/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/120808.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, August 8, 2012, Vol. 13, No. 157 Headlines B U L G A R I A HOLDING ROADS: Supplier Files Bankruptcy Petition VIVACOM AD: Buyout Deal with Creditors to Conclude in September G E R M A N Y SOLAR MILLENNIUM: Sells Spanish Solar Thermal Interest to Steag H U N G A R Y * HUNGARY: Mandatory Liquidation Procedures Up 20% in May-July I R E L A N D HOUSE OF EUROPE: Moody's Cuts Rating on Class A1 Notes to 'B3' MCEVOY FAMILY: Court Appoints Neil Hughes as Interim Examiner I T A L Y ADELANTE FINANCE: S&P Affirms 'BB' Rating on Class C Notes BANCA DI MONASTIER: Moody's Withdraws 'B2/NP/E+' Ratings BANCA TERCAS: Moody's Withdraws E+ Bank Financial Strength Rating L U X E M B O U R G INTELSAT SA: Incurs US$83.6 Million Net Loss in Second Quarter N E T H E R L A N D S HEAD NV: Moody's Withdraws 'B3' CFR; Outlook Stable ICTS INTERNATIONAL: Posts US$2.1 Million Net Loss in 2011 P O L A N D OLT EXPRESS: Files for Bankruptcy; Ceases Scheduled Flights R O M A N I A TOWER CENTER: Office Building Sold for EUR50 Million R U S S I A CHELINDBANK: Fitch Upgrades Issuer Default Rating to 'BB-' SEVERSTAL OAO: Fitch Raises Longterm Issuer Default Rating to BB S L O V E N I A ABANKA VIPA: Moody's Lowers Gov't.-Guaranteed Debt Rating S P A I N * SPAIN: Bankruptcy Figures Up 28.6% in Second Quarter 2012 * SPAIN: S&P Takes Various Rating Actions on Seven Multi-Cedulas U K R A I N E DEWEY & LEBOEUF: UK Unit's Administrators Recommend Liquidation FORUM BANK: Fitch Puts 'B' Long-Term IDR on Negative Watch U N I T E D K I N G D O M ACACIA LODGE: In Administration, Seeks Buyer BARNCEST: Norfolk Buys Business Out of Administration BRIDGE: In Administration, Cuts 100++ Jobs CARNUNTUM I: S&P Lowers Rating on Class C Combo Notes to 'BB' LONDON PLEASURE: In Administration on Chronic Mismanagement LONGTON CRANE: In Administration, Cuts 30 Jobs MATHIAS BAUERLE: Liquidator Expects to Sell Business Before Nov. SOLAR ENERGY: High Court Winds Up National Solar Panel Company ********* =============== B U L G A R I A =============== HOLDING ROADS: Supplier Files Bankruptcy Petition ------------------------------------------------- FOCUS News Agency, citing Capital Daily, reports that an unknown construction company has asked for a bankruptcy procedure to be initiated for Holding Roads plc. On August 3, Groupstroy, registered in the town of Levski, filed an appeal at the Sofia City Court, FOCUS relates. Holding Roads responded that it had no debts to Groupstroy, FOCUS notes. According to FOCUS, representatives of the holding told the Capital Daily that in 2008 the company supplied it with concrete elements, but as it turned out that they were of poor quality, the company had to pay damages for the losses suffered. In September 2011, by request of United Bulgarian Bank, the accounts of Holding Roads at UniCredit Bulbank and First Investment Bank (Fibank) were levied a distraint upon to the amount of BGN7.6 million due to a debt of Infracom 2007 that the holding was a co-debtor to, FOCUS recounts. In end-June, the credit from UniCredit Bulbank was already overdue and under renegotiation, FOCUS discloses. In the first few months of the year the credits of Holding Roads from Fibank were also renegotiated, FOCUS relates. Asked on whether they were facing difficulties in repaying their loans the Holding Roads representatives said that that they had undertaken the necessary measures to meet their obligations, according to FOCUS. The report of the holding for the first half of 2011 shows a loss of BGN2.6 million compared to BGN6.4 million a year earlier, FOCUS says. Holding Roads plc is a Bulgarian infrastructure company controlled by Vasil Bozhkov. VIVACOM AD: Buyout Deal with Creditors to Conclude in September --------------------------------------------------------------- Elizabeth Konstantinova at Bloomberg News reports that Russia's VTB Capital Plc and Sofia-based Corporate Commercial Bank AD signed a lock-up agreement with the creditors of Vivacom AD to buy the company. Bloomberg relates that Vivacom said in a statement on its Web site the two investors will pay EUR130 million for a 94% stake in Vivacom and pay debts worth EUR588 million, which have been reduced from EUR1.6 billion. The company said that the transaction is expected to conclude in September, after approval by regulatory and competition authorities, Bloomberg notes. Vivacom AD is Bulgaria's second-biggest telecommunications company in terms of clients. ============= G E R M A N Y ============= SOLAR MILLENNIUM: Sells Spanish Solar Thermal Interest to Steag --------------------------------------------------------------- Bloomberg News reports that Solar Millennium AG sold its 26% in a solar thermal power project in Spain to a unit of German utility Steag GmbH. According to Bloomberg News, administrator Volker Boehm said the company agreed to sell the interest in the 50-megawatt Arenales project near Seville for a "double-digit million euro" amount that's more than the equity invested, boosting prospects for creditors. Bloomberg News relates that the project, also owned by Deutsche Bank AG's RREEF unit and Spanish builder Obrascon Huarte Lain SA, is in construction after being funded by a group of eight banks in September 2011. The deal follows the sale of Solar Millennium's interest in the Andasol 3 solar thermal project in Spain and its stake in developer Flagsol GmbH this month, the report notes. About Solar Millennium AG Solar Millennium AG, is a company based in Germany that operates value-added chain of solar-thermal power plants. 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. Volker Bohm filed for Chapter 15 protection (Bankr. D. Del. Case No. 12-11722) on June 4, 2012. R. Craig Martin, Esq., at DLA Piper LLP (US) represents the Debtor's restructuring effort. The Debtor estimated assets at US$50 million to $100 million and debts at US$100 million to US$500 million. The Company did not file a list of creditors together with its petition. Affiliate Solar Trust of America, LLC previously filed for separate Chapter 11 petition (Bankr. Case No. 12-11136) on April 2, 2012. ============= H U N G A R Y ============= * HUNGARY: Mandatory Liquidation Procedures Up 20% in May-July -------------------------------------------------------------- MTI-Econews reports that company information provider Opten told MTI on Monday the number of mandatory liquidation procedures initiated against Hungarian companies was 2,251 in July, up 20% in one year. The number has reached new peaks, exceeding 2,200 for the third month in a row, MTI discloses. Previously the number exceeded 2,000 only twice, in June and November 2011, MTI notes. According to MTI, Opten attributed the increase to greater vigilance of the tax authorities, noting that 7,500 of the 12,355 procedures started in the first half of 2012 were initiated by the authorities. The number of such procedures more than doubled from a year earlier, MTI says. Opten said the number of voluntary liquidations fell further, to 1,678 in July from 2,610 in June and from 3,000-4,000 a month between January-May, MTI relates. ============= I R E L A N D ============= HOUSE OF EUROPE: Moody's Cuts Rating on Class A1 Notes to 'B3' -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of the following notes issued by House of Europe V PLC: EUR580,000,000 Class A1 Floating Rate Notes Due November 8, 2090 (current outstanding balance of EUR499,034,641), Downgraded to B3 (sf); previously on May 8, 2012 B1 (sf) Placed Under Review for Possible Downgrade. Ratings Rationale According to Moody's, the rating downgrade is the result of Moody's updated analysis of the deal's performance, and concludes a review initiated on May 8, 2012, when the Class A1 Notes were placed on review for possible downgrade. Moody's updated analysis notes a deterioration in the credit quality of the underlying portfolio, observed through a decrease in the transaction's overcollateralization ratios since March 2010. Based on the latest trustee report dated June 2012, the Class A/B and Class C overcollateralization ratios are reported at 83.86% and 80.99%, respectively, versus a March 2010 level of 89.32% and 87.04%, respectively. Moody's analysis also reflects the use of recent Credit Estimates (CEs) and other assumptions for collateral assets that have not been rated by Moody's. As explained in its May 8, 2012 press release announcing the review, where information is adequate, Moody's has begun producing and using CEs in its rating analysis in lieu of credit assessments previously inferred from ratings assigned by other rating agencies for such collateral assets. These CEs are produced and used as described in the Rating Implementation Guidance, "Updated Approach to the Usage of Credit Estimates in Rated Transactions." In updating its analysis of the issuer's portfolio, Moody's produced CEs for all the unrated assets, except for one structured finance security constituting about 4.8% of the collateral pool. House of Europe V PLC, issued in October 2006, is a collateralized debt obligation backed primarily by a portfolio of Euro dominated Structured Finance securities, with approximately 40% of the portfolio consisting of CMBS and 38% RMBS. The principal methodology used in this rating was "Moody's Approach to Rating SF CDOs" published in May 2012. Moody's applied the Monte Carlo simulation framework within CDOROMv2.8 to model the loss distribution for SF CDOs. Within this framework, defaults are generated so that they occur with the frequency indicated by the adjusted default probability pool (the default probability associated with the current rating multiplied by the Resecuritization Stress) for each credit in the reference. Specifically, correlated defaults are simulated using a normal (or "Gaussian") copula model that applies the asset correlation framework. Recovery rates for defaulted credits are generated by applying within the simulation the distributional assumptions, including correlation between recovery values. Together, the simulated defaults and recoveries across each of the Monte Carlo scenarios define the loss distribution for the reference pool. Once the loss distribution for the collateral has been calculated, each collateral loss scenario derived through the CDOROM loss distribution is associated with the interest and principal received by the rated liability classes via the CDOEdge cash-flow model . The cash flow model takes into account the following: collateral cash flows, the transaction covenants, the priority of payments (waterfall) for interest and principal proceeds received from portfolio assets, reinvestment assumptions, the timing of defaults, interest-rate scenarios and foreign exchange risk (if present). The Expected Loss (EL) for each tranche is the weighted average of losses to each tranche across all the scenarios, where the weight is the likelihood of the scenario occurring. Moody's defines the loss as the shortfall in the present value of cash flows to the tranche relative to the present value of the promised cash flows. The present values are calculated using the promised tranche coupon rate as the discount rate. For floating rate tranches, the discount rate is based on the promised spread over Libor and the assumed Libor scenario. Moody's notes that in arriving at its ratings of SF CDOs, there exist a number of sources of uncertainty, operating both on a macro level and on a transaction-specific level. Primary sources of assumption uncertainty are the extent of the slowdown in growth in the current macroeconomic environment and the commercial and residential real estate property markets. While commercial real estate property markets are gaining momentum, a consistent upward trend will not be evident until the volume of transactions increases, distressed properties are cleared from the pipeline and job creation rebounds. Among the uncertainties in the residential real estate property market are those surrounding future housing prices, pace of residential mortgage foreclosures, loan modification and refinancing, unemployment rate and interest rates. Moody's rating action factors in a number of sensitivity analyses and stress scenarios, discussed below. Results are shown in terms of the number of notches' difference versus the current model output, where a positive difference corresponds to lower expected loss, assuming that all other factors are held equal: Moody's Caa rated assets notched up by 2 rating notches: Class A1: +1 Class A2: 0 Class A-3a: 0 Class A-3b: 0 Class B: 0 Class C: 0 Class D: 0 Class E1: 0 Class E2: 0 Moody's Caa rated assets notched down by 2 rating notches: Class A1: -1 Class A2: 0 Class A-3a: 0 Class A-3b: 0 Class B: 0 Class C: 0 Class D: 0 Class E1: 0 Class E2: 0 MCEVOY FAMILY: Court Appoints Neil Hughes as Interim Examiner ------------------------------------------------------------- The Irish Times reports that the High Court has appointed an interim examiner to McEvoy Family Foods Ltd. The company has got into financial difficulties due to factors including high start- up costs, lack of bank funding, and bad debts, the report says. The Irish Times notes that the firm's managing director is Gary McEvoy, whose wife Jane was a contestant on the UK version of the popular television show The Apprentice earlier this year. Ms. McEvoy, the court heard, works for the company, the report says. According to the report, the court also heard the firm's directors believe it has "a viable future" and are confident of bringing in new investment to ensure the company's survival and preserve the jobs. On August 3, the High Court Mr. Justice Garrett Sheehan appointed Neil Hughes as interim examiner to the company after being told it is insolvent and unable to pay its debts as they fall due, The Irish Times relates. McEvoy Family Foods Ltd produces fresh soups, sauces and garlic bread for customers including SuperValu and Lidl. The company is based in Co Tipperary and employs 18 people. ========= I T A L Y ========= ADELANTE FINANCE: S&P Affirms 'BB' Rating on Class C Notes ---------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'A+(sf)' from 'AA- (sf)' and removed from CreditWatch negative its credit rating on Atlante Finance S.r.l.'s class A notes. "At the same time, we have affirmed and removed from CreditWatch negative our ratings on the class B and C notes," S&P said. "The rating actions follow our review of the transaction's performance and our assessment of counterparty risk under our 2012 counterparty criteria," S&P said. "On Dec. 21, 2011, we placed on CreditWatch negative our rating on the class A notes for counterparty reasons. This followed our Nov. 29, 2011 downgrade of The Royal Bank of Scotland PLC (RBS; A/Stable/A-1), the transaction's swap and liquidity provider," S&P said. "On April 18, 2012, we placed on CreditWatch negative our ratings on Atlante Finance's class B and C notes and kept our rating on the class A notes on CreditWatch negative for performance reasons," S&P said. The underlying portfolio has shown decreased arrears, steadily declining new defaults, and a reduced unpaid principal deficiency ledger (PDL) on the last two interest payment dates (IPDs). Delinquencies of 30+ days at the end of the latest collection period (June 2012) were 7.86% of the outstanding performing collateral -- substantially down from 12.98% and 12.14% recorded at the end of the March 2012 and December 2011 collection periods. "The amount of new defaults recorded during the latest collection period totaled EUR1.3 million, slightly higher than the EUR696,000 recorded in March 2012, but better than the EUR6.5 million and EUR11.4 million recorded in the December 2011 and September 2011 collection periods. "On the most recent IPD in April 2012, the unpaid PDL was equal to EUR68.1 million -- down from EUR70.5 million and EUR85.6 million recorded at the January 2012 and October 2011 IPDs. As new defaults are steadily decreasing, we expect a further reduction on the July 2012 IPD," S&P said. "The counterparty analysis relating to the swap and liquidity provider (RBS) has not changed since our previous counterparty- related review in May 2011. The downgrade language relating to RBS is not in line with our 2012 counterparty criteria. We have therefore tested additional scenarios in our cash flow analysis where we did not consider the support of the interest rate swap and liquidity provider," S&P said. "Based on our performance review and the results of our counterparty risk analysis, including our cash flow model tests without the benefit of the swap and liquidity provider, we have lowered to 'A+ (sf)' from 'AA- (sf)' and removed from CreditWatch negative our rating on the class A notes for counterparty reasons. Under our 2012 counterparty criteria, our 'A+ (sf)' rating on the class A notes is now at the same rating level as the swap and liquidity provider's long-term 'A' rating plus one notch. This reflects the fact that the class A notes cannot withstand our stress tests at a 'AA-' or higher level without the benefit of the swap and liquidity provider," S&P said. "We have affirmed and removed from CreditWatch negative our 'A (sf)' rating on the class B notes and our 'BB (sf)' rating on the class C notes as we have observed slight improvements in the performance metrics that we use to assess the transaction," S&P said. "Atlante Finance is an Italian asset-backed securities (ABS) transaction originated by Unipol Banca SpA (BB/Watch Neg/B). A mixed portfolio of small and midsize enterprise and residential loans backs the transaction," 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 Atlante Finance S.r.l. EUR1.52 Billion Asset-Backed Floating-Rate Notes Rating Lowered and Removed from CreditWatch Negative A A+ (sf) AA- (sf)/Watch Neg Ratings Affirmed and Removed from CreditWatch Negative B A (sf) A (sf)/Watch Neg C BB (sf) BB (sf)/Watch Neg BANCA DI MONASTIER: Moody's Withdraws 'B2/NP/E+' Ratings -------------------------------------------------------- Moody's Investors Service has withdrawn Banca di Monastier e del Sile's standalone bank financial strength rating (BFSR) of E+, which is equivalent to a b3 standalone credit assessment, as well as its long and short-term bank deposit ratings of B2/Not Prime. At the time of the withdrawal, Banca Monastier's BFSR and long- term deposit ratings were on review for downgrade. Ratings Rationale Moody's has withdrawn the rating because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. The bank's ratings have been withdrawn following the bank having been placed into administration by the Bank of Italy on 4 May 2012; in addition, Moody's believes that there is inadequate information to maintain the ratings. Due to the lack of sufficient information, Moody's was unable to conclude its ratings review before the ratings withdrawal. Banca Monastier had no outstanding debt rated by Moody's at the time of the withdrawal. Banca Monastier is headquartered in Monastier, Italy. At December 2011, it had total assets of EUR1.6 billion. BANCA TERCAS: Moody's Withdraws E+ Bank Financial Strength Rating ----------------------------------------------------------------- Moody's Investors Service has withdrawn the following ratings of Banca Tercas: standalone bank financial strength rating (BFSR) of E+, mapping to a b3 baseline credit assessment, and the long- and short-term bank deposit ratings of B3/Not Prime. At the time of the withdrawal, Banca Tercas's BFSR and long-term deposit ratings were on review for downgrade. Ratings Rationale Moody's has withdrawn the rating because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. The bank's ratings have been withdrawn following the bank having been placed into administration by the Bank of Italy on April 30, 2012; in addition, Moody's believes that there is inadequate information to maintain the ratings. Due to the lack of sufficient information, Moody's was unable to conclude its ratings review before the ratings withdrawal. Banca Tercas had no outstanding debt rated by Moody's at the time of the withdrawal. Banca Tercas is headquartered in Teramo, Italy. At December 2011, it had total assets of EUR5.3 billion. =================== L U X E M B O U R G =================== INTELSAT SA: Incurs US$83.6 Million Net Loss in Second Quarter -------------------------------------------------------------- Intelsat S.A. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of US$83.62 million on US$638.66 million of revenue for the three months ended June 30, 2012, compared with a net loss of US$214.48 million on US$642.44 million of revenue for the same period during the prior year. The Company reported a net loss of US$107.89 million on US$1.28 billion of revenue for the six months ended June 30, 2012, compared with a net loss of US$430.24 million on US$1.28 billion of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed US$17.46 billion in total assets, US$18.66 billion in total liabilities, US$48 million in non-controlling interest, and a US$1.24 billion total Intelsat S.A. shareholders' deficit. Intelsat CEO Dave McGlade said, "In the second quarter, Intelsat achieved steady financial performance while embarking upon a new era in our continuing industry leadership. Near term, our 2012- 2013 launch program will provide valuable growth capacity and also include the final phase of deployment of our global broadband mobility infrastructure. As these satellites enter service, our business will benefit from demand for fixed and mobile applications serving media, government and network services customers. Given the timing of this expansion capacity being added to our fleet, revenue growth in the second half of 2012 is expected to begin to accelerate modestly; total year 2012 revenue results are expected to be slightly positive as compared to 2011." A copy of the Form 10-Q is available for free at: http://is.gd/C5CyLR About Intelsat Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite communications services worldwide through a global communications network of 54 satellites in orbit as of Dec. 31, 2009, and ground facilities related to the satellite operations and control, and teleport services. It had US$2.5 billion in revenue in 2009. Washington D.C.-based Intelsat Corporation, formerly known as PanAmSat Corporation, is a fully integrated subsidiary of Intelsat S.A., its indirect parent. Intelsat Corp. had US$7.70 billion in assets against US$4.86 billion in debts as of Dec. 31, 2010. The Company reported a net loss of $433.99 million in 2011, a net loss of $507.77 million in 2010, and a net loss of $782.06 million in 2009. * * * Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings from Standard & Poor's. It has 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. ===================== N E T H E R L A N D S ===================== HEAD NV: Moody's Withdraws 'B3' CFR; Outlook Stable --------------------------------------------------- Moody's Investors Service has withdrawn the B3 Corporate Family Rating (CFR) and the B3 Probability of Default (PDR) ratings of Head N.V. (Head). The Caa2 (LGD 6, 90%) instrument rating on the approximately EUR28 million outstanding unsecured debt issued by HTM Sport GmbH and due January 2014, has been also withdrawn. The ratings had a stable outlook. Ratings Rationale Moody's has withdrawn the rating for its own business reasons. This action does not reflect a change in the company's creditworthiness. Incorporated in the Netherlands, Head N.V. is a leading global manufacturer and seller of branded sporting goods serving the winter sports, racquet sports and diving equipment markets. As of fiscal year ended December 30, 2011, the company generated revenues of EUR339 million. ICTS INTERNATIONAL: Posts US$2.1 Million Net Loss in 2011 --------------------------------------------------------- ICTS International, N.V., filed on May 11, 2012, its annual report on Form 20-F for the fiscal year ended Dec. 31, 2011. Mayer Hoffman McCann CPAs, in New York, N.Y., expressed substantial doubt about ICTS International's ability to continue as a going concern. The independent auditors noted that the Company has a history of recurring losses from continuing operations, negative cash flows from operations, working capital deficit, and is in default on its line of credit arrangement in the United States as a result of the violation of certain financial and non-financial covenants. The Company reported a net loss of US$2.15 million on US$105.93 million of revenue for 2011, compared with a net loss of US$8.12 million on US$98.43 million of revenue for 2010. The Company's balance sheet at Dec. 31, 2011, showed US$23.88 million in total assets, US$51.49 million in total liabilities, and a stockholders' deficit of US$27.61 million. A copy of the Form 20-F is available for free at: http://is.gd/g3KaHw ICTS International N.V. is a public limited liability company organized under the laws of The Netherlands in 1992. ICTS specializes in the provision of aviation security and other aviation services. Following the taking of its aviation security business in the United States by the TSA in 2002, ICTS, through its subsidiary Huntleigh U.S.A. Corporation, engages primarily in non-security related activities in the USA. ICTS, through I-SEC International Security B.V., supplies aviation security services at airports in Europe and the Far East. In addition, I-SEC Technologies B.V. including its subsidiaries develops technological systems and solutions for aviation and non-aviation security. =========== P O L A N D =========== OLT EXPRESS: Files for Bankruptcy; Ceases Scheduled Flights ----------------------------------------------------------- Ian Stephens at Fly Away Simulation reports that Polish airline OLT Express Regional filed for bankruptcy on July 27, 2012. Fly Away relates that following the bankruptcy announcement, OLT Express Regional ceased all scheduled flights. However, its sister company, an international freight charter operator, OLT Express Poland, continues operating. Amber Gold owns OLT Express Regional, OLT Express Poland, and OLT Express Germany. The Germany operations are not affected by the bankruptcy; hence, OLT Express Germany will continue operating. According to Fly Away, the company's owners, Amber Gold, have announced that they are not able to provide funds for the company to continue with normal operations, and they are now looking for an investor to inject capital into the company. Amber Gold stated that they have so far invested about EUR52 million in the airline, the report notes. Amber Gold is reportedly in discussions with two potential investors, namely a non-Polish airline and a Polish aircraft leasing company, the report adds. ============= R O M A N I A ============= TOWER CENTER: Office Building Sold for EUR50 Million ---------------------------------------------------- Romania-Insider reports that the office building Tower Center in Bucharest's downtown office district Victoriei Square, owned by Tower Center International, was recently sold to investors Ioannis Papalekas and Dragos Bilteanu, according to Romanian media. According to Romania-Insider, the 24-floor tower, which is currently empty after litigation and insolvency in the past, was sold in a deal reportedly worth EUR50 million. Romania-Insider notes that the deal was complex and involved a debt of EUR44 million, some of which was turned into shares, and a EUR17.5 million payment to Alpha Bank, on account of the loan granted to develop the building. The bank recently approved another EUR15 million loan for the former owners of the building, says Romania-Insider, The office building can be now leased, according to RVA Insolvency, the judiciary administrator of Tower Center International, Romania-Insider adds. =========== R U S S I A =========== CHELINDBANK: Fitch Upgrades Issuer Default Rating to 'BB-' ---------------------------------------------------------- Fitch Ratings has upgraded Chelindbank's Long-term Issuer Default Rating (IDR) to 'BB-' from 'B+', and affirmed Primsotsbank (PSCB) and Snezhinskiy's (BS) Long-term IDRs at 'B' and 'B-', respectively. At the same time, PSCB's National Rating has been upgraded to 'BBB(rus)' from 'BBB-(rus)'. RATING ACTION RATIONALE AND DRIVERS: CHELIND'S LONG-TERM IDR AND VIABILITY RATING The upgrades of Chelind's Long-term IDR and Viability Rating (VR) reflect the bank's sustainable profitability, adequate capitalization and conservative management, with a sufficient margin of safety in respect to both liquidity and the capital position. However, the ratings continue to also consider the bank's limited franchise, focused on the Chelyabinsk region of Russia whose metallurgy-based economy has been highly cyclical. Chelind's profitability remained solid in 2011, with a net interest margin of 7.8% and return on average assets of 2.5%. The bank managed to recover some of the crisis-driven loan impairment reserves, decreasing the non-performing loans (NPLs, loans overdue more than 90 days) ratio to 7% of the loan book at end-2011 (end-2010: 10%). The NPL ratio is inflated somewhat by historically low write offs, but reasonable collateral coverage should support recoveries. The bank's liquidity cushion is comfortable (cash and securities repoable with the central bank equal to 28% of customer funding at end-H112), while Chelind's well-established regional franchise has given it stable access to reasonably low-cost funding. The bank's capitalization is solid (Fitch core capital (FCC) ratio of 20.4% at end-2011; 19.2% regulatory ratio at end-H112), although fixed assets, including revaluations, accounted for a significant 54.7% of FCC at end-2011. RATING SENSITIVITIES: CHELIND'S LONG-TERM IDR AND VIABILITY RATING Chelind's ratings could come under negative pressure if there was a significant change in business model and/or risk appetite, marked asset quality deterioration or an erosion of the bank's existing franchise and access to reasonably priced deposit funding. Upward potential is currently limited given the bank's narrow and concentrated franchise. RATING ACTION RATIONALE: PSCB's NATIONAL RATING, IDRS AND VIABILITY RATING The upgrade of PSCB's National Long-Term Rating reflects the bank's solid profitability, somewhat better quality of recently issued corporate loans, reduced appetite for real estate lending and currently comfortable liquidity position. The affirmation of PSCB's Long-term IDR and VR reflects Fitch's view that the moderate improvements in the bank's profile make it a relatively stronger credit at the 'B' level, rather than warrant an upgrade of the Long-term IDR. RATING DRIVERS: PSCB's IDRs, NATIONAL RATING AND VIABILITY RATING PSCB's ratings reflect the bank's solid profitability, underpinned by high-yield retail lending and robust fee generation, and currently reasonable asset quality and liquidity. However, the ratings also consider PSCB's tight capitalization, high borrower concentrations, rapid loan growth, some related party lending and potential contingent risks related to sister bank Levoberezniy (unrated). Fitch is still concerned over PSCB's high risk appetite in small and mid-sized corporate lending (150% growth in 2011) and unsecured consumer lending (50% growth in 2011). Despite PSCB's focus on small and medium sized customers, loan concentration is high, with the largest 25 borrowers comprising 30% of gross loans, equivalent 2.4x FCC at end-Q112. Reported related party lending comprised 11% of FCC at the same date. In addition, exposure to a formerly related party comprised 25% of FCC. Fitch understands the bank retains some influence on this company. However, the quality of some of the largest exposures has improved, giving Fitch some comfort about the quality of growth, and reported NPLs were a moderate 2.9% of gross loans at end- Q112, with 1.1% renegotiated. Loan impairment reserves provided 1.4x coverage of NPLs and renegotiated loans. The bank's capital has always been tightly managed, with a FCC/risk-weighted assets ratio of 12% at end-2011, and a regulatory total capital adequacy ratio of 11.5% at end-H112. The bank could increase regulatory loan impairment reserves up to only 6.8% of the gross loan book at end-H112 without breaching regulatory capital requirements. However, the bank has some flexibility to absorb losses through its large pre-impairment profit, which was equal to 7% of average loans in 2011. In addition, PSCB has demonstrated its ability to deleverage its balance sheet during a crisis, which is positive for both capital and liquidity flexibility. The bank's liquidity cushion (consisting of cash, net short-term interbank placements and securities eligible for CBR refinancing) comfortably covered 23% of customer accounts at end-Q112. In addition, liquidity is supported by the robust cash generation of the loan book, with monthly inflows equal to about 9% of customer accounts, and moderate deposit concentrations, with the largest 20 customers accounting for 17% of total accounts. Fitch views corporate governance risks as significant, due to the overlap of ownership and management functions, with the main shareholder acting as the bank's CEO. Potential risks also relate to Levoberezniy, which is nearly the same in size to PSCB, is managed quite aggressively and has a somewhat weaker credit profile compared with PSCB, in the agency's view. RATING SENSITIVITIES: PSCB's IDRs, NATIONAL RATING AND VIABILITY RATING PSCB's ratings could be upgraded if the bank strengthens its capitalization, moderates its growth rates and continues to demonstrate reasonable asset quality as the loan book seasons. The ratings could be downgraded if there were significant relapses in asset quality, loan underwriting or corporate governance, or if the credit profile of Levoberezniy materially weakened. RATING ACTION RATIONALE AND DRIVERS: BS'S LONG-TERM IDR AND VIABILITY RATING BS's affirmation reflects the negligible changes to the bank's credit profile since the last review. The ratings consider the bank's narrow and primarily relationship-driven franchise, relatively high credit risks and significant borrower concentrations. However, the ratings also acknowledge the slightly improved depositor confidence in the bank, reflected in a broadly stabilized customer funding base. Liquidity adequately covered 35% of customer accounts at end-H112, which mitigates the long-term nature of the bank's real estate finance and residential mortgage exposures. BS's loan book contracted slightly in 2011, while NPLs increased to 14.7% as a result of two problematic, albeit reasonably reserved, exposures. BS's regulatory 16.9% capital ratio at end- H112 is modest given high lending concentrations (the largest 20 borrowers accounted for 1.8x equity at end-3M12), significant amount of relationship based lending and recent poor asset quality track record. RATING SENSITIVITIES: BS'S LONG-TERM IDR AND VIABILITY RATING BS's ratings could come under negative pressure in case of considerable deterioration of its asset quality metrics, a tightening of liquidity or increase in the riskiness of its lending. Upward movement would require significant improvement in asset quality, a deepening of the bank's franchise and a longer track record of sound performance. RATING DRIVERS AND SENSITIVITIES: CHELIND, PSCB AND BS's SUPPORT RATINGS AND SUPPORT RATING FLOORS The '5' Support Ratings and 'No Floor' Support Rating Floors of the three banks reflect their small size and limited franchises, making government support uncertain. An upgrade of these ratings is unlikely in the foreseeable future, although acquisition by a stronger owner could lead to an upward revision of a Support Rating. The rating actions are as follows: Chelind -- Long-Term foreign currency IDR: upgraded to 'BB-' from 'B+' with a Stable Outlook -- Short-Term foreign currency IDR: affirmed at 'B' -- Viability Rating: upgraded to 'bb-' from 'b+' -- Support Rating: affirmed at '5' -- Support Rating Floor: affirmed at 'No Floor' -- National Long-term rating: upgraded to 'A+(rus)' from 'A- (rus)' with a Stable Outlook PSCB -- Long-term foreign currency IDR: affirmed at 'B', Outlook Stable -- Short-term IDR: affirmed at 'B' -- Viability Rating: affirmed at 'b' -- Support Rating: affirmed at '5' -- Support Rating Floor: affirmed at 'No Floor' -- National Long-term rating: upgraded to 'BBB(rus)' from 'BBB- (rus)', Outlook Stable BS -- Long-term foreign currency IDR: affirmed 'B-' with a Stable Outlook -- Short-term foreign currency IDR: affirmed 'B' -- Viability Rating: affirmed at 'b-' -- Support Rating: affirmed '5' -- Support Rating Floor: affirmed at 'No Floor' SEVERSTAL OAO: Fitch Raises Longterm Issuer Default Rating to BB ---------------------------------------------------------------- Fitch Ratings has upgraded OAO Severstal's foreign currency Long- term (LT) Issuer Default Rating (IDR) to 'BB' from 'BB-' with a Stable Outlook. The upgrade follows clarification of Severstal's potential exposure to Lucchini SpA following court approval of the company's debt restructuring program. At end-2010 (last publicly available data) Lucchini had US$767 million of loans, 100% of which were classified as short term due to breaches of financial covenants of related loan agreements. Fitch understands that Severstal is not obliged to issue guarantees in favor of Lucchini's creditors, or provide any kind of collateral to Lucchini's creditors under the debt restructuring agreement. Severstal's exposure to Lucchini is currently limited to US$41 million of accounts receivable which were restructured with the same conditions as bank indebtedness and currently amortize. Severstal will also continue supply Lucchini with raw materials, iron ore and coking coal until the end of 2014. The Stable Outlook reflects Fitch's view that Severstal will maintain credit metrics consistent with a 'BB' rating. Fitch expects Severstal to record a 10%-11% EBIT margin in FY12, based on continuing moderation of steel and steel raw material prices. The agency expects increase of funds from operations (FFO) gross adjusted leverage to 3.0x-3.1x by end-2012 (2.0x at end-2011) with further deleverage to 2.7x-2.8x by end-2014. Severstal recorded an EBIT margin of 18.5% in 2011, compared to 18.7% in 2010. The company's surplus capacity in both iron ore and coking coal in Russia boosted its profitability, as the relative prices of steel raw materials versus steel products was at a high point in 2011 compared to the past five years. What Could Trigger A Rating Action? Positive: Future developments that may, individually or collectively, lead to positive rating action include -- EBIT margin higher than 15% on average and not below 7.5% at any point of the business cycle. -- Neutral to positive free cash flow generation across the cycle. -- FFO adjusted gross leverage below 1.5x on a sustainable basis. Negative: Future developments that may, individually or collectively, lead to negative rating action include -- EBIT margin below 10% on a sustained basis. -- FFO adjusted gross leverage above 3.0x on a sustained basis. The rating actions are as follows: -- LT IDR upgraded to 'BB" from 'BB-'; Stable Outlook -- Short-term IDR affirmed at 'B' -- Senior unsecured rating upgraded to 'BB' from 'BB-' -- Local currency LT IDR upgraded to 'BB' from 'BB-'; Stable Outlook -- Local currency senior unsecured rating upgraded to 'BB' from 'BB-' -- National LT rating upgraded to 'AA-(rus)' from 'A+ (rus)'; Stable Outlook =============== S L O V E N I A =============== ABANKA VIPA: Moody's Lowers Gov't.-Guaranteed Debt Rating --------------------------------------------------------- Moody's Investors Service has downgraded the government- guaranteed debt ratings of Abanka Vipa (Caa1, negative; E/caa2, negative) and Factor Banka (unrated) to Baa2 from A2. In addition, Moody's also downgraded to Baa2 from A2 the issuer and senior unsecured ratings of SID banka, d.d., Ljubljana (SID Banka), a government-owned specialised development bank whose liabilities benefit from a government guarantee. The rating actions follow the downgrade of the government bond ratings of Slovenia. Ratings Rationale The action follows the weakening of the sovereign's creditworthiness, as captured by Moody's downgrade of Slovenia's government bond ratings to Baa2 from A2 on August 2, 2012. -- ABANKA VIPA AND FACTOR BANKA In downgrading the government-guaranteed debt issuance of both entities to Baa2 with a negative outlook from A2, Moody's notes that the rating is at the same level as the Slovenian government bond rating. This reflects the Republic of Slovenia's unconditional and irrevocable guarantee of the 'due and punctual payment' of all sums due and payable by both entities, as contractually required under the conditions of this debt instrument. All of Abanka's other ratings, including its standalone and supported long-term ratings were unaffected. In the case of Factor Banka, this is the only instrument that is rated by Moody's. -- SID BANKA Moody's downgraded the issuer and senior unsecured ratings of SID Banka, a government-owned specialized development bank, by three notches to Baa2 with a negative outlook from A2, in line with the action taken on the sovereign rating. The bank continues to be rated at the same level as the government bond rating, based on the following considerations: (i) the bank's full ownership by the government; (ii) an explicit government guarantee on all the bank's liabilities (under the amended Slovene Export and Development Bank Act); and (iii) the bank's policy mandate in extending funding to development projects and the promotion of export activities in the Slovenian economy. -- RATING SENSITIVITIES Moody's notes that the sensitivity of the sovereign supported ratings will be directly influenced by rating actions on the government rating, in line with the aforementioned considerations on the nature of these instruments. FULL LIST OF RATING ACTIONS The following ratings were downgraded: Issuer: Abanka Vipa d.d. Government-guaranteed senior unsecured ratings to Baa2 from A2 with negative outlook Issuer: Factor Banka Government-guaranteed senior unsecured ratings to Baa2 from A2 with negative outlook Issuer: SID banka, d.d., Ljubljana Issuer rating, to Baa2 from A2 with negative outlook Senior unsecured regular bond/debenture ratings to Baa2 from A2 with negative outlook The principal methodology used in rating Factor banka and Abanka Vipa was Moody's Consolidated Global Bank Rating Methodology published in June 2012. The principal methodology used in rating SID banka was Government-Related Issuers: Methodology Update published in July 2012. ========= S P A I N ========= * SPAIN: Bankruptcy Figures Up 28.6% in Second Quarter 2012 ----------------------------------------------------------- Xinhua News Agency reports that Spanish national statistical institute INE on Monday said close to 2,300 Spanish enterprises and individuals declared bankruptcy in the second quarter of 2012. Xinhua relates that the INE said the number of debtors processed in the April-June period increased by 28.6% to 2,272, the highest since the eurozone debt crisis hit Spain. Quarter on quarter, the figure was 2.2% higher than that of the first three months of this year, Xinhua notes. INE said 30.8% of the enterprises declaring bankruptcy in the second quarter were in the construction and real estate sector, Xinhua discloses. According to Xinhua, about one third of the insolvent companies employs only one to five employees. * SPAIN: S&P Takes Various Rating Actions on Seven Multi-Cedulas ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings in seven 'repackaged' Spanish covered bonds ('multi-cedulas') transactions and affirmed its ratings in another two. "At the same time, we removed our ratings in all nine transactions from CreditWatch negative, where we placed them on May 23, 2012," S&P said. The complete list of public ratings affected by the rating actions is accessible at http://is.gd/veC9LJ "The rating actions reflect mainly an increase in credit risk that we have seen in the multi-cedulas transactions driven by the rating actions or credit estimate revisions on Spanish financial institutions issuing the cedulas (the 'cedulas issuers') that have taken place in the first half of 2012. In addition, newly assigned ratings to some cedulas issued by a number of the underlying participants benefitted a few of these transactions. However, this didn't translate into upgrades because rising credit and concentration risks outweighed any positives gained from new covered bond ratings," S&P said. "On May 23, 2012, we placed our ratings in 43 multi-cedulas transactions on CreditWatch negative while we reviewed the effect of several rating factors that had continued to deteriorate since our August 2011 analysis. Since then one transaction has redeemed, we took rating actions on 12 on July 25, 2012, on another 21 on Aug. 2, 2012, and we are taking rating actions on the remaining nine transactions," S&P said. "The multi-cedulas transactions are repackagings of Spanish cedulas, usually mortgage or public-sector covered bonds ('cedulas hipotecarias' or 'cedulas territoriales'). Our ratings on the transactions' multi-cedulas bonds reflect our opinion on the likelihood of the full and timely payment of the bonds according to their original terms and conditions," S&P said. "If a cedulas issuer defaults just before the final maturity date, the rated multi-cedulas bonds would, according to their terms and conditions, typically be subject to an extension of the bond's scheduled maturity. Our ratings on the multi-cedulas bonds reflect our view on the likelihood that the dedicated reserve fund or liquidity line (the sources of credit enhancement for the bonds) would mitigate potential interest shortfalls during the cedulas issuer's recovery period. The recovery periods that we assumed are equal or shorter in length than the maximum extension period provided for in the transaction documents. If during this period the cedulas hipotecarias are recovered, the funds will be used to fully redeem the bonds proportionally to the recovered cedulas, without necessarily waiting for the full extension period to expire," S&P said. "We generally assume that if a cedulas issuer defaults, a full recovery on the underlying cedulas and ultimate repayment of their principal would take place, provided the underlying cedulas are sufficiently collateralized," S&P said. "Nevertheless, based on our latest analysis, we believe the credit enhancement to cover possible interest shortfalls in seven of the nine transactions analyzed would not be sufficient to pay interest on all of the bonds to the current rating level if a cedulas issuer were to default," S&P said. CREDIT MOVEMENTS "As part of our analysis, we have taken into account updated credit estimates on each of the cedulas issuers (where neither the cedulas issuer nor the underlying cedulas has a public rating)," S&P said. "According to our rating definitions, a credit estimate is a confidential indication of the likely issuer credit rating (ICR). The estimate is based on a variety of sources, including quantitative models, where applicable, and an abbreviated methodology that draws on our analytical experience and sector knowledge. These estimates do not involve direct contact with the obligor's management or in-depth insight into operating, financial, or strategic issues that such contact allows," S&P said. "Accordingly, the weighted-average credit estimates and ratings on cedulas issuers in the multi-cedulas transactions have moved downward since we last reviewed the multi-cedulas bonds in August 2011. We use these assessments as inputs into the CDO Evaluator credit risk model," S&P said. "The model establishes a scenario default rate (SDR), which is one of the driving variables we use to assess whether the credit enhancement available to each multi-cedulas bond is commensurate with its rating," S&P said. "The SDR results from the CDO Evaluator credit risk model have increased in general terms as deteriorating creditworthiness has resulted in lower credit estimates (and ratings), leading to the negative rating actions on seven transactions," S&P said. "However, over the past six months, we have assigned new ratings to cedulas hipotecarias issued by some of the underlying issuers. We have therefore used these ratings as the input parameters for our CDO Evaluator when assessing the SDR in the related transactions, rather than the ICR or credit estimate on the cedulas issuers. Since our ratings on the cedulas hipotecarias are typically higher than ICRs or credit estimates, the effect for these transactions has been positive. However, this didn't translate into upgrades because rising credit and concentration risks outweighed any positives gained from new covered bond ratings," S&P said. "In addition, increased concentrations from new mergers since last year contributed to rising SDRs for most transactions. Therefore, the effect on the SDR has been very dependent on the underlying composition of the participating issuers, and whether or not these issuers' cedulas hipotecarias are rated," S&P said. "The probability of default assumed in our analysis substantially increases when credit estimates and ratings on the assets deteriorate from investment to speculative grade. As a result, the deteriorating creditworthiness of the cedulas issuers toward these rating categories increases the SDR results," S&P said. "To assess whether the credit enhancement provided is commensurate with our ratings, we compare the liquidity line or reserve fund available with the stressed (for floating-rate bonds) interest that might need to be paid during the workout of a defaulted cedulas issuer. We assess the credit enhancement level as the product of the stressed interest rate to be paid on the multi-cedulas, the SDR, and the recovery period," S&P said. ============= U K R A I N E ============= DEWEY & LEBOEUF: UK Unit's Administrators Recommend Liquidation --------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Dewey & LeBoeuf LLP's U.K. unit should be moved from administration to liquidation, and will be on Aug. 6 unless its creditors call a meeting before then, its joint administrators said in a regulatory filing Friday. In a statement to creditors filed with the U.K. Companies House, the country's company registrar, Mark Shaw and Shay Bannon of BDO LLP said the so-called U.K. LLP and payroll unit Dewey & LeBoeuf Services Ltd. no longer belonged in administration, which is essentially the British equivalent of a Chapter 11, according to Bankruptcy Law360. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of US$245 million and assets of US$193 million in its chapter 11 filing late evening on May 29, 2012. 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. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey'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, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, 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. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey & LeBoeuf has won Court authority to use lenders' cash collateral through July 31, 2012. FORUM BANK: Fitch Puts 'B' Long-Term IDR on Negative Watch ---------------------------------------------------------- Fitch Ratings has placed Ukraine's Forum Bank's ratings, including its 'B' foreign currency Long-term Issuer Default Rating (IDR), on Rating Watch Negative (RWN). Rating Action Rationale and Drivers The rating action follows the recent announcement that Ukrainian- based Smart Holding will acquire a 96% stake in Forum from the bank's current shareholder, Commerzbank AG ('A+'/Stable). Fitch has been informed that the sale is likely to be completed in the next three to four months. The affirmation of Forum's Viability Rating (VR) at 'cc' reflects high pressure on the bank's economic capital and weak asset quality. In addition, there is a significant risk of continued deposit outflow from Forum as a result of the announced shareholder change, while liquid assets (net of short-term interbank liabilities) covered a moderate 17% of customer accounts at August 1, 2012. Rating Sensitivities Fitch expects to resolve the RWN and downgrade Forum's Long-term IDRs in the near-term, i.e. prior to completion of the bank's sale, to reflect the reduced probability of external support for the bank from the new shareholder. The Long-term IDR could be downgraded to 'CC', the current level of the bank's VR, if Fitch believes that the acquisition is unlikely to benefit the bank's standalone profile. However, the downgrade might be slightly less severe if Fitch understands that the transfer of ownership is likely to result in improved prospects for work-outs and recoveries of some of the bank's problem assets, or if the new owner supports Forum's funding and liquidity profile. Representatives of Smart Holding have informed Fitch that no capital injections into Forum are currently planned. Nevertheless, some uncertainty remains regarding the motivations of Smart Holding in acquiring the bank and its plans for Forum's future development. If funding outflows accelerate in the near term and are not offset by liquidity support by either the new or the old shareholder, resulting in the bank not being able to service its current obligations, the Long-term IDR could be downgraded to 'RD'. At present it is uncertain whether Commerzbank would provide any further liquidity support to Forum prior to the completion of the bank's sale, or whether the new shareholder would be willing and able to make funding available. Fitch will attempt to receive clarification from Smart Holding on its plans for Forum, and from both shareholders on potential interim liquidity support, prior to resolving the Rating Watch. The rating actions are as follows: -- Long-term foreign currency IDR: 'B'; placed on Rating Watch Negative -- Long-term local currency IDR: 'B+'; placed on Rating Watch Negative -- Short-term foreign currency IDR: 'B'; placed on Rating Watch Negative -- Support Rating: '4'; placed on Rating Watch Negative -- Viability Rating: affirmed at 'cc' -- National Long-term Rating: 'AA+ (ukr)'; placed on Rating Watch Negative -- Senior unsecured: 'AA+(ukr)'; placed on Rating Watch Negative =========================== U N I T E D K I N G D O M =========================== ACACIA LODGE: In Administration, Seeks Buyer -------------------------------------------- Henley Standards reports that Acacia Lodge has also gone into administration. Three partners at Zolfo Cooper have been appointed joint administrators of the company, which owns another nine care homes in the South, according to Henley Standards. "Our focus is very much on securing a buyer for these high- quality and well-managed care homes and we welcome expressions of interest. In the meantime, we will continue to ensure that all residents experience the same high standard of care they currently receive," the report quoted Nick Cropper, a partner at Zolfo Cooper, as saying. The report notes that two other homes in the group, Aspen Grange in Braintree and Amber Wood in Cheltenham, have also gone into administration. Acacia Lodge offers dementia, nursing and residential care. BARNCEST: Norfolk Buys Business Out of Administration ----------------------------------------------------- Norfolk Oak Ltd, the UK's only timber worktop manufacturer have acquired the Barncrest trading name and goodwill on July 31, and will continue to run the Barncrest brand as a separate marketing name, ensuring its continued presence in the market. Ian Walker and Julie Ann Palmer of leading corporate rescue and recovery firm Begbies Traynor were appointed Administrators in the spring of 2011 when Barncrest fell victim to the knock-on effects of the recession on domestic house building and refurbishment. Norfolk Oak Ltd will be looking to supply Barncrest's wholesale, retail and contractor clients. James Everett, operations director of Norfolk Oak, commented, "This is a perfect acquisition for us. Barncrest has an excellent reputation in the market, which we will build on even further. With our large manufacturing capability here in Norfolk, sales through the Barncrest name will be seamlessly integrated, providing enhanced product groups and customer service. We couldn't be happier." Ian Walker, Partner at Begbies Traynor, added, "We are absolutely delighted that after a long campaign we have succeeded in finding a good home for this fine Cornish brand." BRIDGE: In Administration, Cuts 100++ Jobs ------------------------------------------ Third Sector reports that The Board members of Bridge have put the charity into administration because of financial difficulties cutting more than 100 jobs in the process. The charity's four centers in the north east of England will be closed, according to Third Sector. The report notes that the charity's latest accounts show that it had an income of GBP1.1 million in 2011 and spent just over GBP1.1 million. The report says that Bridge received financial support from organizations including the Big Lottery Fund, Sunderland City Council and Durham County Council. "Like many other voluntary organizations, Bridge has continuously struggled with funding difficulties and cash-flow problems and has always managed to 'ride the storm'. . . . However, in this current economic climate we have been faced with many changes and restrictions to central funding within education: this and other factors led to reduced income and the dwindling of reserves," the report quoted Sheila Davidson, chief executive of Bridge as saying. Gillian Sayburn, insolvency director at Begbies Traynor, which has been appointed as administrator. The report discloses that Mr. Sayburn said that there was still hope that negotiations between stakeholders could result in parts of the business being rescued. Bridge is a Sunderland-based charity that provided training and support to women in the north east. CARNUNTUM I: S&P Lowers Rating on Class C Combo Notes to 'BB' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on Carnuntum High Grade I Ltd.'s class A1, A2, A3, B, C, D, and E notes, and the class C combination notes. Carnuntum High Grade I is a cash flow collateralized debt obligation (CDO) of mainly European asset-backed securities (ABS) transaction managed by Omicron Investment Management GmbH. The class C combination notes comprise EUR15,000,000 of class A2 notes, EUR12,000,000 of class C notes, and EUR5,000,000 of class E notes. "Our ratings on the class A1, A2, and A3 notes address timely payment of interest and ultimate repayment of principal," S&P said. "Our ratings on the class B, C, D, and E notes address ultimate payment of interest and ultimate repayment of principal," S&P said. "Our rating on the class C combination notes addresses the ultimate repayment of the rated balance. We calculate the rated balance as the initial notional amount of the combination notes minus the aggregate of all the distributions made to the combination notes," S&P said. "The rating actions follow the application of our updated criteria for CDOs of pooled structured finance assets as well as our assessment of the negative rating migration in the portfolio of performing assets since our last review in July 2011," S&P said "None of the ratings was affected by either the largest obligor default test or the largest industry default test, two supplemental stress tests we introduced as part of our criteria update," S&P said. "We subjected the capital structure to a cash flow analysis based on the updated methodology and assumptions as outlined by our criteria, to determine the break-even default rate (BDR) for each rated class at each rating level. At the same time, we conducted an updated credit analysis based on our new assumptions to determine the scenario default rate (SDR) at each rating level. The application of our new CDO of ABS criteria led the scenario default rates at each rating level to increase significantly, and the assumed weighted average recovery rates for each rating category to drop significantly," S&P said. "In our view, the reduction in BDRs together with the rise in SDRs indicates that the current credit enhancement levels available to the class A1, A2, A3, B, C, D, and E notes, and the class C combination notes are no longer commensurate with their current rating levels," S&P said. "As a result of these developments, we have lowered and removed from CreditWatch negative our ratings on the class A1, A2, A3, B, C, D, and E notes, and the class C combination 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 Carnuntum High Grade I Ltd. EUR1.00 Billion Floating-Rate Notes A1 BBB+ (sf) AA (sf)/Watch Neg A2 BBB (sf) AA (sf)/Watch Neg A3 BB+ (sf) A+ (sf)/Watch Neg B BB (sf) A (sf)/Watch Neg C B+ (sf) A- (sf)/Watch Neg D B+ (sf) BBB (sf)/Watch Neg E B (sf) BB (sf)/Watch Neg C combo BB (sf) A- (sf)/Watch Neg LONDON PLEASURE: In Administration on Chronic Mismanagement ----------------------------------------------------------- London Evening Standard reports that London Pleasure Gardens has gone into administration, little over a month after it opened with the high profile backing of Boris Johnson and a GBP3 million loan from Newham Council. The collapse of the London Pleasure Gardens, close to the ExCel Centre, comes amid allegations of chronic mismanagement and safety failings, according to London Evening Standard. The report notes that hundreds of staff are owed wages, architects have not been paid and the creative director resigned. "The decision by London Pleasure Gardens Limited to enter into voluntary administration is regrettable but understandable. . . . It is disappointing that the anticipated visitor numbers and revenue from recent planned events have not materialised. . . . London Pleasure Gardens won the right to operate the site for two years from the LDA and Newham Council as the winner of a Meanwhile London Competition," the report quoted a spokesperson for the London Borough of Newham as saying. The report notes that the Gardens hosted the Bloc festival but was forced to close just hours after it started. The company behind the festival, Baselogic Productions, have also gone into administration, the report relates. LONGTON CRANE: In Administration, Cuts 30 Jobs ---------------------------------------------- The Sentinel reports that Longton Crane Hire has gone into administration cutting 30 jobs in the process. The staff was given the news after being called to an impromptu meeting, according to The Sentinel. The Sentinel notes that since 2009, workers say they have had their wages reduced and sometimes only worked four days a week instead of five or six. The report relates that workers had hoped for a brighter future in recent months after the firm bought new equipment. Longton Crane Hire has been trading for 33 years and hires cranes and lifting plans as well as offering staff and lift supervisors. The company has a fleet of mobile cranes for hire, which have a lifting capacity of 220 tonnes. The company also provides a contract lifting service, which means their staff take responsibility for the entire lifting operation. MATHIAS BAUERLE: Liquidator Expects to Sell Business Before Nov. ---------------------------------------------------------------- Pamela Mardle at PrintWeek reports that Martin Mucha, the provisional liquidator of Mathias Bauerle, said he expected to find an investor to take on the business as a going concern before November and was adamant that selling the business off in parts was not an option. PrintWeek relates that Mr. Mucha also claimed to have been in talks with a number of potential buyers, including rivals, financial investors and those looking to synergise the company with their own. According to the report, the company was two weeks away from running out of money when it filed for bankruptcy on July 23. PrintWeek notes that the German firm, which turned over nearly EUR14 million (GBP11 million) in 2011, attributed insolvency to poor sales in the quarter leading up to Drupa. However, the company claimed that its receipt of orders had stabilised during and since the fair, showing "promising" signs for the company's survival, the report says. As reported in the Troubled Company Reporter-Europe on Aug. 1, 2012, PrintWeek said Mathias Bauerle (MB) filed for bankruptcy protection. PrintWeek, citing local media reports, related that Martin Mucha, an insolvency specialist with Stuttgart law firm Grub Brugger, was appointed provisional liquidator to MB on July 23, 2012. Mathias Bauerle was founded in 1863 and has been involved in the development and production of print finishing equipment for more than 50 years. MB's UK distributor is Encore Machinery. SOLAR ENERGY: High Court Winds Up National Solar Panel Company -------------------------------------------------------------- Solar Energy Savings Limited, which marketed and sold solar panel systems to the general public, was wound-up on July 26, 2012, by the High Court in Manchester on a petition presented by the Secretary of State for Business, Innovation and Skills in the public interest following an investigation by Company Investigations of The Insolvency Service. Solar, based in Manchester but with offices throughout Great Britain, commenced trading in early 2011 and had a turnover of more than GBP50 million. The company did not itself carry out the installation of the solar panels but contacted prospective customers via a series of telephone marketing calls leading ultimately to a home visit by a salesman. The investigation found that Solar engaged in serious mis-selling practices during these home visits involving high pressure sales tactics, misrepresentation and other illegal or irregular sales practices. In particular, * customers were falsely led to believe that Solar was part of a government backed or officially authorised scheme providing discounts of up to 30% but that these were limited by number or time; * Solar's salesmen consistently overstated the performance of the panels and the return on investment likely to be achieved by the customer; * Solar claimed to be a member of a trade body when it was not; * customers were subjected to a sales pitch lasting in excess of two hours and signed contracts merely to get the salesman to leave their homes; * customers were incorrectly told that the system could be reinstalled free of charge if they moved home; * Solar induced customers to sign a contract with the promise that they would receive the full amount of their purchase price back after five years through a scheme falsely said to be underwritten by an international company called Capital Suisse; and * Solar failed to maintain adequate accounting records, preventing the Investigator from obtaining accurate information about sales and cancellations, customer deposits and the true nature and extent of payments made from its bank account. At trial, Solar did not admit the Secretary of State's allegations but did not object to the making of a winding up order on the grounds alleged by the Secretary of State and the Court was satisfied that Solar should be wound up. Commenting on the case, Scott Crighton, Investigation Supervisor said: "Solar Energy Savings Limited persistently and deliberately flouted both statutory regulations and industry standard selling practices in order to generate sales and widely promoted a non- existent scheme in order to induce members of the public into signing a contract. These proceedings make clear that The Insolvency Service will take firm and decisive action to protect the public against such objectionable practices." The petition to wind-up Solar Energy Savings Limited was presented under s124A of the Insolvency Act 1986 on March 7, 2012. The company was wound up on July 26, 2012. Solar Energy Savings Limited marketed and sold solar panel systems to the general public. ********* 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 * * *