/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/110921.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, September 21, 2011, Vol. 12, No. 187 Headlines A U S T R I A A-TEC INDUSTRIES: Penta Sues Over Contor Selection as Investor B U L G A R I A PETROL AD: Fitch Cuts Long-Term Issuer Default Rating to 'C' D E N M A R K * DENMARK: Banks Face Insolvency Threat as Rescue Bill Stalls F R A N C E SPOTLESS HOLDING: S&P Affirms 'B' Corporate Credit Rating G E R M A N Y TELDAFAX HOLDING: On Brink of Bankruptcy in 2009, Audit Shows G R E E C E EUROBANK EFG: Moody's Corrects 2 Covered Bonds Ratings to 'Ba3' EUROBANK EFG: Moody's Corrects EUR700-Mil. Bonds Rating to 'Ba3' * GREECE: Should Begin Orderly Default, Nouriel Roubini Says * GREECE: Had Productive Bailout Talks with Official Creditors I C E L A N D KAUPTHING BANK: To Settle US$2-Bil. Tchenguiz Claim Over Collapse I R E L A N D OPERA FINANCE: S&P Lowers Rating on Class D Notes to 'B-' TAURUS CMBS: S&P Lowers Rating on Class D Notes to 'B (sf)' WESTON AERODROME: Financial Situation Stabilizing I T A L Y FIAT SPA: DBRS Downgrades Senior Unsecured Debt Rating to 'BB' K A Z A K H S T A N KAZTRANSGAS: Fitch Upgrades LT Issuer Default Ratings to 'BB+' N E T H E R L A N D S ELM BV: Moody's Cuts Rating on EUR84-Mil. Series 41 Notes to 'B1' ELM BV: Moody's Lowers Rating on EUR50-Mil. Notes to 'Ba2' ELM BV: Moody's Lowers Rating on EUR22.5-Mil. Notes to 'Ba1 (sf)' S P A I N SANTANDER EMPRESAS: Fitch Affirms 'Csf' Rating on Class F Notes S W E D E N SAAB AUTOMOBILE: Deutsche Bank Agrees to EUR70-Mil. Bridge Loan U N I T E D K I N G D O M AUSSIE BASILDON: Closes Outback Steakhouse in Basildon CUBE HOTELS: Skylane Hotel Buys Hotel Unit in Evesham GALA GROUP: Moody's Assigns 'B2' Rating to GBP350-Mil. Notes HERDMAN'S MILL: Owes Creditors More Than GBP10 Million LEHMAN BROTHERS: Has Agreement in Principle With Lehman Europe LLANGOLLEN HOTELS: Some Creditors Won't Get Money Back PEDLEY FURNITURE: MJM Marine Mulls Firm Acquisition RANGERS FOOTBALL: Owner Says Club Not Broke, Judge Freeze Assets X X X X X X X X * UBS Trader Charged in London With Fraud ********* ============= A U S T R I A ============= A-TEC INDUSTRIES: Penta Sues Over Contor Selection as Investor -------------------------------------------------------------- Zoe Schneeweiss at Bloomberg News reports that Penta Investments Ltd. said it has filed a lawsuit at the Vienna Commercial Court against A-Tec Industries AG via a subsidiary. According to Bloomberg, a statement on Tuesday noted that "Penta is convinced that selecting Contor Industries GmbH as an investor for A-Tec is seriously breaching the rules set out in the restructuring plan of A-Tec as approved by the Vienna Commercial Court and thereupon by A-Tec itself." "A number of violations prove that the search for and selection of an investor for A-Tec was not conducted in a fair and proper manner," Bloomberg quotes Penta as saying in the statement. "Penta thus expects a verdict which will result in refraining A-TEC from breaching the binding rules and procedures of the restructuring plan." On Oct. 22, 2010, the Troubled Company Reporter-Europe, citing Bloomberg News, related that A-Tec sought court clearance to reorganize debt after losing access to its line of credit because of an Australian power-station project's financial difficulties. A-Tec said in an Oct. 20 statement that it had filed for self- administered reorganization proceedings at the Vienna Commercial Court and appointed trustees for bondholders, Bloomberg disclosed. The company has a EUR798 million (US$1.11 billion) revolving credit facility and EUR302 million in outstanding bonds, according to Bloomberg data. A-TEC Industries AG engages in plant construction, drive technology, machine tools, and minerals and metals businesses in Europe and internationally. The company is based in Vienna, Austria. =============== B U L G A R I A =============== PETROL AD: Fitch Cuts Long-Term Issuer Default Rating to 'C' ------------------------------------------------------------ Fitch Ratings has downgraded Bulgaria-based fuel distributor Petrol AD's Long-term Issuer Default Rating (IDR) to 'C' from 'CC'. Fitch has also downgraded the senior unsecured rating of Petrol AD's EUR98.8 million notes due on October 26, 2011, to 'C' from 'CC'. The Recovery Rating on the notes is 'RR4'. The downgrade reflects the company's recently announced proposal for bondholders to extend the outstanding notes' maturity date by three months to January 26, 2012. Petrol AD also proposed to bondholders to delay the interest payment due on October 26, 2011, by three months to January 26, 2012, together with further accrued interest to that date. Petrol AD's proposal will face a vote at the bondholders meeting, scheduled for October 5, 2011. If the bondholders meeting passes the resolution to extend the maturity date by three months, Fitch would consider this as a distressed debt exchange. This is because under its criteria, the bond's extended maturity would be a material reduction in terms vis-a-vis its original contractual terms and the maturity extension would be conducted in order to avoid a traditional payment default. Fitch understands that as at the end of June 2011 Petrol AD owned more than 25% of the bond, thus at the first bondholders meeting where a 75% quorum is required or at the second re-convened bondholders meeting where a 25% quorum is required to pass the resolution, Petrol AD's ownership percentage represents significant voting power to enable approval of the debt maturity extension proposal. Together with the proposal to extend the bond maturity, the company has also announced its intention to acquire up to EUR10m of bonds at 85% of the nominal value. This would increase the group's voting percentage. Conversely, if the bondholders meeting does not agree to extend the maturity date, in Fitch's view, the risk of default increases provided that by that time the company does not unexpectedly raise funding for the notes repayment at the original maturity date. Fitch is concerned that the company's original plan to refinance the maturing bond with bank funding may be delayed. At end June 2011, the Petrol AD group had weak liquidity. It had cash of BGN65.7 million against short-term debt of BGN284.7 million, including the bonds due on October 26. In Q1 of 2011, the Petrol AD group purchased bonds of a nominal value of EUR26.6 million, reducing the amount of bonds it had due to EUR72.2 million. Petrol AD is a leading fuel distributor in Bulgaria. It operates a wholesale and retail distribution business. ============= D E N M A R K ============= * DENMARK: Banks Face Insolvency Threat as Rescue Bill Stalls ------------------------------------------------------------- Frances Schwartzkopff and Peter Levring at Bloomberg News report that Danish lawmaker efforts to spur bank consolidation and help lenders avoid Europe's toughest resolution laws may be stalling, raising the risk of more insolvencies and senior creditor losses in the Nordic country. According to Bloomberg, the local lenders group, the country's financial regulator and bankers who advise on takeovers said that this month's bank rescue bill, Denmark's fourth since 2008, may not trigger the wave of consolidation lawmakers had targeted as local bank managers resist takeovers and potential buyers seek more inducements to merge as they view balance sheets with mistrust, the local lenders group. Lawmakers in Copenhagen this month passed a bill that will allow banks to tap funds from the Depositor Guarantee Scheme to finance takeovers of peers facing insolvency, Bloomberg recounts. Such mergers would also allow the acquiring bank to extend its state- backed guarantee beyond 2013. Bloomberg notes that Claus E. Petersen, the deputy chairman of the Association of Local Banks, said the measures aren't enough. "They tried hard to change some of the conditions that went wrong" in the resolution package of October, which introduced the bail-in rules, Mr. Petersen, as cited by Bloomberg, said in an interview. "But at the same time, there are some tools missing that would help consolidation along." Denmark's banks are struggling to emerge from the country's financial crisis as Europe's lenders face a deteriorating funding environment amid concern the region's debt crisis is getting worse, Bloomberg relates. That's threatening to exacerbate Denmark's chances of recovery as investors shun all but the safest markets, Bloomberg states. =========== F R A N C E =========== SPOTLESS HOLDING: S&P Affirms 'B' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on France-based household goods manufacturer Spotless Holding SAS. The rating was then withdrawn at the issuer's request. At the time of the withdrawal, the outlook was stable. "At the same time, we withdrew our 'B' long-term issue rating on Spotless' proposed senior secured bond at the issuer's request," S&P stated. "At the time of the withdrawal, the rating on Spotless reflected our opinion of its highly leveraged financial risk profile following a leveraged buyout by funds advised by private equity group BC Partners in April 2010. The rating also reflected our assessment of Spotless' business risk profile as weak, based on the group's narrow business and geographic focus, degree of customer concentration risk, and its participation in the mature and highly competitive European laundry care segment," S&P stated. "For a more detailed rationale, see our research updated titled 'Spotless Holding Assigned 'B' L-T Rating; Outlook Stable; Proposed Secured Bond Rated 'B' (Recovery Rating '4'),' published June 6, 2011, on Ratings Direct on the Global Credit Portal," S&P said. ============= G E R M A N Y ============= TELDAFAX HOLDING: On Brink of Bankruptcy in 2009, Audit Shows ------------------------------------------------------------- According to Bloomberg News' Niklas Magnusson, Sueddeutsche Zeitung reported that German authorities knew TelDaFax Holding AG was close to bankruptcy in September 2009, almost two years before it filed for bankruptcy and cost its customers about EUR500 million (US$680 million). Sueddeutsche Zeitung cited an audit by German authorities as its source. TelDaFax Holding AG is Germany's biggest independent electricity retailer. =========== G R E E C E =========== EUROBANK EFG: Moody's Corrects 2 Covered Bonds Ratings to 'Ba3' --------------------------------------------------------------- Moody's Investors Service is correcting the ratings of two covered bonds issued by EFG Eurobank Ergasias S.A. under the EUR5 billion Global Covered Bond Programme to Ba3 from WR. Affected instruments are: -- EUR750,000,000 Series 2 Floating Rate Covered Bonds (ISIN: XS0511780099) -- EUR500,000,000 Series 3 Floating Rate Covered Bonds (ISIN: XS0515809589) The ratings for these two covered bonds were previously withdrawn on June 20, 2011, due to an internal administrative error. EUROBANK EFG: Moody's Corrects EUR700-Mil. Bonds Rating to 'Ba3' ---------------------------------------------------------------- Moody's Investors Service is correcting the rating of EUR700,000,000 Series 3 Floating Rate Covered Bonds (ISIN: XS0515809662) issued by EFG Eurobank Ergasias S.A. (Eurobank EFG) under the EUR3 billion Global Covered Bond Programme to Ba3 under review for possible downgrade from WR. The rating for this covered bond was previously withdrawn on July 20, 2011, due to an internal administrative error. On July 27, 2011, covered bonds issued by Eurobank EFG under its second covered bond program (EFG CB II) were placed on review for downgrade. * GREECE: Should Begin Orderly Default, Nouriel Roubini Says ------------------------------------------------------------ According to Bloomberg News' Colm Heatley, Nouriel Roubini, co-founder and chairman of Roubini Global Economics LLC, wrote in the Financial Times that Greece should begin an orderly default and leave the Eurozone, in order to break a "vicious cycle of insolvency, low competitiveness and ever deepening depression." "A return to a national currency and a sharp depreciation would quickly restore competitiveness and growth, as it did in Argentina," Mr. Roubini wrote. Greece "cannot return to growth unless competitiveness is rapidly restored. Without a return to growth, its debts will stay unsustainable." The current deal on offer to Greece from Europe is a "rip-off," Mr. Roubini wrote. * GREECE: Had Productive Bailout Talks with Official Creditors -------------------------------------------------------------- Alkman Granitsas and Stelios Bouras at The Wall Street Journal report that Greece said it had "a productive and substantive discussion" with its official creditors on Monday in talks aimed at releasing a new slice of bailout aid, and a Greek finance ministry official said an agreement was close. A Greek official said an announcement was likely today, the WSJ notes. Greece's government is scrambling to meet conditions for a fresh infusion of official aid, and worries about a looming default have undermined sentiment in markets across the globe, the WSJ discloses. Greece's official lenders are seeking hard evidence that Athens intends to take action to close a budget deficit now set to exceed its targets, the WSJ says. They are threatening not to release EUR8 billion (US$11 billion) in bailout funds, without which Greece will likely run out of money next month, the WSJ states. "We will publish this week decisions on the restructuring of public bodies," the WSJ quotes Mr. Venizelos as saying in a business conference Monday. "In light of the new budget, it is clear that our emphasis will be on the spending side." Greece is due to submit its 2012 draft budget to parliament on the first Monday in October, as foreseen by the Greek constitution, the WSJ discloses. The plan will be voted on by the end of October, the WSJ notes. ============= I C E L A N D ============= KAUPTHING BANK: To Settle US$2-Bil. Tchenguiz Claim Over Collapse ----------------------------------------------------------------- Kit Chellel at Bloomberg News reports that Kaupthing Bank hf agreed to settle a GBP1.5 billion (US$2.4 billion) claim brought by the Tchenguiz Family Trust over losses caused by the Icelandic bank's collapse. According to Bloomberg, a statement noted that Kaupthing reached an agreement with the trust, Vincent Tchenguiz, and other companies connected to the family, known for its U.K. real estate investments, for an undisclosed sum. Sean Bellew, a spokesman for Tchenguiz declined to comment on the settlement's value because the terms are confidential, Bloomberg states. The family had close ties with Kaupthing and suffered what Vincent Tchenguiz described as "massive losses" when the bank failed in October 2008, Bloomberg recounts. U.K. regulators are investigating loan deals struck between Kaupthing and Vincent Tchenguiz and his brother Robert, Bloomberg says. Vincent Tchenguiz said in the statement that the settlement will help Kaupthing's creditors, Bloomberg notes. Kaupthing, based in Reykjavik, confirmed a settlement had been reached and the Tchenguiz Family Trust had withdrawn its claims in a statement on its Web site, Bloomberg discloses. In a separate claim, a trust controlled by Robert Tchenguiz is suing Kaupthing to recoup losses of GBP330.7 million from a failed loan deal, Bloomberg notes. 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. ============= I R E L A N D ============= OPERA FINANCE: S&P Lowers Rating on Class D Notes to 'B-' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on Opera Finance (CMH) PLC's class A, B, C, and D notes. Opera Finance (CMH) is a secured loan commercial mortgage-backed securities (CMBS) transaction that closed in February 2006 and was arranged by Eurohypo AG (A-/Negative/A-2), which also acts as the servicer. "The rating actions follow our review of the credit quality of the CMH Loan securing the notes," S&P related. The CMH Loan The transaction is backed by a single loan, which is interest- only (non-amortizing, with the full principal due in one payment at maturity) and matures in January 2013. It is split into a senior and junior loan. The senior loan (with a current balance of EUR375 million) is securitized and the junior loan (with a current balance of approximately EUR85 million) sits outside the transaction. The National Asset Management Agency (NAMA) purchased the junior loan in May 2010. The borrower is currently meeting the interest coverage ratio (ICR) covenant of 110%; the senior ICR is currently 1.57x. There is no senior loan-to-value (LTV) ratio covenant; the senior LTV ratio is currently 128.6%. However, there is a whole-loan LTV ratio covenant of 80%, which has been breached. Since this happened, the servicer has been trapping excess cash, which currently amounts to EUR7.2 million. The servicer can use this money to make up any interest shortfalls on the junior loan and can only use it to pay down the senior loan after a senior loan event of default has occurred. Properties Securing the Loan The loan is secured by 16 secondary-quality retail and office properties in Ireland, with a high concentration in Dublin (15 properties, accounting for 92.6% of the external value). The 16th property is in Cork, with Marks & Spencer as the tenant. The properties are let on 94 leases and have a weighted-average occupancy of 98.8%. The weighted-average lease term is 11.6 years until first break, which is long by industry standards, and 13.5 years until lease expiry. Rental income has decreased since closing, due to a number of tenants going into administration and to new leases being agreed at lower rents. Although all of the leases in the portfolio have upward-only rent reviews, existing tenants have also been able to negotiate lower rents in exchange for not exercising their break clause options. This is not unusual in the current economic climate and has had only a marginal impact on income. Six of the 16 properties account for 90% of the total market value of the portfolio. The property with the largest market value is the Stillorgan Shopping Centre, which is approximately four miles southeast of Dublin's city center. The shopping center is 95% occupied and contributes 22% toward the total rental income for the whole portfolio. There are 70 tenants in place, with an overall weighted-average unexpired lease term of 8.05 years. Tenants include a Tesco supermarket, a McDonald's restaurant, and a Dunnes Stores department store. Local competition has increased since 2005, due to the opening of the Dundrum shopping center nearby. However, as the two centers offer contrasting retail facilities, they share relatively few tenants. Rental income at the Stillorgan Shopping Centre has suffered less than may have been expected. (For more information on the portfolio securing the loan, see 'New Issue: Opera Finance (CMH) PLC,' published Feb. 20, 2006.) S&P's Assessment of the Loan S&P noted that it does not expect the loan to default during the loan term because: -- The portfolio generates sufficient income to meet the loan's debt service obligations; -- It has a healthy ICR; and -- Only 5.4% of the income could still fall away during the remaining loan term, even if we assume that all break options are exercised and no leases due to expire before July 2013 are renewed. "However, the senior ICR may come under pressure if the Irish government abolishes upward-only rent reviews (see 'DRAFT LEGISLATION POTENTIALLY IMPACTING PORTFOLIO INCOME')," S&P stated. "Although we think it unlikely that the loan will default during its term, we consider there to be a real risk that it will default at maturity in 2013, given the current LTV ratios and the economic climate in Ireland," S&P stated. The properties securing the loan have been revalued on a number of occasions since closing in December 2005. In February 2011, they were valued at EUR291.52 million, from EUR342.19 million in December 2009 and EUR500.47 million at closing. This has resulted in a market value decline of 42% since closing and has increased the senior LTV ratio to 128.6% from 75.0% at closing. Note Maturity "In view of the current economic conditions in Ireland, we consider that values are unlikely to recover sufficiently to attract a sale price or refinance agreement that would fully repay the secured loan at scheduled maturity. This would leave the servicer with a two-year tail period to work out the loan. In such a short period, the workout options available to the special servicer in a loan default scenario could be restricted. If the issuer is to meet the note obligations in full by note maturity, we envisage scenarios in which the special servicer would have to sell the assets at a discount to current values," S&P stated. "In view of these factors, we consider principal losses on this loan to be likely. This would in turn translate to losses on the class C and D notes, in our view," S&P related. Draft Legislation Potentially Impacting Portfolio Income The provision for upward-only rent reviews in this portfolio has meant that income has been relatively resilient in recent years. The Irish government is currently contemplating draft legislation that would abolish upward-only rent reviews. If it adopts this legislation, rental income for the portfolio may come under pressure. "We consider that this downward pressure on income would likely adversely affect property values. We will monitor the progress of this and, if the Irish government passes this draft legislation, we will assess the potential impact for the transaction," S&P related. Conclusion "The rating actions reflect our view that the notes' credit quality has deteriorated as a result of value declines and refinance risk. We have therefore lowered our ratings on all classes of notes. We also consider that the loan will likely suffer principal losses that could cause losses to the C and D notes and we have reflected this risk in our ratings," S&P stated. Ratings List Opera Finance (CMH) PLC EUR375 Million Commercial Mortgage-Backed Floating-Rate Notes Class Rating To From Ratings Lowered A BBB (sf) A (sf) B BB (sf) BBB (sf) C B (sf) BB (sf) D B- (sf) B (sf) TAURUS CMBS: S&P Lowers Rating on Class D Notes to 'B (sf)' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on Taurus CMBS (Pan-Europe) 2007-1 Ltd.'s class A2, B, C, and D notes. "At the same time, we affirmed our ratings on the other notes," S&P stated. "The rating actions follow our review of the 11 remaining loans in the transaction. In view of some short weighted-average lease terms, relative to remaining loan terms, and our view that investor appetite for secondary assets remains limited as borrowers continue to face difficulties refinancing loans, we have lowered our ratings on the class A2 to D notes," S&P related. "We have affirmed our ratings on the class E and F notes to reflect our view that, although these classes are susceptible to principal losses, we do not expect these to occur in the near term," S&P stated. "Additionally, we have affirmed our rating on the class A1 notes, which we downgraded on July 12, 2011 following implementation of our 2010 counterparty criteria (see 'Ratings List Resolving European Structured Finance Counterparty CreditWatch Placements --- July 12, 2011 Review'). The rating on the class A1 notes reflects our view on the risks that this class could face if the transaction's interest rate and currency swap provider, Merrill Lynch & Co. Inc. (A/Negative/A-1), were to default," S&P noted. Fishman JEC Loan "The Fishman JEC loan (30% of the pool) is secured by 18 office and industrial properties throughout France. The portfolio benefits from approximately 85% of income secured by credit-rated tenants. However, the weighted-average lease term of approximately three years coincides with the period until loan maturity in 2014. We therefore believe that the portfolio could face refinance risks if tenants do not renew their leases. Furthermore, our review of this loan has considered the secondary nature of the assets and an apparent dearth of investor appetite for such assets," S&P stated. "Although we recognize the risk that the borrower might not repay the loan in full when it matures, we do not expect principal losses to occur in the near term. Furthermore, we note that legal final maturity of the notes is in 2020, so the servicer could extend the loan. This would provide the servicer with time to improve the properties and/or re-let them to improve the portfolio's marketability and thereby reduce losses," S&P noted. WPC #1 G&S Loan The WPC #1 G&S loan (1% of the pool) is secured by two industrial/manufacturing properties in P�ttlingen and St Ingbert, Germany. The properties were fully leased to Gortz and Schiele GmbH & Co. Prazisionstertigung KG. Following the tenant's insolvency in 2009, the two properties have not been generating income. The cash manager, Wells Fargo Bank N.A., therefore continues to draw on the liquidity facility to fund interest payments due under the loan. "We note that the special servicer, Capita Asset Services (U.K./Ireland) Ltd., is considering marketing the Puttlingen property for sale," S&P stated. "Considering the location and quality of the properties, we are of the view that they would appeal to a limited group of potential buyers. After accounting for necessary capital expenditures that would be needed on both properties, we believe that this loan is unlikely to be recovered in full and could trigger losses on the notes, although not in the near term. However, we expect any principal losses to be contained in the class E and F notes," S&P noted. Remaining Loans The remaining loans in the transaction are secured by retail, office, and industrial properties in Switzerland, France, and Germany. The portfolio predominantly comprises secondary assets with a weighted-average lease term of approximately four years. Of the remaining loans in the portfolio, 34% by balance is scheduled to mature in the next 12 months. "We believe that borrowers of these loans may experience difficulties refinancing the loans at their due dates," S&P related. General market conditions remain constrained and, in the real estate sector, occupier and investor demand remain stagnant. This in turn continues to affect values. (Statistics for this year to date suggest that borrowers are struggling to refinance their loans. Of the loans maturing between January and July, only one in three repaid in full at their scheduled maturity [see "European CMBS Monthly Bulletin (August 2011): Only One In Three Loans Maturing Between January And July Repay As Those In Continental Europe Show Signs Of Pressure," published Sept. 5, 2011].) "In our view, these factors are likely to affect lenders' willingness to provide refinance. We note, however, that the generous tail period between loan and note maturity (will mitigate refinance risk to some extent because it provides allows the servicer some time to resolve those loans that do not repay at their scheduled maturity," S&P stated. Taurus CMBS (Pan-Europe) 2007-1 is a pan-European conduit transaction that closed in August 2007. The transaction is currently backed by 11 loans, down from 13 at closing. Ratings List Taurus CMBS (Pan-Europe) 2007-1 Ltd. EUR549.95 Million and CHF0.1 Million Commercial Mortgage-Backed Floating-Rate Notes Rating Class To From Ratings Lowered A2 A (sf) A+ (sf) B BBB (sf) A- (sf) C BB- (sf) BBB- (sf) D B (sf) BB- (sf) Ratings Affirmed A1 A+ (sf) E B- (sf) F B- (sf) WESTON AERODROME: Financial Situation Stabilizing ------------------------------------------------- Emmet Oliver at Irish Independent reports that the only airport on the National Asset Management Agency's books, the Weston Aerodrome, once owned by developer Jim Mansfield, has started to stabilize financially with rising traffic and expansion plans as receiver KPMG seeks a buyer. The airport, which hosts pilot training and executive jet facilities, recently appointed a new board and hopes to grow employment from about 120 now to 200 in the medium term, Irish Independent relates. The airport is also seeking to retain planning for pilot education facilities and simulators, Irish Independent notes. NAMA put the airport on its Web site for potential purchasers several weeks ago, garnering international headlines, Irish Independent recounts. The airport is being operated by Premier Aviation on behalf of KPMG, which is in turn working for NAMA, Irish Independent discloses. According to Irish Independent, Premier Aviation told customers in an information update that aviation traffic has greatly increased at the airport since May. In the update, Premier Aviation's John McCallion said the airport was on track to increase the workforce at Weston executive airport to 200 people in the medium to long term, Irish Independent notes. The airport is also planning to offer an executive VIP and crew lounge area in the near future, Irish Independent says. The airport has also had additional queries in relation to private jets taking up hangar space there. Mr. McCallion said the airport was now self-sustaining and the mandate was to make sure it stayed a going concern. ========= I T A L Y ========= FIAT SPA: DBRS Downgrades Senior Unsecured Debt Rating to 'BB' -------------------------------------------------------------- DBRS has downgraded the Senior Unsecured Debt rating of Fiat S.p.A. to BB (high) from BBB (low). The downgrade reflects DBRS's assessment of Fiat's business profile as a stand-alone automotive company, while also incorporating the Company's increasing ownership of Chrysler Group LLC, which now clearly represents a core component of Fiat's business strategy. While Chrysler serves to enhance the Company's product and geographic diversification (albeit still within the automotive sector), DBRS notes that significant integration risks persist, with Fiat potentially exposed to material additional financial obligations through its ownership of Chrysler. The trend on the ratings is Negative, reflecting significant headwinds in Fiat's core European automotive market as well as ongoing challenges associated with several forthcoming product launches across major automotive markets. Concurrent with the downgrade and pursuant to DBRS's Rating Methodology for Leveraged Finance, DBRS has assigned an Issuer Rating of BB (high) to the Company, with associated recovery and instrument ratings of Fiat's senior unsecured debt being assessed at RR4 and BB (high), respectively. (The BB (high) senior unsecured debt rating of Fiat Finance Canada Ltd. reflects the unconditional guarantee of the Company). With these rating actions, Fiat is removed from Under Review with Negative Implications, where it was placed on July 22, 2010. The 2010 results of Fiat's continuing operations following the Demerger moderately improved year-over-year, although operating margins remained weak relative to the automotive industry average. The lackluster results reflect challenging conditions in Fiat's core European market, where (notwithstanding significant variances across nations) aggregate industry volumes declined by approximately 5%. This was exacerbated by share losses, mostly attributable to materially lower demand for compressed natural gas (CNG) vehicles, where the Company is particularly strong. Partly offsetting the above was ongoing solid performance in the Brazilian market, where Fiat retained its leadership position, as well as a sharp increase in light commercial vehicle (LCV) volumes. In 2011, the Company has been progressively increasing its ownership position in Chrysler from an initial level of 20% to the current stake of 53.5% (on a fully diluted basis), with this likely increasing to 58.5% by year-end. DBRS notes that Chrysler has become an integral component of the Company's business strategy. Chrysler not only represents a foray into the important North American market (from which Fiat has long been absent), Fiat is also depending on Chrysler-derived products to complement the product portfolios of the Lancia and Fiat brands. DBRS recognizes that, despite the consolidation of Chrysler, Fiat and Chrysler currently manage funding matters on an independent basis, with the Company offering no guarantee or formal support of Chrysler's financial obligations; (DBRS notes that per Fiat's credit documentation Chrysler is ring-fenced, with the latter's debt maturity schedule also being very favorable). However, given how strategically important Chrysler has become to Fiat, DBRS considers it likely that the Company would provide some level of financial assistance to Chrysler if needed. DBRS notes that Fiat's current financial metrics excluding Chrysler are consistent with the BB rating range, with the potential of further funding assistance toward Chrysler firmly entrenching the newly assigned ratings. The negative trend of the ratings highlights the significant challenges facing both Fiat and Chrysler. Regarding Fiat, industry volumes in Europe and the Company's native Italy are at the lowest levels since the late 1990s, with similar sales numbers expected to persist to the end of the year. The Company is hoping to reverse its market share loss through recent and forthcoming launches of products, some of which are derived from Chrysler. With respect to Chrysler, it revised numerous models in late 2010 and has performed reasonably in the U.S. market through the first six months of this year amid a moderate recovery of the industry. However, Chrysler is currently in negotiations with the United Auto Workers (UAW) concerning a new labor agreement and still faces many significant product launches under its new ownership (with successful market acceptance remaining uncertain). If Fiat (and by extension Chrysler) is able to weather the above-cited headwinds without incurring significant losses or experiencing further deterioration in its financial profile, the trend on the ratings could be changed to Stable. DBRS notes that any indication of Fiat's intent to acquire the UAW Voluntary Employee Beneficiary Association (VEBA) stake in Chrysler would trigger an event-driven review of the ratings. =================== K A Z A K H S T A N =================== KAZTRANSGAS: Fitch Upgrades LT Issuer Default Ratings to 'BB+' -------------------------------------------------------------- Fitch Ratings has upgraded Kazakhstan-based KazTransGas's (KTG) Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'BB+' from 'BB' and affirmed its Short-term IDR at 'B'. The Outlooks for the Long-term IDRs are Stable. The agency has simultaneously affirmed JSC Intergas Central Asia's (ICA) Long-term foreign and local currency IDRs at 'BB+', its senior unsecured rating at 'BB+' and its Short-term IDR at 'B'. The Outlooks for the Long-term IDRs are Stable. Intergas Finance B.V.'s senior unsecured issues have also been affirmed at 'BB+'. The upgrade of KTG's ratings reflects its diminishing structural subordination through diversification of the group's operations into gas sales as well as an improvement of its financial profile, which became stronger than that of its 100%-owned subsidiary -- ICA in 2010. Fitch expects KTG's business profile to be enhanced by the government's plans to transform it into the national gas operator, enabling the company to purchase gas from domestic gas producers and sell it on the local market and for export and thus to capitalize on attractive economics of export sales. Gas sales accounted for 61.9% of KTG's H111 revenue (47.8% in 2010) whereas the share of gas transportation services dropped to 36% (51.5% in 2010). Fitch expects this composition of the company's revenue to prevail in the medium term. KTG and ICA's ratings incorporate the companies' solid credit metrics, which were underpinned in 2009-2010 by the fact that OAO Gazprom ('BBB'/Positive), ICA's main counterparty, honored its ship-or-pay obligations under the Central Asian gas transit contract, despite a drop in actual volumes of gas transit. The companies benefited from solid cash flow generation, positive free cash flow and improvement in leverage-related ratios in 2009-2010. Fitch forecasts some deterioration of ICA/KTG's financial profile in 2011-2012 due to the terms of the new five-year agreement with OAO Gazprom for Turkmen gas transit, which retains a ship-or-pay provision covering 80% of contracted volumes but stipulates lower volumes of Turkmen gas transit compared to the previous contract. However, Fitch expects KTG's financial profile to remain stronger than ICA's given the business diversification of the former and anticipates that the financials of both companies will remain commensurate with their rating level. The agency forecasts KTG's FFO adjusted leverage to slightly increase to about 1.3x-1.4x in 2011-2012 (1.26x in 2010) but anticipates a more sizable increase of ICA's FFO adjusted leverage to above 2x in 2011-2012 (1.6x in 2010). Fitch views KTG/ICA's liquidity position as adequate. Debt repayment schedules are well balanced with a repayment peak in 2011 as ICA's Eurobonds for US$178.9 million fall due in November 2011. Both companies' cash positions at end-2010 and at end-H111 were sufficient to cover their short-term obligations. Fitch believes that the planned capex programs of both companies are manageable. KTG and ICA were able to cover their investment needs from internally generated cash flows during the past three years. Fitch does not expect any material impact on the group's credit metrics from the execution of two pipeline projects (eg the West-South gas pipeline and the Kazakhstan-China gas pipeline), which are being undertaken by the JVs between KTG and a Chinese counterparty, due to their planned financing arrangements at the JV level. In addition, the ratings of KTG, ultimately state-owned, and ICA reflect ICA's position as the monopoly operator of the gas pipeline network in Kazakhstan, which remains the only feasible route for transit of Central Asian gas to Russia and further to Europe. Fitch rates KTG and ICA on a standalone basis in accordance with Fitch's Parent and Subsidiary Rating Linkage methodology. ===================== N E T H E R L A N D S ===================== ELM BV: Moody's Cuts Rating on EUR84-Mil. Series 41 Notes to 'B1' ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of one class of notes issued by ELM BV under series 41. The notes affected by the rating action are: Issuer: ELM B.V. -- EUR84,000,000 Series 41 Floating Rate Credit Linked Secured Notes due 2058, Downgraded to B1 (sf); previously on Mar 25, 2011, Ba1 (sf) Placed Under Review for Possible Downgrade Ratings Rationale This transaction is a synthetic CDO currently referencing a portfolio of 80 European ABS assets. At present, the portfolio is composed mainly of Prime and Subprime RMBS (79%) and CMBS (15%). Series 41 has a thicknesses of 7.4% and a credit enhancements of 0%. Moody's explains that the rating actions reflect a deterioration in the credit quality of the underlying portfolio. Since the last rating action in July 2009, the WARF has deteriorated from 14.2 , which implies an average portfolio rating quality of Aa2, to 58.6, an implied average rating of A1. The actions also resolve the review for downgrade status of this rating. Moody's placed this rating on review for possible downgrade on 25 March 2011 when ten reference assets, amounting to 13.7% of the current portfolio, were placed on review for possible downgrade due to the announcement of new operational risk guidelines. Since March 2011, 17 reference assets amounting to 20.1% of the portfolio have been downgraded either as a result of the implementation of the operational risk guideline or performance deterioration in the pool and currently three assets amounting to 3.3% of the portfolio remain on review for possible downgrade due to deal specific operational risk concerns. In particular since March 2011, when this transaction was placed on review for downgrade, six Portuguese RMBS assets amounting to the 6.8% of the portfolio have been downgraded between three and five notches due to the sovereign related action. Currently, the lowest rated asset with a 0.3% exposure is a Greek RMBS which was downgrade to Ba1 on 13 May. In the process of determining the final rating, Moody's took into account the results of a sensitivity analysis. Given that this transaction is subject to a high level of macroeconomic uncertainty due to a 27.5% exposure of assets originated in Greece, Portugal, Ireland, Spain and Italy, Moody's considered a model run assuming six RMBS assets from these regions downgraded to below investment grade. The model output for this run results is an output that was several notches below the base run. Moody's explained that there exist a number of additional sources of uncertainty, operating both on a macro level and on a transaction-specific level, that may influence the rating actions taken. Among the general macro uncertainties are those surrounding future housing prices, pace of residential mortgage foreclosures, loan modification and refinancing, unemployment rates and interest rates. The principal methodology used in the rating was "Moody's Approach to Rating SF CDOs" published in November 2010. Moody's analysis for this transaction is based on the CDOROM. This model is available on moodys.com under Products and Solutions --Analytical models, upon return of a signed free license agreement. Moody's did not run a separate loss and cash flow analysis other than the one already done using the CDOROM model. For a description of the analysis, refer to the methodology and the CDOROM user guide on Moody's Web site. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. ELM BV: Moody's Lowers Rating on EUR50-Mil. Notes to 'Ba2' ---------------------------------------------------------- Moody's Investors Service has downgraded the ratings of one class of notes issued by ELM BV Leveraged Asset-Backed Securities 2007- 1 transaction. The notes affected by the rating action are: Issuer: ELM B.V. -- EUR 50,000,000 Series 2007-1 - LABS due 2029, Downgraded to Ba2 (sf); previously on Mar 25, 2011 A3 (sf) Placed Under Review for Possible Downgrade Ratings Rationale This transaction is a synthetic CDO currently referencing a portfolio of 46 European ABS assets. At present, the portfolio is composed mainly of Prime and Subprime RMBS (88%) and CMBS (11%). Series 2007-1 has a thicknesses of 5% and a credit enhancement of 0%. Moody's explained that the rating action reflects a deterioration in the credit quality of the underlying portfolio. Since April 2009, when the A3 rating was confirmed, the WARF has deteriorated from 4, which implies an average portfolio rating quality of Aa1, to 32, an implied rating of Aa3. The actions also resolves the review for downgrade status of this rating. Moody's placed this rating on review for possible downgrade on the 25 March 2011 when ten reference assets, amounting to 20% of the current portfolio, were placed on review for possible downgrade due to the announcement of new operational risk guidelines. Since March 2011, ten reference assets amounting to 18% of the portfolio have been downgraded either as a result of the implementation of the operational risk guideline or performance deterioration in the pool and three assets amounting to the 5.8% of the portfolio remain on review for possible downgrade to deal specific operational risk concerns. In particular, one Irish RMBS asset was downgraded eight notches to Baa3 due to performance, and one Greek RMBS was downgraded to Ba1 making it the lowest rated asset in the current portfolio. In the process of determining the final rating, Moody's took into account the results of a sensitivity analysis. Given that this transaction is subject to a high level of macroeconomic uncertainty due to a 33.1% exposure of assets originated in Greece, Portugal, Ireland, Spain and Italy, Moody's considered a model run assuming one RMBS asset from these regions downgraded to below investment grade. The model output for this run results in an output that was several notches below the base run. Moody's explained that there exist a number of additional sources of uncertainty, operating both on a macro level and on a transaction-specific level, that may influence the rating actions taken. Among the general macro uncertainties are those surrounding future housing prices, pace of residential mortgage foreclosures, loan modification and refinancing, unemployment rates and interest rates. The principal methodology used in this rating was "Moody's Approach to Rating SF CDOs" published in November 2010. Moody's analysis for this transaction is based on the CDOROM. This model is available on moodys.com under Products and Solutions --Analytical models, upon return of a signed free license agreement. Moody's did not run a separate loss and cash flow analysis other than the one already done using the CDOROM model. For a description of the analysis, refer to the methodology and the CDOROM user guide on Moody's website. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. ELM BV: Moody's Lowers Rating on EUR22.5-Mil. Notes to 'Ba1 (sf)' ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of one class of Notes issued by ELM BV under series 79 Leveraged Asset-Backed Securities 2006-4 transaction. The notes affected by the rating action are: Issuer: ELM B.V. - Series 79 - Leveraged Asset-Backed Securities 2006-4 -- EUR22,500,000 Floating Rate Credit Linked Secured Notes due 2026, Downgraded to Ba1 (sf); previously on Mar 25, 2011, A3 (sf) Placed Under Review for Possible Downgrade Ratings Rationale This transaction is a synthetic CDO currently referencing a portfolio of 60 European ABS assets. At present, the portfolio is composed mainly of Prime and Subprime RMBS (73.5%) and CMBS (24.7%). Series 79 has a thicknesses of 4.8% and a credit enhancement of 0%. Moody's explains that the rating actions reflect a deterioration in the credit quality of the underlying portfolio. Since April 2009, when the A3 rating was confirmed, the WARF has deteriorated from 1.8, which implies an average portfolio rating quality of Aa1, to 42.4, an implied average rating of A1. The actions also resolve the review for downgrade status of this rating. Moody's placed this rating on review for possible downgrade on 25 March 2011 when 14 reference assets, amounting to 17.9% of the current portfolio, were placed on review for possible downgrade due to the announcement of new operational risk guidelines. Since March 2011, 17 reference assets amounting to 30% of the portfolio have been downgraded either as a result of the implementation of the operational risk guideline or performance deterioration in the pool and four assets amounting to 5.6% of the portfolio remain on review for possible downgrade due to deal specific operational risk concerns. In particular, one Irish RMBS asset was downgraded eight notches to Baa3 due to performance, making it the lowest rated asset in the current portfolio. In the process of determining the final rating, Moody's took into account the results of a sensitivity analysis. Given that this transaction is subject to a high level of macroeconomic uncertainty due to a 27.2% exposure of assets originated in Ireland, Spain and Italy, Moody's considered a model run assuming the two lowest rated assets from these countries downgraded to below investment grade. The model output for this run results in one notch below the base run. Moody's explained that there exist a number of additional sources of uncertainty, operating both on a macro level and on a transaction-specific level, that may influence the rating actions taken. Among the general macro uncertainties are those surrounding future housing prices, pace of residential mortgage foreclosures, loan modification and refinancing, unemployment rates and interest rates. The principal methodology used in this rating was "Moody's Approach to Rating SF CDOs" published in November 2010. Moody's analysis for this transaction is based on the CDOROM. This model is available on moodys.com under Products and Solutions -- Analytical models, upon return of a signed free license agreement. Moody's did not run a separate loss and cash flow analysis other than the one already done using the CDOROM model. For a description of the analysis, refer to the methodology and the CDOROM user guide on Moody's website. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. ========= S P A I N ========= SANTANDER EMPRESAS: Fitch Affirms 'Csf' Rating on Class F Notes --------------------------------------------------------------- Fitch Ratings has upgraded two tranches and affirmed all other tranches of Fondo de Titulizacion de Activos Santander Empresas 1 and 2. Both transactions are CDOs of loans to Spanish SME's, self- employed borrowers and larger companies originated by Banco Santander ('AA'/Stable/'F1+'). The deals have benefited from portfolio amortization and structural de-leveraging, resulting in a high level of credit enhancement given by subordination and available cash reserve. FTA Santander Empresas 1's affirmation reflects its stable performance in terms of delinquencies and defaults. The current defaults stand at 0.65% of the outstanding balance and they represent only 10bps when compared to the original balance. While continued portfolio amortization has resulted in increased credit enhancement (CE) levels for all the rated tranches, the top ten obligor concentration of 19% is still high and this is reflected in Fitch's ratings of the junior notes. The upgrade on FTA Santander Empresas 2's class A2 and B notes principally reflects the increased CE and a relatively low level of defaults and arrears. Class A2 and B have built up significant CE of 61.9% and 43.2% respectively, and Fitch expects the Class B notes to start amortizing next year once the Class A2 note is redeemed. The level of portfolio defaults have increased to 2.7% of the current outstanding balance, representing 42bps when compared to the original balance. The agency believes defaults are unlikely to significantly increase in the medium term considering the relatively low levels of loans in the delinquency pipeline. Obligor concentration is high at 35.3% for the top twenty obligors and this is reflected in the Negative Outlook of the class E but all investment grade notes have sufficient CE buffers. The reserve remains drawn, at 80% of its target amount, although increased slightly in the last quarter. The notes also benefit from a 65bps excess spread, mitigating the basis and interest rate risk. The rating actions are as follows: Fondo de Titulizacion de Activos Santander Empresas 1: -- EUR146,461,608 class A2 notes (ISIN ES0382041012): affirmed at 'AAAsf'; Outlook Stable -- EUR80,600,000 class B notes (ISIN ES0382041020): affirmed at 'AAAsf'; Outlook Stable; -- EUR96,100,000 class C notes (ISIN ES0382041038): affirmed at 'A+sf'; Outlook Stable; -- EUR170,500,000 class D notes (ISIN ES0382041046): affirmed at 'CCCsf'; assigned a Recovery Rating of RR3 Fondo de Titulizacion de Activos Santander Empresas 2: -- EUR214,478,219 class A2 notes (ISIN ES0338058011): upgraded to 'AAAsf' from 'AAsf' ; revised Outlook to Stable from Positive; -- EUR84,100,000 class B notes (ISIN ES0338058029): upgraded to 'AAsf' from 'Asf'; Outlook revised to Stable from Positive; -- EUR62,300,000 class C notes (ISIN ES0338058037): affirmed at 'BBBsf'; Outlook Stable; -- EUR59,500,000 class D notes (ISIN ES0338058045): affirmed at 'BBsf'; Outlook Stable; -- EUR29,000,000 class E notes (ISIN ES0338058052): affirmed at 'Bsf'; Outlook Negative; -- EUR53,700,000 class F notes (ISIN ES0338058060): affirmed at 'Csf'; assigned a Recovery Rating of RR4 =========== S W E D E N =========== SAAB AUTOMOBILE: Deutsche Bank Agrees to EUR70-Mil. Bridge Loan --------------------------------------------------------------- Ola Kinnander and Aaron Kirchfeld at Bloomberg News report that Deutsche Bank AG has agreed to lend Saab Automobile a EUR70 million (US$95.5 million) bridge loan after securing collateral from a Chinese carmaker seeking to partner with the Swedish carmaker. According to Bloomberg, two people familiar with the matter said that Deutsche Bank is prepared to lend Saab the money after Zhejiang Youngman Lotus Automobile offered collateral to back the loan. They added that the deal could still fall apart, Bloomberg notes. Deutsche Bank, while offering to provide the financing, is not an adviser to Saab, Bloomberg says. Bloomberg relates that a Swedish appeals court on Monday said it will hear Saab's request to get protection against creditors, which if granted would prevent bankruptcy and ensure state coverage of wages. The original request for a reorganization of the company was rejected by a lower court earlier this month, Bloomberg recounts. As reported by the Troubled Company Reporter-Europe on Sept. 16, 2011, Reuters said that Saab wants creditor protection to give it time until a promised investment of EUR245 million from car firms Pangda Automobile Trade Co. Ltd. and Zhejiang Youngman Lotus Automobile gets the nod from Chinese authorities, Reuters noted. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. =========================== U N I T E D K I N G D O M =========================== AUSSIE BASILDON: Closes Outback Steakhouse in Basildon ------------------------------------------------------ Faye Hackwell at Echo reports that Aussie Basildon Limited, trading as Outback Steakhouse, has gone into liquidation. The restaurant in Miles Gray Road, Basildon, has closed due to financial difficulties. Echo relates that notices have been placed on the steakhouse's restaurants and doors. "William John Turner and Geoffrey Kinlan, of BDO LLP, were appointed joint liquidators of Aussie Basildon Limited, trading as Outback Steakhouse, on September 13," the notices read, according to Echo. "The unit has now closed." Staff were handed their redundancy notices on Tuesday, the report adds. Echo states that it is believed the company's Outback Steakhouse, in The Brewery complex, in Romford, has also closed its doors. Outback Steakhouse, which served meat, seafood and pasta dishes, opened in June 2003 and could cater for up to 200 guests at a time. CUBE HOTELS: Skylane Hotel Buys Hotel Unit in Evesham ----------------------------------------------------- Janet Harmer at Caterersearch.com reports that 36-bedroom Best Western Salford Hall hotel in Evesham, Worcestershire, has been sold to Sussex-based hotel, wedding and conference group Skylane Hotel, off a guide price of GBP2.25 million. Best Western was put on the market after its former owner, Cube Hotels, went into administration in February, according to Caterersearch.com. Philip Gibson, partner at property agent Edward Symons, handled the sale, the report notes. GALA GROUP: Moody's Assigns 'B2' Rating to GBP350-Mil. Notes ------------------------------------------------------------ Moody's Investors Service has assigned a definitive B2 rating to the GBP350 million senior secured notes due 2018 issued by Gala Group Finance Limited and a definitive Caa2 rating to the GBP275 million senior notes due 2019 issued by Gala Electric Casinos Limited, following receipt of final documentation. Ratings Rationale "Initially Gala expected to raise GBP250 million in senior secured notes and GBP400 million in senior notes as well as GBP800 million under new senior secured facilities to repay existing senior facilities", says Douglas Crawford, Moody's lead analyst for Gala. "However, the company chose to raise the same amount of total debt but increased the secured portion by GBP125 million." Despite the increased percentage of secured debt in the capital structure, Moody's definitive ratings on these debt obligations are in line with the provisional ratings assigned on May 16, 2011. Moody's rating rationale was set out in a press release issued on that date. The final terms of the bonds are in line with the drafts reviewed for the provisional (P)B2 and (P)Caa2 instrument ratings assignment. Gala Electric Casinos Limited and Gala Group Finance Limited's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Gala Electric Casinos Limited and Gala Group Finance Limited's core industry and believes Gala Electric Casinos Limited and Gala Group Finance Limited's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA published June 2009. Gala Electric Casinos Limited has its registered office in London, England. Through its subsidiaries it owns and operates a diversified gaming company (sales GBP1.2 billion for the year ending September 2010) with operations mainly in the UK. Following the closing of a restructuring in June 2010, funds managed by the principle investors (Apollo, Cerberus, Park Square and York Capital) indirectly hold a majority in Gala shares. HERDMAN'S MILL: Owes Creditors More Than GBP10 Million ------------------------------------------------------ BBC News reports that the company that owned the historic Herdman's Mill in County Tyrone owed its creditors more than GBP10 million when it went into receivership earlier this year. Ulster Bank, the largest creditor, is owed more than GBP6 million, according to BBC News. The report relates that Invest NI, a secured creditor, is owed GBP2.5 million. BBC News notes that receivers were appointed in June when the trustees of Herdmans Pension Scheme issued a winding-up petition against a subsidiary company due to its inability to meet pension contributions. BBC News notes that unsecured creditors include Monument Property Services, a company associated with Titanic Quarter developer Pat Doherty. It is owed GBP1.2 million, a sum unlikely to be repaid, the report relates. BBC News discloses that the receivers report notes that the book value of the mill site is GBP6 million but that a current market value is still to be confirmed. BBC News recalls that in July, some of the mill buildings were badly damaged in a major fire resulting in a knock-on effect on a hydroelectric generation business that operates from the site. The report relates that the hydroelectric business, which was owned by the Herdman family and sold power to Airtricity, is also in receivership. The unsecured creditors of the hydroelectric business are owed more than GBP5 million, and the bulk of the money is due to the government's Pension Protection Fund, the report notes. Accountancy firms ASM and PricewaterhouseCoopers are owed GBP56,000 and GBP32,000 respectively while a Belfast solicitors firm is owed GBP11,000, BBC News adds. LEHMAN BROTHERS: Has Agreement in Principle With Lehman Europe -------------------------------------------------------------- Lehman Brothers Holdings Inc. (LBHI) and Lehman Brothers International Europe (LBIE), the largest of LBHI's foreign affiliates, disclosed that they have reached an agreement in principle resolving the claims among the two entities and certain of their affiliates including Lehman Brothers Special Financing (LBSF). The complex agreement incorporating this resolution is subject to documentation and various approvals, including Bankruptcy Court approval as part of LBHI's plan confirmation. There is no assurance at this time that an agreement among the parties will be consummated. No details about the agreement in principle are available at this time. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LLANGOLLEN HOTELS: Some Creditors Won't Get Money Back ------------------------------------------------------ BBC News reports that businesswoman Stephanie Booth said she regrets people lost their jobs when her hotel chain collapsed in July. In her first broadcast interview since Llangollen Hotels went into administration, Ms. Booth told BBC News Wales some creditors will not get their money. The report relates Ms. Booth blamed a GBP900,000 tax bill and losing out on a GBP1 million loan. Ms. Booth said she will never borrow "a single penny from any bank, ever, ever again," BBC News notes. As reported in the Troubled Company Reporter-Europe on July 27, 2011, Business Sale said four hotels in Wales have been put on the market following the administration of Llangollen Hotels Ltd and its parent company, Global Investments Group. The business had been issued with a winding-up order from Her Majesty Revenue & Customs (HMRC), which led to the immediate closure of some of the hotels in the portfolio, according to Business Sale. The report, citing The Leader, relates that property agent Colliers International has been called in to manage the sale of the remaining hotels by administrators KPMG. PEDLEY FURNITURE: MJM Marine Mulls Firm Acquisition --------------------------------------------------- BBC News reports that Newry-based joinery and fit-out firm MJM Marine is on the verge of buying Essex-based Pedley Furniture International. Pedley Furniture went into administration earlier this year, according to BBC News. BBC News notes that MJM Marine has been operating Pedley Furniture's factory under license and is now in advanced discussions to buy the firm. Last week, the report discloses, MJM Marine had more than doubled its turnover in the last year, up from GBP12 million in 2009 to GBP25 million in 2010. BBC News notes that MJM Marine's London-based subsidiary, which targets high-end hotels and restaurants, delivered around GB11 million of orders during 2010. The report relates that buying Pedleys Furniture would give MJM Marine an increased presence in the hotel sector. MJM specializes in fitting-out cruise ships. RANGERS FOOTBALL: Owner Says Club Not Broke, Judge Freeze Assets ---------------------------------------------------------------- BBC News reports that Rangers Football Club chairman Craig Whyte has denied that the club is on the brink of insolvency, declaring that it is "business as usual." Mr. Whyte's statement follows the news that Rangers' former chief executive Martin Bain has had almost half a million pounds of the club's assets frozen, according to BBC News. This development comes after a judge agreed there was "real and substantial risk of insolvency," the report relates. According to BBC News, Mr. Whyte said the club had a good chance of succeeding in a tax tribunal. Mr. Bain is pursuing a GBP1.3 million damages claim against his former employer at the Court of Session in Edinburgh, BBC News states. Judge Lord Hodge granted a warrant which would ring-fence GBP480,000 of the Ibrox club's assets, the report notes. BBC News relates that Judge Lord Hodge said there was risk of insolvency if the HM Revenue & Customs tax case goes against Rangers. The club faces two tax claims and the larger claim could leave them with a bill of GBP49 million -- GBP35 million in tax, plus GBP14 million in interest and penalties, the report discloses. Mr. Bain, according to BBC News, raised his damages claim alleging breach of contract following the takeover at Rangers FC by venture capitalist Craig Whyte from former owner Sir David Murray. "The board would like to make it absolutely clear that, at Ibrox, it is business as usual. The club is trading normally and has a strong balance sheet," BBC News quotes Mr. Whyte as saying in his statement, posted on the Rangers Web site. "The board finds it reprehensible that the law courts have been used in recent days to suggest the club is on the brink of insolvency. It is not," Mr. Whyte added. Rangers Football Club PLC -- http://www.rangers.premiumtv.co.uk/ -- is a United Kingdom-based company engaged in the operation of a professional football club. The Company has launched its own Internet television station, RANGERSTV.tv. The station combines the use of Internet television programming alongside traditional Web-based services. Services offered include the streaming of home matches and on-demand streaming of domestic and European games, which include dedicated pre-match, half-time and post- match commentary. The Company will produce dedicated news magazine and feature programs, while the fans can also access a library of classic European, Old Firm and Scottish Premier League (SPL) action. Its own dedicated television studio at Ibrox provides onsite production, editing and encoding facilities to produce content for distribution on all media platforms. =============== X X X X X X X X =============== * UBS Trader Charged in London With Fraud ----------------------------------------- Chapter11Cases.com notes that UBS trader Kweku Adoboli didn't enter a plea in a London court as prosecutors began to outline alleged wrongdoing that stretches back as far as October 2008. Adoboli faces charges of fraud and false accounting. Bloomberg's Lindsay Fortado and Ben Moshinsky reported Friday that the 31-year-old UBS trader was taken into custody at a magistrates court in London Thursday until Sept. 22, when he can make an application for bail. Mr. Adoboli's false accounting offenses started in October 2008, according to the court charge sheet. He is also charged with fraud dating back to January 2009. According to the Bloomberg report, Adoboli "dishonestly abused" his position as a senior trader, which required him "to safeguard, or not to act against, the financial interests of UBS," according to court documents. ********* 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, 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 * * *