/raid1/www/Hosts/bankrupt/TCR_Public/070628.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, June 28, 2007, Vol. 11, No. 151
Headlines
ADVANCED CARDIOLOGY: Wants Miguel Carbuccia as Expert Witness
ADVANCED MEDICAL: Updated Guidance Shows May 2007 Recall Impact
AIRTRAN HOLDINGS: Nominees Officially Joins Midwest's Board
AMERICREDIT CORP: Closes Private Placement of $200 Mil. Sr. Notes
BCE INC: Telus Drops Takeover Pursuit, Balks at Bid Process
BCE INC: Shares Drop as Telus Elects to Withdraw Bid
BCE INC: Omers Plans Investment After Ownership Issue is Resolved
CAPRIUS INC: Posts $783,609 Net Loss in Quarter Ended March 31
CATALYST PAPER: Cancels $200 Mil. Senior Notes Private Placement
CHASE COMMERCIAL: Fitch Affirms B- Rating on $8.1MM Class I Certs.
CHASE MORTGAGE: Fitch Rates Two Privately Offered Classes at B
CHASE MORTGAGE: Fitch Rates $1 Million Class B-4 Certs. at B
CITICORP MORTGAGE: Fitch Puts Low-B Ratings on Two Certificates
CLINICAL DATA: Posts $6.2 Mil. Net Loss in Quarter Ended Dec. 31
COMPASS MINERALS: Moody's Lifts Corporate Family Rating to Ba3
CREDIT SUISSE: Fitch Holds Low-B Ratings on Three Certificates
CREDIT SUISSE: Fitch Affirms B+ Rating on $29.3MM Class H Certs.
CSFB ABS: S&P Puts Default Rating on 2001-HE30 Class B-F Certs.
DAVE & BUSTER'S: Increased Sales Prompt S&P's Stable Outlook
DEL LABORATORIES: Liquidity Concerns Cue S&P to Junk Credit Rating
DELTATECH CONTROLS: Moody's Rates $166MM Credit Facility at B1
DIRECT INSITE: March 31 Balance Sheet Upside-down by $3.05 Mil.
DOLLAR GENERAL: Buck Acquisition Extends Tender Offer Expiration
DORAL FINANCIAL: Fitch Downgrades Junks Issuer Default Rating
FRESENIUS MEDICAL: Prices $500 Mil. of 6-7/8% Sr. Notes Offering
GE COMMERCIAL: Fitch Affirms Low-B Ratings on Three Classes
GLOBAL POWER: Equity Panel Wants Noteholder Claims Determined
GREGG APPLIANCES: Commences $111.2 Mil. Senior Notes Tender Offer
GREGG LUBONTY: Case Summary & 18 Largest Unsecured Creditors
GSI GROUP: S&P Revises Outlook to Negative from Stable
GSI GROUP: Moody's Reviews Ratings and May Downgrade
HANOVER INSURANCE: S&P Affirms BB+ Counterparty Credit Rating
HARGRAY HOLDINGS: S&P Revises Outlook from Positive to Stable
HARRY & DAVID: Improved Results Cue S&P's Stable Outlook
HINES NURSERIES: Moody's Junks Corporate Family Rating
HUNTSMAN CORP: Inks $9.6 Billion Agreement with Basell
HUNTSMAN CORP: Moody's Reviews Ratings and May Downgrade
ION MEDIA: Revises Exchange Offer; Extends Offer Until July 11
J.P. MORGAN: Fitch Affirms BB Rating on $20.1 Mil. Class H Certs.
J.P. MORGAN: Fitch Affirms B- Rating on $2.6 Million Class P Loans
KB HOME: To Redeem All $250 Million Senior Subordinated Notes
LAKE AT LAS VEGAS: Moody's Junks Rating on Proposed $540MM Loan
LASALLE COMMERCIAL: Fitch Affirms Low-B Ratings on Six Classes
LBI MEDIA: Moody's Rates New $225 Million Senior Notes at B2
LENNAR CORP: Posts $244.2 Million Net Loss in Qtr. Ended May 31
LIMITED BRANDS: Plans Corporate Downsizing to Save $100 Million
MAPS CLO: S&P Rates $16 Million Class D Notes at BB
METALS USA: Moody's Junks Rating on Proposed $300MM Sr. Notes
METALS USA: Planned Leverage Increase Cues S&P to Cut Rating to B-
MORGAN STANLEY: Moody's Assigns Low-B Ratings on Six Certificates
MOSAIC COMPANY: Elects to Prepay $150 Million Term Loan on June 29
MOSAIC CO: Fitch Affirms Ratings and Removes Negative Watch
MRU STUDENT: Moody's Puts $13 Million Class C Notes at (P)Ba2
MTR GAMING: Moody's Lowers Senior Unsecured Note's Rating to B2
NATIONAL COAL: Poor Performance Cues Moody's to Review Ratings
NATIONAL MENTOR: S&P Revises Outlook to Negative from Stable
NORTH AMERICAN: Court Okays Mellon Bank Settlement Agreement
NEVADA POWER: S&P Rates Proposed $350 Million Bonds at BB+
NMH HOLDINGS: Moody's Rates Corporate Family Rating at B3
NORDYKE VENTURES: Case Summary & Eight Largest Unsecured Creditors
NUANCE COMM: Moody's Rates Proposed $225MM Sr. Term Loan at B1
ONEIDA LTD: S&P Assigns Corporate Credit Rating at B
OPTI CANADA: Moody's Withdraws Ba3 Rating on $450 Mil. Term Loan
OPTI CANADA: Increased Debt Level Cues S&P to Lower Rating to BB-
PACIFIC LUMBER: Can Access Cash Collateral Until July 20
PACIFIC LUMBER: Asks Court to Approve $75 Million DIP Financing
PETROHAWK: Moody's Places B2 Corporate Family Rating under Review
PJM FAIRVIEW: Files for Chapter 11 Protection in Oregon
PJM FAIRVIEW: Case Summary & Nine Largest Unsecured Creditors
PJM FAIRVIEW: Section 341(a) Meeting Scheduled for July 30
PQ CORPORATION: Commences Cash Tender Offer for $275 Million Notes
PRUDENTIAL MORTGAGE: Closes $20 Mil. Loan for Champaign Facility
PRUDENTIAL STRUCTURED: Fitch Holds C Ratings on Four Note Classes
R.J. GATORS: Case Summary & 20 Largest Unsecured Creditors
RESOURCE REAL: Fitch Rates $28.75 Million Fixed-Rate Notes at B
RITCHIE (IRELAND): Taps LeBoeuf Lamb as General Bankruptcy Counsel
RITCHIE (IRELAND): Wants to Hire Development Specialists as CRO
RITCHIE (IRELAND): TAps Houlihan Lokey as Investment Bankers
SAGITTARIUS BRANDS: Declining Revenues Cue S&P's Downgrade to B-
SEA CONTAINERS: Creditor Panel Raises Concerns on DIP Financing
SEA CONTAINERS: Trustee Drops Mariner, Dune & Trilogy from Panel
SIERRA PACIFIC: S&P Rates Proposed $325 Million Bonds at BB+
SLATE CDO: Fitch Rates $5.3 Mil. Class C Deferrable Notes at BB
TARGETED GENETICS: Commences $19.5 Million Common Stock Offering
TD BANKNORTH: Soliciting Amendment Consents for Notes Indentures
TOURO COLLEGE: Moody's Upgrades Rating to Ba1 from Ba2
TRANS ENERGY: Posts $577,594 Net Loss in Quarter Ended March 31
VISTAR CORP: S&P Puts Corp. Credit Rating at B with Stable Outlook
WACHOVIA BANK: Fitch Affirms Low-B Ratings on Six note Classes
ZIFF DAVIS: Selling Enterprise Group's Assets for $150MM in Cash
* Davis Polk Elects 15 New Partners Effective July 1
* S&P Takes Various Ratings Actions on 63 Classes
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
ADVANCED CARDIOLOGY: Wants Miguel Carbuccia as Expert Witness
-------------------------------------------------------------
Advanced Cardiology Center Corp. ask the U.S. Bankruptcy Court for
the District of Puerto Rico for permission to engage the services
of Eng. Miguel Carbuccia Rivera as its expert witness.
The Debtor relates to the Court that Mr. Carbuccia has agreed to
prepare an expert report to testify as an witness in the
proceedings of the Debtor's civil case, ISCI 2005-01176 (206).
The Debtors will pay Mr. Carbuccia an hourly rate of $85.
Mr. Carbuccia claims to be a disinterested person since:
a. he is not a creditor, an equity security holders or
insiders;
b. he is not and was not, within two years before the date
of filing of the bankruptcy petition, a director, officer,
or employeee of the Debtor; and
c. he does not have an interest materially adverse to the
interest of the estate or of any class of creditors or
equity security holders, by reason of any direct or
indirect relationship to, connection with, or interest in,
the Debtor.
Mr. Carbuccia can be reached at:
P.O. Box 191601
Hato Rey Station
San Juan, Puerto Rico 00919-1602
Telephone: (787) 632-5906
Based in Mayaguez, Puerto Rico, Advanced Cardiology Center Corp.
filed for Chapter 11 protection on Jan. 8, 2007 (Bankr. D. P.R.
Case No. 07-00061). Alexis Fuentes-Hernandez at Fuentes Law
Offices represents the Debtor. When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million and $50 million.
ADVANCED MEDICAL: Updated Guidance Shows May 2007 Recall Impact
---------------------------------------------------------------
Advanced Medical Optics Inc. has provided financial guidance for
2007 and 2008 that reflects the estimated impact of the company's
May 2007 global recall of its MoisturePlus(TM) multipurpose
solution.
For 2007, the company expects sales in the range of $1,050 million
to $1,070 million and an adjusted loss per share in the range of
$0.95 to $1.15. The company's adjusted per-share guidance
excludes the impact of charges and write-offs associated with
acquisitions, recapitalizations and unrealized gains or losses on
derivative instruments and other one-time charges. Previous 2007
guidance was $1,150 million to $1,175 million in sales and $1.40
to $1.55 in adjusted EPS.
The revised guidance includes:
-- An estimated reduction of approximately $100 million to
$120 million in net sales.
-- Estimated costs to conduct the recall and introduce a
different branded multipurpose solution in late 2007.
-- Higher expected incremental interest expense because the
company does not expect to reduce its debt levels as
quickly as previously forecast.
-- Adverse tax impacts created by the shift in the geographic
mix of sales and income as a result of the removal of
MoisturePlus(TM) from the market.
Based on its expectation for 2007, the company's guidance for 2008
sales is a range of $1,230 million to $1,250 million, and a range
of $1.55 to $1.75 for 2008 adjusted earnings per share. Previous
2008 guidance was $1,350 million to $1,370 million in sales, and
$2.25 to $2.40 adjusted EPS.
"Since initiating the recall one month ago, we have been fully
focused on addressing the needs of patients, eye care
professionals and customers while working closely with regulatory
agencies around the world to ensure a swift, thorough and
coordinated effort," said Jim Mazzo, AMO chairman, president and
chief executive officer. "While the near-term financial
implications of the recall are significant, I am confident that we
have taken the appropriate steps and are now well positioned to
turn our attention to re-entering the multipurpose market before
the end of the year."
Plan to Re-Enter the Multipurpose Market
AMO is planning to launch a multipurpose product using an existing
proprietary formulation approved by various regulatory agencies
across the globe, including the Food & Drug Administration. The
company expects the solution to be marketed and sold globally
under the company's flagship Complete(R) brand name and to
reinforce a rub-and-rinse regimen for effective contact lens
disinfection and comfort. AMO has stepped up production at both
of its eye care manufacturing facilities and anticipates having
the Complete(R) multipurpose solution on retail shelves by the end
of the third quarter. This Complete(R) multipurpose solution will
complement AMO's other existing eye care products, including its
rewetting drops and hydrogen peroxide systems.
Recall Background
AMO initiated a global recall of its MoisturePlus(TM) multipurpose
solution on May 25, 2007, after the U.S. Centers for Disease
Control and Prevention identified through the preliminary
results of a study a potential link between the product and
Acanthamoeba keratitis (AK), a rare but serious infection of
the cornea caused by a naturally occurring water-borne organism.
AMO immediately halted product shipments, recalled product from
the marketplace and encouraged consumers to discontinue use
through news announcements, Internet postings, notifications to
eye care practitioners and their professional organizations and
other means. The company continues to work closely with the CDC
and FDA to assess the data the agencies are collecting.
About Advanced Medical
Headquartered in Santa Ana, California, Advanced Medical Optics
-- http://www.amo-inc.com/-- (NYSE: EYE) develops, manufactures
and markets ophthalmic surgical and contact lens care products.
The company has operations in Germany, Japan, Ireland, Puerto
Rico and Brazil.
* * *
As reported in the Troubled Company Reporter on May 31, 2007,
Moody's Investors Service placed the ratings of Advanced Medical
Optics, Inc. on review for possible downgrade following AMO's
voluntary withdrawal of its Complete MoisturePlus contact lens
solution. Ratings affected include B1 Corporate Family Rating,
B1 Probability of Default rating, and B3 (LGD5/81%) rating on
$251 million convertible senior subordinated notes due 2024.
AIRTRAN HOLDINGS: Nominees Officially Joins Midwest's Board
-----------------------------------------------------------
AirTran Holdings, Inc., the parent of AirTran Airways, disclosed
its slate of nominees was officially elected as directors of
Midwest Air Group, Inc. by the Midwest shareholders at Midwest's
Annual Meeting, held on June 14, 2007. According to the certified
results, 65% of shares voted were in favor of John Albertine,
Jeffrey Erickson and Charles Kalmbach.
"The shareholders have overwhelmingly spoken and have voted for
change inside the Midwest boardroom," Joe Leonard, chairman and
CEO of AirTran Airways said. "As expected, the certification of
the election results underscores that the Midwest owners are not
pleased with the status quo attitude of the company's 'go-it-
alone' business plan and that they voted for the merger with
AirTran. It is clearly time to move forward toward combining our
two companies and building a stronger airline that will provide
value to shareholders and greater opportunities for employees and
the traveling public. We look forward to meeting with the new
board of Midwest on July 16, 2007, with the goal of moving toward
effecting a definitive merger agreement."
AirTran Airways, Inc. (NYSE: AAI) -- http://www.airtran.com/--
operates over 600 daily flights to 50 destinations. The airline's
hub is at Hartsfield-Jackson Atlanta International Airport, where
it is the second largest carrier. AirTran Airways recently added
the fuel-efficient Boeing 737-700 aircraft to create America's
youngest all-Boeing fleet. The airline is also the first carrier
to install XM Satellite Radio on a commercial aircraft and the
only airline with Business Class and XM Satellite Radio on every
flight.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its ratings on AirTran
Holdings Inc. and its primary operating subsidiary, AirTran
Airways Inc., including the 'B-' corporate credit rating on
AirTran Holdings.
As reported in the Troubled Company Reporter on Nov. 23, 2006,
Moody's Investors Service confirmed its B3 Corporate Family Rating
for AirTran Holdings Inc. and its Caa1 rating on the company's
7% Guaranteed Convertible Notes Due July 1, 2023, in connection
with its implementation of its Probability-of-Default and Loss-
Given-Default rating methodology for the Transportation sector.
Moody's also assigned an LGD6 rating to those loans, suggesting
noteholders will experience a 91% loss in the event of a default.
AMERICREDIT CORP: Closes Private Placement of $200 Mil. Sr. Notes
-----------------------------------------------------------------
AmeriCredit Corp. has completed the private issuance of
$200 million of 8.50% Senior Notes due 2015 to certain qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended.
The Notes, which are unsecured, were priced at par. The proceeds
will be used for general corporate purposes, including the
repayment of AmeriCredit's 1.75% convertible senior notes due in
2023, which are first callable in November 2008.
Headquartered in Fort Worth, Texas, AmeriCredit Corp. (NYSE:ACF) -
- http://www.americredit.com/-- is an independent automobile
finance company that provides financing solutions indirectly
through auto dealers and directly to consumers in the United
States and Canada. AmeriCredit was founded in 1992 and has over
one million customers and approximately $15 billion in managed
auto receivables.
* * *
As reported in the Troubled Company Reporter on June 20, 2007,
Moody's Investors Service issued a rating of 'Ba3' to AmeriCredit
Corp.'s $200 million issue of senior unsecured notes. The rating
outlook is stable.
BCE INC: Telus Drops Takeover Pursuit, Balks at Bid Process
-----------------------------------------------------------
TELUS Corp. has elected not to submit an offer to acquire BCE Inc.
as part of the strategic review process disclosed by BCE on April
17, 2007. The inadequacies of BCE's bid process did not make it
possible for TELUS to submit an offer.
As reported in the Troubled Company Reporter on June 25, 2007,
TELUS confirmed it has entered into a mutual non-disclosure and
standstill agreement and is pursuing non-exclusive discussions
with BCE about a possible business combination.
CPPI Partners Withdraw from Bid
The Caisse de depot et placement du Quebec has withdrawn from the
consortium of The Canada Pension Plan Investment Board and
Kohlberg Kravis Roberts & Co. formed last April 17 that has
undertaken steps to proceed to the privatization of BCE Inc.
According to Chris Fournier and Frederic Tomesco of Bloomberg
News, Onex Corp. that tied with the same consortium also withdrew
from the BCE pursuit.
BCE gave bidders little time to prepare offers, setting the
deadline for bids at 9 a.m. on June 26, 2007, Mr. Fournier and Mr.
Frederic report. Analysts say bidders didn't appreciate the rush.
About BCE Inc.
Headquartered in Montreal, Canada, Bell Canada International Inc.
(TSX, NYSE: BCE) (NEX:BI.H) -- http://www.bci.ca/-- provides a
suite of communication services to residential and business
customers in Canada. Under the Bell brand, the company's services
include local, long distance and wireless phone services, high-
speed and wireless Internet access, IP-broadband services,
information and communications technology services and direct-to-
home satellite and VDSL television services. Other BCE businesses
include Canada's premier media company, Bell Globemedia, and
Telesat Canada, a pioneer and world leader in satellite operations
and systems management.
The company is operating under a Plan of Arrangement approved by
the Ontario Superior Court of Justice, pursuant to which BCI
intends to monetize its assets in an orderly fashion and resolve
outstanding claims against it in an expeditious manner with the
ultimate objective of distributing the net proceeds to its
shareholders and dissolving the company.
BCE INC: Shares Drop as Telus Elects to Withdraw Bid
----------------------------------------------------
Shares of BCE Inc. dropped CDN$1.23 or 3%, to CDN$39.49, after
Telus Corp. announced its withdrawal from the bidding race to take
BCE private, John Kipphoff of Bloomber News reports.
The decrease is the company's biggest since April 30.
Reports say that Telus was seen to likely win the bidding war to
acquire BCE, because it would have more costs savings from a
combination than three other suitors, all combinations of pension
funds and buyout firms.
Canadian stocks also fell three straight days after Telus'
withdrawal, including shares of bullion miner Barrick Gold Corp.
and gas company Canadian Natural Resources Ltd.
About BCE Inc.
Headquartered in Montreal, Canada, Bell Canada International Inc.
(TSX, NYSE: BCE) (NEX:BI.H) -- http://www.bci.ca/-- provides a
suite of communication services to residential and business
customers in Canada. Under the Bell brand, the company's services
include local, long distance and wireless phone services, high-
speed and wireless Internet access, IP-broadband services,
information and communications technology services and direct-to-
home satellite and VDSL television services. Other BCE businesses
include Canada's premier media company, Bell Globemedia, and
Telesat Canada, a pioneer and world leader in satellite operations
and systems management.
The company is operating under a Plan of Arrangement approved by
the Ontario Superior Court of Justice, pursuant to which BCI
intends to monetize its assets in an orderly fashion and resolve
outstanding claims against it in an expeditious manner with the
ultimate objective of distributing the net proceeds to its
shareholders and dissolving the company.
BCE INC: Omers Plans Investment After Ownership Issue is Resolved
-----------------------------------------------------------------
The Ontario Municipal Employees Retirement System, Canada's sixth
largest pension fund manager, decided not to join any consortium
bidding to takeover BCE Inc., after holding talks with the groups
led by the Ontario Teachers' Pension Plan and the Canada Pension
Plan Investment Board, Bloomberg reports.
However, Omers will instead invest in BCE after the ownership
battle is resolved.
As reported in the Troubled Company Reporter on June 7, 2007,
the Ontario Teachers' Pension Plan, BCE Inc.'s largest
shareholder, and its U.S. partner Providence Equity Partners Inc.
confirmed that Teachers' Private Capital, the plan's private
investment arm, have signed non-disclosure and standstill
agreements with BCE, officially entering in the bidding race in
taking BCE private.
BCE is reviewing two potential bidders that are confirmed to be in
privatization talks are:
* a group led by the Canada Pension Plan Investment Board,
along the New York buyout firm, Kohlberg Kravis Roberts; and
* a group led by the New York private equity firm Cerberus
Capital Management LP, along with the Hospitals of Ontario
Pension Plan. Some reports say OPTrust and CanWest Global
Communications are also part of the consortium.
About BCE Inc.
Headquartered in Montreal, Canada, Bell Canada International Inc.
(TSX, NYSE: BCE) (NEX:BI.H) -- http://www.bci.ca/-- provides a
suite of communication services to residential and business
customers in Canada. Under the Bell brand, the company's services
include local, long distance and wireless phone services, high-
speed and wireless Internet access, IP-broadband services,
information and communications technology services and direct-to-
home satellite and VDSL television services. Other BCE businesses
include Canada's premier media company, Bell Globemedia, and
Telesat Canada, a pioneer and world leader in satellite operations
and systems management.
The company is operating under a Plan of Arrangement approved by
the Ontario Superior Court of Justice, pursuant to which BCI
intends to monetize its assets in an orderly fashion and resolve
outstanding claims against it in an expeditious manner with the
ultimate objective of distributing the net proceeds to its
shareholders and dissolving the company.
CAPRIUS INC: Posts $783,609 Net Loss in Quarter Ended March 31
--------------------------------------------------------------
Caprius Inc. reported a net loss of $783,609 for the second
quarter ended March 31, 2007, compared with a net loss of $711,202
for the same period ended March 31, 2006.
Revenue for the second quarter ended March 31, 2007, grew 135% to
$639,597 from $272,038 for the second quarter last year. On a
sequential basis, revenues grew 26% compared to the first quarter
of fiscal 2007. This quarter continues Caprius' sequential
quarterly revenue growth of 18%, 25%, 26%, and 26% for the third
and fourth quarters of fiscal 2006 and the first and second
quarters of fiscal 2007, respectively.
Dwight Morgan, president & chief executive officer of Caprius
commented, "We are very pleased with the continuing growth we are
seeing as more and more healthcare providers realize the
tremendous economic and environmental benefits of our proprietary
solution for on-site disinfection and disposal of medical waste.
The increase in sales this quarter was largely the result of our
further penetration of the dialysis market. As announced last
quarter, we received orders for several SteriMed Systems from one
of the largest independent providers of dialysis services in the
United States and we are very encouraged by the progress with this
relationship. Additionally, we continue to expand our business by
developing new markets such as small hospitals. Finally, our
recently formed partnerships with McKesson Medical-Surgical and
Henry Schein Inc., two of the leading distributors in the
healthcare arena, dramatically expand our sales reach and we are
confident that they will help accelerate our market penetration."
Cost of product sales increased to $370,907 versus $174,186 for
the quarter ended March 31, 2006.
Research and development expense decreased to $57,482 versus
$94,348 for the three month period ended March 31, 2006. This
decrease is due to the completion of the development work
necessary for the ramp up of production of the Sterimed and
Sterimed Junior.
Selling, general and administrative expenses totaled $988,126 for
the three months ended March 31, 2007, versus $718,099 for the
three months ended March 31, 2006. This increase is principally
due to increased personnel, the company's adoption of FAS 123R,
and other costs in connection with sales and marketing.
Interest expense totaled $6,691 for the three months ended
March 31, 2007, versus interest income of $3,393 for the three
months ended March 31, 2006.
At March 31, 2007, the company's consolidated financial statements
for the quarter ended March 31, 2007, showed $3,970,169 in total
assets, $883,012 in total liabilities, and $3,087,157 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?2132
Going Concern Doubt
Marcum & Kliegman LLP, in New York, expressed substantial doubt
about Caprius Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended Sept. 30, 2006. The auditing firm pointed to the
company's recurring losses from operations.
About Caprius Inc.
Caprius, Inc. (OTCBB: CAPS) -- http://www.caprius.com/ -- is a
manufacturer of proprietary equipment for the on-site disinfection
and disposal of infectious medical waste through its subsidiary,
M.C.M. Environmental Technologies Inc.
CATALYST PAPER: Cancels $200 Mil. Senior Notes Private Placement
----------------------------------------------------------------
Catalyst Paper Corporation has decided to withdraw its proposed
private placement of $200 million in aggregate principal amount of
senior notes, due to adverse capital market conditions.
As reported in the Troubled Company Reporter on June 21, 2007,
Catalyst Paper intended to sell, on a private placement basis,
$200 million in aggregate principal amount of senior notes with a
proposed maturity of 2017 through an offering within the United
States pursuant to Rule 144A under the U.S. Securities Act of
1933, as amended, and in certain Canadian Provinces and other
jurisdictions under Regulation S under the U.S. Securities Act of
1933, as amended.
The net proceeds of the offering of the senior notes was supposed
to be used for general corporate purposes, which may include
acquisitions and investments to support our continued growth.
About Catalyst Paper Corporation
Based in Vancouver, British Columbia, Catalyst Paper Corporation -
- www.catalystpaper.com/ -- is the North American-based newsprint
and uncoated groundwood specialty paper manufacturer as measured
by production capacity. Catalyst produces mechanical coated and
uncoated specialty papers and newsprint, and produces lightweight
coated paper, on the west coast of North America. The company
also produces market pulp and kraft paper and operates the paper
recycling operation in Western Canada.
* * *
As reported in the Troubled Company Reporter on June 25, 2007,
Moody's Investors Service assigned a B2 rating to Catalyst Paper
Corporation's new $200 million senior unsecured notes. At the
same time, the B1 corporate family rating, the B2 ratings on the
existing senior unsecured notes, and the Ba1 rating on the bank
credit facility were affirmed. The outlook was changed to
negative.
CHASE COMMERCIAL: Fitch Affirms B- Rating on $8.1MM Class I Certs.
------------------------------------------------------------------
Fitch Ratings upgrades Chase Commercial Mortgage Securities
Corp.'s commercial mortgage pass-through certificates, series
1997-2 as:
-- $48.8 million class F to 'AAA' from 'A+';
-- $6.1 million class G to 'AA+' from 'A-'.
In addition, Fitch affirms the following classes:
-- $83.6 million class A-2 at 'AAA';
-- Interest only class X at 'AAA';
-- $32.6 million class B at 'AAA';
-- $48.8 million class C at 'AAA';
-- $44.8 million class D at 'AAA';
-- $12.2 million class E at 'AAA'.
-- $12.2 million class H at 'BB+';
-- $8.1 million class I at 'B-'.
The $6.4 million class J certificates are not rated by Fitch.
The upgrades reflect the increased subordination levels due to
scheduled amortization, loan payoffs and additional defeasance
since Fitch's last formal review. As of the June 2007
distribution date, the pool's aggregate collateral balance has
been reduced 62.7%, to $303.6 million from $814 million at
issuance. Twenty-five loans (37.4%) have defeased. There are 72
loans remaining in the pool, down from 167 at issuance.
There is currently one loan (1.3%) in special servicing. The loan
is secured by a grocery store-anchored retail center located in
Cortland, NY with a dark Ames space (38%). The loan was
transferred to the special servicer due to imminent default. The
special servicer is pursuing foreclosure. Based on the most
recent appraisal value, losses are possible upon liquidation.
Fitch projected losses on the specially serviced loan are expected
to be absorbed by non-rated class J.
CHASE MORTGAGE: Fitch Rates Two Privately Offered Classes at B
--------------------------------------------------------------
Fitch rates Chase Mortgage Finance Trust, series 2007-A2 as:
-- $1,778,215,600 classes 1-A1 through 1-A3, 2-A1 through
2-A6, 3-A1 through 3-A3, 4-A1 through 4-A3, 5-A1, through
5-A3, 6-A1 through 6-A5, 7-A1 through 7-A5, and A-R (senior
certificates) 'AAA';
-- $2,690,100 class I-M 'AA';
-- $6,169,600 class II-M 'AA';
-- $4,703,000 class I-B1 'A';
-- $2,741,600 class II-B1 'A';
-- $2,015,500 class I-B2 'BBB';
-- $1,370,800 class II-B2 'BBB';
-- $2,687,400 privately offered class I-B-3, 'BB';
-- $1,599,300 privately offered class II-B-3, 'BB';
-- $671,900 privately offered class I-B4, 'B';
-- $685,400 privately offered class II-B4, 'B'.
The 'AAA' rating on the mortgage pool I senior classes reflects
the 1.05% subordination provided by the .20% class I-M, the .35%
class I-B1, the 0.15% class I-B2, the 0.20% privately offered
class I-B3, the 0.05% privately offered class I-B4, the 0.10%
privately offered class I-B5.
The 'AAA' rating on the mortgage pool II senior classes reflects
the 3.00% subordination provided by the 1.35% class II-M, the .60%
class II-B1, the 0.30% class II-B2, the 0.35% privately offered
class II-B3, the 0.15% privately offered class II-B4 and the 0.25%
privately offered and not rated class II-B5 certificates.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the
ratings also reflect the quality of the underlying mortgage
collateral, strength of the legal and financial structures, and
the primary servicing capabilities of JPMorgan Chase Bank, N.A.
(rated 'RPS1' by Fitch).
This transaction contains certain classes designated as
exchangeable certificates and others as regular certificates.
Classes 1-A1 through 1-A3, 2-A1 through 2-A6, 3-A1 through 3-A4,
4-A1 through 4-A3, 5-A1, through 5-A3, 6-A1 through 6-A5, and 7-A1
through 7-A5 are exchangeable. Classes A-R, I-M, I-B1, I-B2, I-B3,
I-B4, I-B5, II-M, II-B1, II-B2, II-B3, II-B4, and II-B5 are
regular certificates.
The holder of the Exchangeable Initial Certificates in any
Exchangeable Combination may exchange all or part of each class of
such Exchangeable Initial Certificates for a proportionate
interest in the related Exchangeable Certificates. The holder of
any class of Exchangeable Certificates may exchange all or part of
such class for a proportionate interest in each such class of
Exchangeable Initial Certificates or for other Exchangeable
Certificates in the related Exchangeable Combination.
The classes of Exchangeable Initial Certificates and Exchangeable
Certificates that are outstanding on any date and the outstanding
principal balances of any such classes will depend upon the
aggregate distributions of principal made to such classes, as well
as any exchanges that may have occurred on or prior to such date.
For the purposes of the exchanges and the calculation of the
principal balance of any class of Exchangeable Initial
Certificates, to the extent that exchanges of Exchangeable Initial
Certificates for Exchangeable Certificates occur, the aggregate
principal balance of the Exchangeable Initial Certificates will be
deemed to include the principal balance of such Exchangeable
Certificates issued in the exchange, and the principal balance of
such Exchangeable Certificates will be deemed to be zero.
Exchangeable Initial Certificates in any Exchangeable Combination
and the related Exchangeable Certificates may be exchanged only in
the specified proportion that the original principal balances of
such certificates bear to one another.
Any holders of Exchangeable Certificates will be the beneficial
owners of an interest in the Exchangeable Initial Certificates in
the related Exchangeable Combination and will receive a
proportionate share, in the aggregate, of the aggregate
distributions on those certificates. With respect to any
Distribution Date, the aggregate amount of principal and interest
distributable to any classes of Exchangeable Certificates and the
Exchangeable Initial Certificates in the related Exchangeable
Combination then outstanding on such Distribution Date will be
equal to the aggregate amount of principal and interest otherwise
distributable to all of the Exchangeable Initial Certificates in
the related Exchangeable Combination on such Distribution Date as
if no Exchangeable Certificates were then outstanding.
Mortgage pool I consist of 2,189 adjustable rate first-lien
residential mortgage loans with stated maturity of not more than
30 years with an aggregate principal balance of $ 1,343,698,707 as
of the cut-off date, June 1, 2007. The mortgage pool has a
weighted average original loan-to-value ratio of 61.55% with a
weighted average mortgage rate of 4.717%. The weighted-average
current FICO score of the loans is 734. The average loan balance
is $613,841 and the loans are primarily concentrated in California
(34.3%), New York (24.9%) and Florida (7.5%).
Mortgage pool II consist of 574 adjustable rate first-lien
residential mortgage loans with stated maturity of not more than
30 years with an aggregate principal balance of $456,933,048 as of
the cut-off date, June 1, 2007. The mortgage pool has a weighted
average original loan-to-value ratio of 67.82% with a weighted
average mortgage rate of 5.868%. The weighted-average current
FICO score of the loans is 747. The average loan balance is
$796,051 and the loans are primarily concentrated in New York
(33.7%), California (31.1%), and Florida (7.2%).
CHASE MORTGAGE: Fitch Rates $1 Million Class B-4 Certs. at B
------------------------------------------------------------
Chase Mortgage Finance Trust, series 2007-S5 is rated by Fitch as:
-- $663.2 million classes 1-A1 through 1-A22, 1-AX, 2-A1
through 2-A3, 2-AX, A-P, and A-R (senior certificates)
'AAA';
-- $17.2 million class M 'AA';
-- $3.4 million class B-1 'A';
-- $1.7 million class B-2 'BBB';
-- $1.4 million privately offered B-3 'BB';
-- $1 million privately offered B-4 'B'.
The 'AAA' rating on the senior classes reflects the 3.75%
subordination provided by the 2.50% class M, the 0.50% class B-1,
the 0.25% class B-2, the 0.20% privately offered class B-3, the
0.15% privately offered class B-4, and the 0.15% privately offered
and not rated class B-5 certificates.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the
ratings also reflect the quality of the underlying mortgage
collateral, strength of the legal and financial structures, and
the primary servicing capabilities of JPMorgan Chase Bank, N.A.
(rated 'RPS1' by Fitch).
This transaction contains certain classes designated as
exchangeable certificates and others as regular certificates.
Classes 1-A1, 1-A2, 1-A4, 1-A13 through 1-A15, 1-A19 through 1-A22
and 2-A1 through 2-A3 are exchangeable certificates. Classes 1-A3,
1-A5 through 1-A12, 1-A16 through 1-A18, 1-AX, 2-AX, A-P, A-R, M,
and B-1 through B-5 are regular certificates.
The holder of the exchangeable initial certificates in any
exchangeable combination may exchange all or part of each class of
such exchangeable initial certificates for a proportionate
interest in the related exchangeable certificates. The holder of
any class of exchangeable certificates may exchange all or part of
such class for a proportionate interest in each such class of
exchangeable initial certificates or for other exchangeable
certificates in the related exchangeable combination.
The classes of exchangeable initial certificates and exchangeable
certificates that are outstanding on any date and the outstanding
principal balances of any such classes will depend upon the
aggregate distributions of principal made to such classes, as well
as any exchanges that may have occurred on or prior to such date.
For the purposes of the exchanges and the calculation of the
principal balance of any class of exchangeable initial
certificates, to the extent that exchanges of exchangeable initial
certificates for exchangeable certificates occur, the aggregate
principal balance of the exchangeable initial certificates will be
deemed to include the principal balance of such exchangeable
Certificates issued in the exchange, and the principal balance of
such exchangeable certificates will be deemed to be zero.
Exchangeable initial certificates in any exchangeable combination
and the related exchangeable certificates may be exchanged only in
the specified proportion that the original principal balances of
such certificates bear to one another.
Any holders of exchangeable certificates will be the beneficial
owners of an interest in the exchangeable initial certificates in
the related exchangeable combination and will receive a
proportionate share, in the aggregate, of the aggregate
distributions on those certificates. With respect to any
distribution date, the aggregate amount of principal and interest
distributable to any classes of exchangeable certificates and the
exchangeable initial certificates in the related exchangeable
Combination then outstanding on such distribution date will be
equal to the aggregate amount of principal and interest otherwise
distributable to all of the exchangeable initial certificates in
the related exchangeable combination on such distribution date as
if no exchangeable certificates were then outstanding.
The trust consists of 1,074 first-lien residential mortgage loans
with stated maturity of not more than 30 years with an aggregate
principal balance of $689,012,528 as of the cut-off date, June 1,
2007. The mortgage pool has a weighted average original loan-to-
value ratio of 70.84% with a weighted average mortgage rate of
6.373%. The weighted-average FICO score of the loans is 745. The
average loan balance is $641,539 and the loans are primarily
concentrated in California (27.1%), New York (15.8%) and Florida
(9.4%).
CITICORP MORTGAGE: Fitch Puts Low-B Ratings on Two Certificates
---------------------------------------------------------------
Fitch rates Citicorp Mortgage Securities, Inc.'s REMIC Pass-
Through Certificates, Series 2007-5 as follows:
-- $334,318,690 classes IA-1 through IA-11, IA-IO, IIA 1, IIA-
IO, IIIA-1, IIIA-IO and A-PO (senior certificates) 'AAA';
-- $5,860,000 class B-1 'AA';
-- $1,723,000 class B-2 'A';
-- $1,034,000 class B-3 'BBB';
-- $689,000 class B-4 'BB';
-- $517,000 class B-5 'B'.
The $517,736 class B-6 is not rated by Fitch.
The 'AAA' rating on the senior certificates reflects the 3.00%
subordination provided by the 1.70% Class B-1, the 0.50% Class B-
2, the 0.30% Class B-3, the 0.20% privately offered Class B-4, the
0.15% privately offered Class B-5, and the 0.15% privately offered
Class B-6. In addition, the ratings reflect the quality of the
mortgage collateral, strength of the legal and financial
structures, and CitiMortgage, Inc.'s servicing capabilities (rated
'RPS1' by Fitch) as primary servicer.
As of the cut-off date, June 1, 2007, the mortgage pool consists
of 570 conventional, fully amortizing, 10-30 year fixed-rate
mortgage loans secured by first liens on one- to four-family
residential properties with an aggregate principal balance of
approximately $344,659,426, located primarily in California
(35.92%), New York (13.12%), and Florida (10.51%). The weighted
average current loan to value ratio of the mortgage loans is
69.60%. Approximately 16.02% of the loans were originated under a
reduced documentation program. Condo properties account for
17.52% of the total pool. Cash-out refinance loans represent
21.43% of the pool. The average balance of the mortgage loans in
the pool is approximately $604,666. The weighted average coupon
of the loans is 6.238% and the weighted average remaining term is
347 months.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
The mortgage loans were originated or acquired by CMI and in turn
sold to CMSI. A special purpose corporation, CMSI, deposited the
loans into the trust, which then issued the certificates. U.S.
Bank National Association will serve as trustee. For federal
income tax purposes, an election will be made to treat the trust
fund as one or more real estate mortgage investment conduits.
CLINICAL DATA: Posts $6.2 Mil. Net Loss in Quarter Ended Dec. 31
----------------------------------------------------------------
Clinical Data Inc. reported a net loss of $6,299,000 for the third
quarter ended Dec. 31, 2006, compared with a net loss of
$42,769,000 for the same period ended Dec. 31, 2005. Results for
the third quarter ended Dec. 31, 2005, included approximately
$40.1 million of purchased research and development expense
related to the acquisition of Icoria and Genaissance.
Projects that qualified as purchased research and development
represent those that had not yet reached technological feasibility
and had no alternative use. The company had no similar expense in
fiscal 2007.
Consolidated revenues increased $3.7 million, or 20%, to
$22.0 million in the three months ended Dec. 31, 2006, from
$18.4 million in the three months ended Dec. 31, 2005.
Product revenues increased $460,000, or 4%, to $12.7 million in
2006 from $12.2 million in 2005 due primarily to increased sales
in Clinics and Small Hospitals.
Services revenue increased $3.2 million, or 52%, to $9.3 million
in 2006 from $6.1 million in 2005. The increase was due to
increased sales within the molecular services operations which
were acquired in the second half of fiscal 2006. Service revenues
in the Physician's Office Laboratories segment decreased $182,000,
or 12.69%, to $1.3 million in 2006 from $1.5 million in 2005 due
to fewer units under service contracts.
Gross Profit decreased to $6,918,000 from $7,463,000 in 2006,
mainly as a result of the decrease in gross profit from services
revenue due to the inclusion of the molecular services operations
acquired in the second half of last fiscal year which generate
lower gross margins than those in the POL segment, partly offset
by the increase in gross profit on product sales due to the
increase in sales of reagents and consumables, which have a higher
gross margin.
Sales and marketing expenses increased $554,000, or 29%, to
$2.4 million in 2006 from $1.9 million in 2005.
Research and development expenses increased $2.0 million, or 79%,
to $4.5 million in 2006 from $2.5 million in 2005.
General and administrative expenses increased $1.3 million, or
25.7%, to $6.6 million in 2006 from $5.2 million in 2005. The
increase was due primarily to an increase of approximately
$339,000 of general and administrative expenses, incurred by the
molecular services operations acquired during the third quarter of
fiscal 2006 and approximately $1.1 million in stock-based
compensation expenses.
Interest expense increased to $253,000 in 2006 from $215,000 in
2005 due primarily to increased average borrowings, debt assumed
in the acquisitions of Genaissance and Icoria and to higher
average interest rates.
Interest income increased to $130,000 in 2006 from $60,000 in 2005
due primarily to higher average cash balances as a result of the
private placement completed on June 13, 2006, and to higher
average interest rates.
Other income of $851,000 in 2006 includes a gain of approximately
$900,000 related to the sale of the company's investment in Sciona
common stock offset by foreign exchange losses, compared to other
income of $7,000 in 2005 which primarily represents foreign
currency gains.
At Dec. 31, 2006, the company's consolidated balance sheet showed
$103,013,000 in total assets, $40,651,000 in total liabilities,
and $62,362,000 in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?2135
Going Concern Doubt
Deloitte & Touche LLP, in Boston, expressed substantial doubt
about Clinical Data Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended March 31, 2006. The auditing firm pointed to the
company's accumulated deficit, negative cash flows from operations
and the expectation that the company will continue to incur losses
in the future.
About Clinical Data
Clinical Data Inc. (Nasdaq: CLDA) -- http://www.clda.com/--
is a global biotechnology company. The company's PGxHealth
division focuses on genetic test and biomarker development to help
predict drug safety and efficacy, thereby reducing health care
costs and improving clinical outcomes. Its Cogenics division
provides molecular and pharmacogenomics services to both research
and regulated environments. Its Vital Diagnostics division offers
in vitro diagnostics solutions for the clinical laboratory.
The company established its molecular and pharmacogenomics
services business segment in the third and fourth quarters of
fiscal 2006 by acquiring Genaissance Pharmaceuticals, Inc., Icoria
Inc. and Genome Express S.A.
COMPASS MINERALS: Moody's Lifts Corporate Family Rating to Ba3
--------------------------------------------------------------
Moody's Investors Service upgraded Compass Minerals Group, Inc.'s
corporate family rating to Ba3 from B1 and probability of default
rating to Ba3 from B1, following a period of debt reduction and
reflecting credit metrics supportive of the upgrade. The outlook
was revised to stable from positive.
Ratings upgraded:
Compass Minerals Group, Inc.
-- Corporate family rating - Ba3 from B1
-- Probability of default rating -- Ba3 from B1
-- $350 mm gtd sr sec term loan facility due 2012 -- Ba1 (LGD2,
27%) from Ba3 (LGD2, 29%)
-- $125 mm gtd sr sec revolving credit facility due 2010 - Ba1
(LGD2, 27%) from Ba3 (LGD2, 29%)
Debt not rated by Moody's (amounts as of 3/31/2007):
Compass Minerals International, Inc.
-- $113 mm 12-3/4% sr discount notes due 2012
-- $157 mm 12% sr sub discount notes due 2013
The upgrade reflects improved credit metrics supportive of the
ratings that have resulted from steady earnings as well as the
reduction of its term loan debt that has more than offset the
accretion of its payment-in-kind notes and reduction in interest
expense. In 2005, the company refinanced high coupon debt,
improving its cash flow. The company has experienced relatively
stable operating performance despite the effects of adverse
weather conditions on salt operations in 2006 and 2007.
The ratings continue to reflect Compass Minerals' moderate /
elevated leverage with Debt to EBITDA of 3.7 times for the LTM
ended March 31, 2007 and debt almost equal to 2006 revenues; the
company's entrenched position as the leading North American
producer of highway deicing salt with an annual production
capacity of 11.7 millions tons/year (13.7 million tons including
European operations); its access to extensive and high quality
salt deposits; its efficient distribution network characterized by
access to lower cost water transportation; as well as its position
as the leading North American producer of sulfate of potash. The
ratings also consider generally favorable weather patterns within
the North American regions (Canada and Midwestern United States)
in which it operates, which reduce the volatility of operating
results; a diverse customer base with no customer accounting for
more than 5% of sales; and substantial barriers to entry,
including the extensive time required for planning and obtaining
zoning approval for a new rock salt mine, and the substantial
amount of capital required for the acquisition of mineral rights
and mine construction.
However, the ratings also consider the mature nature of the
highway deicing business, characterized by low single digit volume
growth rates, and the seasonal nature of SOP sales to agricultural
markets. Additionally, the ratings recognize that volatile
natural gas and energy costs (which represented 13% of the
company's total production costs in 2006) can put pressure on
operating margins. Moody's also notes that Compass Minerals
International, Inc. pays a significant dividend to shareholders,
which is required to be funded out of Compass Minerals' cash flow.
The stable outlook reflects Moody's expectation that Compass
Minerals will continue to generate positive free cash flow and
improve profitability under normal winter weather conditions and
anticipates a consistent pattern of debt reduction, limited
dividend growth, and capital expenditures that will be above
maintenance levels over the intermediate term. The rating is
currently limited by the company's leverage profile as well as its
size and business profile.
Moody's would expect retained cash flow/debt to exceed 15% and
Debt to EBITDA to approach 3.2x on a sustained basis before a
higher rating would likely be considered. The rating could be
negatively pressured if the company failed to generate positive
free cash flow and pay down debt. The salt business has been
historically stable, but successive winter seasons with
unseasonably warm weather could worsen credit metrics.
Compass Minerals Group, Inc., headquartered in Overland Park,
Kansas, is a global producer of salt used for highway deicing,
food grade applications, water conditioning, and other industrial
uses, and a producer of sulfate of potash used in specialty
fertilizers. Its holding company parent, Compass Minerals
International, Inc., is publicly traded. The company had revenues
of $707 million over the LTM ended March 31, 2007.
CREDIT SUISSE: Fitch Holds Low-B Ratings on Three Certificates
--------------------------------------------------------------
Fitch Ratings upgrades Credit Suisse First Boston Mortgage
Securities Corp.'s commercial mortgage pass-through certificates,
series 2001-CP4 as:
-- $16.2 million class F to 'AAA' from 'AA+';
-- $11.8 million class G to 'AA' from 'AA-'.
In addition, Fitch assigns a Distressed Recovery rating to the
following class:
-- $5.9 million class N to 'B-/DR1' from 'B-'.
Fitch also affirms the ratings on these classes:
-- $68.6 million class A-2 at 'AAA';
-- $110 million class A-3 at 'AAA';
-- $611.4 million class A-4 at 'AAA';
-- Interest-only class A-X at 'AAA';
-- Interest-only class A-CP at 'AAA';
-- $61.9 million class B at 'AAA';
-- $45.7 million class C at 'AAA';
-- $22.1 million class D at 'AAA';
-- $16.2 million class E at 'AAA';
-- $22.1 million class H at 'A-';
-- $19.1 million class J at 'BBB-';
-- $10.3 million class K at 'BB+';
-- $8.8 million class L at 'BB-';
-- $7.4 million class M at 'B'.
Fitch does not rate the $8.5 million class O certificates. Class
A-1 has paid in full.
The assignment of the DR rating reflects increased loss
expectations on the specially serviced loans, which have the
potential to affect class N.
The rating upgrades reflect increased credit enhancement levels
due to paydown and scheduled amortization, as well as the
additional defeasance of seven loans (5%) since the last Fitch
rating action. As of the June 2007 distribution date, the pool's
collateral balance has decreased 11.2% to $1.05 billion from $1.18
billion at issuance. To date, 30 loans (38.2%) have defeased,
including six (23.5%) of the largest 10 loans, which includes one
credit-assessed loan (8.3%), Landmark One Market Office Building.
Currently, there are two loans (1.3%) in special servicing. The
larger specially serviced loan (1.2%) is collateralized by a
86,265-square foot office property in South Brunswick, New Jersey,
that is in foreclosure. The loan transferred to special servicing
in May 2006 due to delinquency. The other specially serviced loan
(0.2%) is collateralized by a 71-unit multifamily property located
in Lawrence, KS. The loan is 60 days delinquent. Based on
current valuations, Fitch projects losses upon liquidation of both
specially serviced loans.
Fitch reviewed the transaction's remaining non-defeased credit-
assessed loan, Parfinco Office Buildings - East and West Annex
(4.8%). This loan is collateralized by two, eight-story office
buildings totaling 510,550 square feet in Pasadena, California.
The occupancy as of year-end 2006 remains at 100%, unchanged from
2005. Due to its stable performance, the loan retains its
investment grade credit assessment.
CREDIT SUISSE: Fitch Affirms B+ Rating on $29.3MM Class H Certs.
----------------------------------------------------------------
Fitch Ratings upgrades Credit Suisse First Boston Mortgage
Securities Corp., commercial mortgage pass-through certificates,
series 1997-C2 as:
-- $73.3 million class F to 'AA+' from 'AA-';
-- $14.7 million class G to "A+' from 'A-'.
In addition, Fitch affirms the ratings on these classes:
-- $183.9 million class A-3 at 'AAA';
-- Interest-only class A-X at 'AAA';
-- $95.3 million class B at 'AAA';
-- $80.6 million class C at 'AAA';
-- $95.3 million class D at 'AAA'.
-- $29.3 million class H at 'B+'.
The $14.7 million class I remains at 'CCC/DR2'. Fitch does not
rate the $25.7 million class E or the $1.4 million class J
certificates. Classes A-1 and A-2 have paid in full.
The upgrades reflect increased credit enhancement due to loan
payoffs and scheduled amortization since Fitch's last rating
action. As of the June 2007 distribution date, the pool's
aggregate balance has been reduced 58.1%, to $614.1 million from
$1.47 billion at issuance. There are 107 loans remaining in the
pool, including 28 defeased loans (40.8%), down from the original
185 loans.
Currently, two loans (2.5%) are in special servicing. The largest
specially serviced loan (1.9%) is secured by a 224,888 square foot
industrial property in Belmont, CA. The loan was transferred to
the special servicer as a result of a receiver being appointed
over the Borrower and collateral property due to a conflict
between the owners. The loan remains current and the special
servicer is working with the borrower to resolve the issue.
The other specially serviced loan (0.6%) is secured by three
motels, two of which are located in Kentucky and one in Corapolis,
Pennsylvania. The loan is over 30 days delinquent. The special
servicer is negotiating with the borrower for a workout strategy.
CSFB ABS: S&P Puts Default Rating on 2001-HE30 Class B-F Certs.
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B-F mortgage pass-through certificates from CSFB ABS Trust Series
2001-HE30 to 'D' from 'CCC'.
At the same time, S&P lowered the rating on class B to 'CCC' from
'B' and removed it from CreditWatch with negative implications,
where it was originally placed on March 10, 2006. In addition,
S&P placed the 'A+' rating on class M-2 on CreditWatch negative.
Finally, S&P affirmed the remaining six ratings from this series.
S&P lowered the rating on class B-F to 'D' due to the complete
erosion of overcollateralization and the subsequent principal
write-down to the certificate balance of the class. The downgrade
of class B reflects a write-down to the O/C that caused it to
decline to 0.12%, substantially below its 0.50% target. The
CreditWatch negative placement of the rating on class M-2 also
reflects the deterioration of O/C, along with cash flow
projections that indicate further erosion.
The affirmation of the ratings on the other six classes reflects
adequate actual and projected credit support. As of the June 2007
distribution, total delinquencies were 33.02% of the current pool
balance for the combined group and 15.17% for the fixed group,
while cumulative realized losses were 3.61% of the original pool
balance for the combined group and 3.30% for the fixed group. The
transaction is 65 months seasoned, with pool factors of 7.82% and
11.08% for the combined and fixed groups, respectively.
The rating on class B 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 losses decline to a point at which they
no longer surpass excess interest, and the level of O/C has not
been further eroded, S&P will affirm the class M-2 rating and
remove it from CreditWatch. Conversely, if losses continue to
surpass excess interest and further erode O/C, S&P will take
additional negative rating actions.
Credit support is provided by subordination,
overcollateralization, and excess spread. The collateral consists
of 30-year, fixed- or adjustable-rate, fully amortizing subprime
mortgage loans secured by first liens on one- to four-family
residential properties.
Rating Lowered
CSFB ABS Trust Series 2001-HE30
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2001-HE30 B-F D CCC
Rating Lowered and Removed from Creditwatch Negative
CSFB ABS Trust Series 2001-HE30
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2001-HE30 B CCC B/Watch Neg
Rating Placed on Creditwatch Negative
CSFB ABS Trust Series 2001-HE30
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- -----
2001-HE30 M-2 A+/Watch Neg A+
Ratings Affirmed
CSFB ABS Trust Series 2001-HE30
Mortgage pass-through certificates
Series Class Rating
------ ----- ------
2001-HE30 A-2, A-3, A-F, M-1 AAA
2001-HE30 M-F-1 AA+
2001-HE30 M-F-2 A+
DAVE & BUSTER'S: Increased Sales Prompt S&P's Stable Outlook
------------------------------------------------------------
Standard & Poor's Ratings Services revised its ratings outlook on
Dallas, Texas based-Dave & Buster's Inc. to stable from negative.
At the same time, S&P affirmed all of its ratings, including the
'B-' corporate credit rating, on the company.
"The outlook revision reflects the company's increased sales and
ability to control costs, which have led to better profitability
and improved credit metrics in the past year," said Standard &
Poor's credit analyst Charles Pinson-Rose.
S&P's ratings on Dave & Buster's reflect the company's small size
in the highly competitive restaurant and out-of-home entertainment
industries, vulnerability to cost increases and changes in
consumer spending habits, and a highly leveraged capital structure
that limits cash flow protection.
Dave & Buster's operates 47 locations throughout the U.S., and one
in Toronto, Canada. The company attempts to differentiate itself
from other restaurants by offering a large array of entertainment
options, such as video games, billiards, skee-ball, and
shuffleboard, and a full menu of food and beverage items. Still,
many alternative entertainment options compete with the company,
e.g., movie theaters, bowling alleys, nightclubs, and other theme
restaurants. Given the competitive nature of the industry, any
cost increases likely will not be completely passed on to
consumers. Any weakness in consumer-spending habits likely would
impair top-line revenues.
DEL LABORATORIES: Liquidity Concerns Cue S&P to Junk Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Del Laboratories Inc. to 'CCC+' from 'B-', and placed
most of the ratings on CreditWatch with developing implications.
At the same time, S&P lowered the rating on the company's senior
secured floating-rate debt to 'B-' from 'B'; the recovery rating,
which is not on CreditWatch, was affirmed at '2', indicating the
expectation for substantial recovery (70%-90%) of principal in the
event of a payment default. S&P lowered ratings on the company's
senior subordinated notes to 'CCC-' from 'CCC'.
Uniondale, New York-based Del Laboratories owns the leading
consumer brands in both nail care and oral analgesics. At Dec.
31, 2006, the company had approximately $370 million in total debt
outstanding.
"The downgrade reflects our concern regarding Del Laboratories'
liquidity as a result of the trustees' notification that a default
has occurred under the indentures for the company's $185 million
senior secured floating rate notes due 2011 and its $175 million
8% senior subordinated notes due 2012," said Standard & Poor's
credit analyst Mark Salierno. The notification is a result of the
company's failure to file certain financial reports with the SEC;
unless remedied within the 30-day grace period, such failure would
constitute an event of default under the indentures. A default
under either indenture would entitle noteholders to accelerate
payment on the securities to become due and payable immediately.
Del Laboratories has yet to file its first-quarter financial
statements of fiscal 2007 (ended March 31, 2007) due to the
ongoing review into treatment of the company's reserves required
for future sales returns and markdowns. The company has indicated
that it intends to file its form 10-Q by July 10, 2007, which
falls within the 30-day grace period. On June 15, 2007, Del
Laboratories obtained a waiver from its bank lenders concerning
the cross-default provision in its credit agreement; the waiver
remains in effect until July 10, 2007, the anticipated filing
date. At June 22, 2007, the company had about $61 million
available on its existing $85 million facility.
Standard & Poor's will monitor developments relating to these
issues and subsequently meet with management to review the
company's liquidity, operating trends, and near-term outlook. S&P
could lower the ratings if Del Laboratories fails to remedy the
default within the 30-day grace period. Alternatively, S&P could
raise the corporate credit rating back to 'B- if Del Laboratories
remedies the default by filing its required financial statements
within the cure period and resolves its accounting issues to allow
the timely filing of future financial statements.
DELTATECH CONTROLS: Moody's Rates $166MM Credit Facility at B1
--------------------------------------------------------------
Moody's Investors Service assigned a B1 first time rating to
DeltaTech Controls, Inc.'s $166 million senior secured bank credit
facility ($25 million revolver and $141 million term loan, a Caa1
rating to the company's $54.1 million second line term loan, and a
B2 Corporate Family Rating. The rating outlook is stable.
Littlejohn & Co., LLC, and other investors are acquiring The
Switches Business of ITT for an aggregate purchase price of $240
million, excluding fees and expenses, through the financing being
completed by DeltaTech. The sponsors will contribute about $56
million of cash equity in the form of preferred and common stock
towards the acquisition.
DeltaTech's B2 corporate family rating reflects the company's
diverse customer base servicing several end markets and solid
EBITDA margins. Additionally, the company's leveraged credit
metrics are mildly aggressive considering the company is
undergoing a leveraged buyout. Constraining the rating is the
company's small size based on revenues, volatility of end markets,
and modest free cash flow generation relative to its debt levels.
DeltaTech must also contend with operating uncertainties and
additional costs that it will experience as a stand-alone company
for the first time.
Ratings/assessments assigned:
-- Corporate Family Rating B2;
-- Probability of default rating B2;
-- $25 million senior secured revolver due mid-2013 at B1 (LGD3,
34%);
-- $141 million senior secured term loan due mid-2014 at B1
(LGD3, 34%); and,
-- $54.1 million second lien term loan due early 2015 at Caa1
(LGD5, 82%).
DeltaTech, incorporated in the U.S. and headquartered in Hong
Kong, is the former The Switches Business of ITT Corporation.
DeltaTech is a worldwide provider in designing, manufacturing and
marketing customized electromechanical switches, interface
controls, and dome arrays.
DIRECT INSITE: March 31 Balance Sheet Upside-down by $3.05 Mil.
---------------------------------------------------------------
Direct Insite Corp.'s consolidated balance sheet at March 31,
2007, showed $3,176,000 in total assets and $6,231,000 in total
liabilities, resulting in a $3,055,000 total stockholders'
deficit.
The company's consolidated balance sheet at March 31, 2007, also
showed strained liquidity with $2,379,000 in total current assets
available to pay $6,010,000 in total current liabilities.
Direct Insite Corp. reported net income of $402,000 on revenue of
$2,254,000 for the first quarter ended March 31, 2007, compared to
a net loss of $533,000 on revenue of $2,015,000 for the same
period ended March 31, 2006.
This revenue increase is primarily the result of an increase in
the company's core business, the ASP IOL services, of $105,000 and
an increase of $134,000 in revenue from engineering services.
For the three months ended March 31, 2007, the company reported
income from operations of $463,000, compared to a loss from
operations of $292,000 for the same period in 2006.
The significant improvement in operating results is due to an
increase in revenue and cost reductions.
Costs of operations, research and development decreased by
$188,000 to $875,000 for the three months ended March 31, 2007,
compared to costs of $1,063,000 for the three months ended March
31, 2006. The decrease in costs is principally due to decreases
in personnel wages and benefit costs of $148,000 from staff
reductions, a decrease in rents of $69,000, offset by an increase
in professional fees of $37,000.
Sales and marketing costs were $337,000 for the three months ended
March 31, 2007, a decrease of $126,000 or 27.2% compared to costs
of $463,000 for the same period in 2006.
General and administrative costs decreased $201,000 to $493,000
for the three months ended March 31, 2007, compared to costs of
$694,000 for the same period in 2006.
Interest expense, net decreased $147,000 principally due to the
amortization of debt discount of $125,000 in the first quarter of
2006 which was fully amortized in 2006, and a decrease in interest
due to lower rate of borrowing under the company's receivables
financing agreements.
Other expense decreased $60,000 in the first quarter of 2007
compared to the same period in 2006. In 2006 the company incurred
penalties in connection with the Sigma Capital bridge financing
and the marked to market adjustment for the fair value of the
warrant liability recorded in connection with the bridge
financing. The bridge financing was repaid in 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?2133
About Direct Insite
Headquartered in Bohemia, New York, Direct Insite Corp. (OTC BB:
DIRI.OB) -- http://www.directinsite.com/-- provides financial
supply chain automation across Procure-to-Pay and Order-to-Cash
processes. The company's global eInvoice Management services
automate complex manual business processes such as invoice
validation, order matching, consolidation, dispute handling, and
e-payment processing. Direct Insite solutions are used by more
than 7,000 corporations across 62 countries, 15 languages and
multiple currencies.
DOLLAR GENERAL: Buck Acquisition Extends Tender Offer Expiration
----------------------------------------------------------------
Buck Acquisition Corp. extended the expiration time for the cash
tender offer relating to Dollar General Corporation's $200 million
outstanding aggregate principal amount of 8-5/8% Senior Notes due
2010, to 5:00 p.m., New York City time, on July 5, 2007.
The price determination date for the tender offer was also
extended to the second business day immediately preceding the
July 2, 2007, expiration date. The Tender Offer is conducted in
connection with the anticipated merger of Buck with and into
Dollar General. Dollar General currently anticipates that the
effective time of the Merger will be on or about July 6, 2007,
subject to the satisfaction or waiver of closing conditions.
The Tender Offer was made pursuant to an Offer to Purchase and
Consent Solicitation Statement dated June 4, 2007, which more
fully sets forth the terms and conditions of the Tender Offer.
As of 5:00 p.m., New York City time, on June 15, 2007, Buck had
received consents and tenders for approximately 99% of the
aggregate principal amount of the Notes.
Goldman, Sachs & Co. is acting as the dealer manager and
solicitation agent for the Tender Offer and Consent Solicitation.
The information agent for the Tender Offer is D.F. King & Co.,
Inc. Questions regarding the Tender Offer and Consent
Solicitation may be directed to Goldman, Sachs & Co. at (212) 902-
9077 (collect) or (800) 828-3182 (toll-free). Requests for
documentation may be directed to D.F. King & Co., Inc. at (212)
269-5550 (for banks and brokers only) or (800) 488-8095 (for all
others toll-free).
About Buck Acquisition Corp.
Buck Acquisition Corp. is a Tennessee corporation, which is
indirectly controlled by investment funds affiliated with Kohlberg
Kravis Roberts & Co. L.P.,
About Dollar General Corporation
Based in Goodlettsville, Tennessee, Dollar General Corporation
(NYSE: DG) -- http://www.dollargeneral.com/-- operates 8,260
extreme value general merchandise stores in 35 states.
* * *
As reported in the Troubled Company Reporter on June 14, 2007,
Moody's Investors Service affirmed Dollar General Corporation's
corporate family rating at B3 following the company's disclosure
of revisions to its proposed capital structure, notably, KKR
increasing its equity investment to $2.775 billion with a
corresponding reduction in proposed debt to $4.7 billion. The
rating outlook remains stable.
DORAL FINANCIAL: Fitch Downgrades Junks Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has downgraded Doral Financial Corporation's Long-
term Issuer Default rating to 'CCC' from 'B'. Fitch has also
assigned an 'RR4' Recovery Rating to DRL's senior unsecured debt,
indicating average recovery prospects (30-50%) for this class of
creditors in the event of a bankruptcy filing and an
'RR6'(recovery of 0%-10%) to the preferred stock . Fitch has also
revised Doral's Rating Watch to Negative from Evolving. The
Support Rating Floor for both entities is unchanged at No Floor.
See complete list of affected ratings at the end of this release.
On June 25, DRL announced that it has been notified by FBOP
Corporation that after completion of its diligence process FBOP
has decided that it will not proceed with its previously announced
proposal to invest in DRL. The withdrawal of FBOP's proposal has
heightened Fitch's concern of DRL's ability to recapitalize the
company and repay the $625 million of senior notes due by July 20,
2007. The current rating action is driven by the lack of interim
financing that would be needed if the recapitalization of DRL does
not take place prior to July 20, 2007. Fitch is unaware of any
plan to repay the senior note holders if the closing of the
recapitalization plan proposed by Bear Stearns Merchant Banking
takes longer than expected. Fitch previously placed the ratings
of DRL of Rating Watch Evolving on June 4 due to the FBOP proposal
that included bridge financing for the impending maturity.
Fitch's analysis of DRL's unencumbered assets at the holding
company level provides an estimated recovery value of
approximately 40% for senior unsecured creditors in the event of a
bankruptcy. As of March 31, 2007, DRL has approximately $238
million of cash and liquid securities and $176 million of mortgage
servicing rights that have some value in relation to approximately
$750 million of senior debt.
Following completion of recapitalization and repayment of pending
debt maturity, Fitch will review DRL's financial condition in
relation to the current ratings and Rating Watch.
Fitch has downgraded these ratings and revised the Rating Watch to
Negative from Evolving:
Doral Financial Corporation
-- Long-term Issuer Default Rating to 'CCC' from 'B';
-- Senior debt to 'CCC/RR4' from B-';
-- Preferred stock to 'C/RR6' from CCC';
-- Short-term Issuer Default Rating to 'C' from 'B';
Doral Bank
-- Long-term Issuer Default Rating to 'B' from 'B+';
-- Long-term deposits to B+ from 'BB-';
In addition, Fitch currently rates:
Doral Financial Corporation
-- Support '5'.
-- Support Floor 'NF'
-- Individual 'E';
Doral Bank
-- Support '5'.
-- Support Floor 'NF'
-- Individual 'D';
-- Short-term Issuer 'B';
-- Short-term deposit obligations 'B'.
FRESENIUS MEDICAL: Prices $500 Mil. of 6-7/8% Sr. Notes Offering
----------------------------------------------------------------
Fresenius Medical Care AG & Co. KGaA has priced its Senior Notes
due 2017 in the amount of $500 million. The coupon will be
6-7/8%. Proceeds will be used to reduce indebtedness under the
company's senior secured bank credit facility and other, short-
term debt.
The Senior Notes will be issued by FMC Finance III S.A., a wholly
owned subsidiary of the company, and will be guaranteed on a
senior basis jointly and severally by the company, Fresenius
Medical Care Holdings Inc. and Fresenius Medical Care Deutschland
GmbH.
"The company is pleased to have completed the company's first
senior unsecured bond offering. Investors have clearly recognized
its sustainable financial strength and are confident in the future
of the industry and Fresenius Medical Care."
Headquartered in Bad Homburg, Germany, Fresenius Medical Care AG &
Co. KgaA (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS/P)
-- http://www.fmc-ag.com/-- provides products and services for
individuals undergoing dialysis because of chronic kidney
failure, a condition that affects more than 1,500,000
individuals worldwide. The company also provides dialysis
products such as hemodialysis machines, dialyzers and
related disposable products. Through its network of around 2,194
dialysis clinics in North America, Europe, Latin America, Asia-
Pacific and Africa, Fresenius Medical Care provides dialysis
treatment to around 128,200 patients around the globe. Fresenius
AG holds around 37% of Fresenius Medical Care AG & Co. KgaA's
capital. In Latin America, Fresenius Medical has operations in
Argentina, Brazil, Colombia, Chile, Mexico and Venezuela.
* * *
The company carries Moody's Investors Service's Ba2 corporate
family rating.
GE COMMERCIAL: Fitch Affirms Low-B Ratings on Three Classes
-----------------------------------------------------------
Fitch Ratings has upgraded four classes of GE Commercial Mortgage
Corporation, series 2003-C2, as:
-- $14.8 million class E to 'AAA' from 'AA+';
-- $14.8 million class F to 'AA' from 'AA-';
-- $14.8 million class G to 'A+' from 'A';
-- $14.8 million class H to 'A-' from 'BBB+'.
In addition, Fitch affirms the ratings on these classes:
-- $22.0 million class A-1 at 'AAA';
-- $165.1 million class A-2 at 'AAA';
-- $54.3 million class A-3 at 'AAA';
-- $406.1 million class A-4 at 'AAA';
-- $271.0 million class A-1A at 'AAA';
-- Interest-only class X-1 at 'AAA';
-- Interest-only class X-2 at 'AAA';
-- $35.5 million class B at 'AAA';
-- $14.8 million class C at 'AAA';
-- $26.6 million class D at 'AAA';
-- $19.2 million class J at 'BBB-';
-- $7.4 million class K at 'BB+';
-- $8.9 million class L at 'BB';
-- $4.4 million class M at 'B+';
-- $7.4 million class N at 'B';
-- $3.0 million class O at 'B-';
-- $3.3 million class BLVD-1 at 'A';
-- $2.5 million class BLVD-2 at 'A-';
-- $4.5 million class BLVD-3 at 'BBB+';
-- $3.5 million class BLVD-4 at 'BBB';
-- $8.0 million class BLVD-5 at 'BBB-'.
Fitch does not rate $19.3 million class P certificates.
The rating upgrades reflect increased credit enhancement levels
due to scheduled amortization and the additional defeasance of 11
loans (10.7%) since Fitch's last rating action. In total, 23
loans (22.1%) have defeased, including one (1.9%) of the top ten
loans. As of the June 2007 distribution date, the pool's
aggregate certificate balance has decreased 5.3% to $1.14 billion
from $1.21 billion at issuance. Currently, two loans (1.1%) are
in special servicing with projected losses that will be absorbed
by the non-rated class P.
The first specially serviced loan (0.8%) is a multifamily property
located in Houston, TX and is in foreclosure. In April 2007, the
loan transferred to the special servicer due to imminent default.
The special servicer is marketing the property for sale and losses
are expected.
The second specially serviced loan (0.3%) is secured by a self-
storage facility in New Orleans, LA which sustained damage from
hurricanes Katrina and Rita. The special servicer is working to
stabilize the property.
Fitch reviewed the most recent operating data available from the
master servicer for the two non-defeased credit assessed loans,
DDR Portfolio (6.5%) and The Boulevard Mall (5.8%). Based on
stable performance, the loans maintain their investment grade
credit assessments.
The DDR Retail portfolio, the largest loan in the pool (6.5%), is
secured by seven retail properties, with a total of 1.8 million
square feet. The properties are located in Indiana, Ohio,
California, Virginia and Florida. Combined year end 2006
occupancy was 96.6% for the portfolio, up from 92.6% at issuance.
The Boulevard Mall (5.8%) is secured by a 1.2 million sf regional
mall in Las Vegas, Nevada, of which 587,170 sf represents
collateral. The A note has been divided into two pari-passu
notes, A-1 ($45.7 million) in this trust and A-2, which is
securitized in GMAC 2003-C2. The B-Note, a $21.8 million non-
pooled portion of the loan, is also in this trust and
collateralizes classes BLVD-1 through BLVD-5. Occupancy was 96.4%
as of YE 2006, up from 92.6% at issuance.
GLOBAL POWER: Equity Panel Wants Noteholder Claims Determined
-------------------------------------------------------------
The Official Committee of Equity Security Holders in Global
Power Equipment Group Inc. and its debtor-affiliates' Chapter
11 cases asks the U.S. Bankruptcy Court for the District of
Delaware to determine the proper amount of the claims asserted
by the holders of 4.25% Convertible Senior Subordinated Notes
due 2011 issued by the Debtors in a private placement dated
Nov. 23, 2004.
The Equity Committee argues that the noteholders have filed
claims in substantially inflated amounts constituting a major
impediment to orderly plan formulation.
According to the Equity Committee, the noteholders asserted
claims totaling $84.4 million against the Debtors. The
noteholders also alleged that they are entitled to unspecified
amounts of pre- and post-petition attorney's fees and post-
petition interest at the default rate of 9.25%.
If the noteholders do claim additional amounts of post-petition
interest at the default rate, the Equity Committee believes
that their asserted claims could be as much as $91 million,
compared to the Equity Committee's calculation of $70 million.
The difference, the Equity Committee says, is a huge gap and a
plan gating issue, which needs prompt resolution. Any delay would
only serve to impede or derail the ability of existing equity
security holders to preserve their substantial economic stake
and could allow noteholders to improperly usurp the Debtors'
equity value.
Noteholders Prefer Resolution
The noteholders find the Equity Committee's request as a means to
disrupt orderly, ongoing plan negotiations as well as to single
out for litigation one issue out of many significant and
potentially contentious issues affecting the reorganization
prospects of the Debtors.
Specifically, the noteholders contend that the litigation
will multiply professional fees and other costs for all
constituencies, which would be very burdensome given the
modest size of the Debtors' EBITDA of approximately $25 million
per year.
Further, the noteholders emphasize that since the Debtors
first presented an outline of a plan structure, they have been
actively enganged in discussion over all relevant issues,
in the tact understanding that the Debtors and their
enfranchised constituents would be far better served by
resolutions of disputes than by costly litigation and delay.
Creditors' Panel Wants Litigation Stayed
The Official Committee of Unsecured Creditors asks the
Court to stay the litigation filed by the Equity Committee
arguing that it will not move the case toward a confirmable
plan.
The Creditors' Committee avers that the Equity Committee's
request is designed to increase the Equity Committee's
leverage in critical, ongoing plan negotiations, given that
it only asserted objection to the noteholders' claims
after more than three months since the noteholders filed
them.
The Creditors' Committee concludes that the Equity Committee
knows that full blown litigation over the issue will result
in massive delays and significance costs, which will destroy
value for all economic stakeholders. "While the threat to
destroy value is often used by out-of-the-money constituents,
the Court should not permit the Equity Committee to seize
control of these cases and thereby destroy value."
Debtors Say Litigation Should Be Last Resort
The Debtors ask the Court to deny the requested discovery and
trial of the noteholders' claims as "premature" given that
negotiations on the issue have just began.
The Debtors say they agree with the Equity Committee that
resolution of the issue is critical to the Debtors' expeditious
and efficient emergence from Chapter 11. However, the Debtors
believe that mediation is better alternative to litigation,
hence, litigation should only be resorted to if negotiations
fail.
The Court scheduled a hearing at 10:00 a.m. on July 12, 2007,
to consider the matter.
Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka
GEEG Inc. -- http://www.globalpower.com/-- provides power
generation equipment and maintenance services for its customers in
the domestic and international energy, power and infrastructure
and service industries. The company designs, engineers and
manufactures a range of heat recovery and auxiliary equipment
primarily used to enhance the efficiency and facilitate the
operation of gas turbine power plants as well as for other
industrial and power-related applications. The company has
facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn,
Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai,
China; Nanjing, China; and Heerleen, The Netherlands.
The company and 10 of its affiliates filed for chapter 11
protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045).
Attorneys at White & Case LLP and The Bayard Firm, P.A.,
represent the Debtors. Adam G. Landis, Esq., and Kerri K.
Mumford, Esq., at Landis Rath & Cobb LLP represent the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors reported total assets of $381,131,000 and total debts
of $123,221,000.
GREGG APPLIANCES: Commences $111.2 Mil. Senior Notes Tender Offer
-----------------------------------------------------------------
Gregg Appliances Inc. has commenced a tender offer for cash to
purchase any and all of the $111,205,000 outstanding aggregate
principal amount of its 9% Senior Notes due 2013.
In connection with the tender offer, Gregg Appliances is
soliciting consents to effect certain proposed amendments to the
indenture governing the 9% Senior Notes. The tender offer and
consent solicitation are made pursuant to an Offer to Purchase and
Consent Solicitation Statement dated June 26, 2007, and a related
Consent and Letter of Transmittal.
The total consideration to be paid for each $1,000 principal
amount of 9% Senior Notes validly tendered and accepted for
purchase will be determined using a yield equal to a fixed spread
of 50 basis points plus the bid-side yield to maturity of the
4.875% U.S. Treasury Note due Jan. 31, 2009.
The total consideration includes a consent payment of $30 per
$1,000 principal amount of 9% Senior Notes payable only to holders
who tender their 9% Senior Notes and validly deliver their
consents prior to the consent payment deadline. Holders who
tender their 9% Senior Notes after the consent payment deadline
but before the expiration date will be eligible to receive the
tender offer consideration, which is the total consideration minus
the consent payment. Holders who tender their 9% Senior Notes
will receive the accrued and unpaid interest on such 9% Senior
Notes to, the applicable payment date in connection with the
tender offer. The consent payment deadline is scheduled to be
5:00 p.m., New York City time, on July 10, 2007, unless terminated
or extended.
The tender offer is scheduled to expire at midnight, New York City
time, on July 24, 2007, unless terminated or extended.
The proposed amendments to the indenture governing the 9% Senior
Notes would eliminate most of the indenture's restrictive
covenants and certain events of default and related provisions and
would significantly amend certain other provisions contained in
the indenture. Adoption of the proposed amendments requires the
consent of the holders of a majority of the aggregate principal
amount of the 9% Senior Notes outstanding.
Holders who tender their 9% Senior Notes will be required to
consent to the proposed amendments and holders may not deliver
consents to the proposed amendments without tendering their 9%
Senior Notes in the tender offer. Tendered 9% Senior Notes may be
withdrawn and consents may be revoked at any time prior to the
withdrawal deadline, but not thereafter.
The tender offer is conditioned upon:
(a) the receipt of tendered 9% Senior Notes from the holders of
at least a majority of the aggregate principal amount of
the 9% Senior Notes outstanding;
(b) the receipt of consents to the proposed amendments from the
holders of at least a majority of the aggregate principal
amount of the 9% Senior Notes outstanding;
(c) the consummation of the initial public offering of hhgregg,
Inc. resulting in gross proceeds to hhgregg of at least
$50 million;
(d) the consummation of a corporate reorganization whereby
Gregg Appliances will become a wholly owned subsidiary of
hhgregg; and
(e) the closing of the debt refinancing of Gregg Appliances,
whereby Gregg Appliances will amend or amend and restate
its existing $75 million revolving credit facility,
increase the amount of the facility to $100 million, and
enter into a new $100 million term loan B.
Gregg Appliances expressly reserves the right, in its sole
discretion, subject to applicable law to:
(a) terminate prior to the expiration date any tender offer and
consent solicitation and not accept for payment any 9%
Senior Notes not theretofore accepted for payment;
(b) waive on or prior to the expiration date any and all of the
conditions of the tender offer and the consent
solicitation;
(c) extend the expiration date; and
(d) amend the terms of the tender offer or consent
solicitation.
The foregoing rights are in addition to its right to delay
acceptance for payment of 9% Senior Notes tendered under the
tender offer or the payment for 9% Senior Notes accepted for
payment in order to comply in whole or in part with any applicable
law, subject to Rule 14e-l(c) under the Securities Exchange Act of
1934, as amended, to the extent applicable, which requires that an
offer pay the consideration offered or return the securities
deposited by or on behalf of the holders thereof promptly after
the termination or withdrawal of the tender offer.
Wachovia Securities is acting as exclusive dealer manager and
solicitation agent for the tender offer and the consent
solicitation. The information agent and tender agent for the
tender offer is Global Bondholder Services Corporation. Questions
regarding the tender offer and consent solicitation may be
directed to Wachovia Securities' Liability Management Group,
telephone number 866-309-6316 (toll free) and 704-715-8341 (call
collect). Requests for copies of the Offer to Purchase and
Consent Solicitation Statement and related documents may be
directed to Global Bondholder Services Corporation, telephone
number (866) 470-4500 (toll free) and (212) 430-3774 (call
collect).
About Gregg Appliances
Headquartered in Burbank, California, Gregg Appliances Inc. --
http://www.hhgregg.com/-- is a specialty retailer of consumer
electronics, home appliances, mattresses and related services. It
operates under the hhgregg(R) and Fine Lines(R) brands in 79
stores in Alabama, Georgia, Indiana, Kentucky, North Carolina,
Ohio, South Carolina and Tennessee.
* * *
As reported in the Troubled Company Reporter on June 12, 2007,
Standard & Poor's Rating Services raised its corporate credit
rating on Gregg Appliances Inc. to 'B+' from 'B'.
GREGG LUBONTY: Case Summary & 18 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Gregg Lubonty
37 Conklin Avenue
Highland Falls, NY 10928
Bankruptcy Case No.: 07-14945
Chapter 11 Petition Date: June 26, 2007
Court: Southern District of Florida (Miami)
Debtor's Counsel: Douglas J. Snyder, Esq.
1320 South Dixie, Highway 731
Coral Gables, FL 33146
Tel: (305) 663-0740
Fax: (305) 669-8529
Total Assets: $17,135,421
Total Debts: $18,371,279
Debtor's 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Security Bank of North 6420 Riverside $1,900,000
Metro Drive; value of
security:
$900,000
John Lubonty unsecured business $550,000
200 Tenth Avenue loan
Belmar, NJ 07719
H.S.B.C. business $341,749
P.O. Box 37278 revolving line
The Lakes, NV 88901-6029 of credit
J.P. Morgan Chase business $241,712
revolving line
of credit
Arthur Giangrande business loan $150,000
Steve Nacht business loan $150,000
Dallas Griffin business loan $100,000
Leo Moriera business loan $100,000
National City deficiency on $100,000
loss in fire
Miami Dade County 2006 real estate $65,075
Tax Collector taxes
Bank of America Visa credit card $60,069
purchases
Home Depot/M.B.G.A. debt $20,447
C.I.T.I. business $19,600
revolving line
of credit
CitiFinancial Services credit card $19,600
purchases
All Phase Plumbing debt $19,313
Alley-Cassety Brick debt $18,576
Pyramid Stone Co. debt $12,833
Staircase and Millwork, debt $9,854
Co.
GSI GROUP: S&P Revises Outlook to Negative from Stable
------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on GSI
Group Inc. to negative from stable. At the same time, Standard &
Poor's affirmed its ratings on the Assumption, Illinois-based
agricultural equipment manufacturer, including its 'B' corporate
credit rating.
The outlook revision follows the company's announcement that
affiliates of private equity firm Centerbridge Partners, L.P. will
acquire a majority stake in the company's parent GSI Holding Corp.
"Although good operating performance has resulted in a significant
reduction in leverage in the recent quarters and has increased
debt capacity, a re-leveraging of GSI's balance sheet beyond
levels deemed adequate for the 'B' rating could result in a
downgrade," said Standard & Poor's credit analyst Gregoire Buet.
Standard & Poor's will meet with GSI's management to discuss the
financing of the transaction and the company's financial policies
following the change in ownership.
GSI GROUP: Moody's Reviews Ratings and May Downgrade
----------------------------------------------------
Moody's Investors Service placed the ratings of The GSI Group,
Inc. under review for possible downgrade. The review follows
GSI's announcement that its parent company, GSI Holdings Corp,
which is controlled by Charlesbank Capital Partners, has entered
into an agreement whereby affiliates of Centerbridge Capital
Partners, L.P. will acquire a majority stake in the company in a
leveraged transaction. The acquisition is subject to customary
closing conditions and is expected to be completed in the third
quarter of 2007. No further terms of the transaction were
disclosed.
Ratings under review are:
-- corporate family rating -- B2;
-- probability of default -- B2;
-- guaranteed senior global notes -- B3 (LGD5, 71%).
The company's speculative grade liquidity rating remains at the
SGL-2 level and is not affected by the current review.
Moody's review is focusing on the impact that the proposed
transaction will have on GSI's future capital structure, financial
strategy and credit metrics. The company's operating performance
and credit metrics have been improving in light of strong demand
and have strengthened the company's position within the B2 rating
category. The review will assess the degree to which the company
will be able to sustain metrics consistent with the B2 rating
level under the new leveraged capital structure. Certain debt
obligations, including GSI's guaranteed senior global notes,
contain change of control provisions, and to the extent that any
existing debt gets repurchased in its entirety under change of
control provisions Moody's will withdraw the respective ratings.
The GSI Group, Inc. headquartered in Assumption, IL, is a leading
manufacturer and supplier of agricultural equipment. The
company's products include grain storage systems (60% of FY06
sales), and swine and poultry production equipment (40%) that is
sold through a network of over 1,000 independent dealers in
approximately 75 countries.
HANOVER INSURANCE: S&P Affirms BB+ Counterparty Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' counterparty
credit and senior unsecured debt ratings and its 'B+' preferred
stock rating assigned to The Hanover Insurance Group Inc. The
'BBB+' counterparty credit and financial strength ratings on
Hanover Insurance Co., Citizens Insurance Co. of America, and
other rated property/casualty affiliates were also affirmed. The
outlook on THG and Hanover remains positive.
The ratings affirmation follows THG's announcement that it will
acquire Professionals Direct Inc. for $23.2 million. PFLD is the
holding company for Professionals Direct Insurance Co., which
writes professional liability coverage for attorneys in 36 states.
PDIC has a 'BBB' financial strength rating.
"The affirmation of the THG and Hanover ratings reflects the very
modest size of PFLD relative to Hanover," said Standard & Poor's
credit analyst John Iten. "In 2006, PFLD generated $18.9 million
in revenues and $1.6 million of net income, and had shareholders'
equity of $12.3 million. Each of these metrics is less than 1% of
THG's comparable 2006 figures, so consolidation of PFLD will have
a minimal impact on the earnings, financial condition, and risk
profile of THG."
HARGRAY HOLDINGS: S&P Revises Outlook from Positive to Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Hilton
Head, South Carolina-based telecommunications provider Hargray
Holdings LLC to stable from positive. S&P also affirmed the 'B'
corporate credit and other ratings on Hargray and related
entities.
"The revision reflects our assessment that an upgrade is not
likely to occur within one to two years because of the company's
proposed change to its capital structure, which will result in
total leverage of about 6.4x, instead of S&P's original
expectations of 6.2x," said Standard & Poor's credit analyst Allyn
Arden. The previous outlook incorporated Hargray's ability to
generate meaningful discretionary cash flow and improve leverage
to the 5x area.
The ratings on Hargray reflect its concentrated services area and
small size, a new management team, below-industry average
profitability, a weak wireless business with significant
competition, and a highly leveraged financial risk profile.
Mitigating factors include Hargray's solid position as an
incumbent local exchange carrier, which represents about 90% of
its access lines, with limited competition and favorable
demographics.
Hargray is the ILEC in the Hilton Head Island area and other
markets in South Carolina. The company is also the incumbent
cable provider in a portion of its ILEC territory, which limits
competition from alternative telecommunications providers, and
allows it to offer telephony, high-speed data, and video services.
Hargray also provides a triple play bundle in more competitive
"edge out" markets. These are markets outside of the company's
core service territory and account for about 11% of sales. The
company has about 78,000 access lines, 24,000 cable video
subscribers, and 26,000 high-speed data customers. It also
provides wireless services, which are predominantly prepaid, and
owns a directories business.
HARRY & DAVID: Improved Results Cue S&P's Stable Outlook
--------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
specialty food and gift marketer Harry & David Operations Corp. to
stable from negative.
Also, the ratings on the Medford, Oregon-based company, including
its 'B' corporate credit rating, were affirmed.
"The outlook revision is a result of the company's steadily
improved results for its core operations and reduced earnings and
cash flow volatility achieved though divesting Jackson & Perkins,"
said Standard & Poor's credit analyst John Thieroff. "Uneven,
often poor, operating results at Jackson & Perkins hindered Harry
& David's ability to deleverage following its buyout in 2004."
The ratings on Harry & David reflect an aggressive financial
policy, a leveraged capital structure, the company's participation
in the intensely competitive and fragmented specialty food and
gifts direct marketing and retailing businesses, and the very high
seasonality of its operations.
HINES NURSERIES: Moody's Junks Corporate Family Rating
------------------------------------------------------
Moody's Investors Service lowered Hines Nurseries, Inc.'s
corporate family rating to Caa1 from B3 and the rating on its
senior unsecured notes to Caa2 from Caa1. The downgrade reflects
Hines' weak credit metrics for the B3 ratings category, its
limited financial flexibility, and the prospects for continued
negative cash flows. Notwithstanding these concerns, the rating
recognizes the improving demand trends in the company's key
markets, its adequate liquidity position, and the likelihood for
improved operating performance in fiscal 2007 relative to the
prior fiscal year. Despite the prospects for improved operating
performance, Moody's expects credit metrics to remain more
appropriate for the Caa1 ratings category. Moody's notes that the
company is currently operating under a waiver from its senior
secured lenders that requires it to file its 2006 10-K and March
2007 10-Q by June 28, 2007. The ratings outlook was revised to
stable from negative.
These ratings were downgraded:
-- Corporate family rating to Caa1 from B3;
-- Probability-of-default rating to Caa1 from B3;
-- $175 million senior unsecured rating to Caa2 (LGD5, 71%) from
Caa1 (LGD4, 68%).
Hines' Caa1 rating is driven by the company's extremely weak
financial metrics, inadequate interest coverage, and the prospects
for continued negative cash flows given its weak earnings and
elevated capital requirements over the next several years. The
rating also considers the inherent volatility in the company's
revenues and earnings given the highly seasonal and competitive
commercial nursery industry. However, Hines' rating is supported
by its strong market position as one of only two national players
in a highly fragmented and regionally-focused market as well as
its long-standing, albeit highly concentrated position with key
home center and mass retailers.
In addition, Moody's recognizes the company's long operating
history, proven service capabilities, and reputation for quality
and innovation. Moody's notes that management has taken several
necessary steps to realign the business and has used proceeds from
asset sales to reduce debt, however, a change to a pay-by-scan
approach by Hines' largest customer combined with heightened
competitive activity from regional participants has significantly
increased the operating risks of the company's core business.
The stable ratings outlook reflects Moody's expectation that
Hines' credit metrics will improve over the near-term due to
favorable demand trends in its key markets and its focus on higher
margin businesses. The outlook also incorporates Moody's
expectation that the company will maintain adequate liquidity,
including continuing access to the revolving credit facility, and
that it will file its financial statements to satisfy the
requirements of the waiver.
Headquartered in Irvine, California, Hines Nurseries, Inc. is the
largest commercial nursery operator in the United States.
HUNTSMAN CORP: Inks $9.6 Billion Agreement with Basell
------------------------------------------------------
Huntsman Corporation and Basell have signed a definitive agreement
pursuant to which Basell will acquire Huntsman in a transaction
valued at approximately $9.6 billion, including the assumption of
debt.
Under the terms of the agreement, Basell will acquire all of the
outstanding common stock of Huntsman for $25.25 per share in cash.
The transaction was unanimously approved by the Boards of
Directors of both Basell and Huntsman. Huntsman's Board of
Directors approved the transaction agreement at the recommendation
of a Transaction Committee comprised of Huntsman independent
directors.
The transaction is subject to customary closing conditions,
including regulatory approval in the U.S. and in Europe, as well
as the approval of Huntsman shareholders. Entities controlled by
MatlinPatterson and the Huntsman family, who collectively own 57%
of Huntsman's common stock, have agreed to approve the
transaction. Closing is expected in the fourth quarter of 2007.
The combined company will have an extensive geographic footprint,
with operations on all continents of the world, and will be well
positioned in fast-growing markets such as China, India, Eastern
Europe and Latin America. In 2006, Basell and Huntsman had
combined revenues of more than $26 billion and employed
approximately 20,900 people.
"Basell's industry-leading polyolefins businesses and Huntsman's
businesses will benefit from the expertise both companies have
demonstrated in technology, innovation and customer service,"
Volker Trautz, CEO of Basell, said. "Together we will be able to
achieve even more."
"This transaction enhances our position as a global industrial
group with long-term strategic assets in the chemicals industry,"
Len Blavatnik, Chairman and founder of U.S.-based Access
Industries, owner of Basell, said. "Basell's management team has
done an excellent job in growing and enhancing the company over
the last two years, putting it in a position to make this
acquisition. We look forward to further growth and profitability
in this industry."
"This transaction opens a new chapter in the proud history of
Huntsman and for the thousands of people who work in our
facilities around the world," Jon M. Huntsman, founder and
Chairman of Huntsman Corporation, said. "I am confident Basell is
the right owner for the company going forward. The proceeds of
this transaction will allow our family to focus more effectively
on the elimination of human suffering and on finding cures for
cancer."
"This transaction represents outstanding value for Huntsman's
shareholders," Peter R. Huntsman, President and CEO of Huntsman,
said. "The merger of Basell and Huntsman creates one of the
largest chemical companies in the world. I am confident that this
combination will allow us to even more effectively pursue our
underlying business strategies and continue to provide rewarding
opportunities for our associates."
About Basell
Basell -- http://www.basell.com/-- produces and markets
polypropylene and advanced polyolefin products and supplies
polyethylene and catalysts. Basell, together with its joint
ventures, has manufacturing facilities in 19 countries and sells
products in more than 120 countries. Basell is privately owned by
Access Industries.
About Huntsman
Huntsman Corp. -- http://www.huntsman.com/-- manufactures and
markets differentiated and commodity chemicals. Its operating
companies manufacture products for a variety of global industries
including chemicals, plastics, automotive, aviation, textiles,
footwear, paints and coatings, construction, technology,
agriculture, health care, detergent, personal care, furniture,
appliances and packaging.
HUNTSMAN CORP: Moody's Reviews Ratings and May Downgrade
--------------------------------------------------------
Moody's Investors Service placed the debt ratings and the
corporate family ratings (CFR -- Ba3) for Huntsman Corporation and
Huntsman International LLC, a subsidiary of Huntsman under review
for possible downgrade. This rating action follows the company's
announcement that it has entered into a definitive agreement
pursuant to which an entity of the Basell group (CFR Ba3 under
review for a downgrade) will acquire Huntsman in a transaction
valued at approximately $9.6 billion, including the assumption of
approximately $4.0 billion of Huntsman debt. Under the terms of
the agreement, Basell will acquire all of the outstanding common
stock of Huntsman for $25.25 per share in cash and the agreement
is subject to regulatory review. As this acquisition by Basell is
assumed to be financed largely with debt, Huntsman's credit
profile is likely be materially weaker than expected when Moody's
upgraded the Huntsman CFR to Ba3 in March of 2007. From a rating
perspective, the potential for a weaker credit profile may
override the strategic benefits of combining these two businesses
until the incremental debt is reduced over time.
These ratings were affected by this action:
Issuer: Huntsman Corporation
-- Corporate Family Rating, Ba3
-- Issuer: Huntsman International LLC
-- Corporate Family Rating, Ba3
-- Senior Secured Bank Credit Facility, Ba1, LGD2, 21%
-- Senior Subordinated Regular Bond/Debenture, B2, LGD5, 89%
Issuer: Huntsman LLC
-- Senior Secured Regular Bond/Debenture, Ba1, LGD2, 21%
-- Senior Unsecured Regular Bond/Debenture, Ba3, LGD4, 57%
Outlook Actions:
Issuer: Huntsman Corporation
-- Outlook, Changed To Rating Under Review for Downgrade From
Stable
Issuer: Huntsman International LLC
-- Outlook, Changed To Rating Under Review for Downgrade From
Stable
Issuer: Huntsman LLC
-- Outlook, Changed To Rating Under Review for Downgrade From
Stable
Moody's highlighted in its March 2007 upgrade press release the
ongoing risk of Huntsman's adherence to its new financial policies
in the event that equity returns are less robust than anticipated
and we noted that lackluster equity performance was a key factor
in management's decision to transform the company with asset
sales.
Moody's review will also focus on the strategic benefits of the
transaction, including the cash flow anticipated from the
combination, and management's future plans to improve the
company's credit measures. In the event the new owner decides to
refinance Huntsman's debt the ratings will likely be withdrawn.
Huntsman Corporation is a global manufacturer of differentiated
and commodity chemical products. Huntsman's products are used in
a wide range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and non-
durable consumer products, electronics, medical, packaging, paints
and coatings, power generation, refining and synthetic fiber
industries. Huntsman had revenues of $10.6 billion for fiscal
year 2006.
ION MEDIA: Revises Exchange Offer; Extends Offer Until July 11
--------------------------------------------------------------
ION Media Networks, Inc. disclosed a revision to an exchange offer
it launched on June 8, 2007.
The exchange offer has been extended and will now expire at
12:01 a.m., New York City time, on July 11, 2007, unless extended
or terminated. The exchange offer was originally scheduled to
expire at 12:01 a.m., New York City time, on July 10, 2007.
As of June 26, 2007, no shares have been tendered in the exchange
offer.
The company is not changing the consideration being offered in the
exchange offer. However, the company will extend the exchange
offer for 10 business days following the scheduled expiration date
of the exchange offer if holders are to receive the minority
exchange consideration.
Minority Exchange Consideration
As disclosed in the exchange offer, if holders of 50% or less of
either series of senior preferred stock tender in the exchange
offer and, as a result, the holders of both series of senior
preferred stock do not approve the amendments to the certificates
of designation and the issuance of preferred stock, including the
series A-1 convertible preferred stock, that will rank senior to
the senior preferred stock, holders will receive these
consideration:
-- For each tendered share of 14-1/4% preferred stock, the
holder will receive $7,500 principal amount of series A
notes and $500 initial liquidation preference of series B
convertible preferred stock, which would rank junior to
any unexchanged senior preferred stock; and
-- For each tendered share of 9-3/4% preferred stock, the
holder will receive $4,500 principal amount of series A
notes and $500 initial liquidation preference of series B
convertible preferred stock.
In the event that at the scheduled expiration date of the exchange
offer, holders of 50% or less of either series of senior preferred
stock have tendered in the exchange offer, the exchange offer will
be extended for 10 business days.
Withdrawal rights will continue to apply during the 10 business
day-period permitting holders who do not wish to receive the
minority exchange consideration to withdraw their previously
tendered shares and revoke their consents.
During any such 10-day extension, holders will continue to be
required to consent to the proposed amendments in order to validly
tender their shares in the exchange offer.
If, upon conclusion of the extension, a majority of shares of
either series of senior preferred stock have been tendered,
holders of such series will still receive the minority exchange
consideration, although the proposed amendments will become
effective with respect to such series.
Except as disclosed, there are no changes to the terms or
conditions of the exchange offer.
Initial Exchange Offer
The company initially offered to exchange any and all of its
outstanding 13-1/4% cumulative junior exchangeable preferred
stock, currently accruing dividends at the rate of 14-1/4%, and
9-3/4% series A convertible preferred stock for:
-- newly-issued 11% series A mandatorily convertible senior
subordinated notes due 2013, and
-- depending upon participation levels in the initial
exchange offer, either newly-issued 12% series A-1
mandatorily convertible preferred stock or 12% series
B mandatorily convertible preferred stock.
As disclosed in the offer to exchange dated June 8, 2007, holders
will receive these consideration:
-- For each tendered share of 14-1/4% preferred stock, the
holder will receive $7,000 principal amount of series A
notes and $1,000 initial liquidation preference of series
A-1 convertible preferred stock, which would rank senior
to any unexchanged senior preferred stock; and
-- For each tendered share of 9-3/4% preferred stock, the
holder will receive $4,000 principal amount of series A
notes and $1,000 initial liquidation preference of series
A-1 convertible preferred stock.
Stockholders may obtain a free copy of the documents at Securities
and Exchange Commission's Website, http://www.sec.gov/or by
contacting D.F. King & Co., Inc., the exchange offer information
agent, at (800) 431-9643.
This press release is not an offer to purchase or an offer to
exchange or a solicitation of acceptance of the offer to exchange,
which may be made only pursuant to the terms of the offer to
exchange and related letter of transmittal and consent.
About ION Media
ION Media Networks Inc. in West Palm Beach, Florida (AMEX: ION)
-- http://www.ionmedia.tv/-- owns and operates a broadcast
television station group and ION Television, reaching over 90
million U.S. television households via its nationwide broadcast
television, cable and satellite distribution systems. ION
Television currently features popular television series and movies
from the award-winning libraries of Warner Bros., Sony Pictures
Television, CBS Television and NBC Universal. In addition, the
network has partnered with RHI Entertainment, which owns over
4,000 hours of acclaimed television content, to provide high-
quality primetime programming beginning July 2007.
ION Media Networks has launched several new digital TV brands,
including qubo, a television and multimedia network for children
formed in partnership with Scholastic, Corus Entertainment,
Classic Media and NBC Universal, as well as ION Life, a television
and multimedia network dedicated to health and wellness for
consumers and families.
* * *
As reported in the Troubled Company Reporter on May 9, 2007,
Standard & Poor's Ratings Services placed its ratings on Ion Media
Networks Inc., including the 'CCC+' corporate credit rating, on
creditwatch with developing implications. The creditwatch
placement follows Ion's announcement that it entered into an
agreement with Citadel Investment Group LLC and NBC Universal Inc.
for a comprehensive recapitalization of Ion.
J.P. MORGAN: Fitch Affirms BB Rating on $20.1 Mil. Class H Certs.
-----------------------------------------------------------------
Fitch Ratings has upgraded J.P. Morgan Commercial Mortgage Finance
Corp.'s mortgage pass-through certificates, series 1999-C8, as:
-- $11 million class F to 'AAA' from 'AA+'.
In addition Fitch has affirmed the rating on these classes:
-- $299.1 million class A-2 at 'AAA';
-- Interest-only class X at 'AAA';
-- $36.6 million class B at 'AAA';
-- $32.9 million class C at 'AAA';
-- $14.6 million class D at 'AAA';
-- $25.6 million class E at 'AAA';
-- $16.5 million class G at 'A-';
-- $20.1 million class H at 'BB'.
The $14.8 million class J remains at 'CC/DR4'. Class A-1 has paid
in full.
The upgrade reflects increased credit enhancement due to paydown,
scheduled amortization, as well as the additional defeasance of 13
loans (10.6%) since the last Fitch rating action. As of the June
2007 distribution date, the pool's aggregate principal balance has
been reduced 35.6% to $471.1 million from $731.5 million at
issuance. Since issuance, 24 loans (32.6%) have defeased,
including two (13.8%) of the ten largest loans in the pool.
The second largest loan (4.7%) in the pool, a 692-unit multifamily
property in Rolling Meadows, IL is currently specially serviced
and is 60+ days delinquent. The May 2007 occupancy is 87%;
however, the loan has been periodically 30 days delinquent since
July 2005 due to problems with late-paying tenants. The property
is currently listed for sale and no losses are expected at this
time. Fitch will continue to closely monitor the performance of
this loan.
J.P. MORGAN: Fitch Affirms B- Rating on $2.6 Million Class P Loans
------------------------------------------------------------------
Fitch Ratings affirms JP Morgan Commercial Mortgage 2004-C1 as:
-- $56.1 million class A-1 at 'AAA';
-- $210 million class A-2 at 'AAA';
-- $303.2 million class A-3 at 'AAA';
-- $229.8 million class A-1A at 'AAA';
-- Interest-only classes X-1 and X-2 at 'AAA';
-- $10.4 million class H at 'BBB-';
-- $27.4 million class B at 'AAA';
-- $11.7 million class C at 'AAA';
-- $22.1 million class D at 'AA-';
-- $13 million class E at 'A';
-- $11.7 million class F at 'A-';
-- $9.1 million class G at 'BBB+';
-- $6.5 million class J at 'BB+';
-- $5.2 million class K at 'BB';
-- $3.9 million class L at 'BB-';
-- $5.2 million class M at 'B+';
-- $2.6 million class N at 'B';
-- $2.6 million class P at 'B-'.
Fitch does not rate the $11 million class NR.
The affirmations reflect stable performance of the transaction and
minimal paydown since Fitch's last formal review. As of the May
2006 distribution date, the pool has paid down 10.4%, to $933.9
million from $1.04 billion at issuance. In total, 11 loans
(8.7%)) have defeased. Currently, there are no delinquent or
specially serviced loans.
Fitch reviewed the credit assessment of the Forum Shops (16.3%),
which is a 655,079-square foot regional Mall located in Las Vegas,
NV. The whole loan comprises three pari-passu A notes and a B
note, of which only the A2 note serves as the collateral in this
transaction. At issuance, only phases I and II were completed
amounting to 489,044 sf. A property expansion was completed in
2004 adding 166,035 sf to the property. Occupancy as of year-end
2006 increased to 99% from 96% at issuance. The credit assessment
remains investment grade.
KB HOME: To Redeem All $250 Million Senior Subordinated Notes
-------------------------------------------------------------
KB Home is calling for the redemption of all of its outstanding
$250 million aggregate principal amount 9-1/2% senior subordinated
notes due 2011 on Friday, July 27, 2007.
The notes will be redeemed at a price equal to $1,031.67 per
$1,000 principal amount, plus all accrued interest to the date of
redemption.
The notes are traded on the New York Stock Exchange under the
symbol KBH11, CUSIP 48666KAD1.
The U.S. Bank Corporate Trust Services, paying agent, can be
contacted through 1-800-934-6802.
About KB Home
Based in Los Angeles, California, KB Home (NYSE: KBH) --
http://www.ketb.com/-- is an American homebuilder. The company
has domestic operating divisions in 15 states, building
communities from coast to coast. Kaufman & Broad S.A., a company
subsidiary, is publicly-traded on Euronext Paris and is a
homebuilder in France.
* * *
As reported in the Troubled Company Reporter on April 16, 2007,
Moody's Investors Service confirmed the ratings of KB Home,
including its Ba1 corporate family rating, Ba1 ratings on the
company's senior notes, and Ba2 ratings on the company's
subordinated notes. The ratings were taken off review for
downgrade, concluding the review that was commenced on
Dec. 15, 2006. The ratings outlook is negative.
LAKE AT LAS VEGAS: Moody's Junks Rating on Proposed $540MM Loan
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to the proposed
new $540 million first-lien senior secured bank credit facility of
Lake at Las Vegas Joint Venture.
At the same time, Moody's affirmed the company's corporate family
rating of Caa1, the probability of default rating of Caa2, and the
rating of Caa1 on the company's existing first-lien term loan.
The ratings outlook is negative.
The negative ratings outlook is based on Moody's expectation that
weakness in bulk lot sales to homebuilders will persist throughout
2008, with any pick up likely to be sluggish at first.
The ratings incorporate the company's weak financial and operating
performance since the last half of 2006 compared with prior
Moody's expectations, by the oversupply of inventory in the Las
Vegas housing market, and by the necessity for the company to seek
substantial covenant relaxation. In addition, the ratings reflect
the geographic and demographic concentration of the Lake Las Vegas
project, market risk, and the cyclical nature of the homebuilding
and land development industries.
At the same time, the ratings acknowledge the long-term strength
of the Las Vegas housing market, the successful track record of
the owners in prior large developments, the substantial
infrastructure investment already made in the project, the
significant collateral in the structure, the unique attributes of
the development's water rights and 320-acre private lake, and the
level of project acceptance achieved to date.
Going forward, the ratings could be pressured further if this
refinancing plan could not be completed, if lot takedowns did not
resume at a reasonable pace, if further covenant violations were
to occur, or if an equity infusion were needed for near-term
liquidity needs. The ratings could stabilize from a housing
recovery, a significant resumption in lot takedowns, and more
rapid pay down of debt than currently anticipated.
These rating actions were taken:
-- Caa1 (LGD3, 33%) rating assigned on the proposed new
$475 million first-lien senior secured term loa
-- Caa1 (LGD3, 33%) rating assigned on the proposed new
$65 million first-lien senior secured synthetic revolver
-- Corporate family rating affirmed at Caa1
-- Caa1 (LGD3, 33%) rating affirmed on the existing $500 million
first-lien senior secured term loan
-- Probability-of-default rating affirmed at Caa2
Headquartered in Las Vegas, NV, Lake at Las Vegas Joint Venture
and its co-borrower, LLV-1, LLC, own and operate the Lake Las
Vegas Resort, a 3592-acre master planned residential and resort
destination located 17 miles east of the Las Vegas strip. Cash
revenues and cash EBITDA for 2006 were approximately $58.6 million
and $12.1 million, respectively.
LASALLE COMMERCIAL: Fitch Affirms Low-B Ratings on Six Classes
--------------------------------------------------------------
Fitch Ratings has affirmed LaSalle Commercial Mortgage Securities,
Inc.'s commercial mortgage pass-through certificates, series 2006-
MF4, as:
-- $388.4 million class A at 'AAA';
-- Interest-only class X at 'AAA';
-- $7.9 million class B at 'AA';
-- $11.8 million class C at 'A';
-- $9.0 million class D at 'BBB+';
-- $2.3 million class E at 'BBB';
-- $4.5 million class F at 'BBB-';
-- $7.9 million class G at 'BB+';
-- $2.3 million class H at 'BB';
-- $1.7 million class J at 'BB-';
-- $1.7 million class K at 'B+';
-- $1.1 million class L at 'B';
-- $564,000 class M at 'B-'.
Fitch does not rate the $6.2 million class N certificates.
The affirmations are the result of minimal paydown since issuance
and minimal expected losses on the loans in special servicing.
Currently there are four loans (1.8%) in special servicing. Fitch
expected losses will be absorbed by the non-rated class N
certificates. As of the June 2007 distribution report, the
transaction has been reduced 1.2% to $445.3 million from $450.9
million at issuance.
The largest asset in special servicing (0.7%) is secured by a
multifamily property in Grand Prairie, TX and is currently real-
estate owned.
The second largest specially serviced loan (0.5%) is secured by a
multifamily property in Passaic, NJ and is 90 days delinquent.
The third largest specially serviced loan (0.5%) is secured by a
multifamily property in Dallas, TX and is 60 days delinquent.
LBI MEDIA: Moody's Rates New $225 Million Senior Notes at B2
------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to LBI Media,
Inc.'s new $225 million Senior Subordinated Notes due 2017 and
affirmed LBI's B1 corporate family rating. In addition, Moody's
upgraded LBI's senior secured credit facility to Ba1 from Ba2.
The outlook is stable.
Proceeds from the new Senior Subordinated Notes will be used to
refinance the company's 10.125% Senior Subordinated Notes due
2012, repay borrowings under its revolving credit facility and
fund the acquisition of KPNZ-TV. The ratings on the 10.125%
Senior Subordinated Notes will be withdrawn upon completion of the
redemption of the notes.
Moody's has taken these ratings actions:
LBI Media, Inc.
-- Corporate Family Rating -- Affirmed B1
-- Probability of Default Rating -- Affirmed B1
-- $150 million Secured Revolver -- Upgraded to Ba1 from Ba2
(from LGD 2, 21% to LGD 2, 18%)
-- $110 Million Secured Term Loan -- Upgraded to Ba1 from Ba2
(from LGD 2, 21% to LGD 2, 18%)
-- $225 Million Senior Subordinated Notes due 2017 -- Assigned
B2 (LGD 4, 70%)
Ratings/assessments to be withdrawn:
-- 10.125% Senior Subordinated Notes due 2012 -- B2 (LGD 4, 69%)
The outlook is stable.
LBI's rating reflects the company's high debt to EBITDA leverage
of 7.4x for TTM ended 3/31/2007 (as adjusted for Moody's standard
adjustments and including the holding company's, LBI Media
Holdings, Inc.'s unrated senior discount notes and pro forma for
the additional equity contribution from the parent in April 2007),
lack of significant geographic diversification and revenue and
cash flow concentration in the Los Angeles market. Additionally,
LBI's ratings reflect its modest scale and our expectation that
the company will remain acquisitive as it seeks to expand its
current station portfolio in existing and new markets.
The company's ratings are supported by its industry leading
margins, clustering of radio and television stations in the top
Hispanic markets and concentration of local advertising revenues.
In addition, Moody's expects LBI to benefit from the strong
Hispanic demographic trends and expected above average growth
rates for the Hispanic media market.
LBI Media, Inc., headquartered in Burbank, CA, is a Spanish-
language broadcasting company that will own 21 radio stations and
5 television stations in Los Angeles, Houston, Dallas-Fort Worth,
San Diego and Salt Lake City upon completion of the KPNZ-TV
acquisition.
LENNAR CORP: Posts $244.2 Million Net Loss in Qtr. Ended May 31
---------------------------------------------------------------
Lennar Corporation disclosed Tuesday in a regulatory filing with
the Securities and Exchange Commission that it incurred a net loss
of $244,205,000 for the second quarter ended May 31, 2007,
compared to net earnings of $324,747,000 for the same period in
2006.
The company's total revenues for the quarter ended May 31, 2007,
decreased to $2,875,943,000, from total revenues of $4,577,503,000
for the quarter ended May 31, 2006.
CEO Blames Housing Market Deterioration
Commenting on the results, Stuart Miller, President and Chief
Executive Officer of Lennar Corporation, said, "The housing
market has continued to deteriorate throughout the second quarter.
The supply of new and existing homes has continued to increase
resulting in declining home prices across our markets. We have
continued to adjust pricing to meet today's market conditions.
This has allowed us to carefully manage inventory levels; however,
it has also resulted in lower margins and further impairments."
Mr. Miller continued, "We have remained focused on our balance
sheet first approach. Through our quarterly operating performance
and asset management review process, we have refined individual
asset strategies and values based on current market conditions.
As the market and our operating results have declined, our focus
on strong cash flow generation has continued to strengthen our
balance sheet."
"Our management team continues to be very focused on daily
operations. We are using the slow market conditions to refine our
operating processes and improve efficiencies. We are focused on
the four steps of our operating strategy: rightsizing SG&A
expenses,
reducing hard construction costs, driving sales and aggressively
managing our assets. We continue to aggressively manage our
inventory levels by converting inventory to cash, and reducing
both land purchases and starts."
Mr. Miller concluded, "As we look to our third quarter and the
remainder of 2007, we continue to see weak, and perhaps
deteriorating, market conditions. Given uncertain market
conditions, we continue to lack visibility as to future results,
but we currently expect to be in a loss position in our third
quarter. While second quarter results are disappointing, in
these weak market conditions, we will remain focused on our
balance sheet first strategy which should position us well for
future opportunities."
Results of Operations
Homebuilding
------------
Revenues from home sales decreased 33% in the second quarter
of 2007 to $2.7 billion from $4.0 billion in 2006. Revenues
were lower primarily due to a 29% decrease in the number of
home deliveries and a 7% decrease in the average sales price
of homes delivered in 2007.
Gross margins on home sales excluding FAS 144 valuation
adjustments were $364.8 million, or 13.6%, in the second
quarter of 2007, compared to $955.2 million, or 23.7%, in
2006. Gross margin percentage on home sales decreased
compared to last year in all of the company's homebuilding
segments primarily due to higher sales incentives offered to
homebuyers.
Selling, general and administrative expenses decreased
$78.9 million, or 17%, in the second quarter of 2007,
compared to the same period last year. As a percentage of
revenues from home sales, selling, general and administrative
expenses increased to 14.7% in the second quarter of 2007,
from 11.8% in 2006. The 290 basis point increase was
primarily due to lower revenues and costs related to the
consolidation of operations in certain markets.
Financial Services
------------------
Operating earnings for the Financial Services segment were
$14.2 million in the second quarter of 2007, compared to
$34.6 million last year. The decrease was primarily due to
decreased profitability from the segment's mortgage operations
as a result of decreased volume and profit per loan, and
$14.4 million of partial write-offs of land seller notes
receivable due to the renegotiation of terms.
Corporate General and Administrative Expenses
---------------------------------------------
Corporate general and administrative expenses were reduced by
$10.7 million, or 19%, in the second quarter of 2007, compared
to the same period last year. As a percentage of total revenues,
corporate general and administrative expenses increased to 1.6%
in the second quarter of 2007, from 1.2% in 2006, primarily due
to lower revenues.
About Lennar Corp.
Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/
-- founded in 1954, builds affordable, move-up and retirement
homes primarily under the Lennar brand name. Lennar's Financial
Services segment provides primarily mortgage financing, title
insurance, and closing services for both buyers of the company's
homes and others.
* * *
In March 2006, Moody's Investors Service raised Lennar Corp.'s
senior subordinated debt rating to Ba1.
LIMITED BRANDS: Plans Corporate Downsizing to Save $100 Million
---------------------------------------------------------------
Limited Brands, Inc. provided an update of several initiatives to
refocus its business on key growth areas, reduce costs and
accelerate programs to return value to shareholders.
"We are on track with our value-enhancing strategic initiatives
and are now ready to embark on fine-tuning the organization to
better match the size and complexity of the 'new Limited Brands'
where we'll focus primarily on intimate apparel and personal
care," Leslie H. Wexner, chairman and chief executive officer,
said. "To improve overall profitability, we have launched a broad
effort to streamline the company, enhance productivity and
efficiency, and focus resources on the most promising growth
opportunities."
"Increasing our previously declared stock repurchase program and
accelerating the pace of our repurchases reflect the strength of
our balance sheet, our confidence in the company's future growth
prospects and our commitment to returning value to shareholders,"
added Wexner.
Cost Reduction Initiatives
Limited Brands initiated a complete review of its selling, general
and administrative expenses with a view to re-sizing and
realigning the company's expense structure to reflect the
company's new enterprise structure.
The company will undertake a significant reduction of SG&A
expenses with expected savings of approximately $100 million
annually beginning in fiscal 2008. These savings will be
primarily realized through a decrease in headcount of
approximately 10% at the corporate and brand home offices, which
includes the elimination of open positions, reduction of current
staff and transfers to the new Express business in conjunction
with the upcoming sale. No headcount reductions are anticipated
in stores, distribution centers or call centers. The current
corporate and brand home office employment is approximately 5,300
associates. Savings will also be realized through a reduction of
other operating expenses.
One-time costs and the specific impact on 2007 financial results
will be provided at a future date once specific plans are
finalized.
Share Repurchase Program and Additional Debt Financing
The company is increasing the $500 million share repurchase
program to $1 billion. Under this program, the company has
repurchased $190.5 million worth of shares and intends to
accelerate the rate of repurchases. The specific timing, amount
and method of repurchases will vary based on market conditions and
other factors.
The company intends to raise $1.25 billion of debt to fund these
share repurchases, the recent acquisition of La Senza and other
general corporate requirements.
Strategic Alternatives
Limited Brands had signed a definitive agreement with affiliates
of Golden Gate Capital to sell a 67% ownership interest in its
Express brand for pre-tax cash proceeds of $548 million. Subject
to customary closing conditions, the transaction is expected to
close on July 6, 2007.
The Department of Justice has granted early termination of the
waiting period applicable to the acquisition of an ownership
interest in Express under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
The company continues to explore strategic alternatives for its
Limited Stores business. No timetable has been established for
completion of the Limited Stores process.
The company is also evaluating the feasibility of alternatives
involving certain other non-core assets, including real estate and
other investments. The company is not considering alternatives
for Mast Industries, Inc., which is strategic to the sourcing and
production of merchandise for Victoria's Secret, Pink and La
Senza.
About Limited Brands
Headquartered in Columbus, Ohio, Limited Brands, Inc. (NYSE: LTD)
-- http://www.limitedbrands.com-- sells women's and men's
apparel, lingerie, beauty and personal care products through its
more than 3,700 stores.
* * *
As reported on June 26, 2007, Moody's Investors Service placed the
(P)Ba1 preferred shelf rating of Limited Brands, Inc. on review
for possible downgrade following the company's announcement that
it intends to raise an additional $1.25 billion of debt to finance
a $500 million increase in its share repurchase program, the La
Senza acquisition, and for general corporate purposes.
MAPS CLO: S&P Rates $16 Million Class D Notes at BB
---------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to MAPS CLO Fund II Ltd./MAPS CLO Fund II LLC's $362
million floating-rate notes due 2022.
The preliminary ratings are based on information as of June 26,
2007. Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The expected commensurate level of credit support in the
form of subordination to be provided by the notes junior
to the respective classes, and by the subordinated
interests and overcollateralization;
-- The cash flow structure, which was subjected to various
stresses requested by Standard & Poor's;
-- The collateral manager's experience; and
-- The transaction's legal structure, which includes the
issuer's bankruptcy remoteness.
Preliminary Ratings Assigned
MAPS CLO Fund II Ltd./MAPS CLO Fund II LLC
Class Rating Amount
----- ------ ------
A-1 AAA $186,250,000
A-1R* AAA $50,000,000
A-1S AAA $25,000,000
A-1J AAA $18,750,000
A-2 AA $18,000,000
B A $26,000,000
C BBB $22,000,000
D BB $16,000,000
Subordinated notes NR $38,000,000
* Revolving floating-rate notes.
NR - Not rated.
METALS USA: Moody's Junks Rating on Proposed $300MM Sr. Notes
-------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Metals USA
Holdings Corp.'s proposed $300 million of senior unsecured
floating rate PIK toggle notes and affirmed the company's B2
corporate family and probability of default ratings. However, the
rating outlook was changed to negative from stable. MUSA Holdings
owns Flag International Holdings Corp., which in turn owns Metals
USA, Inc. Moody's also affirmed the B3 rating for Metals USA,
Inc.'s senior secured notes due 2015 and MUSA Holdings' SGL-3
speculative grade liquidity rating. The net proceeds of the MUSA
Holdings note offering will be used to pay an approximate $140
million dividend to its equity holders, primarily Apollo
Management, and retire $150 million of PIK toggle notes issued in
December 2006.
This rating was assigned:
Metals USA Holdings Corp.
-- $300 million of senior unsecured floating rate PIK toggle
notes due 2014 -- Caa1 (LGD5, 89%)
These ratings were affirmed:
Metals USA Holdings Corp.
-- Corporate family rating -- B2
-- Probability of default rating -- B2
-- Speculative grade liquidity rating -- SGL-3
Metals USA, Inc.
-- $275 million of 11.125% guaranteed senior secured notes due
2015 -- B3 (LGD4, 64%)
The Caa1 rating on MUSA Holdings' $150 million floating rate PIK
toggle notes due 2012 will be withdrawn at the conclusion of this
transaction.
MUSA Holdings' ratings reflect its relatively high leverage, the
aggressive financial strategies of its owners, the cyclicality of
the steel industry and the metal-consuming end markets that the
company serves, and the weak performance of its relatively small
Building Products Group due to the US housing downturn. MUSA
Holdings' pro forma debt was $1.012 million as of March 31, 2007
or 6.0x LTM March 31 EBITDA. The proposed PIK toggle notes add
about one turn of leverage. While the additional Holdco leverage
places further pressure on Metals USA to service, via upstream
dividends, the high interest cost of the MUSA Holdings notes, the
existing ratings were affirmed as the increased financial risk was
not deemed to be sufficient to warrant a downgrade. MUSA Holdings
has filed an S-1 for an initial public offering of equity and
intends to do an IPO when "valuations are right", the proceeds of
which will be used to retire all or a portion of the PIK toggle
notes.
MUSA Holdings' and Metals USA's ratings positively reflect the
company's geographic and customer diversification, favorable steel
demand and pricing, and the company's solid financial performance
in its metals distribution segments, where gross margins tend to
be relatively stable due to the high correlation between sales and
the cost of purchased metal. Furthermore, should metal market
conditions weaken, Moody's expects risk will be dampened by the
countercyclical nature of metal distributors' cash flow.
Typically, when a metal distributor enters a cyclical downturn and
metals prices and demand fall, it can replace inventory at lower
cost and reduce overall purchases, which leads to the generation
of cash from working capital reductions. This moderates working
capital borrowings and maintains liquidity.
Moody's changed the rating outlook for MUSA Holdings to negative
from stable due to the convergence of concerns that take on
increased importance given the company's higher pro forma leverage
and the heightened potential for recurring negative free cash flow
and, therefore, ever-increasing debt.
The primary concerns behind the change in outlook include:
1) working capital metrics that continue to be poorer than
for other rated metal distributors,
2) the company's exposure to higher interest rates due to the
large amount of floating rate debt in its capital
structure, and
3) the fact that, in Moody's opinion, steel industry
fundamentals will not be strengthening from their current
healthy state.
Metals USA's liquidity was recently fortified by the $75 million
increase in its asset-based revolving credit facility, to $525
million. Pro forma revolver borrowings will be around $330
million and letter of credit usage about $18 million, whereas the
borrowing base supports availability of approximately $495
million. Moody's believes it will be difficult for the company to
reduce revolver borrowings over the next year due to growing
working capital needs, high interest expense, and payments for
small tuck-in acquisitions. While revolver availability will
expand with increased receivables and inventory, due to the
facility's borrowing base, Moody's nevertheless consider MUSA
Holdings' liquidity to be rather limited. Therefore, Moody's
affirmed the company's SGL-3 speculative liquidity rating.
The Caa1 rating for MUSA Holdings floating rate PIK toggle notes
reflects their 89% loss-given-default, which is a function of the
notes' structural subordination to all other obligations at Holdco
and Metals USA. The LGD for Metals USA, Inc.'s senior secured
notes is 64%, which is somewhat better than the 72% the notes had
previously. The improvement reflects the loss absorbing capacity
of the new Holdco notes, although this is partially offset in
Moody's LGD model by the increased size of Metals USA, Inc.'s
asset-backed revolving credit facility. As a result, the B3
rating on the Metals USA, Inc. notes did not change.
Moody's previous rating action for MUSA Holdings was on December
13, 2006, when the company first issued PIK toggle notes, which
were rated Caa1, and the corporate family rating was lowered one
notch, to B2.
Metals USA Holdings Corp., headquartered in Houston, is the parent
company of Metals USA, Inc., a leading US distributor of carbon
steel, stainless steel, aluminum, red metals, and manufactured
metal components, operating out of 32 processing and distribution
facilities. It also operates a Building Products business,
primarily servicing the residential remodeling market. For the 12
months ended March 31, 2007, the company had net sales of
$1.84 billion.
METALS USA: Planned Leverage Increase Cues S&P to Cut Rating to B-
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Metals
USA Holding Corp. and its subsidiary Metals USA Inc. to 'B-' from
'B', following the company's announcement that it plans to
increase leverage by issuing $300 million of senior unsecured pay-
in-kind toggle notes at Metals USA Holding. In addition, Standard
& Poor's assigned its 'CCC' rating to the notes. The outlook is
stable.
Proceeds from the notes will be used to repay existing notes as
well as to fund a special dividend to its private equity holders
Apollo Management L.P. Pro forma for the transaction, the company
will have about $971 million of adjusted for operating leases, as
of March 31, 2007.
"The downgrade reflects the company's aggressive debt leverage as
well as our concerns about end-market demand and the timing of the
issuance," said Standard & Poor's credit analyst Marie Shmaruk.
"With an 18% increase in debt of $150 million, pro forma for the
transaction, for the 12 months ended March 31, 2007, total
adjusted debt to EBITDA will be a very aggressive 6x. Moreover,
S&P view Apollo's releveraging of the company within six months of
its last special dividend as an aggressive financial policy that
did not allow for a meaningful debt reduction."
Apollo completed a note offering in December 2006 to finance a
$150 million special dividend. Lastly, the increase in leverage
comes at a time of heightened uncertainties and concerns about
demand and the strength of end markets.
The Houston, Texas-based Metals USA Inc. is one of the largest
metals processors and distributors in the highly fragmented North
American market.
"We could lower our ratings on the company should further actions
by its financial sponsor result in a more aggressive financial
profile and weaker credit metrics," Ms. Shmaruk said.
"Conversely, we could raise the ratings if the company were to
complete an initial public offering, resulting in a more moderate
capital structure. However, previous attempts by Apollo were not
successfully completed given business valuations."
MORGAN STANLEY: Moody's Assigns Low-B Ratings on Six Certificates
-----------------------------------------------------------------
Moody's Investors Service assigned definitive ratings to
securities issued by Morgan Stanley Capital I Trust 2007-IQ14.
The provisional ratings issued on May 17, 2007 have been replaced
with these definitive ratings:
-- Class A-1, $119,100,000, rated Aaa
-- Class A-1A, $725,166,000, rated Aaa
-- Class A-2, $682,300,000, rated Aaa
-- Class A-3, $53,800,000, rated Aaa
-- Class A-AB, $140,800,000, rated Aaa
-- Class A-4, $1,062,242,000, rated Aaa
-- Class A-M, $420,487,000, rated Aaa
-- Class A-J, $200,000,000, rated Aaa
-- Class B, $18,394,000, rated Aa1
-- Class C, $79,704,000, rated Aa2
-- Class D, $55,179,000, rated Aa3
-- Class E, $12,263,000, rated A1
-- Class F, $42,917,000, rated A2
-- Class G, $42,918,000, rated A3
-- Class H, $73,573,000, rated Baa1
-- Class J, $49,049,000, rated Baa2
-- Class K, $55,179,000, rated Baa3
-- Class L, $18,394,000, rated Ba1
-- Class M, $12,262,000, rated Ba2
-- Class N, $24,524,000, rated Ba3
-- Class O, $12,262,000, rated B1
-- Class P, $12,262,000, rated B2
-- Class Q, $18,394,000, rated B3
-- Class X, $4,904,869,086*, rated Aaa
* Approximate notional amount
Moody's has assigned definitive ratings to these additional
classes of certificates:
-- Class A-2FL, $500,000,000, rated Aaa
-- Class A-5FL, $150,000,000, rated Aaa
-- Class A-MFL, $70,000,000, rated Aaa
-- Class A-JFL, $192,389,000, rated Aaa
Moody's has withdrawn the provisional ratings of these classes of
certificates:
-- Class X-2, $0, WR
-- Class X-W, $0, WR
MOSAIC COMPANY: Elects to Prepay $150 Million Term Loan on June 29
------------------------------------------------------------------
The Mosaic Company notified the lenders under its senior secured
bank credit facility of its election to prepay $150 million
principal amount of term loans under the Facility on June 29,
2007. This prepayment was in addition to the $250 million prepaid
on May 1, 2007.
The prepayments will consist of $56.4 million principal amount of
Term Loan A-1 borrowings and $81.8 million principal amount of
Term Loan B borrowings by Mosaic and $6.5 million principal amount
of Term Loan A borrowings by its subsidiary, Mosaic Potash
Colonsay ULC.
After the prepayments, outstanding term loans under the Facility
will be reduced to $28 million principal amount of Term Loan A
borrowings, $244.8 million principal amount of Term Loan A-1
borrowings, and $378.1 million principal amount of Term Loan B
borrowings.
The prepayments were made from available cash generated by the
ongoing business operations of Mosaic and its subsidiaries.
Mosaic considers the prepayments to be a significant step in its
plan to reduce outstanding borrowings, strengthen its balance
sheet, and achieve investment grade credit ratings.
About The Mosaic Company
Headquartered in Plymouth, Minnesota, The Mosaic Company (NYSE:
MOS) - http://www.mosaicco.com/-- produces and markets
concentrated phosphate and potash crop nutrients. For the
global agriculture industry, Mosaic is a single source of
phosphates, potash, nitrogen fertilizers and feed ingredients.
MOSAIC CO: Fitch Affirms Ratings and Removes Negative Watch
-----------------------------------------------------------
Fitch has affirmed Mosaic Company and its subsidiaries' ratings
and removes them from rating watch negative. The outlook for
Mosaic and its issuing subsidiaries is now stable.
Fitch has affirmed and removed from Negative Watch these ratings:
The Mosaic Company
-- Issuer Default Rating at 'BB-';
-- Senior secured revolver rating at 'BB+';
-- Senior secured term loan rating at 'BB+';
-- Senior unsecured notes at 'BB'.
Mosaic Global Holdings
-- IDR at 'BB-';
-- Senior unsecured notes at 'BB';
-- Senior unsecured notes and debentures at 'BB-'.
Phosphate Acquisition Partnership LP
-- IDR 'BB-';
-- Senior secured note rating at 'BB-'.
Mosaic Colonsay ULC
-- IDR at 'BB-';
-- Senior secured term loan at 'BB+'.
In January 2007, the ratings of Mosaic were placed on rating watch
negative when the company reported a new brine inflow at its
Esterhazy, Saskatchewan potash mine which could have jeopardized
long-term earnings and cash flow. Brine was flowing into a mined-
out area at Esterhazy at a rate of 20,000 to 25,000 gallons per
minute. Although Mosaic has been managing brine inflow at
Esterhazy since 1985, the flooding that occurred in January was
more substantial than before.
The Negative Rating Watch was driven by the potential loss of
long-term earnings from Esterhazy if Mosaic was unable to mitigate
the brine inflow. Abandonment of Esterhazy would have had a
permanent long-term impact on Mosaic's future earnings and cash
flow. Earnings from Esterhazy potash are a significant portion of
potash segment earnings. Moreover, Mosaic's potash business has
been an important and steady source of income for the company as
it has struggled to improve its phosphates segment profitability
and overall company cash flow.
The rating affirmation and Stable Outlook is based on Fitch's
satisfaction that the mitigation efforts at the mine are now
complete and there is no longer a threat to future earnings and
cash flow. Since January, the inflow areas were pinpointed and
Mosaic injected calcium chloride into inflow areas to plug the
cracks thus stemming the flood. Brine inflow has declined from an
initial estimate of 20,000-25,000 gpm to less than 4,000 gpm. The
mine is currently capable of pumping 12,000 gpm far above mine
requirements. The mine, which recently completed a 1.1 metric
tonne expansion, is currently operating at near full capacity of
5.3 million mt per year.
Mosaic announced it would repay an additional $150 million in term
loan debt on June 29, 2007. The prepayments will consist of $56.4
million principal amount of Term Loan A-1 borrowings and $81.8
million principal amount of Term Loan B borrowings by Mosaic and
$6.5 million principal amount of Term Loan A borrowings by its
subsidiary, Mosaic Potash Colonsay ULC. On May 1, 2007 the
company also repaid $250.0 million principal amount of term loans
under the senior secured bank credit facility. The prepayments
consisted of $94.0 million principal amount of Term Loan A-1
borrowings and $145.2 million principal amount of Term Loan B
borrowings by Mosaic and $10.8 million principal amount of Term
Loan A borrowings by its subsidiary Mosaic Potash Colonsay ULC.
The Mosaic Company is one of the largest global suppliers of
phosphate and potash fertilizers. Mosaic earned approximately
$671.4 million in Operating EBITDA on $5.42 billion in revenue LTM
Feb. 28, 2007. The company had $2.57 billion in debt at that
time.
MRU STUDENT: Moody's Puts $13 Million Class C Notes at (P)Ba2
-------------------------------------------------------------
Moody's Investors Service assigned provisional ratings of (P) Aaa
to the Class A auction rate securities, (P)A2 to the Class B
auction rate securities and (P)Ba2 to the Class C floating rate
notes to be issued by MRU Student Loan Trust 2007-A. The
underlying collateral consists of a private student loans
originated by MRU Holding Inc. Moody's issues provisional ratings
in advance of the final sale of securities. Upon a conclusive
review of the final documentation, Moody's will assign the final
ratings to the securities. Final Ratings may differ from the
provisional ratings.
The complete rating actions are:
-- Class A-1 $82,750,000 (P)Aaa
-- Class A-2 $82,750,000 (P)Aaa
-- Class B $21,500,000 (P)A2
-- Class C $13,000,000 (P)Ba2
MTR GAMING: Moody's Lowers Senior Unsecured Note's Rating to B2
---------------------------------------------------------------
Moody's lowered MTR Gaming Group, Inc.'s senior unsecured note
rating to B2 (LGD-4, 60%) from B1 (LGD-3, 46%). This action
follows the amendment to the company's credit facility that
provides for an increase of the aggregate commitment to $155
million from $105 million. MTR's B1 corporate family, B1
probability of default, and B3 senior subordinated note ratings
were affirmed.
The one-notch downgrade of MTR's senior unsecured note rating was
based on the application of Moody's loss given default methodology
to the revised capital structure which incorporates the larger
credit facility commitment. Although the B3 senior subordinated
note rating did not change, the application of the LGD methodology
did result in a revision of the MTR's senior subordinated note LGD
assessment to (LGD-5, 88%) from (LGD-5, 85%). The rating outlook
is stable.
The $155 million credit facility along with cash on hand and cash
flow from operations will be used to fund capital spending
requirements including the $48 million remaining to be spent on
Presque Isle Downs, a $291 million Pennsylvania racino that
recently opened. The amendment also increases the maximum
permitted expansion capital expenditure for the Presque Isle Downs
facility to $296 million from $256 million, and increases the
maximum permitted investment in the company's MTR-Harness joint
venture to $15 million from $12.5 million.
The affirmation of MTR's ratings and stable outlook continues to
acknowledge the positive benefit to the company's long-term credit
profile associated with the recent opening of Presque Isle Downs
as well as its good operating history and liquidity profile. MTR
also benefits from operating in limited license jurisdictions with
stable regulatory environments. Key credit concerns include MTR's
limited revenue and cash flow diversification and high leverage
resulting primarily from additional debt used to finance Presque
Isle Downs.
Moody's most recent action on MTR occurred on Sept. 26, 2006 when
Probability of Default ratings and LGD assessments were assigned
to the company as part of the general roll-out of the LGD product.
MTR Gaming Group, Inc. (NASDAQNM: MNTG) owns and operates the
Mountaineer Race Track & Gaming Resort in Chester, West Virginia;
Scioto Downs in Columbus, Ohio; the Ramada Inn and Speedway Casino
in North Las Vegas, Nevada; Binion's Gambling Hall & Hotel in Las
Vegas, Nevada; Presque Isle Downs in Erie, Pennsylvania. The
company also owns a 50% interest in the North Metro Harness
Initiative, LLC, which has a license to construct and operate a
harness racetrack and card room outside Minneapolis, Minnesota and
a 90% interest in Jackson Trotting Association, LLC, which
operates Jackson Harness Raceway in Jackson, Michigan. For the
twelve month period ended March 31, 2007, MTR reported net
revenues of $387 million.
NATIONAL COAL: Poor Performance Cues Moody's to Review Ratings
--------------------------------------------------------------
Moody's placed National Coal Corporation's ratings under review
for possible downgrade. Ratings affected by the review are
National Coal's Caa2 corporate family rating, its Caa2 PDR and its
Caa2 senior unsecured rating. The review was prompted by National
Coal's continued poor operating performance and by the
announcement that it has entered into a stock purchase agreement
to acquire 100% of the stock of Mann Steel Products, Inc., an
Alabama based producer of steam and industrial coal, for $55
million.
Ratings placed under review:
-- Corporate family rating, Caa2
-- PDR: Caa2
-- $55 million 10.5% Gtd. Senior Secured Notes due 2010, Caa2,
LGD4, 56%
The review will focus on:
i) National Coal's prospects, if the acquisition fails to
close, for producing sufficient coal at a production cost
and sales price sufficient to generate enough cash flow to
meet the covenant requirements under its $10 million term
loan and to continue to service its other obligations,
ii) the ability of National Coal to meet its minimum EBITDA
covenants this year,
iii) the manner in which it intends to finance the proposed
acquisition of Mann Steel,
iv) the amount of debt taken on to finance the acquisition and
National Coal's ability to service new and existing debt
from the acquired and existing assets, and
v) the amount of cash used in the acquisition and National
Coal's remaining available liquidity including that
available from any new credit.
Moody's last rating action on National Coal was to assign initial
corporate family and senior unsecured ratings of Caa2 in December
2005.
National Coal, based in Knoxville, Tennessee is engaged in the
mining and marketing of thermal coal and had revenues in the 2006
of $88 million.
NATIONAL MENTOR: S&P Revises Outlook to Negative from Stable
------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
National Mentor Inc. to negative from stable. At the same time,
S&P assigned its 'CCC+' rating to NMH Holdings Inc.'s proposed
$150 million payment-in-kind toggle notes. S&P affirmed all other
ratings on the company, including the 'B' corporate credit rating.
"The revised outlook is the result of increased concern regarding
the more aggressive stance of the company's financial policy,"
explained Standard & Poor's credit analyst Alain Pelanne.
The PIK toggle notes are to be used to refinance a portion of the
company's existing preferred stock. The preferred stock resulted
from the buyout of National Mentor Holdings by private equity
sponsor Vestar Capital Partners in June 2006. The company, which
was highly leveraged after its buyout, has performed well during
the past year, improving credit metrics through solid operating
performance. However, the transaction being contemplated will
increase leverage to levels even higher than those at the time of
Vestar's buyout, at a time when the company is continuing to use
some cash to selectively build out and acquire human services
programs.
The ratings on National Mentor continue to reflect the company's
exposure to reimbursement risk, and its fairly thin free cash
flows as a result of its high leverage. These factors are
partially offset by the company's strong position in the
fragmented human services market, and its largely variable cost
structure.
NORTH AMERICAN: Court Okays Mellon Bank Settlement Agreement
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
approved the settlement agreement between North American
Refractories Company and its debtor-affiliates and Mellon Bank,
N.A., the collateral agent for the Debtors' prepetition senior
lenders.
As reported in the Troubled Company Reporter on May 28, 2007, the
Debtors' 14 senior lenders, on behalf of Qualitech Steel
Corporation, made payments to the Debtor for approximately
$584,126. Each of the secured lenders was party to a June 1999
Credit Agreement, pursuant to which the senior lenders made
secured loans to Qualitech.
Mellon Bank commenced an adversary proceeding against the Debtors
seeking to avoid and recover the $584,126 transfer. The Debtors
argued that the Qualitech secured lenders did not timely file a
proof of claim according to the bar date set by the Court.
Following a series of arms' length negotiations, the parties have
agreed to a compromise settlement wherein the Debtor has agreed
that Qualitech shall have an allowed general unsecured claim for
$70,000, and that the allowance of such claim shall constitute
full satisfaction of any claims that have or could have been
asserted on behalf of Qualitech against the Debtor.
About NARCO
Based in Pittsburgh, Pennsylvania, North American Refractories
Company was engaged in the manufacture and non-retail sale of
refractory bricks and related products.
The company and its affiliates sought chapter 11 protection on
January 4, 2002 (Bankr. W.D. Pa. Case No. 02-20198) after
suffering a slump in the domestic economy and encountering an
overwhelming number of claims from individuals asserting injuries
or illnesses caused by exposure to products containing asbestos
containing it manufactured.
James J. Restivo, Jr., Esq., David Ziegler, Esq., and Brian T.
Himmel, Esq., at Reed Smith LLP represents the Debtor. No
Official Committee of Unsecured Creditors has been appointed in
this case. When the Debtor filed for protection from its
creditors, it listed $27,559,000,000 in assets and $18,634,000,000
in debts.
Plan Update
On Jan. 27, 2006, the Debtors filed their Combined Disclosure
Statement accompanying the Amended Plan. On Jan. 30, 2006, the
Court entered an order approving the Combined Disclosure
Statement. The confirmation hearing on the Amended Plan commenced
on June 5, 2006, was continued to October 26-27, 2006, continued
again to Nov. 17, 2006, and continued again to March 16, 2007. At
the conclusion of the Confirmation Hearing on March 16, 2007, the
Court took the confirmation of the Amended Plan under advisement.
Consequently, the Debtors may require additional time in order to
finalize their reorganization.
Classes that are impaired have voted to accept the Amended Plan by
more than 50% in number and 2/3 in amount. With respect to the
NARCO Asbestos Trust, the Amended Plan has been accepted by 95.88%
of the voters holding 93.15% of the claims.
NEVADA POWER: S&P Rates Proposed $350 Million Bonds at BB+
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Nevada Power Co.'s proposed issuance of approximately $350 million
of general and refunding mortgage bonds and Sierra Pacific Power
Co. proposed $325 million issuance of G&R bonds, both due 2037.
The outlook is positive.
The majority of proceeds from the proposed issuance will be used
to refinance existing higher cost debt. This month, NPC launched
a tender offer for $227.5 million of its 9% G&R bonds series G,
due 2013, and SPCC has tendered $320 million of its 8% G&R bonds,
series A, due 2008.
The positive outlook reflects the significant strength of the
regulatory climate in Nevada, which, based on recent developments,
currently affords NPC and SPPC some of the most credit-supportive
protections of any western state.
This factor is balanced against a daunting capital expenditure
program that will not allow the company to improve its credit
metrics until the completion of the second phase of Ely Energy
Center in 2013. Capital expenses are estimated at $7.8 billion
($5.9 billion for NPC and $1.9 billion for SPPC) from 2007-2011.
Even with equity issuances, which will be required to maintain the
current capital structure, S&P expect financial metrics to erode
from their current levels during construction. For the 12 months
ended March 31, 2007, cash flow coverage of interest and debt
stood at 2.4x and 11%, respectively. S&P would note that these
results are preliminary, as they do not reflect updated power
purchase adjustments for the company for 2007 and beyond, which
are substantial. Debt to total capitalization stood at around 65%
as of the same date.
NMH HOLDINGS: Moody's Rates Corporate Family Rating at B3
----------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
and a Caa2 rating to the proposed $150 million of Holding Company
PIK Toggle Notes of NMH Holdings, Inc., a parent company of
National MENTOR Holdings, Inc. Moody's also assigned a
speculative grade liquidity rating of SGL-2 to NMH Holdings
reflecting the company's good cash flow coverage of adjusted debt
while having less cushion and flexibility to cover working
capital, capital expenditures and other spending requirements.
Moody's also affirmed the B1 rating on National Mentor's senior
secured credit facility and Caa1 rating on the subordinated notes.
Moody's is withdrawing the B2 Corporate Family Rating and SGL-1
ratings currently assigned to National MENTOR Holdings, Inc. The
rating outlook is stable.
The B3 Corporate Family Rating reflects the company's high
leverage and weak interest coverage following the issuance of
these new PIK notes, coupled with modest levels of expected
earnings and cash flow relative to total leverage. Moody's also
notes that other credit metrics will deteriorate significantly
including cash flow coverage of adjusted debt and EBIT coverage of
interest expense. Despite its position as the largest provider of
home and community-based services in 36 states with almost $900
million in revenues, the company's ability to expand margins are
constrained by the company's heavy reliance on funding from
governmental programs, increasing labor costs and continued
turnover of personnel.
Moody's notes that the ratings for the senior secured debt and
existing subordinated notes remain unchanged given the addition of
the new PIK toggle notes which are structurally and contractually
subordinated, while providing additional loss absorption. This
debt will remain at National Mentor Holdings, Inc.
These ratings are being assigned to NMH Holdings, Inc.:
-- Corporate Family Rating, rated B3
-- Probability of Default Rating, rated B3
-- $150 million PIK Toggle Notes, due 2014, rated Caa2, LGD-6,
92%
-- Speculative Grade Liquidity (SGL) Rating, rated SGL-2
Rating actions for National MENTOR Holdings, Inc. were taken as a
result of this transaction:
-- Senior Secured Revolver, due 2012, changed to B1, LGD-2 and
27% from B1, LGD-3 and 33%
-- Senior Secured Term Loan B, due 2013, changed to B1, LGD-2
and 27% from B1, LGD-3 and 33%
-- Senior Secured 7-year Synthetic Letter of Credit Facility,
changed to B1, LGD-2 and 27% from B1, LGD-3 and 33%
-- Senior Subordinated Notes, due 2014, changed to Caa1, LGD-5
and 75% from Caa1, LGD-5 and 88%
These ratings currently assigned to National MENTOR Holdings, Inc.
will be withdrawn with the completion of this financing:
-- Corporate Family Rating, rated B2
-- Probability of Default Rating, rated B2
-- Speculative Grade Liquidity (SGL) Rating, SGL-1
National Mentor Holdings, Inc. is a national provider of home and
community-based services to (i) individuals with mental
retardation and/or developmental disabilities; (ii) at-risk
children and youth with emotional, behavioral or medically complex
needs and their families; and (iii) persons with acquired brain
injury. The company reported revenues of $861 million for the
last twelve months ended March 31, 2007.
NORDYKE VENTURES: Case Summary & Eight Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Nordyke Ventures LLC
8558 West 21st Street North, Suite 200
Wichita, KS 67205
Bankruptcy Case No.: 07-11491
Chapter 11 Petition Date: June 26, 2007
Court: District of Kansas (Wichita)
Judge: Dale L. Somers
Debtor's Counsel: Mark J. Lazzo, Esq.
Mark J. Lazzo, P.A.
129 East Second Street
Wichita, KS 67202
Tel: (316) 263-6895
Fax: (316) 264-4704
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's List of its Eight Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Sunflower Bank $404,344
P.O. Box 800
Salina, KA 67402-0800
Bank of the West $60,000
2123 North Maize Road
Wichita, KS 67212-5207
Ivan Kelley $30,000
James Dobson
535 North Woodlawn
Wichita, KS 67208
Ford Motor Credit $13,415
Kansas Gas Service $4,500
Westar Energy $2,600
Aquila $650
City of Wichita Water & Sewer $450
NUANCE COMM: Moody's Rates Proposed $225MM Sr. Term Loan at B1
--------------------------------------------------------------
Moody's Investors Service assigned B1 ratings to Nuance's proposed
$225 million senior secured term loan. The new borrowings which
will be used to finance the cash portion of the company's
VoiceSignal Technologies, Inc. acquisition, increases total first
lien senior secured term debt to approximately $667 million.
Management estimates leverage to be 4x debt to pro forma EBITDA
for last twelve months as of March 31, 2007. As outlined in our
May 16, 2007 press release discussing the acquisition, the
company's B1 corporate family rating is not affected. Moody's
announcement serves only to finalize the ratings on the individual
debt instruments. The outlook remains positive.
Updated ratings are:
-- $75 million senior secured revolving credit facility due
2012, B1, LGD3 (46%)
-- $667 million senior secured term loans due 2013, B1, LGD3
(46%)
Additionally, Moody's notes that Nuance recently announced an
agreement to acquire Tegic Communications, Inc. for $265 million
in cash. Although we do not anticipate changes to the B1
corporate family rating, details of the capital structure or
integration plans have not been announced at this time. The
ratings or outlook could be impacted negatively if the leverage
pro forma for the acquisition exceeds 4.0x or the integration
plans are particularly challenging. Although Nuance has
successfully integrated acquisitions in the past, Moody's notes
the pace of recent acquisitions including Focus Infomatics,
BeVocal, VoiceSignal, and potentially Tegic Communications remains
aggressive.
Nuance Communications, Inc., formerly ScanSoft, Inc., is a leading
provider of speech and imaging solutions for business and
consumers.
ONEIDA LTD: S&P Assigns Corporate Credit Rating at B
----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Oneida, New York-based Oneida Ltd., North
America's largest marketer of stainless steel and silver plate
flatware for both the consumer and foodservice industries. At the
same time, Standard & Poor's assigned its 'B+' senior secured bank
loan and '2' recovery ratings to Oneida's planned $120 million
term loan due 2014. This loan is rated one notch higher than the
corporate credit rating, with a recovery rating indicating the
expectation for substantial (70%-90%) recovery in the event of a
payment default.
"The ratings reflect Oneida's high leverage, aggressive financial
policy, weak operating history, and vulnerability to change in
consumer preferences and decline in foodservice and/or leisure
industries," said Standard & Poor's credit analyst Bea Chiem.
Somewhat offsetting these factors are the company's leading brand
recognition and market positions in the flatware segment for the
foodservice and retail industries.
OPTI CANADA: Moody's Withdraws Ba3 Rating on $450 Mil. Term Loan
----------------------------------------------------------------
Moody's Investors Service, following yesterday's OPTI Canada Inc.
successful $750 million 7-year senior second secured note offering
yesterday, withdraws OPTI's Ba3 $450 million Term Loan B
rating. TLB will we repaid with the new note proceeds. Moody's
previously rated the new notes B1 and affirmed OPTI's Ba3
corporate family rating, Ba3 CDN$500 million first secured bank
revolver rating, and existing B1 $1 billion senior second secured
note ratings. The rating outlook is stable.
The note ratings are notched to B1 to reflect their contractual
subordination to the CDN$500 million bank revolver maturing
December 2011. The revolver ratings would be evaluated for upward
notching when OPTI's Phase I achieves sustained commercial
operation.
Note proceeds will fund a roughly $80 million interest reserve
account, retire OPTI's $450 million first secured Term Loan B, and
already announced Phase I cost overruns. OPTI management states
that further cost overruns would be equity funded.
Through wholly-owned OPTI Long Lake L.P., OPTI holds a 50%
undivided interest (with Nexen, Baa2 senior unsecured, holding the
other 50%) in a four phased greenfield integrated development of
three oil sands leases in Alberta, Canada. Each phase will
consist of steam assisted gravity drainage production of bitumen
and its subsequent upgrading into synthetic crude oil.
The rating outlook is stable subject to future project cost
overruns being equity funded, Phase I project completion, start-
up, and commercial operations performing reasonably to design
expectations, and project costs for Phase II, III, and IV being
funded satisfactorily with ample equity and Phase I cash flow. As
well, oil and natural gas market conditions will generally need to
remain historically strong to support OPTI's ratings while it is
highly leveraged.
The ratings reflect sound asset coverage, the late stage of Phase
I development, OPTI's stated commitment to fund any further cost
overruns with new equity, and its funding of visible Phase I costs
to completion with committed long term funding.
However, the ratings also reflect escalated costs since the
original Ba2 corporate family ratings were assigned, project cost,
completion and performance risks, and the specific need to see
that OPTI's OrCrude unit operates to design specifications. The
dual critical issues to the OrCrude unit is that such a
gasification and hydrogen generation facility have not yet been
operated at such a large commercial scale and that OPTI's critical
and very costly bitumen upgrader can not operate with out the
OrCrude unit.
OPTI and Nexen are deep in Phase I development. Phase I steam
injection commenced in second quarter 2007. The partners expect
an initial bitumen production response in late third or early
fourth quarter 2007. The partners plan to bring the upgrader to
production in third quarter 2007 with first sweet synthetic
syncrude expected in fourth quarter 2007. OPTI expects full
design Phase cash flow to be reached during late 2008 or early
2009.
The ratings are further supported by:
(i) almost CDN$1.4 billion of first-in cash common equity;
(ii) a very large world scale resource base engineered by a
major third-party engineering firm;
(iii) the deep pockets, managerial, operational, and technical
depth, services sector influence, and synthetic crude oil
marketing capacity of investment grade 50% partner Nexen
Inc.,
(iv) a narrowing of the reservoir risk band through evaluation
of drilling and subsurface information derived from 78
Phase I horizontal steam injection and production well
pairs, over 200 other delineation wells on OPTI's
substantial holdings of other oil sands lease acreage; and
(v) surface project technology and design that is deemed to
not encompass inordinate or insurmountable risk to
completion or ongoing performance of the project.
The ratings are also supported by:
(i) an eighteen month interest reserve account,
(ii) OPTI's call on CDN$202 million of contingent equity from
certain private investors;
(iii) a third party technical evaluation of OPTI's drilling
program, including well pair location, well string
architecture and drilling procedures, and indicating
reasonably low drilling risk across a large established
reserve base, and
(iv) SAGD technology is more than 7 years into commercial
status after 20 years of pilot project experience in the
region.
The ratings are further restrained by:
(i) substantial front-end leverage and risk of completing
Phases I and II on time and on budget;
(ii) very high front-end capital costs and complexity of
integrated oil sands/upgrader projects;
(iii) characteristic project start-up risks;
(iv) the challenge of keeping all key interrelated units online
once in commercial operations,
(v) considerable uncertainty about the pivotal ultimate
sustainable steam/oil ratio;
(vi) exposure to far higher SAGD production costs if the
upgrader's asphaltene gasification unit is down; and
(vii) the inability of the upgrader to run if the gasification
unit is down.
The future scale of bitumen production, and the operating and
capital costs of that production, face an inherent risk across the
areal extent of OPTI/Nexen's project acreage of inconsistent
reservoir homogeneity, quality, and reservoir thickness; sporadic
existence of permeability barriers that can impede steaming and
production; and the amount of steam needed per barrel of produced
bitumen. Also, the upgrader's sustainable synthetic crude yield
per bitumen barrel, unit production costs, and unscheduled
downtime pattern will not be clear until it has been operating for
several quarters.
Generally, OPTI's bitumen upgrading process includes atmospheric
and vacuum distillation, deasphalting, gasification of asphaltenes
for fuel gas and hydrogen, and hydrocracking into light sweet
synthetic crude oil. Each of the four project phases would
contain separate SAGD operations and bitumen upgraders. Each
phase is designed to process approximately 72,000 barrels/day of
bitumen (of which 50% is OPTI's share) which, after upgrading,
would yield approximately 57,700 barrels per day of sweet syncrude
oil and 800 barrels of butane per day, in each of which OPTI has a
50% share.
The partners have also begun spending for the nearly identical
Phase II. Moody's believes that, in light of the fact that Phases
II, III, and IV will be nearly identical to Phase I, and given
Phase I's current cost estimates, and given continuing sector cost
pressures, we believe Phases II, III, and IV will cost in the
range of C$6 billion to C$7 billion each (50% OPTI), possibly
considerably more. OPTI's 50% share of Phase I proven developed,
proven undeveloped, and probable bitumen reserves is approximately
455 million barrels (243 million barrels booked as proven).
Assuming Phases II, III, and IV are sanctioned, we expect OPTI's
50% share of capital spending to in the range of C$2 billion per
year in 2010 through 2013, barring massive cost inflation. In an
oil market characteristic with US$55 per barrel of West Texas
Intermediate oil prices, external funding requirements could
exceed C$6 billion by 2013 if OPTI sanctioned all four phases.
OPTI Canada Inc. is headquartered in Calgary, Alberta, Canada.
OPTI CANADA: Increased Debt Level Cues S&P to Lower Rating to BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Calgary, Alberta-based OPTI Canada Inc. to 'BB-'
from 'BB' because of increased debt levels and expected weak
coverage metrics. The outlook is stable.
At the same time, Standard & Poor's lowered its bank loan rating
on OPTI's CDN $500 million revolving credit facility to 'BB+' from
'BBB-', while maintaining a recovery rating of '1'. S&P also
affirmed the 'BB+' debt rating on OPTI's $1 billion secured notes,
and raised the recovery rating to '1' from '2'; and assigned a
'BB+' bank loan rating, with a recovery rating of '1', to OPTI's
new seven-year US$750 million secured notes. The '1' recovery
rating on OPTI's debt facilities reflects expectations for a very
high (90%-100%) recovery in a default scenario. The 'BB+' ratings
are two notches above the corporate credit rating, because the
collateral value supporting the loans has a high probability of
enabling lenders to recover all principal and accrued interest
under a default scenario and likely liquidation process.
"The downgrade reflects the significant increase in debt levels
expected on OPTI's balance sheet at the completion of Phase 1 when
compared with the original estimates when the company was first
rated," said Standard & Poor's credit analyst Jamie Koutsoukis.
As debt increases without any corresponding expected increases in
production levels to support the new amounts, S&P view the
company's pro forma financial risk profile as materially weaker
than previously expected. "Although the Long Lake project is
closer to completion than when the ratings were originally
assigned, the company remains exposed to meaningful execution risk
with respect to project operations and profitability,"
Ms Koutsoukis added.
The stable outlook reflects Standard & Poor's expectation that
OPTI will complete Phase 1 of its Long Lake project and will
generate sufficient positive free cash flow in 2009 to meet its
debt and maintenance capital expenditure commitments. The outlook
also incorporates our expectation that the company will manage the
risks associated with its multistage oil sands development project
to its existing rating level without any further material
deterioration to its financial risk profile. A positive rating
action is unlikely before the project reaches and sustains its
design capacity production, given the company's elevated debt
levels and continued exposure to capita cost increases.
Conversely, the current rating and outlook incorporate some
cushion for further project cost increases. Assuming any future
cost increases are accommodated by existing liquidity and
contingencies, a further negative rating action is unlikely.
PACIFIC LUMBER: Can Access Cash Collateral Until July 20
--------------------------------------------------------
The Hon. Richard S. Schmidt of the United States Bankruptcy Court
for the Southern District of Texas has authorized Pacific Lumber
Company and its debtor-affiliates to continue using cash
collateral through and including July 20, 2007.
As reported in the Troubled Company Reporter on May 3, 2007, the
Debtors are only permitted to use cash collateral for the
purposes enumerated in the budget. The Debtors are not permitted
to use cash collateral for payment of professional fees,
disbursements, costs, or expenses incurred in connection with
asserting any claims or causes of action against the Lenders.
A full-text copy of PALCO and Britt Lumber's four-week budget for
the period from June 23, 2007, through July 20, 2007 is available
for free at http://researcharchives.com/t/s?213b
The Court has scheduled a hearing for July 19, 2007, to consider
the Debtors' continued use of cash collateral.
In a related development, Debtors have entered into a $75,000,000
DIP Revolving Credit Agreement with Marathon Structured Finance
Fund, L.P., as administrative agent, and certain other lenders.
The Debtors are currently seeking Court approval for that DIP
transaction.
The Debtors assert that they urgently require the use of cash
collateral and the funds to be realized from the DIP Financing to
pay rent, taxes, utilities, salaries, wages, and employee
benefits; to purchase inventory and supplies; to make certain
capital expenditures; to pay professional fees and expenses; and
to continue the operation of their business without interruption.
So long as an Event of Default under the DIP Loan has not
occurred and is continuing, Marathon consents to the Debtors' use
of its cash collateral for purposes as set forth in a specified
budget.
About Pacific Lumber
Headquartered in Oakland, Calif., The Pacific Lumber Company --
http://www.palco.com/-- and its subsidiaries operate in several
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.
Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.
Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.
Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq.,
William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard
Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation
is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq.,
Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at
Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-
counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at
Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead
counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq.,
at Porter & Hedges LLP, is Scotia Pacific's co-counsel.
When Pacific Lumber filed for protection from its creditors, it
estimated assets and debts of more than $100 million. Scotia
Pacific listed total assets of $932,000,000 and total debts of
$765,978,335. The Debtors' exclusive period to file a chapter 11
plan expires on Sept. 18, 2007, as extended. The Debtors'
exclusive period to solicit acceptances of that plan expires on
Nov. 19, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue
No. 19, http://bankrupt.com/newsstand/or 215/945-7000).
PACIFIC LUMBER: Asks Court to Approve $75 Million DIP Financing
---------------------------------------------------------------
The Pacific Lumber Company, Scotia Development, LLC, Britt Lumber
Co., Inc., Salmon Creek LLC, and Scotia Inn Inc., seek the
authority of the United States Bankruptcy Court for the Southern
District of Texas to borrow up to $75,000,000 from a consortium
of lenders syndicated by Marathon Structured Finance Fund L.P. as
administrative agent.
Prior to filing for bankruptcy, Marathon, LaSalle Bank National
Association, and LaSalle Business Credit, LLC, as lenders,
provided a $60,000,000 revolving loan and an $85,000,000 term loan
to the Debtors.
As reported in the Troubled Company Reporter on Jan. 24, 2007, the
Court initially authorized Debtors to use the Lenders' cash
collateral, through Jan. 26, 2007, as outlined in a budget. The
most recent order authorized Debtors to continue using Lenders'
cash collateral through and including July 20, 2007.
However, as reflected by their latest cash flow projections, the
Debtors are projected to have a cash balance of $123,000 as of
July 20, 2007, according to Nathaniel Peter Holzer, Esq., at
Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus
Christi, Texas. The Debtors assert that they won't have adequate
funds to continue their ongoing business operations.
In light of these circumstances, the Debtors sought out potential
lenders, including the Prepetition Lenders, for DIP financing.
During the latter stages of negotiations, LaSalle assigned its
interest in the Prepetition Credit Agreement to Canpartners
Investments IV, LLC -- Canyon. Canyon subsequently approached
the Debtors with a potential financing.
The Debtors ultimately decided to proceed with pursuing a DIP
financing with Marathon, in view of the expense and risk of a
contentious DIP Financing with Canyon.
Pursuant to the DIP Loan Documents, Marathon commits to provide
the Debtors with a $75,000,000 revolving line of credit. The
Revolving Loan includes a sub-limit of $5,000,000 for letters of
credit, which could be issued by a separate Issuing Bank, with
the Lenders guaranteeing the related reimbursement obligations.
The Debtors intend to use the proceeds of the DIP Loan to:
-- repay in full all obligations under the Prepetition
Revolving Credit Agreement, including interest and fees;
-- cash collateralize all outstanding LOCs under the
Prepetition Revolving Credit Agreement in accordance
with its terms;
-- pay fees, costs and expenses relating to the DIP
Transactions;
-- finance their working capital needs and other general
corporate purposes, in accordance with Budgets to be
submitted weekly; or
-- fund collateralization LOCs or other credit support
provided by other financial institutions.
Covenants
Under the DIP Loan Documents, the Debtors are subject to detailed
covenants regarding capital expenditures, earnings, cash flow and
budget expenditures.
The DIP Lenders will not be required to make further Postpetition
Revolving Loans if the actual aggregate expenditures made for:
(i) "Restructuring" expenses in any week exceed the amount
specified in the applicable Weekly Budget by more than
10%; or
(ii) "Operating" expenses in any trailing four-week period
exceed the sum of amounts specified in the applicable
Weekly Budgets by more than 10%.
The Debtors covenant with the DIP Lenders not to permit Capital
Expenditures to exceed these amounts in a given period:
Period Amount
------ ------
Petition Date to June 30, 2007 $1,767,700
Petition Date to July 31, 2007 $2,565,200
Petition Date to August 31, 2007 $2,933,700
Petition Date to September 30, 2007 $3,351,700
Petition Date to October 31, 2007 $3,703,700
Petition Date to November 30, 2007 $3,885,200
Petition Date to December 31, 2007 $3,885,200
Petition Date to January 31, 2008 $4,105,200
Petition Date to February 29, 2008 $4,325,200
Petition Date to March 31, 2008 $4,545,200
Petition Date to April 30, 2008 $4,775,000
Petition Date to May 31, 2008 $5,575,000
Petition Date to June 30, 2008 $6,325,000
The Debtors covenant with the Lenders not to allow Minimum
Combined Monthly EBITDAR for any one-month period set forth to be
less than:
One Month Period Ending Amount
----------------------- ------
May 31, 2007 ($2,000,000)
June 30, 2007 ($1,750,000)
July 31, 2007 ($1,150,000)
August 31, 2007 ($1,000,000)
September 30, 2007 ($1,000,000)
October 31, 2007 ($900,000)
November 30, 2007 ($1,000,000)
December 31, 2007 ($1,300,000)
January 31, 2008 ($750,000)
February 29, 2008 ($850,000)
March 31, 2008 ($200,000)
April 30, 2008 $600,000
May 31, 2008 $1,000,000
June 30, 2008 $1,400,000
The Debtors also covenant with the Lenders not to allow their
Minimum Combined Rolling Three-Month EBITDAR for any three-month
period set forth to be less than:
Thee Month Period Ending Amount
------------------------ ------
May 31, 2007 ($2,000,000)
June 30, 2007 ($4,100,000)
July 31, 2007 ($3,625,000)
August 31, 2007 ($1,900,000)
September 30, 2007 ($1,225,000)
October 31, 2007 ($1,100,000)
November 30, 2007 ($1,250,000)
December 31, 2007 ($1,600,000)
January 31, 2008 ($1,400,000)
February 29, 2008 ($1,575,000)
March 31, 2008 ($800,000)
April 30, 2008 $600,000
May 31, 2008 $2,150,000
June 30, 2008 $3,450,000
Interest Rates and Fees
The interest rate for advances under the DIP Loan Documents is:
(i) LIBOR plus 2.75% with respect to the Closing Date Loan;
subject to certain adjustments; and
(ii) LIBOR plus 4.50% with respect to the other borrowings
under the facility, subject to certain adjustments.
Other fees are also provided for under the DIP Loan:
* A Commitment Fee payable monthly will be equal to 0.5% of
the average daily unused amount of the Postpetition
Revolving Credit Commitment during the preceding month,
while the DIP facility is outstanding.
* An Administrative Fee, which is equal to the greater of (i)
$1,050,000 and (ii) 3.00% of the difference of (A)
$75,000,000 minus (B) the amount of the Closing Date Loan.
* A Postpetition L/C Guaranty Fee, which will be equal to 3.0%
per annum of undrawn amounts of outstanding letters of
credit, payable monthly.
* Customary fees and expenses in connection with the issuance,
negotiation, processing and administration of LOCs payable
to Issuing Bank, including fronting fee.
Collateral
To secure their Obligations under the DIP facility, the Debtors
will grant Marathon, for the DIP Lenders' benefit, a first
priority lien in substantially all of the Debtors' assets --
excluding PALCO's Equity Interest in Scotia Pacific Company LLC
and any actions or claims under Chapter 5 of the Bankruptcy Code
of the Debtors -- subject and subordinate only to:
(i) valid, enforceable and perfected pre-existing liens of
other creditors;
(ii) U.S. Trustee fees;
(iii) so long as no Event of Default will have occurred and be
continuing, fees and expenses provided for in the Budget
and allowed to professionals employed by the Debtors and
the Official Committee of Unsecured Creditors;
(iv) upon and after the occurrence of an Event of Default, fees
and expenses of professionals employed by the Debtors and
the Creditors Committee of up to $2,250,000;
(v) certain specified liens arising postpetition; and
(vi) valid and binding statutory liens.
The Debtors' DIP Loan Obligations are further guaranteed by a
first priority security interest in the equity securities of
PALCO owned by its parent, MAXXAM Group, Inc.
All DIP Obligations will constitute allowed superpriority
administrative expenses in the Debtors' Chapter 11 cases.
DIP Lenders' Expenses
The Debtors will be liable for all reasonable fees and expenses
incurred by the DIP Lenders, in connection with the
preparation, administration and syndication of the DIP Loan
Documents, including the reasonable fees and expenses of their
counsel.
Indemnity
The Debtors agree to indemnify the DIP Lenders against
any and all losses, claims, damages, liabilities and related
costs and expenses, incurred by or asserted against any
Indemnitee connected with the DIP Loan Documents and related
matters.
Maturity Date
The DIP Lenders' Commitments under the DIP Loan Documents will
terminate at the earliest of:
(i) the date of closing of a sale of substantially all of
the Debtors' assets;
(ii) the effective date of any plan of reorganization in the
Debtors' Chapter 11 cases;
(iii) the date of occurrence of a Event of Default;
(iv) July 22, 2007, if the Final Order has not been entered; or
(v) the date which is 12 months after the Closing Date.
A full-text copy of the Marathon DIP Loan is available for free
at http://researcharchives.com/t/s?2138
A full-text copy of the Debtors' Guarantee and Collateral
Agreement with Marathon is available for free at:
http://researcharchives.com/t/s?2139
The Debtors ask the Hon. Hon. Richard S. Schmidt to set a hearing
on July 19, 2007, to consider their request.
About Pacific Lumber
Headquartered in Oakland, Calif., The Pacific Lumber Company --
http://www.palco.com/-- and its subsidiaries operate in several
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.
Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.
Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.
Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq.,
William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard
Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation
is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq.,
Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at
Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-
counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at
Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead
counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq.,
at Porter & Hedges LLP, is Scotia Pacific's co-counsel.
When Pacific Lumber filed for protection from its creditors, it
estimated assets and debts of more than $100 million. Scotia
Pacific listed total assets of $932,000,000 and total debts of
$765,978,335. The Debtors' exclusive period to file a chapter 11
plan expires on Sept. 18, 2007, as extended. The Debtors'
exclusive period to solicit acceptances of that plan expires on
Nov. 19, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue
No. 19, http://bankrupt.com/newsstand/or 215/945-7000).
PETROHAWK: Moody's Places B2 Corporate Family Rating under Review
-----------------------------------------------------------------
Moody's Investors Service places Petrohawk's B2 corporate family
rating, B3 (LGD 5-71%) senior unsecured note rating, and B2
probability of default rating under review direction uncertain.
The review follows HK's recent announcement that it intends to
form a master limited partnership, HK Energy Partners LP, to
acquire certain of HK's Permian Basin and Arkoma Basin properties.
HK also announced that it had acquired significant additional
acreage in the Fayetteville Shale and other Mid-Continent Areas,
and outlined its intention to divest its Gulf Coast properties,
accounting for almost 20% of its total proven reserves. HK is
expected to begin the Gulf Coast divestiture process in July and
develop the MLP in the third quarter with a potential independent
public offering in the fourth quarter of 2007. HK has indicated
that the MLP could raise $150-$225 million of proceeds and that
the parent would continue to maintain a majority stake.
The review reflects the uncertainty surrounding the ultimate size,
scale, and scope of both the MLP and the parent pro-forma for all
the transactions. The final capital structures and the amount of
proven reserves to be conveyed to the MLP have not yet been
publicly articulated, and the structure under which the MLP will
be established, has not been finalized. In addition, the amount,
timing, and use of proceeds from the IPO of the MLP and the sale
of Gulf Coast properties remain uncertain. In resolving the
review, Moody's will meet with management to understand HK's
future capital expenditure plans, ultimate degree of debt
reduction and target leverage relative to its pro-forma reserves
and production, diversification, and property mix, as well as the
anticipated leverage at the MLP.
The Gulf Coast properties have been one of HK's core areas and
Moody's estimates that they accounted for almost 24% of year-end
2006 proven developed reserves and more than 30% of current
average daily production. HK has indicated that it may redeploy
the proceeds from the divestiture to grow its position in new core
areas and/or reduce debt. It has also indicated that it would
continue to seek opportunities for further growth through
transactions. However, the resulting HK entity will be smaller
and it would be important, from a ratings perspective, for the
company to reduce and maintain a leverage profile accommodative of
the new size and likely higher risk profile of the pro forma
property base. Moody's notes that the resulting parent company
could continue to maintain over $1 billion of long-term senior
notes despite having a smaller reserve and productive base to
support them.
Given the potential for a significant infusion of cash from the
Gulf Coast divestiture and the IPO of HK Energy Partners, future
ratings action would also have to factor in the use of proceeds
within the context and profile of the ratings. If HK can develop
a consolidated structure that supports its planned growth while
maintaining a balanced credit profile, there could be the
potential for positive ratings momentum.
Petrohawk is headquartered in Houston, Texas.
PJM FAIRVIEW: Files for Chapter 11 Protection in Oregon
-------------------------------------------------------
PJM Fairview, LLC has filed for protection under Chapter 11 of the
Bankruptcy Code with the U.S. Bankruptcy Court for the District of
Oregon on June 26, 2007.
The filing comes at the heels of a foreclosure sale, the Statesman
Journal reports. The foreclosure, according to the report, was
initiated by OFO Partners LLC, who is owed more than
$13.5 million. OFO Partners says that it plans to ask for relief
from the automatic stay in order for the foreclosure to continue.
About PJM Fairview
Based in Lake Oswego, Oregon, PJM Fairview, LLC develops the
Fairview Training Center in Salem, Oregon. The owner, Phil
Morford, is currently facing foreclosure actions from its
financers after it defaulted on loans.
PJM FAIRVIEW: Case Summary & Nine Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: PJM Fairview, LLC
18735 Bryant Road
Lake Oswego, OR 97034
Tel: (503) 638-0374
Bankruptcy Case No.: 07-32513
Type of Business: The Debtor is a developer of a real estate
project at Fairview, in Salem, Oregon. Owner
Phil Morford is currently facing foreclosure
actions from its financers after it defaulted on
loans.
Chapter 11 Petition Date: June 26, 2007
Court: District of Oregon
Judge: Randall L. Dunn
Debtor's Counsel: Bradley O. Baker, Esq.
15545 Village Park Court
Lake Oswego, Oregon 97034
Tel: (503) 697-0557
Fax: (503) 675-5154
Total Assets: $52,000,000
Total Debts: $32,844,277
Debtor's List of its Nine Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Depaul Industries Security Services $35,550
4950 Northeast Martin Luther
King Jr. Boulevard
Portland, OR 97211-3351
PG&E Electricity Service $7,000
P.O. Box 4438
Portland, OR 97208
Urbsworks Design Services $2,974
3845 Southwest Condor Avenue
Portland, OR 97239
Pacific Habitat Services, Inc. Design Services $2,600
Griggs Saalfield Legal Services $2,319
Frontier Land Consultants LLC Design Services $2,100
Kittleson and Associates Design Services $931
Geo Design Design Services $788
Stettler Supplies Supplies $456
PJM FAIRVIEW: Section 341(a) Meeting Scheduled for July 30
----------------------------------------------------------
The U.S. Trustee for Region 18 will convene a meeting of PJM
Fairview, LLC's creditors at 3:00 p.m., July 30, 2007, at Room
223, UST1, the U.S. Trustee's Office, in Portland.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
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.
About PJM Fairview
Based in Lake Oswego, Oregon, PJM Fairview, LLC develops the
Fairview Training Center in Salem, Oregon. The owner, Phil
Morford, is currently facing foreclosure actions from its
financers after it defaulted on loans.
PQ CORPORATION: Commences Cash Tender Offer for $275 Million Notes
------------------------------------------------------------------
PQ Corporation commenced a cash tender offer and related consent
solicitation for any and all of its $275 million in aggregate
principal amount of its 7-1/2% senior subordinated notes due 2013.
The company is making the offer in order to satisfy the
obligations of Niagara Holdings Inc., the company's direct parent,
under the agreement and plan of merger, dated as of May 31, 2007.
Parties to the merger plan and agreement are Niagara, CPQ Holdings
LLC, CPQ Acquisition Corporation and J.P. Morgan Partners (BHCA)
L.P. The company acts as seller representative, providing for the
merger of CPQ Acquisition, also known as Merger Sub, into Niagara.
The offer is being made pursuant to an offer to purchase and
consent solicitation statement dated June 26, 2007, which more
fully sets the terms and conditions of the offer.
The consent solicitation will expire at 5 p.m., New York City
time, on July 10, 2007, unless extended or terminated, and the
tender offer will expire at Midnight, New York City time, on
July 24, 2007, unless extended or terminated.
As described in the offer to purchase, the total consideration for
each $1,000 principal amount of notes validly tendered and
purchased in the offer will be a price determined by reference to
the bid-side yield to maturity of the 3% U.S. treasury note due
Feb. 15, 2009, as of 2 p.m., New York City time, on July 10, 2007,
unless extended, plus 50 basis points.
The total consideration includes a consent payment of $30 per
$1,000 principal amount of notes that will be payable to holders
who validly tender their notes and deliver consents on or prior to
the consent payment deadline and the notes are accepted for
purchase.
Holders who validly tender notes after the consent payment
deadline but on or prior to the expiration time will be entitled
to receive the tender offer consideration, which is equal to the
total consideration less the consent payment.
In either case, tendering holders will receive accrued and unpaid
interest from the most recent payment of semi-annual interest
preceding the applicable payment date up to, but not including,
the applicable payment date.
The payment date will be the early payment date or the final
payment date. The early payment date is expected to follow
promptly the consummation of the merger and the final payment date
is expected to follow promptly the expiration time.
In connection with the offer, the company is soliciting the
consents of holders of the notes to certain proposed amendments to
the indenture governing the notes. The primary purpose of the
solicitation and proposed amendments is to eliminate substantially
all of the restrictive covenants and certain events of default
from the indenture.
Adoption of the proposed amendments requires the consent of the
holders of a majority of the aggregate principal amount of the
notes outstanding. Holders who tender their notes are required to
consent to the proposed amendments and holders may not tender
their notes without also delivering consents or deliver consents
without also tendering their notes.
The offer is conditioned upon the satisfaction of:
(i) the consummation of the merger;
(ii) the receipt of the requisite consents and the execution
of the supplemental indenture containing the proposed
amendments described in the offer to purchase; and
(iii) certain other customary conditions described in the
offer to purchase.
Tendered notes may be withdrawn and consents may be revoked at any
time prior to the consent payment deadline, but not thereafter.
Requests for documents may be directed to Global Bondholder
Services Corporation, the information agent, at (212) 430-3774 or
(866) 470-3800.
UBS Securities LLC will act as dealer manager for the offer.
Questions regarding the offer may be directed to UBS Securities
LLC at (888) 722-9555 ext. 4210.
This press release does not constitute a notice of redemption
under the optional redemption provision of the indenture governing
the notes. Also, this news release is neither an offer to
purchase nor a solicitation of an offer to sell the notes. The
offer is being made only by reference to the offer to purchase and
related Letter of transmittal and consent dated June 26, 2007.
About PQ Corporation
PQ Corporation produces specialty inorganic chemicals, catalysts
and engineered glass materials. The company conducts operations
through three principal businesses: the Performance Chemicals
division, which develops, manufactures and distributes sodium
silicate and related high performance silicate-based specialty
chemicals, the Catalysts division, which manufactures high
performance catalytic zeolites and zeolite-based catalysts and
polyolefin catalysts, and the Potters division, which manufactures
highly engineered solid and hollow glass spheres used in highway
safety and other specialty applications. The company's products
are used in a variety of predominantly niche applications in a
diverse range of industrial, consumer and municipal end-markets.
The company operates 60 manufacturing sites in 19 countries on
five continents and has one of the most comprehensive global
manufacturing and distribution networks serving customers in the
company's end-markets.
* * *
As reported in the Troubled Company Reporter on June 6, 2007,
Standard & Poor's Ratings Services placed its ratings on
PQ Corporation on CreditWatch with negative implications. The
corporate credit rating on the company is 'B+'.
PRUDENTIAL MORTGAGE: Closes $20 Mil. Loan for Champaign Facility
----------------------------------------------------------------
Prudential Mortgage Capital Company closed a $20 million
refinancing loan on behalf of its general account, for Technology
Plaza, a mixed-use facility in Champaign, Illinois.
The 10-year loan amortizes over a 25-year period. James Neidinger
of Prudential's Chicago office originated the loan while Christine
Zarndt of Draper and Kramer in Chicago served as the intermediary.
Built in 2001, Technology Plaza is an eight-story, mixed-use
building located adjacent to the main campus of the University of
Illinois at Champaign-Urbana. The property comprises of 136,077
square feet that includes 19,517 square feet of multi-tenant
retail space, 30,160 square feet of office space and 86,400 square
feet of residential property. The residential property includes
72 four-bedroom units that are primarily leased by students from
the University of Illinois.
About Prudential Mortgage
Prudential Mortgage Capital -- http://www.prumortgagecapital.com/
-- is the commercial mortgage lending business of Prudential
Financial Inc. It is a national full-service, commercial and
multifamily mortgage finance business, originates loans for Fannie
Mae DUS(TM), FHA and Freddie Mac Targeted Affordable programs; the
capital markets; Prudential's general account; and other
institutional investors. The company, with $53 billion in assets
under management and administration as of March 31, 2007, offers
fixed- and floating-rate loans; mezzanine, structured and bridge
financing; forward commitments; affordable housing and healthcare
finance.
* * *
As reported in the Troubled Company Reporter on March 22, 2007,
Fitch upgraded Prudential Mortgage Capital Funding's ROCK
commercial mortgage pass-through certificates, series 2001-C1,
$4.5 million class L to 'BB+' from 'BB'.
PRUDENTIAL STRUCTURED: Fitch Holds C Ratings on Four Note Classes
-----------------------------------------------------------------
Fitch affirms three classes of notes issued by Prudential
Structured Finance CBO I, as:
-- $1,905,358 class A-1 notes 'AAA';
-- $4,763,395 class A-1L notes 'AAA';
-- $20,000,000 class A-2L notes 'BB+'.
In addition, Fitch maintains these ratings:
-- $4,200,000 class B-1 notes remain 'C/DR3';
-- $8,000,000 class B-1L notes remain 'C/DR3';
-- $2,500,000 class B-2 notes remain 'C/DR5';
-- $5,000,000 class B-2L notes remain 'C/DR5'.
Prudential SF CBO I is a collateralized debt obligation that
closed Oct. 26, 2000 and is managed by The Prudential Investment
Corporation. Prudential SF CBO I ended its reinvestment period in
November 2005 and currently has a portfolio composed of asset-
backed securities, residential mortgage-backed securities and
CDOs. Included in this review, Fitch conducted cash flow modeling
utilizing various default timing and interest rate scenarios to
measure the breakeven default rates going forward relative to the
minimum cumulative default rates required for the rated
liabilities.
Since Fitch's last rating action in June 2006, the collateral has
improved and the class A-1 and class A-1L notes have continued to
delever, resulting in higher par coverage ratios for these notes
and the class A-2L notes. Four assets in the portfolio were
upgraded since the last review, constituting almost 27% of the
portfolio, compared to just one non-distressed asset that was
downgraded, which represented just 0.4% of the portfolio.
Although the Fitch weighted average rating factor has increased to
47.2 ('BB-/B+') as of the June 4, 2007 trustee report from 33.5
('BBB-/BB+') as of the May 2, 2006 report, this deterioration has
mainly been reflective of downgrades in the distressed portion of
the portfolio combined with the amortization of higher-rated
assets.
The senior class A overcollateralization ratio for the A-1 and A-
1L notes was reported at 581.7% versus a trigger of 118% as of the
June 2007 trustee report. In addition, the Class A OC ratio for
the A-1, A-1L, and A-2L notes was reported at 144.1% versus a
trigger of 105% as of the same report, which represents an
improvement over the result of 132.3% for this test as of the May
2006 trustee report. However, the transaction's principal
waterfall has begun to use principal proceeds to make up for
interest payments not paid to the B-1, B-1L, B-2, and B-2L notes
in the interest waterfall. To date, almost $530,000 in principal
proceeds has been used for this purpose.
The continued use of principal proceeds to pay subordinate
interest will result in less coverage available for the A-2L
notes. As a result, the class A-2L notes are highly sensitive to
the prepayment speed of the underlying collateral, whereby the
longer the class A-2L notes remain outstanding, the more principal
proceeds can be used to pay class B interest before flowing
through to pay the A-2L principal. Conversely, faster prepayment
speeds will benefit the class A-2L notes. Due to the uncertainty
of the prepayment speeds of the collateral and the mixed effects
of different prepayment speeds, Fitch believes that the current
rating on the A-2L notes still reflects the risk posed to holders
of these notes.
The ratings of the class A notes address the likelihood that
investors will receive full and timely payments of interest, as
per the governing documents, as well as the stated balance of
principal by the legal final maturity date. The ratings of the
class B notes address the likelihood that investors will receive
ultimate and compensating interest payments, as per the governing
documents, as well as the stated balance of principal by the legal
final maturity date.
R.J. GATORS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: R.J. Gators, Inc.
609 North Hepburn Avenue, Suite 103
Jupiter, Fl 33458
Bankruptcy Case No.: 07-14954
Type of business: The Debtors own and operates casual dining
restaurants. See http://www.rjgators.com/
Debtor affiliate filing separate Chapter 11 petitions:
Entity Case No.
------ --------
R.J. Gators of Palm Beach Gardens, 07-14956
II, Inc.
R.J. Gators of Vero Beach, Inc. 07-14957
R.J. Gators Franchise Systems, Inc. 07-14959
Chapter 11 Petition Date: June 26, 2007
Court: Southern District of Florida (West Palm Beach)
Judge: Paul G Hyman, Jr.
Debtors' Counsel: Bradley S. Shraiberg, Esq.
Kluger, Peretz, Kaplan & Berlin, P.L.
2385 Northwest Executive Center, Drive 300
Boca Raton, FL 33431
Tel: (561) 961-1830
Estimated Assets Estimated Debts
---------------- ---------------
R.J. Gators, Inc. $1 million to $1 million to
$100 million $100 million
R.J. Gators of Palm Beach $1 million to $1 million to
Gardens, II, Inc. $100 million $100 million
R.J. Gators of Vero Beach, $1 million to $1 million to
Inc. $100 million $100 million
R.J. Gators Franchise $1 million to $1 million to
Systems, Inc. $100 million $100 million
Debtors' Consolidated 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
SYSCO trade debt $1,300,000
1999 Martin Luther King
Boulevard
Riviera Beach, FL 33404
Wayne Gould trade debt $275,000
527 Atanda Avenue
Charlotte, NC 28206
S.V.I. Systems, Inc. trade debt $164,786
290 Florida Street
Stuart, FL 34994
Florida Department of sales tax due $154,313
Revenue
Jack Prickett rent due for $107,000
Stuart property
Orix settlement $87,000
Herb Kahlert Boynton Beach rent $85,173
due
Indian River Mall RENT trade debt $70,236
Patrick Keonig rent due for Palm $68,068
Beach Gardens
property
R.S.M. McGladrey trade debt $48,565
Hixson, Marin, DeSanctis trade debt $29,200
& Co., P.A.
Jon Parr Vero Beach rent $24,400
due
Okeechobee County Tax trade debt $22,344
Collector
F.C.C.I. settlement $19,111
Fradley Law Firm, P.A. trade debt $18,533
Piper Rudnick trade debt $15,299
Hodges, Avrutis, trade debt $12,778
Pretschner & Foeller, P.A.
Lyon Financial Services, settlement (Lyon $12,735
Inc. dba U.S. Bancorp
versus R.J. Gators)
Wynne Building Corporation trade debt $10,469
Toshiba Business Solutions trade debt $9,819
RESOURCE REAL: Fitch Rates $28.75 Million Fixed-Rate Notes at B
---------------------------------------------------------------
Fitch assigns the following ratings to Resource Real Estate
Funding CDO 2007-1, Ltd. and Resource Real Estate Funding CDO
2007-1, LLC:
-- $180,000,000 class A-1 floating-rate secured notes due 2046
'AAA';
-- $50,000,000 class A-1R revolving floating-rate secured
notes due 2046 'AAA';
-- $57,500,000 class A-2 floating-rate secured notes due 2046
'AAA';
-- $22,500,000 class B floating-rate secured notes due 2046
'AA+';
-- $7,000,000 class C fixed-rate secured notes due 2046 'AA';
-- $26,750,000 class D floating-rate secured notes due 2046
'AA-';
-- $11,875,000 class E floating-rate secured deferrable
interest notes due 2046 'A+';
-- $11,875,000 class F floating-rate secured deferrable
interest notes due 2046 'A';
-- $11,250,000 class G floating rate secured deferrable
interest notes due 2046 'A-';
-- $11,250,000 class H floating-rate secured deferrable
interest notes due 2046 'BBB+';
-- $11,250,000 class J floating rate secured deferrable
interest notes due 2046 'BBB';
-- $10,000,000 class K floating-rate secured deferrable
interest notes due 2046 'BBB-';
-- $18,750,000 class L fixed-rate secured deferrable interest
notes due 2046 'BB';
-- $28,750,000 class M fixed-rate secured deferrable interest
notes due 2046 'B'.
RITCHIE (IRELAND): Taps LeBoeuf Lamb as General Bankruptcy Counsel
------------------------------------------------------------------
Ritchie Risk-Linked Strategies Trading (Ireland) Ltd. and Ritchie
Risk-Linked Strategies Trading (Ireland) II Ltd. jointly ask the
U.S. Bankruptcy Court for the Southern District of New York for
permission to retain LeBoeuf, Lamb, Greene & MacRae LLP as their
general counsel, nunc pro tunc to the commencement of their
bankruptcy cases.
LeBoeuf Lamb will:
(a) advise the Debtors with respect to their powers and
duties as debtors-in-possession in the continued
operation of their businesses;
(b) advise the Debtors with respect to all general
bankruptcy matters;
(c) prepare on behalf of the Debtors all necessary
applications, answers, orders, reports, and papers in
connection with the administration of their estates;
(d) represent the Debtors at all critical hearings on matters
relating to their affairs and interests as debtors-in-
possession before this Court, any federal or state courts
or administrative panels, any appellate courts, the
United States Supreme Court, and protecting the interests
of the Debtors;
(e) prosecute and defending litigated matters that may arise
during these cases, including such matters as may be
necessary for the protection of the Debtors' rights, the
preservation of estate assets, or the Debtors' successful
reorganization;
(f) prepare and file the disclosure statement and
negotiate, present and implement a plan of
reorganization;
(g) negotiate appropriate transactions and preparing any
necessary related documentation;
(h) advise, assist and negotiate the sale of all or part of
the Debtors' assets pursuant to Section 363 of the
Bankruptcy Code or a chapter 11 plan of reorganization;
(i) represent the Debtors on matters relating to the
assumption or rejection of executory contracts and
unexpired leases;
(j) advise the Debtors with respect to corporate,
securities, real estate, litigation, labor, finance,
insurance, regulatory, tax, healthcare and other legal
matters which may arise during the pendency of these
cases; and
(k) perform all other legal services that are necessary for
the efficient and economic administration of these cases.
The Debtors will pay the LLGM based on these hourly rates:
Professional Designation Hourly Rate
------------ ----------- -----------
Lewis Rosenbloom, Esq. Partner $750
Peter Ivanick, Esq. Partner $750
David Cleary, Esq. Partner $650
Maria Dantas, Esq. Partner $650
Dean Gramlich, Esq. Counsel $550
Mohsin Khambati, Esq. Counsel $550
Allison Weiss, Esq. Counsel $550
Thomas Augspurger, Esq. Associate $495
Sarah Trum, Esq. Associate $445
June Kim, Esq. Associate $395
Sandy Holstrom Paralegal $260
Amelie de Richemont Paralegal $170
About May 21, 2007, LLGM received an advance payment retainer
totaling $450,000. On June 20, 2007, LLGM submitted an invoice
and was paid for professional fees and expenses incurred for
periods through June 20, 2007, in the sum of $91,196. After
deduction of the $91,196 from the $450,000 advance payment, there
is the sum of $358,804 remaining. The Debtors and LLGM have
agreed that the $358,804 retainer will be held and applied against
LLGM's final post-petition billings and will not be placed in a
separate account.
The Debtors and LLGM agree that all services provided by LLGM will
be allocated by LLGM and paid by the Debtors in these manner:
Ritchie I will be responsible for 84.6% and Ritchie II for 15.4%
of the joint invoice.
To the best of the Debtors' knowledge, LLGM neither represents nor
holds any interest adverse to the interests of the estates or any
class of creditors or equity security holders.
The firm can be reached at:
Allison H. Weiss, Esq.
Peter A. Ivanick, Esq.
LeBoeuf, Lamb, Greene & MacRae LLP
125 West 55th Street
New York, NY 10019
Telephone: (212) 424-8000
Facsimile: (212) 424-8500
http://www.llgm.com/
Based in Dublin, Ireland, Ritchie Risk-Linked Strategies Trading
(Ireland) Ltd. and Ritchie Risk-Linked Strategies Trading
(Ireland) II Ltd. -- http://www.ritchiecapital.com/-- are Dublin-
based funds of hedge fund group Ritchie Capital Management. The
Debtors were formed as special purpose vehicles to invest in life
insurance policies in the life settlement market. Debtors filed
for Chapter 11 protection on June 20, 2007 (Bankr. S.D.N.Y. Case
Nos. 07-11906 and 07-11907). When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of more than $100 million. The Debtors' exclusive period to
file a Chapter 11 plan expires on Oct. 18, 2007.
RITCHIE (IRELAND): Wants to Hire Development Specialists as CRO
---------------------------------------------------------------
Ritchie Risk-Linked Strategies Trading (Ireland) Ltd. and Ritchie
Risk-Linked Strategies Trading (Ireland) II Ltd. jointly ask the
U.S. Bankruptcy Court for the Southern District of New York for
authority to employ Fred C. Caruso at Development Specialists Inc.
as their chief restructuring officer.
DSI will provide the services of Mr. Caruso as chief restructuring
officer that the Debtors deem appropriate and feasible in order to
advise the Debtors in the course of the cases. Specifically, the
Mr. Caruso and DSI will:
a. assist the Debtors in analyzing, negotiating and/or
executing selected business transactions, including such
matters as the restructuring or sale of assets of the
Debtors and other business transactions determined to be
in the interests of the Debtors.
b. review the financial records and statements of the
Debtors, their assets and the prospects of the Debtors for
continued operations, restructuring or sale of assets.
c. advise and assist the Debtors in the development of, and
participate in, communications with the Debtors' existing
and potential investors, their professionals and advisors,
creditors and other stakeholders or parties of interest
to the Debtors' operations or restructuring.
d. represent the Debtors in the role of their chief
restructuring Officer in meetings, court proceedings or
as otherwise required by the Debtors in the course of
their operations, restructuring or sale of assets,
including making recommendations regarding the valuation,
marketing and sale or other disposition of the Debtors'
assets.
The Debtors relate to the Court that the services of Mr. Caruso
and DSI are necessary for the development of a timely plan of
reorganization.
The Debtors will pay Mr. Caruso based on an hourly rate of $525.
Additional staff from DSI will be paid between $325 to $410 per
hour.
The Debtors and DSI agree that all services provided by Mr.
Caruso will be allocated by DSI and paid by the Debtors in these
manner: Ritchie I will be responsible for 85.4% and Ritchie II
for 14.6% of the joint invoice.
To the best of the Debtors' knowledge, neither DSI and all of its
employees holds any interest materially adverse to the estate.
The Debtors assure the Court that the employment of Mr. Caruso
and DSI is in the best interests of the Debtors and their
creditors.
The firm can be reached at:
Fred C. Caruso, CPA
Vice president and chief operating officer
Development Specialists Inc.
26 Broadway, New York, NY 10004-1840
Telephone: (212) 425-4141
Facsimile: (212) 425-9141
http://dsi.biz/
Based in Dublin, Ireland, Ritchie Risk-Linked Strategies Trading
(Ireland) Ltd. and Ritchie Risk-Linked Strategies Trading
(Ireland) II Ltd. -- http://www.ritchiecapital.com/-- are Dublin-
based funds of hedge fund group Ritchie Capital Management. The
Debtors were formed as special purpose vehicles to invest in life
insurance policies in the life settlement market. Debtors filed
for Chapter 11 protection on June 20, 2007 (Bankr. S.D.N.Y. Case
Nos. 07-11906 and 07-11907). When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of more than $100 million. The Debtors' exclusive period to
file a Chapter 11 plan expires on Oct. 18, 2007.
RITCHIE (IRELAND): TAps Houlihan Lokey as Investment Bankers
------------------------------------------------------------
Ritchie Risk-Linked Strategies Trading (Ireland) Ltd. and Ritchie
Risk-Linked Strategies Trading (Ireland) II Ltd. ask the United
States Bankruptcy Court for the Southern District of New York to
employ Houlihan Lokey Howard & Zukin Capital Inc. as their
investment bankers, nunc pro tunc to
The Debtors selected Houlihan Lokey as their investment bankers
because of Houlihan Lokey's substantial experience as a leading
financial advisor in both restructuring and sale transactions.
Professionals from Houlihan Lokey have previously represented
other debtors in large bankruptcy cases, including Granite
Broadcasting Corporation, Eagle Picher Industries Inc., and
American Restaurant Group, among other cases.
As investment bankers, Houlihan Lokey will:
a) assist the Debtors in the development, preparation and
distribution of selected information, documents and other
materials in an effort to create interest in and to
consummate any transaction(s), including, if appropriate,
assisting the Debtors in the preparation of an offering
memorandum; soliciting and evaluating indications of interest
and proposals regarding any transaction(s) from current
and/or potential equity investors, acquirers and/or strategic
partners;
b) assist the Debtors with the development, structuring,
negotiation and implementation of any transaction(s),
including, among other things, assisting the Debtors with due
diligence investigations and participating as a
representative of the Debtors in negotiations with creditors,
servicing agents and other parties involved in any
transaction(s);
c) assist the Debtors in valuing the Debtors and their assets
and liabilities, including, for the purposes of Irish GAAP;
provided that any insurance actuarial type work will be
undertaken by outside appraisers, separately retained and
compensated by the Debtors;
d) advise and attend meetings of the Debtors' Board of
Directors, creditors, official constituencies and other
interested parties, as the Debtors determine to be necessary
or desirable;
e) provide expert advice and testimony regarding financial
matters related to any transaction(s); and
f) provide such other financial advisory and investment banking
services reasonably necessary to accomplish the foregoing, as
requested by the Debtors and mutually agreed.
Houlihan Lokey's obligations to provide the services described
herein are contingent upon, and expressly subject to, approval
by Ritchie I's senior secured lender, ABN of the terms and
conditions described in the Engagement Letter.
To the best of the Debtors' knowledge, Houlihan Lokey and all of
its employees are "disinterested persons" as defined in Section
101(14) of the Bankruptcy Code.
In consideration of Houlihan Lokey's acceptance of this engagement
and performance of services pursuant to the Engagement Letter,
Ritchie I has paid Houlihan Lokey a non-refundable retainer fee of
$213,500 and Ritchie II has paid Houlihan Lokey a non-refundable
retainer fee of $36,500 upon the mutual execution of the
Engagement Letter.
As compensation for their services, Houlihan Lokey will bill
Debtors, subject to court approval, upon the closing of each
transaction, as:
- a cash fee based equal to 1.5% of the total aggregate
aggregate gross consideration and against which 100% of the
Ritchie I or Ritchie II Retainer Fee or any non-refundable
retainer fees actually received by Houlihan Lokey will be
credited;
- if more than one transaction is consummated, Houlihan Lokey
shall be compensated based on the AGC from all Transactions,
calculated in the manner set forth above and as described in
the Engagement Letter;
- should a bona fide written Transaction Proposal be received
during the term of Houlihan Lokey's engagement for an
aggregate AGC of at least $475 million for Ritchie I, but
Ritchie I elects not to consummate a Transaction for any
reason, Ritchie I shall pay Houlihan Lokey a Break-Up fee
equal to $2,000,000. Should a bona fide written Transaction
Proposal be received during the term hereof for an aggregate
AGC of at least $65 million for Ritchie II, but Ritchie II
elects not to consummate a Transaction for any reason,
Ritchie II shall pay Houlihan Lokey a break-up fee equal to
$500,000.
About Ritchie Risk-Linked
Based in Dublin, Ireland, Ritchie Risk-Linked Strategies Trading
(Ireland) Ltd. and Ritchie Risk-Linked Strategies Trading
(Ireland) II Ltd. -- http://www.ritchiecapital.com/-- are Dublin-
based funds of hedge fund group Ritchie Capital Management. The
Debtors were formed as special purpose vehicles to invest in life
insurance policies in the life settlement market. Debtors filed
for Chapter 11 protection on June 20, 2007 (Bankr. S.D.N.Y. Case
Nos. 07-11906 and 07-11907). When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of more than $100 million. The Debtors' exclusive period to
file a Chapter 11 plan expires on Oct. 18, 2007.
SAGITTARIUS BRANDS: Declining Revenues Cue S&P's Downgrade to B-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Sagittarius Brands Inc., including the corporate credit rating to
'B-' from 'B'. The recovery rating on the company's senior
secured credit facilities remains at '1', which indicates S&P's
expectation of very high recovery (90% to 100%) in the event of
default. The outlook is stable. Sagittarius is a Nashville-based
restaurant operator.
The downgrade reflects the company's declining revenues and
narrowing operating margins that have resulted in a lower earnings
base and weakened credit ratios.
Revenues in the first quarter of 2007 have declined, despite a
larger store base, because of lower same-store sales facilitated
by significantly less customer traffic. Operating margins have
fallen largely due to higher labor costs associated with the
increased minimum wage in California, where many Del Taco
restaurants are located.
SEA CONTAINERS: Creditor Panel Raises Concerns on DIP Financing
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Sea Containers
Services, Ltd. and its debtor-affiliates has raised certain
ongoing concerns regarding the proposed $176 million Debtor-in-
Possession Financing Facility.
These concerns include the:
(i) valuation of Sea Containers SPC Ltd.;
(ii) provisions of the DIP Facility that favor the individual
bondholder members of the Official Committee of Unsecured
Creditors of Sea Containers Ltd.; and
(iii) risks associated with foreclosure under the Securitization
Facility.
There are material facts in dispute relating to the value of SPC,
David Stratton, Esq., at Pepper Hamilton LLP, in Wilmington,
Delaware, explains to the Honorable Kevin J. Carey of the U.S.
Bankruptcy Court for the District of Delaware. The SCSL Committee
has been provided with information demonstrating differing points
of view on the value of SPC. The value of SPC is one component
necessary to assess the appropriateness of the DIP Facility
inasmuch as SCL is assuming the credit risk of the DIP Facility,
and the SCSL Committee wants to ensure the value of SPC would not
create directly or indirectly a default under the DIP Facility
including the representations, covenants, and default provisions.
While the SCSL Committee recognizes that it may make sense to
proceed with the DIP Facility in the face of some valuation risk,
the SCSL Committee does not support issuing a blank check in that
regard, Mr. Stratton says.
The SCSL Committee believes that additional facts are needed to
clarify the issues related to valuation. The deposition
testimony of Michael Berkowitch of PricewaterhouseCoopers, the
Debtors' financial advisors, and Roger Passal of TranSystems may
provide clarification on valuation issues, Mr. Stratton tells the
Court.
The SCSL Committee reserves its rights with respect to the
valuation issues until after the appropriate evidence has been
submitted.
Mr. Stratton also notes that the proposed DIP Lenders are SCL
Committee Bondholders and hold substantial prepetition claims
against SCL. In light of the dual roles of the SCL Committee
Bondholders/DIP Lenders, the SCSL Committee is intensely focused
on scrutinizing the terms of the DIP Facility.
According to Mr. Stratton, the SCSL Committee has identified a
number of problematic terms in the DIP Facility. The SCSL
Committee has discussed its specific concerns with the Debtors,
and has made those concerns available to the DIP Lenders. The
SCSL Committee plans to continue to engage in discussions with
relevant parties in hope of resolving those concerns. The SCSL
Committee reserves all rights to the extent the DIP Lenders do
not accede to the SCSL Committee's requests.
Mr. Stratton further points out that foreclosure under the
Securitization Facility itself is capable of producing economic
detriments to the estates that may outweigh any adverse valuation
determinations. The SCSL Committee is evaluating these risks and
reserves all rights in respect thereto.
Pursuit of the DIP Facility involves a careful weighing of
competing considerations and risks. At this moment, the SCSL
Committee needs to assess additional information before deciding
to support or object to the DIP Facility, Mr. Stratton says.
Debtors Address DIP Objections
The DIP objections are ill-founded and should be overruled, the
Debtors tell Judge Carey.
Robert D. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, reiterates that the Debtors are powerless
to prevent foreclosure under the prepetition Securitization
Facility except by renegotiation with the Securitization Facility
lenders or repayment of that facility. Because of the facility's
bankruptcy-remote structure, neither Sea Containers SPC Ltd. as
borrower, or SPC Holdings Ltd. as guarantor, can, as a practical
matter, seek protection under the Bankruptcy Code.
The Debtors could do nothing and allow foreclosure; they could
negotiate an expensive and likely unworkable amendment of the
existing bankruptcy-remote obligations; or they could borrow
funds to repay the Securitization Facility, Mr. Brady says.
GE Capital Container SRL, GE Capital Container Two SRL and GE
SeaCo SRL, in their objection, contort the applicable legal
standards under Sections 363 and 364 of the Bankruptcy Code, Mr.
Brady contends. Courts evaluate on a case-by-case basis the need
for, and the terms of, a DIP financing arrangement, Mr. Brady
points out. The touchstone of this inquiry is the debtor's
business judgment, to which courts generally defer.
In the Debtors' business judgment, based on extensive analysis
and exploration of options over a period of more than three
months, the proposed DIP Financing is necessary to avoid a
significant risk of loss of value and litigation exposure related
to a potential foreclosure on assets pledged in support of the
Securitization Facility, Mr. Brady contends.
The DIP Motion contemplates repaying the Noteholders through a
capital contribution from SCL to Holdings, which would then be
contributed to SPC. The U.S. Trustee says the proposal is an
"investment" that must comply with Section 345.
Mr. Brady, however, points out that the plain language and
legislative history of Section 345 indicate that Congress
intended to cover situations where a debtor deposits idle cash or
cash equivalents. Section 345 does not apply to capital
expenditures or refinancing transactions, which are governed by
Sections 363 and 364.
In In re Foamex Int'l, No. 05-12685 (PJW), the U.S. Trustee
argued that Section 345 applied to the debtor's request to fund a
subsidiary's entry into a joint venture, Mr. Brady notes. The
Foamex court, however, overruled the objection stating that the
proposal was a Section 363 issue.
Mr. Brady clarifies that the proposed transaction is not a cross-
collateralization. The Noteholders under the Securitization
Facility will not improve their position by getting paid; they
merely get the benefit of their bargain, Mr. Brady explains.
Prior to the bankruptcy filing, the Noteholders obtained a
structural priority over all of the Debtors' creditors by making
an asset-backed loan to a bankruptcy-remote entity, Mr. Brady
relates. GE SeaCo is fully aware of this deal, Mr. Brady adds.
Contrary to the U.S. Trustee's arguments, the only benefit gained
by the proposed DIP Lenders vis-a-vis their prepetition,
unsecured claims is preservation of the bankruptcy estates, which
will benefit all unsecured creditors, Mr. Brady tells the Court.
The DIP Lenders do not enjoy an advantage in recovering on their
prepetition unsecured claims, Mr. Brady states.
"The DIP Facility is not the product of any insider transaction
negotiated and documented behind closed doors," Mr. Brady
clarifies.
While the lenders are current unsecured creditors of SCL serving
on SCL's creditor committee, they have not sought to obtain any
special treatment for their existing unsecured claims; their
unsecured claims are and will continue to be governed by the same
prepetition indentures that apply to the other unsecured
bondholders in the cases, Mr. Brady maintains.
At the hearing on the DIP Motion, the Debtors will present expert
testimony on valuation of SPC's container assets. The Debtors
believe that SPC has positive equity value or, in a downside
scenario, that the value of SPC's container assets is only
slightly lower than the amount of the Term Loan.
According to Mr. Brady, the Debtors pursued a possible
restructuring of the Securitization Facility in lieu of the DIP
Facility. Ultimately, no proposal advanced by the Noteholders
was as good, taken as a whole, as the terms of the DIP Facility.
The Noteholders' proposal for a long-term restructuring of the
Securitization Facility, Mr. Brady relates, required a parent
guarantee from SCL of $25,000,000, plus the possibility of
additional required cash infusions from the parent. The Debtors
are also required to pay sizeable fees. The Debtors also would
face the continuing threat of default and foreclosure.
Foreclosure would have harmful operational and strategic
implications for GE SeaCo, and therefore to the value of SCL's
50% equity stake in GE SeaCo, which is SCL's most valuable asset,
Mr. Brady adds. A foreclosure sale of either SPC's stock or the
GE SeaCo Class B quotas owned by SCL that were pledged to the
Noteholders would introduce at least one new party into the joint
venture. It is unclear whether the new holders after a
foreclosure would have any interest in, or particular expertise
with, the shipping container business, Mr. Brady explains.
Foreclosure would also increase SCL's exposure to litigation and
contracted-based claims, Mr. Brady adds.
GE Capital, et al.'s Pretrial Statement
GE Capital Container SRL, GE Capital Container Two SRL, GE SeaCo
SRL, and the Office of the United States Trustee for Region 3 have
submitted to the Court a joint pretrial statement with respect to
the Debtors' DIP Motion.
Among others, GE Capital, et al., will ask the Court to:
-- review the factors SCL relied upon in exercising its
business judgment to enter into the DIP Facility;
-- find whether a heightened scrutiny test should be
applied in light of the proposed structure and use of the
loan proceeds, which is to make a capital contribution in a
non-Debtor subsidiary;
-- find whether the value of SPC's assets and SCL's B Quotas,
standing alone and without consideration of any other
reason, is sufficient to justify granting to the proposed
DIP Lenders a superpriority claim against the Debtors and a
first priority lien on specific assets of SCL; and
-- find whether foreclosure on SPC's containers and contract
rights, and SCL's B Quotas will jeopardize the value of
SCL's A Quotas, increase claims against SCL that would not
otherwise be asserted, and eliminate the inherent value to
SCL in retaining SPC's assets and the B Quotas so as to
justify granting to the proposed DIP Lenders a
superpriority claim against the Debtors and a first
priority lien on specific assets of SCL.
GE Capital, et al., will call on these witnesses at the DIP
hearing:
1. Laura Barlow, the Debtors' chief financial officer and
chief restructuring officer, to testify to the facts set
forth in the Debtors' request;
2. Michael Berkowitch, a director at PwC, the Debtors'
financial advisors, to testify concerning the advice and
assistance the firm provided to the Debtors in connection
with the entry into the DIP Facility;
3. Antonios Basoukeas, GE Seaco's chief financial officer, to
testify regarding the facts asserted in the GE Parties'
objection;
4. Roger Passal of TranSystems to testify regarding his
valuation of the assets to which SPC's lenders have
recourse and the basis for his opinion on the value of the
SPC Recourse Assets; and
5. Michael Panacio, a bankruptcy analyst with the U.S.
Trustee's office.
Mr. Berkowitch is a designated expert by the Debtors. Mr. Passal
is a designated expert by the GE Parties.
The Court will convene a hearing on the DIP Motion June 26, 2007,
at 3:00 p.m., to be continued to June 29 at 10:00 a.m.
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. 20;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Court extended the Debtors' exclusive period to file a Plan of
Reorganization to Sept. 28, 2007.
SEA CONTAINERS: Trustee Drops Mariner, Dune & Trilogy from Panel
----------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, has issued
a notice disbanding the Official Committee of Unsecured Creditors
appointed in Sea Containers, Ltd. and its debtor-affiliates'
cases, citing conflict of interest with respect to three of the
Committee members.
Panel members Trilogy Capital, LLC, Dune Capital, LLC, and
Mariner Investment Group, Inc., have committed to extend up to
$176,500,000 in postpetition financing to the Debtors. The
proposed DIP Facility is pending approval before the Honorable
Kevin J. Carey of the U.S. Bankruptcy Court for the District of
Delaware.
Because Trilogy, Dune Capital, and Mariner Investment Group will
become secured and superpriority claimants, the Trustee removes
them from the SCL Committee, David L. Buchbinder, Esq., says on
behalf of the U.S. Trustee.
HSBC Bank, National Association as Indenture Trustee is the sole
remaining SCL Committee member, Mr. Buchbinder adds.
The U.S. Trustee will convene a meeting on June 28, 2007, at
11:00 a.m. at J. Caleb Boggs Federal Building, 844 N. King
Street, Room 2112, in Wilmington, to reformulate a committee of
unsecured creditors. The U.S. Trustee has circulated a
questionnaire among the remaining largest unsecured creditors of
the Debtors' estate. Any interested unsecured creditor may seek
participation on the Committee by completing the questionnaire.
Debtors & SCL Panel Want Disbandment Stayed
The Debtors and the Official Committee of Unsecured Creditors for
Sea Containers, Ltd., on Monday asked the Court to schedule an
emergency status conference that same day with regard to the U.S.
Trustee's notice of disbandment of the SCL Committee.
The Debtors and the SCL Committee urged the Court to stay the
U.S. Trustee from disbanding the SCL Committee or removing its
members, and from appointing new committee members.
The Debtors and the SCL Committee also asked Judge Carey to find
that the SCL Committee remains a party-in-interest, with standing
to appear, pending a hearing -- on notice -- regarding issues of
committee dissolution and composition.
"The Debtors and the SCL Committee cannot overemphasize their
dismay at the US Trustee's actions," Robert D. Brady, Esq., at
Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware,
said.
Mr. Brady explained that at the May 8, 2007 hearing on the
Debtors' request for approval of a commitment letter for the
proposed DIP Facility, the U.S. Trustee indicated "we don't have
any problem with [the Committee Letter Motion] to the extent all
it seeks to do is approve a commitment letter, provide for the
payment of fees and expenses and provide for a limited form of
indemnification. No committee member has been removed yet. That
matter is before the Court at this time."
"As a result, counsel for the Debtors and the SCL Committee left
the courtroom that day understanding that any action by the US
Trustee to remove the SCL Committee members would occur only
after notice, briefing and hearing," Mr. Brady said.
Following the hearing, the proposed DIP Lenders tried to reach a
consensual resolution that would alleviate the U.S. Trustee's
concerns. The U.S. Trustee never responded to the proposed
Lenders' position paper on May 14, which cited numerous cases
showing that no conflict of interest exists at this time. The
Lenders offered to resign from the SCL Committee if a conflict --
like an uncured event of default -- were to arise.
"The US Trustee should not have acted before the proposed DIP
Lenders became actual DIP Lenders and before attempting to reach
a consensual resolution," Mr. Brady pointed out.
The U.S. Trustee has put the Debtors and the SCL Committee in an
impossible position, Mr. Brady argued. The Disbandment Notice is
inconsistent on whether the SCL Committee still exists, Mr. Brady
said. On the one hand, the Notice states that the SCL Committee
has been disbanded. On the other hand, it states that HSBC "is
the sole remaining Committee member," Mr. Brady noted.
Disbanding the current SCL Committee would negatively impact
reorganization efforts and greatly hinder efforts to maximize
value for all creditors, Mr. Brady argued. Introducing a new
committee to the case on short notice will require massive
expenditure of time and money to get a new committee "up to
speed," he said.
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. 20;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Court extended the Debtors' exclusive period to file a Plan of
Reorganization to Sept. 28, 2007.
SIERRA PACIFIC: S&P Rates Proposed $325 Million Bonds at BB+
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Nevada Power Co.'s proposed issuance of approximately $350 million
of general and refunding mortgage bonds and Sierra Pacific Power
Co. proposed $325 million issuance of G&R bonds, both due 2037.
The outlook is positive.
The majority of proceeds from the proposed issuance will be used
to refinance existing higher cost debt. This month, NPC launched
a tender offer for $227.5 million of its 9% G&R bonds series G,
due 2013, and SPCC has tendered $320 million of its 8% G&R bonds,
series A, due 2008.
The positive outlook reflects the significant strength of the
regulatory climate in Nevada, which, based on recent developments,
currently affords NPC and SPPC some of the most credit-supportive
protections of any western state.
This factor is balanced against a daunting capital expenditure
program that will not allow the company to improve its credit
metrics until the completion of the second phase of Ely Energy
Center in 2013. Capital expenses are estimated at $7.8 billion
($5.9 billion for NPC and $1.9 billion for SPPC) from 2007-2011.
Even with equity issuances, which will be required to maintain the
current capital structure, S&P expect financial metrics to erode
from their current levels during construction. For the 12 months
ended March 31, 2007, cash flow coverage of interest and debt
stood at 2.4x and 11%, respectively. S&P would note that these
results are preliminary, as they do not reflect updated power
purchase adjustments for the company for 2007 and beyond, which
are substantial. Debt to total capitalization stood at around 65%
as of the same date.
SLATE CDO: Fitch Rates $5.3 Mil. Class C Deferrable Notes at BB
---------------------------------------------------------------
Fitch has assigned the following ratings to Slate CDO 2007-1, Ltd.
and Slate CDO 2007-1, LLC. All notes mature in 2052.
-- $270,000,000 class A1SA variable funding senior secured
floating-rate notes 'AAA';
-- $132,000,000 class A1SB senior secured floating-rate notes
'AAA';
-- $67,500,000 class A1J senior secured floating-rate notes
'AAA';
-- $38,200,000 class A2 senior secured floating-rate notes
'AA';
-- $27,800,000 class A3 secured deferrable interest floating-
rate notes 'A';
-- $18,000,000 class B1 secured deferrable interest floating-
rate notes 'BBB';
-- $13,500,000 class B2 secured deferrable interest floating-
rate notes 'BBB-';
-- $11,200,000 class B3 secured deferrable interest floating-
rate notes 'BB+';
-- $5,300,000 class C mezzanine deferrable interest floating-
rate notes 'BB'.
TARGETED GENETICS: Commences $19.5 Million Common Stock Offering
----------------------------------------------------------------
Targeted Genetics Corporation entered into definitive agreements
with institutional and other accredited investors with respect to
the private placement of 6.7 million shares of its common stock at
a purchase price of $2.905 per share for expected gross proceeds
of approximately $19.5 million, before payment of placement agent
commissions and offering expenses.
Investors will receive warrants to purchase 6.7 million shares of
common stock at an exercise price of $3.25 per share. Rodman &
Renshaw, LLC served as the placement agent for this transaction.
The closing of the offering is subject to customary closing
conditions, including approval of an additional listing
application by the NASDAQ Stock Market.
"The company is pleased to report a significant financing with
institutional investors," H. Stewart Parker, president and chief
executive officer, said. "The company believes that with the net
proceeds from this private placement, it can maintain its current
planned development activities and achieve significant progress in
the accomplishment of the company's clinical milestones."
Targeted Genetics estimates that net proceeds from the financing
will be approximately $17.8 million after deducting the estimated
costs associated with the transaction. Targeted Genetics plans to
use the net proceeds of this financing for working capital.
As part of the transaction, Targeted Genetics has agreed to file a
registration statement with the SEC covering the resale of the
shares of common stock to be issued in the offering, including the
shares of common stock issuable upon exercise of the warrants.
About Targeted Genetics
Headquartered in Seattle, Washington, Targeted Genetics Corp.
(NasdaqCM: TGEN) -- http://www.targen.com/-- is a biotechnology
company committed to the development of innovative targeted
molecular therapies for the prevention and treatment of acquired
and inherited diseases with significant unmet medical need.
Going Concern Doubt
Ernst & Young LLP expressed substantial doubt on Targeted
Genetics Corporation'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 recurring losses and negative cash flows from
operations.
TD BANKNORTH: Soliciting Amendment Consents for Notes Indentures
----------------------------------------------------------------
TD Banknorth Inc. is soliciting consents for amendments to the
indentures relating to:
a) the 3.75% Senior Notes Due 2008 issued by Banknorth Group
Inc.;
b) the 7.65% Junior Subordinated Deferrable Interest Debentures
due 2028 issued by HUBCO Inc., all of which are held by
HUBCO Capital Trust II; and
c) the 10.875% Junior Subordinated Deferrable Interest
Debentures due 2030 issued by BostonFed Bancorp, all of
which are held by BFD Preferred Capital Trust II.
The company is soliciting consents from the holders of record as
5:00 p.m., New York City time, on June 25, 2007, of the Senior
Notes, the capital securities issued by the HUBCO Trust and
holders of the capital securities issued by the BFD Trust.
Each consent solicitation is made independently of the other
consent solicitations and the company has reserved the right to
terminate, withdraw or amend each consent solicitation
independently of the other consent solicitations.
The purpose of the Amendments is to amend the reporting covenants
in the Indentures to provide in each case that the company's
reporting requirements under the respective Indentures will be
satisfied if The Toronto Dominion Bank, the company's parent,
files specified reports, documents and information with the
Securities and Exchange Commission and provides the same to the
Trustees and holders of the notes issued under such Indentures.
Each solicitation will expire at 5:00 p.m., New York City time, on
July 12, 2007, unless extended or terminated by the company.
Holders will be able to revoke their consents with respect to a
series of Securities until a majority in principal amount, in the
case of the Senior Notes, and a majority in liquidation amount, in
the case of the HUBCO Capital Securities or the BFD Capital
Securities, are received by the company and evidence thereof has
been received by the trustee under the applicable Indenture.
If the Amendments becomes effective and the conditions to the
payment of the consent fee described in the consent solicitation
statement relating to the solicitations are satisfied or waived
with respect to a series of Securities, the company will pay a
consent fee of $2.50 in cash per $1,000 principal amount or
liquidation amount, as applicable, of the Securities of that
series for which valid consents are received prior to the
expiration of the solicitation and not revoked.
The detailed terms and conditions of the consent solicitations are
contained in a consent solicitation statement dated June 26, 2007.
Goldman Sachs & Co. will act as Solicitation Agent for the consent
solicitations. Global Bondholder Services Corporation will act as
the Information Agent. Requests for documents may be directed to
Global Bondholder Services Corporation by telephone at (866) 873-
7700 (toll free) or (212) 430-3774 (banks and brokers). Questions
regarding the consent solicitations may be directed to Goldman,
Sachs & Co. at (800) 828-3182 (toll free) or (212) 902-5334
(collect).
About TD Banknorth Inc.
Headquartered in Portland, Maine, TD Banknorth Inc. --
http://www.TDBanknorth.com/-- is a banking and financial services
company and an indirect wholly owned subsidiary of TD Bank
headquartered in Toronto, Canada. TD Banknorth's banking
subsidiary, TD Banknorth N.A., operates in Connecticut, Maine,
Massachusetts, New Hampshire New Jersey, New York, Pennsylvania
and Vermont. TD Banknorth and TD Banknorth N.A. also operate
subsidiaries and divisions in insurance, wealth management,
merchant services, mortgage banking, government banking, private
label credit cards, insurance premium financing and other
financial services and offers investment products in association
with PrimeVest Financial Services, Inc.
* * *
As reported in the Troubled Company Reporter on April 24, 2007,
Fitch Ratings affirmed TD Banknorth Inc.'s individual rating at
'B'.
TOURO COLLEGE: Moody's Upgrades Rating to Ba1 from Ba2
------------------------------------------------------
Moody's Investors Service upgraded Touro College's rating to Ba1
from Ba2. The rating outlook has been revised to positive at the
higher rating level. The ratings apply to the College's Series
1999A bonds issued by the New York City Industrial Development
Agency and the Certificates of Participation (1999) issued through
the City of Vallejo, California.
The upgrade and positive outlook reflect the college's long
history of enrollment growth and programmatic expansion, combined
with a lengthening trend of favorable operating performance and
liquidity growth, despite rapid growth in debt. In addition, the
potential sale of the college's online business (Touro University
International) has the potential to have a transformative impact
on the College's financial and credit profile.
Legal Security
Series 1999A bonds (NY) carry a pledge of gross revenues of Touro
College (mainly NY based operations), a mortgage pledge of certain
campus facilities and debt service reserve fund; Certificates of
Participation carry a pledge of gross revenues of the osteopathic
medical school in Vallejo, a general obligation guarantee of Touro
College, a mortgage interest in the leasehold agreement of the
medical school's campus, and a debt service reserve fund
Interest Rate Derivatives: None.
Strengths
Growing enrollment ($167.8 million net tuition revenue in FY2006
compared with $111.5 million in FY2003) in a diverse and expanding
array of programs across multiple geographies, although majority
of revenues remain based in New York campuses and Touro University
International (exclusively online programs);
Favorable operating performance (5.7% average operating margin)
that has been sustained over more than five years, reflecting
stabilization of certain start-up programs and rapid growth in
highly profitable online enrollments;
Potential gains from sale of online program, which could transform
the balance sheet profile of the organization;
Challenges
Improved, but still limited liquidity profile ($19 million of
unrestricted financial resources), as college continues to invest
heavily in program expansion and capital investment;
Long history of aggressive growth strategies, with multiple new
campuses in new geographic areas opening over the course of just a
few years, increase risk profile despite a solid track record of
successful expansion;
Transitional debt structure presents near-term risks should a
planned refinancing be substantially delayed since many of the
College's outstanding debts are either short-term in nature or
collateralized by cash and investments.
Recent Developments/Results
Touro College is comprised of three primary units. Touro
College's New York area programs include traditional graduate and
undergraduate liberal arts and sciences, education, business,
allied health professions, computer science and law. The majority
of these programs have been long established with solid enrollment
histories. In California, the College offers an osteopathic
medical school and a school of pharmacy as well as other programs
in physician assistant studies, public health and education,
including a campus that has opened in West Hollywood. The
California based college also expanded into Henderson, Nevada
where it offers another osteopathic medical program, in addition
to nursing, occupational therapy, physician's assistant programs
and education. The College's Touro University International
represents its broad based exclusively online division, which
enrolled over 7,400 students in the Spring 2007 semester.
The college has a long-history of growing enrollment and campus
locations. Recent expansions have included Los Angeles (Fall
2005), Miami Beach (Fall 2006) and Berlin (Fall 2002). The
College continues to consider other locations both domestically
and internationally. Although each programmatic expansion
requires a multi-year period to become self-supporting, the rapid
growth in online programs and stabilization and growing financial
performance of the Vallejo and the Henderson campuses allow for
reinvestment in new ventures. While we continue to believe the
rapid expansion program presents risks for the college, management
has demonstrated an ability to bring new sites online quickly and
to manage the challenges of running a widely spread operation.
With ongoing enrollment growth, financial performance has remained
healthy, with an average operating margin of 5.7% and operating
cash flow of 10.7%. More favorable operating performance, small
amounts of fundraising and investment performance has allowed
liquidity to improve, rising to $19 million in FY2006.
The college has taken on a significant amount of debt in recent
years. At the end of FY2006, outstanding debt had reached $88
million primarily representing new bank debt. In addition, the
college has taken on $28.5 million of new bank debt to finance the
acquisition of its leased facility in Nevada, and fully utilized a
new $10 million line of credit to finance construction of a new
osteopathic medical school in Harlem. In total, the college
currently has over $60 million of various bank notes and lines of
credit. Moody's believes this structure detracts from the credit
quality of bond holders as certain of these loans are
collateralized by cash and investments or expire over short time
periods. However, over the next several months, Touro expects to
refinance all rated debt (the Series 1999A Revenue Bonds and the
Certificates of Participation), along with the majority of
outstanding bank notes and lines under newly issued bonds backed
by a letter of credit. Part of this refinancing strategy is
expected to occur within the next month.
The college has also been actively seeking a buyer for its Touro
University International online program. While the status of
negotiations and discussions remain confidential, we expect that
if the college successfully concludes a sale, Touro's balance
sheet profile could be transformed. Touro University
International represents over $33 million in annual revenues
(approx. 19%) and a substantial portion of operating cash flow.
Moody's positive outlook reflects an expectation that even after
the potential sale, the college's operating performance will
remain positive.
Outlook
The positive outlook is driven by Moody's belief that the
college's debt structure and profile will improve materially with
a planned refinancing and restructuring expected this year, while
sustaining favorable operating performance and enrollment growth
trends. Should the college successfully close a transaction to
sell its online program, the credit profile of the University
could improve materially.
What Could Change The Rating - Up
Successful restructuring of debt; maintenance of favorable
operating performance with additional growth in liquidity
What Could Change The Rating - Down
Failure to restructure short-term debt; rapid decline in
enrollment or operating cash flow
Key Data And Ratios (Fiscal year 2006 financial data; fall 2006
enrollment data):
-- Total Enrollment: 18,325 full time equivalent students
-- Total Direct Debt: $128.4 million (pro-forma)
-- Expendable Resources to Debt: 0.2x
-- Expendable Resources to Operations: 0.1x
-- Three-Year Average Operating Margin: 5.7 %
-- Operating Cash Flow Margin: 10.7%
TRANS ENERGY: Posts $577,594 Net Loss in Quarter Ended March 31
---------------------------------------------------------------
Trans Energy Inc. reported a net loss of $577,594 on revenues of
$285,520 for the first quarter ended March 31, 2007, compared with
a net loss of $1,855,109 on revenues of $329,721 for the same
period ended March 31, 2006. Results for the 2006 quarter
includes a loss from discontinued operations of $1,682,306 due to
the disposal of Arvilla Oilfield Services.
Total revenues from continuing operations for the three months
ended March 31, 2007, decreased 15% compared to the first quarter
of 2006, primarily due to decreased production and lower oil and
gas prices, as well as the sale of the Wyoming wells.
Depreciation, depletion and amortization and accretion expense
decreased 30% due to the lower production levels from existing
wells, as well as the increase in proved reserves at Dec. 31,
2006.
Loss from operations for the first quarter of 2007 was $577,594
compared to a loss of $172,803 for the first quarter of 2006. The
increase is related to higher general and administrative expenses
due to the hiring of additional employees and the seismic
acquisition in Kansas, as well as an increase in expenses related
to the workover program.
At March 31, 2007, the company's consolidated balance sheet showed
$5,744,286 in total assets, $5,480,717 in total liabilities, and
$263,569 in total stockholders' equity.
The company's consolidated balance sheet at March 31, 2007, also
showed strained liquidity with $1,057,775 in total current assets
available to pay $3,030,745 in total current liabilities.
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?2134
Going Concern Doubt
As reported in the Troubled Company Reporter on April 23, 2007,
Malone & Bailey PC, in Houston, expressed substantial doubt about
Trans Energy 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
significant losses from operations, accumulated deficit of
$33,026,735, and working capital deficit of $2,610,953 at
Dec. 31, 2006.
Trans Energy has incurred cumulative operating losses through
March 31, 2007, of $33,604,330 and has a working capital deficit
at March 31, 2007, of $1,927,970.
About Trans Energy
Trans Energy Inc. (OTC BB: TENGE.OB) -- http://www.transenergyinc/
-- is an oil and gas exploration and development company in the
Appalachian Basin headquartered in St Mary's West Virginia, with
offices also in Parkersburg. The company, operating since 1994,
restructured itself during 2006 with a new management team, a
focus on oil and gas development, and a business plan for rapid
growth.
VISTAR CORP: S&P Puts Corp. Credit Rating at B with Stable Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Centennial, Colorado-based Vistar Corp. The
outlook is stable.
At the same time, Standard & Poor's assigned its loan and recovery
ratings to Vistar's proposed $90 million senior secured term loan
due 2014. The loan was assigned a 'B' rating, with a recovery
rating of '3', indicating the expectation for meaningful (50%-70%)
recovery of principal in the event of a payment default. The bank
loan rating and accompanying analysis are based on preliminary
documentation and are subject to revision upon receipt and review
of final documentation.
"The ratings on Vistar reflect its participation in two niche
segments of the highly competitive U.S. foodservice distribution
industry, thin operating margins, and highly leveraged financial
profile," said Standard & Poor's credit analyst Jean Stout.
"These factors are only somewhat offset by favorable industry
growth trends."
Through 36 distribution centers nationwide, Vistar operates two
businesses that focus on niche segments within the U.S.
foodservice distribution industry: Vistar Specialty Markets is the
leading national distributor to the vending, office coffee
services, theatre, and fund-raising markets; and Roma Foodservice,
which primarily focuses on Italian and Italian-American food
products, caters primarily to pizzerias. Although the foodservice
industry benefits from favorable demographic trends, including a
shift away from dining at home, the market remains highly
fragmented (with more than 15,000 local, regional, and national
competitors) and highly price-competitive.
WACHOVIA BANK: Fitch Affirms Low-B Ratings on Six note Classes
--------------------------------------------------------------
Fitch affirms all classes of Wachovia Bank CRE CDO 2006-1
floating-rate notes as:
-- $616,500,000 class A-1A at 'AAA';
-- $68,500,000 class A-1B at 'AAA';
-- $145,000,000 class A-2A at 'AAA';
-- $145,000,000 class A-2B at 'AAA';
-- $53,300,000 class B at 'AA';
-- $39,000,000 class C at 'A+';
-- $12,350,000 class D at 'A';
-- $13,650,000 class E at 'A-';
-- $24,700,000 class F at 'BBB+';
-- $16,900,000 class G at 'BBB';
-- $35,100,000 class H at 'BBB-';
-- $13,000,000 class J at 'BB+';
-- $14,950,000 class K at 'BB';
-- $9,100,000 class L at 'BB-';
-- $34,450,000 class M at 'B+';
-- $16,250,000 class N at 'B';
-- $6,500,000 class O at 'B-'.
Deal Summary:
Wachovia CRE CDO is a revolving commercial real estate cash flow
collateralized debt obligation, which closed on July 11, 2006. It
was incorporated to issue $1,300,000,000 of floating-rate notes
and preferred shares. Since the effective date review (March 16,
2007), 12 loans have been added to the pool while 16 loans have
paid off, resulting in a net decrease of $48.9 million or a 3.8%
decrease to the CDO par balance. Based on the June 18, 2007 Fitch
categorization, the CDO was substantially invested as follows:
whole loans and A-notes (75%), B-notes (8%), mezzanine loans (3%),
and cash (14%). The CDO is also permitted to invest in commercial
mortgage backed securities, commercial real estate CDOs, REIT
debt, and synthetic assets.
The collateral asset manager is Structured Asset Investors LLC, a
wholly owned subsidiary of Wachovia Corporation. An affiliate,
Wachovia Bank N.A.'s Structured Finance Group, is serving as sub-
advisor. SFG is responsible for selecting assets and monitoring
the portfolio. Wachovia CRE CDO has a five year reinvestment
period, during which, if all reinvestment criteria are satisfied,
principal proceeds may be used to invest in substitute collateral.
The reinvestment period ends in September 2011.
Collateral Asset Manager:
SFG focuses on providing non-recourse, transitional and high
leverage capital to Wachovia's commercial real estate customer
base. SFG is housed in the corporate and investment banking
group, specifically within the fixed income division's real estate
capital markets group. Fitch rates SFG a 'CAM2-' as a commercial
real estate loan CDO Asset Manager. SFG is currently staffed by
approximately 20 experienced commercial real estate professionals.
The current outstanding balance of the SFG investment portfolio is
approximately $2.66 billion (not including its $1.3 billion
arranged CRE CDO). The unit benefits from the commercial bank's
robust internal procedures and controls. The unit's lending
activities are supported by the bank's commercial mortgage loan
servicing units, which Fitch rates 'CPS2+', 'CMS2', and 'CSS2'.
Performance Summary:
Since the effective date, the CDO's reinvestment cushion has
declined to 5.75% from 6%. The Fitch poolwide expected loss is
20.125% compared to the covenant of 25.875%. Although loan
diversity has improved since close, the 16 loans that have paid
off since the effective date review had a low weighted average
expected loss (11.891%) as the business plans were executed and
the properties reached stabilization. The fact that the seasoned
loans are paying off as they reach stabilization is the main
driver of this increased poolwide expected loss.
Although the cushion is below average for CREL CDOs, the portfolio
is well diversified. Additionally, the expectation is that the
portfolio will continue to be weighted predominantly in whole
loans and A-notes and be secured by traditional property types.
Wachovia's CREL origination platform is diverse and well
established. As a result, the expectation is that SFG should be
able to manage the portfolio within more narrowly defined
parameters compared with other CREL CDOs.
As of the effective date, the CDO was 80% invested in assets with
an additional 9% of the par balance allocated to delayed funding
obligations. The CDO is currently 76% invested in assets with an
additional 10% of the par balance allocated to delayed funding
obligations.
The weighted average spread of outstanding loan balances decreased
since the last review to 2.48% from 2.65%; however, it remains
above the covenant of 1.5%. The weighted average coupon has
remained at 7.5%. The percent of fixed rate loans, however, is
only 1.7%. These loans are not hedged, but this percentage is
within the maximum covenant of 2.75%. The weighted average life
has remained unchanged since the last review at 1.7 years, which
continues to imply that the loans will fully turnover during the
reinvestment period.
The over-collateralization ratios of all classes have remained
stable since the effective date review while the interest coverage
ratios have declined over the same period. The decline in the IC
ratios is attributed to the net loss of $48.9 million in CDO Par
and the declining WAS. Both ratios are above their covenants as
of the June 2007 trustee report.
Collateral Analysis:
As of the June 2007 trustee report, the CDO is within all its
property type covenants. Office loans now comprise the largest
percentage of assets at 39.5%. Since the effective date,
multifamily has decreased to be the second highest percentage at
21.3%. The CDO is also within all its geographic location
covenants with the highest percentage of assets located in
California at 30.6%. The asset type by Fitch categorization has
migrated to include a slightly higher percentage of B notes (to
7.8% from 6.3% of invested assets) while the mezzanine debt
percentage has stayed roughly the same (2.5%).
The pool has above average loan diversity relative to other CRE
CDOs. The pool currently consists of 65 loans and the Fitch LDI
score is 182.39, compared to the covenant of 244. No loan
represents more than 5% of the ramped portfolio.
For a summary of the Fitch Loans of Concern and the 10 largest
loans, please refer to the 'Wachovia Real Estate CDO 2006-1 CREL
Surveyor Snapshot' on the Fitch Research web site, which will be
available beginning July 2, 2007.
Rating Definitions:
The ratings of the class A and B notes address the likelihood that
investors will receive full and timely payments of interest, as
per the governing documents, as well as the aggregate outstanding
amount of principal by the stated maturity date. The ratings of
the class C, D, E, F, G, H, J and K notes address the likelihood
that investors will receive ultimate interest and deferred
interest payments, as per the governing documents, as well as the
aggregate outstanding amount of principal by the stated maturity
date.
Upgrades during the reinvestment period are unlikely given the
pool could still migrate to the PEL covenant. The Fitch PEL is a
measure of the hypothetical loss inherent in the pool at the 'AA'
stress environment before taking into account the structural
features of the CDO liabilities. Fitch PEL encompasses all loan,
property, and poolwide characteristics modeled by Fitch.
ZIFF DAVIS: Selling Enterprise Group's Assets for $150MM in Cash
----------------------------------------------------------------
Ziff Davis Media Inc. entered into a definitive agreement to sell
the assets of its Enterprise Group to an affiliate of Insight
Venture Partners, for approximately $150 million in cash, subject
to certain adjustments in accordance with the purchase and sale
agreement including a potential earn-out of up to $10 million in
cash based on the performance of the Enterprise Group in 2007.
"The Enterprise Group has a track record of vigorous expansion and
innovation. The team delivers smart, strategic customer results,"
Robert F. Callahan, chairman and CEO of Ziff Davis, said.
"Insight Venture has exciting plans to pursue growth opportunities
in this rapidly transforming technology media environment. The
company wishes them and the Enterprise Group much success."
"The company is proud to be associated with the Enterprise Group
team. They have accomplished a great deal, transitioning to the
digital age faster than any other media company the company have
seen," Larry Handen, Managing Director at Insight, said. "The
company looks forward to working closely with the talented
management team to help take this business to the next level in
the dynamic technology marketplace."
"Many of its portfolio companies have advertised with the
Enterprise Group for years and the company is proud to be
associated with these brands," Deven Parekh, managing director at
Insight, continued.
"The high tech industry Enterprise Group serves is rapidly
growing," Sloan Seymour, president of the Enterprise Group, said.
"This space demands compelling products that drive results and our
Enterprise Group team constantly creates new ways to achieve this
for its customers. This partnership with Insight will provide an
infusion of resources that will accelerate the company's ability
to deliver value to its customers, shareholders and employees."
The Enterprise Group employees will remain in their current
locations in New York, San Francisco and Boston.
The transaction, subject to certain closing conditions, including
receipt of specified third party consents, the funding of
committed bank financing, the completion of an audit of the
Enterprise Group and other customary closing conditions, is
expected to close in the third quarter of 2007.
Evercore Partners acted as financial advisor while Kirkland &
Ellis LLP acted as legal advisors to Ziff Davis.
O'Melveny & Myers LLP acted as legal advisors to Insight Venture
Partners.
About The Enterprise Group
The Enterprise Group produces online content, lead generation
services, events and publications serving the tech industry,
including: (i) online properties eweek.com, webbuyersguide.com,
cioinsight.com, baselinemag.com, microsoft-watch.com,
channelinsider.com and deviceforge.com; (ii) digital and face to
face events worldwide; (iii) eWEEK, CIO Insight and Baseline
magazines; and (iv) a database of 3.5 million business and
technology users.
About Insight Venture Partners
Headquartered in New York City, Insight Venture Partners --
http://www.insightpartners.com/-- is a venture capital firm
specializing in software and the Internet. Founded in 1995, the
team is composed of experienced investors and operating executives
with more than 150 years of collective experience in these
industries.
About Ziff Davis Holdings Inc.
Headquartered in New York City, Ziff Davis Holdings Inc. is the
parent company of Ziff Davis Media Inc. Ziff Davis Media Inc. --
http://www.ziffdavis.com/-- is an integrated media company
serving the technology and videogame markets. Including the
Enterprise Group, Ziff Davis currently reaches over 28 million
people a month through its portfolio of 32 websites, 6 magazines,
and hundreds of consumer and b-to-b events, well as business IT
tools and direct marketing services. The company has offices and
labs in San Francisco and Boston. Ziff Davis exports its brands
internationally in 50 countries and 21 languages.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 30, 2007,
Grant Thornton LLP, in New York, expressed substantial doubt about
Ziff Davis Holdings Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2006, and 2005. The auditing firm
reported that the company has incurred a net loss of approximately
$133.8 million during the year ended Dec. 31, 2006, and as of said
date, working capital deficit and accumulated deficit of
approximately $21 million and $1.2 billion.
In addition, as of March 31, 2007, the company had long-term debt
and redeemable preferred stock, which has been classified as debt,
totaling $390 million and $1.02 billion respectively, and a
working capital deficit of approximately $12.7 million.
Commencing August 2006, the company's Compounding Notes due 2009
accrue interest on a cash basis. The first cash interest payment
for the Compounding Notes was made in February 2007.
* Davis Polk Elects 15 New Partners Effective July 1
----------------------------------------------------
Davis Polk & Wardwell has elected 15 new partners effective
July 1, 2007. Davis Polk now has 160 partners in its offices in
New York, Menlo Park, Washington, D.C., London, Paris, Frankfurt,
Madrid, Hong Kong, Beijing and Tokyo.
Kirtee Kapoor, Esq. is a corporate lawyer who has had extensive
experience in corporate finance, restructurings, workouts and
mergers and acquisitions transactions. His experience also
includes several transactions in India. His recent matters
include advising The Gillette Company in connection with its $57
billion acquisition by The Procter & Gamble Company, Oracle
Corporation on its $600 million acquisition of a majority stake in
i-flex solutions, Oracle Corporation on its $5.85 billion
acquisition of Siebel Systems and Delta Air Lines on its Chapter
11 restructuring generally and in connection with the over $10
billion unsolicited bid from U.S. Airways.
Bjorn Bjerke, Esq. is a corporate lawyer focusing on complex
structured products and derivatives including asset-backed debt
instruments, fund linked instruments and credit based
arrangements. His recent transactions include representing a
large real-estate fund complex in a multi-billion dollar lending
arrangement, representing large financial institutions in
developing various fund-linked structures and derivative trading
platforms and establishing synthetic CDO structures. He also
represented ISDA as drafting counsel in connection with the 2006
ISDA Fund Derivatives Definitions and Delta Air Lines in
connection with certain financing arrangements linked to Delta Sky
Miles.
Mary Conway, Esq. is a tax lawyer concentrating in investment
management matters, including the formation and operation of
private equity funds, hedge funds, mutual funds and other pooled
investment vehicles. She has provided advice to Chilton
Investment Company, Credit Suisse, Crestview Partners, FrontPoint
Partners, HRJ Capital, Integrated Finance Limited, J.P. Morgan,
Magnetar Capital and Morgan Stanley, among others. Her practice
includes partnership matters and international tax matters.
Michael Davis, Esq. is a corporate lawyer concentrating in mergers
and acquisitions. The matters he has worked on recently include
advising IPSCO in connection with its proposed sale to SSAB
Sventskt Stal, Marsh & McLennan in connection with the proposed
sale of Putnam Investments to Great-West Lifeco, IPSCO on its
acquisition of NS Group, FrontPoint Partners on its sale to Morgan
Stanley; MCI on its sale to Verizon, Ford on its acquisition of
plants from, and the restructuring of its business relationship
with, Visteon, and various other private equity and venture
capital transactions.
Avi Gesser, Esq. is a litigator concentrating in securities class
actions and enforcement, white-collar criminal defense matters and
complex commercial cases. Currently, he is representing a major
investment bank in class actions involving analyst independence
issues. He also recently served as a lead negotiator of a multi-
year comprehensive agreement between a large consumer products
company and multiple governmental bodies related to international
trade issues. He has represented corporations and individuals in
various investigations that have been resolved favorably prior to
trial. He was also part of the litigation team representing Delta
Air Lines in its Chapter 11 restructuring.
Harald Halbhuber, Esq. is a corporate lawyer in the London office.
His practice focuses on a broad range of corporate finance and
mergers and acquisitions transactions. In corporate finance, he
has advised both issuers and underwriters on debt and equity
transactions. Most recently, he worked on several high-yield debt
issuances by European issuers. He has also worked on several
initial public offerings and rights offerings. His recent M&A
transactions include advising Morgan Stanley on acquisitions in
Russia, Italy and the U.K., and Carl Zeiss SMT in the structuring
of a joint venture with Cymer and the acquisition of a U.S.
nanotechnology company.
Kimberley D. Harris, Esq. is a litigator with extensive experience
representing corporate clients in a variety of criminal,
regulatory, and complex civil matters. Recent representations
include: the Audit Committee of an auto parts manufacturer in
connection with an internal investigation, as well as related
criminal and regulatory investigations by the federal government,
a major investment bank in connection with criminal and regulatory
investigations of the bank's IPO allocation practices, a former
director of the New York Stock Exchange in connection with an
investigation by the New York Attorney General and the SEC, and a
major pharmaceutical company in connection with multiple complex
civil class actions in both state and federal court.
Jinsoo H. Kim is a corporate lawyer concentrating in lending and
other corporate finance transactions. She represents corporate
clients and financial institutions in secured acquisition and
other leveraged financings, unsecured financings, debt
restructurings and exit financings. Recent representations
include Freeport-McMoran Copper & Gold in a $11 billion senior
secured financing in connection with its acquisition of Phelps
Dodge, J.P. Morgan in a $4.5 billion debtor-in-possession facility
for Delphi, Delta Air Lines in a $2.5 billion senior secured exit
financing, and Goldman Sachs Credit Partners and Credit Suisse in
a leveraged acquisition financing for Education Management.
James C. Lin, Esq. is a corporate lawyer in the Hong Kong office,
advising on public and private corporate finance transactions,
including initial public offerings, high-yield debt offerings and
private equity investments. He advised China Merchants Bank on
its $2.66 billion HKSE listing, Air China on its $1.24 billion
HKSE/LSE listing, and the underwriters in the privatization and
NYSE/HKSE listing of Aluminum Corporation of China. Mr. Lin has
also worked on several NASDAQ IPOs, including the $124 million
listing of Baidu.com and the $468 million listing of Himax
Technologies. He regularly advises a number of Asian high-
technology companies on U.S. law matters.
Arthur S. Long, Esq. is a corporate lawyer advising U.S. and
foreign banks on the regulatory implications of M&A transactions,
private equity investments, the offering of new financial
products, including derivatives, enforcement, compliance and bank
insolvency issues, and, in the case of foreign banks, establishing
U.S. offices. Representative matters he has worked on include
Banco Santander's investment in Sovereign Bancorp, SLM Corporation
on its proposed sale, the acquisition by Citizens Financial Group
of Charter One Financial, Citigroup's acquisition of Banamex,
Banco Bilbao Vizcaya's merger with Argentaria, and JPMorgan's
investment in KorAm Bank.
Mark M. Mendez, Esq. is a corporate lawyer focusing on equity
derivatives. Recently, he has advised Citigroup, Deutsche Bank
and Goldman Sachs as book-running managers of a $1.5 billion
offering by General Motors of convertible senior debentures and a
Citigroup affiliate on the related capped call transaction, CVS
Corporation in connection with a $2.5 billion collared accelerated
share repurchase, Montpelier Re Holdings in connection with two
variable share forward sale agreements, Morgan Stanley and Merrill
Lynch in connection with the issuance of debt securities
mandatorily exchangeable for shares of Class A common stock of
Nuveen Investments, and JPMorgan in connection with the Microsoft
Employee Stock Option Transfer Program.
Edmund Polubinski III, Esq. is a litigator representing
corporations and individuals in a wide range of securities,
professional liability, products liability, general commercial and
acquisition-related litigation in federal and state courts. He
also represents corporate and individual clients in investigations
and other proceedings before various regulatory agencies,
including the Securities and Exchange Commission, the Internal
Revenue Service, and the New York Stock Exchange. Recent matters
include the defense of an investment banking client in putative
class action antitrust litigations, the representation of a
corporate issuer and individual clients in class action securities
litigation and a related SEC investigation, the defense of a major
pharmaceutical company in nationwide consumer protection and
product liability litigation, and the representation through trial
of a big four accounting firm in litigation arising out of the
failure of a large national bank.
Lanny A. Schwartz, Esq. is a corporate lawyer advising on
securities compliance, regulatory and transactional matters. His
clients include major international banks, broker-dealers,
securities exchanges, consulting firms, a securities industry
trade association and a large life settlement provider. From 1999
to 2005, he was executive vice president and general counsel of
the Philadelphia Stock Exchange. Previously, he was managing
director and counsel at Bankers Trust Company, specializing in
bank and broker-dealer regulation and investment banking. He
speaks and writes regularly on securities market structure and
regulatory issues, and was formerly a member of the adjunct
faculty of Columbia University School of Law.
Sarah K. Solum, Esq. is a corporate lawyer in the Menlo Park
office, advising on capital markets transactions, mergers and
acquisitions, SEC disclosure and corporate governance. Recent
capital markets transactions include convertible debt offerings
for Cadence Systems, Cypress Semiconductor and Equinix, investment
grade debt offerings for Comcast, Oracle and Seagate, follow-on
offerings for Kaiser Aluminum, Wet Seal and Onyx Pharmaceuticals,
initial public offerings for Chipotle Mexican Grill and CAI
International, and McDonald's spin-out of Chipotle Mexican Grill.
Mergers and acquisitions she has worked on recently include
advising NetIQ on its sale to Attachmate WRQ and Oracle on its
acquisitions of Siebel Systems and PeopleSoft.
Mischa Travers, Esq. is a corporate lawyer in the Menlo Park
office, advising technology companies and their underwriters and
investors on mergers and acquisitions, securities offerings and
other corporate transactions. Recent matters he has worked on
include KLA-Tencor's acquisitions of ADE, Therma-Wave, SensArray
and OnWafer, Software AG's acquisition of webMethods; Affymetrix's
acquisition of ParAllele, Comcast's strategic partnership with
TiVo, a $2.25 billion debt offering by Comcast Corporation,
Affymax's initial public offering, convertible debt offerings by
Borland Software, Boston Properties, Informatica, Intel,
Macrovision and Xilinx, and various investments in private
companies by affiliates of Richemont.
About Davis Polk
Based in New York City, Davis Polk & Wardwell --
http://www.dpw.com/-- is an international law firm specializing
in corporate transactions. The firm's practice is organized into
four departments: Corporate, Litigation, Tax and Trusts and
Estates. The Corporate Department is further divided into three
major practice groups: Capital Markets, Mergers and Acquisitions,
and Credit, as well as a number of specialist groups. While not
formally divided into subgroups, the firm's Litigation Department
is preeminent in such areas as securities litigation and
compliance, white collar criminal defense, products liability and
mass torts, antitrust, insolvency and restructuring, professional
liability, banking, consumer actions, and directors' and officers'
liability.
* S&P Takes Various Ratings Actions on 63 Classes
-------------------------------------------------
Standard & Poor's Ratings Services took these rating actions on
various U.S. synthetic CDO transactions:
* raised 12 ratings and removed them from CreditWatch
positive;
* lowered 25 ratings and removed them from CreditWatch
negative;
* lowered 10 ratings and left them on CreditWatch negative;
* lowered eight ratings;
* affirmed seven ratings and removed them from CreditWatch
positive; and
* affirmed one rating and removed it from CreditWatch
negative.
If the SROC ratio was above 100% at the next higher rating level,
S&P raised the rating on the tranche. If the SROC ratio was lower
than 100% at the current date and at a 90-day-forward projected
date, S&P lowered the rating on the tranche. Ratings that S&P
affirmed had SROC ratios above 100% at the current rating levels.
Ratings List
ARES High Yield CSO Ltd.
Rating
------
Class To From
----- -- ----
C AA AA/Watch Pos
D AA AA/Watch Pos
E-1 A+ A/Watch Pos
E-2 A+ A/Watch Pos
G BBB BBB/Watch Pos
2C AA AA/Watch Pos
2D-1 AA AA/Watch Pos
2D-2 AA AA/Watch Pos
2E-1 A+ A/Watch Pos
2E-2 A+ A/Watch Pos
2G BBB BBB/Watch Pos
Cloverie PLC
Series 2006-008
Rating
------
Class To From
----- -- ----
Notes BBB BBB+/Watch Neg
Credit Default Swap
Swap Risk Rating-Protection Buyer, CDS Reference #NFDKW
Rating
------
Class To From
----- -- ----
Tranche BBB-srb BBBsrb
Credit Default Swap
Swap Risk Rating-Protection Buyer, CDS Reference #NFDKX
Rating
------
Class To From
----- -- -----
Tranche BBB-srb BBBsrb
Credit Default Swap
Swap Risk Rating-Protection Buyer, CDS Reference #NFDKY
Rating
------
Class To From
----- -- ----
Tranche BBB-srb BBBsrb
Credit Default Swap Between The Bank of Nova
Scotia & Script Securitisation Ltd.
Rating
------
Class To From
----- -- ----
Tranche Asrp AAsrp/Watch Neg
Credit Linked Notes Ltd.
Series 2006-1
Rating
------
Class To From
----- -- ----
Notes A/Watch Neg A+/Watch Neg
Crown City CDO 2005-1 Ltd.
Rating
------
Class To From
----- -- ----
C A-/Watch Neg A/Watch Neg
D BB+ BBB-/Watch Neg
E-1 BB-/Watch Neg BB/Watch Neg
E-2 BB-/Watch Neg BB/Watch Neg
Crown City CDO 2005-2 Ltd.
Rating
------
Class To From
----- -- ----
B-1 A+/Watch Neg AA/Watch Neg
B-2 A+/Watch Neg AA/Watch Neg
C BBB+ A/Watch Neg
D BB BBB-/Watch Neg
D-2 BB BBB-/Watch Neg
E BB- BB/Watch Neg
High Grade Structured Credit 2004-1 Ltd.
Rating
------
Class To From
----- -- ----
D A+ AA/Watch Neg
E A A+/Watch Neg
Kenmare 2005-I Ltd.
Rating
------
Class To From
----- -- ----
Notes A A+/Watch Neg
Morgan Stanley ACES SPC
Series 2006-33
Rating
------
Class To From
----- -- ----
E BB+ BB/Watch Pos
Morgan Stanley ACES SPC
Series 2006-37
Rating
------
Class To From
----- -- ----
Class IA BBB+ A-/Watch Neg
Class IB BBB+ A-/Watch Neg
Morgan Stanley ACES SPC
Series 2007-2
Rating
------
Class To From
----- -- ----
Class IA AA+ AAA/Watch Neg
Class IB AA+ AAA/Watch Neg
Morgan Stanley Managed ACES SPC
Series 2007-4
Rating
------
Class To From
----- -- -----
IIA AA- AA-/Watch Neg
Morgan Stanley ACES SPC
Series 2007-8
Rating
------
Class To From
----- -- ----
A1 AA AAA/Watch Neg
A2 AA AAA/Watch Neg
IA A+ AA/Watch Neg
IB A+ AA/Watch Neg
IIA A+/Watch Neg AA/Watch Neg
Morgan Stanley ACES SPC
Series 2007-11
Rating
------
Class To From
----- -- ----
Note BBB- BBB
Morgan Stanley ACES SPC
Series 2007-13
Rating
------
Class To From
----- -- ----
IIA AA+ AAA
IIB AA+ AAA
IIIA AA- AA
IIIB AA- AA
Oban Trust
Series 2006-1
Rating
------
Class To From
----- -- ----
IIA BBB+ A-/Watch Neg
Pallas SCDO 2002-1 Ltd.
Rating
------
Class To From
----- -- ----
B AAA AA/Watch Pos
C AA BBB-/Watch Pos
D BBB- BB+/Watch Pos
Prelude Europe CDO Ltd.
Series 2006-1
Rating
------
Class To From
----- -- ----
Notes A- A/Watch Neg
Prelude Europe CDO Ltd.
Series 2006-2
Rating
------
Class To From
----- -- ----
Notes A- A+/Watch Neg
Robania CDO Ltd.
Rating
------
Class To From
----- -- -----
B-1 A BBB+/Watch Pos
B-2 A BBB+/Watch Pos
B-3 A BBB+/Watch Pos
Rutland Rated Investments
Series 2006-2 (28)
Rating
------
Class To From
----- -- ----
Notes AAA AA+/Watch Pos
SPGS SPC
ABSpoke Portfolio I 2006-IIC
Rating
------
Class To From
----- -- ----
Var notes A- A/Watch Neg
Terra CDO SPC Ltd.
Series 2007-1 SEGREGATED PORT
Rating
------
Class To From
----- -- ----
A1 AA+/Watch Neg AAA/Watch Neg
B1 AA-/Watch Neg AA/Watch Neg
TIERS Alaska Floating Rate Credit Linked Trust
Series 2007-2
Rating
------
Class To From
----- -- ----
Certs BB BBB-/Watch Neg
TIERS Montana Floating Rate Credit Linked Trust
Series 2007-3
Rating
------
Class To From
----- -- ----
Certificate AA+ AAA/Watch Neg
Tribune Ltd.
Series 26
Rating
------
Class To From
----- -- ----
Aspen B-2 BBB BBB+/Watch Neg
Tribune Ltd.
Series 28
Rating
------
Class To From
----- -- ----
Aspen 2006-1 A-3 A/Watch Neg AA/Watch Neg
* 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 4P Fuels, L.L.P.
Bankr. D. Idaho Case No. 07-40471
Chapter 11 Petition filed June 20, 2007
See http://bankrupt.com/misc/idb07-40471.pdf
In Re Alfred V. Fraumeni, Jr., Inc.
Bankr. D. Mass. Case No. 07-13831
Chapter 11 Petition filed June 20, 2007
See http://bankrupt.com/misc/mab07-13831.pdf
In Re Blair Nationwide Trucking Company, Inc.
Bankr. E.D. Mich. Case No. 07-51982
Chapter 11 Petition filed June 20, 2007
See http://bankrupt.com/misc/mieb07-51982.pdf
In Re D.V. Hair Salon
Bankr. E.D. N.Y. Case No. 07-43325
Chapter 11 Petition filed June 20, 2007
See http://bankrupt.com/misc/nyeb07-43325.pdf
In Re Rising Star Enterprises, Inc.
Bankr. E.D. Penn. Case No. 07-13535
Chapter 11 Petition filed June 20, 2007
See http://bankrupt.com/misc/paeb07-13535.pdf
In Re Eagleview, L.L.C.
Bankr. W.D. Wash. Case No. 07-12827
Chapter 11 Petition filed June 20, 2007
See http://bankrupt.com/misc/wawb07-12827.pdf
In Re Step2 Techknowledgies Group, L.L.C.
Bankr. M.D. Fla. Case No. 07-02595
Chapter 11 Petition filed June 21, 2007
See http://bankrupt.com/misc/flmb07-02595.pdf
In Re Miracle Mechanical, L.L.C.
Bankr. E.D. Mich. Case No. 07-52104
Chapter 11 Petition filed June 21, 2007
See http://bankrupt.com/misc/mieb07-52104.pdf
In Re Keeping Kids First, Inc.
Bankr. D. Neb. Case No. 07-41189
Chapter 11 Petition filed June 21, 2007
See http://bankrupt.com/misc/neb07-41189.pdf
In Re Box Broadcasting Corp.
Bankr. E.D. Okla. Case No. 07-80688
Chapter 11 Petition filed June 21, 2007
See http://bankrupt.com/misc/okeb07-80688.pdf
In Re Premium Carpet Masters, Inc.
Bankr. N.D. Tex. Case No. 07-32915
Chapter 11 Petition filed June 21, 2007
See http://bankrupt.com/misc/txnb07-32915.pdf
In Re American Carbonics, Inc.
Bankr. S.D. Ala. Case No. 07-11664
Chapter 11 Petition filed June 22, 2007
See http://bankrupt.com/misc/alsb07-11664.pdf
In Re J.G. Corporation
Bankr. D. Mass. Case No. 07-13881
Chapter 11 Petition filed June 22, 2007
See http://bankrupt.com/misc/mab07-13881.pdf
In Re Providence Management, Inc.
Bankr. N.D. Miss. Case No. 07-12115
Chapter 11 Petition filed June 22, 2007
See http://bankrupt.com/misc/msnb07-12115.pdf
In Re Norman F Williams, Jr.
Bankr. W.D. Ark. Case No. 07-71925
Chapter 11 Petition filed June 25, 2007
See http://bankrupt.com/misc/arwb07-71925.pdf
In Re Aurora Property & Management, L.L.C.
Bankr. D. Ariz. Case No. 07-02962
Chapter 11 Petition filed June 25, 2007
See http://bankrupt.com/misc/azb07-02962.pdf
In Re E=MC2 Ventures, Inc.
Bankr. M.D. Fla. Case No. 07-02661
Chapter 11 Petition filed June 25, 2007
See http://bankrupt.com/misc/flmb07-02661.pdf
In Re Al's Best Electric, Inc.
Bankr. S.D. of N.Y. Case No. 07-11961
Chapter 11 Petition filed June 25, 2007
See http://bankrupt.com/misc/nysb07-11961.pdf
In Re Crompton Kennedy Fine Wine Purveyors, L.L.C.
Bankr. D. S.C. Case No. 07-03354
Chapter 11 Petition filed June 25, 2007
See http://bankrupt.com/misc/scb07-03354.pdf
In Re Commercial Structures and Interiors, Inc.
Bankr. E.D. Tex. Case No. 07-41366
Chapter 11 Petition filed June 25, 2007
See http://bankrupt.com/misc/txeb07-41366.pdf
In Re Allen George Heating & Air Conditioning, Inc.
Bankr. S.D. of Ga. Case No. 07-40946
Chapter 11 Petition filed June 26, 2007
See http://bankrupt.com/misc/gasb07-40946.pdf
In Re James E. Carson
Bankr. E.D. N.C. Case No. 07-02305
Chapter 11 Petition filed June 26, 2007
See http://bankrupt.com/misc/nceb07-02305.pdf
In Re L.V.N.R. Group, Inc.
Bankr. D. Nev. Case No. 07-13794
Chapter 11 Petition filed June 26, 2007
See http://bankrupt.com/misc/nvb07-13794.pdf
In Re D'Alessandri Property, L.L.C.
Bankr. W.D. Penn. Case No. 07-23993
Chapter 11 Petition filed June 26, 2007
See http://bankrupt.com/misc/pawb07-23993.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, Sheena Jusay, 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 ***