/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/180420.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, April 20, 2018, Vol. 19, No. 078 Headlines B E L G I U M KBC GROUP: S&P Rates New Additional Tier 1 Capital Notes 'BB' I R E L A N D ELM PARK: S&P Assigns B- (sf) Rating to EUR14MM Class E-R Notes I T A L Y GAMENET GROUP: S&P Alters Outlook to Positive & Affirms 'B' ICR SAFILO SPA: Moody's Cuts CFR to B1 on Weak Operating Performance K A Z A K H S T A N KAZAGRO NATIONAL: S&P Withdraws 'BB-/B' Issuer Credit Ratings L U X E M B O U R G SAMSONITE FINCO: S&P Rates New EUR300MM Sr. Unsec. Notes 'BB+' R U S S I A AVB BANK: Bank of Russia Approves Bankruptcy Prevention Measures NATIONAL FACTORING: S&P Affirms 'B/B' ICRs, Outlook Stable S P A I N GRUPO ANTOLIN: S&P Rates EUR250MM Senior Secured Notes 'BB-' U N I T E D K I N G D O M BBA AVIATION: S&P Assigns BB Issuer Credit Rating, Outlook Stable BEAUFORT SECURITIES: Insolvency May Cost as Much as GBP100 Mil. BOURGEE RESTAURANTS: Placed Into Administration INMARSAT PLC: S&P Alters Outlook to Negative & Affirms 'BB+' ICR MOTHERCARE PLC: Chairman Steps Down Amid Rescue Talks SEADRILL LTD: Plans to Exit Chapter 11 in June or July X X X X X X X X * BOOK REVIEW: Hospitals, Health and People ********* ============= B E L G I U M ============= KBC GROUP: S&P Rates New Additional Tier 1 Capital Notes 'BB' -------------------------------------------------------------- S&P Global Ratings said that it has assigned a 'BB' long-term issue rating to the proposed perpetual additional Tier 1 (AT1) capital notes to be issued by KBC Group N.V. (BBB+/Stable/A-2). S&P said, "We understand from the proposed AT1 notes' terms and conditions that the instrument will comply with the EU's latest capital requirements directive (CRD IV) as part of its implementation of Basel III. We also understand that the preferred securities will rank senior to KBC Group's ordinary shares but subordinate to its more senior debt, including Tier 2 debt. "In accordance with our criteria for rating hybrid capital, our 'BB' rating on the AT1 notes is five notches below our 'a-' assessment of KBC's unsupported group credit profile." This five- notch difference represents: -- One notch to reflect subordination risk. -- Two additional notches to take into account the risk of nonpayment at the issuer's full discretion and the hybrid's expected inclusion in the issuer's Tier 1 regulatory capital. -- One notch due to a mandatory contingent capital clause that would lead to equity conversion if KBC Group's common equity Tier 1 (CET1) ratio falls below 5.125%. We do not consider this to be a going-concern trigger. -- One further notch to reflect structural subordination because the notes will be issued by KBC Group, a nonoperating holding company. -- Compliance with the minimum regulatory capital requirements is necessary to avoid the risk of potential restrictions in the payment of coupons on the AT1 notes. S&P views this risk as limited for KBC Group since its fully loaded CET1 ratio was 16.3% at year-end 2017, well above the 10.6% minimum set by the regulator under the supervisory review and evaluation process for 2017. S&P said, "Under our base case, we expect KBC Group will maintain a stable layer of AT1 instruments at the current level of EUR1.5 billion. Therefore, we consider that this AT1 issuance will only temporarily boost the bank's Tier 1 capital, since other instruments will most likely be called, in our view. This issuance is therefore neutral for our ratings on KBC Group and KBC Bank, the group's main operating entity. "We expect to assign intermediate equity content to the proposed notes since they meet our conditions." More specifically, they: -- Are perpetual, with a call date expected to be five or more years from issuance; -- Do not contain a coupon step-up; and -- Have loss-absorption features as a going concern, given that KBC Group has the flexibility to suspend the coupon at any time. ============= I R E L A N D ============= ELM PARK: S&P Assigns B- (sf) Rating to EUR14MM Class E-R Notes --------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Elm Park CLO DAC's class A-1-R, A-2-R, B-R, C-R, D-R, and E-R refinancing notes. The transaction is a collateralized loan obligation (CLO) managed by Blackstone/GSO Debt Funds Management Europe Ltd. At the same time, we have withdrawn our ratings on the original classes of notes. On April 16, 2018, the issuer refinanced the original class A-1 to E notes by issuing replacement notes of the same notional for each class. The replacement notes are largely subject to the same terms and conditions as the original notes, except for the following: -- The replacement notes have a lower spread over Euro Interbank Offered Rate (EURIBOR) than the original notes. -- The portfolio's maximum weighted-average life has been extended by 1.5 years to Nov. 26, 2025. -- The subordinated noteholders can only request a future full refinancing of the notes after April 15, 2019. -- The portfolio manager no longer has to comply with any minimum portfolio weighted-average recovery rate test. However, the manager still has to test its compliance with our CDO Monitor test during the reinvestment period. S&P said, "We have analyzed the portfolio by applying our "Global Methodologies And Assumptions For Corporate Cash Flow And SyntheticCDOs" criteria published on Aug. 8, 2016. The portfolio comprises two assets that we deem to be project finance assets, representing 1.35% of the total collateral. To these assets, we have applied our "CDOs Of Project Finance Debt: Global Methodology And Assumptions" criteria published on March 19, 2014. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that the replacement notes have adequate credit enhancement available at the current rating levels." Replacement notes Original notes Class Notional (EUR mil.) interest rate(%) interest rate (%) A-1 324.50 3mE+0.62% 3mE+1.50% A-2 60.50 3mE+1.20% 3mE+2.10% B 42.50 3mE+1.70% 3mE+3.15% C 26.25 3mE+2.45% 3mE+4.35% D 33.50 3mE+5.25% 3mE+6.40% E 14.00 3mE+7.25% 3mE+8.65% RATINGS LIST Elm Park CLO Designated Activity Company EUR1.059 bil senior secured floating-rate notes Amount Class Rating (mil, EUR) A-1-R AAA (sf) 324.50 A-2-R AA (sf) 60.50 B-R A (sf) 42.50 C-R BBB (sf) 26.25 D-R BB (sf) 33.50 E-R B- (sf) 14.00 ========= I T A L Y ========= GAMENET GROUP: S&P Alters Outlook to Positive & Affirms 'B' ICR --------------------------------------------------------------- S&P Global Ratings said that it has revised its outlook on Gamenet Group S.p.A. to positive from stable. At the same time, S&P affirmed its 'B' long-term issuer credit rating on Gamenet. S&P said, "We assigned our 'B' issue rating to the proposed EUR225 million senior secured notes Gamenet will use to refinance the existing EUR200 million senior secured notes. The recovery rating on these notes is '3', reflecting our expectation of meaningful recovery prospect (50%-70%; rounded estimate 65%) in the event of payment default. "We expect to withdraw the issue and recovery ratings on the existing EUR200 million senior secured notes once the refinancing is completed. "We revised the outlook to positive from stable based on Gamenet's sound 2017 operating performance and improving liquidity, and our expectation of further stabilization in the business once the betting licenses are renewed. Historically focused on the gaming machine segment, Gamenet is, in our view, implementing a sound diversification strategy to gain scale and maintain growth in a mature, competitive, and highly regulated market environment. In addition, the proposed refinancing should enable Gamenet to continue focusing on implementing its growth strategy, as it will strengthen its liquidity position and extend maturity of the capital structure. "In our view, the company's business profile has improved since the integration of Intralot, which expanded the product offering into sports betting and online segments. "Moreover, the bolt-on acquisitions that target vertical integration in the gaming machine segment further strengthen the business model, as it increases its control and share of revenues in the value chain. Gamenet's solid execution of its strategy enhanced its operating performance while mitigating the negative impact of the latest regulatory and tax developments affecting the gaming machine segment. The contribution margin gradually improved to 23% in 2017 from 21% in 2016. In addition, credit metrics strengthened as the company gained scale. The S&P Global Ratings-adjusted debt-to-EBITDA ratio decreased to 3.1x in 2017 from 3.4x in 2016 and EBITDA interest coverage rose to 4.9x in 2017 from 3.2x in 2016. Free operating cash flow (FOCF) also improved in 2017 to EUR24 million from EUR2 million in 2016. However, the company's smaller scale compared with rated peers', and limited geographic diversification in a market with constant changes in regulation and taxation, remain the main constraints to the rating. S&P said, "We believe Gamenet's FOCF will remain subdued for the next two years as it continues investing in expansion and license renewals. We understand most of the capital expenditures (capex) are discretionary, but we believe these investments are important for Gamenet to further develop its position in the very competitive Italian gaming market." In addition, the betting licenses tender has been further delayed by the Italian authorities. The timing of their renewal and the economic impact on the company remain uncertain, since the required price could differ from management's expectations. Furthermore, the Italian regulator introduced new industry- specific taxes and restrictions last year, and S&P does not yet fully capture their potential impact on the industry. S&P said, "In our view, Gamenet's recent IPO could have positive implications on the rating in the future, but we expect more developments in the ownership structure, given that the current owners did not fully meet their objective of reducing their stake in Gamenet. A further exit of the financial sponsor and additional free float could support our understanding that the company will maintain a moderate financial policy. "The positive outlook reflects our view that Gamenet's business profile will continue to improve as it gains scale and further diversifies its operations, while we believe the regulatory and operating environment will stabilize. Additionally, we expect the company will renew its expired betting licenses at a price commensurate with our expectations. "We could consider an upgrade of Gamenet over the next 12-18 months if we saw the company gaining scale, further diversifying its business operations through its growth strategy, and managing the pressure in the gaming machine segment. Accompanying this would be stabilization of the regulatory framework in Italy. We could also raise the ratings if Gamenet successfully renews its expired licenses, at a price that is in line with our expectations, accompanied by substantial and sustainable positive FOCF generation, while maintaining S&P Global Ratings-adjusted debt to EBITDA of 3.0x-3.5x. "We could revise the outlook to stable if Gamenet fails to deliver on its growth plan and manage pressure on the gaming machine segment, and if further pressure from regulatory developments affect profitability. We could also revise the outlook to stable if FOCF were to weaken, either as a result of a tougher operating environment or because of higher payments for license renewals than we anticipate. Evidence of a more aggressive financial policy could also lead to a sustained weakening of Gamenet's credit metrics and therefore trigger a negative rating action." SAFILO SPA: Moody's Cuts CFR to B1 on Weak Operating Performance ---------------------------------------------------------------- Moody's Investors Service has downgraded Safilo S.p.A.'s corporate family rating (CFR) to B1 from Ba3 and its probability of default rating (PDR) to B1-PD from Ba3-PD. The outlook on the rating is stable. "The rating downgrade reflects the deterioration in Safilo's credit metrics, following a very weak operating performance in 2017, partially due to an exceptional event, and our expectation that metrics will only gradually improve over the next 24 months" says Lorenzo Re, a Moody's Vice President - Senior Analyst and lead analyst for Safilo. RATINGS RATIONALE Safilo's operating performance deterioration in 2017 was worse than Moody's expectations. During the year the company's reported EBITDA collapsed to EUR26 million (including the accounting of EUR43 million relative to the compensation from Kering for the Gucci license termination) from EUR81 million in 2016, which caused free cash flow to turn negative and leverage to increase to approximately 5.4x from 2.5x in 2016. In addition to the termination of the Gucci license, that was expected and already factored into our rating and forecasts, 2017 results were negatively affected by 1) an IT issue occurred in 1Q17 that impacted deliveries and order taking, and 2) subdued trading conditions in the US. While the IT issue was resolved already in 2Q17, the sales recovery has been slower than anticipated and operating results continued to be poor in 2H17. Moody's expects that Safilo operating performance will gradually improve in the next 24 months on the back of 1) the continued efforts to reduce costs; 2) modest organic revenue growth, driven mainly by emerging markets, offsetting the decline from the gradual phase out of the production agreement with Gucci. The agency anticipates that Safilo EBITDA margin will recover to mid- single digit as a percentage of sales in the next 18-24 months. However, cash flow generation is expected to remain weak, notwithstanding the payment in October 2018 of the last EUR30 million instalment from Kering as a compensation for the early termination of the Gucci licence. Moody's therefore expects that leverage will remain high at above 4.5x through 2019, a level that is no longer commensurate with a Ba3 rating. The B1 rating is supported by Safilo's sound business profile, underpinned by its market leadership position as one of the largest global eyewear manufacturers, its portfolio of licensed and proprietary brands, and its broad and well-balanced geographical diversification. However, the rating also reflects Safilo's exposure to the fashion industry and overall macroeconomic dynamics and its relatively high license concentration, coupled with the risk of license loss. In particular, this latter risk has in our view increased following the creation of a joint venture between Safilo's competitor Marcolin S.p.A. (B2 stable) and the French luxury-goods company LVMH Moât Hennessy Louis Vuitton (LVMH). Some LVMH's brands, currently licensed to Safilo's, could be progressively transitioned into this new joint venture upon expiration of the current license agreements between 2020 and 2024. The ratings incorporate some moderate M&A risk, which has increased since the termination of the Gucci licence and in light of the possible loss of some LVMH brands. However, this is mitigated by the historically low appetite for leverage, that Moody's expects will be maintained. In particular, the agency assumes that Safilo will continue to pay no dividends in the next few years. Lastly, the rating reflects Safilo's weakened liquidity position, owing to the deterioration in the operating cash flow, which we expect to remain negative for the next two years. Liquidity is supported by of EUR77 million of cash as of December 2017 and will benefit from the last EUR30 million of the Kering compensation, to be paid in October 2018. However, this barely covers for EUR65 million short term debt (although this has been rolled-over historically) and the expected EUR35 million capex needs. Safilo has a fully available EUR150 million RCF that however matures in June 2018 and therefore needs to be refinanced shortly. RATIONALE FOR STABLE OUTLOOK The stable outlook on the ratings reflects Moody's expectation that Safilo will gradually recover its operating performance, with modest organic revenue growth and EBITDA margin improving towards the mid-single digits in the next 18-24 months. Our stable outlook also factors in a successful refinancing of Safilo's EUR150 million RCF as well as the risk of the LVMH not being renewed upon expiration. WHAT COULD CHANGE THE RATING UP/DOWN Moody's could consider an upgrade if Safilo's operating performance were to materially improve with recovery in operating profitability, Moody's adjusted gross debt/EBITDA reducing below 3.5x and free cash flow returning positive. In addition, Moody's would require an improvement in the group's business profile, with lower dependence from licensed brands and lower revenue concentration. Safilo's rating could be lowered if 1) liquidity weakens and/or free cash flows remains sustainably negative, or 2) Moody's adjusted gross debt/EBITDA ratio is not reduced below 5.0x in the next 12-18 months, trending to 4.5x thereafter. COMPANY PROFILE Headquartered in Padua, Italy, Safilo S.p.A. is a global manufacturer and seller in the premium eyewear sector, offering a strong portfolio of both owned and licensed brands. The group sells sunglasses, prescription glasses and sport-specific eyewear in more than 130 countries. In 2017, Safilo reported sales of EUR1,047 million and EBITDA of EUR26 million. =================== K A Z A K H S T A N =================== KAZAGRO NATIONAL: S&P Withdraws 'BB-/B' Issuer Credit Ratings ------------------------------------------------------------- S&P Global Ratings said that it withdrew its 'BB-/B' long- and short-term foreign and local currency issuer credit ratings on Kazakhstan-based KazAgro National Management Holding JSC. S&P also withdrew its 'BB-' issue ratings on the company's senior unsecured debt and its 'kzBBB+' national scale rating on the company. The outlook on the issuer credit rating was stable at the time of the withdrawal. =================== L U X E M B O U R G =================== SAMSONITE FINCO: S&P Rates New EUR300MM Sr. Unsec. Notes 'BB+' -------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating to Samsonite Finco S.a.r.l's (a subsidiary of Samsonite International S.A.) proposed EUR300 million senior unsecured notes due 2026. The recovery rating is '4', indicating S&P's expectation for average (30% to 50%; rounded estimate 35%) recovery in the event of a payment default. The '4' recovery rating reflects the fact that about 40% of the company's cash flows are not pledged to the senior secured credit facilities, leaving some value for unsecured bond holders. The issuance of the proposed notes is a part of the company's refinancing plans whereby it recently launched a $650 million revolver due 2023, $828 million term loan A due 2023, and $667 million term loan B due 2025. The company will use the proceeds from the proposed notes, term loans, and about $64 million drawn on the new revolver to repay $1.2 billion in existing term loan A, $667 million in term loan B, and $64 million on its existing revolver. All issue-level ratings are subject to review upon receipt of final documentation. S&P believes this is a leverage-neutral transaction, and pro forma for the refinancing we believe the company will have about $2.2 billion of lease- and pension-adjusted debt. Refinancing transactions will help reduce the company's interest cost and push out its debt maturities. This issuance will provide access to the European bond markets and provides a natural hedge against currency fluctuations. Samsonite has reduced its adjusted leverage to about 3.0x for fiscal 2017 through improvement in its profitability and debt repayment since acquiring Tumi Inc. in August 2016. S&P expects the company to maintain debt leverage below 3x over the intermediate term. Samsonite is the largest global designer, manufacturer, and distributor of luggage, business and computer bags, outdoor and casual bags, travel accessories, and slim protective cases for personal electronic devices. The company has a broad portfolio of established and well-known brands that include Samsonite, Tumi, American Tourister, Hartmann, High Sierra, Gregory, Speck, and Lipault. ISSUE RATINGS--RECOVERY ANALYSIS The company's proposed capital structure will consist of: -- $650 million revolver due 2023 -- $828 million term loan A due 2023 -- $667 million term loan B due 2025 -- EUR300 million senior unsecured notes due 2026 -- Security and guarantee package The issuer of the proposed notes is Samsonite Finco S.a.r.l., a new financing subsidiary of Samsonite International S.A. The entity has no operations and the debt will be serviced by the cash flows of the company's European operations. The notes are senior unsecured obligations that are subordinated to the company's proposed senior secured credit facilities and future senior secured facilities. Guarantors include all wholly owned domestic restricted direct and indirect subsidiaries, but are subordinate to the senior secured credit facilities. Key analytical factors S&P said, "We do not expect a decline to occur in the near term, given the company's moderate leverage, global scale, and good growth prospects. However, our simulated default scenario assumes a payment default in 2023 and loss of revenues and cash flows from a major decline in global economic conditions, resulting in substantially reduced discretionary spending and travel." Subsequently, the company may find itself in the position of having to fund cash flow shortfalls with available cash and revolver borrowings. Eventually, the company's liquidity and capital resources become strained to the point where it cannot continue to operate without an equity infusion or bankruptcy filing. -- Year of default: 2023 -- EBITDA at emergence: $339 million -- Implied enterprise value multiple: 6x The default EBITDA of $339 million roughly reflects fixed charge requirements of about $130 million in interest costs (assuming a higher rate because of default and includes prepetition interest), $48.1 million in term loan amortization, and $52.4 million in minimal capex assumed at default. S&P said, "We apply a 40% operational adjustment as we believe the fixed charges of the company undervalue the company given its relatively lower debt leverage. We estimate a gross valuation of $2 billion assuming a 6x EBITDA multiple that is within the range we used for some of the company's peers." Simulated default assumptions -- Debt service assumption: $178.3 million (assumed default year interest plus amortization) -- Minimum capex assumption: $52.4 million -- Operational adjustment: 40% -- Emergence EBITDA: $339.1 million Simplified waterfall -- Gross recovery value: $2 billion -- Net recovery value for waterfall after administrative expenses (5%): $1.9 million -- Obligor/non-obligor valuation split: 60%/40% -- Collateral value available to secured first-lien debt: $1.7 billion -- Estimated senior secured first-lien claims: $1.9 billion -- Recovery range for senior secured debt: 90%-100%, rounded estimate: 90% -- Collateral value available to senior unsecured debt: $249.7 million -- Estimated senior unsecured claims: $380.6 million -- Recovery range for senior unsecured debt: 30%-50%, rounded estimate: 35% RATINGS LIST Samsonite International S.A. Corporate Credit Rating BB+/Stable/-- New Rating Samsonite Finco S.Ö r.l. Senior Unsecured EUR300 mil sr notes due 2026 BB+ Recovery Rating 4(35%) =========== R U S S I A =========== AVB BANK: Bank of Russia Approves Bankruptcy Prevention Measures ---------------------------------------------------------------- The Bank of Russia approved the plan of its participation in the bankruptcy prevention measures for joint-stock company AVTOVAZBANK (Reg. No. 23) (hereinafter, JSC AVB Bank, Bank, Participation Plan). As part of the Participation Plan, FBSC AMC Ltd. is vested with the authority of a provisional administration of JSC AVB Bank from April 5, 2018. The measures provided for by the Participation Plan will ensure that the Bank continues its activity with regard to servicing its clients and performing its existing obligations. The current development of the bank's status has been detailed in a press statement released by the Bank of Russia. NATIONAL FACTORING: S&P Affirms 'B/B' ICRs, Outlook Stable ---------------------------------------------------------- S&P Global Ratings affirmed its 'B/B' long- and short-term issuer credit ratings on Russia-based National Factoring Co. (NFC). The outlook remains stable. S&P said, "The affirmation reflects our view that NFC will maintain its stable market share and customer base on the factoring market over the coming one to two years, owing to its flexible and sophisticated operational model, focus on small- ticket transactions, and good brand recognition. We also believe that NFC's asset quality will remain stable, supported by traditionally conservative underwriting standards, proactive risk management, and the short-term nature of its factoring advances. Although NFC's capital adequacy will likely deteriorate, as we expect growth will exceed internal capital generation, we think NFC's capital buffer is sufficient to absorb this growth in the next 12-18 months without weakening its capital position and credit profile overall." In 2017, NFC demonstrated solid business growth: The factoring portfolio increased by about 33% (versus 41% for the market) and its operating revenues grew by 13.5%. NFC remains a key player in its niche on the factoring market, focusing mainly on small and midsize enterprises and transactions. S&P thinks that NFC's expertise in its niche and its advanced operating model enable the company to secure its market position and clientele against the competitive threat from other players, mainly large state banks. Nevertheless, NFC remains a relatively small monoline bank with a market share of about 4.5% and extracts its revenues from factoring alone. It still demonstrates modest profitability, which will likely be constrained by weak operating efficiency and a declining margin. S&P said, "We expect that NFC's business growth will likely be close to the market average over the next two years, with the factoring portfolio increasing by 20%-25%. At the same time, we think that profitability will remain modest--we forecast return on equity of 7%-10%--mainly resulting from continuing margin pressure and only slight improvement in operating efficiency. We therefore expect that NFC's capital adequacy will deteriorate, with our risk-adjusted capital (RAC) ratio declining to 6.2%-6.7% in the next 12-18 months. However, we expect capitalization to remain a neutral factor for the rating since the company still has a sufficient capital buffer to absorb losses and support growth." Over the past year, the company's asset quality has remained broadly stable, with the cost of risk declining to 1.1%. S&P said, "In our view, the bank's risk position remains stronger than that of its peers, reflecting conservative underwriting standards and proactive risk-management to avoid sectors with growing risks. The high turnover of NFC's factoring portfolio, which is about 54 days on average, and the small size of its transactions, also help to keep credit losses relatively low. Finally, we think that the insurance of large nonrecourse factoring is a very important factor, which helps to secure the company's net income and capital against potential defaults of its debtors." NFC's funding profile remains highly dependent on short-term resources provided by BANK URALSIB, which represents about 70% of its total liabilities. S&P said, "We recognize that BANK URALSIB's funding has been relatively stable and enabled NFC to attract funds at lower-than-midmarket rates. We also think that refinancing risk for this funding is low, taking into account close ties between NFC and BANK URALSIB through Vladimir Kogan, who owns both, as well as a good match between short-term factoring advances and funding. Nevertheless, we think that NFC cannot easily attract market funding without materially hurting its margin and profitability, which reduces the flexibility of its funding profile and business model overall." S&P said, "The stable outlook reflects our view that NFC's asset quality will remain relatively stable in the next 12 months, thanks to the company's conservative approach to risk management. The outlook also reflects our expectations that high dependence on funding from related parties will not weigh on the stability of NFC's funding profile, while the company will maintain capital buffers to support growth over the coming 12 months. "We could revise the outlook to negative or lower ratings in the next 12 months if we see that growth of NFC's factoring portfolio exceeds our expectations and leads to increased pressure on the company's capital adequacy. We could also consider a negative rating action if BANK URALSIB fails to provide funding to NFC as expected, which may put pressure on NFC's liquidity and weigh on the sustainability of the business model. "A positive rating action is remote in our view. We would consider revising the outlook to positive if NFC diversifies its funding profile by term and counterparty, but we believe this will take time. We could also consider a positive rating action if we observe a major improvement in operational efficiency and profitability, with stable revenues and customer base." ========= S P A I N ========= GRUPO ANTOLIN: S&P Rates EUR250MM Senior Secured Notes 'BB-' ------------------------------------------------------------ S&P Global Ratings said that it affirmed its 'BB-' long-term issuer credit rating on Grupo Antolin Irausa SA (Grupo Antolin). The outlook remains stable. S&P said, "We also assigned our 'BB-' issue rating to the proposed EUR250 million senior secured notes to be issued by Grupo Antolin. The recovery rating is '3', indicating our expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in case of a default. We expect to withdraw our ratings on the group's existing EUR400 million senior secured notes 5.125% due 2022 issued by Grupo Antolin Dutch B.V., once they are redeemed at the closing of the new issuance. "At the same time, we affirmed our 'BB-' issue ratings on the company's existing senior secured notes and bank loans. The recovery rating remains '3', indicating our expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in case of a default. "The affirmation of the ratings and stable outlook reflect our expectation that Grupo Antolin will maintain a broadly steady operating performance in 2018/2019, with annual revenues of EUR5.0 billion-EUR5.2 billion and an S&P Global Ratings-adjusted EBITDA margin of about 8%. We also expect positive free operating cash flow (FOCF) to support stable leverage metrics, including adjusted funds from operations (FFO) to debt of 20%-22%." Grupo Antolin's 2017 reported revenues were 4% lower at EUR5.0 billion, and S&P Global Ratings-adjusted EBITDA declined by 14% to EUR402 million, at a margin of 8.0%, compared with 8.9% a year earlier. This fall in revenues was mainly due to the disposal of the group's seating business in April 2017. Furthermore, FOCF was negative due to higher spending on working capital and capital expenditure (capex) while adjusted debt was stable at EUR1.3 billion. The ratio of FFO to debt was within our expected 20%-25% range, albeit weaker, at 21%, compared with 24% a year earlier. For the first two months of 2018, reported EBITDA was weaker year-on-year. For the 12 months to February 2018, Grupo Antolin's reported EBITDA was EUR44 million lower at EUR426 million. Compared with first quarter (Q1) 2017 reported EBITDA of EUR158 million, this is quite significant. The decrease in EBITDA mainly reflects higher costs for product launches and project ramp-ups, but we expect this shortfall to be largely recovered during the rest of the year. S&P's base case for 2018 and 2019 assumes: -- Real global GDP growth in 2018 of 3.9%, with 2.1% for Western Europe and 2.9% for the U.S. -- Slight growth in global car production of around 2% per year. -- Similar rate of revenue growth to EUR5.0 billion-EUR5.2 billion. -- Stable adjusted EBITDA margins of about 8%. -- Reported annual capex of about EUR350 million. -- Positive FOCF. -- Limited annual dividends of EUR30 million. -- No major acquisitions or disposals. Based on these assumptions, S&P arrives at the following credit measures: -- FFO to debt between 20%-22% at year end. -- Debt to EDITDA 3.5x-3.2x. S&P said, "Our ratio forecasts could be at risk if the weaker start-of-2018 results do not largely recover later in 2018, as we expect margins and leverage metrics in Q1 and Q2 to be a bit weaker than for the same periods in 2017. "Our ratings on Grupo Antolin continue to be supported by its well established market position in the design and manufacturing of interior car components. Offsetting factors include our view that its product offering is lower value-added compared with other segments, and profitability is weaker than certain industry peers, such as fellow Spanish auto-supplier Gestamp Automoci¢n, S.A., which posted an EBITDA margin of 11% in 2017. However, Gestamp is not a direct competitor." On Dec. 31, 2017, our adjusted debt figure of EUR1.3 billion included EUR0.4 billion for operating leases and pensions, and was stated after netting surplus cash balances of EUR0.3 billion. Headquartered in Spain, Grupo Antolin is a leading automotive supplier of interior components to global car makers, notably overhead systems and soft trim, doors and hard trim, cockpits, and lighting. Revenues of EUR5.0 billion in 2017 were derived mainly in Europe (53%) and North American Free Trade Agreement (35%) regions. S&P said, "The stable outlook reflects our view that Grupo Antolin will post an adjusted EBITDA margin of about 8% in 2018. However, we note that current trading results are weaker year-on- year. We also expect positive FOCF and an FFO-to-debt ratio of 20%-22%. "We could lower the ratings if we expect the weaker profit margins seen so far in 2018 to persist below 8% for the year as a whole, or if FFO to debt reduced and remained below 20%. We could also lower the ratings if the group carried out debt-financed acquisitions or significantly increased shareholder remuneration, neither of which we expect. "We do not expect to raise the ratings during the next year, but could do so if adjusted EBITDA margins recovered on a sustainable basis to above 10%, and FFO to debt rose above 25%, supported by positive FOCF generation. An upgrade would also depend on management committing to sustaining stronger credit ratios." =========================== U N I T E D K I N G D O M =========================== BBA AVIATION: S&P Assigns BB Issuer Credit Rating, Outlook Stable -------------------------- -------------------------------------- S&P Global Ratings said that it assigned its 'BB' long-term issuer credit rating to U.K.-based aviation services provider BBA Aviation PLC (BBA). The outlook is stable. S&P said, "We also assigned our 'BB' long-term issuer credit rating to BBA U.S. Holdings Inc., BBA's core subsidiary (as our criteria define the term) which holds the company's U.S. group of businesses, and our 'BB' issue rating to the proposed $500 million senior unsecured notes due 2026, to be issued by BBA U.S. Holdings Inc. The recovery rating is '3', reflecting our expectation of meaningful (50%-70%, rounded estimate: 60%) recovery prospects in the event of a payment default. "The rating reflects our assessment of BBA's business risk profile as satisfactory, which mirrors the company's well- established position as the world's largest provider of fixed- base operations (FBO) services to the general and business aviation (B&GA) market. BBA's Signature Flight Support businesses operate from 198 locations worldwide, of which 139 are in the largest B&GA market, North America, and 59 are across the rest of the world. "We believe that BBA benefits from its large network of key airport sites -- secured under long-term leases -- wide range of general and business aviation support services, high-quality solutions for maturing and legacy aerospace platforms, and knowledge of aircraft engines. The FBO market has high barriers to entry due to scarce airport property and leases that can last up to 25 years (BBA's average lease term was 18 years across the U.S. FBOs at year-end 2017). This typically results in limited competition at most airports but also curbs expansion opportunities. After the acquisition of Landmark (completed in February 2016), BBA is the market leader in the U.S. FBO market with 139 FBOs under its Signature brand. The next largest competitor, Macquarie-owned Atlantic Aviation, is about half of BBA's size based on the number of FBOs in North America. BBA has FBOs in 37 of the top 50 B&GA airports in the U.S. and has a well-diversified customer base. Relatively high absolute profitability, with an adjusted EBITDA margin of about 26%-27% in the next two years, and likely sustained average earnings volatility further underpin the company's competitive position. That said, our assessment incorporates the competitive and cyclical nature of the general aviation market, which constrains BBA's business profile despite its high market share in this niche market. "Our rating also reflects BBA's solid operating performance in 2017 and our expectation that this will continue in the next two years. The environment in BBA's focus U.S. market for B&GA remains supportive. Signature -- BBA's largest segment by far by EBIT contribution -- as the market leader in providing FBO services to B&GA, should benefit from this positive industry- growth trend, further underpinned by its enlarged network opportunities after the Landmark acquisition. We believe that BBA's successful completion of network contract negotiations with its largest customers and its continued progress with the rest of the customer base cements the company's network strength. Amid BBA's continuous acquisition of new licenses, we expect further positive momentum for the legacy support business, Ontic, which is BBA's second-largest segment by EBIT contribution. "We anticipate that BBA's cash flow and leverage metrics will be consistent with an aggressive financial profile. This leads to our forecast that the company's operating cash flows will exceed cash outflows for capital expenditures and progressive dividends, with S&P Global Ratings-adjusted weighted-average funds from operations (FFO) to debt remaining at 15% or higher. After the material increase in adjusted debt -- because of the Landmark acquisition -- to about $3 billion at end-2016 from about $700 million at end-2015 (including $1.5 billion in operating leases from long-term commitments for FBOs), we do not anticipate that financial leverage will increase in 2018-2019 from $2.8 billion in adjusted debt as of Dec. 31, 2017. "We do not incorporate any large acquisitions in our base case, considering that further consolidation in the largest FBO market in North America is limited because of the lack of available targets and likely antitrust restrictions. We believe, however, that BBA will pursue its progressive dividend distributions, which will constrain its ability to generate excess cash flows and deleverage." S&P's base case assumes: -- The B&GA market will maintain a long-term through-cycle correlation to the GDP development. Because BBA generates the majority of revenue in the U.S. (85% in 2017), followed by the U.K., S&P is guided by U.S. and U.K. GDP trends. S&P forecasts U.S. GDP growth of 2.9% in 2018 and 2.6% in 2019 (from 2.3% in 2017), and U.K. GDP growth of 1.3% in 2018 and 1.5% in 2019 (from 1.7% in 2017). -- Annual revenue growth of around 4.0% in 2018-2019, largely driven by the robust B&GA market in the U.S. and benefits of the enlarged network after the acquisition of Landmark. Growth will also be supported by good performance from the legacy license business of Ontic, underpinned by the continuous investment into new licenses. -- Reported EBITDA margins of 18%-19% in 2018-2019, slightly up on 2017, on the back of the completed integration of Landmark and corresponding synergies, and Ontic's solid operating performance. -- Annual capital expenditures (capex) of about $100 million- $110 million in 2018-2019 for maintenance and special projects, as per BBA's guidance. -- Investments of $30 million-$35 million in licenses for Ontic. -- Progressive dividend policy with the aim of increasing core dividends in line with long-term underlying growth in earnings. S&P said, "We believe that BBA might consider extra distributions, subject to the company's surplus cash generation, while maintaining the leverage ratio of 2.5x- 3.0x, as defined by BBA, which is consistent with the 'BB' rating. We did not capture such extra dividends in our base case because the magnitude and timing of these is uncertain." Based on these assumptions, S&P arrives at the following credit measures: -- Weighted average adjusted FFO to debt of 15%-17% in 2018- 2020, compared with 15%-16% in 2017. -- Weighted-average adjusted debt to EBITDA of 4.0x-4.5x in 2018-2020, compared with around 4.5x in 2017. S&P said, "The stable outlook reflects our view that BBA will sustain its solid cash flow generation and maintain a ratio of adjusted FFO to debt of at least 15% in the next 12 months. We also think that BBA will maintain its progressive dividend distributions and that potential extra shareholder distributions will not lead to ratios falling short of our guidelines for the 'BB' rating. "We could lower our rating if BBA failed to sustain adjusted FFO to debt of at least 15%. This could happen, for example, if the group's financial policy becomes more aggressive than we currently envisage, involving larger-than-expected shareholder returns with no corresponding growth in cash flows, or unexpected debt-funded acquisitions. We could also lower the rating if EBITDA generation deteriorated due to, for example, unexpected losses of key customers, pricing constraints, or increasing costs (with an inability to pass through cost inflation), potentially amplified by the continued large dividend payouts. "We consider an upgrade to be unlikely because of BBA's intention to pursue its progressive dividend distributions and potentially make additional shareholder returns subject to excess cash flow generation. We could take a positive rating action, however, if BBA revised its financial policy and used free cash flows for debt repayments, such that adjusted FFO to debt sustainably improved to more than 20%." BEAUFORT SECURITIES: Insolvency May Cost as Much as GBP100 Mil. --------------------------------------------------------------- Hannah Murphy at The Financial Times reports that administrators for Beaufort Securities, the disgraced UK broker that was closed down by regulators in March, have said it could cost as much as GBP100 million to return the cash and assets held by the company, currently valued at GBP550 million, to its thousands of private investor clients. The administrative cost of carrying out insolvency proceedings for Beaufort Securities will be "in the tens of millions of pounds", according to Russell Downs, a joint administrator and partner at PwC, which was brought in by the Financial Conduct Authority after it shut Beaufort just hours before the US Department of Justice brought criminal charges, the FT relates. Mr. Downs, as cited by the FT, in the worst-case scenario -- in which the process stretches out over four years -- the costs could rise to GBP100 million. This would include among other things, PwC's fees, the cost of legal advisers to PwC, and of keeping on several staff from Beaufort to help with the process, the FT notes. He said that of the 15,000 investors that used the broker, those with the largest portfolios will probably bear more of the cost, the FT relays. According to an update sent to investors by PwC last week, the value of assets held by Beaufort has been revised down to GBP500 million from an earlier estimate of GBP800 million, because of the discovery of "a number of highly illiquid and potentially nil value" positions, the FT discloses. The value of client money has stayed the same at GBP50 million, the FT notes. The administrator is currently working out how to allocate costs across Beaufort's clients, the FT says. PwC said that "the majority" of clients had balances of up to GBP50,000 and are likely to receive the full value of their portfolios back from September onwards, according to the FT. However, it said that about 700 clients with portfolios of more than GBP150,000 in cash and assets might not be able to recover the full value, the FT relates. Mr. Downs added that it was highly unlikely that the administrators would be able to pay out anything to unsecured creditors, the FT relays. According to the FT, he also noted that Beaufort had been in financial difficulty for some time. BOURGEE RESTAURANTS: Placed Into Administration ----------------------------------------------- Caroline Ramsey at Business Sale reports that Bourgee Restaurants, the company that runs a chain of popular diners that serve both steak and lobster has been placed into administration, placing the future of its four restaurants into doubt. Bourgee Restaurants, which has three restaurants in Essex, a fourth in Bury St Edmunds and two further venues on the way in Norwich and Colchester, appointed Mark Upton -- mark.upton@ensors.co.uk -- and David Scrivener -- david.scrivener@ensors.co.uk -- of Ensors Accounts as administrators on April 10, Business Sale relates. According to Business Sale, though no official news has been shared by the restaurant group, its owners or administrators, the firm's original, flagship location on Southend's seafront suddenly closed last week. A note on its door said it would be "closed until further notice", while enquiries made to the company's email account suggest that the restaurant could reopen under new ownership, Business Sale discloses. As Bourgee Restaurants is only part of the whole group of companies that manage Bourgee locations, it is unclear as yet how the administration will affect the other restaurants across the group, Business Sale states. INMARSAT PLC: S&P Alters Outlook to Negative & Affirms 'BB+' ICR ---------------------------------------------------------------- S&P Global Ratings revised to negative from stable its outlook on U.K.-based satellite services operator Inmarsat PLC. S&P said, "We affirmed our 'BB+' long-term issuer credit rating on the company. The outlook revision incorporates the risk of weaker operating performance than our current base case, given our belief that competition could intensify and satellite supply increase materially over the short to medium term." S&P said, "We believe the group's markets are increasingly challenging and competitive, although Inmarsat delivered performance in line with our expectations during 2017 and we still expect steady growth in underlying revenue and EBITDA (excluding payments from customer, Ligado, which will stop in 2019). We take as an example plans by competitor, Iridium, to undercut Inmarsat on price in an attempt to gain maritime market shares from the current market leader. We therefore don't exclude a shrinkage of Inmarsat's revenue and EBITDA because of accruing satellite capacity and price pressure. "At this stage, however, the rating affirmation reflects our expectation that Inmarsat will overall successfully defend its maritime business (44.3% of revenues excluding Ligado), enjoy strong growth traction in aviation, and maintain credit metrics in line with the current rating, such as adjusted debt to EBITDA below 3.5x and funds from operations (FFO) to debt of more than 20%. In particular, the recently announced sharp cut in future dividend distribution will contribute to protecting Inmarsat's cash flow generation and mitigating the planned loss of payments from Ligado from 2019. "We continue to believe that Inmarsat will leverage its leading position in the mobile satellite services industry, its strong in-orbit and on-the-ground infrastructure, with worldwide coverage and its vertical integration with its distribution business. These strengths should translate into revenues (excluding Ligado) expanding about 6%-7% per year over 2018-2020, underpinned by continued investment in aviation and cabin connectivity and the fully operational Global Xpress (GX) program. In 2017, Inmarsat has strengthened its Inmarsat-5 (I-5) satellite galaxy, with the successful launch of I-5 F4, providing excess in-orbit capacity for the global GX network and additional capacity for new regional growth opportunities. These GX- dedicated satellites have enabled the group to add significant capacity, providing global Ka-band coverage, in addition to its proven L-band network and allowing its customers to have reliable access to high throughput communications. GX is therefore in an expansion phase and is attracting strong customer interest across the group's aviation, maritime, and government segments. What's more, the group is increasingly investing in aviation cabin connectivity opportunities, which builds upon the GX platform and the European Aviation Network, whose dedicated S-band satellite was launched on June 29, 2017. We believe that this division will enjoy very high growth rates in the coming years, driven by global growth in aviation and business jets, combined with higher average revenues per user from superior GX technology versus L band. We also expect in-flight cabin connectivity will progressively grow in the long term, as signed long-term contracts will start contributing to the group's revenues and EBITDA. "Our view of Inmarsat's financial risk profile continues to be constrained by our expectation of adjusted debt to EBITDA of between 3.1x and 3.2x in 2018, deteriorating to about 3.4x in 2019 when Inmarsat will stop receiving high-margin payments from Ligado. The latter will also affect free operating cash flow (FOCF), which we expect will be slightly negative in 2019 because capital expenditure (capex) will remain high, between $500 million and $600 million per year over the period 2018-2020. That said, the significantly lowered dividend policy--annual cash dividend payments of $80 million per year over 2018-2020, down from $202.9 million in 2017--will significantly cushion the continuously heavy investments, and should translate into credit metrics still commensurate with the rating. "The negative outlook reflects that we could downgrade Inmarsat by one notch in the next 6-12 months if in-flight connectivity ramp-up is slower than expected or fails to sufficiently offset any potential softness in the maritime segment. "We could lower the rating if adjusted debt to EBITDA exceeded 3.5x, or if FOCF, before one-time tax payments, turned negative or only breakeven for a prolonged period. A downgrade could also be triggered if we thought the company's business risk profile had deteriorated, based on evidence that rising competition was weakening the company's resilience. This could result from a combination of lower revenues and EBITDA, increased supply, and more aggressive competitors. "We could revise our outlook to stable if GX and aviation connectivity business significantly ramp up and boost Inmarsat's earnings and credit metrics, with adjusted debt to EBITDA sustainably less than 3.5x and FFO to debt more than 20%." MOTHERCARE PLC: Chairman Steps Down Amid Rescue Talks ----------------------------------------------------- Ayesha Javed at The Telegraph reports that the chairman of Mothercare has stepped down just weeks after the troubled retailer's chief executive was asked to leave following a decline in sales, as crunch talks with creditors continue. According to The Telegraph, Alan Parker is being replaced with immediate effect by Clive Whiley, who will act as interim executive chairman. Last week, Mothercare said it was in "constructive dialogue" with its lenders after bringing in KPMG in March to help it renegotiate its debts and secure new funding, The Telegraph relates. The company is locked in rescue talks with creditors to refinance its debt before it breaches financial covenants, The Telegraph discloses. The retailer is reportedly hoping to reduce costs by entering a company voluntary arrangement (CVA) -- a form of insolvency aimed at protecting a business from going bust by reducing its costs, which could lead to Mothercare closing a third of its 143 stores in the UK, The Telegraph notes. Mothercare plc is a retailer for parents and young children. The principal activity of the Company is to operate as a specialist omni-channel retailer, franchisor and wholesaler of products for mothers-to-be, babies and children under the Mothercare and Early Learning Centre brands. The Company's operating segments include the UK business and the International business. SEADRILL LTD: Plans to Exit Chapter 11 in June or July ------------------------------------------------------ Nerijus Adomaitis at Reuters report that offshore oil driller Seadrill plans to emerge from Chapter 11 bankruptcy in late June or early July to catch the rising wave of rig market activity. The company won U.S. court approval on April 17 for its multi-billion dollar debt restructuring plan after reaching a deal with more than 40 banks, unsecured creditors and shipyards, Reuters relates. "The confirmation is the most significant milestone in the process, and now we need to implement the plan over 60 to 90 days. Obviously, we would like to do it as fast as possible," CEO Anton Dibowitz told Reuters. According to Reuters, he said Seadrill plans to expand relations with Schlumberger, the world's largest oil services firm, and other suppliers to the global oil and gas industry, although the company had no immediate consolidation plans. Seadrill, as cited by Reuters, said the approved plan, which extends maturities of US$5.7 billion in bank debts, converts US$2.3 billion of unsecured bonds to equity and injects US$1 billion in new debt and equity, would enable the company to take advantage of a market recovery. "We are fully confident that it (the drilling market) would recover within the next five years, and now we have a runway that we needed in order to see that," Reuters quotes Mr. Dibowitz as saying. About Seadrill Ltd Seadrill Limited is a deepwater drilling contractor providing drilling services to the oil and gas industry. It is incorporated in Bermuda and managed from London. Seadrill and its affiliates own or lease 51 drilling rigs, which represents more than 6% of the world fleet. As of Sept. 12, 2017, Seadrill employed 3,760 highly-skilled individuals across 22 countries and five continents to operate their drilling rigs and perform various other corporate functions. As of June 30, 2017, Seadrill had $20.71 billion in total assets, $10.77 billion in total liabilities and $9.94 billion in total equity. Seadrill reported a net loss of US$155 million on US$3.17 billion of total operating revenues for the year ended Dec. 31, 2016, following a net loss of US$635 million on US$4.33 billion of total operating revenues for the year ended in 2015. After reaching terms of a reorganization plan that would restructure $8 billion of funded debt, Seadrill Limited and 85 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 17-60079) on Sept. 12, 2017. Together with the chapter 11 proceedings, Seadrill, North Atlantic Drilling Limited ("NADL") and Sevan Drilling Limited ("Sevan") commenced liquidation proceedings in Bermuda to appoint joint provisional liquidators and facilitate recognition and implementation of the transactions contemplated by the RSA and Investment Agreement, and Simon Edel, Alan Bloom and Roy Bailey of Ernst & Young are to act as the joint and several provisional liquidators. In the Chapter 11 cases, the Company has engaged Kirkland & Ellis LLP as legal counsel, Houlihan Lokey, Inc. as financial advisor, and Alvarez & Marsal as restructuring advisor. Slaughter and May has been engaged as corporate counsel, and Morgan Stanley served as co-financial advisor during the negotiation of the restructuring agreement. Advokatfirmaet Thommessen AS is serving as Norwegian counsel. Conyers Dill & Pearman is serving as Bermuda counsel. Prime Clerk serves as claims agent. The United States Trustee for Region 7 formed an official committee of unsecured creditors with seven members: (i) Computershare Trust Company, N.A.; (ii) Daewoo Shipbuilding & Marine Engineering Co., Ltd.; (iii) Deutsche Bank Trust Company Americas; (iv) Louisiana Machinery Co., LLC; (v) Nordic Trustee AS; (vi) Pentagon Freight Services, Inc.; and (vii) Samsung Heavy Industries Co., Ltd. Kramer Levin Naftalis & Frankel LLP is serving as lead counsel to the Committee. Cole Schotz P.C. is local and conflicts counsel to the Committee. Zuill & Co (in exclusive association with Harney Westwood & Riegels) is serving as Bermuda counsel. London-based Quinn Emanuel Urquhart & Sullivan, UK LLP, is serving as English counsel. Parella Weinberg Partners LLP is the investment banker to the Committee. FTI Consulting Inc. is the financial advisor. =============== X X X X X X X X =============== * BOOK REVIEW: Hospitals, Health and People ------------------------------------------- Author: Albert W. Snoke, M.D. Publisher: Beard Books Softcover: 232 pages List Price: $34.95 Review by Francoise C. Arsenault Order your personal copy today at http://www.beardbooks.com/beardbooks/hospitals_health_and_people. html Hospitals, Health and People is an interesting and very readable account of the career of a hospital administrator and physician from the 1930's through the 1980's, the formative years of today's health care system. Although much has changed in hospital administration and health care since the book was first published in 1987, Dr. Snoke's discussion of the evolution of the modern hospital provides a unique and very valuable perspective for readers who wish to better understand the forces at work in our current health care system. The first half of Hospitals, Health and People is devoted to the functional parts of the hospital system, as observed by Dr. Snoke between the late 1930's through 1969, when he served first as assistant director of the Strong Memorial Hospital in Rochester, New York, and then as the director of the Grace-New Haven Hospital in Connecticut. In these first chapters, Dr. Snoke examines the evolution and institutionalization of a number of aspects of the hospital system, including the financial and community responsibilities of the hospital administrator, education and training in hospital administration, the role of the governing board of a hospital, the dynamics between the hospital administrator and the medical staff, and the unique role of the teaching hospital. The importance of Hospitals, Health and People for today's readers is due in large part to the author's pivotal role in creating the modern-day hospital. Dr. Snoke and others in similar positions played a large part in advocating or forcing change in our hospital system, particularly in recognizing the importance of the nursing profession and the contributions of non-physician professionals, such as psychologists, hearing and speech specialists, and social workers, to the overall care of the patient. Throughout the first chapters, there are also many observations on the factors that are contributing to today's cost of care. Malpractice is just one example. According to Dr. Snoke, "malpractice premiums were negligible in the 1950's and 1960's. In 1970, Yale-New Haven's annual malpractice premiums had mounted to about $150,000." By the time of the first publication of the book, the hospital's premiums were costing about $10 million a year. In the second half of Hospitals, Health and People, Dr. Snoke addresses the national health care system as we've come to know it, including insurance and cost containment; the role of the government in health care; health care for the elderly; home health care; and the changing role of ethics in health care. It is particularly interesting to note the role that Senator Wilbur Mills from Arkansas played in the allocation of costs of hospital-based specialty components under Part B rather than Part A of the Medicare bill. Dr. Snoke comments: "This was considered a great victory by the hospital-based specialists. I was disappointed because I knew it would cause confusion in working relationships between hospitals and specialists and among patients covered by Medicare. I was also concerned about potential cost increases. My fears were realized. Not only have health costs increased in certain areas more than anticipated, but confusion is rampant among the elderly patients and their families, as well as in hospital business offices and among physicians' secretaries." This aspect of Medicare caused such confusion that Congress amended Medicare in 1967 to provide that the professional components of radiological and pathological in- hospital services be reimbursed as if they were hospital services under Part A rather than part of the co-payment provisions of Part B. At the start of his book, Dr. Snoke refers to a small statue, Discharged Cured, which was given to him in the late 1940's by a fellow physician, Dr. Jack Masur. Dr. Snoke explains the significance the statue held for him throughout his professional career by quoting from an article by Dr. Masur: "The whole question of the responsibility of the physician, of the hospital, of the health agency, brings vividly to mind a small statue which I saw a great many years ago.it is a pathetic little figure of a man, coat collar turned up and shoulders hunched against the chill winds, clutching his belongings in a paper bag-shaking, tremulous, discouraged. He's clearly unfit for work-no employer would dare to take a chance on hiring him. You know that he will need much more help before he can face the world with shoulders back and confidence in himself. The statuette epitomizes the task of medical rehabilitation: to bridge the gap between the sick and a job." It is clear that Dr. Snoke devoted his life to exactly that purpose. Although there is much to criticize in our current healthcare system, the wellness concept that we expect and accept today as part of our medical care was almost nonexistent when Dr. Snoke began his career in the 1930's. Throughout his 50 years in hospital administration, Dr. Snoke frequently had to focus on the big picture and the bottom line. He never forgot the importance of Discharged Cured, however, and his book provides us with a great appreciation of how compassionate administrators such as Dr. Snoke have contributed to the state of patient care today. Albert Waldo Snoke was director of the Grace-New Haven Hospital in New Haven, Connecticut from 1946 until 1969. In New Haven, Dr. Snoke also taught hospital administration at Yale University and oversaw the development of the Yale-New Haven Hospital, serving as its executive director from 1965-1968. From 1969-1973, Dr. Snoke worked in Illinois as coordinator of health services in the Office of the Governor and later as acting executive director of the Illinois Comprehensive State Health Planning Agency. Dr. Snoke died in April 1988. ********* 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. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2018. 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. * * * End of Transmission * * *