and funding support, and the high barriers to MMA's niche market which shields it from competition. MMA could find it difficult to withstand competition, due to its low historical expertise in operating in a competitive environment. In addition, retail portfolio exposure benefits from better-than-average asset quality due to natural credit enhancements (e.g., low LTV ratios) and operations in the Moscow region that demonstrate less volatility compared with other regions. MMA's Ba2 long-term deposit rating is based on Moody's assessment that there is a high probability of its 100% owner - the City of Moscow (Baa1/Stable) - extending support to the bank in the event of need. The likelihood of support is confirmed by its policy role, successive capital injections from the city government since MMA's inception in 2000, and by the presence of high-ranking Moscow officials on its supervisory board. Headquartered in Moscow, Russia, Moscow Mortgage Agency reported total assets of RUB10.6 billion and net income of RUB70 million according to IFRS at YE 2009. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. PETROCOMMERCE BANK: Moody's Assigns 'Ba3' Long-Term Debt Rating --------------------------------------------------------------- Moody's assigns a Ba3 long-term global local currency debt rating to Petrocommerce Bank's senior unsecured debt. The rating carries a negative outlook. Any subsequent senior debt issuance by Petrocommerce will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. The rating of Ba3 was assigned to these debt instruments: -- RUB5,000M Senior Unsecured Regular Bond due 21.12.2014 -- RUB3,000M Senior Unsecured Regular Bond due 06.07.2011 -- RUB3,000M Senior Unsecured Regular Bond due 22.08.2012 -- RUB3,000M Senior Unsecured Regular Bond due 22.08.2012 Ratings Rationale The assigned rating is in line with Petrocommerce's global local currency deposit rating, which is in turn based on the bank's D- Bank Financial Strength Rating (mapping to a baseline credit assessment of Ba3. The bank's rating is constrained by the bank's currently high level of problem loans, notable reduction (by 23%) in the bank's loan book in 2009, which negatively affects the bank's profitability and efficiency, and recently increased market risk appetite as a large portion of assets is invested in Russian fixed-income and equity securities. However, the rating is supported by the high capital adequacy maintained by the bank despite the severe stress, a sizeable cushion of very liquid assets and its strong links with Lukoil and IFD Kapital Group, which renders Petrocommerce's deposit base sticky and underpins its revenue. Headquartered in Moscow, Russia, Petrocommerce Bank reported total assets of RUB172 billion and net income of RUB12 million according to IFRS at YE 2009. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. RUSHYDRO FINANCE: Fitch Assigns 'BB+' Senior Unsecured Rating ------------------------------------------------------------- Fitch Ratings has assigned RusHydro Finance Limited's prospective rouble-denominated Eurobond issue an expected local currency senior unsecured rating of 'BB+'. RusHydro Finance Limited is a finance vehicle for JSC RusHydro, the Russian hydro electricity generation company. The agency has also assigned RusHydro a Long- term local currency Issuer Default Rating of 'BB+' with a Positive Outlook. RusHydro's Long-term foreign currency IDR is 'BB+' with a Positive Outlook and its National Long-term rating is 'AA(rus)' with a Positive Outlook. The final rating of the Eurobond issue is contingent upon the receipt of final documentation conforming materially to information already received by Fitch. Proceeds from the bonds are expected to be used by RusHydro for capital expenditure and general corporate purposes. On 10 September 2010, Fitch revised the Outlook for RusHydro to Positive from Stable following Fitch's revision of the Russian Federation's ratings Outlook to Positive from Stable. RusHydro had negative net leverage (net adjusted debt/EBITDAR) at year-end 2009. Fitch's five-year forecast is for the company to maintain very low net leverage (less than 1x) and funds from operations interest coverage above 8x. RusHydro's ratings are notched down by two levels from the sovereign's due to its state ownership, the strategic importance of the company to the state, and its reliance on investment funding from the state. TRANSCREDITBANK JSC: Moody's Assigns 'Ba1' Rating to Senior Debt ---------------------------------------------------------------- Moody's assigns a Ba1 long-term global local currency debt rating to TransCreditBank's senior unsecured debt. The rating carries a Stable outlook. Any subsequent senior debt issuance by TCB will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. The rating of Ba1 was assigned to these debt instruments: -- RUB5,000M Senior Unsecured Regular Bond due 2011 -- RUB3,000M Senior Unsecured Regular Bond due 2012 -- RUB3,000M Senior Unsecured Regular Bond due 2013 -- RUB4,0000M Senior Unsecured Regular Bond due 2014 Ratings Rationale The assigned rating is in line with TCB's global local currency deposit rating of Ba1, which is in turn based on (i) the bank's D- BFSR (mapping to a baseline credit assessment of Ba3); and (ii) Moody's assessment of a high probability of support in the event of need from the bank's controlling shareholder -- Russian Railways (Baa1/Stable) -- which results in a two -- notch uplift from its Ba3 BCA. The D- BFSR is underpinned by (i) TCB's solid franchise which is supported by its relationship with Russian Railways, a state railroad monopoly, (ii) its good brand recognition, (iii) reasonable liquidity management supported by good access to funding sources and (iv) reasonable financial indicators demonstrating some resilience to crisis events. At the same time, the BFSR is constrained by (i) still insufficient diversification of the client base and the resulting high dependence on a single client/related party/industry resulting in significant concentration levels on the asset and liabilities side, (ii) significant dependence on strategic priorities of RR in its longer-term development, and (iii) potential corporate governance issues stemming from potential ability of RR to influence business decisions. The Ba1 Global Local Currency deposit rating is based on Moody's assessment of high probability of support from RR in the event of need, given TCB's controlling ownership by RR and importance for its operations. Headquartered in Moscow, Russia, TransCreditBank reported total assets of RUB258 billion and net income of RUB4 billion according to IFRS at YE 2009. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. * Fitch Affirms 'BB-' Long-Term Ratings on Ulyanovsk Region ----------------------------------------------------------- Fitch Ratings has affirmed the Ulyanovsk Region's Long-term foreign and local currency ratings at 'BB-' and the region's Short-term foreign currency rating at 'B'. The agency also affirmed the region's National Long-term rating at 'A+(rus)'. All the Long-term rating Outlooks are Stable. The affirmation of the region's ratings reflects satisfactory budgetary performance, low direct risk and low contingent liabilities. However, the ratings also factor in a weak socio- economic profile and modest self-financing capacity of capital outlays. Sustainable improvement of the region's operating balance at above 10% of operating revenue, coupled with maintenance of moderate indebtedness, would be positive for the ratings. Downward rating pressure would arise from significant growth of debt leading to deterioration of the debt coverage ratio. The region's budgetary performance improved in 2009, with its operating balance increasing by 2.3x, reaching 9% of operating revenue compared with 4.6% in 2008. This increase was supported by a 45% increase in current transfers from the federal budget in 2009, which compensated for the stagnation of tax revenue. Fitch expects the region's full-year operating balance to be about 11- 12% of operating revenue in 2010. The region's direct risk increased in 2009 to RUB2.1 billion from RUB1.1 billion in 2008, but remained low at 9.2% of current revenue. During the first eight calendar months of 2010 (8M10), direct risk further increased to RUB2.4 billion and is likely to remain at this level until end-2010. Relatively cheap federal budget loans compose 75% of direct risk stock while the remaining 25% consists of bank loans. Both budget and bank loans have maturities in 2012-15, which eliminates short-term refinancing risk. Fitch does not expect the direct risk to rise significantly above 10% of current revenue in 2010-12. Direct risk to the current balance ratio should not exceed 1.5 years, as the region has no intention of increasing its debt stock in the medium-term. The region's contingent risk is low and solely composed of the debt of region's public-sector entities; it totalled a negligible RUB48 million in 2009 and is fully self-serviced by the companies. Capital expenditure accounted for 26.8% of total expenditure in 2009. Despite significant capital spending, the region recorded a minor surplus before debt variation (0.3% of total revenue), as 76% of total capex was financed by capital transfers from the federal budget. Fitch expects capital expenditure to be lower in 2010-12, averaging 15% of the total due to the completion of major infrastructure projects. The region's socio-economic profile is weaker than that of the average Russian region. The per capita gross regional product was 26% below the national median in 2008, while per capita income was 81% of the national median in 2008. In 2009, GRP declined by a significant 15%, driven by a 17% decrease in the industrial sector, which dominates the regional economy. However, the economy demonstrates fast recovery, as industrial output in the region increased by 34% in H110. Therefore, the administration forecasts GRP to rise by around 10% yoy in 2010. Ulyanovsk, in the centre of European Russia, is part of the Privolzhskiy Federal District. It contributed 0.4% of national GDP in 2008 and accounted for 0.9% of the country's population. ========= S P A I N ========= ABENGOA FINANCE: Fitch Assigns 'BB' Rating to Senior Notes ---------------------------------------------------------- Fitch Ratings has assigned Abengoa Finance, S.A.U. proposed US$600 million senior unsecured notes due 2017 an expected rating of 'BB'. The final rating is contingent upon the receipt of final documents conforming to information already received. Abengoa Finance is fully owned by Abengoa, S.A. (rated 'BB'/Outlook Stable), a Spanish engineering and construction company with operations in renewable energy, bio-fuels, power infrastructure, environmental and IT services. The notes will be jointly, severally and irrevocably guaranteed by Abengoa, and its key subsidiaries in engineering, bioenergy and environmental services divisions. The notes and note guarantees will rank equally with Abengoa's existing credit facilities and notes. FONDO DE TITULIZACION: S&P Affirms Low-B Ratings on Various Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Fondo de TitulizaciOn de Activos Santander Hipotecario 2's class A, B, C, D, and E notes. The rating actions follow S&P's credit analysis of this transaction based on the most recent information S&P has received as of July 2010. Based on this information, the credit enhancement for Santander Hipotecario 2 remains commensurate with the current ratings on the notes, in S&P's opinion. Due to a significant portion of loans defaulting and being provisioned for with available resources in the transaction, the transaction has already used its entire cash reserve. This is reflected in the 'B (sf)' and 'B- (sf)' ratings on the class D and E notes, respectively. S&P had already lowered its rating on the class F notes in this transaction to 'D (sf)' in July 2009 after missed interest payments. When the percentage of cumulative defaulted loans over the original balance of the class A to E notes in this transaction reaches a certain level, the priority of payments changes so as to postpone interest payments to the related class of notes and divert these funds to amortize the most senior class of notes. This mechanism aims to protect the most senior classes of notes, while increasing the default probability of the more junior classes of notes as cumulative defaults increase. Specifically the trigger levels for the class B, C, D, and E notes are 17.0%, 12.5%, 10.0%, and 7.0%, respectively. However, the relatively high trigger levels limit the protection available for the senior notes, in S&P's view. This is reflected in the 'AA (sf)' rating on the class A notes. As of the last payment date for this transaction, the ratio of cumulative defaults over the original balance was 1.36%, up from 0.52% about a year before. S&P therefore believe that the triggers in Santander Hipotecario 2, for all classes of notes, will not be reached in the near future. The portfolio in this transaction securitized mortgages granted to individuals for the acquisition of residential properties and with loan-to-value ratios higher than 80%. Banco Santander S.A. originated the loans. Ratings List Fondo de Titulizacion de Activos Santander Hipotecario 2 EUR1.973 Billion Mortgage-Backed Floating-Rate Notes and an Overissuance of Floating-Rate Notes Ratings Affirmed Class Rating ----- ------ A AA (sf) B BBB (sf) C BB (sf) D B (sf) E B- (sf) Rating Unaffected Class Rating ----- ------ F D (sf) TDA 24: Default Risk Cues S&P to Lower Rating on Class D Notes -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit rating on TDA 24, Fondo de Titulizacion de Activos' class D notes due to increased default risk. At the same time, S&P put on CreditWatch negative its ratings on the class C and D notes and affirmed its ratings on the class A1 and A2 notes. The rating actions follow a review of this transaction based on the September 2010 investor report. Cumulative defaults, as a percentage of the original pool balance, have increased to 2.96% in August 2010, from 2.48% in March 2010 and 1.78% in October 2009. In September 2009, TDA 24 completely depleted its cash reserve because of rapidly increasing defaults, coupled with a structural mechanism that requires a full provisioning for defaulted loans (defined as loans in arrears for more than 12 months). The increasing cumulative default level raises the risk that interest deferral triggers could be breached. These triggers state that if the cumulative level of defaulted loans reaches certain levels over the original balance of the mortgage-backed notes, the priority of payments changes to divert the interest payments from the related class of notes toward amortizing the most senior notes. The class B, C, and D notes' trigger levels are 6.10%, 4.70%, and 3.50%, respectively. As of August 2010, the ratio of cumulative defaults over original balance was 2.96%. As a result, S&P considers that interest on the class D notes could be deferred and therefore default in the near future if the increase of cumulative defaults continues at its current pace (it has risen to 2.96% in August 2010 from 1.39% in August 2009). In S&P's opinion, the current high level of arrears and defaults, and the pace at which they are rising, could have a negative effect on the class B and C notes' creditworthiness. For this reason, S&P has placed these on CreditWatch negative. S&P will now perform a further credit and cash flow analysis to resolve these CreditWatch placements. TDA 24 is a residential mortgage-backed securities transaction that closed in January 2005. It securitizes a portfolio of residential mortgage loans secured over properties in Spain. Caja de Ahorros de Castilla La Mancha, Credifimo, and Bankpyme originated and service the loans. Ratings List TDA 24, Fondo de Titulizacion de Activos EUR485 Million Mortgage-Backed Floating-Rate Notes Rating Lowered Rating ------ Class To From ----- -- ---- D CCC- (sf) B- (sf) Ratings Placed on CreditWatch Negative Rating ------ Class To From ----- -- ---- B BBB+ (sf)/Watch Neg BBB+ (sf) C BB- (sf)/Watch Neg BB- (sf) Ratings Affirmed Class Rating ----- ------ A1 AAA (sf) A2 AAA (sf) ===================== S W I T Z E R L A N D ===================== UBS AG: Fitch Upgrades Individual Rating to 'C' From 'D' -------------------------------------------------------- Fitch Ratings has upgraded UBS AG's Individual Rating to 'C' from 'D'. At the same time, Fitch has affirmed UBS's Long-term Issuer Default Rating at 'A+' with a Stable Outlook, Short-term IDR at 'F1+', Support Rating at '1' and Support Rating Floor at 'A+'. Fitch has also upgraded UBS's trust preferred securities to 'BBB-' from 'BB' and removed them from Rating Watch Negative. In addition, the agency affirmed UBS Limited's 'A+' and 'F1+' IDRs and Support Rating at '1'; the Outlook on its Long-term IDR is Stable. The upgrade of the Individual Rating reflects the extent to which UBS has been able to recover from the considerable financial hits it took when financial markets turned from benign to illiquid during 2008. Last year was one of consolidation and restructuring, while 2010 is seeing a return to more normal business. Robust but not outstanding results in the first two quarters of 2010 for the bank as a whole have come primarily from its investment bank segment. Wealth management is also showing signs of a turnaround, although it continued to register net client asset outflows from Western Europe in Q210. Given the reputational damage these two core businesses suffered during the financial crisis, it will take more time for UBS to return fully to the position of strength it enjoyed pre-crisis, and management is targeting reaching these levels while keeping risks lower. UBS has reduced risks across the board. Reduced trading revenue in the second half of Q2 resulted from lower client flows, while UBS avoided taking large positions on its own book and so did not record net trading losses. Asset quality is strong now that many legacy positions have been transferred, mainly to a fund owned by the Swiss National Bank and a fund managed by Blackrock, and others are winding down. Lending is not a major business, although UBS remains a committed traditional banker in Switzerland. Impairments are small. Caught out by misjudging liquidity before, this is now a priority. Loans are amply covered by deposits and wholesale funding is diversified. Capitalization is good by most international comparisons, and Fitch expects further core capital to be built up from retained earnings. The Swiss regulator's recently announced capital requirements for the two large Swiss banks are more stringent than Basel III's, but Fitch expects UBS to be able to stay on track with the timetable put forward. UBS' Long-term IDR is at its Support Rating Floor. Along with its Short-term and Support ratings, these are based on the substantial support the bank received from the Swiss government in 2008, and Fitch's view that such support would be forthcoming again if necessary. Ties between UBS and the Swiss state will remain strong at least until global banking has stabilized and resolution schemes are in place globally. UBS's IDRs would be downgraded if ties with the Swiss state loosen before the bank is able to regain its financial profile compatible with its IDRs on a standalone basis. They would also be downgraded if Fitch changes its general view of state support for banks, which may result from any further and more practical developments that could mean that authorities no longer support all senior creditors when banks fail. In this context, a report by an expert commission appointed by the Swiss Federal Council was presented to the Council on 30 September 2010. The primary focus of the report is to ensure that the two large, systemically important Swiss banks are made to maintain strong enough balance sheets to withstand a global financial crisis without needing state support. The Individual Rating would benefit from successful implementation of business plans, with no further franchise erosion and no signs of increasing the much reduced risk profile without commensurate compensation in earnings. UBS is a leading global provider of wealth management, one of the world's largest trading/investment banks and the largest domestic bank in Switzerland. The upgrade of UBS's trust preferred securities relates to the upgrade of the Individual Rating in line with Fitch's criteria for rating hybrid instruments'. Under the criteria, hybrid instruments are notched from the standalone IDR. UBS Limited's ratings reflect the irrevocable and unconditional guarantee by UBS for all of UBS Limited's contractual counterparties. Rating actions are: UBS AG: -- Long-term IDR: affirmed at 'A+'; Outlook Stable -- Short-term IDR: affirmed at 'F1+' -- Individual rating: upgraded to 'C' from 'D' -- Support rating: affirmed at '1' -- Support Rating Floor: affirmed at 'A+' -- Senior unsecured debt: affirmed at 'A+' -- Subordinated debt: affirmed at 'A' -- Commercial paper and Short-term debt: affirmed at 'F1+' UBS Limited: -- Long-term IDR: affirmed at 'A+'; Outlook Stable -- Short-term IDR: affirmed at 'F1+' -- Support rating: affirmed at '1' * UBS Preferred Funding Trust 2 and V Preferred Securities: upgraded to 'BBB-' from 'BB'; removed from Rating Watch Negative * UBS Preferred Funding Trust (Jersey) Limited Preferred Securities: upgraded to 'BBB-' from 'BB'; removed from Rating Watch Negative * UBS Capital Securities (Jersey) Limited Preferred Securities: upgraded to 'BBB-' from 'BB'; removed from Rating Watch Negative ============= U K R A I N E ============= UKRTELECOM OAO: May Be Put Up for Auction on December 28 -------------------------------------------------------- Ukraine's government may auction OAO Ukrtelecom on Dec. 28, Daryna Krasnolutska at Bloomberg News reports, citing Oleksandr Ryabchenko, the head of the state property fund. As reported by the Troubled Company Reporter-Europe on Feb. 25, 2010, Bloomberg News, citing Interfax, said that Ukrtelecom sought to delay its payment on a US$500 million loan from Deutsche Bank AG and Credit Suisse Group AG. Bloomberg disclosed Interfax, citing a letter from Ukrtelecom Chief Executive Officer Heorhiy Dzekon to the head of Ukraine's communications agency, said the company wanted to extend the deadline for 75% of the payment by at least three months. The news agency, as cited by Bloomberg, said Ukrtelecom didn't have enough funds and wanted to avoid taking more expensive short-term loans to pay the debt on time. Ukrtelecom VAT (Ukrtelecom JSC) -- http://www.ukrtelecom.ua/-- is a Ukraine-based national telecommunication operator. It provides telephone communication services throughout Ukraine, rendering all kinds of telecommunication services: international, long-distance and local telephony; data transmission including based on Asynchronous Transfer Mode (ATM)/Frame Relay technology; Internet network access including dial-up and broadband access based on digital subscriber line (xDSL) technologies; granting dedicated switched circuits for use; Integrated Services Digital Network (ISDN); video-conference communication; satellite and wire communication; technical maintenance of radio and television broadcasting networks, telegraph and telex communication. The Company operates through 33 branches locates countrywide. * Moody's Changes Outlook on Ukraine's 'B2' Bond Rating to Stable ----------------------------------------------------------------- Moody's Investors Service has changed the outlook on Ukraine's B2 government bond ratings to stable from negative. The main drivers for Moody's decision are: 1. The Ukrainian government's improved external liquidity following the new 2-1/2-year US$15.1 billion IMF stand-by agreement and the successful US$2 billion Eurobond issue in September; and 2. The narrowing of Ukraine's macroeconomic imbalances as reflected in a significant balance-of-payments adjustment and more recently, a resumption of economic growth. Separately, Moody's has also changed to stable from negative the outlooks on Ukraine's B1 foreign currency bond ceiling and its B3 foreign currency deposit ceiling. Rationale for Outlook Change "A stronger external position along with the economic recovery has reduced Ukraine's susceptibility to financial stress," says Dietmar Hornung, Vice President -- Senior Credit Officer in Moody's Sovereign Risk Group and lead analyst for Ukraine. "The shift to a stable outlook on the government bond ratings reflects Moody's view that the upside and downside risks at the current rating level are evenly balanced." Moody's notes that along with the fresh infusion of funds, the IMF program's conditionality is one of the factors that has improved the investment climate, thereby facilitating the successful Eurobond issuance. The IMF program targets budget deficits of 5.5% and 3.5% of GDP in 2010 and 2011, respectively. The consolidation is to be achieved through a reform of the tax system and the social security system, combined with expenditure cuts and efficiency gains in the tax administration. The envisaged structural reforms in the SBA will encompass the financial sector and the energy sector, and limit the deficit of the state gas company to 1% and 0% of GDP in 2010 and 2011, respectively. "The government has agreed to raise retail gas prices by 50% -- a move that reflects the Ukrainian authorities' commitment to the IMF program," says Mr. Hornung. This commitment is essential given Ukraine's history of mixed success in staying within an IMF program. Apart from the stronger liquidity situation, Moody's decision to change the country's outlook to stable also reflects the rebalancing of the economy. In 2009, the contraction of aggregate demand led to a significant balance-of-payments adjustment. Moreover, since Q1of 2010, Ukraine's real GDP has posted positive figures, and recent labor market data reflect a stabilization in overall employment levels. "Nevertheless, the rebound in the country's economic activity is starting from a very low base after a contraction of around 15% in 2009," cautions Mr. Hornung. "Ukraine's recovery therefore remains fragile." According to Moody's, the main recovery risks lie in a weakening of exports -- from the country's vulnerable steel industry particularly -- and a non-supportive banking system given the significant non-performing loan levels and considerable capital needs. Moody's last rating action affecting Ukraine was implemented on 12 May 2009, when the rating agency downgraded Ukraine's government bond ratings to B2 (from B1) and assigned a negative outlook. Prior to that, Moody's last rating action on Ukraine was taken on 24 February 2009 when the rating agency placed the B1 government bond ratings on review for possible downgrade. =========================== U N I T E D K I N G D O M =========================== EXOVA HOLDINGS: Moody's Assigns 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has assigned a B2 corporate family rating and B2 probability of default rating to Exova Holdings Ltd. The rating outlook is stable. At the same time, Moody's assigned a provisional (P)B3 rating to the proposed GBP155 million senior unsecured notes due in 2018, which will be issued by the subsidiary Exova Limited. The issuance proceeds will be applied towards debt reductions and to support an extension of the company's debt maturity profile. Ratings Rationale "The B2 rating reflects Exova's well established and diversified business position as one of the market leaders of laboratory-based testing services with a relatively high degree of performance resilience through the cycle evidenced in a track record of solid and stable profitability and cash generation levels," says Christian Hendker, Moody's Lead Analyst for Exova. "The rating is constrained by Exova's low absolute scale with revenues of around GBP221 million as well as its leverage, reflected in a pro-forma debt to EBITDA of above 6x per end of 2009. The stable rating outlook is based on the expectation of continued positive free cash flow generation supporting net debt reductions and credit metrics improvements going forward." Moody's notes that the (P)B3 rating (LGD 5, 75%) assigned to the senior unsecured notes is one notch below the B2 CFR and reflects the instrument's contractual subordination to approximately GBP85 million secured bank debt. The instrument has been issued at the level of the holding company Exova Limited, but benefits from subordinated guarantees provided by major operating companies. The B2 CFR reflects (i) Exova's strong position as a market- leading provider of laboratory-based testing services covering a number of geographic markets, industries and testing services; (ii) its strong customer diversification with a high degree of customer retention; (iii) its track record of relatively stable revenue and solid profitability levels with EBITDA margins in the 20% range, supported by the recurring and non-discretionary character of most testing services, as well as a high degree of cost structure flexibility; (iv) Moody's expectation of further performance improvements driven by favorable industry conditions with additional outsourcing potential, increasing regulation, shortening of product life cycles supporting the high demand for testing services; and (vi) the extended debt maturity profile if bond issuance is implemented as planned. The B2 CFR also considers (i) the relatively limited scale as evidenced by revenues of around GBP211 million in 2009; (ii) the limited performance track record as a stand-alone company; (iii) the short contract lengths in some segments, which add constant renewal pressure at comparable margin levels and could trigger revenue and margin volatility; (iv) the challenge to de-leverage its capital structure considering a pro-forma interest coverage of around 1.2x expected for 2010 and debt to EBITDA of around 6.0x; and (v) the challenge to remain in compliance with financial covenants under bank debt. Exova has a sufficient liquidity cushion with a cash balance of GBP17 million as of end June 2010 with availability of GBP33.1 under various credit facilities. The stable rating outlook is based on Moody's expectation of further gradual performance and credit metrics improvements, with an expectation of positive free cash flow generation applied towards net debt reductions. The rating does not incorporate headroom for shareholder payouts or larger scale acquisitions. Positive rating pressure requires a longer term track record of operating performance and credit metrics improvements underpinned by a strengthening business profile with reference to scale. Positive rating pressure would be prompted by a reduction of debt to EBITDA towards 5.0x, EBITDA-Capex to Interest towards 2.0x and continued positive free cash flow generation. Negative rating pressure would result from Exova's inability to further improve profitability and credit metrics over the next years. Triggers for negative rating pressure would be negative free cash flows, an eroding liquidity profile including a tightening headroom under financial covenants, inability to improve debt to EBITDA towards 5.5x or EBITDA-Capex to Interest above 1.5x. Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavor to assign a definitive rating to the notes. A definitive rating may differ from a provisional rating. Assignments: Issuer: Exova Holdings Limited -- Probability of Default Rating, Assigned B2 -- Corporate Family Rating, Assigned B2 -- Outlook: Stable Issuer: Exova Limited -- Senior Unsecured Regular Bond/Debenture, Assigned (P)B3, LGD5, 75% -- Outlook: Stable Exova, headquartered in Newbridge (UK) is a leading provider of value-added laboratory based testing services, to ensure compliance of products and processes in line with safety and quality standards required by customers, accreditation and regulatory authorities. In 2009, the company generated revenues of around GBP221 million. Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information, confidential and proprietary Moody's Analytics' information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. The rating has been disclosed to the rated entity or its designated agents and issued with no amendment resulting from that disclosure. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. HIGHFIELD JUNIORS: Near Collapse After Treasurer Stole Funds ------------------------------------------------------------ Sam McGregor, writing for Oxford Mail, reports that Highfield Juniors FC is back on even footing after it was left almost bankrupt when its treasurer plundered its bank account. The report relates that for months club managers put their hands in their own pockets to pay for equipment and kit to keep the teams going. Then chairman Tony Cowles decided to send a letter to local businesses appealing for sponsorship. The report says Natalie Ross, 40, was convicted by a jury at Oxford Crown Court in February 2010 of 17 charges of theft, obtained by deception and false accounting. The charges related to her time as treasurer of Highfield Juniors FC and as a bookkeeper at Bicester Garrison between 2004 and 2007. She stole a total of GBP63,451.17, but was only ordered to pay a nominal fee of GBP10 within 28 days under the Proceeds of Crime Act as the court agreed she had no assets. She was jailed for 18 months. Highfield Juniors FC is a youth football club. INVISTA REAL ESTATE: To Delist & Sell Off Assets ------------------------------------------------- Daniel Thomas at The Financial Times reports that Invista Real Estate Investment Management will have to delist and sell off assets after Lloyds Banking Group, its majority shareholder, withdrew almost half of the company's GBP5.4 billion (US$8.5 billion) of funds under management. Invista, which was spun out of the former fund management arm of HBOS as a listed company in 2006, has been in negotiations with Lloyds to extend the GBP2.4 billion of former HBOS property management contracts that expired last month, the FT notes. The FT relates Invista, headed by Duncan Owen, chief executive, was told on Tuesday that the HBOS contracts would be terminated and the management would be assumed by Scottish Widows Investment Partnership, the investment management group also owned by Lloyds, although it will have a year to effect a handover of the funds. According to the FT, Invista said that its board had concluded that the liquidation of Invista's remaining assets, including the sale of its asset management business, would be in the best interests of clients and shareholders. The proceeds of the sale of about GBP140 million of net assets on its balance sheet will be returned to Invista shareholders, the FT says. Lloyds is Invista's majority shareholder with about 55%, the FT discloses. Invista Real Estate Investment Management is the largest UK listed real estate fund management group. The Group manages both commercial and residential property across the UK, Continental Europe and Asia-Pacific. JOSEPH DANENZA: U.S. Court Recognizes Chapter 15 Proceeding ----------------------------------------------------------- The Hon. Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida recognized Joseph Jerome Danenza's Chapter 15 case as a foreign main proceeding. The U.K. Proceeding, including but not limited to the U.K. Bankruptcy order will be given full force and effect and be binding on and enforceable in the United States against all persons and entities. Stephen John Hunt, as foreign representative signed a petition of Chapter 15 protection for Joseph Jerome Danenza on August 12, 2010 (Bankr. S.D. Fla. Case No. 10-33736). Gregory S. Grossman, Esq., serves as counsel to the foreign representative. The Debtor is estimated to have assets and debts at US$10 million to US$50 million in the Chapter 15 petition. LEISURE AND GAMING: Hopes to Avoid Administration ------------------------------------------------- Leisure and Gaming said that following a demand from its bankers for a repayment, it was working to try and find a solution that would avoid the company going into administration, Stock Market Wire reports. According to the report, the company had been hoping to conclude a share purchase agreement with Grupo Pefaco but this has not happened and the terms of exclusivity with Pefaco have expired. The report relates that talks are continuing with Pefaco but the directors are also in contact with other parties who have expressed an interest in acquiring the Betshop business. Leisure and Gaming plc is a holding company with major assents in the global interactive betting and gaming industry. Its interests span from software development to marketing. Leisure and Gaming plc was incorporated in England and Wales in August 2004. Its registered holders are BNY Norwich Union Nominees Ltd, Chase GA Group Nominees Ltd, Chase Nominees Ltd, CUIM Nominee Ltd, and Vidacos Nominees Ltd. LIVERPOOL FOOTBALL: Holding Company In Default; May Face Collapse ----------------------------------------------------------------- Liverpool Football Club's holding company is in default over GBP280 million (US$446 million) owed to Royal Bank of Scotland Group Plc and Wells Fargo & Co., which may put the soccer club into bankruptcy protection, Tariq Panja at Bloomberg News reports, citing three people familiar with the situation. According to Bloomberg, the people, who declined to be identified because of pending lawsuits, said that while U.K. newspapers including the Daily Telegraph have reported that co-owners Tom Hicks and George Gillett's debt matures on Oct. 15, the loan is already in default. The U.S. pair is trying to block a sale to New England Sports Ventures LLC because they say the price is too low, Bloomberg notes. Bloomberg relates the people on Sunday said although the banks prefer not to put the team into administration, a form of bankruptcy, they may if the NESV deal is challenged in court or indefinitely delayed. RBS, as cited by Bloomberg, on Sunday said that it got an interim injunction on Oct. 8 to prevent the owners from removing board members as a way to block the sale. About Liverpool Football Liverpool Football Club and Athletic Grounds owns and operates one of the more popular and most successful franchises in the UK Premier League. Known as The Reds, Liverpool has won 18 first division titles and seven FA Cups since it was founded by John Houlding in 1892. In addition to the football club, the company owns and operates Anfield Stadium, Liverpool's home ground. The company generates revenue primarily through sponsorships, broadcasting fees, and ticket sales. The company was acquired by US businessmen George Gillett and Tom Hicks in 2007. LIVERPOOL FOOTBALL CLUB: Could Still Face Administration -------------------------------------------------------- Peter Lennox at goal.com reports that Liverpool Football Club and Athletic Grounds Chairman Martin Broughton said there is a genuine chance that the club could still go into administration. According to the report, the ownership and immediate future of the Anfield side will be decided in the High Court, when Broughton takes on Tom Hicks and George Gillett over the proposed sale of the club to New England Sports Ventures. The report relates that Messrs. Hicks and Gillett have fiercely opposed the sale of the club to NESV and Broughton says if they win their case, there is every chance Liverpool could go into administration. The report notes that the Royal Bank of Scotland, the club's main creditors, is due to call in their debt of GBP280 million on October 15. Should this happen, the report says, the club will go into administration and incur a nine-point penalty from the Premier League. Mr. Broughton told the Daily Telegraph: "It [administration] could happen, yes. This is all part of why it is important that we made the decision on Tuesday to accept one or the other of the two very acceptable bids. Heading for administration was a very likely outcome if we didn't. Even now with the court case looming, administration cannot be ruled out. It is not inevitable, and I am not going to start giving percentages of how much it is possible. That is why we are going to court to clarify our position on the sale of the club, and we have to win in court, and we will win in court." The report notes Mr. Broughton said that the effects of going into administration would be devastating to the club. The report relates Mr. Broughton has also confirmed there is a clause in Roy Hodgson's contract allowing any new owner of the club to replace him and not have to pay up all of the remaining years on his deal. Mr. Broughton admitted he didn't know the specifics of Hodgson's contract, but he had a fair idea of the details of the exit clause, the report adds. About Liverpool Football Liverpool Football Club and Athletic Grounds owns and operates one of the more popular and most successful franchises in the UK Premier League. Known as The Reds, Liverpool has won 18 first division titles and seven FA Cups since it was founded by John Houlding in 1892. In addition to the football club, the company owns and operates Anfield Stadium, Liverpool's home ground. The company generates revenue primarily through sponsorships, broadcasting fees, and ticket sales. The company was acquired by US businessmen George Gillett and Tom Hicks in 2007. LIVERPOOL FOOTBALL CLUB: Peter Lim Won't Rule Out Buying Firm ------------------------------------------------------------- James Cone at Bloomberg News reports that Singapore billionaire Peter Lim said he would not rule out buying Liverpool Football Club and Athletic Grounds even if it is placed into administration. According to the report, Mr. Lim has offered GBP320 million (US$507 million) to buy the club, trumping an accepted offer from the Boston Red Sox ownership group. "He feels strongly the board did not give him a fair opportunity to put his best offer forward," David Shriver, a spokesman for Mr. Lim, said in an e-mail obtained by the news agency. Liverpool Football Club and Athletic Grounds owns and operates one of the more popular and most successful franchises in the UK Premier League. Known as The Reds, Liverpool has won 18 first division titles and seven FA Cups since it was founded by John Houlding in 1892. In addition to the football club, the company owns and operates Anfield Stadium, Liverpool's home ground. The company generates revenue primarily through sponsorships, broadcasting fees, and ticket sales. The company was acquired by US businessmen George Gillett and Tom Hicks in 2007. NEWINGTON NURSERIES: Goes Into Compulsory Liquidation ----------------------------------------------------- Oxford Mail reports that Newington Nurseries of Stadhampton has gone into compulsory liquidation. Oxford Mail relates Ade Daramy of the Insolvency Service said, "The company became insolvent as the result of a petition by a creditor claiming GBP10,000 on the grounds that the company's work had been defective." "This point was disputed by the company's director." "On the current information, it is not likely that there will be any distribution to creditors," Ms. Daramy told Oxford Mail. PRONUPTIA CORNWALL: To Be Put in Liquidation by End of October -------------------------------------------------------------- BBC News reports that wedding outfitters Pronuptia Cornwall has called in insolvency experts and is warning customers they could lose cash deposits. The shop is not taking future orders but is selling off stock, the reports. According to BBC News, the company said it was expected to go into liquidation at the end of October and five staff were losing their jobs. Pronuptia Cornwall, in Truro, has hired and sold formal outfits for 25 years. STERLINGMAX I: S&P Cuts Ratings on Two Classes of Notes to 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered and placed on CreditWatch negative its credit ratings on STERLINGMAX I MBS Ltd.'s class B, C, and D notes and affirmed its rating on the class A-1 notes. At the same time, S&P placed the class A-2 notes on CreditWatch negative. These rating actions reflect S&P's view of the risk that interest shortfalls may occur on the class B notes as the transaction approaches the end of its reinvestment period. According to S&P's understanding of the transaction documents, the transaction's reinvestment period ends one day before the payment date of Nov. 20, 2010. From the latest available note valuation report of May 2010, S&P notes that the transaction's available interest proceeds were sufficient to pay interest on the class A-1, A-2, and B notes on the May 2010 payment date, albeit with a very small cushion of about ?4,600 of interest proceeds remaining after payment of the class B interest. The interest due on the class C and D notes on the May 2010 payment date was paid using principal proceeds. It is S&P's interpretation of the transaction documents that the ability to use principal proceeds to pay interest on the class A- 2, B, C, and D notes, before repaying the respective higher- ranking class of notes, expires once the transaction ends its reinvestment period. Following the end of the reinvestment period, principal proceeds can only be used to cover potential interest shortfalls on any of the class A-2, B, C, and D notes after the respective higher-ranking class of notes has been fully repaid. In addition, S&P notes that the transaction is failing its weighted-average spread test. S&P also note that since its last rating action in March 2010, according to its analysis the balance of assets that S&P considers as defaulted has increased to ?2.35 million from zero, while the balance of assets rated 'CCC' and 'CCC-' has increased to about ?5.87 million from ?2.7 million. As a result of these developments, S&P has lowered and placed on CreditWatch negative the ratings on the class B, C, and D notes and placed the class A-2 notes on CreditWatch negative. S&P is awaiting information from the collateral manager regarding the projected interest income and will continue to monitor the development of available interest proceeds. From the latest available note valuation report of May 2010, S&P note that class A-1 has repaid about 25% of its original principal amount as a result of the failing overcollateralization ratio test (calculated on all classes of rated notes). The repayment of the class A-1 notes using available principal proceeds occurred only after payment of interest to all classes of notes. The amortization of class A-1 has led to an increase in credit enhancement for all classes of notes. According to the September 2010 trustee report, principal cash currently stands at ?14.97 million. It is S&P's understanding of the transaction documents that after the reinvestment period, all available principal proceeds after payment of certain senior fees will be used to repay class A-1 first. S&P has affirmed its rating on the class A-1 notes as S&P believes there is sufficient credit enhancement available to these notes. STERLINGMAX I MBS is a cash flow collateralized debt obligation comprising mostly U.K. residential and commercial mortgage-backed securities, and commercial asset-backed securities. Ratings List STERLINGMAX I MBS Ltd. ?150 Million Secured Floating-Rate And Residual Notes[1] Ratings Lowered and Placed on CreditWatch Negative Rating ------ Class To From ----- -- ---- B BB (sf)/Watch Neg BBB (sf) C BB- (sf)/Watch Neg BBB- (sf) D BB- (sf)/Watch Neg BBB- (sf) Rating Placed on CreditWatch Negative Rating ------ Class To From ----- -- ---- A-2 AAA (sf)/Watch Neg AAA (sf) Rating Affirmed Class Rating ----- ------ A-1 AAA (sf) [1] S&P's ratings on the class A-1, A-2, and B notes address the timely payment of interest and principal, while the rating on the class C and D notes addresses the ultimate repayment of interest and principal. TARGETFOLLOW ESTATE: High Court Gives 2 Weeks to Secure Investment ------------------------------------------------------------------ Mail Online reports that London's High Court granted Targetfollow two weeks to secure investment, despite efforts by Lloyds Banking Group Plc to force it into administration over GBP700million of debt. The report relates that the company cannot meet repayments on the loan or repay it in full because the value of its estate tumbled in the financial crisis. But the group claims it has come up with a number of viable ways to restructure the debt -- only to see them rejected by Lloyds, the report notes. According to Mail Online, Lloyds Banking Group wants to seize and sell the properties to recoup some of its money. The report relates the bank has raised fears within the commercial property industry of a fire-sale of assets and double-dip in prices as banks seeking to unwind toxic loans handed out during the boom years from undermining the recovery. Mail Online notes that Lloyds' representatives told the High Court in London that the bank wanted to offload properties held by Targetfollow by the New Year. The report relates that the bank's counsel Barry Isaacs said the assets needed to be sold before the end of the year to ensure "an optimal value while there is optimal interest." "Every week that passes is detrimental to the value of the assets," Mail Online quoted Mr. Isaacs as saying. Lloyds values Targetfollow's estate at just GBP450million, while the company claims it is worth nearer GBP680million, the report notes. Mail Online notes Jeffery Gruder QC, acting for Targetfollow owner and founder Ardeshir Naghshineh, said the company needed more time to bring talks with a potential new investor "to fruition". In two weeks the court would be "able to see more clearly how that deal is forming -- whether it is a runner making good progress or whether it isn't," he added. The judge adjourned the case until October 25 at the earliest. Targetfollow is a property developer based in the United Kingdom. TOTAL FITNESS: Boss Blames High Rents for Unit's Administration --------------------------------------------------------------- Total Fitness' boss has revealed how the UK arm of the gym chain was forced into administration by crippling rents, but says he is confident it will return to growth after a GBP5 million investment program, Manchester Evening News reports. The report relates that Total Fitness in the UK was acquired in a multi-million pound deal by management and Barclays Ventures via a pre-pack administration from Ernst & Young. According to Manchester Evening News, its Irish arm, which was trading solvently and was not impacted by the administration, was bought the same day from private equity owners Legal & General Ventures. The report relates that the group had been marketed as a whole attracting a number of bids. Manchester Evening News notes that the UK business went into administration after being saddled with sky-high rents, which were signed by the group at the height of the property boom and were continuing to rise, wiping out profitability. The group, Manchester Evening News relates, is planning investment in its 24 clubs, which employ 746 staff. The report relates Executive Chairman Graham Hallworth said that the group would look to expand only after its current investment program was in hand. The report notes that last month Robin Johnson and John Peers, the chief executive and managing director of the company, left the group. Turnover for the year up to March, 2009 was GBP59.4 million, up from GBP58.7 million, while pre-tax operating profits were GBP7.3 million, down from GBP9.9 million, Manchester Evening News adds. Headquartered in Wilmslow, Total Fitness has 182,000 members. VOICESERVE INC: Earns US$125,500 in June 30 Quarter --------------------------------------------------- VoiceServe, Inc., filed its quarterly report on Form 10-Q, reporting net income of US$125,509 on US$1.07 million of revenue for the three months ended June 30, 2010, compared with a net loss of US$444,440 on US$661,904 of revenue for the same period ended June 30, 2009. Net earnings for the fiscal 2011 first quarter includes income from revaluation of liability for common stock purchase warrants of US$121,854. The Company's balance sheet at June 30, 2010, 2010, showed US$3.06 million in total assets, US$1.01 million in total liabilities, and stockholders' equity of US$2.05 million. As reported in the Troubled Company Reporter on July 5, 2010, Michael T. Studer CPA P.C., in Freeport, New York, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditor noted that as of March 31, 2010, the Company had negative working capital of US$475,863. Further, since inception, the Company has incurred losses of roughly US$2.99 million. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6c56 About VoiceServe Inc. Headquartered in Edgware, Middlesex, in the United Kingdom, VoiceServe, Inc., was incorporated in the State of Delaware on December 9, 2005, under the name 4306, Inc. The Company develops, manufactures, licenses, and supports a wide range of VoIP software products and services for many different types of devices, including a wide range of cellular telephones. * UK: Retail Insolvency Rates Fall to Pre-2007 Levels, PwC Says --------------------------------------------------------------- Steve Dinneen at City A.M. reports that retail insolvencies fell to pre-recession levels this quarter, according to research from PricewaterhouseCoopers (PwC). City A.M. reports that just 360 firms went bust in the third quarter, a drop of 11 per cent from the second and a massive 26 per cent reduction on last year. According to City A.M., PwC believes the improvement will be continued as most of the weaker firms on the high street have already gone bankrupt. City A.M. notes that the retail figures echo a wider trend, with a total of 3,313 companies becoming insolvent in the third quarter of 2010 -- a fall of 18 per cent on the previous quarter and 29 per cent fewer than the year before. =============== X X X X X X X X =============== * EUROPE: US$316BB of Junk-Rated Corporate Debt Needs Refinancing ----------------------------------------------------------------- John Glover and Karen Eeuwens at Bloomberg News report that Moody's Investors Service said the US$316 billion of junk-rated corporate debt that needs refinancing in Europe through 2014 is a "wall of maturities" that dwarfs the historic capacity of the market. Speculative-grade issuers in Europe, the Middle East and Africa have US$502 billion of bonds and loans outstanding, Moody's said in a report on Monday, citing 224 companies it rates, according to Bloomberg. Bloomberg says about 63% of the debt matures between 2011 and 2014, with a peak of US$89 billion in 2013, according to the report. About two thirds is in the form of bank loans with the rest being bonds, Bloomberg notes. High-yield, or junk, bonds are rated below Baa3 by Moody's and BBB- by Standard & Poor's. Issuers in the Ba ratings category -- the strongest of the three high-yield groupings -- account for 66% of the debt coming due next year, Moody's, as cited by Bloomberg, said. Bloomberg relates Moody's said so-called fallen angels, companies that have lost investment-grade ratings, account for 69% of the junk-rated debt maturing in 2011 and 2012, while the 25 largest issuers account for half of all the debt outstanding. LBOs account for about a third of rated speculative-grade issuers and a quarter of the junk debt coming due, Bloomberg says, citing the report. The borrowers tend to be rated lower than other junk- graded issuers, and Moody's forecasts that "a number of stressed LBOs will default" if rates rise, Bloomberg states. * EUROPE: Junk Yields Tumble to Lowest Since Before Crisis ---------------------------------------------------------- Caroline Hyde at Bloomberg News reports that lenders to speculative-grade companies in Europe are charging the lowest interest rates since before credit markets seized up in a sign they don't expect the region's fiscal crisis to infect corporate debt. Investors demand an average yield of 7.62% to hold junk-rated European debt, the lowest since July 2007, Bloomberg says, citing Bank of America Merrill Lynch index data. Bloomberg notes that while nations from Greece to Ireland struggle with budget deficits above the European Union limit, companies are taking advantage of a global rally in corporate debt to refinance and extend maturities. Bloomberg relates Moody's Investors Service said in an Oct. 7 report that the default rate in the region fell to 3.5% at the end of September from 5.6% three months earlier, and is forecast to drop to 2.2% by year-end. According to Bloomberg, Bank of America Merrill Lynch data show European corporate junk bonds have returned 16% this year, including reinvested interest, helping sales almost double and borrowers avoid default. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 15, 2010 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Hilton New Orleans Riverside, New Orleans, La. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 28, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Level Professional Development Program Weil, Gotshal & Manges LLP, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 29, 2010 (tentative) AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium The Savoy, London, England Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. __, 2010 AMERICAN BANKRUPTCY INSTITUTE Delaware Views from the Bench and Bankruptcy Bar Hotel du Pont, Wilmington, Del. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 11, 2010 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference Hyatt Regency Dearborn, Dearborn, Mich. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 29, 2010 RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP, INC. 17th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York City Contact: 1-903-595-3800; http://www.renaissanceamerican.com/ Dec. 9-11, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, a JW Marriott Resort & Spa, Scottsdale, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ January 26-28, 2011 TURNAROUND MANAGEMENT ASSOCIATION TMA Distressed Investing Conference Aria Las Vegas Contact: http://www.turnaround.org/ Jan. 27-28, 2011 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colo. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 3-5, 2011 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casuarina Resort & Spa, Grand Cayman Island Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 24-25, 2011 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 4, 2011 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Hyatt Regency Century Plaza, Los Angeles, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 7-9, 2011 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition Duberstein U.S. Courthouse, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 10, 2011 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts - Florida Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 10-12, 2011 AMERICAN BANKRUPTCY INSTITUTE SUCL/ Alexander L. Paskay Seminar on Bankruptcy Law and Practice Marriott Tampa Waterside, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 17-19, 2011 AMERICAN BANKRUPTCY INSTITUTE Byrne Judicial Clerkship Institute Pepperdine University School of Law, Malibu, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ April 27-29, 2011 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott, Chicago, IL Contact: http://www.turnaround.org/ May 5, 2011 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts - New York City Association of the Bar of the City of New York, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ May 6, 2011 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Hilton New York, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ June 6, 2011 AMERICAN BANKRUPTCY INSTITUTE Canadian-American Cross-Border Insolvency Symposium Fairmont Royal York, Toronto, Ont. Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Mich. Contact: http://www.abiworld.org/ July 21-24, 2011 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 27-30, 2011 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Sanctuary at Kiawah Island, Kiawah Island, S.C. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 4-6, 2011 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ ********* 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 U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Frauline S. Abangan 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 * * *