/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/111124.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 Thursday, November 24, 2011, Vol. 12, No. 233 Headlines A R M E N I A * ARMENIA: Moody's Changes Outlook on Ba2 Issuer Ratings to Neg. C Z E C H R E P U B L I C ECM REAL ESTATE: CPI Eyes Assets, Submits CZK892-Mil. Bid G E R M A N Y HEITKAMP BAUHOLDING: Files for Insolvency in Bochum SOLARVALUE AG: Won't Go Into Liquidation TITAN EUROPE: S&P Lowers Rating on Class C Notes to 'CCC-' H U N G A R Y * HUNGARY: May Have to Agree to IMF Conditions to Get Aid I R E L A N D * IRELAND: Businesses Under Threat; NAMA to Get Tough on Debtors I T A L Y MONTI ASCENSORI: May Opt for Liquidation if Investor Not Found L A T V I A LATVIJAS KRAJBANKA: Maybe Missing LTL100MM Due to Parent's Woes N E T H E R L A N D S TWINNY LOAD: Goes Into Liquidation; Parent Seeks Buyer R O M A N I A BANCA COMERCIALA: Fitch Affirms Individual Rating at 'D' S P A I N SANTANDER EMPRESAS: Moody's Assigns (P)Ca Rating to Serie C Notes T U R K E Y BEREKET VARLIK: S&P Assigns 'BB' Rating to Sukuk Certificates U N I T E D K I N G D O M COOKS THE BAKERY: In Administration, Closes 8 Bakeries ETHEL AUSTIN: Former Employees to Share GBP1.5-Mil Compensation LUMINAR GROUP: Liquid Envy Cuts Additional Jobs SELECT WORLD: Goes Into Voluntary Liquidation SOMF LTD: S&P Lowers Ratings on Three Note Classes to 'D' THOMAS COOK: 75% Stock Plunge May Affect Customer Bookings YELL GROUP: S&P Cuts Corp. Credit Rating to 'CC'; Outlook Neg. X X X X X X X X * EUROPE: Banks May Face Debt Strike Over Bond Changes * Upcoming Meetings, Conferences and Seminars ********* ============= A R M E N I A ============= * ARMENIA: Moody's Changes Outlook on Ba2 Issuer Ratings to Neg. ---------------------------------------------------------------- Moody's Investors Service has changed to negative from stable the outlook on Armenia's Ba2 government foreign and local currency issuer ratings. The outlook change reflects: (i) Risks to Armenia's growth outlook in the coming years given the anticipated economic slowdown in Europe and Russia, its main trading partners, and the impact of potentially weaker commodity prices for the country's mining and metals industries. (ii) Concerns about the deterioration of Armenia's debt metrics and external position following the 2009 recession and its impact on the country's shock-absorption capacity as it enters another period of heightened economic uncertainty. Ratings Rationale Moody's decision to change the outlook on Armenia's sovereign ratings to negative is primarily driven by the country's ongoing economic vulnerability to the weaker growth prospects in Europe and Russia, which together account for 58% of Armenia's export market. In particular, Armenia's reliance on exports to, as well as remittances and foreign direct investment from, Russia poses risks to its external position. In addition, potentially lower commodity prices could further affect the Armenian economy as exports are concentrated on mining, precious stones and metals (representing 73% of exports in 2010). Although Moody's currently still expects moderate growth in the next two years, the rating agency believes that the downside risks are significant given the weak global economic growth outlook. The second driver of the outlook change is the risk to Armenia's shock-absorption capacity as the country enters another economically challenging period with weakened debt metrics and a more vulnerable external position. Moody's notes that the country is now faced with a large current account deficit (estimated to be 11% GDP in 2011) and a government external debt ratio that has doubled to 35% in 2011 from 14% of GDP in 2008. Its total debt burden in relation of GDP is now 39% compared with 16% in 2008. Despite the change in outlook, Moody's notes the government's commitment to fiscal consolidation, as illustrated by the measures contained in the draft 2012 budget law which are aimed at reducing the general government deficit to 3.1% of GDP next year. These measures are in addition to the government's efforts to enhance the efficiency of tax collection. The impact of such measures however will remain unclear for some time and the implementation risks to the fiscal consolidation plan are significant, particularly given the uncertainty surrounding Armenia's growth prospects. As discussed above, the expected economic slowdown in Europe and Russia poses risks to Armenia's growth outlook. Concurrent with this action, Moody's has revised to negative the outlook on the Ba3 country ceiling for foreign-currency deposits. At the same time, the country ceiling for local-currency debt was downgraded to Baa1 from A3, bringing it in line with the country ceiling for local-currency deposits, which was affirmed at Baa1. The country ceiling for foreign-currency debt was affirmed at Baa3 and its outlook remains stable. What Could Change the Rating Up/Down Although unlikely in the short-to-medium term, Moody's would consider changing the rating outlook on Armenia back to stable in the event of a dissipation of the risks posed by the country's external vulnerability to low growth prospects among its main trading partners. Moody's would consider downgrading Armenia's sovereign ratings in the event of (i) a failure to achieve its fiscal deficits reduction plan; and/or (ii) a continued large current account deficit caused by prolonged weakness in commodity prices and/or remittances; and/or (iii) a decline in FDIs, thereby eroding the sustainability of the country's external position. The principal methodology used in this rating was Sovereign Bond Ratings published in September 2008. =========================== C Z E C H R E P U B L I C =========================== ECM REAL ESTATE: CPI Eyes Assets, Submits CZK892-Mil. Bid --------------------------------------------------------- CTK reports that Ivo Hala, insolvency administrator of ECM Real Estate Investments AG, said at creditor meeting at the Prague City Court on Tuesday that billionaire Radovan Vitek's CPI group has submitted a bid for the purchase of assets and projects of the indebted company. CP offered CZK892 million for the assets, CTK discloses. According to CTK, ECM creditors have not decided on the company's future so it will be up to the court to decide whether it will go bankrupt or will get a chance for reorganization. It is not yet clear when decision on ECM's future will be made, CTK notes. The insolvency administrator can be reached at: Msgr. Ing. Ivo Hala Anglicka 140/20, 120 00 Praha-Vinohrady Tel No: +420 222 524 604 Fax No: +420 222 521 895 Mobile: +420 737 258 081 E-mail: hala@akhala.cz As reported by the Troubled Company Reporter-Europe on Oct. 20, 2011, CTK related that the High Court in Prague canceled the decision on the bankruptcy of ECM and returned the case to a first-instance court. The High Court complied with the appeal of part of creditors whose claims were not approved by ECM's insolvency administrator, CTK disclosed. The court took into account an objection raised by part of creditors that the City Court in Prague did not follow the correct procedure when the creditor meeting was making its decision about the bankruptcy in July this year, CTK noted. Creditors registered claims on ECM worth a nominal CZK9.5 billion in total, but Mr. Hala acknowledged the validity of only around CZK2 billion worth of the claims, according to CTK. ECM Real Estate Investments AG is known mainly as the builder of high-rise buildings in Prague's Pankrac district. ============= G E R M A N Y ============= HEITKAMP BAUHOLDING: Files for Insolvency in Bochum --------------------------------------------------- According to Bloomberg News' Sheenagh Matthews, Handelsblatt, citing Frank Kebekus, responsible for restructuring at Heitkamp Bauholding GmbH, reported that the company filed for insolvency. Bloomberg notes that the newspaper said only the holding company with about 40 employees is affected by the insolvency, which was filed in Bochum, Germany. Mr. Kebekus told Handelsblatt that the operating units, which aren't affected by the parent's insolvency, have a "good chance" in an organizational change, Bloomberg relates. Negotiations with potential investors have already started, Bloomberg discloses. Heitkamp Bauholding GmbH is a German builder. SOLARVALUE AG: Won't Go Into Liquidation ---------------------------------------- The Annual General Meeting of Solarvalue AG held in Berlin on Nov. 16 did not support the resolutions proposed in the agenda by the company's management. Present was 6.41% of the total shareholders' equity represented by approximately 40 shareholders. The resolution to liquidate the company did not achieve the necessary majority. The Managing Board continues talking to potential investors and simultaneously reduces the current cost. The company said current liquidity will suffice for a few months. As reported by the Troubled Company Reporter-Europe on Oct. 10, 2011, despite the appropriate efforts, Solarvalue did not succeed to ensure the funds needed for the scheduled industrial production of solar grade silicon. The Solarvalue AG, based in Berlin, was founded in 2005. Nearest purpose of the company is the production of ingots from upgraded silicon. The long term goal is to grow along the solar value chain. TITAN EUROPE: S&P Lowers Rating on Class C Notes to 'CCC-' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on Titan Europe 2006-5 PLC's class B and C notes. "The rating actions reflect our analysis of the implications of recent events for the creditworthiness of the notes," S&P said. The DIVA loan is a 10-year loan, the largest loan in the pool (39.2% of the pool by balance), and was scheduled to mature in July 2016. The loan defaulted in 2008, following insolvency of the borrowers and the sponsor. "On Oct. 18, 2011, we received notice that the property securing the DIVA loan was sold for an aggregate price of EUR205 million, and that completion is anticipated to take place in early 2012. As of the October interest payment date (IPD), the senior loan balance in this commercial mortgage-backed securities (CMBS) transaction was about EUR240 million. This implies a principal loss of at least EUR35 million, which according to our understanding of the transaction documents will be applied reverse-sequentially to the notes. Adding fees and swap break costs, we believe the principal losses could increase significantly above this amount, affecting the class C notes as well. Consequently, we have lowered our rating on this class," S&P said. "The loss allocation to the junior classes will in turn reduce the credit support available to the senior classes, and thereby increase the risk of principal losses and interest shortfalls to these classes. As a consequence, we have lowered our rating on the class B notes," S&P said. Titan Europe 2006-5 is a CMBS transaction backed by seven loans. The loans are secured on a mixture of retail, office, industrial, and multifamily housing properties in Germany. All loans are scheduled to be repaid between October 2015 and July 2016, and the legal final maturity date of the transaction is in 2019. Potential Effects of Proposed Criteria Changes "We have taken the rating actions based on our criteria for rating European CMBS. However, these criteria are under review (see 'Advance Notice of Proposed Criteria Change: Methodology And Assumptions For Rating European Commercial Mortgage-Backed Securities,' published on Nov. 8, 2011)," S&P said. "As highlighted in the Nov. 8 Advance Notice of Proposed Criteria Change, we expect to publish a request for comment (RFC) outlining our proposed criteria changes for rating European CMBS transactions. Subsequently, we will consider market feedback before publishing our updated criteria. Our review may result in changes to the methodology and assumptions we use when rating European CMBS, and consequently, it may affect both new and outstanding ratings on European CMBS transactions," S&P said. "Until such time that we adopt new criteria for rating European CMBS, we will continue to rate and surveil these transactions using our existing criteria (see 'Related Criteria And Research')," S&P said. Ratings List Class Rating To From Titan Europe 2006-5 PLC EUR660.969 Million Commercial Mortgage-Backed Floating-Rate Notes Ratings Lowered B BB+ (sf) BBB- (sf) C CCC- (sf) B+ (sf) ============= H U N G A R Y ============= * HUNGARY: May Have to Agree to IMF Conditions to Get Aid --------------------------------------------------------- Agnes Lovasz at Bloomberg News reports that Barclays Plc, Goldman Sachs Group Inc., and Capital Economics said Hungary's government may have to reverse its position on ruling out International Monetary Fund conditions in exchange for financial aid. Prime Minister Viktor Orban last week abandoned his policy of shunning the Washington-based lender, seeking help after a Standard & Poor's threat to downgrade Hungary's debt to junk sent the forint to a record low, Bloomberg relates. According to Bloomberg, Neil Shearing, an emerging-markets analyst at Capital Economics Ltd., said that Mr. Orban may have to do another reversal and scrap emergency taxes on some industries and ease the burden of a mortgage-repayment plan on banks. The government has scrapped two debt sales and reduced the size of another eight auctions in the last three months as the euro region's debt crisis deepened, Bloomberg discloses. The threat of market turmoil may force Mr. Orban to back down from insisting on an IMF agreement that won't infringe on the country's "economic sovereignty," Barclays Capital economist Christian Keller, as cited by Bloomberg, said. Bloomberg relates that the government is seeking IMF "insurance" that will boost the country's ability to tap markets to finance its debt, Economy Minister Gyorgy Matolcsy told lawmakers in Budapest Nov. 21, adding that he saw "no reason to veer" from its economic policy "as it's successful." Hungary was granted a EUR20 billion (US$27 billion) Stand-By Agreement by the IMF and the European Union in 2008 after Lehman Brothers Holding Inc.'s collapse caused its debt markets to freeze and the forint to tumble. IMF loans of that kind force governments to adopt budget-deficit and debt-reduction targets, Bloomberg recounts. Relations with the lender soured in 2010 when Mr. Orban's government, which took office last May, broke off talks with the country's creditors, citing disagreements over economic policy during a review of the rescue loan, Bloomberg notes. The agreement ran out a year ago and repayments will begin in 2012, pushing up financing requirements by almost half from this year, Bloomberg states. Hungary is seeking a "precautionary credit line" of about EUR4 billion (US$5.4 billion) from the IMF, the Nepszabadsag newspaper reported Nov. 19 on its Web site, citing unidentified people close to the government, Bloomberg discloses. The Precautionary Credit Line is no longer available after the lender on Monday revamped some of its facilities, Bloomberg notes. ============= I R E L A N D ============= * IRELAND: Businesses Under Threat; NAMA to Get Tough on Debtors ---------------------------------------------------------------- BBC News reports that Finance Minister Sammy Wilson said businesses employing hundreds of people are under threat as National Asset Management Agency (NAMA) looks to get tough with Northern Ireland debtors. NAMA bought out the toxic debt left in Irish banks after the property crash, according to BBC News. The report notes that in Northern Ireland NAMA controls over GBP3.35 billion worth of debt covering an estimated 150 different firms and individuals. NAMA, BBC News notes, is now poised to start trying to raise funds for the Irish taxpayer who funded the exercise. It is doing so after spending the first year of its operations absorbing and sorting the bad debt, the report relays. Mr. Wilson told the news agency in an interview that this marks a new "dangerous phase" as it threatens not just big developers, but a host of businesses who were lured into property deals during the boom, but now find that the loans threaten their trading businesses following the crash. "Up until now Nama has really been trying to sort out the sheep from the goats -- I think we are entering a much more dangerous phase . . . . Now NAMA have to decide 'those businesses we have taken in, first of all what are we going to do with the land?' and that's where the fire sale could arise - where they simply try to off-load all of that land onto the market. . . . Secondly what do we do with the businesses? In many, many cases there are real businesses attached to these property loans," the report quoted Mr. Wilson as saying. A number of developers have already been forced into receivership by NAMA and their properties put onto the market, BBC News says. However, the report relates that NAMA Chairman Frank Daly said he does not want to put firms out of business. ========= I T A L Y ========= MONTI ASCENSORI: May Opt for Liquidation if Investor Not Found -------------------------------------------------------------- Jerrold Colten at Bloomberg News reports that Monti Ascensori SpA said in a statement that it may seek liquidation if it doesn't find an investor to buy a stake in the company. Monti Ascensori SpA is an Italy-based service company that operates and specializes in the maintenance, repairs, modernization and installation of freight and passengers lifts, escalators, and moving walkways. The Company installs and maintains a range of elevators and escalators, mainly throughout Italy. At December 31, 2010, it maintained about 26,150 elevator systems with 24-hours repair services. It also produces and installs new elevators and their components. It has a client base comprising large private companies and public organizations. Its business model is based on the use of local company in outsourcing, or direct territorial branch. The Company subsidiaries are: Sealift SA and Sealift Cote d'Azur Sarl. =========== L A T V I A =========== LATVIJAS KRAJBANKA: Maybe Missing LTL100MM Due to Parent's Woes --------------------------------------------------------------- Bloomberg News reports that Latvian bank regulator Irena Krumane said Tuesday that as much as LTL100 million (US$191 million) may be missing from Latvijas Krajbanka JSC. Ms. Krumane said a liquidation of Lithuania's Bankas Snoras AB will force a liquidation of the Latvian bank as well. She also said depositors will be able to withdraw LTL50 from ATMs starting Wednesday. The withdrawals will be allowed for two to three days, depending on how the Lithuanian government proceeds with Snoras. The bank's board has been detained, said Police Chief Ints Kuzis. Latvian Prime Minister Valdis Dombrovskis said at the same news conference that Lithuania will make a decision about the future of Snoras this week. Headquartered in Riga, Latvia, AS Latvijas Krajbanka provides commercial banking services to businesses and private individuals in Latvia and the markets of the Commonwealth of Independent States. As of Dec. 31, 2009, AS Latvijas Krajbanka had 115 customer service centers and 190 automated teller machines. AS Latvijas Krajbanka is a subsidiary of AS banka Snoras. ===================== N E T H E R L A N D S ===================== TWINNY LOAD: Goes Into Liquidation; Parent Seeks Buyer ------------------------------------------------------ Bike Europe reports that Twinny Load has gone into liquidation. Twinny Load is an independent company and is 100% owned by the Felua Group. Bike Europe relates that the Felua Group got under financial pressure because of declining funding and budget cuts by the local authorities forcing them to find a suitable acquisition candidate for Twinny Load. According to the report, the Felua Group is a state supported organization providing sheltered employment. The organization has to deal with changes in social legislation, and consequently increasing funding pressures. In view of this, Bike Europe notes, the company decided to look for a take-over candidate for Twinny Load. The Felua Group could no longer bare the financial risks of a commercial entity within its organization, the report relays. "Some potential take-over candidates were very serious," Bike Europe quotes Bart Wiegant, CEO of Twinny Load, as saying. "Unfortunately that has not led to a bid providing enough perspective for the Felua Group to finalize the deal. Therefore we decided to liquidate Twinny Load. The business will be withdrawn gradually. We strive to do everything as neat and respectful as possible with respect to our employees, customers, suppliers and other stakeholders." Over the next few weeks, it will become clear how the final liquidation will be settled, the report adds. Netherlands-based Twinny Load manufactures bicycle carriers. ============= R O M A N I A ============= BANCA COMERCIALA: Fitch Affirms Individual Rating at 'D' -------------------------------------------------------- Fitch Ratings has affirmed Banca Comerciala Romana S.A. (BCR) and BRD-Groupe Societe Generale S.A. (BRD) Long-term Issuer Default Ratings (IDR) at 'BBB+'. At the same time, the agency has downgraded BCR's Viability Rating (VR) to 'bb-' from 'bb'. BCR's and BRD's IDRs reflect the support they can expect to receive from their majority shareholders: Austria-based Erste Group Bank AG ('A'/Stable) and Societe Generale (SG; 'A+'/Stable), respectively. Both parent banks have remain committed to the Central and Eastern European (CEE) region and to their Romanian subsidiaries in particular, not withstanding the weak performance of the latter during the past three years. BCR's and BRD's IDRs are constrained by Romania's Country Ceiling, and the Stable Outlooks on the banks' IDRs reflect that on the sovereign. Any change in the Country Ceiling would likely result in a change in the banks' IDRs. Any marked reduction in the parent banks' commitment to the CEE region (not Fitch's base case expectation at present) could also trigger negative rating action. The downgrade of BCR's VR reflects continued weakening of asset quality, resulting in considerable pressure on profitability. Non-performing loans (consolidated NPLs; those exposures 90 days overdue) increased to 20.8% of the portfolio at end-9M11 from 16.8% at end-2010. The regulatory reporting of unconsolidated overdue loans was 15.3% and remained higher than the sector average (14.2% at end-9M11). Coverage of NPLs in the IFRS accounts was a low 51% at end-Q311, with unreserved NPLs equal to a high 75% of equity and the Fitch core capital ratio standing at 12.9% (as of H111). The relatively low coverage ratio and continued recognition of new NPLs suggest that provisioning charges are likely to remain high in 2012. BCR's performance has also come under pressure as a result of the impact of competition and lower securities yields on margins. At the same time, pre-impairment profitability remains solid, supported by the bank's good efficiency, and represents a significant first line of loss absorption capacity. Combined with moderate provisioning of NPLs, this allowed BCR to remain marginally profitable in 2009-9M11. Liquidity is currently comfortable, although BCR is dependent on Erste for euro and long-term funding, and the loans/deposits ratio was a high 135% at end-9M11. BCR's market leading franchise in both loans and deposits is a credit strength. At end-H111, the bank held 21% of sector assets. Fitch has not undertaken a full review of BRD, and has therefore not assigned a VR to the bank. However, the agency notes that most of BRD's key credit metrics under local regulations are slightly stronger than BCR, with NPLs standing below the market average at end-9M11, a regulatory Tier 1 capital ratio of 11.9% and a loans/deposits ratio of 111%. BRD is Romania's second- largest bank, with 14% of total assets at end-H111. The rating actions are as follows: Banca Comerciala Romana S.A.: -- Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook Stable -- Short-term foreign currency IDR: affirmed at 'F2' -- Long-term local currency IDR: affirmed at 'BBB+'; Outlook Stable -- Support Rating: affirmed at '2' -- Viability Rating: downgraded to 'bb-' from 'bb' -- Individual Rating: affirmed at 'D' BRD-Groupe Societe Generale S.A.: -- Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook Stable -- Short-term foreign currency IDR: affirmed at 'F2' -- Support Rating: affirmed at '2' ========= S P A I N ========= SANTANDER EMPRESAS: Moody's Assigns (P)Ca Rating to Serie C Notes ----------------------------------------------------------------- Moody's Investors Service has assigned these provisional ratings to the debt to be issued by FTA SANTANDER EMPRESAS 10 (the Fondo): -- EUR3760M Serie A notes, Assigned (P)Aaa (sf) -- EUR940M Serie B notes, Assigned (P)B3 (sf) -- EUR940M Serie C notes, Assigned (P)Ca (sf) FTA SANTANDER EMPRESAS 10 is a securitization of standard loans and credit lines mainly granted by Banco Santander (Aa3/P-1; Negative Outlook) to corporate and small and medium-sized enterprise (SME). At closing, the Fondo -- a newly formed limited-liability entity incorporated under the laws of Spain -- will issue three series of rated notes. Santander will act as servicer of the loans and credit lines for the Fondo, while Santander de Titulizacion S.G.F.T., S.A. will be the management company (Gestora) of the Fondo. Ratings Rationale As of September 2011, the provisional asset pool of underlying assets was composed of a portfolio of almost 30,000 contracts granted to companies in Spain. In terms of outstanding amounts, around 53% corresponds to standard loans and 47% to credit lines. The assets were originated mainly between 2009 and 2011. The weighted-average seasoning is 0.85 year for the loans sub-pool and 0.52 years for the credit-lines sub-pool, while the weighted- average remaining terms for these pools are 5.2 years and 1.0 years, respectively. Around 7% of the portfolio is secured by first-lien mortgage guarantees. Geographically, the pool is concentrated mostly in Madrid (29%), Catalonia (20%) and Andalusia (11%). At closing, there will be no loans more than 30 days in arrears. In Moody's view, the strong credit positive features of this deal include, among others: (i) a relatively short weighted average life of 2.1 years; (ii) a swap agreement guaranteeing an excess spread of 1.0%; and (iii) a geographically well-diversified pool. However, the transaction has several challenging features: (i) a low portfolio granularity (effective number of obligors below 400); (ii) a relatively high exposure to the construction and building industry sector (31.5% according to Moody's industry classification); (iii) a low percentage of assets secured by a first-lien mortgage guarantee (6.9%); and (iv) a complex mechanism that allows the Fondo to compensate (daily) the increase on the disposed amount of certain credit lines with the decrease of the disposed amount from other lines, and/or the amortization of the standard loans. These characteristics were reflected in Moody's analysis and provisional ratings, where several simulations tested the available credit enhancement and 20% reserve fund to cover potential shortfalls in interest or principal envisioned in the transaction structure. The ratings are primarily based on the credit quality of the portfolio, its diversity, the structural features of the transaction and its legal integrity. In its quantitative assessment, Moody's assumed a mean default rate of 10.7%, with a coefficient of variation of 45.0% and a recovery rate of 35.0%. Moody's also tested other set of assumptions under its Parameter Sensitivities analysis. For instance, if the assumed default probability of 10.7% used in determining the initial rating was changed to 13.7% and the recovery rate of 35% was changed to 25%, the model-indicated rating for Serie A, Serie B and Serie C of (P)Aaa(sf), (P)B3(sf) and (P)Ca(sf) would be (P)Aa2(sf), (P)Caa1(sf) and (P)Ca(sf) respectively. For more details, please refer to the full Parameter Sensitivity analysis included in the New Issue Report of this transaction. The global V Score for this transaction is Medium/High, which is in line with the score assigned for the Spanish SME sector and representative of the volatility and uncertainty in the Spanish SME sector. V-Scores are a relative assessment of the quality of available credit information and of the degree of dependence on various assumptions used in determining the rating. The main source of uncertainty in the analysis relate to the Transaction Complexity. This element has been assigned a Medium/High V-Score, as opposed to Medium assignment for the sector V-Score. For more information, the V-Score has been assigned accordingly to the report " V Scores and Parameter Sensitivities in the EMEA Small- to-Medium Enterprise ABS Sector " published in June 2009. The methodologies used in this rating were "Moody's Approach to Rating CDOs of SMEs in Europe", published in February 2007, "Refining the ABS SME Approach: Moody's Probability of Default assumptions in the rating analysis of granular Small and Mid- sized Enterprise portfolios in EMEA", published in March 2009 and "Moody's Approach to Rating Granular SME Transactions in Europe, Middle East and Africa", published in June 2007. In rating this transaction, Moody's used ABSROM to model the cash flows and determine the loss for each tranche. The cash flow model evaluates all default scenarios that are then weighted considering the probabilities of the default distribution assumed (generated using CDOROM) for the portfolio default rate. The Moody's CDOROM(TM) is a Monte Carlo simulation which takes the Moody's default probabilities as input. Each corporate reference entity is modelled individually with a standard multi-factor model incorporating intra- and inter-industry correlation. The correlation structure is based on a Gaussian copula. On the recovery side Moody's assumes a stochastic recovery distribution which is correlated to the default distribution. In each default scenario, the corresponding loss for each class of notes is calculated given the incoming cash flows from the assets and the outgoing payments to third parties and noteholders. Therefore, the expected loss or EL for each tranche is the sum product of (i) the probability of occurrence of each default scenario; and (ii) the loss derived from the cash flow model in each default scenario for each tranche. As such, Moody's analysis encompasses the assessment of stressed scenarios. =========== T U R K E Y =========== BEREKET VARLIK: S&P Assigns 'BB' Rating to Sukuk Certificates ------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB' issue rating on proposed sukuk certificates to be issued by Bereket Varlik Kiralama Anonim Sirketi (the issuer), a special purpose company (SPC) with Albaraka Turk Katilim Bankasi (Albaraka Turk; BB/Negative/B; Turkey national scale trAA-/--/trA-1) as the obligor and managing agent. The 'BB' rating on the proposed sukuk certificates is based on the 'BB' long-term counterparty credit rating on Albaraka Turk and the draft documentation of the planned issuance dated Nov. 20, 2011 received from the bank. The rating on the proposed certificates mainly reflects Albaraka Turk's irrevocable undertaking to purchase the assets held by the issuer at the redemption date of the sukuk at the exercise price which will be equal to the aggregate face value of certificates outstanding. This obligation will also rank pari passu with all the bank's other senior unsecured obligations. Under this transaction, the issuer will hold the property of the sukuk assets for the benefit of the certificate holders. The issuer will invest at least 51% of the proceeds received from the issuance of the sukuk certificates in a pool of selected real estate assets owned by Albaraka Turk, namely its headquarters and 19 branches, and the remaining amount in a pool of non-real- estate-based assets, receivables from Albaraka Turk's customers known as murabaha, for a period of time corresponding to the duration of the sukuk. The issuer, as "the lessor", will lease back the real estate assets to Albaraka Turk, as "the lessee" for a period equal to the lifetime of the transaction. Albaraka Turk will then make lease payments every six months to the issuer. These lease payments will serve as the sole basis for the periodic distribution payments payable on the certificates, as the pool of non-real-estate-based murabaha assets will not contribute to the periodic distributions to the certificate holders. The structure does not include a stand-by liquidity facility, which would otherwise kick in if Albaraka Turk failed to make a lease payment to the issuer to fund the periodic distribution amount due. However, non-payment would force the issuer to redeem the certificates early in compliance with the terms of the purchase undertaking included in the structure. "We believe that failure on the part of Albaraka Turk to fulfill its periodic rental payment obligations would also be detrimental to its reputation, business, and ratings," S&P said. "On the dissolution of the SPC at the sukuk's maturity date or earlier in the event of an early termination, Albaraka Turk undertakes to purchase assets held by the issuer at the exercise price. This payment will fund the dissolution distribution amount that is payable to the certificate holders, and be equal to the aggregate face amount of certificates outstanding," S&P said. Albaraka Turk has indicated it is using this sukuk to raise funds for general purposes in accordance with Sharia principles. "The ratings on Albaraka Turk reflect our view of the bank's good track record in Turkey's participation banking market, adequate funding coming from a strong but short-term deposit base, and limited market risk," S&P said. Weaknesses for the ratings are the high-risk operating environment in the Republic of Turkey (foreign currency ratings BB/Positive/B; local currency ratings BBB-/Positive/A-3; Turkey national scale trAA+/--/trA-1), the bank's small size and market share, and above-average credit risk owing to its large exposure to small and midsize enterprises (SMEs) and the construction sector. In addition, rapid loan growth constrains the bank's capitalization. If final documentation differs substantially from the draft version, the rating on the sukuk certificates could be changed. This report does not constitute a recommendation to buy, hold, or sell the certificates. =========================== U N I T E D K I N G D O M =========================== COOKS THE BAKERY: In Administration, Closes 8 Bakeries ------------------------------------------------------ Graeme Brown at birminghammail.net reports that Cooks the Bakery has collapsed into administration closing 8 bakeries in the process, which resulted to the cutting of 42 jobs. The Birmingham, Worcester and Coventry bakeries were included in the closures. A further eight outlets are continuing to trade as a buyer is sought -- compared with more than 120 bakeries and coffee shops employing 900 people as little as five years ago, according to birminghammail.net. "The administrators will continue to trade eight of the stores with a view to selling the business and assets as a going concern . . . . The remaining eight stores have been closed or had ceased to trade shortly before our appointment," the report quoted joint administrator Cameron Gunn of ReSolve Partners as saying. Mr. Gunn was appointed as joint administrator alongside Mark Supperstone and Simon Harris. The administrators can be reached at: Cameron Gunn Mark Supperstone Simon Harris RESOLVE PARTNERS LLP Baskerville House Centenary Square, Broad Street Birmingham B1 2ND Tel: 0121 503 2157 Fax: 0845 094 1160 E-mail: cameron.gunn@resolvegroupuk.com E-mail: mark.supperstone@resolvegroupuk.com E-mail: simon.harris@resolvegroupuk.com birminghammail.net notes that the business has shrunk since the chain took over 123 bakeries and saved 900 jobs when it struck a deal for rival Three Cooks in 2006. But in 2008, the number of shops had fallen to about 80, the report relays. Latest accounts filed at Companies House show the company made a loss of nearly GBP594,000 in the year to March 27, 2010, slipping into the red after making a small profit in 2009; while revenue, including from outlets in Northfield, West Heath, Bromsgrove, Dudley, Halesowen, Kidderminster and Redditch, fell from GBP13.7 million to GBP10.7 million across the period, birminghammail.net says. Solihull-based Cooks the Bakery operates a number of bakeries based across the Midlands and south of England. ETHEL AUSTIN: Former Employees to Share GBP1.5-Mil Compensation --------------------------------------------------------------- Associated Press reports that Ethel Austin Limited's more than 500 former employees are to share compensation worth up to GBP1.5 million after a Liverpool employment tribunal decided that staff should receive eight weeks' pay compensation. Union of Shop, Distributive and Allied Workers (Usdaw) said the award will cover people made redundant from Ethel Austin's former head office and distribution centre in Knowsley, Merseyside, and the company's store in London's Edgware Road, according to Associated Press. "However, I'm bitterly disappointed the tribunal limited the scope of the award. Many of our members won't be compensated just because their store had less than 20 staff is plainly wrong, and shows the gaping loophole and injustice of the current legislation. . . . [1,700] employees were made redundant from the same company for the same reason, so to suggest only 500 of them constituted a collective redundancy is nonsense," the report quoted Usdaw National Officer John Gorle as saying. Press Association notes that the union said it will seek legal advice and try to appeal against the judgment. As reported in the Troubled Company Reporter-Europe on Feb. 10, 2010, Geoff Bouchier, David Whitehouse and Philip Duffy, Partners at MCR have been appointed Joint Administrators of Ethel Austin Limited and Au Naturale Limited. The company had been trying to secure a refinancing, but poor trading in January is thought to have sealed its fate, according to The Independent. The report relates that Aurelia Properties served a winding up order on Ethel Austin. The liquidators can be reached at: Geoff Bouchier David Whitehouse Philip Duffy MCR 35 Newhall Street Birmingham, B3 3PU Tel: +44 (0)121 214 1120 Fax: +44 (0)121 214 1121 E-mail: gbouchier@mcr.uk.com E-mail: dwhitehouse@mcr.uk.com E-mail: pduffy@mcr.uk.com About Ethel Austin Headquartered in Merseyside, Ethel Austin Limited is one of Britain's value clothing retailers with a nationwide network of nearly 300 stores extending from Scotland to the South West, and from Wales to the South East. The business was established more than 70 years ago and has grown to become one of Britain's leading value clothing retailers with a national presence. The business was founded by Ethel Austin herself. Its sister company is the Au Naturale homewares chain. LUMINAR GROUP: Liquid Envy Cuts Additional Jobs ----------------------------------------------- Crawley Observer reports that Liquid and Envy club's former general manager Adam Foxley said the number of jobs axed has increased up to 75. As reported in the Troubled Company Reporter on Nov. 7, 2011, Wigan Today said that Liquid Envy has closed its operation after its parent company Luminar Group Holding PLC went into administration. With Liquid Envy's closure, a total of 30 full and part-time jobs have also been lost, according to Wigan Today. The report noted that Ernst & Young, which has been appointed as administrators, said the closures represented an acceleration of a turnaround plan for the business and the clubs being closed had already been identified as "non-core." Wigan Today relates that a total of 11 venues will close across the country but 65 will remain open as usual. About Luminar Group Based in Milton Keynes, United Kingdom, Luminar Group Holdings plc -- http://www.luminar.co.uk/-- is engaged in the ownership, development and operation of nightclubs and themed bars. Its main branded venues are Oceana, Liquid, and Lava & Ignite. The Company's product brands include Big Night Out, Vibe, Red Carpet Moments and UK Club Culture (UKCC). Oceana has five bars, two clubs, and one amazing night. * * * As reported in the Troubled Company Reporter on Oct. 28, 2011, MK News said that Luminar Group has gone into administration, saying it cannot meet its banking obligations. Luminar Group said it could not pay back debts to Lloyds TSB Bank, Barclays Bank and the Royal Bank of Scotland which due to be repaid on Oct. 26, according to MK News. The report related that the company's shares were temporarily suspended from trading when the news was announced. SELECT WORLD: Goes Into Voluntary Liquidation --------------------------------------------- travelweekly reports that Select World Travel has gone into voluntary liquidation. According to the report, the agency was a member of agency consortium TTA Worldchoice, which said it would be administering bookings and financially protecting all future bookings. "We understand, that with regret, Select World Travel will be going into voluntary liquidation. We shall be administering any bookings and financially protecting all future travel as per our usual procedures," TTA Worldchoice said in a statement, travelweekly reports. Select World Travel won Travel Weekly's Mystery Shopper in Malvern in April this year and was credited for its high level of personal service and expertise. Managing director Lee Harrison has campaigned through Travel Weekly for major tour operators to stop discountiung on the high-street and has been an outspoken critic of tactics used by large operators to market to consumers direct to cut out the middleman. Select World Travel is a travel agency. It had two branches in Great Malvern, Worcestershire and Ledbury in Herefordshire. SOMF LTD: S&P Lowers Ratings on Three Note Classes to 'D' --------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'D (sf)' from 'BBB- (sf)' and removed from CreditWatch negative its credit ratings on SOMF Ltd.'s class A1, A2, and B notes, given that the obligation it originally rated will not be met following a restructure of the underlying collateral. "We subsequently raised these ratings to 'BBB- (sf)', to reflect our opinion of the issuer's ability to meet its principal and interest obligations, as this is the current rating on the underlying collateral," S&P said. "SOMF is a pass-through collateralized debt obligation (CDO) securitization. The pass-through structure means that, under our criteria, we have weak-linked the ratings on SOMF's notes to the rating on the underlying collateral -- The Mall Funding PLC, which is a U.K. commercial mortgage-backed securities (CMBS) transaction that originally closed in May 2005," S&P said. "The holders of the underlying structured finance bond voted for a restructuring of this bond, including a three-year extension of its legal maturity date. As a consequence of the restructure, we lowered the rating on the bond to 'D (sf)', and subsequently raised it to 'BBB- (sf)' (see 'Related Criteria And Research')," S&P said. "At the time of our rating action on the underlying bond, we placed our ratings on SOMF's notes on CreditWatch negative due to a lack of clarity, in our opinion, on the status of these notes. We have now resolved the CreditWatch placement, having received clarity on this status following the restructure of the SOMF notes," S&P said. The resolution involves lowering the ratings on SOMF's notes to 'D (sf)' to reflect the extended maturity, and the subsequent raising to 'BBB- (sf)', which reflects the rating on the underlying collateral. Ratings List Class Rating To From SOMF Ltd. GBP200 Million Secured Floating-Rate Notes Ratings Lowered and Removed From CreditWatch Negative A1 D (sf) BBB- (sf)/Watch Neg A2 D (sf) BBB- (sf)/Watch Neg B D (sf) BBB- (sf)/Watch Neg Ratings Subsequently Raised A1 BBB- (sf) D (sf) A2 BBB- (sf) D (sf) B BBB- (sf) D (sf) THOMAS COOK: 75% Stock Plunge May Affect Customer Bookings ---------------------------------------------------------- Armorel Kenna and David Altaner at Bloomberg News report that Thomas Cook Group Plc (TCG) says it's "business as usual" as the company tries to secure financing from lenders. Bloomberg says customers might not wait that long. According to Bloomberg, analysts said that a 75% plunge in Thomas Cook's shares on Tuesday, Nov. 22, may deter customers from booking with the company, exacerbating a decline in demand over the winter. The company, as cited by Bloomberg, said it expects to conclude talks with lenders in less than six weeks and is confident they will be supportive. As reported by the Troubled Company Reporter-Europe on Nov. 23, 2011, Bloomberg News related that Thomas Cook said it's in talks with banks on financing a month after agreeing to relaxed loan conditions. Thomas Cook said in a statement that it will delay its full-year results until after the talks and expects headline operating profit for the year ended Sept. 30 to be "broadly in line" with previous guidance, Bloomberg disclosed. The London- based company said it's in the "seasonal low period" of cash, Bloomberg noted. It's also suffered from political unrest in North Africa and weak consumer demand in U.K., Bloomberg said. Thomas Cook Group plc is a United Kingdom-based company. The Company, together with its subsidiaries, is engaged in the provision of leisure travel services. Its main brands include Airtours, Aspro, Club 18-30, Cresta, Manos, Neilson, Sunset, Sunworld Holidays, Swiss Travel Service, Thomas Cook, Thomas Cook Style Collection, Thomas Cook Signature and Thomas Cook Tours. It has six geographic operating divisions: United Kingdom, Central Europe, West and East Europe, Northern Europe, North America and Airlines Germany. YELL GROUP: S&P Cuts Corp. Credit Rating to 'CC'; Outlook Neg. -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on U.K.-based classified directories publisher Yell Group PLC (Yell) to 'CC' from 'CCC+'. The outlook remains negative. "The downgrade reflects our view that Yell's publicly announced plan for repurchasing its term debt from the closing date of the amendment process aimed at resetting its covenants and revolving credit facility (RCF), which the group has set for Nov. 30, 2011, suggests a high probability of a subpar buyback. This transaction is currently allowed by Yell's existing credit agreement," S&P said. "The term loan is trading at a significant discount to its par value at present, which in our view provides Yell with an economic incentive to pursue a subpar buyback. Under Standard & Poor's criteria (see 'Rating Implications Of Exchange Offers And Similar Restructurings, Update,' published May 12, 2009), we consider a subpar buyback as tantamount to a default," S&P said. "We view Yell's highly leveraged capital structure and poor operating outlook as indications of financial distress. We see significant risks of continued structural and cyclical declines affecting the print directories sector, as well as increased competition as small business advertising expands across a greater number of online marketing channels," S&P said. "On the commencement of a subpar repurchase of term debt, we would expect to lower the corporate credit rating to 'D' (default). Furthermore, the rating could remain at 'D' for an extended period of time, depending on our expectation of the frequency and likelihood of ongoing future subpar repurchases. On completion of the planned transaction to repurchase the term loan below par, we will reassess the corporate credit rating on Yell based our view of the group's business and financial risk profiles at that time," S&P said. =============== X X X X X X X X =============== * EUROPE: Banks May Face Debt Strike Over Bond Changes ------------------------------------------------------ Harry Wilson at The Daily Telegraph reports that Europe's biggest banks have been warned they could face a debt buyers' strike by one of the world's leading investor groups, amid an increasingly bitter feud over controversial changes to their bonds. Otto Thoresen, director-general of the Association of British Insurers, told The Daily Telegraph attempts by banks to force debt investors to accept the terms of their bond exchange offers were "coercive" and could harm the banks' ability to refinance hundreds of billions of pounds of borrowings. Mr. Thoresen claimed banks were using a "thinly veiled threat" not to redeem their junior debt to force subordinated bondholders to accept less attractive terms, The Telegraph relates. "Such tensions will clearly impact on continuing relationships and raise into question the implications for individual banks' future access to debt capital markets. This is an important issue in the light of future capital and debt refinancing requirements for the banking sector in the coming years," The Daily Telegraph quotes Mr. Thoresen as saying. Barclays Capital analysts reckon Europe's banks must sell about EUR800 billion (GBP689 billion) of new bonds next year, or about EUR50 billion to EUR70 billion every month, The Daily Telegraph discloses. However, the eurozone crisis has led bank issuance to come to a virtual halt since May, creating a huge backlog of debt that needs to be refinanced, The Daily Telegraph notes. According to The Daily Telegraph, the ABI's members, which include all of the UK's largest insurance group with over GBP1 trillion of assets under management, are among the biggest buyers of bank bonds and their support will be crucial if lenders are to get anywhere close to hitting their funding targets. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Nov. 28, 2011 BEARD GROUP, INC. 18th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York City Contact: 1-240-629-3300 Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* 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 * * *