/raid1/www/Hosts/bankrupt/TCR_Public/070510.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, May 10, 2007, Vol. 11, No. 110
Headlines
1210 UTICA: Voluntary Chapter 11 Case Summary
ACE SECURITIES: Fitch Holds BB Rating on 2005-SD3 Class B-1 Certs.
ACE SECURITIES: S&P Junks Rating on Class B-2 Certificates
ACRO BUSINESS: Want to Use Cash Collateral Until June 15
ACRO BUSINESS: Amended Plan Confirmation Hearing Slated for May 30
ADVANSTAR COMMS: S&P May Lift Ratings After Veronis Deal Closing
AHPC HOLDINGS: Nasdaq to File Form 25 with SEC for Stock Delisting
ALL AMERICAN: NASDAQ to Delist Common Stock after Form 25 Filing
ALTERNATIVE LOAN: S&P Puts Class B-4 Certs. Rating on Neg. Watch
AMDL INC: Completes First Private Offering of Stocks and Warrants
AMERICAN HOME: Moody's Rates 2007-2 Class II-M-5 Notes at Ba2
AMSTED INDUSTRIES: Good Performance Cues Moody's to Lift Ratings
ARMOR HOLDINGS: BAE Systems Merger Cues Moody's Ratings' Review
BAY CLUB: Case Summary & Two Largest Unsecured Creditors
BEAR STEARNS: Moody's Rates 2007-3 Class B-4 Certificates at Ba2
BEAR STEARNS: Moody's Holds Low-B Ratings on Six Certificates
BEAR STEARNS: Moody's Rates 2007-AC4 Class B-2 Certificates at Ba2
BERKLEY RESOURCES: Meyers Norris Raises Going Concern Doubt
BIOMARIN PHARMA: Posts $9.3MM Net Loss in Quarter Ended March 31
BIOMARIN PHARMA: S&P Junks Rating on $325 Million Senior Notes
BOK FINANCIAL: Improved Capital Cues S&P's Positive Outlook
BOMBAY COMPANY: PricewaterhouseCoopers Raises Going Concern Doubt
CALIBRE ENERGY: Malone & Bailey Raises Going Concern Doubt
CONSTELLATION BRANDS: Moody's Rates $700 Mil. Senior Notes at Ba3
CONSTELLATION BRANDS: Fitch Rates $700MM Sr. Note Offering at BB-
CELLEGY PHARMA: Posts $537,000 Net Loss in Quarter Ended March 31
CONSECO INC: Earns $10.4 Million in First Quarter Ended March 31
CONSTELLATION BRANDS: Inks Pact to Repurchase $421MM Common Stock
CONSTELLATION BRANDS: S&P Rates Proposed $700 Million Notes at BB-
CREDIT SUISSE: Fitch Junks Rating on $19.2 Million Class I Notes
CSFB ABS: S&P Cuts Rating on Class B Certificates to D from CCC
CYGNUS BUSINESS: High Leverage Prompts Moody's to Affirm Ratings
DAIMLERCHRYSLER: Chrysler Launches Ad Campaign to Define Brand
DBDS MELBOURNE: Case Summary & 7 Largest Unsecured Creditors
DELUXE ENTERTAINMENT: Loan Increase Cues Moody's to Hold B1 Rating
DLJ COMMERCIAL: Fitch Holds C Rating on $12.4MM Class B-8 Certs.
ELEC COMMS: Completes Sale of Unsecured Notes for $275,000
EMISPHERE TECH: March 31 Balance Sheet Upside-Down by $9.1 Million
ENTERPRISE PRODUCTS: Fitch Holds Junior Notes' Rating at BB+
ENVIRONMENTAL ENERGY: Turner Jones Raises Going Concern Doubt
FELCOR LODGING: Earns $29 Million in First Quarter Ended March 31
FENDER MUSICAL: Moody's Rates $200 Million Senior Loan at B2
FIRST BANCORP: Board Affirms Payment of Dividends on Series A to E
GATEHOUSE MEDIA: S&P Lifts Rating on Existing $960MM Loan to BB-
GE CAPITAL: Fitch Upgrades Ratings on Nine 2002-1 Certificates
GENERAL MOTORS: Offers 0% Financing for Silverado & Sierra Trucks
GOODYEAR TIRE: Plan 22.5 Million Common Stock Offering
GRAHAM PACKAGING: Dec. 31 Balance Sheet Upside-Down by $597 Mil.
HARBORVIEW MORTGAGE: Moody's Rates Class B-9 Certificates at Ba1
HAYES LEMMERZ: Stockholders Approve $180 Million Rights Offering
HAYES LEMMERZ: Fitch Assigns B Issuer Default Rating
HC CARIBBEAN: Creditors Meeting Slated for May 24
HC CARIBBEAN: Proofs of Claim Must be Filed by Aug. 22
HELIOS FINANCE: Fitch Assigns Low-B Ratings on Three Note Classes
HELIOS FINANCE: S&P Rates $19.9 Million Class B-4 Notes at B-
HELLER FINANCIAL: Fitch Holds Low-B Ratings on Two Certificates
INDYMAC ABS: Fitch Takes Various Rating Actions on Six Issues
ISP CHEMCO: Moody's Rates Proposed $1.2 Billion Facilities at Ba3
IXIS REAL: Fitch Holds BB Rating on 2005-HE1 Class B4 Certs.
J.P. MORGAN: Moody's Holds Low-B Ratings on Five 2005-LDP1 Certs.
KEY COMMERCIAL: Moody's Rates Class K Certificates at B1
KNIGHT RIDDER: S&P Removes Neg. Watch and Lowers Ratings to BB-
LAZARD LTD: March 31 Balance Sheet Upside-Down by $206.8 Million
LB-UBS COMMERCIAL: Fitch Holds Low-B Ratings on 3 2003-C5 Certs.
LOCATEPLUS HOLDINGS: Livingston Haynes Raises Going Concern Doubt
LONGPOINT RE: S&P Rates $500 Million Class A Notes at BB+
MCCLATCHY CO: S&P Lowers Rating on Senior Debt to BB- from BB+
MEDISTEM LABORATORIES: Posts $539,197 Net Loss in Qtr Ended Mar 31
MEGA BRANDS: Earns $25.3 Million in Full Year Ended December 31
MEZZ CAP: Fitch Holds Low-B Ratings on Three Certificate Classes
MGM MIRAGE: Moody's Rates $500 Million Senior Notes Issue at Ba2
MICHELS BUILDERS: Case Summary & 38 Largest Unsecured Creditors
NEFF RENTAL: Commences $325MM Cash Tender Offer with Neff Finance
NEW ENGLAND WINGS: Wants Five Affiliates' Chap. 11 Cases Dismissed
NORTHWEST AIRLINES: Releases Unofficial Results of Plan Voting
NTK HOLDINGS: Earns $57.7 Million in Year Ended December 31
PACIFIC SEACRAFT: Voluntary Chapter 11 Case Summary
PENNSYLVANIA HIGHER: Stable Enrollment Cues S&P's Positive Outlook
PNC COMMERCIAL: Fitch Junks Rating on $7 Million Class M Certs.
PHS GROUP: Case Summary & 65 Largest Unsecured Creditors
POE FINANCIAL: Hearing on Plan-Filing Extension Plea Set Today
POLY-PACIFIC INT'L: Collins Barrow Raises Going Concern Doubt
POWERLINX INC: Aidman Piser Raises Going Concern Doubt
PROPEX INC: Earns $1.8 Million in Year Ended December 31
RESMAE MORTGAGE: Gets Court OK to Increase Credit Line to $800MM
RESPONSE BIOMEDICAL: Ernst & Young Raises Going Concern Doubt
RITE AID: S&P Junks Rating on Proposed $1.220 Billion Senior Notes
SBARRO INC: Earns $9.9 Million in Full Year Ended December 31
SCOTTISH RE: Fitch Revises Watch to Positive from Evolving
SEA CONTAINERS: Trustee Amends List of Unsecured Creditors Panel
SEA CONTAINERS: Wants $176 Million DIP Lending Agreement Approved
SEA CONTAINERS: Court Okays AP Services as Crisis Managers
SEA CONTAINERS: Wants Archlane Leases Settlement Approved
SPHINX LTD: Liquidators Can't Get Info from Europe Using U.S. Law
SPI PETROLEUM: Unit Acquisition Cues S&P to Affirm B Rating
STARBOUND RE: S&P Rates Proposed $66.5 Million Sr. Bank Loan at BB
STRATOS INTL: Shareholders' Meeting Delay Prompts Nasdaq Delisting
STRUCTURED ASSET: Moody's Rates Class B1 Certificates at Ba1
STRUCTURED ASSET: Credit Deterioration Cues S&P to Junk Rating
TOYS "R" US: Expects to File 2006 Annual Report on May 21
TOYS "R" US: Non-Filing of Form 10-K Cues S&P's Negative Outlook
TOYS "R" US: Form 10-K Filing Delay Cues Moody's to Review Ratings
UGS CORP: Siemens Acquisition Cues S&P to Withdraw Ratings
UNIQUE MONTESSORI: Voluntary Chapter 11 Case Summary
US AIRWAYS: Pilots Express Frustration Over Management Failures
VERASUN ENERGY: Intends to Offer $450 Million Senior Notes
VERASUN ENERGY: Posts $312,000 Net Loss in Quarter Ended March 31
VERASUN ENERGY: S&P Rates Proposed $450 Million Senior Notes at B-
WARNER MUSIC: Incurs $27 Million Net Loss in 2nd Quarter 2007
WELLS FARGO: Moody's Rates 2007-2 Class B-1 Certificates at Ba1
WENTWORTH ENERGY: Hein & Associates Raises Going Concern Doubt
WEST CORPORATION: Moody's Lowers Sr. Sec. Credit Rating to B1
* Annapolis Group Names Larry Yumkas as Chief Operating Officer
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
1210 UTICA: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: 1210 Utica Avenue Realty Corp.
1210 Utica Avenue
Brooklyn, NY 11203
Bankruptcy Case No.: 07-42474
Chapter 11 Petition Date: May 8, 2007
Court: Eastern District of New York (Brooklyn)
Debtor's Counsel: Bruce Weiner, Esq.
Rosenberg Musso & Weiner, L.L.P.
26 Court Street, Suite 2211
Brooklyn, NY 11242
Tel: (718) 855-6840
Fax: (718) 625-1966
Total Assets: $1,200,000
Total Debts: $824,000
The Debtor does not have any creditors who are not insiders.
ACE SECURITIES: Fitch Holds BB Rating on 2005-SD3 Class B-1 Certs.
------------------------------------------------------------------
Fitch Ratings has affirmed the ratings on these classes of Ace
Securities Corporation issues:
Series 2004-SD1
-- Class A at 'AAA';
-- Class M-1 at 'AA';
-- Class M-2 at 'A';
-- Class M-3 at 'BBB';
-- Class M-4 at 'BBB-'.
Series 2005-SD3
-- Class A at 'AAA';
-- Class M-1 at 'AA';
-- Class M-2 at 'A';
-- Class M-3 at 'BBB+';
-- Class M-4 at 'BBB';
-- Class M-5 at 'BBB-';
-- Class B-1 at 'BB'.
Series 2006-SD1
-- Class A at AAA';
-- Class M-1 at 'AA';
-- Class M-2 at 'A+';
-- Class M-3 at 'A';
-- Class M-4 at 'A-';
-- Class M-5 at 'BBB'.
The affirmations, affecting approximately $267.6 million of the
outstanding balances, are taken due to a satisfactory relationship
of credit enhancement to expected losses.
As of the April distribution date, the transactions listed above
are seasoned from 12 (2006-SD1) to 30 (2004-SD1) months. The pool
factors (current principal balance as a percentage of original)
range approximately from 44% (2004-SD1) to 65% (2005-SD3).
In all three transactions, the mortgage loans were acquired by
various originators and are master serviced by Wells Fargo Bank,
N.A. (rated 'RMS1' by Fitch).
ACE SECURITIES: S&P Junks Rating on Class B-2 Certificates
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class B-2
from ACE Securities Corp. Home Equity Loan Trust Series 2005-SL1
to 'CCC' from 'B' and removed it from CreditWatch, where it was
placed with negative implications Jan. 22, 2007. At the same
time, the ratings on classes B-1 and M-7 were placed on
CreditWatch negative.
The lowered rating and CreditWatch placements reflect the
deteriorating performance of the collateral in the pool. Credit
support for this transaction is derived from a combination of
subordination, excess interest, and overcollateralization. Credit
enhancement is currently projected to fall significantly below the
original credit support amount of 13.15% for class B-2. While
actual credit enhancement is 8.29% of the current pool balance,
additional losses resulting from foreclosures (approximately
$3,051,000) and REOs (approximately $740,000) will likely erode
much of the $3,143,360 of overcollateralization. Cumulative
losses of $12,848,880 for this transaction are 4.97% of the
original pool balance. As of the April 2007 distribution date,
total delinquencies, as a percentage of the current pool principal
balance, were 16.29%, while severe delinquencies (90-plus days,
foreclosure, and REO) accounted for 8.37%. The series'
outstanding pool balance is 38.78% of its original size.
The rating on class B-2 was removed from CreditWatch negative
because it was lowered to 'CCC'. According to Standard & Poor's
surveillance practices, ratings lower than 'B-' on classes of
certificates or notes from RMBS transactions are not eligible to
be on CreditWatch negative.
Standard & Poor's will continue to closely monitor the performance
of this transaction. If the delinquent loans translate into
realized losses, S&P may take further negative rating actions on
these classes, depending on the size of the losses and remaining
credit support. Conversely, if pool performance improves and
credit support is not further eroded, S&P will affirm the ratings
and remove them from CreditWatch.
Rating Lowered and Removed from Creditwatch Negative
ACE Securities Corp. Home Equity Loan Trust
Series 2005-SL1
Rating
------
Class To From
----- -- ----
B-2 CCC B/Watch Neg
Ratings Placed on Creditwatch Negative
ACE Securities Corp. Home Equity Loan Trust
Series 2005-SL1
Rating
------
Class To From
----- -- ----
B-1 BB+/Watch Neg BB+
M-7 BBB-/Watch Neg BBB-
ACRO BUSINESS: Want to Use Cash Collateral Until June 15
--------------------------------------------------------
Acro Business Finance Corp. asks the U.S. Bankruptcy Court for the
District of Minnesota for authority to continue using the cash
collateral securing repayment of its obligations to M&I Marshall &
Ilsley Bank, until June 15, 2007.
The Debtor proposes to use the fund based on a budget available
for free at http://ResearchArchives.com/t/s?1eb9
In a Court filing dated April 24, 2007, the Debtor said that it
has an ongoing need to use cash collateral to pay costs and
expenses, and to fund the borrowing needs of its costumers and to
pay other costs of liquidation of its assets.
The Debtor also informed the Court that it filed a plan of
liquidation on April 23, 2007, after it failed to obtain new
loans or equity to recapitalize and to reorganize its business.
In that regard, the Debtor said it hired James Bartholomew, at
Lighthouse Management Group, to manage the company's day-to-day
operations and liquidate assets.
Based in Minneapolis, Minnesota, Acro Business Finance Corp.
provides financial services. The company filed for chapter 11
protection on July 12, 2006 (Bankr. D. Minn. Case No. 06-41364).
Clinton E. Cutler, Esq., and Cynthia A. Moyer, Esq., at Fredrikson
& Byron, PA, represent the Debtor. No Official Committee of
Unsecured Creditors has been appointed in this case. When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.
ACRO BUSINESS: Amended Plan Confirmation Hearing Slated for May 30
------------------------------------------------------------------
The Honorable Robert J. Kressel of the U.S. Bankruptcy Court for
the District of Minnesota will convene a hearing on May 30, 2007,
9:30 p.m., at 300 S. 4th Street, Courtroom 8 West, 8th floor in
Minneapolis, Minnesota, to consider confirmation of Acro Business
Finance Corp.'s Amended Chapter 11 Plan of Liquidation.
The Court approved on April 24, 2007, the Debtor's Amended
Disclosure Statement explaining its Liquidation Plan.
Overview of the Plan
The Debtor discloses that upon confirmation of the Plan, a
post-confirmation liquidating trust will be established for the
benefit of all of the Debtor's creditors administered by the
liquidating agent. All of Debtor's assets will be transferred
to the liquidating trust subject to the lien of M&I Marshall and
Ilsley Bank.
The liquidating agent will be charged with liquidating the assets
to cash by no later than June 30, 2007. All cash will be
distributed pursuant to the Plan.
Treatment of Claims
Under the Plan, Administrative Expense, Statutory Fees and Court
Cost, Priority Tax Claims will be paid in full, in cash.
Holders of Postpetition Claims, incurred in the ordinary course of
the Debtor's business, will be paid as the claims become due, as
agreed between the holders and the Debtor.
The Debtor said that M&I Marshall and Ilsley Bank holds a
$11,105,010 claim secured by a lien on virtually all of the
Debtor's personal property and real property, including the
Debtor's interest in loans made to its borrowers.
On the effective date of the Plan, M&I Marshall and Ilsley Bank
will receive cash remaining on hand after:
* payment of administrative and priority claims;
* reserves for funding of advances or loans in amounts
acceptable to the Liquidating Agent and M&I; and
* working capital retained by the Liquidating Agent to fund
post-confirmation expenses.
After the effective date, M&I Marshall and Ilsley Bank will
receive periodic cash payments from collection of amounts due
the postpetition estate from the Debtor's borrowers.
All assets of the Debtor and the bankruptcy estate transferred to
the postpetition estate will remain subject to the first priority
valid and perfected lien of M&I Marshall and Ilsley Bank.
Participants under respective participation agreements hold a
$3,125,000 claim against the Debtor as of March 30, 2007. On and
after the effective date, amounts collected from the Debtor's
borrowers and representing the share of a participant will be
deposited into the participation account.
Participants will receive periodic distribution under the terms
of the applicable participation agreement. To the extent that
participation agreements constitute executory contracts under
Section 365 of the Bankruptcy Code, the contracts will be assumed.
Unsecured Claims
General Unsecured Creditors will receive a pro rata share of funds
in the post-confirmation estate after payment of other claims.
The Debtor says that it owes Senior Subordinated Debt holders
$2,732,700 plus accrued and unpaid interest. On and after the
effective date, the Liquidating Agent will pay amounts, if any, to
the holders of claims in this class only if and until the secured
and unsecured claims of M&I Marshall and Ilsley Bank are paid in
full.
The Debtor expects any distribution to General Unsecured Creditors
and Senior Subordinated Debt holders.
Equity Interests in the Debtor will be cancelled and holders will
not receive any distribution under the Plan.
A full-text copy of Disclosure Statement is available for free
at:
http://www.researcharchives.com/bin/download?id=070509031337
Based in Minneapolis, Minnesota, Acro Business Finance Corp.
provides financial services. The company filed for chapter 11
protection on July 12, 2006 (Bankr. D. Minn. Case No. 06-41364).
Clinton E. Cutler, Esq., and Cynthia A. Moyer, Esq., at Fredrikson
& Byron, PA, represent the Debtor. No Official Committee of
Unsecured Creditors has been appointed in this case. When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.
ADVANSTAR COMMS: S&P May Lift Ratings After Veronis Deal Closing
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings,
including the 'B-' corporate credit ratings, on New York City-
based Advanstar Communications Inc. remain on CreditWatch with
positive implications because of Veronis Suhler Stevenson's
pending acquisition of the company. After the transaction is
completed, S&P will raise the ratings, including the corporate
credit rating, to 'B' from 'B-', and assign a stable outlook.
S&P also assigned its 'B' corporate credit rating to Advanstar's
parent companies VSS-AHC Acquisition Corp., which will be merged
into Advanstar Holdings Corp., and VSS-AHC Consolidated Holdings
Corp., both of which will be the borrowers of the credit
facilities. Although leverage will increase, S&P will base a
potential upgrade on the extent of improvement in the company's
liquidity and flexibility as a result of the transaction.
At the same time, S&P assigned bank loan and recovery ratings to
the proposed $835 million senior secured credit facilities of VSS-
AHC Acquisition Corp., which will be merged into Advanstar
Holdings Corp. at closing. The proposed $590 million first-lien
bank loan is rated 'B', at the same level as the corporate credit
rating on VSS-AHC Acquisition Corp. The first-lien recovery
rating is '2', indicating the expectation for substantial (80%-
100%) recovery of principal in the event of a payment default.
The $245 million second-lien term loan due 2014 is rated 'CCC+',
two notches below the corporate credit rating on VSS-AHC
Acquisition Corp. The second-lien recovery rating is '5',
indicating the expectation for negligible (0%-25%) recovery of
principal in the event of a payment default. In addition to these
credit facilities, the company will also have an unrated
$75 million pay-in-kind holding company note.
"The outlook is stable," said Standard & Poor's credit analyst
Tulip Lim, "but if operating performance weakens, the company's
margin of compliance with financial covenants tightens,
discretionary cash flow generation decreases, or leverage
increases, we could revise the outlook to negative."
AHPC HOLDINGS: Nasdaq to File Form 25 with SEC for Stock Delisting
------------------------------------------------------------------
AHPC Holdings Inc. reported that the NASDAQ Stock Market would
delist its common stock, which was suspended on March 22, 2007,
and has not traded on NASDAQ since that time. NASDAQ will file a
Form 25 with the Securities and Exchange Commission to complete
the delisting. The delisting becomes effective ten days after the
Form 25 is filed.
As reported in the Troubled Company Reporter on Feb. 19, 2007,
AHPC Holdings has received a Staff Determination Letter from
the Listing Qualifications of The Nasdaq Stock Market Inc.
indicating that the company no longer qualifies in the minimum
stockholders' equity requirement set in NASDAQ Marketplace
Rule 4310 and was subjected to delisting from the NASDAQ Capital
Market.
About AHPC Holdings
Based in Glendale Heights, AHPC Holdings, Inc. (Nasdaq: GLOV) --
http://www.ahpc.com/-- markets disposable medical examination,
foodservice and retail gloves. The company's wholly owned
subsidiary, American Health Products Corporation, supplies branded
and private label disposable gloves to the healthcare,
foodservice, retail and industrial markets nationwide.
Going Concern Doubt
Plante & Moran, PLLC, expressed substantial doubt about
AHPC Holdings, Inc.'s ability to continue as a going concern after
auditing the company's financial statements for the fiscal year
ended June 30, 2006. The auditing firm pointed to the company's
recurring losses and negative cash flows from operations.
ALL AMERICAN: NASDAQ to Delist Common Stock after Form 25 Filing
----------------------------------------------------------------
All American Semiconductor Inc. disclosed that the NASDAQ Stock
Market would delist its common stock, which was suspended on
April 27, 2007, and has not traded on NASDAQ since that time. The
company was informed that NASDAQ would file a Form 25 with the
Securities and Exchange Commission to complete the delisting.
The delisting becomes effective ten days after the Form 25 is
filed.
On April 18, 2007, the company received a Staff Determination
Letter from The Nasdaq Stock Market indicating that the company is
not in compliance with the continued listing requirements set
forth in Nasdaq Marketplace Rule 4310(c)(14) because the company
failed to timely file its Annual Report on Form 10-K for the
fiscal year ended Dec. 31, 2006. The Staff Determination Letter
provides that, unless the company requests an appeal of this
determination by 4:00 p.m. Eastern Time on April 25, 2007, trading
of the company's common stock will be suspended at the opening of
business on April 27, 2007.
About All American
All American Semiconductor Inc. -- http://www.allamerican.com/--
(Nasdaq: SEMI) (Pink Sheets: SEMI.PK) is a Delaware corporation
with its principle place of business in Miami, Florida. It also
maintains corporate offices for West Coast operations in San Jose,
California. All American is a distributor of electronic
components manufactured by others. The company distributes a full
range of semiconductors including transistors, diodes, memory
devices, microprocessors, microcontrollers, other integrated
circuits, active matrix displays and various board-level products.
The company has 36 strategic locations throughout North America,
well as operations in both Asia and Europe.
The company and its Debtor-affiliates filed for Chapter 11
protection on April 25, 2007, (Bankr. Case No.: 07-12963 through
07-13002 S.D. Fla.) Tina M. Talarchyk, Esq. of the Squire Sanders
& Dempsey LLP represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed total assets of $117,634,000 and total
debts of $106,024,000.
ALTERNATIVE LOAN: S&P Puts Class B-4 Certs. Rating on Neg. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its rating on class B-4
from Alternative Loan Trust 2004-15 on CreditWatch with negative
implications.
The CreditWatch placement reflects the deteriorating performance
of the collateral pool. Credit support for this transaction is
derived from subordination and is currently below the original
amount of 0.20%. While actual credit enhancement is 0.19% of the
current pool balance, additional losses resulting from
foreclosures (approximately $1.6 million) and REOs (approximately
$1.663 million) will likely erode the $211,790 of subordination
still available. Cumulative losses of $360,663 for this
transaction are 0.12% of the original pool balance. As of the
April 2007 distribution date, total delinquencies, as a percentage
of the current pool principal balance, were 9.86%, and 3.35% were
categorized as seriously delinquent (90-plus days, foreclosure,
and REO). The outstanding pool balance of this series is 37.53%
of its original size.
Standard & Poor's will continue to closely monitor the performance
of this transaction. If the delinquent loans translate into
realized losses, further negative rating action can be expected on
this class, depending on the size of the losses and the remaining
credit support.
Rating Placed on Creditwatch Negative
Alternative Loan Trust 2004-15
Rating
------
Class To From
----- -- ----
B-4 B/Watch Neg B
AMDL INC: Completes First Private Offering of Stocks and Warrants
-----------------------------------------------------------------
AMDL Inc. has conducted a first closing of its combined Regulation
D/Regulation S private unit offering of up to 2,000,000 shares of
common stock and warrants to purchase 1,000,000 shares of common
stock generating gross proceeds of approximately $3,789,500,
exclusive of placement agent fees and expenses of approximately
$492,600.
The company said that the first closing consisted of 1,443,620
shares of AMDL common stock at $2.625 per share and three and
one-half year warrants to purchase an additional 721,810 shares,
exercisable at $3.86 per share. Warrants to purchase an
additional 144,362 shares were issued to the placement agents at
the same exercise price.
"The reception to the offering was extremely gratifying," AMDL's
President, Gary L. Dreher, said. "These funds provide the
additional working capital we need to expand Jade Pharmaceutical
Inc.'s business and product development efforts in China and for
approval of DR-70 in Asia and the U.S."
The offering will continue until units for up to an additional
556,380 shares and warrants to purchase an additional 278,190
shares have been sold or the offering is terminated by the
company. The sale of shares and warrants in the second closing
are expected to be on similar terms and conditions, no more
favorable than in the first closing.
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.
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.
AMERICAN HOME: Moody's Rates 2007-2 Class II-M-5 Notes at Ba2
-------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
notes issued by American Home Mortgage Investment Trust 2007-2,
and ratings ranging from Aa2 to Ba2 to subordinate notes in the
deal.
The Group I notes are backed by adjustable-rate and fixed-rate
first lien residential mortgage loans.
The ratings are based primarily on the credit quality of the loans
and on the protection against credit losses provided by
subordination, overcollateralization, excess spread, an interest
rate cap, an interest rate swap, and lender paid mortgage
insurance. Moody's expects collateral losses in Group I to range
from 0.6% to 0.8%.
The group II notes are backed by fixed-rate closed end junior lien
residential mortgage loans. The ratings are based primarily on
the credit quality of the loans and on the protection against
credit losses provided by subordination, overcollateralization,
excess spread, an interest rate cap, and an interest rate swap.
Moody's expects collateral losses in Group II to range from 10.50%
to 11.00%.
American Home Mortgage Servicing, Inc. will service the mortgage
loans and Wells Fargo Bank N.A. will act as master servicer.
Moody's has assigned Wells Fargo N.A. its top servicer quality
rating of SQ1 as a master servicer.
The complete rating actions are:
American Home Mortgage Investment Trust 2007-2
Mortgage-Backed Notes, Series 2007-2
* Cl. I-1A-1, Assigned Aaa
* Cl. I-1A-2, Assigned Aaa
* Cl. I-1A-3, Assigned Aaa
* Cl. I-2A-1, Assigned Aaa
* Cl. I-2A-2, Assigned Aaa
* Cl. I-3A-1, Assigned Aaa
* Cl. I-3A-2, Assigned Aaa
* Cl. I-M-1, Assigned Aa3
* Cl. I-M-2, Assigned A3
* Cl. II-A, Assigned Aaa
* Cl. II-M-1, Assigned Aa2
* Cl. II-M-2, Assigned A2
* Cl. II-M-3, Assigned Baa2
* Cl. II-M-4, Assigned Baa3
* Cl. II-M-5, Assigned Ba2
AMSTED INDUSTRIES: Good Performance Cues Moody's to Lift Ratings
----------------------------------------------------------------
Moody's Investors Service raised its Corporate Family and
Probability of Default ratings of Amsted Industries Incorporated;
CFR to Ba3 from B2, PDR to Ba3 from B2.
Moody's also affirmed its Ba3 senior secured rating but changed
the Loss Given Default assessment to LGD3, 46% from LGD3, 30%; and
raised its senior unsecured rating to B2 (LGD6, 90%) from Caa1,
(LGD5, 80%). The outlook was changed to stable from positive.
The upgrades reflect the combination of continuing strong
performance of Amsted's operations which contributed to improved
financial metrics and the elimination of the potential for a
technical default that existed under the Indenture of the
$250 Million Senior Unsecured Notes due 2011. The technical
default was possible because Amsted's strong financial performance
had raised the specter that its required purchases of ESOP shares
could exceed the amount of restricted payments allowed pursuant to
the Notes' indenture. On March 29, 2007, Amsted completed its
tender offer for the Notes and the related consent solicitation to
eliminate substantially all of the restrictive covenants and
certain events of default. Approximately $5 million of Notes
remain outstanding.
Moody's ratings of Amsted recognize the respective lead positions
of most of Amsted's products and the favorable effect on operating
margins from the higher variable cost structure attained since the
most recent earnings trough of fiscal 2003. Demand across the
company's product lines remains above mid-cycle levels and is
perpetuating cyclically-strong financial results, strong credit
metrics and good liquidity. While aggregate demand across the
company's product lines is likely to soften in step with economic
fundamentals in North America, the critical nature of Amsted's
products as core components of its customers' products should
support demand during troughs. As well, the higher variable cost
component should support higher earnings generation relative to
the levels achieved during prior troughs and credit metrics that
remain indicative of the Ba3 or higher rating. The high level of
cyclicality of the company's markets, the reduced benefit of
portfolio diversification as demand in each segment correlates
positively to economic activity in North America and the still
high debt level counter the current strong credit profile.
Significant payments in the near term for stock appreciation
rights and ongoing repurchases of ESOP shares could strain free
cash flow. This call on cash from Amsted's obligations to
purchase ESOP shares constrains the ratings. These returns to
shareholders limit the potential for debt reduction and will
reduce cash, although overall liquidity should remain supportive
of the current ratings.
The stable outlook reflects Moody's belief that demand for
Amsted's products should remain favorable over the intermediate
term. Metrics remain strong relative to the median values of other
Ba3-rated corporate families and provide a cushion for Amsted to
absorb lower business volumes that would accompany a cyclical
downturn or higher debt that could result, possibly from excessive
redemptions of ESOP shares. Debt to EBITDA being sustained below
3.0 times and EBIT to Interest being sustained above 4.0 times
during the next cyclical trough could lead to an upgrade. The
ratings may be downgraded if Amsted's product markets suffer a
prolonged decline resulting in sustained negative free cash flow
or if Amsted was to significantly rely on the revolver to meet
working capital needs. Downwards rating pressure could also
result if Debt to EBITDA is sustained above 4.0 times or EBIT to
interest is sustained below 2.5 times.
Downgrades:
Issuer: Amsted Industries Incorporated
* Senior Secured Bank Credit Facility,
Downgraded to 46 - LGD3 from 30 - LGD3
* Senior Unsecured Regular Bond/Debenture,
Downgraded to 90 - LGD6 from 80 - LGD5
Upgrades:
Issuer: Amsted Industries Incorporated
* Probability of Default Rating, Upgraded to Ba3 from B2
* Corporate Family Rating, Upgraded to Ba3 from B2
* Senior Unsecured Regular Bond/Debenture,
Upgraded to B2 from Caa1
Outlook Actions:
Issuer: Amsted Industries Incorporated
* Outlook, Changed To Stable From Positive
Amsted Industries Incorporated, headquartered in Chicago,
Illinois, is a diversified manufacturer of highly engineered
industrial components of products used in the railroad, vehicular,
construction and industrial sectors.
ARMOR HOLDINGS: BAE Systems Merger Cues Moody's Ratings' Review
---------------------------------------------------------------
Moody's Investors Service placed its ratings of Armor Holdings
Inc. (Corporate Family Rating of Ba3) on review for possible
upgrade. The review was prompted by the announcement that it has
entered into a definitive merger agreement to be acquired by BAE
Systems, Inc., a wholly-owned subsidiary of BAE Systems plc (long
term rating Baa2, short term rating, Prime-2) for total
consideration of $4.5 billion.
The review of Armor's ratings will focus on the probability and
nature of support from BAE Systems PLC. Armor's senior secured
credit facilities (not rated by Moody's) contain change of control
provisions, suggesting a high likelihood that this class of debt
will be repaid on completion of the acquisition. The existing
subordinated notes also contain change of control provisions. As
such, it is also likely that a substantial portion of these notes
will be redeemed concurrent with the acquisition. If all notes
are redeemed through the change of control offer, the rating will
be withdrawn. If any subordinated notes remain outstanding after
the conclusion of this offer and BAE provides explicit financial
support to those notes, then their ratings could be revised upward
to take into account BAE's credit strength. However, if BAE does
not provide such support, or if adequate financial information on
Armor is not provided post-acquisition, then the ratings would be
withdrawn.
Armor Holdings, headquartered in Jacksonville, FL, is a major
manufacturer of tactical wheeled vehicles and a leading
diversified manufacturer of vehicle armoring systems and life
safety and survivability products for the military, law
enforcement and commercial markets.
BAY CLUB: Case Summary & Two Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Bay Club Properties I, Ltd.
6787 West Tropicana Avenue, Suite 120-A
Las Vegas, NV 89103
Bankruptcy Case No.: 07-12649
Type of Business: The Debtor owns real estate.
Chapter 11 Petition Date: May 8, 2007
Court: District of Nevada (Las Vegas)
Judge: Bruce A. Markell
Debtor's Counsel: Thomas H. Fell, Esq.
Gordon & Silver, Ltd.
3960 Howard Hughes Parkway 9th Floor
Las Vegas, NV 89109
Tel: (702) 796-5555
Fax: (702) 369-2666
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Architecture Design & services unknown
Development
Attention: Thomas O'Neill
2160 West Charleston,
Suite J
Las Vegas, NV 89102
Red Rock Engineering & services unknown
Surveying
Attention: William Childs
2001 South Rainbow,
Suite K
Las Vegas, NV 89146
BEAR STEARNS: Moody's Rates 2007-3 Class B-4 Certificates at Ba2
----------------------------------------------------------------
Moody's Investors Service has assigned Aaa ratings to the senior
certificates issued by Bear Stearns Alt-A Trust 2007-3, and
ratings ranging from Aa2 to Ba2 to the subordinate certificates in
the deal.
The securitization is backed by adjustable-rate, first lien, Alt-A
mortgage loans acquired by EMC Mortgage Corporation and originated
by EMC, Bear Stearns Residential Mortgage Corporation, and various
other originators, none of which originated more than 10% of the
mortgage loans. The ratings are based primarily on the credit
quality of the loans and on the protection from subordination,
overcollateralization, and excess spread. Moody's expects
collateral losses to range from 1.25% to 1.45%.
EMC and HSBC Mortgage Corporation (USA) will service the loans.
Wells Fargo Bank, N.A. will act as master servicer. Moody's has
assigned EMC its servicer quality rating of SQ2 as a primary
servicer of prime loans. Furthermore, Moody's has assigned Wells
Fargo Bank, N.A. its top servicer quality rating of SQ1 as master
servicer.
The complete rating actions are:
Bear Stearns Alt-A Trust 2007-3
Mortgage Pass-Through Certificates, Series 2007-3
* Class I-A-1, Assigned Aaa
* Class I-A-2, Assigned Aaa
* Class II-A-1, Assigned Aaa
* Class M-1, Assigned Aa2
* Class M-2, Assigned A2
* Class B-1, Assigned Baa1
* Class B-2, Assigned Baa2
* Class B-3, Assigned Baa3
* Class B-4, Assigned Ba2
BEAR STEARNS: Moody's Holds Low-B Ratings on Six Certificates
-------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Bear Stearns
Commercial Mortgage Corporation, Commercial Mortgage Pass-Through
Certificates, Series 2005-PWR7 as:
- Class A-1, $31,138,351, affirmed at Aaa
- Class A-2, $188,000,000, affirmed at Aaa
- Class A-3, $527,652,000, affirmed at Aaa
- Class A-AB, $106,000,000, affirmed at Aaa
- Class A-J, $85,748,000, affirmed at Aaa
- Class X-1, Notional, affirmed at Aaa
- Class X-2, Notional, affirmed at Aaa
- Class B, $33,737,000, affirmed at Aa2
- Class C, $8,434,000, affirmed at Aa3
- Class D, $15,463,000, affirmed at A2
- Class E, $11,246,000, affirmed at A3
- Class F, $11,245,000, affirmed at Baa1
- Class G, $9,840,000, affirmed at Baa2
- Class H, $12,652,000, affirmed at Baa3
- Class J, $4,217,000, affirmed at Ba1
- Class K, $4,217,000, affirmed at Ba2
- Class L, $5,623,000, affirmed at Ba3
- Class M, $4,217,000, affirmed at B1
- Class N, $1,406,000, affirmed at B2
- Class P, $2,811,000, affirmed at B3
As of the April 11, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 4.2%
to $1.08 billion from $1.12 billion at securitization. The
Certificates are collateralized by 123 mortgage loans. The loans
range in size from less than 1.0% to 8.5% of the pool, with the
top 10 loans representing 40.5% of the pool. The pool includes
three shadow rated loans, representing 4.0% of the outstanding
loan balance.
The pool has not experienced any losses since securitization.
There is currently one loan in special servicing. Moody's is not
predicting a loss from the specially serviced loan at this time.
Seven loans, representing 4.1% of the pool, are on the master
servicer's watchlist.
Moody's was provided with full-year 2005 and partial-year 2006
operating results for 95.0% and 74.0%, respectively, of the pool.
Moody's average weighted loan to value ratio for the conduit
component is 92.7%, compared to 94.2% at securitization.
The largest shadow rated loan is the 405 Park Ave Loan
($25.0 million -- 2.2%), which is secured by a 16-story, 157,000
square foot office building located in the Plaza District of New
York City. The loan is interest only for its entire term. Moody's
current shadow rating is A2, the same as at securitization.
The second largest shadow rated loan is the Sam Moon Center Loan
($10.9 million -- 1.0%), which is secured by 126,000 square foot
retail center located in Dallas, Texas. As of November 2006 the
property was 92.0% occupied, compared to 98.0% at securitization.
Base rents have increased and the loan has amortized by
approximately 9.6% since securitization. Moody's current shadow
rating is A2, compared to Baa1 at securitization.
The third largest shadow rated loan is the Visalia Medical Center
Loan ($7.8 million -- 0.7%), which is secured by a 95,590 square
foot medical office building located in Visalia, California.
Moody's current shadow rating is Baa3, the same as at
securitization.
The three largest conduit exposures represent 19.7% of the pool.
The largest conduit loan is the 11 Penn Plaza Loan ($91.9 million
-- 8.5%), which is secured by a 23-story, 1.04 million square foot
office building with ground level retail space. The property is
located in the Penn Plaza submarket of New York City. The loan
represents a 43.0% pari-passu interest in a $213.0 million loan.
Moody's LTV is 86.9%, compared to 89.5% at securitization.
The second largest conduit loan is the Campus at Marlborough Loan
($62.2 million - 5.8%), which is secured by a 532,000 square foot,
three building, office complex located in Marlborough,
Massachusetts. Moody's LTV is 94.1%, compared to 91.7% at
securitization.
The third largest conduit loan is the Shops at Boca Park Loan
($58.0 million -- 5.4%), which is secured by a 277,000 square foot
retail lifestyle center located in the Summerlin section of Las
Vegas, Nevada. Moody's LTV is in excess of 100.0%, the same as at
securitization.
BEAR STEARNS: Moody's Rates 2007-AC4 Class B-2 Certificates at Ba2
------------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to certain
senior and super senior certificates, and ratings of Aa1 and Aaa
to the Class A-3 and A-4 super senior support certificates,
respectively, issued by Bear Stearns Asset Backed Securities I
Trust 2007-AC4. Ratings ranging from Aa2 to Ba2 were assigned to
the mezzanine and subordinate certificates in the deal.
The securitization is backed by fixed-rate, closed-end, Alt-A
residential mortgage loans originated by EMC Mortgage Corporation
(37.14%), National City Mortgage Co (24.67%), Countrywide Home
Loans, Inc (21.61%), Opteum Financial Services, LLC (11.13%) and
various other originators (5.45%). The ratings are based
primarily on the credit quality of the loans and on the protection
against credit losses provided by subordination,
overcollateralization, and excess spread. Moody's expects
collateral losses to range from 1.00% to 1.20%.
EMC (51.40%), National City (24.67%), Countrywide Home Loans
Servicing LP (21.61%), and various other servicers (2.32%) will
service the mortgage loans. EMC will also act as master servicer.
Moody's has assigned EMC its servicer quality rating of SQ2 as a
primary servicer of residential prime mortgage loans.
The complete rating actions are:
Bear Stearns Asset Backed Securities I Trust 2007-AC4
Asset-Backed Certificates, Series 2007-AC4
* Cl. A-1, Assigned Aaa
* Cl. A-2, Assigned Aaa
* Cl. A-3, Assigned Aa1
* Cl. A-4, Assigned Aaa
* Cl. A-5, Assigned Aaa
* Cl. M-1, Assigned Aa2
* Cl. M-2, Assigned A2
* Cl. B-1, Assigned Baa2
BERKLEY RESOURCES: Meyers Norris Raises Going Concern Doubt
-----------------------------------------------------------
Meyers Norris Penny LLP, in Calgary, Alberta, raised substantial
doubt about Berkley Resources Inc.'s ability to continue as a
going concern after auditing the company's financial statements
for the year ended Dec. 31, 2006. The auditor pointed to the
company's recurring losses, negative cash flows, and accumulated
deficit.
The company posted a net loss of $3,236,759 on revenues of
$1,568,681 for the year ended Dec. 31, 2005, as compared with a
net loss of $522,458 on revenues of $1,408,858 in the prior year.
At Dec. 31, 2006, the company's balance sheet showed strained
liquidity with $1,272,007 in total current assets and $4,461,639
in total current liabilities. The company had $11,896,679 in
total assets, $4,597,314 in total liabilities and $7,299,365 in
stockholders' equity.
The company's accumulated deficit increased to $5,082,981 in 2006
from $1,846,222 in the prior year.
A full-text copy of the company's 2006 annual report is available
for free at http://researcharchives.com/t/s?1d03
About Berkley Resources
Headquartered in Vancouver, B.C., Berkley Resources, Inc. --
(Other OTC: BRKDF.PK) -- http://www.brekleyresources.com/-- is a
diversified resource and development company headquartered in
Vancouver, Canada. Over the past 15 years, it has quietly amassed
a profitable base of oil and gas properties in Alberta and
commercial real estate in British Columbia.
BIOMARIN PHARMA: Posts $9.3MM Net Loss in Quarter Ended March 31
----------------------------------------------------------------
BioMarin Pharmaceutical Inc. reported financial results for its
first quarter ended March 31, 2007.
The net loss was $9.3 million for the first quarter of 2007,
compared to a net loss of $9.8 million for the first quarter of
2006. The net loss during the first quarter of 2007 includes
$3.6 million of non-cash stock compensation expense, compared to
$1.7 million of non-cash stock compensation expense during the
first quarter of 2006.
As of March 31, 2007, BioMarin had cash, cash equivalents, and
short-term investments totaling $273.3 million. Including the
proceeds from the public offering of senior subordinated
convertible notes in April 2007, on a pro-forma basis, BioMarin
had cash, cash equivalents, and short term investments totaling
approximately $590 million.
"Strong Naglazyme sales are driving better than expected bottom-
line results and fueling the development of our pipeline. Based
on the upside to first quarter sales, we are increasing our
Naglazyme sales expectations for 2007. We are also improving our
net loss guidance due to higher interest income and slightly
higher Naglazyme sales, partially offset by higher spending on
preclinical and clinical development programs, as well as Kuvan
launch preparation," said Jean-Jacques Bienaim,, Chief Executive
Officer of BioMarin.
Mr. Bienaime continued, "We remain on track to submit the NDA for
Kuvan by the end of this quarter and, assuming that we receive
priority review, anticipate potential approval by the end of the
year. We are also pleased that our expanded access program for
Kuvan has been approved by the FDA, and physicians and patients
representing more than 70 centers in the U.S. have responded with
interest, which we believe bodes well for the potential launch of
Kuvan. We also remain encouraged regarding the possible
application of 6R-BH4 in treating cardiovascular disease and plan
to conduct additional studies to further characterize the effect
of BH4 in patients with endothelial dysfunction. Additionally,
our recent convertible note offering has provided us with the
financial flexibility to pursue growth opportunities that will
further augment our pipeline and longer-term growth prospects."
Product Sales
Net sales of Naglazyme(R) (galsulfase), an enzyme replacement
therapy for mucopolysaccharidosis VI (MPS VI), were $18.4 million
for the first quarter of 2007, compared to $16.3 million for the
fourth quarter of 2006, representing a sequential increase of
approximately 12.%9.
Naglazyme net sales for the three months ended March 31, 2006 were
$7.0 million. BioMarin is commercializing Naglazyme in the United
States, Europe, and Latin America, and through distributors in
other international markets.
Net sales of Aldurazyme(R) (laronidase), an enzyme replacement
therapy for mucopolysaccharidosis I, (MPS I) by BioMarin/Genzyme
LLC increased by approximately 25.8% to $26.8 million for the
first quarter of 2007, compared to $21.3 million in the first
quarter of 2006.
Aldurazyme net sales for the three months ended December 31, 2006
were $26.5 million. BioMarin's share of the profit of
BioMarin/Genzyme LLC was $6.2 million for the first quarter of
2007, compared to a profit of $3.8 million for the first quarter
of 2006.
Royalty and License Revenues
Royalty and license revenues for the first quarter of 2007 were
$0.4 million, and include royalties on net product sales of the
Orapred product line, including Orapred(R) (prednisolone sodium
phosphate oral solution) and Orapred ODT(TM) (prednisolone sodium
phosphate orally disintegrating tablets). BioMarin expects to
receive an additional milestone payment of $4.0 million on the
first anniversary of FDA approval of Orapred ODT in June 2007.
Employment Agreements
On April 9, 2007, we entered into updated employment agreements
with each of our executive officers, except for our Chief
Executive Officer. The following executive officers signed
employment agreements, with base annual salaries as indicated:
Jeffrey H. Cooper, Senior Vice President, Chief Financial Officer,
$280,500; Emil D. Kakkis, M.D., Ph.D., Chief Medical Officer,
$315,000; Stephen Aselage, Senior Vice President, Global
Commercial Operations, $296,000; Robert A. Baffi, Ph.D., Senior
Vice President, Technical Operations, $285,000; Stuart J.
Swiedler, M.D., Ph.D., Senior Vice President, Clinical Affairs,
$285,500; and G. Eric Davis, Vice President, General Counsel,
$276,900. These agreements superseded any prior agreement that we
had with the respective executive officer. Copies of these
agreements are attached as exhibits hereto.
A full-text copy of the company's quarterly report on Form 10-Q
for the three months ended March 31, 2007, is available for free
at http://ResearchArchives.com/t/s?1ebf
About BioMarin Pharmaceutical Inc.
BioMarin Pharmaceutical Inc. -- http://www.BMRN.com/-- (Nasdaq
and SWX: BMRN) develops and commercializes innovative
biopharmaceuticals for serious diseases and medical conditions.
The company's product portfolio is comprised of two approved
products and multiple clinical and preclinical product candidates.
Approved products include Naglazyme(R) (galsulfase) for
mucopolysaccharidosis VI (MPS VI), a product wholly developed and
commercialized by BioMarin, and Aldurazyme(R) (laronidase) for
mucopolysaccharidosis I (MPS I), a product which BioMarin
developed through a 50/50 joint venture with Genzyme Corporation.
Investigational product candidates include Kuvan(TM) (sapropterin
dihydrochloride), a Phase 3 product candidate for the treatment of
phenylketonuria (PKU), and 6R-BH4 for cardiovascular indications,
which is currently in Phase 2 clinical development for the
treatment of peripheral arterial disease.
BIOMARIN PHARMA: S&P Junks Rating on $325 Million Senior Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook for
BioMarin Pharmaceutical Inc. to stable from negative. At the same
time, Standard & Poor's affirmed its 'B-' corporate credit rating
on BioMarin and assigned its 'CCC' rating to the company's
$325 million senior subordinated convertible notes due 2017.
"The action reflects the company's improving operating performance
due to growing sales of Naglazyme and its much-strengthened
liquidity position following the recent issuance of its senior
subordinated convertible notes," explained Standard & Poor's
credit analyst Arthur Wong.
The speculative-grade rating on BioMarin reflects the company's
expected continuing operating losses and significant cash
consumption over the intermediate term, primarily due to
increasing R&D expenditures and marketing costs, and its narrow
product portfolio. Partially offsetting the impact of
increased operating expenses are growing sales of its major
products, Aldurazyme and Naglazyme, as well as the company's more-
than-adequate liquidity provided by its significant on-hand cash.
BOK FINANCIAL: Improved Capital Cues S&P's Positive Outlook
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on BOK
Financial Corp. and its wholly owned subsidiary, Bank of Oklahoma
N.A. Tulsa, to positive from stable.
"The ratings action reflects BOK's continued growth outside of
Oklahoma and improved capital metrics," said Standard & Poor's
credit analyst Michael Driscoll. The ratings are supported by
BOK's dominant position in Oklahoma and strong fee-based
businesses that help deliver consistent earnings. Offsetting
these key rating strengths are commercial and geographic
concentrations within the loan portfolio.
BOK continues to grow its regional banking businesses successfully
outside of Oklahoma. Indeed, in 2002, Oklahoma represented 65% of
the total loan portfolio. At March 31, 2007, this total had
dropped to 52%. When the recently announced Texas-based Worth
Bancorporation acquisition closes, the loan portfolio should be
evenly split between Oklahoma and the other states. Regional
banks include Texas, Colorado, Arkansas, New Mexico, Kansas, and
Arizona, with Texas being by far the second-largest by loans at
25%. Furthermore, BOK opened loan production offices in Tucson
and Salt Lake City during 2006. At the end of 2006, the regional
banks contributed 43% of consolidated net income. In short, BOK
has done an excellent job growing outside of Oklahoma. As a
result, BOK is more geographically diversified and this trend
should continue going forward.
Even with several minor acquisitions, capital levels exceed those
of similarly rated peers. Adjusted total equity to risk assets
stood at a robust 9.89% at the end of 2006. Meanwhile, tangible
equity stood at 8.22% and should remain close to 8% after the
completion of the Worth Bancorporation merger. While S&P expect
BOK to continue to make acquisitions, S&P believe management is
committed to maintaining a strong capital base.
The positive outlook incorporates our expectation that BOK will
continue to grow its regional banking subsidiaries successfully,
which should improve geographic diversification. If BOK maintains
its strong balance sheet and achieves further geographic
diversification, the ratings will be raised. Specifically, S&P
expect management to rebuild capital to current levels following
any acquisition. Conversely, if profitability metrics deteriorate
or asset quality deteriorates more rapidly than S&P expect, the
outlook could be revised back to stable.
BOMBAY COMPANY: PricewaterhouseCoopers Raises Going Concern Doubt
-----------------------------------------------------------------
PricewaterhouseCoopers LLP, in Fort Worth, Texas, raised
substantial doubt about The Bombay Company Inc.'s ability to
continue as a going concern after auditing the company's financial
statements for the years ended Feb. 3, 2007, Jan. 28, 2006, and
Jan. 29, 2005. The auditor pointed to the company's operating
losses, negative cash flows, and accumulated deficit.
The company posted a net loss of $52,781,000 on revenues of
$536,325,000 for the year ended Feb. 3, 2007, as compared with a
net loss of $46,731,000 on revenues of $565,074,000 for the year
ended Jan. 28, 2006.
For the past three years, the company has experienced cumulative
operating losses of $103,568,000 and $29,112,000 in accumulated
deficit as of Feb. 3, 2007.
A full-text copy of the company's 2007 annual report is available
for free at http://researcharchives.com/t/s?1d03
About Bombay Company
Headquartered in Fort Worth, Texas, The Bombay Company, Inc.
(NYSE:BBA) -- http://www.bombaycompany.com/-- designs, sources,
and markets home furnishings, wall decor products, and decorative
accessories in the U.S. and Canada. The company offers a range of
furniture that include both wood and metal furniture for bedrooms,
home offices, dining rooms, and living rooms, as well as
occasional furniture that comprises wood and metal hall tables,
end and coffee tables, plant stands, and other small accent tables
and curios.
CALIBRE ENERGY: Malone & Bailey Raises Going Concern Doubt
----------------------------------------------------------
Malone & Bailey PC, in Houston, Texas, raised substantial doubt
about Calibre Energy Inc.'s ability to continue as a going concern
after auditing the company's financial statements for the year
ended Dec. 31, 2006, and 2005. The auditor pointed to the
company's operating losses since inception, negative cash flow
from operations, and accumulated deficit.
The company posted a net loss of $10,259,461 on revenues of
$554,430 for the year ended Dec. 31, 2006, as compared with a net
loss of $1,901,651 on revenues of $20,778 in the prior year.
At Dec. 31, 2006, the company's balance sheet showed strained
liquidity with $2,002,531 in total current assets and $4,732,408
in total current liabilities. The company had $17,139,988 in
total assets, $4,785,650 in total liabilities and $12,354,338 in
stockholders' equity.
The company's accumulated deficit increased to $12,161,112 in 2006
from $1,901,651 in the prior year.
A full-text copy of the company's 2006 annual report is available
for free at http://researcharchives.com/t/s?1d03
About Calibre Energy
Headquartered in Washington, DC, with operating offices in
Houston, Texas, Calibre Energy Inc. (OTC BB: CBRE) --
http://www.calibreenergy.com/-- is a publicly traded exploration
and production company focused on the acquisition and development
of high quality unconventional gas and oil shale properties in
selected producing basins in North America. Calibre's current
concentration is the active drilling and development of its
leasehold interests in the Barnett Shale as well as continuing to
add selective new properties to its acreage inventory.
CONSTELLATION BRANDS: Moody's Rates $700 Mil. Senior Notes at Ba3
-----------------------------------------------------------------
Moody's assigned a Ba3 rating to Constellation Brand's $700
million senior unsecured note issuance which will be used to
reduce outstanding borrowings under the $900 million revolving
portion of the company's senior credit facility. All other ratings
of the company are affirmed and the rating outlook remains stable.
This rating was assigned:
Constellation Brands, Inc.
* $700 million senior unsecured notes due 2017: Ba3; LGD 4; 50%
Moody's last took rating action on Constellation Brands on March
1st, 2007 when the company announced its plans to do a debt-funded
share buyback on the heels of a string of acquisitions including
the acquisition of SVEDKA Vodka, announced in February of this
year. Moody's at that time downgraded the corporate family rating
to Ba3 from Ba2 and said that the string of acquisitions followed
by the shift to a more aggressive financial policy as demonstrated
by the share buyback (which will be accelerated) led to the
downgrade.
The SGL-2 Speculative Grade Liquidity rating for Constellation
Brands, Inc., which was affirmed in March, reflects overall good
liquidity, given the company's ongoing strong financial
performance, ample availability under the revolver, modest
covenant cushion and its unencumbered asset base. In Moody's
view, the company may rely on its revolving credit facility over
the next twelve months, largely due to notable seasonality in
working capital funding needs and a sizeable debt maturity of $200
million due in February 2008.
The outlook is stable reflecting the company's solid business
franchise, good product and geographic diversity, strong margins
and the expectation that cash flow generation will continue to be
solid as well as the view that the company's current leverage can
be tolerated at this rating level.
Headquartered in Fairport, New York, Constellation Brands, Inc.
had LTM sales of approximately $5.1 billion and is a leading
international producer and marketer of beverage alcohol brands
with a broad portfolio across the wine, spirits, and imported beer
categories.
CONSTELLATION BRANDS: Fitch Rates $700MM Sr. Note Offering at BB-
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB-' rating to Constellation Brands
Inc.'s proposed $700 million 10-year senior note offering.
Proceeds are to be used to repay revolving bank debt.
The Rating Outlook is Negative.
Recently, STZ accelerated its $500 million share repurchase
program and completed the SVEDKA acquisition. Due to the stock
repurchase completed on May 8, 2007 for $421 (STZ had repurchased
3.5 million shares for $79 million since March 1, 2007)and the
SVEDKA acquisition completed on March 19, 2007 for $384 million,
company debt levels are expected to be meaningfully higher in
fiscal year 2008 (ending Feb. 29, 2008). The recently formed
joint venture for the U.K wholesale business provided STZ with
$179 million of cash proceeds, which will partially offset
incremental borrowing incurred to finance these transactions.
Nonetheless, management's willingness to operate at higher
leverage levels remains. Also, additional shareholder friendly
activity cannot be ruled out.
Over the intermediate term, it is likely that the company will
continue to make acquisitions that could result in financial and
operational stress. Fitch expects that future acquisitions, at
least in the near term, will be smaller in size and complementary
to the existing brand portfolio.
CELLEGY PHARMA: Posts $537,000 Net Loss in Quarter Ended March 31
-----------------------------------------------------------------
Cellegy Pharmaceuticals Inc. reported a net loss of $537,000 for
the first quarter ended March 31, 2007, compared with a net loss
of $2,351,000 for the same period last year.
The company had no revenues for the three months ended March 31,
2007, and had revenues of approximately $1,236,000 for the three
months ended March 31, 2006. First quarter 2006 revenues consist
of licensing, product sales and grant revenues.
As disclosed by the company, a material portion of its assets,
including intellectual property rights and related assets were
sold in the fourth quarter of 2006, to ProStrakan Group plc.
At March 31, 2007, the company's balance sheet showed $3,316,000
in total assets, $793,000 in total liabilities, and $2,523,000 in
total stockholders' equity.
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?1eb7
Going Concern Doubt
Mayer Hoffman McCann PC, in Plymouth Meeting, Pa., expressed
substantial doubt about Cellegy Pharmaceuticals Inc.'s ability to
continue as a going concern after auditing company's financial
statements ended Dec. 31, 2006. The auditing firm pointed to the
company's recurring losses from operations and limited working
capital to pursue its business alternatives.
About Cellegy Pharmaceuticals
Cellegy Pharmaceuticals Inc. (OTC BB: CLGY.OB) -- is a specialty
biopharmaceutical company. Following the company's decision to
eliminate its direct research activities and the sale of its
assets to ProStrakan in late 2006, the company's operations
currently relate primarily to the ownership of its intellectual
property rights relating to the Biosyn product candidates and the
evaluation of its remaining options and alternatives with respect
to its future course of business.
CONSECO INC: Earns $10.4 Million in First Quarter Ended March 31
----------------------------------------------------------------
Conseco Inc. reported a net income of $10.4 million on total
revenues of $1.1 billion for the first quarter ended March 31,
2007. It had a net income of $64.6 million on total revenues of
$1.1 billion for the first quarter of 2006. Total revenues for
the first quarter of 2007 decreased by $7.2 million.
"Although results for the quarter are below expectations, Conseco
is making tangible progress across the organization," chief
executive officer Jim Prieur said regarding the first quarter
results. "Sales growth was very strong in both our Bankers Life
and Colonial Penn businesses, and the sales mix at Conseco
Insurance Group has improved. We experienced reduced losses in
our other business in run-off segment, where we are beginning to
see the anticipated improvements in claims management as well as
the positive impact from the re- rate program. As we have
reported previously, improvement in the performance of that block
is expected to occur over several quarters."
"We continue to take significant steps to improve Conseco's
financial return," Mr. Prieur said. "As described in our separate
release today, we reached a definitive agreement to sell, through
a 100% coinsurance agreement, a block of fixed and equity-indexed
annuities that were not generating an acceptable return on equity
(ROE). Our Board has also approved an increase in the stock
buyback program, from $150 million to $350 million and we will
continue to move on opportunities to improve ROE going forward."
As of March 31, 2007, the company had total assets of
$33.1 billion and total liabilities of $28.4 billion, resulting in
a total stockholders' equity of $4.7 billion.
Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) --
http://www.conseco.com/-- is a holding company for a group of
insurance companies operating throughout the United States that
develop, market and administer supplemental health insurance,
annuity, individual life insurance and other insurance products.
The company operates in two segments, Bankers Life and Conseco
Insurance Group, and a third segment comprised of businesses in
run-off, which includes blocks of business that the company no
longer markets or underwrites and are managed separately from its
other businesses. The company also has a corporate segment, which
consists of holding company activities and certain non-insurance
company businesses that are not related to its operating segments.
* * *
Fitch Rating affirmed the BB+ Issuer Default rating, the BBB-
Senior secured debt, and BB- Preferred stock rating of Conseco
Inc. in November 2006.
CONSTELLATION BRANDS: Inks Pact to Repurchase $421MM Common Stock
-----------------------------------------------------------------
Constellation Brands Inc. has entered into an accelerated share
repurchase transaction with Citibank N.A. to repurchase a minimum
of 16.9 million shares of its Class A common stock for
$421.1 million.
The company has already repurchased 3.5 million shares of its
Class A common stock since March 1, 2007, through open market
purchases at a cost of approximately $78.9 million. Together,
the company says, the transactions will fully utilize its reported
$500 million share repurchase authorization. All of the
repurchased shares will become treasury shares.
"We believe this accelerated share repurchase transaction
demonstrates our strong commitment to maximizing shareholder value
and also aligns well with our stated objective of harvesting
opportunities that enhance our long-term value creation goals,"
stated Constellation Brands Chairman and Chief Executive Officer
Richard Sands.
The specific number of shares to be repurchased in the transaction
is generally based upon the volume-weighted average price of the
company's Class A common stock during a specified calculation
period. The company says it will not be obligated to return any
of the minimum shares or pay Citibank any additional cash. It is
possible that Citibank could deliver an additional number of
shares before the scheduled October 2007 end of the specified
calculation period, the company relates.
In connection with the share repurchase transaction, in addition
to purchases of the company's Class A common stock, the company
states that Citibank may engage in certain hedging activities with
respect to the company's Class A common stock in order to manage
its exposure under the transaction.
The purchase price for shares repurchased in the accelerated share
repurchase transaction and in the open market has been or will be
paid with proceeds from borrowings under the company's existing
revolving credit facility.
About Constellation Brands
Constellation Brands Inc. (NYSE: STZ, ASX: CBR) --
http://www.cbrands.com/-- is an international producer and
marketer of beverage alcohol brands with a broad portfolio
across the wine, spirits and imported beer categories. The
company has operations in Australia, Japan and New Zealand.
CONSTELLATION BRANDS: S&P Rates Proposed $700 Million Notes at BB-
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
unsecured debt rating to Constellation Brands Inc.'s proposed
$700 million note offering due 2017, issued under Rule 144A with
registration rights. Net proceeds will be used to reduce
outstanding borrowings under the company's senior secured
revolving credit facility.
Constellation Brands' ratings reflect the company's acquisitive
growth strategy, highly leveraged financial profile, significant
debt burden, and participation in the highly competitive beverage
alcohol markets. Constellation Brands' highly leveraged financial
profile is somewhat offset by its historically strong cash
generation from a diverse portfolio of consumer brands.
Ratings list
Constellation Brands Inc.
Corporate Credit Rating BB-/Stable/--
Rating Assigned
Constellation Brands Inc.
$700 Million Senior Unsecured Notes BB-
CREDIT SUISSE: Fitch Junks Rating on $19.2 Million Class I Notes
----------------------------------------------------------------
Fitch Ratings has downgraded the following class of commercial
mortgage pass-through certificates from Credit Suisse First Boston
Mortgage Securities Corp., series 1998-C2:
-- $19.2 million class I to 'CCC/DR3' from 'B-'.
In addition, Fitch has upgraded the ratings on these classes:
-- $105.6 million class F to 'AA+' from 'AA-';
-- $19.2 million class G to 'A+' from 'A-'.
Fitch has also affirmed the ratings on these classes:
-- $904.7 million class A-2 at 'AAA';
-- Interest only class AX at 'AAA';
-- $105.6 million class B at 'AAA';
-- $105.6 million class C at 'AAA';
-- $105.5 million class D at 'AAA';
-- $28.8 million class E at 'AAA'.
Fitch does not rate the $47.9 million class H or $4.4 million
class J certificates.
The downgrade of class I is due to the expected losses from the
two specially serviced assets. The upgrades are a result of
improved credit enhancement levels from additional 7.5%
defeasance, scheduled amortization and two loan payoffs since
Fitch's last rating action. In total, 78 loans (31.2%) have
defeased, including the largest loan in the pool. As of the April
2007 distribution date, the pool's aggregate principal balance has
been reduced 24.6% to $1.45 billion from $1.92 billion at
issuance.
Currently, there are three assets in special servicing (2.2%). The
largest specially serviced asset (1.2%) is secured by three retail
properties in upstate New York and Vermont. It was transferred to
the special servicer in January 2007 due to imminent default. One
property has gone dark after the single tenant, Grand Union,
vacated and stopped paying rent. The special servicer is working
with the borrower for Deed-In-Lieu of foreclosure. Recent
valuations of the properties indicate losses upon liquidation.
The second specially serviced asset (0.9%) was originally secured
by 12 multifamily properties totaling 2,596 units, located across
the states of Texas, California, Georgia and New Mexico. The loan
was transferred to the special servicer due to a loan modification
request to allow certain properties to be sold with the proceeds
paying down the outstanding debt. This request has been approved
and executed. The three properties located in New Mexico have
subsequently been sold. The loan remains current and no losses
are expected.
The third largest specially serviced asset (0.1%) has been real
estate owned since February 2006. Initially there were two
limited-service hotels, a 101-unit property in Erie, Pennsylvania,
and a 92-unit property in Youngstown, Pennsylvania. The Erie,
Pennsylvania asset was sold in December 2006. The special
servicer is currently negotiating the sale of the Youngstown,
Pennsylvania asset. Recent appraisal valuation indicates that
losses are expected upon the disposition of this property.
Fitch expects losses from the two specially serviced assets will
deplete the non-rated class J and affect class I.
CSFB ABS: S&P Cuts Rating on Class B Certificates to D from CCC
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B mortgage pass-through certificates from CSFB ABS Trust Series
2001-HE22 to 'D' from 'CCC'. The 'A' rating on class M-2 remains
on CreditWatch with negative implications, where it was placed on
Aug. 12, 2006. At the same time, the 'AAA' ratings on classes A-
1, A-IO, and M-1 were affirmed.
The downgrade of class B reflects the complete erosion of the
transaction's overcollateralization as losses continue to outpace
excess interest. As a result, class B has incurred principal
write-downs of $257,588. As of the April 2007 distribution
report, total delinquencies remained high at approximately 43% of
the current pool balance, with severe delinquencies totaling about
26%. Cumulative realized losses to date are approximately 3.76%
of the original pool balance. In light of the delinquencies and
losses, the 'A' rating on class M-2 remains on CreditWatch with
negative implications. The 'AAA' ratings on the other three
classes were affirmed due to adequate actual and projected credit
support. As of the April distribution, the deal was 65 months
seasoned and had a pool factor of 7.77%.
Standard & Poor's will continue to closely monitor the performance
of this transaction. If losses decline to a point at which they
no longer exceed excess interest, and the level of O/C has not
been further eroded, S&P will affirm the rating on class M-2 and
remove it from CreditWatch. Conversely, if losses continue to
exceed excess interest and further erode O/C, S&P will take
additional negative rating actions.
The collateral backing this transaction consists of 30-year,
fixed- or adjustable-rate subprime mortgage loans secured by first
liens on one- to four-family residential properties.
Rating Lowered
CSFB ABS Trust Series 2001-HE22
Mortgage pass-through certificates
series 2001-HE22
Rating
------
Class To From
----- -- ----
B D CCC
Rating Remaining on Creditwatch Negative
CSFB ABS Trust Series 2001-HE22
Mortgage pass-through certificates
series 2001-HE22
Class Rating
----- ------
M-2 A/Watch Neg
Ratings Affirmed
CSFB ABS Trust Series 2001-HE22
Mortgage pass-through certificates
series 2001-HE22
Class Rating
----- ------
A-1, A-IO, M-1 AAA
CYGNUS BUSINESS: High Leverage Prompts Moody's to Affirm Ratings
----------------------------------------------------------------
Moody's Investors Service has affirmed Cygnus Business Media
Inc.'s B3 Corporate Family rating in connection with its recently
completed $15 million add-on term loan B.
Details of the rating action are:
Rating assigned:
* $15 million add-on first lien senior secured term loan B due
2009 -- B2, LGD3, 42%,
Ratings affirmed:
* $20 million (reduced from $30 million) first lien senior
secured revolving credit facility, due 2009 -- B2, LGD3,
42%,
* $4 million first lien senior secured delayed draw facility,
due 2009 -- B2, LGD3, 42%,
* $137 million first lien senior secured term loan B, due 2009
-- B2, LGD3, 42%,
* $30 million second lien senior secured facility, due 2010
-- Caa2, LGD6, 91%
* Corporate Family -- B3
* Probability of Default rating -- B3
The ratings reflect Cygnus's heavy debt burden (including unrated
holding company redeemable preferred stock), high leverage (over
8.0 times consolidated debt to EBITDA for fiscal 2006), the
willingness of its management to repay non-recourse ABRY Partners-
guaranteed holding company debt to the detriment of Cygnus's
lenders, the company's vulnerability to B-2-B advertising spending
and the competition faced by most of its product offerings.
Ratings are supported by the barriers to entry enjoyed by Cygnus's
niche publications and trade shows and its attractive margins. In
addition, ratings reflect an expectation that the company will
report consolidated free cash flow of at least $8 million for
2007.
The stable rating outlook reflects the diversification of Cygnus's
customer and product range, and the near-term sales visibility
inherent in the trade show and controlled circulation publishing
business.
Headquartered in Fort Atkinson, Wisconsin, Cygnus Business Media
is a diversified business-to-business media company. The company
recorded revenues of $112 million in 2006.
DAIMLERCHRYSLER: Chrysler Launches Ad Campaign to Define Brand
--------------------------------------------------------------
DaimlerChrysler AG's Chrysler Group has unveiled a marketing
campaign that includes TV and print ads featuring the new theme
line "Engineered Beautifully," which emphasizes technology, fuel
economy and value.
"More than 80 percent of the Chrysler brand product portfolio is
all-new or refreshed in the last 12 months with the recent
introduction of the all-new 2008 Chrysler Sebring Convertible and
the debut of the all-new 2008 Chrysler Town and Country later this
year," said Chrysler Marketing and Global Communications Director
David Rooney. "This is the perfect opportunity for us to showcase
that there is more behind the sheet metal and distinctive style,
and that every Chrysler possesses world-class quality and
engineering at an extraordinary value."
Additionally, the all-new 2008 Chrysler Sebring Convertible
marketing campaign was launched on May 8. The Sebring Convertible
ads mirror the tone and style of the new Chrysler brand creative.
"Chrysler is, and always has been, a brand made by and built for
people with a passion for great cars," said Mr. Rooney. "Products
like the 300 and Town & Country put us at the forefront of the
industry in terms of style and design. At the same time, we have
made great strides to become competitive and even surpass our
competition in terms of quality and engineering. While we have
made great strides, the perception has not caught up with reality
in the marketplace. Our new communications direction will help
get that engineering message across."
The television schedule features prime time network and cable
shows such as Grey's Anatomy, Boston Legal, Ugly Betty, Dancing
with the Stars, Conan O'Brien, The Tonight Show, NBA Playoffs, Big
Break 7, Larry King, Anderson Cooper, Nancy Grace, Headline News,
Law and Order CI, Law and Order SVU and Dog Whisperer. The ads
will also appear on other channels including TNT, TBS, Food
Network, Style Network, ESPN, CNBC, Fine Living Network, Bravo and
The Golf Channel.
The print ads follow the same creative direction for a consistent
tone and message. Product is the star with bold photography on
colorful backgrounds along with highlighted technology features.
The Chrysler print ads will run in Automobile Magazine, Aspen Peak
Magazine, Car and Driver, Food Wine, Forbes, Golf Digest, Golf For
Women, Jet, Martha Stewart Everyday, Motor Trend, National
Geographic, The New Yorker, Road and Track, Southern Accents,
Sunset, Tennis Magazine, Traditional Home and Travel Leisure.
In addition to the new advertising, the Chrysler brand will
showcase the all-new Sebring Convertible through two programs done
with Hearst and Forbes magazines.
The Hearst Awaken Your Senses program includes advertising, web
activity (http://www.awakenyoursenses.com), product displays and
test drive components with the grand prize of an all-new 2008
Chrysler Sebring Convertible. The Chrysler brand is also the
exclusive sponsor of one chapter of the Forbes 90th Anniversary
Issue and Networking Special Report covering lifestyle elements
surrounding careers, entertainment, leisure and design.
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.
DBDS MELBOURNE: Case Summary & 7 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: D.B.D.S. Melbourne, L.L.C.
3250 Mary Street, Suite 501
Coconut Grove, FL 33133
Bankruptcy Case No.: 07-13465
Type of Business: The Debtor owns real estate properties.
Chapter 11 Petition Date: May 9, 2007
Court: Southern District of Florida (Miami)
Judge: Robert A. Mark
Debtor's Counsel: Lisa M Schiller, Esq.
Mark S. Roher, Esq.
Rice Pugatch Robinson & Schiller, P.A.
101 Northeast 3 Avenue, Suite 1800
Fort Lauderdale, FL 33301
Tel: (954) 462-8000
Fax: (954) 462-4300
Total Assets: $22,528,298
Total Debts: $17,015,461
Debtor's Seven Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
John Myers $2,687,500
269 Sunset Drive
Islamorada, FL 33036
Florida Power & Light $1,727
General Mail Facility
Miami, FL 33188-0001
Lee Slovik $933
10 South Harbor City
Boulevard
Melbourne, Florida 32901
Ambassador Post $355
Home Choices, L.L.C. $145
ISIS Supply, Inc. $91
Ocean Atlantic Rest $55
DELUXE ENTERTAINMENT: Loan Increase Cues Moody's to Hold B1 Rating
------------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating
for Deluxe Entertainment Service Group Inc., the B1 rating on its
proposed first lien bank facility, and the B3 rating on its
proposed second lien facility. The ratings affirmations follow
the company's announced plan to increase the first lien term loan
by $25 million, to $610 million from the originally proposed
$585 million.
The additional proceeds will result in a larger dividend to
MacAndrews & Forbes Holdings Inc.
This $157 million dividend represents a return exceeding the
$155 million of cash equity that M&F invested in Deluxe in January
2006. Nevertheless, the change does not materially impact the
company's credit metrics, particularly given expectations for a
slight reduction in interest expense compared to Moody's original
forecast (a decline in pricing versus expectations offsets the
modest increase in debt).
Deluxe Entertainment Services Group Inc. supplies worldwide film
processing, distribution and creative services to the major
producers and distributors of motion pictures and television
programs. It maintains headquarters in Los Angeles, California,
and the company's annual revenue is approximately $900 million.
DLJ COMMERCIAL: Fitch Holds C Rating on $12.4MM Class B-8 Certs.
----------------------------------------------------------------
DLJ Commercial Mortgage Corp's, series 1999-CG1 commercial
mortgage pass-through certificates are upgraded by Fitch Ratings
as:
-- $37.2 million class B-3 to 'A+' from 'A-';
-- $21.7 million class B-4 to 'BBB' from 'BBB-'.
In addition, Fitch affirms the ratings on:
-- $656.7 million class A-1B at 'AAA';
-- Interest-only class S at 'AAA';
-- $58.9 million class A-2 at 'AAA';
-- $65.1 million class A-3 at 'AAA';
-- $18.6 million class A-4 at 'AAA';
-- $46.5 million class B-1 at 'AAA';
-- $15.5 million class B-2 at 'AAA';
-- $9.3 million class B-5 at 'BB+';
-- $12.4 million class B-6 at 'B+;
-- $12.4 million class B-7 at 'B-';
-- $12.4 million class B-8 at 'C/DR5'.
The $4.3 million class C is not rated by Fitch. Class A-1A is
paid in full.
The upgrades are a result of increased credit enhancement due to
additional paydown of 3.6% and 9.4% additional defeasance since
Fitch's last rating action in January 2007. Ninety-five loans
(39.8%) have been fully defeased, including the Winston Hotel
portfolio, the largest loan in the deal.
As of the April 2007 distribution date, the pool's aggregate
principal balance has been reduced 22% to $971 million from $1.24
billion at issuance. There are currently four assets (2%) in
special servicing with losses expected on the assets which are
real-estate owned and in foreclosure. The losses associated with
these two assets are expected to deplete class C and severely
impact class B-8.
The largest specially serviced asset (1.1%) is a retail property
located in Roanoke Rapids, North Carolina, and is currently REO.
The property is currently being marketed for sale. The property
remains 37% occupied.
The second specially serviced asset (0.7%) is a retail property
located in Joliet, IL, and is currently in foreclosure. The
receiver is proceeding to complete the renovations caused by fire
damage and the environmental concerns are also being addressed.
The property remains 33% occupied.
ELEC COMMS: Completes Sale of Unsecured Notes for $275,000
----------------------------------------------------------
eLEC Communications Corp. sold on May 1 and 2, 2007, promissory
notes totaling $275,000 to two investors. The Notes are unsecured
and mature on Oct. 31, 2007, or sooner in the event the company
raises equity of $1 million or more. Interest is payable at an
annual rate of 12%.
In conjunction with the sale of the Notes, the company issued
warrants to the investors and to a finder to purchase up to an
aggregate of 860,000 shares of Common Stock at an exercise
price of $0.27 per share.
The company said that the warrants for the exercise of 810,000
shares expire on May 1, 2009, and the remainder expires on May 1,
2010.
eLEC Communications Corp. (OTCBB: ELEC) -- http://www.elec.net/--
through its wholly owned subsidiary, VoX Communications Corp.,
provides an integrated suite of IP-based communications services
and offers wholesale broadband voice, origination and termination
services for cable operators, carriers, ISPs, CLECs, resellers and
other wireless and wireline operators, as well as enhanced VoIP
telephone service to the small business and residential
marketplace.
* * *
As reported in the Troubled Company Reporter on April 27, 2007,
eLEC Communications Corp.'s balance sheet at Feb. 28, 2007, showed
$2,936,765 in total assets and $9,093,230 in total liabilities,
resulting in a $6,156,465 total stockholders' deficit.
EMISPHERE TECH: March 31 Balance Sheet Upside-Down by $9.1 Million
------------------------------------------------------------------
Emisphere Technologies Inc.'s balance sheet at March 31, 2007,
showed $24.3 million in total assets and $33.4 million in total
liabilities, resulting in a $9.1 million total stockholders'
equity.
Emisphere Technologies Inc. reported a net loss of $3.9 million on
revenue of $2.8 million for the first quarter ended March 31,
2007, compared with a net loss of $26.8 million on revenue of
$1.7 million for the same period ended March 31, 2006.
The increase in revenue is primarily due to a $2 million milestone
payment and reimbursement of $700,000 in costs related to the
Salmon Calcitonin project with Novartis Pharma AG. This increase
was partially offset by a decrease in revenue from other partners.
Results for the first quarter of 2007 includes $3.5 million of
income related to derivatives.
On the other hand, results for the first quarter of 2006 includes
a charge of $12.2 million for the beneficial conversion of the
convertible security related to the MHR notes due on Sept. 26,
2012, which were converted in January 2006.
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?1eb5
Going Concern Doubt
As reported in the Troubled Company Reporter on March 19, 2007,
PricewaterhouseCoopers LLP expressed substantial doubt about
Emisphere Technologies Inc.'s ability to continue as a going
concern after auditing the company's financial statements for the
years ended Dec. 31, 2006 and 2005. The auditing firm pointed to
the company's operating losses, limited capital resources and
significant future commitments.
About Emisphere Technologies
Headquartered in Tarrytown, New York, Emisphere Technologies Inc.
(NasdaqGM: EMIS) -- http://www.emisphere.com/-- is a
biopharmaceutical company charting new frontiers in drug delivery.
The company develops oral forms of injectable drugs, either alone
or with corporate partners, by applying its proprietary eligen(R)
technology to these drugs.
ENTERPRISE PRODUCTS: Fitch Holds Junior Notes' Rating at BB+
------------------------------------------------------------
Fitch Ratings has affirmed these ratings of Enterprise Products
Operating, L.P. with a Stable Outlook:
-- Issuer Default Rating (IDR) 'BBB-';
-- Senior unsecured debt 'BBB-';
-- Junior subordinated notes (hybrids) 'BB+'.
Fitch has affirmed EPOLP's ratings following the announcement that
Enterprise GP Holdings L.P. (NYSE: EPE) has purchased an
approximate 34.9% interest in the general partner and 17.6% of the
outstanding limited partner units in Energy Transfer Equity, L.P.
(NYSE: ETE) for cash consideration of $1.65 billion, initially
funded through the issuance of debt. In a separate transaction,
EPE has also purchased all of the general partner interest and
4.8% of the outstanding limited partner units of TEPPCO Partners,
L.P. (NYSE: TPP) from EPCO Holdings Inc. in exchange for 30.2
million units of EPE. Approximately $5.3 billion of outstanding
securities at EPOLP are affected.
The rating affirmation recognizes that while no debt is being
added at EPOLP, the increase in debt leverage at EPE will be
significant. While Fitch expects EPE to de-leverage its balance
sheet over time, the company's ability to do so is subject to
capital market and execution risk.
EPOLP's financial, structural, and functional ties with EPE and
EPCO represent potential rating risks as these entities have
weaker credit profiles than EPOLP and they rely entirely on the
cash distributions of their operating partnerships.
In the case of financial duress at EPE or EPCO, EPOLP may be
called upon (at least indirectly) in the future to meet the
financial obligations of these affiliates or be encouraged to
adopt operating practices that are inconsistent with the interests
of its creditors. As a result, additional debt in the capital
structure at either the EPCO or EPE level beyond the current
transactions may lead to a negative rating action at EPOLP.
In support of the ratings of EPOLP, Fitch also recognizes that EPE
will receive a more diverse cash flow stream to service its debt
including general partner and limited partner distributions from
three master limited partnerships, Enterprise Products Partners,
L.P., TPP and ETP, as opposed to only one today, EPD. In
addition, EPE's debt is expected to be non-recourse to EPD and
EPOLP.
EPOLP is the operating limited partnership of EPD. EPD is a
leading publicly traded MLP engaged in pipeline and midstream
services for the producers and consumers of natural gas liquids,
natural gas, crude oil and petrochemicals. EPE is the publicly
traded owner of the 2% general partner and approximately 3.3% of
the limited partner interest in EPD. EPOLP and TPP are affiliates
under the common control of Dan Duncan, the Chairman and
controlling shareholder of EPCO.
ETE owns the 2% general partner interest in Energy Transfer
Partners (NYSE: ETP, Issuer Default Rating of 'BBB-', Outlook
Positive) and 62.5 million common units of ETP (approximately
45.7% of the outstanding units). ETP is the third largest
publicly traded MLP, owning and operating approximately 12,200
miles of intrastate pipeline, 2,400 miles of interstate pipeline
through its wholly owned subsidiary Transwestern Pipeline Company
and third-largest domestic retail propane distributor, serving
more than 1 million customers.
ENVIRONMENTAL ENERGY: Turner Jones Raises Going Concern Doubt
-------------------------------------------------------------
Turner Jones & Associates PLLC, in Vienna, Virginia, raised
substantial doubt about Environmental Energy Services Inc.'s
ability to continue as a going concern after auditing the
company's financial statements for the year ended Dec. 31, 2006.
The auditor pointed to the company's operating activities, except
collection on a royalty agreement, have ceased. Without
substantial input of equity capital, the company will not be able
to resume meaningful revenue-producing activities.
The company has a net income of $5,961,886 on revenues from
royalty of $518,645 for the year ended Dec. 31, 2006, as compared
with a net income of $81,987 on revenues from royalty of $991,261
in the prior year.
At Dec. 31, 2006, the company's balance sheet showed $19,922,746
in total assets, $7,780,222 in total liabilities, and $12,142,524
in stockholders' equity. The company's balance sheet also showed
strained liquidity with total current assets of $11,392 and total
current liabilities of $7,780,222.
A full-text copy of the company's 2006 annual report is available
for free at http://researcharchives.com/t/s?1d03
About Environmental Energy
Headquartered in Boise, Idaho, Environmental Energy Services, Inc.
(Other OTC: EESV.PK) -- http://www.eesvinc.com/-- operates in
the oil and gas industry in the United States. The company has a
mineral-lease-investment agreement with Ironhorse Exploration LLC
for acquiring oil and gas leases in four areas of Oklahoma,
Arkansas, and Louisiana. It also owns a 0.3% overriding royalty
interest in a gas lease that covers 2,527.29 acres in the
Ninilchek Dome in Alaska.
FELCOR LODGING: Earns $29 Million in First Quarter Ended March 31
-----------------------------------------------------------------
FelCor Lodging Trust Inc. reported a net income of $29.2 million
for first quarter 2007, a $19.3 million increase over a net income
of $9.9 million for the same period in 2006. Net income
applicable to common stockholders was $19.5 million, as compared
with a net income applicable to common stockholders of essentially
zero or $174,000 in the first quarter of 2006.
Total revenues for the first quarter 2007 were $248.7 million, as
compared with $251.4 million for the first quarter 2006.
Our $430 million capital improvement program remains on track and
is producing the results we expected. Operating margins for the
quarter were better than expected, notwithstanding the anticipated
renovation disruptions. During the quarter 34 of our hotels, or 41
percent of our portfolio, were under renovation.
The company increased its quarterly common dividend by $0.05 to
$0.30 per share, effective the second quarter 2007.
"We are pleased with our first quarter results, which were better
than anticipated. Our eight hotels renovated last year performed
ahead of our budgeted returns for the first quarter," said Richard
A. Smith, FelCor's president and chief executive officer. "We are
very excited about the continued progress of our renovation
program and the results we are seeing from our renovated hotels.
We are expecting accelerating RevPAR growth for our portfolio as
we move through the year."
During the quarter ended March 31, 2007, the company sold three
non-strategic hotels for gross proceeds of $64.7 million. Its
remaining eight non-strategic hotels are all under hard contracts
for sale with non-refundable deposits.
At March 31, 2007, the company had $1.4 billion of consolidated
debt outstanding with an average of five years to maturity. Its
cash and cash equivalents totaled about $116.5 million at
March 31, 2007. Included in its debt balance was $56 million of
debt related to its Royale Palms condominium project, which was
repaid in full May 1, 2007.
As of March 31, 2007, the company had total assets of $2.6 billion
and total liabilities of $1.6 billion, resulting in a total
stockholders' equity of $1 billion.
Renovation Program Update
Improvements and additions to the company's hotels for the first
quarter, including pro rata share of joint ventures, totaled
$77.2 million. At the date of this release, the company has
completed major renovations at 29 of its hotels since it started
its renovation program last year, including 21 hotels completed in
2007. The company is on target to complete renovations at 62 of
its hotels during 2007.
"As a result of the continued improvement in operating
performance, the success of the renovation program and the
continued strong fundamentals of the lodging industry, we are
pleased to increase our common dividend again," said Andrew J.
Welch, FelCor's executive vice president and chief financial
officer. "As the repositioning program winds down and our debt
reduction program is completed, we are completely focused on the
renovation and redevelopment programs to earn the returns we
expect and to mitigate displacement."
2007 Guidance
The company increased its full year guidance as a result of first
quarter performance. Its guidance for the remainder of the year
remains unchanged other than the timing of Royale Palms gains.
Second quarter 2007 includes a $15 million gain from our Royale
Palms condominium project, which is about $18 million for the full
year.
About FelCor Lodging
Headquartered in Irving, Texas, FelCor Lodging Trust Inc. --
http://www.felcor.com/-- is a hotel real estate investment trust
company and owner of full service, all-suite hotels. FelCor's
current portfolio is comprised of 83 consolidated hotels, located
in 23 states and Canada. FelCor is the largest owner of Embassy
Suites Hotels(R) and Doubletree Guest Suites(R) hotels. FelCor's
hotels are flagged under global brands such as Embassy Suites
Hotels, Doubletree(R), Hilton(R), Sheraton(R), Westin(R), and
Holiday Inn(R). It has a current enterprise value of about
$3.4 billion.
* * *
FelCor Lodging L.P.'s proposed $215 million senior secured
floating rate notes due 2011 carry Standard & Poor's Ratings
Services' 'B+' rating. FelCor Lodging Trust Inc. guarantees the
securities.
FENDER MUSICAL: Moody's Rates $200 Million Senior Loan at B2
------------------------------------------------------------
Moody's Investors Service upgraded Fender Musical Instrument's
corporate family rating and probability of default rating to B1
from B2 following its improved operating performance and improved
credit metrics. At the same time Moody's assigned a B2 rating to
the $200 million senior secured term loan. Proceeds from the
transaction will be used to refinance the company's existing debt
($95.9 million first lien and $100 million second lien). The
ratings on the existing first lien and second lien bank debt will
be withdrawn following the close of the transaction. The ratings
outlook is stable.
"The upgrade reflects Fender's improved operating performance as
evidenced by a recent doubling of operating cash flow and a
history of continued debt reduction" said Kevin Cassidy, Vice
President/Senior Analyst at Moody's Investors Service. "The
combination of both resulted in an improvement of retained cash
flow (operating cash flow less working capital changes and
dividends) as a percentage of adjusted debt to double digit
levels" Cassidy added.
The rating for the term loan reflects both the overall probability
of default of the company, to which Moody's has assigned a PDR of
B1, and a loss given default assessment of LGD 4 (61%). Both the
unrated revolving credit facility and the term loan benefit from
the full guarantees of the existing and future subsidiaries. The
revolver has a 1st lien priority interest on inventory and
accounts receivable and a 2nd priority lien on the remaining
assets, and the term has the inverse security interest. Moody's
believes that the term loan's collateral coverage approximates
40%, based on a combination of valuation techniques.
These ratings were upgraded:
* Corporate family rating, to B1 from B2;
* Probability of default rating, to B1 from B2;
This rating was assigned:
* $200 million senior secured term loan B2 (LGD4, 61%);
Fender Musical Instruments Corporation, based in Scottsdale,
Arizona, develops, manufactures and distributes musical
instruments, principally guitars, to wholesale and retail outlets
throughout the world. The company's revenue for the LTM period
ended March 31, 2007 approximated $445 million.
FIRST BANCORP: Board Affirms Payment of Dividends on Series A to E
------------------------------------------------------------------
First BanCorp's board of directors has declared the next payment
of dividends on First BanCorp's Series A through E Preferred
shares.
The estimated dividend amounts per share, record dates and payment
dates for the Series A through E Preferred Shares are:
Series $Per/share Record Date Payment Date
------ ---------- ----------- ------------
A 0.1484375 May 29, 2007 May 31, 2007
B 0.17395833 May 15, 2007 May 31, 2007
C 0.1541666 May 15, 2007 May 31, 2007
D 0.15104166 May 15, 2007 May 31, 2007
E 0.14583333 May 15, 2007 May 31, 2007
The approval was obtained as a part of First BanCorp's agreement
with the board of governors of the Federal Reserve System.
First BanCorp (NYSE: FBP) is the parent corporation of FirstBank
Puerto Rico, a state chartered commercial bank with operations in
Puerto Rico, the Virgin Islands and Florida; of FirstBank
Insurance Agency; and of Ponce General Corporation. First BanCorp,
FirstBank Puerto Rico and FirstBank Florida, formerly UniBank, the
thrift subsidiary of Ponce General, all operate within U.S.
banking laws and regulations. The Corporation operates a total of
151 financial services facilities throughout Puerto Rico, the U.S.
and British Virgin Islands, and Florida. Among the subsidiaries of
FirstBankPuerto Rico are Money Express, a finance company; First
Leasing and Car Rental, a car and truck rental leasing company;
and FirstMortgage, a mortgage origination company. In the U.S.
Virgin Islands, FirstBank operates First Insurance VI, an
insurance agency; First Trade, Inc., a foreign corporation
management company; and First Express, a small loan company.
* * *
In February 2007, Fitch Ratings has affirmed First BanCorp's long-
term Issuer Default Rating of 'BB' and Individual rating of 'C/D'
and removed the Rating Watch Negative. The Rating Outlook is
Negative. Fitch placed the ratings of First BanCorp on Rating
Watch Negative on Oct. 30, 2006. At the same time, Fitch is
affirming the IDR and short-term rating of FBP's subsidiary,
FirstBank of Puerto Rico at 'BB' and 'B', respectively. The
Rating Outlook remains Negative.
GATEHOUSE MEDIA: S&P Lifts Rating on Existing $960MM Loan to BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its secured loan rating
and revised its recovery rating on Fairmont, New York-based
GateHouse Media Operating Inc.'s existing $960 million bank loan.
The loan rating was raised to 'BB-' from 'B+', and the recovery
rating was revised to '1' from '2'. The ratings on this existing
bank loan are now commensurate with the $275 million incremental
term loan C (rated 'BB-' with a recovery rating of '1' on April
19, 2007). The existing and incremental term loan C have the same
terms and conditions, and will be treated as one combined facility
going forward.
All ratings on GateHouse, including the 'B+' corporate credit
rating, remain on CreditWatch, where they were placed with
negative implications April 13, 2007. The CreditWatch placement
followed the company's April 12th announcement that it had agreed
to acquire four daily newspapers from Gannett Co. (A-/Stable/A-2)
for $410 million.
The rating upgrade on the existing bank loan follows GateHouse's
announcement that it completed the acquisition of the Gannett
papers on May 7, 2007, and funded the incremental term loan C and
unrated $300 million delayed-draw bridge facility at parent
GateHouse Media Inc. S&P had previously stated that the funding
of the delayed-draw bridge facility at the parent level would
result in a one-notch enhancement to the rating on the
$960 million bank loan.
In resolving the CreditWatch listing, S&P will evaluate the
company's financing strategies, as well as review management's
operating strategy and financial policy. If GateHouse maintains
the significantly increased pro forma debt leverage, S&P's review
could result in a lowering of the corporate credit rating. If
this were the outcome, the downgrade would be limited to one
notch. The company has mentioned the possibility of raising
equity to fund a portion of the transaction. The size of the
offering will be a key factor in S&P's conclusion, and may
eliminate the downside rating potential. Although not currently
factored into its bank loan analysis, in the event of a partial or
complete repayment of the delayed-draw bridge loan through the
issuance of equity, S&P's issue and recovery ratings on the
existing and proposed bank facilities would be reevaluated. There
exists a meaningful possibility that the loan and recovery ratings
could be revised downward under such a scenario. This is because
a less levered company would need to experience a more significant
deterioration in its cash flow to produce a payment default, and
this could impair recovery prospects.
Ratings List
Ratings Remaining On CreditWatch
GateHouse Media Operating Inc.
Corporate Credit Rating B+/Watch Neg/--
$275M Term Loan C BB-/Watch Neg
Recovery Rating 1
Rating Raised
To From
GateHouse Media Operating Inc.
$960M Secd Credit Fac BB-/Watch Neg B+/Watch Neg
Recovery Rating 1 2
GE CAPITAL: Fitch Upgrades Ratings on Nine 2002-1 Certificates
--------------------------------------------------------------
Fitch upgrades General Electric Capital Commercial Mortgage Corp.,
series 2002-1, as:
-- $13 million class F to 'AAA' from 'AA';
-- $18.2 million class G to 'AA' from 'A+';
-- $10.4 million class H to 'A+' from 'A-';
-- $18.2 million class J to 'A-' from 'BBB';
-- $16.9 million class K to 'BBB' from 'BBB-';
-- $6.5 million class L to 'BBB-' from 'BB+';
-- $7.8 million class M to 'BB' from 'B+';
-- $10.4 million class N to 'B+' from 'B';
-- $5.2 million class O to 'B' from 'B-'.
In addition, Fitch affirms the ratings on these classes:
-- $116.4 million class A-2 at 'AAA';
-- $595.2 million class A-3 at 'AAA';
-- Interest-only classes X-1 and X-2 at 'AAA';
-- $36.3 million class B at 'AAA';
-- $22.1 million class C at 'AAA';
-- $16.9 million class D at 'AAA';
-- $10.4 million class E at 'AAA'.
Fitch does not rate the $15.6 million class P.
The rating upgrades reflect the increased credit enhancement
levels from an additional 9.5% defeasance, scheduled amortization
and one loan payoff since Fitch's last rating action. In total,
twenty-two loans (22.4%) have defeased since issuance. As of the
April 2007 distribution date, the pool's aggregate certificate
balance has decreased 11.5% to $919 million from $1.04 billion at
issuance.
Currently, there is one loan (2.3%) in special servicing. The
loan is secured by an office property located in Boston,
Massachusetts. It was transferred to the special servicer after
the borrower requested debt service relief. The collateral
property was subsequently sold and the assumption of the loan
closed in March 2007. The loan will be returned to the master
servicer following three timely payments.
The largest loan in the pool, 15555 Lundy Parkway (5%), is a
Credit Tenant Lease loan. It is secured by a 453,281 square foot
office property that is owner-occupied by the IT facility of Ford
Motor Company. This loan remains current.
GENERAL MOTORS: Offers 0% Financing for Silverado & Sierra Trucks
-----------------------------------------------------------------
General Motors Corp. is proposing zero-percent financing on
36-month loans for the 2007 Chevrolet Silverado and GMC Sierra,
various sources report. A reduced-rate financing on 60-month
loans for the pickup trucks is also available.
The move is in reaction to incentives deals offered by other
automakers as a result of rising gasoline prices.
As an alternative to the financing offer, clients can choose
$1,250 cash back on the Sierra or $1,500 on the Silverado.
The financing program for the pickup trucks commenced on Friday
and will end on July 9, 2007, according to various sources.
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.
GOODYEAR TIRE: Plan 22.5 Million Common Stock Offering
------------------------------------------------------
The Goodyear Tire & Rubber Company plans to offer 22,549,609
shares of its common stock in an underwritten public offering.
In addition, Goodyear intends to grant the underwriters a 30-day
option to purchase up to an additional 3,382,441 shares to cover
any over-allotments.
The company estimates the net proceeds from this offering, after
deducting underwriting discounts and commissions, will be
approximately $725 million, assuming a public offering price of
$33.26 per share, which was the last reported sale price
of Goodyear's common stock on May 8, 2007. The estimated net
proceeds would be approximately $834 million if underwriters
exercise their over-allotment option in full.
Goodyear intends to use the net proceeds from the offering to
repay approximately $175 million of its 8.625% notes due in 2011
and approximately $140 million of its 9% notes due in 2015. It
expects to use the remaining net proceeds for general corporate
purposes, which may include investments in growth initiatives
within the company's core tire businesses and the repayment of
other debt.
Deutsche Bank Securities, Citi and Goldman, Sachs & Co. will be
joint book running managers for the offering.
The offering will be made under an effective shelf registration
statement filed with the U.S. Securities and Exchange Commission.
Copies of the prospectus and the prospectus supplement relating to
the offering may be obtained from:
* Deutsche Bank Securities Prospectus Department
No. 100 Plaza One
Jersey City, NJ 07311
Tel: (800) 503-4611;
* Citigroup Global Markets Inc.
8th Floor
Brooklyn Army Terminal
140 58th Street
Brooklyn, NY 11220
Tel: (718) 765-6732;
* Goldman, Sachs & Co.
Prospectus Department
No. 85 Broad St.
New York, NY 10004
Tel: (212) 902-1171; or
* Goodyear's Investor Relations Department
No. 1144 E. Market St.,
Akron, OH 44316
Tel: (330) 796-3751
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.
GRAHAM PACKAGING: Dec. 31 Balance Sheet Upside-Down by $597 Mil.
----------------------------------------------------------------
Graham Packaging Holdings Company, parent company of Graham
Packaging Company L.P., reported results for the year ended
Dec. 31, 2006, and the refinancing of Term Loans under the
company's Credit Agreements.
As of Dec. 31, 2006, the company recorded in its balance sheet
total assets of $2.4 billion and total liabilities of $3 billion,
resulting in a total stockholders' deficit of $597.8 million.
The company experienced a net loss of $120.4 million for the year
ended Dec. 31, 2006, as compared with net loss of $52.6 million
for the year ended Dec. 31, 2005.
The company reported net sales of $2.5 billion for 2006 and 2005.
The net sales in 2006 increased by $47.5 million. The slight
increase in net sales was due to an increase in resin pricing and
an increase in units sold. Operating income for 2006 was
$116.4 million, a decline of $30.7 million, as compared with 2005,
and was adversely impacted by $14 million in losses associated
with the disposal of fixed assets.
Credit Agreement Amendment
Backed by strong investor demand, the company amended its Credit
Agreement to place $1.8 billion of new term loan borrowings. The
proceeds were used to pay off the company's existing Term Loan B
borrowings of $1.6 billion, repay in its entirety the company's
$250 million Second Lien Term Loan; reduce its outstanding
borrowings under its revolving credit facility by $50 million; and
pay related fees and expenses. The amendment will reduce the
company's annual interest costs by greater than $5 million and
provide for a single financial covenant measured by net leverage.
The company expects to fund scheduled debt repayments from cash
from operations and unused lines of credit. The revolving credit
facility expires on Oct. 7, 2010. At Dec. 31, 2006, the company's
total debts were $2.5 billion.
Liquidity and Capital Resources
In 2006, 2005 and 2004, the company generated $490.4 million of
cash from operations and $1.4 billion from increased debts. This
$1.9 billion was primarily used to fund $565.5 million of net cash
paid for property, plant and equipment, $1.2 billion of
investments and $81.5 million of debt issuance fee payments.
Working capital decreased $108.6 million in 2006, primarily due to
a decrease in inventories of $48.9 million.
A full-text copy of the company's 2006 annual report is available
for free at http://ResearchArchives.com/t/s?1d0c
About Graham Packaging Holdings
Graham Packaging Holdings Company is a Pennsylvania limited
partnership. Graham Packaging Company, L.P., --
http://www.grahampackaging.com/-- the company's wholly owned
subsidiary is a worldwide designer, manufacturer and seller of
customized blow molded plastic containers for the branded food and
beverage, household, personal care/specialty and automotive
lubricants product categories and, as of the end of September
2006, operated 85 manufacturing facilities throughout North
America, Europe and South America.
The Blackstone Group, an investment firm, holds 78.6% equity in
Graham Packaging Holdings Company. MidOcean Capital Investors,
L.P., holds 4.1%. A group of management executives holds 2.3%.
The family of Graham Packaging founder Donald Graham holds 15%.
HARBORVIEW MORTGAGE: Moody's Rates Class B-9 Certificates at Ba1
----------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by HarborView Mortgage Loan Trust 2007-3, and
ratings ranging from Aaa to Ba1 to the subordinate certificates in
the deal.
The securitization is backed by first lien, adjustable-rate, Alt-A
mortgage loans originated by Paul Financial, LLC (18.99%),
SunTrust Mortgage, Inc. (18.32%), ComUnity Lending, Inc. (15.72%)
and Just Mortgage, Inc. (10.66%) and various other originators
(36.31%). The ratings are based primarily on the credit quality
of the loans and on the protection against credit losses provided
by subordination, excess spread, overcollateralization and a yield
maintenance agreement provided by The Royal Bank of Scotland plc.
Moody's expects collateral losses to range from 1.45% to 1.65%.
GMAC Mortgage, LLC, will service the loans.
The complete rating actions are:
HarborView Mortgage Loan Trust 2007-3
Mortgage Loan Pass-Through Certificates, Series 2007-3
* Cl. 1A-1A, Assigned Aaa
* Cl. 2A-1A, Assigned Aaa
* Cl. 2A-1B, Assigned Aaa
* Cl. 2A-1C, Assigned Aaa
* Cl. B-1, Assigned Aaa
* Cl. B-2, Assigned Aa1
* Cl. B-3, Assigned Aa2
* Cl. B-4, Assigned Aa3
* Cl. B-5, Assigned A1
* Cl. B-6, Assigned A2
* Cl. B-7, Assigned A3
* Cl. B-8, Assigned Baa2
* Cl. B-9, Assigned Ba1
HAYES LEMMERZ: Stockholders Approve $180 Million Rights Offering
----------------------------------------------------------------
Hayes Lemmerz International Inc.'s stockholders approved of:
a) a rights offering of up to $180 million to holders of the
company's outstanding Common Stock as of April 10, 2007,
through the issuance of 55,384,615 rights to purchase one
share of Common Stock at an exercise price of $3.25 per
share,
b) the sale of any Common Stock not subscribed for in the
Rights Offering to Deutsche Bank Securities Inc. and SPCP
Group LLC, an affiliate of Silver Point Capital L.P.;
c) at the Investor's option, the purchase of up to 4,038,462
shares of Common Stock at the Exercise Price, resulting in
additional proceeds of up to $13,125,002; and
d) the related Amended and Restated Equity Purchase and
Commitment Agreement and other transactions contemplated.
The stockholders also considered the proposals on:
-- Amendment of the company's Certificate of Incorporation to
increase the aggregate number of authorized shares of Common Stock
from 100 million to 200 million and the aggregate number of
authorized shares of capital stock from 101 million to
201 million.
-- Amendment of the company's Certificate of Incorporation to
increase the maximum number of members of the board of directors
from nine to twelve.
All three proposals were approved, with more than 99% of the
shares voted at the special meeting and more than 61% of the total
issued and outstanding shares supporting each proposal.
"The company appreciates the strong support of its stockholders in
the company's efforts to reduce its debt and increase stockholder
equity," James Yost, vice president of finance and chief financial
officer, said. "The approval of the Rights Offering and the
related proposals is a significant step in completing the
company's overall debt refinancing, reducing leverage and lowering
interest costs, as reflected in the improved ratings by Standard &
Poor's Ratings Services and Moody's Investor Services."
Each record holder of the company's Common Stock on April 10, 2007
received 1.3970 rights for each share of common stock held on the
record date. The rights may be exercised until 5:00 p.m. Eastern
Daylight Time, Monday, May 21, 2007, unless the company extends
the Rights Offering. Stockholders who receive rights through a
bank or broker will receive instructions for exercising rights
from their bank or broker and may be required to act prior to the
stated expiration time. Hayes Lemmerz may terminate the Rights
Offering for any reason prior to the expiration time.
About Hayes Lemmerz International
Headquartered in Northville, Michigan, Hayes Lemmerz International
Inc. (Nasdaq: HAYZ) -- http://www.hayes-lemmerz.com/-- is a
global supplier of steel and aluminum automotive and commercial
vehicle highway wheels, well as aluminum components for brakes,
powertrain, suspension, and other lightweight structural products.
Worldwide revenues approximate $2.1 billion. The company has 30
facilities and approximately 8,500 employees worldwide.
* * *
As reported in the Troubled Company Reporter on May 4, 2007,
Moody's Investors Service raised to B3 from Caa1 the corporate
family and probability of default ratings of HLI Operating
Company, Inc., a wholly-owned subsidiary of Hayes Lemmerz
International, and changed the rating outlook to stable from
negative.
In addition, Standard & Poor's Ratings Services raised its
corporate credit rating on automotive supplier Hayes Lemmerz
International Inc. to 'B' from 'B-,' reflecting planned debt
reduction from a proposed refinancing and equity rights offering,
well as improved operating results, particularly in the company's
wheels business outside the U.S. At the same time, the ratings
were removed from CreditWatch with positive implications, where
they were placed on March 16, 2007. The outlook is stable.
HAYES LEMMERZ: Fitch Assigns B Issuer Default Rating
----------------------------------------------------
Fitch Ratings has initiated ratings for Hayes Lemmerz
International Inc. with an Issuer Default Rating of 'B'.
Fitch also expects to assign ratings to Hayes Lemmerz's proposed
senior secured revolving credit facility, senior secured Euro term
loan, senior secured Euro synthetic letter of credit facility, and
senior unsecured notes. The proposed facility replaces HAYZ'
existing bank facility.
The ratings are:
Hayes Lemmerz International, Inc.
-- Issuer Default Rating 'B';
HLI Operating Company, Inc. (HLI Opco)
-- Issuer Default Rating 'B';
-- Senior secured revolving credit facility 'BB/RR1';
Hales Lemmerz Finance - Luxembourg S.A. (European Holdco)
-- Issuer Default Rating 'B';
-- Senior secured revolving credit facility 'BB/RR1';
-- Senior secured Euro term loan 'BB/RR1';
-- Senior secured Euro synthetic LOC facility 'BB/RR1';
-- Senior unsecured Euro notes 'B-/RR5'.
The Rating Outlook is Stable. Fitch's ratings incorporate the
expectation that HAYZ will complete several pending financial
transactions, including HAYZ' $180 million rights offering, the
proposed bank facility and the $150 million Euro notes offering.
The ratings are also contingent on a review of final
documentation. Including the undrawn revolver, Fitch's ratings
affect approximately $515 million in total debt.
Fitch's ratings reflect the benefits of HAYZ' pending
recapitalization, the company's strong presence in the global
wheel market, geographic diversity, a growing book of non-Detroit
3 customers, significant progress in restructuring operations and
improved operating results. Fitch's concerns include low free cash
flow, the exposure to the Detroit 3 customers' potential for a
labor stoppage, a leveraged balance sheet, and the risk that
further restructuring may be necessary.
The Stable Outlook reflects Fitch's expectations for moderate
revenue growth and modestly positive free cash flow over the
intermediate term. These expectations are supported by HAYZ'
geographic diversity which provides access to higher growth
vehicle markets and reduces the risk of cyclicality in any one
region. Fitch believes there is some downside cushion to the
Outlook, and HAYZ could generate limited positive free cash flow
and minor debt reduction even under a stressed scenario that
includes the assumptions of substantial declines in Detroit 3
volume and limited margin improvement despite significant
restructuring in recent years. However, the Outlook could be
negatively affected by uncertainty with respect to the upcoming
UAW contract negotiations as well as a financially stressed supply
base, both of which could cause considerable disruptions to the
industry's production, as well as to HAYZ' balance sheet, which
could quickly deteriorate given the limited free cash flow that
Fitch has estimated. The Outlook could be positively affected if
more solid free cash flow were to materialize from consistent,
steady operating conditions and expected volumes in 2007, leading
to more significant debt reduction.
The recovery ratings and notching in the debt structure reflect
Fitch's recovery expectations under a scenario in which distressed
enterprise value is allocated to the various debt classes.
Fitch's recovery analysis for HAYZ is based on a restructuring as
a going concern scenario rather than a liquidation. Fitch
estimates that in a distressed scenario, HAYZ' enterprise value
could significantly deteriorate and secured debt holders would
most likely still receive full recovery. As a result, the
proposed senior secured facilities were assigned an 'RR1' (91% to
100% recovery), and the senior secured revolver, Euro term loan
and Euro synthetic LOC loan were notched +3 from the IDR under
Fitch's recovery methodology. The senior unsecured Euro notes
were assigned a recovery rating of 'RR5' (11% to 30%) and notched
-1 from the IDR to reflect the junior position of the senior
unsecured debt holders' claim relative to the senior secured debt
holders'. Despite the fact that many of HAYZ' operations are
located outside of North America, Fitch did not use its 'soft cap'
guidelines for HAYZ because Fitch believed that any restructuring
action would likely be initiated in the U.S., allowing for Fitch's
standard notching policies to be followed.
HAYZ' recapitalization enhances the company's financial
flexibility by reducing leverage, extending maturities and
providing approximately $25 million of incremental liquidity. The
proposed capital structure also reduces HAYZ' cost of capital and
better aligns currency denomination and collateral with the
geographic location of HAYZ' primary source of operating cash
flow. The proposed bank agreement consists of a $125 million
revolving credit facility, a Euro denominated term loan facility
of up to $350 million equivalent and a Euro denominated $20
million equivalent synthetic LOC facility. Hayes will
concurrently offer approximately $150 million in equivalent Euro
denominated senior unsecured notes. The notes will be issued by a
European Holdco subsidiary but will be offered in the United
States to qualified institutional investors.
The company also intends to pay off its 10-1/2% notes due 2009
using proceeds from a $180 million equity rights offering.
Stockholders are to receive 1.3970 rights for each share of
common, entitling the purchase of stock at $3.25 per share. The
rights offering is backstopped by Deutsche Bank. Silver Point
Capital has agreed to acquire one-half of Deutsche Bank's shares
purchased under the backstop. Deutsche Bank also has the option
to make a direct investment of up to a maximum of slightly more
than 4 million shares of common at $3.25 per share or roughly
$13 million. Deutsche's direct investment shares would be
incremental to the number of shares in the rights offering. The
rights offering was approved by stockholders at a special meeting
held May 4.
The proposed Euro term loan and Euro synthetic LOC loan will be
obligations of a European Holdco domiciled in Luxembourg. The
proposed revolver will be the obligation of the HLI Operating Co.
and the European Holdco. To the extent allowed by law and tax
implications, the parent - Hayes Lemmerz International, Inc -
guarantees the proposed senior secured facility. Collateral
includes substantially all of HAYZ' assets and 65% of the stock of
the first-tier foreign subsidiaries. The revolver has first
priority over the Euro term loan with respect to the domestic
assets among the lenders in the credit agreement. Relative to any
other party outside of the credit agreement, only one lien on
substantially all assets exists. This is established by the
collateral sharing agreement which states that upon acceleration,
all of the lenders receive pro rata recovery, independent of the
facility into which they were lending. This reduces recovery
analysis complexity regarding the alignment of cash flows and
assets with their respective tranche as well as any issues with
foreign entities' ability to guarantee the US loans due to tax
implications.
The proposed bank facility covenants include limitations on
indebtedness, liens and capital expenditures as well as maximum
leverage and minimum coverage ratios.
Going forward, HAYZ is expected to benefit from its steel wheel
technology, moves to lower cost countries and growth from non-
Detroit 3 customers, especially in regions of increasing vehicle
demand. To some degree, the demand for steel wheels in the U.S.
has seen resurgence in recent years due to reduced weight
differential with aluminum wheels, improved styling capability and
substantially competitive pricing versus aluminum. However,
aluminum wheels may garner increasing installation rates in other
regions of the world. Given HAYZ' moves to locate steel and
aluminum wheel capacity throughout the globe, the company stands
to benefit from steel wheel penetration in the US, aluminum
penetration outside the US and from higher growth vehicle markets
such as Eastern Europe, India and China.
On a discontinued operations (disc ops) basis, consolidated sales
for fiscal 2006 were up 5.1% to $2,056 million from $1,957 million
in the prior year. Consolidated Operating EBITDA margin improved
150 basis points (bps) to 8.7% from 7.2% in fiscal 2005. The
Wheels Group sales increased 4.8% to $1,672 million in fiscal 2006
from $1,594 million in the prior year. Fitch calculates a 70 bps
improvement in Operating EBITDA margin for the Wheel Group to
10.6%, healthy for an automotive supplier, from 9.9% in fiscal
2005. On a disc ops basis, fiscal 2006 sales for the Components
Group rose 6.2% to $385 million from $362 million. Fitch
calculates Components Group Operating EBITDA declined 110 bps to
2.6% from 3.7% in fiscal 2005. In addition, HAYZ reported a
$71.6 million improvement in consolidated free cash flow excluding
securitizations and factoring of a use of $9.1 million versus a
use of $80.7 million in fiscal 2005.
Including the cash and marketable securities balance of
$38.4 million, total liquidity at the end of fiscal 2006 on
Jan. 31, 2007 was $146.1 million. At year-end, HAYZ had no
outstanding borrowings under its revolver and $79.7 million of
availability after $$20.3 million in outstanding LOCs. The
company also had a U.S. securitization facility of approximately
$65 million of which $28 million was available at year-end. In
addition, the company had $39.3 million outstanding and $4.7
million available under its uncommitted European receivable
facilities, the availability of which Fitch does not include in
liquidity since the facilities are cancelable at any time. As of
Jan. 31, total adjusted debt-to-EBITDA was reduced to 3.9 times
(x), down from 4.5x at the end of fiscal 2005.
HC CARIBBEAN: Creditors Meeting Slated for May 24
-------------------------------------------------
The United States Trustee for Region 21 will convene a meeting of
HC Carribean Chemicals Inc.'s creditors at 1:30 p.m. on May 24,
2007, at the first floor of Ochoa Building, 500 Tanca
Street, San Juan, Puerto Rico.
This is the meeting of creditors after the Debtor's case was
converted into a Chapter 7 liquidation on April 12, 2007.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Ponce, Puerto Rico, HC Caribbean Chemicals Inc.
sells chemical, industrial, and janitorial cleaning products.
The company is the exclusive distributor for Zep Products in
Puerto Rico. HC Caribbean filed a chapter 11 petition on
October 16, 2006 (U.S. Bankr. P.R. Case No. 06-03960). The
Debtor's case was converted into a Chapter 7 liquidation
proceeding on April 12, 2007. Nydia Gonzalez Ortiz, Esq. at
Santiago & Gonzalez represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it disclosed more than $100 million in assets and more than
$100 million in debts.
HC CARIBBEAN: Proofs of Claim Must be Filed by Aug. 22
------------------------------------------------------
The United States Bankruptcy Court for the District of Puerto Rico
set Aug. 22, 2007, at 5 p.m. as the deadline for all persons and
entities, owed money by HC Caribbean Chemicals Inc. on account of
claims arising prior to Oct. 16, 2006, to file proofs of claim and
proofs of interest.
Creditors must file written proofs of claim on or before the Aug.
22 Claims Bar Date and those forms must be delivered to:
Celestino Matta-Mendez
Clerk of Bankruptcy Court
U.S. Post Office and Courthouse Building
300 Recinto Sur Street, Room 109
San Juan, Puerto Rico 00901
Tel: 787-977-6000
Any proof of claim or interest submitted by facsimile or e-mail
will not be accepted and will not be deemed filed until such proof
of claim is sent through the United States mail or through a
courier.
The Claims Bar Date applies to all claims including governmental
units. The claims bar date for governmental unit is Oct. 22,
2007.
Headquartered in Ponce, Puerto Rico, HC Caribbean Chemicals Inc.
sells chemical, industrial, and janitorial cleaning products.
The company is the exclusive distributor for Zep Products in
Puerto Rico. HC Caribbean filed a chapter 11 petition on
October 16, 2006 (U.S. Bankr. P.R. Case No. 06-03960). The
Debtor's case was converted into a Chapter 7 liquidation
proceeding on April 12, 2007. Nydia Gonzalez Ortiz, Esq. at
Santiago & Gonzalez represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it disclosed more than $100 million in assets and more than
$100 million in debts.
HELIOS FINANCE: Fitch Assigns Low-B Ratings on Three Note Classes
-----------------------------------------------------------------
Fitch rates HELIOS Finance Limited Partnership 2007-S1 as:
-- $4,988,237,000 class A-1 Risk Position 'AAA';
-- $249,412,000 class A-2 Risk Position 'AA';
-- $249,412,000 class A-3 Risk Position 'A';
-- $249,412,000 class B-1 floating-rate notes 'BBB';
-- $93,529,000 class B-2 floating-rate notes 'BB';
-- $93,529,000 class B-3 floating-rate notes 'B';
-- $19,953,000 class B-4 floating-rate notes 'B-'.
HELIOS Finance Limited Partnership 2007-S1 represents Wachovia's
first synthetic balance sheet securitization of auto loan
receivables. The class B-1, B-2, B-3 and B-4 floating-rate notes
will be offered to the public via a 144A offering. The class A-1,
A-2, A-3 and B-5 Risk Positions will be initially retained by
Wachovia Bank. The notes are limited recourse obligations of the
co-issuer and their performance is linked to the performance of a
referenced $6.2 billion pool of prime and nonprime auto loans
secured by new and used vehicles (the referenced portfolio)
originated by Wachovia Dealer Services, Inc., Wachovia's auto
finance division. The ratings on the notes are based on the
enhancement provided by subordination. The expected ratings also
reflect the servicing capabilities of Wachovia, the quality of
retail auto receivables originated by WFS, the strength of
Wachovia Bank (rated 'AA-'/'F1+' by Fitch) as swap counterparty
under a credit default swap and the sound legal and cash flow
structures.
Credit enhancement HELIOS Finance Limited Partnership 2007-S1
tranches consist solely of subordination. HELIOS 2007-S1 has the
following initial CE levels:
-- Class A-1 Risk Position 20%;
-- Class A-2 Risk Position 16%;
-- Class A-3 Risk Position 12%;
-- Class B-1 floating-rate notes 8%;
-- Class B-2 floating-rate notes 6.50%;
-- Class B-3 floating-rate notes 5%;
-- Class B-4 floating-rate notes 4.68%.
As of the statistical cut-off date, the receivables have the
weighted average APR of 11.77%. The WA original maturity of the
pool is 67.5 months and the WA remaining term is 51.6 months
resulting in approximately 15.9 months of collateral seasoning.
The pool has a large concentration of receivables originated in
California (33.55%). The next four largest state concentrations
are Washington (5.28%), Arizona (4.99%), Texas (4.67%) and North
Carolina (3.26%). The exposure in California may subject the pool
to potential regional economic downturns; however, the remaining
portion of the pool is well diversified.
Interest and principal are payable monthly, beginning May 20,
2007. HELIOS Finance Limited Partnership 2007-S1 is a modified
pro rata structure that provides structural protection to senior
noteholders through tranche floors and cumulative net loss
triggers and through a mechanism that allows losses to be
allocated sequentially from the lowest to the highest rated
outstanding classes of notes.
Based upon a review of WDS' retail auto loan portfolio
performance, prior securitizations, and the composition of the
assets in the referenced portfolio, Fitch expects HELIOS Finance
Limited Partnership 2007-S1 to perform consistent with recent
Wachovia securitizations. Through Dec. 31, 2006, WDS managed
retail portfolio of approximately $15 billion had total
delinquencies of 3.21%, and net charge-offs of 1.55%. Both
statistics were calculated as a percentage of the dollar amount of
contracts outstanding.
HELIOS FINANCE: S&P Rates $19.9 Million Class B-4 Notes at B-
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to HELIOS
Finance L.P. 2007-S1/ HELIOS Finance Corp. 2007-S1's
$456.423 million credit-linked notes.
The ratings are based on credit enhancement levels, the
transaction's credit enhancement as of the closing date, a legal
structure designed to minimize potential losses to noteholders in
the event of the issuer's insolvency, and Wachovia Bank N.A.'s
AA/Stable/A-1+ credit rating.
Ratings Assigned
HELIOS Finance L.P. 2007-S1/
HELIOS Finance Corp. 2007-S1
Class Rating Amount
----- ------ ------
B-1 BBB $249,412,000
B-2 BB- $93,529,000
B-3 B $93,529,000
B-4 B- $19,953,000
HELLER FINANCIAL: Fitch Holds Low-B Ratings on Two Certificates
---------------------------------------------------------------
Fitch upgrades Heller Financial Commercial Mortgage Asset Corp.'s
mortgage pass-through certificates, series 2000-PH1, as:
-- $26.3 million class G to 'AA+' from 'AA-'.
In addition, the ratings on these classes are affirmed:
-- $476 million class A-2 at 'AAA';
-- Interest-only class X at 'AAA';
-- $43.1 million class B at 'AAA';
-- $47.8 million class C at 'AAA';
-- $12 million class D at 'AAA';
-- $35.9 million class E at 'AAA';
-- $14.4 million class F at 'AAA';
-- $7.2 million class K at 'BBB-';
-- $9.6 million class L at 'BB';
-- $9.6 million class M at 'B-'.
Fitch does not rate the $19.1 million class H, $9.6 million class
J, or $13.9 million class N certificates. Class A-1 has been paid
in full.
The upgrades are the result of an additional 4.5% paydown and 3.4%
defeasance since the last Fitch rating action. As of the April
2007 distribution date, the pool's certificate balance has paid
down 24.3% to $724.4 million from $957 million at issuance. In
total, 41 loans (33.6%) have defeased, including the largest loan
in the pool (4.7%).
There are currently four assets (2.8%) in special servicing with
Fitch projected losses anticipated to be absorbed by the non-rated
class N. Two of the specially serviced assets are unrelated
industrial properties located in Chicago, IL (1.7%) and Troy,
Michigan (0.3%). The special servicer is working with the
respective borrowers to resolve the declining performance of the
assets.
The retail asset (0.6%) is real estate-owned and located in
Houston, Texas. The property is actively being marketed for sale.
Finally, the multifamily specially serviced asset (0.1%) located
in Anderson, Indiana, is in the process of resolving lien issues
before being released from the trust.
INDYMAC ABS: Fitch Takes Various Rating Actions on Six Issues
-------------------------------------------------------------
Fitch Ratings has taken rating actions on the following IndyMac
ABS, Inc. Home Equity Issues:
Series SPMD 2000-A Group 1:
-- Class AF-3 affirmed at 'AAA';
-- Class R affirmed at 'AAA';
-- Class MF-1 affirmed at 'BBB-';
-- Class MF-2 remains at 'CC/DR2';
-- Class BF remains at 'C'; Distressed Recovery rating
revised to 'DR5' from 'DR6'.
Series SPMD 2000-A Group 2:
-- Class AV-1 affirmed at 'AAA';
-- Class MV-1 affirmed at 'AA';
-- Class MV-2 upgraded to 'A+' from 'A';
-- Class BV affirmed at 'BBB'.
Series SPMD 2000-B Group 1
-- Class AF-1 affirmed at 'AAA';
-- Class R affirmed at 'AAA';
-- Class MF-1 downgraded to 'BBB' from 'A-';
-- Class MF-2 remains at 'CC'; DR rating revised to 'DR3' from
'DR4'.
Series SPMD 2000-B Group 2
-- Class MV-1 affirmed at 'AA';
-- Class MV-2 affirmed at 'A';
-- Class BV remains at 'CCC/DR1'.
Series SPMD 2000-C Group 1
-- Class AF-5 affirmed at 'AAA';
-- Class AF-6 affirmed at 'AAA';
-- Class R affirmed at 'AAA';
-- Class MF-1 downgraded to 'BB-' from 'BBB';
-- Class MF-2 remains at 'CC/DR3';
Series SPMD 2000-C Group 2
-- Class AV affirmed at 'AAA';
-- Class MV-1 downgraded to 'BBB' from 'A-';
-- Class MV-2 downgraded to 'CC' from 'B+ ' and assigned a DR
rating of 'DR4'.
Series SPMD 2001-B Groups 1 & 2
-- Class R affirmed at 'AAA';
-- Class MF-1 affirmed at 'AA';
-- Class MF-2 affirmed at 'BBB-';
-- Class BF remains at 'CC/DR3'.
Series SPMD 2003-A Group 1
-- Class AF-4 affirmed at 'AAA';
-- Class AF-5 affirmed at 'AAA';
-- Class MF-1 affirmed at 'AA';
-- Class MF-2 affirmed at 'A';
-- Class BF downgraded to 'BBB' from 'BBB+'.
Series SPMD 2003-A Group 2
-- Class AV-2 affirmed at 'AAA';
-- Class MV-1 affirmed at 'AA';
-- Class MV-2 affirmed at 'A+';
-- Class MV-3 affirmed at 'A';
-- Class MV-4 affirmed at 'A-';
-- Class MV-5, rated 'BBB+, placed on Rating Watch Negative;
-- Class BV downgraded to 'BBB-' from 'BBB'.
Series INDS 2006-A
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA+';
-- Class M-2 affirmed at 'AA';
-- Class M-3 affirmed at 'AA-';
-- Class M-4 affirmed at 'A+';
-- Class M-5 affirmed at 'A';
-- Class M-6 affirmed at 'A-';
-- Class M-7 affirmed at 'A-';
-- Class M-8 affirmed at 'BBB+';
-- Class M-9 affirmed at 'BBB';
-- Class M-10, rated 'BBB-', placed on Rating Watch Negative;
-- Class B-1 downgraded to 'BB-' from 'BBB-';
-- Class B-2 downgraded to 'B+' from 'BB+';
-- Class B-3 downgraded to 'B+' from 'BB'.
The affirmations reflect satisfactory credit enhancement
relationships to future loss expectations and affect approximately
$367 million in outstanding certificates, as of the April 25, 2007
distribution date. The upgrade of the MV-2 class ($878,091
outstanding) of series SPMD 2000-A Group 2 reflects an improvement
in the relationship between CE and expected future losses. The
negative rating actions (downgrades and Rating Watch Negative) are
due to deterioration in the relationship between CE and expected
losses and affect approximately $41 million in outstanding
certificates.
The mortgage loans in these transactions were originated or
acquired by IndyMac Bank, FSB which is also the servicer or master
servicer for these loans. The INDS 2006-A transaction consists
primarily of 15 year fixed-rate closed-end subprime loans secured
by second liens on one- to four-family residential properties.
The collateral in all the other transactions consists of fixed-
rate and adjustable-rate subprime loans secured by first or second
liens on one- to four-family residential properties
These transactions are seasoned from a range of 11 months (2006-A)
to 84 months (2000-A). The pool factors (i.e., current mortgage
loans outstanding as a percentage of the initial pool) range from
4.27% (2000-B Group 2) to 80.76% (2006-A). The cumulative losses,
as a percentage of the original collateral balances, range from
0.87% (2003-A Group 2) to 6.66% (2000-B Group 1).
As of the April 25, 2007 distribution date, the
overcollateralization (OC) for series 2000-B Group 1 was zero
versus a target of $1,568,819. Class MF-2 has already taken some
write-downs and has currently $2,876,770 of principal remaining.
The current CE for this class is zero versus an initial CE of
3.75% and the cumulative write down for this bond is $576,422.
The 60+ delinquencies are 33.50% of current collateral balance.
This includes foreclosures and real estate owned (REO) of 8.21%
and 11.10%, respectively.
The OC for series 2000-C Group 1 was zero versus a target of
$900,001. Class MF-2 has already taken some write-downs and has
currently $3,449,754 of principal remaining. The current CE for
this class is zero versus an initial CE of 2.50% and the
cumulative write down for this bond is $1,252,830. The 60+
delinquencies are 50.03% of current collateral balance. This
includes foreclosures and REO of 12.10% and 13.08%, respectively.
The OC for series 2000-C Group 2 was $433,763 versus a target of
$1,350,000. The 60+ delinquencies are 49.23% of current
collateral balance. This includes foreclosures and REO of 20.20%
and 7.20%, respectively.
The OC for series 2003-A Group 1 was $749,318 versus a target of
$785,353. The 60+ delinquencies are 11.42% of current collateral
balance. This includes foreclosures and REO of 1.58% and 4.96%,
respectively.
The OC for series 2003-A Group 2 was $1,420,214 versus a target of
$1,497,817. The 60+ delinquencies are 21.07% of current
collateral balance. This includes foreclosures and REO of 12.72%
and 3.70%, respectively.
The OC for series INDS 2006-A was $16,251,997 versus a target of
$22,399,284. The 60+ delinquencies are 10.77% of current
collateral balance. This includes foreclosures of 0.10%. There
is no REO, as of April 2007.
ISP CHEMCO: Moody's Rates Proposed $1.2 Billion Facilities at Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned Ba3 ratings to the new proposed
$1.2 billion guaranteed senior secured credit facilities of ISP
Chemco LLC (Ba3 corporate family rating), a wholly owned
subsidiary of International Specialty Holdings LLC and revised the
ratings outlook to negative from stable.
Going forward the bank facilities are expected to include an
existing $250 million revolver due 2012 ( Ba3 rating affirmed) and
a new $1,155 million term loan due 2014. Proceeds from the new
term loan will be used to fund a $215 million dividend to Chemco's
parent as well as refinance an existing term loan.
The Ba3 ratings of the proposed Chemco credit facilities reflects
the increase in debt associated with the proposed $200 million
dividend to the parent that will delay expected improvements in
the company's credit metrics. Moody's concern over such event
risk from ISP's controlling member has served to keep Chemco's
ratings at the lower end of the Ba category. Indeed, the change
in outlook to negative signals that there is little room left for
further dividends until credit metrics are improved.
A further concern is the lack of SEC financials which has limited
the level of disclosure provided. Chemco's financial statements,
while audited, (with an unqualified opinion from Ernst & Young),
provide less detail than Moody's has received than in the past.
The assigned ratings are subject to a review of the final
documentation for the new credit facility agreements. Upon the
successful completion of the refinancing the rating on the
existing term facility will be withdrawn.
Ratings Assigned;
ISP Chemco, LLC
* Proposed $1,155 million Guaranteed Senior Secured Term Loan
due 2014 - Ba3 -- LGD3 - 49%
Ratings Affirmed;
ISP Chemco, LLC
* Corporate Family Rating: Ba3
* Guaranteed Senior Secured Credit Revolver Ba3
* Guaranteed Senior Secured Credit Term Loan Ba3*
* Upon successful completion of the term loan refinancing this
rating will be withdrawn.
The proposed ratings reflect Chemco's relatively strong business
position, offset by a high and increased secured debt burden.
Moody's view of the strong business position is supported by the
company's diversified specialty chemical product portfolio and
broad customer base, good market positions in its product niches,
the relative stability of its consumer end markets, strong growth
in revenue and operating profits, and its steady operating margins
(17.4% in 2006). The ratings also derive support from the
company's cost reduction activities, significant R&D spending, and
successful past integration of acquired assets.
The Ba3 rating for the secured credit facilities is evidenced by
the fact that funded debt at Chemco is expected to increase by 20%
moving to about $1.2 billion, assuming that the majority of the
revolver remains undrawn. The credit profile also reflects the
company's high leverage with debt to EBITDA projected (by Moody's)
to approach mid 4.6 times at the end of 2007, modest coverage of
interest expense, and significant intangible assets. The ratings
further continue to consider the potential tax claim against G-I
Holdings Inc. (ISP was a subsidiary of G-I prior to 1997, G-I
filed Chapter 11 in January 2001 due to asbestos-related claims),
which has been pending since 1997 (tax claim as of 12/31/06 was
$329 million, including interest).
In addition, debt including Moody's adjustments for pension and
lease expense, as well as a modest accounts receivable program, is
approaching a level that is high for a Ba3 corporate family
rating. Moody's anticipates that debt/EBITDA will stay near 4.0
times in 2007 and 2008, and free cash flow to total debt will
range between 4%-5% near 4% in 2007 and 2008, also somewhat weak
for the Ba3 ratings. Moody's estimates that retained cash flow to
total debt would average 14% (reflecting a well placed Ba metric).
Moody's estimates include incremental bolt-on acquisitions and
continued capital spending.
The outlook for the ratings is negative, reflecting ISP high debt
leverage which has been on the increase over the last two years.
If credit ratios continue at the current elevated levels the
ratings may be lowered. There is little room in the current
rating for further future dividends over the next 12-24 months.
Additional factors that could contribute to a downgrade include a
change in acquisition strategy from bolt-on assets to step-out
businesses, a further/additional increase in non-cash generating
financial leverage (total debt to EBITDA) to greater than 5.5
times, an increase in distributions to ISP Holdings, or adverse
developments with respect to tax litigation.
ISP Chemco, LLC., headquartered in Wayne, New Jersey, manufactures
specialty chemicals and industrial chemicals and is part of a
group of companies which is a beneficially owned by Samuel Heyman.
Revenues at the end of 2006 approached $1.4 billion.
IXIS REAL: Fitch Holds BB Rating on 2005-HE1 Class B4 Certs.
------------------------------------------------------------
Fitch has affirmed the following mortgage pass-through
certificates:
IXIS Real Estate Capital Trust, series 2005-HE1
-- Class A-1 affirmed at 'AAA';
-- Class A-4 affirmed at 'AAA';
-- Class M1 affirmed at 'AA+';
-- Class M2 affirmed at 'AA';
-- Class M3 affirmed at 'AA';
-- Class M4 affirmed at 'AA-';
-- Class M5 affirmed at 'A+';
-- Class M6 affirmed at 'A';
-- Class B1 affirmed at 'A-';
-- Class B2 affirmed at 'BBB';
-- Class B3 affirmed at 'BBB';
-- Class B4 affirmed at 'BB+'.
The affirmations reflect a satisfactory relationship between
credit enhancement and future loss expectations and affect
approximately $142 million of outstanding certificates, as of the
April 2007 distribution date.
The underlying collateral for the transaction listed above
consists of 30 year fixed- and adjustable-rate mortgage loans
secured by first and second liens on one- to four-family
residential properties extended to subprime borrowers. As of the
April 2007 distribution, series 2005-HE1 is 26 months seasoned.
The pool factor (current principal balance as a percentage of
original) is 21%. The cumulative loss as a percentage of the
original principal balance is 0.38%. The servicer for this
transaction is Countrywide Home Loans, Inc (rated 'RPS1' by
Fitch).
All of the mortgage loans were purchased by Morgan Stanley ABS
Capital I Inc., the depositor, from IXIS Real Estate Capital Inc.,
who previously acquired the mortgage loans from various other
corporations.
Fitch will continue to closely monitor this transaction.
J.P. MORGAN: Moody's Holds Low-B Ratings on Five 2005-LDP1 Certs.
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of 22 classes of
J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 2005-LDP1 as:
- Class A-1, $50,881,954, affirmed at Aaa
- Class A-2, $994,485,000, affirmed at Aaa
- Class A-3, $157,523,000, affirmed at Aaa
- Class A-4, $601,541,000, affirmed at Aaa
- Class A-SB, $119,936,000, affirmed at Aaa
- Class A-1A, $336,325,689, affirmed at Aaa
- Class A-J, $94,303,000, affirmed at Aaa
- Class A-JFL, $100,000,000, affirmed at Aaa
- Class X-1, Notional, affirmed at Aaa
- Class X-2, Notional, affirmed at Aaa
- Class B, $68,366,000, affirmed at Aa2
- Class C, $25,187,000, affirmed at Aa3
- Class D, $53,973,000, affirmed at A2
- Class E, $28,786,000, affirmed at A3
- Class F, $46,776,000, affirmed at Baa1
- Class G, $28,786,000, affirmed at Baa2
- Class H, $32,384,000, affirmed at Baa3
- Class J, $10,794,000, affirmed at Ba1
- Class K, $14,393,000, affirmed at Ba2
- Class L, $10,795,000, affirmed at Ba3
- Class M, $7,196,000, affirmed at B1
- Class N, $7,197,000, affirmed at B2
As of the April 16, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 1.5%
to $2.84 billion from $2.88 billion at securitization. The
Certificates are collateralized by 233 mortgage loans. The loans
range in size from less than 1.0% to 7.6% of the pool, with the
top 10 loans representing 38.8% of the pool. The pool includes
two shadow rated loans, representing 8.6% of the outstanding loan
balance. Five loans, representing 1.7% of the pool, have defeased
and are collateralized by U.S. Government securities. The pool
has not realized any losses since securitization. Currently there
are three loans, representing less than 1.0% of the pool, in
special servicing. Moody's estimates $1.1 million of losses on
all the specially serviced loans. Twenty-two loans, representing
4.9% of the pool, are on the master servicer's watchlist.
Moody's was provided with full-year 2005 and partial-year 2006
operating results for 95.3% and 80.0%, respectively, of the pool.
Moody's average weighted loan to value ratio for the conduit
component is 94.2%, compared to 94.6% at securitization.
The largest shadow rated loan is the Woodbridge Center Loan
($216.2 million -- 7.6%), which is secured by a 1.6 million square
foot super regional mall, located in Woodbridge, Middlesex County,
New Jersey. Moody's current shadow rating is Baa1, the same as at
securitization.
The second largest shadow rated loan is the Harbor Court Loan
($27.5 million -- 1.0%), which is secured by the leased fee
interest in land beneath a 31-story mixed-use project (202,000
square foot Class A office building, 120 residential condominium
units, and a 1,046-space parking structure) located in Honolulu,
Hawaii. The loan is interest only for its entire term. Moody's
current shadow rating is Baa3, the same as at securitization.
The three largest conduit exposures represent 15.7% of the pool.
The largest conduit loan is the One River Place Apartments Loan
($199.5 million - 7.0%), which is secured by a 40-story, 921-unit
Class A multifamily tower located in New York City. The property
also includes 42,000 square feet of ground floor retail space.
Moody's LTV is 91.1%, essentially the same as at securitization.
The second largest conduit loan is the Pier 39 Loan ($153.0
million - 5.4%), which is secured by the leasehold interest in a
242,283 square foot specialty shopping center located in San
Francisco, California. The land is leased from the City and
County of San Francisco until 2042. There are no lease renewals.
Since securitization revenues have increased but operating
expenses have been greater. Moody's LTV is in excess of 100.0%,
compared to 99.0% at securitization.
The third largest conduit loan is the Westbury Plaza Loan ($93.6
million -- 3.3%), which is secured by a 399,000 square foot retail
center located in Westbury, Nassau County, New York. Moody's LTV
is in excess of 100.0%, the same as at securitization.
KEY COMMERCIAL: Moody's Rates Class K Certificates at B1
--------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to
securities issued by Key Commercial Mortgage Securities Trust
2007-SL1.
The provisional ratings issued on April 19, 2007 have been
replaced with these definitive ratings:
- Class A-1, $36,700,000, rated Aaa
- Class A-2, $91,723,000, rated Aaa
- Class B, $5,344,000, rated Aa2
- Class C, $5,640,000, rated A2
- Class D, $4,750,000, rated Baa1
- Class E, $2,079,000, rated Baa2
- Class F, $1,781,000, rated Baa3
- Class G, $1,187,000, rated Ba1
- Class H, $1,188,000, rated Ba2
- Class J, $891,000, rated Ba3
- Class K, $593,000, rated B1
- Class L, $4,750,836, rated NR
- Class X, $237,499,836*, rated Aaa
* Approximate notional amount
Moody's has assigned definitive ratings to this additional class
of certificates:
- Class A-1A, $80,873,000, rated Aaa
KNIGHT RIDDER: S&P Removes Neg. Watch and Lowers Ratings to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
senior unsecured debt assumed by The McClatchy Co. from Knight
Ridder Inc. to 'BB-' from 'BB+'. The ratings were removed from
CreditWatch, where they were placed with negative implications on
May 3, 2007.
At the same time, all other ratings on McClatchy, including the
'BB+' corporate credit rating, were affirmed. The rating outlook
is stable.
The rating downgrade on the assumed unsecured debt follows the
execution of the guarantees in support of McClatchy's bank loan on
May 4, 2007, according to section 6.12 of the bank agreement. As
a result, the credit facilities have a higher priority claim to
the value of the company than the unsecured notes, which will not
benefit from a guarantee from the subsidiaries. Ratings were
lowered by two notches because of the amount of guaranteed debt
ahead of the unsecured notes.
Ratings List
Ratings Affirmed
The McClatchy Co.
Corp Credit Rating BB+/Stable/--
Bank Loan BB+
Downgraded; Off CreditWatch
To From
Knight Ridder Inc.
$200M 9.875% debs due 04/15/2009 BB- BB+/Watch Neg
$100M 7.15% debs due 11/01/2027 BB- BB+/Watch Neg
$100M 6.625% nts due 11/01/2007 BB- BB+/Watch Neg
$400M 5.75% nts due 09/01/2017 BB- BB+/Watch Neg
$300M 7.125% nts due 06/01/2011 BB- BB+/Watch Neg
$200M 4.625% nts due 11/01/2014 BB- BB+/Watch Neg
$300M 6.875% debs due 03/15/2029 BB- BB+/Watch Neg
LAZARD LTD: March 31 Balance Sheet Upside-Down by $206.8 Million
----------------------------------------------------------------
Lazard Ltd. reported total assets of $2.6 billion, total
liabilities of $2.8 billion, and minority interest at
$55.7 million, resulting in a total stockholders' deficit of
$206.8 million as of March 31, 2007.
Total revenue for the first quarter ended March 31, 2007, was
$398.6 million, as compared with total revenue for the first
quarter ended March 31, 2006, of $355 million. Net income
increased to $26.4 million, as compared with $19.7 million for the
first quarter of 2006.
Operating revenue increased to $388.2 million, as compared with
$351.1 million for the first quarter of 2006, resulting primarily
from growth in the company's Asset Management business. Operating
income was $78.3 million, as compared with $78.1 million for the
first quarter of 2006.
"We have made impressive achievements in our Asset Management
business with record assets under management of $124.9 billion and
record quarterly positive net inflows, with $11.6 billion in new
assets in the quarter. Our three-year plan for Asset Management
has been a success and progress is continuing," said Bruce
Wasserstein, chairman and chief executive officer of Lazard Ltd.
"In our Financial Advisory business, we continue to serve as
independent, strategic advisors on some of the most important
cross-border, global and domestic M&A and restructuring
assignments around the world. We are actively pursuing expanding
Financial Advisory by geography and adjacent businesses through
acquisitions, investments and new hires. We also are actively
pursuing expansion of our Asset Management business through
acquisitions, new investment products, including merchant banking
investments, making new hires of individuals and teams, and
upgrading our current platforms. We continue to invest for future
growth and feel that the firm is well positioned."
"Our market position is strong in both our Financial Advisory and
Asset Management businesses," noted Steven J. Golub, Lazard's
vice-chairman. "Our Financial Advisory backlog continues to
build, and we are the strategic advisor on many high-profile,
precedent-setting transactions, including the restructuring of New
Century Financial, a leader in sub-prime lending; Barclays' $91.3
billion merger with ABN Amro, the largest bank merger in history;
Acciona in its agreement with Enel concerning their EUR 43.7
billion transaction with respect to Endesa; and TXU's $45 billion
sale to a private equity group, the largest-ever LBO. We continue
to work on other major transactions such as Mellon Financial's
$16.5 billion merger with The Bank of New York, KeySpan's $11.8
billion sale to National Grid, the Chicago Board of Trade's merger
discussions and American Standard's plan to separate its
businesses. We continue to add senior talent, such as executive
Donald G. Drapkin, who joined us last week."
"Our results are best measured on an annual basis rather than on
any single quarter," added Mr. Golub. "This year our backlog for
completion of transactions seems to be weighted toward the second
half of the year. We continue to focus on controlling costs. The
increase in our non-compensation expense was impacted by, among
other factors, one-time cost recoveries in the first quarter of
2006. We remain confident that the operating leverage in our
business model will continue to yield long-term positive results."
About Lazard Ltd.
Lazard Ltd. (NYSE: LAZ) -- http://www.lazard.com/-- a preeminent
financial advisory and asset management firm operates from 29
cities across 16 countries in North America, Europe, Asia,
Australia and South America. With origins dating back to 1848,
the firm provides advice on mergers and acquisitions,
restructuring and capital raising, as well as asset management
services to corporations, partnerships, institutions, governments,
and individuals.
* * *
Lazard's balance sheet as of Dec. 31, 2006, showed total assets of
$3.2 billion and total liabilities of $3.4 billion, resulting in a
total stockholders' deficit of $240.3 million.
LB-UBS COMMERCIAL: Fitch Holds Low-B Ratings on 3 2003-C5 Certs.
----------------------------------------------------------------
Fitch Ratings upgrades LB-UBS commercial mortgage pass-through
certificates, series 2003-C5, as:
-- $15.8 million class H to 'A' from 'A-';
-- $10.5 million class J to 'A-' from 'BBB+';
-- $14 million class K to 'BBB+' from 'BBB'.
Additionally, Fitch affirms the ratings on these classes:
-- $55.9 million class A-1 at 'AAA';
-- $503 million class A-2 at 'AAA';
-- $220 million class A-3 at 'AAA';
-- $328.1 million class A-4 at 'AAA';
-- Interest-only (I/O) class X-CL at 'AAA;
-- Interest-only (I/O) class X-CP at 'AAA;
-- $22.8 million class B at 'AAA';
-- $24.6 million class C at 'AAA';
-- $15.8 million class D at 'AAA';
-- $15.8 million class E at 'AAA';
-- $22.8 million class F at 'AA';
-- $17.6 million class G at 'A+';
-- $12.3 million class L at 'BB+';
-- $5.3 million class M at 'BB';
-- $3.5 million class N at 'BB-'.
Fitch does not rate classes P, Q, S or T.
The upgrades are due to defeasance, stable pool performance and
scheduled amortization since the last review. As of the April
2007 distribution date, the pool's aggregate principal balance has
decreased 6.3% to $1.32 billion from $1.41 billion at issuance.
Twelve loans (32.6%) have defeased, including two credit-assessed
loans. There have been no losses to the trust.
There are two specially serviced loans, both with expected losses.
The largest specially serviced asset (0.3%) is a multifamily
property in Dallas, Texas, which is real estate owned (REO) and is
under contract for sale. The other specially serviced loan (0.2%)
is secured a multifamily property located in Augusta, Georgia.
The loan was transferred to special servicing in February 2007 due
to delinquency. All expected losses are anticipated to be fully
absorbed by the non-rated class T.
Two of the original eight credit assessed loans have defeased; the
John Hancock Tower (12.2%) and 70 Hudson Street (6.0%). The
remaining non-defeased loans maintain investment grade credit
assessments. Fitch reviewed year-end 2006 operating statement
analysis reports and other performance information provided by the
master servicer.
The largest credit assessed loan, the Westfield Shoppingtown
Portfolio (11.2%), is secured by two cross-collateralized cross-
defaulted regional malls. Westfield Shoppingtown Plaza Bonita
consists of 429,474 square feet (sf) of an 820,353sf enclosed
regional mall located in National City, California. Westfield
Shoppingtown Vancouver consists of 413,372sf of an 883,219sf
regional mall located in Vancouver, Washington. As of year-end
(YE) 2006 the servicer-provided debt-service coverage (DSCR) for
the portfolio has increased to 1.61 times (x) compared to 1.40x at
issuance. The mall's overall occupancy as of YE 2006 was slightly
improved at 88% compared to 86.3% at issuance.
The other five credit assessed loans, GGP Oakwood Mall (4.0%), GGP
Mall of the Bluffs (3.0%), GGP Birchwood Mall (3.0%), The Mall at
Steamtown (3.0%) and Pierre Bossier Mall (2.8%) have had stable or
improved performance since issuance.
LOCATEPLUS HOLDINGS: Livingston Haynes Raises Going Concern Doubt
-----------------------------------------------------------------
Livingston & Haynes PC, in Wellesley, Mass., raised substantial
doubt about LocatePLUS Holdings Corp.'s ability to continue as a
going concern after auditing the company's financial statements
for the years ended Dec. 31, 2006, and 2005. The auditor pointed
to the company's substantial net losses and accumulated deficit at
Dec. 31, 2006.
The company posted a net loss of $5,961,834 on revenues of
$12,250,073 for the year ended Dec. 31, 2006, as compared with a
net loss of $5,600,176 on revenues of $11,613,037 in the prior
year.
At Dec. 31, 2005, the company's balance sheet showed $5,670,815
total assets and $6,174,006 total liabilities resulting to
$503,191 stockholders' deficit. The company's balance sheet also
showed strained liquidity with $1,576,038 in total current assets
and $6,163,877 in total current liabilities.
A full-text copy of the company's 2006 annual report is available
for free at http://researcharchives.com/t/s?1d03
About LocatePLUS
Based in Beverly, Massachusetts, LocatePLUS Holdings Corp.
-- http://www.locateplus.com/-- and its subsidiaries are
industry-leading providers of public information and investigative
solutions that are used in homeland security, anti-terrorism and
crime fighting initiatives. The Company's proprietary, Internet-
accessible database is marketed to business-to-business and
business-to-government sectors worldwide.
LONGPOINT RE: S&P Rates $500 Million Class A Notes at BB+
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' senior
secured debt rating to Longpoint Re Ltd.'s $500 million Class A
Series 2007-I variable-rate note issuance.
The notes are the initial offering under Longpoint Re's variable-
rate note program. Longpoint Re is a Cayman Islands exempted
company licensed as a Class B insurer in the Cayman Islands.
Travelers Indemnity Co. (AA-/Stable/--), the ceding insurer and a
wholly owned subsidiary of Travelers Cos. Inc., entered into a
reinsurance agreement with Longpoint Re.
"The rating on the series is based on the probability of
attachment as modeled by Risk Management Solutions," said Standard
& Poor's credit analyst Gary Martucci. RMS's Risklink U.S.
Hurricane Model Version 6.0 was used to determine the probability
of attachment of the series. The average annualized probability
of attachment for the notes is 98 basis points.
The notes are exposed to first and subsequent Northeast U.S.
hurricanes on a per-occurrence basis and will cover losses between
the initial trigger amount of $2.25 billion and the initial
exhaustion amount of $3.00 billion.
The reinsurance agreement, which is effectively supported by the
proceeds from the issuance of the notes, will provide the ceding
insurer with a source of modified index-based catastrophe coverage
for hurricanes in the covered area--Connecticut, Maine,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania,
Rhode Island, and Vermont--over a three-year risk period.
MCCLATCHY CO: S&P Lowers Rating on Senior Debt to BB- from BB+
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
senior unsecured debt assumed by The McClatchy Co. from Knight
Ridder Inc. to 'BB-' from 'BB+'. The ratings were removed from
CreditWatch, where they were placed with negative implications on
May 3, 2007.
At the same time, all other ratings on McClatchy, including the
'BB+' corporate credit rating, were affirmed. The rating outlook
is stable.
The rating downgrade on the assumed unsecured debt follows the
execution of the guarantees in support of McClatchy's bank loan on
May 4, 2007, according to section 6.12 of the bank agreement. As
a result, the credit facilities have a higher priority claim to
the value of the company than the unsecured notes, which will not
benefit from a guarantee from the subsidiaries. Ratings were
lowered by two notches because of the amount of guaranteed debt
ahead of the unsecured notes.
Ratings List
Ratings Affirmed
The McClatchy Co.
Corp Credit Rating BB+/Stable/--
Bank Loan BB+
Downgraded; Off CreditWatch
To From
Knight Ridder Inc.
$200M 9.875% debs due 04/15/2009 BB- BB+/Watch Neg
$100M 7.15% debs due 11/01/2027 BB- BB+/Watch Neg
$100M 6.625% nts due 11/01/2007 BB- BB+/Watch Neg
$400M 5.75% nts due 09/01/2017 BB- BB+/Watch Neg
$300M 7.125% nts due 06/01/2011 BB- BB+/Watch Neg
$200M 4.625% nts due 11/01/2014 BB- BB+/Watch Neg
$300M 6.875% debs due 03/15/2029 BB- BB+/Watch Neg
MEDISTEM LABORATORIES: Posts $539,197 Net Loss in Qtr Ended Mar 31
------------------------------------------------------------------
Medistem Laboratories Inc. reported a net loss of $539,197 on
revenues of $477,330 for the first quarter ended March 31, 2007,
compared with a net loss of $1,377,034 on zero revenues for the
same period ended March 31, 2006.
Revenues for the first quarter of 2007 consist of $470,130 of fees
generated by ICM - Costa Rica, for patient treatments in Costa
Rica and royalties of $7,200 from patient treatments performed by
ICM - Mexico. No revenues were generated in the first quarter of
2006 as the licensee clinics had not yet opened.
At March 31, 2007, the company's balance sheet showed $1,541,045
in total assets, $177,652 in total liabilities, and $1,363,393 in
total stockholders' equity.
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?1eb3
Going Concern Doubt
Malone & Bailey P.C., in Houston, expressed substantial doubt
about Medistem Laboratories Inc.'s ability to continue as a going
concern after auditing the company's financial statements for the
year ended Dec. 31, 2006. The auditing firm pointed to the
company's limited operations and further cited that the company
has not commenced planned principal operations.
About Medistem Laboratories
Headquartered in Tempe, Arizona, Medistem Laboratories Inc.
(OTC BB: MDSM.OB) -- http://www.medisteminc.com/-- is a
biotechnology company committed to the creation and
commercialization of advanced medical therapies based on non-
controversial adult stem cells.
MEGA BRANDS: Earns $25.3 Million in Full Year Ended December 31
---------------------------------------------------------------
Mega Brands Inc. reported that for the full year ended Dec. 31,
2006, its consolidated net sales increased to $547.3 million, as
compared with $384.9 million in 2005. Net earnings for the full
year 2006 were $25.3 million as compared with $39.6 million for
the full year 2005.
Net sales in North America increased to $397.8 million, as
compared with $254.3 million in 2005, mainly as a result of the
inclusion of MEGA Brands America for the full year in 2006
compared to about five months in 2005. International net sales
were up to $149.6 million compared to $130.5 million in 2005. The
company increased its market share in the construction toy
category in virtually all international markets in 2006 and gained
the leadership position in this category in the U.K. and Spain for
the first time.
"All things considered, we are pleased with our operating
performance in 2006, with diluted EPS before Specified Items of
$1.56, low ending inventories of our products at retail and the
integration of MEGA Brands America," stated Marc Bertrand,
president and chief executive officer. "We overcame a number of
unexpected challenges and positioned MEGA Brands for continued
profitable growth with a strong platform of exciting brands."
"Sales momentum entering 2007 is strong, driven by several first-
quarter product launches and the May releases of Pirates of the
Caribbean 3 and Spider-Man 3," added Mr. Bertrand. "For 2007, we
see continued growth and earnings that we expect to be supported
by $7-10 million of operating synergies resulting from the
integration of MEGA Brands America in 2006."
Fourth Quarter Results
Consolidated net sales in the fourth quarter of 2006 were
$164.8 million, as compared with $166.2 million in the fourth
quarter of 2005. Loss from operations in the fourth quarter of
2006 was $1.3 million, as compared with earnings from operations
of $31.7 million in the fourth quarter of 2005. Net earnings in
the fourth quarter of 2006 were $2.8 million, as compared with net
earnings of $20.9 million in the fourth quarter of 2005.
Liquidity and Capital Resources
Cash flows from operating activities before changes in non-cash
working capital items were $3 million in the fourth quarter of
2006, as compared with $30.5 million for the same period in 2005,
mainly due to Specified Items recorded during the fourth quarter
of 2006. After changes in non-cash working capital items,
operating cash flow was $28.7 million, as compared with
$11 million in the fourth quarter of 2005.
As at Dec. 31, 2006, the company held cash and cash equivalents of
$13.7 million. Working capital stood at $124.7 million as at Dec.
31, 2006, as compared with $101.6 million at the end of 2005.
This increase is due mainly to higher inventories at the end of
2006.
Long-term debt at the end of 2006 was $312 million, as compared
with $301 million in 2005. As at Dec. 31, 2006, the company's
debt was comprised of $14.4 million under its Term A facility
maturing in 2009, $256.8 million under its Term B facility
maturing in 2012 and $40 million drawn against its $120 million
revolving credit facility. The company was in compliance with all
covenants of its credit facility as at Dec. 31, 2006.
As of Dec. 31, 2006, the company posted total assets of
$800.4 million and total liabilities of $551 million, resulting
in a total shareholders' equity of $249.4 million.
About Mega Brands
Montreal, Canada-based Mega Brands Inc., formerly Mega Bloks Inc.,
(TSX: MB) -- http://www.megabloks.com/-- distributes a range of
toys, puzzles, and craft-based products worldwide. The company
has offices in Mexico and Belgium.
* * *
As reported in the Troubled Company Reporter-Europe on April 25,
2007, Standard & Poor's Ratings Services placed its 'BB-' long-
term corporate credit and bank loan ratings on MEGA Brands Inc. on
CreditWatch with negative implications. The bank loan's '2'
recovery rating was also placed on CreditWatch.
MEZZ CAP: Fitch Holds Low-B Ratings on Three Certificate Classes
----------------------------------------------------------------
Fitch Ratings upgrades Mezz Cap's commercial mortgage pass-through
certificates, series 2004-C1, as:
-- $2.8 million class B to 'AA+' from 'AA';
-- $2.3 million class C to 'AA-' from 'A+';
-- $2.8 million class D to 'A-' from 'BBB+';
-- $1.5 million class E to 'BBB+' from 'BBB';
-- $1.6 million class F to 'BBB+' from 'BBB'.
In addition, Fitch affirms the ratings on these classes:
-- $28.6 million class A at 'AAA';
-- Interest-only class X at 'AAA';
-- $1.1 million class G at 'BB+';
-- $4.4 million class H at 'B';
-- $0.5 million class J at 'B-'.
Fitch does not rate the $3.1 million class K certificates.
The upgrades reflect 7.6% additional defeasance and scheduled
amortization since Fitch's last rating action. As of the April
2007 remittance report, the pool's aggregate certificate balance
has decreased 3.8% to $48.6 million from $50.5 million at
issuance. Fifteen loans (20%) have defeased.
The mortgage loans consist of two notes -- the A note, or senior
component, which is not included in this trust's mortgage assets,
and the B note. The B notes in this pool consist of subordinate
interests in the first mortgage loans. All loans are secured by
traditional commercial real estate property types and are subject
to standard intercreditor agreements that limit the rights and
remedies of the B note holder in the event of default and upon
refinancing. In a default, the B notes are likely to suffer
higher losses due to their subordinate positions.
One asset (0.6%) is currently specially serviced. The asset, a
160-unit multifamily property located in Dallas, Texas, is
currently real estate owned and is associated with an asset in the
CSFB 2002-CKS4 transaction. The special servicer is currently
marketing the asset. The most recent appraisal indicates losses.
Fitch does not anticipate any recovery of the B note. Fitch's
anticipated losses will be absorbed by the class K certificates.
MGM MIRAGE: Moody's Rates $500 Million Senior Notes Issue at Ba2
----------------------------------------------------------------
Moody's Investors Service assigned a Ba2, LGD-3 / 43% rating to
MGM Mirage's recently announced issue of $500 million senior
unsecured guaranteed notes due 2016. All existing ratings have
been affirmed and the outlook is negative. The new notes will
rank pari-passu with existing senior unsecured debt and proceeds
of the notes will be used to reduce borrowings under the revolver.
Though the note issuance is a positive to MGM's liquidity profile,
the SGL-3 rating has been affirmed because the size of the
issuance will not be enough to offset the 2007 required
amortizations of $1.4 billion coupled with capital spending that
MGM has planned for CityCenter, the Detroit permanent facility
(which is scheduled to open in the fourth quarter of 2007), $575
million of Las Vegas land purchases and the $160 million M Resort
investment. SGL rating improvement to SGL-2 is possible if MGM
refinances some of its additional upcoming amortizations, though
the level and timing of new debt issuance will factor heavily into
the likelihood of SGL rating upgrade.
The last rating action occurred April 26, 2007 when the rating
outlook was changed to negative from stable.
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.
MICHELS BUILDERS: Case Summary & 38 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Michels Builders, Inc.
1013 2nd Street Southeast
Faribault, MN 55021
Bankruptcy Case No.: 07-31596
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Jason L. Michels 07-31598
Type of Business: The Debtor is a siding contractor.
Chapter 11 Petition Date: May 8, 2007
Court: District of Minnesota (St. Paul)
Judge: Gregory F. Kishel
Debtors' Counsel: Ralph Mitchell, Esq.
Lapp Libra Thomson Stoebner & Pusch
One Financial Plaza, Suite 2500
120 South 6th Street
Minpeapolis, MN 55402
Tel: (612) 338-5815
Total Assets Total Debts
------------ -----------
Michels Builders, Inc. $640,000 $1,055,425
Jason L. Michels $2,550,300 $2,891,798
A. Michels Builders, Inc's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Premier Bank Minnesota two notes $249,997
417 Northwest 4th Street
Faribault, MN 55021
Met Con Lumber & Hardware, mechanic's lien $85,704
Inc.
1515 Northwest, 30th Street
Faribault, MN 55021
Floor to Ceiling services $57,500
550 Wilson Avenue
Faribault, MN 55021
Quality Appliance, Inc. $14,000
Dream Home Builders services $13,000
Frana Masonry services $11,253
Ford Plumbing & Heating mechanic's $11,000
lien
Ronelle C. Deschamp $10,000
Park Electric, Inc. services $9,773
Xcel Energy power $9,184
Hilpipe Heating & Air services $7,696
Conditioning
Jason Michels loan $7,500
City & Lakes Disposal solid waste $4,314
removal
The Thomas Taylor Co. surveying $3,940
C.S.T. Co., Inc. collector for $2,550
Sherwin Williams
Co.
Elliot Sellner, C.P.A. preparation of $1,919
2006 tax returns
Keith R. Nelson legal services $1,785
Richards Seamless Gutter, Inc. services $1,500
Lloyd and Joyce Montanye security deposit $925
Lake Countryland Professionals surveying $690
B. Jason L. Michels's 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The State Bank of Faribault personal $429,086
428 Central Avenue guaranty
P.O. Box 429
Faribault, MN 55021
Jeannie M. Michels notes $110,000
23008 Nevajo Street,
Northwest
St. Francis, MN 55070
F.T.C. Faribault, Inc. goods and $56,789
550 Wilson Avenue services
Faribault, MN 55021
U.S.A. Funding Corp. mortgage; $31,000
value of
security:
$162,000
Encore Receivable Management, RE G.E. Money $27,192
Inc. Bank
G.E. Money Bank credit card $27,000
Wells Fargo Master Card credit card $21,679
James W. Ingram services $12,000
LaCanne Paving, L.L.C. mechanics lien $12,000
Wells Fargo Bank line of credit $11,892
Frana Masonry and Excavating mechanic's lien $11,000
Ford Plumbing & Heating $11,000
Ronelle C. Deschamp $10,000
Amazon.Com Visa Change credit card $8,157
Chase Visa credit card $7,917
Chase credit card $7,500
XCel Energy power $5,820
Blue Cross Blue Shield of annual health $5,448
Minnesota insurance
premium
NEFF RENTAL: Commences $325MM Cash Tender Offer with Neff Finance
-----------------------------------------------------------------
Neff Rental LLC and Neff Finance Corp. have commenced cash
tender offers and consent solicitations for any and all of their
$245 million in aggregate principal amount of 11 1/4% Second
Priority Senior Secured Notes due 2012 (CUSIP No. 640096AC7) and
any and all of their $80 million in aggregate principal
amount of 13% Senior Subordinated Notes due 2013.
The table summarizes terms material to the determination of the
total consideration to be received in the tender offer per $1,000
principal amount of Senior Notes or Senior Subordinated Notes, as
applicable, validly tendered and not withdrawn prior to 5:00 p.m.,
New York City time, on May 17, 2007:
a) 11 1/4% Second Priority Senior Secured Notes due 2012
- CUSIP - 640096AC7
- 4-7/8% U.S. T. Note due May 15, 2009 - Reference Security
- PX5 Bloomberg - Reference Page
- 50 bps - fixed spread
- $30 - consent payment per $1,000 principal amount tendered
prior to the Consent Payment Deadline and accepted for
purchase. *
b) 13% Senior Subordinated Notes due 2013
- CUSIP - n/a
- 3-5/8% U.S. T. Note due June 30, 2007 - reference security
- PX3 - Bloomberg reference page
- 50 bps - fixed spread
- $30 - consent payment per $1,000 principal amount tendered
prior to the Consent Payment Deadline and accepted for
purchase. *
* The Consent Payment is included in and not in addition to the
Total Consideration.
The total consideration will be calculated at 2:00 p.m., New York
City time, on a date, which is at least 10 business days prior to
the expiration date, which is scheduled for 12:00 midnight, New
York City time, on June 1, 2007.
Holders who validly tender their Notes by the Consent Payment
Deadline will receive payment on the initial payment date, which
is expected to be prior to the Expiration Date. Holders who
tender their Notes after the Consent Payment Deadline but on or
prior to the Expiration Date will receive the total consideration
referred to above per $1,000 principal amount of Notes validly
tendered and not withdrawn, less the consent payment of $30 per
$1,000 principal amount of Notes.
In connection with the Offers, the companies are soliciting
consents to certain proposed amendments to eliminate substantially
all of the restrictive covenants in the indentures governing each
series of Notes. Holders may not tender their Notes without
delivering consents or deliver consents without tendering their
Notes.
The companies' obligation to accept for purchase, and to pay for,
Notes validly tendered pursuant to the Offers is subject to the
satisfaction of certain conditions including:
(1) receipt of tenders from holders of 66-2/3% in aggregate
principal amount of the outstanding Senior Notes and
receipt of tenders from holders of at least a majority in
aggregate principal amount of the outstanding Senior
Subordinated Notes, and the
execution of the supplemental indentures related to each
series of Notes;
(2) the consummation of the proposed merger of LYN Acquisition
Corp., which is an affiliate of Lightyear Capital LLC, with
and into Neff Corp., the parent company of the Companies,
pursuant to the Agreement and Plan of Merger, dated as of
March 31, 2007, by and among LYN Holdings LLC, LYN Holdings
Corp., Merger Sub and Neff Corp.;
(3) Merger Sub or its affiliates having obtained an aggregate
of $732.5 million of debt financing on the terms and
conditions contained in their debt financing commitments;
and
(4) certain other customary conditions.
The companies reserve the right to:
(1) waive, where possible, any and all conditions of the
Offers;
(2) extend the Offers;
(3) otherwise amend the Offers in any respect; or
(4) terminate the Offers.
Complete terms and conditions of the Offers are described in the
Offer to Purchase and Consent Solicitation Statement relating to
the Senior Notes and the Offer to Purchase and Consent
Solicitation Statement relating to the Senior Subordinated Notes,
each of which is dated May 4, 2007, and copies of which may be
obtained by contacting the information agent for the offers:
D.F. King & Co., Inc.
Tel: (212) 269-5550 (collect), or
(800) 628-8536 (U.S. toll-free)
Additional information concerning the Offers may be obtained by
contacting the exclusive dealer manager and solicitation
Agent:
Banc of America Securities LLC
High Yield Special Products
Tel: (704) 388-9217 (collect), or
(888) 292-0070 (U.S. toll-free)
About Neff Rental LLC
Headquartered in Miami, Florida, Neff Rental LLC is one of the
nation's construction and industrial equipment rental companies,
operating through its subsidiary Neff Rental Inc. Neff's primary
focus is in ground-engaging equipment and its fleet includes the
latest earth moving equipment, compressors, generators and lifts
from leading manufacturers. Neff operates through its network
branches located in the Southeastern, Mid-Atlantic, Central and
Western regions of the United States.
* * *
As reported in the Troubled Company Reporter on April 5, 2007,
Moody's Investors Service is reviewing the ratings of Neff Rental
LLC for possible downgrade in response to the Neff Corp.'s report
that it has signed a definitive agreement to be acquired by Light
year Capital LLC, a private equity firm, in a transaction valued
at approximately $900 million including the assumption of certain
liabilities. The ratings under review were: (i) corporate family
rating, B3; (ii) probability of default, B3; and (iii) second
priority senior secured notes, Caa1, LGD4, 64%.
NEW ENGLAND WINGS: Wants Five Affiliates' Chap. 11 Cases Dismissed
------------------------------------------------------------------
New England Wings Inc. asks the U.S. Bankruptcy Court for the
District of Massachusetts in Boston to dismiss the chapter 11
cases of five of its restaurant locations contending they can no
longer be rehabilitated nor liquidated because those restaurants
either have no assets or the assets are covered by liens, Bill
Rochelle of Bloomberg News reported Wednesday.
New England Wings Inc. together with 12 debtor-affiliates filed
separate chapter 11 petitions (Bankr. D. Mass. Case No. 06-13542)
on October 6, 2006. Each of the Debtors is a franchise of the
Atlanta-based, restaurant chain Hooters of America Inc. Melvin S.
Hoffman, Esq. at Looney & Grossman, LLP represents the Debtors in
their restructuring efforts.
According to Mr. Rochelle, when the companies sought protection
from their creditors, they listed assets of $1.2 million and debt
of $5.9 million.
NORTHWEST AIRLINES: Releases Unofficial Results of Plan Voting
--------------------------------------------------------------
Northwest Airlines Corporation reports that a preliminary tally of
votes indicates that its Plan of Reorganization has been approved
overwhelmingly by its creditors.
The unofficial vote tally indicates that 96.9% of the airline's
creditors who voted, representing 98.4% of the dollar amount of
the claims that voted, approved the Northwest Plan. The final
voting results will be filed late this week with the U.S.
Bankruptcy Court for the Southern District of New York, the court
overseeing Northwest's restructuring.
Doug Steenland, president and chief executive officer of Northwest
Airlines, said, "We appreciate our creditors' confidence in the
Northwest Plan of Reorganization, which provides creditors with a
stake in Northwest Airlines going forward and represents a
substantial recovery on their unsecured claims."
"Today's creditor approval is another step in Northwest's efforts
to complete its restructuring next month and to move forward as a
strong, fully-competitive airline. In recent weeks, we have
announced the composition of our new board of directors, indicated
a desire to list our new common stock on the New York Stock
Exchange and reported a first quarter profit, excluding unusual
and reorganization items, for the first time since 1998."
A confirmation hearing on the airline's Plan of Reorganization is
scheduled to begin on May 16, 2007.
Northwest received Bankruptcy Court approval of its Disclosure
Statement on March 31, 2007 and was authorized by the court to
solicit creditor approval of its plan. Creditor voting ended
May 7, 2007.
Northwest Airlines has filed an application with the New York
Stock Exchange to trade its new common stock under the ticker
symbol "NWA" after the airline emerges from Chapter 11 bankruptcy
protection.
Northwest added that upon the effective date of its Plan of
Reorganization, the outstanding common stock, currently traded
under the ticker symbol NWACQ.PK, and the preferred stock of the
company will be cancelled for no consideration, and, therefore,
the company's existing stockholders will no longer have any
interest as stockholders in the company.
About Northwest Airlines
Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.
Plan Update
On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11
Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan &
Disclosure Statement. The Court approved the adequacy of the
Debtors' Disclosure Statement on March 26, 2007. The hearing to
consider confirmation of the Debtors' Plan is set for May 16,
2007.
NTK HOLDINGS: Earns $57.7 Million in Year Ended December 31
-----------------------------------------------------------
NTK Holdings Inc. disclosed 2006 financial results. Key financial
highlights from continuing operations for 2006 included:
-- Net sales of $2.2 billion, as compared with the
$1.9 billion recorded in 2005;
-- Operating earnings of $264.5 million, as compared with
$236.9 million in 2005. Operating earnings for 2006
includes $14 million, net other income;
-- Depreciation and amortization expense of $61.2 million,
as compared with $45.9 million in 2005;
-- Acquisitions contributed about $213 million in Net Sales
and $23 million to operating earnings for the year ended
Dec. 31, 2006; and
-- Net earnings for the year 2006 was $57.7 million, as
compared with $56.9 million for the year 2005.
Key financial highlights from continuing operations for the fourth
quarter of 2006 included:
-- Net sales of $541 million, as compared with the
$503 million recorded in the fourth quarter of 2005;
-- Operating earnings of $35.5 million, as compared with
$69.7 million in the fourth quarter of 2005. Operating
earnings for the fourth quarter of 2006 includes
$13.9 million, net other expense;
-- Depreciation and amortization expense of $17 million
as compared with $11.6 million in last year's fourth
quarter; and
-- Net loss was $9.2 million for the fourth quarter 2006, as
compared with a net earnings of $18.4 million for the
fourth quarter 2005.
As of Dec. 31, 2006, NTK Holdings had total assets of about
$2.6 billion and total current liabilities of $515.2 million,
other liabilities of $164.7 million and notes, mortgage notes and
obligations payable, less current maturities of $1.9 billion,
resulting in a total stockholders' investment of $72.8 million.
The company had about $57 million in unrestricted cash and cash
equivalents and had $10 million of borrowings outstanding under
its $200-million revolving credit facility as of Dec. 31, 2006.
Various Acquisitions
On Dec. 12, 2006, NTK Holdings acquired Gefen Inc. of Woodland
Hills, California, to expand its technology products offering.
Gefen designs and sells audio and video products, which extend,
switch, distribute and convert signals in a variety of formats,
including high definition for both the residential and commercial
markets.
On Nov. 11, 2006, NTK Holdings acquired Zephyr Corporation and
Pacific Zephyr Range Hood Inc. each located in San Francisco,
California. Zephyr and Pacific design and sell upscale built-in
kitchen range hoods for residential properties.
A full-text copy of the company's 2006 annual report is available
for free at http://ResearchArchives.com/t/s?1eae
About NTK Holdings
NTK Holdings Inc., the parent company of Nortek Holdings Inc. and
Nortek Inc., -- http://www.nortek-inc.com/-- manufactures
innovative, branded residential and commercial ventilation, HVAC
and home technology convenience and security products. NTK
Holdings and Nortek offer range hoods, bath fans, indoor air
quality systems, medicine cabinets and central vacuums, heating
and air conditioning systems, and home technology offerings,
including audio, video, access control, security and other
products.
* * *
NTK Holdings Inc.'s $403 million senior discount notes, due 2014,
carry Moody's rating at Caa1, LGD6, 91%. The company also carries
Moody's B2 Corporate Family Rating and B2 Probability of Default
Rating. The outlook is negative.
PACIFIC SEACRAFT: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Pacific Seacraft Corporation
1301 East Orangethorpe Avenue
Fullerton, CA 92831
Bankruptcy Case No.: 07-11326
Type of Business: The Debtor builds cruising sail and motoryachts
and trawlers. See
http://www.pacificseacraft.com/
Chapter 11 Petition Date: May 8, 2007
Court: Central District Of California (Santa Ana)
Judge: Theodor Albert
Debtor's Counsel: Josefina Fernandez Mcevoy, Esq.
K&L Gates
10100 Santa Monica Boulevard 7th Floor
Los Angeles, CA 90067
Tel: (310) 552-5000
Estimated Assets: $100,000 to $1 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not submit a list of its largest unsecured
creditors.
PENNSYLVANIA HIGHER: Stable Enrollment Cues S&P's Positive Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Pennsylvania Higher Education Facilities Authority's debt, issued
for Bryn Mawr College, to positive from stable, reflecting the
potential for a higher rating if the college's solid demand
metrics and financial results continue. At the same time,
Standard & Poor's assigned its 'AA-' rating to the authority's
$23.29 million revenue bonds, series 2007, and affirmed its 'AA-'
rating on the outstanding debt, issued for Bryn Mawr College.
"The positive outlook reflects our belief that Bryn Mawr College's
continued stable enrollment, maintenance of a strong student
demand profile, continued positive performance, and solid
liquidity relative to debt and expenses, could lead to a higher
rating within the next two to three years," said Standard & Poor's
credit analyst Mary Peloquin-Dodd.
The 'AA-' rating reflects the college's stable enrollment, highly
selective admissions, and strong student quality; and good
financial performance, evidenced by consistent increases in
unrestricted net assets on a GAAP-basis and management's
expectation that the performance will remain strong for fiscal
2007 and 2008. The rating also reflects Bryn Mawr College's
solid liquidity levels, with expendable resources of $484 million
at May 31, 2006, providing very strong coverage of 4.6x annual
operating expenses and 5.7x pro forma debt; and a low level of
debt relative to the high endowment, despite two large bullet
maturities on existing debt.
Proceeds of the series 2007 bonds will be used to current refund a
portion of the college's outstanding series 1997 revenue bonds,
fund the costs of terminating a series 1997 swaption agreement,
and pay costs of issuance and insurance. The refunding is being
done for economic savings. The college has no current plans for
additional debt, but is considering bridge financing and
renovation of various facilities on campus.
The revised rating outlook affects approximately $78.57 million in
rated debt.
PNC COMMERCIAL: Fitch Junks Rating on $7 Million Class M Certs.
---------------------------------------------------------------
Fitch Ratings downgrades and assigns a Distressed Recovery Rating
to PNC Commercial Mortgage Acceptance Corp.'s commercial mortgage
pass-through certificates, series 2000-C1, as:
-- $7 million class M to 'CCC/DR2' from 'B-'.
In addition, Fitch downgrades the DR rating of:
-- $1.1 million class N to 'C/DR6' from 'C/DR5'.
Fitch affirms the ratings on these classes:
-- $390.1 million class A-2 at 'AAA';
-- Interest-only class X at 'AAA';
-- $34 million class B at 'AAA';
-- $34 million class C at 'AAA';
-- $10 million class D at 'AAA';
-- $26 million class E at 'AAA';
-- $12 million class F at 'AA';
-- $12 million class G at 'A';
-- $18 million class H at 'BBB';
-- $8 million class J at 'BBB-';
-- $7 million class K at 'BB';
-- $8 million class L at 'B'.
The class A-1 certificates have been paid in full. The balance of
the class O certificates has been reduced to zero due to realized
losses.
The downgrades are the result of increased loss expectations from
the specially serviced loans as well as higher than expected
losses on one disposed asset since the last Fitch ratings action.
The affirmations are the result of stable overall pool
performance. Thirty-two loans (22.6%) have defeased since
issuance, including three of the top ten loans (6.4%). As of the
April 2007 distribution date, the pool has paid down 29.2% to
$567.5 million from $801 million at issuance.
There are currently two assets (0.7%) in special servicing: one
real estate owned property (0.3%) and one loan that is 90+ days
delinquent (0.4%). Expected losses are anticipated to fully
deplete class N (rated 'C/DR6') and impact class M (rated
'CCC/DR2').
PHS GROUP: Case Summary & 65 Largest Unsecured Creditors
--------------------------------------------------------
Lead Debtor: PHS Group, Inc.
Greenebaum Doll & McDonald, P.L.L.C.
300 West Vine Street, Suite 1100
Lexington, KY 40507-1665
Bankruptcy Case No.: 07-60407
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Phoenix Holdings of Somerset, Inc. 07-60408
The Somerset Refinery, Inc. 07-60409
South Kentucky Purchasing Company 07-60410
Somerset Environmental Services, Inc. 07-60411
Type of Business: The Debtors' primary busines is the operation of
affiliate Somerset Refinery, Inc., which has a
processing capability of 5500 barrels of oil per
day. The refinery primarily produces gasoline
at octanes of 87, 89, 91, diesel fuel and heavy
fuel oils for homes and industry furnaces.
Chapter 11 Petition Date: May 8, 2007
Court: Eastern District of Kentucky (London)
Judge: Joseph M. Scott, Jr.
Debtors' Counsel: Gregory R. Schaaf, Esq.
Greenebaum Doll & MacDonald, P.L.L.C.
300 West Vine Street, Suite 1100
Lexington, KY 40507
Tel: (859) 231-8500
Estimated Assets Estimated Debts
---------------- ---------------
PHS Group, Inc $10,000 to $1 Million to
$100,000 $100 Million
Phoenix Holdings of $10,000 to $1 Million to
Somerset, Inc $100,000 $100 Million
The Somerset Refinery, Inc $1 Million to $1 Million to
$100 Million $100 Million
South Kentucky Purchasing $1 Million to $1 Million to
Company $100 Million $100 Million
Somerset Environmental $1 Million to $1 Million to
Services, Inc $100 Million $100 Million
A. PHS Group, Inc's 9 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Chesapeake Appalachia, L.L.C. unknown
900 Pennsylvania Avenue
Charleston, WV 25302
Cumberland Security Bank unknown
107 South Main Street
Somerset, KY 42501
Daugherty Petroleum, Inc. unknown
120 Prosperous Place,
Suite 201
Lexington, KY 40509
Equitable Production Company unknown
Greenfield Commercial Credit unknown
Internal Revenue Service unknown
Journey Operating, L.L.C. unknown
Kentucky Department of unknown
Revenue
B. Phoenix Holdings of Somerset, Inc's 10 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
Chesapeake Appalachia, L.L.C. unknown
900 Pennsylvania Avenue
Charleston, WV 25302
Cumberland Security Bank unknown
107 South Main Street
Somerset, KY 42501
Daugherty Petroleum, Inc. unknown
120 Prosperous Place,
Suite 201
Lexington, KY 40509
Equitable Production Company unknown
Greenfield Commercial Credit unknown
Internal Revenue Service unknown
Journey Operating, L.L.C. unknown
Kentucky Department of unknown
Revenue
Somerset National Bank unknown
C. The Somerset Refinery, Inc's 17 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
The Somerset Refinery, $1,682,373
Inc.
P.O. Box 1547
Somerset, KY 42502
Marketing Division- $694,467
Somerset Ref.
P.O. Box 1547
Somerset, KY 42502
Somerset Oil $584,355
P.O. Box 1547
Somerset, KY 42502
City of Somerset $223,211
Pruitt Powers & Yeast $61,759
Somerset Environmental $61,381
Terry Flinchum $55,950
Severn Trent Lab $36,472
Kentucky Utilities $34,317
Linebach Funkhouser $32,995
Worldwide Equipment $30,038
Warehouse Division $27,277
Pulaski County Sheriff $22,121
Process Pump & Seal $20,182
Valley Pipe & Fitting Co. $20,163
Firestream Worldwide $15,833
Unifirst $15,588
D. South Kentucky Purchasing Company's 9 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
Nami Resources Company, $850,101
L.L.C.
104 Nami Plaza, Suite 1
London, KY 40741
Trial Oil & Gas, Ltd. Co. $834,486
P.O. Box 272
Reno, OH 45773
Ohio-Kentucky Oil $355,204
Corporation
5112 Portage Street, NM
North Canton, OH 44720
W.P.P., L.L.C. $67,863
K.T.O. $67,394
Lindsey & Elliot $61,358
United American Energy, L.L.C. $56,898
Young Oil Corporation, Inc. $49,037
Transi Oil & Gas, Inc. $48,747
E. Somerset Environmental Services, Inc's 20 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
S.R.I.-Wholesale $478,901
600 Monticello Street
Somerset, KY 42502
Somerset Oil, Inc. $105,138
P.O. Box 1547
Somerset, KY 42501
Warehouse $14,359
P.O. Box 1547
Somerset, KY 42502
Mastercard $11,680
Environmental Science Cor. $10,994
Somerset Refinery- $10,000
Marketing
Vacuum Products Company $9,341
Whayne Supply Company $8,489
Comdata $7,226
S.E.S., Inc.-General $5,248
Laurel Ridge Sanitary $5,084
Landfill
Micah Group, L.L.C. $4,596
O'Reilly Auto Parts $4,367
Pecco, Inc. $3,604
Unifirst $3,012
DAL-RS, Inc. $2,934
Garco, Inc. $2,780
Jet Tank Testing, Inc. $2,750
Nextel Partners, Inc. $2,504
Cintas First Aid & Safety $2,310
POE FINANCIAL: Hearing on Plan-Filing Extension Plea Set Today
--------------------------------------------------------------
The Honorable Catherine Peek McEwen of the U.S. Bankruptcy Court
for the Middle District of California will convene a hearing at
3:30 p.m. today, May 10, 2007, to consider Poe Financial Group
Inc. and its debtor-affiliates' request for extension of their
exclusive periods to:
a) file a plan of reorganization until Aug. 14, 2007; and
b) solicit acceptances of that plan until Oct. 8, 2007.
The Debtors' exclusive period to file a plan expired on April 16,
2007. This is the Debtors' second motion to extend the exclusive
periods.
The Debtors tell the Court that they need additional time to
complete a Chapter 11 plan of reorganization. Since filing for
bankruptcy, the Debtors have been preoccupied with the operation
of their business, obtaining debtor-in-possession financing,
dealing with the large volume of creditors, negotiating concerning
their office space lease, and dealing with complicated issues
regarding the Department of Financial Services and Citizens
Insurance Corporation.
Headquartered in Tampa, Florida, Poe Financial Group Inc.
-- http://www.poefinancialgroup.com/-- specializes in insuring
coastal properties assumed from Florida's high-risk insurance
pool. The Debtor and three of its affiliates file for chapter 11
protection on Aug. 18, 2006 (Bankr. M.D. Fla. Case No. 06-04288).
Noel R. Boeke, Esq., Leonard Gilbert, Esq., and Rod Anderson,
Esq., at Holland & Knight, LLP, represent the Debtors. When
the Debtors filed for protection from their creditors, they
estimated assets and debts of more than $50 million.
POLY-PACIFIC INT'L: Collins Barrow Raises Going Concern Doubt
-------------------------------------------------------------
Collins Barrow Edmonton LLP, in Edmonton, Alberta, raised
substantial doubt about Poly-Pacific International, Inc.'s ability
to continue as a going concern after auditing the company's
financial statements for the years ended Dec. 31, 2006, and 2005.
The auditor pointed to the company's recurring losses from
operations and net working capital deficiency.
The company posted a net loss of CAD1,970,479 on net sales of
CAD1,462,113 for the year ended Dec. 31, 2006, as compared with a
net loss of CAD1,161,662 on net sales of CAD2,503,302 in the prior
year.
At Dec. 31, 2005, the company's balance sheet showed CAD1,313,837
total assets and CAD2,045,778 total liabilities resulting to
CAD731,941 stockholders' deficit. The company's balance sheet
also showed strained liquidity with CAD409,486 in total current
assets and CAD1,765,189 in total current liabilities.
A full-text copy of the company's 2006 annual report is available
for free at http://researcharchives.com/t/s?1d03
About Poly-Pacific
Based in Edmonton, Alberta, Poly-Pacific International, Inc. -
http://www.poly-pacific.com/-- (TSX: PMB.V) manufactures a
complete line of plastic media blasting (PMB) for a wide variety
of commercial and industrial applications including paint
stripping, coating removal, surface preparation and conditioning.
POWERLINX INC: Aidman Piser Raises Going Concern Doubt
------------------------------------------------------
Aidman, Piser & Company PA, in Tampa, Florida, raised substantial
doubt about Powerlinx, Inc.'s ability to continue as a going
concern after auditing the company's financial statements for the
years ended Dec. 31, 2006, and 2005. The auditor pointed to the
company's recurring losses, strained liquidity, and stockholders'
deficit.
The company posted a net loss of $3,010,934 on revenues of
$1,727,178 for the year ended Dec. 31, 2006, as compared with a
net loss of $5,848,754 on revenues of $1,271,046 in the prior
year.
At Dec. 31, 2006, the company's balance sheet showed $1,591,187 in
total assets and $4,673,203 in total liabilities resulting to
$3,082,016 stockholders' deficit.
The company's balance sheet also showed strained liquidity with
$1,057,283 in total current assets and $4,673,203 in total current
liabilities.
A full-text copy of the company's 2006 annual report is available
for free at http://researcharchives.com/t/s?1d03
About Powerlinx
Headquartered in St. Petersburg, Florida, PowerLinx, Inc.
(OTCBB:PWLX) -- http://www.power-linx.com/-- develops,
manufactures, and markets, among other devices, products and
applications developed to transmit voice, video, audio and data
either individually or any and all combinations over power lines,
twisted pair wires and coax in AC and DC power environments, on
any and all power grids. The Company also
develops, manufactures and markets underwater video cameras,
lights and accessories for the marine, commercial and consumer
retail markets.
PROPEX INC: Earns $1.8 Million in Year Ended December 31
--------------------------------------------------------
Propex Inc. reported a net income of $1.8 million for the year
ended Dec. 31, 2006, down from $14 million for the year ended Dec.
31, 2005. Total net revenue increased $87.3 million to $742.8
million in the year ended Dec. 31, 2006 from $655.5 million in the
year ended Dec. 31, 2005. The increase in net revenue is
primarily due to an increase in North America geosynthetics net
revenue of $64.4 million and an increase of $63.4 million in
revenues of the concrete fiber segment, which was a market in
which the company did not participate in the prior year.
Cost of sales for year ended Dec. 31, 2006, as compared with the
prior year increased to $616.2 million from $547.7 million. For
the year ended Dec. 31, 2006, gross profit increased $18.8 million
to $126.6 million from $107.8 million in the prior year.
As of Dec. 31, 2006, the company had total assets of
$610.3 million and total liabilities of $411.2 million, resulting
in a total stockholders' equity of $111.2 million.
Liquidity and Capital Resources
As of Dec. 31, 2006, the company had $18.3 million of available
borrowings under its $50 million revolving credit line. It had a
net working capital of $225.3 million at Dec. 31, 2006, as
compared with a net working capital of $217.7 million at Dec. 31,
2005.
The company's forecasted capital spending for 2007 is about
$12.9 million, as compared with capital spending of $12 million
and $7.9 million for the years 2006 and 2005, respectively. The
company believes that its current working capital, cash flows
generated from future operations and available capacity under its
revolving credit facility, as could become necessary in the
future, will be sufficient to meet its working capital and capital
spending requirements through December 2007.
Second Amendment to Credit Agreement
On Jan. 26, 2007, the company entered into the Second Amendment to
Credit Agreement and Limited Waiver with the lenders, BNP Paribas,
as Administrative Agent, and the company's parent corporation and
certain of its subsidiaries, as Credit Support Parties. The
company had determined that it was likely that for the quarter
ended Dec. 31, 2006, the company was not in compliance with one or
more of the financial covenants contained in the Credit Agreement.
The Second Amendment waived the company's compliance with the
financial covenants contained in the Credit Agreement for the
fourth quarter of 2006, adjusted the financial covenants for the
following five quarters ending March 31, 2008, increased the
interest rate by 0.75% to LIBOR plus 3% or a base rate plus 2%,
and required the company to prepay $20 million of debt outstanding
under the credit facility from cash on hand.
A full-text copy of the company's 2006 annual report is available
for free at http://ResearchArchives.com/t/s?1eaf
About Propex Inc.
Propex Inc. -- http://www.propexinc.com/-- manufactures primary
and secondary carpet backing. The company also manufactures and
markets woven and non-woven polypropylene fabrics and fibers used
in geosynthetic and a variety of other industrial applications.
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2007,
Moody's Investors Service changed the outlook on Propex Inc.'s
long-term debt ratings to negative from stable. Moody's affirmed
these ratings: the Ba3 LGD3, 30% rating on the senior secured
credit facilities consisting of a $50 million revolver due 2011,
and the original $260 million term loan due 2012; the Caa1, LGD5,
82% rating on the $150 million senior unsecured due 2012; the B2
Corporate Family Rating; and the B2 Probability of Default Rating.
RESMAE MORTGAGE: Gets Court OK to Increase Credit Line to $800MM
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
ResMAE Mortgage Corp. to increase its $500 million credit line to
$800 million to continue in business until the sale is completed,
Bill Rochelle of Bloomberg News reports.
Early this month, the Court approved the Debtor's First Amended
Disclosure Statement describing its Amended Chapter 11 Plan of
Reorganization.
The Court determined that the Disclosure Statement, as amended,
contained adequate information -- the right kind of the right
amount necessary for creditors to make informed decisions -- as
required by Section 1125 of the Bankruptcy Code.
Additionally, the Court directed the Debtor to notify the
Connecticut General Life Insurance Company and related entities of
the Debtor's election to assume, assume and assign, or reject each
of its seven separate CIGNA Group Contracts/Policies no later than
May 22, 2007. The Court ruled that the election will be binding
upon the Debtor and may not be subsequently altered without
CIGNA's prior consent.
The Plan is sponsored by RMC Mortgages Holdings LLC, the
successful bidder in an auction held March 2, 2007, for the sale
of substantially all of the Debtor's assets.
Asset Sale
In its bid, RMC proposed to:
1) purchase specified assets and assume certain mutually agreed
upon liabilities from the Debtor prior to confirmation of
the Plan; and
2) sponsor the Plan, under which the Debtor would issue new
equity to RMC in exchange for RMC's agreement to support and
facilitate the Debtor's operations pending confirmation
of the Plan.
Pursuant to an asset sale agreement approved by the Court on
March 6, 2007, the parties consummated the asset sale with RMC
paying $22.4 million and providing other consideration to the
Debtor in exchange for a majority of the real and personal
property of the Debtor used in the Debtor's operations.
The Debtor's employees and licenses and certain other assets
remained with the Debtor's estate. RMC has granted the Debtor the
right to utilize the assets necessary to conduct its business
during the pendency of the bankruptcy case. Upon the occurence of
the effective date of the Plan, the Debtor's existing equity
securities will be cancelled and new equity securities,
representing 100% of the equity securities of Reorganized ResMAE,
will be issued to RMC.
Plan Funding
Other than with respect to the assumed plan liabilities, cash
payments under the Plan, including the payment of excluded
liabilities will be funded by the trust property. The assumed
plan liabilities will be paid by Reorganized ResMAE.
Treatment of Claims
Under the Amended Plan, Class 1 Other Priority Claims will be paid
in full, in cash.
Class 2 Secured Claims, with an estimated amount of about $900,000
are entitled to either a payment in full, in cash, or receipt of
collateral securing the claim.
Holders of Class 3 General Unsecured Claims have an estimated
recovery of 7.6% to 14.6% while holders of Class 4 Convenience
Claims will receive cash equal to 12% of the face amount of their
claim up to $6,000.
Class 5 Subordinated Claim holders will not receive anything under
the Plan.
Interests in the Debtor will be cancelled.
Plan Voting Procedures
The deadline to vote on the Plan is on May 29, 2007, at
4:00 p.m. ET.
For questions relating to Plan, contact the Debtor's claim agent:
Kurtzman Carson Consultants LLC
Attn: Christopher R. Schepper
2335 Alaska Avenue
El Segundo, CA 90245
Tel: (310) 823-9000
About ResMAE Mortgage Corp.
Headquartered in Brea, California, ResMAE Mortgage Corp. --
http://www.resmae.com/-- is a subsidiary of ResMAE Financial
Corp., a specialty finance company engaged in the business
of originating, selling, and servicing subprime residential
mortgage loans. The company serves the needs of borrowers who do
not conform to traditional "A" credit lending criteria due to
credit history, debt to income ratios, or other factors. It has
regional processing centers nationwide, including Northern and
Southern California, Texas, New Jersey, Illinois, Florida and
Hawaii.
ResMAE Mortgage filed for chapter 11 protection on February 12,
2007 (Bankr. D. Del. Case No. 07-10177). Daniel J. DeFranceschi,
Esq. and Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., represent the Debtor in its restructuring efforts. Adam G.
Landis, Esq., and Richard Scott Cobb, Esq., at Landis Rath & Cobb
LLP serve as counsel to the Official Committee of Unsecured
Creditors. At reporting month ended Feb. 28, 2007, the Debtor's
balance sheet showed total assets of $255,429,000 and total debts
of $254,062,000.
RESPONSE BIOMEDICAL: Ernst & Young Raises Going Concern Doubt
-------------------------------------------------------------
Ernst & Young LLP, in Vancouver, B.C., raised substantial doubt
about Response Biomedical Corp.'s ability to continue as a going
concern after auditing the company's financial statements for the
years ended Dec. 31, 2006, and 2005. The auditor pointed to the
company's inability to generate sufficient cash flows, significant
losses to date, and dependence on series of debt and equity
financings to continue its operations.
The company posted a net loss of $53,592,082 on revenues of
$4,420,058 for the year ended Dec. 31, 2006, as compared with a
net loss of $44,263,915 on revenues of $3,489,680 in the prior
year.
At Dec. 31, 2006, the company's balance sheet showed $12,966,931
in total assets, $2,211,755 in total liabilities, and $10,755,176
stockholders' equity.
A full-text copy of the company's 2006 annual report is available
for free at http://researcharchives.com/t/s?1d03
About Response Biomedical
Headquartered in Burnaby, B.C., Response Biomedical Corp. (TSX-V:
RBM) -- http://www.responsebio.com/-- develops, manufactures and
markets rapid on- site RAMP tests for medical and environmental
applications providing reliable information in minutes, anywhere,
every time. RAMP represents an entirely new class of diagnostic,
with the potential to be adapted to more than 250 medical and non-
medical tests currently performed in laboratories. The RAMP System
consists of a portable fluorescent Reader and single-use,
disposable Test Cartridges. RAMP tests are commercially available
for the early detection of heart attack, environmental detection
of West Nile virus, and biodefense applications including the
rapid on-site detection of anthrax, smallpox, ricin and botulinum
toxin.
RITE AID: S&P Junks Rating on Proposed $1.220 Billion Senior Notes
------------------------------------------------------------------
Standard & Poor's lowered the corporate credit and secured debt
ratings on chain drug retailer Harrisburg, Pennsylvania-based Rite
Aid Corp. to 'B' from 'B+'. At the same time, S&P lowered the
senior unsecured debt ratings to 'CCC+' from 'B-'. Concurrently,
Standards & Poor's assigned its 'CCC+' rating to Rite Aid's
proposed $1.220 billion senior unsecured notes, which mature in
2017. The notes will be issued under rule 144a with registration
rights. The corporate credit and unsecured ratings have been
removed from CreditWatch, where they were placed Aug. 14, 2006,
with negative implications. The secured debt ratings remain on
CreditWatch with negative implications pending an analysis of the
collateral on the proposed $1.105 billion tranche 2 term loan
facility, which will be rated shortly and the $1.750 billion
existing unrated credit facility. The three secured notes, that
total $1.058 billion, have a second lien on the same assets that
collateralize the bank facilities. The outlook is stable.
The downgrade reflects the operational risk of acquiring 1,800
stores and six distribution centers in the U.S. from The Jean
Coutu Group (PJC) (B+/Watch Pos/--), and Rite Aid's aggressive
financial policy. Standard & Poor's estimates Rite Aid will pay
total considerations of $3.5 billion ($2.3 billion in cash and 250
million common shares) for PJC's U.S. drug store business.
"The ratings reflect the challenges Rite Aid Corp. faces in
integrating the 1,800 acquired stores while continuing to improve
the operations at its drugstores amid intense competition," said
Standard & Poor's credit analyst Diane Shand. They also reflect
the company's significant debt burden and thin cash flow
protection.
SBARRO INC: Earns $9.9 Million in Full Year Ended December 31
-------------------------------------------------------------
Sbarro Inc. disclosed revenues of $354.4 million for the year
ended Dec. 31, 2006, as compared with revenues of $348.7 million
for the year ended Jan. 1, 2006. Same-store sales growth was 4.4%
for the year ended Dec. 31, 2006. Net Income was $9.9 million,
for the year ended Dec. 31, 2006, as compared with $1.4 million
for the year ended Jan. 1, 2006.
Peter Beaudrault, chairman of the Board of Sbarro commented, "We
are pleased with the continuing improvements in both revenues and
EBITDA that our team has achieved in 2006. We look forward to
continuing to improve these trends as the team continues to
capitalize on the improvements made system wide over the last
three years."
On Jan. 31, MidOcean SBR Acquisition Corp., an indirect subsidiary
of MidOcean SBR Holdings LLC, an affiliate of MidOcean Partners
III L.P., and certain of its affiliates merged with and into the
company in exchange for consideration of $450 million in cash,
subject to certain adjustments. Upon consummation of the Merger,
Sbarro Holdings LLC, a subsidiary of Holdings will own all of the
outstanding common stock of the company.
In addition, the former shareholders received a distribution of
the cash on hand in excess of (i) $11 million, plus (ii) all
amounts required to be paid in connection with the special event
bonuses.
Upon consummation of the Merger, the company transferred interests
in certain non-core assets to a newly formed company owned by
certain of our former shareholders. There was no additional
consideration given for the transfer of these assets as they were
treated as a dividend. The assets and related costs that we
transferred were:
-- the interests in 401 Broadhollow Realty Corp. and 401
Broadhollow Fitness Center Corp., which own the corporate
headquarters of the company, the fitness center and the
assets of the Sbarro Cafe located at the corporate
headquarters;
-- a parcel of undeveloped real property located in East
Northport, New York;
-- the interests in Boulder Creek Ventures LLC and Boulder
Creek Holdings LLC, which own a 40% interest in a joint
venture that operates 15 steakhouses under "Boulder Creek"
and other names; and
-- the interest in Two Mex-SS LLC, which owns a 50% interest
in a joint venture that operates two tex-mex restaurants
under the "Baja Grill" name.
About Sbarro
Sbarro Inc. -- http://www.sbarro.com/-- headquartered in
Melville, New York, is a quick service restaurant chain that
serves Italian specialty foods. As of April 23, 2006, the company
owned and operated 482 and franchised 491 restaurants worldwide
under brand names such as "Sbarro," "Umberto's," and "Carmela's
Pizzeria". The company announced on June 19, 2006, its
international expansion by opening more than 25 restaurants in
Guatemala, El Salvador, Honduras, The Bahamas and Romania.
* * *
In February 2007, Standard & Poor's Ratings Services revised its
outlook on Sbarro Inc. to negative from stable. At the same time,
Standard & Poor's affirmed the company's 'B-' corporate credit
rating and other ratings.
Also in February 2007, Moody's Investors Service assigned the
company a B3 corporate family rating while at the same time
assigned Ba3 senior secured ratings to its proposed bank facility
consisting of a $25-million 1st lien revolver and a $150-million
1st lien term loan. Additionally, the rating agency gave a Caa1
rating on the proposed $150-million senior unsecured notes and a
SGL-3 speculative grade liquidity rating.
SCOTTISH RE: Fitch Revises Watch to Positive from Evolving
----------------------------------------------------------
Fitch Ratings has revised the Rating Watch on these ratings of
Scottish Re Group Ltd. (NYSE:SCT) to Positive from Evolving:
-- Issuer Default Rating (IDR) 'B+';
-- 7.25% Non-cumulative perpetual preferred stock 'B-/RR6'.
The Rating Watch on SCT was revised following the completion of
the $600 million investment transaction with MassMutual Capital
Partners LLC, and affiliates of Cerberus Capital Management, L.P.
Following upcoming meetings with management, including
representatives from MassMutual Capital and Cerberus, Fitch
expects to review SCT's financial, business and operating profile
and plans, following the investment cited above. Following this
review, which is expected to be completed within the month of May,
Fitch may resolve the Rating Watch by upgrading SCT's ratings or
affirming them with a Stable Outlook.
Fitch also placed these ratings on Rating Watch Positive from
Rating Watch Evolving:
Scottish Annuity & Life Insurance Company (Cayman) Limited
-- Insurer financial strength rating 'BB+'.
Scottish Re (U.S.) Inc.
-- IFS 'BB+'.
Scottish Re Limited
-- IFS 'BB+'.
Stingray Pass Through Trust
-- $325 million 5.902% collateral facility securities due
Jan. 12, 2015 'BB+'.
SEA CONTAINERS: Trustee Amends List of Unsecured Creditors Panel
----------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, informs
the U.S. Bankruptcy Court for the District of Delaware that The
Bank of New York has resigned from the Official Committee of
Unsecured Creditors of Sea Containers, Ltd. and its debtor-
affiliates.
The U.S. Trustee has appointed HSBC Bank USA, N.A., in its
capacity as indenture trustee, to fill in the vacant post.
The Creditors Committee is currently composed of:
1. HSBC Bank USA, National Association
452 Fifth Avenue
New York, NY 10018-2706
Attn: Sandra E. Horwitz
Phone: (212) 525-1358
Fax: (212) 525-1300
2. HSH Nordbank AG
Gerhart-Hauptmann-Platz 50
Hamburg, Germany D20095
Attn: Jorg-Rainer Kalz
Phone: (9) 40-3333-13561
Fax: (9) 40-3333-13561
3. Trilogy Capital LLC
2 Pickwick Plaza
Greenwich, CT 06830
Attn: Barry D. Kupferberg
Phone: (203) 971-3420
Fax: (203) 971-3499
4. Dune Capital LLC
c/o Dune Capital Management LP
623 Fifth Avenue, 30th Floor
New York, NY 10022
Attn: Andrew B. Cohen
Phone: (212) 301-8308
Fax: (646) 885-2473
5. Mariner Investment Group, Inc.
500 Mamaroneck Avenue, Suite 101
Harrison, NY 10528
Attn: Adam S. Cohen
Phone: (914) 798-4234
Fax: (914) 777-3363
About Sea Containers
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of $62,400,718 and total liabilities of
$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
SEA CONTAINERS: Wants $176 Million DIP Lending Agreement Approved
-----------------------------------------------------------------
Sea Containers, Ltd. and its debtor-affiliates ask permission from
the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware to enter into a commitment letter with
certain debtor-in-possession lenders.
Pursuant to a commitment letter dated May 3, 2007, Caspian Capital
Partners LP, Dune Capital LP and Trilogy Capital LLC have
committed to provide the Debtors with a senior secured debtor-in-
possession credit facility of up to $176,500,000, Mark Wilson,
senior vice president and CEO of SCL, informs Judge Carey.
Caspian Capital will act as the administrative and collateral
agent under the DIP Facility.
The DIP Facility consists of a term loan of up to $151,500,000,
and a $25,000,000 revolving credit facility.
The Term Loan provides for a non-amortizing term loan available
in a single drawing on the closing date. The Debtors intend to
use the proceeds of the Term Loan to help fund repayment of an
existing debt securitization facility involving Sea Containers
SPC Ltd., a non-debtor, "bankruptcy remote" subsidiary organized
and existing under the laws of Bermuda. The Repayment will
prevent foreclosure of SPC by its lenders who have alleged a
default under that the SPC Securitization Facility.
The proceeds of the Revolving Credit Facility will be used to
fund operating and administrative expenses during the Debtors'
Chapter 11 cases.
The Commitment Letter also includes an agreement by SCL to pay
certain expenses and to indemnify the DIP Lenders and the
Administrative and Collateral Agent in certain circumstances, Mr.
Wilson notes. SCL intends to pay all costs and expenses of:
-- the DIP Lenders relating to the structuring of the proposed
financing for SCL or SPC, including negotiation,
documentation and administration of the Commitment Letter
and the DIP Credit Documents;
-- the DIP Lenders relating to the enforcement and
preservation of the respective DIP Agent's and DIP Lenders'
rights and remedies under and in connection with the
Commitment Documents and DIP Credit Documents; and
-- negotiating, documenting and obtaining court approval of
SCL's entry into the Commitment Documents, the DIP Credit
Documents and other related transactions.
Mr. Wilson maintains that the DIP Lenders' proposal offers
attractive financing terms, including no cash upfront fees or
break-up fees and a solution to the Debtors' dispute with their
Noteholders.
"The DIP Lenders' proposal will allow the Debtors to lock in
permanent financing, thereby enabling the Debtors and their
advisors to focus their efforts going forward on key
restructuring initiatives and developing a confirmable Chapter 11
plan," Mr. Wilson says.
Moreover, the structure of the proposal ensures that the bulk of
the covenants and other obligations under the Facility will
relate to assets and operations of SCL rather than SPC, who does
not have direct control over its primary assets, the containers
leased or managed by GE SeaCo.
A full-text copy of the Caspian Commitment Letter and the DIP
Facility contemplated under the Commitment Letter is available
for free at http://researcharchives.com/t/s?1eac
Under the DIP Facility contemplated under the Caspian Commitment
Letter, SPC Holdings Ltd. will guarantee the payment of the DIP
Obligations as they become due.
SCL's DIP Obligations will be secured by a perfected, first
priority security interest in and Lien on:
(i) SCL's security interests in SPC Holdings,
(ii) all cash and cash equivalents of SCL, and
(iii) all amounts received or receivable by SPC Holdings from
SPC Holdings and SPC.
All DIP Obligations will be granted a superpriority
administrative expense claim under Section 364(c)(1) of the
Bankruptcy Code.
The DIP Lenders' commitment to provide the proposed financing is
subject to the Bankruptcy Court's entry of a final order on or
before:
(i) May 18, 2007, approving and authorizing SCL's entry into
the Commitment Documents; and
(ii) June 18, 2007, approving and authorizing SCL's entry into
the DIP Credit Documents and other related transactions.
Additionally, the Debtors ask the Court for permission to:
(a) use estate funds to pay certain out-of-pocket costs and
expenses of the DIP Lenders, including the reasonable fees
and expenses of their legal and other advisors; and
(b) provide indemnification to the DIP Lenders and the DIP
Agent in their capacities under the contemplated DIP
Credit Facility.
The Commitment Letter represents the culmination of a lengthy
negotiating process, during which both SCL and Sea Containers
Services Limited sought the input of their creditors committees
on a frequent, sometimes daily, basis, Mr. Wilson maintains.
Gibson, Dunn & Crutcher LLP represents the DIP Lenders in the
Debtors' cases.
Judge Carey will hold a hearing on May 8, 2007, to consider
approval of the Debtors' request.
About Sea Containers
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of $62,400,718 and total liabilities of
$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
SEA CONTAINERS: Court Okays AP Services as Crisis Managers
----------------------------------------------------------
Sea Containers, Ltd. and its debtor-affiliates obtained authority
from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for
the District of Delaware to employ AP Services LLC to provide them
certain temporary employees and interim management to oversee and
manage their restructuring efforts.
As interim management for the Debtors, Laura Barlow, the Debtors'
chief financial officer and chief restructuring officer, is
expected to:
-- manage the Debtors' financial, treasury and tax functions;
-- oversee negotiations with potential acquirers of the
Debtors' assets;
-- oversee management of the "working group" professionals who
are assisting the Debtors in the reorganization process or
who are working for the Debtors' various stakeholders to
improve coordination of their effort and individual work
product to be consistent with the Debtors' restructuring
goal;
-- work with the Debtors to further identify and implement
both short-term and long-term liquidity generating
initiatives;
-- oversee the Debtors' execution of its planned disposal
program in respect of various non-core assets;
-- oversee the Debtors' management of the relationship with
its stakeholders and their advisers and in meeting its
requirements to provide information to those stakeholders;
-- oversee the Debtors' negotiation and restructuring of its
current indebtedness with its key stakeholders, including
liaising and negotiating with the different stakeholders;
and
-- manage other matters as may be requested by the Debtors
that fall within APS Services' expertise and that are
mutually agreeable.
APS Services will be paid on an hourly rate basis:
Assisting Member Hourly Rate
---------------- -----------
Managing Directors GBP485-GBP545
Directors GBP415-GBP440
Vice Presidents GBP315-GBP360
Associates GBP220-GBP285
Ms. Barlow assures the Court that AP Services does not hold or
represent any interest adverse to the Debtors' estate, and is
deemed a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
About Sea Containers
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of $62,400,718 and total liabilities of
$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 16;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
SEA CONTAINERS: Wants Archlane Leases Settlement Approved
---------------------------------------------------------
Sea Containers, Ltd. and its debtor-affiliates ask the Honorable
Kevin J. Carey of the U.S. Bankruptcy Court for the District of
Delaware to approve the leases settlement agreement with Archlane
Limited.
The Debtors currently maintain their corporate headquarters at 20
Upper Ground, in London SE1, United Kingdom. The Premises was
purchased by a subsidiary of Sea Containers Ltd. in 1979 and was
transferred in 1988 to another SCL subsidiary, which in turn sold
the building to Adamshield Limited.
As part of the sale, pursuant to two subleases, Adamshield leased
back certain portions of the Premises -- the 5th, 11th, 12th,
13th and 14th floors of the South wing and the 12th and 13th
floors of the West wing -- to Sea Containers Services Ltd. SCL
guarantee SCSL's obligations under the Subleases.
In turn, SCSL entered into certain sublease arrangements,
pursuant to which Seven Custom Publishing Limited, Orient Express
Services and GE SeaCo occupy portions of the leased space.
Archlane Limited, successor-in-interest to Adamshield, is the
current landlord of the Premises. The Leases will expire on
Dec. 24, 2011.
The aggregate annual rent under the Leases is approximately
GBP2,550,000, or about $5,100,000 at current exchange rates.
SCSL also pays about GBP1,116,020, or $2,178,040, in additional
aggregate annual charges under the Leases for utilities and other
services.
The Leases are subject to a rent review in 2010, which may result
in a marginal increase in rent, Sean T. Greecher, Esq., at Young
Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates.
The utilities and services charges may also increase
incrementally over the remaining term of the Leases.
The Debtors estimate that the aggregate payment obligations
remaining under the Lease may aggregate more than $36,000,000.
After careful analysis of their options with respect to the
Leases, the Debtors have decided that a settlement with Archlane
surrendering the Leases and entering into new shorter-term leases
is the best choice for maximizing value for their estates, Mr.
Greecher informs the Court.
The Debtors do not believe it is prudent to simply reject the
Leases. For one, the IT System at the Premises forms the
backbone of the Debtors' operations. The IT System uses an
outdated mainframe and operating system, making a transfer to an
offsite hosting facility extremely difficult, and could possibly
result in a catastrophic loss of data and functionality, Mr.
Greecher tells Judge Carey.
Moreover, Archlane could attempt to cite rejection as a breach of
the Leases and could attempt to initiate a court action to
terminate the Leases and evict the Debtors from the Premises, Mr.
Greecher points out. "Such actions would create significant
administrative costs for the estates . . . and give rise
significant unsecured claims against the [Debtors]."
Accordingly, after engaging in intensive negotiations, the
Debtors and Archlane reached a settlement in principle that
provides for:
(1) Surrender of SCSL's current Leases subject to a
GBP7,000,000 payment to Archlane;
(2) Entry into new leases for the current occupied Premises
under the Leases commencing on May 18, 2007, and expiring
on June 30, 2007;
(3) Entry into a new lease for the 12th Floor West Wing of the
Premises commencing on May 18, 2007, and expiring on
June 30, 2007, with a tenant's option to extend the New
Lease through August 5, 2007;
(3) Entry into a new lease for the Basement 1 agreed areas of
the West Wing commencing on May 18, 2007, and expiring on
December 24, 2011, with a tenant's option to break the New
Lease after December 31, 2007, and every six months
thereafter, subject to three months' notice;
(4) Entry into a new lease for the Basement 2 agreed areas in
the West Wing commencing on May 18, 2007, and expiring on
December 31, 2007;
(5) Provision for rental of parking spaces;
(6) Assignment of SCSL's rights under that certain sublease
between SCSL and Seven Custom Publishing Ltd to Archlane
on May 14, 2007; and
(7) Entry into a new lease between Archlane and Orient Express
Services Limited for space in the Premises.
The Debtors' entry into the Settlement would provide for new
lease terms that meet their business needs and avoid unnecessary
costs to the estate, Mr. Greecher asserts. "The Debtors do not
require the space and facilities of the current Premises beyond
the end of the year."
On the contrary, the Debtors maintain that assignment and
subleasing the Premises is a less attractive prospect than entry
into the Settlement as they might be required to make significant
up-front expenditures to refurbish the Premises prior to sublease
or assignment to make the space attractive to new tenants.
* * *
At the Debtors' behest, Judge Carey extends the time by which the
Debtors must assume or reject the Leases to May 18, 2007,
provided that nothing will be deemed a waiver of the Debtors'
right to assume or reject the Leases before the set deadline.
The Court authorizes the Debtors to deposit with their counsel,
Kirkland & Ellis LLP, an amount equal to the payments
contemplated under the Settlement Documents. The Deposit will be
refunded in the event the Settlement Documents are not approved
or consummated.
Judge Carey will convene a hearing on May 18 to consider the
Debtors' request on a final basis.
Any interested party who opposes the approval of the Settlement
Documents must file a formal objection to the Court on or before
May 15, 2007.
About Sea Containers
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of $62,400,718 and total liabilities of
$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 16;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
SPHINX LTD: Liquidators Can't Get Info from Europe Using U.S. Law
-----------------------------------------------------------------
The Honorable Robert Drain of the U.S. Bankruptcy Court for the
Southern District of New York said in a ruling Tuesday that the
liquidators for hedge fund Sphinx Ltd. cannot use U.S. law to
compel the production of information in Austria and Liechtenstein,
Bill Rochelle of Bloomberg News reports.
According to the report, Judge Drain said the liquidators should
ask for assistance from the Cayman court to gather information
abroad "rather than with orders from this ancillary court."
Sphinx, the source says, sought bankruptcy protection in the
Cayman Islands as a result of losses from dealings with Refco Inc.
and its affiliates.
Refco and 23 of its affiliates filed for chapter 11 protection on
Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). Their Modified
Chapter 11 Plan was confirmed on Dec. 15, 2006.
On June 30, 2006, the founder shareholder of Sphinx placed the
company into voluntary liquidation under Section 150 of the
Companies Law (2004 revision) of the Cayman Islands. Kenneth M.
Krys and Christopher Stride of RSM Cayman Islands were appointed
as joint voluntary liquidators.
In July 2006, the liquidators filed a Chapter 15 petition (Bankr.
S.D.N.Y. Case No. 06-11760) for the liquidation of the company's
assets in the U.S.
SPI PETROLEUM: Unit Acquisition Cues S&P to Affirm B Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on SPI Petroleum LLC. The affirmation follows the
announcement that SPI's wholly owned subsidiary Maxum Petroleum
Inc. will be acquiring fuels, lubricants, and related services
provider Petroleum Products Inc. as well as two affiliated
companies, Petroleum Transport Inc. and Petroleum Fueling Inc.
"The ratings on SPI reflect its participation in the very
fragmented refined-product distribution market, typified by slim
operating margins and commodity price volatility," said Standard &
Poor's credit analyst Paul Harvey. "Furthermore, reflecting an
acquisitive growth strategy, SPI will face elevated debt leverage
and the integration risk associated with its acquisitions,
offsetting favorable near-term market conditions. Supporting the
ratings will be SPI's leading market position and low maintenance
capital expenditure needs."
The stable outlook reflects expectations of solid near-term market
conditions along with the successful integration of SPI's pending
and future acquisitions. If SPI pursues an aggressive acquisition
strategy that weakens debt leverage and financial measures, the
ratings would be lowered. Given its elevated debt levels and
acquisition strategy, near-term ratings improvement is not likely.
STARBOUND RE: S&P Rates Proposed $66.5 Million Sr. Bank Loan at BB
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB+' senior
unsecured bank loan rating to Starbound Re II Ltd.'s proposed
$64.9 million bank loan, its 'BBB-' senior unsecured bank loan
rating to Starbound II's proposed $159.5 million bank loan, and
its 'BB' senior secured bank loan rating to Starbound II's
proposed $66.5 million bank loan.
"The differences in ratings reflect the probabilities of the debt
becoming impaired," said Standard & Poor's credit analyst James
Brender. Starbound II is also raising $123.9 million of common
equity. The ratings are preliminary pending review of final legal
documents related to the transaction.
Starbound II is a limited-life, special-purpose Class-3
reinsurance company domiciled in Bermuda and set up specifically
to provide additional capacity to the Florida insurance market.
Renaissance Reinsurance Ltd. (Ren Re; A+/Stable/--) has agreed to
underwrite policies on behalf of Starbound II. These types of
entities are commonly referred to as sidecars. Starbound II's
structure and portfolio of risks bear a strong resemblance to
Starbound Re Ltd., though Debt I and Debt III have slightly higher
modeled probabilities of default.
"The ratings on Debt I and Debt II are based on analysis of the
modeled probabilities of default, with qualitative adjustments to
address risks not captured in the model," Mr. Brender added.
"Debt I and Debt II have modeled probabilities of default of 100
basis points and 20 bps, respectively." The modeled probabilities
of default refer to the percentage of 100,000 simulations of
annual catastrophe losses for Starbound II's pro forma portfolio
that resulted in a default of the term loan. Catastrophe losses
incurred by Starbound II is the only variable in the model.
Standard & Poor's qualitative adjustments create an appropriate
cushion on the rating, given the possibility for modeling error or
unfavorable variances between Starbound II's business plan
assumptions and actual results. The adjusted probabilities of
default for Debt I and Debt II are 231 bps and 54 bps,
respectively. The adjustments reduce the model catastrophe losses
required to cause a default of Debt I to $126 million from
$172 million. The difference of 26% creates an appropriate
cushion for the rating, given the potential for modeling error or
deviation from Starbound II's pro forma portfolio. The
adjustments reduce the modeled catastrophe losses required to
cause a default of Debt I to $201 million from $239 million. The
difference is 16%.
The qualitative adjustments consider Ren Re's strong competitive
position and risk management, Starbound II's predetermined
exposures and risk tolerances, and healthy rate adequacy for
reinsuring homeowners' risks in Florida, which is more than 95% of
Starbound II's exposure. These positive factors are offset in
part by the difficulties of modeling exposure to natural
disasters, which is exacerbated by Starbound II's significant
concentration of risk in Florida. The lack of a strong alignment
of interest between Ren Re and Starbound II is a minor negative
rating factor.
The rating on Debt III reflects application of Standard & Poor's
criteria for second-event risk. Ratings for securities that
expose investors to potential loss of principal or interest from
two natural disasters are capped at 'BBB+'. The modeled and
adjusted probabilities of attachment are 1 bp and 15 bps,
respectively. The adjusted probability of default implies a
rating above the 'BBB+' cap. The adjustments reduce the model
catastrophe losses required to cause a default to $252 million
from $398 million. The difference is 37%. This cushion is larger
than most sidecars, resulting primarily from Standard & Poor's
general concerns regarding catastrophe modeling for extremely
remote events and the impact on the modeling risk of Starbound
II's specific concentration in Florida.
The proceeds from capital-raising transactions will be placed in
one or more collateral trusts and will provide Ren Re with a
source of indemnity cover for losses relating to its property
catastrophe lines of business and other related lines. Certain
collateral trusts may enable cedents of Ren Re and Starbound II to
receive credit for reinsurance recoverables. The duration of
Starbound II's assets will generally be consistent with that of
its obligations. Ren Re will retain a minimum of 20% of the
premium from a defined selection of its property catastrophe
business ceded to Starbound through multiple quota share
reinsurance treaties, under which Starbound's liability will
attach simultaneously with that of Ren Re and otherwise follow
the fortunes with respect to the business retroceded to Starbound.
STRATOS INTL: Shareholders' Meeting Delay Prompts Nasdaq Delisting
------------------------------------------------------------------
Stratos International has received a notice from Nasdaq indicating
that, because Stratos failed to hold its 2006 annual meeting of
shareholders prior to April 30, 2007, Nasdaq was initiating the
process to delist Stratos' securities from trading on The
Nasdaq Global Market. Stratos has appealed the delisting
determination and Nasdaq has scheduled a hearing on the matter in
early June.
Stratos determined to delay holding its annual meeting of
shareholders in light of its decision to explore strategic
alternatives, including a possible sale of the company, which was
announced on Sept. 14, 2006. In connection with this process,
Stratos retained CIBC World Markets Corp. as its exclusive
financial advisor. Because Steel Partners II publicly disclosed
its plan to conduct a proxy contest with respect to election of
directors and also indicated an interest in acquiring the
company, Stratos' board concluded that it would be impossible to
conduct a meaningful strategic alternative process if control of
the board of directors might change in the midst of the process.
Stratos has pursued this process, one in which Steel Partners II
was invited to participate, for nearly eight months. As a
consequence, Stratos currently is in negotiations in connection
with the completion of the process. However, there can be no
assurance that the negotiations will be resolved successfully or
that any transaction will occur. Stratos plans to conduct its
annual meeting as soon as practicable following resolution of
the process.
In accordance with Nasdaq procedures, Stratos has requested a
hearing with the Nasdaq Listing Qualifications Panel to appeal the
delisting determination. Stratos' shares will remain listed on
Nasdaq Global Market under the ticker symbol STLW pending a
decision by Nasdaq. There can be no assurance that Nasdaq will
grant Stratos' request for continued listing.
About Stratos International
Headquartered in St. John's, Newfoundland, Canada, with executive
offices in Bethesda, Maryland, Stratos Corporation (Nasdaq: STLW)
-- http://www.stratosglobal.com/-- is a publicly traded
company that provides a range of mobile and fixed-site remote
communications solutions for users operating beyond the reach of
traditional networks. The company has offices in Canada, Brazil,
the United Kingdom, Norway, Germany, the Netherlands, Sweden,
Italy, Spain, Turkey, Russia, Kenya, South Africa, United Arab
Emirates, India, Hong Kong, Japan, Singapore, Australia and New
Zealand.
* * *
As reported in the Troubled Company Reporter on May 9, 2007,
Moody's Investors Service confirmed Stratos Global Corporation's
B1 corporate family, Ba2 senior secured and B3 senior unsecured
ratings and lowered the company's speculative grade liquidity
rating to SGL-4 from SGL-3. The outlook is negative. The long
term ratings reflect a B1 probability of default and loss-given
default assessments of LGD 2, 24% on the senior secured debt and
LGD 5, 77% on the senior unsecured notes.
STRUCTURED ASSET: Moody's Rates Class B1 Certificates at Ba1
------------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by Structured Asset Securities Corporation
Mortgage Loan Trust 2007-EQ1 and ratings ranging from Aa1 to Ba2
to the subordinate certificates in the deal.
The securitization is backed by EquiFirst Coporation originated,
adjustable-rate (70.93%) and fixed-rate (29.07%), subprime
mortgage loans acquired by Lehman Brothers Holdings Inc. The
ratings are based primarily on the credit quality of the loans and
on protection against credit losses by subordination, excess
spread, and overcollateralization. The ratings also benefit from
both an interest-rate swap agreement and an interest-rate cap
agreement, both provided by Lehman Brothers Special Financing Inc.
Moody's expects collateral losses to range from 4.25% to 4.75%.
Wells Fargo Bank, N.A. and HomeEq Servicing will service the
mortgage loans and Aurora Loan Services LLC will act as master
servicer to the mortgage loans.
Moody's has assigned Aurora its servicer quality rating of SQ1- as
a master servicer of residential mortgage loans.
The complete rating actions are:
Structured Asset Securities Corp. Trust 2007-EQ1
Mortgage Pass-Through Certificates, Series 2007-EQ1
* Cl. A1, Assigned Aaa
* Cl. A2, Assigned Aaa
* Cl. A3, Assigned Aaa
* Cl. A4, Assigned Aaa
* Cl. A5, Assigned Aaa
* Cl. M1, Assigned Aa1
* Cl. M2, Assigned Aa2
* Cl. M3, Assigned Aa3
* Cl. M4, Assigned A1
* Cl. M5, Assigned A2
* Cl. M6, Assigned A3
* Cl. M7, Assigned Baa1
* Cl. M8, Assigned Baa2
* Cl. M9, Assigned Baa3
* Cl. B1, Assigned Ba1
* Cl. B2, Assigned Ba2
STRUCTURED ASSET: Credit Deterioration Cues S&P to Junk Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B5 mortgage pass-through certificates from Structured Asset
Securities Corp.'s series 2004-18H to 'CCC' from 'B'.
Concurrently, the ratings on two other classes from Structured
Asset Securities Corp.'s series 2003-BC2 and 2003-BC3 were lowered
and placed on CreditWatch with negative implications. At the same
time, the rating on one class from series 2003-BC2 was lowered and
remains on CreditWatch negative, where it was placed Nov. 22,
2006. In addition, the ratings on three classes from series 2002-
16A, 2003-BC2, and 2003-BC3 were placed on CreditWatch negative.
Lastly, the ratings on 29 classes from these four series were
affirmed.
The downgrades and negative CreditWatch placements reflect the
deterioration of credit support to these classes, as the
transactions continue to realize significant monthly net losses.
Series 2004-18H has incurred losses in each of the past four
months, and monthly net losses for series 2003-BC2 and 2003-BC3
have consistently outpaced monthly excess interest. As a result,
overcollateralization for the latter two transactions is below the
respective targets. In addition, as of the April 2007
distribution period, total delinquencies were 25.92% and 28.83% of
the current pool balances for series 2003-BC2 and 2003-BC3,
respectively, with severe delinquencies comprising 18.48% and
21.80%, respectively. Series 2003-BC2 and 2003-BC3 had cumulative
realized losses of 6.26% and 3.21% of the original pool balances,
respectively.
The rating on class B3 from series 2002-16A was placed on
CreditWatch negative due to the loans in REO and foreclosure,
which total approximately $1.8 million, versus the credit support
amount of $659,804. The liquidation of the $881,544 REO loan
could result in a loss severity that would significantly reduce
credit support.
Standard & Poor's will continue to closely monitor the performance
of these transactions. If losses decline to a point at which they
no longer exceed excess interest, and the level of O/C has not
been further eroded, S&P will affirm the ratings and remove them
from CreditWatch. Conversely, if losses continue to exceed excess
interest and further erode O/C, S&P will take additional negative
rating actions.
The collateral for these transactions consists of 30-year, fixed-
or adjustable-rate prime (series 2002-16A and 2004-18H) or
subprime (series 2003-BC2 and 2003-BC3) mortgage loans secured by
first liens on one- to four-family residential properties.
Rating Lowered
Structured Asset Securities Corp.
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2004-18H B5 CCC B
Ratings Placed on Creditwatch Negative
Structured Asset Securities Corp.
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- -----
2002-16A B3 BBB/Watch Neg BBB
2003-BC2 M3 BBB+/Watch Neg BBB+
2003-BC3 M5 BBB-/Watch Neg BBB-
Rating Lowered and Remaining on Creditwatch Negative
Structured Asset Securities Corp.
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2003-BC2 B1 B/Watch Neg BB/Watch Neg
Ratings Lowered and Placed on Creditwatch Negative
Structured Asset Securities Corp. mortgage
pass-through certificates
Rating
------
Series Class To From
------ ----- -- -----
2003-BC2 M4 BB/Watch Neg BBB
2003-BC3 B B/Watch Neg BB
Ratings Affirmed
Structured Asset Securities Corp.
Mortgage pass-through certificates
Series Class Rating
------ ----- ------
2002-16A I-A1, 2-A2, 3-A1, 3-A2, 4-A1, 4-A2 AAA
2002-16A B1-I, B1-I-X, B1-II AA
2002-16A B2-I, B2-I-X, B2-II A
2003-BC2 A AAA
2003-BC2 M1 AA
2003-BC2 M2 A
2003-BC2 B2 CCC
2003-BC3 M1 AA
2003-BC3 M2 A
2003-BC3 M3 A-
2003-BC3 M4 BBB
2004-18H A-3, A-4, A-5, A-IO1, A-IO2 AAA
2004-18H B1 AA
2004-18H B2 A
2004-18H B3 BBB
2004-18H B4 BB
TOYS "R" US: Expects to File 2006 Annual Report on May 21
---------------------------------------------------------
Toys "R" Us, Inc., disclosed in a regulatory filing with the U.S.
Securities and Exchange Commission that it expects to file its
Annual Report on Form 10-K for the Fiscal Year ended Feb. 3, 2007,
on or before May 21, 2007.
The company was unable to file its annual report by the May 4,
2007 deadline citing that it has yet to complete the preparation
of its consolidated financial statements as of and for the quarter
and year ended Feb. 3, 2007.
The company relates that in preparing its year-end financial
statements, it concluded that it has a material weakness in its
internal controls over income tax accounting. The breadth of the
additional internal work and analysis required due to the
identified material weaknesses relating to income tax accounting
has delayed the preparation of the company's financial statements.
Toys "R" Us -- http://www.Toysrus.com/-- is the world's leading
specialty toy retailer. Currently it sells merchandise through
more than 1,500 stores, including 586 stores in the U.S. and 685
international stores, which include licensed and franchised
stores, and through its Internet site.
Babies "R" Us -- http://www.Babiesrus.com/-- is the largest baby
product specialty store chain in the world and a leader in the
juvenile industry, and sells merchandise through 254 stores in the
U.S. as well as on the Internet.
TOYS "R" US: Non-Filing of Form 10-K Cues S&P's Negative Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'B-' corporate credit rating, on Wayne, New Jersey-based Toys
"R" Us Inc. on CreditWatch with negative implications. This
action follows the company's filing an NT 10-K with the SEC. In
the filing, the company said that because it found material
weaknesses in its internal controls over income tax accounting, it
would not be able to file its 10-K annual report for the fiscal
year ended Feb. 3, 2007, by the required May 4, 2007, date.
However, the company also said that it expects to make the filing
on or before May 21, 2007.
The CreditWatch listing reflects the potential for a downgrade if
the company fails to file its audited financial statements by the
extended date and its lenders declare an event of default.
"If Toys is able to file its financials on or before May 21,
2007," said Standard & Poor's credit analyst Diane Shand, "we will
remove the ratings from CreditWatch and affirm them."
TOYS "R" US: Form 10-K Filing Delay Cues Moody's to Review Ratings
------------------------------------------------------------------
Moody's Investors Service placed all long-term ratings of Toys "R"
Us, Inc. (corporate family rating of B2) on review for possible
downgrade, and downgraded the speculative liquidity rating to an
SGL-4 from an SGL-3. These actions follow the company's
announcement that it had filed for the automatic 15-day filing
extension, which will expire on May 21, 2007, for its FYE 2006
Form10-K.
Toys invoked this extension due to previously announced material
weaknesses in accounting controls, which have resulted in problems
relating to its income tax accounting. The downgrade of the
speculative grade liquidity rating reflects Moody's concerns that
Toys' liquidity could be hampered in the event the 10-K is not
filed prior to the deadline.
"Moody's will closely monitor the company's progress, with respect
not only to the preparation of the 10-K, but also any discussions
Toys and its owners Kohlberg, Kravis, Roberts, Vornado Realty
Trust, Bain Capital, and Gordon Brothers will likely have with
bank lenders and bondholders to ensure that if the 10-K is not
filed by the deadline, the necessary amendments and/or waivers
will be in place to ensure that the company remains in compliance
with any and all loan agreements and indentures. In the event the
10-K is filed before the deadline, the B2 corporate family rating
will be confirmed," stated Moody's analyst Charlie O'Shea.
Toys "R" Us, Inc., headquartered in Wayne, NJ, is the second-
largest U.S. toy retailer, with FYE February 2007 revenues of
$13 billion.
UGS CORP: Siemens Acquisition Cues S&P to Withdraw Ratings
----------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B+' corporate
credit rating, 'B+' senior secured rating, and 'B-' subordinated
debt rating for UGS Corp. The corporate credit and subordinated
ratings were removed from CreditWatch, where they were placed on
Jan. 25, 2007, with positive implications.
"The withdrawal of the ratings follows the close of its
acquisition by Siemens AG," said Standard & Poor's credit analyst
Stephanie Crane Mergenthaler. The company's term facilities were
repaid and its credit facility terminated. Additionally, the
company has defeased its $850 million of subordinated debt and
expects to repay them on June 4, 2007.
UNIQUE MONTESSORI: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: The Unique Montessori Associates, Inc.
8565 Gratitude
Plano, TX 75025
Bankruptcy Case No.: 07-40964
Type of Business: The Debtor owns a private primary school and a
day care center.
Chapter 11 Petition Date: May 8, 2007
Court: Eastern District of Texas (Sherman)
Judge: Brenda T. Rhoades
Debtor's Counsel: Eric A. Liepins, Esq.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Estimated Assets: Less than $10,000
Estimated Debts: $1 Million to $100 Million
The Debtor did not submit a list of its largest unsecured
creditors.
US AIRWAYS: Pilots Express Frustration Over Management Failures
---------------------------------------------------------------
As operations continue to deteriorate at the reorganized U.S.
Airways Group Inc., the airline's passengers and employees are
baring the brunt of poor decisions made by a management team that
is more interested in lining their pockets than in fulfilling
their promises of building a better airline.
Demonstrating their frustration and fury over management's growing
list of failures, the U.S. Airways pilots of the former America
West, who are represented by the Air Line Pilots Association,
International, today picketed the 16th Annual International
Aviation Symposium in Phoenix, Arizona, where top executives from
U.S. Airways will join their counterparts from other airlines and
government officials to discuss "New Strategies for Success."
Management's blunders have further unified the labor groups in
their efforts to achieve fair contracts and provide passengers
with world-class service, and the America West flight attendants,
who are represented by the Association of Flight Attendants,
joined the pilots on the picket line.
Though U.S. Airways has been financially successful to date, the
pilots have serious doubts that this will continue unless
management merges the two airlines. Reaching a fair, single
contract with the pilots would be a significant step toward
completing the merger and eliminating many of the problems U.S.
Airways passengers encounter as a result of running two separate
operations. Although ALPA and U.S. Airways management have been
engaged in negotiations for such an agreement for more than a year
and a half, management is only now presenting the pilots with
their first complete economic proposal.
"We've experienced more than our fair share of pain during our
industry's economic downturn while management was given carte
blanche by the federal government to severely limit our pay,
benefits, work rules and overall quality of lives while reaping
the rewards of our sacrifices," said Captain John McIlvenna,
America West MEC Chairman. "U.S. Airways' long-term success
depends upon management's ability to complete the merger of these
two carriers, implement real solutions addressing their
deficiencies with passenger service, and resolve the ongoing labor
disputes with their front-line employees. Once again, in lieu of
addressing the real problems of U.S. Airways, management has
launched a feel-good passenger service initiative and formed a
task force to study what should be an obvious problem. This makes
for good public relations but does nothing to solve the myriad of
operational problems. It's time for management to recognize our
contributions in making U.S. Airways fly at the bargaining table
and start building the world-class airline management promised
employees, investors and passengers."
During the industry downturn following 9/11, the pilots of America
West and U.S. Airways agreed to significant reductions in pay and
benefits to satisfy bankruptcy court provisions and severe ATSB
loan restrictions. The pilots also agreed to work schedules that
would maximize their work time, severely impacting their quality
of life. These sacrifices were made to ensure the survivability
of U.S. Airways, not to support inflated management compensation
packages.
U.S. Airways' financial success is undeniable. After the merger
of U.S. Airways and America West, the airline quickly became
prosperous, posting an operating profit of $507 million in 2006.
U.S. Airways CEO Doug Parker received $14.4 million in
compensation and benefits for 2006 and was also the highest-paid
airline CEO in 2005.
Operationally, however, U.S. Airways' performance has been dismal,
and passengers are growing weary of the airline's inability to
deal with these issues, which cannot be addressed simply by
implementing quick-fix service initiatives. Merging America West
and U.S. Airways into a single airline would go a long way in
eliminating many of the core operational issues and would allow
management to capture additional synergies for U.S. Airways'
passengers, investors and employees.
About US Airways Group
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE:
LCC) -- http://www.usairways.com/-- primary business activity is
the ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date.
* * *
As reported in the Troubled Company Reporter on March 13, 2007,
Standard & Poor's Ratings Services assigned its 'B' rating to US
Airways Group Inc.'s $1.6 billion secured credit facility due
2014, currently being syndicated.
VERASUN ENERGY: Intends to Offer $450 Million Senior Notes
----------------------------------------------------------
VeraSun Energy Corporation intends to offer, subject to market and
other conditions, $450 million in aggregate principal amount of
Senior Notes due 2014 and 2017.
The company intends to use the net proceeds from this offering to
finance a portion of the costs of construction and startup of a
110 million gallons per year ethanol production facility near
Reynolds, Indiana, to purchase and install corn oil extraction
equipment at its three operating plants and for other general
corporate purposes.
Headquartered in Brookings, South Dakota, VeraSun Energy
Corporation (NYSE: VSE) produces renewable fuel. The company has
three operating ethanol production facilities located in Aurora,
South Dakota, Fort Dodge and Charles City, Iowa.
VERASUN ENERGY: Posts $312,000 Net Loss in Quarter Ended March 31
-----------------------------------------------------------------
VeraSun Energy Corporation reported financial results for the
three months ended March 31, 2007.
The company increased revenues by 30.5% from the first quarter of
2006, generated cash flow from operations of $19.8 million and
ended the quarter with cash on hand of $313.0 million, including
$25.2 million of restricted cash for the construction of the
Charles City, Iowa, production facility.
The company incurred a net loss of $312,000 for the quarter
compared to net income of $2.7 million for the same period in
2006. The loss was primarily due to increased corn costs, startup
expenses relating to the Charles City facility and expenses
associated with implementation of Sarbanes-Oxley compliance.
"VeraSun is continuing to execute on its long-term growth
strategy, resulting in increased revenues and the early startup of
operations at our Charles City facility," said Donald L. Endres,
Chairman and Chief Executive Officer of VeraSun. "Our team
continued to demonstrate operational excellence by running our
Aurora and Fort Dodge facilities at 105 percent of nameplate
capacity for the quarter."
"Corn costs were up for the quarter due in part to a mark-to-
market adjustment for corn hedged for future periods," added
Endres. "Excluding the mark-to-market adjustment, our corn costs
were at the lower end of our guidance levels. The American farmer
clearly stepped up to the market opportunity with the USDA
reporting that 12.1 million additional acres are expected to be
planted to corn this season. We are confident that adequate corn
will be available to supply the growing ethanol industry."
During the first quarter, VeraSun also built up its ethanol sales,
logistics and customer service capabilities, and began marketing
its own ethanol on April 1.
"I am pleased to report that we have successfully completed the
transition to managing our own ethanol sales and distribution,"
said Endres. "This is a strategic capability which enables the
Company to more efficiently ship ethanol to market while working
more closely with our customers."
During the first quarter, VeraSun also neared completion of its
Charles City, Iowa, facility, which began production on April 11.
The plant came on-line nearly three months earlier than planned,
and is on schedule to ship its first unit train of production the
week of May 7. The production ramp-up is on schedule with the
plant approaching its nameplate capacity.
A full-text copy of the company's quarterly report on Form 10-Q
for the quarter ended March 31, 2007, is available for free at:
http://ResearchArchives.com/t/s?1ebe
About VeraSun Energy
VeraSun Energy Corporation (NYSE: VSE) -- http://www.verasun.com/
-- or -- http://www.VE85.com/-- headquartered in Brookings, South
Dakota, is committed to be a leading producer of renewable fuel.
The company has three operating ethanol production facilities
located in Aurora, South Dakota; Fort Dodge, Iowa; and Charles
City, Iowa, with two facilities under construction in Hartley,
Iowa; Welcome, Minnesota and an additional plant under development
near Reynolds, Indiana. Upon completion of the new facilities,
VeraSun will have an annual production capacity of approximately
670 MMGY. The Company has plans to extract oil from dried
distillers grains, a co-product of the ethanol process, for use in
biodiesel production. The Company markets E85, a blend of 85%
ethanol and 15% gasoline for use in Flexible Fuel Vehicles,
directly to fuel retailers under the brand VE85(TM). VE85(TM),
the first-ever branded E85, is now available at more than 90
retail locations.
VERASUN ENERGY: S&P Rates Proposed $450 Million Senior Notes at B-
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating to
VeraSun Energy Corp.'s proposed $450 million senior unsecured
notes due 2014 and 2017.
At the same time, S&P affirmed its 'B+' rating on the company's
$210 million senior secured notes and 'B+' corporate credit rating
on the company. The outlook is stable.
The company will use the proceeds of the proposed notes, along
with expected cash flow, to finance a new 110 million gallons per
year plant in Reynolds, Ind.
The company expects the plant to come on line toward the end of
2008. Other uses of the funds include corn oil extraction
capability for three plants and other corporate purposes.
"The rating on the company reflects the high refinancing risk and
the company's exposure to volatile commodity prices," said
Standard & Poor's credit analyst Justin Martin.
The outlook is stable, reflecting VeraSun's current capital
structure and expected retention and reinvestment of cash flow.
VeraSun is currently the number three producer of ethanol in the
U.S.
WARNER MUSIC: Incurs $27 Million Net Loss in 2nd Quarter 2007
-------------------------------------------------------------
Warner Music Group Corp. reported a net loss of $27 million for
the second quarter ended March 31, 2007. It had a net loss in the
second quarter of fiscal 2006 of $7 million. For the second
quarter of fiscal 2007, revenue slipped to $784 million from
$796 million in the same period last year.
"We are in the midst of transforming Warner Music Group to a
music-based content company," said Edgar Bronfman, Jr., Warner
Music Group's chairman and chief executive officer. "Despite
tough comparisons to last year and a challenging industry
environment, we achieved some important successes this quarter.
We gained album share in the largest global music market, the
U.S., achieved double-digit revenue growth in the second largest
global music market, Japan, sustained our digital leadership
position, and concluded new partnerships. Perhaps most
significantly, we advanced our initiatives to maximize the value
of our content and to diversify our revenue streams. Essential to
the on-going success of those business initiatives, we are in the
process of realigning the organization to more effectively deploy
our resources to growth areas, such as digital and video
distribution. By helping us manage physical costs, while
redeploying our resources and ongoing investments towards new
business initiatives, this realignment will ensure a successful
transformation in an evolving music industry, not just for this
year or the next, but for years to come."
Michael Fleisher, Warner Music Group's executive vice president
and chief financial officer, added, "Our realignment initiatives
are designed to improve our effectiveness, flexibility, structure
and performance. Between now and the end of the fiscal year, we
expect to incur one-time restructuring and implementation charges
ranging from $65 million to $80 million."
Second-Quarter Results
The decline in revenue for the second quarter 2006 was driven by
difficult Recorded Music comparisons against our very strong
second quarter last year. In addition, the recorded music
industry remains challenged by piracy and changing consumption
patterns in the shift from physical sales to new forms of digital
music. On a constant-currency basis, quarterly revenue fell 5%.
Declines in our physical Recorded Music revenue were only
partially offset by increases in Music Publishing and digital
Recorded Music revenue. Domestic revenue was relatively flat
while international revenue was down 4%, or 11% on a constant-
currency basis.
Operating income for the quarter dropped to $19 million from $45
million in the prior-year quarter and operating margin was down
3.2 percentage points to 2.4%. Adjusted to exclude Non-Recurring
Items, operating income for the quarter declined 22% to $35
million and operating margin was down 1.2 percentage points to
4.5%.
As of March 31, 2007, the company's balance sheet showed total
assets of $4.5 billion, total liabilities of $4.5 billion, and
total stockholders' equity of $4 million. Its accumulated deficit
as of March 31, 2007, grew to $564 million from $516 million as of
Sept. 30, 2006.
The company's March 31 balance sheet also showed strained
liquidity with total current assets of $1.2 billion available to
pay total current liabilities of $1.8 billion.
The company reported a cash balance of $362 million, total long-
term debt of $2.3 billion and net debt or total long-term debt
minus cash of $1.9 billion, all as of March 31, 2007.
Full-text copies of the company's 2007 second quarter report are
available for free at http://ResearchArchives.com/t/s?1eb8
About Warner Music Group
Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- is
a music company that operates through numerous international
affiliates and licensees in more than 50 countries, including the
Philippines.
* * *
In March 2007, Standard & Poor's Ratings Services placed its
ratings on Warner Music Group Corp., including the 'BB-' corporate
credit rating, on CreditWatch with negative implications,
following the company's statement that it is exploring a possible
merger agreement with EMI Group PLC (BB- /Watch Neg/B).
Warner Music Group Corp. carries Fitch Ratings' BB- issuer default
rating assigned in May 2006.
WELLS FARGO: Moody's Rates 2007-2 Class B-1 Certificates at Ba1
---------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by Wells Fargo Home Equity Asset-Backed
Securities 2007-2 Trust and ratings ranging from Aa1 to Ba2 to the
subordinate certificates in the deal.
The securitization is backed by Wells Fargo Bank, N.A. originated
or acquired adjustable-rate and fixed-rate subprime residential
mortgage loans. The ratings are based primarily on the credit
quality of the loans and on the protection against credit losses
provided by subordination, excess spread, overcollateralization, a
rate cap, an interest rate swap agreement, and mortgage insurance.
After taking into account the benefits of the mortgage insurance,
Moody's expects collateral losses to range from 4.85% to 5.35%.
Wells Fargo Bank, N.A. will service the mortgage loans in the
transaction. Moody's has assigned Wells Fargo Bank, N.A. its top
servicer quality rating of SQ1 as a primary servicer of subprime
residential mortgage loans.
The complete rating actions are:
Wells Fargo Home Equity Asset-Backed Securities 2007-2 Trust
* Cl. A-1, Assigned Aaa
* Cl. A-2, Assigned Aaa
* Cl. A-3, Assigned Aaa
* Cl. A-4, Assigned Aaa
* Cl. M-1, Assigned Aa1
* Cl. M-2, Assigned Aa2
* Cl. M-3, Assigned Aa3
* Cl. M-4, Assigned A1
* Cl. M-5, Assigned A2
* Cl. M-6, Assigned A3
* Cl. M-7, Assigned Baa1
* Cl. M-8, Assigned Baa2
* Cl. M-9, Assigned Baa3
* Cl. B-1, Assigned Ba1
* Cl. B-2, Assigned Ba2
WENTWORTH ENERGY: Hein & Associates Raises Going Concern Doubt
--------------------------------------------------------------
Hein & Associates LLP in Dallas, Texas, raised substantial doubt
that Wentworth Energy Inc. will be able to continue as a going
concern after auditing the company's financial statements as of
Dec. 31, 2006. Hein reported that the company is uncertain
whether it will be able to achieve profitable operations,
successfully restructure its debt or raise additional capital.
As of Dec. 31, 2006, the company had total assets of $55,776,145
and total liabilities of $118,326,838, resulting in a total
stockholders' deficit of $62,550,693. The company also had a
negative working capital as of Dec. 31, 2006, with total current
assets of $5,635,758 and total current liabilities of
$118,171,597.
The company's accumulated deficit grew to $89,179,713 as of Dec.
31, 2006, from $2,645,880 as of Dec. 31, 2005.
For the year ended Dec. 31, 2006, the company generated total
revenue of $3,213,855 and incurred a net loss of $86,533,833. For
the year ended Dec. 31, 2005, the company generated total revenue
of $29,673 and incurred a net loss of $2,499,574.
Liquidity and Capital Resources
The company's primary sources of liquidity during the year were
$3,000,000 of operating revenues. The company has segregated
these funds; however, since additional capital is required for
operating purposes, management intends to negotiate for full or
partial release of such funds. As of the last trading day of
2006, its share price was $1.38.
The company incurred significant losses from operations and is in
default on its debt.
With respect to the $1,500,000 convertible debentures, the company
failed to meet the deadline for the effectiveness of the
registration statement or if the registration is unavailable after
it becomes effective, and the company is required to pay, but have
not paid, either in cash or common stock, liquidated damages of 2%
of the liquidated value of the convertible debentures within three
business days of such failure and every 30-day period thereafter
until such failure is cured. Any liquidated damages begin
accruing on the date of any such failure. The company intends to
file a new registration statement within 30 days of completion of
the final documentation relating to the restructuring of its
senior secured convertible notes.
On April, 2, 2007, the company entered into a term sheet with the
holders of the senior secured convertible notes to restructure the
notes and related agreements to permit their early repayment.
Provided the notes are repaid in full by May 31, 2007, the company
would pay the holders the $32,400,000 principal balance plus
$9,600,000 of accrued interest and penalties. If the company does
not repay the notes in full by May 31, 2007, the principal balance
of the notes would increase to $47,000,000.
A full-text copy of the company's 2006 annual report is available
for free at http://ResearchArchives.com/t/s?1eba
About Wentworth Energy
Wentworth Energy Inc. in Palestine, Texas, (OTC BB: WNWG) --
http://www.wentworthenergy.com/-- explores, drills and develops
oil and gas. It currently has oil and gas interests in Anderson
County, Freestone County, Jones County, Leon County and Polk
County, Texas. Its oil and gas activities are currently conducted
solely in the U.S. It does not currently own any interests in any
mining properties. As of Dec. 31, 2006, the company had a staff
of 61 employees, mostly working on the drilling of the wells.
WEST CORPORATION: Moody's Lowers Sr. Sec. Credit Rating to B1
-------------------------------------------------------------
Moody's Investors Service lowered the senior secured credit
facility rating of West Corporation to B1 from Ba3 while affirming
all other credit and liquidity ratings. The lowering of the
senior secured credit facility rating reflects the larger share of
senior secured debt in the capital structure pro forma for the
proposed upsizing of the senior secured term loan facility to
$2.4 billion. The rating outlook is stable.
The B2 Corporate Family Rating continues to be constrained by
substantial leverage, low levels of projected free cash flow to
debt and declining pricing trends in the conferencing segment and
certain business units within the communications segment. The
ratings are supported by a large revenue base, solid operating
margins, a track record of improving financial performance and
long term relationships with a blue chip client base. The SGL-2
rating reflects a good liquidity position supported by substantial
pro forma availability under the $250 million revolving credit
facility.
These ratings (assessments) were affirmed:
* Corporate family rating, B2
* Probability of default rating, B2
* $650 million 9.5% senior unsecured notes due 2014, Caa1
(to LGD 5, 82% from LGD 5, 81%)
* $450 million 11% senior subordinated notes due 2016, Caa1
(to LGD 6, 94% from LGD 6, 93%)
* Speculative grade liquidity rating, SGL-2
These ratings (assessments) were lowered:
* $2.4 billion (upsized from $2.265 billion) senior secured
term loan due 2013, to B1 (LGD 3, 33%) from Ba3 (LGD 3, 32%)
* $250 million senior secured revolver due 2012,
to B1 (LGD 3, 33%) from Ba3 (LGD 3, 32%)
The stable outlook anticipates moderate revenue and EBIT growth
over the next 12-18 months. Cash flow from operations is expected
to be used to fund capital expenditures of about $100 million per
year, niche acquisitions that complement existing business
segments and required term loan amortization.
Based in Omaha, Nebraska, West is a leading provider of business
process outsourcing services. The company reported revenues of
approximately $1.9 billion for the year ended December 31, 2006.
* Annapolis Group Names Larry Yumkas as Chief Operating Officer
---------------------------------------------------------------
Annapolis Consulting Group Limited has named veteran bankruptcy
attorney Lawrence Yumkas, Esq. as its chief operating officer.
Mr. Yumkas will lead the business development and strategic
endeavors of ACG Limited and oversee its consulting engagements.
Mr. Yumkas joins ACG from Rosenberg, Martin, Greenberg, a premier
Baltimore midsize full-service business law firm, where he headed
the bankruptcy, workouts, and creditors' rights practice. In more
than 18 years in private practice representing debtors, lenders,
creditors, bankruptcy trustees, receivers, and investors in
distressed companies, Yumkas has become recognized as an expert in
efficiently and creatively resolving complex commercial and
insolvency- related disputes. Yumkas is active in the insolvency
community and serves currently as president of the Bankruptcy Bar
Association for the District of Maryland.
"ACG sees tremendous market demand for insolvency-related
consulting, particularly for services targeted to the high-growth
insurance and hedge fund captives market. We also foresee growth
in the need for receivers, as many companies now want to steer
clear of bankruptcy as a means to stabilize or liquidate a
business or its assets. Because of his unique combination of
skills and experience, very few people have Yumkas' level of
strategic knowledge and ability in these areas," said Tate
Russack, director of ACG Limited.
Russack refers to the growing trend of insurance captives, in
which corporations form their own insurance entities to mitigate
their risk while controlling the investment of the premiums. As
the popularity of insurance captives grows, there will be strong
demand for insurance captive runoff and insolvency expertise, like
that of ACG and its new COO. Over the past six years, Yumkas has
served as director of five offshore captive insurance
subsidiaries, overseeing their bankruptcy liquidation and helping
to administer over $600 million in claims in these and related
entities.
"The captives business is high-growth, highly regulated, and
subject to actuarial risk, investment risk, and inept and
unscrupulous management risks, among other pitfalls," said Mr.
Yumkas. "In addition, there are many solvent but dormant captives
that owners would like to close or divest. This combination of
factors presents great opportunities for ACG, as we foresee
increased demand for expert professionals experienced in captive
liquidations, runoffs, and takeovers."
About ACG Limited
Annapolis Consulting Group Limited -- http://www.acglimited.com/
-- is an international consulting firm specializing in the
resolution of complex insolvency matters. ACG expedites optimal
outcomes through a veteran team of insolvency and runoff experts,
including accomplished professionals in accounting, legal,
bankruptcy trustee law, finance, international affairs, and
industry-specific operations.
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:
In re Marick Foods, Inc.
Bankr. W.D. Tex. Case No. 07-30487
Chapter 11 Petition filed May 1, 2007
See http://bankrupt.com/misc/txwb07-30487.pdf
In re CBW Industries, Inc.
Bankr. W.D. Tex. Case No. 07-51097
Chapter 11 Petition filed May 1, 2007
See http://bankrupt.com/misc/txwb07-51097.pdf
In re Olivier J. Bourgoin
Bankr. W.D. Tex. Case No. 07-51104
Chapter 11 Petition filed May 1, 2007
See http://bankrupt.com/misc/txwb07-51104.pdf
In re Industrial Wellness Center, Inc.
Bankr. E.D. Tex. Case No. 07-40930
Chapter 11 Petition filed May 2, 2007
See http://bankrupt.com/misc/txeb07-40930.pdf
In re Fisk Area Wide Services, Inc.
Bankr. W.D. Tex. Case No. 07-10807
Chapter 11 Petition filed May 2, 2007
See http://bankrupt.com/misc/txwb07-10807.pdf
In re Joe Edd Looney, Jr.
Bankr. E.D. Ark. Case No. 07-12308
Chapter 11 Petition filed May 3, 2007
See http://bankrupt.com/misc/akeb07-12308.pdf
In re Diamond Spring Enterprise, L.L.C.
Bankr. D. N.J. Case No. 07-16192
Chapter 11 Petition filed May 3, 2007
See http://bankrupt.com/misc/njb07-16192.pdf
In re Dell's Firearm Specialists, Inc.
Bankr. E.D. Pa. Case No. 07-12628
Chapter 11 Petition filed May 3, 2007
See http://bankrupt.com/misc/paeb07-12628.pdf
In re Roy Bartley Contracting, Inc.
Bankr. W.D. Pa. Case No. 07-22800
Chapter 11 Petition filed May 3, 2007
See http://bankrupt.com/misc/pawb07-22800.pdf
In re Price Village Family Medical Clinic, Inc.
Bankr. S.D. Tex. Case No. 07-10277
Chapter 11 Petition filed May 3, 2007
See http://bankrupt.com/misc/txsb07-10277.pdf
In re Galindo Masonry, Inc.
Bankr. C.D. Calif. Case No. 07-12461
Chapter 11 Petition filed May 4, 2007
See http://bankrupt.com/misc/cacb07-12461.pdf
In re FCE Consultants, Inc.
Bankr. D. Conn. Case No. 07-31009
Chapter 11 Petition filed May 4, 2007
See http://bankrupt.com/misc/ctb07-31009.pdf
In re Silent Partner Holdings, L.L.C.
Bankr. D. Mass. Case No. 07-41695
Chapter 11 Petition filed May 4, 2007
See http://bankrupt.com/misc/mab07-41695.pdf
In re Greater Metropolitan Restoration Center
Bankr. M.D. N.C. Case No. 07-10634
Chapter 11 Petition filed May 4, 2007
See http://bankrupt.com/misc/ncmb07-10634.pdf
In re Cecil Robert Clark
Bankr. W.D. Tex. Case No. 07-10815
Chapter 11 Petition filed May 4, 2007
See http://bankrupt.com/misc/txwb07-10815.pdf
In re Yolanda B. Suarez
Bankr. C.D. Calif. Case No. 07-11482
Chapter 11 Petition filed May 7, 2007
See http://bankrupt.com/misc/cacb07-11482.pdf
In re Brookema Company
Bankr. N.D. Ill. Case No. 07-08299
Chapter 11 Petition filed May 7, 2007
See http://bankrupt.com/misc/ilnb07-08299.pdf
In re Technological Solutions International, L.P.
Bankr. D. Mont. Case No. 07-60480
Chapter 11 Petition filed May 7, 2007
See http://bankrupt.com/misc/mtb07-60480.pdf
In re Boylan International, Ltd.
Bankr. S.D. N.Y. Case No. 07-11372
Chapter 11 Petition filed May 7, 2007
See http://bankrupt.com/misc/nysb07-11372.pdf
In re VMB Enterprises, Inc.
Bankr. M.D. Pa. Case No. 07-51115
Chapter 11 Petition filed May 7, 2007
See http://bankrupt.com/misc/pamb07-51115.pdf
In re Greenwald Automotive, Inc.
Bankr. W.D. Pa. Case No. 07-22951
Chapter 11 Petition filed May 7, 2007
See http://bankrupt.com/misc/pawb07-22951.pdf
In re US Starcraft Corporation
Bankr. W.D. Wash. Case No. 07-12068
Chapter 11 Petition filed May 7, 2007
See http://bankrupt.com/misc/wawb07-12068.pdf
In re Iris Malcolm
Bankr. N.D. Ga. Case No. 07-11106
Chapter 11 Petition filed May 8, 2007
See http://bankrupt.com/misc/ganb07-11106.pdf
In re Mark L. Silverman, M.D., J.D., P.C.
Bankr. E.D. Mich. Case No. 07-49052
Chapter 11 Petition filed May 8, 2007
See http://bankrupt.com/misc/mieb07-49052.pdf
In re American Expediting Services, Inc.
Bankr. E.D. Mich. Case No. 07-49076
Chapter 11 Petition filed May 8, 2007
See http://bankrupt.com/misc/mieb07-49076.pdf
In re G.D.D.L., Inc.
Bankr. W.D. Pa. Case No. 07-22965
Chapter 11 Petition filed May 8, 2007
See http://bankrupt.com/misc/pawb07-22965.pdf
In re Inside the Circle, Ltd.
Bankr. W.D. Wash. Case No. 07-12084
Chapter 11 Petition filed May 8, 2007
See http://bankrupt.com/misc/wawb07-12084.pdf
*********
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 ***