/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/180817.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, August 17, 2018, Vol. 19, No. 163 Headlines G E R M A N Y H&K AG: Moody's Withdraws Caa1 CFR for Business Reasons I R E L A N D ST. PAUL VI: Moody's Assigns B2 Rating to Class E-R Notes ST. PAUL VI: Fitch Assigns 'B-sf' Rating to Class E-R Notes I T A L Y COMITAL SRL: Oct. 2 Deadline Set for Submission of Binding Bids K A Z A K H S T A N ATFBANK JSC: S&P Stays Outlook on Negative & Affirms 'B/B' ICRs KASPI BANK: S&P Alters Outlook to Stable & Affirms 'BB-' LT ICR N E T H E R L A N D S ZOO ABS II: S&P Raises Class E Notes Rating to CCC+ (sf) S W I T Z E R L A N D GAM HOLDING: To Liquidate 9 Bond Funds After Massive Redemption WEATHERFORD INT'L: Moody's Affirms B3 CFR & Caa1 Sr. Unsec. Notes U N I T E D K I N G D O M CO-OPERATIVE BANK: Moody's Hikes LT Deposit Rating to 'Caa1' ELDON STREET: August 28 Proofs of Debt Deadline Set FINSBURY SQUARE 2017-2: Fitch Affirms 'BB+sf' Cl. X Notes Rating HOUSE OF FRASER: Moody's Cuts CFR to C, Ratings to Be Withdrawn LB HOLDINGS: August 28 Proofs of Debt Deadline Set LB RE FINANCING: August 28 Claims Filing Deadline Set LEHMAN BROTHERS PTG: August 28 Proofs of Debt Deadline Set RIPPIN LTD: Cash Flow Strains Prompt Administration THAYER PROPERTIES: August 28 Proofs of Debt Deadline Set ZEPHYR MIDCO 2: Moody's Assigns B3 CFR, Outlook Stable X X X X X X X X * BOOK REVIEW: AS WE FORGIVE OUR DEBTORS ********* ============= G E R M A N Y ============= H&K AG: Moody's Withdraws Caa1 CFR for Business Reasons ------------------------------------------------------- Moody's Investors Service, (Moody's) has withdrawn H&K AG's (Heckler & Koch) Caa1 corporate family rating (CFR), the Caa1-PD probability of default rating (PDR) and its negative outlook. RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. Headquartered in Oberndorf, Germany, Heckler & Koch is a leading, privately-owned defense contractor in the small arms sector. Heckler & Koch predominantly supplies the armed forces of NATO and NATO equivalent countries, European and US Special Forces, European police forces and US federal law enforcement agencies. The company also serves the commercial market. In 2017 Heckler & Koch generated sales of EUR 182 million and reported EBITDA of EUR 30 million. ============= I R E L A N D ============= ST. PAUL VI: Moody's Assigns B2 Rating to Class E-R Notes --------------------------------------------------------- Moody's Investors Service has assigned definitive ratings to seven classes of notes issued by St. Paul's CLO VI DAC: EUR 248,000,000 Class A-1R Senior Secured Floating Rate Notes due 2030, Definitive Rating Assigned Aaa (sf) EUR 18,000,000 Class A-2AR Senior Secured Floating Rate Notes due 2030, Definitive Rating Assigned Aa2 (sf) EUR 21,000,000 Class A-2BR Senior Secured Fixed Rate Notes due 2030, Definitive Rating Assigned Aa2 (sf) EUR 25,000,000 Class B-R Senior Secured Deferrable Floating Rate Notes due 2030, Definitive Rating Assigned A2 (sf) EUR 25,500,000 Class C-R Senior Secured Deferrable Floating Rate Notes due 2030, Definitive Rating Assigned Baa3 (sf) EUR 22,500,000 Class D-R Senior Secured Deferrable Floating Rate Notes due 2030, Definitive Rating Assigned Ba2 (sf) EUR 12,000,000 Class E-R Senior Secured Deferrable Floating Rate Notes due 2030, Definitive Rating Assigned B2 (sf) RATINGS RATIONALE Moody's definitive ratings of the notes address the expected loss posed to noteholders. The definitive ratings reflect the risks due to defaults on the underlying portfolio of assets, the transaction's legal structure, and the characteristics of the underlying assets. The Issuer issued the Refinancing Notes in connection with the refinancing of the following classes of notes: Class A-1 Notes, Class A-2A Notes, Class A-2B Notes, Class B Notes, Class C Notes, Class D Notes and Class E Notes due 2029, previously issued on June 22, 2016. On the Refinancing Date, the Issuer will use the proceeds from the issuance of the Refinancing Notes to redeem in full its respective Original Notes. On the Original Closing Date, the Issuer also issued one class of subordinated notes, which will remain outstanding. Amendments to the transaction includes: the change of spreads on the notes; the extension of the Weighted Average Life Test by 12 months; extension of the reinvestment period by one month. St. Paul's CLO VI is a managed cash flow CLO. The issued notes are collateralized primarily by broadly syndicated first lien senior secured corporate loans. At least 90% of the portfolio must consist of senior secured loans and eligible investments, and up to 10% of the portfolio may consist of second lien loans, unsecured loans, mezzanine obligations and high yield bonds. Intermediate Capital Managers Limited manages the CLO. It directs the selection, acquisition, and disposition of collateral on behalf of the Issuer. After the reinvestment period, which ends in August 2020, the Manager may reinvest unscheduled principal payments and proceeds from sales of credit risk obligations, subject to certain restrictions. The transaction incorporates interest and par coverage tests which, if triggered, divert interest and principal proceeds to pay down the notes in order of seniority. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in August 2017. Factors that would lead to an upgrade or downgrade of the ratings: The performance of the Notes is subject to uncertainty. The performance of the Notes is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The Manager's investment decisions and management of the transaction will also affect the performance of the Notes. Moody's modelled the transaction using CDOEdge, a cash flow model based on the Binomial Expansion Technique, as described in Section 2.3 of the "Moody's Global Approach to Rating Collateralized Loan Obligations" rating methodology published in August 2017. The key model inputs Moody's used in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. For modelling purposes, Moody's used the following base-case assumptions: Performing par and principal proceeds balance: EUR400,000,000 Diversity Score: 45 Weighted Average Rating Factor (WARF): 2925 Weighted Average Spread (WAS): 3.45% Weighted Average Coupon (WAC): 4.75% Weighted Average Recovery Rate (WARR): 43.50% Weighted Average Life (WAL): 7 years Moody's has analysed the potential impact associated with sovereign related risk of peripheral European countries. As part of the base case, Moody's has addressed the potential exposure to obligors domiciled in countries with local currency country risk ceiling of A1 or below. Following the refinancing date, and given the portfolio constraints, only up to 10% of the pool can be domiciled in countries with local currency country risk ceiling between A1 and A3. As a result, Moody's has not made any adjustments to the target par amount as further described in the methodology. Together with the set of modeling assumptions, Moody's conducted an additional sensitivity analysis, which was a component in determining the definitive ratings assigned to the rated Notes. This sensitivity analysis includes increased default probability relative to the base case. Here is a summary of the impact of an increase in default probability (expressed in terms of WARF level) on the Notes (shown in terms of the number of notch difference versus the current model output, whereby a negative difference corresponds to higher expected losses), assuming that all other factors are held equal: Percentage Change in WARF: WARF +of 15% (from 2925 to 3364) Rating Impact in Rating Notches Class A-1R Senior Secured Floating Rate Notes: 0 Class A-2AR Senior Secured Floating Rate Notes: -2 Class A-2BR Senior Secured Fixed Rate Notes: -2 Class B-R Senior Secured Deferrable Floating Rate Notes: -2 Class C-R Senior Secured Deferrable Floating Rate Notes:-1 Class D-R Senior Secured Deferrable Floating Rate Notes: -1 Class E-R Senior Secured Deferrable Floating Rate Notes: -2 Percentage Change in WARF: WARF +30% (from 2925 to 3803) Rating Impact in Rating Notches Class A-1R Senior Secured Floating Rate Notes: -1 Class A-2AR Senior Secured Floating Rate Notes: -3 Class A-2BR Senior Secured Fixed Rate Notes: -3 Class B-R Senior Secured Deferrable Floating Rate Notes: -3 Class C-R Senior Secured Deferrable Floating Rate Notes:-2 Class D-R Senior Secured Deferrable Floating Rate Notes: -2 Class E-R Senior Secured Deferrable Floating Rate Notes: -4 ST. PAUL VI: Fitch Assigns 'B-sf' Rating to Class E-R Notes ----------------------------------------------------------- Fitch Ratings has assigned St. Paul's CLO VI DAC's refinancing notes final ratings as follows: EUR248 million Class A-1-R: 'AAAsf'; Outlook Stable EUR18 million Class A-2A-R: 'AAsf'; Outlook Stable EUR21 million Class A-2B-R: 'AAsf'; Outlook Stable EUR25 million Class B-R: 'A+sf'; Outlook Stable EUR25.5million Class C-R: 'BBBsf'; Outlook Stable EUR22.5 million Class D-R: 'BBsf'; Outlook Stable EUR12 million Class E-R: 'B-sf'; Outlook Stable St. Paul's CLO VI DAC (the issuer) is a cash-flow collateralised loan obligation (CLO). Net proceeds from the notes are being used to refinance the current outstanding class A to E notes. The portfolio is managed by Intermediate Capital Managers Limited. KEY RATING DRIVERS 'B' Portfolio Credit Quality Fitch places the average credit quality of obligors in the 'B' range. The Fitch-weighted average rating factor (WARF) of the current portfolio is 32.16. High Recovery Expectations At least 90% of the portfolio comprises senior secured obligations. Recovery prospects for these assets are typically more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-weighted average recovery rating (WARR) of the current portfolio is 69.14%. Diversified Asset Portfolio The covenanted maximum exposure to the top 10 obligors for assigning the ratings is 25% of the portfolio balance. The transaction also includes limits on maximum industry exposure based on Fitch's industry definitions. The maximum exposure to the three largest (Fitch-defined) industries in the portfolio is covenanted at 40%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Limited Interest Rate Risk Unhedged fixed-rate assets cannot exceed 10% of the portfolio, while fixed-rate liabilities represent 2.5% of the portfolio. Consequently, interest rate risk is naturally hedged for most of the portfolio through floating-rate liabilities. Extended Weighted Average Life (WAL) On the refinancing date, the issuer will extend the WAL covenant by one year to seven years as part of the refinancing of the notes and update the Fitch matrix. Cash Flow Analysis Fitch used a customised proprietary cash flow model to replicate the principal and interest waterfalls and the various structural features of the transaction, and to assess their effectiveness, including the structural protection provided by excess spread diverted through the par value and interest coverage tests. TRANSACTION SUMMARY St. Paul's CLO VI DAC closed in June 2016. The transaction is still in in its reinvestment period, which is set to expire in July 2020. The issuer is now issuing new notes to refinance part of the original liabilities. The class A-1, A-2A, A-2B, B, C, D and E notes will be redeemed in full as a consequence of the refinancing. The refinancing notes, except for the class E, bear interest at a lower margin over EURIBOR than the notes being refinanced. In addition to the lower margin, the WAL covenant has been extended to seven years from the refinancing date and the Fitch matrix has been updated. All of the refinancing classes have different notional amounts and credit enhancement when compared to the refinanced ones, while the total notional amount of the refinancing notes exceeds the one for the refinanced notes. The remaining terms and conditions of the refinancing notes (including seniority) are the same as the refinanced notes. RATING SENSITIVITIES A 125% default multiplier applied to the portfolio's mean default rate, and with this increase added to all rating default levels, would lead to a downgrade of up to two notches for the rated notes. A 25% reduction in recovery rates would lead to a downgrade of up to four notches for the rated notes. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information. Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that affected the rating analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Overall, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ========= I T A L Y ========= COMITAL SRL: Oct. 2 Deadline Set for Submission of Binding Bids --------------------------------------------------------------- Dott. Fabrizio Torchio, the Receiver of the Company in Receivership Comital s.r.l. in liquidazione, and Dott. Massimiliano Basilio, the Receiver of the Company in Receivership Lamalu s.p.a., both declared bankrupt by the Court of Ivrea, make it known that the Bankruptcy Judges of the two bankrupt companies have authorised the sales procedure of the two businesses engaged in aluminium rolling (in the case of Comital) and the production of aluminium and its subsequent rolling (in the case of Lamalu), together with the property complex owned by third parties, located in Volpiano (TO), strada Brandizzo 130 and the plants owned by third parties situated in the factories belonging to Comital and Lamalu. The third-party owners of the property complex and of the plants have conferred an irrevocable power of attorney to sell on the aforementioned receivers such that the successful bidder, with separate but concurrent instruments, will acquire the following assets: 1. company owned by the Company in Receivership Comital S.r.l. in liquidation, comprising 1) employment relationships, 2) movable property (machinery and plants); 2. company owned by the Company in Receivership Lamalu S.p.A., comprising 1) employment relationships, 2) movable property (machinery and plants); 3. property complex owned by third parties situated in Volpiano, Strada Brandizzo 130; 4. plants owned by third parties situated in the Comital and Lamalu factories; all of which will be specified in greater detail in the documentation available in the virtual data room on the website astalegale.net. To receive the credentials for entry in the reserved area send e.mails to nicola.bottero@dgtblegal.it. In this regard, any prospective buyers are invited to submit binding bids with a view to the acquisition of said assets. The standard forms for the submission of binding bids enabling the participation of prospective buyers in the competitive bidding process for the assets described above can be downloaded from the aforementioned website, together with the text, which must be signed on each page to signify acceptance, of the announcement of sale (which describes all the rules of the asset transfer procedure). The binding bid -- together with the documents requested -- must arrive, in a closed and sealed envelope, by but not after 12:00 midday on October 2, 2018 for the attention of the Receivers of the Company in Receivership Comital s.r.l. and the Company in Receivership Lamalu s.p.a. at the offices of the Notary Paolo Maria Smirne in Torino, Corso Montevecchio n. 48. The opening of the envelopes with the offers received and the eventual tender will be held at the office of Notary Paolo Maria Smirne in Turin, Corso Montevecchio n. 48 at 3:30 p.m. on October 2, 2018. The publication of this invitation to bid, in the same way as the receipt of the binding bids in accordance with the deadlines and the conditions described herein, will not give rise to any obligation or undertaking by the sellers to sell. This notice does not constitute an offer to the public within the meaning of art. 1336 of the Italian Civil Code nor a solicitation of investment from the public within the meaning of articles 94 et seq. of Legislative Decree no. 58 of 24 February 1998 nor does it oblige the Receivers in any way whatsoever to contract and/or enter into negotiations with the bidders. For more information send e-mails to fabrizio.torchio@tfstudio.it or massimiliano.basilio@studiopbb.it =================== K A Z A K H S T A N =================== ATFBANK JSC: S&P Stays Outlook on Negative & Affirms 'B/B' ICRs --------------------------------------------------------------- S&P Global Ratings said that it had kept its outlook on Kazakhstan-based ATFBank JSC negative and affirmed its 'B' long- term and 'B' short-term issuer credit ratings. Simultaneously, S&P affirmed its 'kzBB+' Kazakhstan national scale rating on ATFBank. S&P said, "Our rating action balances the bank's improved capitalization following the state's capital injection in October 2017, against the challenges it faces stemming from its legacy asset quality, high levels of single-name and sector concentrations, and risks associated with lending in foreign currency. In October 2017, the government provided ATFBank with Kazakhstani tenge (KZT) 100 billion (about US$288 million as of Aug. 1, 2018) of subordinated debt for 15 years at a below-market interest rate. This transaction helped the bank to improve its overall capitalization and loan loss coverage, but from a very low base. "The bank's material burden of legacy problem assets, with nonperforming assets (NPAs) accounting for around 23.2% of total loans in 2017 and a still relatively low provisioning coverage, may continue to put pressure on its net profits, in our view. We estimate that loan-loss provisions covered only 77% of overall problem loans at the end of 2017. We also note that the bank collected only 73% of accrued interest income in 2017, which is below the 77% it collected a year ago. In addition, the bank's new rapid lending growth in the unsecured retail and small and midsize enterprises segments may lead to an accumulation of additional risks, in our view. "Furthermore, we consider the material concentration of the bank's loan portfolio to be a risk. The bank's top 20 borrowers accounted for about 43% of its total gross loans and 3.2x of total-adjusted capital on a net basis as of April 1, 2018, which is very high compared with global and local peers' indicators. The bank's exposure to the construction and real estate sector was around 24% of total loans as of midyear 2018 (ATFBank stand- alone, without Optima Bank). What's more, lending in foreign currency can present another risk, as foreign currency borrowers in Kazakhstan have been highly vulnerable to exchange rate swings over the recent decade. Foreign currency loans amounted to 32% of the bank's total loans as of year-end 2017. "We now forecast our risk-adjusted capital (RAC) ratio for ATFBank will be 5.3%-5.6% over the next 12-18 months (up from our previous forecast of 4.5%-5.0%). We incorporate around 5% loan portfolio growth in 2018-2020, slightly above the expected sector average of 3%, and credit costs of around 2.5% of total loans in the same period, in line with the expected sector average. We do not expect either fresh capital injections from the shareholder or dividends in the next two years. "Our assessment of ATFBank's business position balances its notable market shares in the banking sectors of Kazakhstan and Kyrgyzstan against constraints related to the material burden of legacy problem assets on its balance sheet. ATFBank ranked No.8 in Kazakhstan with a market share of 5.5% by assets as of July 1, 2018." ATFBank's funding and liquidity profile is largely in line with large domestic peers'. The bank has a strong franchise in corporate deposits, by which it is the sixth-largest bank in Kazakhstan with a sizable 6.9% market share as of July 1, 2018. The bank acts as a net lender in the interbank market, especially in U.S. dollars. As of April 1, 2018, ATFBank's broad liquid assets accounted for 28% of total assets. Net broad liquid assets covered short-term customer deposits by 48% on the same date. The securities portfolio consisted only of quasi-sovereign bonds that can be easily used to obtain liquidity under repurchase agreement transactions. S&P said, "The negative outlook reflects our expectation that the operating environment will continue to be challenging over the next 12-18 months in Kazakhstan, which may result in elevated credit costs and continuous pressure on ATFBank's asset quality. "We could lower the rating in the next 12-18 months if the bank's credit costs increased significantly beyond our base-case expectation of 2.5% of total loans while operating conditions remained challenging for Kazakh banks, resulting in ATFBank's RAC ratio falling below 5%. "We could revise the outlook to stable in the next 12-18 months if the operating environment and credit conditions in Kazakhstan ease and enable ATFBank to improve its asset quality indicators to about the same level as peers'." KASPI BANK: S&P Alters Outlook to Stable & Affirms 'BB-' LT ICR --------------------------------------------------------------- S&P Global Ratings said that it revised its outlook on Kazakhstan-based Kaspi Bank JSC to stable from negative. S&P said, "At the same time, we affirmed the 'BB-' long-term and 'B' short-term issuer credit ratings on the bank. In addition, we raised the Kazakhstan national scale rating on Kaspi Bank to 'kzA' from 'kzA-'." S&P said, "The outlook revision reflects our expectation that the bank's demonstrated strong earnings power will help it to withstand the challenging operating environment in Kazakhstan. Therefore, we expect the bank's internal capital generation will support the relatively fast growth, with ample room to cover any potential increase in credit risks in unsecured consumer lending. Kaspi Bank has demonstrated visibly resilient operating performance over the past five years -- its return on average equity reached 28.7% during this period amid a hostile operating environment. Indeed, it is one of the few banks in the system that has not required any extraordinary government or shareholder support in the past five years. Owing to its business model, the bank also enjoys a relatively higher fee and commission income than peers, therefore leaving the bank less susceptible to the possible contraction of interest margins. Over the next 18 months, we expect the bank will be able to adequately price any potential increase in credit costs in the unsecured consumer lending sector (which is its major focus of lending operations). We expect that the level of Kaspi Bank's problem loans will be about 8%-9% in the next two years, which is significantly below the 25%-30% that we estimate for the system as a whole. "That said, we believe that Kaspi Bank's planned ambitious loan portfolio growth in its key retail lending segment at 15%-20% annually in 2018-2020, which is materially higher than 3% that we anticipate for the Kazakh banking sector overall, may lead to an accumulation of credit risks going forward. However, we consider that the seasoning of the bank's loan portfolio, which is faster than that of peers (76% of total loans matured in less than one year on Jan. 1, 2018), and its better single-name diversification compared with local peers (the top 20 loans accounted for only 13.5% of total loans on the same date) somewhat compensate for the above factors." Kaspi Bank maintains its leading market positions among Kazakh banks with a retail focus. It was sixth largest by total assets as of July 1, 2018, with a market share of 6%. It has a dominant market share of 35% in unsecured consumer and car loans. The second-largest player, Halyk Bank, has 22%. Kaspi Bank maintains strong customer loyalty offering innovative products and customer solutions. It is a sustainable leader among Kazakh banks with a retail focus on independent, third-party surveys of brand recognition. S&P said, "We forecast Kaspi Bank's risk-adjusted capital (RAC) ratio at about 5.8%-6.0% in the next 12 months, roughly the same as at year-end 2017. For our forecast, we assume loan portfolio growth of 15%-20% annually in 2018-2019, a contraction of net interest margins by 10-20 basis points, and cost of risk of 4.5%- 5.0% versus the 2.5%-3.0% that we anticipate for the sector, given the bank's focus on unsecured consumer lending, which carries elevated risks, in our opinion. "In our view, Kaspi Bank enjoys high customer loyalty and has a stable depositor customer base. The bank enjoyed a sizable market share of 11.3% by retail deposits as of mid-2018. The bank's retail deposits account for about 90% of its total deposits, differentiating it from domestic peers, which are mostly funded by corporate deposits. "Kaspi bank's liquid assets adequately cover its liabilities, in our view. As of July 1, 2018, liquid assets made up 34% of the bank's total assets. In addition, the bank maintained positive liquidity gaps on all time horizons. Kaspi Bank has limited single-name concentration of funding with the top 20 depositors accounting for only 12.6% of total client funds as of end-2017. In our view, this makes Kaspi Bank less susceptible to sudden withdrawals of funds by individual clients, unlike many other local peers. "The stable outlook reflects our view that the bank's risk- adjusted earnings will remain strong enough to help the bank maintain its asset quality and capitalization commensurate with the current ratings over the next 12 months, despite the challenging operating environment in Kazakhstan. "We could lower our ratings on Kaspi Bank in the next 12 months if its capital and earnings weakened, with our RAC ratio declining below 5%. This could result from asset growth or credit costs significantly exceeding our base-case forecast. Similarly, deposits failing to match lending growth, leading to weaker funding metrics, could also trigger a downgrade." An upgrade of the ratings on Kaspi Bank appears remote in the next 12 months. However, it could happen if the bank's risk appetite materially decreased--in particular, if its growth rate stabilized closer to the sector average while its underwriting performance remained strong. ===================== N E T H E R L A N D S ===================== ZOO ABS II: S&P Raises Class E Notes Rating to CCC+ (sf) -------------------------------------------------------- S&P Global Ratings raised its credit ratings on ZOO ABS II B.V.'s class A-2, D, and E notes. At the same time, S&P has affirmed its ratings on the class B and C notes. S&P said, "The rating actions follow our assessment of the transaction's performance, using data from the June 28, 2018 trustee report and applying our relevant criteria. "Since our Feb. 8, 2017 review, the available credit enhancement has increased for all of the rated notes. This is due to the senior notes' structural deleveraging. Over the same period, the class A-1 notes fully amortized and the class A-2 notes started amortizing, with a current note factor (the current notional amount divided by the notional amount at closing) of 54.25%, representing EUR26.02 million of overall payment. Assets reduced by only EUR24.66 million since our previous review. The difference is mainly explained by a recovered amount of EUR1.3 million from a defaulted asset (Windermere VII CMBS PLC's class D notes)." All overcollateralization tests currently comply with the required levels under the transaction documents. S&P said, "As the transaction continues to deleverage, obligor concentration in the portfolio has increased, with 16 performing distinct obligors, down from 26 at our previous review. The performing portfolio is now only composed of residential mortgage-backed securities (RMBS). Italian exposure also increased to 73.6% from 65.5% of the performing portfolio. Additionally, the portfolio's average credit quality improved since our previous review, with almost 60% of the performing portfolio rated 'A+' compared with 6.7% at our previous review. Of the three assets in the 'CCC' rating bucket ('CCC+', 'CCC', or 'CCC-') at our previous review, all have been either redeemed or sold. Assets rated 'CC', 'SD' or 'D' and that we consider to be defaulted reduced to EUR10.94 million from EUR13.45 million. As the transaction continues to deleverage, the weighted-average cost of the liabilities is increasing as the relatively less expensive senior notes are repaid. Furthermore, the weighted- average spread dropped to 0.91% from 1.39%. Therefore, interest proceeds received from the collateral are not sufficient to service senior fees and interest due on the notes, so principal proceeds are being used to cover them. The interest coverage (I/C) test results indicated some volatility over the past year, and the class E notes' I/C test has been failing since December 2017. As a result, the class E notes started deferring interest again, so far accumulating EUR184,458.32 of deferred interest. The class E notes benefit from a turbo principal distribution. Of the remaining interest proceeds (after considering payment of all more senior amounts, in accordance with the interest proceeds priority of payments), 20% can be used to pay down the class E notes. Given the abovementioned condition, the class E notes are currently not amortizing. S&P said, "We subjected the capital structure to a cash flow analysis to determine the break-even default rate (BDR) for each rated class at each rating level. The BDR represents our estimate of the maximum level of gross defaults, based on our stress assumptions, that a tranche can withstand and still fully repay the noteholders. In our analysis, we used the portfolio balance that we consider to be performing (EUR49.57 million), the current weighted-average spread (0.91%), and the weighted-average recovery rates calculated in line with our criteria. We applied various cash flow stresses, using our standard default patterns, in conjunction with different interest rate stress scenarios. "In line with our structured finance ratings above the sovereign criteria, we applied a sovereign stress to any exposure in countries above our pre-defined thresholds. Due to the current Italian exposure (73.6% of the asset pool), we applied a sovereign stress to 58.6% (total exposure minus our 15% threshold) of assets in rating scenarios 'A+' and above (four notches above the long-term sovereign rating on Italy). As a result, despite the deleveraging, the available credit enhancement for all classes of notes in this transaction is not commensurate with a rating higher than 'A+', and significant credit enhancement growth would be required for any of the rated notes to be rated above 'A+ (sf)'. "According to our analysis, the portion of performing assets not rated by S&P Global Ratings is 0.3%. In this case, we apply our third-party mapping criteria to map notched ratings from another ratings agency and to infer our rating input for the purpose of inclusion in CDO Evaluator. In performing this mapping, we generally apply a three-notch downward adjustment for structured finance assets that are rated by one rating agency and a two- notch downward adjustment if the asset is rated by two rating agencies." The rating actions reflect the abovementioned developments, namely increased credit enhancement, increased concentration risk, and increased liquidity issue experienced by the transaction. The increase in available credit enhancement and the class A-2 notes' senior position has resulted in this class of notes passing our cash flow analysis at a higher rating than that currently assigned. S&P has therefore raised to A+ (sf) from 'A- (sf)' its rating on the class A-2 notes. S&P said, "Our rating on the class B notes addresses timely payment of interest and ultimate payment of principal. Even though available credit enhancement for this class of notes has increased significantly, our cash flow BDR results show a higher- than-usual dispersion, highlighting the sensibility of the class B notes to the transaction's liquidity issue. Consequently, we have affirmed our 'BBB+ (sf)' rating on the class B notes." The class C, D, and E notes are deferrable until they become the controlling class. Therefore, the liquidity issue is less of a concern than it is for the class A-2 and B notes in the short term. The increased credit enhancement for these classes of notes implies cash flow results passing at higher rating levels than those currently assigned. Nevertheless, the portfolio's increased concentration risk and the higher cost of debt for these notes compared to the spread generated by the collateral portfolio may lead to more severe liquidity issue. S&P said, "Consequently, based on the above and considering each class of notes' specific position in the capital structure, we have affirmed our 'BB+ (sf)' rating on the class C notes and raised our ratings on the class D and E notes. "We have capped our rating on the class E notes at 'CCC+ (sf)' to reflect the junior position in the capital structure, the fact that this class of notes is currently deferring interest, and the higher margin leading to a higher vulnerability to transaction liquidity issues in the long term." ZOO ABS II is a cash flow collateralized debt obligation(CDO) of asset-backed securities (ABS) transaction that securitizes structured finance securities, mostly RMBS and CDOs. The transaction closed in December 2005 and is managed by P&G SGR SpA. RATINGS LIST Class Rating To From ZOO ABS II B.V. EUR255.5 Million Senior Delayed Drawdown And Deferrable- Interest Secured Floating-Rate Notes Ratings Raised A-2 A+ (sf) A- (sf) D B+ (sf) CCC (sf) E CCC+ (sf) CCC- (sf) Ratings Affirmed B BBB+ (sf) C BB+ (sf) ===================== S W I T Z E R L A N D ===================== GAM HOLDING: To Liquidate 9 Bond Funds After Massive Redemption --------------------------------------------------------------- Jan-Henrik Foerster and Patrick Winters of Bloomberg News report that GAM Holding AG said it will wind down nine bond funds with more than US$7 billion in combined assets after the surprise suspension of a top manager triggered massive redemption requests. It's the latest twist in a trying episode for the Swiss money manager, which stunned investors late last month with its suspension of Tim Haywood after alleged lapses of due diligence and breaches of some policies, Bloomberg notes. The firm at the time froze redemptions from funds holding about CHF7.3 billion (US$7.3 billion) in assets, all of which were run by Mr. Haywood, who oversaw one of the firm's largest investment strategies, Bloomberg relates. GAM has had other setbacks of late, Bloomberg states. The firm said last month that first-half earnings were hurt by a charge related to worse-than-expected performance at its quant funds, Bloomberg recounts. The firm, as cited by Bloomberg, said boards of directors of the funds determined that the money pools -- all part of Mr. Haywood's absolute return strategy -- should go into liquidation. It didn't say when it expects the liquidation to be concluded, according to Bloomberg. The liquidation of the GAM funds is subject to regulatory and fund shareholder approvals, Bloomberg says. WEATHERFORD INT'L: Moody's Affirms B3 CFR & Caa1 Sr. Unsec. Notes ----------------------------------------------------------------- Moody's Investors Service affirmed Weatherford International Ltd.'s B3 Corporate Family Rating, B3-PD Probability of Default Rating and SGL-3 Speculative Grade Liquidity rating. Moody's also affirmed the Caa1 senior unsecured notes rating of both Weatherford and Weatherford International, LLC. The rating outlook remains negative. "Weatherford's high financial leverage and significant refinancing needs will continue to present elevated credit risk through 2019," said Sajjad Alam, Moody's Senior Analyst. "While the company is making progress in improving profitability, cash flow and liquidity, a slow recovery in oilfield services demand and pricing will prolong the company's business transformation and deleveraging process." Affirmations: Issuer: Weatherford International Ltd. (Bermuda) Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Senior Unsecured Notes, Affirmed Caa1 (LGD4) Senior Unsecured Shelf, Affirmed (P)Caa1 Multiple Seniority Shelf, Affirmed (P)Caa2 Senior Unsecured Commercial Paper, Affirmed NP Issuer: Weatherford International, LLC (Delaware) Senior Unsecured Notes, Affirmed Caa1 (LGD4) Senior Unsecured Shelf, Affirmed (P)Caa1 Multiple Seniority Shelf, Affirmed (P)Caa2 Outlook Actions: Issuer: Weatherford International Ltd. (Bermuda) Outlook, Remains Negative Issuer: Weatherford International, LLC (Delaware) Outlook, Remains Negative RATINGS RATIONALE Weatherford's B3 CFR reflects the company's unsustainably high debt burden, significant 2020 & 2021 debt maturities, business transformation risk, and limited free cash flow generation prospects through 2019 in a slowly improving oilfield services industry environment. While Moody's expects sequentially higher revenues and earnings in 2018 and 2019, the company will generate only a modest amount of free cash flow to meaningfully reduce debt since it may have to contend with increasing material and labor costs and higher use of working capital, in addition to covering ongoing transformation/restructuring charges. Weatherford has executed a number of significant asset sales in 2017-2018 to accelerate debt reduction and is actively marketing several other non-strategic asset packages to improve financial flexibility. Weatherford's B3 CFR is supported by its large scale and strong market positions in several product categories; its broad geographic and customer diversification, with a substantial portion of its revenue coming from less volatile international markets; and its numerous patented products and technologies that are well-known and widely used in the oilfield services (OFS) industry giving the company some competitive advantage. The negative outlook reflects Weatherford's need to execute asset sales and business transformation to restore financial flexibility in a slowly improving industry environment. If Weatherford can show sequential improvement in earnings, operating cash flow and financial leverage, a stable outlook could be considered. Weatherford's ratings could be downgraded if the company is unable to reduce leverage and refinancing risk, execute its asset sale targets, or maintain adequate liquidity in 2019. The CFR could be upgraded if Weatherford can produce free cash flow on a sustainable basis, maintain the EBTIDA/interest ratio above 2x and substantially refinance its 2020-2021 debt maturities in a stable to improving industry environment. Weatherford's SGL-3 rating reflects its adequate liquidity through 2019. Moody's expects a $300-$400 million cash balance, a modest amount of free cash flow generation, adequate covenant compliance cushion, and additional asset sales through 2019 leaving significant availability under its revolving credit facility. Weatherford has a bank credit facility that includes a $900 million unsecured revolver maturing in July 2019, and a $350 million secured first-lien term loan maturing in July 2020. Weatherford had $225 million in revolver drawings and $169 million in letters of credit leaving $506 million in borrowing capacity as of June 30, 2018. Moody's expects the company will extend the revolver maturity in the near future to ensure orderly access to its external line of credit. The unsecured notes of Weatherford and Weatherford LLC are rated Caa1, one-notch below the B3 CFR, reflecting the contractual and structural subordination of the unsecured notes to Weatherford's credit facility. Weatherford's credit facility benefits from upstream guarantees from a material portion of its operating and holding company subsidiaries and the $350 million term loan has a first lien security on a substantial portion of Weatherford's assets. Neither the unsecured notes of Weatherford nor Weatherford Delaware benefit from upstream guarantees from operating subsidiaries, where nearly all of the consolidated company's assets, leases, and non-debt liabilities reside. Weatherford International Ltd. and Weatherford International, LLC are wholly-owned subsidiaries of Weatherford International plc, which is headquartered in Switzerland and is a diversified international company that provides a wide range of services and equipment to the global oil and gas industry. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in May 2017. =========================== U N I T E D K I N G D O M =========================== CO-OPERATIVE BANK: Moody's Hikes LT Deposit Rating to 'Caa1' ------------------------------------------------------------ Moody's Investors Service (Moody's) upgraded the standalone baseline credit assessment (BCA) and the long-term deposit rating of The Co-operative Bank Plc to caa1 from caa2 and to Caa1 from Caa2 respectively. The outlook on the long-term deposit ratings has been changed to stable from positive. RATINGS RATIONALE The upgrade of The Co-operative Bank's BCA to caa1 from caa2 reflects the bank's improvements in asset risk and higher capitalisation, which are counterbalanced by persistent losses and very high operational risk. The Co-operative Bank's stock of problem loans has materially reduced; in December 2017 they accounted for 2.4% of gross loans, down from the 11% peak in 2012. The reduction has been mainly driven by very large disposals made by the bank. In particular, a very weak residential mortgage portfolio, known as "Optimum", fell to less than GBP0.6 billion in December 2017 from its peak of GBP7.3 billion in 2013. Capital has also improved significantly. The Co-operative Bank completed a recapitalisation plan in 2017, which included the injection of new equity and the conversion of Tier 2 bonds into common shares. The recapitalisation, together with a material reduction in risk-weighted assets (RWA) primarily related to the disposal of a large portion of the Optimum portfolio, led to a material increase in the bank's capital ratios. Following the recapitalisation, The Co-operative Bank's total capital ratio (consisting purely of Common Equity Tier 1 capital) at end-2017 was 24.7% of RWAs (end-2016: 11.0%), well above the 18% Prudential Regulatory Authority's Individual Capital Guidance (ICG), which comprises the bank's Pillar 1 requirement of 8% of RWAs and its very high Pillar 2A capital requirement of 10%. In addition to its ICG, The Co-operative Bank currently has a 2.375% combined buffer requirement. Notwithstanding these balance sheet improvements, The Co- operative Bank's business model is not yet sustainable given that the bank is not able to generate capital internally. This makes the bank particularly at risk in a stressed scenario; without a return to profit, the bank's excess capital is likely to shrink towards its regulatory minimum over time. Moody's said The Co- operative Bank was only likely to make sustainable profits from late 2019 or in 2020; for 2018, the rating agency expects The Co- operative Bank to continue to be loss-making, with a negative pre-provision profit. Moody's expectation is based on low asset growth and a persistently low interest rate environment, which is likely to depress net interest income; the bank's largely monoline business model, which limits the sources of revenues other than net interest income; and its high cost base and the large investments required in its IT infrastructure. Furthermore, there is still a very high operational risk embedded in The Co-operative Bank's transformation plan. In particular, the bank is working to update its IT systems to cope with changing behaviour by customers and an increase in technology- driven risks, in line with its competitors, while at the same time re-shaping its business model in line with the business plan. This transition could result in large unexpected costs and or disruption to service. OUTLOOK The outlook on The Co-operative Bank's long-term ratings is stable. This reflects, on the one hand, the initiatives that are underway to gradually reduce the operational risk to which the bank is exposed, and the efforts from the bank's management to reduce costs and reach a sustainable level of profitability; on the other hand, the risk and uncertainties embedded in such plans. FACTORS THAT COULD LEAD TO AN UPGRADE The Co-operative Bank's BCA could be upgraded following a return to a sustainable internal capital generation through earnings, improvements in the bank's IT infrastructure, and materially reduced operational risk. An upgrade in the BCA would lead to an upgrade of the long-term deposit ratings. Substantial issuance of bail-in-able subordinate or senior debt, which would protect depositors from losses in a resolution scenario, could also lead to an upgrade of the long- term deposit ratings. FACTORS THAT COULD LEAD TO A DOWNGRADE The Co-operative Bank's BCA could be downgraded following a failure of its IT transformation, evidence that the bank will not be able to return to a sustainable level of net profitability by 2020, or a lower level of junior deposits. A downgrade of The Co-operative Bank's BCA would lead to a downgrade of the bank's long-term deposit ratings. LIST OF AFFECTED RATINGS Issuer: The Co-operative Bank Plc Upgrades: Long-term Counterparty Risk Ratings, upgraded to B3 from Caa1 Long-term Counterparty Risk Assessment, upgraded to B2(cr) from B3(cr) Long-term Bank Deposits, upgraded to Caa1 Stable from Caa2 Positive Adjusted Baseline Credit Assessment, upgraded to caa1 from caa2 Baseline Credit Assessment, upgraded to caa1 from caa2 Senior Unsecured Medium-Term Note Program, upgraded to (P)Caa1 from (P)Caa2 Affirmations: Short-term Counterparty Risk Ratings, affirmed NP Short-term Counterparty Risk Assessment, affirmed NP(cr) Short-term Bank Deposits, affirmed NP Commercial Paper, affirmed NP Other Short Term, affirmed (P)NP Outlook Action: Outlook changed to Stable from Positive PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks published in August 2018. ELDON STREET: August 28 Proofs of Debt Deadline Set --------------------------------------------------- Pursuant to Rules 14.29 of the Insolvency (England and Wales) Rules 2016, Derek Anthony Howell, Anthony Victor Lomas, Steven Anthony Pearson, Julian Guy Parr, Gillian Eleanor Bruce, the Joint Administrators of Eldon Street Holdings Limited, intend to declare a ninth interim dividend to unsecured non-preferential creditors within two months from the last date of proving, being August 28, 2018. Such creditors are required on or before that date to submit their proofs of debt to the Joint Administrators thru mail at: PricewaterhouseCoopers LLP Attn: Diane Adebowale 7 More London Riverside, London SE1 2RT United Kingdom or by email to lehman.affiliates@uk.pwc.com Persons so proving are required, if so requested, to provide such further details or produce such documents or other evidence as may appear to the Joint Administrators to be necessary. The Joint Administrators will not be obliged to deal with proofs lodged after the last date for proving but they may do so if they think fit. Creditors who wish to have dividend payments made to another person or who have assigned their entitlement to someone else are asked to provide formal notice to the Joint Administrators. For further information, contact details, and proof of debt forms, please visit http://www.pwc.co.uk/services/business- recovery/administrations/lehman/esh-ltd-in-administration.html Alternatively, one may call Diane Adebowale on +44(0)20-7212- 3515. The Joint Administrators were appointed on December 9, 2008. FINSBURY SQUARE 2017-2: Fitch Affirms 'BB+sf' Cl. X Notes Rating ---------------------------------------------------------------- Fitch Ratings has upgraded Finsbury Square 2017-2 plc's class B notes, affirmed the others, and removed the class B and X notes from Rating Watch Positive (RWP), as follows: Class A: affirmed at 'AAAsf'; Outlook Stable Class B: upgraded to 'AA+sf' from 'AAsf'; off RWP; Outlook Stable Class C: affirmed at 'Asf'; Outlook Stable Class D: affirmed at 'CCCsf', Recovery Estimate (RE) 100% Class X: affirmed at 'BB+sf'; off RWP; Outlook Stable The transaction is an RMBS securitisation of near-prime owner- occupied and buy-to-let (BTL) residential mortgages originated by Kensington Mortgage Company in the UK under its Kensington and New Street brands. KEY RATING DRIVERS Counterparty Criteria Updated Fitch placed the class B and X notes on RWP following the update of its Structured Finance and Covered Bonds Counterparty Rating Criteria on August 1, 2018, and in particular the change in the way commingling risk is addressed. Based on the current criteria, Fitch considers commingling to be immaterial in this transaction and no losses were sized in the analysis. The rating actions follow its updated analysis based on the published criteria. Rating Cap on Class X Notes All excess spread will be used to make payments of interest and principal on the class X notes. The repayment of these notes is reliant on the availability and timing of excess spread, which is highly dependent on asset performance. Due to the high volatility and sensitivity to stress scenarios (especially to prepayment rates), Fitch has capped the class X notes at 'BB+sf'. RATING SENSITIVITIES The notes could be upgraded in case of sustained increases in credit enhancement and ongoing stable asset performance. The notes could be downgraded should asset performance deteriorate in excess of Fitch's current expectations. The notes may also be downgraded if the issuer account bank (Citibank N.A.; A+/Stable/F1) or the derivative counterparty (BNP Paribas SA; A+/Stable/F1) are downgraded below certain documented threshold levels with no documented remedial actions being implemented on a timely basis. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that affected the rating analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Prior to the transaction closing, Fitch reviewed the results of a third-party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis. Prior to the transaction closing, Fitch conducted a review of a small targeted sample of Kensington's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. HOUSE OF FRASER: Moody's Cuts CFR to C, Ratings to Be Withdrawn --------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating of House of Fraser Limited by three notches to C from Caa2, and downgraded the probability of default rating to D-PD from Caa2-PD. Concurrently, Moody's has downgraded the rating of the GBP165 million senior secured floating rate notes due October 2020, issued by House of Fraser (Funding) plc, to C from Caa2. There is no ratings outlook and Moody's will subsequently withdraw all of HoF's ratings. RATINGS RATIONALE The rating action follows the company's announcement on August 10, 2018 that it had appointed administrators. The downgrade also reflects the high expected losses for financial creditors as a result of the sale of the company, which was also announced on August 10, 2018. The downgrade of the company's CFR to Caa2 from Caa1 on July 24, 2018 was predicated on the successful completion and implementation of (1) the company voluntary arrangement; (2) the Schemes of Arrangement; and (3) an equity injection from C.banner of around GBP70 million. On August 8, 2018, C.banner announced the termination of the potential acquisition of a 51% stake in HoF and therefore cancelled the GBP70 million equity injection in the business. Moody's base case scenario assumes that the recovery rate for financial creditors across the different debt instruments will be less than 35%, which is consistent with a C CFR. The appointment of administrators is among the defined conditions by Moody's for a default and subsequent withdrawal of ratings. The principal methodology used in these ratings was Retail Industry published in May 2018. LB HOLDINGS: August 28 Proofs of Debt Deadline Set -------------------------------------------------- Pursuant to Rule 14.29 of the Insolvency (England and Wales) Rules 2016, Derek Anthony Howell, Anthony Victor Lomas, Steven Anthony Pearson, Julian Guy Parr, Gillian Eleanor Bruce, all of PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1 2RT, United Kingdom, the Joint Administrators of LB Holdings Intermediate 2 Limited, intend to declare a second interim distribution unsecured creditors within two months from the last date of proving, being August 28, 2018. Such creditors are required on or before that date to submit their proofs of debt to the Joint Administrators, PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1 2RT, United Kingdom, marked for the attention of Diane Adebowale or by email to lehman.affiliates@uk.pwc.com Persons so proving are required, if so requested, to provide such further details or produce such documents or other evidence as may appear to the Joint Administrators to be necessary. The Joint Administrators will not be obliged to deal with proofs lodged after the last date for proving but they may do so if they think fit. For further information, contact details, and proof of debt forms, please visit http://www.pwc.uk/services/business- recovery/administrations/lehman/lbhi2-limited-in- administration.html. Alternatively, please call Diane Adebowale on +44(0)2072123515. The Joint Administrators were appointed on January 14, 2009. LB RE FINANCING: August 28 Claims Filing Deadline Set ----------------------------------------------------- Pursuant to Rule 2.95 of the Insolvency Rules 1986, Gillian Eleanor Bruce, Julian Guy Parr and Anthony Victor Lomas, the Joint Liquidators of LB Re Financing No. 3 Limited, in Creditors' Voluntary Liquidation, intend to declare a third interim dividend to the unsecured creditors within a period of two months from the last date for proving, being August 28, 2018. Such creditors are required on or before that date to submit their proofs of debt to the Joint Liquidators, PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1 2RT, United Kingdom, marked for the attention of Diane Adebowale or by email to lehman.affiliates@uk.pwc.com Persons so proving are required, if so requested, to provide such further details or produce such documents or other evidence as may appear to the Joint Liquidators to be necessary. The Joint Liquidators will not be obliged to deal with proofs lodged after the last date for proving but they may do so if they think fit. Creditors who wish to have dividend payments made to another person or who have assigned their entitlement to someone else are asked to provide formal notice to the Joint Liquidators. For further information, contact details, and proof of debt forms, please visit http://www/pwc.co.uk/services/business- recovery/administrations/lehman/lbref-no3-limited-in- administration.html Alternatively, one may call Diane Adebowale on +44(0)20-7212- 3515. The Joint Liquidators were appointed on July 23, 2012. LEHMAN BROTHERS PTG: August 28 Proofs of Debt Deadline Set ---------------------------------------------------------- Pursuant to Rules 14.29 of the Insolvency (England and Wales) Rules 2016, Derek Anthony Howell, Anthony Victor Lomas, Steven Anthony Pearson, Julian Guy Parr, Gillian Eleanor Bruce, all Joint Administrators of Lehman Brothers (PTG) Limited, intend to declare a ninth interim dividend to unsecured non- preferential creditors within two months from the last date of proving, being August 28, 2018. Such creditors are required on or before that date to submit their proofs of debt to: PricewaterhouseCoopers LLP Joint Administrators 7 More London Riverside, London SE1 2RT, United Kingdom Attn: Diane Adebowale or by email to lehman.affiliates@uk.pwc.com Persons so proving are required, if so requested, to provide such further details or produce such documents or other evidence as may appear to the Joint Administrators to be necessary. The Joint Administrators will not be obliged to deal with proofs lodged after the last date for proving but they may do so if they think fit. Creditors who wish to have dividend payments made to another person or who have assigned their entitlement to someone else are asked to provide formal notice to the Joint Administrators. For further information, contact details, and proof of debt forms, please visit http://www.pwc.co.uk/services/business- recovery/administrations/lehman/lbptg-limited-in- administration.html Alternatively, one may call Diane Adebowale on +44(0)20-7212- 3515. The Joint Administrators were appointed on November 6, 2008. RIPPIN LTD: Cash Flow Strains Prompt Administration --------------------------------------------------- Business Sale reports that Rippin Limited, a Scottish structural steel manufacturer, has been placed in administration after citing cash flow strains as the reason for its downfall. Due to the administration, the company has stopped trading, which has affected its staff members in consequence, Business Sale relates. The business recently reported financial strains due to customers refusing payments following contractual disputes, as well as a steep decline in orders from clients, Business Sale discloses. According to Business Sale, big Four auditors KPMG LLP have been called in, and partners Blair Nimmo and Alistair McAlinden have been appointed as joint administrators who will be working with all relevant staff members to conclude Rippin's operations. The administrators are also on the hunt for interested individuals to make an offer for the assets in the form of stock and plant equipment, Business Sale notes. Located in Cowdenbeath, Fife and in operation since 1974, the company provides services across the whole of Scotland and the north of England and caters specifically to the British construction industry. THAYER PROPERTIES: August 28 Proofs of Debt Deadline Set -------------------------------------------------------- Pursuant to Rules 14.29 of the Insolvency (England and Wales) Rules 2016, Anthony Victor Lomas, Julian Guy Parr and Gillian Eleanor Bruce of PricewaterhouseCoopers LLP, as Joint Liquidators of Thayer Properties Limited, intend to declare an eighth interim dividend to unsecured non-preferential creditors within two months from the last date of proving, being August 28, 2018. Such creditors are required on or before that date to submit their proofs of debt to the Joint Liquidators, PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1 2RT, United Kingdom, marked for the attention of Diane Adebowale or by email to lehman.affiliates@uk.pwc.com Persons so proving are required, if so requested, to provide such further details or produce such documents or other evidence as may appear to the Joint Liquidators to be necessary. The Joint Liquidators will not be obliged to deal with proofs lodged after the last date for proving but they may do so if they think fit. Creditors who wish to have dividend payments made to another person or who have assigned their entitlement to someone else are asked to provide formal notice to the Joint Liquidators. For further information, contact details, and proof of debt forms, please visit http://www/pwc.co.uk/services/business- recovery/administrations/lehman/thayer-properties-limited-in- administration.html Alternatively, one may call Diane Adebowale on +44(0)20-7212- 3515. The Joint Liquidators were appointed on November 1, 2012. ZEPHYR MIDCO 2: Moody's Assigns B3 CFR, Outlook Stable ------------------------------------------------------ Moody's Investors Service, has assigned a B3-PD probability of default and a definitive B3 corporate family rating to Zephyr Midco 2 Limited, parent and holding company of ZPG Limited (until July 12, 2018 known as ZPG Plc), owner of the second largest UK property portal and of leading UK price comparison websites. Moody's has also assigned definitive B2 instrument ratings to the GBP395 million senior secured first lien term loan B1, the EUR400 million senior secured first lien term loan B2 and the GBP150 million equivalent senior secured revolving credit facility (RCF) which are issued by Zephyr Bidco Limited. The outlook is stable on all the ratings. Concurrently, Moody's has withdrawn the pre-buyout Ba3 CFR and Ba3-PD PDR on ZPG, concluding the review of the ratings. Moody's has also withdrawn the Ba3 instrument rating of the pre-buyout GBP200 million Senior Unsecured Notes due 2023 issued by ZPG, following full repayment. The action was prompted by the completion of the acquisition of ZPG by Silver Lake, GIC and PSP and by the repayment of ZPG's outstanding bond on August 6, 2018. The final capital structure also includes a GBP180 million senior secured second lien term loan (unrated). RATINGS RATIONALE To reflect the new corporate and financing structure, Moody's has moved ZPG's CFR to Zephyr Midco 2 Limited from ZPG Limited and downgraded the CFR to B3 from Ba3. The downgrade was driven by the material increase in Moody's adjusted leverage to approximately 8.5x as of LTM June 2018 from 3.3x pre-LBO as of the same date. The ratings reflect (1) the company's established brands and good position in the UK property classified market (#2 and #3 property classified portals) and among the top Price Comparison Websites (PCWs) in the UK, (2) the diversified revenue stream between subscription-based (property division) and transactional (comparison division) contracts, (3) the good free cash flow generation albeit historically absorbed by acquisitions and despite the anticipated increase in interest expenses following Silver Lake's acquisition of the company, (4) the clear strategy of consolidating the company's role as a value-added intermediary for end-consumers and partners/suppliers, and (5) the good growth prospects supported by pricing and cross-selling opportunities in the property division, growth within the comparison segment and the secular shift of advertising spend to online from traditional channels. The ratings also reflect (1) the modest scale and the predominantly UK geographic presence, (2) the exposure to cyclical property market and online advertising spending (although the early stage of the secular trend from print to digital helped to grow online classifieds spend even during the 2008-09 crisis), (3) the highly competitive environment heightened by constant threat of new disruptive technologies and business models which could erode established position and margins, (4) the M&A strategy which, while core for consolidating the company's position in the UK and expanding its presence in Europe, carries re-leveraging and execution risks, (5) the dependence on third parties' search engines to direct traffic toward its platforms (partially mitigated by ZPG's high share of unpaid traffic), and (6) the high Moody's adjusted gross leverage post-LBO. Following the closing of the transaction, the company is expected to have cash balance of approximately GBP90 million and access to an undrawn GBP150 million revolving credit facility. The RCF has one springing covenant (first lien net leverage -- as calculated in accordance with the senior facilities agreement) that is tested when the facility is drawn by more than 40%. The first lien net leverage covenant level is set at 8.75x. Structural Considerations The B2 ratings assigned to the first-lien term loans and RCF, all ranking pari-passu and issued by Zephyr Bidco Limited, are one notch above the CFR and reflect the cushion provided by the second lien term loan ranking below. The first lien term loans and the RCF benefit from guarantees from material subsidiaries representing at least 80% of consolidated EBITDA of the group (excluding the EBITDA of any entity of the group that is not required to become a guarantor). The first lien facilities also benefit from security limited to a pledge over shares and, solely with respect to English guarantors, an all-asset debenture. The second lien term loans benefits from the same guarantee and security package as the first lien facilities but on a second lien basis. Rating outlook The stable outlook on the ratings reflects Moody's expectation that the company will be able to de-leverage to around 7.0x by the end of September 2019 supported by revenue and EBITDA growth, reduction in outstanding deferred considerations/earn-outs and good execution in consolidating acquired businesses. The outlook assumes no major debt-funded acquisitions and that the company will maintain an adequate liquidity profile. What Could Change the Rating -- Up Upward pressure on the rating could materialize if: (i) revenue continues to grow steadily and EBITDA margins improve on a sustained basis; (ii) Moody's adjusted debt/EBITDA is sustained below 6.5x; (iii) it generates positive free cash-flow; and (iv) it maintains an adequate liquidity profile. What Could Change the Rating -- Down Conversely, downward ratings pressure could develop if: (i) ZPG's competitive profile weakens, for example as result of a material erosion in the company's market share; (ii) Moody's adjusted debt/EBITDA is sustained above 8.0x; or (iii) its liquidity profile significantly weakens. LIST OF AFFECTED RATINGS Issuer: Zephyr Midco 2 Limited Assignments: Corporate Family Rating, Assigned Definitive B3, from (P)B3 Probability of Default Rating, Assigned B3-PD Outlook Actions: Outlook, Remains Stable Issuer: Zephyr Bidco Limited Assignments: BACKED Senior Secured Bank Credit Facility, Assigned Definitive B2, from (P)B2 Issuer: ZPG Limited Withdrawn after being on review for downgrade: Corporate Family Rating, Withdrawn , previously rated Ba3 Probability of Default Rating, Withdrawn , previously rated Ba3- PD BACKED Senior Unsecured Regular Bond/Debenture, Withdrawn , previously rated Ba3 Outlook Actions: Outlook, Changed To Rating Withdrawn From Rating Under Review PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. =============== X X X X X X X X =============== * BOOK REVIEW: AS WE FORGIVE OUR DEBTORS ---------------------------------------- Authors: Teresa A. Sullivan, Elizabeth Warren, & Jay Westbrook Publisher: Beard Books Softcover: 370 Pages List Price: $34.95 Review by: Susan Pannell Order your personal copy today at http://www.beardbooks.com/beardbooks/as_we_forgive_our_debtors.ht ml So you think you know the profile of the average consumer debtor: either deadbeat slouched on a sagging sofa with a three day growth on his chin or a crafty lower-middle class type opting for bankruptcy to avoid both poverty and responsible debt repayment. Except that it might be a single or divorced female who's the one most likely to file for personal bankruptcy protection, and her petition might be the last stage of a continuum of crises that began with her job loss or divorce. Moreover, the dilemma might be attributable in part to consumer credit industry that has increased its profitability by relaxing its standards and extending credit to almost anyone who can scribble his or her name on an application. Such are among the unexpected findings in this painstaking study of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas during the seven-year period from 1981 to 1987. Rather than relying on case counts or gross data collected for a court's administrative records, as has been done elsewhere, the authors use data contained in the actual petitions. In so doing, they offer a unique window into debtors' lives. The authors conclude that people who file for bankruptcy are, as a rule, neither impoverished families nor wily manipulators of the system. Instead, debtors are a cross-section of America. If one demographic segment can be isolated as particularly debtprone, it would be women householders, whom the authors found often live on the edge of financial disaster. Very few debtors (3.7 percent in the study) were repeat filers who might be viewed as abusing the system, and most (70 percent in the study) of Chapter 13 cases fail and become Chapter 7s. Accordingly, the authors conclude that the economic model of behavior -- which assumes a petitioner is a "calculating maximizer" in his in his decision to seek bankruptcy protection and his selection of chapter to file under, a profile routinely used to justify changes in the law -- is at variance with the actual debtor profile derived from this study. A few stereotypes about debtors are, however, borne out. It is less than surprising to learn, for example, that most debtors are simply not as well-off as the average American or that while bankrupt's mortgage debts are about average, their consumer debts are off the charts. Petitioners seem particularly susceptible to the siren song of credit card companies. In the study sample, creditors were found to have made between 27 percent and 36 percent of their loans to debtors with incomes below $12,500 (although the loans might have been made before the debtors' income dropped so low). Of course, the vigor with which consumer credit lenders pursue their goal of maximizing profits has a corresponding impact on the number of bankruptcy filings. The book won the ABA's 1990 Silver Gavel Award. A special 1999 update by the authors is included exclusively in the Beard Book reprint edition. ********* 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 * * *