/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/151112.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 Thursday, November 12, 2015, Vol. 16, No. 224 Headlines A Z E R B A I J A N AZERBAIJAN RAILWAYS: S&P Reinstates 'BB+' CCR; Outlook Negative C Z E C H R E P U B L I C NEW WORLD: S&P Lowers CCR to 'CCC', Outlook Negative G R E E C E ALPHA BANK: Issuer Substitution No Impact on Moody's Ratings GREECE: Aid Payment Delayed Following Dispute with EU Lenders H U N G A R Y PAPAI HUS: Declared Company of Elevated Strategic Importance K A Z A K H S T A N ARAL PETROLEUM: To Pursue Kazakh Rehabilitation Procedures N E T H E R L A N D S FAXTOR ABS 2003-1: Moody's Affirms Caa3 Rating on 2 Note Classes HARBOURMASTER PRO-RATA: Fitch Affirms 'Bsf' Rating on Cl. B2 Debt JUBILEE CDO VII: Moody's Affirms Ba3 Rating on Class E Notes JUBILEE CDO I-R: S&P Raises Rating on Class E Notes to B+ STORK TECHNICAL: S&P Raises Corporate Credit Rating to 'B' R U S S I A BALTINVESTBANK: Moody's Lowers LT Deposit Rating to 'B3.ru' BALTINVESTBANK: Moody's Lowers Long-Term Deposit Ratings to Caa2 KAMA RE: Placed Under Provisional Administration TOR CREDIT: Placed Under Provisional Administration U K R A I N E BANK UKRAINIAN: Deposit Guarantee Fund Extends Liquidation UKRAINE: Bondholder Group Rejects Terms of Kiev's Debt Offer U N I T E D K I N G D O M DECO 6 - UK: S&P Lowers Rating on Class A2 Notes to CCC- RA ROBERTS: Bought Out of Administration by Complete Office SANTANDER ASSET: S&P Maintains 'BB' Rating on CreditWatch Neg. * UK: A Third of Care Homes Face Insolvency, Company Watch Says X X X X X X X X * Moody's Predicts Slow Global Growth for Another 2 Years * Fitch Says EU Credit Investors Bearish on Emerging Markets ********* =================== A Z E R B A I J A N =================== AZERBAIJAN RAILWAYS: S&P Reinstates 'BB+' CCR; Outlook Negative --------------------------------------------------------------- Standard & Poor's Ratings Services reinstated its 'BB+' long-term corporate credit rating on state-owned railway operator Azerbaijan Railways CJSC (ADY). The outlook is negative. S&P suspended the rating on July 31, 2015, due to a lack of sufficient information on financial and operating performance. The reinstatement follows S&P's receipt of information from ADY that S&P considers of sufficient quality on its financial and operating performance and prospects. S&P's rating on ADY is based on S&P's assessment of the company's 'bb-' stand-alone credit profile (SACP) and on S&P's opinion that there is a "very high" likelihood that the government of the Republic of Azerbaijan (BBB-/Negative/A-3) would provide timely and sufficient extraordinary government support to ADY in the event of financial distress. In accordance with S&P's criteria for government-related entities (GREs), it bases its view of a "very high" likelihood of extraordinary government support on S&P's assessment of ADY's: -- "Very important" role for the Azerbaijani government, in light of ADY's monopoly position as the owner and manager of the national rail infrastructure and rolling stock. In S&P's view, ADY plays a key role in implementing Azerbaijan's infrastructure development plan, which S&P understands is one of the government's priorities. -- "Very strong" link with the government of Azerbaijan, given the state's 100% ownership of ADY; the government's role in appointing the company's senior management and its involvement in strategic decision taking; and -- S&P's understanding that ADY will not be privatized in the medium term. S&P's assessment of the company's SACP at 'bb-' is one notch lower than the SACP at the time S&P suspended the rating. S&P's downward revision of the SACP is due to its assessment that ADY's financial risk profile has weakened to "intermediate" from "minimal." This revision reflects S&P's expectation that the company's funds from operations (FFO) to debt will fall to less than 45% and FFO cash interest coverage will decline to below 9.0x by year-end 2015, primarily due to weaker operating performance and the depreciation of Azerbaijani manat (AZN). The manat lost about one-quarter of its value after devaluation in February 2015, which inflated ADY's mainly U.S. dollar-nominated debt. Additionally, S&P estimates that transportation volumes have fallen by up to 40% in the first half of 2015, which translates into a broadly similar decline in EBITDA. ADY's SACP also reflects uncertainties related to the company's governance given the recent management changes and the lack of transparency and information disclosure in the past that ultimately led S&P to suspend the rating. As a result, S&P revised its assessment of ADY's management and governance to "weak" from "fair." ADY's business risk profile continues to reflect the relatively small area it serves in a somewhat weak national economy (compared with some Western European rated peers') and what S&P views as significant competition from other modes of transportation, in particular pipelines and road traffic. S&P also takes into account ADY's limited route network; reliance on a commodity type of freight; and what S&P views as an opaque regulatory, legal, and political framework that lacks transparency and predictability. These weaknesses are somewhat supported by ADY's key position in the Transport Corridor Europe-Caucasus-Asia (TRACECA) and its monopoly position within Azerbaijan. ADY is the only railroad operator in the country, controlling both infrastructure and rolling stock. S&P also views ADY's ability to adjust tariffs as supportive for S&P's rating. The negative outlook on ADY reflects that on the Azerbaijan, its sole shareholder. The outlook also reflects the risk that ADY's operating performance will continue to weaken in the next 12 months, triggered by declining cargo volumes and resilient costs. S&P also sees a risk of higher leverage, which could materialize if the Azerbaijani manat were to experience another wave of depreciation or if the government were to decide that the company can tolerate higher leverage when designing its new strategy later this year. In accordance with S&P's criteria for rating GREs, it would likely lower the rating on ADY if S&P was to lower the sovereign rating on Azerbaijan. S&P would also lower its rating if it assess that ADY's 'bb-' SACP had weakened to 'b+' or lower. This could occur if the company's operating performance does not stabilize or its financial policy changes and the company finances a significant part of its capex program with external funds, which would result in S&P's FFO to debt ratio declining to below 30% on a prolonged basis. S&P could also take a negative rating action if ongoing liquidity support from the Azerbaijani government is not as timely as we currently anticipate and if S&P estimates that existing liquidity sources do not cover upcoming debt maturities and minimum capex requirements. S&P might revise the outlook on ADY to stable if it revises the outlook on the sovereign rating to stable. S&P could also revise the outlook to stable if operating performance and leverage remain commensurate with S&P's current 'bb-' SACP. =========================== C Z E C H R E P U B L I C =========================== NEW WORLD: S&P Lowers CCR to 'CCC', Outlook Negative ---------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Czech coal miner New World Resources N.V. (NWR) to 'CCC' from 'CCC+'. The outlook is negative. At the same time, S&P lowered its issue rating on NWR's EUR300 million senior secured notes due 2020 to 'CCC' from 'CCC+'. The downgrade reflects continued negative operating cash generation and therefore gradual deterioration in the liquidity position over the past year. S&P believes low metallurgical and thermal coal prices will continue to weigh on NWR's profits and cash flows, as S&P do not expect any marked improvement in market dynamics in the coming quarters. Unless coal prices recover materially or an unforeseen positive development materially changes the company's circumstances, S&P believes the company could run out of cash as early as second-quarter 2016. As of end-June 2015, the group's coking coal production for the remainder of the year was still 25% exposed to market prices, and 100% exposed for 2016. Coking coal should represent about 60% of NWR's total sales. Since the beginning of the year, hard coking coal prices have dropped about 25%, and thermal coal prices have dropped about 17%. S&P therefore continues to forecast neutral to slightly negative EBITDA for 2015, turning materially negative in 2016, despite management's ongoing cost-cutting initiatives. These include site reorganization, restructuring, overhead reductions, and product mix improvements. In addition, the company has already cut capital expenditure (capex) to a minimum, which S&P expects to be EUR30 million-EUR40 million in 2015. S&P takes into account that the falling price environment, together with factoring of receivables -- provided that programs remain in place -- and expected improvement in payables management, could help working capital requirements in the coming quarters. Despite these cash-saving measures, S&P forecasts deepening negative free operating cash flow from early 2016. Key structural aspects of NWR's performance include its relatively high unit cash cost of mining and high maintenance capex, making it barely sustainable in a difficult market environment, reflected in a "vulnerable" business risk profile, as defined in S&P's methodology. The negative outlook reflects that, in the absence of material positive developments in the company's circumstances, it is likely to default on its debt obligations in the coming 12 months. In S&P's view, NWR could run out of cash as early as second- quarter 2016, unless coal prices recover materially or an unforeseen positive development materially changes the company's circumstances. A stabilization of NWR's credit profile would require a material rebound in the coal market, bringing free cash flow back to breakeven, or some form of external liquidity support. =========== G R E E C E =========== ALPHA BANK: Issuer Substitution No Impact on Moody's Ratings ------------------------------------------------------------ Moody's Investors Service announced that Alpha Bank AE's proposal to substitute the issuing entity of the below mentioned senior unsecured and subordinated notes (currently issued by Alpha Credit Group plc) with Alpha Bank AE (deposit rating Caa3 negative, baseline credit assessment ca) would not, in and of itself and at this time, result in a withdrawal of the notes' C ratings. In addition, the C senior unsecured and subordinated debt ratings are already at the lowest level on Moody's rating scale and, therefore, no downgrade of the ratings is possible. Although the notes were originally issued by Alpha Credit Group plc, the amendment would permit Alpha Bank AE to substitute Alpha Credit Group plc as the issuer of eleven senior unsecured notes (ISIN:XS0244535968 due February 2021; ISIN:XS0246885775 due March 2021; ISIN:XS0286484646 due February 2027; ISIN:XS0285806906 due March 2017; ISIN:XS0738953594 due February 2017; ISIN:XS0777923177 due May 2017; ISIN:XS0795391043 due June 2022; ISIN:XS0926021923 due May 2018; ISIN:XS1006310590 due December 2028; ISIN:XS1078807390 due June 2017; ISIN:XS1102005797 due August 2024) and two subordinated notes (ISN: XS0290781490 due March 2017; ISN: XS0284930889 due February 2017), which are currently guaranteed by Alpha Bank AE. RATINGS RATIONALE Moody's has determined that the amendment, in and of itself and at this time, will not result in the withdrawal of the senior unsecured and subordinated debt ratings of C currently assigned to these notes issued by Alpha Credit Group plc, which is a funding subsidiary of Alpha Bank AE. As the C senior unsecured and subordinated debt ratings are already at the lowest level on Moody's rating scale, no downgrade of the ratings is possible. However, Moody's opinion addresses only the credit impact associated with the proposed amendment, and Moody's is not expressing any opinion as to whether the amendment has, or could have, other non-credit related effects that may have a detrimental impact on the interests of holders of rated obligations and/or counterparties. The rating agency said that it will continue to monitor these senior unsecured and subordinated notes to be transferred, and will accordingly express its views on any future developments involving these notes. GREECE: Aid Payment Delayed Following Dispute with EU Lenders ------------------------------------------------------------- Peter Spiegel at The Financial Times reports that Greece and its European creditors have run into a dispute over Athens' new EUR86 billion bailout, forcing a delay in a EUR2 billion aid payment and raising questions over whether the government is returning to the brinkmanship tactics that embittered relations with Brussels earlier this year. Eurozone finance ministers were scheduled to sign off the EUR2 billion tranche at a Nov. 9 meeting in Brussels, but ministers said a stand-off over repossession protections for homeowners would delay the payment for at least a week, and potentially longer, the FT relates. "The EUR2 billion will only be paid out once [bailout monitors] give the green light and say that all agreed actions have been carried out and have been implemented. That still has not happened," the FT quotes Jeroen Dijsselbloem, the Dutch finance minister, who chaired the meeting, as saying. The need to reach a deal has an added urgency because it is tied to the release of an already approved EUR10 billion in aid earmarked for recapitalizing Greece's banks, a process that must be completed by next month or depositors would be at risk of having their accounts seized to help pay for the bank rescue, the FT notes. Finance ministers gave Athens a week to reach a compromise, the FT discloses. According to the FT, senior officials said the two sides are at odds over how far Greece must go in scrapping current foreclosure protections. Creditors are demanding a weaker safeguards, arguing that many mortgage arrears are "strategic defaults" by borrowers who could afford to pay but are seeking delays in Greece's slow-moving legal system, the FT states. ============= H U N G A R Y ============= PAPAI HUS: Declared Company of Elevated Strategic Importance ------------------------------------------------------------ MTI-Econews, citing a decree published in the latest issue of the official gazette Magyar Kozlony, reports that Hungary's government has declared Papai Hus a company of "elevated strategic importance". Companies that are declared as such get special treatment in bankruptcy procedures, MTI-Econews notes. Last week, the local council of Papa, which owns Papai Hus, decided to put the company under liquidation, MTI-Econews recounts. Papai Hus reached a bankruptcy agreement with its creditors in June of 2014, but the company's reserves have been exhausted, MTI-Econews relates. Papai Hus is a Hungarian meat processing company. =================== K A Z A K H S T A N =================== ARAL PETROLEUM: To Pursue Kazakh Rehabilitation Procedures ---------------------------------------------------------- Caspian Energy Inc. on Nov. 9 disclosed that, after careful consideration of all available alternatives, the board of directors of Caspian has determined that it is in the best interests of Caspian and its wholly-owned subsidiary, Aral Petroleum Capital LLP, to authorize Aral to seek protection from its trade creditors under the Law of the Republic of Kazakhstan On Rehabilitation and Bankruptcy through implementation of rehabilitation procedures. As noted in a news release dated August 4, 2015, Aral has a number of outstanding trade payables that it has been unable to discharge due to its lack of operational revenues and positive cash flow. Some of these trade creditors have pursued litigation in Kazakhstan that has resulted in Aral's bank accounts being frozen. Pursuant to the Bankruptcy Law, Aral will apply to the court for implementation of the Rehabilitation Procedures. If Aral is able to successfully negotiate the Rehabilitation Procedures with its creditors and obtain the requisite court approval, it will prevent trade creditors and others from commencing litigation against Aral for payment of outstanding amounts and afford it the ability to restructure its financial affairs for a period of up to five years. The process of applying for the Rehabilitation Procedures will result in an automatic moratorium of up to two months on claims by creditors regardless of whether or not negotiations are successful. There can be no assurance that Aral will be successful in negotiating the Rehabilitation Procedures. "The Rehabilitation Procedures have the potential to facilitate Aral's access to its existing loans and other capital, and provide it with additional time to focus on recommencing oil production. If successful, this will generate operational cash flow and help to stabilize the economic outlook for both Caspian and Aral," said Michael Nobbs, Chairman of the Board. A further update will be provided as additional information becomes available. About Caspian Caspian is an oil and gas exploration and development company, operating in Kazakhstan through Aral, which has a number of targets in the highly prospective Aktobe Oblast of Western Kazakhstan. Caspian indirectly holds, through its interest in Aral, an exclusive licence pursuant to an exploration contract, which entitles it to explore and develop certain oil and gas properties known as the "North Block," an area of 1,467 square km, and a production contract for the area known as "East Zhagabulak". ===================== N E T H E R L A N D S ===================== FAXTOR ABS 2003-1: Moody's Affirms Caa3 Rating on 2 Note Classes ---------------------------------------------------------------- Moody's Investors Service announced that it has taken rating actions on these classes of notes issued by Faxtor ABS 2003-1 B.V.: EUR23 mil. (Current balance outstanding: EUR10 mil.) Class A-2E Floating Rate Notes, Upgraded to Aaa (sf); previously on Feb. 10, 2015, Affirmed Aa2 (sf) EUR9 mil. (Current balance outstanding: EUR3.9 mil.) Class A-2F Fixed Rate Notes, Upgraded to Aaa (sf); previously on Feb. 10, 2015, Affirmed Aa2 (sf) EUR7.5 mil. Class A-3E Floating Rate Notes, Upgraded to Baa3 (sf); previously on Feb. 10, 2015, Upgraded to Ba1 (sf) EUR15 mil. Class A-3F Fixed Rate Notes, Upgraded to Baa3 (sf); previously on Feb. 10, 2015, Upgraded to Ba1 (sf) EUR5.5 mil. (Current balance outstanding: EUR5.9 mil.) Class BE Floating Rate Notes, Affirmed Caa3 (sf); previously on Feb. 10, 2015, Affirmed Caa3 (sf) EUR9.5 mil. (Current balance outstanding: EUR 11.1 mil.) Class BF Fixed Rate Notes, Affirmed Caa3 (sf); previously on Feb. 10, 2015, Affirmed Caa3 (sf) RATINGS RATIONALE The rating actions on the notes are a result of the material improvement in the credit quality of the collateral. Since the last rating action in February 2015, 56.7% of the portfolio aggregate amount has been upgraded by an average of 2.76 notches. Additionally the proportion of assets rated within the Caa range by Moody's has decreased to 15% from 29% of the portfolio performing par while the defaulted assets have decreased from EUR6.6 million to EUR3.7 million. As a result, the credit quality of the performing portfolio as measured by the Weighted Average Rating Factor (WARF) reported by the trustee has improved from 2350 in Dec. 2014 to 1849 in Sept. 2015. On the May 2015 interest payment date, Classes A-2 have repaid EUR2.6 million or 8% of the tranche original balance. The amortization of the Classes A-2 has also marginally improved the overcollateralization ratios ("OC ratios") of the Classes A-3. As per the September 2015 trustee report, Class A and Class B overcollateralization ratios are reported at 158.50% and 104.02% respectively, compared to 156.40% and 105.62% as per the December 2014 trustee report. Moody's notes that the interest coverage test is failing and that since the payment date in May 2014, the interest payment to Classes A-3 has been made partially from the principal proceeds. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Approach to Rating SF CDOs" published in July 2015. Factors that would lead to an upgrade or downgrade of the rating: In addition to the base-case analysis, Moody's conducted sensitivity analyses on the key parameters for the rated notes: (1) Amounts of defaulted assets - Moody's considered a model run where all the Caa assets in the portfolio were assumed to be defaulted. The model outputs for this run are consistent with today's ratings. (2) Weighted Average Life (WAL) Sensitivity - Moody's considered a model run where the WAL increased by two years; the model generated outputs which were unchanged for Classes A-2, and within one notch of the base case run for Classes A-3 and B. This transaction is subject to a high level of macroeconomic uncertainty, which could negatively affect the ratings on the notes, in light of 1) uncertainty about credit conditions in the general economy 2) divergence in the legal interpretation of CDO documentation by different transactional parties due to or because of embedded ambiguities. Additional uncertainty about performance is due to: Portfolio amortization: The main source of uncertainty in this transaction is the pace of amortization of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortization could accelerate as a consequence of high prepayment levels or collateral sales by the collateral manager. Fast amortization would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over- collateralization levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. In addition to the quantitative factors that Moody's explicitly modeled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. HARBOURMASTER PRO-RATA: Fitch Affirms 'Bsf' Rating on Cl. B2 Debt ----------------------------------------------------------------- Fitch Ratings has affirmed Harbourmaster Pro-Rata CLO 2 B.V. and revised the Outlook on the class A2 to B1 notes, as follows: Class A1VF: affirmed at 'AAAsf'; Outlook Stable Class A1T: affirmed at 'AAAsf'; Outlook Stable Class A2: affirmed at 'AA+sf'; Outlook revised to Stable from Negative Class A3: affirmed at 'A-sf'; Outlook revised to Stable from Negative Class A4E: affirmed at 'BBBsf'; Outlook revised to Stable from Negative Class A4F: affirmed at 'BBBsf'; Outlook revised to Stable from Negative Class B1E: affirmed at 'BB+sf'; Outlook revised to Stable from Negative Class B1F: affirmed at 'BB+sf'; Outlook revised to Stable from Negative Class B2: affirmed at 'Bsf'; Outlook Negative Class S1: affirmed at 'BB+sf'; Outlook revised to Stable from Negative; rating withdrawn Class S4: affirmed at 'BBBsf'; Outlook revised to Stable from Negative; rating withdrawn Harbourmaster Pro-Rata CLO 2 B.V. is a securitization of mainly European senior secured loans with the total EUR602 million note issuance invested in a target portfolio of EUR587.5 million. The portfolio is actively managed by Blackstone/GSO Debt Funds Europe Limited. KEY RATING DRIVERS The affirmation reflects the transaction's stable performance over the past year. The revision of the Outlook on the class A2 to B1 notes to Stable from Negative reflects the increase in credit enhancement and deleveraging of the transaction following the end of the reinvestment period in October 2013. Credit enhancement has increased for all rated notes since the last review in November 2014 due to the transaction's rapid deleveraging. The senior notes have paid down by approximately EUR158 million and credit enhancement has increased to 65.3% from 45.8% for the class A1 notes and to 30.9% from 22.3% for the class A2 notes. The reinvestment period ended in October 2013 but the collateral manager was able to reinvest unscheduled proceeds until the payment date failing in October 2015. During the past year, the collateral manager purchased approximately EUR75 million of additional assets around par. As a consequence of these additional purchases, the weighted average life of the portfolio remains stable at four years. The Fitch weighted average rating factor, as calculated by the trustee, has decreased to 29.1 from 29.7 over the past year and the Fitch weighted average recovery rate has increased to 72.4 from 70.9. There are currently no defaulted assets in the portfolio and two assets, representing approximately 1.7% of the portfolio, are rated 'CCC' by Fitch. The slight increase in credit quality was compensated by an increase in portfolio concentration due to deleveraging. The largest obligor now represents 4.39% of the portfolio, up from 3.93% as of the last review while the top 10 obligors have increased to 38.16% from 32.65%. Currently there are no revolving or delayed drawdown notes in the portfolio. Of the portfolio, 15.2% is non-euro-denominated. However, only 1.6% is hedged by the variable funding note and the remainder is hedged by currency swaps that meet Fitch's counterparty criteria. The transaction documents allowed for up to EUR88.1 million of the portfolio notional to be invested in non-euro-denominated revolving assets, or delayed drawdown notes. Any investment or drawings would be matched by a corresponding drawing on the multi-currency variable funding A1VF note. As of October 2015 payment date report, all the coverage tests, portfolio profile tests and collateral quality tests are passing. Fitch has affirmed and withdrawn the ratings on the class S1 and S4 combination notes. These notes were exchanged for their components and thus no longer exist. RATING SENSITIVITIES In its rating sensitivity analysis, Fitch found that a 25% increase of the default probability would result in downgrade of between one and two notches across all notes apart from the class A1 notes, which would be unaffected. A 25% reduction of the recovery rate would result in a downgrade of between one and three notches across all notes apart from the class A1 notes, which would be unaffected. 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 Recognised Statistical Rating Organisations 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. JUBILEE CDO VII: Moody's Affirms Ba3 Rating on Class E Notes ------------------------------------------------------------ Moody's Investors Service announced that it has upgraded the ratings of these notes issued by Jubilee CDO VII B.V.: EUR30 mil. Class C Notes, Upgraded to Aaa (sf); previously on Sept. 10, 2014, Upgraded to Aa2 (sf) EUR31 mil. Class D Notes, Upgraded to A3 (sf); previously on Sept. 10, 2014, Upgraded to Baa1 (sf) Moody's also affirmed the ratings on these notes issued by Jubilee CDO VII B.V.: EUR218 mil. (current outstanding balance of EUR 27.3 mil.) Class A-T Notes, Affirmed Aaa (sf); previously on Sept 10, 2014, Affirmed Aaa (sf) EUR100 mil. (current outstanding balance of EUR 11.9 mil.) Class A-R Notes, Affirmed Aaa (sf); previously on Sept. 10, 2014, Affirmed Aaa (sf) EUR50 mil. Class B Notes, Affirmed Aaa (sf); previously on Sept. 10, 2014, Upgraded to Aaa (sf) EUR20 mil. Class E Notes, Affirmed Ba3 (sf); previously on Sept. 10, 2014, Affirmed Ba3 (sf) Jubilee CDO VII B.V., issued in November 2006, is a Collateralised Loan Obligation backed by a portfolio of mostly high yield senior secured European loans. The portfolio is managed by Alcentra Limited. The transaction's reinvestment period ended in November 2012 RATINGS RATIONALE The rating actions on the notes are primarily a result of the improvement of their over-collateralization ratios following the last 4 payment dates, when Class A-R and A-T notes amortized by approximately EUR32.56 mil. and EUR72.65 mil., respectively, or 33.33% of their original balances. As of the trustee's October 2015 report, Class A/B, Class C, Class D and Class E had OC ratios of 205.81%, 153.99%, 122.19% and 107.83% compared with 143.23%, 126.37%,112.67% and 105.3 %, respectively, as of the trustee's August 2014 report. The key model inputs Moody's uses, 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 underlying collateral pool as having a performing par and principal proceeds balance of EUR185.90 million and GBP6.00 million, a weighted average default probability of 25.35% (consistent with a WARF of 3,504), a weighted average recovery rate upon default of 49.13% for a Aaa liability target rating, a diversity score of 19 and a weighted average spread of 3.93%. The GBP denominated liabilities are naturally hedged by the GBP assets. The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analyzing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in September 2015. Factors that would lead to an upgrade or downgrade of the ratings: In addition to the base-case analysis, Moody's conducted sensitivity analyses on the key parameters for the rated notes, for which it assumed all the Caa assets, which make up to 17.19% of the performing portfolio to be defaulted, the model generated outputs that were within two notches of the base-case results. This transaction is subject to a high level of macroeconomic uncertainty, which could negatively affect the ratings on the note, in light of uncertainty about credit conditions in the general economy. CLO notes' performance may also be impacted either positively or negatively by 1) the manager's investment strategy and behaviour and 2) divergence in the legal interpretation of CDO documentation by different transactional parties due to embedded ambiguities. Additional uncertainty about performance is due to: Portfolio amortization: The main source of uncertainty in this transaction is the pace of amortization of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortization could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortization would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over- collateralization levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. Moody's analyzed defaulted recoveries assuming the lower of the market price or the recovery rate to account for potential volatility in market prices. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. Around 15.54% of the collateral pool consists of debt obligations whose credit quality Moody's has assessed by using credit estimates. Long-dated assets: The presence of assets that mature beyond the CLO's legal maturity date exposes the deal to liquidation risk on those assets. Moody's assumes that, at transaction maturity, the liquidation value of such an asset will depend on the nature of the asset as well as the extent to which the asset's maturity lags that of the liabilities. Liquidation values higher than Moody's expectations would have a positive impact on the notes' ratings. Foreign currency exposure: The deal has a significant exposures to non-EUR denominated assets. Volatility in foreign exchange rates will have a direct impact on interest and principal proceeds available to the transaction, which can affect the expected loss of rated tranches. In addition to the quantitative factors that Moody's explicitly modeled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. JUBILEE CDO I-R: S&P Raises Rating on Class E Notes to B+ --------------------------------------------------------- Standard & Poor's Ratings Services raised its credit ratings on all classes of Jubilee CDO I-R B.V.'s notes. The upgrades follow S&P's review of the transaction's performance under its updated criteria for rating corporate collateralized debt obligation (CDO) transactions. S&P performed a credit and cash flow analysis and assessed the support that each participant provides to the transaction by applying our current counterparty criteria. In S&P's analysis, it used data from the latest available trustee report dated Sept. 10, 2015. S&P's corporate CDO criteria incorporate supplemental tests intended to address both event risk and model risk that may be present in rated transactions. These consist of (1) the "largest obligor default test," which assesses whether a CLO tranche has sufficient credit enhancement to withstand specified combinations of underlying asset defaults based on the ratings on the underlying assets, and (2) the "largest industry test," which assesses whether or not it can withstand the default of all the obligors in the largest industry category. The updated criteria do not change the calculation of the loss amounts for the supplemental tests. However, the criteria now allow the loss amounts calculated for the largest obligor default test to be run through S&P's cash flow model to take into account excess spread and to ensure that the tranche subject to the test receives timely interest and ultimate principal in S&P's analysis. S&P subjected the capital structure to a cash flow analysis to determine the break-even default rate for each rated class of notes at each rating level. In S&P's analysis, it used the reported portfolio balance that it considered to be performing (EUR638.2 million), the weighted-average spread, and the weighted-average recovery rates for the performing portfolio. S&P applied various cash flow stress scenarios, using its standard default patterns in conjunction with different interest stress scenarios for each liability rating category. The exposure to obligors based in countries rated below 'A-' is greater than 10% of the aggregate collateral balance (17.5%). Therefore, S&P has also applied additional stresses in accordance with its nonsovereign ratings criteria. Non-euro-denominated assets comprise 15.6% of the aggregate collateral balance, which are hedged by a cross-currency swap agreement. In S&P's opinion, the documentation for the cross- currency swap agreement does not fully reflect S&P's current counterparty criteria. In S&P's cash flow analysis, for ratings above the issuer credit rating plus one notch on the swap counterparty, it considered scenarios where the counterparty does not perform, and where the transaction is therefore exposed to changes in currency rates. S&P's review of the transaction highlights that the class A notes have paid down by EUR209.7 million since S&P's Feb. 4, 2013 review. This has increased the available credit enhancement for all of the rated classes of notes. S&P's credit and cash flow analysis, together with the application of its nonsovereign ratings criteria and current counterparty criteria, indicates that the available credit enhancement for the class A and B notes is commensurate with higher ratings than those currently assigned. Therefore, S&P has raised its ratings on the class A and B notes. In S&P's February 2013 review of the transaction, its credit and cash flow analysis indicated that the available credit enhancement for the class C, D, and E notes was commensurate with higher ratings. However, the application of the largest obligor default test constrained S&P's ratings on these classes of notes. Following the application of the largest obligor default test under S&P's updated corporate CDO criteria, and taking into account the results of its credit and cash flow analysis, as well as the application of its counterparty criteria, the transaction can now support higher ratings on the class C, D, and E notes. Therefore, S&P has raised its ratings on the class C, D, and E notes. Jubilee CDO I-R is a cash flow collateralized loan obligation (CLO) transaction that securitizes loans granted to primarily European speculative-grade corporate firms. Alcentra Ltd. manages the transaction. The transaction closed in May 2007 and entered its amortization period in July 2014. RATINGS LIST Class Rating To From Jubilee CDO I-R B.V. EUR900 Million Senior Secured Fixed- And/Or Floating-Rate And Subordinated Notes Ratings Raised A AA+ (sf) AA (sf) B AA (sf) A+ (sf) C A+ (sf) BB+ (sf) D BBB- (sf) CCC+ (sf) E B+ (sf) CCC- (sf) STORK TECHNICAL: S&P Raises Corporate Credit Rating to 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it had raised its long-term corporate credit rating on Netherlands-based business services company Stork Technical Services Holdco B.V. to 'B' from 'B-'. At the same time, S&P raised its issue rating on Stork's EUR272 million senior secured notes to 'B-' from 'CCC+'. The recovery rating remains at '5', indicating S&P's expectation of modest recovery in the higher half of the 10%-30% range in the event of a payment default. The upgrade follows the completion of the sale of Fokker, a Dutch aircraft manufacturer, by Stork's shareholders Arle Capital Partners and Eyrir Invest, on Oct. 28, 2015, for EUR706 million. The proceeds were used to fully repay the debt at Stork Topco BV, Stork's parent company, which controlled Fokker. The debt repaid includes EUR240 million of payment-in-kind (PIK) notes, accrued interest on the PIK notes, and part of a EUR1.9 billion shareholder loan. The balance of the shareholder loan was converted into equity. Following this transaction, Stork Topco BV exited the group's perimeter. As a result, S&P considers that Stork's financial risk profile has improved to "aggressive" from "highly leveraged," based solely on the debt obligations at Stork. S&P expects the company's credit metrics to improve gradually during the remainder of 2015 and in 2016 on the back of stronger performance, the full benefits of restructuring measures, and moderate margin improvement. As such, S&P forecasts that Stork's Standard & Poor's-adjusted funds from operations (FFO) to debt will improve to 10% in 2015 and strengthen further to 12%-15% in 2016, compared with 7.7% at year-end 2014. S&P's adjustments to reported debt include the addition of EUR63 million of operating leases, EUR31 million of pension obligations, and EUR15 million in factoring of receivables. The stable outlook reflects S&P's expectation that Stork will continue to post organic growth amid challenging oil and gas industry conditions and further improve its profitability. S&P anticipates that the reported EBITDA margin (after nonrecurring items) will improve to 6% in 2016 on the back of cost efficiencies, higher volumes, and Giovenco's contribution. S&P could raise the rating by one notch if Stork's credit metrics strengthen further, with FFO to debt sustainably above 15%. An upgrade would also require the company to demonstrate a supportive financial policy, sustain "adequate" liquidity, and generate healthy FOCF, as well as an upturn in key oil and gas end markets. S&P might lower the rating if Stork's EBITDA margins failed to improve to 6% or S&P sees further significant order deferrals that indicate negative spill-over from oil and gas end markets. FFO interest coverage below 2.5x could also trigger a negative rating action, as could sizable dividends or acquisitions, or inability to arrange timely refinancing of debt maturing in 2017. =========== R U S S I A =========== BALTINVESTBANK: Moody's Lowers LT Deposit Rating to 'B3.ru' ----------------------------------------------------------- Moody's Interfax Rating Agency (MIRA) has downgraded to B3.ru from Baa2.ru national scale long-term deposit rating (NSR) of Baltinvestbank (Russia). The NSRs carry no specific outlooks. The rating is under review for further downgrade. The rating action is driven by Baltinvestbank's weak liquidity profile and continuing further liquidity pressures, exacerbated by recent negative publicity due to police investigation against the bank's clients. Moody's notes that Baltinvestbank has denied any affiliation with the subject of investigation. In its rating action, Moody's also takes into account the bank's weak and volatile profitability metrics posted in Q3 2015, which we anticipate to continue until year-end 2015. These metrics reflect the bank's weak net interest margin and will likely put additional pressure on the bank's already weak capital position. Moody's assessment of Baltinvestbank's ratings is largely based on the bank's audited IFRS financial statements for 2014, its statutory statements prepared under RAS, as well as information received from the bank. RATINGS RATIONALE The bank has operated with weak and volatile liquidity levels over the past two years, and its liquidity cushion has weakened even further over the past few months, as reflected in its liquid assets-to-total assets ratio (calculated under Russian accounting standards, RAS, statements; less repo operations, mutual funds, investment in subsidiaries and equities) of around 3% since October 2015. Moody's anticipates that the negative publicity associated with the aforementioned police investigation will add to existing liquidity pressures and/or the risk of weakening of relationships between the bank and its key customers and creditors. Moody's notes that the bank's credit profile has also been impacted by its weak profitability metrics, combined with modest capital levels. In 2015, the bank reported further weakening of its core profitability metrics, with a decline in its core profitability toward marginally negative levels in Q3 2015 (according to RAS statements). These adverse developments are largely explained by the bank's high cost of funding in H1 2015 caused by market volatility in late 2014 -- beginning 2015 (as the Central Bank of Russia's key rate increased from 5.5% to 17.0% in 2014). Nevertheless, we also note that the bank's annualized return on average assets was negative at -0.3% as of year-end 2014, according to IFRS statements (2013: -0.8%). FOCUS OF REVIEW Moody's rating review reflects the bank's high liquidity pressures and is concentrated on the bank's capacity to boost its liquidity position toward more sustainable levels over the next few weeks. WHAT COULD MOVE THE RATINGS UP/DOWN Given that Baltinvestbank's ratings is under review for further downgrade, upward pressure on the ratings is unlikely. The bank's capacity to obtain additional liquidity by improving funding from stable sources and/or by exploring other external sources would lead to a confirmation of the bank's rating. Evidence of Baltinvestbank's inability to recover its liquidity position to more sustainable levels would put significant pressure on the bank's rating and could result in a downgrade of the bank's rating. PRINCIPAL METHODOLOGY The principal methodology used in this rating was Banks published in March 2015. Headquartered in Moscow, Russia, Baltinvestbank reported total assets of RUB77.4 billion and net loss of RUB228 million under audited IFRS as of year-end 2014. BALTINVESTBANK: Moody's Lowers Long-Term Deposit Ratings to Caa2 ---------------------------------------------------------------- Moody's Investors Service has downgraded to Caa2 from B3 Baltinvestbank's long-term foreign and local-currency deposit ratings and placed them on review for further downgrade. The bank's baseline credit assessment (BCA) and adjusted BCA was downgraded to caa2 from b3 and placed under review for further downgrade. At the same time, its Not-Prime short-term foreign- currency and local-currency deposit ratings were affirmed. In addition, Moody's has downgraded the bank's long-term Counterparty Risk Assessment (CR Assessment) to Caa1(cr) from B2(cr) and placed it on review for downgrade and affirmed its short-term CR Assessment of Not-Prime(cr). The rating actions are driven by Baltinvestbank's weak liquidity profile and continuing further liquidity pressures, exacerbated by recent negative publicity due to police investigation against the bank's clients. Moody's notes that Baltinvestbank has denied any affiliation with the subject of investigation. In its rating action, Moody's also takes into account the bank's weak and volatile profitability metrics posted in Q3 2015, which we anticipate to continue until year-end 2015. These metrics reflect the bank's weak net interest margin and will likely put additional pressure on the bank's already weak capital position. Moody's assessment of Baltinvestbank's ratings is largely based on the bank's audited IFRS financial statements for 2014, its statutory statements prepared under RAS, as well as information received from the bank. RATINGS RATIONALE The bank has operated with weak and volatile liquidity levels over the past two years, and its liquidity cushion has weakened even further over the past few months, as reflected in its liquid assets-to-total assets ratio (calculated under Russian accounting standards, RAS, statements; less repo operations, mutual funds, investment in subsidiaries and equities) of around 3% since October 2015. Moody's anticipates that the negative publicity associated with the aforementioned police investigation will add to existing liquidity pressures and/or the risk of weakening of relationships between the bank and its key customers and creditors. Moody's notes that the bank's credit profile has also been impacted by its weak profitability metrics, combined with modest capital levels. In 2015, the bank reported further weakening of its core profitability metrics, with a decline in its core profitability toward marginally negative levels in Q3 2015 (according to RAS statements). These adverse developments are largely explained by the bank's high cost of funding in H1 2015 caused by market volatility in late 2014 -- beginning 2015 (as the Central Bank of Russia's key rate increased from 5.5% to 17.0% in 2014). Nevertheless, Moody's also notes that the bank's annualized return on average assets was negative at -0.3% as of year-end 2014, according to IFRS statements (2013: -0.8%). FOCUS OF REVIEW Moody's rating review reflects the bank's high liquidity pressures and is concentrated on the bank's capacity to boost its liquidity position toward more sustainable levels over the next few weeks. WHAT COULD MOVE THE RATINGS UP/DOWN Given that Baltinvestbank's ratings are under review for further downgrade, upward pressure on the ratings is unlikely. The bank's capacity to obtain additional liquidity by improving funding from stable sources and/or by exploring other external sources would lead to a confirmation of the bank's ratings. Evidence of Baltinvestbank's inability to recover its liquidity position to more sustainable levels would put significant pressure on the bank's ratings and could result in a downgrade of the bank's ratings. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks published in March 2015. Headquartered in Moscow, Russia, Baltinvestbank reported total assets of RUB77.4 billion and net loss of RUB228 million under audited IFRS as of year-end 2014. KAMA RE: Placed Under Provisional Administration ------------------------------------------------ The Bank of Russia, by its Order No. OD-3021, dated November 2, 2015, took the decision to appoint from November 2, 2015, a provisional administration to Reinsurance Company KAMA RE, limited liability company. The decision to appoint a provisional administration was taken following the suspension of the Company's reinsurance license (Bank of Russia Order No. OD-2559, dated September 24, 2015). The powers of the executive bodies of the Company are suspended. Igor Rekunov, member of the non-profit partnership Far Eastern Interregional Self-Regulatory Organisation of Receivers has been appointed as a head of the provisional administration of the Company. TOR CREDIT: Placed Under Provisional Administration --------------------------------------------------- The Bank of Russia, by its Order No. OD-3103, dated November 10, 2015, revoked the banking license from the Moscow-based credit institution Non-Bank Credit Institution Tor Credit, limited liability company, or NCI Tor Credit LLC from November 10, 2015. Bank of Russia took such an extreme measure -- revocation of the banking license -- because of decrease in equity capital below the minimum amount of the authorized capital established as of the date of the state registration of the credit institution. NCI Tor Credit LLC implemented high-risk lending policy connected with placement of funds into low-quality assets. Meeting the supervisor's requirements on creating provisions adequate to the risks assumed by the credit institution resulted in a loss of significant part of its equity capital. The management and owners of the credit institution did not take measures to normalize its activities. Under these circumstances, Bank of Russia performed its duty on the revocation of the banking license from the credit institution in accordance with Article 20 of the Federal Law "On Banks and Banking Activities". The Bank of Russia, by its Order No. OD-3104, dated November 10, 2015, appointed a provisional administration to NCI Tor Credit LLC for the period until the appointment of a receiver pursuant to the Federal Law "On the Insolvency (Bankruptcy)" or a liquidator under Article 23.1 of the Federal Law "On Banks and Banking Activities". In accordance with federal laws, the powers of the credit institution's executive bodies are suspended. According to the financial statements, as of November 1, 2015, NCI Tor Credit LLC ranked 757th by assets in the Russian banking system. ============= U K R A I N E ============= BANK UKRAINIAN: Deposit Guarantee Fund Extends Liquidation ---------------------------------------------------------- Interfax-Ukraine reports that the Individuals' Deposit Guarantee Fund has extended the liquidation of PJSC Bank Ukrainian Financial World (Ukrainsky Finansovy Svit, UFS-Bank, Donetsk) for two years until November 12, 2017. The fund said Roman Oberemko has been appointed liquidator of the bank for this period, Interfax-Ukraine relates. The National Bank of Ukraine made the decision to revoke the banking license and liquidate the bank on November 10, 2014, Interfax-Ukraine recounts. The fund introduced temporary administration in the bank from Aug. 15 to Nov. 15, 2014, Interfax-Ukraine relays. Bank Ukrainian Financial World was founded in 2003. UFS-Bank's assets as of July 9, 2014 were estimated at UAH1.599 billion, individuals' bank deposits and assets on current accounts amounted to UAH655.8 million and UAH250.3 million respectively, according to Interfax-Ukraine. UKRAINE: Bondholder Group Rejects Terms of Kiev's Debt Offer ------------------------------------------------------------ Marton Eder at Bloomberg News reports that a committee of investors rejected terms put forward by Ukraine's capital to restructure its foreign debt after negotiations with the group failed to reach an agreement on easing the city's US$550 million debt burden. According to Bloomberg, an e-mailed statement said the bondholder group won't support terms offered by the City of Kiev, including a 25% reduction to face value and a switch to new sovereign notes maturing 2019 and 2020. The committee, which didn't identify its members, said they owned a combined 38% of the bond that was due last week and 22% in a note maturing next year, Bloomberg relates. "These terms do not represent fair value to the holders of the city's notes," Bloomberg quotes the creditor committee as saying in the statement. "The committee continues to be willing to work with representatives of the city and the Ministry of Finance and their advisers to agree a balanced proposal." =========================== U N I T E D K I N G D O M =========================== DECO 6 - UK: S&P Lowers Rating on Class A2 Notes to CCC- -------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on DECO 6 - UK Large Loan 2 PLC's class A2 and B notes. At the same time, S&P has affirmed its 'D (sf)' ratings on the class C and D notes. DECO 6 - UK Large Loan 2 is a 2005-vintage U.K. commercial mortgage-backed securities (CMBS) transaction. At closing, the transaction comprised four loans. The rating actions follow S&P's review of the remaining loan in this transaction following the resolution of the Brunel loan. On the October 2015 interest payment date (IPD), the issuer applied final recovery amounts (GBP65.3 million) from the resolution of the Brunel loan to the class A2 notes. The remaining loan in the transaction is the Mapeley loan. The loan matured in July 2015 and is currently secured on four (down from 20 at closing) secondary U.K. office properties. The loan defaulted in October 2011 and subsequently entered special servicing at that time. The securitized loan-to-value (LTV) ratio is well above 100% based on a July 2015 valuation of GBP6.0 million. S&P has assumed principal losses on the loan in its 'B' rating stress scenario. RATING RATIONALE S&P's ratings in this transaction address the timely payment of interest (payable quarterly in arrears) and the payment of principal no later than the July 2017 legal final maturity date. S&P considers the available credit enhancement for the class A2 notes to be insufficient to mitigate the risk of losses from the underlying loan at the currently assigned rating level. Therefore, S&P has lowered to 'CCC- (sf)' from 'B- (sf)' its rating on the class A2 notes as S&P believes the repayment of these notes is dependent upon favorable business, financial, and economic conditions. This is in line with S&P's criteria. S&P considers the available credit enhancement for the class B notes to be commensurate with a lower rating level. This class of notes has also experienced interest shortfalls on the October 2015 IPD. S&P has therefore lowered to 'D (sf)' from 'CCC (sf)' its rating on this class of notes. This is in line with S&P's criteria. S&P has affirmed its 'D (sf)' ratings on the class C and D notes because they have previously experienced interest shortfalls. This is in line with S&P's criteria. These notes are unlikely to be repaid, in S&P's opinion. RATINGS LIST DECO 6 - UK Large Loan 2 PLC GBP555.119 mil commercial mortgage-backed floating-rate notes Rating Class Identifier To From A2 XS0235683223 CCC- (sf) B- (sf) B XS0235683736 D (sf) CCC (sf) C XS0235684114 D (sf) D (sf) D XS0235684544 D (sf) D (sf) RA ROBERTS: Bought Out of Administration by Complete Office ----------------------------------------------------------- South Yorkshire Times reports that the business and assets of RA Roberts Office Equipment Ltd., which has been trading for nearly 100 years, has been bought out of administration by Complete Office Solutions UK Ltd. According to South Yorkshire Times, RA Roberts Office Equipment, based in Shepcote Business Park, had suffered a downturn in trading and encountered cash flow problems due to competition from web-based suppliers despite following a proactive diversification strategy, increased product range and office showroom improvements. Robert Dymond and Lisa Hogg, insolvency practitioners at Wilson Field, were appointed to the firm on Sept. 18, South Yorkshire Times relates. Five weeks later, the family-run business and its assets have now been sold as a going concern to Wakefield-based Complete Office Solutions UK Ltd as part of the company's expansion plans, South Yorkshire Times recounts. All 13 staff jobs have been preserved, South Yorkshire Times discloses. RA Roberts Office Equipment Ltd. is a Sheffield office equipment supplier. SANTANDER ASSET: S&P Maintains 'BB' Rating on CreditWatch Neg. -------------------------------------------------------------- Standard & Poor's Ratings Services said it maintained its 'BB' long-term counterparty credit rating on Jersey-based Santander Asset Management Investment Holdings Ltd. (SAM) on CreditWatch with negative implications. The 'BB' issue ratings on the company's senior secured debt also remain on CreditWatch negative. At the same time, S&P affirmed the 'B' short-term counterparty credit rating on SAM. The ratings on SAM remain on CreditWatch pending finalization of the transaction structure and further details on the merger plan with Pioneer Investments. "We intend to resolve the CreditWatch within the next three months, by which time we expect to have reviewed the final terms and integration plans, although we expect regulatory approvals to take a few more months. At the time of the resolution, we will assess the financing structure and the degree to which any additional debt is factored into the current rating level. We will also assess management and governance under the new structure and integration risks associated with the merger," S&P said. * UK: A Third of Care Homes Face Insolvency, Company Watch Says --------------------------------------------------------------- Geoff Ho at express.co.uk reports that nearly a third of care home operators are struggling financially with more than 400 in danger of going bust, according to new research from Company Watch. Of the UK's 5,500 care home operators, the risk management group estimates that as many as 1,650 companies are struggling financially, and of those it expects a quarter, which account for 1,500 sites, to fall into insolvency, express.co.uk discloses. The report says many groups in the sector are struggling to meet the interest payments on their debts, because of rising staff costs and local authorities cutting fees in response to Whitehall demands for savings. Last week, credit rating agency Standard & Poor's warned that Four Seasons Health Care, the UK's largest operator with 470 homes and more than 20,000 beds, could run out of cash during the first half of 2016 and default on its loan repayments, the report recalls. According to express.co.uk, Nick Hood, business risk advisor at insolvency group Opus Restructuring, said that the current business model of many homes was unsustainable as they barely make a profit. "Government austerity measures have slashed top line income, while labour and other essential costs are rising all the time through factors that are mostly outside the control of care home operators," express.co.uk quotes Mr. Hood as saying. "Something has to give if major problems are to be avoided and if capacity is to be increased to house the escalating number of the elderly and the vulnerable in society." express.co.uk notes that beleaguered Four Seasons is reportedly looking to raise GBP60 million in a fire sale to ease the strain on its finances. It is also believed to have appointed specialist bankers from Rothschild and law firm Freshfields to restructure its balance sheet, the report states. The firm is owned by Guy Hands' private equity group, which acquired it for GBP825 million in a leveraged buyout in 2012. However, loss-making Four Seasons is struggling to cope with the GBP500 million debt mountain that the takeover saddled it with and annual interest payments of GBP50 million, the report notes. According to the report, the company is believed it is looking to raise GBP30 million from the sale of 14 properties that it owns and operates before the end of the year. The firm also wants to raise a further GBP30 million from the disposal of sites that it owns but are run by third parties, adds express.co.uk. =============== X X X X X X X X =============== * Moody's Predicts Slow Global Growth for Another 2 Years --------------------------------------------------------- Global growth will be lackluster over the next two years as the slowdown in China and other emerging markets continues to weigh on the world economy, Moody's Investors Service said in a report published on Nov. 10, 2015. Moody's forecasts that G20 GDP growth will average 2.8% in 2015- 17, only 0.3 percentage point higher than in 2012-14 and below the 3.8% average recorded in the five years before the global financial crisis. The rating agency's latest forecasts are broadly unchanged from its last quarterly Global Macro Outlook in August. "Muted global economic growth will not support a significant reduction in government debt or allow central banks to raise interest rates markedly," said the report's author Marie Diron, Senior Vice President, Credit Policy. "Authorities lack the large fiscal and conventional monetary policy buffers to protect their economies from potential shocks." G20 GDP growth is forecast to rise slowly to 2.8% in 2016 and 3% in 2017 from 2.6% in 2015. Emerging markets' contribution to G20 GDP growth in 2015-17 will fall to the lowest levels since the early 2000s. The combination of persistently low commodity prices and subdued global growth will maintain disinflationary pressures, weigh on revenues and hamper attempts to deleverage. The main risks to the economic outlook would stem from a bigger than expected global fallout from the Chinese slowdown and a larger impact from tighter external and domestic financing conditions in other emerging markets. "The direct effects on the global economy from both of these potential risks would likely be limited," Ms Diron adds. "However, advanced economies would be unable to do much to shore up global growth, given policymakers' limited room for manoeuvre on fiscal and monetary policy and the high leverage we're seeing in a number of sectors and countries." In China, Moody's forecasts GDP growth of just under 7% in 2015, 6.3% in 2016 and 6.1% in 2017. The gradual economic slowdown reflects a trade-off between further reforms -- aimed at lessening the economy's dependence on investment and credit and increasing the influence of market mechanisms -- and the risk of jeopardizing employment and social stability. Commodity prices are unlikely to rise significantly in the next few years. A large inventory build-up, a slow supply response and muted demand from China and other key importers will all weigh on prices. Moody's expects no significant rise in prices for energy, metal and mining commodities in the next two years. For commodity producers, the economic effects of low commodity prices will spill over into other sectors through supply chains and weaker growth in household income. As well as weaker commodity prices, a range of country-specific factors will contribute to lower growth in emerging markets and could lead investors to reassess growth and return prospects in some countries. For example, political uncertainty will be a negative factor in Brazil and Russia and infrastructure shortages will hamper growth in South Africa. Slow growth in emerging markets will not derail growth in advanced economies, where the economic outlook is likely to be supported by more accommodative monetary policy in the years ahead. Growth is expected to be broadly stable in the US, Europe and Japan. For 2015-17, Moody's forecasts average GDP growth at around 2.5% in the US, the UK and Korea and 1.5% for the euro area. * Fitch Says EU Credit Investors Bearish on Emerging Markets ------------------------------------------------------------ European credit investors have grown more bearish on emerging markets (EMs) and see them as the biggest risk to European credit markets, according to Fitch Ratings' latest senior investor survey. But most investors see selective EM risk as acceptable in more stable countries and sectors. Fifty-nine percent of respondents to the survey, which closed on November 4, said the risk posed over the next 12 months by adverse developments in one or more emerging markets was high, up from 45% in our previous survey in July. Investors again singled out EMs as most likely to experience deteriorating fundamental credit conditions in the coming year. Three-quarters of respondents think EM sovereign fundamentals will deteriorate, compared with two-thirds in July. For EM corporates the proportion increased nearly 20pp to 80%. Just 6% predict an improvement for either category. A more pessimistic view among investors is consistent with the volatility in EM assets since mid-year. This has been driven by concerns about US monetary tightening, global growth, and commodity prices, as well as country-specific factors. Survey responses reflect this range of related challenges, with no single risk factor notably outweighing others. 29% of respondents see low commodity prices as the main risk to EMs, followed by slower global growth (26%), a Fed rate rise (24%), and high debt levels (21%). The view that EM corporates face the greatest refinancing challenge has hardened, with 63% of respondents selecting this category, up from 46% in our previous survey. Nevertheless, more than half of respondents described their view on EM debt as selective, looking to pick more stable countries and sectors to avoid high risk exposures. 14% think now is a good time to buy in an oversold market. Concerns about EMs are not new, and Fitch's European senior investor surveys have shown increasingly negative sentiment in recent years. US investors also saw EM contagion as the top risk to their market in our recent US survey. Fitch's global growth forecast of 2.3% for 2015 factors in the impact of recessions in Brazil and Russia and a structural slowdown in China and other EMs. Fed tightening can exacerbate credit pressures via its impact on EM rates, capital flows and currencies, but this will vary across regions and asset classes. Many sovereigns have large FX reserves and low public debt, while EM corporate debt has risen sharply in the last decade. Highly indebted corporates with large dollar exposure and unhedged FX risk profiles will face greater refinancing risk than those with good funding diversification. US rate rises may put pressure on some EM banking systems' asset quality and increase refinancing challenges. Fitch's 4Q15 survey represents the views of managers of an estimated EUR7.5 trillion of fixed-income assets. Fitch will publish the full results later this month. ********* 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 * * *