/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/190315.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, March 15, 2019, Vol. 20, No. 54 Headlines F I N L A N D FERRATUM OYJ: Fitch Assigns 'BB-' Long-Term IDR, Outlook Stable I R E L A N D HAYFIN EMERALD II: Fitch Assigns 'BB(EXP)sf' Rating to Class E Debt HAYFIN EMERALD II: Moody's Assigns (P)Ba2 Rating to Class E Notes MARKET BAR: Carval Withdraws Bid Following Deal L U X E M B O U R G MILLICOM INTERNATIONAL: Fitch Rates $500MM Sr. Unsec. Notes 'BB+' MILLICOM INTERNATIONAL: Moody's Rates Proposed $500M Sr. Notes Ba2 R U S S I A RTS BANK: Put on Provisional Administration, License Revoked S P A I N GIRALDA HOLDING: Moody's Assigns B2 CFR, Outlook Stable GIRALDA HOLDING: S&P Assigns Preliminary 'B+' ICR, Outlook Stable U N I T E D K I N G D O M DEBENHAMS PLC: To Consider Mike Ashley's GBP150MM Loan Offer GATOR HOLDCO: S&P Assigns B- Issuer Credit Rating, Outlook Stable KEEPMOAT: S&P Withdraws B Long-Term Issuer Credit Rating KINGSTOWN GROUP: Challenging Market Conditions Prompt Collapse MCGILL & CO: Catalus Energy Acquires Business, Assets X X X X X X X X [*] BOOK REVIEW: Full Faith and Credit: The Great S & L Debacle - - - - - ============= F I N L A N D ============= FERRATUM OYJ: Fitch Assigns 'BB-' Long-Term IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has assigned Finland-based consumer lender Ferratum Oyj (Ferratum) a Long-Term Issuer Default Rating (IDR) of 'BB-' with Stable Outlook. Founded in 2005, Ferratum is an online-focused consumer finance company with an international footprint in over 20 countries, including a strong presence in its domestic market Finland, as well as Sweden and Poland. The company is listed on the prime standard segment of the Frankfurt Stock Exchange (with a free float of around 45%) and also incorporates a Malta-domiciled bank (Ferratum Bank p.l.c.) under its wider franchise. Ferratum is majority- owned by its founding CEO (55%). KEY RATING DRIVERS IDR The Long-Term IDR of Ferratum reflects its monoline business model and evolving franchise as a predominantly pan-European online-focussed, specialised consumer lender in a niche market segment, which continues to experience regulatory challenges. The rating reflects Ferratum's adequate through-the-cycle profitability and adequate capitalisation but also takes into account the company's increased appetite for credit risk in its core activities (with an elevated level of past due receivables) and reliance on short-term online retail deposits. The rating also takes into consideration the company's adequate risk provisioning approach and proactive management stance with regard to non-performing loans. Fitch views the consolidation of Ferratum Bank in the wider company as moderately credit-positive, balancing efficient market and funding access via retail deposits against an increasing need for regulatory compliance (both with regard to capital and liquidity management). Ferratum primarily serves retail customers likely to fall outside the conventional acceptance parameters of mainstream lenders, with a significant interest premium charged to reflect their non-standard risk profile. The company has expanded significantly in the past four years, leveraging its banking license and elevated capital base after its initial public offering in 2015. Fitch recognises the moderate scale Ferratum has achieved to date; however, it assesses the franchise in the context of Ferratum's underlying business model, which is typically subject to limited barriers of entry and an evolving regulatory environment, and therefore prone to some volatility. The higher-cost credit market has in recent years been subject to regulatory intervention in the form of caps on allowable interest and fee rates in numerous European countries, including some of Ferratum's core markets such as Finland, Sweden, and Latvia. Ferratum has to date been able to reposition itself in the face of such developments, helped by the fairly lean cost structure of its online business model and its broad geographic coverage has historically limited its vulnerability to regulatory shocks in any one geographic market. However, in Fitch's view, regulatory intervention remains an inherent risk in this sector, against which smaller lenders in particular have limited lobbying power. Ferratum operates in a market segment characterised by a heightened risk appetite within underwriting standards. Consequently, asset quality is inherently weaker than that at commercial banks, with a comparatively higher proportion of the loan book exhibiting at least partial overdue status (around 50% of the receivable book at end-3Q18 was 30 or more days past due; four-year historical average before IFRS9 adoption at 42.6%). Following the recent adoption of IFRS 9 and associated adjustment to its provisioning approach, Fitch expects the company's asset quality indicators to improve over the short- to medium-term, albeit at the cost of some moderate margin easing. The management of asset quality is also aided by the disposal of non-performing portfolios early in the loan life cycle (i.e. after 90 days past due). Known as contractual forward flow agreements, these are expected to gain in prominence as the company utilises these agreements to comply with tightening ECB-imposed non-performing loan requirements at bank subsidiary level. Ferratum's profitability margins are adequate by wider finance and leasing company benchmarks, with the company having demonstrated an appropriate profitability track record in an evolving operating environment. Fitch assesses profitability expectations against the company's ability to operate under more conservative provisioning requirements as part of IFRS 9 adoption and the company's intentions to increasingly act as a finance intermediary over the medium- to long-term (focusing on loan origination while limiting own balance sheet exposure). Ferratum has a largely unsecured funding profile, consisting of retail deposits from its banking subsidiary (EUR174 million as of end-3Q18), senior unsecured bonds (EUR165 million), and a credit line from Nordea (EUR35 million). While the senior bonds have long-term maturities (three to four years), online deposits are mostly shorter-term with 84% expiring within the next three months (as of end-3Q18), which in Fitch's view are less sticky than traditional retail deposits (particularly in periods of market stress). Ferratum's subsidiary bank is also subject to regulatory constraints on moving its deposit funding within the group, including a requirement of equity and non-deposit funding accounting for at least 35% of retail deposits. Ferratum maintains a sizeable cash balance (EUR159 million as of end-3Q18) held predominantly with the Central Bank of Malta to support its liquidity. Fitch calculates Ferratum's gross debt/tangible equity ratio as of end-3Q18 at around 5x, which corresponds to the upper end of the 'bb' range rating category under the benchmarking ratio for finance and leasing companies. This was moderately higher than the company's historical leverage ratio of around 4x, with the increase in 2018 driven by a bond issue of EUR100 million by Ferratum Capital to lengthen the company's funding profile. Fitch assesses the capitalisation and leverage of Ferratum in the context of its risk appetite, which renders it more susceptible to cyclical performance swings. RATING SENSITIVITIES IDR A worsening of credit losses, notably if combined with looser provisioning standards, pressuring profitability and ultimately eroding Ferratum's capital base, would be negative for the Long-Term IDR. A protracted weakening of Ferratum's franchise, arising from a sustained loss in revenue, significant operational losses and/or adverse reputational ramifications in connection with the company lending activities could be rating-negative. In addition, a further significant tightening of regulatory requirements in key markets - translating into a significant loss of business and/or notable margin pressure - could result in a rating downgrade. A marked loss of retail deposits at Ferratum Bank as a key mechanism of funding access for the wider company could be rating-negative. Furthermore, any sustained adverse operational developments at Ferratum Bank level (either of a regulatory nature or with regard to customer confidence), thereby impacting on the company's ability to effectively leverage its banking subsidiary as a market-facing financial services provider could be rating-negative. A sustained enhancement of Ferratum's franchise by meaningfully growing the company's balance sheet without a marked increase in risk appetite, coupled with a further refinement of underwriting standards and the successful integration of recently established management functions within the wider company, could be rating-positive. Materially lower consolidated leverage on a sustained basis, in particular if in combination with an enhanced and more resilient franchise, could also support a positive rating action. ============= I R E L A N D ============= HAYFIN EMERALD II: Fitch Assigns 'BB(EXP)sf' Rating to Class E Debt ------------------------------------------------------------------- Fitch has assigned Hayfin Emerald CLO II DAC expected ratings. The assignment of the final ratings is contingent on the receipt of final documents conforming to information already reviewed. The transaction is a cash flow collateralised loan obligation (CLO). Net proceeds from the issuance of the notes will be used to purchase a portfolio of mostly senior secured leveraged loans and bonds with a target par of EUR400 million. The portfolio is managed by Hayfin Emerald Management LLP. The CLO envisages a 4.5-year reinvestment period and an 8.5-year weighted average life (WAL). KEY RATING DRIVERS 'B'/'B-' Portfolio Credit Quality Fitch expects the average credit quality of obligors to be in the 'B'/'B-' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 33.6, below the indicative covenanted maximum of 34. 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 weighted average recovery rating (WARR) of the identified portfolio is 69.2%, above the indicative covenanted minimum of 67%. Diversified Asset Portfolio The transaction will include two Fitch test matrices corresponding to various top 10 obligors concentration limits. The manager can interpolate within and between these matrices. The transaction also includes various concentration limits, including the maximum exposure to the three largest (Fitch-defined) industries in the portfolio at 40%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Adverse Selection and Portfolio Management The transaction features a 4.5-year reinvestment period and includes reinvestment criteria similar to other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. 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. Different Waterfall Structure The transaction has a slightly different waterfall structure to the market standard waterfall. In the interest waterfall, the subordinated class M return amount and deferred amount, collateral manager advance and collateral manager advance interest ranks after the unrated class S-1 interest and deferred interest but before the interest diversion test. Fitch has tested the impact of this feature and found that under the agency's stress scenarios the impact on the breakeven default rate is minimal. Recovery of Secured Senior Obligations For the purpose of Fitch recovery rate calculation, in case no recovery estimate is assigned, secured senior loans will be assumed to have a strong recovery. For secured senior bonds, recovery will, however, be assumed at 'RR3', rather than a strong recovery. The different treatment of recovery is based onhistorically lower recoveries observed for bonds and that revolving credit facilities (RCFs) typically rank pari passu withloans but senior to bonds. The transaction features a revolving RCF limit of 15% and 20% to be considered when categorising the loan or bond respectively as senior secured. RATING SENSITIVITIES A 25% 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 five notches for the rated notes. SUMMARY OF FINANCIAL ADJUSTMENTS NA USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC 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 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. 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. RATING ACTIONS HAYFIN EMERALD EUROPEAN CLO II DAC Class A-1 at AAA(EXP)sf Expected Rating Class A-2 at AAA(EXP)sf Expected Rating Class B-1 at AA(EXP)sf Expected Rating Class B-2 at AA(EXP)sf Expected Rating Class C at A(EXP)sf Expected Rating Class D at BBB(EXP)sf Expected Rating Class E at BB(EXP)sf Expected Rating Class M at NR(EXP)sf Expected Rating Class S-1 at NR(EXP)sf Expected Rating Class S-2 at NR(EXP)sf Expected Rating HAYFIN EMERALD II: Moody's Assigns (P)Ba2 Rating to Class E Notes ----------------------------------------------------------------- Moody's Investors Service has assigned provisional ratings to seven classes of notes to be issued by Hayfin Emerald CLO II DAC: - EUR 148,000,000 Class A-1 Senior Secured Floating Rate Notes due 2032, Assigned (P)Aaa (sf) - EUR 100,000,000 Class A-2 Senior Secured Floating Rate Notes due 2032, Assigned (P)Aaa (sf) - EUR 18,800,000 Class B-1 Senior Secured Floating Rate Notes due 2032, Assigned (P)Aa2 (sf) - EUR 20,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2032, Assigned (P)Aa2 (sf) - EUR 24,400,000 Class C Senior Secured Deferrable Floating Rate Notes due 2032, Assigned (P)A2 (sf) - EUR 20,800,000 Class D Senior Secured Deferrable Floating Rate Notes due 2032, Assigned (P)Baa2 (sf) - EUR 26,800,000 Class E Senior Secured Deferrable Floating Rate Notes due 2032, Assigned (P)Ba2 (sf) Moody's issues provisional ratings in advance of the final sale of financial instruments, but these ratings only represent Moody's preliminary credit opinions. Upon a conclusive review of a transaction and associated documentation, Moody's will endeavour to assign definitive ratings. A definitive rating (if any) may differ from a provisional rating. RATINGS RATIONALE As described in Moody's methodology, the ratings analysis considers the risks associated with the CLO's portfolio and structure. In addition to quantitative assessments of credit risks such as default and recovery risk of the underlying assets and their impact on the rated tranche, Moody's analysis also considers other various qualitative factors such as legal and documentation features as well as the role and performance of service providers such as the collateral manager. Hayfin Emerald CLO II is a managed cash flow CLO. At least 90% of the portfolio must consist of secured senior obligations and up to 10% of the portfolio may consist of unsecured senior loans, unsecured senior bonds, second lien loans, mezzanine obligations and high yield bonds. At closing, the portfolio is expected to be almost fully ramped up and to be comprised predominantly of corporate loans to obligors domiciled in Western Europe. Hayfin Capital Management LLP will manage the CLO. It will direct the selection, acquisition and disposition of collateral on behalf of the Issuer and may engage in trading activity, including discretionary trading, during the transaction's 4.5-year reinvestment period. Thereafter, subject to certain restrictions, purchases are permitted using principal proceeds from unscheduled principal payments and proceeds from the sale of credit risk obligations, and are subject to certain restrictions. In addition to the seven classes of notes rated by Moody's, the Issuer will issue EUR 49.1M of subordinated notes which will not be rated. 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 March 2019. 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 modeled the transaction using 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 March 2019. The cash flow model evaluates all default scenarios that are then weighted considering the probabilities of the binomial distribution assumed for the portfolio default rate. In each default scenario, the corresponding loss for each class of notes is calculated given the incoming cash flows from the assets and the outgoing payments to third parties and noteholders. Therefore, the expected loss or EL for each tranche is the sum product of (i) the probability of occurrence of each default scenario and (ii) the loss derived from the cash flow model in each default scenario for each tranche. As such, Moody's encompasses the assessment of stressed scenarios. For modeling purposes, Moody's used the following base-case assumptions: Target Par Amount: EUR400,000,000 Diversity Score: 43 Weighted Average Rating Factor (WARF): 2925 Weighted Average Spread (WAS): 3.75% Weighted Average Fixed Coupon (WAC): 5.25% Weighted Average Recovery Rate (WARR): 44.75% Weighted Average Life (WAL): 8.5 years Moody's has addressed the potential exposure to obligors domiciled in countries with local currency ceiling (LCC) of A1 or below. As per the portfolio constraints and eligibility criteria, exposures to countries with LCC of A1 to A3 cannot exceed 10% and obligors cannot be domiciled in countries with LCC below A3. MARKET BAR: Carval Withdraws Bid Following Deal ----------------------------------------------- Mark Paul at The Irish Times reports that US hedge fund Carval has withdrawn a bid for the well-known Dublin venue, the Market Bar, to be put into examinership, after reaching a deal on the steps of the High Court with the bar's owner, led by financier Niall McFadden. Carval's Launceston Property Finance is understood to be owed about EUR900,000 by Mercroft Taverns on foot of a 2008 Anglo Irish Bank loan, which Carval acquired from the bank's IBRC successor in 2014, The Irish Times discloses. The so-called "vulture fund" Launceston subsequently became embroiled in a repayment dispute with the bar, whose owners also included the late entertainment industry figure, businessman John Reynolds, who died in October, The Irish Times relates. However, Launceston was unable to appoint a receiver to take control of the bar, as it lost the mortgage documents upon which its security is based, The Irish Times states. Instead, the fund sought to have Mercroft placed into interim examinership, before striking the deal with Mercroft outside the court on March 8, The Irish Times notes. =================== L U X E M B O U R G =================== MILLICOM INTERNATIONAL: Fitch Rates $500MM Sr. Unsec. Notes 'BB+' ----------------------------------------------------------------- Fitch Ratings has assigned a long-term rating of 'BB+' to Millicom International Cellular, S.A.'s (MIC) proposed USD500 million senior unsecured notes issuance due 2029. The proceeds will be used to prefund a portion of Millicom's USD1.65 billion acquisition of Telefonica S.A.'s mobile assets in Panama, Nicaragua, and Costa Rica. Fitch expects about half of the purchase price to be financed at the hold-co and the remaining amount to be financed with additional debt at the operating levels. Post financing, Fitch expects the company's leverage, as measured by adjusted consolidated net debt to EBITDAR, will increase to around 3.0x and then trend down in the medium term, as the company focuses on deleveraging. MIC's ratings reflect geographic diversification, strong brand recognition and network quality, all of which contributed to leading positions in key markets, a strong subscriber base, and solid operating cash flow generation. In addition, the rapid uptake in subscriber data usage and MIC's ongoing expansion into the underpenetrated fixed-line services bode well for medium to long-term revenue growth. MIC's ratings are tempered, despite the company's diversification benefits, by the issuer's presence in countries in Latin America and Africa with low sovereign ratings and low GDP per capita. The operational environment in these regions, in terms of political and regulatory stability and economic conditions, tends to be more volatile than in developed markets. KEY RATING DRIVERS Acquisition to Improve Position in Central America: Millicom's acquisition of mobile assets in Panama, Costa Rica, and Nicaragua adds to Millicom's service offering in Central America by adding mobile services to countries the company already has an existing fixed-line presence. Fitch expects Millicom to benefit from leading mobile market shares of approximately 53% in Nicaragua and 34% in Panama, and a number two position in Costa Rica with 25% market share. Upon completion, Millicom will have cable and mobile in all of the Latam markets where it operates. The acquisition is expected to close during the second-half of 2019 after the required regulatory approval is received in each country. Leverage to Trend Down: Fitch believes that there will be added pressure on Millicom's financial position after the closing of the acquisitions. Adjusted consolidated net leverage is expected to increase slightly above 3.0x as the company issues new debt to fund the acquisitions. The ratings incorporate an expectation that the company will delever consolidated adjusted net leverage below 3.0x in the short to medium term, backed by solid cash flow generation and potential divestments of assets in lower return countries. Failure to reduce leverage below 3.0x could result in a negative rating action. The company plans to finance the acquisitions with USD1.6 billion of new debt. Millicom has secured bridge financing from a group of banks and plans to raise new senior unsecured debt at the holding company and at operating subsidiaries. Strong Market Positions: Fitch expects MIC's strong market position to remain intact, supported by network quality and extensive coverage, strong brand recognition and growing fixed-line home operations (cable and broadband). These qualities, exhibited across well-diversified operational geographies, should enable the company to continue to support stable cash flow generation and growth opportunities in underpenetrated data and cable segments. As of Dec. 31, 2018, the company maintained competitive market positions in its key mobile markets of Guatemala, Paraguay, Honduras and Colombia. Strong Upstream Dividends: Creditors of the holding company are subject to structural subordination to the creditors of the operating subsidiaries given that all cash flows are generated by subsidiaries. As of Dec. 31, 2018, the group's consolidated gross debt was USD5.9 billion, with 70% allocated to the operating subsidiaries. Positively, Fitch believes that a stable and high level of cash upstreams, through dividends and management fees from its subsidiaries, is likely to remain intact over the long term and will mitigate any risk stemming from this structural weakness. DERIVATION SUMMARY MIC's rating is well positioned relative to regional telecom peers in the 'BB' rating category based on a solid financial profile, operational scale and diversification, as well as strong positions in key markets. These strengths are offset by a high concentration in countries with low sovereign ratings in Latin America and Africa, which tend to have more volatile economic environments. MIC boasts a much stronger financial profile, compared with diversified integrated telecom operators in the region such as Cable & Wireless Communications Limited (BB-/Stable) and Digicel Limited (B-/Stable), supporting a higher, multi-notch rating. MIC's leverage is moderately higher than Empresa de Telecomunicaciones de Bogota, S.A. E.S.P. (ETB; BB+/Stable) but benefits from a stronger business profile that has leading market positions in multiple markets. MIC also has a stronger capital structure and business profile than Colombia Telecomunicaciones, S.A. E.S.P. (BB+/Stable), an integrated telecom operator, and Axtel S.A.B. de C.V. (BB-/Stable), a Mexican fixed-line operator. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Low-single-digit annual revenue growth in the medium term; -- Mobile service revenue contraction to be offset by increasing mobile data revenues over the medium term; -- Revenue contribution from mobile data and home service operations to grow toward 55% of total revenues by 2020; -- Home service segment to undergo double-digits revenue growth in the short-to-medium term. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Expectation of improvement in adjusted consolidated net leverage of 2.0x or below over the rating horizon; -- Increased diversification of dividends flow/consistent and stable dividends from Colombian operations; -- Positive rating action on sovereign countries that contribute significant dividend flow. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Adjusted consolidated net leverage above 3.0x on a sustained basis; -- Additional debt funded acquisitions that could pressure credit quality; -- Consistent negative FCF generation due to competitive/regulatory pressures or aggressive shareholder distributions. LIQUIDITY Sound Liquidity Profile: Millicom benefits from a good liquidity position, given the company's large cash position, which fully covers short-term debt. As of Dec. 31, 2018, the consolidated group's readily available cash was USD769 million, which comfortably covers its short-term debt obligations of USD543 million. Fitch expects the company to finance the acquisition of the new mobile assets with new debt. Fitch does not foresee any liquidity problem for both the operating companies and the holding company given the operating companies' stable cash generation and consistent cash upstreaming to the holding company. MIC has a good track record, in terms of access to capital markets when in need of external financing, supporting liquidity management. FULL LIST OF RATING ACTIONS Fitch currently rates the following: Millicom International Cellular, S.A. -- Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB+'; Outlook Stable; -- Long-Term Local Currency IDR at 'BB+'; Outlook Stable; -- Senior unsecured debt at 'BB+'. The Rating Outlook is Stable. MILLICOM INTERNATIONAL: Moody's Rates Proposed $500M Sr. Notes Ba2 ------------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to the proposed $500 million senior unsecured notes due 2029 to be issued by Millicom International Cellular S.A. ("Millicom"). Millicom's existing Ba2 senior unsecured ratings and its Ba1 CFR remain unchanged. The ratings outlook is stable. Proceeds from the proposed issuance will be used to partly fund Millicom's acquisition of Telefonica CAM's mobile operations announced on 20 February, for a total enterprise value of $1.65 billion. As expected, the transaction will be debt funded, increasing its estimates for Millicom's leverage at the end of 2019 to around 3.4x, but still below Moody's downgrade trigger of 3.5x. The rating of the proposed notes assumes that the issuance will be successfully completed and that the final transaction documents will not be materially different from draft legal documentation reviewed by Moody's to date and assume that these agreements are legally valid, binding and enforceable. Rating assigned: Issuer: Millicom International Cellular S.A. $500 million Senior Unsecured Notes due 2029: Ba2 The company's existing ratings are unchanged: Issuer: Millicom International Cellular S.A. Corporate Family Rating: Ba1 Senior Unsecured Regular Bond/Debenture: Ba2 The outlook for all ratings is Stable RATINGS RATIONALE Millicom's Ba1 corporate family rating reflects the company's strong operating performance, solid business model, leading market shares in key geographies, and multiregional balance of profit and cash flow generation that have been improving over the last couple of years on a consolidated basis. The rating also incorporates the regulatory and other operating risks and limitations in the countries where the company operates. The Ba2 rating on Millicom's senior unsecured notes reflects their structural subordination to debt at the operating company level as well as their unguaranteed status. Pro-forma for the recent acquisitions and proposed notes issuance, debt at the holding company level will amount to around 30% of total consolidated debt as of December 2018. The acquisition of Telefonica CAM's mobile operations will enhance the geographic diversification of Millicom's sources of cash flow. Millicom already controls and operates cable networks in Panama, Nicaragua and Costa Rica, and the acquired mobile businesses will complement those businesses. Additionally, the acquisition aligns with Millicom's convergence strategy of offering fixed-mobile services. Millicom's liquidity is adequate. As of December 2018, the company had around $530 million in cash. Upcoming debt obligations maturing over the next few years include $458 million in 2019, $338 million in 2020 and $403 million in 2021. The company also has a five-year committed revolving credit facility totaling $600 million due in January 2022, fully available as of December 2018. The stable outlook reflects Moody's expectations that Millicom will maintain its liquidity at adequate levels while keeping committed to its 2.0x net leverage target. Moody's also expects the company to continue its conservative approach in managing its debt maturities ahead of schedule avoiding near term concentration of payments. The stable outlook also considers that the increase in leverage as a consequence of recent acquisitions will be temporary. Downward pressure on Millicom's ratings could develop if liquidity or metrics deteriorate because of an elevated gross debt leverage surpassing 3.5 times, higher than anticipated shareholder remuneration, or a material debt-funded acquisition that increases leverage without prospects of recovery. The ratings could also be downgraded if Millicom concentrates its exposure to riskier countries, or in case of increased sovereign risk in any of the countries in which it currently operates. Positive pressure on Millicom's ratings could arise if the company's gross debt leverage decreases below 2.5 times on an ongoing basis, its retained cash flow to debt increases above 30% and if the group sustains a strong liquidity position. An upgrade would also be dependent on an improvement in the balance of risk across the countries in which Millicom operates and would require the group to maintain its strong market positions, a good level of geographical diversification of cash flows, the continued ability to repatriate dividends from its subsidiaries and conservative financial policies. Millicom International Cellular S.A. is a global telecommunications investor focused on emerging markets, with cellular operations and licenses in 11 countries in Latin America and Africa. The company has around 51 million mobile customers, and 3.3 million cable and broadband households. The company derives around 90% of its revenue from its Central and South American operations in El Salvador, Guatemala, Honduras, Costa Rica, Nicaragua, Colombia, Bolivia, Paraguay and Panama. In Africa, Millicom operates in Chad and Tanzania, and through a joint venture in Ghana. The company also offers cable and satellite TV services in Central and South America. For the fiscal year ended in December 2018, the company's consolidated revenue reached $4.1 billion. Millicom is incorporated in Luxembourg and publicly listed on the Stockholm Stock Exchange. The principal methodology used in this rating was Telecommunications Service Providers published in January 2017. =========== R U S S I A =========== RTS BANK: Put on Provisional Administration, License Revoked ------------------------------------------------------------ The Bank of Russia, by virtue of Order No. OD-512, dated March 14, 2019, revoked the banking license of Togliatti-based credit institution Joint-stock Company Bank for Development of Technologies and Savings or JSC RTS BANK (Registration No. 3401, the Samara Region) from March 14, 2019. According to its financial statements, as of March 1, 2019, the credit institution ranked 332nd by assets in the Russian banking system. RTS BANK's business model was that of a captive bank. Its principal activity was corporate lending aimed at financing a number of construction projects. The emerged difficulties hampering the implementation of these projects caused accumulation of a considerable amount of non-performing assets on the credit institution's balance sheet. The bank has consistently underestimated credit risk assumed, the Bank of Russia has repeatedly requested that it create additional loan loss provisions. The due diligence check of credit risk at the regulator's request established a substantial (approx. 40%) decrease in the bank's capital and entailed the need for insolvency (bankruptcy) prevention measures, which created a real threat to its creditors' and depositors' interests. Furthermore, in order to conceal the bank's real financial standing and artificially maintain the capital to formally comply with the required ratios, RTS BANK performed opaque transactions. The Bank of Russia repeatedly (4 times over the last 12 months) applied supervisory measures against RTS BANK, including impositions of restrictions on household deposit taking. The RTS BANK's operations showed signs of misconduct by its executives who sought to withdraw liquid assets to the detriment of creditors' and depositors' interests. The Bank of Russia will submit information about the bank's transactions suggesting a criminal offence to law enforcement agencies. Under these circumstances, the Bank of Russia took the decision to revoke RTS BANK's banking license. The Bank of Russia takes this extreme measure because of the credit institution's failure to comply with federal banking laws and Bank of Russia regulations, due to repeated application within a year of measures envisaged by the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)", considering a real threat to the creditors' and depositors' interests. The Bank of Russia, by virtue of its Order No. OD-513, dated March 14, 2019, appointed a provisional administration to RTS BANK for the period until the appointment of a receiver pursuant to the Federal Law "On Insolvency (Bankruptcy)" or a liquidator under Article 23.1 of the Federal Law "On Banks and Banking Activities". In accordance with federal laws, the powers of the credit institution's executive bodies were suspended. RTS BANK is a member of the deposit insurance system. The revocation of the banking license is an insured event as stipulated by the Federal Law "On the Insurance of Deposits with Russian Banks" in respect of a bank's liabilities to individuals, including entrepreneurs, and legal entities which the Federal Law "On the Development of Small and Medium-sized Businesses in the Russian Federation" recognized as small businesses. Due to the emergence of the insured event, the law provides for the payment of indemnities to the bank's depositors in the amount of 100% of the balance of funds but no more than a total of RUR1.4 million per depositor. The current development of the bank's status has been detailed in a press statement released by the Bank of Russia. ========= S P A I N ========= GIRALDA HOLDING: Moody's Assigns B2 CFR, Outlook Stable ------------------------------------------------------- Moody's Investors Service has assigned a B2 corporate family rating (CFR) and B2-PD probability of default rating (PDR) to Giralda Holding Conexion, S.L.U. (Konecta or the company). Concurrently, Moody's has assigned a B2 instrument rating to the EUR320 million Senior Facility B due 2026 to be raised by Giralda Holding Conexion, S.L.U. and Konecta BTO S.L., and a B2 instrument rating to the EUR60 million Senior Revolving Facility due 2025 to be raised by Giralda Holding Conexion, S.L.U. The outlook is stable. Proceeds from the issuance of the Senior Facility B alongside new equity amounting to EUR316 million in the form of common equity and shareholder loans will be used to (1) fund the acquisition of Inbond Inversiones 2014, S.L. by Intermediate Capital Group (ICG) and the current management team, (2) refinance the Inbond Inversiones 2014, S.L. group's existing debt (excluding outstanding local debt in international subsidiaries which will be rolled over), and (3) pay the fees related to this transaction. Inbond Inversiones 2014, S.L. is the 100% owner of Grupo Konectanet S.L.U., a leading provider of customer relationship management (CRM) and Business Process Outsourcing (BPO) services in Spain and Latin America. The shareholder loans issued by Giralda Holding Conexion, S.L.U. as part of the transaction meet Moody's criteria to be treated as equity as set out in the cross-sector rating methodology Hybrid Equity Credit, published in January 2017. The acquisition is expected to close on 19th March 2019 after customary approvals. ICG will hold 49.99% of the company going forward while 50.01% of the shares will be held by Konecta's management team upon reinvestment of c.100% of their proceeds. Before the sale to ICG and the management team, Grupo Konectanet was indirectly owned by funds advised by PAI, Banco Santander S.A., and the company's management. RATINGS RATIONALE "Konecta's B2 CFR reflects (1) the company's leading position in the outsourced CRM-BPO market in Spain and in certain Latin American countries, (2) the long-standing relationship with large customers, (3) the positive growth prospects for the CRM-BPO industry in particular in Latin America, and (4) the company's adequate liquidity position", says Sebastien Cieniewski, Moody's lead analyst for Konecta. These strengths are mitigated by (1) Moody's expectation that Konecta will generate relatively moderate free cash flow after interest payment (FCF) at around 3-4% as a percentage of total gross debt (as adjusted by Moody's mainly for operating leases and non-recourse and reverse factoring), (2) Moody's projected slow de-leveraging from 4.5x as of the end of 2018 (pro forma for the transaction) as revenue and EBITDA growth in Latin America will be partly offset by the depreciation of local currencies relative to the euro, (3) high customer concentration with the top 3 clients comprising 44% of 2018 revenues although this is partly mitigated by the fact that the single client exposure is typically broken down between multiple contracts and decision-makers, and (4) the limited potential for EBITDA margin growth given the highly fragmented and competitive nature of the CRM-BPO industry with pressure on prices. Moody's considers that Konecta benefits from an adequate liquidity position. Sources of liquidity include a cash balance of EUR15 million at the closing of the transaction, positive FCF after interest payment, and a EUR60 million Senior Revolving Facility which is fully undrawn at the closing of the transaction. The company also utilizes non-recourse factoring to manage its working capital needs and some of its key clients also provide reverse factoring. Moody's takes into consideration factoring and reverse factoring lines, which amounted to EUR79 million as of 31 December 2018, in the calculation of the adjusted leverage. The ability to access cash at subsidiaries level to serve holdco debt will need to be monitored although Moody's notes that there are currently no restrictions in place in any of the countries where Konecta operates on upstreaming cash. STRUCTURAL CONSIDERATIONS The Senior Facility B and Senior Revolving Facility rank pari passu. The facilities are guaranteed by a group of subsidiaries representing no less than 80% of the consolidated group's adjusted EBITDA (as defined in the Senior Facilities Agreement). The security package is mainly limited to shares, bank accounts and intercompany receivables. The B2-PD PDR is in line with the CFR as commonly used for capital structures with first lien secured debt with springing financial maintenance covenants. The instrument ratings of B2 on the EUR320 million Senior Facility B and EUR60 million Senior Revolving Facility are in line with the company's CFR reflecting the absence of any liabilities ranking ahead or behind. RATING OUTLOOK The stable outlook reflects Moody's expectation that Konecta will achieve organic revenue and EBITDA growth at low single digit rates despite projected headwinds arising from unfavorable FX movements. The outlook also assumes that Konecta will generate positive FCF after interest payment at above EUR15 million in 2019 trending to above EUR20 million in the following years. WHAT COULD CHANGE THE RATINGS UP Positive ratings pressure could develop over time if (1) the company reduces Moody's adjusted gross leverage towards 4.0x on a sustained basis, (2) Moody's adjusted FCF-to-Debt increases above mid-single digit rates on a sustained basis, (3) the company continues increasing its customers and sector diversification, and (4) Konecta maintains an adequate liquidity position. WHAT COULD CHANGE THE RATINGS DOWN Negative ratings pressure could develop if (1) the company experiences a deterioration of its performance driven by increased pressure on margins or the loss of a large customer, (2) FCF trends towards zero for a sustained period of time, (3) Moody's adjusted leverage increases towards 5.5x, or (4) liquidity deteriorates. Any material debt-funded acquisition or shareholder friendly action could put pressure on the ratings. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Madrid, Konecta is the leading provider of customer relationship management services in Spain with international operations in Latin America (including Colombia, Peru, Brazil, Argentina, Chile, and Mexico) and the UK, Portugal, and Morocco. It provides a broad range of customer care services primarily to the banking and insurance industry and the telecom sector. The company employs more than 58,000 people covering three languages -- Spanish, Portuguese, and English. The company generated revenues of EUR833.5 million and company adjusted EBITDA of EUR87.9 million in 2018 (based on management preliminary results including factoring and reverse factoring expenses). GIRALDA HOLDING: S&P Assigns Preliminary 'B+' ICR, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned its preliminary 'B+' long-term issuer credit rating to Spain-headquartered customer relationship management and business process outsourcing (BPO) provider Giralda Holding Conexion, S.L.U. (Konecta) and its preliminary 'B+' and '3' recovery rating to the group's senior secured facilities. S&P assigned the preliminary 'B+' ratings following the announcement that Intermediate Capital Group (ICG) and its senior management will jointly acquire Konecta. The transaction is expected to close on March 19, 2019. Konecta plans to finance the acquisition and refinance its existing capital structure by issuing a EUR320 million senior secured, first lien TLB, supported by a EUR60 million senior secured RCF. The final ratings will depend on the successful completion of the proposed transaction and receipt and satisfactory review of all final transaction documentation. Accordingly, the preliminary rating should not be construed as evidence of final ratings. If S&P does not receive final documentation within a reasonable time frame, or if final documentation departs from the material reviewed, it reserves the right to withdraw or revise the ratings. Potential changes include, but are not limited to, use of loan proceeds, maturity, size, and conditions of the loans, financial and other covenants, security, and ranking. S&P assesses the group's business risk profile as weak given its relatively concentrated client base, small absolute size, and the fragmented nature of the CRM/BPO market. This is mitigated by the group's good position in its chosen markets and relatively flexible cost base. Konecta generates about one-third of its total revenue from two clients, both of which are large multinationals. Despite the long-standing nature of their relationships, S&P considers Konecta to have relatively limited bargaining power. Additionally, the group has relatively limited sector diversity compared with some of the larger global players, such as Teleperformance, and Sitel, with telecommunications and financial services accounting for about 70% of total revenue in 2018. S&P also considers the CRM/BPO market to be highly competitive and fragmented, with Konecta's share of 1%-2% comparing less favorably with Teleperformance's roughly 6% and Convergys' 4%-5%. Given the scale benefits of offshoring for CRM/BPO providers, only the global market leaders have EBITDA margins above 15%, which S&P considers to be average for the general support services subsector as a whole. Konecta's business risk profile is supported by the group's good position in the Spanish and Latin American telecom and financial services end markets, with leading positions in Spain, Colombia, Argentina, and Peru. The group's revenue is fairly well diversified geographically, given its small size. In 2018, the group generated revenues of about EUR830 million, pro forma for the acquisition of Uranet, which closed in early 2019 but would have added EUR57 million of revenues in 2018. Including Uranet, around 43% of 2018 revenues were derived from Spain, 15% from Colombia, 11% from Brazil, 10% from Peru, and the majority of the balance from other countries in Latin America. S&P also considers the group's cost base to be relatively flexible, with staff costs accounting for about 70% of total revenue, and about half of the group's full-time equivalent workforce on temporary contracts (linked to the duration of the campaign), which provides some margin protection in the event of a downturn. S&P said, "We expect flat revenue growth for Konecta in 2018 due to expected currency headwinds in Argentina and Brazil offsetting solid growth in Spain. In 2019 we expect a recovery toward GDP growth, of about 2%-3%. We anticipate adjusted EBITDA margins of about 10.5% in 2018 and modest margin expansion toward 11% in 2019 due to the company realizing benefits from its acquisition of modestly-higher-margin Brazilian BPO service provider Uranet, synergies, and operational improvements. "Our assessment of Konecta's financial risk considers adjusted debt to EBITDA of about 4.2x expected at the end of 2019, pro forma for the transaction and the acquisition of Uranet. In our calculation of debt at transaction close, we include EUR42 million of Latin American debt that we believe will remain outstanding and EUR40 million of expected drawings under the company's factoring facility. When forecasting outstanding amounts under the factoring facility, we consider peak historical usage. "At the close of the transaction, a significant portion of the capital structure will comprise of shareholder loans. In our calculation of credit ratios, we treat these securities as equity since their governing documents contain features that we believe make them act as subordinated loss-absorbing capital, such as stapling provisions, and the absence of contractual payments due before the maturity of the loans. We expect free cash flow in the EUR25 million-EUR30 million range in 2019 given Konecta's relatively low interest burden, but recognize the uncertainty in its less predictable markets, such a Brazil and Argentina, that could result in volatile free cash flow. In 2019, we expect free cash flow will be used to pay mandatory amortization on the Latin America local debt, repayment of the small RCF drawing expected at close, and tuck-in acquisitions. "The stable outlook reflects our expectation that low-single-digit-percentage GDP growth in Spain and Latin America will drive similar revenue growth for Konecta, with adjusted EBITDA margins sustained above 10% and adjusted debt to EBITDA sustained below 5x. "We could lower the rating if growth headwinds in Latin America result in a continued revenue decline or if high restructuring costs or operation missteps compress EBITDA margins to below 10%. We could also lower the rating if the company adopts a more aggressive financial policy and maintains adjusted debt to EBITDA above 5x. Additionally, the rating could be lowered if ICG group or an affiliate takes a position in Konecta's TLB, which we believe would create conflicting interests within the group and would cause us to reconsider whether the shareholder loan has sufficient equity-like characteristics to be treated as equity when calculating credit metrics. "We view an upgrade as unlikely over the next 12 months. Longer term, we could raise the rating if Konecta improves its market share and customer and geographical diversification, and expands EBITDA margins to above 15%, which we consider average for the general support services subsector. We could also raise the rating if we anticipate that Konecta will adopt a more conservative financial policy with adjusted debt to EBITDA sustained below 4x, which would likely come from an indication that the sponsor would relinquish effective control over Konecta." =========================== U N I T E D K I N G D O M =========================== DEBENHAMS PLC: To Consider Mike Ashley's GBP150MM Loan Offer ------------------------------------------------------------ Ellen Milligan at Bloomberg News reports that Debenhams Plc cracked open the door to billionaire Mike Ashley for the first time, saying it's considering his bid to increase control over the U.K. retailer and install himself as chief executive officer. The billionaire's Sports Direct International Plc on March 13 offered a loan of GBP150 million (US$199 million) to the troubled department-store chain in a deal that would boost Mr. Ashley's stake to 35% from 30%, Bloomberg relates. The move was aimed at heading off a debt restructuring that Debenhams is negotiating with creditors, Bloomberg states. "The board will give careful consideration to the proposal and will engage with Sports Direct and other stakeholders regarding its feasibility in the interests of all parties," Bloomberg quotes Debenhams as saying on March 14. Sports Direct said under Mr. Ashley's new offer for unsecured lending, the retailer could use GBP40 million to pay off a bridge loan and use the rest for general working capital, Bloomberg discloses. If Debenhams independent shareholders approved the deal to issue new shares and boost Mr. Ashley's stake, the loan would be interest-free, Bloomberg notes. Debenhams, an anchor of Britain's shopping streets, has issued four profit warnings over fourteen months and is contending with a challenging U.K. retail climate, Brexit uncertainty and fierce competition from online retailers like Amazon.com Inc., Bloomberg relays. Debenhams has said restructuring options include a debt-for-equity swap, a shareholder rights issue or a so-called company voluntary arrangement, under which troubled U.K. retailers can seek rent reductions and close stores, Bloomberg recounts. GATOR HOLDCO: S&P Assigns B- Issuer Credit Rating, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigns a 'B-' issuer credit rating to Aptean Parent Gator Holdco (UK) Ltd. At the same time, S&P assigns a 'B-' issue-level rating and '3' recovery rating to the first-lien term loan, delayed-draw term loan, and revolving credit facility. S&P also assigns a 'CCC' issue-level rating and '6' recovery rating to the second-lien term loan. On Feb. 17, 2019, TA Associates and Vista Equity Partners agreed to acquire enterprise resource planning (ERP) software and solutions company Aptean Inc. and Yaletown Acquiror S.a r.l. The two financial sponsors will each own roughly 50% of the new company, with new audited entity named Gator Holdco (UK) Ltd., the parent of both entities. The transaction will be funded with a new credit facility and new cash equity from the financial sponsors. S&P said, "Our rating on Gator Holdco reflects the company's high starting leverage in the high-7x area, narrow market focus, small operating scale, and operations in an intensely fragmented and competitive market. We believe declines in some legacy products will limit growth prospects. Our expectation is that Aptean will continue to be acquisitive in pursuit of inorganic growth. However, we believe that Aptean's good EBITDA margins and strong net retention rates will continue to sustain stable operating performance. The stable outlook reflects our expectation that Aptean will deliver good EBITDA margins and consistent FOCF as the move toward SaaS offerings continues, and that the rating provides capacity to accommodate the company's acquisitive growth strategy." The stable outlook reflects S&P Global Ratings' expectation that Aptean will increase revenue, sustain strong retention rates, and deliver positive free cash flow over the next 12 months. S&P said, "Although unlikely over the next 12 months, we could downgrade Aptean if we view its capital structure as unsustainable. This could occur if Aptean has weakened liquidity or break-even FOCF due to a failure in mergers and acquisition (M&A) strategy that disrupts business operations, improved offerings from competition that drive away customers, or large debt-financed acquisitions or shareholder returns. "We could raise the rating on Aptean if the company achieves leverage below 7x and FOCF to debt above 5% with commitments to stay at these levels through acquisitions and shareholder returns. Aptean could achieve this through additional margin expansion, new customer wins, effective cross-selling of products, and international expansion." KEEPMOAT: S&P Withdraws B Long-Term Issuer Credit Rating -------------------------------------------------------- S&P Global Ratings withdrew its 'B' long-term issuer credit ratings on U.K. homebuilder Keepmoat (Keystone JVco Ltd.), at Keepmoat's request. The outlook was stable at the time of withdrawal. S&P also withdrew its issue rating on its senior secured notes, which have been redeemed. Keepmoat is a homebuilder in the U.K., operating in the affordable segment. The company covers the entire value chain, from purchasing land to producing homes, and it built 3,717 units in the year ending March 2018, with revenues of GBP556 million. In November 2018, Keepmoat successfully agreed a new term loan facility to refinance its GBP100 million senior secured notes, which had been due to mature in October 2019. S&P said, "Keepmoat's business risk profile reflects our view of the inherent volatility and cyclicality of the homebuilding industry in the U.K.'s highly fragmented housing market, characterized by low margins and low barriers to entry. We also note Keepmoat's reliance on government spending and initiatives such as the Help To Buy scheme, which 50% of its customers use. This is a much higher proportion than the average for other U.K. homebuilders (25%-35%). "Even though the U.K. housing market has cooled in response to the uncertainties regarding the Brexit process, we think that demand for affordable housing should remain robust in the medium-to-long term, given Keepmoat's regional focus outside London and the southeast, and the structural supply and demand imbalance in the U.K. housing market. "Our assessment of Keepmoat's financial risk profile reflects the company's moderate leverage, indicated by a debt-to-EBITDA ratio of debt below 4x; increasing working capital needs inherent to the industry; and the company's relatively small absolute cash flow base. "We also take into account the company's private equity ownership, which could push the company toward more-aggressive leverage compared with listed companies." KINGSTOWN GROUP: Challenging Market Conditions Prompt Collapse -------------------------------------------------------------- Business Sale reports that The Kingstown Group, a high-end furniture manufacturing business based in Hull has fallen into administration after citing "challenging market conditions" as the reason for its downfall. The Kingstown Group, which trades from its two branches -- Kingstown Furniture and Consort Furniture -- was forced to call in business rescue and recovery specialists Leonard Curtis to handle the administration process, with partners Phil Deyes -- phil.deyes@leonardcurtis.co.uk -- and Zack Minshull -- zack.minshull@leonardcurtis.co.uk -- appointed as joint administrators, Business Sale relates. According to Business Sale, Mr. Deyes commented: "The market conditions faced by these two companies has been extremely challenging. "Both have seen turnover fall dramatically, impacted mainly by a sharp decline in discretionary spending by UK consumers. "Economic uncertainty continues to influence spending decisions, with little foreseeable improvement in demand." Despite internal restructuring attempts to prolong trading operations, the business was forced to appoint administrators who are now preparing winding down operations, Business Sale notes. Financial information in the recorded accounts for the year ending April 2018 revealed a loss of roughly GBP400,000, Business Sale discloses. Potential buyers are invited to express their interest in the business immediately, Business Sale states. MCGILL & CO: Catalus Energy Acquires Business, Assets ----------------------------------------------------- Perry Gourley at The Scotsman reports that McGill & Co, the Dundee-based contracting group that fell into administration last month, has been bought by a property group in the city. According to The Scotsman, Catalus Energy Investments, owned by Dundee-based businessman Graeme Carling, has acquired the business and certain assets of McGill in a deal with administrators from KPMG. Under the deal Catalus has acquired the business, order book and the majority of the McGill's construction equipment and has also entered into an agreement to acquire the company's head office in Dundee, The Scotsman discloses. =============== X X X X X X X X =============== [*] BOOK REVIEW: Full Faith and Credit: The Great S & L Debacle --------------------------------------------------------------- Faith and Credit: The Great S & L Debacle and Other Washington Sagas Author: L. William Seidman Publisher: Beard Books Softcover: 316 Pages List Price: $34.95 Order a copy today at http://www.beardbooks.com/beardbooks/full_faith_and_credit.html "My friends, there is good news and bad news. The good news is that the full faith and credit of the FDIC and the U.S. government stands behind your money at the bank. But the bad news is that you, my fellow taxpayers, stand behind the U.S, government." Take it from L. William Seidman, former chairman of the FDIC under the Reagan and Bush administrations, in his irreverent Washington memoir. Chosen by Congress to lead the S&L cleanup, the author describes how the debacle was created and nurtured, and the lawsuits against Charles Keating, Michael Milken, and Neil Hush that it spawned. The story begins in the summer of 1973 when Seidman, then a Grand Rapids, Michigan, businessman and managing partner of one of the country's 10 largest accounting firms, which bore his family's name, was tapped by Nixon to be undersecretary of HUD. Seidman had scarcely unpacked his bags when "the summer of 1973" took on new meaning in Washington and across the country. Confirmation of any of the precarious president's nominations looked dubious in the extreme, and Seidman prepared to pack up again. Then came a call from the office of newly appointed Vice President Ford, Spiro Agnew, hastily departing, had left the office in a shambles. (Not least to be disposed of were large cases of Scotch whiskey, presented to Agnew by supplicants.) Would Seidman lend his managerial expertise for a few weeks to help a fellow Grand Rapidan get organized? One thing led to another in the usual Potomac way, and when Ford advanced to the presidency, Seidman was made his assistant for economic affairs. That job, too, was relatively short-lived, but a decade later he returned to Washington to head the FDIC under Reagan. What the author found was plenty disturbing. The over-optimism of the 1970s and 1980s, in particular, he believes, a speculative binge of real estate investing followed by recession, was resulting in numerous bank failures, more than 1,000 between 1986 and 1991. Worse, disaster loomed in the sister agency that insured savings and loan institutions; a majority of the nation's 4,000 S&Ls were on their way to bankruptcy. What caused the S&L crisis? Seidman, although a small-government advocate, blames a combination of deregulation and cutbacks in the oversight agencies. One of his many battles, for example, was with OMB, which sought to cut the FDIC's bank supervision staff just as it had tried to reduce the number of S&L examiners. But he finds a silver lining in the near catastrophe; proof of resilience. The diversity of the U.S. financial system is also its strength. Seidman's memoir is as much about life inside the Beltway as it is about financial crises, making this book, first published in 1990, no less entertaining today. Included are lively anecdotes of confrontations with heavy-weight White House chief of staff John Sununu, an interview with a wild-eyed Wyoming purchaser of FDIC property from a liquidated bank who arrived in Seidman's office armed with a gun to register his displeasure with the purchase (a valid objection, the author discovered), and ambush by Secret Service agents who converged on Seidman as he opened his window and leaned out to watch the president's helicopter take off. L. William Seidman was chairman of the Federal Deposit Insurance Corporation from 1985 to 1991. Under his supervision, the FDIC closed hundreds of failed banks and savings associations as the agency attended to a debacle that cost taxpayers roughly $200 billion. Seidman worked for U.S. Presidents Gerald R. Ford, Ronald Reagan and George H. W. Bush. He was also chief commentator on CNBC and publisher of Bank Director magazine. He was also on the speaking circuit, and a consultant to the Nippon Credit Bank, Morgan Stanley Dean Witter, Ernst & Young, and Freddie Mac, among others. Seidman died May 2009. He was 88. ********* 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 2019. 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 * * *