/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/131204.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, December 4, 2013, Vol. 14, No. 240 Headlines G E R M A N Y NURBURGRING AUTO: ADAC Offer to Buy Circuit Rejected WIESMANN: Files Application to Dismiss Insolvency Proceedings G R E E C E HELLENIC TELECOMMUNICATIONS: S&P Raises Corp Credit Rating to BB- I R E L A N D ALLIED IRISH: Raises EUR500 Million in Term Funding ANGLO IRISH: Gets More Than 30 Bids for Two Loan Portfolios BANK OF IRELAND: Needs to Set Aside Extra Loan Loss Provisions NEWBRIDGE CREDIT: Was "Within A Week" of Liquidation I T A L Y RIFLE: Italian Jeanswear Firm Goes Into Liquidation N E T H E R L A N D S AEG POWER: S&P Puts 'CC' Corp. Credit Rating on Watch Negative R U S S I A BANK SOYUZ: S&P Revises Outlook to Positive & Affirms 'B' Rating S P A I N PYMES SANTANDER 3: S&P Lowers Rating on Class C Notes to 'D' SPAIN: S&P Revises Outlook on Five Financial Groups S W I T Z E R L A N D CREDIT SUISSE: S&P Rates New Tier 1 Capital Notes 'BB-' U N I T E D K I N G D O M ALBEMARLE & BOND: Opts to Put Business Up for Sale DEVILFISH CREATIVE: Performers Left Out of Pocket HEARTS OF MIDLOTHIAN: Bob Jamieson's Actions May Ruin Rescue Bid IFA BERKELEY: Placed in Compulsory Liquidation ILFORD IMAGING: Declares Insolvency as Investor Backs Out ROYAL BANK: Forced SMEs to Default, Report Says UK: PRA Eases Tough Capital Demands for Bank-Specific Risks X X X X X X X X * European Union Threatens Action Against Big Three Ratings Firms ********* ============= G E R M A N Y ============= NURBURGRING AUTO: ADAC Offer to Buy Circuit Rejected ---------------------------------------------------- motorsport.com reports that the German automobile club ADAC is no longer in the running to buy the embattled Nurburgring. 2013 race promoter ADAC, the Allgemeiner Deutscher Automobil- Club, had submitted a non-binding offer to buy the fabled but insolvent circuit, motorsport.com recalls. But Speed Week reported that ADAC's offer was only for the circuit, not the theme park and connected commercial area, which would be demolished, according to motorsport.com. "That's right," ADAC chief Peter Meyer told Bild newspaper. "We have not been approved for the next step of the bidding process. We were told only that our offer was considered too low," Bild newspaper quotes Mr. Meyer as saying, motorsport.com reports. motorsport.com relates that Speed Week said ADAC's offer was for a "double-digit million (Euro) sum." As reported in the Troubled Company Reporter-Europe on July 20, 2012, Spiegel Online said The Nurburgring was facing bankruptcy because its private operating company, Nurburgring GmbH, is no longer able to pay the interest on a EUR330 million loan it was provided by the ISB investment and structural bank, which belongs to the state of Rhineland-Palatinate. The company also hasn't been able to cover its lease payments, according to Spiegel Online. A report in the Rhein-Zeitung newspaper stated that the operating company has debts of EUR413 million, including the ISB loan and EUR83 million in other outstanding loans, Spiegel Online disclosed. If the track were to be sold, it could come at a loss of several hundred million euros for taxpayers, Spiegel Online noted. The Nurburgring has been the main venue for the German Grand Prix since World War II but has shared duties with Hockenheim since 2009. The race track is owned by the German government, with the private operator, Nurburgring GmbH, responsible for the day-to- day running. WIESMANN: Files Application to Dismiss Insolvency Proceedings ------------------------------------------------------------- Carscoops reports that Wiesmann said in a statement on its Web site that the company has requested the court to end the bankruptcy procedure. "The management board of the Wiesmann corporation has filed the application to dismiss the insolvency proceedings due to abolition of the insolvency reasons. The creditors' meeting is postponed to December 16, 2013," Carscoops quotes the statement as saying. Wiesmann didn't indicate the reasons for the change, but the important thing is the company will come up with a plan for the future together with its creditors later this month and will hopefully continue to offer BMW-powered sports cars, Carscoops notes. In August this year, the carmaker filed for insolvency at a local court in Muenster and went under the protection of an administrator, Carscoops recounts. Wiesmann is the German manufacturer of retro-styled sports cars. =========== G R E E C E =========== HELLENIC TELECOMMUNICATIONS: S&P Raises Corp Credit Rating to BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised to 'BB-' from 'B+' its long-term corporate credit rating on Greek integrated telecommunications operator Hellenic Telecommunications Organization S.A. (OTE). At the same time, S&P affirmed its 'B' short-term corporate credit rating on OTE. The outlook is stable. In addition, S&P raised to 'BB-' from 'B+' its issue ratings on the debt issued by OTE's wholly owned financing vehicle OTE PLC. Finally, S&P removed the corporate credit and issue ratings from CreditWatch, where S&P placed them with positive implications on Nov. 26, 2013, in conjunction with its criteria redesign. "We base our upgrades primarily on our assessment that OTE is unlikely to default in a hypothetical stress scenario that would likely accompany a sovereign default of Greece, primarily due to the company's currently very solid balance sheet, including large cash deposits at foreign banks. In addition, we expect OTE to be able to generate meaningful free operating cash flow despite continued revenue declines, primarily due to the company's strong track record of cost cutting. In such a stress scenario, we also believe that OTE would be able to maintain "adequate" liquidity," S&P said. OTE is nonetheless subject to pricing restrictions from the Greek regulator and generates moderate revenues from the Greek government. In addition, although S&P currently assess the likelihood of an exit of Greece from the eurozone (European Economic and Monetary Union) as low, an increase in S&P's assessment of this likelihood toward 33% or above would cause S&P to cap the long-term corporate credit rating on OTE at 'B'. As a result, S&P assess that a rating cap of three notches above the sovereign credit rating on Greece (B-/Stable/B) is currently warranted. "We assess OTE's business risk profile as "fair." This primarily incorporates our view of the telecoms and cable industry's "intermediate" risk, and "high" country risk for Greece, where OTE generates about 80% of its revenues. Our assessment of business risk also reflects the adverse regulation and fierce competition that OTE is facing in Greece. This is partly offset by OTE's leading market positions for mobile and fixed-line services and our belief that the company will continue to undertake cost-cutting measures that will support its operating margins despite declining revenues," S&P added. S&P assess OTE's financial risk profile as "intermediate." This is primarily based on S&P's view that the company will continue to deleverage using free cash flow and maintain a solid balance sheet in light of "high" country risk in Greece and uncertainty over OTE's access to the capital markets. In S&P's view, OTE will maintain "adequate" liquidity and generate free operating cash flow of about EUR0.4 billion annually in 2013 and 2014. Despite the still-weak economic environment in Greece, S&P forecasts lower revenue declines from 2014 onward, primarily due to reduced regulatory pressure on prices. Furthermore, S&P believes that OTE is able to maintain its current EBITDA margins thanks to its continued cost cutting. Rating upside could arise if we raise our sovereign rating on Greece and if, at the same time, OTE's liquidity remains at least "adequate." In addition, S&P could raise the ratings if it believed that DT's commitment to OTE had strengthened. Stronger support could take the form of a substantial increase in DT's stake in OTE or other explicit forms of financial support. S&P currently sees limited ratings downside. S&P could lower the ratings, however, if its assessment of OTE's free operating cash flow generation prospects or liquidity weakens. Furthermore, S&P could lower the ratings, potentially by multiple notches, if it assess that the likelihood of Greece's exit from the eurozone has increased toward 33% or higher. ============= I R E L A N D ============= ALLIED IRISH: Raises EUR500 Million in Term Funding --------------------------------------------------- Allied Irish Banks, p.l.c., has agreed a EUR500 million two-year floating rate bilateral term funding transaction through BofA Merrill Lynch and Deutsche Bank, secured by a high quality portfolio of Irish credit card receivables. This is the first transaction of its kind for an Irish Bank and establishes a structure which is expected to provide a stable source of cost effective funding into the future. It is consistent with AIB's stated strategy to engage with the market in a balanced and measured manner with a series of well placed, appropriately structured and priced transactions. Fergus Murphy, director of Products at AIB, said, "This transaction is another step in diversifying AIB's funding base and will further reduce AIB's reliance on monetary authority funding." The transaction has no impact on AIB's credit card customers. About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. Allied Irish's balance sheet at June 30, 2012, showed EUR129.85 billion in total assets, EUR116.59 billion in total liabilities and EUR13.26 billion in total shareholders' equity. ANGLO IRISH: Gets More Than 30 Bids for Two Loan Portfolios ----------------------------------------------------------- Peter Flanagan at Independent.ie reports that more than 30 bids have been submitted for two commercial property loan portfolios from the former Anglo Irish Bank, as demand for the loan books hots up. According to Independent.ie, a slew of international bidders, including some of the top US funds who specialize in buying so-called distressed debt are believed to have made first round bids for the loan books, known as Project Rock and Project Salt. Project Rock is worth about EUR7.8 billion in total, but a little over EUR2 billion worth of those loans -- mostly UK commercial real estate -- are up to date and are expected to be refinanced by the borrower, Independent.ie discloses. That leaves more than EUR5.5 billion worth of loans that are in arrears, Independent.ie notes. Project Salt, meanwhile, is made up mostly of Irish commercial property loans, with close to EUR2 billion worth of lending that is now in arrears, Independent.ie says. IBRC's special liquidators -- KPMG's Kieran Wallace and Eamonn Richardson -- are believed to have sought bids for the entire portfolios, a single tranche, or any combination of multiple tranches, Independent.ie states. According to Independent.ie, the loans were valued by KPMG when the liquidation process began, and Finance Minister Michael Noonan has barred the Project Rock and three other portfolios from being sold at a discount to the valuation. That has sparked concern that the market for IBRC's loan books may be tighter than had been expected, with potential investors warning about the "rigid" nature of the sale process, Independent.ie says. The special liquidators, however, have repeatedly said they were "not unhappy" with the scale of interest they had seen in the IBRC portfolio, Independent.ie relates. About Anglo Irish Anglo Irish Bank was an Irish bank headquartered in Dublin from 1964 to 2011. It went into wind-down mode after nationalization in 2009. In July 2011, Anglo Irish merged with the Irish Nationwide Building Society, with the new company being named the Irish Bank Resolution Corporation (IBRC). Standard & Poor's Ratings Services said that it lowered its long- and short-term counterparty credit ratings on Irish Bank Resolution Corp. Ltd. (IBRC) to 'D/D' from 'B-/C'. S&P also lowered the senior unsecured ratings to 'D' from 'B-'. S&P then withdrew the counterparty credit ratings, the senior unsecured ratings, and the preferred stock ratings on IBRC. At the same time, S&P affirmed its 'BBB+' issue rating on three government- guaranteed debt issues. The rating actions follow the Feb. 6, 2013, announcement that the Irish government has liquidated IBRC. The former Irish bank sought protection from creditors under Chapter 15 of the U.S. Bankruptcy Code on Aug. 26, 2013 (Bankr. D. Del., Case No. 13-12159). The former bank's Foreign Representatives are Kieran Wallace and Eamonn Richardson. Its U.S. bankruptcy counsel are Mark D. Collins, Esq., and Jason M. Madron, Esq., at RICHARDS, LAYTON & FINGER, P.A., in Wilmington, Delaware. BANK OF IRELAND: Needs to Set Aside Extra Loan Loss Provisions -------------------------------------------------------------- Ciara Kenny at The Irish Times reports that Bank of Ireland's capital adequacy ratios have suffered a sharper than expected drop after the Central Bank of Ireland said following an industrywide review that the Bank of Ireland needed to make extra loan loss provisions. According to The Irish Times, the health checks, carried out just before Ireland exits its EU/IMF bailout, are seen as a preview for the European Central Bank's (ECB) own tests of euro zone banks next year, when capital holes running to 10s of billions of euros are expected to be uncovered. Bank of Ireland, as cited by The Irish Times, said it was not required to raise additional capital after the central bank review and said it was in talks with the Central Bank about its estimates. "The outcome of this engagement cannot be anticipated with certainty and actions taken following engagement with the Central Bank of Ireland may adversely impact capital ratios," The Irish Times quotes Bank of Ireland as saying in a statement. Under the review, the bank's Core Tier 1 capital adequacy ratio fell to 9.85% of risk-adjusted assets from 13.8% as of June 30, calculated on the basis of a gradual introduction of tougher global capital rules, The Irish Times discloses. Bank of Ireland, as cited by The Irish Times, said it expected to maintain a Core Tier 1 capital ratio above 10% on that basis. According to The Irish Times, in a note, Citi said it believed Bank of Ireland had a significant capital shortfall relative to its UK and European peers and reiterated its sell rating. In its review, the Central Bank estimated that Bank of Ireland needed to set aside an extra EUR360 million to cover potential loan losses on Irish mortgages, an additional EUR486 million to cover potential losses on business loans and EUR547 million on defaulted loans, The Irish Times discloses. The central bank also increased Bank of Ireland's risk-weighted assets, usually loans adjusted for the likelihood of non-payment, by EUR6.8 billion, The Irish Times notes. Bank of Ireland said last week that it may raise new equity to help repay EUR1.8 billion of state-owned preference shares the bank had to issue as part of its 2009 bailout, The Irish Times recounts. According to The Irish Times, a source familiar with the deal told Reuters it will raise between EUR500 and EUR600 million of equity as early as this week and the rest by issuing debt to private investors. Headquartered in Dublin, Bank of Ireland -- http://www.bankofireland.com/-- provides a range of banking and other financial services. These include checking and deposit services, overdrafts, term loans, mortgages, business and corporate lending, international asset financing, leasing, installment credit, debt factoring, foreign exchange facilities, interest and exchange rate hedging instruments, executor, trustee, life assurance and pension and investment fund management, fund administration and custodial services and financial advisory services, including mergers and acquisitions and underwriting. The Company organizes its businesses into Retail Republic of Ireland, Bank of Ireland Life, Capital Markets, UK Financial Services and Group Centre. It has operations throughout Ireland, the United Kingdom, Europe and the United States. NEWBRIDGE CREDIT: Was "Within A Week" of Liquidation ---------------------------------------------------- Fionnan Sheahan at Irish Independent reports that Newbridge Credit Union was "within a week" of going bust, Finance Minister Michael Noonan has revealed. "It went within a week of being forced into liquidation," the report quotes Mr. Noonan as saying. The credit union was taken over by Permanent TSB last month, following a court application by the Central Bank. Irish Independent relates that Mr. Noonan said the Irish Government's preferred option was to merge Newbridge with Naas Credit Union, but this was rejected. He said the Central Bank's action was necessary. Newbridge Credit Union is a community based, non-profit making financial co-operative. ========= I T A L Y ========= RIFLE: Italian Jeanswear Firm Goes Into Liquidation --------------------------------------------------- Maria Cristina Pavarini at sportswearnet.com reports that historical Italian jeanswear company Rifle has gone into liquidation. The company registered EUR7 million losses in 2012 and expects EUR4 million losses in 2013. Antonio Arcaro, who is involved in rescuing other brands in the market, has started a restructuring phase to save the company, the report says. According to local newspapers the restructuring will continue, sportswearnet.com reports. "The liquidation phase will bring about heavy restructuring, but the activity of the company will continue," sportswearnet.com quotes the company's manager Simone Anichini as saying. sportswearnet.com relates that the restructuring plan is yet to be defined and will include a cutting of jobs as well as of a change in management following the arrival of Mr. Arcaro. A new strategy and the creation of a new company is expected to start with the beginning of 2014, together with an overall new project that -- according to a source within the company -- could be announced within the upcoming edition of Pitti Uomo, adds sportswearnet.com. Rifle is one of the oldest Italian jeans brands. It was founded in 1958 by brothers Giulio and Fiorenzo Fratini who initially started importing jeans from the US, and then started producing them directly. In 1968, they were the first company to export them to Eastern Europe. The company presently employs 192 people. ===================== N E T H E R L A N D S ===================== AEG POWER: S&P Puts 'CC' Corp. Credit Rating on Watch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch with negative implications its 'CC' long-term corporate credit rating on Netherlands-based AEG Power Solutions B.V. The CreditWatch placement reflects S&P's view that there is a high risk that 3W Power, the parent holding company of AEG Power Solutions, will not make the coupon payment on its EUR100 million notes, maturing in 2015, within the 30 days following the coupon's Dec. 1, 2013 due date. 3W Power has suspended its decision to pay the 9.25% coupon until after a second noteholder meeting, which the company plans to hold on Dec. 18, 2013. This date is within the 30-day grace period allowed by the bond documentation for remedying the non-payment. According to S&P's criteria, if the interest on the notes is not paid before this period expires, this would constitute an event of default. If, as a result of the second noteholder meeting, the coupon payment is deferred and/or a financial restructuring is consummated, S&P would lower the rating on AEG Power Solutions to 'SD' (Selective Default). S&P aims to resolve the CreditWatch shortly after the second noteholder meeting on Dec. 18, 2013 and within the 30-day grace period after the coupon due date. S&P could affirm the rating at 'CC' if the company makes the required coupon payment before Dec. 30, 2013. Nevertheless, the ratings would remain constrained by the announced review of AEG Power Solutions' capital structure and the associated high risk of a distressed exchange offer, which S&P would view as a default under its criteria. S&P will lower the corporate credit to 'D' (Default) if 3W Power does not make the coupon payment within the grace period, which ends on Dec. 30, 2013, or to 'SD' (Selective Default) if the coupon payment is deferred and/or a financial restructuring is consummated. =========== R U S S I A =========== BANK SOYUZ: S&P Revises Outlook to Positive & Affirms 'B' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it had revised its outlook on Russia-based Bank Soyuz to positive from stable. At the same time, S&P affirmed the 'B' long-term counterparty credit rating and raised the short-term counterparty credit rating to 'B' from 'C'. S&P also raised its Russia national scale rating on the bank to 'ruA' from 'ruA-'. The rating actions reflect S&P's view that Bank Soyuz's earnings capacity and the quality of its revenues are improving, which should support a gradual buildup of capital. S&P believes this stems from Bank Soyuz's new strategy, which focuses on increasing the efficiency of its cooperation with parent company Ingosstrakh and with Basic Element. S&P anticipates that the bank's credit portfolio will start to increase in 2014 and achieve growth rates of 20%-25% in 2015. In S&P's view, Bank Soyuz is unlikely to obtain additional external capital over the next two to three years. Therefore, S&P considers retained earnings to be its only means of building up capital in the near future. At the same time, increasing the retail loan portfolio would support a net interest margin of about 4% in next 12-18 months. As a result of cost optimization and loan portfolio recovery, Bank Soyuz has shown substantially improved profitability this year. For the nine months ended Sept. 30, 2013, the bank recorded a net profit of Russian ruble (RUB) 1.7 billion (about $53 million), compared with RUB289 million for the corresponding period in 2012. "We expect this trend to continue in 2014, with the bank generating RUB1.5 billion to RUB2 billion of net profit and a return on equity of 12%-14%. The bank's future profitability will likely benefit from higher margins in the retail segment and cooperation with Ingosstrakh -- one of the largest non-life insurers in Russia -- which has a large retail client base. We believe cross-selling capacities are substantial, and access to Ingosstrakh's clients could become a competitive advantage for Bank Soyuz, whose own retail franchise is otherwise limited. As a result, we believe that retained earnings will support the bank's capitalization at least at current levels. We project a risk-adjusted capital (RAC) ratio for Bank Soyuz, before adjustments for diversification, of 5%-6% over the next 12-18 months," S&P said. However, although improving, S&P still assess Bank Soyuz's earnings capacity as moderate because of challenges relating to its new strategy. For example, growth in retail banking could be difficult to achieve because this is a relatively new area for the bank. Moreover, S&P foresees pressure on the net interest margin, owing to increasing competition. S&P bases its ratings on Bank Soyuz on its 'bb' anchor for banks operating predominantly in Russia, and its view of the bank's "moderate" business position, "weak" capital and earnings, "weak" risk position, "average" funding, "adequate" liquidity, and "low" systemic importance in Russia, as defined in S&P's criteria. The positive outlook reflects the possibility of an upgrade if the quantity and quality of Bank Soyuz's profitability continue to improve, allowing the bank to sustain its capital position at least at the current level. Stable core earnings sufficient to sustain a RAC ratio exceeding 5% over the business cycle would support an upgrade. S&P might consider revising the outlook back to stable if the bank's profitability were to deteriorate, notably because of inability to reduce earnings volatility that could result in an erosion of capitalization. In addition, S&P might take a negative rating action if the link between Bank Soyuz and Ingosstrakh were to weaken. In particular, this could follow a weakening of the business links between the two entities, leading S&P to review the likelihood of group support and remove any related uplift for the rating. ========= S P A I N ========= PYMES SANTANDER 3: S&P Lowers Rating on Class C Notes to 'D' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered to 'D(sf)' from 'CC(sf)' its credit rating on Fondo de Titulizacion de Activos, PYMES SANTANDER 3's class C notes. At closing, the class C notes' issuance proceeds funded the reserve fund. This class of notes is subordinated in the priority of payments. On the October 2013 interest payment date, the issuer used the reserve fund for the first time. Consequently, the class C notes' interest was not paid. S&P's ratings on PYMES SANTANDER 3's notes address timely payment of interest and payment of principal during the transaction's life. S&P has therefore lowered to 'D (sf)' from 'CC (sf)' its rating on the class C notes. PYMES SANTANDER 3 closed in July 2012 and securitizes secured and unsecured loans that Banco SANTANDER S.A. granted to small and midsize enterprises (SMEs). SPAIN: S&P Revises Outlook on Five Financial Groups --------------------------------------------------- Standard & Poor's Ratings Services said it has revised the outlook on five Spanish financial groups and three branches of European banks: -- It revised to stable from negative the outlooks on four Spanish banking groups (and some group entities): Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) and its highly strategic U.S. subsidiaries BBVA Compass Bancshares Inc. (BBVA Compass) and Compass Bank; Caixabank, S.A. (Caixabank) and its parent Caja de Ahorros y Pensiones de Barcelona (la Caixa); Ibercaja Banco, S.A. (Ibercaja); and Cecabank, S.A. (CECA). -- S&P also revised to stable from negative the outlooks on three branches of European banks: Barclays Bank plc (Madrid Branch), Deutsche Bank (Madrid branch), and BNP Paribas Securities Services (Madrid branch). -- S&P revised to positive from stable the outlook on Bankinter S.A. The outlook on the following six Spanish banking groups remains negative: Bankia, S.A. (Bankia) and its parent Banco Financiero y de Ahorros, S.A. (BFA); Banco Popular Espanol, S.A. (Popular); Banco de Sabadell, S.A. (Sabadell); Kutxabank, S.A. (Kutxabank); Barclays Bank, S.A. (BBSA); and NCG Banco, S.A. (NCG). S&P has affirmed all ratings on the above-mentioned institutions. S&P has not included Banco Santander, S.A. and its subsidiary Santander Consumer Finance S.A. as part of this review. The ratings on both entities remain on CreditWatch with positive implications, where they were placed on Nov. 22, 2013. S&P has also not included in this review an assessment of the impact on any of the above-mentioned institutions of the Royal Decree-Law 14/2013, published on Nov. 30, 2013. S&P understands that this Royal Decree has modified, among other things, the legislation on income tax and the characteristics of certain deferred tax assets for Spanish financial institutions. S&P is currently undertaking a review of this recently published legislation and will determine and communicate within the next few weeks if it considers that it will likely affect its assessment of the creditworthiness of the above-mentioned Spanish financial institutions. The outlook revision on BBVA relates directly to the outlook revision of the long-term sovereign credit rating on Spain to stable from negative, as the ratings on BBVA are limited by S&P's current assessment of the sovereign creditworthiness. The outlook revision on BBVA led to a similar outlook revision on its highly strategic U.S. subsidiaries, BBVA Compass and Compass Bank. Similarly, the outlook revision of Barclays Bank plc (Madrid Branch), Deutsche Bank (Madrid branch), and BNP Paribas Securities Services (Madrid branch) is also directly related to the outlook revision of the long-term sovereign credit rating on Spain to stable from negative, in accordance with S&P's criteria for assessing the creditworthiness of EU branches of EU banks. The rating on a branch of an EU bank based in another EU jurisdiction is the lower of the bank's ICR and a level that is four notches above S&P's foreign currency rating on the host sovereign if that rating is 'BBB-' or higher. The outlook revision to positive on Bankinter, and to stable on Caixabank and its parent la Caixa, Ibercaja, and CECA, reflects S&P's view that downside risks for banks in the operating environment in Spain are diminishing. "In particular, we believe that Spanish banks have made significant progress in structurally rebalancing their funding profiles -- a trend that we expect to continue in the context of the stabilizing sovereign creditworthiness. Banks' loan books have fallen sharply while domestic deposits are growing. This has resulted in an increase in the weight of stable funding sources in the banks' funding mix. We expect core domestic deposits (as we define them) to account for 57% of the domestic loan book by end-2013. Since the beginning of 2013, the cost of domestic deposits has also fallen sharply. The financial system's net external liabilities -- equivalent to 14% of domestic loans as of June 2013 -- are well below the 24% average reported in the 2008-2011 period, as issuance in the international capital markets remains limited. Furthermore, we note that banks' net reliance on funding from the European Central Bank (ECB), while still high (EUR234 billion in October 2013), is trending downward, having reduced by 40% from the peak in August 2012," S&P said. These factors all support S&P's revised view of the trend for industry risk in the Spanish banking system as stable. S&P continues to view the trend for economic risk, in the context of its assessment of the financial industry, as stable. S&P expects the housing market correction to persist. In S&P's view, real estate prices will fall further in 2014 and 2015 and activity will remain modest. However, following the significant provisioning efforts in 2012, S&P believes that Spanish banks have already recognized most of the credit losses generated by the bursting of the real estate bubble. This will allow credit provisions on aggregate to gradually decline from this year onward, despite banks having to continue allocating provisions to cope with expected asset quality deterioration in the rest of their portfolios (primarily on non-real-estate corporate exposures and residential mortgages). S&P believes that economic recovery will be modest and gradual, and will remain mainly export-driven in 2014. Weak trends in domestic demand will therefore continue to put pressure on the creditworthiness of private sector agents and challenge their resilience. S&P do not expect the financial system to start reducing its volume of problem assets until 2015. S&P expects the anchor for banks operating in Spain to remain at 'bb+' in the medium term, reflecting the stable trend that S&P sees for economic and industry risk in the Spanish banking sector. The anchor is the starting point in assigning a bank's issuer credit rating. Despite S&P's view that risks in the operating environment in Spain are easing, it maintains negative outlooks on a number of institutions. This is because S&P considers that there are bank- specific factors (in most cases related to the banks' ability to strengthen capital) that could negatively affect our current assessments of those banks' stand-alone credit profiles (SACPs), as detailed below. STABLE OUTLOOKS Banco Bilbao Vizcaya Argentaria S.A. and subsidiaries. The stable outlook on the long-term rating on BBVA mirrors that on Spain. This is because the long-term rating on BBVA is constrained by the long-term sovereign credit rating on Spain. The stable outlook also reflects S&P's belief that BBVA's asset quality will continue to outperform its peers in most of the markets where it operates, and that the bank will be able to absorb the impact of still-high provisioning charges while reporting sound net operating performance. A revision of the outlook to positive or negative would depend on a similar action on the outlook on Spain. The stable outlook on BBVA Compass and Compass Bank reflects the outlook on their parent, BBVA. S&P do not currently view BBVA Compass or Compass Bank as insulated subsidiaries, therefore S&P do not incorporate any uplift for potential extraordinary government support and cap its ratings on them at the level of the parent's 'bbb-' group credit profile. Caixabank S.A. and Caja de Ahorros y Pensiones de Barcelona The stable outlook on Caixabank reflects S&P's belief that the bank should be able to absorb the impact of still-high credit impairments while posting positive bottom line performance. This, combined with strong deleveraging and additional actions recently undertaken by the bank to enhance its solvency, should allow Caixabank to continue strengthening its capitalization in coming quarters. S&P also believes that Caixabank's credit quality will remain better than the system average, in line with its track record of superior asset quality performance. S&P could revise the outlook to negative if asset quality deteriorates more than it expects, and if S&P anticipates that credit losses could potentially exceed the bank's loss-absorption capacity and significantly affect its solvency. If S&P believes that the quality of Caixabank's loan book is moving closer to the system average, it could also revise the outlook to negative. A revision of the outlook on the long-term rating on Spain to negative would also trigger a similar action on the outlook on Caixabank. S&P considers an outlook revision to positive as unlikely in the next 12-18 months, although this could occur if S&P revises the outlook on the long-term rating on Spain to positive, if economic conditions in Spain improve substantially, and if Caixabank preserves its financial strength through the cycle. The stable outlook on la Caixa mirrors that on Caixabank. Any rating action on Caixabank would trigger a similar action on la Caixa. Ibercaja Banco S.A. The stable outlook on Ibercaja reflects S&P's belief that, following the acquisition of Cajatres, Ibercaja's asset quality will continue to outperform that of its Spanish domestic peers. In addition, S&P considers that the bank will maintain its conservative approach to credit underwriting and acquisitions. The stable outlook also factors in S&P's view that, over the next 18-24 months, Ibercaja will maintain relatively stable solvency levels as the impact of modest organic capital generation will be mitigated by the repayment of state aid received by Cajatres. S&P could revise the outlook to negative if it anticipated that, contrary to its current expectations, Ibercaja's asset quality would likely deteriorate to converge with the system average in Spain or the bank would make further acquisitions of weaker players. S&P could revise the outlook to positive if the economic and operating environment in Spain improves and if Ibercaja is able to strengthen its solvency position substantially above its current expectations. Cecabank S.A. The stable outlook on Cecabank reflects S&P's belief that the bank has been able to maintain an adequate business position and diversify into new business lines. As a result, S&P believes that the bank has managed to offset weaker revenues from its historical business with former savings banks. In addition, in the context of improving funding conditions in the Spanish banking system S&P no longer sees material pressures on the funding and liquidity position of the bank. S&P could revise the outlook to negative if, contrary to its current expectations, funding becomes more market sensitive or if, despite recent successful diversification efforts, Cecabank's business prospects were to deteriorate sharply. Alternatively, a review of the outlook to positive would hinge on an improvement in the economic and operating environment in Spain. Barclays Bank PLC (Madrid Branch), Deutsche Bank (Madrid branch), and BNP Paribas Securities Services (Madrid Branch) The stable outlook on Barclays Bank PLC (Madrid Branch) and Deutsche Bank (Madrid branch) reflects the stable outlook on their respective parents, Barclays Bank PLC and Deutsche Bank AG, as well as the stable outlook on the long-term sovereign credit rating on Spain. The stable outlook on BNP Paribas Securities Services (Madrid Branch) reflects the stable outlook on the long- term sovereign credit rating on Spain. POSITIVE OUTLOOK Bankinter, S.A. The positive outlook on Bankinter reflects the possibility that S&P could raise the ratings on the bank if it anticipated that it would likely maintain a level of solvency such that its RAC ratio would be comfortably and sustainably above 5%, underpinned by stable earnings growth. An upgrade could also follow a continued successful transformation of the business model, increasing profitability and reducing the reliance of its business model on access to cheaper wholesale markets. S&P believes the positive trends Bankinter is experiencing in both its capital and business model transformation could mitigate the pressure S&P still sees on its profile from the need to rebalance its funding profile. However, failure to continue reducing its reliance on funding from the ECB and achieve a balanced funding structure without central bank support could trigger a revision of the outlook back to stable, particularly if S&P believes that progress in shifting its business profile was weakening or it perceived that Bankinter would be unlikely to sustain strengthened capital levels. NEGATIVE OUTLOOKS Kutxabank S.A. The outlook on Kutxabank remains negative, reflecting the possibility that S&P could lower the ratings if, contrary to its current expectations, the bank proves unable to substantially enhance its capital position. Specifically, this could occur if the bank's organic capital generation weakens significantly compared with current levels, mainly on the back of rising credit losses, or if Kutxabank is not able to complete some of the actions it has planned to strengthen its solvency, including the disposal of noncore assets. If, as a consequence, S&P anticipates that Kutxabank would not be able to raise its risk- adjusted capital (RAC) ratio before diversification sustainably above 5%, S&P could lower the ratings. Conversely, S&P could revise the outlook to stable if it anticipates that Kutxabank will successfully achieve its stated capital targets, therefore enhancing its solvency measures in line with its expectations. Banco Popular Espanol S.A. The negative outlook on Popular reflects S&P's view of the challenges that management faces in containing the ongoing deterioration of the bank's financial profile. In particular, S&P takes into account the risk that higher loan loss provisions could weaken its capital assessment and the possibility that ongoing pressure on the bank's financial profile could weaken Popular's business position or stability. The outlook also reflects the possibility that S&P could lower the ratings if, contrary to its current expectations, Popular is not able to rebalance its liquidity position to an "adequate" level according to its criteria by the time the long-term refinancing operation (LTRO) expires. S&P could revise the outlook to stable if the downside risks it currently sees for Popular's asset quality and overall financial position abate and, in its view, the bank's management team deals effectively with the challenges it faces. NCG Banco, S.A. The negative outlook on NCG reflects S&P's view that it could lower the ratings if the bank underperforms its capital forecasts due to lower-than-expected deleveraging or weaker-than-expected performance. In addition, S&P could lower the rating if, contrary to its current expectations, the bank fails to progressively reduce its reliance on ECB funding. A review of the outlook to stable would depend on the bank being able to maintain its solvency and overall financial position through the rest of its restructuring process. Banco de Sabadell S.A. The negative outlook on Sabadell reflects the pressures S&P continues to see on Sabadell's asset quality and funding and liquidity position. In S&P's view, there are still downside risks to Sabadell's asset quality performance, taking into account the sizable stock of nonperforming assets (NPAs) accumulated throughout the downturn and the weak asset quality of its acquisitions through the crisis, particularly that of Banco CAM S.A. The negative outlook also reflects the possibility that S&P could lower the ratings if, contrary to its current expectations, Sabadell is unable to improve its liquidity position to an "adequate" level according to its criteria and, therefore, continues relying on short-term wholesale funding, including the ECB facilities. S&P could revise the outlook to stable if the bank manages Banco CAM's stock of NPAs effectively and improves its asset quality performance so that it is more in line with the system average (as it was before acquiring Banco CAM). An outlook revision to stable would also hinge on Sabadell meeting S&P's expectation that it will sustain a stronger level of capital both in quantitative and qualitative terms, including a RAC ratio comfortably and sustainably above 5%. Bankia S.A. and Banco Financiero y de Ahorros S.A. The negative outlook on Bankia primarily reflects the possibility that the group may not deliver the profits or capital strengthening that S&P expects. For example, this could happen if the cost that parent company, Banco Financiero y de Ahorros (BFA), has to assume for compensating clients for the misselling of hybrid instruments is well above the provisions that the group has set aside for it, and if the extraordinary cost is not offset by extraordinary capital gains on divestments of noncore assets. S&P's assessment of Bankia's SACP, and therefore ultimately its ratings, could also be under pressure if the ongoing restructuring suffers significant deviations or delays that lead to a meaningful loss of business and harm the bank's franchise. This is not S&P's base-case scenario, however, and it expects this risk to diminish over time. In S&P's view, the ongoing restructuring process is far reaching and goes beyond the branch network restructuring that the bank has just announced it has concluded. S&P could revise the outlook to stable if it had greater visibility on the bank's ability to strengthen its capital and if it continues to progress well in its restructuring. The negative outlook on BFA mirrors that on Bankia, the group's operating entity. Barclays Bank S.A. The negative outlook on BBSA reflects S&P's view that the bank's ongoing restructuring poses a risk for a potential deterioration in BBSA's business profile relative to domestic peers. In addition, any evidence of reduced commitment from Barclays Bank PLC toward BBSA, although unlikely in the medium term, might lead S&P to modify its view of the Spanish bank's strategic importance to the group, which could lead to a lowering of the long-term rating by one or more notches. S&P might consider an outlook revision to stable if it believes that BBSA is making sound progress with its restructuring, relieving the pressure on its business position and delivering on its parent bank's expectations. BICRA SCORE SNAPSHOT* Spain To From BICRA Group 6 6 Economic risk 7 7 Economic resilience Intermediate risk Intermediate risk Economic imbalances Very High risk Very High risk Credit risk in the economy High risk High risk Industry risk 5 5 Institutional framework Intermediate risk Intermediate risk Competitive dynamics Intermediate risk Intermediate risk Systemwide funding High risk High risk Trends Economic risk trend Stable Stable Industry risk trend Stable Negative * Banking Industry Country Risk Assessment (BICRA) economic risk and industry risk scores are on a scale from 1 (lowest risk) to 10 (highest risk). RATINGS LIST Ratings Affirmed; Outlook Revised To Stable To From Banco Bilbao Vizcaya Argentaria S.A. Counterparty Credit Rating BBB-/Stable/A-3 BBB-/Neg/A-3 BBVA Compass Bancshares, Inc. Counterparty Credit Rating BBB-/Stable/A-3 BBB-/Neg/A-3 Compass Bank Counterparty Credit Rating BBB-/Stable/A-3 BBB-/Neg/A-3 CaixaBank S.A. Counterparty Credit Rating BBB-/Stable/A-3 BBB-/Neg/A-3 Caja de Ahorros y Pensiones de Barcelona Counterparty Credit Rating BB/Stable/B BB/Neg/B Cecabank S.A. Counterparty Credit Rating BB+/Stable/B BB+/Neg/B Ibercaja Banco S.A. Counterparty Credit Rating BB/Stable/B BB/Neg/B Deutsche Bank AG (Madrid Branch) Counterparty Credit Rating A/Stable/A-1 A/Neg/A-1 Barclays Bank plc (Madrid Branch) Counterparty Credit Rating A/Stable/A-1 A/Neg/A-1 BNP Paribas Securities Services (Madrid Branch) Counterparty Credit Rating A/Stable/A-1 A/Neg/A-1 Ratings Affirmed; Outlook Revised To Positive Bankinter S.A. Counterparty Credit Rating BB/Positive/B BB/Stable/B Ratings Affirmed; Outlook Remains Negative Bankia S.A. Counterparty Credit Rating BB-/Negative/B Banco Financiero y de Ahorros S.A. Counterparty Credit Rating B-/Negative/C Banco Popular Espanol S.A. Counterparty Credit Rating BB-/Negative/B Banco de Sabadell S.A. Counterparty Credit Rating BB/Negative/B Barclays Bank S.A. Counterparty Credit Rating BBB-/Negative/A-3 Kutxabank S.A. Counterparty Credit Rating BBB-/Negative/A-3 NCG Banco, S.A. Counterparty Credit Rating BB-/Negative/B NB: This list does not include all ratings affected. ===================== S W I T Z E R L A N D ===================== CREDIT SUISSE: S&P Rates New Tier 1 Capital Notes 'BB-' ------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'BB-' long-term issue rating to the proposed undated additional Tier 1 capital notes to be issued by Credit Suisse Group AG (A- /Stable/--). The rating is subject to S&P's review of the notes' final documentation. In accordance with S&P's criteria for hybrid capital instruments, the 'BB-' rating reflects its analysis of the proposed instruments, and its assessment of Credit Suisse AG's stand-alone credit profile (SACP) of 'bbb+'. The 'BB-' issue rating stands five notches below the operating company's SACP, incorporating: -- The deduction of two notches, which is the minimum downward notching from the SACP under S&P's criteria for bank hybrid capital instruments; -- The deduction of one additional notch to reflect that the notes are issued by the holding company, and not the operating company; -- S&P's view that the notes have a going-concern loss absorption in the form of mandatory nonpayment of coupons, resulting in an additional notch; and -- The deduction of a fifth notch to reflect that the notes feature a nonviability contingency clause leading to mandatory write-down. -- According to this clause, a mandatory write-down would occur if Credit Suisse AG's common equity Tier 1 ratio fell below 5.125%. S&P will assign "intermediate" equity content to the notes when they are formally approved by the regulator for inclusion as regulatory Tier 1 capital. The instruments meet the conditions for "intermediate" equity content under S&P's criteria as: -- They are perpetual, -- They do not contain a step-up clause, and -- They have loss-absorption features on a "going-concern" basis as the bank has the flexibility to suspend the coupon at any time. =========================== U N I T E D K I N G D O M =========================== ALBEMARLE & BOND: Opts to Put Business Up for Sale -------------------------------------------------- Ashley Armstrong at The Daily Telegraph reports that Albemarle & Bond has put itself up for sale. According to The Daily Telegraph, the cash-strapped company, which last week said that it had been forced to smelt its own gold to avoid breaching covenants, has said that it believes it is in the best interest of shareholders "to sell the business by means of a formal sale process." The company said that the process includes the possibility of a takeover offer for the company although there could be no certainty that the offer will be made, The Daily Telegraph relates. Unusually, the company has sought dispensation from the UK Takeover Panel so that bidders will not be required to be publicly identified and it will not be subjected to the typical 28-day takeover offer deadline during the sale process, The Daily Telegraph discloses. The company has hired Canaccord Genuity to advise on the process and any interested bidder will be required to enter into a non- disclosure agreement before being allowed to take part in the sale, The Daily Telegraph relays. The company has pushed back its covenant testing date until February 3, 2014, The Daily Telegraph notes. The group's financial position is considerably squeezed as it has nears the limit of its GBP53.3 million debt facilities with debts of GBP50.1 million, as of November 27, The Daily Telegraph states. Albemarle & Bond Holdings PLC provides pawnbrokering services. The Company, through its subsidiaries, provide pawnbroking, check cashing services, retail jewelry sales and unsecured lending. Albemarle operates in the United Kingdom. DEVILFISH CREATIVE: Performers Left Out of Pocket ------------------------------------------------- Matthew Hemley at thestage.co.uk reports that performers who appeared in idents for a new television channel have been left thousands of pounds out-of-pocket after Devilfish Creative, the production company that hired them, became insolvent. According to thestage.co.uk, the performers were employed to appear in idents for new channel Lifetime. However, it has since emerged that Devilfish has become insolvent and has applied for a company voluntary arrangement, which is a system that would allow it to pay its creditors smaller amounts than are owed to secure the company's "survival and success." thestage.co.uk, citing a report drawn up by insolvency firm David Rubin and Partners, says Devilfish's CVA proposal -- which creditors will vote on in December -- would see unsecured creditors paid 31 pence of every pound owed. The report states creditors are owed a total of almost GBP900,000 by the company, with unsecured creditors accounting for GBP394,299 of this, thestage.co.uk notes. The CVA proposal "appears to be feasible," according to David Rubin and Partners' report cited by thestage.co.uk. The report adds that HM Revenue and Customs, a creditor, had issued a winding up petition against the company, thestage.co.uk adds. HEARTS OF MIDLOTHIAN: Bob Jamieson's Actions May Ruin Rescue Bid ---------------------------------------------------------------- Herald Scotland reports that the Foundation of Hearts has branded Bob Jamieson a "Walter Mitty" attention-seeker after it emerged that his actions could ruin their bid to save the Hearts of Midlothian Football Club. The Peebles-based businessman has confirmed he is behind a rival offer for UBIG's 50% shareholding in the Club, which the Foundation hope to get for nothing after Friday's Company Voluntary Arrangement was agreed, Herald Scotland relates. According to Herald Scotland, persuading UBIG to part with their stake remains the only major hurdle for the club's administrators BDO after secured creditor Ukio Bankas accepted GBP2.5 million for debts of GBP15.5 million on their 29.9% stake in the Club. But now collapsed Lithuanian investment company UBIG, who are owed GBP8.2 million, must consider Mr. Jamieson's offer, the report notes. Mr. Jamieson went up against the Foundation, who have nearly 8,000 fans making monthly pledges, in his failed attempt to gain preferred bidder status and is still refusing to back down, Herald Scotland discloses. Hearts administrator Bryan Jackson said at the weekend that such actions could derail his bid to lead the club out of administration and the Foundation have criticized his disruptive behavior, Herald Scotland relays. Amid a complex administration process, it is thought that Mr. Jamieson -- should his bid be successful -- would effectively be left with a 50% stake in a club which would be liquidated, Herald Scotland says. The Foundation's offer is subject to being handed UBIG's shareholding, Herald Scotland states. About Hearts of Midlothian Hearts of Midlothian Football Club, more commonly known as Hearts, is a Scottish professional football club based in Gorgie, in the west of Edinburgh. Hearts went into administration after the Scottish FA opened disciplinary proceedings against the club. BDO was appointed administrators on June 19. IFA BERKELEY: Placed in Compulsory Liquidation ---------------------------------------------- Michael Trudeau at ftadviser.com reports that London-based Equity release specialist and IFA Berkeley Consultants UK Limited has had its permissions stripped by the Financial Conduct Authority after it was placed in compulsory liquidation by HM Revenue and Customs. On September 16, the company was wound up and placed in compulsory liquidation following a petition from HM Revenue and Customs, the report discloses. ftadviser.com says the FCA, on Nov. 11, issued a decision notice stating its intention to strip the company of its permissions. ftadviser.com relates that a final notice from the regulator stated that the company failed to ensure its affairs were conducted in a sound and prudent manner and in compliance with proper standards. According to the report, Berkeley failed repeatedly to submit its retail mediation activities review promptly and failed altogether to submit them for the periods ended Nov. 30, 2012 and May 31, 2013. The firm also failed to adequately respond to correspondence from the regulator, the report adds. ILFORD IMAGING: Declares Insolvency as Investor Backs Out --------------------------------------------------------- Chris Cheesman at Amateur Photographer reports that Ilford Imaging Switzerland, which makes Galerie-branded photographic inkjet paper, has declared itself insolvent after the 'last potential investor pulled out'. According to the report, the cash-strapped company has failed to find an investor despite interest from more than 20 parties since a UK backer pulled out earlier this year. Ilford Imaging Switzerland said the last potential investor withdrew their interest earlier this week, the report relays. The company said it 'is again facing liquidity issues and is no longer able to honour its full financial obligations'. The firm has sent a letter to a court in Fribourg 'declaring insolvency,' according to Amateur Photographer. The company is totally separate from Ilford Photo which is based in the UK and is unaffected (Ilford Photo is the trading name of Cheshire-based Harman Technology which makes traditional b&w photographic papers and film), the report notes. ROYAL BANK: Forced SMEs to Default, Report Says ----------------------------------------------- Margot Patrick at The Wall Street Journal reports that Royal Bank of Scotland PLC was accused of pushing small businesses into default to boost its profit, putting the bank back in the firing line with government officials who only earlier this month decided the partly state-owned bank didn't need to be broken up to help boost Britain's economic recovery. The Journal relates that a report by Lawrence Tomlinson, an adviser to Business Secretary Vince Cable, alleges that in some cases, RBS forced business customers to default on loans so that the bank could charge higher fees or seize their properties and sell them. According to the Journal, Mr. Tomlinson said he found evidence that RBS had revalued or changed the terms of loans owed by "good and viable" businesses, with the apparent aim of moving them into its turnaround division, Global Restructuring Group, and putting them on a "journey to insolvency." His report was based mainly on information provided to him by existing and former RBS business customers, the Journal relays. The Journal notes that similar allegations against the RBS unit have previously been made publicly by a number of its borrowers, and in investigative reports by U.K. media, but the bank has always denied that it sought to force companies out of business. According to the Journal, Chancellor George Osborne said the findings are "shocking" and will be investigated. The report relates that Mr. Cable said he turned the report over to the U.K. financial regulators, the Financial Conduct Authority and the Prudential Regulation Authority for review. A PRA spokesman said it will consider the findings of the Tomlinson report and work closely with the FCA on the matter, the Journal adds. RBS's GRG unit, the operation at the center of the accusations, manages RBS's relationships with business customers in financial distress. The Journal relates that an RBS spokeswoman said the group "successfully turns around most of the businesses it works with," but that "not all businesses that encounter serious financial trouble can be saved." RBS Chief Executive Ross McEwan said the bank would seek to improve its approach to business lending, and had hired law firm Clifford Chance to fully review the accusations raised by Mr. Tomlinson, the Journal reports. About Royal Bank The Royal Bank of Scotland Group plc (NYSE:RBS) -- http://www.rbs.com/-- is a holding company of The Royal Bank of Scotland plc (Royal Bank) and National Westminster Bank Plc (NatWest), which are United Kingdom-based clearing banks. The company's activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On October 17, 2007, RFS Holdings B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V. (ABN AMRO). In July 2008, the company disposed of its entire interest in Global Voice Group Ltd. UK: PRA Eases Tough Capital Demands for Bank-Specific Risks ----------------------------------------------------------- Sam Fleming at The Financial Times reports that the Bank of England's regulatory arm backed away from tough capital demands for bank-specific risks on Friday as it set out the detailed implementation of new EU rules. Regulators tailor secret Pillar 2A requirements to cover each bank's individual risks -- including those associated with pension liabilities, the FT discloses. The move comes after banks urged the PRA not to pile on excessively onerous capital demands as it brings in EU-wide rules aimed at improving the resilience of the banking sector by implementing the new global Basel III standards, the FT relays. The PRA's original proposals, published in August, prompted ferocious lobbying from the banks and building societies, the FT notes. The PRA, as cited by the FT, said in a new paper that it would impose the same mix of capital in Pillar 2A as for banks' Pillar 1 requirements. That means UK banks will have to hold at least 56% of their supplementary requirements in top-quality Common Equity Tier 1 (CET1) capital -- not all of it, the FT states. "The PRA have recognized that some of the risks they cover in Pillar 2A -- notably pension risk -- do not need to be covered by CET1 capital. This is helpful and makes sense, because this sort of risk only needs to be covered by gone concern capital -- which is used to cover a situation when a bank goes into resolution," the FT quotes Simon Hills, an executive director at the British Bankers' Association, as saying. The PRA dismissed calls from some lenders that they should not have to hold any CET1 capital against pension risk, the FT relates. Analysts at Exane BNP Paribas said the PRA's announcement meant banks could face an equity tier one requirement of between 12% and 13% but that further information was still needed, the FT recounts. The PRA has not yet finalized all the aspects of its rules, which implement a European directive called CRDIV, the FT notes. =============== X X X X X X X X =============== * European Union Threatens Action Against Big Three Ratings Firms ----------------------------------------------------------------- Tom Fairless, writing for The Wall Street Journal, reported that the European Union's markets watchdog has warned that it may take "enforcement action" against the big three credit ratings firms after it found "deficiencies" in the way that they rank sovereign bonds. According to the report, the three U.S.-based rating firms have faced an onslaught of criticism and new regulation in Europe in recent years after lawmakers criticized the timing of their decisions to downgrade European sovereigns for aggravating the region's financial crisis. In a report published on Dec. 2, the Paris-based European Securities and Markets Authority, or ESMA, warned of a series of "actual failings or potential risks" that might compromise the independence and accuracy of the agencies -- Fitch Ratings, Moody's Investors Service and Standard & Poor's, the report related. It also pointed to failings in the way the agencies handled confidential information, including disclosure of upcoming rating actions to third parties, and highlighted "significant and frequent delays" in the publication of ratings, the report further related. "ESMA has not determined whether any of the report's findings constitute a breach of the credit ratings agency Regulation," the watchdog said in a statement, the report added. Further investigations "could lead to supervisory or enforcement actions," it said. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., 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 2013. 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$775 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 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *