/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/120607.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, June 7, 2012, Vol. 13, No. 113 Headlines F R A N C E EBIZCUSS.COM SA: Goes Into Court-Appointed Liquidation G E R M A N Y SOLAR MILLENNIUM: Seeks to Stop Suits in U.S. G R E E C E OMEGA NAVIGATION: Plan Filing Deadline Extended to July 20 * GREECE: Needs Second Debt Cut & "Orderly Insolvency" * Moody's Lowers Deposit, Debt Ratings on 2 Grecian Banks to Caa2 H U N G A R Y HORVATH CIPO: High-Profile Shoe Retailer Placed in Liquidation I R E L A N D ATLANTIC HOME: Files for Examinership; Five Stores Face Closure NEWELL CONSTRUCTION: Receiver to Take Control of Assets I T A L Y BANCA POPOLARE: Moody's Cuts Pref. Securities Ratings to B3(hyb) K A Z A K H S T A N BTA BANK: Executive Complains About Forged Signatures P O L A N D PBG SA: Terminates Standstill Agreement with Banks S L O V E N I A * SLOVENIA: Top 20 Builders Owe EUR900-Mil. to Banks & Partners S P A I N FONCAIXA FTGENCAT 4: Moody's Cuts Rating on EUR6MM Notes to Caa1 * SPAIN: Moody's Reviews Ratings on ABS & RMBS for Downgrade U K R A I N E VAB BANK: Moody's Affirms 'E/Caa1' Ratings; Outlook Positive U N I T E D K I N G D O M GLOBAL SHIP: 2012 Annual Shareholders Meeting Set for July 10 X X X X X X X X * EUROPE: Senior Unsecured Creditors to Take Hit Under EU Plan * Upcoming Meetings, Conferences and Seminars ********* =========== F R A N C E =========== EBIZCUSS.COM SA: Goes Into Court-Appointed Liquidation ------------------------------------------------------ Telecompaper reports that eBizcuss, Apple's biggest independent retailer in France, has gone into court-appointed liquidation with three months to find a buyer while it continues trading. Takeover offers can be made until June 20, 2012, Telecompaper says. Telecompaper recalls that the company sued Apple in April for allegedly throttling shipments after it opened Apple Stores in France. EBizcuss has been distributing Apple products for around 30 years and employs 120 people at 15 stores. ============= G E R M A N Y ============= SOLAR MILLENNIUM: Seeks to Stop Suits in U.S. --------------------------------------------- Solar Millennium AG, subject to insolvency proceedings in Germany, filed a Chapter 15 bankruptcy petition (Bankr. D. Del. Case No. 12-11722) on June 4, 2012, to stop lawsuits in the U.S. Rechstanwalt Volker Bohm, the insolvency administrator, says SMAG commenced insolvency proceedings with a local court in Germany on Dec. 31, 2011. The Furth court in February 2012 ascertained that SMAG is insolvent and over-indebted. A creditors committee that includes UniCredit Bank AG as member was appointed. SMAG is party to multiple proceedings in the U.S., pending before the Superior Court of the State of California, County of Alameda, Oakland Division, and the District Court of Clark County, Nevada. In the case pending in California, the former CEO of SMAG demands considerable damages for alleged wrongdoings against SMAG and certain of its subsidiaries. In the Nevada case, Global Finance Corp. claims compensation for an alleged breach of a joint venture agreement. =========== G R E E C E =========== OMEGA NAVIGATION: Plan Filing Deadline Extended to July 20 ---------------------------------------------------------- In connection with its Chapter 11 proceedings in Houston, Texas, Omega Navigation Enterprises Inc. and its major creditor constituencies are continuing to engage in mediation discussions concerning a potential Chapter 11 plan of reorganization. In connection with the mediation proceedings, the parties have agreed to extend various deadlines in the Chapter 11 proceedings, including the extension until July 20, 2012, of Omega's exclusive right to file a Chapter 11 plan of reorganization. The details of the mediation process remain confidential. In the meantime, the management team continues to operate the business in the ordinary course. Omega will continue to honor all of its charter obligations during the pendency of the court protection. Omega believes the Chapter 11 reorganization process will help the Company facilitate a restructuring of its balance sheet and is working towards exiting Chapter 11 as a financially stronger entity that will be positioned to enjoy future growth based on the strength of its existing modern fleet of product tanker vessels. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. * GREECE: Needs Second Debt Cut & "Orderly Insolvency" ------------------------------------------------------ According to Bloomberg News' Rainer Buergin, Finnish Foreign Minister Erkki Tuomioja told Germany's Die Zeit weekly newspaper that Greece will probably need a second debt cut and an "orderly insolvency" to return to sustainable public finances. Mr. Tuomioja, as cited by the newspaper, said in an interview that markets have already priced in a Greek default and the damage that would follow such an event would be less catastrophic than many fear, Bloomberg relates. He said that it's up to the Greeks to decide whether they want to keep the euro, Bloomberg notes. * Moody's Lowers Deposit, Debt Ratings on 2 Grecian Banks to Caa2 ----------------------------------------------------------------- Moody's Investors Service has downgraded the deposit and debt ratings of Emporiki Bank of Greece S.A. and General Bank of Greece to Caa2 from B3, with a negative outlook, reflecting risks emanating from the increasing probability of Greece exiting the euro area, as outlined in the special comment "Greek country ceiling reflects heightened risk of euro area exit" published on June 1, 2012. The rating actions conclude the review for downgrade initiated on December 15, 2011 for Emporiki and on December 16 for Geniki. Emporiki is fully-owned by Credit Agricole (Aa3 deposit rating; C- standalone bank financial strength rating (BFSR)/ baa2 baseline credit assessment (BCA), all on review for downgrade) and Geniki is majority (99%) owned by Societe Generale (A1 deposit rating, on review for downgrade; C- BFSR/baa1 BCA). Ratings Rationale As outlined in the aforementioned special comment, Moody's considers that there is a now a heightened risk of Greece exiting the euro area. Although there remains substantial incentives for the Greek authorities and euro area to avoid such an outcome, the risk of a euro exit could increase further following the June 17 Greek parliamentary elections. The main driver for the rating actions on Emporiki and Geniki is Moody's view that the increased exit risk effectively limits to Caa2 the highest rating that can be assigned to banks in Greece, regardless of parental support considerations. Although it is not Moody's base case scenario, a Greek exit would significantly augment the potential for a sharp acceleration of deposit outflows, which could lead to a deposit freeze and ultimately culminate in a currency redenomination that would entail significant losses to depositors. The imposition of a deposit freeze on Greece's banking system would prevent the parent groups from supporting the obligations of their Greek subsidiaries towards depositors and other creditors, regardless of their financial capacity or willingness to do so. Moody's also considers that the ability of the parent groups to protect depositors from redenomination risk is limited. Accordingly, despite the strong track record of French parent banks in providing funding and liquidity support over the last three years, Moody's has lowered the deposit ratings of Emporiki and Geniki to Caa2, which is commensurate with the risk level now assigned to a euro exit, effectively capping parental support uplift from their caa3 standalone credit assessment to one notch, instead of three previously. Emporiki and Geniki's deposit and debt ratings are now aligned with those of other rated domestically-owned Greek banks, which receive one notch of systemic support, taking into account capital support from the Hellenic Financial Stability Fund as well as broader central bank funding. These domestically-owned banks were not affected by the announcement given that their Caa2 ratings (negative outlook) sufficiently capture Moody's current view regarding the risk of a Greek exit. The rating outlook for the deposit and debt ratings of Emporiki and Geniki is negative, reflecting the significant downside risks in Greece's stressed operating environment and the possibility of a further increase in the risk of a Greek exit. What Could Move The Ratings Up/Down Any indication of an increase in the likelihood of Greece exiting the euro area could exert further downward pressure on the bank ratings, considering that this type of risk limits the maximum rating that can be achieved in the country. Moody's believes there is little likelihood of any upward rating momentum, either driven by increased parental support for the banks covered by the announcement, or from a strengthening of their standalone credit assessments in the currently difficult economic environment. List of Affected Ratings Emporiki Bank of Greece SA and Emporiki Group Finance plc: - Long-term deposit and senior unsecured debt ratings downgraded to Caa2 from B3 - Subordinated debt ratings downgraded to Caa3 from Caa1 - BFSR remains at E, mapping to a standalone credit strength of Caa3 All the above ratings, except the BFSR, have a negative outlook. General Bank of Greece SA: - Long-term deposit rating downgraded to Caa2 from B3 - BFSR remains at E, mapping to a standalone credit strength of Caa3 All the above ratings, except the BFSR, have a negative outlook. The methodologies used in these ratings were Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: Global Methodology published in March 2012. The two banks affected by the rating action are headquartered in Athens, Greece. As of December 2011, Emporiki Bank of Greece SA reported total assets of EUR21.7 billion, and General Bank of Greece SA reported total assets of EUR3.3 billion. ============= H U N G A R Y ============= HORVATH CIPO: High-Profile Shoe Retailer Placed in Liquidation -------------------------------------------------------------- All Hungary News reports that Horvath Cipo Kft is shutting down after 16 years in business, following a court order for its liquidation. The company, which was present in most of Hungary's shopping centers, had gone through a very bad patch in 2008-2009 but was apparently profitable in 2010. The report relates that analysts said Horvath has most likely become the victim of its pursuit of a rapid expansion policy, though obviously the overall weakness of the retail segment -- or the country's EU-record 27% VAT rate -- couldn't have helped. Hungary-based Horvath Cipo Kft is high-profile shoe retailer. The company had 81 staff. ============= I R E L A N D ============= ATLANTIC HOME: Files for Examinership; Five Stores Face Closure --------------------------------------------------------------- The Daily Business Post reports that Atlantic Home Care has filed for examinership. According to Post, Atlantic's parent company Grafton Group said that the restructuring of the chain may see the closure of five of its stores with the loss of 38 full time and 76 part time jobs. Grafton said that the restructuring is subject to agreement being reached with landlords on adjusting rents to current open market levels, Post notes. Grafton, as cited by Post, said that if the restructuring is successful it could save 234 of the 348 staff employed by Atlantic and "a smaller sustainable business can emerge from the examinership". The statement said that Atlantic accounts for 2.75% of Group revenue and has traded at a loss since 2007, Post relates. It said that the turnover of Atlantic has fallen by 44% from EUR100 million to EUR56 million in that period and it continues to trade at a loss in the current year, Post discloses. Grafton said that an independent accountants' report from KPMG on Atlantic has concluded that it is possible for a sustainable and profitable business to emerge from the examinership process based on a restructuring of the company, according to Post. Grafton said that Atlantic has no bank debt and is not part of the Group's financing arrangements and accordingly, this development will have no impact on financing and trading arrangements in the group and its other subsidiary companies in Ireland, Britain and Belgium, Post notes. Atlantic Home Care is a DIY store chain based in Ireland. NEWELL CONSTRUCTION: Receiver to Take Control of Assets ------------------------------------------------------- Donal O'Donovan at Irish Independent reports that the National Asset Management Agency has appointed a receiver to take control of a number of assets of Newell Construction. NAMA has appointed Kieran Wallace of KPMG as receiver of Newell, which is already in liquidation, Irish Independent relates. The most recent accounts filed for the company show it had bank debts of EUR26.5 million in 2009, Irish Independent notes. Documents filed with the Companies Office show that AIB, ACC, Anglo Irish Bank and Bank of Scotland (Ireland) all have charges over the company's assets, Irish Independent states. Anglo's appointment of a receiver was made following the appointment of liquidator Conor O'Boyle of O'Boyle & Associates, Irish Independent discloses. Newell Construction is based in Galway. It was owned by Marian and Patrick Newell and was involved in developments at Tuam and Headford in Co Galway and Mountrath in Co Laois. ========= I T A L Y ========= BANCA POPOLARE: Moody's Cuts Pref. Securities Ratings to B3(hyb) ---------------------------------------------------------------- Moody's Investors Service downgraded the B1(hyb) ratings of Banca Popolare di Milano's preferred securities to B3(hyb) with a negative outlook, following the bank's announcement that it will not pay the coupons due in June and July 2012. The two-notch- downgrade to B3(hyb) reflects the coupon omission this year and some uncertainty in Moody's view whether coupon payments will be resumed next year again, given the challenging operating environment. Ratings Rationale On May 29, 2012, the bank announced that, according to the terms of its 9% perpetual subordinated notes and 8.393% non-cumulative preferred securities (the latter issued by the backed vehicle BPM Capital Trust I), it will not pay its coupons due in June and July, which can be skipped at the option of the bank due to the breach of the net profit trigger. The coupons are paid annually and quarterly respectively and are non-cumulative; thus, the payments will be lost. Moody's factors two years of missed coupons into its expected loss analysis to reflect a possibility that the bank may not have distributable profits in 2013 and will opt again to skip the coupon. The outlook remains negative, primarily reflecting the negative outlook on the bank's standalone credit assessment of ba1 as well as the possibility of missed coupons for a longer period of time. The methodologies used in this rating were Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: Global Methodology published in March 2012. Banca Popolare di Milano is headquartered in Milan, Italy. At March 31, 2012 it had total assets of EUR53 billion. =================== K A Z A K H S T A N =================== BTA BANK: Executive Complains About Forged Signatures ----------------------------------------------------- Nariman Gizitdinov at Bloomberg News reports that a senior BTA Bank executive said his signatures were forged last year and used to backdate documents in the months the Kazakh lender sought to staunch a capital deficit that forced its second debt restructuring in December. According to Bloomberg, three people directly familiar with the matter said that the official, who served on the bank's management board, filed a complaint after discovering the fraudulent use of his electronic signatures in May 2011. Citing commercial confidentiality, BTA declined to confirm or deny the existence of any complaint or internal investigation, Bloomberg notes. BTA said that the technological procedure of using electronic signatures has several layers of protection that require the sanction or direct participation of the vote-wielding member of the management board, Bloomberg relates. It said that the lender's information system also precludes unauthorized access to data systems and employees' personal computers, according to Bloomberg. The allegations raise questions about the bank's controls and oversight following state takeover of the country's biggest lender before its default on US$12 billion of debt in 2009, Bloomberg states. Almaty-based BTA proposed a second restructuring in December to stave off bankruptcy and failed to make an interest payment on its July 2018 dollar bonds in January, Bloomberg recounts. Kazakhstan's state-owned wealth fund Samruk-Kazyna injected KZT883 billion (US$6 billion) to raise BTA's equity capital in 2009 and 2010, the equivalent of about 4% of gross domestic product, Bloomberg discloses. BTA, which also defaulted in April on US$5.2 billion of so-called recovery notes, predicts its capital shortfall may reach about US$6 billion by the end of 2012, compared with a January estimate for a deficit of US$5.1 billion, according to Bloomberg. About BTA Bank BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO -- http://bta.kz/-- is a Kazakhstan-based financial institution, which is involved in the provision of banking and financial products for private and corporate clients. =========== P O L A N D =========== PBG SA: Terminates Standstill Agreement with Banks -------------------------------------------------- Marta Waldoch and Maciej Martewicz at Bloomberg News report that PBG SA said its standstill agreement signed on May 14 with banks was terminated after two creditors, Polski Bank Przedsiebiorczosci SA and Bank Gospodarki Zywnosciowej SA, withdrew from the arrangement. In a separate report, Bloomberg News' Mr. Martewicz relates that Analizy Online, the company that tracks local funds, said the bankruptcy of PBG may cause losses at 32 mutual funds that invested more that PLN500 million in the company's bonds. As reported by the Troubled Company Reporter-Europe on June 6, 2012, Bloomberg News disclosed that PBG decided to file for bankruptcy to help reach an agreement with creditors to cut debt by as much as 31%. PBG said in a regulatory filing on Monday that the company is proposing to honor 69% of its debt to creditors owed more than PLN1 million (US$282,700), 80% to those owned from PLN100,000 to PLN1 million and 100% for those owned lesser sums, Bloomberg noted. PBG Chief Financial Officer Przemyslaw Szkudlarczyk said on Monday that PBG's unconsolidated debt, which doesn't include the borrowings of its unit, amounts to PLN1.5 billion, Bloomberg related. According to Bloomberg, Kinga Banaszak-Filipiak, a spokeswoman, said the entire group's debt at its 12 crediting banks is at PLN1.7 billion. The CFO, as cited by Bloomberg, said that PBG's four biggest bank creditors are Bank Pekao SA, Bank Zachodni WBK SA, ING Bank Slaski SA and Nordea Bank Polska SA, Bloomberg. PBG said that holders of more than PLN1 million of PBG debt may also be given the option of converting 12% of the debt into company shares at a rate of PLN40 a share, to be executed one year after a debt agreement is reached, Bloomberg notes. PBG SA is Poland's third-largest builder. =============== S L O V E N I A =============== * SLOVENIA: Top 20 Builders Owe EUR900-Mil. to Banks & Partners --------------------------------------------------------------- The Slovenia Times, citing the daily Dnevnik, reports that the 20 biggest Slovenian builders still in operation owed nearly EUR900 million to banks and business partners at the end of 2011, the total amount of their debt exceeding their capital more than three-fold. Slovenian construction companies finance their operations mainly with bank loans, STA notes. These amounted to half a billion euros at the end of last year, STA discloses. The combined financial debt of the analyzed companies rose by a further EUR10 million last year as half of them was not even able to pay off interest, STA says. Dnevnik said that the builders have shifted a large portion of their financial burden onto their business partners, owing as much as EUR384 million to them at the beginning of this year, STA relates. According to STA, noting that most of the builders are no longer in a position to pay back their debts, the daily points out that the actual state of their finances is unknown to the public as many receivership proceedings in the past showed that the builders are also encumbered by the many guarantees for loans hired by their project firms. The data refer to companies Primorje, CGP Novo mesto, Kraski zidar, Gorenjska gradbena druzba, CPL, SZ-ZGP Ljubljana, Begrad, Energoplan, Pomgrad - Gradnje, Begrad Gradnje, Strabag, SGP Pomgrad, GIC Gradnje, Granit, KPL, Gradis skupina G, Cestno podjetje Nova Gorica, Stavbenik, VOC Celje and CPK, STA discloses. The 20 constructors generated a combined revenue of EUR956 million last year and a combined net loss of EUR77 million, STA recounts. This means they generated EUR1.3 billion less revenues than the then top twenty builders did in 2008, STA states. ========= S P A I N ========= FONCAIXA FTGENCAT 4: Moody's Cuts Rating on EUR6MM Notes to Caa1 ---------------------------------------------------------------- Moody's Investors Service has downgraded the rating of 11 notes in three Spanish SME ABS transactions originated by CaixaBank (A3/P-2 on watch for downgrade) following worse-than-expected performance and lower-than-average credit enhancement levels. Ratings Rationale The rating action concludes the review that Moody's initiated between September 2011 and February 2012 for the various tranches. Low levels of credit enhancement and deteriorating performance led to the downgrade of 11 tranches and the confirmation of one tranche rating. -- PERFORMANCE Historically, all three transactions have generally performed better than Moody's Spanish SME delinquency index. As of March 2012, Moody's Spanish SME 90- to 360-day delinquencies index stood at 3.6% ("Spanish SME ABS Indices -- March 2012 ", May 2012). This compares to 90- to 360-day delinquency levels of 3.2% in FONCAIXA FTGENCAT 3, 1.8% in FONCAIXA FTGENCAT 4, 2.2% in FONCAIXA FTGENCAT 5. A year ago, 90- to 360-day delinquencies stood at 1.4%, 0.69% and 1.2%, respectively in the three pools and has therefore increased in all cases, following the sector trend. -- KEY REVISED ASSUMPTIONS: CUMULATIVE DEFAULT, VOLATILITY AND RECOVERY Moody's has reassessed its lifetime default expectation for the collateral pools. This reassessment factored in the collateral performance to date and any likely further deterioration of the pools' performance in the current down cycle. In doing so, the rating agency took into account the pools' composition, including the transaction's exposure to the real-estate market. For FONCAIXA FTGENCAT 3, Moody's now assumes a mean default of 13.5% of the current portfolio (equivalent to a lifetime 7.4% default assumption), which, with a 5.3 year WAL translates into a Ba3 pool quality. Moody's revised its volatility assumption to 60%, from 54% previously due to increased concentration. The pool features an effective number of 986 borrowers and 47% exposure to the real estate sector, while 99% of the loans benefit from a mortgage guarantee with a weighted average LTV of 34%. The recovery rate assumption was left unchanged at 65% (stochastic recovery rate). For FONCAIXA FTGENCAT 4, Moody's now assumes a mean default of 11% of the current portfolio (equivalent to a lifetime 7.4% default assumption), which, with a 6.3 years WAL translate into a Ba2 pool quality. Moody's revised its volatility assumption to 46%, from 50%. The pool features an effective number of 1,098 borrowers and a 22% exposure to the real estate sector, while 99% of the loans benefit from a mortgage guarantee with a weighted average LTV of 47%. Moody's increased its recovery rate assumption to 65% (stochastic recovery rate) from 48%, taking into account the value of the collateral. For FONCAIXA FTGENCAT 5, Moody's now assumes a mean default of 13.4% of the current portfolio (equivalent to a lifetime 12.9% default assumption), which, with a 6.4 years WAL translate into a Ba3 pool quality. Moody's revised its volatility assumption to 46%, from 50%. The pool features an effective number of 1,169 borrowers and 19% exposure to the real estate sector, and 91% of the loans benefit from a mortgage guarantee with a weighted average LTV of 43%. The recovery rate assumption was left unchanged at 65% (stochastic recovery rate). To account for the uncertainties in the current macroeconomic environment, Moody's also tested the effect of increased volatility levels up to 70% to 85% range. Moody's analyzed various sensitivities of recovery rates to test the robustness of its revised ratings. For instance, Moody's observed that the quantitative/model-indicated rating outcome of the Class A notes of all the transactions would remain consistent with the revised rating if the recovery rate was lowered to a 55% fixed recovery rate. As such, Moody's analysis encompasses the assessment of stressed scenarios. As a result of the revised assumptions and sensitivity runs as explained above, Moody's downgraded all but one tranche in these three transactions. Moody's confirmed the Aa2(sf) rating of Class AS of Foncaixa FTGENCAT 5 which is currently representing 12.9% of the total pool balance and is amortizing senior to the other tranches. Moody's believes that it is extremely unlikely that the Class AS notes will amortize pro rata with the Class AG notes given the distance to the pro rata trigger and the amortization speed of the Class AS notes. -- OPERATIONAL AND COUNTERPARTY RISK CaixaBank is servicer, account bank and swap counterparty in all three transactions. The swaps provide significant support to the senior bonds in this transaction by guaranteeing excess spread on the notes amount. Following the downgrade of CaixaBank on May 17, 2012 to A3/P-2, the transaction documents contemplate that some remedies are put in place in order to mitigate the increased risk to the swap counterparty. Moody's will monitor the implementation of such remedies. As the Euro area crisis continues, the rating of the structured finance notes remain exposed to the uncertainties of credit conditions in the general economy. The deteriorating creditworthiness of euro area sovereigns as well as the weakening credit profile of the global banking sector could negatively impact the ratings of the notes. Principal Methodologies The principal methodology used in these ratings is Moody's Approach to Rating CDOs of SMEs in Europe published in February 2007. Other methodologies such as Refining the ABS SME Approach: Moody's Probability of Default assumptions in the rating analysis of granular Small and Mid-sized Enterprise portfolios in EMEA published in March 2009, and Moody's Approach to Rating Granular SME Transactions in Europe, Middle East and Africa published in June 2007 have also been used in assigning and monitoring these ratings. Moody's used its excel-based cash flow model, Moody's ABSROM(TM), as part of its quantitative analysis of the transaction. Moody's ABSROM(TM) model enables users to model various features of a standard European ABS transaction including: (i) the specifics of the default distribution of the assets, their portfolio amortization profile, yield or recoveries; and (ii) the specific priority of payments, triggers, swaps and reserve funds on the liability side of the ABS structure. Moody's ABSROM(TM) User Guide is available on Moody's website and covers the model's functionality as well as providing a comprehensive index of the user inputs and outputs. MOODY'S CDOROMv2.8(TM) was used to estimate the default distribution. Ratings List Issuer: FONCAIXA FTGENCAT 3 Fondo de Titulizacion de Activos EUR449.3MM A(G) Notes, Downgraded to Aa3 (sf); previously on Feb 21, 2012 Downgraded to Aa2 (sf) and Remained On Review for Possible Downgrade EUR10.7M B Notes, Downgraded to A3 (sf); previously on Nov 4, 2011 Aa3 (sf) Placed Under Review for Possible Downgrade EUR7.8M C Notes, Downgraded to Ba2 (sf); previously on Feb 1, 2010 Confirmed at Baa2 (sf) EUR6.5M D Notes, Downgraded to B3 (sf); previously on Feb 1, 2010 Confirmed at Ba2 (sf) Issuer: FONCAIXA FTGENCAT 4 Fondo de Titulizacion de Activos EUR326M A (G) Notes, Downgraded to A1 (sf); previously on Feb 21, 2012 Downgraded to Aa2 (sf) and Remained On Review for Possible Downgrade EUR9.6M B Notes, Downgraded to Baa1 (sf); previously on Sep 22, 2011 A2 (sf) Placed Under Review for Possible Downgrade EUR7.2M C Notes, Downgraded to Ba2 (sf); previously on Sep 22, 2011 Ba1 (sf) Placed Under Review for Possible Downgrade EUR6M D Notes, Downgraded to Caa1 (sf); previously on Sep 22, 2011 B3 (sf) Placed Under Review for Possible Downgrade Issuer: FONCAIXA FTGENCAT 5 Fondo de Titulizacion de Activos EUR513.1M A (S) Notes, Confirmed at Aa2 (sf); previously on Feb 21, 2012 Downgraded to Aa2 (sf) and Remained On Review for Possible Downgrade EUR449.4M A (G) Notes, Downgraded to A2 (sf); previously on Feb 21, 2012 Downgraded to Aa2 (sf) and Remained On Review for Possible Downgrade EUR21M B Notes, Downgraded to Ba1 (sf); previously on Sep 22, 2011 A3 (sf) Placed Under Review for Possible Downgrade EUR16.5M C Notes, Downgraded to B3 (sf); previously on Sep 22, 2011 Ba1 (sf) Placed Under Review for Possible Downgrade * SPAIN: Moody's Reviews Ratings on ABS & RMBS for Downgrade ------------------------------------------------------------ Moody's Investors Service has placed on review for downgrade the ratings of residential mortgage-backed securities ("RMBS") and asset-backed securities ("ABS") that have a strong indirect linkage to Spanish banks that Moody's downgraded on May 17, 2012. The rating action affects 83 tranches, including 24 RMBS and 33 ABS transactions. As detailed in an earlier announcement Moody's is placing on review for downgrade securities that rely strongly on the performance of affected banks, while monitoring the implementation of the various protection mechanism designed to reduce credit linkage. If the transactions parties fail to implement effective protection mechanism in a timely fashion, these affected securities will likely suffer a multi notch downgrade. A List of Affected Credit Ratings, which identifies each affected issuer, is available at: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF286998 Ratings Rationale The rating announcement reflects the increased counterparty risk following the deterioration in credit quality of Spanish banks acting in various roles in the affected ABS and RMBS transactions. The rating action takes into account: (i) the potential for payment disruption risks, and (ii) the level of exposure to swap providers and issuer account banks. Payment Disruption Risk Moody's considers that transactions more likely to suffer a potential payment disruption are those with weak servicers and no back-up arrangements. Moody's has therefore placed on review for downgrade senior notes in 10 transactions with lowly rated servicers and no triggers for the appointment of a back-up servicer Exposure to Issuer Account Banks Moody's considers transactions to be highly exposed to issuer account banks in cases where a substantial portion of the credit enhancement and liquidity in the transaction is deposited in an issuer account bank rated below Prime-1. Moody's has placed on review 69 tranches in 49 transactions where (i) the funds deposited in the issuer accounts represent more than 10% of current note balance; and (ii) for which the credit enhancement reduced by such funds would be insufficient to support the current rating of the affected notes. Exposure to Swap Provider Moody's has placed on review for downgrade notes in 1 transaction whereby the swap counterparty was already in breach of a replacement trigger (loss of Baa1) prior to the downgrade announced on May 17, 2012. The swap counterparties have now been further downgraded. During the review Moody's will assess the degree of linkage between the notes and swap counterparty rating. Other Developments May Negatively Affect The Notes In Future As the euro area crisis continues the ratings of the notes remain exposed to the uncertainties of credit conditions in the general economy. The deteriorating creditworthiness of euro area sovereigns as well as the weakening credit profile of the global banking sector could negatively impact the ratings of the notes. Following the downgrade of Spain's long-term government bond rating to A3, Moody's lowered the maximum achievable ratings in Spain from Aaa(sf) to Aa2(sf). Furthermore, as discussed in Moody's special report "Rating Euro Area Governments Through Extraordinary Times -- An Updated Summary," published in October 2011, Moody's is considering reintroducing individual country ceilings for some or all euro area members, which could affect further the maximum structured finance rating achievable in those countries. Moody's is also continuing to consider the impact of the deterioration of sovereigns' financial condition and the resultant asset portfolio deterioration on mezzanine and junior tranches of structured finance transactions. Other factors used in these ratings are described in Global Structured Finance Operational Risk Guidelines: Moody's Approach to Analyzing Performance Disruption Risk published in June 2011. Key modeling assumptions, sensitivities, cash-flow analysis and stress scenarios for the affected transactions have not been updated as the rating action has been primarily driven by the assessment of counterparty exposure. ============= U K R A I N E ============= VAB BANK: Moody's Affirms 'E/Caa1' Ratings; Outlook Positive ------------------------------------------------------------ Moody's Investors Service has affirmed the following ratings of VAB Bank: E standalone bank financial strength rating (BFSR, mapping to a standalone credit assessment of caa1); Caa1 long- term local and foreign currency deposit ratings; Not-Prime short- term local and foreign currency deposit ratings; Caa1 long-term foreign currency debt rating and Ba1.ua National Scale Rating (NSR). The outlook on the long-term ratings and the BFSR remains positive, while NSR carries no specific outlook. Ratings Rationale According to Moody's, the affirmation of VAB Bank's ratings -- along with a positive outlook -- is driven by (i) the change in ownership structure and, thus, the reset of strategic objectives that took place in Q4 2011 thereby facilitating recovery of the bank's profitability; (ii) demonstration of capital support from the bank's current shareholders that should enable VAB Bank to successfully implement the newly adopted strategy; and (iii) some progress in cost-saving and business generation initiatives demonstrated to date. Prior to the aforementioned change in VAB Bank's ownership structure in Q3 2011, TBIF Financial Services -- which sold its 84% stake VAB Bank to new investors in 2011 -- had aimed to develop the retail business segment. VAB Bank's new owners are seeking to develop the bank's corporate franchise especially in granting loans to the agriculture sector. As part of the newly adopted strategy, the VAB Bank started branch network and operating cost optimization, leading to a drop of over 16% in operating expenses in Q1 2012 compared to the same period in Q1 2011. VAB Bank was also active in attracting retail deposits, which demonstrated 21% growth in Q1 2012 and were re- channelled to corporate loans that were in the early stages of growth -- increasing by almost 28% in Q1 2012 ( on gross loan book basis). Moody's considers the initiatives to be positive for the bank's financial performance over a 12-month horizon, as its strategy is likely to strengthen both profitability and efficiency metrics which had been under severe pressure over past three years. Moody's also recognizes that VAB Bank's asset quality is weak and is likely to require additional provisioning, thereby exerting pressure on the bank's bottom-line profitability and capital in 2012. However, the shareholders are supportive to the bank and injected UAH600 million in 2011, and adopted a resolution to inject a further UAH500 million by the end of 1H2012,which Moody's regards as sufficient to support business development targets as well as to absorb losses from additional provisions. The methodologies used in this rating were Bank Financial Strength Ratings: Global Methodology, published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: Global Methodology, published in March 2012. Moody's National Scale Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".ua" for Ukraine. =========================== U N I T E D K I N G D O M =========================== GLOBAL SHIP: 2012 Annual Shareholders Meeting Set for July 10 ------------------------------------------------------------- The 2012 annual meeting of shareholders of Global Ship Lease, Inc., will be held at the Company's administrative office at Portland House, Stag Place, London SW1E 5RS on July 10, 2012, at 3:00 p.m. local time. At the meeting, shareholders of the Company will consider and vote upon these proposals: 1. To elect two Term I Directors to serve until the 2015 Annual Meeting of Shareholders; 2. To ratify the appointment of PricewaterhouseCoopers Audit as the Company's independent public accounting firm for the fiscal year ending Dec. 31, 2012; and 3. To transact other business as may properly come before the meeting or any adjournment thereof. About Global Ship Lease London, England-based Global Ship Lease (NYSE: GSL, GSL.U and GSL.WS) -- http://www.globalshiplease.com/-- is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies. Global Ship Lease owns 17 vessels with a total capacity of 66,297 TEU with a weighted average age at June 30, 2010, of 6.3 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 8.6 years. The Company has contracts in place to purchase two 4,250 TEU newbuildings from German interests for approximately US$77 million each that are scheduled to be delivered in the fourth quarter of 2010. The Company also has agreements to charter out these newbuildings to Zim Integrated Shipping Services Limited for seven or eight years at charterer's option. As reported in the Dec. 1, 2012 edition of the TCR, Global Ship Lease disclosed that it had entered into an agreement with its lenders to waive until Nov. 30, 2012 the requirement under its credit facility to conduct loan-to-value tests. The credit facility requires that loan-to-value, which is the ratio of outstanding borrowings under the credit facility to the aggregate charter-free market value of the secured vessels, cannot exceed 75%. The Company's balance sheet at March 31, 2012, showed US$937.52 million in total assets, US$595.25 million in total liabilities and US$342.26 million in total stockholders' equity. =============== X X X X X X X X =============== * EUROPE: Senior Unsecured Creditors to Take Hit Under EU Plan -------------------------------------------------------------- Jim Brunsden at Bloomberg News reports that senior unsecured creditors will be put in the firing line to cover costs from failing lenders under European Union plans unveiled on Wednesday, as the bloc seeks to end an era of bank bailouts and move toward more unified financial supervision. Michel Barnier, the 27-nation bloc's financial services chief, said the plans, which also include the setting up of a network of national bank-financed funds to stabilize crisis-hit lenders, are a necessary step to curb excessive risk taking and take taxpayers off the hook for rescues, Bloomberg relates. "We don't want governments to find themselves in the future with their backs to the wall, and no option but to inject public money," Bloomberg quotes Mr. Barnier as saying on Wednesday. "Banks should pay for banks, we are going to break the link between banking crises and public budgets." EU leaders, including European Central Bank President Mario Draghi and European Commission President Jose Barroso, have called for a banking union with more coordination of regulation, as lawmakers seek to bolster confidence damaged by debt turmoil, Bloomberg notes. EU President Herman Van Rompuy plans to report on proposed "building blocks" for deeper integration in the 17- nation euro area to the next summit of EU leaders on June 28-29 in Brussels, Bloomberg discloses. According to Bloomberg, under Mr. Barnier's plans, national governments would impose annual levies on banks to ensure that a minimum amount of money, a so-called resolution fund, is immediately available to stabilize a crisis-hit lender. This would allow regulators to buy time while other steps, such as creditor writedowns, are enacted, Bloomberg states. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 240/629-3300. * * * End of Transmission * * *