/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/101203.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, December 3, 2010, Vol. 11, No. 239 Headlines A U S T R I A A-TEC INDUSTRIES: Law Denies Bondholders Restructuring Information F R A N C E BANQUE D'ORSAY: Fitch Affirms Individual Rating at 'D' BLUE LINE: Faces Probe Following Compulsory Liquidation PARIS PRIME: S&P Raises Credit Rating on Class C Notes G E R M A N Y BENQ MOBILE: Qisda Settles Legal Proceedings With Administrator PROMISE-I MOBILITY: S&P Cuts Rating on Class E Notes to B- (sf) WESTLB AG: Posts EUR53 Million Loss in Year Ended September 30 * GERMANY: Landesbanken Restructuring in Doubt Following Losses G R E E C E DRYSHIPS INC: Ocean Rig Inks Falkland Exploration Contract I C E L A N D LANDSBANKI ISLANDS: Compensation Being Sought From Former Execs I R E L A N D LUSITANO PROJECT: S&P Puts Ratings on CreditWatch Negative WHELAN GROUP: NAMA Opposes Examinership; Anglo, BOSI to Take Hit I T A L Y CASSA DI RISPARMIO: Fitch Affirms 'BB' Issuer Default Rating R U S S I A CENTRAL TELECOMMUNICATIONS: S&P Raises Corporate Rating to 'BB' DALCOMBANK: Fitch Affirms Individual Rating at 'E' GOLD STANDARD: Posts US$3.6 Million Loss in September 30 Quarter INTERNATIONAL INDUSTRIAL: Declared Bankrupt by Moscow Court KUBAN-CREDIT BANK: Moody's Assigns E+ Financial Strength Rating MOSCOW BANK: Fitch Affirms Individual Rating at 'D/E' NORTH-WEST TELECOM: S&P Affirms Corporate Credit Rating at 'BB-' TRANSSIBERIAN REINSURANCE: Fitch Cuts Insurer Rating to 'B+' URALSVYAZINFORM OJSC: S&P Raises Corporate Credit Rating to BB- VOLGATELECOM OJSC: S&P Raises Corporate Credit Rating to 'BB' * Fitch Affirms 'BB' Long-Term Ratings on Russia's Penza Region U N I T E D K I N G D O M ASPEN INSURANCE: Moody's Affirms 'Ba1' Preferred Debt Ratings CRUSADERS: Davies Welcomes Rescue Package for Firm EUROWORLD DIRECT: David Rubin Appointed as Liquidator GREENLIT: Acorn Media Acquires "Foyle's War" Rights INTERNATIONAL POWER: S&P Keeps 'BB' Rating on Positive Watch KC1 LIMITED: Palm Court Hotel Site Up for Sale LEAMINGTON DESSERTS: Placed Into Administration LEASEWAY VEHICLE: Goes Into Administration LONDON & SCOTLAND: Goes Into Liquidation X X X X X X X X * BOOK REVIEW: Health Plan - The Practical Solution to the Soaring ********* ============= A U S T R I A ============= A-TEC INDUSTRIES: Law Denies Bondholders Restructuring Information ------------------------------------------------------------------ Boris Groendahl and Zoe Schneeweiss at Bloomberg News report that bondholders owed EUR309 million (US$403 million) by A-Tec Industries AG are being penalized by an 1874 law that was designed to protect them. Bloomberg says Austria's Bond Curator Law, enacted under Kaiser Franz Joseph, rules that bondholders are represented exclusively by court-appointed "curators," or trustees, in insolvencies. According to Bloomberg, created to offer investors a swift settlement of claims after the 1873 stock market crash that spread from Vienna to financial centers around the world, the law is now denying bondholders a say in A-Tec's restructuring and direct access to information about the process. "Our clients are clearly frustrated and disappointed," said Louise Verrill of law firm Brown Rudnick LLP, which represents a majority of holders of the two convertible bonds A-Tec has sold, according to Bloomberg. "If the current situation is any guide, the treatment of bondholders in an insolvency in Austria places debt investors at a significant disadvantage compared to other international markets." Holders of A-Tec's two convertible bonds, which mature in May and October 2014, and of a bond that matured on Nov. 2 and wasn't redeemed because of the insolvency filing, are the company's biggest creditors, with EUR309 million in liabilities between them, including accrued interest on coupon payments, Bloomberg says, citing court filings by the bond trustees. Bloomberg notes Hans-Georg Kantner, a representative of credit protection association Kreditschutzverband von 1870, who is also the spokesman of A-Tec's creditor committee, said the company also owes about EUR50 million to creditors including suppliers and tax authorities. According to Bloomberg, Mr. Kantner, whose creditor committee is advising the restructuring administrator, said as much as EUR300 million would come due if guarantees to its subsidiaries were drawn. Under Austrian law, A-Tec's bondholders would salvage at least 30% of their claims through the method of debt restructuring under self-administration chosen by the company, Bloomberg discloses. Failure to work out a deal would result in straight insolvency proceedings, with the aim of liquidating the company as swiftly as possible for the maximum gain, Bloomberg states. Bloomberg relates the group of convertible bondholders represented by Brown Rudnick have hired Lazard Ltd. to help them make an independent assessment of what the company's assets are worth and how best to maximize the returns for debt investors. Ms. Verrill, as cited by Bloomberg, said they want the investment bank to have access to relevant information on A-Tec, including inter-company loans and a valuation of the company that Deloitte & Touche LLP auditors will be presenting in December. Bloomberg notes Ms. Verrill said that while the trustees for the bonds have agreed to allow elected bondholder representatives to examine the Deloitte valuation, there is no legal basis for this and it is merely a gesture of good will. According to Bloomberg, she said bondholders also aren't involved in drawing up the restructuring plan. Bloomberg says A-Tec's management has until Jan. 20 to win creditor approval for its debt restructuring. If it fails, an insolvency administrator takes over the process, Bloomberg states. A creditor meeting to vote on the restructuring plan is scheduled for Dec. 29, Bloomberg discloses. At the creditor meeting, the bondholders will be represented by the trustees appointed by Vienna's Commercial Court: Georg Freimueller, Ulla Reisch and Susi Pariasek, according to Bloomberg. In addition, the trustees will hold a meeting on Dec. 22 to gauge bondholder sentiment on the restructuring plan, Bloomberg notes. Ms. Pariasek, as cited by Bloomberg, said any decision they make will require approval from the curator court. On Oct. 22, 2010, the Troubled Company Reporter-Europe, citing Bloomberg News, reported that A-Tec sought court clearance to reorganize debt after losing access to its line of credit because of an Australian power-station project's financial difficulties. Bloomberg disclosed A-Tec said in a statement on Oct. 20 that the company filed for self-administered reorganization proceedings at the Vienna Commercial Court and appointed trustees for bondholders. Bloomberg said A-Tec has 90 days under Austrian law to seek an agreement with lenders, after which it can seek full protection from creditors. The company has a EUR798 million (US$1.11 billion) revolving credit facility and EUR302 million of outstanding bonds, according to Bloomberg data. A-Tec Industries AG is an engineering company based in Vienna, Austria. =========== F R A N C E =========== BANQUE D'ORSAY: Fitch Affirms Individual Rating at 'D' ------------------------------------------------------ Fitch Ratings has affirmed Banque d'Orsay's Long-term and Short- term Issuer Default Ratings at 'BBB+' and 'F2', respectively, and removed them from Rating Watch Negative. At the same time, the agency has affirmed Orsay's Individual Rating at 'D' and Support Rating at '2' and removed the Support Rating from RWN. The Outlook for Orsay's Long-term IDR is Stable. Orsay's IDRs are aligned with those of Oddo et Compagnie (rated 'BBB+'/Stable/'F2'), which acquired the bank on November 30, 2010. Orsay was previously owned by WestLB AG (rated 'A-'/'F1', both on RWN). It is contemplated that Orsay will be merged into Oddo in Q111, when it will cease to exist as a separate legal entity. When this occurs, its ratings will be withdrawn. The Individual Rating reflects the bank's limited franchise, small size, weak funding profile and modest profitability since 2007. Orsay is a niche bank operating in arbitrage, asset management and private banking. Oddo intends to retain all of Orsay's staff and business lines, which are complementary to its own, although it will adapt them to current market conditions. Prior to the sale to Oddo, Orsay's balance sheet was drastically scaled down (notably by selling the bond portfolio) and total assets were reduced to around EUR300m. Oddo intends to take advantage of Orsay's expertise in the equity arbitrage business to launch a specialised investment fund. Since H208, the bulk of the bank's refinancing needs have been met through WestLB and repos with the ECB and with some European commercial banks. Orsay remains active in the repo markets. Subordinated debt subscribed by WestLB has been repaid. Orsay is fully-owned by Oddo, whose propensity and ability to provide support to Orsay is considered high. Orsay's IDRs will move in tandem with Oddo's. The rating actions for Orsay are: -- Long-term IDR: affirmed at 'BBB+'; RWN removed; Stable Outlook assigned -- Short-term IDR: affirmed at 'F2'; RWN removed -- Individual Rating: affirmed at 'D' -- Support rating: affirmed at '2'; RWN removed -- Senior unsecured debt: affirmed at 'BBB+'; RWN removed -- Certificate of Deposit: affirmed at 'F2'; RWN removed BLUE LINE: Faces Probe Following Compulsory Liquidation ------------------------------------------------------- Chad Trautvetter at AINonline reports that Blue Line is facing investigation following the company's compulsory liquidation. According to AIN, the suddenness of the company's demise prompted the judge in charge of the liquidation to tap a certified public accountant to investigate Blue Line's financial affairs. AIN says a preliminary report is to be released by year-end. AIN relates the company went into liquidation on October 6 with debts of EUR37 million (US$52 million), resulting in the loss of 200 jobs. AIN notes the official liquidator told AIN depending on the accountant's findings, civil or legal action could follow. Blue Line is a French air-charter operator. PARIS PRIME: S&P Raises Credit Rating on Class C Notes ------------------------------------------------------ Standard & Poor's Ratings Services raised its credit rating to 'AAA (sf)' from 'A (sf)' on Paris Prime Comm Real Estate FCC's class C notes and at the same time removed it from CreditWatch developing. The transaction's other ratings remain unaffected. The class C note balance has significantly reduced recently following the borrower's sale of its shares in the owner of the Colise property two quarters ago and subsequent note redemption. The creditworthiness of the class C notes has improved as a result, in S&P's view, with the reported note-to-value ratio standing at 30% and a subordination of 58%. In August 2010, S&P placed its rating on the class C notes on CreditWatch developing while S&P assessed the risk of the class C notes experiencing interest shortfalls in a scenario in which the liquidity facility was not available to cover interest shortfalls in the context of prior ranking expenses. In view of the loan credit characteristics, S&P believes that even under stressed scenarios (for example, a scenario in which the transaction does not repay at maturity in April 2011 and thereafter it is no longer protected against interest rate movements) the class C notes will be fully repaid from the workout proceeds before interest rates rise to a level that would prevent the class C noteholders receiving interest in full. Paris Prime Comm Real Estate closed in October 2006 and is now secured by a Haussmann office property (Messine) located in the central business district of Paris, France. The loan-to-value ratio based on a December 2009 valuation (EUR95.2 million) stands at 73%. About three-quarters of the space is let to Axa Re under a lease expiring at the earliest in 2012. The remainder of the property is vacant and currently under refurbishment in order to be marketed. Ratings List Paris Prime Comm Real Estate FCC EUR452.15 Million Comm Mortgage-Backed Floating-Rate Notes Rating Raised and Removed From CreditWatch Developing Rating ------ Class To From ----- -- ---- C AAA (sf) A (sf)/Watch Dev Ratings Unaffected Class Rating ----- ------ D D (sf) E D (sf) ============= G E R M A N Y ============= BENQ MOBILE: Qisda Settles Legal Proceedings With Administrator --------------------------------------------------------------- Jason Tan at Taipei Times reports that Qisda Corp. said it settled legal proceedings pertaining to the insolvency of its mobile device arm, BenQ Mobile Holding GmbH & Co. Taipei Times says the announcement followed a settlement of international arbitration proceedings with Siemens AG last year. Taipei Times relates Qisda said it has now resolved all legal proceedings with the insolvency administrator of BenQ Mobile and other related entities. "All parties agreed to withdraw existing lawsuits and waived all claims it had or might have against other parties respectively. All material litigations arising out of Qisda's purchase of the Siemens mobile device business in 2005 have now been resolved," Qisda said in a statement, according to Taipei Times. Taipei Times notes that Qisda emphasized the decision was made for the best interests of shareholders, and that the move would not adversely impact on Qisda's normal operations and financial conditions, and instead would allow the company's management to focus on core business operations. As reported in the TCR-Europe, BenQ Mobile GmbH & Co. filed for insolvency in Munich on Sept. 29, 2006, after BenQ Corp.'s board decided to discontinue capital injection into the mobile unit in order to stem unsustainable losses. The collapse follows a year after Siemens sold the company to Taiwanese technology group BenQ. PROMISE-I MOBILITY: S&P Cuts Rating on Class E Notes to B- (sf) --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on PROMISE-I Mobility 2008-1 GmbH's class A2+, B, C, D, and E notes. At the same time, S&P affirmed its rating on the class A1+ notes. Promise 2008 is a balance-sheet synthetic asset-backed securities transaction that closed in March 2008. Bank loans originated by IKB Deutsche Industriebank to German small and midsize enterprises back the transaction. The rating actions follow deterioration in the credit quality of the portfolio underlying the transaction. The weighted-average portfolio rating has dropped to 'BB+' from 'BBB' at closing, which has driven an increase in the scenario loss rates derived by the CDO Evaluator default simulations. The reference portfolio for this transaction contains loans to small- and mid-cap obligors. S&P believes the class A1+ notes maintain a level of credit enhancement commensurate with a 'AAA (sf)' rating. While the deterioration of the pool credit quality has increased the scenario loss rates at the 'AAA' level, this has been mitigated by the increase of credit enhancement available to the class A1+ notes as a consequence of amortization (only 44.9% of the original notional amount is still outstanding). An additional support for the notes is the pay-down rate, which is limiting their risk- exposure horizon. The impact of the shift in asset quality was most pronounced in the mezzanine notes--classes A2+, B, and C. Although there was an increase in relative credit enhancement, this was markedly less than for the senior tranche, and taking this together with the increase in scenario loss rates, S&P concluded that the credit enhancement available to these notes was no longer commensurate with the ratings. S&P has lowered its ratings on these classes accordingly. Two credit events have been allocated so far. The size of the unrated class F first-loss piece shrank to approximately 81% of its original size. Considering the current credit events in workout, S&P's view is that principal repayment on the class D and E notes is reliant on a benign economic environment. The one- notch difference between the ratings on these classes reflects the levels of credit enhancement. It should be noted that S&P's scenario analysis indicates that in the event of a one-notch decrease in the weighted-average reference portfolio quality, the class B and C notes would most likely lose their investment-grade ratings, while the ratings assigned to the senior notes would also likely be negatively affected. Ratings List PROMISE-I Mobility 2008-1 GmbH EUR83.9 Million Floating-Rate Credit-Linked Notes Ratings Lowered Rating ------ Class To From ----- -- ---- A2+ AA- (sf) AAA (sf) B A- (sf) AA (sf) C BBB- (sf) A (sf) D B (sf) BBB (sf) E B- (sf) BB (sf) Rating Affirmed Class Rating ----- ------ A1+ AAA (sf) WESTLB AG: Posts EUR53 Million Loss in Year Ended September 30 -------------------------------------------------------------- James Wilson at The Financial Times reports that WestLB AG on Wednesday posted a net loss of EUR53 million (US$69.6 million) in the year to the end of September compared with a profit of EUR184 million in the same period last year. According to the FT, WestLB was the only Landesbank to make a loss in the third quarter, swinging to a net EUR120 million loss after EUR28 million of net income in the second quarter. The FT says the results imply a deterioration at WestLB's "core" bank -- excluding assets earmarked for disposal or restructuring -- where pre-tax profits after nine months were EUR255 million compared with EUR304 million in the first six months. There is doubt in Germany that WestLB can be sold in its current form to an investor or strategic buyer, while proposals for some kind of merger with other Landesbanken have yet to bear fruit, the FT states. Restructuring Plan As reported by the Troubled Company Reporter-Europe on Nov. 17, 2010, the FT said WestLB had been offered a three-month breathing space after several hours of crisis talks between German finance minister Wolfgang Schauble, and other senior officials, and Europe's competition chief, Joaquin Almunia. The FT disclosed the bank would be given until February 15 to prepare a new restructuring plan. State Aid Probe On Nov. 9, 2010, the Troubled Company Reporter-Europe, citing The Associated Press, reported that the European Union was extending its probe of state aid for WestLB because the bank received more money than it had foreseen. The Associated Press disclosed the European Commission, the EU's competition authority, also said it had growing doubts about the state-controlled bank's future viability. The commission said Westdeutsche Landesbank received EUR6.95 billion in state aid when it transferred more than EUR77 billion in bad investments to a so-called bad bank, because the bad bank overestimated the real economic value of those investments, according to The Associated Press. That is EUR3.4 billion more than the commission had foreseen when it first opened a probe into the state aid almost a year ago, The Associated Press noted. About WestLB Headquartered in Duesseldorf, Germany, WestLB AG (DAX:WESTLB) -- http://www.westlb.com/-- provides financial advisory, lending, structured finance, project finance, capital markets and private equity products, asset management, transaction services and real estate finance to institutions. In the United States, certain securities, trading, brokerage and advisory services are provided by WestLB AG's wholly owned subsidiary WestLB Securities Inc., a registered broker-dealer and member of the NASD and SIPC. WestLB's shareholders are the two savings banks associations in NRW (25.15% each), two regional associations (0.52% each), the state of NRW (17.47%) and NRW.BANK (31.18%), which is owned by NRW (64.7%) and two regional associations (35.3%). * * * As reported by the Troubled Company Reporter-Europe on Sept. 29, 2010, Fitch Ratings upgraded the Individual Rating of WestLB to 'D' from 'E'. Fitch said the upgrade of WestLB's Individual Rating reflects the transfer of about EUR77 billion of non- strategic assets and securitized investments to specially created run-off institution Erste Abwicklungsanstalt and the EUR3 billion capital injection by the German Finanzmarktstabilisierungsfonds (SoFFin). These measures and the bank's return to profitability in H110 substantially reduced the risk that WestLB might need external support in the short term. However, Fitch considers that the bank's emergence as a strong going concern remains uncertain. * GERMANY: Landesbanken Restructuring in Doubt Following Losses --------------------------------------------------------------- James Wilson at The Financial Times reports that some of Germany's biggest Landesbanken are still mired in losses, casting doubt over the viability of efforts to restructure and consolidate the troubled sector. According to the FT, half of the six most important Landesbanken have reported pre-tax losses during the first nine months of the year. Landesbanken are regionally owned public sector banks which carry out some centralized services for smaller savings banks and lend to the corporate sector, the FT discloses. The FT says they have struggled because of low profitability, tempting some to invest heavily in high-yielding securities in the years leading up to the global financial crisis. The FT relates investment strategies left four of the banks nursing billions of euros of losses and led the government as well as European authorities to step up their calls for a radical reshaping of the sector, seen as a weak spot in Germany's financial system. WestLB, the last of the group to reveal its quarterly results, on Wednesday announced a net loss of EUR53 million (US$69.6 million) in the year to the end of September compared with a profit of EUR184 million in the same period last year, the FT notes. Two other Landesbanken -- HSH Nordbank, a leading supplier of shipping finance, and Landesbank Baden-W�rttemberg, the biggest by assets -- have also been lossmaking during the first nine months of the year, the FT states. =========== G R E E C E =========== DRYSHIPS INC: Ocean Rig Inks Falkland Exploration Contract ---------------------------------------------------------- DryShips Inc. announced the signing of a two well exploration drilling contract by the Company's wholly-owned subsidiary, Ocean Rig UDW Inc. The contract signed with Borders & Southern Petroleum plc is for a two well contract for exploration drilling offshore the Falkland Islands for a period of about 90 days, commencing in the fourth quarter of 2011, immediately after the completion of the current contract. The contract value is approximately US$77 million. There are three further optional wells that could extend the contract by 135 days. About DryShips Inc. Based in Greece, DryShips Inc. -- http://www.dryships.com/-- -- owns and operates drybulk carriers and offshore oil deep water drilling units that operate worldwide. As of September 10, 2010, DryShips owns a fleet of 40 drybulk carriers (including newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.6 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS". The Company's balance sheet at Sept. 30, 2010, showed $5.80 million in total assets, US$1.90 million in total current liabilities, US$1.10 million in total non current liabilities, and stockholders' equity of US$2.80 million. On November 25, 2010, DryShips Inc. entered into a waiver letter for its US$230.0 million credit facility dated September 10, 2007, as amended, extending the waiver of certain covenants through December 31, 2010. As reported in the Troubled Company Reporter on Sept. 29, 2010, the Company said it is currently in negotiations with its lenders to obtain waivers, waiver extensions or to restructure its debt. As of June 30, 2010, the Company's theoretical exposure (current portion of long-term debt less cash and cash equivalents less restricted cash) amounted to US$761.4 million. ============= I C E L A N D ============= LANDSBANKI ISLANDS: Compensation Being Sought From Former Execs --------------------------------------------------------------- Omar R. Valdimarsson at Bloomberg News reports that Landsbanki Islands hf's winding-up and resolution committees are seeking compensation from the bank's former executives for allegedly granting loans to related parties. Bloomberg relates the committees said in an e-mailed statement Wednesday following a creditors' meeting that they want the executives who ran the bank in 2008 to pay it ISK30 billion (US$258 million) to ISK35 billion in compensation for losses on the loans. According to Bloomberg, Landsbanki, which didn't name the executives in the statement, said the demands followed an investigation by a forensic team from Deloitte engaged by the bank and law firm Morrison & Foerster. Landsbanki, as cited by Bloomberg, said the loans in question were granted to investment company Grettir and failed lender Straumur- Burdaras Investment Bank. Bloomberg notes the committees said in the statement the bank has taken decisions on 9,152 claims filed against Landsbanki Committees Seek Compensation From Former Executives it. Before its failure in October 2008, Landsbanki was run by Chief Executive Officers Sigurjon Arnason and Halldor Kristjansson, Bloomberg discloses. About Landsbanki Islands Landsbanki Islands hf, also commonly known as Landsbankinn in Iceland, is an Icelandic bank. The bank offered online savings accounts under the "Icesave" brand. On October 7, 2008, the Icelandic Financial Supervisory Authority took control of Landsbanki and two other major banks. Landsbanki filed for Chapter 15 protection on Dec. 9, 2008 (Bankr. S.D. N.Y. Case No.: 08-14921). Gary S. Lee, Esq., at Morrison & Foerster LLP, represents the Debtor. When it filed for protection from its creditors, it listed assets and debts of more than US$1 billion each. ============= I R E L A N D ============= LUSITANO PROJECT: S&P Puts Ratings on CreditWatch Negative ---------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch negative its credit ratings on Lusitano Project Finance 1 Ltd.'s class A, B, C, D, and E notes. The rating actions follow S&P's initial assessment of the deterioration S&P has observed in the credit quality of the underlying portfolio and the downward revisions S&P has made in expected recovery rates for several assets in the portfolio. S&P also understands that the originator plans to restructure the transaction. S&P's initial assessment suggests that the credit enhancement available to each class of notes is no longer commensurate with the levels S&P generally expect to see at the assigned ratings. S&P has therefore placed the ratings on CreditWatch negative. S&P expects to assess the originator's restructuring proposal and resolve the CreditWatch placements in due course. Lusitano Project Finance 1 is a collateralized debt obligation of project finance and corporate securitization loans. The transaction closed in December 2007. Ratings List Lusitano Project Finance 1 Ltd. EUR1,079.1 Million Asset-Backed Deferrable Floating-Rate Notes[1] Ratings Placed on CreditWatch Negative Rating ------ Class To From ----- -- ---- A AAA (sf)/Watch Neg AAA (sf) B AA (sf)/Watch Neg AA (sf) C A (sf)/Watch Neg A (sf) D BBB (sf)/Watch Neg BBB (sf) E BB (sf)/Watch Neg BB (sf) [1] The ratings on the class A and B notes address the timely payment of interest and the ultimate payment of principal. The ratings on the class C, D, and E notes address the ultimate payment of interest and principal. WHELAN GROUP: NAMA Opposes Examinership; Anglo, BOSI to Take Hit ---------------------------------------------------------------- Mary Carolan at The Irish Times reports that the National Assets Management Agency (Nama) is opposing the appointment of an examiner to five companies in the Whelan Group. The Irish Times says the High Court will hear the petition for examinership today, December 3. According to The Irish Times, Nama has taken over some EUR50 million debts owed to Anglo Irish Bank by the Whelan companies and is opposed to examinership because of a proposed large write down of the debts of secured creditors. The Whelan companies, based in Ennis, Co Clare, say they have a consolidated deficit of some EUR10 million as a going concern rising to about EUR50 million if placed in liquidation, The Irish Times discloses. They say, if a survival scheme is formulated and approved and a program of cost-cutting measures and sale of non- core assets put in place with outside investment, the group could return to profitability next year and their underlying business is sound, The Irish Times notes. According to The Irish Times, they said if examinership is refused, the prospects are "bleak" for creditors and employees. The Irish Times relates John Breslin, who is representing Lagan Cement, said it has brought a petition to wind up Whelan's Limestone Quarries Ltd (WLQL), one of the five companies seeking protection and the "engine company" of the group, and that petition has been adjourned to December 13. Mr. Justice Brian McGovern on Wednesday adjourned the hearing of the companies' petition after being told the companies needed time to reply to the issues raised by NAMA and others, The Irish Times notes. The five companies involved are Whelan Group (Ennis) Ltd (WGEL); Whelans Limestone Quarries (Contracts) Ltd (WLQCL); Whelans Limestone Quarries Ltd (WLQL); Whelans Quarries (Carraigtwohill) Ltd (WQCL) and Shannon Explosives Ltd (SEL), The Irish Times discloses. In its petition, the group says WLQL is the principal trading company in the group and the financial survival of all five companies is intrinsically linked with the financial stability and survival of WLQL, according to The Irish Times. The companies secured court protection from the High Court on November 22 last pending the hearing of the petition for examinership and they remain under protection until the petition is determined, The Irish Times states. Laura Noonan at Irish Independent reports Anglo Irish Bank and Bank of Scotland (Ireland) have a combined exposure of about EUR100 million to the Whelan Group (Ennis), which is seeking court protection from its creditors. According to Irish Independent, the most recent figures published by the group show its bank debt stood at about EUR60 million at the end of 2007, with the bankers listed as Anglo and BOSI. It is understood that the debt pile has since risen to about EUR100 million, Irish Independent says. The debts were secured on the assets of the company, as well as personal guarantees and guarantees on the life insurance policies of some of Whelan's directors, Irish Independent notes. Irish Independent relates Anglo registered a fresh charge against Whelan's property, goodwill and licenses on March 10, 2010, and holds three other charges. None are registered as satisfied, Irish Independent states. The 2007 filings also show that Whelan's was suffering even before the economic collapse, racking up losses of more than EUR18 million that year as it re-valued its quarries down by almost EUR12.5 million and took an exceptional hit of EUR6.4 million, Irish Independent discloses. ========= I T A L Y ========= CASSA DI RISPARMIO: Fitch Affirms 'BB' Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has affirmed Cassa di Risparmio della Repubblica di San Marino's Long-term Issuer Default rating at 'BB' with a Negative Outlook. Simultaneously, CRSM's Long-term IDR has been withdrawn, together with its other ratings. A full list of rating actions is detailed at the end of this comment. The ratings are withdrawn as the agency will no longer have sufficient information to maintain the ratings due to the issuer's decision to stop participating in the rating process. Fitch will no longer provide ratings or analytical coverage for the issuer. Cassa di Risparmio della Repubblica di San Marino's Ratings -- Long-term IDR affirmed at 'BB'; Outlook Negative; withdrawn -- Short-term IDR affirmed at 'B'; withdrawn -- Individual rating affirmed at 'C/D'; withdrawn -- Support rating affirmed at '5'; withdrawn -- Support Rating Floor affirmed at 'No Floor'; withdrawn =========== R U S S I A =========== CENTRAL TELECOMMUNICATIONS: S&P Raises Corporate Rating to 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its long-term corporate credit rating on Russian regional telecommunications operator Central Telecommunications Co. (OJSC) to 'BB' from 'BB-'. The outlook is stable. At the same time, the national scale rating on CTC was raised to 'ruAA' from 'ruAA-'. The ratings were removed from CreditWatch, where they were placed with developing implications on June 28, 2010. "The rating actions mainly reflect S&P's view of the improvement in CTC's financial profile," said Standard & Poor's credit analyst Alexander GriazNov. "S&P has affirmed its assessment of CTC's liquidity as "adequate". The risk of early repayment claims from the company's creditors, which S&P previously indicated as a possible near-term risk, is now eliminated, as the window for such claims is now closed. In addition, the company managed to decrease its reliance on short-term debt in 2010 in line with a decline in overall leverage." CTC's debt leverage declined significantly over the past 12 months. As of June 30, 2010, the ratio of debt to EBITDA was 0.9x, a considerable improvement from 1.7x a year ago. Cash flow generation remains robust: The ratio of funds from operations to debt was 83.2% for the 12 months ended June 30, 2010. The ratings on CTC are constrained by the company's exposure to Russia's weak capital markets, limited revenue diversity, and increasing competition in the most lucrative areas, such as Moscow Oblast. The ratings are supported by CTC's resilient market share (more than 70% of the fixed-line market), vast network in European Russia's central region, and ownership of last-mile access to 6.7 million customers. "The outlook is stable because S&P believes that CTC will continue its strong operating performance, generate positive free cash flow, and maintain adequate liquidity," said Mr. Griaznov. S&P will withdraw the rating on CTC when its merger with OJSC Rostelecom is finalized because after closing of the transaction, Central Telecommunications Co. will cease to exist as a separate legal entity. DALCOMBANK: Fitch Affirms Individual Rating at 'E' -------------------------------------------------- Fitch Ratings has changed the Outlooks on Moscow Bank for Reconstruction and Development's and Dalcombank's Long-term Issuer Default Ratings to Positive from Stable. At the same time, it has affirmed the Long-term IDRs of both banks at 'B+' respectively. A full list of rating actions on both banks is provided at the end of this announcement. The Outlook revisions for MBRD and DCB follow a revision of the rating Outlook on Sistema Joint Stock Financial Corp. ('BB-') to Positive from Stable. Sistema is the majority shareholder of MBRD, which in turn is the sole owner of DCB. MBRD's and DCB's IDRs reflect Fitch's view of the strong propensity of Sistema to provide support to these banks in case of need. The future direction of the bank's ratings is likely to continue to depend on Sistema's Long-term IDR and Fitch's view of the parent's propensity to support the group's banks. MBRD's Individual rating of 'D/E' reflects the bank's deteriorated asset quality, weakened profitability, concentrated balance sheet, significant level of related-party business and frequent changes in management. Fitch also continues to express concern about the low transparency of the operations of MBRD's Luxemburg-based subsidiary, East-West United Bank (which accounted for 42% of consolidated loans at end-H110), although management disclosure suggests that a majority of the subsidiary's loans are cash- backed. Fitch has been informed by the bank that the lack of transparency of EWUB's operations is due to local regulatory restrictions on disclosure of customer information. At end-H110, MBRD's reported level of loans overdue more than 90 days accounted for 9.7% of bank's stand-alone loan book, and an additional 22% of loans were restructured. Overdue loans in EWUB's portfolio were reportedly low. The capitalization of the bank continues to be supported by the shareholder: in 2009, Sistema provided RUB1.8 billion of new subordinated debt and bought out some of the bank's non-performing loans, resulting in an equity increase of RUB1.4bn. At end-H110, MBRD's consolidated Basel I tier 1 and total capital ratios were 9.5% and 14.6% respectively, although the tier 1 ratio would have been 14.2%, after allowing for Sistema's conversion in October 2010 of RUB5.2 billion of subordinated loans into equity. In H111, Sistema plans to inject another RUB4 billion of fresh equity into the bank, although the impact of this on capital ratios could be offset in light of the bank's ambitious growth plans. DCB's Individual Rating of 'E' reflects the bank's small size, weak and still deteriorating asset quality, weak capitalization and concentrated balance sheet. At end-Q310 the bank's reported NPLs accounted for 14.3% of total loans, up from 12.7% at end- 2009. Additionally 6.2% of loans were restructured. At end-Q310, the bank's Basel I tier 1 and total ratios were 7.5% and 12.6% respectively, which were moderate in view of its deteriorating asset quality. The regulatory CAR was just 11% at end-Q310, close to the minimum required 10%, indicating low loss absorption capacity. Fitch was informed that Sistema plans to support DCB's capital with RUB1 billion of fresh equity in H111. MBRD is a medium-sized Russian bank, 96%-owned by Sistema. Servicing the business needs of Sistema remains an important part of MBRD's business. The bank is the parent of a banking group, which includes EWUB (MBRD has a 66% stake in EWUB) and DCB. On a stand-alone basis, MBRD was ranked the 25th largest bank by total assets at end-H110. The rating actions are: Moscow Bank for Reconstruction and Development -- Long-term IDR: affirmed at 'B+'; Outlook changed to Positive from Stable -- Short-term IDR: affirmed at 'B' -- Support rating: affirmed at '4' -- Individual rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'A-(rus)'; Outlook changed to Positive from Stable Dalcombank -- Long-term IDR: affirmed at 'B+'; Outlook changed to Positive from Stable -- Short-term IDR: affirmed at 'B' -- Support rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'A-(rus)'; Outlook changed to Positive from Stable GOLD STANDARD: Posts US$3.6 Million Loss in September 30 Quarter ---------------------------------------------------------------- Gold Standard Mining Corporation filed its quarterly report on Form 10-Q, reporting a net loss of US$3.55 million on US$0 revenue for the three months ended September 30, 2010, compared with net income of US$3.58 million on US$8.40 million of revenue for the same period a year ago. The Company's balance sheet at September 30, 2010, showed US$10.46 million in total assets, US$3.37 million in total liabilities, and stockholders equity of US$7.10 million. Gruber & Company, LLC, in Lake St. Louis, Mo., expressed substantial doubt about Gold Standard Mining Corporation's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has not generated any significant revenue during the period December 11, 2007, through December 31, 2009, and has funded its operations primarily through the issuance of equity. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7039 Los Angeles, Calif.-based Gold Standard Mining Corp. (OTC BB: GSTP) -- http://www.goldstandardmining.com/-- engages in exploration, development, and production of gold from alluvial and hard rock mineral deposits located in the Amur region in the far east of the Russian Federation. INTERNATIONAL INDUSTRIAL: Declared Bankrupt by Moscow Court ----------------------------------------------------------- Dow Jones Daily Bankruptcy Review, citing an Agence France-Presse, reports that a Moscow court Tuesday declared International Industrial Bank, also known as Mezhprombank, bankrupt less than two months after its operating license was suspended by the Russian Central Bank. According to Dow Jones Daily Bankruptcy Review, the central bank accused IIB of failing to report accurate account data and being unable to satisfy its creditor obligations. Dow Jones Daily Bankruptcy Review, citing RIA Novosti news agency, says the bank's temporary administrator told the Moscow arbitration court that the bank had assets of RUR62.2 billion (US$2.99 billion) and liabilities of RUB92.825 billion. The bank's "risky credit policy led to its insolvency," RIA Novosti quoted the bank's temporary administrator as telling the court, according to Dow Jones Daily Bankruptcy Review. Dow Jones Daily Bankruptcy Review relates the Interfax news agency said the presiding judge set a six-month time limit on the bank's bankruptcy proceedings, which will be overseen by Russia's Deposit Insurance Agency. Headquartered in Moscow, International Industrial Bank lends to commercial and industrial projects run by United Industrial Corporation, which is affiliated with Sergey Pugachyov, a businessman and member of the Federation Council of Russia, the upper chamber of the parliament of the Russian Federation. Mr. Pugachyov and his family own 81% of IIB. The bank's senior managers own the rest. * * * As reported by the Troubled Company Reporter-Europe on Oct. 15, 2010, Fitch Ratings revised Russia-based International Industrial Bank's Long-term foreign and local currency Issuer Default Ratings to 'D' from 'RD'. Simultaneously, Fitch downgraded the Recovery Rating assigned to IIB's senior unsecured debt to 'RR5' from 'RR4'. Fitch said the revision of the Long-term IDRs reflects the full cessation of the bank's business activity following the revocation of its banking license and entry into external administration. KUBAN-CREDIT BANK: Moody's Assigns E+ Financial Strength Rating --------------------------------------------------------------- Moody's Investors Service has assigned these global scale ratings to Kuban-Credit Bank: an E+ bank financial strength rating, and B3 long-term and Not Prime short-term local and foreign currency deposit ratings. Concurrently, Moody's Interfax Rating Agency assigned a Baa3.ru long-term National Scale Rating to the bank. Moscow-based Moody's Interfax is majority-owned by Moody's, a leading global rating agency. The outlook on the long-term global scale ratings is stable, while the NSR carries no specific outlook. Ratings Rationale According to Moody's, KCB's E+ BFSR, which translates into a Baseline Credit Assessment of B3, is constrained by (i) the bank's narrow corporate franchise and geographical concentration; (ii) a very high single-name concentration in the loan book given that the top 20 loan exposures exceed 300% of the bank's shareholder equity; (iii) the bank's very high industry concentration, with the loans to construction sector accounting for 74% of the bank's gross loans; (iv) corporate governance issues, particularly significant "key person" risk resulting from the bank's concentrated ownership; (v) potentially understated level of related party lending and (vi) low diversification of its funding base. At the same time, Moody's notes that KCB's ratings are underpinned by: (i) the bank's currently stable liquidity position as illustrated by growing customer deposits and sufficient share of liquid assets -- accounting for over 20% of the bank's total assets; (ii) its relatively firm position in its niche market, which, however, to a significant extent is based on the non- banking business and personal links of its main shareholder. At the same time, Moody's notes that KCB's ratings are underpinned by: (i) the bank's currently stable liquidity position as illustrated by growing customer deposits and sufficient share of liquid assets -- accounting for over 20% of the bank's total assets; (ii) its relatively firm position in its niche market of financing economy class residential construction projects, which, however, to a significant extent is based on the non-banking business and personal links of its main shareholder. According to Moody's, visible diversification of KCB's business from the construction industry and a material reduction of borrower concentration along with diversification of its funding base may have positive rating implications. However, any mismanagement of the bank's growth strategy -- resulting in a significant deterioration of asset quality and financial fundamentals, or loss of market franchise -- could potentially negatively affect KCB's ratings. Moody's notes that KCB's local and foreign currency deposit ratings do not factor in any probability of shareholder or systemic support in the event of a stress situation. Although support from the bank's shareholders cannot be ruled out, its extent and timeliness are uncertain. Headquartered in Krasnodar, Russia, KCB reported total assets of US$681 million, shareholders' equity of US$95.6 million and net income of US$260,000, according to its audited IFRS financial statements at year-end 2009. MOSCOW BANK: Fitch Affirms Individual Rating at 'D/E' ----------------------------------------------------- Fitch Ratings has changed the Outlooks on Moscow Bank for Reconstruction and Development's and Dalcombank's Long-term Issuer Default Ratings to Positive from Stable. At the same time, it has affirmed the Long-term IDRs of both banks at 'B+' respectively. A full list of rating actions on both banks is provided at the end of this announcement. The Outlook revisions for MBRD and DCB follow a revision of the rating Outlook on Sistema Joint Stock Financial Corp. ('BB-') to Positive from Stable. Sistema is the majority shareholder of MBRD, which in turn is the sole owner of DCB. MBRD's and DCB's IDRs reflect Fitch's view of the strong propensity of Sistema to provide support to these banks in case of need. The future direction of the bank's ratings is likely to continue to depend on Sistema's Long-term IDR and Fitch's view of the parent's propensity to support the group's banks. MBRD's Individual rating of 'D/E' reflects the bank's deteriorated asset quality, weakened profitability, concentrated balance sheet, significant level of related-party business and frequent changes in management. Fitch also continues to express concern about the low transparency of the operations of MBRD's Luxemburg-based subsidiary, East-West United Bank (which accounted for 42% of consolidated loans at end-H110), although management disclosure suggests that a majority of the subsidiary's loans are cash- backed. Fitch has been informed by the bank that the lack of transparency of EWUB's operations is due to local regulatory restrictions on disclosure of customer information. At end-H110, MBRD's reported level of loans overdue more than 90 days accounted for 9.7% of bank's stand-alone loan book, and an additional 22% of loans were restructured. Overdue loans in EWUB's portfolio were reportedly low. The capitalization of the bank continues to be supported by the shareholder: in 2009, Sistema provided RUB1.8 billion of new subordinated debt and bought out some of the bank's non-performing loans, resulting in an equity increase of RUB1.4 billion. At end- H110, MBRD's consolidated Basel I tier 1 and total capital ratios were 9.5% and 14.6% respectively, although the tier 1 ratio would have been 14.2%, after allowing for Sistema's conversion in October 2010 of RUB5.2 billion of subordinated loans into equity. In H111, Sistema plans to inject another RUB4bn of fresh equity into the bank, although the impact of this on capital ratios could be offset in light of the bank's ambitious growth plans. DCB's Individual Rating of 'E' reflects the bank's small size, weak and still deteriorating asset quality, weak capitalization and concentrated balance sheet. At end-Q310 the bank's reported NPLs accounted for 14.3% of total loans, up from 12.7% at end- 2009. Additionally 6.2% of loans were restructured. At end-Q310, the bank's Basel I tier 1 and total ratios were 7.5% and 12.6% respectively, which were moderate in view of its deteriorating asset quality. The regulatory CAR was just 11% at end-Q310, close to the minimum required 10%, indicating low loss absorption capacity. Fitch was informed that Sistema plans to support DCB's capital with RUB1 billion of fresh equity in H111. MBRD is a medium-sized Russian bank, 96%-owned by Sistema. Servicing the business needs of Sistema remains an important part of MBRD's business. The bank is the parent of a banking group, which includes EWUB (MBRD has a 66% stake in EWUB) and DCB. On a stand-alone basis, MBRD was ranked the 25th largest bank by total assets at end-H110. The rating actions are: Moscow Bank for Reconstruction and Development -- Long-term IDR: affirmed at 'B+'; Outlook changed to Positive from Stable -- Short-term IDR: affirmed at 'B' -- Support rating: affirmed at '4' -- Individual rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'A-(rus)'; Outlook changed to Positive from Stable Dalcombank -- Long-term IDR: affirmed at 'B+'; Outlook changed to Positive from Stable -- Short-term IDR: affirmed at 'B' -- Support rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'A-(rus)'; Outlook changed to Positive from Stable NORTH-WEST TELECOM: S&P Affirms Corporate Credit Rating at 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its long- term corporate credit rating on Russian telecommunications operator North-West Telecom (JSC) at 'BB-'. In addition, S&P raised its Russia national scale rating on NWT to 'ruAA' from 'ruAA-'. At the same time, the ratings were removed from CreditWatch, where they were placed with developing implications on June 21, 2010. The outlook is positive. "The CreditWatch resolution and affirmation reflect the elimination of near-term liquidity risks because the window for early repayment claims from creditors has closed," said Standard & Poor's credit analyst Alexander GriazNov. On June 19, 2010, the company's annual shareholder meeting approved NWT's reorganization for a merger into Rostelecom. In compliance with Russian legislation, all of NWT's debtholders had the legal right to claim from the company early repayment of their debt in court. S&P will withdraw the ratings on NWT when its reorganization, in the form of the merger with Rostelecom, is finalized. On completion of the transaction NWT will cease to exist as a separate legal entity. The affirmation reflects S&P's assessment of NWT's liquidity as "adequate". Specifically, S&P notes that the company recently improved its liquidity position by securing approval for loans totaling Russian ruble 5 billion, which should help the company cover the amortization payments on a syndicated loan. Furthermore, S&P think NWT's liquidity position continues to be supported by the generation of positive free operating cash flow, which S&P expects to continue in 2011 and 2012. "The positive outlook reflects S&P's view that S&P could raise the ratings on NWT if it continues to strengthen its stand-alone credit profile, in particular through a further improvement in liquidity, as well as decreased debt leverage," said Mr. GriazNov. TRANSSIBERIAN REINSURANCE: Fitch Cuts Insurer Rating to 'B+' ------------------------------------------------------------ Fitch Ratings has downgraded Transsiberian Reinsurance Corporation (Russia)'s Insurer Financial Strength rating to 'B+' from 'BB-' and National IFS rating to 'A-(rus)' from 'A+(rus). The Outlook for both ratings is Negative. The downgrade reflects Fitch's view of Transsib Re's limited financial flexibility and the shareholders' relatively opportunistic reliance on internal capital generation, which the agency believes will increase the regulatory risk for the reinsurer in meeting the tighter capital requirements that are due to be introduced for Russian insurers from 2012. The rating action also considers the challenging operating environment in the Russian reinsurance segment and the recent, relatively aggressive, restructuring of Transsib Re's reinsurance portfolio away from traditional business classes and geographies. Transsib Re's ratings continue to be supported by a healthy risk- adjusted capital position for the current rating level and the reinsurer's underwriting expertise in the domestic and CIS business. Fitch would consider Transsib Re's failure to demonstrate progress towards meeting the 2012 regulatory capital requirements or the management team's appetite to pursue an aggressive development strategy as key downgrade triggers. Fitch notes that Transsib Re's statutory capital of RUB186 million and available capital for the solvency calculation of RUB378 million are currently below the regulatory required minimum of RUB480 million and RUB624 million, respectively, that come into force from 2012. Current shareholders are due to inject funds of RUB177 million by end-H111 and expect the reinsurer to generate the remaining necessary capital internally during Q410 - 2011. Fitch has concerns about Transsib Re's limited financial flexibility due to the majority-ownership of its management team. The agency also questions shareholders' expectations of Transsib Re being able to generate the additional capital internally. Fitch believes that the operating environment remains difficult, as the Russian reinsurance segment has stagnated for the past two years while some neighboring CIS segments have introduced regulatory barriers hindering cessions to Russian reinsurers. Fitch also believes that the restructuring of the reinsurer's business portfolio could hinder internal capital generation. There has recently been a notable shift from traditional commercial insurance to motor insurance business in Transsib Re's portfolio, and a change in the geographical structure from Russian and CIS markets to emerging markets of Europe, with a specific concentration to one cedant. Transsib Re continues to achieve profitable underwriting results, which have been the main component of net profit over the past five years, but Fitch notes that the combined ratio has demonstrated a trend towards deterioration to 99.2% in 9M10 compared with 92.0% in 9M09, which does not support the shareholders' expectations of the capital strengthening through the retained earnings Partially offsetting the negative rating drivers, Fitch continues to recognize Transsib Re's capital as supportive of the reinsurer's current rating level, and the good quality of the reinsurer's underwriting expertise in the Russian and CIS business. Transsib Re was established in 1992. Shareholding control rests with management, although the shareholding structure is broad. Transsib Re has four offices in Russia and one in the Czech Republic and writes business in Russia, CIS and other emerging European and Asian markets. At 9M10, its gross assets stood at RUB1 billion and gross premiums written totaled RUB537 million. URALSVYAZINFORM OJSC: S&P Raises Corporate Credit Rating to BB- --------------------------------------------------------------- Standard & Poor's Ratings Services said that it had raised its long-term corporate credit ratings on Russian telecommunications operator Uralsvyazinform OJSC to 'BB-' from 'B+'. The ratings were removed from CreditWatch, where they were placed with developing implications on June 24, 2010. The outlook is positive. "The rating action mainly reflects an improvement in Uralsvyazinform's financial profile," said Standard & Poor's credit analyst Alexander Griaznov. "S&P has raised its assessment of Uralsvyazinform's liquidity to "adequate" from "weak", as the company has managed to decrease its reliance on short-term debt in the course of 2010," Mr. Griaznov said. "In addition, the risk of early repayment claims from creditors, which S&P previously saw as a possible near-term risk, has now been eliminated, as the window for such claims is now closed," he added. Uralsvyazinform's debt leverage has declined significantly over the past 12 months. On June 30, 2010, the company's ratio of debt to EBITDA stood at 1x, a significant improvement from 1.9x a year earlier. The company's cash flow generation profile remains robust; its ratio of funds from operations to debt was 82.4% for the 12 months ended June 30, 2010. The ratings are constrained by the company's exposure to Russia's weak capital markets; the need to control rising costs and preserve operating profitability; intense competition in the Urals region mobile market; and a track record of aggressive liquidity management. The ratings are supported by Uralsvyazinform's "fair" business profile, which reflects its dominant position in the Urals region fixed-line segment, resilient market share in mobile telephony, and rapidly growing broadband segment. The positive outlook reflects the possibility that S&P could raise the ratings if Uralsvyazinform continues to strengthen its stand- alone credit profile, particularly by further improving its liquidity. A lack of willingness to improve liquidity or an increasingly aggressive financial policy could limit potential ratings upside. S&P will withdraw the ratings on Uralsvyazinform when the company's planned reorganization in the form of a merger with Rostelecom is finalized, as Uralsvyazinform will cease to exist as a separate legal entity once the transaction closes. VOLGATELECOM OJSC: S&P Raises Corporate Credit Rating to 'BB' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its long- term corporate credit rating on Russian telecommunications operator VolgaTelecom (OJSC) to 'BB' from 'BB-'. S&P also raised its Russia national scale rating to 'ruAA' from 'ruAA-'. At the same time, the ratings were removed from CreditWatch, where they were placed with developing implications on June 21, 2010. The outlook is stable. "The rating action reflects S&P's assessment of VolgaTelecom's strengthened financial profile and, specifically, its "adequate" liquidity position," said Standard & Poor's credit analyst Alexander GriazNov. A risk of early repayment claims from creditors, which S&P previously indicated as a possible near-term risk, has been eliminated because the window for such claims is now closed. On June 21, 2010, the company's annual shareholder meeting approved VolgaTelecom's reorganization for merger into Rostelecom. In compliance with Russian legislation, all of VolgaTelecom's debtholders had the legal right to claim from the company early repayment of their debt in court. S&P will withdraw the ratings on VolgaTelecom when the reorganization, in the form of the merger with Rostelecom, is finalized. On completion of the transaction, VolgaTelecom will cease to exist as a separate legal entity. "The stable outlook reflects S&P's view that VolgaTelecom will continue its strong operating performance, generate positive free cash flow, and maintain an adequate liquidity position," said Mr. Griaznov. * Fitch Affirms 'BB' Long-Term Ratings on Russia's Penza Region --------------------------------------------------------------- Fitch Ratings has affirmed Russia's Penza Region's ratings at Long-term foreign and local currency 'BB' and Short-term foreign currency 'B'. Fitch has also affirmed the region's National Long- term rating at 'AA-(rus)'. The Outlooks for the Long-term ratings are Stable. The ratings reflect the region's low fiscal flexibility stemming from its small economy, the short-term profile of outstanding debt and mild deterioration in its operating performance in 2009. However, the ratings also factor in expected recovery of budget performance in 2010, a low debt burden and prudent budget management. Maintaining sound budgetary performance with an operating balance above 15% of operating revenue, coupled with lengthening of the debt profile, would be positive for the ratings. Deterioration in budgetary performance caused by an inability to control operating expenditure growth and a significant increase in the debt burden would lead to downward rating pressure. In 2009 the region's budget performance deteriorated due to overall economic downturn. However, the region's effective budget management resulted in the operating margin remaining sound at 8.2%. The region also recorded a RUB2.5 billion deficit before debt variation (about 8.6% of total revenue), which was covered by new borrowing. Fitch expects Penza's budget performance to improve to an almost balanced position in 2010, with an operating balance of about 13%-14% of operating revenue. The region's direct risk increased in 2009 to RUB5 billion (2008: RUB3.4 billion). However, the debt burden remained moderate with direct risk totaling 19% of current revenue at end-2009. The total debt/current balance payback ratio remained strong at about two years. Despite strong debt ratios, the region's debt has a short maturity horizon, as it will face redemption of about 90% of its debt in 2011 and 2012. Fitch expects debt to total RUB5 billion by end-2010, and to gradually decline to RUB4 billion by 2013. The overall scale of the region's economy is modest. Per capita gross regional product was 67% of the median per capita GRP of Russian regions in 2008. This small economy has led to a weak tax base and high dependence on federal transfers. That limits the region's revenue flexibility, but the stable nature of transfers underpins budget revenue proceeds in difficult economic circumstances. Penza is located in central Russian Federation. It accounted for 0.5% of the RF's GDP in 2008 and 1% of its population. =========================== U N I T E D K I N G D O M =========================== ASPEN INSURANCE: Moody's Affirms 'Ba1' Preferred Debt Ratings ------------------------------------------------------------- Moody's Investors Service announced that it had affirmed the insurance financial strength ratings of Aspen Insurance UK Limited and Aspen Insurance Limited (both A2), and the debt ratings (Baa2 senior, Ba1 preferred) of Aspen Insurance Holdings Limited. The rating outlook is stable. The rating affirmation reflects the Aspen Group's very good capitalization, conservative investment policy, and relatively low financial leverage. While recognizing Aspen's good profitability record and good business diversification, these strengths are off-set by the inherent volatility and cyclicality in many of its lines of business, the inherent uncertainty associated with expanding into new lines of business, and the challenge of improving the performance of its US insurance division's business. Aspen's very good capital adequacy continues to benefit from low gross underwriting leverage -- c.1.6x at YE09 (1.8x at YE08) -- and a high solvency margin (shareholders' equity as a % of NPW) of 180% (151%), respective figures moving to around 1.8x and 161% for YE09 if preference shares are excluded from equity. Furthermore, Aspen's balance sheet is largely unencumbered by legacy issues. Although Aspen has reduced its capital base from November 2006 to November 2010 by around US$625 million as a result of share buy- backs, with a further US$184 million expected by July 2011, this has been more than compensated for by net income. Aspen's asset quality is viewed as excellent. The Group has a conservative investment portfolio dominated by highly rated fixed income securities, the average credit quality of which remains at AA+ with a duration of 3.1 years. Non-agency structured investments are relatively modest comprising around 3% of total investments, and high risk investment assets are currently confined to the US$25 million investment in the Cartesian Iris Partnership which focuses on insurance linked securities. Other credit strengths include relatively low financial leverage at around 14%, down from around 18% at YE08 reflecting the meaningful increase in shareholders' equity and repurchase of preference shares during 2009. Less favorable is earnings coverage, although the average coverage from 2005-2009 is in the middle of the A rating category. Off-setting these strengths are the inherent volatility and cyclicality in many of Aspen's lines of business with a relatively high exposure to natural catastrophe perils although gross and net natural catastrophe exposures at the 99.6% aggregate PML are within Moody's A rating parameters. Aspen has also pursued a diversification strategy since its inception and this has led to a reduction in the proportion of property reinsurance and an increase in insurance business, with a number of new business lines added in recent years including US Professional Liability, US D&O, and Non-US Agriculture reinsurance in 2010. Whilst recognizing the benefits of diversification, Moody's believes that a credit challenge for Aspen is the inherent uncertainty associated with expanding into new lines of business, especially in a competitive environment, illustrated by the need to reposition the Financial Institutions account in 2009. With regard to profitability, Aspen's average return on equity from 2005 to 2009 is good at 8.5%, with relatively good combined ratio performance over that period. However, a number of its main lines of business are experiencing pricing pressure, and it faces the challenge of improving the performance of its US Insurance division which reported a combined ratio of 119% at 9m 2010, and 138% at YE09 albeit on a relatively small premium base. The rating agency noted these factors could lead to Aspen's ratings being upgraded: significant and consistent out-performance relative to peers, sustained gross underwriting leverage of below 2.5x together with a stable reserve position, consistently modest financial leverage (adjusted debt to capital below 20%) through the cycle, and an enhanced market position through, for example, continued development of Reinsurance and International Insurance franchises and successful build-out of other operational platforms. Conversely, these factors could put negative pressure on the ratings: under-performance relative to peers, reduction in shareholders' equity of >10% over a 12 month period due to catastrophe losses or poor operating results, and adjusted financial leverage in excess of 25%. These ratings have been affirmed with a stable outlook: * Aspen Insurance UK Limited- A2 insurance financial strength rating * Aspen Insurance Limited -- A2 insurance financial strength rating * Aspen Insurance Holdings Limited- Baa2 senior debt, Ba1 preferred Aspen, headquartered in Hamilton, Bermuda, reported at YE2009 gross premiums written of US$2,067 million and shareholders' equity of US$3,305 million. Moody's last rating action on Aspen occurred on December 21, 2005, when the Group's ratings were confirmed with a stable outlook. CRUSADERS: Davies Welcomes Rescue Package for Firm -------------------------------------------------- Anthony Woolford at Wales Online reports that Welsh dual code legend Jonathan Davies said survival should be the aim of the Crusaders next year now that they are back in Super League business. According to the report, extensive talks between three parties -- Rugby Football League chief executive Nigel Wood, Crusaders chairman Ian Roberts and administrator Peter O'Hara -- thrashed out a deal that keeps the club alive. The Crusaders, the report notes, went into administration unable to pay inherited debts from last year when they were based in Bridgend. Mr. Roberts and fellow director Geoff Moss took over at the end of 2009, with the club being moved lock, stock and barrel to Wrexham's Racecourse Ground, Wales Online relates. But, Wales Online says, as the Crusaders struggled throughout 2010 to keep up payments on the debts left over, estimated at GBP1.25 million, legal threats tipped them over the edge into administration. Now, however, the slate has been wiped clean with a new company is to be formed as Roberts and Moss buy the Crusaders off the administrators, the report notes. And although the Crusaders are likely to be docked between two and six points from the start of the new Super League campaign in February for going into administration, they will at least be taking to the field under new head coach and dual code star Iestyn Harris, Wales Online discloses. The report says that the RFL have to rubber-stamp the deal first and then dish out the points deductions, but Wood is happy that matters were settled although Mr. Roberts and Mr. Moss need to pay some "liabilities". "Both Ian and Geoff understand and actually agree with the need to deal properly with certain liabilities and, to their credit, have made provision to do so. The potential for Rugby League in North Wales is self-evident and the circumstances now exist for the club to flourish and succeed under Ian and Geoff s ownership," the report quoted Mr. Davies as saying. Crusaders are a Welsh professional rugby league club based in Wrexham, North Wales. EUROWORLD DIRECT: David Rubin Appointed as Liquidator ----------------------------------------------------- PrintWeek reports that Euroworld Direct Marketing Ltd, now known as SUF Ltd, has gone into liquidation. Stephen Katz of David Rubin and Partners was appointed liquidator on November 22, 2010. PrintWeek relates that the company faced a GBP90,000 fine for employing illegal immigrants. In March this year, Euroworld was raided by the UK Border Agency, with nine arrests made over a variety of immigration offences. According to PrintWeek, a spokesman for the UK Border Agency said that it would wait and see what happened. "It depends on the liquidator, we will probably become a creditor." Brentford-based Euroworld Direct Marketing Ltd offers print, direct mail, wide format, fulfilment services as well as finishing and warehousing. GREENLIT: Acorn Media Acquires "Foyle's War" Rights --------------------------------------------------- Andrew Laughlin at Digital Spy reports that International DVD distributor Acorn Media Group has acquired the rights to British World War II drama Foyle's War, after previous owner Greenlit went into administration. As reported in Troubled Company Reporter-Latin America on August 18, 2010, guardian.co.uk said that Greenlit has gone into administration, after being excluded from parent company Target Entertainment Group's sale to Metrodome. The report, citing MediaGuardian.co.uk, discloses the company's four staff were informed by BDO Stoy Hayward, the company appointed by Target in June to oversee the sale of the TV distributor, that the company is going into administration and they were being made redundant. According to Digital Spy, Acorn confirmed that it had reached an agreement with Greenlit's administrator BDO for rights to hit ITV detective series Foyle's War, along with other shows, such as Vexed, psychological thriller The Swap and Channel 5 drama Menace. The report relates that the deal includes all intellectual property rights for distribution of the programmes on TV, home video, DVD, download-to-own and web streaming. Greenlit is the independent producer behind Foyle's War and current BBC2 comedy drama Vexed. INTERNATIONAL POWER: S&P Keeps 'BB' Rating on Positive Watch ------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'BB' corporate credit rating on U.K.-based power project developer International Power PLC remains on CreditWatch with positive implications, where it had originally been placed on Aug. 11, 2010. "The CreditWatch placement continues to reflect S&P's view that the pending combination of IPR's power assets with those of multiutility GDF SUEZ S.A. should be beneficial for IPR's business risk profile thanks to the increased diversity of the combined group," said Standard & Poor's credit analyst Olli Rouhiainen. "However, S&P think that IPR's financial risk profile is likely to remain significant, based on current information." S&P's view of IPR's likely financial risk profile is based on its anticipation that the combined group will maintain consolidated debt to EBITDA of less than 4x. If the transaction closes as currently envisaged--with a significant proportion of IPR's debt sitting at the parent company level and with the combined group's subsidiaries in merchant markets remaining unleveraged--S&P would analyze IPR as a typical corporate entity rather than as a project developer and would focus its financial analysis on the consolidated financial statements. If the transaction goes ahead, S&P also believe that IPR could receive some uplift to its stand-alone credit profile, as it would be majority owned and financed by its more highly rated parent GDF SUEZ. In that case, a critical part of S&P's analysis would be to evaluate the economic incentives for GDF SUEZ to support IPR. The rating on IPR continues to reflect S&P's view of IPR's exposure to cash flows from speculative-grade projects at the parent company level; significant exposure to merchant risk at the project level; the significant financial risk profile of the parent company; and IPR's appetite for debt-financed acquisitions. The rating on IPR is supported by what S&P views as a diverse, geographically well-spread project portfolio, and good credit protection measures and adequate liquidity headroom at the parent level. S&P aims to review the CreditWatch placement shortly after the transaction closes, which S&P expects to happen in early 2011, subject to regulatory clearance and shareholder approval. S&P will continue to provide updates on S&P's views as more information on the potential combination emerges. S&P aims to gain more information on the financial profile of the consolidated group following transaction close, and to gain further understanding of how the group will structure its operations. Based on the outcome of its analysis, S&P could either affirm or raise the ratings on IPR. KC1 LIMITED: Palm Court Hotel Site Up for Sale ---------------------------------------------- Hanna Sharpe at Business Sale reports that a Torquay hotel development site, Palm Court Hotel, has been put onto the market following the administration of its developers. The Palm Court Hotel site was owned by KC1 Ltd. KC1 fell into administration owing GBP3.1 million to HSBC. The report notes that the site was then put onto the market, and hotel giant Travelodge has confirmed that it is interested in purchasing it. According to Business Sale, Steve Parrock, chief executive of Torbay Development Agency, said that the new owner could consider also buying neighbouring buildings to enlarge the development. Mr. Parrock said that he had already met "interested bidders" who intended to develop a hotel on the site in line with the existing planning approval. However, Ross Connock, of PricewaterhouseCoopers, who is acting as administrator to KC1, said: "We are having detailed talks with a number of parties, but it has not been sold. We are closer to completing the deal but no contracts have been exchanged," Business Sale says. KC1 Ltd, part of Newton Abbot-based property firm Riviera Group Ltd. LEAMINGTON DESSERTS: Placed Into Administration ----------------------------------------------- Will Wright and Mark Orton from KPMG Restructuring in Birmingham were appointed joint administrators to Leamington Desserts Limited on November 30, 2010, Business Credit Management reports. According to Business Credit Management, Mr. Wright said: "The Leamington factory has been loss making for some time and this has resulted in our appointment. Over the next few days we will be seeking to stabilise the business and begin seeking a going concern sale." Leamington Desserts Limited is a subsidiary of Polestar Foods Limited. Both Polestar Foods Limited and its Devon-based subsidiary, Okehampton Desserts Limited, continue to trade as normal and are unaffected by the administration. The business manufactures frozen desserts for major supermarkets and employs 166 people at its site in Leamington Spa, Warwickshire. LEASEWAY VEHICLE: Goes Into Administration ------------------------------------------ Leaseway Vehicle Rental has gone into administration leaving the future of 176 jobs in question, The Herald Scotland reports. According to The Herald Scotland, directors of the company called in experts from PwC after the company struggled to service its debts following a downturn in trading. The report relates Bruce Cartwright, joint administrator and head of business recovery services at PwC in Scotland, said: "During the past 12 months Leaseway has encountered trading difficulties that has made it difficult for the company to service its existing financial obligations. The company's directors have considered various options to deliver a restructuring solution that would provide a long-term viable business. Unfortunately, the directors have concluded that this will not be feasible and taken steps to place the company in administration. Leaseway has attracted a large number of high-quality customers that we believe may be attractive to potential purchasers." The Herald Scotland notes that the administrators have not made any of the company's employees redundant. The report relates that these include 176 staff who work in head office, sales and vehicle maintenance roles in the Glasgow area. Leaseway employs a further 165 staff in five depots south of the Border. The company, The Herald Scotland notes, may be attractive to bidders who think demand for rental vehicles will increase following expected cuts in capital spending by public and private- sector operators. However, some may be nervous about committing to a business that involves heavy capital investment, the report says. The latest accounts filed by Leaseway Vehicle Rental show the company had hire vehicles valued at GBP155 million on March 31, 2009. The company owed creditors, including Bank of Scotland, GBP158 million, The Herald Scotland discloses. Headquartered in Glasgow, Leaseway Vehicle Rental claims to be the leading player in the light commercial van rental market. LONDON & SCOTLAND: Goes Into Liquidation ---------------------------------------- BBC News reports that London & Scotland Golf Courses has gone into liquidation. "We are looking to trade the business in the short-term while we endeavour to find a buyer," BBC News quoted NNeil Dempsey, of the liquidators Begbies Traynor, as saying. BBC News says the five full-time staff at the centre have been retained. London & Scotland Golf Courses owns and operates Craibstone Golf Centre on the outskirts of Aberdeen. The 18-hole course, which has about 425 members, was built in 2000. =============== X X X X X X X X =============== * BOOK REVIEW: Health Plan - The Practical Solution to the Soaring Cost of Medical Care ------------------------------------------------------------------ Author: Alain C. Enthoven Publisher: Beard Books Softcover: 211 pages Price: US$34.95 Review by Henry Berry Since this book was first published in 1980, the problem it tackles -- the high cost of medical care in this country -- has become an even more vexing national problem. No one is more qualified to take on this subject than the author. In 1997, the governor of California appointed Mr. Enthoven to be chairman of the state's Managed Health Care Improvement Task Force. Mr. Enthoven also consults for the leading healthcare provider Kaiser Permanente, and holds leadership positions in several private and public healthcare organizations. The main causes of runaway medical costs, which were identified by Mr. Enthoven in 1980, continue today. Among the causes are the growth of medical technology, an aging population, and the proliferation of physician specialists. Lax cost controls by health maintenance organizations and government health agencies are another cause. Unlike many other critics, Mr. Enthoven does not advocate free-market practices in the healthcare field. He offers an approach that is more knowledgeable, nuanced, and practical. The author searches for the elusive goal of formulating a health plan that takes into account the altruistic desires of U.S. society to address the needs of all its members, while also accepting the reality of government regulation, a profit-driven industry, and a population with varied healthcare needs and objectives. Mr. Enthoven names his comprehensive health plan the Consumer Choice Health Plan. The Consumer Choice Health Plan is ambitious and far-reaching, especially considering the inertia of the present healthcare system and its layers upon layers of vested interests. Nonetheless, the author states that his plan is within reach and sustainable because it "function[s] with existing institutions operating in new ways." While healthcare delivery would be kept fully in the private sector, the government would have a formative role by managing the enrollment of organizations and companies in the plan on the basis of compliance with "a system of rules designed to foster socially desirable competition." Government would also help individuals take part in such a plan by offering tax credits and vouchers "based on both financial need and predicted medical need." As the book progresses, one begins to see how the Consumer Choice Health Plan synthesizes and employs in novel ways parts of the healthcare system as it presently operates. Besides the formative role of government, the plan would involve "fair economic competition, multiple choice, [and] private underwriting and management." Mr. Enthoven's Consumer Choice Health Plan is not radical. It calls for altering relationships among existing components of the health system, giving them new roles and purposes. The plan does propose one sweeping, though not radical, change, which is to "shift the basis for healthcare financing from experience-related insurance serving employee groups to community-rated financing and delivery plans open to all eligible persons in a market area." By shifting the financing of healthcare, providers and consumers are brought into close, and often direct, contact. To protect consumers from fraudulent and inferior health plans, the government would play a primary role in establishing enrollment standards and policies. The different health plans would compete among the respective consumer groups according to the main qualification that they be engaged in "socially desirable competition." Thus, the health plans that would be available in any market would operate much like branches of today's corporate health providers. The government's role, then, would primarily lie in exercising oversight and enforcement responsibilities. The result would be a field of screened health providers offering health plans in a defined community/market. The most successful providers would be those offering the best services and prices. As reasonable as Mr. Enthoven's recommendations are, he realizes that they cannot be applied immediately. Consequently, the author also offers a series of steps, some of which are options, that assist in fully implementing the plan. Among these steps are requiring employers to provide employees choices in medical plans, allowing tax credits for employers and employees for those plans offering good basic care (rather than more costly health plans), and working with influential government officials to reach the goal of the Consumer Choice Health Plan. Some of Mr. Enthoven's recommendations have been introduced to areas of the healthcare system, and have achieved demonstrable, though limited, improvements. Many of his recommendations have been embraced by legislators and policymakers as requisites for a workable national health plan. Anyone wishing to have a relevant, productive role in devising such a plan will want to take this book to heart. Alan C. Enthoven's career spans more than 40 years in the public and private sectors, where he has held many top positions. During this time, he has been chairman and director of major healthcare organizations, and he continues to work to bring positive changes to the healthcare system. ********* 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 * * *