/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/101103.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 Wednesday, November 3, 2010, Vol. 11, No. 217 Headlines B U L G A R I A KREMIKOVTZI AD: Chinese Investor Eyes Steel Mill Assets G E R M A N Y HEAT MEZZANINE: Moody's Comments on Approval of CDO Deal Amendment S-CORE 2007-1: Moody's Reviews Ratings on Six Classes of Notes G R E E C E T BANK: Fitch Downgrades Issuer Default Rating to 'B-' WIND HELLAS: 82% of Creditors Back Scheme of Arrangement I R E L A N D ALLIED IRISH: Sale of British Businesses Remain Under Review ANGLO IRISH: Seeks Summary Judgment Order Against Former Director ANGLO IRISH: Creditors Can't Go After Ex-Chief's Home in US CHEYNE CLO: S&P Cuts Ratings on Various Classes of Notes to 'D' CLAYTON HOTEL: In Receivership FOUR SEASONS: Buyer Expected to Be Found by Year-End * IRELAND: Number of Insolvencies Drop to 118 in October * IRELAND: Has One Month to Stave Off International Bailout N E T H E R L A N D S DUTCH MORTGAGE: Fitch Assigns 'BB+sf' Rating to Class B Notes E-MAC NL: Note Redemption Cues Moody's to Withdraw Ratings R O M A N I A VICTORIA HOLDING: Australian Parent Files Unit's Insolvency R U S S I A NATIONAL FACTORING: Moody's Assigns 'B3' Rating to Senior Debt SOVCOMBANK ICB: S&P Assigns 'B-' LT Counterparty Credit Ratings U K R A I N E * Moody's Assigns B2 Rating to Ukrainian State Enterprise's Debt U N I T E D K I N G D O M ASSET REPACKAGING: S&P Assigns BB+ (sf) Ratings to Various Notes ATRIUM EUROPEAN: Fitch Upgrades Senior Unsecured Rating to 'BB+' CLARIS IV: S&P Cuts Ratings on Various Classes of Notes to 'D' CLARIS LIMITED: Moody's Confirms Ba1 (sf) Ratings on Various Notes CONFORTO FINANCIAL: To Be Placed Into Administration DECO 8: Fitch Downgrades Rating on Class G Notes to 'Dsf' DUNDEE FOOTBALL CLUB: Scottish Football League Deducts 25 Points IONA CDO: S&P Lowers Rating on Class B Notes to 'CC (sf)' OCCUPATIONAL MEDICALS: Bought Out of Administration by Evidence R&R ICE: S&P Downgrades Long-Term Corporate Credit Rating to 'B+' SALTWELL SIGNS: On the Road to Recovery * BRITAIN: Pressures Ease for Manufacturing Industry ********* =============== B U L G A R I A =============== KREMIKOVTZI AD: Chinese Investor Eyes Steel Mill Assets ------------------------------------------------------- A Chinese investor has expressed interest in acquiring the insolvent and obsolete steel mill Kremikovtzi AD Sofia, novinite.com reports. According to novinite.com, the mill's labor unions confirmed that the Chinese have visited the location several times and would take part in the second auction of the company, which will take place on November 5. The Asian investor has decided to take part in the auction after meeting Prime Minister Boyko Borisov, novinite.com discloses. They also hope to make a profit from selling to ailing facilities for scrap, novinite.com relates. The Mayor of the Kremikovtzi district has said he was aware of the Chinese project and talks are pending to finalize details, novinite.com adds. As reported by the Troubled Company Reporter-Europe on July 29, 2010, Bloomberg News, citing a report from the receiver, said the mill's assets total BGN840 million, while debt was estimated at BGN1.9 billion. Bloomberg recalled the Sofia City Court declared Kremikovtzi bankrupt May 31. The Sofia-based plant was placed in receivership in 2008 after failing to pay suppliers and investors holding BGN325 million (US$422 million) of bonds, Bloomberg disclosed. Creditors rejected a restructuring plan in October 2009, opting to be repaid under insolvency laws, Bloomberg recounted. Bloomberg noted that of the total liabilities, 42% are owed to state-run power and gas utilities, the state railways and tax authorities. About Kremikovtzi Kremikovtzi AD Sofia -- http://www.kremikovtzi.com/-- is a Bulgaria-based company principally engaged in the steel industry. Its production capacity includes a complete steel production cycle, from ore mining to finished products, such as hot rolled and cold rolled products (coils, slabs, plates, blooms and billets), different thickness wire rods and tubes. The Company's product range also includes coke and chemical products, flat products, ferro-alloys and metallurgical lime, and other products. The Company operates through a number of subsidiaries, including Ferosplaven zavod EOOD, NLA 2000 EOOD, Kremikovtzi Rudodobiv AD, Metalresource OOD and others. The Company is 71%-owned by Finmetals Holding AD. ============= G E R M A N Y ============= HEAT MEZZANINE: Moody's Comments on Approval of CDO Deal Amendment ------------------------------------------------------------------ Moody's Investors Service has received confirmation that noteholders have consented to a suite of amendments to the documentation in relation to the three German SME CDO transactions issued by Heat Mezzanine S.A. Included in the amendments is a proposal to extend the legal maturities by a further four years. 1) Overview of the Transactions The three transactions closed between 2005 and 2007 with combined initial portfolios totaling to EUR814 million at closing. The pools are all entirely composed of subordinated loans to German Small and Medium sized Enterprises. The loans are structured as seven year bullet loans. The pools are highly concentrated and contain between 22 and 46 performing obligors. 2) Restructuring plan The issuer obtained noteholder approval for certain changes to the transaction documents. Some of the structural aspects included were: -- Extension of the legal maturity date by an additional four years. -- Removal of the need for Trustee consent to restructure the Subordinated Loan Agreements or commence litigation against an obligor in the pool. -- Creation of a cash reserve account to be placed senior to the notes in the waterfall, in order to pay litigation costs related to proceedings taken against any obligors in the pool. This will be funded by EUR50,000 per payment date. -- Supplementary right for the issuer to appoint an additional recovery manager in order to be represented in Creditors' meetings of relevant obligors. -- Ability for the issuer to appoint a Work-out Manager at any time after the scheduled maturity to assist in restructuring negotiations of any defaulted obligors. This amendment was only approved in relation to H.E.A.T. I-2005 S.A. 3) Moody's Opinion: Impact of the amendments on the transactions It is Moody's opinion that the amendments to the deal documentation are credit positive. The rating agency views that the amendments will improve the actual recoveries on the underlying subordinated loans. In particular, Moody's considers the extension of the legal maturity will allow sufficient time, more than commensurate with the recovery process in Germany, for the issuer to complete workout procedures on defaulted names, and/or resolve any legal proceedings undertaken against obligors. 4) Moody's Opinion: Does the Proposal Constitute a Distressed Exchange? Moody's definition of default is intended to capture events whereby an issuer fails to meet its original debt service obligation promise --as rated by Moody's, by the legal final maturity. A Distressed Exchange therefore constitutes a default under Moody's definition if 1) an issuer offers creditors a new or restructured debt, or a new package of securities or assets, that amount to a diminished financial obligation relative to the original obligation, and 2) the exchange has the effect of allowing the issuer to avoid a bankruptcy or payment default. In Moody's view, although the proposal to extend the legal maturity is considered as beneficial for the transactions, it does constitute a diminished financial obligation as per Moody's definition as it does not embed any direct economic compensation. In addition, as some of the rated tranches would have likely suffered a default by their legal final maturity, the extension of such maturity technically enables the issuer to avoid default as it relates to Moody's definition. For the avoidance of doubt, this is not related to the legal definition of event of default under the transaction documentation. Moody's notes that there is no ratings impact on the tranches, including those for which Moody's consider are distressed exchanges. The tranches of notes for which the restructuring constitutes a Distressed Exchange according to Moody's definition are: Issuer: H.E.A.T Mezzanine I-2005 S.A. -- EUR25.6M B1 Notes, current rating Caa3 (sf) -- EUR8.5M B2 Notes, current rating Caa3 (sf) Issuer: H.E.A.T Mezzanine S.A. (Compartment 2) -- EUR30.8M B Notes, current rating Ca (sf) -- EUR10M Combo Notes, current rating Caa3 (sf) Issuer: H.E.A.T Mezzanine S.A. - Compartment 3 Notes -- EUR233M A Notes, current rating B3 (sf) -- EUR31M B Notes, current rating Ca (sf) -- EUR25.5M C, current rating C (sf) S-CORE 2007-1: Moody's Reviews Ratings on Six Classes of Notes -------------------------------------------------------------- Moody's Investors Service has placed on review for downgrade its ratings of six classes of notes issued by S-core 2007-1 GmbH. Issuer: S-CORE 2007-1 GmbH -- EUR363.8M A1 Notes, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Aug 10, 2007 Definitive Rating Assigned Aaa (sf) -- EUR91M A2 Notes, A2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 2, 2009 Downgraded to A2 (sf) -- EUR8.85M B Notes, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 2, 2009 Downgraded to Ba2 (sf) -- EUR9.6M C Notes, B1 (sf) Placed Under Review for Possible Downgrade; previously on Sep 2, 2009 Downgraded to B1 (sf) -- EUR12.4M D Notes, Caa1 (sf) Placed Under Review for Possible Downgrade; previously on Sep 2, 2009 Downgraded to Caa1 (sf) -- EUR19.7M E Notes, Caa3 (sf) Placed Under Review for Possible Downgrade; previously on Sep 2, 2009 Downgraded to Caa3 (sf) S-core 2007-1 is a German SME CLO referencing a static portfolio of 'schuldscheine' loans with bullet maturities between 2012 and 2014. The Class A notes have been paid down by EUR37.9 million from amortizations and excess spread. The outstanding portfolio totals EUR441.9 million of portfolio assets, representing exposure to 137 loans. Moody's has placed this transaction under review for possible downgrade in response to a rate of defaults that has remained elevated and above that expected at last rating action on 2 September 2009. The transaction has suffered EUR38 million in defaults, EUR20 million of which have occurred since the previous rating action. The Principal Deficiency Ledger has increased from EUR7.6 million to EUR25.6 million since the last action. Despite the improvement in the German economic environment the average pool credit quality remains equivalent to a B1/B2, the same as at the last action. This information is taken from the latest information report dated 5th October 2010. The internal ratings assigned to the loan obligors by the originator Deutsche Bank are used to determine their default probabilities. These internal ratings are converted to Moody's rating scale according to a mapping. Moody's expects to resolve its review in the coming weeks following deal specific analysis. =========== G R E E C E =========== T BANK: Fitch Downgrades Issuer Default Rating to 'B-' ------------------------------------------------------ Fitch Ratings has downgraded T Bank S.A.'s (formerly Aspis Bank) Long-term Issuer Default Rating to 'B-' from 'B'. The Long-term IDR remains on Rating Watch Evolving. At the same time, the agency has placed T Bank's Short-term IDR of 'B' on Rating Watch Negative. A full list of rating actions is included at the end of this comment. The downgrade reflects the bank's difficulties in containing ongoing operating losses as well as its deteriorating capitalization and strained liquidity profile. This is despite the EUR48.4 million capital increase in April 2010 from TT Hellenic Postbank S.A. (34.04% owned by the Greek state, rated 'BBB-'/Negative) when it acquired a 32.9% stake in the bank following the capital increase. The RWE reflects the agency's opinion that T Bank is likely to be downgraded further if capital is not significantly strengthened. Conversely, should Postbank -- or other third-parties -- provide further support for T Bank, notably by providing additional capital support and/or acquiring a majority stake in the bank, then this could lead to upside potential for T Bank's ratings. The future involvement of the Greek state, which is currently the largest shareholder in Postbank is, in Fitch's view, uncertain, reflected in the recently withdrawn bid by one of Greece's largest banks for the government stake in Postbank and the government's stated intention to reassess its stake in Postbank (and other Greek institutions). As a result, Postbank has not yet formulated a clear strategic plan for its stake in T Bank and Fitch expects this uncertainty to continue in the short -term. T Bank continued to be loss-making in H110, largely as a result of subdued revenue generation due to negative loan growth and still high loan impairment charges (190bp of gross loans in H110) due to still weakening asset quality. As a result, T Bank's capital ratios have been eroded to 5.5% (tier 1) and 9.2% (total capital ratio) at end-H110, only marginally above the regulatory requirement. Assuming an unchanged loss rate for H210, T Bank would be in breach of the regulatory capital ratio at end-Q310, indicating an urgent need for additional capital. T Bank's stand-alone funding and liquidity position is in Fitch's opinion severely strained, evidenced by a sizeable reduction in customer deposits in Q110, considerable utilization of ECB funding and the lack of further ECB-eligible unencumbered assets. However, Postbank provides significant funding facilities to T Bank and the involvement of Postbank has also led to a sizeable increase in customer deposits in Q310, easing funding and liquidity pressures to some extent. T Bank, the 11th-largest Greek bank by end-2009 assets, is a domestically orientated former mortgage bank. Postbank, established in 1900 as part of the Hellenic Post office, is the seventh largest Greek bank by assets at end-2009 and is focused on retail banking. It has a nationwide network of 146 branches, supported by around 840 post offices distributing Postbank products. As of end-2009, the Greek state held 34% of Postbank's shares, with the Greek Post Office owning 10%, domestic institutional investors 20.5%, foreign institutional investors 7.7% and the balance being held by private investors. T Bank S.A.: -- Long-term IDR: downgraded to 'B-' from 'B'; Rating Watch Evolving maintained -- Short-term IDR: 'B'; placed on Rating Watch Negative -- Individual Rating: affirmed at 'E' -- Support Rating: affirmed at '5' -- Support Rating Floor: affirmed at 'No Floor' -- Lower tier 2 notes: affirmed at 'CCC'/'RR6' -- Tier 1 hybrid notes: affirmed at 'CC'/'RR6' WIND HELLAS: 82% of Creditors Back Scheme of Arrangement -------------------------------------------------------- John Glover at Bloomberg News reports that Wind Hellas Telecommunications SA said it won support from 82% of creditors for a scheme of arrangement to allow senior secured bondholders to take over the company. Bloomberg says a scheme of arrangement will bind all holders into the restructuring. According to Bloomberg, the company said in a statement it is also asking lenders in its revolving credit facility to agree to a binding commitment to support the restructuring. Bloomberg notes the statement said the first hearing for the scheme is scheduled for Thursday, Nov. 4, at the High Court. As reported by the Troubled Company Reporter-Europe on Oct. 20, 2010, Bloomberg News that Wind Hellas's senior bondholders were picked as preferred bidders for the Greek mobile phone operator in the second time the company has been sold in a year. Wind Hellas's senior secured floating-rate noteholders, owed about EUR1.2 billion (US$1.67 billion), will inject EUR420 million and write off debt in exchange for the company, Bloomberg said, citing Wind's parent Weather Finance III Sarl, the holding company of Egyptian billionaire Naguib Sawiris. Weather Finance said in a statement that under the bondholders' proposal, Wind Hellas's GBP250 million-revolver will be repaid in full, while the company's senior secured notes and EUR355 million of subordinated bonds will be written off, according to Bloomberg. Bloomberg noted the statement said the bondholder group includes Mount Kellett Capital Partners (Ireland) Ltd., Taconic Capital Advisers UK LLP, Providence Equity Capital Markets LLC, Anchorage Capital Group LLC, Angelo Gordon & Co and Eton Park International LLP. About WIND Hellas Headquartered in Athens, Greece, WIND Hellas Telecommunications S.A. -- http://www.wind.com.gr/-- provides mobile voice and data services to about 6 million consumer and business customers throughout Greece. The company enables international roaming in 155 countries for travelling subscribers through agreements with other carriers. It also provides cellular and satellite-based vehicle management and tracking services. WIND Hellas is owned by investment firm Weather Investments, a company led by Cairo-based Orascom Telecom's founder and chairman, Naguib Sawiris. * * * As reported by the Troubled Company Reporter-Europe on Oct. 25, 2010, Fitch Ratings downgraded Greek mobile operator WIND Hellas Telecommunications S.A.'s Long term Issuer Default rating to 'RD' from 'C'. Fitch said the downgrade follows the company's announcement of the selection of a preferred bidder in the restructuring of the company's capital base following the Standstill Agreement entered into with its lenders on June 30, 2010. ============= I R E L A N D ============= ALLIED IRISH: Sale of British Businesses Remain Under Review ------------------------------------------------------------ Padraic Halpin at Reuters reports that Allied Irish Banks said on Tuesday that the sale of its British businesses remained under review after difficult market conditions had made progress challenging. Reuters relates the bank's statement followed comments from its new chairman on Monday that the sale of the businesses had been put on hold after failing to get any decent bids, meaning the state may end up owning around 95% of the lender. According to Reuters, David Hodgkinson had said its business bank in Britain and First Trust retail operation in Northern Ireland could not be sold on satisfactory terms and that the lender would try to strengthen the operations before re-examining its options. Allied Irish Banks, p.l.c., together with its subsidiaries -- http://www.aibgroup.com/-- conducts retail and commercial banking business in Ireland. It also provides corporate lending and capital markets activities from its head office at Bankcentre and from Dublin's International Financial Services Centre. The Group also has overseas branches in the United States, Germany, France and Australia, among other locations. The business of AIB Group is conducted through four operating divisions: AIB Bank Republic of Ireland division, Capital Markets division, AIB Bank UK division, and Central & Eastern Europe division. In February 2008, the Group acquired the AmCredit mortgage business in the Baltic states of Latvia, Lithuania and Estonia. In September 2008, the Group also acquired a 49.99% shareholding in BACB. * * * As reported by the Troubled Company Reporter-Europe on July 23, 2010, Moody's Investors Service affirmed AIB's long-term bank deposit and debt ratings. These are A1 for long-term bank deposits and senior debt, A2 for dated subordinated debt, Ba3 for undated subordinated debt, B1 for cumulative tier 1 securities and Caa1 for non-cumulative tier 1 securities. Moody's said the outlook on these ratings is stable. AIB's bank financial strength rating of D, which maps to Ba2 on the long term rating scale, with a positive outlook was unaffected by the rating action. ANGLO IRISH: Seeks Summary Judgment Order Against Former Director ----------------------------------------------------------------- Tim Healy at Irish Independent reports that Anglo Irish Bank is seeking summary judgment orders in the Commercial Court against Tom Browne, the one-time head of its Irish lending division, over unpaid loans of EUR50 million. According to Irish Independent, Mr. Browne's loans were secured against shares in the bank and various property investments. Mr. Browne claims he is being singled out by Anglo because of his previous position with the bank, Irish Independent discloses. He claims "negligent acts" by Anglo and state bodies between late 2007 and January 2009 resulted in the bank's nationalization, Irish Independent states. This in turn had led to the collapse of the bank's shares, resulting in him suffering substantial losses as a result, Mr. Browne said as cited by Irish Independent. Irish Independent says Mr. Browne claims in letters to the bank that had the then board not engaged in certain courses of action, Anglo would still be a publicly quoted company and his shareholding would be "of material value". Irish Independent relates a solicitor for Mr. Browne told Mr. Justice Peter Kelly at the Commercial Court on Monday that her client was consenting to have the case fast-tracked by the court but she had no instructions yet whether a defense was being raised or its nature. The case was adjourned until Friday, Irish Independent notes. Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/-- operates in three core areas: business lending, treasury and private banking. The Bank's non-retail business is made up of more than 11,000 commercial depositors spanning commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. The Company's retail deposits comprise demand, notice and fixed term deposit accounts from personal savers with maturities of up to two years. Non-retail deposits are sourced from commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. In addition, at Sept. 30, 2008, its non-retail deposits included deposits from Irish Life Assurance plc. The Private Bank offers tailored products and solutions for high net worth clients and operates the Bank's lending business in Ireland and the United Kingdom. * * * As reported by the Troubled Company Reporter-Europe on Oct. 29, 2010, 2010, Standard & Poor's Ratings Services said that it lowered its rating on Anglo Irish Bank Corp. Ltd.'s nondeferrable dated subordinated debt (lower Tier 2) securities to 'D' from 'CCC'. The downgrade of the lower Tier 2 debt rating reflects S&P's opinion that this exchange offer is a "distressed exchange" and tantamount to default in accordance with its criteria. ANGLO IRISH: Creditors Can't Go After Ex-Chief's Home in US ----------------------------------------------------------- Shane Phelan at Irish Independent reports creditors of former Anglo Irish Bank boss David Drumm will not be able to go after his new US$2 million (EUR1.4 million) home in the US as the property is being held by a trust. According to Irish Independent, court documents reveal that Mr. Drumm and at least one other unknown individual used a trust to buy the house on the outskirts of Boston earlier this year. Gardai now wants to interview him as part of a fraud squad investigation into major irregularities at Anglo, but he has so far refused to return home voluntarily for questioning, Irish Independent discloses. Irish Independent relates after Mr. Drumm filed for bankruptcy with debts of EUR10.26 million last month, it emerged he and his family were living in a plush four-bedroom property in Wellesley, Massachusetts. Mystery surrounded the ownership of the house, as the beneficial owners are not listed in land registry records, Irish Independent says. However, Mr. Drumm has now been forced to admit in bankruptcy court filings seen by the Irish Independent that he has a 50% beneficial interest in the Epiphany Nominee Trust, which holds the property. Court documents do not reveal who benefits from the remaining half and the terms of the trust are private, Irish Independent notes. Liabilities Separately, Irish Independent's Mr. Phelan reports Mr. Drumm is making US$9,000 (EUR6,500) a month from giving financial advice. He revealed the income in court documents filed in the US over the weekend. Irish Independent relates he told court officials he was paid the wage from Delta Corporate Finance (DCF), a company he set up in Boston, Massachusetts, in January 2009. According to Irish Independent, court records show he failed to adjust to the drop in income and was living beyond his means when he filed for bankruptcy last month. He claimed in the court documents his monthly expenses totaled US$10,605 (EUR7,620), leaving him with an after-tax loss per month of US$1,168 (EUR840), Irish Independent discloses. The court records also outline for the first time the full extent of Mr. Drumm's financial difficulties. Irish Independent says his liabilities are listed as being US$14,279,044 (EUR10,260,144) but his assets come to just US$13,906,395 (EUR9,992,379). According to Irish Independent, his major creditors include: * Anglo Irish, which is owed US$11,963,482 (EUR8,596,307). * Cape Cod Five Cents Savings Bank, owed US$1,164,884 (EUR837,022). * Solicitors Eversheds O'Donnell Sweeney, owed EUR248,927. * KBC Homeloans, owed EUR252,245. * His wife, Lorraine, owed EUR210,347 from various loans. According to Irish Independent, Mr. Drumm owes these amounts on various credit cards: * EUR18,486 on an AIB Visa card, * US$14,368 (EUR10,324) on a Chase Mastercard, * US$6,000 (EUR4,311) on a Citicards Exxon Mobil credit card, and * US$2,821 (EUR2,027) on a Discover credit card. Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/-- operates in three core areas: business lending, treasury and private banking. The Bank's non-retail business is made up of more than 11,000 commercial depositors spanning commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. The Company's retail deposits comprise demand, notice and fixed term deposit accounts from personal savers with maturities of up to two years. Non-retail deposits are sourced from commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. In addition, at Sept. 30, 2008, its non-retail deposits included deposits from Irish Life Assurance plc. The Private Bank offers tailored products and solutions for high net worth clients and operates the Bank's lending business in Ireland and the United Kingdom. * * * As reported by the Troubled Company Reporter-Europe on Oct. 29, 2010, 2010, Standard & Poor's Ratings Services said that it lowered its rating on Anglo Irish Bank Corp. Ltd.'s nondeferrable dated subordinated debt (lower Tier 2) securities to 'D' from 'CCC'. The downgrade of the lower Tier 2 debt rating reflects S&P's opinion that this exchange offer is a "distressed exchange" and tantamount to default in accordance with its criteria. CHEYNE CLO: S&P Cuts Ratings on Various Classes of Notes to 'D' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'D (sf)' from 'CC (sf)' its credit ratings on Cheyne CLO Investments I Ltd.'s class B, C, D, and E notes. At the same time, S&P has affirmed its 'D (sf)' rating on the class A notes. On Oct. 6, S&P received a notice from the trustee (State Street Bank and Trust Co.), indicating that the collateral has now been enforced and the net proceeds from enforcement have been distributed in accordance with the post-enforcement priority of payments. S&P understand that the noteholders of the controlling class instructed the trustee to issue the notice of enforcement. The notice shows that the net proceeds from enforcement were insufficient to pay any amounts due and payable under the notes. S&P does not anticipate that any future payments on the notes will be made. S&P has therefore lowered to 'D (sf)' its ratings on the class B, C, D, and E notes. On July 30, 2009, S&P lowered to 'D (sf)' its rating on the class A notes following a payment default on the interest due and payable on these notes. S&P further affirmed its rating on the class A notes on Feb. 5, 2010 as they continued to default on interest payments. S&P has again affirmed the 'D (sf)' rating on the class A notes due to insufficient amounts available to fully repay these notes following enforcement. Cheyne CLO Investments I closed in April 2005. A portfolio comprising U.S. collateralized loan obligation tranches and total return swaps referencing CLO tranches backs the transaction. CLAYTON HOTEL: In Receivership ------------------------------ James Enright at The Sunday Business Post Online reports that the Clayton Hotel has gone into receivership last week. The report relates that Ulster Bank seized control of the four-star, 200- bedroom hotel on the outskirts of Galway city. The bank has appointed KPMG's Kieran Wallace as receiver. According to The Sunday Business Post, the accountant has reassured all 130 members of staff that their jobs are secure and that the hotel will continue trading as normal. The report notes that all bookings and deposits for functions will be honored, and the day-to-day running of the hotel will not be affected. Senior industry executive Pat McCann has taken over the running of the hotel, The Sunday Business Post relates. Mr. Wallace, the report notes, was appointed receiver over Chequer Hill Investments and Three Corner Holdings, which own the Clayton. The report relates that Mr. Wallace was also appointed receiver to a third company owned by over 100 business people who claim tax relief through their investment in the hotel. The hotel, The Sunday Business Post relates, had been trading well in recent months but Ulster Bank had become increasingly concerned about its loans to the hotel and appointed the receiver. The Sunday Business Post discloses that despite restructuring his business interests several years ago to protect the hotel, the collapse of Marcon Developments last month which followed the failure to reach an agreement with John Sisk & Sons over a EUR2 million debt to the construction firm, has prompted Ulster Bank to move to protect its position in relation to the Clayton. Last month, the report relates, Marcon Developments collapsed into liquidation with debts of almost EUR20 million. The hotel's previous owner Shane Connolly was among the creditors and was owed around EUR8 million, the report adds. Clayton Hotel is located in Galway, Ireland. FOUR SEASONS: Buyer Expected to Be Found by Year-End ---------------------------------------------------- A buyer for Dublin's Four Seasons Hotel is expected to be found before the end of the year, Geoff Percival at The Irish Examiner reports, citing the Irish office of international real estate specialists CB Richard Ellis which is in charge of the sale process. The Irish Examiner relates the company said Monday that it has received "an encouraging level of enquiries" in recent weeks -- mainly from overseas investors. The hotel's owners -- the Nollaig Partnership of investors -- announced in September that it was putting the property on the market after posting EUR2 million in losses for its latest financial year, The Irish Examiner discloses. The owners also owe EUR50 million to Anglo Irish Bank, although it isn't expected the eventual sale figure will cover this debt by itself, The Irish Examiner notes. As reported by the Troubled Company Reporter-Europe on Sept. 22, 2010, the hotel has been badly hit by the recession and the decline in the number of American business guests. Four Seasons Hotel is situated in Ballsbridge, Dublin. * IRELAND: Number of Insolvencies Drop to 118 in October -------------------------------------------------------- The Irish Times, citing InsolvencyJournal.ie, reports that the number of insolvencies fell to 118 in October, compared to 120 in September. The report says there was a notable fall in insolvencies in the construction sector, with 26 construction companies entering liquidation last month, compared to 42 in September. * IRELAND: Has One Month to Stave Off International Bailout ----------------------------------------------------------- Dara Doyle at Bloomberg News reports that Irish Finance Minister Brian Lenihan may have just one month to stave off an international bailout. Bloomberg relates the extra yield that investors demand to hold Irish 10-year bonds over German bonds surged to a record on Sunday, Oct. 31, as Mr. Lenihan tries to put together a 2011 budget by Dec. 7 that convinces investors he can get the country's finances in order. "The behavior of international bond markets suggests the government's various announcements haven't convinced markets that we are on a credible, stable path," said Karl Whelan, an economics professor at University College Dublin and a former economist at the Federal Reserve, according to Bloomberg. "The budget is going to be crucial in determining if we can change that attitude." The premium on Irish bonds has doubled since August and is now wider than the spread on Greek debt four days before it sought a European Union-led bailout in April, Bloomberg notes. That's putting pressure on Mr. Lenihan to cut the deficit and overcome both an economic slump and the rising cost of bailing out the country's banks, Bloomberg states. Bloomberg says that while Ireland doesn't need to raise money this year, its EUR20 billion (US$28 billion) cash pile may only last until the middle of 2011. Mr. Lenihan will pave the way for the budget when he publishes a four-year roadmap for cutting the deficit in the next two weeks, Bloomberg states. "The market seems to be worried that Ireland will have to get support," Bloomberg quoted Michiel de Bruin, who oversees about US$35 billion as head of European government debt at F&C Netherlands in Amsterdam, as saying. "People are worried about how the government will be able to show that it's able to anchor the deficit and the debt, and at the same time maintain growth." According to Bloomberg, Mr. Lenihan aims to narrow the budget gap to 3% of gross domestic product by 2014 from about 12% this year. When the costs of the banking rescue are included, this year's deficit jumps to 32 percent of GDP, Bloomberg discloses. ===================== N E T H E R L A N D S ===================== DUTCH MORTGAGE: Fitch Assigns 'BB+sf' Rating to Class B Notes ------------------------------------------------------------- Fitch Ratings has assigned these expected ratings to the class A1, A2 and B notes of Dutch Mortgage Portfolio Loans VIII B.V.: -- EUR220,700,000 class A1 notes, due 2047: 'AAAsf', Outlook Stable; Loss Severity Rating (LSR) 'LS-1' -- EUR529,300,000 class A2 notes, due 2047: 'AAAsf', Outlook Stable; LSR 'LS-1' -- EUR61,700,000 class B notes, due 2047: 'BB+sf', Outlook Stable; LSR 'LS-2' -- EUR8,200,000 class C notes, due 2047: 'NR' Final ratings will be assigned upon closing, subject to a satisfactory review of the final transaction documentation by the rating agency. The capital structure above is the one announced by arrangers to market participants. The overall issuance amount may change depending on the outcome of the market placement. DMPL VIII is a securitization of Dutch residential mortgages originated by Achmea Hyptheekbank N.V. (rated 'A-'/'F2'/Negative) and some of its predecessors. Achmea HB is the mortgage lending entity of the Achmea group, a large insurance and banking group established both in the Netherlands and internationally. This loans in the provisional portfolio have comparatively low loan-to-values by the standards of Dutch mortgage securitizations; the WA LTV of the loans at origination is 77.7% and the current WA LTV is 74.2%. The provisional portfolio is more than six years seasoned in average, which is particularly high. The credit enhancement for the class A notes is provided by the subordination of the class B notes (7.60% of the collateralized notes balance) and the reserve fund (funded at closing at 1.01% of the collateralized notes balance). The financial structure of the transaction is in line with other Dutch mortgage securitizations. Rabobank ('AA+'/Stable/'F1+'/) provides an interest rate swap leaving 35bps of guaranteed excess spread in the transaction, as well as a liquidity facility of 2% of the collateralized notes balance. The counterparty exposure of the transaction to the Achmea group essentially lies in the risk of insurance set-off and related defence, since the group provides around 75% of the capital insurance policies, which themselves cover 20% around of the aggregate portfolio balance. This risk has been incorporated in the rating agency's analysis. E-MAC NL: Note Redemption Cues Moody's to Withdraw Ratings ---------------------------------------------------------- Moody's Investors Service has withdrawn the rating of the notes issued by E-MAC NL 2003-II B.V. following the redemption of all the notes on 25 October 2010. All of the notes had become subject to a mandatory redemption triggered by the failure to obtain rating confirmations from all rating agencies by 20 October 2010 before the put option date, as per the transaction documentation. Moody's had changed the direction of its ongoing rating review of the notes issued to uncertain from possible downgrade on 15 September 2010. The change reflected the rating agency's updated assessment of the complex put option structure of this transaction, which indicated that the ratings could be upgraded as well as downgraded, depending on the outcome of the put option process. Moody's had indicated that it could downgrade the ratings of the notes if an event of default occurred following the failure by GMAC RFC Nederland B.V. to provide the servicer advance upon a mandatory redemption and the trustee served an enforcement notice. E-MAC NL 2002-II was the third and last of the E-MAC transactions subject to provisions that exposed investors to specific risks upon enforcement. Under the post-enforcement priority of payments, the non-capped, market rate-based step-up interests would cease to be subordinated. Moody's reflected this risk in its downgrade of the ratings of the mezzanine and junior classes of notes in the E-MAC NL 2003-II transaction on 18 June 2009, and on 12 January 2010, and its ongoing rating review for further possible downgrade. All of the other outstanding E-MAC transactions are also exposed to a potential mandatory redemption associated with a similar put option process. However, unlike the EMAC NL 2003-II transaction, Moody's believes that none of the other outstanding EMAC transactions is exposed to a change in the priority of the step-up margin in a post-enforcement waterfall. All of the E-MAC transactions are also exposed to a senior swap termination payment in an enforcement scenario. However, Moody's notes that the decision to serve an enforcement notice should be governed by the interests of the majority of senior noteholders. Moody's ratings of the senior class of notes do not consider the scenario whereby the decision of the controlling party would result in a loss to this class. ============= R O M A N I A ============= VICTORIA HOLDING: Australian Parent Files Unit's Insolvency ----------------------------------------------------------- APN/UKA European Retail Property Group has asked for the insolvency of its subsidiary Victoria Holding SA, which owns the City Mall shopping center in Bucharest, Romania. According to romania-insider.com, the Australian-based fund was supposed to repay a EUR40 million loan to UniCredit Bank Austria this month. The company, romania-insider.com relates, has been negotiating with the bank, as it had breached the required interest ratio covenant when the shopping mall was valued at EUR35.4 million in June this year. "Although discussions are continuing, the Facility Agent (the bank, e.n.) has notified the borrower that the loan is now due for repayment in full. As a result of this notice, the relevant subsidiary is no longer in a position to meet its debts and it is expected that it will therefore file for the equivalent of voluntary administration under the Romanian bankruptcy regime," the fund said, according to romania-insider.com. The fund, romania-insider.com notes, said this loan is a limited recourse loan and has no ongoing financial impact to the AEZ group, with the exception of a corporate guarantee which secures the payment of any interest or amortization shortfall under this loan to November 30, 2010. This amount is expected to be less than EUR1 million, the fund said in an official statement, according to romania-insider.com. APN/UKA European Retail Property Group is a holding Company that invests in European retail properties. AEZ has its business operations located in European Union. =========== R U S S I A =========== NATIONAL FACTORING: Moody's Assigns 'B3' Rating to Senior Debt -------------------------------------------------------------- Moody's Investors Service has assigned a B3 long-term global local currency debt rating to the senior unsecured debt of National Factoring Company. The rating carries a stable outlook. Any subsequent unsecured senior debt issuance by NFC will be rated at the same level subject to there being no material change in the bank's overall credit rating. Ratings Rationale The rating of B3 was assigned to this debt instrument: -- RUB 2,000M Senior Unsecured Regular Bond due 05/03/2011 The assigned rating is in line with NFC's global local currency deposit rating of B3, which is, in turn, based on the bank's E+ BFSR (mapping to a Baseline Credit Assessment of B3). Moody's notes that the rating does not incorporate any expectation of systemic or shareholder support for NFC in case of need. Moody's observes that, on the one hand, NFC's rating is constrained by (i) a narrow, competitive and higher-risk business niche which makes it difficult to reach scale; (ii) concentrated, short-term, costly and potentially volatile funding sources that lead to volatility of business and difficulties in competing in low-risk sectors; (iii) modest and inflexible operating efficiency; (iv) liquidity being dependent on related parties; and (v) potential corporate governance issues which could lead to a significant rise in related-party transactions. On the other hand, Moody's highlights that the rating is supported by (i) NFC's high capitalization which enables it to withstand significant stress, (ii) lower-than-average risk appetite for the industry, (iii) reasonable yields on a risk-adjusted basis and (iv) ability to retain market positions in its target segments, secured by an innovative approach and developed technologies. Headquartered in Moscow, Russia, National Factoring Company reported total assets of RUB5.2 billion and net income of RUB76 million according to audited IFRS at YE2009. SOVCOMBANK ICB: S&P Assigns 'B-' LT Counterparty Credit Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned its 'B-' long-term and 'C' short-term counterparty credit ratings to Russia-based Sovcombank ICB LLC. The outlook is stable. At the same time S&P assigned an 'ruBBB' Russian national scale rating. Sovcombank operates in what S&P see as a risky environment in Russia, focusing on generically high-risk unsecured consumer lending with an emphasis on deepening its regional penetration. "S&P is concerned that management will not be able to maintain capitalization at adequate levels, given planned aggressive loan growth," said Standard & Poor's credit analyst Maria Malyukova. "Furthermore, the bank's retail deposit customer base is potentially confidence sensitive." Positively, the bank has good commercial business dynamics with a strong focus on growing its funding through customer deposits and limited reliance on wholesale funding. Sovcombank demonstrated adequate financial performance supported by good efficiency ratios, and improving asset quality indicators for the first half of 2010. Sovcombank is a midsize bank with total assets of Russian ruble 33.6 billion (US$1.1 billion) on June 30, 2010, focused on unsecured consumer lending, particularly in financially underintermediated regions of Russia. Standard & Poor's considers this type of unsecured consumer lending to be generically high risk. However, a high proportion of the bank's customers have demonstrated a good payment track record and the interest rates that the bank charges are high to reflect the risk. The bank currently operates in 25 regions and more than 260 Russian towns, being particularly active in Siberia and Far East federal districts. Sovcombank services about 450,000 active retail customers through a network of more than 600 offices and points of sale offering all-purpose cash loans, which average US$1,000. S&P considers the bank's ownership to be a neutral rating factor, because S&P is uncertain about the shareholders' ability to provide financial support if required. TBIF Financial Services B.V., which is a subsidiary of The Netherlands-based Kardan N.V., and SovCo Capital Partners B.V. own 50% each of Sovcombank. Sovcombank's loan portfolio consists of consumer loans and lending to small and midsize enterprises in equal portions. Sovcombank's asset-quality is improving with the recent decrease in nonperforming loans (overdue more than 90 days) to 9.77% on June 30, 2010, from 15.37% on Dec. 31, 2009. The leading asset-quality indicators, such as first-payment defaults and vintages for 2009- 2010, have improved, thanks to stabilizing economic conditions and borrowers' stronger repayment capacity. "The stable outlook balances the bank's challenging business model, focused on risky, unsecured consumer lending in Russia's regions against its positive commercial dynamics and resilient financial performance," said Ms. Malyukova. S&P could lower the ratings: * If S&P saw asset quality deteriorating materially in excess of what S&P currently anticipate, which could in turn constrain profitability and capitalization; * If deposit outflows triggered a significant liquidity shortage; or * If planned loan growth substantially pressured capitalization. S&P could consider a positive rating action if Sovcombank showed sustained improvement in its financial performance, in particular asset-quality dynamics, and substantially improved its capitalization. ============= U K R A I N E ============= * Moody's Assigns B2 Rating to Ukrainian State Enterprise's Debt ---------------------------------------------------------------- Moody's Investors Service has assigned a long-term rating of B2 to the foreign currency debt issued by the Ukrainian state enterprise called 'Financing of Infrastructural Projects.' The debt benefits from very strong support from the Ukrainian government. The outlook is stable, in line with that of Ukraine's government ratings. Rating Rationale "The debt rating of the Ukrainian state enterprise known as 'Financing of Infrastructural Projects' reflects the very strong support provided by the Ukrainian government," says Dietmar Hornung, Vice President-Senior Credit Officer in Moody's Sovereign Risk Group and lead analyst for Ukraine. 'Financing of Infrastructural Projects' is wholly owned by the Ukrainian state. Its primary mandate is to raise domestic and foreign capital for expenses related to holding the European Football Championship Finals in 2012 (UEFA Euro 2012). By virtue of its charter, the issuer has the status of a legal entity under Ukrainian law. The issuer was established as a state enterprise by the order of the 'National Agency on Preparation and Holding in Ukraine of the European Football Championship Finals in 2012' on 7 September 2010. This agency in turn was established by a resolution of the Cabinet of Ministers of Ukraine on 7 April 2010. The agency is the central organ of executive power in Ukraine for the preparation and holding of the UEFA Euro 2012 event. "Moody's regards the Ukrainian state enterprise 'Financing of Infrastructural Projects' as a vehicle of public policy that is not meaningfully distinguishable from the government," says Mr. Hornung. "Any positive or negative rating action on the government of Ukraine would be matched by a similar action on this state enterprise." Previous Rating Action & Methodology The last rating action on Ukraine was implemented on 11 October 2010, when Moody's changed the outlook on the Ukrainian B2 government bond ratings to stable from negative. Prior to that, Moody's last rating action on 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. =========================== U N I T E D K I N G D O M =========================== ASSET REPACKAGING: S&P Assigns BB+ (sf) Ratings to Various Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its credit ratings to two series of Asset Repackaging Vehicle Ltd.'s resecuritization notes, series 2010-4 and 2010-5. This transaction represents the first public resecuritizations of a European commercial mortgage-backed securities bond. In these transactions, the sellers (Lazuli Ltd. in series 2010-4 and HSBC Bank PLC in series 2010-5) each sold to Asset Repackaging Vehicle a portion of GEMINI (ECLIPSE 2006-3) PLC's 'BB+ (sf)' rated class A commercial mortgage-backed floating-rate notes. The issuance of the series 2010-4 and 2010-5 notes funded the purchase of each portion of the CMBS bond. The ratings reflect S&P's opinion of the expected performance of the underlying collateral, the transaction structure, and the payment priorities. S&P has previously publicly rated 20 issuances from Asset Repackaging Vehicle, each previously backed by U.S. structured finance securities. The scheduled maturity dates of series 2010-4 and 2010-5 are in July 2016. Ratings List Asset Repackaging Vehicle Ltd. GBP69.41 Million Resecuritization Notes Series 2010-4 Class Rating Amount (mil. GBP) ----- ------ ----------------- A1 AA (sf) 17.4 A2 BBB (sf) 6.9 A3 BB+ (sf) 6.9 A4 BB+ (sf) 6.9 A5 BB+ (sf) 6.9 A6 BB+ (sf) 6.9 A7 BB+ (sf) 6.9 B BB+ (sf) 6.9 C NR 3.7 Asset Repackaging Vehicle Ltd. GBP14.81 Million Resecuritization Notes Series 2010-5 Class Rating Amount (mil. GBP) ----- ------ ----------------- A1 AA (sf) 3.7 A2 BBB (sf) 1.5 A3 BB+ (sf) 1.5 A4 BB+ (sf) 1.5 A5 BB+ (sf) 1.5 A6 BB+ (sf) 1.5 A7 BB+ (sf) 1.5 B BB+ (sf) 1.5 C NR 0.6 NR -- Not rated. ATRIUM EUROPEAN: Fitch Upgrades Senior Unsecured Rating to 'BB+' ---------------------------------------------------------------- Fitch Ratings has upgraded Atrium European Real Estate Ltd's (Atrium) senior unsecured rating and Long-term Issuer Default Rating to 'BB+' from 'BB-'. The agency has simultaneously affirmed Atrium's Short-term IDR at 'B'. The Outlook on the Long- term IDR is Stable. "The upgrade reflects the stabilization of rental income, reduced property costs and lower interest payments resulting from high- coupon bond buy-backs of EUR232 million in H110," says Jean-Pierre Husband, Director in Fitch's European Corporate Finance Department. "With development expenditure now complete and the financial structure re-profiled, Atrium's business model is now similar to its Western European peers." With tenant defaults lower than expected in FY09, Fitch believes Atrium's EBIT Net Interest Cover should stabilize between 3.0x and 4.5x between FY10 and FY13. Net leverage should also stay low in the next three years (loan to value of between 5% and 25% to FY13), although Fitch believes that leverage will increase closer to industry average levels (LTV around 40%) over the medium term. This should allow Atrium some financial flexibility and acquisitions of existing rental-generating shopping centers may be possible. While the CEE region has been one of the most exposed to the global economic downturn, it is beginning to show some signs of recovery (see Fitch Emerging Markets Ratings Newsletter -July 2010) with companies reporting improved cash flows and dividends. Fitch is expecting the Russian economy for example to grow 4.3% in 2010, and 4% in 2011 and 2012. The ratings are, however, constrained by the outstanding litigation in respect of the share buy-backs in 2007, and Fitch has little visibility over its timetable or outcome. Although Fitch believes that the ultimate liability to the owners and management may be limited, there is some uncertainty and Atrium's ability to issue new bonds may be constrained. Fitch also expects Atrium to maintain an EBIT NIC of above 2.0x for an investment grade rating. Atrium has drastically cut back on its committed development program, with only one retail project currently under construction in Poland - with a committed spend of EUR8 million. This has assisted the company's liquidity profile. At 30 June 2010 Atrium had EUR386 million of cash deposits available, sufficient to pay the development costs outstanding (EUR8 million) and total debt maturities of EUR58 million in FY10 and FY11. With only EUR35 million of development spend in 2011, Atrium's liquidity position is now strong (with a liquidity score of around 4x at end-June 2010). Although gross rental income stagnated in H110 (EUR74.4 million vs EUR74.6 million in H109) due to temporary discounts on rents (not more than three months) in Russia and Latvia, the increase in net service charge income (due to re-negotiated utility costs and other efficiency improvements) and reduced property expenses has resulted in net rental income increasing 11%. This positive trend is also underlined by the increased occupancy across the group's CEE shopping centre portfolio now at 94.6% (94% at end-December 2009), close to the optimum for a retail landlord. CLARIS IV: S&P Cuts Ratings on Various Classes of Notes to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on Claris IV Ltd.'s series 5, 7, and 10/2006 to 'D (sf)' from 'CCC- (sf)'. S&P also lowered the ratings on Claris IV's series 8/2006 and 9/2006 to 'CC (sf)' from 'CCC- (sf)'. The downgrades follow confirmation that losses from credit events in the underlying portfolio have either exceeded or currently exceed the available credit enhancement and the tranche notionals. S&P understand that the series 5, 7, and 10/2006 noteholders did not receive full principal on maturity. As a result, these three series have defaulted on their obligations and S&P has thus lowered its ratings on these series to 'D (sf)'. In the case of series 8/2006 and 9/2006, S&P has lowered its ratings to 'CC (sf)' as S&P understand that noteholders will not receive full principal on maturity. Ratings List Ratings Lowered Claris IV Ltd. EUR40 million Carmel Valley 2006-3 Synthetic CDO Of RMBS Variable- Rate Notes Series 5 Rating ------ To From -- ---- D (sf) CCC- (sf) US$17.5 Million Carmel Valley Synthetic CDO Of RMBS Variable-Rate Notes Series 7 Rating ------ To From -- ---- D (sf) CCC- (sf) US$39 Million Leibnitz 2006-1 Synthetic CDO Of RMBS Variable-Rate Notes Series 8/2006 Rating ------ To From -- ---- CC (sf) CCC- (sf) US$49 Million Leibnitz 2006-1 Synthetic CDO Of RMBS Variable-Rate Notes Series 9/2006 Rating ------ To From -- ---- CC (sf) CCC- (sf) US$22 Million Leibnitz 2006-1 Synthetic CDO Of RMBS Variable-Rate Notes Series 10/2006 Rating ------ To From -- ---- D (sf) CCC- (sf) CLARIS LIMITED: Moody's Confirms Ba1 (sf) Ratings on Various Notes ------------------------------------------------------------------ Moody's Investors Service has confirmed the ratings of the notes issued by Claris Limited (Millesime). Issuer: Claris Limited Series 20,21,22 and 23/2004 (Millesime) -- EUR25M Series 20 Notes, Confirmed at A1 (sf); previously on June 29, 2010 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade -- JPY500M Series 21 Notes, Confirmed at Baa1 (sf); previously on June 29, 2010 Downgraded to Baa1 (sf) and Placed Under Review for Possible Downgrade -- EUR15M Series 22 Notes, Confirmed at Ba1 (sf); previously on June 29, 2010 Downgraded to Ba1 (sf) and Placed Under Review for Possible Downgrade -- EUR10M Series 23 Notes, Confirmed at Ba1 (sf); previously on June 29, 2010 Downgraded to Ba1 (sf) and Placed Under Review for Possible Downgrade Issuer: Claris Limited Series 25/2004 (Millesime) -- US$5M Series 25 Notes, Confirmed at Ba1 (sf); previously on June 29, 2010 Downgraded to Ba1 (sf) and Placed Under Review for Possible Downgrade This transaction is a synthetic CDO of 100% European ABS assets, initially rated Aaa. At present, the portfolio is composed of 95% RMBS, 2.4% ABS Autos amongst others. The ratings of all tranches were downgraded and placed under review for possible downgrade on 29 June 2010 following the downgrade review of several underlying RMBS exposures. These assets represented approximately 11% of the reference portfolio (16.8% at present). In particular, this included two Greek RMBS senior tranches with an exposure totaling 4.4% of the portfolio and are the two most lowly rated assets. Since then, rating action on one Greek exposure has been concluded and another remains under review for possible downgrade. A total of 11.5% of the portfolio under review for downgrade are Aaa-rated Irish and Portuguese RMBS tranches. Moody's notes that the transaction has not suffered any credit events to date and the lowest rated asset representing 2% of the portfolio is Baa1. Following Moody's review of the transaction and considering the sensitivity analysis performed on all assets under review for possible downgrade, Moody's is currently comfortable with the current rating of all tranches. CONFORTO FINANCIAL: To Be Placed Into Administration ---------------------------------------------------- Citywire reports that Conforto Financial Management is in the process of being wound up and placed into administration. According to Citywire, the company has been crippled by its GBP1.5 million purchase of Optimal Wealth Management earlier this year, and managing director Andy Sutton has opted to wind up the business. The report relates Mr. Sutton said in an e-mail to Conforto clients that he had been in talks with administrator Begbies Traynor over the past three weeks. Potential buyers are understood to be in talks with the administrator although Conforto is yet to be officially placed into administration, Citywire notes. In the e-mail, Mr. Sutton blamed the collapse of Conforto on Optimal, Citywire relates. "Following the administration of our subsidiary (Optimal) in August 2010, Conforto has been dragged down by the events therein," the report quoted Mr. Sutton as saying. Citywire notes that Optimal was put into administration just six months after the acquisition was completed. Its former directors bought the business back from administrator UHY Hacker Young in September, the report adds. Conforto Financial Management is headquartered in Hertfordshire. DECO 8: Fitch Downgrades Rating on Class G Notes to 'Dsf' --------------------------------------------------------- Fitch Ratings has downgraded DECO 8 - UK Conduit 2 plc's class G commercial mortgage-backed notes to 'Dsf' from 'CCsf'. At the same time, Fitch has affirmed all other outstanding classes. The rating actions are: -- GBP138.8m class A1 (XS0251885603): affirmed at 'AAAsf'; Outlook Stable -- GBP255.8m class A2 (XS0251886163): affirmed at 'BBB-sf'; Outlook Negative -- GBP32.3m class B (XS0251886833): affirmed at 'BBsf'; Outlook Negative -- GBP33.9m class C (XS0251887211): affirmed at 'B+sf'; Outlook Negative -- GBP23.4m class D (XS0251887724): affirmed at 'Bsf'; Outlook Negative -- GBP60.9m class E (XS0251889696): affirmed at 'CCsf'; assigned Recovery Rating 'RR4' -- GBP14.2m class F (XS0251890199): affirmed at 'CCsf'; assigned Recovery Rating 'RR6' -- GBP8.3m class G (XS0251890868): downgraded to 'Dsf' from 'CCsf'; assigned Recovery Rating 'RR6' The downgrade of the class G notes reflects the loss allocated to them on the October 2010 interest payment date following the sale of the KS Derby loan collateral. The affirmation of the other outstanding tranches reflects their stable performance since the last review in August 2010. The special servicer, Hatfield Philips International (rated 'CSS3+'), announced that the hotel securing the GBP3.97 million KS Derby loan (0.7% of the portfolio) had been sold on 6 October 2010. The sale price was significantly lower than the July 2009 valuation: final net recoveries were GBP40,725, resulting in a loss of 99% of the original loan balance. The GBP3.92 million loss was allocated reverse sequentially to the notes, resulting in a partial write-down of the class G notes balance. The Ashton Court Hotel, in Derby, was affected by the sole tenant, the Swallow Group, entering voluntary administration in September 2006. The asset sale followed the tenant administration and severe deterioration of the collateral income, which left the borrower unable to make full interest payments at the April 2009 IPD and prompted the transfer of the loan to special servicing. DUNDEE FOOTBALL CLUB: Scottish Football League Deducts 25 Points ---------------------------------------------------------------- Scottish Football League Chief David Longmuir confirmed that the organization's board has deducted 25 points from Dundee Football Club, Metro.co.uk reports. According to Metro.co.uk, a statement on the SFL Web site said it had a "duty to protect the integrity and on-going smooth-running of the league." The report relates Dundee Football Club was found to be guilty of conduct contrary to league rules, the interests of the league and its member clubs. As a result, the report says, the club has been deduced 25 points and a player registration embargo imposed until Dundee comes out of administration. If the club is still in administration at the end of March 2011, the SFL's board will "deal with the club as it sees fit," the report relates. Metro.co.uk notes that as a result of the deduction, Dundee, who is currently managed by caretaker boss Barry Smith, lie at the foot of the Scottish First Division on minus 11 points. Administrator Bryan Jackson, the report adds, described the decision by the SFL as "outrageous" and confirmed the club would attempt to overturn the decision. Dundee went into administration on October 14 after being unable to pay a tax bill which stood at GBP420,000. It is the second time in seven years the club has gone into administration. Dundee Football Club -- http://www.thedees.co.uk/-- is a Scottish football club. IONA CDO: S&P Lowers Rating on Class B Notes to 'CC (sf)' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on IONA CDO I's class A and B notes. At the same time, S&P affirmed the rating on class C notes. These rating actions reflect S&P's assessment of the credit deterioration of the assets in the transaction's underlying reference portfolio, which primarily comprises U.S. residential mortgage-backed securities from 2004, 2005, and 2006 vintages. In S&P's opinion, credit deterioration has led to an increase in scenario loss rates. At the same time, S&P believes that portfolio asset defaults have lowered the available credit enhancement for the notes. In S&P's view, the ratings on the class A and B notes are no longer commensurate with the credit enhancement and portfolio quality, and S&P has therefore lowered its ratings on classes A and B. The losses from the credit events have exceeded the available credit enhancement for the class B notes. In S&P's opinion, the class B noteholders are very unlikely to receive full repayment of principal. As such, S&P has lowered its rating on the class B notes to 'CC (sf)' from 'CCC- (sf)'. At the same time, S&P affirmed the 'CC (sf)' rating on the class C notes. Ratings List IONA CDO I US$136.5 Million Secured Floating-Rate Credit-Linked Notes Ratings Lowered Ratings ------- Class To From ----- -- ---- A CCC- (sf) CCC+ (sf) B CC (sf) CCC- (sf) Rating Affirmed Class Rating ----- ------ C CC (sf) OCCUPATIONAL MEDICALS: Bought Out of Administration by Evidence --------------------------------------------------------------- Evidence Health has bought Occupational Medicals out of administration, putting the Stockport-based company in a "strong position" to continue trading following earlier financial difficulties, Insider Media Limited reports. According to the report, Occupational Medicals went into administration after becoming overstretched on costs, and its brand, goodwill and assets were immediately bought by Evidence Health. The report notes that the combined business has the legal name Occupational Medicals Enterprises but for continuity will trade as Occupational Medicals, providing a wide range of job- related medical assessments. The head office will be at Crowthorne, with the Stockport premises retained, the report says. An unnamed spokeswoman, Insider Media discloses, said that the merged business would provide a wider range of expertise in occupational health and employment services. Every effort would be made to pay the creditors from the original Occupational Medicals, she added. The senior directors from both previous organizations remain with the new business, the report adds. R&R ICE: S&P Downgrades Long-Term Corporate Credit Rating to 'B+' ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered to its long-term corporate credit rating on U.K.-based private-label food manufacturer R&R Ice Cream Ltd. to 'B+' from 'BB-'. The outlook is stable. At the same time, the issue rating on R&R's proposed EUR350 million senior secured notes due 2017 was lowered to 'B+' from 'BB-'. The recovery rating on this instrument is unchanged at '4', indicating S&P's expectation of average (30%-50%) recovery for noteholders in an event of a payment default. "The rating action follows R&R's unexpected move to increase its proposed bond issuance from the previous EUR280 million to EUR350 million," said Standard & Poor's credit analyst Silvia Ortolan. "In S&P's view, this move reflects management's more aggressive financial policy stance and more aggressive debt protection measures." S&P estimate that R&R's debt protection metrics will decline below the levels S&P considers commensurate with the previous ratings, specifically Standard & Poor's-adjusted EBITDA to cash interest coverage of above 3.0x. The ratings on R&R continue to reflect S&P's view of the company's relatively highly leveraged debt structure. From the business risk profile standpoint, the rating is supported by R&R's leading position in Europe as a manufacturer of private-label ice cream and frozen desserts, its diversified customer base, its relatively low ongoing capital requirements, and its good cash conversion capacity. These positive characteristics are partially offset by the company's relatively modest size, limited geographic diversification, and its exposure to volatile agricultural commodities. In S&P's view, R&R is well positioned to continue to generate steady positive free cash flows from operations. Credit measures that are commensurate with the current rating would, in S&P's view, include adjusted EBITDA to cash interest coverage in excess of 2.5x, combined with continuous discretionary cash flow generation in excess of EUR30 million. Continued steady organic growth rates, combined with permanently lower debt leverage at a level that S&P considers commensurate with an aggressive financial profile, could create rating upside. However, S&P believes that R&R's focus on sustaining small bolt-on acquisitions is likely to delay the accumulation of the requisite balance-sheet strength. Conversely, a dilution of cash interest coverage to less than 2.5x, or material operating underperformance affecting R&R's free cash flow generation, would be rating-negative. SALTWELL SIGNS: On the Road to Recovery --------------------------------------- nebusiness.co.uk reports that Saltwell Signs, which went into administration last year, is now on the road to recovery after being bought out by a rival manufacturer, which has already created a number of jobs. The report relates Saltwell Signs was bought by The Redforrest Group earlier this year after it struggled to pay some of its debts and saw its sales drop from GBP3.1 million to GBP1.5 million last year. According nebusiness.co.uk, Redforrest has now turned the company around since its workforce was halved during the administration, and has since moved the company to its own facilities at a cost of GBP150,000. The report notes that the acquisition has seen Saltwell pick up a number of new contracts, including a GBP750,000 contract to make and fit 40 display stands for broadcaster Sky, with the majority already on show at shopping centres across the UK. Saltwell, nebusiness.co.uk relates, is now on target to increase its sales to GBP2 million by March next year with Redforrest hopeful of growing this to around GBP3 million in 2012. The firm has already increased its workforce to 25 since joining the new parent with additional jobs planned for next year, the report adds. Saltwell Signs, based at Team Valley, Gateshead, is a sign making business firm. * BRITAIN: Pressures Ease for Manufacturing Industry ---------------------------------------------------- The Manufacturer, citing British Industry, reports almost 50% less manufacturing companies fell into administration in the first nine months of 2010 compared with the same period last year, according to business advisers Deloitte. According to the report, there have been 252 manufacturing administrations so far this year compared with 439 at the same conjecture last year and this 42.6% decline has been topped only by the retail sector (50.2%) and financial services (47.1%). This compares with a 36% drop when taking all companies across all sectors into account, the report relates. The report notes that administrations have been falling steadily, quarter by quarter too, and in Q3 2010, there were only 66 manufacturing administrations compared with 128 in 2009. Ross James, manufacturing partner at Deloitte, said that although businesses should remain cautious, the rates of failure are "a positive sign," the report discloses. "The decline in administrations highlights the success of the proactive approach adopted by many manufacturing businesses to manage both their cash flows and stock levels," the report quoted Ms. James as saying. "In addition there is now some more, albeit fragile, confidence in the corporate sector to invest, which is translating into orders for capital goods manufacturers," he added. Mr. James, the report notes, also pointed to a positive outlook for mergers and acquisitions as another sign of recovery. A recent survey by Deloitte among CFOs found that over 80% expect M&A activity to increase over the next 12 months, with 18% identifying expansion through acquisition as a priority for the coming year, the report notes. "This is positive news for business more generally and demonstrates that companies now have the confidence to look for growth opportunities," Mr. James added, The Manufacturer relates. ********* 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. 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