/raid1/www/Hosts/bankrupt/TCREUR_Public/110302.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, March 2, 2011, Vol. 12, No. 43
Headlines
G R E E C E
ALPHA BANK: Closes Door on NBG Merger Offer
I C E L A N D
GLITNIR BANK: Puts Stake in All Saints Up for Sale
GLITNIR BANK: Case v. Former Executives, PwC Won't Reopen
GLITNIR BANK: Expects ISK42-Bil. Payout From Iceland Foods
KAUPTHING BANK: Puts Stake in All Saints Up for Sale
LANDSBANKI ISLANDS: Expects ISK42-Bil. Payout From Iceland Foods
LAUGAVEGUR BOOKSTORE: High Rent Prompts Bankruptcy
I R E L A N D
ANGLO IRISH BANK: DBRS' B Issuer Rating Unmoved by Asset Transfer
SILENUS LIMITED: Moody's Junks Rating on Class D Notes
* IRELAND: May Allow Central Bank to Initiate Bank Wind-Ups
* IRELAND: 130 Creditor Meetings Held in February, Vision-net Says
P O L A N D
ELECTUS SA: Fitch Upgrades National Long-Term Rating to 'BB-'
R U S S I A
NOMOS BANK: Fitch Assigns 'BB-' Rating to RUB5-Bil. Exchange Bonds
RUSIA PETROLEUM: Gazprom Wins Rights to Kyovkta Gas Field
S P A I N
AYT COLATERALES: S&P Assigns 'BB (sf)' Rating on Class B Notes
BBK I: Fitch Assigns 'BBsf' Rating to Class C Notes
BBK I: Moody's Downgrades Rating on Class D Notes to 'B3 (sf)'
BBK II: Fitch Assigns 'BBsf' Rating to Class C Notes
BBK II: Moody's Downgrades Rating on Class D Notes to 'Ca (sf)'
CM BANCAJA: S&P Puts 'B-' Rating on Class D Notes on Watch Neg.
TDA IBERCAJA: S&P Assigns 'BB (sf)' Rating on Class D Notes
S W I T Z E R L A N D
BARRY CALLEBAUT: S&P Corrects Ratings on EUR850-Mil. Facility
U N I T E D K I N G D O M
CASTLE STREET: Goes Into Administration, Owes Half a Dozen Bars
PRIVET CAPITAL: Okehampton Staff Call for Job News
* UNITED KINGDOM: Colchester Council Wipes Out GBP262,000 of Debts
*********
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G R E E C E
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ALPHA BANK: Closes Door on NBG Merger Offer
------------------------------------------
Kerin Hope at The Financial Times reports that Alpha Bank has
closed the door on a merger offer by larger rival, National Bank
of Greece, saying it would amount to the "quasi-nationalization"
of a private lender.
The FT relates that Michael Masourakis, Alpha's chief economist,
pointed out on Thursday that NBG's senior management, including
the chief executive, was replaced after every election by the
incoming government.
The FT notes that while the state owns less than 5% of NBG's
shares directly, the government in effect exercises control
through a 12% stake held by state pension funds.
According to the FT, Mr. Masourakis wrote in Alpha's weekly review
of the Greek economy that the merger of Alpha Bank with a bank
such as NBG "would mean its quasi-nationalization and the loss of
a competitive advantage, namely the stability of its management."
The FT says Greek banks still face a liquidity squeeze because of
the country's debt crisis. They have lost access to wholesale
funding markets because of the perceived risk of a sovereign
default, the FT discloses.
As reported by the Troubled Company Reporter-Europe on Feb. 23,
2011, Bloomberg News said that Alpha's board voted unanimously
Feb. 18 to spurn National Bank's offer of about EUR5.50 in shares.
The bid values Alpha at about half its book value, a lower
multiple than in the previous four European bank takeovers in
Europe of more than US$1 billion in the past year, data compiled
by Bloomberg show.
Alpha Bank A.E. (the Bank) is a banking and financial services
company in Greece, offering a range of services, including retail,
small and medium-sized enterprise (SME) and corporate banking,
credit cards, asset management, investment banking, private
banking, brokerage, leasing and factoring. The Company offers
corporate and retail banking, financial services, investment
banking and brokerage services, insurance services, real estate
management and hotel activities. It operates under the brand name
of ALPHA BANK. The Bank has six business segments: Retail
Banking, Corporate Banking, Asset Management and Insurance,
Investment Banking and Treasury, South Eastern Europe, and Other.
* * *
As reported by the Troubled Company Reporter-Europe on Dec. 28,
2010, Fitch Ratings placed Alpha Bank's 'BB+' subordinated notes
rating, 'B+' junior subordinated debt rating and 'B+' hybrid
capital rating on rating watch negative. The bank's 'D'
individual rating was unaffected.
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I C E L A N D
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GLITNIR BANK: Puts Stake in All Saints Up for Sale
--------------------------------------------------
Rowena Mason at The Telegraph reports that All Saints looks set to
change hands after liquidators to two collapsed Icelandic banks
put their stakes in the high street clothing retailer up for sale.
The Telegraph relates that liquidators of Kaupthing Bank and
Glitnir Bank have appointed Ernst & Young to advise on the sale
process. The accountancy and advisory firm is already in contact
with a "select" group of interested investors, according to a
source, with a deal likely to value the retailer at about GBP140
million, The Telegraph discloses.
The retailer currently has 63 stores and 47 concessions in the UK,
Europe, the US and Russia, The Telegraph notes. It is majority-
owned by Kevin Stanford, the entrepreneur who built up the Karen
Millen clothing chain with his ex-wife of the same name, according
to The Telegraph. Mr. Stanford was hit hard by the Icelandic
banking crisis, after emerging as the fourth biggest shareholder
in Kaupthing before it collapsed and the recipient of a
EUR519 million (GBP443 million) loan, The Telegraph recounts.
However, it is understood that Mr. Stanford, the retailer's
chairman, is reluctant to let go of his stake in the chain and is
planning to roll over all or part of his holding as part of the
sale, The Telegraph says.
About Glitnir Banki
Headquartered in Reykjavik, Iceland, Glitnir banki hf --
http://www.glitnir.is/-- offers an array of financial services to
corporation, financial institutions, investors and individuals.
Iceland's government took control of Glitnir, along with two other
financial institutions -- Landsbanki Islands hf and Kaupthing Bank
hf -- after it failed to obtain short-term funding. The District
Court of Reykjavik granted a Moratorium order on Glitnir on
November 24 2008. Glitnir said the Moratorium is not a bankruptcy
proceeding and does not affect its banking licenses or its ability
to operate as a bank. The Moratorium is a specialized proceeding
under Icelandic law designed to provide it with appropriate global
protection from legal action taken by its creditors, Glitnir
pointed out.
As reported by the Troubled Company Reporter-Europe, Bloomberg
News said Judge Stuart Bernstein of the U.S. Bankruptcy Court for
the Southern District Court of New York granted Glitnir permission
to enter into a proceeding under Chapter 15 of the U.S. bankruptcy
code on January 6, 2008.
Steinunn Gudbjarsdottir, as the duly authorized foreign
representative for Glitnir, sought creditor protection
for the bank under Chapter 15 of the U.S. Bankruptcy Code on
November 26, 2008 (Bankr. S.D.N.Y. Case No. 08-14757). According
to Bloomberg, Glitnir's assets in the United States comprised of
bank accounts and loans provided to U.S. companies. Bloomberg,
citing papers filed with the Court, said the bank issued 22 short-
and long-term notes for about US$7 billion in the country.
GLITNIR BANK: Case v. Former Executives, PwC Won't Reopen
---------------------------------------------------------
Iceland Review Online reports that New York judge Charles E. Ramos
has determined that the conditions for dismissing the case of
Glitnir Bank's winding-up committee against seven businesspeople
and PricewaterhouseCoopers were fulfilled and therefore decided
against reopening the case.
As reported by the Troubled Company Reporter-Europe on Dec. 14,
2010, The Financial Times said PricewaterhouseCoopers allegedly
missed numerous warning signs about the state of Iceland's banks
long before they collapsed in 2008. The findings were made by a
team of international investigators in reports commissioned by the
Icelandic special prosecutor who is probing possible criminal
wrongdoing before the bank crash, the FT disclosed. The studies
found that Landsbanki and Glitnir, two of the failed Icelandic
banks, had "grossly overstated" their financial strength, hidden
large risk exposures and failed to disclose the full extent of
lending to the banks' owners and other related parties, the FT
recounted. The banks were already in deep trouble at the end of
2007, the FT stated. It was claimed that PwC showed "negligence"
in failing to spot financial misstatements that should have led to
the banks losing their operating licenses, according to the FT.
The reports, prepared by French and Norwegian experts who have
been supporting the Icelandic criminal inquiry, argue that losses
from the eventual crash would have been reduced had PwC not given
its endorsement to the faulty accounts at the end of 2007, the FT
noted.
About Glitnir Banki
Headquartered in Reykjavik, Iceland, Glitnir banki hf --
http://www.glitnir.is/-- offers an array of financial services to
corporation, financial institutions, investors and individuals.
Iceland's government took control of Glitnir, along with two other
financial institutions -- Landsbanki Islands hf and Kaupthing Bank
hf -- after it failed to obtain short-term funding. The District
Court of Reykjavik granted a Moratorium order on Glitnir on
November 24 2008. Glitnir said the Moratorium is not a bankruptcy
proceeding and does not affect its banking licenses or its ability
to operate as a bank. The Moratorium is a specialized proceeding
under Icelandic law designed to provide it with appropriate global
protection from legal action taken by its creditors, Glitnir
pointed out.
As reported by the Troubled Company Reporter-Europe, Bloomberg
News said Judge Stuart Bernstein of the U.S. Bankruptcy Court for
the Southern District Court of New York granted Glitnir permission
to enter into a proceeding under Chapter 15 of the U.S. bankruptcy
code on January 6, 2008.
Steinunn Gudbjarsdottir, as the duly authorized foreign
representative for Glitnir, sought creditor protection
for the bank under Chapter 15 of the U.S. Bankruptcy Code on
November 26, 2008 (Bankr. S.D.N.Y. Case No. 08-14757). According
to Bloomberg, Glitnir's assets in the United States comprised of
bank accounts and loans provided to U.S. companies. Bloomberg,
citing papers filed with the Court, said the bank issued 22 short-
and long-term notes for about US$7 billion in the country.
GLITNIR BANK: Expects ISK42-Bil. Payout From Iceland Foods
----------------------------------------------------------
IceNews reports that the resolution committees of Landsbanki
Islands and Glitnir Bank, two of Iceland's failed banks, are
expecting a ISK50 billion (EUR311.1 million) payout from Britain's
Iceland Foods.
The Landsbanki resolution committee is also taking advice on the
sale of its share in the successful retailer in the coming years,
IceNews relates.
IceNews, citing the Liverpool Daily Post, says the Iceland
supermarket chain expects to pay its shareholders GBP330 million
this year in dividends, which is roughly ISK68 billion. As
Iceland used to be majority-owned by Jon Asgeir Johannesson's
Baugur Group, the shares fell to Landsbanki and Glitnir following
Baugur's bankruptcy, IceNews states.
According IceNews, RUV said that the Landsbanki resolution
committee owns 67% of Iceland, while Glitnir's resolution
committee holds a 10% stake. That translates to a ISK42 billion
and a ISK6 billion payout, respectively, IceNews notes.
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.
KAUPTHING BANK: Puts Stake in All Saints Up for Sale
----------------------------------------------------
Rowena Mason at The Telegraph reports that All Saints looks set to
change hands after liquidators to two collapsed Icelandic banks
put their stakes in the high street clothing retailer up for sale.
The Telegraph relates that liquidators of Kaupthing Bank and
Glitnir Bank have appointed Ernst & Young to advise on the sale
process. The accountancy and advisory firm is already in contact
with a "select" group of interested investors, according to a
source, with a deal likely to value the retailer at about GBP140
million, The Telegraph discloses.
The retailer currently has 63 stores and 47 concessions in the UK,
Europe, the US and Russia, The Telegraph notes. It is majority-
owned by Kevin Stanford, the entrepreneur who built up the Karen
Millen clothing chain with his ex-wife of the same name, according
to The Telegraph. Mr. Stanford was hit hard by the Icelandic
banking crisis, after emerging as the fourth biggest shareholder
in Kaupthing before it collapsed and the recipient of a
EUR519 million (GBP443 million) loan, The Telegraph recounts.
However, it is understood that Mr. Stanford, the retailer's
chairman, is reluctant to let go of his stake in the chain and is
planning to roll over all or part of his holding as part of the
sale, The Telegraph says.
About Kaupthing Bank
Headquartered in Reykjavik, Kaupthing Bank --
http://www.kaupthing.com/-- is Iceland's largest bank and among
the Nordic region's 10 largest banking groups. With operations in
more than a dozen countries, the bank offers a range of services
including retail banking, corporate finance, asset management,
brokerage, private banking, treasury, and private wealth
management. Kaupthing was created by the 2003 merger of
Bunadarbanki and Kaupthing Bank. In October 2008, the Icelandic
government assumed control of Kaupthing Bank after taking similar
measures with rivals Landsbanki and Glitnir.
As reported by the Troubled Company Reporter-Europe, on Nov. 30,
2008, Olafur Gardasson, assistant for Kaupthing Bank hf., filed a
petition under Chapter 15 of title 11 of the United States Code in
the United States Bankruptcy Court for the Southern District of
New York commencing the Debtor's Chapter 15 case ancillary to the
Icelandic Proceeding and seeking recognition for the Icelandic
Proceeding as a "foreign main proceeding" under the Bankruptcy
Code and relief in aid of the Icelandic Proceeding.
LANDSBANKI ISLANDS: Expects ISK42-Bil. Payout From Iceland Foods
----------------------------------------------------------------
IceNews reports that the resolution committees of Landsbanki
Islands and Glitnir Bank, two of Iceland's failed banks, are
expecting a ISK50 billion (EUR311.1 million) payout from Britain?s
Iceland Foods.
The Landsbanki resolution committee is also taking advice on the
sale of its share in the successful retailer in the coming years,
IceNews relates.
IceNews, citing the Liverpool Daily Post, says the Iceland
supermarket chain expects to pay its shareholders GBP330 million
this year in dividends, which is roughly ISK68 billion. As
Iceland used to be majority-owned by Jon Asgeir Johannesson's
Baugur Group, the shares fell to Landsbanki and Glitnir following
Baugur's bankruptcy, IceNews states.
According IceNews, RUV said that the Landsbanki resolution
committee owns 67% of Iceland, while Glitnir's resolution
committee holds a 10% stake. That translates to a ISK42 billion
and a ISK6 billion payout, respectively, IceNews notes.
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.
LAUGAVEGUR BOOKSTORE: High Rent Prompts Bankruptcy
--------------------------------------------------
Iceland Review Online reports that the employees of Bokabud Mals
og menningar (BMM) on Laugavegur 18, Reykjaviks main shopping
street, were informed in mid-February that the store had gone
bankrupt.
According to Iceland Review, BMM's doors were shut on Feb. 17.
Allegedly, high rent contributed to BMM's bankruptcy, Iceland
Review notes.
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I R E L A N D
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ANGLO IRISH BANK: DBRS' B Issuer Rating Unmoved by Asset Transfer
-----------------------------------------------------------------
DBRS Inc. (DBRS) has commented that the ratings of Anglo Irish
Bank Corporation Limited (Anglo Irish or the Bank), including its
Issuer Rating to B (high), are unaffected by the Company's
announcement that it has agreed to transfer certain assets and
liabilities to Allied Irish Banks plc (AIB). All non-guaranteed
ratings of Anglo Irish remain Under Review with Negative
Implications, where they were placed on September 10, 2010. The
announcement does not impact Anglo Irish's various Government
Guaranteed debt and deposit ratings of A (high) with a Negative
trend.
With this transfer, Anglo Irish agreed to sell circa
EUR8.6 billion of deposits and EUR12.2 billion of Senior NAMA
bonds to AIB for a consideration of EUR3.5 billion in cash. In
DBRS's view, this transfer, in isolation, does not impact Anglo
Irish's non-guaranteed ratings, as DBRS's Feb. 15, 2011 downgrade
considered such a transfer. Accordingly, this event was factored
in the B (high) rating. DBRS's current rating considers the view
that the sale of the deposits further weakens Anglo Irish's
financial position; thereby increasing the likelihood of adverse
actions towards senior bondholders. Moreover, DBRS views the
transfer as further advancing the "wind-down" of the Bank.
SILENUS LIMITED: Moody's Junks Rating on Class D Notes
------------------------------------------------------
Moody's Investors Service has downgraded these classes of Notes
issued by SILENUS (European Loan Conduit No. 25) Limited (amounts
reflect initial outstandings):
-- EUR1035M Class A Notes, downgraded to Aa3 (sf); previously on
27 May 2009 downgraded to Aa2 (sf)
-- EUR60M Class B Notes, downgraded to Ba1 (sf); previously on
27 May 2009 downgraded to Baa2 (sf)
-- EUR63M Class C Notes, downgraded to B2 (sf); previously on 27
May 2009 downgraded to Ba3 (sf)
-- EUR46M Class D Notes, downgraded to Caa2 (sf); previously on
27 May 2009 downgraded to B3 (sf)
At the same time, Moody's has affirmed the rating of the Class X
Notes. Moody's does not rate the Class E, Class F or Class G
Notes issued by ELoC 25. The rating action takes Moody's updated
central scenarios into account, as described in Moody's Special
Report "EMEA CMBS: 2011 Central Scenarios" published 2 February
2011.
Ratings Rationale
The key parameters in Moody's analysis are the default probability
of the securitized loans (both during the term and at maturity) as
well as Moody's updated value assessment for the properties
securing the loans. From those parameters a loss expectation can
be derived for the securitized pool. Based on Moody's updated
assessment, the loss expectation for the pool has increased
materially since the last review in May 2009.
The rating downgrade of the Class A, B, C and D Notes is mainly
due to (i) Moody's re-assessment of the refinancing risk of the
loans and (ii) a review of the expected property values which back
the loans in the pool.
Moody's expects a greater proportion of the loans to default at
their respective maturity dates, compared to the last review in
2009. Almost one third (31.9%) of the pool matures in 2011, and
while overall transaction leverage is moderate at 68% on a whole
loan underwritten basis, the majority of the valuations have not
been updated since 2006. By way of contrast, Moody's whole loan
refinancing LTV is 85.7%.
By 2013, all loans except for the Eurocastle Retail D-Portfolio
Loan and the Tishman Munich Elisenhof Loan (23.4% in total) will
have reached their final maturity date, if not extended. Moody's
believes that there is less availability of financing for
commercial real estate loans compared with when the loans were
originated. In addition, stricter underwriting criteria are
currently in place for CRE lending in Europe. Moody's believes
that lenders currently prefer to underwrite at lower LTV ratios
and on properties at the "prime" end of the quality spectrum. As
Moody's central scenarios do not expect the lending markets to
return to their former state for the next two years, finding
refinancing for the loans in the pool is likely to be more
difficult than it was at closing. Furthermore, certain properties
backing the loans are facing reducing cashflows in the future as
evidenced by projected ICRs, mainly due to lease roll-over and
non-renewals of existing leases which may also impact the future
refinancing of those loans.
A mitigating factor in the rating action has been the good
coverage levels across the loan pool. Average portfolio DSCR is
2.23x, an improvement from the 1.80x closing figure: this should
allow some loans to carry on servicing their debt even if they
default at maturity, and to carry on paying interest throughout
the resolution process. For the most part, Moody's assumption for
term default risk has slightly improved since the last review,
although not enough to offset the increased refinancing risk.
The ratings are also negatively impacted by the principal
allocation rules -- a significant portion of the pool needs to
enter special servicing, and to remain there, before principal
proceeds can be allocated to bondholders sequentially. Moody's
modelled several prepayment scenarios, including the scenario
where the Defense Plaza loan successfully repays in May 2011, and
the ratings under that scenario would still be within acceptable
ranges and not alter the rating outcome.
Moody's analysis reflects a forward-looking view of the likely
range of collateral performance over the medium term. From time
to time, Moody's may, if warranted, change these expectations.
Performance that falls outside an acceptable range of the key
parameters may indicate that the collateral's credit quality is
stronger or weaker than Moody's had anticipated during current
review. Even so, deviation from the expected range will not
necessarily result in a rating action. There may be mitigating or
offsetting factors to an improvement or decline in collateral
performance, such as increased subordination levels due to
amortization and loan re- prepayments or a decline in
subordination due to realized losses.
Primary sources of assumption uncertainty are the current stressed
macro-economic environment and continued weakness in the
occupational and lending markets. Moody's anticipates (i) delayed
recovery in the lending market persisting through 2012, while
remaining subject to strict underwriting criteria and heavily
dependent on the underlying property quality, (ii) values will
overall stabilize but with a strong differentiation between prime
and secondary properties, and (iii) occupational markets will
remain under pressure in the short term and will only slowly
recover in the medium term in line with the anticipated economic
recovery. Overall, Moody's central global scenario remains
'hooked-shaped' for 2011; Moody's expect sluggish recovery in most
of the world's largest economies, returning to trend growth rate
with elevated fiscal deficits and persistent unemployment levels.
Moody's Portfolio Analysis
ELoC 25 is a securitization of 15 loans secured by 182 commercial
properties located in France (42.2%), Germany (33.3%) and Italy.
The properties comprise offices (61%), retail (23%), multi-family
residential accommodation (7.5%), while other varied property
types comprise the remaining portion.
As of the February 2011 interest payment date, the total loan
balance was EUR1,082.3 million, a reduction of approximately
EUR161.0 million since closing. Most of that reduction has come
from prepayments: the Castel Romano loan (initially EUR45 million)
fully prepaid, and there have been partial prepayments of the
Margaux EDF loan through property disposals. The remaining
aggregate loan balance reduction has been through scheduled
amortization. No loan is currently specially serviced and there
have been no losses to date. However, eight loans are on the
servicer's watchlist for differing reasons.
The largest loan in the pool is the Margaux EDF loan, which
represents 17.5% of the current aggregate loan pool balance. The
loan is secured by 29 office properties across France, principally
occupied by Electricite de France (Aa3, P-1). The loan is
amortizing, but has also been subject to property disposals, such
that its original balance has fallen from EUR265 million to
EUR189.7 million. The loan is floating-rate and has experienced
increased coverage since closing owing to reductions in Euribor.
The loan has significant lease roll-over risk, as EDF has been
reducing its occupancy across the property portfolio. While
current vacancy is low at 3%, future vacancy is expected to
increase significantly. The loan matures in 2013, and has a
Moody's LTV ratio at refinancing of 91.5%. Moody's assesses the
default risk at loan maturity in August 2013 as very high while
the term risk is low given the rating of EDF as tenant.
The second largest loan in the pool is the Defense Plaza Loan,
which matures in May 2011. The loan is non-amortizing, and at
EUR169 million, represents 15.6% of the aggregate current loan
pool balance. The loan is watchlisted due to its pending
refinancing date. A single prime asset block in La Defense area
of Paris backs the loan, and this is multi-let, with the largest
tenant being GE Capital Equipment Finance. The coverage on the
loan has been good through time. There is also mezzanine
financing at hold co level for this property. Moody's LTV ratio
for the loan is 73% and the default risk at the maturity date is
deemed to be high.
The third largest loan in the pool is the Orazio Portfolio,
maturing in October 2012. Although the loan is non-amortizing, it
must meet decreasing LTV covenants through time, which effectively
requires either revaluation of the properties or effective
amortization. The properties backing this EUR148.6 million loan
consist of three offices and 41 supermarkets across Italy, each
let to a single tenant. Moody's refinancing LTV for this loan is
84.4%. The current LTV covenant is 82%, and the loan LTV as
tested at 31 Jan 2011 was 82.76%. A standstill is in place until
end of March 2011. The default risk on this loan is also deemed
as being very high.
Portfolio Loss Exposure: Moody's expects a very high amount of
losses on the securitized portfolio, stemming mainly from the
refinancing profile of the securitized portfolio. Given the
default risk profile and the anticipated work-out strategy for
defaulted and potentially defaulting loans, these expected losses
are likely to crystallize only towards the end of the transaction
term.
Sensitivity Analysis: Moody's base case modeling assumes that at
least 50% of loan principal will be allocated sequentially, and
50% according to the modified pro-rata allocation rules. Moody's
ratings could potentially show sensitivity if subordination levels
do not increase as expected through time. Moody's analyzed
several sensitivity scenarios: in one scenario, all the loans
redeem at their scheduled maturity dates between now and 2013, but
thereafter all principal received is allocated sequentially; under
this scenario only limited rating sensitivity was exhibited.
* IRELAND: May Allow Central Bank to Initiate Bank Wind-Ups
-----------------------------------------------------------
Joe Brennan at Bloomberg News, citing draft laws published on
Monday, reports that the Irish Central Bank may be able to seek
court approval to wind up a failing lender if necessary in future.
Bloomberg relates that according to the legislation, published on
the parliament's Web site, the so-called Central Bank and Credit
Institutions (Resolution) Bill "sets out the ground on which the
Central Bank may present a petition to the High Court for the
winding up of an authorized credit institution."
The legislation proposes the creation of a resolution fund "to
provide a source of funding for the resolution of financial
stability, or an imminent serious threat" to the financial
stability of a lender, Bloomberg notes.
* IRELAND: 130 Creditor Meetings Held in February, Vision-net Says
------------------------------------------------------------------
Business World, citing business information firm Vision-net,
reports that one hundred and thirty Irish companies held creditor
meetings during February.
According to Business World, figures from Vision-net reveal that
the companies owed EUR133 million, of which more than half was
unsecured.
Receivers were appointed to 44 companies during the month, a rise
of 63% from the previous month, Business World discloses.
A total of 679 judgments were awarded in January in the courts for
non-payment of debts totaling EUR29 million, Business World notes.
"The number of suppliers going unpaid is escalating and the
amounts involved are staggering," Business World quotes Christine
Cullen of Vision-net as saying. "Debt continues to be a real
issue in business. We are seeing a more aggressive stance being
taken against debtors, with the legal option increasingly being
used."
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P O L A N D
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ELECTUS SA: Fitch Upgrades National Long-Term Rating to 'BB-'
-------------------------------------------------------------
Fitch Ratings has upgraded Poland-based Electus S.A.'s National
Long-term rating to 'BB-'(pol) from 'B+'(pol). The Outlook is
Stable. At the same time, Fitch has affirmed Electus's Long-term
foreign and local currency Issuer Default Ratings at 'B-' and
revised their Outlooks to Stable from Negative. A full list of
rating actions is at the end of this release.
The upgrade of Electus's National Long-term rating and the Stable
Outlook reflects improvements in corporate governance, the
progress the company has made in diversifying and lengthening the
maturity of funding, and the greater focus on its core business
line. However, these positive factors are offset to some extent
by increased competition in Electus's core market, legislative
changes that may hamper further growth of business and potential
risks related to international expansion.
Electus's IDRs and National Rating reflect its relatively small
and concentrated franchise and the liquidity and refinancing risk
the company faces stemming from the maturity profile of external
funding sources. The ratings also reflect the sizeable non-core
real estate and real estate-backed exposures. At the same time,
Fitch notes the company's positive track record of timely
servicing of financial obligations and its continued reasonable
access to debt financing during the crisis, solid profitability
over the past four years and the company's expertise in its niche
health service receivables financing business.
In Fitch's view, Electus's main business line generates limited
credit risk. Material concentrations exist in this business line,
which could exacerbate liquidity issues if the company needs to
reschedule the largest exposures. Fitch considers that the real
estate-backed business line, given its high concentration and size
of its single exposures, generates significant liquidity and
market risk. Credit risk has been reduced by converting
receivables to direct equity stakes in companies that own real
estate. Nevertheless, the timing and ability to monetize these
exposures at or above carrying value remains uncertain.
Electus's liquidity position improved over 2010 with new credit
lines received and refinancing of public bonds maturing in 2011
through new medium term issuance.
The rating actions are:
-- Long-term foreign currency IDR: affirmed at 'B-'; Outlook
revised to Stable from Negative
-- Long-term local currency IDR: affirmed at 'B-'; Outlook
revised to Stable from Negative
-- Short-term foreign and local currency IDRs: affirmed at 'B'
-- National Long-term rating: upgraded to 'BB-'(pol) from
'B+'(pol); Outlook revised to Stable from Negative
-- National Short-term rating: affirmed at 'B'(pol)
Senior unsecured bonds issued under PLN100m debt issuance program:
-- Long-term rating: affirmed at 'B-'
-- National rating: upgraded to 'BB-'(pol) from 'B+'(pol)
-- Recovery Rating: affirmed at 'RR4'
===========
R U S S I A
===========
NOMOS BANK: Fitch Assigns 'BB-' Rating to RUB5-Bil. Exchange Bonds
------------------------------------------------------------------
Fitch Ratings has assigned Nomos Bank's BO-01 RUB5 billion
exchange bonds a final Long-term local currency rating of 'BB-'
and National Long-term rating of 'A+(rus)'. The ratings are in
line with the bank's Long-term local currency Issuer Default
Rating of 'BB-' and National Long-term rating of 'A+(rus)'. The
Outlooks on both ratings are Stable.
The senior unsecured notes have a three-year maturity with a put
option in one year, and a semi-annual coupon for the first year of
7.0% p.a.
Nomos acquired a 51.29% stake in Bank of Khanty Mansiysk in
December 2010, which the agency expects to be neutral to Nomos's
credit profile. Consolidated, Nomos and BKM ranked among the top-
10 Russian banks by assets at end-2010. A group of local
businessmen, some of which are also beneficiaries of the ICT
industrial group, controls 50.1% of the bank, while the remainder
is owned by Peter Kellner and Roman Korbacka.
RUSIA PETROLEUM: Gazprom Wins Rights to Kyovkta Gas Field
---------------------------------------------------------
Anna Shiryaevskaya at Bloomberg News reports that OAO Gazprom won
the rights to the Kovykta gas field operated by OAO Rusia
Petroleum, a unit controlled by TNK-BP, at a bankruptcy auction on
Tuesday in Irkutsk, Siberia.
According to Bloomberg, Alexander Smetanin, Rusia Petroleum's
external manager, said on Tuesday that the state-controlled gas
producer offered "significantly more" than the starting price of
RUR15.1 billion (US$523 million).
As reported by the Troubled Company Reporter-Europe on Oct. 21,
2010, Reuters said that the Irkutsk Arbitrage Court declared
Rusia Petroleum insolvent and opened bankruptcy proceedings. The
court said in an announcement posted on its Web site that the
bankruptcy proceedings will go on for six months, until April 19,
2011, according to Reuters. TNK-BP, half owned by British major
BP Plc and a quartet of Russia-connected billionaires, filed a
petition to initiate bankruptcy proceedings for Rusia Petroleum in
June 2010 and said that it was determined to recover its
investment in the gas project, Reuters disclosed.
Rusia Petroleum is a wholly owned unit of TNK-BP.
=========
S P A I N
=========
AYT COLATERALES: S&P Assigns 'BB (sf)' Rating on Class B Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its credit ratings to
AyT Colaterales Global Hipotecario FTA Caixa Laietana I's class A
and class B notes in series AyT Colaterales Global Hipotecario
Caixa Laietana I. At closing, AyT Colaterales Global Hipotecario
FTA Caixa Laietana I also issued unrated class C and D notes.
This transaction closed in July 2008, but S&P weren't engaged to
rate the notes at that time. Since closing, the class A notes
have amortized to EUR120.7 million from an initial amount of
EUR145.4 million.
The transaction securitizes a pool of mortgage loans granted to
individuals for the purchase of first residences and originated by
Caixa Laietana in Spain. Caixa Laietana is a small to medium
sized savings bank which provides traditional banking services
(individual and SME lending) to its home market in the Spanish
region of Catalonia.
The main features of the transaction are:
* First lien mortgages comprise 100% of the portfolio.
* The purchase of borrowers' own homes accounts for almost 100% of
the pool.
* The weighted-average seasoning for this transaction as of is
66.5%. S&P considers only 1.79% of the pool to comprise jumbo
loans with a balance higher than EUR400,000.
S&P's analysis indicated these key risks:
The mortgages have a current weighted average loan-to-value ratio
of 83.04%. As a result of the high LTV ratio, S&P increased its
weighted-average foreclosure frequency and weighted-average loss
severity stress assumptions for the pool. Geographical
concentration: More than 85% of the mortgage loans are
concentrated in the Catalonia region. In its credit analysis, S&P
increased the geographical concentration penalty that increases
its WAFF stress assumption for the pool. Self-employed
individuals and non-Spanish residents comprise around 16% and 20%
of the pool, respectively. S&P increased its WAFF stress
assumption for these borrowers.
Arrears: Currently more than 13% of the underlying mortgage loans
are in arrears for more than 30 days. S&P increased the WAFF
stress assumption for the mortgage loans depending on the number
of days the loan was delinquent.
S&P's 'AA (sf)' rating on the class A notes and 'BB (sf)' rating
on the class B notes reflects S&P's assessment of the credit and
cash flow characteristics of the underlying asset pool, as well as
an analysis of the counterparty, legal, and operational risks of
the transaction. S&P's analysis indicates that the credit
enhancement available to the class A and B notes is sufficient to
mitigate the credit and cash flow risks to a 'AA' and 'BB' rating
level, respectively.
Additionally, S&P considers that the transaction documents
adequately mitigate the counterparty risk from the swap provider
to a 'AA' and 'BB' rating level, in line with its updated
counterparty criteria. Also, its review of the legal opinion S&P
received indicates that the special-purpose entity is adequately
bankruptcy remote, in its view.
S&P intend to publish a new issue report on this transaction in
the coming weeks.
Ratings List
AyT Colaterales Global Hipotecario FTA Caixa Laietana I
EUR170 Million Asset-Backed Floating-Rate Notes Series AyT
Colaterales Global
Hipotecario Caixa Laietana I
Current Amount at
amount closing[1]
Class Rating (mil. EUR) (mil. EUR)
----- ------ ---------- ----------
A AA (sf) 120.7 145.4
B BB (sf) 13.5 13.5
C NR 5.1 5.1
D NR 6.0 6.0
[1] As of July 22, 2008.
NR -- Not rated.
BBK I: Fitch Assigns 'BBsf' Rating to Class C Notes
---------------------------------------------------
Fitch Ratings has assigned AyT Hipotecario BBK I, Fondo de
Titulizacion de Activos' mortgage-backed floating-rate senior
notes due in April 2035 final ratings:
-- EUR467,882,068.45 Class A notes (ISIN ES0312364005) 'AAAsf';
Outlook Stable; Loss Severity rating of 'LS-1'
-- EUR46,000,000.00Class B notes (ISIN ES0312364013) 'Asf';
Outlook Stable; Loss Severity rating of 'LS-2'
-- EUR39,500,000.00Class C notes (ISIN ES0312364021) 'BBsf';
Outlook Stable; Loss Severity rating of 'LS-2'
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 Europea de Titulizacion S.G.F.T, S.A.'s
administrative capabilities.
The transaction is a cash flow securitization of a static pool of
first-ranking Spanish mortgage loans originated and serviced by
Bilbao Bizkaia Kutxa that closed in April 2007. Fitch considers
the RMBS portion of the portfolio to be above average risk due to
the high LTVs. The loans in the portfolio have an average
original LTV of 97.1%, and an average current LTV of 78.5%, which
are in the upper end for prime RMBS transactions. The difference
between current and original LTV is due to the pool seasoning,
which is over six years. 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.
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. Fitch's WAFF
assumptions ranged from 12% in the 'B' stress to 41% in the 'AAA'
stress. In Fitch's analysis, the available CE for the notes could
withstand the relevant rating stresses. Fitch modelled different
default vectors combined with different prepayment vectors
(high/low) and different interest rate environments
(rising/stable/decreasing). The assumptions used under individual
scenarios were in accordance with Fitch's cash flow analysis
criteria for RMBS.
As of October 2010, total CE for the class A notes, equivalent to
19.79% of the outstanding collateral balance, was provided by the
subordination of class B (8.31%), class C (7.14%) plus a reserve
fund of 4.34%. Similarly, CE for the class B notes was provided
by subordination of class C plus the reserve fund. Finally, CE
for the class C notes is provided only by the reserve fund. All
the notes also benefit from available excess spread.
The fund is regulated by Spanish Securitization 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 seller.
The CTHs were subscribed by Ahorro y 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 and C notes, as well
as the repayment of principal by the legal maturity date for each
note.
BBK I: Moody's Downgrades Rating on Class D Notes to 'B3 (sf)'
--------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of AyT
HIPOTECARIO BBK I, FTA's class A and B notes, and downgraded the
ratings of the class C notes.
Moody's Investors Service has affirmed the ratings of AyT
HIPOTECARIO BBK II, FTA's class A notes, and downgraded the
ratings of class B and C notes.
Moody's Investors Service has downgraded the ratings of all
classes of notes issued by Serie AYT C.G.H. BBK I, FTA and Serie
AYT C.G.H. BBK II, FTA.
These rating actions follow Moody's review of the recent
structural changes to these transactions and concluded that these
amendments have both positive and negative impact on the ratings,
depending on the ranking of the notes. A detailed list of the
rating actions is provided at the end of this press release.
Ratings Rationale
BBK was downgraded on Jan. 4 2011 from A1/P-1 to Baa1/P-2, which
triggered Moody's second rating level criteria under the swap
downgrade language (A3/P-2) for all four BBK transactions above
mentioned. Following this downgrade the documentation was amended
so that BBK could remain as swap counterparty until the loss of
Baa3/P-3 rating level, which in Moody's opinion negatively impacts
all classes of notes and introduces further linkage to the swap
counterparty rating.
Additionally, other structural amendments relate to the inclusion
of interest deferral triggers for the junior classes of notes
based on cumulative defaults for the transactions Serie AYT C.G.H.
BBK I, FTA and Serie AYT C.G.H. BBK II, FTA, and the reduction of
the existing interest deferral triggers levels for the
transactions AyT HIPOTECARIO BBK I, FTA and AyT HIPOTECARIO BBK
II, FTA. In Moody's view, the deferral of interest payments on
the junior classes of notes benefits the repayment of the class A
notes, but increases the expected loss on the junior classes of
notes.
The ratings of the notes take into account the credit quality of
the underlying mortgage loan pools, from which Moody's determined
the MILAN Aaa Credit Enhancement and the lifetime losses (expected
loss), as well as the transaction structure and any legal
considerations as assessed in Moody's cash flow analysis. The
expected loss and the Milan Aaa CE are the two key parameters used
by Moody's to calibrate its loss distribution curve, used in the
cash-flow model to rate European RMBS transactions.
Portfolio Expected Loss:
AyT HIPOTECARIO BBK I, FTA and AyT HIPOTECARIO BBK II, FTA are
still performing in line with the revised assumptions as of
October 2009. Serie AYT C.G.H. BBK I, FTA and Serie AYT C.G.H.
BBK II, FTA are still performing in line with the initial
assumptions as of closing. The reserve fund in all deals is
currently at its target level.
Moody's expect the portfolio credit performance to continue to be
under stress, as Spanish unemployment remains elevated. Moody's
believe that the anticipated tightening of Spanish fiscal policies
is likely to weigh on the recovery in the Spanish labor market and
constraint further Spanish households finances. Moody's has also
concerns over the timing and degree of future recoveries in a
weaker Spanish housing market.
MILAN Aaa CE:
Moody's has isolated the impact of the structural amendments for
both the swap and the interest deferral triggers in its analysis
by keeping the latest revised assumptions for both the Expected
Loss and MILAN Aaa CE. Moody's current rating review exclusively
addresses the rating implications of the implemented structural
amendments.
The rating addresses the expected loss posed to investors by the
legal final maturity of the notes. In Moody's opinion, the
structure allows for timely payment of interest (except for C
rated notes) and principal with respect of the notes by the legal
final maturity. Moody's ratings only address the credit risk
associated with the transaction. Other non-credit risks have not
been addressed, but may have a significant effect on yield to
investors.
Transaction Features
AyT HIPOTECARIO BBK I, FTA and AyT HIPOTECARIO BBK II, FTA closed
in June 2005 and June 2006 respectively. Serie AYT C.G.H. BBK I,
FTA and Serie AYT C.G.H. BBK II, FTA closed in April 2007 and
April 2008 respectively.
The transactions are backed by high loan-to-value portfolios of
first-ranking mortgage loans originated by BBK and secured on
residential properties located in Spain, for an overall balance at
closing of EUR1.5 billion for Serie AYT C.G.H. BBK I, FTA and
EUR1.0billion for each of the other three transactions.
Some features in the deals have changed since closing:
Hedging agreement: Following BBK's downgrade, the swap downgrade
language was modified in all four BBK transactions so that BBK
could remain as swap counterparty until the loss of Baa3/P-3
rating level, which is not in line with the criteria described in
Moody's report titled "the Framework for De-linking Hedge
Counterparty Risks from Global Structured Finance Cashflow
Transactions."
Treasury Bank Accounts and Paying Agents: BBK has been replaced as
treasury account bank and paying agent by CECA (Confederacion
Espanola de Cajas de Ahorros, Aa3/P-1) in the transactions AyT
HIPOTECARIO BBK I, FTA and AyT HIPOTECARIO BBK II, FTA.
CECA was already the treasury account bank and paying agent in the
transactions Serie AYT C.G.H. BBK I, FTA and Serie AYT C.G.H. BBK
II, FTA, so no further change was required in these transactions.
Servicer agreement: A back-up servicer trigger has been
incorporated to the documentation, so that a back-up servicer will
be appointed at loss of servicer's Baa3 long term rating.
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.
List of Ratings Actions
Issuer: AyT HIPOTECARIO BBK I, FTA
-- EUR914.5 million Class A, affirmed at Aaa (sf); previously on
15 October 2009, affirmed at Aaa (sf)
-- EUR46.0 million Class B, affirmed at Aa1 (sf); previously on
15 October 2009, upgraded to Aa1 (sf)
-- EUR39.5 million Class C, downgraded to Baa2 (sf); previously
on 15 October 2009, upgraded to A3 (sf)
Issuer: AYT HIPOTECARIO BBK II FONDO DE TITUALIZACION DE ACTIVOS
-- EUR918.0 million Class A, affirmed at Aaa (sf); previously on
15 October 2009, affirmed at Aaa (sf)
-- EUR43.5 million Class B, downgraded to A2 (sf); previously on
15 October 2009, confirmed at A1 (sf)
-- EUR38.5 million Class C, downgraded to B1 (sf); previously on
15 October 2009, confirmed at Baa3 (sf)
Issuer: SERIE AYT COLATERALES GLOBAL HIPOTECARIO BBK I
-- EUR1,391.2 million Class A, downgraded to Aa1 (sf);
previously on 25 April 2007, rated Aaa (sf)
-- EUR81.0 million Class B, downgraded to Baa2 (sf); previously
on 25 April 2007, rated A2 (sf)
-- EUR13.5 million Class C, downgraded to Ba2 (sf); previously
on 25 April 2007, rated Baa3 (sf)
-- EUR14.3 million Class D, downgraded to B3 (sf); previously on
25 April 2007, rated Ba2 (sf)
Issuer: SERIE AyT COLATERALES GLOBAL HIPOTECARIO BBK II
-- EUR955.5 million Class A, downgraded to Aa2 (sf); previously
on 10 April 2008, rated Aaa (sf)
-- EUR30.5 million Class B, downgraded to Baa2 (sf); previously
on 10 April 2008, rated A2 (sf)
-- EUR7.0 million Class C, downgraded to B1 (sf); previously on
10 April 2008, rated Baa3 (sf)
-- EUR7.0 million Class D, downgraded to Ca (sf); previously on
10 April 2008, rated Ba2 (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.
BBK II: Fitch Assigns 'BBsf' Rating to Class C Notes
----------------------------------------------------
Fitch Ratings has assigned AyT Hipotecario BBK II, Fondo de
Titulizacion de Activos' mortgage-backed floating-rate senior
notes due in April 2041 final ratings:
-- EUR596,320,957.80 Class A notes (ISIN ES0312251004) 'AAsf';
Outlook Stable; Loss Severity rating of 'LS-1'
-- EUR43,500,000.00 Class B notes (ISIN ES0312251012) 'Asf';
Outlook Stable; Loss Severity rating of 'LS-3'
-- EUR38,500,000.00 Class C notes (ISIN ES0312251020) '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 Europea de Titulizacion S.G.F.T, S.A.'s
administrative capabilities.
The transaction is a cash flow securitization of a static pool of
first-ranking Spanish mortgage loans originated and serviced by
Bilbao Bizkaia Kutxa that closed in April 2007. Fitch considers
the RMBS portion of the portfolio to be above average risk due to
the high LTVs. The loans in the portfolio have an average
original LTV of 92.9%, and an average current LTV of 77.0%, which
are in the upper end for prime RMBS transactions. The difference
between current and original LTV is due to the pool seasoning,
which is over six years. In addition, in line with the entity's
origination procedures, some of the loans in the portfolio are
originated by brokers and have an increasing installment
amortization profile; and there is also geographical concentration
in the Basque Country.
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. Fitch's WAFF
assumptions ranged from 11% in the 'B' stress to 39% in the 'AAA'
stress. In Fitch's analysis, the available CE for the notes could
withstand the relevant rating stresses. Fitch modelled different
default vectors combined with different prepayment vectors
(high/low) and different interest rate environments
(rising/stable/decreasing). The assumptions used under individual
scenarios were in accordance with Fitch's cash flow analysis
criteria for RMBS.
As of October 2010, total CE for the class A notes, equivalent to
15.26% of the outstanding collateral balance, was provided by the
subordination of class B (6.41%), class C (5.68%) plus a reserve
fund of 3.17%. Similarly, CE for the class B notes was provided
by subordination of class C plus the reserve fund. Finally, CE
for the class C notes is provided only by the reserve fund. All
the notes also benefit from available excess spread.
The fund is regulated by Spanish Securitization 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 seller.
The CTHs were subscribed by Ahorro y 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 and C notes, as well
as the repayment of principal by the legal maturity date for each
note.
BBK II: Moody's Downgrades Rating on Class D Notes to 'Ca (sf)'
---------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of AyT
HIPOTECARIO BBK I, FTA's class A and B notes, and downgraded the
ratings of the class C notes.
Moody's Investors Service has affirmed the ratings of AyT
HIPOTECARIO BBK II, FTA's class A notes, and downgraded the
ratings of class B and C notes.
Moody's Investors Service has downgraded the ratings of all
classes of notes issued by Serie AYT C.G.H. BBK I, FTA and Serie
AYT C.G.H. BBK II, FTA.
These rating actions follow Moody's review of the recent
structural changes to these transactions and concluded that these
amendments have both positive and negative impact on the ratings,
depending on the ranking of the notes.
Ratings Rationale
BBK was downgraded on Jan. 4 2011 from A1/P-1 to Baa1/P-2, which
triggered Moody's second rating level criteria under the swap
downgrade language (A3/P-2) for all four BBK transactions above
mentioned. Following this downgrade the documentation was amended
so that BBK could remain as swap counterparty until the loss of
Baa3/P-3 rating level, which in Moody's opinion negatively impacts
all classes of notes and introduces further linkage to the swap
counterparty rating.
Additionally, other structural amendments relate to the inclusion
of interest deferral triggers for the junior classes of notes
based on cumulative defaults for the transactions Serie AYT C.G.H.
BBK I, FTA and Serie AYT C.G.H. BBK II, FTA, and the reduction of
the existing interest deferral triggers levels for the
transactions AyT HIPOTECARIO BBK I, FTA and AyT HIPOTECARIO BBK
II, FTA. In Moody's view, the deferral of interest payments on
the junior classes of notes benefits the repayment of the class A
notes, but increases the expected loss on the junior classes of
notes.
The ratings of the notes take into account the credit quality of
the underlying mortgage loan pools, from which Moody's determined
the MILAN Aaa Credit Enhancement and the lifetime losses (expected
loss), as well as the transaction structure and any legal
considerations as assessed in Moody's cash flow analysis. The
expected loss and the Milan Aaa CE are the two key parameters used
by Moody's to calibrate its loss distribution curve, used in the
cash-flow model to rate European RMBS transactions.
Portfolio Expected Loss:
AyT HIPOTECARIO BBK I, FTA and AyT HIPOTECARIO BBK II, FTA are
still performing in line with the revised assumptions as of
October 2009. Serie AYT C.G.H. BBK I, FTA and Serie AYT C.G.H.
BBK II, FTA are still performing in line with the initial
assumptions as of closing. The reserve fund in all deals is
currently at its target level.
Moody's expect the portfolio credit performance to continue to be
under stress, as Spanish unemployment remains elevated. Moody's
believe that the anticipated tightening of Spanish fiscal policies
is likely to weigh on the recovery in the Spanish labor market and
constraint further Spanish households finances. Moody's has also
concerns over the timing and degree of future recoveries in a
weaker Spanish housing market.
MILAN Aaa CE:
Moody's has isolated the impact of the structural amendments for
both the swap and the interest deferral triggers in its analysis
by keeping the latest revised assumptions for both the Expected
Loss and MILAN Aaa CE. Moody's current rating review exclusively
addresses the rating implications of the implemented structural
amendments.
The rating addresses the expected loss posed to investors by the
legal final maturity of the notes. In Moody's opinion, the
structure allows for timely payment of interest (except for C
rated notes) and principal with respect of the notes by the legal
final maturity. Moody's ratings only address the credit risk
associated with the transaction. Other non-credit risks have not
been addressed, but may have a significant effect on yield to
investors.
Transaction Features
AyT HIPOTECARIO BBK I, FTA and AyT HIPOTECARIO BBK II, FTA closed
in June 2005 and June 2006 respectively. Serie AYT C.G.H. BBK I,
FTA and Serie AYT C.G.H. BBK II, FTA closed in April 2007 and
April 2008 respectively.
The transactions are backed by high loan-to-value portfolios of
first-ranking mortgage loans originated by BBK and secured on
residential properties located in Spain, for an overall balance at
closing of EUR1.5 billion for Serie AYT C.G.H. BBK I, FTA and
EUR1.0billion for each of the other three transactions.
Some features in the deals have changed since closing:
Hedging agreement: Following BBK's downgrade, the swap downgrade
language was modified in all four BBK transactions so that BBK
could remain as swap counterparty until the loss of Baa3/P-3
rating level, which is not in line with the criteria described in
Moody's report titled "the Framework for De-linking Hedge
Counterparty Risks from Global Structured Finance Cashflow
Transactions."
Treasury Bank Accounts and Paying Agents: BBK has been replaced as
treasury account bank and paying agent by CECA (Confederacion
Espanola de Cajas de Ahorros, Aa3/P-1) in the transactions AyT
HIPOTECARIO BBK I, FTA and AyT HIPOTECARIO BBK II, FTA.
CECA was already the treasury account bank and paying agent in the
transactions Serie AYT C.G.H. BBK I, FTA and Serie AYT C.G.H. BBK
II, FTA, so no further change was required in these transactions.
Servicer agreement: A back-up servicer trigger has been
incorporated to the documentation, so that a back-up servicer will
be appointed at loss of servicer's Baa3 long term rating.
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.
List of Ratings Actions
Issuer: AyT HIPOTECARIO BBK I, FTA
-- EUR914.5 million Class A, affirmed at Aaa (sf); previously on
15 October 2009, affirmed at Aaa (sf)
-- EUR46.0 million Class B, affirmed at Aa1 (sf); previously on
15 October 2009, upgraded to Aa1 (sf)
-- EUR39.5 million Class C, downgraded to Baa2 (sf); previously
on 15 October 2009, upgraded to A3 (sf)
Issuer: AYT HIPOTECARIO BBK II FONDO DE TITUALIZACION DE ACTIVOS
-- EUR918.0 million Class A, affirmed at Aaa (sf); previously on
15 October 2009, affirmed at Aaa (sf)
-- EUR43.5 million Class B, downgraded to A2 (sf); previously on
15 October 2009, confirmed at A1 (sf)
-- EUR38.5 million Class C, downgraded to B1 (sf); previously on
15 October 2009, confirmed at Baa3 (sf)
Issuer: SERIE AYT COLATERALES GLOBAL HIPOTECARIO BBK I
-- EUR1,391.2 million Class A, downgraded to Aa1 (sf);
previously on 25 April 2007, rated Aaa (sf)
-- EUR81.0 million Class B, downgraded to Baa2 (sf); previously
on 25 April 2007, rated A2 (sf)
-- EUR13.5 million Class C, downgraded to Ba2 (sf); previously
on 25 April 2007, rated Baa3 (sf)
-- EUR14.3 million Class D, downgraded to B3 (sf); previously on
25 April 2007, rated Ba2 (sf)
Issuer: SERIE AyT COLATERALES GLOBAL HIPOTECARIO BBK II
-- EUR955.5 million Class A, downgraded to Aa2 (sf); previously
on 10 April 2008, rated Aaa (sf)
-- EUR30.5 million Class B, downgraded to Baa2 (sf); previously
on 10 April 2008, rated A2 (sf)
-- EUR7.0 million Class C, downgraded to B1 (sf); previously on
10 April 2008, rated Baa3 (sf)
-- EUR7.0 million Class D, downgraded to Ca (sf); previously on
10 April 2008, rated Ba2 (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.
CM BANCAJA: S&P Puts 'B-' Rating on Class D Notes on Watch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services took several rating actions on
CM Bancaja 1 Fondo de Titulizacion de Activos' class A, B, C, and
D notes.
Specifically:
* S&P has removed from CreditWatch negative its ratings on the
class B, C, and D notes following its discovery that S&P placed
these ratings on CreditWatch negative in error when its
counterparty criteria became effective on Jan. 18.
* Notwithstanding this correction, S&P placed on CreditWatch
negative its ratings on the class B, C, and D notes for credit
stability reasons not connected with the counterparty criteria.
* S&P has updated the CreditWatch status of its rating on the
class A notes. On Jan. 18, S&P placed this rating on
CreditWatch negative for counterparty reasons. From February
25, the ratings are additionally on CreditWatch negative for
credit stability reasons.
The rating actions follow an initial review of the transaction's
performance, which took into account the increasingly concentrated
nature of the portfolio and structural features of the
transaction.
S&P note that the levels of delinquencies and defaults in the
underlying pool are relatively low compared with similar
transactions. However, S&P also note that the issuer received no
recoveries during 2010 on the defaulted assets in the pool,
defined in the transaction documents as loans in arrears for 18
months or more.
S&P is currently assessing the risks to the credit stability of
the ratings on the notes. While S&P has not yet concluded its
analysis, its initial assessment indicates the possibility of
downgrades to all classes of notes. S&P's ratings are therefore
on CreditWatch negative pending the completion of its analysis.
S&P intend to investigate further the credit quality of the
underlying assets and assess how its ratings might be affected by
adverse changes in a pool with these concentrations.
Additionally, for the class A notes, S&P will review whether the
transaction documents comply with S&P's updated counterparty
criteria and resolve the CreditWatch placement for counterparty
reasons.
CM Bancaja 1 issued EUR556.2 million of notes in September 2005.
The notes are backed by loans made by Caja de Ahorros de Valencia,
Castellon y Alicante (Bancaja) to small and midsize enterprises
located in Spain. Bancaja acts as servicer of the loans backing
CM Bancaja 1's notes.
Ratings List
CM Bancaja 1, Fondo de Titulizacion de Activos
EUR556.2 Million Floating-Rate Notes
Ratings Removed From CreditWatch Negative
Rating
------
Class To From
----- -- ----
B BBB- BBB-/Watch Neg
C BB- BB-/Watch Neg
D B- B-/Watch Neg
Ratings Placed on CreditWatch Negative
Rating
------
Class To From
----- -- ----
B BBB-/Watch Neg BBB-
C BB-/Watch Neg BB-
D B-/Watch Neg B-
Rating Kept on CreditWatch Negative
Rating
------
Class To From
----- -- ----
A AA+/Watch Neg AA+/Watch Neg
TDA IBERCAJA: S&P Assigns 'BB (sf)' Rating on Class D Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its credit ratings to
TDA Ibercaja 6, Fondo de Titulizacion de Activos' class A, B, C,
and D notes. At closing, TDA Ibercaja 6, FTA also issued unrated
class E notes.
This transaction closed in June 2008, but S&P were not engaged to
rate the notes at that time. Since closing, the class A notes
have amortized to EUR1,169,104,176 from an initial amount of
EUR1,440,000,000.
The transaction securitizes a pool of mortgage loans granted to
individuals and originated by Caja de Ahorros y Monte de Piedad de
Zaragoza, Aragon y Rioja (Ibercaja) in Spain.
The main features of the transaction are:
* TDA Ibercaja 6 was established as a Fondo de Titulizacion de
Activos. The transaction was structured with an asset swap, and
with a reserve fund that will represent 2.85% of the outstanding
balance of the notes.
* Ibercaja (A/Negative/A-1) also acts as servicer, swap provider,
and reinvestment account provider, and Instituto de Credito
Oficial (AA/Negative/A-1+) acts as paying agent. As with
other Spanish transactions, interest and principal are combined
into a single priority of payments, with deferral-of-interest
triggers and pro rata amortization rules.
S&P's analysis indicated these key risks:
* Geographical concentration: More than 45% of the mortgage loans
are concentrated in the Madrid and Aragon regions. S&P has
taken this into consideration in S&P's credit analysis.
* Arrears: Excluding defaulted loans, more than 3.5% of the
underlying mortgage loans are currently in arrears for more than
30 days. S&P increased the weighted-average foreclosure
frequency stress assumption for the mortgage loans,
depending on the number of days the loan was delinquent.
* Foreign borrowers: Approximately 9% of the borrowers in the pool
are foreign borrowers. S&P has taken this into consideration in
its credit analysis, as loans to these borrowers have tended to
show a worse performance.
S&P's ratings on the class A, B, C, and D notes reflect its
assessment of the credit and cash flow characteristics of the
underlying asset pool, as well as an analysis of the counterparty
and operational risks of the transaction. S&P's analysis
indicates that the credit enhancement available to the notes is
sufficient to mitigate the credit and cash flow risks to their
respective ratings levels.
Additionally, S&P considers that the transaction documents
adequately mitigate the counterparty risk from the interest rate
swap, the reinvestment account provider, and the treasury account
provider, to a 'A+' rating level, in line with S&P's updated
counterparty criteria.
S&P intend to publish a new issue report on this transaction in
the coming weeks.
Ratings List
TDA Ibercaja 6, Fondo de Titulizacion de Activos
EUR1.521 Billion Asset-Backed Floating-Rate Notes
Current Amount at
amount closing[1]
Class Rating (mil. EUR) (mil. EUR)
----- ------ ---------- ----------
A A+ (sf) 1,169.10 1,440.00
B A- (sf) 30.00 30.00
C BBB- (sf) 15.00 15.00
D BB (sf) 15.00 15.00
E NR 21.00 21.00
[1] As of June 19, 2008.
NR -- Not rated.
=====================
S W I T Z E R L A N D
=====================
BARRY CALLEBAUT: S&P Corrects Ratings on EUR850-Mil. Facility
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it has corrected an
error relating to its issue and recovery ratings on a EUR850
million revolving credit facility, jointly borrowed by
Switzerland-based chocolate company Barry Callebaut AG
(BB+/Positive/--), and its subsidiary Barry Callebaut Services
N.V.
The ratings on this RCF were withdrawn on Dec. 31, 2010, due to a
data input error because S&P's database had not been updated with
the RCF's new maturity dates of 2012 and 2013, when they were
extended in 2007.
S&P has corrected the error by reinstating its 'BB+' issue and '4'
recovery ratings on the RCF. S&P's other ratings on Barry
Callebaut are unaffected.
===========================
U N I T E D K I N G D O M
===========================
CASTLE STREET: Goes Into Administration, Owes Half a Dozen Bars
---------------------------------------------------------------
BBC News reports that Castle Street Inns Ltd has been placed into
administration, and owes about half a dozen bars, including the
Brook Lodge Bar, Becketts and the Blackstaff. The report relates
that all the company's businesses are continuing to trade.
Company documents indicate that Bank of Scotland Ireland (BoSI)
held a number of mortgages in relation to the bars, according to
BBC News.
Headquartered on Kennedy Way, Castle Street Inns Ltd is a West
Belfast pub chain. It also runs a Tony Romas restaurant franchise
in south Belfast. The company is controlled by west Belfast
publicans, the Hughes family.
PRIVET CAPITAL: Okehampton Staff Call for Job News
--------------------------------------------------
BBC News reports that Polestar Foods business leaders and former
workers are calling on its new owner to disclose quickly if staff
has a chance of re-employment. Polestar Food is Privet Capital's
former Polestar factory at Okehampton.
As reported in the Troubled Company Reporter-Europe on Feb. 21,
2011, BBC News said that the Polestar factory at Okehampton has
been sold to Devonshire Desserts. BBC News related that about 200
staff awaited disclosure on the future of a Devon dessert factory.
The report said some workers at Polestar Foods in Okehampton were
not paid and a sister factory in Warwickshire has gone into
administration. BBC News noted that Privet Capital had said it
would be speaking to staff and was taking the situation "extremely
seriously". Administrator FRP Advisory said Devonshire Desserts
was the "one viable offer" for the factory, according to BBC News.
Former factory staff may not hear for at least another fortnight
if they have a chance of re-employment, according to BBC News.
BBC South West Correspondent Simon Hall said: "The new owner has
made no comment on the future of the factory, but the BBC has
learnt that it is carrying out a fundamental review of business in
a bid to make it profitable. It's likely to be about two more
weeks before there's any announcement of how many of the staff
will be re-employed," the report adds.
Headquartered in United Kingdom, Privet Capital is a private
equity firm.
* UNITED KINGDOM: Colchester Council Wipes Out GBP262,000 of Debts
------------------------------------------------------------------
Helen Orrell at Essex County Standard reports that debts of more
than œ262,000 are to be wiped out by Colchester Council.
A total of GBP262,253 of unpaid business rates and housing benefit
will be written off after the council exhausted ways of getting
back the cash from businesses and residents, according to Essex
County Standard. The report relates that the amount of unpaid
business rates being written off is GBP227,189.
Of that, about GBP100,000 is money owed by Vergo, which went into
administration in May last year leaving rates owed at its three
Colchester stores, the report notes. Essex County Standard
discloses that nearly GBP70,000 relates to businesses suspected of
not paying rates that went into liquidation before the council
could recover the money.
"We have pursued them, but the companies are all in liquidation
with no assets to distribute. They know the rules. We have to
assess them, they appeal the assessment, we send out a notice,
they have a month to wait before we start legal proceedings and
just as it gets to court, the companies vanish and we have to
write off the debt. They can go through the process again and
again and there is very little we can do. There are businesses
now operating in the town that have shut down and reopened again
under the same name, but a different company," Essex County
Standard quotes Paul Smith, councilor responsible for finance, as
saying.
The report notes that the remaining GBP50,000 relates to
businesses which paid most of their rates, but finally went under.
A further GBP21,080 in overpaid housing benefit has also been
written off, as well as GBP14,000 owed by a woman, who sub-let her
council house to a tenant, who then gutted it, Essex County
Standard adds.
*********
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
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re-mailing and photocopying) is strictly prohibited without prior
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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,
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