/raid1/www/Hosts/bankrupt/TCR_Public/070430.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 30, 2007, Vol. 11, No. 101
Headlines
AGS LLC: S&P Rates Proposed $175 Million Credit Facility at 'B'
AMDL INC: Posts $5.9 Million Recurring Losses in Fiscal Year 2006
AMERICHIP INT'L: February 28 Balance Sheet Upside-Down by $681,672
AVETA INC: Poor Financial Condition Prompts S&P to Junk Ratings
BALLY TOTAL: NYSE to Suspend Common Stock Trading on May 2
BEAZER HOMES: Incurs $43.1 Million Net Loss in Qtr. Ended March 31
CALPINE CORP: Inks Prelim Pact Resolving ULCI Bondholders' Claims
CALPINE CORPORATION: Seeks Court Okay to Repay Beal Loan
CHAPARRAL STEEL: S&P Revises Outlook to Developing from Stable
CWABS ASSET: DBRS Lowers Ratings on Two Series 2006-SPS1 Certs.
CYTODYN OF NEW MEXICO: Case Summary & 5 Largest Unsec. Creditors
DAIMLERCHRYSLER AG: Chrysler Sale May Sabotage Marysville Deal
DELTA AIR: S&P Says Plan Confirmation Won't Affect D Rating
DESERT STAR: Case Summary & Three Largest Unsecured Creditors
EAGLE BROADBAND: February 28 Balance Sheet Upside-Down by $134,000
ENCYSIVE PHARMA: Losses Spur KPMG's Going Concern Doubt Opinion
EXIDE TECH: Inks $495 Million Credit Facility Deal With Lenders
EXIDE TECH: Increased Liquidity Cues S&P to Lift Rating to CCC+
EXIDE TECH: Moody's Rates $259 Million Senior Term Loan at B1
FREEPORT-MCMORAN: Earns $493 Million in First Qtr. Ended March 31
GENERAL MOTORS: Halts Vehicle Development Programs in Two Plants
GENTEK INC: Posts $12 Mil. Net Loss in Fourth Qtr. Ended Dec. 31
GEORGIA GULF: Moody's Cuts Rating to B1 and Says Outlook is Stable
GOODYEAR TIRE: March 31 Balance Sheet Upside-Down by $90 Million
GRUGA USA: Involuntary Chapter 11 Case Summary
HARMAN INT'L: $8 Billion Offer Cues S&P to Cut BBB+ Rating to BB-
HAYES LEMMERZ: Plans $150 Million of Senior Notes Offering
HELIOS FINANCE: Moody's Rates $19.9MM Class B-4 notes at (P)B3
HFF INC: December 31 Balance Sheet Upside-Down by $44 Million
HILTON HOTELS: Sells 10 Hotels to Morgan Stanley for $770 Million
HILTON HOTELS: Sells 132 Scandic Hotel Chain to EQT for $1.1 Bil.
HUISH DETERGENTS: S&P Holds B Rating on Increased First-Lien Loan
IMAGEWARE SYSTEMS: Sets Annual Shareholders Meeting on Sept. 19
INFe Human: Posts $196,235 Net Loss in Quarter Ended February 28
INVERNESS MEDICAL: Biosite Merger Pact Cues Moody's Ratings Review
IPCS INC: Declares $11 Per Share Special Cash Dividend
J.A.M.M. 18: Case Summary & Two Largest Unsecured Creditors
JARDEN CORP: $1.2 Billion K2 Inc. Deal Prompts S&P to Hold Ratings
JUNIPER NETWORKS: Stock Options Query Cues S&P to Remove Watch
K2 INC: $1.2 Billion Jarden Deal Cues Moody's to Review Ratings
KARA HOMES: Court Schedules Plan Confirmation Hearing on May 24
KENNETH KREISEL: Case Summary & 18 Largest Unsecured Creditors
KENNETH RALICH: Voluntary Chapter 11 Case Summary
LB-UBS COMMERCIAL: S&P Lifts Ratings on Class P Certificates to BB
LEVEL 3: Incurs $647 Million Net Loss in First Qtr. Ended March 31
LONGLEAF PRODUCTION: Case Summary & 12 Largest Unsecured Creditors
M&A HOMES: Voluntary Chapter 11 Case Summary
MAGUIRE PROPERTIES: Completes $2.8 Bil. Office Portfolio Purchase
MCCLATCHY CO: S&P Lowers Bank Loan and Credit Ratings to BB+
MGM MIRAGE: Inks Pact Buying Real Estates for $575 Million
MGM MIRAGE: Moody's Holds Ratings & Revises Outlook to Negative
MOBILE MINI: Prices Offering for $150 Mil. of 6-7/7% Senior Notes
MYSTIQUE ENERGY: Court Approves Creditor Protection Under CCAA
NEW CENTURY: Amended Servicing Business Bidding Procedures Okayed
NEW CENTURY: Amends APA on Sale of Servicing Biz to Carrington
NORANDA ALUMINUM: High Debt Leverage Spurs S&P's B+ Credit Rating
NORANDA ALUMINUM: Moody's Rates $250 Million Credit Pact at Ba2
NORTH SILVER: Voluntary Chapter 11 Case Summary
OMNOVA SOLUTIONS: S&P Rates Proposed $150 Million Term Loan at B+
ON SEMICONDUCTOR: March 30 Balance Sheet Upside-Down by $157 Mil.
OSI RESTAURANT: S&P Holds B+ Rating on Increased Term Loan
PARKER & PARSLEY: Moody's Reviews Ratings on Share Buyback Program
PINE VALLEY: Court Extends Creditor Protection Until May 3
RADIO ONE: Posts $22.9 Mil. Net Loss in Fourth Qtr. Ended Dec. 31
RADNOR HOLDINGS: Court Approves Stipulation on Utility Deposits
RADNOR HOLDINGS: Court Okays Rejection of 10 Executory Contracts
RARE RESTAURANT: S&P Junks Rating on Proposed $100 Million Notes
RICHARD KORTAN: Case Summary & 20 Largest Unsecured Creditors
RINKER BOAT: Modest Performance Cues Moody's to Downgrade Ratings
SAINT VINCENTS: Wants to Sell Castleton Property for $1.2 Million
SALEM COMMUNICATIONS: Earns $3.3 Mil. in Fourth Qtr. Ended Dec. 31
SANTA FE: Exclusive Plan Filing Date Further Extended to June 12
SAVVIS INC: March 31 Balance Sheet Upside-Down by $13 Million
SERENA SOFTWARE: Posts $57 Million Net Loss in Fiscal Year 2007
SILVER ELMS: Moody's Rates $8 Million Class E Notes at Ba2
SOLOMON TECH: Posts $2.9 Million Net Loss in Quarter Ended Sept 30
SPECTRUM BRANDS: Fitch Holds CCC Issuer Default Rating
STRUCTURED ASSET: DBRS Lowers Ratings on S. 2006-ARS1 Certificates
SURESH NARASIMHAN: Case Summary & Two Largest Unsecured Creditors
TIMKEN COMPANY: Posts $42 Million First Quarter Income in 2007
TOURMALINE CDO: Moody's Rates $11.25 Million Class E Notes at Ba1
TOWER INSURANCE: S&P Withdraws BB+ Ratings at Company's Request
TOWER RECORDS: Can Assume & Assign IP Contracts to Caiman Holdings
TRIPOS INC: Low Equity Prompts Nasdaq Delisting Notice
TRW Automotive: Moody's Holds Ba3 Rating on $1.5 Billion Sr. Notes
UAL CORP: General Unsec. Claimants Gets Additional Shares of Stock
US ENERGY: Nasdaq Stays Delisting Action Until a Hearing on June 7
VERTICAL ABS: Moody's Rates $22 Million Class C Notes at Ba2
WENDY'S INT'L: Earnings Plummet to $14.7MM in Quarter Ended Apr. 1
WENDY'S INT'L: Strategic Review Cues S&P's Negative CreditWatch
WENDY'S INT'L: Moody's Puts Ratings Under Review and May Downgrade
WEST PENN: Fitch Rates $735 Million Revenue Bonds at BB-
WEST PENN: Moody's Rates $735 Million Bonds at Ba2
WILLIAMS PARTNERS: Boosts Unitholders' Cash Dividend by $50 cents
WYLE HOLDINGS: High Financial Leverage Cues S&P to Hold B+ Ratings
XILLIX TECH: Sells Fluorescence Endoscopy Patents to Novadaq
* Dreier Stein's Transactional Dep't. Fortifies with New Recruits
* Young Conaway's NY Office Extends Convenience Access to Clients
* Matthew A. Salerno Joins Ulmer & Berne LLP's Business Practice
* BOND PRICING: For the Week of April 23 - April 27, 2007
*********
AGS LLC: S&P Rates Proposed $175 Million Credit Facility at 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Simpsonville, South Carolina-based AGS LLC. The
rating outlook is stable.
At the same time, Standard & Poor's assigned its loan and recovery
ratings to AGS's proposed $175 million first-lien senior secured
credit facility. The loan was rated 'B' with a recovery rating of
'3', indicating the expectation for meaningful (50%-80%) recovery
of principal in the event of a payment default.
Pro forma debt outstanding is expected to peak at approximately
$150 million. Proceeds from the proposed bank facility will be
used primarily to refinance existing debt, fund a special
dividend, and fund advancements to be lent to two tribal customers
for development projects.
"The 'B' corporate credit rating reflects AGS's dependence on
Oklahoma for a substantial portion of net revenues, its
concentrated customer base, its dependence on key personnel, and
the possibility of increased competition in the Oklahoma market
over time," noted Standard & Poor's credit analyst Guido
DeAscanis. "Somewhat tempering these factors are AGS's relatively
good position in the Oklahoma gaming market, good EBITDA margins,
and solid credit measures for the rating."
AGS designs and operates electronic video bingo machines that are
primarily marketed for placement in casinos operated by Native
American tribes. Currently, AGS maintains an installed base of
approximately 6,000 machines that are placed in more than 70
Native American casinos. Notwithstanding the diversification
across multiple facilities, the company's business focus remains
narrow, with almost all revenue generated by machines placed
within the Oklahoma gaming market. In addition, the company's
revenue base is highly concentrated, with one customer
representing almost half of all sales.
Pro forma for the bank facility and including the $30 million
delayed-draw term loan financing, S&P expect leverage (as measured
by total debt to EBITDA) to be about 4.0x for the fiscal year
ended Dec. 31, 2007, which is expected to provide cushion in the
rating for an evolving competitive landscape.
AMDL INC: Posts $5.9 Million Recurring Losses in Fiscal Year 2006
-----------------------------------------------------------------
AMDL Inc. reported consolidated net loss of $5.9 million for
fiscal year 2006, as compared to a net loss of $2.5 million in
fiscal year 2005. The increase in the net loss per share was
significantly affected by the issuance of common stock for
consulting and investor relations services amounting to
$1.05 million and charges for compensatory options to officers,
directors and employees amounting to $2.4 million.
The significant non-cash expense associated with the compensatory
options were due to the company's adoption of the new rules
related to option accounting in FASB 123R. The non-cash expenses
were offset in part by the acquisition of JPI which contributed
net income of $435,814 for the three months and year ended
Dec. 31, 2006.
At Dec. 31, 2006, the company had total assets of $19.2 million
compared to total assets of $3.2 million at Dec. 31, 2005. The
primary reason for the increase was the acquisition of JPI, which
increased the company's assets by $15.2 million.
Cash and cash equivalents was $1.6 million as of Dec. 31, 2006, an
increase of $186,881 from the $1.4 million cash on hand as of
Dec. 31, 2005. For the year ended Dec. 31, 2006, cash used in
operations was $1.9 million.
The major components affecting the decrease were:
a) the net loss of $5.9 million offset by non-cash expense of
$2.4 million related to the fair value of options granted to
employees and directors;
b) the $1.06 million related to common stock issued to
consultants for services; and
c) $310,372 for depreciation and amortization.
Net cash of $2.6 million was provided by a private placement of
common stock in December 2006 and $306,086 provided by the
exercise of warrants and options during the year ended
Dec. 31, 2006. Cash used in investing activities during fiscal
year 2006 was $731,140, the majority of which was comprised of the
purchase of product licenses and the cash paid, net of cash
acquired, in the JPI acquisition.
About AMDL Inc.
Headquartered in Tustin, California, AMDL Inc. (Amex: ADL) --
http://www.amdl.com/-- a theranostics company, which develops,
manufactures, markets, and sells various immunodiagnostic kits for
the detection of cancer and other diseases. Its products include
DR-70, a test kit is used to assist in the detection of various
types of cancer, including lung small and nonsmall cell, stomach,
breast, rectal, colon, and liver; and Pylori-Probe, a diagnostic
kit which is cleared for sale in the United States. The company
markets its products through distributor relationships and to
domestic markets through strategic partnerships and relationships
with diagnostic companies. It serves various customers, including
hospital, clinical, research and forensic laboratories, and
doctor's offices.
Going Concern Doubt
Corbin & Company LLP raised substantial doubt about the company's
ability to continue as a going concern after auditing the
company's financial statements that reflected significant
operating losses and negative cash flows from operations through
Dec. 31, 2006, and an accumulated deficit at Dec. 31, 2006.
AMERICHIP INT'L: February 28 Balance Sheet Upside-Down by $681,672
------------------------------------------------------------------
AmeriChip International Inc. reported a net loss of $8,133,780 on
revenues of $180,435 for the first quarter ended Feb. 28, 2007,
compared with a net loss of $3,475,479 on revenues of $48,139 for
the same period in fiscal 2006.
Operating expenses increased from $3,491,635 for the three months
ended Feb. 28, 2006, to $8,206,896 for the three months ended
Feb. 28, 2007, due to an increase in director fees as a result of
the issuance of restricted common stock to each of the company's
directors in the amount of $5,850,000. This is partially reduced
by a decrease in license expense for the three months ended
Feb. 28, 2007, resulting from the conversion of the unpaid license
fees owed to two officers during the three months ended
Feb. 28, 2006.
The company's balance sheet showed $7,760,867 in total assets,
$8,439,126 in total liabilities, and $3,413 in minority interest,
resulting in a $681,672 total stockholders' deficit.
The company's balance sheet at Feb. 28, 2007, also showed strained
liquidity with $1,187,679 in total current assets available to pay
$4,615,753 in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Feb. 28, 2007, are available for
free at http://researcharchives.com/t/s?1dfe
Going Concern Doubt
As reported in the Troubled Company Reporter on April 3, 2007,
Williams & Webster PS, in Spokane, Wash., expressed substantial
doubt about AmeriChip International Inc.'s ability to continue as
a going concern after auditing the company's consolidated
financial statements for the year ended Nov. 30, 2006. The
auditing firm pointed to the company's significant operating
losses.
About AmeriChip
Headquartered in Plymouth, Mich., AmeriChip International Inc.
(OTC BB: ACHI.OB) -- http://www.americhiplacc.com/-- holds a
patented technology known as Laser Assisted Chip Control, the
implementation of which results in efficient chip control
management in industrial metal machining applications. This
technology provides substantial savings in machining costs of
certain automobile parts providing much more competitive pricing
and more aggressive sales approaches within the industry.
AVETA INC: Poor Financial Condition Prompts S&P to Junk Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
ratings on Aveta Inc. and its affiliates to 'CCC' from 'B-' and
removed them from CreditWatch with negative implications, where
they were placed on Feb. 2, 2007.
Standard & Poor's also said that the outlook on these companies is
negative.
"The downgrade reflects the deterioration in Aveta's financial
condition and business profile," explained Standard & Poor's
credit analyst Joseph Marinucci. "This stemmed from sustained
adverse development in its core operations in Puerto Rico, where
the company has established itself as the leading underwriter of
Managed Medicare HMO products for the senior market segment."
The rating action also reflects our concern about the near-term
viability of the Aveta's core line of business and the drag from
and strategic merit of Aveta's 2006 acquisition of Preferred
Medicare Choice, which has thus far significantly underperformed
relative to expectations.
Based on a review of financial results through Sept. 30, 2006, and
our current expectation for weak fourth-quarter 2006 results, we
now expect full-year 2006 financial results to be significantly
below our previous expectation of pro forma cash flow of
$137 million-$152 million.
The negative outlook reflects the potential for sustained business
and financial profile challenges for the remainder of 2007, which
could further pressure the company's credit profile. In addition,
we believe that the company is vulnerable to impairment charges in
connection with the write-down of intangibles, which partly derive
from the company's acquisition of PMC given that PMC's performance
is below expectations.
Overall, S&P expect operating performance to be marginal to weak
in 2007 because S&P continue to believe that it will take some
time for remediation initiatives (including management changes and
operational changes) to stabilize operations, particularly since
most of the company's core product benefits are locked-in until
January 2008.
If Aveta were to be exposed to worsening business development
trends, not be able to sustain its waiver arrangements, or not
improve its capital structure in 2007, the ratings could be
lowered by as much as one category to 'CC'.
BALLY TOTAL: NYSE to Suspend Common Stock Trading on May 2
----------------------------------------------------------
Bally Total Fitness was notified by NYSE Regulation Inc. that
trading in Bally common stock will be suspended prior to the
market open on May 2, 2007. The NYSE also will take action to
formally delist Bally's common stock. NYSE Regulation indicated
that its delisting determination was a result of Bally's failure
to satisfy the NYSE's continued listing standards, including
minimum market capitalization and minimum average share price
requirements.
Additionally, NYSE Regulation considered the company's failure to
timely file its 2006 Annual Report on Form 10-K and its stated
liquidity position. The company had been in communication with
NYSE Regulation regarding the company's noncompliance with
continued listing standards, but was unsuccessful in its efforts
to avoid suspension and potential delisting.
The company does not intend to appeal the NYSE's determination.
The company expects its common stock to be quoted on the Pink
Sheets electronic quotation service following suspension.
About Bally Total Fitness
Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(NYSE: BFT) -- http://www.Ballyfitness.com/-- is a commercial
operator of fitness centers in the U.S., with nearly 390
facilities and 30 franchises and joint ventures located in 29
states, Mexico, Canada, Korea, China and the Caribbean. Bally
also sells Bally-branded apparel, nutritional products, fitness-
related merchandise and its licensed portable exercise equipment
is sold in more than 10,000 retail outlets.
* * *
As reported in the Troubled Company Reporter-Asia on April 20,
2007, Moody's Investors Service downgraded all the credit ratings
of Bally Total Fitness Holding Corporation after its failure to
make the April 16, 2007 interest payment on $300 million principal
amount of senior subordinated notes.
BEAZER HOMES: Incurs $43.1 Million Net Loss in Qtr. Ended March 31
------------------------------------------------------------------
Beazer Homes USA Inc. reported net loss of $43.1 million in the
second quarter ended March 31, 2007, including charges related to
inventory impairments, impairments from joint ventures, and
abandonment of land option contracts totaling $86.9 million on a
pre-tax basis. For the same period in 2006, the company reported
a net income of $104.4 million.
Excluding losses from inventory impairments, impairments of
investments in joint ventures and abandonment of land option
contracts, adjusted net income was $11.2 million. For the second
quarter of the prior year, net income was $104.4 million.
The company generated total revenues of $826.3 million, compared
to $1.27 billion in the second quarter of the prior year.
At March 31, 2007, the company's balance sheet showed total assets
of $4.2 billion, total debt of $2.6 billion and shareholders'
equity of $1.6 billion.
Total home closings of 2,743 during the second quarter of fiscal
2007 were 36% below the prior fiscal year's second quarter record.
Net new home orders totaled 4,085 homes for the quarter, a decline
of 3% from the second quarter record of the prior fiscal year.
The cancellation rate for the second quarter was 29%, compared to
33% in the prior year's second quarter. The cancellation rate was
also lower sequentially from 43% in the first quarter of fiscal
2007.
About Beazer Homes
Headquartered in Atlanta, Beazer Homes USA Inc., (NYSE: BZH) --
http://www.beazer.com/-- is one of the country's ten largest
single-family homebuilders with operations in Arizona, California,
Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland,
Mississippi, Nevada, New Jersey, New Mexico, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas,
Virginia and West Virginia and also provides mortgage origination
and title services to its homebuyers.
* * *
As reported in the Troubled Company Reporter on April 11, 2007,
Fitch Ratings affirmed Beazer Homes USA Inc.'s ratings as: (i)
Issuer Default Rating 'BB+'; (ii) $1.56 billion senior unsecured
debt 'BB+'; (iii) $1 billion unsecured bank credit facility 'BB+'.
The Rating outlook has been revised to Negative from Stable.
CALPINE CORP: Inks Prelim Pact Resolving ULCI Bondholders' Claims
-----------------------------------------------------------------
Calpine Corporation disclosed in a regulatory filing with
the Securities and Exchange Commission that it has reached a
preliminary settlement with an ad hoc committee of holders of
the senior notes issued by Calpine Canada Energy Finance ULC, a
debtor under the Companies' Creditors Arrangement Act in Canada.
The settlement relates to claims asserted by the ULCI Bondholders
against Calpine Corp. on account of certain guarantees related to
certain defaulted bonds.
The settlement, among other things, provides that HSBC Bank
USA, National Association, as successor indenture trustee for
the ULCI Bonds, will have one allowed general unsecured claim
for $3,505,187,751, plus all accrued and unpaid postpetition
interests and reasonable fees, costs and expenses.
The settlement, according to Charles B. Clark, Jr., Calpine
Corp.'s senior vice president and chief accounting officer, is
still subject to definitive documentation and approval of the
U.S. Bankruptcy Court for the Southern District of New York.
A copy of the ULCI Bondholders settlement is available for free
at http://researcharchives.com/t/s?1e16
The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 47; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or
215/945-7000).
Calpine Corp. has until June 20, 2007, to file a plan, and until
Aug. 20, 2007, to solicit acceptances of that plan.
CALPINE CORPORATION: Seeks Court Okay to Repay Beal Loan
--------------------------------------------------------
Calpine Corporation and its debtor-affiliates seek permission from
the United States Bankruptcy Court for the Southern District of
New York to repay the Beal Loan as contemplated under the DIP
Facility and DIP Order to increase the long-term profitability of
the Blue Spruce Project.
Blue Spruce LLC, non-debtor and indirect subsidiary of Calpine
Corporation, owns and operates Blue Spruce Energy Center, a 285-
megawatt, natural gas-fired power plant located in Aurora,
Colorado.
Currently, Blue Spruce LLC has approximately $63,000,000,
including prepayment premium, accrued interest, and fees and
expenses, outstanding under an amortizing term loan with Beal
Bank, maturing in May 2018. Blue Spruce LLC's assets serve as
the only source of security for the Beal Loan.
The Court recently authorized the Debtors to obtain a
$5,000,000,000 DIP financing facility, which, subject to the
consent of the Debtors' official committees, may be used to repay
certain prepetition, secured debt of project level subsidiaries,
including Blue Spruce LLC.
The Debtors and Blue Spruce LLC will recognize significant
interest savings after repaying the Beal Loan, David R. Seligman,
Esq., at Kirkland & Ellis LLP, in New York, tells the Court.
The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 47; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or
215/945-7000).
Calpine Corp. has until June 20, 2007, to file a plan, and until
Aug. 20, 2007, to solicit acceptances of that plan.
CHAPARRAL STEEL: S&P Revises Outlook to Developing from Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Midlothian Texas-based Chaparral Steel Co. to developing from
stable and affirmed all of its other ratings, including its 'B+'
corporate credit rating. The developing outlook means ratings can
be either raised, lowered, or affirmed.
"The outlook revision follows the company's announcement that it
has engaged the services of Goldman, Sachs & Co. to assist in its
review of strategic opportunities to maximize shareholder value,"
said Standard & Poor's credit analyst Marie Shmaruk.
Chaparral is the second-largest structural steel producer in the
U.S., operating two minimills.
"The results of the company's review of strategic opportunities to
enhance shareholder value will be the primary influence on the
direction of possible ratings movement," Ms. Shmaruk said. "We
could revise the outlook to positive, raise our ratings, or affirm
them if Chaparral is acquired or merges with a stronger company or
if it makes an acquisition that provides operating diversity
without significantly increasing leverage. We could revise the
rating to negative, or lower our ratings, if Chaparral chooses a
strategic alternative that would entail a material weakening of
its credit profile, specifically a material increase in leverage,
without improving and expanding its product offerings. If the
company elects to maintain its current status or takes an action
that does not materially change its business and financial
profile, we could affirm the ratings."
CWABS ASSET: DBRS Lowers Ratings on Two Series 2006-SPS1 Certs.
---------------------------------------------------------------
Dominion Bond Rating Service has downgraded three Classes from
CWABS Asset-Backed Certificates Trust 2006-SPS1:
* $5,125,000 Asset-Backed Certificates, Series 2006-SPS1, Class
M-8 to BBB (low) from BBB (high)
* $4,000,000 Asset-Backed Certificates, Series 2006-SPS1, Class
M-9 to BB (low) from BBB
* $4,250,000 Asset-Backed Certificates, Series 2006-SPS1, Class
B to B (low) from BB (high)
The above downgrades are the result of the high level of losses
as well as the increased 90+ days delinquency pipeline relative
to the available level of credit enhancement. The mortgage loans
consist of fixed-rate mortgage loans that are secured by second
liens on residential properties.
CYTODYN OF NEW MEXICO: Case Summary & 5 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Cytodyn of New Mexico, Inc.
227 East Palace Avenue, Suite M
Santa Fe, NM 87501
Bankruptcy Case No.: 07-11008
Type of Business: The Debtor (Pink Sheets: CYDY) is a
pharmaceutical company.
See http://www.cytodyn.com/
Chapter 11 Petition Date: April 26, 2007
Court: District of New Mexico (Albuquerque)
Judge: James S. Starzynski
Debtor's Counsel: William F. Davis, Esq.
William F. Davis & Associates, P.C.
6709 Academy Road Northeast, Suite A
Albuquerque, New Mexico 87109
Tel: (505) 243-6129
Total Assets: $5,941,500
Total Debts: $17,904,739
Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Amerimmune, Inc. $10,000,000
2325-A Renaissance Drive
Las Vegas, NV 89119
Amerimmune Pharmaceuticals Inc. $10,000,000
2325-A Renaissance Drive
Las Vegas, NV 89119
Maya LLC $5,000,000
2325-A Renaissance Drive
Las Vegas, NV 89119
Allen D. Allen Rent $4,998
Corinne Allen Wages $3,000
DAIMLERCHRYSLER AG: Chrysler Sale May Sabotage Marysville Deal
--------------------------------------------------------------
The Chrysler Group's US$700 million investment in Marysville and
the 1,000 jobs that come with it may unravel if DaimlerChrysler
AG's plan to sell the unit pushes through, Jim Bloch writes for
The Voice.
The TCR-Europe reported on April 19 that the Chrysler Group
will boost the Michigan economy with an investment of
US$1.78 billion, much of it to start a multi-product
"Powertrain Offensive." The initiative will consist of:
* US$730 million for a new plant in Trenton, Mich., to
produce the "Phoenix" family of V-6 engines;
* US$700 million in Marysville, Mich., to build a new axle
plant;
* US$300 million in the Sterling Heights (Mich.) Assembly
Plant (SHAP) to expand its paint shop; and
* US$50 million for retooling of Warren Truck Assembly Plant
and Warren Stamping Plant for future product.
The new axle plant in Marysville will incorporate engineering and
development for the creation of a new family of axles that provide
better fuel economy. In addition, the common axle will allow the
company to consolidate the number of axles for better economies of
scale.
The city of Marysville is planning to buy the property for US$3
million, annex it from the township, and then give the land to
Chrysler, The Voice relates. However, the deal to build the axle
plant in Marysville could fall through in the event of Chrysler's
sale. The agreement includes a hold-harmless clause, under which
the city would get its money back for the property and any other
ancillary expenses should something go haywire.
The Economic Development Alliance of St. Clair County, which
played a key role in putting the deal together, currently controls
the option on the farmland, The Voice states. The city hopes to
regain its investment through Chrysler's taxes in the next three
to five years.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA:
DCX) -- http://www.daimlerchrysler.com/-- develops, manufactures,
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.
The company's worldwide operations are located in: Canada,
Mexico, United States, Argentina, Brazil, Venezuela, China,
India, Indonesia, Japan, Thailand, Vietnam, and Australia.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler, Jeep,
and Dodge brand names. It also sells parts and accessories under
the MOPAR brand.
The Chrysler Group is facing a difficult market environment in the
United States with excess inventory, non-competitive legacy costs
for employees and retirees, continuing high fuel prices and a
stronger shift in demand toward smaller vehicles. At the same
time, key competitors have further increased margin and volume
pressures -- particularly on light trucks -- by making significant
price concessions. In addition, increased interest rates caused
higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and cut
costs in the short term are being examined at all stages of the
value chain, in addition to structural changes being reviewed as
well.
DELTA AIR: S&P Says Plan Confirmation Won't Affect D Rating
-----------------------------------------------------------
The bankruptcy court overseeing Delta Air Lines Inc. (rated 'D')
Chapter 11 proceedings has confirmed the airline's plan of
reorganization, paving the way for emergence today, April 30.
Standard & Poor's Ratings Services said the news does not affect
its 'D' corporate credit rating on Delta, which is defined by the
company's bankruptcy status.
S&P announced on March 30, 2007, that they expect to assign a 'B'
corporate credit rating, with a stable outlook, to Delta when it
emerges from bankruptcy. In addition, the CreditWatch status of
ratings on enhanced equipment trust certificates, excepting 'AAA'
rated, bond-insured certificates, was revised to positive from
developing on March 30, 2007. That CreditWatch status is
unaffected by the plan confirmation. The ratings on EETCs will be
reviewed and may be raised upon Delta's emergence from Chapter 11.
"Delta's relatively rapid and successful reorganization should
leave the airline with lower operating costs, improving revenue
generation, and a reduced debt load," said Standard & Poor's
credit analyst Philip Baggaley. Still, the airline's credit
profile and its anticipated 'B' corporate credit rating continue
to reflect also risks associated with participation in the price-
competitive, cyclical, and capital-intensive airline industry; on
below-average, albeit improving, revenue generation; and on
significant intermediate-term debt and capital spending
commitments.
Delta, the third-largest U.S. airline, entered Chapter 11
bankruptcy protection in September 2005, following the spike in
jet fuel prices caused by the Gulf hurricanes. Delta announced
April 16, 2007, that unsecured creditors had voted in favor of its
proposed plan of reorganization.
DESERT STAR: Case Summary & Three Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Desert Star Communities II L.P.
7 Upper Newport Plaza, Suite 100
Newport Beach, CA 92663
Bankruptcy Case No.: 07-11209
Chapter 11 Petition Date: April 26, 2007
Court: Central District Of California (Santa Ana)
Judge: Robert N. Kwan
Debtor's Counsel: Eugene R. Salmonsen, Esq.
3415 South Sepulveda Block, Suite 640
Los Angeles, CA 90034
Tel: (310) 313-1210
Total Assets: $3,000,420
Total Debts: $2,436,575
Debtor's Three Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Heritage Gardens Properties Professional $180,000
c/o Stuart Reed
303 Twin Dolphin Drive Services
Suite 600
Redwood City, CA 94065
Tel: (925) 719-5310
Heil Construction, Inc. Professional $20,000
c/o Doug Heil Services
701 South Myrtle Avenue
Monrovia, CA 91016
Tel: (626) 303-7141
Precision Civil Professional $18,500
Engineering, Inc. Services
c/o Ed Dunkel
653 West Fallbrook, Suite 101
Fresno, CA 93711
Tel: (559) 449-4500
EAGLE BROADBAND: February 28 Balance Sheet Upside-Down by $134,000
------------------------------------------------------------------
Eagle Broadband Inc. reported a net loss of $4.3 million on total
sales of $870,000 for the second quarter ended Feb. 28, 2007,
compared with a net loss of $4.1 million on total sales of
$770,000 for the same period ended Feb. 28, 2006.
Loss from operations decreased to $2.4 million, compared to loss
from operations of $3.4 million four quarters ago, mainly
attributable to the implementation of initiatives to reduce
operating expenses and improve gross margin performance by
focusing primarily on the company's IPTV solutions division and IT
services division.
Results of operations for the current quarter includes the
recognition of $864,000 in derivative expense, compared to $20,000
in derivative income in the same quarter of last year. In
addition, interest expense for the current quarter was $720,000
higher than the same period of the prior fiscal year, which
reflects the effect of the $5.5 million promissory note entered
into with Dutchess Private Equities Fund in July 2006 and the
$1.3 million note entered into with Dutchess in February 2007.
At Feb. 28, 2007, the company's balance sheet showed $19.1 million
in total assets and $19.3 million in total liabilities, resulting
in a $134,000 total stockholders' deficit.
The company's balance sheet at Feb. 28, 2007, also showed strained
liquidity with $2.1 million in total current assets available to
pay $16 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Feb. 28, 2007, are available for
free at http://researcharchives.com/t/s?1df4
Going Concern Doubt
As reported in the Troubled Company Reporter on Dec. 27, 2006,
LBB & Associates Ltd. LLP in Houston, Texas, expressed substantial
doubt about Eagle Broadband Inc.'s ability to continue as a going
concern after auditing the company's financial statements for the
fiscal years ended Aug. 31, 2006, and 2005. The auditing firm
pointed to the company's negative working capital, losses in 2005
and 2006, and need for additional financing necessary to support
its working capital requirements.
About Eagle Broadband
Eagle Broadband Inc. (OTC BB: EAGB) -- http://eaglebroadband.com/
-- is a technology company that develops and delivers products and
services in three core business segments: IPTV -- Eagle
Broadband's IPTVComplete(TM) provides direct access to more than
250 channels of high-demand programming from popular entertainment
providers, often using Eagle's high-definition, set-top boxes.
SatMAX(R) -- Eagle Broadband's SatMAX provides indoor/outdoor
communications utilizing the global Iridium-based satellite
communications system. It offers both fixed and mobile solutions,
including the emergency first responder SatMAX Alpha "SatMAX-in-a-
suitcase" technology.
IT Services - Eagle Broadband's IT Services Group is a full-
service integrator offering a complete range of network technology
products including VoIP, remote network management, network
implementation services and IT project management services.
ENCYSIVE PHARMA: Losses Spur KPMG's Going Concern Doubt Opinion
---------------------------------------------------------------
KPMG LLP in Houston, Texas, raised substantial doubt on Encysive
Pharmaceuticals Inc.'s ability to continue as a going concern
after it audited the company's consolidated financial statements
for the years ended Dec. 31, 2006 and Dec. 31, 2005. The auditing
firm pointed to the company's recurring losses from operations and
net capital deficiency.
At Dec. 31, 2006, the company's balance sheet showed total assets
of $63.1 million and total liabilities of $156.8 million,
resulting in a $93.7 million stockholders' deficit.
For the fourth quarter of 2006, the company reported a net loss
of approximately $25.8 million, compared to a net loss of
approximately $19.4 million for the same period last year.
Revenues in the fourth quarter of 2006 were $5.4 million, as
compared to $5.6 million for the fourth quarter of 2005.
Cash and cash equivalents at Dec. 31, 2006 were $43.8 million,
compared to $49.9 million at Sept. 30, 2006 and $127.9 million at
Dec. 31, 2005. The 2006 year-end cash balance included gross
proceeds of $18 million raised through the sale of the company's
common stock, utilizing the company's equity line of financing
with Azimuth Opportunity Ltd.
Revenues in 2006 were approximately $19 million, compared to
$14.0 million in 2005.
Net loss for the year ended Dec. 31, 2006 was approximately
$109.3 million, compared to a net loss of $74.9 million, for 2005.
Company Highlights
In February 2007, Encysive's newly formed wholly owned subsidiary,
Argatroban Royalty Sub LLC, placed $60 million in aggregate
principal amount of non-convertible notes in a private placement
to institutional investors. The Argatroban Notes are secured by
royalties to be paid to Royalty Sub from sales of Argatroban by
GSK and by a pledge by Encysive of the stock of Royalty Sub.
Net proceeds from the financing were approximately $56 million, of
which $10 million was withheld pending confirmation of treaty
relief from U.K. tax withholding obligations.
Encysive expects to use the net proceeds for general corporate
purposes, including the development of pipeline products and to
support sales and marketing of Thelin(R) in the European Union and
maintaining commercial readiness in the United States.
In October 2006, Encysive entered into common stock equity
financing line with Azimuth pursuant to which Encysive may sell to
Azimuth up to $75 million of common stock or 11,853,012 shares
of common stock, whichever comes first. During the 18-month term
of the equity line, Encysive may sell, at its sole discretion,
registered shares of its common stock to Azimuth at a
predetermined discount to the market price, subject to certain
conditions. Encysive made two drawdowns, issuing an aggregate of
3,086,351 shares of common stock, for total gross proceeds of
$18.0 million in 2006.
Encysive intends to use the net proceeds of this equity line for
general corporate purposes, including for developing and
commercializing the company's products.
"Encysive was able to strengthen its balance sheet through the
recently announced Argatroban royalty monetization financing, and
we have the opportunity to raise additional funds through the sale
of common stock utilizing our equity line of financing," Gordon H.
Busenbark, Chief Financial Officer of Encysive, commented.
"Coupled with strategic expense management, these financings will
support the continued commercial launch of Thelin(R) in the
European Union, while maintaining our commercial readiness in the
United States, in preparation for the June 15 PDUFA date."
As of March 1, 2007, after receipt of net proceeds from the sale
by Royalty Sub of the Argatroban Notes, Encysive had cash and cash
equivalents of approximately $71.9 million.
About Encysive Pharmaceuticals
Based in Houston, Texas, Encysive Pharmaceuticals Inc.
(Nasdaq:ENCY) -- http://www.encysive.com/-- is a
biopharmaceutical company engaged in the discovery, development
and commercialization of novel, synthetic, small molecule
compounds to address unmet medical needs. The company's research
and development programs are predominantly focused on the
treatment and prevention of interrelated diseases of the vascular
endothelium and exploit our expertise in the area of the
intravascular inflammatory process, referred to as the
inflammatory cascade, and vascular diseases.
EXIDE TECH: Inks $495 Million Credit Facility Deal With Lenders
---------------------------------------------------------------
Exide Technologies Inc. completed a commitment letter with
Deutsche Bank AG New York Branch, Deutsche Bank Securities,
Inc., Credit Suisse Cayman Islands Branch, Credit Suisse
Securities (USA) LLC, Wachovia Bank, National Association and
Wachovia Capital Markets, LLC, to provide senior credit facilities
aggregating $495 million, consisting of a $295 million secured
term loan facility, and up to a $200 million asset-based
revolving credit facility, subject to availability.
The company said that these facilities would replace the its
existing senior credit agreement.
The company currently anticipates the facilities will close and
fund in May 2007.
About Exide Technologies
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products. The company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represented the Debtors in their successful restructuring.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts.
EXIDE TECH: Increased Liquidity Cues S&P to Lift Rating to CCC+
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Exide Technologies to 'CCC+' from 'CCC' because of the
company's improved operating results and increased liquidity.
At the same time, the ratings were removed from CreditWatch with
positive implications where they were placed on April 18, 2007.
The outlook is positive. The Alpharetta, Georgia-based
manufacturer of automotive and industrial batteries has adjusted
debt of about $1 billion.
In addition, Standard & Poor's assigned its bank loan and recovery
ratings to Exide's proposed $295 million senior secured term loan
facilities, which consist of a $130 million U.S. term loan and a
$165 million European term loan. The 'B' bank loan rating (one
notch higher than the corporate credit rating) and a recovery
rating of '1' indicate our expectation for full recovery of
principal in the event of default or bankruptcy.
Proceeds from the term loan, as well as an unrated proposed
$200 million asset-based lending revolving credit facility, would
be used to replace Exide's existing senior secured term loans and
revolving credit facilities. S&P affirmed our ratings on Exide's
existing senior secured credit facilities and expect to withdraw
those ratings upon closing of the proposed refinancing, expected
in May.
Standard & Poor's also raised its debt issue ratings on Exide's
$290 million secured second-lien notes and $60 million floating
rate convertible notes to 'CCC-' from 'CC' and assigned a recovery
rating of '4' to the secured second-lien notes, indicating our
expectation for marginal (25%-50%) recovery of principal in a
default.
EXIDE TECH: Moody's Rates $259 Million Senior Term Loan at B1
-------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the new senior
secured bank facility of Exide Technologies, Inc.
In a related action, Moody's affirmed the company's Corporate
Family Rating at Caa1, and has changed the outlook to stable from
negative. Exide intends to use the proceeds from the new senior
secured term loan and a new senior secured ABL revolving credit
facility to repay the existing senior secured bank credit
facilities and pay related expenses. The ratings continue to
reflect weak credit metrics, and cyclical industry conditions.
The stable outlook reflects the company's progress in applying
selective customer price increases and improved operational
efficiencies. The company's recent performance further indicates
that price increases have taken hold and should further improve
performance and free cash flow in the near term. These actions
should result in improvement in DEBT/EBITDA (using Moodys's
standard adjustments) from approximately 8.3x as of the LTM period
ending 12/30/06 and improved interest coverage. In addition to
approximately $64 million of cash on hand at 12/31/2006, the
company's bond indentures will permit increased availability under
the asset based revolver with further improvement in EBITDA
performance.
Ratings assigned:
Exide Technologies, Inc. and its foreign subsidiary Exide Global
Holdings Netherlands CV:
* B1 (LGD2, 15%) to the $200 million asset based revolving
credit facility;
* B1 (LGD2, 15%) to the $130 million senior secured term loan
at Exide Technologies, Inc.;
* B1 (LGD2, 15%) to the $165 million senior secured term loan
at Exide Global Holdings Netherlands CV.;
Ratings affirmed:
Exide Technologies, Inc.
* Caa1 Corporate Family Rating;
* Caa1 Probability of Default Rating;
* Caa1 (LGD3, 45%) rating of $290 million of senior secured
junior-lien notes due March 2013;
These ratings will be withdrawn upon their refinancing:
Exide Technologies, Inc. and its foreign subsidiary Exide Global
Holdings Netherlands CV:
* B1 (LGD2, 17%) ratings of approximately $265 million
equivalent of remaining guaranteed first-lien senior secured
credit facilities
Exide Technologies, Inc.'s existing $60 million floating rate
convertible subordinated note due September 2013 are not rated by
Moody's.
Exide, headquartered in Alpharetta, GA, is one of the largest
global manufacturers of lead acid batteries, with net sales
approximating $2.8 billion. The company manufactures and supplies
lead acid batteries for transportation and industrial applications
worldwide.
FREEPORT-MCMORAN: Earns $493 Million in First Qtr. Ended March 31
-----------------------------------------------------------------
Freeport-McMoRan Copper & Gold Inc. reported first-quarter 2007
net income of $492.9 million, as compared with net income of
$266.8 million for the first quarter of 2006. Revenues for the
three months ended March 31, 2007, were $2.3 billion, as compared
with $1.1 billion for the same period in the comparable year 2006.
The company's first-quarter 2007 financial and operating results
include its wholly owned subsidiary Phelps Dodge's results
following its acquisition by FCX on March 19, 2007.
Financial Position
At March 31, 2007, the company had $12 billion in debt, including
$10.4 billion in acquisition debt, $900 million in Phelps Dodge
debt assumed in the transaction and $700 million of previously
existing company debt. At March 31, 2007, the company had
consolidated cash of $3.1 billion and net cash available to the
parent company of $2.4 billion
As of March 31, 2007, the company listed total assets of
$41.4 billion, total liabilities of $15.4 billion, accrued
postretirement benefits and other liabilities of $1.2 billion,
deferred income taxes of $7 billion, minority interests of
$1.5 billion, and total stockholders' equity of $16.3 billion.
Purchase of Phelps Dodge
The company recorded its preliminary allocation of the
$25.9 billion purchase price to Phelps Dodge's assets and
liabilities based on estimated fair values as of March 19, 2007.
The company completed its acquisition of Phelps Dodge Corporation
on March 19, 2007, creating the world's largest publicly traded
copper company and a new industry leader with large, long-lived,
geographically diverse operations. Its first-quarter 2007
financial results include Phelps Dodge's operations beginning
March 20, 2007.
James R. Moffett, chairman of the Board, and Richard C. Adkerson,
President and chief executive officer, said, "The acquisition of
Phelps Dodge is a significant event for our industry and our
company. FCX has been transformed into one of the largest North
American-based mining companies and the world's largest publicly
traded copper company. Our portfolio now includes significant
reserves and production facilities in North and South America, the
world-class Grasberg mining complex located in Indonesia, exciting
development projects including the Tenke Fungurume project in the
Democratic Republic of Congo and exploration projects in major
minerals districts around the world. This set of assets provides
us major opportunities to pursue the creation of shareholder
values and we will do so aggressively."
Financing Transaction
To finance its acquisition of Phelps Dodge, FCX used $2.5 billion
of cash and completed the borrowing of $10 billion under a new
$11.5 billion senior credit facility and the issuance of
$6 billion in senior notes.
To reduce debt, FCX completed equity transactions immediately
after closing of the acquisition and used the net proceeds to
reduce credit facility borrowings that include the sale of 47.15
million shares of common stock at $61.25 per share for net
proceeds of $2.8 billion and the sale of 28.75 million shares of
6_% mandatory convertible preferred stock with a liquidation
preference of $100 per share for net proceeds of $2.8 billion.
Senior Notes Redemption
The company announced that it would redeem its 10-1/8% Senior
Notes, with a $272.4 million balance, on May 4, 2007, for
$286.2 million and has prepaid an additional $500 million of term
debt during April 2007. The company will record charges totaling
about $24.3 million in the second quarter of 2007 related to the
premiums paid and the accelerated recognition of deferred
financing costs associated with these debt reductions.
About Freeport-McMoRan
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) --
http://www.fcx.com/-- an international mining company with
headquarters in Phoenix, Arizona. FCX operates assets with
significant proven and probable reserves of copper, gold and
molybdenum. FCX has a portfolio of operating, expansion and
growth projects in the copper industry. The Grasberg mining
complex, the world's largest copper and gold mine in terms of
reserves, is the company's key asset. FCX also operates
significant mining operations in North and South America and is
developing the potential Tenke Fungurume project in the Democratic
Republic of Congo.
* * *
As reported in the Troubled Company Reporter on April 9, 2007,
Standard & Poor's Ratings Services raised its corporate credit
rating on 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. The outlook was changed to positive from stable.
GENERAL MOTORS: Halts Vehicle Development Programs in Two Plants
----------------------------------------------------------------
General Motors Corp. suspended development activities on vehicles
at its Fairfax, Kan., and Lordstown, Ohio, plants after the United
Auto Workers union backed out of negotiations on cost cuts at the
facilities, John D. Stoll and Jeffrey McCracken of The Wall Street
Journal report.
According to WSJ, the suspended programs include the Epsilon
midsize-car program and the Delta compact-car program.
Sharon Terlep of The Detroit News relates that the stoppage came
after the UAW ordered its local negotiating teams to stop
bargaining with the company on work rules designed to make the
factories more competitive specially with the automaker's Japanese
rivals.
"The management and union leadership at both Lordstown and Fairfax
are in discussions about improving the competitiveness of both
plants and putting both plants in a better position to secure
future products," Detroit News cited GM spokesman Dan Flores as
saying.
CEO Takes the Challenge to Beat Toyota's Sales
In response to Toyota Motor Corp.'s disclosure early last week
that it topped GM in quarterly sales for the first time, GM
Chairman and Chief Executive Rick Wagoner vowed to "fight hard for
every sale," the Associated Press said.
AP cited Mr. Wagoner as saying that GM's business strategies
around the globe were working and would help the auto manufacturer
succeed.
"We still have the majority of the year in front of us, and we
will fight hard for every sale -- all the while staying focused on
our long-term goals as a global, growing company," Mr. Wagoner
said in an email obtained by AP.
Toyota said it sold 2.35 million vehicles world-wide in the
first quarter of 2007, AP said, citing preliminary figures.
Early this month, GM said in a press statement that for the first
quarter of 2007, the company delivered 909,094 vehicles, a decline
of 5.6%, driven by reductions of almost 60,000 daily rental
vehicle sales. GM's retail sales for the first quarter of 2007
were up 0.5%. The reductions in fleet sales have resulted in a
significant improvement in the retail/fleet mix, the company
explained.
In addition, GM Latin America, Africa and Middle East region set a
new first quarter sales record in 2007, selling over 269,000
vehicles, up approximately 39,000 units over the same period last
year. GM said its quarterly market share in the region increased
0.2% to 16.3%.
About General Motors Corp.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader for 76 years. GM currently employs about 280,000 people
around the world. GM manufactures its cars and trucks in 33
countries. In 2006, nearly 9.1 million GM cars and trucks were
sold globally under these brands: Buick, Cadillac, Chevrolet, GMC,
GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with negative implications, where
they were placed March 29, 2006. S&P said the outlook is
negative.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
$1.5 billion secured term loan of General Motors Corp.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
$1.5 billion secured term loan of General Motors Corp.
GENTEK INC: Posts $12 Mil. Net Loss in Fourth Qtr. Ended Dec. 31
----------------------------------------------------------------
GenTek Inc. incurred a net loss of $12.5 million for the fourth
quarter ended Dec. 31, 2006, as compared with a net loss of
$2.1 million for the fourth quarter of the previous year. For
the fourth quarter of 2006, GenTek had revenues totaling
$151.4 million and operating profit of $8.8 million, after a
$1.4 million restructuring and impairment charge. This
compares to revenues of $137.2 million and operating profit of
$11.1 million in the prior-year period, after restructuring and
impairment charges of $700,000. The company recorded income from
continuing operations of $1.6 million, as compared with income
from continuing operations of $1.9 million in the fourth quarter
of 2005.
2006 Annual Results
For the year ended Dec. 31, 2006, GenTek had a net loss of
$2.1 million, as compared with a net loss of $800,000 in the
comparable prior-year period.
The company had revenues totaling $611.4 million and operating
profit of $53.7 million, after restructuring and impairment
charges and pension curtailment gains of $2.4 million. This
compares to revenues of $556.5 million and operating profit of
$39.2 million after restructuring, impairment, and pension
settlement charges of $7.6 million in 2005. The increase in
revenues in 2006 is attributable to higher prices and strong
volumes in the performance chemicals segment as well as the
impact of the acquisitions of Precision Engine Products, GACMA
and Repauno, which were completed during 2006. Year over year
operating profit improvement has been driven primarily by
improvements in performance chemicals and reductions in selling,
general and administrative expenses.
As of Dec. 31, 2006, the company listed $730.2 million in total
assets and $634.3 million in total liabilities, resulting in a
$95.9 million in total stockholders' equity. The company had
$5.7 million of cash and $345.3 million of debt outstanding as
of Dec. 31, 2006, which included $10 million outstanding under
its revolving credit facility.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1e05
"We are pleased with both our full year operating results and
continued strategic development through acquisitions in 2006.
Despite lower demand in the fourth quarter from automotive in our
manufacturing segment, we finished 2006 well positioned for future
improvements in our core chemical and valve train businesses,"
said William E. Redmond Jr., GenTek's president and chief
executive officer.
About GenTek Inc.
GenTek Inc. (NasdaqGS: GETI) -- http://www.gentek-global.com/--
provides specialty inorganic chemical products and services for
treating water and wastewater, petroleum refining, and the
manufacture of personal-care products, valve-train systems and
components for automotive engines and wire harnesses for large
home appliance and automotive suppliers.
* * *
As reported in the Troubled Company Reporter on April 19, 2007,
Moody's Investors Service upgraded GenTek Inc.'s corporate family
rating to B1 from B2, the company's $269 million first lien term
loan to Ba3 from B1, the company's $60 million first lien
revolving credit facility to Ba3 from B1, and GenTek's speculative
grade liquidity rating to SGL-2 from SGL-3. These actions
conclude the review commenced on Feb. 15, 2007. The ratings
outlook is positive.
GEORGIA GULF: Moody's Cuts Rating to B1 and Says Outlook is Stable
------------------------------------------------------------------
Moody's Investors Service lowered the corporate family rating on
Georgia Gulf Corporation to B1 from Ba3 and assigned a stable
outlook.
Moody's also downgraded the company's senior unsecured and
subordinated notes by one notch, but confirmed the Ba2 ratings on
the company senior secured credit facilities.
The downgrades reflect the greater than anticipated negative
impact of the downturn in the US housing market on the company's
financial performance in the fourth quarter of 2006, the
expectation that 2007 results will be materially weaker than
previously anticipated, and therefore the company will take longer
to restore financial metrics to levels that will adequately
support a Ba3 corporate family rating. The continuing decline in
housing starts (March 2007 housing starts were 23% below prior
year figures); elevated new home inventories, which remain
unusually high at approximately 8 months; and the significant
slowdown in renovation and remodeling activity in the US will
likely cause PVC margins to be weaker for much of 2007 and
revenues in the recently acquired businesses (Royal Group
Technologies Ltd or RGT) to decline significantly from prior year
levels.
While GGC has reduced debt faster than anticipated due to assets
sales and sale and lease back transactions, settled most of the
shareholder and regulatory problems facing RGT for much less than
anticipated, and believes that it can extract greater synergies
from the acquired assets, the decline in volumes and margins in
its key markets will have a much greater impact on the company's
credit profile over the next year. Additionally, new US PVC
capacity coming on-stream in late 2007 and 2008 will likely keep
PVC margins weak over the next two to three years.
"Management has done a good job of reducing debt since the
acquisition, but US macro-economic factors will likely keep credit
metrics depressed over the next two years." said Moody's Senior
Vice President, John Rogers.
The affirmation of the ratings of the senior secured credit
facilities reflects the significant debt reduction in these
facilities since the acquisition last October; and the reduction
of the size of the secured debt relative to the remaining debt in
the capital structure. Hence, a reduction in loss given default
was large enough to offset the negative impact of the downgrade of
the CFR. The downgrade of the senior unsecured and subordinated
notes reflects the downgrade of the CFR, as well as a modest
increase in loss given default.
Ratings Downgraded:
Issuer: Georgia Gulf Corporation
* Corporate Family Rating, Downgraded to B1 from Ba3
* Probability of Default Rating, Downgraded to B1 from Ba3
* Sr. Unsecured notes due 2014 to B2 (LGD5 / 76%) from
B1 (LGD4 / 67%)
* 7.125% Gtd. Sr. Unsecured Notes due 12/15/2013 to
B2 (LGD5 / 76%) from B1 (LGD4 / 67%)
* Sr. Sub Notes due 2016 to B3 (LGD6 / 95%) from
B2 (LGD6 / 93%)
Ratings Confirmed:
Issuer: Georgia Gulf Corporation
* Gtd. Sr. Secured Revolving Credit Facility due 2011 Ba2
(LGD2 / 27%)
* Gtd. Sr. Secured Term Loan due 2013 Ba2 (LGD2 / 27%)
Georgia Gulf Corporation, headquartered in Atlanta, Georgia, is a
producer of commodity chemicals including chlorovinyls (chlorine,
caustic soda, vinyl chloride monomer, vinyl resins and vinyl
compounds), PVC fabricated products (pipe, siding, window
profiles, plastic lumber, etc.), and aromatics (cumene, phenol and
acetone). Including the recent acquisition of Royal Group
Technologies Ltd, the company generated revenues of $3.4 billion
on a pro forma basis for the year ending December 31, 2006.
GOODYEAR TIRE: March 31 Balance Sheet Upside-Down by $90 Million
----------------------------------------------------------------
The Goodyear Tire & Rubber Company's balance sheet at
March 31, 2007, showed $15.86 billion in total assets and
$15.95 billion in total liabilities, resulting in a $90 million
total stockholders' deficit.
The Goodyear Tire & Rubber Company reported a net loss of
$174 million for the first quarter ended March 31, 2007, compared
with net income of $74 million for the same period of fiscal 2006.
This net loss includes a loss from discontinued operations of
$64 million related to classifying the Engineered Products
business as "held for sale". This compares to income from
discontinued operations of $28 million in the fiscal 2006 period.
The company reported first quarter sales from continuing
operations of $4.50 billion, up 1 percent from first quarter sales
from continuing operations in fiscal 2006 of $4.46 billion despite
the impact of a fourth quarter strike last year in North America.
The improvement in global sales was driven by Goodyear's three
emerging market tire businesses, which were up 11 percent from
last year. Each of these businesses had record first quarter
sales. The sales improvement was also supported by a faster-than-
expected recovery from the United Steelworkers strike in North
America.
This growth offset a 10 percent decline in sales for Goodyear's
North American Tire business, which was impacted by the strike and
an exit from certain segments of the private label tire business,
which together reduced sales by about $200 million.
"Our first quarter represented a strong start to the year, with
revenue per tire up 8 percent. This reflected strong pricing and
product mix, which exceeded raw material cost increases in the
quarter. Our focus on speed and the pace of change at Goodyear is
having a meaningful impact," said Robert J. Keegan, chairman and
chief executive officer.
"Our recovery from the strike is going much better than expected.
We restored production faster than anticipated and weaker consumer
OE demand enabled us to sell more high-value-added tires into the
replacement market," he said.
As a result of improved profitability from increased replacement
market sales, the company has reduced its estimated impact of the
USW strike on North American Tire to between $100 million and
$120 million for the year. The previous estimate was $200 million
to $230 million.
Including an estimated $34 million impact from the strike,
Goodyear's first quarter segment operating income from continuing
operations was $226 million in 2007. This compares to income of
$282 million last year, which included $30 million in settlements
from suppliers.
For the 2007 first quarter, Goodyear reported a loss from
continuing operations of $110 million, compared to income from
continuing operations of $46 million during the 2006 period.
In addition to the strike, the loss in the 2007 quarter was also
impacted by after-tax curtailment charges of $64 million due to
salaried benefit plan changes and $31 million for
rationalizations, including accelerated depreciation related to
previously announced plant closures.
Improved pricing and product mix of approximately $165 million
more than offset increased raw material costs of approximately
$120 million.
Income from continuing operations in the 2006 quarter benefited
from after-tax items including supplier settlements of
$26 million, a pension plan change of $13 million and a legal
settlement of $10 million. Negatively impacting the quarter was
an after-tax charge of $29 million for rationalizations, including
accelerated depreciation and asset write-offs.
Discontinued Operation
As a result of its agreement on March 23, 2007 to sell
substantially all of its Engineered Products business, Goodyear
now reports these results as a discontinued operation.
Sales from discontinued operations in the first quarter of 2007
totaled $383 million, down from $394 million the previous year.
Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2007, are available for
free at http://researcharchives.com/t/s?1e12
Liquidity and Capital Resources
At March 31, 2007, the company had $2.08 billion in cash and cash
equivalents as well as $1.72 billion of unused availability under
its various credit agreements, compared to $3.86 billion and
$533 million at Dec. 31, 2006. Cash and cash equivalents
decreased primarily due to repayments on the amounts borrowed
under the $1.0 billion revolving portion of the $1.5 billion First
Lien Credit Facility, the 8.5% Notes due 2007 and the German
revolving credit facility due 2010. Cash and cash equivalents do
not include restricted cash.
Net cash used in operating activities from continuing operations
in the first quarter of 2007 of $393 million decreased from
$315 million in the first quarter of 2006. The decrease was due
primarily to lower operating results offset by improved working
capital.
Net cash used in investing activities from continuing operations
was $55 million during the first quarter of 2007, compared to
$144 million in the first quarter of 2006. Capital expenditures
were $97 million and $111 million in the first quarter of 2007 and
2006, respectively. The change in cash used in investing
activities was primarily the result of the 2006 acquisition of the
remaining outstanding shares of South Pacific Tyres Ltd.
Net cash used in financing activities from continuing operations
was $1.31 billion in the first quarter of 2007 compared to
$150 million in the first quarter of 2006. The increase in cash
used was due primarily to the payments of $873 million on the U.S.
revolving credit facility, $300 million on the 8.5% Notes due
2007, and approximately $200 million repayment of the German
revolving credit facility due 2010.
About Goodyear Tire
Headquartered in Akron, Ohio, The Goodyear Tire and Rubber Company
(NYSE:GT) -- http://www.goodyear.com/-- manufactures tires,
engineered rubber products and chemicals in more than 90
facilities in 28 countries around the world. Goodyear employs more
than 75,000 people worldwide.
* * *
As reported in the Troubled Company Reporter on April 10, 2007,
Fitch Ratings has affirmed ratings for The Goodyear Tire & Rubber
Company, including 'B' Issuer Default Rating; 'BB/RR1' rating of
its $1.5 billion first-lien credit facility; 'BB/RR1' rating of
its $1.2 billion second-lien term loan; 'B/RR4' rating of its
$300 million third-lien term loan; 'B/RR4' rating of its
$650 million third-lien senior secured notes; and 'CCC+/RR6'
Senior unsecured debt rating.
GRUGA USA: Involuntary Chapter 11 Case Summary
----------------------------------------------
Alleged Debtor: Gruga USA
dba Novimex Fashion Ltd.
5463 Second Street
Irwindale, CA 91706
Case Number: 07-13388
Type of Business: The Debtor manufactures executive chairs.
Involuntary Petition Date: April 26, 2007
Court: Central District Of California (Los Angeles)
Judge: Alan M. Ahart
Petitioners' Counsel: Robert B. Parsons, Esq.
3424 Carson Street, Suite 500
Torrance, CA 90503
Tel: (310) 214-1477
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Henderson Insurance Insurance Services $93,343
Agency Inc.
6548 Bright Avenue
Whittier, CA 90601
FXG International Services $17,564
11099 South LaCienaga
Los Angeles, CA 90045
Scott Torrance Services $12,824
7909 West 81st Street
Playa del Rey, CA 90293
HARMAN INT'L: $8 Billion Offer Cues S&P to Cut BBB+ Rating to BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Washington, D.C.-based audio equipment manufacturer
Harman International Industries Inc. to 'BB-' from 'BBB+' and
placed the rating on CreditWatch with negative implications. The
rating action follows the announcement that Harman is to be
acquired by KKR and GS Capital Partners in a transaction valued at
$8 billion.
The 'BBB+' rating on Harman's $150 million 7.32% senior notes was
affirmed, given that this debt maturity of July 1, 2007 precedes
the expected closing of the proposed LBO transaction. The balance
outstanding of these notes was $17 million at March 31, 2007.
The downgrade reflects S&P's expectation that the transaction will
be funded largely with debt, significantly degrading Harman's
credit measures, financial policy, and liquidity. Notwithstanding
the company's satisfactory business profile, S&P do not expect
that Harman's post-LBO financial profile would support an
investment-grade rating. Harman has a strong market position,
good growth prospects, and has historically generated solid free
cash flow.
Standard & Poor's expects to resolve the CreditWatch listing after
meeting with management and reviewing the company's financial
prospects and policies for the future.
HAYES LEMMERZ: Plans $150 Million of Senior Notes Offering
----------------------------------------------------------
Hayes Lemmerz International Inc. plans to offer approximately
$150 million, or the equivalent amount denominated in euros, of
senior unsecured notes. The notes are expected to be issued by a
European subsidiary. The issuance of the notes is subject to
market and other customary conditions.
The notes will be 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
and will not be registered under the Securities Act and may not be
offered or sold in the United States without registration or an
applicable exemption from the registration requirements.
Additionally, Hayes Lemmerz has launched the syndication of the
new senior secured credit facilities in an amount of up to
$495 million.
The proceeds of the new credit facilities will be used to
refinance the company's obligations under its Amended and Restated
Credit Agreement dated April 11, 2005. The refinancing of the
Amended and Restated Credit Agreement and the placement of a
portion of the company's debt outside the United States are
conditions to the obligation of Deutsche Bank Securities Inc. and
SPCP Group LLC, an affiliate of Silver Point Capital L.P., to
backstop the Rights Offering.
Additional proceeds will be used to replace existing letters of
credit and to provide for working capital and other general
corporate purposes, and to pay the fees and expenses associated
with the new credit facilities.
Bank meetings are scheduled Wednesday, May 2, 2007, in
London, England and Thursday, May 3, 2007, in New York, NY.
Citigroup Global Markets Inc. and Deutsche Bank AG, New
York Branch and Deutsche Bank Securities Inc. will act as joint
arrangers and joint book-runners for the syndication of
the new credit facilities.
About Hayes Lemmerz International Inc.
Hayes Lemmerz International Inc. (Nasdaq: HAYZ) --
http://www.hayes-lemmerz.com/-- is a global supplier of
automotive and commercial highway wheels, brakes and powertrain
components. The company has 30 facilities and approximately 8,500
employees worldwide.
* * *
As reported in the Troubled Company Reporter on March 20, 2007,
Standard & Poor's Ratings Services placed its 'B-' corporate
credit rating and related issue ratings on Hayes Lemmerz
International Inc. on CreditWatch with positive implications,
After the company's disclosure that it plans to repurchase
its senior unsecured debt with proceeds from an equity rights
offering. Hayes' recovery ratings were not placed on CreditWatch.
HELIOS FINANCE: Moody's Rates $19.9MM Class B-4 notes at (P)B3
--------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings in a
synthetic auto loan transaction sponsored by Wachovia Bank, N.A.
Provisional ratings of (P) Baa3, (P) Ba2, (P) B1 and (P) B3 are
assigned to four classes of fixed rate credit-linked notes (the
Notes) to be issued by HELIOS Finance Limited Partnership 2007-S1
and HELIOS Finance Corporation 2007-S1 as co-issuers.
Additionally, provisional ratings of (P) Aaa, (P) Aa1 and (P) A1
are assigned to three classes of risk positions retained by
Wachovia Bank. Wachovia Bank is also retaining the first-loss risk
position. The transaction relates to a reference portfolio of auto
loans totaling $6.235 billion for which Wachovia Bank is Master
Servicer and Wachovia Dealer Services, Inc. is originator and
subservicer. The Notes are being issued in connection with a
credit default swap tied to the reference portfolio, under which
Wachovia Bank is the protected party.
The complete rating actions are:
Co-Issuers: HELIOS Finance Limited Partnership 2007-S1 and HELIOS
Finance Corporation 2007-S1
Issue: Credit-Linked Notes, Series 2007-S1
* $249,412,000 Class B-1 Notes, rated (P) Baa3
* $93,529,000 Class B-2 Notes, rated (P) Ba2
* $93,529,000 Class B-3 Notes, rated (P) B1
* $19,953,000 Class B-4 Notes, rated (P) B3
Retained Risk Positions (no notes being issued or offered at this
time):
* $4,988,237,000 Class A-1 Risk Position, rated (P) Aaa
* $249,412,000 Class A-2 Risk Position, rated (P) Aa1
* $249,412,000 Class A-3 Risk Position, rated (P) A1
The notes are being offered in privately negotiated transactions
without registration under the 1933 Act.
The issuance was designed to permit resale of the notes under Rule
144A and for the Class B-1 notes only, resale under Reg S.
The retained risk positions are not being issued or sold at this
time.
HFF INC: December 31 Balance Sheet Upside-Down by $44 Million
-------------------------------------------------------------
HFF Inc.'s combined balance sheet as of Dec. 31, 2006, showed
total assets of $154,302,000 and total liabilities of 198,620,000,
resulting in a stockholders' deficit of $44,318,000.
The company had revenues of $229,697,000 and a net income of
$51,553,000 for the year ended Dec. 31, 2006. It has revenues of
$205,848,000 and a net income of $48,135,000 for the year ended
Dec. 31, 2005.
These financial results are based on the combined financial
results of the operating partnerships. In February 2007, the
Company completed an initial public offering by issuing 16,445,000
shares of Class A common stock at a price of $18.00 per share, the
proceeds of which, after deducting underwriting discounts and
offering expenses, were used to purchase from HFF Holdings LLC all
of the shares of Holliday GP, the general partner of the operating
partnerships, and partnership units representing approximately 45%
of each of the operating partnerships. HFF Holdings LLC used a
portion of these proceeds to repay all outstanding borrowings
under HFF LP's credit agreement.
Business Expansion Highlights
HFF expanded its reach in 2006 through the hiring of 87 associates
including 10 transaction professionals. Additionally, the firm
expanded its geographic foothold on the West Coast with the
opening of a San Francisco office.
"The real estate capital markets continue to be healthy and very
liquid. We believe HFF is well positioned to benefit from this
environment, which is evidenced by our 2006 production volume and
strong financial results," stated John Pelusi, chief executive
officer of HFF Inc.
"We would like to thank all of our clients for helping us achieve
a record year in production volumes across all of our platform
services in 2006, and we look forward to continuing to serve the
needs of our clients in the coming year," Mr. Pelusi added.
Production Volume and Loan Servicing
Production volume for the full year of 2006 totaled a record
$36,456,246,000 in 1,300 transactions, an increase over the
$31,779,093,000 in transactions for 2005.
* Debt Placements achieved another record year of production
volume with the closing of more than $22,116,288,000 in
transactions;
* Investment Sales activity reached in excess of
$10,141,200,000, an increase over 2005 volume;
* Structured Finance activity reached close to $2,858,213,000
posting a gain over 2005's volume of $1,886,144,000;
* Note Sales and Note Sale Advisory Services achieved more
than $414,045,000 in volume for 2006, a gain over 2005
volume of $93,900,000;
* HFF Securities also showed substantial growth with close to
$930 million of private equity, investment banking and
advisory services transaction volume in 2006, a 460%
increase over 2005 volume; and
* The principal balance of HFF's Loan Servicing portfolio
increased nearly 21% from $14,889,963,000 at year-end 2005
to over $18,025,182,000 at year-end 2006.
About HFF
HFF Incorporated -- http://www.hfflp.com/-- through its
subsidiaries Holliday Fenoglio Fowler L.P. and HFF Securities
L.P., provides commercial real estate and capital market services
to the U.S. commercial real estate industry. HFF offers clients a
fully integrated national capital markets platform including debt
placement, investment sales, structured finance, private equity,
note sale and note sales advisory services and commercial loan
servicing.
HILTON HOTELS: Sells 10 Hotels to Morgan Stanley for $770 Million
-----------------------------------------------------------------
Hilton Hotels Corporation has agreed to sell up to 10 hotels to
a fund managed by Morgan Stanley Real Estate for approximately
$770 million. Assuming completion of the sale of all 10 hotels,
net proceeds after property level debt repayment, taxes and
transaction costs are expected to be approximately EUR450 million.
Proceeds from the sale will be used to pay down debt.
Based on trailing 12-month earnings from the 10 hotels before
interest, taxes, depreciation and amortization, the sale price
represents an EBITDA multiple of approximately 15.2x.
Hilton and Morgan Stanley Real Estate have agreed to long-term
management contracts on five of the 10 hotels, including the
Hiltons in Dusseldorf, Dresden, Paris Charles de Gaulle,
Strasbourg and Zurich. Morgan Stanley Real Estate has agreed to
make an extensive and immediate investment of approximately
EUR18 million in these five hotels. Of the remaining hotels, long
term management agreements are expected to be established on the
Hilton hotels in Brussels, Barcelona and Luxembourg subject to
Hilton and Morgan Stanley Real Estate agreeing to capital plans.
For the remaining two hotels, the Los Zocos Club Resort is being
sold without an ongoing contract, and Morgan Stanley Real Estate
and Hilton will evaluate the future intent for the Hilton Weimar
in Germany where Hilton branding will remain in place for a short
term period pending such evaluation.
The sale of seven of the hotels is subject to a number of
conditions including clearance from the European Union regulators,
but is expected to be completed by the end of June 2007. The
sales of the remaining three hotels are also subject to certain
conditions and require further legal and statutory discussions and
approvals. Sale of these three hotels is anticipated to be taking
place in the third quarter, 2007.
On completion of these transactions, Hilton will have sold over
$3 billion of assets that it obtained in the acquisition of Hilton
International in late February 2006, and over $4.5 billion of
assets will have been sold since the company began its disposition
program in 2005.
Robert M. La Forgia, Executive Vice President and Chief Financial
Officer of Hilton Hotels Corporation, commented on the proposed
sale: "This transaction is a significant step for Hilton as we
continue to focus on our strategy of growing our managed and
franchise business, while reducing asset ownership and
strengthening our balance sheet.
"Morgan Stanley Real Estate is a highly respected real estate
investor and an important business partner and currently owns or
has an interest in 13 Hilton family hotels. This transaction
builds significantly on this relationship and provides a platform
for continued growth of our brands as we look expand our reach
globally."
Hilton was advised by Banc of America Securities Limited. Morgan
Stanley Real Estate was advised by Morgan Stanley.
About Hilton Hotels
Hilton Hotels Corporation (NYSE:HLT)
-- http://www.hiltonworldwide.com/-- owns and manages hotel
including Hilton, Conrad, Doubletree, Embassy Suites Hotels,
Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn, Hilton Grand
Vacations, Homewood Suites by Hilton and The Waldorf=Astoria
Collection.
* * *
As reported in the Troubled Company Reporter on March 6, 2007,
Standard & Poor's Ratings Services raised its corporate credit and
senior unsecured ratings on Hilton Hotels Corp. to 'BB+' from 'BB'
and removed the ratings from CreditWatch where they were placed
with positive implications on Jan. 31, 2007. The outlook is
stable.
HILTON HOTELS: Sells 132 Scandic Hotel Chain to EQT for $1.1 Bil.
-----------------------------------------------------------------
Hilton Hotels Corporation completed the sale of the 132 hotel
Scandic chain to EQT for approximately $1.1 billion.
The company said that the net proceeds after transaction costs and
taxes are expected to be approximately $1.04 billion and will be
used to pay down debt.
The transaction as reported on March 2, 2007 is expected to reduce
the company's 2007 recurring EPS by $0.10 per share.
About Hilton Hotels
Hilton Hotels Corporation (NYSE:HLT)
-- http://www.hiltonworldwide.com/-- owns and manages hotel
including Hilton, Conrad, Doubletree, Embassy Suites Hotels,
Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn, Hilton Grand
Vacations, Homewood Suites by Hilton and The Waldorf=Astoria
Collection.
* * *
As reported in the Troubled Company Reporter on March 6, 2007,
Standard & Poor's Ratings Services raised its corporate credit and
senior unsecured ratings on Hilton Hotels Corp. to 'BB+' from 'BB'
and removed the ratings from CreditWatch where they were placed
with positive implications on Jan. 31, 2007. The outlook is
stable.
HUISH DETERGENTS: S&P Holds B Rating on Increased First-Lien Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its loan and recovery
ratings on Huish Detergents' senior secured first- and second-lien
bank facilities following the announcement that the company will
increase the first-lien term loan facility by $50 million and
reduce the second-lien term loan facility by the same amount.
Salt Lake City, Utah-based Huish's $975 million senior secured
bank facility now consists of a $100 million first-lien revolving
credit facility maturing in 2013, a $650 million first-lien term
loan facility maturing in 2014 and a $225 million second-lien term
loan facility maturing in 2014. The first-lien facilities are
rated 'B' with a recovery rating of '2', indicating an expectation
for substantial (80%-100%) recovery of principal in the event of a
payment default. The second-lien facility is rated 'CCC+' with a
recovery rating of '5', indicating an expectation of negligible
(0%-25%) recovery of principal in the event of a payment default.
Ratings List
Huish Detergents, Inc.
Corporate Credit Rating B/Stable/--
First-Lien Senior Secured Bank Loan B (Recovery Rating: 2)
Second-Lien Senior Secured Bank Loan CCC+ (Recovery Rating: 5)
IMAGEWARE SYSTEMS: Sets Annual Shareholders Meeting on Sept. 19
---------------------------------------------------------------
An annual shareholders meeting of ImageWare(R) Systems Inc. will
be held on Sept. 19, 2007, beginning at 10:00 a.m. PT, at the
Radisson Suite Hotel - Rancho Bernardo, located at 11520 West
Bernardo Ct. in San Diego, California.
ImageWare's Board of Directors has set Aug. 10, 2007, as the date
of record for this meeting. All shareholders who own ImageWare
common stock on Aug. 10, 2007 should expect to receive meeting
materials that include an annual report on Form 10K, proxy
materials, and a ballot.
At Dec. 31, 2006, ImageWare Systems reported cash of approximately
$940,000. On March 12, 2007, ImageWare Systems received net
proceeds of approximately $1.5 million in a private placement of
Series D Convertible Preferred Stock and warrants. In addition,
the company received approximately $1.1 million in proceeds from
the exercise of warrants during the quarter ended March 31, 2007.
Headquartered in San Diego, California, ImageWare Systems Inc.
(AMEX:IW) -- http://www.iwsinc.com/-- develops digital imaging,
identification and biometric software solutions for the
corporate, government, law enforcement, professional
photography, transportation, education and healthcare markets,
among others. Founded in 1987, the company has offices in Canada,
Europe and Singapore.
Going Concern Doubt
Stonefield Josephson, Inc., in San Diego, California, raised
substantial doubt about ImageWare Systems' ability to continue
as a going concern after auditing the company's consolidated
financial statements for the year ended Dec. 31, 2006. The
auditor pointed to the company's substantial net losses since
inception and substantial monetary liabilities in excess of
monetary assets, and had an accumulated deficit of $70,332,702.
INFe Human: Posts $196,235 Net Loss in Quarter Ended February 28
----------------------------------------------------------------
INFe Human Resources Inc. reported a net loss of $196,235 on
revenues of $1,644,044 for the first quarter ended Feb. 28, 2007,
compared with net income of $33,385 on revenues of $687,932 for
the same period ended Feb. 28, 2006.
The results for the first quarter of fiscal 2007 included a loss
from operations of the company's Daniels Advisory of $114,765
compared to income of $108,928 for the first quarter of fiscal
2006.
At Feb. 28, 2007, the company's balance sheet showed $3,326,308 in
total assets, $3,137,625 in total liabilities, and $188,683 in
total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Feb. 28, 2007, are available for
free at http://researcharchives.com/t/s?1e07
Going Concern Doubt
Miller, Ellin & Company LLP, in New York, expressed substantial
doubt about INFe Human Resources Inc.'s ability to continue as a
going concern after auditing the company's financial statements
for the year ended Nov. 30, 2006. The auditing firm pointed to
the company's net losses for the years ended Nov. 30, 2006, and
2005, and long-term liabilities and current operating expenses
which are substantially in excess of its working capital.
About InFe Human
Headquartered in New York, INFe Human Resources Inc. (OTCBB: IFHR)
is a financial consulting company engaged in roll-up acquisitions
of staffing businesses in high-margin market niches. INfe Human
Resources also offers capital and corporate financial consulting
services to OTC Bulletin Board companies through its wholly owned
Daniels Corporate Advisory Company subsidiary.
INVERNESS MEDICAL: Biosite Merger Pact Cues Moody's Ratings Review
------------------------------------------------------------------
Moody's Investors Service placed the ratings of Inverness Medical
Innovations, Inc. on review for possible downgrade following the
announcement that Inverness has entered into a merger agreement
with Biosite Incorporated for $90 a share for the remaining 95.3%
of Biosite it does not currently own.
Additionally, Biosite's Board of Directors has determined that the
binding offer from Inverness constitutes a "superior proposal" to
the one offered by Beckman Coulter.
Inverness has received commitments from UBS and GE Capital for
approximately $1.75 billion comprised of $150 million revolver,
$1.15 billion term loan B and a $450 million senior subordinated
unsecured bridge loan facility. Anticipated proceeds from the
joint venture with Procter & Gamble (expected in the second
quarter of 2007) will be used to repay the $300 million of the
proposed term loan B. Approximately $150 million of the senior
subordinated unsecured bridge loan facility is anticipated to be
used to repay the existing senior subordinated notes due 2012.
Sidney Matti, Analyst, stated that, "The review for possible
downgrade will focus primarily on the company's post-acquisition
capital structure and the likelihood that Inverness' post-
acquisition credit metrics would fall below the B2 rating
category."
These ratings were placed on review for possible downgrade:
-- B2 Corporate Family rating;
-- B2 Probability of Default rating; and
-- Caa1 rating on $150 million senior subordinated notes
due 2012 (LGD5/82%);
Headquartered in Waltham, Massachusetts, Inverness Medical
Innovations, Inc. is a leading developer, manufacturer and
marketer of in vitro diagnostic products for the over-the-counter
pregnancy and fertility/ovulation test market and the professional
rapid diagnostic test markets. For the fiscal year ended December
31, 2006, the company reported revenues of approximately
$569 million.
IPCS INC: Declares $11 Per Share Special Cash Dividend
------------------------------------------------------
The Board of Directors of iPCS Inc. has declared a special cash
dividend of $11 per share payable to all holders of the company's
common stock, with a record date of Tuesday, May 8, 2007 and a
payment date of Wednesday, May 16, 2007.
Based on its estimates, the company expects that, for U.S. federal
income tax purposes, the special cash dividend will be treated as
a tax-free return of capital to the extent of each stockholder's
tax basis in the company's common stock with any excess generally
being treated as gain from the sale of stock. The company's final
determination of the character of the special cash dividend, for
U.S. federal income tax purposes, will not be completed by the
company until early calendar year 2008. The company's
stockholders are advised to consult with their tax advisors
regarding the U.S. federal, state, local and foreign tax
consequences of the special cash dividend.
Headquartered in Schaumburg, Illinois, iPCS Inc. (Nasdaq: IPCS) --
http://www.ipcswirelessinc.com/-- is an affiliate of Sprint
Nextel Corporation with the exclusive right to sell wireless
mobility communications network products and services under the
Sprint brand in 80 markets including markets in Illinois,
Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. The
territory includes key markets such as Grand Rapids (MI), Fort
Wayne (IN), Tri-Cities (TN), Scranton (PA), Saginaw-Bay City (MI)
and Quad Cities (IA/IL). As of March 31, 2007, iPCS's licensed
territory had a total population of approximately 15 million
residents, of which its wireless network covered approximately
11.4 million residents, and iPCS had approximately 590,900
subscribers.
* * *
As reported in the Troubled Company Reporter on April 11, 2007,
Moody's Investors Service affirmed its B3 corporate family rating
for iPCS Inc. The company's SGL-3 rating has also been affirmed.
Moody's has changed its outlook for iPCS to developing.
J.A.M.M. 18: Case Summary & Two Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: J.A.M.M. 18, Inc.
960 Ocean Drive
Miami Beach, FL 33139
Bankruptcy Case No.: 07-13055
Chapter 11 Petition Date: April 26, 2007
Court: Southern District of Florida (Miami)
Debtor's Counsel: Meredith Mishan, Esq.
Steven Mishan, Esq.
Steven Mishan, P.A.
848 Brickell Avenue, Suite 1100
Miami, FL 33131
Tel: (305) 577-5999
Fax: (305) 374-5356
Estimated Assets: More than $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Caf, Med of Miami, Inc. Contribution on Unknown
Michael E. Brand, Esq. claim of Carol
Cole, Scott & Kissane, P.A. Simone
1390 Brickell Avenue, 3rd Floor
Miami, FL 33131
Carol Simone Lawsuit - Personal Unknown
c/o Gregory A. Anderson, Esq. Injury
2201 Northwest
Corporate Boulevard, Suite 100
Boca Raton, FL 33431
JARDEN CORP: $1.2 Billion K2 Inc. Deal Prompts S&P to Hold Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings and
outlook on Rye, New York-based Jarden Corp. (B+/Stable/--)
following the company's agreement to acquire K2 Inc., a global
sports equipment manufacturer with leading market positions in
several categories. At the same time, Standard & Poor's placed
its ratings on K2, including its 'BB' corporate credit rating, on
CreditWatch with negative implications.
"The total value of the transaction is approximately $1.2 billion,
which includes the assumption or repayment of indebtedness at K2,"
said Standard & Poor's credit analyst Rick Joy. "Should K2's debt
remain outstanding upon completion of the transaction, K2's
ratings would be lowered to levels in line with Jarden Corp. If
K2's debt is repaid, the ratings will be withdrawn upon closing."
Jarden is a leading provider of diversified niche consumer
products. The ratings on Jarden reflect the highly competitive
and challenging operating environment, its aggressive acquisition
orientation, and its high debt leverage. These risk factors are
somewhat offset by the company's diversified business portfolio,
increased scale following a series of acquisitions, organic
growth, and good market positions within numerous product
categories. The acquisition of K2, with its portfolio of well-
known brands (such as K2, Volkl, and Marker in skiing; Rawlings in
baseball; and Shakespeare in fishing), enhances Jarden's business
profile, diversifies its product portfolio, and will strengthen
the company's presence in the sporting goods, marine, and outdoor
retail channels.
JUNIPER NETWORKS: Stock Options Query Cues S&P to Remove Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Juniper
Networks Inc. and removed the ratings from CreditWatch where were
placed with negative implications on May 22, 2006, following an
announcement that Juniper received a request for information from
the office of the U.S. Attorney for the Eastern District of New
York relating to its granting of stock options.
"The action reflects a conclusion of the investigation, a
financial restatement, and changed procedures for granting stock
options; the outlook is now positive," said Standard & Poor's
credit analyst Bruce Hyman.
Following the Federal announcement, related inquiries were
undertaken by the SEC and NASDAQ; the board's audit committee
reviewed the company's stock-option granting process; and several
shareholder lawsuits were filed. Subsequently, numerous instances
were identified in which option grant dates were chosen to give
favorable prices. Procedures were put into effect to improve the
stock-option granting process. On March 9, 2007, the company
filed its December 2006 form 10-K, bringing it current with SEC
filing requirements; on March 15, 2007, the company came in
compliance with all NASDAQ marketplace rules. S&P now believe the
income-tax consequences, and the outcome of the ongoing lawsuits,
while potentially material, are unlikely to affect the rating over
the near to intermediate term, given Juniper's current liquidity.
The ratings continue to reflect the challenges of rapid growth in
a highly competitive, rapidly evolving market, expectations of an
ongoing acquisitive business posture, and the potential for
continued industry volatility, somewhat offset by the company's
broadening business base, continued good market position in the
networking equipment and information security markets, and a
moderate financial profile.
K2 INC: $1.2 Billion Jarden Deal Cues Moody's to Review Ratings
---------------------------------------------------------------
Moody's Investors Service placed the ratings of K2 Inc. under
review for possible downgrade, but affirmed its SGL-3 speculative
grade liquidity rating.
The rating action was prompted by Jarden Corporation's ("Jarden" -
- B1 CFR, developing outlook) announcement that it has signed a
definitive merger agreement to acquire K2. Under the terms of the
agreement, Jarden will pay $10.85 per share of K2 common stock in
cash and will issue 0.1086 of a share of Jarden common stock
(subject to adjustment as provided in the merger agreement) for
each share of K2 common stock outstanding as of the closing.
The cash and Jarden stock to be issued in the transaction has a
combined value of approximately $15.50 per K2 share, based on the
closing price of Jarden common stock on the date of signing the
merger agreement. The total enterprise value of the transaction,
including the assumption or repayment of indebtedness, is
approximately $1.2 billion. Moody's notes that K2's $200 million
senior unsecured notes indenture does contain a change of control
provision. The transaction is expected to close in the third
quarter of this year. LGD assessments are subject to change after
completion of a review.
These ratings were placed under review for possible downgrade:
Corporate family rating, Ba3;
Probability-of-default rating, Ba3;
$200 million senior unsecured notes due 2014, at B1 (LGD4, 61%).
The review will focus on the details of the transaction, the
credit profile of the combined companies post-acquisition, the
company's plans to address the change of control provision in the
notes indenture, and the position of K2's notes within Jarden's
capital structure assuming these remained outstanding.
K2's SGL-3 speculative grade liquidity rating reflects its
adequate liquidity position with material borrowing capacity under
its revolving credit facility, Moody's expectation for positive
free cash flow for the twelve months ended December 2007, and
expectations for continued compliance under financial covenants.
The SGL rating is restrained by the seasonal nature of K2's
businesses that results in significant working capital related
borrowing needs, and material near-term obligations (relative to
the company's cash flows) due to its short-term and uncommitted
foreign credit lines.
K2 Inc., with corporate headquarters in Carlsbad, California, is a
leading manufacturer and distributor of sporting goods in team
sports, fishing, marine/outdoor, winter sports, summer sports,
paintball, and apparel. Reported sales were approximately $1.4
billion for the twelve months ended December 2006.
KARA HOMES: Court Schedules Plan Confirmation Hearing on May 24
---------------------------------------------------------------
The United States Bankruptcy Court for the District of New Jersey
will convene a hearing on May 24, 2007, at 10:00 a.m., to consider
confirmation of Kara Homes Inc. and its debtor-affiliates' Chapter
11 Plan of Reorganization.
Objections to the confirmation of the Plan are due on May 14,
2007.
The Court approved the Debtors' Disclosure Statement describing
their Plan on April 16, 2007. The Court determined that the
Disclosure Statement contained adequate information -- the right
kind of the right amount for creditors to make informed decisions
when asked to vote for the Plan.
Overview of the Plan
The Plan contemplates continuation of the Debtors' business
including the sale and construction of certain developments.
Generally, the Plan contemplates that a holding company consists
of Plainfield Specialty Holding II Inc. and other investors will
acquire 100% of:
a. new common shares in Kara Homes Inc.; and
b. membership interest in the affiliates coupled with
the name Kara Homes Inc. in exchange for:
i. the infusion of $8 million in cash, and
ii. two lending facilities aggregating up to
$90 million.
Plainfield a DIP Loan holder and purchased the mortgage lien of
National City Bank the Hawkins Ridge development.
The Debtors say that $60 million lending facility will be used to
fund the cash-outs of certain construction mortgage holders. The
Debtors also say that $30 million lending facility will be used
to fund construction of certain developments.
The Debtors further say that $8 million in new cash will be used
to pay for administration expenses, priority and tax payments,
cure payments, real estate taxes on certain projects and working
capital.
The Plan further provides that the net proceeds from the
sale of certain assets together with the net proceeds from the
construction of certain developments will be distributed by the
Debtors to the holders as described under the Plan.
Treatment of Claims
Under the Plan, Municipal Tax and Municipal Utility Authorities'
Claims will be paid in full by the reorganized Debtors from the
new equity. Holders of the claim will remain as liens on their
collateral.
The Debtors have the option to reinstate the Claims of Prepetition
Institutional Mortgage holders at a percentage of par or sell the
holder's collateral. In addition, the Debtors say that holders
the claim can elect to:
i. accept cash-outs where offered; or
ii. pursue their remedies with respect to their collateral.
Each holder of Subordinated Mortgage Claims will be paid, if
allowed, in accordance with the terms of new loan documents to be
issued to the holders. All old loan documents will be cancelled
as of the Plan effective date.
Claims of Construction Lienholders will be reinstated to the
extent of the value of the underlying collateral without interest
and will remain as liens on their collateral in the same priority
and extent as existed prepetition.
Holders of Contract Purchasers for Deposits Claim will be assumed
by the Debtors. The contract purchasers will consummate the
transaction and close the purchase of the home.
Claims of Plainfield Specialty Holding II Inc. will be reinstated
and extended with interest to accrue at the agreed rate as set
forth in the DIP Loan Documents for a period of 36 months.
Monthly payments of interest accrued will commence 6 months
from the Plan effective date.
Claims of Unsecured Creditors will receive:
i. $500,000 on the Plan effective date;
ii. a share in the development note issued up to $5,000 per
home on the closing and sale from net available cash; and
iii. a share in the proceeds generated in the creditors trust.
Bond Companies and Sureties will be paid, without interest, over a
period of years starting 120 days from the Plan effective date
until Sept. 1, 2011.
Each holder of Equity Interest will be expunged, extinguished and
all outstanding stock and membership interest will be cancelled.
A full-text copy of the Chapter 11 Plan of Reorganization is
available for a fee at:
http://www.researcharchives.com/bin/download?id=070427231558
Headquartered in East Brunswick, New Jersey, Kara Homes Inc.
aka Kara Homes Development LLC, builds single-family homes,
condominiums, town homes, and active-adult communities. The
company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D.
N.J. Case No. 06-19626). On Oct. 9, 2006, nine affiliates filed
separate chapter 11 petitions in the same Bankruptcy Court. On
Oct. 10, 2006, 12 more affiliates filed chapter 11 petitions.
David L. Bruck, Esq., at Greenbaum, Rowe, Smith, et al.,
represents the Debtors. Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard represents the Official Committee of
Unsecured Creditors. Traxi LLC serves as the Debtors' crisis
manager. The Debtors engaged Perry M. Mandarino as chief
restructuring officer, and Anthony Pacchia as chief financial
officer. When Kara Homes filed for protection from its creditors,
it listed total assets of $350,179,841 and total debts of
$296,840,591.
KENNETH KREISEL: Case Summary & 18 Largest Unsecured Creditors
--------------------------------------------------------------
Debtors: Kenneth W. Kreisel
Laurene M. Kreisel
1211 Homewood Lane
La Canada Flintridge, CA 91011
Bankruptcy Case No.: 07-13349
Type of Business: The Debtors are officers of Miller and Kreisel
Sound, Inc., which filed for Chapter 11
protection on February 27, 2007 (Bankr. C.D.
Calif. Case No. 07-10614).
Chapter 11 Petition Date: April 25, 2007
Court: Central District Of California (Los Angeles)
Judge: Sheri Bluebond
Debtors' Counsel: Scott C. Clarkson, Esq.
Clarkson, Gore & Marsella, APL
3424 Carson Street, Suite 350
Torrance, CA 90503
Tel: (310) 542-0111
Fax: (310) 214-7254
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtors' 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Merrill Lynch $2,874,746
c/o Craig Welin, Frandzel
6500 Wilshire Boulevard
17th Floor
Los Angeles, CA 90048
PM Factors, Inc. $1,480,000
9701 West Pico Boulevard
1st Floor
Los Angeles, CA 90035
EMC Mortgage Corporation $1,000,000
P.O. Box 7589
Springfield, OH 45501-7589
Northpark Industrial $506,439
8929 Wilshire Boulevard
Beverly Hills, CA 90211
Merrill Lynch $250,000
222 North LaSalle Street
Suite 1700
Chicago, IL 60601
Washington Mutual $250,000
Collections Department
P.O. Box 3990
Melbourne, FL 32901
Betty & Lynn Shubert $71,700
Discover Financial Services $27,959
Wells Fargo $22,892
Citibank S.D. $21,947
Unifund (Citibank) $18,780
United Cardmember Services $15,885
Chase $12,597
Los Angeles County Recorder $10,468
HSBC N.V. $9,793
Toyota Motor Credit Car Lease $8,769
HSBC/NEIMN $8,665
HILCO $7,892
KENNETH RALICH: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtors: Kenneth L. Ralich
Karen R. Ralich
6111 Turnberry Drive
Presto, PA 15142
Bankruptcy Case No.: 07-22670
Type of Business: The Debtor is the president of Genesis
Settlement, Inc., which filed for Chapter 11
protection on April 18, 2007 (Bankr. W.D. Pa.
Case No. 07-22444).
Chapter 11 Petition Date: April 27, 2007
Court: Western District of Pennsylvania (Pittsburgh)
Debtors' Counsel: Francis E. Corbett, Esq.
Calaiaro, Corbett & Brungo, P.C.
Grant Building, Suite 1105
330 Grant Street
Pittsburgh, PA 15219-2202
Tel: (412) 232-0930
Fax: (412) 232-3858
Estimated Assets: $100,000 to $1 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
LB-UBS COMMERCIAL: S&P Lifts Ratings on Class P Certificates to BB
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 10
classes of commercial mortgage pass-through certificates from LB-
UBS Commercial Mortgage Trust 2002-C7. Concurrently, ratings were
affirmed on the remaining 13 classes from the same series.
The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
The upgrades of several senior certificates reflect the defeasance
of $312.2 million (28%) in collateral since issuance.
As of the April 15, 2007, remittance report, the collateral pool
consisted of 114 loans with an aggregate trust balance of
$1.121 billion, compared with 115 loans totaling $1.187 billion at
issuance. The master servicer, Wachovia Bank N.A., reported
primarily full-year 2006 financial information for 90% of the
pool. Based on this information, Standard & Poor's calculated a
weighted average debt service coverage of 1.77x, up from 1.69x at
issuance. All of the loans in the pool are current. To date, the
trust has not experienced any losses.
The top 10 loans have an aggregate outstanding balance of
$458.0 million (41%) and a weighted average DSC of 1.94x,
unchanged since issuance. Standard & Poor's reviewed property
inspections provided by the master servicer for all of the assets
underlying the top 10 loans. One property was characterized as
"excellent," and the remaining properties were characterized as
"good."
Credit characteristics for four of the loans in the pool continue
to be consistent with those of investment-grade obligations.
Details of these loans are as follows:
-- The largest exposure in the pool, the Capital at Chelsea,
is encumbered by a $105.0-million interest-only loan (9%)
is secured by the fee interest in a 387-unit multifamily
property in New York, New York Occupancy was 98% as of
April 9, 2007. Standard & Poor's adjusted net cash flow
is up 2% from its level at issuance.
-- The third-largest exposure in the pool, the 205 East 42nd
Street loan, has a balance of $48.9 million (4%) and is
secured by a 494,668-sq.-ft. office building in New York,
New York. The property reported a year-end 2006 DSC of
2.11x.
-- The fifth-largest exposure in the pool, the 655 Third
Avenue loan, has a balance of $41.8 million (4%) and is
secured by a 391,597-sq.-ft. office building in New York,
New York. The property reported a year-end 2006 DSC of
1.51x. Standard & Poor's adjusted NCF is 23% below its
level at issuance, primarily due to increased operating
expenses.
-- The seventh-largest exposure in the pool, the 675 Third
Avenue loan, has a balance of $37.6 (3%) and is secured by
a 314,831-sq.-ft. office building in New York, New York.
The property reported a year-end 2006 DSC of 2.42x.
The Self Storage Depot loan is currently the only loan with the
special servicer, LNR Partners Inc. This loan has a balance of
$5.7 million (1%) and is secured by a 91,033-sq.-ft self storage
property in Coconut Creek, Florida. It was transferred to LNR
because the borrower will not be able to keep the loan current
because of an increase in the required escrow due to force-placed
windstorm insurance. LNR is currently gathering data and
assessing various options.
Wachovia reported a watchlist of 20 loans ($71.5 million, 6%).
The Fox Pointe Apartments, the ninth-largest exposure, has an
outstanding balance of $17.4 million (2%) and is secured by a
488-unit multifamily property in Houston, Texas. The loan appears
on the watchlist because the property reported a year-end 2005 DSC
of 0.98x. The occupancy at the property has improved to 90% and
the DSC for the period ending Sept. 30, 2006, was 1.15x. Standard
& Poor's stressed the loans on the watchlist and the other loans
with credit issues as part of its analysis. The resultant credit
enhancement levels support the raised and affirmed ratings.
Ratings Raised
LB-UBS Commercial Mortgage Trust
Commercial mortgage pass-through certificates
series 2002-C7
Rating
------
Class To From Credit enhancement
----- -- ----- ------------------
E AAA AA+ 12.45%
F AA+ AA 11.12%
G AA AA- 9.80%
H AA- A+ 8.08%
J A+ A- 7.02%
K A BBB+ 5.96%
L BBB+ BBB- 4.24%
M BBB- BB+ 3.57%
N BB+ BB 3.05%
P BB BB- 2.25%
Ratings Affirmed
LB-UBS Commercial Mortgage Trust
Commercial mortgage pass-through certificates
series 2002-C7
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 18.80%
A-2 AAA 18.80%
A-3 AAA 18.80%
A-1B AAA 18.80%
B AAA 16.95%
C AAA 15.36%
D AAA 13.77%
Q B+ 1.85%
S B 1.59%
T B- 0.79%
X-CL AAA N/A
X-CP AAA N/A
*N/A - Not applicable.
LEVEL 3: Incurs $647 Million Net Loss in First Qtr. Ended March 31
------------------------------------------------------------------
Level 3 Communications, Inc. reported net loss for the first
quarter ended March 31, 2007, of $647 million, as compared with a
net loss of $237 million for the previous quarter. Included in
the net loss for the first quarter 2007 was a $427 million loss on
the extinguishment or refinancing of about $3 billion of long-term
debt during the quarter. Included in the net loss for the fourth
quarter 2006 was a $54 million loss on the extinguishment or
refinancing of $497 million of long-term debt. Consolidated
revenue was about $1 billion for the first quarter 2007, an
increase of $210 million, as compared with consolidated revenue of
$846 million for the fourth quarter 2006.
"We are pleased with our results for the first quarter,
particularly with the substantial progress we made in reducing and
restructuring our long-term debt and the integration of our
acquired businesses, as well as the continued revenue growth from
our core services," said James Q. Crowe, chief executive officer
of Level 3. "We met or exceeded all guidance measures this
quarter, and believe we will see continued revenue and EBITDA
growth as a result of customer demand, strong sales and the
benefit of our integration activities going forward."
Cash Flow and Liquidity
During the first quarter 2007, Unlevered Cash Flow was negative
$69 million, versus positive $65 million for the previous quarter.
Consolidated Free Cash Flow for the first quarter 2007 was
negative $248 million, versus negative $29 million for the
previous quarter. Net cash interest expense for the first quarter
2007 was $179 million.
Integration Update
"In the first quarter, we made significant progress on our
integration of acquired companies, with our primary focus of
maintaining sales and revenue growth momentum," said Kevin O'Hara,
president and chief operating officer of Level 3. "We are
slightly ahead of schedule in terms of overall integration work to
be completed this year, including overall integration-related
reductions in workforce. We are also on track to deliver overall
integration related expense reductions, which earlier in the year
we disclosed would be $200 million of network and operating
expenses on an annualized basis.
In March 2007, Level 3 Financing refinanced its senior secured
credit agreement, which increased the amount of senior secured
debt from $730 million to $1.4 billion, reduce the interest rate
on that debt from LIBOR + 300 bps to LIBOR + 225 bps and extended
the final maturity from 2011 to 2014.
During the quarter, Level 3 also redeemed $722 million aggregate
principal amount and repurchased $941 million aggregate principal
amount of debt due 2008 to 2011.
As of March 31, 2007, the company listed total assets of about
$10.6 billion, total liabilities of about $9.2 billion, resulting
in a total stockholders' equity of $1.4 billion. The company had
long-term debt of about $6.8 billion as of March 31, 2007.
2007 Business Outlook
"We are pleased with the continued growth in revenue and sales
activity in the first quarter," said Mr. Patel. "We expect
continued strong Core Communications Services revenue growth in
the second quarter. As such, we are projecting Total
Communications Revenue of $1,000-$1,045 million in the second
quarter. As we begin to see additional benefits of merger-related
synergies, we are projecting Consolidated Adjusted EBITDA to
increase to $180-$200 million in the quarter. Additionally, we are
reaffirming our previously disclosed full-year guidance for 2007
and 2008."
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.
* * *
Level 3 Communications Inc. and wholly owned subsidiary, Level 3
Financing Inc. carry Standard & Poor's Rating Services' 'B-'
corporate credit rating. The outlook is stable.
The company's new $1 billion term loan carries Moody's Investors
Service's B1 rating and the company's $1 billion fixed and
floating rate notes at its Financing subsidiary carry Moody's B3
rating. It also bears Moody's Caa1 corporate family rating with a
stable outlook.
LONGLEAF PRODUCTION: Case Summary & 12 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Longleaf Production LLC
5990 Pinkstaff Lane
Beaumont, TX 77706
Bankruptcy Case No.: 07-10216
Debtor-affiliate filing separate chapter 11 petition:
Entity Case No.
------ --------
L-TEXX Petroleum, L.P. 07-10217
Type of Business: The Debtors produce petroleum and other oil
derived products.
Chapter 11 Petition Date: April 27, 2007
Court: Eastern District of Texas (Beaumont)
Debtors' Counsel: Floyd A. Landrey, Esq.
Moore Landrey LLP
390 Park Street, Suite 500
Beaumont, TX 77701
Tel: (409) 835-3891
Fax: (409) 835-2707
Total Assets Total Debts
------------ -----------
Longleaf $1,500,000 $1,042,032
Production LLC
L-TEXX $6,125,266 $1,048,881
Petroleum, L.P.
A. Longleaf Production LLC has no creditors who are not insiders.
B. L-TEXX Petroleum, L.P.'s 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Dennis Perry $33,596
[no address]
Central Appraisal - Trade Debt $9,646
Harrison County
P.O. Box 818
Marshall, TX 75671
Gem Electric Trade Debt $5,038
P.O. Box 277
Baton Rouge, LA 71061
Branco/Branton Tools Trade Debt $3,448
Orgain, Bell & Tucker, LLP Trade Debt $3,216
Waskom Automotive Trade Debt $3,168
Youngblood Properties Trade Debt $2,600
Aetna Trade Debt $2,502
Harrison County Trade Debt $2,328
Panola-Harrison Co-op Trade Debt $2,006
Pine Island Chemical Solutions Trade Debt $1,196
Airgas Mid South, Inc. Trade Debt $364
M&A HOMES: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: M & A Homes, LLC
4557 Chamblee Tucker Road
Tucker, GA 30084
Bankruptcy Case No.: 07-66511
Chapter 11 Petition Date: April 26, 2007
Court: Northern District of Georgia (Atlanta)
Judge: Paul W. Bonapfel
Debtor's Counsel: Paul Reece Marr, Esq.
Paul Reece Marr, P.C.
300 Galleria Parkway Northwest, Suite 960
Atlanta, GA 30339
Tel: (770) 984-2255
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
MAGUIRE PROPERTIES: Completes $2.8 Bil. Office Portfolio Purchase
-----------------------------------------------------------------
Maguire Properties Inc. completed its acquisition of a portfolio
of assets in Orange County and Downtown Los Angeles that was part
of the former Equity Office Properties portfolio from the
Blackstone Group. The purchase price was $2.875 billion, which
was funded through:
* $2.27 billion of new mortgage financing,
* $223 million in bridge financing, and
* a $400 million term loan
originated by Credit Suisse, Lehman Brothers and Merrill Lynch &
Co. Credit Suisse also originated a new secured revolving credit
facility for up to $130 million.
"We are enormously pleased to have completed the strategic
acquisition of this portfolio," Mr. Robert F. Maguire III,
Chairman and Chief Executive of Maguire Properties, said. "The
properties are well located in tightening sub-markets with solid
demand and rapidly dwindling entitlements. We continue to see
significant opportunities to increase rents and parking revenue
over the next few years given in place rents, which are
substantially below current market rents. This transaction
supports our strategy of building strong market share in Orange
County and in the Bunker Hill submarket of Downtown Los Angeles.
Additionally, the two million square feet of development land
acquired in this transaction will increase our total development
pipeline to over 12 million square feet and positions us extremely
well for future growth."
Maguire Properties plans to integrate the new portfolio of assets
through the hiring of approximately 50 Equity Office Properties
employees who will continue to manage and lease substantially all
of the acquired properties.
The $400 million term loan and revolving credit facility for up to
$130 million have five and four year terms, respectively.
"We obtained $2.27 billion of new mortgage financing at a
favorable weighted average interest rate of 5.9% to finance this
Southern California portfolio acquisition," Mr. Maguire added.
"We are continuing to execute our previously announced plans to
market and sell certain assets to streamline our asset base and
reduce leverage to achieve our debt to market capital ratio
objectives. As previously reported, we recently entered into
agreements to sell two San Diego properties and five former EOP
Orange County properties for a combined total of approximately
$645 million and will use the proceeds from these sales to repay
the term loan and reduce debt."
Eastdil Secured acted as advisor in this transaction.
About Maguire Properties
Based in Los Angeles, California, Maguire Properties, Inc.
(NYSE:MPG) -- http://www.maguireproperties.com/-- owns and
operates Class A office properties in the Los Angeles central
business district and is primarily focused on owning and operating
high-quality office properties in the Southern California market.
Maguire Properties, Inc. is a full-service real estate company
with substantial in-house expertise and resources in property
management, marketing, leasing, acquisitions, development and
financing.
* * *
As reported in the Troubled Company Reporter on March 30, 2007,
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Maguire Properties Inc. and Maguire Properties L.P. to
'BB-' from 'BB'.
At the same time, Standard & Poor's assigned its 'BB-' rating and
'4' recovery rating to a proposed $625 million term loan and a
$200 million revolving credit facility. The outlook is stable.
Moody's Investors Service has assigned a Ba3 rating with a stable
outlook to the proposed issuance of $825 million senior secured
credit facility by Maguire Properties, Inc. This secured credit
facility consists of a $625 million secured term loan due 2012
issued by Maguire Properties Holdings III, LLC, and a $200 million
secured revolving credit facility issued by Maguire Properties,
L.P. due 2011. Moody's also assigned a corporate
family rating of Ba2 to Maguire Properties Inc.
MCCLATCHY CO: S&P Lowers Bank Loan and Credit Ratings to BB+
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and bank loan ratings on The McClatchy Co. to 'BB+' from 'BBB'.
The ratings were removed from CreditWatch, where they were placed
with negative implications on March 8, 2007. The rating outlook
is stable.
"The lower ratings follow our review of operating conditions in
the newspaper sector, and consider McClatchy's ability to improve
credit measures over the next few years through management's focus
on debt reduction," said Standard & Poor's credit analyst Peggy
Hebard. "While we stated in our March 8, 2007 press release that
we expected any downgrade stemming from our review to be limited
to one notch, recent performance has been below our expectations.
We believe that, given conditions within the industry, it is
unlikely that credit measures will return to levels consistent
with an investment-grade rating over the intermediate term."
Revenues for the first quarter of fiscal 2007 were down 5% over
the prior-year period. Ad revenues were down 5.3% in the first
quarter, and circulation revenues were down 3.6%. While the first
quarter has historically been seasonally weak, revenues for the
second quarter of 2007 are expected to continue along a similar
trend. Management has had some success in cutting costs, but this
effort is not likely to be sufficient to improve credit measures
meaningfully in the face of declining revenues. Debt leverage, as
measured by total debt to EBITDA was estimated to be 4.9x (pro
forma for a full year of Knight Ridder) as of April 1, 2007--weak
even for the new rating. If further calculated to include the
2008 expected $200 million tax refund associated with the sale of
the Star Tribune for the same period ended April 1, 2007, debt
leverage is still weak for the new rating, in the mid-4x area.
The company had $2.76 billion of net debt outstanding as of the
end of the first quarter of fiscal 2007.
Credit measures are currently somewhat weak for the 'BB+' rating,
though S&P expect that management will focus on debt reduction
during the next few years, which should improve credit metrics to
a more appropriate level. The rating incorporates McClatchy's
satisfactory business profile as a geographically diverse owner of
newspapers, as well as S&P's expectation that the company will
adhere to a conservative financial policy.
MGM MIRAGE: Inks Pact Buying Real Estates for $575 Million
----------------------------------------------------------
MGM Mirage has agreed to purchase a 26-acre parcel located at
southwest corner of Las Vegas Boulevard North and Sahara Avenue
from Gordon Gaming Corp. for approximately $444 million, and eight
acre parcels from Concord Wilshire Acquisition for approximately
$131 million. The newly acquired real estate was purchased in two
separate transactions from Gordon Gaming and Concord Wilshire.
The company said that both transactions reflect a purchase price
of approximately $17 million per acre. Both transactions are
expected to close in May.
"This new land provides us with a much-improved position to
develop our existing North Strip holdings," MGM MIRAGE Chairman
and CEO, Terry Lanni, said. "These transactions secure critical
Strip access, which will greatly increase the development
possibilities for the 44 existing acres in our portfolio. We
see this as an opportunity to not only harness the power of
our portfolio, but also as a means to expand and enhance the
operations of our valuable Circus Circus property for years to
come."
Both purchases include critical Strip frontage property, creating
entirely new development opportunities for the company's holdings
near Sahara Avenue and the Strip. [Thurs]day's announcement adds
to the position of MGM MIRAGE as the largest landholder on the Las
Vegas Strip. The company now controls some 865 acres of Strip
property, encompassing an incomparable 16,000 linear feet, just
more than 3 miles, of Strip-front property.
"These new additions to the MGM MIRAGE real estate portfolio
create many new possibilities which we believe will ultimately
lead to a much greater return from under-utilized holdings
adjacent to this new acreage," MGM MIRAGE President and CFO,
Jim Murren, said. "We have received significant interest by
third parties wishing to partner with MGM MIRAGE on Las Vegas
development. We believe this property is ideally suited to
exploring the opportunity to master plan with partners a major
integrated resort destination.
Mr. Murren also reiterated the company's commitment to Circus
Circus and its operations.
"We are proud of our Circus Circus operation there and are excited
about this opportunity to, over time, generate additional traffic
to that portion of the Strip."
About MGM Mirage
Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM)
-- http://www.mgmmirage.com/-- owns and operates 23 wholly owned
casino resorts in Nevada, Mississippi and Michigan, and has
investments in three other properties in Nevada, New Jersey and
Illinois. MGM Mirage has also announced plans to develop Project
CityCenter, a multi-billion dollar mixed-use urban development
project in the heart of Las Vegas, and has a 50% interest in MGM
Grand Macau, a hotel-casino resort currently under construction in
Macau S.A.R.
MGM MIRAGE: Moody's Holds Ratings & Revises Outlook to Negative
---------------------------------------------------------------
Moody's Investors Service affirmed MGM MIRAGE'S existing ratings,
including its Ba2 corporate family rating and speculative grade
liquidity rating of SGL-3, and changed the ratings outlook to
negative.
The change in outlook reflects an approximate $735 million
increase in cash outflows to secure future growth opportunities,
as well as a recently announced $400 million increase in the cost
estimate for CityCenter that will result in higher than
anticipated leverage over the next several years.
Additionally, MGM MIRAGE has announced a series of joint venture
opportunities that may result in higher investment spending that
could hamper the company's ability to reduce leverage to a more
comfortable level for the rating category. Although MGM MIRAGE
has significant development experience, the scale and number of
projects underway are increasing the business risk profile of the
company.
Moody's last rating action on MGM occurred April 2, 2007 when the
SGL rating was lowered to SGL-3 from SGL-2. At that time Moody's
noted MGM's 12-month projected liquidity cushion had significantly
tightened due to upcoming maturity of approximately $1.4 billion
in notes coupled with capital spending that MGM has planned for
CityCenter, and the Detroit permanent facility (which is scheduled
to open in the fourth quarter of 2007). Since then, $575 million
of Las Vegas land purchases and the $160 million M Resort
investment have been announced. Nevertheless, SGL rating
improvement to SGL-2 is possible if MGM refinances some of its
upcoming amortizations, though the level and timing of new debt
issuance will factor heavily into the likelihood of SGL rating
upgrade.
Pursuant to Moody's Global Gaming Methodology MGM MIRAGE maps to
an overall Ba rating, however, leverage is reflective a single B
rating category. On a Moody's adjusted basis, debt to EBITDA is
estimated to increase to between 6.7x -- 7.0x in 2007 and 2008,
before CityCenter would complete and residential proceeds would
reduce leverage. The affirmation reflects the positive earnings
outlook and return profile of City Center and the Detroit
permanent facility. The ratings could be downgraded if expected
spending for growth opportunities increases further over the next
three years or if expected earnings growth slows, depending on
materiality and other factors such as timing of cash outflows for
new investments or future assets sales.
Ratings/Outlook Changes:
All existing ratings affirmed
* MGM Mirage outlook from stable to negative
* Mirage Resorts, Incorporated outlook from stable to negative
* Mandalay Resort Group outlook from stable to negative
Headquartered in Las Vegas, Nevada, MGM MIRAGE owns and operates
19 properties located in Nevada, Mississippi and Michigan, and has
investments in three other properties in Nevada, New Jersey and
Illinois. MGM MIRAGE has also announced plans to develop
CityCenter, a multi-billion dollar mixed-use urban development
project in the heart of Las Vegas, and has a 50 percent interest
in MGM Grand Macau, a hotel-casino resort currently under
construction in Macau S.A.R (which is expected to open in the
fourth quarter of 2007). Consolidated revenue for 2006 was about
$7.2 billion.
MOBILE MINI: Prices Offering for $150 Mil. of 6-7/7% Senior Notes
-----------------------------------------------------------------
Mobile Mini Inc. priced its offering of $150 million aggregate
principal amount of its 6-7/8% Senior Notes due 2015 to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended. The issuance of the notes is expected to
close on May 7, 2007, subject to customary closing conditions.
The notes will be sold to the initial purchasers at 99.548% of par
value, less discounts and commissions.
Mobile Mini intends to use the proceeds of the current senior note
offering to repurchase up to all of the $97.5 million principal
amount of its outstanding 9.5% Senior Notes due 2013 (CUSIP No.
60740F AE 5) pursuant to the previously announced tender offer for
such notes, to repay a portion of its outstanding obligations and
related costs under it revolving credit facility, and to pay fees
and expenses related to the offering.
Headquartered in Tempe, Arizona, Mobile Mini Inc. (Nasdaq: MINI)
-- http://www.mobilemini.com/-- designs and manufactures portable
steel storage containers, portable offices, telecommunication
shelters and a variety of delivery systems. The company markets,
services and distributes its products through a network of
company-owned branch locations in the U.S., Canada, the UK and The
Netherlands and over 1,950 dedicated employees.
* * *
As reported in the Troubled Company Reporter on April 25, 2007,
Standard & Poor's Ratings Services assigned a 'BB-' rating to
Mobile Mini Inc.'s $125 million senior unsecured notes due 2015.
At the same time, S&P affirmed its ratings on Mobile Mini,
including the 'BB' corporate credit rating. The outlook was
revised to positive from stable.
MYSTIQUE ENERGY: Court Approves Creditor Protection Under CCAA
--------------------------------------------------------------
Mystique Energy Inc., disclosed that after careful consideration
of all available alternatives, its Board of Directors has
determined that it is in the best interests of all of its
stakeholders to seek creditor protection under the Companies'
Creditors Arrangement Act (Canada), and has obtained such
protection pursuant to an Order from the Alberta Court of Queen's
Bench.
Recently, Mystique has been hampered by market and financial
challenges. CCAA protection will stay creditors and others from
enforcing rights against Mystique and affords Mystique the
opportunity to restructure its financial affairs. While under
CCAA protection, Mystique will continue with its day-to-day
operations.
The Court has granted CCAA protection for an initial period of 30
days, expiring May 24, 2007, to be extended thereafter as the
Court deems appropriate. Mystique will issue a further press
release on or before May 24, 2007 to provide an update.
Three of the independent directors of Mystique, Mr. Verne Johnson,
Mr. Mike Shaikh and Mr. Terry McCoy have resigned. Mr. Brent
Walter will remain as an independent director. Vic Luhowy,
President and Chief Executive Officer and Alex Tworo, Vice
President, Exploration also remain as directors. Nick Antonenko
remains as Vice President, Production Operations.
While under CCAA protection, management of Mystique will remain
responsible for the day-to-day operations, under the supervision
of a Court appointed monitor, Ernst & Young Inc., who will be
responsible for monitoring Mystique's ongoing operations,
assisting with the development and filing of the Plan, liaising
with creditors and other stakeholders and reporting to the Court.
Management will also be responsible for formulating the Plan for
restructuring Mystique's financial affairs.
The Plan is the proposed compromise that, in due course, Mystique
intends to present to its stakeholders affected by the Plan. This
Plan will describe how Mystique proposes to restructure its
affairs and may include, but not limited to, offers to creditors
of a percentage of the total amount owing. Those stakeholders
affected by the Plan will have an opportunity to vote upon the
offer proposed in the Plan. If the Plan is approved by the
requisite number and value of the affected stakeholders, the Court
must also approve the Plan before it may be implemented.
Although CCAA protection enables Mystique to continue its day-to-
day operations until its CCAA status changes, the implications for
Mystique shareholders are less clear. At the end of the
restructuring process, the value of what remains for the
shareholders will depend upon the terms of the Plan approved by
the affected stakeholders.
Mystique's primary lender has extended the period of the
forbearance agreement, until June 30, 2007, subject to further
extension at the lender's discretion, to allow for the Plan to be
proposed to the affected stakeholders for their approval.
Mystique continues to engage GMP Securities LP to identify and
consider strategic alternatives including a possible merger,
amalgamation, reorganization or takeover of Mystique, or the sale
of some or all of the assets of the company, or any other
alternatives that are considered to be in the best interests of
Mystique, including the participation of interested parties in
formulating the Plan with Mystique to propose to the affected
stakeholders.
Mystique Energy, Inc. -- http://www.mystiqueenergy.ca/-- (TSXV:
MYS) is a junior oil & gas company focused on exploration and
development of petroleum and natural gas reserves, with production
in western Alberta.
NEW CENTURY: Amended Servicing Business Bidding Procedures Okayed
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the bidding procedures for the sale of New Century Financial
Corporation and its debtor-affiliates' mortgage loan servicing
business to Carrington Capital Management LLC and Carrington
Mortgage Services LLC pursuant to an amended asset purchase
agreement entered into by the Debtors and Carrington.
The Court ruled that Carrington will be entitled to a break-up fee
and expense reimbursement to the extent stated in the Amended APA.
If the Amended APA is terminated for any reason, the Debtors are
authorized and directed, without need for any application, motion
or further Court order, to pay Carrington the break-up fee and
expense reimbursement in the manner and upon the terms of the APA.
If the auction results in the selection of a successful bidder
other than Carrington, New Century Financial Corporation will pay
the break-up fee and expense reimbursement to Carrington pursuant
to the terms of the Amended APA directly from the cash proceeds of
any sale of the servicing business to the successful bidder,
regardless of any other competing liens on or claims to the sale
proceeds.
The deadline for submitting bids for the servicing business is on
May 10, 2007, at 5:00 p.m., Eastern Time.
An auction will be held on May 16, 2007, at the offices of
O'Melveny & Myers LLP, Times Square Tower, New York.
Carrington will not be required to submit any good-faith deposit
in addition to the deposit amount in the event it elects to
participate in the auction. Carrington may include the amount of
the break-up fee and the maximum expense reimbursement in the
amount of any subsequent bid it makes in the auction.
In the event Carrington is the successful bidder, as a result of
a subsequent bid made at the auction, Carrington will be entitled
to credit the amount of the break-up fee and the maximum expense
reimbursement against the purchase price of the subsequent bid
payable at closing.
The effective date of any assumption and assignment of any
assumed contract will be the closing date. Cure amounts will be
paid upon closing or as soon as the cure amount is fixed by the
Court or agreed upon by the parties. A sufficient amount will be
reserved in the event the parties cannot reach an agreement, so
that closing can occur.
A sale hearing will be held on either May 18, 2007, at 10:00 a.m.,
in the event New Century does not receive at least one qualified
topping bid, or on May 21, at 10:00 a.m., in the event that it
does.
Objections to the sale, assumption and assignment of any assumed
contracts, or the cure amounts, must be filed and served so as to
be received no later than May 14, at 4:00 p.m., Eastern Time. In
addition, non-debtor parties to the assumed contracts must file
and serve objections, if any, to adequate assurance of future
performance under the assumed contracts no later than May 17, at
4:00 p.m., Eastern Time.
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. The Debtors'
exclusive period to file a chapter 11 plan expires on July 31,
2007. (New Century Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
The Debtors' exclusive period to file a plan expires on July 31,
2007.
NEW CENTURY: Amends APA on Sale of Servicing Biz to Carrington
--------------------------------------------------------------
Carrington Capital Management LLC and Carrington Mortgage Services
LLC have agreed to amend a $139,000,000 asset purchase agreement
they previously entered into with New Century Financial
Corporation and its debtor-affiliates selling the Debtors'
mortgage loan servicing business to Carrington, subject to higher
and better offers.
Carrington believes and continues to believe that the provisions
of the original APA preserved the value of the Debtors' Servicing
Business.
"This agreement not only preserves and enhances the value to the
Debtors' estates of the stalking horse agreement for Carrington's
purchase of the Debtors' Servicing Business, it also provides the
Debtors additional flexibility that will permit them to pursue,
on a substantially parallel track, a sale of the Servicing
Business and the Debtors' interests in the residual interests in
the Securitization trusts relating to the New Century Portfolio-
related Assets. . . providing an opportunity for the Debtors to
maximize the value of both sets of assets," Steven K. Kortanek,
Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington,
Delaware, says.
The Official Committee of Unsecured Creditors expressed its
support for Carrington as the stalking horse bidder for the
Debtors' servicing business pursuant to the revised APA.
The material revisions to the Original APA include:
-- at the Debtors' and Creditors Committee's election, the
auction for the Servicing Business can be held in
conjunction with an auction of the Debtors' interest in
the Morgan Stanley Residual Interests, so long as, among
other things, the auction of the residuals take place on
an identical timetable to that set forth in the bidding
procedures order;
-- the break-up fee has been reduced from 3% of the gross
purchase price, approximately $4,000,000, in the Original
APA to a $2,000,000 flat amount, while the expense
reimbursement is now capped at $2,000,000;
-- the minimum qualified bid amount has been reduced from
110% of the Purchase Price to an amount equal to the sum
of the Purchase Price plus $5,000,000;
-- Carrington's rights to assert claims under the APA with
respect to the Indemnification Holdback Amount will
survive for only nine months following the closing date,
instead of for the one-year period in the Original APA;
-- any lease and subservicing agreement that Sellers and
Carrington enter into, under which Sellers are performing
servicing for Carrington post-closing, will terminate six
months after the closing date, rather than one year after
the as contemplated in the Original APA;
-- in the event the Sellers are unable to deliver title to
the New Century Portfolio-Related Assets to Carrington,
Carrington will service the assets for the servicing fee
set forth in the related Servicing Agreements for a
minimum period of three collection periods under a
subservicing agreement, and either party will provide at
least 20 days prior written notice of their intent to
terminate the subservicing agreement; and
-- Carrington will provide interim servicing to Greenwich
Capital Financial Products, Inc., for up to 30 days after
the closing of Greenwich's acquisition of the Debtors'
loans, for a servicing fee and upon terms and conditions
to be mutually agreed to by Purchaser and Greenwich.
Debtors' Servicing Business
The Debtors presently service roughly $19,000,000,000 of loans
owned by third parties. The Debtors' mortgage servicing rights
are generally established in servicing contracts with
securitization trusts or third party whole loan purchasers.
The servicer, usually New Century Mortgage Corporation, receives
a servicing fee equal to 0.50% per annum of the outstanding
principal balance of each loan in the mortgage servicing
portfolio. The servicing fees, which are payable in 12 equal
monthly installments, are typically collected from the monthly
payments made by the borrowers on the loans.
The Debtors also receive other remuneration for loan servicing
including float benefits representing interest earned on
collection accounts where mortgage payments are held pending
remittance to investors, as well as mortgagor-contracted fees
like late fees and, in some cases, prepayment penalties.
For the fiscal year ended December 31, 2006, the Debtors estimate
that they collected roughly $84,000,000 of servicing fees and
$3,000,000 of prepayment penalties, yielding roughly $64,000,000
of servicing income after amortization of MSRs.
In addition, Debtor entities, like NC Residual IV Corporation,
own residual or other interests in mortgage-backed securities,
thus giving the estates an additional significant economic
interest in the proper servicing of the securitized mortgage
loans.
Loan servicing typically includes:
-- collecting and remitting loan payments received from the
borrowers;
-- making required advances;
-- accounting for principal and interest;
-- customer service;
-- holding escrow or impound funds for payment of taxes and
insurance; and, if applicable,
-- contacting delinquent borrowers and supervising foreclosures
and property dispositions in the event of unremedied
defaults.
Servicing contracts generally require the servicer to advance
principal, interest, and certain "property protection" costs like
taxes and insurance with respect to delinquent mortgage loans,
unless the amounts are determined to be unrecoverable from the
related loans. The Advances receive a priority of payment in the
securitization trust documents, but they also require the
servicer to have substantial working capital to finance them.
While profitable, the Loan Servicing Business is also among the
most fragile of the Debtors' operations. It depends on
maintaining a stable and motivated workforce, particularly since
servicing loans, especially subprime loans in default, requires
sophistication concerning the legal and practical issues that
affect proper loan servicing.
Although the Debtors have not had sufficient resources or access
to credit to originate loans, the Debtors continue to operate
their Servicing Business and comply with obligations under their
agreements with indenture trustees and other parties to provide
servicing for mortgage loans. However, the Debtors' liquidity
has been additionally constrained by their being required to
provide necessary loan servicing advances from their own working
capital. Over the last month, the Debtors have had daily
dialogue with their regulators as to how the Servicing Business
will continue to operate.
Carrington and its affiliates own primary interests in 12
securitization trusts established from 2004 to 2006, which hold
roughly $8,600,000,000 of mortgage loans that the Debtors
originated and sold to the securitization trusts. NCMC is the
servicer of the mortgage loans held in the Carrington
Securitization Trusts. The Carrington Securitization Trusts
provide a significant portion of the revenue realized by the
Debtors' Servicing Business.
Carrington is represented in the Debtors' cases by Thomas S.
Kiriakos, Esq., at Mayer Brown Rowe & Maw LLP, in Chicago,
Illinois, and Steven K. Kortanek, Esq., at Womble Carlyle
Sandridge & Rice, PLLC, in Wilmington, Delaware.
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. The Debtors'
exclusive period to file a chapter 11 plan expires on July 31,
2007. (New Century Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
The Debtors' exclusive period to file a plan expires on July 31,
2007.
NORANDA ALUMINUM: High Debt Leverage Spurs S&P's B+ Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to Noranda Aluminum Holding Corp. Noranda
Aluminum is being acquired by Apollo Management from Xstrata PLC
(BBB+/Stable/A-2) for $1.2 billion, of which $1.0 billion is
funded with debt at Noranda Aluminum.
Standard & Poor's will assign ratings to the proposed $750 million
secured bank loan and $510 million unsecured floating-rate notes
in the coming days. The outlook is stable.
"The ratings on Noranda Aluminum reflect the company's high debt
leverage and unstable profitability owing to its exposure to
cyclical aluminum prices," said Standard & Poor's credit analyst
Donald Marleau. Furthermore, the company's acquisition by a
private equity company evinces a decidedly aggressive financial
policy that emphasizes shareholder returns. Countering these
weaknesses are the company's integration, which ensures secure
supply of critical inputs and contributes some operating
diversity, as well as forward sales contracts that lock in
currently strong aluminum prices for about one-third of production
through 2010. As well, Noranda Aluminum currently benefits from
the combination of cyclically high aluminum prices and an
improving cost position relative to offshore competitors brought
about by a weaker U.S. dollar.
A commodity company's cost profile is a critical rating factor,
and Noranda Aluminum's upstream segment, which accounted for more
than 80% of EBITDA in 2006, currently has a slightly better-than-
average cost profile, although this would weaken with an
appreciation of the U.S. dollar or with the ramp-up of new lower
cost aluminum smelters. The profitable operation of Noranda
Aluminum's New Madrid, Mo., aluminum smelter depends significantly
on the continued good performance of its bauxite and alumina joint
venture with Century Aluminum (BB-/Stable/--) and the continuation
of its attractive electricity supply arrangements with Ameren
Corp. (BBB-/Watch Neg/A-3). Unlike many smelters whose alumina
and power costs are linked to London Metals Exchange aluminum
prices, unit input costs at New Madrid are effectively fixed,
giving the operation an unusually high degree of operating
leverage, which was well demonstrated by the company's sharply
stronger margins in 2006.
The stable outlook is predicated on aluminum markets and Noranda
Aluminum's cash flow remaining strong enough to reduce its
currently heavy debt burden. The use of forward sales contracts
provides considerable stability in projected cash flow, but the
company must preserve its ability to deliver metal under the
contracts. The current rating takes into account the equity
sponsor's track record and the currently aggressive debt leverage,
but a shift to a more aggressive financial stance to support
shareholder-friendly initiatives, such as increasing debt to fund
dividends, would likely contribute to a downgrade of one or more
notches for the corporate rating or the proposed debt issues. On
the other hand, the rating on the company is likely constrained to
the 'B' category in the absence of enhanced operating diversity,
measures to mitigate earnings volatility, or a materially lower
debt burden.
NORANDA ALUMINUM: Moody's Rates $250 Million Credit Pact at Ba2
---------------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating to
Noranda Aluminum Acquisition Corporation and a B1 probability of
default rating.
At the same time, Moody's assigned a Ba2 rating to the company's
$250 million secured, guaranteed revolving credit agreement, a Ba2
rating to its $500 million secured, guaranteed term loan B, a B3
rating to its senior unsecured guaranteed floating rate notes due
2015, and an SGL-1 speculative grade liquidity rating. Proceeds
from the term loan B and the floating rate notes, together with an
equity infusion from Apollo Management L.P. will be used to
finance the purchase of Noranda by Apollo from Xstrata A.G. The
purchase price is $1.15 billion. The rating outlook is stable.
This is the first time Moody's has rated Noranda.
Noranda's B1 corporate family rating reflects its limited size,
dimensioned by its single smelter operation and four rolling
mills, its relatively high leverage following the Apollo
acquisition (roughly 3.8x on a pro-forma basis at year-end 2006),
its exposure to a single essentially commodity-priced product, and
its higher cost base compared to many of its larger integrated
competitors. Although the company has downstream fabricating
operations, their contribution, while stable, is relatively modest
compared with the degree of leverage the company has to the
performance of its primary upstream aluminum operations. Positive
factors supporting the ratings include the earnings and cash flow
stability provided by the company's significant hedged aluminum
position over the next several years, captive bauxite and alumina
production through its joint venture, which fully supplies its
primary input requirements, its modernized and well maintained
plants, and the company's position in value-added aluminum
products both in its primary business (billet and rod) and its
downstream business. However, the rating incorporates Moody's
view that aluminum prices will contract over the next twelve to
fifteen months, leading to softening performance in the primary
business. As a consequence, debt reduction could be slower than
anticipated.
Moody's views Noranda as principally a primary aluminum producer.
While the company has downstream operations through its four
rolling mills, the majority of revenues and EBITDA, as well as
earnings and cash flow volatility are derived from the upstream
segment. The company is US-based and, with roughly 254,000 tonnes
of primary aluminum production, has an approximate 10% share of US
production. The company also has a 50% interest in a 1.2 million
metric tonne per year alumina refinery in Gramercy, Louisiana and
related bauxite assets in Jamaica, which allows the company to be
self-sufficient in its smelter input requirements. In addition,
the company sells bauxite and alumina, including chemical grade
alumina that exceeds its internal requirements. These third party
sales help to lower the overall primary aluminum production costs
on a net basis. In its downstream operations, the majority of
production is derived from the Huntingdon site, which consists of
two rolling mills having a production capacity of approximately
91,000 metric tonnes. A substantial investment in this facility
was completed in 2001 improving its cost efficiency and
contributing to a significant expansion in the company's position
in the foil market, where it supplies slightly more than 22% of
North American demand. Products produced include HVAC finstock,
the majority of output, as sell as semi-rigid containers, and
flexible packaging among others. Moody's views this business
segment as having relatively stable performance through the metal
cycle but due to the nature of the business, being a margin-on
metal-construct, sees limited margin growth opportunities. Volume
levels remain a critical factor in performance. Given
expectations for continued strength in the commercial construction
market and, therefore, HVAC finstock requirements, this segment is
expected to continue to perform well.
The stable outlook reflects Moody's view that Noranda will
continue to demonstrate solid earnings and positive cash flow
generation over the next 12 to 15 months as the fundamentals for
aluminum prices and the primary aluminum market remain reasonably
favorable and the company's hedged position for the balance of
2007 and 2008 will ensure a reasonable level of EBITDA. The
outlook also captures Moody's expectation that Noranda will focus
on reducing its total amount of outstanding debt with free cash
flow.
The revolving credit facility and term loan B are fully secured by
principally all assets and benefit from upstream guarantees from
Noranda's domestic operating subsidiaries. Under Moody's loss
given default rating methodology, these facilities are rated two
notches above the corporate family rating as the respective
instruments are at parity in the capital structure and command a
higher recovery rate having a first lien security pledge. The
unsecured notes, which are also guaranteed by Noranda's domestic
operating subsidiaries, are rated two notches below the corporate
family rating given their position in the liability waterfall.
Although the senior unsecured notes include a PIK interest option
at the company's discretion, this feature does not add any lift to
the rating. Noranda's underfunded pension position and lease
exposures are modest.
The SGL-1 speculative grade liquidity rating reflects Moody's
expectation that Noranda will not need to draw on its $250 million
revolving credit facility over the next 12 to 15 months. While
Moody's expects aluminum prices to retreat from current levels,
Moody's believes they will continue at levels that will allow for
the company to cover its working capital and capital expenditure
requirements, and be free cash flow generative over then next 12
to 15 months. Covenants in the revolver and term loan are
incurrence based.
Assignments:
Issuer: Noranda Aluminum Acquisition Corporation
* Corporate Family Rating, Assigned B1
* Probability of default rating, Assigned B1
* Senior Secured Bank Credit Facility, Assigned Ba2
(LGD2, 27%)
* Senior Unsecured Regular Bond/Debenture, Assigned B3,
(LGD5, 81%)
* Speculative Grade Liquidity Rating, Assigned SGL-1
Headquartered in Franklin, Tennessee, Noranda produces
approximately 255,000 metric tons of primary aluminum and 225,000
metric tonnes of fabricated products and generated revenues of
$1.3 billion in 2006.
NORTH SILVER: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: North Silver Lake Lodge, LLC
11990 San Vincente Boulevard, Suite 200
Los Angeles, CA 90049
Bankruptcy Case No.: 07-21859
Chapter 11 Petition Date: April 26, 2007
Court: District of Utah (Salt Lake City)
Judge: William T. Thurman
Debtor's Counsel: Penrod W. Keith, Esq.
Durham Jones & Pinegar
111 East Broadway, Suite 900
Salt Lake City, UT 84111
Tel: (801) 415-3000
Fax: (801) 415-3500
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
OMNOVA SOLUTIONS: S&P Rates Proposed $150 Million Term Loan at B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' senior
secured debt rating to OMNOVA Solutions Inc.'s proposed
$150 million senior secured term loan B due 2014. The term loan
rating is the same as the corporate credit rating, with a recovery
rating of '3', indicating the expectation for meaningful (50%-80%)
recovery of principal in the event of a payment default. The
ratings are based on preliminary terms and conditions.
At the same time, Standard & Poor's affirmed the 'B+' corporate
credit rating on Fairlawn, Ohio-based OMNOVA. The outlook is
stable.
"The ratings reflect OMNOVA's business position as a niche
provider of emulsion polymers, specialty chemicals, and decorative
products to mature and highly competitive markets," said Standard
& Poor's credit analyst David Bird. The ratings also reflect
OMNOVA's exposure to volatile raw-material costs, many of which
are derived from oil and natural gas, and its highly leveraged
financial profile. These attributes are partially offset by
competitive business positions as the No. 1 or No. 2 supplier in
each of its key end markets, and moderate product diversification
OMNOVA was created in October 1999 as a spin-off of GenCorp Inc.'s
polymer products businesses. The performance chemicals division,
which accounts for approximately 63% of pro forma revenues,
focuses on the manufacture of latex and a portfolio of specialty
chemicals. The company is the second-largest producer of styrene
butadiene latex, which is used as an adhesive in carpet-backing
applications and in manufacturing coated paper. The decorative
products division (about 37% of pro forma revenues) focuses on
polyvinyl chloride and paper-based decorative surface products.
Proficiency in vinyl applications and design capabilities support
the company's well-established global share of commercial wall
coverings and good positions in the North American coated fabrics
and decorative laminates markets.
ON SEMICONDUCTOR: March 30 Balance Sheet Upside-Down by $157 Mil.
-----------------------------------------------------------------
ON Semiconductor Corporation disclosed that as of March 30, 2007,
the company listed total assets of $1.4 billion, total liabilities
of $1.5 billion, and minority interests of $19 million, resulting
in a total stockholders' deficit of $157.2 million.
Total revenues in the first quarter ended March 30, 2007, were
$374.2 million, a decrease from the first quarter ended March 31,
2006, of $334 million. Total revenues during the first quarter
included about $347.8 million of product revenues and about
$26.4 million of manufacturing services revenues. During the
first quarter of 2007, the company reported net income of
$54 million, up from a net income of $40.4 million for the first
quarter of 2006.
First quarter 2007 results include about $3.3 million associated
with stock based compensation expense. During the fourth quarter
of 2006, the company reported net income of $87.4 million. Fourth
quarter 2006 results included about $3 million associated with
stock based compensation expense and a gain of $10.2 million from
a favorable insurance settlement and idle real property sales.
"The first quarter of 2007 was a seasonally slower period for the
semiconductor industry. Our consumer driven end-markets of
Computing, Consumer Electronics and Wireless, in particular,
experienced some headwinds as anticipated in the first quarter,"
said Keith Jackson, ON Semiconductor president and chief executive
officer. "Despite the weaker demand environment in the consumer
driven end-markets during the first quarter of 2007, I am excited
about how our overall business performed with product revenues at
over $347 million and product revenue gross margins at about 40
percent. We believe the inventory correction that has taken place
in the industry over the past two quarters is largely behind us
and as we look into the second half, we are beginning to see our
backlog fill in nicely. We continue to expect a strong second
half of 2007."
Second Quarter 2007 Outlook
"Based upon product booking trends, backlog levels, anticipated
manufacturing services revenue and estimated turns levels, we
anticipate that total revenues will be approximately $375 to
$385 million in the second quarter of 2007," Mr. Jackson said.
"We also anticipate that approximately $25 million of our total
revenues will come from manufacturing services revenue. While
backlog levels at the beginning of the second quarter of 2007 were
down slightly from backlog levels at the beginning of the first
quarter of 2007, they still represent approximately 85 percent of
our anticipated second quarter 2007 revenues. We expect that
average selling prices for the second quarter of 2007 will be down
approximately one to two percent sequentially. We expect our
product gross margin in the second quarter to be approximately
flat with the first quarter of 2007 and expect our manufacturing
services gross margin to be similar to the first quarter of 2007.
We currently expect our stock based compensation in accordance
with FAS No. 123 (R) to be approximately $3 to $4 million in the
second quarter of 2007."
About ON Semiconductor
ON Semiconductor Corporation of Phoenix, Arizona (NASDAQ: ONNN) --
http://www.onsemi.com/-- designs, manufactures, and markets power
and data management semiconductors, and standard semiconductor
components worldwide. It offers automotive and power regulation
products.
OSI RESTAURANT: S&P Holds B+ Rating on Increased Term Loan
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its bank loan and
recovery ratings on OSI Restaurant Partners Inc.'s proposed senior
secured facilities, following the announcement that the company
will increase the term loan principal amount by $150 million to
$1.23 billion. The secured loan rating is 'BB-' and the recovery
rating is '1', indicating the expectation for a full (100%)
recovery of principal in the event of a payment default.
Other changes to the debt financing structure include a $150
million reduction in the size of the proposed senior unsecured
notes due 2015. Proceeds from the new term loan will be used to
offset the decrease in senior unsecured notes.
Ratings List
OSI Restaurant Partners Inc.
Corporate credit rating B+/Negative/--
Secured debt BB- (Recovery rtg: 1)
Senior unsecured debt B-
PARKER & PARSLEY: Moody's Reviews Ratings on Share Buyback Program
------------------------------------------------------------------
Moody's Investors Service placed Pioneer Natural Resource
Company's Ba1 corporate family rating, Ba1 probability of default,
and Ba1 senior unsecured note ratings under review for downgrade.
The rating outlook had been negative.
The actions reflect PXD's expanded share buyback program and long-
awaited announcement that it will form and take public two master
limited partnerships. The full form and credit impact of those
actions will unfold over time. The review for downgrade signals a
potential for structural or leveraging outcomes that could be
incompatible with the existing ratings. In addition to trading at
the higher cash flow multiplies of a MLP, the MLP's would enable
PXD to receive direct pure-play market valuations of its
Sprayberry and Raton Basin properties.
The negative outlook had already reflected PXD's ongoing strategic
deliberations, insufficiently competitive unit full-cycle
economics through 2006, and ongoing capital spending in excess of
cash flow. Moody's has believed that PXD's performance increased
the potential for remedial actions that could be incompatible with
its ratings, including that stock buybacks would remain a material
element of PXD's plan, that it has been evaluating the potential
benefits of forming an MLP for over a year, and that leveraging
acquisitions could be an operational remedy.
While PXD has reduced leverage with asset sales, it has continued
to display comparatively weak patterns of (i) organic (drillbit)
finding and development costs, (ii) organic reserve replacement,
(iii) total unit full-cycle costs, and (iv) leveraged unit cash
operating margin coverage of drillbit and total reserve
replacement costs. In the U.S., PXD's 2006 drillbit finding and
development cost was a very high $39/boe, well above sector
averages, and organic replacement of U.S. production with U.S.
reserve additions was a low 70%. PXD's worldwide 2006 drillbit
finding and development costs were $36/boe. While 2006 all-
sources reserve replacement costs were a more competitive $18/boe,
this benefited from PXD's purchase of properties containing high
proportions of proven undeveloped reserve volumes that,
inherently, also have a comparatively lower net present value.
The credit impact of the MLP's will be a function of (i) the
parent's pro-forma reserve and production scale, diversification,
and property risk mix, (ii) the amount debt at the parent relative
to the parent's proven developed (PD) reserves and production,
(iii) the health of the parent's reserve replacement effort as
gauged by its unit full-cycle economics and leveraged recycle
ratio, (iv) cash margin outlook relative to sustaining capital
spending, (v) the outlook at the time for further shareholder-
friendly actions, and (vi) the sharp structural subordination to
leverage at the MLP level. With 2007 capital spending likely to
exceed cash flow, buyback activity would also likely boost
leverage on reserves.
Moody's believes the MLP's would eventually hold comparatively
large proportions of PXD's lower risk properties. Moody's also
anticipates that the MLP's may eventually, though not initially,
have significant debt in their capital structures. Given the
comparatively higher cash flow multiples at which an MLP's equity
units trade, Moody's expects the MLP's to be used as basin
consolidation acquisition vehicles. The credit impact of the
increased stock buyback program will be a function of the degree
of increased leverage, PXD's operating trends at the time, the
scale of the MLP impact, and the sector outlook at the time.
Per Moody's global ratings methodology for independent exploration
and production firms, PXD maps to a Ba3 corporate family rating
two notches lower than its actual Ba1 rating. However, the
methodology rating remains weighted by very high full-cycle costs
during PXD's transition period and still comparatively low up-
cycle leveraged unit cash margin coverage of reserve replacement
costs.
The rating uplift from the indicated methodology rating to the Ba1
rating reflects improving production trends, a comparatively large
asset base, including PD reserves of 924 mmboe, adjusted for
volumetric production payments, balanced between oil (46%) and
natural gas (54%), and pro forma leverage (before the impact of
the enlarged stock buyback program and two new MLP's) that maps
within the Baa-category. The ratings benefit from PXD's rising
production (7% increase) compared to pro forma 2005 production
after the divestiture of deep water Gulf of Mexico (GOM) reserves,
a reallocation of a large proportion of capital spending to lower
risk onshore activity, and a continued supportive oil and natural
gas price environment.
However, while PXD's operating scale and diversification largely
map to a Baa-range, the important catalysts for forward strength
or weakness continue still map to the Ba, B, and Caa ranges.
Catalysts include all-sources and drillbit reserve replacement
costs, total unit full-cycle costs, and leveraged full-cycle
ratio.
Pioneer Natural Resources is headquartered in Dallas, Texas.
PINE VALLEY: Court Extends Creditor Protection Until May 3
----------------------------------------------------------
Pine Valley Mining Corporation reports that the BC Supreme Court
has granted a further extension of the order in favor of the
company and its subsidiaries under the Companies' Creditors
Arrangement Act (Canada) first granted on October 20, 2006.
The extension will enable the company and its subsidiaries to
continue to pursue a transaction which would form the basis of a
plan of arrangement with their creditors.
The Order, as extended, will remain in effect for a period ending
on May 3, 2007, during which time creditors and other third
parties will continue to be stayed from terminating agreements
with the Company and its subsidiaries or otherwise taking steps
against them.
Pine Valley Mining Corporation -- http://www.pinevalleycoal.com/
-- (TSX: PVM)(OTCBB: PVMCF) operates the Willow Creek Mine which
has a large supply of good quality PCI and metallurgical coal
reserves in British Columbia. The company has completed
construction of its infrastructure at Willow Creek and has been
making commercial coal shipments since September 2004.
On October 20, 2006, the Supreme Court of British Columbia granted
an order providing the company creditor protection under the
Companies' Creditors Arrangement Act. Ernst & Young Inc. was
appointed by the Court as the Monitor in the CCAA proceedings.
RADIO ONE: Posts $22.9 Mil. Net Loss in Fourth Qtr. Ended Dec. 31
-----------------------------------------------------------------
Radio One Inc. reported net broadcast revenue of about
$89.2 million for the fourth quarter ended Dec. 31, 2006, a
decrease from $90.5 million for the same period in 2005. The
company reported a net loss of $22.9 million for the fourth
quarter 2006, as compared with a net income of $9.5 million for
the same period in 2005. Net loss applicable to common
stockholders for the quarter was about $22.9 million.
For the year 2006, the company reported net broadcast revenue of
about $367 million, as compared with $368.7 million for the year
2005. Net loss for the year 2006 was $4.1 million, as compared
with net income of $47.8 million for the year 2005.
Alfred C. Liggins, III, Radio One's chief executive officer and
president stated, "This was another soft quarter for the radio
industry and while Radio One underperformed the industry, our
problems are truly isolated to one market - Los Angeles. Given
the significant changes we implemented at our LA station late last
year, I am confident that that market will be a growth driver for
us in the not too distant future. The early research is very
positive and we have a great team in place out there. Overall, I
am optimistic that, in the back half of 2007, we will have an
opportunity to resume our historical out-performance of the radio
industry."
Net broadcast revenue decreased to about $89.2 million for the
quarter ended Dec. 31, 2006 from about $90.6 million for the
quarter ended Dec. 31, 2005. This decrease in net broadcast
revenue was due primarily to a significant decline in net
broadcast revenue at our Los Angeles radio station. Net broadcast
revenue is reported net of agency and outside sales representative
commissions of about $10.9 million and $11 million for the
quarters ended Dec. 31, 2006 and 2005, respectively.
Operating expenses, excluding depreciation and amortization,
stock-based compensation and non-cash compensation, increased to
approximately $54.6 million for the quarter ended Dec. 31, 2006,
from about $53.3 million for the quarter ended Dec. 31, 2005. The
increase in operating expenses resulted primarily from additional
marketing and promotional spending, higher talent and programming
content costs and additional music royalties expenses.
Minority interest in income of subsidiaries increased to about
$1.1 million for the quarter ended Dec. 31, 2006, from $154,000
for the quarter ended Dec. 31, 2005, or 603%. The increase in
minority interest in income of subsidiaries is due primarily to
the improved net income of Reach Media for the quarter ended
Dec. 31, 2006 compared to the same period in 2005.
The company reported selected balance sheet data as of Dec. 31,
2006, with cash and cash equivalents of $32.4 million, net
intangible assets of $1.9 billion, total assets of $2.2 billion,
total debt of $937.5 million, total liabilities of $1.2 billion
and total stockholders' equity of $1 billion.
Other pertinent financial information for the quarter ended
December 31, 2006 includes capital expenditures of about
$5.2 million, compared to about $3 million for the quarter ended
Dec. 31, 2005. Additionally, as of December 31, 2006, we had total
debt of about $905.1 million.
Update on 10-K Filing
At the time of the report, the company has neither completed its
review of its historical stock option granting practices nor
reached final conclusions regarding the amount of additional non-
cash compensation expense the company will have to record, the
periods in which such expense would be recorded or the related tax
impact of the correction of the stock option measurement dates.
Because it has not completed the review, it was unable to file its
annual report on Form 10-K for the year ended Dec. 31, 2006, by
the due date March 16, 2007. The company intends to file its
annual report on Form 10-K and restated financial statements as
soon as practicable after the completion of the company's review.
About Radio One
Headquartered in Lanham, Maryland, Radio One Inc., (NASDAQ: ROIAK
and ROIA) -- http://www.radio-one.com/-- is a radio broadcasting
company that owns and operates 70 radio stations located in 22
urban markets in the U.S. Additionally, Radio One owns Giant
Magazine and interests in TV One LLC, a cable and satellite
network programming primarily to African-Americans and Reach Media
Inc., owner of the Tom Joyner Morning Show and other businesses
associated with Tom Joyner. Radio One also operates the only
nationwide African-American news/talk network on free radio and
programs "XM 169 The POWER," an African-American news/talk
channel, on XM Satellite Radio.
* * *
Moody's Investors Service has placed Radio One Inc.'s ratings,
including the company's Ba3 corporate family rating, on review for
possible downgrade following the delay in the filing of the
company's Dec. 31, 2006, Form 10-K while it completes a review of
its historical stock option granting practices.
The company, on the other hand, carries Standard & Poor's Ratings
Services' 'B+' long-term corporate credit rating. The outlook is
negative.
RADNOR HOLDINGS: Court Approves Stipulation on Utility Deposits
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved a
stipulation between Radnor Holdings Corporation and its debtor-
affiliates, and Tennenbaum Capital Partners LLC and TR Acquisition
Co. Inc. for the assumption or rejection of contracts pertaining
to deposits to utility companies.
The Court previously authorized the Debtors to deliver deposits to
utility companies in connection with providing adequate assurance
of payment for post-bankruptcy utility services.
In that order, TCP was granted an allowed super-priority
administrative expense claim for $128,835,557 and replacement
liens on and security interests in all assets of the Debtors'
estates. These replacement liens are first priority liens on and
security interests in all of the utility deposits.
TR Acquisition subsequently entered into a purchase agreement with
the Debtors, pursuant to which it acquired designation rights to
assume, assign, or reject the Debtors' unexpired leases and
executory contracts. The purchase agreement was concurrent with
the sale of substantially all of the Debtors' assets to TR
Acquisition.
While the Debtors, TCP, and TR Acquisition agree that the
purchaser is entitled to all utility deposits, the parties
interpret differently the treatment of the utility deposits under
the purchase agreement. However, the moving parties agree that
all utility deposits are subject to TCP's replacement lien, and
should be distributed to TCP to reduce TCP's remaining allowed
secured claim.
The parties agreed in the Court-approved stipulation that:
a) for utility contracts assumed by the Debtors and assigned to
the purchaser, the utility deposits be turned over to
TR Acquisition;
b) for utility contracts rejected by the Debtors, the utility
deposits be turned over to the purchaser, but TCP's
remaining allowed secured claim will be reduced by the
amount of the utility deposits;
c) the purchaser will reimburse the Debtors for all allowed
post-closing attorney fees and expenses associated with the
resolution of the utility deposits; and
d) the Debtors consent to relief from the automatic stay in
favor of TCP to permit the purchaser to obtain possession
and dispose the utility deposits.
Based in Radnor, Pennsylvania, Radnor Holdings Corporation
-- http://www.radnorholdings.com/-- manufactured and distributed
a broad line of disposable food service products in the United
States, and specialty chemicals worldwide. The Debtor and its
affiliates filed for chapter 11 protection on Aug. 21, 2006
(Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and
Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher,
represent the Debtors. Donald J. Detweiler, Esq., and Victoria
Watson Counihan, Esq., at Greenberg Traurig, LLP, serve the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed total assets of
$361,454,000 and total debts of $325,300,000.
RADNOR HOLDINGS: Court Okays Rejection of 10 Executory Contracts
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Radnor Holdings Corporation and its debtor-affiliates to reject 10
executory contracts with utility companies, and to assume and
assign a certain natural gas contract to TR Acquisition Co. LLC,
the Debtors' purchaser.
TR Acquisition acquired rights to designate the Debtors' various
executory contracts and unexpired leases for assumption,
assignment, or rejection, pursuant to a purchase agreement
concurrent with the sale of substantially all assets of the Debtor
to the purchaser. In exercise of its designation rights, TR
Acquisition required the Debtors to reject these contracts:
Entities Contract
-------- --------
Columbia Gas of Ohio Natural Gas Contract -
Mt. Sterling, OH
PG&E Natural Gas Contract and
Electricity Contract -
Corte Madera, CA
Atmos Natural Gas Contract -
StyroChem
Georgia Power Electricity Contract -
Stone Mountain
Municipal Utilities Electricity Contract -
Higginsville
American Electric Power Electricity Contracts -
Shreveport and Mt. Sterling
SRP Electricity Contract -
Tolleson
Duke Power Electricity Contract -
Mooresville
The Purchaser also recommended that the Debtors assume and assign
its Mooresville Natural Gas Contract with PSNC Energy to TR
Acquisition.
About Radnor Holdings
Based in Radnor, Pennsylvania, Radnor Holdings Corporation
-- http://www.radnorholdings.com/-- manufactured and distributed
a broad line of disposable food service products in the United
States, and specialty chemicals worldwide. The Debtor and its
affiliates filed for chapter 11 protection on Aug. 21, 2006
(Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and
Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher,
represent the Debtors. Donald J. Detweiler, Esq., and Victoria
Watson Counihan, Esq., at Greenberg Traurig, LLP, serve the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed total assets of
$361,454,000 and total debts of $325,300,000.
RARE RESTAURANT: S&P Junks Rating on Proposed $100 Million Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Woodland Hills, California-based Rare Restaurant
Group LLC, the owner and operator of Mastro's Steakhouse. The
outlook is stable.
At the same time, S&P assigned a 'CCC+' rating to the company's
proposed $100 million senior secured notes due 2014, with a
recovery rating of '3', indicating the expectation for meaningful
(50%-80%) recovery of principal in the event of payment default.
The notes have a second lien behind the $10 million revolver.
Proceeds from the senior secured notes, combined with a
$10 million revolving facility (unrated), $20 million seller
subordinated notes (unrated), and $70 million common equity units
contribution, will be used to fund the purchase of Rare Restaurant
Group by Kinderhook Capital Fund II LLC and Soros Strategic
Partners L.P. for approximately $180 million, excluding fees and
expenses. Pro forma for the transaction, Kinderhook owns 42.9%
of the company and Soros Strategic Partners will own 45.0%, and
the management and other investors will own the remaining 12.1%.
"The stable outlook incorporates our expectations that the company
will maintain consistent operating performance," said Standard &
Poor's credit analyst Diane Shand.
RICHARD KORTAN: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtors: Richard Kortan
Pamela Kortan
dba Rollins Chiropractic
376 Street Andrews
Lane Gurnee, IL 60031
Bankruptcy Case No.: 07-07395
Chapter 11 Petition Date: April 24, 2007
Court: Northern District of Illinois (Chicago)
Judge: Eugene R. Wedoff
Debtors' Counsel: Forrest L. Ingram, Esq.
Forrest L. Ingram, P.C.
79 West Monroe Street, Suite 1210
Chicago, IL 60603
Tel: (312) 759-2838
Fax: (312) 759-0298
Total Assets: $896,891
Total Debts: $1,368,101
Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
JP Morgan Chase Bank Line of Credit $107,002
1820 East Sky Harbor
Circle South
Phoenix, AZ 85034
National City Credit Card $100,039
P.O. Box 856176 Purchases
Louisville, KY 40285
Charter One Bank Line of Credit $99,439
1215 Superior Avenue
Cleveland, OH 44114
FIA CSNA Credit Card Purchases $58,212
Sallie Mae Servicing Educational $47,744
Citibank Credit Cards $44,332
GMAC Auto Lease $39,554
Capital One Note Loans $36,148
U.S. Bank Line of Credit $29,599
Nissan-Infiniti Lt Auto Lease $28,574
Bank of America Credit Cards $27,647
Federated Financial Corp. Credit Card Purchases $12,319
MBNA America Credit Card Purchases $12,091
Discover Credit Cards $6,207
Wells Fargo Financial Credit Cards $5,657
Sears Credit Cards $4,914
Royal Bank of Scotland N.B. Credit Cards $2,914
First Equity Card Credit Card $1,552
Sam's Club Credit Card $1,455
Nationwide Credit & Co. Collection $776
RINKER BOAT: Modest Performance Cues Moody's to Downgrade Ratings
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Rinker Boat
Company following its continuing moderating operating performance
and the likelihood that it will need to amend its credit facility.
The ratings outlook is stable.
"The downgrade reflects our concerns that the company's modest
operating performance may linger as the marine industry cyclical
downturn continues." said Kevin Cassidy, Vice President/Senior
Analyst at Moody's Investors Service. Cassidy also noted that
"the downgrade reflects the fact the company's credit metrics are
no longer consistent with a B2 consumer durable company and that
the stable outlook reflects our view that the company will likely
be able to amend its credit facility under the terms that are
currently contemplated".
These ratings/assessments were downgraded:
* Corporate family rating to B3 from B2;
* Probability of default rating at B3 from B2;
* Senior Secured Term Loan to B2 (LGD 3, 40%) from
B1 (LGD 3, 40%);
* Revolving Credit Facility to B2 (LGD 3, 40%) from
B1 (LGD 3, 40%)
Rinker Boat Company's is headquartered in Syracuse, Indiana
SAINT VINCENTS: Wants to Sell Castleton Property for $1.2 Million
-----------------------------------------------------------------
Saint Vincents Catholic Medical Center of New York and its debtor-
affiliates seek authority from the U.S. Bankruptcy Court for the
Southern District of New York to sell a parcel of real property
located at Block 134, Lot 53, at 690 Castleton Avenue, in Staten
Island, New York, to Doug Candella for $1,200,000.
The 690 Castleton Property is a commercial space, which is
currently subject to two leases:
1. Richmond University Medical Center leases 4,313 square feet
of business space on the first floor of the Property for an
annual base rent of $116,451. The space is used for
medical offices by the WIC Program and the Behavioral
Health Clinic run by RUMC. The RUMC Lease runs from
January 1, 2007 through December 31, 2011. Pursuant to its
terms, the RUMC Lease can be assigned by the Debtors
without any required consents.
2. Pax Christ, a non-debtor affiliate, occupies 4,255 square
feet of business space on the second floor of the Property
pursuant to an informal agreement where Pax Christi has
been making month-to-month payments to the Debtors. The
space is currently home to the Pax Christi Hospice.
In anticipation of a sale of the Property and in order to
have a written lease that will remain in effect following a
sale, the Debtors have entered into a formal lease
agreement for a term of five years, commencing on Jan. 1,
2007, with the sole intent of entering into a sublease or
other comparable arrangement with Pax Christi.
The Debtors have determined that 690 Castleton Property is not
necessary to their reorganization.
Through the efforts of Massey Knakal Realty Services, the
Property fielded offers from 11 potential purchasers, Andrew M.
Troop, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
relates. Mr. Candella's bid is currently the highest offer for
the Property.
Accordingly, the Debtors entered into a purchase agreement with
Mr. Candella on March 28, 2007, for the sale of the Property,
subject to higher and better bids.
The salient terms of the Purchase Agreement are:
(a) The Property will be sold to Mr. Candella, free and clear
of all liens, claims and encumbrances;
(b) Mr. Candella will pay $1,200,000 for the Property. About
$100,000 will be paid to the Debtors after signing the
Contract of Sale, and the remaining $1,100,000 will be
paid at the closing of the transaction;
(c) The RUMC and Pax Christi Leases will be assigned to the
Successful Bidder; and
(c) If the transaction is consummated with another Qualified
Bidder, Mr. Behar will be entitled to a $36,000 Break-Up,
which is about 3% of the total purchase price. In that
event, the Debtors will also reimburse Mr. Candella for
his cost of title examination and of preparing or updating
a survey.
The Debtors seek to subject the sale of the Property to the
Court-approved standardized bidding procedures. Interested
parties must submit their bids before May 1, 2007. The Debtors
will hold an auction on May 9, 2007, if more than one qualified
bid is received.
The Court will consider the proposed Property Sale on May 16,
2007. Objections to the Sale must be filed by May 10.
About Saint Vincents
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.
The company and six of its affiliates filed for chapter 11
protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945
through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst,
Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter
11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil,
Gotshal & Manges LLP took over representing the Debtors in their
restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid &
Priest LLP, represents the Official Committee of Unsecured
Creditors. As of Apr. 30, 2005, the Debtors listed $972 million
in total assets and $1 billion in total debts.
The Debtors filed their Chapter 11 Plan of Reorganization
accompanying a disclosure statement explaining that Plan on
Feb. 9, 2007. The Court is set to consider the adequacy of the
Debtors' Disclosure Statement on May 3, 2007.
(Saint Vincent Bankruptcy News, Issue No. 51 Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
SALEM COMMUNICATIONS: Earns $3.3 Mil. in Fourth Qtr. Ended Dec. 31
------------------------------------------------------------------
Salem Communications Corporation reported results for the fourth
quarter ended Dec. 31, 2006, with total revenue, which increased
10.9% to $59.8 million from $53.9 million for the same quarter in
the previous year. The company's operating income for the fourth
quarter ended Dec. 31, 2006 decreased 17.5% to $10.1 million from
$12.2 million for the same quarter in 2005. Net income for the
fourth quarter in 2006 decreased 0.9% to $3.3 million.
These results reflect the reclassification of the operations of
certain stations to discontinued operations for all periods
presented. Combined, these stations had net broadcasting revenue
of about $100,000 and lost $100,000 for the quarter ended Dec. 31,
2006. These stations had net broadcasting revenue of about
$1 million and were breakeven for the quarter ended Dec. 31, 2005.
Full Year 2006 Results
For the year ended Dec. 31, 2006, total revenue increased 8.6% to
$227.8 million from $209.6 million for the year ended Dec. 31,
2005. The company's operating income increased 30.1% to
$57.9 million in 2006 from $44.5 million in 2005. Net income for
the year 2006 increased 50% to $19 million, from net income of
$12.7 million for the year 2005.
These results reflect the reclassification of the operations of
certain stations to discontinued operations for all periods
presented. Combined, these stations had net broadcasting revenue
of about $2 million and lost $200,000 for the year ended Dec. 31,
2006. These stations had net broadcasting revenue of about
$3.5 million and lost $500,000 for the year ended Dec. 31, 2005.
Other comprehensive income of $500,000, net of tax, for the year
ended Dec. 31, 2006 is due to the change in fair market value of
the company's interest rate swaps.
Balance Sheet Data
As of Dec. 31, 2006, the company had total assets of
$686.3 million and total liabilities of $448.5 million, resulting
in a total stockholders' equity $237.7 million. The company had
net debt of $360.3 million and was in compliance with the
covenants of its credit facilities and bond indentures as of Dec.
31, 2006. Its bank leverage ratio was 5.88 versus a compliance
covenant of 6.75 and its bond leverage ratio was 5.46 versus a
compliance covenant of 7.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1e0a
Commenting on the company's results, Edward G. Atsinger III,
president and chief executive officer said, "We achieved total
revenue growth of 10.9% in the fourth quarter of 2006 due to the
strong performance of our non-broadcast media business, continued
development of our News Talk stations and our consistent block
programming business. Our Internet and publishing businesses
posted $6 million in revenue, more than doubling their revenue
from the prior year. Radio broadcasting grew revenue by 5.5% to
$53.7 million, led by a 19.6% increase in revenue from News Talk
stations and by a 9.3% increase in revenue from block programming
on our Christian Teaching and Talk stations. This revenue growth
was offset by increased investment in marketing, promotion and
local programming talent at certain of our News Talk stations,
which reduced our station operating income for the quarter. We
consider these investments an important step in driving our less
developed radio stations to long-term profitability."
First Quarter 2007 Outlook
For the first quarter of 2007, Salem is projecting total revenue
to be between $55.5 million and $56 million compared to first
quarter 2006 total revenue of $52 million.
About Salem Communications
Headquartered in Camarillo, California, Salem Communications
Corporation -- http://www.salem.cc/-- is a radiobroadcasting
company focused on Christian and family-themed programming. In
addition to its radio properties, Salem owns Salem Radio
Network(R), which syndicates talk, news and music programming to
about 1,900 affiliates; Salem Radio Representatives(TM), a
national radio advertising sales force; Salem Web Network(TM), an
Internet provider of Christian content and online streaming; and
Salem Publishing(TM), a publisher of Christian-themed magazines.
* * *
Salem Communications Holding Corporation carries Moody's Investors
Service's Ba3 corporate family rating. At the same time, the
company's 7-3/4% senior subordinated notes due 2010 also carry the
rating agency's B2 probability-of-default rating and attached a
loss-given-default rating of LGD5, 88%.
SANTA FE: Exclusive Plan Filing Date Further Extended to June 12
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware further
extended Santa Fe Minerals Inc. and 15375 Memorial Corporation's
exclusive periods to:
a. file a Chapter 11 plan of reorganization through and
including June 12, 2007; and
b. solicit acceptances of that plan until Aug. 13, 2007.
As reported in the Troubled Company Reporter on Jan. 5, 2007, the
Debtors disclosed that the bulk of their activity consisted of
litigation including:
* Adversary Proceeding No. 06-50822 commenced by Santa Fe
against BEPCO, L.P., fka Bass Enterprises Production
Company, wherein Santa Fe seeks, inter alia, to
preliminarily enjoin Bass from taking further actions to
assert for itself claims that are property of the Debtors'
estates and with respect to which Santa Fe submits Bass'
post-petition actions constituted willful violations of the
automatic stay;
* the request of GlobalSantaFe Corporation, Entities Holdings,
Inc. and GlobalSantaFe Corporate Services, Inc., to
intervene in the Adversary; and
* Bass' motions to dismiss, abstain, stay, convert, appoint
a trustee, appoint and examiner, etc.
The Debtors also disclosed that their request to enter into
a management agreement and obtain credit from GlobalSantaFe
Corporate and application to retain a special counsel drew
objections from Bass.
The Debtors said however that despite their attention being
diverted to the litigation, they have begun formulating and
drafting a proposed plan of reorganization.
Headquartered in Houston, Texas, 15375 Memorial Corporation is the
sole shareholder of Santa Fe Mineral, Inc. Santa Fe Minerals is a
Wyoming based corporation dissolved in 2000. Under Wyoming law,
creditors of a dissolved corporation can recover their debts from
the dissolved corporation's shareholders, up to the value of the
assets that each shareholder received at the dissolution.
15375 Memorial and Santa Fe Minerals filed for chapter 11
protection on Aug. 16, 2006 (Bankr. D. Del. Case Nos. 06-10859 &
06-10860). John D. Demmy, Esq., at Stevens & Lee, P.C.,
represents the Debtors. No Official Committee of Unsecured
Creditors have been appointed in the Debtors' cases. When the
Debtors filed for protection from their creditors, they estimated
their assets between $100,000 to $500,000 and liabilities of more
than $100 million.
SAVVIS INC: March 31 Balance Sheet Upside-Down by $13 Million
-------------------------------------------------------------
SAVVIS, Inc.'s balance sheet as of March 31, 2007, reflected total
assets of $640.2 million and total liabilities of $653.7 million,
resulting in a total stockholders' deficit of $13.5 million.
The company's revenue for the first quarter of 2007 totaled
$205.2 million. Net income was $114.5 million for the first
quarter of 2007, as compared with a net loss of $6.8 million for
the first quarter in the previous year. Income from operations,
which included $125.2 million from the gain on the sale of non-
strategic assets, was $139 million in the first quarter 2007.
First quarter operating cash flow was $28.3 million, and cash
capital expenditures were $35.8 million, of which $12.7 million
was for previously announced growth projects, including the build-
out of four new data centers and SAVVIS' next-generation network.
Total cash and cash equivalents were $221.6 million at March 31,
2007.
Results for the first quarter of 2007 included a $125.2 million
gain on the sale of non-strategic assets, and $3.6 million of non-
recurring, colocation revenue related to the resolution of a
contractual dispute that had been reserved for in 2006. Excluding
the impact of these non-recurring items:
* first quarter 2007 revenue would be $201.6 million, up 12%
from the same period a year ago and essentially flat, as
compared with the prior quarter;
* gross profit, defined as total revenue less cost of revenue,
would be $84.9 million, up 27% from the same period a year
ago and 3% from the prior quarter, and would be 42% of
current-quarter revenue; and
* income from operations would be $10.1 million, as compared
with $3.7 million in the same period a year ago and
$11.6 million in the prior quarter.
Chief executive officer Phil Koen said, "Our first quarter
financial results reflect continued strong growth in SAVVIS' core
revenue from hosting services, with managed hosting revenue up 37%
from a year ago, and 4% from last quarter. Our customers, and
industry analysts, agree that SAVVIS provides a unique value
proposition in offering IT infrastructure as a service. Our
strong Adjusted EBITDA performance in the quarter demonstrates the
success of the SAVVIS business model in generating margin
improvement."
Cash Flow
Net cash provided by operating activities was $28.3 million in the
first quarter. Cash capital expenditures for the quarter totaled
$35.8 million, which included $12.7 million for previously
announced growth projects including the next-generation network
and the build-out of four new data centers. SAVVIS' cash position
at March 31, 2007, was $221.6 million, as compared with $98.7
million at Dec. 31, 2006, and $49.6 million at March 31, 2006.
Financial Outlook
Chief financial officer Jeff Von Deylen said, "This year is a
transitional period for SAVVIS, as we undertake two critical
growth projects: the deployment of our next-generation network and
the build-out of four new data centers. The sale of non-strategic
assets, completed in January, will fund a significant portion of
those projects. Continued growth in our hosting revenue in the
first quarter reflects our expectation that hosting will drive
SAVVIS' financial performance improvements in 2007."
The company's current expectations for 2007 financials include
total revenue in a range of $820 million to 835 million and cash
capital expenditures of $340 million to 350 million.
Stockholders' Deficit at Dec. 2006
SAVVIS Inc.'s balance sheet at Dec. 31, 2006, showed total assets
of $467,019,000 and total liabilities of $605,354,000 resulting in
a total stockholders' deficit of $138,335,000.
About SAVVIS
SAVVIS Inc. (NASDAQ:SVVS) -- http://www.savvis.net/-- provides IT
infrastructure services for enterprise applications. The company
has IT services platform in North America, Europe, and Asia.
SERENA SOFTWARE: Posts $57 Million Net Loss in Fiscal Year 2007
---------------------------------------------------------------
Serena Software, Inc. disclosed a net loss for fiscal year 2007 of
$57,212,000, as compared with a net income of $35,267,000 in
fiscal year 2006. Included in the fiscal year 2007 results were
$43,800,000 of transaction costs related to the merger transaction
involving Silver Lake Partners.
For fiscal year 2007, total revenue was $255,291,000, software
license revenue was $86,520,000, maintenance revenue was
$134,605,000, and service revenue was $34,166,000. Excluded from
revenue are $1,500,000 and $12,500,000 of maintenance revenue
written down in the purchase accounting for the company's merger
with Spyglass Merger Corporation, an affiliate of Silver Lake
Partners, for the fourth quarter and full fiscal year of 2007,
respectively.
As of Jan. 31, 2007, the company posted total assets of
$1,347,447,000 and total liabilities of $860,827,000, resulting in
a total stockholders' equity of $486,620,000. Total cash and
equivalents as of Jan. 31, 2007, was $68,455,000 and total
deferred revenue was $78,401,000.
The company's balance sheet for the fiscal year 2007 also showed
strained liquidity with total current assets of $125,005,000 and
total current liabilities of $145,907,000.
Fourth Quarter 2007 Results
Total revenue was $76,534,000 in the fourth quarter of fiscal year
2007 and represented am increase over total revenue of $70,137,000
in the fourth quarter of fiscal year 2006. Net income for the
fourth quarter 2007 was $5,180,000, as compared with a net income
for the fourth quarter of the previous year of $8,101,000.
About Serena Software
Headquartered in San Mateo, California, Serena Software Inc.,
(NasdaqGS: SRNA) -- http://www.serena.com/-- is a software
provider focused solely on the design, development, marketing and
support of software used to manage and control change in
organizations.
* * *
Serena Software Inc. carries Moody's Investors Service's B2
Corporate Family Rating.
SILVER ELMS: Moody's Rates $8 Million Class E Notes at Ba2
----------------------------------------------------------
Moody's Investors Service has assigned these ratings to Notes
issued by Silver Elms CDO II Limited:
(1) Aaa to the $873,600,000 Class A-1M Floating Rate Senior
Secured Notes due 2051;
(2) Aaa to the $151,400,000 Class A-1Q Floating Rate Senior
Secured Notes due 2051;
(3) Aaa to the $87,500,000 Class A-2 Floating Rate Senior
Secured Notes due 2051;
(4) Aaa to the $74,000,000 Class A-3 Floating Rate Senior
Secured Notes due 2051;
(5) Aa2 to the $28,000,000 Class B Floating Rate Subordinate
Secured Notes due 2051;
(6) A2 to the $13,500,000 Class C Floating Rate Junior
Subordinate Secured Deferrable Notes due 2051;
(7) Baa2 to the $12,000,000 Class D Floating Rate Junior
Subordinate Secured Deferrable Notes due 2051 and
(8) Ba2 to the $8,000,000 Class E 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 Moody's rating of the Class E
Notes addresses the ultimate receipt of the Class E Note Rated
Amount by the Stated Maturity.
Princeton Advisory Group, Inc. will manage the selection,
acquisition and disposition of collateral on behalf of the Issuer.
SOLOMON TECH: Posts $2.9 Million Net Loss in Quarter Ended Sept 30
------------------------------------------------------------------
Solomon Technologies Inc. posted a net loss of $2,911,083 on net
sales of $823,531 for the third quarter ended Sept. 30, 2006,
compared with a net loss of $1,544,163 on net sales of $3,674 for
the same period ended Sept. 30, 2005.
The increase in revenues was due to the results of the company's
newly acquired Power Electronics Division. In August 2006, the
company acquired Technipower LLC, a manufacturer of power supplies
and related equipment for the defense, aerospace and commercial
markets. The purchase price, including acquisition related costs
of approximately $420,000, was $9,665,836.
Research and development costs were $119,128 for the three months
ended Sept. 30, 2006, as compared to $0 for the three months ended
Sept. 30, 2005. The increase was the result of continued R&D
expenditures in the Power Electronics Division in the amount of
$109,128, and $10,000 of R & D expenditures in the Motive Power
Division.
Selling, general and administrative expenses increased $1,851,819,
while interest expense decreased $591,597.
At Sept. 30, 2006, the company's balance sheet showed $11,564,716
in total assets, $6,135,070 in total liabilities, and $5,429,646
in total stockholders' equity.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $3,059,012 in total current assets
available to pay $6,135,070 in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?1e06
Going Concern Doubt
UHY LLP, in Hartford, Connecticut, raised substantial doubt about
Solomon Technologies Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the company's significant recurring operating losses, use of
cash in its operating activities for several consecutive years and
deficiencies in both working capital and net assets.
About Solomon Technologies
Headquartered in Tarpon Springs, Florida, Solomon Technologies
Inc. -- http://www.solomontechnologies.com/ -- through its Motive
Power and Power Electronics divisions, develops, licenses,
manufactures and sells precision electric power drive systems,
including those utilizing its patented Electric Wheel, Electric
Transaxle and hybrid and regenerative technologies as well as
direct current power supplies and power supply systems for
defense, aerospace, marine, commercial, automotive, hybrid and all
electric vehicle applications.
SPECTRUM BRANDS: Fitch Holds CCC Issuer Default Rating
------------------------------------------------------
Fitch Ratings has affirmed the ratings of Spectrum Brands, Inc.
as:
-- Issuer default rating 'CCC';
-- $1.6 billion 6-year Credit Agreement 'B/RR1';
-- $700 million 7 3/8% Senior Subordinated Note due 2015
'CCC-/RR5'
-- $350 million 11.25% Variable Rate Toggle Interest
pay-in-kind Senior Subordinated Note due 2013 'CCC-/RR5'
The Credit Agreement and Variable Rate Toggle Interest Note have
relatively the same terms and conditions and are rated the same as
the facilities being replaced. The Outlook remains Negative.
STRUCTURED ASSET: DBRS Lowers Ratings on S. 2006-ARS1 Certificates
------------------------------------------------------------------
Dominion Bond Rating Service has downgraded Classes B1 and B2 from
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 2006-ARS1:
* $3,868,000 Mortgage Pass-Through Certificates, Series 2006-
ARS1, Class B1 to BB (low) from BB (high)
* $3,282,000 Mortgage Pass-Through Certificates, Series 2006-
ARS1, Class B2 to B (high) from BB (high)
The above actions are the result of the high level of losses
as well as the increased 90+ day's delinquency pipeline. The
mortgage loans consist of 100% fixed-rate second lien mortgage
loans, which are subordinate to senior lien mortgage loans on
the respective properties.
SURESH NARASIMHAN: Case Summary & Two Largest Unsecured Creditors
-----------------------------------------------------------------
Debtors: Suresh Narasimhan
Sanghmitra Kundu Narasimhan
42477 Lennox Court
South Riding, VA 20152
Bankruptcy Case No.: 07-11039
Type of Business: The Debtor filed for Chapter 11 protection on
November 27, 2006 (Bankr. E.D. Va. Case No.
06-11588).
Chapter 11 Petition Date: April 27, 2007
Court: Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtors' Counsel: Gregory H. Counts, Esq.
Tyler, Bartl, Gorman & Ramsdell, PLC
700 South Washington Street, Suite 216
Alexandria, VA 22314-4252
Tel: (703) 549-7178
Fax: (703) 549-5011
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtors' Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Taxes $62,000
Insolvency Unit
400 North 8th Street
P.O. Box 76
Richmond, VA 23240
Virginia Department of Taxation VA State Tax $13,000
P.O. Box 26626
Richmond, VA 23261
TIMKEN COMPANY: Posts $42 Million First Quarter Income in 2007
--------------------------------------------------------------
The Timken Company reported sales of $1,284,513,000 during the
first quarter of 2007, an increase of $1,254,308,000 over the same
period a year ago. Net income for the first quarter of the year
2007 was $42,571,000, down from the first quarter net income for
the year 2006 of $65,940,000. First-quarter income from
continuing operations was $41,631,000, as compared with
$57,094,000 in the first quarter a year ago.
The decline in income from last year's first quarter was due
predominately to increased restructuring costs. In addition, the
company's tax rate in the quarter was higher, primarily due to
losses caused in part by restructuring activities in certain
foreign jurisdictions where no tax benefit could be recorded.
"Our first-quarter results rebounded following the challenges we
encountered during the second half of 2006," said James W.
Griffith, Timken's president and chief executive officer. "We are
confident that our strategic initiatives, including Automotive
restructuring and targeted Industrial capacity additions, will
combine with continued strong Steel performance to deliver
improved results in 2007."
During the quarter, the company:
-- Announced a $60 million expansion for special small-bar
steel capabilities, further differentiating its product
portfolio, and commissioned a new induction heat-treat line
focused on steel products for the energy and industrial
sectors;
-- Advanced programs to improve the performance of its
Automotive Group, including announcement of the closure of
its Sao Paulo, Brazil, bearing production facility by the
end of the year; and
-- Grew sales in Asia by 17 percent and made progress on
capacity additions in both China and India.
Group Results
The Industrial Group had record first-quarter sales of
$544,442,000, up from $503,879,000 for the same period last year.
Favorable pricing and higher volume drove the increase, with sales
strength coming from multiple market sectors, especially aerospace
and heavy industry.
The Automotive Group's first-quarter sales of $387,960,000 were
down from $420,984,000 for the same period last year. The
decrease was driven by the sale of its steering business at the
end of 2006 and lower demand from North American light vehicle and
heavy truck customers. The Automotive Group incurred a loss of
$7,233,000, as compared to a loss of $3,141,000 for the same
period a year ago.
During the quarter, Timken continued to improve the performance of
its automotive business through facility rationalization,
workforce reduction and asset divestment and are on track to
deliver targeted savings of $75,000,000 by 2008.
Steel Group sales, including inter-segment sales, were a record
$390,292,000, up from $375,410,000 for the same period a year ago.
The company had total assets of $4,124,063,000 and total
liabilities of $2,602,258,000, resulting in a total shareholders'
equity of $1,521,805,000.
In reconciling total debt to net debt and calculating for ratio of
net debt to capital, the company recorded total debt at March 31,
2007, of $668,499,000, or 30.5% of capital. Debt was higher than
the 2006 year-end level of $597,843,000, or 28.8% of capital, due
to seasonal working capital requirements. Net debt at March 31,
2007, was $567,681,000, or 27.2% of capital. The company expects
to end 2007 with lower net debt and leverage than last year,
providing additional financial capacity to pursue strategic
investments.
Outlook
Timken anticipates global industrial markets will remain strong,
and investments in Industrial Group capacity are expected to
become operational throughout the year. In addition, the company
expects improved Automotive Group performance for the full year
compared to 2006, as it benefits from its operating-improvement
initiatives.
About Timken
Headquartered in Canton, Ohio, The Timken Company (NYSE: TKR)
-- http://www.timken.com/-- manufactures highly engineered
bearings and alloy steels. It also provides related components
and services such as bearing refurbishment for the aerospace,
medical, industrial, and railroad industries. The company has
operations in 27 countries, including Brazil, and employs 27,000
employees.
* * *
The Timken Company carries Moody's Investors Service's Ba1
Corporate Family Rating and its $300 Million Unsecured Medium Term
Notes Series A due 2028 bear Moody's Ba1 rating.
TOURMALINE CDO: Moody's Rates $11.25 Million Class E Notes at Ba1
-----------------------------------------------------------------
Moody's Investors Service has assigned these ratings to Notes and
Combination Securities issued by Tourmaline CDO III Ltd.:
(1) Aaa to Up to $1,050,000,000 Class A-1 Senior Floating Rate
Notes Due 2052;
(2) Aaa to the $141,250,000 Class A-2 FLT Senior Floating Rate
Notes Due 2052;
(3) Aaa to the $5,000,000 Class A-2 FXD Senior Fixed Rate
Notes Due 2052;
(4) Aa2 to the $50,000,000 Class B-1 Senior Floating Rate
Notes Due 2052;
(5) Aa3 to the $40,500,000 Class B-2 Floating Rate Deferrable
Notes Due 2052;
(6) A2 to the $94,000,000 Class C Floating Rate Deferrable
Notes Due 2052;
(7) Baa1 to the $6,000,000 Class D-1 Floating Rate Deferrable
Notes Due 2052;
(8) Baa2 to the $33,000,000 Class D-2 FLT Floating Rate
Deferrable Notes Due 2052;
(9) Baa2 to the $6,000,000 Class D-2 HYB Floating/Fixed Rate
Deferrable Notes Due 2052;
(10) Baa3 to the $16,500,000 Class D-3 Floating Rate
Deferrable Notes Due 2052;
(11) Ba1 to the $11,250,000 Class E Floating Rate Deferrable
Notes Due 2052;
(12) Baa2 to the U.S. $6,000,000 Combination Notes Due 2052 and
(13) Aa3 to the U.S. $5,000,000 Principal Protected Notes Due
2052.
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 Moody's ratings assigned to
the Combination Notes and the Principal Protected Notes address in
each case the ultimate repayment of the Unamortized Balance and,
with respect to the Combination Notes, the stated return on the
outstanding Unamortized Balance.
BlackRock Financial Management, Inc. will manage the selection,
acquisition and disposition of collateral on behalf of the Issuer.
TOWER INSURANCE: S&P Withdraws BB+ Ratings at Company's Request
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
and financial strength ratings on Tower Insurance Co. of New York
to 'BB+' from 'BBB-'. At the same time, Standard & Poor's has
withdrawn these ratings at the company's request.
"The downgrade reflects Tower's significantly increased risk
appetite, weak corporate governance, weak enterprise risk
management, and substantially reduced capital adequacy," Said
Standard & Poor's credit analyst Siddhartha Ghosh.
These negative rating factors are mitigated slightly by the
company's historically good operating earnings. The company's
average combined ratio was a strong 88.3% over the past five years
(2002-2006), when the industry experienced very favorable pricing
and underwriting conditions.
"Tower's risk appetite is high. The company's natural catastrophe
exposures increased significantly in the last year," said Ghosh.
"These increased exposures magnify the significance of the
company's governance and risk management weaknesses."
Corporate Governance concerns at Tower center on the potential
conflicts of interest arising from CEO Michael Lee's dual role as
head of both Tower and Castlepoint Holdings Ltd., a newly created
Bermuda-based reinsurer. Mr. Lee holds the positions of CEO and
Chairman of both companies simultaneously. Among the potential
conflicts are: service agreements negotiated between the two firms
and compensation to Mr. Lee that gives more or less incentive to
place varying amounts of time and care at one company or the
other. While Mr. Lee's knowledge and experience contribute
significantly to Tower's success, conflicts of interest are real.
Tower's enterprise risk management is viewed as weak. The recent
increase in risk tolerance is well above prior expectations for
the rating. In addition, the company has a key-man risk related
to its CEO, Michael Lee.
TOWER RECORDS: Can Assume & Assign IP Contracts to Caiman Holdings
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave MTS
Inc. dba Tower Records and its debtor-affiliates authority to
assume certain of their executory contracts and assign them to
Caiman Holdings, Inc.
Pursuant to a purchase agreement in which Caiman Holdings
purchased the Debtors' intellectual property assets, the Debtors
have agreed to assume certain intellectual property executory
contracts identified by Caiman, a list of which can be accessed
for free at http://researcharchives.com/t/s?1e09
The contract list constitutes a universe of contracts from which
Caiman will select. Caiman may not choose, at the present time,
to have the Debtor assume and assign all of the contracts listed.
Based in West Sacramento, California, MTS Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music
in the U.S., with nearly 100 company-owned music, book, and video
stores. The company and its affiliates previously filed for
chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case
No. 04-10394). The Court confirmed the Debtors' plan on
March 15, 2004.
The company and seven of its affiliates filed their second
voluntary chapter 11 petition on Aug. 20, 2006 (Bankr. D. Del.
Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger,
P.A. and O'Melveny & Myers LLP represent the Debtors. The
Official Committee of Unsecured Creditors is represented by
McGuirewoods LLP and Cozen O'Connor. When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.
TRIPOS INC: Low Equity Prompts Nasdaq Delisting Notice
------------------------------------------------------
Tripos Inc. received a letter from the Nasdaq Listing
Qualifications Department on April 18, 2007, advising the company
that for the year ended Dec. 31, 2006, Tripos did not comply with
the minimum $10 million stockholders' equity requirement for
continued inclusion on the NASDAQ Global Market under Marketplace
Rule 4450(a)(3).
Tripos was given until May 3, 2007, to provide NASDAQ with a
specific plan to achieve and sustain compliance with all NASDAQ
Global Market listing requirements, including the minimum
stockholders' equity standard, and to indicate a time frame to
resolve the listing deficiency.
As reported on the Troubled Company Reporter on March 23, 2007,
Tripos sold its Discovery Informatics business and is currently
engaged in efforts to sell its Discovery Research business.
Tripos is a party to two letters of intent providing for the sale
of its Discovery Research business and is endeavoring to complete
a transaction in the very near future. Upon the sale of its
Discovery Research business, Tripos will request that the NASDAQ
Global Market immediately delist its stock and at that time would
close its stock transfer books.
In addition, Tripos is in the process of closing its books for the
first quarter of 2007, and thus does not presently know whether
the gain recognized on its Discovery Informatics sale will be
sufficient to regain compliance with the NASDAQ listing standard.
If by May 3, 2007, Tripos has not completed the sale of its
Discovery Research business or has not computed the gain on its
Discovery Informatics sale, Tripos will inquire of NASDAQ about
what additional steps should be taken to avert a delisting due to
the net worth requirement, including a deferral of any action by
NASDAQ pending completion of the sale of the discovery research
business.
About Tripos Inc.
Headquartered in St. Louis, Tripos Inc. -- http://www.tripos.com/
-- combines leading-edge technology and innovative science to
deliver consistently superior chemistry-research products and
services for the biotechnology, pharmaceutical and other life
science industries.
The company's Discovery Informatics business provides software
products and consulting services to develop, manage, analyze and
share critical drug discovery information. Within its Discovery
Research business, Tripos' medicinal chemists and research
scientists partner directly with clients in their research
initiatives, leveraging state-of-the-art information technologies
and research facilities.
* * *
As reported in the Troubled Company Reporter on March 20, 2007,
shareholders of Tripos Inc. approved the company's plan of
dissolution and liquidation.
TRW Automotive: Moody's Holds Ba3 Rating on $1.5 Billion Sr. Notes
------------------------------------------------------------------
Moody's Investors Service assigned Baa3 ratings to the new senior
secured bank facilities of TRW Automotive, Inc. -- (including
$1.4 billion of revolving credit facilities, a $600 million term-
loan A, and a $500 million term-loan B).
In related actions, Moody's affirmed the company's Corporate
Family Rating at Ba2, and the ratings on the $1.5 billion of
recently issued senior unsecured notes, at Ba3. The rating agency
also raised the company's Speculative Grade Liquidity Rating to
SGL-1 from SGL-2. The outlook remains stable. TRW intends to use
the proceeds from the new senior secured bank facilities to
refinance the existing senior secured credit facilities. The bank
credit facility refinancing continues TRW's efforts to
opportunistically extend its debt maturity profile, and reduce
debt service costs.
As a leading supplier of components and systems to automotive
OEM's, TRW's business profile has many characteristics that are
consistent with ratings higher than the assigned Ba2 Corporate
Family Rating. The company enjoys a well diversified revenue
base, including long standing supply arrangements with European
and Asian auto makers, as well as aftermarket sales. Continuous
investment in new technologies should support future revenues,
even as automotive demand softens. However, TRW has experienced
the effects of ongoing pricing pressures from OEM customers as
well as commodity price increases. EBIT margins of below 5% are
considered moderate, and more consistent with the assigned
ratings. For the last twelve months ended December 31, 2006
(using Moody's standard adjustments), TRW's consolidated total
debt/EBITDA leverage was 3.5x; EBIT coverage of interest was 2.0x;
free cash flow was approximately $191 million. (Note that the
Moody's standard adjustments now reflect TRW's reported pension
liabilities as required under FASB 158). These metrics are viewed
as consistent with speculative grade rated companies and with the
company's Corporate Family Ratings at the Ba2 level.
The stable outlook continues to anticipate that the company's
geographic, customer and product diversification will support
revenues even in the face of weaker automotive demand. Ongoing
cost reduction efforts should benefit margins. This margin
improvement, in conjunction with the lower debt service costs
stemming from the refinancing, should support credit metrics
consistent with the Ba2 Corporate Family Rating through the
intermediate term. At year-end 2006, TRW maintained good
liquidity with cash and cash equivalents of $578 million,
approximately $830 million of availability under its revolving
credit facility and about $104 million of availability under its
U.S. accounts receivable facility. The new $1.4 billion revolving
credit facility is expected to provide TRW with the same level of
unused and available borrowing capacity provided by the facility
being replaced. The company's Speculative Grade Liquidity rating
of SGL-1 reflects the lower expected reliance on incremental
funding under the proposed revolvers combined with expected
covenant cushion improvement.
These ratings were assigned:
* Baa3 (LGD2, 17%) rating for the new $900 million senior
secured domestic revolving credit facility;
* Baa3 (LGD2, 17%) rating for the new $500 million senior
secured global revolving credit facility;
* Baa3 (LGD2, 17%) rating for the new $600 million senior
secured term loan A;
* Baa3 (LGD2, 17%) rating for the new $500 million senior
secured term loan B;
This rating was raised:
* Speculative Grade Liquidity Rating, to SGL-1 from SGL-2
These ratings were affirmed:
* Ba2 Corporate Family rating;
* Ba2 Probability of Default rating;
* Ba3 (LGD5, 72%) on the $500 million senior unsecured notes
due 2014;
* Ba3 (LGD5, 72%) on the Euro 275 million senior unsecured
notes due 2014;
* Ba3 (LGD5, 72%) on the $600 million senior unsecured notes
due 2017;
These fratings are withdrawn as a result of the successful tender
for the overwhelming majority of the outstandings:
* B1 (LGD6, 97%) for the 9 3/8% Sr Notes due 2013;
* B1 (LGD6, 97%) for the 10.125% (Euro denominated) Sr Notes
due 2013;
* B1 (LGD6, 97%) for the 11.75% (Euro denominated) Sr Sub
Notes due 2013;
* B1 (LGD6, 97%) for the 11% Sr Sub Notes due 2013
Upon closing of the new senior secured bank facilities the
following ratings will be withdrawn:
Ba1 (LGD2, 26%) rating for the existing senior secured credit
facilities
The last rating action was on March 12, 2007 when Ba3 ratings were
assigned to the company's $1.5 billion of newly-issued unsecured
notes.
Consideration for downward outlook or rating migration would arise
if any combination of factors were to increase leverage to over
3.5x or if EBIT/ Interest coverage under 2.0x.
Future events that would be likely to improve TRW Automotive's
outlook or ratings include further debt and leverage reduction
from free cash flow, the realization of substantial new business
awards, expansion into new markets, or improved operating margins
resulting from new business wins or productivity improvement.
Consideration for upward outlook or rating migration would arise
if any combination of these factors were to reduce leverage to
under 2.5x or increase EBIT/interest coverage to a level
approximating 3.0x.
TRW Automotive, Inc., headquartered in Livonia, Michigan, is among
the world's largest and most diversified suppliers of automotive
systems, modules, and components to global vehicle manufacturers
and related aftermarket. The company has three operating
segments; Chassis Systems, Occupant Safety Systems, and Automotive
Components. Its primary business lines encompass the design,
manufacture and sale of active and passive safety related
products. Annual revenues are approximately $13 billion
UAL CORP: General Unsec. Claimants Gets Additional Shares of Stock
------------------------------------------------------------------
UAL Corporation has commenced distribution of an additional
2,238,363 shares of UAUA common stock to holders of allowed
general unsecured claims against the company and certain of its
subsidiaries pursuant to the terms of the Plan of Reorganization
under which the company and its subsidiaries emerged from Chapter
11 protection on Feb. 1, 2006.
The current distribution of equity under the Plan follows an
initial pro rata distribution of 86,162,434 shares of UAUA common
stock on Feb. 2, 2006 to holders of allowed general unsecured
claims followed by subsequent interim distributions during 2006.
Such distributions included both general distributions as well as
distributions to specific classes of unsecured creditors.
Excluding the current distribution, the company has distributed
108,947,780 shares through the initial and interim distributions.
As part of the current distribution, United employees will be
issued, in aggregate, approximately 844,599 shares of new UAUA
common stock. Since Feb. 2, 2006, and including the current
distribution, employees will have been issued a total of
35,514,603 shares of new UAUA common stock. In connection with
the reorganization, employees also received $726 million in
notes proceeds which were distributed in August 2006.
Including both the notes and the stock distribution, and based on
the closing price of UAUA common stock on April 26, 2007,
securities worth approximately $2 billion have been distributed to
employees pursuant to the Plan of Reorganization.
Upon the completion of the current distribution, the company will
have distributed a total of 111,186,143 shares to holders of
allowed and deemed general unsecured claims, out of a total
expected distribution of 115 million shares under the Plan to
holders of such claims.
As of April 27, 2007, holders of approximately 45,000 allowed
general unsecured claims aggregating to approximately
$29.1 billion in claim value have received common shares of the
company to partially satisfy those claims.
The company currently estimates its total unsecured claim
exposure, including those that have been partially satisfied, to
be between $29.3 billion and $29.8 billion. The company currently
holds 3,813,857 shares of UAUA common stock in reserve to satisfy
the remaining disputed unsecured claims. Distributions of this
stock will take place on a periodic basis as remaining claims
disputes are resolved.
To the extent that any such disputed claims become disallowed
claims, the shares of the UAUA common stock reserved for issuance
to the holders of such disputed claims will be distributed pro
rata to holders of allowed general unsecured claims.
About UAL Corp.
Headquartered in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- through United Air Lines, Inc., is
the holding company for United Airlines -- the world's second
largest air carrier. The Company filed for chapter 11 protection
on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. When the
Debtors filed for protection from their creditors, they listed
$24,190,000,000 in assets and $22,787,000,000 in debts. Judge
Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20,
2006. The Company emerged from bankruptcy protection on Feb. 1,
2006.
* * *
As reported in the Troubled Company Reporter on Jan. 19, 2007,
Moody's Investors Service assigned B1, LGD-3 42% ratings to the
United Air Lines Inc. $2.1 billion Senior Secured Revolving Credit
and Term Loan. Moody's also assigned the B2 corporate family and
probability of default rating and a stable outlook at UAL
Corporation. At the same time, Moody's withdrew its corporate
family and probability of default ratings assigned at the United
level and affirmed its SGL-2 speculative grade liquidity rating.
Moody's will withdraw the ratings on United's existing $3 billion
of revolving credit and term loans once the new Bank Facilities
close. The rating outlook is stable.
US ENERGY: Nasdaq Stays Delisting Action Until a Hearing on June 7
------------------------------------------------------------------
U.S. Energy Systems Inc. confirmed that the Nasdaq Stock Market
has stayed its delisting action in response to USEY's timely
request for an appeal hearing before the Nasdaq Listing
Qualifications Panel, which is scheduled on June 7, 2007.
Accordingly, USEY's common stock will continue to be listed on the
Nasdaq Capital Market pending a final written decision by the
Nasdaq Listing Qualifications Panel subsequent to the June 7th
hearing.
There can be no assurance that the Nasdaq Panel will grant the
company's appeal.
On April 18, 2007 the company received a Staff Determination
Letter from the Nasdaq Stock Market notifying the company of
its non-compliance with Marketplace Rule 4310(c)(14) for the
company's failure to file its Form 10-K for the period ended
Dec. 31, 2006.
The restatement of the accounting treatment for the August 2006
acquisition of the UK assets and the November 2006 acquisition of
Cinergy's ownership interest in USEB has resulted in a delay in
the completion of the company's year-end financial statements.
The company intends to file its Annual Report on Form 10-K for the
fiscal year ended Dec. 31, 2006 as soon as practicable after the
preparation and audit of the company's financial statements is
completed.
About USEY
Based in New York City, U.S. Energy Systems Inc. (Nasdaq: USEY) --
http://www.usenergysystems.com/-- owns and operates energy and
power projects in the United States and the United Kingdom through
its two subsidiaries, UK Energy Systems, Ltd. and U.S. Energy
Renewables, Inc.
Going Concern Doubt
Bagell, Josephs, Levine & Company LLC in Gibbsboro, New Jersey,
expressed substantial doubt about U.S. Energy Systems Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the year ended
Dec. 31, 2005. The auditing firm pointed to the company's
operating losses and capital deficits.
VERTICAL ABS: Moody's Rates $22 Million Class C Notes at Ba2
------------------------------------------------------------
Moody's Investors Service has assigned these ratings to Notes
issued by Vertical ABS CDO 2007-1, Ltd.:
(1) Aaa to the $42,000,000 Class X Senior Secured Fixed Rate
Notes Due 2013;
(2) Aaa to the $873,000,000 Class A1S Variable Funding Senior
Secured Floating Rate Notes Due 2047;
(3) Aaa to the $229,000,000 Class A1J Senior Secured Floating
Rate Notes Due 2047;
(4) Aa2 to the $157,000,000 Class A2 Senior Secured Floating
Rate Notes Due 2047;
(5) A2 to the $57,000,000 Class A3 Secured Deferrable Interest
Floating Rate Notes Due 2047;
(6) Baa2 to the $70,000,000 Class B1 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047;
(7) Baa3 to the $32,000,000 Class B2 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047; and
(8) Ba2 to the $22,000,000 Class C Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047.
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 of RMBS Securities, CMBS
Securities and Other Asset-Backed Securities and Synthetic
Securities in the form of credit default swap
transactions with respect to which the Reference Obligations are
RMBS Securities, CMBS Securities, CDO Securities or Other Asset-
Backed Securities due to defaults, the transaction's legal
structure and the characteristics of the underlying assets.
Vertical Capital, LLC will manage the selection, acquisition and
disposition of collateral on behalf of the Issuer.
WENDY'S INT'L: Earnings Plummet to $14.7MM in Quarter Ended Apr. 1
------------------------------------------------------------------
Wendy's International Inc. disclosed that for the first quarter
ended April 1, 2007, the company recorded a net income of
$14.69 million compared to $51.23 million in the same quarter of
2006.
At April 1, 2007, the company's balance sheet total assets of
$1.80 billion, total liabilities of $1.06 billion and total
stockholders' equity of 0$.74 billion.
The company's first-quarter 2007 reported results from continuing
operations include the impact of:
* a $522.9 million sales compared to $513.4 million in the
first quarter of 2006, the increase is due primarily to
higher same-store sales in U.S. restaurants compared to
negative same-store sales a year ago;
* a $67.2 million Franchise revenues compared to $65.2 million
in the first quarter of 2006;
* a $324.1 million cost of sales compared to $329.7 million in
the first quarter of 2006, a 2.2% improvement as a percentage
of sales due to positive same-store sales, lower commodity
costs, particularly beef, well as a favorable change in
product mix toward higher-margin products and better food
cost management;
* a $152.4 million company restaurant operating costs, compared
to $149.9 million in the first quarter of 2006, the
improvement is due to leverage from positive same-store
sales, partially offset by some cost increases. The
accounting for the joint venture with Tim Hortons resulted in
a 0.2% increase in company restaurant operating costs during
the first quarter of 2007;
* a $3.9 million operating costs compared to $19.8 million in
the first quarter of 2006, the improvement is due primarily
to $15 million in incremental pretax advertising expense for
Wendy's in the first quarter of 2006 that did not recur in
2007;
* a $50.8 million general and administrative expense, compared
to $55.3 million in the first quarter of 2006, the
improvement is caused by lower salaries and benefits as a
result of the elimination of 355 full-time positions in 2006,
in addition to reduced consulting and professional services
expenses. Partly offsetting these reductions were higher
stock compensation expense and a higher accrual for
performance-based incentive payments, as the company expects
to pay bonuses commensurate with improved operating results
in 2007;
* a $2.3 million of expense in the first quarter of 2007,
compared to $6.6 million of income in the first quarter of
2006, the change is due primarily to approximately $3 million
in incremental store closure charges in the first quarter of
2007 and the absence of approximately $4 million in asset
gains on the sale of Wendy's properties in the first quarter
of 2006 that did not recur in the first quarter of 2007;
* a $6.8 million of net interest expense in the first quarter
of 2007, compared to $7 million of net interest expense in
the first quarter of 2006;
* an effective tax rate was 33.5% in the first quarter of
2007, taxes benefited EPS in 2006 when the company reported a
net loss;
* a lower share count of 95.7 million average shares in the
first quarter of 2007 compared to 114.7 million average
shares in the first quarter of 2006; and
* a joint venture with Tim Hortons which resulted in an overall
reduction to first-quarter 2007 operating income of $1.8
million compared to the first quarter 2006.
Options To Enhance Shareholder Value
The company disclosed that its board of directors, acting
unanimously, has formed a special committee of independent
directors to investigate all strategic options for Wendy's.
These options, among other things, may include revisions to the
company's strategic plan, changes to its capital structure, a
possible sale, merger or other business combination. Chairman of
the board, James V. Pickett will lead the committee.
"The company has made progress executing its strategic plan,"
Pickett said. "The board's formation of the special committee is
a positive step in Wendy's continuing efforts to further enhance
value for its shareholders, franchisees and other stakeholders."
The company does not intend to provide periodic updates regarding
the special committee's actions, but will report specific
developments as circumstances warrant. There is no assurance that
the process will result in any changes to the company's current
plans. Certain strategic alternatives could affect the company's
earnings guidance.
"There is no specific timeframe to complete the review and there
are no constraints on options to be explored by the committee,"
Pickett said. "A number of stakeholders have offered suggestions
about strategies to improve performance and create additional
value. The special committee will review strategic options while
management continues to focus on executing Wendy's current
strategic plan to revitalize the brand and improve results at
every restaurant in the system."
Repurchase Of Shares
During the quarter, the company concluded its accelerated share
repurchase transaction. The company repurchased 9 million shares
in the transaction at an initial purchase price of $31.33 per
share. The repurchased shares in the ASR are subject to a future
contingent-purchase price adjustment expected to be settled in the
second or third quarter of 2007.
Including all repurchase activity to date, 4 million shares
currently remain under the board authorization, which is also the
amount remaining under the Internal Revenue Service ruling related
to the tax-free spin-off of Tim Hortons in September 2006.
117th Consecutive Dividend
The board approved a quarterly dividend of 12.5 cents per share,
payable May 21 to shareholders of record as of May 7. The
dividend payment will represent the company's 117th consecutive
dividend.
The company completed its spinoff of Tim Hortonsr in the third
quarter of 2006 and completed the sale of Baja Freshr Mexican
Grill during the fourth quarter of 2006. During the fourth
quarter of 2006, the company also approved the prospective sale of
Cafe Express. Accordingly, the after-tax operating results of Tim
Hortons, Baja Fresh and Cafe Express now appear in the
"Discontinued Operations" line on the income statement.
About Wendy's International
Headquartered in Dublin, Ohio, Wendy's International Inc. (NYSE:
WEN) -- http://www.wendysintl.com/-- and its subsidiaries
operate, develop, and franchise a system of quick service and fast
casual restaurants in the United States, Canada, and
internationally.
* * *
As reported in the Troubled Company Reporter on Oct. 17, 2006,
Moody's Investors Service held its 'Ba2' Corporate Family Rating
for Wendy's International Inc.
Additionally, Moody's held its 'Ba2' ratings on the company's
$200 million 6.25% Senior Unsecured Notes Due 2011 and
$225 million 6.2% Senior Unsecured Notes Due 2014. Moody's
assigned the debentures an LGD4 rating suggesting noteholders will
experience a 54% loss in the event of default.
WENDY'S INT'L: Strategic Review Cues S&P's Negative CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings for Dublin,
Ohio-based Wendy's International Inc., including the 'BB+'
corporate credit rating, on CreditWatch with negative
implications.
The CreditWatch placement follows Wendy's announcement that its
Board of Directors has formed a special committee of independent
directors to investigate all strategic options for the company.
These options, among other things, may include revisions to the
strategic plan, changes to the capital structure, a possible sale,
merger, or other business combination.
After the company has announced its findings and its future
plans," said Standard & Poor's credit analyst Diane Shand, "we
could lower ratings if the company undertakes actions that cause
deterioration in cash flow protection measures or disadvantages to
bondholders."
WENDY'S INT'L: Moody's Puts Ratings Under Review and May Downgrade
------------------------------------------------------------------
Moody's Investors Service placed all ratings of Wendy's
International, Inc. on review for possible downgrade.
The review was prompted by the company's announcement that its
board of directors has formed a special committee to investigate
all strategic options for Wendy's to enhance shareholder value.
These options, among other things, may include revisions to
Wendy's strategic plan, changes to its capital structure, a
possible sale, merger or other business combination.
These ratings were placed on review for possible downgrade;
- Corporate family rating of Ba2
- Senior unsecured notes rated Ba2/54%/LGD-4
- Senior unsecured shelf registration rated (P)Ba2/54%/LGD-4
- Subordinated shelf registration rated (P)Ba3/97%/LGD-6
- Preferred stock shelf registration rated (P)B1/97%/LGD-6
Moody's review will focus on the potential impact to bondholders
that could result from Wendy's various strategic initiatives.
Wendy's International, Inc., headquartered in Dublin Ohio, owns
and franchises Wendy's Old Fashion Hamburger restaurants. Total
revenues in 2006 were approximately $2.4 billion.
WEST PENN: Fitch Rates $735 Million Revenue Bonds at BB-
--------------------------------------------------------
Fitch assigns a 'BB-' rating and places on Rating Watch Positive
the $735 million Allegheny County Hospital Development Authority
Health System Revenue Bonds (West Penn Allegheny Health System),
Series 2007A. In addition, Fitch upgrades to 'BB-' from 'B+' and
places on Rating Watch Positive approximately $600 million of West
Penn Allegheny Health System's outstanding debt.
The bonds are expected to price the week of May 7, 2007 via
negotiation by Citigroup Capital Markets and Lehman Brothers as
Co-Senior Managers.
Proceeds of the 2007 bonds will be used to refund the outstanding
debt and fund routine capital expenditures. If WPAHS is
unsuccessful in receiving approval from the Internal Revenue
Service to refund all of its outstanding debt the system will
issue refunding bonds for only those issues it has received
approval. It will seek to have the remaining bonds tendered at a
premium. However the ability to execute a tender is uncertain and
even if completed, would provide lower economic savings to WPAHS.
The resolution of the Rating Watch Positive would depend on the
successful execution of a refinancing at terms favorable to WPAHS
and that results in an improved credit profile.
The rating upgrade reflects the significant financial and
operational progress the West Penn Allegheny Health System has
made since coalescing seven years. Although numerous challenges
remain that hold WPAHS's creditworthiness below investment grade,
through reengineering of its cost structure, solidifying its
physician base, implementing organization-wide systems and
procedures, addressing its legacy pension funding requirements and
judiciously investing in facility renewal and service line
expansion, management has successfully stabilized the operations
of the system. From 2002 to 2005, WPAHS's operating margin
improved from -4.2% to 1.3%, but dropped to -1.1% for the six
months ending Dec. 31, 2006, mainly due to the conversion of
anesthesia services to an employed model from a contracted
service. Management indicated that through March 2007, losses
have stabilized as recent expense control initiatives have taken
hold and volume has improved. WPAHS is projecting a bottom line
profit between $13 to $15 million for fiscal 2007.
Fitch's Rating Watch Positive reflects the expectation that a
successful debt restructuring will result in a lower cost of
capital and less front-loaded debt service payments, which will
further improver WPAHS's operating performance. The liquidity and
cash flow improvement resulting from a successful refinancing
would strengthen the balance sheet and allow for a moderate
increase in routine capital investment and renewal, enhancing the
system's viability in the highly concentrated and competitive
Pittsburgh market. Based on estimates provided by WPAHS's
investment banker, the restructuring would yield $550 million in
liquidity improvement over the next five years compared to the
current debt structure, primarily from the new money portion,
interest rate savings, and an initial two year principal deferral.
Balancing expense growth with service line development in an
extremely competitive service area will continue to be a
challenge. Given the competitive nature of the Pittsburgh market
and difficult environment for physicians, the employed physician
model has prevailed. Although down from 2003 levels WPAHS's
projected loss per primary care physicians remains high at near
$97,000. Management continues to focus on improvements in this
area including the recent consolidation of Western Pennsylvania
and Allegheny General Hospital's primary care networks, which
should result in some cost savings. Lastly, utilization figures
while up through March have trended down over the last several
years, reflecting declining use rates in the market, certain
physician departures, and construction disruptions. Management's
continued focus on key physician recruitment should contribute to
stable or improving utilization. Ongoing credit risks include
WPAHS's low level of liquidity, the service area's high level of
competition for admissions and physicians, the unfunded pension
liability ($185 million at fiscal 2006) and WPAHS's current
operating losses and thin historical and projected operating
margins. Fitch expects WPAHS to have profitable operations in
2008 and beyond. However, balance sheet growth will likely be
limited by future capital needs.
Headquartered in Pittsburgh, Pennsylvania, WPAHS is a large
primary and tertiary health system with six hospitals and other
related entities that primarily serve Allegheny County and its
five surrounding counties. WPAHS' flagships are the 665-licensed
bed Allegheny General Hospital and the 512-licensed bed Western
Pennsylvania Hospital. Total revenues in fiscal 2006 were
approximately $1.4 billion. Disclosure to Fitch and to
bondholders has been provided on a quarterly basis through the
nationally recognized municipal securities information
repositories and consists of an in depth management discussion and
analysis, income statement, balance sheet, cash flow statement,
and utilization statistics.
WEST PENN: Moody's Rates $735 Million Bonds at Ba2
--------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating to West Penn
Allegheny Health System's (PA) $735 million of Series 2007A bonds
to be issued through the Allegheny County Hospital Development
Authority. The Series 2007 bonds are expected to be uninsured
fixed rate bonds. The outlook is stable. The Ba2 rating reflects
a higher rating from the Ba3 rating on WestPenn's outstanding
bonds, primarily because of the benefit of lower debt service and
cashflow relief expected to be provided from the refinancing.
Upon completion of the refinancing of all of WestPenn's
outstanding senior debt, Moody's expects to withdraw the current
Ba3 rating on outstanding bonds.
Use of Proceeds: Refund all of WestPenn's outstanding senior debt
and the Highmark loan and provide approximately $55 million of new
money proceeds for capital projects.
Legal Security: Joint and several obligation of the Obligated
Group with mortgage lien on certain real property, including the
primary hospital facilities, and gross revenue pledge; debt
service reserve fund present; limitations on additional
indebtedness and withdrawal from obligated group permitted if a
combination of certain coverage and financial ratio tests are met.
Interest Rate Derivatives: None
Strengths
* System's prominence as the second largest healthcare system
in Pittsburgh with over 78,000 admissions and 19% market
share in a six-county region
* Significant 28% reduction in annual debt service
requirements after the upcoming financing, resulting in more
adequate debt service coverage and freeing up cashflow for
pension and capital requirements
* Maintenance of unrestricted cash levels over the last
several years, despite large pension funding, with
$251 million as of Dec. 31, 2006, providing a moderate
65 days of cash on hand
Challenges
* Variability in operating performance with six months of 2007
representing the second year of an operating decline from
peak performance in 2005, although long-term absolute
cashflow has remained at improved levels since 2004
* Heavy competition from UPMC Health System, which is the
largest health system in the region and owns a large managed
care plan, enabling the system to shift health plan
membership and volumes
* Volume declines in 2005 and 2006 due to the loss of key
physicians to competitors, construction disruption and the
shift of HMO enrollment to UPMC's insurance plan
* Dependency on Highmark, the largest insurer in the region,
for a large 36% of system revenues including Highmark and
Highmark Medicare Security Blue products
* Sizable capital needs that have been deferred and are
necessary to remain competitive
* High leverage after the upcoming financing with 8.8 times
debt-to-cashflow and a moderate 2.7 times peak debt service
coverage, although the latter is notably improved by the
refinancing savings
* Challenging demographic service area with declining
population trends in the primary service area and an aging
patient base
Market/Competitive Position: Very Competitive Market Resulting In
Recent Volume Challenges
As the second largest health system in the Pittsburgh region,
WestPenn maintains a prominent market position but has experienced
competitive challenges that, in part, contributed to volume
declines in 2005 and 2006. WestPenn's market share in the six-
county primary service area (accounting for 80% of volumes) was
19% in 2006, which declined slightly from prior years. The
leading system in the region is UPMC Health System with a 35%
market share. Other hospitals in the area maintain individual
market shares under 8%.
WestPenn's volume trends over the last two and a half years are
indicative of competitive challenges. Total admissions for the
system declined 1% in 2005, 4% in 2006 and are flat through six
months of fiscal year 2007. By facility, the largest admissions
declines over this period occurred at WestPenn Hospital;
admissions at Allegheny General declined in 2006 and are flat in
2007; admissions at Forbes Regional have been growing. By service
lines, the system has experienced declines and lost market share
in cardiology and orthopedics, in particular. Outpatient
surgeries system-wide were down 9% in 2005, flat in 2006 and down
5% in six months of 2007. Volume declines are attributable to a
number of factors including softness in regional volumes
(admissions in the primary service area were flat in 2005 and down
1% in 2006), construction disruption in 2006 at the Suburban,
Cannonsburg and Forbes campuses, key physician departures to
competitors, and shifts in managed care membership to health plans
with which WestPenn does not contract (as discussed below). The
population in Allegheny County is projected to decline by 2.7%
between 2006 and 2011 (1.2% in the total service area), although
the over 65 age group is expected to moderately increase by 1.2%
over the same period.
WestPenn operates in a challenging payer market. Highmark is the
dominant insurer in the region, accounting for approximately 36%
of WestPenn's revenues (including Highmark and Highmark Medicare
Security Blue products). This dominance affords Highmark
significant negotiating leverage with WestPenn as well as other
providers in setting managed care rates. The second largest
health plan in the area is UPMC's health plan, which does not
contract with WestPenn. As UPMC continues to grow its health plan
membership, especially its Medicare product, shifts in membership
from Highmark to UPMC have resulted in a shift of patient volume
from WestPenn to UPMC. These membership and payer mix shifts have
contributed to WestPenn's volume losses.
One of WestPenn's primary strategies is physician recruitment and
the system has been increasing the number of employed physicians
in order to better compete. The system has a primary care network
with 166 physicians and a specialty network with 378 physicians.
A large number of admissions are derived from employed physicians
(for instance, approximately 70% of Allegheny General's
admissions) who have non-compete clauses in their contracts,
providing an important source of volume stability to the system.
Physician competition in the Pittsburgh area is limited compared
with other markets since many of the physicians are aligned with
either WestPenn or UPMC. In addition to physician recruitment, the
system's strategies include the expansion and renovation of a
number of its campuses as well as the expansion of its ambulatory
care network.
Operating Performance: Operations Improved From Historical Levels
Although Recently More Variable
Since 2004 West Penn has achieved financial performance levels
that exceed the prior period, although operations in 2006 and
through the interim period of 2007 have declined from a peak in
2005. Improvement in 2004 and 2005 was driven by the realization
of benefits from strategies that the organization had been
implementing for several years including renegotiating managed
care contracts, productivity and supply chain initiatives, a
reduction in agency usage and revenue cycle improvements.
In 2006, the system reported an operating loss of $2.3 million
(excluding investment income), compared with operating income of
$17.2 million in 2005. Operating cashflow in 2006 declined to
$111 million (8% margin) from $134 million (10%) in 2005. Through
six months of fiscal year 2007, operating cashflow is at $47
million (6%), compared with $55 million in the prior period. The
operating decline in the last year and a half is primarily due to
volume declines and the recurring costs of transitioning
anesthesiologists from a contracted to an employment model.
Revenue growth for the system has been modest recently. In 2006
revenue growth was 4% and through six months of fiscal year 2007
revenue growth was under 4%, excluding the impact of employing
anesthesiologists in 2007, which contributed to reported revenue
growth. Modest revenue growth reflects volume declines or
softness and relatively low rate increases from the major payers.
As discussed above, Highmark's dominance in the region affords it
leverage to keep rate increases to providers in the area at
relatively modest levels.
Balance Sheet Profile: Liquidity Maintained; System Will Be
Leveraged
The upcoming financing significantly lowers WestPenn's debt
service obligations, improving debt service coverage and freeing
up cashflow for capital and pension obligations. WestPenn will
issue $735 million of Series 2007 debt, resulting in a 19%
increase (about $125 million) from the current debt level. The
financing will provide $49 million in net proceeds for capital.
As a result of the financing, peak annual debt service
requirements will decline by $17 million. Peak debt service
coverage in 2006 was 2.0 times and, while still modest, improves
to 2.7 times on a proforma basis. The system will remain
leveraged on a debt-to-cashflow basis with 8.8 times debt-to-
cashflow on a proforma basis, compared with 8.9 times in 2006 as
the benefit of lower interest expense essentially offsets the
higher debt level.
Capital spending remained below depreciation levels for several
years due to liquidity constraints but reached 108% of
depreciation in 2006. West Penn anticipates making future capital
investments in excess of depreciation. Capital spending for
fiscal years 2007 and 2008 is projected at about $75 million for
each year, which is higher than historical levels but probably not
high enough to catch up with deferred needs.
As of June 30, 2006, the system had $218 million in unrestricted
cash, representing a modest 59 days of cash on hand. Although
cash declined from $243 million at yearend 2005, due to the
operations decline, capital spending and pension funding, over a
longer period absolute cash has increased and days of cash has
remained stable at about 60 days, despite large pension funding.
As of December 31, 2006 unrestricted cash grew to $251 million
primarily due to a $35 million payment in conjunction with a long-
term agreement to provide healthcare services. West Penn has been
making substantial payments into its pension plan. In fiscal 2007
the system will be required to fund approximately $32 million more
than its pension expense and in fiscal year 2008 will be required
to fund approximately $22 million more than its pension expense.
Outlook
The stable outlook reflects our belief that West Penn will be able
to maintain operating performance and cash levels, despite
operating challenges and pension funding requirements.
What could change the rating-UP
Improvement in operating cashflow to levels to support capital
spending and grow liquidity measures
What could change the rating-DOWN
Unexpected and prolonged decline in operating cashflow,
unanticipated debt issuance, decline in unrestricted cash
Key Indicators
Assumptions & Adjustments:
- Based on financial statements for West Penn Allegheny Health
System
- First number reflects audit year ended June 30, 2005
- Second number reflects audit year ended June 30, 2006, proforma
with $125 million of new debt
- Investment returns smoothed at 6% unless otherwise noted
* Inpatient admissions: 81,674; 78,063
* Total operating revenues: $1.4 billion; $1.4 billion
* Moody's-adjusted net revenue available for debt service:
$148 million; $125 million
* Total debt outstanding: $655 million; $772 million
* Maximum annual debt service (MADS): $64 million; $47 million
* MADS coverage based on reported investment income: 2.4 times;
2.9 times
* Moody's-adjusted MADS coverage with normalized investment
income: 2.3 times; 2.7 times
* Debt-to-cash flow: 6.9 times; 8.8 times
* Days cash on hand: 70 days; 59 days
* Cash-to-debt: 37%; 29%
* Operating margin: 1.3%; 0.9%
* Operating cash flow margin: 9.9%; 7.9%
WILLIAMS PARTNERS: Boosts Unitholders' Cash Dividend by $50 cents
-----------------------------------------------------------------
Williams Partners LP disclosed that regular quarterly cash
distribution its unitholders receive has been increased to
50 cents per unit. This is the partnership's fifth consecutive
distribution increase since its initial distribution in November
2005.
The new per-unit amount is 6% higher than the 47-cent distribution
paid for the fourth quarter of 2006. It is also 32% higher than
the partnership's first-quarter 2006 distribution level of
38 cents per unit.
The board of directors of the partnership's general partner has
approved the increase in the quarterly cash distribution. The
first-quarter distribution is payable on May 15, 2007, to
unitholders of record at the close of business on May 7, 2007.
"The continued growth of cash distributions to the company's
unitholders reflects the consistent and steady performance of the
partnership's core assets," Alan Armstrong, chief operating
officer of the general partner of Williams Partners said.
Williams Partners plans to report its first-quarter 2007 financial
results before the market opens Thursday, May 3.
For more information contact:
-- Jeff Pounds (media relations)
Re: Williams
Tel: (918) 573-3332, and
-- Sharna Reingold (investor relations)
Re: Williams
Tel: (918) 573-2078
About Williams Partners
Headquartered in Tulsa, Oklahoma, Williams Partners LP (NYSE: WPZ)
-- http://www.williamslp.com-- is a publicly traded master
limited partnership that gathers, transports, and processes
natural gas and the fractionation and storage of natural gas
liquids. The partnership's current asset base includes a 25.1%
interest in Williams Four Corners LLC, 40% interest in the
Discovery system offshore Louisiana, midstream assets at Conway,
Kansas and the Carbonate Trend gathering pipeline offshore
Alabama.
* * *
As reported in the Troubled Company Reporter on Dec. 7, 2006,
Fitch Ratings affirmed the Issuer Default Rating and senior
unsecured debt rating of Williams Partners LP at 'BB' after the
disclosure that the partnership has reached an agreement with its
sponsor, The Williams Companies, to acquire the remaining 74.9%
interest in Williams Four Corners LLC from WMB that WPZ does not
already own for consideration of $1.2 billion. Fitch also
assigned a 'BB' rating to the partnership's proposed offering of
$600 million of senior unsecured notes, which will be used to
finance a portion of the acquisition.
WYLE HOLDINGS: High Financial Leverage Cues S&P to Hold B+ Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on El Segundo, California-based Wyle Holdings Inc.
and revised its outlook to stable from negative. At the same
time, Standard & Poor's affirmed its 'B+' bank loan rating, along
with its '2' recovery rating, on Wyle's $168 million senior
secured bank facility (including the proposed $40 million add-on
term loan).
"The outlook revision reflects moderate deleveraging since the
acquisition of General Dynamics' Aeronautics division in early
2005 and a solid two-year track record as a combined entity
following successful integration efforts," said Standard & Poor's
credit analyst Ben Bubeck. Proceeds from the proposed $40 million
first-lien term loan add-on will be used to repay the company's
existing second-lien term loan.
The ratings on Wyle reflect modest profitability inherent in the
government services business, reliance on budgets of key Federal
government agencies, and high financial leverage. These factors
partly are offset by a strong niche position providing test &
evaluation, acquisition support, and life sciences services, and a
predictable revenue stream based on contractual backlogs of
business.
Wyle is a supplier of diversified engineering, technical support,
and life sciences services and solutions to Federal government
agencies, including the Department of Defense and the National
Aeronautics and Space Administration. Wyle had approximately
$182 million in operating lease-adjusted debt as of December 2006.
The stable outlook reflects a fairly visible revenue base,
supported by a steady backlog. A revision of the outlook to
positive would likely be a function of continued growth of the
revenue base and an improvement to the leverage profile as modest
free operating cash flow continues to be used to repay debt. A
substantial increase in leverage, likely the result of a debt-
financed acquisition, or a major recompete failure could result in
a revision of the outlook to negative.
XILLIX TECH: Sells Fluorescence Endoscopy Patents to Novadaq
------------------------------------------------------------
Xillix Technologies Corp. last week entered into an asset purchase
agreement to sell certain business assets, including its
intellectual property, certain capital assets and inventory, to
Novadaq Technologies Inc.
The intellectual property which Xillix has agreed to sell to
Novadaq includes Xillix's auto-fluorescence and multi-modal
imaging portfolio of 31 issued patents and multiple pending
applications in the United States, Japan and Europe. The sale
also includes rights to innovative fluorescence imaging
technologies.
In exchange for the assets which Xillix has agreed to sell to
Novadaq,Novadaq has agreed to pay Xillix consideration in the
amount of CDN$3 million at closing, of which CDN$1.075 million
will be paid in cash and CDN$1.925 million be paid in cash or, at
Novadaq's election, common shares of Novadaq, based on
the volume weighted average trading price of Novadaq's common
shares on the Toronto Stock Exchange for the five trading days
preceding the execution ofthe asset purchase agreement.
Closing of the transaction, currently scheduled to occur in early
May 2007, is subject to a number of conditions, including (among
others) the approval of the transaction by the Supreme Court of
British Columbia pursuant to Xillix's CCAA proceedings and the
approval of Novadaq's issuance of shares by the Toronto Stock
Exchange.
About Novadaq
Based in Toronto, Ontario -- http://www.novadaq.com/-- (TSE:NDQ)
develops real-time medical imaging systems and image guided
therapies for the operating room.
About Xillix
Xillix Technologies Corp. -- http://www.xillix.com/-- (TSX: XLX)
is a Canadian medical device company. Xillix's currently approved
device, Onco-LIFE(TM), incorporates fluorescence and white-light
endoscopy in a single device that has been developed for the
detection and localization of lung and gastrointestinal cancers.
An international multicenter lung cancer clinical trial of Onco-
LIFE demonstrated a 325% per-lesion improvement in the detection
of early lung cancer (moderate-severe dysplasia and carcinoma in
situ) and a 250% per-patient improvement compared to white-light
alone. Onco-LIFE is approved for sale in the United States for
the lung application and in Europe, Canada and Australia for both
lung and GI applications. The company also recently announced
that it has developed a new product, LIFE Luminus(TM), designed to
allow fluorescence imaging of the colon using conventional video
endoscope technology.
Xillix is currently under creditor protection pursuant to CCAA
proceedings.
* Dreier Stein's Transactional Dep't. Fortifies with New Recruits
-----------------------------------------------------------------
Dreier Stein & Kahan LLP is disclosed that four attorneys from
Christensen, Glaser, Fink, Jacobs, Weil & Shapiro LLP have joined
the firm's Transactional Department. Gregory Rovenger, Esq. and
Edward Schultz, Esq. have joined the firm as partners, while Alvin
Galstian, Esq. and Jennifer Provencher, Esq. have joined as
associates.
The addition of the team adds depth to Dreier Stein 's already
well-respected Transactional Department, and marks a significant
step in the growth of the firm while enhancing its focus on
providing the finest legal expertise and client service.
"The breadth and tremendous depth of this outstanding team's
corporate and securities experience is a great complement to the
firm's present capabilities in the Corporate Transactional
Department," Robert L. Kahan, partner at Dreier Stein and chair of
the firm's Transactional Department stated. "They bring an energy
and enthusiasm that resonates with clients. The company is
excited to have them on board."
Mr. Rovenger, who has advised clients on a number of landmark
transactional, trust and tax matters, will continue his focus on
corporate and real estate law as well as income tax and estate
planning and fiduciary law.
"Dreier Stein provides an ideal environment for both existing and
new clients. The firm offers transactional competencies that
match those of the largest firms, while providing the personalized
service of a boutique," Mr. Rovenger stated. "The firm's
entrepreneurial approach to servicing clients will be a tremendous
advantage as we expand and increase the firm's client
relationships."
Mr. Schultz, who has represented clients from emerging companies
to multinationals in mergers and acquisitions well as securities
and financing transactions, will continue to provide counsel in
corporate and securities law.
"Dreier Stein really works to create a firm environment that is
attractive to clients, partners and associates. The result is a
truly collegial team," Mr. Schultz stated. "I view this as a
great opportunity to work with a firm with tremendous potential
for future growth."
Mr. Galstian practices in the areas of real estate, where he
represents clients in development, construction and transactions;
and in corporate and securities law, including mergers and
acquisitions and private placements.
Ms. Provencher practices corporate and securities law, including
mergers and acquisitions, formation, growth and development, well
as debt and equity financing.
"The addition of Gregory, Ed, Alvin and Jennifer is an exciting
move forward for Dreier Stein," Stanton "Larry" Stein stated, name
partner and chair of the firm's Entertainment Litigation
Department. "The firm has been overwhelmed with the positive
response it received from within the legal community."
As the firm grows, Mr. Kahan noted, it will carefully maintain it
client-focused culture.
"The firm wants to change the practice of law from being a
business back to being a profession," Mr. Kahan stated. "The firm
is committed to treating its lawyers, staff and clients with
dignity and respect."
About Gregory L. Rovenger, Esq.
Gregory Rovenger, Esq. is a partner in Dreier Stein's
Transactional Department. His transactional work has included the
sale of a 50% interest in the largest U.S. Spanish-language daily
newspaper; the sale, acquisition and development of hotel and
casino properties in the Las Vegas area; the sale of a vodka
production facility in Poland; and the sale of one of the largest
wooden-hull yachts in the world. Mr. Rovenger successfully
concluded the largest charitable land donation under the
California Natural Heritage Preservation Tax Credit Act of 2000;
and successfully litigated in U.S. Tax Court an income tax
assessment estimated at more than $200 million. He has
represented the world's largest-selling, ultra-premium tequila
manufacturer and distributor, and represented fiduciaries in
various transactions, including geothermal and solar power plant
financings, airplane lease financings, tax-exempt bond offerings,
and trust administration. Mr. Rovenger earned an LL.M. in
Taxation from New York University in 1988, a J.D. from Hastings
College of the Law at the University of California in 1987, and a
B.S. in Finance from San Diego State University in 1984. He is a
member of the Bar of the State of California.
About Edward T. Schultz, Esq.
Edward Schultz, Esq. is a partner in the Transactional Department
at Dreier Stein. His experience includes structuring, egotiating,
documenting and closing all forms of mergers and acquisitions. He
has extensive experience in public and private debt and equity
offerings, secured lending, restructurings and other corporate and
business transactions. Before joining Dreier Stein & Kahan LLP,
Mr. Schultz worked on significant transactions on behalf of MGM
MIRAGE, Metro-Goldwyn- Mayer and Tracinda Corporation. Prior to
that, he was senior vice president and corporate counsel at
Initiative Media Worldwide, a wholly owned subsidiary of The
Interpublic Group of Companies, an international advertising,
public relations and marketing conglomerate. Mr. Schultz earned a
J.D. from Southwestern University School of Law in 1995 and a B.A.
in Economics from Depauw University in 1987. He is a member of
the Bar of the State of California.
About Alvin G. Galstian, Esq.
Alvin Galstian, Esq. is an associate in Dreier Stein's Real Estate
and Transactional Departments. His real estate practice also
includes representing clients in the purchase, sale and exchange
of retail, mixed-use and commercial properties. His transactional
practice also includes private placements of debt and equity
securities, contract negotiation, and general corporate matters.
Prior to joining Dreier Stein, he represented one of the world's
leading hotel and gaming companies on multiple acquisitions and
dispositions of resort-casinos, the development of a large mixed-
use project and general corporate matters. Mr. Galstian earned
his J.D. in 2000 from Loyola Law School, Los Angeles, where he was
the managing editor of the Loyola of Los Angeles International and
Comparative Law Review. He received B.A. degrees in Economics and
Political Science from the University of Southern California in
1996. Mr. Galstian is member of the Bar of the State of
California, the American Bar Association and the Los Angeles
County Bar Association. He is a licensed real estate broker in
the State of California and a member of the Urban Land Institute.
About Jennifer M.K. Provencher, Esq.
Jennifer Provencher, Esq. is an associate in Dreier Stein's
Transactional Department. Her practice includes all areas of
business and corporate law, including real property transactions.
Ms. Provencher earned a J.D., cum laude, in 2004 from the DePaul
University College of Law. She received her B.S. in 1999 from the
University of Minnesota, Ms. Provencher is a member of the Bar of
the States of California and Illinois. She serves on the board of
directors for Create Now!, a nonprofit organization serving high-
and at-risk children through creative arts mentoring, resources
and opportunities.
About Christensen Glaser
Christensen, Glaser, Fink, Jacobs, Weil & Shapiro LLP is a full
service law firm of approximately 110 attorneys located in the
Century City area of Los Angeles, California. Formed in 1988, the
firm has continued to grow and prosper. Its clientele includes a
diverse mix of international, national and local corporations and
private entrepreneurs. Although based in Los Angeles, the firm
represents clients throughout California, the United States and
the world.
About Dreier, Stein & Kahan LLP
Headquartered in Santa Monica's Water Garden complex and
established Jan. 1, 2007, Dreier, Stein & Kahan LLP is a mid-size,
bi- coastal firm with a second West Coast office at Fox Plaza in
Century City. Its primary areas of practice include entertainment
litigation, intellectual property, commercial litigation, media,
corporate, finance, securities, franchise and distribution
counseling, mergers and acquisitions, taxation, labor and
employment, bankruptcy, insolvency and other areas of
transactional and litigation law. Dreier Stein & Kahan also
serves as the West Coast affiliate of Manhattan- based Dreier LLP,
an 11-year-old firm of approximately 125 lawyers that represents
institutional, entrepreneurial and individual clients in diverse
sectors of financial, industrial and service-oriented markets.
* Young Conaway's NY Office Extends Convenience Access to Clients
------------------------------------------------------------------
Young Conaway Stargatt & Taylor LLP has opened an office located
in Midtown Manhattan, New York. The office will provide clients
and co-counsel with convenient access to the lawyers in Young
Conaway's national practice areas and increase the firm's ability
to serve as a resource to other law firms.
"Many of the world's leading law firms have come to rely upon the
firm's depth of practice areas and responsive service,"
James L. Patton, Jr., the firm chairman and partner. "The New
York Office is simply an extension of what has come to be expected
from attorneys in the firm's Wilmington Office. The firm is the
law firm that law firms trust with their clients."
Pauline K. Morgan, a partner in the firm's Bankruptcy and
Corporate Restructuring Section, will serve as the office-managing
partner. Ms. Morgan, who has represented debtors, creditors
committees and secured lenders in some of the nation's largest
cases, stated, "The addition of the New York office will allow
Young Conaway's national practices to continue building
collaborative relationships with law firms that require conflict
counsel in large corporate and bankruptcy matters, which is a
hallmark of Young Conaway's success."
Young Conaway's new offices are located at:
Suites 606 & 608
845 Third Avenue
New York, NY 10022
Tel: (646) 290-5018
Fax: (646) 290-5019
About Young Conaway Stargatt & Taylor LLP
Young Conaway Stargatt & Taylor LLP --
http://www.youngconaway.com/-- is one of Delaware's largest law
firms that offers sophisticated national corporate, bankruptcy,
commercial and intellectual property practices along with local
and regional employment, environmental, commercial real estate,
tort and insurance and business law practices.
Young Conaway counsels and represents international, national and
local corporate and individual clients. In addition, many of
Young Conaway's clients include colleagues from major law firms
throughout the U.S. and around the world.
* Matthew A. Salerno Joins Ulmer & Berne LLP's Business Practice
----------------------------------------------------------------
Matthew A. Salerno has joined Ulmer & Berne LLP as an associate in
its Corporate Restructuring and Creditors' Rights Group. Mr.
Salerno provides business counseling to clients, and has
significant experience in a wide variety of matters including
corporate restructuring, M&A transactions, bankruptcy and other
related matters. He regularly represents clients in
reorganizations including workouts, state-related insolvency
proceedings, complex chapter 11 proceedings and other commercial
matters.
Prior to joining Ulmer & Berne, Mr. Salerno was an attorney with
McDonald Hopkins LLC. He received his J.D. from Case Western
Reserve University School of Law.
Ulmer & Berne LLP -- http://www.ulmer.com/-- established in 1908,
is one of Ohio's largest law firms, as well as one of the fastest
growing in the Midwest. The Firm was recently recognized in The
BTI Consulting Group's most recent survey of corporate counsel as
one of only 85 firms nationally "who deliver the best value for
the dollar." Also, in a survey of Fortune 500 companies by
Corporate Counsel magazine, Ulmer & Berne has been chosen as a Go-
To Law Firm(R). Less than one-half of one percent of all the law
firms in the US and abroad received this distinction.
A full-service firm with over 180 attorneys in Cleveland,
Columbus, Cincinnati and Chicago, Ulmer & Berne represents
publicly traded and privately held companies, financial
institutions, pharmaceutical companies, family businesses,
international joint ventures and affiliations, investor groups,
start-ups and emerging businesses, public bodies, and nonprofit
organizations.
* BOND PRICING: For the Week of April 23 - April 27, 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,
Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez,
Tara Marie A. Martin, John Paul C. Canonigo, 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-
mail. Additional e-mail subscriptions for members of the same firm
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 ***