/raid1/www/Hosts/bankrupt/TCREUR_Public/120530.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Wednesday, May 30, 2012, Vol. 13, No. 107
Headlines
F R A N C E
CIMENTS FRANCAIS: S&P Cuts Corporate Credit Ratings to 'BB+/B'
G E R M A N Y
JUNO LTD: S&P Downgrades Ratings on Two Note Classes to 'D'
KABEL DEUTSCHLAND: S&P Affirms 'BB-' Corporate Credit Rating
SCHLECKER: Future Hinges on Allianz SE's Euler Hermes Unit
G R E E C E
HELLENIC REPUBLIC: S&P Raises Rating on Untendered Bonds to 'CCC'
* GREECE: Four Banks Receive EUR18 Billion as Part of Bailout
I R E L A N D
DUNDALK FC: Faces Severe Financial Difficulties
I T A L Y
ITALCEMENTI SPA: S&P Lowers Corporate Credit Ratings to 'BB+/B'
N E T H E R L A N D S
CONSTELLIUM HOLDCO: S&P Assigns 'B' Long-Term Corp. Credit Rating
P O L A N D
PBG: Extends Debt Restructuring Deal Deadline
R O M A N I A
* ROMANIA: S&P Affirms 'BB+/B' Sovereign Credit Ratings
S P A I N
BANCAJA 11: S&P Lowers Rating on Class D Notes to 'D'
BANKIA SA: Spain May Use Debt Instead of Cash for Rescue Plan
* SPAIN: S&P Lowers Ratings on Five Financial Institutions
* SPAIN: Banking System Don't Need International Bailout, PM Says
S W E D E N
NORTHLAND RESOURCES: Moody's Assigns 'Caa1' CFR; Outlook Stable
NORTHLAND RESOURCES: S&P Assigns 'B-' Rating to NOK460MM Bonds
U N I T E D K I N G D O M
ASHTEAD GROUP: Moody's Upgrades CFR to 'Ba3'; Outlook Stable
AUBURN SECURITIES 5: S&P Lifts Rating on Class D Notes From 'BB-'
B3 INDUSTRIES: Goes Into Administration, Continues to Trade
DEWEY & LEBOEUF: Files Bankruptcy, Winding Down Offices Worldwide
DEWEY & LEBOEUF: Case Summary & 20 Largest Unsecured Creditors
EUROSAIL-UK 2007-1NC: S&P Hikes Ratings on 2 Note Classes to 'B-'
HASTIE GROUP: Appoints Voluntary Administrators
IA GLOBAL: Unable to File Reports Due to Cash Woes
KENSINGTON MORTGAGE: S&P Cuts Rating on Class B2 Notes to 'B-'
KETTERING TOWN: To Enter Into Company Voluntary Arrangement
LANSDOWNE HOTEL: In Administration, Ceases Trading
LCP PROUDREED: S&P Lowers Rating on Class D Notes to 'B+'
MATHIESONS: More Than 240 Jobs Saved Following Restructuring
MORTGAGES NO. 6: S&P Lowers Rating on Class E Notes to 'BB-'
MORTGAGES NO. 7: S&P Affirms 'B+' Rating on Class E Notes
PETROPLUS HOLDINGS: U.K. Coryton Oil Refinery May Shut Down
SCOTGEN DUMFRIES: UK Capital Buys Firm Out of Administration
SOUTHERN PACIFIC 04-2: S&P Cuts Rating on Class E Notes to 'BB-'
THOMAS COOK: Future Hinges on Key Shareholder Vote
*********
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F R A N C E
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CIMENTS FRANCAIS: S&P Cuts Corporate Credit Ratings to 'BB+/B'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long- and short-
term corporate credit ratings on French heavy materials
manufacturer Ciments Francais to 'BB+/B' from 'BBB-/A-3'. The
outlook is stable.
"At the same time, we lowered our issue rating on the senior
unsecured notes issued by Ciments Francais to 'BB+' from 'BBB-',"
S&P said.
"The downgrade of Ciments Francais reflects the consolidated
Italcementi group's continued underperformance against our rating
guidelines, with Standard & Poor's-adjusted funds from operations
(FFO) to debt of 17.9% on Dec. 31, 2011. This is meaningfully
lower than the mid-20% level that we consider commensurate with a
'BBB-' rating and, despite our forecast of improving operating
performance in 2012, we do not see the group's FFO to debt
recovering sufficiently to justify an investment-grade rating
over the next year," S&P said.
Although the credit metrics of Ciments Francais continue to be
stronger than its consolidated parent Italcementi's, the ratings
on the subsidiary are capped by those on its parent.
"In our view, although the consolidated Italcementi group's
credit metrics should modestly improve over the remainder of
2012, we believe that operating performance in 2012 will continue
to suffer from depressed end markets. We do not anticipate that
the group's credit metrics will improve sufficiently to justify
investment-grade ratings in the short term," S&P said.
"Ratings upside would be conditional on a faster recovery of
credit metrics than we currently anticipate, with FFO to debt
sustained at or above 25%. This would likely result from a strong
and sustained recovery in key markets such as the U.S., France,
and Egypt, which we do not anticipate in the short-term," S&P
said.
"Downside ratings pressure could arise should the group
experience further margin pressure due to a combination of
continued sluggish volumes and ongoing pressure on prices. We
could downgrade the group should this result in credit metrics
that stagnate in line with an 'aggressive' financial risk
profile, down from our current assessment of it as
'significant,'" S&P said.
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G E R M A N Y
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JUNO LTD: S&P Downgrades Ratings on Two Note Classes to 'D'
-----------------------------------------------------------
Standard & Poor's Ratings Services raised to 'AA- (sf)' from 'A
(sf)' its credit rating on JUNO (ECLIPSE 2007-2) Ltd.'s class A
notes. "At the same time, we affirmed our 'BBB- (sf)' rating on
the class B notes, and lowered our ratings on the class C, D, and
E notes," S&P said.
"The rating actions follow our review of the loan portfolio as a
result of the full repayment of the Keops loan, allocation of
principal losses due to the repayment of the Clichy loan, and the
expected principal losses on the Neumarkt and Den Tir loans.
Overall, we have observed a gradual deterioration in the credit
quality of most of the loans in the JUNO reference pool," S&P
said.
"The Keops loan was secured against a granular portfolio of
predominantly office and light industrial properties located
throughout Sweden. The loan was accelerated in April 2011 and the
debt enforcement agency, on instruction from the security
trustee, sold the assets via public auction. The agency sold all
130 properties and the loan has repaid in full sequentially, with
proceeds being used for the partial repayment of the class A
notes," S&P said.
"The Clichy loan was secured against a single office property in
Clichy, Paris. The servicer sold the asset in May 2011, and
subsequently the calculation agent determined a liquidation loss
amount of EUR29.3 million with principal proceeds of EUR83.4
million. The principal proceeds were allocated sequentially to
the class A notes, whilst principal losses were applied to the
class D and E notes, causing a full principal loss on the class E
notes. In a synthetic transaction, the issuer allocates losses to
the noteholders by writing down the principal amount of the notes
in an equal amount to the loan loss. Proceeds are then taken from
the note collateral to be used for a credit protection payment by
the issuer to reimburse the originator for the loss," S&P said.
"The Neumarkt loan was secured against an inner city shopping
center in Cologne, Germany. The servicer sold the asset for
EUR130.4 million compared with a securitized balance of EUR122.3
million in September 2011, with an expected repayment of proceeds
by the November interest payment date (IPD)," S&P said.
"However, the special servicer is still awaiting final
confirmation of invoices before it can determine any liquidation
loss amount. This is subject to eligibility criteria verification
by the verification agent. Despite the sale price exceeding the
loan balance, we believe that principal losses on the loan are
likely due to liquidation costs, accrued interest, and allocation
of rental income, which has yet to be received since
administration. Based on a special notice from the issuer in
February 2012, the allocation of recovery proceeds is unlikely
before the August IPD," S&P said.
"The Den Tir loans are structured as a senior/junior arrangement,
with a combined total of EUR30.4 million. Both loans form part of
a secondary shopping center in Antwerp, Belgium. The senior loan
is secured on a mortgage over the property, while the junior loan
benefits from a share charge over the property-owning company.
Since its construction in 2006, the property has suffered a
severe decline in rental income due to tenants exercising their
break options and because of lease expiries. Capita has specially
serviced the loan since 2009 due to a breach of the interest
coverage ratio and loan-to-value ratio covenants. The special
servicer has pursued a consensual sale with the borrower, and has
consequently identified a purchaser. The special servicer has
reported that it has agreed with the purchaser a purchase price
of EUR6.3 million, which would represent a full principal loss on
the junior loan and losses of EUR18.0 million on the senior
loan," S&P said.
"We have raised to 'AA- (sf)' from 'A (sf)' our rating on the
class A notes to reflect the imminent repayment of the Neumarkt
loan, which will reduce the leverage on this class of notes due
to the sequential repayment of recoveries," S&P said.
The resolution of this loan will also deleverage the class B
notes.
"However, due to the general deterioration in the loan reference
pool, we have affirmed our 'BBB- (sf)' rating on this class," S&P
said.
"The imminent sale of the asset backing the senior and junior Den
Tir loans, as well as the allocation of principal losses from the
Neumarkt loan, has resulted in our lowering to 'CCC- (sf)' from
'BB (sf)' of the rating on the class C notes due to our near-term
expectation of principal losses," S&P said.
"Principal losses have already occurred on the class D and E
notes as a result of the sale of the Clichy loan. We have
therefore lowered to 'D (sf)' from 'CCC- (sf)' our ratings on
these classes of notes," S&P said.
"JUNO (ECLIPSE 2007-2) is a synthetic commercial mortgage-backed
securities (CMBS) transaction that closed on May 30, 2007. The
transaction is backed by 11 loans (down from 17 at closing),
secured against mixed-use commercial properties in Germany,
Belgium, and Italy. The legal final maturity is in November
2022," S&P said.
POTENTIAL EFFECTS OF PROPOSED CRITERIA CHANGES
"We have taken the rating actions based on our criteria for
rating European CMBS. However, these criteria are under review,"
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
JUNO (ECLIPSE 2007-2) PLC
EUR867.95 Million Commercial Mortgage-Backed Floating-Rate Notes
Class Rating Rating
To From
Rating Raised
A AA- (sf) A (sf)
Rating Affirmed
B BBB- (sf)
Ratings Lowered
C CCC- (sf) BB (sf)
D D (sf) CCC- (sf)
E D (sf) CCC- (sf)
KABEL DEUTSCHLAND: S&P Affirms 'BB-' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on German
cable operator Kabel Deutschland Holding AG to stable from
positive. At the same time, the 'BB-' long-term corporate credit
rating was affirmed.
"The outlook revision primarily reflects our expectation that the
announced acquisition of the German cable operator Tele Columbus
GmbH (not rated) will delay the expected improvement in Kabel
Deutschland's credit measures," S&P said.
"We nevertheless consider that the acquisition will likely
strengthen Kabel Deutschland's revenue growth and EBITDA
prospects because it increases the number of marketable
households for triple-play services (bundling of pay-TV services,
broadband Internet, and telephony) by about 1.4 million. In
addition, Kabel Deutschland expects to achieve meaningful cost
synergies from overhead reduction and an overlapping network
footprint," S&P said.
"The ratings on Kabel Deutschland continue to reflect Standard &
Poor's Ratings Services' assessment of the business risk profile
as 'satisfactory' and the financial risk profile as
'aggressive'," S&P said.
"The 'satisfactory' business risk profile is supported by Kabel
Deutschland's stable and very profitable utility-like cable TV
(CATV) revenues and the potential for high-single-digit EBITDA
growth via further uptake of triple-play services among its
existing CATV subscribers. However, CATV operators face
meaningful competition from various technology platforms, such as
satellite TV, digital terrestrial TV, and Internet-Protocol TV,"
S&P said.
"Kabel Deutschland's financial risk profile is constrained, in
our view, by the group's still high financial leverage. In
addition, significant subscriber acquisition costs and fierce
competition for high-speed Internet and telephony services
somewhat hold back free operating cash flow (FOCF) generation, in
our opinion. This is partly offset by the group's financial
policy," S&P said.
"The stable outlook reflects our expectation that Kabel
Deutschland will generate solid FOCF of about EUR230 million-
EUR250 million in fiscal 2013 and maintain a Standard & Poor's-
adjusted debt-to-EBITDA ratio between 4.5x and 5.0x pro forma the
closing of the acquisition," S&P said.
"We could raise the rating if Kabel Deutschland's credit measures
improve thanks to continued revenue and earnings growth and the
application of free cash flow toward debt reduction," S&P said.
"In our opinion, an upgrade would be supported by a reduction of
Kabel Deutschland's ratio of debt to EBITDA, as adjusted by
Standard & Poor's, to less than 4.5x and a ratio of adjusted
funds from operations to debt at about 20%. In addition, our
perception that Kabel Deutschland would likely follow a
moderately conservative policy toward shareholder remuneration
could support ratings upside," S&P said.
"Although not expected at this stage, we could lower the rating
if Kabel Deutschland's liquidity profile were impaired by tight
covenant headroom (below 10%) due to significantly weaker EBITDA
generation or if the group's credit measures deteriorated
significantly to more than 5x on a permanent basis as a result of
large shareholder distributions or further significant
acquisitions," S&P said.
SCHLECKER: Future Hinges on Allianz SE's Euler Hermes Unit
----------------------------------------------------------
According to Bloomberg News' Alex Webb, Financial Times
Deutschland, citing Arndt Geiwitz, Schlecker's insolvency
administrator, reported that the company's future may depend on
Allianz SE's Euler Hermes unit, which insured EUR300 million
(US$376 million) of unpaid deliveries.
Bloomberg relates that Mr. Geiwitz, as cited by FTD, said that
prospective buyers have until June 1 to make an offer for
Schlecker.
The newspaper reported that if none is received, he will shut the
company, Bloomberg notes.
Schlecker is a German drugstore chain.
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G R E E C E
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HELLENIC REPUBLIC: S&P Raises Rating on Untendered Bonds to 'CCC'
-----------------------------------------------------------------
Standard & Poor's Ratings Services has raised its issue rating to
'CCC' from 'D' on the Hellenic Republic's untendered bonds
(governed by foreign law) following the timely payment of
principal and interest on some untendered bonds due on May 15,
2012, totaling the equivalent of approximately EUR435 million.
Debt issues affected by this rating action pertain to untendered
debt from the first quarter of 2012 debt exchange.
"The 'CCC' rating on these bonds is the same as our issuer credit
rating on Greece," S&P said.
"At the same time, we note the Greek government has stated that
this payment should not be construed as setting a precedent for
other untendered debt," S&P said.
RATINGS LIST
Upgraded
To From
Greece (Hellenic Republic)
Senior Unsecured CCC D
* GREECE: Four Banks Receive EUR18 Billion as Part of Bailout
-------------------------------------------------------------
BBC News reports that four Greek banks have received EUR18
billion (GBP14.4 billion, US$22.6 billion) as part of the
nation's most recent bailout.
The funds will be divided between National Bank, Alpha, Eurobank
and Piraeus Bank, BBC discloses.
The money has been released by the European Financial Stability
Fund to the Greek body in charge of distributing the funds, BBC
relates.
It is part of Greece's second bailout that was signed-off by the
European Union and the IMF in March, BBC notes.
That deal was for EUR130 billion and hinged on an agreement by
Europe's major banks and other financial institutions to write-
off a large part of their loans to Greece, BBC says.
According to BBC, a report on Monday said that National Bank, the
biggest Greek lender, has received EUR7.43 billion, the largest
share of the new financing.
The report from the AFP news agency said that Piraeus bank will
receive EUR4.7 billion, Eurobank will get EUR3.97 billion and
Alpha is to be handed EUR1.9 billion, BBC notes.
The Hellenic Financial Stability Fund (HFSF) is in charge of
distributing that money, BBC says.
The plan is for it to provide up to EUR50 billion in return for
shares in Greek banks, BBC states.
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I R E L A N D
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DUNDALK FC: Faces Severe Financial Difficulties
-----------------------------------------------
Dundalk Democrat reports that Dundalk FC General Manager Paul
Johnston admits that the club face "severe challenges and
difficulties ahead" as the Lilywhites try to stave off the
prospect of going into examinership.
On Monday, Dundalk FC released a statement concerning the unpaid
insurance claim for the fire to an astro-turf pitch at Hiney Park
last summer, Dundalk Democrat relates.
According to Dundalk Democrat, the statement said that an
unfavorable settlement would leave the club in a "perilous
position where we will have no money to pay staff, players and
creditors going forward".
Two days later, Mr. Johnston and fellow board member Paul Kearney
met with the playing squad to inform them that there was no money
to pay their wages although they were given assurances that they
would be given their unpaid money this week, Dundalk Democrat
discloses.
The situation nosedived even further on Monday when Commercial
Manager Fintan Nelson and Club Promotions Officer Dean Arrowsmith
were also laid off after a meeting with Johnston and club owner
Gerry Matthews, leaving real question marks over the club's
viability, Dundalk Democrat notes.
"Obviously we have been in severe financial difficulties for a
number of weeks now and this week it came to a bit of a head,"
Dundalk Democrat quotes Mr. Johnston as saying on Friday night.
"We've had a conversation with the players, we've had a
conversation with the management and the administration staff so
we all know what's happening and we have to try and push forward
and get through these difficult times."
Mr. Johnston, as cited by Dundalk Democrat, said the club were
working hard to ensure that the players get paid this week.
Failure to do so will inevitably see the club enter examinership
where they would be deducted 10-points by the FAI for a breach of
the licensing laws, Dundalk Democrat states. It would also mean
that every professional on Dundalk's playing squad would become a
free agent, according to Dundalk Democrat.
Dundalk FC is a professional Irish football club based in
Dundalk, County Louth.
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I T A L Y
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ITALCEMENTI SPA: S&P Lowers Corporate Credit Ratings to 'BB+/B'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long- and short-
term corporate credit ratings on Italian heavy materials
manufacturer Italcementi SpA to 'BB+/B' from 'BBB-/A-3'. The
outlook is stable.
"At the same time we lowered our issue rating on the senior
unsecured notes issued by Italcementi Finance S.A. to 'BB+' from
'BBB-'," S&P said.
"The downgrade reflects the consolidated Italcementi group's
continued underperformance against our rating guidelines, with
Standard & Poor's-adjusted funds from operations (FFO) to debt of
17.9% on Dec. 31, 2011. This is meaningfully lower than the mid-
20% level that we consider commensurate with a 'BBB-' rating and,
despite our forecast of improving operating performance in 2012,
we do not see FFO to debt recovering sufficiently to justify an
investment-grade rating over the next year," S&P said.
Although the credit metrics of 82%-owned French subsidiary
Ciments Franxais S.A. continue to be stronger than Italcementi's,
the ratings on the subsidiary are capped by those on its
consolidated parent.
"In our view, although Italcementi's credit metrics should
modestly improve over the remainder of 2012, we believe that
operating performance in 2012 will continue to suffer from
depressed end markets. We do not anticipate that the group's
consolidated credit metrics will improve sufficiently to justify
investment-grade ratings in the short term," S&P said.
"Ratings upside would be conditional on a faster recovery of
credit metrics than we currently anticipate, with FFO to debt
sustained at or above 25%. This would likely result from a strong
and sustained recovery in key markets such as the U.S., France,
and Egypt, which we do not anticipate in the short-term," S&P
said.
"Downside ratings pressure could arise should Italcementi
experience further margin pressure due to a combination of
continued sluggish volumes and ongoing pressure on prices. We
could downgrade the group should this result in credit metrics
that stagnate in line with an 'aggressive' financial risk
profile, down from our current assessment of it as
'significant,'" S&P said.
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N E T H E R L A N D S
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CONSTELLIUM HOLDCO: S&P Assigns 'B' Long-Term Corp. Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Constellium Holdco B.V. The outlook is
stable.
"In addition, we assigned our 'B' issue rating to the company's
proposed US$200 million secured term loan. The recovery rating is
'3', indicating our expectation of meaningful (50%-70%) recovery
in the event of a payment default," S&P said.
"The 'B' rating reflects our view of the company's 'weak'
business risk profile and 'aggressive' financial risk profile as
defined under our criteria," S&P said.
"The stable outlook reflects our expectation of resilient
operating performance in 2012-2013, backed by packaging and
aerospace end-markets, despite an uncertain European
macroeconomic environment, as well as Constellium's adequate
liquidity and absence of debt maturities in the next several
years," S&P said.
"We could nevertheless lower the rating if the company's profits
fall materially short of our base-case expectations, notably if
leading to negative free operating cash flow and higher leverage.
If liquidity weakens, for instance due to unexpected large margin
calls or working capital fluctuations, we could also take a
negative rating action," S&P said.
"The rating upside in the next 12 months will depend on the
company's ability to deliver a solid performance and show
profitability improvement following its efficiency programs. It
would also hinge on some macroeconomic environment improvement in
Europe to which the company is materially exposed. Furthermore,
the company would have to demonstrate a sufficiently supportive
financial policy focused on gradual deleveraging," S&P said.
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P O L A N D
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PBG: Extends Debt Restructuring Deal Deadline
---------------------------------------------
Gabriela Baczynska at Reuters reports that PBG said on Monday the
company has extended a deadline on a debt restructuring deal with
its lenders and broadened its scope to include its financing
needs over the next year.
"The process of negotiations on granting and launching bridge
financing by banks has been prolonged," Reuters quotes PBG as
saying. "The scope of these negotiations has been widened with
agreeing a complex solution for the structure of PBG financing by
the banks over the next 12 months."
PBG said that the bank's due to come up with bridge financing are
Bank Zachodni WBK, ING Bank Slaski, Nordea, and Pekao, Reuters
relates.
PBG, which run into trouble on infrastructure deals with razor-
thin margins, sought access to temporary funding on May 25 to
refinance a large debt pile, Reuters recounts.
PBG is a Polish builder.
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R O M A N I A
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* ROMANIA: S&P Affirms 'BB+/B' Sovereign Credit Ratings
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+/B' long- and
short-term foreign and local currency sovereign credit ratings on
Romania. The outlook is stable. The transfer and convertibility
(T&C) assessment is 'BBB+'.
"The ratings on Romania are constrained by low prosperity and the
economy's vulnerability to external shocks owing to still-high,
albeit declining, external debt and dominant ownership of the
banking sector by Austrian and Greek parent banks. The ratings
are supported by the country's improving fundamentals; the fiscal
deficit is declining, the current account deficit has narrowed,
and the economy has started to rebalance, with the support of an
IMF program," S&P said.
"Foreign institutions own 83% of total banking sector assets.
Austrian banks dominate, holding 39% of total market share, while
Greek banks' subsidiaries account for 13% of banking sector
assets. We believe operational autonomy might limit spill-over
effects if confidence in the Greek banking sector continues to
weaken," S&P said.
"In our view, however, there is a risk that foreign parent bank
difficulties could cause the parents to significantly reduce
cross-border exposure to their subsidiaries, thereby reducing
credit availability. Lines of credit from parent banks to their
subsidiaries are 25% of total balance sheet liabilities
(excluding capital) for Romania's aggregate banking sector, and
35% for the Greek subsidiary banks. However, we note that the
regulatory and prudential frameworks have been strengthened so as
to mitigate the risk of a funding or capital withdrawal by parent
banks," S&P said.
"Following economic growth of 2.5% in 2011, we expect the pace of
expansion to slow to 1.2% in 2012, owing to a moderation in
external and domestic demand. In our view, real GDP will
strengthen to an annual average of 3.5% in the medium term owing
to rising investment, facilitated by the increased use of EU
funds and a recovery in foreign direct investment (FDI), which
will support household spending and exports. However, private
consumption is likely to remain constrained in the short term by
the need for continued household deleveraging--foreign-currency
household borrowing (mainly euros) accounts for about two-thirds
of the loan book. While the currency has stabilized, it is
currently about 30% weaker in nominal terms against the euro
compared with its peak in mid-2007, increasing households' debt
burden in local currency terms," S&P said.
"The authorities have so far adhered to the reforms agreed with
the IMF under its current program. The stand-by arrangement (SBA)
with the IMF was renewed in March 2011 for two years, on a
precautionary basis. However, commitment to structural reform or
fiscal restraint may be tested by public opposition, especially
against the background of the upcoming general elections," S&P
said.
"Moreover, a concurrent slowdown in the European economy could
weaken Romania's balance of payments performance and raise
external funding vulnerabilities," S&P said.
"The authorities aim to lower the general government budget
deficit to under 3% of GDP in 2012 on the accruals-based EU ESA
95 accounting standard, despite a decision to raise public sector
wages in June and December (reversing previous wage cuts). Fiscal
consolidation will include means testing for social welfare
benefits, a reduction in the number of social assistance
programs, steps to broaden the tax base, a pension freeze, and
capital expenditure rationalization. We expect some fiscal
slippage, partly owing to our lower projection for GDP growth,
and risks associated with the November 2012 parliamentary
election, though the rise in public sector wages may stimulate
consumption-related taxes more than currently expected," S&P
said.
"Standard & Poor's anticipates that net general government debt
will peak at about 30% of GDP in 2012 before falling very
gradually. While general government arrears have declined to 0.2%
of GDP currently, mainly at the local government level, total
state-owned enterprises' (SOEs') arrears are high at about 4% of
GDP. SOEs in the energy and transport sectors are in the process
of being reformed by liberalizing prices and restructuring,
although we believe there may be a reluctance to close loss-
making companies or sell state assets, given that this would be
publicly unpopular," S&P said.
"The country's net external liability position has narrowed to
130% of current account receipts (CARs). However, because of
capital account flows and FDI and other equity funding, external
debt net of liquid assets is lower at 60% of GDP, also down from
recent years, following a period of rapid growth. We expect
Romania's current account deficit to remain around 4% of GDP in
2012, after having adjusted from 11.6% in 2008. External
liabilities are expected to decline relative to CARs, as external
leverage in the private sector decreases," S&P said.
"The stable outlook reflects our opinion that Romania's
government will continue to consolidate its public finances
largely in line with specified targets, and that external
imbalances remain more moderate than in the recent past. We
expect that the SBA will help to minimize the risk of fiscal
slippage and that the parents of Romanian banking subsidiaries
will not significantly reverse their cross-border advances," S&P
said.
"If, against our expectations, the pace and extent of fiscal
consolidation were to slow beyond what we currently expect, the
authorities were to deviate from the structural reform strategy,
or Romania's external deficits were to widen significantly
without improving the country's long-term growth potential, the
ratings could come under pressure," S&P said.
"Conversely, if the government continues to push through with
structural measures to improve competitiveness and potential
growth, while building a sustained track record of fiscal
prudence, as external pressures diminish, we could raise the
ratings," S&P said.
=========
S P A I N
=========
BANCAJA 11: S&P Lowers Rating on Class D Notes to 'D'
-----------------------------------------------------
Standard & Poor's Ratings Services lowered to 'D (sf)' from 'CCC
(sf)' its credit rating on Bancaja 11, Fondo de Titulizacion de
Activos's class D notes. "Our ratings on the other classes of
notes are unaffected," S&P said.
"On March 15, 2012, we took various rating actions on Bancaja 11.
Among those rating actions, we lowered our rating on the class D
notes to 'CCC (sf)' from 'B (sf)', stating that the class D notes
would fail to pay timely interest on the April 2012 interest
payment date (IPD), due to a breach of the interest-deferral
trigger for this class," S&P said.
"Bancaja 11 features a structural mechanism that traps excess
spread to provide protection from defaults to the more senior
classes of notes. When the balance of cumulative defaults reaches
a certain percentage of the initial collateral balance (the
interest-deferral trigger), these structural mechanisms alter the
priority of payments, so as to shut off interest payments to the
class of notes related to that trigger," S&P said.
"As per the trustee's data in relation to the April 27 IPD,
cumulative defaults account for 5.74% of the closing portfolio
balance, versus trigger levels of 5.62% for the class D notes,
7.4% for the class C notes, and 10.9% for the class B notes. As a
consequence, the class D notes failed to pay timely interest as
reflected in our rating on that class," S&P said.
"We have therefore lowered our rating on the class D notes to 'D
(sf)'. The other rated classes in this transaction are not
affected by the rating action," S&P said.
"At closing, the class D rating was 'BB (sf)', and our analysis
at that time resulted in a required credit coverage of 0.35% for
that rating level, while the class D notes benefited from the
credit enhancement provided by the reserve fund, which was equal
to 1.15% of the securitized portfolio. Based on the latter
evolution of the portfolio's credit quality, we revised our
default and loss assumptions for the underlying collateral. This
contributed to an increase in the required credit coverage for
the class D notes, and this increase was not offset by the
evolution of the transaction's structural features; the credit
enhancement available to the class D notes decreased due to the
depletion of the reserve fund and constant weakening of the
performing balance available to service the notes," 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
Bancaja 11, Fondo de Titulizacion de Activos
EUR2.023 Billion Floating-Rate Notes
Rating Lowered
D D (sf) CCC (sf)
Ratings Unaffected
A2 A (sf)
A3 A (sf)
B BB (sf)
C B (sf)
E D (sf)
BANKIA SA: Spain May Use Debt Instead of Cash for Rescue Plan
-------------------------------------------------------------
Emma Ross-Thomas and Charles Penty at Bloomberg News report that
Spain is considering using debt issued by the government or its
bank-rescue fund instead of cash to prop up the Bankia group,
adopting a mechanism that would free it from raising the money
from investors.
According to Bloomberg, a spokesman for the Economy Ministry, who
asked not to be named in line with its policy, said on Monday
that the government hasn't made a decision on whether to use its
debt to recapitalize the nationalized lender and will decide in
two or three months.
Prime Minister Mariano Rajoy said at a Madrid news conference on
Monday that the government hadn't spoken to the European Central
Bank about such a step, Bloomberg relates.
Spain nationalized the Bankia group on May 9, leading the lender
with the biggest Spanish asset base to request EUR19 billion
(US$23.9 billion) of government backing to clean up lending to
property developers and other loans such as residential
mortgages, Bloomberg discloses. The size of the support needed
for Bankia, and the implication that other banks may also need
state support to repair their balance sheets, pushed 10-year
yields on Monday to the most relative to German bunds since the
euro was created, Bloomberg says.
Bankia SA accepts deposits and offers commercial banking
services. The Bank offers retail banking, business banking,
corporate finance, capital markets, and asset and private banking
management services.
* SPAIN: S&P Lowers Ratings on Five Financial Institutions
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on five
Spain-based financial institutions, affirmed the ratings on nine,
and maintained the ratings on five on CreditWatch with negative
implications.
"We have also revised down our assessments of the stand-alone
credit profiles (SACPs) of six financial institutions, with
revisions ranging from one to three notches," S&P said.
With the exception of two financial institutions, all ratings
either carry a negative outlook or remain on CreditWatch
negative.
"The rating actions follow our review of the wider implications
for economic and industry risks in the Spanish banking sector
after our two-notch downgrade of the Kingdom of Spain
(BBB+/Negative/A-2) on April 26, 2012. As a result of the review,
we have maintained our Banking Industry Country Risk Assessment
(BICRA) on Spain at group '5', but revised our economic risk
score, a component of the BICRA, to '6' from '5'," S&P said.
"We lowered our long-term counterparty credit ratings on five
financial institutions -- Bankia S.A., Banco Financiero y de
Ahorros S.A., Banca Civica S.A. (Civica), Banco Popular Espanol
S.A. (Popular), and Bankinter S.A. -- based on our lowering of
our assessments of their SACPs. We revised the SACPs following
our review of the Spanish banking industry's economic risk, owing
to the impact we see on the capital positions of the first four
institutions and on the business model of the fifth one. Under
our criteria, we use the economic risk score to calibrate the
risk weights used for our capital calculations in several asset
classes. As a result of our calculations, the capital positions
of the institutions are immediately affected by a revision of the
economic risk score," S&P said.
"We are now for the first time incorporating into the long-term
ratings on two financial institutions -- Popular, and Bankia, and
indirectly its parent BFA -- one and two notches respectively of
uplift above their SACPs to reflect potential short-term
extraordinary support from the Spanish government. We believe
that the Spanish government would likely provide short-term
support to back any potential capital shortfall at these two
institutions if necessary. In addition, our long-term ratings on
these two institutions and on Banco de Sabadell S.A. (Sabadell)
and C¡vica benefit from one notch of uplift over their SACPs for
potential extraordinary government support," S&P said.
"The outlooks on the long-term ratings on six financial
institutions -- Banco Santander S.A. (and its subsidiaries),
Banco Bilbao Vizcaya Argentaria S.A. (BBVA), Popular, Sabadell,
Kutxabank S.A., and Bankinter -- are negative. They generally
reflect the possibility that we could lower the ratings if we
perceived increasing pressure on the banks' financial strength in
the context of Spain's weakening economic conditions. For
Santander (and its subsidiaries) and BBVA, the negative outlooks
also reflect the negative outlook on Spain. One financial
institution, Confederacion Espanola de Cajas de Ahorros, carries
a stable outlook, which factors in our view that we are currently
unlikely to change our ratings or stand-alone credit profile on
CECA in the next few years, under our base-case scenario," S&P
said.
"The ratings on five financial institutions -- CaixaBank S.A. and
its parent Caja de Ahorros y Pensiones de Barcelona (la caixa),
Ibercaja Banco S.A., and Bankia and parent BFA remain on
CreditWatch negative. The CreditWatch placements of the ratings
on the first three reflect our view that pending acquisitions and
their integration could have a negative impact on each entity's
creditworthiness. In the case of Bankia and its parent BFA, the
CreditWatch listing reflects uncertainties surrounding Bankia's
restructuring and recapitalization plan, as well as the
implementation risks it may entail," S&P said.
"Conversely, we kept the ratings on Civica on CreditWatch
positive based on our view that its creditworthiness may
potentially benefit from its integration into Caixabank, a
financially stronger group," S&P said.
"At the same time, we have also taken negative actions on various
hybrid capital instruments issued by several financial
institutions. These actions reflect our view of the increased
vulnerability to nonpayment of dividends or coupons of the hybrid
capital instruments that we see in each particular bank.
Currently, we only rate preference shares issued or guaranteed by
Santander and its core subsidiary Banco Espanol de Credito S.A.
in investment-grade categories. We rate all the other hybrid
instruments issued by other Spanish financial institutions in the
noninvestment-grade categories. However, we think vulnerability
to nonpayment of the dividends or coupons varies between the
institutions, which is reflected in the wide range of our
ratings, from our 'BB+' issue rating on BBVA and Caixabank's
hybrid debt to our 'CCC-' issue rating on BFA's hybrid debt," S&P
said.
"We will publish individual research updates on the banks
identified below, including a list of ratings on affiliated
entities, as well as the ratings by debt type--senior,
subordinated, junior subordinated, and preferred stock," S&P
said.
RATINGS LIST
The ratings are counterparty credit ratings.
DOWNGRADED; CreditWatch Action
To From
Banco Popular Espanol S.A. BB+/Negative/B BBB-/Watch
Neg/A-3
Bankinter S.A. BB+/Negative/B BBB-/Watch
Neg/A-3
DOWNGRADED; Remain On CreditWatch
To From
Banca Civica S.A.
Long-Term Counterparty
Credit Rating BB/Watch Pos BB+/Watch Pos
Bankia S.A. BB+/Watch Neg/B BBB-/Watch
Neg/A-3
Banco Financiero y de Ahorros S.A.
Long-Term Counterparty
Credit Rating B+/Watch Neg BB-/Watch Neg
AFFIRMED; CreditWatch/Outlook Action
To From
Banco Financiero y de Ahorros S.A.
Short-Term Counterparty
Credit Rating B B/Watch Neg
Banco de Sabadell S.A. BB+/Negative/B BB+/Watch
Neg/B
CaixaBank S.A.
Short-Term Counterparty
Credit Rating A-2 A-2/Watch Neg
Confederacion Espanola
de Cajas de Ahorros BBB-/Stable/A-3 BBB-/Watch
Neg/A-3
Kutxabank S.A. BBB-/Negative/A-3 BBB-/Watch
Neg/A-3
AFFIRMED
To From
Banco Santander S.A. A-/Negative/A-2 A-/
Negative/A-2
Banco Espanol de Credito S.A. A-/Negative/A-2 A-/
Negative/A-2
Santander Consumer Finance,
S.A. BBB+/Negative/A-2 BBB+/
Negative/A-2
Banco Bilbao Vizcaya
Argentaria S.A. BBB+/Negative/A-2 BBB+/
Negative/A-2
REMAIN ON CREDITWATCH
To From
Banca Civica S.A.
Short-Term Counterparty
Credit Rating B/Watch Pos B/Watch Pos
CaixaBank S.A.
Long-Term Counterparty
Credit Rating BBB+/Watch Neg BBB+/Watch
Neg
Caja de Ahorros y Pensiones
de Barcelona BBB-/Watch Neg/A-3 BBB-/
Watch Neg/A-3
Ibercaja Banco S.A. BBB-/Watch Neg/A-3 BBB-/
Watch Neg/A-3
NB. This list does not include all ratings affected.
* SPAIN: Banking System Don't Need International Bailout, PM Says
-----------------------------------------------------------------
BBC News reports that Mariano Rajoy, Spain's prime minister, has
said it is "very difficult" for the country to get funds.
He was speaking amid growing fears about the Spanish banking
sector, after Bankia asked the government for EUR19 billion
(US$24 billion, GBP15 billion), BBC relates.
The premium investors demanded for holding Spain's 10-year bonds
over its German equivalent rose to a record 5.05 percentage
points, BBC discloses.
But Mr. Rajoy said the banking system did not need an
international bailout, BBC notes.
"There will not be any [European] rescue for the Spanish banking
system," Mr. Rajoy, as cited by BBC, said, but he backed calls
for the European rescue fund to be able to lend to banks
directly.
Last week, Bankia, which was formed from the merger of several
struggling regional lenders, requested a EUR19 billion bailout,
which was a much bigger amount of help than had been expected,
BBC recounts.
"We took the bull by the horns because the alternative was
collapse," BBC quotes Prime Minister Mariano Rajoy, as saying,
adding that Bankia customers' savings were now safer than ever.
It marks an effective nationalization for the country's third-
largest bank and has raised fears about how Spain plans to pay
for it, BBC notes.
BBC relates that Mr. Rajoy said he did not think his government's
support for Bankia had influenced what is known as the risk
premium, the difference between Spanish and German bond yields.
===========
S W E D E N
===========
NORTHLAND RESOURCES: Moody's Assigns 'Caa1' CFR; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service has assigned a Caa1 Corporate Family
Rating (CFR) to Northland Resources AB. At the same time, Moody's
has assigned a Caa1 (LGD 3, 46%) rating to the US$350 million of
senior secured notes maturing in 2017. The rating outlook is
stable. This is the first time that Moody's has assigned public
ratings to Northland.
Ratings Rationale
Moody's Caa1 rating largely reflects the remaining construction
and overall execution risk of the project, the tight liquidity
position Northland is expected to face over the coming 24-months,
and the group's reliance for all cash flows on a single asset
(the Kaunisvaara Project) and single commodity (iron ore).
Given the Project is still just over 50% complete -- with
commissioning expected in January 2013 - the risk of scheduling
and cost overruns, combined with potential start-up and recovery
issues, will continue to drive the rating over the near-term.
While the majority of key logistics contracts and permits have
been finalised, Moody's remains concerned that areas of
uncertainty surrounding the logistics solution remain - chiefly
the funding of the Narvik port upgrade, and outstanding
agreements pertaining to leasing arrangements for rail wagons and
the ship loader. These risks are exacerbated by the relatively
thin cash buffer in place to cover any material cost overruns or
unexpected cash outflows.
The rating positively reflects: (i) the fact that the project is
currently on schedule to produce first ore in January 2013; (ii)
the better-than-average cash costs of production for Northland's
premium iron ore product (69% Fe grade); (iii) large portion of
equity in the project which will be utilised before any drawdown
of the bond proceeds; and (iv) that offtake agreements are in
place for 100% of production from reputable and established
customers (Tata Steel, Standard Bank and Stemcor).
The Stable Outlook reflects Moody's expectations that Northland
will successfully pass the cost-to-complete test in June / July
2012 to gain access to the bond proceeds, and will successfully
ramp-up production at the Tapuli mine in January 2013.
Upward rating pressure would emerge should: (i) further material
equity injections or cash flows to improve the liquidity position
of the company; (ii) logistics issues are resolved with no
material cost increases; (iii) Tapuli mine successfully ramps-up
production and generates positive operating cashflows; and (iv)
Sahavaara environmental permit is granted, enabling Northland to
commence groundwork at the Sahavaara site.
Downward rating pressure would emerge should Northland: (i) fail
to secure the leases for the Caterpillar equipment; (ii) fail to
pass the cost-to-complete test for bond drawdown; (iii) suffer
material cost overruns which further erode the group's liquidity
position; and (iv) face substantial ramp-up delays beyond three-
months at the Tapuli mine.
The senior secured notes are rated Caa1 -- in line with
Northland's corporate family rating - given the limited amount of
Northland's other senior debt and non-debt obligations. The bond
was issued by Northland Resources AB and is supported by
guarantees from all material subsidiaries, as well as security
over the accounts, shares, corporate and real estate mortgages,
insurances and intercompany loans of the group. Drawdown of the
bond is also dependent upon all of the equity being utilised, and
approval from an independent third-party engineer (Turgis
Consulting Ltd) that Northland are able to pass the cost-to-
complete test.
The principal methodology used in rating Northland Resources AB
was the Global Mining Industry Methodology published in May 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
NORTHLAND RESOURCES: S&P Assigns 'B-' Rating to NOK460MM Bonds
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue rating
to the NOK460 million and US$270 million tranches of the senior
secured bonds due March 2017 issued by Sweden-based mining
company Northland Resources AB (Northland). "The recovery rating
on the bonds is '4', indicating our expectation of average (30%-
50%) recovery prospects in the event of a payment default. The
outlook on the bonds is stable," S&P said.
"The rating assignment follows Northland's establishment of a
high-quality iron ore mine capable of producing 4.4 million
tonnes per year in Kaunisvaara in Northern Sweden. The mine
consists of two primary pits known as Tapuli and Sahavaara. The
Tapuli pit has full permission to start production on time in the
fourth quarter of 2012. The Sahavaara pit is due to commence
production in 2016, subject to receipt of a final environmental
permit, an application for which Northland submitted in March
2011. Northland will undertake the mining operations itself, but
has subcontracted the logistics services necessary to transport
the ore to the nearest ice-free port in Narvik, Norway, using a
combination of road and rail transport," S&P said.
"The bonds partly fund Northland's costs in constructing the
mine. The financial structure reflects many of the main features
of project financing, namely, a limited ability to: raise
additional debt; grant security; make other investments; merge
with any other entity; or undertake any activity unrelated to the
Kaunisvaara project. Northland is also exposed to a cross default
with its parent company Northland Resources S.A.," S&P said.
"In our base-case forecast, we use a price of US$100 per tonne,
with an additional US$45 premium to reflect the higher-quality,
69% iron ore that the project expects to produce, compared with
the 62% iron ore that we use in our price benchmark. We use
Northland's assumptions for freight costs to the project's target
markets in China and Europe to achieve an overall price of $109
per tonne of iron ore delivered to buyers from 2013. Using these
forecasts, we calculate that the project has sufficient liquidity
to complete the project and meet its debt service obligations
with only limited surplus cash," S&P said.
"In our view, the construction of the mine will be completed on
time and to budget. We base our view on the solid progress that
the project has made to date in construction and the recent
execution and mobilization of the logistics subcontracts," S&P
said.
"We could take a negative rating action if iron ore prices, or
the premium available for the project's high-quality ore, decline
below our current forecasts; if construction is delayed; or if
construction or operational costs are higher than budget. A
negative rating action could also occur if Northland Resources'
credit quality were to decline," S&P said.
"We could take a positive rating action once the project starts
generating revenues, assuming that iron ore prices and the
premium available for the project's high-quality product remain
in line with our base-case forecast," S&P said.
===========================
U N I T E D K I N G D O M
===========================
ASHTEAD GROUP: Moody's Upgrades CFR to 'Ba3'; Outlook Stable
------------------------------------------------------------
Moody's Investors Service has upgraded to Ba3 from B1 the
corporate family rating ("CFR") of Ashtead Group Plc.
Concurrently, Moody's has affirmed the B2 rating of the US$550
million senior secured Notes due 2016 issued by Ashtead Capital
Inc. The ratings outlook is stable.
Ratings Rationale
"The upgrade reflects the improvement in Ashtead's operating
performance driven by both volume and yield despite weak end
markets," says Sebastien Cieniewski, lead analyst for Ashtead.
The rating action also recognizes the company's solid fleet
management along with timely investment helping to drive
profitability.
Based on Moody's adjustments, leverage measured at January 31,
2012 had decreased to 2.8x from a maximum of 3.7x at April 30,
2010, while EBIT to Interest increased to 2.5x from 1.0x.
However, the company has significantly increased its capital
expenditures in order to both renew and expand its fleet,
resulting in negative free cash flow generation in 2011/12.
The stable outlook reflects Moody's expectation that Ashtead's
end-market will experience benign growth supporting the continued
trend in rental penetration. The outlook also assumes that the
company will maintain a relatively conservative financial policy
with no major debt-funded acquisitions. Moody's does not
anticipate positive pressure on the rating in the near-term,
reflecting the company's limited geographical diversity and the
cyclical nature of its end-markets, combined with ongoing
macroeconomic uncertainties. Negative pressure could develop if
leverage increases above 3.0x on a sustained basis and EBIT to
Interest decreases below 2.0x.
The methodologies used in these ratings were Global Equipment and
Automobile Rental Industry published in December 2010 and Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.
Ashtead is a UK-listed equipment rental company, with operations
in the US and UK. Total revenue as at January 31, 2012 on a last-
12-months (LTM) basis was GBP1,090 million.
AUBURN SECURITIES 5: S&P Lifts Rating on Class D Notes From 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in Auburn Securities 3 PLC (Auburn 3), Auburn Securities
4 PLC (Auburn 4), and Auburn Securities 5 PLC (Auburn 5).
"The rating actions follow our credit and cash flow analysis of
the most recent transaction information that we have received
(March 2012). Our analysis reflects the application of our U.K.
residential mortgage-backed securities (RMBS) criteria," S&P
said.
"Auburn 3, 4, and 5 are U.K. buy-to-let transactions, originated
by Capital Home Loans Ltd., a subsidiary of Irish Life &
Permanent PLC. Each pool also has a significant portion of
flexible mortgages, with redraw facilities in place to address
the related risk. All three transactions have fully funded
reserve funds, which currently represent 11.2%, 3.9%, and 2.4% of
the outstanding balance of notes in Auburn 3, 4, and 5. Principal
redemption in all three transactions is sequential," S&P said.
"The liquidity and redraw facilities in each transaction have
been drawn to cash and are held in a bank account, in the
issuer's name. Each of the bank account agreements are in line
with our 2010 counterparty criteria, so there is no restriction
on the maximum potential rating on the notes for this
counterparty support," S&P said.
"The interest rate swaps in each transaction are not in line with
our 2010 counterparty criteria, so we gave no benefit to the
swaps in our analysis. We considered appropriate cash flow
stresses to address interest rate and basis risk in each of the
transactions," S&P said.
AUBURN 3
"The credit enhancement level for both classes of notes has
increased significantly since closing, given a low pool factor of
18%. Credit enhancement for the class M notes has increased to
11.2%, from 1.0% at closing," S&P said.
"Total arrears, at 1.57%, are on average lower for Auburn 3 than
for other U.K. RMBS transactions that we rate; cumulative losses
to date of five basis points (bps) are negligible," S&P said.
"However, prepayment levels remain low and the transaction is
unlikely to pay down significantly in the near term, in our
opinion," S&P said.
AUBURN 4 AND AUBURN 5
"The increase in credit enhancement levels has not been as
significant for these transactions, particularly for Auburn 5,
given pool factors of 32% and 52% in Auburn 4 and Auburn 5," S&P
said.
"Total arrears, at 1.64% and 1.38% in Auburn 4 and Auburn 5
respectively, are on average lower than for other U.K. RMBS
transactions that we rate, being well below our U.K. prime RMBS
index. Cumulative losses to date are 14 bps and 46 bps, which
although higher than in Auburn 3, are well within our
expectations," S&P said.
"On Feb. 7, 2012, we placed on CreditWatch negative our ratings
on the class A2, M, B, and C notes in Auburn 4, and the ratings
on the class A2 and M notes in Auburn 5 due to the expiry of
various remedy periods. The documented required short-term rating
for a bank account provider was 'A-1+', and for Auburn 4 and
Auburn 5, the documented required short-term rating for a
liquidity and redraw facility provider was 'A-1+'. Barclays Bank
PLC (A+/Stable/A-1) is a bank account provider in each of the
Auburn transactions and the liquidity facility and re-draw
facility provider in Auburn 4 and Auburn 5. As a result of the
lowering of the short-term rating on Barclays Bank below 'A-1+',
the issuer amended the relevant bank agreements to reflect our
2010 counterparty criteria, and drew the liquidity and re-draw
facilities in each of Auburn 4 and 5 to cash," S&P said.
APPLICATION OF CRITERIA
"After applying our U.K. RMBS criteria, our credit analysis
results show an increase in the weighted-average loss severity
(WALS) for each rating level. The change in the WALS is mainly
due to the application of our revised market-value decline
assumptions. The change in the weighted-average foreclosure
frequency (WAFF) at each rating level in each of the transactions
has not been as consistent; however, the overall effect of the
application of our criteria is an increase in the required credit
coverage for each rating level," S&P said.
"As a result of the application of our U.K. RMBS and 2010
counterparty criteria, we have raised and removed from
CreditWatch negative our ratings on the class A2, M, and B notes
in Auburn 4. In Auburn 5, we have raised and removed from
CreditWatch negative our ratings on the class A2 and M notes. We
have also affirmed and removed from CreditWatch negative our
rating on the class C notes in Auburn 4, based on our credit and
cash flow analysis," S&P said.
"The application of our U.K. RMBS criteria has led us to raise
our ratings on the class B, C, and D notes in Auburn 5. We have
also affirmed our ratings on the class A2 and M notes in Auburn
3, the class D and E notes in Auburn 4, and the class E notes in
Auburn 5," S&P said.
Auburn 3, 4, and 5 are U.K. RMBS transactions backed by first
ranking mortgages on properties throughout the U.K., closing in
November 2002, October 2004, and September 2005. Each transaction
securitizes mortgages originated by Capital Home Loans Ltd.
CREDIT STABILITY
"Our credit stability analysis indicates that the maximum
projected deterioration that we would expect at each rating level
for time horizons of one year and three years, under moderate
stress conditions, are in line with our credit stability
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 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
RATINGS RAISED AND REMOVED FROM CREDITWATCH NEGATIVE
Auburn Securities 4 PLC
GBP1 Billion Mortgage-Backed Floating-Rate Notes
A2 AAA (sf) AA (sf)/Watch Neg
M AAA (sf) AA (sf)/Watch Neg
B AAA (sf) AA (sf)/Watch Neg
Auburn Securities 5 PLC
GBP450 Million Mortgage-Backed Floating-Rate Notes
A2 AAA (sf) AA (sf)/Watch Neg
M AAA (sf) AA (sf)/Watch Neg
RATINGS RAISED
Auburn Securities 5 PLC
GBP450 Million Mortgage-Backed Floating-Rate Notes
B AA (sf) A+ (sf)
C A (sf) BBB (sf)
D BBB- (sf) BB- (sf)
RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE
Auburn Securities 4 PLC
GBP1 Billion Mortgage-Backed Floating-Rate Notes
C AA (sf) AA (sf)/Watch Neg
RATINGS AFFIRMED
Auburn Securities 3 PLC
GBP400 Million Mortgage-Backed Floating-Rate Notes
A2 AAA (sf)
M AA- (sf)
Auburn Securities 4 PLC
GBP1 Billion Mortgage-Backed Floating-Rate Notes
D BBB (sf(
E BB- (sf)
Auburn Securities 5 PLC
GBP450 Million Mortgage-Backed Floating-Rate Notes
E BB- (sf)
B3 INDUSTRIES: Goes Into Administration, Continues to Trade
-----------------------------------------------------------
Men Media News reports that copper cable and optic fibre
manufacturer B3 Industries has gone into administration.
Colin Haig, Paul Flint and Allan Graham, of KPMG, have been
appointed joint administrators, according to Men Media News. The
report relates that none of the subsidiaries are in
administration and continue to trade as normal.
Meanwhile, Men Media News notes that figures from information
services company Experian show 162 northwest companies went bust
last month, a fall of 25.7 per cent on April 2011. Nationally,
there were 1,564 insolvencies, down 13.5 per cent year-on-year
from 1,808, Men Media News discloses.
B3 Industries is a copper cable and optic fibre manufacturer.
The group, which has its headquarters in Blackley, Manchester,
has several trading subsidiaries, including Manchester Cables and
FTTX. The other businesses are in Crawley, Sussex, Normanton in
West Yorkshire and Santander in Spain.
DEWEY & LEBOEUF: Files Bankruptcy, Winding Down Offices Worldwide
-----------------------------------------------------------------
Dewey & LeBoeuf LLP collapsed into Chapter 11 bankruptcy (Bankr.
S.D.N.Y. 12-12321) in Manhattan after failing to save the law
firm amid struggles with high debt and partner defections.
Dewey, based in New York, disclosed debt of US$245 million and
assets of US$193 million in its chapter 11 filing late Monday.
Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey
employed about 2,000 people with 1,300 lawyers in 25 offices
across the globe. Only 150 employees are left to complete the
wind-down of the business, according to a court filing.
Dewey & LeBoeuf said in a statement that unlike most other
Chapter 11 cases, this filing does not anticipate a return to
business but rather a managed wind-down of affairs, followed by
liquidation. Dewey & LeBoeuf expects the most significant
portion of the process to be completed in the next few months. In
the interim, the firm will be operating on a budget and according
to a timetable to be determined by the Court.
"We are proud of the dedication and professionalism that has
characterized Dewey & LeBoeuf over many years, and we intend to
bring the same focus to the unfortunate task of closing out our
affairs," said Stephen J. Horvath, Executive Partner.
The firm has asked the Court for permission to continue to pay
salaries, benefits and Paid Time Off (PTO) in the ordinary course
of business, for current employees, consistent with bankruptcy
laws. The firm expects permission to be granted within 48 hours
following the filing. The firm will ask approximately 90
employees to remain on staff to assist in the wind-down.
Road to Bankruptcy
Following the merger in 2007, the firm sought to further expand
by acquiring partners and practice groups -- the "rainmakers" --
with significant books of business. The firm entered into
compensation agreements with 100 partners for certain guaranteed
and incentive payments.
But Dewey & LeBoeuf "was formed at the onset of one of the worst
economic downturns in U.S. history," Jonathan A. Mitchell, the
chief restructuring officer, said. "These negative economic
conditions, combined with the firm's rapid growth and partnership
compensation arrangements, created a situation where the cash
flow was insufficient to cover capital expenses and full
compensation expectations."
To deal with the cash flow problems, the partners cancelled or
deferred income of over US$100 million. In December 2011 profit
fell US$30 million short for the calendar year. In January 2012,
the firm was advised not to use the US$25 million of its US$100
million revolving credit facility because the facility was up for
renewal in April 2012. The resulting contraction of working
capital by US$55 million resulted in a liquidity crisis for the
firm, which contributed to its ultimate demise.
During the first quarter of 2012, the firm was confronted with
liquidity constraints that led to the precipitous resignation of
over 160 of the firm's 300 partners by May 11.
By April, the firm had drawn about US$75 million of a US$100
million credit line from banks including JPMorgan Chase & Co. and
Citigroup Inc., and was trying to collect money owed by clients
to pay bankers, Bloomberg News said, citing two people familiar
with Dewey's finances.
On April 27, the firm learned the Manhattan District Attorney's
office was investigating allegations of wrongdoing by Steven
Davis, the firm's sole chairman. Two days later, Mr. Davis was
removed from all his leadership roles.
According to Mr. Mitchell, following unsuccessful negotiations
with other law firms and as a result of the continuing defaults
under its credit facilities, and the inability to renew or secure
alternative financing, the Debtor decided that it would be in the
best interests of its clients, creditors, employees and other
parties for the Debtor to wind-down its business.
Wind Down
Faced with the potential acceleration of US$225 million in
principal amount of prepetition secured debt, the firm promptly
issued notices under the applicable Worker Adjustment and
Retraining Notification statutes on May 4, 2012, to notify its
employees that the vast majority of them would likely be
terminated.
The firm on May 11 appointed a committee comprised of (a) Janis
M. Meyer, a partner and general counsel; and (b) Stephen J.
Horvath III, Esq., the executive partner, to oversee the wind-
down.
An agreed upon budget for the wind-down contemplates funding (i)
for the remaining 150 employees in the U.S. from May 15 through
May 31, and (ii) a reduced wind-down staff of 90 employees in the
U.S. from June 1, 2012 onward.
The firm's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in
process of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo is being prepared for
closure and the liquidation of the firm's local affiliate. The
partners of the firm in the Johannesburg office are planning to
wind down the practice.
The firm's ownership interest in its practice in Warsaw was sold
to the firm of Greenberg Traurig PA on May 11 for US$6 million.
The Pension benefit Guaranty Corp. took US$2 million of the
proceeds as part of a settlement.
Accounts Receivable
As of the Petition Date, the Debtor's assets consist principally
of US$13 million in cash, accounts receivable and work-in-
progress with a face amount of approximately US$255 million
generated by the firm's U.S. offices, various pieces of artwork,
approximately US$11 million invested in an insurance consortium,
as well as potential estate claims and causes of action against
partners and other third parties.
Liabilities include US$225 million in obligations to secured
lenders, US$50 million in obligations to secured personal
property lessors, US$40 million in accounts payable, pension and
deferred compensation claims, and claims by employees for accrued
paid time
As of the Petition Date, it is estimated that there was
approximately US$255 million in face amount of uncollected
accounts receivable and work-in-process generated by the firm's
U.S. offices. The firm intends to use cash collateral to
facilitate the collection of its accounts receivable and continue
the orderly wind-down.
DEWEY & LEBOEUF: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Dewey & LeBoeuf LLP
1301 Avenue of the Americas
New York, NY 10019
Bankruptcy Case No.: 12-12321
Type of Business: Dewey & LeBoeuf was formed by the 2007 merger
of Dewey Ballantine LLP and LeBoeuf, Lamb,
Greene & MacRae LLP. At its peak, Dewey
employed about 2,000 people -- roughly 1,000
lawyers in 25 offices across the globe and the
other half support staff including legal
secretaries, mailroom clerks and paralegals.
Chapter 11 Petition Date: May 28, 2012
Court: U.S. Bankruptcy Court
Southern District of New York
Debtor's
Counsel: Albert Togut, Esq.
TOGUT, SEGAL & SEGAL LLP
One Penn Plaza
Suite 3335
New York, NY 10119
Tel: (212) 594-5000
Fax : (212) 967-4258
E-mail: alcourt@teamtogut.com
Debtor's
Claims and
Noticing
Agent: EPIQ BANKRUPTCY SOLUTIONS LLC
Estimated Assets: US$100 million to US$500 million
Estimated Debts: US$100 million to US$500 million
The petition was signed by Jonathan A. Mitchell, chief
restructuring officer.
Dewey & LeBoeuf LLP's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Pension Benefit Guaranty Pension Claim US$80,000,000
Corporation
1200 K Street, N.W.
Washington, DC 20005
Tel: (202) 326-4020
E-mail: Wagner.Scott@pbgc.gov
1301 Properties Owner LP Property Taxes/ $3,778,350
1633 Broadway, Suite 1801 May Rent
New York, NY 10019
Tel: (212) 237-3105
E-mail: VMessina@paramount-group.com
Thompson Reuters Library Services- $2,362,869
610 Opperman Drive Legal Research
Eagan, MN 55123
Tel: (651) 848-7836
E-mail: Chris.Cartrett@thomsonreuters.com
Bank of America Credit Card $2,142,000
CA5-7055-08-01555
555 California Street, 8th Fl.
San Francisco, CA 94104
Tel: (415) 622-9688
E-mail: Daniel.Weiss@bankofamerica.com
HireCounsel Outsourced $1,557,371
575 Madison Ave. Staffing
New York, NY 10022
Tel: (646) 356-0510
E-mail: LMestel@mestel.com
Lexis-Nexis Library Services- $1,412,966
125 Park Ave. Legal Research
Suite 2200
New York, NY 10017
Tel: (212) 309-8100
E-mail: Carolyn.Ullerick@lexisnexis.com
Corrao Miller Outsourced $1,325,000
Wiesenthal Legal Search Staffing
Consultants, Inc.
845 Third Ave.
New York, NY 10022
Tel: (212) 328-6182
E-mail: rmiller@cmwsearch.com
1101 New York Holding LLC May Rent $830,789
c/o Louis Dreyfus Properties
LLC
1101 New York Ave NW,
Suite 909
Washington, DC 20005
Tel: (201) 470-4700
E-mail: DHapp@pgp.us.com
Diamond Personnel, LLC Outsourced $740,519
352 Seventh Avenue, 3rd Fl. Staffing
New York, NY 10001
Tel: (212) 631-7520
E-mail: RSamlin@diamondjob.com
Flik International Corp. Dining Services $673,310
Compass Group Usa
3 International Drive, #200
Rye Brook, NY 10573
Tel: (914) 935-5361
E-mail: Scott.Davis@compass-usa.com
HBR Consulting LLC Consulting $656,683
311 South Wacker Drive, 22nd Services
Fl.
Chicago, IL 60606
Tel: (312) 201-8400
E-mail: CPetrini-Poli@hbrconsulting.com
CCH Incorporated/Wolters Library Services- $653,059
Kluwer Law & Business Legal Research
2700 Lake Cook Rd.
Riverwoods, IL 60015
E-mail: mike.sabbatis@wolterskluwer.com
McMorrow & Saverese Recruiting $635,000
7299 Happy Canyon Road Services
Santa Ynez, CA 93460
Tel: (805) 693-0043
E-mail: ralphs@mcmsav.com
Williams Lea Outsourced $550,393
1 Dag Hammarskj”ld Plaza, Staffing/
8th Fl. Equipment
New York, NY 10017
Tel: (212) 351-9000
E-mail: Ken.Amman@williamslea.com
Commerzbank AG May Rent $512,063
2 World Financial Center, 31st
Fl.
New York, NY 10281
Tel: (212) 266-7200
E-mail: robert.vassallo@commerzbank.com
Shook, Hardy & Bacon LLP Services $473,696
Kansas City, MO 64108
Tel: (816) 474-6550
E-mail: JMurphy@shb.com
Adams Grayson Corporation Outsourced $422,696
1625 Eye Street, NW., Suite 600 Staffing
Washington, DC 20006
Tel: (202) 828-1112
E-mail: PGronvall@adamsgrayson.com
Emily L. Saffitz Severence $416,667
82 Washington Place, 2B Arrangement
New York, NY 10011
Tel: (212) 751-3171
E-mail: Emily.Saffitz@tklaw.com
Swiss Post Solutions Outsourced $392,601
10 E. 40th Street, 9th Floor Staffing/
New York, NY 10016 Equipment
Tel: (212) 204-0990
E-mail: art.tatge@swisspost.com
GE Asset Management Refund for Legal $362,171
1600 Summer Street, #3 Services
Stamford, CT 06905
Tel: (203) 326-2300
E-mail: Matthew.Simpson@ge.com
EUROSAIL-UK 2007-1NC: S&P Hikes Ratings on 2 Note Classes to 'B-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on Eurosail-UK 2007-1NC PLC and Eurosail-UK 2007-2NP
PLC's U.K. residential mortgage-backed securities (RMBS) notes.
"The rating actions follow our credit and cash flow analysis of
the most recent transaction information that we have received
(dated March 2012). Our analysis reflects our December 2011 U.K.
RMBS criteria. In addition, we have applied our 2010 counterparty
criteria for the transaction counterparties," S&P said.
"On Dec. 12, 2011, we placed our ratings on all classes of notes
in Eurosail-UK 2007-1NC and Eurosail-UK 2007-2NP on CreditWatch
negative following the publication of our December 2011 U.K. RMBS
criteria," S&P said.
EUROSAIL-UK 2007-1NC
"Credit enhancement has been increasing across all classes of
notes due to the deleveraging of the transaction, and as of March
2012, the reserve fund has been replenished to its target level
and excess spread has begun to build up. Total arrears reached a
peak in March 2009 at 49%, and since then have remained
relatively flat. However, we have projected arrears in our
analysis, due to an upward trend in 120+ day arrears and
repossessions in each of the past two quarters," S&P said.
"We have removed from CreditWatch negative our ratings on all
classes of notes in Eurosail-UK 2007-1NC," S&P said.
"We have affirmed our 'AA-' (sf) rating on the class A3 notes,
which is capped at the level of the issuer credit rating (ICR) on
Barclays Bank PLC (A+/Stable/A-1) plus one notch, due to the
currency swap agreement failing to comply with our 2010
counterparty criteria," S&P said.
"We have also affirmed our ratings on the class B1 and C1 notes
at 'BBB (sf)' and 'BB (sf)' respectively, and lowered our rating
on the class D1 notes to 'B- (sf)'," S&P said.
"We have raised our rating on the class DTc excess spread notes
to 'BBB (sf)'; we expect these notes to pay down in the short-
term, as the current outstanding balance is GBP1.25 million. This
rating action also considers the potential levels of excess
spread available to pay down the class DTc notes in future
periods, following the replenishment of the reserve fund to its
target level as of March 2012," S&P said.
"We have raised our ratings on the class E1 and ETc notes to 'B-
(sf)' from 'D (sf)', as we do not expect these notes to default
in the short term, and accounting for the fact that the reserve
fund is at its target level," S&P said.
"We have affirmed our 'CCC (sf)' rating on the deferrable-
interest FTc notes," S&P said.
Eurosail-UK 2007-1NC is backed by nonconforming U.K. residential
mortgages originated by Preferred Mortgages Ltd., Southern
Pacific Personal Loans Ltd., Matlock Bank Ltd., Southern Pacific
Mortgages Ltd., and Langersal No. 2 Ltd.
EUROSAIL-UK 2007-2NP
"On Oct. 28, 2011, we raised our rating on the cross currency
swap counterparty, Swiss Re, to 'AA-/Stable/A-1+' from
'A+/Positive/A-1'. However, as the swap documentation is not
compliant with our 2010 counterparty criteria, the maximum
achievable rating for all classes of notes in this transaction is
equal to the ICR on Swiss Re plus one notch. Therefore, we have
raised our ratings on the class A2a, A2c, A3a, A3c, M1a, and M1c
notes to 'AA (sf)'," S&P said.
"We have applied our December 2011 U.K. RMBS criteria for this
transaction, and this has resulted in the required credit
enhancement levels increasing for each rating level. This
increase in required credit coverage, along with our updated
recession timing assumptions, has led us to lower our ratings on
the class C1a, D1a, D1c, and E1c notes," S&P said.
"The arrears performance for this transaction has been close to
the level of the U.K. RMBS nonconforming index. Total arrears
reached a peak in June 2009 at 26.20%, and have since decreased
slightly and flattened. However, in the first quarter of 2012,
there was an increase in total arrears to 24.98%, from 23.43% in
December 2011, and we have therefore increased our forecasted
arrears assumptions as part of our analysis," S&P said.
"The reserve fund has so far been drawn twice, most recently in
September 2009 and previously in December 2008. From late 2008
and throughout 2009, a large amount of losses were realized, and
this contributed to the draws on the reserve fund. Cumulative
losses have since slowed down and are currently at 3.03%,
although they are still increasing slightly. The reserve fund is
currently fully funded, and excess spread has been about 1% per
year since March 2010," S&P said.
"For both transactions, the documented required short-term rating
for a bank account provider is 'A-1+'. We understand that the
relevant transaction parties are in the final stages of taking
remedial action, following the downgrade of Barclays Bank PLC to
'A-1'. Failure to remedy the downgrade of Barclays could result
in future rating action," S&P said.
Eurosail-UK 2007-2NP is backed by nonconforming U.K. residential
mortgages originated by Preferred Mortgages Ltd., Matlock Bank
Ltd., Southern Pacific Mortgages Ltd., and GMAC Residential
Funding Co. Ltd.
CREDIT STABILITY
"Our credit stability analysis indicates that the maximum
projected deterioration that we would expect at each rating level
for time horizons of one year and three years, under moderate
stress conditions, are in line with our credit stability
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 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
Eurosail-UK 2007-1NC PLC
EUR552.15 Million, GBP357.3 Million Mortgage-Backed Floating-Rate
Notes, Excess-Spread-Backed Floating-Rate Notes
Rating Raised and Removed From CreditWatch Negative
DTc BBB (sf) B (sf)/Watch Neg
Ratings Raised
E1c B- (sf) D (sf)
ETc B- (sf) D (sf)
Ratings Affirmed and Removed From CreditWatch Negative
A3a AA- (sf) AA- (sf)/Watch Neg
A3c AA- (sf) AA- (sf)/Watch Neg
B1a BBB (sf) BBB (sf)/Watch Neg
B1c BBB (sf) BBB (sf)/Watch Neg
C1a BB (sf) BB (sf)/Watch Neg
Rating Affirmed
FTc CCC (sf) CCC (sf)
Ratings Lowered and Removed From CreditWatch Negative
D1a B- (sf) B (sf)/Watch Neg
D1c B- (sf) B (sf)/Watch Neg
Eurosail-UK 2007-2NP PLC
EUR480.7 Million, GBP267.575 Million
Mortgage-Backed Floating-Rate Notes and
an Overissuance Excess Spread Backed Floating-Rate Notes
Ratings Raised and Removed From CreditWatch Negative
A2a AA (sf) AA- (sf)/Watch Neg
A2c AA (sf) AA- (sf)/Watch Neg
A3a AA (sf) AA- (sf)/Watch Neg
A3c AA (sf) AA- (sf)/Watch Neg
M1a AA (sf) AA- (sf)/Watch Neg
M1c AA (sf) AA- (sf)/Watch Neg
Ratings Affirmed and Removed From CreditWatch Negative
B1a A+ (sf) A+ (sf)/Watch Neg
B1c A+ (sf) A+ (sf)/Watch Neg
Ratings Lowered and Removed From CreditWatch Negative
C1a BBB (sf) A- (sf)/Watch Neg
D1a B (sf) B+ (sf)/Watch Neg
D1c B (sf) B+ (sf)/Watch Neg
E1c B- (sf) B (sf)/Watch Neg
NR-Not rated.
HASTIE GROUP: Appoints Voluntary Administrators
-----------------------------------------------
The Hastie Group of companies appointed David McEvoy
[ dmcevoy@ppbadvisory.com ], Craig Crosbie
[ ccrosbe@ppbadvisory.com ], and Ian Carson
[ icarson@ppbadvisory.com ] of PPB Advisory as Voluntary
Administrators of all of the Australian entities of Hastie Group
on May 28, 2012.
Peter Anderson [ panderson@mcgrathnicol.com ], Joseph Hayes
[ jhayes@mcgrathnicol.com ], Jason Preston
[ jpreston@mcgrathnicol.com ], and Matthew Caddy
[ mcaddy@mcgrathnicol.com ] of McGrathNicol were appointed
Receivers and Managers over a limited number of trading
businesses within the Hastie Group by a syndicate of secured
creditors on May 28, 2012. Those businesses are Spectrum Fire and
Safety, Hastie Services, Gordon Brothers Industries and Austral
Refrigeration.
McGrathNicol said the control of those businesses now rests with
the Receivers who intend to continue to trade each one on a
"business as usual" basis whilst moving quickly to prepare them
for public sale to secure their future. A sale process for the
Austral business was commenced prior to the appointment and the
Receivers intend to quickly complete that process.
"Importantly, control of the rest of the Hastie Group, including
the listed entity, its construction, electrical and plumbing
businesses known as MEP, and its Middle East operations rests
with the Voluntary Administrators, not the Receivers. Rotary UK
and Ireland are standalone, profitable businesses with liquidity
headroom and continue to trade as normal under the control of the
directors. Over the coming weeks an orderly process will be
carried out to sell the Rotary UK and Ireland businesses as going
concerns.
"I would like to assure customers and employees that our
appointment allows the Spectrum, Services, Gordon Brothers and
Austral businesses to continue to operate with minimal disruption
while we run an orderly sale campaign for each business. We do
not expect to make any significant structural changes to the
businesses or their workforces," Mr. Peter Anderson, Partner at
McGrathNicol, said.
Efforts to Save 2,700 Jobs
Herald Sun reports that administrators for the Hastie Group said
one of their first priorities will be to keep the troubled
company's 2,700 workers employed.
Administrator PPB Advisory announced Monday it would suspend
Hastie's Australian mechanical, electrical and plumbing
operations, after determining there were insufficient funds to
continue to operate the businesses, Herald Sun reports.
Herald Sun relates that PPB said staff across the businesses had
been informed formally of the job cuts.
According to Herald Sun, Mr. Carson said it was hoped many of the
workers would continue to be employed on ongoing contracts.
"Our first priority is to get them back into work," the report
quotes Mr. Carson as saying. "In the meantime, we remain acutely
aware of Hastie Group's role on major construction projects and
are assessing those urgently. We will provide an update to
employees and other affected parties as soon as possible."
AUD20-Million Employee Fraud
Meanwhile, Herald Sun reports that Hastie Group had been in talks
with banks and new investors to extend its loans last week, but
they broke down when Hastie discovered an employee had been
falsifying accounts.
The discrepancies are believed to have totalled a AUD20 million
charge to profits this financial year, the report relays.
Two directors, Lindsay Phillips and Harry Boon, left the company
on Friday, Herald Sun discloses.
Collapse to Hit Big Four Banks
Herald Sun, citing a report from Fairfax, discloses that the
crunch is set to hit the big four banks with an estimated
AUD250 million in writedowns, with Hastie's biggest lender ANZ
understood to be owed AUD150 million.
Other lending banks -- including Commonwealth Bank, National
Australia Bank, Westpac, Bank of Scotland, Ulster Bank, HSBC
Australia and HSBC Middle East -- are owed an estimated
AUD500 million, Herald Sun notes.
About Hastie Group
Hastie Group provides technical and engineering services to the
building, infrastructure and resources sectors. It has operations
in Australia, New Zealand, the United Kingdom, Ireland and the
Middle East and has approximately 7,000 employees worldwide
including approximately 4,000 in Australia.
IA GLOBAL: Unable to File Reports Due to Cash Woes
--------------------------------------------------
IA Global, Inc., was not able to timely file its annual report on
Form 10-K for the fiscal year ended March 31, 2011, which was
originally due to be filed with the SEC on June 29, 2011.
The current delay is the result of the Company's lack of adequate
cash, necessary to re-engage its independent registered public
accounting firm, and other related resources, necessary to
complete the audit of consolidated financial statements for the
year ended March 31, 2011, which are required to be included in
its 2011 Form 10-K. In addition, as a result of lack of funds,
the Company has not been able to file its quarterly reports, and,
no assurance can be made that the Company will be able to file
its annual report on Form 10-K for the year ended March 31, 2012,
as well. The Company believes, however, that it has
substantially overcome the original delays due to administrative
complications and the logistical challenges inherent in
performing a full audit in Japan and the US. No assurance can be
made however, that an audit will be completed or that the Company
will be able to fund its complete audit.
The Company said its inability to file reports is likely to cause
further illiquidity, and difficulty in raising capital, as well
as added costs in becoming current with its reports. Moreover,
difficulty in raising capital and illiquidity of the Company's
shares will adversely affect the Company in that, among other
ways, the company will not be able to fend off claims against it
or settle them with liquid capital.
Entry of Judgment by Fusion Systems Japan KK
As previously disclosed by the Company, on July 15, 2011, and as
a result of a previous claim brought against it by Fusion Systems
Japan K.K., the Company entered into a settlement agreement and
Stipulation for Entry of Judgment with Fusion Systems Japan K.K.,
a Japanese corporation which called for IA Global to complete its
installment payments totaling an aggregate of US$205,000. The
Stipulation provided, among other things, that Fusion Japan may
enter a judgment as against the Company if the settlement amount
was not paid. As IA Global did not have sufficient funds to
satisfy the settlement requirements, and, as the Company's
financial condition in Asia continued to deteriorate in the wake
of the tsunami in 2011, Fusion Japan entered a judgment as
against the Company in the Superior Court of the State of
California, County of San Francisco, in the amount of US$205,000
dollars, plus interest, on Aug. 25, 2011.
Employee Claim for $167,598
In September 2011, Mark Scott, the Company's former CFO,
initiated a claim as against the Company in the Superior Court of
the State of California, County of Santa Clara (Mark Scott vs.
I.A. Global, Case No. 111CV208827) for employment related wages.
The complaint alleged a breach of his employment contract and
non-payment/untimely payment of employee wages due of US$157,961.
On Oct. 31, 2011, a request for entry of default was entered
against the Company relating to said complaint in the sum of
US$167,598, which included attorneys fees and interest. The
Company is in continued discussions with Mr. Scott, however,
while the Company believes that Mr. Scott's suit is without
merit, the Company has little ability to defend against it. The
Company is attempting to negotiate settlement with Mr. Scott,
however, no assurance can be made that a settlement will be
reached.
Notice of Possible Claim
As previously disclosed, on Dec. 17, 2010, the Company entered
into a Share Exchange Agreement with Innovative Software Direct
PLC, a UK Company, as seller, of PowerDial Services Limited, a UK
company, in exchange for, among other consideration, 2,400,000
shares of common stock of the Company, as reflected by stock
certificate IA 3101. The Company, as consideration for the
closing of the ISD Exchange, deposited the Consideration Shares
in trust with ISD, in addition to making certain loans to ISD, in
the amount of US$150,000 to ISD. ISD subsequently went into
insolvency and liquidation proceedings in the UK after the
closing of the transaction. Subsequently, in September of 2011,
the Company was notified of the proposed insolvency proceedings
by the UK administrator, Bigbies Traynor of the assets of ISD,
which included Powerdial. The UK Administrator advised that it
chose not to recognize the sale, and the Company was offered an
opportunity to credit bid any receivables owed to it towards the
acquisition of Powerdial. The Company, through its UK and US
counsel, advised the UK Administrator that any attempt to unwind
the Company's acquisition of Powerdial will require the return of
all IA Global shares received by ISD as part of the original
acquisition and that IA Global reserves any and all of its
rights, without prejudice. Nevertheless, the auction for
Powerdial took place in October of 2011. The Company remains a
creditor of Powerdial and its parent, to the extent of
approximately US$150,000.
Stop Transfer Order
The UK Administrator originally advised the Company that, if the
Company would be outbid in the auction of Powerdial, it would
return the Consideration Shares. Nonetheless, the UK
Administrator has refused to return the Consideration Shares.
Accordingly, the Company has effectuated and implemented a stop
transfer order on the Consideration Shares (Stock Cert. No. IA
3101 issued in the name of Innovated Software Direct PLC).
The Company has provided notice to the UK Administrator to the
effect that: the Consideration Shares are not fully paid for or
duly issued, as the Company, apparently, never received
consideration for ISD Exchange; any attempt to transfer or to
even deposit or encumber the same would be unlawful both civilly
and criminally; and, that a stop transfer order has been
effectuated with the Company's transfer agent. While the UK
Administrator has failed to return the Consideration Shares,
which are still in the name of ISD, it has also advised that it
has not yet attempted to liquidate the shares as of this time.
In addition to the stop transfer order already in place, the
Company intends on pursuing Chancery Court proceeding in Delaware
to void and cancel the Consideration Shares and to seek damages,
if appropriate.
The Company has reserved all rights as against the UK
Administrator, ISD and its management. The Company remains an
unsecured creditor of Powerdial, to the extent of US$150,000
loaned to it. No assurance can be made that this amount will be
repaid.
Claim Initiated by Glen Espino
On Dec. 9, 2011, an employee arbitration claim was initiated on
behalf of a former employee in the Philippines, Mr. Glen Espino
as against IA Global, Inc. et. al., with the American Arbitration
Association, County of San Francisco Office (Glen Espino vs. IA
Global, Inc. and Does 1-20, Case No. 50 166T 0074411). The
complaint alleges, a claim for damages as a result of an alleged
breach of an employment contract between the Company and Mr.
Espino, resulting from his early termination and non payment of
salary. Total damages alleged are approximately US$120,000.
While the Company believes that this claim is without merit, the
Company has limited funds and resources to defend this action.
Moreover, the Company is cautious in that statutory and case law
in California tend to run in particular favor of the employee.
While the Company is cognizant of the fact that the foregoing
will constitute a material impairment to its assets, it is
currently unable to provide a good faith estimate of the dollar
amount of the impairment, except that the same exceeds $300,000.
The Company is exploring a variety of strategic alternatives,
including the potential liquidation of certain of the Company's
subsidiaries, assets or acquisition of other entities.
New York State Tax Levy
The Company has also received notice of a New York State Tax Levy
in the amount of $34,738, inclusive of penalties, from 2003. The
Company does not believe that this liability is owed and believes
that it has a meritorious defense to the same.
Resignation of Other Director
On Sept. 16, 2011, Mr. Jack Henry resigned as a member of the
Board of Directors, effective as of Sept. 16, 2011. Mr. Henry's
resignation from the Board was not due to any disagreement with
the Company relating to the Company's operations, policies or
practices.
Termination of Contract
Mr. Brian Hoekstra's employment agreement terminated on Sept. 4,
2011. Mr. Hoekstra remains a Secretary and director of the
company and has resigned from all other positions and
responsibilities as of such date.
About IA Global
San Francisco, Calif.-based IA Global, Inc. (OTCQB: IAGI.OB)
-- http://www.iaglobalinc.com/-- is a global services and
outsourcing company focused on growing existing businesses and
expansion through global mergers and acquisitions. The Company
is utilizing its current partnerships to acquire growth
businesses in target sectors and markets at discounted prices.
The Company is actively engaging in discussions with businesses
that would benefit from our business acumen and marketing
expertise, knowledge of Asian Markets, and technology
infrastructure.
The Company's balance sheet at Dec. 31, 2010 showed US$21.51
million in total assets, US$19.14 million in total liabilities
and US$2.37 million in total stockholders' equity.
As reported in the Troubled Company Reporter on July 20, 2010,
Sherb & Co., LLP, in New York, expressed substantial doubt about
the Company's ability to continue as a going concern, following
the Company's results for the fiscal year ended March 31, 2010.
The independent auditors noted that the Company has incurred
significant operating losses, and has a working capital deficit
as of March 31, 2010.
KENSINGTON MORTGAGE: S&P Cuts Rating on Class B2 Notes to 'B-'
--------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on all classes of notes issued by Kensington Mortgage
Securities PLC, series 2007-1.
"The rating actions follow our credit and cash flow analysis of
the most recent transaction information that we have received
(February 2012). Our analysis reflects the application of our
December 2011 U.K. residential mortgage-backed securities (RMBS)
criteria," S&P said.
"In addition, we have applied our 2010 counterparty criteria,
given the liquidity facility provider in the transaction," S&P
said.
"On Dec. 12, 2011, we placed on CreditWatch negative our ratings
on all classes of notes in the transaction following the
application of our U.K. RMBS criteria," S&P said.
"On Dec. 21, 2011, we also placed on CreditWatch negative our
ratings on the class A3 and M1 notes for counterparty reasons
following the lowering of our long-term counterparty rating on
the liquidity facility provider, Barclays Bank," S&P said.
CREDIT AND CASH FLOW ANALYSIS
"Credit enhancement has more than doubled across all classes of
notes due to the deleveraging of the pool. The transaction is
currently paying sequentially as 90+ day arrears have breached
the documented trigger of 22.5% (arrears are 28.95%). The reserve
fund is fully funded and is nonamortizing as a result of the
documented cumulative losses trigger (1.25%) being breached.
Additionally, we note that the transaction is generating
considerable excess spread," S&P said.
"Severe arrears (90+ days) have remained relatively stable since
our previous review in July 2011, but remain high compared with
other similar transactions. We expect severe arrears to remain at
their current levels, or increase, due to downside risks for U.K.
nonconforming borrowers. These risks include inflation, weak
economic growth, high unemployment, and fiscal tightening," S&P
said.
"In our analysis, our credit adjustments lead to a lower
weighted-average foreclosure frequency and a higher weighted-
average loss severity due to an increase in our market-value
decline assumptions. Overall, these factors lead to an increase
in the required credit enhancement at each rating level, as per
our U.K. RMBS criteria," S&P said.
COUNTERPARTIES
"The liquidity facility documentation does not comply with our
2010 counterparty criteria. We have analyzed the transaction,
both with and without the benefit of the liquidity facility. In
situations, where the notes require the benefit of the facility
we cap the ratings on those notes at the issuer credit rating
(ICR) on the liquidity facility provider -- in this instance --
Barclays Bank (A+/Stable/A-1)," S&P said.
In addition, the language in the currency and basis swap
documentation does not comply with our 2010 counterparty
criteria.
CREDIT STABILITY
"According to our credit stability analysis, the maximum
projected deterioration we would expect at each rating level for
time horizons of one year and three years, under moderate stress
conditions, are in line with our credit stability criteria," S&P
said.
RATING ACTIONS
"We have raised to 'A- (sf)' from 'BBB (sf)' and removed from
CreditWatch negative our rating on the class M2b notes as these
notes pass our cash flow scenarios at a level that is
commensurate with a 'A- (sf)' rating under our U.K. RMBS
criteria," S&P said.
"We have lowered to 'A+ (sf)' and removed from CreditWatch
negative our ratings on the class A3 and M1 notes following our
cash flow analysis and the application of our 2010 counterparty
criteria. Our ratings on these notes are capped at the same
rating level as the ICR on the liquidity facility provider," S&P
said.
"We have also lowered and removed from CreditWatch negative our
ratings on the class B1 and B2 notes as these classes failed to
pass our cash flow stresses in the delayed recession run, when we
applied defaults three years after the most recent interest
payment date," S&P said.
Kensington Mortgage Securities series 2007-1 is backed by
nonconforming U.K. residential mortgages originated by Kensington
Mortgage Co. Ltd., Money Partners Ltd., and Money Partners Loans
Ltd.
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 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
Kensington Mortgage Securities PLC
EUR492.1 Million, GBP236.3 Million, US$465 Million Mortgage-
Backed Floating-Rate Notes Series 2007-1
Rating Raised and Removed From CreditWatch Negative
M2b A- (sf) BBB (sf)/Watch Neg
Ratings Lowered and Removed From CreditWatch Negative
A3a A+ (sf) AA- (sf/Watch Neg
A3b A+ (sf) AA- (sf/Watch Neg
A3c A+ (sf) AA- (sf/Watch Neg
M1a A+ (sf) AA- (sf)/Watch Neg
M1b A+ (sf) AA- (sf)/Watch Neg
B1a B (sf) BB (sf)/Watch Neg
B1b B (sf) BB (sf)/Watch Neg
B2 B- (sf) B (sf)/Watch Neg
KETTERING TOWN: To Enter Into Company Voluntary Arrangement
-----------------------------------------------------------
Northamptonshire Telegraph reports that Kettering Town are set to
play in the Evo-Stik Southern League Premier Division next season
after it was confirmed the club will be entering a Company
Voluntary Arrangement (CVA) to clear their debts.
George Rolls, who is in full control of the club, laid out the
plan to supporters at a hastily-arranged fans forum at Nene Park
on Monday night, Northamptonshire Telegraph relates.
Mr. Rolls revealed the full debt of the club stands at GBP1.2
million but all current and previous directors have agreed to
write off their loans, leaving the Poppies with GBP402,000 to
clear -- a figure that will be dealt with by a CVA over three
years, Northamptonshire Telegraph dislcoses.
The CVA is set to be confirmed on June 7 and Rolls believes
creditors are likely to receive "around 10 pence in the pound" as
part of the agreement, according to Northamptonshire Telegraph.
Mr. Rolls, who revealed he has put a "six-figure sum" into the
club also moved to clear up the situation over the delay over the
transfer of shares from former chairman Imraan Ladak,
Northamptonshire Telegraph notes.
Kettering Town Football Club is a football club originating in
Kettering, Northamptonshire.
LANSDOWNE HOTEL: In Administration, Ceases Trading
--------------------------------------------------
Demotix News reports that Lansdowne Hotel in Belfast, part of the
Welcome Group, has gone into administration without notice. In a
statement, the hotel's directors had taken the decision to cease
trading, according to the report.
The report notes that 35 staff members have been made redundant
without notice, and a large number of weddings, parties and other
functions have been cancelled. However, Demotix News says that
although the owners said that they will refund deposits paid,
this process may take a number of months.
Demotix News discloses that the group said that the hotel would
be "closed for the foreseeable future until a new owner is found
for the property". A meeting of creditors is due to take place
on Friday, June 1, to appoint a liquidator to the Lansdowne hotel
and Belfast-based accountancy firm McKeague Morgan has been
appointed as administrators, Demotix News says.
LCP PROUDREED: S&P Lowers Rating on Class D Notes to 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
all classes of notes in commercial mortgage-backed securities
(CMBS) transaction LCP Proudreed PLC. "At the same time, we
removed from CreditWatch negative our rating on the class A
notes," S&P said.
"LCP Proudreed is a secured loan transaction backed by two loans,
which mature in August 2014. The note legal final maturity date
is in August 2016. The rating actions follow our review of the
two loans and their real estate collateral," S&P said.
"Despite what we consider to be the healthy interest coverage
that both loans benefit from, the values of the collateral pools
securing both loans have reduced since our previous review. This
is principally because of the secondary nature of the locations
in which the buildings are situated, notwithstanding the
comparably stable history of occupancy and cash flow. Secondary
locations have experienced a more pronounced market value decline
than prime locations," S&P said.
"Because both property pools are characterized by leases with
short terms on average, there will be a significant amount of
lease expiries in the short to medium term. As a result, about
50% of the rental income falls away before the note maturity
date. Although the experience of the property manager may
mitigate these factors to a certain extent, we believe that they
make the portfolios more difficult to refinance," S&P said.
"Following our review of this transaction, we believe the
secondary nature of the property locations, combined with the
lease expiry profiles, render the loans less likely to be
successfully refinanced at their loan maturity date in August
2014. We have therefore lowered our ratings on all classes of
notes, S&P said.
THE LCP LOAN
The LCP loan makes up 86% of the combined loan balance. The 110
properties securing this loan are located across the U.K., with
concentrations in southeast England and the West Midlands.
The cash flow is granular: There is currently no significant
exposure to a single tenant among the 590 occupants. The largest
tenant accounts for only 7.6% of the total income, and the top 10
tenants account for 27.9%. The vacancy rate by area is 9.1%.
The weighted-average lease term is 6.7 years, but 14% of the
rental income is either on a rolling basis, or subject to lease
renewal in the immediate future. Of the rental income, 41%
expires by loan maturity, and 56% by note maturity.
The portfolio is management-intensive, given the large number of
leases and comparably short terms. In the most recent quarter,
92,655 sq ft became vacant. At the same time, 31,444 sq ft were
newly let, while leases covering 370,565 sq ft were extended and
renewed.
The interest coverage ratio is relatively high at 4.07x, when
compared with other loans in European CMBS. However, the increase
in the interest coverage ratio since closing is mainly due to an
improved interest expense amount, rather than a rise in cash
flow. Of the loan balance, 70% is hedged via an interest rate cap
at 6%, and the actual interest rate is now much lower than at
closing. The remainder is hedged via a swap.
THE PROUDREED LOAN
The Proudreed loan makes up 14% of the combined loan balance. The
properties securing this loan are located in England and Wales,
with the highest concentration in southeast England (74% by total
asset value).
Asda Stores Ltd. is the largest tenant, accounting for 37.2% of
the rent, with only one store. Asda is part of the Walmart Group
(AA/Stable/A-1+). There are 91 tenants in total, and the 10
largest tenants account for 66% of the rent. The vacancy rate by
area is only 3.8%, which is low for this asset type.
The weighted-average lease term is 8.2 years, and 5.5% of the
rental income is either on a rolling basis, or subject to lease
renewal in the immediate future. Of the rental income, 37%
expires by loan maturity, and 48% by note maturity.
The interest coverage ratio is 3.72x, but like the LCP loan, this
is more due to a reduced interest burden than an increased
income. Of the loan balance, 70% is hedged via an interest rate
cap at 6%, and the actual interest rate is now much lower than at
closing. The remainder is hedged via a swap.
COUNTERPARTY RISKS
"On Jan. 31, 2012, we placed our 'AA (sf)' rating on the class A
notes on CreditWatch negative following the rating actions we
took on banks on Nov. 29, 2011," S&P said.
"Because we lowered our rating on the class A notes, counterparty
risk no longer constrains our rating on these notes. As a result,
we have removed our rating on these notes from CreditWatch
negative," S&P said.
POTENTIAL EFFECTS OF PROPOSED CRITERIA CHANGES
"We have taken the 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
Class Rating
To From
LCP Proudreed PLC
GBP322 Million Commercial Mortgage-Backed Secured Floating-Rate
Notes
Ratings Lowered
B BBB (sf) A (sf)
C BB- (sf) BBB- (sf)
D B+ (sf) BB+ (sf)
Rating Lowered and Removed From CreditWatch Negative
A A (sf) AA (sf)/Watch Neg
MATHIESONS: More Than 240 Jobs Saved Following Restructuring
------------------------------------------------------------
Perry Gourley at The Scotsman reports that more than 240 jobs
have been saved after Mathiesons that went into administration
was restructured.
Mathiesons, which had 28 shops mainly in central Scotland, called
in the administrators on Friday -- the second time in two years
that the firm had hit financial troubles, the Scotsman notes.
On Monday, it was announced that part of the firm has been sold
to Prestige Bakeries -- owned by investment group Pemberton
Capital, which last year became the majority owner of Mathiesons,
the Scotsman relates.
Mathiesons' headquarters and production center in Larbert is
included in the deal, along with eight stores -- one of which is
at the headquarters site, the Scotsman discloses.
The Scotsman notes that while the sale safeguards more than 240
jobs, there will be 84 redundancies as the administrator said
there was no option but to close the 20 stores that remain
unsold.
"The early sale of the business is a positive outcome from what
has been a difficult period for the company and its staff," the
Scotsman quotes Blair Nimmo, joint administrator and head of
restructuring for KPMG in Scotland, as saying. "The business was
in a severe degree of distress but the deal represents the best
outcome for the company's creditors."
Based in Stirlingshire, Mathiesons Bakeries made a range of
products from cakes and pastries to savories. It was established
in Falkirk in 1872, according to The Scotsman.
MORTGAGES NO. 6: S&P Lowers Rating on Class E Notes to 'BB-'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on Mortgages No. 6 PLC's
class A2, B, D, and E residential mortgage-backed securities
(RMBS) notes. "At the same time, we affirmed and removed from
CreditWatch negative our rating on the class C notes," S&P said.
"The rating actions follow our credit and cash flow analysis of
the most recent transaction information that we have received for
the transaction (as of January 2012). Our analysis reflects the
application of our U.K. residential mortgage-backed securities
(RMBS) criteria. In addition, we have applied our 2010
counterparty criteria, given our downgrades of the transaction
counterparties," S&P said.
"We previously placed our ratings on all of the notes in the
transaction on CreditWatch negative on Dec. 12, 2011, following
the application of our U.K. RMBS criteria," S&P said.
"We also previously placed our ratings on the class A2 and B
notes on CreditWatch negative for counterparty reasons, following
a breach of the documented remedy period. The CreditWatch
placement was the result of the lowering of our long-term
counterparty rating on the account bank and the liquidity
facility provider, Barclays Bank PLC, to 'A+' from 'AA-' on Nov.
29, 2011," S&P said.
CREDIT AND CASH FLOW ANALYSIS
"Due to the deleveraging of the pool, available credit
enhancement for all of the classes of notes has more than doubled
since closing. The transaction is currently paying pro rata,
although the sequential trigger is activated once 90+ day arrears
exceed 20%. At present, arrears in this bucket stand at 18.84%,
and are increasing. We have accounted for this in our cash flow
analysis. The reserve fund is currently at its minimum permitted
level, as per the transaction documents, and there is excess
spread in the transaction," S&P said.
"Total delinquencies have decreased slightly since our last
review of the transaction to 27.37% from 29.22%. The overall
decrease is largely attributable to the significant decline in
30- to 60-day arrears since our last review to 5.27% from 9.2%.
However, in the same period, we have observed an increase in 90+
day arrears by 3.46%. We expect severe arrears (i.e., 90+ day
arrears) to remain at their current levels, or increase, due to
the downside risks for nonconforming borrowers. These risks
include inflation, weak economic growth, high unemployment, and
fiscal tightening. However, overall delinquencies remain below
the level of those that we have observed in other similar
transactions," S&P said.
"In our analysis, our credit adjustments lead to a higher
weighted-average foreclosure frequency due to the lack of
seasoning in the transaction. They also lead to a higher
weighted-average loss severity due to an increase in our market-
value decline assumptions. Overall, these factors lead to an
increase
in the required credit enhancement at each rating level, as per
our U.K. RMBS criteria," S&P said.
COUNTERPARTIES
"The liquidity facility documentation does not comply with our
2010 counterparty criteria," S&P said.
"In our analysis, we would ordinarily analyze the transaction
both with, and without, the benefit of the liquidity facility in
place. In situations where the notes require the benefit of the
facility, we cap the ratings on those notes at the level of the
issuer credit rating (ICR) on the liquidity facility provider --
in this instance, Barclays Bank (A+/Stable/A-1). However, because
the bank account has breached a documented rating trigger and
Barclays Bank has not taken any remedial action, we have
therefore capped our ratings on all classes of notes at the ICR
on Barclays Bank. For this reason, we have given every class of
notes the benefit of the facility in our analysis," S&P said.
CREDIT STABILITY
"According to our credit stability analysis, the maximum
projected deterioration we would expect at each rating level for
time horizons of one year and three years, under moderate stress
conditions, are in line with our credit stability criteria," S&P
said.
RATING ACTIONS
"We have lowered to 'A+ (sf)' and removed from CreditWatch
negative our ratings on the class A2 and B notes following our
cash flow analysis and the application of our 2010 counterparty
criteria," S&P said.
"We also lowered to 'BBB (sf)' and removed from CreditWatch
negative our rating on the class D notes based on the results of
our cash flow analysis," S&P said.
"We have lowered to 'BB- (sf)' and removed from CreditWatch
negative our rating on the class E notes for credit reasons," S&P
said.
"We have affirmed at 'A+ (sf)' and removed from CreditWatch
negative our rating on the class C notes based on our credit and
cash flow analysis," S&P said.
"Mortgages No. 6 is backed by a pool of nonconforming U.K.
residential mortgages originated by Mortgages No. 1 Ltd.,
Mortgages No. 2 Ltd., Mortgages No. 3 Ltd., Mortgages No. 4 Ltd.,
Mortgages No. 5 Ltd., Mortgages No. 6 Ltd., Mortgages No. 7 Ltd.,
and Bristol & West PLC," 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 Standard & Poor's 17g-7 Disclosure Report included in this
credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com
RATINGS LIST
Class Rating Rating
To From
Mortgages No. 6 PLC
GBP595.9 Million Mortgage-Backed
Floating-Rate Notes
Ratings Lowered and Removed From CreditWatch Negative
A2 A+ (sf) AAA (sf/Watch Neg
B A+ (sf) AA (sf)/Watch Neg
D BBB (sf) BBB+ (sf)/Watch Neg
E BB- (sf) BB+ (sf)/Watch Neg
Rating Affirmed and Removed From CreditWatch Negative
C A+ (sf) A+ (sf)/Watch Neg
MORTGAGES NO. 7: S&P Affirms 'B+' Rating on Class E Notes
---------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on Mortgages No 7 PLC's
class A2, B, C, and D residential mortgage-backed securities
(RMBS) notes. "At the same time, we affirmed and removed from
CreditWatch negative our rating on the class E notes," S&P said.
"The rating actions follow our credit and cash flow analysis of
the most recent transaction information that we have received (as
of January 2012). Our analysis reflects the application of our
U.K. RMBS criteria. In addition, we have applied our 2010
counterparty criteria, given our November 2011 downgrades of the
transaction counterparties," S&P said.
"We previously placed our ratings on all of the notes in the
transaction on CreditWatch negative for credit-related reasons on
Dec. 12, 2011, following the application of our U.K. RMBS
criteria," S&P said.
"We also previously placed our ratings on the class A2 and B
notes on CreditWatch negative for counterparty reasons, following
a breach of the documented remedy period. These CreditWatch
placements were the result of the lowering of our long-term
counterparty rating on the account bank and liquidity facility
provider, Barclays Bank PLC, to 'A+' from 'AA-' on Nov. 29,
2011," S&P said.
CREDIT AND CASH FLOW ANALYSIS
"Due to the deleveraging of the pool, available credit
enhancement for all classes of notes has more than tripled since
closing. The transaction is currently paying sequentially because
the documented 90+ day delinquency trigger is greater than the
pro rata trigger of 20% (currently 25.36%). The reserve fund
remains fully funded, and there is excess spread in the
transaction," S&P said.
"Delinquencies have decreased slightly since our last review of
the transaction to 32.39% from 32.71%; total arrears have
increased to 32.93% from 32.71%. The decrease in 90 day arrears
by 22 percentage points and the decrease in 30- to 60-day arrears
by
63 percentage points since our last review is behind the decrease
in total arrears; 60- to 90-day arrears have increased by 57
percentage points. We expect severe arrears (i.e., 90+ day
arrears) to remain at their current levels due to the downside
risks for nonconforming borrowers. These risks include inflation,
weak economic growth, high unemployment, and fiscal tightening.
However, overall delinquencies remain comparable with those that
we have observed in other similar transactions," S&P said.
"In our analysis, our credit adjustments have led to a higher
weighted-average foreclosure frequency, and a higher weighted-
average loss severity, due to an increase in our market-value
decline assumptions. Overall, these factors have led to an
increase in the required credit enhancement at each rating level,
as per our 2011 U.K. RMBS criteria," S&P said.
COUNTERPARTIES
"The liquidity facility documentation does not comply with our
2010 counterparty criteria," S&P said.
"We would ordinarily analyze the transaction both with, and
without, the benefit of the liquidity facility in place. In
situations where the notes require the benefit of the facility,
we cap the ratings on those notes at the issuer credit rating
(ICR) on the liquidity facility provider--in this instance,
Barclays Bank (A+/Stable/A-1). However, because the bank account
has breached a documented rating trigger and Barclays Bank has
not taken any remedial action, we have therefore capped our
ratings on all classes of notes at the ICR on Barclays Bank. For
this reason, we have given every class of notes the benefit of
the facility," S&P said.
CREDIT STABILITY
"According to our credit stability analysis, the maximum
projected deterioration we would expect at each rating level for
time horizons of one year and three years, under moderate stress
conditions, are in line with our credit stability criteria," S&P
said.
RATING ACTIONS
"We have lowered to 'A+ (sf)' and removed from CreditWatch
negative our ratings on the class A2 and B notes, following our
cash flow analysis and the application of our 2010 counterparty
criteria," S&P said.
"We have lowered to 'A- (sf)' and removed from CreditWatch
negative our rating on the class C notes based on the results of
our cash flow analysis," S&P said.
"We have lowered to 'BBB- (sf)' and removed from CreditWatch
negative our rating on the class D notes for credit reasons," S&P
said.
"We have affirmed at 'B+ (sf)' and removed from CreditWatch
negative our rating on the class E notes based on our credit and
cash flow analysis," S&P said.
Mortgages No 7 is backed by a pool of nonconforming U.K.
residential mortgages originated by Mortgages No.1 Ltd.
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 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
Mortgages No 7 PLC
GBP757.5 Million Mortgage-Backed Floating-Rate Notes
Ratings Lowered and Removed From CreditWatch Negative
A2 A+ (sf) AAA (sf/Watch Neg
B A+ (sf) AA- (sf)/Watch Neg
C A- (sf) A+ (sf)/Watch Neg
D BBB- (sf) BBB+ (sf)/Watch Neg
Rating Affirmed and Removed From CreditWatch Negative
E B+ (sf) B+ (sf)/Watch Neg
PETROPLUS HOLDINGS: U.K. Coryton Oil Refinery May Shut Down
-----------------------------------------------------------
Nidaa Bakhsh at Bloomberg News reports that Petroplus Holdings AG
will probably shut its U.K. Coryton oil refinery, potentially
becoming Europe's sixth plant to cease operations since the start
of last year as fuel demand slumps.
According to Bloomberg, Steven Pearson, a partner at
PricewaterhouseCoopers LLP, Petroplus's U.K. administrator, said
that oil supply at the plant will run out sometime in the week
commencing June 4.
"Prospective investors in the refinery faced a significant
capital expenditure need, as well as a fragile market for refined
oil products," Bloomberg quotes Mr. Pearson as saying in an
e-mailed statement. PwC said it will continue to look for a
buyer, Bloomberg notes.
Coryton was one of five refineries in Europe operated by
Petroplus until the Swiss refiner filed for insolvency in
January, Bloomberg discloses.
The Coryton facility on the Thames River can process 175,000
barrels of crude a day, supplying about a fifth of the fuels in
the U.K.'s southeast, Bloomberg states. The site can use 65,000
barrels a day of other feedstocks, Bloomberg says, citing the
company's Web site.
No further crude deliveries are scheduled for the plant,
Mr. Pearson, as cited by Bloomberg, said, adding there are other
feedstocks available. PwC said that maintenance has been
suspended and there are likely to be substantial redundancies
among the workforce of about 500, Bloomberg relates.
Based in Zug, Switzerland, Petroplus Holdings AG is Europe's
largest independent oil refiner.
SCOTGEN DUMFRIES: UK Capital Buys Firm Out of Administration
------------------------------------------------------------
Dumfries & Galloway reports that Scotgen Dumfries Limited changes
owners after it goes into administration like its parent company.
The GBP20 million Scotgen facility at Dargavel on Lockerbie Road
is now owned by a company called UK Venturing Limited, according
to Dumfries & Galloway. The report relates that the 100%
shareholding was sold by UK Capital Venture Holdings Limited when
it, and another associated company, Ascot Environmental, were
placed into administration on May 18.
Dumfries & Galloway relays that Companies House said the new
owners, UK Venturing Limited, was incorporated as a company on
May 15. Dumfries & Galloway discloses that it has two directors
listed, James Hennessey and David Quarmby -- both of whom were
directors of UK Capital Venture Holdings Limited and Ascot
Environmental.
It's unclear if any local firms are creditors of Scotgen's former
owners, Dumfries & Galloway says. The report discloses that
neither Mr. Hennessey nor Mr. Quarmby were able to be reached for
comment yesterday.
Manchester-based Deloitte were appointed administrators of
Scotgen Dumfries' former parent company.
"Prior to the insolvencies, UK Capital Venture Holdings Limited
was the 100 per cent shareholder of Scotgen Dumfries Limited . .
. . Following the appointment of joint administrators, its
shares have been sold to UK Venturing Limited by the
administrators of UK Capital Venture Holdings Limited . . . . We
are currently working to establish the extent of Ascot's
liabilities and this will be communicated in due course to
creditors in the administrators' proposals," the report quoted a
spokesman for Deloitte as saying.
SOUTHERN PACIFIC 04-2: S&P Cuts Rating on Class E Notes to 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on Southern Pacific Securities 04-1 PLC and Southern
Pacific Securities 04-2 PLC's U.K. residential mortgage-backed
securities (RMBS) notes.
"The rating actions follow our credit and cash flow analysis of
the most recent transaction information that we have received
(dated December 2011). Our analysis reflects the application of
our December 2011 U.K. RMBS criteria. Where relevant, we have
also applied our 2010 counterparty criteria, given the recent
downgrades of certain transaction counterparties," S&P said.
"On May 2, 2012, we published an article in relation to
unresolved counterparty documentation breaches which only
affected the notes rated 'AA- (sf)' and above in these Southern
Pacific transactions. These notes remain on CreditWatch negative
for counterparty reasons," S&P said.
"The series 04-1 and 04-2 transactions have performed very
similarly. Arrears levels have been higher than the U.K. RMBS
nonconforming index, with the majority of the arrears in the 90+
days bucket (04-1 is 24.91%, and 04-2 is 25.21%). The arrears
levels have historically been high, but they have been decreasing
since reaching their peaks in March 2009. Cumulative losses have
stabilized since March 2009; they are currently 0.94% for 04-1,
and 1.67% for 04-2," S&P said.
"Due to the high 90+ day arrears levels, these transactions do
not meet their conditions to pay pro rata, and are currently
paying sequentially. We have considered the possibility of this
transaction paying pro rata at a point in the future based on
historical arrears movements, and factored this into our cash
flow analysis," S&P said.
"For both transactions, there are a significant proportion of
second-lien mortgages (04-1 is 12.92%, and 04-2 is 9.14%), which
typically have higher interest rates. As part of our cash flow
analysis, we have applied spread compression at each rating level
where we assume the higher interest rate loans will default, as
opposed to the lower interest rate loans," S&P said.
"These transactions have had multiple drawings--albeit small--on
their reserve funds during 2010 and 2011, and as of the December
2011 payment date neither reserve fund is at its target level.
The excess spread in these transactions has heavily diminished in
the past three years, due to a combination of losses, a low pool
factor, and high senior fees," S&P said.
"Both of these transactions have high levels of credit
enhancement for each respective class, due to the nonamortizing
reserve funds and the sequential payment of notes. The
application of our December 2011 U.K. RMBS criteria has increased
the required credit coverage for each rating level; However, for
series 04-1's class B notes, the large reserve fund provides
enough credit enhancement for us to raise the rating to 'BBB+
(sf)' from 'BBB (sf)'," S&P said.
"We have lowered our ratings on series 04-2's class E notes to
'BB- (sf)', as the credit enhancement is not sufficient to
address the increase in our required credit coverage at the
current rating level, following the application of our December
2011 U.K. RMBS criteria," S&P said.
"The bank account documentation for both transactions is not
compliant with our 2010 counterparty criteria, but we understand
that there are discussions--albeit with no clear timeframe--for
the transaction parties to resolve the ratings-trigger breaches.
For this reason, we have kept the notes rated 'AA- (sf)' on
CreditWatch negative. If the documents remain noncompliant with
our 2010 counterparty criteria, then the notes will be capped at
the level of the long-term issuer credit rating on the bank
account provider, Barclays Bank PLC (A+/Stable/A-1)," S&P said.
RATING ACTIONS
"We have resolved our CreditWatch negative placements for U.K.
RMBS criteria-related reasons on all notes in series 04-1 and
series 04-2," S&P said.
"Our ratings on series 04-1's class A2 and M notes, and on series
04-2's class B1b, B1c, C1a, and C1c notes, remain on CreditWatch
negative for counterparty-related reasons," S&P said.
"We have raised to 'BBB+ (sf)' from 'BBB (sf)' and removed from
CreditWatch negative our rating on series 04-1's class B notes,"
S&P said.
"We have affirmed and removed from CreditWatch negative our 'A+
(sf)' ratings on series 04-2's class D1a and D1c notes," S&P
said.
"We have lowered to 'BB- (sf)' from 'BBB (sf)' and removed from
CreditWatch negative our rating on series 04-2's class E notes,"
S&P said.
"Following the rating actions, none of our ratings on the notes
in these two transactions is on CreditWatch negative in relation
to our December 2011 U.K. RMBS criteria," S&P said.
CREDIT STABILITY
"Our credit stability analysis indicates that the maximum
projected deterioration that we would expect at each rating level
for time horizons of one year and three years, under moderate
stress conditions, are in line with our credit stability
criteria," S&P said.
Southern Pacific Securities 04-1 and 04-2 are backed by
nonconforming residential mortgages and originated by Southern
Pacific Mortgage Ltd. and Southern Pacific Loans Ltd.
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 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
Southern Pacific Securities 04-1 PLC
EUR325.7 Million, GBP215.2 Million, US$310 Million Mortgage-
Backed Floating-Rate Notes
Ratings Remaining on CreditWatch Negative[1]
A2 AA- (sf)/Watch Neg
M AA- (sf)/Watch Neg
Rating Raised And Removed From CreditWatch Negative
B BBB+ (sf) BBB (sf)/Watch Neg
Southern Pacific Securities 04-2 PLC
EUR210 Million, GBP493.5 Million, US$122.5 Million Mortgage-
Backed Floating-Rate Notes
Ratings Remaining on CreditWatch Negative[1]
B1b AA- (sf)/Watch Neg
B1c AA- (sf)/Watch Neg
C1a AA- (sf)/Watch Neg
C1c AA- (sf)/Watch Neg
Ratings Affirmed and Removed From CreditWatch Negative
D1a A+ (sf) A+ (sf)/Watch Neg
D1c A+ (sf) A+ (sf)/Watch Neg
Rating Lowered and Removed From CreditWatch Negative
E BB- (sf) BBB (sf)/Watch Neg
[1] These ratings are no longer on CreditWatch for credit and
cash flow reasons, but they remain on CreditWatch negative for
counterparty reasons.
THOMAS COOK: Future Hinges on Key Shareholder Vote
--------------------------------------------------
The Telegraph reports that Thomas Cook shareholders were set to
vote on two key disposals on yesterday, without which the company
has warned it could collapse.
The company, which appointed new chief executive Harriet Green
last Thursday, needs investors to back the planned sale and
leaseback of part of its aircraft fleet and the disposal of five
Spanish hotels, the Telegraph relates.
According to the Telegraph, Thomas Cook said in a shareholder
circular that its directors were confident that the required
majority would be achieved when investors vote on the disposals
yesterday.
Major stakeholders including fund manager Invesco, Standard Life
and Marathon have all expressed support for the resolutions, the
Telegraph notes.
Failure to support the fundraising move would jeopardize the
company's recent GBP1.4 billion deal with lenders, including
Royal Bank of Scotland and Barclays, to extend the maturity of
its bank loans to 2015, the Telegraph says.
Thomas Cook Group plc is a United Kingdom-based company. The
Company, together with its subsidiaries, is engaged in the
provision of leisure travel services. Its main brands include
Airtours, Aspro, Club 18-30, Cresta, Manos, Neilson, Sunset,
Sunworld Holidays, Swiss Travel Service, Thomas Cook, Thomas Cook
Style Collection, Thomas Cook Signature and Thomas Cook Tours.
It has six geographic operating divisions: United Kingdom,
Central Europe, West and East Europe, Northern Europe, North
America and Airlines Germany.
*********
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
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