/raid1/www/Hosts/bankrupt/TCR_Public/070409.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, April 9, 2007, Vol. 11, No. 83
Headlines
ADVANCED MEDICAL: Moody's Rates $750 Million Senior Loans at Ba1
AIRTRAN HOLDINGS: Board Tells Shareholders Not to Take Action
ARADIGM CORP: Dec. 31 Balance Sheet Upside-Down by $3.9 Million
ARCH WESTERN: Earns $287 Million in Year Ended December 31
ASCENDIA BRANDS: Gets Amex Non-Compliance Notice on Stock Issuance
BENEDICT COLLEGE: Debt Burden Prompts Moody's Negative Outlook
BETH ISRAEL: Gets Court Nod to Reject All Executory Contracts
CARMIKE CINEMAS: Form 10-K Filing Cues S&P's Stable Outlook
CHASE MANHATTAN: Fitch Holds Low-B Ratings on 3 Cert. Classes
CINEMARK USA: Tender Offer Completion Cues Moody's to Cut Ratings
CITADEL HILL: S&P Holds BB- Rating on $15 Million Class B-2L Notes
CITIGROUP MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1
COLEMAN CABLE: Closes $213 Million Copperfield Cash Purchase
CORUS GROUP: Takeover Completion Cues S&P's Developing CreditWatch
DEAN FOODS: Completes New $4.8 Billion Senior Credit Facility
DIRT MOTOR: Murrell Hall Raises Going Concern Doubt
DORAL FINANCIAL: Gets NYSE Notice on Late 2006 Form 10-K Filing
ECV DEVELOPMENT: Disclosure Statement Hearing Scheduled on Apr. 25
FEDDERS CORP: Dec. 31 Balance Sheet Upside-Down by $121.4 Million
FIRST UNION: Fitch Holds Low-B Ratings on 3 Certificate Classes
FIRST UNION: Fitch Lifts Ratings on $8.9 Mil. Class L Certs. to B+
FREEPORT-MCMORAN: S&P Lifts Corporate Credit Rating to BB+ from BB
G-FORCE 2005-RR2: S&P Junks Ratings on Three Certificate Classes
GALVESTON PROPERTY: Moody's Junks Rating on Mortgage Revenue Bonds
GLACIER FUNDING Moody's Rates $6.5 Million Class G Notes at Ba1
GMAC COMMERCIAL: Moody's Junks Rating on Class K & L Certificates
GRANITE BROADCASTING: Wants To Hire Ernst & Young as Auditors
GRANITE BROADCASING: Andrew Hruska Files Examiner Report
GS MORTGAGE: Moody's Hold Low-B Ratings on 6 Certificate Classes
GSR MORTGAGE: Fitch Assigns Low-B Ratings on Two Class Certs.
HMSC CORP: S&P Junks Rating on $110 Million 2nd-Lien Term Loan
HUISH DETERGENTS: Moody's Junks Rating on $275 Mil. 2nd-Lien Loan
HUNTSMAN INT'L: S&P Rates Proposed $2.29 Billion Senior Debt at BB
INSIGHT COMMS: Fitch Puts B+ Issue Default Rating on Watch Neg.
INSIGHT MIDWEST: Fitch Rates Senior Unsecured Debt at B+
LB-UBS: Fitch Holds Low-B Ratings on Five Certificate Classes
LEVEL 3: Completes Purchase of Divested AT&T Assets
MEDICAL CENTER: Moody's Puts Ba3 Bonds' Rating on Watchlist
METROLOGIC INSTRUMENTS: S&P Holds Rating and Revises Outlook
ML-CFC: Moody's Rates $11 Million Class P Certificates at B3
MORGAN STANLEY: Fitch Holds Low-B Ratings on 5 Certificate Classes
MORGAN STANLEY: Fitch Lifts Rating on Class M Certificates to BB-
MRO ACQUISITION: Moody's Reviews B1 Rating and May Downgrade
NEW CENTURY: Organizational Meeting Scheduled Today
NEW CENTURY: Court Approves Access of $50 Million DIP Financing
NEW YORK RACING: Gets OK to Hire Consultant for Integrity Review
OAK HILL: S&P Holds BB- Rating on Class D-1 & D-2 Notes
OPTION ONE: S&P Cuts Ratings on 2 Cert. Classes to BB from BBB-
PACIFIC LUMBER: Scotia Gives Statement on Single Asset Plea Denial
PANHANDLE REGIONAL: Moody's Holds Junk Ratings on Bonds
PORTRAIT CORP: Creditors Balk at Planned Executive Bonus Payments
PRUDENTIAL COMMERCIAL: Fitch Lifts Rating on Class N Certs. to B
RAMP SERIES: S&P Junks Rating on Class B-2 Certificates
REGATTA FUNDING: Moody's Rates $14 Mil. Class B-2L Notes at Ba2
REMY INTERNATIONAL: Elects to Discontinue SEC Reporting
SAGITTARIUS CDO: Moody's Rates $15 Million Class X Notes at Ba2
SEQUOIA MORTGAGE: Fitch Puts Low-B Ratings on $4.4 Million Certs.
SERVICE CORP: S&P Rates Proposed $200 Mil. Senior Notes at BB-
SHAW GROUP: Delays Reporting on Second Quarter Financials
STANDARD AERO: Merger Prompts Moody's to Review Ratings
STRUCTURED ADJUSTABLE: Fitch Junks Class B5 Certificates' Rating
STRUCTURED ADJUSTABLE: Fitch Rates Class B5-II Certificates at B
THAXTON GROUP: Delaware Court Confirms Joint Chapter 11 Plan
TNP LLC: Case Summary & Five Largest Unsecured Creditors
TRIBUNE CO: S&P Cuts Rating on $79 Mil. Debentures to BB- from BB+
U.S.A. INVESTMENT: Involuntary Chapter 11 Case Summary
VERTIS INC: Poor Performance Prompts S&P's Negative CreditWatch
WASTE SERVICES: Closes Buy and Sell Transactions with Allied Waste
* BOND PRICING: For the week of April 2 - April 5, 2007
*********
ADVANCED MEDICAL: Moody's Rates $750 Million Senior Loans at Ba1
----------------------------------------------------------------
Moody's Investors Service confirmed Advanced Medical Optics,
Inc.'s B1 Corporate Family Rating and Ba1 rating on the existing
$300 million senior secured revolver due 2009.
Concurrently, Moody's assigned these new ratings:
* a Ba1 rating to a $300 million six year senior secured
revolver,
* a Ba1 rating to a $450 million seven year senior secured term
loan B, and
* a B1 rating to $250 million senior subordinated notes due
2017.
In addition, Moody's downgraded the $246 million convertible
senior subordinated notes due 2024 to B3 from B2.
The rating outlook is stable. These rating actions conclude the
rating review for possible downgrade that began on Jan. 9, 2007.
Proceeds from the new subordinated notes and term loan B, along
with approximately $72 million under the new revolver and cash
balances at IntraLase Corp., were used to fund the acquisition of
IntraLase, pay upfront integration costs such as severance costs,
and pay related fees and expenses. The closing of the transaction
occurred on April 2, 2007. Upon the closing of the transaction,
Moody's will withdraw the ratings on the existing $300 million
senior secured revolver due 2009.
AMO's B1 ratings reflect the application of Moody's Global Medical
Device rating methodology. Using an average of the 12 factors
specified in the methodology, AMO's "methodology-implied" rating
is approximately "Ba3" based on financial data through
Dec. 31, 2006.
Very favorable scores on research and development as a percentage
of sales and adjusted EBIT margin are offset by reliance on
acquisitions, share buybacks and dividends, free cash flow to
adjusted debt, and adjusted debt to EBITDA. Pro forma for the
debt-financed IntraLase acquisition, Moody's anticipates that the
methodology-implied rating will remain at "Ba3", which is one
notch above the actual rating of B1.
The confirmation of the B1 Corporate Family Rating acknowledges
AMO's revenue size, improved profitability and stable free cash
flow.
"Moody's expects that AMO's revenue size will continue to increase
driven by organic growth coupled with additional tuck-in
acquisitions," said Sidney Matti, Moddy's analyst.
As a result of revenue growth coupled with cost saving programs,
the company's adjusted EBIT margin improved from 9.3% for the
fiscal year ended Dec. 31, 2004, to 15.2% for the fiscal year
ended Dec. 31, 2006.
Moody's anticipates that the company's operating performance will
increase over the near term, as the IntraLase acquisition will
provide AMO with cross-selling opportunities. Currently,
IntraLase's femtosecond laser has 30% market share, while AMO's
excimer laser product is found in a significant number of LASIK
surgery centers.
The B1 Corporate Family Rating also considers the heightened pro
forma leveraged position, highly acquisitive nature and
significant concentration with its top customer segment.
The downgrade of the $246 million convertible senior subordinated
notes due 2024 to B3 from B2 reflects the lack of guarantees from
AMO's domestic subsidiaries while the B1 ratings on the
$250 million senior subordinated notes due 2017 reflect the
presence of guarantees from the company's domestic subsidiaries.
The stable ratings outlook anticipates the company will
successfully integrate IntraLase, benefit from cross-selling
opportunities in the laser vision correction market and experience
continued improved operating performance in the high single digits
within its existing businesses. Additionally, the rating outlook
incorporates Moody's expectation that the company will continue
its acquisition strategy over the near term.
Confirmed:
-- Ba1 rating on the $300 million Senior Secured Revolver due
2009, LGD1, 7%;
-- B1 Probability of Default rating; and
-- B1 Corporate Family Rating.
Downgraded:
-- $246 million Convertible Senior Subordinated Notes due 2024
rating to B3, LGD5, 81% from B2, LGD4, 71%;
Assigned:
-- $300 million Six Year Senior Secured Revolver at Ba1,
LGD2, 14%;
-- $450 million Seven Year Senior Secured Term Loan B at Ba1,
LGD2, 14%; and
-- $250 million Senior Subordinated Notes due 2017 at B1,
LGD4, 50%.
Headquartered in Santa Ana, California, Advanced Medical Optics,
Inc. is a leader in the development, manufacturing and marketing
of medical devices for the eye through three major product lines:
cataract/implant, laser vision correction, and eye care. For the
fiscal year ended Dec. 31, 2006, Advanced Medical Optics, Inc.
reported approximately $1 billion in revenues.
AIRTRAN HOLDINGS: Board Tells Shareholders Not to Take Action
-------------------------------------------------------------
The Board of Directors of Midwest Air Group, Inc., parent company
of Midwest Airlines, requested that its shareholders take no
action at this time in response to the announcement by AirTran
Holdings, Inc. that it has revised the terms of its unsolicited
exchange offer to acquire all outstanding shares of Midwest.
Consistent with its fiduciary duties, and in consultation with its
independent financial and legal advisors, the company's board will
review and consider AirTran's offer and make a recommendation to
shareholders no later than April 13.
Goldman, Sachs & Co. is acting as financial advisor, Sidley Austin
LLP and Godfrey & Kahn S.C. are acting as legal advisors and
MacKenzie Partners is acting as proxy advisor to Midwest.
About Midwest Air
Midwest Air Group (AMEX: MEH), the parent company of Midwest
Airlines, features nonstop jet service to major destinations
throughout the United States. Midwest Connect offers connections
to Midwest Airlines flights, as well as point-to-point service
between select markets on regional jet and turboprop aircraft.
About AirTran
AirTran Airways, Inc. (NYSE: AAI) -- http://www.airtran.com/--
operates over 600 daily flights to 50 destinations. The airline's
hub is at Hartsfield-Jackson Atlanta International Airport, where
it is the second largest carrier. AirTran Airways recently added
the fuel-efficient Boeing 737-700 aircraft to create America's
youngest all-Boeing fleet. The airline is also the first carrier
to install XM Satellite Radio on a commercial aircraft and the
only airline with Business Class and XM Satellite Radio on every
flight.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its ratings on AirTran
Holdings Inc. and its primary operating subsidiary, AirTran
Airways Inc., including the 'B-' corporate credit rating on
AirTran Holdings.
As reported in the Troubled Company Reporter on Nov. 23, 2006,
Moody's Investors Service confirmed its B3 Corporate Family Rating
for AirTran Holdings Inc. and its Caa1 rating on the company's
7.0% Guaranteed Convertible Notes Due July 1, 2023, in connection
with its implementation of its Probability-of-Default and Loss-
Given-Default rating methodology for the Transportation sector.
Moody's also assigned an LGD6 rating to those loans, suggesting
noteholders will experience a 91% loss in the event of a default.
ARADIGM CORP: Dec. 31 Balance Sheet Upside-Down by $3.9 Million
---------------------------------------------------------------
Aradigm Corp.'s balance sheet at Dec. 31, 2006, showed
$32.2 million in total assets, $12.5 million in total liabilities,
and $23.6 million in convertible preferred stock, resulting in a
$3.9 million total stockholders' deficit.
Aradigm Corp. reported a net loss for the fourth quarter ended
Dec. 31, 2006, of $5.4 million, compared with a net loss of
$10.7 million for the same period in 2005. The net loss for the
year ended Dec. 31, 2006, was $13 million, compared with a net
loss of $29.2 million for the same period in 2005. The year-over-
year reduction in net loss was driven primarily by the recognition
of an $8 million gain on sale of royalty interest and a
$12 million gain on sale of patents, both transactions with Novo
Nordisk, a related party.
The 2006 net loss also included a $4 million asset impairment
charge related to the sale of the Intraject program in August of
last year. In this transaction, the company received a $4 million
initial payment, and will be entitled to a milestone payment upon
initial commercialization and royalty payments upon any
commercialization of products that may be developed and sold using
the Intraject technology.
The company reported revenues for the three months ended
Dec. 31, 2006, of $807,000 compared to $862,000 for the same
period in 2005. Revenues for the year ended Dec. 31, 2006, were
$4.8 million compared with $10.5 million for the same period in
2005. Revenues were from partnered development programs. The
decrease in revenue in 2006 compared to 2005 is due primarily to
decreases in project development revenue from Novo Nordisk, as a
consequence of the amendment to the collaborative agreement with
Novo Nordisk, effective Jan. 26, 2005.
Total operating expenses for the three months ended Dec. 31, 2006,
were $6.5 million compared to $11.9 million for the same period in
2005. For the year ended Dec. 31, 2006, total operating expenses
were $38.9 million compared with $41.1 million for the same period
in 2005. The 2006 operating expenses include the impact of
decreasing research and development expense due primarily to the
completion of the Intraject clinical and manufacturing activities,
offset partially by the cost of implementing a strategic
restructuring of business operations that commenced in May 2006.
This restructuring is now substantially complete.
As of Dec. 31, 2006, cash, cash equivalents and short-term
investments totaled approximately $27.5 million. This does not
include the net proceeds of $33.3 million from the company's
recent public offering, completed Jan. 30, 2007.
"We have moved decisively in restructuring our business, both
operationally and financially," said Dr. Igor Gonda, Aradigm's
president and chief executive officer. "Our cash burn for the
fourth quarter, and as we move into 2007, was below $2 million per
month. With the proceeds of our recent public offering, we are in
a strong financial position to support our new strategic
initiatives aimed at becoming a specialty pharmaceutical company
focused on the development and commercialization of a portfolio of
drugs delivered by inhalation for the treatment of severe
respiratory diseases by pulmonologists."
Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1cc8
About Aradigm Corp.
Aradigm Corp. (OTC BB: ARDM.OB) (Other OTC: ARDM.PK) --
http://www.aradigm.com/-- is an emerging specialty pharmaceutical
company focused on the development and commercialization of a
portfolio of drugs delivered by inhalation for the treatment of
severe respiratory diseases by pulmonologists. Current activities
include partnered and self-initiated development programs
addressing the treatment of cystic fibrosis, bronchiectasis,
pulmonary hypertension, inhalation anthrax infections and smoking
cessation.
ARCH WESTERN: Earns $287 Million in Year Ended December 31
----------------------------------------------------------
Arch Western Resources LLC reported net income of $287 million on
revenues of $1,491.4 million for the year ended Dec. 31, 2006,
compared with net income of $128.8 million on revenues of
$1,126.7 million for the year ended Dec. 31, 2005.
Coal sales increased during 2006 when compared to 2005 due to
higher contract prices in both Powder River Basin and Western
Bituminous segments and higher volumes in the Powder River Basin
segment.
Sales volume increased in the Powder River Basin as a result of
the restart of the Coal Creek mine in the second quarter of 2006
and rail service that improved during 2006 when compared to 2005.
In the Western Bituminous region, the effect of an extended
longwall move at the Dugout Canyon mine offset a portion of the
1.5 million tons sold from the Skyline mine, which commenced
production in a new reserve area in the second quarter of 2006.
Cost of coal sales increased to $1,049.4 million in 2006 from
$865.8 million in 2005 primarily due to increased sales volume in
the Powder River Basin, and higher costs, primarily production
taxes and coal royalties, which the company pays as a percentage
of coal sales.
Depreciation, depletion and amortization expense increased to
$108.3 million in 2006 from $98.3 million in 2005 due primarily to
capital improvements associated with development projects.
Income from operations increased to $314.3 million in 2006 from
income from operations of $186.1 million in 2005, mainly as a
result of the increase in coal sales, partly offset by the gain of
$43.3 million recognized in 2005 from the December sale of the
company's rail spur, rail loadout and idle office complex located
in the Powder River Basin to Peabody Energy Corp.
Interest expense in 2006 increased to $72.3 million compared to
interest expense in 2005 of $65.5 million, primarily resulting
from the discount on trade accounts receivable sold to Arch Coal
under Arch Coal's accounts receivable securitization program.
Interest income increased $36.6 million to $81.9 million in 2006,
from $45.2 million in 2005, resulting from a higher average
receivable balance from Arch Coal in 2006 as compared to 2005.
Non-operating expense of $7.9 million in 2006 is related to the
termination of hedge accounting on interest rate swaps and the
resulting amortization of amounts that had previously been
deferred.
At Dec. 31, 2006, the company's balance sheet showed
$2,557.8 million in total assets, $1,453.8 million in total
liabilities, $6.9 million in redeemable membership interest,
$162.5 million in minority interest, and $934.5 million in non-
redeemable membership interest.
The company's balance sheet at Dec. 31, 2006, also showed strained
liquidity with $138.1 million in total current assets available to
pay $240.2 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1ccb
Liquidity
Cash provided by operating activities increased $313.9 million in
2006 compared to 2005 primarily as a result of an increase in net
income and the sale of the company's trade receivables to Arch
Coal. Under this accounts receivable securitization program, the
company sells its receivables to Arch Coal without recourse at a
discount based on the prime rate and days sales outstanding.
During 2006, the company sold $1,500 million of trade accounts
receivable to Arch Coal, at a total discount of $10.5 million.
The company used $312.7 million more cash in investing activities
in 2006 than in 2005, due to increased capital expenditures and a
decrease of $81.5 million in proceeds from dispositions of
property, plant and equipment. Higher spending at the Powder
River Basin operations related to the restart of the Coal Creek
mine and costs related to the purchase of a replacement longwall
at the Canyon Fuel operations in the Western Bituminous region
resulted in an increase in capital expenditures in 2006 compared
to the prior year period. The decrease in proceeds from
dispositions of property, plant and equipment is a result of the
sale in 2005 of the railspur, rail loadout and idle office complex
in the Powder River Basin.
At Dec. 31, 2006, the company had total outstanding long-term debt
of $958.9 million, compared to total outstanding long-term debt of
$960,247 at Dec. 31, 2005.
About Arch Western
Arch Western Resources LLC is a subsidiary of Arch Coal Inc.
At Dec. 31, 2006, the company operated six active mines located in
two of the three major low sulfur coal-producing regions of the
United States.
The company sells substantially all of its coal to producers of
electric power, steel producers and industrial facilities. For
the year ended Dec. 31, 2006, the company sold approximately
113.7 million tons of coal.
Headquartered in St. Louis, Arch Coal Inc. (NYSE: ACI) --
http://www.archcoal.com/-- is the nation's second largest coal
producer. Arch Coal's core business is providing U.S. power
generators with clean-burning, low-sulfur coal for electric
generation. Through its national network of mines, Arch supplies
the fuel for approximately 6 percent of the electricity generated
in the United States.
* * *
Arch Western Resources LLC carries Moody's Investors Service 'BB-'
LT Foreign Issuer Credit rating.
ASCENDIA BRANDS: Gets Amex Non-Compliance Notice on Stock Issuance
------------------------------------------------------------------
Ascendia Brands Inc. has been notified by the American Stock
Exchange about its non-compliance with Section 301 of the Amex
Company Guide as a result of the issuance of common stock without
prior listing approval.
The transactions in question involve certain recent issuances of
restricted securities, as to which the company filed the requisite
additional listing application on March 28, 2007, and an amended
application on March 29, 2007.
The letter from Amex constitutes a Warning Letter of a minor
violation of the Exchange's corporate governance or shareholder
protection requirements and does not cause the initiation of a
de-listing procedure or result in a suspension of trading in the
company's stock. The company expects that the additional listing
application will be processed, and the company will regain
compliance with the listing standards, within two weeks.
About Ascendia Brands
Headquartered in Hamilton, New Jersey, Ascendia Brands, Inc.
(AMEX: ASB) -- http://www.ascendiabrands.com/-- manufactures
health and beauty care products. In November 2005, Ascendia
expanded its range of product offerings through the acquisition of
a series of brands, including Baby Magic(R), Binaca(R), Mr.
Bubble(R) and Ogilvie(R). The company operates two manufacturing
facilities, in Binghamton, New York, and Toronto, Canada.
* * *
On Dec. 30, 2006, Prencen Lending agreed to waive certain defaults
arising under convertible secured notes relating to the payment of
accrued interest due Dec. 31, 2006, waive compliance with certain
financial covenants through the end of Ascendia's current fiscal
year, and to defer until June 30, 2007 the requirement to file a
registration statement with respect to shares of the Ascendia's
Common Stock issuable upon conversion of the Amended Note. In
addition, the parties agreed to defer until Feb. 28, 2007 the date
for determining the number of shares of the Ascendia's Common
Stock that may be issued upon the exercise of the Series B
Warrants held by Prencen Lending, and the exercise price of such
Series B Warrants.
BENEDICT COLLEGE: Debt Burden Prompts Moody's Negative Outlook
---------------------------------------------------------------
Moody's Investors Service has downgraded the underlying rating of
Benedict College to B3 from B2 and the rating has been removed
from Watchlist for potential downgrade, although the rating
outlook is negative.
This action affects $16.5 million of Series 1998 and 1999 bonds
issued through Richland County, South Carolina, and $26.1 million
of Series 2002 bonds issued through the Educational Facilities
Authority for Private Nonprofit Institutions of Higher Learning of
South Carolina.
This downgrade and negative outlook reflect Moody's continued
concern about the College's ongoing cash flow relative to its
sizeable debt burden although the College is expected to gain near
term relief through the restructuring of two bank financings this
month. The removal from Watchlist reflects the positive impacts
of the debt restructuring as well as stronger cash flow management
at the College.
Legal security:
* General obligation with security interest in certain pledged
revenues derived from the operations of various auxiliary
facilities.
* Mortgage interest in improvements financed through the bonds.
* Rate maintenance covenant to support 120% of debt service.
Debt service reserve.
Debt-related derivatives:
None.
Strengths:
* The College is in the process of completing the refinancing
of $4.2 million of short term bank financings lengthening the
maturity of these notes with a $8.4 million loan from the
National Bank of South Carolina (NBSC), a subsidiary of
Synovus Financial Corporation, rated A3. The NBSC loan is
also insured by Radian (Moody's Insurance Financial Strength
rating Aa3). The National Bank of South Carolina has lent
the College $16 million to refinance a $14.5 million loan
from Merrill Lynch (maturing on 9/11/2008) and provide
$1.5 million of new money to cover cost over-runs on the
football stadium construction which opened in the fall of
2006.
* Interim CFO is addressing need to professionalize the
College's financial operations by training staff, instituting
the appropriate reporting tools for management and accurate
accounting treatment, reorganizing the office's structure and
processes to ensure efficient tracking and timely payment of
transactions.
* Projections of net tuition revenue up 6% this year along with
a slowing in the year over year enrollment declines since
2002. Fall 2006 enrollment is essentially flat (down less
than 1%) compared the prior year with. Fall 2007
applications are tracking ahead of this time last year.
Because of some extraordinary cash expenses in FY 2007
related reductions in accounts payable and completion of the
football stadium, the College's cash flow projections are
significantly improved for FY 2008 relative to the prior
year.
Challenges:
* Even after the debt restructuring expected to be completed in
April, the College will still have a relatively complex debt
structure and high debt burden relative to operations.
Radian, who insures the bonds Moody's rates, will enjoy a
first mortgage pledge on certain College property as well as
additional financial and operative covenants. The College's
$16 million NBSC loan will be secured by a collateral pledge
of $16.5 million of endowment invested in a certificate of
deposit to be held at the Bank.
* Extremely limited liquidity with unrestricted financial
resources as of June 30, 2006 cushioning debt by
0.04x and operations by 0.04 times. Assuming both the new
loans close in April (the NBSC endowment loan closed on
April 3, 2007) the College will enjoy a near term boost in
working cash. While the College expects to improve its cash
position in FY 2008, the College does project a very weak
cash level by August of this year even with the infusion.
While some of cash uses in FY 2007 will not repeated in
future years (cost overruns in a construction project and a
reduction in accounts payable) we expect the cash position of
the College to remain highly constrained.
* High degree of leverage with total financial resources
covering debt by just 0.13x and annual debt service amounting
to 15% of annual operating expenses.
* Replacement of the College funded Gap Loan Program with a Gap
Grant drove tuition discounting from 13.2% in FY 2005 to
25.5% in FY 2006. In FY 2005, the College stopped awarding
loans to students under the 7 year old program which lent
funds to students who could not pay the difference between
the total cost of attendance and the amount covered by
federal and state aid. The College has had difficulty with
repayments rates on this program and as of the 2006 fiscal
year end, $16 million of the $28 million portfolio was
considered past due. By partnering with a third party
collection agency, the College hopes to increase its
collection rate on the Gap Loan receivables in the coming
years.
Outlook:
Moody's negative outlook anticipates the near term liquidity boost
from the restructured debt in April and reflects ongoing concern
about the College's ability to cover debt service from operations,
combined with its extremely thin liquidity. Stability could
return if the College is successful in increasing its revenues,
continues careful cost management and maintains positive cash
flow.
What could change the rating -- up
Marked improvement in debt service coverage combined with
consistent growth in liquid financial resources.
What could change the rating -- down
Weakened liquidity profile or difficulty in achieving coverage of
debt service from operations.
Key indicators:
* Total Enrollment: 2,502 full-time equivalent students
* Selectivity: 82.9%
* Matriculation: 16.6%
* Total Financial Resources: $11 million
* Total Pro-Forma Debt: $82.8 million (includes both NBSC
loans)
* Expendable Resources to Debt: 0.06 times
* Expendable Resources to Operations: 0.09 times
* Total Revenues: $71.3 million
* Average operating margin: -8.1%
* Operating Dependence on Student based Revenue: 72.5%
Rated debt:
* Series 1998 and 1999 issued through Richland County, South
Carolina: Caa1 underlying; Aa3 long-term rating based on
insurance from Radian Asset Assurance, Inc.
* Series 2002 issued through the Educational Facilities
Authority for Private Nonprofit Institutions of Higher
Learning of South Carolina: Caa1 underlying; Aa3 long-term
rating based on insurance from Radian Asset Assurance, Inc.
BETH ISRAEL: Gets Court Nod to Reject All Executory Contracts
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey gave Beth
Israel Hospital Association of Passaic authority to reject
substantially all of its executory contracts.
The Debtor told the Court that a sale of substantially all of the
Debtor's assets to St. Mary's Hospital of Passaic, New Jersey,
will result in a termination of all of the Debtor's operations.
St. Mary's has declined its opportunity to assume any of the
contracts of its assets purchase agreement with the Debtor. As a
result there will be no need for any of the contracts subsequent
to the closing date of the sale.
If the contracts are not rejected, the contracts may subject the
Debtor to administrative expenses with no concomitant benefit to
the Debtor or its estate.
A list of the executory contracts is available for free at:
http://ResearchArchives.com/t/s?1ccf
About Beth Israel
Headquartered in Passaic, New Jersey, Beth Israel Hospital
Association of Passaic, dba PBI Regional Medical Center --
http://www.pbih.org/-- is a 264-bed, non-profit acute care
hospital located in the City of Passaic, New Jersey. The Medical
Center represents the consolidation of two significant hospitals,
namely Passaic Beth Israel Hospital and the General Hospital
Center of Passaic, and provides medical and health services
including comprehensive cardiac services program, bypass surgery,
electrophysiology, off pump surgery, and others.
The Company filed for chapter 11 protection on July 10, 2006
(Bankr. D. N.J. Case No. 06-16186). Mark J. Politan, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., represent the Debtor in its restructuring efforts.
Allison M. Berger, Esq., and Hal L. Baume, Esq., at Fox Rothschild
LLP represent the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it estimated
assets and debts between $50 million and $100 million.
CARMIKE CINEMAS: Form 10-K Filing Cues S&P's Stable Outlook
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on Columbus, Georgia-based movie exhibitor Carmike
Cinemas Inc., and revised the outlook to stable from developing.
The outlook revision followed the company's filing of its SEC Form
10-K.
"The company has filed its 10-K within the required window of time
despite a change in auditor and has made good progress in
remediating some of its material weaknesses in its internal
controls, but operating performance has been weak," said
Standard & Poor's credit analyst Tulip Lim.
The ratings reflect high lease-adjusted leverage, a less modern
theater circuit compared with key peers, participation in the
mature and highly competitive U.S. movie exhibition industry,
exposure to the fluctuating popularity of Hollywood films, and
regions of operation with narrower film preferences.
They also reflect Standard & Poor's longer term concern that U.S.
movie theater attendance will be pressured by the proliferation of
competing entertainment alternatives and shortening periods in
theatrical release prior to home video and video-on-demand
release. These factors more than outweigh Carmike's decent
geographic diversity and its competitive positions in many of its
smaller markets.
Based on screen count, Carmike is the fourth-largest theater chain
in the U.S., with about 2,447 screens in 289 theaters in
37 states.
CHASE MANHATTAN: Fitch Holds Low-B Ratings on 3 Cert. Classes
-------------------------------------------------------------
Fitch Ratings upgrades First Union National Bank-Chase Manhattan
Bank's commercial mortgage pass-through certificates, series
1999-C2:
-- $41.4 million class G to 'AA' from 'A+';
-- $11.8 million class H to 'A' from 'A-'; and
-- $11.8 million class J to 'BBB+' from 'BBB-'.
In addition, Fitch affirms these classes:
-- $592.5 million class A-2 at 'AAA';
-- Interest-only class IO at 'AAA';
-- $47.3 million class B at 'AAA';
-- $62 million class C at 'AAA';
-- $14.8 million class D at 'AAA';
-- $41.4 million class E at 'AAA';
-- $17.7 million class F at 'AAA';
-- $11.8 million class K at 'BB+'.
-- $11.8 million class L at 'BB-'; and
-- $11.8 million class M at 'B'.
The $8.1 million class N is not rated by Fitch.
The rating upgrades reflect the improved credit enhancement levels
resulting from scheduled amortization and the defeasance of an
additional 15 loans (10.4%) since Fitch's last rating action.
In total 56 loans (39.4%) have defeased. As of the March 2007
distribution report, the pool's aggregate certificate balance was
reduced 25.2% to $884.2 million from $1.18 billion at issuance.
Currently, two loans (1%) are in special servicing, with losses
expected. The first specially serviced loan (0.5%) is secured by
a 51,282-square foot retail property located in Chesapeake,
Virginia. The property was 100% leased to Winn Dixie, which filed
for bankruptcy in February 2005. Winn Dixie rejected the lease in
its bankruptcy proceeding in June 2006 and the rejection was
approved by the court. The special servicer has postponed the
foreclosure proceeding and is negotiating with the borrower toward
full resolution of the loan.
The second specially serviced loan (0.45%) is secured by a 111-bed
health care property located in Macon, Georgia. The special
servicer is working with the borrower for a discounted payoff.
Fitch expects losses from both specially serviced loans will be
absorbed by the non-rated Class N.
CINEMARK USA: Tender Offer Completion Cues Moody's to Cut Ratings
-----------------------------------------------------------------
Moody's Investors Service downgraded Cinemark USA's bank rating to
Ba3 from Ba2 following the successful completion of the tender
offer by Cinemark USA, Inc. for its 9% Senior Subordinated Notes.
The elimination of the junior capital previously provided by the
approximately $330 million of outstanding Senior Subordinated
Notes leads to a one notch downgrade of the bank debt, in
accordance with Moody's Loss Given Default Methodology. This
action concludes the review commenced March 7, 2007. Moody's also
withdrew the B2 rating on the senior subordinated notes.
Moody's also affirmed the B1 corporate family rating and positive
outlook for Cinemark, Inc. Moody's changed the outlook for
Cinemark to positive on February 2.
* Cinemark, Inc.
-- B1 Corporate Family Rating Affirmed
-- Positive Outlook
* Cinemark USA, Inc.
-- Senior Secured Bank Credit Facility, Downgraded to Ba3
from Ba2, LGD3, 34%
-- Senior Subordinated Notes, B2 rating withdrawn
-- Outlook, Changed To Positive From Rating Under Review
Cinemark, Inc., the third largest motion picture exhibitor in the
United States, operates approximately 400 theaters and
4,400 screens in the United States and Latin America. The company
maintains its headquarters in Plano, Texas and its annual revenue
is approximately $1.6 billion.
CITADEL HILL: S&P Holds BB- Rating on $15 Million Class B-2L Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
A-2L and A-3L notes issued by Citadel Hill 2000 Ltd., an arbitrage
CLO transaction managed by Citadel Hill Advisors LLC.
Concurrently, the rating on the class A-2L notes was removed from
CreditWatch with positive implications, where it was placed
Feb. 22, 2007.
The raised ratings on the class A-2L and A-3L notes reflect
factors that have positively affected the credit enhancement
available to support the notes since the deal was initially rated
in December 2000. These factors include the paydown of the class
A-1L note balance by approximately 60%. According to the most
recent trustee report, dated March 16, 2007, the class A-1L notes
had paid down approximately $210 million since July 2006, leaving
approximately $145 million outstanding.
As a result, the senior class A overcollateralization ratio has
improved to 146.75% and the class A overcollateralization ratio
has improved to 123.68%.
Rating Raised And Removed
From Creditwatch Positive
Citadel Hill 2000 Ltd.
Rating
------
Class To From Balance
----- -- ---- -----------
A-2L AAA AA-/Watch Pos $45,000,000
Rating Raised
Citadel Hill 2000 Ltd.
Rating
------
Class To From Balance
----- -- ---- -----------
A-3L A+ A- $35,000,000
Other Outstanding Ratings
Citadel Hill 2000 Ltd.
Class Rating Balance
---- ------ ------------
A-1L AAA $145,254,000
B-1C BBB $7,500,000
B-1L BBB $17,500,000
B-2L BB- $15,000,000
CITIGROUP MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1
----------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by Citigroup Mortgage Loan Trust 2007-AMC2,
and ratings ranging from Aa1 to Ba1 to the subordinate
certificates in the deal.
The securitization is backed by Argent Mortgage Company, L.L.C.
and Ameriquest Mortgage Company originated adjustable-rate and
fixed rated subprime residential mortgage loans. The ratings are
based primarily on the credit quality of the loans and on the
protection against credit losses provided by subordination,
overcollateralization, excess spread and an interest rate cap.
Moody's expects collateral losses to range from 4.85% to 5.35%.
Countrywide Home Loans Servicing LP, Ocwen Loan Servicing, LLC,
GMAC Mortgage, LLC will service the loans in the transaction.
Wells Fargo Bank, N.A. will act as master servicer. Moody's has
assigned Ocwen Loan Servicing, LLC its servicer quality of
SQ2- for subprime loans. Moody's has also assigned Wells Fargo
Bank N.A. its top servicer quality rating of SQ1 for master
servicer.
These are the rating actions:
* Citigroup Mortgage Loan Trust 2007-AMC2
Class A-1, Assigned Aaa
Class A-2, Assigned Aaa
Class A-3A,Assigned Aaa
Class A-3B,Assigned Aaa
Class A-3C,Assigned Aaa
Class M-1, Assigned Aa1
Class M-2, Assigned Aa2
Class M-3, Assigned Aa3
Class M-4, Assigned A1
Class M-5, Assigned A2
Class M-6, Assigned A3
Class M-7, Assigned Baa1
Class M-8, Assigned Baa2
Class M-9, Assigned Baa3
Class M-10,Assigned Ba1
COLEMAN CABLE: Closes $213 Million Copperfield Cash Purchase
------------------------------------------------------------
Coleman Cable, Inc. has closed its acquisition of Copperfield LLC.
Pursuant to the acquisition agreement on March 11, 2007, Coleman
Cable acquired all of the equity interests of Copperfield LLC for
$213 million in cash.
Management believes that the Coleman Cable-Copperfield combination
will result in one of the premier U.S. based manufacturers of
electrical and electronic wire and cable products. The strategic
acquisition of Copperfield broadens the scope of Coleman Cable's
product offering, further strengthens its strategic relationships
with industrial distributors and increases Coleman's end-market
diversity. Coleman Cable expects the acquisition of Copperfield to
be accretive to earnings per share for 2007.
"The successful close of this transaction is an important
achievement for Coleman Cable and its shareholders," Gary Yetman,
ceo of Coleman Cable, said. "The company looks forward to working
with the numerous talented employees at Copperfield as the company
works to make Coleman Cable the electrical and electronic wire and
cable products supplier of choice in multiple industries."
In connection with the acquisition, Coleman Cable also closed its
offering of $120 million aggregate principal amount of
9-7/8% Senior Notes due 2012, along with the completion of a
concurrent refinancing of its credit facilities.
Proceeds from the notes offering totaled $123.5 million. The
notes are unsecured senior obligations of Coleman Cable and are
guaranteed on a senior basis by its current and future domestic
subsidiaries.
The notes bear interest at a fixed rate. The notes were offered
in the United States to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933, as amended, and
outside the United States pursuant to Regulation S under the
Securities Act.
The notes have not been registered under the Securities Act and
may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements.
In conjunction with the acquisition and related financings,
Coleman Cable received credit rating upgrades from both Moody's
Investor Service and Standard and Poor's.
Wachovia Capital Markets, LLC served as Coleman Cable's financial
advisor for the acquisition and as sole book runner for the notes
offering.
William Blair & Co. provided an opinion as to the fairness, from a
financial point of view, of the consideration paid in the
acquisition to Coleman Cable's shareholders. Mayer, Brown, Rowe &
Maw, LLP acted as the company's legal advisor.
About Coleman Cable
Headquartered in Waukegan, Illinois, Coleman Cable Inc, (Nasdaq:
CCIX) -- http://www.colemancable.com/-- is a manufacturer and
innovator of electrical and electronic wire and cable products for
security, sound, telecommunications, and electrical, commercial,
industrial and automotive industries. Pro-forma revenue for the
combined company is expected to exceed $940 million in 2006.
* * *
As reported in the Troubled Company Reporter on March 23, 2007,
Moody's Investors Service has upgraded the corporate family rating
of Coleman Cable Inc. to 'B1', the existing $120 million senior
unsecured notes to 'B2' and the speculative grade liquidity rating
to SGL-2, following the company's strong fiscal 2006 performance
and improved liquidity.
As reported in the Troubled Company Reporter on March 23, 2007,
Standard & Poor's Rating Services raised its ratings on Coleman
Cable Inc. The corporate credit rating was raised to 'BB-' from
'B+'; the rating on the senior unsecured notes, which were
increased to $220 million from $120 million, was raised to 'B'
from 'B-'. The outlook is revised to stable.
CORUS GROUP: Takeover Completion Cues S&P's Developing CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services kept its 'BB' long-term
corporate credit rating on U.K.-based steelmaker Corus Group PLC
on CreditWatch with developing implications, following the
completion of the GBP6.2 billion takeover of the company by
India-based steel manufacturer Tata Steel Ltd., which
became effective on April 2, 2007.
The 'BB+' debt rating on Corus' EUR700 million senior secured bank
loan and the 'BB-' unsecured debt rating on Corus also remain on
CreditWatch with developing implications. The 'B' short-term
corporate credit rating remains on CreditWatch with positive
implications. The ratings were placed on CreditWatch on
Oct. 18, 2006, following the report of an initial bid by Tata
Steel.
"The CreditWatch status continues to reflect ongoing uncertainty
regarding the long-term financial structure of the transaction and
its implications for Corus," said Standard & Poor's credit analyst
Alex Herbert.
Standard & Poor's understands that Tata Steel has arranged bridge
financing for the acquisition, but as the ultimate financial
structure is unknown, the ratings on Corus could be affected
positively or negatively.
Tata Steel previously reported that part of the acquisition
financing would use nonrecourse debt that would be serviced by
Corus' cash flows. Absent adequate support from Tata Steel, this
could lead to a downgrade of Corus.
Standard & Poor's notes that the materially increased acquisition
price has reduced the upside potential for the ratings on Corus.
The debt burden of the combined entity is likely to increase
following completion of the transaction, implying lower ability
and incentives for Tata Steel to support Corus.
Nevertheless, under certain scenarios, the combined entity might
be assigned a higher rating than the current rating on Corus. If
there is sufficient evidence that Tata Steel will provide
financial support to Corus, the ratings on Corus could be
raised. Furthermore, integration with Tata Steel's low-cost
operations might benefit Corus' weak business profile in the
medium term.
"In resolving the CreditWatch placement, Standard & Poor's will
seek further details on the new entity's long-term financial
structure and integration plans," Mr. Herbert added.
Standard & Poor's will also consider whether Corus' weak business
risk profile will be enhanced, and whether Tata Steel would be
likely to support Corus in case of financial difficulty.
DEAN FOODS: Completes New $4.8 Billion Senior Credit Facility
-------------------------------------------------------------
Dean Foods Company disclosed the recapitalization of its balance
sheet through the completion of $4.8 billion of new senior credit
facilities and the return of $1.94 billion to shareholders through
a $15 per share special dividend.
The new facilities consist of a combination of a $1.5 billion
5-year senior secured revolving credit facility, a $1.5 billion
5-year senior secured term loan A, and a $1.8 billion 7-year
senior secured term loan B. The company also replaced its
receivables facility with a new three year, $600 million
receivables facility. The company's publicly traded notes will
remain outstanding without modification.
The special dividend declared by Dean Foods' Board of Directors
was paid to shareholders of record as of March 27, 2007.
Shareholders who sell their shares prior to the April 3, 2007
ex-dividend date will also be selling their right to receive the
special dividend. Dean Foods common stock started trading on an
ex-dividend basis beginning April 3, 2007, in accordance with NYSE
rules. Shareholders are advised to contact their financial
advisor for advice regarding their individual situations.
The total number of basic shares outstanding at the close of
trading on the record date of March 27, 2007 was 129.6 million,
resulting in a total aggregate dividend of $1.94 billion.
For U.S. federal income tax purposes, shareholders will receive a
Form 1099-DIV in early 2008 to notify them of the division between
the dividend and non-dividend portions of the special dividend.
The process of determining these amounts, which entails a
comprehensive review and analysis of the company's financial
history, is well underway. Shareholders are encouraged to consult
with their own tax and financial advisors regarding the
implications of this special dividend.
The $4.8 billion fully underwritten financing package was arranged
by J.P. Morgan Securities Inc., Banc of America Securities LLC,
and Wachovia Capital Markets, LLC.
Banc of America Securities LLC acted as financial advisor to Dean
Foods on this transaction.
About Dean Foods Company
Headquartered in Dallas, Texas, Dean Foods Company (NYSE: DF) --
http://www.deanfoods.com/-- is a food and beverage company in the
U.S. Its Dairy Group division processes and distributes milk and
other dairy products in the country, with products sold under more
than 50 familiar local and regional brands and private labels.
The company's WhiteWave Foods subsidiary markets and sells dairy
and dairy-related products, such as Silk soymilk, Horizon Organic
milk and other dairy products and International Delight coffee
creamers. WhiteWave Foods' Rachel's Organic brand is an organic
milk and yogurt brand in the United Kingdom.
* * *
As reported by the Troubled Company Reporter on March 6, 2007,
Standard & Poor's Ratings Services lowered its ratings on Dean
Foods Co. and its wholly owned subsidiary, Dean Holding Co.,
including its long-term corporate credit rating to 'BB' from
'BB+', following the company's report of a one-time special cash
dividend of $15.00 per share or approximately $2 billion. A new
$4.8 billion senior secured credit facility will be used to pay
the special dividend.
As reported by the Troubled Company Reporter on March 5, 2007,
Moody's placed the corporate family and other long-term ratings of
Dean Foods Company on review for possible downgrade following the
company's report of its plans to return approximately $2 billion
to shareholders through a one time special dividend. At the same
time, Moody's assigned a prospective Ba3 rating to the company's
proposed new $4.8 billion bank credit facility. The company's
speculative grade liquidity rating of SGL-2 was affirmed.
DIRT MOTOR: Murrell Hall Raises Going Concern Doubt
---------------------------------------------------
Murrell, Hall, McIntosh & Co. PLLP, in Oklahoma City, expressed
substantial doubt about Dirt Motor Sports Inc.'s ability to
continue as a going concern after auditing the company's financial
statements for the years ended Dec. 31, 2006, and 2005. The
auditing firm pointed to the company's significant net losses
during the years ended Dec. 31, 2006, and 2005, and negative
working capital as of Dec. 31, 2006.
The company reported a net loss of $22.8 million on $15.1 million
of total revenues for the year ended Dec. 31, 2006, compared with
a net loss of $20.9 million on total revenues of $12.7 million for
the year ended Dec. 31, 2006.
The overall increase in revenues from 2005 to 2006 is due to the
acquisitions made in late 2004 and during 2005, and the addition
of a leased facility in 2006.
The increase in net loss is primarily due to the increase in
interest expenses and the increase in operating expenses, which
more than offset the increase in revenues. Interest expense
increased to $8 million in 2006 from $5.4 million in 2005, while
total operating expenses increased to $30 million in 2006 from
$28.3 million in 2005. The increase in operating expenses is due
to the increased operating expenses for additional facilities in
2006 as compared to 2005 and $2.7 million in non-cash stock
compensation in 2006.
Race sanctioning and event fees revenue decreased to $4.7 million
in 2006 from $7.2 million in 2005. This decrease is principally
due to a decrease in sanctioned events in 2006 as compared to 2005
and an increase in the number of events cancelled and not
rescheduled due to weather.
During 2006 the company generated $6.9 million in track
operations, ticket and concession sales. This compares to
$2.5 million in track operations, ticket and concession sales at
company owned tracks in 2005.
Sponsorship and advertising revenues increased to $2.5 million in
2006 from $1.5 million in 2005.
Sales of merchandise decreased to $754,592 in 2006 from
$1.1 million in 2005, due in part to the timing of receipt of
$100,000 in equipment sales during 2005 that were sold to
sanctioned tracks in 2005 and were not expected to recur in 2006.
Additionally, merchandise sales decreased due to the decrease in
the number of events during 2006 as compared to 2005.
At Dec. 31, 2006, the company's balance sheet showed $12.1 million
in total assets, $6.5 million in total liabilities, and
$5.6 million in total stockholders' equity.
The company's balance sheet at Dec. 31, 2006, also showed strained
liquidity with $1.2 million in total current assets available to
pay $2.5 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1ccc
About Dirt Motor
Headquartered in Norman, Okla., Dirt Motor Sports Inc.
(OTC BB: DMSP.OB) -- http://dirtmotorsports.com/-- is a marketer
and promoter of motorsports entertainment in the United States.
The company's motorsports subsidiaries operate 6 dirt motorsports
tracks in New York, Pennsylvania and Florida.
DORAL FINANCIAL: Gets NYSE Notice on Late 2006 Form 10-K Filing
---------------------------------------------------------------
Doral Financial Corporation disclosed that, on March 2, 2007, it
was unable to timely file with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended
Dec. 31, 2006 as a result of delays in the preparation of its
consolidated financial statements for the year ended Dec. 31, 2006
and in management's evaluation of the company's internal control
over financial reporting as of Dec. 31, 2006.
As a result, on March 19, 2007, the NYSE Regulation Inc. notified
the company that it is subject to the procedures specified in Rule
802.01E (SEC Annual Report Timely Filing Criteria) of the NYSE's
Listed Company Manual. Rule 802.01E provides, among other things,
that the NYSE Regulation will monitor the company and the filing
status of the 2006 Form 10-K on an ongoing basis over up to a
maximum twelve month trading period, subject to the right of the
NYSE Regulation to take action at any time, if circumstances
warrant. However, if the company has not filed its 2006 Form 10-K
within six months of the filing due date of the 2006 Form 10-K,
the staff of NYSE Regulation will formally evaluate the company
and may grant up to an additional six-month trading period to file
the 2006 Form 10-K or commence suspension and delisting procedures
against the company.
The company expects to file its 2006 Form 10-K well before the
initial six-month period provided by Rule 802.01E. The company
currently expects to file this annual report during the second
half of April 2007.
Cash Dividend
The company also reported that, on April 2, 2007, it paid the
regular monthly cash dividend for the month of March 2007 on the
Company's 7% Noncumulative Monthly Income Preferred Stock, Series
A, 8.35% Noncumulative Monthly Income Preferred Stock, Series B
and 7.25% Noncumulative Monthly Income Preferred Stock, Series C,
in the amount of $0.2917, $0.173958, $0.151042 per share,
respectively. The dividend on each of the series was paid to the
record holders as of the close of business on March 29, 2007 in
the case of the Series A Preferred Stock, and to the record
holders as of the close of business on March 15, 2007 in the case
of Series B and Series C Preferred Stock.
About Doral Financial Corp.
Based in New York City, Doral Financial Corp. (NYSE: DRL) --
http://www.doralfinancial.com/-- is a diversified financial
services company engaged in mortgage banking, banking, investment
banking activities, institutional securities and insurance agency
operations. Its activities are principally conducted in Puerto
Rico and in the New York City metropolitan area. Doral is the
parent company of Doral Bank, a Puerto Rico based commercial bank,
Doral Securities, a Puerto Rico based investment banking and
institutional brokerage firm, Doral Insurance Agency Inc. and
Doral Bank FSB, a federal savings bank based in New York City.
* * *
As reported in the Troubled Company Reporter on Jan. 8, 2007,
Standard & Poor's Ratings Services lowered its long-term ratings
on Doral Financial Corp., including the counterparty credit
rating, to 'B' from 'B+'. The outlook remains negative.
ECV DEVELOPMENT: Disclosure Statement Hearing Scheduled on Apr. 25
------------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
California will convene a hearing at 10:00 a.m. on April 25, 2007,
to consider approval of the disclosure statement explaining
ECV Development LLC's Chapter 11 Plan of Reorganization.
At the hearing, the Court will determine whether the Disclosure
Statement contain adequate information -- the right kind of the
right amount for creditors to make informed decisions when asked
to vote for the Plan.
Headquartered in Carlsbad, California, ECV Development LLC first
filed for chapter 11 protection on July 28, 2006 (Bankr. S.D.
Calif. Case No. 06-02001). That bankruptcy petition was dismissed
on November 28, 2006.
The Debtor filed for its Second Chapter 11 Protection on January
8, 2007 (Bankr. S.D. Calif. Case No. 07-00052). Raymond R. Lee,
Esq. of Suppa, Trucchi & Henein LLP represents the Debtor in its
restructuring efforts. No Official Committee of Unsecured
Creditors has been appointed in this case. When the Debtor sought
protection from its creditors, it listed assets and debts between
$1 million to $100 million.
FEDDERS CORP: Dec. 31 Balance Sheet Upside-Down by $121.4 Million
-----------------------------------------------------------------
Fedders Corporation's balance sheet at Dec. 31, 2006, showed
$181.3 million in total assets and $302.7 million in total
liabilities, resulting in a $121.4 million total stockholders'
deficit.
The company's balance sheet at Dec. 31, 2006, also showed strained
liquidity with $86.2 million in total current assets available to
pay $102.1 million in total current liabilities.
Fedders Corp. reported a net loss of $124.6 million on net sales
of $279.3 million for the year ended Dec. 31, 2006, compared with
a net loss of $62.1 million on net sales of $297.7 million for the
year ended Dec. 31, 2005.
Net sales in the Heating, Ventilation, and Air Conditioning (HVAC)
reporting segment of $250.7 million in 2006 decreased by 6.3% from
$267.5 million in 2005 due primarily to lower sales of room air
conditioners as a result of planned reductions in sales to The
Home Depot. Sales in the Engineered Products segment of
$28.6 million decreased by 5.4% from $30.2 million in 2005, due
primarily to lower sales of industrial air cleaning products in
Asia.
Gross profit in 2006 amounted to $36.9 million, or 13.2% of net
sales, compared with $39.7 million, or 13.3% of net sales in 2005.
Gross profit in the HVAC segment decreased to $30.1 million in
2006, from $32 million in 2005, due primarily to $10.5 million in
increased costs of copper, aluminum and plastic, as well as
components that use these materials that could not be passed along
to big-box room air conditioner and dehumidifier customers in the
form of price increases. Partly offsetting these costs were
higher margins on air conditioner sales to new customers due to an
improved product mix and increased profitability of commercial
HVAC sales.
Gross profit in the Engineered Products segment decreased to
$6.8 million from $7.7 million in 2005. Gross profit in the
Engineered Products segment was also impacted by rising commodity
costs. Price increases were implemented globally throughout 2006
to pass through the commodity cost increases to non-big-box room
air conditioner, unitary HVAC and Engineered Products customers.
Selling, general and administrative expenses (SG&A) were reduced
to $59.2 million, compared with SG&A of $71 million in 2005. The
decline in SG&A resulted primarily from a 42% reduction in
shipping and warehousing costs and a 25% reduction in research and
development costs resulting from the consolidation of most R&D
activities into the company's new facility in China.
During 2006, the company recognized $3.7 million in restructuring
charges primarily related to discontinuing room air conditioner
sales to The Home Depot and Wal-Mart and discontinuing the
manufacture and sale of dehumidifiers due to low profitability.
The company recorded a goodwill impairment charge of $54 million,
also resulting from its decision to no longer focus on the low
profit, big-box segment of the market.
The 2006 operating loss of $22.3 million before restructuring and
non-cash goodwill impairment charges, narrowed from $31.4 million
in 2005. Including restructuring and non-cash goodwill impairment
charges, the 2006 operating loss amounted to $80 million, compared
with $52.8 million in 2005.
Net interest expense was $21.7 million in 2006, compared to net
interest expense of $22.3 million in 2005.
The company recorded a full valuation allowance against deferred
tax assets in 2006 which resulted in a $20.6 million non-cash
charge in income tax expense.
In 2005, the company recorded non-recurring income from
discontinued operations of $13.5 million.
In 2006, the company generated positive operating cash flow of
$5.3 million compared to negative operating cash flow of $493,000
in 2005.
The company sold non-core assets during the year, including its
German HVAC distribution company and property in Maryland and
Tennessee for $12.5 million.
Subsequent to fiscal 2006 year end, the company completed
$90 million in new senior secured financing which will support
continued growth of its global air treatment businesses. As a
result, the company is no longer pursuing the sale of its Indoor
Air Quality business.
Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1cc6
About Fedders Corp.
Based in Liberty Corner, New Jersey, Fedders Corporation --
http://www.fedders.com/-- manufactures and markets air treatment
products, including air conditioners, air cleaners, dehumidifiers,
and humidifiers. The company has production facilities in the
United States in Illinois, North Carolina, New Mexico, and Texas
and international production facilities in the Philippines, China
and India.
FIRST UNION: Fitch Holds Low-B Ratings on 3 Certificate Classes
---------------------------------------------------------------
Fitch Ratings upgrades First Union National Bank-Chase Manhattan
Bank's commercial mortgage pass-through certificates, series
1999-C2:
-- $41.4 million class G to 'AA' from 'A+';
-- $11.8 million class H to 'A' from 'A-'; and
-- $11.8 million class J to 'BBB+' from 'BBB-'.
In addition, Fitch affirms these classes:
-- $592.5 million class A-2 at 'AAA';
-- Interest-only class IO at 'AAA';
-- $47.3 million class B at 'AAA';
-- $62 million class C at 'AAA';
-- $14.8 million class D at 'AAA';
-- $41.4 million class E at 'AAA';
-- $17.7 million class F at 'AAA';
-- $11.8 million class K at 'BB+'.
-- $11.8 million class L at 'BB-'; and
-- $11.8 million class M at 'B'.
The $8.1 million class N is not rated by Fitch.
The rating upgrades reflect the improved credit enhancement levels
resulting from scheduled amortization and the defeasance of an
additional 15 loans (10.4%) since Fitch's last rating action.
In total 56 loans (39.4%) have defeased. As of the March 2007
distribution report, the pool's aggregate certificate balance was
reduced 25.2% to $884.2 million from $1.18 billion at issuance.
Currently, two loans (1%) are in special servicing, with losses
expected. The first specially serviced loan (0.5%) is secured by
a 51,282-square foot retail property located in Chesapeake,
Virginia. The property was 100% leased to Winn Dixie, which filed
for bankruptcy in February 2005. Winn Dixie rejected the lease in
its bankruptcy proceeding in June 2006 and the rejection was
approved by the court. The special servicer has postponed the
foreclosure proceeding and is negotiating with the borrower toward
full resolution of the loan.
The second specially serviced loan (0.45%) is secured by a 111-bed
health care property located in Macon, Georgia. The special
servicer is working with the borrower for a discounted payoff.
Fitch expects losses from both specially serviced loans will be
absorbed by the non-rated Class N.
FIRST UNION: Fitch Lifts Ratings on $8.9 Mil. Class L Certs. to B+
------------------------------------------------------------------
Fitch Ratings upgrades six classes of First Union National Bank
Commercial Mortgage Trust's commercial mortgage pass-through
certificates, series 1999-C4:
-- $13.3 million class F to 'AAA' from 'AA+'.
-- $33.2 million class G to 'A' from 'BBB+';
-- $11.1 million class H to 'BBB+' from 'BBB-';
-- $2.2 million class J to 'BBB-' from 'BB+';
-- $6.6 million class K to 'BB+' from 'BB'; and
-- $8.9 million class L to 'B+' from 'B'.
In addition, Fitch affirms these classes:
-- $11.7 million class A-1 at 'AAA';
-- $447.2 million class A-2 at 'AAA';
-- Interest-only class IO at 'AAA';
-- $46.5 million class B at 'AAA';
-- $42.1 million class C at 'AAA';
-- $13.3 million class D at 'AAA';
-- $28.8 million class E at 'AAA'; and
-- $8.9 million class M at 'B-'.
Fitch does not rate the $6.2 million class N certificates.
The rating upgrades are due to defeasance and paydown since
Fitch's last ratings action. Forty-seven loans have defeased
since issuance, including five of the top 10 loans. As of the
March 2007 distribution date, the pool has paid down 23.2% to
$679.9 million from $885.7 million at issuance.
There is currently one asset (0.7%) that is 30-days delinquent.
The loan is secured by two industrial properties in Dallas, Texas.
Combined occupancy at the two properties as of March 2007 has
declined to 83% from 100% at issuance. The loan is due for its
February and March payments. Fitch will continue to monitor the
performance of this asset.
FREEPORT-MCMORAN: S&P Lifts Corporate Credit Rating to BB+ from BB
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on New Orleans, Louisiana-based Freeport-McMoRan
Copper & Gold Inc. to 'BB+' from 'BB' following the report that
Freeport had successfully completed $5.76 billion of common and
mandatorily convertible preferred stock.
Proceeds will be applied toward debt reduction, specifically term
loans A and B. The outlook is stable.
Pro forma for the equity offering, Freeport will have $12 billion
of book debt.
In addition, Standard & Poor's has taken issue-specific rating
actions.
For Phelps Dodge Corp.:
-- Corporate credit rating raised to 'BB+' from 'BB',
-- senior unsecured rating raised to 'BB+' from 'BB-', and
-- Cyprus Amax Minerals Co.'s existing rating on 7.375%
senior secured notes due 2007 raised to 'BBB-' from 'BB+'.
For Freeport-McMoRan:
-- existing rating on $613 million of aggregate senior
secured notes raised to 'BBB-' from 'BB+',
-- preferred stock's rating raised to 'B+' from 'B',
-- $6 billion of senior unsecured notes' rating raised to
'BB' from 'B+', and
-- bank loan rating raised to 'BBB-' from 'BB+'.
In addition, Standard & Poor's affirmed its '1' recovery rating on
Freeport's and Cyprus Amax's secured notes and on Freeport's bank
loans.
"Although the former 'BB' corporate credit rating on Freeport gave
consideration to a near-term equity offering, the amount raised to
be applied toward debt reduction far exceeded our original
expectations," said Standard & Poor's credit analyst Thomas
Watters.
The ratings on Freeport reflect its leading position in copper
mining, its significant and diverse reserve base, its very
low-cost Indonesian operations, strong liquidity, and current
favorable metals prices. The ratings also reflect very aggressive
debt leverage, exposure to cyclical and volatile commodity prices,
rising costs, challenges faced at its mature, U.S.-based
operations, and exposure to the political and sovereign risks of
Indonesia.
Pro forma for the acquisition, Freeport will be the world's
second-largest copper producer, with 3.6 billion pounds of equity
production in 2006, ranking behind Corporacion Nacional del Cobre
de Chile. Freeport's Indonesian-based Grasberg operations are one
of the world's lowest-cost copper mines because of the favorable
geologic conditions of its reserves, high ore grades, cheap labor
and power costs, and meaningful gold by-product.
Freeport should also benefit from Phelps' good production pipeline
potential--specifically, the low-cost Tenke Fungurame project in
the Congo, which is, however, exposed to that country's political
risks.
G-FORCE 2005-RR2: S&P Junks Ratings on Three Certificate Classes
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
12 classes of commercial mortgage-backed securities pass-through
certificates from G-FORCE 2005-RR2 Trust.
Concurrently, the ratings on six other classes were affirmed.
The downgrades reflect expected credit support erosion related to
anticipated losses and the negative credit migration of several
certificates in the collateral pool.
As of the March 26, 2007, remittance report, the collateral pool
consisted of 128 classes of subordinated fixed-rate CMBS
pass-through certificates with an aggregate principal balance of
$887.1 million, compared with 134 classes of certificates totaling
$996.4 million at issuance. The collateral pool includes 24
distinct CMBS transactions issued between 1995 and 2002.
Thirty-five percent of the collateral balance is concentrated in
five underlying transactions:
-- GMAC Commercial Mortgage Securities' series 2000-C3 (9%);
-- G3 Strategic Investments series 2002-WL1 (8%);
-- GMAC Commercial Mortgage Securities Inc.'s series 2002-C1
(6%);
-- GMAC Commercial Mortgage Securities Inc.'s series 2002-C2
(6%); and
-- CDC Commercial Mortgage Trust 2002-FX1 (6%).
The 24 CMBS transactions are collateralized by 2,870 loans with an
outstanding principal balance of $18.5 billion, down from
3,192 loans with an aggregate principal balance of $24.2 billion
at issuance. The publicly rated certificates and credit-estimated
certificates in the collateral pool exhibit credit characteristics
consistent with 'B+' rated obligations, on average, down from
'BB-' at issuance. At issuance, 16.4% of the certificates had
investment-grade ratings or received credit estimates commensurate
with investment-grade obligations; currently, the credit quality
of 17.9% of the certificates is commensurate with an investment-
grade rating.
Nearly half of the investment-grade obligation exposure is
concentrated in one certificate, the current balance of which has
declined 44% since issuance. Several certificates with credit
estimates, however, have experienced downward credit migration and
have suffered realized losses, which contributed to the lowered
ratings.
Because the collateral for the mortgage certificates consists of
CMBS pass-through certificates rather than mortgage loans, there
is no direct relationship between real estate losses in the loan
pools and losses realized by the G-FORCE 2005-RR2 Trust
transaction. Losses associated with the mortgage loans are first
realized by the CMBS trusts that issued the pass-through
certificates secured by the mortgage loans. The losses on the
pass-through certificate balances are then allocated to the
balances of the certificates in the 2005-RR2 transaction. The
resultant credit enhancement levels adequately support the lowered
and affirmed ratings.
Ratings Lowered
G-FORCE 2005-RR2 Trust
Commercial Mortgage-Backed Securities
Pass-Through Certificates Series 2005-RR2
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
B AA- AA 33.28%
C BBB+ A 27.94%
D BBB A- 25.97%
E BBB- BBB+ 23.58%
F BB+ BBB 20.91%
G BB- BBB- 17.39%
H B+ BB+ 15.14%
J B BB 13.74%
K B- BB- 12.47%
L CCC+ B+ 11.06%
M CCC B 9.88%
N CCC- B- 8.67%
Ratings Affirmed
G-FORCE 2005-RR2 Trust
Commercial Mortgage-Backed Securities
Pass-Through Certificates Series 2005-RR2
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 97.90%
A-2 AAA 80.99%
A-3FL AAA 52.81%
A-4A AAA 40.59%
A-4B AAA 40.59%
X AAA N/A
N/A -- Not applicable.
GALVESTON PROPERTY: Moody's Junks Rating on Mortgage Revenue Bonds
------------------------------------------------------------------
Moody's Investors Service has downgraded the rating on the
Galveston Property Finance Authority, Inc., Texas, Single Family
Mortgage Revenue Series 1991A to Caa1 from A3. The outlook on the
bonds is stable.
The Caa1 rating reflects the recent downward trend in the
asset-to-debt ratio as well as the expected loss on the bonds upon
maturity on Sept. 1, 2011. The amount of debt outstanding as of
Feb. 28, 2007 is $540,000.
Although the PADR of 1.019 as of July 2005 was satisfactory at the
A3 rating level, asset growth has declined relative to what was
expected for this program. Despite the positive spread between
the outstanding bond (8.5%) and mortgage loan (10%) interest
rates, the PADR dropped to 0.983 as of Feb. 28, 2007.
This decline is likely a result of high levels of loan prepayments
and subsequent reinvestment of proceeds in lower earning
investments until bonds could be called. The Caa1 rating reflects
Moody's expectation that a portion of the remaining debt
outstanding will likely default.
The portfolio consists of 29 highly seasoned loans that were
originated over 1980-1981. The trustee reports that as of Feb.
28, 2007, there were 3 loans 30 days or more delinquent which
equates to approximately 10% of the portfolio.
In addition, there is a pool insurance policy with MGIC with a
loss limit in excess of the outstanding loan balance to cover
losses to the program from defaulted loans. A debt service
reserve in the amount of 6% of bonds outstanding enhances
bondholder security.
The outlook on the bonds has been revised to stable. The
downgrade to the Caa1 rating level captures Moody's projection for
the bonds' expected loss upon maturity.
GLACIER FUNDING Moody's Rates $6.5 Million Class G Notes at Ba1
---------------------------------------------------------------
Moody's Investors Service assigned these ratings to notes issued
by Glacier Funding CDO V, Ltd.:
* Aaa to the $200,000,000 Class A-1 First Priority Senior
Secured Floating Rate Notes Due 2051;
* Aaa to the $122,000,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2051;
* Aaa to the $46,000,000 Class A-3 Third Priority Senior
Secured Floating Rate Notes Due 2051;
* Aa2 to the $44,000,000 Class B Fourth Priority Senior
Secured Floating Rate Notes Due 2051;
* Aa3 to the $15,000,000 Class C Fifth Priority Senior Secured
Floating Rate Notes Due 2051;
* A2 to the $20,500,000 Class D Sixth Priority Mezzanine
Secured Deferrable Floating Rate Notes Due 2051;
* Baa2 to the $26,500,000 Class E Seventh Priority Mezzanine
Secured Deferrable Floating Rate Notes Due 2051;
* Baa3 to the $5,500,000 Class F Eighth Priority Mezzanine
Secured Deferrable Floating Rate Notes Due 2051 and
* Ba1 to the $6,500,000 Class G Ninth Priority Mezzanine
Secured Deferrable Floating Rate Notes Due 2051.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments.
Terwin Money Management LLC will manage the selection, acquisition
and disposition of collateral on behalf of the Issuer.
GMAC COMMERCIAL: Moody's Junks Rating on Class K & L Certificates
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of five classes,
downgraded the ratings of two classes and affirmed the ratings of
five classes of GMAC Commercial Mortgage Securities, Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1999-C2:
-- Class A-2, $538,000,144, affirmed at Aaa
-- Class X, Notional, affirmed at Aaa
-- Class B, $51,161,000, affirmed at Aaa
-- Class C, $48,725,000, upgraded to Aaa from Aa2
-- Class D, $14,618,000, upgraded to Aaa from Aa3
-- Class E, $41,416,000, upgraded to Aa2 from Baa1
-- Class F, $12,181,000, upgraded to A1 from Baa2
-- Class G, $12,182,000, upgraded to A3 from Baa3
-- Class H, $46,289,000, affirmed at Ba2
-- Class J, $7,308,000, affirmed at B1
-- Class K, $19,490,000, downgraded to Ca from Caa2
-- Class L, $3,723,375, downgraded to C from Ca
As of the March 15, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 18.4%
to $795.0 million from $974.5 million at securitization.
The Certificates are collateralized by 114 mortgage loans. The
loans range in size from less than 1.0% of the pool to 11.5% of
the pool, with the top 10 loans representing 42.0% of the pool.
The pool is composed of an investment grade loan component
(14.4%), a conduit component (35.2%) and a credit tenant lease
("CTL") component (12.3%). In addition 45 loans, representing
38.1% of the pool, have defeased and are collateralized by U.S.
Government securities.
One loan, representing 0.8% of the pool, is in special servicing.
Moody's has estimated a loss of approximately $2.7 million for the
specially serviced loan. Seven loans have been liquidated from the
trust, resulting in realized losses of approximately
$18.2 million. Twenty loans, representing 9.2% of the pool, are
on the master servicer's watchlist.
Moody's was provided with year-end 2005 and partial-year 2006
operating results for approximately 97.0% and 91.0% of the pool,
respectively, excluding the CTL and defeased loans.
Moody's loan to value ratio for the conduit component is 79.5%,
compared to 86.9%, at Moody's last full review in June 2005 and
compared to 88.1% at securitization. Moody's is upgrading Classes
C, D, E, F and G due to increased subordination levels, a high
percentage of defeased loans and stable overall pool performance.
Moody's is downgrading Classes K and L due to realized losses,
projected losses from the specially serviced loans and LTV
dispersion. Based on Moody's analysis, 13.3% of the conduit pool
has a LTV over 100.0%, compared to 14.5% at the last review and
compared to 8.1% at securitization. Classes M and N have been
completely eliminated due to realized losses.
The pool includes two investment grade loans. The largest
investment grade loan is the Queens Center Mall Loan at
$91.6 million (11.5%), which is secured by 430,000 square feet of
in-line space in a 1.0 million square foot regional mall located
in New York City, New York. A $275.0 million expansion,
renovation and modernization program was completed in late 2004.
The mall is anchored by J.C. Penney and Macy's, which own their
respective improvements. This property is the only regional mall
in Queens and has been performing at consistently high occupancy
levels. Effective gross income has increased by approximately
20.0% since securitization. The loan has amortized by
approximately 8.2% since securitization. Moody's current shadow
rating is A3, the same as at last review.
The second investment grade loan is the Holiday Inn Mart Plaza
Loan at $23.0 million (2.9%), which is secured by a 528-room full
service hotel located in downtown Chicago. As of December 2006
RevPAR was $107.50, compared to $87.50 at securitization. The
loan has amortized by approximately 12.8% since securitization.
Moody's current shadow rating is Baa1, compared to Baa3 at last
review.
The top three conduit loans represent 12.0% of the outstanding
pool balance. The largest conduit loan is the Red Rose Commons
Loan at $26.1 million (3.3%), which is secured by a 265,000 square
foot power center located in Lancaster, Pennsylvania. The
property is 99.0% leased, essentially the same as at
securitization. The loan has amortized by approximately 7.7%
since securitization. Moody's LTV is 81.7%, compared to 84.4% at
last review and compared to 95.8% at securitization.
The second largest conduit loan is the 729 Seventh Avenue Loan at
$21.3 million (2.7%), which is secured by a 163,000 square foot
office building located in New York City. Net operating income
has increased by approximately 35.0% since securitization. The
loan has amortized by approximately 8.9% since securitization.
Moody's LTV is 70.1%, compared to 87.2% at last review and
compared to 94.4% at securitization.
The third largest conduit loan is the 489 Fifth Avenue Loan at
$18.4 million (2.3%), which is secured by a 150,000 square foot
office building located in New York City. Performance has
improved due to higher rent and occupancy. The loan has amortized
by approximately 7.6% since securitization. Moody's LTV is 81.3%,
compared to 97.0% at last review and compared to 84.2% at
securitization.
The CTL component includes seven loans at $98.1 million (12.3%)
secured by properties under bondable leases. The largest
exposures are Ingram Micro, CarMax, and Costco Wholesale
Corporation.
GRANITE BROADCASTING: Wants To Hire Ernst & Young as Auditors
-------------------------------------------------------------
Granite Broadcasting Corp. and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York for
authority to employ Ernst & Young LLP as their independent auditor
and tax services provider, pursuant to Section 327(a) of the
Bankruptcy Code and Rule 2014(a) of the Bankruptcy Procedure.
Lawrence I. Willis, chief financial officer of Granite
Broadcasting Corporation, tells the Court that Ernst & Young has
provided the Debtors with independent auditing, accounting and
tax services for 15 years, during which time it has acquired
considerable knowledge of the Debtors' business and financial
affairs.
The Debtors have selected the firm because of its extensive
experience and qualifications in providing services to its
clients, including debtors and other constituents involved in
Chapter 11 proceedings.
Pursuant to five engagement letters executed by the parties,
Ernst & Young has agreed to:
(a) prepare the annual audit of the consolidated financial
statements of Granite for the year ended December 31,
2006;
(b) research and consult with the Debtors' management
regarding financial accounting and reporting matters;
(c) participate in scheduled meetings of the Audit Committee
of Granite's Board of Directors;
(d) prepare the audit of the financial statements of the
Granite Broadcasting Corporation Employee Savings and
Retirement Plan for the year ended December 31, 2006;
(e) assist with tax inquiries and examination and routine
consultations, including acquisitions and dispositions;
and
(f) prepare the 2006 Federal, State, and Local Income and
Franchise Tax Returns.
Mr. Willis relates that Ernst & Young holds a claim against
Granite for $216,894, for fees due prior to the Petition Date,
but agrees to waive this claim upon the Court's approval of the
firm's retention in the Debtors' Chapter 11 cases.
Ernst & Young's fixed fee for the Annual Audit Services,
Financial Accounting And Reporting Services and Audit Committee
Participation will be approximately $580,000. Moreover, the
firm's fixed fee for Granite's Employee Savings and Retirement
Plan Audit Services will be approximately $27,000.
For the remaining services, Ernst & Young's fees will be based on
these hourly rates:
Professional Rate
------------ ----
Partners, Principals, & Directors $790
Senior Managers $616
Managers $490
Seniors $295
Staff $230
Kapil K. Jain, a partner at Ernst & Young, assures the Court that
his firm is a "disinterested person", as defined in Section
101(14) of the Bankruptcy Code.
Mr. Jain further discloses that:
(a) Akin, Gump, Strauss, Hauer & Feld LLP; Houlihan Lokey
Howard & Zukin LLP; BDO Seidman LLP; Honigman Miller
Schwartz and Cohn LLP; Littler Mendelson; Richard Layton &
Finger; Ropes & Gray LLP; and, Milbank, Tweed, Hadley &
McCloy LLP have provided in the past, and are currently
providing, services to Ernst & Young;
(b) Ernst & Young is currently a party or participant in
certain litigation matters involving parties-in-interest
in the Debtors' cases;
(c) Ernst & Young agrees to waive its right to receive any
fees incurred on the Debtors' behalf prior to the Petition
Date; and
(d) during the 90 days immediately preceding the Petition
Date, the Debtors paid $374,987 in fees to Ernst & Young.
Headquartered in New York, Granite Broadcasting Corp.
-- http://www.granitetv.com/-- owns and operates, or provides
programming, sales and other services to 23 channels in 11
markets: San Francisco, California; Detroit, Michigan; Buffalo,
New York; Fresno, California; Syracuse, New York; Fort Wayne,
Indiana; Peoria, Illinois; Duluth, Minnesota-Superior, Wisconsin;
Binghamton, New York; Utica, New York and Elmira, New York. The
company's channel group includes affiliates of NBC, CBS, ABC, CW
and My Network TV, and reaches approximately 6% of all U.S.
television households.
The company and five of its debtor-affiliates filed for chapter 11
protection on Dec. 11, 2006 (Bankr. S.D.N.Y. Case No. 06-12984).
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, it estimated
assets of $443,563,020 and debts of $641,100,000. (Granite
Broadcasting Corp. Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
The Debtors' exclusive period to file a plan expires on April 10,
2007.
GRANITE BROADCASING: Andrew Hruska Files Examiner Report
--------------------------------------------------------
Andrew C. Hruska, Esq., at King & Spalding, LLP, in New York
delivered the results of his investigation into the facts
surrounding Granite Broadcasting Corp.'s entry into a term loan
facility and a related restructuring agreement with Silver Point
Finance LLC to Hon. Allan L. Gropper on April 2, 2007.
In his 82-page report, Mr. Hruska -- the Court-appointed Chapter
11 examiner for Granite -- concluded that potential claims of
breach of fiduciary duty exists against (i) W. Don Cornwell, in
his capacity as controlling shareholder and as an officer of
Granite, and (ii) Granite's Board of Directors, which includes
Mr. Cornwell but not Eugene Davis and Kirk Aubry.
"The Examiner has not concluded that the Debtors or their estates
have proper legal of factual grounds to assert claims against any
other parties," Mr. Hruska said in his report.
As previously reported, Mr. Hruska was authorized by the Court to
investigate:
* whether the Debtors, including their officers and directors,
discharged their fiduciary duties in negotiating and
entering into certain transactions;
* any claims of the Debtors or their estates against any third
parties, including avoidance, insider status, equitable
subordination, and recharacterization; and
* the perfection, validity, and enforceability of the liens
securing Granite's senior secured notes and prepetition
secured loans, as well as whether any potential avoidance
actions can be pursued by Granite.
Mr. Hruska disclosed in his report that in the course of his
investigation, he has developed evidence that would support
causes of action by Granite against Mr. Cornwell and the Board
for breach of their fiduciary duties of loyalty and good faith.
He added that he has considered a number of other potential
causes of action -- including claims against Silver Point on a
lender liability theory, or an aiding and abetting breach of
fiduciary duty theory, and against Harbinger Capital Partners
Master Fund I, Ltd., on a tortuous interference with contract
theory, among others -- but has not discovered any additional
claims with sufficient evidentiary support to merit discussion.
June 1 Interest Payment
The Examiner informs the Court that the most significant event
presaging the Debtors' bankruptcy filing was a June 1, 2006,
interest payment due on their senior secured notes.
To make this payment, Mr. Hruska says, the Debtors ultimately
entered into a term loan facility with Silver Point, which
enabled them to make the June 1 payment and acquire WBNG-TV, a
Birmingham station.
The Examiner notes that at the time that Granite's Board voted to
accept Silver Point's proposed term loan facility, there was a
competing proposal submitted by preferred equity holders --
Harbinger and Golden Tree High Yield Master Fund II, Ltd. -- for
consideration.
"The terms of that proposal were, in some respects, arguably more
beneficial to the Debtors than the terms of Silver Point's
proposal," discloses Mr. Hruska.
However, absent a bankruptcy filing, the Preferred Equity
Holders' Proposal required the consent of Mr. Cornwell, which was
never given, Mr. Hruska says.
Consequently, the Board agreed that the Debtors should enter into
the Silver Point term loan facility, which obligated the Debtors
to negotiate and subsequently agree on a proposed restructuring
acceptable to Silver Point.
Allegations That Could Support
Potential Causes Of Action
By mid-2005, the Board knew that it would encounter a severe
liquidity crunch on June 1, 2006, due to an outstanding interest
payment for approximately $19,000,000 on their Senior Notes, Mr.
Hruska relates. The Board also knew that it could not maintain
its capital structure, primarily because of the size of the
secured debt and the burden of the mounting unpaid dividend of
the preferred stock, and that a major financial restructuring
would be necessary, he adds.
Mr. Hruska reports that during the first half of 2006, the Board
focused its efforts on resolving the Debtors' problems with its
capital structure by, among other things:
(a) negotiations or attempts at restructuring negotiations
separately with Harbinger and with Silver Point; and
(b) attempts to find new investors to participate in
restructuring.
The Examiner points out that Mr. Cornwell controlled the
direction taken by the Board, the management and the Debtors'
advisors on this issue. Moreover, Mr. Cornwell appointed
himself, with the Board's approval, chair of the newly formed
restructuring committee.
"Cornwell's potential conflict of interest was twice discussed by
the Board in April and June, but the decision to preclude him
from discussions was dismissed each time as not relevant," Mr.
Hruska tells Judge Gropper.
Although the evidence suggests various reasons for the Board's
limited exploration of alternatives, ultimately, a trier of fact
could conclude that Mr. Cornwell preferred not to devote serious
consideration to other alternatives. Mr. Cornwell felt greater
personal comfort in his potential future with a restructured
Granite under the control of Silver Point versus Harbinger, whose
offer was conditioned on Mr. Cornwell's resignation, Mr. Hruska
says.
On June 23, 2006, Houlihan Lokey Howard & Zukin summarized
restructuring negotiations with Silver Point in a term sheet that
included preserving value for Preferred and Common Stock;
providing an immediate liquidity solution; changing control in
favor of Silver Point; but preserving Mr. Cornwell's role as
Chairman and providing him with various other benefits.
At this point, it became clear that Mr. Cornwell would not permit
a transaction between Harbinger and Granite unless his personal
demands were satisfied, derailing any Harbinger-Granite
transaction, Mr. Hruska relates.
Mr. Cornwell also argued that he was entitled (i) as controlling
shareholder, to vote his control in his own self-interest and
request a control premium; and (ii) as an officer and employee,
to refuse to agree to an amendment or termination of a valid
employment agreement without consideration.
For these reasons, Mr. Hruska finds that Mr. Cornwell may be
potentially liable for a breach of fiduciary duty of loyalty
based on these allegations:
* if Mr. Cornwell used his rights and influence to control the
process to search for recapitalization alternatives to the
detriment of Granite and its minority shareholders;
* Mr. Cornwell knew that the Silver Point deal was unfair
based on the advise from Houlihan Lokey, but the Harbinger
offer could have a negative effect impact on him personally;
and
* Mr. Cornwell engaged in self-dealing and received improper
benefits by virtue of these acts.
Potential Causes of Action Against Directors
According to Mr. Hruska, the evidence he has gathered does not
support an allegation that any director, other than perhaps Mr.
Cornwell, received an improper personal benefit or have engaged
in self-dealing.
However, if subjected to the entire fairness standard, Mr. Hruska
believes that the Directors are potentially liable for breaches
of their duties of loyalty because they allowed Mr. Cornwell to
direct the process of seeking financial alternatives for the
company without properly overseeing, supervising, and controlling
his actions.
The Directors' duties of loyalty required them to exercise
vigilance on behalf of the corporation against the possibility
that Mr. Cornwell, as an interested director, manager and
controlling shareholder, would exert improper influence over the
process of seeking financial alternatives, Mr. Hruska says.
"Fair Price is more difficult to determine," Mr. Hruska
continues.
He notes that the question is whether the Debtors received a fair
deal when it entered into the term loan facility with Silver
Point, as compared with its alternatives at the time -- entering
into the Harbinger proposal or immediately filing for bankruptcy
relief.
Houlihan Lokey believed there was residual value for the
Preferred Shareholders when the Silver Point Term Loan Facility
were entered into, but now does not, Mr. Hruska relates. This
may reflect a refinement of Houlihan Lokey's view of a
deterioration in the value of Granite -- which could have been
forestalled if a bankruptcy had been filed earlier -- or a
reflection of the value that was "as might be expected of someone
in Silver Point's position to assure that they would be entitled
to get postpetition interest".
However, a determination of value is beyond the scope of the
Examiner's report, says Mr. Hruska.
No Breach of Revlon Duties
In Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 502 A.2d
173, 182 (Del. 1986), the Delaware Supreme Court held that the
directors' duties change significantly once a sale of the company
becomes the goal of the board from preserving the company as a
corporate entity to maximizing the company's value at a sale for
the shareholders' benefit. Later cases have narrowly construed
Revlon duties to arise only in the context of a change of control
where the dissolution or break-up of the corporation is
inevitable.
"A restructuring/recapitalization may trigger Revlon duties if it
is the 'functional equivalent' of a change in control,"
Mr. Hruska explains.
According to Mr. Hruska, in determining whether the Granite
Directors are potentially liable for breaches of "Revlon" duties
in connection with the Silver Point transactions, the critical
issue is when the Revlon duties arose in the Debtor's
circumstances -- that is, when the functional equivalent of a
change of control became inevitable.
Mr. Hruska concludes that inevitable change of control did not
arise until after the Term Loan transaction in July committed the
Debtors to a restructuring on Silver Point's terms, and the
Debtors entered into a contract that explicitly contemplated a
restructuring that would involve a change of control.
Therefore, Revlon duties would not apply, the Examiner informs
the Court.
No Lien Analysis
The Examiner informs Judge Gropper that he has not performed a
lien analysis nor investigated potential avoidance actions.
However, if directed to do so by the Court, Mr. Hruska says he
will supplement his report to include these topics.
Mr. Hruska adds that he anticipates filing an amended Examiner's
Report pursuant to the U.S. Trustee's request for an amended
Examiner Order.
Headquartered in New York, Granite Broadcasting Corp.
-- http://www.granitetv.com/-- owns and operates, or provides
programming, sales and other services to 23 channels in 11
markets: San Francisco, California; Detroit, Michigan; Buffalo,
New York; Fresno, California; Syracuse, New York; Fort Wayne,
Indiana; Peoria, Illinois; Duluth, Minnesota-Superior, Wisconsin;
Binghamton, New York; Utica, New York and Elmira, New York. The
company's channel group includes affiliates of NBC, CBS, ABC, CW
and My Network TV, and reaches approximately 6% of all U.S.
television households.
The company and five of its debtor-affiliates filed for chapter 11
protection on Dec. 11, 2006 (Bankr. S.D.N.Y. Case No. 06-12984).
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, it estimated
assets of $443,563,020 and debts of $641,100,000. (Granite
Broadcasting Corp. Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
The Debtors' exclusive period to file a plan expires on April 10,
2007.
GS MORTGAGE: Moody's Hold Low-B Ratings on 6 Certificate Classes
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of two classes and
affirmed the ratings of 19 classes of GS Mortgage Securities
Corporation II, Commercial Mortgage Pass-Through Certificates,
Series 2004-GG2:
-- Class A-1A, $170,199,375, affirmed at Aaa
-- Class A-2, $88,535,550, affirmed at Aaa
-- Class A-3, $256,000,000, affirmed at Aaa
-- Class A-4, $208,000,000, affirmed at Aaa
-- Class A-5, $173,000,000, affirmed at Aaa
-- Class A-6, $1,299,650,000, affirmed at Aaa
-- Class X-C, Notional, affirmed at Aaa
-- Class X-P, Notional, affirmed at Aaa
-- Class B, $65,110,000, upgraded to Aa1 from Aa2
-- Class C, $29,299,000, upgraded to Aa2 from Aa3
-- Class D, $52,088,000, affirmed at A2
-- Class E, $29,300,000, affirmed at A3
-- Class F, $26,044,000, affirmed at Baa1
-- Class G, $22,789,000, affirmed at Baa2
-- Class H, $29,299,000, affirmed at Baa3
-- Class J, $6,511,000, affirmed at Ba1
-- Class K, $13,022,000, affirmed at Ba2
-- Class L, $13,022,000, affirmed at Ba3
-- Class M, $9,767,000, affirmed at B1
-- Class N, $6,511,000, affirmed at B2
-- Class O, $9,766,000, affirmed at B3
As of the March 12, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 2.6%
to $2.54 billion from $2.61 billion at securitization.
The Certificates are collateralized by 140 mortgage loans ranging
in size from less than 1.0% to 7.2% of the pool, with the top 10
loans representing 43.2% of the pool. The pool includes four
shadow rated loans, representing 21.4% of the pool. Five loans,
representing 11.9% of the pool, have defeased and are securitized
by U.S. Government securities.
Since securitization there have been no realized losses and
currently there are no loans in special servicing. Seven loans,
representing 2.7% of the pool, are on the master servicer's
watchlist.
Moody's was provided with year-end 2005 and partial-year 2006
financial information for 93.6% and 77.9%, respectively, of the
pool. Moody's loan to value ratio for the conduit component is
91.7%, compared to 93.9% at securitization. Moody's is upgrading
Classes B and C due to improved overall pool performance and
defeasance.
The largest shadow rated loan is the Grand Canal Shops at the
Venetian Loan at $182.0 million (7.2%), which represents a 44.5%
pari-passu interest in a first mortgage loan. The loan is secured
by a 537,000 square foot shopping center located within the
Venetian Casino Resort in Las Vegas, Nevada. The property was
96.0% occupied as of September 2006, compared with 98.0% at
securitization. The tenant mix includes a variety of restaurants
as well as upscale fashion and specialty retailers. Moody's
current shadow rating is A3, the same as at securitization.
The second largest shadow rated loan is the Daily News Building
Loan at $153.3 million (6.0%), which is secured by a 1.1 million
square foot office building located in the Grand Central Station
submarket of Manhattan. The property was 99.0% occupied as of
October 2006, the same as at securitization. Moody's current
shadow rating is Baa2, the same as at securitization.
The third largest shadow rated loan is the Garden State Plaza Loan
at $130.0 million (5.1%), which represents a 25.0% pari-passu
interest in a first mortgage loan. The loan is secured by the
borrower's interest in a 2.0 million square foot super-regional
mall located in Paramus, New Jersey. The center is anchored by
Macy's, Nordstrom, Neiman Marcus, Lord & Taylor and J.C. Penney.
The in-line space was 98.5% occupied as of January 2006, compared
to 95.1% at securitization. Moody's current shadow rating is A2,
the same as at securitization.
The fourth largest shadow rated loan is the 111 Eighth Avenue Loan
at $79.1 million (3.1%), which represents a 16.0% participation
interest in a first mortgage loan. The loan is secured by a
2.9 million square foot office and telecom building located in the
Chelsea area of New York City. The property was 99.2% leased as
of November 2006, compared to 90.0% at securitization. Major
tenants include Google, Sprint and CCH Legal Information. Moody's
current shadow rating is Baa2, the same as at securitization.
The top three non-defeased conduit loans represent 10.3% of the
pool. The largest conduit loan is the Stony Point Fashion Park
Loan at $111.5 million (4.4%) which is secured by the borrower's
interest in a 665,000 square foot shopping center located in
Richmond, Virginia. The property was 98.8% leased as of September
2006, compared to 96.4% at securitization. Major tenants include
Dillard's, Saks and Dick's Sporting Goods. Moody's LTV is 86.8%,
compared to 88.3% at securitization.
The second largest conduit loan is the Destin Commons Loan at
$81.9 million (3.2%), which is secured by a 480,000 square foot
shopping center located in Destin, Florida. The property was
92.6% occupied as of January 2007, compared to 83.1% at
securitization. Although the property's occupancy has improved
since securitization, financial performance has been impacted by
higher than projected operating expenses. Moody's LTV is 93.7%,
compared to 87.1% at securitization.
The third largest conduit loan is the Town and Country Resort Loan
at $68.4 million (2.7%), which is secured by a 966-room full
service hotel located in San Diego, California. Moody's LTV is
91.6%, compared to 96.4% at securitization.
GSR MORTGAGE: Fitch Assigns Low-B Ratings on Two Class Certs.
-------------------------------------------------------------
Fitch rates GSR Mortgage Loan Trust, series 2007-2F, residential
mortgage pass-through certificates:
-- $605,248,793 classes 1A-1 through 1A-5, 2A-1 through 2A-10,
3A-1 through 3A-10, 4A-1, 4A-2, A-P and A-X 'AAA';
-- $4,393,000 class M-1 'AA+';
-- $8,153,000 class B-1 'AA';
-- $3,763,000 class B-2 'A';
-- $2,196,000 class B-3 'BBB';
-- $1,254,000 class B-4 'BB'; and
-- $941,000 class B-5 'B.'
The 'AAA' rating on the senior certificates reflects the 3.50%
subordination provided by the 0.70% class M-1, 1.30% class B-1,
0.60% class B-2, 0.35% class B-3, 0.20% privately offered class
B-4, 0.15% privately offered class B-5, and 0.20% privately
offered class B-6. Class B-6 is not rated by Fitch. The ratings
also reflect the quality of the underlying collateral, the
strength of the legal and financial structures, and the master
servicing capabilities of Wells Fargo Bank, N.A., which is rated
'RMS1' by Fitch.
As of the March 1, 2007, cut-off date, the pool of loans consists
of 1,150 fixed-rate mortgage loans, which have 30-year through
40-year amortization terms. The mortgage pool has an average
unpaid principal balance of $545,394 and a weighted average FICO
score of 740. The weighted average amortized current
loan-to-value (CLTV) ratio is 69.32%. Rate/Term and cash-out
refinances represent 19.31 and 35.69%, respectively, of the
mortgage loans. The states that represent the largest geographic
concentration of mortgaged properties are California (42.61%), New
York (7.79%) and Florida (6.92%). All other states comprise fewer
than 5% of properties in the pool.
None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws.
GS Mortgage Securities Corp. purchased the mortgage loans from
each seller and deposited the loans in the trust, which issued the
certificates, representing undivided and beneficial ownership in
the trust. For federal income tax purposes, the securities
administrator will cause multiple real estate mortgage investment
conduit elections to be made for the trust. Wells Fargo Bank,
N.A. will act as securities administrator and U.S. Bank, N.A. will
serve as the trustee.
HMSC CORP: S&P Junks Rating on $110 Million 2nd-Lien Term Loan
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
rating on HMSC Corp. to 'B' from 'B+' as a result of the company's
$415 million refinancing.
At the same time, Standard & Poor's assigned its 'B' senior
secured debt rating to HMSC's $305 million senior credit facility,
which consists of a $285 million first-lien term loan and a
$20 million revolving credit line, and assigned its 'CCC+'
subordinated debt rating to the company's $110 million second-lien
term loan. The outlook is stable.
"The downgrade is in response to a refinancing that significantly
increased HMSC's debt leverage on a pro forma basis as of year-end
2006," said Standard & Poor's credit analyst Taoufik Gharib.
More importantly, HMSC's adjusted EBITDA interest coverage
materially decreased as a result of the refinancing, to 1.9x pro
forma basis as of year-end 2006 compared with 2.6x under the old
structure.
The counterparty credit rating on HMSC Corp., which is the
intermediate holding company of Swett & Crawford Group, reflects
S&C's highly leveraged capital structure, limited financial
flexibility, and low-quality balance sheet, the result of a large
amount of intangibles. Partially offsetting these negative
factors are the company's very good competitive position as the
No. 1 wholesale insurance broker in the country, and a seasoned
management team that has historically delivered strong operating
margins relative to the company's peers.
S&C will organically grow its revenue by about 4% in 2007.
"The company's top-line organic growth strategy will face mounting
pressure from softening casualty lines, stabilizing property and
energy rates, and increasing competition in the wholesale
brokerage industry," said Mr. Gharib.
The company's EBITDA margin is expected to continue to be healthy,
around 30%, and to outperform its immediate competitors. The 2007
pretax operating income and ROR will stay marginal because of
interest expenses and amortization of intangible assets.
However, this negative effect will be alleviated in the following
years as the company gradually pays down its debt.
Standard & Poor's anticipates that S&C will remain cash flow
positive and use some of its future earnings to gradually pay down
the first-lien term loan. As a result, the company's debt
leverage is expected to steadily decrease in 2008 and beyond.
Similarly, adjusted EBITDA interest coverage is expected to be at
least 1.9x in 2007 and improve prospectively.
S&C's capital expenditures are minimal and are expected to remain
low in the foreseeable future.
If the company's interest-coverage and debt-leverage metrics fall
short of Standard & Poor's expectations, the outlook or ratings
could be revised downward. If the company outperforms our
expectations, the outlook could be revised upward.
HUISH DETERGENTS: Moody's Junks Rating on $275 Mil. 2nd-Lien Loan
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to $700 million in
first lien senior secured bank credit facilities and a Caa1 rating
to $275 million in a second lien term loan being entered into by
Huish Detergents, Inc. and Spotless Acquisition Corp. as joint and
several obligors.
Moody's also assigned a B2 corporate family rating to Huish.
Proceeds from the credit facilities combined with new cash equity
from Vestar Capital Partners will be used to fund Vestar's
acquisition of a majority stake and controlling interest in the
company.
The rating outlook is stable.
Final ratings are subject to Moody's review of final
documentation. This is a first time rating for the company.
"Huish's B2 corporate family rating and stable outlook is
constrained by the high leverage and concentrated customer base,
offset to some degree by the company's stable revenue and earnings
potential, strong profitability and highly efficient and
vertically integrated manufacturing capabilities within the
detergent category", says Moody's Vice President Janice Hofferber.
While Moody's recognizes the long standing customer relationships,
generally stable outlook and significant barriers to entry that
Huish commands in the private label market, it also remains
mindful of the potential for earnings pressure as a result of the
company's participation in the highly competitive branded laundry
and personal care segments as well limited pricing flexibility to
offset higher potential commodity input costs.
Huish's ratings are also driven by its pro forma credit metrics
that are more consistent with a Caa profile. Pro forma Debt to
EBITDA and EBIT to interest ratios are expected to be
approximately 7.0x and 1.3x, respectively at closing.
Despite the weak credit metrics, funds from operations will be
sufficient to adequately cover required capital expenditures and
modest working capital requirements with the possibility of some
near-term debt reduction.
Assigned:
* Corporate family rating at B2;
* Probability of default rating of B2;
* $100 million senior secured revolving credit facility due
2013 at B1, LGD3, 36%;
* $600 million first lien term facility due 2014 at B1, LGD3,
36%; and
* $275 million second lien term facility due 2014 at Caa1,
LGD5, 88%.
Huish Detergents, Inc., based in Salt Lake City, Utah, is a
leading private label and value-brand manufacturer of laundry and
dish detergents, fabric softeners and related household and
personal care products. Huish produces value branded products
under the Sun brand and is a contract manufacturer for several
large international consumer products companies. For the fiscal
year ended Dec. 31, 2006, Huish's sales were approximately
$800 million.
HUNTSMAN INT'L: S&P Rates Proposed $2.29 Billion Senior Debt at BB
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned bank loan and recovery
ratings to Huntsman International LLC's proposed $2.29 billion
senior secured bank credit facilities, based on preliminary terms
and conditions.
The amended and restated credit facilities are rated 'BB' with a
recovery rating of '1', indicating the expectation of full
recovery of principal in the event of a payment default. Huntsman
will use proceeds from the proposed term loan B to refinance
borrowings under the existing term loan.
In addition, Standard & Poor's raised the ratings on the existing
$294 million of outstanding senior secured notes due 2010 to 'BB'
from 'BB-' and revised the recovery rating to '1' from '2',
indicating the expectation of full recovery of principal in the
event of a payment default.
Standard & Poor's also raised the ratings on Huntsman's existing
$198 million 11.50% senior unsecured notes to 'B+' from 'B' to
recognize the reduction of secured debt in the capital structure,
and affirmed the 'BB-' corporate credit ratings on Salt Lake City,
Utah-based chemicals producer Huntsman Corp. and its subsidiary
Huntsman International LLC.
The outlook is positive.
"The positive outlook reflects our belief that the improved
business portfolio, with its increased weighting toward the
company's higher growth and more competitive business positions,
will make Huntsman more resilient during industry or economic
downturns, less capital and energy intensive, and will provide
more consistent free cash generation to support growth and
additional debt reduction," said Standard & Poor's credit analyst
Kyle Loughlin.
Ratings have the potential to move modestly higher if Huntsman
remains committed to a financial policy that allows for the
improvement of its balance sheet while pursuing its growth
objectives.
Huntsman Corp. is a holding company with diverse chemical
operations that generated annual sales during 2006 of
approximately $10.6 billion. Through a strategic emphasis on
growing the performance chemicals business, Huntsman has decreased
reliance on commodity product categories and positioned the
company among the largest differentiated chemical companies
worldwide.
INSIGHT COMMS: Fitch Puts B+ Issue Default Rating on Watch Neg.
---------------------------------------------------------------
Fitch Ratings has placed Insight Communications Company, Inc.'s
and Insight Midwest, LP's 'B+' Issuer Default Rating on Rating
Watch Negative.
In addition, the 'B+' rating assigned to Insight Midwest's senior
unsecured debt, the 'CCC+' rating assigned to ICCI's senior
discount notes and the 'BB+' rating assigned to Insight Midwest
Holdings, LLC's senior secured bank facility have also been placed
on Rating Watch Negative.
Approximately $2.8 billion of debt as of Dec. 31, 2006 is affected
by Fitch's actions. Insight Midwest Holdings, LLC is a wholly
owned subsidiary of Insight Midwest, LP. ICCI owns a 50% interest
in Insight Midwest, LP while an indirect subsidiary of Comcast
Corporation owns the remaining 50% interest.
Fitch's action follows ICCI's report that it has agreed with a
subsidiary of Comcast Corporation to amend the partnership
agreement of Insight Midwest, LP that effectively divides the
assets and liabilities of the partnership and dissolves the
entity.
In accordance with the amendment ICCI will own cable systems
serving approximately 639,000 highly clustered basic subscribers
including systems located in Louisville and Lexington, Kentucky.
Additionally, ICCI will assume approximately $1.3 billion of the
former partnership's outstanding debt.
Following the close of the transaction, which is expected to close
by Dec. 31, 2007, ICCI will emerge as a much smaller cable MSO
lacking the size and scale that Fitch believes is necessary to
sustain longer term revenue, margin and free cash flow growth.
Additionally, as a stand alone entity, Fitch expects that
Insight's operating margins will be pressured somewhat as the
company will no longer benefit from the access to Comcast's
programming rates, equipment pricing and other cost synergies
previously afforded to the company through its partnership with
Comcast Corporation. Moreover, Insight will incur additional
operating expenses related to corporate expense and overhead as a
stand alone company.
As of year-end 2006 ICCI's consolidated leverage was 5.7x and
during 2006 generated negative free cash flow of approximately
$22.4 million. Following the completion of the transaction, Fitch
expects that Insight's leverage will approach 6.75x and that the
company will struggle to generate positive free cash flow.
In resolving the Negative Rating Watch, Fitch's review will focus
on ICCI's capital structure and prospects to improve its credit
profile following the completion of the transaction.
Additionally, Fitch will consider ICCI's prospects for sustainable
revenue, ARPU, operating margin and free cash flow growth.
Overall, Fitch's ratings for Insight reflect the operating
advantages and cost synergies derived from the company's
technologically upgraded network and its tightly clustered cable
systems, which primarily operate in the states of Kentucky,
Indiana, Illinois, and Ohio. Fitch's ratings are also indicative
of Insight's high leverage relative to its cable peer group, and
the increasing business risk attributable to Insight's credit
profile stemming from the persistent competitive threat from DBS
operators and the increasing likelihood that incumbent telephone
companies will enter the video business further elevating
competitive pressures.
Fitch has placed these ratings on Rating Watch Negative:
Insight Communications Company, Inc.
-- Issuer Default Rating 'B+'; and
-- Senior unsecured notes 'CCC+/RR6'.
Insight Midwest, LP
-- Issuer Default Rating 'B+'; and
-- Senior unsecured notes 'B+/RR4'.
Insight Midwest Holdings, LLC
-- Issuer Default Rating 'B+'; and
-- Senior Secured Bank 'BB+/RR1'.
INSIGHT MIDWEST: Fitch Rates Senior Unsecured Debt at B+
--------------------------------------------------------
Fitch Ratings has placed Insight Communications Company, Inc.'s
and Insight Midwest, LP's 'B+' Issuer Default Rating on Rating
Watch Negative.
In addition, the 'B+' rating assigned to Insight Midwest's senior
unsecured debt, the 'CCC+' rating assigned to ICCI's senior
discount notes and the 'BB+' rating assigned to Insight Midwest
Holdings, LLC's senior secured bank facility have also been placed
on Rating Watch Negative.
Approximately $2.8 billion of debt as of Dec. 31, 2006 is affected
by Fitch's actions. Insight Midwest Holdings, LLC is a wholly
owned subsidiary of Insight Midwest, LP. ICCI owns a 50% interest
in Insight Midwest, LP while an indirect subsidiary of Comcast
Corporation owns the remaining 50% interest.
Fitch's action follows ICCI's report that it has agreed with a
subsidiary of Comcast Corporation to amend the partnership
agreement of Insight Midwest, LP that effectively divides the
assets and liabilities of the partnership and dissolves the
entity.
In accordance with the amendment ICCI will own cable systems
serving approximately 639,000 highly clustered basic subscribers
including systems located in Louisville and Lexington, Kentucky.
Additionally, ICCI will assume approximately $1.3 billion of the
former partnership's outstanding debt.
Following the close of the transaction, which is expected to close
by Dec. 31, 2007, ICCI will emerge as a much smaller cable MSO
lacking the size and scale that Fitch believes is necessary to
sustain longer term revenue, margin and free cash flow growth.
Additionally, as a stand alone entity, Fitch expects that
Insight's operating margins will be pressured somewhat as the
company will no longer benefit from the access to Comcast's
programming rates, equipment pricing and other cost synergies
previously afforded to the company through its partnership with
Comcast Corporation. Moreover, Insight will incur additional
operating expenses related to corporate expense and overhead as a
stand alone company.
As of year-end 2006 ICCI's consolidated leverage was 5.7x and
during 2006 generated negative free cash flow of approximately
$22.4 million. Following the completion of the transaction, Fitch
expects that Insight's leverage will approach 6.75x and that the
company will struggle to generate positive free cash flow.
In resolving the Negative Rating Watch, Fitch's review will focus
on ICCI's capital structure and prospects to improve its credit
profile following the completion of the transaction.
Additionally, Fitch will consider ICCI's prospects for sustainable
revenue, ARPU, operating margin and free cash flow growth.
Overall, Fitch's ratings for Insight reflect the operating
advantages and cost synergies derived from the company's
technologically upgraded network and its tightly clustered cable
systems, which primarily operate in the states of Kentucky,
Indiana, Illinois, and Ohio. Fitch's ratings are also indicative
of Insight's high leverage relative to its cable peer group, and
the increasing business risk attributable to Insight's credit
profile stemming from the persistent competitive threat from DBS
operators and the increasing likelihood that incumbent telephone
companies will enter the video business further elevating
competitive pressures.
Fitch has placed these ratings on Rating Watch Negative:
Insight Communications Company, Inc.
-- Issuer Default Rating 'B+'; and
-- Senior unsecured notes 'CCC+/RR6'.
Insight Midwest, LP
-- Issuer Default Rating 'B+'; and
-- Senior unsecured notes 'B+/RR4'.
Insight Midwest Holdings, LLC
-- Issuer Default Rating 'B+'; and
-- Senior Secured Bank 'BB+/RR1'.
LB-UBS: Fitch Holds Low-B Ratings on Five Certificate Classes
-------------------------------------------------------------
Fitch Ratings upgrades LB-UBS commercial mortgage pass-through
certificates, series 2003-C1:
-- $20.6 million class D to 'AAA' from 'AA+';
-- $18.9 million class E to 'AA+' from 'AA';
-- $17.1 million class F to 'AA-' from 'A+';
-- $18.9 million class G to 'A+' from 'A';
-- $18.9 million class H to 'A' from 'A-';
-- $12 million class J to 'A-' from 'BBB+'; and
-- $10.3 million class K to 'BBB+' from 'BBB'.
In addition, Fitch affirms these classes:
-- $49.1 million class A-1 at 'AAA';
-- $180 million class A-2 at 'AAA';
-- $105 million class A-3 at 'AAA';
-- $537.5 million class A-4 at 'AAA';
-- $197.3 million class A-1b at 'AAA';
-- Interest-only (I/O) classes X-CL and X-CP at 'AAA';
-- $25.7 million class B at 'AAA';
-- $25.7 million class C at 'AAA';
-- $18.9 million class L at 'BBB-';
-- $6.9 million class M at 'BB+';
-- $6.9 million class N at 'BB-';
-- $10.3 million class P at 'B+';
-- $5.1 million class Q at 'B'; and
-- $5.1 million class S at 'B-'.
Fitch does not rate the $13.7 million class T.
The upgrades are due to defeasance and scheduled amortization
since the last rating action. A total of eight loans have
defeased since issuance, including three credit assessed loans.
As of the March 2007 distribution date, the pool's aggregate
principal balance has decreased 4.9% to $1.3 billion from
$1.37 billion at issuance. There have been no losses to date.
There is one specially serviced loan, secured by a 53,347 square
foot (sq. ft.) office building located in Oakland, California.
The loan, which is 90 days delinquent, was transferred to the
special servicer in May of 2006. A receiver has been appointed,
and the special servicer is pursuing foreclosure. Losses are
expected; however, they are anticipated to be fully absorbed by
the non-rated class T.
At issuance, there were five credit assessed loans. Three of the
five have been fully defeased - Pennmark (8.1%), The Candler Tower
(6.2%), and Brandywine Towne Center (2.3%). There are two
non-defeased credit assessed loans remaining in the
transaction - Stonebriar Center (13.1%) and Westmoreland Mall
(5.9%). Based on the stable performance of the two remaining
credit assessed loans, Fitch maintains investment grade credit
assessments for the loans. Occupancy as of September 2006 at
Stonebriar Center was 99%. Year end 2006 occupancy at
Westmoreland Mall was 93%.
LEVEL 3: Completes Purchase of Divested AT&T Assets
---------------------------------------------------
Level 3 Communications, Inc.'s operating subsidiary has purchased
certain assets from AT&T Corporation that were ordered divested as
a result of the merger between AT&T and SBC Communications Inc.
The acquired assets consist of indefeasible rights of use for dark
fiber connections to over 200 buildings and more than 1,600 metro
fiber route miles in six of the 11 markets where AT&T was
required to divest certain assets. Level 3 will acquire the
divested fiber assets in Detroit, Hartford, Kansas City,
Milwaukee, San Francisco and St. Louis.
Under the terms of the agreement, Level 3 retains intermediate
splice rights, which will enable it to add new buildings to the
acquired assets.
"With over 25,000 metro fiber route miles and more than 6,500 on-
net buildings, Level 3 is continuing to expand the reach of our
network in metropolitan areas," Kevin O'Hara, president and chief
operating officer of Level 3, said. "The addition of these assets
-- the majority of which are new to the Level 3 network -- builds
on our expansive metro footprint and supports our enterprise
business strategy by offering additional network access points and
enhancing revenue opportunities in key markets."
About Level 3
Headquartered in Broomfield, Colorado, Level 3 Communications Inc.
(Nasdaq: LVLT) -- http://www.level3.com/-- is an international
communications company. The company provides a comprehensive
suite of services over its broadband fiber optic network including
Internet Protocol (IP) services, broadband transport and
infrastructure services, colocation services, voice services and
voice over IP services.
* * *
As reported in the Troubled Company Reporter on Feb. 23, 2007,
Standard & Poor's Rating Services raised its ratings on
Broomfield, Colorado-based Level 3 Communications Inc. and wholly
owned subsidiary, Level 3 Financing Inc., including the corporate
credit rating, which was raised to 'B-' from 'CCC+'. The outlook
is stable.
As reported in the Troubled Company Reporter on Feb. 14, 2007,
Moody's Investors Service assigned a B1 rating to Level 3
Financing Inc.'s new $1 billion term loan and a B3 rating to the
$1 billion fixed and floating rate notes at Financing.
Moody's affirmed Level 3 Communications, Inc.'s corporate family
rating at Caa1 with a stable outlook, as the pro-forma leverage is
expected to remain in the 8.5x range, as Moody's expects the
company to use the additional liquidity to refinance higher coupon
debt.
MEDICAL CENTER: Moody's Puts Ba3 Bonds' Rating on Watchlist
-----------------------------------------------------------
Moody's Investors Service has placed North Oakland Medical
Center's Ba3 long-term rating on Watchlist for possible downgrade.
This rating action affects approximately $39 million of Series
1993 bonds outstanding.
The Watchlist action follows the receipt of NOMC's fiscal year
2006 unaudited financial statements and utilization data.
These data show:
* declining patient volumes, as inpatient admission and
surgical volumes declined 8.2% and 27.2%, respectively, in FY
2006;
* a multiple-year trend of declining operating performance and
significant operating losses in unaudited FY 2006 (-8.2%
operating loss margin, -1.0% operating cash flow margin);
* weakened liquidity ratios, as cash on hand declined to a thin
44 days at unaudited fiscal year end (FYE) 2006 from 51 days
at audited FYE 2005 and cash-to-debt decreased to a weak 26%
from 31% over the period; and senior financial management
turnover.
The Watchlist action reflects the degree of uncertainty
surrounding NOMC's operating performance and modest liquidity.
Moody's expects to speak with management in depth shortly and
review the rating within the next 90 days.
METROLOGIC INSTRUMENTS: S&P Holds Rating and Revises Outlook
------------------------------------------------------------
Standard & Poor's Rating Services revised its outlook on
Blackwood, New Jersey-based Metrologic Instruments Inc. to
negative from stable, and affirmed the 'B+' corporate credit
rating.
The revision in the outlook reflects increased leverage, to the
mid-5x area from the mid-4x area, resulting from $45 million in
additional debt to buy out shares held by the company's founder,
as well as a redemption of preferred equity held by remaining
shareholders.
Standard & Poor's also assigned a 'B+' rating and a recovery
rating of '2' to the company's proposed first-lien facility, which
amounts to $205 million. The recovery rating on the first lien
indicates expectations for substantial recovery of principal in
the event of a payment default. The refinanced $75 million,
second-lien term loan is rated 'B-', with a recovery rating of
'4', reflecting the rating agency's expectation of marginal
(25%-50%) recovery of principal by creditors in the event of a
payment default or bankruptcy.
"Our ratings on Metrologic Instruments reflect the company's arrow
business profile geared toward a competitive niche market, its
second-tier status, the uncertainty because of ongoing litigation,
and high leverage," said Standard & Poor's credit analyst
Stephanie Crane Mergenthaler.
These factors partly are offset by barriers to entry found in its
patent portfolio and solid profitability.
Metrologic designs, manufactures, and markets bar code scanning
and high-speed automated data capture equipment that use laser,
holographic, and vision-based technologies. The industry is very
competitive, and Metrologic, with market share in the low double
digits, is well behind the top two in the bar code scanning
industry, Symbol Technologies and Datalogic.
ML-CFC: Moody's Rates $11 Million Class P Certificates at B3
------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to
securities issued by ML-CFC Commercial Mortgage Trust 2007-5
Commercial Mortgage Pass-Through Certificates, Series 2007-5.
The provisional ratings issued on Feb. 26, 2007, have been
replaced with these definitive ratings:
-- Class A-1, $87,368,000, rated Aaa
-- Class A-2, $63,315,000, rated Aaa
-- Class A-3, $153,428,000, rated Aaa
-- Class A-SB, $187,053,000, rated Aaa
-- Class A-4, $1,090,152,000, rated Aaa
-- Class A-1A, $1,205,597,000, rated Aaa
-- Class AM, $341,702,000, rated Aaa
-- Class AJ, $211,490,000, rated Aaa
-- Class B, $77,297,000, rated Aa2
-- Class C, $33,128,000, rated Aa3
-- Class D, $77,298,000, rated A2
-- Class X, $4,417,019,866*, rated Aaa
-- Class A-2FL, $60,000,000, rated Aaa
-- Class A-4FL, $245,000,000, rated Aaa
-- Class AM-FL, $100,000,000, rated Aaa
-- Class AJ-FL, $175,000,000, rated Aaa
-- Class E, $38,649,000, rated A3
-- Class F, $55,213,000, rated Baa1
-- Class G, $49,691,000, rated Baa2
-- Class H, $49,692,000, rated Baa3
-- Class M, $11,042,000, rated B1
-- Class P, $11,043,000, rated B3
* Approximate notional amount
Withdrawn:
-- Class A-3FL
MORGAN STANLEY: Fitch Holds Low-B Ratings on 5 Certificate Classes
------------------------------------------------------------------
Fitch Ratings upgrades Morgan Stanley Dean Witter Capital I Trust,
commercial mortgage pass-through certificates, series 2002-TOP 7:
-- $24.2 million class B to 'AAA' from 'AA+';
-- $29.1 million class C to 'AA' from 'A+';
-- $7.3 million class D to 'AA-' from 'A';
-- $7.3 million class E to 'A+' from 'A-'; and
-- $12.1 million class F to 'A-' from 'BBB+'.
Additionally, Fitch affirms these classes:
-- $118.2 million class A-1 at 'AAA';
-- $572.3 million class A-2 at 'AAA';
-- Interest-only class X-1 at 'AAA';
-- Interest-only class X-2 at 'AAA';
-- $7.3 million class G at 'BBB';
-- $10.9 million class H at 'BBB-';
-- $8.5 million class J at 'BB+';
-- $7.3 million class K at 'BB-';
-- $4.9 million class L at 'B+';
-- $4.9 million class M at 'B'; and
-- $2.4 million class N at 'B-'.
Fitch does not rate the $6.4 million class O.
The upgrades are due to defeasance, stable pool performance, and
scheduled amortization since the last rating action. As of the
March 2007 distribution date, the pool's aggregate principal
certificate balance has decreased by 15.1% to $823 million
compared to $969.4 million at issuance. Seventeen loans (10.8%)
have defeased since issuance.
There is currently one asset (0.4%) in special servicing. The
loan is secured by a 130-unit multifamily rental apartment
community in Riverdale, Georgia. The loan, which is current, was
transferred to the special servicer in September 2006 due to a
decline in its net cash flow. The borrower has been able to
re-stabilize the property, and the special servicer, Capmark,
expects to transfer the loan back to the master servicer in April
2007.
Two of the six credit-assessed loans have been paid in full: the
Kahala Mall (2.8% of the original pool) and Grand Reserve at
Kirkman Park (2.0% of the original pool). There are four credit
assessed loans remaining in the pool: Woodfield Mall (7.5%),
Renaissance Terrace Apartments (2.3%), Fairways at Bey Lea (2.1%),
and Route 9 Plaza (2.0%). All four of the remaining credit
assessed loans maintain investment grade assessments due to stable
performance.
MORGAN STANLEY: Fitch Lifts Rating on Class M Certificates to BB-
-----------------------------------------------------------------
Fitch Ratings upgrades 11 classes of Morgan Stanley Capital,
series 2004-TOP13:
-- $31.8 million class B to 'AAA' from 'AA';
-- $12.1 million class C to 'AA+' from 'AA-';
-- $24.2 million class D to 'AA-' from 'A';
-- $12.1 million class E to 'A+' from 'A-';
-- $9.1 million class F to 'A' from 'BBB+';
-- $10.6 million class G to 'BBB+' from 'BBB';
-- $9.1 million class H to 'BBB' from 'BBB-';
-- $9.1 million class J to 'BBB-' from 'BB+';
-- $3 million class K to 'BB+' from 'BB';
-- $3 million class L to 'BB' from 'BB-'; and
-- $3 million class M to 'BB-' from 'B+'.
In addition, Fitch affirms these classes:
-- $195.9 million class A-2 at 'AAA';
-- $127 million class A-3 at 'AAA';
-- $589.2 million class A-4 at 'AAA';
-- Interest only class X-1 at 'AAA';
-- Interest only class X-2 at 'AAA';
-- $4.5 million class N at 'B'; and
-- $3 million class O at 'B-'.
Fitch does not rate the $12.1 million class P. Class A-1 has been
paid in full.
The rating upgrades reflect the increased credit enhancement
levels as a result of paydown and defeasance since Fitch's last
rating action. As of the March 2007 remittance report, the pool
has paid down 12.6% to $1.06 billion from $1.21 billion at
issuance. To date, five loans have defeased. There are currently
no delinquent or specially serviced loans.
Of the seven loans that were credit assessed by Fitch at issuance,
five (19.4%) remain in the pool: GIC Office Portfolio (8.5%),
Lakeland Square Mall (5.4%), Gallup Headquarters (2.8%), Hudson
Mall (1.5%) and Renaissance Manor (1.1%). The Great Hall
Portfolio (3.1%) and Carlisle Commons (1.8%) loans have been paid
in full. Fitch reviewed the most recent operating data available
from the master servicer for the five remaining loans. Based on
their stable performance the loans maintain their investment grade
credit assessments.
The GIC Office Portfolio is collateralized by 6.4 million square
feet (sq. ft.) in 12 high quality office properties located
throughout the U.S. Major tenants include AT&T, William Blair, The
Carson Group, JP Morgan Chase and the FBI. Occupancy as of
September 2006 has increased to 97.1% from 91% at issuance.
Lakeland Square Mall is collateralized by 392,706 sq. ft. in an
898,631 sq. ft. regional mall located in Lakeland, Florida.
Anchor tenants include Dillard's, Sears, JC Penney, Burdines and
Belk. Occupancy as of August 2006 has increased to 95% from 93% at
issuance.
Gallup Headquarters is a 295,606sf suburban office building in
Omaha, Nebraska. Occupancy as of December 2006 remains stable at
100%.
MRO ACQUISITION: Moody's Reviews B1 Rating and May Downgrade
------------------------------------------------------------
Dubai Aerospace Enterprises reported on April 2, 2007, that it
entered into an agreement and plan of merger to purchase
Piedmont/Hawthorne Holdings, Inc. and Standard Aero Holdings Inc.
from The Carlyle Group in a cash transaction for total
consideration of approximately $1.8 billion.
Moody's Investors Service is reviewing the ratings of MRO
Acquisitions, LLC, the debt-issuing subsidiary of Piedmont
Hawthorn Holdings, Inc. for possible downgrade in response to this
report. MRO Acquisitions has a Corporate Family Rating of B1.
Moody's review is focusing on the impact that the proposed
transaction will have on the combined entity's future capital
structure, financial strategy and credit metrics. The review is
also assessing the degree to which the company's operating
strategy will be able to sustain earnings, cash flow generation
and liquidity under the new leveraged capital structure.
Moody's notes that the company's existing bank credit facility
contains change of control provisions whereby all outstanding debt
under that agreement must be redeemed upon conclusion of the sale
of the company. If such debt is redeemed in its entirety under
change of control provisions Moody's will withdraw all ratings of
the company.
On review for possible downgrade:
* MRO Acquisition, LLC
-- Probability of Default Rating, Placed on Review for
Possible Downgrade, currently B2
-- Corporate Family Rating, Placed on Review for Possible
Downgrade, currently B1
-- Senior Secured Bank Credit Facility, Placed on Review for
Possible Downgrade, currently B1
outlook actions:
* MRO Acquisition, LLC
-- Outlook, Changed To Rating Under Review From Stable
Headquartered in Tempe, Arizona, Piedmont/Hawthorne Holdings Inc.,
under its trade name Landmark Aviation, is a leading provider of
Maintenance, Repair and Overhaul, Airport Fixed Base Operations,
and Aircraft Completion & Modification services to the general
aviation industry with facilities located throughout North
America.
NEW CENTURY: Organizational Meeting Scheduled Today
---------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold
an organizational meeting to appoint an official committee of
unsecured creditors in New Century Financial Corporation and its
debtor-affiliates' chapter 11 cases today at 1:00 p.m.,
April 9, 2007, at the DoubleTree Hotel, 700 King Street Salon C,
in Wilmington, Delaware.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases. The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code. However, a representative of the Debtor
will attend and provide background information regarding the
cases.
Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.
Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee. In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and
financial affairs. Importantly, official committees serve as
fiduciaries to the general population of creditors they
represent. Those committees will also attempt to negotiate the
terms of a consensual Chapter 11 plan -- almost always subject to
the terms of strict confidentiality agreements with the Debtors
and other core parties-in-interest. If negotiations break down,
the Committee may ask the Bankruptcy Court to replace management
with an independent trustee. If the Committee concludes that the
reorganization of the Debtors is impossible, the Committee will
urge the Bankruptcy Court to convert the Chapter 11 cases to a
liquidation proceeding.
About New Century
Founded in 1995 and headquartered in Irvine, California, New
Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/
-- is a real estate investment trust, providing mortgage products
to borrowers nationwide through its operating subsidiaries, New
Century Mortgage Corporation and Home123 Corporation. The company
offers a broad range of mortgage products designed to meet the
needs of all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-
10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. When the
Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.
NEW CENTURY: Court Approves Access of $50 Million DIP Financing
---------------------------------------------------------------
New Century Financial Corporation has obtained approval from the
U.S. Bankruptcy Court for the District of Delaware on its motion,
on an interim basis, to access up to $50 million of the
$150 million debtor-in-possession financing.
The CIT Group and Greenwich Capital Financial Products, Inc.
arranged the financing for the company.
The Court also approved New Century's other first day motions that
will facilitate the company's operations as it pursues the sale of
its assets and operations through the chapter 11 process. Among
the relief granted by the Court is a motion permitting New Century
to continue its customer programs uninterrupted, including, but
not limited to, a customer restitution plan and the funding of
manufactured home loans under a program regulated by the Federal
Housing Authority. The Court also approved motions that will
permit New Century to continue its employee benefits programs and
insurance policies.
"The company is pleased with the prompt action of the Bankruptcy
Court in approving the company's first day motions, which will
help New Century provide for its Associates and continue operating
without interruption," Brad A. Morrice, president and chief
executive officer of New Century said. "Over the next several
weeks, the company will continue to work in selling the company's
assets and operations through an orderly process."
The Bankruptcy Court has also scheduled a hearing on April 10 to
consider the bidding procedures for the company's agreement to
sell its servicing assets and servicing platform to Carrington
Capital Management, LLC and its affiliate, and its agreement to
sell to Greenwich Capital Financial Products Inc. certain loans
originated by the company, well as residual interests in certain
securitization trusts owned by the company, for an aggregate price
of $50 million. Both transactions are subject to court approval
and will be subject to higher and better offers pursuant to
procedures to be established by the Bankruptcy Court.
About New Century
Founded in 1995 and headquartered in Irvine, California, New
Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/
-- is a real estate investment trust, providing mortgage products
to borrowers nationwide through its operating subsidiaries, New
Century Mortgage Corporation and Home123 Corporation. The company
offers a broad range of mortgage products designed to meet the
needs of all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-
10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. When the
Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.
NEW YORK RACING: Gets OK to Hire Consultant for Integrity Review
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave The New York Racing Association Inc. authority to spend up to
$500,000 on an outside consultant to perform an "integrity review"
as part of its bid to retain the operating license for New York's
three thoroughbred racetracks, Bill Rochelle of Bloomberg News
reports.
Last month, the Court permitted the Debtor to get supplemental
postpetition financing from the state of New York.
In November 2006, the Debtor obtained from the State an $8,000,000
postpetition loan assumed to provide the Debtor with funding until
Dec. 31, 2006.
Despite the Debtor's ability to manage its finances and operate
its businesses, the Debtor has demonstrated that it will be unable
in the near future to meet its payroll obligations and operating
expenses and to obtain the goods and services necessary to carry
on its business.
Additionally, the Debtor has been unable to obtain supplemental
funds in the form of unsecured credit.
About NYRA
Based in Jamaica, New York, The New York Racing Association
Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in
Aqueduct, Belmont Park and Saratoga. The company filed
a chapter 11 petition on November 2, 2006 (Bankr. S.D.N.Y.
Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal &
Manges LLP represents the Debtor in its restructuring efforts.
Edward M. Fox, Esq., Eric T. Moser, Esq., Jeffrey N. Rich, Esq.,
at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the
Official Committee of Unsecured Creditors. When the Debtor sought
protection from its creditors, it listed more than $100 million in
total assets and total debts. The Debtor's exclusive period to
file a plan expires on July 16, 2007.
OAK HILL: S&P Holds BB- Rating on Class D-1 & D-2 Notes
-------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
A-2, B-1, and B-2 notes issued by Oak Hill Credit Partners I Ltd.
and removed them from CreditWatch, where they were placed with
positive implications on March 28, 2007.
At the same time, the ratings on the class A-1a, A-1b, C, D-1, and
D-2 notes were affirmed due to the level of overcollateralization
available. Oak Hill Credit Partners I Ltd., an arbitrage
high-yield CLO transaction, is managed by Oak Hill Advisors L.P.
The raised ratings reflect factors that have positively affected
the credit enhancement available to support the notes since the
transaction closed in October 2001. Since that time, the
transaction has paid down approximately $163.474 million to the
class A-1a and A-1b notes. This includes a paydown of
approximately $74.477 million on the most recent payment date,
March 12, 2007.
Ratings Raised and Removed
from Creditwatch Positive
Oak Hill Credit Partners I Ltd.
Rating
------
Class To From Balance
----- -- ---- --------
A-2 AAA AA-/Watch Pos $102,500,000
B-1 AA- A-/Watch Pos $15,000,000
B-2 AA- A-/Watch Pos $13,000,000
Ratings Affirmed
Oak Hill Credit Partners I Ltd.
Class Rating Balance
----- ------ -------
A-1a AAA $189,922,000
A-1b AAA $28,602,000
C BBB $30,000,000
D-1 BB- $20,500,000
D-2 BB- $2,500,000
OPTION ONE: S&P Cuts Ratings on 2 Cert. Classes to BB from BBB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the M-6
classes from Option One Mortgage Loan Trust's series 2003-4 and
2003-5 to 'BB' from 'BBB-' and placed them on CreditWatch with
negative implications.
At the same time, the ratings on the remaining classes from the
same transactions were affirmed.
The downgrades and CreditWatch placements are based on performance
that has allowed monthly losses to consistently outpace monthly
excess interest, causing overcollateralization to fall below its
target of $6.2 million to $4.3 million for series 2003-4 and to
$2.3 million from a target of $3.7 million for series 2003-5.
In addition, loss projections indicate that this trend could
continue and further erode credit support to these classes.
As of the March 2007 distribution date, cumulative losses for
series 2003-4 were 0.63% of the original pool balance. Total
delinquencies were 18.40% of the current pool balance, and severe
delinquencieswere 10.22%. Cumulative losses for series 2003-5
were 0.84% of the original pool balance. Total delinquencies were
23.26% of the current pool balance, and severe delinquencies were
14.26%.
Standard & Poor's will closely monitor the performance of these
transactions. If monthly realized losses decline to a point at
which they no longer outpace monthly excess interest, and the
level of O/C has not been further eroded, Standard & Poor's will
affirm the ratings on these classes and remove them from
CreditWatch.
Conversely, if losses continue to outpace excess interest
and the level of O/C continues to decline, Standard & Poor's will
take further negative rating actions on these classes.
The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings on the securities.
Credit support for these transactions is provided by a combination
of excess spread, O/C, and subordination.
The collateral consists of subprime fixed- and adjustable-rate
mortgage loans on one- to four-family residential properties.
Ratings Lowered And Placed
On Creditwatch Negative
Option One Mortgage Loan Trust
Rating
------
Series Class To From
------ ----- -- ----
2003-4 M-6 BB/Watch Neg BBB-
2003-5 M-6 BB/Watch Neg BBB-
Ratings Affirmed
Option One Mortgage Loan Trust
Series Class Rating
------ ----- ------
2003-4 A-2,A-2 AAA
2003-4 M-1 AA
2003-4 M-2 A
2003-4 M-3 A-
2003-4 M-4 BBB+
2003-4 M-5A, M-5F BBB
2003-5 A-1,A-2,A-3 AAA
2003-5 M-1 AA+
2003-5 M-2 AA
2003-5 M-3 AA-
2003-5 M-4 A
2003-5 M-5 BBB+
PACIFIC LUMBER: Scotia Gives Statement on Single Asset Plea Denial
------------------------------------------------------------------
Pacific Lumber Company's subsidiary, Scotia Pacific Company is
pleased that Judge Richard Schmidt of the United States Bankruptcy
Court for the Southern District of Texas denied the motion of
Scopac's noteholders to declare Scopac a single asset real estate
entity and grant it relief from the stay provisions under the
Bankruptcy Code.
In so ruling, the Court held that Scopac is not a passive single
asset real estate company. The Court instead found that, the
active entrepreneurial labor of Scopac's employees generate
Scopac's revenue.
The Court recognized that Scopac is a dynamic business whose
operations require a variety of management and science
competencies. The Court also held that Scopac does not own
property constituting a "Single Property or Project" because
Scopac's timber operations are spread out across a diverse
landscape.
Additionally, its timber rights are not part of the land and are
not real estate under either the Bankruptcy Code or California
law.
Scopac looks forward to continuing to work toward the goal of
confirming a plan of reorganization and emerging from Chapter 11.
About Pacific Lumber
Headquartered in Oakland, California, The Pacific Lumber Company
-- http://www.palco.com/-- and its subsidiaries operate in
several principal areas of the forest products industry,
including the growing and harvesting of redwood and Douglas-fir
timber, the milling of logs into lumber and the manufacture of
lumber into a variety of finished products.
Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.
Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transactions pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.
Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq.,
William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard
Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation
is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq.,
Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at
Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-
counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at
Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead
counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq.,
at Porter & Hedges LLP, is Scotia Pacific's co-counsel.
When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335. The Debtors' exclusive period to file a chapter
11 plan expires on May 18, 2007.
PANHANDLE REGIONAL: Moody's Holds Junk Ratings on Bonds
-------------------------------------------------------
Moody's Investors Service has affirmed these ratings on the
Panhandle, Texas Regional Housing Finance Corporation Multi-Family
Housing Revenue Bonds based on continued payment defaults:
* the Caa2 rating on Senior Series 2000A,
* the Ca rating on Subordinate Series 2000C, and
* Ca rating on Junior Subordinate Series 2000D.
The Senior Series 2000 B bonds have matured and the Subordinate E
Series bonds are not rated.
On Feb. 22, 2007, the trustee for the bonds issued a notice of
default stating that the borrower, Amarillo Affordable Housing,
LLC, would fail to deposit revenue in an amount sufficient to make
full payments on the Senior Series bonds as well as the Series C
and D bonds on the March 1, 2007, interest payment date.
This notice follows a notice issued by the trustee on
Oct. 25, 2006, indicating that a payment default occurred on the
series C and D Bonds on the Sept. 1, 2006 interest payment date.
According to the Feb. 22, 2007, notice, the trustee did not
intend, on the March 1, 2007, interest payment date, to make up
any shortfalls in the Bond Funds by transferring amounts from the
applicable Debt Service Reserve Funds. The amount due on the
Senior bonds on March 1, 2007, was $905,450, while the balance in
the Debt Service Fund was $295,709, resulting in a shortfall of
$609,740. The Senior Debt Service Reserve balance was $970,663.
However, the trustee intends to reserve these resources and apply
them in the pursuit of remedial actions to conserve the projects.
The debt service reserves for the subordinate and junior
subordinate bonds remain under funded.
Outlook:
The outlook for the bonds is negative based on Moody's expectation
that payment defaults will continue.
PORTRAIT CORP: Creditors Balk at Planned Executive Bonus Payments
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Portrait Corp. of
America Inc.'s Chapter 11 case opposed the Debtor's proposal to
pay bonuses to its top executives and managers arguing that the
program "could completely wipe out recoveries to unsecured
creditors", Bill Rochelle of Bloomberg News reports.
According to the report, the Committee calculated the bonuses
would total $5.7 million if the business were sold for
$100 million in cash. The Committee said it has found a potential
purchaser who is expected to pay off secured debt.
Portrait agreed to move, to April 12, the hearing on its motion
for approval of the bonus program.
Treatment of Claims Under Reorganization Plan
Last month, the U.S. Bankruptcy Court for the Southern District of
New York in White Plains approved the disclosure statement
explaining Portrait and its debtor-affiliates' joint plan of
reorganization.
Under that Plan, holders of Allowed Administrative Expense Claims
will be paid in full and in cash.
On the Plan's effective date, the DIP obligations will be deemed
allowed and paid indefeasibly in full in accordance with the terms
of the DIP Agreement and DIP Order. Upon full payment of all DIP
Obligations, all liens and security interests granted to secure
those obligations will be terminated. Provided, however, that the
particular provisions of the DIP Agreement that are specified to
survive will survive. Existing letters of credit issued pursuant
to the DIP Agreement will be cancelled and replaced with new
letters of credit to be issued pursuant to the Exit Facility.
Holders of Allowed Priority Tax Claim will receive cash on the
later of the plan effective date or the date the claim became
allowed, or equal annual cash payments together with interest to
be determined by the Bankruptcy Court.
Holders of Class A Allowed Priority Non-Tax Claims will also be
paid in full in cash.
At the sole option of the Debtors, holders of Class B Allowed
Other Secured Claims will:
(a) receive payment in full in cash plus post-commencement date
interest;
(b) have a reinstated claim;
(c) receive the collateral securing their claim; or
(d) receive a treatment that renders the claim unimpaired
pursuant to Section 1124 of the Bankruptcy Code.
Holders of Class C Allowed Second Lien Notes Claims will receive,
in full satisfaction of their claim, their pro rata share of 100%
of Reorganized Portrait Corp of America common stock.
Holders of Class D Allowed Senior Notes and Other Unsecured Claims
will receive their pro rata distribution of new warrants.
Holders of Class E Allowed Convenience Class Claims will receive
1% of their allowed claim as payment.
Holders of Class F Allowed Goldman Note Claims, Class G Allowed
Old Preferred Equity Interests, Class H Allowed Old Common Equity
Interests, and Class I Allowed Old Common Subsidiary Equity
Interests will not receive anything under the plan.
Goldman Note Claims refer to:
-- the 13.75% Senior Subordinated Notes due 2010, issued to
GS Mezzanine Partners II L.P. and GS Mezzanine Partners II
Offshore L.P. These notes were guaranteed by Portrait
Corporation of America Inc., American Studios Inc., PCA
National LLC, PCA National of Texas LP, PCA Photo
Corporation of Canada Inc., Photo Corporation of America
Inc., and PCA Finance Corp; and
-- the 16.5% Senior Subordinated Notes due 2010, issued to
GS Mezzanine Partners II L.P. and GS Mezzanine Partners II
Offshore L.P.
Wal-Mart Deal
In February 2007, the Court approved an agreement between Portrait
and Wal-Mart allowing Portrait to close operations on its 500
lowest performing studios.
Commenting on the major milestone, David Alexander, Portrait's
chairman and chief executive officer, said, "The closure of these
unprofitable studios and the subsequent workforce reductions are a
very difficult but necessary part of restoring the company to
financial success. While approximately 1,200 positions will be
eliminated across the company, many of these associates will be
offered opportunities in other studios or departments. After the
studio closures, PCA will continue to operate over 2,000 studios
in North America and Europe."
About Portrait Corporation of America Inc.
Portrait Corporation of America Inc. -- http://pcaintl.com/--
provides professional portrait photography products and services
in North America. The Company operates portrait studios within
Wal-Mart stores and Supercenters in the United States, Canada,
Mexico, Germany and the United Kingdom. The Company also operates
a modular traveling business providing portrait photography
services in additional retail locations and to church
congregations and other institutions.
Portrait Corporation and its debtor-affiliates filed for
Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case
No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft
LLP, represents the Debtors in their restructuring efforts.
Berenson & Company LLC serves as the Debtors' financial advisor
and investment banker. Kristopher M. Hansen, Esq., at Stroock &
Stroock & Lavan LLP represents the Official Committee of Unsecured
Creditors. Peter J. Solomon Company serves as financial advisor
for the Committee. At June 30, 2006, the Debtor had total assets
of $153,205,000 and liabilities of $372,124,000.
PRUDENTIAL COMMERCIAL: Fitch Lifts Rating on Class N Certs. to B
----------------------------------------------------------------
Fitch Ratings upgrades Prudential Commercial Mortgage Trust
commercial mortgage pass-through certificates, series 2003-PWR1,:
-- $36 million class C to 'AAA' from 'AA-';
-- $14.4 million class D to 'AA' from 'A+';
-- $9.6 million class E to 'AA-' from 'A';
-- $10.8 million class F to 'A' from 'A-';
-- $12 million class G to 'A-' from 'BBB+';
-- $16.8 million class H to 'BBB' from 'BBB-';
-- $7.2 million class J to 'BBB-' from 'BB+';
-- $4.8 million class K to 'BBB-' from 'BB+';
-- $7.2 million class L to 'BB' from 'BB-'.
-- $3.6 million class M to 'B+' from 'B'; and
-- $3.6 million class N to 'B' from 'B-'.
Fitch also affirms these classes:
-- $170.6 million class A-1 at 'AAA';
-- $518.2 million class A-2 at 'AAA';
-- Interest only class X-1 at 'AAA';
-- Interest only class X-2 at 'AAA'; and
-- $32.4 million class B at 'AAA'.
Fitch does not rate the $14.4 million class P certificates.
The upgrades reflect increased credit enhancement due to loan
payoffs, including the credit-assessed Inland Portfolio, scheduled
amortization, as well as the additional defeasance of ten loans
since Fitch's last rating action. As of the March 2007
distribution date, the pool's aggregate certificate balance has
decreased 10.3% to $861.7 million from $960 million at issuance.
In total, 11 loans (17.4%) have defeased since issuance, including
the credit-assessed The Furniture Plaza and Plaza Suites (4.8%).
Currently, there is one specially serviced loan (0.2%). The loan
is secured by a 9,780 square foot (sq. ft.) anchored retail center
in Newark, New Jersey and is current. The loan is scheduled to
return to the master servicer in the second quarter of 2007.
Fitch continues to monitor the performance of the seventh largest
loan (2.7%) in the pool, which is a full-service hotel located in
the French Quarter area of New Orleans, Louisiana. The hotel had
experienced damage due to Hurricane Katrina. All major repairs
have now been completed; all remaining repairs are scheduled to be
completed by the second half of 2007. Fitch does not anticipate a
loss on this loan.
Of the three loans that were credit-assessed by Fitch at issuance,
one non-defeased loan remains in the pool: 1290 Avenue of the
Americas (9.3%). Based on its stable performance, the loan
maintains an investment-grade credit assessment.
1290 Avenue of the Americas is secured by a 2 million sq. ft.
office building, located in the Midtown area of New York, New
York. Occupancy at the property has improved slightly, increasing
to 100% as of October 2006 from 98% at January 2006.
RAMP SERIES: S&P Junks Rating on Class B-2 Certificates
-------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
B-1 and B-2 from RAMP Series 2004-SL2 Trust. The rating on class
B-1 was lowered to 'BB+' from 'BBB+' and remains on CreditWatch
negative, and the rating on class B-2 was lowered to 'CCC' from
'B' and was removed from CreditWatch negative.
Both ratings were placed on CreditWatch on Feb. 9, 2007.
The lowered ratings and negative CreditWatch placement reflect
recent collateral performance that has eroded the available credit
support for this transaction. During the past three remittance
periods, RAMP Series 2004-SL2 Trust has experienced realized
losses of $146,273, which have reduced available credit support
for class B-2 to $101,228. As of the March 2007 remittance
period, available credit enhancement for class B-1 was $1,245,338,
compared with $5.634 million of loans categorized as severely
delinquent.
Standard & Poor's will continue to closely monitor the performance
of RAMP Series 2004-SL2 Trust. If delinquencies translate into
losses, Standard & Poor's will take further negative rating
actions. Conversely, if delinquency performance improves,
Standard & Poor's will affirm the rating on the class B-1
certificates and remove it from CreditWatch.
The rating on the class B-2 certificates was removed from
CreditWatch because it was lowered to 'CCC'. According to
Standard & Poor's surveillance practices, ratings lower than 'B-'
on classes of certificates or notes from RMBS transactions are not
eligible to be on CreditWatch negative.
The underlying collateral consists of fixed-rate seasoned mortgage
loans secured by first liens on one- to four-family residential
properties.
Rating Lowered And Remaining
On Creditwatch Negative
RAMP Series 2004-SL2 Trust
Mortgage-Backed Pass-Through Certificates
Rating
------
Class To From
----- -- --------------
B-1 BB+/Watch Neg BBB+/Watch Neg
Rating Lowered And Removed
From Creditwatch Negative
RAMP Series 2004-SL2 Trust
Mortgage-Backed Pass-Through Certificates
Rating
------
Class To From
----- -- -----------
B-2 CCC B/Watch Neg
REGATTA FUNDING: Moody's Rates $14 Mil. Class B-2L Notes at Ba2
---------------------------------------------------------------
Moody's Investors Service assigned ratings to notes issued by
Regatta Funding Ltd.:
* Aaa to the $7,675,000 Class X Floating Rate Notes Due June
2013;
* Aaa to the $331,000,000 Class A-1L Floating Rate Notes Due
June 2020;
* Aaa to the $60,000,000 Class A-1LV Floating Rate Revolving
Notes Due June 2020;
* Aa2 to the $31,000,000 Class A-2L Floating Rate Notes Due
June 2020;
* A2 to the $32,000,000 Class A-3L Floating Rate Notes Due June
2020;
* Baa2 to the $19,500,000 Class B-1L Floating Rate Notes Due
June 2020, and
* Ba2 to the $14,000,000 Class B-2L Floating Rate Notes Due
June 2020.
The Moody's ratings of the notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the notes' governing documents, and are based on the expected loss
posed to noteholders, relative to the promise of receiving the
present value of such payments. The ratings reflect the risks due
to the diminishment of cash flow from the underlying portfolio
consisting primarily of Senior Secured Loans due to defaults, the
transaction's legal structure and the characteristics of the
underlying assets.
Citigroup Alternative Investments LLC will manage the selection,
acquisition and disposition of collateral on behalf of the Issuer.
REMY INTERNATIONAL: Elects to Discontinue SEC Reporting
-------------------------------------------------------
Remy International, Inc. has notified the Securities and Exchange
Commission that it is not obligated to file reports under the
Exchange Act. As a result, Remy will no longer be required under
the Exchange Act to file periodic reports and certain forms with
the SEC, and will not file a Form 10-K for its fiscal year ended
Dec. 31, 2006. The company anticipates that its 2006 audited
financial statements will be completed no later than April 30,
2007, and will be available on the company's website.
"Discontinuing the SEC reporting will provide Remy with additional
time and resources to allocate to the two key objectives required
to strengthen our company -- successfully completing a
recapitalization effort and renegotiating certain key commercial
agreements," John Weber, President and Chief Executive Officer,
said. "Achieving these objectives will improve both our balance
sheet and margins, creating a platform for a sustainable and
profitable business."
Remy also is in discussions with representatives of a majority of
its outstanding Notes regarding a recapitalization plan to delever
the company's balance sheet. While there can be no assurance that
Remy will be successful in obtaining an agreement with its
noteholders with respect to a recapitalization plan, the company
believes its current liquidity position will permit it to continue
to finance its operations in the ordinary course of its business.
The company, with the support of its revolving credit facility
lenders, continues to have access to its revolving credit
facility. As of March 30, 2007, the company's liquidity position
was approximately $94 million, consisting of unrestricted cash and
cash equivalents of $19 million and permitted availability under
its revolving credit facility of approximately $75 million.
Additionally, $50 million of cash proceeds from the sale of assets
of the diesel engine remanufacturing business remains in an escrow
account for the benefit of the company's senior secured lenders.
About Remy International
Headquartered in Anderson, Indiana, Remy International, Inc.,
manufactures, remanufactures and distributes Delco Remy brand
heavy-duty systems and Remy brand starters and alternators, diesel
engines, locomotive products and hybrid power technology. The
Company also provides a worldwide components core-exchange service
for automobiles, light trucks, medium and heavy-duty trucks and
other heavy-duty, off-road and industrial applications. Remy was
formed in 1994 as a partial divestiture by General Motors
Corporation of the former Delco Remy Division, which traces its
roots to Remy Electric, founded in 1896.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Moody's Investors Service lowered Remy International, Inc.'s
Corporate Family Rating to Caa3 from Caa1; Probability of Default
Rating to Caa2 from B3; second priority secured notes to Caa3 from
B3; guaranteed senior unsecured notes to Caa3 from Caa1; and the
guaranteed senior subordinated notes to Ca from Caa2.
SAGITTARIUS CDO: Moody's Rates $15 Million Class X Notes at Ba2
---------------------------------------------------------------
Moody's Investors Service assigned ratings to notes issued by
Sagittarius CDO I Ltd.:
* Aaa to the $630,000,000 Super Senior Swap between MBIA
Insurance Corporation and Sagittarius CDO I Ltd.;
* Aaa to the $15,000,000 Class S Senior Secured Floating Rate
Notes Due 2012;
* Aaa to the $133,000,000 Class A Senior Secured Floating Rate
Notes Due 2051;
* Aa2 to the $82,500,000 Class B Senior Secured Floating Rate
Notes Due 2051;
* A2 to the $45,000,000 Class C Secured Floating Rate
Deferrable Interest Notes Due 2051;
* Baa1 to the $14,500,000 Class D-1 Secured Floating Rate
Deferrable Interest Notes Due 2051;
* Baa2 to the $27,500,000 Class D-2 Secured Floating Rate
Deferrable Interest Notes Due 2051;
* Baa3 to the $12,500,000 Class D-3 Secured Floating Rate
Deferrable Interest Notes Due 2051;
* Ba1 to the $10,000,000 Class E Secured Floating Rate
Deferrable Interest Notes Due 2051 and
* Ba2 to the $15,000,000 Class X Secured Floating Rate
Deferrable Interest Notes Due 2051.
The Moody's ratings of the notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the notes' governing documents, and are based on the expected loss
posed to noteholders, relative to the promise of receiving the
present value of such payments.
The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio due to defaults, the transaction's
legal structure and the characteristics of the underlying assets.
Structured Asset Investors, LLC will manage the selection,
acquisition and disposition of collateral on behalf of the Issuer.
SEQUOIA MORTGAGE: Fitch Puts Low-B Ratings on $4.4 Million Certs.
-----------------------------------------------------------------
Sequoia Mortgage Trust's mortgage pass-through certificates,
series 2007-1, are rated by Fitch Ratings:
-- $850,254,100 classes 1-A1, 1A2, 1-AR, 2-A1, 2-A2, 3-A1, 3-
A2, 4-A1, 4-A2, 5-A1, and 5-A2 'AAA';
-- $18,600,000 class B-1 'AA';
-- $6,200,000 class B-2 'A';
-- $3,985,000 class B-3 'BBB';
-- $2,215,000 class B-4 'BB';
-- $2,214,000 class B-5 'B'.
The class B-6 certificate is not rated by Fitch.
The 'AAA' rating on the senior certificates reflects the 4.00%
subordination provided by the 2.10% class B-1, 0.70% class B-2,
0.45% class B-3, 0.25% privately offered class B-4, 0.25%
privately offered class B-5 and 0.25% privately offered class B-6
certificates. The ratings on classes B-1, B-2, B-3, B-4 and B-5
certificates are based on their respective subordination.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. The ratings also
reflect the quality of the mortgage collateral, the capabilities
of Wells Fargo Bank, National Association, as master servicer, and
Fitch's confidence in the integrity of the legal and financial
structure of the transaction.
Approximately 38%, 30% and 25% of the mortgage loans were
originated by ABN AMRO Mortgage Group, Inc., Morgan Stanley Credit
Corporation, and GMAC Mortgage, LLC, respectively. The remainder
of the loans were originated by various mortgage lending
institutions. The mortgage loans generally provide for a fixed
interest rate during an initial period of three, five, seven or
10 years from their origination and adjust the interest rate
either every six months, based on the six-month LIBOR index, or
every 12 months, based either on the one-year CMT index or the
one-year LIBOR. Approximately 88.38% of the loans have
interest-only terms of either three, five, seven or 10 years, with
principal and interest payments beginning thereafter.
The Sequoia Mortgage Trust 2007-1 consists of five pools of
hybrid, adjustable rate, fully amortizing 30 and 40-year mortgage
loans secured by first liens on one- to four-family residential
properties, with an aggregate principal balance of $890,087,313,
and a weighted average principal balance of $600,194. The
weighted average original loan-to-value ratio is 68.89%, and a
weighted average FICO of 737. Second home and investor-occupied
properties comprise 8.86% and 1.20%, respectively. The states
with the largest concentration of mortgage loans are California
(33.62%), Florida (14.42%), Arizona (5.76%) and Illinois (5.47%).
All other states represent less than 5% of the aggregate pool
balance as of the cut-off date.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
Sequoia Residential Funding, Inc., a Delaware corporation and
indirect wholly owned subsidiary of Redwood Trust, Inc., will
assign all its interest in the mortgage loans to the trustee for
the benefit of certificate holders. For federal income tax
purposes, an election will be made to treat the trust as multiple
real estate mortgage investment conduits (REMICs). HSBC Bank USA,
National Association will act as trustee.
SERVICE CORP: S&P Rates Proposed $200 Mil. Senior Notes at BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Houston, Texas-based funeral home and cemetery operator Service
Corp. International's proposed new senior unsecured $200 million
notes due 2015 and $200 million notes due 2027.
The proceeds will be used to prepay existing debt scheduled to
mature in 2008 and 2009.
At the same time, Standard & Poor's affirmed its 'BB' corporate
credit rating and 'BB-' senior unsecured rating on Service Corp.,
and withdrew its 'B-1' short-term rating on the company due to
limited market interest. As of Dec. 31, 2006, Service Corp.'s
total debt outstanding was $2 billion.
Service Corp.'s senior unsecured notes are rated 'BB-', one notch
below the 'BB' corporate credit rating on the company, which is in
line with Standard & Poor's Ratings Services' criteria.
"Although these notes are considered senior, the company has a
sizable amount of priority debt (secured bank debt, capitalized
operating leases, and certain private notes)," explained Standard
& Poor's credit analyst David Peknay.
"Because of the magnitude of priority debt--totaling more than 15%
of total eligible assets--the unsecured notes are considered
materially disadvantaged."
SHAW GROUP: Delays Reporting on Second Quarter Financials
---------------------------------------------------------
The Shaw Group Inc. will delay reporting its second quarter
results pending the completion of an independent review of the
estimated costs of an ongoing U.S. gulf coast EPC petrochemical
project, which has an approximate contract value of $39 million.
The review is being performed to determine the amount of any error
in estimated costs and the reporting periods, which may be
affected.
Present information indicates that the project costs estimates
could include additional charges of $7 million to $12 million;
$4 million to $7 million, after taxes, and would result in a loss
on the project of approximately the same amount.
The company believes that the estimated costs increases, if
verified, may have been required to have been reported in the
first quarter of fiscal 2007. Therefore, until the review is
completed, financial statements for the first quarter of fiscal
2007 should not be relied upon.
Further, because the project began in April 2006, it is possible
that the review may reveal that reporting periods in the second
half of fiscal 2006 were affected, and in such event, the company
will evaluate any impact to prior financial statements at that
time.
Shaw also has determined that the accounting work for the expected
restatement and the review of the company's second quarter
financial statements would be more efficiently performed by Shaw's
new auditors, KPMG LLP. The company's previous auditors, Ernst &
Young LLP (E&Y), and the company had previously indicated that E&Y
would complete their engagement as the company's auditors
following the completion of the review of Shaw's second quarter
results. Effective immediately, KMPG has begun its work as Shaw's
auditors and KPMG will be responsible for the review of financial
results for second quarter, a first quarter restatement, if
required, and Shaw's fiscal 2007 financial statements. There were
no reportable disagreements with Ernst & Young on any accounting
principles or practices, financial statement disclosure or
auditing scope or procedures.
Shaw expects the delay in filing of its second quarter Form 10-Q
to be 45 to 90 days from its normal filing requirement date of
April 9, 2007. In the event reporting periods in the second half
of fiscal 2006 require restatement, the delay may be longer.
Covenant Waiver Requirement
The company also stated that a waiver of certain covenants of its
Bank Credit Agreement will be required in connection with the
delay in the filing of its second quarter financial statements.
The company expects to receive the necessary waiver.
The Shaw Group Inc.
Based in Baton Rouge, Louisiana, The Shaw Group Inc. (NYSE: SGR)
-- http://www.shawgrp.com/-- provides services to the
environmental, infrastructure and homeland security markets,
including consulting, engineering, construction, remediation and
facilities management services to governmental and commercial
customers. It is also a vertically integrated provider of
engineering, procurement, pipe fabrication, construction and
maintenance services to the power and process industries. The
company segregates its business activities into four operating
segments: Environmental & Infrastructure; Energy & Chemicals;
Maintenance, and Fabrication, Manufacturing & Distribution. In
January 2005, the company sold substantially all of the assets of
its Shaw Power Technologies, Inc. and Shaw Power Technologies
International, Ltd. units to Siemens Power Transmission and
Distribution Inc., a unit of Siemens AG.
The company has operations in Chile, China, Malaysia, the United
Kingdom and, Venezuela, among others.
* * *
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on The Shaw Group Inc. and removed it from
CreditWatch, where it was placed with negative implications in
October 2006. S&P said the outlook is stable.
In addition, 'BB' senior secured debt rating was affirmed after
the $100 million increase to the company's revolving credit
facility.
STANDARD AERO: Merger Prompts Moody's to Review Ratings
-------------------------------------------------------
Dubai Aerospace Enterprises reported on April 2, 2007, that it
entered into an Agreement and Plan of Merger to purchase Piedmont
Hawthorne Holdings, Inc. and Standard Aero Holdings Inc. from The
Carlyle Group in a cash transaction for total consideration of
approximately $1.8 billion.
Moody's Investors Service is reviewing the ratings of Standard
Aero Holdings, Inc. for possible downgrade in response to this
announcement. Standard Aero has a Corporate Family Rating of B2.
The Speculative Grade Liquidity Rating has been affirmed at SGL-3
and is not affected by the current review.
Moody's review is focusing on the impact that the proposed
transaction will have on the combined entity's future capital
structure, financial strategy and credit metrics. The review is
also assessing the degree to which the company's operating
strategy will be able to sustain earnings, cash flow generation
and liquidity under the new leveraged capital structure. Moody's
notes that Standard Aero's existing bank credit facility contains
change of control provisions whereby all outstanding debt under
that agreement must be redeemed upon conclusion of the sale of the
company. If such debt is redeemed in its entirety under change of
control provisions Moody's will withdraw all ratings of the
company.
Standard Aero's senior subordinated notes' indenture contains a
requirement that the company tender to purchase any and all such
notes outstanding upon a change of control from the sale of the
company. To the extent that the subordinated notes are redeemed
in their entirety upon completion of the acquisition, Moody's will
withdraw the notes' rating.
However, the rating for any notes that remain outstanding will be
assessed based on the financial profile of the company post
acquisition and any support that might be afforded by its new
parent, and could be subject to downgrade. Should there be
insufficient financial information available to monitor the
performance of the company post acquisition, the ratings could be
withdrawn.
On review for possible downgrade:
* Standard Aero Holdings, Inc.
-- Probability of Default Rating, Placed on Review for
Possible Downgrade, currently B2
-- Corporate Family Rating, Placed on Review for Possible
Downgrade, currently B2
-- Senior Subordinated Regular Bond/Debenture, Placed on
Review for Possible Downgrade, currently Caa1
-- Senior Secured Bank Credit Facility, Placed on Review for
Possible Downgrade, currently Ba3
Outlook Actions:
* Standard Aero Holdings, Inc.
-- Outlook, changed to rating under review from stable.
Standard Aero Holdings, a Delaware corporation, is a leading
provider of MRO services to the military, regional and business
aircraft after-markets.
STRUCTURED ADJUSTABLE: Fitch Junks Class B5 Certificates' Rating
----------------------------------------------------------------
Fitch Ratings has downgraded two and affirmed four classes of
Structured Adjustable Rate Mortgage Loan Trust (SARM) residential
mortgage-backed certificates, as follows:
Series 2004-11
-- Class A affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'AA';
-- Class B3 affirmed at 'BBB';
-- Class B4 downgraded to 'B' from 'BB'; and
-- Class B5 downgraded to 'C/DR5' from 'CC/DR3'.
The affirmations on the above classes reflect adequate
relationships of credit enhancement (CE) to future loss
expectations and affect approximately $30.04 million of
outstanding certificates. The negative rating action taken on
classes B4 and B5 affect approximately $1.15 million of
outstanding certificates and reflects deterioration in the
relationship between CE and expected losses.
March 2007 remittance information indicates that 5.12% of the pool
is currently over 90 days delinquent of which 1.62% is currently
in REO (Real estate owned) and 3.50% in foreclosure. Class B4
currently has 1.52% ($475,069) of credit support remaining
(originally 1.05% or $2,578,951). Class B5 currently has no
credit support remaining (originally 0.50% or $1,229,951) and has
experienced a write-down of $266,453. Monthly losses have
averaged $143,530 for the past three months. Cumulative losses as
a percent of the original collateral balance are 0.24%.
The mortgage loans were originated by various banks and other
mortgage lending institutions. The largest percentage of
originations were those made by Aurora Loan Services Inc. The
mortgage loans were acquired by Lehman Brothers Holdings Inc. The
transaction consists of adjustable rate, conventional, fully
amortizing mortgage loans, substantially all of which have
original terms to stated maturity of 30 years. The mortgage loans
provide for an interest rate adjustment of every six-month or
one-month period, based on the six-month LIBOR index or the one-
month LIBOR index. Approximately 93.66% of the mortgage loans at
closing provide for interest-only payments and have an
interest-only period for the first five to 10 years after
origination. The mortgage loans are master serviced by Aurora
Loan Services, Inc., which is rated 'RMS1-' by Fitch.
SARM 2004-11 is seasoned 32 months and the pool factor is 13%.
STRUCTURED ADJUSTABLE: Fitch Rates Class B5-II Certificates at B
----------------------------------------------------------------
Structured Adjustable Rate Mortgage Loan Trust's (SARM)
$716.9 million mortgage pass-through certificates, series 2007-3,
which closed March 30, 2007, are rated by Fitch Ratings:
-- $687.1 million classes 2-A1, 2-A2, 3-A1, 3-A2, 3-AX, 4-A1
through 4-A5, 4-AX, 1-AP, 2-AP, 3-AP, 4-AP, R-II and R-III
'AAA';
-- $14.8 million classes B1-II and B1-III 'AA';
-- $5.5 million classes B2-II and B2-III 'A';
-- $4 million classes B3-II and B3-III 'BBB';
-- $3.2 million classes B4-II and B4-III 'BB' (144A); and
-- $2.3 million classes B5-II and B5-III 'B' (144A).
The Group II 'AAA' rating on the senior certificates reflects the
4.50% total credit enhancement provided by the 2.30% class B1-II,
0.70% class B2-II, 0.55% class B3-II, privately offered 0.40%
class B4-II and privately offered 0.30% class B5-II, as well as
the non-rated, privately offered 0.25% class B6-II.
The Group III 'AAA' rating on the senior certificates reflects the
4.25% total credit enhancement provided by the 1.75% class B1-III,
0.85% class B2-III, 0.55% class B3-III, privately offered 0.50%
class B4-III and privately offered 0.35% class B5-III, as well as
the non-rated, privately offered 0.25% class B6-III.
Fitch believes that the amount of credit enhancement will be
sufficient to cover credit losses, including limited bankruptcy,
fraud and special hazard losses. In addition, the ratings reflect
the quality of the mortgage collateral, the strength of the legal
and financial structures, the master servicing capabilities of
Aurora Loan Services, Inc. (rated 'RMS1-' by Fitch), and the
primary servicing capabilities of Aurora Loan Services LLC and
Countrywide Home Loans Servicing LP.
Group II consists of 617 adjustable-rate, conventional, first lien
residential mortgage loans, substantially all of which have
original terms to stated maturity of 30 years. As of the
March 1, 2007, cut-off date, the mortgages have an aggregate
principal balance of approximately $403,193,790. The Group II
mortgage pool has a weighted average original loan-to-value ratio
(OLTV) of 73.07%, a weighted average coupon (WAC) of 6.107%, and a
weighted average remaining term (WAM) of 360.
Group III consists of 444 adjustable-rate, conventional, first
lien residential mortgage loans, substantially all of which have
original terms to stated maturity of 30 years. As of
March 1, 2007, the mortgages have an aggregate principal balance
of approximately $315,506,072. The Group III mortgage pool has a
weighted average OLTV of 69.51%, a WAC of 6.301% and a WAM of 359.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
The mortgage loans were originated by various originators or
acquired by various originators or their correspondents in
accordance with such originator's respective underwriting
standards and guidelines. The largest percentage of originations
is Countrywide Home Loans Inc. (97.51%).
SASCO, a special purpose corporation, deposited the loans in the
trust, which issued the certificates.
THAXTON GROUP: Delaware Court Confirms Joint Chapter 11 Plan
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware confirmed
the Second Amended and Restated Joint Consolidated Plan of
Reorganization co-proposed by The Thaxton Group Inc., its debtor-
affiliates, and the Official Committee of Unsecured Creditors,
BankruptcyData said on its Web site Wednesday.
BankruptcyData said the Plan contains a series of settlements with
parties involved in the company's October 2003 Chapter 11 filing.
Bill Rochelle of Bloomberg News relates that the Plan is estimated
to pay unsecured creditors 85% of their claims.
According to Mr. Rochelle, the Plan was made possible by a
settlement last September of a lawsuit between Thaxton and Finova
Group Inc.
Mr. Rochelle said Thaxton's creditors had alleged Finova pressured
Thaxton for early repayment of debt.
In its monthly operating report for January 2007, Thaxton reported
a cumulative net loss of $86,999,436 on $177,079,561 of revenue
for the period from Oct. 17, 2003, thru Jan. 31, 2007.
At Jan. 31, 2007, the company's balance sheet reflects:
Total Assets $ 89,970,290
Total Liabilities $172,342,277
Stockholders' Equity Deficit ($ 82,371,987)
Headquartered in Lancaster, South Carolina, The Thaxton Group,
Inc., is a diversified consumer financial services company.
The company filed for Chapter 11 protection on Oct. 17, 2003
(Bankr. Del. Case No. 03-13183). Daniel B. Butz, Esq.,
Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell, represent the Debtors in their
restructuring efforts. Alan Kolod, Esq., at Moses & Singer LLP,
represents the Offical Committee of Unsecured Creditors. As of
Dec. 31, 2005, the Debtors reported assets totaling $98,889,297
and debts totaling $175,693,613.
TNP LLC: Case Summary & Five Largest Unsecured Creditors
--------------------------------------------------------
Debtor: TNP, LLC
P.O. Box 1584
Ellicott City, MD 21041
Bankruptcy Case No.: 07-13115
Chapter 11 Petition Date: April 5, 2007
Court: District of Maryland (Baltimore)
Debtor's Counsel: John C. Schropp, Esq.
Coon & Cole, LLC
305 West Chesapeake Avenue, Suite 105
Towson, MD 21204
Tel: (410) 825-5717
Fax: (410) 825-6023
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Huy Luu 18-20 South Broadway $91,000
2615 Northeast Sand Hill Road Baltimore, Maryland Secured:
Ellicott City, MD 21042 21231 $850,000
Senior Lien:
$817,908
BGE Electric for 18 $4,839
P.O. Box 1475 South Broadway
Baltimore, MD 21203
Electric for 18 $453
South Broadway,
Second Floor
Electric for 502 $264
South Broadway
Electric for 500 $237
South Broadway
Mayor and City Council of Property Taxes on $6,868
Baltimore
Bureau of Treasury Management
200 Holiday Street
Baltimore, MD 21202
Suntrust Overdraft on $6,818
Checking Account
City of Baltimore Metered Water Bill $787
For 18 South Broadway
Metered Water Bill $98
For 18 South Broadway
TRIBUNE CO: S&P Cuts Rating on $79 Mil. Debentures to BB- from BB+
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class A and B units from the $79.795 million Structured Asset
Trust Unit Repackaging Tribune Co. Debenture Backed Series 2006-1
to 'BB-' from 'BB+'.
The ratings remain on CreditWatch, where they were placed with
negative implications Oct. 3, 2006.
The downgrades reflect the April 2, 2007, lowering of the ratings
on the underlying securities, the $79.795 million 7.25% debentures
due Nov. 15, 2096, issued by Tribune Co., and their continued
placement on CreditWatch with negative implications.
This issue is a swap-independent synthetic transaction that is
weak-linked to the underlying collateral, the $79.795 million
Tribune Co. 7.25% debentures.
U.S.A. INVESTMENT: Involuntary Chapter 11 Case Summary
------------------------------------------------------
Alleged Debtor: U.S.A. Investment Partners, L.L.C.
4525 South Sandhill Road, Suite 114
Las Vegas, NV 89121
Case Number: 07-11821
Type of Business: The Debtor invests and develops real estate.
Involuntary Petition Date: April 4, 2007
Chapter: 11
Court: District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Petitioners' Counsel: Anne M. Loraditch, Esq.
Beckley Singleton, Chartered
530 Las Vegas Boulevard South
Las Vegas, NV 89101
Tel: (702) 385-3373
Fax: (702) 385-5024
-- and --
Rob Charles, Esq.
Lewis & Roca, L.L.P.
3993 Howard Hughes Parkway, Suite 600
Las Vegas, NV 89169
Tel: (702) 949-8320
Fax: (702) 949-8321
-- and --
George C. Lazar
525 B, Suite 1500
San Diego, CA 92101
Tel: (877) 272 3734
Fax: (877) 227-0150
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
U.S.A. Diversified Trust promissory note $55,113,781
Deed Fund, L.L.C. in default with
c/o F.T.I. Consulting, Inc. original balance
2 North Central Avenue, of $55,113,781
Suite 1200 plus accrued
Phoenix, AZ 85004 interest at the
c/o Michael Tucker rate of 25% per
Manager annum through
c/o F.T.I. Consulting, Inc. petition date
2 North Central Avenue,
Suite 1200
Phoenix, AZ 85004
U.S.A.C.M. Liquidating Trust promissory note $58,374,919
c/o Rob Charles for benefit of
Lewis & Roca, L.L.P. creditor and
3993 Howard Hughes Parkway, U.S.A. Capital
Suite 600 Diversified Trust
Las Vegas, NV 89169-5996 Deed Fund, L.L.C.
Tel: (702) 949-8320 with original
c/o Geoffrey L. Berman principal balance
Trustee of $58,374,919
c/o D.S.I.-Wells Fargo plus accrued
Center interest at the
333 South Grand Avenue, rate of 7.75% per
Suite 4070 annum from the
Los Angeles, CA 90071-1544 note date of
May 31,2006,
through the
petition date
Alabruj Investments, L.L.C. matured claim on $500,000
630 Trade Center, 2nd Floor written guaranty
Las Vegas, NV 89119 of defaulted loan
Tel: (619) 237 0011
c/o Thomas Jurbala
Manager
630 Trade Center, 2nd Floor
Las Vegas, NV 89119
Tel: (619) 237 0011
VERTIS INC: Poor Performance Prompts S&P's Negative CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Vertis
Inc., including the 'B-' corporate credit rating, on CreditWatch
with negative implications.
The CreditWatch listing follows the disappointing operating
results reported for the fourth quarter of 2006, reflected by the
19% decline in adjusted EBITDA year over year.
Weaker-than-expected performance was driven primarily by continued
negative pricing pressures and a meaningful decrease in volumes in
the advertising inserts segment, as well as pricing declines for
direct mail services.
"Notwithstanding the March 2007 amendments to the company's credit
facility, which increased borrowing availability and lowered the
minimum EBITDA covenant, continued negative operating trends
through 2007 would likely result in further deterioration of the
company's liquidity position," noted Standard & Poor's credit
analyst Guido DeAscanis.
In resolving its CreditWatch listing, Standard & Poor's will meet
with management to discuss its near-term operating and financial
strategies. Given the recent changes in leadership at Vertis, the
review will focus on changes in the company's strategy to address
the challenging operating environment, as well as an assessment of
its liquidity position and plans to refinance existing debt
balances as they mature in 2008 and 2009.
WASTE SERVICES: Closes Buy and Sell Transactions with Allied Waste
------------------------------------------------------------------
Waste Services, Inc. has completed transactions to acquire Allied
Waste's South Florida operations and to sell its Arizona
operations to Allied Waste. The South Florida operations consist
of a collection company, a transfer station that is permitted to
process 800 tons per day and a materials recovery facility, all
providing service in Miami-Dade County. These operations employ
approximately 300 people, operate 120 collection routes and
generate approximately $65 million in annual revenue. The
acquisition establishes Waste Services as a vertically integrated
competitor in Miami-Dade, the largest market in Florida, and also
creates the opportunity to increase internalization into the
company's existing Florida landfills.
Waste Services also intends to increase the term loans under its
existing Senior Secured Credit Facility by $50 million, as well as
obtain lender consents for certain other modifications to the
credit agreement. Net proceeds from the proposed term loans will
be used to repay outstanding borrowings under the company's
revolving credit facility, a portion of which were incurred to
complete the South Florida / Arizona purchase and sale
transaction. Proceeds from the term loans will also be used to
complete the acquisition of USA Recycling in Florida and for
general corporate purposes.
A Delaware corporation, Waste Services Inc. (NASDAQ: WSII)
-- http://www.wasteservicesinc.com/-- is a multi-regional,
integrated solid waste services company, providing collection,
transfer, landfill disposal and recycling services for commercial,
industrial and residential customers in the United States and
Canada.
* * *
As reported in the Troubled Company Reporter on April 4, 2007,
Moody's Investors Service affirmed the Ba3 rating on the proposed
amended senior secured credit facilities of Waste Services, Inc.
and upgraded the Corporate Family rating to B2 from B3. The
outlook for the ratings is stable.
Standard & Poor's Ratings Services raised its corporate credit
rating on Boca Raton, Florida-based Waste Services Inc. to 'B'
from 'B-'. The outlook is stable.
* BOND PRICING: For the week of April 2 - April 5, 2007
----------------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
Allegiance Tel 11.750% 02/15/08 50
Allegiance Tel 12.875% 05/15/08 50
Amer & Forgn Pwr 5.000% 03/01/30 68
Antigenics 5.250% 02/01/25 68
Anvil Knitwear 10.875% 03/15/07 72
Atherogenics Inc 1.500% 02/01/12 51
Autocam Corp. 10.875% 06/15/14 70
Bank New England 8.750% 04/01/99 8
Bank New England 9.500% 02/15/96 13
Bank New England 9.875% 09/15/99 8
Borden Inc 7.875 02/15/23 75
Budget Group Inc 9.125% 04/01/06 0
Burlington North 3.200% 01/01/45 56
Calpine Corp 4.000% 12/26/06 70
Chic East Ill RR 5.000% 01/01/54 71
CHS Electronics 9.875% 04/15/05 1
Collins & Aikman 10.750% 12/31/11 3
Comcast Holdings 2.000% 10/15/29 42
Dairy Mart Store 10.250% 03/15/04 0
Dana Corp 5.850% 01/15/15 74
Dana Corp 9.000% 08/15/11 73
Decode Genetics 3.500% 04/15/11 71
Delco Remy Intl 9.375% 04/15/12 29
Delco Remy Intl 11.000% 05/01/09 29
Delta Air Lines 2.875% 02/18/24 54
Delta Air Lines 7.700% 12/15/05 54
Delta Air Lines 7.900% 12/15/09 57
Delta Air Lines 8.000% 06/03/23 55
Delta Air Lines 8.300% 12/15/29 57
Delta Air Lines 9.000% 05/15/16 57
Delta Air Lines 9.250% 03/15/22 53
Delta Air Lines 9.250% 12/27/07 61
Delta Air Lines 9.750% 05/15/21 56
Delta Air Lines 10.000% 08/15/08 56
Delta Air Lines 10.000% 12/05/14 58
Delta Air Lines 10.125% 05/15/10 56
Delta Air Lines 10.375% 02/01/11 56
Delta Air Lines 10.375% 12/15/22 54
Delta Mills Inc 9.625% 09/01/07 16
Deutsche Bank NY 8.500% 11/15/16 73
Diamond Triumph 9.250% 04/01/08 55
Diva Systems 12.625% 03/01/08 0
Dura Operating 8.625% 04/15/12 27
Dura Operating 9.000% 05/01/09 4
Encysive Pharmacy 2.500% 03/15/12 68
Exodus Comm Inc 4.750% 07/15/08 0
Fedders North AM 9.875% 03/01/14 54
Federal-Mogul Co. 8.160% 03/06/03 75
Finova Group 7.500% 11/15/09 28
Ford Motor Co 6.625% 02/15/28 72
Ford Motor Co 7.125% 11/15/25 74
Ford Motor Co 7.400% 11/01/46 73
Ford Motor Co 7.700% 05/15/97 74
Ford Motor Co 7.750% 06/15/43 74
GB Property Fndg 11.000% 09/29/05 57
Global Health Sc 11.000% 05/01/08 8
Gulf States Stl 13.500% 04/15/03 0
Home Prod Intl 9.625% 05/15/08 26
Insight Health 9.875% 11/01/11 30
Iridium LLC/CAP 10.875% 07/15/05 21
Iridium LLC/CAP 11.250% 07/15/05 19
Iridium LLC/CAP 13.000% 07/15/05 21
Iridium LLC/CAP 14.000% 07/15/05 21
Kaiser Aluminum 9.875% 02/15/02 22
Kaiser Aluminum 12.750% 02/01/03 3
Kellstrom Inds 5.500% 06/15/03 4
Kellstrom Inds 5.750% 10/15/02 0
Keystone Cons 9.625 08/01/07 42
Kmart Corp 8.990% 07/05/10 10
Kmart Corp 9.350% 01/02/20 12
Kmart Corp 9.780% 01/05/20 27
Liberty Media 3.750% 02/15/30 63
Liberty Media 4.000% 11/15/29 67
LTV Corp 8.200% 09/15/07 0
New Orl Grt N RR 5.000% 07/01/32 71
Northern Pacific RY 3.000% 01/01/47 56
Northern Pacific RY 3.000% 01/01/47 56
Northwest Airlines 8.970% 01/02/15 25
Northwest Airlines 9.179% 04/01/10 31
Northwst Stl&Wir 9.500% 06/15/01 0
NTK Holdings Inc 10.750% 03/01/14 73
Nutritional Src 10.125% 08/01/09 63
Oakwood Homes 7.875% 03/01/04 11
Oakwood Homes 8.125% 03/01/09 1
Oscient Pharm 3.500% 04/15/11 74
Outboard Marine 9.125% 04/15/17 1
Pac-West Telecom 13.500% 02/01/09 32
Pac-West Telecom 13.500% 02/01/09 30
PCA LLC/PCA FIN 11.875% 08/01/09 3
Pegasus Satellite 9.625% 10/15/49 9
Pegasus Satellite 9.750% 12/01/06 8
Phar-Mor Inc 11.720 09/11/02 3
Piedmont Aviat 10.250% 01/15/49 0
Pixelworks Inc 1.750% 05/15/24 75
Polaroid Corp 6.750% 01/15/02 0
Polaroid Corp 7.250% 01/15/07 0
Polaroid Corp 11.500% 02/15/06 0
Primus Telecom 3.750% 09/15/10 52
Primus Telecom 8.000% 01/15/14 66
PSINET Inc 11.500% 11/01/08 0
Radnor Holdings 11.000% 03/15/10 1
Railworks Corp 11.500% 04/15/09 1
RJ Tower Corp. 12.000% 06/01/13 7
Spacehab Inc 5.500% 10/15/10 68
Tech Olympic 7.500% 03/15/11 73
Tech Olympic 7.500% 01/15/15 70
Tech Olympic 10.375% 07/01/12 74
Tribune Co 2.000% 05/15/29 67
Trism Inc 12.000% 02/15/05 0
United Air Lines 8.700% 10/07/08 42
United Air Lines 9.200% 03/22/08 53
United Air Lines 9.210% 01/21/17 11
United Air Lines 9.350% 04/07/16 41
United Air Lines 10.110% 02/19/49 53
United Air Lines 10.850% 02/19/15 53
US Air Inc. 10.250% 01/15/49 6
US Air Inc. 10.680% 06/27/08 0
US Air Inc. 10.900% 01/01/49 0
USAutos Trust 2.212% 03/03/11 7
Vesta Insurance Group 8.750% 07/15/25 4
Werner Holdings 10.000% 11/15/07 7
Westpoint Steven 7.875% 06/15/08 0
Wheeling-Pitt St 5.000% 08/01/11 74
Wheeling-Pitt St 6.000% 08/01/10 74
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva,
Melvin C. Tabao, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda
I. Nartatez, Nikki Frances S. Fonacier, Tara Marie A. Martin, and
Peter A. Chapman, Editors.
Copyright 2007. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
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for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***