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 Friday, November 30, 2007, Vol. 8, Issue 238 Headlines A R G E N T I N A AGCO CORP: Picks Servigistics to Plan Global Service Parts ALITALIA SPA: PM Sees New Owner for 49.9% Stake by Dec. 25 DECO HOUSE: Proofs of Claim Verification Is Until Feb. 21, 2008 GALVANI SA: Trustee Verifies Proofs of Claim Until Feb. 27, 2008 SIDECSA SA: Proofs of Claim Verification Ends Feb. 14, 2008 * BUENOS AIRES: S&P Affirms B+ Long-Term Global Scale Ratings B A H A M A S METROPOLITAN BANK: Divests of PHP2.9 Bil. in Foreclosed Assets PETROLEOS DE VENEZUELA: May Finalize Bahama Unit Sale in 10 Days B A R B A D O S HILTON HOTELS: Closes US$500-Million Unsec. Floating Rate Notes B E L I Z E FLOWSERVE CORP: Opens New Quick Response Center in Dubai B E R M U D A CYRUS REINSURANCE: Moody's Rates US$65MM Sr. Secured Loan at Ba1 EAPG LIMITED: Proofs of Claim Filing Deadline Is Dec. 7 EAPG LIMITED: Sets Final Shareholders Meeting for Dec. 28 PITTS BAY: Proofs of Claim Filing Deadline Is Dec. 7 PITTS BAY: Final Shareholders Meeting Is on Dec. 28 REFCO INC: RJM Wants Settlement Pact with FXCM Parties Approved REFCO INC: Judge Drain Approves Settlement Agreement with SPhinX REFCO INC: RCM Distributes US$279.5 Million from SPhinX Proceeds SEA CONTAINERS: Wants Exclusive Period Extended to Feb. 20, 2008 SEA CONTAINERS: Court Approves Payment of Diligence Fees SOLAR FILM: Proofs of Claim Filing Is Until Dec. 7 SOLAR FILM: Will Hold Final Shareholders Meeting on Dec. 28 B O L I V I A * BOLIVIA: Obtains US$22-Million Concessional Loan from IDB B R A Z I L AMR CORP: Plans to Divest American Eagle Division AMR CORP: Fitch Affirms B- Issuer Default Rating w/ Pos. Outlook AMR CORP: Pilot Union Responds to Reported American Eagle Sale BANCO DAYCOVAL: Gets US$115-Million Funding from Int'l Finance BASELL AF: Lyondell Acquisition Prompts Moody's to Lower Ratings BASELL AF: S&P Downgrades Corp. Credit Rating to B+ from BB- BRASKEM SA: Moody's Puts Global Scale Corp. Family Rating at Ba1 COMPANHIA PARANAENSE: Okays BRL792MM Investment Program for 2008 EMI GROUP: S&P Withdraws Low B Ratings MILACRON INC: Okays Changes to 6% Series B Preferred Stock Terms NRG ENERGY: Paying Preferred Stock Dividends on Dec. 17 SANYO ELECTRIC: Earns JPY16 Billion for First Half of Year SOCIEDADE ANONIMA: S&P Lifts Corp. Credit Rating to BB- from B+ TRANSAX INT'L: Sept. 30 Balance Sheet Upside-Down by US$3.3 Mil. UAL CORP: Seeks US$2.055-Billion Term Loan Amendment * BRAZIL: Makes US$1.14 Billion from Oil Block Sale * BRAZIL: Petrobras Wins 3 Blocks in Pernambuco-Paraiba Basin C A Y M A N I S L A N D S ALLIANCE GLOBAL: Proofs of Claim Filing Deadline Is Dec. 14 AVENUE SERIES: Proofs of Claim Filing Is Until Dec. 14 BAMBOO SHIPFINANCE: Proofs of Claim Filing Ends on Dec. 14 CABLE & WIRELESS: Former Chair Criticizes Executive Payoff HUNTER GLOBAL: Proofs of Claim Filing Ends on Dec. 9 HORIZON PORTFOLIO: Proofs of Claim Filing Is Until Dec. 14 MLMI CAYMAN: Proofs of Claim Filing Is Until Dec. 8 MLMI CAYMAN NIM: Proofs of Claim Filing Ends on Dec. 8 ONEWORLD GLOBAL: Sets Final Shareholders Meeting for Dec. 14 PARMALAT SPA: Allocated Shares to Creditors Hike Stock Capital TAKUMI HOLDINGS: Proofs of Claim Filing Deadline Is Dec. 6 UNIFORTUNE PRINCES: Proofs of Claim Filing Deadline Is Dec. 5 C H I L E CONSTELLATION BRANDS: Moody's Puts Ba3 Rating on US$500MM Notes CONSTELLATION BRANDS: S&P Rates US$500-Mln Proposed Notes at BB- C O L O M B I A ECOPETROL: Bogota Stock Exchange Trading Resumes After Delay C O S T A R I C A DENNY'S INC: Credit Repayment Cues S&P to Revise Rating to BB D O M I N I C A N R E P U B L I C AGCO CORP: Selects Servigistics to Plan Global Service Parts ALCATEL-LUCENT: Deploys Optical Network Solution in Hong Kong G U A T E M A L A BRITISH AIRWAYS: Consortium Withdraws Iberia Bidding Interest M E X I C O AMERICAN GREETINGS: To Acquire PhotoWorks for US$26.5 Million ALASKA AIR: Taps Ginny Carruthers as Director of Gov't Affairs CROWN HOLDINGS: Completes Share Repurchase Deal with BNP Paribas DURA AUTOMOTIVE: Court Postpones Confirmation Hearing ENESCO GROUP: IRS Balks at Second Amended Liquidation Plan FEDERAL-MOGUL: Moody's Assigns Corporate Family Rating at (P)Ba3 GRUPO MEXICO: Coal-Fired Project Needs Up to US$600MM Investment MOVIE GALLERY: Panel Taps Imperial Capital as Financial Advisor MOVIE GALLERY: Wants to Pay Obligations to Smaller Suppliers P A R A G U A Y * PARAGUAY: Moody's Reviews Key Ratings for Possible Upgrade P U E R T O R I C O BUMBLE BEE: Moody's Rates Corporate Family Rating at B1 LIN TV: S&P Affirms B+ Corp. Credit Rating with Negative Outlook MICRON TECHNOLOGY: Sets Shareholders Meeting for Dec. 4 ORIENTAL FINANCIAL: Declares US$0.14 Per Common Share Dividend SANTANDER PUERTO RICO: Moody's Revises Outlook to Negative U R U G U A Y DIVINO SA: Moody's Reviews Ba3 & Caa1 Ratings for Likely Upgrade * URUGUAY: Gets US$1.4M Loan to Improve Healthcare System Mgmt. V E N E Z U E L A * VENEZUELA: September Oil Byproducts Sales to US Falls 22% - - - - - ================= A R G E N T I N A ================= AGCO CORP: Picks Servigistics to Plan Global Service Parts ---------------------------------------------------------- AGCO Corporation, whose equipment brand names include Massey Ferguson, Challenger, Valtra, and Fendt, has selected Servigistics to plan the company's service parts globally and to optimize prices in individual markets globally. With hundreds of million in global service parts inventory and 2 million planned SKU's, Agco Corp. will utilize the Servigistics solution to offer dealers competitive prices, enhance customer service, and drive efficiencies across the service parts chain. The company selected the Servigistics solution, which will be integrated to SAP, based on its robust functionality and proven ability to deliver high value to similar, global market-leading companies. "AGCO is devoted to providing our customers with world-class service," said Agco Vice President for Global Parts Division, Bruce Plagman. "With Servigistics, we are investing in the capabilities required to sustain high customer satisfaction." "Companies that maintain high customer loyalty succeed because of the strategic investments they make in service," said Servigistics Chief Executive Officer, Eric Hinkle. "By deploying the Servigistics Service Parts Planning and Pricing solutions, AGCO is making a strong commitment to provide excellent, ongoing service to their customers." About Agco Corp. Headquartered in Duluth, Georgia, Agco Corp. (NYSE: AG) -- http://www.agcocorp.com/-- is a global manufacturer of agricultural equipment and related replacement parts. Agco offers a full product line including tractors, combines, hay tools, sprayers, forage, tillage equipment and implements, which are distributed through more than 3,600 independent dealers and distributors in more than 140 countries worldwide, including Argentina and Brazil. AGCO products include the following brands: AGCO(R), Challenger(R), Fendt(R), Gleaner(R), Hesston(R), Massey Ferguson(R), New Idea(R), RoGator(R), Spra- Coupe(R), Sunflower(R), Terra-Gator(R), Valtra(R), and White(TM) Planters. AGCO provides retail financing through AGCO Finance. The company had net sales of US$5.4 billion in 2005. * * * Agco Corporation's probability of default and long-term corporate family ratings carry Moody's "Ba2" in September 2006. These rating hold to this date. ALITALIA SPA: PM Sees New Owner for 49.9% Stake by Dec. 25 ---------------------------------------------------------- Italian Prime Minister Romano Prodi believes a buyer will be chosen for the government's 49.9% stake in Alitalia S.p.A. by Dec. 25, 2007, Flavia Krause-Jackson writes for Bloomberg News. Transport Minister Alessandro Bianchi said on Nov. 26, 2007, that Italy has no plans to postpone the stake sale to 2008, Bloomberg News relates. Three parties remain in contention for Italy's controlling stake in Alitalia: -- Air France-KLM, -- Deutsche Lufthansa AG, and -- AP Holding S.p.A. OAO Aeroflot will not participate in the process while Cordata Baldassarre's bid was deemed "no longer compatible" to the sale. TPG Capital, meanwhile, was unable to finalize an Italian-led consortium, but will continue to follow the developments of the sale. Alitalia has extended to Dec. 5, 2007, the deadline for submission of non-binding offers and may commence exclusive negotiations with the chosen bidder within the first half of December 2007. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. The Italian government owns 49.9% of Alitalia. The company has operations in Argentina. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. Italian Transport Minister Alessandro Bianchi has warned that Alitalia may file for bankruptcy if the current attempt to sell the government's 49.9% stake fails. DECO HOUSE: Proofs of Claim Verification Is Until Feb. 21, 2008 --------------------------------------------------------------- Hugo Mancusi, the court-appointed trustee for Deco House SRL's bankruptcy proceeding, verifies creditors' proofs of claim until Feb. 21, 2008. Mr. Mancusi will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 14 in Buenos Aires, with the assistance of Clerk No. 28, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Deco House 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 Deco House's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Mr. Mancusi is also in charge of administering Deco House's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Deco House SRL Venezuela 3050 Buenos Aires, Argentina The trustee can be reached at: Hugo Mancusi Avenida Corrientes 3169 Buenos Aires, Argentina GALVANI SA: Trustee Verifies Proofs of Claim Until Feb. 27, 2008 ---------------------------------------------------------------- Marcela Adriana Mazzoni, the court-appointed trustee for Galvani SA's nization proceeding, verifies creditors' proofs of claim until Feb. 27, 2008. Ms. Mazzoni will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 6 in Buenos Aires, with the assistance of Clerk No. 12, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Galvani 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 Galvani's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Creditors will vote to ratify the completed settlement plan during the assembly on Nov. 19, 2008. The debtor can be reached at: Galvani SA Lavalle 1747 Buenos Aires, Argentina The trustee can be reached at: Marcela Adriana Mazzoni Viamonte 1337 Buenos Aires, Argentina SIDECSA SA: Proofs of Claim Verification Ends Feb. 14, 2008 ----------------------------------------------------------- Santiago Leonardo Novick, the court-appointed trustee for Sidecsa SA's bankruptcy proceeding, verifies creditors' proofs of claim until Feb. 14, 2008. Mr. Novick will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 6 in Buenos Aires, with the assistance of Clerk No. 12, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Sidecsa 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 Sidecsa's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Mr. Novick is also in charge of administering Sidecsa's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Sidecsa SA Olazabal 3829 Buenos Aires, Argentina The trustee can be reached at: Santiago Leonardo Novick Libertad 359 Buenos Aires, Argentina * BUENOS AIRES: S&P Affirms B+ Long-Term Global Scale Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services has affirmed its 'B+' long- term foreign and local global scale ratings on the Province of Buenos Aires, Republic of Argentina (B+/Stable/B sovereign credit ratings). The outlook is stable. According to S&P's credit analyst Sebastian Briozzo, the province's budgetary performance is still weak despite high economic growth, highlighting the significant fiscal challenge facing the province. "The pace of fiscal deterioration accelerated in 2007, as expected, in the context of local and national elections in Argentina," said Mr. Briozzo. "Although still early to have a definitive estimate for 2007, the province could finish the year with a deficit close to Argentine peso 1.3 billion, equivalent to about 4.5% of total revenue. However, this deficit will be lower than originally expected due, in part, to compensation received from the federal government," he added. Mr. Briozzo explained that, looking beyond the short term, the province's finances will continue to suffer from structural imbalances at a higher degree than other provinces in Argentina. The combination of low transfers received from the federal government compared with its contribution to the coparticipation pool of funds and a high level of expenditure responsibilities contribute to this vulnerability. "PBA still maintains the highest debt burden among Argentina's rated provinces, at about 128% of total revenue, although since the federal government is the province's main creditor the rollover risk is somewhat diminished," Mr. Briozzo said. "Nonetheless, Standard & Poor's believes that debt service might continue pressuring the province's finances in the short term, given that more than 43.6% of its debt consists of obligations denominated in Coeficiente de Estabilizacion de Referencia and therefore adjusted to inflation," he added. S&P does not expect Daniel Scioli, the elected governor in October 2007 with the support of President Nestor Kirchner and the Peronist Party, to modify materially implementation of public policy in the province. A good relationship with the central government remains essential, given the need for financial assistance. "The stable outlook balances the strength of the economy against the fiscal risk emanating from PBA's structural imbalances," Mr. Briozzo noted. "Deteriorating financial indicators, such as a significant increase in the fiscal deficit above 5% of total revenue, could have a negative impact on the rating, whereas a correction to the fiscal stance would increase the rating's upward momentum," he concluded. ============= B A H A M A S ============= METROPOLITAN BANK: Divests of PHP2.9 Bil. in Foreclosed Assets -------------------------------------------------------------- The Metropolitan Bank & Trust Co. has divested of foreclosed assets valued at PHP2.9 billion during the January-September period, the Philippine Star reports. The foreclosed assets sold are 170% higher than the value of its real and other properties acquired that have been sold in the same period last year, the Star adds. The properties were sold in-house and through the bank's broker and branch network, senior vice president Christine Carandang told the Star, adding that the improved Philippine economy and sustained growth in property development has helped asset sales of Philippine banks. The bank remains optimistic on the prospects of asset disposal activities, Ms. Carandang said. Metropolitan Bank and Trust Company -- http://www.metrobank.com.ph/-- is the flagship company of the Metrobank Group. Metrobank provides a host of deposit, savings, and loan products as well as electronic banking services like Internet banking, mobile banking, and phone banking, as well as its huge ATM network. Metrobank is also the leading provider of trade finance in the country, and its overseas branch network has enabled it to service the fund remittances of Filipino overseas contract workers. The bank has 583 local branches and 35 international branches and offices located in Taiwan, China, Japan, Korea, Guam, United States, Hong Kong, Singapore, Bahamas, and in Europe. * * * As reported on Nov. 6, 2006, that Moody's Investors Service revised the outlook of Metropolitan Bank & Trust Co.'s foreign currency long-term deposit rating of B1 and foreign currency subordinated debt rating of Ba3 from negative to stable. The outlooks for Metropolitan Bank's foreign currency Not-Prime short-term deposit rating and bank financial strength rating of D remain stable. On Sept. 21, 2006, Fitch Ratings upgraded Metrobank's Individual rating to 'D' from 'D/E'. All the bank's other ratings were affirmed: * Long-term Issuer Default rating 'BB-' -- with a stable Outlook; * Short-term rating 'B'; and * Support rating '3. On March 3, 2006, Standard and Poor's Rating Service assigned a CCC+ rating on Metrobank's US$125-million non-cumulative capital securities, whereas Moody's Investors Service Rating Agency issued a B- rating on the same capital instruments. PETROLEOS DE VENEZUELA: May Finalize Bahama Unit Sale in 10 Days ---------------------------------------------------------------- The sale of Venezuelan state-run oil firm Petroleos de Venezuela SA unit Bahamas Oil Refining Co. aka BORCO in Grand Bahama could be finalized in 10 days, Courtnee Romer at The Bahama Journal reports, citing a BORCO official. The official confirmed to The Journal that BORCO has been sold but didn't disclose the new owners of the unit. The Journal relates that Morgan Stanley was reportedly the leading bidder for the oil storage and bunkering terminal from Petroleos de Venezuela. Bidders also included: -- Nu Star Energy, -- Glencore, -- Vitol, -- PetroChina, and -- Petrobas. Meanwhile, sources told Reuters that BORCO could still be bought as early as this weekend by private equity fund First Reserve Corp. Reuters explains that First Reserve wasn't included in the initial list of bidders for BORCO. First Reserve could pay up to US$700 million for BORCO, Nassau's morning news daily Tribune says, citing the sources. Reuters notes that First Reserve wouldn't resume BORCO's oil refining capabilities, "which were mothballed in the mid-1980s" after Petroleos de Venezuela took over the firm. Purchasers wanted to exploit the 208 acres of BORCO's 500-acre site that have never been developed. The official told The Journal that BORCO's 164 workers shouldn't be affected by the sale. BORCO is a profitable entity and the sale was not due to "slow business." According to published reports in September 2007, Petroleos de Venezuela had postponed the sale of BORCO "after Venezuelan officials had indicated that no sale was planned and that the supposed offer had been an exercise to determine BORCO's worth." Petroleos de Venezuela would get more than the previous US$700- million estimate for BORCO due to the "potential for future expansions and the existing condition of the facility." The buyers were committing to invest up to US$700 million in BORCO's expansion, Reuters states, citing the sources. About Morgan Stanley Headquartered in New York, USA, Morgan Stanley is a global financial services firm that, through its subsidiaries and affiliates, provides its products and services to customers, including corporations, governments, financial institutions and individuals. It operates in four business segments: Institutional Securities, Global Wealth Management Group, Asset Management and Discover. About First Reserve First Reserve Corporation is a private equity firm that invests in mid-market energy companies, and currently manages about US$12.5 billion in four funds. Its typical investment ranges from US$50 million to US$500 million. Included in the firm's portfolio are Dresser, Quintana Maritime, and T-3 Energy Services. First Reserve fund investors are primarily corporations, endowments, foundations, and public retirement funds. In 2004 First Reserve acquired Dresser-Rand Group, which it took public in 2005. Later that year, it acquired engineered products maker Chart Industries. About BORCO Bahamas Oil Refining Company International Limited aka BORCO was purchased by Petroleos de Venezuela in 1990 and runs a terminal with 20 million barrels crude oil and products. It had shut down its refining operations in mid-1985 in response to the oil glut on the world market. BORCO continued its oil transshipment operations, however, importing large quantities of oil from the Middle East and Africa for transshipment and for domestic use. In the Bahamas, oil exploration by several international companies began in the early 1980s; marine geologists believed vast deposits of oil and natural gas might be found. 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. As reported on March 28, 2007, Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured long-term credit rating to Petroleos de Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes due 2027, and US$1 billion notes due 2037. =============== B A R B A D O S =============== HILTON HOTELS: Closes US$500-Million Unsec. Floating Rate Notes --------------------------------------------------------------- Hilton Hotels Corporation has completed its previously announced sale of an aggregate principal amount of US$500 million of unsecured Floating Rate Notes due 2013. As reported in the Troubled Company Reporter-Latin America on Nov. 23, 2007, the notes will bear interest equal to three month LIBOR plus 4.50% per year, adjusted quarterly. The proceeds of the sale of the Notes will be used to repay an equal amount of Hilton's secured mezzanine loans incurred in connection with the funding of the acquisition of Hilton by investment funds affiliated with The Blackstone Group and related transactions. The notes have been offered and sold in a private placement to qualified institutional buyers pursuant to Section 4(2) of the Securities Act of 1933, as amended. The notes have not been registered under the Securities Act or securities laws of any state and may not be offered or sold in the United States absent an applicable exemption from registration requirements under the Securities Act or the laws of any state. About Hilton Hotels Headquartered in Beverly Hills, California, Hilton Hotels Corp. -- http://www.hilton.com/-- together with its subsidiaries, engages in the ownership, management, and development of hotels, resorts, and timeshare properties, as well as in the franchising of lodging properties in the United States and internationally, including Australia, Austria, Barbados, Costa Rica, Finland, India, Indonesia, Trinidad and Tobago, Philippines and Vietnam. * * * As reported in the Troubled Company Reporter-Latin America on Oct. 29, 2007, Moody's Investors Service downgraded Hilton Corporation's Corporate Family Rating and senior unsecured ratings to B3 and Caa1, respectively. =========== B E L I Z E =========== FLOWSERVE CORP: Opens New Quick Response Center in Dubai -------------------------------------------------------- Flowserve Corporation has broken ground on its newest Quick Response Center located within the Jebel Ali Free Zone in Dubai, United Arab Emirates. This new location will serve as the regional headquarters for Flowserve's mechanical seal business in the Middle East and will also have a full range of pump repair and packaging capabilities. It will also complement Flowserve's existing joint ventures in Saudi Arabia and other existing service capabilities within the region. On a global front, the new Flowserve QRC will be an addition to Flowserve's growing network of aftermarket service centers and is planned to open in the fourth quarter of 2008. "Establishing the Dubai QRC demonstrates our commitment to our customers in the Middle East region to provide exceptional, locally delivered customer service," said Andrew Beall, president, Flow Solutions Division. "Our goal for our customers is to meet their needs for reduced life cycle costs, increased equipment life and maximized reliability." About Flowserve Quick Response Centers Flowserve's Quick Response Centers are maintenance, repair and manufacturing facilities strategically located throughout the world to provide our customers with local support to help improve reliability of their rotating equipment. They offer personal service, expertise and responsiveness to keep customers equipment operating at peak performance. About Flowserve Headquartered in Irving, Texas, Flowserve Corp. (NYSE: FLS) -- http://www.flowserve.com/-- provides fluid motion and control products and services. Operating in 56 countries, the company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. In Latin America, Flowserve operates in 36 countries such as the Dominican Republic, Guatemala, Guyana and Belize. * * * As reported in the Troubled Company Reporter-Latin America on Aug. 20, 2007, Moody's Investors Service affirmed Flowserve Corporation's corporate family rating at Ba3 and probability of default at B1. Moody's also affirmed the Ba2 rating to the company's senior secured term loan and assigned a Ba2 rating to Flowserve's senior secured revolving credit facility. ============= B E R M U D A ============= CYRUS REINSURANCE: Moody's Rates US$65MM Sr. Secured Loan at Ba1 ---------------------------------------------------------------- Moody's has assigned these ratings to three proposed bank loans of Cyrus Reinsurance II Limited: Ba1 to the US$65 million senior secured term loan, Ba3 to the US$20 million senior subordinated secured term loan, and B3 to the US$20 million junior subordinated secured term loan. "Cyrus Re II is a type of limited purpose reinsurer that is commonly referred to as a 'sidecar'," explains senior analyst Kevin Lee. "The sidecar will be capitalized with US$35 million of equity and US$105 million of term loans (75% debt, 25% equity)," notes Mr. Lee. "The term loans are arrayed in tranches, each having a different probability of attachment, expected loss, and priority with respect to interest and principal payments, hence the difference in ratings." Cyrus Re II is expected to provide collateralized quota share coverage exclusively to two subsidiaries of XL Capital Ltd -- XL Re Ltd (Aa3/stable) and XL Re Europe Ltd. If the quota share agreement is executed, the Ceding Companies will pass on (cede) -- and Cyrus Re II will assume -- 10% of the premiums and losses on a future portfolio of non-proportional catastrophe reinsurance contracts. Those underlying contracts will be written in 2008 and will cover natural catastrophe risks throughout the world. The future portfolio is expected to be similar to the Ceding Companies' existing portfolio as client retention tends to be relatively high. This quota share agreement, if executed, will be distinct and separate from the Ceding Companies' previous sidecar, Cyrus Reinsurance Limited. The ratings for the term loans are supported by Moody's financial modeling to determine both the probability of default and expected loss to lenders. The most important inputs into the financial model are the annual aggregate probability loss curve derived by the Ceding Companies, premium assumptions, and investment income assumptions. Moody's applied stress factors and performed sensitivity analysis on all three inputs. The PDs and ELs from our simulation runs were then compared to Moody's idealized default rates and expected loss rates over a weighted average life of about 1.7 years for each loan. Finally, the assigned ratings also reflect, in our opinion, sufficient alignment of interests between stakeholders. Key rating factors include: 1) Model Risk: Catastrophe modeling error is the most important risk factor. The Ceding Companies modeled their existing portfolio using RMS 6.0 peril models that are common in the industry. Parameter uncertainty, the quality of input data, and how the models are used can all contribute to modeling error. In general, the current portfolio is diversified with respect to geography and layers of coverage. A majority of the current portfolio consists of personal lines and standard commercial risks, which generally offer more homogeneous data than industrial and surplus lines risks. The Ceding Companies receive exposure data from clients or brokers for nearly all underlying contracts, allowing the Ceding Companies to duplicate the modeling work with all discretionary settings applied. One notable exception is assumed retrocession business (2.5% of current portfolio limits), for which exposure data isn't available, but is nonetheless modeled by the Ceding Companies. Many of the covered perils are modeled using RMS 6.0 peril models. European Flood, European Earthquake and attritional losses are modeled using in-house curve fitting methods. Moody's has applied a moderate load to the Base Curve to account for these elements: 1) potential deviations from the expected portfolio; 2) difficult-to-model classes of business such as industrial and surplus lines risks (estimated to be roughly 20% of current portfolio limits); 3) non-modeled contract elements such as loss adjustment expenses and extra-contractual obligations; 4) inherent uncertainty in peril modeling especially as it relates to perils like earthquakes where little historical data is available for model calibration; and 5) a small load for perils that are not modeled by any methods such as volcanic eruption, meteorite impact, tsunami, domestic terrorism and industrial/residential conflagration. 2) Defaults are Sensitive to Rate and Investment Income Assumptions: Moody's analysis suggests that default rates and expected loss rates to debt holders are sensitive to assumptions about premium rates and investment yields. This is fairly intuitive given that equity capital is thin (75% debt, 25% equity) and tranche attachment points are relatively low. That is to say, investors will have to rely more on premium income and investment income to defray losses. Premium rates in 2008 are uncertain. In Moody's financial modeling, Moody's have modeled for the possibility that rates may fall up to 20% from their 2007 levels. Additionally, Moody's have modeled investment returns stochastically. 3) Alignment of Interests: In Moody's opinion, there is adequate alignment of interests between stakeholders given that the Ceding Companies will retain 90% of premiums and losses with ample skin in the game. Additionally, any reinsurance purchased by the Ceding Companies for its retained portfolio would inure to the benefit of the sidecar. Dividend distributions to shareholders are prohibited, mitigating some of our concerns about the highly levered capital structure. 4) Cash Waterfall: At each quarterly interest payment date, trust assets that exceed loss reserves and a reserve cushion can be released to pay interest. However, capacity must exist to fully pay all remaining scheduled interest and principal on the senior secured term loans before any trust capital can be released to pay interest and principal on the senior subordinated or junior subordinated loans. The same rule applies to the priority of payments between the senior subordinated and junior subordinated loans. This cash waterfall is reflected in Moody's financial modeling. These ratings have been assigned with a stable outlook: * Cyrus Reinsurance II Limited -- $65 million senior secured term loan at Ba1; * Cyrus Reinsurance II Limited -- $20 million senior subordinated secured term loan at Ba3; * Cyrus Reinsurance II Limited -- $20 million junior subordinated secured term loan at B3. Cyrus Reinsurance II Holdings SPC is majority-owned by investment funds affiliated with Highfields Capital Management LP. Its subsidiary, Cyrus Reinsurance II Limited, is a Class 3 Bermuda reinsurer that is expected to enter into a collateralized quota share reinsurance treaty with XL Re Ltd and XL Re Europe Ltd. The treaty will cover policies incepting between Jan. 1, 2008 and Jul. 1, 2008. Lenders will be at risk for events occurring between Jan. 1, 2008 and Jul. 1, 2009. Capital cannot be returned to investors before September 1, 2009 and equity capital cannot be returned to shareholders until all three loans have been repaid. EAPG LIMITED: Proofs of Claim Filing Deadline Is Dec. 7 ------------------------------------------------------- EAPG Limited's creditors are given until Dec. 7, 2007, to prove their claims to Robin J. Mayor, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. EAPG's shareholder agreed on Nov. 21, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda EAPG LIMITED: Sets Final Shareholders Meeting for Dec. 28 --------------------------------------------------------- EAPG Limited will hold its final shareholders meeting on Dec. 28, 2007, at 9:30 a.m., at: Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, Bermuda These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. PITTS BAY: Proofs of Claim Filing Deadline Is Dec. 7 ---------------------------------------------------- Pitts Bay Trading Ltd.'s creditors are given until Dec. 7, 2007, to prove their claims to Robin J. Mayor, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Pitts Bay's shareholder agreed on Nov. 19, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda PITTS BAY: Final Shareholders Meeting Is on Dec. 28 --------------------------------------------------- Pitts Bay Trading Ltd. will hold its final shareholders meeting on Dec. 28, 2007, at 9:30 a.m., at: Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, Bermuda These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. REFCO INC: RJM Wants Settlement Pact with FXCM Parties Approved --------------------------------------------------------------- RJM, LLC, as plan administrator to Reorganized Refco Inc. and its affiliates, and Marc S. Kirschner, as plan administrator to Refco Capital Markets, Ltd., ask the U.S. Bankruptcy Court for the Southern District of New York to approve their settlement agreement with Forex Capital Markets, LLC, Forex Trading LLC, FXCM Canada Ltd., FXCM LLC, David Sakhai, William Ahdout, Kenneth Grossman, Michael Romersa, and Edward Yusupov. Refco Group Ltd., a Reorganized Debtor, holds a 35% equity interest in Forex Capital Markets, LLC. Pursuant to the Plan, RJM has authority to exercise all rights of the Debtors in respect of RGL's 35% interest in FXCM, including all rights related to its liquidation or disposition. Certain entities have agreed to purchase RGL's 35% equity interest in FXCM. The names of the entities are withheld for confidentiality purposes, according to Steven Wilamowsky, Esq., at Bingham McCutchen LLP, in New York. The sale of RGL's interest is subject to the requirement that certain claims against the Debtors and RCM be resolved. The parties' Settlement Agreement provides that: a. The Plan Administrators will seek Court approval allowing the claims filed by the FXCM Parties: 1. Claim No. 9140, to be allowed as a Class 6 FXA Convenience Class Claim for US$3,290.87; 2. Claim No. 9870, to be allowed as a Class 5(a) FXA General Unsecured Claim for US$8,281,529.63; 3. Claim No. 9871, to be allowed as a Contributing Debtor Class 5(a) General Unsecured Claim for US$8,281,529.63. b. The Plan Administrators ask Court to expunge FXCM Parties' 31 other claims -- Claim Nos. 6629, 6630, 6631, 6632, 6633, 6634, 6635, 6636, 6637, 7564, 7566, 7568, 7569, 7570, 7571, 7572, 14268, 14269, 14270, 14271, 14272, 14273, 14274, 14275, 14276, 14427, 14428, 14429, 14430, 14431, 14432. Jeffrey M. Olinsky, Esq., at Bingham McCutchen LLP, in New York, New York, says the Plan Administrators have carefully reviewed the claims filed by the FXCM Parties, as well as the books and records of the Reorganized Debtors and RCM as they relate to the claims. The Plan Administrators believe that Claim Nos. 9140, 9870 and 9871 are properly allowable at the amounts set, and the rest of the FXCM Parties' claims should be expunged. Mr. Olinsky says the FXCM Parties agree that the 31 other claims should be expunged. "Expunging these other claims will eliminate 31 claims against the Reorganized Debtors' and RCM's estates that seek damages based on alleged fraudulent conduct of the Debtors." Mr. Olinsky tells the Court the Agreement will result in proceeds from the sale of RGL's 35% equity interest in FXCM becoming available for distribution to creditors of the Contributing Debtors. A full-text copy of the FXCM Settlement Agreement is available for free at http://bankrupt.com/misc/FXCMsettlementAgreement.pdf About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. Refco has operations in Bermuda. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 73 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Judge Drain Approves Settlement Agreement with SPhinX ---------------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York approved a settlement and release agreement entered into by: -- Refco Inc., and its debtor and non-debtor affiliates; Marc S. Kirschner, as the plan administrator for Refco Capital Markets, Ltd.; and RJM, LLC, as plan administrator for the Reorganized Debtors except RCM; and -- SPhinX Managed Futures Fund SPC, its affiliated Segregated Portfolios and various affiliated entities; Kenneth M. Krys and Christopher Stride, in their capacity as the Joint Official Liquidators of SPhinX; the SPhinX Trustee; and certain SPhinX investors. Judge Drain directed the RCM Administrator to distribute the Settlement Funds to RCM's creditors.. Judge Drain also withdrew the Restraining Order, and waived Rule 6004(h) of the Federal Rules of Bankruptcy Procedure to the extent applicable. SphinX Settlement Agreement Jessica L. Fink, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, related that in 2005, the Official Committee of Unsecured Creditors of the Debtors, on behalf of RCM, sought to recover US$312,046,266 in preferential transfers to SPhinX and its affiliated Segregated Portfolios. To settle the dispute with the Committee, SPhinX had agreed to pay US$263,000,000 to RCM's estate, which the SPhinX Investors opposed. The Bankruptcy Court had approved the SPhinX Settlement over the objection, ruling that it was in the best interests of RCM, its estate, and its creditors, and that the Investors lacked standing to object. The Investors had appealed to the District Court for the Southern District of New York, but the District Court affirmed the Bankruptcy Court's ruling. Ms. Fink notes that in June 2006, SPhinX went into voluntary liquidation under the court of the Cayman Islands, and Mr. Krys and Mr. Stride were appointed as its Joint Official Liquidators. The Investors, as well as the SPhinX Liquidators, appealed the District Court Order to the United States Court of Appeals for the Second Circuit. The Second Circuit recently affirmed the District Court's decision, Ms. Fink related. The Second Circuit held that the Investors lacked standing to appeal, and that the Liquidators were precluded from appealing because they were deemed to be parties to SPhinX. According to Ms. Fink, the Settlement Funds are currently being held by the RCM Plan Administrator in a segregated account at RCM, pending the entry a final order approving the SPhinX Settlement. Ms. Fink added that the Settlement and Release Agreement has been discussed with and approved by customers holding approximately 50% of the allowed RCM securities customer claims. The parties have agreed that: (a) the RCM Plan Administrator and the SPhinX Liquidators will take all steps necessary to seek approval of the Agreement by the Cayman Court and the Bankruptcy Court, respectively; (b) upon approval of the Agreement, the RCM Plan Administrator is authorized to release and distribute the Settlement Funds; (c) the RCM Plan Administrator will pay to the Liquidators, on behalf of SPhinX, a US$2,500,000 appeal settlement payment; (d) the Liquidators, the SPhinX Investors, and the SPhinX Trustee will not file further appeals, or any motions for reconsideration, of the Settlement Approval Order; (e) the Liquidators will withdraw their motion for rehearing, currently pending before the Second Circuit; (f) Claim Nos. 11387 and 11378, filed by SPhinX against RCM will be allowed as general unsecured claims for US$4,312,945 and US$10,352,310, respectively, in RCM's Chapter 11 case; (g) all other claims filed by the parties are deemed disallowed and expunged; and (h) the parties exchange mutual releases from all claims or actions arising from the preferential transfers or the appeal of the SPhinX Settlement. Ms. Fink stated that the Settlement Funds will be distributed to RCM securities customers, pursuant to the Modified Joint Chapter 11 Plan of Refco Inc. and Certain of its Direct and Indirect Subsidiaries. The Appeal Settlement Payment will be deducted solely from the Settlement Funds, and will not impact recoveries to non-securities customers. Ms. Fink maintained that the terms embodied in the Agreement represents a reasonable settlement of the issues between the parties, and should be approved. A full-text copy of the Settlement and Release Agreement between Refco and SPhinX is available at no charge at: http://bankrupt.com/misc/RefcoSphinxSettlementRelease.pdf About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. Refco has operations in Bermuda. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 73 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: RCM Distributes US$279.5 Million from SPhinX Proceeds ---------------------------------------------------------------- Pursuant to a settlement agreement by Refco Capital Markets, Ltd., all holders of Allowed Class 4 RCM Securities Customer Claims are entitled to receive their pro rata portion of the proceeds from the settlement with the SPhinX entities, which has become available for distribution. In this connection, Marc S. Kirschner, Plan Administrator for the Refco Capital Markets, Ltd. estate, notified the U.S. Bankruptcy Court for the Southern District of New York that on Nov. 16, 2007, he made the sixth interim distribution of approximately US$279,500,000 of RCM's Assets in Place, resulting from the Net Sphinx Proceeds. Each claimant is entitled to its pro rata share of the Proceeds. The RCM Administrator notes that two creditors will be capped at 100% recovery from the Distribution. To date, the RCM Administrator has made five interim distributions from Assets in Place, aggregating to recoveries of US$1,890,000,000, and another two interim distributions from Additional Property, resulting in recoveries of US$344,700,000. A list of the claims for the Sixth Interim Distribution is available at no charge at: http://bankrupt.com/misc/Refco6thInterimDistClaims.pdf About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. Refco has operations in Bermuda. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 73 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Wants Exclusive Period Extended to Feb. 20, 2008 ---------------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive periods to file a Chapter 11 plan through and including Feb. 20, 2008, and to solicit acceptances of that plan through and including April 19. Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, relates that since their last request to extend the exclusive periods, the Debtors have made substantial progress towards developing a viable chapter 11 plan. In particular, Mr. Greecher says, the Debtors have: (a) stabilized their business operations; (b) disposed of certain non-core assets, thereby bringing in cash proceeds to the estates; (c) addressed complex intercompany issues; (d) reached a settlement regarding the Company's corporate headquarter's lease; (e) obtained Court approval for additional funding for Sea Containers Treasury Limited, the Company's non-debtor vehicle, to fund non-debtor subsidiary operations; (f) obtained replacement financing for Sea Containers SPC Ltd.'s prepetition securitization facility in the form of DIP financing; and (g) obtained approval for exit financing to pay certain due diligence fees and expenses. Nonetheless, Mr. Greecher continues, the resolution of two critical issues remain to complete preparation of a Plan Reorganization: (1) settlement of the Debtors' pension scheme liabilities; and (2) factoring in the upcoming decision on the change of control arbitration. Both issues are at the verge of conclusion, Mr. Greecher assures the Court. The Debtors have also initiated discussions with the creditors committees on potential chapter 11 plan alternatives, Mr. Greecher adds. To resolve issues with regard to the pension scheme liabilities, the Debtors have facilitated and mediated discussions among the creditors committees and the pension trustees, while supplying all parties with extensive due diligence and other information regarding the status of the Pension Trustee's claims. Mr. Greecher reports that negotiation has now reached a critical juncture. In fact, recently, the parties have significantly narrowed their differences on the status of the Pension Trustee's claims, and intensive discussions are continuing, he explains. As for the progress in the change of control arbitration with GE Capital, the Debtors undertook discovery and prepared for, defended, and took depositions, related to the change of control dispute in August and September 2007. The Debtors' extensive preparation of the change of control arbitration culminated in hearings conducted in mid- and late October, ultimately concluding on Nov. 5. The parties now have submitted post-hearing briefs and expect a decision from the arbitrator no later than mid-December, Mr. Greecher says. According to Mr. Greecher, the arbitrator's decision will influence which of the various plan alternatives the Debtors will ultimately pursue. The outcome of the change of control arbitration will also facilitate the Debtors' efforts to obtain exit financing by giving the Debtors' potential exit lenders a better view of the Debtors' exit Plan. The Debtors believe that continued exclusivity will allow space to finally resolve the two ongoing issues. Terminating exclusivity, and introducing the prospect of a competing plan will only distract all parties concerned, the Debtors add. The Debtors further note that the requested extension of the Exclusive Periods will allow them to reach a final resolution, and propose a confirmable plan. Conversely, failure to obtain the requested extension may unravel the resolutions the Debtors have worked to obtain and engender costly litigation that would consume the estate, delay their emergence from chapter 11, and deplete the funds available for distribution to creditors. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- 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, 2007, 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). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of US$62,400,718 and total liabilities of US$1,545,384,083. The Debtors' exclusive period to file a chapter 11 plan expires on Dec 21, 2007. (Sea Containers Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Court Approves Payment of Diligence Fees -------------------------------------------------------- The Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware authorized Sea Containers Ltd. and its debtor-affiliates to pay the due diligence fees or expenses of potential exit lenders up to a maximum amount of US$500,000 per lender and US$1,500,000 in the aggregate. The amount is for reasonable expenses incurred in connection with financial and legal due diligence and development of exit financing proposals that relate to taking out the existing DIP loan upon the Debtors' emergence from Chapter 11. The Order is entered without prejudice to the Debtors' right to seek authority to pay additional expenses or fees related to exit financing as the Debtors believe are reasonable and necessary, Judge Carey said. Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, related that the Debtors are in the process of formulating a Chapter 11 plan and intend to commence their exit from Chapter 11 by filing their plan, disclosure statement, and related materials in the near term. Under any plan scenario, Mr. Morton said, exit financing to repay the DIP loan and provide going-forward capital is an essential component of this process. For these reasons, the Debtors are currently pursuing exit financing from various lenders and are aiming to secure a commitment to fund their exit from Chapter 11. To make a financing commitment, however, potential exit lenders will have to conduct extensive due diligence of the Debtors' assets and operations, thereby incurring significant out-of- pocket costs and expenses, including fees and expenses of their legal and other advisors. To induce potential exit lenders to undertake the expensive and time-consuming work required for an exit financing commitment, the Debtors believe it is necessary to pay the reasonable and actual out-of-pocket costs and expenses they incur in connection with developing, negotiating, and documenting the financing commitment. Without this inducement -- which is a quite common request under the circumstances -- potential exit lenders will not undertake the work needed to complete a financing commitment, thus leaving the Debtors without an exit facility required for their Chapter 11 plan, Mr. Monton explained. He further noted that the Debtors have already received interest from Dune Capital LP and Caspian Capital Partners LP to provide exit financing, but they are unwilling to proceed further unless they are reimbursed for their out-of-pocket costs and expenses associated with their due diligence review ofthe Debtors. In addition to Dune and Caspian, the Debtors hope to pursue exit financing negotiations with other lenders. Parallel negotiations with multiple potential exit lenders will ensure that the Debtors obtain financing with competitive terms, Mr. Monton said. The Debtors believe that the requested expense reimbursement is reasonable for the proposed collateral base, which will include all of the Debtors' assets, including their interests in GE SeaCo and the large network of foreign and U.S. non-debtor subsidiaries, and the fact that the expenses routinely are reimbursed both in and outside of bankruptcy. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- 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, 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). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of US$62,400,718 and total liabilities of US$1,545,384,083. The Debtors' exclusive period to file a chapter 11 plan expires on Dec 21, 2007. (Sea Containers Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SOLAR FILM: Proofs of Claim Filing Is Until Dec. 7 -------------------------------------------------- Solar Film Corporation Ltd.'s creditors are given until Dec. 7, 2007, to prove their claims to Robin J. Mayor, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Solar Film's shareholders agreed on Nov. 21, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda SOLAR FILM: Will Hold Final Shareholders Meeting on Dec. 28 ----------------------------------------------------------- Solar Film Corporation Ltd. will hold its final shareholders meeting on Dec. 28, 2007, at 9:30 a.m., at: Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, Bermuda These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. ============= B O L I V I A ============= * BOLIVIA: Obtains US$22-Million Concessional Loan from IDB ----------------------------------------------------------- The Inter-American Development Bank has approved a US$22 million concessional loan to Bolivia for a program to improve storm drainage in La Paz. "The goal of the program is to help improve the quality of life in the city of La Paz and reduce human losses and property damage caused by severe storms," said IDB Team Leader Coral Fernandez Illescas. "The Storm Drainage Master Plan for La Paz calls for interventions in the city's five main watersheds," she added. "Since there are different problems in each watershed and repetitive measures must be taken to address each one, the project was designed as a multiple-works investment program." The resources will be used mainly for flood and erosion control. The project also includes activities for environmental management and institutional strengthening to improve urban management and planning related to the storm drainage system and urban growth to ensure the sustainability of the investments. The municipal government of La Paz will carry out the project. * * * As reported in the Troubled Company Reporter-Latin America on Nov 6, 2007, Standard & Poor's Ratings Services revised its outlook on the Republic of Bolivia to stable from negative. S&P also said that it affirmed its 'B-' long-term and 'C' short-term credit ratings on the sovereign. =========== B R A Z I L =========== AMR CORP: Plans to Divest American Eagle Division ------------------------------------------------- AMR Corporation, the parent company of American Airlines Inc., plans to divest American Eagle, its regional carrier. AMR, which has been engaged in an ongoing strategic value review process, relates that a divestiture of American Eagle is in the best interests of AMR and its shareholders and will be beneficial to American, American Eagle, their employees, and other stakeholders. The divestiture of American Eagle is intended to provide it with the structure, incentives and opportunities to win new business and provide new opportunities for American Eagle's employees. AMR also stated that the divestiture will enable American to focus on its mainline business, while ensuring American's continued access to cost-competitive regional feed. Once the two airlines are separated, it is expected that they will operate pursuant to a mutually beneficial air services agreement under which American Eagle will continue to provide American with regional flying of a scope and quality comparable to that provided prior to the separation and on terms that reflect today's market for those services. AMR evaluates the form of the divestiture, which may include a spin-off to AMR shareholders, a sale to a third party, or some other form of separation from AMR. The company expects to complete the divestiture in 2008; however, the completion of any transaction and its timing will depend on a number of factors, including general economic, industry and financial market conditions, well as the ultimate form of the divestiture. "The decision comes after a careful and deliberate evaluation of the strategy that will best enable us to continue to create value for our shareholders," Gerard Arpey, AMR Chairman and CEO, said. "We have worked hard over the years to build a regional airline that is fully capable of standing on its own and is well positioned to pursue growth opportunities outside of the AMR corporate structure." Mr. Arpey noted that, in addition to AMR having put in place an independent American Eagle management structure, with a chief executive officer and chief financial officer, American Eagle also has a well-formed operational structure and organization and has produced independently audited financial results for the past several years. Earlier this year, American and American Eagle entered into a new regional flying agreement between the airlines that reflects market-based rates, which ensures that American continues to have access to quality feed on competitive terms. Mr. Arpey added that AMR's divestiture of American Eagle and the regional airline's ability to provide quality feed at competitive rates to other carriers, well as American, will better position American Eagle to compete for new customers and growth opportunities in the future. American Eagle is a fully developed operating unit providing a full range of regional airline services with excellent employees and a modern fleet. It operates approximately 300 aircraft, with approximately 1,700 daily flights to more than 150 cities throughout the United States, Canada, the Bahamas, the Caribbean and Mexico. In 2007, American Eagle expects to generate annual revenues of approximately US$2.3 billion. The planned divestiture would include both American Eagle Airlines Inc., which feeds American Airlines hubs throughout North America, and its affiliate, Executive Airlines Inc., which carries the American Eagle name throughout the Bahamas and the Caribbean from bases in Miami and San Juan, Puerto Rico. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia, including Belgium, Brazil, Japan, among others. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. AMR CORP: Fitch Affirms B- Issuer Default Rating w/ Pos. Outlook ---------------------------------------------------------------- Fitch has affirmed AMR Corp. and its principal operating subsidiary, American Airlines, Inc.'s Issuer Default Ratings at 'B-' on Nov. 13, 2007, while revising the Rating Outlook for AMR Corp. to Positive. Following the announcement by AMR Corp. that it intends to divest its American Eagle Holding Corp. subsidiary in 2008, Fitch expects no near-term impact on the debt ratings of the company and its subsidiary, American Airlines, Inc. Since AMR Corp.'s announcement simply reflects the airline's desire to pursue an American Eagle divestiture without specific details on any prospective deal terms or the likely allocation of cash proceeds, the credit quality implications of any future transaction are still uncertain. Moreover, there is a real possibility that an acceptable transaction will not be closed in 2008 given uncertainties over the durability of the industry's revenue recovery and the persistence of record-high jet fuel prices. Fitch expects margin pressure at regional airline operators such as American Eagle to continue as a result of higher unit operating expenses (especially for smaller regional jets of 50 seats and below) and a softening United States macroeconomic environment that will likely make domestic unit revenue comparisons difficult in 2008. Should cash proceeds from any Eagle divestiture be directed toward debt reduction at the parent or American Airlines, Inc., the mainline carrier's credit profile could improve. AMR Corp. has already announced plans to pre-pay approximately US$545 million of secured aircraft debt in the fourth quarter. However, most or all of the proceeds could be returned to shareholders without incremental leverage reduction. American Eagle and its Executive Airlines affiliate are expected to generate 2007 revenues of approximately US$2.3 billion, and Fitch estimates that approximately US$2.6 billion of secured debt resides at the American Eagle Holding Corp. subsidiary. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia, including Belgium, Brazil, Japan, among others. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR Corp., is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. AMR CORP: Pilot Union Responds to Reported American Eagle Sale -------------------------------------------------------------- Captain Herb Mark, chairperson of the American Eagle pilots union, a unit of the Air Line Pilots Association, Int'l, has released these statement in response to AMR Corp.'s announcement of the sale of its wholly owned subsidiary American Eagle. "This afternoon, American Eagle management and AMR Holdings have announced their intention to sell American Eagle, the nation's largest regional airline. At this time we are awaiting a meeting between ALPA and management at which time they can explain the business rationale for this decision. We fully expect management to keep us informed every step of the way and welcome our participation. This will ensure that any transaction results in a viable airline that honors the commitment of union pilots." Capt. Mark said, "Any new ownership would be subject to our existing collective bargaining agreement, which contains protections for our pilots in the event of a sale or merger." "Regardless of who owns American Eagle, nothing is more important to ALPA than resolving the issues that have created strained labor relations between the pilots and management. For several years pilots have been forced to fly more hours in a day because of understaffing. The staffing shortage has led to exhausting flight schedules, causing our pilots to sacrifice needed rest in order to meet the company's bottom line." Capt. Mark added. "ALPA wants our management, potential buyers, and the flying public to know that the American Eagle pilots are largely responsible for the continued success of this airline," Capt. Mark said. "We fully expect that our sacrifices will be respected and rewarded as we become a partner in whatever lies ahead." Capt. Mark concludes, "We welcome this kind of cultural change. We will keep a close eye on the developments concerning the sale of American Eagle, and will carefully evaluate the details as they become available." About Air Line Pilots Association, International Founded in 1931, Air Line Pilots Association International is the world's largest pilot union representing more than 60,000 pilots at 42 airlines in the U.S. and Canada. American Eagle is a wholly owned subsidiary of AMR Corp. and provides feed to American Airlines as well as point-to-point service in North and Central America and the Caribbean. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on Nov. 15, 2007, Fitch Ratings affirmed the debt ratings of AMR Corp. and its principal operating subsidiary American Airlines Inc., as: (i)AMR: issuer default rating at 'B-'; and senior unsecured debt at 'CCC'/RR6'; (ii)American Airlines: issuer default rating at 'B- '; secured bank credit facility at 'BB-/RR1'. Fitch has revised the Rating Outlook for both AMR and American to positive from stable. BANCO DAYCOVAL: Gets US$115-Million Funding from Int'l Finance -------------------------------------------------------------- Banco Daycoval said in a statement that it has secured about US$115 million in financing through the International Finance Corp. According to Banco Daycoval's statement, the International Finance will grant a US$30-million, five-year loan directly to Banco Daycoval in the next two weeks. It will also coordinate a US$85-million syndicated loan with 10 banks, helped by Brazilian investment bank Itau BBA. Banco Daycoval will use the funds to boost lending to small and medium-sized enterprises, with at least 50% of the money allocated for businesses "beyond the more affluent southeast," Business News Americas relates. Headquartered in Sao Paulo, Brazil, Banco Daycoval started its activities in 1968, with the creation of Daycoval DTVM and Valco Corretora de Valores. Brothers Ibrahim and Sasson Dayan control the bank. It is the core business of its shareholders and specialises in financing small- and medium-sized companies, backed by receivables. It also operates with consignment lending for payroll deduction and consumer financing. Since June 2007, the bank has had 29% of its shares traded at Bovespa on the New Brazilian Stock Market. These shares enjoy a tag- along privilege, giving minority shareholders 100% of the value of the block of controlling shares in the event of the sale of the institution. As reported in the Troubled Company Reporter-Latin America on Nov. 27, 2007, Fitch Ratings assigned Banco Daycoval S.A. these ratings: -- Long-term foreign currency Issuer Default Rating 'BB-'; Outlook Stable -- Long-term local currency IDR 'BB-'; Outlook Stable -- Short-term foreign currency IDR 'B' -- Short-term local currency IDR 'B' -- Individual rating 'C/D' Banco Daycoval's other ratings are National Long-term rating 'A(bra)' with Positive Outlook, National Short-term rating 'F1(bra)' and Support rating '5'. BASELL AF: Lyondell Acquisition Prompts Moody's to Lower Ratings ---------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating of Basell AF SCA to B1 to reflect its on-going acquisition of the Lyondell Chemical Company. Moody's downgraded legacy US$300 million 2027 notes issued at Basell Finance Company from B2/LGD5 (84) to B3/LGD6 (90) and legacy US$615 million and EUR500 million 2015 notes issued at Basell AF SCA from B2/LGD5 (84) to B3/LGD6 (90). Moody's downgraded legacy 2026 7.55% notes issued at Lyondell Chemical from B1/LGD4 (64) to B3 /LGD5 (84), legacy 2026 7.625% notes issued at Millennium America Inc. from B1/LGD4 (66) to B3/LGD 6 (96). The legacy 2010 10.25% notes issued at Lyondell Chemical Worldwide, Inc. were downgraded from B1/LGD5 (73) to B3/LGD6 (96) and legacy 2020 9.8% notes issued at Lyondell Chemical Worldwide were downgraded from B1/LGD5 (73) to B3/LGD6 (96). Moody's also assigned (P)Ba2/LGD2 (27) rating to the new US$12.450 billion in senior secured first lien facilities (including US$1 billion revolver) , (P)B2/LGD5 (74) to US$5.5 billion senior secured second lien facilities and (P)B3 / LGD 6(90) to the proposed US$2.5 billion senior unsecured notes supporting the proposed US$20 billion acquisition of Lyondell Chemical (including refinancing of some of the existing obligations and the transaction costs). The outlook is stable. Moody's issues provisional ratings on the new facilities in advance of the final sale of securities, and these ratings only represent Moody's preliminary opinion. Upon a conclusive review of the transaction and associated documentation, Moody's will endeavor to assign definitive ratings to the securities. A definitive rating may differ from a provisional rating. Moody's notes that following the approval of the proposed acquisition by the shareholders of Lyondell on Nov. 20, 2007, Lyondell has launched a cash tender offer for its remaining publicly traded obligations. Following the refinancing, Moody's will withdraw the ratings on the repaid instruments. Background This rating action concludes the review of Basell ratings initiated on June 26, 2007 following the announcement by the company that it has signed a definitive agreement to acquire Huntsman Corporation, and following further its announcement on July 17, 2007, that it has signed a definitive agreement to acquire Lyondell Chemical Co., as Huntsman has accepted a competing offer by Hexion Specialty Chemicals Inc. and has terminated the agreement with Basell. Basell will pay US$48 per share of Lyondell and assume all debt of the US company which will become its subsidiary. The acquisition is expected to be financed with debt. At the end of 2007, the combined group is expected to have c. US$23.7 billion of debt. This will include approximately US$11.5 billion outstanding under the committed senior secured 1st lien facilities, approximately US$2.0 billion raised under its existing and new securitization and accounts receivables asset backed facilities, and US$5.5 billion in senior secured 2d lien notes and US$2.5 billion senior unsecured notes, as well as some of the legacy liabilities of Basell and Lyondell. The company expects to close the transaction by the end of 2007. Rating Rationale Following the acquisition of Lyondell, Basell will become one of the largest independent chemical groups with estimated pro-forma 2007 Revenues in excess of US$40 billion and EBITDA of US$4.8 billion reflecting strong performance of Lyondell and Basell businesses at this phase of the mature cycle. The group will focus on commodities and refining and is expected to derive 29% of its 2007 pro-forma EBITDA from refining, 46% from its olefins and polyolefins and 15% from propylene oxide. Basell's technology and advance polyolefins businesses are estimated to contribute 10% of its 2007 PF EBITDA. Moody's notes that following its LBO in 2005, Basell capitalized on the extended cyclical upturn in the polyolefins market and utilised its strong cash flow generation to reduce its LBO debt and strengthen the balance sheet. The downgrade of Basell's corporate family rating reflects Moody's concern with regard to the substantial absolute amount of debt assumed by the combined group at this stage of the extended petrochemical cycle. Moody's estimates that following the closing, the company's leverage will approach 5 times PF EBITDA on a non-adjusted basis, supported by strong performance of the company and a sustained strength in the Lyondell business in 2007. Furthermore, Moody's expects Basell to make a follow up US$700 m acquisition in 1H 2008 (to be substantially funded with the proceeds of the committed senior secured facilities), as well as some small bolt on acquisitions. The rating, however, is underpinned by the expectation of a resolute deleveraging in the first 18 months and US$420 million in synergies that the group plans to realise in 2008-2010 that should allow Basell to maintain credit metrics consistent with the assigned rating. Although dividend restrictions and a cash flow sweep envisaged by the structure provide for a strict usage of the cash flow, Moody's cautions that a sharp early deterioration in market conditions would be likely to place pressure on the highly leveraged capital structure. The stable outlook on the ratings reflects the expectation that market and economic conditions will remain broadly supportive in the medium term and will allow Basell to substantially reduce the absolute amount of debt in the first 18 months. The combined group will have US$1 billion revolver facility and US$3 billion of securitization and assets back facilities to support its working capital and liquidity needs. Moody's notes the substantial size of the interest payments in relation to the company's current FFO and a substantial interest rate exposure (while the facilities require Basell to hedge interest rate exposure on at least 50% of the outstanding debt). The ratings may be reviewed downwards should FFO-Interest / Interest decline below 2.0 times and FCF/Total Debt weaken sustainably to low single digits. Sustained strong profitability and debt reduction below 4.0 EBITDA (on adjusted basis) through the cycle would put a positive pressure on the ratings. Structural Considerations The assigned (P)Ba2/LGD2 (27) ratings on the US$12.450 billion Senior Secured 1st Lien 2013 Facilities reflect the priority ranking of the instruments supported by the senior upstream guarantees provided by the majority of the operating companies of the combined entity. Furthermore, the expected recoveries under the facilities are supported by the 1st lien pledge over a material portion of European and American assets and cash flow generation capacity for the US$12.450 billion facilities. The assigned (P)B2/LGD5 (74) ratings to the US$5.5 billion Senior Secured 2d Lien Facility to be issued at BIL Holdings is supported by the claim on the same collateral pool and the upstream guarantees provided by the same majority group of operating companies on a subordinated basis to the claims under the 1st lien facilities. The provisional (P)B3/LGD6 (90) ratings on the US$2.5 billion senior unsecured notes to be issued at BIL Holdings reflects the substantial share of the priority secured debt ranking ahead of the notes. The instrument will also be guaranteed by the operating subsidiaries on a subordinated basis. The downgrade to B3 of the US$300 million 2027 legacy senior unsecured guaranteed notes at Basell Finance Co. and the 2015 senior secured guaranteed notes at Basell AF SCA reflects the subordinated position of the legacy liabilities of Basell in the new capital structure, dominated by the new senior secured 1st and 2d lien facilities. The expected recovery under the 2015 notes is supported by the existing subordinated upstream guarantees provided by the majority of the operating companies. The 2027 notes, by comparison, benefit only from the downstream parent guarantee of Basell Holding BV, an intermediate holding company whose assets are stakes in the European operating companies. Moody's notes that the position of the unsecured claim under the guarantee may be indirectly supported by some unencumbered subsidiaries that are restricted to provide guarantees and security under the legacy 2027 notes, while the lenders under the 2027 notes do not have a direct claim on these subsidiaries in an insolvency situation. The downgrade of the legacy senior notes issued via Lyondell Chemical Co., Lyondell Chemical Worldwide Inc. and Millennium America Inc to B3 reflects the weakened position of the instruments in the new capital structure. Moody's notes that the US$250 million 2013 Senior Unsecured Notes at Millennium America Inc. are guaranteed by Millennium Chemicals Inc which has limited operating asset base following a number of disposals made by Lyondell in 2007; while the 2010 and 2020 senior notes at Lyondell Chemical Worldwide will benefit from the 1st lien pledge of assets directly owned by Lyondell Chemical Co. that secures the Senior Secured Credit Facilities. The 2026 notes will benefit from the first-lien pledge of Equistar assets that also form part of the security package for the secured facilities. The relative asset coverage of the legacy liabilities is reflected in the LGD rates assigned at LGD6 (96) for the Millennium America Inc notes and notes issued at Lyondell Chemical Worldwide compared to LGD5 (84) assigned to the legacy Lyondell notes, benefiting from the provision of the additional security at Equistar. These ratings are affected: -- B1 Corporate family rating at Basell AF SCA; -- (P) Ba2 / LGD 2 (27%) rating on the Senior Secured 1st lien facilities; -- (P) B2 / LGD 5 (74%) rating on Senior Secured 2d lien notes at BIL Holdings; -- (P) B3 / LGD 6 (90%) rating on Senior Unsecured notes at BIL Holdings; -- B3 / LGD 6 (90%) rating on 2015 8.375% notes at Basell AF SCA; -- B3 / LGD 6 (90%) rating on 2027 8.1% notes at Basell Finance Co.; -- B3 / LGD 5 (84%) rating on 2026 7.55% notes at Lyondell Chemical Co. (Assumed by Equistar LP); -- B3 / LGD 6 (96%) rating on 2026 7.625% notes at Millennium America Inc.; -- B3 / LGD 6 (96%) rating on 2010 10.25% notes at Lyondell Chemical Worldwide, Inc.; -- B3 / LGD 6 (96%) rating on 2020 9.8% notes at Lyondell Chemical Worldwide, Inc. Headquartered in The Netherlands, Basell AF SCA -- http://www.basell.com/-- is the producer of polypropylene and advanced polyolefins products, a leading supplier of polyethylene and catalysts, and a global leader in the development and licensing of polypropylene and polyethylene processes. The company, together with its joint ventures, has manufacturing facilities around the world and sells products in more than 120 countries. With research and development activities in Europe, North America and the Asia-Pacific region, Basell is continuing a technological heritage that dates back to the beginning of the polyolefins industry. In 2006, the company reported revenues of EUR10.5 billion and EBITDA of EUR1.1 billion. Basell has regional offices in Belgium, Germany, the United States, Brazil and Hong Kong, as well as sales offices in the major markets around the globe. BASELL AF: S&P Downgrades Corp. Credit Rating to B+ from BB- ------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its long-term corporate credit rating on Basell AF S.C.A. to 'B+' from 'BB-' and removed it from CreditWatch, where it was placed with negative implications on June 26, 2007. This follows approval for Basell's acquisition of Lyondell Chemical Co. from Lyondell shareholders and regulatory approvals. Furthermore, financing for the acquisition is underwritten by five major investment banks. The acquisition is expected to be completed on Dec. 20, 2007. At the same time, S&P lowered the long-term corporate credit ratings on Lyondell and its related entity Equistar Chemicals L.P. to 'B+' from 'BB-', and removed them from CreditWatch, where it was placed with negative implications on July 17, 2007. The 'B-1' short-term rating on Lyondell was withdrawn. The long-term corporate credit rating on Lyondell's subsidiary Millennium Chemicals Inc. was affirmed at 'B+' and removed from CreditWatch negative. The outlook on all entities is stable. "The downgrade reflects the substantial increase in Basell's financial debt following the acquisition, which will be 100% debt financed and will result in a highly leveraged structure at a mature stage in the petrochemical cycle," said S&P's credit analyst Tobias Mock. S&P considers that the company's business risk following the acquisition will benefit from a better product and geographic mix. It will have a strong backward integration and cost structure for a Europe- and North America-based petrochemical producer, strengthened market positions in polyolefins, and is likely to benefit from sizable synergies. Nonetheless, the company remains highly sensitive to cyclical businesses, and the petrochemical cycle will remain a dominant factor in guiding the company's cash flow generation. "The stable outlook reflects our expectation that the group's petrochemical assets will continue to perform strongly in 2008 and our assumption that the merger between Basell and Lyondell will be closed successfully in 2007," said Mr. Mock. S&P expects the petrochemical cycle to weaken from 2009 and that refining margins will weaken in the coming years. Therefore, although S&P expects Basell's credit protection ratios to improve in 2008, they are likely to deteriorate again to current levels or below as the petrochemical cycle weakens. Headquartered in The Netherlands, Basell AF SCA -- http://www.basell.com/-- is the producer of polypropylene and advanced polyolefins products, a leading supplier of polyethylene and catalysts, and a global leader in the development and licensing of polypropylene and polyethylene processes. The company, together with its joint ventures, has manufacturing facilities around the world and sells products in more than 120 countries. With research and development activities in Europe, North America and the Asia-Pacific region, Basell is continuing a technological heritage that dates back to the beginning of the polyolefins industry. In 2006, the company reported revenues of EUR10.5 billion and EBITDA of EUR1.1 billion. Basell has regional offices in Belgium, Germany, the United States, Brazil and Hong Kong, as well as sales offices in the major markets around the globe. BRASKEM SA: Moody's Puts Global Scale Corp. Family Rating at Ba1 ---------------------------------------------------------------- Moody's Investors Service has assigned corporate family ratings of Ba1 on its global scale and Aa2.br on its Brazilian national scale to Braskem S.A. The ratings outlook is stable. This is the first time that Moody's has assigned ratings for the company. Braskem's Ba1 global local currency rating incorporates its leading market position in Brazil and Latin America, which translates into moderate pricing power in selling its product to clients. Also important to the rating is the company's above industry average operating margin that results from high capacity utilization rates, long-term client relationships, product customization and logistics-related and tariff-related barriers for thermoplastic resin imports. While Braskem's prudent liquidity management is a credit positive, its fairly high leverage for a commodity-based company is a constraining factor for the rating. A large portion of the company's indebtedness derives from debt-funded acquisitions made in recent years during the consolidation process of the Brazilian petrochemical industry. The rating also factors in the company's high exposure to volatile naphtha prices, its low geographic and operational diversification compared to international peers, and the event risk associated with both the acquisition of Ipiranga's assets and the company's internationalization process, which includes investments in greenfield projects and acquisitions in neighboring countries with higher sovereign risk than Brazil. The company's principal investment project consists of a 50/50 joint-venture with Petroquimica de Venezuela S.A. -- Pequiven (not rated) for the construction of a 450,000 tons per year polypropylene facility and of a 1.3 million tons natural gas cracker integrated with a polyethylene plant, at an estimated cost of some US$2.5 billion. Moody's believes funding for the projects will include 30% equity and 70% from project finance without recourse to the sponsors. The new plants, strategically located to serve the Pacific Coast of Latin America, as well as the North American and European markets, should benefit from the large natural gas reserves in Venezuela and contribute to diversify Braskem's feedstock. While the Ba1 global scale rating reflects the global default and loss expectation of the company, the Aa2.br national scale rating reflects the standing of its credit quality relative to other domestic issuers. National Scale Ratings are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs in Brazil are designated by the ".br" suffix. NSRs differ from global scale ratings in that they are not globally comparable to the full universe of Moody's rated entities, but only with other rated entities within the same country. The stable outlook reflects Moody's expectation that Braskem will maintain its leading position in the Brazilian market and will prudently manage its capital structure and liquidity position. Also, the stable outlook assumes that the greenfield projects in Venezuela will be structured in a way to ring-fence the company from any obligations other than the estimated US$400 million equity contribution. The rating or outlook could be upgraded if leverage decreases to a level which Moody's considers to be more compatible with the volatile nature of Braskem's cash flows, with Total Adjusted Net Debt to EBITDA expected to remain below 2.0 even during years when there is margin pressure. An upgrade would also require that the company to improve its debt maturity profile while simultaneously maintaining a minimum cash balance sufficient to cover short-term debt obligations in addition to a committed revolving credit facility in place in an amount that is compatible with its working capital needs. Finally, the company's ability to maintain EBITDA margins above 15% during a down cycle in the global industry would be positive for the ratings. Negative pressure on the rating or outlook could result from Retained Cash Flow to Total Adjusted Net Debt below 20% on a sustainable basis. Furthermore, the rating or outlook could be negatively affected if Braskem assumes higher risks in the Venezuelan projects than anticipated by Moody's or experiences a significant deterioration in its liquidity profile. Braskem (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK) -- http://www.braskem.com.br/-- is a thermoplastic resins producer in Latin American, and is among the three largest Brazilian- owned private industrial companies. The company operates 13 manufacturing plants located throughout Brazil, and has an annual production capacity of 5.8 million tons of resins and other petrochemical products. The company reported consolidated net revenues of about US$9 billion in the trailing twelve months through Sept. 30, 2007. COMPANHIA PARANAENSE: Okays BRL792MM Investment Program for 2008 ---------------------------------------------------------------- Companhia Paranaense de Energia said in a statement that its board has authorized a BRL792-million investment program for 2008. Business News Americas relates that investments in generation will total BRL140 million, according to the budget. Companhia Paranaense will invest some BRL107 million of the generation budget to construct the 362-megawatt Maua hydro plant in collaboration with federal power firm Eletrosul. Companhia Paranaense told BNamericas that it will invest: -- BRL218 million in transmission, -- BRL322 million in distribution, and -- BRL40 million in telecommunications. Companhia Paranaense commented to BNamericas, "This investment figures exclude power generation and transmission projects the company may acquire through public bids." Companhia Paranaense told BNamericas that its board ratified plans to buy a 77% stake in 156-megawatt Itiquira Energetica hydro plant. US power company NRG Energy unit Tosli Acquisitions is selling the stake, BNamericas states. Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense de Energia SA -- http://www.copel.com/-- (NYSE: ELP/LATIBEX: XCOP/BOVESPA: CPLE3, CPLE5, CPLE6) transmits and distributes electricity to more than 3 million customers in the state of Parana and has a generating capacity of nearly 4,600 MW, primarily from hydroelectric plants. COPEL also offers telecommunications, natural gas, engineering, and water and sanitation services. The company restructured its utility operations in 2001 into separate generation, transmission, and distribution subsidiaries to prepare for full privatization, which has been indefinitely postponed. In response, COPEL is re-evaluating its corporate structure. The government of Parana controls about 59% of COPEL. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 13, 2006, Moody's America Latina upgraded the corporate family rating of Companhia Paranaense de Energia aka Copel to Ba2 from Ba3 on its global scale and to Aa2.br from A3.br on its Brazilian national scale. Moody's said the rating outlook is stable. This rating action concludes the review process initiated on July 26, 2006. Moody's upgraded these ratings: -- Corporate Family Rating: to Ba2 from Ba3 (Global Local Currency) and to Aa2.br from A3.br (Brazilian National Scale); -- BRL500 million Senior Unsecured Guaranteed Debentures due 2007: to Ba2 from Ba3 (Global Local Currency) and to Aa2.br from A3.br (Brazilian National Scale); and -- BRL400 million Senior Secured Guaranteed Debentures due 2009: to Ba1 from Ba2 (Global Local Currency) and to Aa1.br from A1.br (Brazilian National Scale). EMI GROUP: S&P Withdraws Low B Ratings -------------------------------------- Standard & Poor's Ratings Services has withdrawn its 'B+' long- term and 'B' short-term corporate credit ratings on music group EMI Group PLC, at the company's request. The ratings were on CreditWatch with negative implications at the time of the withdrawal. All of EMI Group's public debt has been repaid. Debt ratings on EMI Group and related entities were withdrawn on Sept. 20, 2007, following the company's acquisition by Maltby Ltd. 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 Mar. 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. The company issued two profit warnings since January 2007. MILACRON INC: Okays Changes to 6% Series B Preferred Stock Terms ---------------------------------------------------------------- Milacron Inc.'s shareholders, at a special meeting yesterday, has approved two proposals to modify the terms governing its 6% Series B Preferred convertible stock. The first proposal limits the circumstances in which Series B holders could demand a cash redemption following a "change of control" of the company. The second proposal accords "Initial Investor" status to Ohio Plastics, LLC, a wholly owned affiliate of Bayside Capital, Inc., the recent acquirer of 57.5% of Milacron's Series B stock. Details of the proposals can be found in the definitive proxy statement filed by the company on Oct. 26, 2007. Final tabulations of the votes, once certified, will be posted on the company's website. Headquartered in Cincinnati, Ohio, Milacron Inc. (NYSE: MZ) -- http://www.milacron.com/ -- is a global manufacturer and supplier of plastics-processing equipment and related supplies. Milacron is also one of the largest global manufacturers of synthetic water-based industrial fluids used in metalworking applications. The company has major manufacturing facilities in Brazil, North America, Europe, and Asia. Milacron's annual revenues approximated US$805 million over the last twelve months. The company has an office in South Korea, and joint ventures in China and India. In Europe, the company maintains operations in Belgium, Germany, Italy, the Netherlands, Spain, and England. * * * As reported in the Troubled Company Reporter on Jan. 2, 2007, Standard & Poor's Ratings Services revised its outlook on Cincinnati, Ohio-based Milacron Inc., to developing from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'CCC+' corporate credit rating. NRG ENERGY: Paying Preferred Stock Dividends on Dec. 17 ------------------------------------------------------- NRG Energy Inc. has announced the following preferred stock dividends, payable on Dec. 17, 2007, to holders of record of its preferred stock as of Dec. 3, 2007: -- A US$10 per share cash dividend on its 4% Convertible Perpetual Preferred Stock issued in December 2004; and -- A US$3.59375 per share cash dividend on its 5.75% Mandatory Convertible Preferred Stock issued in February 2006. All inquiries and correspondence regarding NRG common and preferred stock-relating to shareholder records, transfer of shares, lost certificates, or change of address-should be addressed to: BNY Mellon Shareowner Services P.O. Box 11258 Church Street Station &