/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/170113.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 Friday, January 13, 2017, Vol. 18, No. 010 Headlines G E R M A N Y MUUEHL PRODUCT: Erfurt Court Confirms Insolvency Plan I R E L A N D AVOLON HOLDINGS: Moody's Assigns Ba3 Corporate Family Rating BUS EIREANN: Faces Risk of Insolvency Within Next 18 Months I T A L Y BANCA MARCHE: UBI Banca Makes EUR1 Rescue Offer MONTE DEI PASCHI: Faces Pressure to Disclose Problem Loans N E T H E R L A N D S DELFT BV 2017: Moody's Assigns (P)Ba2 Rating to Class E Notes U K R A I N E PRIVATBANK PJSC: Creditors Plan to Pursue Int'l Arbitration U N I T E D K I N G D O M AMIGO HOLDINGS: Moody's Assigns (P)B1 Corporate Family Rating BRADFORD & BINGLEY: Sale Process of Mortgages in Final Stages GARDEN BRIDGE: Trust Uncertain on Viability of Project X X X X X X X X * BOOK REVIEW: Transnational Mergers and Acquisitions ********* ============= G E R M A N Y ============= MUUEHL PRODUCT: Erfurt Court Confirms Insolvency Plan ----------------------------------------------------- Reuters reports that the district court Erfurt confirmed the insolvency plan of Muuehl Product & Services AG i.L. on Jan. 12. ============= I R E L A N D ============= AVOLON HOLDINGS: Moody's Assigns Ba3 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a Ba3 corporate family rating to Avolon Holdings Limited, a Dublin-based aircraft leasing company, a Ba2 rating to the $5.5 billion First Lien Term Loan B issued by indirect subsidiary co-borrowers Avolon TLB Borrow 1 (US) LLC and Avolon TLB Borrower 1 (Luxembourg) S.a.r.l. and a B1 rating to $3 billion of Senior Unsecured Notes issued by indirect subsidiary Park Aerospace Holdings Limited. The outlook for ratings is stable. Proceeds of the new debt issuance will be used by Avolon to fund its pending acquisition of C2 Aviation Capital, Inc. (C2), the commercial aircraft leasing business of CIT Group, Inc. (CIT), expected to close this quarter. Issuer: Avolon Holdings Limited Assignments: Corporate Family Rating, at Ba3, Stable Issuers: Avolon TLB Borrower 1 (US) LLC / Avolon TLB Borrower 1 (Luxembourg) S.a.r.l. (co-issuers) Long Term Foreign Currency Secured Term Loan, at Ba2 Outlook, Assigned Stable Issuer: Park Aerospace Holdings Limited Long Term Foreign Currency Debt Rating, at B1 Outlook, Assigned Stable RATINGS RATIONALE The rating assignments reflect the increased franchise strength of the combined Avolon and C2 and the high quality fleet and new aircraft order book which Moody's expects will result in solid future profitability. The ratings also reflect Avolon's moderate leverage profile, continued high reliance on secured financing and the steps the company has taken to strengthen liquidity. Avolon's ratings are constrained by the relatively weaker credit profile of Avolon's parent Bohai Capital Limited. The stable outlook reflects Moody's view that the company will capably manage integration risks and that the combined company's operating performance will improve once the two firms are fully integrated. After the acquisition closes in Q1 2017, Avolon will become the third largest aircraft leasing company globally with a pro forma combined fleet of 533 aircraft and an order book of 316 additional aircraft as of September 30, 2016. Avolon's combined fleet will primarily consist of popular narrow and mid-wide-body models, solidifying its position in the newest technology aircraft, and will be well-diversified both by airline and geography. The company's low average fleet age coupled with greater fleet granularity (partially a function of its increased size) suggest a lower performance volatility. Avolon's increased operating scale will provide the company improved access to global airlines, a strong pipeline of desirable new technology aircraft, purchase economies with aircraft OEMs, operating economies, and the ability to engage in larger leasing transactions. On a pro-forma basis, Avolon's leverage (Moody's Debt/Tangible Common Equity) measures a reasonable 2.7x at 30 September 2016, and reflects a $2.4 billion capital injection from Bohai. However, Bohai's capital injection is also partially financed with borrowed funds initially, resulting in significant double leverage. Moody's expects that Avolon's operating cash flows will support the company maintaining leverage of about 2.5x even as it finances increased delivery of aircraft from its order book over the next few years. With the issuance of senior unsecured notes, Avolon is taking a step toward diversifying its funding. Avolon has also increased its unsecured revolving credit to a total line amount of $1.025 billion, which improves its alternative liquidity. Notwithstanding its liquidity strengthening efforts, Avolon remains highly reliant on secured financing. Nearly all of Avolon's aircraft are pledged, which limits financial and operational flexibility and structurally subordinates holders of the senior notes. Avolon's rating is constrained by parent Bohai Capital's modest credit profile. Bohai's high leverage, reliance on short-term financing and high debt-funded growth present the risk of distributions to the parent should it become distressed. However, Avolon's strengthened liquidity metrics and acquisition of C2 result in the company having more strategic importance to Bohai, due to its increased competitive positioning, value, and earnings contribution, which would likely discourage Bohai from taking actions that could undermine Avolon's credit strength. Moody's also believes that Bohai will implement governance standards that provide for reasonable operational separation between Avolon and Bohai. Avolon's rating could improve if Bohai's stand-alone credit profile is strengthened with increased equity capital and lower leverage. The Ba2 rating assigned to the First Lien Term Loan B is based on the loan's strong asset coverage, priority claim, and loan terms that reduce loss given default, including a loan-to-value covenant of 80% assessed regularly on the basis of re-appraisals of pledged aircraft, as well as asset concentration limits. The Term Loan is secured with the aircraft acquired from C2, and at the outset features a very strong LTV of 55%. The loan is guaranteed by Avolon Holdings Limited and subsidiary asset holding entities. The B1 rating assigned to the senior notes reflects their structurally subordinate claim on the assets of Avolon's operating subsidiaries and asset holding entities. Unsecured guarantees from the C2 aircraft owning entities and from Avolon Holdings help to moderate loss given default, given the excess collateral coverage of Term Loan B. Moody's could upgrade Avolon's ratings if the company further diversifies its funding to include additional unsecured sources while maintaining a strong liquidity buffer, solid profitability and capital adequacy; and if the firm effectively manages the financing and lease risks of its committed aircraft orders; and if Bohai's credit profile strengthens based on improved capital levels and lower leverage. Avolon's ratings could be downgraded if the firm pursues aggressive growth that results in significantly higher leverage, its liquidity position weakens, or if profitability declines materially below peers. Avolon is a commercial aircraft leasing company based in Dublin, Ireland. Its reported total assets were $9.0 billion at 30 September 2016 and $26.0 billion on a pro forma basis, including the acquisition of C2. BUS EIREANN: Faces Risk of Insolvency Within Next 18 Months ----------------------------------------------------------- The Irish Times reports that the threat of the State-owned Bus Eireann becoming insolvent within the next 18 months is very real, its new acting chief executive has told staff. Ray Hernan also said it was clear the loss-making company had to change its business model, The Irish Times relates. However, he insisted that the Expressway service, the company's commercial inter-city coach service which receives no State subsides, would "continue to be part of Bus Eireann", The Irish Times notes. The Expressway service faces strong competition from private bus operators and accounts for the bulk of the company's financial losses, The Irish Times discloses. The Irish Times reported on Jan. 11 that external consultants commissioned by Bus Eireann had concluded that closing down "Expressway" may be the only viable option for the company. A total of 516 staff could lose their jobs if the Expressway service was closed down, The Irish Times states. Consultants at Grant Thornton expressed doubt at whether a re-organization plan for Expressway first mooted by the company last autumn would succeed in placing Bus Eireann on a firm financial footing The Irish Times relays. In his letter, Mr. Hernan, as cited by The Irish Times, said the company was now forecasting losses for the year could be in the order of EUR8 million. He said the current challenges faced by Expressway would only be resolved successfully by retaining this business as part of the overall total company structure and making it more competitive, The Irish Times notes. ========= I T A L Y ========= BANCA MARCHE: UBI Banca Makes EUR1 Rescue Offer ----------------------------------------------- Rachel Sanderson at The Financial Times reports that UBI Banca has confirmed it has made an offer of 1 euro to buy three small banks rescued by the Italian state in 2015. According to the FT, UBI made the offer to an Italian bank resolution fund for the remainder of the banks Marche, Etruria, Carichieti, which will have their bad loans totalling EUR2.2 billion hived off. These will remain under the control of the state fund, the FT notes. UBI said in a statement it will undertake a EUR400 million capital hike, the FT relays. Credit Suisse and Morgan Stanley advised on the deal, the FT discloses. MONTE DEI PASCHI: Faces Pressure to Disclose Problem Loans ---------------------------------------------------------- James Politi at The Financial Times reports that Banca Monte dei Paschi di Siena may be forced to reveal the source of some of its largest problem loans as part of a EUR6.5 billion state-led bailout. Italian politicians are discussing whether to require MPS to disclose a list of problem exposures on its balance sheet, the FT relates. Such a move could set a precedent for "naming and shaming" in European banking, sidestepping confidentiality rules that protect banking clients, the FT notes. The political pressure on MPS, the world's oldest bank and Italy's third-largest by assets, has increased sharply since it admitted last month that it would need public funds to plug most of an estimated EUR8.8 billion capital shortfall, the FT discloses. Opposition lawmakers from the anti-establishment Five Star Movement and the Northern League, as well as the centre-right Forza Italia party, hoped to embarrass the ruling Democratic party by exposing tight links between MPS and centre-left officials and business people, the FT sates. Last month, Italy's government approved a EUR20 billion bailout fund to inject funds into MPS and potentially into other smaller banks, the FT recounts. MPS has said it would be "willing" to publish the list if necessary, but laws do not allow this now, the FT relates. Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is an Italy-based company engaged in the banking sector. It provides traditional banking services, asset management and private banking, including life insurance, pension funds and investment trusts. In addition, it offers investment banking, including project finance, merchant banking and financial advisory services. The Company comprises more than 3,000 branches, and a structure of channels of distribution. Banca Monte dei Paschi di Siena Group has subsidiaries located throughout Italy, Europe, America, Asia and North Africa. It has numerous subsidiaries, including Mps Sim SpA, MPS Capital Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA. ===================== N E T H E R L A N D S ===================== DELFT BV 2017: Moody's Assigns (P)Ba2 Rating to Class E Notes ------------------------------------------------------------- Moody's Investors Service has assigned provisional long-term credit ratings to notes to be issued by Delft 2017 B.V.: EUR [-]M Class A mortgage backed floating rate notes due January 2040, Assigned (P)Aaa (sf) EUR [-]M Class B mortgage backed floating rate notes due January 2040, Assigned (P)Aa1 (sf) EUR [-]M Class C mortgage backed floating rate notes due January 2040, Assigned (P)Aa3 (sf) EUR [-]M Class D mortgage backed floating rate notes due January 2040, Assigned (P)A3 (sf) EUR [-]M Class E mortgage backed floating rate notes due January 2040, Assigned (P)Ba2 (sf) Moody's has not assigned ratings to the EUR [-]M Class Z mortgage backed zero coupon notes due January 2040 or the Residual Certificates. The portfolio backing this transaction consists of Dutch Non- conforming residential mortgage loans originated by ELQ Portefeuille I B.V. The portfolio in its entirety is currently securitized in EMF-NL 2008-1 B.V. (not rated). On the closing date EMF-NL 2008-1 B.V. will sell the portfolio to Morgan Stanley Principal Funding, Inc. (not rated). In turn, Morgan Stanley Principal Funding, Inc. will sell the portfolio to Delft 2017 B.V. RATINGS RATIONALE The ratings take into account the credit quality of the underlying mortgage loan pool, from which Moody's determined the MILAN Credit Enhancement and the portfolio expected loss, as well as the transaction structure and legal considerations. --Expected Loss and MILAN CE Analysis The expected portfolio loss of [9.5]% and the MILAN required credit enhancement of [35]% serve as input parameters for Moody's cash flow model and tranching model, which is based on a probabilistic lognormal distribution. Portfolio expected loss of [9.5]%: this is based on Moody's assessment of the lifetime loss expectation taking into account: (i) the high weighted average CLTV of around [97.7]% on a non- indexed basis; (ii) the collateral performance to date along with an average seasoning of [9.0] years: [17.8]% of the pool is in arrears as of 31 October 2016, of which [10.6]% is more than 30 days in arrears; (iii) the current macroeconomic environment and Moody's view of the future macroeconomic environment in the Netherlands, and (iv) benchmarking with similar transactions in the Dutch Non-conforming sector. MILAN CE of [35]%: this follows Moody's assessment of the loan-by- loan information taking into account the historical performance available and the following key drivers: (i) the high weighted average CLTV of [97.7]% on a non-indexed basis; (ii) the high proportion of borrowers that self-certified their income at [24.9%]; (iii) around [99.7]% of interest only loans; (iv) borrowers with adverse credit history accounting for [36.6%] of the pool; (v) the level of arrears around [17.8%] as of 31 October 2016, and (vii) benchmarking with other Dutch Non-conforming RMBS transactions. --Transaction structure The provisional mortgage pool balance will consist of EUR [158] million of loans. The total reserve fund will be funded to [2.0]% of the initial balance of Classes A to Z and will not amortise. The total reserve fund will be split into the Liquidity Reserve Fund and the Non Liquidity Reserve Fund. The Liquidity Reserve Fund Required Amount will be equal to [2.0]% of Class A outstanding amount and will be available only to cover senior expenses and Class A interest. The Liquidity Reserve Fund is floored at [1%] of the initial principal balance of Class A and will be released only after Class A is fully repaid. The Non Liquidity Reserve Fund will be equal to the difference between the total reserve fund and the Liquidity Reserve Fund, and will be used to cover interest shortfalls and to cure PDL on Classes A to E. Interest on the notes (excluding Class A) is subject to a Net Weighted Average Coupon (Net WAC) Cap. Net WAC additional amounts are paid junior in the revenue waterfall being the difference between the class B, C, D and E coupon and the Net WAC Cap. Net WAC additional amounts arise when the coupons of the respective notes are greater than the Net WAC Cap. Moody's ratings assigned to the Class B, C, D and E do not address the timely and/ or ultimate payment of Net WAC additional amounts. Moody's notes that the Net WAC Cap formula defined in the deal divides the scheduled weighted average loan rate net of fees by the proportion of the rated notes to the aggregate current balance of the loans. Consequently, should the aggregate current balance of the loans become less than the rated notes as a result of high portfolio losses leading to unpaid PDL on the rated notes, the Net WAC Cap calculation result would decrease and potentially reduce the size of promised interest payment to be received by investors under the Class B through Class E notes to below their stated coupon and furthermore below the scheduled WAC of the pool. Moody's views the likelihood of such scenario as consistent with the ratings of the notes. --Operational Risk Analysis Adaxio B.V. (not rated) will be acting as servicer and cash manager on day 1. For [12] months after the transaction closing Adaxio B.V. will delegate certain collection and payment processing services to Stater Nederland B.V. (not rated), thereafter these responsibilities will be assumed by Adaxio B.V. Intertrust Administrative Services B.V. (not rated) will act as independent back up cash manager as well as back-up servicer facilitator, using commercially reasonable efforts to find a substitute servicer in case of servicer termination. To ensure payment continuity over the transaction's lifetime the transaction documents incorporate estimation language whereby the cash manager can use the three most recent servicer reports to determine the cash allocation in case no servicer report is available. The transaction also benefits from principal to pay interest for the Class A notes and for Class B to E notes, subject to certain conditions being met. --Interest Rate Risk Analysis All the loans in the portfolio pay a floating rate of interest linked to 1 month Euribor, while the notes pay a floating rate of interest linked to 3 months Euribor. The interest rate risk in the transaction will be unhedged. Moody's has taken into consideration the risk of margin compression in the portfolio as well as the basis mismatch in its cash flow modelling. The provisional ratings address the expected loss posed to investors by the legal final maturity of the Notes. In Moody's opinion the structure allows for timely payment of interest for Class A notes, ultimate payment of interest on or before the final legal maturity date for Classes B, C, D and E notes; and ultimate payment of principal at par on or before the final legal maturity date for all rated notes. Moody's issues provisional ratings in advance of the final sale of securities, but these ratings represent only Moody's preliminary credit opinions. Upon a conclusive review of the transaction and associated documentation, Moody's will endeavour to assign definitive ratings to the Notes. A definitive rating may differ from a provisional rating. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. The analysis undertaken by Moody's at the initial assignment of ratings for RMBS securities may focus on aspects that become less relevant or typically remain unchanged during the surveillance stage. Please see Moody's Approach to Rating RMBS Using the MILAN Framework for further information on Moody's analysis at the initial rating assignment and the on-going surveillance in RMBS. -- Parameter Sensitivities Moody's Parameter Sensitivities: If the portfolio expected loss was increased from [9.5]% to [17.5]% of current balance, and the MILAN CE remained unchanged, the model output indicates that the Class A notes would still achieve (P)Aaa(sf) assuming that all other factors remained equal. Moody's Parameter Sensitivities quantify the potential rating impact on a structured finance security from changing certain input parameters used in the initial rating. Moody's Parameter Sensitivities provide a quantitative/model- indicated calculation of the number of rating notches that a Moody's structured finance security may vary if certain input parameters used in the initial rating process differed. The analysis assumes that the deal has not aged and is not intended to measure how the rating of the security might migrate over time, but rather how the initial rating of the security might have differed if key rating input parameters were varied. Parameter Sensitivities for the typical EMEA RMBS transaction are calculated by stressing key variable inputs in Moody's primary rating model. Factors that would lead to an upgrade or downgrade of the ratings: Significantly different loss assumptions compared with Moody's expectations at close due to either a change in economic conditions from Moody's central scenario forecast or idiosyncratic performance factors would lead to rating actions. For instance, should economic conditions be worse than forecast, the higher defaults and loss severities resulting from a greater unemployment, worsening household affordability and a weaker housing market could result in a downgrade of the ratings. Deleveraging of the capital structure or conversely a deterioration in the notes available credit enhancement could result in an upgrade or a downgrade of the ratings, respectively. ============= U K R A I N E ============= PRIVATBANK PJSC: Creditors Plan to Pursue Int'l Arbitration ----------------------------------------------------------- Luca Casiraghi and Daryna Krasnolutska at Bloomberg News report that creditors to PJSC Privatbank are planning to pursue international arbitration after US$555 million of bonds were wiped out in the lender's nationalization. According to Bloomberg, two people familiar with the situation said First Geneva Capital Partners, Pala Assets and Pioneer Investment Management are among international investors working together in a bid for compensation from PJSC Privatbank. They said the group will likely target the lender's overseas assets through the London Court of International Arbitration, Bloomberg relates. The people, as cited by Bloomberg, said the bondholders are looking for help outside of Ukraine after failed attempts to open talks with the country's finance minister and central bank. The creditors were caught out last month when the government wrote off Privatbank's senior and junior bonds, as it nationalized the lender to avert a collapse, Bloomberg recounts. Ukrainian authorities decided to take over Privatbank last month after a request for help from the lender's billionaire owners, Gennady Bogolyubov and Igor Kolomoisky, a former governor of the Dnipropetrovsk region where the bank is based, Bloomberg relays. The people said the bondholder group, which is being advised by lawyers at Dechert, owns about a quarter of Privatbank's US$335 million of senior notes due in January 2018 and February 2018, according to Bloomberg. The people said the creditor group is preparing to call in debts, Bloomberg relays. They said some bondholders are also considering pursuing a separate arbitration claim directly against the Ukrainian government, potentially through the World Bank's International Centre for Settlement of Investment Disputes, Bloomberg notes. PJSC Privatbank is Ukraine's biggest bank. * * * As reported by the Troubled Company Reporter-Europe on Jan. 3, 2017, Fitch Ratings downgraded PJSC CB PrivatBank's (Privat) Long- Term Foreign Currency Issuer Default Rating (IDR) to 'RD' (Restricted Default) from 'CCC' and removed it from Rating Watch Evolving (RWE). The TCR-Europe reported on Dec. 29, 2016, that S&P Global Ratings lowered its long- and short-term counterparty credit ratings on Ukraine-based PrivatBank to 'R/R' (indicating the obligor is under regulatory supervision) from 'B-/C'. =========================== U N I T E D K I N G D O M =========================== AMIGO HOLDINGS: Moody's Assigns (P)B1 Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned a provisional (P)B1 Corporate Family Rating (CFR) to Amigo Holdings Limited (Amigo), the holding company of the UK-based Amigo group. Moody's has also assigned a (P)B1 rating to the proposed GBP250 million long-term, senior secured bond, to be issued by Amigo Luxembourg S.A., which is backed by the parent, Amigo Holdings Limited. The outlook is stable for both issuers. This is the first time that Moody's has rated Amigo and Amigo Luxembourg S.A.. Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final versions of all the documents and legal opinions, Moody's will endeavour to assign definitive corporate family and senior secured ratings. A definitive rating may differ from a provisional rating. The provisional ratings and the stable outlook assigned to Amigo assume a successful issuance of the bond, the removal of Amigo Holdings Limited from the restricted group within 90 days following the issue date and the incorporation of a new holding company, which will be the entity that will produce the consolidated accounts for Amigo Group. Once incorporated, Moody's will transfer the (P)B1 CFR to this new holding company and withdraw the rating assigned to Amigo Holdings Limited. These ratings are contingent upon Amigo's successful completion of a proposed GBP250 million senior secured notes offering and the changes in the restricted group, whereby Amigo will use the proceeds from the bond issuance to repay an existing senior facility agreement and partially repay shareholder loan notes. The remainder of these shareholder loan notes issued by Amigo Holdings Limited will be converted into common equity in the new holding that will be incorporated once Amigo Holdings Limited will be released from the restricted group. Amigo will enter into a new five year GBP57 million super senior revolving credit facility. RATINGS RATIONALE Amigo Group is the leader in the UK market for unsecured guarantor loans, with an estimated 85% share. The guarantor loan is a personal loan where interest and principal repayments are guaranteed by a second individual, typically a family member or a friend of the borrower. Amigo offers only one product, which is a guarantor loan under which individuals are able to borrow between GBP500 and GBP7,500 over a term of between 12 and 60 months at a fixed annual percentage (with the same rate applicable to all borrowers). The CFR of (P)B1 is supported by Amigo's market share and simple business model, strong profitability and liquidity metrics and a supporting ownership structure which shows an alignment of interests between the senior management of the company and its main shareholder. Moody's also sees constraints to the rating resulting from the firm's monoline business model, relatively simple risk management framework, albeit mitigated by a strong compliance culture, and modest asset quality. In addition, regulatory risk is a key concern, but the agency believes the likelihood of a change in the regulatory framework in the unsecured credit market to be very low. The provisional rating also incorporates solid capital levels, despite the reduction following a partial repayment of the shareholder loan, and a comfortable liquidity position post- issuance of the proposed bond. Following the transaction, Amigo's leverage, calculated as Tangible Common Equity (TCE) relative to Tangible Managed Assets (TMA), will remain solid at 31% from 50% at end-September 2016, according to Moody's calculation. Moody's believes that any subsequent improvement would also depend on Amigo maintaining strong profitability and a disciplined underwriting criteria. The proposed funding structure is also expected to improve Amigo's liquidity by providing some diversification in funding and by lengthening the maturity profile of its debt facilities. However, Moody's also notes the concentration in terms of debt maturities, with the GBP57 million new revolving credit facility maturing in five years and the senior secured bond in seven years. Amigo has shown a strong level of profitability significantly higher than that of peers over the last few years, owing to its simple and effective business model, whereby it applies an interest rate typical of near- and subprime clients to customers which generally have a better credit quality because of the presence of the guarantor. This, together with disciplined underwriting criteria, has allowed the company to maintain an impairment rate well below those of its peers in the near-prime lending market. However, Moody's believes that competition could increase over the next few years, driven by the very high margins of the sector and relatively low barriers to entry. Moody's views the absence of a dedicated risk management and internal audit function as a weakness. This is characteristic of many companies of a similar size to Amigo, but the agency takes some comfort from the fact that the firm has an experienced management team and solid compliance culture. The company's focus on compliance and on mitigating conduct risk is evidenced by the way employees are assessed and how Amigo's guaranteed loan product is designed. In addition, the company received its full authorization to operate from the Financial Conduct Authority in June 2016. The authorization allows the company to operate on a permanent basis and indicates that the company's product and processes are in compliance with regulatory standards in relation to consumer protection and welfare. RATIONALE FOR THE STABLE OUTLOOK The outlook on Amigo's provisional ratings is stable, reflecting the company's lengthened maturity profile following the expected successful issuance of the senior secured note and the agency's expectation that Amigo will continue to maintain solid internal capital generation. WHAT COULD CHANGE THE RATINGS UP/DOWN Amigo's CFR could be upgraded because of: (i) an improvement in asset quality metrics, with problem loans falling below 5% of total gross loans; (ii) a strengthening of the risk management framework; and (iii) an enhanced degree of diversification away from the simple guarantor lending model, while maintaining solid credit fundamentals. The firm's rating could be downgraded because of: (i) an unexpected decline in profitability metrics; (ii) a TCE / TMA ratio falling below 14% for a protracted period; and (iii) a loosening of underwriting criteria likely to result in higher credit risk and loan impairments. LIST OF ASSIGNED RATINGS Assignments: Issuer: Amigo Luxembourg S.A. BACKED Senior Secured Regular Bond/Debenture (Foreign Currency), Assigned (P)B1 Outlook Actions: Outlook, assigned Stable Issuer: Amigo Holdings Limited Corporate Family Rating, Assigned (P)B1 Outlook Actions: Outlook, assigned Stable BRADFORD & BINGLEY: Sale Process of Mortgages in Final Stages ------------------------------------------------------------- Emma Dunkley and Martin Arnold at The Financial Times report that a range of hedge funds and private equity firms -- but only one UK bank -- are in the final stages of bidding for GBP12.5 billion of Bradford & Bingley mortgages being sold by the UK government, according to people briefed on the plans. Paragon Bank has made it through to the last stage of bidding for the portfolio of loans, which comprises buy-to-let mortgages issued by Bradford & Bingley before its collapse in 2008, the FT discloses. The sale is set to be one of the biggest asset disposals by a European government, the FT notes. According to the FT, the sources said the bank, which launched in 2014 as part of Paragon, a specialist lender with expertise in buy-to-let, joins hedge fund groups Och-Ziff, CarVal Investors and Elliott Management in the final round, along with private equity firms Blackstone and Cerberus. The Bradford & Bingley sale is part of a broader effort by Philip Hammond, the chancellor, to offload state-backed assets and raise money, the FT states. Bradford & Bingley plc was a British bank with headquarters in the West Yorkshire town of Bingley. GARDEN BRIDGE: Trust Uncertain on Viability of Project ------------------------------------------------------ BBC News reports that the trust behind a project to build a bridge covered with trees and shrubs across the Thames in London has revealed it is "unable to conclude it is a going concern". The Garden Bridge Trust needs to raise an estimated GBP185 million to complete the project, BBC discloses. But its latest annual accounts show a shortfall of GBP56 million, BBC discloses. However, Garden Bridge Trust chair Lord Davies said trustees still expected construction to start this year, BBC notes. The trust's accounts for 2016 filed with Companies House show it has yet to secure the land on the South Bank of the Thames for the bridge's southern landing, BBC relates. According to BBC, they also show that the trust may need additional funding that would not be repayable "if the project is not able to proceed" in the first half of this year. And the accounts raise the possibility that "in a worst-case scenario" the trust might have to consider "whether the project remains viable", BBC states. If the project does not go ahead, London mayor Sadiq Khan has estimated that GBP40 million of public money already spent would be lost to taxpayers, BBC says. =============== X X X X X X X X =============== * BOOK REVIEW: Transnational Mergers and Acquisitions ----------------------------------------------------- Author: Sarkis J. Khoury Publisher: Beard Books Softcover: 292 pages List Price: $34.95 Review by Gail Owens Hoelscher Order your personal copy today at http://is.gd/hl7cni Transnational Mergers and Acquisitions in the United States will appeal to a wide range of readers. Dr. Khoury's analysis is valuable for managers involved in transnational acquisitions, whether they are acquiring companies or being acquired themselves. At the same time, he provides a comprehensive and large-scale look at the industrial sector of the U.S. economy that proves very useful for policy makers even today. With its nearly 100 tables of data and numerous examples, Khoury provides a wealth of information for business historians and researchers as well. Until the late 1960s, we Americans were confident (some might say smug) in our belief that U.S. direct investment abroad would continue to grow as it had in the 1950s and 1960s, and that we would dominate the other large world economies in foreign investment for some time to come. And then came the 1970s, U.S. investment abroad stood at $78 billion, in contrast to only $13 billion in foreign investment in the U.S. In 1978, however, only eight years later, foreign investment in the U.S. had skyrocketed to nearly #41 billion, about half of it in acquisition of U.S. firms. Foreign acquisitions of U.S. companies grew from 20 in 1970 to 188 in 1978. The tables had turned an Americans were worried. Acquisitions in the banking and insurance sectors were increasing sharply, which in particular alarmed many analysts. Thus, when it was first published in 1980, this book met a growing need for analytical and empirical data on this rapidly increasing flow of foreign investment money into the U.S., much of it in acquisitions. Khoury answers many of the questions arising from the situation as it stood in 1980, many of which are applicable today: What are the motives for transnational acquisitions? How do foreign firms plans, evaluate, and negotiate mergers in the U.S.? What are the effects of these acquisitions on competition, money and capital markets; relative technological position; balance of payments and economic policy in the U.S.? To begin to answer these questions, Khoury researched foreign investment in the U.S. from 1790 to 1979. His historical review includes foreign firms' industry preferences, choice of location in the U.S., and methods for penetrating the U.S. market. He notes the importance of foreign investment to growth in the U.S., particularly until the early 20th century, and that prior to the 1970s, foreign investment had grown steadily throughout U.S. history, with lapses during and after the world wars. Khoury found that rates of return to foreign companies were not excessive. He determined that the effect on the U.S. economy was generally positive and concluded that restricting the inflow of direct and indirect foreign investment would hinder U.S. economic growth both in the short term and long term. Further, he found no compelling reason to restrict the activities of multinational corporations in the U.S. from a policy perspective. Khoury's research broke new ground and provided input for economic policy at just the right time. Sarkis J. Khoury holds a Ph.D. in International Finance from Wharton. He teaches finance and international finance at the University of California, Riverside, and serves as the Executive Director of International Programs at the Anderson Graduate School of Business. ********* 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, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2017. 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. 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