/raid1/www/Hosts/bankrupt/TCREUR_Public/121128.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, November 28, 2012, Vol. 13, No. 237
Headlines
A L B A N I A
* ALBANIA: Moody's Affirms 'B1' Rating; Outlook Remains Stable
B E L G I U M
DEXIA CREDIT: S&P Rates Sub. Lower Tier 2 Instruments 'B-'
G E R M A N Y
PROVIDE BLUE 2005-1: S&P Cuts Rating on Class E Notes to 'BB-'
G R E E C E
* GREECE: European Finance Ministers Ease Terms on Emergency Aid
H U N G A R Y
GYULAI HUSKOMBINAT: Liquidator Mulls 300 Job Cuts
I R E L A N D
TITAN EUROPE 2006-3: Fitch Affirms 'Dsf' Rating on Class D Notes
TITAN EUROPE 2006-5: Moody's Cuts Rating on Cl. X Notes to 'Caa1'
K A Z A K H S T A N
KAZAKH AGRARIAN: S&P Affirms 'BB+/B' Issuer Credit Ratings
KAZAKHSTAN MORTGAGE: Fitch Raises Foreign Currency Rating to BB+
N E T H E R L A N D S
ARENA 2012-I: Fitch Assigns 'BB-sf(EXP)' Rating to Class E Notes
ING GROEP: EU Extends Deadline to Divest Assets & Repay Debts
TELECONNECT INC: Issues 1 Million Common Shares to Investors
TMF GROUP: Moody's Gives 'B2' Corp. Family Rating; Outlook Stable
TMF GROUP: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
P O L A N D
CENTRAL EUROPEAN: Amends Q2 Financials to Correct Write-Offs
CENTRAL EUROPEAN: Reports US$35.7-Mil. Net Income in 3rd Quarter
P O R T U G A L
* CITY OF LISBON: Fitch Affirms 'BB+/B' LT Currency Ratings
* CITY OF PORTO: Fitch Affirms 'BB+/B' Long-Term Currency Ratings
S P A I N
BANKINTER 3: Moody's Cuts Rating on Class D Notes to 'Caa2'
S W E D E N
SAS AB: Three Government Owner States Defend Rescue Package
* SWEDEN: Moody's Changes Banking System Outlook to Stable
S W I T Z E R L A N D
PETROPLUS HOLDINGS: Shell to End Tolling Accord at Petit-Curronne
U K R A I N E
* CITY OF KYIV: S&P Affirms 'B-' Long-Term Issuer Credit Rating
U N I T E D K I N G D O M
AERTE GROUP: Files Notice to Appoint Administrators
CELTIC SPRINGS: NHS Wales to Provide Care for Welsh Patients
ENTERPRISE INNS: Focuses on Paying Off Debt; Pre-Tax Profit Down
* UK: Moody's Says Non-Acceptance of License Changes Credit Neg.
X X X X X X X X
* Moody's Says EMEA CMBS Defaults to Rise in Fourth Qtr. 2012
*********
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A L B A N I A
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* ALBANIA: Moody's Affirms 'B1' Rating; Outlook Remains Stable
--------------------------------------------------------------
Moody's Investors Service has affirmed the B1 rating of Albania.
The outlook remains stable.
The affirmation reflects the following key factors:
(1) Albania's economic resiliency throughout the financial and
euro area debt crises as well as an improvement in its
institutional capacity, mainly driven by its progression in the
EU accession process.
(2) The credit constraints arising from high debt levels relative
to its peers and uncertainties regarding the country's medium-
term strategy for fiscal consolidation and debt reduction; part
of this uncertainty stems from the upcoming parliamentary
elections in 2013.
Rationale for Affirming the 'B1' Rating
The affirmation of Albania's B1 rating is based on the relative
resiliency of economic growth to the financial and euro area
crises, despite the small size and lack of diversification of its
economy. Moody's notes, however, that growth has decelerated more
recently and will remain subdued over the medium term given the
removal of government's fiscal stimulus and the re-balancing of
the economy towards exports in the context of poor growth
prospects in Europe.
Moody's expects that progress within the EU accession process
should continue to drive improvements in the country's
institutional capacity. The assessment of Albania's institutional
strength remains currently low primarily reflecting the country's
still poor ranking in terms of the rule of law and the
government's effectiveness (as calculated by the World Bank).
While Moody's recognizes this economic resiliency and institution
building, the country's rating is constrained by high debt levels
and the relatively short-term maturity structure. Moreover, its
fiscal flexibility both in terms of expenditure and revenue
appears limited. Although it may regain some financial room in
the course of next year, Moody's notes that uncertainties remain
regarding the execution of the country's medium-term fiscal
consolidation and debt-reduction plan, particularly as it
pertains to the potential privatization of oil company,
Albpetrol, which would represent a major source of revenue. These
uncertainties are only likely to be clarified after the
parliamentary elections scheduled for Spring next year.
Rationale for Maintaining the Stable Outlook
The stable outlook on the Albania's bond rating reflects a
balance of upside and downside risks. While the EC's recent
decision to recommend granting Albania candidate status under
conditions is credit positive, high debt burden and uncertainties
surrounding the fiscal consolidation plan constrain the rating.
In the months following the elections, Moody's will assess
whether these uncertainties remain and whether the rating outlook
remains appropriate.
What Could Move The Rating UP/DOWN
Although the government is addressing the economy's structural
problems, more substantial progress would be needed before
Moody's considers a ratings upgrade. Improvements in institution
building -- including judicial efficiency and success in the
tackling of corruption -- would be beneficial, as such
shortcomings hamper investment. A fiscal plan placing the debt
ratios on a downward trajectory in the medium term would also be
a source of positive pressure on the rating.
Albania is currently at the top of the rating range as indicated
by Moody's sovereign bond rating methodology. Failure to execute
its planned reform program (both economic and institutional)
could exert downward pressure on the rating. More immediately, a
failure to secure fiscal consolidation and to contain debt growth
over the medium term could exert downward pressure on the rating.
Country Ceilings
Moody's has revised both country ceilings for local-currency debt
and deposits to Ba1 from respectively A3 and Baa1 previously. The
ceiling for foreign-currency bonds has also been reassessed to
Ba2 from Ba1 previously. The ceiling for foreign-currency
deposits remains B2.
Moody's Local Currency Country Risk Ceilings determine the
maximum credit rating achievable in local currency for a debt
issuer domiciled in that country or for a structured note whose
cash flows are generated from domestic assets or residents.
Moody's foreign-currency country ceilings generally set the
highest rating possible in a given country by denoting the risk
that a government would interfere with a domiciled debtor's
repayment of its foreign-currency-denominated bonds (the Foreign
Currency Bond Ceiling) and deposits (the Foreign Currency Deposit
Ceiling).
The principal methodology used in this rating was Sovereign Bond
Ratings published in September 2008.
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B E L G I U M
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DEXIA CREDIT: S&P Rates Sub. Lower Tier 2 Instruments 'B-'
----------------------------------------------------------
Standard & Poor's Ratings Services' 'B-' ratings on two non-
deferrable subordinated lower Tier 2 instruments of Dexia Credit
Local (DCL, BBB/Watch Neg/A-2) remain on CreditWatch with
negative implications, where S&P placed them on Nov. 23, 2011.
"We consider DCL's tender offer to repurchase these two
instruments, announced Nov. 20, 2012, to be 'opportunistic,' as
defined by our criteria, as opposed to 'distressed.' Bondholders
stand to receive less value than the promise of the original
securities, with a purchase price of 65% of the nominal. However,
in our view, DCL does not face a conventional default on
nondeferrable subordinated instruments in the near-to-medium term
in the absence of an offer," S&P said.
"The purpose of the tender offer is to strengthen DCL's Tier 1
capital. On Nov. 8, 2012, the Belgian and French governments
agreed to recapitalize the Dexia group by injecting EUR5.5
billion by the end of 2012. We understand that the European
Commission's decision regarding the revised plan for the orderly
resolution of the Dexia group is expected by the end of 2012,"
S&P said.
"DCL has indicated that it is very unlikely that the call options
related to the two series of notes included in the offer will be
exercised in the future," S&P said.
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G E R M A N Y
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PROVIDE BLUE 2005-1: S&P Cuts Rating on Class E Notes to 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised to 'BBB+ (sf)' from
'BBB (sf)' its credit rating on PROVIDE BLUE 2005-1 PLC's class D
notes. "At the same time, we lowered to 'BB-(sf)' from 'BB (sf)'
our credit rating on the class E notes," S&P said.
"The rating actions follow our analysis of the transaction's
performance," S&P said.
"Since our last review of the transaction on July 12, 2011,
cumulative net losses have further diminished the unrated class F
notes to about EUR7.6 million, from EUR8.7 million in July 2011,
and EUR12.1 million at closing. The unrated notes provide credit
enhancement to the rated classes of notes. The class D notes
benefit from further credit enhancement provided by the
subordinated class E notes. Losses per interest payment date
peaked in January 2010 at EUR779,000, and have been less than
EUR400,000 since then, averaging about EUR250,000 per interest
payment date," S&P said.
"Since our last review, we have observed that defaulted reference
claims (90+ day delinquencies and bankruptcies, which have been
reported to the trustee) have been relatively stable between
2.05% and 2.22% of the current pool balance. As per the latest
investor report received for the Oct. 18, 2012 payment date,
defaulted reference claims amount to 2.05%, equaling
approximately EUR9.4 million. However, 90+ day delinquencies have
increased to 1.42% of the current outstanding balance, equaling
approximately EUR6.5 million, from 1.21% in July 2011. In our
analysis, we also considered 90+ day delinquencies that are not
included in the defaulted reference claims amount as of today,
which amount to approximately EUR1.47 million," S&P said.
"Taking into account realized losses and delinquencies to date,
and considering 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.
"We have therefore raised to 'BBB+ (sf)' from 'BBB (sf)' our
rating on the class D notes because of the increased credit
enhancement available to this class of notes," S&P said.
"We have also lowered to 'BB- (sf)' from 'BB (sf)' our rating on
the class E notes because we consider this class of notes to face
increased credit risk," S&P said.
"Amortization has reduced the pool factor in PROVIDE BLUE 2005-1
to 31%. We will continue to monitor the development of defaulted
reference claims, arrears, and actual losses in the transaction,"
S&P said.
PROVIDE BLUE 2005-1 is a partially funded synthetic German
residential mortgage-backed securities (RMBS) transaction using
the Provide Platform provided by Kreditanstalt fr Wiederaufbau
(AAA/Stable/A-1+).
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
PROVIDE BLUE 2005-1 PLC
EUR130 Million Floating-Rate Credit-Linked Notes
Rating Raised
D BBB+ (sf) BBB (sf)
Rating Lowered
E BB- (sf) BB (sf)
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G R E E C E
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* GREECE: European Finance Ministers Ease Terms on Emergency Aid
----------------------------------------------------------------
James G. Neuger, Stephanie Bodoni and Jonathan Stearns at
Bloomberg News report that European finance ministers eased the
terms on emergency aid for Greece, declaring after three years of
false starts that Europe has found the formula for nursing the
debt-stricken country back to health.
In the latest bid to keep the 17-nation euro intact, the
ministers cut the rates on bailout loans, suspended interest
payments for a decade, gave Greece more time to repay and
engineered a Greek bond buyback, Bloomberg relates. The country
was also cleared to receive a EUR34.4 billion (US$44.7 billion)
loan installment in December, Bloomberg discloses.
The batch of measures will help pare Greece's debt from 190% of
gross domestic product in 2014 to 124% of GDP in 2020, a target
set by the IMF as its condition for continuing to fund a third of
the Greek program, Bloomberg says. One IMF concession was to
raise that target from 120%, Bloomberg notes.
According to Bloomberg, to make the package palatable for
bailout-weary creditor parliaments, unprecedented controls were
built into how Greece spends the money. An account devoted to
debt servicing was strengthened and the payout of future aid
installments was keyed to the Greek government delivering on
economic pledges, Bloomberg states.
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H U N G A R Y
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GYULAI HUSKOMBINAT: Liquidator Mulls 300 Job Cuts
-------------------------------------------------
MTI-Econews reports that Istvan Mate, the liquidator of Gyulai
Huskombinat, plans to lay off 300 people.
Ms. Mate told MTI that it is irrational to keep 300 people
employed at Gyulai Huskombinat when the money has run out and
there is little chance of continuous production in the
foreseeable future.
According to MTI, Gyula's deputy mayor Norbert Alt said the local
council had done everything it could to keep the company
operating while under liquidation but found no real support for
the effort, either at the local or the national level.
"We rightfully expect the liquidator to do everything possible to
rescue the company, instead of an immediate shutdown and layoffs.
This is the simplest step from the liquidator's point of view,
but is it unacceptable from ours," MTI quotes Mr. Alt as saying.
He added that it was "more than outrageous" that a company the
government earlier said was of "special strategic importance"
should be shut down within just two months, MTI notes.
Declaring a company of "special strategic importance" allows the
application of special rules regarding liquidation and aims to
keep companies important to the national economy operating, MTI
discloses.
Gyulai Huskombinat is a company in Gyula that makes some of
Hungary's best known sausage and pate.
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I R E L A N D
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TITAN EUROPE 2006-3: Fitch Affirms 'Dsf' Rating on Class D Notes
----------------------------------------------------------------
Fitch Ratings has affirmed Titan Europe 2006-3 plc's class A, B,
C and D, as follows:
-- EUR256.4m Class A (XS0257767631) affirmed at 'BBsf'; Outlook
Stable
-- EUR237.5m Class B (XS0257768522) affirmed at 'CCsf';
Recovery Estimate (RE) 35%
-- EUR50.2m Class C (XS0257769090) affirmed at 'Csf'; RE0%
-- EUR13.6m Class D (XS0257769769) affirmed at 'Dsf'; RE0%
The affirmation reflects the ongoing poor performance of a number
of loans within the transaction, as anticipated by Fitch at its
last full rating action in December 2011. Over the last 12
months, EUR155 million of losses from the SQY Ouest, the
Weserstrasse loan and the AS Watson loan lead to full write-down
of the classes E and F notes and a partial write-down of the
Class D. The magnitude of these loses were already incorporated
in Fitch's December 2011 rating actions.
As at the last review, the majority of loans within the pool
remain distressed. Nine loans remain outstanding, five of which
report loan to value (LTV) ratios well in excess of 100%, while
six are in payment default. In Fitch's analysis, the largest
expected loss is attributable to the EUR92.9 million Quelle
Nurnberg senior loan (part of a EUR102.6 million whole loan).
Given the facility is currently accruing unpaid interest (EUR15.9
million as of the last interest payment date) and the collateral
quality is secondary in nature, Fitch estimates little principal
recoveries for this loan.
The portfolio is dominated by the EUR232 million Target loan,
accounting for 42% of the transaction's outstanding balance. Its
collateral is heavily exposed to Thales (rated 'BBB+'/Outlook
Negative), the French technology and defense company, which
accounts for 71% of total passing rent. The loan is secured by
15 office assets around France, the majority of which are located
out of town. Thales has recently declared its intention to
vacate the largest asset in the pool, a 48,000 sqm office
property located in Colombes, Greater Paris, representing 25% by
market value of all assets securing the loan. The lease has a
break option at the end of 2014.
While the company's current strategy is to optimize its use of
sites given current economic conditions, the size of the assets
let to Thales (all but one in excess of 25,000sq m), makes it
unlikely that the company will depart from all of these assets
concurrently at the upcoming break options over the next 2-3
years. In Fitch's view, the loan remains of good credit quality
and will likely redeem, consequently repaying a large portion of
the Class A notes.
A restructuring agreement was recently approved with respect to
the Rivierestate loan (8%). The loan, which failed to pay at its
maturity in April 2011, has been assigned to 'standstill' until
July 2013, with the intention of liquidating the underlying
collateral. The multi-tenanted office property securing the loan
is located in a residential area approximately 2km to the South
East of Amsterdam center, it is 50% vacant and the weighted
average lease to break is just under 2 years. Fitch expects this
loan to make a significant loss.
The Kurhaus Hotel loan (8%) matures in January 2013, and is
secured by a 5 star hotel in Scheveningen, a seaside resort of
The Hague, the Netherlands. Turnover has been severely impacted
by the economic crises, resulting in the hotel operating company
failing to make its full interest payment as of the July 2012
interest payment date. As a result, the loan is now in default.
Given interest payments are not likely to recommence, a
liquidation of the asset, inevitably leading to distressed
recovery proceeds, appears the only likely solution.
The Monnet (12%), Sydrall Business Park (6.4%) and Twin Squares
(Prater) loans (2.4%) remain outstanding having failed to repay
at their maturities over the last 22 months. While Fitch
anticipates losses for all three loans, the Monnet and Twin
Squares (Prater) loans are in a particularly precarious position.
The Monnet loan (secured by eight office properties in Belgium
and Germany) has not serviced any of its interest over the last
four quarters (with this outstanding senior liability currently
equal to EUR9.2 million), while the sole tenant in the office
property located in the Netherlands securing the Twin Squares
loan has acquired alternative premises, and stated its intention
to vacate the building in the next 12 months.
The two smallest loans in the pool, the Stage (1.7%) and Matrix
data loans (1.8%), are expected to repay without loss at their
maturities in April and July 2013 respectively.
TITAN EUROPE 2006-5: Moody's Cuts Rating on Cl. X Notes to 'Caa1'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the following classes of
Notes issued by Titan Europe 2006-5 p.l.c. (amounts reflect
initial outstandings):
EUR112.3M Class A2 Notes, Downgraded to B3 (sf); previously
on Feb 11, 2011 Downgraded to B1 (sf)
EUR0.05M Class X Notes, Downgraded to Caa1 (sf); previously
on Aug 22, 2012 Downgraded to B3 (sf)
At the same time, Moody's has affirmed the rating of the Class A1
Notes:
EUR330M Class A1 Notes, Affirmed at A1 (sf); previously on
Feb 11, 2011 Downgraded to A1 (sf)
Moody's does not rate the Class A3, B, C, D, E and Class F.
Ratings Rationale
The downgrade action on the Class A2 Notes reflects Moody's
increased loss expectation for the pool since its last review.
This is primarily due to the defaulted Quartier 206 Shopping
Centre Loan (31% of the pool) where Moody's expects a substantial
loss following the anticipated forced sale and taking into
account the large swap breakage cost and liquidity draw
repayments. Moody's also has an increased loss expectation for
the remaining five loans in the pool due to an increase in
refinancing risk resulting from (i) significantly lower values
for non-prime properties, which are not expected to recover over
the short term for the four smaller loans; and (ii) sponsor
related problems which could negatively impact refinancing with
respect to the largest loan. Additionally, following the recovery
allocation on the DIVA Multifamily Portfolio Loan on the October
2012 IPD, Class A2 incurred interest shortfalls of approximately
EUR142,000.
IO ratings are sensitive to changes in expected loss of the loan
pools that they reference. The rating on the Class X Notes is
downgraded because the realised and future expected losses have
increased compared to when the Class X Notes were downgraded in
August 2012.
The rating on the Class A1 Notes is affirmed because the current
credit enhancement level of 62%, is sufficient to maintain the
ratings despite the high loss expectation for the remaining pool.
The key parameters in Moody's analysis are the default
probability of the securitized loans (both during the term and at
maturity) as well as Moody's value assessment for the properties
securing these loans. Moody's derives from those parameters a
loss expectation for the securitized pool.
Based on Moody's revised assessment of these parameters, the loss
expectation for the remaining pool is large (25%-40%). This is
mainly driven by the second largest loan, Quartier 206 Shopping
Centre Loan (31% of the pool), which has been enforced and will
be subject to a forced property sale.
Moody's current weighted average A-loan and whole loan LTV is
191% and 217% respectively. In comparison, the Underwriter (UW)
A-loan LTV is 88.4% and the whole loan LTV is 104.1%. Moody's
notes that for four of the six remaining loans (54.2% of the
pool), the whole Moody's LTV ratios are above 90%, translating
into high probability of default at maturity (>50%). All the
loans mature between October 2015 and July 2016.
In general, Moody's analysis reflects a forward-looking view of
the likely range of commercial real estate collateral performance
over the medium term. From time to time, Moody's may, if
warranted, change these expectations. Performance that falls
outside an acceptable range of the key parameters such as
property value or loan refinancing probability for instance, may
indicate that the collateral's credit quality is stronger or
weaker than Moody's had anticipated when the related securities
ratings were issued. Even so, a deviation from the expected range
will not necessarily result in a rating action nor does
performance within expectations preclude such actions. There may
be mitigating or offsetting factors to an improvement or decline
in collateral performance, such as increased subordination levels
due to amortization and loan re-prepayments or a decline in
subordination due to realised losses.
Primary sources of assumption uncertainty are the current
stressed macro-economic environment and continued weakness in the
occupational and lending markets. Moody's anticipates (i) delayed
recovery in the lending market persisting through 2013, while
remaining subject to strict underwriting criteria and heavily
dependent on the underlying property quality, (ii) strong
differentiation between prime and secondary properties, with
further value declines expected for non-prime properties, and
(iii) occupational markets will remain under pressure in the
short term and will only slowly recover in the medium term in
line with anticipated economic recovery. Overall, Moody's central
global macroeconomic scenario is for a material slowdown in
growth in 2012 for most of the world's largest economies fuelled
by fiscal consolidation efforts, household and banking sector
deleveraging and persistently high unemployment levels. Moody's
expects a mild recession in the Euro area.
On August 21, 2012, Moody's released a Request for Comment
seeking market feedback on proposed adjustments to its modelling
assumptions. These adjustments are designed to account for the
impact of rapid and significant country credit deterioration on
structured finance transactions. If the adjusted approach is
implemented as proposed, the rating of the notes affected by the
rating action may be negatively affected.
Moody's Portfolio Analysis
Titan Europe 2006-5 p.l.c. closed in December 2006 and represents
the securitization of initially eight commercial mortgage loans
originated by Credit Suisse International. Since closing, one
loan (Hotel Balneario Blancafort Loan -- 6.1% of the initial
portfolio balance) has repaid and the DIVA Multifamily Portfolio
Loan has been worked out. The remaining loans are not equally
contributing to the portfolio: the largest loan (the Hotel Adlon
Kempinski Loan) represents 43.0% of the current portfolio
balance, while the smallest loan (the Hilite Warehouse loan)
represents 2.9%. Moody's uses a variation of the Herfindahl Index
to measure diversity of loan size, where a higher number
represents greater diversity. Large multi-borrower transactions
typically have a Herf of less than 10 with an average of around
5. This pool has a Herf of 3.3, compared to 4.2 at closing. The
pool exhibits an above average concentration in terms of
geographic location with all 32 of the remaining properties
located in Germany. The portfolio comprises of hotel (52.2%),
mixed-use (26.2%) and retail (18.2%) properties. The aggregate
outstanding balance of the securitized loans is EUR372.1 million.
The recovery proceeds from the DIVA Multifamily Portfolio Loan
where the properties were sold in September 2011, were finally
allocated to the Notes on the October 2012 IPD. There was a
EUR86.4 million (36%) loss on the securitized loan. Moody's had
expected a 40% loss. The difference between the gross sales
proceeds and the net principal paid to the Class A1 Notes was
24.7%. Of the 24.7%, the swap breakage cost contributed 17% and
the interest and swap payments made after the properties were
sold and up until the final loss determination, contributed 6.3%.
The remaining 1.4% along with EUR4 million from the
administrator's cash trap was used to cover sales costs,
liquidation fee and legal costs.
The Quartier 206 Shopping Centre loan (31% of the current pool),
the second largest loan in pool has been in special servicing for
the last 2.5 years following a payment default in April 2010. The
loan was accelerated in Q4 2011 and according to the latest
investor report, the special servicer has successfully filed for
the forced sale of the property. The borrower has launched a
counter claim, however this should only delay the auction and not
stop it. The loan is secured by a landmark retail/office building
in Berlin. The retail portion was positioned as a luxury shopping
mall with a high-end department store owned by a family member of
the loan sponsor (Jagdfeld family) along with a number of
designer boutique stores. Overall, 40% of the area is let to
sponsor related tenants for whom the lease agreements were
amended in April 2010. The tenant friendly amendments included i)
rental waivers, ii) reduction in rental rates and iii) obligation
to make rental payments including VAT and service charges being
linked to profitability. Additionally, these tenants were granted
term extension options (2x 5 years) and in the case of the
department store tenant, at the same existing rental terms. The
end result is that the sponsor related tenants have not paid rent
for the last 2.5 years nor have they covered their respective
service charges. There is also 24% physical vacancy in the
building and 67% of the remaining leases (by rental income) will
mature by the end of 2015. The resulting cashflow problem has
resulted in EUR15 million of liquidity facility drawings to date.
According to the servicer, the forced administrator has initiated
legal proceedings against the Jagdfeld family related tenants to
evict then and to request payment of the waived rents.
The property was re-valued at EUR86.8 million in January 2011,
reflecting a 52% value decline since closing. This valuation
assumed that over the valuation horizon there will be no rental
income generated from the space let to the sponsor related
tenants and the valuation used a discount rate reflecting the
good location and quality of the building. However, since the
last valuation, the cash flow situation has further deteriorated.
A worrying sign has been the departure of luxury tenants from the
center. Gucci, Yves Saint Laurent and Louis Vuitton did not renew
their leases. Their combined rent was EUR1.1 million. Moschino
recently renewed but at a significantly lower rate. At present,
the economic vacancy is 64% which reflects the non-paying sponsor
related tenants and actual vacant space. Given the decline in the
property's performance and the complexities involving the sponsor
related tenancy, there is significant uncertainty around a
valuation or potential sale price. Moody's value is only EUR35
million which takes into account no cash flow from sponsor
related tenants, the lower in-place rent, the further lease
expiries over the next years (with a moderate renewal
probability) and the high running costs of the property. Should
the forced administrator succeed in evicting the Jagdfeld family
related tenants before selling the property, the sale price
achievable would likely increase.
Upon a workout of the Quartier 206 Shopping Centre loan, the swap
would need to be broken and the swap mark-to-market paid which
would reduce the recovery to the Noteholders. Moody's' estimates
that the current swap mark-to-market is around EUR17 million. If
the property would be sold and the swap would be broken in a
year's time, the swap mark-to-market would be around EUR12
million based on the current forward curve. From the sales
proceeds, the Issuer would also have to repay the liquidity
facility drawings. Moody's expects another EUR6.2 million
liquidity draws over the next year on top of the EUR15 million
already drawn. Beyond this, legal fees, sales related costs and
liquidation fees would also need to paid. Some of this could be
covered by the cash trapped by the administrator which is
currently at EUR2.3 million. Depending on when the swap mark-to
market is realised and on the level of other costs as well as the
amount trapped by the administrator, Moody's expects a net
recovery ranging between zero and EUR2 million based on the EUR35
million Moody's value. The recovery could increase significantly
if the forced administrator succeeds in its eviction and rent
recovery process.
The Hotel Adlon Kempinski loan (43% of the current pool) is
secured by a prime 385-room, 5-star hotel property located in
Berlin next to the Brandenburg Gate. The property is owned by a
closed-end fund of which Anno August Jagdfeld is a director (he
is also the sponsor for the Quartier 206 Shopping loan). Moody's
understands from market news that investors in the fund have
initiated court proceeding against Mr. Jadfeld and that the
Cologne Public Prosecutor's Department has also started
proceedings against Mr. Jagdfeld in early September for
fraudulent behaviour including the waiver of Adlon Holding's rent
payment, a company owned by the Jagdfeld family. The hotel is 86%
let to Kempinski (by rental income) and except for one small
lease, the rest is let to Adlon Holding which operates some
restaurants, clubs and a spa within the hotel building. Adlon
Holding's rental payments were waived by the borrower between
March 2010 and December 2011. During 2012, Adlon Holding started
paying rent again and according to the rent roll is meant to pay
EUR2.14 million a year. To date, all loan interest payments have
been made in full.
Also from market news, Moody's has learnt that Kempinski, whose
lease would have expired in December 2017 is in the process of
renewing its lease for Hotel Adlon until 2032. No information on
the lease renewal terms is available as yet. The property was re-
valued at EUR242 million as of July 2011, which is a 16% decrease
compared to closing. Moody's value is EUR182 million based on
EUR12.5 million annual rent, 20% costs and 5.5% cap rate. Given
Mr. Jagdfeld's behavior with respect to both this loan and the
Quartier 206 loan, Moody's does not consider the rent from Adlon
Holding as a secure source of income and has not taken it into
account in determining the Moody's value. The loan which matures
in July 2016, is interest only and has no B-loan portion. Moody's
exit LTV is 88%. Despite the prime nature of the property,
refinancing the loan will be challenging as long as disputes
between fund management and fund participants persist and the
certainty of rental payments from the Adlon Holding is not
clarified. To reflect this risk, Moody's has increased the
refinancing default risk for the loan to a medium/high range (25
- 50%) compared with its previous assessment. Moody's expected
principal loss on this loan is in the 0% to 25% range.
The ABC Retail Portfolio Loan (14.7% of the pool) is secured by
27 retail properties, predominantly discount supermarkets. The
top three tenant who contribute approximately 48% of the rental
income are Netto Marken-Discount, Rewe Markt and Penny Markt. The
weighted average lease remaining is 4.4 years and the vacancy is
1.9%. Approximately 21% of the rent will expire over the next
three years. However over the past three years, the property
management has been effective in renewing and reletting expired
leases. Moody's value is EUR51.5 million compared to the U/W
value of 70.51 million. This results in a Moody's exit LTV of
106.4%. Given the secondary quality of the collateral property
and the expected state of the lending market, Moody's has
increased the refinancing default risk for the loan to a high
range (50 - 100%) compared with its previous assessment. Moody's
expected principal loss on this loan is also in the 0% to 25%
range.
The three smallest loans in the portfolio are each secured by a
single property in secondary locations that are either let to a
single tenant or have a dominant tenant.
The Carat Park Shopping Centre Loan (5.6% of the pool) is let to
Edeka. Their lease recently expired and Edeka renewed the lease
for only 60% of the lettable area for another ten years and with
a 9% reduction in the rent per square meter per month. The
remaining 40% is vacant. According to the servicer, the borrower
is currently in negotiations to let the remaining vacant areas
and is making good progress. Cash has been trapped since
October 2011 and the current balance of cash trap account is
EUR1.36 million. This could be needed to meet full interest and
amortization payments until a tenant is found for the vacant
space unless the borrower covers the expect debt service
shortfall. Moody's value is EUR16.8 million compared to the U/W
value of EUR28.35 million. Taking into account the amortization
until maturity in April 2016, Moody's exit LTV is 117.2%. Moody's
expected principal loss on this loan is also in the 25% to 50%
range.
The Monzanova Office Loan (3.0% of the pool) is let to three
tenants with Fujitsu contributing 92% of the rental income. The
weighted average remaining lease term for the building is 5.35
years and the property is over-rented. Moody's value is EUR8.9
million compared to the U/W value of EUR15.4 million. The Moody's
exit LTV is 119.3% and the expected principal loss is also in the
25% to 50% range.
The Hilite Warehouse Loan (2.9% of the pool) is secured by a
mixed use industrial and office property let to Hilite
(automotive industry) until 2026. In Moody's opinion, the
property is about 44% over-rented. Moody's value is EUR15.3
million which gives benefit to the high rental amount for another
14 years and results in an exit LTV of 67.4%. Moody's vacant
possession value is however only EUR5.5 million. Moody's expected
principal loss on this loan is in the 0% to 25% range.
Portfolio Loss Exposure: There has been a 36% loss on the
securitized portion of the DIVA Multifamily Portfolio Loan. This
has led to full loss on the Classes F, E and D and EUR33.77
million loss on the Class C Notes. Moody's expects a large amount
of losses on the remaining portfolio. Given the forced property
sale plans for the Quartier 206 Shopping Centre loan, further
losses will be realised in the short to medium term which in
Moody's expectation will result in full loss on the Class C and B
Notes and partial loss on the Class A3 Notes. Expected losses
from the other loans are only likely to crystallize towards the
end of the transaction term and this could potentially result in
losses on the Class A2 Notes which is reflected in Moody's
downgrade of this Class to B3 (sf).
Rating Methodology
The principal methodologies used in this rating were Moody's
Approach to Real Estate Analysis for CMBS in EMEA: Portfolio
Analysis (MoRE Portfolio) published in April 2006 and Moody's
Approach to Rating Structured Finance Interest-Only Securities
published in February 2012.
Other factors used in this rating are described in European CMBS:
2012 Central Scenarios published in February 2012.
The updated assessment is a result of Moody's on-going
surveillance of commercial mortgage backed securities (CMBS)
transactions. Moody's prior assessment is summarized in a press
release dated August 22, 2012. The last Performance Overview for
this transaction was published on September 13, 2012.
In rating this transaction, Moody's used both MoRE Portfolio and
MoRE Cash Flow to model the cash-flows and determine the loss for
each tranche. MoRE Portfolio evaluates a loss distribution by
simulating the defaults and recoveries of the underlying
portfolio of loans using a Monte Carlo simulation. This portfolio
loss distribution, in conjunction with the loss timing calculated
in MoRE Portfolio is then used in MoRE Cash Flow, where for each
loss scenario on the assets, the corresponding loss for each
class of notes is calculated taking into account the structural
features of the notes. As such, Moody's analysis encompasses the
assessment of stressed scenarios.
Moody's review also incorporated the CMBS IO calculator ver1.0
which uses the following inputs to calculate the proposed IO
rating based on the published methodology: original and current
bond ratings and credit estimates; original and current bond
balances grossed up for losses for all bonds the IO(s)
reference(s) within the transaction; and IO type corresponding to
an IO type as defined in the published methodology. The
calculator then returns a calculated IO rating based on both a
target and mid-point. For example, a target rating basis for a
Baa3 (sf) rating is a 610 rating factor. The midpoint rating
basis for a Baa3 (sf) rating is 775 (i.e. the simple average of a
Baa3 (sf) rating factor of 610 and a Ba1 (sf) rating factor of
940). If the calculated IO rating factor is 700, the CMBS IO
calculator ver1.0 would provide both a Baa3 (sf) and Ba1 (sf) IO
indication for consideration by the rating committee.
Moody's ratings are determined by a committee process that
considers both quantitative and qualitative factors. Therefore,
the rating outcome may differ from the model output.
===================
K A Z A K H S T A N
===================
KAZAKH AGRARIAN: S&P Affirms 'BB+/B' Issuer Credit Ratings
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+/B' long- and
short-term issuer credit ratings and 'kzAA-' Kazakhstan national
scale rating on Kazakh Agrarian Credit Corp. (KACC), a government
institution to support lending to the agricultural sector. The
outlook is stable.
"The 'BB+' long-term rating on KACC reflects its stand-alone
credit profile (SACP), which we assess at 'b+', along with our
opinion of a 'high' likelihood that KACC would receive timely and
sufficient extraordinary support from the government of the
Republic of Kazakhstan (BBB+/Stable/A-2; Kazakhstan national
scale 'kzAAA'), its 100% owner. The 'b+' SACP reflects KACC's
'moderate' business position, 'very strong' capital and earnings,
'moderate' risk position, 'below-average' funding, and 'moderate'
liquidity, as our criteria define these terms," S&P said.
"In accordance with our criteria for government-related entities,
our opinion of a 'high' likelihood of extraordinary government
support for KACC is based on our view of the company's
'important' role and 'very strong' link with the Kazakh
government," S&P said.
"As a result of this expected support, our long-term rating on
KACC is three notches higher than its SACP, which we assess at
'b+'," S&P said.
"We use our bank criteria to assess KACC's SACP. It reflects
KACC's 'moderate' business position, 'very strong' capital and
earnings, 'moderate' risk position, 'below-average' funding, and
'moderate' liquidity, as our criteria define these terms," S&P
said.
"The stable outlook reflects our expectation of continued strong
ongoing government support to KACC, resulting in maintenance of
its 'very strong' capitalization and reliance on parental
funding. It also reflects our assessment that KACC can continue
to expect a 'high' likelihood of timely and sufficient
extraordinary government support in case of need," S&P said.
"A stronger probability of extraordinary support might lead us to
take positive rating actions on KACC," S&P said.
Negative rating actions on the sovereign, or signs of a lower
probability of extraordinary government support, might result in
negative rating actions on KACC. Deterioration of the SACP, with
sharply weaker capitalization or growing problem assets in KACC's
portfolio, might also result in negative rating actions, although
we do not think this is likely.
KAZAKHSTAN MORTGAGE: Fitch Raises Foreign Currency Rating to BB+
----------------------------------------------------------------
Fitch Ratings has upgraded Kazakhstan Mortgage Company's (KMC)
Long-term foreign currency rating to 'BB+' from 'BB' and Long-
term local currency rating 'BBB-' from 'BB+'. The Short-term
foreign currency rating has been affirmed at 'B'. The Outlooks
on the Long-term ratings are Stable. The rating action also
applies to the company's outstanding bonds totaling KZT66.1
billion.
The rating actions reflect an improvement in the sovereign's
ability to provide support to KMC and follow the upgrade of
Kazakhstan's Long-term foreign currency Issuer Default Rating
(IDR) to 'BBB+/Stable' from 'BBB/Positive' and Long-term local
currency IDR to 'A-/Stable' from 'BBB+/Positive'.
KMC's ratings reflect the company's ownership by the government,
its strategic importance in the area of social housing and
Fitch's expectations of government support in the form of a
moderate capital injection in KMC budgeted by the national
government for 2013-2015. Fitch used its public-sector entities
rating criteria and applies a top-down approach in its analysis
of KMC. The three-notch difference between the rating of the
state and that of KMC reflects the lack of government support in
2008-2012 and KMC's relative independence. Its debt is decided
by its own management which in state accounts is not consolidated
with government debt. No funding was earmarked for KMC in the
2008-2012 state budget.
An upgrade could occur if the sovereign was upgraded or if as a
result of the planned housing program KMC becomes more closely
integrated with the government. The latter could mean explicit
government support in the form of sizeable capital injections
sufficient to change the structural position of KMC into a more
focused instrument of government policy. Fitch notes that a
weakening or absence of state support visible primarily in a
delay or lack of the planned state recapitalization of KMC in
2013 could lead to Fitch to change its approach to the rating to
a standalone basis (from the top down), which would result in a
multiple-notch downgrade.
KMC acts as the government's agent in the area of affordable
housing provision and plays a crucial role in implementing
government social housing programs for low and middle income
households. As part of an approved state program 'Affordable
housing 2020', it is planned that KMC will receive about KZT75
billion of capital injections from the Kazakhstan government over
2013-2015. Additionally, KMC contributes to the stability and
development of Kazakhstan's financial sector through refinancing
mortgage loans of commercial banks, securitization of mortgages
and by issuing bonds.
=====================
N E T H E R L A N D S
=====================
ARENA 2012-I: Fitch Assigns 'BB-sf(EXP)' Rating to Class E Notes
----------------------------------------------------------------
Fitch Ratings has assigned Arena 2012-I B.V. EUR TBD mortgage-
backed notes expected ratings, as follows:
-- Class A1 floating-rate notes: 'AAAsf(EXP)'; Outlook Stable
(Amount TBD);
-- Class A2 floating-rate notes: 'AAAsf(EXP)'; Outlook Stable
(Amount TBD);
-- Class B notes: 'AAsf(EXP)'; Outlook Stable (Amount TBD);
-- Class C notes: 'A-sf(EXP)'; Outlook Stable (Amount TBD);
-- Class D notes: 'BBB-sf(EXP)'; Outlook Stable (Amount TBD);
-- Class E notes: 'BB-sf(EXP)'; Outlook Stable (Amount TBD);
-- Class F notes: 'NRsf(EXP)' (Amount TBD).
The expected ratings are based on Fitch's assessment of the
underlying collateral, available credit enhancement, the
origination and underwriting procedures used by the sellers and
the servicer and the transaction's sound legal structure.
Arena 2012-I B.V. is a securitization of Dutch residential
mortgages originated by Amstelhuys N.V. This is a static
portfolio, which consists of prime residential mortgage loans
with average seasoning of 51 months. The weighted-average
original loan-to-market-value ratio (WA OLTMV) of the portfolio
is 92.88%, while the weighted-average affordability or debt-to-
income ratio (WA DTI) is 30.3%.
The CE to the class A notes is provided by subordination (9.5%)
and by a reserve account which at closing equals 1.5% of the
initial class A to E note balance. The transaction benefits from
an interest rate swap and a cash advance facility equal to the
greater of 2% of the class A to E notes outstanding and 1.5% of
the class A to E notes at closing.
Fitch accounted for a loss of mortgage payments due to
commingling, as the seller is not rated by the agency. The
portfolio includes about 15.5% of insurance loans, where the
insurance policy is with Aviva plc. Due to the concentration of
the insurance policies with one group and the specifics of the
underwriting, insurance policy set-off risk is significant in
this transaction. Hence, Fitch assumed a loss due to insurance
policy set-off in the cash flow analysis.
The portfolio comprises 30.23% of loan parts that benefit from
the national mortgage guarantee scheme (Nationale Hypotheek
Garantie or NHG). A reduction in base foreclosure frequency for
the NHG loans was calculated, based on historical performance
data. Fitch also used historical claims data to calculate an
increased pay-out ratio assumption.
Fitch was provided with loan-by-loan information on the
securitized portfolio as of 01 October 2012. The data fields
included in the pool cut were of average quality. Fitch did
perform an onsite file review during which it checked a selection
of 11 mortgage files. During this review Fitch checked if the
files were complete and if the data was identical to the
information provided. During the visit all files were found to
be complete and the data in the mortgage files did match with the
information in the pool tape. Based on the received repossession
data, analysis showed that the performance was slightly better
than Fitch's standard Dutch RMBS assumptions; therefore, Fitch
did not adjust its quick sale, market value decline or
foreclosure timing assumptions.
To analyze the CE levels, Fitch evaluated the collateral using
its default model, details of which can be found in the reports
entitled "EMEA Residential Mortgage Loss Criteria", dated June
2012, and "EMEA RMBS Criteria Addendum - Netherlands", dated June
2012, available at www.fitchratings.com. The agency assessed the
transaction cash flows using default and loss severity
assumptions under various structural stresses including
prepayment speeds and interest rate scenarios. The cash flow
tests showed that each class of notes could withstand loan losses
at a level corresponding to the related stress scenario without
incurring any principal loss or interest shortfall and can repay
principal by the legal final maturity.
ING GROEP: EU Extends Deadline to Divest Assets & Repay Debts
-------------------------------------------------------------
Matt Steinglass at The Financial Times reports that the European
Commission has granted ING Groep a multiyear extension on
divestments and repayments it was ordered to make in exchange for
its EUR10 billion bailout by the Dutch government in 2009.
The extensions are a concession to market conditions that ING
said made it impossible to comply with some of the commission's
original demands, which included splitting up its banking and
insurance arms and divesting many of its subsidiaries, the FT
relates.
The new agreement was negotiated by the commission, ING and the
Dutch government after a European court in March ruled that the
commission's original restructuring plan was not justified, the
FT notes.
ING was originally required to divest its insurance operations by
the end of 2013, but will now have until the end of 2015 to
divest more than 50%, and until the end of 2018 to sell the rest,
the FT says.
Rather than selling its struggling WestlandUtrecht Bank
subsidiary, which the commission originally demanded by the end
of 2012, ING will be allowed to merge it with its Nationale-
Nederlanden insurance arm, the FT discloses. WestlandUtrecht had
struggled to find a buyer because of its heavy load of property-
linked assets, the FT recounts.
Nationale-Nederlanden will be spun off as part of the IPO of the
European insurance arm, the FT states.
ING committed to a fixed schedule to repay its remaining
EUR3 billion of bailout debt to the Dutch state plus a 50%
premium, according to the FT. The debt will be retired in four
scheduled payments of EUR1.125 billion each, beginning on
November 26 and ending in May 2015.
ING is free to pay off the debt faster, in order to regain the
freedom to pay dividends, the FT states.
ING Groep N.V. is a global financial institution offering
banking, investments, life insurance and retirement services to
meet the needs of the customers. The Company's segments include
banking and insurance.
TELECONNECT INC: Issues 1 Million Common Shares to Investors
------------------------------------------------------------
On Aug. 20, 2012, an investor agreed to purchase 250,000 shares
of common stock of Teleconnect Inc. On Sept. 24, 2012, the same
investor purchased an additional 250,000 shares of common stock
of the Company and on Oct. 23, 2012, 350,000 more shares of
common stock of the Company. The Company issued a total of
850,000 shares of its restricted common stock to the investor in
exchange for an aggregate price of EUR518,000 for the purchase of
such shares.
In addition, on Nov. 16, 2012, the Company issued a total of
150,000 shares of its restricted common stock to three individual
investors that each invested EUR50,000 of capital for an
aggregate price of EUR150,000 between November 14th and 15th,
2012.
There were no underwriting discounts or commission paid in
connection with the sales. The securities were offered and sold
only to persons other than U. S. persons in reliance upon
Regulation S promulgated under the Securities Act of 1933, as
amended.
About Teleconnect Inc.
Based in Breda, in The Netherlands, Teleconnect Inc. (OTC BB:
TLCO) Teleconnect Inc. (initially named Technology Systems
International Inc.) was incorporated under the laws of the State
of Florida on November 23, 1998.
Serving as a telecommunications service provider in Spain for
almost 9 years, the Company never fully reached expectations and
decided late in 2008 to change its course of business. In
November 2009, 90% of the Company's telecommunication business
was sold to a Spanish group of investors, and on October 15,
2010, the Company completed the acquisition of Hollandsche
Exploitatie Maatschappij BV (HEM), a Dutch entity established in
2007. HEM's core business involves the age validation of
consumers when purchasing products which cannot be sold to
minors, such as alcohol or tobacco. The Company regards this age
validation business as its new strategic direction. The Dutch
companies acquired in 2007 (Giga Matrix, The Netherlands, 49% and
Photowizz, The Netherlands, 100%) are considered to function
complementary to this new service offering.
Through the purchase of HEM and its ownership in Photowizz and
Giga Matrix the Company now controls all four pillars under its
business model: the manufacturing and leasing of electronic age
validation equipment, the performance of age validation
transactions remotely, the performance of market surveys and the
broadcasting of in-store commercial messages using the age
validation equipment in between age checks.
Coulter & Justus, P.C., in Knoxville, Tenn., expressed
substantial doubt about the Company's ability to continue as a
going concern following the fiscal 2011 financial results. The
independent auditors noted that the Company has suffered
recurring losses from operations and has a net capital deficiency
in addition to a working capital deficiency.
The Company reported a net loss of US$3.26 million on US$112,722
of sales for the fiscal year ended Sept. 30, 2011, compared with
net income of US$1.97 million on US$254,446 of sales during the
prior
year.
The Company's balance sheet at March 31, 2012, showed
US$7.21 million in total assets, US$11.08 million in total
liabilities, all current, and a US$3.87 million total
stockholders' deficit.
TMF GROUP: Moody's Gives 'B2' Corp. Family Rating; Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family and
probability of default rating to TMF Group Holding B.V. (TMF).
Concurrently, Moody's also assigned a (P)B1 rating to the new
EUR380 million of senior secured floating rate notes due in 2018,
and (P)Caa1 to the EUR200 million senior unsecured notes due in
2019. The outlook on all ratings is stable. Moody's has assigned
the provisional ratings pending the completion of the refinancing
transaction.
Moody's issues provisional ratings in advance of the final sale
of securities and these reflect Moody's credit opinion regarding
the transaction only. Upon a conclusive review of the final
documentation Moody's will endeavor to assign definitive ratings.
A definitive rating may differ from a provisional rating.
Ratings Rationale
The different ratings for the notes reflect the relative ranking
within the capital structure. The senior secured floating rate
notes together with the revolving credit facility benefit from a
guarantor and security package that is ultimately expected to
comprise 84% of total group EBITDA, excluding those entities with
negative EBITDA. However, the revolver benefits from priority of
payment according to the intercreditor agreement. The senior
unsecured notes rank behind these instruments and benefit from a
senior subordinated guarantee from the same guarantor group.
The B2 rating reflects the company's limited size and reliance on
Europe, in particular the Benelux region, for a large part of
revenues and EBITDA. It further considers the need for strong
compliance and know-your-customer (KYC) procedures given the
complexity of regulation, tax and reporting requirements across
the world and elevated legal risks inherent in the industry,
particularly related to situations where TMF provides trustee,
(independent) director, or proxy management representative
services for clients. Importantly, it also incorporates the
significantly leveraged capital structure that together with some
remaining restructuring and integration cost following the Equity
Trust merger pressure operating cash flow generation. In
addition, the rating does not factor in any material further
acquisition activity and corresponding potential restructuring or
acquisition charges.
However, the rating also reflects TMF's strong position as a
corporate services provider in the Benelux region, complemented
by a global network of offices in 80 jurisdictions that enables
growth for clients into new regions and offers cost-efficient
outsourcing of corporate functions. The business benefits from
clients' needs for quality, expertise and responsiveness over
cost, and TMF's services are sometimes deeply embedded in the
clients' processes. This results in significant switching cost
allowing for stable performance throughout the cycle and solid
cash flow generation.
Following the envisioned refinancing transaction, TMF remains
significantly leveraged with an estimated and pro-forma
Debt/EBITDA around 5.7x (Moody's adjusted) for the last twelve
months to September 2012. While the company is cash generative,
the capital structure provides for limited debt repayment options
in the absence of amortizing debt instrument. Hence TMF will need
to remain on a visible positive operating trajectory to achieve
leverage reductions.
Moody's also notes that the company experiences a degree of
geographic concentration with its core Benelux and broader EMEA
regions accounting for 51% and 77% of last twelve months to
September 2012 EBITDA generation before corporate overhead cost.
The two largest contributors are the Netherlands and Luxembourg,
both known for their low corporate tax environment and extensive
global double taxation treaty network that appeals to corporate
clients for setting up holding or finance entities. The company
remains exposed to any changes to the appeal of these countries
although the rating currently assumes no near-term pressure on
TMF.
The industry is exposed to significant legal risks in situations
where parties involved may have taken differing views with regard
to the provision of services in compliance with contracts or
complex regulation, reporting and tax requirements. The company
is regulated by 18 regulators and Moody's notes the importance of
maintaining the necessary (IT) infrastructure and retain
qualified and experienced personnel to ensure compliance across
the world. Additionally, Moody's identifies elevated legal risks
in the company's structured finance business, which also includes
the provision of (independent) directors and officers, and the
domiciliary and management services which include proxy
management representatives. However, Moody's takes a degree of
comfort from the fact that these businesses represent a smaller
part of TMF's operations as these services are only provided in
countries where the company is confident that it can manage the
risk. TMF also has a comprehensive compliance structure in place
and carries customary litigation and D/O liability insurance
cover.
The business process outsourcing market in which TMF operates is
fairly fragmented and the company sometimes competes against much
larger or more specialized companies. The company benefits from
the client's need for consistent, quick and high quality
execution, and the fact that it is sometimes deeply embedded in a
client's processes. Tax, regulatory and reputational implications
from non-compliant procedures can be severe for clients which
results in reduced switching incentives purely on price
considerations. As a result client relationships last on average
more than 7 years and client retention rates reach 90%
notwithstanding typically short contract maturities that are
rolled over regularly. Moody's also positively notes TMF's high
client diversity across industries with the top 20 clients
accounting for less than 5% of total revenues. As a result, TMF's
resilient business model has resulted in solid margins, cash flow
generation and stable performance throughout the business cycle.
The company achieves organic revenue growth mainly through a
referral system from a network of relationships across law or
accounting firms and cross-selling to existing clients for
example as they expand into new countries. In this context,
Moody's views the company's investment over the last year in
improving its sales force and commercial abilities as a positive
that should support organic revenue growth. However, growth in
some regions such as the Americas and APAC may pressure margins
due to a different mix of services provided and reduced scale.
Limited capital expenditure needs and modest working capital
seasonality in combination with good EBITDA to cash flow
conversion results in generally solid cash flow generation.
However, the business also incurred substantial cash
restructuring and acquisition cost over 2011 and 2012 from the
merger with Equity Trust weighing significantly on cash flow
generation. Moody's would expect these charges to reduce from
2013 onwards in the absence of new acquisitions.
The stable outlook reflects Moody's expectation that the company
will continue to deliver resilient operating performance through
the cycle.
Negative pressure on the rating could arise if any concerns
around the resilience of the business materializes, for example
from changes in the Netherlands' or Luxembourg's appeal as tax-
efficient regions. Negative pressure could also arise if any
legal dispute becomes more substantiated. In any case, the rating
would come under pressure if the ratio of adjusted Debt/EBITDA
moves towards 6x or free cash flow generation turns negative.
Conversely, positive pressure could arise if the company
successfully executes on its growth plans diversifying the
business into APAC and Americas regions so that adjusted
Debt/EBITDA falls sustainably below 5x and FCF/Debt exceeds 5%.
Moody's views the company's liquidity profile as good. Following
the transaction the company will have no material debt maturities
until 2018 when the secured notes and revolving credit facility
fall due. While Moody's expects generated cash flows to cover
working capital and capital expenditures needs for the year,
existing cash and the undrawn EUR70 million revolving credit
facility provide for additional flexibility to weather any
working capital swings and temporary capital expenditure peaks.
The revolver carries one financial maintenance covenant with
sufficient headroom.
The principal methodology used in rating TMF Group Holding B.V.
was the Global Business & Consumer Service Industry Rating
Methodology published in October 2010. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
TMF Group Holding B.V. is a provider of business process services
mainly for companies but also for individuals, funds and
structured finance with 64% of revenues generated in EMEA
including 34% in the Benelux region in 2011, not counting the
fund services business. Services include the establishment and
maintenance of operating or holding entities and the provision of
accounting and reporting, legal administrative and HR services
(eg payroll) on an ongoing basis. The group operates over 35,500
client entities in 80 jurisdictions. The business is owned by
Doughty Hanson (65.2%) and management (34.8%).
TMF GROUP: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Dutch corporate services provider TMF
Group Holding B.V. (TMF). The outlook is stable.
"At the same time, we assigned our 'B' issue rating to TMF's
proposed EUR380 million senior secured notes, in line with the
corporate credit rating on the group. The recovery rating on the
proposed senior secured notes is '3', indicating our expectation
of meaningful (50%-70%) recovery for debtholders in the event of
a payment default," S&P said.
"We also assigned our 'CCC+' issue rating to the proposed EUR200
million senior unsecured notes due 2019, two notches below the
corporate credit rating on the group. The recovery rating on the
proposed senior unsecured notes is '6', indicating our
expectation of negligible (0%-10%) recovery for debtholders in
the event of a payment default," S&P said.
"The rating on TMF reflects our assessment of the group's
financial risk profile as 'highly leveraged.' We forecast
Standard & Poor's-adjusted debt (including shareholder loans) to
EBITDA of more than 8x on Dec. 31, 2012 (just less than 6x
excluding shareholder loans). TMF's private equity owners have a
high tolerance for aggressive financial policies, including debt-
funded acquisitions. Although the business is highly cash
generative and has low capital expenditure (capex) needs, in our
view, TMF is unlikely to materially reduce senior debt over the
near to medium term," S&P said.
"We assess TMF's business risk profile as 'fair.' The group
operates in a fragmented industry and has ongoing exposure to
litigation that could cause reputational damage. In absolute
terms, TMF has smaller operations and weaker brand recognition
than its larger accounting and consultancy peers. These
weaknesses are partially offset by the group's broad geographic
footprint and wide client base, which were both strengthened by
its 2011 merger with Equity Trust. The group benefits from
profitable and cash-generative operations and a flexible cost
base. Despite challenging market conditions in TMF's main
markets, the group has exhibited good margin resilience during
the downturn, with an average EBITDA margin of about 30% over the
past five years," S&P said.
"In our view, TMF will continue to increase revenues, maintain
its strong EBITDA margin, and sustain cash interest coverage of
about 2x," S&P said.
"We could lower our rating on TMF if the group's operating
performance is weaker than we forecast, or if TMF's EBITDA margin
declines, resulting in weaker leverage metrics. We could also
lower the rating if we see a decline in the group's cash-
conversion rate, resulting in weaker liquidity," S&P said.
"We are currently unlikely to take a positive rating action due
to TMF's very aggressive capital structure and high leverage.
That said, we could raise the rating if TMF deleverages to less
than 5x (including shareholder loans), and if adjusted FFO to
debt improves to more than 12% (including shareholder loans) on a
sustained basis," S&P said.
===========
P O L A N D
===========
CENTRAL EUROPEAN: Amends Q2 Financials to Correct Write-Offs
------------------------------------------------------------
Central European Distribution Corporation filed with the U.S.
Securities and Exchange Commission amendment no. 1 to its
quarterly report for the period ended June 30, 2012.
The Company restated the Original Filing to correct an excess
write-off of accounts receivable previously recorded to account
for promotional compensation granted to one customer at the
Russian Alcohol Group, its main operating subsidiary in Russia.
The excess write-off resulted in an inadvertent understatement of
the Company's accounts receivable.
The amended statements of operations for the three months ended
June 30, 2012, reflect a net loss attributable to the Company of
US$87.68 million for the three months ended June 30, 2012,
compared with a net loss of US$93.6 million as originally
reported. The Company also reported a net loss attributable to
the Company of US$27.50 million for the six months ended June 30,
2012, compared with a net loss of US$33.5 million as previously
reported.
The restated balance sheet as of June 30, 2012, showed US$1.87
billion in total assets, US$1.67 billion in total liabilities,
US$29.55 million in temporary equity and US$163.74 million in
total stockholders' equity. The Company originally disclosed
US$1.869 billion in total assets, US$1.681 billion in total
liabilities, US$29.6 million of temporary equity, and
stockholders' equity of US$158.1 million.
A copy of the amended Q2 Form 10-Q is available for free at:
http://is.gd/wnADQL
About CEDC
Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.
Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed
substantial doubt about Central European's ability to continue as
a going concern, following the Company's results for the fiscal
year ended Dec. 31, 2011. The independent auditors noted that
certain of the Company's credit and factoring facilities are
coming due in 2012 and will need to be renewed to manage its
working capital needs.
Liquidity
Certain credit and factoring facilities are coming due in 2012,
which the Company expects to renew. Furthermore, the Company's
Convertible Senior Notes are due on March 15, 2013. The
Company's current cash on hand, estimated cash from operations
and available credit facilities will not be sufficient to make
the repayment of principal on the Convertible Notes and, unless
the transaction with Russian Standard Corporation is completed
the Company may default on them. The Company's cash flow
forecasts include the assumption that certain credit and
factoring facilities that are coming due in 2012 will be renewed
to manage working capital needs. Moreover, the Company had a net
loss and significant impairment charges in 2011 and current
liabilities exceed current assets at June 30, 2012. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
The transaction with Russian Standard Corporation is subject to
certain risks, including shareholder approval which may not be
obtained. The Company's 2012 Annual Meeting of Stockholders,
which was postponed due to the need to restate the Company's
financial statements, is expected to be held as soon as
practicable. The Company believes that if the transaction is
completed as scheduled, the Convertible Notes will be repaid by
their maturity date, which would substantially reduce doubts
about the Company's ability to continue as a going concern.
* * *
As reported by the TCR on Aug. 10, 2012, Standard & Poor's
Ratings Services kept on CreditWatch with negative implications
its 'CCC+' long-term corporate credit rating on U.S.-based
Central European Distribution Corp. (CEDC), the parent company of
Poland-based vodka manufacturer CEDC International sp. z o.o.
"The CreditWatch status reflects our view that uncertainties
remain related to CEDC's ongoing accounting review and that
CEDC's liquidity could further and substantially weaken if there
was a breach of covenants which could lead to the acceleration of
the payment of the 2016 notes, upon receipt of a written notice
of 25% or more of the noteholders," S&P said.
In the Oct. 9, 2012, edition of the TCR, Moody's Investors
Service has downgraded the corporate family rating (CFR) and
probability of default rating (PDR) of Central European
Distribution Corporation (CEDC) to Caa2 from Caa1.
"The downgrade reflects delays in CEDC securing adequate
financing to repay its US$310 million of convertible notes due
March 2013 which are increasing Moody's concerns that the
definitive agreement for a strategic alliance between CEDC and
Russian Standard Corporation (Russian Standard) might not
conclude at the current terms," says Paolo Leschiutta, a Moody's
Vice President - Senior Credit Officer and lead analyst for CEDC.
CENTRAL EUROPEAN: Reports US$35.7-Mil. Net Income in 3rd Quarter
----------------------------------------------------------------
Central European Distribution Corporation filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing net income attributable to the Company of
US$35.76 million on US$401.11 million of sales for the three
months ended Sept. 30, 2012, compared with a net loss
attributable to the Company of US$848.73 million on US$432.94
million of sales for the same period a year ago.
For the nine months ended Sept. 30, 2012, the Company reported
net income attributable to the Company of US$8.26 million on
US$1.12 billion of sales, compared with a net loss attributable
to the Company of US$854.10 million on Us$1.17 billion of sales
for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed US$1.98
billion in total assets, US$1.73 billion in total liabilities,
US$29.44 million in temporary equity, and US$210.78 million in
total stockholders' equity.
Liquidity
Certain credit and factoring facilities are coming due in fourth
quarter of 2012, which the Company expects to renew.
Furthermore, the Company's Convertible Senior Notes are due on
March 15, 2013. The Company's current cash on hand, estimated
cash from operations and available credit facilities will not be
sufficient to make the repayment of principal on the Convertible
Notes and, unless the transaction with Russian Standard
Corporation is completed the Company may default on them. The
Company's cash flow forecasts include the assumption that certain
credit and factoring facilities that are coming due in fourth
quarter of 2012 will be renewed to manage working capital needs.
Moreover, the Company had a net loss and significant impairment
charges in 2011 and current liabilities exceed current assets at
Sept. 30, 2012.
"These conditions raise substantial doubt about the Company's
ability to continue as a going concern," the Company said in its
quarterly report for the period ended Sept. 30, 2012.
A copy of the Form 10-Q is available for free at:
http://is.gd/o7sPtF
Former CEO Wants Meeting with Shareholders
William V. Carey, former President, Chief Executive Officer, and
Chairman of the Board and a major shareholder of CEDC, wrote a
letter to the members of the Board stating that he expects a
board meeting with the Company's major shareholders to discuss
the current status of CEDC and CEDC's future plans. This is in
light of the concerns raised by Roustam Tariko and Mark Kaufman
(currently CEDC's largest shareholders collectively owning 25-30%
of CEDC's shares).
"Over the last twenty years, I have dedicated my life to building
CEDC into one of the largest producers of vodka in the world and
Central and Eastern Europe's largest integrated spirits
business," Mr. Carey wrote. "Over the years, the Company has
certainly experienced various highs and lows, but has always
found a way to overcome the setbacks. I look forward to hearing
about how the Company plans to effectively address the current
challenges."
As of Dec. 31, 2011, Mr. Carey beneficially owns 4,072,096 shares
of common stock of the Company representing 5.60% of the shares
outstanding. A copy of the Schedule 13G is available for free
at:
http://is.gd/CmvBW5
On Nov. 19, 2012, Mr. Kaufmann sent a letter to the members of
the Special Committee of the Board of Directors of the Company in
response to the Special Committee's open letter to CEDC
shareholders and bondholders from last week. A copy of the
letter is available for free at http://is.gd/OMaglo
About CEDC
Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.
Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed
substantial doubt about Central European's ability to continue as
a going concern, following the Company's results for the fiscal
year ended Dec. 31, 2011. The independent auditors noted that
certain of the Company's credit and factoring facilities are
coming due in 2012 and will need to be renewed to manage its
working capital needs.
* * *
As reported by the TCR on Aug. 10, 2012, Standard & Poor's
Ratings Services kept on CreditWatch with negative implications
its 'CCC+' long-term corporate credit rating on U.S.-based
Central European Distribution Corp. (CEDC), the parent company of
Poland-based vodka manufacturer CEDC International sp. z o.o.
"The CreditWatch status reflects our view that uncertainties
remain related to CEDC's ongoing accounting review and that
CEDC's liquidity could further and substantially weaken if there
was a breach of covenants which could lead to the acceleration of
the payment of the 2016 notes, upon receipt of a written notice
of 25% or more of the noteholders," S&P said.
In the Oct. 9, 2012, edition of the TCR, Moody's Investors
Service has downgraded the corporate family rating (CFR) and
probability of default rating (PDR) of Central European
Distribution Corporation (CEDC) to Caa2 from Caa1.
"The downgrade reflects delays in CEDC securing adequate
financing to repay its US$310 million of convertible notes due
March 2013 which are increasing Moody's concerns that the
definitive agreement for a strategic alliance between CEDC and
Russian Standard Corporation (Russian Standard) might not
conclude at the current terms," says Paolo Leschiutta, a Moody's
Vice President - Senior Credit Officer and lead analyst for CEDC.
===============
P O R T U G A L
===============
* CITY OF LISBON: Fitch Affirms 'BB+/B' LT Currency Ratings
-----------------------------------------------------------
Fitch Ratings has affirmed the City of Lisbon's Long-term foreign
and local currency ratings at 'BB+' and Short-term foreign
currency rating at 'B'. The Outlooks remain Negative.
Lisbon, the capital of Portugal, has a stronger tax base than the
national average, a moderate debt level and comfortable debt
repayment schedule. As the central government collects local
taxes and transfers them to the cities and in common with most
subnationals, Lisbon is not eligible to have a rating higher than
the sovereign. The Negative Outlook reflects that on Portugal's
ratings.
As a consequence of the financial performance of the private
sector, corporate tax fell in 2011, leading to a decline in the
city's current balance to EUR94 million from a comfortable EUR149
million in 2010. Its current margin fell to 18.2%. In 2008, the
city adopted a financial plan with the intention of improving
revenue collection and streamlining operating costs. Since then
the city has been scaling down its provision of services in order
to further reduce costs. The city's organization has also been
simplified, implying a staff reduction.
Debt with financial institutions decreased to EUR401 million from
EUR485 million in 2009 although Lisbon's debt to current balance
deteriorated in 2011 to 4.3 years from 2.8 years in 2010.
Interest costs slightly rose to EUR13.2 million in 2011 or 3.2%
of the debt outstanding at end-2011. The city's debt portfolio
remained conservative, with a long-term repayment profile and no
bullet payments. More than 50% of the debt will be repaid after
10 years.
With just under 548,000 inhabitants in 2011, Lisbon is the
largest city in Portugal. It functions as the administrative and
economic national center and the political capital of Portugal.
* CITY OF PORTO: Fitch Affirms 'BB+/B' Long-Term Currency Ratings
-----------------------------------------------------------------
Fitch Ratings has affirmed the City of Porto's Long-term foreign
and local currency ratings at 'BB+' and Short-term foreign
currency rating at 'B'. The Outlooks remain Negative.
Due to good budgetary performance, a supportive institutional
framework and alternatives in reprogramming capital expenditures,
the city's administration has managed to maintain a moderate debt
level and comfortable debt repayment schedule. As the central
government collects local taxes and transfers them to the cities
and in common with most subnationals, Porto is not eligible to
have a rating higher than the sovereign. The Negative Outlook
reflects that on Portugal's ratings.
Tax revenue has been relatively stable over the past five years,
while current transfers from the central government have shown
some volatility. However, the city's management has adjusted its
operating spending to maintain a comfortable level of current
balance. In 2011 the city's current balance fell to EUR31
million from EUR40 million in 2010, although its current margin
was still at 18.7%. The city has a good track record on
operating margin, which since 2003 had been above 15%. For 2012,
the city has budgeted a EUR36 million current balance, as it has
decided to outsource several services which should generate
concession fees estimated at EUR10 million.
Debt with financial institutions decreased to EUR110 million
although Porto's debt to current balance deteriorated in 2011 to
3.6 years from 2.9 years in 2010. The city has budgeted a
decline in debt of 4.8% for 2012. Interest costs rose slightly to
EUR3.8 million in 2011 or 3.4% of the debt outstanding at end-
2011. The city's debt portfolio remained conservative, with a
long-term repayment profile, and stable amount of principal debt
repayment (between EUR10 million and EUR13 million since 2006).
Porto has been able to gain additional state support due to its
key role in Portugal, which has translated into direct investment
by the state. This has led to an improvement in the city's key
transport infrastructure, including a modern airport and metro.
With just under 238,000 inhabitants in 2011, Porto is the second-
largest economic, administrative and cultural centre in Portugal.
About 500,000 people work in the city.
=========
S P A I N
=========
BANKINTER 3: Moody's Cuts Rating on Class D Notes to 'Caa2'
-----------------------------------------------------------
Moody's Investors Service has downgraded the ratings of seven
classes of notes in BANKINTER 2 PYME, FTA and BANKINTER 3 FTPYME,
FTA, primarily due to insufficient levels of credit enhancement
given increased uncertainties in the current negative economic
environment of Spain and expected performance deterioration. The
two transactions are Spanish small and medium-sized enterprise
asset-backed securities (SME ABS) originated by Bankinter, S.A.
(Ba1/NP). At the same time, Moody's confirmed the ratings of two
classes of notes in BANKINTER 2 PYME, FTA. This rating action
concludes the various downgrade reviews initiated by Moody's
between September 2011 and July 2012 on the various rated
tranches.
Ratings Rationale
"The rating action reflects the low levels of credit enhancement
in both transactions given Moody's negative forecast and severe
downside scenarios for Spanish SME performance, as well as
deteriorating performance in BANKINTER 3 FTPYME, FTA," said
Yuezhen Wang, a Moody's Associate Analyst and lead analyst for
the issuer. "Our decision follows the placement of the ratings on
review because of counterparty risk, our reassessment of the
needed credit enhancement levels in both transactions and worse-
than-expected performance in BANKINTER 3 FTPYME, FTA," adds
Ms. Wang.
-- PERFORMANCE
The two Bankinter SME ABS transactions have generally performed
better than Moody's Spanish SME index in terms of delinquency. As
of September 2012, Moody's Spanish SME 90- to 360-day
delinquencies index stood at 4.6%. This compares to 90- to 360-
day delinquency levels of 2.1% in BANKINTER 2 PYME, FTA and 2.9%
in BANKINTER 3 FTPYME, FTA. In terms of cumulative defaults,
BANKINTER 2 PYME, FTA stood at 1.9% over the original pool
balance in September 2012, while BANKINTER 3 FTPYME, FTA reached
3.1%, thereby underperforming Moody's Spanish SME cumulative
default index of 2.3%.
-- KEY REVISED ASSUMPTIONS: CUMULATIVE DEFAULT, VOLATILITY AND
RECOVERY
For BANKINTER 2 PYME, FTA, Moody's has maintained its default
assumptions at 10% of the current portfolio given the stable
performance and pool characteristics. However, Moody's has
decreased its recovery rate assumptions to a 55% fixed recovery
rate from a 65% stochastic recovery rate. This change reflects
the ongoing and increasing difficulty in liquidating the real
estate collateral of the loans backed by a mortgage guarantee.
Moody's has also increased its volatility assumption to 115% to
reflect the instability and deteriorating situation in Spain.
Despite the revised assumptions, Moody's confirmed the ratings of
the Class A2 and D notes in BANKINTER 2 PYME, FTA as credit
enhancement levels were sufficient to off-set the lower recovery
rate and higher volatility assumptions while class B and C were
downgraded to Baa1 (sf) and Ba3(sf) from A3 (sf) and Ba2 (sf),
respectively.
For BANKINTER 3 FTPYME, FTA, Moody's conducted a detailed
analysis of performance, which has been worse than expected. At
the end of October 2012, 90-day to 18-month delinquencies were
equal to 4.1% of the current pool balance, cumulative 90+ day
delinquencies stood at 9.7% of the original balance, compared to
a current default assumption of 12% over the life of the
transaction. Meanwhile, the pool factor of total securitized
assets was 41% and the reserve fund was drawn. Moody's has
increased the mean default assumption to 15.5% of the current
portfolio, corresponding to an average rating proxy of B1+ for
the portfolio quality with an estimation of remaining weighted-
average life (WAL) of 5.6 years. When converting this number into
a cumulative mean default rate of original balance, the revised
expected cumulative default rate is 16.4%. The pool features an
effective number of 630 borrowers and a 35% exposure to the real
estate sector, while 98% of the loans benefit from a mortgage
guarantee. The recovery rate assumption is now 60% (fixed
recovery rate), compared to the currently assumed 70% stochastic
recovery rate, reflecting ongoing and increasing difficulty in
liquidating the real estate collateral of the loans. Moody's has
also increased volatility to 98%, considering the increased
uncertainties for further performance deterioration in the
current economic cycle.
-- SENSITIVITY ANALYSIS
Moody's analyzed various sensitivities of default rate, recovery
rates and volatility levels to test the robustness of its revised
ratings. In particular, if the revised levels of volatility were
to be increased by a further 10% (to 125% in BANKINTER 2 PYME,
FTA and 108% in BANKINTER 3 FTPYME, FTA, respectively), the
rating of the senior tranche in both deals would remain
unchanged. As such, Moody's analysis encompasses the assessment
of stressed scenarios.
-- COUNTERPARTY RISK
Following the downgrade of Spanish banks, some remedies have been
put in place in order to mitigate the increased counterparty risk
in both transactions. In BANKINTER 2 PYME, FTA, the issuer
account bank is held at Bankinter while a guarantee has been
provided by Credit Agricole Corporate and Investment Bank (A2/P-
1). In BANKINTER 3 FTPYME, FTA, the issuer account bank was
transferred to Barclays Bank PLC (A2/P-1) from Banco Santander
S.A. (Spain) (Baa2/P-2) in July 2012. Besides, Banco Bilbao
Vizcaya Argentaria, S.A. (BBVA, Baa3/P-3) acts as swap
counterparty in both transactions and provides a basis interest
rate swap covering the interest rate risk. Based on the provided
information, BBVA has been posting cash collateral on a weekly
basis.
On August 21, 2012, Moody's released a Request for Comment
seeking market feedback on proposed adjustments to its modelling
assumptions. These adjustments are designed to account for the
impact of rapid and significant country credit deterioration on
structured finance transactions. If the adjusted approach is
implemented as proposed, the rating of the notes affected by the
rating action should not be negatively affected.
LIST OF AFFECTED RATINGS
Issuer: BANKINTER 2 PYME, FTA
EUR682M A2 Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Remained On Review for
Possible Downgrade
EUR16.2M B Notes, Downgraded to Baa1 (sf); previously on Jul
2, 2012 Downgraded to A3 (sf) and Placed Under Review for
Possible Downgrade
EUR27.5M C Notes, Downgraded to Ba3 (sf); previously on Jul
2, 2012 Ba2 (sf) Placed Under Review for Possible Downgrade
EUR10.7M D Notes, Confirmed at Caa2 (sf); previously on Jul
2, 2012 Caa2 (sf) Placed Under Review for Possible Downgrade
Issuer: BANKINTER 3 FTPYME, Fondo de Titulizacion de Activos
EUR288.9M A2 Notes, Downgraded to Baa1 (sf); previously on
Jul 2, 2012 Downgraded to A3 (sf) and Remained On Review for
Possible Downgrade
EUR91.2M A3 (G) Notes, Downgraded to Baa1 (sf); previously on
Jul 2, 2012 Downgraded to A3 (sf) and Remained On Review for
Possible Downgrade
EUR23.1M B Notes, Downgraded to Ba3 (sf); previously on Sep
22, 2011 Baa3 (sf) Placed Under Review for Possible Downgrade
EUR6M C Notes, Downgraded to B2 (sf); previously on Sep 22,
2011 Ba2 (sf) Placed Under Review for Possible Downgrade
EUR10.8M D Notes, Downgraded to Caa2 (sf); previously on Sep
22, 2011 B3 (sf) Placed Under Review for Possible Downgrade
Principal Methodologies
The methodologies used in these ratings were "Moody's Approach to
Rating CDOs of SMEs in Europe", published in February 2007,
"Refining the ABS SME Approach: Moody's Probability of Default
assumptions in the rating analysis of granular Small and Mid-
sized Enterprise portfolios in EMEA", published in March 2009,
and "Moody's Approach to Rating Granular SME Transactions in
Europe, Middle East and Africa", published in June 2007.
Moody's used its excel-based cash flow model, Moody's ABSROM(TM),
as part of its quantitative analysis of the transaction. Moody's
ABSROM(TM) model enables users to model various features of a
standard European ABS transaction including: (1) the specifics of
the default distribution of the assets, their portfolio
amortization profile, yield or recoveries; and (2) the specific
priority of payments, triggers, swaps and reserve funds on the
liability side of the ABS structure. Moody's ABSROM(TM) User
Guide is available on Moody's website and covers the model's
functionality, as well as providing a comprehensive index of the
user inputs and outputs.
===========
S W E D E N
===========
SAS AB: Three Government Owner States Defend Rescue Package
-----------------------------------------------------------
David Kaminski-Morrow at Flightglobal reports that SAS Group's
three government owner states believe their proposed
participation in the company's restructuring is based on market
terms, and that their assistance will help lead to the sale of
national shareholdings in the airline company.
The governments have submitted these views to their respective
parliaments as part of a formal request for approval to support a
new credit facility, Flightglobal relates.
According to Flightglobal, both Norway and Denmark, as 14.3%
owners of SAS, intend to contribute the equivalent of SEK500
million (US$75 million) to the SEK3.5 billion credit facility
while Sweden, with a 21.4% share, will provide SEK749 million.
Flightglobal notes that while the European Commission has not
given a formal prior assessment of the funding, it has been
briefed on the plan through informal contact.
Norway's government, in its proposal to parliament, feels a
private investor would have "acted in a similar way" towards SAS
and that it believes the state's participation in the facility
"is in line" with the market investor principle and "therefore
does not constitute state aid", Flightglobal discloses. But it
says the Commission could yet look more closely at the scheme to
examine whether the intended participation amounts to illegal
government support, Flightglobal. According to Flightglobal, It
points out that contributing to the credit facility, enabling SAS
Group to carry out its new restructuring plan, will probably make
the company "more attractive to strategic partners".
The Danish finance ministry says there is no requirement for the
European Commission to clear the planned investment in SAS Group,
because it believes the injection is "justified", Flightglobal
notes.
SAS has struggled financially since around 2001, recounts.
Increasing fuel expenditure and high salary costs have conflicted
with the pressure of low-cost carrier competition and falling
fares, all set against a poor economic trend, Flightglobal
discloses.
Flightglobal notes that while the company has attempted to cope
through various cost-cutting measures since 2003, it has only
been briefly profitable in that time, and has been posting losses
since 2008.
The Swedish government echoes the Norwegian view that the new
business plan will make SAS more interesting to potential buyers,
increasing the potential for Sweden to "eventually reduce state
ownership", Flightglobal relates.
SAS AB -- http://www.sasgroup.net/-- is a Sweden-based company,
engaged in the air transport services. It is a parent company
within SAS Group, which operates within two business areas. The
Core SAS segment encompasses airline services in the Nordic
countries, as well as intercontinental flights through SAS
Scandinavian Airlines, as well regional airlines in Norway
through Wideroe and in Finland through Blue1. The SAS Individual
Holdings segment comprises operations of Estonian Air, bmi, All
Cargo, Skyways, Air Greenland, Spirit and Trust. SAS AB's fleet
encompasses ten planes. In addition, the Company offers ground
handling services and technical maintenance for the aircraft, as
well as air freight solutions and cargo capacity on passenger
aircraft, purely cargo aircraft and cargo handling. The Group is
also involved in the trainings within the technical aviation
field.
* SWEDEN: Moody's Changes Banking System Outlook to Stable
----------------------------------------------------------
The outlook for Sweden's banking system has been changed to
stable from negative, says Moody's Investors Service in a new
Banking System Outlook published on Nov. 26. The stable outlook
primarily reflects Moody's expectations that over the next 12-18
months (1) asset quality will be strong overall; (2)
strengthening capital levels will provide a good buffer against
modest asset-quality deterioration; and (3) continued moderate
lending growth and low provisioning levels will continue to
support profitability.
The new report is entitled "Banking System Outlook: Sweden".
While Sweden's relatively open economy is not fully immune to the
ongoing downturn in the European economy, Moody's says that the
Swedish economy has out-performed most euro area economies,
partly insulating Swedish banks from the ongoing euro area debt
crisis. Moody's estimates that GDP growth in Sweden will be
slower in 2012-13 but at stronger rates than those seen across
the rest of Europe -- which is unlikely to materially impair the
banks' asset quality and profitability metrics.
A key driver of the change in outlook to stable is that Moody's
expects that asset quality will continue to be one of the main
credit strengths of Swedish banks. Problem loan levels remain
well below those of other systems and Moody's expects loan-
repayment capabilities will continue to be supported by low
interest rates and households' resilient financial profiles.
Moody's expects that this will continue to support banks' asset
quality over the outlook period. However, Moody's recognizes that
corporate exposures are somewhat more exposed to non-Swedish
economic performance and the commercial real estate sector is
sensitive to economic cycles, which may introduce some negative
pressure on asset quality.
Against this backdrop, Moody's views Swedish banks' current
capital levels as adequate. In addition, the rating agency
believes that further capital improvements will occur following
the regulator's requirement for higher capital ratios for the
four largest banks, ahead of Basel III. Swedish banks' earnings
are primarily driven by net interest income which, while subject
to pressure on margins, continues to provide a stable source of
income. In addition, bottom-line profitability has been bolstered
by the banks' strong historic asset-quality performance.
However, Swedish financial institutions are reliant on market
funding and Moody's says that this reliance continues to
represent a key system vulnerability. The banks' market funding
is partly through the covered bond markets, which Moody's views
as more stable than other forms of wholesale funding. However,
the banks' high reliance on market funding renders them
vulnerable to swings in investor and market sentiment and is thus
a material source of credit risk. In particular, in times of
market stress, this funding can become more expensive -- thereby
exerting pressure on the banks' net profitability -- and
restricted.
=====================
S W I T Z E R L A N D
=====================
PETROPLUS HOLDINGS: Shell to End Tolling Accord at Petit-Curronne
-----------------------------------------------------------------
Tara Patel at Bloomberg News reports that unions said Royal Dutch
Shell Plc will end a so-called tolling accord on processing fuel
at Petroplus HoldingsAG's Petit-Couronne site in Normandy next
month.
According to Bloomberg, unions including the Confederation
Generale du Travail said in a joint statement that the refinery
will be halted by about Dec. 15 as a result.
Bloomberg relates that a court in Rouen this month delayed a
deadline for offers for Petit-Couronne to Feb. 5 and will hold a
hearing on operations at the 154,000-barrel-a-day refinery on
Dec. 4.
The facility went into administration after Petroplus filed for
insolvency in January, becoming the fourth French plant to be
suspended in two years as European refining profits dwindled,
Bloomberg recounts.
Industry Minister Arnaud Montebourg petitioned the court to delay
a ruling as he sought to study interest from Libya, saying on RTL
radio he'd been contacted by its sovereign wealth fund, Bloomberg
discloses.
Domitille Fafin, a Shell spokeswoman in Paris, affirmed on Monday
that the Rouen court would rule on the processing accord on
Dec. 4, Bloomberg notes.
About Petroplus
Based in Zug, Switzerland, Petroplus Holdings AG is one of
Europe's largest independent oil refiners.
Petroplus was forced to file for insolvency in late January after
struggling for months with weak demand due to the economic
slowdown in Europe and overcapacity amid tighter credit
conditions, high crude prices and competition from Asia and the
Middle East, MarketWatch said in a March 28 report.
According to MarketWatch, Petroplus said in March a local court
granted "ordinary composition proceedings" for a period of six
months. As part of the court process, Petroplus intends to sell
its assets to repay its creditors.
Some of Petroplus' units in countries other than Switzerland have
filed for "different types of proceedings" and are currently
controlled by court-appointed administrators or liquidators,
which started the process to sell assets, including the company's
refineries.
=============
U K R A I N E
=============
* CITY OF KYIV: S&P Affirms 'B-' Long-Term Issuer Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' long-term
issuer credit rating on the Ukrainian capital city of Kyiv and
removed it from CreditWatch, where it had been placed with
negative implications on Oct. 29, 2012. The outlook is stable.
"The CreditWatch placement reflected our concerns about Kyiv's
slow progress in refinancing a US$250 million U.S. dollar-
denominated loan participation note (LPN) due on Nov. 26, 2012,"
S&P said.
"On Nov. 23, 2012, Kyiv finally placed Ukrainian hryvnia (UAH) 2
billion out of the UAH3 billion (US$245 million) domestic bond
with state banks largely providing the funds. In our view the
amount raised is sufficient to secure payments to LPN holders on
Nov 26, 2012," S&P said.
"The rating on Kyiv continues to reflect Ukraine's 'volatile and
underfunded' institutional framework, which constrains the city's
financial flexibility. It also reflects Kyiv's high debt service,
'very negative' liquidity, and material debt burden, with
associated foreign-exchange risks. However, Kyiv's importance as
the administrative and economic center of Ukraine (B+/Negative/B;
Ukraine national scale 'uaA+') and the city's fairly diversified
economy, with wealth exceeding the national average severalfold,
support the rating," S&P said.
"The stable outlook reflects our expectation that, despite
turbulent capital market conditions and a very weak cash
position, Kyiv will be able to arrange the refinancing for
maturing debts when necessary, as confirmed by its positive
refinancing track record. The outlook also factors in our
expectations of a continued recovery of Kyiv's operating
financial performance through 2013, supported by a recovering
economy and continued operating support from the sovereign, which
should allow the city to avoid further debt accumulation," S&P
said.
"Positive rating actions would hinge on stronger budgetary
performance, with operating surpluses approaching 7%-8% in 2012-
2013 or improved terms of borrowing or refinancing that resulted
in stronger self-financing capacity and a lower debt burden. The
continuing reduction of the payables of Kyiv's related entities,
which would lead to lower contingent risk, would also support
ratings upside," S&P said.
"We could take a negative rating action if the city's operating
performance dipped into the red, which would put Kyiv's capacity
for interest payments under pressure, especially if state support
weakened. These factors would most likely also change our
assessment of the city's quality of financial management," S&P
said.
===========================
U N I T E D K I N G D O M
===========================
AERTE GROUP: Files Notice to Appoint Administrators
---------------------------------------------------
Aerte Group PLC on Nov. 26 disclosed that the Board, having been
unable to secure additional funding for the Company, has
concluded that the Group is no longer able to continue trading as
a going concern and has filed notice of intention to appoint
administrators.
In accordance with statutory requirements, the Notice of
intention to appoint administrators will expire five business
days after Nov. 26 following which an appointment of
administrators can take place within a further five business days
thereafter if the financial status of the company has not
changed.
The board announced on November 15, 2012, that it had been in
active discussions with prospective funders regarding the
provision of additional finance to the Group. Despite its
efforts to explore the available options, discussions had
unexpectedly ended unsuccessfully with two parties which it was
hoped would provide further funding.
The board has continued to pursue other potential opportunities
to secure the on-going trade of the business and recover value
from the Group's assets, but as a funding solution has not been
forthcoming the board has regrettably concluded the Group will be
unable to continue trading as a going concern.
Despite the problems experienced earlier in the year with the
manufacturing of its new products and the refusal in September of
the potential Chinese distributor to pay for the 3,200 devices,
manufactured and delivered by a member of their group, the
Group's new range of air disinfection products have been
continuing to generate interest. As well as internationally,
there have been initial discussions with major distributors in
the UK retail market from whom small though commercial initial
orders have started to be received and fulfilled such that the
devices have been on retail sale.
The Board remains hopeful that the uniqueness and proven efficacy
of the air disinfection technology and its new products can still
provide the platform for a successful business in the future.
The details of the prospective administrators will be announced
in due course.
Aerte Group PLC is an environmental technology group.
CELTIC SPRINGS: NHS Wales to Provide Care for Welsh Patients
------------------------------------------------------------
HealthInvestor reports that NHS Wales has agreed to provide
ongoing care for the Welsh patients of the Palm Ventures-backed
Celtic Springs Clinic, which went bust in October.
"Since our appointment, we have been working with a number of
specialist healthcare providers and institutions and I am pleased
to report that the NHS in Wales has now agreed to take
responsibility for the ongoing care of the patients resident in
Wales," HealthInvestor quotes BM Advisory's Andrew Pear, joint
administrator for the clinic with colleague Michael Solomons, as
saying. "This includes, where possible, enabling the balloons to
remain in place for the full term so that patients can gain the
maximum benefit from the service they have paid for."
The administrators are still in talks with the NHS regarding the
ongoing care of patients based in England, HealthInvestor
discloses.
Celtic Springs Clinic was closed on October 25 and all 25 staff
made redundant, just five months after its acquisition by US
investment fund Palm Ventures, HealthInvestor recounts.
Celtic Springs Clinic, formerly known as Nucleus Healthcare, was
a specialist gastroenterology center.
ENTERPRISE INNS: Focuses on Paying Off Debt; Pre-Tax Profit Down
----------------------------------------------------------------
Roger Blitz at The Financial Times reports that Ted Tuppen,
Enterprise Inns' group chief executive, suggested selling more
beer is not as relevant to the financial health of the company as
paying off its debt.
Mr. Tuppen said the company faced a period of "flat calm" during
which the focus of the tenanted pub group had to continue to be
on its long-term financing structure, the FT relates.
Mr. Tuppen, as cited by the FT, said there was "a sentimental
importance" attached to like-for-like sales, but added that they
were relatively immaterial. "Compared to the impact of paying
off debt, "being 1% up or down is a bit at the margins", the FT
quotes Mr. Tuppen as saying.
Net debt continues to be the biggest challenge for the group,
which has 5,900 pubs on its estate, the FT discloses. But its
cash generation helped to reduce net debt by GBP266 million to
GBP2.7 billion, the FT notes.
Pre-tax profit fell from GBP157 million last year to GBP137
million, and like-for-like net income was down 1.1%, compared to
a fall of 4.3% in 2011, the FT discloses.
Revenues were GBP692 million compared to GBP711 million the
previous year, the FT notes.
Enterprise disposed of 301 pubs, raising GBP208 million, in the
period, the FT says. According to the FT, the company said 199
of these pubs were unsustainable. It said it would pare down the
size of its estate to 5,200 over the next three years and spend
GBP180 million on improving the estate's quality, the FT relates.
Enterprise Inns plc -- http://www.enterpriseinns.com/-- is a
leased and tenanted pub operator in the United Kingdom.
* * *
As reported by the Troubled Company Reporter-Europe on Dec. 07,
2011, Moody's Investors Service downgraded Enterprise Inns plc
Corporate Family Rating (CFR) to B3 from B2, the Probability of
Default Rating (PDR) to Caa1 from B3 and the instrument rating of
its GBP275 million senior secured fixed-rate notes due 2031 to B2
from Ba3. The CFR is assigned to the unconsolidated parent
company. Moody's said the rating outlook remained negative.
* UK: Moody's Says Non-Acceptance of License Changes Credit Neg.
----------------------------------------------------------------
Moody's Investors Service understands that a majority of the
incumbent water companies in England and Wales have declined to
accept, in their current form, proposals by the Water Services
Regulation Authority, Ofwat -- the economic regulator for water
companies in England and Wales, to modify companies' licenses. If
implemented, the proposals would provide the regulator with
flexibility to move activities accounting for up to 40% of
companies' total revenues outside of the established price
control framework. The non-acceptance, together with the
possibility of the regulator now referring the matter to the
Competition Commission (CC), sustains uncertainty which is credit
negative.
Ofwat's proposals were made in the context of its continuing
review of the way in which it will set future price limits and
the draft Water Bill published in July 2012. Proposed license
amendments would allow the regulator to implement changes that it
is planning from the start of the next regulatory period,
beginning in April 2015, with segmental price controls and
targeted incentives to achieve, according to Ofwat, better
outcomes including retail choice for business, better allocation
of treated water resources and different approaches to sludge
treatment.
Following consultation with companies and other stakeholders,
Ofwat has committed to maintain wholesale price controls linked
to the Retail Price Index (RPI), to allocate companies'
Regulatory Capital Value (RCV) to the wholesale function and to
continue to calculate an RPI based return on the RCV as the main
cost recovery mechanism for the monopoly network activities. The
regulator has also highlighted the important regulatory
safeguards that will continue to apply, including its duty to
finance functions for the entire business as a whole, companies'
ability to appeal any price control and a commitment to no
changes for the natural monopoly.
Companies' non-acceptance of the license amendments, as drafted
by Ofwat, is related to the future flexibility the regulator is
seeking. Ofwat considers it important that the services and
activities covered by the proposed wholesale controls can be
adjusted over time, so that it can create the right incentives
and adjust the framework as appropriate. To provide this
flexibility, the regulator has proposed that in any price control
it would be able to move activities accounting for up to 20% of
total revenue outside of the wholesale price control. There would
also, it is proposed, be a further cumulative cap on activities
moved outside of the wholesale business set at 40% of total
revenue.
Ofwat indicated in October that if companies did not accept its
proposals then it would likely refer the matter to the CC.
Moody's notes, however, that Ofwat also said in a note published
on 21 November that it would welcome responses that set out
companies concerns and how they might be addressed; this together
with company responses may open the door to a further period of
discussion between the companies and regulator. Both sides will
be keen to avoid a time consuming and costly CC referral if at
all possible.
Moody's has previously said that it would not ordinarily view a
CC referral as credit negative; the Commission is an integral
part of the regulatory framework in the UK and an important risk
mitigant. However, a referral would sustain current uncertainty
and the perception of increased regulatory risk in the sector and
that is credit negative.
===============
X X X X X X X X
===============
* Moody's Says EMEA CMBS Defaults to Rise in Fourth Qtr. 2012
-------------------------------------------------------------
The refinancing wall for EMEA CMBS, which began in 2012, will
reach its peak in 2013 when 135 loans with a current securitized
balance of EUR16.1 billion will need to be refinanced, says
Moody's Investors Service in a Sector Comment report published on
Nov. 26. As a result, Moody's expects that more maturing EMEA
CMBS loans will default in Q4 2012 as the refinancing wall
approaches.
The new report is entitled "EMEA CMBS: Q3 2012 Loan Maturities
Update: More Maturing Loans Will Default in Q4 2012".
"The combination of tight lending conditions, weak macro-economic
outlooks and the predominance of secondary quality collateral
assets will result in a repayment rate below 50% through 2013,"
says Andrea Daniels, a Moody's Senior Vice President -- Manager
and author of the report.
In Moody's view, lending conditions have deteriorated over the
past few years, with the repayment rate for the first nine months
of 2012 standing at 35% compared to the 65% level last seen in
2009. The Q3 2012 repayment rate was 50%, however, with 20 loans
fully prepaying or repaying and thus significantly better than H1
2012.
Moody's notes that a key determining factor for whether or not
maturing loans are refinanced is the loan to value ratio (LTV).
Based on Moody's values, nearly 93% of loans with a Moody's LTV
greater than 80% defaulted at maturity in the third quarter. The
rating agency projected a Medium High or High default probability
(DP) for all loans that defaulted at maturity.
The Moody's debt yield is also relevant in predicting the outcome
for third quarter loan maturities: 6.8% for defaulted compared to
8.7% for repaid at maturity.
*********
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
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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 * * *