/raid1/www/Hosts/bankrupt/TCRLA_Public/070207.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, February 7, 2007, Vol. 8, Issue 27
Headlines
A R G E N T I N A
BALL CORP: Names Michael W. Feldser as Packaging Division Pres.
BANCO DE GALICIA: Will Repay ARS124-Million Central Bank Debt
BANCO RIO: Issuing New Debts for US$500 Mil. in Pesos & Dollars
CAF LA: Proofs of Claim Verification Is Until April 3
EMPRESA BOSIO: Trustee Verifies Proofs of Claim Until March 20
ERNST Y CIA: Seeks for Court Approval to Reorganize Business
FILTEXNA SA: Claims Verification Deadline Is on March 15
GAS ARGENTINO: Fitch Arg Holds D Rating on US$130-Million Notes
INDUSTRIAS METALURGICAS: Fitch Arg Puts BB- Rating on Notes
INSTITUTO RP: Asks for Court Approval to Reorganize Business
WENDY'S INT'L: Issues Financial Forecasts for 2007, 2008 & 2009
B A R B A D O S
TARGUS GROUP: Names Robert Shortt as Sales & Marketing Sr. VP
B E L I Z E
* BELIZE: Government Taking Over Universal Health's Assets
* BELIZE: 9.75% Noteholders Approve Amendments to Debt Agreement
B E R M U D A
LORAL LICENSING: Shareholders First Meeting Is Set for Feb. 12
LORAL SPACE: Shareholders First Meeting Is on Feb. 12
SEA CONTAINERS: GNER Hints Probable Bid for East Coast Main Line
SEA CONTAINERS: U.S. Trustee Appoints SeaCon Services' Committee
B O L I V I A
UNIVERSAL COMPRESSION: Board OKs Merger of Equals with Hanover
UNIVERSAL COMPRESSION: Merger Cues Moody's to Review Ratings
* Bolivia: Gets Back Natural Gas Installation from Protesters
* BOLIVIA: Gov't Suspends 14 Oil Contracts with Foreign Firms
* BOLIVIA: Presenting Hydrocarbons Sector Restructuring Proposal
B R A Z I L
EMI GROUP: Rising Debt Cues S&P to Cut Rating to BB- from BB
FLEXTRONICS: Revenue Growth Cues Moody's to Affirm Ba1 Rating
HAYES LEMMERZ: Moody's Cuts Corp. Family Rating to Caa1 from B3
FURNAS CENTRAIS: Investing BRL450 Million for Luiz Carlos Plant
NATIONAL STEEL: Fitch Rates US$450M 9.875% Perpetual Notes at BB
PETROLEO BRASILEIRO: Gets US$399.1MM Tenders for Exchange Offer
PETROLEO BRASILEIRO: Unit Starts Operations on Gulf of Mexico
SMITHFIELD FOODS: Certifies Compliance with Antitrust Division
TAM SA: Incorporates First MD-11 Aircraft into Fleet
* BRAZIL: Fitch Affirms BB Sovereign Issuer Default Ratings
C A Y M A N I S L A N D S
ALTAIR CAPITAL: Proofs of Claim Filing Deadline Is on Feb. 22
ARRAKIS FUND: Proofs of Claim Filing Deadline Is on Feb. 22
GLOBAL PRIVATE: Last Day for Proofs of Claim Filing Is Feb. 20
GREENBLOCK INVESTMENT: Final General Meeting Is on Feb. 20
J SHOP IV: Last Day for Proofs of Claim Filing Is on Feb. 22
LIBRETTO INVESTMENTS: Proofs of Claim Must be Filed by Feb. 22
OLD MUTUAL ASIA: Creditors Must File Proofs of Claim by Feb. 22
OLD MUTUAL US: Deadline for Proofs of Claim Filing Is on Feb. 22
SEAGATE TECH: Partners with Fry's to Offer Data Recovery Service
SERES CAPITAL: Proofs of Claim Filing Deadline Is on Feb. 16
SOCS LTD: Creditors Have Until Feb. 22 to File Proofs of Claim
STANFIELD OPPORTUNISTIC: Claims Filing Deadline Is on Feb. 22
C H I L E
INFOR GLOBAL: To Refinance Existing Credit Facilities
INFOR GLOBAL: Moody's Affirms B3 Corporate Family Rating
INFOR GLOBAL: S&P Affirms B- Corporate Credit Rating
C O L O M B I A
* COLOMBIA: Free Trade Accord with US May be Ratified in June
C U B A
* CUBA: Investing Over US$300 Mil. to Improve Industry Output
E C U A D O R
PETROLEO BRASILEIRO: Faces Env'l Probe by Ecuadorian Authorities
* ECUADOR: Probes Petrobras on Environmental Pact Compliance
E L S A L V A D O R
INTERPUBLIC GROUP: Names Bant Breen as Marketing Group President
G U A T E M A L A
BRITISH AIRWAYS: Moody's Changes Ratings' Outlook to Positive
H O N D U R A S
CONTINENTAL AIR: Picks Pinnacle as New Regional Airline Partner
LEAR CORP: American Real Offers to Buy Firm for US$36 Per Share
LEAR CORP: S&P Says Ratings Unaffected by American Real's Offer
LEAR CORP: Fitch Places Low-B Ratings on Negative Watch
LEAR CORP: Moody's Puts Ratings on Review for Possible Downgrade
J A M A I C A
AIR JAMAICA: Fleet Replacement to Cut Costs by USUS$38 Million
GOODYEAR TIRE: Operations Back to Normal After Warehouse Fire
MAAX HOLDINGS: Posts 5.9% Sales Decrease in 2007 3rd Fiscal Qtr.
SUGAR COMPANY: Government Assumes Firm's Debt
* JAMAICA: Government May Provide Financial Support to Hotels
M E X I C O
ADVANCED MARKETING: Has Until March 9 to File Schedules
ADVANCED MARKETING: Panel Objects to Wells Fargo DIP Financing
ASARCO: Files Suit Against Grupo Mexico to Recover SPCC Asset
BEARINGPOINT: Providing Update on 4th Quarter Results on Feb. 13
HERBALIFE: S&P Puts Corp. Credit Rating on Watch on Whitney Bid
HOME PRODUCTS: Panel Wants Fried Frank as Lead Bankruptcy Atty.
HOME PRODUCTS: Panel Wants Pachulski Stang as Local Bankr. Atty.
GRUPO MEXICO: Facing Asarco's Fraudulent Stake Transfer Suit
VALASSIS COMMS: Promotes Thomas Murray to VP of Insert Business
P E R U
COMVERSE TECH: NASDAQ Delists Common Stock Effective Feb. 1
COMVERSE TECHNOLOGY: Delisting Prompts S&P to Hold Neg. Watch
P U E R T O R I C O
BURGER KING: Declines CIW's "Penny Per Pound" Proposal
FIRST BANCORP: Declares Payment of Preferred Dividends
MERIDIAN AUTO: Feb. 12 Set as Administrative Claims Bar Date
NEWCOMM WIRELESS: Committee Seeks to Retain Goldman as Counsel
NEWCOMM: Panel Taps Falkenberg Capital as Financial Advisors
SEARS HOLDINGS: Discloses Kmart & Sears Comparable Store Sales
UNITED AIRLINES: Restructures US$3 Billion Secured Debt Facility
T R I N I D A D & T O B A G O
BRITISH WEST: Never Appropriately Capitalized, Says Lok Jack
ROYAL CARIBBEAN: Earns US446.6 Million in Fourth Quarter 2006
V E N E Z U E L A
AMERICAN COMMERCIAL: Moody's Withdraws B1 Corp. Family Rating
ARVINMERITOR: Offering US$175MM Sr. Notes in Private Placement
PETROLEOS DE VENEZUELA: JV Updating Document Management Process
* Moody's Reports on Summary LGD Results for the Chemical Sector
- - - - -
=================
A R G E N T I N A
=================
BALL CORP: Names Michael W. Feldser as Packaging Division Pres.
---------------------------------------------------------------
Ball Corp. disclosed that Michael W. Feldser will become
president of Ball Metal Food & Household Products Packaging
Division, Americas, effective April 1 of this year. He has been
president of aerosol & specialty packaging since joining Ball in
early 2006.
Mr. Feldser will have overall responsibility for all aspects of
the division's business, which produces metal food cans, aerosol
cans and specialty packaging at 17 facilities in the U.S.,
Canada and Argentina and had 2006 sales of US$1.19 billion.
Brian M. Cardno, who has been president, metal food packaging,
since 2002, has announced his plans to retire in May 2008.
"We made considerable progress during 2006 in the integration of
our metal food can business with the aerosol and specialty
business we acquired at the end of March, and Brian and Mike
worked well together in leading that process," said John R.
Friedery, senior vice president and chief operating officer,
Ball Packaging Products, Americas. "The next step in the
integration is to place the combined businesses under a single
management structure.
"Mike is a 30-year veteran of the packaging industry and knows
these businesses very well," Mr. Friedery said. "His knowledge
and experience will help make this integration a success. Brian
has made significant contributions to Ball during his 19 years
with the company, particularly in our international and metal
food container businesses, and we will draw on his knowledge
between now and his retirement."
Headquartered in Broomfield, Colorado, Ball Corp. --
http://www.ball.com/-- is a supplier of high-quality metal and
plastic packaging products. It owns Ball Aerospace &
Technologies Corp. -- a developer of sensors, spacecraft,
systems and components for government and commercial customers.
Ball Corp. reported sales of US$5.7 billion in 2005 and the
company employs about 13,100 people worldwide, including
Argentina.
* * *
Moody's Investors Service assigned ratings to Ball Corp.'s
US$500 million senior secured term loan D, rated Ba1, and
US$450 million senior unsecured notes due 2016-2018, rated Ba2.
It also affirmed existing ratings, which include Ba1 Ratings on
US$1.475 billion senior secured credit facilities and US$550
million senior unsecured notes due Dec. 12, 2012. Moody's said
the ratings outlook is stable.
Fitch affirmed Ball Corp.'s 'BB' issuer default rating, 'BB+'
senior secured credit facilities, and 'BB' senior unsecured
notes.
Standard & Poor's Ratings Services also affirmed its 'BB+'
corporate credit rating on Ball Corp.
S&P placed the ratings in March 2006.
BANCO DE GALICIA: Will Repay ARS124-Million Central Bank Debt
-------------------------------------------------------------
Banco Galicia and Banco de la Provincia de Buenos Aires aka
Bapro will pay ARS124 million in debts owed to the central bank,
the latter said in a statement.
Business News Americas relates that the payments are the 36th
installment in the repayment plan the central bank drafted in
2003. The debt comes from massive liquidity lines provided by
the central bank to the financial system during the 2001 and
2002 economic and financial crisis.
The central bank told BNamericas that with the payment, the
banking sector's debt will become ARS3.52 billion as banks have
already paid 81.0% of their original debts.
Banco de Galicia had paid in January ARS1.77 billion to the
central bank, lowering its debt to 16.5%, BNamericas states.
Headquartered in Buenos Aires, Argentina, Banco de Galicia y
Buenos Aires SA -- http://www.e-galicia.com/-- is an
Argentinean private bank that is engaged in commercial banking,
providing general banking services to large corporations, small
and medium-sized companies, agricultural and cattle farms and
individuals. The company controls an extensive and diverse
network of subsidiaries, which include Banco Galicia Uruguay SA,
Galicia Capital Markets SA, Galicia Factoring y Leasing SA, Agro
Galicia SA, Galicia Administradora de Fondos SA, Galicia Valores
SA, Galicia Warrants SA, Net Investments SA, Sudamericana
Holding SA and Tarjetas Regionales SA. Through its subsidiaries
the company offers accounting, investment and insurance
services, loans, checks and debit and credit cards. It also
finances the development of real estate, acts as a fiduciary and
leases properties to interested parties. It operates over 400
branches across the country and provides e-banking services to
customers via its Internet site.
* * *
As reported on Apr. 12, 2006, the Argentine arm of Standard &
Poor's assigned these ratings to Banco de Galicia y Buenos
Aires' debts:
-- Obligaciones negociables, series 6, emitted on July 19,
2002 for US$73,000,000, emitted under the program for
US$1000 million
* Last due: Aug. 3, 2007
* Rate: raA
-- Obligaciones Negociables, class 7 for US$43,000,000,
included under the US$1000 million program
* Last due: Aug. 3, 2007
* Rate: raA
-- Program of obligaciones negociables, media term, for
US$2,000,000,000
* Rate: raA
-- Obligaciones Negociables simples 8-11-93, for
US$21,400,000
* Last due: Nov. 1, 2004
* Rate: raD
-- Obligaciones negociables simples for US$21,400,000
* Last due: Nov. 1, 2004
* Rate: raD
-- Obligaciones Negociables emitted for US$9,000,000,
included under the US$1000 million program.
* Last due: Dec. 20, 2005
* Rate: raD
BANCO RIO: Issuing New Debts for US$500 Mil. in Pesos & Dollars
---------------------------------------------------------------
Banco Rio de la Plata wants to secure more funds through the
issuance of new debts denominated in pesos and dollars.
Banco Rio has called for an assembly of shareholders on Feb. 16
in order to consider the emission of bonds for US$500 million.
It is timely for banks to issue new debts because of favorable
conditions in the financial markets, interests are low and the
dollar currency is stable.
Headquartered in Buenos Aires, Argentina, Banco Rio de la Plata
is an Argentinean private bank providing a range of financial
services, including retail, corporate, and merchant banking,
insurance, credit cards and fund management, to individuals,
companies of all sizes, financial institutions and the public
sector (both provincial and national). The company has a
network of approximately 280 branches and employs over 5,000
serving over 1 million customers. It is part of the Latin
American franchise of Banco Santander Central Hispano, which
holds over 80% of the bank's share capital.
* * *
On June 29, 2005, Moody's Investor Service assigned Caa1 ratings
on Banco Rio de la Plata's Issuer and Long-Term Bank Deposits
Ratings.
CAF LA: Proofs of Claim Verification Is Until April 3
-----------------------------------------------------
Estudio Ramil, Macias, Bisignano y Cacace, the court-appointed
trustee for CAF La Conexion SRL's reorganization proceeding,
will verify creditors' proofs of claim until April 3, 2007.
Estudio Ramil will present the validated claims in court as
individual reports on May 18, 2007. Court No. 5 Buenos Aires
will determine if the verified claims are admissible, taking
into account the trustee's opinion and the objections and
challenges raised by CAF La and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of CAF La's accounting
and banking records will follow on July 3, 2007.
On Dec. 17, 2007, CAF La's creditors will vote on a settlement
plan that the company will lay on the table.
Clerk No. 10 assists the court in the case.
The debtor can be reached at:
CAF La Conexion SRL
Crespo 2031
Buenos Aires, Argentina
The trustee can be reached at:
Estudio Ramil, Macias, Bisignano y Cacace
Lavalle 1619
Buenos Aires, Argentina
EMPRESA BOSIO: Trustee Verifies Proofs of Claim Until March 20
--------------------------------------------------------------
Carlos Daniel Kaen, the court-appointed trustee for Empresa
Bosio SRL's bankruptcy proceeding, verifies creditors' proofs of
claim until March 20, 2007.
Mr. Kaen will present the validated claims in court as
individual reports on May 7, 2007. A court in San Fernando del
Valle de Catamarca will determine if the verified claims are
admissible, taking into account the trustee's opinion and the
objections and challenges raised by Empresa Bosio and its
creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Empresa Bosio's
accounting and banking records will follow on June 19, 2007.
Mr. Kaen is also in charge of administering Empresa Bosio's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Empresa Bosio S.R.L.
Sarmiento 545, San Fernando Del Valle de Catamarca
Catamarca, Argentina
ERNST Y CIA: Seeks for Court Approval to Reorganize Business
------------------------------------------------------------
Court No. 8 in Buenos Aires is studying the merits of Ernst y
Cia. SRL's petition to reorganize its business after it stopped
paying its obligations.
The petition, once approved by the court, will allow Ernst y Cia
to negotiate a settlement plan with its creditors in order to
avoid a straight liquidation.
Clerk No. 8 assists the court in the case.
The debtor can be reached at:
Ernst y Cia. SRL
Esmeralda 851
Buenos Aires, Argentina
FILTEXNA SA: Claims Verification Deadline Is on March 15
--------------------------------------------------------
Mauricio Mudric, the court-appointed trustee for Filtexna SA's
bankruptcy proceeding, verifies creditors' proofs of claim until
March 15, 2007.
Mr. Mudric will present the validated claims in court as
individual reports. A court in Buenos Aires will determine if
the verified claims are admissible, taking into account the
trustee's opinion and the objections and challenges raised by
Filtexna and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
Mr. Mudric will also submit a general report that contains an
audit of Filtexna's accounting and banking records. The report
submission dates have not been disclosed.
Mr. Mudric is also in charge of administering Filtexna's assets
under court supervision and will take part in their disposal to
the extent established by law.
The trustee can be reached at:
Filtxna SA
Tucuman 893
Buenos Aires, Argentina
GAS ARGENTINO: Fitch Arg Holds D Rating on US$130-Million Notes
---------------------------------------------------------------
Fitch Argentina Calificadora de Riesgo holds the D rating it
assigned to Gas Argentino S.A.'s Negociables for US$130 million.
The rate given responds to the non-payment of the services of
debt since April 2002. Despite that, Fitch considers the
agreement reached by GASA with its creditors on Dec. 2005 as
positive, the rate will be kept in D until the end of the
restructuring proceedings.
The agreement reached includes the capitalization of the whole
of the debt through the exchange of shares of GASA and Metrogas.
The exchange depends in the approval of ENARGAS and the Comision
Nacional de Defensa de la Competencia.
The Obligaciones Negociables of GASA for US$70 million are in
the hands of funds administrated by Ashmore Investment
Management Limited and Marathon Asset Management. The
restructuring agreement includes: issuance of new GASA shares,
which represent 30% of its capital, to Ashmore funds, and the
transfer of Metrogas' class B shares: 3.65% in favor of Fondos
Ashmore and 15.35% in favor of Marathon. Under this scheme,
GASA will keep 51% stake in Metrogas (class A shares) and in
this way, the British Gas and Repsol YPF, indirect controllers
of Metrogas, will see their participation decreased.
The incomes of GASA depend mainly on the dividends that it can
distribute to Metrogas. The terms of the new ONs issued by
Metrogas contemplate restructuring for distribution of
dividends. The net gain obtained by Metrogas (US$300.8 million)
in September 2006, comes mainly from restructuring its debt.
This resulted in a net gain for GASA of US$191.2 million for its
participation in Metrogas.
Gas Argentino S.A. was created on Dec. 1992, whose only asset is
its stake in Metrogas, which is in charge of the distribution of
natural gas in the capital city and south of Buenos Aires (for
35 years, with an option of 10 more). GASA is a company
controlled by British Gas (54.7%), technical operator of
Metrofas, and Repsol YPF (45.3%).
INDUSTRIAS METALURGICAS: Fitch Arg Puts BB- Rating on Notes
-----------------------------------------------------------
Fitch Argentina Calificadora de Riesgo assigned a BB- rating on
the Obligaciones Negociables Series 8, 9, 10, 11 and 12 issued
by Industrias Metalurgicas Pescarmona.
Fitch also assigned a D rating on the Series 2 notes for US$150
million.
The rate given to the Series 8, 9, 10, 11 and 12 responds to the
improvement on the paying capacity of its financial commitments.
This was made from new projects, which represent the growth on
the generation of funds estimated for the next 4 years. When
considering the income expected from the projects with the due
of debt, IMPSA has a good repayment capacity.
The D rating has been affirmed for the remaining US$804,000 of
nominal value and US$420,090 of interests of the Series 2 notes,
as being unpaid and already due.
By October 2006, IMPSA showed a high level of capitalization
(75%), with a debt of US$290 million denominated most of it in
dollars. At same date, the position of cash reached US$51.7
million, which allowed a cover of 52% of the short term debt.
Industrias Metalurgicas belongs to the Pescarmona Group of
Companies, which is a multinational group with presence in
different business areas such as hydro-electrical power
generation and equipment, wind power generation and equipment,
port systems, automobile parts, control systems, environmental
services and insurance, among others. PGC employs more than
6,000 people and operates in 27 countries in five
continents.
INSTITUTO RP: Asks for Court Approval to Reorganize Business
------------------------------------------------------------
A court in Buenos Aires is studying the merits of Instituto R.P.
Hansen SRL's petition to reorganize its business after it
stopped paying its obligations.
The petition, once approved by the court, will allow Instituto
R.P. to negotiate a settlement plan with its creditors in order
to avoid a straight liquidation.
The debtor can be reached at:
Instituto R.P. Hansen SRL
Quesada 2138
Buenos Aires, Argentina
WENDY'S INT'L: Issues Financial Forecasts for 2007, 2008 & 2009
---------------------------------------------------------------
Wendy's International, Inc., provided key financial projections
for 2007, 2008 and 2009.
The company reaffirmed its previously issued estimate of US$330
to US$340 million in EBITDA in 2007. The company also said it
expects to generate EBITDA of US$390 to US$410 million in 2008
due to improvements resulting from its initiatives related to
its comprehensive strategic plan, "Quality-Driven: Wendy's
Recipe for Success," which emphasizes the company's outstanding
hamburger brand and quality position in QSR. In 2009, the
company is projecting EBITDA of US$425 to US$460 million. On
Feb. 2, the company disclosed that its 2006 adjusted EBITDA from
continuing operations was US$220.7 million.
"The new strategic plan is already paying dividends, as it has
enabled us to accelerate our timeline for operational
improvements," said Chief Executive Officer and President Kerrii
Anderson. "We have realized eight consecutive months of
positive same-store sales, including January, which is trending
at 4.5% to 5%, due to strong marketing, Wendy's new Deluxe Value
Meals and gift card redemptions," Ms. Anderson said. "We have
also enhanced our new product pipeline and have significantly
reduced costs in 2006 to establish a platform for future
improvement. We intend to build on this momentum and leave no
stone unturned, as we continue to review every element of our
business and drive significant improvement in 2007 and beyond.
"These anticipated improvements in our core business give us the
confidence to commit to returning capital to our shareholders,
including a 47% increase in our annual dividend rate, from
US$0.34 per share to US$0.50 per share, beginning with our May
dividend payment."
The company is seeing measurable results from its strategic
plan, and management is confident about generating improved
results in 2007.
The components of the plan include:
* Revitalize Wendy's brand -- The company has re-established
its brand essence, "Quality Made Fresh," centered on
Wendy's core strength, its hamburger business.
* Streamline and improve operations -- Wendy's believes it
can significantly improve operations attributes such as
Order Accuracy, Friendliness, Cleanliness, and Speed of
Service, clearly positioning the company as the best
operator in QSR and resulting in significantly improved
store-level profits.
* Reclaim innovation leadership -- The company expects to
introduce more than 10 new products during 2007, including
exciting sandwiches and salads, as well as beverages that
are unique to Wendy's.
* Strengthen franchisee commitments -- Management is focused
on driving sales and improving profitability across the
entire system and is providing incentives to franchisees
to re-invest in existing restaurants.
* Capture new opportunities -- Wendy's will seek to drive
growth beyond its existing business, including expanding
its breakfast program to 20% to 30% of its system in 2007
and more than half the system in 2008.
* Embrace a performance-driven culture -- Wendy's has
redesigned its incentive compensation plan by creating
a more direct link between company performance and
individual pay.
"We have aggressive plans in place to revitalize the Wendy's
brand, and we expect our 2007, 2008 and 2009 results to be
significantly improved compared with 2006," Ms. Anderson said.
"Our management team is focused on performance and execution,
and we are excited to usher in this new era at Wendy's."
The company reaffirmed its previously issued estimate of US$330
to US$340 in EBITDA in 2007. The 2007 estimate incorporates:
* Annual revenue growth of approximately 5% to 6%;
* Same-store sales growth in a range of 3% to 4%;
* A 390-to-410 basis-point improvement in store operations
EBITDA margins in a range of 12.8% to 13.0% in 2007 from
a base of 8.9% in 2006 by the end of the year;
* Tight control of G&A and other overhead costs, in the
range of 8.75% to 9.25% of revenue;
* The sale of up to 50 restaurants to franchisees;
* Opportunistic purchase of franchise restaurants;
* North American restaurant development goals as:
2007 Outlook Company Franchise
Openings 15-30 50-60
Closings (15-30) (50-60)
Total Net Stores 0 0
* A steady expansion of a breakfast offering, with a goal of
reaching breakeven in the day-part during the year;
* Slightly lower beef costs relative to 2006, with slightly
higher prices for chicken and higher prices for produce;
* Operating income of US$215 million to US$225 million;
* An effective tax rate of approximately 39.0%;
* Opportunistic share repurchases roughly offsetting
dilution;
* Earnings per share of US$1.17 to US$1.23;
* The investment of up to US$110 million into the
renovation of Wendy's company-owned and franchised
restaurants during the year; and
* No impact from currency.
The company expects to generate significantly improved year-
over-year results in 2008 due to operational improvements
enabled by its strategic plan. The company expects to deliver
EBITDA of US$390 to US$410 million for the year, compared with
its estimate of US$330 to US$340 million in 2007. The company
had previously announced that it expected to achieve EBITDA of
US$400 to US$410 million in 2009.
The 2008 estimate incorporates:
* Operating income of US$275 to US$295 million;
* A full-year benefit from store-level operating margin
improvements implemented during 2007;
* A strategic plan that has been implemented and a strong
core business that is demonstrating continuous improvement;
* A powerful marketing calendar and a full new product
pipeline;
* Tight control of G&A and other overhead costs; and
* Continued expansion of the company's breakfast program,
which is expected to be profitable.
The company expects to deliver operating income of US$310 to
US$345 million and EBITDA of US$425 to US$460 million for the
year, compared with its estimate of US$390 to US$410 million in
2008.
Headquartered in Dublin, Ohio, Wendy's International Inc.
-- http://www.wendysintl.com/-- and its subsidiaries operate,
develop, and franchise a system of quick service and fast casual
restaurants in the United States, Canada, Mexico, Argentina,
among others.
* * *
As reported in the Troubled Company Reporter on Oct. 17, 2006,
Moody's Investors Service held its Ba2 Corporate Family Rating
for Wendy's International Inc.
Additionally, Moody's held its Ba2 ratings on the company's
US$200 million 6.25% Senior Unsecured Notes Due 2011 and US$225
million 6.2% Senior Unsecured Notes Due 2014. Moody's assigned
the debentures an LGD4 rating suggesting noteholders will
experience a 54% loss in the event of default.
===============
B A R B A D O S
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TARGUS GROUP: Names Robert Shortt as Sales & Marketing Sr. VP
-------------------------------------------------------------
Targus Group International, Inc., disclosed that Robert Shortt
has joined the company as Senior Vice President, Sales and
Marketing. Mr. Shortt will oversee all of Targus' sales and
marketing efforts, including product development and industrial
design.
"With the addition of Bob to the Targus team, the company is
increasing its commitment to providing our customers and
consumers with the focused sales and marketing strategies and
innovative products necessary to enhance our market leading
positions around the world," said Michael Hoopis, president and
CEO of Targus. "Bob's ability to deliver consistently strong
results through innovation and teamwork will be extremely
important as we build our business to new levels."
Mr. Shortt brings over 24 years of business, sales and marketing
management experience to the Targus team. He joins the company
from Waterpik Technologies, Inc., where he served as Executive
Vice President and General Manager for the Personal Healthcare
Products Division. Prior to Waterpik, Shortt worked at CSK Auto
Corp., a billion dollar auto parts retailer with 700 stores.
Mr. Shortt was Senior Vice President of Merchandising,
Marketing, and Commercial Sales. He also spent over 13 years at
Black and Decker Corp. where he was Vice President of Marketing
for the Price Pfisterr and Kwikset divisions. He earned a
Bachelor of Arts degree from the University of California,
Berkeley.
Headquartered in Anaheim, California, Targus Group International
Inc. -- http://www.targus.com/-- supplies notebook carrying
cases and accessories. The company has offices on every
continent and distributes in over 145 countries including
Argentina, Barbados, Costa Rica and El Salvador.
* * *
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. consumer product sector last week, the
rating agency affirmed its B2 Corporate Family Rating for Targus
Group International Inc., and raised its rating on the company's
US$40 million Guaranteed First Lien Senior Secured Revolver Due
2011 to Ba3 from B2. Moody's assigned an LGD2 rating to those
bonds suggesting lenders will experience a 27% loss in the event
of a default.
===========
B E L I Z E
===========
* BELIZE: Government Taking Over Universal Health's Assets
----------------------------------------------------------
The government of Belize may confiscate a number of prime
properties plus all assets used by the Universal Health Services
to secure loans that it failed to pay, The Reporter states.
According to The Reporter, Universal Health had secured a US$17-
million loan from the Belize Bank through a government
guarantee. An investigation conducted in 2004 on the
transactions of Universal Health revealed that the firm used
that same collateral to secure another US$12.3 million from the
Development Finance Corp.
The Reporter underscores that the signatures of Development
Finance manager of the credit and administration department
Roberto Bautista, Dr. Victor Lizarraga and Dr. Atanascio Cob
were in the collateral charge accord, as part of the Universal
Health's US$12,380,000 loan with the corporation. Businessman
Luke Espat was involved the deal.
Mr. Bautista told The Reporter that the Development Finance Act
prohibits him from discussing any matter regarding the
corporation and Universal Health.
The Reporter relates that the Universal Health defaulted
extensively on both loans. As the Belize government agreed to
take over the bank loan, it now has authority to take over the
assets the Universal Health used to get the loans.
The government told The Reporter that it is negotiating with
Belize Bank to make a land swap to offset the bank loan. The
interest has increased to over US$32 million. The government
will take 100% interest in the medical facilities the Universal
Health operated. The facilities were also put up as collateral.
The report says that the government will take over the Universal
Health's facilities including:
-- Universal Health Medical Arts Complex on Blue
Marlin Drive in Belize City, and
-- Integral Health Services at the corner of Curassow
and Gibnut Streets on the Southside.
The Reporter emphasizes that the government did not say whether
it will confiscate at least 13 other prime real estate
properties used as collateral. These properties are:
-- a two-storey concrete building used by Universal
Health on Goldson Avenue, and
-- two acres of land situated on Faber's Road in
Belize City. The Universal Health acquired Faber's
Road parcel from Arnaldo Pena, who also defaulted
on a multi-million dollar loan from the Development
Finance.
The Reporter notes that other properties used as collateral
include:
-- three in Orange Walk,
-- four in Corozal,
-- one in San Pedro, and
-- one in Vista Del Mar Ladyville.
The report states that Universal Health's Board of Directors
passed in October 2002 a resolution that allowed Belize Bank to
execute in its favor all fixed and floating assets of the firm.
This will give the bank access to all assets acquired between
the time the loan was signed and the time its collateral was
seized, if the bank chooses to do so.
The government is in the process of closing the land deal with
Belize Bank, and is hoping to put together a Board of Directors
and a management team after the amalgamation to determine future
of Universal Health. The Ministry of Finance is handling the
financial aspects of Belize Bank and Development Finance, Belize
Health Minister Jose Coye told The Reporter.
About Universal Health
Universal Health Services, Inc., is engaged in owning and
operating, through its subsidiaries, acute care hospitals,
behavioral health centers, surgical hospitals, ambulatory
surgery centers and radiation oncology centers. As part of its
ambulatory treatment centers division, the company manages
and/or owns outright or in partnerships with physicians, 13
surgical hospitals and surgery and radiation oncology centers
located in six states and Puerto Rico. Services provided by its
hospitals include general surgery, internal medicine,
obstetrics, emergency room care, radiology, oncology, diagnostic
care, coronary care, pediatric services and behavioral health
services. The company provides capital resources, as well as a
variety of management services to its facilities, including
central purchasing, information services, finance and control
systems, facilities planning, physician recruitment services,
administrative personnel management, marketing and public
relations. The company also has operations in Belize.
* * *
As reported in the Troubled Company Reporter on Dec. 11, 2006,
Standard & Poor's Ratings Services revised its long-term foreign
currency sovereign credit rating on Belize to 'SD' from 'CC/C'.
Standard & Poor's also said that it revised to 'D' its long-term
foreign currency ratings on the rated bonds that are included in
a proposed exchange.
In addition, Standard & Poor's affirmed its 'CCC+/C' local
currency sovereign credit rating on Belize.
* BELIZE: 9.75% Noteholders Approve Amendments to Debt Agreement
----------------------------------------------------------------
The Government of Belize disclosed that holders of the 9.75%
Notes due 2015 have, by the requisite supermajority consent
provided for in the Note documentation, approved modifications
of the terms of the Notes to conform the maturity date and
coupon structure of the Notes with the financial terms of
Belize's new bonds maturing in 2029 (to be issued later this
month in connection with the closing of an exchange offer
launched by Belize on Dec. 18, 2006). The modifications of the
Notes will take effect at the closing of the exchange offer,
scheduled to occur on Feb. 20, 2007.
This is the first time that a so-called collective action clause
has been used to amend the payment terms of a sovereign bond
governed by the law of a US jurisdiction in more than 70 years.
Collective action clauses were introduced into sovereign bonds
governed by the law of US jurisdictions starting in 2003,
following a strong recommendation by the G-10 countries for this
change to standard documentation practices for sovereign debt
instruments.
Belize will accept late tenders of the 2015 Notes into the
exchange offer up to Feb. 14, 2007.
* * *
As reported in the Troubled Company Reporter on Dec. 11, 2006,
Standard & Poor's Ratings Services revised its long-term foreign
currency sovereign credit rating on Belize to 'SD' from 'CC/C'.
Standard & Poor's also said that it revised to 'D' its long-term
foreign currency ratings on the rated bonds that are included in
a proposed exchange.
In addition, Standard & Poor's affirmed its 'CCC+/C' local
currency sovereign credit rating on Belize.
=============
B E R M U D A
=============
LORAL LICENSING: Shareholders First Meeting Is Set for Feb. 12
--------------------------------------------------------------
Loral Licensing Ltd.'s shareholders will gather for a first
meeting at 10:30 a.m. on Feb. 12, 2007, at:
KPMG Financial Advisory Services Limited
Crown House, 4 Par-la-Ville Road
Hamilton, Bermuda
Proxy forms to be used at the meeting have been mailed to all
known shareholders and creditors and must be lodged with the
provisional liquidator by 5:00 p.m. on Feb. 9, 2007.
The provisional liquidators can be reached at:
Mike Morrison
Charles Thresh
Attn: Chris Giddens
KPMG
P.O. Box HM 906
Hamilton, Bermuda HM DX
Tel: 441 294-2653
Fax: 441 295-8280
LORAL SPACE: Shareholders First Meeting Is on Feb. 12
-----------------------------------------------------
Loral Space & Communications Ltd.'s shareholders will gather for
a first meeting at 10:00 a.m. on Feb. 12, 2007, at:
KPMG Financial Advisory Services Limited
Crown House, 4 Par-la-Ville Road
Hamilton, Bermuda
Proxy forms to be used at the meeting have been mailed to all
known shareholders and creditors and must be lodged with the
provisional liquidator by 5:00 p.m. on Feb. 9, 2007.
The provisional liquidators can be reached at:
Mike Morrison
Charles Thresh
Attn: Chris Giddens
KPMG
P.O. Box HM 906
Hamilton, Bermuda HM DX
Tel: 441 294-2653
Fax: 441 295-8280
Loral Space & Communications -- http://www.loral.com/-- is a
satellite communications company. It owns and operates a fleet
of telecommunications satellites used to broadcast video
entertainment programming, distribute broadband data, and
provide access to Internet services and other value-added
communications services. Loral also is a world-class leader in
the design and manufacture of satellites and satellite systems
for commercial and government applications including direct-to-
home television, broadband communications, wireless telephony,
weather monitoring and air traffic management.
The Company and various affiliates filed for chapter 11
protection (Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003.
Stephen Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal
& Manges LLP, represented the Debtors in their successful
restructuring and prosecution of their Fourth Amended Joint Plan
of Reorganization to confirmation on Aug. 1, 2005.
SEA CONTAINERS: GNER Hints Probable Bid for East Coast Main Line
----------------------------------------------------------------
Great North Eastern Railways hinted it would raise a new bid for
the East Coast Main Line, the franchise it agreed to let go on
Dec. 11, 2006, The Scotsman reports.
According to the report, GNER emphasized it has "no intention of
simply standing on the sidelines," while Virgin/Stagecoach and
FirstGroup lodged interest on the franchise by the
Jan. 15, 2007, deadline.
"We are not confirming at this stage whether we have submitted a
bid for pre-qualification, either with or without another
party," a spokesman for GNER told Scotsman.
GNER declined to clarify its purpose, but raised an option that
it would join a consortium.
According to the report, the United Kingdom's Department for
Transport would announce on Feb. 9, 2007, a shortlist of
three to five bidders, with an invitation to tender being issued
in March and bids being returned by June. The successful bidder
will be disclosed in July or August, and would run the franchise
from "late autumn" of 2007 until 2015.
About Sea Containers
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. (NYSE:
SCRA, SCRB) -- http://www.seacontainers.com/-- provides
passenger and freight transport and marine container leasing.
Registered in Bermuda, the company has regional operating
offices in London, Genoa, New York, Rio de Janeiro, Sydney, and
Singapore. The company is owned almost entirely by United
States shareholders and its primary listing is on the New York
Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, 2006, the
company's common shares and senior notes were suspended from
trading on the NYSE and NYSE Arca after the company's failure to
file its 2005 annual report on Form 10-K and its quarterly
reports on Form 10-Q during 2006 with the U.S. Securities and
Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they reported
US$1.7 billion in total assets and US$1.6 billion in total
debts.
The Debtors' exclusive period to file a chapter 11 plan will
expire on June 12, 2007.
SEA CONTAINERS: U.S. Trustee Appoints SeaCon Services' Committee
----------------------------------------------------------------
Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Kelly
Beaudin Stapleton, United States Trustee for Region 3, appointed
three creditors willing to serve on the Official Committee of
Unsecured Creditors in Sea Containers Services, Ltd.'s Chapter
11 case:
1. Sea Containers 1983 Pension Scheme Aspen Trustees, Ltd.
Northumberland House, 303-306 High Holbern
London WCIV 7J2, United Kingdom
Attn: Jane Kathryn Fryer
Phone: (44) 207-430-0734
Fax: (44) 207-430-0525
2. Sea Containers 1990 Pension Scheme
c/o Farrington Yates, Esq.
Sonnenschein Nath & Rosenthal LLP
1221 Avenue of the Americas,
New York, NY 10020
Phone: (212) 768-6878
Fax: (212) 768-6800
3. Robert George Finch
c/o Katherine Ashton, Esq.
Debevoise & Plimpton LLP
Old Broad Street,
London, UK EC2N 1HQ
Attn: Robert George Finch,
Phone: (44) 207-786-9040
Fax: (44) 207-588-4180
The trial attorney assigned to Sea Containers Services' case is
David L. Buchbinder, Esq.
About Sea Containers
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. (NYSE:
SCRA, SCRB) -- http://www.seacontainers.com/-- provides
passenger and freight transport and marine container leasing.
Registered in Bermuda, the company has regional operating
offices in London, Genoa, New York, Rio de Janeiro, Sydney, and
Singapore. The company is owned almost entirely by United
States shareholders and its primary listing is on the New York
Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, 2006, the
company's common shares and senior notes were suspended from
trading on the NYSE and NYSE Arca after the company's failure to
file its 2005 annual report on Form 10-K and its quarterly
reports on Form 10-Q during 2006 with the U.S. Securities and
Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they reported
US$1.7 billion in total assets and US$1.6 billion in total
debts. (Sea Containers Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan will
expire on June 12, 2007.
=============
B O L I V I A
=============
UNIVERSAL COMPRESSION: Board OKs Merger of Equals with Hanover
--------------------------------------------------------------
Hanover Compressor Co. and Universal Compression Holdings, Inc.,
disclosed that their boards of directors have approved a stock-
for-stock merger of equals and that the companies have signed a
definitive merger agreement.
Under the terms of the merger agreement, Hanover stockholders
will receive 0.325 shares of the new company for each share of
Hanover they own, and Universal stockholders will receive 1.0
share of the new company for each share of Universal they own.
Based on the closing market prices for the shares of both
companies on Feb. 2, 2007, the combined company would have an
equity market capitalization of approximately US$3.8 billion.
It is anticipated that Hanover stockholders initially will own
about 53% and Universal stockholders about 47% of the new
company. The merger is expected to be tax free to stockholders
of both companies.
"The combination of Hanover and Universal brings together two
highly respected companies in the natural gas compression and
production and processing equipment fabrication industry. Both
companies have an excellent team of employees known for their
dedication to customer service," said Stephen A. Snider,
Universal's Chairman, President and Chief Executive Officer.
"Operating under a new corporate name, we will be able to fully
leverage our combined capabilities to provide an enhanced level
of customer support and a wider product and service offering to
meet the full compression services and production and processing
equipment needs of our customers worldwide."
John E. Jackson, Hanover's President and Chief Executive
Officer, said, "This merger will create a new company with a
portfolio of high quality assets, products, services and
financial capabilities to generate enhanced value for
stockholders of both companies. It also affords excellent
opportunities for the employees and customers of both companies
to benefit from our combined global expertise in an increasingly
competitive market place."
Stephen Snider added, "The combination also provides a larger
pool of domestic contract compression customers and equipment
that can be offered for sale to Universal Compression Partners,
L.P., over time. The transfer of these domestic contract
compression assets to Universal Compression Partners should
further improve our cost of capital, and enable us to provide
our services on a more efficient basis to our customers over the
long term."
Following the merger, Stephen Snider will serve as President and
Chief Executive Officer and as a director of the new company.
Gordon T. Hall, Hanover's Chairman, will serve as Chairman of
the Board of the combined company, which will consist of ten
directors, five designated by each company. John Jackson will
serve as a director of the new company.
The merger is expected to be accretive to earnings per share for
stockholders of both companies in 2008 after achieving expected
annualized pre-tax cost savings of approximately US$50 million.
These synergies are expected to arise from the closure of
overlapping facilities, increased operational efficiencies and
reduction of corporate overhead.
Additional Information About the Merger
The merger agreement provides for the formation of a new holding
company that will own all the stock of both Hanover and
Universal. The new company will be headquartered in Houston,
and its common stock is expected to be listed on the New York
Stock Exchange.
The merger is subject to various conditions including approval
of the stockholders of both Hanover and Universal and customary
regulatory approvals, including the expiration or termination of
the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. It is anticipated that the
closing of the merger will occur in the third quarter of this
year. Hanover and Universal intend to file a proxy
statement/prospectus with the Securities and Exchange Commission
as promptly as practicable after each company files its 2006
Annual Report on Form 10-K.
Hanover Fourth Quarter Financial Results Update
Hanover also announced that, for the three months ended
Dec. 31, 2006, it expects to report:
-- revenue of US$465 million to US$470 million, up from
US$424 million in the third quarter;
-- income from continuing operations before income taxes
and minority interest in the range of US$27 million to
US$31 million, compared with US$23 million in the third
quarter; and
-- backlog of US$808 million, including SU$325 million for
compression at Dec. 31, 2006, compared with US$689
million, including US$192 million for compression at
Sept. 30, 2006.
With respect to fourth quarter income taxes, Hanover has not yet
finalized its tax analysis, but it currently expects the
effective tax rate in the fourth quarter to be less than the
mid-40% range, which
Universal Fourth Quarter and Full Year Earnings Updates
Universal also announced updated revenue and earnings guidance
for the fourth quarter and full year 2006. For the three months
ending Dec. 31, 2006, Universal expects revenue of US$250
million to US$255 million and earnings per diluted share of
US$0.66 to US$0.70; this compares with previously reported
guidance of revenue of US$240 million to US$250 million and
earnings per diluted share of US$0.70 to US$0.74.
The reduced earnings guidance is primarily the result of higher
labor costs in the domestic contract compression segment. For
the twelve months ended Dec. 31, 2006, Universal expects revenue
of US$945 million to US$950 million and earnings per diluted
share of US$2.84 to US$2.88; this compares with previously
reported guidance of revenue of US$935 million to US$945 million
and earnings per diluted share of US$2.88 to US$2.92.
Universal's fabrication backlog was approximately $289 million
at Dec. 31, 2006. Universal plans to conduct its fourth quarter
earnings joint conference call for both Universal Compression
Holdings and Universal Compression Partners during the week of
Feb. 26, 2007.
The parties expect:
* Merger will create a global leader in the natural gas
compression services and production and processing
equipment fabrication industry;
* Anticipated annual pre-tax cost savings of approximately
US$50 million;
* Combined company, which will have a new name, will be
better positioned to compete in the global market place;
* Combination provides a larger pool of domestic contract
compression contracts and assets that can be offered for
sale to Universal Compression Partners, L.P.;
* Gordon T. Hall to be Chairman; and
* Stephen A. Snider to be President and Chief Executive
Officer.
Headquartered in Houston, Texas, Universal Compression Holdings,
Inc. -- http://www.universalcompression.com/-- provides natural
gas compression equipment and services, primarily to the energy
industry in the United States, Argentina, Australia, Bolivia,
Brazil, Canada, China, Colombia, Ecuador, Indonesia, Mexico,
Nigeria, Peru, Russia, Switzerland, Thailand, Tunisia and
Venezuela. Its primary fabrication facilities are located in
Houston, Texas, and Calgary, Alberta.
* * *
As reported in the Troubled Company Reporter on Nov. 23, 2006,
Standard & Poor's Ratings Services raises its corporate credit
rating on Universal Compression Holdings Inc. to 'BB' from
'BB-'. At the same time, assigns its 'BB' rating and '3'
recovery rating to Universal Compression's US$500 million
revolving credit facility. The Houston, Texas-based oilfield
services company had approximately US$807 million in debt
outstanding following the IPO of its subsidiary Universal
Compression Partners L.P.
UNIVERSAL COMPRESSION: Merger Cues Moody's to Review Ratings
------------------------------------------------------------
Moody's Investors Service placed the ratings for Hanover
Compressor Company under review for possible upgrade.
Simultaneously, Moody's placed the ratings for Universal
Compression Inc. on review for possible downgrade. Moody's
anticipates this review will be completed on or about the close
of the merger, which is expected in the third quarter of 2007.
The ratings review is prompted by the all-stock merger
announcement between Hanover and Universal. The merger will be
conducted through a new holding company -- Newco -- that will
exchange Newco shares for Hanover and Universal shares.
Following the merger, Hanover shareholders are expected to own
approximately 53% of Newco, with Universal shareholders owning
the remainder. Universal's Chairman, President and CEO, Stephen
Snider, will serve as President and CEO for Newco and Hanover's
Chairman, Gordon T. Hall, will serve as Newco's Chairman.
Newco's board will be evenly split between representatives from
both companies.
The merger combines two companies with comparable size, market
positions and diversity of product lines and geographic reach.
However, both companies have materially different leverage
profiles, with Hanover carrying much more debt than Universal
relative to EBITDA and capitalization. Therefore, Moody's
believes the transaction is likely a credit positive for Hanover
and have placed its ratings under review for possible upgrade.
Conversely, Newco's combined leverage profile is higher than
Universal's which has raised concerns that led to the review for
possible downgrade of Universal's ratings.
Moody's estimates that the combined company will have pro forma
assets of US$6.3 billion at Sept. 30, 2006, making the new
company the largest natural gas compression services company in
the world with approximately 4.4 million of domestic horsepower
and 1.5 million internationally. The combination effectively
doubles the size of the asset base and further enhances the
business profile of the combined entity.
These potential benefits of the merger are tempered by the
capital intensity of the compression business and the
significant inherent challenges for domestic growth, requiring
the pursuit of growth in international markets that bring both
opportunities and increased political risks. Moody's views this
merger to be a favorable resolution for Hanover of its difficult
strategic choice between growth expenditures (primarily
international) and needed debt reduction. Moody's also notes
that both Hanover's and Universal's capital structures have a
high level of complexity with their Equipment Trusts and ABS
facility, respectively. Furthermore, the creation of Universal
Compression Partners, LP created uncertainties regarding the
future capital structure and leverage profile of Universal,
which also will apply to the combined entity.
The ratings review will focus on the market position and
financial profile of the combined group, the strategic direction
chosen by management with respect to the pace and scale of
international growth, the plans for further drop downs of
compression assets into Universal Compression Partners, LP, and
management's targets for leverage and potential share buybacks
post combination. In Moody's view, any downgrade of Universal's
corporate family rating would likely be limited to one notch and
it is possible that the enhanced size and other benefits of the
merger will enable Moody's to confirm the ratings.
The Hanover ratings affected by the review for upgrade:
* Hanover's B1 corporate family rating and probability of
default rating.
* The Ba3 rating on Hanover Equipment Trust 2001A 8.50%
partly secured notes due 2008.
* The Ba3 rating on Hanover Equipment Trust 2001B 8.75%
partly secured notes due 2011.
* The B3 rating on Hanover's two 4.75% non-guaranteed senior
convertible note issues due 2008 and 2014, respectively.
* The B2 rating on Hanover's 7.5% senior unsecured notes due
2013, 8.625% senior unsecured notes due 2010 and 9% senior
unsecured notes due 2014, each with senior subordinated
guarantees from core operating subsidiary Hanover
Compression, L.P.
* The B3 rating on Hanover's 7.25% non-guaranteed convertible
trust preferred stock.
The Universal ratings affected by the review for downgrade:
* Universal's Ba2 corporate family rating and probability of
default rating.
* The Ba1 rating on Universal's senior secured bank
facilities due 2010.
* The B1 rating on Universal's 7.25% senior unsecured notes
due 2010.
Headquartered in Houston, Texas, Universal Compression Holdings,
Inc. -- http://www.universalcompression.com/-- provides natural
gas compression equipment and services, primarily to the energy
industry in the United States, Argentina, Australia, Bolivia,
Brazil, Canada, China, Colombia, Ecuador, Indonesia, Mexico,
Nigeria, Peru, Russia, Switzerland, Thailand, Tunisia and
Venezuela. Its primary fabrication facilities are located in
Houston, Texas, and Calgary, Alberta.
* Bolivia: Gets Back Natural Gas Installation from Protesters
-------------------------------------------------------------
The Bolivian soldiers and police have driven away protesters
from a natural gas installation using tear gas and rubber
bullets, the Associated Press reports.
According to AP, strikers had forced the closing of a key
pipeline serving several cities. They took over the Transredes
pumping station near Camiri.
As reported in the Troubled Company Reporter-Latin America on
Feb. 1, 2007, protesters demanded for more state control over
oil and gas firms, saying that nationalization has not gone far
enough. The strikers blocked the only road that connects
Bolivia with Argentina and Paraguay, which could disrupt fuel
deliveries to Santa Cruz. They were against President Evo
Morales' decision to renegotiate deals with foreign oil
companies, instead of taking back control of the operations.
AP relates that the pipelines carrying Bolivian natural gas to
Brazil and Argentina were not affected.
Interior Government Minister Alfredo Rada told AP that
protesters later tried to retake the plant by blasting through
outer wall with dynamite. He said, "Using explosives so close
to a hydrocarbons installation is highly dangerous. We ask the
leaders of Camiri to act with rationality, responsibility, and
patriotism."
Minister Rada denied to AP that government forces were using
real bullets against the protesters.
"Mr. Morales, we will blockade as long as necessary. We are not
afraid of your bullets," AP says, citing protest leader Mirko
Orgaz.
Transredes officials told AP that they were still waiting for
instructions from the Bolivian government before restoring
pipeline flow.
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
------ -----------
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating B- Dec. 14, 2005
* BOLIVIA: Gov't Suspends 14 Oil Contracts with Foreign Firms
-------------------------------------------------------------
Reports say that the Bolivian government has suspended 14 oil
contracts that state oil firm Yacimientos Petroliferos Fiscales
Bolivianos signed with foreign oil companies.
According to the reports, the government claimed that the
foreign firms violated state rules of presentation and
legalization for their businesses.
Xinhua News underscores that the Bolivian government had ordered
foreign oil and gas firms Bolivia to renew their contracts by
October 2006 in a bid to secure the state's absolute ownership
of all oil and gas assets in the nation. About 44 contracts
were renewed before the deadline and were submitted to
corresponding governmental administration departments for
approval in January 2007.
Ruth Villarroel, a government legal representative in the La Paz
region told Xinhua News that 30 out of the 44 contracts
registered in October 2006 have been processed compliant with
agreed protocols and have met all the formal requirements. The
remaining 14 have failed and would be suspended.
Yacimientos Petroliferos has already coordinated with the
government to clear up the errors, local press says, citing Ms.
Villaroel.
No contracted oil projects could launch operations before being
finalized by Yacimientos Petroliferos head Manuel Morales,
Xinhua News states.
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
------ -----------
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating B- Dec. 14, 2005
* BOLIVIA: Presenting Hydrocarbons Sector Restructuring Proposal
----------------------------------------------------------------
A Bolivian hydrocarbons ministry spokesperson told Business News
Americas that the ministry will present from Feb. 5 to Feb. 7
its proposal to restructure the hydrocarbons sector in La Paz.
According to BNamericas, experts from Norway, Canada and Holland
will join the presentation.
BNamericas relates that under the restructuring plan, the
government will form Agencia Nacional de Hidrocarburos, a
national hydrocarbons agency, to regulate operations at state
oil firm Yacimientos Petroliferos Fiscales Bolivianos.
The spokesperson explained to BNamericas that the Agencia
Nacional de Hidrocarburos will be independent of Yacimientos
Petroliferos. It will replace regulator Superintendencia de
Hidrocarburos.
Hydrocarbons minister Carlos Villegas told Agencia Boliviana de
Informacion that under the government's restructuring plan for
Yacimientos Petroliferos, the firm would have a strategic first
level composed of six ministers and the nation's president.
BNamericas underscores that a second level would be made up of:
-- four managerial departments working with the
hydrocarbons chain, and
-- legal and financial departments.
Meanwhile, 15 sub-managerial departments in hydrocarbons-
producing regions will comprise the "operational third level",
BNamericas states.
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
------ -----------
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating B- Dec. 14, 2005
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B R A Z I L
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EMI GROUP: Rising Debt Cues S&P to Cut Rating to BB- from BB
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit and senior unsecured debt ratings on U.K.-based
music group EMI Group PLC to 'BB-' from 'BB'. The 'B' short-
term rating was affirmed.
At the same time, the long-term corporate credit rating and debt
ratings were put on CreditWatch with negative implications.
The downgrade follows EMI's announcement that revenues in its
recorded music division, which accounted for 80% of revenues and
61% of EBITDA for the fiscal year ended March 2006, would
decline by 6%-10% in the fiscal year ended March 31, 2007, at
constant currencies.
"The downgrade and CreditWatch placement also reflect our
concerns about EMI's debt burden, which is likely to increase in
the coming months as a result of a new o150 million
restructuring program and the buyout of minority interests in
Japan for o93 million," said Standard & Poor's credit analyst
Patrice Cochelin.
S&P expects to resolve the CreditWatch after the company
announces it fiscal-year results, expected at the end of May
2007.
"To resolve the CreditWatch, we will particularly focus on
better understanding the reasons for and extent of the company's
negative revenue trend, the potential disruption caused by the
announced restructure, and EMI's future cash generation
potential, financial structure, and liquidity," said Mr.
Cochelin.
Headquartered in London, United Kingdom, EMI Group PLC --
http://www.emigroup.com/-- is the world's largest independent
music company, operating directly in 50 countries and with
licensees in a further 20. The group has operations in Brazil,
China, and Hungary. The group employs over 6,600 people.
Revenues in 2005 were near EUR2 billion and operating profit
generated was over EUR225 million.
At March 31, 2006, EMI Group's consolidated balance sheet
revealed GBP1.817 billion in total assets, GBP2.544 billion in
total liabilities and GBP726.6 million in shareholders' deficit.
FLEXTRONICS: Revenue Growth Cues Moody's to Affirm Ba1 Rating
-------------------------------------------------------------
Moody's Investors Service revised the outlook of Flextronics
International Ltd. to stable from negative, while affirming its
corporate family rating at Ba1. The outlook revision reflects
Flextronics' solid revenue growth over the past twelve months,
with fiscal 2007 revenue expected to rise 24% over 2006.
Although revenue from acquisitions including its recently
acquired Nortel assets contributed to the growth, organic growth
in areas such as handsets was strong. The company's industry-
leading growth rate reflects the nature of Flextronics'
portfolio -- one of the most diversified in the EMS industry.
The outlook revision also reflects Moody's expectation that
Flextronics' profitability measures (including ROIC) and free
cash flow generation (net of acquisitions and divestitures) will
improve in the near term.
Other factors considered in the current rating action include
Flextronics' size and scale with revenue nearly twice as large
as the average of its North American peers, its aforementioned
product diversity, solid credit metrics, and Moody's expectation
that improving working capital (partly as a result of working
down inventory from its Nortel acquisition) will help generate
free cash flow in fiscal 2008. The rating also continues to
reflect risks associated with the volatility of the EMS
industry, exacerbated by high client concentration (top ten
customers represented 65% of Flextronics' LTM revenue), and the
challenges Flextronics will face in managing a business with
revenue exceeding US$19 billion, or 35% larger than three years
ago, and management's strategy to maintain high growth rates,
which implies periodic high capital investments (the company's
2007 Fiscal Year capex is twice the size of 2006 Fiscal Year)
and negative cash flow.
Flextronics' rapid growth strategy, in Moody's view, presents
both opportunities and potential risks. On the one hand,
significant growth will further enhance Flextronics' scale and
business diversity. On the other hand, it would also present
further challenges in terms of business complexity, importance
of quality execution and management bandwidth. Moody's notes
that Flextronics has been adding key management personnel
recently, possibly mitigating concerns over the pace of the
growth. The expectation that Flextronics will generate free
cash flow (net of acquisitions and divestitures) over the next
12 to 18 months is an important consideration in stabilizing its
outlook.
The ratings affirmed:
* Corporate family rating at Ba1;
* Probability of default rating at Ba1 ;
* US$400 million 6.25% Senior Subordinated Notes due 2014,
Ba2, LGD5, 85%;
* US$400 million 6.5% Senior Subordinated Notes due 2013,
Ba2, LGD5, 85%;
* US$7.7 million 9.875% senior subordinated notes, due 2010,
Ba2, LGD5, 85%; and
* Speculative grade liquidity rating, SGL-1.
Outlook revised from negative to stable.
Flextronics International Ltd., headquartered in Singapore, has
its main U.S. offices in San Jose, California. The company is
one of the largest providers of electronics manufacturing
services to OEMs primarily in the handheld electronics devices,
information technologies infrastructure, communications
infrastructure, computer and office automation, and consumer
devices industries. Its global locations include operations in
Brazil and Mexico. For the latest twelve months ending December
2006, the company generated approximately US$17.5 billion in
revenues.
HAYES LEMMERZ: Moody's Cuts Corp. Family Rating to Caa1 from B3
---------------------------------------------------------------
Moody's Investors Service lowered HLI Operating company, Inc.'s
ratings:
* Corporate Family to Caa1 from B3;
* first lien senior secured to B1 from Ba3;
* second lien term loan to Caa1 from B3.
The downgrade reflects the company's continuing weak credit
metrics and the potential that these measures could erode
further due to lower OEM production levels. Moody's notes that
Hayes Lemmerz has announced that it is seeking an amendment to
its senior secured credit facilities to permit the ability to
exchange its senior unsecured notes for common stock of the
parent holding company. The completion of such an exchange,
depending on the ultimate terms and conditions, could moderate
the degree of potential erosion in the company's metrics. The
outlook remains negative.
The negative outlook continues to embody the operating pressures
from lower production volumes in North America, ongoing pricing
pressures form OEMs, and high raw material and energy costs.
Hayes Lemmerz is expected to have slightly positive free cash
flow for fiscal 2007 resulting from restructuring efforts
initiated during fiscal 2007. Liquidity is expected to remain
adequate with approximately US$60 million of cash on-hand and
US$80 of availability under the revolving credit facility as of
Oct. 31, 2006. However, Hayes Lemmerz's credit metrics are
expected to continue to perform consistent with the current Caa1
Corporate Family rating. For the LTM period ending, Oct. 31,
2006, EBIT/interest coverage approximated 0.3x (using Moody's
standard adjustments), and Debt/EBITDA approximated 6.0x.
Consideration for a lower rating could arise if either leverage
deteriorates to 7.0x, EBIT/interest coverage does not improve in
the near term, the company pursues the exchange of its senior
unsecured notes for common stock, or if free cash flow or
liquidity deteriorates.
Ratings lowered:
-- Corporate Family Rating, to Caa1 from B3;
-- Probability of Default Rating, to Caa1 from B3;
-- 1st lien senior secured revolving credit, to B1 (LDG2,
20%) from Ba3 (LGD2, 23%);
-- 1st lien senior secured term loan B, to B1 (LDG2, 20%)
from Ba3 (LGD2, 23%); and
-- 2nd lien term loan C, to Caa1 (LGD3, 47%) from B3 (LGD4,
53%).
Ratings affirmed:
-- Caa2, senior unsecured notes with the LGD Assessment
changed to (LGD5, 72%) from (LGD 5, 82%).
Hayes also announced the sale of its aluminum suspension
components business in North America (revenues of about US$160
million in 2006) through facilities located in Bristol, Indiana
and Montague, Michigan for approximately US$32 million. Amounts
available to reduce funded debt are expected to be nominal as a
significant portion of the proceeds will be used to reduce
outstandings under the company's accounts receivable
securitization facility. The sale of the aluminum suspension
components business will further reduce Hayes Lemmerz North
American OEM exposure.
Hayes Lemmerz is the holding company for operating entities in
the US and internationally and is the issuer of all rated
obligations. It is indirectly, wholly-owned by Hayes Lemmerz
International Inc.
Hayes Lemmerz International, headquartered in Northville,
Michigan, is a global supplier of steel and aluminum automotive
and commercial vehicle highway wheels, as well as aluminum
components for brakes, powertrain, suspension, and other
lightweight structural products. Worldwide revenues approximate
US$2.2 billion. The company has 33 facilities worldwide
including India, Brazil and Germany, among others.
FURNAS CENTRAIS: Investing BRL450 Million for Luiz Carlos Plant
---------------------------------------------------------------
Furnas Centrais Eletricas SA will invest BRL450 million for the
upgrade of its 1,050-gigawatt Luiz Carlos Barreto de Carvalho
hydro plant, Business News Americas reports.
Luiz Carlos started commercial operations in 1969. It is one of
Furnas Centrais' 13 power generation plants that have combined
capacity of 9,919 megawatts.
Furnas Centrais said in a statement that it wants to revamp the
six 175-megawatt turbines, which will take four years.
Headquartered in Rio de Janeiro, Brazil, Furnas Centrais
Eletricas S.A. is one of Brazil's largest electricity generation
and transmission utilities, 99.5% owned by Centrais Eletricas
Brasileiras S.A. -- Eletrobras, in turn controlled by Brazil's
Federal Government. In the last twelve months through
Sept. 30, 2006, Furnas reported net earnings of BRL 605 million
(about USD 275 million) on BRL5,225 million (US$2,371 million)
revenues.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2006, Moody's America Latina Ltda. assigned a BR-1
national scale rating to Furnas Centrais Eletricas SA's proposed
BRL130 million of 6-month commercial paper notes issuance. The
net proceeds of the proposed commercial paper notes will be used
for short-term liquidity purposes. Simultaneously, Moody's
affirmed the Ba1 global local currency and Aa1.br national scale
senior unsecured issuer ratings of Furnas Centrais. Moody's has
reviewed preliminary draft legal documentation for the proposed
commercial papers. The assigned rating assumes that there will
be no material variation from the drafts reviewed and that all
agreements are legally valid, binding and enforceable. The
ratings outlook is stable.
NATIONAL STEEL: Fitch Rates US$450M 9.875% Perpetual Notes at BB
----------------------------------------------------------------
Fitch Ratings has assigned a BB debt rating to National Steel
S.A.'s US$450 Mil. 9.875% Perpetual Notes.
National Steel is a holding company that is 100% indirectly
controlled by Brazil's Steinbruch family. National Steel's sole
asset consists of 100% of the redeemable preferred shares of
Acos. Acos, in turn, is a holding company that owns 100% of
Vicunha. Vicunha is also a holding company that owns 42.74% of
the common shares and controlling interest in Brazilian steel
producer Companhia Siderurgica Nacional.
Fitch Ratings has removed ratings for CSN and related issuances
from Rating Watch Negative.
Companhia Siderurgica Nacional
-- CSN foreign currency and local currency Issuer Default
Ratings'BBB-';
-- Unsecured debt obligations issued by CSN Islands entities
'BBB-'; and,
-- National scale rating and local debenture issuances
'AA(bra)'.
The above ratings have a Stable Rating Outlook.
CSN Export Trust
-- Series 2003-1 'BBB';
-- Series 2004-1 'BBB'; and,
-- Series 2005-1 'BBB'.
National Steel S.A.
-- US$450 million 9.875% perpetual notes: 'BB'
These rating actions reflect the fact that CSN was not
successful with its proposed plan to acquire the Corus Group
Plc. The Negative Rating Watch reflected the concern that if
CSN had been successful in its attempt to buy Corus, a material
portion of the transaction could have been funded with CSN's
cash and proceeds from debt issuances.
Fitch's 'BB-' rating on Corus, which was placed on Rating Watch
Negative on Oct. 26, 2006, due to a financing structure proposed
by the successful bidder, India-based Tata Steel Limited, that
would burden Corus with much of the acquisition debt. Tata's
final bid for Corus reached $12 billion.
With annual production capacity of 5.6 million tons of crude
steel and 5.1 million tons of rolled products, CSN ranks as one
of the largest steel producers in Latin America. The company's
fully integrated steel operations, located in the state of Rio
de Janeiro in Brazil, produce steel slabs and hot- and cold-
rolled coils and sheets for the automobile, construction and
appliance industries, among others.
PETROLEO BRASILEIRO: Gets US$399.1MM Tenders for Exchange Offer
---------------------------------------------------------------
Petroleo Brasileiro SA aka Petrobras and its wholly owned
subsidiary Petrobras International Finance Company aka PIFCo, in
connection with the previously announced offer to exchange five
series of notes for new notes and a cash amount, disclosed that
PIFCo has received tenders of approximately US$399.1 million
aggregate principal amount of Old Notes. Pursuant to the terms
of the exchange offer, PIFCo has accepted the entire principal
amount of Old Notes tendered for settlement. Settlement is
expected to occur on Feb. 7, 2007.
Specifically, PIFCo accepted tenders of approximately:
-- US$7.8 million principal amount of the 12.375% Global
Step-Up Notes due 2008;
-- US$14.0 million principal amount of 9.875% Senior Notes
due 2008;
-- US$51.0 million principal amount of the 9.75% Senior
Notes due 2011;
-- US$124.1 million principal amount of the 9.125% Global
Notes due 2013 and
-- US$202.1 million principal amount of the 7.750% Global
Notes due 2014.
On the Settlement Date, PIFCo will issue approximately US$399.1
million principal amount of the Reopening Notes, which
constitute a further issuance of, and form a single fungible
series with, PIFCo's 6.125% Global Notes due 2016 that were
issued on Oct. 6, 2006. There will be approximately $899.1
million principal amount of total outstanding 6.125% Global
Notes due 2016 once the Reopening Notes have been issued.
The exchange offers expired at 12:00 midnight, New York City
time, on Feb. 2, 2007. The terms of the exchange offers are
further described in the applicable prospectus dated
Jan. 4, 2007.
PIFCo has retained Morgan Stanley & Co., Incorporated and UBS
Securities LLC to act as dealer managers for the offers, The
Bank of New York to act as exchange agent for the offers, The
Bank of New York (Luxembourg) S.A. to serve as Luxembourg agent
for the offers and D.F. King & Co., Inc. to act as information
agent for the offers.
Requests for documents (including the Prospectus) may be
directed to:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Tel: (212) 269-5550 for banks and brokers
(800) 859-8508 for all others
Questions regarding the offers may be directed to:
Morgan Stanley & Co., Inc.
Tel: (800) 624-1800 (in the United States)
(212) 761-1864 (outside the United States)
-- and --
UBS Securities LLC
Tel: (888) 722-9555, ext. 4210 (in the United States)
(203) 719-4210 (outside the United States)
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, and distributes oil and natural
gas and power to various wholesale customers and retail
distributors in Brazil.
Petrobras has operations in China, India, Japan, and Singapore.
Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's.
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
PETROLEO BRASILEIRO: Unit Starts Operations on Gulf of Mexico
-------------------------------------------------------------
Petroleo Brasileiro SA aka Petrobras disclosed that the first
well of the new Cottonwood field has been brought online on
Feb. 5, through its wholly owned subsidiary Petrobras America
Inc., headquartered in Houston.
Initial output is 1.1 million cubic meters of gas and 4,000
barrels of light oil (condensate) per day. A second well will
also start production by the end of February, boosting gas
production to 2 million cubic meters per day. Together, the two
wells will take the field production to 20,000 barrels of oil
equivalent per day. As a result, Cottonwood will be the biggest
Petrobras America field in production, leading the subsidiary's
production to surpass 25,000 barrels of oil equivalent per day
already this month, up from the current 5,500 boed.
This is the first deepwater field Petrobras has developed and
put into production abroad as an operator. The field is also an
example of the integrated work of specialists from several of
the company's units in Brazil, with Petrobras America's team,
integrating Petrobras' experience and technology with the Gulf
of Mexico's market practices.
The outcome of this joint work has brought the project from
blueprints into operation a mere 12 months after the company's
Executive Board approval. The Cottonwood field is located in
Garden Banks quadrant block 244, in the American sector of the
Gulf of Mexico, in a water depth of 670 meters. This is the
company's first field to use submarine equipment and systems
capable of operating under high pressure. The field's two
submarine completion wells are interconnected to a third-party
fixed production platform, located 27 km away, via two
production pipelines and a chemical product control and
injection umbilical cable.
This event marks Petrobras' return, as an operator, to Gulf of
Mexico production fields.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, and distributes oil and natural
gas and power to various wholesale customers and retail
distributors in Brazil.
Petrobras has operations in China, India, Japan, and Singapore.
Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's.
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
SMITHFIELD FOODS: Certifies Compliance with Antitrust Division
--------------------------------------------------------------
Smithfield Foods, Inc., and Premium Standard Farms, Inc., each
has certified substantial compliance with the Antitrust Division
of the U.S. Department of Justice in response to its Request for
Additional Information relating to Smithfield's pending
acquisition of Premium Standard.
While Smithfield and Premium Standard remain hopeful that the
Antitrust Division will complete its review in a time frame that
will permit the Premium Standard acquisition to close in the
first calendar quarter of 2007, the parties have agreed to give
the Antitrust Division 60 days from substantial compliance to
review the transaction and an additional 30 days thereafter for
review should the Antitrust Division deem necessary.
The special meeting of Premium Standard's stockholders called to
vote on the merger is scheduled for Feb. 23, 2007, at 10:00 a.m.
in Kansas City, Missouri.
Smithfield Foods, Inc., headquartered in Smithfield, Virginia,
is the largest vertically integrated producer and marketer of
fresh pork and processed meat in the US and has operating
subsidiaries and joint ventures in France, Poland, Romania, the
UK, Brazil, Mexico, and China.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 2, 2007, Moody's Investors Service downgraded the ratings
of Smithfield Foods' senior unsecured debt to Ba3 from Ba2, its
senior subordinated notes to B1 from Ba2, and its corporate
family rating to Ba2 from Ba1.
Moody's also affirmed Smithfield's SGL-3 speculative grade
liquidity rating.
Moody's said the outlook on all ratings is negative.
TAM SA: Incorporates First MD-11 Aircraft into Fleet
----------------------------------------------------
TAM S.A. incorporated its first aircraft MD-11 into the fleet.
This aircraft will operate the flight that goes to Paris jointly
with Airbus A330. Currently TAM operates 17 weekly frequencies
to the French city with direct flights from Rio de Janeiro
(Galeao Airport) and from Guarulhos, in Sao Paulo. Until the
end of this quarter the company will operate all 21 frequencies
authorized in the bilateral agreement.
The MD-11 will be triple-class and will have capacity to
transport 279 passengers. With this new aircraft, TAM's total
fleet reaches 98 aircraft. The company expects its fleet to
achieve 109 airplanes at the end of 2007.
An advantage of this MD-11 operated by TAM is the entertainment
system on first and business classes. All video, music and
games entertainment are available on PEA (Personal Entertainment
Appliance). The entertainment program includes 10 movies, 3
variety channels, 9 games and 100 albums and video clips.
The arrival of the MD-11 is the first step to the acquisition of
four new Boeing 777-300ER expected to arrive in 2008 according
to the contract that also includes four more options. TAM will
receive another two MD-11 until the end of the first half 2007.
These aircraft will operate the new route to Milan, as of
March 30.
TAM's fleet plan has contracts that still foresee the
acquisition of 57 Airbus aircraft to be delivered by 2010. The
contracts include the option of an additional 20 aircraft.
TAM's strategic plan foresees an operational fleet of 132 Airbus
aircraft by the end of 2010.
TAM SA -- http://www.tam.com.br/-- operates regular flights to
47 destinations throughout Brazil. It serves 72 different
cities in the domestic market through regional alliances.
Additionally, it maintains code-share agreements with
international airline companies that allow passengers to travel
to a large number of destinations throughout the world. TAM was
the first Brazilian airline company to launch a loyalty program.
The program has over 3.3 million subscribers and has awarded
more than 3.6 million tickets.
* * *
Fitch assigned on Aug. 8, 2006, foreign currency and local
currency Issuer Default Ratings of 'BB' to TAM SA. Fitch has
also assigned a national scale rating of 'A+' (bra)' to TAM.
Fitch said the rating outlook is stable.
* BRAZIL: Fitch Affirms BB Sovereign Issuer Default Ratings
-----------------------------------------------------------
Fitch Ratings revised the Outlook on Brazil's long-term foreign
and local currency sovereign Issuer Default Ratings to Positive
from Stable, while affirming both ratings at 'BB'. The agency
also affirmed Brazil's Short-term IDR at 'B' and the Country
Ceiling at 'BB+'.
"The rapid improvement in Brazil's external balance sheet,
notably its shift in 2006 to being a net public external
creditor, raises the likelihood of an upgrade over the next two
years," said Roger Scher, Managing Director for Latin American
Sovereign Ratings, "as long as public finances do not
deteriorate."
Fitch estimates that a key external solvency measure, external
debt net of liquid external assets or NXD fell to 49.3% of
current external receipts or CXR by year-end 2006, from 78.8% in
2005, on a stronger-than-anticipated current account surplus and
substantial capital inflows. While this ratio still exceeds
both the 'BB' and 'BBB' medians (39.4% and 28.8%, respectively),
persistent current account surpluses have underpinned a more
rapid improvement in this ratio in Brazil, which should continue
in the near future.
"The public sector has shifted from net external debtor to net
external creditor," said Mr. Scher, "which compares favorably
with peer sovereigns." Official foreign exchange reserves rose
to US$91.6 billion by early February. The government's
liability management, featuring external debt buybacks and the
reduction of foreign exchange-linked obligations, has helped
reduce the public sector's exposure to exchange rate risk and
external creditors. Moreover, sound macroeconomic policies in
recent years have underpinned disinflation in Brazil, with IPCA
consumer price inflation finishing 2006 at 3%.
"Meanwhile, the overall government debt burden remains high and
fell only marginally in 2006, in part due to some fiscal policy
slippage,' added Mr. Scher. The non-financial public sector
primary budget surplus slipped to 4.32% of GDP in 2006 from
4.83% in 2005. Real growth of central government spending
(10.5% in 2006) rose faster than revenues (8%) on a combination
of public wage and employment growth and expansion of social
programs. The authorities have announced their intention to
deduct up to 0.5% of GDP from the NFPS primary surplus target of
4.25% of GDP in 2007 due to increased investment outlays.
Meanwhile, they have announced measures to control public and
minimum wage growth.
"Brazil is an outlier relative to peers in terms of its
government debt burden," said Mr. Scher, "and robust primary
surpluses as well as structural reforms that would release the
country's growth potential are needed to get the debt to GDP
ratio on a rapid downward trajectory."
Fitch estimates that gross general government debt to GDP ended
2006 at 74.9%, versus 'BB' and 'BBB' medians of 40.4% and 34%,
respectively. The government tax burden, which may have reached
a high of 39% of GDP in 2006, squelches growth in the formal
economy. GDP growth is low in Brazil relative to peers,
averaging 2.5% per year over the last five years, versus 5% and
4.8% for the 'BB' and 'BBB' medians, respectively.
Public expenditure control could provide room to reduce the tax
burden. Likewise, other measures that would underpin improved
public debt dynamics and growth prospects include reforms to:
-- social security,
-- sales taxes,
-- the labor market,
-- trade policy,
-- the central bank and
-- the banking sector;
yet it will prove challenging for President Lula, reelected to a
second four-year term in October, to pass these measures in
Brazil's fractious congress.
Finally, capital inflows picked up in 2006, including some US$12
billion into Brazil's fixed income market and US$7.7 billion
into equities. Brazil's official reserve position remains
formidable relative to these flows, evidenced in a 2007 external
liquidity ratio of 158.4% versus 175.2% and 137.1% for 'BB' and
'BBB' medians, respectively. However, non-resident investors
have taken positions in Brazil's on-shore yield curve via
derivatives, which could introduce volatility in the foreign
exchange and government securities markets should sentiment in
Brazil and emerging markets more broadly deteriorate.
Sustained macroeconomic stability, underpinned by low inflation
and fiscal discipline, would support an improvement in Brazil's
sovereign creditworthiness over the medium-term. However,
material fiscal slippage and weaker macroeconomic performance
than expected would undermine the prospects for a sovereign
rating upgrade, given the still high government debt burden.
===========================
C A Y M A N I S L A N D S
===========================
ALTAIR CAPITAL: Proofs of Claim Filing Deadline Is on Feb. 22
-------------------------------------------------------------
Altair Capital International, Ltd.'s creditors are required to
submit proofs of claim by Feb. 22, 2007, to the company's
liquidators:
John Cullinane
Derrie Boggess
c/o Walkers SPV Limited
Walker House
87 Mary Street, George Town
Grand Cayman, Cayman Islands
Tel: (345) 914-6305
Creditors who are not able to comply with the Feb. 22 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Altair Capital's shareholders agreed on Dec. 19, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
ARRAKIS FUND: Proofs of Claim Filing Deadline Is on Feb. 22
-----------------------------------------------------------
The Arrakis Fund Ltd.'s creditors are required to submit proofs
of claim by Feb. 22, 2007, to the company's liquidators:
Linburgh Martin
John Sutlic
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Feb. 22 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Arrakis Fund's shareholders agreed on Jan. 15, 2007, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Thiry Gordon
Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949 8455
Fax: (345) 949 8499
GLOBAL PRIVATE: Last Day for Proofs of Claim Filing Is Feb. 20
--------------------------------------------------------------
Global Private Investments Ltd.'s creditors are required to
submit proofs of claim by Feb. 20, 2007, to the company's
liquidators:
K.D. Blake
S.L.C. Whicker
KPMG
P.O. Box 493, George Town
Century Yard, Cricket Square
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Feb. 20 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Global Private's shareholders agreed on Dec. 27, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Gundega Tamane
P.O. Box 493, George Town
Grand Cayman, Cayman Islands
Tel: 345-914-4309
345-949-4800
Fax: 345-949-7164
GREENBLOCK INVESTMENT: Final General Meeting Is on Feb. 20
----------------------------------------------------------
Greenblock Investment Ltd.'s final shareholders meeting will be
at 12:00 p.m. on Feb. 20, 2007, at:
MBT Trustees (Cayman) Ltd.
3rd Floor, Piccadilly Center
Elgin Avenue, George Town
Grand Cayman, Cayman Islands
These agenda will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
2) requesting the members' approval of the liquidation fees
incurred to date, approval of the liquidator's estimated
costs to completion, and
3) hearing any explanation that may be given by the
liquidator.
A member entitled to attend and vote at the meeting may appoint
a proxy, who need not be a member, in his stead.
The liquidator can be reached at:
Paolo Giacomelli
MBT Trustees Ltd.
P.O. Box 30622 SMB
Grand Cayman, Cayman Islands
Tel: 345 945-8859
Fax: 345 949-9793/4
J SHOP IV: Last Day for Proofs of Claim Filing Is on Feb. 22
------------------------------------------------------------
J Shop IV Corp.'s creditors are required to submit proofs of
claim by Feb. 22, 2007, to the company's liquidator:
Piccadilly Cayman Limited
P.O. Box 10632 APO
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Feb. 22 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
J Shop's shareholders agreed on Jan. 10, 2007, for the company's
voluntary liquidation under Section 135 of the Companies Law
(2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Ellen J. Christian
Piccadilly Cayman Limited
c/o BNP Paribas Bank & Trust Cayman Limited
3rd Floor Royal Bank House
Shedden Road, George Town
Grand Cayman, Cayman Islands
Tel: 345 945 9208
Fax: 345 945 9210
LIBRETTO INVESTMENTS: Proofs of Claim Must be Filed by Feb. 22
--------------------------------------------------------------
Libretto Investments' creditors are required to submit proofs of
claim by Feb. 22, 2007, to the company's liquidators:
Susan Lo Yee Har
28 Three Pacific Place,
1 Queen's Road East, Hong Kong
Linburgh Martin
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Feb. 22 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Libretto Investments' shareholders agreed on Dec. 27, 2006, for
the company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Thiry Gordon
Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949 8455
Fax: (345) 949 8499
OLD MUTUAL ASIA: Creditors Must File Proofs of Claim by Feb. 22
---------------------------------------------------------------
Old Mutual Asia Pacific Equity Fund Ltd.'s creditors are
required to submit proofs of claim by Feb. 22, 2007, to the
company's liquidators:
Warren Keens
John Sutlic
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Feb. 22 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Old Mutual's shareholders agreed on Dec. 29, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Thiry Gordon
Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949 8455
Fax: (345) 949 8499
OLD MUTUAL US: Deadline for Proofs of Claim Filing Is on Feb. 22
----------------------------------------------------------------
Old Mutual US Specialist Equity Fund Ltd.'s creditors are
required to submit proofs of claim by Feb. 22, 2007, to the
company's liquidators:
Warren Keens
John Sutlic
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Feb. 22 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Old Mutual's shareholders agreed on Dec. 29, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Thiry Gordon
Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949 8455
Fax: (345) 949 8499
SEAGATE TECH: Partners with Fry's to Offer Data Recovery Service
----------------------------------------------------------------
Seagate Technology and Fry's Electronics, Inc., entered into a
strategic partnership in which Fry's Electronics will provide
Seagate's renowned data recovery services through 33 of its
retail locations. Fry's stores are now equipped with a
revolutionary software solution allowing in- store service
technicians to conduct on-site data recovery service assessments
and present service price quotations on all brands of hard disc
drives. This diagnostic software tool is the cornerstone to a
process that promises a pleasant, hassle-free experience for
Fry's customers.
"We are extremely excited to have partnered with a respected
computer retailer like Fry's," commented Paul Steele, vice
president, Sales and Marketing for Seagate Recovery Services.
"Fry's enthusiasm for this program is a true demonstration of
its commitment to providing its customers with an innovative,
full-service offering."
Seagate's groundbreaking software solution enables Fry's service
technicians to assess the extent of data loss situations
resulting from data corruption, physical hardware damage or
virus attacks while providing firm price quotations for
Seagate's in-lab data recovery services. Until now, businesses
and individuals seeking in-lab recovery solutions could only be
offered wide price ranges for recovery services until their
media was shipped and evaluated at a remote lab facility.
Seagate's enhanced tools, advanced processes and complete
service technician training are part of the organization's
ongoing partner commitment to increase the success of
recoverability for its customers' data.
All Fry's service desks have been equipped with customer
literature describing in-lab data recovery options and service
features. Should customers proceed with an in-lab recovery,
their storage media will be shipped, free of charge, to one of
Seagate's lab facilities and returned to the store location upon
completion of the recovery. Seagate Recovery Services' standard
"your data back or no recovery fee" policy and money-back data
quality commitment on all recovered data apply to all recovery
cases.
"Fry's main objective is to offer customers a complete suite of
after- sales services and support," said Jeff Staat, director,
Service Operations of Fry's Electronics. "Seagate has provided
an extremely user-friendly recovery solution that is consistent
with Fry's need to provide superior quality services to our
customers as efficiently and cost-effectively as possible."
About Fry's Electronics
Fry's was founded as a Silicon Valley retail electronics store
to provide a one-stop-shopping environment for the hi-tech
professional. Fry's continues to keep hi-tech professionals
supplied with products representing the latest technological
trends and advances in the personal computer marketplace. Fry's
retails over 50,000 electronic items within each store, now
totaling 33. There are currently 7 stores in Northern
California, 9 stores in Southern California, 8 stores in Texas,
2 stores in Arizona, 2 stores in Georgia, and 1 store each in
Illinois, Indiana, Nevada, Oregon and Washington.
Headquartered in Scotts Valley, California, and registered in
Cayaman Islands, Seagate Technology (NYSE: STX) --
http://www.seagate.com/-- designs, manufactures and markets
hard disc drives, and provides products for a wide-range of
Enterprise, Desktop, Mobile Computing, and Consumer Electronics
applications.
* * *
Moody's Investors Service has confirmed on July 17, 2006, the
ratings of Seagate Technology HDD Holdings and upgraded the
ratings of Maxtor Corp., now a wholly owned subsidiary of
Seagate Technology US Holdings, following the completion of its
acquisition on May 19, 2006, and subsequent guaranteeing of
Maxtor's debt by Seagate. This concludes the review initiated
by Moody's on Dec. 21, 2005. The review was prompted by the
company's announcement of its intention to acquire Maxtor in an
all-stock transaction for approximately US$1.9 billion. The
ratings outlook is stable.
Moody's confirmed these ratings:
-- Corporate Family Rating: Ba1; and
-- SGL Rating of 1.
Moody's upgraded these ratings:
Seagate Technology HDD Holdings:
-- US$400 million senior notes 8%, due 2009: to Ba1
SERES CAPITAL: Proofs of Claim Filing Deadline Is on Feb. 16
------------------------------------------------------------
Seres Capital (Cayman) Co., Ltd.'s creditors are required to
submit proofs of claim by Feb. 16, 2007, to the company's
liquidators:
David A.K. Walker
Lawrence Edwards
PricewaterhouseCoopers
Strathvale House, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Feb. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Seres Capital's shareholders agreed on Dec. 29, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Jodi Jones
P.O. Box 258
Grand Cayman, Cayman Islands
Tel: (345) 914 8694
Fax: (345) 949 4590
SOCS LTD: Creditors Have Until Feb. 22 to File Proofs of Claim
--------------------------------------------------------------
SOCS Ltd.'s creditors are required to submit proofs of claim by
Feb. 22, 2007, to the company's liquidator:
Christopher E. Jansen
Stanfield Capital Partners LLC
430 Park Avenue, 11th Floor
New York, New York 10022, U.S.A.
Creditors who are not able to comply with the Feb. 22 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
SOCS Ltd.'s shareholders agreed on Dec. 19, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Ian Gobin
Walker House
Mary Street, George Town
Grand Cayman, Cayman Islands
Tel: (345) 814 4604
Fax: (345) 949 7886
STANFIELD OPPORTUNISTIC: Claims Filing Deadline Is on Feb. 22
-------------------------------------------------------------
Stanfield Opportunistic Convertible Strategies Ltd.'s creditors
are required to submit proofs of claim by Feb. 22, 2007, to the
company's liquidator:
Christopher E. Jansen
Stanfield Capital Partners LLC
430 Park Avenue, 11th Floor
New York, New York 10022, U.S.A.
Creditors who are not able to comply with the Feb. 22 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Stanfield Opportunistic's shareholders agreed on Dec. 19, 2006,
for the company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Ian Gobin
Walker House
Mary Street, George Town
Grand Cayman, Cayman Islands
Tel: (345) 814 4604
Fax: (345) 949 7886
=========
C H I L E
=========
INFOR GLOBAL: To Refinance Existing Credit Facilities
-----------------------------------------------------
Infor Global Solutions Holdings Ltd. plans to refinance certain
indebtedness. Infor is seeking to refinance its existing
US$1,425 million Senior Subordinated Bridge Facility with a new
US$200 million Senior Secured First-Lien Term Loan and US$1,275
million Senior Secured Second-Lien Term Loan. In addition,
Infor is seeking to amend its existing US$2,394 million Senior
Secured First-Lien Facilities to permit the refinancing.
Closing of the contemplated credit facilities is expected to
occur in late February. Infor has engaged:
-- J.P. Morgan Securities Inc.,
-- Credit Suisse Securities LLC, and
-- Merrill Lynch, Pierce, Fenner & Smith Inc.
and their affiliates to arrange and syndicate the refinancing.
About Infor Global
Infor Global Solutions Holdings Ltd., -- http://www.infor.com/-
- headquartered in Alpharetta, Georgia and a Cayman Islands
exempted company, is a global provider of financial and
enterprise applications software. The company has locations in
Japan, Australia, Austria, Brazil, Chile, China, France, India,
Mexcio, Netherlands, Singapore, and Spain, among others.
* * *
Standard & Poor's Ratings Services affirmed on Feb. 5, 2007, its
'B-' corporate credit rating on Alpharetta, Ga.-based Infor
Global Solutions Holdings Ltd.
At the same time, Standard & Poor's assigned its 'CCC' bank loan
rating (two notches below the corporate credit rating) and '5'
recovery rating to Infor's proposed US$1.275 billion second-lien
senior secured term loan, indicating our expectation of
negligible (0%-25%) recovery of principal by creditors in the
event of a payment default.
Standard & Poor's also affirmed its 'B' bank loan rating (one
notch above the corporate credit rating) and '1' recovery rating
on Infor's US$2.6 billion first-lien senior secured bank
facility, including a proposed $200 million add-on term loan.
The first-lien ratings indicate high expectation of full
recovery of principal in the event of a payment default.
INFOR GLOBAL: Moody's Affirms B3 Corporate Family Rating
--------------------------------------------------------
Moody's affirmed Infor Global Solutions Holdings Ltd.'s B3
corporate family rating and updated the company's individual
debt ratings in accordance with its refinancing of a US$1.425
senior subordinated bridge facility rated Caa2 with a
combination of an additional US$200 million to its existing
first lien term loan rated B1 and a new US$1.275 billion second
lien term loan rated Caa2.
Updates to Infor's individual debt ratings:
-- US$150 million Senior Secured Revolving Credit Facility
due 6yr, to B1, LGD3, 31% from B1, LGD2, 25%;
-- US$2.44 billion Senior Secured First Lien due 6 yr, to B1,
LGD3, 31% from B1, LGD2, 25%; and
-- US$1.275 billion Senior Secured Second Lien due, rated
Caa2, LGD5, 84%.
This rating will be withdrawn:
-- US$1.675 billion Senior Subordinated Notes, from Caa2,
LGD5, 80%.
Currently Infor is six months into the integration process of
its recent acquisition SSA Global Technologies and merger with
Extensity S.A.R.L., two companies that were digesting their own
acquisitions including Systems Union for Extensity. Although
Infor's acquisition strategy is to acquire companies with
complementary product lines and to maintain those product lines,
the company undertakes significant rationalization activities
including reducing headcount that remain in progress. Although
Moody's views positively Infor's past success at integrating
acquired firms, the relative size of the recent acquisitions,
the high leverage and management's stated intentions to continue
to grow through acquisitions constrain the company's B3
corporate family rating. Moody's continues to view positively
the company's leading market positions across multiple verticals
within mid-market enterprise software applications and its
historically strong renewal rates in excess of 90%. It appears
that Infor has been able to achieve substantial cost reductions
in the current integration process however it is too soon to
determine if there has been any negative effects on the business
or customer base as a result. Additionally, Moody's notes that
the company faces growing threats from larger competitors
including SAP who are expanding their presence in the mid-market
space.
Infor Global Solutions Holdings Ltd., -- http://www.infor.com/
-- headquartered in Alpharetta, Georgia and a Cayman Islands
exempted company, is a global provider of financial and
enterprise applications software. The company has locations in
Japan, Australia, Austria, Brazil, Chile, China, France, India,
Mexcio, Netherlands, Singapore, and Spain, among others.
INFOR GLOBAL: S&P Affirms B- Corporate Credit Rating
----------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on Alpharetta, Ga.-based Infor Global Solutions
Holdings Ltd.
At the same time, Standard & Poor's assigned its 'CCC' bank loan
rating (two notches below the corporate credit rating) and '5'
recovery rating to Infor's proposed US$1.275 billion second-lien
senior secured term loan, indicating our expectation of
negligible (0%-25%) recovery of principal by creditors in the
event of a payment default.
Standard & Poor's also affirmed its 'B' bank loan rating (one
notch above the corporate credit rating) and '1' recovery rating
on Infor's US$2.6 billion first-lien senior secured bank
facility, including a proposed US$200 million add-on term loan.
The first-lien ratings indicate high expectation of full
recovery of principal in the event of a payment default.
The rating outlook is positive. Pro forma for the proposed
transaction, the company will have approximately US$3.7 billion
in total funded debt outstanding. Infor will use proceeds from
the second-lien term loan and the first-lien add-on to refinance
its US$1.425 billion senior secured subordinated bridge
facility.
"The ratings reflect Infor's limited track record following a
very aggressive acquisition strategy, and its high debt
leverage," said Standard & Poor's credit analyst Ben Bubeck.
"These factors are only partially offset by the company's
leading presence in its selected midmarket niche, a largely
recurring revenue base, and a broad and diverse customer base."
Infor Global Solutions Holdings Ltd., -- http://www.infor.com/
-- headquartered in Alpharetta, Georgia and a Cayman Islands
exempted company, is a global provider of financial and
enterprise applications software. The company has locations in
Japan, Australia, Austria, Brazil, Chile, China, France, India,
Mexcio, Netherlands, Singapore, and Spain, among others.
===============
C O L O M B I A
===============
* COLOMBIA: Free Trade Accord with US May be Ratified in June
-------------------------------------------------------------
Colombian foreign minister Maria Consuelo Araujo told the
Financial Times that the country's free trade pact with the
United States could be ratified by June.
State department officials hoped to get the congress' approval
before US President George W. Bush's negotiating authority
expires in July, the Financial Times says, citing Minister
Araujo.
Minister Araujo admitted to the Financial Times, "We need this
deal. There are 150,000 jobs at stake. If we do not have the
framework these jobs will be destroyed."
The Financial Times relates that the minister met with Tom
Shannon, the assistant US secretary of state, in Bogota.
Minister Araujo told the Financial Times, "He (Mr. Shannon) said
they were looking for an agreement [with congressional leaders]
by Feb. 19 and then to present it for ratification. Mr. Shannon
said they would not reopen negotiations."
Minister Araujo also agreed with Peter Mandelson, the European
Union trade commissioner, to advance negotiations for a free
trade accord between the two parties, The Financial Times notes.
The minister said, "We expect the agreement to be finished and
signed by 2008 at the [EU-Andean Community] summit in Lima."
According to the Financial Times, Minister Araujo also discussed
with Benita Ferrero-Waldner -- European Union's external affairs
commissioner -- extra financial support for Colombia's efforts
to eliminate coca plantations and recover over 40,000 fighters
from the civil war.
Colombia was considering paying peasants to destroy coca plants
by hand across 50,000 hectares, which is over 50% of
plantations, rather than use crop-spraying aircraft, the
Financial Times says, citing Minister Araujo.
"That would be a solution on the border with Ecuador," Minister
Araujo told the Financial Times.
But the army would have to clear any areas of landmines first,
the Financial Times states, citing Minister Araujo.
* * *
On July 25, 2006, Fitch rated the Republic of Colombia's US$1
billion issue of fixed-rate Global Bonds maturing
Jan. 27, 2017, 'BB'. The rating is in line with Fitch's long-
term foreign currency rating on Colombia. Fitch said the Rating
Outlook is Positive.
=======
C U B A
=======
* CUBA: Investing Over US$300 Mil. to Improve Industry Output
-------------------------------------------------------------
Cuba told Prensa Latina that it will invest over US$300 million
in its basic industry to boost industry production and energy-
saving efficiency.
According to Prensa Latina, nickel production is included in the
investment.
Holguin province had record production at the end of 2006, and
its nickel exports became the nation's largest "hard currency"
income source, Prensa Latina states.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2006, Moody's Investors Service said that Cuba's Caa1
foreign-currency issuer rating reflects the debt moratorium that
has been in place for more than 15 years, leading to the
accumulation of principal and interest arrears.
Moody's had assigned these ratings on Cuba:
-- CC LT Foreign Bank Deposit, Caa2
-- CC LT Foreign Currency Debt, Caa1
-- CC ST Foreign Bank Deposit, NP
-- CC ST Foreign Currency Debt, NP
-- Issuer Rating, Caa1
=============
E C U A D O R
=============
PETROLEO BRASILEIRO: Faces Env'l Probe by Ecuadorian Authorities
----------------------------------------------------------------
Ecuadorian President Rafael Correa told Bloomberg News that
Petroleo Brasileiro SA's operating contract maybe nullified if
the government found violations to their environmental
agreements. The government is also reviewing its service
contracts with cellular companies.
National authorities are probing the Brazilian state-oil
company's operations within a national park that is inhabited by
indigenous groups to see if environmental guidelines are
observed.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, and distributes oil and natural
gas and power to various wholesale customers and retail
distributors in Brazil.
Petrobras has operations in China, India, Japan, and Singapore.
Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's.
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
* ECUADOR: Probes Petrobras on Environmental Pact Compliance
------------------------------------------------------------
Ecuadorian President Rafael Correa told Bloomberg News that
Petroleo Brasileiro SA's operating contract maybe nullified if
the government found violations to their environmental
agreements. The government is also reviewing its service
contracts with cellular companies.
National authorities are probing the Brazilian state-oil
company's operations within a national park that is inhabited by
indigenous groups to see if environmental guidelines are
observed.
* * *
As reported in the Troubled Company Reporter on Jan. 25, 2007,
Fitch Ratings downgraded the long-term foreign currency Issuer
Default Rating of Ecuador to 'CCC' from 'B-', indicating that
default is a real possibility in the near term.
In addition, these ratings were downgraded:
-- Uncollateralized foreign currency bonds to
'CCC/RR4' from 'B-/RR4';
-- Collateralized foreign currency Par and Discount
Brady bonds to 'CCC+/RR3' from 'B/RR3'; and
-- Short-term foreign currency IDR to 'C' from 'B'.
Fitch also affirmed the Country ceiling rating at 'B-'.
=====================
E L S A L V A D O R
=====================
INTERPUBLIC GROUP: Names Bant Breen as Marketing Group President
----------------------------------------------------------------
The Interpublic Group has tapped Bant Breen, currently Director
of Strategic Development and Innovation for Interpublic, as
President of The Futures Marketing Group. The group was created
as a part of Interpublic's new media alignment announced in late
2006. The unit seeks to build and drive groundbreaking media
and marketing services and business models and to provide
strategic new media solutions that support Interpublic's
agencies. Mr. Breen will report to Stephen Gatfield, EVP,
Strategy and Network Operations, and Philippe Krakowsky, EVP,
Strategy and Corporate Relations.
In his new role, Breen will identify and manage investments in
emerging media and communications areas. Last year, Interpublic
entered into strategic partnerships with the social-networking
website Facebook and with Spot Runner, an automated local
advertising and media buying service. Interpublic's Emerging
Media Lab, a center for marketing innovation built as both a
physical and virtual space, will also be part of the Futures
Marketing Group. The group will also seek to develop new
business models and services as well as manage research in
strategic areas that may evolve into new businesses.
"Media continues to change and evolve at an accelerating rate
and its importance will increase accordingly," said Michael
Roth, Interpublic's Chairman and CEO. "That is why we created
the Futures Marketing Group as a part of our new media strategy.
Bant is well suited to lead this charge. His knowledge of
emerging media and the leadership role he has played on a number
of important clients as relates to digital will make him and his
group a valuable asset for all of our agencies."
Prior to joining Interpublic, Mr. Breen was the Founder and
President of Bant Breen LLC, a strategic marketing and
communications consultancy affiliated with Dentsu Inc. Before
founding his own company, he was with Leo Burnett Worldwide for
five years in roles that included Regional Managing Director of
iLeo (now Arc Worldwide) as well as Digital and Integrated
Communications Director for Leo Burnett EMEA.
Interpublic Group of Companies Inc. (NYSE:IPG) --
http://www.interpublic.com/-- is one of the world's leading
organizations of advertising agencies and marketing services
companies. The Interpublic Group has over 43,000 employees
working in offices in more than 130 countries around the world,
including Argentina, Brazil, Barbados, Belize, Chile, Colombia,
Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala,
Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Puerto
Rico, Peru, Uruguay and Venezuela.
* * *
As reported in the Troubled Company Reporter on Dec. 12, 2006,
Standard & Poor's Ratings Services said that its ratings on The
Interpublic Group of Cos. Inc., including the corporate credit
rating of 'B', remain on CreditWatch with negative implications,
where they were placed on March 22, 2006. The CreditWatch
update followed the news that Wal-Mart Stores Inc. has decided
to place under review its business with one of Interpublic's
advertising agencies, although other Interpublic units may pitch
for the business. The New York-based global advertising agency
holding company had approximately US$2.2 billion in debt
outstanding at Sept. 30, 2006.
=================
G U A T E M A L A
=================
BRITISH AIRWAYS: Moody's Changes Ratings' Outlook to Positive
-------------------------------------------------------------
Moody's Investors Service changed the outlook on the Ba1
corporate family and Ba2 senior unsecured debt ratings of
British Airways plc and its guaranteed subsidiaries to positive
from negative. The rating action is based on the company's
improved operating performance, its continuous improvement in
credit metrics and the agreement reached with unions over
changes to pension conditions.
The change in outlook reflects British Airways's successful de-
leveraging strategy on the back of improved cash-flow generation
and limited capital expenditures. Moody's recognizes that
British Airways has strengthened its debt-protection measures
with the recent recovery in demand for air travel and the
company's continuing focus on reducing leverage and improving
competitiveness through cost reductions, and they now position
the company solidly in the Ba1 rating category. The company has
successfully increased its operating margin over the years,
despite the surge in fuel price and its business plan for the
two years ending March 2008 targets a further GBP450 million in
savings and a 10% operating margin, which, in Moody's view,
looks achievable notwithstanding unforeseen events. The
company's debt repayment schedule is evenly spread over the
coming five years, with average payments of approximately GBP350
million per annum.
Furthermore, the change in outlook factors in British Airways's
recent announcement that its unions will recommend to their
members the company's proposal to address its New Airways
Pension Scheme deficit. This would include a one-off
contribution of GBP800 million into the scheme, as well as
additional contributions of up to GBP150 million over the next
three years provided certain financial targets are met, in
return for changes to future benefits and a one-off employee
saving of GBP400 million. In Moody's opinion, this agreement
will be positive for the company's credit quality as it will
ultimately result in lower adjusted debt, and will enable
management to refocus its attention on other strategic matters.
The ratings and positive outlook are supported by British
Airways's strong base at Heathrow, which benefits from
significant traffic flows to and from London, as well as its
international network and membership of the global airlines
alliance oneworld, management's proven track record of cost
cutting and the recent improvement in traffic trends. Moreover,
the positive outlook factors in the company's efforts to secure
its long-term positioning as Europe's third-largest carrier and
the expected positive impact of the relocation to Terminal 5 at
Heathrow in 2008.
Moody's nevertheless notes that the company needs to renew and
expand its long haul fleet, and plans to launch a substantial
refleeting programme in 2008, which will weigh significantly on
its free cash-flow generation and thus limit its ability to make
high debt repayments. The ratings also take account of the
challenges faced by the company to reform working practices, as
testified by the recent difficult pay negotiations that were
concluded in January 2007. Moody's moreover notes that
uncertainties remain regarding the industry environment in terms
of economic development and ongoing exposure to geopolitical
risks and security threats. British Airways incurred an
exceptional loss of GBP100 million in August 2006 following a
terrorist alert which resulted in a disruption of its network
and tighter security controls, and will incur a revenue loss
following the recent averted strike which is estimated at GBP80
million. The ratings also reflect the continued strong
competition, in particular from European low-cost carriers,
which have contributed to fare and margin pressure, and the
adverse effects on profitability from high fuel prices.
Furthermore, industry consolidation and deregulation may present
medium-term challenges.
The positive outlook is based on Moody's expectation that the
company's operating performance will remain very strong, and
that it will continue to focus on its de-leveraging strategy
despite investment in fleet renewal.
British Airways's solid liquidity position is supported by its
strong cash position of GBP2.6 billion at end-December 2006,
improved cash-flow generation as well as a moderate committed
credit facility of USD420 million due 2010, which is currently
undrawn. However, the company's significant amount of
encumbered assets is reflected in the one-notch difference
between the Ba1 corporate family rating and the Ba2 senior
unsecured rating.
Headquartered in West Drayton, United Kingdom, British Airways
Plc -- http://www.ba.com/-- operates of international and
domestic scheduled and charter air services for the carriage of
passengers, freight and mail, and provides of ancillary
services. The British Airways group consists of British Airways
Plc and a number of subsidiary companies including in particular
British Airways Holidays Ltd. and British Airways Travel
Shops Ltd. BA has offices in India and Guatemala.
===============
H O N D U R A S
===============
CONTINENTAL AIR: Picks Pinnacle as New Regional Airline Partner
---------------------------------------------------------------
Continental Airlines has selected a new regional airline partner
and a new type of turboprop aircraft to operate as Continental
Connection from its New York hub at Newark Liberty International
Airport.
Colgan Air Inc., a subsidiary of Pinnacle Airlines Corp., will
operate efficient, quiet and comfortable 74-seat Bombardier Q400
twin-turboprop aircraft on short and medium-distance routes from
Liberty starting in early 2008.
"Pinnacle Airlines Corp. and its subsidiary Colgan have the high
standards that we expect from our Continental Connection
service," said Mark Erwin, Continental's senior vice president
of corporate development. "Our selection of the Q400 aircraft
is an important move for us because it addresses our need for
efficiency without sacrificing our customers' comfort, and
because it is well-suited to the unique operating environment at
Newark Liberty."
Continental has entered into a 10-year capacity-purchase
agreement with Pinnacle Airlines Corp. The company will acquire
15 new Q400 aircraft that it will operate as Continental
Connection through its Colgan subsidiary. Continental will
schedule and market the service.
The Q400 Aircraft
Manufactured by Bombardier Aerospace, the Q400 is a high-
efficiency, modern-technology turboprop, which will be
configured with 74 seats in a single cabin. With a maximum
cruise speed of 440 mph, the Q400 can keep pace with traffic
flows into and out of busy metropolitan airports like Newark
Liberty. Passenger comfort will be enhanced by the Q400's
state-of-the-art noise and vibration suppression system.
About Pinnacle Airlines
Pinnacle Airlines Corp., a publicly traded holding company, is
the parent company of Pinnacle Airlines, Inc. and Colgan Air,
Inc. Pinnacle Airlines, Inc. operates 135 Bombardier CRJ-200
Regional Jets in the United States and Canada as a Northwest
Airlink carrier. Colgan Air, Inc. operates as Continental
Connection, United Express and US Airways Express with a fleet
of 39 Saab 340 and 11 Beech 1900 turbo-prop regional aircraft.
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/
-- is the world's fifth largest airline. Continental, together
with Continental Express and Continental Connection, has more
than 3,200 daily departures throughout Mexico, Europe and Asia,
serving 154 domestic and 138 international destinations
including Honduras and Bonaire. More than 400 additional points
are served via SkyTeam alliance airlines. With more than 43,000
employees, Continental has hubs serving New York, Houston,
Cleveland and Guam, and together with Continental Express,
carries approximately 61 million passengers per year.
Continental consistently earns awards and critical acclaim for
both its operation and its corporate culture.
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2006,
Moody's Investors Service assigned ratings of Caa1, LDG5-75% to
the US$200 million of senior unsecured notes issued by
Continental Airlines Inc.'s. Moody's affirmed the B3 corporate
family rating. Moody's said the outlook is stable.
As reported in the Troubled Company Reporter on Oct. 23, 2006,
Standard & Poor's Ratings Services affirmed its ratings,
including the 'B' long-term and 'B-3' short-term corporate
credit ratings, on Continental Airlines Inc. The outlook is
revised to stable from negative. Continental has about US$17
billion of debt and leases.
At the same time, Fitch Ratings has upgraded Continental
Airlines Inc.'s Issuer Default Rating to 'B-' from 'CCC' and
Senior Unsecured Debt to 'CCC/RR6' from 'CC/RR6'. Fitch said
the rating outlook was stable.
LEAR CORP: American Real Offers to Buy Firm for US$36 Per Share
---------------------------------------------------------------
Lear Corp. disclosed that American Real Estate Partners LP, an
affiliate of Carl C. Icahn, has made an offer to acquire all of
the issued and outstanding shares of the company for US$36.00
per share in cash.
Any transaction would be subject to negotiation and execution of
definitive documentation and other conditions. Lear's Board of
Directors is expected to formally consider the acquisition
proposal following the conclusion of on-going negotiations.
The acquisition proposal contemplates that Bob Rossiter, Lear's
chairman and CEO, and the rest of the senior management team
will remain with the company.
No assurances can be given that definitive documentation will be
entered into or that the proposed transaction will be
consummated on the terms contemplated or at all.
Southfield, Mich.-based Lear Corp. (NYSE: LEA) --
http://www.lear.com/-- supplies automotive interior systems and
components. Lear provides complete seat systems, electronic
products, electrical distribution systems, and other interior
products.
Lear also operates in Argentina, Austria, Belgium, Brazil,
Canada, China, Czech Republic, United Kingdom, France, Germany,
Honduras, Hungary, India, Italy, Japan, Mexico, Morocco,
The Netherlands, Philippines, Poland, Portugal, Romania, Russia,
Singapore, Slovakia, South Africa, South Korea, Spain, Sweden,
Thailand, Tunisia, Turkey and Venezuela.
* * *
As reported on Nov. 23, 2006, Moody's Investors Service raised
Lear Corp.'s rating outlook to stable from negative and affirmed
all other Lear ratings.
As reported on Nov. 22, 2006, Standard & Poor's Ratings Services
assigned its 'B-' ratings to Lear Corp.'s US$300 million senior
notes due 2013 and its US$400 million senior notes due 2016.
Lear's 'B+' corporate credit and other ratings were affirmed.
The outlook is negative.
Moody's Investors Service has assigned a B3, LGD4, 61% rating to
Lear Corp.'s new offering of US$700 million of unsecured notes.
At the same time, Moody's affirmed Lear's Corporate Family
Rating of B2, Speculative Grade Liquidity rating of SGL-2 and
negative outlook. All other long-term ratings are unchanged.
LEAR CORP: S&P Says Ratings Unaffected by American Real's Offer
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on Lear
Corp. (B+/Negative/B-2) were not immediately affected by the bid
from American Real Estate Partners L.P. or AREP (BB+/Stable/--),
an entity controlled by Carl Icahn, to purchase Lear for US$36
per share in cash, or more than US$2 billion. AREP currently
owns about 20% of Lear. The Southfield, Mich.-based global
automotive supplier has total debt of about US$3.7 billion,
including the present value of operating leases and underfunded
employee benefit liabilities.
S&P does not currently expect an equity ownership change by
itself to have an effect on Lear's ratings, and we do not expect
to impute any benefit to Lear's rating from ownership by a
higher-rated AREP. Lear's ratings would be placed on
CreditWatch with negative implications if the AREP bid leverages
Lear's balance sheet or if any other bids do the same.
Although Lear has strong market positions, good growth prospects
outside of North America, and fair financial flexibility, its
operating performance has been challenged by severe industry
pressures that caused credit protection measures to weaken in
recent years. Lear reported improved results during 2006,
following very poor performance during 2005 when full-year
EBITDA fell by 35%. Core operating earnings, as defined by Lear
to exclude restructuring costs and special charges, increased by
22% in 2006, but still remain relatively low. Cash from
operating activities, before the net change in accounts
receivable sold but after capital spending, was US$116 million
in 2006, compared with a negative US$419 million in 2005. Free
cash flow guidance for 2007 is US$225 million. Lear's US$1.7
billion revolving credit facility, due March 2010, had no
borrowings under it at year-end. The company has virtually no
debt maturing until after 2009. Lear has agreed to divest its
U.S. interior components operations to a joint venture
controlled by Wilbur Ross, following a similar transaction for
its European business.
Southfield, Mich.-based Lear Corp. (NYSE: LEA) --
http://www.lear.com/-- supplies automotive interior systems and
components. Lear provides complete seat systems, electronic
products, electrical distribution systems, and other interior
products.
Lear also operates in Argentina, Austria, Belgium, Brazil,
Canada, China, Czech Republic, United Kingdom, France, Germany,
Honduras, Hungary, India, Italy, Japan, Mexico, Morocco,
The Netherlands, Philippines, Poland, Portugal, Romania, Russia,
Singapore, Slovakia, South Africa, South Korea, Spain, Sweden,
Thailand, Tunisia, Turkey and Venezuela.
LEAR CORP: Fitch Places Low-B Ratings on Negative Watch
-------------------------------------------------------
Fitch Ratings placed Lear Corp. on Rating Watch Negative:
-- Issuer Default Rating (IDR) 'B';
-- Senior unsecured debt 'B/RR4'.
Fitch's rating action follows Lear's announcement that after
discussions with Carl Icahn, his affiliate, American Real Estate
Partners LP, has made an offer to acquire the company. Lear's
'BB/RR1' rated senior secured revolving credit facility and
senior secured term loan are both unaffected as they contain
'change-of-control' clauses. If an acquisition is completed,
Lear would most likely need to renegotiate an entirely new bank
agreement.
Lear's revolving credit agreement gives the company healthy
liquidity, crucial during the currently volatile environment
being experienced by the industry. However, Fitch is concerned
that as part of an acquisition, the amount of Lear's total debt
could potentially increase, resulting in reduced liquidity and
greater default risk. In addition, if incremental debt were
secured, the position of the senior unsecured debtholders would
be impaired.
The Rating Watch Negative will be resolved following Fitch's
assessment of any resulting changes in Lear's capital structure
and liquidity.
Lear completed financing arrangements during 2006, which ensures
that the company will have good liquidity, relaxed covenants and
no major maturities while restructuring its operations in the
near term. However, Lear faces very difficult conditions in the
U.S. market due to declining domestic manufacturers' production
levels (particularly in the major platforms Lear serves), high
commodity costs and restructuring costs. Lear is a major
seating and interior products supplier to domestic passenger
truck programs that have fallen from consumer favor. New
business wins and reduced capital expenditures should help
support operating results during the restructuring process in
the near term. However, new business backlog after 2007 drops
off substantially. The formation of a joint-venture to which
Lear will contribute its interiors operations is viewed as a
positive due to that unit's operating losses and high capital
expenditure requirements, despite the financial commitments
associated with the agreement.
Southfield, Mich.-based Lear Corp. (NYSE: LEA) --
http://www.lear.com/-- supplies automotive interior systems and
components. Lear provides complete seat systems, electronic
products, electrical distribution systems, and other interior
products.
Lear also operates in Argentina, Austria, Belgium, Brazil,
Canada, China, Czech Republic, United Kingdom, France, Germany,
Honduras, Hungary, India, Italy, Japan, Mexico, Morocco,
The Netherlands, Philippines, Poland, Portugal, Romania, Russia,
Singapore, Slovakia, South Africa, South Korea, Spain, Sweden,
Thailand, Tunisia, Turkey and Venezuela.
LEAR CORP: Moody's Puts Ratings on Review for Possible Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed the long-term ratings of
Lear Corp., corporate family rating at B2, under review for
possible downgrade. The company's speculative grade liquidity
rating of SGL-2 has been affirmed. The action follows
disclosure that American Real Estate Partners LP, an affiliate
of Carl C. Icahn, has made an offer to acquire all of the common
stock of Lear. The offer would value Lear's equity at
approximately US$2.6 billion. Lear has reported that its board
of directors may formally consider the proposal following any
negotiations between the parties. Funds controlled by Mr. Icahn
held approximately 15.77% of Lear's stock following their
investment of US$200 million in newly issued shares during the
fourth quarter of 2006. Mr. Vincent Intrieri represents Mr.
Icahn's interests on Lear's board of directors and is one of 11
members of the board. The review will focus on the prospective
impact to Lear's credit metrics and financial strategies which
may result should a transaction be agreed. In particular, it
will consider the extent of any leverage deployed, the resultant
impact on cash flows, as well as any related terms and
conditions.
Lear's current ratings include a B2 Corporate Family Rating with
a stable outlook and a Speculative Grade Liquidity rating of
SGL-2. US$1 billion of secured bank term loans are rated B2
(LGD-2, 50%) with some US$1.4 billion of unsecured notes rated
B3 (LGD-4, 61%). Change in control provisions under the bank
documentation would be triggered were the transaction to
proceed. Provisions in Lear's US$900 million of new unsecured
notes issued in late 2006 (US$300 million due in 2013 and US$600
million due in 2016) deem funds controlled by Mr. Icahn as a
"Permitted Holder" and would not have a change in control event.
Indentures covering Lear's US$500,000 million of other unsecured
notes would permit a change of control provided Lear is the
surviving corporation and the merger would be with a domestic
corporation. Indentures for the unsecured notes contain
differences in permissible lien baskets and could fare
differently with respect to security arrangements in a
prospective capital structure.
Southfield, Mich.-based Lear Corp. (NYSE: LEA) --
http://www.lear.com/-- supplies automotive interior systems and
components. Lear provides complete seat systems, electronic
products, electrical distribution systems, and other interior
products.
Lear also operates in Argentina, Austria, Belgium, Brazil,
Canada, China, Czech Republic, United Kingdom, France, Germany,
Honduras, Hungary, India, Italy, Japan, Mexico, Morocco,
The Netherlands, Philippines, Poland, Portugal, Romania, Russia,
Singapore, Slovakia, South Africa, South Korea, Spain, Sweden,
Thailand, Tunisia, Turkey and Venezuela.
=============
J A M A I C A
=============
AIR JAMAICA: Fleet Replacement to Cut Costs by USUS$38 Million
--------------------------------------------------------------
Air Jamaica president and chief executive officer Michael Conway
told the Jamaica Gleaner that replacing the Airbus fleet with
Boeing aircraft will reduce costs by more than US$38 million in
two years.
As reported in the Troubled Company Reporter-Latin America on
Feb. 6, 2007, Air Jamaica will change its Airbus fleet to Boeing
757s later this year. Jamaica's Cabinet approved Air Jamaica's
latest business plan. The new strategies discussed in the plan
are aimed at:
-- achieving increased reliability,
-- rationalizing routes,
-- consolidating the airline's administration in Kingston,
-- outsourcing of Air Jamaica Vacations and
-- converting of the current Airbuses to Boeing.
The Gleaner relates that the Cabinet agreed to a US$120-million
financial support for Air Jamaica. A quarter of the amount will
be used for the change of fleet, while US$90 million will be
allotted for operating losses over the transition period.
The report says that Air Jamaica, due to the US$120-million
capital injection into the airline, is predicting a US$40
million increase in earnings from new markets. It is building
out its business-class service with the addition of new seats,
and flying fewer seats on routes to:
-- balance its carrying capacity for passengers and
cargo, and
-- to manage its big ticket cost for jet fuel.
According to The Gleaner, Air Jamaica will lease nine 737-300
and six 757-200 Boeing aircraft.
Mr. Conway told The Gleaner that Boeing was prepared to give
Jamaica a good deal on the 15 new aircraft. It was a chance for
the plane maker to set up a model for other airlines wanting to
switch from Airbus.
However, the technicians alleged that the new fleet was unable
to fly beyond 1,400 nautical miles. They also said that the
planes weren't as fuel-efficient as the Airbus, which has a
longer range, The Gleaner notes.
Mr. Conway told The Gleaner, "That's not true. The airplane has
a range of over 2,000 nautical miles [and] has the range to fly
any route we fly with the exception of London and Los Angeles."
Mr. Conway said that the 757-200 has more range and more payload
capacity than the A320, The Gleaner says, according to the
report.
Mr. Conway commented to The Gleaner, "That (payload capacity) is
what is critical throughout the Caribbean [where] people don't
just fly, they move with the amount of luggage which they have."
Mr. Conway explained to The Gleaner that it was just normal for
Air Jamaica to leave up to 100 pieces of luggage behind on full
Airbus A320 flights from the Northeast US to Grenada and
Jamaica. He said, "But we don't intend to fill the 757 with 220
seats -- that's a bit cramped. We intend to carry 190 seats
[which] will allow us to carry even more luggage. It will burn
about 5% more fuel than its counterpart -- but in our view that
is more than made up for the range and payload."
The reorganization of Air Jamaica's fleet, estimated to cost
about US$30 million over the next two years, will save about
US$22.5 million in maintenance costs and US$16 million in
ownership cost, Mr. Conway commented to The Gleaner.
Mr. Conway told The Gleaner, "The fleet transition cost is half
of the solution to the US$100 million annual loss of the
airline."
Through the improvement in reliability and on-time performance,
Air Jamaica will improve its turnover by 10% in a year or two.
The business plan aims to make Air Jamaica self-sufficient by
2009, The Gleaner says, citing Mr. Conway.
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in
1994. The Jamaican government does not plan to own Air Jamaica
permanently.
* * *
On July 21, 2006, Standard & Poor's Rating Services assigned B
long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, is based on the government's
unconditional guarantee of both principal and interest payments.
GOODYEAR TIRE: Operations Back to Normal After Warehouse Fire
-------------------------------------------------------------
Executives of Goodyear Jamaica Ltd., The Goodyear Tire & Rubber
Co.'s Jamaican subsidiary, told the press that operations at the
firm were back to normal after a fire at its distribution and
sales center in January.
As reported in the Troubled Company Reporter-Latin America on
Jan. 30, 2007, a fire at Goodyear Tire stopped operations at its
distribution center in Kingston, Jamaica. Investigators had not
yet determined the cause of the fire. Damien Satterthwaite --
Goodyear Tire's consumer tire manager in Jamaica -- said that
the company relocated its administrative and sales office to 248
Spanish Town Road after a fire destroyed its distribution center
at 230 Spanish Town Road. However, Goodyear Jamaica said that
the recent fire at its Spanish Town Road warehouse won't
negatively affect the firm's strategic and performance
objectives for this year.
The Jamaica Observer relates that the Goodyear Tire managers
pointed to the price sensitive nature of the local tyre market
as the firm's biggest challenge in moving forward.
Goodyear Jamaica general manager Steven Miller told The
Observer, "We are ramping up to full strength after the fire on
January 11th."
Mr. Miller refused to tell The Observer the dollar value of the
loss or the number of tyres that were destroyed in the fire,
citing competitive reasons.
Mr. Miller told The Observer, "We were able to get back on
stream so quickly because we had tyres on route to Jamaica. On
January 10th, we complained that the shipment from our
manufacturing plant in Brazil was taking too long to arrive in
Jamaica. On January 11th, we were so happy that the shipment
from our manufacturing plant in Brazil was taking too long to
arrive in Jamaica."
According to The Observer, Mr. Miller praised Goodyear Tire for
Goodyear Jamaica's speedy recovery. He commented, "I am more
proud today to be affiliated with Goodyear than in the four
years that I have been with the company. Our parent came to our
aid and ensured that our ability to deliver the product was not
compromised."
Mr. Miller told The Observer that the tyre market in Jamaica was
interesting. He said, "This market has low barriers of entry.
Anyone can come in with a container of tyres and start selling."
Goodyear Jamaica was the Caribbean nation's sole tyre
manufacturer that provided protection of its market share and
created a high barrier to entry for other tyre distributors,
according to The Observer.
Mr. Miller told The Observer that since 1997 when Goodyear
Jamaica closed its factory in St Thomas, the firm has seen a
steady decline in its market share. Currently there is a
saturation of products in the market.
"The Jamaican market is very price sensitive and there needs to
be marketing to separate the brand from our competitors; if not,
then price becomes the differentiator," Mr. Miller commented to
The Observer.
Mr. Miller explained to The Observer that Goodyear Jamaica will
be working with its re-sellers to improve their profile. He
said, "We will help our strategic partners who sell tyres to
expand because that is good for our business. Goodyear means
something to people. We need to continue to build the brand
equity and provide a rationale for why consumers should buy the
product. Most people perceive a tyre as a round black rubber
thing; but a tyre is in fact, a fine-tuned machine. We will
take this message along with the strength of our brand name
Goodyear across Jamaica."
The Observer underscores that Goodyear Jamaica's net profit for
the nine months ending Sept. 30, 2006, decreased 55% to
US$23.813 million, compared with the US$52.97 million earned
during the same period in 2005.
Goodyear Jamaica's revenues increased 12% to J$965.87 million
for the nine-month period ending September 2006, compared with
J$864.73 million for the same period in 2005, The Observer
states.
Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company
(NYSE: GT) -- http://www.goodyear.com/-- is the world's largest
tire company. The company manufactures tires, engineered rubber
products and chemicals in more than 90 facilities in 28
countries. Goodyear Tire has marketing operations in almost
every country around the world including Chile, Colombia,
Guatemala and Peru in Latin America. Goodyear employs more than
80,000 people worldwide.
* * *
As reported in the Troubled Company Reporter on Jan. 9, Fitch
Ratings affirmed its ratings on Goodyear Tire & Rubber Co. and
removed them from Rating Watch Negative where they were placed
on Oct. 18, 2006, when the company announced a US$975 million
drawdown of its bank revolver. Fitch affirmed Goodyear's Issuer
Default Rating at B. Fitch said the Rating Outlook is Negative.
MAAX HOLDINGS: Posts 5.9% Sales Decrease in 2007 3rd Fiscal Qtr.
----------------------------------------------------------------
In its quarterly financial results for the third quarter ended
Nov. 30, 2006, MAAX Holdings Inc. had net sales for the third
quarter of fiscal year 2007 decreased 5.9% to US$113.2 million
from net sales of US$120.3 million for the third quarter of
fiscal year 2006.
Operating income for the fiscal 2007 third quarter decreased by
US$5.7 million, or 86%, from US$6.7 million in the third quarter
of fiscal year 2006 to US$1 million in the third quarter of
fiscal year 2007.
Performance in Individual Sectors
Net sales decreased by US$5.6 million, or 5.2% in our Bathroom
sector, compared with the third quarter of fiscal 2006, to reach
US$101.4 million. The company's third quarter results have been
impacted by a noticeable slowdown in housing construction
activities in the United States, which has been partly offset by
new products introduction and sale price increases. Sales were
also favorably impacted by the stronger Canadian dollar.
Operating income for the company's Bathroom Sector decreased by
US$7 million to US$1.4 million for the third quarter of fiscal
2007, due mainly to lower revenues combined with an increase in
freight and raw materials costs, primarily oil-based commodities
and aluminum.
Sales from the company's Spa Sector were impacted by weak market
conditions in the third quarter. Net sales decreased US$1.5
million or 11% to US$11.8 million for the third quarter of
fiscal 2007. Operating loss improved by US$1.3 million, to
US$0.4 million for the third quarter of fiscal 2007 in spite of
lower revenues. The company recorded US$1.1 million of
restructuring expenses last year in relation with the closure of
our plant in Beamsville and the consolidation of our production
at our Chandler, Arizona facility.
Financial position
Free cash flow for the third quarter of fiscal year 2007 and
for the nine months ended Nov. 30, 2006 were US$17.8 million and
US$1.5 million compared with US$10.7 million and US$36.8
million, respectively, for the same periods last year. The
improvement in cash flow in the third quarter results mainly
from a lower investment in working capital due to seasonal
factors as well as specific initiatives undertaken to improve
the company's working capital. The decrease for the nine months
ended Nov. 30, 2006, resulted principally from a lower
contribution of working capital, the expiration of our foreign
exchange forward contracts and the company's lower
profitability. Total net debt of US$463.4 million as of
Nov. 30, 2006 increased from Feb. 28, 2006 levels of
US$457.1 million.
Exit of the Kitchen Cabinetry Sector
On Aug. 31, 2006, the company announced its plan to exit the
Cabinetry sector by the sale of all its assets. Currently,
substantially all of the long-lived assets and intangible assets
of the sector were sold. The company is now reporting its
Cabinetry sector as discontinued operations.
Subsequent Event
On Jan. 9, 2007, MAAX Corporation, Beauceland and certain
subsidiaries of Beauceland entered into a Credit and Guaranty
Agreement with Brookfield Bridge Lending Fund Inc., as agent and
lender, and the other lenders signatory thereto from time to
time. The New Credit Agreement provides for a US$175 million
term loan and a US$40 million revolving credit facility, which
will provide for ongoing working capital requirements and for
general corporate purposes. MAAX used amounts borrowed under
the New Credit Agreement to repay in full amounts owed to the
lenders under MAAX's senior secured credit facility.
In connection with the consummation of the transactions
contemplated by the New Credit Agreement, MAAX paid a commitment
fee to the lenders in the amount of US$4.3 million, incurred
approximately US$1.4 million of related fees and will expense
previously recorded financing costs related to MAAX's senior
secured credit facility in an amount equal to approximately
US$4.2 million.
Amounts borrowed under the New Credit Agreement will mature in
June 2009. Interest on loans denominated in Canadian dollars
will bear interest in an amount equal to the Canadian Dollar
bankers' acceptance rate plus 4.35% per year, and will be
payable monthly. Interest on loans denominated in U.S. dollars
will bear interest at a rate based on a LIBOR rate plus 4.35%
per year, and will be payable monthly.
About MAAX Holdings
MAAX Holdings, Inc. -- http://www.maax.com/-- is a manufacturer
of bathroom products and spas for the residential housing
market. The company's products are available through plumbing
wholesalers, bath and spa specialty boutiques and home
improvement centers. The company currently operates 24
manufacturing facilities and independent distribution centers
throughout North America and Europe. The company has operations
in Jamaica and Puerto Rico.
MAAX Corp. is a subsidiary of Beauceland Corp., itself a wholly
owned subsidiary of MAAX Holdings, Inc.
* * *
As reported in the Troubled Company Reporter on Jan. 18, 2007,
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Quebec-based bathroom fixtures
manufacturer MAAX Holdings Inc. to 'CCC-' from 'CCC+'.
At the same time, Standard & Poor's lowered its rating on the
company's senior discount notes to 'CC' from 'CCC-'. The long-
term corporate credit rating on MAAX's subsidiary, MAAX Corp.,
was also lowered to 'CCC-' from 'CCC+'.
In addition, Standard & Poor's withdrew its 'CCC+' bank loan
rating, with a recovery rating of '3', on MAAX Corp.'s secured
bank facilities because they were repaid, and lowered the long-
term debt rating on the subsidiary's senior subordinated debt
notes to 'CC' from 'CCC-'.
S&P said the outlook is negative.
SUGAR COMPANY: Government Assumes Firm's Debt
---------------------------------------------
The Jamaican government has assumed the debts of the Sugar
Company of Jamaica, Radio Jamaica reports, citing Robert Levy,
the firm's chairperson.
Mr. Levy told Radio Jamaica that he received a letter from the
minister of finance, saying that the ministry will take control
of the debt obligations of the Sugar Company.
According to Radio Jamaica, the move is aimed at allowing the
Sugar Company to attain profitability with:
-- its new thrust on efficiency,
-- improved farming practices, and
-- increased production.
Mr. Levy told the Jamaica Information Service that encouraging
signs for the industry include:
-- transformation in the infrastructure at the
Monymusk factory,
-- improved production levels at the Frome factory,
and
-- decision of the governor-general to visit the Frome
factory on his first visit to entities within the
productive sector.
Mr. Levy commented to the Jamaica Information that he was
positive about the future of the Sugar Company with all major
debts out of the way. The government's gesture was very
important, as it has given the company an opportunity to move
forward.
With the debts cleared, the Sugar Company should be back to
profitability by the end of the 2008/2009 sugar crop, Radio
Jamaica says, citing Mr. Levy.
Sugar Company of Jamaica registered a net loss of almost US$1.1
billion for the financial year ended Sept. 30, 2005, 80% higher
than the US$600 million reported in the previous financial year.
Sugar Company blamed its financial deterioration to the
reduction in sugar cane production.
* JAMAICA: Government May Provide Financial Support to Hotels
-------------------------------------------------------------
The Jamaican government could be asked to provide financial
support to hotels that incur losses due to the effects of the
"Caricom Special Visa regime", Radio Jamaica reports, citing
Horace Peterkin, the president of the Jamaica Hotel and Tourist
Association.
Under the Caricom Special Visa, travelers from several nations
will need visas to visit Caricom countries. This is part of
preparations for next month's staging of Cricket World Cup,
Radio Jamaica notes.
Mr. Peterkin told Radio Jamaica that with the sector set to lose
almost US$2 billion in revenues due to cancellations, hotel
owners are considering asking the government for assistance.
Tourism officials feared that the visa requirement will
discourage travelers from visiting Jamaica, Radio Jamaica
states.
* * *
On May 26, 2006, Moody's Investors Service upgraded Jamaica's
rating under a revised foreign currency ceiling:
-- Long-term foreign currency rating: Ba3 from B1 with
stable outlook.
===========
M E X I C O
===========
ADVANCED MARKETING: Has Until March 9 to File Schedules
-------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court
for the District of Delaware extended the time within which
Advanced Marketing Services Inc. and its debtor-affiliates must
file their Schedules and Statements under Rule 1007 of the
Federal Rules of Bankruptcy Procedure, through and including
March 9, 2007.
As reported in the Troubled Company Reporter on Jan. 24, 2007,
the Debtors asked the Court to extend to Mar. 29, 2007, the
deadline for them to file:
-- schedules of assets and liabilities;
-- a schedule of current income and expenditure;
-- a schedule of executory contracts and unexpired leases;
and
-- a statement of financial affairs.
Under Rule 1007(b) of the Federal Rules of Bankruptcy Procedure
and Rule 1007-1(b) of the Local Rules of Bankruptcy Practice and
Procedure of the U.S. Bankruptcy Court for the District of
Delaware, the Debtors are required to file their Schedules and
Statements within 30 days after they file for bankruptcy.
Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, told the Judge Sontchi that because
of the substantial size and scope of the Debtors' business, the
complexity of their financial affairs, the limited staffing
available to perform the required internal review of their
accounts and affairs, and the press of business incident to the
commencement of their cases, the Debtors were unable to
assemble, prior to the Petition Date, all of the information
necessary to complete and file the Schedules and Statements.
The Debtors will not be in a position to complete the Schedules
and Statements within the time specified in Bankruptcy Rule 1007
and Local Rule 1007-1(b), Mr. Heath related. Completing the
Schedules and Statements for each of the Debtors, Mr. Heath
explains, will require the collection, review and assembly of
information from multiple locations throughout the United
States.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services,
Inc. -- http://www.advmkt.com/-- provides customized
merchandising, wholesaling, distribution and publishing
services, currently primarily to the book industry. The company
has operations in the U.S., Mexico, the United Kingdom and
Australia and employs approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group
Incorporated and Publishers Group West Incorporated filed for
chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos.
06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K.
Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers,
LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq.,
Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards,
Layton & Finger, P.A., represent the Debtors as Local Counsel.
When the Debtors filed for protection from their creditors, they
listed estimated assets and debts of more than US$100 million.
The Debtors' exclusive period to file a chapter 11 plan expires
on Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No.
4; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
ADVANCED MARKETING: Panel Objects to Wells Fargo DIP Financing
--------------------------------------------------------------
The Official Committee of Unsecured Creditors and Simon &
Schuster Inc. contend the DIP Facility offers no benefit to
Advanced Marketing Services Inc. and its debtor-affiliates and
would only serve to improve the secured lenders' position.
As reported in the Troubled Company Reporter on Jan. 10, 2007,
the Court authorized the Debtors, on an interim basis, to dip
their hands into the DIP financing facility arranged by Wells
Fargo Foothill.
The Committee also asserts that the DIP Facility effectuates
cross-collateralization of pre- and postpetition debt. The
Committee wants denied the proposed payment of the prepetition
obligations first from the proceeds of Wells Fargo Foothill's
collateral.
Causes of action under Section 549 of the Bankruptcy Code should
also be excluded from Foothill's collateral, the Committee
suggests.
The Committee also wants more time to review the extent,
validity and priority of the prepetition lenders' liens, as well
as any claims against the lenders. The Committee says the 60-
day probe period in the DIP Motion is too short. The Committee
also wants equal access to information.
Simon & Schuster says if the Interim DIP Order becomes a final
order, unsecured creditors will be irreparably harmed and unduly
prejudiced. Representing Simon & Schuster, Craig A. Wolfe,
Esq., at Kelley Drye & Warren LLP, in New York, says unsecured
creditors stand to lose the most in the Debtors' cases. He
explains that the DIP Loan Facility provides no real benefit to
the Debtor and is simply a mechanism for the senior lenders to
force a quick liquidation of Debtor's businesses while being
paid substantial fees in the process.
Simon & Schuster sold books and multimedia products to the
Debtor. It asserts a US$26,000,000 prepetition clam against the
Debtor.
During the 45-day period prior to the Dec. 29, 2006, Simon &
Schuster delivered goods aggregating US$5,105,629, including
US$2,146,126 in goods delivered within 20 days before Debtor's
bankruptcy filing.
LearningExpress LLC objects to the DIP Financing Motion to the
extent that the Debtors' request:
(a) seeks to eliminate its rights of set-off and recoupment
on account of amounts the Debtors owe against amounts
LearningExpress owes to the Debtors;
(b) grants the Debtors' lenders right, title or interest in
LearningExpress' books, any of its copyrights, trademarks
and intellectual property rights or the proceeds of sale
of its books; and
(c) impairs its reclamation rights.
LearningExpress is a party to a September 2004 marketing and
distribution agreement with Advanced Marketing Services Inc.,
and Publishers Group West Incorporated. LearningExpress is also
a borrower under a prepetition loan agreement with PGW.
Representing LearningExpress, Michael E. Foreman, Esq., at
Proskauer Rose LLP, in New York, relates that as of the Petition
Date, PGW owes LearningExpress approximately $167,000 on account
of book sales. In addition, PGW is holding LearningExpress'
books with estimated market value of US$2,000,000 to
US$2,500,000.
Rich Publishing says the Debtors' request is unclear regarding
any effort by the Debtors' senior secured lender to obtain or
assert a lien against the books PGW holds under their bailment
arrangement. Rich Publishing is a party to a marketing and
distribution agreement with PGW. It asserts a US$4,500,000
claim against PGW.
Rich Publishing, hence, wants any order approving the Debtors'
request to recognize that Rich Publishing retains title to all
of its books in PGW's possession and no lien or interest granted
to the Debtors' lenders extends to or includes Rich Publishing's
books or intellectual property in PGW's possession.
Avalon Publishing, Inc., supplies books and other items to PGW
under an April 2006 Marketing and Distribution Agreement.
Avalon holds a US$3,900,000 prepetition claim and an
unliquidated administrative priority claim against PGW.
Representing Avalon, Mark Minuti, Esq., at Saul Ewing, LLP, in
Wilmington, Delaware, asserts that any of Avalon's products in
the Debtors' possession, or coming into their possession, should
not be subject to any lien, claim or encumbrance in favor of the
Senior Lenders or their agent under the Debtors' existing loan
documents.
Carus Publishing Group also has a marketing and distribution
deal with PGW. Carus also wants any final order approving the
Debtors' request to reflect that the Debtors have no lien or
ownership interest in Carus' books, and the Books remain
property of Carus free of any claim of the Debtors' Lenders.
Meredith Corp. and Leisure Arts, Inc., ask the Court that any
Final Order entered with respect to the DIP Motion must make
clear that each of their set-off, recoupment and reclamation
rights remain preserved and unimpaired.
Meredith and Leisure assert that the Debtors:
(a) may not be permitted to prime or impair their set-off and
recoupment rights; and
(b) seek effectively to prime their right to reclaim their
reclamation goods even though their rights in the
reclamation goods are prior to the rights of the
postpetition lender.
Nowhere in the DIP Motion or proposed final order, Meredith
says, do the Debtors propose to reserve the set-off rights.
Foothill Responds
Wells Fargo Foothill Inc., as agent to the Debtors' DIP Lenders,
tells Judge Sontchi that the Debtor and PGW creditors
erroneously argue that the DIP Facility provides the Debtors
with no availability.
Foothill points out that the Debtors enjoy sufficient liquidity
and availability as a result of -- and only because of -- the
DIP Facility. Moreover, the DIP Facility does not improve the
lender's position in any way, Foothill attests.
Foothill clarifies that the DIP Facility does not effectuate
cross-collateralization of pre- and postpetition debt because it
does not secure prepetition debt with postpetition assets.
Foothill also notes that the payment of the Debtors' prepetition
obligations first from the proceeds of the collateral is a
common feature of postpetition financing, particularly in large
complex Chapter 11 bankruptcies.
The practice, which is referred to as a "roll-up," Foothill
says, makes sense:
-- on a practical level, the first proceeds coming to
foothillpostpetition are in fact proceeds of prepetition
collateral; and
-- roll-ups are typically approved where the secured creditor
is oversecured because there is no harm to other creditors
and no preferential benefit to the secured creditor.
Foothill says the Court may impose any remedy, including
disgorgement, if it turns out that Foothill is not oversecured.
With regard to the Qualified Transaction Timeline, Foothill says
it is merely the tail end of a very long and intensive process
in which the Debtors attempted to accomplish a strategic
transaction to resolve significant financial and operational
issues. The Debtors, Foothill points out, have for more than
six months actively pursued buyers, refinancings and other deals
-- to no avail.
Foothill says it is willing to provide some flexibility in the
timeline.
Foothill also insists that its limited liens on avoidance
actions and on recoveries under Section 549 are reasonable.
That DIP provision, Foothill explains, is designed to protect it
in the event it makes payments on account of the Professional
Fee Carve Out, and then comes up short after the liquidation of
collateral. The provision, Foothill says, protects against
professionals obtaining a windfall at Foothill's expense in the
form of the carve out plus, as administrative claimants, the
proceeds of avoidance actions.
Foothill agrees that whatever rights to setoff or recoupment the
vendors have should be retained. However, Foothill notes that
Section 9-404 of the Uniform Commercial Code addresses the
relative priorities between a secured creditor and the holder of
a setoff right. A security in an account is subject to the
right of an account debtor to setoff against the account, but
only if that right accrued before the account debtor received
authenticated notice of the security interest in the account.
Foothill believes that most, if not all, of the Debtor's
creditors received that notice, eliminating the seniority of
their setoff rights.
Foothill also reminds Judge Sontchi that in asset-based lending,
the concept of eligible inventory, or inventory included in the
borrowing base, is typically a smaller subset of inventory
collateral. Hence, if PGW's transactions with its vendors are
true bailments, Foothill says its security interest likely does
not attach to the books.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services,
Inc. -- http://www.advmkt.com/-- provides customized
merchandising, wholesaling, distribution and publishing
services, currently primarily to the book industry. The company
has operations in the U.S., Mexico, the United Kingdom and
Australia and employs approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group
Incorporated and Publishers Group West Incorporated filed for
chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos.
06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K.
Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers,
LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq.,
Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards,
Layton & Finger, P.A., represent the Debtors as Local Counsel.
When the Debtors filed for protection from their creditors, they
listed estimated assets and debts of more than $100 million.
The Debtors' exclusive period to file a chapter 11 plan expires
on Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No.
4; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
ASARCO: Files Suit Against Grupo Mexico to Recover SPCC Asset
-------------------------------------------------------------
In 1999, Grupo Mexico, S.A. de C.V., purchased all of ASARCO
LLC's stocks in a leveraged buy-out. ASARCO believes that Grupo
Mexico caused the LBO to obtain control of ASARCO's 54.2%
ownership of Southern Peru Copper Corp., now known as Southern
Copper Corp., G. Irvin Terrell, Esq., at Houston, Texas,
alleges.
ASARCO's entire board of directors was replaced and a new
executive management consisting of individuals affiliated with
Grupo Mexico was installed.
After the LBO, Grupo Mexico directed the sale of ASARCO's
chemical and aggregates subsidiaries. Mr. Terrell says the
chemical and aggregates subsidiaries have been consistent
sources of revenues for ASARCO because they were unaffected by
the cyclical copper market. Proceeds of the sales were used to
pay US$817,000,000 of acquisition debt that Grupo Mexico has
guaranteed.
In October 2000, Grupo Mexico formed Americas Mining
Corporation, ASARCO's parent company, and began planning for the
transfer of SPCC from ASARCO to AMC.
A September 2000 valuation performed by PricewaterhouseCoopers,
LLC, found that the 54.2% SPCC ownership interest was worth
US$978,586,000, Mr. Terrell says, but Grupo Mexico does not want
to pay more than a billion for the SPCC shares. Thus, Grupo
Mexico obtained another valuation from Houlihan Lokey Howard &
Zukin finding that the value of the SPCC shares is at least
US$720,000,000.
In late 2001, Grupo Mexico and AMC proposed to restructure
ASARCO's finances by purchasing the SPCC shares for
US$100,000,000 and assuming US$350,000,000 of ASARCO's debt; the
transaction known as the related-party transaction.
ASARCO was desperate for cash throughout 2000 and 2001 and began
selling its assets, often to Grupo Mexico and AMC affiliates,
Mr. Terrell tells the Court. ASARCO also began to monetize
insurance policies covering its environmental liabilities and
the toxic/tort asbestos liability of its subsidiaries for less
than what they were worth. The company did not use the funds
from the insurances solely to settle its asbestos and
environmental claims and pay defense costs; it used substantial
portions of those funds for current operations, like making
payroll; leaving the company and its subsidiaries unprotected
against future claims.
In December 2001, Grupo Mexico and AMC directed ASARCO to redeem
US$50,000,000 of bonds at par. ASARCO did not have funds
available to redeem the bonds, so Grupo Mexico provided a
US$42,000,000 "advance" on its purchase of SPCC.
By April 2002, ASARCO could not obtain a solvency opinion,
making the transfer of the SPCC shares even more vulnerable to a
fraudulent transfer, Mr. Terrell contends. Grupo Mexico and AMC
began planning on a US$600,000,000 price.
Grupo Mexico and AMC directed ASARCO to engage Ernst & Young
Corporate Finance to provide valuation that might be used to try
to defend the related-party transaction. ASARCO also employed
Squire Sanders as restructuring counsel. Squire Sanders and E&Y
advised ASARCO that it would be best for it to file a bankruptcy
petition and make SPCC collateral for its DIP Financing, and
await the return of copper prices.
In August 2002, the United States Department of Justice filed a
lawsuit to enjoin ASARCO's transfer of the SPCC shares. ASARCO
settled the DOJ Lawsuit by agreeing that US$100,000,000 from the
proceeds of the SPCC Sale would fund an environmental trust.
ASARCO's decision to sell SPCC was also driven by concern that
SPCC was going to end up in the hands of ASARCO's creditors if
it did not sell, Mr. Terrell further contends.
The sale of SPCC stock was said to have a nominal value of
US$765,000,000; Mr. Terrell, however, relates that ASARCO was
not to receive a nickel of immediately available funds to
continue operations:
-- US$450,000,000 would go to retire the credit facility
guaranteed by Grupo Mexico as part of the 1999 LBO;
-- US$100,000 was earmarked for the environmental trust;
-- US$42,000,000 of intercompany debt forgiveness to Grupo
Mexico yielded no cash; and
-- the remaining US$50,000,000, as well as US$50,000,000
raised from monetizing insurance policies, was used to
retire ASARCO's US$100,000,000 7-3/8% bonds due 2003,
known as the Yankee Bonds.
E&Y has advised ASARCO that paying the Yankee Bonds would result
in the company having a projected negative cash balance of
US$158,000,000 in December 2003. Had E&Y been provided with
figures that reflected typical operations, the projected cash
deficit would have been much larger, Mr. Terrell asserts.
In one of the restructuring committee meeting in January 2003,
Genaro Larrea, director of Grupo Mexico and AMC and then
president of ASARCO, promised to get updated numbers to E&Y
reflecting "improved copper prices." Mr. Larrea also revealed
that Inbursa, the bank that provided Grupo Mexico and AMC with
financing for the SPCC purchase, was requiring, as a condition
to lending funds to AMC, that ASARCO pay the Yankee Bonds at par
with interest. Inbursa is owned by Carlos Slim, a close
associate of Grupo Mexico's principals, Mr. Terrell tells the
Court.
Squire Sanders has advised the restructuring committee that
ASARCO'S directors had a duty to preserve the value of the
corporation's assets for the benefit of all creditors. If
payment of the Yankee Bonds jeopardized ASARCO's ability to
continue its operations, the directors and the company would
have breached their duties, Squire Sanders stated.
In March 2003, ASARCO proceeded to close the transaction by
transferring the SPCC shares to AMC.
After the transfer of the SPCC stocks to AMC, Mr. Larrea and all
other ASARCO director who approved the transfer resigned.
Mr. Terrell asserts that ASARCO transferred the SPCC shares with
the intent to hinder, delay, and defraud its creditors. ASARCO
did not receive equivalent value for the SPCC shares. The
shares were worth more than what AMC paid for.
In addition, the transfer deprived ASARCO of assets that have
been appreciated in value since the date of the transfer as a
result of the increase in the price of copper.
If the sale to AMC is set aside, ASARCO believes that it may use
its interests in the Southern Peru mines to successfully plan
and complete its reorganization.
ASARCO asserts that:
(a) The transfer of the SPCC shares was a fraudulent transfer
of actual intent. The transfer was made with the actual
intent to hinder, delay and defraud ASARCO's creditors
and it harmed the company.
(b) The transfer of the SPCC shares was a constructive
fraudulent transfer. The transfer was made at a time
while ASARCO was engaged or was about to engage in a
business or a transaction for which any property
remaining with it was unreasonably small in relation to
the business or transaction; or intended to incur debts
beyond its ability to pay as they become due. ASARCO
received less than reasonably equivalent value in
exchange for making the transfer. ASARCO did not receive
fair consideration for the SPCC shares.
Hence, ASARCO further asserts that pursuant to Section 550(a) of
the Bankruptcy Code, it is entitled to avoid the transfer of the
SPCC shares to AMC and recover them. ASARCO also asserts that
it is entitled to 54.2% of the dividends paid by SPCC since the
fraudulent transfer.
Accordingly, ASARCO asks the Court to enter a judgment in its
favor:
a) declaring that the transfer of the SPCC shares is void;
b) directing AMC to immediately return the SPCC stock;
c) setting aside and canceling all documents evidencing the
transfer of the stock from ASARCO to AMC;
d) awarding money damages to ASARCO for the dividends it
would have received on fraudulently transferred SPCC
stock; and
e) awarding its attorneys' fees, interests and costs to the
fullest extent permitted by law.
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/
-- is an integrated copper mining, smelting and refining
company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate
parent. The Company filed for chapter 11 protection on
Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R.
Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq.,
at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby
A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its
restructuring efforts. Lehman Brothers Inc. provides the ASARCO
with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the
Official Committee of Unsecured Creditors and David J. Beckman
at FTI Consulting, Inc., gives financial advisory services to
the Committee. When the Debtor filed for protection from its
creditors, it listed US$600 million in total assets and US$1
billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products
Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada,
Ltd. Details about their asbestos-driven chapter 11 filings
have appeared in the Troubled Company Reporter since
Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304),
Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex.
Case No. 05-21346) also filed for chapter 11 protection, and
ASARCO has asked that the three subsidiary cases be jointly
administered with its chapter 11 case. On Oct. 24, 2005,
Encycle/Texas' case was converted to a Chapter 7 liquidation
proceeding. The Court appointed Michael Boudloche as
Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt,
Esq., and John Vardeman, Esq., at Law Offices of Michael B.
Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for chapter 11
protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court
for the Southern District of Texas in Corpus Christi had
extended the Debtors' exclusive period to file a plan of
reorganization until April 6, 2007, and their exclusive period
to solicit acceptances of that plan until June 6, 2007.
BEARINGPOINT: Providing Update on 4th Quarter Results on Feb. 13
----------------------------------------------------------------
BearingPoint, Inc., will hold an investor meeting on
Feb. 13, 2007, at 8 a.m. ET at Hilton Hotel, 1335 Ave. of the
Americas, New York City.
BearingPoint's CEO, Harry You, stated, "I look forward to
updating our shareholders on the progress we have made in our
business during the past several months as well as our plans to
become current in 2007. I am pleased that our fourth quarter
2006 metrics continue to demonstrate momentum in the marketplace
and reflect progress against our growth objectives."
Highlights of BearingPoint's fourth quarter 2006 performance
include:
* Bookings were US$699 million in the fourth quarter of this
year, bringing total bookings for the full year 2006 to
US$3.1 billion;
* Voluntary total employee turnover was 21%, down from 28% in
the third quarter 2006;
* Total workforce utilization was 77.4%, up from 77.2% in the
third quarter 2006; and
* Billable headcount for the fourth quarter of 2006 stood at
approximately 15,300, unchanged from the third quarter of
2006.
In addition, cash balances as of Dec. 31, 2006, were
approximately US$389 million. Year-end cash balances were
positively impacted by significant improvements in cash
collections and timing of payment of certain outstanding year-
end obligations.
At its investor meeting, the company will also update its
shareholders on a number of other topics, including additional
highlights of its 2006 financial performance, expected sources
and uses of cash for the first quarter of 2007, and recently
approved equity and cash compensation plans for its managing
directors and other high-performing senior-level employees.
Headquartered in McLean, Virginia, BearingPoint, Inc., (NYSE:
BE) -- http://www.BearingPoint.com/-- provides of management
and technology consulting services to Global 2000 companies and
government organizations in 60 countries worldwide. The firm
has approximately 17,500 employees, and major practice areas
focusing on the Public Services, Financial Services and
Commercial Services markets.
BearingPoint has global locations in Australia, Austria, Brazil,
China, France, India, Indonesia, Japan, Mexico, Portugal,
Singapore, Thailand, and the United Kingdom, among others.
* * *
As reported on Oct. 11, 2006, Moody's downgraded and placed
BearingPoint's ratings on review for further possible downgrade:
* Corporate Family Rating --downgraded to B2 from B1
* US$250 million series A subordinated convertible bonds due
2024 --downgraded to B3 from B2
* US$200 million series B subordinated convertible bonds due
2024 --downgraded to B3 from B2.
HERBALIFE: S&P Puts Corp. Credit Rating on Watch on Whitney Bid
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'BB+' corporate credit rating, on Los Angeles-based
Herbalife International Inc. on CreditWatch with negative
implications. These actions followed Herbalife's announcement
that it had received an offer from Whitney V L.P. to acquire the
company for US$38 per share in cash.
The proposed transaction, totaling about US$2.7 billion to
purchase Herbalife's equity, would be funded in part through the
issuance of US$2 billion of new debt and result in a highly
leveraged capital structure.
"Although the company is currently carrying minimal debt
leverage, existing debt capacity would be stretched well beyond
the limits of the current ratings if the proposed transaction
closes," said Standard & Poor's credit analyst John Thieroff.
Herbalife Ltd. (NYSE: HLF) -- http://www.herbalife.com/--
Herbalife, now in its 26th year, conducts business in 62
countries. The company does business with several manufacturers
worldwide and has its own manufacturing facility in Suzhou,
China as well as major distribution centers in Venray,
Netherlands, Japan, Los Angeles, Calif., Memphis, Tenn., and
Guadalajara, Mexico.
HOME PRODUCTS: Panel Wants Fried Frank as Lead Bankruptcy Atty.
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Home
Products International Inc. and Home Products International-
North America Inc.'s bankruptcy cases asks the Honorable
Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware to retain Fried, Frank, Harris, Shriver &
Jacobson LLP as its bankruptcy counsel, nunc pro tunc
Jan. 3, 2007.
The Committee also asks the Court to retain Pachulski Stang
Ziehl Young Jones & Weintraub LLP as its local counsel. Fried
Frank and Pachulski Stang will ensure that there is no
unnecessary duplication of efforts.
Fried Frank will:
a. provide legal advice with respect to the Official
Committee's rights, powers, and duties in the Debtors'
chapter 11 cases;
b. assist the Official Committee in its analysis and
negotiation of any plan of reorganization and related
corporate documents;
c. review, analyze, and advise the Official Committee with
respect to documents filed with the Court and respond on
behalf of the Official Committee to any and all
applications, motions, answers, orders, reports, and other
pleadings in connection with the administration of the
Debtors' estates in their chapter 11 cases; and
d. perform any other legal services requested by the Official
Committee in connection with their chapter 11 cases and
the confirmation and implementation of a plan of
reorganization in their chapter 11 cases.
Gary L. Kaplan, Esq., a partner at Fried, Frank, Harris, Shriver
& Jacobson, disclosed that the firm's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Brad Eric Scheler, Esq. Partner US$995
Gary L. Kaplan, Esq. Partner $650
Jennifer Rodburg, Esq. Associate $525
Adrian Feldman, Esq. Associate $445
Katie Dang, Esq. Associate $315
Michael Birnbaum Legal Assistant $185
Mr. Kaplan assures the Court that the firm does not represent or
hold any interest adverse to the Debtors or their estates and is
disinterested pursuant to Section 101(14) of the Bankruptcy
Code.
About Home Products
Headquartered in Chicago, Illinois, Home Products International,
Inc. -- http://www.hpii.com/-- designs, manufactures, and
markets ironing boards, covers, and other high-quality, non-
electric consumer houseware products. The Debtor's product
lines include laundry management products, bath and shower
organizers, hooks, hangers, home and closet organizers, and food
storage containers. Their products are sold under the HOMZ
brand name, and are distributed to hotels, discounters, and
other retailers such as Wal-Mart, Kmart, Sears, Home Depot, and
Lowe's. The company has operations in Mexico.
The company and its affiliate, Home Products International-North
America, Inc., filed for chapter 11 protection on Dec. 20, 2006
(Bankr. D. Del. Case Nos. 06-11457 and 06-11458). Ronald
Barliant, Esq., and Kathryn A. Pamenter, Esq., at Goldberg Kohn,
Bell, Black, Rosenbloom & Moritz, Ltd., and Mark D. Collins,
Esq., and Michael J. Merchant, Esq., at Richards, Layton &
Finger P.A. represent the Debtors. When the Debtors filed for
protection from their creditors, they listed estimated assets
between US$1 million and US$100 million and debts of more than
US$100 million.
The Debtors' exclusive period to file a chapter 11 plan will
expire on June 12, 2007.
HOME PRODUCTS: Panel Wants Pachulski Stang as Local Bankr. Atty.
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Home
Products International Inc. and Home Products International-
North America Inc.'s bankruptcy cases asks the Honorable
Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware to retain Pachulski Stang Ziehl Young Jones
& Weintraub LLP as its local bankruptcy counsel, nunc pro tunc
Jan. 3, 2007.
The Committee also asks the Court to retain Fried, Frank,
Harris, Shriver & Jacobson LLP as its lead bankruptcy counsel.
Pachulski Stang and Fried Frank will ensure that there is no
unnecessary duplication of efforts.
Pachulski Stang will:
a. provide legal advice and assistance to the Committee in
its consultation with the Debtors relative to their
administration of their reorganization;
b. review and analyze all applications, motions, orders,
statements of operations, and schedules filed with the
Court by the Debtors or third parties, advise the
Committee as to their propriety, and, after consultation
with the Committee, take appropriate action;
c. prepare necessary applications, motions, answers, orders,
reports, and other legal papers on behalf of the
Committee;
d. represent the Committee at hearings held before the Court
and communicate with the Committee regarding the issues
raised, as well as the decisions of the Court; and
e. perform all other legal services for the Committee, which
may be necessary and proper in the Debtors' chapter 11
cases.
Laura Davis Jones, Esq., a partner at Pachulski Stang Ziehl
Young Jones & Weintraub, discloses that the firm's professionals
bill:
Professional Hourly Rate
------------ -----------
Laura Davis Jones, Esq. US$750
Curtis A. Hehn, Esq. US$375
Louise Tuschak US$180
Ms. Jones assures the Court that the firm is disinterested
pursuant to Section 101(14) of the Bankruptcy Code.
Hearing
Judge Sontchi will convene a hearing at 10:00 a.m. on Feb. 20,
2007, to consider the Committee's request. Objections, if any,
must be submitted by 4:00 a.m. on Feb. 15, 2007.
About Home Products
Headquartered in Chicago, Illinois, Home Products International,
Inc. -- http://www.hpii.com/-- designs, manufactures, and
markets ironing boards, covers, and other high-quality, non-
electric consumer houseware products. The Debtor's product
lines include laundry management products, bath and shower
organizers, hooks, hangers, home and closet organizers, and food
storage containers. Their products are sold under the HOMZ
brand name, and are distributed to hotels, discounters, and
other retailers such as Wal-Mart, Kmart, Sears, Home Depot, and
Lowe's. The company has operations in Mexico.
The company and its affiliate, Home Products International-North
America, Inc., filed for chapter 11 protection on Dec. 20, 2006
(Bankr. D. Del. Case Nos. 06-11457 and 06-11458). Ronald
Barliant, Esq., and Kathryn A. Pamenter, Esq., at Goldberg Kohn,
Bell, Black, Rosenbloom & Moritz, Ltd., and Mark D. Collins,
Esq., and Michael J. Merchant, Esq., at Richards, Layton &
Finger P.A. represent the Debtors. When the Debtors filed for
protection from their creditors, they listed estimated assets
between US$1 million and US$100 million and debts of more than
US$100 million.
The Debtors' exclusive period to file a chapter 11 plan will
expire on June 12, 2007.
GRUPO MEXICO: Facing Asarco's Fraudulent Stake Transfer Suit
------------------------------------------------------------
ASARCO LLC, a former subsidiary of Grupo Mexico S.A. de C.V.,
accused its parent of fraudulently transferring the Canadian
mining company's stake in Peruvian copper mines to another
company that it controlled.
In 1999, Grupo Mexico purchased all of ASARCO's stocks in a
leveraged buy-out. ASARCO believes that its former parent used
the buy-out to obtain control of ASARCO's 54.2% ownership of
Southern Peru Copper Corp., now known as Southern Copper Corp.
ASARCO's entire board of directors was replaced and a new
executive management consisting of individuals affiliated with
Grupo Mexico was installed.
After the LBO, Grupo Mexico directed the sale of ASARCO's
chemical and aggregates subsidiaries. The chemical and
aggregates subsidiaries have been consistent sources of revenues
for ASARCO because they were unaffected by the cyclical copper
market. Proceeds of the sales were used to pay US$817,000,000
of acquisition debt that Grupo Mexico has guaranteed.
In October 2000, Grupo Mexico formed Americas Mining Corp.,
ASARCO's parent company, and began planning for the transfer of
SPCC from ASARCO to AMC.
A September 2000 valuation performed by PricewaterhouseCoopers,
LLC, found that the 54.2% SPCC ownership interest was worth
US$978,586,000, but Grupo Mexico does not want to pay more than
a billion for the SPCC shares. Thus, Grupo Mexico obtained
another valuation from Houlihan Lokey Howard & Zukin finding
that the value of the SPCC shares is at least US$720,000,000.
In late 2001, Grupo Mexico and AMC proposed to restructure
ASARCO's finances by purchasing the SPCC shares for
US$100,000,000 and assuming US$350,000,000 of ASARCO's debt; the
transaction known as the related-party transaction.
ASARCO was desperate for cash throughout 2000 and 2001 and began
selling its assets, often to Grupo Mexico and AMC affiliates.
ASARCO also began to monetize insurance policies covering its
environmental liabilities and the toxic/tort asbestos liability
of its subsidiaries for less than what they were worth. The
company did not use the funds from the insurances solely to
settle its asbestos and environmental claims and pay defense
costs; it used substantial portions of those funds for current
operations, like making payroll; leaving the company and its
subsidiaries unprotected against future claims.
In December 2001, Grupo Mexico and AMC directed ASARCO to redeem
US$50,000,000 of bonds at par. ASARCO did not have funds
available to redeem the bonds, so Grupo Mexico provided a
US$42,000,000 "advance" on its purchase of SPCC.
By April 2002, ASARCO could not obtain a solvency opinion,
making the transfer of the SPCC shares even more vulnerable to a
fraudulent transfer. Grupo Mexico and AMC began planning on a
US$600,000,000 price.
Grupo Mexico and AMC directed ASARCO to engage Ernst & Young
Corporate Finance to provide valuation that might be used to try
to defend the related-party transaction. ASARCO also employed
Squire Sanders as restructuring counsel. Squire Sanders and E&Y
advised ASARCO that it would be best for it to file a bankruptcy
petition and make SPCC collateral for its DIP Financing, and
await the return of copper prices.
In August 2002, the United States Department of Justice filed a
lawsuit to enjoin ASARCO's transfer of the SPCC shares. ASARCO
settled the DOJ Lawsuit by agreeing that US$100,000,000 from the
proceeds of the SPCC Sale would fund an environmental trust.
ASARCO's decision to sell SPCC was also driven by concern that
SPCC was going to end up in the hands of ASARCO's creditors if
it did not sell.
The sale of SPCC stock was said to have a nominal value of
US$765,000,000; however, ASARCO was not to receive a nickel of
immediately available funds to continue operations:
-- US$450,000,000 would go to retire the credit facility
guaranteed by Grupo Mexico as part of the 1999 LBO;
-- US$100,000 was earmarked for the environmental trust;
-- US$42,000,000 of intercompany debt forgiveness to Grupo
Mexico yielded no cash; and
-- the remaining US$50,000,000, as well as US$50,000,000
raised from monetizing insurance policies, was used to
retire ASARCO's US$100,000,000 7-3/8% bonds due 2003,
known as the Yankee Bonds.
E&Y has advised ASARCO that paying the Yankee Bonds would result
in the company having a projected negative cash balance of
US$158,000,000 in December 2003. Had E&Y been provided with
figures that reflected typical operations, the projected cash
deficit would have been much larger.
In one of the restructuring committee meeting in January 2003,
Genaro Larrea, director of Grupo Mexico and AMC and then
president of ASARCO, promised to get updated numbers to E&Y
reflecting "improved copper prices." Mr. Larrea also revealed
that Inbursa, the bank that provided Grupo Mexico and AMC with
financing for the SPCC purchase, was requiring, as a condition
to lending funds to AMC, that ASARCO pay the Yankee Bonds at par
with interest. Inbursa is owned by Carlos Slim, a close
associate of Grupo Mexico's principals.
Squire Sanders has advised the restructuring committee that
ASARCO'S directors had a duty to preserve the value of the
corporation's assets for the benefit of all creditors. If
payment of the Yankee Bonds jeopardized ASARCO's ability to
continue its operations, the directors and the company would
have breached their duties, Squire Sanders stated.
In March 2003, ASARCO proceeded to close the transaction by
transferring the SPCC shares to AMC.
After the transfer of the SPCC stocks to AMC, Mr. Larrea and all
other ASARCO director who approved the transfer resigned.
ASARCO asserted that SPCC shares were transferred with the
intent to hinder, delay, and defraud its creditors. ASARCO did
not receive equivalent value for the SPCC shares. The shares
were worth more than what AMC paid for.
In addition, the transfer deprived ASARCO of assets that have
been appreciated in value since the date of the transfer as a
result of the increase in the price of copper.
If the sale to AMC is set aside, ASARCO believes that it may use
its interests in the Southern Peru mines to successfully plan
and complete its reorganization.
ASARCO asserts that:
a) The transfer of the SPCC shares was a fraudulent transfer
of actual intent. The transfer was made with the actual
intent to hinder, delay and defraud ASARCO's creditors and
it harmed the company.
b) The transfer of the SPCC shares was a constructive
fraudulent transfer. The transfer was made at a time
while ASARCO was engaged or was about to engage in a
business or a transaction for which any property remaining
with it was unreasonably small in relation to the business
or transaction; or intended to incur debts beyond its
ability to pay as they become due. ASARCO received less
than reasonably equivalent value in exchange for making
the transfer. ASARCO did not receive fair consideration
for the SPCC shares.
Hence, ASARCO further asserts that pursuant to Section 550(a) of
the Bankruptcy Code, it is entitled to avoid the transfer of the
SPCC shares to AMC and recover them. ASARCO also asserts that
it is entitled to 54.2% of the dividends paid by SPCC since the
fraudulent transfer.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/
-- is an integrated copper mining, smelting and refining
company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The Company filed for chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq.,
Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker
Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its
restructuring efforts. Lehman Brothers Inc. provides the ASARCO
with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the
Official Committee of Unsecured Creditors and David J. Beckman
at FTI Consulting, Inc., gives financial advisory services to
the Committee. When the Debtor filed for protection from its
creditors, it listed US$600 million in total assets and US$1
billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products
Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.
Details about their asbestos-driven chapter 11 filings have
appeared in the Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304),
Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex.
Case No. 05-21346) also filed for chapter 11 protection, and
ASARCO has asked that the three subsidiary cases be jointly
administered with its chapter 11 case. On Oct. 24, 2005,
Encycle/Texas' case was converted to a Chapter 7 liquidation
proceeding. The Court appointed Michael Boudloche as
Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt,
Esq., and John Vardeman, Esq., at Law Offices of Michael B.
Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for chapter 11
protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
About Grupo Mexico
Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--
through its ownership of Asarco and the Southern Peru Copper
Company, Grupo Mexico is the world's third largest copper
producer, fourth largest silver producer and fifth largest
producer of zinc and molybdenum.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec 29, 2006, Fitch upgraded the local and foreign currency
Issuer Default Rating assigned to Grupo Mexico, S.A. de C. V. to
'BB+' from 'BB'. Fitch said the rating outlook is stable.
VALASSIS COMMS: Promotes Thomas Murray to VP of Insert Business
---------------------------------------------------------------
Valassis Communications, Inc., promoted Thomas Murray to the
newly created position of Vice President and General Manager of
the Free-Standing Insert or FSI Business. In this new position,
Mr. Murray will lead a cross-functional team that will focus on
restoring greater profitability in the FSI business by
increasing customer pages, improving pricing, reducing cost of
goods sold and creating product differentiation. His team will
also work to develop proprietary innovations to provide best-in-
class business results for customers utilizing all of Valassis'
resources, including its unique access to data.
"Tom is an outstanding leader and has the perfect background and
expertise to lead our FSI business," said Alan F. Schultz,
Valassis Chairman, President and CEO. "His marketing experience
and depth of industry knowledge is extremely invaluable to this
newly created role as we look to improve FSI profitability. I
am confident he will bring to this position the out-of-the- box
strategic thinking necessary to be successful in today's
competitive FSI business."
Prior to joining Valassis in 2004, Mr. Murray gained industry
experience in the marketing services sector at companies such as
Act Media, Time Warner, Catalina Marketing and News America
Marketing. He played key roles in the sales and strategic
direction of the emerging in-store business at both Act Media
and Time Warner. Mr. Murray also headed the sales efforts in
the online division of Catalina Marketing, the industry leader
in online promotions at that time. While at Catalina Marketing,
Mr. Murray launched the industry's first one-to-one targeted
solo direct mail business using retailer loyalty data. This
business was eventually acquired by Valassis. During his tenure
at News America Marketing, Murray was a vice president for the
company's in-store business, which ultimately culminated in the
acquisition of Act Media. He is a graduate of the University of
Pennsylvania's Wharton School of Business.
Headquartered in Livonia, Michigan, Valassis Communications Inc.
(NYSE: VCI) -- http://www.valassis.com/-- provides marketing
services to consumer-packaged goods manufacturers, retailers,
technology companies and other customers with operations in the
United States, Europe, Mexico and Canada. Valassis' products
and services portfolio includes: newspaper-delivered promotions
and advertisements such as inserts, sampling, polybags and on-
page advertisements; direct-to-door advertising and sampling;
direct mail; Internet-delivered marketing; loyalty marketing
software; coupon and promotion clearing; and promotion planning
and analytic services. Valassis subsidiaries include Valassis
Canada, Promotion Watch, Valassis Relationship Marketing
Systems, LLC and NCH Marketing Services Inc.
* * *
As reported in the Troubled Company Reporter on Nov. 1, 2006,
Moody's Investors Service downgraded Valassis Communications,
Inc.'s senior unsecured note ratings to Ba1 from Baa3. Moody's
also assigned a Ba1 Corporate Family Rating, Ba1 Probability of
Default Rating, and LGD4 loss given default assessments to
Valassis' debt securities. The ratings remain on review for
downgrade.
=======
P E R U
=======
COMVERSE TECH: NASDAQ Delists Common Stock Effective Feb. 1
-----------------------------------------------------------
Comverse Technology, Inc. disclosed in a regulatory filing with
the U.S. Securities and Exchange Commission that it received a
decision, dated Jan. 30, 2007, from the NASDAQ Listing and
Hearing Review Council, stating that the company's common stock
will be delisted from NASDAQ, effective at the open of business
last Thursday, Feb. 1, 2007.
As reported in the Troubled Company Reporter on Dec. 27, 2006,
the company disclosed that it received an additional Staff
Determination Letter from NASDAQ indicating that the reported
delay in the filing of the Form 10-Q for the fiscal quarter
ended Oct. 31, 2006, served as an additional basis for the
delisting of the company's securities from NASDAQ under NASDAQ
Marketplace Rule 4310(c)(14).
With the delisting of its common stock from NASDAQ, the company
expects that its common stock will be quoted in the "Pink
Sheets" beginning on Feb. 1, 2007. The company expects that the
trading symbol of its common stock will remain the same (CMVT or
CMVT.PK).
Mark Terrell, Comverse Technology's Chairman, said, "Comverse
Technology remains a financially strong, world class company
with more than 7,000 employees serving customers in more than
100 countries. The NASDAQ decision will not affect our ability
to continue providing outstanding products, technology and
service to our customers worldwide. We are committed to
regaining compliance with all filing requirements and obtaining
relisting of our common stock in a timely manner."
As a result of the delisting of the company's common stock from
NASDAQ, holders of the company's Zero Yield Puttable Securities
due May 15, 2023 and New Zero Yield Puttable Securities due
May 15, 2023 will have the right to require the company to
repurchase their ZYPS at a purchase price equal to 100% of the
principal amount of the ZYPS purchased. The aggregate
outstanding principal amount of ZYPS under the applicable
Indentures was approximately US$419,647,000.
As of Oct. 31, 2006, the company had cash and cash equivalents,
bank time deposits and short term investments of $1,867,761,000.
Comverse Technology, Inc. -- http://www.comverse.com/--
(NASDAQ: CMVT) through its Comverse, Inc. subsidiary, provides
software and systems enabling network-based multimedia enhanced
communication and billing services. The company's Total
Communication portfolio includes value-added messaging,
personalized data and content-based services, and real-time
converged billing solutions. Over 450 communication and content
service providers in more than 120 countries use Comverse
products to generate revenues, strengthen customer loyalty and
improve operational efficiency.
Other Comverse Technology subsidiaries include: Verint Systems
(NASDAQ: VRNT), which provides analytic software-based solutions
for communications interception, networked video security and
business intelligence; and Ulticom (NASDAQ: ULCM), which
provides of service enabling signaling software for wireline,
wireless and Internet communications.
In Latin America, Comverse has operations in Argentina, Brazil,
Mexico and Peru.
COMVERSE TECHNOLOGY: Delisting Prompts S&P to Hold Neg. Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services kept its 'BB-' corporate
credit and senior unsecured debt ratings on New York, New York-
based Comverse Technology Inc. on CreditWatch with negative
implications, where they were placed on March 15, 2006.
"On Feb. 1, 2007, Comverse's common stock, along with that of
its wholly owned subsidiaries Verint Systems Inc. and Ulticom
Inc., were delisted from NASDAQ because of the companies'
failure to file form 10-K annual financial statements for the
year ended Jan. 31, 2006, or any subsequent form 10-Q quarterly
financial statement," said Standard & Poor's credit analyst Ben
Bubeck.
As a result of this delisting, holders of Comverse's convertible
notes will have the right to require the company to repurchase
the notes at a purchase price equal to 100% of the principal
amount.
It should be noted that the company reported cash balances of
nearly $1.9 billion as of Oct. 31, 2006, compared with
approximately $420 million of outstanding convertible notes.
Therefore, the company is expected to be able to meet a
potentially accelerated maturity with current balance sheet
liquidity, if necessary.
Standard & Poor's will continue to monitor developments with
Comverse, including financial restatements, changes to the
strategy and corporate governance practice that may stem from
management departures, potential litigation, and debt maturity
acceleration to determine what, if any, affect they have on debt
ratings. If holders of the convertible notes exercise their
rights to require the company to repurchase the notes, and they
are retired, Standard & Poor's ratings on Comverse will be
withdrawn.
In Latin America, Comverse has operations in Argentina, Brazil,
Mexico and Peru.
=====================
P U E R T O R I C O
=====================
BURGER KING: Declines CIW's "Penny Per Pound" Proposal
------------------------------------------------------
Burger King Corp. has extensively considered the Coalition of
Immokalee Workers or CIW's "penny per pound" request and has
declined to accept the proposal. Burger King notified the CIW
of its decision on Feb. 5.
Over the citsse of the past year and a half, Burger King Corp.
executives have met with CIW representatives more than a dozen
times, as well as with religious groups who support the CIW and
the Immokalee workers. In addition, Burger King Corp.
executives traveled to Immokalee to meet with the group's
leadership and to view living and working conditions first-hand.
The company agrees with the CIW that the workers' living
conditions are, in fact, substandard, and is sympathetic and
concerned about the housing.
The company reached its decision for several reasons. Burger
King Corp. and its purchasing agent, RSI, do not have a direct
relationship with any tomato grower or its employees, as is the
case with some of the other large chain restaurants. Instead,
the company purchases tomatoes -- based on best market price --
from tomato re-packing companies. It is these re-packing
companies that have a relationship with the actual growers who
employ the CIW. As a result, the company does not identify the
specific growers, tomatoes or workers who pick the tomatoes that
are used in its restaurants.
To ask Burger King Corp. to pay a penny more a pound for
tomatoes to increase workers' wages is similar to asking
shoppers to voluntarily pay a penny more per pound at the
grocery store for tomatoes to increase workers' wages. Both
Burger King Corp. and grocery store shoppers have no business
relationship with the workers and cannot get the extra penny to
them.
Increasing the cost of tomatoes by a penny per pound does
nothing to ensure support for the workers directly. Burger King
Corp. has no business relationship with the workers and cannot
control how they are compensated.
In addition, the Immokalee workers' typical wages are unclear
because of conflicting reports and a general lack of IRS
reporting. In an April 2006 study by the Center for Reflection,
Education and Action, the average hitsly wage for Immokalee
tomato pickers ranged from US$9.65 per hits for the slowest
workers to a high of US$18.27 per hits for the fastest. The
average pay for workers is clearly well above the Florida
minimum wage of US$6.40 per hits and well above standard wages
for similar work.
The company has spoken to CIW representatives about its interest
in recruiting interested Immokalee workers into the Burger King
system. The company has offered to send Burger King Corp.
recruiters to the area to speak with the CIW and with workers
themselves about permanent, full-time employment at BURGER KING
restaurants. Burger King Corp. offers ongoing professional
training and advancement opportunities around the country for
both entry-level and skilled employee jobs, and the company is
hopeful the CIW will accept its offer.
The company has also spoken to the CIW about the strong interest
from the charitable arm of Burger King Corp., the HAVE IT YOUR
WAY Foundation. The Foundation's mission is to contribute to
non-profit organizations whose goal is to improve education,
alleviate hunger or disease or to support youth programs. The
Foundation is keenly interested in working with the CIW and
others to identify charitable organizations that could improve
the lives of the workers and their families.
Additionally, Burger King Corp. stands ready to cooperate with
state and federal officials to identify any possible violations
of U.S. labor laws, including minimum wage, overtime and child
labor provisions of the Fair Labor Standards Act.
Headquartered in Miami, Florida, The Burger King --
http://www.burgerking.com/-- operates more than 11,000
restaurants in more than 60 countries and territories worldwide.
Approximately 90% of Burger King restaurants are owned and
operated by independent franchisees, many of them family owned
operations that have been in business for decades. Burger King
Holdings Inc., the parent company, is private and independently
owned by an equity sponsor group comprised of Texas Pacific
Group, Bain Capital and Goldman Sachs Capital Partners.
Burger King Corp. operates restaurants in the Latin American,
Caribbean and Mexican Region. The company's first international
restaurant opened in 1963 in Puerto Rico. Since 1994, Burger
King has opened more than 300 restaurants in the Latin American
region, producing some of the strongest comparable store sales
growth for the brand around the world. Burger King(R)
restaurants in Latin America serve approximately 1,600 customers
per day each, making them some of the highest volume restaurants
in the system.
* * *
As reported in the Troubled Company Reporter on Oct. 17, 2006,
in connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the restaurant sector, the rating agency revised
its Corporate Family Rating for Burger King Corp. to Ba3 from
Ba2.
Additionally, Moody's held its Ba2 ratings on the Company's
US$150 million Senior Secured Revolver Due 2011 and US$250
million Senior Secured Term Loan A Due 2011. Moody's assigned
those loan facilities an LGD3 rating suggesting lenders will
experience a 35% loss in the event of default.
FIRST BANCORP: Declares Payment of Preferred Dividends
------------------------------------------------------
First BanCorp's board of directors declared the next payment of
dividends on First BanCorp's Series A through E Preferred
shares.
The estimated corresponding amounts, record dates and payment
dates for the Series A through E Preferred Shares are:
Series US$Per/share Record Date Payment Date
A 0.1484375 Feb. 26, 2007 Feb. 28, 2007
B 0.17395833 Feb. 15, 2007 Feb. 28, 2007
C 0.1541666 Feb. 15, 2007 Feb. 28, 2007
D 0.15104166 Feb. 15, 2007 Feb. 28, 2007
E 0.14583333 Feb. 15, 2007 Feb. 28, 2007
Regulatory approvals for payments of dividends were obtained as
a part of First BanCorp's agreement with the Board of Governors
of the Federal Reserve System.
First BanCorp (NYSE: FBP) -- http://www.firstbankpr.com/-- is
the parent corporation of FirstBank Puerto Rico, a state
chartered commercial bank with operations in Puerto Rico, the
Virgin Islands and Florida; of FirstBank Insurance Agency; and
of Ponce General Corporation. First BanCorp, FirstBank Puerto
Rico and FirstBank Florida, formerly UniBank, the thrift
subsidiary of Ponce General, all operate within U.S. banking
laws and regulations.
* * *
As reported in the Troubled Company Reporter on March 22, 2006,
Fitch Ratings affirmed the ratings and Outlook for First Bancorp
and FirstBank Puerto Rico: long-term Issuer Default Rating
'BB'/short-term 'B'. Fitch said the rating outlook remains
negative.
As reported on June 30, 2006, Moody's Investors Service
confirmed the ratings of FirstBank Puerto Rico at Ba1 for
deposits. The bank's D+ rating for financial strength was also
confirmed. Moody's placed the ratings' outlook at negative.
MERIDIAN AUTO: Feb. 12 Set as Administrative Claims Bar Date
------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for
the District of Delaware fixes Feb. 12, 2007, as the
Administrative Claims Bar Date.
All applications for final allowance of fees of Reorganized
Meridian Automotive Systems Inc. and its debtor-affiliates or
the Official Committee of Unsecured Creditors' bankruptcy
professionals and all other requests for payment of
Administrative Expense Claims must be filed with the Clerk of
the Bankruptcy Court and served on the Reorganized Debtors, so
as to be actually received on or before Feb. 12 by:
* Meridian Automotive Systems, Inc.
999 Republic Drive, Suite 200
Allen Park, MI 48101
Fax No. (313) 253-4026
* Sidley Austin, LLP
One South Dearborn Street
Chicago, IL 60603
Attn: Paul S. Caruso
Fax No. (312) 853-7036
* Young Conaway Stargatt & Taylor, LLP
The Brandywine Building
100 West Street, 17th Floor
Wilmington, DE 19801
Attn: Robert S. Brady
Fax No. (302) 571-1253
* Office of the United States Trustee
J. Caleb Boggs Federal Building
844 King Street, Suite 2207
Lockbox 35
Wilmington, DE 19801
Attn: Joseph J. McMahon, Jr.
Fax No. (302) 573-6497
Any Administrative Expense Claim that is not filed and served by
the Administrative Claims Bar Date will be discharged and
forever barred.
Headquartered in Dearborn, Mich., Meridian Automotive Systems
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck
manufacturers. Meridian operates 22 plants in the United
States, Canada and Mexico, supplying Original Equipment
Manufacturers and major Tier One parts suppliers. The Company
and its debtor-affiliates filed for chapter 11 protection on
April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-
11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S.
Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown &
Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq.,
Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young
Conaway Stargatt & Taylor, LLP, represent the Debtors in their
restructuring efforts. Eric E. Sagerman, Esq., at Winston &
Strawn LLP represents the Official Committee of Unsecured
Creditors. The Committee also hired Ian Connor Bifferato, Esq.,
at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an
adversary proceeding against Meridian's First Lien Lenders and
Second Lien Lenders to invalidate their liens. When the Debtors
filed for protection from their creditors, they listed US$530
million in total assets and approximately US$815 million in
total liabilities. Judge Walrath has confirmed the Revised
Fourth Amended Reorganization Plan of Meridian. (Meridian
Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
NEWCOMM WIRELESS: Committee Seeks to Retain Goldman as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Newcomm
Wireless Services, Inc., asks the U.S. Bankruptcy Court for
the District of Puerto Rico for authority to retain Goldman
Antonetti & Cordova, P.S.C. as its counsel, nunc pro tunc
Dec. 28, 2006.
The Committee members are:
-- Magnetiks International, Inc.,
-- TLD de Puerto Rico, Inc.,
-- Caribbean American Property Insurance Co.,
-- Syniverse Technologies, Inc., and
-- Munoz Metro Office.
Goldman Antonetti will:
a. advise the Committee with respect to its rights,
powers and duties;
b. advise the Committee in its consultations with the
Debtor relative to the administration of this
chapter 11 case;
c. advise the Committee in analyzing the claims of
the Newcomm Wireless' creditors and in negotiating
with the creditors;
d. advise the Committee with respect to its
investigation of the acts, conduct, assets,
liabilities, and financial condition of Newcomm
Wireless and its lenders, the operation of the
Debtor's business and the desirability of the
continuance of the business, and any other matters
relevant to the Chapter 11 case or to the
formation of a plan of reorganization;
e. advise the Committee with respect to the
contemplated sale of the Debtor's assets, plans
for upgrading the Debtor's telecommunications
network, and payments to the Federal
Communications Commission;
f. assist the Committee in its analysis of, and
negotiations with, the Debtor or any third party
concerning matters related to, among other things,
DIP financing to be obtained in this case and the
terms of a Chapter 11 plan for the Debtor;
g. assist and advise the Committee with respect to
its communications with the general creditor body
regarding significant matters in the case;
h. represent the Committee in any litigation that may
be necessary, and at hearings and other
proceedings;
i. review and analyze all applications, orders,
statements of operations, and schedules filed with
the Court and advise the Committee as to their
propriety;
j. assist the Committee in preparing pleadings and
applications as may be necessary in furtherance of
the Committee's interests and objections;
k. perform other legal services as may be required
and are deemed to be in the interests of the
Committee in line with the Committee's powers and
duties as set forth in the Bankruptcy Code; and
l. advise the Committee on Puerto Rico law and
procedures.
Roberto Montalvo, the managing shareholder and a partner at
Goldman Antonetti, assures the Court of his firm's
disinterestedness as that term is defined in Section 101(14) of
the Bankruptcy Code.
Mr. Montalvo also discloses the firm's professionals' hourly
billing rate:
Professional Hourly Rate
Souss, Jorge US$250.50
Caban, Mildred US$195.00
Delgado-Miranda, Briseida Y. US$115.00
Irizarry, Milagros US$80.00
Goldman Antonetti & Cordova, P.S.C. can be reached at:
Attention: Mildred Caban
American International Plaza, Fourteenth Floor
250 Munoz Rivera Avenue
San Juan, PR 00918
Puerto Rico
Phone: (787) 759-8000, ext. 2327
Fax: (787) 767-9177
E-mail: mcaban@gaclaw.com
Based in Guaynabo, Puerto Rico, NewComm Wireless Services Inc.
is a PCS company that provides wireless service to the Puerto
Rico market. The company is a joint venture between ClearComm,
L.P. and Telefonica Larga Distancia. The company filed for
chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No.
06-04755). Carmen D. Conde Torres, Esq., at C. Conde & Assoc.
and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal
LLP represent the Debtor in its restructuring efforts. On
Dec. 6, 2006, the United States Trustee for Region 21 appointed
a five-member committee of unsecured creditors. When the Debtor
filed for protection from its creditors, it reported assets and
liabilities of more than US$100 million.
NEWCOMM: Panel Taps Falkenberg Capital as Financial Advisors
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Newcomm
Wireless Services, Inc., asks the U.S. Bankruptcy Court for the
District of Puerto Rico for authority to retain Falkenberg
Capital Corp. as its financial advisors, nunc pro tunc
Dec. 21, 2006.
Falkenberg Capital will:
a) advise the Committee regarding the Debtor's proposed
upgrade of its existing wireless network, which includes
the agreement between the Debtor and Nortel Networks
(CALA) Inc., Nortel Networks Limited and Nortel Networks
Puerto Rico governing the upgrade;
b) evaluate and advise the Committee regarding the Debtor's
sale of substantially all of its assets in connection with
the bidding procedures already approved by the Bankruptcy
Court; and
c) assist the Committee in evaluating competing bids to buy
the Debtor's assets.
George E. Harris, Falkenberg Capital's senior vice president,
discloses that Falkenberg Capital would charge the Debtor a
US$50,000 flat fee for its work. The first half payment would
be due upon the entry of the Court's final order and the
remaining US$25,000 would be paid after the auction completion
of the Debtor's assets on Feb. 28, 2007, but not later than
March 9, 2007, Mr. Harris adds.
Mr. Harris assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Harris can be reached at:
Falkenberg Capital Corp.
Cherry Creek Plaza, Suite 1108
600 South Cherry Street
Denver, CO 80246
Fax: (303) 322-5796
Based in Guaynabo, Puerto Rico, NewComm Wireless Services Inc.
is a PCS company that provides wireless service to the Puerto
Rico market. The company is a joint venture between ClearComm,
L.P. and Telefonica Larga Distancia. The company filed for
chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No.
06-04755). Carmen D. Conde Torres, Esq., at C. Conde & Assoc.
and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal
LLP represent the Debtor in its restructuring efforts. On
Dec. 6, 2006, the United States Trustee for Region 21 appointed
a five-member committee of unsecured creditors. When the Debtor
filed for protection from its creditors, it reported assets and
liabilities of more than US$100 million.
SEARS HOLDINGS: Discloses Kmart & Sears Comparable Store Sales
--------------------------------------------------------------
Sears Holdings Corp. disclosed domestic comparable store sales
for the nine-week period ended Dec. 30, 2006 for its Kmart and
Sears stores.
Kmart comparable store sales decreased by 1.2% due to lower
transaction volumes. Apparel sales at Kmart, while negatively
impacted by unseasonably warm weather, increased over the prior
year. Sears domestic comparable store sales declined by 5.6%
reflecting lower lawn and garden and appliance sales partially
offset by an improvement in Sears women's apparel.
Fiscal Year & 4th Quarter Outlook
The company currently expects that net income for its fourth
quarter ending Feb. 3, 2007 will be between US$750 million and
US$830 million. In the fourth quarter of the prior year, the
company reported net income of US$648 million. The current year
fourth quarter estimate includes a combined gain of
approximately US$20 million pretax resulting from gains from
property sales and losses related to total return swap investing
activities. The 2006 fiscal year ending Feb. 3, 2007 is a 53-
week year for the company. As such, the current year fourth
quarter is 14 weeks versus 13 weeks last year.
For the full year ending Feb. 3, 2007, the company expects net
income to be between US$1.42 billion and US$1.50 billion, or
between US$9.12 and US$9.63 per fully diluted share.
The expected results are preliminary and subject to change based
on actual performance in January, as well as year-end
adjustments. The company currently expects to end the fiscal
year with approximately US$3.5 billion in cash and cash
equivalents, excluding Sears Canada. The expected cash and cash
equivalents balance indicated does not give effect to any share
repurchase, total return swap investing or property sale
activities after Dec. 30, 2006. Holdings expects to release its
fourth quarter and full-year financial results on or about
March 1, 2007, and does not intend to update this information
prior to that date.
During the nine weeks ended Dec. 30, 2006, Holdings did not
repurchase any shares of its common stock through its share
repurchase program. The remaining authority under Holdings'
existing repurchase program is US$618 million.
About Sears Holdings
Based in Hoffman Estates, Illinois, Sears Holdings Corp.
(NASDAQ: SHLD) -- http://www.searsholdings.com/-- is a
broadline retailer, with approximately $55 billion in annual
revenues, and with approximately 3,800 full-line and specialty
retail stores in the United States, Canada and Puerto Rico.
Sears Holdings is a home appliance retailer as well as a
retailer of tools, lawn and garden, home electronics, and
automotive repair and maintenance. Key proprietary brands
include Kenmore, Craftsman and DieHard, and a broad apparel
offering, including well-known labels as Lands' End, Jaclyn
Smith, and Joe Boxer, as well as the Apostrophe and Covington
brands.
* * *
As reported in the Troubled Company Reporter on June 23, 2006,
Standard & Poor's Ratings Services revised its outlook on Sears
Holdings Corp. to stable from negative. All ratings, including
the 'BB+' corporate credit rating, and the 'B-1' short-term
rating for Sears Roebuck Acceptance Corp., are affirmed.
As reported in the Troubled Company Reporter on Jun 22, 2006,
Fitch affirms its ratings of Sears Holdings Corp. including its
Issuer Default Rating (IDR) at 'BB'; Senior notes at 'BB'; and
Secured bank facility at 'BBB-'.
UNITED AIRLINES: Restructures US$3 Billion Secured Debt Facility
----------------------------------------------------------------
United Airlines, the primary subsidiary of UAL Corp. disclosed
that on Feb. 2, 2007, it used cash to pay down US$972 million of
its original US$3 billion exit facility, and refinanced the
remaining US$2 billion. The new facility was arranged by J.P.
Morgan Securities, Inc. and Citigroup Global Markets as joint
lead arrangers and Credit Suisse Securities (USA) LLC as
syndication agent. The transaction results in significantly
lower interest costs, less restrictive covenants, and releases
approximately US$2.5 billion of collateral.
"Restructuring our exit facility to a lower rate reflects our
improved financial condition and the market's confidence in
United," said Jake Brace, executive vice president and chief
financial officer. "It is a testament to our ability to generate
cash over the past year. We are pleased to be working with
JPMorgan, Citigroup and Credit Suisse as we continue our
partnership with these premier financial institutions."
The new credit facility consists of a US$1.8 billion term loan
and a US$255 million revolving credit line. The refinancing was
significantly oversubscribed, enabling the company to reduce its
financing costs by 175 basis points to 200 basis points over the
London Interbank Offered Rate. The lower pricing sets a new
market benchmark for network carriers and is expected to result
in net pre-tax savings of approximately US$70 million per annum.
The new credit facility will enable United to utilize its
available collateral more efficiently. The primary collateral
for the new facility includes intangible assets such as routes,
airport gates, and slots. The refinancing enables United to
remove 101 aircraft and the company's spare parts inventory,
valued at approximately $2.5 billion, from the collateral pool.
The credit facility does not restrict the company's use of these
assets to secure new financing, providing a source of additional
liquidity if needed.
About United Airlines
United Airlines operates more than 3,600 flights a day on
United, United Express and Ted to more than 210 U.S. domestic
and international destinations from its hubs in Los Angeles, San
Francisco, Denver, Chicago and Washington, D.C. With key global
air rights in the Asia-Pacific region, Europe and Latin America,
United is one of the largest international carriers based in the
United States. United also is a founding member of Star
Alliance, which provides connections for its customers to 841
destinations in 157 countries worldwide. United's more than
55,000 employees reside in every U.S. state and in many
countries around the world.
* * *
As reported in the Troubled Company Reporter on Jan. 19, 2007,
Moody's Investors Service assigned B1, LGD-3 42% ratings to the
United Air Lines Inc. US$2.1 billion Senior Secured Revolving
Credit and Term Loan.
Moody's also assigned the B2 corporate family and probability of
default rating and a stable outlook at UAL Corporation. At the
same time, Moody's withdrew its corporate family and probability
of default ratings assigned at the United level and affirmed its
SGL-2 speculative grade liquidity rating. Moody's will withdraw
the ratings on United's existing $3 billion of revolving credit
and term loans once the new Bank Facilities close.
=================================
T R I N I D A D & T O B A G O
=================================
BRITISH WEST: Never Appropriately Capitalized, Says Lok Jack
------------------------------------------------------------
British West Indies Airlines aka BWIA had never been
appropriately capitalized, though the Trinidad and Tobago
government had injected US$120 million into the airline over the
last five years, the Jamaica Observer reports, citing Caribbean
Airlines chairperson Arthur Lok Jack.
Mr. Lok Jack told The Observer, "BWIA's accumulated losses for
the last five years totaled US$150 million. There were no
financial resources available whatsoever, numerous disgruntled
suppliers, the worst possible relationship with our aircraft
lessors, reminding you that we had some of our aircraft
previously repossessed. Unprofitable routes, contrary to public
perception, London was losing money. There were two Airbuses
and one was always on the ground. Losing money all the time."
The BWIA workforce had not received a pay increase in five
years. There was poor client service and an on-time performance
of 60%, compared to the industry standard of 85%, Mr. Lok Jack
commented to The Observer.
British West Indies aka BWIA was founded in 1940, and for more
than 60 years had been serving the Caribbean islands from
Trinidad and Tobago, the hub of the Americas, linking the twin
island republic and many other Caribbean islands with North
America, South America, the United Kingdom and Europe.
The airline had reportedly been losing US$1 million a week due
to poor operational management. An employee survey revealed
that lack of responsibility by the management was a major issue
in the company. A number of key employees moved to other
companies caused by a deadlock in the airline's negotiation with
its labor union.
The Trinidad & Tobago government, which owns 97.188% of BWIA,
decided to shut down the airline on Dec. 31, 2006, and launch
the Caribbean Airlines.
ROYAL CARIBBEAN: Earns US446.6 Million in Fourth Quarter 2006
-------------------------------------------------------------
Royal Caribbean Cruises Ltd. reported its fourth quarter and
full year 2006 results.
Key Highlights
-- Record fourth quarter 2006 net income of US$46.6 million;
-- Fourth quarter 2006 Net Yield growth of 3.3%;
-- Fourth quarter 2006 Net Cruise Costs decreased 3.3%;
-- Record full year Net Yields, which were up 3.4%;
-- For 2007, the company expects earnings per share to be
US$3.05 to US$3.20.
-- For 2007, the company expects Net Yields to increase in a
range around 3%, and on a comparable basis (i.e. excluding
Pullmantur) to increase in a range around 1%;
-- For 2007, the company expects Net Cruise Costs to increase
in a range around 3%, and on a comparable basis to be down
in a range around 1%.
Royal Caribbean Cruises Ltd. reported record net income for the
fourth quarter 2006 of US$46.6 million compared with a net loss
of US$3.6 million, or US$0.02 per share, for the fourth quarter
2005. Revenues for the fourth quarter 2006 increased to US$1.2
billion from revenues of US$1.0 billion in the fourth quarter
2005.
Net income for the full year 2006 was US$633.9 million compared
with income before the cumulative effect of a change in
accounting principle of US$663.5 million for the full year 2005.
Revenues for the full year 2006 increased to US$5.2 billion from
revenues of US$4.9 billion for the full year 2005. Net Yields
grew 3.4% to a record US$178.
Compared with the same period last year, fourth quarter 2006 Net
Yields increased 3.3%, consistent with previous guidance, driven
by strong cruise pricing. Net Cruise Costs, on a per APCD
basis, decreased 3.3%, driven by the timing of drydocking and
marketing expenses. Fuel costs, on a per APCD basis, were flat,
with an average "at-the-pump" price of US$395 for the quarter.
"It is very gratifying to achieve such strong performance,
especially in our traditionally softest quarter," said Richard
D. Fain, Chairman and Chief Executive Officer. "This certainly
tops off another excellent year. We are particularly pleased
with the solid yield performance of our brands, and healthy
earnings despite significantly higher fuel costs." Higher fuel
prices increased operating costs by US$112 million in 2006,
which reduced earnings per share by US$0.51.
Mr. Fain continued, "Royal Caribbean International and Celebrity
Cruises grew yields 3.4% for the full year 2006. This is at the
high end of our original expectations, and is a testament to the
strength and momentum of our brands, particularly given a
Caribbean pricing environment that is less robust than we had
hoped."
2007 Outlook
The Pullmantur acquisition was completed in November 2006. For
reporting purposes, the company will be including Pullmantur's
results on a two-month lag, and, as such, its operations will be
included in the company's consolidated financial statements
beginning with the first quarter 2007. Therefore, the items
discussed in this outlook section include Pullmantur.
Collectively, the company will have a 12.2% increase in capacity
in 2007, driven by Pullmantur, the April delivery of Liberty of
the Seas, and a full year of Freedom of the Seas.
"The early indications from the 'wave period' are less
encouraging than we had hoped," Mr. Fain said. "We have seen
the usual uptick in volume, while pricing appears to have
leveled off from the healthy appreciation we have seen over the
last few years. The beginning of the year is down slightly, but
the revenue picture for the balance of the year is stronger."
For the full year 2007, the company currently forecasts that Net
Yields will increase in a range around 3% compared with 2006.
Pullmantur accounts for two percentage points of this change.
Net Cruise Costs per APCD are expected to increase in a range
around 3% compared with the prior year. Pullmantur, because of
its non-cruise division, will have a negative impact of
approximately four percentage points on Net Cruise Costs. The
company's cost guidance for fuel is based on a current "at-the-
pump" price of US$361 per metric ton. Additionally, the company
is currently 45% hedged for 2007, and a 10% change in the market
price of fuel results in a US$24 million change in fuel costs
after taking into account existing hedges. Based on these
estimates, and assuming that fuel prices remain at today's
level, the company expects full year 2007 earnings per share to
be US$3.05 to US$3.20.
Pullmantur has even a greater degree of seasonality than the
other brands, with the summer months being significantly
stronger than the winter season. This, coupled with the two-
month reporting lag, will have a negative impact on the first
two quarters, but will provide a benefit in the third and fourth
quarters.
For the first quarter 2007, the company currently forecasts Net
Yields will decrease in a range around 3% compared with the
first quarter 2006. Net Cruise Costs per APCD are expected to
increase 4% to 5% compared with the first quarter 2006, of which
about half is driven by Pullmantur. Based on these estimates,
and assuming that fuel prices remain at today's level, the
company expects first quarter 2007 earnings per share to be
US$0.03 to US$0.08.
"Coming off a great year, we are encouraged by the prospects of
solid earnings accretion in 2007, despite a leveling off in
pricing in the early part of the year," Mr. Fain said. "The
introduction of Liberty of the Seas in April, the integration of
Pullmantur and the associated vessel realignments we have
announced will continue the strong brand momentum we have been
enjoying."
Royal Caribbean Cruises Ltd. -- http://www.royalcaribbean.com
-- is a global cruise company that operates Royal Caribbean
International and Celebrity Cruises with a combined total of 29
ships in service and six under construction. The company also
offers unique land-tour vacations in Alaska, Canada and Europe
through its cruise-tour division.
* * *
Moody's Investors Service has assigned on June 7, 2006, a Ba1
rating on Royal Caribbean's US$700 million senior unsecured
notes issuance and affirmed all existing long-term ratings.
=================
V E N E Z U E L A
=================
AMERICAN COMMERCIAL: Moody's Withdraws B1 Corp. Family Rating
-------------------------------------------------------------
Moody's Investors Service has withdrawn the Corporate Family and
the Speculative Grade Liquidity Ratings of American Commercial
Lines LLC.
The withdrawal was due to ACL's purchase on Jan. 31, 2007, of
all of the then outstanding principal amount of its 9.5% Senior
Unsecured Notes due 2015 pursuant to the tender offer for the
Notes that ACL initiated on Jan. 17, 2006. The rating on the
Notes was withdrawn upon completion of their purchase. ACL has
no other rated debt outstanding.
Ratings Withdrawn:
Issuer: American Commercial Lines LLC
* Corporate Family Rating, of B1
* Probability of Default Rating, of B1
* Speculative Grade Liquidity Rating, of SGL-2
Outlook Action:
Issuer: American Commercial Lines LLC
Changed to Ratings Withdrawn from Stable.
American Commercial Lines, LLC, headquartered in Jeffersonville,
Indiana is a leading Jones Act qualified provider of barge
transportation services on the United States inland waterways.
American Commercial has operations in Venezuela.
ARVINMERITOR: Offering US$175MM Sr. Notes in Private Placement
--------------------------------------------------------------
ArvinMeritor, Inc., intends, subject to market and other
conditions, to offer US$175 million aggregate principal amount
of convertible senior unsecured notes due 2027 to qualified
institutional buyers in a private placement. ArvinMeritor
expects to grant the initial purchasers of the notes an option
to purchase up to an additional US$25 million aggregate
principal amount of the notes, solely to cover over-allotments.
In certain circumstances, the notes may be convertible into cash
up to the principal amount. With respect to any excess
conversion value, the notes may be convertible into cash, shares
of ArvinMeritor common stock or a combination of cash and common
stock, at ArvinMeritor's option.
The company currently expects to use the net proceeds from the
offering of the notes (estimated to be US$169.2 million, or
US$193.4 million assuming exercise of the initial purchasers'
over-allotment option in full), together with proceeds from
other sources if needed, to repay in full the US$169.5 million
aggregate principal amount of its outstanding Term Loan B due
2012. If the company determines not to use the net proceeds
from the offering to repay the Term Loan B due 2012, the company
intends to use the net proceeds for general corporate purposes,
including retiring other indebtedness or funding certain pension
or other long-term liabilities.
Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM)
-- http://www.arvinmeritor.com/-- is a premier US$8.8 billion
global supplier of a broad range of integrated systems, modules
and components to the motor vehicle industry. The company
serves light vehicle, commercial truck, trailer and specialty
original equipment manufacturers and certain aftermarkets.
ArvinMeritor employs approximately 29,000 people at more than
120 manufacturing facilities in 25 countries. It maintains 23
facilities in Venezuela, Brazil and Argentina. ArvinMeritor
common stock is traded on the New York Stock Exchange under the
ticker symbol ARM.
* * *
As reported in the Troubled Company Reporter on Jan. 26, 2007,
Standard & Poor's Ratings Services lowered its ratings on
automotive components supplier ArvinMeritor Inc., including its
long-term corporate credit rating to 'BB-' from 'BB'.
In addition, Standard & Poor's removed the ratings from
CreditWatch, where they had been placed on Sept. 26, 2006, with
negative implications. The 'B-1' short-term corporate credit
rating on the Troy, Michigan-based company was affirmed.
PETROLEOS DE VENEZUELA: JV Updating Document Management Process
---------------------------------------------------------------
Open Text Corp., the largest independent provider of Enterprise
Content Management or ECM software and solutions, reported that
HOVENSA -- a joint venture between a subsidiary of Hess Corp.
and a subsidiary of Petroleos de Venezuela SA aka PDVSA -- has
chosen to update their manual document management processes to
an enterprise-wide ECM solution.
HOVENSA operates a merchant refinery in St Croix, US Virgin
Islands. The facility is one of the most modern refineries in
the US. With crude oil processing capacity of 495,000 barrels
per day (BPD), it is one of the largest in the world.
HOVENSA needed a comprehensive ECM solution to help manage a
wide range of enterprise documents, including drawings,
procedures, and compliance documents. The solution must also
make the various documents easily accessible online to many
groups within the organization. The company will adopt Open
Text's Livelink ECM solution, which will become the central
document and records management platform for the company.
Initially, HOVENSA will focus on loading existing documents into
the system, and then begin workflow improvements, including the
OSHA "Management of Change" process. The company expects to
have the initial system operational in early 2007 and the
Management of Change process completed by July 2007.
About Open Text
Open Text -- http://www.opentext.com/-- is the world's largest
independent provider of Enterprise Content Management software.
The company's solutions manage information for all types of
business, compliance and industry requirements in the world's
largest companies, government agencies and professional service
firms. Open Text supports approximately 46,000 customers and
millions of users in 114 countries and 12 languages.
About Petroleos de Venezuela
Petroleos de Venezuela SA -- http://www.pdv.com/-- is
Venezuela's state oil company in charge of the development of
the petroleum, petrochemical and coal industry, as well as
planning, coordinating, supervising and controlling the
operational activities of its divisions, both in Venezuela and
abroad. The company has a commercial office in China.
* * *
Standard & Poor's said on July 17 that it may lower the
company's B+ foreign-currency debt rating in part because of the
absence of timely financial and operating information.
* Moody's Reports on Summary LGD Results for the Chemical Sector
----------------------------------------------------------------
Application of Moody's new loss-given-default or LGD methodology
for the chemical sector has led to rating changes in line with
expectations, Moody's Investors Service says in a new report.
During the September rollout of the methodology, Moody's applied
its LGD methodology to 47 US based speculative-grade chemical
companies comprising more than 180 rated debt instruments. The
purpose of the report is two-fold:
1. Summarize and detail broad sector ratings changes
resulting from LGD implementation and
2. Highlight analytic considerations which are unique and
key to the construction of the chemical sector LGD
liability waterfalls.
For the most part, rating changes from applying the new LGD
assessment methodology were in line with expectations for both
the chemical sector and the overall speculative grade
population.
The overall impact of implementing the new LGD assessment
methodology on chemical sector ratings, with a comparison to the
overall Moody's Corporate Finance Group-wide LGD results for
North America (overall Corporate Finance Group (CFG) LGD results
for over 1,200 corporate families and over 3,600 debt
instruments are in parentheses), has been:
* Upgrades to 45% (46% for CFG) of the rated debt instruments
and downgrades to 8% (8%), with 47% (46%) of ratings
remaining unchanged;
* On average, an increase in ratings of +0.55 (+0.56)
notches;
* 16% (13%) two-notch upgrades and only 1% (2%) three-notch
upgrades; and
* Only one (14) two-notch downgrade, and no (0) three-notch
downgrades.
James Wilkins, Assistant Vice President/Analyst, said that
"trends in the chemical sector were generally in line with the
trends for all of CFG, however a 50% family level LGD rate was
used for all, but one chemical company versus an 86% usage rate
for all speculative grade companies." Analytical highlights in
the chemical sector included:
* The mean corporate family rating for both the chemical
sector and for all of CFG is B1;
* The standard estimated family recovery rate of 50% was used
for all chemical companies except one B1 rated company for
which an estimated family recovery rate of 65% was used.
This company, which had first lien bank debt and no second
lien, senior unsecured or subordinated debt, made up 2% of
the companies in the chemical sector compared to 14% of all
CFG companies that had a family LGD rate other than 50%.
* A fundamental valuation approach was not used for any
chemical companies.
Moody's began applying the LGD methodology to all new issuers on
Sept. 6, 2006, and began transitioning the ratings of existing
companies and their debt instruments to the methodology on
Sept. 18, 2006. The new Moody's report is on the individual
assessments comprising the chemical sector published in the
period Sept. 18 to Sept. 29, 2006.
***********
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