/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/110218.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, February 18, 2011, Vol. 12, No. 35 Headlines F R A N C E LABCO SAS: Moody's Assigns 'B2' Corporate Family Rating TITAN EUROPE: Fitch Cuts Ratings on Two Classes of Notes to 'Csf' G E R M A N Y WESTLB AG: German Government Submits Restructuring Proposal to EU H U N G A R Y ELECTRO WORLD: To Apply for Bankruptcy Protection in Few Weeks I C E L A N D LANDSBANKI ISLANDS: Parliament Approves New Icesave Deal I R E L A N D ZOE GROUP: NAMA Appoints Receiver to Draw Up Business Plan * IRELAND: EU Commission Warns of Risks to Banks' Rescue Plan N E T H E R L A N D S PANTHER CDO: Fitch Cuts Ratings on Four Classes of Notes to 'CC' R O M A N I A CITY MALL: Put Up for Sale for EUR33 Million * ROMANIA: Has Few Successful Company Restructuring Stories R U S S I A * OBLAST OF KIROV: Moody's Withdraws 'Ba3' Local Issuer Rating S P A I N IM FTGENCAT: Fitch Downgrades Rating on Class C Notes to 'CCsf' PARQUES REUNIDOS: S&P Assigns 'B-' Corporate Credit Rating TDA IBERCAJA: Moody's Assigns '(P)C(sf)' Rating to Class C Notes VALENCIA HIPOTECARIO: Fitch Affirms 'CCC' Ratings on Class D Notes S W I T Z E R L A N D CROWN FOREX: US Feds Want In on US$84M Civil Suit vs. Crown Forex U K R A I N E UKRTELECOM JSC: Creditors Withdraw Early Repayment Demand U N I T E D K I N G D O M ASHBROOKE FOODS: Goes Into Administration, Ceases Trading BUTTERFLY HOTELS: Akkeron Hotels Buys Himley Hotel, Saves 38 Jobs DECODE CAR: Placed Under Compulsory Liquidation FAREPAK: Nine Ex-Directors Face Directorship Disqualification HALLIWELLS: Owes GBP190 Million++, Administrator's Report Reveals MARINE INDUSTRY: Calls in Administrator as Boat Show Cancelled JOHNSON AND JOHNSON: Zutux Acquires Firm Out of Administration OJS JEWELLERY: Goes Into Liquidation OLDE BARN HOTEL: Goes Into Administration, Seeks Buyer PREMIER FOODS: Fitch Assigns 'BB' Long-Term Issuer Default Rating RB FARQUHAR: Elliot Buys RB Farquhar Hires Out of Administration VANWALL FINANCE: Fitch Affirms 'B-sf' Ratings on Two Tranches X X X X X X X X * EUROPE: To Double Lending Capacity of Rescue Fund in 2013 * EUROPE: Tremonti Blames Crisis on Poor Supervision of Banks * BOOK REVIEW: THE OUTLAW BANK ********* =========== F R A N C E =========== LABCO SAS: Moody's Assigns 'B2' Corporate Family Rating ------------------------------------------------------- Moody's Investors Service has assigned definitive B2 Corporate Family Rating and Probability of Default Rating to Labco S.A.S. Moody's has also assigned a definitive B3 rating to the company's EUR500 million 8.5% senior secured notes due 2018. The outlook is stable. Ratings Rationale The assignment of definitive B2 CFR and PDR follows the successful refinancing of Labco's existing financing structure through the issuance of EUR500 million senior secured notes, which was completed on January 14, 2011. As outlined in Moody's press release dated January 11, 2011, Labco's B2 CFR is constrained by (i) its high leverage (initially at around 6.0x on a gross debt basis and including Moody's adjustments); (ii) overall limited size; (iii) complex organizational structure in France and (iv) some regulatory risks (in particular related to tariff cuts). This is mitigated by (i) its position as one of Europe's largest players in the highly fragmented European clinical laboratory services market; (ii) the company's good profitability and business model which allows for the benefits of scale and derivation of synergies; (iii) favorable growth prospects in terms of volume; and (iv) resilience to economic downturns. The stable outlook reflects a business profile which, despite the risk of price cuts, demonstrates relatively good visibility and Moody's expectation of continued positive free cash flow generation. Moody's also assigned a definitive B3 rating (LGD 4, 58%) to the EUR500 million 8.5% senior secured notes due 2018 issued by Labco S.A.S., which is one notch below the B2 CFR. The rating of the notes reflects its ranking behind the company's EUR125 million super senior revolving credit facility. While both instruments have the same guarantee (representing not less than 70% of consolidated EBITDA) and security package, the latter consisting of pledges over shares of certain group entities and certain intercompany loans, the revolving credit facility benefits from an enforcement action relating to the guarantees or share pledges ahead of the notes in the defined waterfall. Labco is a pan-European clinical laboratory services provider. The company operates more than 230 laboratories across six different European countries and mainly performs routine tests. The company generated revenue of EUR424 million in 2009. TITAN EUROPE: Fitch Cuts Ratings on Two Classes of Notes to 'Csf' ----------------------------------------------------------------- Fitch Ratings has downgraded all classes of Titan Europe 2006-3's notes: -- EUR357.3m Class A (XS0257767631) downgraded to 'Asf' from 'AAsf'; Outlook Stable -- EUR237.5m Class B (XS0257768522) downgraded to 'CCCsf' from 'BBsf'; Recovery Rating 'RR3' -- EUR50.2m Class C (XS0257769090) downgraded to 'CCsf' from 'CCCsf'; Recovery Rating 'RR6' -- EUR54.8m Class D (XS0257769769) downgraded to 'CCsf' from 'CCCsf'; Recovery Rating 'RR6' -- EUR36.7m Class E (XS0257770007) downgraded to 'Csf' from 'CCsf'; Recovery Rating 'RR6' -- EUR29.1m Class F (XS0257770775) downgraded to 'Csf' from 'CCsf'; Recovery Rating 'RR6' The downgrades follow the announcement by the special servicer, Hatfield Philips International (rated 'CSS3+'), that the collateral for the SQY Ouest loan has been sold at a material discount to its initial valuation, well in excess of the discount that had been expected by Fitch. The loan-level loss will result in a partial write-down of the class E notes and a full write-down of the class F notes. The sale of the SQY Ouest Shopping Centre was executed in February 2011 for a price of EUR38 million. This represents a 71% drop in value since the original valuation of EUR130.8 million (carried out in May 2005). Notably, the sale price is also well below the July 2009 value of EUR73.3 million. The special servicer expects a net recovery of approximately EUR35.1 million which, net of swap breakage costs and liquidity drawings, will result in a loss of 75% of the current loan balance and 73% of the original loan balance. As the loan accounted for 13% of the portfolio balance at the October 2010 interest payment date, this will result in a loss of 10% of the current portfolio balance and 9% of the original portfolio balance. In order to improve recoveries, a claim is being pursued against the original valuer for negligence. Fitch has not given credit to any potential recoveries from this source in its analysis. The SQY Ouest loan was secured by a shopping centre constructed in 2005, located 20km south-west of Paris. Income had deteriorated since closing, primarily due to rental arrears, which stood at EUR5.2 million in January 2011, compared to contracted rent of EUR6 million. Consequently, the borrower had been unable to make debt service payments since April 2009. ============= G E R M A N Y ============= WESTLB AG: German Government Submits Restructuring Proposal to EU ----------------------------------------------------------------- Nikki Tait, James Wilson and Quentin Peel at The Financial Times report that a potential solution to long-running problems at WestLB AG emerged on Wednesday after the German government submitted to Brussels a restructuring plan that would in effect break up the bank. According to the FT, European Union competition officials, who have been battling to secure a restructuring scheme for the bank which meets EU state aid rules, said they were analyzing the outline submission as well as a much less radical but more detailed proposal put forward by the bank itself. "I will be in contact with the federal government in the coming days to discuss the next steps," the FT quotes EU competition commissioner Joaquin Almunia, who warned last year of an increasing possibility that the bank would have to be wound down, as saying. The FT says the German government proposals are believed to offer a basis from which the EU competition watchdog would be willing to work. They envisage that part of WestLB, with a balance sheet about one-quarter the size of the current EUR220 billion, would become a bread-and-butter service provider to German savings banks, which would own the business and put in capital, the FT states. The FT relates that a government official said remaining assets would be put up for sale -- including the bank's corporate banking business -- or transferred to an existing "bad bank" scheme and wound down. WestLB as an entity would disappear, the FT states. According to the FT, sources in Brussels as well as in Berlin believe the more radical restructuring plan is much more likely to satisfy Mr. Almunia's demands that WestLB be sustainably restructured. The FT notes that people close to WestLB said its proposal was "realistic" taking into account the limited chance of successful asset sales. Steffen Kampeter, a deputy German finance minister, said he assumed the restructuring plan would meet commission demands and that the plan for WestLB to join the savings bank network could receive approval, the FT discloses. WestLB's Restructuring Plan As reported by the Troubled Company Reporter-Europe on Feb. 17, 2011, the Financial Times said WestLB's owners agreed to split the bank into four separate units and slash its asset base in a last- minute compromise to try to meet the concerns of European competition authorities. The proposal was presented shortly before the expiry of a Tuesday deadline but the bank must now wait to find out whether the suggested restructuring meets the demands of Joaquin Almunia, the EU's competition commissioner, the FT disclosed. The bank, whose need for repeated state bail-outs makes it a serial offender in the eyes of EU competition watchdogs, has been under orders since 2009 to cut its balance sheet by half and sell key subsidiaries as recompense for a bail- out, the FT recounted. Its owners also agreed to a change of ownership by the end of this year, the FT noted. Under the updated restructuring plan, WestLB will cut its assets by a further one-third by 2015, the FT disclosed. It will also create four internal units to facilitate spin-off sales or consolidation into other banks, the FT said. WestLB said on Tuesday the plan would require unspecified "burden-sharing" among its owners -- the state of North Rhine-Westphalia and the German government, according to the FT. About WestLB Headquartered in Duesseldorf, Germany, WestLB AG (DAX:WESTLB) -- http://www.westlb.com/-- provides financial advisory, lending, structured finance, project finance, capital markets and private equity products, asset management, transaction services and real estate finance to institutions. In the United States, certain securities, trading, brokerage and advisory services are provided by WestLB AG's wholly owned subsidiary WestLB Securities Inc., a registered broker-dealer and member of the NASD and SIPC. WestLB's shareholders are the two savings banks associations in NRW (25.15% each), two regional associations (0.52% each), the state of NRW (17.47%) and NRW.BANK (31.18%), which is owned by NRW (64.7%) and two regional associations (35.3%). ============= H U N G A R Y ============= ELECTRO WORLD: To Apply for Bankruptcy Protection in Few Weeks -------------------------------------------------------------- MTI-Econews, citing business daily Vilaggazdasag, reports that Electro World Magyarorszag will apply for bankruptcy protection within a few weeks. According to MTI, Csaba Polgar, chairman of the company's board, told the paper that bankruptcy protection is unavoidable in the current situation as EWM is unable to repay its debts after payment of its normal operating costs. MTI relates that Mr. Polgar said EWM has a business partner with which the company could offer substantial real-estate collateral for the financing bank. Electro World closed its store in Budakalasz, near Budapest, on Feb. 14, MTI discloses. Electro World Magyarorszag is a Hungarian electronic goods retailer. ============= I C E L A N D ============= LANDSBANKI ISLANDS: Parliament Approves New Icesave Deal -------------------------------------------------------- Andrew Ward at The Financial Times reports that Iceland's parliament on Wednesday approved a fresh deal with Britain and the Netherlands to repay EUR4 billion lost in the failed Icesave bank, but the country's president was facing mounting pressure to refer the agreement to a referendum. The FT notes that while parliament voted by 44-16 in favor of the agreement, support was growing behind a public petition calling on President Olafur Ragnar Grimsson to put the legislation to a national vote. According to the FT, more than 30,000 people -- nearly a tenth of the Icelandic population -- have so far backed the petition, reflecting continued anger over the prospect of taxpayers being forced to foot the bill for foreign deposits lost when the country's banking sector collapsed in 2008. Mr. Grimsson, whose role is mostly ceremonial, has refused to rule out another referendum, while insisting he will not make a decision until after the legislation is delivered to his desk, the FT relates. The deal involves money lost by more than 300,000 British and Dutch depositors who held high-interest accounts with Icesave, the online arm of bankrupt Landsbanki, the FT discloses. Those customers have already been reimbursed from their domestic deposit insurance schemes, leaving the UK and Dutch treasuries out of pocket, the FT recounts. The Icelandic government has promised to repay the money but its efforts to do so have been repeatedly thwarted by fierce public opposition, the FT states. Critics question Iceland's legal obligation to reimburse foreign deposits and claim the case has exposed flaws in European cross-border banking rules, according to the FT. Under the new agreement, interest payment would start immediately and principal repayments in 2016, with repayments spread over a maximum of 37 years, the FT discloses. As reported by the Troubled Company Reporter-Europe, Bloomberg News said Iceland reached an agreement in December 2010 on terms to compensate the British and Dutch. The accord will cost the Icelandic government ISK47 billion (US$407 million), compared with the ISK162 billion in costs the state was facing under a previous accord, according to Bloomberg. About Landsbanki Islands Landsbanki Islands hf, also commonly known as Landsbankinn in Iceland, is an Icelandic bank. The bank offered online savings accounts under the "Icesave" brand. On October 7, 2008, the Icelandic Financial Supervisory Authority took control of Landsbanki and two other major banks. Landsbanki filed for Chapter 15 protection on Dec. 9, 2008 (Bankr. S.D. N.Y. Case No.: 08-14921). Gary S. Lee, Esq., at Morrison & Foerster LLP, represents the Debtor. When it filed for protection from its creditors, it listed assets and debts of more than US$1 billion each. ============= I R E L A N D ============= ZOE GROUP: NAMA Appoints Receiver to Draw Up Business Plan ---------------------------------------------------------- Laura Noonan at Irish Independent reports that the National Asset Management Agency on Tuesday appointed a "super receiver" to draw up a business plan for Liam Carroll's Zoe Group. According to Irish Independent, an insolvency specialist from accountancy firm Deloitte has been drafted in as principal receiver to help Nama secure repayment on loans of about EUR650 million. Irish Independent relates that the news comes more than 18 months after a raft of banks installed receivers across Mr. Carroll's empire after an examinership bid failed. Nama has since taken on a EUR650 million pile of loans advanced by AIB, Bank of Ireland, Anglo Irish Bank and EBS to companies across the Carroll group, Irish Independent notes. The four banks had been chasing their debts with separate receivers, who were also fighting it out with a raft of receivers appointed by non-Nama banks including Ulster Bank and Bank of Scotland (Ireland), Irish Independent discloses. Nama, Irish Independent says, now wants to streamline that process, first by co-ordinating the approach of all four Nama receivers under the principle receiver and ultimately by releasing the others from their duties and having just one receiver looking after all Nama's interests. A single receiver is seen as cheaper and also facilitates the creation of a comprehensive business plan for the group, according to Irish Independent. Irish Independent relates that sources said the business plan will have to include a significant reduction in debt and may finally lead to the disposal of some of the Carroll group's assets including stocks of apartments in Dublin city. It may also include some request for ongoing financing, which could see the receiver requesting cash to finish the iconic half- finished building that was to house Anglo Irish Bank's headquarters, Irish Independent notes. The Deloitte receiver, David Carson, was already acting as a receiver for Bank of Ireland in the Carroll case and so is already familiar with the case, which may speed up the process, Irish Independent discloses. Deloitte will also have to work with receivers acting for several other non-Nama banks including Grant Thornton, which is chasing EUR82 million owed to Ulster Bank, and Ernst & Young which is pursuing EUR321 million owed to Bank of Scotland (Ireland), Irish Independent says. When the business ran aground in the summer of 2009, it owed EUR490 million to AIB; EUR321 million to Bank of Scotland (Ireland); EUR112 million to Bank of Ireland; EUR82 million to Ulster Bank; EUR38 million to Anglo Irish Bank; EUR23 million to KBC and EUR8.5 million to EBS, Irish Independent recounts. Zoe Group is a property development business in Ireland. * IRELAND: EU Commission Warns of Risks to Banks' Rescue Plan ------------------------------------------------------------- Arthur Beesley at The Irish Times reports that the European Commission has warned of significant risks to the rescue plan for Ireland's banks, saying they may yet require additional capital if loan losses mount. The Irish Times relates that a day after the Government postponed the injection of EUR10 billion into AIB, Bank of Ireland and the EBS, the commission said in review of Ireland that unforeseen loan losses could undermine the assumptions made in the program. The commission's review, one in a series of occasional papers by its economic staff, also warned of "considerable uncertainty" underlying the macroeconomic projections in the plan, The Irish Times notes. According to The Irish Times, the commission said elevated spreads could persist for an extended period if the rescue program was slow to restore market credibility and sentiment could worsen in light of adverse developments in other countries. On the banking sector, the review cited the EUR10 billion recapitalization plan to create large capital buffers and noted a further EUR25 billion would be available in case further unforeseen losses were to be revealed, The Irish Times discloses. "In particular, such losses could be driven by the deleveraging process, which is expected to begin after completion of the prudential liquidity assessment review [for] 2011," The Irish Times quotes the commission as saying. "Also, were the macroeconomic situation to worsen significantly beyond the scenarios envisaged under the stress tests, further pressures on banks' asset quality and solvency could call for additional capital injections." However, the report said liquidity management exercises such as those at AIB and Bank of Ireland could be a strong mitigating factor reducing recapitalization needs, The Irish Times notes. "In addition, BOI is looking for external sources of capital to keep the bank majority private-owned," the commission, as cited by The Irish Times, said. The Irish Times notes that the commission also warned deleveraging in the financial sector may be hampered by adverse market conditions, which could prevent asset sales. New legislation on the question of burden-sharing by subordinated investors could affect the price of new bond issuances, The Irish Times says. The report also warned of implementation risks, The Irish Times states. "The planned reforms are substantial, will take a number of years, and engage a wide range of stakeholders both public and private," the commission, as cited by The Irish Times, said. ===================== N E T H E R L A N D S ===================== PANTHER CDO: Fitch Cuts Ratings on Four Classes of Notes to 'CC' ---------------------------------------------------------------- Fitch Ratings has taken various actions on Panther CDO I B.V.'s, Panther CDO IV B.V.'s and Panther CDO V B.V.'s notes: Panther I -- Class I (XS0124334763) affirmed at 'AAA'; Outlook Stable; Loss Severity Rating 'LS-1' -- Class II (XS0124334847) affirmed at 'BB'; Outlook Negative; 'LS-3' -- Class III (XS0124335497) downgraded to 'CC' from 'CCC' Panther IV -- Class A-1 (XS0276065124) affirmed at 'BBB'; Outlook revised to Negative from Stable; Loss Severity Rating 'LS-3' -- Class A-2 (XS0276066361) downgraded to 'B' from 'BB; Outlook Negative; 'LS-5' -- Class B (XS0276068730) downgraded to 'CCC' from 'B' -- Class C (XS0276070553) downgraded to 'CC' from 'CCC' Panther V -- Class A1 (XS0308593671) affirmed at 'A'; Outlook revised to Negative from Stable; 'LS-2' -- Class A2 (XS0308594059) downgraded to 'BB' from 'BBB'; Outlook Negative; 'LS-4' -- Class B (XS0308594489) downgraded to 'B' from 'BB'; Outlook Negative; 'LS-5' -- Class C (XS0308594729) downgraded to 'CCC' from 'B' -- Class D (XS0308595296) downgraded to 'CC' from 'CCC' -- Class E (XS0308595536) downgraded to 'CC' from 'CCC' The transactions are managed by Prudential M&G Investment Management Limited. The affirmations of Panther I's class I and II notes, Panther IV's class A-1 notes and Panther V's class A1 notes reflect sufficient support for the ratings, driven by an adequate level of available credit enhancement. However, the Outlooks on Panther IV's class A-1 notes and Panther V's class A1 notes have been revised to Negative due to the high concentration of low rated assets in the portfolios. The downgrades of Panther IV's class A-2, B and C notes reflect the decline of available credit enhancement caused by the negative credit migration of the assets. Panther IV defaulted assets have increased by 4.8% since March 2010 and now represent 6.63% of the target par amount of the transaction. In addition, 21.1% of the portfolio is rated 'CCC' or lower and the majority of the bucket are Structured Finance assets, for which Fitch has very low recovery expectations. Despite an overall good performance since the last review, Panther V's class A2 to E notes have been downgraded as a result of the portfolio quality and unsustainability of its current levels of credit enhancement compared to the level of 'CCC' or below rated assets, which primarily comprise RMBS, CDO and CMBS assets with low recovery expectations. Panther I is deleveraging and its tranches have improved levels of credit enhancement. However, the class III notes have been downgraded due to its low interest coverage level, which may result in the use of principal proceeds to maintain the interest current with a high fixed coupon. ============= R O M A N I A ============= CITY MALL: Put Up for Sale for EUR33 Million -------------------------------------------- SeeNews, citing news portal Wall-street.ro, reports that the City Mall shopping center in Bucharest, which has entered bankruptcy procedures, will be put up for sale at a starting price of EUR33 million (US$44.7 million). SeeNews relates that Wall-street.ro said the first auction is scheduled for the end of March and a second one could take place by June, depending on the investors' interest. According to SeeNews, Radu Lotrean, managing partner at the Insolvency House Transilvania, City Mall's administrator, as quoted by Wall-Street.ron, said the mall is still operating, despite the ongoing insolvency procedures. SeeNews says local banks UniCredit and Bancpost have to recover a combined EUR41 million in debts from the City Mall. In November, Australian investment fund APN European Retail Property Group filed for insolvency of its subsidiary Victoria Holding, which owns the mall, SeeNews recounts. SeeNews notes that Wall-street.ro said Coldwell Banker Affiliates has recently taken over the management of the mall. * ROMANIA: Has Few Successful Company Restructuring Stories ----------------------------------------------------------- Liviu Chiru at Ziarul Financiar reports that Romania has too few successful restructuring stories. According to Ziarul Financiar, on the few examples of successful company debt restructuring, bankers and entrepreneurs have now turned into adversaries, and over-indebted companies are taking their problems to a point where their entering bankruptcy becomes inevitable. Ziarul Financiar relates that Arin Stanescu, chairman of the National Union of Romania's Insolvency Practitioners, said at present, only 5% of the companies in default come to implement a financial turnaround plan, while the rest go directly toward bankruptcy. At present, over 20,000 insolvency cases are open, Ziarul Financiar discloses. "The number of insolvencies climbed in 2010 and it is likely to rise further in 2011. It is not earlier than 2012 that the number of insolvency cases will go down, once the economy recovers," Ziarul Financiar quotes Mr. Stanescu as saying. =========== R U S S I A =========== * OBLAST OF KIROV: Moody's Withdraws 'Ba3' Local Issuer Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn the Ba3 local currency issuer rating with stable outlook for the Oblast of Kirov (Russia). At the same time, Moody's Interfax Rating Agency has withdrawn Kirov's Aa3.ru national scale rating. Ratings Rationale Moody's Investors Service has withdrawn the credit rating for its own business reasons. Moody's last rating action on the Oblast of Kirov was implemented on December 10, 2007, when the rating agencies assigned a Ba3 issuer rating with a stable outlook and an Aa3.ru national scale rating to the region. The Oblast of Kirov is situated in north-eastern European Russia and has around 1.4 million inhabitants (1% of Russia's population). Local industry is concentrated in machinery building, chemistry and timber industries 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. ========= S P A I N ========= IM FTGENCAT: Fitch Downgrades Rating on Class C Notes to 'CCsf' --------------------------------------------------------------- Fitch Ratings has downgraded IM FTGENCAT SABADELL 2's notes: -- EUR271.7m Class A(G) notes; downgraded to 'Asf' from 'AA-sf'; Outlook Negative; Loss Severity rating 'LS-1' -- EUR121.1m Class A(S) notes have been paid in full -- EUR19.8m Class B notes; downgraded to 'CCCsf' from 'Bsf'; assigned a Recovery Rating of 'RR3' -- EUR5.7m Class C notes; downgraded to 'CCsf' from 'CCCsf', Recovery Rating revised to 'RR6' The downgrade reflects the transaction's continued poor performance over the past year and the expectation that while performance appears to be stabilizing, it is unlikely to improve. Over the past year, the reserve fund has continued to be drawn, thus reducing the available credit enhancement for the junior notes. The reserve fund now appears to have stabilized at slightly over EUR1 million, however this remains well below the EUR9.5 million target. The small reserve fund means the junior tranches are highly exposed to any further spikes in defaults. Fitch expects performance to remain under pressure over the short to medium term, with late-state delinquencies remaining elevated. To date, recoveries have been minimal and when they do start coming in, Fitch expects them to be low. Consequently, Fitch has downgraded the class A(G) notes to the rating of the Generalitat de Catalunya (Autonomous Community of Catalonia;'A'/Negative/'F1') which guarantees these notes. The class B notes have been downgraded to reflect the limited protection offered by the nearly depleted reserve fund and by the thin class C tranche. The class C notes have been further downgraded to reflect the limited protection offered by the nearly depleted reserve fund. The transaction also benefits from 50bps of excess spread under the interest rate swap with Banco de Sabadell ('A'/Stable/'F1'). However, in the past this has been insufficient to cover all the defaults that have occurred (resulting in repeated draws on the reserve fund). Fitch expects the excess spread provided by the interest rate swap to continue to be insufficient to cover the defaults that are expected to materialize over the medium term. The transaction is a cash flow securitization of a pool of finance leases on real estate and certain other assets originated in Spain by Banco de Sabadell. Only the lease receivables portion of the lease contracts are securitized (any residual value component has not been securitized). All obligors are small and medium-sized enterprises located in the region of Catalunya, the home region of the originator. PARQUES REUNIDOS: S&P Assigns 'B-' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'B-' long-term corporate credit rating to Spain-based Parques Reunidos Servicios Centrales, S.A.U., the world's No. 3 leisure parks operator. The outlook is stable. S&P also assigned a 'B-' long-term debt rating to the proposed US$430 million senior secured bond due 2018 to be co-issued by Palace Entertainment Holdings, LLC, a 100%-owned U.S. subsidiary of Parques Reunidos, and Palace's fully owned finance subsidiary Palace Entertainment Holdings Corp. Given Palace's 100% ownership by Parques Reunidos, S&P considers Palace to be a material subsidiary and have assessed the corporate credit rating on a group consolidated basis. S&P assigned a recovery rating of '4' to the proposed bond, indicating S&P's expectation of average (30%-50%) recovery for bondholders in the event of a payment default. S&P's ratings on the proposed bond issue are subject to the successful issuance of the bond and its review of final documentation. Any change in the amount, terms, or conditions of the bond issue and/or the RCF would have to be reviewed by Standard & Poor's and could affect the current bond ratings. "The corporate credit rating primarily reflects S&P's view of Parques Reunidos' high financial leverage and of the high seasonality of its operations," said Standard & Poor's credit analyst Florence Devevey. S&P estimates that, pro forma for the pending bond issue, debt to EBITDA was about 8x on Sept. 30, 2010 (about 6x excluding shareholder loans), after adjusting for operating leases and including EUR325 million of existing and US$65 million of new shareholder loans. S&P fully net its adjustment for the US$82 million additional new shareholder loan, which, S&P understand, will sit on Parques Reunidos' balance sheet as a cash cushion, assuming the bond is successfully placed. S&P understands that the shareholder's intention is to use this cash cushion for a potential equity cure at the European financing level. S&P believes that debt to EBITDA will only decline moderately in the future, with a cash flow sweep in Europe and overall EBITDA growth being partially offset by the payment-in-kind characteristics of the shareholder loans. The company's cash generation capacity, as reflected in its close to 3x unadjusted EBITDA-to-cash interest coverage ratio for the full year to end- September 2010, pro forma for the proposed transaction, mitigates its high leverage. In addition, S&P assess Parques Reunidos' business risk profile as "weak." This primarily reflects S&P's view of the company's high seasonality, with close to 95% of its EBITDA generated during the summer months. "The stable outlook reflects S&P's view of Parques Reunidos' future solid operating performance and positive free cash flow generation," said Ms. Devevey. "This should contribute, in S&P's opinion, to sustainable consolidated Standard & Poor's-adjusted EBITDA interest coverage in the 1.5x-2.0x range." S&P could lower the corporate credit and bond ratings if the company is unable to maintain positive free cash flow generation, or if adjusted EBITDA interest coverage falls below the aforementioned target. Conversely, rating upside could result from adjusted leverage falling below 6.0x. However, given the moderate pace of deleveraging, S&P views this scenario as remote for the time being. TDA IBERCAJA: Moody's Assigns '(P)C(sf)' Rating to Class C Notes ---------------------------------------------------------------- Moody's Investors Service has assigned provisional ratings to the class A, B, and C notes issued by TDA IBERCAJA 7 FTA. The ratings take into account the credit quality of the underlying mortgage loan pool, the transaction structure and any legal considerations: -- (P)Aa3(sf) to the EUR1.9 billion Class A, due 2060 -- (P)Ba3(sf) to the EUR100 million Class B, due 2060 -- (P)C(sf) to the EUR70 million notes Class C, due 2060 Ratings Rationale The expected portfolio loss of 2.0% of the current balance of the portfolio and the MILAN Aaa Credit Enhancement of 10.35% served as input parameters for Moody's cash flow model, which is based on a probabilistic lognormal distribution, as described in the report "The Lognormal Method Applied to ABS Analysis", published in September 2000. The key drivers for the MILAN Aaa CE number, which is slightly higher than MILAN Aaa CE in other Ibercaja RMBS transactions, are: (i) that 5.01% of the pool is made up of debt consolidation mortgages; (ii) that 15.45% of the pool is made up of self- employed; (iii) that 3.99% of the pool is made up of second homes and 3.71% are non owner occupied; and (iv) uncertainty stemming from systemic risk and the deteriorating Spanish economic environment. The key driver for the portfolio expected loss is the performance of previous Ibercaja deals. In particular, Moody's has taken into account the delinquency information reported for similar transactions. This figure is better than comparable Spanish transactions, reflecting the relatively low weighted average loan-to-value (LTV) of the portfolios and the superior historical performance of previous Ibercaja transactions. The notes are backed by a pool of prime Spanish mortgages granted to individuals by Ibercaja (A2, Prime-1 on review for possible downgrade). The properties are residential located in Spain. As of January 2011, the mortgage pool balance consisted of approximately EUR1.87 billion. The reserve fund is funded at 3.69% of the total outstanding pool and will be used to pay senior fees, interest and principal shortfalls on the notes during the life of the deal. Transaction documentation does not contain a trigger for the appointment of a back-up servicer. This implies a certain degree of linkage between the rating of the notes and the servicer. All of the payments under the loans in this pool are collected by the servicer under a direct debit scheme into the collection account held at Ibercaja and are transferred to the reinvestment account on a monthly basis. Upon the loss of Ibercaja's Prime-1 rating, collections will be transferred on a weekly basis. The V-score for this transaction is medium, which is in line with the V-score assigned for the Spanish RMBS sector as a whole. Only one sub-component underlying the V-score (alignment of interests) has been assessed as being higher than the average for the Spanish RMBS sector at medium. This is because borrowers in arrears pay a high level of penalty interest at 19%, which is paid prior to recoveries to the Fondo. This could negatively affect the alignment of interest between the servicer and the special-purpose vehicle, as there is limited incentive for the servicer to foreclose quickly. V-scores are a relative assessment of the quality of available credit information and of the degree of dependence on various assumptions used in determining the rating. High variability in key assumptions could expose a rating to more likelihood of rating changes. The V-score has been assigned in accordance with the report, "V-Scores and Parameter Sensitivities in the Major EMEA RMBS Sectors", published in April 2009. At the time the rating was assigned, the Moody's parameter sensitivities model output indicated that the class A notes would have achieved a Aa3 if the expected loss was as high as 2.0%, assuming a MILAN Aaa CE as high as 10.35% and with all other factors being constant. Moody's parameter sensitivities provide a quantitative/model-indicated calculation of the number of rating notches that a Moody's structured finance security would vary if certain input parameters used in the initial rating process differed. The analysis assumes that the deal has not aged and is not intended to measure how the rating of the security might migrate over time. Rather, it measures how the initial rating of the security might have differed if Moody's vary key rating input parameters. Moody's calculate parameter sensitivities for the typical EMEA RMBS transaction by stressing key variable inputs in Moody's primary rating model. Moody's Investors Service received and took into account a third party due diligence report on the underlying assets or financial instruments in this transaction and the due diligence report had a neutral impact on the rating. VALENCIA HIPOTECARIO: Fitch Affirms 'CCC' Ratings on Class D Notes ------------------------------------------------------------------ Fitch Ratings has downgraded three tranches of Valencia Hipotecario 4 and affirmed all other tranches of four Spanish RMBS transactions originated by Banco de Valencia. In addition, the agency has revised the Outlook on one tranche to Negative. In Fitch's view, although the four collateral pools share similar characteristics, the transactions' performance varies markedly because of the different origination years of the underlying loans. 93% of the current loan balance for Valencia Hipotecario 1 was originated before 2003, whereas 85% of the current loan balance for Valencia Hipotecario 4 was originated in 2006 or 2007. As a result, when the macro-economic environment deteriorated in Spain, the later transactions had been given less time to deleverage and therefore borrowers struggled more with affordability. Although loan-to-value ratios were comparable across the four transactions, it is likely that borrowers in the later transactions faced higher initial mortgage installments. This is because of the strong house price appreciation in Spain up until 2007, and therefore for a given LTV, the amount borrowed was higher. Similarly, in Fitch's opinion, it is likely that the later vintages will see lower recoveries. The downgrade of Valencia Hipotecario 4's class A, B and C notes reflects the problems that the transaction continues to experience. To date, it has experienced high cumulative defaults, at 4.9% of the initial collateral balance, and a higher proportion of delinquent loans than would typically be expected for a Spanish prime RMBS transaction. The below par performance and low level of gross excess spread mean that the reserve fund has been fully utilized, to help provision for defaulted loans. While the provisioning mechanism, applicable in these transactions after loans have been delinquent for 18 months, is designed to assist a transaction, Valencia Hipotecario 4 has been unable to cope with the volume of defaults. This has led to the continued rise in unprovisioned loans to EUR22.92 million, which is a concern. In January 2011, the interest on the class C note was deferred for the first time, as a support for the more senior notes. Valencia Hipotecario 2 and 3 also have low levels of gross excess spread, and are therefore also exposed to an increase in period defaults, which has been the trend across all four transactions. The increase in period defaults in 2010 was the result of borrowers who fell into arrears in 2008 and 2009 migrating through the arrears buckets into a state of 18 months in arrears. In both transactions, gross excess spread has been insufficient to fully provision defaulted loans, and consequently the reserve fund of each transaction has been drawn. However, unlike Valencia Hipotecario 4, neither of the reserve funds has diminished by more than 20% to date, and it is currently expected that recoveries on unsold repossessions will be sufficient to replenish both reserve funds to their target level. Nonetheless, Fitch will continue to carefully monitor this trend of rising defaults, and the 3.37% level of credit enhancement leaves the class B note of Valencia Hipotecario 3, rated 'A+sf', vulnerable to further deterioration in performance, hence the revision of the Outlook to Negative. Valencia Hipotecario 1's weighted average current LTV is 41.17%, and although it is a well seasoned deal, the percentage of loans with arrears greater than 3 months (excluding defaults) has not risen above 0.56% of the outstanding collateral balance. Furthermore, as with all of the transactions, the vast majority of the underlying loans reference a 12-month index, which means that borrowers are expected to feel the effects of a potential rise in interest rate on a lagged basis. Fitch received clarification from the gestora, Europea de Titulizacion, that the sudden fall in arrears in Valencia Hipotecaria 2, 3 and 4 was the result of an IT correction by Banco de Valencia, following a conversion to a new IT system. This initially caused an overestimation of arrears levels because it failed to include and adjust for the loans that had recovered from an arrears state. This fault was not as pronounced for Valencia Hipotecario 1 as the volume of loans in arrears has consistently been low. The downgrade of Banco de Valencia to 'BBB-' and its placement on Rating Watch Negative on February 4, 2011 makes Banco de Valencia ineligible as interest swap provider under Fitch's structured finance counterparty criteria. In this circumstance, the posting of collateral is not considered sufficient to mitigate the counterparty risk. Fitch will contact the issuer and report its actions in due course. The rating actions are: Valencia Hipotecario 1, Fondo de Titulizacion de Activos: -- Class A (ISIN ES0382744003): affirmed at 'AAAsf'; Outlook Stable; assigned a Loss Severity Rating 'LS-1' -- Class B (ISIN ES0382744011): affirmed at 'AA-sf' ; Outlook Stable; assigned a LS Rating 'LS-2' -- Class C (ISIN ES0382744029): affirmed at 'BBB+sf'; Outlook Stable; assigned a LS Rating 'LS-3' Valencia Hipotecario 2, Fondo de Titulizacion de Hipotecario: -- Class A (ISIN ES0382745000): affirmed at 'AAAsf'; Outlook Stable; assigned a LS Rating 'LS-1' -- Class B (ISIN ES0382745018): affirmed at 'A+sf'; Outlook Stable; assigned a LS Rating 'LS-2' -- Class C (ISIN ES0382745026): affirmed at 'BBB+sf'; Outlook Negative; assigned a LS Rating 'LS-3' -- Class D (ISIN ES0382745034): affirmed at 'CCCsf'; Recovery Rating revised to 'RR3' from 'RR2' Valencia Hipotecario 3, Fondo de Titulizacion de Activos: -- Class A2 (ISIN ES0382746016): affirmed at 'AAAsf'; Outlook Stable; assigned a LS Rating 'LS-1' -- Class B (ISIN ES0382746024): affirmed at 'A+sf'; Outlook revised to Negative from Stable; assigned a LS Rating 'LS-3' -- Class C (ISIN ES0382746032) affirmed at 'BBBsf'; Outlook Negative; assigned a LS Rating 'LS-3' -- Class D (ISIN ES0382746040): affirmed at 'CCCsf'; Recovery Rating revised to 'RR4' from 'RR3' Valencia Hipotecario 4, Fondo de Titulizacion de Activos: -- Class A (ISIN ES0382717009): downgraded to 'A-sf' from 'AAAsf'; Outlook Stable; off RWN; assigned a Loss Severity Rating 'LS-1' -- Class B (ISIN ES0382717017): downgraded to 'Bsf' from 'A-sf'; Outlook Negative; off RWN; assigned a LS Rating 'LS-3' -- Class C (ISIN ES0382717025) downgraded to 'CCCsf' from 'BBsf'; assigned a Recovery Rating of 'RR4' -- Class D (ISIN ES0382717033): affirmed at 'CCsf'; Recovery Rating revised to 'RR6' from 'RR4' ===================== S W I T Z E R L A N D ===================== CROWN FOREX: US Feds Want In on US$84M Civil Suit vs. Crown Forex ----------------------------------------------------------------- Bankruptcy Law360 reports that U.S. federal prosecutors are seeking to jump into a U.S. Commodity Futures Trading Commission civil suit accusing the principals and subsidiaries of Crown Forex SA of perpetrating a massive foreign exchange scheme to defraud investors of US$84 million. As reported in the Troubled Company Reporter-Europe on June 16, 2009, Reuters said that Crown Forex SA Chairman Ibrahim Ali said the foreign exchange provider had appealed to the Federal Administrative Tribunal against a bankruptcy ruling by Swiss markets regulator FINMA. Reuters recalled FINMA ruled on Feb. 23, 2009, to liquidate Crown following a money laundering investigation. Mr. Ali, as cited by Reuters, said the investigation had hampered the company's efforts to meet the requirements for a banking license, including an audit. Reuters related that according to Mr. Ali, Crown was cleared but FINMA took control of the company anyway, citing possible liquidity issues. In a May 29 report, Reuters disclosed the financial regulator took control of Crown on Dec. 9, 2008. It declared the company bankrupt on May, 29, 2009, the report said. Based in Bassecourt, Switzerland, Crown Forex SA -- http://www.crownforex.com/-- offers trading on 13 currency pairs + gold and silver. ============= U K R A I N E ============= UKRTELECOM JSC: Creditors Withdraw Early Repayment Demand --------------------------------------------------------- According to TeleGeography, Millenium Capital, citing an anonymous insider speaking to Interfax on Feb. 15, reported that Credit Suisse and Deutsche Bank have withdrawn their demands for Ukrtelecom to make early repayment of a US$222 million debt. TeleGeography says the company, which is in the process of being sold by the Ukrainian government to Austrian investors, has reportedly negotiated a new debt restructuring plan which comes into force once it makes good on a semi-annual interest payment of US$56 million by Feb. 25. Epic Bid In a Feb. 13 report, The Financial Times disclosed that Epic, a Vienna-based investment house, has agreed to acquire a 93% stake in Ukrtelecom for US$1.3 billion after rivals were excluded from the privatization tender. Peter Goldscheider, Epic's managing partner, told the FT that his group "will accept" the government's offer and hopes to close the acquisition of Ukrtelecom in March after talks with banks to finance the purchase. According to the FT, Mr. Goldscheider said Epic planned to use its vast telecoms advising experience to restructure Ukrtelecom and exit the investment in four to five years through an initial public offering, a sale to a strategic investor or a combination of the two. The government offer values Ukrtelecom at just US$10 million more than the US$1.3 billion starting price that was set in the privatization tender last December, the FT said. A highly bureaucratic and mismanaged corporate dinosaur, Ukrtelecom has lost much of its value in the past decade, falling years behind European peers in terms of introducing new telecoms technologies, the FT noted. Ukrtelecom earned only US$6 million in the first half of last year, the FT stated. Ukrtelecom VAT (Ukrtelecom JSC) -- http://www.ukrtelecom.ua/-- is a Ukraine-based national telecommunication operator. It provides telephone communication services throughout Ukraine, rendering all kinds of telecommunication services: international, long-distance and local telephony; data transmission including based on Asynchronous Transfer Mode (ATM)/Frame Relay technology; Internet network access including dial-up and broadband access based on digital subscriber line (xDSL) technologies; granting dedicated switched circuits for use; Integrated Services Digital Network (ISDN); video-conference communication; satellite and wire communication; technical maintenance of radio and television broadcasting networks, telegraph and telex communication. The Company operates through 33 branches locates countrywide. =========================== U N I T E D K I N G D O M =========================== ASHBROOKE FOODS: Goes Into Administration, Ceases Trading --------------------------------------------------------- Meatinfo.co.uk reports that Ashbrooke Foods has been placed into administration and ceased trading. The report relates that the company had run up substantial debts and the administrators SFP then took the decision to shut the business. SFP's Daniel and Simon Plant, both licensed members of the Insolvency Practitioners' Association, were appointed joint administrators of Ashbrooke Foods on Jan. 24, 2011. "Cashflow management is vital for the health of a business, and when debts build up; if help is not sought straight away then a company faces the chance of failing. Despite efforts of finding an alternative solution, Ashbrooke Foods has now ceased to trade and the assets are being sold to secure funds to repay the creditors," meatinfo.co.uk quotes Simon Plant, group partner at SFP, as saying. Headquartered in Sunderland, Ashbrooke Foods is a meat wholesaler. The company employed six people at its warehouse. BUTTERFLY HOTELS: Akkeron Hotels Buys Himley Hotel, Saves 38 Jobs ----------------------------------------------------------------- Dudley News reports that all 38 jobs at Himley hotel have been saved after the company went into administration. The report relates that Best Western Himley Country Hotel was part of Butterfly Hotels Limited, but after the parent company was put into administration, Akkeron Hotels Group Limited stepped in to take over, maintaining business as usual. All staff at the 65-bedroom Himley Country Hotel on the Shropshire and Staffordshire border have been transferred into Akkeron under TUPE regulations, alongside a further nine hotels previously run by Butterfly Hotels Limited, purchased for an undisclosed sum, according to Dudley News. Butterfly Hotels mainly owned businesses in East Anglia and the Midlands. DECODE CAR: Placed Under Compulsory Liquidation ----------------------------------------------- Andrew Penman, writing for Mirror.co.uk, reports that Decode Car Hire Ltd and Travel Market Ltd have been put into compulsory liquidation. Mirror.co.uk relates that the companies reportedly took deposits for holiday cars which never materialized. According to mirror.co.uk, the High Court on Feb. 16, 2011, approved an Insolvency Service petition to shut down Decode Car Hire Ltd and Travel Market Ltd, whose Web sites included suncar.co.uk, decodecarrentals.com, rubbe.com and car-rent- malaga.com. Decode Car Hire Ltd and Travel Market Ltd have a network of car hire operations with offices in London and Brighton but run from Latvia. FAREPAK: Nine Ex-Directors Face Directorship Disqualification ------------------------------------------------------------- Simon Bowers at guardian.co.uk reports that ex-Rentokil chief Sir Clive Thompson and Blacks Leisure boss Neil Gillis are among nine former directors of Farepak and its parent company European Home Retail who could be banned. According to the report, nine former board members at the failed Christmas hamper business Farepak and its parent company have been accused of being "unfit to manage a company" and are facing a move by the government to have them disqualified from acting as directors. Guardian.co.uk relates that the former board members include Sir Clive Thompson, who as chief executive of Rentokil for 20 years built it into a FTSE-100 business before moving to chairman between 2002 and 2004. Mr. Thompson was chairman of European Home Retail, which collapsed into administration four and a half years ago. Others potentially facing disqualification include the chief executive of Blacks Leisure, Neil Gillis, who announced last week that he intended to resign from the outdoor goods retailer. He had been a non-executive director of EHR, guardian.co.uk report. Swindon-based Farepak collapsed in October 2006, leaving more than 100,000 people out of pocket. Martha H Thompson and Shagun Dubey of BDO Stoy Hayward LLP were appointed joint administrators of Farepak Food & Gifts Ltd., Farepak Hampers Ltd., Farepak Holdings Ltd., and Farepak Mail Order Ltd. on Oct. 13, 2006. HALLIWELLS: Owes GBP190 Million++, Administrator's Report Reveals ----------------------------------------------------------------- Claire Ruckin at legalweek.com reports that the latest report from administrators BDO revealed that Halliwells owed unsecured creditors more than GBP190 million. Legalweek.com relates that to date, BDO has received claims worth GBP191.5 million from unsecured creditors. Landlord and lease creditors account for GBP182.2 million of claims received to date, with Her Majesty's Revenue & Customs the next largest creditor with some GBP4.3 million in taxes and GBP1.1 million in VAT, according to legalweek.com. Legalweek.com notes that the debt figure is significantly higher than the GBP14.1 million originally thought to be owed to unsecured creditors. At that point, HMRC was identified as the largest of the non-preferential creditors, legalweek.com relates. Legalweek.com discloses that BDO's report, drawn up by BDO partners and joint administrators Dermot Power and Shay Bannon and on Feb. 11 shows: * GBP176.5 million is owed to landlord creditors while lease creditors are claiming GBP5.7 million. The figure takes into account the remaining term of all leases on the firm's former offices in Manchester, Liverpool, London and Sheffield. * the administrators have run up fees of GBP805,487 for 3,847 hours of work at an average rate of GBP209.36 each hour. Of these fees, GBP524,354 were approved for pre-appointment costs, while GBP364,475.85 have been approved in connection with post-appointment work between July 20, 2010, and Oct. 15, 2010. * a total of GBP384,756 relates to expenses incurred by the administrators on legal fees, and an additional GBP606,082 has been paid in pre-appointment legal fees. Other information contained within the report includes a breakdown of how much Hill Dickinson, Kennedys Law, Barlow Lyde & Gilbert and HBJ Gateley Wareing have paid to date for their acquisitions of parts of Halliwells, legalweek.com says. So far, the firms have paid GBP4.3 million of the GBP7.4 million agreed, legalweek.com adds. Halliwells is a law firm based in Manchester. MARINE INDUSTRY: Calls in Administrator as Boat Show Cancelled -------------------------------------------------------------- Andrew Brook at Yachting Monthly reports that Marine Industry Events, the organizers of the Liverpool Boat Show, are calling on administrators to sort out the collapse of the show following news of its cancellation. Rob Mackenzie, managing director of MIE, told Yachting Monthly that he hoped some of the company's 14 staff members would be retained by any future Liverpool Boat Show, but he admitted that the company had been 'destroyed'. According to the report, James Gower, the show's commercial and marketing director, promised that the cancellation would not leave any ticket holders out of pocket. "Ticket holders will get a refund. Details of how to claim it will go up on the show's website," Yachting Monthly quotes Mr. Gower as saying. Yachting Monthly notes that the Web site said that the box office will contact ticket holders about their Liverpool Boat Show refund. Yachting Monthly says Mr. Gower, however, revealed that exhibitors may not be so lucky. "We are calling the administrators in and they will deal with the exhibitors in the proper manner," Yachting Monthly quotes Mr. Gower as saying. Yachting Monthly relates that Mr. Gower said not-cancelling the show after the withdrawal of many exhibitors would have been like 'opening Sainsbury's when there is nothing on the shelves'. Discussions have now begun between Liverpool City Council and other local partners, such as urban regeneration company Liverpool Vision, to see if an alternative event can be staged, but MIE will have no further involvement in this process, Yachting Monthly adds. JOHNSON AND JOHNSON: Zutux Acquires Firm Out of Administration -------------------------------------------------------------- Messenger reports that Johnson and Johnson was bought from administrators by on-line retailer Zutux and secured 30 jobs in the process. The report relates that the GBP1 million-plus deal was sealed almost two weeks after Johnson and Johnson went into administration. Administrators had made 50 of the 70-strong workforce redundant, according to Messenger. Messenger notes that Zutux said all employees who were on the payroll when it took over have been retained, and some of those who were axed by the administrators will be re-employed. The new bosses plan to extend the business with new ranges of furniture to be made in the Johnson and Johnson factory and sold online through the Zutux Web store, the report says. Messenger adds that the company's Trafford Park showroom will be maintained and extended. Headquartered in Trafford Park, Johnson and Johnson is a kitchen furniture manufacturer firm. OJS JEWELLERY: Goes Into Liquidation ------------------------------------ Rachael Taylor at Professional Jeweller reports that OJS Jewellery, which owned the Kolorbox jewellery brand, has gone into liquidation. The company went into liquidation on Feb. 8, 2011. According to the report, OJS Jewellery was part of the CMJ, and sales director Oliver Crouch said that he "would like to thank all CMJ members for their support over the years". Professional Jeweller discloses that KolorBox was a range of 18ct gold jewellery set with a kaleidoscope of gemstones from diamonds to peridot and aquamarine. The brand, says the Professional Jeweller, had a wide distribution in the U.K. and on its Web site claimed to supply to 67 retailers including Finnies in Aberdeen, Townsend Jewellers in Wetherby, TJ Davies in Aberstwyth, Johnsons in Nuneaton and James Jewellers in Hants. OJS Jewellery is family-run Birmingham-based company that specializes in "auxiliary jewellery" and coloured stone jewellery. OLDE BARN HOTEL: Goes Into Administration, Seeks Buyer ------------------------------------------------------ Insider Media Limited reports that the Olde Barn Hotel is seeking a buyer for its business after falling into administration. Lyn Vardy and Ian Green of PwC have been appointed joint administrators for the hotel. The administrators are seeking a buyer which will allow the business to continue to trade. The company is currently operating as normal and future events and bookings are still being honored, confirmed PwC, according to Insider Media Limited. "The hospitality industry continues to suffer in the economic downturn. Due to falling demand, trading has suffered in recent months. The company was facing difficulty in meetings its financial obligations so we have been appointed to protect the business to allow it to continue trading while seeking a purchaser. We are looking to secure the rapid sale of the business and assets of The Olde Barn Hotel and consequently we are very keen to speak to anyone who might have an interest in acquiring all, or part, of the business or assets of the company," Insider Media Limited quotes Lyn Vardy, joint administrator and director at PwC, as saying. The Olde Barn Hotel is located in Lincolnshire. It employs 74 people. PREMIER FOODS: Fitch Assigns 'BB' Long-Term Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has assigned Premier Foods plc a Long-term Issuer Default Rating of 'BB' with a Stable Outlook. The 'BB' Long-term IDR reflects Premier Foods' profile as the UK's largest branded ambient grocery manufacturer and bread baker and flour miller with a 6.8% market share in the fragmented and competitive GBP25 billion UK ambient grocery market. It manufactures and markets products across many food categories and owns iconic British brands. The company therefore benefits from the diversity and scale in terms of manufacturing, logistics and procurement in the UK, which has also enabled it to demonstrate innovation and brand stretch capabilities to adjacent food categories. However, these positive strengths are balanced by the company's reliance on the UK. Fitch notes that this is an intended strategy by Premier Foods as it chooses to compete in categories generally not core to multi-nationals. This strategy limits competitive threats from larger multi-national players. In addition, Premier Foods has a healthy competitive position in many of its food categories where it holds a number one or two market position. Premier Foods also faces the threat of competition from food retailers' own private label brands. However, Fitch notes that the private label trend is reversing as the growth of private label decelerates. Fitch considers the group's historical financial risk profile was weak for the rating level. Aggressive expansion plans, particularly in the past few years have had a negative impact on credit metrics. Additional interest payments stemming from financial derivatives (interest rates swaps) and restructuring costs have drained cash flows. The rating also takes into account the company's ability to accelerate deleveraging with the disposal of its meat-free business and its East Anglian canned grocery operations in addition to positive free cash flow generation. Lease-adjusted net debt/EBITDAR is expected to be below 3.5x in FYE11 (year ending December 2011) from 4.4x (pre-disposal) in FYE10. Management's commitment to reduce leverage (internal target average gross debt/EBITDA of below 3.25x) provides further comfort to Fitch's assessment. However, Fitch acknowledges that management is committed to improving both organic performance and its financial profile, as announced in its trading strategy in February 2010 and financial strategy in August 2010. On October 19, 2010, management successfully completed the restructuring of its interest rate swap portfolio, removing a considerable amount of financial risk and volatility from its balance sheet and cash flows. Fitch has capitalized the interest on the restructured swaps, resulting in better fixed charge coverage ratios. FFO fixed charge coverage is expected to improve to around 3x in FYE10 from 1.5x in FYE09. Positive rating actions would reflect progress towards a sustainable lease adjusted net debt/EBITDAR below 2.0x and EBITDAR/fixed charges above 4.0x on the current business profile. Continued product innovation and pricing power through cycles that together deliver improved operating EBITDA margins above 16% and demonstrate a more robust market position could support a higher rating level. Fitch expects the company to demonstrate organic sales growth capabilities as integration, restructuring and disposal plans are largely completed. A negative rating action could follow from sustained declining profitability such that EBITDA margin deteriorates to below 14%, lease-adjusted net debt/EBITDAR is above 4.5x, and EBITDA/fixed charges below 2.5x. Fitch also expects PF to generate a minimum of GBP100 million in FCF per annum for debt reduction. RB FARQUHAR: Elliot Buys RB Farquhar Hires Out of Administration ---------------------------------------------------------------- Scott McCulloch at Business7 reports that RB Farquhar Hires has been bought out of administration by Elliot Group for an undisclosed sum. The report relates that as part of the sale, all 72 employees will now be transferred along with the company's assets to the new owner. "It is very good news that we have now finalized the sale of this well-known local business in a little over three months. Our experience in this field helped identify potential bidders and with 32 companies expressing an interest we were confident of finding a new buyer," Business7 quotes Blair Nimmo, head of restructuring for KPMG in Scotland, as saying. As reported in the Troubled Company Reporter-Europe on November 8, 2010, The Scotsman said that the directors of RB Farquhar (Holdings) and three of its subsidiaries appointed Blair Nimmo and Gary Fraser of KPMG Restructuring as joint administrators, putting 112 jobs at risk. According to The Scotsman, the company's hires and storage divisions, RB Farquhar (Hires) and Simply Self Storage, which employs 77 and four staff respectively, will continue to trade as normal while KPMG seeks a buyer. However, RB Farquhar (Manufacturing) has stopped trading, though KPMG said "a number of" remaining contracts were expected to be fulfilled, The Scotsman related. It and the holding company employ 31 staff and, while no redundancies were made, a question mark hangs over those posts, The Scotsman noted. Based in Huntly, RB Farquhar (Holdings) produces prefabricated bathroom pods. VANWALL FINANCE: Fitch Affirms 'B-sf' Ratings on Two Tranches ------------------------------------------------------------- Fitch Ratings has affirmed the outstanding tranches of Vanwall Finance plc. All notes classes have Stable Outlooks. The rating actions are: -- GBP168.3m class A (XS0242555570) affirmed at 'AAAsf'; Outlook Stable -- GBP87.1m class B (XS0242558244) affirmed 'BBBsf'; Outlook Stable -- GBP34.9m class C (XS0242558913) affirmed at 'BBsf'; Outlook Stable -- GBP17.4m class D (XS0242559994) affirmed at 'Bsf'; Outlook Stable -- GBP31.8m class E (XS0242561032) affirmed at 'B-sf'; Outlook Stable -- GBP10.2m class F (XS0242561891) affirmed at 'B-sf'; Outlook Stable The affirmations reflect the stable performance of the underlying loan since the last review in February 2010, which reflects the ongoing rental performance of Toys 'R' Us Limited, the UK subsidiary of Toys 'R' Us, Inc. ('B'/Rating Watch Positive) and the sole tenant in the portfolio. Given the long lease, which has 24 years remaining until first break, the tenant is a critical factor in asset valuation. On a vacant possession value, the portfolio would be heavily discounted in current conditions, since it is still a buyer's market for secondary UK retail warehouse and industrial sectors that characterize many of its constituent assets. However, the part of the portfolio comprising above- average quality warehouses in relatively good locations could appeal to specialist investors even in the absence of the tenant. In its analysis, Fitch assumes a default of the tenant in all rating scenarios above its Long-term IDR. Since this would coincide with loan default, portfolio VPV is the constraint on recovery proceeds, as calculated in Fitch's analysis by projecting future income on the basis of gradual re-let at reduced rents, deducting various costs, and capitalizing resultant net income at stressed cap rates. While difficult to compute from information provided, Fitch estimates a whole LTV ratio in excess of 100%, which points to the difficulties the borrower faces in redeeming the loan by scheduled maturity in April 2013. In Fitch's opinion, this level of risk is consistent with the ratings assigned to the different notes classes, as noted above. Vanwall Finance plc is the securitization of a single loan secured by a portfolio of 30 retail warehouses and a single distribution warehouse, all fully-let to Toys 'R' Us Limited on identical leases with 24 years remaining. =============== X X X X X X X X =============== * EUROPE: To Double Lending Capacity of Rescue Fund in 2013 ----------------------------------------------------------- James G. Neuger and Stephanie Bodoni at Bloomberg News report that European governments agreed to double the lending capacity of the rescue fund for debt-laden countries in 2013, while seeing no need for immediate steps to shield Portugal from the fiscal crisis. According to Bloomberg, Finance ministers decided that the future emergency aid mechanism will be able to lend EUR500 billion (US$675 billion), twice the size of the fund set up in the wake of Greece's near-default last year. "The situation on the sovereign-debt markets remains worrying," Bloomberg quotes Luxembourg Prime Minister Jean-Claude Juncker as saying after chairing a meeting of European finance ministers in Brussels on Sunday. "The Portuguese authorities did take effective actions. If this action would reveal itself as not having been sufficient, other measures will have to be taken, but I have no indications that this has to be done in the short term." * EUROPE: Tremonti Blames Crisis on Poor Supervision of Banks ------------------------------------------------------------- Jeffrey Donovan at Bloomberg News reports that Italian Finance Minister Giulio Tremonti accused European governments of failing to adequately supervise the banking industry and helping to spark the global financial crisis. "In Europe there was the problem of a lack of vigilance of the private-finance industry, while at the same time there was proper surveillance of public finances," Bloomberg quotes Mr. Tremonti as saying at a news conference in Rome on Wednesday. "We want the truth recognized: that the crisis we are experiencing was produced by banks and by those who didn't supervise them. Everyone understands that." According to Bloomberg, Italy, along with Greece, objects to proposed European Union sanctions on heavily indebted countries that fail to meet quantitative debt-reduction targets. Mr. Tremonti has said he wants the EU to build in exemptions for countries such as Italy with low levels of private debt and sound banks, Bloomberg relates. * BOOK REVIEW: THE OUTLAW BANK ------------------------------ by Jonathan Beaty and S. C. Gwynne. Beard Books, Washington, D.C. 2004 (reprint of book published by Random House in 1993) 399 pages. US$34.95 trade paper, ISBN 1-58798-146-7. Toward the end of their labyrinthine study of an international financial scam running over 20 years, the authors are prophetic: "Since none of the rules [allowing for the BCCI scam] have changed, there is nothing to prevent other BCCIs from springing up in the artfully created regulatory gaps. And no one in authority wants the rules to change." The BCCI scam which was disclosed in the early 1990s prefigured the scams in the field of finance and investing that have come to light in 2008 and are continuing to be reported and investigated. The $20 million involved in the BCCI scandal made it the biggest financial scandal in history up to the 1990s. The investigative reporters, Messrs. Beaty and Gwynne, see that BCCI and the worldwide network of individuals at all levels of private business and government became exposed because of their excesses. If they had been less greedy and a little more discreet, the BCCI operation could likely have continued indefinitely. But this is how such scandals usually come to an end -- the greed becomes uncontrollable, those involved become reckless. Messrs. Beaty and Gwynne track how BCCI originated, how it grew phenomenally, and how it came apart at the seams. BCCI stands for Bank of Credit and Commerce. The Pakistani Agha Hasan Abedi founded the bank in 1972. Promoting it as the Third World's first multinational bank, he was soon getting involvement from sponsors and investors throughout the Middle East and in the United States. Bert Lance, Jimmy Carter's short-lived budget director, and Clark Clifford, at the time legendary Washington D.C. "fixer", were early sponsors profiting from BCCI's growth and connections. The book grew from the authors reporting on the unfolding BCCI scandal for Time magazine. This account has more dimensions than even a long-running investigative journalism report given much space in a news periodical could hope to deal with. With unparalleled maneuverability to expose the story from their association with the major news magazine Time and consummate investigative journalism skills, Messrs. Beaty and Gwynne accomplish the best account possible of the mind-boggling scandal. But as their prophecy near the end implies, there is no neat conclusion nor sense of finality to the story. Some of the perpetrators and some of the enablers such as Clifford have faced prosecution and have plea bargained or been found guilty. But rather than been brought to accountability, nearly all those involved have been instead dispersed to become involved in other enterprises whose bases and aims are bound to be suspect. Several of the key players who provided much of the inside information to the dogged authors are given pseudonyms so as not to put them at risk for reprisals by any of the dozens of persons involved in BCCI who are going about their lives as if nothing had happened. The book is not a reworking or even simple expansion of the authors' investigative journalism for Time magazine. Even those familiar with the BCCI story will find the book engaging. With the colorful characters continually popping up, the high financial states, international scope, and touches of danger, it reads like a gripping espionage novel. Both authors were leaders in investigative reporting in their careers at Time magazine. Now retired, Jonathan Beaty is writing a book on the CIA and Middle East arms dealing. S. C. "Sam" Gwynne was an international banker at one time, and is now executive editor of Texas Monthly Magazine. ********* 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, Julie Anne G. Lopez, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2011. 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 * * *