/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/110316.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 16, 2011, Vol. 12, No. 53 Headlines B U L G A R I A * BULGARIA: Big Bus Companies Face Bankruptcy G E R M A N Y CONTINENTAL AG: S&P Gives Positive Outlook; Affirms 'B/B' Rating G R E E C E DRYSHIPS INC: Ocean Rig to Hold Shareholders Meeting on April 15 * Moody's Retains Rating Review on All Existing Structured Finance I R E L A N D CUDDY DEVELOPMENT: Allied Irish Bank Places Firm Into Receivership HOUSE OF EUROPE: Fitch Cuts Ratings on Four Senior Notes to 'C' PATRICK CARMODY: Goes Into Receivership, Owes EUR3 Million R U S S I A ALFA BANK: S&P Raises LT Counterparty Issuer Rating to 'BB-' EVRAZ GROUP: S&P Raises Corporate Credit Rating to 'B+' ROOF RUSSIA: Fitch Upgrades Ratings on Class D Notes to 'B+sf' S P A I N VALENCIA HIPOTECARIO: Moody's Cuts Ratings on Various Notes to C U K R A I N E RODOVID BANK: Central Bank Extends Administration for Sixth Time SSB NO 1: Fitch Assigns 'B' Long-Term Rating on US$500-Mil. Notes U N I T E D K I N G D O M BANK OF SCOTLAND: S&P Corrects Rating on GBP57.8-Mil. Notes BRADFORD & BINGLEY: Investors Not Eligible for Compensation ELYSIUM HEALTH: Goes Into Administration, 35 Jobs in Limbo ETIC SOLUTIONS: FSA Appoints Provisional Receivers KYNIXA: Corpore Saves Insurers Estimated GBP1 Million LUDGATE FUNDING: Fitch Cuts Rating on Class E Notes to 'CCCsf' MANSARD MORTGAGES: S&P Affirms 'B-' Rating on Class B2a Notes PEVEREL GROUP: Four Units Goes Into Administration PLYMOUTH ARGYLE: Administrators Receives Numerous Offers TAYLORS THE BAKERS: Saved From Administration for The Second Time X X X X X X X X * EUROPE: Orderly Restructuring Beneficial in "Extreme Cases" ********* =============== B U L G A R I A =============== * BULGARIA: Big Bus Companies Face Bankruptcy --------------------------------------------- FOCUS News Agency reports that Mirolyub Stolarski, chairman of the Bulgarian Union of Associations in Automotive Transport, said big bus companies in the country face bankruptcy. According to FOCUS News Agency, Mr. Stolarski said the bus haulers are forced to raise ticket prices for intercity buses, otherwise their expenses will exceed their incomes and they will suffer losses. FOCUS News Agency relates that Mr. Stolarski also said a few bus companies had pushed their ticket prices up so far. He said the reason is the insufficient number of passengers, FOCUS News Agency notes. Raising ticket prices is not a solution, especially in the regions where competition is fierce, FOCUS News Agency states. ============= G E R M A N Y ============= CONTINENTAL AG: S&P Gives Positive Outlook; Affirms 'B/B' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it had revised its outlook on German automotive supplier Continental AG to positive from stable. At the same time, S&P affirmed the long- and short- term corporate credit ratings at 'B/B'. "The outlook revision reflects S&P's belief that Continental is likely to continue to maintain a financial risk profile commensurate with the ratings and its expectation that Continental is likely to refinance its August 2012 maturities," said Standard & Poor's credit analyst Werner Staeblein. S&P continue to apply its parent-subsidiary criteria when assessing the corporate credit ratings on Continental. Schaeffler Holding GmbH & Co. KG continues to hold a 42% stake in Continental and two German banks hold a 33% stake in trust. Although Schaeffler is contractually restricted on the shares held by the banks and Continental's bank facility agreements include covenants protecting creditors, S&P sees a risk that Schaeffler could influence Continental's strategic actions, including its financial risk profile. S&P views Schaeffler's credit profile as weaker than Continental's stand-alone credit profile ('bb' category). In applying S&P's parent-subsidiary criteria, S&P must factor the credit profile of the weaker parent (Schaeffler) into the corporate credit ratings of the subsidiary (Continental). As a result, Schaeffler's influence is captured in S&P's financial risk profile and the corporate credit rating on Continental is 'B' with a business risk profile of "satisfactory" and a financial risk profile of "highly leveraged". Continental's business risk profile is underpinned by solid market shares, size, diversity, technological capabilities, and ability to generate above industry-average profitability. Continental reported solid financials for 2010. Moreover, Continental's public guidance for 2011 suggests a sales level of about EUR28 billion and the same EBIT margin achieved in 2010 (9.7%), despite expected incremental raw material costs. S&P's forecast for 2011 is slightly below the company's guidance, but overall points toward positive free operating cash flow, which should lead to further deleveraging. In July-October 2010, Continental issued EUR3.0 billion in public bonds, using the proceeds to pay down bank debt and extend its maturity profile. Moreover, the company announced it had begun refinancing its bank debt due in August 2012. S&P understand that Continental is seeking to extend the maturity of the bank instruments by three years and that the company likewise plans to partly pay off some of the maturities in 2011 and 2012. S&P believes Continental will be able to refinance the bank debt, given its solid operating results and outlook, and recently proven ability to raise bonds and bank debt, specifically at times when the prospects for the auto industry were significantly worse, The positive outlook reflects S&P's belief that Continental is likely to continue to maintain a financial risk profile commensurate with the ratings and its expectation that Continental will likely be able to refinance its August 2012 maturities. "An upgrade could follow Continental's successful refinancing of its bank debt due in August 2012," said Mr. Staeblein. S&P could likewise raise the ratings if Schaeffler's credit quality improves. Moreover, an upgrade would be linked to the continuation of solid operating results and the use of positive free cash flow to gradually deleverage. An indicative ratio for the current long-term rating of 'B' to be maintained is funds from operations to debt of 15%. Given that Continental expects to maintain ratios of about 25% in 2011 and beyond, the company has meaningful headroom at the current rating level. This is why S&P does not envisage downward rating pressure at this stage, absent any liquidity issue and all other things being equal. Liquidity developments, in S&P's view, represent the main swing factor for the ratings over the short term: if Continental is unable to refinance the August 2012 maturities, it would likely lead us to reassess Continental's credit quality. =========== G R E E C E =========== DRYSHIPS INC: Ocean Rig to Hold Shareholders Meeting on April 15 ---------------------------------------------------------------- Ocean Rig UDW Inc., DryShips Inc.'s subsidiary, expects that a special meeting of shareholders will be held on April 15, 2011, at 16:00 local time at the Company's offices located at 10 Skopa Street, Tribune House, 2nd Floor, Office 202, CY 1075, Nicosia, Cyprus. It is expected that Ocean Rig UDW Inc. shareholders of record at the close of business on March 10, 2011 will be entitled to receive notice and to vote at the special meeting or any adjournments or postponements thereof. Formal notice of the special meeting and the Company's proxy statement containing the proposals that shareholders will be asked to consider and vote upon will be sent to shareholders of the Company when available. Shareholders are urged to read the proxy statement when available because it will contain important information. About DryShips Inc. Based in Greece, DryShips Inc. -- http://www.dryships.com/-- -- owns and operates drybulk carriers and offshore oil deep water drilling units that operate worldwide. As of September 10, 2010, DryShips owns a fleet of 40 drybulk carriers (including newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.6 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS". The Company's balance sheet at Sept. 30, 2010, showed US$5.80 million in total assets, US$1.90 million in total current liabilities, US$1.10 million in total noncurrent liabilities, and stockholders' equity of US$2.80 million. On November 25, 2010, DryShips Inc. entered into a waiver letter for its US$230.0 million credit facility dated September 10, 2007, as amended, extending the waiver of certain covenants through December 31, 2010. As reported in the Troubled Company Reporter on Sept. 29, 2010, the Company said it is currently in negotiations with its lenders to obtain waivers, waiver extensions or to restructure its debt. As of June 30, 2010, the Company's theoretical exposure (current portion of long-term debt less cash and cash equivalents less restricted cash) amounted to US$761.4 million. * Moody's Retains Rating Review on All Existing Structured Finance ------------------------------------------------------------------ Moody's Investors Service said that it does not expect Greek structured transactions to retain or achieve ratings of A3(sf) or higher. This statement follows its downgrades of Greece's government bond ratings to B1 on March 7, 2011 ("Moody's downgrades Greece to B1 from Ba1, negative outlook") and several Greek banks on 9 March 2011 to a rating of Ba3 or lower ("Moody's downgrades the ratings of six Greek banks"). Moody's placed or maintained all existing structured finance ratings in Greece on review for downgrade on Dec. 21, 2010. Greek Structured Finance Ratings Expected to Drop Below A3(sf) Regardless of the structural features or the amount of credit enhancement in place, structured finance transactions are not immune to the risk of certain high severity events. These events include a severe macro-economic decline and a deterioration in a sovereign or local banks' creditworthiness. Severe macro-economic decline disrupts asset performance. The deterioration of the banking system leads to operational risk from the potential disruption of the performance of key transaction parties, such as banks that act as servicers. In addition, while Moody's central scenario does not include a sovereign default or distressed exchange, the consequences of either event, including possible changes in the terms or enforcement of certain debt contracts, could overwhelm the benefits of credit enhancement and structural mitigants. The potential emergence of these events implies high and rapid transition risk. Nonetheless, in analyzing each structured finance transaction, Moody's will continue to recognize that transactions with high credit enhancement can sustain significant asset performance deterioration and that operational risk mitigants can reduce the linkage between the structured finance ratings and the credit quality of key transaction parties. The low but increased likelihood of Greece defaulting or entering into a distressed exchange, expressed in the downgrade of the Greek government debt rating, equates to an increased likelihood for high severity events to occur. As a result, Moody's now no longer expects a rating on Greek structured finance transactions to retain or achieve a rating of A3(sf) or higher. Ratings of Greek Structured Finance Transactions Currently on Review for Possible Downgrade All Greek Consumer and SME/Lease ABS, RMBS and CLO transactions have ratings on review for possible downgrade. During its review, Moody's will take into account the features of each transaction including the level of credit enhancement, the current rating of the main counterparties and the structural mitigants for operational and other counterparty risks. The level of rating migration will vary depending on the relative strengths of these features. Moody's expects to downgrade all senior ratings to Baa1(sf) or below. Moody's plans to conclude its review of all Greek Consumer and SME/Lease ABS, RMBS and CLO transactions within the next two months. ============= I R E L A N D ============= CUDDY DEVELOPMENT: Allied Irish Bank Places Firm Into Receivership ------------------------------------------------------------------ The Sunday Business Post Online, citing Gavin Daly, reports that Allied Irish Bank (AIB) has put Cuddy Development into receivership following a loan it gave to the company in 2008. Michael Butler of Dublin accountancy firm Butler Reddy & Co is receiver to Cuddy Development, according to the report. The firm, owned by Sean and Shane Cuddy, bought a site for EUR2 million in 2004 and spent almost EUR1 million developing it, the report recounts. However, in 2008, the firm wrote down the value of the project by EUR274,000, the report discloses. At the end of June 2008, it valued its stocks and work-in progress at EUR3 million and owed more than EUR2.6 million to creditors, the report adds. Galway-based Cuddy Development is a builder company. HOUSE OF EUROPE: Fitch Cuts Ratings on Four Senior Notes to 'C' --------------------------------------------------------------- Fitch Ratings has downgraded four senior notes of House of Europe Funding I, Ltd., House of Europe Funding II PLC and House of Europe Funding III PLC and placed three principal protected junior notes on Rating Watch Negative: HoE1 -- EUR496m Class A: downgraded to 'C' from 'CCC' -- EUR65m Class B: downgraded to 'C' from 'CC' -- EUR5m Certificates: 'AAA' placed on RWN HoE2 -- EUR647m Class A: downgraded to 'C' from 'CC' -- EUR5m Class E: 'AAA' placed on RWN HoE3 -- EUR564m Class A: downgraded to 'C' from 'CC' -- EUR5m Class E: 'AAA' placed on RWN The senior notes have been downgraded to 'C' due to the risk of an event of default being triggered on the transaction. The HoE1, HoE2 and HoE3 senior notes' interest coverage ratios are below 100% and the transactions are not receiving sufficient interest proceeds to service interest on the senior notes. HoE2 did not pay the class B interest in February 2011 and an EoD has been triggered. HoE1 and HoE3 rely on receipt of principal proceeds to maintain timely payment of interest on the senior notes and are at risk of an EoD. HoE1's certificates and HoE2 and HoE3's class E notes are rated on a principal-only basis and benefit from the support of zero-coupon French government bonds (rated 'AAA'/Stable) to repay the notes' notional. The RWN reflects the operational risks related to the collateral liquidation process and whether the junior noteholders would ultimately hold the government bonds if the transaction noteholders enforce the transaction collateral following an EoD. Upon an EoD, noteholders can instruct the trustee to liquidate the transaction's collateral, which includes the French government bonds. The junior noteholders can bid for the French government bonds and would thus not suffer a principal loss if they successfully bid for these bonds. If the government bonds are sold to another party, then the cash settlement would provide investors with the current value of the government bonds. However, under this scenario the economic position of the junior noteholders would be unchanged because the noteholders could purchase the French government bonds on the open market using the liquidation proceeds. The agency would treat these outcomes as the junior notes being paid-in full. However, Fitch highlights that the enforcement of the collateral present some operational risks for the junior noteholders. PATRICK CARMODY: Goes Into Receivership, Owes EUR3 Million ---------------------------------------------------------- The Sunday Business Post Online, citing Gavin Daly, reports that Patrick Carmody Construction has gone into receivership, as banks continue their action against heavily-indebted builders. Association of Corporate Council (ACC) has appointed Gearoid Costelloe of Grant Thornton in Limerick as receiver to the company, according to the report. The report notes that Patrick Carmody Construction owed more than EUR3million to creditors at the end of June 2009, according to its latest accounts. The firm had assets worth less than EUR650,000 and was owed more than EUR2.8 million by debtors, the report says. Headquartered in Clare, Patrick Carmody Construction is a builder company that founded in 2001 in Ennis. =========== R U S S I A =========== ALFA BANK: S&P Raises LT Counterparty Issuer Rating to 'BB-' ------------------------------------------------------------ Standard & Poor's Ratings Services raised the long-term counterparty issuer credit rating on Russia-based OJSC Alfa Bank to 'BB-' from 'B+'. The outlook is stable. "The upgrade reflects an improvement in the quality of the bank's loans, as well as its good earnings prospects," said Standard & Poor's credit analyst Scott Bugie. In S&P's opinion, Alfa Bank has a consistent strategy and established franchise that leave it well positioned to benefit from any growth in the Russian economy and financial industry over the medium term. S&P believes the Russian credit cycle bottomed out in the first half of 2010. At its lowest point, S&P estimate that 35%-40% of system-wide loans were either delinquent or restructured. Since then, credit quality has improved markedly. Alfa Bank's nonperforming loans (excluding restructured loans) declined to 7.5% of loans on June 30, 2010, from a peak of 14% on Dec. 31, 2009. Compared with its Russian peers, Alfa Bank has taken an aggressive stance with respect to restructuring and collecting on the debts of problem borrowers. At the nadir of the downturn, the Russian government supported its banks through huge collateralized loans from the central bank and an injection of subordinated loan capital. Alfa Bank has since repaid all its collateralized borrowings, but still owes $1.3 billion of subordinated debt to state-owned financial institution Vnesheconombank. "The stable outlook reflects S&P's view that Alfa Bank will grow in line with the Russian banking sector and improve its financial profile, but that progress in the domestic operating environment may be slow and uneven," said Mr. Bugie. S&P believes that the Russian banking industry is at the beginning of another growth period that could continue for several years. S&P projects that system-wide loans will increase by 10%-20% in real terms in 2011. Nonetheless, S&P believes that state-owned banks will reinforce their already dominant position in the Russian banking market. Interest margins have already narrowed somewhat following increased competition for deposits and good quality borrowers. S&P's base estimate is that Alfa Bank's net income in 2011 will fall within S&P's projections for full-year 2010 of $400 million- $600 million and that loan loss provisions will total 2%-3% of loans because of lingering problems caused by the 2009 recession and the usual rate of credit losses in Russia. S&P would raise the ratings if the operating environment, legal framework, and banking regulations improve. A reduction of concentrations in loans and deposits at Alfa Bank could also lead to an upgrade. S&P could lower the ratings if Russia entered a recession, or if Alfa Bank loosened its risk management, liquidity, or debt policies. S&P does not expect any of these under S&P's base-case scenario for the Russian banking industry or for Alfa Bank. EVRAZ GROUP: S&P Raises Corporate Credit Rating to 'B+' ------------------------------------------------------- Standard & Poor's Ratings Services said that it has raised to 'B+' from 'B' its long-term corporate credit rating on Russia- headquartered international steel producer Evraz Group S.A. The outlook is stable. At the same time, S&P raised the Russia national scale rating on Evraz to 'ruA' from 'ruA-'. S&P has raised to 'B+' from 'B' its long-term rating on the debt instruments issued by Evraz, in line with the corporate credit rating. The recovery rating on this debt remains at '4', indicating S&P's expectation of average (30%-50%) recovery for creditors in the event of a payment default. "The upgrade reflects an improvement of Evraz's liquidity, which S&P now assess as adequate, following the refinancing of short- term debt," said Standard & Poor's credit analyst Andrey Nikolaev. Evraz used the proceeds of its RUB15 billion bond placement and $950 million pre-export finance facility to refinance this debt. "Evraz is also benefiting from a stronger financial performance in 2010 and 2011 on the back of more favorable industry conditions," said Mr. Nikolaev. As an integrated steel manufacturer, Evraz should benefit in particular from the strong rise in iron ore and coal prices. S&P now views Evraz's financial risk profile as "aggressive," an improvement from "highly leveraged" previously. The improvement reflects now adequate liquidity, and its expectation of improving financial metrics in 2011: S&P anticipates a fully adjusted ratio of funds from operations to debt of about 20%-25% in 2011. S&P also notes the more prudent liquidity management and investment policy the company has adopted, although so far its track record is limited in this respect. The financial risk profile remains constrained by still sizable gross debt, which S&P estimates was about US$8 billion on Dec. 31, 2010, and substantial maturities of about US$2 billion per year over 2013-2015. S&P continue to view Evraz's business risk profile as "fair." Supportive factors for the business risk profile include a leading domestic market position, especially in long steel products; a high level of vertical integration into its own raw materials; and the group's international operations. This is offset, however, by exposure to the cyclical steel industry, a high share of semi- finished products in the company's product mix, and Russia country risks. The stable outlook reflects S&P's opinion that Evraz's financial metrics over 2011-2012 will remain at the levels commensurate with the current rating. In particular, S&P think that the fully adjusted ratio of FFO to debt will be about 20%. S&P also factors in that management will maintain its prudent approach to liquidity and will refinance its sizable 2013 maturities well in advance. S&P could raise the rating again, if the company substantially reduces its gross debt, for example through better-than-expected free cash flow or disposals. Credit metrics consistent with a higher rating would be a fully adjusted ratio of FFO to debt of about 30% on a sustainable basis. S&P thinks this is likely to require a material improvement in industry conditions. Any upgrade would most likely also be conditional on significantly lower debt maturities in 2013 and 2014. S&P could lower the rating if industry conditions deteriorate unexpectedly, putting pressure on the company's credit metrics and reducing the headroom under its maintenance financial covenants. ROOF RUSSIA: Fitch Upgrades Ratings on Class D Notes to 'B+sf' -------------------------------------------------------------- Fitch Ratings has upgraded ROOF Russia S.A.'s notes: -- Class A US$4.8m notes upgraded to 'BBB+sf' from 'BBBsf'; Outlook Positive; assigned a Loss Severity (LS) rating of 'LS-1' -- Class B US$13.8m notes upgraded to 'BBB+sf' from 'BBB-sf'; Outlook Positive; assigned 'LS-1' -- Class C US$17.9m notes upgraded to 'BBsf' from 'BB-sf'; Outlook Positive; assigned 'LS-1' -- Class D US$3.5m notes upgraded to 'B+sf' from 'B-sf'; Outlook Positive; assigned 'LS-2' The upgrades reflect the positive impact of the transaction's de- leveraging on the senior notes, as well as the improved performance of the underlying receivables in the past year and the improved macro-economic environment in Russia ('BBB'/Positive/'F3'). As there is no transfer and convertibility risk cover in the structure, the notes' ratings are capped by the country ceiling of the Russian Federation ('BBB+'). The 30-90 day delinquency ratio was 1.3% in January 2011, down 0.6% from 1.9% in January 2010. Cumulative gross defaults were 1.6% for the same point in seasoning, remaining in line with Fitch's revised base case value (2.26%) for the transaction. Excess spread has also shown a positive trend, increasing to 12.4% in January 2011 from 5.6% in January 2010. The transaction is a securitization of US dollar fixed rate amortizing auto loans originated in Russia by Raiffeisenbank Austria ZAO for the purchase of new non-Russian vehicles by middle to high-income borrowers. ========= S P A I N ========= VALENCIA HIPOTECARIO: Moody's Cuts Ratings on Various Notes to C ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of all notes issued by Valencia Hipotecario 2, Valencia Hipotecario 3 and Valencia Hipotecario 4. The ratings of all rated notes in Valencia Hipotecario 2, 3 and 4 were placed on review for possible downgrade in November 2009 due to the worse than expected performance of the collateral. In September, Moody's commented that Moody's were investigating the credit performance in the Valencia Hipotecario series, which had experienced irregular delinquency trends in the period Q4-09 to Q2-10. Ratings Rationale The rating action takes into consideration the worse-than-expected performance of the collateral. It also reflects Moody's negative sector outlook for Spanish RMBS and the weakening of the macro- economic environment in Spain, including high unemployment rates. In September 2010, Moody's noted that Valencia Hipotecario 1 to 5 RMBS had shown irregular credit performance since their reporting period in Q4-09. The deals, managed by Europea de Titulizacion, experienced spikes in arrears in early 2010 followed by a rapid improvement in credit trends over the subsequent reporting periods. Banco de Valencia (Baa1/P-2/under review) explained to us that the arrears in the Valencia Hipotecario series had been overstated for the period Q4-09 to Q2-10. The release of new IT systems on Oct. 17, 2009 affected the transmission of mortgage repayment to the management company. Edt failed to receive the payment data relating to loans in arrears, which resulted in an overestimation of arrears. Banco de Valencia provided EdT with additional files to progressively adjust the arrears reporting figure. The arrears data has not been corrected retrospectively in the investor reports. Banco de Valencia confirmed that the default figure remained correct following the IT conversion. 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: Moody's has reassessed its lifetime loss expectation for Valencia Hipotecario 2, 3 & 4 taking into account the collateral performance to date as well as the current macroeconomic environment in Spain. All 3 deals are performing worse than Moody's expectations as of closing. The share of loans in 90 days + arrears was standing at 1.2% of current pool balance in Valencia Hipotecario 3 at the end of December 2010. Loans in 90 days to 18 months in arrears represented 1.0% and 2.62% of current pool balance in Valencia Hipotecario 2 and 4 respectively in January 2011. Cumulative 18 months delinquency, shown in the investor reports, reached 1.06%, 0.93% and 5.33% of original pool in Valencia Hipotecario 2, 3 and 4 respectively at the end of January 2011. We recalculated a cumulative write-offs figure for the Valencia Hipotecario transactions by adding up 1) cumulative 18 months delinquency and 2) property acquisitions relating to delinquent mortgages less than 18 months overdue. Edt provided us with the amount property acquisitions relating to delinquent mortgages less than 18 months in arrears. Moody's understand that Banco de Valencia has acquired property after granting "dacion en pago" to delinquent borrower. "Dacion en pago" is a voluntary agreement whereby the borrower hands over the possession of the property to the lender to clear the outstanding mortgage debt. As at October 2010, property acquisitions relating to delinquent mortgages less than 18 months overdue represented 0.02%, 0.13% and 0.83% of original pool balance in Valencia Hipotecario 2, 3 and 4 respectively. Cumulative write-offs for the Valencia Hipotecario 2,3 and 4 represented 1.08%, 1.06% and 6.16% of original balance as Juanuary 2011. The rapidly increasing levels of write-offs ultimately resulted in draws to the reserve fund in all 3 transactions and build-up in unpaid principal deficiencies ledgers in Valencia Hipotecario 4 (EUR22.9 million) as at the last payment date. 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. On the basis of the rapid increase in write-offs in the transactions and Moody's negative sector outlook for Spanish RMBS, Moody's have updated the portfolio expected loss assumption to 1.3% of original pool balance in Valencia Hipotecario 2, 1.6% in Valencia Hipotecario 3 and 5.9% in Valencia Hipotecario 4. MILAN Aaa CE: Moody's has assessed the loan-by-loan information for Valencia Hipotecario 2, 3 and 4 to determine the MILAN Aaa CE. Moody's has revised its MILAN Aaa CE assumptions to 7% in Valencia Hipotecario 2, 8% in Valencia Hipotecario 3 and 18% in Valencia Hipotecario 4, up from closing assumptions of 3.55%, 3.65% and 6.05% respectively. The increase in the MILAN Aaa CE reflects the high geographical concentration on the Mediterranean coast, and the exposure to loans originated to new residents. 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 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. Operational Risk: The rating of Banco de Valencia (Baa1/P-2) is on review for possible downgrade. Banco de Valencia is the servicer in all three transactions. Moody's notes that operational risk in these transactions is only partially mitigated as there is no trigger in place to appoint a back-up servicer. The operational risk is not a driver of the rating action on the notes in Valencia Hipotecario 3 and 4. But, it is the driver of the rating action on the senior notes in Valencia Hipotecario 2. Moody's notes that the reserve fund in Valencia Hipotecario 2 is not at target level and that no other sources of liquidity are available in the transaction. Moody's expect further draw-downs on the reserve fund and the absence of liquidity in the transactions could impair the ability of the Issuer to make timely payment of interest on the notes, particularly in case of a servicing transfer. Moody's considers that the risk of a missed payment of interest on the Class A of Valencia Hipotecario 2 is not commensurate with a Aaa-rating and therefore has downgraded the rating for this class of notes. Banco de Valencia acts as servicer, collection account bank and swap counterparty in the deals. A severe downgrade of the servicer into the Baa3/Ba range will impact further the ratings of the senior notes in Valencia Hipotecario 2 & 3. Transaction Features Valencia Hipotecario 2, 3 and 4 closed in December 2005, November 2006 and December 2007 respectively. The transactions are backed by portfolios of first-ranking mortgage loans originated by Banco de Valencia (Baa1/P-2/on review for possible downgrade) and secured on residential properties located in Spain, for an overall balance at closing of EUR940 million, EUR900 million and EUR950 million, respectively. The securitized mortgage portfolios benefit from a relatively low weighted average LTV, currently about 55% in Valencia Hipotecario 2 and 3 and 64% in Valencia Hipotecario 4. The three pools are fairly exposed to the Mediterranean coast, with between 62% and 68% exposure to the Valencia region. Non-Spanish borrowers represent between 4 and 5% of current pool balance in Valencia Hipotecario 2 and 3 and about 18% in Valencia Hipotecario 4. Non- Spanish borrowers have been affected by difficult economic conditions such as increasing unemployment. Moody's performed a loan-by-loan analysis of all delinquent and written-off loans in the three Valencia Hipotecario RMBS. In Valencia Hipotecario 4, the write-off rate for loans granted to non-Spanish national (calculated as the written-off loan amount divided by original pool balance of loans originated to non-Spanish borrowers) is between 6 to 7 times the write-off rates of loans granted to Spaniards. Some features in the deals have changed since closing: Hedging agreement: All 3 transactions benefit from an interest rate swaps provided by Banco de Valencia. Following its downgrade, Banco de Valencia has chosen to take remedial action by way of posting collateral in Valencia Hipotecario 3 and 4. Banco de Valencia is transferring cash collateral to the Treasury Account and then such collateral is resized on a weekly basis in an amount equal to First Trigger Collateral Amount as stated in the swap documents. In Valencia Hipotecario 2, Bancaja (A3/P2/DWG) is the guarantor of the obligations of Banco de Valencia under the interest rate swap agreement and is posting collateral. The swap arrangements in the Valencia Hipotecario series are in line with the requirements described in Moody's report titled "the Framework for De-linking Hedge Counterparty Risks from Global Structured Finance. Treasury Bank Accounts: For all 3 transactions, collections are paid to Banco de Valencia (Baa1/P2/on review) and then transferred every 24 to 48 hours to the treasury account held at Banco Popular Espanol (Aa3 On review/P1). Paying Agents: Banco Popular Espanol (Aa3 On review/P1) acts as paying agent in all 3 transactions Reserve fund: The rapidly increasing levels of defaulted loans ultimately resulted in draws to the reserve fund in Valencia Hipotecario 2 and Valencia Hipotecario 3 to 97% of target level. The reserve fund is fully depleted in Valencia Hipotecario 4 and the unpaid principal deficiency ledger currently represent 3.2% of current pool balance. Interest Defferral Trigger in Valencia Hipotecario 4 Class C interest in Valencia Hipotecario 4 were deferred on the interest payment date falling on Jan. 20, 2011. Under the revised expected loss assumption for Valencia Hipotecario 4, the downgrade of class B considers the likelihood that interest will be deferred also for this class of notes if recoveries on defaulted loans fail to materialize quickly. Interest on the class B notes are to be deferred if unpaid PDL (currently EUR22.9 million) exceed the sum of the Class C (EUR23.8 million) and 50% of Class B (EUR42.8 million). The principal methodologies used in this rating were Moody's MILAN Methodology for Rating Spanish RMBS published in July 2008 and Revising Default/Loss Assumptions Over the Life of an ABS/RMBS Transaction published in December 2008. 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: Valencia Hipotecario 2 Fondo de Titulizacion Hipotecario -- EUR909.5M A Certificate, Downgraded to Aa1 (sf); previously on Nov 30, 2009 Aaa (sf) Placed Under Review for Possible Downgrade -- EUR21.2M B Certificate, Downgraded to A2 (sf); previously on Nov 30, 2009 A1 (sf) Placed Under Review for Possible Downgrade -- EUR9.4M C Certificate, Downgraded to Ba1 (sf); previously on Nov 30, 2009 Baa3 (sf) Placed Under Review for Possible Downgrade -- EUR9.9M D Certificate, Downgraded to C (sf); previously on Nov 30, 2009 Ca (sf) Placed Under Review for Possible Downgrade Issuer: VALENCIA HIPOTECARIO 3 Fondo de Titulizacion de Activos -- EUR780.7M A2 Certificate, Downgraded to Aa1 (sf); previously on Nov 30, 2009 Aaa (sf) Placed Under Review for Possible Downgrade -- EUR20.8M B Certificate, Downgraded to Baa1 (sf); previously on Nov 30, 2009 A2 (sf) Placed Under Review for Possible Downgrade -- EUR9.1M C Certificate, Downgraded to Ba3 (sf); previously on Nov 30, 2009 Baa3 (sf) Placed Under Review for Possible Downgrade -- EUR10.4M D Certificate, Downgraded to C (sf); previously on Nov 30, 2009 Ca (sf) Placed Under Review for Possible Downgrade Issuer: VALENCIA HIPOTECARIO 4 FONDO DE TITULIZACION DE ACTIVOS -- EUR883.4M A Certificate, Downgraded to A3 (sf); previously on Nov 30, 2009 Aaa (sf) Placed Under Review for Possible Downgrade -- EUR42.8M B Certificate, Downgraded to B3 (sf); previously on Nov 30, 2009 Aa3 (sf) Placed Under Review for Possible Downgrade -- EUR23.8M C Certificate, Downgraded to C (sf); previously on Nov 30, 2009 Baa3 (sf) Placed Under Review for Possible Downgrade 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. ============= U K R A I N E ============= RODOVID BANK: Central Bank Extends Administration for Sixth Time ---------------------------------------------------------------- Daryna Krasnolutska at Bloomberg News reports that Ukraine's central bank said it extended administration of PAT Rodovid Bank for the sixth time since 2009 because the lender's business needs to meet the requirements of Ukrainian banking laws. According to Bloomberg, the Kiev-based Natsionalnyi Bank Ukrainy on Monday said in an e-mailed statement that the administration is extended from March 15 through Sept. 15 at the latest. Yuriy Raytburg will remain as an administrator in Rodovid, Bloomberg says, citing the statement. Rodovid Bank is based in Kiev. The net assets of the bank were estimated at UAH16,952.2 million as of Jan. 1, 2010, the credits and debts of clients were valued at UAH5,355.5 million, and the equity of shareholders was estimated at UAH4,336.4 million, according to Ukrainian News Agency. SSB NO 1: Fitch Assigns 'B' Long-Term Rating on US$500-Mil. Notes ----------------------------------------------------------------- Fitch Ratings has assigned SSB No.1 PLC's US$500 million 8.25% issue of limited recourse notes a final Long-term rating of 'B' and a Recovery Rating of 'RR4'. The notes will have a maturity of five years. The notes are being used solely for financing a US dollar- denominated loan to Ukraine-based JSC State Savings Bank of Ukraine (Oschadbank, Long-term foreign and local currency Issuer Default Ratings 'B'/Stable). The assignment of the final rating follows the completion of the issuance and receipt of documents conforming to the information previously received (see "Fitch Assigns Oschadbank's Upcoming Eurobond Expected 'B'/'RR4' Ratings', dated Feb. 14, 2011, which is available at www.fitchratings.com). The loan agreement contains a set of covenants, including ones which limit disposals and mergers and stipulate that transactions with affiliates should be conducted on an arm's-length basis. Oschadbank and its banking subsidiaries also commit to comply with any capital adequacy ratio requirements set by the relevant banking authority (minimum capital adequacy ratio is currently 10% for Ukraine). According to the terms of the loan agreement, the bank may be restricted from making certain payments and distributions under some circumstances; a cross-default is triggered if overdue indebtedness of Oschadbank or any of its subsidiaries exceeds US$10 million. Oschadbank shall redeem the notes if Ukraine, directly or indirectly, ceases to own, at least 51% of the Capital Stock of Oschadbank and if such an event results in a downgrade of Oschadbank's ratings. =========================== U N I T E D K I N G D O M =========================== BANK OF SCOTLAND: S&P Corrects Rating on GBP57.8-Mil. Notes ----------------------------------------------------------- Standard & Poor's Ratings Services corrected an error relating to its rating on a GBP57.8 million junior subordinated note issued by Bank of Scotland PLC (A+/Stable/A-1). Due to an administrative error, S&P erroneously raised the rating on this issue to 'CC' from 'C' when S&P affirmed the ratings on Bank of Scotland and its ultimate parent, Lloyds Banking Group PLC (A/Stable/A-1), on March 9, 2011. S&P has now corrected this error. Ratings List Bank of Scotland PLC GBP57.8 mil 7.375% jr sub callable perp hybrid ser BOS 006 Downgraded To From -- ---- C CC BRADFORD & BINGLEY: Investors Not Eligible for Compensation ----------------------------------------------------------- Edward Evans at Bloomberg News reports that Bradford & Bingley Plc investors won't be eligible for compensation following the British government's decision to nationalize the mortgage lender in 2008. According to Bloomberg, government-appointed auditor Peter Clokey, a partner at PricewaterhouseCooopers LLP, said in a statement on Monday that he upheld his July 5 decision in which he said shareholders weren't owed anything by the Treasury because money markets had shut out Bradford & Bingley. "The liquidity position of Bradford & Bingley would have prevented it from continuing as a going concern," Bloomberg quotes Mr. Clokey as saying. "If the Treasury had not used its powers, it would have applied to court for an administration order." About one million individuals invested in the bank, Bloomberg says, citing the Bradford & Bingley Shareholders Action Group. About Bradford & Bingley Headquartered in Bingley, United Kingdom, Bradford & Bingley plc provided specialist mortgages and savings products. It operated 197 branches and 141 agencies spread across the UK. Its market share of net new mortgage lending at the end of the 2007 was 7.7%. * * * As reported by the Troubled Company Reporter-Europe on Nov. 20, 2010, Moody's Investors Service upgraded one tranche of Bradford & Bingley's Tier 1 securities to Ca from C. All other outstanding ratings of B&B were affirmed. ELYSIUM HEALTH: Goes Into Administration, 35 Jobs in Limbo ---------------------------------------------------------- Express & Star reports that Elysium Health and Fitness Club has shut down without warning after going into administration. The report relates that around 35 staff employed by the club does not know if they will be paid wages owed to them. The venue has been bought by Rectory Care Limited, which plans to turn the site into a retirement village, according to Express & Star. The report relates that the club was put up for sale by owners Oldbrook Developments Limited in February last year for more than GBP1 million. A letter from administrators Grant Thornton UK LLP on the doors of the Rectory Road site said the directors had recently invited final offers because of a lack of interest, Express & Star says. The report says that administrator Jeremy Birch said his company took control of the venue on Friday and that club members were entitled to make a claim for any fees. "I should mention it is expected there will be no funds available from the company to make a distribution to unsecured creditors. Given the planned change in use and the fact that the business had recently been loss making, it has not been possible to keep the business operating in administration and the club has therefore been closed," Express & Star quotes Mr. Birch as saying. Elysium Health and Fitness Club and Oldbrook Developments Ltd have not responded to calls from the Express & Star. ETIC SOLUTIONS: FSA Appoints Provisional Receivers -------------------------------------------------- BBC News reports that the High Court in Belfast moved to protect creditors of the company run by the fugitive businessman Francois de Dietrich. According to BBC, the Financial Services Authority was granted an order which allowed them to appoint provisional receivers to ETIC Solutions. The order also prevents the company from making preferential creditor payments, BBC notes. BBC relates that the FSA said Mr. de Dietrich was believed to be behind an illegal investment scheme. Several people are seeking judgments against ETIC which operated on both sides of the border, BBC discloses. BBC says an application to have ETIC Solutions wound up is due to be heard next month and will not be affected by the appointment of provisional receivers. ETIC Solutions was based in Donegal, Northern Ireland. KYNIXA: Corpore Saves Insurers Estimated GBP1 Million ----------------------------------------------------- Amy Ellis at PostOnline reports that Corpore has estimated it saved insurers just under GBP1 million by absorbing over 450 rehabilitation cases after former provider Kynixa went into administration. The report relates that Corpore transferred the management of Kynixa's rehabilitation cases when it went into administration in June 2010. The firm ensured continuity of service for all injured clients, and seven months later continues to deliver rehabilitation support to those with complex injuries, according to PostOnline. PostOnline notes that the administrator chose Corpore to take on Kynixa's casework to limit the disruption to the injured clients undergoing rehabilitation. The report relates that Corpore contacted all the injured clients' solicitors and insurers and immediately took over management responsibilities for each case. Corpore also transferred 15 case managers from Kynixa's operational team, enabling the injured clients to benefit from established relationships with their case manager, PostOnline adds. LUDGATE FUNDING: Fitch Cuts Rating on Class E Notes to 'CCCsf' -------------------------------------------------------------- Fitch Ratings has affirmed 22 tranches, downgraded four tranches and upgraded one tranche of Ludgate Funding Plc Series, a set of UK non-conforming transactions. The affirmations reflect the generally stable performance of the transactions as borrowers continue to benefit from the prevailing low interest rate environment. This is also reflected in the declining trend of the volumes of loans in arrears by more than three months over 2010. As of the last reporting date in January 2011 for Ludgate 2006 and November 2010 for Ludgate 2007 and 2008, the volumes of loans in arrears by more than three months remained lower than those of other Fitch-rated UK non-conforming transactions, at 4.7% (Ludgate 2006), 4.7% (Ludgate 2007) and 10.5% (Ludgate 2008) of their respective outstanding collateral balance. Repossession activities and associated period losses have also remained low compared to H209. As a result, Ludgate 2006's issuer has been able to generate sufficient revenue to enable it to reduce the outstanding principal deficiency ledger associated with the class E notes to GBP195,435 in March 2011, from GBP1.7 million in September 2009. Similarly, the stable performance of Ludgate 2007's underlying assets has led to the replenishment of its reserve fund, which has been fully funded as of December 2010. The reduction in period losses has led to an increase in the net excess spread generated by Ludgate 2007. As a result, Fitch expects the class S notes to be fully redeemed in the next payment period, which is reflected in their upgrade. In contrast to Ludgate 2006 and 2007, the issuer of Ludgate 2008 continues to report period losses in excess of the gross excess spread it is able to generate each payment date. Although period losses in this transaction have declined compared to levels seen in H209, the transaction continues to draw on its reserve fund in limited amounts. In addition, the volume of loans in arrears by more than three months remains high in comparison to the two more seasoned transactions in the series, and Fitch expects further losses from repossessed properties to remain at levels seen to date. The lack of refinancing opportunities in the market is reflected in the low prepayment rates reported since transaction close. As a result, the pool has not significantly de-leveraged and the credit support available to the class B-E notes was insufficient to withstand their respective stress scenarios, which is why the ratings on these notes have been downgraded. The loans in the underlying pools of all three Ludgate deals are linked to the Bank of England base rate. The more recent transactions, Ludgate 2007 and 2008, have hedged the mismatch between the BBR received on the loans and LIBOR paid on the notes. The absence of a basis hedge in Ludgate 2006 was one of the contributing factors to the lack of excess spread towards end- 2007. With the tightening of the BBR-Libor spread, the exposure to basis risk, presently remains minimal. Fitch continues to have concerns about the possible widening of the spread and for this reason affirmed the ratings of the class D, E and S notes at their current ratings. Furthermore, a rise in the BBR, which Fitch expects to occur by end- 2011, creates concern about the future levels of arrears and repossessions in all three transactions. While current period repossessions remained low during 2010, the high volume of loans in late stage arrears may drive these values upwards in subsequent periods. For this reason, the Outlooks remain Negative for classes Cb, Da and Db of Ludgate 2007. Furthermore, Fitch believes that this creates additional concerns for Ludgate 2008 where the underlying assets have performed poorly relative to Ludgate 2006 and 2007. The concerns about the availability of sufficient funds to cover such associated losses in the future has thus contributed towards the downgrade of Ludgate 2008's class Bb, Cb, D and E notes. All three transaction structures include pro-rata amortization triggers, which are currently being breached and consequently note amortization is expected to remain sequential over the upcoming periods. This will continue to provide additional credit support for the rated notes, particularly in Ludgate 2006, which is why the Outlooks on the class B and C notes were revised to Stable. The rating actions are: Ludgate Funding Plc Series 2006 FF1: -- Class A2a (ISIN XS0274267862): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-1' -- Class A2b (ISIN XS0274271203): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-1' -- Class Ba (ISIN XS0274268241): affirmed at 'AAsf'; Outlook revised to Stable from Negative; Loss Severity Rating 'LS-3' -- Class Bb (ISIN XS0274271898): affirmed at 'AAsf'; Outlook revised to Stable from Negative; Loss Severity Rating 'LS-3' -- Class C (ISIN XS0274272359): affirmed at 'BBsf'; Outlook revised to Stable from Negative; Loss Severity Rating revised to 'LS-3' from 'LS-4' -- Class D (ISIN XS0274272862): affirmed at 'CCCsf'; Recovery Rating revised to 'RR3' from 'RR4' -- Class E (ISIN XS0274269645): affirmed at 'CCsf'; Recovery Rating revised to 'RR4' from 'RR5' -- Class S (ISIN XS0274270221): affirmed at 'Csf'; Recovery Rating revised to 'RR5' from 'RR6' Ludgate Funding Plc Series 2007 FF1: -- Class A1a (ISIN XS0304500431): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-1' -- Class A1b (ISIN XS0304502130): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-1' -- Class A1c (ISIN XS0307157486): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-1' -- Class A2a (ISIN XS0304503534): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-1' -- Class A2b (ISIN XS0304504003): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-1' -- Class Ma (ISIN XS0304504698): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-3' -- Class Mb (ISIN XS0304505232): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-3' -- Class Bb (ISIN XS0304508681): affirmed at 'AAsf'; Outlook Stable; Loss Severity Rating revised to 'LS-3' from 'LS-4' -- Class Cb (ISIN XS0304509739): affirmed at 'Asf'; Outlook Negative; Loss Severity Rating 'LS-4' -- Class Da (ISIN XS0304510158): affirmed at 'B+sf'; Outlook Negative; Loss Severity Rating 'LS-4' -- Class Db (ISIN XS0304512105): affirmed at 'B+sf'; Outlook Negative; Loss Severity Rating 'LS-4' -- Class E (ISIN XS0304515546): affirmed at 'CCCsf'; Recovery Rating revised to 'RR4' from 'RR5' -- Class S (ISIN XS0304519704): upgraded to 'Bsf' from 'CCsf'; Outlook Stable Ludgate Funding Plc Series 2008-W1 -- Class A1 (ISIN XS0353588386): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating of 'LS-1' -- Class A2 (ISIN XS0353589608): affirmed at 'AAAsf'; Outlook Stable; Loss Severity Rating 'LS-3' -- Class Bb (ISIN XS0353591505): downgraded to 'Asf' from 'AAsf'; Outlook Stable; Loss Severity Rating 'LS-3' -- Class Cb (ISIN XS0353594434): downgraded to 'BBsf' from 'BBBsf'; Outlook revised to Stable from Negative; Loss Severity Rating 'LS-4' -- Class D (ISIN XS0353595597): downgraded to 'Bsf' from 'BBsf'; Outlook Negative; Loss Severity Rating 'LS-5' -- Class E (ISIN XS0353600348): downgraded to 'CCCsf' from 'Bsf'; assigned a Recovery rating of 'RR4' MANSARD MORTGAGES: S&P Affirms 'B-' Rating on Class B2a Notes ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on all classes of notes in Mansard Mortgages 2007-2 PLC. The actions follow an improvement in the credit quality of the underlying collateral. Total delinquencies, 90+ day delinquencies, and repossessions in the transaction have been falling, according to the most recently reported performance data. 90+ day delinquencies have fallen to 9.50% as of December 2010 from 11.41% in March 2010, while repossessions have fallen to 0.60% from 1.21% over the same period. S&P believes these falls are due to the current low interest rate environment. Cumulative principal losses are 2.63% and remain higher than those of its nonconforming RMBS index; however, S&P believes credit enhancement levels are sufficient for us to affirm its ratings on all classes of notes. S&P did not place the ratings in this transaction on CreditWatch negative as a result of its updated counterparty criteria in January 2011. The lowest-rated counterparty, as per the documentation available to us, is rated 'A+' (JPMorgan Chase Co., the hedging and liquidity facility provider). S&P has now reviewed the transaction documentation and consider it, except for the swap documentation, to be in line with its updated counterparty criteria. The counterparty's issuer credit rating plus one notch is sufficient to support the class A1a and A2a notes and S&P is able to affirm these notes in line with its criteria. However, if the rating on the lowest-rated counterparty changes in the future, this may have an adverse impact on the senior notes, all else being equal. S&P will continue to monitor the performance of this transaction. In particular, S&P will monitor interest rate rises that may affect borrower affordability. Additionally, S&P will monitor the ratings on the counterparties, as any movements in these ratings would require a review of the ratings in line with its counterparty criteria. Ratings List Mansard Mortgages 2007-2 PLC GBP550 Million Mortgage-Backed Floating-Rate Notes Ratings Affirmed Class Rating ----- ------ A1a AA- (sf) A2a AA- (sf) M1a A- (sf) M2a BBB- (sf) B1a BB- (sf) B2a B- (sf) PEVEREL GROUP: Four Units Goes Into Administration -------------------------------------------------- James Thompson at The Independent reports that Vincent Tchenguiz, the property tycoon, saw the holding companies behind his largest property business collapse into administration. The report relates that Zolfo Cooper, the restructuring firm, has been hired as administrator for four companies -- Peverel, Peverel Group, Aztec Opco Developments and Aztec Acquisitions -- within the Peverel Group, which is the UK's largest property management company. The Independent says the administration is not thought to be connected to the arrest of Mr. Tchenguiz and his brother Robert last week by the Serious Fraud Office, which is investigating the collapse of the Icelandic bank Kaupthing in 2008. The Tchenguiz brothers were two of the City most high-profile entrepreneurs before the credit crunch hit their business interests, which ranged from owning firms in their own right to stakes in companies across the retail, pub and property worlds, The Independent relates. The Independent discloses that their spending spree was often funded with cheap loans provided by failed Icelandic banks. The report relates that the board of Peverel Group, including Vincent Tchenguiz, appointed Zolfo Cooper after it was unable to repay debts of GBP125 million. The report notes that the directors and Peverel's main lender, Bank of America, had failed to reach an agreement after months of negotiations. Peverel Group oversees the management of 190,000 residential units in the market for retirement and non-retirement property, The Independent says. However, the report notes, Zolfo Cooper stressed that the administration would have no impact on the operating companies of Peverel Group, which means that its primarily elderly tenants will not notice any change. Furthermore, The Independent says, it is understood that the Tchenguiz brothers have kept the freeholds on all 283,966 residential properties they own. There are no plans to make any of Peverel's 4,000 employees redundant, the report adds. PLYMOUTH ARGYLE: Administrators Receives Numerous Offers -------------------------------------------------------- SkySports reports that Plymouth Argyle Football Club administrators revealed they have received 'a number of offers' for the club. A buyer for the cub is set to be decided by Thursday and potential bidders had until noon on Monday to make their offer, according to SkySports. "The provision of funding by a purchaser is a key part of the purchase of Plymouth Argyle, I am grateful for the offers I have received but I now urgently need to secure funding," SkySports quotes administrator Brendan Guilfoyle as saying. Meanwhile, the report notes, the company released the following statement: "The joint administrators of Plymouth Argyle Football Club, Brendan Guilfoyle and Christopher White and John Russell, have announced they have received a number of offers to acquire the club. They are now pursuing a funding facility linked with an exclusivity agreement." SkySports discloses that Affinity Sports Finance, a group connected to former Pilgrims directors Sir Roy Gardner and Keith Todd, are thought to be leading the race. Yet Guilfoyle's preferred bid is understood to come from James Brent and Peter Ridsdale,who joined the club as football consultant in December, the report notes. Plymouth Argyle Football Club, commonly known as Argyle, or by their nickname, The Pilgrims, is an English professional football club based in Central Park, Plymouth. It plays in Football League One, the third division of the English football league system. TAYLORS THE BAKERS: Saved From Administration for The Second Time ----------------------------------------------------------------- British Baker Magazine reports that Taylors the Bakers has been saved from administration for the second time in less than a year, after administrators RSM Tenon sold the firm back to the bakery's existing management in a pre-pack deal. The firm went into administration on Feb. 8, 2011, with the new company name, Taylors the Bakers 2011 Limited, registered at Companies House on Jan. 20, 2011, according to British Baker Magazine. The report relates that an unnamed spokesperson for RSM Tenon said the completion of the deal has secured the future of the business, along with 120 jobs. In March 2010, the bakery known then as Sunfresh Bakers Ltd went into administration, with the assets and goodwill bought by its directors Stephen and Mark Taylor, the report adds. Headquartered Lancashire, Taylors the Bakers is a wholesale firm that makes oven-bottom muffins for several major multiples as well as schools, hospitals and sandwich shops. =============== X X X X X X X X =============== * EUROPE: Orderly Restructuring Beneficial in "Extreme Cases" ------------------------------------------------------------- Jana Randow at Bloomberg News reports that European Central Bank Governing Council member Axel Weber said an "orderly restructuring mechanism" might be helpful in "extreme" cases if euro-region countries face insolvency. "If another euro-region country risks facing insolvency, a crisis- response mechanism should be created that doesn't diminish the responsibility of the member states and actors in financial markets," Bloomberg quotes Mr. Weber as saying in Berlin on Monday. "Here, an orderly restructuring mechanism, which one could fall back on in an extreme case of excessive indebtedness of a euro-region country, could help." ********* 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 * * *