/raid1/www/Hosts/bankrupt/TCREUR_Public/120316.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, March 16, 2012, Vol. 13, No. 55
Headlines
C Y P R U S
* CYPRUS: Moody's Cuts Ratings on Three Banks; Concludes Review
F R A N C E
CAPTAIN BIDCO: S&P Assigns 'B' Long-Term Rating; Outlook Stable
LAFARGE SA: S&P Affirms 'BB+/B' Corporate Credit Ratings
* Founder of Scandal-Marred Breast Implant Maker Jailed
G E R M A N Y
DECO 15: S&P Lowers Rating on Class F Notes to 'CCC'
KLEOPATRA LUX: S&P Cuts Corp. Credit Rating to 'CC'; Outlook Neg.
G R E E C E
GLITNIR BANK: To Pay EUR635 Million to Priority Creditors Today
I R E L A N D
EIRCOM GROUP: Managers Back Debt Restructuring Plan
QUINN GROUP: Anglo Fails to Identify Creditors
N E T H E R L A N D S
HARBOURMASTER CLO: Fitch Cuts Rating on Four Note Classes to 'B-'
HARBOURMASTER CLO: Fitch Cuts Ratings on Two Note Classes to 'B-'
HARBOURMASTER CLO: S&P Observes Increase in 'CCC-' Rated Assets
R U S S I A
OGK-1 JSC: Moody's Withdraws 'Ba3' Corporate Family Rating
S P A I N
REPSOL INT'L: Moody's Downgrades Preferred Stock Rating to 'Ba1'
U K R A I N E
UKRSIBBANK: Fitch Assigns 'B+' Rating Senior Unsecured Bonds
U N I T E D K I N G D O M
CPP MANUFACTURING: Owed GBP18 Million at Time of Collapse
DARLINGON FC: To Draw Up CVA Proposal to Exit Administration
GAME GROUP: OpCapita Makes Acquisition Offer
LINKAGE COMMUNITY: Plans to Slash Up to 350 Jobs
PORT VALE: Potential Buyers Must Submit Final Offers Next Week
PORT VALE: Two Local Buyers Show Interest in Buying Club
RANGERS FOOTBALL: Murray to Step Aside if Bigger Bid Arises
TIME IT RETAIL: Workers Out of Pocket as Retail Chain Collapses
VIRIDIAN GROUP: Moody's Assigns 'B1' Corporate Family Rating
WASTE SAVERS: Ceases Trading; 40 Staff Lose Jobs
WOVEN CARPETS: Administrators Seek Buyer for Firm's Assets
X X X X X X X X
* S&P Withdraws 'D' Ratings on 23 European Synthetic CDO Tranches
* Moody's Takes Rating Actions on Four European ABCP Programs
* EUROPE: Moody's Says Share Buybacks May Hit Pharma Ratings
* Private Equity Firms Buy Up European Distressed Property Debt
* BOOK REVIEW: Hospital Turnarounds - Lessons in Leadership
*********
===========
C Y P R U S
===========
* CYPRUS: Moody's Cuts Ratings on Three Banks; Concludes Review
---------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of three
Cypriot banks:
-- Bank of Cyprus Public Co Ltd (BoC): deposit and debt ratings
downgraded by two notches to B1 with a negative outlook from
Ba2 and standalone credit assessment downgraded to B2 from
Ba3.
-- Marfin Popular Bank Public Co Ltd (Marfin): deposit and debt
ratings downgraded by one notch to B3 with a developing
outlook from B2 and standalone credit assessment to Caa1 from
B3.
-- Hellenic Bank Public Company Ltd (Hellenic): deposit and debt
ratings downgraded by one notch to Ba3 with a negative
outlook from Ba2 and standalone credit assessment to B1 from
Ba3.
The rating actions conclude the review for downgrade initiated by
Moody's on November 8, 2011.
The downgrades reflect, to differing degrees, the combined
pressures on the banks' standalone credit profiles from the
following factors:
1. The crystallization of losses on banks' holdings of Greek
government bonds (GGBs) after Greece's debt exchange, requiring
an increase in the banks' capital to bring their core Tier 1
ratios back up to the domestic regulatory minimum level of 8% and
to cover the shortfall indicated by the 9% stress test target of
the European Banking Authority (EBA).
2. An acceleration in problem loan formation in 2011 and Moody's
expectation of continued severe asset-quality pressure from the
weak operating environments in Cyprus and Greece, Cypriot banks'
two main markets, leading to higher loan loss provisions.
3. The weakening funding and liquidity positions, which are the
result of deposit outflows which in turn have triggered an
increased reliance on central bank funding for some banks.
4. Moody's expectation that declining business volumes will
pressure pre-provision profitability, thereby weakening internal
loss-absorption capacity.
The action also removes systemic support from the subordinated
and junior subordinated debt instruments of the affected Cypriot
banks, in line with actions already taken on some other European
banks.
RATINGS RATIONALE
- BANK OF CYPRUS (BoC)
The two-notch downgrade of BoC's standalone credit assessment,
which underpins the downgrade of the bank's debt and deposit
ratings, reflects the following drivers:
1. The primary driver of the rating action on BoC is the
crystallization of large losses on the bank's GGB holdings, which
have materially reduced capitalization levels. Following a 60%
impairment in the nominal values of GGBs, as indicated by its
preliminary 2011 financial results, which is below the 70%
expected net present value loss, BoC's core Tier 1 ratio,
excluding its Convertible Enhanced Capital Securities (CECS),
fell to 5.1% (below the 8% regulatory minimum) in December 2011,
compared to 8.4% in December 2010.
Moody's acknowledges the bank's intention to execute a capital-
strengthening plan, which includes a capital increase of EUR397
million and the voluntary conversion of EUR600 million of CECS
aimed at increasing core Tier 1 to 9.1%. In addition the bank is
also in the process of implementing deleveraging measures as
demonstrated by the sale of their Australian subsidiary. However,
Moody's recognizes the challenges related to the implementation
of the capital-strengthening plan and believes that the ongoing
pressure on the bank's capital position is commensurate with the
risk profile of a B2 standalone rating. Moody's notes that the
bank's remaining exposure to GGBs is still material -- with a
book value of 44% of Tier 1 capital, as of December 2011--
leaving BoC's capital position exposed to potential future losses
beyond the current debt exchange. Moody's believes that the risk
of another Greek sovereign default, even after the debt exchange,
will remain high.
2. Another key driver of BoC's downgrade is the recent
acceleration in the formation of problem loans and Moody's
expectation that these pressures will continue to build over the
near to medium term. While the acceleration of problem loans
formation is signalled by an increase in reported non-performing
loans (NPLs) to 10.2% of gross loans in December 2011, from 8.2%
in June 2011, Moody's notes that these reported ratios do not
capture delinquent loans that are fully covered by tangible
collateral. As Moody's remains concerned about the timeliness of
the recoverability of collateral in the current market, and given
that such loans accounted for an additional 5% of gross loans in
2010, Moody's estimates that problem loan levels may be over 15%,
as of December 2011. Furthermore, BoC has reported that the
provisioning coverage of problem loans has declined to 51% from
55% a year earlier and Moody's notes that, against a backdrop of
dropping collateral values, the bank does not maintain on balance
sheet provisions for delinquent loans that are full covered by
tangible collateral. As of December 2010, coverage including such
loans had been around 33%, leaving the bank's capital more
vulnerable to losses.
In addition, given that 35% of BoC's lending is related to
Greece, Moody's expects asset-quality pressures from this segment
of the loan book to continue to mount and weaken the bank's
balance sheet in the coming years. As the Greek economy enters
its fifth consecutive year of contraction in 2012, and
unemployment continues to surpass 20%, the rating agency expects
Greek repayment capacity to deteriorate further. Moody's also
expects that overall asset-quality pressures will be compounded
by the weakening Cypriot economy (51% of BoC's loan book), with
real GDP for Cyprus forecast to contract by 1% in 2012.
3. The third driver of the downgrade of BoC's standalone credit
assessment to B2 is the bank's weakening liquidity and funding
position, owing primarily to deposit outflows. During 2011,
deposit outflows from Greek branches and foreign-owned corporate
entities accounts amounted to approximately 7% of total deposits,
thereby reducing the bank's liquidity cushion, with liquid assets
(defined as cash, bank placements and investments) declining to
21.6% of total assets at December 2011 from 30.4% at December
2010. Whilst the bank has limited market funding, Moody's expects
further pressures stemming from additional withdrawals of
deposits sourced in Greece, which currently account for 26% of
total deposits. In Moody's opinion, deposits from foreign-owned
corporate entities sourced in Cyprus, which account for 27% of
total deposits, are also vulnerable to shifts in market
sentiment. Accordingly, the rating agency recognizes that BoC's
use of funding from the European Central Bank (ECB), which
increased to 5% of assets in December 2011 from 3% in September
2011, may rise further in coming quarters.
4. The fourth rating driver for BoC is Moody's expectation that
declining pre-provision profitability will dampen the bank's
internal loss-absorption capacity. Despite recent gains in pre-
provision income, as indicated in the bank's preliminary 2011
results, Moody's expects that lower business volumes, due to
deleveraging and a weakening domestic operating environment, will
exert downward pressure on pre-provision profitability and lower
internal loss-absorption capacity.
- Systemic support embedded in debt and deposit ratings
BoC's debt and deposit ratings continue to benefit from one notch
of uplift, reflecting Moody's view of the balance between (i) the
constrained domestic capacity of the Cypriot government to
provide support to the banking system, if needed, and (ii) the
additional resources that could potentially be made available to
Cyprus in the context of its membership in the European Monetary
Union.
- Negative outlook
The negative outlook on BoC's ratings primarily reflects the
challenging operating environments in Greece and Cyprus and
related downside risks for asset quality and profitability.
- What could move the ratings up/down
A rating upgrade is unlikely in the medium term, unless there is
a material improvement in the operating environments in Cyprus
and Greece.
Moody's would consider downgrading BoC's standalone rating
further in the event of (i) an acceleration in asset-quality
deterioration beyond the rating agency's current expectations;
(ii) a crystallization of further losses from GGB holdings that
would weaken the bank's capital position; or (iii) an
acceleration of deposit outflows that would make the bank
increasingly reliant on central bank funding.
- MARFIN POPULAR BANK
The one-notch downgrade of Marfin Popular Bank's standalone
credit assessment, which underpins the downgrade of the bank's
debt and deposit ratings, was driven by the following factors:
1. The primary driver of the rating action on Marfin is the
recent erosion of its capital base. As a result of EUR1.1 billion
in loan impairments, following a due diligence on its loan book,
and the crystallization of EUR1.9 billion in losses on the bank's
GGBs, Moody's estimates that the bank's core Tier 1 ratio was
depleted in December 2011, from 8.2% in September 2011.
Moody acknowledges the bank's intention to execute a capital-
strengthening plan, which includes a capital increase of up to
EUR1.8 billion, an exchange of current securities into
instruments that are core Tier 1 capital and substantial
deleveraging aimed at increasing core Tier 1 to 9%. However,
Moody's believes that this plan faces challenges and that the
extent of the current reduction in capital levels is more closely
aligned with the risk profile of a Caa1 standalone rating.
Furthermore, Moody's also acknowledges that the bank's remaining
exposures to GGBs -- with a book value of 137% of Tier 1 capital
(estimated by Moody's), as of December 2011-- are also much
larger than its domestic peers, leaving Marfin's capital position
particularly exposed to potential future GGB-related losses
beyond the current debt exchange.
2. The downgrade of Marfin also takes into account the recent
acceleration in the formation of problem loans and Moody's
expectation that asset quality pressures will remain over the
near to medium term. The acceleration of problem loan formation
is illustrated by an increase in reported non-performing loans
(NPLs) to 13.9% of gross loans in December 2011, from 8.4% in
June 2011. Nevertheless, Moody's also highlights that these
reported ratios do not capture delinquent loans that are fully
covered by tangible collateral. Accordingly, as Moody's remains
concerned about the timeliness of recoverability in the current
market, and given that such loans accounted for an additional 3%
of gross loans in 2010, Moody's estimates that problem loan
levels may be over 17% as of December 2011.
Furthermore, with 42% of Marfin's lending related to Greece,
Moody's expects asset-quality pressures from this segment of the
loan book to continue to mount and weigh heavily on the bank's
balance sheet in the coming years. As the Greek economy enters
its fifth consecutive year of contraction in 2012, and
unemployment continues to surpass 20%, Moody's expects Greece's
repayment capacity to deteriorate further. Moody's also expects
that overall asset-quality pressures will be compounded by the
weakening Cypriot economy (43% of Marfin's loan book), with real
GDP for Cyprus forecast to contract by 1% in 2012.
Although provisioning coverage of problem loans as reported by
the bank increased to 51.9% from 50.5% a year earlier, Moody's
notes that these figures do not account for delinquent loans that
are fully covered by tangible collateral. As of December 2010,
coverage including such loans had been around 34%, leaving the
bank's capital vulnerable to losses from such loans.
3. The downgrade of the standalone credit assessment to Caa1 also
captures the magnitude of Marfin's deteriorating liquidity and
funding position, owing to sizable deposit outflows. During 2011,
deposit outflows from its Greek branches, foreign-owned corporate
accounts and Cyprus branches amounted to approximately 21% of
total deposits. This deterioration has led to Marfin being
significantly reliant on central bank funding, which Moody's does
not expect to diminish in the short term.
- Systemic support embedded in debt and deposit ratings
Marfin's debt and deposit ratings continue to benefit from one
notch of uplift, reflecting Moody's view of the balance between
(i) the constrained domestic capacity of the Cypriot government
to provide support to the banking system, if needed, and (ii) the
additional resources that could potentially be made available to
Cyprus in the context of its membership in the European Monetary
Union.
Developing outlook
The developing outlook on the bank's ratings primarily reflects
the uncertainty regarding its capital and funding position.
- What could move the ratings up/down
Marfin's ratings could be upgraded following (i) a successful
recapitalization that would restore the bank's solvency, and (ii)
a material reduction in central bank funding.
Moody's would consider further downgrading Marfin's standalone
rating in the event of (i) a failure to successfully implement
its recapitalization plan; (ii) further material asset-quality
deterioration, resulting in losses that would further erode the
bank's capital position; (iiii) further impairments in the bank's
GGB holdings, resulting in losses that would further erode the
bank's capital position; or (iv) continued deposit outflows.
- HELLENIC BANK
The one-notch downgrade of Hellenic's standalone credit
assessment, which underpins the downgrade of the bank's debt and
deposit ratings, was driven by the following factors:
1. The primary driver of the rating action on Hellenic is the
recent increase in its problem loans, which is compounding legacy
asset-quality issues, and Moody's expectation that problem loans
will continue to build over the near to medium term. Non-
performing loans (NPLs) reported by the bank increased to 13.2%
of gross loans in December 2011, from 9.8% in December 2010;
however, Moody's notes that these reported ratios do not capture
delinquent loans that are fully covered by tangible collateral.
As Moody's remains concerned about the timeliness of collateral
recoverability in the current market, and given that such loans
accounted for an additional 8% of gross loans in 2010, the rating
agency estimates that problem loan levels may be over 21% as of
December 2011. While the bank reports that provisioning coverage
of problem loans stood at 68%, from 73% a year earlier, Moody's
points out that these figures do not account for delinquent loans
that are fully covered by tangible collateral. As of December
2010, coverage including such loans had been around 49%, leaving
the bank's capital vulnerable to losses from such loans.
Furthermore, Moody's expects that asset-quality pressures
stemming from the weakening Cypriot operating environment, which
accounts for the bulk of Hellenic's loan book, and from the depth
of the Greek economic crisis (which accounts for 17%) will
continue to contribute to further problem loan formation. This
view is based on (i) mounting economic pressures in Cyprus, with
real GDP for Cyprus forecast to contract by 1% in 2012; and (ii)
further deterioration in the repayment capacity of Greek
borrowers, with Greece's economy entering its fifth consecutive
year of contraction in 2012.
2. The second driver of Hellenic's downgrade is the impact of the
crystallization of losses on Hellenic's GGB holdings, albeit at
lower levels than has been recorded by other rated Cypriot banks.
Following a 70% impairment charge on the nominal value of GGBs,
as indicated in the bank's preliminary 2011 financial results,
Hellenic's Tier 1 ratio decreased to 10% in December 2011, from
12% in December 2010 (core Tier 1 data is not publically
available). Moreover, as Hellenic's remaining GGB exposures are
now relatively small -- with a book value of EUR35 million (8% of
reported equity), as of December 2011 -- the bank remains less
exposed to potential future losses, beyond the current debt
exchange, compared to domestic peers.
3. The positioning of Hellenic's standalone rating above those of
its domestic peers also takes into account its stronger liquidity
position. Hellenic has maintained a relatively high level of
liquid assets, with cash, bank placements and debt investments
amounting to 36.4% of total assets in December 2011 and no
central bank funding.
Nevertheless, and despite stable and growing balances in 2011,
Moody's continues to highlight risks related to the bank's high
reliance on deposits from foreign-owned corporate entities
sourced in Cyprus. This exposes Hellenic to potential negative
shifts in market confidence and the risk of deposit outflows.
- Systemic support embedded in debt and deposit ratings
Hellenic's debt and deposit ratings continue to benefit from one
notch of uplift, reflecting Moody's view of the balance between
(i) the constrained domestic capacity of the Cypriot government
to provide support to the banking system, if needed; and (ii) the
additional resources that could potentially be made available to
Cyprus in the context of its membership in the European Monetary
Union.
- Negative outlook
The negative outlook on the bank's ratings primarily reflects the
challenging operating environments in Greece and Cyprus and
related downside risks for asset quality and profitability.
- What could move the ratings up/down
A rating upgrade is unlikely in the medium term, unless there is
a material improvement in the operating environments in Cyprus
and Greece.
Moody's would consider further downgrading Hellenic's standalone
credit assessment in the event of (i) an acceleration in asset-
quality deterioration beyond current expectations, and/or (ii)
material deposit outflows that would result in reliance on
central bank funding.
- Assignment of deposit ratings for Hellenic's Greek branches
Moody's is also assigning a deposit rating of B1, with a negative
outlook, to the Greek branches of Hellenic bank to capture the
still low, but rising, possibility of currency redenomination and
the deposit freeze that such an event would probably entail. The
current ratings of the other two Cypriot-rated banks are at or
below B1 -- levels that sufficiently capture these specific
risks.
SUBORDINATED AND JUNIOR SUBORDINATED DEBT RATINGS
As part of the rating action on these three Cypriot banks,
Moody's has also removed systemic support from their subordinated
and junior subordinated debt instruments. This action was
prompted by the rating agency's concerns that systemic support in
Europe may not be extended to these types of instruments in case
of financial distress. Subordinated debt is typically recognized
in banks' capital structure as Tier 2 capital, and Moody's
expects domestic authorities to make greater use of their
resolution tools to allow burden-sharing with subordinated
bondholders.
Subordinated debt is now rated one notch lower than a bank's
standalone ratings, while any undated junior subordinated debt is
now rated two notches below the standalone rating.
The downgrade follows similar removals of systemic support from
subordinated debt instruments in Denmark, the UK, Ireland and
Germany.
FULL LIST OF CHANGES TO THE RATINGS OF CYPRIOT BANKS:
Bank of Cyprus Public Co Ltd:
- Deposit and senior debt ratings downgraded to B1/Not-Prime
from Ba2/Not-Prime
- Subordinated debt ratings downgraded to (P)B3 from (P)Ba3
- Junior subordinated notes rating downgraded to (P)Caa1 from
(P)B1
- Standalone BFSR downgraded to E+ (mapping to B2 on the long-
term rating scale) from D-, mapping to Ba3
- All ratings have a negative outlook, except the E+ BFSR which
has a stable outlook.
Marfin Popular Bank Public Co Ltd:
- Deposit and senior debt ratings downgraded to B3/Not-Prime
from B2/Not-Prime
- Subordinated debt rating downgraded to Caa2 from B3
- Standalone BFSR downgraded to E (mapping to Caa1 on the long-
term rating scale) from E+, mapping to B3
- All long-term debt and deposit ratings deposits, and the E
BFSR, have a developing outlook
Egnatia Finance plc (the funding subsidiary of Marfin Popular
Bank):
- Senior unsecured debt ratings downgraded to (P)B3 from (P)B2
- Subordinated debt ratings downgraded to (P)Caa2 from (P)B3
- All ratings have a developing outlook
Hellenic Bank Public Co Ltd:
- Deposit ratings downgraded to Ba3/Not-Prime from Ba2/Not-Prime
- Greek branch ratings of B1/NP assigned
- Standalone BFSR downgraded to E+ (mapping to B1 on the long-
term rating scale) from D-, mapping to Ba3
- All ratings carry a negative outlook, except the E+ BFSR which
has a stable outlook.
The methodologies used in these ratings were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank
Ratings: A Refined Methodology published in March 2007.
Other Factors used in these ratings are described in Moody's
Guidelines for Rating Bank Hybrid Securities and Subordinated
Debt published in November 2009.
As of December 2011, Bank of Cyprus had total assets of EUR37.8
billion, Marfin Popular Bank EUR34.0 billion and Hellenic Bank
EUR8.3 billion. All three banks are headquartered in Nicosia,
Cyprus.
===========
F R A N C E
===========
CAPTAIN BIDCO: S&P Assigns 'B' Long-Term Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Captain Bidco SAS, a France-based
holding company that owns the French engineering steel producer
Ascometal SAS. The outlook is stable.
"We also assigned a 'B+' issue rating to the EUR60 million
revolving credit facility (RCF) issued by Captain Bidco SAS and
due 2017. The recovery rating on this RCF is '2', indicating our
expectation of substantial (70%-90%) recovery in the event of a
payment default," S&P said.
"We further assigned a 'B-' rating to Captain Bidco SAS's
proposed EUR300 million senior secured notes due 2020. The
recovery rating on these notes is '5', indicating our expectation
of modest (10%-30%) recovery in the event of a payment default,"
S&P said.
"Captain Bidco SAS, owned by private equity funds affiliated with
Apollo, is a holding company that acquired the French engineering
steel producer Ascometal SAS from the Luccini group in October
2011. The company funded the acquisition with EUR48 million of
equity, a EUR72 million deeply subordinated shareholder loan, and
a EUR300 million senior secured bridge loan," S&P said.
"The 'B' rating reflects our view of the company's 'weak'
business risk profile and 'highly leveraged' financial risk
profile, according to our classifications. Our assessment of the
business risk profile as 'weak' is based on the high cyclicality
of the engineering steel industry, where volumes declined by
about 50% during the downturn in 2009. It is also based on the
company's high operating leverage, which led to volatile earnings
and negative EBITDA in 2009," S&P said.
"Our assessment of the financial risk profile as 'highly
leveraged' is based on high debt, including a EUR300 million
bridge loan (to be refinanced with the proposed bond),
shareholder loans of EUR72 million, and off-balance-sheet
liabilities of about EUR100 million, such as pensions and trade
receivables sold. Another constraining factor is the company's
substantial and volatile working capital needs. We base our
assessment on the nonconsolidated accounts of Captain Bidco SAS
and the main operating company Ascometal SAS. We understand that
no material debt lies within its minor subsidiaries, essentially
distribution companies that are not consolidated in these
accounts," S&P said.
The stable outlook balances S&P's view of:
* A likely deterioration of Captain Bidco SAS's profits and
financial metrics in 2012 due to a weaker market environment;
and
* The group's "adequate" liquidity and long-term maturity
profile, with limited refinancing risks for several years.
LAFARGE SA: S&P Affirms 'BB+/B' Corporate Credit Ratings
--------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on France-
based building materials group Lafarge S.A. to negative from
stable. "At the same time, we affirmed the 'BB+' long-term and
'B' short-term corporate credit ratings on the group," S&P said.
"The outlook revision reflects our view that there is a risk that
Lafarge may not be able to improve its credit metrics in 2012,
from the very weak levels at the end of 2011. Standard & Poor's-
adjusted funds from operations (FFO) to debt at year-end 2011 was
just 12%, which falls short of the high-teens percentage that we
consider commensurate with the 'BB+' rating," S&P said.
"The group's earnings declined in 2011, due to a difficult
operating environment that saw significant cost inflation, weak
pricing, unfavorable foreign exchange movements, and demand
hampered by political unrest, coupled with the divestment of its
profitable Gypsum division. Despite EUR2.2 billion of divestments
in 2011, this proved insufficient to offset a significant
reduction in adjusted cash flow over the year," S&P said.
"The ratings on Lafarge reflect our assessment of Lafarge's
'strong' business risk profile and 'aggressive' financial risk
profile. While we view the divestment of the Gypsum divisions as
reducing the group's product and end-market diversity to some
extent, we continue to classify Lafarge's business risk profile
as 'strong', reflecting our view of the company's large scale;
leading global positions in cement, aggregates, and concrete; and
its considerable geographic diversity," S&P said.
"The approximately EUR9.9 billion senior unsecured notes issued
by Lafarge S.A. are rated 'BB+', at the same level as the
corporate credit rating. The recovery rating on these notes is
'3', indicating our expectation of meaningful (50%-70%) recovery
for noteholders in the event of payment default. The notes are
not guaranteed by any subsidiaries," S&P said.
"In our hypothetical default scenario, we assume payment default
will occur in 2017, when Lafarge will face large debt maturities.
In evaluating recovery prospects, Standard & Poor's believes that
the business would retain value as a going concern in the event
of bankruptcy, based on Lafarge's strong market positions and
broad geographic and customer diversity," S&P said.
"Furthermore, under our criteria, the recovery rating on the
notes is subject to a rating cap. These criteria state that the
recovery ratings on unsecured debt issued by corporate entities
with corporate credit ratings of 'BB-' or higher are generally
capped at '3' to account for the risk that the recovery prospects
are at greater risk of being impaired by the issuance of
additional priority or pari passu debt prior to default," S&P
said.
"The negative outlook reflects the risk that we could lower the
ratings on Lafarge by one notch, should the group fail to recover
its credit metrics in 2012 to levels we consider commensurate
with a 'BB+' rating. These levels include adjusted FFO to debt in
the high teens and adjusted debt to EBITDA of close to 4x," S&P
said.
"We could lower the ratings on Lafarge if we no longer believe
that the group's credit ratios will improve meaningfully for the
full-year 2012. Such a scenario could occur if, in the absence of
a rebound in profitability, the group is not able to make
significant divestments, or if cash outflows are higher than we
anticipate, for example, through increased capex or
acquisitions," S&P said.
"We could revise the outlook to stable if the group's credit
metrics recover, on a sustainable basis, toward the levels we
consider commensurate with the 'BB+' rating in 2012. Such an
improvement could be fueled by a substantial reduction in net
debt through divestments, or a more rapid recovery in the group's
main markets than we forecast," S&P said.
* Founder of Scandal-Marred Breast Implant Maker Jailed
-------------------------------------------------------
Dow Jones' DBR Small Cap reports that the founder of a French
company that made faulty breast implants sold across the world
was jailed after failing to pay bail, his lawyer said.
=============
G E R M A N Y
=============
DECO 15: S&P Lowers Rating on Class F Notes to 'CCC'
----------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
DECO 15 - Pan Europe 6 Ltd.'s class C, D, E, and F notes. "At the
same time, we have affirmed our ratings on the class A1, A2, A3,
B, and G notes," S&P said.
DECO 15 - Pan Europe 6 closed in 2007 and is currently backed by
nine loans (down from 10 at closing) secured against commercial
properties in Germany, Austria, and Switzerland. The legal final
maturity date of the notes is in April 2018.
"The downgrades reflect primarily our view that the likelihood of
full principal recovery on the Main, Mansford, and Plus Retail
loans has deteriorated. The affirmations of the ratings on the
senior classes of notes reflect the continued stable performance
of the Centro loan, the largest loan in the transaction. We
discuss these loans in further detail," S&P said.
Centro (57% of the Pool)
The Centro loan is secured by a super regional shopping center in
Oberhausen, Germany. Net operating income at the property has
steadily improved since closing--increasing to EUR54.9 million
from EUR46.8 million as of the October interest payment date.
Additionally, occupancy has been stable at approximately 95%
since closing. The most recent market valuation (in 2010) reports
a value of EUR1.15 billion -- reflecting a securitized loan-to-
value (LTV) of 62%. Since then, the center has been expanded to
include an additional 16,000 square meters. This extension, to be
completed in October 2012, will include the addition of anchor
tenant, Peek & Cloppenburg.
"The Centro loan has demonstrated stable performance since
closing and will further benefit from the expansion, scheduled
for completion this year, in our view. We do not anticipate
losses on this loan," S&P said.
Main (6.5% of the Pool)
The Main loan is secured by 32 local supermarkets throughout
Germany. The loan failed to repay at maturity in July 2011 and
entered special servicing. On the October interest payment date,
special servicing fees associated with the Main loan caused
interest shortfalls on the class G notes.
Although the Main loan maintains strong coverage with a reported
interest coverage ratio of 2.79x, net operating income has been
declining since closing along with occupancy. Additionally, the
October 2011 reported market valuation of the portfolio is
EUR55.3 million -- about a 45% market-value decline from the
closing valuation of EUR101 million. The LTV ratio, at 146%, is
now well over 100%.
"We note that 22% of the loan's income is scheduled to expire in
the next two years. While we would give credit to this space
being relet in the medium- to long term, we consider that the
specter of expiry is likely to have an additional negative impact
on recoveries in the near term. Additionally, many of the
properties are in tertiary markets (well outside of big cities),"
S&P said.
"Market reports and discussions with servicers in general suggest
to us that there could be limited investor demand for standalone
local supermarkets in these markets," S&P said.
"The portfolio's deteriorating performance since closing, the
risk of upcoming lease turnover, the location of the properties,
and the recent reported LTV ratio suggest to us that the loan
will suffer principal losses," S&P said.
"We have considered whether the recent valuation could lead to
interest shortfalls on the notes because the appraisal reduction
mechanism has now been triggered. The effect of this, in this
transaction, is that the amount that can be drawn under the
liquidity facility on any loan interest payment date has been
reduced. However, the loan's interest coverage ratio is 2.79x.
Therefore, we do not anticipate the need for liquidity drawings
to make interest payments under the loan in the near term," S&P
said.
Mansford (12% of the Pool)
The Mansford loan is secured by 10 retail properties leased to a
single tenant, the DIY retailer OBI.
"The portfolio benefits from a long-term lease to OBI with a
weighted-average lease term of 10.6 years. In our view however,
single tenant exposure can bring volatility to cash flow, when
compared with properties supported by multiple tenants. In this
context, we have considered a scenario where the tenant defaults
during the loan term. In such a scenario, swap breakage costs
would likely depress the recoveries available to noteholders from
a default and potential enforcement," S&P said.
"Both market-value declines in general, and the single-tenant
risk in this transaction in particular could adversely affect the
price investors are willing to pay for the properties--even if
the loan does not default during the term. Taking these factors
into account, we consider that there remains a risk that this
loan will suffer principal losses," S&P said.
Plus Retail (1% of the Pool)
The Plus Retail loan is secured by five secondary retail
properties occupied by the supermarket chain, Plus. The loan
failed to repay at maturity in January 2012 and was transferred
to special servicing.
The most recent market valuation of the properties indicates that
the portfolio's value has declined to EUR7.92 million from
EUR14.2 million in 2007--reflecting an LTV ratio of well above
100% at 152%.
"Although the portfolio has a 1.22x interest coverage ratio and a
weighted-average loan term of six years, net operating income has
declined since closing, and demand for such property types
appears to be limited. Therefore, we do not envision that the
loan will fully repay," S&P said.
"Not only do we believe that this loan will cause principal
losses on the notes, we expect special servicing fees associated
with this loan to contribute to interest shortfalls on the class
G notes on the next interest payment date," S&P said.
Other Loans (23.5% of the Pool)
"The four other loans in the transaction, composing 23.5% of the
outstanding balance, are secured by assets in Germany,
Switzerland, and Austria. While we note that these loans are
highly leveraged, we do not expect them to contribute to note
principal losses in the near term," S&P said.
Rating Actions
"We have affirmed our 'A+ (sf)' ratings on the class A1, A2, and,
A3 notes, and our 'A- (sf)' rating on the class B notes. We have
also affirmed our 'D (sf)' rating on the class G notes. Our
ratings on the class A1, A2, and A3 notes remain constrained by
our rating on Deutsche Bank AG (A+/Negative/A-1), the account
bank for this transaction," S&P said.
"We have lowered our ratings on the class C, D, E, and F notes,
to reflect our view that the Main, Mansford, and Plus Retail
loans have become less likely to fully repay," S&P said. More
particularly:
* "Based on our estimation of potential losses, we consider that
the class E, F, and G notes could suffer principal losses.
Accordingly we have lowered to 'B- (sf)' from 'B+ (sf)' our
rating on the class E notes," S&P said.
* "We consider that the class F and G notes are likely to incur
near-term principal losses and that the class G notes will
continue to suffer interest shortfalls as a result of the
special servicing fees associated with the Main and Plus
Retail loans. Accordingly, we have lowered to 'CCC (sf)' from
'B+ (sf)' our rating on the class F notes. We have also
affirmed our rating on the class G notes, which were already
rated 'D (sf)'," S&P said.
"We currently expect the class C and D notes to fully repay.
However, in our view, their relative creditworthiness has
deteriorated. Accordingly, we have lowered our ratings on these
classes of notes to 'BB (sf)' from 'BB+ (sf)' and 'B (sf)' from
'BB- (sf)'," S&P said.
Potential Effects of Proposed Criteria Changes
"We have the taken rating actions based on our criteria for
rating European commercial mortgage-backed securities (CMBS).
However, these criteria are under review," 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," S&P said.
Standard & Poor's 17g-7 Disclosure Report
Sec Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com
Ratings List
DECO 15 - Pan Europe 6 Ltd.
EUR1.445 Billion Commercial Mortgage-Backed Floating-Rate Notes
Class Rating
To From
Ratings Lowered
C BB (sf) BB+ (sf)
D B (sf) BB-(sf)
E B- (sf) B+ (sf)
F CCC (sf) B+ (sf)
Ratings Affirmed
A1 A+ (sf)
A2 A+ (sf)
A3 A+ (sf)
B A- (sf)
G D (sf)
KLEOPATRA LUX: S&P Cuts Corp. Credit Rating to 'CC'; Outlook Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on German packaging manufacturer
Kleopatra Lux 1 S.a.r.l (known as Kloeckner Pentaplast) to 'CC'
from 'CCC-'. The outlook is negative.
"The downgrade reflects our view that there is a heightened risk
that Kloeckner Pentaplast will implement a debt restructuring in
the near term. Such debt restructuring constitutes an event of
default under our criteria," S&P said.
"The group breached its financial covenants on the Dec. 31, 2011,
test date, and we understand that owner Blackstone Group
International Ltd. (Blackstone) did not choose to solve the
breach with an equity cure. Since the group has obtained waivers
from its lenders for the December 2011 and March 2012 tests, the
latest breach does not constitute an event of default.
Nevertheless, we believe that there is a substantial risk that
the group will breach its financial covenants from June 2012
onward as test levels tighten further, unless a debt
restructuring (and therefore a covenant reset) is implemented. We
also understand that negotiations have intensified between the
group's stakeholders regarding potential debt restructuring
scenarios. We continue to believe that the group's capital
structure is highly leveraged and unsustainable over the near
term," S&P said.
"Market conditions were more difficult than Kloeckner Pentaplast
expected in 2011, particularly in the first half of the year. The
group's operating margins deteriorated due to major increases in
input costs--specifically, for polyethylene terephthalate (PET)--
and energy costs. Margins have also been adversely affected by
ongoing restructuring activities across the group's European
operations. The strengthening of the U.S. dollar and a
significant working capital outflow in the quarter to Dec. 31,
2011, placed additional pressure on covenants," S&P said.
"We could lower the rating to 'SD' (Selective Default) on an
announcement of a debt restructuring, which we consider likely in
the near term," S&P said.
"Following a debt restructuring, the 'SD' rating would no longer
be applicable, and we would raise it as expeditiously as possible
after completing a forward-looking review. This review would take
into account any benefits realized from the restructuring, as
well as any other interim developments," S&P said.
===========
G R E E C E
===========
GLITNIR BANK: To Pay EUR635 Million to Priority Creditors Today
---------------------------------------------------------------
Omar R. Valdimarsson at Bloomberg News reports that the winding-
up board of failed Icelandic lender Glitnir Bank hf said it will
pay priority creditors EUR635 million (US$828 million) today,
March 16.
According to The Telegraph's Jonathan Russell, the cash will be
paid into escrow accounts before being distributed to creditors
-- the majority of which are understood to be UK councils.
When the Icelandic banks were nationalized in 2008, they held
nearly GBP1 billion on deposit for UK councils, the Telegraph
recounts. Although some of the cash has been returned, this is
the first time Glitnir has paid up, the Telegraph notes. Today,
it is expected to take the first step towards paying 53 councils
and public bodies EUR290 million, the Telegraph discloses.
The councils to be paid are understood to include Kent County
Council, which had GBP15 million on deposit with Glitnir when it
collapsed, and Cherwell District Council, which had GBP6.5
million, the Telegraph relates. Councils from Nottingham, Dorset
and Norfolk have also been linked to the Icelandic bank, the
Telegraph states. The councils placed their money in Iceland due
to the higher rates of interest the banks were offering, the
Telegraph recounts.
The sum to be distributed by Glitnir represents 21% of the total
deposited in Iceland by councils, the Telegraph notes.
The payout only came after courts in Iceland awarded the councils
"preferred creditor" status, ranking them higher than bondholders
in the pecking order for repayment, the Telegraph relates.
Glitnir, as cited by the Telegraph, said that the repayments to
escrow accounts would be followed by monthly payments to
creditors.
About Glitnir Banki
Headquartered in Reykjavik, Iceland, Glitnir banki hf --
http://www.glitnir.is/-- offers an array of financial services
to corporation, financial institutions, investors and
individuals.
Judge Stuart Bernstein of the U.S. Bankruptcy Court for
the Southern District Court of New York granted Glitnir
permission to enter into a proceeding under Chapter 15 of the
U.S. bankruptcy code on January 6, 2008
=============
I R E L A N D
=============
EIRCOM GROUP: Managers Back Debt Restructuring Plan
---------------------------------------------------
Donal O'Donovan at Irish Independent reports that Eircom Group's
managers have backed a plan to wipe out as much as EUR1.7 billion
of debt and hand control of the company to top lenders. The deal
means the long running Eircom debt crisis is finally nearing a
close, Irish Independent says.
According to Irish Independent, the company said it had rejected
takeover bids submitted by last Monday's deadline for offers.
Instead, ownership is set to be handed over to its lenders
following a last-minute deal agreed in London on Wednesday, Irish
Independent notes.
Current owners STT and an employee shareholder trust will be
wiped out under the plan, Irish Independent discloses. However,
Eircom's current management is expected to be handed a share of
the business under the new deal, Irish Independent states.
Eircom's top "first lien" lenders will take control of the
company under the plan, Irish Independent notes.
According to Irish Independent, in exchange they will write off
15% of the EUR2.4 billion they are owed.
Lower ranked "second lien" lenders will be paid a EUR35 million
consent fee for agreeing to cancel EUR350 million they are owed
under the deal -- or 10c in the euro, Irish Independent
discloses.
Headquartered in Dublin, Ireland, Eircom Group --
http://www.eircom.ie/-- is an Irish telecommunications company,
and former state-owned incumbent. It is currently the largest
telecommunications operator in the Republic of Ireland and
operates primarily on the island of Ireland, with a point of
presence in Great Britain.
QUINN GROUP: Anglo Fails to Identify Creditors
----------------------------------------------
Laura Noonan at Irish Independent reports that Irish Bank
Resolution Corporation still hasn't uncovered the beneficial
owners of two foreign companies claiming to be owed more than
EUR115 million by the Quinn international property empire --
despite securing court orders to reveal the companies' ownership
more than two months ago.
According to Irish Independent, sources on Wednesday night
admitted that while the former Anglo Irish Bank had "made some
progress" in enforcing the court orders, the process had not yet
yielded the owners' identities because of the complex nature of
the ownership structures.
At this point, there is significant uncertainty about whether the
legal orders will ever reveal the ultimate owners of Belize-based
Galfis, which has a US$100 million (EUR77 million) claim against
a Russian Quinn-owned company, and Lyndhurst, a British Virgin
Islands-registered entity that claims to be owed EUR42.5 million
by a Ukranian Quinn-owned firm, Irish Independent notes.
But the bank is understood to be hopeful that imminent court
hearings in Dublin and Belfast might shed more light on the
ownership of the two firms and the legitimacy of their claims
against the Quinns' EUR500 million international property empire,
Irish Independent says.
Those two cases are part of an intensive fortnight of litigation
between the bank and the family of Sean Quinn, Irish Independent
notes.
As reported by the Troubled Company Reporter-Europe on Sept. 15,
2011, Irish Examiner related that the Quinn family began legal
proceedings against Anglo earlier in 2011 in which they
challenged the appointment of the receiver appointed over their
shares in some of the Quinn Group companies in Ireland. They
were also taking action in Cyprus challenging Anglo's appointment
of a receiver over shares in a number of Cypriot companies, Irish
Examiner noted.
The Quinn Group -- http://www.quinn-group.com/-- is a business
group headquartered in Derrylin, County Fermanagh, Northern
Ireland. The privately owned group has ventured into cement and
concrete products, container glass, general insurance, radiators,
plastics, hotels and real estate.
=====================
N E T H E R L A N D S
=====================
HARBOURMASTER CLO: Fitch Cuts Rating on Four Note Classes to 'B-'
-----------------------------------------------------------------
Fitch Ratings has downgraded four classes and affirmed seven
classes of Harbourmaster CLO 5 B.V.'s notes, as follows:
-- Class A1 (XS0223502005): affirmed at 'AAAsf'; Outlook Stable
-- Class A2E (XS0223490235): downgraded to 'Asf' from 'AAsf';
Negative Outlook
-- Class A2F (XS0223502856): downgraded to 'Asf' from 'AAsf';
Negative Outlook
-- Class A3 (XS0223503078): affirmed at 'BBBsf'; Outlook
Negative
-- Class A4E (XS0223503151): affirmed at 'BBsf'; Outlook
Negative
-- Class A4F (XS0223503581): affirmed at 'BBsf'; Outlook
Negative
-- Class B1E (XS0223503664): downgraded to 'B-sf' from 'B+sf';
Outlook Negative
-- Class B1F (XS0223503748): downgraded to 'B-sf' from 'B+sf';
Outlook Negative
-- Class B2E (XS0223503821): affirmed at 'B-sf'; Outlook
Negative
-- Class B2F (XS0223504043): affirmed at 'B-sf'; Outlook
Negative
-- Class S1 Combo (XS0223504472): affirmed at 'Bsf'; Outlook
Negative
The rating actions reflect levels of credit enhancement (CE)
commensurate with their respective ratings. The rating of the
class S1 combination notes has been affirmed in line with the
affirmation of its rated component notes.
Since the last review in April 2011, the portfolio's credit
quality has deteriorated. There is currently one defaulted asset
in the portfolio, making up 1.8% of the portfolio. The reported
'CCC' and below bucket including defaults has increased to 18.3%
of the portfolio from 9.9%.
Since the last review, the transaction has delevered further with
the class A1 notes being paid down to 60.4% from 98.6% of their
original balance. This has contributed to an increase in CE for
the notes, which has mitigated the deterioration in the portfolio
credit quality. However, the agency believes this was
insufficient to maintain classes A2E and A2F (together, Class
A2), and B1E and B1F (together, Class B1) at their previous
ratings, and hence has downgraded these notes.
Despite the relatively high level of 'CCC' assets in the
portfolio, the reported over-collateralization (OC) tests are
passing. This is largely because the OC tests, other than the
Class A2 OC test, mark all 'CCC' assets at par. There has been
very limited trading of assets since the last review. The
reinvestment period ended in September 2010 but unscheduled
proceeds can be reinvested until September 2012 subject to
certain conditions.
The Negative Outlooks on the mezzanine and junior notes reflect
their vulnerability to a clustering of defaults and negative
rating migration in the European leveraged loan market due to the
approaching refinancing wall.
HARBOURMASTER CLO: Fitch Cuts Ratings on Two Note Classes to 'B-'
-----------------------------------------------------------------
Fitch Ratings has downgraded two classes and affirmed eight
classes of Harbourmaster CLO 4 B.V.'s notes, as follows:
-- Class A1 (XS0203060339): affirmed at 'AAAsf'; Outlook Stable
-- Class A2E (XS0203060925): affirmed at 'AAsf'; Outlook Stable
-- Class A2F (XS0203061063): affirmed at 'AAsf'; Outlook Stable
-- Class A3 (XS0203061493): affirmed at 'BBBsf'; Outlook
Negative
-- Class A4 (XS0203061659): affirmed at 'BBsf'; Outlook
Negative
-- Class B1 (XS0203061907): downgraded to 'B-sf' from 'B+sf';
Outlook Negative
-- Class B2E (XS0203062467): affirmed at 'B-sf'; Outlook
Negative
-- Class B2F (XS0203063945): affirmed at 'B-sf'; Outlook
Negative
-- Class S1 Combo (XS0203066294): affirmed at 'AA+sf'; Outlook
Negative
-- Class S2 Combo (XS0203066534): downgraded to 'B-sf' from
'Bsf'; Outlook Negative
The rating actions on the notes reflect levels of credit
enhancement (CE) commensurate with their respective ratings. The
class S1 combination notes have been affirmed in line with the
affirmation of its rated component notes. The class S2
combination notes have been downgraded in line with the downgrade
of one of its rated component notes.
Since the last review in April 2011, the portfolio's credit
quality has deteriorated. There are currently two defaulted
assets in the portfolio, making up 5.5% of the portfolio. The
reported 'CCC' and below bucket including defaults has increased
to 24% of the portfolio from 18.6%.
Since the last review, the transaction has delevered further with
the class A1 notes being paid down to 47% from 69% of their
original balance. This has contributed to an increase in CE for
the notes, which has mitigated the deterioration in the portfolio
credit quality. However, the agency believes this is
insufficient to maintain the Class B1 notes at their previous
rating, and has downgraded the notes to 'B-sf' from 'B+sf'.
Despite the relatively high level of 'CCC' assets in the
portfolio, the reported over-collateralization (OC) tests are
passing. This is largely because the OC tests, other than the
Class A2 OC test, mark all 'CCC' assets at par. There has been
very limited trading of assets since the last review. The
reinvestment period ended in January 2010 and unscheduled
proceeds could be reinvested until January 2012 subject to
certain conditions.
The Negative Outlooks on the mezzanine and junior notes reflect
their vulnerability to a clustering of defaults and negative
rating migration in the European leveraged loan market due to the
approaching refinancing wall.
HARBOURMASTER CLO: S&P Observes Increase in 'CCC-' Rated Assets
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Harbourmaster CLO 10 B.V.'s class A1 and A2 notes. "At the same
time, we have affirmed our rating on the class X notes," S&P
said.
"The rating actions follow our assessment of the transaction's
performance, and the application of our relevant criteria for
transactions of this type," S&P said.
"For our review of the transaction's performance, we used data
from the trustee report (dated Jan. 26, 2012), in addition to our
cash flow analysis. We have taken into account recent
developments in the transaction, and have applied our 2010
counterparty criteria, as well as our cash flow criteria," S&P
said.
"From our analysis, we have observed a decline in the proportion
of defaulted assets (rated 'CC', 'SD' [selective default], and
'D') in the collateral pool, and an increase in the proportion of
assets that we consider to be rated in the 'CCC' category
('CCC+', 'CCC', and 'CCC-'), since we last reviewed this
transaction," S&P said.
"We have also noted an increase in the weighted-average spread
earned on Harbourmaster CLO 10's collateral pool, and an increase
in the par coverage test results for all classes of notes since
our last review," S&P said.
"We subjected the capital structure to a cash flow analysis in
order to determine the break-even default rate. In our analysis,
we used the reported portfolio balance that we consider to be
performing, the principal cash balance, the current weighted-
average spread, and the weighted-average recovery rates that we
considered to be appropriate. We incorporated various cash flow
stress scenarios using various default patterns, levels, and
timings for each liability rating category, in conjunction with
different interest rate stress scenarios," S&P said.
"Taking into account our credit and cash flow analyses and our
2010 counterparty criteria, we consider the credit enhancement
available to the class A1 and A2 notes in this transaction to be
commensurate with higher ratings. On the other hand, we consider
the credit enhancement available to the class X note to be
commensurate with the current rating," S&P said.
"We have analyzed the derivative counterparties' exposure to the
transaction under scenarios where the counterparty failed to
perform. We have concluded that the derivative exposure is
currently sufficiently limited so as not to affect the ratings
assigned," S&P said.
"Harbourmaster CLO 10 is a cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms," S&P said.
Standard & Poor's 17g-7 Disclosure Report
Sec Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com
Ratings List
Class Rating
To From
Harbourmaster CLO 10 B.V.
EUR495.8 Million Floating-Rate Notes
Ratings Raised
A1 AAA (sf) AA+ (sf)
A2 AA- (sf) A+ (sf)
Rating Affirmed
X AAA (sf)
===========
R U S S I A
===========
OGK-1 JSC: Moody's Withdraws 'Ba3' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service has withdrawn the Ba3 corporate family
rating (CFR) and Ba3 probability of default rating (PDR) of JSC
OGK-1, a Russian thermal electricity generator.
Ratings Rationale
Moody's has withdrawn the rating for its own business reasons.
Moody's notes that OGK-1 has no debt rated by Moody's.
Headquartered in Moscow, JSC OGK-1 is one of six wholesale
thermal power generation companies in Russia. The company is
majority owned by JSC INTER RAO UES ("INTER RAO"), which is
ultimately controlled by the state. OGK-1's 2010 revenues were
RUB56.8 billion (US$1.9 billion).
=========
S P A I N
=========
REPSOL INT'L: Moody's Downgrades Preferred Stock Rating to 'Ba1'
----------------------------------------------------------------
Moody's Investors Service has downgraded the long-term issuer
rating of Repsol YPF S.A. and the senior unsecured debt ratings
of Repsol International Finance B.V. to Baa2 from Baa1. Moody's
has also downgraded the preferred stock rating of Repsol
International Capital Limited to Ba1 from Baa3. The Prime-2
commercial paper and short-term ratings are affirmed. The rating
outlook is stable.
Ratings Rationale
The rating downgrade reflects the marked increase in indebtedness
and deterioration in financial metrics reported by Repsol in 2011
as a result of the group's weaker than expected operating
performance in parallel with a significant increase in
investments required to finance key growth projects.
While recognizing the non-recurring nature of some of the
factors, which constrained the group's operating cash flow
generation in 2011, Moody's believes that in the context of the
sizeable capital expenditure program undertaken by the group to
enhance its upstream reserve base and production profile, Repsol
will be particularly challenged to cut debt in the next 2-3
years, beyond the reduction expected to result from the
divestment and/or the use through a scrip dividend, of the stake
in its own shares acquired from Sacyr in December 2011.
In 2011, despite higher oil and gas realization prices benefiting
upstream activities and an increased contribution from the LNG
business, Repsol's operating profitability and cash flow
generation have been constrained by a number of factors. These
included the loss of hydrocarbon production due to civil unrest
in Libya but also labor strikes at 57%-owned YPF Sociedad Anonima
("YPF", Ba2 review for downgrade), a significant squeeze on
refining margins reflecting the very challenging operating
environment prevailing in Europe, as well as the effect on YPF's
results of heightened cost inflation in Argentina and the
suspension of the Petroleo Plus subsidy.
Combined with a significant increase in investments, which were
24% higher than in the previous year (excluding Gas Natural
Fenosa), and the acquisition of a 10% stake in its own shares
from Sacyr, this resulted in a marked increase in Repsol's
indebtedness, despite the further reduction of the group's
interest in YPF to 57.4% from 79.8%, which raised EUR1.9 billion
(excluding a EUR438 million vendor loan granted to Grupo
Petersen) during 2011. Based on the group's recent earnings
announcement, Moody's estimates that Retained Cash Flow to Net
Debt (based on the equity accounting of Gas Natural) has declined
to 18% (pro-forma the placement of a 5% stake in own shares
completed in January 2012) v. 33% in 2010.
At the same time, Moody's acknowledges the progress made by
Repsol in recent years in enhancing its hydrocarbon resource base
(mainly through exploration discoveries) and developing a
pipeline of upstream projects, which should allow the group to
meet its medium and long-term production growth targets. Moody's
also notes the improvement in reinvestment risk factors (e.g.
reserve replacement rates, finding and development costs)
reported by Repsol's core upstream business as well as, to a
lesser extent, by YPF in recent years.
Looking ahead, Moody's expects that Repsol's cash flow generation
will benefit in the near term from the resumption of production
in Libya and start-ups such as Margarita in Bolivia and Kinteroni
in Peru. The recent expansion of the group's conversion capacity
in Spain, should also give a fillip to Repsol's refining margins
and help mitigate the pressures weighing on its downstream
business in the context of the challenging operating conditions
affecting the European refining sector and the weakening Spanish
economy. However, free cash flow generation is likely to remain
constrained by the high investments required to convert into
reserves and bring to market the significant resources added to
the group's portfolio in the past few years. In addition, the
increased government interference and pressure faced by YPF to
boost production and investment in Argentina may restrain
Repsol's ability to upstream dividends from its 57%-owned
subsidiary in the future. Moody's believes that all these factors
will combine to limit Repsol's capacity to reduce debt in the
next 2-3 years and restrain the pace of any recovery in its
credit metrics.
The stable outlook reflects Moody's expectation that Repsol's
future operating cash flow generation will improve against 2011,
underpinned by a return to more normalized production levels in
Libya, the positive effect of the capacity upgrade on the group's
refining margins and the continuing delivery of its major
upstream projects. In turn, this should help Repsol return to
positive net cash flow (post divestments) and strengthen its
credit metrics relative to the 2011 year-end, including Retained
Cash Flow to Net Debt (based on the equity accounting of Gas
Natural) of around 30% on a three-year average basis.
Moody's would consider downgrading Repsol's rating further in the
event that renewed weakness in financial performance and/or any
major delay/setback in the execution of key growth projects (i)
result in further negative cash flow and leave the group's credit
metrics weakly positioned for a sustained period of time
including Retained Cash Flow to Net Debt (based on the equity
accounting of Gas Natural) below 25% on average through-the-cycle
and (ii) prevent Repsol from maintaining operating metrics in
line with the Baa2 rating including a reserve replacement ratio
consistently in excess of 100%.
Conversely, while unlikely at this juncture, upward pressure may
develop on Repsol's rating should the successful execution of the
group's upstream growth projects lead to some substantial
improvement in cash flow generation allowing some meaningful
deleveraging and marked strengthening in financial metrics,
including Retained Cash Flow to Net Debt (based on the equity
accounting of Gas Natural) consistently above 35%.
The principal methodology used in rating Repsol YPF S.A. was the
Global Integrated Oil & Gas Industry Methodology published in
November 2009.
Headquartered in Madrid, Spain, Repsol YPF, is a major integrated
oil and gas company with consolidated total proved hydrocarbon
reserves of 2.1 billion barrels of oil equivalent and a strong
downstream presence in the Iberian peninsular. In 2011, the group
reported consolidated operating revenue of EUR63.7 billion and
hydrocarbon production of 290 million barrels of oil equivalent
(including YPF's contribution of 181 million boe).
=============
U K R A I N E
=============
UKRSIBBANK: Fitch Assigns 'B+' Rating Senior Unsecured Bonds
------------------------------------------------------------
Fitch Ratings has assigned Public Joint Stock Company
UkrSibbank's (USB) senior unsecured bonds, including series I and
series J for UAH500 million each, a Long-term local currency
rating of 'B+', a Recovery Rating of 'RR4' and a National Long-
term rating of 'AAA(ukr)'.
Both issues mature in March 2015 with a put option after the
first and the second year of circulation. The bonds bear a 17%
interest rate for the first year period starting from 15 March
2012.
The bank's obligations under all issues will rank at least
equally with the claims of USB's other senior unsecured
creditors, except those preferred by relevant legislation. Under
Ukrainian law, retail depositors' claims rank above those of
other senior unsecured creditors. At end-2011, retail deposits
accounted for 36% of USB's total liabilities, according to the
bank's local GAAP accounts.
USB was ranked ninth by assets in the country at end-2011. The
bank's IDRs and National Rating reflect the support it may
receive if needed from its majority shareholder, BNP Paribas
('A+'/Stable), which holds 84.99% stake in USB. Another 15% is
controlled by EBRD.
===========================
U N I T E D K I N G D O M
===========================
CPP MANUFACTURING: Owed GBP18 Million at Time of Collapse
---------------------------------------------------------
Graeme Brown at Birmingham Post reports that CPP (Manufacturing)
collapsed owing more than GBP18 million.
According to Birmingham Post, an administrators' report into CPP
(Manufacturing) -- which last year revealed plans to build Spyker
supercars in Coventry, before failing to finalize the deal --
shows GBP14.2 million was owed to 225 unsecured creditors when it
collapsed.
The report reveals the company spent more than GBP6 million on
Italian car design house Zagato -- which last week revealed a new
V12 car in partnership with Aston Martin -- and owed more than
GBP1.1 million to HM Revenue and Customs, Birmingham Post
discloses.
The report reveals that deal, concluded on January 10 by joint
administrators Andrew Andronikou and John Whitfield of UHY Hacker
Young, was worth GBP350,000, and included goodwill and machinery
but not the Zagato license or Spyker assets, Birmingham Post
notes.
The report reveals administrators were called in because there
were insufficient funds to finance overheads, Birmingham Post
relates. According to Birmingham Post, It states: "In
particular, it was uncertain whether the company's customers
would continue to trade and provide the necessary cash flow
support during the administration period.
"The directors had liaised with certain of its customer base who
had expressed concerns over the future of the business. Following
such discussions, certain customers refused to pay their debts
until such time there was certainty of the business trading
forward."
The report reveals CPP, which specializes in body panels and
prototype cars, also owes almost GBP2 million to leasing firm LKB
Lizings and GBP1.86 million is outstanding to Banco
Trasatlantico, Birmingham Post notes.
CPP (Manufacturing) specializes in the prototyping and niche
volume manufacture of vehicles and components.
DARLINGON FC: To Draw Up CVA Proposal to Exit Administration
------------------------------------------------------------
Joe Willis at The Northern Echo reports that Darlingon FC has
taken the first step towards exiting administration and securing
a future as a community club.
Administrator Harvey Madden on Tuesday met creditors to pave the
way for a company voluntary arrangement (CVA) to be put in place,
the Northern Echo relates.
Darlington FC 1883 Ltd. will now make a CVA proposal which must
be approved by 75% of the non-footballing creditors, the Northern
Echo discloses.
The club could then be taken out of administration following a
28-day cooling off period and the settling of footballing debts,
the Northern Echo notes.
Stephen Weeks, from Darlington FC 1883 Ltd, confirmed talks were
ongoing to draw up a CVA proposal, the Northern Echo relates.
According to the Northern Echo, he added: "Darlington FC 1883
Ltd. is in ongoing discussions with our advisor, legal team, the
administrator and our creditors, to establish a clear timetable
for reaching a company voluntary arrangement and taking the club
out of administration.
"We're working hard to move this forward as fast as possible and
will keep the public updated with progress as and when it is
made."
As reported in the Troubled Company Reporter-Europe on Jan. 6,
2012, Business Sale said Darlington Football Club has been placed
into administration after a consortium of local businessmen was
unable to reach a buyout deal with the owner. The Blue Square
Bet Premier side had been the subject of a bid by a group calling
themselves the Darlington Football Club Rescue Group (DFCRG),
according to Business Sale. The report related that current
owner and chairman, Raj Singh, said he had been unable to settle
on a sustainable deal with the group and had called in
administrators.
GAME GROUP: OpCapita Makes Acquisition Offer
-------------------------------------------
Andrea Felsted at The Financial Times reports that private equity
group OpCapita made an offer to buy out Game Group's debt.
According to the FT, Game said that a third party -- known to be
OpCapita -- had "shown interest in providing additional funding
for the company."
The FT notes that the company said the third party "was seeking a
dialogue with the Group's current lenders; however, there is no
certainty to the outcome".
Several groups, including OpCapita, were circling Game as it
fought for survival, the FT discloses.
Hilco, the retail restructuring group, is also interested in
Game's international arm, including its assets in Spain and
Australia, the FT states.
Rothschild, appointed last month to advise the retailer on a
strategic review, including the possible sale of its European
business, has expanded its remit to look for a buyer for the
entire company, the FT recounts. The sale process for Game's
international assets continues, the FT notes.
If OpCapita can reach a deal with Game's lenders to provide
funding and meet suppliers' commitments, the company, which
employs 6,000 people in the UK and 10,000 globally, can continue
trading in its current form, the FT says.
If the private equity group can secure 100% of Game's debt, it
puts it in a strong position should Game be restructured through
a debt-for-equity swap at a later date, according to the FT.
As reported by the Troubled Company Reporter-Europe on March 13,
2012, The Financial Times related that Game Group warned on
Monday it was "uncertain" whether discussions with lenders and
suppliers would find a solution for the chain and that the stock
could be left worthless. The company said it was also exploring
alternative sources of funding and "reviewing the position of all
of its assets," adding that difficulties in securing new releases
from several suppliers had persisted, the FT disclosed. Several
suppliers, including EA and Nintendo, began holding back new
releases from Game last month, the FT recounted. Pressure has
been intensifying on the group since it was forced to renegotiate
its banking covenants earlier this year after poor sales over its
peak Christmas period, the FT noted. Game, the FT said, blamed a
lack of new console releases and poor consumer sentiment for a
near 13% fall in sales, and it has also faced growing competition
from online stores and supermarkets. Peter Smedley, retail
analyst at Charles Stanley Securities, said that "imminent"
collapse into administration "is now a real possibility", and
that Gamestop, the US specialist retailer, was the most likely
acquirer for Game's assets, according to the FT. In its first-
half results last July, Game Group reported net debt of GBP91
million, up from GBP63.5 million a year earlier, the FT
disclosed.
Game Group is a video games retailer. The company operates from
1,274 stores worldwide.
LINKAGE COMMUNITY: Plans to Slash Up to 350 Jobs
------------------------------------------------
thisislincolnshire.co.uk reports that Linkage Community Trust
announced it was cutting up to 350 jobs.
The Lincolnshire-based charity provides further education for
learning disabled students but has seen a major drop in referrals
since the responsibility for sending students to specialist
colleges was handed to local councils, the report relates.
thisislincolnshire.co.uk relates that a 90-day consultation into
the job cuts began on Friday and is expected to result in 176
full-time positions being lost through redundancies and a further
31 through non-renewal of vacant positions.
"I am deeply saddened that excellent staff who are committed to
young learning disabled people will lose their jobs, and that
young learning disabled people are being denied the opportunity
of experiencing the benefits of a Linkage further education," the
report quotes Linkage chairman Michael Oliver as saying.
"We must work with all concerned to find a way forward and we
would particularly like to meet with local authorities."
Lincolnshire-based Linkage Community Trust runs sites at Scremby
Grange and Toynton All Saints near Spilsby and Linkage Green at
Mablethorpe.
PORT VALE: Potential Buyers Must Submit Final Offers Next Week
--------------------------------------------------------------
This is Staffordshire reports that Port Vale's administrators
will tell potential buyers they want final offers for the club in
the next week.
According to This is Staffordshire, Gerald Krasner, who is one of
the club's three joint-administrators, says there is no time to
waste because the club, which is GBP3 million in debt, only has
enough money to stay in administration until the end of the
season. That's why he wants formal offers submitted in the next
few days from WaterWorld owner Mo Chaudry, Staffordshire firm
International Piping Products, a third, anonymous bidder and any
other interested parties, This is Staffordshire notes.
However, Mr. Krasner, who was administrator at Bourne-mouth and
is also a former chairman of Leeds United, has warned that any
offer has to be good enough to satisfy the club's creditors, This
is Staffordshire discloses.
He says if the club doesn't get out of administration by agreeing
a company voluntary arrangement -- in which people owed money
vote to accept the offer -- then Vale will suffer a further
points penalty from the Football League, according to This is
Staffordshire.
A CVA has to be approved by 75% of unsecured creditors, This is
Staffordshire says. That doesn't include Stoke-on-Trent City
Council, whose GBP1.8 million loan is secured on Vale Park, This
is Staffordshire notes.
Mr. Krasner wants to name a preferred bidder by April 10, This is
Staffordshire discloses. The administrators would then call a
meeting of creditors within 16 days and hope to get them to agree
a CVA, This is Staffordshire states.
Mr. Krasner says that, regardless of whose supporters want to buy
the club, the administrators have to take the highest offer,
according to This is Staffordshire.
The only stipulation is that a bidder must pass a fit and proper
person's test imposed by the Football League, This is
Staffordshire says.
PORT VALE: Two Local Buyers Show Interest in Buying Club
--------------------------------------------------------
guardian.co.uk reports that Port Vale's administrators have
revealed that two local businessmen have indicated they would be
interested in buying the cash-strapped club.
According to guardian.co.uk, Vale was placed into administration
last week and are looking for a buyer for the club to stave off
the threat of liquidation. They are reported to have debts of up
to GBP4 million, including GBP1.8 million owed to the city
council, the report discloses.
However, the debts has not put off interested parties and the
administrator, Bob Young, has revealed they have received plenty
of inquiries, the report says.
"We have had half a dozen parties ask for details and make
tentative inquiries. Of those I've had meetings with two," the
report quotes Mr. Young as saying. "One of those parties is a
group called The IPP Group [International Piping Products], a
Staffordshire-based group. The director of that company lives
local and his family, I'm told, are Port Vale fans, so that's
encouraging."
Another local businessman, Mo Chaudry, has been linked to a
takeover bid after he failed to buy 51% of the club last summer,
relays guardian.co.uk.
Port Vale F.C. is a football club based in Burslem,
Staffordshire.
RANGERS FOOTBALL: Murray to Step Aside if Bigger Bid Arises
-----------------------------------------------------------
Stephen Halliday and Stuart Bathgate at The Scotsman reports that
Paul Murray has revealed he will "step aside" from the battle to
save Rangers if any alternative bid for the club has greater
resources than his own and can guarantee a secure future for the
crisis-torn Scottish champions.
Today is the deadline set by administrators Duff and Phelps for
interested parties to formally lodge indicative offers for the
club, the Scotsman discloses. Former director Mr. Murray's Blue
Knights consortium, which has received support from all three
main Rangers supporters' groups and former manager Walter Smith,
have already confirmed they will lodge a bid, the Scotsman notes.
They face at least one rival offer, from Sale Sharks owner and
Edinburgh-born businessman Brian Kennedy, while the
administrators claimed last week to be aware of potential
interest from both the Far East and the United States, the
Scotsman states.
Mr. Murray, whose consortium includes London firm Ticketus, which
purchased GBP24 million worth of future season ticket sales from
discredited club owner Craig Whyte, remains confident his bid
offers Rangers a credible opportunity to avoid liquidation and
fund the recovery of the club, according the Scotsman. But he
told The Scotsman he would not attempt to stand in the way of any
other prospective buyer who showed they could bring superior
financial wherewithal to the table, the Scotsman relates.
Mr. Murray's takeover plan includes a new share issue for Rangers
which would be dependent on the administrators securing
Mr. Whyte's 85.3% holding in the club, purchased from Sir David
Murray for GBP1 last May, the Scotsman discloses.
"The administrators have to deliver Craig Whyte's shares," the
Scotsman quotes Mr. Murray. "They are confident of getting those
shares from him."
The looming verdict from the First Tier Tribunal on Rangers
appeal against an HMRC bill for Employee Benefit Trust payments,
with a potential GBP49 million liability, is a consideration in
any offer for the club, the Scotsman notes.
Mr. Murray, who sees the involvement of Ticketus in his Blue
Knights consortium as crucial from that perspective, still
envisages Rangers coming out of their insolvency event by way of
a Company Voluntary Arrangement with creditors, the Scotsman
states.
About Rangers Football Club
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.
TIME IT RETAIL: Workers Out of Pocket as Retail Chain Collapses
---------------------------------------------------------------
Ruth Lawson at Sunday Sun reports that angry staff have been left
thousands of pounds out of pocket after Time It Retail Ltd went
into liquidation.
Time It Retail Ltd, which had a temporary pop-up shop called Gift
Fuzion in the Metrocentre, has called it a day after it hit cash
flow problems, Sunday Sun relates.
According to the report, disgruntled workers from the Gateshead-
based store were left in the dark as to the company's situation
until last week when liquidators confirmed that they have been
called in to sort out the troubled finances.
Sunday Sun quotes a spokesman for liquidators Sharma & Co, as
saying that, "I can confirm that I have been instructed by the
directors of Time It Retail Limited, Time It Retail 2 Limited,
Time Retail 3 Limited and Retail Outlets (Holdings) Limited to
summon meetings of the companies members and creditors with the
intention of placing the companies into liquidation. Those
meetings are scheduled to be held on March 21."
"The companies employed approximately 340 employees across the
various stores. All known employees have been written to and
provided with the appropriate forms to allow them to claim the
monies they are owed, which I understand relates primarily to
wages owed, from the Redundancy Payments Directorate."
Time It Retail Ltd operated approximately 50 stores throughout
the UK under the trading styles Gimme Gizmo, Gift Fuzion,
Expressions & Fun Fuzion and all of the stores are now understood
to have closed, according to Sunday Sun.
VIRIDIAN GROUP: Moody's Assigns 'B1' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has assigned a B1 corporate family
rating (CFR) and B1 probability of default rating (PDR) to a
restricted group of companies (Restricted Group) owned by
Viridian Group Investments Limited (referred to collectively as
Viridian, or the Group). Moody's has also assigned a B2 rating to
the GBP418.6 million (equivalent) senior secured bonds (the
notes) -- denominated in euros and US dollars -- issued by
Viridian Group FundCo II, a member of the Restricted Group of
companies, with a loss given default (LGD) assessment of LGD4.
The notes will effectively be subordinated to (i) a GBP225
million Secured Revolving Credit and Letter of Credit Facility
(collectively RCF), and (ii) a maximum GBP70 million of commodity
hedging liabilities and an uncapped amount of interest rate and
foreign exchange hedging, which have priority of claim over the
shared collateral. The RCF has been rated Ba1, with a LGD
assessment of LGD1. This rating action follows the assignment of
provisional ratings on February 23, 2012. The outlook on the
ratings is stable.
Ratings Rationale
Based in Belfast, Northern Ireland, the Group is the owner of:
Power NI (formerly NIE Energy), the incumbent regulated
electricity supplier and power procurement business in Northern
Ireland; Viridian Power and Energy, the owner and operator of the
Huntstown combined cycle gas turbine (CCGT) electricity
generation plant and the Energia electricity supply business; and
equity interests in a number of project-financed wind farm assets
across the island of Ireland.
Moody's assessment of the B1 CFR considers, as a positive, the
Group's range of earnings from businesses and contracted sources,
including (i) the earnings from Viridian Power and Energy,
primarily through the Huntstown CCGTs and the Energia electricity
supply business supported by the earnings visibility afforded by
the capacity payments, (ii) the contribution of the stable price-
regulated cashflows from Power NI, and (iii) a portfolio of
contracted wind farm output which the company is seeking to grow.
However, the rating is constrained by (i) the limited owned
assets supporting its market activities, (ii) a concentration
risk with the single Huntstown generation site and fuel source,
(iii) the risk associated with the Group's relatively small scale
in a developing energy market dominated by two incumbent state-
owned utilities, and (iv) the uncertain economic environment and
evolving utility ownership structure in the Republic of Ireland,
given that the island operates a single electricity market (SEM).
Moody's also considered Viridian's capital structure to be highly
leveraged with the rating agency expecting Debt/EBITDA metrics
close to 4.0x (excluding non-recourse debt held at the
unrestricted wind farm subsidiaries), funds from operations
(FFO)/net debt in the low double digits in percentage terms, and
FFO interest coverage around 2.0x in the short term. These
factors contribute to the Group's sensitivity to downside
scenarios.
The rating is supported by the relatively stable regulated
earnings contribution from Power NI (and the regulated
electricity purchasing operation, Power Procurement Business or
PPB), which in the year to March 2011 provided around 25% of
Viridian Group Investments Limited's GBP101 million EBITDA (2010:
22%). In January 2012, Viridian accepted the regulatory price
control for the two-year period to March 31, 2014, which is
determined to be functionally equivalent to the existing
regulatory structure. Moody's notes, however, that the Northern
Ireland Authority for Utility Regulation intends to deregulate
the residential electricity supply market in the region, at an --
as yet -- undefined point in time, which will erode the
visibility of this income stream.
Viridian's non-regulated businesses have performed well in recent
years, with high levels of plant output -- Huntstown 1 (343MW
capacity) and Huntstown 2 (404MW capacity) -- which was able to
operate at higher-than-normal nameplate capacity during a period
of low gas prices and cold weather conditions. Looking ahead, the
Huntstown plants could be displaced on the SEM merit order by
additional renewable or other generation plant, which may reduce
Huntstown's utilization over time.
The planned disposal of owned, project financed, wind farm
electricity generation businesses currently existing outside of
the Restricted Group represents the loss of some diversification
in Viridian's earnings base -- albeit alongside the
deconsolidation of the associated debt obligations. The Group
will, however, retain access to wind generation through (i) its
portfolio of power purchase agreements (PPAs) including PPAs with
the disposed businesses, and (ii) wind farm development
opportunities. These development projects will inherently be
consumers of capital, with limited Group earnings contributions
in the short term.
The Group's adequate liquidity post refinancing is provided by
the cash flow generation of its existing electricity generation
and supply operations, supported by the GBP225 million super
senior RCF which allows up to GBP125 million of cash to be drawn
but also provides letters of credit necessary for the Group to
hedge its electricity position and trade in the SEM. Moody's also
expects the Group to retain around GBP20 million of cash upon
refinancing the business.
The terms of the notes provide creditor protection in the form of
a debt incurrence test of a Fixed Charge Coverage Ratio of 2.0:1,
as well as a Senior Secured Leverage Ratio test of 3.0:1 for debt
issued at the senior secured level. However, carve-outs allow for
(i) additional indebtedness of up to GBP10 million in aggregate;
(ii) for investment in the renewable energy businesses of up to
GBP40 million and other permitted business of GBP5 million; and
(iii) restricted payments of up to around GBP5 million for
management fees and other redemptions, or -- following a two-year
block -- payments of 50% of consolidated net income.
WHAT COULD CHANGE THE RATING UP/DOWN
The stable outlook on the Group's ratings reflects the security
afforded by the cashflow generation of the businesses and the
potential for deleveraging given the dividend and other
restrictions in the near term. Indeed, upward pressure could
result from the successful execution of the management plan,
combined with a sustainable deleveraging trend below 3.0x Debt /
EBITDA, FFO interest coverage in excess of 2.5x, and FFO / net
debt above 17%.
Downward pressure on the Group's rating could result from (i)
persistent operational problems at the Huntstown site given its
contributions to the Group's earnings, (ii) a deterioration in
the stability of other cash flow streams, or (iii) leverage
remaining above 4.0x on a Debt / EBITDA measure, FFO interest
coverage of less than 2.0x or a failure to increase cash
generation as measured by FFO / net debt trending below double
digits in percentage terms.
Principal Methodology
The methodologies used in this rating were Unregulated Utilities
and Power Companies published in August 2009, and Loss Given
Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
WASTE SAVERS: Ceases Trading; 40 Staff Lose Jobs
------------------------------------------------
thisislincolnshire.co.uk reports that a total of 40 jobs were
lost at Waste Savers International Limited in Skegness when the
company ceased trading last Tuesday.
Following a meeting with stakeholders on March 9, the company
announced it will be going into liquidation later this month.
"The company's workforce of 40 staff including its director have
been made redundant," the company said in a statement cited by
thisislincolnshire.co.uk. "The company's failure has been
brought about principally because of a rise in the purchase price
of rag which has meant that the company could no longer sell its
goods for a profit."
Licensed insolvency practitioner, Philip Daly from Daly & Co in
Sheffield, has been asked to deal with the liquidation and is
asking anyone owed money by the company to contact him, according
to the report.
Waste Savers International Limited is a textile recycling company
based at Burgh Road trading estate.
WOVEN CARPETS: Administrators Seek Buyer for Firm's Assets
----------------------------------------------------------
Mary Vancura at www.business-sale.com reports that Woven Carpets
of Kidderminster Limited has been put up for sale after falling
into administration.
According to the report, administrators from insolvency
practitioners, SJP, were appointed to the company this week after
financial difficulties and cash-flow problems led to it racking
up debts of GBP700,000.
www.business-sale.com relates that Daniel and Simon Plant, the
joint administrators from SJP, have said that they are keeping
the company trading while a search for a buyer or buyers is
carried out.
"Woven Carpets of Kidderminster Limited experienced a reduction
of orders which led to cash-flow problems," the report quotes
Simon Plant as saying. "The company is continuing to trade to
maintain goodwill and we are in talks with a number of
potentially interested parties for the sale of the business and
assets."
Woven Carpets of Kidderminster Limited is a Stourport-based
carpet manufacturer.
===============
X X X X X X X X
===============
* S&P Withdraws 'D' Ratings on 23 European Synthetic CDO Tranches
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its credit ratings on
23 European synthetic collateralized debt obligation (CDO)
tranches.
S&P has withdrawn its ratings on these tranches for different
reasons, including:
* The issuer has fully repurchased and cancelled the notes,
* The notes have been redeemed earlier,
* The notes have paid down in full, and
* The principal amount of the notes is reduced to zero.
"We provide the rating withdrawal reason for each individual
tranche in the separate ratings list," S&P said.
"We have lowered to 'D (sf)' and subsequently withdrawn our
ratings on 16 tranches. The downgrades to 'D (sf)' follow
confirmation that losses from credit events in the underlying
portfolios exceeded the available credit enhancement levels. This
means that the noteholders did not receive full principal on the
early termination date for these tranches. The ratings lowered to
'D (sf)' will remain at 'D (sf)' for a period of 30 days before
the withdrawals becomes effective," S&P said.
Standard & Poor's 17g-7 Disclosure Report
Sec Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com
* Moody's Takes Rating Actions on Four European ABCP Programs
-------------------------------------------------------------
Antalis S.A./Antalis U.S. Funding Corp. ("Antalis"), Regency
Assets Ltd/Regency Markets No.1 LLC ("Regency"), LMA SA/LMA
Americas LLC ("LMA") and Magenta Funding S.T. ("Magenta") are the
co-purchasers in a EUR1.1 billion facility backed by factoring
trade receivables. Each co-purchaser has a commitment of EUR 275
million in the facility.
Antalis is a partially supported multiseller conduit sponsored by
Societe Generale ("SocGen", A1 on review for possible
downgrade/Prime-1/C-). Regency is a multiseller conduit sponsored
by HSBC Bank Plc ("HSBC", Aa2 on review for possible
downgrade/Prime-1/C+ BFSR on review for possible downgrade). LMA
and Magenta are both fully supported multiseller conduits
sponsored by Credit Agricole Corporate and Investment Bank
("CACIB", Aa3 on review for possible downgrade/ Prime-1/D BFSR on
review for possible downgrade) and Natixis (Aa3 on review for
possible downgrade/Prime-1/D+ BFSR on review for possible
downgrade), respectively.
The facility takes the form of senior units issued by a French
securitisation vehicle (FCT). The senior units are backed by
trade receivables originated by German customers, governed by
German law and owed by debtors located in a number of European
countries. The trade receivables are from various industries. The
seller is an unrated-rated German factoring company, which is
ultimately a subsidiary of an investment-grade credit insurance
company. The transaction benefits from a dynamic credit
enhancement driven primarily by historical default and dilution
performance, set-off risk and client concentration, with a floor
of 15%. New receivables can be purchased during the next five
years. The transaction includes several amortization events
mainly based on pool performance triggers, originator's financial
situation and required credit enhancement in the form of
subordinated notes.
Antalis' commitment is partially supported by a liquidity
facility provided by SocGen. The liquidity facility funds for
non-defaulted assets. A transaction amortization event is also an
ABCP cease issuance event for this transaction. With this
transaction, Antalis' program-level credit enhancement increased
by 6% of the purchase limit. Antalis has approximately EUR 260
million in program-level credit enhancement and is authorised to
issue approximately EUR4.32 billion of ABCP.
Regency's commitment is partially supported by a liquidity
facility provided by HSBC. The liquidity facility funds for non-
defaulted assets. A transaction amortization event will is also
an ABCP cease issuance event for this transaction. With this
transaction, Regency's program-level credit enhancement increased
by 5% of its purchase commitment to US$182.2 million. Regency is
authorised to issue approximately US$6.3 billion of ABCP.
LMA's commitment is fully supported by a liquidity facility
taking the form of an asset purchase agreement provided by CACIB.
LMA has approximately EUR10.5 billion in purchase commitments.
Magenta's commitment is fully supported by a liquidity facility
provided by Natixis. Magenta has approximately EUR1.47 billion in
purchase commitments.
Rating Rationale
Antalis S.A./Antalis U.S. Funding Corp., Regency Assets
Ltd/Regency Markets No.1 LLC: The asset quality and credit
enhancement levels are adequate for inclusion to each conduit's
portfolio. The structure also includes early amortization events,
which act as cease-issuance events for this transaction. The
liquidity facility for each conduit covers seller's risk and is
provided by a Prime-1 rated bank.
LMA SA/LMA Americas LLC, Magenta Funding S.T.: In each conduit,
the transaction is fully supported by transaction-specific
liquidity facility. The liquidity facility covers the face amount
of ABCP and is provided by a Prime-1 bank.
JPMORGAN'S CHARIOT AND JUPITER ADD $2.478 BILLION INTEREST IN
AUTO LOAN SECURITIZATION
Chariot Funding LLC and Jupiter Securitization Company LLC have
added a combined commitment of US$2.478 billion in a US$3.304
billion amortizing auto loan securitization established for an
unrated financial institution. The underlying auto loans are
originated by an investment-grade rated bank and three unrated
subsidiaries of the bank. The conduits will hold unrated Class A,
Class B, Class C, and Class D notes. Both conduits are partially
supported, multiseller ABCP programs administered by JPMorgan
Chase Bank ("JPMorgan," Aa1 on review for possible
downgrade/Prime-1/B BFSR on review for possible downgrade).
The transaction-specific credit support to the unrated notes is
comprised of subordination, 1.0% non-declining cash reserve, non-
declining overcollateralization, and excess spread. The
transaction is partially supported in each of the conduits. The
liquidity facility for each conduit is provided by JPMorgan Chase
Bank and sized at 102% of the conduits' commitments.
Chariot has US$23.1 billion in total purchase commitments,
US$16.9 billion in outstanding ABCP, and US$1.70 billion in
program-level credit enhancement.
Jupiter has US$17.6 billion in total purchase commitments,
US$13.09 billion in outstanding ABCP, and US$1.35 billion in
program-level credit enhancement.
Rating Rationale
Chariot Funding LLC and Jupiter Securitization Company LLC: The
asset quality, credit enhancement, and structural feature in the
liquidity support are adequate for inclusion to the conduits'
portfolio. The liquidity structure is the strongest feature in
both conduits. All partially supported liquidity facilities have
a risk transference mechanism that springs into effect if certain
triggers at the asset-level are breached. This structural feature
effectively shifts the risk of loss associated with the assets,
which reduces ABCP investors' exposure to credit risk. The
liquidity support provided by a Prime-1 rated bank.
BARCLAYS' SALISBURY ADDS FOUR TRANSACTIONS
Salisbury Receivables Company, LLC ("Salisbury"), a partially
supported, multiseller ABCP conduits sponsored by Barclays Bank
PLC ("Barclays," Aa3 on review for possible downgrade/Prime-1/C
BFSR on review for possible downgrade), has added four
transactions to its portfolio. Three transactions are fully
supported by liquidity facilities provided by Prime-1 rated
Barclays, while one transaction is partially supported through
liquidity. The fully supported transactions are a US$285.3
million rental car facility, a US$1.1 interest in a US$15 billion
auto warehouse facility, and a US$174.6 interest in a servicer
advance facility.
The partially supported transaction is a US$300 million interest
in a US$1 billion equipment lease facility. Transaction-specific
credit enhancement is in the form of overcollateralization,
subject to a minimum of 25% of receivables. This transaction is
partially supported by a liquidity facility provided by Prime-1-
rated Barclays.
Salisbury's program-level credit enhancement increased by 10% of
outstanding ABCP issued to finance the partially supported
transaction. Salisbury has US$3.2 billion in CP outstanding and
US$327 million in program-level credit enhancement.
Rating Rationale
Salisbury Receivables Company, LLC: Three transactions are fully
supported by transaction-specific liquidity facilities. The
liquidity facilities cover the face amount of ABCP and are
provided by a Prime-1 bank. For the partially supported
transaction, the asset quality and transaction-specific credit
enhancement are adequate for inclusion to the conduit's
portfolio. The liquidity support for the transaction is
consistent with the asset analysis and is provided by a Prime-1
rated bank.
The principal methodology used in these ratings was "Moody's
Approach to Rating Asset-Backed Commercial Paper" published in
February 2003.
Moody's monitors and analyzes ABCP programs on an ongoing basis.
A detailed description of each program is published in the ABCP
Program Review. Some ABCP programs have monthly updated
performance information, which is published in the Performance
Overviews. All publications are available on www.moodys.com.
* EUROPE: Moody's Says Share Buybacks May Hit Pharma Ratings
------------------------------------------------------------
The ratings of certain European pharmaceutical companies could
come under pressure as a result of their resumption of share
buybacks following a period of consolidation and intense M&A
activity in 2009 and 2010, says Moody's Investors Service in a
Special Comment published on March 14.
With the exception of Roche Holding AG (A1 stable), the four
other rated Big Pharma players -- AstraZeneca plc (A1 stable),
GlaxoSmithKline plc (GSK, A1 stable), Sanofi (A2 stable) and
Novartis AG (Aa2 negative) -- covered in Moody's report recently
confirmed on annual earnings calls that they intend to pursue
share repurchases in 2012 either through programs or on an
opportunistic basis.
Moody's notes that AstraZeneca (A1 stable) has one of the
steepest patent cliffs in the industry, with some of its largest-
selling drugs due to lose patent protection in the near term,
which is leading to pressure on its earnings.
"AstraZeneca intends to make US$4.5 billion worth of share
buybacks this year, an amount that exceeds our current
expectation for its post-dividend free cash flow generation in
2012 -- approximately US$2.5 billion," says Marie Fischer-
Sabatie, a Vice President -- Senior Credit Officer in Moody's
Corporate Finance Group. "Negative pressure on AstraZeneca's
rating or outlook could build if sizeable buybacks combined with
earnings erosion lead its financial profile to weaken."
Earnings visibility is greater for GSK (A1 stable) than for most
players in the industry as the patent cliff is largely behind it.
Although Moody's expects GSK's free cash flow generation to cover
its planned share repurchases of GBP1 billion-GBP2 billion in
2012, the company is facing large litigation payments, which
could consume extra cash.
"Share buybacks combined with other large cash outflows could
potentially lead GSK's financial profile to weaken, resulting in
rating pressure," explains Ms. Fischer-Sabatie. "However, GSK has
provided a monetary range for its repurchases, enabling it to
retain a degree of flexibility if conditions change."
Moody's believes that other European players are likely to make
more limited share repurchases. The rating agency would expect
Sanofi (A2 stable) and Novartis AG (Aa2 negative) to pursue
opportunistic share buybacks during the course of 2012, but at a
level that is lower than their free cash flow generation.
In Moody's view, large-scale share repurchases are unlikely. In
general, most rated industry players are keen to keep a Prime-1
short-term rating so that they can access the debt markets easily
and cover any unexpected payments. Because a Prime-1 rating
hinges on an issuer's ability to maintain a long-term rating of
at least A2 or higher, Moody's would not expect companies to
undertake substantial share repurchases that could potentially
jeopardize this.
* Private Equity Firms Buy Up European Distressed Property Debt
---------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that the balance
sheets of Europe's banks hold big opportunities for private
equity firms seeking pre-crisis real-estate loans at a discount,
but the complex portfolios also come with big risks---and major
headaches for interested buyers. As a result, the deluge of
distressed real-estate portfolio sales by European banks that was
expected after Lloyds Banking Group and Royal Bank of Scotland
Group's year-end deals will feel more like a trickle in early
2012, experts said, according to Daily Bankruptcy Review.
* BOOK REVIEW: Hospital Turnarounds - Lessons in Leadership
-----------------------------------------------------------
Editors: Terence F. Moore and Earl A. Simendinger
Publisher: Beard Books
Softcover: 244 pages
Price: $34.95
Review by Henry Berry
Hospital Turnarounds - Lessons in Leadership is a compilation of
twelve essays on the many approaches that have been taken to
resuscitate hospitals in distressed situations. Most of the
essayists are CEOs or presidents of hospitals or healthcare
organizations, and their stories are all different and compelling
in their own way. The hospitals differ in their size,
marketplace, facilities, and services offered. The causes of
their distress vary and the strategies that were used to overcome
them are wide-ranging. All-in-all, it makes for an engaging
collection of success stories.
The authors have extensive experience in the healthcare system,
and nearly all have held top leadership posts in several public
and private hospitals. Most importantly, all have been involved
in successful turnarounds at some time in their careers. Two of
the authors are from the field of marketing, which can play a
significant role in hospital turnarounds.
The number of troubled hospitals rises and falls over time,
depending on many factors, including the state of the U.S.
economy. There are always some hospitals in a distressed
situation or teetering close to it. In spite of the fact that
healthcare is a basic need in U.S. society, hospitals are
constantly vulnerable to financial problems because of
competition, changing medical technology, new approaches to
healthcare from improved drugs and public awareness, and medical
malpractice lawsuits. Any or all of these factors can be
financially crippling and, even if the financial impact is
minimized, a hospital's reputation can be damaged. Like any
other business organization, hospitals can also run into
difficulty because of poor management or labor problems.
The first and last chapters, "Introduction" and "Turnarounds: An
Epilogue," respectively, are written by the co-editors. The
balance of the chapters contain first-hand accounts of hospital
turnarounds, with the authors asked by the co-editors to
"document the role of the various publics." The authors do this,
offering their assessment of the role of the board of directors,
medical staff, management team, volunteers, and other relevant
"publics" in the respective turnarounds. A common thread in
this book is that the import and activities of these publics were
different in every turnaround. Each turnaround had to address
its own grievous, overriding problem or set of problems. Each
turnaround had its own cast of characters who brought different
backgrounds and skills to the turnaround. As a result, each path
taken to overcoming the distressed situation was different.
No matter what the cause or causes of a hospital's distressed
situation, in nearly every case the problems were first realized
when a financial problem became apparent. Thus, turnarounds are
inevitably focused on improving a hospital's financial situation.
As one of the authors notes, "A turnaround is most often the
result of increased revenues and decreased expenses." The
approach taken by some of the authors was to focus on
"[increasing] revenues to improve the operating margins of their
organizations." Many other turnarounds were accomplished by
focusing on reducing expenses. Invariably, however, a
combination of both was needed and working toward these paired
objectives required a new strategic thinking and the development
of operational capabilities that prepared the hospital for long-
term survival in continually changing market conditions. One
author's prescription for success was, "Upward communication,
fluidity of organizational structure, a reduction of unnecessary
bureaucratic rules and policies, and ambitious yet realistic
goals and objectives."
These practices are present in healthy companies and usually
missing in distressed companies. Implementation of these
business practices is essential for a hospital to return to a
favorable financial footing.
Another author addressed "organizational burnout," which must be
corrected if a hospital is to survive. Burnout is evident when
"the sum of an organization's actual output is decreasing over
time when compared with its potential output." The challenge
facing hospital executives and turnaround specialists is to
reduce -- and ideally, eliminate -- the gap between actual and
potential output. The smaller the gap, the more efficient,
productive, and healthy the organization.
These are just a few of the observations and lessons provided in
this collection of essays. Through engaging first-person
accounts of rescue stories, the reader learns what a turnaround
is all about, how to diagnose a distressed situation, and how to
formulate a strategy that implements specific corrective actions.
Terence F. Moore has been involved in the Michigan hospital
system as President and CEO of Mid-Michigan Health, Board Member
of the Michigan Hospital Association, and Chair of the East
Michigan Hospital Association. He is also a fellow of the
American College of Healthcare Executives. Earl A. Simendinger
is a professor of management at the College of Business at the
University of Tampa who for 20 years was a hospital
administrator. Also a fellow in the American College of
Healthcare Executives, he has written many books and articles on
management and organizational development.
*********
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, Ivy B. Magdadaro, Frauline S.
Abangan and Peter A. Chapman, Editors.
Copyright 2012. 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 Peter Chapman at 240/629-3300.
* * * End of Transmission * * *