/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/121003.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, October 3, 2012, Vol. 13, No. 197 Headlines A U S T R I A PIERRE LANG: Is Insolvent, Austrian News Reports F R A N C E CERCLE GAILLON: French Poker Room Closes Doors G E R M A N Y FUHRLANDER: Delayed Ukraine Project Prompts Insolvency Filing CENTROTHERM PHOTOVOLTAICS: Court Okays Reorganization Request HAUS-1998-1: S&P Lowers Rating on Class B-2 Notes to 'B-(sf)' POSEIDON FUNDING: Moody's Puts ABCP on Review for Downgrade VOERDE ALUMINIUM: To Continue Production Until End of December I R E L A N D CHEVRON TRAINING: High Court Appoints Interim Examiner JJB SPORTS: KPMG Appointed Provisional Liquidator to Irish Unit I T A L Y AGRI SECURITIES: S&P Cuts Rating on Class B Notes to 'B-(sf)' L I T H U A N I A BANKAS SNORAS: Lithuania Hires Swiss Law Firm to Handle Case N E T H E R L A N D S * NETHERLANDS: Corporate Bankruptcies Up 23% in Third Quarter R O M A N I A OLTCHIM: To Enter Voluntary Liquidation if Privatization Fails R U S S I A * KRASNOYARKS CITY: Fitch Affirms 'BB' Long-Term Currency Ratings S P A I N SANTANDER PUBLICO: Fitch Lowers Rating on Class B Notes to 'Bsf' S W E D E N NOBINA AB: Moody's Reviews 'Caa3' Corp. Family Rating for Upgrade U K R A I N E AGROTON PUBLIC: S&P Affirms 'CCC+' Corporate Credit Rating U N I T E D K I N G D O M DJM LOGISTICS: Former Warehouse Has New Tenant EUROMAX III: Fitch Affirms 'CCsf' Rating on Class B Notes GAMESTONE: Former Shop Turned Into Betting Business HMT LEGAL: Sells Practice After Going Into Administration JJB SPORTS: To Shut Down 133 Stores; 2,200 Jobs Affected * Administrations Drops 15% for North East Retailers X X X X X X X X * Moody's Says EMEA Auto ABS Performance Deteriorates Further * EUROPE: Moody's Says Further Sovereign Stress to Hit Insurers ********* ============= A U S T R I A ============= PIERRE LANG: Is Insolvent, Austrian News Reports ------------------------------------------------ Austrian Times reports that jewellery chain Pierre Lang Europe Handelsgesellschaft m.b.H. is insolvent. According to the report, insolvency firm Kreditschutzverband said Pierre Lang is insolvent together with daughter company Hans Andersen Ges.m.b.H. and parent company Andersen Holding. Austrian Times relates that KSV officials said about 280 staff are affected as well as around 850 creditors. The report says liquidators are currently looking at whether it is possible for the company to continue on and whether it is possible to reach a deal with creditors to allow them to accept 20% of what they are owed in exchange for allowing the firm to continue. Pierre Lang Europe Handelsgesellschaft m.b.H. designs and manufactures jewelry. The company was founded in 1961 and is based in Vienna, Austria. It has production plants in Vienna and Ireland. =========== F R A N C E =========== CERCLE GAILLON: French Poker Room Closes Doors ---------------------------------------------- Rebecca McAdam at CardPlayer reports that Cercle Gaillon, a poker room located near the Champs-Elysees in Paris, France, has shut its doors for good. Citing both the state of the economy and regulations for such clubs in France, the club had one last attempt at survival in recent times to no avail, according to CardPlayer. "The facility has been hit hard by the economic downturn coupled with unfavorable regulatory environment for gambling clubs in France, resulting from the June 7, 2012 insolvency proceedings handed down by the Tribunal de Grande Instance de Paris," Cercle Gaillon said in a (translated) message on the site obtained by CardPlayer. "The insolvency proceedings opened with an observational period of four months which allowed Cercle Gaillon, [an organisation that promises] impeccable service, a reboot of the activity, including traditional games, but the summer holiday period has decided otherwise." Cercle Gaillon, which was created in 1933, has played host to many events over the years from poker to blackjack championships. ============= G E R M A N Y ============= FUHRLANDER: Delayed Ukraine Project Prompts Insolvency Filing ------------------------------------------------------------- Recharge News reports that wind-turbine manufacturer Fuhrlander has filed for bankruptcy, claiming that delayed projects among its customers have left it in a position where it can no longer cover its bills. According to Recharge News, Fuhrlander has applied to self- administer its own insolvency proceedings, and said it has been in touch with all its major business partners to "ensure the continuation of the company". Recharge News relates that Fuhrlander said it will not immediately make any staff reductions -- having already slimmed its headcount earlier this year as part of a strategic overhaul. In May, Recharge News recalls, a consortium known as Windgrosse -- controlled by Ukrainian investor Maxim Efimov, and with ties to Russian nuclear giant Rosatom -- acquired 80% of Fuhrlander. Recharge News discloses that almost immediately, the company's founder, Joachim Fuhrlander, was replaced by Werner Heer -- who has deep ties to the Chinese market -- as Fuhrlander chairman. In August, Riccardo Gava, an Italian with extensive restructuring experience, was appointed chief executive. Fuhrlander's push into the Ukrainian market has been a key plank of its future strategy. But the company indicates that it may have been delayed projects in Ukraine that pushed it over the edge, the report states. Based in the west German state of Rhineland-Palatinate, Fuhrlander manufactures wind turbines. CENTROTHERM PHOTOVOLTAICS: Court Okays Reorganization Request ------------------------------------------------------------- The reorganization of centrotherm photovoltaics AG has entered a decisive phase. The District Court of Ulm on Oct. 1 granted the company's application to open reorganization proceedings under its own administration. The same also applies for the subsidiaries centrotherm thermal solutions GmbH & Co. KG and centrotherm SiTec GmbH, which have also been in insolvency protection proceedings since July 12. The provisional creditor committee had provided unanimous support to the application. As a consequence, centrotherm photovoltaics can restructure itself independently on the basis of the reorganization and future concept coordinated with creditors, and regulated by a court-appointed administrator. The court determined that Prof. Martin Hoermann from the Anchor legal firm, who has already functioned as provisional administrator to date, should be the administrator for centrotherm photovoltaics. Lawyer Alexander Reus of the Anchor legal firm, who has also acted as provisional administrator to date, was appointed to be the administrator for the subsidiaries centrotherm thermal solutions GmbH & Co. KG and centrotherm SiTec GmbH. The company's own administrator Tobias Hoefer welcomed the court's decision. "This sets an important signal for the future of centrotherm photovoltaics AG. Following the successful conclusion of insolvency protection proceedings which this documents, we can now make preparations for the further course of the reorganization process." The next step in the reorganization process is to submit the reorganization and future concept, which has been developed in coordination with the main creditor groups, to the District Court of Ulm by October 12, 2012. If the plan, which aims for the highest possible satisfaction of creditors, is then accepted by the creditors, and confirmed by the court, the insolvency proceedings can be terminated in line with the regulations of the German Act Relating to the Further Simplification of the Reorganization of Companies (ESUG), and the German Insolvency Directive (InsO). Centrotherm photovoltaics could then operate again on a solid basis on the market as a reorganized company, and fully independently. Irrespective of this, the full scope of business continues at centrotherm photovoltaics and the aforementioned subsidiaries. New orders have been received during the insolvency protection phase, and customers, suppliers and creditors have supported the reorganization measures. Liquidity has also developed better than planned as a consequence. The Group currently commands a liquidity position of more than EUR110 million, thereby providing a good financial base for the implementation of the reorganization plan. About centrotherm photovoltaics AG centrotherm photovoltaics AG, which is based at Blaubeuren, Germany, is a technology and equipment provider for the photovoltaics sectors. The Group currently employs around 1,300 staff, and operates globally in Europe, Asia and the USA. HAUS-1998-1: S&P Lowers Rating on Class B-2 Notes to 'B-(sf)' ------------------------------------------------------------- Standard & Poor's Ratings Services has taken various credit rating actions in Haus-1998-1 Ltd. Specifically, S&P has: -- lowered to 'B- (sf)' from 'BBB (sf)' and removed from CreditWatch negative its rating on the class B-2 notes, and -- lowered to 'BBB (sf)' from 'A+ (sf)' its rating on the class B-1 notes. "The rating actions follow our full review of the transaction, and reflect our view that the credit risk to the rated classes of notes has increased significantly as the transaction has amortized (tail-end risk)," S&P said. "The downgrade resolves our April 20, 2012 CreditWatch negative placement of the class B-2 notes, which resulted from decreasing credit support to this class of notes and from what we consider to be low recovery rates," S&P said. "The class A-1 notes fully amortized in August 2012, whereupon we withdrew our 'A+ (sf)' rating on this class of notes. As of , the most senior outstanding class of notes is the class B-1 notes," S&P said. "According to the latest investor report, received for the Sept. 14, 2012 payment date, the class B-2 notes' subordination has declined further to 13.5%, from 13.8% at our April 20, 2012 review. Consequently, while the transaction amortizes pro rata, the class B-3 notes have also diminished through losses constantly applied since June 2012. Since our last review in April 2012, recovery rates remained at what we consider to be low levels. At the same time, terminated loans and loans in foreclosure remain at about 14.5% of the current outstanding balance, which we consider to be high. In our opinion, 90-plus days delinquencies have been very low since our last review, amounting to 0.05%," S&P said. "Considering realized losses, terminated loans, loans in foreclosure, and delinquencies to date--and taking into account historical recovery rates in this particular portfolio--we have assessed the likelihood of future losses for both the performing and nonperforming parts of the collateral pool," S&P said. "While about 85% of the pool is performing, we have observed interest shortfalls on the first-loss piece--the unrated class B- 3 notes--on several occasions, and especially in 2012. We believe that a main driver of interest shortfalls is the relatively high amounts of fixed fees in the 'miscellaneous fees' bucket," S&P said. "The transaction continues to amortize and, due to the circumstances, we believe that tail-end risk to the rated classes of notes is increasing significantly," S&P said. "Therefore, we have lowered to 'B- (sf)' from 'BBB (sf)' and removed from CreditWatch negative our rating on the class B-2 notes," S&P said. "We also lowered to 'BBB (sf)' from 'A+ (sf)' our rating on the class B-1 notes," S&P said. "We will continue to monitor the transaction's performance closely," S&P said. "Haus-1998-1 is a true-sale German residential mortgage-backed securities (RMBS) transaction. The pool factor has reduced to 2.9%, from 3.3% at our April 20, 2012 review," 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 property-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 Rating To From Haus-1998-1 Ltd. EUR718.15 Million Mortgage-Backed Floating-Rate Notes Rating Lowered and Removed From CreditWatch Negative B-2 B- (sf) BBB (sf)/Watch Neg Rating Lowered B-1 BBB (sf) A+ (sf POSEIDON FUNDING: Moody's Puts ABCP on Review for Downgrade ----------------------------------------------------------- Moody's Investors Service has placed the Prime-2 (sf) rating in respect of the asset-backed commercial paper notes (ABCP) issued by Poseidon Funding Limited/Poseidon Funding Corporation on review for downgrade: Issuer: Poseidon Funding Limited EUR5000M ECP CP Program, P-2 (sf) Placed Under Review for Possible Downgrade; previously on Nov 21, 2011 Downgraded to P-2 (sf) Ratings Rationale Poseidon is a hybrid conduit sponsored and administered by HSH Nordbank AG (Baa2/P-2/ E+), whose long and short term ratings are on review for downgrade. The rating announcement reflects the placement on review for downgrade of the Prime-2 rating of HSH Nordbank AG on September 26, 2012. HSH Nordbank AG provides, among other functions, liquidity support and program-level credit enhancement to Poseidon. This rating announcement is based solely on the rating announcement with respect to HSH Nordbank AG's Prime-2 rating. No models, loss and cashflow analysis or simulation of stress scenarios have been used in Moody's analysis. Moody's expects to conclude its review of Poseidon's rating in conjunction with the review on the ratings of HSH Nordbank AG. As of August 31, 2012, Poseidon had approximately $21 million of ABCP outstanding. The principal methodology used in this rating was Moody's Approach to Rating Asset-Backed Commercial Paper published in May 2012. VOERDE ALUMINIUM: To Continue Production Until End of December -------------------------------------------------------------- Reuters reports that creditors of Voerde Aluminium have voted for it to continue production at least until the end of this year while the search for a buyer continues, Voerde's administrator said on Thursday. Reuters notes the Voerde smelter, which produces 115,000 tonnes of aluminium annually, declared insolvency in May. The plant produced just over 10% of Germany's 1.06 million tonne aluminium production in 2011. According to Reuters, insolvency administrator Frank Kebekus said a meeting of creditors decided to continue production at the plant provisionally until Dec. 31, 2012. A decision will be made in December about continuing output beyond that date, he said. Reuters discloses that U.S. metals group Aleris in August bought Voerde's cast house. Buyers are now being sought for the separate electrolysis and anode production units at the plant, Mr. Kebekus, as cited by Reuters, said. Mr. Kebekus told the creditors meeting there is a "good chance" of finding an investor to take over the rest of the plant, the news agency relays. Reuters adds Mr. Kebekus said Voerde's business performance has stabilised and a return to profitability was expected in the fourth quarter of 2012. Voerde Aluminium launched insolvency proceedings on May 4 but said the business would continue to operate and it would seek to restructure. According to Reuters, the company said it had hit liquidity problems because aluminium prices had fallen since July last year while production costs increased. Voerde Aluminium is a German aluminium smelter. The company produces around 115,000 tonnes of aluminium annually and has 410 employees. ============= I R E L A N D ============= CHEVRON TRAINING: High Court Appoints Interim Examiner ------------------------------------------------------ The Irish Examiner reports that an interim examiner has been appointed to Chevron Training and Development Ltd. According to the report, the High Court heard Chevron Training was tipped into insolvency after an arbitrator made a EUR100,000 award against them in a trade dispute last August. The Irish Examiner relates that the award is owed to Link 2 Leads Ltd, which allegedly claimed it would wind up Chevron if the money wasn't paid within 21 days. Chevron has debts of over EUR1 million but remains profitable and employs 15 people, five of whom are disabled, the report notes. Chevron Training and Development Ltd. runs training courses, often aimed at unemployed people wishing to upskill. JJB SPORTS: KPMG Appointed Provisional Liquidator to Irish Unit --------------------------------------------------------------- Independent.ie reports that KPMG'S Kieran Wallace has been appointed as provisional liquidator to the Irish business division of JJB Sports, the British retailer which went into administration on Monday. The division comprises four retail stores and two gyms based in Dundalk, Limerick, Blanchardstown and Liffey Valley -- it employs 102 people, Independent.ie discloses. According to Independent.ie, the retail stores and gyms will in the meantime remain open on a "business as usual" basis. Mr. Wallace will now move to sell the business and assets of JJB Sports in Ireland as a going concern, Independent.ie notes. JJB Sports plc -- http://www.jjbcorporate.co.uk/-- is a sports retailer. JJB Sports is a multi-channel sports retailer supplying branded sports and leisure clothing, footwear and accessories. It operates out of over 185 stores across the United Kingdom and Ireland with e-commerce offering. ========= I T A L Y ========= AGRI SECURITIES: S&P Cuts Rating on Class B Notes to 'B-(sf)' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit rating on Agri Securities S.r.l.'s series 2008 class B notes to 'B- (sf)' from 'BBB- (sf). "At the same time, we affirmed our rating on the class A notes at 'AA+ (sf)'," S&P said. "The rating actions follow our review of the performance of Agri Securities' series 2008 notes," S&P said. "Delinquencies have increased considerably since June 2011. Mortgage loans in arrears for more than 90 days comprised 5.1% of the performing pool on the last payment date in September 2012, up from 3.2% in March 2012 and 2.8% in June 2011," S&P said. "In September 2012, cumulative gross defaults reached 11.0% of the portfolio at the beginning of the amortization period in March 2010, up from 7.1% in September 2011," S&P said. "The transaction features an interest-deferral trigger for the class B notes, based on the cumulative net defaults ratio. We define this ratio as cumulative defaulted receivables, minus cumulative recoveries on the initial portfolio, plus subsequent purchases in the first 18-month revolving period. In September 2012, the cumulative net defaults ratio reached 6.8%, up from 5.0% in September 2011," S&P said. "According to the transaction documents, when the net defaults ratio exceeds 7.8%, the interest on the class B notes is not paid, and the equivalent amount is deferred to repay principal on the class A notes. Having the trigger based on the net cumulative defaults means that an improvement in performance could reduce the trigger level as cumulative defaults are offset by recoveries," S&P said. "The credit enhancement level available for the class B notes is currently 10.8%, up from 7.8% in June 2011--that can potentially offset the increasing amount of net defaults. Nevertheless, the rating action on the class B notes is driven by the interest deferral trigger. We believe that the likelihood of the cumulative net defaults ratio reaching the trigger level has increased in the past year, and consequently also the likelihood that the interest on the class B notes will not be paid. We have therefore lowered our rating on the class B notes to 'B- (sf)' from 'BBB- (sf)'," S&P said. "The affirmation of the rating on the class A notes follows our credit and cash flow analysis. The relevant legal and counterparty analysis has not changed since our previous review on June 3, 2011, and the swap agreement is not in line with the replacement language described in our 2012 counterparty criteria. Consequently, we have run additional sensitivity tests without the benefit of the swap to test the rating on the class A notes," S&P said. "The increase in arrears and defaults is offset by the increase in credit enhancement available for the class A notes, which rose to 38.6% in September 2012 from 27.0% in June 2011. We have therefore affirmed our rating on the class A notes at 'AA+ (sf)'," S&P said. "Agri Securities 2008 is an Italian lease receivables asset- backed securities (ABS) transaction, originated by Iccrea BancaImpresa SpA (formerly Banca Agrileasing SpA). Iccrea BancaImpresa is a bank specialized in providing corporate financing in Italy. It is a member of the Iccrea Group and it is closely associated with the Banche di Credito Cooperativo, the Italian co-operative banking network," 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 Agri Securities S.r.l. EUR1.014 Billion Asset-Backed Floating-Rate Notes And Unrated Notes Series 2008 Rating Lowered B B- (sf) BBB- (sf) Rating Affirmed A AA+ (sf) ================= L I T H U A N I A ================= BANKAS SNORAS: Lithuania Hires Swiss Law Firm to Handle Case ------------------------------------------------------------ Aaron Eglitis and Bryan Bradley at Bloomberg News, citing the Baltic News Service, report that the Lithuanian Finance Ministry hired Swiss law firm Lalive and the Baltic law firm Sorainen Partners to defend the country against claims arising from the takeover of Bankas Snoras AB. According to Bloomberg, BNS said that the ministry and the law firms signed a three-year contract worth LTL10 million (US$3.7 million) on Sept. 24. Bloomberg notes that the newswire said Vladimir Antonov, the former majority owner of Snoras who is fighting extradition from London and civil charges over the lender's bankruptcy, filed a suit against Lithuania over the takeover on May 7. About Bankas Snoras Bankas Snoras AB is Lithuania's fifth biggest lender. Snoras held LTL6.05 billion in deposits and had assets of LTL8.14 billion at the end of September. It competes with Scandinavian lenders including SEB AB, Swedbank AB (SWEDA), and Nordea AB. It also controls investment bank Finasta and Latvian lender Latvijas Krajbanka AS. As reported in the Troubled Company Reporter-Europe on Dec. 2, 2011, The Baltic Times, citing LETA/ELTA, said Vilnius District Court accepted the application regarding the initiation of bankruptcy proceedings against Snoras bank. The Bank of Lithuania delivered application on Snoras bankruptcy on Nov. 28, 2011. The TCR-Europe, citing Bloomberg News, reported on Nov. 28, 2011, that Lithuania's central bank said that Snoras' financial situation is "worse than previously identified" and saving the bank "would cost significantly more and would take longer than the available liquidity" at Snoras. Governor Vitas Vasiliauskas said at a news conference on Nov. 24 that some LTL3.4 billion (US$1.3 billion) in assets are missing, according to Bloomberg. ===================== N E T H E R L A N D S ===================== * NETHERLANDS: Corporate Bankruptcies Up 23% in Third Quarter ------------------------------------------------------------- DutchNews.nl reports that credit registration group Dun & Bradstreet on Monday said the number of companies going bankrupt in the Netherlands rose 23% year-on-year in the third quarter. According to DutchNews.nl, Dun & Bradstreet said that most companies went bankrupt in Friesland and Drenthe and were least likely to go bust in Zuid-Holland and Zeeland. ============= R O M A N I A ============= OLTCHIM: To Enter Voluntary Liquidation if Privatization Fails -------------------------------------------------------------- Manuela Panescu at Ziarul Financiar reports that the Romanian government pledged to put Oltchim under voluntary liquidation unless the privatization succeeds in the agreement with the International Monetary Fund. Oltchim is a Romanian chemical company. =========== R U S S I A =========== * KRASNOYARKS CITY: Fitch Affirms 'BB' Long-Term Currency Ratings ----------------------------------------------------------------- Fitch Ratings has affirmed the Russian City of Krasnoyarsk's Long-term foreign and local currency ratings at 'BB', Short-term foreign currency rating at 'B' and National Long-term rating at 'AA-(rus)'. The Outlooks on the Long-term ratings are Stable. The affirmation reflects the city's strong local economy, sound budgetary performance, an improving infrastructural environment and still moderate direct risk. The ratings also factor in the city's high investment needs resulting in an increase in direct risk, and high refinancing needs stemming from a short-term debt maturity profile. Fitch notes that maintenance of sound budgetary performance with operating balance averaging 14% of operating revenue in the two subsequent years coupled with direct risk stabilization below 30% of current revenue would lead to an upgrade. Conversely, deterioration of budgetary performance with operating margin at about 5% and/or insufficiency of operating balance to cover debt refinancing needs would lead to a downgrade. Fitch expects Krasnoyarsk's operating performance to stabilize with an operating balance at about 10% of operating revenue in 2012-2014. This is below than pre-crisis average margins of 24% in 2007-2008. However, the operating balance remains satisfactory for the city's debt servicing needs. Operating expenditure is under pressure because of promises on salary increases made by the federal government, but this would be compensated by higher transfers from the budget of Krasnoyarsk region and tax revenue increase. Krasnoyarsk's direct risk has a short-term maturity profile, which poses high refinancing risk. It is dominated by bank loans and loans from the regional budget with an average maturity of between one and two years. About 93% of the city's liabilities expire in 2012-2013, creating high refinancing pressure. Immediate refinancing risk is mitigated by several unused credit lines of RUB3.7 billion at Sberbank ('BBB'/Stable/'F3'). These exceed the RUB3.1 billion of short-term liabilities due in October-December 2012. The city has constantly recorded deficit before debt variation since 2008 and Fitch forecasts deficits in 2012-2014. It is driven by high capital spending, which has constantly exceeded 20% of total expenditure during the past five years. This has led to an increase in debt as about 20% of capex was financed by new borrowing. Fitch expects the city's direct risk to be about RUB6.8bn by end- 2012, which corresponds to a moderate 28% of current revenue. Debt will gradually increase to about 33% of current revenue in 2013-2014. Debt coverage (direct risk/current balance) will remain below four years in 2012-2014, which exceeds the average debt maturity of the city's debt of two years. With a population of 998,082 inhabitants (2011), the city is the capital of Krasnoyarsk Region, which is one of the top 10 Russian regions by gross regional product and the second-largest Russian region by area. The city's economy has a strong industrial sector dominated by metallurgy and machine-building. This gives it a strong tax base, but also exposes it to volatile business cycles in non-ferrous metallurgy. ========= S P A I N ========= SANTANDER PUBLICO: Fitch Lowers Rating on Class B Notes to 'Bsf' ---------------------------------------------------------------- Fitch Ratings has downgraded Santander Publico 1, F.T.A.'s notes as follows: -- Class A (ISIN ES0338185004): downgraded to 'BBsf' from 'BBBsf'; Outlook Negative -- Class B (ISIN ES0338185012): downgraded to 'Bsf' from 'BBBsf'; Outlook Negative The downgrade reflects the increasing risk stemming from the portfolio comprised of debt issued by the Spanish public sector entities. Loans in arrears by more than 180 days have increased to 1.1% from 0.1% in October 2011. The Negative Outlook on both classes also highlights the increased risk on public sector entities in the current stressed economic environment. The transaction is capped to Spain's sovereign rating of 'BBB'/Negative/'F2' because the credit quality of public sector borrowers is highly correlated with the sovereign. For rated entities referenced in the portfolio, Fitch's credit opinions or public ratings are on average 'BBB'/'BBB-'. However, given the thin level of credit enhancement (class A 8.75%, class B 4.19%) and the obligor concentration level in the portfolio (the largest 10 obligors representing around 37% of the portfolio) class A and class B are vulnerable to the default of a small number of large obligors with weaker credit profiles than average. In Fitch's view the rating of class A is not commensurate with the sovereign rating of Spain. In addition while recoveries are expected to be high if the public sector entities continue to benefit from the support of the Spanish government, recovery proceeds timing could be lengthy potentially resulting in a high negative carry for the transaction. In assessing the transaction's credit quality, the agency relied on credit opinions produced for a sample of obligors by Fitch's International Public Finance group. =========== S W E D E N =========== NOBINA AB: Moody's Reviews 'Caa3' Corp. Family Rating for Upgrade ----------------------------------------------------------------- Moody's Investors' Service has placed Nobina AB's Caa3 Corporate Family Rating and the Ca/LD Probability of Default Rating on review for upgrade. The review for upgrade is in response to Nobina's announcement that it plans to refinance the EUR85 million (approximately SEK711 million) senior secured notes, which were temporarily deferred until October 31, 2012 on August 1, 2012, with a debt- to-equity swap. According to the preliminary terms & conditions, approximately 25% of the principal of the EUR85 million notes will be converted into equity corresponding to a 95% stake in Nobina and the remaining 75% will be converted in new senior secured notes, to be issued by Nobina Europe AB and maturing in 5-years and paying annual coupon of 11%. Nobina Europe AB is an indirect subsidiary of Nobina AB and the issuer of the current EUR85 million notes. Noteholders will be granted a put option after two years, conditional on certain levels of cash build-up in the company. Moody's notes that Nobina's shareholder and bondholder base will be nearly fully aligned after a successful execution of the proposed transaction. Moody's believes that the proposed transaction will constitute a distressed exchange and the PDR of Ca/LD anticipates this event. Upon the closing of the debt-to-equity swap, Moody's will classify the exchange as a limited default. The transaction is expected to close by the end of October at which time Moody's will make a decision regarding an upgrade. However, Moody's expects that Nobina's Corporate Family Rating will remain in the Caa range following the completion of the transaction. Ratings placed on review for possible upgrade: Corporate Family Rating at Caa3 Probability of Default Rating at Ca/LD RATINGS RATIONALE The successful completion of the transaction will eliminate the August 2012 maturity of the outstanding bond and the risk of a near-term insolvency. Assuming the refinancing occurs as proposed; the more relaxed debt maturity profile will improve Nobina's near term financial flexibility. The possible rating upgrade also reflects Moody's expectation that profitability levels will remain stable or slightly improve and that free cash flow will be positive, albeit modest compared to total debt outstanding. However, while the proposed refinancing will improve Nobina's near-term financial flexibility, it will not improve the company's current low cash balance of SEK150 million and it will not materially reduce the company's leverage and interest burden given the higher coupon of 11% compared to 9.125% on the old notes. Debt/EBITDA is expected to remain around 6.5x-7.0x times in fiscal year 2012-13 (ending February 28) compared to 7.2x at 31 August 2012, a level Moody's views as substantial given Nobina's relatively narrow business focus and modest free cash flow generation. Other factors considered in Nobina's ratings are (1) the company's position as the largest Nordic bus transportation group with a significant proportion of business with local Scandinavian communities that have relatively high revenue visibility and predictability due to limited transportation volume exposure; (2) the group's track record of generating positive free cash flow, albeit modest in relation to outstanding debt; (3) the group's limited scale with revenues and profit generation being concentrated on the Swedish market; and (4) the compression in the group's credit metrics in fiscal year 2011-12, with first signs of improvement in its profit margins in H1 2012-13 (reported operating margin 4.2% in H1 2012-13 compared to 3.6% in H1 2011-12). Nobina's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (1) business risk and competitive position compared with others within the industry; (2) capital structure and financial risk; (3) projected performance over the near to intermediate term; and (4) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Nobina's core industry and believes Nobina's ratings are comparable to those of other issuers with similar credit risk. Nobina AB is the largest Nordic bus transportation company, operating in Sweden, Norway, Finland and Denmark. Its revenues for fiscal year 2011-12 (ending 29 February) totaled SEK7.1 billion and were mostly generated from public bus services in Sweden. This reflects the more advanced stage of the deregulation in this country, where almost all local and regional bus services have been tendered since 1989, in contrast to the situation in Norway and Finland, where less than 50% of the traffic has been tendered so far. In Sweden, the public bus transportation needs of Contractual Public Transportation Associations (CPTAs) are put up for tender via a competitive bidding process and the tenor of such contracts is typically five to eight years. The majority of contracts are priced with cost indexation levels adjusted on a monthly (Denmark), quarterly (Sweden, Finland) or annual basis (Norway). ============= U K R A I N E ============= AGROTON PUBLIC: S&P Affirms 'CCC+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC+' long-term corporate credit rating and senior unsecured debt ratings on Ukrainian agricultural producer Agroton Public Ltd. (Agroton). "At the same time, we removed the ratings from CreditWatch, where we had placed them with developing implications on May 15, 2012," S&P said. "The rating affirmation follows the progress Agroton has made in collecting its receivables, the recoverability of which were questioned by its previous auditor Baker Tilly Klitou. The collection of these accounts receivable nevertheless took more than nine months, which is longer than we had originally estimated. We believe that the process was so protracted because of the company's significant customer concentration as well as what we view as the company's risky trading policies. We also consider that the somewhat limited transparency of the company's plans and its evolving corporate governance weigh on its credit quality," S&P said. "The ratings continue to reflect our assessment of Agroton's 'weak' business risk profile and 'highly leveraged' financial risk profile, as our criteria define these terms. We consider Agroton's business risk profile to be constrained by the high risk associated with doing business in Ukraine (B+/Negative/B), which has a history of government intervention in the agricultural sector," S&P said. "We view Agroton's financial risk profile as highly leveraged mainly because we forecast that it will generate negative free cash flow until 2014, as we foresee Agroton expanding its operations and investing in equipment," S&P said. "The stable outlook balances the significant cash supporting Agroton's liquidity over the next 12 months against the company's need to refinance or repay its bond maturing in July 2014, as well as the risks related to the company's transparency and corporate governance," S&P said. "The stable outlook also reflects our opinion that Agroton's operating performance over the next six to 12 months should continue to benefit from favorable agricultural commodity prices. We also believe that Agroton will carefully calibrate its capital expenditures on expansion against its ability to service its coupon payments," S&P said. "The ratings could be positively affected if the company can generate the substantial free cash flow generation over the next two years necessary to accumulate funds for the upcoming bond repayment. Further rating upside could arise from a steady and sustainable improvement in Agroton's standing in the capital markets and advance refinancing of the bond," S&P said. "Negative rating pressure could develop if Agroton does not secure the necessary liquidity sources to repay its upcoming bond repayment at least nine months before it falls due. We could consider a negative rating action if we saw no improvement in the company's transparency, including the quality of its financials for 2012 and consistency between its plans and forecasts against actual developments. Adverse market conditions, such as a sharp fall in market prices for wheat and sunflower seeds, could also weigh on the company's credit quality," S&P said. =========================== U N I T E D K I N G D O M =========================== DJM LOGISTICS: Former Warehouse Has New Tenant ---------------------------------------------- Peter MacLeod at SHD Logistics reports that the 200,000 sq. ft. former DJM Logistics warehouse near Crewe has been re-let nearly two years after the business went into administration. SHD Logistics relates that the unit at Winsford Industrial Estate, Cheshire, was occupied by BJM until it went into administration in 2010. The report relays that the building has been empty ever since. The new tenant is The Box Works Ltd. DJM was forced into administration in conjunction with property business K&M Industrial Developments Ltd. K&M owned property at Marshfield Bank industrail estate, Crewe, according to SHD Logistics. The report discloses that DJM administrator Grant Thornton has now instructed Sanderson Weatherall and Jones Lang LaSalle to sell the property. Box Works makes and distributes laminated timber build products. EUROMAX III: Fitch Affirms 'CCsf' Rating on Class B Notes --------------------------------------------------------- Fitch Ratings has downgraded Euromax III MBS Ltd (Euromax III) class A-1 notes and affirmed the class A-2 and B notes, as follows: -- Class A-1 (XS0158773324): downgraded to 'B-sf' from 'Bsf'; Outlook Negative -- Class A-2 (XS0158774991): affirmed at 'CCCsf' -- Class B (XS0158775022): affirmed at 'CCsf' The downgrade of the class A-1 notes reflects the deterioration in the underlying portfolio's credit quality. The portfolio comprises 28 assets, of which ten are rated 'CCCsf' and below and account for 35% of the portfolio, compared to 30% as of the last review in October 2011. Assets rated 'CCsf' and below stand at 23% of the portfolio compared to 19% as of the last review. There is a substantial exposure to subprime RMBS (18%), and also CMBS (28%). The class A-1 notes have amortized to 36% of their original size. If the notes remain outstanding after December 2014, there will be a step-up in the margin paid on the notes resulting in a decrease in the amount of excess spread the transaction can generate. This will erode potential support provided by excess spread diversion in the interest waterfall on breach of coverage tests. There has been no breach of the overcollateralization (OC) test since the transaction's closing. However, it may potentially be breached after 2014, due to the potential increase in the OC test's haircuts caused by the increase in the long- dated assets in the portfolio. The agency affirmed the class A-2 and B notes as their credit enhancement levels are commensurate with the portfolio's credit quality. GAMESTONE: Former Shop Turned Into Betting Business --------------------------------------------------- This is Leicestershire reports that a former computer games store is set to be turned into a betting shop. This is Leicestershire notes that the vacant unit in Granby Street, Leicester, which used to be Gamestation, is being taken on by Ladbrokes. The report notes that the betting company has applied to the council to change the use of the building. Gamestation shut in March after its parent company went into administration, the report notes. It was one of 277 stores to be closed by administrators, with the loss of more than 2,000 jobs, the report recalls. HMT LEGAL: Sells Practice After Going Into Administration --------------------------------------------------------- Derby Telegraph reports that a Derbyshire legal firm which went into administration after suffering cash flow problems has been sold. HMT Legal, which has offices in Ripley, Alfreton, Chesterfield and Duffield, has been bought out of administration by another county legal firm, Simpson Jones, according to This is Derbyshire. The cost of the deal has not been disclosed. The report notes that despite introducing measures to turn the fortunes of the firm around, it continued to make losses. The report discloses that earlier this month, it called in Dean Nelson, head of business recovery and insolvency at Derby-based Smith Cooper, to act as administrator. The report says that some HMT staff have been made redundant although Mr. Nelson said that a number of them may be rehired. HMT provides legal advice to businesses and individuals. It was founded in 1989 under the name Hardy Titterton and Co, by Arthur Titterton and David Hardy. JJB SPORTS: To Shut Down 133 Stores; 2,200 Jobs Affected -------------------------------------------------------- Paul Jarvis at Bloomberg News reports that JJB Sports Plc will close most of its stores with the loss of about 2,200 jobs after attempts to rescue the business failed. According to Bloomberg, a statement from KPMG LLP, which was appointed as on Monday as administrator to the company, said that a total of 133 outlets will be shut, with the remaining 20 being acquired by competitor Sports Direct International Plc. Bloomberg relates that David McCorquodale, the KPMG corporate finance partner who led the sales process, said in a statement an auction process for the retailer attracted interest from more than 100 parties and led to eight first-round bids from trade and private-equity buyers. Mr. McCorquodale, as cited by Bloomberg, said that most were put off by the amount of cash and further restructuring that would have been required. Sports Direct said it will pay GBP23.77 million for the 20 stores, most of JJB's inventory and the Slazenger golf brand licenses, as well as the freehold property in Wigan, Bloomberg discloses. A further sum of as much as GBP0.25 million will be payable after a stock take, Bloomberg notes. JJB Sports plc -- http://www.jjbcorporate.co.uk/-- is a sports retailer. JJB Sports is a multi-channel sports retailer supplying branded sports and leisure clothing, footwear and accessories. It operates out of over 185 stores across the United Kingdom and Ireland with e-commerce offering. * Administrations Drops 15% for North East Retailers ---------------------------------------------------- Bdaily Business Network, citing figures released by Deloitte, reports that administrations for North East retailers have fallen by 15% in the last quarter. The number of retailers that went into administration in the region fell from 33 in quarter two to 28 in quarter three, although any optimism within the sector is cautious, according to Bdaily Business Network. Bdaily Business Network notes that across the UK, 395 firms went into administration in the third quarter, which showed a decline of 25% year-on-year. Bdaily Business Network says that Neil Matthews, restructuring services director at Deloitte in the North East commented on the figures, and said more household names were coping under financial pressures. "The decline in the number of retailers falling into administration is positive news. As the year has gone on, low inflation has eased the pressure on consumers, particularly in the non-discretionary categories," the report quoted Mr. Matthews as saying. The report notes that wage growth is set to "outstrip" inflation next year, according to Deloitte, which will give consumers increased spending power. The report discloses that Mr. Matthews added: "Whil[e] the pressure is easing, the retail sector is still fragile. The real test will come in January once the busy Christmas trading period is over. . . . Forecasts for the festive period are mixed. The challenge will be for retailers not to discount too quickly or too deeply to ensure they generate sales at acceptable margins in order to provide a stable platform for trading into the first quarter of 2013." =============== X X X X X X X X =============== * Moody's Says EMEA Auto ABS Performance Deteriorates Further ------------------------------------------------------------- The performance of the Europe, Middle East and African (EMEA) auto loan and lease asset-backed securities (ABS) market continued to deteriorate in the three-month period leading up to July 2012, according to the latest indices published by Moody's Investors Service. In the three-month period to July 2012, 60+ day delinquencies decreased to 0.81% from 0.96% in July 2011. The German auto loan and lease ABS index of 60+ day delinquencies fell to 0.44% from 0.58% in July 2011 on the back of falling unemployment. The German auto market is the largest in the EMEA auto loan and lease ABS indices (44.5% of the current balance of transactions) and so improvement in Germany had the largest influence on the overall index. However, economic difficulties in Portugal, Spain and Italy increased losses in the EMEA auto ABS market. Moody's EMEA auto loan and lease ABS index on cumulative losses increased to 1.02% in July 2012 from 0.83% and 0.87% in April 2012 and July 2011, respectively. Moody's outlook for German auto ABS collateral is stable. The rating agency expects the unemployment rate in Germany to fall to 5.5% in 2012 from 5.9% in 2011, as previously announced in as previously announced in "Moody's Statistical Handbook - Country Credit" (May 2012). Falling unemployment rates will help keep German auto delinquencies stable. Portugal, Spain and Italy will remain in economic recession in 2012. Moody's also expects the unemployment rate to rise (1) in Portugal, to 15.5% in 2012 from 13.0% in 2011; (2) in Spain, to 24.5% in 2012 from 21.7% in 2011; and (3) in Italy, to 10.0% in 2012 from 8.5% in 2011 ("Moody's Statistical Handbook - Country Credit" May 2012). Rising unemployment rates will increase delinquencies in Portugal, Spain and Italy. * EUROPE: Moody's Says Further Sovereign Stress to Hit Insurers --------------------------------------------------------------- Insurers' credit quality is linked to that of the sovereigns in which they are domiciled and conduct business, and therefore, further deterioration in the credit quality of European sovereigns would negatively affect European insurers, says Moody's Investors Service in a new report published on Oct. 1. As major fixed income investors, European insurers have direct exposure to government debt and banks in the euro area, with greater exposure in countries where they have a sizable business footprint. Insurers are also indirectly affected by the continued weakening of euro area sovereigns because the economic dislocation associated with declines in sovereign creditworthiness affects demand for insurers' products, business costs and policyholders' behavior. The report is titled "How further sovereign stress would affect European insurers and their ratings". The report outlines the potential impact of three sovereign- related stress events on European insurers' credit quality and ratings. Although these events do not represent Moody's central expectations, they constitute plausible scenarios given the downside risks in the current macro-economic and sovereign environment across the euro area. The report presents the likely consequences of these events assuming they would occur in isolation, although in practice they might occur simultaneously or subsequently. The three sovereign-related stress events analyzed by Moody's are: (i) Greece (C no outlook) defaults again and exits from the euro area; the negative direct effect on rated insurers' creditworthiness would be limited in view of their modest financial and operational exposures to this country. Moody's would not expect this event, in itself, to result in any rating downgrades among insurers. (ii) The credit quality of Spain (Baa3 review for downgrade) and Italy (Baa2 negative) further deteriorates; this would negatively affect the creditworthiness of rated insurers domiciled in these countries. In addition, the ratings of non-domestic insurers with meaningful exposures to Spain or Italy could also face negative pressure if Italy's and Spain's sovereign credit quality falls below investment-grade. (iii) A modest deterioration in the creditworthiness of large Aaa-rated EU sovereigns (to levels consistent with upper- or mid- range Aa sovereign ratings); this would not, in itself, directly affect insurers' credit profiles. However, if the strongest European sovereigns' credit strength weakened to levels commensurate with single A ratings, then a broader range of Aa- rated European insurance groups could face downward ratings pressure. ********* 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 * * *