/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/101217.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 17, 2010, Vol. 11, No. 249 Headlines B E L G I U M FORTIS BANK: Fitch Upgrades Individual Rating to 'C/D' From 'D' D E N M A R K TDC AS: Fitch Upgrades Ratings on Senior Loan to 'BBB' From 'BB' I R E L A N D EBS BUILDING: Gets Additional EUR525 Mil. Funding From Government IRISH LIFE: Chairman Gillian Bowler to Retire * IRELAND: Dail Approves MoU on EU/IMF Bail-Out Package L U X E M B O U R G BOZEL SA: Has Until April 1 to Propose Plan in U.S. M O L D O V A EVENTIS MOBILE: Bankruptcy Manager Opposes Property Complex Sale N E T H E R L A N D S MESDAG BV: Moody's Reviews Ba3 (sf) Rating on Class D Notes N O R W A Y PETROMENA ASA: Petrolia Drilling Disputes NOK245 Million Writ R U S S I A MOSKOMMERTSBANK LLC: Fitch Upgrades Issuer Default Rating to 'B-' SANTANDER CONSUMER: Fitch Cuts LT Issuer Default Rating to 'B-' * Fitch Assigns 'BB-' Rating to Russia's Rostov Region S L O V E N I A ADRIA AIRWAYS: May Go Into Receivership, Struggles to Repay Debts S P A I N SERIE AYT: Moody's Assigns Ca Rating on EUR10.5MM Series D Note S W E D E N GLOBAL GAMING: Faces Bankruptcy for Second Time U N I T E D K I N G D O M CAINS: Fights to Control Rising Debts CONNAUGHT PLC: Hull Lovell Staff to be Paid CS CONTRACT: Goes Into Administration, 21 Jobs Axed DAVIS WORLD: Appoints Begbies Traynor to Assist with Liquidation ENTERPRISE INNS: S&P Downgrades Corporate Credit Rating to 'B+' LCP PROUDREED: Fitch Affirms 'BB' Rating on Class D Notes LLOYDS BANKING: Fitch Affirms BB Ratings on Enhanced Capital Notes LOGAN CDO: Moody's Withdraws Ratings on Super Senior Swaps ROYAL BANK: FSA Vows to Publish Limited Report on Near-Collapse SHEFFIELD WEDNESDAY: Winding-Up Petition Dismissed X X X X X X X X * BOOK REVIEW: A Hundred Years of Medicine ********* ============= B E L G I U M ============= FORTIS BANK: Fitch Upgrades Individual Rating to 'C/D' From 'D' --------------------------------------------------------------- Fitch Ratings has affirmed Fortis Bank's Long-term Issuer Default Rating at 'A+', Short-term IDR at 'F1+' and Support Rating at '1'. The Outlook on the Long-term IDR is Stable. At the same time, the bank's Individual rating has been upgraded to 'C/D' from 'D'. A full list of ratings is provided at the end of this comment. Fortis Bank's Long- and Short-term IDRs and Support Rating continue to reflect potential support from its 75% shareholder, the French bank BNP Paribas (rated 'AA-'/Stable), given that Fortis Bank is well integrated with and strategically very important to its parent. Fitch considers that there is an extremely high probability that BNP Paribas would provide support to Fortis Bank in case of need. Fortis Bank's Stable Outlook reflects that of BNP Paribas. Any change in the IDR of BNP Paribas would trigger a change in that of Fortis Bank. The upgrade of the Individual rating reflects Fortis Bank's recovering, albeit low profitability, reducing risk profile and improving capital. Fortis Bank made an operating profit in H110 for the first time since the crisis as it is now a smaller, more domestically focused bank, but results were weak. Net interest income is likely to continue to benefit from the steep yield curve and higher customer spreads, although commissions should remain below pre-crisis levels. Operating expenses are expected to improve due to cost synergies. Realizing these savings is key to improving the bank's profitability and giving it more flexibility to absorb unforeseen problems. Loan impairment charges were down in H110 from the peak reached in 2009 and are likely to represent a low percentage of loans in future due to the de-risking of the bank and the high impairments booked in 2009. However, the small write-back in H110 is considered exceptional. Moreover, Fortis Bank would suffer from any potential economic slowdown. The bank's capital ratios are solid. Capital ratios have been increasing as weighted risks have been coming down given the sale of assets to BNP Paribas. The ratings actions are: Fortis Bank -- Long-term IDR affirmed at 'A+'; Stable Outlook -- Short-term IDR affirmed at 'F1+' -- Senior unsecured affirmed at 'A+' -- Subordinated affirmed at 'A' -- Support rating affirmed at '1', -- Hybrid capital instruments (ISIN BE0117584202 and BE0119806116) affirmed at 'A-' -- CASHES instruments (ISIN BE0933899800) affirmed at 'BB' -- Individual rating upgraded to 'C/D' from 'D' BNP Paribas Fortis Funding -- Short-term debt affirmed at 'F1+' -- Senior unsecured affirmed at 'A+' -- Subordinated debt affirmed at 'A' -- Subordinated debt (upper Tier 2) affirmed at 'A-' Fortis Funding LLC -- Short-term debt affirmed at 'F1+' ============= D E N M A R K ============= TDC AS: Fitch Upgrades Ratings on Senior Loan to 'BBB' From 'BB' ---------------------------------------------------------------- Fitch Ratings has upgraded TDC A/S's Long-term Issuer Default Rating to 'BBB' from 'BB'. The Outlook is Stable. The Short-term IDR has been upgraded to 'F3' from 'B' and removed from Rating Watch Positive. At the same time, Fitch has upgraded TDC's debt instruments, as detailed at the end of this release. The rating on NTC S.A.'s senior unsecured notes, will be withdrawn following repayment scheduled for December 27, 2010. These notes have been cash defeased. The rating action follows TDC's announcement that the final steps in its capital restructuring, including an IPO, have been completed. The exercise has resulted in a much simpler capital structure, with all debt financing now held at the TDC level, and a post-IPO net leverage of 2.1x. This follows the repayment of outstanding high-yield notes at the mother company NTC S.A. with available cash, DKK8.7 billion of proceeds from TDC's share buyback and DKK2.8 billion of total DKK10.7 billion pre-greenshoe received from its successful IPO. The company also confirmed its new financial policy of a maximum net leverage of 2.1x, and the terms of its future distribution policy as communicated previously. "TDC is back to being an investment grade credit, after a series of favorable events, ranging from the disposal of Sunrise to the successful share sale, have allowed it to pay down its debt," says Richard Petit, Associate Director in Fitch's European TMT team. "The lighter capital structure, combined with an operating performance that compares favorably with a number of its European telecom peers, has led to the re-alignment of TDC's ratings with the peer group." The ratings reflect the Danish incumbent's solid domestic position in all the segments of its operation, in particular its strong share of the fixed broadband market, due to its ownership of Denmark's largest cable TV operator. However, Fitch notes that over the medium-term, this position is likely to come under pressure when the regulatory decision to open access to its cable network is implemented -- expected in late 2011. The rating actions on TDC's debt instruments are: -- TDC A/S senior secured facilities: upgraded to 'BBB+' from 'BB+' -- TDC A/S senior unsecured notes: upgraded to 'BBB' from 'BB' -- NTC S.A. unsecured notes: 'BB-' to be withdrawn on 27 December 2010 ============= I R E L A N D ============= EBS BUILDING: Gets Additional EUR525 Mil. Funding From Government ----------------------------------------------------------------- Ciara O'Brien at The Irish Times reports that the Irish government has injected a further EUR525 million into EBS Building Society. According to The Irish Times, the new funding comes through special investment shares issued to Minister for Finance Brian Lenihan. The Irish Times says the shares give Mr. Lenihan control of the building society, including the composition of the board and passing of members' resolutions. The latest funding means EBS will meet the core tier 1 capital ratio of 8% by December 31, The Irish Times notes. The Irish Times relates that the institution was told by the Central Bank in March to raise EUR875 million by the end of December. However, in November it told the building society it needed to increase its capital ratio to 13.5% by the end of the year, meaning it needs to find an additional EUR438 million, The Irish Times discloses. The Central Bank on Wednesday said it has since extended that deadline to the end of February, The Irish Times states. EBS, which the government is currently looking to sell, has already received EUR100 million in funding from the State in the form of a promissory note, and a EUR250 million injection through the issuance of special investment shares, The Irish Times discloses. EBS Building Society is Ireland's largest building society. Servicing more than 400,000 members, it distributes its products through a branch and franchised agency network as well as handling direct business both over the telephone and via the Internet. EBS Building Society provides mortgage lending, savings, investments, and insurance products in Ireland. * * * As reported by the Troubled Company Reporter-Europe on December 15, 2010, Fitch Ratings downgraded the Individual Rating of EBS Building Society to 'E' from 'D/E'. IRISH LIFE: Chairman Gillian Bowler to Retire --------------------------------------------- BreakingNews.ie reports that Gillian Bowler on Wednesday announced her intention to retire as chairman and a director of Irish Life & Permanent Group Holdings plc, following the appointment of a successor in the New Year. BreakingNews. ie relates that Ms. Bowler informed the board of her decision at a meeting on Tuesday. Ms. Bowler has been Chairman of the Group since 2004, BreakingNews.ie discloses. Ms. Bowler, as cited by BreakingNews.ie, said that she believed that it was now a good time to step aside and allow someone to bring a fresh perspective to the role of chairman. The board has commenced a process to identify a successor chairman as early as possible in 2011, BreakingNews.ie notes. EBS Bid As reported by the Troubled Company Reporter-Europe on Nov. 29, 2010, Irish Independent said that IL&P's bid for EBS was thrown into disarray after it emerged that the bancassurer might have to accept state help as part of the banking bailout. Legal sources said any government help given to IL&P could be seen as state aid by the European Commission, putting the company's EBS bid in jeopardy, according to Irish Independent. Irish Independent said state aid rules mean the commission would have to approve any acquisitions by a bailed-out IL&P, even if the acquisition wasn't directly funded by the bailout. Even if the commission does agree to allow IL&P to go ahead with its EBS bid, any deal could still be subject to legal challenge from rival bidder the Cardinal consortium, Irish Independent noted. Headquartered in Dublin, Irish Life & Permanent plc -- http://www.irishlifepermanent.ie/-- is a provider of personal financial services to the Irish market. Its business segments include banking, which provides retail banking services; insurance and investment, which includes individual and group life assurance and investment contracts, pensions and annuity business written in Irish Life Assurance plc and Irish Life International, and the investment management business written in Irish Life Investment Managers Limited; general insurance, which includes property and casualty insurance carried out through its associate, Allianz- Irish Life Holdings plc, and other, which includes a number of small business units. On June 30, 2008, it acquired the rest of the 50% interest in Joint Mortgage Holdings No. 1 Limited (the parent of Springboard Mortgages Limited), resulting in Springboard Mortgages becoming a wholly owned subsidiary. On December 23, 2008, it acquired an additional 23% of Cornmarket Group Financial Services Ltd, bringing its interest to 98%. * * * As reported by the Troubled Company Reporter-Europe on Dec. 8, 2010, DBRS downgraded the Dated Subordinated Debt rating of Irish Life & Permanent plc (IL&P or the Group) to BB from BBB to reflect the increased risk of adverse action by the government. This rating action reflects DBRS's view that the risk of loss for holders of subordinated debt instruments of Irish banks has increased significantly given recent actions and various statements by the Irish Government. As reported by the Troubled Company Reporter-Europe on April 8, 2010, Fitch Ratings downgraded Irish Life & Permanent's Individual rating to 'D' from 'C'. Fitch said the downgrade reflects Fitch's concerns about ILP's profitability in the next two years, its ability to absorb increased provisioning charges in the banking business through operating profits, the standalone capital position of the bank and its large share of wholesale funding. According to Fitch, while the insurance business, Irish Life, continues to be profitable at an operating level, its profitability was not sufficient to compensate for losses in the banking business, permanent tsb, in 2009. IL&P continues to carry Moody's Investors Service's standalone Bank Financial Strength Rating of D, which maps to Ba2 on the long term rating scale. IL&P's also carries an undated subordinated debt rating of Ba3 from the rating agency. * IRELAND: Dail Approves MoU on EU/IMF Bail-Out Package ------------------------------------------------------- RTE News reports that the Dail has approved the memorandum of understanding on the EU/IMF bail-out package for Ireland. According to RTE, after a two-hour debate, the memorandum was approved by 81 votes to 75. The Fine Gael and Labour leaders both vowed to vote against the package and to seek to have it re-negotiated, RTE notes. RTE relates that on Tuesday night, the main opposition parties said they backed the bill in principle, but attitudes hardened as they studied the measure, which gives sweeping powers to the Finance Minister to intervene in the banking sector. Fine Gael leader Enda Kenny said it was not possible to consider the measure in a day and asked for the Dail to sit next Tuesday, RTE discloses. =================== L U X E M B O U R G =================== BOZEL SA: Has Until April 1 to Propose Plan in U.S. --------------------------------------------------- The Hon. Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York extended Bozel S.A.'s exclusive periods to file and solicit acceptances for the proposed plan of reorganization until April 1, 2011; and June 1, respectively. Upon expiration of the exclusive plan proposal period, and absent any extension ordered by the bankruptcy court, creditors and other parties-in-interest will have the right to file a creditor recovery plan for the Debtor. Bozel SA is a mineral mining company based in Luxembourg. Bozel S.A. sought bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-11802) on April 6, 2010, in Manhattan New York. William F. Savino, Esq., Daniel F. Brown, Esq., and Beth Ann Bivona, Esq., at Damon Morey LLP in Buffalo, N.Y., represent the Debtor in the Chapter 11 case. BDO Consulting is the financial advisor. The Debtor estimated assets and debts at US$50 million to US$100 million. ============= M O L D O V A ============= EVENTIS MOBILE: Bankruptcy Manager Opposes Property Complex Sale ---------------------------------------------------------------- Infotag reports that the Board of Directors of Eventis Mobile has decided to sell its property complex to the I-Tel Sistem for MDL40 million (US$3.3 million). According to Infotag, Veaceslav Apostol, the manager of Eventis Mobile's bankruptcy process, said the decision is illegal and hopes the court will prove that. Mr. Apostol, as cited by Infotag, said the board's decision to remove him from post was also illegal. Infotag relates Apostol has put up the aggregate property complex of Eventis Mobile for auction within the insolvency process at the initial price of MDL113.5 million (US$9.5 million) twice, but they failed due to the lack of any buyers. According to Infotag, I-Tel Sistem Director Maxim Seliunin said the company is ready to buy the Eventis Mobile operator assets for building a network and launching the mobile operator in 2011. He said the company got means for buying Eventis Mobile in credit and they are already at the account of a Moldovan bank, Infotag notes. Eventis Mobile owed about MDL2 million to 15 creditors and did not pay salaries to its employees for about one year, which prompted the court to decide to sequestrate its property and to offer it for sale in the Auction House commission shop, Infotag recounts. As of July 2010, the creditors' claims approved by the court was MDL104 million, MDL16.3 million of which are salary debts, MDL4.75 million are debts to the Budget and MDL80.26 million are debts to contractors, Infotag states. Eventis Mobile is a mobile phone company working in the GSM 900/1800 MHz standard in Moldova. ===================== N E T H E R L A N D S ===================== MESDAG BV: Moody's Reviews 'Ba3 (sf)' Rating on Class D Notes ------------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade the below referenced Classes of notes of MESDAG (Charlie) B.V. (amounts reflect initial outstandings): -- EUR355M Class A Commercial Mortgage Backed Floating Rate Notes 2007 due 2019 Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Apr 19, 2007 Definitive Rating Assigned Aaa (sf) -- EUR44.7M Class B Commercial Mortgage Backed Floating Rate Notes 2007 due 2019 Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on Nov 23, 2009 Downgraded to A1 (sf) -- EUR44.7M Class C Commercial Mortgage Backed Floating Rate Notes 2007 due 2019 Certificate, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Nov 23, 2009 Downgraded to Baa2 (sf) -- EUR39.4M Class D Commercial Mortgage Backed Floating Rate Notes 2007 due 2019 Certificate, Ba3 (sf) Placed Under Review for Possible Downgrade; previously on Nov 23, 2009 Downgraded to Ba3 (sf) Moody's does not rate the Classes E and X Notes. Rating rationale The ratings of the Classes were placed on review for possible downgrade due to the deterioration in the pool's overall collateral performance since the last review in November 2009, and in particular the payment defaults and transfer to special servicing of the TOR loan (43% of current pool balance) and Schiphol loan (2.5%) in November 2010. Additionally, there is near term exposure to refinancing risk as the Schiphol loan and the Dutch Offices I loan (7.6%) have maturity dates in December 2010 and 2011, respectively. MESDAG (Charlie) B.V. closed in April 2007 and represents the true-sale securitization of initially 9 (currently 8) mortgage loans originated by NIBC. The loans are secured by first-ranking legal mortgages over initially 149 (currently 127) commercial and residential properties located in Germany (84% of current underwriter's market value) and The Netherlands (16% of current underwriter's market value). The pool's property type composition is mainly residential (57%), office (12%), with the remainder a mixed use component of residential and office uses. Since closing, 12.2% of the initial pool repaid or prepaid. The NRW Loan (EUR34.8 million initially) was fully prepaid in October 2007. The Tommy Loan was partially prepaid during the first quarter of 2009, and again in 2010, following the disposal of properties. Furthermore, some scheduled amortization occurred on some of the loans, notably the Berlin Loan (28% of the current securitized pool). The current portfolio balance is approximately EUR433 million compared with EUR494 million initially. Moody's review will focus on the potential losses from the loans in special servicing and troubled loans as well as increased refinancing risk for the overall pool. =========== N O R W A Y =========== PETROMENA ASA: Petrolia Drilling Disputes NOK245 Million Writ ------------------------------------------------------------- Meera Bhatia at Bloomberg News reports that Petrolia Drilling ASA said it's disputing a writ to its unit Petrolia Services AS from its bankruptcy estate Petromena ASA seeking as much as NOK245 million (US$41 million). Petrolia Drilling "is surprised over the writ of summons and dismisses the reason for the claim," the company said, according to Bloomberg. Bloomberg relates that Petrolia said a maximum of NOK5 million to NOK10 million should be in dispute. As reported by the Troubled Company Reporter-Europe on Dec. 28, 2009, Petromena said the Oslo County Court on Dec. 22 decided to open bankruptcy proceedings against the company, according to Bloomberg News. PetroMENA ASA -- http://www.petromena.no/-- is a Norway-based company engaged in the ownership and operation of drilling rigs and vessels, as well as in the construction of off-shore drilling platforms and facilities for the oil industry. The Company is operational through its three wholly owned Singapore-based subsidiaries: PetroRig I Pte Ltd, PetroRig II Pte Ltd and PetroRig III Pte Ltd. The Company's rigs are designed for drilling in ultra deep waters, in such areas as the Mexican Gulf, Brazil, West and South Africa, among others. Additionally, the Company's subsidiaries are engaged in the construction of semi submersible drilling rigs at the Jurong shipyard in Singapore. As of December 31, 2008, the Company held management and operational agreements with Larsen Oil & Gas Ltd and Larsen Oil Gas AS. The Company's majority shareholder is Petrolia Drilling ASA, with 51.47% of its interests. =========== R U S S I A =========== MOSKOMMERTSBANK LLC: Fitch Upgrades Issuer Default Rating to 'B-' ----------------------------------------------------------------- Fitch Ratings has upgraded Moskommertsbank's Long-term Issuer Default Rating to 'B-' from 'CCC' and Short-term foreign currency IDR to 'B' from 'C'. The agency also affirmed MKB's Individual and Support ratings at 'E' and '5', respectively. MKB is the Russian subsidiary of Kazakhstan-based Kazkommertsbank (rated 'B- '/Stable). MKB, which is 100% owned by KKB, is a relatively small Russia- based bank ranked outside the top 100 by the size of assets and capital. Previously, MKB focused on residential mortgage lending and securitization. In 2009, its strategy shifted towards SME lending, car and consumer loans. MKB's upgrade, and the equalisation of the IDRs with those of the parent, reflect the reasonable track record of liquidity support for MKB from KKB during the crisis, MKB's quite small size relative to its parent and KKB's current intention to maintain a presence on the Russian market. The Individual Rating reflects the challenges of the new business model, weaknesses in risk management, lack of transparency of operations with related parties and high concentration risks, particularly, on the liabilities side of the balance sheet. The low quality of the loan book, of which mortgages account for 63%, affects MKB's credit profile considerably. At end-H110, NPLs broadly stabilized and reached 21% of the total loans with the highest impairment level in the corporate book. The rating actions are: -- Long-Term Foreign Currency IDR upgraded to 'B-' from 'CCC', Outlook Stable -- Short-Term Foreign Currency IDR upgraded to 'B' from 'C' -- National Long-Term Rating upgraded to 'BB-(rus)' from 'B- (rus)', Outlook Stable -- Individual Rating affirmed at 'E' -- Support Rating affirmed at '5' SANTANDER CONSUMER: Fitch Cuts LT Issuer Default Rating to 'B-' --------------------------------------------------------------- Fitch Ratings has downgraded CJSC Santander Consumer Bank's ratings, including its Long-term IDR to 'B-' from 'BBB+'. The agency has also withdrawn the ratings as the issuer has chosen to stop participating in the rating process. Therefore Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for SCB. A summary of the rating actions is presented at the end of this commentary. The downgrade follows the announcement by Russia-based Orient Express Bank that it has completed the purchase of 100% of SCB's share capital from Santander Consumer Finance (rated 'AA'/Stable). Previously, SCB's Long-term IDR of 'BBB+' was driven by the support available from SCF. SCB is a small Moscow-based bank with US$135 million of total assets. Since end-2008, SCB has effectively ceased new lending and closed its only branch and two of three outlets. Fitch notes that the previous parent's loans to SCB were entirely replaced by OEB's deposits as part of the sale. The rating actions are: -- Long-term foreign currency IDR downgraded to 'B-' from 'BBB+', Rating Watch Negative removed, Outlook Stable; withdrawn -- Short-term foreign currency IDR downgraded to 'B' from 'F2', Rating Watch Negative removed; withdrawn -- National Long-term Rating downgraded to 'BB+(rus)' from 'AAA(rus)', Rating Watch Negative removed, Outlook Stable; withdrawn -- Support Rating downgraded to '5' from '2', Rating Watch Negative removed; withdrawn * Fitch Assigns 'BB-' Rating to Russia's Rostov Region ------------------------------------------------------ Fitch Ratings has assigned Russia's Rostov Region Long-term foreign and local currency ratings of 'BB-', a Short-term foreign currency rating of 'B' and a National Long-term rating of 'A+(rus)'. The Outlooks for the Long-term ratings are Stable. The ratings reflect Rostov's diversified local economy, expected recovery of budgetary performance, low direct risk and sound liquidity position. However, the ratings also factor in the region's operating expenditure rigidity and relatively low level of capital expenditure compared with Russian peers. Upside rating pressure may result from improvement of budgetary performance with an operating margin above 10% over the medium term and containment of direct risk below 20% of current revenue. Conversely, loose fiscal management leading to deterioration in the direct risk/current balance payback ratio above two years, and increased net overall risk, above 10% of current revenue, would be negative for the ratings. Rostov's budgetary performance was satisfactory, though it was affected by lower taxation and elevated operating expenditure in 2009. The region's budgetary performance was stable in 2005-2008 with the operating margin averaging 8.1%. Operating performance is expected to rebound in 2010, due to a recovery of tax revenue. Fitch forecasts a full-year operating margin of about 7% in 2010 and 9%-10% in 2011-2012. Direct risk was negligible in 2005-2008, before increasing to a still low 3.4% of current revenue in 2009. The region's debt was more than offset by Rostov's cash reserves of RUB5.2bn at end- 2009. The projected increase of the region's direct debt up to RUB6bn in 2010 is mitigated by its sound liquidity position. The region's capex, averaging at 11.5% of total spending in 2005-2009, is below the 20% seen for national peers in this rating category. However, Fitch notes that sustained low levels of capex may lead to gradual deterioration in the region's infrastructure and constrain financial flexibility. Rostov's economy is well-diversified, supporting the broad tax base of the region. The administration expects to benefit from the rebound of the national economy, with projected GRP growth of 5%-6% in the medium term. The region is located in the south of Russia. It accounted for 1.7% of national GDP in 2008 and 3% of the population. =============== S L O V E N I A =============== ADRIA AIRWAYS: May Go Into Receivership, Struggles to Repay Debts ----------------------------------------------------------------- Boris Cerni at Bloomberg News relates that broadcaster Televizija Slovenija reported that Maks Tajnikar, Adria Airways d.d.'s chairman of the management board, said the airline may go into receivership or even file for bankruptcy as it struggles to repay debt. Bloomberg relates that Mr. Tajnikar said in an interview that the carrier has outstanding loans of EUR86 million (US$114.5 million) and the banks are unwilling to extend or approve new ones. The airline, which recorded a EUR7 million loss in the first half of 2010, according to Mr. Tajnikar, is also seeking a strategic investor or the formation of a regional alliance with other carriers in the Balkan region, Bloomberg adds. Headquartered in Brnik, Adria Airways d.d. is Slovenia's state- owned airline. ========= S P A I N ========= SERIE AYT: Moody's Assigns Ca Rating on EUR10.5MM Series D Note --------------------------------------------------------------- Moody's Investors Service has assigned definitive ratings to four series of Notes issued by Serie AyT Colaterales Global Empresas Caja Granada I under the program AyT Colaterales Global Empresas, FTA: -- EUR135.6M Series A Note, Assigned Aaa (sf) -- EUR18.4M Series B Note, Assigned B3 (sf) -- EUR10.5M Series C Note, Assigned Caa3 (sf) -- EUR10.5M Series D Note, Assigned Ca (sf) Ratings Rationale Serie AyT Colaterales Global Empresas Caja Granada I is a securitization of loans mainly granted to self-employed and small- and medium-sized enterprise by Caja Granada (NR). Caja Granada is acting as Servicer of the loans while Ahorro y Titulizacion S.G.F.T., S.A. is the Management Company ("Gestora"). The transaction closed in February 2009 and was initially not rated by Moody's. The initial notes balance issued at closing (shown above next to the assigned rating) amounted to EUR175.0 million. The outstanding notes balance as of the last payment date in September 2010 amounts to EUR126.1 million. Moody's rating analysis of the notes is based on the transaction structure after the last payment date in September 2010. The next payment date will take place in March 2011. The pool of underlying assets was, as of September 2010, composed of a portfolio of 1,127 contracts granted to obligors located in Spain. The loans were originated between 1995 and 2009, with a weighted average seasoning of 5.3 years and a weighted average remaining term of 10.1 years. Around 77% of the outstanding of the portfolio is secured by first-lien mortgage guarantees over different types of properties. Geographically, the pool is concentrated mostly in Andalusia (89%) and especially in Granada (58%). According to Moody's, this deal benefits from several credit strengths, such as a relatively low concentration in the Building and Real Estate sector for the Spanish market (around 11% in the pool according to Moody's industry -- Classification), a good seasoning (5.3 years) and a high percentage of first-lien mortgage loans (77%) that Moody's took into consideration in its portfolio analysis. However, Moody's notes that the transaction features a number of credit weaknesses, including regional concentration in Granada, a low portfolio granularity (Effective Number of Obligors = 206) and a long weighted average life (5.6 years). These characteristics were reflected in Moody's analysis and ratings, where several simulations tested the available credit enhancement and reserve fund (as of September 2010) to cover potential shortfalls in interest or principal envisioned in the transaction structure. Moody's Investors Service received and took into account a third party due diligence report on the underlying assets or financial instruments in this transaction and the due diligence report had a neutral impact on the rating. Moody's analysis focused primarily on (i) an evaluation of the underlying portfolio of loans; (ii) historical performance information and other statistical information; (iii) the credit enhancement provided by the swap spread, the cash reserve and the subordination of the notes. The resulting key assumptions of Moody's analysis for this transaction are a mean default rate of 27.7% with a coefficient of variation of 28.2% and a stochastic mean recovery rate of 65%. As mentioned in the methodology, Moody's used in combination its CDOROM model (to generate the default distribution) and ABSROM cash-flow model to determine the potential loss incurred by the notes under each loss scenario. In parallel, Moody's also considered non-modeled risks (such as counterparty risk). The ratings address the expected loss posed to investors by the legal final maturity of the notes (September 2037). In Moody's opinion, the structure allows for timely payment of interest and ultimate payment of principal on Series A, B, C and D at par on or before the rated final legal maturity date. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. The V Score for this transaction is Medium/High, which is in line with the score assigned for the Spanish SME sector and representative of the volatility and uncertainty in the Spanish SME sector. V-Scores are a relative assessment of the quality of available credit information and of the degree of dependence on various assumptions used in determining the rating. For more information, the V-Score has been assigned accordingly to the report " V Scores and Parameter Sensitivities in the EMEA Small- to-Medium Enterprise ABS Sector " published in June 2009. Moody's also ran sensitivities around key parameters for the rated notes. For instance, if the assumed default probability of 27.7% used in determining the initial rating was changed to 31.7% and the recovery rate of 65% was changed to 55%, the model-indicated rating for the Series A Notes would change from Aaa to Aa1. =========== S W E D E N =========== GLOBAL GAMING: Faces Bankruptcy for Second Time ----------------------------------------------- TorrentFreak reports that Global Gaming Factory X faces bankruptcy for the second time in just over a year. According to TorrentFreak, a pair of companies, Kennicott AB and Hercora Trading Technology, say they are collectively owed SEK1.5 million (US$220,000). The amounts, SEK906,200 and SEK567,600 respectively, were loaned to GGF in August 2008 but the companies are yet to be repaid, TorrentFreak discloses. TorrentFreak relates that in an application to the district court the companies demand that GGF "is immediately placed in bankruptcy." TorrentFreak, citing a report, says owner Hans Pandeya already has liabilities of more than SEK400,000 (US$58,800) registered with the bailiff and currently Global Gaming Factory has recorded liabilities of SEK450,000 (US$66,200). The company has filed no financial reports for 2009, TorrentFreak notes. In filings, Pandeya places much of the blame for the current position on the failure to acquire The Pirate Bay last year, TorrentFreak states. Last year, a former employee requested court action against the company for unpaid debts, TorrentFreak recounts. Global Gaming Factory X is an advertising and software company based in Sweden that relies on Internet cafes and gaming venues as its medium. =========================== U N I T E D K I N G D O M =========================== CAINS: Fights to Control Rising Debts ------------------------------------- Liverpool Echo reports that Cains was in a "fragile" state as it fought to control rising debts. The report recounts that the company collapsed into administration just two years ago with debts of GBP50 million but was bought back by its owners, brothers Sudarghara and Ajmail Dusanj. Its first two years of trading have now produced losses of GBP2.8 million and the Dusanjs acknowledge the company continues to lose money, according to Liverpool Echo. Liverpool Echo notes that accounts just filed for RC Brewery also show the brothers paid themselves a total of GBP506,000 in its first two accounting periods, which span 24-and-a-half months. RC Brewery, the initials stand for founder Robert Cain, employs 70 staff at the brewery and its six Liverpool pubs. The firm, Liverpool Echo discloses, is being kept in business by the support of its suppliers and its invoice discounting facility with Bibby Financial Services. Liverpool Echo notes that joint managing director Sudarghara acknowledged it was "still difficult" but said a combination of cutting costs and increased sales meant he believed the company "should hit breakeven point" in the current financial year, to September 30, 2011. Although describing the company's position as "fragile", Mr. Sudarghara said: "The movement is going in the right direction. It has been going, every month, in the right direction," the report says. However, Liverpool Echo relates, the firm's auditor Mazars has warned that there is a "material uncertainty" about RC Brewery's ability to continue. In the two accounting periods since administration, it recorded pre-tax losses of GBP1.87 million on sales of GBP18.8 million, which were followed by losses of GBP896,000 on a GBP24.6 million turnover, the report adds. Cains Brewery is based in Liverpool, England. CONNAUGHT PLC: Hull Lovell Staff to be Paid ------------------------------------------- BBC News reports that Hull council workers who said that they have not worked since firm Connaught Plc went into administration have been told they will be paid. BBC News relates that the contract was transferred by Hull council to Lovell Partnerships in September, after Connaught Plc's collapse. The 129 staff had feared they would not receive their December wages, as uncertainty remains over the contract, according to BBC News. However, the report relates, Lovell Partnerships has confirmed workers will receive their December pay packets. Hull council is expected to meet December 20, 2010, after the decision to award the contract was referred back to its cabinet, BBC News notes. The report discloses that Lovell's managing director Stewart Davenport said although the contract had been transferred, the Liberal Democrat-led council had still not made a final decision on which company would carry out the work formerly undertaken by Connaught. Despite this, Lovell had made a commitment to the workers and they would be paid, he added. "Lovell has been paying the former Connaught employees in Hull since September 1, 2010 and we can confirm that they will be paid on December 17. We have a good relationship with the unions and are keeping them informed of the progress of our discussions with the council so that staff are fully in the picture," BBC News quoted Mr. Davenport as saying. About Connaught plc Connaught plc -- http://www.connaught.plc.uk/-- is a United Kingdom-based company engaged in the provision of integrated asset services to the public and private sectors. The Company operates in two business segments: social housing and compliance. Social Housing segment provide social housing landlords throughout the United Kingdom with a range of planned and response maintenance services, as well as compliance and estate management. The Compliance segment provides safety, health and risk management solutions. It has information, advisory, training and servicing capabilities to provide integrated compliance solution throughout the United Kingdom. On July 22, 2009, the Company completed the acquisition of UK Fire (International) Limited and Igrox Limited. On September 15, 2008, the Company completed the acquisition of Lowe Group Holdings Ltd. On November 26, 2008, the Company completed the acquisition of certain assets of Predator Pest Control Plc. CS CONTRACT: Goes Into Administration, 21 Jobs Axed --------------------------------------------------- CS Contract Furniture went into administration causing 21 people to lose their jobs, Business Credit Management reports. However, according to Business Credit Management, Newport-based Classic Furniture Ltd has taken over the business assets of the firm, saving 46 jobs in the process. Business Credit Management notes that the business will continue to operate from the same site, but under a different name and full details of the reorganization are yet to be confirmed. CS Contract Furniture was a design-led manufacturer that supplied contract furniture to the hotel and leisure market. DAVIS WORLD: Appoints Begbies Traynor to Assist with Liquidation ---------------------------------------------------------------- Davis World Travel on Wednesday ceased to trade and the directors of the company have appointed Begbies Traynor to assist them in the formalities of placing the business into Liquidation. Antony Fanshawe of the Southampton office of Begbies Traynor has announced that the company officially ceased trading on Wednesday, with the loss of 20 jobs at its four outlets in Lee-on-Solent, Gosport, Fareham and Portchester and its corporate travel centre also in Fareham. Formed in 1957, Hampshire-based Davis World Travel had a turnover of around GBP5 to GBP6 million generated through bookings for traditional package holidays as well as city breaks and cruises. Mr. Fanshawe said: "Despite its long-standing pedigree, this company has been a victim of a sea change in the way we book holidays. Add to this the events of the last year, the recession, volcanic ash, airline strikes and the impending threat of increased air taxes and the result has been devastating for this business. The directors decided they had no option but to place it into liquidation. "This is another business which has fallen prey to global events since the beginning of the recession. As well as the ramifications this Liquidation has for holidaymakers, we have also to remember that 20 people have lost their livelihoods -- it's always sad to see job losses but it's especially difficult at this time of year." ENTERPRISE INNS: S&P Downgrades Corporate Credit Rating to 'B+' --------------------------------------------------------------- Standard & Poor's Rating Services lowered its long-term corporate credit rating on U.K. tenanted public house operator Enterprise Inns PLC to 'B+' from 'BB-'. At the same time, the senior secured debt rating on the company's five public bond issues was lowered to 'BB' from 'BB+'. The recovery rating of '1' on these bond issues is unchanged, reflecting S&P's expectation of very high (90%-100%) recovery for senior secured lenders in the event of a payment default. "The downgrades reflect ETI's higher solo and consolidated adjusted leverage in the year to Sept. 30, 2010, and S&P's view that, despite ongoing disposal-funded debt repayments, ETI's credit metrics will remain above levels that S&P considers commensurate with the former ratings for some time," said Standard & Poor's credit analyst Philip Temme. "It also reflects ETI's tight headroom under its banking covenants, reliance on ongoing disposal proceeds to meet debt amortizations, the threat of a future dividend lock-up at its Unique Pub Finance Co. PLC securitization materially reducing solo earnings, as well as rising lease liabilities as a result of sale-and-leasebacks." Lease-adjusted EBITDA fell 9.0% in the year to Sept. 30, 2010, and adjusted margins fell to 53.7% from 54.7% over the same period. There are some signs of operating stabilization, particularly in southern England and in the 89% of ETI's estate let on long-term substantive agreements, where the like-for-like rate of decline in average net income per pub decelerated to 2% in financial 2010. Encouragingly, licensee support costs fell 29% to GBP15 million in financial 2010. However, continuing weak performance in the tail of ETI's estate (that is, in the least profitable 10% or so of ETI's pub portfolio) dragged overall operating earnings down. This, together with a 2% fall in the value of the estate in financial 2010 (on top of the 7% fall in financial 2009) and the crystallization of loss-making interest rate swaps pushed the group (ETI and Unique) into a loss before tax. S&P anticipates that conditions will remain challenging in 2011, with rising value-added tax and beer duties, lower government spending, and higher personal taxes likely to feed through into weaker consumer spending, lower beer volumes, continuing downward pressure on rents, and possibly further negative valuation adjustments. Disposals will further reduce EBITDA. ETI repaid GBP216 million of bank debt in financial 2010 and reduced balances owing on its Unique bonds by GBP75 million. Nevertheless, adjusted group net debt to EBITDA rose to 8.4x on Sept. 30, 2010, from 8.1x a year earlier, and net debt to EBIT for the subgroup (excluding the Unique securitization, but including Unique dividends) rose to nearly 6.4x, above levels S&P considers commensurate with the former ratings. In S&P's view, ETI's weaker credit metrics could persist for some time despite ongoing debt repayments from disposals and signs of operating stabilization in the bulk of the estate. S&P views ongoing sale-and-leasebacks as at best neutral to ETI's lease- adjusted credit metrics. Any shortfalls to anticipated disposal proceeds could adversely affect the company's ability to finance debt amortizations, Unique prepayments, and covenant compliance. S&P also see a risk of further pressure on asset valuations. Limited headroom under the Unique dividend lock-up threshold could have implications for ETI's future covenant compliance under its bank facilities if trading performance and disposal proceeds were lower than the company forecasts. S&P see limited room to resume dividend payments before credit metrics have been brought sustainably lower. S&P could lower the ratings if liquidity were to weaken, if net debt to EBIT (excluding Unique) were to exceed 6.5x, if lease- adjusted group debt to EBITDA were to exceed 8.5x for more than six months, or if solo EBITDA interest coverage were to drop to less than 2.5x. In S&P's opinion, rating upside is currently minimal. LCP PROUDREED: Fitch Affirms 'BBsf' Rating on Class D Notes ----------------------------------------------------------- Fitch Ratings has affirmed LCP Proudreed PLC's commercial mortgage-backed floating rate notes, due 2016: -- GBP240.2m class A (XS0233008936) affirmed at 'AAAsf'; Outlook Stable -- GBP32.2m class B (XS0233010163) affirmed at 'AAsf'; Outlook Stable -- GBP36.8m class C (XS0233010676) affirmed at 'BBBsf'; Outlook Stable -- GBP9.2m class D (XS0233011054) affirmed at 'BBsf'; Outlook Stable The affirmation reflects the stable performance of the pools collateral income over the past 12 months. The LCP and Proudreed loans continue to perform soundly from an income perspective, with both loans generating diversified, strong and long dated income. At present both loans maintain high interest coverage ratios, in part owing to the low interest rate environment. The stability of performance, combined with the loan maturities in 2014, means the risk of term default remains low and that the bonds are somewhat less exposed to the current difficult conditions in the commercial property market than other CMBS. Updated valuations on the LCP loan in March 2010 resulted in a market value increase of 1.2% from the previous valuation at closing in 2005. This slight increase in value suggests that the collateral had benefited from some capital value increase ahead of the recent value declines. The current reported loan to value ratio is 69.2% compared with a Fitch LTV of 91%. The Proudreed loan has not been revalued since closing. LLOYDS BANKING: Fitch Affirms BB Ratings on Enhanced Capital Notes ------------------------------------------------------------------ Fitch Ratings has affirmed the Long- and Short-term Issuer Default Ratings of Lloyds Banking Group, Lloyds TSB Bank, HBOS and Bank of Scotland at 'AA-' and 'F1+' respectively. The Outlook on the Long-term IDRs is Stable. The Individual ratings of 'C' and Support Floor Ratings of 'AA-' at Lloyds, Lloyds TSB and BoS have been affirmed. The Support ratings of '1' have been affirmed at Lloyds, Lloyds TSB, HBOS and BoS. Certain hybrid (upper tier 2 and tier 1) securities have been upgraded and removed from Rating Watch Evolving. For a full list of ratings, please refer to the end of this rating action comment. Asset covered securities are unaffected by these actions. The IDRs of Lloyds and its banking subsidiaries are at their Support Rating Floor, reflecting large capital injections from the UK government associated with Lloyds' acquisition of HBOS and the high level of support that Fitch believes is still available to the group as it recovers. However, there is a growing desire in the UK and internationally to reduce implicit state support for large banks and to force future bail-out costs onto shareholders and creditors rather than taxpayers. In the UK Banking Act 2009, the UK has specific bank resolution legislation. However, it would still be difficult to intervene in a large bank such as Lloyds over a short timeframe without triggering broader panic. The UK authorities are seeking to address this, for example via their "living wills" pilot. Extremely strong retail and commercial banking franchises in the UK contribute to healthy pre-impairment operating profitability. Significant sums of capital raised from the markets in late 2009 and improving prospects underpin Lloyds' 'C' Individual Rating. Lloyds' improving prospects stem from its rapid integration of HBOS, steady reduction of risks in credit and funding, successful capital and term debt-raising and positive trends in profitability. The group's forecasted return to an operating profit for 2010 will be based on a slower-than-expected increase in impaired wholesale loans and a recovery in interest margins. By 2011, Lloyds expects cost savings from the acquisition of HBOS of GBP2bn each year. Lloyds holds more retail deposits than any other UK banking group, but has relied heavily on central bank and guaranteed funding schemes. Through asset disposals and run-offs, it is reducing wholesale funding requirements and plans to cease using central bank facilities by end-2012. By using these schemes, it has lengthened maturities to a satisfactory extent. Wholesale debt issuance has been robust in 2010. As protection against strained funding markets, Lloyds holds large volumes (GBP84bn) of liquid assets. Asset quality in Lloyds TSB and the prime mortgage book of BOS is mainly satisfactory but exposure to the commercial real estate market in the UK and Ireland remains a risk. At end-June 2010, a high 10% of loans were impaired, covered 45% by loan impairment allowances. Regulatory capitalization is solid, but Fitch core capital is weighed down by significant deferred tax assets and insurance company deductions. Capitalization ought to strengthen over the medium term through retained earnings and the de-leveraging process. The UK authorities hold a 40.6% stake in the group. Lloyds' strong domestic UK franchises were boosted by acquiring HBOS. As part of state aid remedies, Lloyds is implementing European Commission requirements to make some disposals and not to pay dividends or make discretionary payments on hybrid capital securities issued by banking subsidiaries. Franchises, pricing power, economies of scale and savings from the acquisition should stay broadly intact, but Lloyds will also reduce assets and costs. However, there is a risk that the Independent Commission on Banking could seek meaningful disposals. Fitch has upgraded all tier 1 and upper tier 2 subordinated debt securities of HBOS and BoS which were on RWE or Rating Watch Negative pending possible non-payment of coupons. This action reflects payment of coupons by these securities during 2010 and is in accordance with Fitch's standard notching criteria for hybrid securities. The ratings of Lloyds and its subsidiaries are: Lloyds Banking Group -- Long-term IDR affirmed at 'AA-'; Stable Outlook -- Short-term IDR affirmed at 'F1+' -- Individual Rating affirmed at 'C' -- Support Rating affirmed at '1' -- Support Rating Floor affirmed at 'AA-' -- Senior unsecured debt affirmed at 'AA-' -- Lower tier 2 affirmed at 'A+' -- Lloyds TSB Bank plc -- Long-term IDR affirmed at 'AA-'; Stable Outlook -- Short-term IDR affirmed at 'F1+' -- Individual Rating affirmed at 'C' -- Support Rating affirmed at '1' -- Support Rating Floor affirmed at 'AA-' -- Senior unsecured debt affirmed at 'AA-' -- Commercial paper affirmed at 'F1+' -- Market linked securities affirmed at 'AA-emr' -- Lower tier 2 affirmed at 'A+' -- Guaranteed senior Long-term debt affirmed at 'AAA' -- Guaranteed senior short-term debt affirmed at 'F1+' HBOS plc -- Long-term IDR affirmed at 'AA-'; Stable Outlook -- Short-term IDR affirmed at 'F1+' -- Support Rating affirmed at '1' -- Senior unsecured debt affirmed at 'AA-' -- Lower tier 2 debt affirmed at 'A+' Bank of Scotland plc -- Long-term IDR affirmed at 'AA-'; Stable Outlook -- Short-term IDR affirmed at 'F1+' -- Individual rating affirmed at 'C' -- Support Rating affirmed at '1' -- Support Rating Floor affirmed at 'AA-' -- Senior unsecured debt affirmed at 'AA-' -- Commercial paper affirmed at 'F1+' -- Lower tier 2 affirmed at 'A+' -- Guaranteed senior Long-term (GBP) debt affirmed at 'AAA' -- Guaranteed senior short-term (GBP) debt affirmed at 'F1+' -- Guaranteed senior Long-term (AUD) debt affirmed at 'AA+' -- Guaranteed senior short-term (AUD) debt affirmed at 'F1+' Subordinated lower tier 2 enhanced capital notes, upper tier 2 and tier 1 securities at Lloyds and its subsidiaries are as below. In accordance with European Commission state aid remedies certain securities, rated at 'CC' or 'CCC', are not performing. Fitch does not rate all capital notes issued by Lloyds and its subsidiaries. Lloyds Banking Group -- Lower tier 2 dated enhanced capital notes affirmed at 'BB' -- Upper tier 2 undated enhanced capital notes affirmed at 'BB' Lloyds TSB Bank Tier 1 -- XS0107222258 affirmed at 'CC' -- XS0107228024 affirmed at 'CC' -- XS0408620135 affirmed at 'CC' -- XS0408623311 affirmed at 'CC' -- XS0408620721 affirmed at 'CC' -- XS0156923913 affirmed at 'BB+' -- US539473AE82 affirmed at 'BB+' -- XS0474660676 affirmed at 'BB+' Upper Tier 2 -- XS0099507534 affirmed at 'CCC' -- XS0079927850 affirmed at 'CCC' -- XS0169667119 affirmed at 'CCC' Bank of Scotland plc Tier 1 -- XS0125681345 upgraded to 'BB+ from 'B'; off RWE -- XS0125686229 upgraded to 'BB+ from 'B'; off RWE -- XS0109227552 upgraded to 'BB+ from 'B'; off RWE -- XS0109138536 upgraded to 'BB+ from 'B'; off RWE -- XS0109227719 upgraded to 'BB+ from 'B'; off RWE -- XS0109139344 upgraded to 'BB+ from 'B'; off RWE -- USG43648AA57 upgraded to 'BB+ from 'B'; off RWE -- US40411CAA09 upgraded to 'BB+ from 'B'; off RWE -- GB0058322420 upgraded to 'BB+ from 'B'; off RWE -- GB0058327924 upgraded to 'BB+ from 'B'; off RWE Upper Tier 2 -- XS0063730203 affirmed at 'CCC' -- XS0083932144 affirmed at 'CCC' -- XS0059171230 affirmed at 'CCC' -- XS0046690961 affirmed at 'CCC' -- XS0111627112 upgraded to 'BB+ from 'B'; off RWN -- XS0111599311 upgraded to 'BB+ from 'B'; off RWN HBOS plc Upper Tier 2 -- US4041A3AF96 affirmed at 'CCC' -- US4041A2AG96 affirmed at 'CCC' -- XS0205326290 affirmed at 'CCC' -- XS0188201619 affirmed at 'CCC' -- XS0188201536 affirmed at 'CCC' -- XS0177955381 affirmed at 'CCC' -- XS0138988042 upgraded to 'BB+ from 'B'; off RWE -- XS0158313758 upgraded to 'BB+ from 'B'; off RWE -- XS0166717388 upgraded to 'BB+ from 'B'; off RWE LOGAN CDO: Moody's Withdraws Ratings on Super Senior Swaps ---------------------------------------------------------- Moody's Investors Service has withdrawn the ratings of the super senior swaps entered into by Royal Bank of Canada in relation to Logan CDO II and Logan CDO III. The swaps affected by the rating actions are: Issuer: Logan CDO II Limited -- US$1350M Super Senior Swap Notes, Withdrawn (sf); previously on Jun 14, 2010 Downgraded to Caa3 (sf) Issuer: Royal Bank of Canada, London Branch - Logan CDO III Tranche SS -- US$1275M Royal Bk of Canada London Logan CDO III Notes, Withdrawn (sf); previously on Apr 23, 2009 Downgraded to Ca (sf) Ratings Rationale Moody's Investors Service has withdrawn the credit rating for its own business reasons. ROYAL BANK: FSA Vows to Publish Limited Report on Near-Collapse --------------------------------------------------------------- BBC News reports that the Financial Services Authority has pledged to publish a limited report on its findings of what went wrong at Royal Bank of Scotland. BBC relates that FSA chairman Lord Turner said RBS had "made it plain" that it did not wish to "provide consent". According to BBC, RBS said it would "engage constructively" to help publication of the limited report, due in March. BBC relates that in an open letter to Treasury Committee chairman Andrew Tyrie, Lord Turner said RBS's stance had been "extremely unsatisfactory". The FSA was now moving to produce a summary version, but again that it still needed the bank's consent to publish even that, BBC notes. RBS, as cited by BBC, said it would agree to this "when the FSA has determined the confidential material it wishes to release publicly". FSA ruled on December 2 that RBS had made bad decisions ahead of a government bail-out in 2008, but cleared it of any wrongdoing, BBC discloses. The financial regulator has been widely criticized for not producing a full report of its findings, but Lord Turner said on Wednesday that RBS had refused to give it permission to release the full documentation of its investigation, BBC notes. The FSA investigation followed the near-collapse of RBS, which was saved only after the government stepped in with a rescue package that has left the taxpayer owning 84% of the bank, BBC recounts. It accused RBS executives of poor judgment in connection with the acquisition of Dutch bank ABN Amro, which left the UK bank severely undercapitalized going into the 2008 financial crisis, according to BBC. About RBS The Royal Bank of Scotland Group plc (NYSE:RBS) -- http://www.rbs.com/-- is a holding company of The Royal Bank of Scotland plc (Royal Bank) and National Westminster Bank Plc (NatWest), which are United Kingdom-based clearing banks. The company's activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On October 17, 2007, RFS Holdings B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V. (ABN AMRO). In July 2008, the company disposed of its entire interest in Global Voice Group Ltd. SHEFFIELD WEDNESDAY: Winding-Up Petition Dismissed -------------------------------------------------- The Independent reports that a winding-up petition against Sheffield Wednesday was dismissed at the High Court on Wednesday after the club paid their tax debts in full. According to The Independent, the club has been saved from possible administration after the GBP9 million takeover by Milan Mandaric. The former Portsmouth and Leicester owner settled the club's outstanding GBP1.1 million debt to Her Majesty's Revenue and Customs, The Independent relates. About Sheffield Wednesday Sheffield Wednesday Football Club is a football club based in Sheffield, South Yorkshire, England, who will compete in the Football League One in the 2010/11 season, in England. Sheffield Wednesday is one of the oldest professional clubs in the world and the third oldest in the English league. =============== X X X X X X X X =============== * BOOK REVIEW: A Hundred Years of Medicine ------------------------------------------ Authors: C. D. Haagensen and Wyndham E. B. Lloyd Publisher: Beard Books Softcover: 460 pages List Price: US$34.95 Review by Henry Berry A Hundred Years of Medicine is presented in four parts. Part I discusses the historical background of modern medicine, which is considered to have begun in England around the middle of the 1700s. About half of the chapters in Part II on the history of infectious disease remain, for the most part, as Lloyd wrote them. The other half of Lloyd's chapters in Part II and all of Part III, "Surgery During the Last Hundred Years," and Part IV, "New Social Aspects of Medicine," have been entirely rewritten by Haagensen. Haagensen's extensive 2000 update of Lloyd's original 1943 work is in keeping with that author's original intention that his "historical essay may prove to be of value not only to the layman [its primary audience] . . . but also to those medical practitioners and students who have not found time for any specialized study of the history of medicine." This book is not presumed nor intended to be comprehensive. Lloyd remarks in the preface to the original edition that his intent is to present the subject matter in a manner that is not "too technical [for] the non-medical reader." However, A Hundred Years of Medicine does provide a thorough discussion of medical issues, including advances in surgery during this time, that the reader is certain to find fascinating. Part I, a general history of medicine titled "Medicine Up to a Hundred Years Ago," demonstrates the progress that has been made in the medical field, including the contributions of its primary professionals (doctors) and institutions (hospitals). Hospitals, which became prevalent in the eighteenth century, were not only centers for the treatment of medical problems, but also served as places for conducting scientific and research studies that would further the field of medicine. Part I also contains a broad historical section that sets the context for the advances in understanding and treatment of disease and the major improvements in surgical procedures during the nineteenth and early twentieth centuries. In the second and third parts, on diseases and surgery respectively, the reader learns that "important medical advances are not made in a single day but are generally the result of a laborious series of steps made by a number of different workers over long periods of years." It is here that the book moves from a historical treatise to a discussion of particular medical conditions and their treatments. Lloyd and Haagensen illuminate the developments in chronological order so the reader can appreciate the challenges, breakthroughs, and notable junctures in medical and surgical achievements. The authors also follow, however, parallel developments in other areas of medicine that, taken together, portray the forward movement of the entire medical field. In line with this approach, the general subject of disease in Part II is delineated into chapters on the three main areas of developments of germ theory: ineffective organisms, germs outside the body, and germs inside the body. Also found in this part are separate chapters on the introduction of chemotherapy; the campaigns to combat tuberculosis, diabetes, and anemia; and the role of vitamins in preventive medicine. The nineteenth century was notable for the large strides made in the recognition, diagnosis, and treatment of disease. At the core of this advancement was the discovery of the animal cell. This, in turn, led to the conception of the living body as a vast organization consisting of millions of tiny individual cells. This view, which came to be known as Cell Theory, quickly spread throughout the medical field because it answered centuries-old medical mysteries and gave doctors scientifically-based guidance for identifying and treating diseases. Eventually it led to developments in disease prevention and public sanitation for individuals and governments. First posited little more than one hundred years ago, Cell Theory remains the basic principal of today's medical field by which doctors are educated and trained and diseases are treated. In recent decades, Cell Theory has led to remarkable progress in the treatment of cancer and one day may result in a cure for it, as tuberculosis and polio were cured in earlier times. The authors similarly cover the historical turning point in the field of surgery. Surgery is considered the "opening of the great cavities of the body, the abdomen and chest . . . to operate upon the viscera." Before the early 1800s, medical treatment had been limited to dealing with wounds and diseases on the "surface of the body and in the extremities." There were no doctors called surgeons as such. But in 1809 in his home in Danville, Kentucky, where he had begun his practice in 1795, thirty-eight-year old Ephraim McDowell removed a twenty-two and a half-pound ovarian tumor from a woman in what was the first surgery lasting twenty- five minutes without anesthesia. It was seven years before McDowell performed another ovariotomy, and not until the 1820s before other doctors performed the operation. With the introduction of anesthesia in the early 1840s, surgery quickly moved into new areas and developed rapidly. With such engaging, sometimes dramatic material and portrayals of the pioneers of medicine, A Hundred Years of Medicine offers a readable and memorable history of medicine. ********* 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, Julie Anne G. Lopez, 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 * * *