/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/101229.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, December 29, 2010, Vol. 11, No. 260 Headlines A U S T R I A KOMMUNALKREDIT AUSTRIA: Fitch Upgrades Individual Rating to 'D' B U L G A R I A UNITED BULGARIAN: Fitch Puts 'BB+' Long-Term IDR on Negative Watch D E N M A R K SKYKON AS: Files for Insolvency After Restructuring Talks Failed G E R M A N Y DUREVE LIMITED: Fitch Assigns 'BB-sf' Rating on Class C-1 Notes G R E E C E DRYSHIPS INC: Inks US$770 Million Tanker Agreement DRYSHIPS INC: Board Approves Share Purchase Program I R E L A N D ALLIED IRISH: Government Gets Court OK to Inject EUR3.7 Billion IVORY CDO: S&P Downgrades Rating on Class E Notes to 'CCC (sf)' MCKILLEN COMPANIES: Supreme Court Reserves Judgment on Nama Case OCELOT CDO: S&P Affirms 'B- (sf)' Rating on Class D Notes TITAN EUROPE: Fitch Downgrades Rating on Class C Notes to 'CCCsf' ZOE GROUP: Paid EUR1.4MM to Secured Creditors During Receivership I T A L Y SEAT PAGINEGIALLE: S&P Downgrades Corporate Credit Rating to 'B-' STT HOLDING: S&P Downgrades Long-Term Issuer Credit Rating to 'BB' K A Z A K H S T A N DBK LEASING: Moody's Assigns (P)'Ba3' Rating to Domestic Bonds HALYK SAVINGS: S&P Gives Stable Outlook; Affirms 'B+' Rating * S&P Raises Ratings on Various Kazakh Government-Related Entities L U X E M B O U R G DEUTSCHE BANK: S&P Assigns 'BB+ (sf)' Rating to Class A4 Notes LOGWIN AG: S&P Affirms 'B' Long-Term Corporate Credit Rating ORANGE SA: Mobistar Conditionally Waives EUR30 Million Debt N E T H E R L A N D S CANDIDE FINANCING: Moody's Reviews Ba3 (sf)-Rated EUR5MM Notes HOLLAND MORTGAGE: Moody's Reviews Ba2 (sf)-Rated EUR18MM Notes LANCELOT 2006: Fitch Downgrades Rating on Class E Notes to 'Bsf' LYONDELL CHEMICAL: Says Interplastic Refuses to Pay US$2 Million PANGAEA ABS: S&P Affirms Rating on Class D Notes at 'B (sf)' P O R T U G A L * Moody's Reviews Ratings on 25 Portuguese SF Transactions R O M A N I A BANCA ROMANEASCA: Fitch Puts 'BB+' Long-Term IDR on Negative Watch R U S S I A ENERGOGARANT JSIC: S&P Assigns 'BB-' Counterparty Credit Rating NOVIKOMBANK JSCB: Moody's Assigns B2 Rating to Senior Unsec. Debt TRANSOIL LLC: Moody's Assigns 'Ba3' Corporate Family Rating TRANSSIBERIAN RE: Fitch Withdraws 'B+' Insurer Strength Rating TRANSSIBERIAN RE: AM Best Upgrades Financial Strength Rating to B VNESHPROMBANK OOO: Moody's Assigns 'B2' Long-Term Deposit Ratings * S&P Affirms 'BB-' Issuer Credit Rating to Russian City of Ufa * S&P Affirms 'B' Issuer Rating on Russia's Novgorod Oblast S P A I N AYT COLATERALES: Fitch Assigns 'BBsf' Rating to Class B Notes S W E D E N OCTAPHARMA NORDIC: Moody's Cuts Long-Term Issuer Rating to 'Ba1' S W I T Z E R L A N D UBS AG: Moody's Downgrades Rating on EUR14 Million Notes to 'B2' T U R K E Y ALBARAKA TURK: Fitch Downgrades Issuer Default Rating to 'B+' U K R A I N E PROMINVESTBANK JSC: Moody's Upgrades Local Deposit Rating to 'Ba3' U N I T E D K I N G D O M 1ST FOR FENCING: Goes Into Provisional Liquidation BELLACHAT TRANCHE: S&P Assigns 'BB+' Rating to EUR200 Mil. Swap CHAMBER OF COMMERCE: Concludes Company Voluntary Arrangement CHRISTOPHER GADD: Owner to Launch Legal Action v. SRA Over Closure DEXION COMMODITIES: To Put Forward Winding-Up Proposals IA GLOBAL: Closes Acquisition of PowerDial Systems and Services KENSINGTON MORTGAGE: Fitch Affirms 'CCsf' Rating on Class B2 Notes KIDDERMINSTER HARRIERS: Chris Swan Withdraws Rescue Bid LANDMARK 1: Fitch Affirms Rating on Class D Notes at 'Bsf' MONEY PARTNERS: Fitch Affirms 'CCCsf' Ratings on Three Tranches PUNCH TAVERNS: Bondholder Group Selects Rothschild as Adviser RADICLE PROJECTS: Places Australian Unit Into Administration SHIELD FINANCE: S&P Assigns 'B+' Rating to US$324 Mil. Senior Loan X X X X X X X X * Moody's Reviews Rating s on 53 Tranches from 14 European CLOs ********* ============= A U S T R I A ============= KOMMUNALKREDIT AUSTRIA: Fitch Upgrades Individual Rating to 'D' --------------------------------------------------------------- Fitch Ratings has affirmed Austria-based Kommunalkredit Austria AG's Long-term Issuer Default Rating at 'A' with a Stable Outlook. Simultaneously, the agency has upgraded KA's Individual Rating to 'D' from 'E'. At the same time, the agency has affirmed KA Finanz AG's Long-term IDR at 'A+' with Stable Outlook. The 'A' rating of KF's subordinated (lower tier 2) bonds has been placed on Rating Watch Negative pending European Commission approval of KF's restructuring plan, expected in H111. A full list of ratings for both KA and KF is provided at the end of this release. KA and KF are the result of a demerger of former Kommunalkredit Austria (KA Old) in November 2009. KA Old, a wholesale-funded public sector lender, was acquired by the Republic of Austria (rated 'AAA'/Stable) in November 2008 following severe funding and liquidity difficulties. KF, the legal successor of KA Old, holds KA Old's non-core assets and will be wound down over time. KA holds KA Old's core public sector assets and continues to write new business, predominately in Austria and neighboring countries. At end-Q310, both banks were 99.78% owned by the Republic of Austria. KA's and KF's ratings, apart from KA's Individual Rating, are based on Fitch's view that due to the banks' close affiliation with the Austrian government, there is an extremely high likelihood of ongoing support from the Austrian state. KA's (but not KF's) ratings are furthermore underpinned by KA's importance as a municipal lender and a public service provider on behalf of the Austrian state. The one-notch differential between KA's and KF's Long-term IDR reflects Fitch's belief that KF will remain government-owned until it has been wound down (unlike KA). The necessary EC ruling has not been finalized yet but considering that KF is a non-competing entity in run-off mode, Fitch does not anticipate the ruling (expected in H111) to require the state to sell off KF in the short to medium term. However, should the ruling impose such or similar conditions, Fitch would take appropriate negative rating action. KA's restructuring plan foresees a privatization of the bank in 2012 or 2013. The Stable Outlook on KA's Long-term IDR indicates that Fitch does not expect a privatization in the short term. The agency will review the Outlook closer to an actual privatization date. If a potential buyer is rated lower than 'A+', this would likely have a negative impact on KA's Long-term IDR. The upgrade of KA's Individual Rating to 'D' takes into account the bank's progress in implementing its revised business model. However, it also reflects Fitch's view that KA will be challenged to maintain an adequate funding profile once the Austrian state starts privatizing KA. The RWN on KF's subordinated (lower tier 2) bonds reflects the potential risk that in its restructuring plan approval, the EC, in the context of a "burden sharing" concept, could require subordinated debt investors to carry losses. While Fitch (and KF's management) views the possibility of this happening as remote, should the EC decide to transfer losses onto subordinated debt holders, this would result in a multiple-notch downgrade of KF's subordinated bonds. The RWN will be resolved once the EC ruling has been made public. KA is predominately exposed to credit and funding/liquidity risks. Credit risk in its EUR17.6 billion balance sheet (at end-H110) is predominately to Austrian and other Western European public sector entities. Considerable concentration risk is to some extent mitigated by the quality of KA's credit exposures. Management intends to run a well-controlled liquidity policy with a significant proportion of long-term funding to account for KA's typically long-dated assets, which, in Fitch's view, is challenging in the current funding environment. KA aims to maintain a core Tier 1 ratio above 10% (15.6% at end-H110) which Fitch considers acceptable, although KA's capital ratios should be viewed in the context of low risk weightings for public-sector lending. At end-H110, KF's EUR22.1 billion total assets predominately related to non-Austrian (and other non-core) public sector bonds and loans. At the same time, KF also held a CDS portfolio of around EUR10bn. Around 93% of CDS exposure related to sovereign risk and 92.5% to counterparties within the EU. KF is intentionally funded short term and through government-guaranteed bond issuances. Despite significantly negative IFRS equity, at end-H110 KF remained compliant with regulatory capital ratios (calculated under Austrian GAAP, which treats CDS as financial guarantees and parts of the fair-valued assets at cost). The Austrian state has committed to maintaining a Tier 1 ratio of 7% as long as the bank's former owners remain invested in KF's participation capital. The rating actions are: Kommunalkredit Austria AG -- Long-term IDR: affirmed at 'A'; Outlook Stable -- Short-term IDR: affirmed at 'F1' -- Individual Rating: upgraded to 'D' from 'E' -- Support Rating: affirmed at '1' -- Support Rating Floor: affirmed at 'A' -- Senior unsecured notes: affirmed at 'A' -- Senior market-linked notes: affirmed at 'Aemr' -- Government guaranteed notes: affirmed at 'AAA' KA Finanz AG -- Long-term IDR: affirmed at 'A+'; Outlook Stable -- Short-term IDR: affirmed at 'F1+' -- Support Rating: affirmed at '1' -- Support Rating Floor: affirmed at 'A+' -- Senior unsecured notes: affirmed at 'A+' -- Subordinated (lower tier 2) notes: 'A' placed on Rating Watch Negative -- Junior subordinated: affirmed at 'C'/Recovery Rating 'RR5' Government guaranteed notes: affirmed at 'AAA' =============== B U L G A R I A =============== UNITED BULGARIAN: Fitch Puts 'BB+' Long-Term IDR on Negative Watch ------------------------------------------------------------------ Fitch Ratings has placed the Long-term Issuer Default Ratings of several subsidiaries of National Bank of Greece S.A. and EFG Eurobank Ergasias S.A. on Rating Watch Negative. The rating actions follow the placement of NBG and Eurobank's LT IDRs on RWN. The subsidiaries' IDRs are based on potential institutional support from their respective Greek parent companies. The RWN on NBG and Eurobank's subsidiaries reflects Fitch's view that while the banks' propensity to support their international banking subsidiaries remains unchanged, their ability to do so could be declining. The outcome will depend on the resolution of the RWN on the parent banks. If NBG and Eurobank's ratings are downgraded, it would likely affect the subsidiaries' ratings. The rating actions are: NBG's subsidiaries: United Bulgarian Bank -- Long-term foreign currency IDR: 'BB+' placed on RWN -- Short-term foreign currency IDR: affirmed at 'B' -- Support Rating: affirmed at '3' -- Individual Rating: unaffected at 'D'. Banca Romaneasca S.A. -- Long-term foreign currency IDR: 'BB+' placed on RWN -- Short-term foreign currency IDR: affirmed at 'B' -- Support Rating: affirmed at '3' -- Individual Rating: unaffected at 'D'. The South African Bank of Athens -- National Long-term Rating: 'BBB+' (zaf) placed on RWN -- National Short-term Rating: 'F2' (zaf) placed on RWN -- Support Rating affirmed at '3' Eurobank's subsidiaries: Eurobank EFG Bulgaria AD -- Long-term foreign currency IDR: 'BB+' placed on RWN -- Short-term foreign currency IDR: affirmed at 'B' -- Support Rating: affirmed at '3' -- Individual Rating: unaffected at 'D'. ============= D E N M A R K ============= SKYKON AS: Files for Insolvency After Restructuring Talks Failed ---------------------------------------------------------------- Skykon A/S, a customer of Muehlhan, has -- by its own account -- filed for insolvency. The talks about the restructuring of the company, which has been in financial difficulties since October, have failed. Expensive acquisitions and a decreased demand in relation to the financial crisis had caused the company's situation. For Muehlhan this means an additional implementation of allowances on the accounts receivables in the amount of up to EUR1.5 million. Of the receivables against Skykon of overall EUR1.9 million, EUR0.4 million have been booked as bad debt losses in the third quarter 2010 already. The production in Denmark and Scotland will continue for the time being. Since October, Muehlhan works at both locations directly for the end customers, well-known wind turbine manufacturers. About Muehlhan The Muehlhan Group is a global specialist in high-quality surface protection and industrial services. About Skykon Denmark-based Skykon A/S is supplier for the wind industry. ============= G E R M A N Y ============= DUREVE LIMITED: Fitch Assigns 'BB-sf' Rating on Class C-1 Notes --------------------------------------------------------------- Fitch Ratings has assigned Dureve Limited Series 2010-1 final ratings as listed below. This transaction is a re-securitization of the class A1 of Euromax V ABS PLC, which is a managed securitization of European structured finance assets, primarily commercial and residential mortgage-backed securities. -- EUR43m Class Senior A-1 Secured Floating Rate Notes due 2095: assigned 'Asf'; Outlook Stable -- EUR39m Class Senior A-2 Secured Floating Rate Notes due 2095: assigned 'BBB-sf'; Outlook Stable -- EUR30m Class Mezzanine B Secured Floating Rate Notes due 2095: assigned 'BB+sf'; Outlook Stable -- EUR12m Class Subordinated C-1 Secured Floating Rate Notes due 2095: assigned 'BB-sf'; Outlook Stable -- EUR57.6m Class Subordinated C-2 Secured Floating Rate Notes due 2095: not rated The rating of the class A-1 notes addresses the timely payment of interest and ultimate payment of principal at the legal maturity in November 2095. The rating of the class A-2 and B notes address the ultimate payment of interest and principal at the legal maturity. The rating of the class C-1 notes addresses the ultimate payment of principal at the legal maturity. The ratings reflect the high credit enhancement level of the rated classes as a result of the subordination of Dureve's class C-2 notes and the other classes junior to class A1 (rated 'CCCsf') of Euromax 5. The class A-1, A-2, B and C-1 of Dureve have credit enhancement of 84%, 70%, 59% and 55%, respectively. The Dureve rated classes can sustain a significant amount of losses and a Stable Outlook has been assigned. At a high rating stress level, a shortfall of interest payment on the class A1 of Euromax 5 can occur and would trigger an event of default for the Euromax 5 transaction but would not trigger an event of default for Dureve. In addition, Dureve, the majority- owner of the controlling class, cannot enforce Euromax 5 collateral if the portfolio liquidation proceeds result in insufficient proceeds to fully repay the Dureve rated notes. An Issuer Report Grade of 2 stars has been assigned based on an investor report template provided by the arranger. The template does not provide counterparty ratings and rating triggers. At closing, Dureve used the issuance note proceeds to purchase the whole amount of the class A1 notes of Euromax 5. In return, Dureve has all the right, title and interest of the class A1 of Euromax 5. In Dureve's payment priorities, class A-1 principal is subordinated to class A-1 to B interest payment. The notional of classes A-1 to C-2 are redeemed sequentially starting from class A-1. =========== G R E E C E =========== DRYSHIPS INC: Inks US$770 Million Tanker Agreement -------------------------------------------------- DryShips Inc. has entered into agreements with a first class Korean shipyard to purchase 12 high specification newbuilding tankers at a total purchase price of about US$770 million, including over US$3 million per vessel in extra items. The deliveries of the vessels are scheduled as follows: * Six newbuilding Aframax tankers with following deliveries: four in 2011 and two in 2012 * Six newbuilding Suezmax tankers with following deliveries: one in 2011, two in 2012 and three in 2013. The Company has made initial payments of about US$120 million against these newbuilding contracts from cash on hand. The Company intends to finance the remaining capital commitments, which include delivery installments of about 70% of each vessel's price, with cash on hand and bank debt. The Company intends to position its tanker investments for a spinoff or initial public offering. 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 US$5.80 million in total assets, US$1.90 million in total current liabilities, US$1.10 million in total noncurrent 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. DRYSHIPS INC: Board Approves Share Purchase Program --------------------------------------------------- DryShips Inc. said its Board of Directors has approved a share purchase program for up to a total of US$25.0 million of common stock of its majority-owned subsidiary Ocean Rig UDW Inc., which may be purchased from time to time through March 31, 2011. Share purchases by the Company will be made for cash in open market transactions in Norway on the OTC market maintained by the Norwegian Association of Stockbroking Companies at prevailing market prices or in privately negotiated transactions; provided that the maximum price shall be US$17.50 per share. The timing and amount of purchases under the program will be determined by management based upon market conditions and other factors. The program does not require the Company to purchase any specific number or amount of Ocean Rig UDW Inc. common stock and may be suspended or reinstated at any time in the Company's discretion and without notice. 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 US$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 R E L A N D ============= ALLIED IRISH: Government Gets Court OK to Inject EUR3.7 Billion --------------------------------------------------------------- Eamon Quinn and Paul J. Davies at The Financial Times report that the Irish government took a further step towards complete ownership of Allied Irish Banks as it won court approval on Dec. 23 to inject EUR3.7 billion (US$4.85 billion) into the bank. According to the FT, Finance Minister Brian Lenihan said the capital injection from the country's National Pension Reserve Fund would effectively raise the government's stake to 92.8% in AIB early next year from the 18.6% it holds after last year's investment of EUR3.5 billion. The FT notes that while the move had been widely expected since the broader EUR35 billion European-backed bail-out of Ireland was concluded at the end of November, it still leaves AIB needing to raise a further EUR6.1 billion to meet capital requirements imposed as a condition of the bail-out. More than half -- or EUR3.5 billion -- of that will come from the government converting the preferred shares it bought last year into common equity, the FT states. AIB will still have to find the remaining EUR2.6 billion from other means, including discounted buy-backs, or swaps of junior bonds, according to analysts, or entirely wipe out the remaining private shareholders, the FT notes. The FT relates that Mr. Lenihan said AIB's shares will be shifted to the Irish Stock Exchange's junior Enterprise Securities Market, to ensure private shareholders retain access to public trading. Its London listing will be cancelled, the FT discloses. Allied Irish Banks, p.l.c., together with its subsidiaries -- http://www.aibgroup.com/-- conducts retail and commercial banking business in Ireland. It also provides corporate lending and capital markets activities from its head office at Bankcentre and from Dublin's International Financial Services Centre. The Group also has overseas branches in the United States, Germany, France and Australia, among other locations. The business of AIB Group is conducted through four operating divisions: AIB Bank Republic of Ireland division, Capital Markets division, AIB Bank UK division, and Central & Eastern Europe division. In February 2008, the Group acquired the AmCredit mortgage business in the Baltic states of Latvia, Lithuania and Estonia. In September 2008, the Group also acquired a 49.99% shareholding in BACB. * * * As reported by the Troubled Company Reporter-Europe on Dec. 22, 2010, Standard & Poor's Ratings Services said that lowered its rating on Allied Irish Banks PLC's nondeferrable subordinated debt (lower Tier 2) securities to 'CCC' from 'B'. S&P said he 'BBB/A- 2' counterparty credit ratings on AIB remain on CreditWatch with negative implications where they were placed on Nov. 26, 2010. Issuance guaranteed by the Republic of Ireland (A/Watch Neg/A-1) is not affected by the rating action. "The downgrade reflects S&P's opinion that the likelihood of a liability management exercise by AIB in respect of its lower Tier 2 instruments has increased. If the bank announces an exchange offer, S&P would expect to characterize it as a "distressed exchange"," said Standard & Poor's credit analyst Nigel Greenwood. IVORY CDO: S&P Downgrades Rating on Class E Notes to 'CCC (sf)' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on the class A-1, A-2, B, C, D, and E notes issued by Ivory CDO Ltd. The rating actions follow S&P's assessment of the credit deterioration of the underlying portfolio, which provides cash flows for the payments on the notes. S&P's analysis also shows that the balance of assets rated in the 'CCC' category ('CCC+', 'CCC', and 'CCC-') has increased to 8% of the total collateral in November 2010 from 1% in August 2009 when S&P last reviewed this transaction. This has led to an increase in the scenario default rates at each rating level. The class A, B, C, D, and E notes' overcollateralization ratios have declined further since S&P's last review, with all ratios standing substantially below 100%. As a result, interest payments due to the class C, D, and E notes have been deferred. None of S&P's ratings were affected by the largest obligor default test or the largest industry default test, which S&P introduced as part of S&P's criteria update. S&P's most recent rating actions on Ivory CDO took place in August 2009 when S&P affirmed its ratings on the class A-1, A-2, and B notes and lowered its ratings on the class C, D, and E notes. Ivory CDO is a cash CDO of asset-backed securities managed by Chenavari Credit Partners LLP that closed in July 2007. Ratings List Ivory CDO Ltd. EUR200 Million Asset-Backed Floating-Rate Notes Ratings Lowered Rating ------ Class To From ----- -- ---- A-1 AA+ (sf) AAA (sf) A-2 AA- (sf) AAA (sf) B BBB+ (sf) AA (sf) C BB+ (sf) BBB+ (sf) D CCC+ (sf) B- (sf) E CCC (sf) CCC+ (sf) MCKILLEN COMPANIES: Supreme Court Reserves Judgment on Nama Case ---------------------------------------------------------------- Mary Carolan at The Irish Times reports that a seven-judge Supreme Court has reserved judgment on the action by property investor Paddy McKillen aimed at preventing the National Assets Management Agency (Nama) from acquiring EUR2.1 billion loans made to himself and his companies. According to The Irish Times, judgment is not expected to be delivered before the new law term opens on January 11. The Irish Times relates that the court heard closing arguments on Dec. 22 in the appeal by Mr. McKillen against a decision of a three-judge High Court last month rejecting the challenge by himself and 15 of his companies to the acquisition of their loans with Bank of Ireland. The case has implications for EUR2.1 billion loans held by the McKillen companies with the participating institutions in Nama, Irish Times notes. The agency has argued the loans acquisition is necessary because that extent of exposure to the financial institutions participating in Nama created a "systemic risk" to those institutions, The Irish Times discloses. The appeal was listed for three days but concluded on Dec. 22 after a six-day hearing, The Irish Times recounts. In closing arguments for Mr. McKillen, Shane Murphy SC, as cited by The Irish Times, said Nama had characterized the McKillen loans as performing, with interest being paid even on expired loans. Addressing claims by the State that some of the loans involved breached loan to value ratios, he said it was the practice of banks in such situations not to serve demands for repayment but to seek to renegotiate the loans, The Irish Times notes. OCELOT CDO: S&P Affirms 'B- (sf)' Rating on Class D Notes --------------------------------------------------------- Standard & Poor's Ratings Services raised its credit ratings on six and lowered its ratings on two synthetic collateralized debt obligation tranches issued by Ocelot CDO I PLC under the Ocelot CDO II program. At the same time, S&P has affirmed its credit ratings on another two tranches. S&P has raised its ratings on the notes in series 2005-01, 2006-2, 2006-03, 2005-02, 2005-06, and 2006-04 because S&P believes the likelihood of breaching the threshold has reduced since its last rating action on Feb. 23, 2010. In S&P's opinion, the attachment point for these series of notes is commensurate with higher ratings than those S&P previously assigned. S&P has lowered its ratings on the notes in series 2005-04 and 2005-08 because S&P believes the likelihood of the attachment point being breached has increased since its last rating action on Feb. 23, 2010. In S&P's opinion, the attachment point for these series of notes is consistent with lower ratings than those S&P previously assigned. At the same time S&P affirmed its ratings on the notes in series 2005-03 and 2005-07. Ratings List Ratings Raised Ocelot CDO I PLC EUR20 Million Class A Floating-Rate Mezzanine Notes Series 2005-01 (Ocelot II) Rating ------ Class To From ----- -- ---- A BBB+ (sf) BBB- (sf) EUR50 Million Class A Floating-Rate Mezzanine Notes Series 2006-02 (Ocelot CDO II) Rating ------ Class To From ----- -- ---- A BBB+ (sf) BBB- (sf) EUR2 Million Class A Floating-Rate Mezzanine Notes Series 2006-03 (Ocelot CDO II) Rating ------ Class To From ----- -- ---- A BBB+ (sf) BBB- (sf) EUR50 Million Class B Floating-Rate Mezzanine Notes Series 2005-02 (Ocelot II) Rating ------ Class To From ----- -- ---- B BBB- (sf) BB (sf) EUR1.225 Million Class B Floating-Rate Mezzanine Notes Series 2005-06 (Ocelot CDO II) Rating ------ Class To From ----- -- ---- B BBB-p (sf) BBp (sf) EUR1 Million Class C Floating-Rate Mezzanine Notes Series 2006-04 (Ocelot CDO II) Rating ------ Class To From ----- -- ---- C BBB- (sf) BB (sf) Ratings Affirmed Ocelot CDO I PLC EUR2 Million Class C Floating-Rate Mezzanine Notes Series 2005-03 (Ocelot CDO II) Rating ------ Class To From ----- -- ---- C BB- (sf) BB- (sf) EUR78 Million Class C Floating-Rate Mezzanine Notes Series 2005-07 (Ocelot CDO II) Rating ------ Class To From ----- -- ---- C BB-p (sf) BB-p (sf) Ratings Lowered Ocelot CDO I PLC EUR3 Million Class D Floating-Rate Mezzanine Notes Series 2005-04 (Ocelot CDO II) Rating ------ Class To From ----- -- ---- D B- (sf) B (sf) EUR0.61 Million Class D Floating-Rate Mezzanine Notes Series 2005-08 (Ocelot CDO II) Rating ------ Class To From ----- -- ---- D B-p (sf) Bp (sf) TITAN EUROPE: Fitch Downgrades Rating on Class C Notes to 'CCCsf' ----------------------------------------------------------------- Fitch Ratings has downgraded Titan Europe 2006-2 plc's class A to C notes and affirmed the class D to J notes. The rating actions are: -- EUR377.9m Class A (XS0254356990) downgraded to 'BBB-sf' from 'BBB+sf'; Outlook Negative -- EUR61.7m Class B (XS0254357378) downgraded to 'Bsf' from 'BBsf'; Outlook Negative -- EUR44.1m Class C (XS0254357881) downgraded to 'CCCsf' from 'Bsf'; assigned Recovery Rating (RR) 'RR4' -- EUR23.1m Class D (XS0254357964) affirmed at 'CCCsf'; 'RR6' -- EUR57.5m Class E (XS0254358004) affirmed at 'CCsf'; 'RR6' -- EUR37.4m Class F (XS0254358699) affirmed at 'CCsf'; 'RR6' -- EUR29.3m Class G (XS0254648263) affirmed at 'CCsf'; 'RR6' -- EUR28.2m Class H (XS0254647612) affirmed at 'CCsf'; 'RR6' -- EUR11.5m Class J (XS0254653180) affirmed at 'CCsf'; 'RR6' The downgrades and Negative Outlooks are driven by the continued under-performance and ongoing operational/management-related difficulties faced by the collateral securing the remaining four loans. All four loans are subject to ongoing, albeit in some instances waived, technical or monetary events of default. Two loans are in primary servicing (following loan restructures), while the other two are in special servicing. Despite some minor improvements, all four loans are still effectively distressed debt positions. In addition, liquidity facility drawings have been required every quarter since the July 2009 interest payment date to cover interest shortfalls under the loans, special servicer fees and interest due to the class X notes. The cross-defaulted (but not cross-collateralized) Margaux and Petrus loans (72% of the pool) were both restructured and removed from the servicer's watchlist in Q310. The two restructures have similar terms including, amongst others, new interest rate swaps, one-year loan extensions, and all surplus cash to be invested in the properties. Both loans were in breach of their 1.15x debt service coverage cash trap triggers at the time of the last review in September 2009. As of the October 2010 IPD, both DSCRs have improved, to 1.36x and 1.65x, respectively, and all trapped surplus funds were released. However, Fitch notes that rental arrears greater that 30 days have been disregarded for the purposes of calculating the DSCR and that both portfolios continue to suffer increasing arrears levels (17% and 19.5%, respectively). These rental arrears are exceptionally high, if not unheard of, for professionally managed multifamily portfolios. The sponsor continues to inject new equity for capital expenditure. Since closing, a total of EUR7.2m and EUR2.5m has been injected into the Margaux and Petrus portfolios, respectively. While vacancy rates remain high (at 24% and 11%, respectively), they have been on an improving trend over the past year. This reflects the positive effect of ongoing capex works, especially in the case of the Petrus portfolio. Despite the ongoing capex works and resulting improvement in vacancy rates, the persisting high rental arrears give rise to significant concerns about the effectiveness of the portfolios' management strategies. Due to the poor collateral performance and high Fitch LTVs, Fitch doubts that these loans will be successfully refinanced at their extended maturity dates. While the remaining tail period until the legal final maturity in January 2016 provides sufficient time to complete a workout; Fitch expects a significant loss to be realized on both loans. Fitch will continue to monitor the performance of the transaction. ZOE GROUP: Paid EUR1.4MM to Secured Creditors During Receivership ----------------------------------------------------------------- Liam Carroll's Zoe group paid EUR1.4 million to secured creditors in the first year of its receivership, Barry O'Halloran at The Irish Times reports, citing documents filed in the companies' office. The Irish Times relates that Mr. Carroll's property development business collapsed last year owing its banks EUR1.2 billion after two failed attempts to have it placed in examinership and under High Court protection failed. State toxic loans agency, Nama, subsequently took over loans due to AIB, Anglo Irish Bank, Bank of Ireland and the EBS, The Irish Times recounts. According to The Irish Times, documents filed by David Carson of Deloitte, the receiver appointed by Bank of Ireland, show that EUR1.45 million was distributed to secured creditors over two six- month periods between October 2009 and 2010. The inter-locking companies in Mr. Carroll's business, known collectively as the Zoe group, owed Bank of Ireland EUR113 million, The Irish Times notes. AIB, which the State effectively took over on Dec. 23, was the largest lender to Zoe, which owed it EUR489 million, or 40.8% of the group's overall debt, The Irish Times discloses. Bank of Scotland (Ireland) followed with a EUR321 million debt, The Irish Times states. Other lenders included: Ulster Bank, EUR82 million; Anglo Irish Bank, EUR38 million; KBC Bank Ireland, EUR23 million and EBS, EUR8.5 million, according to The Irish Times. The Irish Times says a number of other receivers were appointed to the group, but none of the documents they have filed at this stage show any distributions were made to creditors. Zoe's efforts to get court protection and to be placed in examinership last year failed because the group was unable to show that it would have a reasonable chance of survival were this to happen, The Irish Times relates. ========= I T A L Y ========= SEAT PAGINEGIALLE: S&P Downgrades Corporate Credit Rating to 'B-' ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered to 'B-' from 'B' its long-term corporate credit rating on Italy-based international publisher of classified directories SEAT PagineGialle SpA. The outlook is negative. At the same time, S&P lowered to 'B' from 'B+' its senior secured debt ratings on SEAT's first-lien term debt, revolving credit facility, and notes. The recovery ratings on these debt instruments are unchanged at '2', indicating S&P's expectation of substantial (70%-90%) recovery in the event of a payment default. S&P also lowered to 'B-' from 'B' its debt rating on the second- lien notes issued by related entity Lighthouse International Co. S.A. The recovery rating on these notes is unchanged at '4', indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. "The downgrade mainly reflects S&P's opinion that SEAT continues to face a difficult operating environment and an excessively leveraged capital structure, which could negatively affect the group's liquidity position," said Standard & poor's credit analyst Carlo Castelli. "Moreover, S&P believes that SEAT faces significant challenges in refinancing the debt maturities looming for 2012-2013. SEAT's markets remain affected by tough conditions, due to the shift in small and midsize enterprises' advertising expenses from print to online, stiff competition on the Internet, and sluggish economic growth in Italy." S&P believes that SEAT's weak operating performance, combined with high interest costs, may materially affect its free operating cash flow generation. This could undermine the group's liquidity position and ability to pay down debt. Above all, S&P believes that SEAT's ability to access the capital markets at reasonable prices in order to refinance upcoming maturities is limited, as demonstrated by the recent EUR200 million senior secured bond issuance at almost 13% yield to maturity. In S&P's view, rating pressures should gradually accelerate as the group comes closer to its significant debt maturities in June 2012 and 2013. S&P also believe that liquidity may come under renewed pressure over the next 12 months if the group fails to stabilize its operating performance. The ratings could be lowered again during 2011 in the absence of any significant refinancing action, resulting in an extension of 2012 debt maturities. The implementation of a new ABS program would be a meaningful, but insufficient step to stabilize the group's liquidity profile. S&P will monitor closely any risk of debt restructuring?--which S&P views as tantamount to default under S&P's criteria--as the group approaches mid-2012; S&P is not aware of any tangible step in this direction, however. S&P could revise the outlook to stable if SEAT were able to stabilize its operating performance in the course of the next 12 months and if it were to succeed in implementing measures to alleviate the refinancing risk in 2012-2013. However, such a revision would also be dependent on the group avoiding wiping out its cash flow generation to fund interest costs and maintain adequate covenant headroom. STT HOLDING: S&P Downgrades Long-Term Issuer Credit Rating to 'BB' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it has lowered to 'BB' from 'BBB' its long-term issuer credit rating on the Italian city of Parma's investment company STT Holding SpA, and placed the rating on CreditWatch developing. "The rating action follows S&P's reassessment of the link between STT and Parma, in accordance with S&P's criteria for government- related entities," said Standard & Poor's credit analyst Lorenzo Pareja. S&P's former 'BBB' rating on STT, which S&P considers to be a government-related entity because it is 100% owned by Parma, was based on S&P's opinion that there was an "extremely high" likelihood that the city would provide timely and sufficient extraordinary support to STT in the event of financial distress. It was underpinned by S&P's view of the "very important role" STT played for, and the "integral link" the company had with Parma. According to S&P's criteria, this integral link denotes a track record of considerable and timely support in all circumstances on the part of the government, which includes the city setting up the means to avoid liquidity constraints. However, S&P note that STT and its subsidiaries have increasingly suffered from weak liquidity, particularly since an EUR84 million bond placement was delayed in early November 2010. According to the company, Parma finished renegotiating several of STT's financial obligations, some of which were due by year-end 2010. S&P now believes that there is a "very high" likelihood that Parma would provide timely and sufficient extraordinary support to STT in the event of financial distress. S&P's opinion is based on its view that STT's: Link with Parma is "very strong"--, which is one level below "integral", according to its criteria. S&P base its view on Parma's track record of very strong support "in most circumstances". In S&P's opinion, the city is actively renegotiating STT's financial obligations, exerts full control and monitoring over its activities, and has repeatedly provided transfers to the group. The local government's reputation would be negatively affected if STT found itself in financial distress. Role for its owner is "very important". In S&P's opinion, STT plays a key role in developing the city's investment strategy and meeting the government's political and economic objectives. STT's main responsibility is carrying out--either directly or through its subsidiaries--Parma's most visible and important projects, including the city's main urban renewal initiatives, the building of premises for administrative entities of the European Commission (particularly the European Food Security Agency, or EFSA), and the promotion of Parma's industrial development by setting up industrial parks. S&P expects to resolve the CreditWatch placement within the next month. "To do so, S&P will reassess STT's SACP in view of the solutions that Parma has found to cover the company's current and future funding needs," said Mr. Pareja. If S&P decide that STT's SACP is at the middle or upper part of the 'b' category, S&P could consider an upgrade. Conversely, S&P could downgrade STT if S&P assess that its SACP is within the boundaries of the 'ccc' category. =================== K A Z A K H S T A N =================== DBK LEASING: Moody's Assigns (P)'Ba3' Rating to Domestic Bonds -------------------------------------------------------------- Moody's Investors Service has assigned a provisional (P)Ba3 long- term local currency debt rating to the KZT15 billion (approximately US$102 million) domestic bond program of DBK Leasing. The outlook on local currency debt rating is stable. Any subsequent senior debt issuance by DBKL will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. Ratings Rationale The rating assigned is in line with DBKL's global local currency issuer rating of Ba3. Moody's notes that the obligations of DBKL to make payments under the senior unsecured bond issue will rank -- at all times -- at least pari-passu with the claims of all other unsecured and unsubordinated creditors of the company, except for those claims that are preferred by any relevant law. Nonetheless, the ratings of DBKL's domestic bond program do not immediately apply to any individual notes issued under the program. The assignment of any such ratings is subject to Moody's satisfactory review of the terms and conditions set forth in the final prospectuses, supplements or offering memorandums of the bonds to be issued. DBKL's Baseline Credit Assessment of B3 is constrained by high credit risk concentrations, the company's low profitability and the possibility of politically motivated decisions given its indirect state ownership. However, the stand-alone rating is underpinned by strong capital cushion, strong liquidity position and access to funding from its parent -- Development Bank of Kazakhstan. DBKL's issuer rating, in turn, incorporates four main elements: (i) the company's BCA of B3; (ii) Moody's assessment of the very high probability of parental support in the event of need, given the company's 100% ownership by DBK, its relatively moderate size (and thus, greater probability that DBK will provide support) and its good fit within its parent's strategy; (iii) high dependence on DBK, which has provided it with all funding and capital to date; and (iv) DBK's BCA of 11-13 (on a scale of 1 to 21, where 1 represents lowest credit risk). As a result, Moody's assessment of parental support results in a three-notch uplift from DBK Leasing's B3 BCA. Moody's previous rating action on DBKL was on May 4, 2010, when the rating agency confirmed the company's Ba3 long-term local and foreign currency issuer ratings. Headquartered in Astana, Kazakhstan, DBK Leasing reported total assets of KZT35.6 billion (US$240 million) and total equity of KZT8.6 billion (US$58.2 million) under audited IFRS as at YE2009. HALYK SAVINGS: S&P Gives Stable Outlook; Affirms 'B+' Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its outlook on Kazakhstan-based Halyk Savings Bank of Kazakhstan to stable from negative. At the same time, the 'B+' long-term and 'B' short-term counterparty credit ratings were affirmed. "The outlook revision reflects S&P's belief that asset quality pressure at the bank has started to ease due to the gradual improvements in the domestic economy, which in turn is helping to stabilize its earnings and capital," said Standard & Poor's credit analyst Magar Kouyoumdjian. The ratings on Halyk reflect the high-risk economic and banking environment in the Republic of Kazakhstan (foreign currency BBB/Stable/A-3, local currency BBB+/Stable/A-2; National Scale Rating kzAAA/--/--); the bank's weak asset quality and associated high credit provisioning, which has placed a significant burden on profitability; and high single-name concentration in corporate loans and deposits. These concerns are partly mitigated by Halyk's good customer franchise and leading market position, particularly in retail banking; adequate liquidity and capitalization; and funding and regulatory capital support from the state because of the bank's systemic importance. Despite Standard & Poor's classification of Halyk as a systemically important bank in Kazakhstan, the ratings on the bank reflect its stand-alone credit profile, and include no uplift for extraordinary parental or government support, which S&P considers as uncertain in the future. However, through its wealth fund, Samruk-Kazyna, the government allocated around US$1 billion for Halyk to help it to weather the crisis. Of this amount, US$400 million was allocated to common and preferred shares. In late- March 2009, Samruk-Kazyna bought 20.91% of the bank's common shares (for US$180 million) and a further US$220 million was invested in preferred shares by mid-2009, which in S&P's view has helped improve Halyk's capitalization. The bank's 54.4% majority owner, JSC Holding Group Almex (not rated) is planning to exercise its option to buy back Samruk-Kazyna's stake in Halyk in early 2011. The stable outlook on Halyk reflects S&P's view that asset quality pressure is easing, the economy is gradually emerging from a slowdown, and market turbulence is subsiding. As a result, the bank's earnings and capitalization are now likely to stabilize going forward. If S&P observe further escalation in market turbulence that leads to a reversal of this trend, S&P could revise the outlook back to negative, with the potential for a downgrade. S&P considers this scenario unlikely, however. The potential for an upgrade in the short term is limited, however, at least until domestic market pressure eases considerably. If and once that happens, improvements in risk management and asset quality, a significant reduction in single- name depositor concentrations, and sustained adequate financial performance could lead to an upgrade. * S&P Raises Ratings on Various Kazakh Government-Related Entities ------------------------------------------------------------------ Standard & Poor's Ratings Services said it raised its ratings on several Kazakhstan-based government-related entities and their subsidiaries following its upgrade of the Republic of Kazakhstan (foreign currency BBB/Stable/A-3, local currency BBB+/Stable/A-2; national scale rating 'kzAAA'). The rating actions are based on S&P's GRE methodology. S&P raised its long-term corporate credit ratings on railway company Kazakhstan Temir Zholy to 'BBB-' from 'BB+', reflecting its expectation of "very high" likelihood of extraordinary government support. S&P's assessment of KTZ's stand-alone credit quality remains at 'b+'. S&P also raised its rating on KTZ's 100%-owned subsidiary JSC Kaztemirtrans to 'BBB-' because S&P continue to equalize it with its rating on the parent. S&P revised the outlook on these entities to stable from positive. At the same time, S&P raised the Kazakh national scale ratings on KTZ and KTT to 'kzAA' from 'kzAA-'. S&P also raised its rating on the oil and gas group JSC NC KazMunayGas to 'BBB-' from 'BB+', based on its expectation of "extremely high" likelihood of extraordinary government support and its assessment of stand-alone credit quality at 'b'. The national scale rating was raised to 'kzAA' from 'kzAA-'. The outlook remains stable. Meanwhile S&P has withdrawn its '4' recovery ratings on KMG, KTT, and KTZ, because Standard & Poor's does not assign recovery ratings to Kazakhstan-based issuers rated 'BBB-' and higher. Following the action on the parent, S&P raised its ratings on KMG's 100%-owned gas transportation subsidiary KazTransGas to 'BB' from 'BB-'. This rating remains two notches below S&P's rating on the parent. The outlook is stable. S&P affirmed its ratings on KMG's subsidiaries, 60%-owned oil company JSC KazMunaiGas Exploration Production and 100%-owned oil pipeline KazTransOil, at 'BB+', one notch below its rating on the parent, both with a stable outlook. S&P considers KMGEP and KTO to be more strategically important for the group and to have a relatively higher stand-alone credit quality than KTG, hence the difference between the ratings on the subsidiaries. Still, the ratings on the subsidiaries remain below those on the parent because their link with the state is indirect and, in S&P's view, the benefits of potential extraordinary state support may not fully filter through to them given KMG's relatively weak stand- alone credit quality and high debt. S&P has left unchanged its ratings and outlook on the postal operator Kazpost (JSC) (BB/Stable/--, national scale rating 'kzA+'), on Kazakh Agrarian Credit Corp. (BB/Stable/B, 'kzA+'), on Kazakhtelecom (JSC) (BB/Stable/--; 'kzA'), and on Kazakhstan Electricity Grid Operating Co. (JSC) (KEGOC; BB+/Stable/--). S&P continue to assess the likelihood of extraordinary state support as "very high" for KEGOC, "high" for Kazpost and Kazakh Agrarian Credit Corp., and "moderately high" for Kazakhtelecom. S&P assess the stand-alone credit quality for KEGOC, Kazpost, and Kazakh Agrarian Credit Corp. at 'b' and for Kazakhtelecom at 'bb- '. Under S&P's GRE methodology, the upgrade of the sovereign rating does not trigger any automatic rating actions on these four entities, as its assessments of their stand-alone credit quality or likelihood of extraordinary state support remain unchanged. KTZ, KEGOC, KMG, Kazpost, and Kazakhtelecom are effectively 100%- owned by the government of Kazakhstan through the holding company Samruk-Kazyna. S&P analyze these entities based on its methodology for GREs rather than for parent-subsidiary links, because S&P believes these entities will benefit from a certain degree of extraordinary state support, and S&P currently view Samruk-Kazyna as effectively an extension of the government. Ratings List Upgraded Kazakhstan Temir Zholy JSC Kaztemirtrans To From -- ---- Issuer credit rating BBB-/Stable/-- BB+/Positive/-- Kazakhstan national scale kzAA kzAA- JSC NC KazMunayGas To From -- ---- Issuer credit rating BBB-/Stable/-- BB+/Stable/-- Kazakhstan national scale kzAA kzAA- KazTransGas To From -- ---- Issuer credit rating BB/Stable/-- BB-/Stable/-- Ratings Withdrawn Kazakhstan Temir Zholy JSC Kaztemirtrans JSC NC KazMunayGas To From -- ---- Recovery rating NR 4 Ratings Affirmed JSC KazMunaiGas Exploration Production KazTransOil Issuer credit rating BB+/Stable/-- Ratings Unchanged Kazpost (JSC) Issuer credit rating BB/Stable/-- Kazakhstan national scale kzA+ Kazakh Agrarian Credit Corp. Issuer credit rating BB/Stable/B; Kazakhstan national scale kzA+ Kazakhtelecom (JSC) Issuer credit rating BB/Stable/--; Kazakhstan national scale kzA Kazakhstan Electricity Grid Operating Co. (JSC) Issuer credit rating BB+/Stable/-- N.B. This list does not include all ratings affected. =================== L U X E M B O U R G =================== DEUTSCHE BANK: S&P Assigns 'BB+ (sf)' Rating to Class A4 Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its credit ratings to Deutsche Bank Luxembourg S.A.'s resecuritization notes series 50. This transaction represents the second public resecuritizations of a European commercial mortgage-backed securities bond. In this transaction, the seller, Deutsche Bank AG, sold to Deutsche Bank Luxembourg a portion of the class A commercial mortgage-backed floating-rate notes issued by GEMINI (ECLIPSE 2006-3) PLC. The issuance of the series 50 notes funded the purchase. The ratings reflect S&P's opinion of the expected performance of the underlying collateral, the transaction structure, and the payment priorities. S&P has previously publicly rated three fiduciary issuances from Deutsche Bank Luxembourg in Europe, each previously backed by structured finance securities. The scheduled maturity date of series 50 is in July 2019. Ratings List Deutsche Bank Luxembourg S.A. GBP175.84 Million Resecuritization Fiduciary Notes Series 50 Class Rating Amount (mil. GBP) ----- ------ ----------------- A1 A+ (sf) 45.00 A2 A (sf) 15.00 A3 BBB (sf) 10.00 A4 BB+ (sf) 14.50 A5 NR 91.34 NR -- Not rated. LOGWIN AG: S&P Affirms 'B' Long-Term Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'B' long-term corporate credit and 'B-' subordinated debt ratings on Luxembourg-based logistics service provider Logwin AG. At the same time, the ratings were removed from CreditWatch, where they were placed with positive implications on Nov. 11, 2010. The outlook is stable. The recovery rating on the subordinated notes is unchanged at '5', indicating S&P's expectation of modest (10%-30%) recovery in the event of a payment default. "The rating affirmation reflects S&P's view of Logwin's small base of operating profits, which S&P believes provides limited downside protection and renders the company susceptible to adverse market conditions," said Standard & Poor's credit analyst Jebby Jacob. "Although the disposal of Logwin's Road & Rail business in the first quarter of 2010 has helped to curtail operating losses, S&P considers the group's reported EBITDA for the 12 months ending Sept. 30, 2010, to be relatively small at EUR30.8 million, with a thin EBITDA margin of 2.4%. However, the capital increase of ?40 million directed toward the partial bond redemption has improved Logwin's financial risk profile, which S&P now views as aggressive under S&P's criteria. Even so, S&P believes that any further financial improvement will stem from Logwin's ability to expand its operating profits, in particular from a recovery of its currently underperforming Solutions business." S&P note that post the partial redemption of the bonds, Logwin's credit measures should improve, with the pro forma ratio of adjusted funds from operations to debt rising to about 23%, from 19.3% currently, and the ratio of adjusted debt to EBITDA down to 5.2x from the current 6.1x. S&P calculate these pro forma ratios using Standard & Poor's-adjusted ratios as of Sept. 30, 2010, further adjusting them for EUR40 million of debt repayment. The adjustments for the remaining EUR25 million used to repay debt are already incorporated as part of S&P's surplus cash adjustment. In S&P's view, continued recovery of the global economy and associated trading volumes will enable Logwin to maintain its current level of operating profits over the near term. S&P also factor in that the gains from improved profitability and lower interest costs will be partially offset by higher capital expenditures following the minimal spending levels achieved through the economic crisis. S&P could consider a higher rating if there were to be a material improvement in Logwin's consolidated operating profits, and a sustained upward trend in FOCF generation. Equally, S&P could consider a negative rating action if an unexpected deterioration in market conditions were to lead to a material weakening in Logwin's cash flows and liquidity position. ORANGE SA: Mobistar Conditionally Waives EUR30 Million Debt ----------------------------------------------------------- Mobistar has decided to conditionally waive a debt of EUR30 million owed by his subsidiary Orange S.A. in Luxembourg. Mobistar has also reversed certain provisions on the investment deduction for sustainable investments. The two decisions result in a decrease in tax costs and a EUR14 million improvement of the consolidated net result for 2010. The most recent guidance for the consolidated net result does not take this positive impact into account. Finally, Mobistar's Board of Directors has approved the re-financing of the long-term credit facility for an amount of EUR450 million. In order to optimize the balance sheet structure of his subsidiary Orange S.A. in Luxembourg, Mobistar has decided to conditionally waive the debt of EUR30 million owed by Orange S.A. This decision follows a positive opinion of the "Dienst Voorafgaande Beslissingen in fiscale zaken / Service des Decisions Anticipees en matiere fiscale". This debt waiver results in an extraordinary write-off for Mobistar S.A. and an extraordinary result for Orange S.A. (Luxembourg). Thanks to this rearrangement, Mobistar's subsidiary in Luxembourg strengthens its balance sheet structure and can move ahead with its growth strategy. Mobistar also reversed certain provisions on the investment deduction for sustainable investments, since it obtained the necessary tax certificates for the financial years 2007, 2008 and 2009. Both elements increase the consolidated net profit by EUR14 million for the financial year 2010 by lowering the consolidated tax cost. This positive impact was not taken into consideration in the consolidated net result guidance (between EUR225 and EUR245 million) as presented with the half-year results in July 2010. Mobistar's Board of Directors has also approved the re-financing of one of its credit facilities, with expiry date of December 31, 2010. The new credit facility, with expiry date of December 31, 2015, amounts to EUR450 million with an interest rate of EURIBOR + 65 Bps. The agreement strengthens the long-term financing of Mobistar's growth activities. Mobistar (euronext brussels:MOBB), one of the main players on the Belgian and Luxembourg telecommunications market, is active in mobile and landline telecommunications, ADSL and other markets with high growth potential. The company develops innovative products and services for the residential and professional markets. Mobistar is quoted on the Brussels Stock Exchange and is part of the France Telecom group. ===================== N E T H E R L A N D S ===================== CANDIDE FINANCING: Moody's Reviews Ba3 (sf)-Rated EUR5MM Notes -------------------------------------------------------------- Moody's Investors Service has placed under review for possible upgrade these four classes of notes issued by these Dutch RMBS transaction: -- Stichting Eleven Cities 3 B.V.: Classes B, C, D and E The review was prompted by the better-than-expected performance of the collateral backing the notes as well as credit enhancement build-up since closing. Moody's expects to conclude its rating review within six months. Also Moody's Investors Service has placed under review for possible downgrade these seven classes of notes issued by these Dutch RMBS transactions: -- Holland Mortgage Backed Series (HERMES) XIII B.V.: Class E -- Holland Mortgage Backed Series (HERMES) XIV B.V.: Classes C, D and E -- Candide Financing 2006 B.V.: Class E -- European Mortgage Securities VII B.V. Compartment 2007-I: Classes E and F Moody's Investors Service has updated loss assumptions in the 8 Dutch RMBS transactions listed below (the affected transactions) and has taken no rating action, in consideration of the sufficient levels of credit enhancement currently available in the structures. -- Saecure 4 B.V. -- Saecure 5 B.V. -- Candide Financing 2005 B.V. -- Holland Mortgage Backed Series (HERMES) VIII B.V. -- Holland Mortgage Backed Series (HERMES) IX B.V. -- Holland Mortgage Backed Series (HERMES) X B.V -- Holland Mortgage Backed Series (HERMES) XI B.V. -- Holland Mortgage Backed Series (HERMES) XII B.V Moody's has increased its lifetime loss assumption in the affected transactions, as the performance of the underlying mortgage portfolios to date has been worse than previously assumed. The lifetime loss and the MILAN Aaa credit enhancement are the key parameters used by Moody's to calibrate its loss distribution curve, which is one of the core inputs in Moody's cash-flow model. The review of Stichting Eleven Cities 3, Hermes XIII, Hermes XIV, Candide Financing 2006, and European Mortgage Securities VII B.V. Compartment 2007-I and the update of the loss assumptions in the affected transactions follows a portfolio review of the performance of 101 Moody's rated non-master trust Dutch RMBS transactions (including NHG and synthetic transactions). The list of transactions included in the portfolio review can be found under this link Moody's has also factored into its analysis the stable outlook for Dutch RMBS. The sector outlook reflects these expectations of key macro-economic indicators: GDP to increase by 1.8% in 2010 and by 1.4% in 2011, unemployment to rise to approximately 5.6% in 2010 from 4.8% in 2009 before falling to 5.3% in 2011, house prices to remain relatively flat over the next year. For transaction specific performance, please refer to Moody's Performance Overviews available on www.moodys.com. Transaction Overviews -- Stichting Eleven Cities 3 B.V. closed in June 2007. Loans more than 90 days in arrears correspond to 0.42% of the current portfolio balance, while cumulative losses amount to 0.01% of the original portfolio balance. The transaction has a current pool factor of 70%. The credit enhancement of Class B notes has increased to 9.38% from 6.52% at closing, of class C note to 6.48% from 4.51%, of class D note to 3.60% from 2.51 and of class E note to 1.44% from 1.01% at closing. -- Holland Mortgage Backed Series (HERMES) XIII B.V. closed in March 2007. Loans more than 90 days in arrears correspond to 1.08% of the current portfolio balance, while cumulative losses amount 0.15% of the original portfolio balance (inc. replenishments if applicable). -- Holland Mortgage Backed Series (HERMES) XIV B.V closed in September 2007. Loans more than 90 days in arrears correspond to 1.22% of the current portfolio balance, while cumulative losses amount to 0.10% of the original portfolio balance (inc. replenishments if applicable). -- Candide Financing 2006 B.V. closed in November 2006. Loans more than 90 days in arrears correspond to 0.75% of the current portfolio balance, while cumulative losses amount to 0.18% of the original portfolio balance (inc. replenishments if applicable). -- European Mortgage Securities VII B.V. Compartment 2007-I closed in August 2007. Loans more than 90 days in arrears correspond to 1.45% of the current portfolio balance, while cumulative losses amount to 0.07% of the original portfolio balance (inc. replenishments if applicable). -- Saecure 4 B.V. closed in June 2004. Loans more than 90 days in arrears correspond to 1.04% of the current portfolio balance, while cumulative losses amount to 0.31% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.70% of the original portfolio balance and it has maintained its Milan AaaCE at 8.00% of the current portfolio balance. -- Saecure 5 B.V. closed in April 2005. Loans more than 90 days in arrears correspond to 0.81% of the current portfolio balance, while cumulative losses amount to 0.24% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.70% of the original portfolio balance and it has maintained its Milan AaaCE at 6.79% of the current portfolio balance. -- Candide Financing 2005 B.V. closed in May 2005. Loans more than 90 days in arrears correspond to 0.74% of the current portfolio balance, while cumulative losses amount to 0.28% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.70% of the original portfolio balance and it has maintained its Milan AaaCE at 7.75% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) VIII B.V. closed in June 2004. Loans more than 90 days in arrears correspond to 1.97% of the current portfolio balance, while cumulative losses amount to 0.75% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% of the original portfolio balance and it has maintained its Milan AaaCE at 7.00% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) IX B.V. closed in February 2005. Loans more than 90 days in arrears correspond to 1.63% of the current portfolio balance, while cumulative losses amount to 0.58% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% of the original portfolio balance and it has maintained its Milan AaaCE at 6.42% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) X B.V closed in September 2005. Loans more than 90 days in arrears correspond to 1.46% of the current portfolio balance, while cumulative losses amount to 0.58% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% at closing of the original portfolio balance and it has maintained its Milan AaaCE at 6.59% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) XI B.V. closed in February 2006. Loans more than 90 days in arrears correspond to 1.27% of the current portfolio balance, while cumulative losses amount to 0.49% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% of the original portfolio balance and it has maintained its Milan AaaCE at 6.54% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) XII B.V closed in October 2006. Loans more than 90 days in arrears correspond to 0.85% of the current portfolio balance, while cumulative losses amount to 0.21% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% of the original portfolio balance and it has maintained its Milan AaaCE at 6.00% of the current portfolio balance. Review Process In identifying the affected transactions, Moody's conducted a portfolio review of 101 Moody's rated non-master trust Dutch RMBS transactions. The list of transactions included in the portfolio review can be found under this link. During the analysis, the rating agency took into account the performance of the collateral to date, its deviation from Moody's expectations as well as the levels of credit enhancement available to absorb the future projected losses on the respective portfolios. Within the Dutch RMBS sector the mortgage portfolios in the 8 affected transactions have shown a deviation from Moody's performance expectations. After taking into account the level of credit enhancement in each structure, Moody's has taken no rating action on the affected transactions due to the current level of credit enhancement sufficiently supporting the current ratings of the notes. The full review of the ratings of class E in Hermes XIII, classes C, D, and E in Hermes XIV, class E in Candide Financing 2006, classes E and F in European Mortgage Securities VII B.V. Compartment 2007-I, and classes B, C, D and E in Stichting Eleven Cities 3 will take into account the current capital structure of the transactions. As part of its detailed transaction review, Moody's will reassess its lifetime loss expectation reflecting the collateral performance to date as well as the future macro- economic environment. Moody's will also request updated loan-by- loan information to revise its MILAN Aaa credit enhancement. Loan-by-loan information will also allow Moody's to validate its assumptions with regards to which loans have a higher default propensity. The lifetime loss and the MILAN Aaa credit enhancement are the key parameters used by Moody's to calibrate its loss distribution curve, which is one of the core inputs in Moody's cash-flow model. List of Affected Notes Issuer: Candide Financing 2006 B.V. -- EUR5M E Certificate, Ba3 (sf) Placed Under Review for Possible Downgrade; previously on Nov 17, 2006 Definitive Rating Assigned Ba3 (sf) Issuer: European Mortgage Securities VII B.V. Compartment 2007-I -- EUR24.5M E Certificate, Baa1 (sf) Placed Under Review for Possible Downgrade; previously on Aug 31, 2007 Assigned Baa1 (sf) -- EUR38.55M F Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Aug 31, 2007 Assigned Baa3 (sf) Issuer: Holland Mortgage Backed Series (Hermes) XIII B.V. -- EUR36.4M E Certificate, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Mar 29, 2007 Definitive Rating Assigned Ba2 (sf) Issuer: HOLLAND MORTGAGE BACKED SERIES (HERMES) XIV B.V. -- EUR54M C Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on Sep 28, 2007 Definitive Rating Assigned A1 (sf) -- EUR14M D Certificate, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 28, 2007 Definitive Rating Assigned Baa2 (sf) -- EUR18M E Certificate, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 28, 2007 Definitive Rating Assigned Ba2 (sf) Issuer: Stichting Eleven Cities No. 3 -- EUR18.6M B Certificate, Aa2 (sf) Placed Under Review for Possible Upgrade; previously on Jun 7, 2007 Definitive Rating Assigned Aa2 (sf) -- EUR18.5M C Certificate, A1 (sf) Placed Under Review for Possible Upgrade; previously on Jun 7, 2007 Definitive Rating Assigned A1 (sf) -- EUR8.4M D Certificate, Baa1 (sf) Placed Under Review for Possible Upgrade; previously on Jun 7, 2007 Definitive Rating Assigned Baa1 (sf) -- EUR5.5M E Certificate, Baa3 (sf) Placed Under Review for Possible Upgrade; previously on Jun 7, 2007 Definitive Rating Assigned Baa3 (sf) Moody's ratings address the expected loss posed to investors by the legal final maturity of the notes. Moody's ratings address only the credit risks associated with the transactions. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. Moody's will continue to monitor closely the above transactions. Moody's Investors Service did not receive or take into account a third party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months. The ratings have been disclosed to the rated entity or its designated agents and issued with no amendment resulting from that disclosure. Information sources used to prepare the credit ratings are these: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purpose of maintaining a credit rating. Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. HOLLAND MORTGAGE: Moody's Reviews Ba2 (sf)-Rated EUR18MM Notes -------------------------------------------------------------- Moody's Investors Service has placed under review for possible upgrade these four classes of notes issued by these Dutch RMBS transaction: -- Stichting Eleven Cities 3 B.V.: Classes B, C, D and E The review was prompted by the better-than-expected performance of the collateral backing the notes as well as credit enhancement build-up since closing. Moody's expects to conclude its rating review within six months. Also Moody's Investors Service has placed under review for possible downgrade these seven classes of notes issued by these Dutch RMBS transactions: -- Holland Mortgage Backed Series (HERMES) XIII B.V.: Class E -- Holland Mortgage Backed Series (HERMES) XIV B.V.: Classes C, D and E -- Candide Financing 2006 B.V.: Class E -- European Mortgage Securities VII B.V. Compartment 2007-I: Classes E and F Moody's Investors Service has updated loss assumptions in the 8 Dutch RMBS transactions listed below (the affected transactions) and has taken no rating action, in consideration of the sufficient levels of credit enhancement currently available in the structures. -- Saecure 4 B.V. -- Saecure 5 B.V. -- Candide Financing 2005 B.V. -- Holland Mortgage Backed Series (HERMES) VIII B.V. -- Holland Mortgage Backed Series (HERMES) IX B.V. -- Holland Mortgage Backed Series (HERMES) X B.V -- Holland Mortgage Backed Series (HERMES) XI B.V. -- Holland Mortgage Backed Series (HERMES) XII B.V Moody's has increased its lifetime loss assumption in the affected transactions, as the performance of the underlying mortgage portfolios to date has been worse than previously assumed. The lifetime loss and the MILAN Aaa credit enhancement are the key parameters used by Moody's to calibrate its loss distribution curve, which is one of the core inputs in Moody's cash-flow model. The review of Stichting Eleven Cities 3, Hermes XIII, Hermes XIV, Candide Financing 2006, and European Mortgage Securities VII B.V. Compartment 2007-I and the update of the loss assumptions in the affected transactions follows a portfolio review of the performance of 101 Moody's rated non-master trust Dutch RMBS transactions (including NHG and synthetic transactions). The list of transactions included in the portfolio review can be found under this link Moody's has also factored into its analysis the stable outlook for Dutch RMBS. The sector outlook reflects these expectations of key macro-economic indicators: GDP to increase by 1.8% in 2010 and by 1.4% in 2011, unemployment to rise to approximately 5.6% in 2010 from 4.8% in 2009 before falling to 5.3% in 2011, house prices to remain relatively flat over the next year. For transaction specific performance, please refer to Moody's Performance Overviews available on www.moodys.com. Transaction Overviews -- Stichting Eleven Cities 3 B.V. closed in June 2007. Loans more than 90 days in arrears correspond to 0.42% of the current portfolio balance, while cumulative losses amount to 0.01% of the original portfolio balance. The transaction has a current pool factor of 70%. The credit enhancement of Class B notes has increased to 9.38% from 6.52% at closing, of class C note to 6.48% from 4.51%, of class D note to 3.60% from 2.51 and of class E note to 1.44% from 1.01% at closing. -- Holland Mortgage Backed Series (HERMES) XIII B.V. closed in March 2007. Loans more than 90 days in arrears correspond to 1.08% of the current portfolio balance, while cumulative losses amount 0.15% of the original portfolio balance (inc. replenishments if applicable). -- Holland Mortgage Backed Series (HERMES) XIV B.V closed in September 2007. Loans more than 90 days in arrears correspond to 1.22% of the current portfolio balance, while cumulative losses amount to 0.10% of the original portfolio balance (inc. replenishments if applicable). -- Candide Financing 2006 B.V. closed in November 2006. Loans more than 90 days in arrears correspond to 0.75% of the current portfolio balance, while cumulative losses amount to 0.18% of the original portfolio balance (inc. replenishments if applicable). -- European Mortgage Securities VII B.V. Compartment 2007-I closed in August 2007. Loans more than 90 days in arrears correspond to 1.45% of the current portfolio balance, while cumulative losses amount to 0.07% of the original portfolio balance (inc. replenishments if applicable). -- Saecure 4 B.V. closed in June 2004. Loans more than 90 days in arrears correspond to 1.04% of the current portfolio balance, while cumulative losses amount to 0.31% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.70% of the original portfolio balance and it has maintained its Milan AaaCE at 8.00% of the current portfolio balance. -- Saecure 5 B.V. closed in April 2005. Loans more than 90 days in arrears correspond to 0.81% of the current portfolio balance, while cumulative losses amount to 0.24% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.70% of the original portfolio balance and it has maintained its Milan AaaCE at 6.79% of the current portfolio balance. -- Candide Financing 2005 B.V. closed in May 2005. Loans more than 90 days in arrears correspond to 0.74% of the current portfolio balance, while cumulative losses amount to 0.28% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.70% of the original portfolio balance and it has maintained its Milan AaaCE at 7.75% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) VIII B.V. closed in June 2004. Loans more than 90 days in arrears correspond to 1.97% of the current portfolio balance, while cumulative losses amount to 0.75% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% of the original portfolio balance and it has maintained its Milan AaaCE at 7.00% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) IX B.V. closed in February 2005. Loans more than 90 days in arrears correspond to 1.63% of the current portfolio balance, while cumulative losses amount to 0.58% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% of the original portfolio balance and it has maintained its Milan AaaCE at 6.42% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) X B.V closed in September 2005. Loans more than 90 days in arrears correspond to 1.46% of the current portfolio balance, while cumulative losses amount to 0.58% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% at closing of the original portfolio balance and it has maintained its Milan AaaCE at 6.59% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) XI B.V. closed in February 2006. Loans more than 90 days in arrears correspond to 1.27% of the current portfolio balance, while cumulative losses amount to 0.49% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% of the original portfolio balance and it has maintained its Milan AaaCE at 6.54% of the current portfolio balance. -- Holland Mortgage Backed Series (HERMES) XII B.V closed in October 2006. Loans more than 90 days in arrears correspond to 0.85% of the current portfolio balance, while cumulative losses amount to 0.21% of the original portfolio balance (inc. replenishments if applicable). Taking into account the performance of the underlying mortgage portfolio to date, Moody's has increased its lifetime loss expectations to 0.90% of the original portfolio balance and it has maintained its Milan AaaCE at 6.00% of the current portfolio balance. Review Process In identifying the affected transactions, Moody's conducted a portfolio review of 101 Moody's rated non-master trust Dutch RMBS transactions. The list of transactions included in the portfolio review can be found under this link. During the analysis, the rating agency took into account the performance of the collateral to date, its deviation from Moody's expectations as well as the levels of credit enhancement available to absorb the future projected losses on the respective portfolios. Within the Dutch RMBS sector the mortgage portfolios in the 8 affected transactions have shown a deviation from Moody's performance expectations. After taking into account the level of credit enhancement in each structure, Moody's has taken no rating action on the affected transactions due to the current level of credit enhancement sufficiently supporting the current ratings of the notes. The full review of the ratings of class E in Hermes XIII, classes C, D, and E in Hermes XIV, class E in Candide Financing 2006, classes E and F in European Mortgage Securities VII B.V. Compartment 2007-I, and classes B, C, D and E in Stichting Eleven Cities 3 will take into account the current capital structure of the transactions. As part of its detailed transaction review, Moody's will reassess its lifetime loss expectation reflecting the collateral performance to date as well as the future macro- economic environment. Moody's will also request updated loan-by- loan information to revise its MILAN Aaa credit enhancement. Loan-by-loan information will also allow Moody's to validate its assumptions with regards to which loans have a higher default propensity. The lifetime loss and the MILAN Aaa credit enhancement are the key parameters used by Moody's to calibrate its loss distribution curve, which is one of the core inputs in Moody's cash-flow model. List of Affected Notes Issuer: Candide Financing 2006 B.V. -- EUR5M E Certificate, Ba3 (sf) Placed Under Review for Possible Downgrade; previously on Nov 17, 2006 Definitive Rating Assigned Ba3 (sf) Issuer: European Mortgage Securities VII B.V. Compartment 2007-I -- EUR24.5M E Certificate, Baa1 (sf) Placed Under Review for Possible Downgrade; previously on Aug 31, 2007 Assigned Baa1 (sf) -- EUR38.55M F Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Aug 31, 2007 Assigned Baa3 (sf) Issuer: Holland Mortgage Backed Series (Hermes) XIII B.V. -- EUR36.4M E Certificate, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Mar 29, 2007 Definitive Rating Assigned Ba2 (sf) Issuer: HOLLAND MORTGAGE BACKED SERIES (HERMES) XIV B.V. -- EUR54M C Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on Sep 28, 2007 Definitive Rating Assigned A1 (sf) -- EUR14M D Certificate, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 28, 2007 Definitive Rating Assigned Baa2 (sf) -- EUR18M E Certificate, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 28, 2007 Definitive Rating Assigned Ba2 (sf) Issuer: Stichting Eleven Cities No. 3 -- EUR18.6M B Certificate, Aa2 (sf) Placed Under Review for Possible Upgrade; previously on Jun 7, 2007 Definitive Rating Assigned Aa2 (sf) -- EUR18.5M C Certificate, A1 (sf) Placed Under Review for Possible Upgrade; previously on Jun 7, 2007 Definitive Rating Assigned A1 (sf) -- EUR8.4M D Certificate, Baa1 (sf) Placed Under Review for Possible Upgrade; previously on Jun 7, 2007 Definitive Rating Assigned Baa1 (sf) -- EUR5.5M E Certificate, Baa3 (sf) Placed Under Review for Possible Upgrade; previously on Jun 7, 2007 Definitive Rating Assigned Baa3 (sf) Moody's ratings address the expected loss posed to investors by the legal final maturity of the notes. Moody's ratings address only the credit risks associated with the transactions. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. Moody's will continue to monitor closely the above transactions. Moody's Investors Service did not receive or take into account a third party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months. The ratings have been disclosed to the rated entity or its designated agents and issued with no amendment resulting from that disclosure. Information sources used to prepare the credit ratings are these: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purpose of maintaining a credit rating. Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. LANCELOT 2006: Fitch Downgrades Rating on Class E Notes to 'Bsf' ---------------------------------------------------------------- Fitch Ratings has upgraded Lancelot 2006 B.V.'s class B and C notes, affirmed the class A and D notes and downgraded the class E notes. The rating actions are: -- EUR279.8m Class A (XS0275569225) affirmed at 'AAAsf'; Outlook Stable -- EUR21.0m Class B (XS0275579703) upgraded to 'AAAsf' from 'AAsf'; Outlook Stable -- EUR19.5m Class C (XS0275581279) upgraded to 'AAsf' from 'Asf'; Outlook Stable -- EUR19.5m Class D (XS0275581949) affirmed at 'BBBsf'; Outlook Stable -- EUR12.0m Class E (XS0275582590) downgraded to 'Bsf' from 'BBsf'; Outlook Stable The upgrades were driven by the high level of redemptions, which means the portfolio has shrunk to EUR351.8 million (208 loans) from EUR600.0 million (356 loans) at closing in December 2006. The combination of scheduled amortization and partial redemptions (EUR125.2 million), full redemptions (EUR111.6 million) and loan repurchases (EUR11.4 million) has resulted in an average constant prepayment rate of 14% since closing. The downgrade of the class E notes was driven by continuing uncertainty about Dutch commercial real estate market values, combined with the high loan-to-value ratios of some of the larger loans in the portfolio. Information on the value of the collateral supporting the loans has not been updated since closing, but approximately 13% of the portfolio currently report LTVs of 72% and above. As all principal funds are allocated to the notes on a fully sequential basis, the high level of redemptions has resulted in a significant improvement in credit enhancement. This has been further helped by the reserve fund having reached its target amount of EUR4.2 million. The class A notes, in particular, have seen an improvement in credit enhancement to 21.4% from 12.0% since closing. The credit metrics of the collateral pool remain strong. Arrears, defaults and losses have all been reported at 0% since closing, while overdrafts have never gone above 1% of the pool balance. The weighted-average LTV ratio has decreased to 50.9% from 57.9% since closing. While it is unclear whether this is due to amortization, improving values, or a combination of the two, Fitch expects scheduled amortization (less than one-third of loans are interest-only) to continue to decrease leverage. Finally, the long WA remaining loan term of 15.9 years (less than 5% of the pool is scheduled to mature in the next three years) insulates the transaction from current market conditions. Fitch will continue to monitor the performance of the transaction. LYONDELL CHEMICAL: Says Interplastic Refuses to Pay US$2 Million ---------------------------------------------------------------- Lyondell Chemical Co. has accused Interplastic Corp. of unlawfully refusing to pay US$2 million in debt the newly solvent company claims it is owed under contracts forged prior to its January 2009 bankruptcy filing, according to Bankruptcy Law360. LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. Luxembourg-based Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. Len Blavatnik's Access Industries owned the Company prior to its bankruptcy filing. On January 6, 2009, LyondellBasell Industries' U.S. operations, led by Lyondell Chemical Co., and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities filed for Chapter 11. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, served as the Debtors' bankruptcy counsel. Evercore Partners served as financial advisors, and AlixPartners and its subsidiary AP Services LLC, served as restructuring advisors. AlixPartners' Kevin M. McShea acted as the Debtors' Chief Restructuring Officer. Clifford Chance LLP served as restructuring advisors to the European entities. LyondellBasell emerged from Chapter 11 bankruptcy protection in May 2010, with a plan that provides the Company with US$3 billion of opening liquidity. A new parent company, LyondellBasell Industries N.V., incorporated in the Netherlands, is the successor of the former parent company, LyondellBasell Industries AF S.C.A., a Luxembourg company that is no longer part of LyondellBasell. LyondellBasell Industries N.V. owns and operates substantially the same businesses as the previous parent company, including subsidiaries that were not involved in the bankruptcy cases. LyondellBasell's corporate seat is Rotterdam, Netherlands, with administrative offices in Houston and Rotterdam. PANGAEA ABS: S&P Affirms Rating on Class D Notes at 'B (sf)' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its credit rating on PANGAEA ABS 2007-1 B.V.'s class A notes. At the same time, S&P affirmed its ratings on the class B, C, and D notes. The rating actions follow the application of S&P's updated criteria for corporate CDOs to the portion of the pool that comprises leveraged loan-based CDO assets. S&P's rating actions also incorporate its assessment of the credit performance in the transaction portfolio, and a cash flow analysis incorporating all the assets in the portfolio. S&P has observed an increase in the scenario default rates for this transaction, due in part to the application of its corporate CDO criteria, and an increase in 'CCC' rated assets in the portfolio. S&P has also subjected the capital structure to a cash flow analysis to determine the break-even default rate for each rated class of notes. In this analysis, S&P used the reported portfolio balance, weighted-average spread, and weighted-average recovery rates. S&P incorporated various cash flow stress scenarios using alternative default patterns, levels, and timing for each liability rating category (i.e., 'AAA', 'AA', and 'BBB'), in conjunction with different interest stress scenarios. From this analysis, S&P obtained BDRs for each rated class of notes. In its opinion, while the class A notes have paid down, the increase in the SDRs is no longer commensurate with the rating previously assigned to the class A notes. S&P has therefore lowered the rating on the class A notes to 'AA- (sf)' from 'AA (sf)'. S&P is of the view that the existing credit enhancement in this transaction is commensurate with the current ratings on the class B, C, and D notes. As a result, S&P has affirmed its ratings on these classes. PANGAEA 2007-1 ABS CDO is a cash flow collateralized debt obligation of European structured finance assets, involving largely commercial mortgage-backed securities, leveraged loan- based CDO assets, residential mortgage-backed securities, and consumer asset-backed securities. It closed in March 2007. Ratings List PANGAEA ABS 2007-1 B.V. EUR309.2 Million Asset-Backed Floating-Rate Notes Rating Lowered Rating ------ Class To From ----- -- ---- A AA- (sf) AA (sf) Ratings Affirmed Class Rating ----- ------ B A (sf) C BBB (sf) D B (sf) =============== P O R T U G A L =============== * Moody's Reviews Ratings on 25 Portuguese SF Transactions ---------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade the ratings of notes of 25 Portuguese structured finance transactions. Ratings under review include the Aaa (sf) ratings on two RMBS, the ratings of most of the mezzanine and junior notes in 21 other RMBS transactions, and the ratings of six notes in four ABS transactions. Moody's provides the detailed list of the rating actions at the end of this press release. The rating actions reflect Moody's expectation of further asset performance deterioration, because of the uncertainties around Portugal's longer-term economic vitality. On 21 December 2010, Moody's placed on review for possible downgrade Portugal's A1 rating, citing Portugal's sluggish growth, downward pressure on GDP growth, heightened funding costs and the financial impact of support to the banking sector. The vulnerability of the Portuguese financial sector to continued loss of funding and higher impairments is another important factor in the rating actions for transactions that lacked strong features to mitigate operational risk. On 21 December 2010, Moody's widened the review of Portuguese bank ratings announced on 9 December, which now extends to all rated Portuguese banks. On June 22, 2010, Moody's placed on review for possible downgrade Aaa (sf) and Aa (sf) ratings in 23 Portuguese RMBS and three Portuguese ABS, having placed Portugal's rating on review for possible downgrade in May. At that time, the review of the RMBS and ABS focused on the resilience of these notes to extreme loss scenarios in the context of a sovereign and banking crisis. The notes in these 26 transactions, as well as in the additional 2 RMBS and 2 ABS transactions only affected by the action, will remain on review for possible downgrade until Moody's has concluded its review of the Portuguese government and bank ratings. Moody's notes that Aaa (sf) rated notes in 2 Portuguese RMBS and 4 ABS transactions are not currently on review. In these transactions, the credit quality of the assets, the credit enhancement supporting the notes and the level of operational risk remain consistent with Moody's highest ratings. However, sovereign or bank rating downgrades that exceed Moody's current expectation would put increased pressure on all Portuguese structured finance ratings. Key Factors Considered in the Review Asset Pool Performance Despite the more stable performance of Portuguese RMBS recently, Moody's expects increasing delinquencies and losses going forward. "The performance of the outstanding 29 Portuguese RMBS transactions has stabilized in recent months, and average 60-plus delinquencies have remained at 1.4% since July 2010" says Maria Turbica, an Analyst at Moody's. Average outstanding defaults have also stabilized around 1.7%. However, "Moody's anticipates further deterioration of RMBS asset performance in the context of its forecast for very weak economic growth for Portugal in the next two years and as a consequence of fiscal tightening policy" adds Mrs. Turbica. In addition, house prices have resumed falling in the second half of 2010, dropping 1.3% year-on-year in October 2010. Moody's analysis will reflect its expectation of the increased delinquencies and losses. Moody's will re-assess its life-time loss assumptions for the outstanding RMBS transactions, which it expects will mostly affect mezzanine and junior notes. Moody's has not placed on review the A2 (sf) rated note in Pelican Mortgages No.1 PLC because its high credit enhancement is sufficient to withstand significantly higher than expected losses. "We expect performance of ABS transactions to deteriorate in the context of weakening macro-economic conditions and implementation of austerity measures", explains Ariel Weil, a Vice President- Senior Analyst at Moody's. Comparing the current credit enhancement levels in all the Portuguese transactions it rates to their current and anticipated future performance, Moody's placed on review for possible downgrade the Class C and D notes of Nova Finance No. 4 and the most senior outstanding tranche in Chaves SME CLO 1. "We did not place on review ABS notes that have credit enhancement levels sufficient to protect against Moody's anticipated deterioration in asset performance" says Mr. Weil. Operational Risks Following the review for possible downgrade of all Portuguese bank ratings, key factors in the review of the ABS and RMBS include operational risk and whether structural features in the transactions mitigate this risk. In its analysis, Moody's will assess the linkage of the notes to the servicer's credit quality. Rating reviews on two banks have resulted in actions on the RMBS transactions that they service. The review of the senior note ratings in Azor Mortgage Public Limited Company and Pelican Mortgage No.1 PLC follows the review for downgrade of their respective servicers, BANIF- Banco Internacional do Funchal, S.A. (Baa3/P-3) and Caixa Economica Montepio Geral (Baa3/P-3). There are currently no mitigants in place to counter the operational risk in these transactions, such as a back-up servicer or a back- up servicer trigger, and therefore payment disruptions could occur. For two ABS transactions, the rating review reflects the operational risk associated with the unrated servicers. The review of the Aa3 (sf) rated notes in the LTR Finance No. 6 and 8 transactions and the A1 (sf) rated notes in LTR 8 reflects weaknesses in the operational risk mitigating structural features. Moody's already downgraded the senior notes of the LTR transactions in May 2010 to reflect operational risk concerns. The review reflects the weakening of the banking sector in Portugal for both rated and unrated financial institutions. Moody's has not placed the ratings of the senior notes of LTR 5 on review because the rating agency expects the issuer to fully redeem the notes within the next three months based on their recent pace of amortization. Moody's will conclude its review of Portuguese structured finance transactions after it concludes its review of the ratings of the Portuguese government bonds and Portuguese banks. Detailed rating actions ABS Issuer: Chaves SME CLO No. 1 -- A Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on Jul 9, 2009 Downgraded to A1 (sf) Issuer: NOVA Finance No. 4 Limited -- C Certificate, A2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 21, 2007 Assigned A2 (sf) -- D Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Dec 21, 2007 Assigned Baa3 (sf) Issuer: LTR Finance No. 6 plc -- A Notes, Aa3 (sf) Placed Under Review for Possible Downgrade; previously on May 7, 2010 Downgraded to Aa3 (sf) Issuer: LTR Finance No. 8 Limited -- Senior Facility Certificate, Aa3 (sf) Placed Under Review for Possible Downgrade; previously on May 7, 2010 Downgraded to Aa3 (sf) -- Mezzanine Facility Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on May 7, 2010 Confirmed at A1 (sf) RMBS Issuer: Atlantes Mortgage No. 1 PLC -- B, A2 (sf) Placed Under Review for Possible Downgrade; previously on Feb 19, 2003 Definitive Rating Assigned A2 (sf) -- C, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Feb 19, 2003 Definitive Rating Assigned Baa3 (sf) -- D, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Feb 19, 2003 Definitive Rating Assigned Ba2 (sf) Issuer: Azor Mortgages Public Limited Company -- A, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Nov 25, 2004 Definitive Rating Assigned Aaa (sf) -- B, Aa2 (sf) Placed Under Review for Possible Downgrade; previously on Nov 25, 2004 Definitive Rating Assigned Aa2 (sf) -- C, Baa1 (sf) Placed Under Review for Possible Downgrade; previously on Nov 25, 2004 Definitive Rating Assigned Baa1 (sf) Issuer: Douro Mortgages No. 1 Notes -- C, A1 (sf) Placed Under Review for Possible Downgrade; previously on Nov 23, 2005 Definitive Rating Assigned A1 (sf) -- D, Baa1 (sf) Placed Under Review for Possible Downgrade; previously on Nov 23, 2005 Definitive Rating Assigned Baa1 (sf) Issuer: DOURO MORTGAGES No. 2 -- C, A2 (sf) Placed Under Review for Possible Downgrade; previously on Oct 3, 2006 Definitive Rating Assigned A2 (sf) -- D, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Oct 3, 2006 Definitive Rating Assigned Baa2 (sf) Issuer: HIPOTOTTA No 5 plc -- C, A1 (sf) Placed Under Review for Possible Downgrade; previously on Mar 23, 2007 Definitive Rating Assigned A1 (sf) -- D, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Mar 23, 2007 Definitive Rating Assigned Baa2 (sf) -- E, Ba3 (sf) Placed Under Review for Possible Downgrade; previously on Mar 23, 2007 Definitive Rating Assigned Ba3 (sf) Issuer: HIPOTOTTA No. 10 LIMITED -- C, A3 (sf) Placed Under Review for Possible Downgrade; previously on Aug 5, 2009 Assigned A3 (sf) -- D, Ba1 (sf) Placed Under Review for Possible Downgrade; previously on Aug 5, 2009 Assigned Ba1 (sf) -- E, B1 (sf) Placed Under Review for Possible Downgrade; previously on Aug 5, 2009 Assigned B1 (sf) Issuer: Hipototta No. 8 Limited -- C, A2 (sf) Placed Under Review for Possible Downgrade; previously on Jul 28, 2008 Assigned A2 (sf) -- D, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Jul 28, 2008 Assigned Baa2 (sf) -- E, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Jul 28, 2008 Assigned Ba2 (sf) Issuer: Hipototta No.7 Limited -- C, A2 (sf) Placed Under Review for Possible Downgrade; previously on Mar 10, 2008 Assigned A2 (sf) -- D, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Mar 10, 2008 Assigned Baa2 (sf) -- E, B1 (sf) Placed Under Review for Possible Downgrade; previously on Mar 10, 2008 Assigned B1 (sf) Issuer: HIPOTOTTA No1. PLC -- B, A1 (sf) Placed Under Review for Possible Downgrade; previously on Aug 5, 2003 Assigned A1 (sf) -- C, Baa1 (sf) Placed Under Review for Possible Downgrade; previously on Aug 5, 2003 Assigned Baa1 (sf) Issuer: Lusitano Mortgages No. 1 PLC -- C, A2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 16, 2002 Definitive Rating Assigned A2 (sf) -- D, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 16, 2002 Definitive Rating Assigned Baa2 (sf) -- E, Ba1 (sf) Placed Under Review for Possible Downgrade; previously on Dec 16, 2002 Assigned Ba1 (sf) Issuer: Lusitano Mortgages No. 2 PLC -- C, A3 (sf) Placed Under Review for Possible Downgrade; previously on Nov 4, 2003 Definitive Rating Assigned A3 (sf) -- D, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Nov 4, 2003 Definitive Rating Assigned Baa3 (sf) -- E, Ba1 (sf) Placed Under Review for Possible Downgrade; previously on Nov 4, 2003 Definitive Rating Assigned Ba1 (sf) Issuer: LUSITANO MORTGAGES No. 3 PLC -- C, Baa1 (sf) Placed Under Review for Possible Downgrade; previously on Sep 29, 2008 Downgraded to Baa1 (sf) -- D, Ba3 (sf) Placed Under Review for Possible Downgrade; previously on Sep 29, 2008 Downgraded to Ba3 (sf) Issuer: Magellan Mortgages No. 1 Public Limited Company -- B, A1 (sf) Placed Under Review for Possible Downgrade; previously on Dec 19, 2001 Definitive Rating Assigned A1 (sf) -- C, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 19, 2001 Definitive Rating Assigned Baa2 (sf) Issuer: Magellan Mortgages No. 2 plc -- B, A1 (sf) Placed Under Review for Possible Downgrade; previously on Oct 27, 2003 Definitive Rating Assigned A1 (sf) -- C, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Oct 27, 2003 Definitive Rating Assigned Baa2 (sf) Issuer: Magellan Mortgages No. 3 plc -- B, A2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 11, 2009 Downgraded to A2 (sf) -- C, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 11, 2009 Downgraded to Baa2 (sf) -- D, Ba3 (sf) Placed Under Review for Possible Downgrade; previously on Sep 11, 2009 Downgraded to Ba3 (sf) Issuer: Magellan Mortgages No. 4 plc -- C, A2 (sf) Placed Under Review for Possible Downgrade; previously on Jul 18, 2006 Definitive Rating Assigned A2 (sf) -- D, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Jul 18, 2006 Definitive Rating Assigned Baa2 (sf) Issuer: Navigator Mortgage Finance No. 1 plc -- C, A2 (sf) Placed Under Review for Possible Downgrade; previously on Jun 12, 2002 Definitive Rating Assigned A2 (sf) Issuer: Nostrum Mortgages 2003-1 PLC -- B, A2 (sf) Placed Under Review for Possible Downgrade; previously on Nov 20, 2003 Definitive Rating Assigned A2 (sf) -- C, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Nov 20, 2003 Definitive Rating Assigned Baa2 (sf) Issuer: Pelican Mortgages No. 1 Plc -- A, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Dec 19, 2002 Definitive Rating Assigned Aaa (sf) -- C, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 19, 2002 Definitive Rating Assigned Baa2 (sf) Issuer: Pelican Mortgages No. 2 Plc -- B, A1 (sf) Placed Under Review for Possible Downgrade; previously on Sep 29, 2003 Definitive Rating Assigned A1 (sf) -- C, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Sep 29, 2003 Definitive Rating Assigned Baa2 (sf) Issuer: Pelican Mortgages No.3 plc -- C, A3 (sf) Placed Under Review for Possible Downgrade; previously on Mar 30, 2007 Definitive Rating Assigned A3 (sf) -- D, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Mar 30, 2007 Definitive Rating Assigned Baa3 (sf) Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. ============= R O M A N I A ============= BANCA ROMANEASCA: Fitch Puts 'BB+' Long-Term IDR on Negative Watch ------------------------------------------------------------------ Fitch Ratings has placed the Long-term Issuer Default Ratings of several subsidiaries of National Bank of Greece S.A. and EFG Eurobank Ergasias S.A. on Rating Watch Negative. The rating actions follow the placement of NBG and Eurobank's LT IDRs on RWN. The subsidiaries' IDRs are based on potential institutional support from their respective Greek parent companies. The RWN on NBG and Eurobank's subsidiaries reflects Fitch's view that while the banks' propensity to support their international banking subsidiaries remains unchanged, their ability to do so could be declining. The outcome will depend on the resolution of the RWN on the parent banks. If NBG and Eurobank's ratings are downgraded, it would likely affect the subsidiaries' ratings. The rating actions are: NBG's subsidiaries: United Bulgarian Bank -- Long-term foreign currency IDR: 'BB+' placed on RWN -- Short-term foreign currency IDR: affirmed at 'B' -- Support Rating: affirmed at '3' -- Individual Rating: unaffected at 'D'. Banca Romaneasca S.A. -- Long-term foreign currency IDR: 'BB+' placed on RWN -- Short-term foreign currency IDR: affirmed at 'B' -- Support Rating: affirmed at '3' -- Individual Rating: unaffected at 'D'. The South African Bank of Athens -- National Long-term Rating: 'BBB+' (zaf) placed on RWN -- National Short-term Rating: 'F2' (zaf) placed on RWN -- Support Rating affirmed at '3' Eurobank's subsidiaries: Eurobank EFG Bulgaria AD -- Long-term foreign currency IDR: 'BB+' placed on RWN -- Short-term foreign currency IDR: affirmed at 'B' -- Support Rating: affirmed at '3' -- Individual Rating: unaffected at 'D'. =========== R U S S I A =========== ENERGOGARANT JSIC: S&P Assigns 'BB-' Counterparty Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB-' long-term counterparty credit and insurer financial strength ratings to Russia-based Energogarant JSIC. At the same time, S&P assigned its 'ruAA-' Russia national scale rating to the company. The outlook is stable. "The ratings reflect S&P's view of high industry risks in the Russian insurance market and Energogarant's limited financial flexibility," said Standard & Poor's credit analyst Victor Nikolskiy. "These negative factors are compensated by Energogarant's modest, but established, market position and marginal capitalization." Energogarant was established in 1992 as the captive insurer of RAO EES, which was then Russia's electricity monopoly operator. During the reform of the Russian energy sector, Energogarant lost this status. However, it continued to insure risks coming from companies in the energy sector, which made up 25% of gross premiums written in 2009, while diversifying into other business lines. Energogarant is ultimately controlled by two individuals, its CEO and the head of the board of directors. With GPW of RUR2.7 billion (about US$90 million) in first-half 2010, Energogarant is ranked among the top 25 Russian insurers and has a modest market share of 1%. S&P considers Energogarant's competitive position to be supported by the company's expertise in corporate lines of business and, increasingly, personal lines. However, it is under pressure from high industry risks in Russia and a relatively small premiums base. Energogarant's operating performance is marginal, in S&P's view. Loss ratios are relatively stable, but the net expense ratio is high, due to high distribution expenses, typical for a company of Energogarant's size and existing distribution channel system. In S&P's view, Energogarant's investments are marginal, reflecting high exposure to credit and concentration risks in the Russian banking sector. With a small capital base of RUB2.4 billion (about $80 million), Energogarant's capitalization is, in S&P's view, marginal, supported by good quality reinsurance protection and conservative net retention levels. Financial flexibility, in S&P's view, is limited. Although S&P believes that the shareholders have the ability to provide Energogarant with additional financial support in times of distress, the willingness and timeliness of this support is uncertain. "The outlook is stable because S&P expects Energogarant to maintain its competitive position in corporate lines while diversifying into personal lines and maintaining at least marginal capitalization," said Mr. Nikolskiy. "This also incorporates S&P's expectation that Energogarant will continue to expand for the next three years and post combined ratios of more than 100%." S&P expects investment quality to stay at least marginal. Investment profits are likely to stay at least at current levels, fueled by increasing volumes in the investment portfolio, despite lower investment returns. Positive rating actions could follow if Energogarant's competitive position were to strengthen significantly and the company shows positive technical results, mainly owing to decreasing acquisition expenses. Conversely, significant deterioration in earnings, investment quality, and capitalization could lead to negative rating actions. NOVIKOMBANK JSCB: Moody's Assigns B2 Rating to Senior Unsec. Debt ----------------------------------------------------------------- Moody's Investors Service has assigned a B2 long-term global local currency debt rating to Novikombank's senior unsecured debt. The rating carries a stable outlook. Any subsequent senior debt issuance by NB will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. The rating of B2 was assigned to this debt instrument: * RUB2 000 M Senior Unsecured Regular Bond due 25/11/2013 Ratings Rationale The rating assigned by Moody's is in line with NB's global local currency deposit rating of B2, which is, in turn, based on the bank's E+ BFSR (mapping to a Baseline Credit Assessment of B2). The rating is constrained by (i) NB's susceptibility to political risks over the medium-to-long term; (ii) the relatively high single-name concentrations on both sides of the balance sheet; and (iii) corporate governance deficiencies. The rating is underpinned by: (i) NB's strengthening niche franchise, which benefits from NB's strategic cooperation with Russia's State Corporation "Russian Technologies"; (ii) its adequate liquidity and stable funding base; and (iii) its sufficient capitalisation and loan loss provisioning levels. Headquartered in Moscow, NB bank reported total unaudited assets of RUB44.5 billion under IFRS as at June 30, 2010. TRANSOIL LLC: Moody's Assigns 'Ba3' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service has assigned a Ba3 corporate family rating and a Ba3 probability of default rating to Transoil LLC, a Russian major rail-based oil and oil products transportation business. The rating outlook is stable. At the same time, Moody's Interfax Rating Agency, which is majority-owned by Moody's, has assigned an Aa3.ru national scale credit rating to the company. Ratings Rationale According to Moody's and Moody's Interfax, the Ba3 global scale rating reflects Moody's expectations with regard to Transoil's global default probability and loss recovery, while the Aa3.ru NSR reflects the standing of the company's credit quality relative to its domestic peers. The Ba3/Aa3.ru CFR assigned to Transoil mainly balances the high industry and client concentration risks of the company's business of a tank car operator with the advantages of its sustainable position of one of the leaders in the rail-based oil and oil products transportation segment that services Russia's strong oil industry. The rating factors in the company's strong cash generation ability, relatively low leverage measured by debt/EBITDA and cushion under most of its financial metrics, which should allow to accommodate a somewhat limited visibility of future dividend payments within the current rating. In more details the ratings positively reflect: (i) the expected sustainable demand for rail-based oil products transportation services from the domestic oil industry; (ii) Transoil's solid market position supported by its established relationships with a few large Russian oil companies, modern tank car fleet and barriers for new market entrants in terms of both client confidence and the scale of investments; (iii) manageable leverage within the current rating going forward, given the company's largely discretionary investment plans reasonably covered by its solid operating cash flow; (iv) broadly conservative financial profile and the management's commitment to cap leverage at 1.2x unadjusted debt/EBITDA. The ratings are constrained by: (i) high industry- and client concentration of Transoil's business, thus vulnerable to oil prices, developments of both the domestic oil industry and of the few oil companies; (ii) increasing competition from the new oil and oil products pipeline routes in the medium and particularly in the long run and potentially from Russian Railways' spinoff Freight One, which may pressure Transoil's transportation volumes and margins going forward; (iii) limited visibility of the company's long-term dividend policy and the risk of continued significant dividend payments that may reduce the company's financial flexibility; (iv) a relatively high Debt-to-Book- Capitalization ratio, which may be risky, if the debt were to grow, contrary to the company's current plan; (v) highly concentrated ownership of the company, which creates the risk of quick shifts in its strategy and development plans; (vi) generally higher risk and uncertainty of operating in Russia's somewhat volatile legal, regulatory and political environment. Transoil is well-positioned in the oil and oil products segment of Russia's rail-based freight transportation market. The company is a major tank car operator in Russia, the second largest, after the universal rail car fleet operator Freight One, in terms of tank car fleet size and oil and oil products transportation volumes. At the same time, Transoil's market share in terms of the transportation volumes is estimated at around 26%, which is broadly comparable to that of Freight One. Transoil benefits from the sustainable demand for its services from Russia's oil industry, with the company's business having been resilient to the recent crisis. However, the company's industry focus may limit its business growth and margins in the long run, given the competitive environment and limited growth prospects in the respective market segment, while making the company exposed to oil prices and fluctuations of the oil industry. Transoil's significant client concentration, with three domestic oil companies accounting for around 80% of its revenue, reinforces its overall concentration risk. Nevertheless the latter is viewed as manageable within the current rating, taking into account (i) the track record of the company's established relationship with its key customers, (ii) its sustainable margins and strong operating cash flow, which has been sufficient to fund its capex, (iii) a relatively low leverage measured as 2.0x Debt/EBITDA and (iv) strong interest and debt coverage metrics, with EBITA/Interest at 5.2x and FFO/Net Debt at 40.7% (all the ratios incorporate Moody's standard adjustments and are calculated on the LTM H1 2010 basis). Given its modern fleet and having reasonably invested in it, Transoil sees its current capex program (RUB15.7 billion for 2011- 2013) as almost fully discretionary. Transoil will implement the program depending on the market environment. No significant M&As in addition to a related-party transaction to acquire a company that has leased out its locomotives and tank cars to Transoil, are reportedly under consideration. However in Moody's view, Transoil's financial flexibility and evolution of its financial profile may be additionally challenged by the dividend policy of its private shareholders. Large dividend payments of the past have left the company with FCF negative, though without damage to its business development or financial standing. Moody's notes the risk of limited visibility of the dividend policy going forward. In Moody's view, Transoil's ability to maintain its financial profile and be financially flexible depends on its shareholders' willingness to cap dividend requirements. The agency notes that the company's RCF/Net Debt of around 17.4% and Debt/Book Capitalization of 71% on the LTM H1 2010 basis are weaker than expected from a Ba3-rated company in the emerging markets. However, the agency understands that these ratios are manageable by the company and planned to become more in line with the current rating in the short term, with RCF/Net Debt to increase to around 30% and Debt/Book Capitalization be down to around 60%. Moody's takes some comfort from the management's commitment to a conservative financial policy supported by the expected dividend payments at levels which should allow the company to become FCF positive and develop without new borrowings in line with the company's plans. Transoil's liquidity is acceptable but dependent on its cash generation ability, actual investments over the next 12 months compared to the planned ones and dividend payments. The company does not have committed long-term credit facilities, only a short term revolving line to address short-term liquidity needs. The company's cash reserves as of the beginning of Q4 2010 more than covered its short-term debt obligations. The risk of increasing dividend payments is somewhat mitigated by the company's investment flexibility. The stable rating outlook reflects Moody's expectation that Transoil should be able to maintain a financial profile commensurate with its current rating in the 12-18 months. The rating could be upgraded, should there be a sustainably growing demand for rail-based oil and oil products transportation services for the company to diversify its client base, ensure a long-term business growth and increase its cash flow generation, with the EBITA margin around 20%, robust positive free cash flow, Debt to EBITDA of materially below 2.0x and RCF to Net Debt of above 40%. The rating would be under pressure should the company happen to lose any of its few major clients or market fundamentals become weaker and Transoil's cash generation ability deteriorate, with (i) EBITA margins falling materially below 13%, (ii) Debt/EBITDA trending towards 2.5x and above; (iii) RCF/Net Debt decreasing materially below 30%. The group's shareholders deviation from its plan to cap dividend payments and, as a result, the company's failure to have RCF/Net Debt improved to 30% would negatively affect the rating. Pressure on liquidity profile would put downward pressure on the rating as well. Transoil's rating was assigned by evaluating factors Moody's believe relevant to its credit profile, including i) the business risk and market position within key business segments; ii) management's strategy, iii) the financial profile, and iv) the 2009 and H1 2010 performance and projections over the near to intermediate term. These attributes were compared against other companies both within and outside of Transoil's key business segment and Transoil's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in St. Petersburg, Transoil is one of Russia's largest tank car operators, privately owned, with RUB50.7 billion (US$1.6 billion) in revenues in 2009. TRANSSIBERIAN RE: Fitch Withdraws 'B+' Insurer Strength Rating -------------------------------------------------------------- Fitch Ratings has withdrawn Russian-based Reinsurance Company Transsiberian Reinsurance Corporation's 'B+' Insurer Financial Strength rating with Negative Outlook and National IFS 'A-(rus)' rating with Negative Outlook. Fitch has withdrawn the ratings as Transsib Re has chosen to stop participating in the rating process. Therefore Fitch no longer has sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for Transsib Re. 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. TRANSSIBERIAN RE: AM Best Upgrades Financial Strength Rating to B ----------------------------------------------------------------- A.M. Best Europe - Rating Services Limited has upgraded the financial strength rating to B (Fair) from B- (Fair) and issuer credit rating to "bb" from "bb-" of OJSC Transsiberian Reinsurance Corporation (Transsib Re) (Russia). The outlook for both ratings has been revised to stable from positive. The rating actions reflect Transsib Re's improving risk-adjusted capitalization, good business position and its good but declining underwriting performance. The main offsetting rating factors are its weak enterprise risk management and ongoing investment volatility. Transsib Re benefited from a significant capital injection in late 2010 with additional money expected in early 2011. The Company's risk-adjusted capitalization has improved as a result and will be further augmented by the retention of profits. A.M. Best believes that Transsib Re is taking steps to improve its limited capital flexibility, which has hindered it in the past. In order to comply with Russian regulatory requirements that will come into force in mid 2012, Transsib Re will continue to be dependent on retained earnings. Transsib Re is one of the major reinsurance companies in Russia by premium income. Net written premiums (NWP) are expected to continue declining by 7% in 2010 and reach RUB607 million by year end. This is a continuation of the trend started in 2009 when NWP fell by 14% and is part of a decision to reduce the company's exposure in softening market conditions. A.M. Best expects gross written premiums to be in the area of RUB800 to RUB820 million in 2010. A.M. Best believes that based on 2010 results so far, underwriting performance is likely to be marginal, but investment performance is likely to stabilize due to the reduced equity exposure and tentative financial market improvements. During 2009, Transsib Re's underwriting performance remained good, despite the challenging market conditions. The company's claims ratio fell to 65.2% in 2009 as a result of its withdrawal from unprofitable contracts, and Transsib Re has seen an improvement in its investment income in 2009 while experiencing some ongoing unrealized losses. The company still does not have a functioning capital model. It has commissioned a consulting firm to begin modeling its own risks, and A.M. Best believes that although this process is in its initial stages, it could improve enterprise risk management in the future if successfully implemented. VNESHPROMBANK OOO: Moody's Assigns 'B2' Long-Term Deposit Ratings ----------------------------------------------------------------- Moody's Investors Service has assigned a B2/Not-Prime long and short-term global local currency deposit ratings and a B2 long- term global local currency senior unsecured debt rating to Vneshprombank. The ratings carry a stable outlook. Any subsequent senior debt issuance by Vneshprombank will be rated at the same rating level subject to there being no material change in the bank's overall credit rating. The debt rating of B2 was assigned to these debt instruments: -- RUB1.5 billion Senior Unsecured Regular Bond due 14 November 2012 -- RUB3.0 billion Senior Unsecured Regular Bond due 30 November 2013 Ratings Rationale The ratings assigned by Moody's are in line with Vneshprombank's baseline credit assessment of B2, which is, in turn, based on the bank's E+ BFSR (mapping to a BCA of B2). The rating does not incorporate any expectation of systemic or shareholder support for Vneshprombank in case of need. According to Moody's, the BFSR is constrained by the absence of significant franchise diversification due to the peculiar characteristics of the boutique model which results in significant levels of concentration on both sides of the balance sheet. The BFSR is also restricted by succession risk as a significant portion of the bank's franchise is susceptible to key person risk. At the same time, the BFSR is supported by the bank's (i) established customer base and moderate risk appetite which resulted in a better-than-industry-average asset quality and (ii) access to funding and liquidity during crisis times. Headquartered in Moscow, Russian Federation, Vneshprombank reported total audited consolidated assets of US$1.6 billion under IFRS at year-end-2009. * S&P Affirms 'BB-' Issuer Credit Rating to Russian City of Ufa --------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BB-' long-term issuer credit rating and 'ruAA-' Russia national scale rating on the Russian City of Ufa. The outlook is stable. At the same time, S&P assigned its 'BB-' and 'ruAA-' senior unsecured debt ratings to the city's planned three-year Russian RUR750 million (about US$24 million) bond, which it intends to place on Dec. 28, 2010. The bond will have six fixed semi-annual coupons and will mature in December 2013. S&P also assigned a recovery rating of '3' to the proposed bond, indicating its expectation of meaningful (50%-70%) recovery in the event of a payment default. "The affirmation reflects S&P's expectation that Ufa's budgetary performance will be relatively sound in the medium term, despite a temporary deterioration in 2010," said Standard & Poor's credit analyst Alexandra Balod. Ufa is the administrative center of the Republic of Bashkortostan (BB+/Stable/--) in the Urals region of the Russian Federation (foreign currency BBB/Stable/A-3; local currency BBB+/Stable/A-2; Russia national scale, 'ruAAA'). The ratings reflect S&P's view of Ufa's limited financial flexibility, owing to its dependence on federal and regional authorities' decisions, high capital-expenditure requirements, and volatile free cash reserves. S&P's assumption that the city's debt burden will remain modest in the medium term and that its financing needs will stay relatively low, as well as the probability of financial support from Bashkortostan, support the ratings. Transfers comprise about 35% of Ufa's operating revenues, which contributes to the limited financial predictability and volatility of the city's budgetary performance. Nevertheless, in 2011-2012, S&P expects Ufa to receive higher subsidies from Bashkortostan, which enjoys a comfortable liquidity position. Together with a modest economic recovery, underpinning the city's tax base, this should support the city's financial performance S&P believes Ufa's operating balance will turn positive despite a temporary deterioration in 2010, but remain less than 5% of operating revenues in the medium term, owing to higher operating expenditures, primarily from personnel-related and utility costs. S&P's base-case scenario assumes that Ufa's capital program will largely depend on capital transfers from higher-tier budgets and will make up about 15% of the city's total expenditures. S&P expects deficits after capital accounts to stay at a still low 2%- 5% of total revenues in 2010-2012. After the bond placement in 2010, S&P expects Ufa's tax-supported debt to remain low relative to that of international peers and to not exceed 25% of total revenues over the next three years. S&P understands that the city plans to continue incurring medium-term debt, which should keep its debt service at less than 5% in 2011- 2012. Apart from direct debt, the city's tax-supported debt includes guarantees to support municipal utilities' investment projects. "The outlook is stable because S&P believes that the city will achieve a moderately positive operating performance and maintain its investments in local infrastructure, while keeping its debt burden low," said Ms. Balod. "The stable outlook also incorporates S&P's assumption that Bashkortostan will provide higher financial support in the form of direct subsidies to support Ufa's budgetary performance in 2011-2012." Should the city's financial performance remain weak in line with S&P's downside scenario, due to a change in financial relations with Bashkortostan, especially if accompanied by weaker liquidity and short-term debt accumulation that might expose Ufa to refinancing risks, S&P could lower the ratings. The ratings could be raised if Ufa's budgetary performance significantly improves beyond S&P's base-case forecast and the city maintains a sustainable cash position, together with improved visibility of its financial relations with Bashkortostan. * S&P Affirms 'B' Issuer Rating on Russia's Novgorod Oblast ----------------------------------------------------------- On Dec. 23, 2010, Standard & Poor's Ratings Services affirmed its 'B' long-term issuer credit and 'ruA' Russian national scale ratings on Russia's Novgorod Oblast. S&P subsequently withdrew the ratings at the issuer's request. The outlook was negative at the time of withdrawal. The ratings reflected the oblast's relatively poor, volatile, and concentrated economy, low fiscal flexibility, and weak budgetary performance. Novgorod Oblast's favorable location between Russia's two largest cities and modest direct debt mitigated these constraints. ========= S P A I N ========= AYT COLATERALES: Fitch Assigns 'BBsf' Rating to Class B Notes ------------------------------------------------------------- Fitch Ratings has assigned final ratings to AyT Colaterales Global Hipotecario, Fondo de Titulizacion de Activos Serie AyT Colaterales Global Hipotecario BBK II, Fondo de Titulizacion de Activos' mortgage-backed floating-rate notes due in June 2043: -- EUR780.238.272,45 Class A notes (ISIN ES0312273362) 'AA-sf'; Outlook Stable; Loss Severity rating of 'LS-1' -- EUR30.500.000,00 Class B notes (ISIN ES0312273370) 'BBsf'; Outlook Stable; Loss Severity rating of 'LS-3' The final ratings are based on the quality of the collateral, the underwriting and servicing of the mortgage loans, available credit enhancement, the integrity of the transaction's legal and financial structure and Ahorro y Titulizacion, S.A., S.G.F.T.'s administrative capabilities. This transaction is a cash flow securitization of a static pool of first-ranking Spanish mortgage loans originated and serviced by Bilbao Bizkaia Kutxa that originally closed in April 2008. Fitch considers the RMBS portion of the portfolio to be above average risk due to the high loan-to-value ratios. The loans in the portfolio have an average original LTV of 80.2%, and an average current LTV of 66.3%, which exhibits an average Spanish RMBS risk profile due to moderate original LTV. In addition, in line with the entity's origination procedures, some of the loans in the portfolio are originated by brokers and there is also geographical concentration in the Basque Country. Fitch has also incorporated the transaction's recent performance into its analysis. As of December 2010, according to the gestora, 0.95% of the current portfolio balance was in arrears over 90 days. Additionally, the transaction has provisioned loans in arrears over 18 months of EUR1.9 million with the proceeds of the mortgages. In Fitch's view, the transaction benefits from significant excess spread which covered the balance of written-off loans. The excess spread will continue providing support to the transaction and reducing the cost of carry of non-performing loans. Despite the portfolio's credit risk, Fitch believes all of the characteristics of the loans in this transaction have been incorporated when calculating weighted average frequency of foreclosure and weighted average recovery rate, and the available credit enhancement for the senior notes can withstand Fitch's 'AA- ' rating stresses. Fitch modelled different default vectors combined with different prepayment vectors (high/low) and different interest rate environments (rising/stable/decreasing). Assumptions used under individual scenarios were in accordance with Fitch's cash flow analysis criteria for RMBS. As of December 2010, total CE for the class A notes, equivalent to 7.10% of the outstanding collateral balance, was provided by the subordination of class B (3.70%), unrated class C (0.85%), and unrated class D (0.85%) plus a reserve fund of 1.70%. Similarly, CE for the class B notes is provided by the subordination of the unrated class C and unrated class D notes plus the reserve fund. The fund is regulated by Spanish Securitisation Law 19/1992 and Royal Decree 926/1998. Its sole purpose is to transform into fixed-income securities a portfolio of mortgage certificates ("certificados de transmision hipotecaria", CTHs and "participaciones hipotecarias", PHs) acquired from the 21 sellers. The CTHs were subscribed by Europea de Titulizacion S.G.F.T, S.A., whose sole function is to manage asset-backed notes on behalf of the fund. The ratings address the timely payment of interest on the notes according to the terms and conditions of the documentation, subject to a deferral trigger for the class B, C and D notes, as well as the repayment of principal by the legal maturity date for each note. =========== S W E D E N =========== OCTAPHARMA NORDIC: Moody's Cuts Long-Term Issuer Rating to 'Ba1' ---------------------------------------------------------------- Moody's Investors Service has downgraded Octapharma Nordic AB's long-term issuer rating to Ba1 from Baa3 and, concurrently, withdrawn its issuer rating and assigned a Ba1 corporate family rating and Ba1 probability-of-default rating to the company. In addition, Moody's has changed the outlook on the ratings to negative. The rating action concludes the review for possible downgrade initiated on September 29, 2010. Ratings Rationale The downgrade reflects the ongoing review process by the US Food and Drug Administration and by the European Medicines Agency into Octapharma's products octagam 5% and octagam 10%, following the reporting of serious side-effects as a result of the administration of octagam 5%. The agency now believes that it may take longer than it initially expected to bring the product back on market. Given the importance of the recall -- the octagam franchise generated approximately 50% of Octapharma's sales before the recall -- as well as the remaining uncertainty as regards timing for returning the products to market, Moody's believes that the company profile is at this time no longer commensurate with an investment grade rating. The lack of sales of octagam is currently exerting pressure on Octapharma's cash flow generation; however, Moody's recognises that if and when the company is able to resell the products, its credit metrics should improve back to strong levels. Further to the downgrade, Octapharma's Ba1 rating continues to incorporate (i) the company's conservative financial policy and risk-averse approach, having operated without any debt for several years; and (ii) favorable market dynamics, with growth expected from emerging markets, earlier diagnosis of patients and line extensions of existing products. In addition, the rating factors in high barriers to entry, including the high degree of capital- intensiveness and regulatory constraints, which mitigate Octapharma's relatively small size in a consolidating industry and its high degree of concentration in terms of activity (plasma- derived products only) and product (octagam generates around 50% of the company's total sales). The negative outlook reflects the possibility of delays in the review process and therefore increased pressure on Octapharma's profits and cash flows, which could exert further downward pressure on the rating. Moody's could consider stabilising the outlook if and when octagam returns to market either in the EU or the US. Octapharma's issuer rating is being withdrawn because an issuer rating normally applies to an investment grade only. Moody's has withdrawn the issuer rating for its own business reasons. Established in 1983, Octapharma is privately owned by the Marguerre family. The company is one of the largest commercial providers of plasma derivatives worldwide and its business model consists of the collection, extraction, purification and subsequent marketing of proteins. Octapharma generated sales of EUR1 billion in 2009. ===================== S W I T Z E R L A N D ===================== UBS AG: Moody's Downgrades Rating on EUR14 Million Notes to 'B2' ---------------------------------------------------------------- Moody's Investors Service has taken action on these two credit linked notes issued by UBS AG. Issuer: UBS AG -- Ser 857, EUR1.83m FIX Credit-Linked Zero Cpn Euro Medium Term Notes, Placed on Review for Possible Downgrade: previously on December 14, 2009 Downgraded to A3. -- Ser 1755, EUR14m FIX Zero Cpn Euro Medium Term Notes, Downgraded to B2: previously on December 8, 2010 Ba3 Placed Under Review for Possible Downgrade Ratings Rationale The transactions are two credit linked notes issued by UBS AG. Series 1755 is referencing the subordinated debt of Irish Life & Permanent plc, currently rated B2 and Series 857 is referencing the subordinate debt of Banco Bilbao Vizcaya Argentaria S.A., currently rated Aa3 on review for possible downgrade. The rating action on Series 1755 is a response to the downgrade to B2 from Ba3 under review for possible downgrade of the subordinate rating of Irish Life & Permanent plc on 20th December 2010. Moody's also explained that the review taken on Series 857 is a response to the Aa3 of the subordinate rating of Banco Bilbao Vizcaya Argentaria S.A. being placed on review for possible downgrade on December 20, 2010. Moody's Investors Service did not receive or take into account a third-party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months. =========== T U R K E Y =========== ALBARAKA TURK: Fitch Downgrades Issuer Default Rating to 'B+' ------------------------------------------------------------- Fitch Ratings has downgraded Turkey-based Albaraka Turk Katilim Bankasi A.S.'s ratings: -- Long-term foreign currency Issuer Default Rating: downgraded to 'B+' from 'BB-'; Outlook Stable -- Long-term local currency IDR: downgraded to 'B+' from 'BB-'; Outlook Stable -- Short-term foreign and local currency IDRs: affirmed at 'B' -- National Long-term rating: downgraded to 'BBB+(tur)' from 'A+(tur)'; Outlook Stable -- Individual Rating: affirmed at 'D' -- Support Rating: downgraded to '5' from '3' The downgrade reflects Fitch's revised view of potential support from its majority shareholder, Bahrain-based Albaraka Banking Group. While Fitch believes ABG has a strong propensity to support, its ability to do so can not be relied upon, given its structure as a group of diversified subsidiaries spread across different sub-investment grade countries and Albaraka Turk's large size relative to the group. For this reason, the Support Rating has been downgraded to '5' from '3', and Albaraka Turk's IDRs and National Rating are now driven by its intrinsic strength. The 'B+' Long-term IDR reflects the bank's small size and concentration risks in its loan book, particularly in construction sector lending. Robust profitability, minimal market risk and low NPL ratios are rating positives. Albaraka Turk is 54.1%-owned by ABG, a leading Islamic banking group. Albaraka Turk offers interest-free banking services mainly to its corporate and SME customers. It is a small bank with a 0.8% share in total banking system assets, ranking 20th among Turkey's 49 financial institutions in 9M10. ============= U K R A I N E ============= PROMINVESTBANK JSC: Moody's Upgrades Local Deposit Rating to 'Ba3' ------------------------------------------------------------------ Moody's Investors Service has upgraded the local currency deposit rating of Prominvestbank to Ba3 from B2. Its Bank Financial Strength Rating of E+ was affirmed but now maps to a Baseline Credit Assessment of B2, up from the previously assigned B3. All rating carry a stable outlook. Concurrently, the rating agency upgraded the bank's long-term National Scale Rating to Aa1.ua from A2.ua. National scale ratings carry no specific outlook. At the same time, the rating agency has assigned a provisional Ba3 global scale local currency long-term senior unsecured debt rating to PIB, as well as an Aa1.ua long-term National Scale Rating to the local currency-denominated bonds amounting to UAH1.5 million that the banks intend to issue. The bonds will represent a senior unsecured claim on the bank and will be issued with a final maturity of two-three years. The outlook for the global rating is stable, while the NSR carries no specific outlook. Ratings Rationale Moody's notes that the raising of the BCA to B2 from B3 reflects the recovery of PIB's lending and deposit-taking franchise as well as its stable liquidity profile and strong capital adequacy levels. As per IFRS management accounts for Q2 2010 (unaudited), the bank recorded net income of UAH263 million (US$33 million) driven by renewed lending in 2010 and stabilization of loan book quality, resulting in recovery of provisions. PIB also demonstrated 11% growth in the loan book and 16% growth in deposits from January to October 2010. Thus the bank recovered its market franchise which was damaged in late 2008. PIB reported strong capital adequacy ratios aided by recovery in net income as well as capital injections, with total regulatory CAR at 16.9% as at July 1, 2010, which together support the bank's potential losses absorption capacity. PIB is almost fully owned by state-owned corporation Vnesheconombank (VEB, rated Baa1), which bailed out the bank in late 2008 and provided capital and liquidity support to restore the bank's operations. The parent announced its strategy to run Ukrainian subsidiary in line with VEB's general strategy to support development of Russian economy and trading balance including ongoing development of trading turnover and joint infrastructure projects between neighbor Russian and Ukrainian governments and companies. Moody's views positively the steps that have already been taken as part of implementation of the strategy such as approval the list of strategic clients and projects fitting key strategic objectives and participation in inter-country commission for infrastructure development. The rating agency believes this is an indication of closer strategic fit of PIB to its parent, and thus is likely to result in a higher probability of support from VEB to PIB in case of need. Thus, the rating agency assessed such probability as high leading to two-notch uplift of PIB's local currency deposit rating to Ba3 from the bank's BCA of B2. Moody's provisional Ba3 rating for the bonds is based on PIB's fundamental credit quality and factors in the bank's ability to fulfill its long-term obligations. The obligations include those associated with the put option that the bondholders will, according to the terms of the issue, be able to exercise in order to sell the bonds back to the bank. Moody's notes that if the bank's credit quality were to deteriorate at these times, the exercise of the put options might exert additional pressure on its financial condition. Moody's previous rating action on PIB was on November 2, 2009, when the BFSR was upgraded to E+ from E, its long-term local currency and foreign currency bank deposit ratings were upgraded to B2 from Caa2, and its NSR was upgraded to A2.ua from B3.ua. Based in Kyiv, Ukraine, PIB reported total unaudited IFRS assets of UAH28 billion as at July 1, 2010, and net income of UAH263 million for Q2 2010. =========================== U N I T E D K I N G D O M =========================== 1ST FOR FENCING: Goes Into Provisional Liquidation -------------------------------------------------- 1st for Fencing Ltd has gone into provisional liquidation with one of its key businesses -- the 100 Aker Wood garden centre and bistro in Melrose -- shut up shop Friday, according to The Southern Reporter. The Southern relates that founder and managing director Mark Riddell's application to wind up his business, which has a workforce of 26, was granted at Selkirk Sheriff Court and it is now being run by Edinburgh insolvency experts and accountants Aver in their role as interim liquidators. "We are acting in the best interests of creditors, so we have agreed that 1st Fencing Ltd should complete ongoing contract work in its order book into the new year when we will apply for interim, then full, liquidator status," The Southern quoted Emma Porter of Aver as saying. "We are trying to find buyers for parts of the business, but I expect the 100 Aker Wood centre to close down at Christmas," she added. Ms. Porter said she was unable to reveal the level of the firm's indebtedness at this stage, The Southern notes. 1st for Fencing Ltd grew to become one of the region's market leaders in erection of fencing and timber decking, opening the 100 Aker Wood visitor centre at Annay Road seven years ago and later adding a popular bistro. BELLACHAT TRANCHE: S&P Assigns 'BB+' Rating to EUR200 Mil. Swap --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+srp (sf)' portfolio swap risk rating to the EUR200 million unfunded credit default swap, Bellachat Tranche B, arranged by BNP Paribas. A swap risk rating takes into consideration only the creditworthiness of the reference portfolio. It does not address either counterparty risk (protection buyer/seller) or the specific amount of termination payments that would be payable under the swap transaction. Under the terms of the swap, BNP Paribas, London acts as protection buyer. BNP Paribas, Resource and Portfolio Management acts as protection seller. The swap references the iTraxx Europe Series 7, 3%-6% tranche. As a result of succession events, the attachment point is now 2.99395161% and the exhaustion point is 6.01814516%. In S&P's opinion, the attachment point is sufficient to support a 'BB+srp (sf)' rating. S&P based its 'srp' ratings on the analysis using its latest applicable CDO Evaluator model version 5.1 Ratings List Swap Risk Ratings Assigned Credit Default Swap -- EUR200 Million Unfunded Credit Default Swap Bellachat Tranche: BBB+srp (sf) CHAMBER OF COMMERCE: Concludes Company Voluntary Arrangement ------------------------------------------------------------ The Mid Yorkshire Chamber of Commerce has concluded its CVA a year earlier than planned and with full repayments to all creditors who claimed. The voluntary arrangement officially ended on December 13 when court-appointed joint supervisors filed a Certificate of Completion. When the CVA was agreed back in January 2010, creditors allowed the Chamber two years to pay back 78p in the pound. Just a year into the arrangement and the Chamber has exceeded its original offer by paying the full debt back to creditors. In an almost unprecedented move an extra 22p has been paid on top of the initial amount approved eleven months ago. Andrew Choi, Executive Director at the Chamber said: "We exist to protect the interests of business so it was only right and proper that we pay back the full amount. "Pursuing a CVA was the responsible thing to do so that we could continue to support our members and fulfill our obligations to creditors." The Chamber still has offices in Halifax, Huddersfield and Wakefield. "We are committed to retaining a presence in each area so that we are accessible to businesses and can represent their interests locally," continued Mr. Choi. During the CVA-period the Chamber took steps to put in place a leaner structure so that they could focus on delivering membership services. This has proven to be a successful strategy and the Chamber has returned to profit. The organization has continued to provide export facilities that meet national standards set by the British Chambers of Commerce annually. And they have maintained a lively networking and events program as well as assisting more than 400 companies with the childcare vouchers scheme. David Horsman, Chamber Chairman, said: "I would like to thank our members and patrons who have continued to support us over the last year." "I would also particularly pay tribute to Andrew, his team and the board of directors who have worked hard to ensure not only a satisfactory outcome to the CVA but the full restoration of the Chamber of Commerce." Founded over 150 years ago, The Mid Yorkshire Chamber of Commerce and Industry Ltd is a membership services company that exists to protect and develop the interests of business in the metropolitan areas of Calderdale, Kirklees and Wakefield. It is a part of the British Chambers of Commerce national network that covers the whole of the UK and work with International Chambers of Commerce. CHRISTOPHER GADD: Owner to Launch Legal Action v. SRA Over Closure ------------------------------------------------------------------ Matt Smith at Andover Advertiser reports that Southampton-based solicitor Chris Gadd said he was launching High Court proceedings for "substantial damages" against the Solicitors' Regulatory Authority for shutting down his firm. Andover Advertiser relates that Christopher Gadd Limited was closed down last year following a probe into the earlier collapse of another practice Mr. Gadd was a partner in, WB Legal. According to Andover Advertiser, the SRA found Christchurch based WB Legal, which went into administration in March 2009, had failed to comply with accounting rules and that Mr. Gadd and another solicitor Paul Windsor had failed to comply with the Solicitors Code of Conduct. Another partner, Mark Bronzite, was banned from acting as a solicitor without SRA approval, Andover Advertiser recounts. Speaking after he was recently suspended for six months by a Solicitors' Disciplinary Tribunal, Mr. Gadd, as cited by Andover Advertiser, said the SRA had "no substantive evidence" to close his limited company last December. According to Andover Advertiser, he said the closure had a "devastating effect," resulting in the firm's administration, causing job losses and "unnecessary angst" to clients as well as costing suppliers tens of thousands of pounds. "I have received no adequate explanation from the SRA either then or since as to why my firm was closed. As a result I have no option other than to pursue them through the courts," Andover Advertiser quoted Mr. Gadd as saying. Christopher Gadd Limited was a personal injury firm. It had offices in Millbrook and Christchurch. DEXION COMMODITIES: To Put Forward Winding-Up Proposals ------------------------------------------------------- The Board of Dexion Commodities Limited disclosed that it intends to put forward proposals for the winding down of the Company which, if approved, will lead to the realization of the Company's portfolio and subsequent liquidation of the Company. It is expected that a circular will be sent to Shareholders in February 2011 setting out details of the proposals and convening an extraordinary general meeting at which the proposals will be put to Shareholders for their approval. Background While not forming part of the Company's investment objective or policy, the Company has targeted absolute annualized returns in excess of 10% over the medium term with annualized volatility of 6-9% over the medium term. However, in the period October 1, 2009 to November 30 (Berlin: NBXB.BE - news) 2010 (and based on the estimated November NAV published on December 8, 2010) the Company's continuing portfolio has failed to meet those targeted returns, with annualized returns in that period being -2.20% (Sterling), -2.19% (Eur) and -2.05% (USD) and with annualized volatility of 5.21%, 5.08% and 5.16% respectively. Furthermore, in the period July 1, 2010 to December 10, 2010 the Company's Shares have traded at average discounts of 15.08%, 13.57% and 11.45%, respectively to their NAVs. Given the small size of the Company's asset base, the Board has been, and continues to be, unwilling to further reduce those assets through the repurchase of Shares and hence the Company's ability to reduce the share price discount is severely limited. Accordingly, in the absence of a significant change in either market conditions or the Company's performance, it is likely that the discount management provisions will be triggered in early July 2011, necessitating a continuation vote for the Company. After consultations with the Company's investment manager and major Shareholders and given: * the Company's performance since the 2009 reorganization; * the small size of the Company's asset base; * the share price discount at which the Shares continue to trade; * the likelihood of a redemption offer being required later in 2011; * the limited liquidity in the Shares; and * the Company's expense base (as a closed ended fund listed on the main market of the London Stock Exchange compared to its assets, The Board has concluded there is insufficient Shareholder support for the Company pursuing its investment objective with its existing investment policy. The Proposals It is the Board's current intention that proposals, which would be recommended by the Board, should be put to Shareholders by way of ordinary resolution at a general meeting of the Company, expected to be convened in February 2011, for a change to the Company's investment policy to facilitate an orderly winding-down. Once substantially all of the assets attributable to the continuing portfolio have been realized, a further meeting will be convened to approve the appointment of a liquidator to the Company. (a) Realization of the continuing portfolio Subject to the relevant Shareholder resolution(s) being passed at the extraordinary general meeting, the Company's investment objective and investment policy would be amended to reflect the objective of realizing the Company's continuing portfolio. The new investment objective and policy of the Company would be to realize the Company's existing investments in an orderly and timely manner, with a view to distributing cash to Shareholders (in accordance with their rights to distributions on a winding up as set out in the Articles) at appropriate times as sufficient investments are realized. The Company would not make any new investments (other than cash and near cash equivalent securities). The Company will consider whether its currency hedging program would continue in accordance with the existing mandate. The realization timetable for the Company's investments is being agreed with the Investment Adviser and the relevant investee funds but the Investment Adviser anticipates that approximately 98% of the investments in the continuing portfolio (using NAVs at November 30, 2010) could be realized by April 30, 2011, with payment to investors being made as soon as possible thereafter. (b) Liquidation of the Company The Shares are currently listed on the Official List and traded on the main market of the London Stock Exchange. During the process of realizing the Company's portfolio, it is expected that the Shares would continue to be listed and traded on the London Stock Exchange until such time as the Company no longer meets the requirements of the Listing Rules (whether by reason of an insufficient spread of investments or otherwise), at which time it is anticipated that the Company would request that the listing for each class of Shares be suspended and subsequently cancelled. At that point the Shares would no longer be capable of being traded on the London Stock Exchange. At the time that suspension of the Company's shares was sought, or shortly prior thereto, the Board would convene a meeting to consider a resolution for the winding-up of the Company and the appointment of a liquidator. On any such winding-up resolution being passed, the Company would request that the listing of the Shares be suspended and subsequently cancelled (if this had not already occurred). A further announcement setting out details of the proposed realization and liquidation process will be made in due course. Dexion Commodities Limited, formerly Dexion Alpha Strategies Limited, is a closed-ended investment company. The Company's investment objective is to maximize medium-term returns in a manner commensurate with acceptable risk management. It focuses on achieving its objectives through investment in an actively managed diversified portfolio of underlying funds across a range of alternative investment strategies, which targeted emerging and/or under-exploited sources of alpha. The Company seeks to achieve its investment objective for the continuing portfolio through an investment policy that focuses upon commodity, energy, and environmental strategies accessed, directly or indirectly, through a multi-manager, multi-strategy portfolio of commodities themed hedge funds. The investment adviser of the Company is MAN Investments (CH) AG. IA GLOBAL: Closes Acquisition of PowerDial Systems and Services --------------------------------------------------------------- IA Global Inc. announced the closing of the acquisition of PowerDial Systems, Ltd., a VOIP System Company, and PowerDial Services, Ltd, a VOIP Service Company, from Innovative Software Direct Plc, a U.K. company listed on the PLUS Market. UK-based PowerDial is an IT company providing VOIP and Asset and Annuity solutions covering all aspects of convergence, including voice, data, wireless and cable. They provide physical networks, onsite IT equipment, and applications that control the performance and integrity of networks and the data on those networks. In FY2009, PowerDial reported revenues of $2.7 million and expects to grow in FY2010 and beyond. PowerDial was acquired for 2,400,000 shares of IAGI common stock at $1.00 per share, with additional shares available for meeting certain performance metrics, for raising funds for acquisition of additional VOIP, IT or telecom companies and for the settlement of an ISD note payable. "We are delighted to add this valuable communications services component to our growing portfolio of global companies. PowerDial represents significant growth potential by providing an IT business solutions platform that can be scaled both geographically and by adding key technology components," stated Brian Hoekstra, CEO of IA Global, Inc. About IA Global San Francisco, Calif.-based IA Global, Inc. (OTCQB: IAGI.OB) -- http://www.iaglobalinc.com/-- is a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions. The Company is utilizing its current partnerships to acquire growth businesses in target sectors and markets at discounted prices. The Company is actively engaging in discussions with businesses that would benefit from our business acumen and marketing expertise, knowledge of Asian Markets, and technology infrastructure. The Company's balance sheet at Sept. 30, 2010, showed $4.65 million in total assets, US$3.30 million in total current liabilities, US$2.79 million in long-term debt, and a stockholders' deficit of US$1.45 million. As reported in the Troubled Company Reporter on July 20, 2010, Sherb & Co., LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has incurred significant operating losses, and has a working capital deficit as of March 31, 2010. KENSINGTON MORTGAGE: Fitch Affirms 'CCsf' Rating on Class B2 Notes ------------------------------------------------------------------ Fitch Ratings has revised the Outlooks to Stable from Negative on three tranches of Money Partners Securities Plc series and six tranches of Kensington Mortgage Securities Plc - Series 2007-1. The agency has also affirmed the ratings of all the MPS series and KMS. Both the KMS and MPS series are collateralized by UK non- conforming residential mortgages, with a significant proportion of self-certified borrowers ranging from 46.8% (MPS2) to 54.4% (MPS1) and 65.4% for KMS. The underlying portfolios also comprise large volumes of second-charge loans, ranging from 10.5% (MPS3) to 15.5% (MPS4) and 7.6% in KMS, which Fitch believes to be the main driver of the volatility seen in loss severities. The affirmation of their ratings, however, reflects improved performances of the underlying portfolios as seen in the October 2010 collateral reports. While the respective cash reserves for KMS and MPS2 remain fully funded, replenishment of the reserve funds has been taking place in the rest of the MPS series. With the decline in interest rates, and subsequent improvement in borrower affordability, the level of repossessions and losses incurred from the sale of repossessed properties has declined compared with levels seen in 2009. As a result, the issuers now have sufficient funds to replenish their reserves. Improved borrower affordability is evidenced by the stabilization in three-month plus arrears across all the five transactions, as well as improved collection rates as seen on the quarterly MPS reports. As of October 2010, loans in arrears by more than three months ranged from 30.7 % (MPS1) to 33.9% (MPS4) and 27.7% for KMS. Collection rates as seen on the MPS quarterly reports ranged from 85.3% (MPS2) to 87.7% (MPS3) as of October 2010 (and November 2010 for MPS2) compared with 75.6% (MPS2) to 82.7% (MPS1) a year ago. While the stable trend in arrears is in line with other UK non- conforming transactions rated by Fitch, the actual levels of delinquencies seen in these transactions are significantly higher. These high levels of arrears pose a risk to the future performance of the assets. An increase in interest rates is expected to negatively impact the ability of borrowers to meet payments and could subsequently lead to even higher rates of defaults and losses. This is reflected in the Negative Outlooks on the M1 notes (MPS4), M2 notes (MPS3 and MPS4) and B1 notes (MPS2, MPS3 and MPS4). The transaction structures include pro-rata amortization triggers, some of which have already been breached and are not expected to be cured. This means that note amortization will remain sequential over the life of the transactions. Further, reserve fund amortization triggers have already been breached for all four MPS and KMS transactions. For both these reasons, further increase in credit support is expected and is thus reflected in the affirmation of the notes. The rating actions are: Money Partners Securities 1 Plc -- Class A2a (ISIN XS0226128329) affirmed at 'AAAsf'; Outlook Stable; Loss Severity (LS) Rating 'LS-3' -- Class A2b (ISIN XS0226129566) affirmed at 'AAAsf'; Outlook Stable; 'LS-3' -- Class A2c (ISIN XS0226156536) affirmed at 'AAAsf'; Outlook Stable; 'LS-3' -- Class M1 (ISIN XS0226131117) affirmed at 'AAAsf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class M2a (ISIN XS0226131463) affirmed at 'AAsf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class M2b (ISIN XS0226131620) affirmed at 'AAsf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class B1 (ISIN XS0226132198) affirmed at 'BBBsf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class B2 (ISIN XS0226132271) affirmed at 'BBsf'; Outlook revised to Stable from Negative; 'LS-4' Money Partners Securities 2 Plc -- Class A2a (ISIN XS0236411780) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2a-2011 coupons (ISIN XS0236521968) affirmed at 'AAAsf'; Outlook Stable -- Class A2c (ISIN XS0236412754) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2c-2011 coupons (ISIN XS0236528468) affirmed at 'AAAsf'; Outlook Stable -- Class M1a (ISIN XS0236413307) affirmed at 'AA-sf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class M1b (ISIN XS0236413489) affirmed at 'AA-sf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class M2a (ISIN XS0236740501) affirmed at 'BBBsf'; Outlook revised to Stable from Negative; 'LS-3' -- Class M2b (ISIN XS0236742036) affirmed at 'BBBsf'; Outlook revised to Stable from Negative; 'LS-3' -- Class B1 (ISIN XS0236413646) affirmed at 'BB-sf; Outlook Negative; 'LS-4' Money Partners Securities 3 Plc -- Class A2a (ISIN XS0254114712) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2a-2011 coupons (ISIN XS0254124430) affirmed at 'AAAsf'; Outlook Stable -- Class A2b (ISIN XS0254121337) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2b-2011 coupons (ISIN XS0254126567) affirmed at 'AAAsf'; Outlook Stable -- Class A2c (ISIN XS0254122814) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2c-2011 coupons (ISIN XS0254129314) affirmed at 'AAAsf'; Outlook Stable -- Class M1a (ISIN XS0254130080) affirmed at 'AA-sf'; Outlook Stable; 'LS-3' -- Class M1b (ISIN XS0254130676) affirmed at 'AA-sf'; Outlook Stable; 'LS-3' -- Class M2a (ISIN XS0254130916) affirmed at 'BBBsf'; Outlook Negative; 'LS-4' -- Class M2b (ISIN XS0254131484) affirmed at 'BBBsf'; Outlook Negative; 'LS-4' -- Class B1a (ISIN XS0254132375) affirmed at 'BBsf'; Outlook Negative; LS rating revised to 'LS-5' from 'LS-4' -- Class B1b (ISIN XS0254132458) affirmed at 'BBsf'; Outlook Negative, LS rating revised to 'LS-5' from 'LS-4' -- Class B2a (ISIN XS0254132706) affirmed at 'CCCsf'; Recovery Rating 'RR4' -- Class B2b (ISIN XS0254307605) affirmed at 'CCCsf'; Recovery Rating 'RR4' Money Partners Securities 4 Plc -- Class A1a (ISIN XS0274950368) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A1a-2012 coupons (ISIN XS0275153392) affirmed at 'AAAsf'; Outlook Stable -- Class A1b (ISIN XS0274965556) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A1b-2012 coupons (ISIN XS0275154796) affirmed at 'AAAsf'; Outlook Stable -- Class M1a (ISIN XS0274969384) affirmed at 'AAsf'; Outlook Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class M1b (ISIN XS0274970713) affirmed at 'AAsf'; Outlook Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class M2a (ISIN XS0274972685) affirmed at 'BBBsf'; Outlook Negative; 'LS-4' -- Class M2b (ISIN XS0274974111) affirmed at 'BBBsf'; Outlook Negative; 'LS-4' -- Class B1a (ISIN XS0274978450) affirmed at 'BBsf'; Outlook Negative; 'LS-5' -- Class B1b (ISIN XS0274979185) affirmed at 'BBsf'; Outlook Negative; 'LS-5' -- Class B2 (ISIN XS0274980191) affirmed at 'CCCsf'; Recovery Rating 'RR4' Kensington Mortgage Securities plc - series 2007-1: -- Class A2 (ISIN XS0292638334): affirmed at 'AAAsf'; Outlook Stable; Loss Severity (LS)Rating revised to 'LS-2' from 'LS- 1' -- Class A2 DAC (XS0292642369): affirmed at 'AAAsf'; Outlook Stable -- Class A3a (ISIN XS0292638920): affirmed at 'AAsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-5' from 'LS-1' -- Class A3a DAC (XS0292644142): affirmed at 'AAAsf'; Outlook Stable -- Class A3b (ISIN XS0292652756): affirmed at 'AAsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-5' from 'LS-1' -- Class A3b DAC (XS0292651949): affirmed at 'AAAsf'; Outlook Stable -- Class A3c (ISIN XS0292640660): affirmed at 'AAsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-5' from 'LS-1' -- Class A3c DAC (XS0292653051): affirmed at 'AAAsf'; Outlook Stable -- Class M1a (ISIN XS0292639225): affirmed at 'BBBsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class M1b (ISIN XS0292651196): affirmed at 'BBBsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class M2b (ISIN XS0292639654): affirmed at 'Bsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class B1a (ISIN XS0292639902): affirmed at 'CCCsf'; Recovery Rating of 'RR4' -- Class B1b (ISIN XS0292651436): affirmed at 'CCCsf'; Recovery Rating of 'RR4' -- Class B2 (ISIN XS0292640157): affirmed at 'CCsf'; Recovery Rating of 'RR6' KIDDERMINSTER HARRIERS: Chris Swan Withdraws Rescue Bid ------------------------------------------------------- Colin Stoner at Birmingham Mail reports that Kidderminster Harriers must search again for a new financial savior after businessman Chris Swan pulled out of buying the club. According to Birmingham Mail, Harriers face the real threat of having to go into administration -- which would bring an automatic ten-point penalty -- as they need to find GBP150,000 to pay wages, tax, PAYE and National Insurance before the end of the month. Birmingham Mail relates having met with shareholders, he was told the two major shareholders -- Aggborough Holdings and Mrs. Jane Murrant -- would be happy to sell what would amount to 86% of the shares for GBP1. But the sticking point was to repay loans of GBP75,000 to acting chairman David Reynolds and GBP50,000 to new director Mark Serrell, who had rescued the club in October after a boardroom takeover, Birmingham Mail notes. Both Messrs. Reynolds and Serrell said they would pass on GBP25,000 each to the supporters trust, KHIST, to benefit the club, Birmingham Mail recounts. But when the eight-point offer was put to Mr. Swan he decided not to follow it up, Birmingham Mail discloses. According to Birmingham Mail, Mr. Swan said rather than repaying the loans, he would invest the money in the club. "The club is in a critical state but we are still talking to people and are working hard to make sure the club has a future," Birmingham Mail quoted Mr. Serrell as saying. Kidderminster Harriers F.C. is an English association football team based in Kidderminster, Worcestershire formed in 1886. It currently plays in the Conference National and has played at Aggborough Stadium since they were formed. LANDMARK 1: Fitch Affirms Rating on Class D Notes at 'Bsf' ---------------------------------------------------------- Fitch Ratings has revised the Outlook on Landmark 1's three most junior tranches to Stable from Negative and affirmed all tranches: -- Class Aa (ISIN XS0258051191): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating (LS) of 'LS-2' -- Class Aa DAC 2011 (ISIN XS0258051357): affirmed at 'AAAsf'; Outlook Stable -- Class Ac (ISIN XS0260674725): affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Class Ac DAC 2011 (ISIN XS0260674998): affirmed at 'AAAsf'; Outlook Stable -- Class B (ISIN XS0260675888): affirmed at 'Asf'; Outlook Stable; 'LS-3' -- Class Ca (ISIN XS0258052165): affirmed at 'BBsf'; Outlook revised to Stable from Negative; 'LS-4' -- Class Cc (ISIN XS0261199284): affirmed at 'BBsf'; Outlook revised to Stable from Negative; 'LS-4' -- Class D (ISIN XS0258052751): affirmed at 'Bsf'; Outlook revised to Stable from Negative; 'LS-4' Landmark 1, like most other UK non-conforming transactions, has seen a general improvement in the performance of the underlying collateral over the last year. In Fitch's opinion, the main driver for this improvement has been the sustained period of low interest rates, which allow mortgage payments to be more affordable. Since the last rating action in October 2009, loans that are three months or greater in arrears have decreased to 27.8% from 33.1% of the outstanding collateral balance. Even with this improvement, these arrears levels are still high and remain a risk to the transaction. The volume of new repossessions per quarter has been relatively stable over the last 18 months at between 0.8% and 1.6% of the outstanding collateral balance, although it did reach 2.1% in December 2009. The volume of unsold repossessions is at a more manageable current level of 3.0% compared with the high of 5.1% in March 2009. Previously, the excess spread available was insufficient to offset losses, either due to the volume of loans incurring losses per quarter or because loss severities on those loans were so high, over 30% in some cases. This has hindered the replenishment of the reserve fund up to its target level of GBP3 million, although in three of the last four quarters it has marginally increased to stand at GBP2.56 million. Furthermore, the two detachable coupons are due to redeem in June 2011, which should result in higher available excess spread. These positive developments over the last year have left the junior notes in an improved position, and Fitch has therefore revised the Outlook on the junior tranches to reflect the increased protection. MONEY PARTNERS: Fitch Affirms 'CCCsf' Ratings on Three Tranches --------------------------------------------------------------- Fitch Ratings has revised the Outlooks to Stable from Negative on three tranches of Money Partners Securities Plc series and six tranches of Kensington Mortgage Securities Plc - Series 2007-1. The agency has also affirmed the ratings of all the MPS series and KMS. Both the KMS and MPS series are collateralized by UK non- conforming residential mortgages, with a significant proportion of self-certified borrowers ranging from 46.8% (MPS2) to 54.4% (MPS1) and 65.4% for KMS. The underlying portfolios also comprise large volumes of second-charge loans, ranging from 10.5% (MPS3) to 15.5% (MPS4) and 7.6% in KMS, which Fitch believes to be the main driver of the volatility seen in loss severities. The affirmation of their ratings, however, reflects improved performances of the underlying portfolios as seen in the October 2010 collateral reports. While the respective cash reserves for KMS and MPS2 remain fully funded, replenishment of the reserve funds has been taking place in the rest of the MPS series. With the decline in interest rates, and subsequent improvement in borrower affordability, the level of repossessions and losses incurred from the sale of repossessed properties has declined compared with levels seen in 2009. As a result, the issuers now have sufficient funds to replenish their reserves. Improved borrower affordability is evidenced by the stabilization in three-month plus arrears across all the five transactions, as well as improved collection rates as seen on the quarterly MPS reports. As of October 2010, loans in arrears by more than three months ranged from 30.7 % (MPS1) to 33.9% (MPS4) and 27.7% for KMS. Collection rates as seen on the MPS quarterly reports ranged from 85.3% (MPS2) to 87.7% (MPS3) as of October 2010 (and November 2010 for MPS2) compared with 75.6% (MPS2) to 82.7% (MPS1) a year ago. While the stable trend in arrears is in line with other UK non- conforming transactions rated by Fitch, the actual levels of delinquencies seen in these transactions are significantly higher. These high levels of arrears pose a risk to the future performance of the assets. An increase in interest rates is expected to negatively impact the ability of borrowers to meet payments and could subsequently lead to even higher rates of defaults and losses. This is reflected in the Negative Outlooks on the M1 notes (MPS4), M2 notes (MPS3 and MPS4) and B1 notes (MPS2, MPS3 and MPS4). The transaction structures include pro-rata amortization triggers, some of which have already been breached and are not expected to be cured. This means that note amortization will remain sequential over the life of the transactions. Further, reserve fund amortization triggers have already been breached for all four MPS and KMS transactions. For both these reasons, further increase in credit support is expected and is thus reflected in the affirmation of the notes. The rating actions are: Money Partners Securities 1 Plc -- Class A2a (ISIN XS0226128329) affirmed at 'AAAsf'; Outlook Stable; Loss Severity (LS) Rating 'LS-3' -- Class A2b (ISIN XS0226129566) affirmed at 'AAAsf'; Outlook Stable; 'LS-3' -- Class A2c (ISIN XS0226156536) affirmed at 'AAAsf'; Outlook Stable; 'LS-3' -- Class M1 (ISIN XS0226131117) affirmed at 'AAAsf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class M2a (ISIN XS0226131463) affirmed at 'AAsf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class M2b (ISIN XS0226131620) affirmed at 'AAsf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class B1 (ISIN XS0226132198) affirmed at 'BBBsf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class B2 (ISIN XS0226132271) affirmed at 'BBsf'; Outlook revised to Stable from Negative; 'LS-4' Money Partners Securities 2 Plc -- Class A2a (ISIN XS0236411780) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2a-2011 coupons (ISIN XS0236521968) affirmed at 'AAAsf'; Outlook Stable -- Class A2c (ISIN XS0236412754) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2c-2011 coupons (ISIN XS0236528468) affirmed at 'AAAsf'; Outlook Stable -- Class M1a (ISIN XS0236413307) affirmed at 'AA-sf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class M1b (ISIN XS0236413489) affirmed at 'AA-sf'; Outlook Stable; LS rating revised to 'LS-3' from 'LS-4' -- Class M2a (ISIN XS0236740501) affirmed at 'BBBsf'; Outlook revised to Stable from Negative; 'LS-3' -- Class M2b (ISIN XS0236742036) affirmed at 'BBBsf'; Outlook revised to Stable from Negative; 'LS-3' -- Class B1 (ISIN XS0236413646) affirmed at 'BB-sf; Outlook Negative; 'LS-4' Money Partners Securities 3 Plc -- Class A2a (ISIN XS0254114712) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2a-2011 coupons (ISIN XS0254124430) affirmed at 'AAAsf'; Outlook Stable -- Class A2b (ISIN XS0254121337) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2b-2011 coupons (ISIN XS0254126567) affirmed at 'AAAsf'; Outlook Stable -- Class A2c (ISIN XS0254122814) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A2c-2011 coupons (ISIN XS0254129314) affirmed at 'AAAsf'; Outlook Stable -- Class M1a (ISIN XS0254130080) affirmed at 'AA-sf'; Outlook Stable; 'LS-3' -- Class M1b (ISIN XS0254130676) affirmed at 'AA-sf'; Outlook Stable; 'LS-3' -- Class M2a (ISIN XS0254130916) affirmed at 'BBBsf'; Outlook Negative; 'LS-4' -- Class M2b (ISIN XS0254131484) affirmed at 'BBBsf'; Outlook Negative; 'LS-4' -- Class B1a (ISIN XS0254132375) affirmed at 'BBsf'; Outlook Negative; LS rating revised to 'LS-5' from 'LS-4' -- Class B1b (ISIN XS0254132458) affirmed at 'BBsf'; Outlook Negative, LS rating revised to 'LS-5' from 'LS-4' -- Class B2a (ISIN XS0254132706) affirmed at 'CCCsf'; Recovery Rating 'RR4' -- Class B2b (ISIN XS0254307605) affirmed at 'CCCsf'; Recovery Rating 'RR4' Money Partners Securities 4 Plc -- Class A1a (ISIN XS0274950368) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A1a-2012 coupons (ISIN XS0275153392) affirmed at 'AAAsf'; Outlook Stable -- Class A1b (ISIN XS0274965556) affirmed at 'AAAsf'; Outlook Stable; 'LS-2' -- Detachable A1b-2012 coupons (ISIN XS0275154796) affirmed at 'AAAsf'; Outlook Stable -- Class M1a (ISIN XS0274969384) affirmed at 'AAsf'; Outlook Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class M1b (ISIN XS0274970713) affirmed at 'AAsf'; Outlook Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class M2a (ISIN XS0274972685) affirmed at 'BBBsf'; Outlook Negative; 'LS-4' -- Class M2b (ISIN XS0274974111) affirmed at 'BBBsf'; Outlook Negative; 'LS-4' -- Class B1a (ISIN XS0274978450) affirmed at 'BBsf'; Outlook Negative; 'LS-5' -- Class B1b (ISIN XS0274979185) affirmed at 'BBsf'; Outlook Negative; 'LS-5' -- Class B2 (ISIN XS0274980191) affirmed at 'CCCsf'; Recovery Rating 'RR4' Kensington Mortgage Securities plc - series 2007-1: -- Class A2 (ISIN XS0292638334): affirmed at 'AAAsf'; Outlook Stable; Loss Severity (LS)Rating revised to 'LS-2' from 'LS- 1' -- Class A2 DAC (XS0292642369): affirmed at 'AAAsf'; Outlook Stable -- Class A3a (ISIN XS0292638920): affirmed at 'AAsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-5' from 'LS-1' -- Class A3a DAC (XS0292644142): affirmed at 'AAAsf'; Outlook Stable -- Class A3b (ISIN XS0292652756): affirmed at 'AAsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-5' from 'LS-1' -- Class A3b DAC (XS0292651949): affirmed at 'AAAsf'; Outlook Stable -- Class A3c (ISIN XS0292640660): affirmed at 'AAsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-5' from 'LS-1' -- Class A3c DAC (XS0292653051): affirmed at 'AAAsf'; Outlook Stable -- Class M1a (ISIN XS0292639225): affirmed at 'BBBsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class M1b (ISIN XS0292651196): affirmed at 'BBBsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class M2b (ISIN XS0292639654): affirmed at 'Bsf'; Outlook revised to Stable from Negative; LS rating revised to 'LS-4' from 'LS-3' -- Class B1a (ISIN XS0292639902): affirmed at 'CCCsf'; Recovery Rating of 'RR4' -- Class B1b (ISIN XS0292651436): affirmed at 'CCCsf'; Recovery Rating of 'RR4' -- Class B2 (ISIN XS0292640157): affirmed at 'CCsf'; Recovery Rating of 'RR6' PUNCH TAVERNS: Bondholder Group Selects Rothschild as Adviser ------------------------------------------------------------- Anousha Sakoui and Rose Jacobs at The Financial Times report that a group of Punch Taverns bondholders has selected Rothschild as an adviser for future talks with the company. According to the FT, the committee, made up of members of the Association of British Insurers, is believed to include investors in different parts of Punch's three securitizations -- which together account for the company's GBP3 billion-plus net debt. Rothschild's appointment follows meetings this month, organized through the ABI, in which bondholders consulted a range of advisers, including Ernst & Young and Houlihan Lokey, an investment bank, the FT relates. As reported by the Troubled Company Reporter-Europe on Dec. 21, 2010, the FT said almost all of Punch's pubs are backed by debt, and a default would leave bondholders in control of more than 5,500 pubs. Other possible solutions being considered are a renegotiation of covenants, deferral of debt payments or a partial debt-for-equity swap, according to the FT. A restructuring of the funding vehicles Punch owns could be complex, as each has issued several tranches of bonds with different order of priority, some of which have been guaranteed by bond insurers, the FT noted. Punch Taverns plc -- http://www.punchtaverns.com/-- is a pub company in the United Kingdom, with over 8,400 pubs across its leased and managed portfolio. The Company is engaged in the trading activities in the operation of public houses either under the leased model or as directly managed by the Company. The leased model involves the granting of leases to tenants who operate the pub as their own business, paying rent to the Company, purchasing beer and other drinks from it and entering into profit sharing arrangements for income from leisure machines. Pubs that are directly managed involve the employment of a manager to operate each managed pub and the Group receives all revenues generated by the pub and is responsible for costs. During the fiscal year ended August 23, 2008, Punch Taverns plc acquired 20 pubs and 39 pubs were sold. RADICLE PROJECTS: Places Australian Unit Into Administration ------------------------------------------------------------ Radicle Projects Plc has placed Radicle Projects Pty Ltd, the Company's principal trading subsidiary, into voluntary administration. Consequently, trading in the Company's ordinary shares was immediately suspended pending clarification of the Company's financial position. Stephen J. Parbery, Brett S. Lord and Craig D. Crosbie of PPB Advisory, were appointed as Joint & Several Administrator of Radicle Pty. Following a recent final meeting with the creditors of Radicle Pty, the administrator has been authorized to undertake a sale of the realizable assets of Radicle Pty for the benefit of creditors. The realizable value of these assets is not yet clear and the disposal process is expected to take several months. "The Board is continuing to consider the options now available to it, including the possibility that the Radicle Projects be placed into administration. However the Board is in discussions with two unquoted Australian companies regarding a possible reverse take- over of the Company," Radicle Projects said. "These discussions are at an early stage and the eventual outcome is as yet uncertain." The Company is due to publish its report and accounts for the year to June 30, 2010, on or before December 31, 2010. Radicle Projects said that in current the circumstances it will not be possible to complete the 2010 audit nor publish the accounts before December 31, 2010. Radicle Projects Plc is a United Kingdom-based company. The Company is engaged in acquiring interests in a range of operations in horticulture, viticulture and forestry projects across Australia. SHIELD FINANCE: S&P Assigns 'B+' Rating to US$324 Mil. Senior Loan ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its 'B+' rating to the US$324 million-equivalent senior secured facilities issued by Shield Finance Co. S.A.R.L, one notch higher than the corporate credit rating on the guarantor, Sophos Ltd. (B/Stable/). At the same time S&P assigned a recovery rating of '2' to these facilities, reflecting S&P's expectation of substantial (70%-90%) recovery for noteholders in the event of a payment default. The issue and recovery ratings are supported by S&P's valuation of Sophos as a going concern under its hypothetical default scenario. This reflects S&P's view of the group's relatively high revenue visibility and leading market position in the integrated IT security and data protection software and applications market. S&P derive additional rating support from S&P's assessment of the debtholders' security package as comprehensive, with the group's intellectual property constituting a material part of this security. S&P estimates Sophos' stressed enterprise value to be about US$250 million at its simulated point of default in 2014. According to S&P's hypothetical default scenario, a default occurs in 2014, due to slow revenue growth and low profitability on account of a relatively high proportion of fixed costs. S&P incorporate about US$15 million of annual debt amortization into its analysis. S&P's issue and recovery ratings do not incorporate event risk linked to reputational damage. Should such an event occur, the business would be liquidated, in S&P's view, which would leave negligible value for the debtholders. Ratings List Ratings to Final from Prelim Shield Finance Co. S.A.R.L. Senior Secured To From -- ---- EUR61.9 mil fltg rate bank ln due B+ B+ (prelim) 06/15/2016* Recovery Rating 2 2 (prelim) To From -- ---- US$20 mil fltg rate bank ln due B+ B+ (prelim) 06/15/2016* Recovery Rating 2 2 (prelim) To From -- ---- US$229.4 mil fltg rate bank ln due B+ B+ (prelim) 06/15/2016* Recovery Rating 2 2 (prelim) * Guaranteed by Shield BidCo Ltd., Shield HoldCo Ltd., and Sophos Ltd. =============== X X X X X X X X =============== * Moody's Reviews Rating s on 53 Tranches from 14 European CLOs --------------------------------------------------------------- Moody's Investors Service has placed the ratings of 53 tranches in 14 European CLOs under review for possible upgrade. The rating actions are summarized in an Excel spreadsheet, which is posted as a link at the bottom of this announcement. Moody's explained that the rating review considers the positive implications of improvement in certain deal collateral quality metrics since the time of the previous rating actions, including WARF (weighted average rating factor) and OC (overcollateralization) levels. In identifying this list of transactions and tranches, Moody's examined the OC and WARF levels in conjunction with the current tranche rating level as well as the significance of changes in the key performance metrics. Moody's also paid attention to deals that have shown the largest positive moves in key metrics since last rating action, structural features and other deal characteristics in the consideration of the actions. Moody's recognizes that improved credit performance of the underlying collateral and favorable market conditions have had a positive impact on European CLOs. In many transactions Moody's observed successful reinvestment of principal repayments and sale proceeds into substitute assets with below-par purchase price and/or higher ratings. The CLOs also typically benefited from a reduction in par value haircuts due to a decrease in exposure to defaulted securities and/or Caa-rated securities. Moody's says that the review affects a majority of junior notes because they have one or more of these attributes: * Adequate OC coverage for the affected notes, which was considered in relation to the WARF level; * A substantial improvement in OC and WARF levels since last rating action; * The affected notes have either never deferred interest or have resumed paying interest; * Sufficient OC test "cushion" exists for the notes senior to the affected notes, which makes it less likely for the affected notes to defer interest in the near future; * Some of the affected notes benefit from a "turbo" amortization feature that enables them to delever ahead of more senior notes under certain conditions. While in many cases not all tranches from the same deal are placed under watch for upgrade, Moody's will review the entire capital structure when it conducts full analysis of each deal and take rating action when warranted. Moody's endeavors to complete full analysis of all affected deals within 90 days. The deals affected are collateralized loan obligations backed primarily by portfolios of senior secured loans. A list of the reviews associated with this announcement may be found at: Issuer: Bacchus 2006-1 plc -- EUR34M Class B Senior Secured Floating Rate Notes due 2022, Ba3 (sf) Placed Under Review for Possible Upgrade; previously on Apr 16, 2010 Downgraded to Ba3 (sf) -- EUR25.54M Class C Senior Secured Deferrable Floating Rate Notes due 2022, Caa3 (sf) Placed Under Review for Possible Upgrade; previously on Apr 16, 2010 Downgraded to Caa3 (sf) -- EUR14.8M Class X Combination Notes, Ca (sf) Placed Under Review for Possible Upgrade; previously on Apr 16, 2010 Downgraded to Ca (sf) -- EUR5M Class W Combination Notes, B3 (sf) Placed Under Review for Possible Upgrade; previously on Apr 16, 2010 Downgraded to B3 (sf) -- EUR69M Class Y Combination Notes, Ca (sf) Placed Under Review for Possible Upgrade; previously on Apr 16, 2010 Downgraded to Ca (sf) Issuer: CELF Loan Partners IV plc -- EUR42M Class B Senior Secured Deferrable Floating Rate Notes due 2023, A3 (sf) Placed Under Review for Possible Upgrade; previously on Oct 23, 2009 Downgraded to A3 (sf) -- EUR39M Class C Senior Secured Deferrable Floating Rate Notes due 2023, Ba1 (sf) Placed Under Review for Possible Upgrade; previously on Oct 23, 2009 Downgraded to Ba1 (sf) -- EUR33M Class D Senior Secured Deferrable Floating Rate Note due 2023, B1 (sf) Placed Under Review for Possible Upgrade; previously on Oct 23, 2009 Confirmed at B1 (sf) -- EUR25.5M Class E Senior Secured Deferrable Floating Rate Notes due 2023, Caa2 (sf) Placed Under Review for Possible Upgrade; previously on Oct 23, 2009 Downgraded to Caa2 (sf) Issuer: EUROCREDIT CDO VII PLC -- EUR31.2M Class C Senior Secured Deferrable Floating Rate Notes due 2023, Ba2 (sf) Placed Under Review for Possible Upgrade; previously on Aug 18, 2009 Downgraded to Ba2 (sf) -- EUR29.1M Class D Senior Secured Deferrable Floating Rate Notes due 2023, Caa1 (sf) Placed Under Review for Possible Upgrade; previously on Aug 18, 2009 Downgraded to Caa1 (sf) -- EUR19.8M Class E Senior Secured Deferrable Floating Rate Notes due 2023-1, Ca (sf) Placed Under Review for Possible Upgrade; previously on Aug 18, 2009 Downgraded to Ca (sf) -- EUR8M Class Q Combination Notes due 2023, Caa1 (sf) Placed Under Review for Possible Upgrade; previously on Aug 18, 2009 Downgraded to Caa1 (sf) -- EUR15M Class R Combination Notes due 2023, Ba3 (sf) Placed Under Review for Possible Upgrade; previously on Aug 18, 2009 Downgraded to Ba3 (sf) -- EUR3M Class V Combination Notes due 2023, Caa2 (sf) Placed Under Review for Possible Upgrade; previously on Aug 18, 2009 Downgraded to Caa2 (sf) Issuer: Hamlet I Leveraged Loan Fund B.V. -- EUR222M Class A Senior Secured Floating Rate Notes due 2020, Aa2 (sf) Placed Under Review for Possible Upgrade; previously on Feb 10, 2010 Upgraded to Aa2 (sf) -- EUR78M Class B Subordinated Notes due 2020, B1 (sf) Placed Under Review for Possible Upgrade; previously on Feb 10, 2010 Upgraded to B1 (sf) Issuer: Harvest CLO III plc -- EUR30.75M Euro 30,750,000 Class C-1 Senior Subordinated Deferrable Floating Rate Notes due 2021, Ba2 (sf) Placed Under Review for Possible Upgrade; previously on Dec 15, 2009 Downgraded to Ba2 (sf) -- EUR12M Euro 12,000,000 Class C-2 Senior Subordinated Deferrable Fixed Rate Notes due 2021, Ba2 (sf) Placed Under Review for Possible Upgrade; previously on Dec 15, 2009 Downgraded to Ba2 (sf) -- EUR16.75M Euro 16,750,000 Class D-1 Senior Subordinated Deferrable Floating Rate Notes due 2021, B2 (sf) Placed Under Review for Possible Upgrade; previously on Dec 15, 2009 Downgraded to B2 (sf) -- EUR9.25M Euro 9,250,000 Class D-2 Senior Subordinated Deferrable Fixed Rate Notes due 2021, B2 (sf) Placed Under Review for Possible Upgrade; previously on Dec 15, 2009 Downgraded to B2 (sf) -- EUR15.75M Euro 15,750,000 Class E-1 Senior Subordinated Deferrable Floating Rate Notes due 2021, Caa3 (sf) Placed Under Review for Possible Upgrade; previously on Dec 15, 2009 Downgraded to Caa3 (sf) -- EUR3M Euro 3,000,000 Class E-2 Senior Subordinated Deferrable Fixed Rate Notes due 2021, Caa3 (sf) Placed Under Review for Possible Upgrade; previously on Dec 15, 2009 Downgraded to Caa3 (sf) -- EUR10M Euro 10,000,000 Class V Combination Notes due 2021, B3 (sf) Placed Under Review for Possible Upgrade; previously on Dec 15, 2009 Downgraded to B3 (sf) Issuer: Hudson CLO 1 B.V. -- EUR27.5M Class A-3 Deferrable Senior Secured Floating Rate Notes due 2023, Ba2 (sf) Placed Under Review for Possible Upgrade; previously on Dec 11, 2009 Downgraded to Ba2 (sf) -- EUR24M Class B-1 Deferrable Senior Secured Floating Rate Notes due 2023, Caa1 (sf) Placed Under Review for Possible Upgrade; previously on Dec 11, 2009 Confirmed at Caa1 (sf) Issuer: Iron Hill CLO Limited -- US$14.007M Class B Senior Secured Deferrable Floating Rate Notes due 2025, Ba3 (sf) Placed Under Review for Possible Upgrade; previously on Aug 18, 2009 Downgraded to Ba3 (sf) -- US$16.342M Class C Senior Secured Deferrable Floating Rate Notes due 2025, B2 (sf) Placed Under Review for Possible Upgrade; previously on Aug 18, 2009 Downgraded to B2 (sf) Issuer: Laurelin B.V. -- EUR36M Class C Notes, Baa1 (sf) Placed Under Review for Possible Upgrade; previously on Aug 28, 2009 Upgraded to Baa1 (sf) -- EUR24M Class D Notes, Ba2 (sf) Placed Under Review for Possible Upgrade; previously on Aug 28, 2009 Upgraded to Ba2 (sf) Issuer: Leopard CLO V B.V. -- EUR13M Class E-1 Secured Deferrable Floating Rate Notes due 2023, Caa3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 17, 2009 Downgraded to Caa3 (sf) -- EUR3M Class E-2 Secured Deferrable Fixed Rate Notes due 2023, Caa3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 17, 2009 Downgraded to Caa3 (sf) -- EUR7M Class F Secured Deferrable Floating Rate Notes due 2023-1, Ca (sf) Placed Under Review for Possible Upgrade; previously on Nov 17, 2009 Downgraded to Ca (sf) Issuer: Magi Funding I plc -- EUR33.8M Euro 33,800,000 Class B Deferrable Floating Rate Notes due 2021, Ba3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 24, 2009 Confirmed at Ba3 (sf) -- EUR7.5M Euro 7,500,000 Class C Deferrable Floating Rate Notes due 2021, B3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 24, 2009 Confirmed at B3 (sf) Issuer: Prospero CLO I B.V. -- US$15.3M US$15,300,000 Class A-2 Senior Secured Floating Rate Notes Due 2017, A1 (sf) Placed Under Review for Possible Upgrade; previously on Dec 23, 2009 Downgraded to A1 (sf) -- US$15.3M US$15,300,000 Class B Senior Secured Deferrable Interest Floating Rate Notes Due 2017, Baa3 (sf) Placed Under Review for Possible Upgrade; previously on Dec 23, 2009 Downgraded to Baa3 (sf) -- US$15.3M US$15,300,000 Class C Senior Secured Deferrable Interest Floating Rate Notes Due 2017, Ba3 (sf) Placed Under Review for Possible Upgrade; previously on Dec 23, 2009 Downgraded to Ba3 (sf) -- US$7.7M US$7,700,000 Class D Senior Secured Deferrable Interest Floating Rate Notes Due 2017, Caa1 (sf) Placed Under Review for Possible Upgrade; previously on Dec 23, 2009 Downgraded to Caa1 (sf) Issuer: Prospero CLO II B.V. -- US$25M B Notes, Ba1 (sf) Placed Under Review for Possible Upgrade; previously on Jan 7, 2010 Downgraded to Ba1 (sf) -- US$15M C Notes, B1 (sf) Placed Under Review for Possible Upgrade; previously on Jan 7, 2010 Downgraded to B1 (sf) -- US$13.5M D Notes, Caa2 (sf) Placed Under Review for Possible Upgrade; previously on Jan 7, 2010 Downgraded to Caa2 (sf) Issuer: RMF Euro CDO III PLC -- EUR252M Class I Senior Secured Floating Rate Notes, due 2021, Aa2 (sf) Placed Under Review for Possible Upgrade; previously on Nov 20, 2009 Downgraded to Aa2 (sf) -- EUR20.1M Class II Senior Secured Floating Rate Notes, due 2021, A3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 20, 2009 Downgraded to A3 (sf) -- EUR14.7M Class III Deferrable Mezzanine Floating Rate Notes, due 2021, Baa3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 20, 2009 Confirmed at Baa3 (sf) -- EUR23.3M Class IV Deferrable Mezzanine Floating Rate Notes, due 2021, B1 (sf) Placed Under Review for Possible Upgrade; previously on Nov 20, 2009 Downgraded to B1 (sf) Issuer: RMF Euro CDO IV PLC -- EUR15.3M Class III Deferrable Mezzanine Floating Rate Notes, due 2022, Ba1 (sf) Placed Under Review for Possible Upgrade; previously on Nov 26, 2009 Confirmed at Ba1 (sf) -- EUR21.6M Class IV-A Deferrable Mezzanine Floating Rate Notes, due 2022, B2 (sf) Placed Under Review for Possible Upgrade; previously on Nov 26, 2009 Confirmed at B2 (sf) -- EUR12.6M Class V Deferrable Mezzanine Floating Rate Notes, due 2022, Caa2 (sf) Placed Under Review for Possible Upgrade; previously on Nov 26, 2009 Confirmed at Caa2 (sf) -- EUR3.5M Class IV-B Deferrable Mezzanine Fixed Rate Notes, due 2022, B2 (sf) Placed Under Review for Possible Upgrade; previously on Nov 26, 2009 Confirmed at B2 (sf) -- EUR6M Class R Combination Notes, due 2022 Notes, Caa3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 26, 2009 Downgraded to Caa3 (sf) -- EUR6M Class S Combination Notes, due 2022 Notes, B3 (sf) Placed Under Review for Possible Upgrade; previously on Nov 26, 2009 Downgraded to B3 (sf) -- EUR4M Class Q Combination Notes, due 2022 Notes, Caa1 (sf) Placed Under Review for Possible Upgrade; previously on Nov 26, 2009 Downgraded to Caa1 (sf) ********* 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, Psyche A. Castillon, 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 * * *