/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/151014.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, October 14, 2015, Vol. 16, No. 203 Headlines C Y P R U S * CYPRUS: To Adopt New Directive on Bank Deposit Guarantee G E R M A N Y ALPHAFORM: Proto Labs Acquires Assets in Europe I R E L A N D LIGHTPOINT PAN-EUROPEAN: Moody's Raises Rating on E Notes to Ba2 I T A L Y CHIL SRL: Judge Extends Bankruptcy Probe Into Tizano Renzi L U X E M B O U R G GARFUNKELUX HOLDCO: Moody's Assigns B2 CFR, Outlook Stable N E T H E R L A N D S JUBILEE CDO VIII: Fitch Affirms 'B-sf' Rating on Class E Notes N O R W A Y EWOS GROUP: S&P Removes 'B' CCR From CreditWatch Positive R U S S I A APOGEY-MED INSURANCE: Bank of Russia Suspends Insurance License DERZHAVA INSURANCE: Bank of Russia Suspends Insurance License MAYAK INSURANCE: Bank of Russia Suspends Insurance License NOTA-BANK: Bank of Russia Appoints Provisional Administration NOVOSIBIRSK: S&P Assigns 'BB+' Rating to RUB2BB Sr. Unsec. Bonds OTP BANK RUSSIA: Fitch Affirms 'BB' LT Issuer Default Rating * Fitch Says Tax Hike May Force Russian Oil Firms to Cut Drilling S W I T Z E R L A N D TAURUS CMBS 2007-1: S&P Lowers Rating on Class A2 Notes to 'D' UBS CAPITAL: Moody's Reviews Ba2 Stock Rating for Upgrade U N I T E D K I N G D O M ANDOVER BOWLING: Venue Goes Into Administration FORWARD LIFE: Faces Fraud Investigation Amid CVA INFINIS ENERGY: Moody's Lowers CFR to B1, Outlook Stable NORTHAMPTON TOWN: Fear of Administration Grows SSI UK: Asset Sale Talk Continues, Unions Call for Pension Probe * Low Interest Rate to Pressure EU Insurance, Moody's Says X X X X X X X X * S&P Takes Rating Actions on 12 European Synthetic CDO Tranches ********* =========== C Y P R U S =========== * CYPRUS: To Adopt New Directive on Bank Deposit Guarantee ---------------------------------------------------------- Cyprus Mail reports that a European Union directive on bank deposit guarantee schemes (DGS) is expected to be transposed into the island's legislation by the end of the month as Cyprus faces hefty fines if it continues to delay its approval. State Law Office officials Demetris Lysandrou told MPs that the directive should have been approved by last July and that Cyprus has already received a warning over the delay, Cyprus Mail relates. Directive 2014/49 effectively updates the original DGS directive adopted in 1994, Cyprus Mail notes. A March 2009 directive required member states to increase coverage of their DGS -- first, to at least EUR50,000, and then, to a uniform level of EUR100,000 by the end of 2010, Cyprus Mail discloses. The new directive confirmed that EUR100,000 is an appropriate level of protection and provides that the DGS must be able to fund at least 0.8% of covered deposits by 2024, Cyprus Mail states. The scheme will be financed by a country's banks according to their size but there are also risk-based criteria, Cyprus Mail says. Riskier banks imply a higher likelihood of failure and, in turn, the need to trigger DGS. Such banks should therefore, pay more contributions to DGS, Cyprus Mail states. A new improvement ensures that banks will have to pay in to the schemes on a regular basis (ex ante), and not only after a bank failure (ex post), according to Cyprus Mail. During discussion of the issue before the House Finance Committee, MPs raised questions over the decision to bail out Laiki Bank in 2012, Cyprus Mail relays. At the time, MPs, as cited by Cyprus Mail, said, they were told that failure to approve the EUR1.8 billion bailout, would mean unruly collapse and EUR7.5 billion in deposits under EUR100,000 would have to be footed by the state. On Oct. 12, MPs were left with the impression that that was not the case, Cyprus Mail relates. MP Yiannos Lamaris, whose party was in power at the time, said discussion proved "that the state has no responsibility (over insured deposits), Cyprus Mail relays. If we knew, our decisions possibly would have been different." The lender was restructured a year later and none of the insured deposits were lost, unlike those over EUR100,000, Cyprus Mail recounts. A banking source said there were no EU countries with a DGS that had enough cash to compensate depositors of a systemic bank in case of bankruptcy, Cyprus Mail notes. It is understood that Cyprus' fund had around EUR100 million, Cyprus Mail discloses. ============= G E R M A N Y ============= ALPHAFORM: Proto Labs Acquires Assets in Europe ----------------------------------------------- Optics.org reports that Alphaform, which filed for bankruptcy earlier this year, appears to have been rescued following the completion of a deal with US-based Proto Labs. The acquisition sees Proto Labs gain "select assets and operations" previously belonging to Alphaform, including a range of laser additive manufacturing capabilities in three European countries, Optics.org discloses. "The acquisition includes Alphaform divisions operating in Germany, Finland and the UK," Optics.org quotes Proto Labs as saying. "This acquisition will significantly expand Proto Labs' recently launched additive manufacturing capabilities in Europe by adding selective laser sintering, direct metal laser sintering and additional stereolithography capabilities." Back in July, Alphaform said that it had initiated bankruptcy proceedings in Munich, Germany, "on the grounds of impending insolvency", adding that it would work with bankruptcy administrators to continue implementing earlier efforts to restructure the business, Optics.org recounts. Alphaform is a provider of laser additive manufacturing services in Germany. ============= I R E L A N D ============= LIGHTPOINT PAN-EUROPEAN: Moody's Raises Rating on E Notes to Ba2 ---------------------------------------------------------------- Moody's Investors Service has upgraded the ratings on these notes issued by LightPoint Pan-European CLO 2006 p.l.c.: EUR20,000,000 Class D Floating Rate Notes Due 2022, Upgraded to A2 (sf); previously on May 28, 2015 Upgraded to A3 (sf) EUR9,500,000 Class E Floating Rate Notes Due 2022, Upgraded to Ba2 (sf); previously on May 28, 2015 Affirmed Ba3 (sf) Moody's also affirmed the ratings on these notes: EUR220,000,000 Class A Floating Rate Notes Due 2022 (current outstanding balance of EUR10,279,948.36), Affirmed Aaa (sf); previously on May 28, 2015 Affirmed Aaa (sf) EUR23,500,000 Class B Floating Rate Notes Due 2022, Affirmed Aaa (sf); previously on May 28, 2015 Affirmed Aaa (sf) EUR20,500,000 Class C Deferrable Floating Rate Notes Due 2022, Affirmed Aaa (sf); previously on May 28, 2015, Upgraded to Aaa (sf) LightPoint Pan-European CLO 2006 p.l.c., issued in January 2007, is a collateralized loan obligation (CLO) backed primarily by a portfolio of European senior secured loans. The transaction's reinvestment period ended in January 2013. RATINGS RATIONALE These rating actions are primarily a result of deleveraging of the senior notes and an increase in the transaction's over- collateralization ratios since May 2015. The Class A notes have been paid down by approximately 45.6% or EUR8.6 million since that time. Based on the trustee's September 2015 report, the over- collateralization (OC) ratios for the Class A/B, Class C, Class D and Class E notes are reported at 270.1%, 168.1%, 122.8% and 108.9%, respectively, versus May 2015 levels of 235.5%, 158.8%, 120.5% and 108.1%, respectively. Factors that would lead to an upgrade or downgrade of the rating: This transaction is subject to a number of factors and circumstances that could lead to either an upgrade or downgrade of the ratings: 1) Macroeconomic uncertainty: CLO performance is subject to a) uncertainty about credit conditions in the general economy and b) the large concentration of upcoming speculative-grade debt maturities, which could make refinancing difficult for issuers. 2) Collateral Manager: Performance can also be affected positively or negatively by a) the manager's investment strategy and behavior and b) differences in the legal interpretation of CLO documentation by different transactional parties owing to embedded ambiguities. 3) Collateral credit risk: A shift towards collateral of better credit quality, or better credit performance of assets collateralizing the transaction than Moody's current expectations, can lead to positive CLO performance. Conversely, a negative shift in credit quality or performance of the collateral can have adverse consequences for CLO performance. 4) Deleveraging: An important source of uncertainty in this transaction is whether deleveraging from unscheduled principal proceeds will continue and at what pace. Deleveraging of the CLO could accelerate owing to high prepayment levels in the loan market and/or collateral sales by the manager, which could have a significant impact on the notes' ratings. Note repayments that are faster than Moody's current expectations will usually have a positive impact on CLO notes, beginning with those with the highest payment priority. In addition to the base case analysis, Moody's also conducted sensitivity analyses to test the impact of a number of default probabilities on the rated notes relative to the base case modeling results, which may be different from the current public ratings of the notes. Moody's Adjusted WARF -- 20% (2318) Class A: 0 Class B: 0 Class C: 0 Class D: +1 Class E: +1 Moody's Adjusted WARF + 20% (3476) Class A: 0 Class B: 0 Class C: 0 Class D: -2 Class E: -1 Loss and Cash Flow Analysis: Moody's modeled the transaction using a cash flow model based on the Binomial Expansion Technique, as described in "Moody's Global Approach to Rating Collateralized Loan Obligations," published in September 2015. The key model inputs Moody's used in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's analyzed the collateral pool as having a performing par and principal proceeds balance of EUR91.2 million, no defaulted par, a weighted average default probability of 19.73% (implying a WARF of 2897), a weighted average recovery rate upon default of 50.49%, a diversity score of 20 and a weighted average spread of 3.33% (before accounting for LIBOR floors). Moody's incorporates the default and recovery properties of the collateral pool in cash flow model analysis where they are subject to stresses as a function of the target rating on each CLO liability reviewed. Moody's derives the default probability from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The average recovery rate for future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and the collateral manager's latitude for trading the collateral are also factors. A material proportion of the collateral pool includes debt obligations whose credit quality Moody's assesses through credit estimates. Moody's analysis reflects adjustments with respect to the default probabilities associated with credit estimates. For each credit estimates whose related exposure constitutes more than 3% of the collateral pool, Moody's applied a two-notch equivalent assumed downgrade to approximately 8.7% of the pool. ========= I T A L Y ========= CHIL SRL: Judge Extends Bankruptcy Probe Into Tizano Renzi ---------------------------------------------------------- ANSA reports that a preliminary hearings judge on Oct. 12 ordered the extension of a probe into Tizano Renzi, father of Italian Premier Matteo Renzi, in a case of suspected fraudulent bankruptcy. The judge disagreed with the prosecutor in the case, who had asked for the probe to be shelved, ANSA relates. The elder Renzi is under investigation in the north-western city of Genoa, ANSA discloses. The probe into the 2013 failure of the Chil Srl newspaper distribution and advertising firm, which was founded by the premier's father, was opened in 2013, ANSA recounts. =================== L U X E M B O U R G =================== GARFUNKELUX HOLDCO: Moody's Assigns B2 CFR, Outlook Stable ---------------------------------------------------------- Moody's Investors Service has assigned a B2 corporate family rating to Garfunkelux Holdco 2 S.A. (GFKL-Lowell group). Concurrently, Moody's has assigned a provisional (P)Caa1 foreign currency instrument rating to the GBP240 million senior notes to be issued by Garfunkelux Holdco 2 S.A. In addition, the rating agency has assigned a provisional (P)B2 foreign currency rating to the proposed GBP555 million senior secured bonds and affirmed the B2 local currency rating of the outstanding senior secured bonds of Garfunkelux Holdco 3 S.A, a subsidiary of GFKL-Lowell group. The outlook on all ratings is stable. Moody's issues provisional ratings in advance of the final sale of securities. These ratings represent the rating agency's preliminary credit opinion. A definitive rating may differ from a provisional rating if the terms and conditions of the final issuance are materially different from those of the draft prospectus reviewed. The rating actions follow the group's announcement of a comprehensive financing structure which aims to fund the acquisition of UK Lowell Group (Lowell Finance Holdings Limited (CFR B1, outlook stable) and related entities) from TDR Capital LLP (TDR, unrated) and subsequent business combination with GFKL Financial Services AG (GFKL) by private equity owner Permira Funds (Permira; unrated) at the level of Garfunkelux Holdco 3 S.A. The proceeds of the issuance of the proposed notes will mainly be used to pay existing debt at the level of Lowell and to fund the acquisition, while the senior secured bonds issued by GFKL-Lowell group through its subsidiary Garfunkelux Holdco 3 S.A. will remain outstanding as they will not be refinanced as part of this transaction. As a result of the organizational changes associated with the new group structure, Moody's has assigned a CFR at the level of Garfunkelux Holdco 2 S.A., which will be the top entity of the restricted group and will produce the audited consolidated accounts going forward. At the same time, the agency has withdrawn the existing B2 CFR at the level of GFKL. RATINGS RATIONALE RATINGS AFFIRMATIONS AND ASSIGNMENTS REFLECT ENHANCED BUSINESS PROFILE BUT MORE AGGRESSIVE FINANCING STRUCTURE OF LARGER GFKL- LOWELL GROUP The rating actions follow the announcement on October 9, 2015 of a comprehensive financing structure which aims to primarily fund the acquisition of Lowell by private equity firm Permira and subsequent business combination with GFKL, announced on 7 August 2015. The group will be one of the largest debt purchase companies in the UK and among the leading receivables management companies in Germany, with the UK market accounting for 60-65% of its estimated collections in 2015 and Germany accounting for 35- 40%. The addition of Lowell's UK business implies a significant change to the business profile and business mix of the group, as GFKL has so far focused primarily on the debt servicing business. The rating actions reflect: (1) the group's business strengths by combining two of the largest non-captive third-party consumer debt collection and credit management businesses in Europe with leading market positions in the UK (Lowell) and Germany (GFKL) and multi- year solid performance track record; and (2) the overall financing structure's debt metrics with considerable leverage and anticipated cash-flow and deleveraging profile. The group's B2 CFR positively reflects: (1) its leading market position as one of the largest independent and diversified debt collection and servicing agencies in the UK and Germany, specialized in consumer debt receivables; (2) successful multi- year operating track record of both Lowell and GFKL; and (3) our assessment of stable operating conditions in the group's key markets which should support a sustainable performance. However, the CFR is constrained by the group's: (1) proposed high level of leverage with a debt-to-adjusted EBITDA of 5.2 times, leading to limited financial flexibility; (2) remaining material key relationship concentrations for both Lowell and GFKL despite limited overlap; and (3) its ambitious growth plan to further grow the group's debt collection business, in particular in the UK, thereby relying on the operating cash flow from both businesses, but also drawing down on liquidity sources of cash overfunding post transaction. Because of its growth plans we do not expect the group to effectively reduce its net debt over the tenor of the bonds, but achieve the deleveraging by increasing its EBITDA which increases the refinancing risk. The private equity ownership of the firm also brings an element of uncertainty regarding the timing and method of exit of the investment. Moody's also notes that the debt purchasing and debt collection businesses are highly exposed to changes in the regulatory framework concerning conduct and related reputational damage to a firm's franchise, which could result from customers' complaints. These risks are partially mitigated by both, GFKL's and Lowell's low historical level of complaints and the stable regulatory framework in the countries in which the group operates. The (P)B2 rating assigned to the senior secured notes to be issued by Garfunkelux Holdco 3 S.A. and the affirmation of the B2 rating of its outstanding senior secured notes reflect the notes' positioning within the group's funding structure, significant asset coverage and level of seniority over other liabilities. The (P)Caa1 rating assigned to the senior notes to be issued by Garfunkelux Holdco 2 S.A. reflects the structural subordination of this entity to the bonds at Garfunkelux Holdco 3 S.A. ranking ahead. It also reflects the book value of GFKL's and Lowell's tangible assets to result in no asset coverage to the senior notes in the event of liquidation. RATIONALE FOR THE STABLE OUTLOOK The stable outlook incorporates Moody's expectations that GFKL and the entire group will be able to execute its business plan in a stable operating environment and on the back of a smooth integration of the Lowell business. What Could Change the Rating -- UP Upward ratings pressure could develop from a faster-than- anticipated improvement in leverage metrics as reflected in net debt-to-adjusted EBITDA (which stands at 5.2x as of end of June 2015 on a pro forma basis), adjusted EBITDA-to-interest coverage (which is at 2.2x as of the same date), as well as a strengthening of the group's solvency (measured as Tangible Common Equity on Tangible Managed Assets). An increase in funding or operational diversification supporting sustained and resilient performance could also contribute to a rating upgrade. What Could Change the Rating -- DOWN Downward ratings pressure could develop because of a more aggressive credit profile of GFKL-Lowell group from a change in its business mix and may be reflected in: (1) A further increase in leverage or sustained decline or less resiliency in operating performance; (2) a significant decline in interest coverage; (3) a protracted decrease in profitability. Furthermore, a downgrade could result from any deterioration in the franchise or market position of GFKL-Lowell group. ===================== N E T H E R L A N D S ===================== JUBILEE CDO VIII: Fitch Affirms 'B-sf' Rating on Class E Notes -------------------------------------------------------------- Fitch Ratings has affirmed Jubilee CDO VIII B.V. and revised the Outlook on the class A2 to E notes to Stable as follows: EUR122.1 million Class A-1 (ISIN XS0331559640): affirmed at 'AAAsf'; Outlook Stable EUR24 million Class A-2 (ISIN XS0331560572): affirmed at 'AAAsf'; Outlook revised to Stable from Negative EUR42 million Class B (ISIN XS0331560655): affirmed at 'Asf'; Outlook revised to Stable from Negative EUR20 million Class C (ISIN XS0331560903): affirmed at 'BBBsf'; Outlook revised to Stable from Negative EUR18 million Class D (ISIN XS0331561208): affirmed at 'BBsf'; Outlook revised to Stable from Negative EUR16 million Class E (ISIN XS0331561463): affirmed at 'B-sf'; Outlook revised to Stable from Negative Jubilee CDO VIII B.V. is a securitization of mainly European senior secured loans, senior unsecured loans, second-lien loans, mezzanine obligations and high-yield bonds. At closing a total note issuance of EUR400 million was used to invest in a target portfolio of EUR388 million. The portfolio is actively managed by Alcentra Ltd. KEY RATING DRIVERS The affirmations reflect the adequate credit enhancement available to the notes. The reported share of assets rated 'CCC' or below has increased to 18.3% of the aggregate collateral balance from 12.0% in October 2014. However, the overall credit quality of the portfolio has remained stable, with the reported weighted average rating factor increasing only slightly to 30.03 from 29.24 in October 2014. The portfolio rating distribution is thus more bar-belled. Obligor concentration in the portfolio continues to increase, with the largest obligor accounting for 4.9% of the portfolio, up from 3.8% in October 2014. The revision of the Outlook on the class A-2, B, C, D, and E notes reflects the increase in credit enhancement since the last review. The class A-1 notes received EUR85.3 million of principal proceeds in the past 12 months. A further EUR2.2 million of interest proceeds was used to redeem the class A-1 notes, bringing the total redemption amount over the past 12 months to EUR87.6 million. This compares with a class A-1 redemption amount of EUR24.5 million over the preceding 12 months. The sizable deleveraging of the structure was driven almost exclusively by prepayments. All overcollateralization (OC) tests have been in compliance since the last review. Deleveraging more than offset the rise in the share of assets rated 'CCC' or below, leading to a sizable increase in all OC test results. Assets rated 'CCC' or below exceeding 5% of the aggregate collateral balance are considered at the lower of their market value or expected recovery rate for the purposes of the OC tests. All interest coverage (IC) tests have been passed with significant buffer. The IC tests for the transaction have not been breached so far. The transaction exited its reinvestment period in January 2014. Reinvestment of unscheduled principal proceeds and sale proceeds from credit-improved or credit-impaired assets is currently not permitted due to several conditions not being met (including passing the Fitch weighted average rating factor test). The transaction uses a macro currency swap to hedge sterling exposure. The hedge is not perfect and residual currency risk is borne by the structure. When a sterling asset defaults, the sterling recovery proceeds might be insufficient to reduce the swap balance to the performing sterling collateral balance and the manager will have to obtain sterling in the spot market. Also, while awaiting recovery proceeds, the structure continues to make payments on the sterling leg of the macro currency swap, even though the defaulted asset no longer generates sterling interest. This currency mismatch is partially mitigated through the use of currency options. The remaining exchange rate exposure is absorbed by the structure. The macro currency swap is scheduled to expire in January 2019. As of end-September 2015 the portfolio contained sterling assets totalling GBP17.5 million (down from GBP21.1 million a year ago), which mature after the expiration of the macro currency swap. This increases the sensitivity of the transaction to currency risk at the tail end of its life. RATING SENSITIVITIES A 25% increase in the obligor default probability would lead to a downgrade of between zero and two notches for the rated notes. A 25% reduction in expected recovery rates would lead to a downgrade of between zero and two notches for the rated notes. DUE DILIGENCE USAGE No third-party due diligence was provided or reviewed in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant Fitch groups and/or other rating agencies to assess the asset portfolio information. Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. =========== N O R W A Y =========== EWOS GROUP: S&P Removes 'B' CCR From CreditWatch Positive --------------------------------------------------------- Standard & Poor's Ratings Services said that it removed from CreditWatch with positive implications its 'B' long-term corporate credit and issue ratings on Norway-based salmonid feed producer Ewos Group. At the same time, S&P affirmed the ratings, then withdrew them at the request of the company. At the time of withdrawal, the outlook was stable. Ewos' entire shareholding has been acquired by Cargill Inc. with the transaction completing on Oct. 8, 2015. As a part of this transaction, all senior secured EUR225 million and Norwegian krone (NOK) 1.81 billion notes due 2020, as well as the NOK1.04 billion subordinated notes due 2021, will be repaid in full. All notes are expected to be redeemed by Oct. 19, 2015. =========== R U S S I A =========== APOGEY-MED INSURANCE: Bank of Russia Suspends Insurance License --------------------------------------------------------------- The Bank of Russia, by its Order No. OD-2699 dated October 7, 2015, suspended the insurance license of Apogey-Med Insurance Company, LLC. The decision is taken due to the insurer's failure to timely execute a Bank of Russia instruction, namely, due to its non- compliance with financial sustainability and solvency requirements with respect to securing insurance reserves, procedure and conditions to invest capital and insurance reserve funds. The decision becomes effective the day it is published in the Bank of Russia Bulletin. Suspended license shall mean a prohibition on entering into new insurance contracts and also on amending respective contracts resulting in increase in the existing obligations. The insurance agent shall accept applications on the occurrence of insured events and perform obligations. DERZHAVA INSURANCE: Bank of Russia Suspends Insurance License ------------------------------------------------------------- The Bank of Russia, by its Order No. OD-2700 dated October 7, 2015, suspended the insurance license of Derzhava Insurance Company, LLC. The decision is taken due to the insurer's failure to execute a Bank of Russia instruction, namely, due to its non-compliance with financial sustainability and solvency requirements with respect to securing insurance reserves, procedure and conditions to invest capital and insurance reserve funds. The decision becomes effective the day it is published in the Bank of Russia Bulletin. Suspended license shall mean a prohibition on entering into new insurance contracts and also on amending respective contracts resulting in increase in the existing obligations. The insurance agent shall accept applications on the occurrence of insured events and perform obligations. MAYAK INSURANCE: Bank of Russia Suspends Insurance License ---------------------------------------------------------- The Bank of Russia, by its Order No. OD-2690 dated October 7, 2015, suspended the insurance license of Mayak Insurance Company, limited liability company (registration number in the unified state register of insurance agents is 3754). The decision is taken due to the insurer's failure to timely execute a Bank of Russia instruction, namely, due to its non- compliance with financial sustainability and solvency requirements with respect to securing insurance reserves, procedure and conditions to invest capital and insurance reserve funds. The decision becomes effective the day it is published in the Bank of Russia Bulletin. Suspended license shall mean a prohibition on entering into new insurance contracts and also on amending respective contracts resulting in increase in the existing obligations. The insurance agent shall accept applications on the occurrence of insured events and perform obligations. NOTA-BANK: Bank of Russia Appoints Provisional Administration ------------------------------------------------------------- Due to the failure to meet creditors' claims on monetary obligations in terms of seven days from their maturity date and guided by Sub-clause 1 of Clause 1 of Article 189.26 of the Federal Law "On Insolvency (Bankruptcy)", by its Order No. OD-2746, dated October 13, 2015, the Bank of Russia appointed a provisional administration to manage the credit institution public joint-stock company NOTA-Bank (registration No. 2913) from October 13, 2015 for a six-month term. The powers of executive bodies of the credit institution are suspended. The main objective of the provisional administration is to ensure safety and estimate quality of assets of PJSC NOTA-Bank and prospects for restoring its liquidity, and cooperate with the bank's creditors with regard to their possible participation in solving the bank's problems. At the same time, guided by Article 189.38 of the Federal Law "On Insolvency (Bankruptcy)", the Bank of Russia decided to impose a three-month moratorium on meeting claims of creditors of PJSC NOTA-Bank. This decision is necessary to ensure equality in protecting rights of all creditors in the condition of the bank's insolvency. In compliance with the Federal Law "On the Insurance of Household Deposits with Russian Banks" the moratorium on meeting creditors' claims is an insured event. Payments to depositors of PJSC NOTA- Bank, including individual entrepreneurs, are to start not later than 14 days after the imposition of moratorium. The procedure for payment of insurance benefit will be determined by the state corporation Deposit Insurance Agency. The Bank of Russia will decide on other statutory measures, duration of activity of the provisional administration and the term of moratorium with regard to PJSC NOTA-Bank, taking into account the financial rehabilitation measures taken by its owners in cooperation with creditors. NOVOSIBIRSK: S&P Assigns 'BB+' Rating to RUB2BB Sr. Unsec. Bonds ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'BB+' long-term global scale issue credit rating and its 'ruAA+' Russia national scale rating to the RUB2 billion (about US$32 million) senior unsecured bond issued by the Russian city of Novosibirsk (BB+/Negative/--). The seven-year amortizing bond will have 28 coupons, with the first coupon rate at 11.86%. According to the redemption schedule, 40% of the bond is to be repaid in 2017, 5% in 2018, 15% in 2020, 35% in 2011, and the remaining 5% in 2022. The ratings on Novosibirsk are constrained by what S&P sees as Novosibirsk's relatively weak economy and Russia's volatile and unbalanced institutional framework, which leads S&P to assess the city's budgetary flexibility as weak. These constraints are mitigated by Novosibirsk's satisfactory management quality and reasonable cost control, in S&P's view, which results in average budgetary performance, adequate liquidity, low debt, and very low contingent liabilities. S&P's 'BB+' rating on the city is equal to its assessment of its stand-alone credit profile. OTP BANK RUSSIA: Fitch Affirms 'BB' LT Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has affirmed OTP Bank Russia's (OTPR) Long-term Issuer Default Rating (IDR) at 'BB' with a Stable Outlook and Viability Rating (VR) at 'b+'. A full list of rating actions is available at the end of this commentary. KEY RATING DRIVERS OTPR's Long- and Short-term IDRs, National Long-term Rating and Support Rating are driven by potential support, in case of need, from the parent bank, Hungarian OTP Bank Plc (OTPH). Fitch believes that the parent would have a high propensity to support OTPR in light of its majority (98%) ownership, high level of integration, reputational damage for the parent from a potential default at OTPR, and common branding. However, Fitch believes that the Russian subsidiary is unlikely to contribute to the group's results in the near future. The affirmation of the bank's VR at 'b+' reflects its focus on the overheated Russian consumer finance market, which is now suffering from weak asset quality, negative bottom line profitability and limited near-term recovery prospects. On the positive side, however, the VR reflects OTPR's so far adequate capitalization and healthy funding profile. OTPR's asset quality metrics deteriorated sharply in 1H15 as credit losses (defined as the increase in loans 90 days overdue during the period plus write-offs, divided by average performing loans) rose to 24% (annualized) in 1H15, from 15% in 2014 and 16% in 2013. Although the bank has tightened its underwriting standards and early warning indicators suggest reasonable credit quality metrics on newly generated loans, Fitch expects asset quality to remain weak in 2016 due to the worsening economic environment, a drop in borrowers' real disposable incomes, the increased cost of living and rising unemployment. OTPR's pre-impairment profit was equal to 11% of average loans in 1H15, squeezed by higher funding costs, and was insufficient to absorb the bank's credit losses. Bottom line losses in 1H15 resulted in the bank losing 12% of its regulatory capital. A gradual pick up of new lending in 2H15, and an expected gradual decrease in funding costs as deposits reprice, may help OTPR reduce the magnitude of losses (already achieved in June-August). However, Fitch does not expect the bank to return to sustainably profitable performance in the foreseeable future, as loan impairment charges are unlikely to moderate in the near term. Capitalization is adequate to date as expressed by a reasonable 16.1% Fitch Core Capital (FCC) ratio at end-1H15. OTPR managed to absorb considerable losses in 1H15 and still maintained adequate capital ratios by means of de-leveraging (loan book contracted 17%), but the capital position remains vulnerable to deterioration of the credit quality of new lending. The regulatory capital position (the regulatory total capital ratio equalled 13.7% at end-8M15) is weakened by higher risk-weights on high-yielding consumer finance loans. Funding and liquidity is a rating strength, as OTPR has limited refinancing needs in 1H15-2016 and its granular customer funding (80% of end-1H15 liabilities) is reasonably covered (25%) by the liquidity cushion. RATING SENSITIVITIES A rating action on OTPR's IDRs is possible if Fitch changes its view on OTPH's ability and propensity to support its Russian subsidiary. OTPR's VR could be downgraded if the bank does not manage to achieve meaningful asset quality and performance improvement and/or its capital position deteriorates. Upside potential in the current economic environment is limited. The rating actions are as follows: Long-term foreign currency IDR: affirmed at 'BB', Outlook Stable Short-term foreign currency IDR: affirmed at 'B' Long-term local currency IDR: affirmed at 'BB', Outlook Stable National Long-term rating: affirmed at 'AA-(rus)', Outlook Stable Support Rating: affirmed at '3' Viability Rating: affirmed at 'b+' * Fitch Says Tax Hike May Force Russian Oil Firms to Cut Drilling ----------------------------------------------------------------- The effective tax increase for Russian oil and gas producers in 2016 will reduce their operating cash flows and increase the need to cut capex further, for example by reducing drilling in mature provinces, Fitch Rating says. This could accelerate oil production declines at key brownfields. The adopted proposal is less radical than the original plan and will have no rating implications since most Russian players remain low-leveraged and Fitch's ratings of Russian oil and gas names are driven primarily by the sovereign rating. On October 8, the government announced an increase in the Mineral Extraction Tax (MET) on Gazprom (BBB-/Negative) by around RUB100 billion (USD1.7 billion) in 2016. It also said export duty on crude oil and oil products will be unchanged in 2016, rather than gradually falling to offset a hike in oil MET in 2015-2017. This will deprive Russian oil companies of around RUB200 billion (USD3.3 billion) next year. Fitch understands that the government intends to reduce the export duty in 2017. The decision seems to be a compromise between the Russian Ministry of Finance, which originally proposed to increase taxes by around RUB600 billion (USD10 billion), and Russian oil and gas majors, which strongly opposed the plan stating it would result in falling investments and sharply lower oil production. Higher MET on Gazprom should have no immediate credit implications, as its 2016 EBITDA would fall by only around 5% compared to our original expectations. Its leverage remains low among global peers. However, Gazprom may be forced to cut its 2016 capex program and possibly slow down its new pipeline projects due to this and other commercial and funding challenges (see "Nord Stream II Raises Gazprom's Commercial, Funding Risks", dated 21 September 2015). There will be no MET increase for independent gas producers, such as Novatek (BBB-/Negative); though they may be marginally affected as exporters of natural gas liquids. The impact on Russian oil producers will be more significant though not enough to trigger rating actions. Fitch estimates that most integrated oil companies will see their EBITDA fall by between 7% and 10% in the USD55/bbl (Brent) environment as a result of the measure. Companies with a lower share of exports and higher share of downstream, such as Bashneft (BB/Stable), Gazprom Neft (BBB-/Negative) and Lukoil (BBB-/Negative) will be less affected than Rosneft and Tatneft (BBB-/Negative), whose profits are more sensitive to changes in export duty. "We believe that the tax hike will most likely force Russian oil producers to make additional cuts to their capex budgets in 2016. In particular, they may further reduce production drilling at brownfields, mainly in Western Siberia. Some Russian majors already reported lower drilling volumes in 2015 (data from CDU TEK show a 15 drop % in 1H15 yoy for Lukoil and a 7% drop for Gazprom Neft). Thus, the move may accelerate brownfield production declines (see "Russia's Brownfield Oil Output Faces Further Declines", dated 4 September 2014). Oil majors may also phase out greenfield developments that do not qualify for export duty breaks. Together, these factors could reverse Russia's oil production growth as early as in 2016." "Further tax increases remain a risk, especially if oil prices stay at the current level for a long period of time, or fall. This is one reason we cap the ratings of Russian oil and gas producers at the sovereign level. However, higher overall taxation is less likely in a gradual oil recovery scenario, which is our base case." ===================== S W I T Z E R L A N D ===================== TAURUS CMBS 2007-1: S&P Lowers Rating on Class A2 Notes to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on Taurus CMBS (Pan-Europe) 2007-1 Ltd.'s class A1 and A2 notes. At the same time, S&P has affirmed its ratings on the class B, C, D, E, and F notes. On the August 2015 interest payment date (IPD), all classes of notes experienced interest shortfalls. The transaction continues to experience cash flow disruptions primarily due to high prior- ranking transaction costs, together with spread compression between the loan and the notes, which have resulted in insufficient funds to meet all interest payments due to the notes. S&P believes that, absent of recoveries, this transaction will likely remain vulnerable to future interest shortfalls, given the above-mentioned factors that limit the issuer's capacity to pay interest in a timely manner. S&P's ratings in Taurus CMBS (Pan-Europe) 2007-1 address the timely payment of interest and the repayment of principal no later than legal final maturity in February 2020. The class A1 notes have now experienced two consecutive quarters of interest shortfalls in May 2015 and August 2015. S&P has not lowered to 'D (sf)' its rating on the class A1 notes because its analysis shows that the interest shortfall could be repaid in full from recoveries before the legal final maturity date. As the class A1 notes' creditworthiness has weakened in S&P's opinion, it has lowered to 'CCC (sf)' from 'B (sf)' its rating on this class of notes. S&P considers that this class of notes faces at least a one-in-two likelihood of default if the interest shortfall persists. The class A2 notes have consistently experienced interest shortfalls. The shortfalls are likely to continue in future quarters, in S&P's opinion. S&P has therefore lowered to 'D (sf)' from 'CCC (sf)' its rating on the class A2 notes in line with its criteria, "Timeliness Of Payments: Grace Periods, Guarantees, And Use Of 'D' And 'SD' Ratings," published on Oct. 24, 2013. S&P has affirmed its 'D (sf)' ratings on the class B, C, D, E, and F notes because they continue to experience interest shortfalls. Taurus CMBS (Pan-Europe) 2007-1 is a pan-European conduit transaction that closed in August 2007. Initially backed by 13 loans, the transaction is now backed by two loans secured on 27 commercial properties in Germany and France. RATINGS LIST Taurus CMBS (Pan-Europe) 2007-1 Ltd. CHF.1 mil, EUR549.95 mil commercial mortgage-backed floating-rate notes Ratings Class Identifier To From A1 XS0305732181 CCC (sf) B (sf) A2 XS0309194248 D (sf) CCC (sf) B XS0305744608 D (sf) D (sf) C XS0305745597 D (sf) D (sf) D XS0305746215 D (sf) D (sf) E XS0309195567 D (sf) D (sf) F XS0309195997 D (sf) D (sf) UBS CAPITAL: Moody's Reviews Ba2 Stock Rating for Upgrade --------------------------------------------------------- Moody's Investors Service has placed on review for upgrade the long-term ratings of UBS AG and affiliates, including the bank's long-term deposit rating of A1, its senior unsecured debt rating of A2, its standalone baseline credit assessment (BCA) of baa2, its counterparty risk assessment of A1(cr), and the Baa3 rating on the senior unsecured debt of UBS Group Funding (Jersey) Limited guaranteed by the bank's parent holding company, UBS Group AG. The bank's short term ratings and counterparty risk assessment of Prime-1 and Prime-1(cr), respectively, are unaffected by this action. RATINGS RATIONALE The review for upgrade was triggered by continued improvements in the bank's leverage ratio as well as recent improvements to the bank's profitability. While UBS's risk-based capital ratios have been the strongest amongst its peers for some time, the bank's leverage ratio has until recently been a relative weakness for the bank. However, increased retained earnings and the recent issuance of high-trigger contingent capital, together with reductions in the bank's balance sheet and leverage exposure, have boosted the bank's leverage ratio to a level more consistent with peers. Moody's believes that the bank's higher leverage ratios are likely to be sustained if, as expected, revisions to Swiss capital requirements later this year raise the bank's leverage ratio requirement. Profitability at UBS has also been a relative weakness over the last several years, as the bank has borne considerable costs related to litigation, restructuring charges, and the wind-down of its non-core and legacy portfolio. More recent profitability improvements reflect stronger revenue performance and more positive market conditions, but were also driven by fewer litigation charges, lower losses in the bank's non-core and legacy portfolio, and realized cost savings from efficiency initiatives, notwithstanding a continued high volume of restructuring charges. During its review, Moody's will focus on the trajectory of the bank's profitability improvements as well as the sustainability of those improvements, including the risk of additional litigation charges and the potential for further restructuring charges and costs related to compliance with regulatory initiatives. Moody's will also consider the trajectory for risk-weighted assets under various pending regulatory initiatives as well as the likely trend for the bank's balance sheet in order to assess the sustainability of the bank's current capital position and business mix. Finally, Moody's will assess the likelihood of future earnings volatility and the permanence of the changes made to the bank's risk management and culture since the financial crisis. UBS's ratings reflect the bank's superior global wealth management and domestic retail and corporate banking franchises, its strong liquidity profile, and its robust risk-based capital ratios. They also reflect the bank's still sizeable (albeit better risk- controlled) capital markets activities, the confidence sensitivity of its client base, the pressures on the bank's profitability and its relatively high historical earnings volatility, and weaknesses in risk management, governance and controls evidenced during the financial crisis. After the financial crisis the bank took steps earlier than most of its peers to significantly scale back some of its fixed income capital markets activities. The directional changes are credit positive, however the investment bank remains a significant source of earnings for the bank at roughly a quarter to a third of current profits, and while its risk taking activities have been constrained, the challenges of managing such a complex and opaque business remain. The bank also remains exposed to a sizeable Non-core and Legacy Portfolio, although as the portfolio is wound down it is expected to pose less risk for the firm. The principal methodology used in these ratings was Banks published in March 2015. These ratings were affected by the rating action: Issuer: UBS AG Adjusted Baseline Credit Assessment, Placed on Review for Possible Upgrade, currently baa2 Baseline Credit Assessment, Placed on Review for Possible Upgrade, currently baa2 Counterparty Risk Assessment, Placed on Review for Possible Upgrade, currently A1(cr) Issuer Rating (Foreign Currency), Placed on Review for Possible Upgrade, currently A2 stable Multiple Seniority Deposit Program (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A1/(P)Baa3 Multiple Seniority Medium-Term Note Program (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2/(P)Baa3 Subordinate Regular Bond/Debenture (Local Currency), Placed on Review for Possible Upgrade, currently Baa3 Senior Unsecured Medium-Term Note Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A2 Senior Unsecured Medium-Term Note Program (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2 Senior Unsecured Regular Bond/Debenture (Foreign Currency), Placed on Review for Possible Upgrade, currently A2 stable Deposit Rating (Foreign Currency), Placed on Review for Possible Upgrade, currently A1 stable Deposit Rating (Local Currency), Placed on Review for Possible Upgrade, currently A1 stable Senior Unsecured Shelf (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2 Issuer: Swiss Bank Corporation Backed Subordinate Regular Bond/Debenture (Foreign Currency), Placed on Review for Possible Upgrade, currently Baa3 Issuer: Swiss Bank Corporation, New York Branch Backed Subordinate Regular Bond/Debenture (Local Currency), Placed on Review for Possible Upgrade, currently Baa3 Issuer: UBS AG, Australian Branch Counterparty Risk Assessment, Placed on Review for Possible Upgrade, currently A1(cr) Multiple Seniority Medium-Term Note Program (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2/(P)Baa3 Multiple Seniority Medium-Term Note Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A2/(P)Baa3 Senior Unsecured Regular Bond/Debenture (Local Currency), Placed on Review for Possible Upgrade, currently A2 stable Issuer: UBS AG, Jersey Branch Counterparty Risk Assessment, Placed on Review for Possible Upgrade, currently A1(cr) Multiple Seniority Medium-Term Note Program (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2/(P)Baa3 Multiple Seniority Medium-Term Note Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A2/(P)Baa3 Subordinate Regular Bond/Debenture (Local Currency), Placed on Review for Possible Upgrade, currently Baa3 Senior Unsecured Medium-Term Note Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A2 Senior Unsecured Medium-Term Note Program (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2 Senior Unsecured Regular Bond/Debenture (Foreign Currency), Placed on Review for Possible Upgrade, currently A2 stable Senior Unsecured Shelf (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2 Issuer: UBS AG, London Branch Counterparty Risk Assessment, Placed on Review for Possible Upgrade, currently A1(cr) Multiple Seniority Medium-Term Note Program (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2/(P)Baa3 Senior Unsecured Medium-Term Note Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A2 Senior Unsecured Medium-Term Note Program (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)A2 Senior Unsecured Regular Bond/Debenture (Foreign Currency), Placed on Review for Possible Upgrade, currently A2 stable Senior Unsecured Regular Bond/Debenture (Local Currency), Placed on Review for Possible Upgrade, currently A2 stable Issuer: UBS AG, New York Branch Counterparty Risk Assessment, Placed on Review for Possible Upgrade, currently A1(cr) Multiple Seniority Deposit Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A1/(P)Baa3 Multiple Seniority Medium-Term Note Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A2/(P)Baa3 Issuer: UBS AG, Stamford Branch Counterparty Risk Assessment, Placed on Review for Possible Upgrade, currently A1(cr) Multiple Seniority Deposit Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A1/(P)Baa3 Multiple Seniority Medium-Term Note Program (Local Currency), Placed on Review for Possible Upgrade, currently (P)A2/(P)Baa3 Subordinate Regular Bond/Debenture (Local Currency), Placed on Review for Possible Upgrade, currently Baa3 Senior Unsecured Regular Bond/Debenture (Local Currency), Placed on Review for Possible Upgrade, currently A2 stable Issuer: UBS Americas, Inc. Backed Issuer Rating, Placed on Review for Possible Upgrade, currently A2 stable Backed Senior Unsecured Regular Bond/Debenture (Local Currency), Placed on Review for Possible Upgrade, currently A2 stable Backed Senior Unsecured Shelf (Local Currency), Placed on Review for Possible Upgrade, currently (P)A2 Issuer: UBS Capital Securities (Jersey) LTD Backed Pref. Stock Non-cumulative Preferred Stock (Foreign Currency), Placed on Review for Possible Upgrade, currently Ba2 (hyb) Issuer: UBS Finance (Curacao) N.V. Backed Senior Unsecured Regular Bond/Debenture (Foreign Currency), Placed on Review for Possible Upgrade, currently A2 stable Issuer: UBS Group Funding (Jersey) Limited Backed Senior Unsecured Regular Bond/Debenture (Foreign Currency), Placed on Review for Possible Upgrade, currently Baa3 stable Issuer: UBS Limited Issuer Rating, Placed on Review for Possible Upgrade, currently A2 stable Issuer Rating (Local Currency), Placed on Review for Possible Upgrade, currently A2 stable Issuer: UBS Preferred Funding Company LLC IV Backed Pref. Stock Non-cumulative Shelf (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)Ba2 Issuer: UBS Preferred Funding Company LLC V Backed Pref. Stock Non-cumulative Shelf (Foreign Currency), Placed on Review for Possible Upgrade, currently (P)Ba2 Issuer: UBS Preferred Funding Trust IV Backed Pref. Stock Non-cumulative Preferred Stock (Local Currency), Placed on Review for Possible Upgrade, currently Ba2 (hyb) Backed Pref. Stock Non-cumulative Shelf (Local Currency), Placed on Review for Possible Upgrade, currently (P)Ba2 Issuer: UBS Preferred Funding Trust V Backed Pref. Stock Non-cumulative Preferred Stock (Local Currency), Placed on Review for Possible Upgrade, currently Ba2 (hyb) Backed Pref. Stock Non-cumulative Shelf (Local Currency), Placed on Review for Possible Upgrade, currently (P)Ba2 =========================== U N I T E D K I N G D O M =========================== ANDOVER BOWLING: Venue Goes Into Administration ----------------------------------------------- The breeze reports that a local bowling and entertainment venue in Andover's been forced into administration after a lack of funding. Breakers originally re-opened in November 2014 after the local community rallied round to raise the GBP160,000 needed, according to the breeze. But talks with local companies about it's future have since been unsuccessful, the report notes. The report relays that the administrators have said the following: "Nicola Layland and Carl Faulds of Portland Business Support and Advice in Fareham, Hampshire were appointed Joint Administrators of Breakers Community Interest Company on October 8, 2015. The company was set up a year ago as a 'not for profit' organisation to offer entertainment for people of all ages, sexes and abilities, to bring the community together in a convenient and safe environment." "The directors planned to work alongside local charities including Andover Mind, The Junction, Neighbourcare, VIP's and PAPYRUS to improve the lives of the youth of Andover. Alongside the entertainment facilities, including ten pin bowling alleys, a cafÇ and music, the intention was to provide somewhere for the youth to go where they could be signposted to deal with personal challenges," the administrators said, the report relays. "Despite the initial idea being met positively, the company has suffered from a lack of funding, which has meant that debts have not been paid in full, and in particular the company has not been able to pay Her Majesty Revenue and Custom on time. Due to the lack of available funding the directors of the company have been trying to find a buyer who could invest more money and take the company forward," administrators said, the report relays. "While there has been interest, late last week the interested party advised that they would be unable to buy the company in its current form, in part due to its debts. The directors immediately took advice and concluded that the company did not have sufficient funds to continue to trade and therefore took the decision to cease to trade and place the company into administration," the administrators added. Nicola Layland from Portland said: "We have already had expressions of interest from several interested parties in buying the business. We are therefore hopeful that a deal could be done to save the business and ensure this valuable facility continues for the community," the report adds. FORWARD LIFE: Faces Fraud Investigation Amid CVA ------------------------------------------------ South Wales Evening Post reports that a boss at Forward Life has called in the police to investigate an alleged fraud and theft. The man, who asked the Post not to name him, works at Forward Life, the Post discloses. The company was until recently based at Sun Alliance House, St Helen's Road, Swansea, but has now moved to Baglan, the Post notes. Angry former staff have contacted the Post to say they are still owed money in unpaid wages, forcing some to take out payday loans to pay the rent, the Post relays. The senior figure at Forward Life, as cited by the Post, said the company was still trading but had gone into a company voluntary arrangement, which means a firm can pay creditors over a fixed period but continue to operate. He indicated that staff would be paid, and that the alternative was for the company to go into administration, meaning everyone would lose out, the Post relays. According to the Post, the man said the company handling Forward Life's CVA, Swansea-based McAlister & Co, would be writing to employees to update them. But staff told the Post that they walked out after not receiving wages, and claimed they had been repeatedly fobbed off about when they would be paid. Some have sought advice from arbitration service Acas, and Citizens Advice, the Post states. Forward Life is a life insurance company. INFINIS ENERGY: Moody's Lowers CFR to B1, Outlook Stable -------------------------------------------------------- Moody's Investors Service has downgraded to B1 from Ba3 the corporate family rating of Infinis Energy Plc. Concurrently, Moody's has downgraded Infinis's probability of default rating to Ba3-PD from Ba2-PD. Finally, Moody's has downgraded to B1 from Ba3 the rating on the GBP350 million senior unsecured notes due 2019 issued by the group's landfill gas generation business, Infinis Plc. This concludes Moody's review of the ratings initiated on July 20, 2015 following the decision by the UK government to remove the exemption for renewable power generators from the Climate Change Levy (CCL) tax. The outlook on the ratings is stable. RATINGS RATIONALE "The rating action reflects that we expect Infinis's leverage to remain higher for longer in the context of a soft power price environment and following the negative consequences of the recent Summer Budget" said Philip Cope, a Moody's Analyst and lead analyst for Infinis. "Mitigating measures that the group could announce by the time of its interim results in November are not expected to fully compensate for the loss of revenue". The downgrade follows the UK government's July 2015 decision, implemented in August, to remove the exemption of Renewable Source Energy from the CCL, a tax on energy use. Moody's considers the change to be credit negative for all renewable electricity generators, as discussed in the July 2015 publication "UK's Removal of Exemption from Energy Levy is Credit Negative for Renewable Generators". The group has initiated a judicial review, together with power generator Drax (unrated), against the short notice given by the government; however Moody's considers that the amounts that would be involved are unlikely to fully compensate for the degradation of the group's long-term prospects. Since the implementation of the government's decision, renewable electricity generators including Infinis have lost the ability to sell Levy Exemption Certificates (LECs) to energy users, resulting in the loss of around GBP5 per megawatt hour (MWh) generated. The rating agency considers that the loss of future earnings from the sale of LECs compounds the weakening impact of lower power prices on Infinis's credit profile. Approximately half of Infinis's revenues are earned from the 'brown' power price and while the company's contracting strategy provides it with short-term protection against volatility in the power price, Moody's expects that it will not protect the company against a persistently soft power price environment. The agency expects that the UK power price will remain low through 2020 with year average wholesale electricity prices of GBP42-46/MWh if gas prices remain stable, as discussed in the recent publication "In Britain, Falling Demand and New Capacity Will Squeeze Coal and Gas". Moody's considers positively the company's strategy to invest in onshore wind assets, which will reduce its reliance on a declining landfill gas resource. However, with the company currently building out 135 MW of new wind capacity, much of which is debt funded, this has compounded the short-term impact on leverage of the expected fall in earnings. Infinis announced in August 2015 that it was considering how changes in government policy in support of renewable generation would affect the strategy of the Group to deliver shareholder value with possible changes to be communicated to the markets by the time of its interim results, in November. While Moody's assessment of the group's ratings reflects the assumption that the group will take credit positive measures, the rating agency considers unlikely that they will be sufficient to maintain credit quality at a level commensurate with a Ba3 rating, with gearing of the Infinis Energy Plc group measured by debt to EBITDA likely to remain above 5.0x over the period to 2018. RATIONALE FOR THE STABLE OUTLOOK The stable outlook reflects Moody's expectation that Infinis will act to support credit quality and has flexibility to do so at a level consistent with the assigned ratings. WHAT COULD CHANGE THE RATING UP/DOWN Moody's could upgrade the ratings if the group was to deleverage or if power prices were to recover from their current level, improving financial performance and allowing debt to EBITDA to fall durably below 5.0x, and funds from operations (FFO) to debt at least in the low teens, in percentage terms, on a sustainable basis. Considering the company's public strategy focused on real dividend growth and capital expenditure, significant deleveraging appears unlikely at the moment. Conversely, Moody's could downgrade the ratings were debt to EBITDA to increase above 6.0x, or FFO to debt to fall on a consistent basis below 10%. Infinis Energy Plc, based in Northampton, UK, is a holding company for a FTSE 250-listed group focused on electricity generation from renewable sources. The company remains majority owned by funds managed by private equity group Terra Firma. As at March 31, 2015, the Infinis Energy Plc group had 589 megawatts (MW) of generation capacity. The landfill gas business accounts for 315MW (53%) while the onshore wind business accounts for 274MW (or 47%). NORTHAMPTON TOWN: Fear of Administration Grows ---------------------------------------------- Northampton Herald & Post reports that fear of administration grows as Northampton Town's supporters' trust makes plea to mystery buyers. Northampton Town's supporters' trust has called on a new set of mystery buyers reportedly poised to buy the Cobblers to get in touch with them as soon as possible, amid fears of the club entering administration, according to Northampton Herald & Post. Five months of speculation ended when the Indian consortium said to have been close to taking over the club announced it had pulled out of the deal, the report notes. But shortly afterwards, chairman David Cardoza revealed he was not surprised the consortium had withdrawn and said he was now in the 'advanced stages' of talks with another mystery set of buyers, the report relates. The news comes just days before the club has to pay back a GBP10.25 million loan -- being used to redevelop Sixfields stadium -- to Northampton Borough Council, the report relays. And if the money isn't paid, the local authority could take legal action, the report discloses. Meanwhile, it is also reported that there is petition in the high court to wind up County Developments Northampton Limited (CDNL), the company owned by Mr. Cardoza which is working on the development around the club, the report relays. With so much uncertainty surrounding the club's finances, fans are worried Northampton Town could find itself in administration -- a worry which is shared by the club's supporters' trust, the report relays. Northampton Herald & Post notes that the spokesman for Northampton Town Football Club Supporters' Trust, James Averill, told the Northants Herald and Post: "I don't think we can rule it out (administration). "The council has said it is not their intention to put us into administration, but we can't account for every decision that could be made," Mr. Averill said, the report notes. "As the courts have said, there is a winding up order against County Developments Northampton Ltd (the group overseeing the redevelopment) by the Buckingham Group (the firm employed to build the stand) -- there is a chance it could be like a deck of cards - - if one goes they all go. If CDNL go into administration then that could have a big impact on the club," Mr. Averill added. "It might not happen, it might. Again, we are in that frustrating position where we have to wait and see what cards are dealt. It's extremely frustrating for fans and for us as we can't say much more on what is happening," Mr. Averill said, the report relays Hoping for a positive outcome, Mr. Averill said he is now urging the mystery set of buyers to reveal themselves to the Trust as soon as possible, the report notes. "We would welcome these guys -- and in fact anyone else showing an interest in the club -- to get in touch with the Trust, so we can get the best outcome for the supports, players, management and staff," Mr. Averill said, the report notes. "It's a big club at this level and it has got potential to be even bigger. It is an attractive proposition I think for the people. What remains to be seen is whether they purchase us as we are, or whether they would wait to buy us when we are in administration as a cheaper alternative - it's difficult to say," Mr. Averill added. Asked for the Trust's message to frustrated Cobblers fans, Mr. Averill said: "Keep getting behind the players. That's as much as they can do at the moment. It's the sad reality of the situation that the people who care most about the club have the least to say at the moment over what happens to it. So we would urge the fans to stick in there, the report notes. "The Trust is aiming for, hopefully, a positive outcome out of all of this. We will be working our absolute hardest to make sure that happens. I sincerely hope that everything ends well with some people coming in who care about the football club and want to invest in the football side of things as well as the property deal that is up for grabs," Mr. Averill added. SSI UK: Asset Sale Talk Continues, Unions Call for Pension Probe ---------------------------------------------------------------- FT.com reports that the Redcar steelworks in northeast England has been handed a partial reprieve after its liquidator secured an agreement that will save a vital part of the stricken industrial complex from ruin -- for the next few days at least. FT.com relates that after days of desperate talks with suppliers, unions and politicians, the Insolvency Service said on October 9 that enough coal had been bought to keep the Redcar coke ovens operational over the weekend. Some 650 staff are being kept on site to maintain the ovens and keep the site safe, said a spokesperson for the government agency, the report relays. "The Official Receiver is continuing to talk with interested parties about the future use of the site [and] carrying out his duties as liquidator, including dealing with the assets of the company," they added. While this does not mean that production of steel will recommence, it offers a glimmer of hope the plant could one day be resurrected if steel prices recover, according to FT.com. FT.com says the ovens are crucial to any prospect of the mothballed site, which houses Europe's second-biggest blast furnace, being preserved in a state capable of restarting. But they will crack and collapse if not kept running, which would make the Official Receiver's task of selling off assets to repay creditors even more difficult. A long heritage of iron and steelmaking in the Teesside area was plunged into uncertainty last month when the Thai parent group of the former owner of the works, Sahaviriya Steel Industries, defaulted on loans worth around GBP433 million, FT.com recalls. According to FT.com, SSI UK sent redundancy notices to 1,700 workers and left a trail of debt with tens of millions of pounds unpaid to local suppliers. FT.com notes that the company's failure shone a spotlight on the ailing UK steel sector, which has been hammered by the plunge in global prices. British steelmakers said this is compounded by cheap imports as well as the UK's high energy costs, environmental taxes and business rates. Hargreaves, a Durham-based coal miner which has been in discussions with the other stakeholders, this week dismissed reports that it was considering stepping in to maintain the blast furnace, the report adds. Pension Probe Meanwhile, Alan Jones at Mirror News reports that a union is demanding an urgent probe into allegations steel firm SSI missed pension payments before its UK arm went into liquidation. Workers at Redcar in Teesside, where 1,700 jobs are going, claim the Thai company deducted cash from their pay but it has not gone to retirement funds, according to Mirror News. The report notes that Unite's Harish Patel said: "Unite will use all available avenues to ensure members are not short changed." "We need an urgent investigation and call on the Government to stop standing on the sidelines. One would have thought that ministers and officials would have run the rule over the books when making their decision not to intervene to save the plant. The business secretary now needs to step in and ensure workers aren't left high dry and robbed of their futures," the report quoted Mr. Patel as saying. An Insolvency Service spokesman said: "The Redundancy Payment Service, a function of the Insolvency Service, can pay both employee pension contributions and employer contributions, within specified legal limits, the report relays. "Claims are lodged by pension trustees, employees do not need to apply themselves. The cost of these payments is met from the National Insurance Fund and becomes a debt in the insolvency," the spokesman added. About SSI UK SSI UK is Britain's second largest steelmaker. SSI UK is a subsidiary of Thailand's largest steelmaker Sahaviriya Steel Industries. As reported in the Troubled Company Reporter-Asia on Oct. 5, 2015, The Telegraph said SSI UK has gone into liquidation days after it announced it was closing one of Britain's biggest steelmakers in Redcar, resulting in 1,700 job losses. According to The Telegraph, the company had its liquidation application granted by a judge in Manchester on Oct. 2. On October 2, David Kelly, Toby Underwood and Ian Green from PricewaterhouseCoopers were appointed as special managers and continue to assist and support the Official Receiver in the discharge of his duties. * Low Interest Rate to Pressure EU Insurance, Moody's Says ---------------------------------------------------------- The European insurance sector remains under pressure as a result of the low interest rate environment, according to Moody's Investors Service. Low interest rates, coupled with legislative interventions are generally the main drivers for the negative outlooks the rating agency has assigned to a number of European life markets. "In addition to interest rates, the other key risk for European Insurance is legislative and regulatory intervention, especially in the UK and Dutch life sectors", said Dominic Simpson, Moody's Vice President and Senior Credit Officer. Conversely, Moody's has a more stable outlook for P&C writers vis- Ö-vis life insurers. Pricing trends in European P&C remain generally flat, albeit with some pressure particular in the commercial lines. Reserve releases remain positive, reflecting the low inflation period, although Moody's expects a lower level of reserves releases in the future. =============== X X X X X X X X =============== * S&P Takes Rating Actions on 12 European Synthetic CDO Tranches ---------------------------------------------------------------- Standard & Poor's Ratings Services took various credit rating actions on 12 European synthetic collateralized debt obligation (CDO) tranches. Specifically, S&P has: -- Raised and removed from CreditWatch positive its ratings on two tranches in two corporate-backed European synthetic CDO transactions; -- Affirmed and removed from CreditWatch negative its ratings on nine tranches in one synthetic CDO transaction backed by a portfolio of loans to corporates; and -- Lowered its rating on one tranche in one corporate-backed European synthetic CDO transaction. The rating actions are part of S&P's review of various European synthetic CDOs. The actions reflect, among other things, the effect of recent rating migration within reference portfolios and recent credit events on referenced obligations. S&P has used its SROC (synthetic rated overcollateralization; see "What Is SROC?" below) tool to surveil its ratings on these synthetic CDOs. WHERE S&P HAS RAISED ITS RATINGS S&P has raised its ratings to the level at which SROC exceeds 100% and meets its minimum cushion requirement. WHERE S&P HAS AFFIRMED ITS RATINGS S&P has affirmed its ratings on those tranches for which credit enhancement is, in S&P's opinion, still at a level commensurate with their current ratings. WHERE S&P HAS LOWERED ITS RATINGS TO 'D' S&P has lowered is ratings to 'D' where losses from credit events in the underlying portfolio exceeded the available credit enhancement, which caused the rated notes to incur an interest shortfall or principal losses. ANALYSIS The rating actions follow the application of S&P's relevant criteria. S&P has used our CDO Evaluator model 6.3 to determine the amount of net losses in each portfolio that S&P expects to occur in each rating scenario. S&P has also applied its top obligor and industry tests. WHAT IS SROC? One of the main steps in S&P's rating analysis is the review of the credit quality of the portfolio referenced assets. SROC is one of the tools S&P uses when surveilling its ratings on synthetic CDO tranches with reference portfolios. SROC is a measure of the degree by which the credit enhancement (or attachment point) of a tranche exceeds the stressed loss rate assumed for a given rating scenario. SROC helps capture what S&P considers to be the major influences on portfolio performance: Credit events, asset rating migration, asset amortization, and time to maturity. It is a comparable measure across different tranches of the same rating. ********* 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. 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, and Peter A. Chapman, Editors. Copyright 2015. 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 202-362-8552. * * * End of Transmission * * *