TCR_Public/070727.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, July 27, 2007, Vol. 11, No. 176

                             Headlines

ABENGOA BIOENERGY: Successful Start-Up Cues S&P's Positive Watch
ABLE ENERGY: Posts $1.6 Million Net Loss in Qtr. Ended Sept. 30
AK STEEL: Intends to Redeem $150 Million of 7-7/8% Senior Notes
ALPHA MEDIA: S&P Assigns Corporate Credit Rating at B
ALTERNATIVE LOAN: S&P Junks Ratings on Two Certificate Classes

AMERICAN COLOR: Vertis Merger Cues Moody's to Review Ratings
AMERICAN STEAMSHIP: Improved Capital Cues S&P's Positive Watch
ARVINMERITOR INC: To Close Ontario Assembly Operations
BANCO BGN: Moody's Puts Ratings Under Review and May Upgrade
BAUSCH & LOMB: Asks Advanced Medical to Revise Buyout Bid

BEST BRANDS: Moody's Junks Corporate Family Rating
CALIFORNIA HEALTH: Operating Losses Cues S&P to Cut Ratings to BB
CATHOLIC CHURCH: Davenport Taps R. Hughes as Insurance Consultants
CATHOLIC CHURCH: San Diego Can Appoint Unknown Claimants Rep.
CENTURY ALUMINUM: Incurs $60.7 Million Net Loss in Second Quarter

COBALT CMBS: S&P Rates $5.042 Million Class O Certificates at B-
COUDERT BROS: Disclosure Statement Hearing Moved to August 21
COVANTA HOLDING: Earns $37.7 Million in Quarter Ended June 30
CPM HOLDINGS: High Leveraged Financial Risk Cues S&P's B+ Rating
DADE BEHRING: Earns $50.3 Million in Second Quarter 2007

DADE BEHRING: Declares Quarterly Dividend of 5 Cents Per Share
DADE BEHRING: Inks Definitive Merger Agreement with Siemens AG
DAIMLERCHRYSLER: Banks to Pool Money to Raise Buyout Financing
DANA CORP: Court Approves USW & UAW Settlement Agreements
DEATH ROW: Tupac's Mom Wants Unreleased Songs Excluded from Sale

DELPHI CORPORATION: IUE-CWA Intends to Terminate Contracts
DELTA AIR: Earns $1.8 Billion in Second Quarter 2007
DEVELOPERS DIVERSIFIED: Earns $127.4 Million in Second Qtr. 2007
E*TRADE FIN'L: Earns $159 Million in Quarter Ended June 30
ELEC COMMUNICATIONS: May 31 Balance Sheet Upside-down by $6.7 Mil.

FHC HEALTH: S&P Retains Negative Watch on B Credit Rating
FORD MOTOR: Seeks Concessions as Labor Talks With UAW Start
FORSTER DRILLING: Posts $960,342 Net Loss in Qtr. Ended May 31
FRENCH LICK: Moody's Lowers Corporate Family Rating to Caa3
FRENCH LICK: S&P Lowers Corporate Credit Rating to CCC from CCC+

GENERAL MOTORS: Deal Hits Snag as Firms Shelve $3.1 Bil. Debt Sale
GENERAL MOTORS: Reports Global Second Quarter Sales
GENERAL MOTORS: Seeks Concessions as Labor Talks with UAW Start
GP INVESTMENTS: Fitch Revises Outlook to Positive from Stable
GRANDE COMM: Moody's Affirms Caa1 Corporate Family Rating

GREGG APPLIANCES: Completes Tender Offer for 9% Senior Notes
GSAMP TRUST: S&P Junks Rating on 2002-HE Class B-2 Certificates
GSI GROUP: Earns $3.3 Million in Quarter Ended June 29
HUNT REFINING: S&P's Rates $760 Million Term Loan at B+
IMAX CORP: S&P Affirms Ratings and Removes Negative CreditWatch

INTERNATIONAL COAL: Prices $180 Mil. of 9% Convertible Sr. Notes
INTERNATIONAL COAL: S&P Revises Outlook to Negative from Stable
KINDER MORGAN: S&P Rates $100MM Series A Preferred Stock at BB+
KNOLL INC: Moody's Withdraws Ba3 Rating on $500 Million Facility
LANDRY'S RESTAURANTS: Obtains Covenant Waiver from Lenders

LANDRY'S RESTAURANT: S&P Lowers Corporate Credit Rating to CCC
LANDRY'S RESTAURANT: Moody's Lowers Corporate Family Rating to B2
LAUREATE EDUCATION: Weak Cash Flow Cues S&P's B Credit Rating
MERRILL LYNCH: Fitch Affirms B- Rating on $1.3MM Class P Certs.
METHANEX CORP: Earns $35.7 Million in Quarter Ended June 30

NEWCASTLE CDO: S&P Rates $14 Million Class F Notes at BB
NEWFIELD EXPLORATION: Earns $150 Million in Second Quarter 2007
NOE FULINARA: Case Summary & 19 Largest Unsecured Creditors
OGLEBAY NORTON: S&P Places Ratings Under Developing CreditWatch
ORECK CORP: S&P Withdraws All Ratings at Company's Request

PILGRIM'S PRIDE: Declares 2-1/4 Cents Per Share Quarterly Dividend
PSS WORLD: Net Income Downs to $8.7 Mil. in Quarter Ended June 29
RESIDENTIAL ACCREDIT: Fitch Lowers Ratings on Four Cert. Classes
REYNOLDS AMERICAN: Earns $325 Million in Quarter Ended June 30
SAINT VINCENT'S: Creditors Vote to Accept Amended Plan

SAINT VINCENT'S: Inks Stipulation Resolving DASNY's Plan Objection
SOUNDVIEW HOME: Moody's Rates Class M-10 Certificates at Ba1
SPECIALTY UNDERWRITING: Losses Prompt S&P to Lower Ratings
SPECTRUM BRANDS: Global Operations President K. Biller to Retire
SYNCHRONOUS AEROSPACE: Moody's Rates Proposed $95 Mil. Loan at B2

SYNCHRONOUS AEROSPACE: S&P Rates Proposed $95MM Facility at B
TEXAS SOUTHERN: Moody's Cuts Bond's Rating to Ba3 & Retains Watch
VERTIS INC: American Color Merger Cues Moody's to Review Ratings
WR GRACE: Judge Fitzgerald Okays Sale of Washcoat Business
WR GRACE: Responds to Exclusive Periods Extension Plea Objections

WELLMAN INC: Posts $11.4 Million Net Loss in Qtr. Ended June 30
WELLS FARGO: Fitch Rates $2.5 Million Class B-7 Certs. at B
XEROX CORP: Earns $266 Million in Quarter Ended June 30

* BOOK REVIEW: Bankruptcy: A Feast for Lawyers

                             *********

ABENGOA BIOENERGY: Successful Start-Up Cues S&P's Positive Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch listing
on Abengoa Bioenergy of Nebraska LLC's 'B-' rating to positive
from developing following the successful start-up of the project's
88 million gallon per year ethanol plant.  The rating is on the
company's $90 million senior secured term bank loan.

In May 2007, the rating was lowered to 'B-' from 'B' and placed on
CreditWatch with developing implications due to significant delays
in construction and the increasing concern that the project would
not be able to service debt before construction was complete.

Through change orders in the engineering, procurement, and
construction contract, incentive payments retained when
construction milestones were not met, liquidated damages, and
support from the project sponsor, Abengoa S.A., the project was
able to make all interest payments during construction.  The
project expects to service all debt through cash flow from plant
operations.  However, the construction delay forced the project to
enter the market in a low crush spread environment.  Also, the
plant will not reach final completion until after the summer
driving season.

"The revenue lost due to the six-month construction delay could
have been used to pay down debt and will likely cause higher
refinancing risk at the bonds' maturity," said Standard & Poor's
credit analyst Justin Martin.

The CreditWatch will be resolved when the plant begins full
operations and can provide cash flow to the project.  The rating
would be raised if the project can prove it can service debt with
cash flow from operations.  The rating would be affirmed if the
project remains in distress due to low crush spreads in the market
relative to other rated ethanol plants.


ABLE ENERGY: Posts $1.6 Million Net Loss in Qtr. Ended Sept. 30
---------------------------------------------------------------
Able Energy Inc. reported a net loss of $1.6 million on net sales
of $12.8 million on net sales of $12.8 million for the first
quarter ended Sept. 30, 2006, compared with a net loss of
$1.5 million on net sales of $13.1 million for the same period
ended Sept. 30, 2005.

The decrease in net sales can be attributed primarily to the
reduction in on road diesel fuel sales.  The increase in net loss
is directly related to an increase in selling, general and
administrative expenses, offset by a decrease in amortization
expense and decrease in other expenses.

At Sept. 30, 2006, the company's consolidated balance sheet showed
$16.2 million in total assets, $15.0 million in total liabilities,
and $1.2 million in total stockholders' equity.

The company's consolidated balance sheet at Sept. 30, 2006, also
showed strained liquidity with $10.0 million in total current
assets available to pay $11.3 million in total current
liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?21d1

                       Going Concern Doubt

Marcum & Kliegman LLP expressed substantial doubt about Able
Energy Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended June 30, 2006.  The auditing firm reported that the
company has incurred losses from continuing operations of
approximately $6.2 million, $2.2 million and $1.7 million during
the years ended June 30, 2006, 2005 and 2004, and in additionn the
company has used cash from operations of approximately $1.7
million for the year ended June 30, 2006, and has a working cpital
deficiency of approximately $432,000 at June 30, 2006.

                        About Able Energy

Headquartered in Rockaway, New Jersey, Able Energy Inc., (Other
OTC: ABLE.PK) -- http://www.ableenergy.com/-- through its
subsidiaries, distributes and provides services relating to home
heating oil, propane gas, kerosene, and diesel fuels.  The company
also offers complete heating, ventilation and air conditioning
installation and repair and other services and also markets other
petroleum products to commercial customers, including on-road and
off-road diesel fuel, gasoline, and lubricants.  Its current
subsidiaries are Able Oil Company Inc., Able Energy New York Inc.,
Able Oil Melbourne Inc., Able Energy Terminal LLC, and
PriceEnergy.com Inc.


AK STEEL: Intends to Redeem $150 Million of 7-7/8% Senior Notes
---------------------------------------------------------------
AK Steel Corp. will redeem the remaining $150 million of its
outstanding 7-7/8% Senior Notes Due Feb. 15, 2009.  AK Steel
redeemed $225 million of the original $450 million of notes on
March 2, 2007 and another $75 million on May 31, 2007.

AK Steel would consider redeeming the remaining notes during or
before the first quarter of 2008.

The company said the redemption of the remaining $150 million of
the notes will be funded from the company's existing cash
reserves, and is expected to be completed in August 2007.

AK Steel said it expects to incur a non-cash, pre-tax charge of
approximately $0.6 million in the third quarter of 2007 related to
this action.

However, the company expects to realize a net, pre-tax interest-
related benefit of $1.5 million in 2007, and approximately
$4.3 million in 2008, as a result of the completion of the
redemption of the notes.

"Enhancing shareholder value by reducing our debt to strengthen
our balance sheet continues to be a high priority for AK Steel,"
James L. Wainscott, chairman, president and CEO, said.

                       About AK Steel Corp.

Headquartered in Middletown, Ohio, AK Steel Corp. (NYSE: AKS) --
http://www.aksteel.com/-- produces flat-rolled carbon, stainless
and electrical steels, as well as tubular steel products for the
automotive, appliance, construction and manufacturing markets.

                           *     *     *

Moody's Investor Services assigned B1 rating on AK Steel Corp.'s
long term corporate family rating and probability of default on
Sept. 2006.  The outlook is stable.

Standard and Poor's rated the company's long term foreign and
local issuer credit B+ on July 2003.  The outlook is stable.


ALPHA MEDIA: S&P Assigns Corporate Credit Rating at B
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating and stable outlook to Alpha Media Group Inc., a
holding company formed by private-equity concern Quadrangle
Capital Partners to acquire Dennis Publishing Inc.

At the same time, Standard & Poor's assigned its 'B+' bank loan
rating, one notch higher than the corporate credit rating on Alpha
Media, and '2' recovery rating to the company's $135 million
first-lien bank facility, indicating that lenders can expect
substantial (70%-90%) recovery in the event of a payment default.
The facility consists of a $15 million revolving credit facility
maturing in 2012 and a $120 million term loan B maturing in 2014.

S&P also assigned a 'CCC+' bank loan rating, two notches lower
than the corporate credit rating, and recovery rating of '6' to
the company's $40 million second-lien term loan due 2015,
indicating our expectation of negligible (0%-10%) recovery in the
event of a payment default.

Proceeds will be used to fund Quadrangle's acquisition of Dennis
Publishing for $244 million, representing a 7.6x multiple of
trailing 12-month adjusted EBITDA at March 31, 2007.  The New
York-based magazine publisher will have pro forma total debt of
$160 million as of March 31, 2007.

"The rating reflects the company's earnings concentration, with
Maxim, the largest of its three magazines, accounting for nearly
all of its profits," said Standard & Poor's credit analyst
Hal F. Diamond.

Further key issues are strong competition in the men's-lifestyle
magazine niche from the Internet and other entertainment sources.
These factors are only partially offset by the competitive
position of Maxim.


ALTERNATIVE LOAN: S&P Junks Ratings on Two Certificate Classes
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class B-3 mortgage pass-through certificates from Alternative Loan
Trust's series 2004-J1 and 2004-J8.  Concurrently, S&P removed the
two lowered ratings from CreditWatch with negative implications.
Furthermore, S&P affirmed its ratings on the other classes from
these two transactions.

The lowered ratings reflect a reduction in both current and
projected credit support.  Projected credit support reflects
actual credit support reduced by projected losses on current
delinquencies.

As of the June 2007 distribution date, the accumulation of
realized losses had caused credit support in each series to fall
to less than 30% of its original amount.  Cumulative losses range
from 0.10% (series 2004-J1) to 0.29% (series 2004-J8) of the
original pool balances. In addition, 90-plus-day delinquencies
range from 1.85% (series 2004-J1) to 3.79% (series 2004-J8) of the
current pool balances.

The rating affirmations are based on credit support percentages
that are sufficient to maintain the current ratings on these
securities.

The collateral backing these transactions consists of Alt-A
mortgage loans.  Credit support is provided by subordination.


       Ratings Lowered and Removed from Creditwatch Negative

                      Alternative Loan Trust
                Mortgage pass-through certificates

                                         Rating
                                         ------
            Series    Class          To             From
            ------    -----          --             ----
            2004-J1   B-3            CCC            B/Watch Neg
            2004-J8   B-3            CCC            BB/Watch Neg

                         Ratings Affirmed

                       Alternative Loan Trust
                 Mortgage pass-through certificates

          Series     Class                        Rating
          ------     -----                        ------
          2004-J1    1-A1, 1-X, 2-A-1             AAA
          2004-J1    2-X, PO                      AAA
          2004-J1    M                            AA
          2004-J1    B-1                          A
          2004-J1    B-2                          BBB
          2004-J8    1-A1, 1-X, 2-A-1             AAA
          2004-J8    2-X, 3-A-1, 3-X              AAA
          2004-J8    4-A-1, 4-X, PO-A             AAA
          2004-J8    PO-B, IO                     AAA
          2004-J8    M                            AA
          2004-J8    B-1                          A
          2004-J8    B-2                          BBB


AMERICAN COLOR: Vertis Merger Cues Moody's to Review Ratings
------------------------------------------------------------
Moody's Investors Service placed the ratings of American Color
Graphics Inc. under review for possible downgrade following the
announcement that the company plans to merge with Veris Inc.

Details of the rating action are:

American Color Graphics, Inc.

  -- $280 million senior secured second priority notes due 2010 -
     Caa2

  -- Corporate Family rating - Caa2

  -- Probability of Default rating - Caa2

The review for possible downgrade reflects Moody's expectation of
a recapitalization as well as heightened concern regarding the
companies' weak financial metrics, strained liquidity and the
pressure of approaching debt maturities.

The rating review will consider:

   i. the probability that the companies will successfully
      conclude the proposed merger;

  ii. the likelihood that debt holders will face losses if the
      expected recapitalization involves an exchange of notes at
      less than full value, or if debtholders interests are
      otherwise compromised; and

iii. the ability of ACG to fund its near- term interest expense
      obligations and the ability of both companies to fund
      scheduled maturities of principal, absent a restructuring.

Vertis and ACG recently announced that both have signed a non-
binding letter of intent to merge their businesses.  Management of
both companies expect to conclude a definitive merger agreement by
Aug. 13, 2007, which will be subject to the amendment, refinancing
or payment in full of the companies' senior secured credit
facilities and the successful exchange of the companies'
outstanding notes.  Management expects that the merger will result
in significant synergies.

American Color Graphics, Inc., a leading provider of print and
pre-media services, recorded sales of $445 million for the FYE
period ended March 31, 2007. The company is based in Brentwood,
Tennessee.


AMERICAN STEAMSHIP: Improved Capital Cues S&P's Positive Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' counterparty
credit and financial strength ratings on American Steamship Owners
Mutual Protection & Indemnity Assoc. on CreditWatch with positive
implications.

"The rating action primarily reflects American Steamship's
significantly improved statutory capital of $31.3 million as of
year-end 2006, compared with $8.4 million in 2005," said Standard
& Poor's credit analyst Siddhartha Ghosh.  "In addition, the
ratings action reflects management's commitment to maintaining the
company's capital prospectively, both on a risk adjusted and
absolute basis."

Standard & Poor's is currently in the process of conducting a
detailed rating review of the company, which is expected to be
completed within the next few weeks.  Upon such review, the
company's financial strength rating could be raised by a notch to
'BB-'.


ARVINMERITOR INC: To Close Ontario Assembly Operations
------------------------------------------------------
ArvinMeritor Inc. would close its Commercial Vehicle Systems
assembly operation in St. Thomas, Ontario, Canada by Nov. 23,
2007.

The closure is part of restructuring actions in North America and
Europe which the company expects to affect 13 plants and 2,800
employees, resulting in an estimated annual run rate savings of
$130-$140 million by 2012.

The facility in St. Thomas employs 17 people, and serves as an
assembly site of the company's drivelines. Operations based in St.
Thomas will be transferred to ArvinMeritor's facility in
Laurinburg, North Carolina.

Employees were advised of the closure today during a meeting at
the facility.  ArvinMeritor will offer outplacement support and
severance and benefits packages to affected employees.

"Actions like these are never easy, but are necessary because of
the highly competitive nature of the motor vehicle industry,"
Wayne Watson, general manager, Operations, North America, said.
"The company must have a global manufacturing footprint that
optimizes capacity, reduces costs, and creates the greatest level
of customer service."

"The closure of St. Thomas is in no way a reflection of our fine
workforce," Brad Ducharme, site manager at the St. Thomas facility
said.  Our employees are talented and highly skilled individuals
who have worked hard to support our customers."

                      About ArvinMeritor Inc.

Based in Troy, Michigan, ArvinMeritor Inc. (NYSE: ARM) --
http://www.arvinmeritor.com/-- supplies integrated systems,
modules and components serving light vehicle, commercial truck,
trailer and specialty original equipment manufacturers and certain
aftermarket.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 28, 2007,
Moody's Investors Service has upgraded ArvinMeritor's senior
secured bank debt rating to Baa3, LGD2, 13% from Ba1, LGD2, 20%
and affirmed the company's Corporate Family Rating of Ba3,
Speculative Grade Liquidity rating of SGL-2, and stable outlook.


BANCO BGN: Moody's Puts Ratings Under Review and May Upgrade
------------------------------------------------------------
Moody's Investors Service placed the Ba3 global local and foreign
currency long term deposit ratings of Banco BGN S.A. under review
for possible upgrade.  Moody's also placed the bank's A2.br
national scale deposit rating on review for possible upgrade.

The rating action follows the announcement that BGN has signed an
agreement with BNP Paribas Group, through its consumer finance arm
Cetelem in Brazil, to sell 100% of its outstanding shares.  The
transaction remains subject to due diligence by BNP Paribas as
well as to approval by the regulatory authorities.

The action reflects Moody's view of the potential support of the
bank's liabilities from its new ultimate parent, BNP Paribas and
its direct owner, Cetelem.  The rating review will focus on the
assessment of the level of support.

Moody's maintained the stable outlook on BGN's D- bank financial
strength rating.  The agency said that BGN's well-established
position in payroll lending -- where it ranks as the nation's 13th
largest originator of such loans -- should add diversity to
Cetelem's operations in Brazil.  Cetelem has been active in the
local consumer finance segment since 1999.

As of March 2007, BGN had total assets of about R$1.57 billion
($763 billion) and equity of R$130million ($64 million).

These ratings were placed on review for possible upgrade:

-- Long-term local currency deposit rating: Ba3

-- Long-term foreign currency deposit rating: Ba3

-- Long-term national scale rating: A2.br

This rating outlook remains unchanged:

-- Bank Financial Strength Rating: D- (D minus), with stable
   outlook


BAUSCH & LOMB: Asks Advanced Medical to Revise Buyout Bid
---------------------------------------------------------
William H. Waltrip, the chairman of a special committee of the
Board of Directors of Bausch & Lomb Incorporated, sent a letter
Tuesday asking Advanced Medical Optics to revise its offer to buy
Bausch & Lomb.

In July 2007, Advanced Medical proposed to acquire 100% of the
outstanding shares of Bausch & Lomb in a merger in which Bausch &
Lomb's shareholders would receive, per share of Bausch & Lomb
stock, $45.00 in cash and $30.00 in AMO stock.

In his letter, Mr.  Waltrip noted that "without further assurances
as to value and certainty of consummation and, in particular,
without concrete, credible evidence that holders of a significant
percentage of the outstanding AMO shares would affirmatively
support the proposed acquisition of Bausch & Lomb by AMO, the
Special Committee and the Board intend to revoke AMO's designation
as an excluded party under [a merger agreement with] Warburg
Pincus."

Mr.  Waltrip also emphasized that any proposed increase in the fee
that would be payable by AMO in the event the transaction did not
close due to failure to obtain AMO shareholder approval should be
accompanied by an opinion of counsel that such fee is legally
payable in light of the known opposition of at least one
significant shareholder to the proposed transaction.

Bausch & Lomb is expecting additional information from AMO no
later than 12:00 p.m., Eastern time, today, July 27, 2007.

                          Warburg Pincus Deal

In May 2007, Bausch & Lomb entered into a definitive merger
agreement with Warburg Pincus, pursuant to which Warburg Pincus
agreed to acquire 100% of the outstanding shares of Bausch & Lomb
for $65.00 per share in cash.

Pursuant to the Warburg Pincus merger agreement, AMO has been
designated as an "excluded party," thus permitting Bausch & Lomb,
subject to certain conditions, to continue negotiating with AMO
with respect to the AMO proposal despite the end of the "go shop"
period, so long as AMO remains an "excluded party."

                             FTC Approval

Reuters said in a July 10, 2007 report that affiliates of
Warburg Pincus have received U.S. antitrust approval to acquire
Bausch & Lomb.

Citing the U.S. Federal Trade Commission, Reuters said antitrust
authorities completed their review of the deal without taking any
action to block it.

                          About Bausch & Lomb

Headquartered in Rochester, New York, Bausch & Lomb Inc. (NYSE:
BOL) -- http://www.bausch.com/-- develops, manufactures, and
markets eye health products, including contact lenses, contact
lens care solutions, and ophthalmic surgical and pharmaceutical
products.  The company is organized into three geographic
segments: the Americas; Europe, Middle East, and Africa; and Asia
(including operations in India, Australia, China, Hong Kong,
Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan and
Thailand).  In Latin America, the company has operations in Brazil
and Mexico. "In Europe, the company maintains operations in
Austria, Germany, the Netherlands, Spain, and the United Kingdom.

                           *     *     *

As reported in the Troubled Company Reporter on July 12, 2007,
Standard & Poor's Ratings Services said its 'BB+' corporate
credit and senior secured ratings on Bausch & Lomb Inc. remain
on CreditWatch with negative implications in light of the
July 5, 2007 acquisition bid by Advanced Medical Optics Inc.

As reported in the Troubled Company Reporter on May 18, 2007,
Moody's Investors Service stated that it will continue its review
of Bausch & Lomb Incorporated's ratings for possible downgrade
following the announcement that the company has entered into a
definitive merger agreement with affiliates of Warburg Pincus.

Ratings subject to review for possible downgrade include the
company's Ba1 Corporate Family rating and Ba1 Probability of
Default rating.

In addition, the Warburg Pincus deal prompted Fitch to maintain
its Negative Rating Watch on the company.  Fitch also warned that
the transaction would significantly increase leverage and likely
result in a multiple-notch downgrade, including an Issuer Default
Rating of no higher than 'BB-'.


BEST BRANDS: Moody's Junks Corporate Family Rating
--------------------------------------------------
Moody's Investors Service downgraded Best Brands Corporation's
corporate family rating to Caa1 from B3, and lowered the ratings
on the company's first and second lien senior secured credit
facilities.  The ratings remain under review for possible
downgrade.  The company's LGD assessments are also subject to
change.

The downgrade reflects Moody's continued concern that an agreement
has not been reached between the company and its lenders regarding
the request for a second waiver and amendment to its credit
facilities, which would cure the violation for late delivery of
its 2006 financial statements and the likely violation of
financial covenants for the second quarter ending June 30, 2006.

The company is required to report compliance within 30 days of
each reporting period.  Moody's also remains concerned about the
ongoing lack of visibility regarding the motivation of the
company's lender group.

Moody's review will focus on

   i. the company's ability to obtain amendments to its credit
      facilities in order to avoid covenant defaults;

  ii. its ability to comply with the revised covenants and
      maintain certain access to liquidity over the near-term once
      an agreement is reached;

iii. the likely behavior of the company's various constituencies,
      including vendors, lenders and shareholders; and

  iv. the outlook for improving financial performance and debt
      reduction.

Ratings downgraded:

Best Brands Corporation:

-- Corporate family rating to Caa1 from B3

-- Probability of default rating to Caa1 from B3

-- $30 million first-lien revolving credit facility due 2011 to
    B3 from B2

-- $170 million first-lien Term Loan B due 2012 to B3 from B2

-- $75 million second-lien Term Loan due 2013 to Caa3 from Caa2

Headquartered in Minnetonka, Minnesota, Best Brands Corporation,
parent company is Value Creation Partners, Inc., is a leading
manufacturer and distributor of specialty bakery products in the
US, with pro forma revenues for 2006 approaching $500 million.


CALIFORNIA HEALTH: Operating Losses Cues S&P to Cut Ratings to BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'BB' from
'BB+' on the California Health Facilities Financing Authority's
outstanding revenue debt, issued for Good Samaritan Hospital.
Operating losses have continued, and despite improved
reimbursement and increased state support, management projects
that operating losses will continue.  As a result, coverage of
maximum annual debt service remains low.  The outlook is stable.

"In addition to our concerns about persistent operating losses and
low coverage, the rating also reflects Good Samaritan's
economically challenging service area," said Standard & Poor's
credit analyst Geraldine Poon.  "While there is evidence of
increased commercial and residential development, the high
uninsured population remains challenging and the hospital remains
reliant on state support."

Management has preliminary capital plans for a medical office
building and additional surgical capacity; an associated financing
would also restructure Good Samaritan's debt, resulting in slight
reduction of MADS, but would increase leverage.  Good Samaritan is
fortunate in that it does not have significant capital spending
needs to meet California seismic regulations, and annual capital
expenditures are expected to be $10 million-$12 million, or
approximately 100% of depreciation.  Good Samaritan closed on the
sale of more than four acres of land for $45 million.  These
proceeds will support the construction costs of a medical office
building.  Management is in the preliminary stages of developing a
fundraising campaign and expects that there is significant
potential on this front.  Debt-to-capitalization remains high at
75%.  However, at this lower rating level, it is likely that Good
Samaritan could issue additional debt to fund the medical office
building and surgery projects without a further rating impact.

Good Samaritan is a 408-bed tertiary hospital located in downtown
Los Angeles.  The hospital's major service line is cardiology,
including cardiothoracic surgery.  Other specialties include
orthopedics, neurosciences, ophthalmology, and women's services --
which have increased since the county stopped providing obstetrics
services.  Good Samaritan derives 42% and 16% of annual net
patient service revenue from Medicare and MediCal, respectively.
Good Samaritan receives approximately $19 million in annual
Medicare disproportionate share hospital funds, and has secured,
along with a coalition of other providers, additional DSH payments
from the state.  Management expects this state support to
continue.


CATHOLIC CHURCH: Davenport Taps R. Hughes as Insurance Consultants
------------------------------------------------------------------
The Diocese of Davenport seeks authority from the U.S. Bankruptcy
Court for the Southern District of Iowa to employ Robert Hughes
Associates, Inc., as its insurance consultants.  Robert Hughes
specializes in providing assistance to entities that are
researching and analyzing historical liability insurance
coverage.

Richard A. Davidson, Esq., at Lane & Waterman LLP, in Davenport,
Iowa, relates that the Diocese is doing its best to obtain
information about historical insurance policies and coverage,
which includes issuing subpoenas to known insurers and searching
available records.  However, the process is very specialized and
complex, and the Diocese believes it requires assistance from
experienced insurance consultants to ensure that a thorough
review of the Diocese's insurance assets has been conducted.

Mr. Davidson informs the Court that Robert Hughes was previously
employed by the Archdiocese of Portland in Oregon in its
bankruptcy proceedings.  Through the collaborative efforts of the
Archdiocese and its insurance counsel and consultants, very
substantial amounts were obtained from insurance carriers after a
complete and thorough review and analysis of Portland's
historical liability insurance coverage.

In Davenport's case, the Diocese needs Robert Hughes to provide
consulting services to locate and reconstruct liability insurance
coverage from secondary evidence, which the Diocese has located
for the periods from the 1950s through 1968, Mr. Davidson
relates.  He adds that the Diocese will collaborate with the
Official Committee of Unsecured Creditors and the U.S. Trustee's
Office to develop  secondary evidence and to establish the
existence of liability coverage under policies, which have been
previously lost or misplaced.

A $5,000 retainer will be paid to Robert Hughes, Mr. Davidson
informs the Court.  For its services, the firm's professionals
will paid based on these hourly rates:

            Robert N. Hughes          $500
            Olie Jolstad              $300
            Michele Martin            $250

Robert Hughes will also be reimbursed for reasonable, out-of-
pocket expenses.

Mr. Hughes assures the Court that the firm holds no adverse
interest against the Diocese and is a "disinterested person"
within the meaning of Section 101 of the Bankruptcy Code.

                   About Diocese of Davenport

The Diocese of Davenport in Iowa filed for chapter 11 protection
(Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006.
Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the
Davenport Diocese in its restructuring efforts.  Hamid R.
Rafatjoo, Esq., and Gillian M. Brown, Esq., of Pachulski Stang
Zhiel Young Jones & Weintraub LLP represent the Official Committee
of Unsecured Creditors.  In its schedules of assets and
liabilities, the Davenport Diocese reported $4,492,809 in assets
and $1,650,439 in liabilities.

Davenport's exclusive period to file a plan will expire on
Aug. 15, 2007.  Its exclusive period to solicit acceptances of
its plan will expire on Oct. 14, 2007.  (Catholic Church
Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: San Diego Can Appoint Unknown Claimants Rep.
-------------------------------------------------------------
The Hon. Louise DeCarl Adler of the U.S. Bankruptcy Court for the
Southern District of California authorizes The Roman Catholic
Bishop of San Diego to appoint a legal representative for unknown
or future tort claimants who will represent all claimants (i) who
are minors, (ii) who have repressed memory of sexual abuse, and
(c) who know they were abused as minors but who have not
discovered, or who reasonably should not have discovered, the
causal connection between their injury and the sexual abuse.

Judge Adler clarifies that the Unknown Claims Representative will
not represent those claimants who know they were abused and have
discovered the causal connection between their injury and the
abuse, but who decline to assert their claims by the Bar Date
because of shame or desire not to come forward.  Judge Adler
notes that these victims know they have claims, and the Bar Date
is meaningless if it tells these victims that they need not come
forward by the Bar Date's expiration.

In addition, the Unknown Claims Representative will not represent
victims whose claims have already lapsed under California law as
of the Petition Date, Judge Adler says.  The Court does not have
the power to revive claims that are time-barred under state law
as of the Debtor's bankruptcy filing.

                   About the San Diego Diocese

The Roman Catholic Diocese of San Diego in California --
http://www.diocese-sdiego.org/-- employs approximately
3,000 people in various areas of work.  The Diocese filed for
Chapter 11 protection just before commencement of the first of
court proceedings for 140 sexual abuse lawsuits filed against the
Diocese.  Authorities of the San Diego Diocese said they were not
in favor of litigating their cases.

The San Diego Diocese filed for chapter 11 protection on Feb. 27,
2007 (Bankr. S.D. Calif. Case No. 07-00939).  Gerald P. Kennedy,
Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents
the Diocese.  In its schedules of assets and liabilities, the
Diocese listed total assets of $152,510,888 and total liabilities
of $72,754,092.  On March 27, 2007, the Debtor filed its plan and
disclosure statement.  The Diocese's exclusive period to file a
chapter 11 plan of reorganization expired June 27, 2007.  The
Diocese however has asked the Court to extend its exclusive plan-
filing period.

(Catholic Church Bankruptcy News, Issue No. 96; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


CENTURY ALUMINUM: Incurs $60.7 Million Net Loss in Second Quarter
-----------------------------------------------------------------
Century Aluminum Company reported a net loss of $60.7 million for
the second quarter of 2007.  Reported second quarter results were
negatively impacted by an after-tax charge of $125.1 million for
mark-to-market adjustments on forward contracts that do not
qualify for cash flow hedge accounting and by a non-cash after-tax
charge of $2 million for the early extinguishment of debt.
Quarterly results were positively impacted by a tax benefit of
$4.3 million related to the increase in the carrying amount of
deferred tax assets as a result of a state tax law change. The
dilutive effect of the convertible notes, options and service-
based awards would reduce basic EPS by $0.13.

In the second quarter of 2006, the company reported net income of
$45.8 million, which included an after-tax charge of $19.5 million
for mark-to-market adjustments on forward contracts that do not
qualify for cash flow hedge accounting.

                  Second Quarter 2007 Highlights

--  Strong operating earnings were generated on revenues of
    $464 million, which increased 3.7% from record levels set in
    the first quarter of 2007.

--  All primary aluminum facilities operated at or above capacity.

--  The first cells of the 40,000 tonne expansion of the
    Grundartangi, Iceland smelter were energized on July 2.  The
    project remains on schedule and budget for a fourth quarter,
    2007 completion.

--  Century signed a definitive agreement with Icelandic electric
    power suppliers Hitaveita Sudurnesja and Orkuveita Reykjavikur
    for the supply of electrical power to the new aluminum smelter
    project to be built near Helguvik, Iceland.  These contracts
    provide for the supply of power for approximately 250,000
    tonnes of aluminum production.

--  A memorandum of understanding was signed with the Guangxi
    Investment Group Company to explore the feasibility of
    developing a project including a high purity aluminum
    reduction plant and related bauxite and alumina facilities in
    the Guangxi Zhuang Autonomous Region in China.

Sales in the second quarter of 2007 were $464 million, compared
with $406 million in the second quarter of 2006.  Shipments of
primary aluminum for the quarter totaled 188,650 tonnes compared
with 171,715 tonnes in the year-ago quarter, reflecting the impact
of the Grundartangi expansion to 220,000 tonnes, which was
completed in the fourth quarter of 2006.

For the first half of 2007, the company reported net income of
$3.6 million, which includes an after-tax charge of $125.1 million
for mark-to-market adjustments on forward contracts that do not
qualify for cash flow hedge accounting.

Sales in the first six months of 2007 were $911.7 million compared
with $752.9 million in the same period of 2006. Shipments of
primary aluminum for the first six months of 2007 were 373,272
tonnes compared with 328,666 tonnes for the comparable 2006
period.

At June 30, 2007, the company's balance sheet showed total assets
of $2.5 billion, total liabilities of $1.9 billion, and total
stockholders' equity of $601.2 million.

The company held unrestricted cash of $187.7 million and
restricted cash of $2 million at June 30, 2007.

"We made important progress on our long-term initiatives during
the quarter," said president and chief executive officer Logan W.
Kruger.  "The continuing expansion of Grundartangi remains on
schedule and budget. At our Helguvik greenfield project, we signed
contracts with each of our two power supply partners and advanced
the various permitting processes.  In addition, we raised equity
capital for the plant's construction and became the first U.S.
company to list its shares on the stock exchange in Iceland."

                  About Century Aluminum Company

Headquartered in Monterey, California, Century Aluminum Company
(NASDAQ:CENX) -- http://www.centuryca.com/-- owns and operates a
244,000 mtpy plant at Hawesville, Kentucky; a 170,000 mtpy plant
at Ravenswood, West Virginia; and a 90,000 mtpy plant at
Grundartangi, Iceland.  The company also owns a 49.67% interest in
a 222,000 mtpy reduction plant at Mt. Holly, South Carolina.
ALCOA Inc. owns the remainder of the plant and is the operating
partner.  Century also holds a 50% share of the 1.25 million mtpy
Gramercy Alumina refinery in Gramercy, Louisiana and related
bauxite assets in Jamaica.

                          *      *     *

Century Aluminum Company carries Moody's Investors Service Ba3
corporate family and probability-of-default ratings, and B1 senior
unsecured debt rating.  The ratings outlook remains stable.

The company also carries Standard & Poor's BB- long-term foreign
and local issuer credit ratings.  The ratings outlook remains
stable.


COBALT CMBS: S&P Rates $5.042 Million Class O Certificates at B-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Cobalt CMBS Commercial Mortgage Trust 2007-C3's
$2.01 billion commercial mortgage pass-through certificates series
2007-C3.

The preliminary ratings are based on information as of July 25,
2007.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.

The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
fiscal agent, the economics of the underlying loans, and the
geographic and property type diversity of the loans.  Classes A-1,
A-1A, A-2, A-3, A-4, A-J, A-M, A-PB, B, C, and D are currently
being offered publicly. Standard & Poor's analysis determined
that, on a weighted average basis, the pool has a debt service
coverage of 1.17x, a beginning LTV of 124.3%, and an ending LTV of
120.1%.


                   Preliminary Ratings Assigned
           Cobalt CMBS Commercial Mortgage Trust 2007-C3

                                              Recommended
       Class        Rating        Amount     credit support
       -----        ------        ------     --------------
       A-1          AAA         $13,910,000     30.000%
       A-2          AAA        $107,675,000     30.000%
       A-3          AAA         $93,863,000     30.000%
       A-PB         AAA         $45,466,000     30.000%
       A-4          AAA        $783,039,000     30.000%
       A-1A         AAA        $367,811,000     30.000%
       IO*          AAA      $2,016,804,393         --
       A-M          AAA        $201,680,000     20.000%
       A-J          AAA        $153,781,000     12.375%
       B            AA          $40,336,000     10.375%
       C            AA-         $20,168,000      9.375%
       D            A           $25,211,000      8.125%
       A-4FL        AAA                 TBD     30.000%
       A-MFL        AAA                 TBD     20.000%
       A-JFL        AAA                 TBD     12.375%
       E            A-          $20,168,000      7.125%
       F            BBB+        $25,210,000      5.875%
       G            BBB         $22,689,000      4.750%
       H            BBB-        $25,210,000      3.500%
       J            BB+          $7,563,000      3.125%
       K            BB           $5,042,000      2.875%
       L            BB-         $10,084,000      2.375%
       M            B+           $5,042,000      2.125%
       N            B            $2,521,000      2.000%
       O            B-           $5,042,000      1.750%
       P            NR          $35,293,393      0.000%

        * Interest-only class with a notional amount.
                 TBD -- To be determined.
                     NR -- Not rated


COUDERT BROS: Disclosure Statement Hearing Moved to August 21
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
moved the hearing to approve the disclosure statement describing
Coudert Brothers LLP's Chapter 11 Plan of Liquidation from June
15, 2007,  to Aug. 21, 2007, Bill Rochelle of Bloomberg News
reports.

In March 2007, Coudert filed with the Court a Chapter 11 Plan of
Liquidation stating that on the effective date of that Plan, the
liquidation trust agreement will be executed by the Debtor and the
liquidation trustee.  Also on that date, all the estate's assets
will vest in the liquidation trust free and clear of all liens,
claim and encumbrances.

The Debtor and the Creditors Committee will jointly pick the
liquidation trustee 15 days before the confirmation hearing.

If a dispute arises, the Court will select from the candidates
submitted by the Debtor and the Committee.

                        Treatment of Claims

Under the Plan, each holder of Secured Claims and Priority
Non-Tax Claims will be paid in full.  At the Liquidation
Trustee's option, these holders will receive:

     i. cash;

    ii. non-recourse conveyance of the Debtor's interest
        and the collateral securing the their claims; or

   iii. less favorable treatment as agreed to by the holders
        and the liquidation trustee.

Holders of General Unsecured Claims and Partner Non-Profit Claims
will receive a pro rata share of the unsecured creditor fund.

In the event there exists any disputed Secured, Priority Non-Tax,
General Unsecured, and Partner Non-Profit claims, the liquidation
trustee must maintain cash in an amount equal to the portion of
the disputed claims reserve.

On the effective date, Convenience Claim holders will receive
cash in an aggregate amount equal to a percentage of the allowed
amount determined by the Debtor before the solicitation of the
Plan.

In addition, holders of Convenience, General Unsecured, and
Partner Profit Claims will be paid from the Unsecured Creditors
fund.

Holders of Insured Malpractice Claims will be paid solely
from the proceeds of any applicable policy with respect to the
insured portion of the claim.  This holder will not receive any
distribution from the Unsecured Creditor fund.

Each holder of Partner Profit Claims, if any, will receive the
Debtor's surplus.

Holders of Interests will get nothing under the Plan.

The Unsecured Creditor Fund is the cash derived from Participating
Party Settlement Proceeds, liquidation of assets, and causes of
action recoveries, less any distributions or reserves on account
of Secured Claims, Administrative Claims, Priority Tax Claims,
Priority Non-Tax Claim, and Estate Expenses.

Participating Party Settlement Proceeds refers to cash that the
Liquidation Trustee received from a participating party under a
participating party agreement.

                     About Coudert Brothers

Coudert Brothers LLP was an international law firm specializing in
complex cross border transactions and dispute resolution.  The
firm had operations in Australia and China.  The Debtor filed for
Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case
No. 06-12226).  John E. Jureller, Jr., Esq., and Tracy L.
Klestadt, Esq., at Klestadt & Winters, LLP, represent the Debtor
in its restructuring efforts.  Brian F. Moore, Esq., and David J.
Adler, Esq., at McCarter & English, LLP, represent the Official
Committee Of Unsecured Creditors.  In its schedules of assets and
debts, Coudert listed total assets of $29,968,033 and total
debts of $18,261,380.


COVANTA HOLDING: Earns $37.7 Million in Quarter Ended June 30
-------------------------------------------------------------
Covanta Holding Corporation had net income of $37.7 million for
the second quarter ended June 30, 2007, as compared with
$51.2 million for the second quarter ended June 30, 2006.

Total operating revenues that grew 6% to $355 million for the
three months ended June 30, 2007, up from $334 million in the
prior year comparative period.

The company's domestic waste and energy operating revenues grew 5%
to $301 million, driven primarily by contractual service fee
escalations, construction revenues related to the Hillsborough
County facility expansion and two facilities added to the
company's portfolio this year; the Harrisburg Energy-from-Waste
facility and the Holliston transfer station.  International
revenues of $52 million grew by 17% primarily due to higher
electricity sales at both Indian facilities.

                        Six Months Results

For the six months ended June 30, 2007, total company operating
revenues rose 7% to $685 million.  Covanta Energy's net income for
the six months ended June 30, 2007, was $19.8 million.

At June 30, 2007, the company listed $4.3 billion total assets,
$3.4 billion total liabilities, $43.6 million minority interest,
and $895.3 million stockholders' equity.

A full-text copy of the company's second quarter report is
available for free at http://ResearchArchives.com/t/s?21d6

"The second quarter was marked by solid operating performance and
tangible progress on our growth initiatives that position us to
take advantage of promising opportunities around the world," said
Anthony Orlando, president and chief executive officer of Covanta.
"Notably, we signed a 10 year agreement to operate the Harrisburg
Energy-from-Waste facility, completed our joint venture to enter
the Energy-from-Waste market in China, announced the acquisition
of two biomass renewable energy facilities in California, and
received a Letter of Intent to design, build and operate a 1,700
ton per day Energy-from-Waste facility in Dublin, Ireland."

                          About Covanta

Headquartered in Fairfield, New Jersey, Covanta Holding Corp.
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad.  Covanta has operations in the
Philippines, China, Costa Rica, India, and Bangladesh.

                          *     *     *

The company carries Standard & Poor's Ratings Services' BB-
corporate credit rating with a stable outlook.  It also carries
Moody's Investors Service's Ba2 Corporate Family Rating.


CPM HOLDINGS: High Leveraged Financial Risk Cues S&P's B+ Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Waterloo, Iowa-based agricultural equipment
supplier CPM Holdings Inc.  The outlook is stable.

At the same time, Standard & Poor's assigned its 'B+' bank loan
rating and a '3' recovery rating to subsidiary CPM Acquisition
Corp.'s proposed $210 million first-lien term loan and
$25 million first-lien revolving credit facility, indicating an
expectation of meaningful (50%-70%) recovery in event of a payment
default.  The term loan is used to acquire substantially all
assets of Crown Holdings, Inc. and to refinance CPM's existing
debt.

"The ratings reflect CPM's highly leveraged financial risk profile
characterized by somewhat high debt levels and its exposure to
cyclical agricultural equipment markets and to volatile commodity
prices.  This is partially offset by CPM's leading position in
niche markets and by its fair geographic diversification," said
Standard & Poor's credit analyst Robert
Wilson.


DADE BEHRING: Earns $50.3 Million in Second Quarter 2007
--------------------------------------------------------
Dade Behring Holdings, Inc. reported second quarter earnings of
$50.3 million, an increase of 42% over the same quarter in 2006,
and also reported revenue of $480.8 million, an increase of 8.2%.

Earnings for the six months ended June 2007 was $90.4 million, an
increase of 33% over the similar period in 2006, and six-month
revenue increased 9.3% to $940 million, representing 6.1% growth
on a constant currency basis.

"Our strong financial performance is directly related to our
people and their ability to consistently execute our customer
excellence business strategy," said Jim Reid-Anderson, Chairman,
President and CEO, Dade Behring said.  "We are highly focused on
providing world-class products and service to our 25,000 clinical
laboratory customers around the globe."

Cash flow from operations, after investing activities and excess
tax benefits from stock-based compensation, was $56 million and
$106 million for the quarter and six months ended June 30, 2007,
respectively.

                     Stock Repurchase Program

During the quarter, the company repurchased $122 million of its
common stock, and during the first six months of the year it
repurchased $179 million of its shares.  Since the inception of
its share repurchase plan in the third quarter of 2005, the
company has repurchased $583 million or 15% of the outstanding
shares.  As of June 30, 2007, 600,000 shares remain authorized for
repurchase under the current program.

In the second quarter, the company recorded a $3.1 million tax
benefit related to a reduction in the company's reserve for
uncertain tax positions, which favorably impacted earnings per
share by $0.04.

                     Operational Highlights

U.S. revenue grew 5.8% and 6.9% over the second quarter and first
six months of 2006, respectively.  Revenue outside of the United
States grew 4.8% and 5.6% for the similar periods on a constant
currency basis.

Global core-product reagent, service and operating lease revenue
grew 3.8% in the second quarter and 5.4% for the first six months
of the year, on a constant currency basis.

Operating income, as a percent of sales, was 16.8% and 16.3% for
the quarter and six months ended June 30, 2007.

Headquartered in Deerfield, Illinois, Dade Behring Holdings Inc.
-- http://www.dadebehring.com/-- engages in the manufacture and
distribution of diagnostics products and services to clinical
laboratories worldwide.

                          *     *     *

The company carries Moody's Investors Service Ba1 Corporate Family
Rating with a Stable Outlook.


DADE BEHRING: Declares Quarterly Dividend of 5 Cents Per Share
--------------------------------------------------------------
Dade Behring Holdings, Inc.'s board of directors has declared its
tenth consecutive cash dividend.  Shareholders of record as of
Aug. 31, 2007 will receive five cents per common share of stock,
payable on Sept. 17, 2007.

Headquartered in Deerfield, Illinois, Dade Behring Holdings Inc.
-- http://www.dadebehring.com/-- engages in the manufacture and
distribution of diagnostics products and services to clinical
laboratories worldwide.

                          *     *     *

The company carries Moody's Investors Service Ba1 Corporate Family
Rating with a Stable Outlook.


DADE BEHRING: Inks Definitive Merger Agreement with Siemens AG
--------------------------------------------------------------
Dade Behring Holdings, Inc. and Siemens AG have entered into a
definitive merger agreement under which Siemens will acquire all
of the outstanding shares of Dade Behring for $77 per share in
cash.

Pursuant to the agreement, Siemens is expected to commence a
tender offer for any and all outstanding shares of Dade Behring
common stock by Aug. 8, 2007.  The board of directors of Dade
Behring has voted unanimously to recommend to holders of Dade
Behring common stock that they tender their shares in the tender
offer.  The tender offer is subject to various conditions,
including the tender of a majority of the shares of Dade Behring
common stock in the tender offer and the receipt of regulatory
approvals.  Following the completion of the tender offer, the
parties will cause a subsidiary of Siemens to merge with Dade
Behring

As a result of the merger, Dade Behring will become a wholly-owned
subsidiary of Siemens and all outstanding shares of Dade Behring
common stock will be converted into the right to receive the same
consideration paid in the tender offer.  The agreement contains
customary terms and conditions.  The transaction is expected to
close within three to six months.

"Combined, Dade Behring and Siemens will have the potential to
become uniquely positioned as the largest provider of clinical
diagnostic products and services in the world," Jim Reid-Anderson,
Chairman, President and CEO, Dade Behring, said.  "We will
continue to serve our clinical laboratory customers with the same
care and commitment that we always have, by providing innovative
products and outstanding service that meets their needs. Dade
Behring's customer excellence business strategy has been the
foundation of our success, and as part of Siemens Medical
Solutions Diagnostics, the combined businesses will continue to
follow that same strategy into the future."

"The planned acquisition of Dade Behring complements our current
capabilities and offers us the unique opportunity to assemble an
unparalleled portfolio of products and services, and together
become the world market leader in comprehensive clinical
laboratory diagnostics," Erich R. Reinhardt, member of the
Managing Board of Siemens AG and President & CEO of Siemens
Medical Solutions, explained.

Headquartered in Deerfield, Illinois, Dade Behring Holdings Inc.
-- http://www.dadebehring.com/-- engages in the manufacture and
distribution of diagnostics products and services to clinical
laboratories worldwide.

                          *     *     *

The company carries Moody's Investors Service Ba1 Corporate Family
Rating with a Stable Outlook.


DAIMLERCHRYSLER: Banks to Pool Money to Raise Buyout Financing
--------------------------------------------------------------
Bankers for DaimlerChrysler AG's Chrysler Group deferred a
$12 billion sale of debt to investors as part of a buyout
severing Chrysler from its German parent, The Wall Street
Journal reports.

According to WSJ, rather than fund the operations of the
newly independent auto maker with money raised from loans,
as planned, the underwriters of the deal -- five banks led
by J.P. Morgan Chase & Co. -- will have to provide much of
the money themselves, at least until the market settles
down.

The New York Times relates that executives at the automaker's
parent company said the financing problem will not affect
the purchase of the Chrysler Group by the private equity firm
Cerberus Capital Management, which signed to buy an 80% stake in
the U.S. Arm.

Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX)
(FRA:DCX) -- http://www.daimlerchrysler.com/-- develops,
manufactures, distributes, and sells various automotive
products, primarily passenger cars, light trucks, and commercial
vehicles worldwide.  It primarily operates in four segments:
Mercedes Car Group, Chrysler Group, Commercial Vehicles, and
Financial Services.

The company's worldwide operations are located in Canada,
Mexico, United States, Argentina, Brazil, Venezuela, China,
India, Indonesia, Japan, Thailand, Vietnam, and Australia.

The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names.  It also sells parts and
accessories under the MOPAR brand.

The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles.  At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant price concessions.  In addition, increased interest
rates caused higher sales & marketing expenses.

In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.


DANA CORP: Court Approves USW & UAW Settlement Agreements
---------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York granted approval of the
settlement agreements between Dana Corporation and each of the
United Steel Workers and the United Auto Workers, as well as an
investment agreement with Centerbridge Capital Partners, L.P., for
a major investment in the company.

As reported in the Troubled Company Reporter on July 9, 2007, the
agreements consist of:

   -- A settlement agreement with each of the United Steel Workers
      and the United Auto Workers, which will lower Dana's labor
      costs and replace the company's health care and long-term
      disability obligations for retirees and employees
      represented by these unions with Voluntary Employees'
      Beneficiary Association trusts to which Dana will contribute
      in aggregate approximately $700 million in cash, less
      certain benefit payments made prior to the effective date of
      the company's plan of reorganization, and approximately
      $80 million in common stock of the reorganized Dana;

   -- An agreement with Centerbridge Capital Partners, L.P., and
      its affiliates on the terms under which the firm will invest
      up to $500 million in cash for convertible preferred stock
      in the reorganized Dana and facilitate an additional
      investment by other investors of up to $250 million in
      convertible preferred stock; and

   -- A plan support agreement with the USW, the UAW, and
      Centerbridge, under which these parties will support a plan
      of reorganization filed by Dana that includes both the labor
      settlements and the Centerbridge investment agreement.

The judge also approved a plan support agreement with the USW, the
UAW, and Centerbridge, under which these parties will support a
plan of reorganization filed by Dana that includes both the labor
settlements and the Centerbridge investment agreement.

Under terms of the investment agreement, Centerbridge will
purchase up to $500 million of convertible preferred stock of the
reorganized Dana and facilitate an additional investment of up to
$250 million in convertible preferred stock.

"We are pleased with the Court's approval of these agreements,
which we believe preserves significant value for all of our
constituents," Dana Chairman and CEO Mike Burns said.  "The
developments support Dana's long-term success and keep our company
on the path to file our reorganization plan by the beginning of
September and to emerge from bankruptcy by year end as a
competitive and sustainable business."

Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- (OTC
Bulletin Board: DCNAQ) designs and manufactures products for every
major vehicle producer in the world, and supplies drivetrain,
chassis, structural, and engine technologies to those companies.
Dana employs 46,000 people in 28 countries.  Dana is focused on
being an essential partner to automotive, commercial, and off-
highway vehicle customers, which collectively produce more than 60
million vehicles annually.

The company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  As of Sept. 30,
2005, the Debtors listed $7,900,000,000 in total assets and
$6,800,000,000 in total debts.

Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in
Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors.  Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker.  Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer.

Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  Fried,
Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the
Official Committee of Equity Security Holders.  Stahl Cowen
Crowley, LLC serves as counsel to the Official Committee of
Non-Union Retirees.

The Debtors' exclusive period to file a plan expires on Sept. 3,
2007.  They have until Nov. 2, 2007, to solicit acceptances of
that plan.


DEATH ROW: Tupac's Mom Wants Unreleased Songs Excluded from Sale
----------------------------------------------------------------
Afeni Shakur, mother of the late rapper Tupac Shakur, filed an
adversary complaint with the U.S. Bankruptcy Court for the Central
District of California against Death Row Records Inc., according
to various news reports.  Ms. Shakur hopes to stop the Debtor from
including unreleased songs of Tupac in a bankruptcy sale.

According to the reports, Donald N. David, Esq., General Counsel
for Amaru Entertainment and co-administrator of the Tupac Shakur
Estate, contends that the Debtor violated a 1997 Death Row
Agreement, stating that all unreleased songs physically housed in
the data vaults at Death Row Records, would become the rightful
property of the Tupac Shakur Estate.

Mr. David disclosed that the Estate's administrators were
surprised that a bankruptcy court assessment of Death Row's assets
revealed an album's worth of unreleased songs of Tupac being
herald to potential buyers, various papers said.

Headquartered in Compton, California, Death Row Records Inc.
-- http://www.deathrowrecords.net/-- is an independent record
producer.  The company and its owner, Marion Knight, Jr., filed
for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif.
Case No. 06-11205 and 06-11187).  Daniel J. McCarthy, Esq.,
at Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq.,
represent the Debtors in their restructuring efforts.  R. Todd
Neilson serves as Chapter 11 Trustee for the Debtors' estate.
When the Debtors filed for protection from their creditors,
they listed total assets of $1,500,000 and total debts of
$119,794,000.


DELPHI CORPORATION: IUE-CWA Intends to Terminate Contracts
----------------------------------------------------------
The International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers Division of the Communications
Workers of America notified Delphi Corp. of its intent to
terminate its local and national contracts with the auto parts
maker in a July 18, 2007 letter.  The action comes as talks over
a new national agreement have dragged on concerning key issues,
including job security, wages, and benefits.

"Delphi has not delivered proposals that meet our members'
needs," said IUE-CWA President Jim Clark.  "From the start we
have stated that IUE-CWA members want both their jobs and dignity
intact at the end of the process.  We are tired of spinning our
wheels in negotiations while Delphi falls short of these basic
demands."

The termination notice is the first step toward a national strike
by the IUE-CWA at Delphi.  Under the terms of the national
agreement, the notice allows the locals to strike effective 12:01
a.m. on October 13, 2007.

"There is still much time to change our course," said IUE-CWA
Automotive Conference Board Chairman Willie Thorpe.  "But we
cannot sit back and be unprepared.  In our estimation, given the
current state of talks, a strike is a real possibility and we
need to act accordingly."

As part of the termination notice, IUE-CWA also revoked its
permission for Delphi to continue to use temporary employees in
IUE-CWA represented facilities.

"The union had allowed temporary workers as a goodwill gesture as
long as talks toward an acceptable contract were progressing.
Hopefully with this action progress may improve," explained Mr.
Clark.

According to the IUE-CWA, Delphi has the option of reducing
production output or hiring the workers as permanent.  In most
cases, the cut-off takes place in two weeks.

The IUE-CWA represents more than 2,000 Delphi workers.

                        About Delphi Corp.

Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ)
-- http://www.delphi.com/-- is the single largest global supplier
of vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology.  The
company's technology and products are present in more than 75
million vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors.  As of
Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.  The Debtors'
exclusive plan-filing period expires on Dec. 31, 2007.

(Delphi Corporation Bankruptcy News, Issue No. 77; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).


DELTA AIR: Earns $1.8 Billion in Second Quarter 2007
----------------------------------------------------
Delta Air Lines reported combined results for the quarter ended
June 30, 2007. Key points include:

    * Delta's second quarter pre-tax income was $1.9 billion.
      Excluding reorganization and related items, pre-tax income
      was $373 million, a nearly $200 million improvement
      compared to the prior year period.

    * Delta's operating income for the June 2007 quarter was
      $490 million, the company's fifth consecutive quarterly
      operating profit, reflecting an operating margin of 9.8
      percent.  Excluding reorganization and related items,
      operating income was $499 million, and operating margin
      was 10.0 percent.

    * In the June 2007 quarter Delta generated $1.1 billion in
      free cash flow.  As of June 30, 2007, Delta had $3.7
      billion in cash, cash equivalents and short-term
      investments, of which $3.4 billion was unrestricted. The
      company's undrawn revolving credit facility provides an
      additional $1 billion in unrestricted liquidity.

    * Delta accrued $79 million in profit sharing for the June
      2007 quarter, in recognition of the achievements of all
      Delta employees toward meeting the company's financial
      targets.

Delta reported pre-tax income of $1.9 billion in the second
quarter of 2007, compared to a pre-tax loss of $2.2 billion in
the second quarter of 2006.  Given its significant net operating
loss carry forwards (NOLs) which will be used to offset
substantially all cash income tax obligations in the foreseeable
future, Delta believes pre-tax earnings is a more meaningful
measure of financial performance.

Net income for the June 2007 quarter was $1.8 billion.  Excluding
the reorganization and related items, net income was $274 million.

"Delta's emergence from bankruptcy was a significant milestone in
the history of the company and the airline industry," said Gerald
Grinstein, Delta's chief executive officer.  "In delivering the
kind of outstanding financial, operational and customer service
results we saw this quarter, it is clear Delta people at every
level are producing a strong airline with a bright future."

                     Fresh Start Reporting

Upon emergence from bankruptcy on April 30, 2007, the company
adopted fresh start reporting.  Under fresh start reporting, Delta
revalued its assets and liabilities to preliminarily estimated
current market values and changed the accounting for its SkyMiles
frequent flyer program.  These non-cash adjustments significantly
impacted Delta's balance sheet, statement of operations and
statement of cash flows.  As a result, Delta's financial
statements on and after May 1, 2007 are not comparable to its
previously issued financial statements.

                     Financial Performance

Strong passenger demand, together with Delta's network
restructuring and revenue management initiatives, drove operating
revenue of $5.0 billion for the June 2007 quarter, representing
an increase of $262 million or 5.5 percent compared to the prior
year period.  The increase includes a $42 million benefit,
primarily impacting passenger revenue, from fresh start
adjustments related to a change in accounting for Delta's
frequent flyer program.

Delta's consolidated passenger unit revenue (PRASM) was 11.78
cents, an increase of 5.6% in the June 2007 quarter compared to
the same period in 2006.  Excluding the impact of the fresh start
adjustments related to a change in accounting for the frequent
flyer program, consolidated PRASM increased 4.6%.

Delta's international PRASM grew 9.7% year over year, with trans-
Atlantic markets producing an 11.1% PRASM improvement on an 11.8%
increase in capacity, and Latin American markets producing a 6.7%
increase in PRASM on a 23.8% increase in capacity.  Domestic
markets also showed solid PRASM performance, with domestic PRASM
up 5.7% on 4.8% lower capacity.  Delta's mix of domestic versus
international capacity was 65% and 35%, respectively in June 2007,
as compared to 77 percent and 23 percent, respectively in June
2005.

Based on the most recent available ATA data for the year-to-date
period ended May 31, 2007, Delta's consolidated length of haul
adjusted PRASM was 96% of the industry average PRASM (excluding
Delta), up from 86% in 2005 and on track with Delta's target of
closing the gap to the industry by the end of 2008.

For the June 2007 quarter, Delta's operating expenses increased
3%, or $141 million, versus the prior year period.  The increase
was due to $79 million in profit sharing expense, $36 million in
non-cash expense from fresh start adjustments, $26 million in non-
cash compensation expense related to emergence awards, and higher
expenses related to a 1% increase in capacity.  These increases
were partially offset by lower fuel price and benefits from
restructuring initiatives.  For the same period, non-operating
expenses declined 27%, or $52 million, due primarily to improved
cash flows and lower effective interest rates.

Delta's reported mainline unit cost (CASM) in the second quarter
of 2007 was 10.41 cents, an increase of 1.8% compared to the
second quarter of 20065.  Excluding expenses from profit sharing
and bankruptcy-related professional fees, mainline non-fuel CASM
was 6.93 cents, a decline of 0.6%.

                           Liquidity

At June 30, 2007, Delta had $3.7 billion in cash, cash equivalents
and short-term investments, of which $3.4 billion was
unrestricted.  Delta also has an additional $1 billion in
unrestricted liquidity available under its undrawn revolving
credit facility.

During the June 2007 quarter, Delta generated $1.1 billion in free
cash flow, which included more than $170 million in capital
expenditures reinvested in its business.

                  June 2007 Quarter Highlights

The June 2007 quarter included several significant events for
Delta.  In addition to emerging from bankruptcy on April 30, Delta
continued the positive momentum from its restructuring,
demonstrating its continued commitment to providing the best
products and services to its customers while creating value for
investors by:

    * Completing its $2.5 billion exit financing facility, which
      includes an industry leading $1 billion revolving credit
      facility, and repaying its $2.1 billion debtor-in-
      possession financing loans;

    * Beginning trading of its common stock on May 3rd on the
      New York Stock Exchange under the ticker symbol DAL;

    * Increasing its unrestricted cash reserves by approximately
      $800 million by amending its Visa/Mastercard credit card
      processing agreement to provide for return of the
      previously required holdback;

    * Earning, for the second consecutive year, a ranking in the
      top two among network carriers in the JD Power Customer
      Satisfaction Survey;

    * Completing the conversion of eight B767-400 aircraft from
      domestic to international service, to continue its
      international expansion strategy.  International routes
      launched during the June 2007 quarter include new service
      from Atlanta to Dubai, Prague, Seoul, and Vienna and from
      New York-JFK to Bucharest and Pisa;

    * Confirming an additional order for a B777-LR aircraft, and
      announcing the planned installation of winglets on more
      than 60 Boeing 737-NG, 757-200 and 767-300ER aircraft over
      the next 2 years;

    * Completing its redesigned, state-of-the-art lobby at
      Hartsfield-Jackson Atlanta International Airport to
      provide its customers with a faster, more convenient
      check-in process;

    * Opening a dedicated check-in facility at Terminal 2 at New
      York-JFK, offering the only exclusively premium check-in
      facility at that airport; and

    * Unveiling its new corporate brand and livery, which
      features the new all-red Delta "widget" to recognize
      Delta's rich heritage and highlight the company's bold,
      new identity.

"The June quarter results announced today include $1.1 billion in
free cash flow showing solid evidence that our plan is working.
As a result of our strong operating performance, we're pleased to
report that we accrued $79 million in profit sharing for the
quarter that we expect will be paid to employees early next year
to reward them for all their hard work," said Edward H. Bastian,
Delta's executive vice president and chief financial officer.
"Our turnaround continues to take hold, but is not complete - we
must remain vigilant in driving revenue and cost improvements,
especially in light of increasing fuel prices."

                    Operational Performance

Based on the most recent available DOT data for the year-to-date
period ended May 31, 2007, Delta ranks first of the network
carriers in on-time performance.  In addition, exchange carrier
data for the month of June 2007 indicates similar rankings through
the end of the second quarter.  Delta's June 2007 quarter
completion factor was 99.1 percent.

"Delta people continue to step up to day-to-day operational
challenges and have again achieved top tier operational
performance, which is even more impressive when considered against
the severe weather and record load factors during the quarter,"
said Jim Whitehurst, Delta's chief operating officer.  "This drive
to deliver excellent customer service was recognized in Delta's
second place ranking of the network carriers - for the second year
in a row - in the JD Power Customer Satisfaction Survey."

                Reorganization and Related Items

In the second quarter of 2007, Delta recorded income of
$1.5 billion from reorganization and related items, primarily due
to the discharge of claims and liabilities in connection with its
bankruptcy proceedings and the adoption of fresh start reporting.

In the second quarter of 2006, Delta recorded a $2.4 billion
charge for reorganization items primarily related to the allowed
general, unsecured pre-petition claim in conjunction with changes
to the Delta pilot collective bargaining agreement.

                          Fuel Hedging

During the June 2007 quarter, Delta hedged 48% of its fuel
consumption resulting in an average fuel price per gallon of
$2.05. Due to fresh start accounting eliminating much of the
hedge benefits toward fuel costs, the average reported fuel price
per gallon was $2.09 for the June 2007 quarter.  Delta realized
approximately $40 million in cash gains on fuel hedge contracts
settled during the quarter.

As of July 18, 2007, Delta has hedged 21% of its projected fuel
consumption for the September 2007 quarter utilizing heating oil
collars with an average cap of $1.80.

                     DELTA AIR LINES, INC.
         Unaudited Consolidated Statement of Operations
                        (Unaudited)
                       (in millions)

                                    (Predecessor)  (Successor)
                                      One Month    Two Months
                                        Ended         Ended
                                      April 30,      June 30,
                                         2007         2007
                                       -------      -------

OPERATING REVENUE:
Passenger:
  Mainline                              $1,046       $2,338
  Regional affiliates                      349          760
Cargo                                       36           82
Other, net                                 124          268
                                       -------      -------
Total operating revenue                  1,555        3,448

OPERATING EXPENSES:
Salaries and related costs                 345          694
Aircraft fuel                              322          790
Contract carrier arrangements              239          530
Depreciation and amortization               95          193
Contracted services                         83          160
Landing fees and other rents                60          122
Passenger commissions
  and other selling expenses                78          175
Aircraft maintenance materials
  and outside repairs                       82          165
Aircraft rent                               20           36
Passenger service                           24           61
Other                                       62           98
Profit sharing                               -           79
                                       -------      -------
Total operating expenses                 1,410        3,103
                                       -------      -------
OPERATING INCOME                           145          345

OTHER (EXPENSE) INCOME:
Interest expense                           (62)        (120)

Interest income                              4           33
Miscellaneous, net                          (2)           9
Total other expense, net                   (60)         (78)
                                       -------      -------
INCOME BEFORE REORGANIZATION ITEMS, NET     85          267

REORGANIZATION ITEMS, NET                1,515            -
                                       -------      -------
INCOME (LOSS) BEFORE INCOME TAXES        1,600          267

INCOME TAX (PROVISION) BENEFIT               4         (103)
                                       -------      -------
NET INCOME (LOSS)                       $1,604         $164
                                       =======      =======

                        About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities.  (Delta Air Lines
Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.
On Jan 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on Feb. 2,
2007.  On Feb. 7, 2007, the Court approved the Debtors' disclosure
statement.  In April 25 2007, the Court confirmed the Debtors'
plan.
                         *     *     *

As reported in the Troubled Company Reporter on July 16, 2007,
Fitch Ratings has initiated coverage of Delta Air Lines, Inc.
(NYSE: DAL) with the assignment of these debt ratings:
Issuer Default Rating 'B'; First-lien senior secured credit
facilities 'BB/RR1'; and Second-lien secured credit facility (Term
Loan B) 'B/RR4'

As reported in the Troubled Company Reporter on May 2, 2007,
Standard & Poor's Ratings Services raised its ratings on Delta Air
Lines Inc. (B/Stable/--), including raising the corporate credit
rating to 'B', with a stable outlook, from 'D', following the
airline's emergence from Chapter 11 bankruptcy proceedings.


DEVELOPERS DIVERSIFIED: Earns $127.4 Million in Second Qtr. 2007
----------------------------------------------------------------
Developers Diversified Realty Corporation reported total revenues
of $255.4 million for the second quarter ended June 30, 2007, as
compared with $189 million for the second quarter ended June 30,
2006.  The company had net income of $127.4 million for the second
quarter, up from net income of $78.7 million for the second
quarter ended June 30, 2006.

For the first six months of fiscal year 2007, the company had
total revenues of $476.3 million, as compared with $380 million
for the comparable period a year ago.  The company had net income
of $190 million, as compared with $128.5 million for the
comparable period a year ago.

At June 30, 2007, the company had total assets of a $8.9 billion,
total liabilities of $5.5 billion, minority interest of
$116.1 million, and total stockholders' equity of $3.4 billion.

Scott Wolstein, DDR's chairman and chief executive officer,
stated, "We're pleased to announce this quarter's results, which
reflect the consistent performance of our core portfolio and the
successful execution of several strategic transactions.  Now, five
months after closing the IRRETI acquisition, we have completed all
of the major objectives we previously announced to the market,
which, in turn, have accomplished our primary goal: to complete a
large, accretive transaction in a manner that improves portfolio
quality and overall leverage ratios."

                        Financial Results

For the three-months ended June 30, 2007, FFO, a widely accepted
measure of a Real Estate Investment Trust performance, available
to common shareholders was $159.3 million, as compared to
$109.8 million for the three-months ended June 30, 2007, and 2006,
respectively, an increase of 45.1%.  Net income available to
common shareholders was $111.4 million for the three-months ended
June 30, 2007, as compared to $64.9 million for the prior-year
comparable period.

For the six-months ended June 30, 2007, FFO available to common
shareholders was $265.4 million, as compared to $196.0 million for
the six-months ended June 30, 2007 and 2006, respectively, an
increase of 35.4%.  Net income available to common shareholders
was $160.2 million for the six-months ended June 30, 2007, as
compared to $100.9 million, for the prior-year comparable period.

                              Leasing

The results from the second quarter ended June 30, 2007, highlight
continued strong leasing activity throughout the portfolio were:

--  Executed 140 new leases aggregating 713,318 square feet and
    264 renewals aggregating 1,172,733 square feet.

--  On a cash basis, rental rates on new leases increased 30.3%
    and rental rates on renewals increased 7.4%.  Overall, rental
    rates for new leases and renewals increased 11.3%.

--  Total portfolio average annualized base rent per occupied
    square foot as of June 30, 2007, was $12.46, as compared to
    $11.62 at June 30, 2006.

--  Portfolio leased rate was 96.0% as of June 30, 2007, as
    compared to 96.2% at June 30, 2006.

The company currently estimates its total annual recurring capital
expenditures, including tenant improvements and tenant allowances,
to be approximately $24 million in 2007.  This figure includes
aggregate expenditures anticipated at properties held in joint
ventures.

                Strategic Real Estate Transactions

In the second quarter of 2007, the company formed DDR Domestic
Retail Fund I, a sponsored, fully-seeded commingled fund.  The
Fund acquired 63 shopping center assets aggregating 8.3 million
square feet from the company and a joint venture for approximately
$1.5 billion.  The Portfolio is comprised of 54 assets recently
acquired by the company through its acquisition of IRRETI, seven
assets formerly held in a joint venture with Kuwait Financial
Centre, and two assets from the company's wholly-owned portfolio.
Due to the sale of the assets from the KFC I joint venture, the
Company recognized a promote of approximately $13.6 million, which
is included in the company's second quarter 2007 net income and
FFO.

                  Dividend Capital Joint Venture

In the second quarter of 2007, the company formed a $161.5 million
joint venture with Dividend Capital Total Realty Trust.  The
Company contributed three recently developed assets aggregating
700,000 of company-owned square feet to the joint venture.  The
company recorded an after-tax merchant build gain, net of its 10%
retained interest, of approximately $45.6 million, which is
included in the company's second quarter FFO.  The company
retained an effective 10% ownership and receives asset management
and property management fees, plus fees on leasing and ancillary
income.  In addition, the company will receive a promoted interest
above a 9.5% leveraged threshold return.

                           Dispositions

In addition to the sale of assets to the two joint ventures
discussed above, the company sold 52 shopping center properties,
aggregating 5.4 million square feet for about $448.7 million and
recognized a non-FFO gain of about $10.8 million in the second
quarter of 2007.  An additional 11 assets associated with this
transaction are expected to sell in the third quarter of 2007 for
about $154.3 million.

                      Common Share Repurchase

During the second quarter of 2007, the Company's Board of
Directors authorized a common share repurchase program. Under the
terms of the program, the Company may purchase up to a maximum
value of $500 million of its common shares during the next two
years.

At June 30, 2007, $525.5 million of costs were incurred in
relation to the Company's eleven development projects under
construction and the six that will commence construction in 2007.

In addition to these developments, the company has identified
several additional development opportunities reflecting an
aggregate estimated cost of over $1 billion.

                    Development (Joint Ventures)

The company's joint ventures have the following shopping center
projects under construction.  At June 30, 2007, $159.5 million of
costs had been incurred in relation to these development projects.

The company's joint venture with Sonae Sierra anticipates
commencing construction on a 350,000 square foot enclosed mall in
Uberlandia, Brazil, with an estimated gross cost of $69.9 million.

                   Redevelopments and Expansions

The company is currently expanding/redeveloping the following
shopping centers at a projected aggregate gross cost of
approximately $93.9 million.  At June 30, 2007, about
$20.1 million of costs had been incurred in relation to these
projects.

The company's joint ventures are currently expanding/redeveloping
the following shopping centers at a projected gross cost of
$567.6 million, which includes the initial acquisition costs for
the Coventry II redevelopment projects.  At June 30, 2007,
approximately $448.5 million of costs had been incurred in
relation to these projects.

                            Financings

In April 2007, the company redeemed all outstanding shares of its
8.6% Class F Cumulative Redeemable Preferred Shares, aggregating
$150 million, at a redemption price of $25.10750 per Class F
Preferred Share.  The company recorded a non-cash charge to net
income available to common shareholders of about $5.4 million in
the second quarter of 2007 relating to original issuance costs.

During the second quarter of 2007, the company received net cash
proceeds of about $1.6 billion relating to the sale of assets to
joint ventures and third parties.  These proceeds were used to
repay the balance outstanding on the Inland bridge financing of
$550 million, redemption of $484 million, net, of preferred
operating partnership units and the balance of $600 million was
used to repay revolving credit facility borrowings.

Developers Diversified currently owns and manages over 735 retail
operating and development properties in 45 states, plus Puerto
Rico and Brazil, totaling 155.5 million square feet.  Developers
Diversified Realty is a self-administered and self-managed real
estate investment trust operating as a fully integrated real
estate company which acquires, develops, leases and manages
shopping centers.

                About Developers Diversified

Based in Beachwood, Ohio, Developers Diversified Realty
Corp. (NYSE: DDR) -- http://www.ddr.com/-- owns or manages
approximately 800 operating and development retail properties
in 45 states, plus Puerto Rico and Brazil, comprising
approximately 162 million square feet.  Developers Diversified
is a self-administered and self-managed real estate investment
trust operating as a fully integrated real estate company which
develops, leases and manages shopping centers.

The company elected to be treated as a Real Estate Investment
Trust under the Internal Revenue Code of 1986, as amended,
commencing with its taxable year ended Dec. 31, 1993.  As a real
estate investment trust, the company must meet a number of
organizational and operational requirements, including a
requirement that the company distribute at least 90% of its
taxable income to its stockholders.  As a real estate investment
trust the company generally will not be subject to corporate level
federal income tax on taxable income it distributes to its
stockholders.

                          *     *     *

Developers Diversified Realty Corporation continues to carry Fitch
BB+ preferred stock rating.


E*TRADE FIN'L: Earns $159 Million in Quarter Ended June 30
----------------------------------------------------------
E*TRADE FINANCIAL Corporation reported net income of $159 million
for the quarter ended June 30, 2007 compared to $156 million for
the quarter ended June 30, 2006.

The results in the second quarter of 2007 produced a 39% operating
margin including approximately $35 million of pre-tax expense
for certain legal and previously disclosed regulatory matters
related to the company's institutional equity business.

Total net revenue for the second quarter increased 9% year
over year to a record $664 million.  Net operating interest income
after provision for loan losses increased 15 percent year over
year to a record $384 million - representing 58% of total net
revenue.  The company's retail client assets increased to a record
$213 billion including growth in total customer cash and deposits
of $1.9 billion - a more than six-fold increase versus the year
ago period.

The company's balance sheet as of June 30, 2007, showed total
assets of $62,975,066,000, total liabilities of $58,640,904,000,
and total shareholders' equity of $4,334,162,000.

"Our second quarter results demonstrate the strategic and economic
success we have achieved through investments in product, service
and marketing over the past several years," said Mitchell H.
Caplan, Chief Executive Officer, E*TRADE FINANCIAL Corporation.
"We delivered record performance in the quarter while improving
the overall quality of revenue and earnings through continued
growth and engagement led by our high-value, target segment
accounts."

Other selected recent and second quarter highlights:

    * Launched Global Trading Platform, providing U.S. retail
      investors online access to foreign stocks and currencies
      in the major international markets and the ability to buy,
      hold and sell in the respective local currencies;

    * Recognized by SmartMoney magazine as the #1 premium broker
      (August 2007 issue);

    * Produced record levels of options trades at 15.4 percent of
      U.S. Daily Average Revenue Trade ("DART") volumes, up
      3 percentage points versus the year ago period;

    * Generated record quarterly Quick Transfer volume averaging
      over 400,000 cash transactions per month;

    * Expanded international business with the launch of
      operations in Norway and the Netherlands;

    * Extended branch network with three new locations:
      Minneapolis, Minnesota; Charlotte, North Carolina; and
      Houston, Texas - increasing total branches to 27 nationwide;
      and

    * Repurchased over 3.1 million shares of common stock at a
      weighted average price of $23.30 per share.

                      About E*TRADE FINANCIAL

Headquartered in New York City, E*TRADE FINANCIAL Corp.
-- https://us.etrade.com/ -- provides financial services including
trading, investing, banking and lending for retail and
institutional customers.  Securities products and services are
offered by E*TRADE Securities LLC (Member NASD/SIPC).  Bank and
lending products and services are offered by E*TRADE Bank, a
Federal savings bank, Member FDIC, or its subsidiaries.

                             *     *     *

E*TRADE FINANCIAL Corp. carries to date Moody's "Ba2" Issuer and
Senior Unsecured Debt ratings, which were placed on June 6, 2006,
with a positive outlook.

In addition, the company carries Standard & Poor's "BB-"
long-term local and foreign issuer credit ratings, which
were placed on Oct. 23, 2006, with a stable outlook.


ELEC COMMUNICATIONS: May 31 Balance Sheet Upside-down by $6.7 Mil.
------------------------------------------------------------------
eLEC Communications Corp.'s consolidated balance sheet at May 31,
2007, showed $2.9 million in total assets and $9.6 million in
total liabilities, resulting in a $6.7 million total stockholders'
deficit.

The company's consolidated balance sheet at May 31, 2007, also
showed strained liquidity with $2.0 million in total current
assets available to pay $9.4 million in total current liabilities.

The company reported a net loss of $729,466 on revenues of
$213,389 for the second quarter ended May 31, 2007, compared with
a net loss of $647,941 on revenues of $58,245 for the same period
ended May 31, 2006.

The increase in revenues was directly related to the increase in
the number of wholesale customers that began reselling the
company's Internet telephone service.

The increase in net loss is mainly attributable to the increase in
total costs and expenses, the increase in interest expense, partly
offset by the increase in warrant income due to the decrease in
the market price of the company's common stock at May 31, 2007, as
compared to Feb. 28, 2007, and the increase in revenues.

In addition, loss from discontinued operations, attributable to
the company's former CLEC operations, which were sold in June
2007, totalled $147,020, compared to a loss from discontinued
operations of $11,125 for the same period ended May 31, 2006.

Full-text copies of the company's consolidated financial
statements for the quarter ended May 31, 2007, are available for
free at http://researcharchives.com/t/s?21cf

                     Going Concern Doubt

Nussbaum Yates & Wolpow P.C., in Melville, New York, expressed
substantial doubt about eLEC Communications Corp.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended Nov. 30,
2006, 2005, and 2004.  The auditing firm reported that the company
has suffered recurring losses from operations and is in default of
its financing agreements with its principal lender.

On April 16, 2007, the company received a waiver and deferral of
principal payments on its February 2005 financing and November 25
financing, so that monthly principal payments were not required
until June 1, 2007 and Aug. 1, 2007, respectively, in
consideration of the issuance by the company of a seven=year
warrant to purchase 1,200,000 of common stock at a price of $0.25
per share.

The company is in default with its lender for not making all of
its June and July 2007 principal and interest payments.  The
company is working with its lender to adjust its payment schedule.

                    About eLEC Communications

eLEC Communications Corp. (OTCBB: ELEC) -- http://www.elec.net/--  
through its wholly owned subsidiary, VoX Communications Corp.,
provides an integrated suite of IP-based communications services
and offers wholesale broadband voice, origination and termination
services for cable operators, carriers, ISPs, CLECs, resellers and
other wireless and wireline operators, as well as enhanced VoIP
telephone service to the small business and residential
marketplace.


FHC HEALTH: S&P Retains Negative Watch on B Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services said that it would keep its 'B'
counterparty credit rating on FHC Health Systems Inc. on
CreditWatch with negative implications.

On June 14, 2007, Standard & Poor's placed the rating on
CreditWatch following the announcement that, effective Sept. 1,
2007, FHC will no longer manage behavioral health care for
Medicaid recipients and other beneficiaries of the Maricopa County
Regional Behavioral Health Authority.  In 2006, the account had
constituted about 38% of the company's revenues and 31% of the
company's EBITDA.  The loss of the account results in a diminished
competitive profile for FHC.

"We have met with FHC's management subsequent to the
announcement," said Standard & Poor's credit analyst Neal
Freedman, "and now expect improved operating performance to offset
the lost income from the Maricopa County Regional Behavioral
Health Authority contract nonrenewal."  The increased operating
performance is driven by a combination of improved client
contracting and enhanced expense management.

"Although the loss of the contract was unexpected, it had a low
profit margin, and FHC is responding to the negative effects,"
said Mr. Freedman.

On July 19, 2007, FHC announced that it has entered into a
definitive agreement with Crestview Partners L.P., a private
equity firm under which Crestview will take a significant equity
stake in the company accompanied by a new governance structure.
FHC remains on CreditWatch with negative implications pending
discussions with management regarding the effects of the proposed
new equity owner on capitalization, leverage, coverage, and
financial policy.  The transaction is expected to close by year-
end 2007.

Standard & Poor's expects the financing of the deal will result in
increased debt and a refinancing of the company's current debt
with more favorable terms.  Standard & Poor's expects to review
the transaction financing.  If the terms result in debt leverage
or interest coverage inconsistent with the current rating,
Standard & Poor's would likely lower the rating by one notch.


FORD MOTOR: Seeks Concessions as Labor Talks With UAW Start
-----------------------------------------------------------
General Motors Corp. and Ford Motor Company officially opened
contract negotiations with the United Auto Workers Monday,
seeking to win concessions that would reduce labor costs as
they grapple with rising health care expenses and stiff
competition, particularly from Japanese carmakers, Reuters
reports.

DaimlerChrysler AG unit Chrysler Group started labor talks with
the UAW on Friday.

The automakers are trying to deal with health care costs that GM
CEO Rick Wagoner says cost them a combined $12 billion in 2006.
Providing health care to 2 million employees, retirees and
dependents contributed to losses at each of the U.S. automakers
last year, while Japanese rivals posted record profits.  The
difference is made even more significant by higher pensions and
retiree health care costs.

Many analysts expect the UAW to consider establishing a union-
aligned trust fund for retiree health care, if it can reach an
agreement with the automakers on how fully to fund it.

GM and Ford hourly labor costs -- $73.26 and $70.51, respectively
-- are about $30 an hour higher than those paid by Japanese
competitors operating U.S. plants, Reuters states, referring to
data compiled by the automakers.

The UAW's current four-year contract with the "Big Three"
automakers expires Sept. 14, 2007, Reuters relates.  UAW President
Ron Gettelfinger said a strike was still possible if the parties
could not reach an agreement.

                      About Ford Motor Co.

Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents.  With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda.  The company provides
financial services through Ford Motor Credit Company.

                          *    *    *

To date, Ford Motor Company still carries Standard & Poor's
Ratings Services 'B' long-term foreign and local issuer credit
ratings and negative ratings outlook.

At the same time, the company carries Moody's Caa1 issuer and
senior unsecured debt ratings and negative ratings outlook.


FORSTER DRILLING: Posts $960,342 Net Loss in Qtr. Ended May 31
--------------------------------------------------------------
Forster Drilling Corp. reported a net loss of $960,342 on total
revenues of $2.0 million for the second quarter ended May 31,
2007, compared with a net loss of $729,454 on zero revenues for
the same period ended May 31, 2006.

Total operating expenses increased from $690,739 to $1.0 million
for the three months ended May 31, 2007, reflecting increased
business operations in the field and in the corporate office.

The increase net loss is mainly due to the increase in total
operating  expenses and the increase in interest expenses,
offsetting the increase in gross profit as a result of the
increase in revenues.

At May 31, 2007, the company's consolidated balance sheet showed
$12.0 million in total assets, $8.6 million in total liabilities,
and $3.4 million in total stockholders' equity.

The company's consolidated balance sheet at May 31, 2007, also
showed strained liquidity with $896,494 in total current assets
available to pay $7.0 million in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended May 31, 2007, are available for
free at http://researcharchives.com/t/s?21ce

                       Going Concern Doubt

John M. James CPA, in Houston, expressed substantial doubt about
Forster Drilling Corporation's ability to continue as a going
concern after auditing the company's consolidted financial
statements for the year ended Nov. 30, 2006.  Mr. James pointed to
the company's recurring losses from operations.

                     About Forster Drilling

Headquartered in Houston, Forster Drilling Corporation (OTC BB:
FODL.OB) -- http://www.forsterdrilling.com/-- is engaged in
in the refurbishing land drilling rigs and deploying them for use
by oil and natural gas producers.  Currently, the company provides
contract land drilling services in New Mexico to two different oil
and gas company customers.


FRENCH LICK: Moody's Lowers Corporate Family Rating to Caa3
-----------------------------------------------------------
Moody's lowered French Lick Resort and Casino's Corporate Family
Rating and Probability of Default ratings to Caa3 from Caa1,
respectively, and all ratings remain on review for further
possible downgrade.

The rating action reflects reported revenue and earnings through
March 31, 2007 that are well below originally projected levels,
the likelihood FLRC's intermediate earnings potential will be
materially below previously anticipated levels, FLRC's inability
to request draws under its line of credit, as well as the strong
probability the company will not generate sufficient cash flow to
supplement the interest reserve to pay its next scheduled interest
payment in October 2007.

As a result, the probability of default is high unless FRLC can
obtain new sources of capital to support operations through a
prolonged ramp-up period.  In addition, Indiana passed a law
permitting the two Indiana horse racing facilities that are more
conveniently located to Indianapolis to operate slot machines
which will increase competition for FLRC in 2008.  The Southern
Indiana market is not likely to support the level of investment
made in the resort due to its remote location and insufficient
marketing efforts to date.

The ratings remain on review for further possible downgrade.
Moody's review will focus on FLRC's plan to address its
intermediate liquidity needs, as well as the pace of improvement
in operating results.  If FLRC does not make progress toward
resolving its near term liquidity needs, further downgrades are
likely.

Ratings downgraded/assessment assigned and placed on review for
further downgrade:

    -- Corporate Family Rating to Caa3 from Caa1

    -- Probability of Default to Caa3 from Caa1

    -- $270 million first mortgage notes due 2014 to Caa3
       (LGD-4, 53%) from Caa1 (LGD-4, 55% )

Moody's last rating action on FLRC occurred on June 1, 2007 when
Moody's downgraded the CFR to Caa1.

French Lick Resorts & Casino, LLC is privately owned company that
owns a luxury resort casino comprised of two historic hotels,
about 1,202 slots and 32 tables games, 12 poker tables, and 45
holes of golf in French Lick, Indiana.


FRENCH LICK: S&P Lowers Corporate Credit Rating to CCC from CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on French
Lick Resorts & Casino LLC.  The corporate credit rating was
lowered to 'CCC' from 'CCC+'.  The ratings remain on CreditWatch
with negative implications, where they were placed April 10, 2007.

"The downgrade and continuing CreditWatch listing reflect our
concerns about FLRC's tight liquidity position, which could result
in a covenant violation under the company's revolving credit
facility," explained Standard & Poor's credit analyst Ariel
Silverberg.

While previous covenant violations regarding filing requirements
have been resolved, FLRC currently does not have availability to
draw on this facility.  As a result of this and an expectation for
continued weak performance, FLRC's liquidity position to meet its
near-term operating requirements, fund unpaid construction costs,
and meet an upcoming interest payment in October is tight.
Furthermore, S&P do not incorporate the potential for liquidity
support from FLRC's parent.

In resolving S&P's CreditWatch listing, S&P will continue to
monitor FLRC's liquidity position and its progress in negotiating
access to funds under its revolving credit facility.  If FLRC is
successful in obtaining availability under the revolver, the
rating would be removed from CreditWatch and would likely carry a
negative outlook.  If, however, the company does not obtain access
to the facility, the rating would likely be lowered to 'D'.


GENERAL MOTORS: Deal Hits Snag as Firms Shelve $3.1 Bil. Debt Sale
------------------------------------------------------------------
General Motors Corp.'s plan to sell Allison Transmission is facing
a major hurdle after Wall Street firms postponed a sale of
$3.1 billion in loans that would pay for the leveraged buyout of
the unit by private-equity firms, the Wall Street Journal relates.

As reported in the Troubled Company Reporter on June 29, 2007, the
automaker reached a definitive agreement to sell its Allison
Transmission commercial and military business to The Carlyle Group
and Onex Corporation for approximately $5.6 billion.

Allison is expected to have debt that represents about seven times
its annual cash flow, according to Standard & Poor's Leveraged
Commentary & Data, WSJ notes.

Underwriters that include Citigroup, Lehman Brothers and Merrill
Lynch were planning to sell, or syndicate, $3.1 billion of the
loans to investors, the report says.  The firms will now try to
distribute the loan among a small group of banks, WSJ quotes a
person familiar with the matter as saying.

Investors have been avoiding sales of junk bonds and similarly
rated corporate loans for several weeks.  Debt investors have
become more cautious after seeing the losses that have struck
bonds backed by risky subprime mortgage debt, WSJ states.

The snag reflects difficult conditions in the market for risky
corporate loans and bonds and raises questions about the prospects
of other buyout-related debt financings that need to be completed
this summer, Serena Ng and Gina Chon of WSJ observe.

                          About General Motors

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908, GM employs about
280,000 people around the world.  With global manufactures its
cars and trucks in 33 countries, including Brazil and India.  In
2006, nearly 9.1 million GM cars and trucks were sold globally
under the following brands: Buick, Cadillac, Chevrolet, GMC, GM
Daewoo, Holden, HUMMER, Opel, Pontiac, Saab,  Saturn and Vauxhall.
GM's OnStar subsidiary is the industry leader in vehicle safety,
security and information services.

                               *   *   *

As reported in the Troubled Company Reporter on May 28, 2007,
Standard & Poor's Ratings Services placed General Motors Corp.'s
corporate credit rating at B/Negative/B-3.

At the same time, Moody's Investors Service affirmed GM's B3
Corporate Family Rating and B3 Probability of Default Rating, and
maintained its SGL-3 Speculative Grade Liquidity Rating.  The
rating outlook remains negative, according to Moody's.


GENERAL MOTORS: Reports Global Second Quarter Sales
---------------------------------------------------
General Motors Corp. sold 2.405 million cars and trucks around the
world in the second quarter of 2007, reporting record sales
outside the United States, according to preliminary sales figures.
GM sold 2.395 million vehicles in the second quarter last year.

"GM's second quarter sales were driven by exceptionally strong
demand in emerging markets," John Middlebrook, GM vice president,
Global Sales, Service and Marketing Operations, said.  "GM global
sales of 4.67 million vehicles for the first half of the year
reflects solid results, in fact we're on track to have our second-
best annual sales performance in our almost 100-year history.  In
the second quarter we experienced record sales growth around the
globe including 20% growth in Latin America, Africa and the Middle
East -- an all-time quarterly record for that region, and 8%
growth in the Asia/Pacific region.  We're also pleased to see
almost 5% growth in Europe where we sold more than 574,000
vehicles."

Chevrolet global sales of 1.13 million vehicles in the second
quarter of 2007 were up more than 4,000 vehicles compared with a
year ago.  The brand grew by 34% in Europe, 24% in Latin America,
Africa and the Middle East and 3% in Asia-Pacific.

Saturn sales in the United States and Canada were up 27%, based
largely on the popularity of three new vehicles, the Sky roadster,
Aura mid-car and Outlook mid-utility crossover vehicle.  Saturn is
launching the all-new Vue small utility crossover and soon will
introduce the Astra small car.  Saturn has two hybrid offerings in
its lineup, the Aura Green Line and Vue Green Line.

Second quarter sales outside the United States has set a record.
At 1.39 million vehicles, Q2 2007 sales outside of the United
States accounted for about 58% of GM's total global sales, growing
at close to 8% compared with Q2 2006, outpacing the industry
average growth rate of 6%.

In the Latin America, Africa and Middle East region, GM sales
surged to 293,300 vehicles, up 20% in volume compared with 2006,
which set the industry and GM record for the second quarter.
Sales in Brazil were up 23% for the quarter.

In the Asia/Pacific region, GM sales of 338,000 vehicles were 8%
higher than the previous year's second quarter, and were a record
for the quarter.  GM China sales of 234,000 vehicles posted a more
than 6% sales increase compared with 2006.  GM remained the top-
selling automaker in China.  With these results, GM is on track to
become the first manufacturer in China to exceed one million
vehicles sold annually.  GM's sales in China include sales by
SAIC-GM-Wuling, in which GM owns the maximum permissible interest
for a foreign company, 34%.

In Europe, GM also set a quarterly sales record with deliveries of
574,000 vehicles, up 5%.  Growth in Russia, up 106%, led the
increase.  Chevrolet achieved record European sales of 114,900
vehicles, up 34%, and is fueling GM's growth in Russia.  Vauxhall
sales strength in the UK helped offset significant reductions in
the German market, keeping Opel/Vauxhall share in Europe at 7.4%
for the first half of the year.

In North America, planned reductions in daily rental sales and
softness in the U.S. market due to increasing fuel prices and
concerns about housing, resulted in sales of 1.2 million vehicles,
a decline of 7% compared with a strong quarter the previous year.
Despite a competitive market for full-size pickups, GM continues
to show pickup truck segment leadership with share gains in the
quarter thanks to the North America Truck of the Year Chevrolet
Silverado and all-new GMC Sierra.  GM's mid-car and mid-utility
crossover segments also saw retail sales gains on the strength of
mid-cars Saturn Aura, Pontiac G6 and Chevrolet Impala, and mid-
utility crossovers GMC Acadia, Saturn Outlook and Buick Enclave.

                          About General Motors

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908, GM employs about
280,000 people around the world.  With global manufactures its
cars and trucks in 33 countries.  In 2006, nearly 9.1 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn and Vauxhall.  GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.

                              *     *     *

As reported in the Troubled Company Reporter on May 28, 2007,
Standard & Poor's Ratings Services placed General Motors Corp.'s
corporate credit rating at B/Negative/B-3.

At the same time, Moody's Investors Service affirmed GM's B3
Corporate Family Rating and B3 Probability of Default Rating, and
maintained its SGL-3 Speculative Grade Liquidity Rating.  The
rating outlook remains negative.


GENERAL MOTORS: Seeks Concessions as Labor Talks with UAW Start
---------------------------------------------------------------
General Motors Corp. and Ford Motor Company officially opened
contract negotiations with the United Auto Workers Monday,
seeking to win concessions that would reduce labor costs as
they grapple with rising health care expenses and stiff
competition, particularly from Japanese carmakers, Reuters
reports.

DaimlerChrysler AG unit Chrysler Group started labor talks with
the UAW on Friday.

The automakers are trying to deal with health care costs that GM
CEO Rick Wagoner says cost them a combined $12 billion in 2006.
Providing health care to 2 million employees, retirees and
dependents contributed to losses at each of the U.S. automakers
last year, while Japanese rivals posted record profits.  The
difference is made even more significant by higher pensions and
retiree health care costs.

Many analysts expect the UAW to consider establishing a union-
aligned trust fund for retiree health care, if it can reach an
agreement with the automakers on how fully to fund it.

GM and Ford hourly labor costs -- $73.26 and $70.51, respectively
-- are about $30 an hour higher than those paid by Japanese
competitors operating U.S. plants, Reuters states, referring to
data compiled by the automakers.

The UAW's current four-year contract with the "Big Three"
automakers expires Sept. 14, 2007, Reuters relates.  UAW President
Ron Gettelfinger said a strike was still possible if the parties
could not reach an agreement.

                         About General Motors

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908, GM employs about
280,000 people around the world.  With global manufactures its
cars and trucks in 33 countries, including Brazil and India.  In
2006, nearly 9.1 million GM cars and trucks were sold globally
under the following brands: Buick, Cadillac, Chevrolet, GMC, GM
Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall.
GM's OnStar subsidiary is the industry leader in vehicle safety,
security and information services.

                                *   *   *

As reported in the Troubled Company Reporter on May 28, 2007,
Standard & Poor's Ratings Services placed General Motors Corp.'s
corporate credit rating at B/Negative/B-3.

At the same time, Moody's Investors Service affirmed GM's B3
Corporate Family Rating and B3 Probability of Default Rating, and
maintained its SGL-3 Speculative Grade Liquidity Rating.  The
rating outlook remains negative, according to Moody's.


GP INVESTMENTS: Fitch Revises Outlook to Positive from Stable
-------------------------------------------------------------
Fitch Ratings revised the Rating Outlook of the Long-term Foreign
Currency Issuer Default Rating of GP Investments and the rating of
GP's $150 million senior secured perpetual notes to Positive from
Stable.  Fitch also affirmed these GP ratings:

  -- Foreign currency Issuer Default Rating at 'B';
  -- Senior secured at 'B/RR4'.

The change in the Rating Outlook recognizes the significant
expected increase in assets under management and its positive
effects over GP's recurrent income.  The resolution of this
Positive Outlook will depend on the ability of the company to
sustain the expected increase in recurring income and keep an
adequate control of its expenses, while a successful deployment of
new investments will also be monitored.  The need for a
significantly more diversified investment portfolio, a further
increase of recurrent income to cover operating expenses, and a
more developed valuation methodology, are key to sustaining an
improvement of GP's rating going forward.

The recent closing of a new private equity fund managed by GP
($1.025 billion of committed capital -including limited partners),
will increase the size of its funds under management almost 4
times.  This event would lead to a significant increase in GP's
recurrent income going forward, benefiting the recurrent cash flow
of the company and reducing its dependence on the income generated
by the appreciation of its investment portfolio, or the possible
gains generated by contingent exits.  Going forward, an adequate
control of its expense base would enhance the aforementioned
increase of revenues in terms of operating profits.

GP Investments Ltd. ratings are supported by adequate leverage
levels, the franchise of the company and the experience of the
management team which bodes well for positive prospects going
forward.  Also, the significant increase in the size of its
portfolio of managed investments results in a positive trend on
its recurrent income.  The ratings are constrained, however, by
the concentrated nature of the current and intended investment
portfolio, the uncertainty related to the maturation period of the
investment portfolio, and GP's timing and ability to realize
investment gains.

Given that the investment policy of the company calls for large
tickets deals, the current and expected concentration of the
portfolio will remain largely in Brazilian assets.  No major
changes are expected with regard to the size of the investments to
be included in the portfolio.  At end-March 2007, the investment
portfolio concentration increased from a moderate 3% of total
equity to a high 16%.

Despite the increase in leverage, resulting from the issuance of
US$150 million in perpetual notes, which was completed in early
2007, current capital ratios are considered strong (equity to
assets ratio as of March 2007 was 55%), and Fitch does not expect
further leverage.  Liquidity ratios will maintain a downward trend
as the deployment of new investments takes place.  Nevertheless,
GP's adequate liability maturity profile mitigates this trend.
The continued maintenance of the liquidity reserve equal to 18
months debt service provides additional comfort to debt holders.

Profitability ratios have remained high given the appreciation of
the fair value of the investment portfolio and the realization of
some gains in a partial exit of one its oldest investments.  GP's
ROAA reached 9% in year 2006, and increased to 24% at end-March
2007.  Fitch expects that given the volatility and contingent
nature of exit strategies and the appreciation of the fair value
of GP's investment portfolio, profitability ratios could post
significant swings in absence of such gains.  However, the
experience built up by the company and the positive outlook for
the Brazilian capital markets could reduce the aforementioned
volatility over the short and medium term.

GP is a Bermuda exempted company that consolidates the activities
of a private equity business and an asset management business in
Brazil.  The origins of the company date from 1993.  A major
corporate reorganization was completed in 2005 in preparation for
an IPO of the company during year 2006.  The company is listed on
the Luxembourg Stock Exchange and also has a BDS program on the
Brazilian Stock Market.


GRANDE COMM: Moody's Affirms Caa1 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed Grande Communications Holdings,
Inc.'s ratings, including its Caa1 corporate family rating and
SGL-3 speculative grade liquidity rating.

Moody's characterizes Grande's liquidity through the twelve months
ending March 31, 2008, as adequate following the company's
agreement to issue an additional $25 million of 14% senior secured
notes due 2011.  In addition, Moody's changed Grande's probability
of default rating to Caa1, reflecting the marginally higher
default risk associated with the high-coupon security add-on and
the ongoing requirement to maintain minimal cash balances per the
bond indenture.

LGD rates for the company's senior secured bonds, however,
improved to 47% (LGD3) from 63% (LGD4) in accordance with the
expectation of potentially higher recovery for secured lenders in
an event of default scenario, partially attributable to their
constituting a more significant share of the company's
consolidated liability structure. The rating outlook is stable.

Grande's ratings continue to reflect its lack of scale, high
financial risk, and the prospect of increased competition, offset
by an upgraded network, high penetration of multiple services, and
the positive demographic trends in its markets.  Following the
note offering, leverage is likely to remain in the mid-6 times
range and fixed charge coverage is likely to stay negative through
2008. While Grande continues to improve its liquidity position,
the company does not have a revolving credit facility and its
operating plan may require capital investment in excess of
currently available funds.

Grande Communications Holdings, Inc.

Affirmed

    -- Corporate Family Rating, Caa1
    -- Senior Secured Bonds, Caa1, LGD3, 47%

Lowered

    -- Probability of Default Rating to Caa1

Outlook: Stable

Grande Communications Holdings, Inc. is a retail provider of
video, Internet and telephony services primarily serving
communities in six Texas markets.  The company also serves
enterprise customers and has a wholesale Internet and telephony
business.  Grande maintains its headquarters in San Marcos, Texas.


GREGG APPLIANCES: Completes Tender Offer for 9% Senior Notes
------------------------------------------------------------
Gregg Appliances Inc. has closed its tender offer and consent
solicitation for its outstanding 9% Senior Notes due 2013.

hhgregg Inc., the company's parent company has also closed its
initial public offering of 9,375,000 shares of common stock and
completed its debt refinancing.

hhgregg will use the net proceeds from the initial public offering
together with cash on hand to fund a portion of the tender offer
and redeem Gregg Appliances' junior notes.

As of midnight, New York City time on July 24, 2007, $107,847,000
aggregate principal amount of the 9% Senior Notes, representing
approximately 96.98% of the total principal amount outstanding,
had been validly tendered and accepted for purchase in the tender
offer.

In addition, after the receipt of the requisite consents, Gregg
Appliances, HHG Distributing, LLC and Wells Fargo Bank, National
Association, the trustee under the indenture governing the
9% Senior Notes, entered into a supplemental indenture amending
the 9% Senior Notes.  The amendments to the indenture will become
operative upon Gregg Appliances' payment for the accepted
9% Senior Notes.

Gregg Appliances has obtained a $100 million Term Loan facility
agented by Wachovia Bank, National Association to fund the
remaining portion of the purchase of the 9% Senior Notes.

In addition, Gregg Appliances has increased its revolving credit
facility, agented by Wachovia Capital Finance Corporation
(Central), to $100 million.  Gregg Appliances has paid for the
accepted 9% Senior Notes.

                        About hhgregg Inc.

hhgregg Inc. (NYSE:HGG) is the company of Gregg Appliances Inc.
and a specialty retailer of premium video products, brand name
appliances, audio products and accessories.  hhgregg currently
operates 79 stores in Alabama, Georgia, Indiana, Kentucky, North
Carolina, Ohio, South Carolina and Tennessee.

                       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'.


GSAMP TRUST: S&P Junks Rating on 2002-HE Class B-2 Certificates
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes from GSAMP Trust's series 2002-HE and 2002-WF.  Two of the
ratings remain on CreditWatch with negative implications, and one
was removed from CreditWatch negative.  Concurrently, S&P placed
the rating on class M-2 from GSAMP Trust 2002-WF on CreditWatch
with negative implications.  At the same time, S&P affirmed the
ratings on the remaining classes from these two transactions.

The lowered ratings and CreditWatch placements affecting series
2002-WF and 2002-HE reflect the continuing deterioration of
performance of these collateral pools.  Realized losses have
outpaced excess spread and eroded overcollateralization to the
extent that credit support is no longer sufficient at the prior
rating levels.

For series 2002-HE, as of the June 2007 remittance period, O/C had
been reduced to $1.16 million, or 0.26% of the original pool
balance.  Cumulative realized losses reached $6.28 million, or
1.45% of the original pool balance.  Total delinquencies and
severe delinquencies (90-plus-days, foreclosures, and REOs)
constituted 37.33% and 22.36% of the current pool balance,
respectively.

For series 2002-WF, as of the June 2007 remittance period, O/C had
been reduced to $1.72 million, or 0.36% of the original pool
balance.  Cumulative realized losses were $6.51 million, or 1.37%
of the original pool balance.  Total delinquencies and severe
delinquencies constituted 22.72% and 13.18% of the current pool
balance, respectively.

Standard & Poor's will continue to closely monitor the performance
of the classes with ratings on CreditWatch.  If the delinquent
loans cure to a point at which monthly excess interest begins to
outpace monthly net losses, thereby allowing O/C to build and
provide sufficient credit enhancement, S&P will affirm the ratings
and remove them from CreditWatch.  Conversely, if delinquencies
cause substantial realized losses in the coming months and
continue to erode credit enhancement, S&P will take further
negative rating actions on these classes.

S&P removed the rating on class B-2 from series 2002-HE from
CreditWatch because it was lowered to 'CCC'.  According to
Standard & Poor's surveillance practices, ratings lower than 'B-'
on classes of certificates or notes from RMBS transactions are not
eligible to be on CreditWatch negative.

The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings.

A combination of subordination, excess spread, and O/C provides
credit support for these transactions.  The underlying collateral
consists of conventional, fully amortizing, 30-year, fixed- and
adjustable-rate mortgage loans secured by first and second liens
on one- to four-family residential properties.


     Ratings Lowered and Remaining on Creditwatch Negative

                          GSAMP Trust

                                       Rating
                                       ------
           Series    Class      To              From
           ------    -----      --              ----
           2002-WF   B-1        B-/Watch Neg    BB/Watch Neg
           2002-HE   B-1        B/Watch Neg     BBB+/Watch Neg

     Rating Lowered and Removed from Creditwatch Negative

                          GSAMP Trust

                                       Rating
                                       ------
           Series    Class      To              From
           ------    -----      --              ----
           2002-HE   B-2        CCC             BB/Watch Neg

             Rating Placed on Creditwatch Negative

                         GSAMP Trust

                                       Rating
                                       ------
           Series    Class      To              From
           ------    -----      --              ----
           2002-WF   M-2        A/Watch Neg     A

                      Ratings Affirmed

                         GSAMP Trust

   Series      Class                                  Rating
   ------      -----                                  ------
   2002-WF     A-1, A-2B                              AAA
   2002-WF     M-1                                    AA+
   2002-HE     M-1                                    AA+
   2002-HE     M-2                                    A


GSI GROUP: Earns $3.3 Million in Quarter Ended June 29
------------------------------------------------------
GSI Group Inc. had revenue of $73.1 million for the second quarter
ended June 29, 2007, compared to first quarter revenue of
$74.2 million and $76.4 million for the second quarter of 2006.
Excluding restructuring charges, operating profit was $5.3 million
in the second quarter versus $6 million in the first quarter and
$8 million in the second quarter of 2006.  Net income for the
quarter was $3.3 million, compared to the first quarter results of
$3.2 million, and $6.2 million in the second quarter of 2006.

First half 2007 revenue was $147.3 million, compared to
$152.5 million in 2006.  Excluding restructuring charges,
operating profit totaled $11.3 million in the first half of 2007
compared to $15.2 million in the first half of 2006.  Year to date
net income was $6.5 million, compared to year to date net income
of $11.3 million in the prior year.

Second quarter bookings were $89.5 million, up 16% compared with
$76.9 million in the first quarter.  The book to bill ratio was
1.2, the third consecutive quarter with a book to bill ratio of 1
or above.  Deferred revenue at June 29, 2007, totaled
$15.3 million. The backlog at June 29, 2007 was $98.1 million, up
from $79.3 million in the prior quarter.

Precision Technology segment bookings grew 12% from the first
quarter due to strength in encoders and printed circuit board
spindles.

Semiconductor Systems segment bookings grew 21% from the first
quarter due to record Wafer Mark orders and strong Wafer Repair
bookings. Second quarter order activity in this segment was the
second highest level in the last twelve quarters.

Gross margin of 41% in the second quarter increased from 40% in
the first quarter largely due to favorable margins and higher
revenue in the encoder, printed circuit board spindle and wafer
mark product lines.

Operating expenses, excluding a one time benefit of a legal
settlement in the first quarter and restructuring charges,
declined $1 million sequentially, from $25.3 million in the first
quarter to $24.3 million in the second quarter.

Income tax expense for the second quarter was $2.1 million, an
effective tax rate of 39%.  The increase in the effective tax rate
was primarily due to losses, including restructuring charges, in
the U.K., which were not tax affected due to the company's current
tax loss carryforward position in the U.K.

Cash and short term investments were $152.3 million, up
$4.9 million from the first quarter, including $3 million used for
the purchase of the Thales Beryllium Optronics Business.

At June 30, 2007, the company had $436.3 million in total assets,
$77.8 million in total liabilities, and $358.5 million in total
stockholders' equity.

Dr. Sergio Edelstein, president and chief executive officer
commented, "We are pleased with both orders and results this
quarter.  Company-wide bookings grew significantly and we are
entering the third quarter with a healthy backlog.  We completed
an accretive acquisition.  Our Precision Technology bookings
strengthened, particularly in the encoder business, and
Semiconductor Systems made steady progress in new customer wins
and orders."

                        About The GSI Group

Illinois-based GSI Group Inc. -- http://www.grainsystems.com/--  
manufactures agricultural equipment.  The company's grain, swine
and poultry products are used by producers and purchasers of
grain, and by producers of swine and poultry.  The company is
comprised of several manufacturing divisions.  Grain Systems
(GSI), and GSI International are the grain storage, drying and
material handling divisions of The GSI Group.

GSI manufactures galvanized steel storage bins and many types of
grain drying systems including portable, stacked, tower and
process dryers. In addition, GSI carries a full line of material
handling equipment including augers, bin sweeps, bucket elevators,
conveyors, distributors, chain loop systems, and grain spreaders.

The GSI Group markets its products to over 75 countries worldwide
through a network of independent dealers to grain/protein
producers and large commercial businesses.

                          *     *     *

As reported in the Troubled Company Reporter on July 18, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Assumption, GSI Group Inc. and revised its
outlook to stable from negative.


HUNT REFINING: S&P's Rates $760 Million Term Loan at B+
-------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to petroleum refiner and marketer Hunt Refining Co.

At the same time, S&P assigned its bank loan and recovery ratings
to Hunt's $760 million secured credit facilities, consisting of a
$400 million delayed-draw term loan, a $130 million delayed-draw
construction loan, a $100 million synthetic LOC facility, and a
$130 million revolving credit facility.  The term loan is rated
'B+' with a recovery rating of '2', indicating expectations for
substantial (70%-90%) recovery in the event of a payment default.
Tuscaloosa, Alabama-based Hunt is a wholly owned subsidiary of
Hunt Consolidated Inc.

The rating reflects a vulnerable business risk profile that
incorporates the company's status as a small, independent, low-
complexity company.  "Its highly leveraged financial risk profile
takes into account the significant amount of debt to fund the
company's proposed expansion," said Standard & Poor's credit
analyst Ben Tsocanos.


IMAX CORP: S&P Affirms Ratings and Removes Negative CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'CCC+' corporate credit rating, on IMAX Corp. and removed them
from CreditWatch.

The ratings were originally placed on CreditWatch with negative
implications on April 2, 2007, with a revision to developing
implications occurring on July 5, 2007.  The rating action follows
the company's filing of its SEC Form 10-Q for the first quarter of
2007 and its 2006 Form 10-K, which should put the company in
compliance with its filing requirement under its bond indenture
and alleviate the risk of a near-term acceleration.

"The positive outlook reflects solid system signings in the first
quarter and good box office performance of IMAX films this year,
which could lead to new system signings," said Standard & Poor's
credit analyst Tulip Lim.

As of March 31, 2007, the company had $160 million of debt.

The rating reflects the modest size and uncertain long-term
earnings potential of the company's niche market relative to its
debt burden, weak discretionary cash flow, and limited liquidity.
These concerns overshadow IMAX's position as a specialized
provider of giant-screen projection, camera, and sound systems;
the recurring revenue provided by the installed base of 283 IMAX
theater systems; and a measure of near-term revenue visibility
provided by the company's backlog of pending system installations.


INTERNATIONAL COAL: Prices $180 Mil. of 9% Convertible Sr. Notes
----------------------------------------------------------------
International Coal Group Inc. has priced $180 million aggregate
principal amount of 9% Convertible Senior Notes due 2012 in an
offering exempt from the registration requirements of the
Securities Act of 1933.

The company has also granted the initial purchaser of the notes a
30-day option to purchase additional notes in an amount up to
$27 million.  Subject to customary closing conditions, ICG expects
the offering to close on July 31, 2007.

The notes will be ICG's senior unsecured obligations, ranking
equal in right of payment with all of ICG's existing and future
unsecured senior indebtedness.  The notes will be guaranteed on a
senior unsecured basis by all of the company's existing
subsidiaries.  The notes and the guarantees will be subordinated
to the company's and the guarantors' secured indebtedness to the
extent of the value of the related collateral.

Interest on the notes will be paid semi-annually on August 1 and
February 1 at a rate of 9% per year.  The notes will be
convertible upon satisfaction of certain conditions.  The
principal amount of the notes will be convertible into cash, and
amounts above the principal amount will be convertible into shares
of ICG common stock or, at ICG's option, cash.

The initial conversion rate will be 163.8136 shares per $1,000
principal amount of notes, subject to adjustment.  This is
equivalent to an initial conversion price of approximately
$6.10 per share, representing a premium of 45% relative to the
last reported sale price on July 25, 2007, of ICG's common stock
of $4.21 per share.

If the average of the volume-weighted average price per share of
ICG common stock for the 20 consecutive trading days ending on
Aug. 1, 2008 is less than $4.21, then the conversion rate will
automatically be adjusted so that the conversion price is equal to
the greater of (1) 145% of such average volume-weighted average
price and (2) $4.21.

Upon the occurrence of certain events, holders may require ICG to
repurchase all or some of their notes for cash equal to 100% of
the principal amount to be repurchased plus accrued and unpaid
interest. The notes will mature on Aug. 1, 2012.

ICG estimates that the net proceeds from the offering will be
approximately $174 million, or approximately $200 million if the
initial purchaser exercises its over-allotment option in full,
after deducting discounts, commissions and estimated offering
expenses.

ICG intends to use the net proceeds to repay all amounts
outstanding under its $25 million bridge loan facility, repay
$65 million outstanding under its senior credit facility and for
general corporate purposes.

                     About International Coal

International Coal Group, headquartered in Scott Depot, West
Virginia, is engaged in the mining and marketing of coal.  The
company has 11 active mining complexes, of which 10 are located in
Northern and Central Appalachia and one in Central Illinois.
ICG's mining operations and reserves are strategically located to
serve utility, metallurgical and industrial customers throughout
the Eastern United States.


INTERNATIONAL COAL: S&P Revises Outlook to Negative from Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
International Coal Group LLC to negative from stable.  At the same
time S&P  affirmed all ratings for the coal producer, including
its 'B-' corporate credit rating.  Total consolidated debt
outstanding at June 30, 2007, was about $250 million.

S&P also assigned its 'B-' rating to the proposed $180 million
senior unsecured convertible notes due 2012 of parent company
International Coal Group Inc.  ICG guarantees the notes.  The
company expects to sell these securities pursuant to Rule 144A of
the Securities Act of 1933.

Concurrently, S&P placed its 'CCC+' rating on ICG's existing
senior unsecured notes due 2014 on CreditWatch with positive
implications.

"This action reflects the expectation that once the proposed note
issue is funded, with proceeds used to permanently reduce bank
borrowings outstanding, the amount of priority debt will decline
materially and existing noteholders will be in a less
disadvantaged position," said Standard & Poor's credit analyst
Marie Shmaruk.  "Once the proposed notes are funded, we will raise
the rating on the existing note issue to 'B-'."

Scott Depot, West Virginia-based ICG is relatively small and has a
high cost profile and meaningful exposure to the difficult
operating environment of Central Appalachia, with pressured
operating results, and minimal liquidity cushion.

The company's weak results thus far in 2007 has substantially
eroded its liquidity cushion and resulted in the pursuit of more
permanent capital.

"We could lower the ratings if the company's weak operating
performance continues and weak markets persist or if the company
significantly increases in its debt levels from expected levels,"
Ms. Shmaruk said.  "Although we are less likely to revise the
outlook back to stable in the near term, we would consider such a
move in the intermediate term if the company improves,
diversifies, and expands its operations while not materially
constraining its liquidity.  Over the longer term, favorable coal
industry conditions should benefit ICG."


KINDER MORGAN: S&P Rates $100MM Series A Preferred Stock at BB+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' credit
rating to Kinder Morgan G.P. Inc.'s $100 million series A fixed-
to floating-rate term cumulative preferred stock due 2057.  The
outlook is stable.

KMGP is the general partner of Kinder Morgan Energy Partners L.P.
(KMP; BBB/Stable/A-2), a Houston, Texas-based master limited
partnership that owns and operates natural gas, refined products,
crude and carbon dioxide pipelines, and liquids and bulk terminal
facilities.  The company is 100% owned by Knight Inc. (formerly
known as Kinder Morgan Inc.), which recently completed a leveraged
management buyout led by CEO Richard Kinder and affiliates of
Goldman Sachs, American International Group, the Carlyle Group,
and Riverstone Holdings.  Knight financed the management buyout
with $4.76 billion in term loans and a $1 billion revolving credit
facility that was undrawn at closing.  This debt was incremental
to the existing $4.5 billion of debt that was already outstanding
at Knight.  When the management buyout closed on May 30, 2007,
about $9.2 billion in debt was outstanding at Knight.

The stable outlook on KMGP is based on the outlook of KMP, which
contemplates sufficient equity support for an aggressive capital
plan to complete several large growth projects and no significant
delays in those projects that would postpone the onset of cash
generation.

"Any slippage in construction progress could lead to an outlook
change or ratings downgrade, either of which would lead to a lower
short-term rating," said Standard & Poor's credit analyst Michael
Messer.

A ratings upgrade or positive outlook revision are unlikely
because the entities must perform almost flawlessly just to
maintain ratings stability.


KNOLL INC: Moody's Withdraws Ba3 Rating on $500 Million Facility
----------------------------------------------------------------
Moody's Investors Service withdrew the Ba3 ratings on Knoll's
$500 million senior secured credit facility, which is comprised of
a revolver and a term loan term loan, following the refinancing of
the facility with an unrated $500 million revolving credit
facility.

At the same time, Moody's affirmed the company's Ba3 corporate
family rating, but withdrew the B1 probability of default rating
and LGD assessments as these ratings/assessments are only
applicable for speculative grade companies that have rated debt.
The rating outlook is stable.

Knoll's Ba3 rating reflects its strong brand name, diversified
customer, industry leading margins, and distributor base, and a
good market position in its core office systems business with more
than a 15% market share.  The rating further reflects Knoll's
long-standing reputation for product quality and
design/innovation.  The rating also reflects Moody's expectation
of the continuation of favorable demand trends, although the
growth rate is expected to be slower than the last few years.  The
ratings are constrained by its modest top line, which is about
two-thirds of the median for similarly rated companies, by the
cyclical and competitive nature of the industry and by high raw
material prices.

This rating was affirmed:

    -- Corporate family rating at Ba3;

These ratings/assessments were withdrawn:

    -- Senior secured revolver at Ba2 (LGD 2, 27%);
    -- Senior secured term loan at Ba2 (LGD 2, 27%);
    -- Probability of default rating at B1.

Knoll is a leading designer, manufacturer and distributor of a
comprehensive portfolio of branded office furniture products,
textiles and accessories.  Revenue for the LTM ended March 2007
approximated $1 billion.


LANDRY'S RESTAURANTS: Obtains Covenant Waiver from Lenders
----------------------------------------------------------
Landry's Restaurants Inc. has obtained a waiver of the covenant
requiring the company to timely deliver its audited financial
statements and related certificates and schedules, as of and for
the year ended Dec. 31, 2006, within 90 days after the end such
fiscal year pursuant to the company's $450 million Credit
Agreement by and among the company, Wachovia Bank, National
Association and the other financial institutions party thereto.

However, the waiver does not apply in the event of an acceleration
of the maturity of the Notes.  Therefore, the company is not in
compliance with the Credit Agreement.

Notwithstanding the foregoing, Wachovia has not accelerated the
indebtedness under the Credit Agreement, nor does the company
expect Wachovia to take such action, and the company believes that
it will be able to obtain a waiver of the covenant.  The total
amount outstanding under the Credit Agreement is approximately
$97 million.

"The company will refinance the amount outstanding under the Notes
and under the company's existing Credit Agreement, Rick Liem, the
company's chief financial officer, said.  Due to the recent
downturn in the credit markets and the increase in interest rate
spreads, our 7.50% below market Notes did not provide enough of an
economic return to our bondholders and prompted their decision to
accelerate the Notes."

"The recent $545 million credit facility secured for the
Golden Nugget properties is not impacted, nor are our other
unrestricted subsidiaries," Mr. Liem further advised.

The company will obtain new financing to replace its current
Credit Agreement and outstanding 7.50% Senior Unsecured Notes.

While the company's voluntary internal review of its historical
stock option granting practices is expected to be completed
within the next few weeks, the company will not be able to file
its annual report on Form 10-K for the year ended Dec. 31, 2006
until completion of the review.

As a result of not filing its Form 10-K on a timely basis, the
company has been notified by U.S. Bank, National Association, the
Trustee under the Indenture covering the company's $400 million
7.50% Senior Unsecured Notes, that upon direction of a majority of
the Note holders, it declared the unpaid principal of, premium if
any, and accrued and unpaid interest on all of the Notes
outstanding to be due and payable immediately pursuant to the
Indenture.

Nevertheless, the company believes that it will be able to
refinance this indebtedness, however, due to the recent tightening
of the credit markets, the terms of the refinancing may be on
terms less favorable then could have been obtained a few weeks
earlier.

                  About Landry's Restaurants Inc.

Headquartered in Houston, Texas, Landry's Restaurants Inc. (NYSE:
LNY) - http://www.landrysrestaurants.com/-- owns and operates
more than 300 restaurants, including Landry's Seafood House, Joe's
Crab Shack, The Crab House, Rainforest Cafe, Charley's Crab,
Willie G's Seafood & Steak House, The Chart House, and Saltgrass
Steak House.  Landry's also owns several icon developments,
including Downtown Aquariums in Houston and Denver.  The company
employs approximately 36,000 workers in 36 states.


LANDRY'S RESTAURANT: S&P Lowers Corporate Credit Rating to CCC
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Houston,
Texas-based Landry's Restaurant Inc., including the corporate
credit rating, to 'CCC' from 'B+'.  The company's ratings remain
on CreditWatch with negative implications, where they had been
placed with negative implications on March 16, 2007, because of
its failure to file its 10K for fiscal 2006 and its 10Q for the
first-quarter 2007.  However, the CreditWatch listing has been
changed to Developing.

"The downgrade reflects the company's need to seek new financing
to fund the accelerated redemption of the unpaid principal and
accrued interest on its $400 million 7.50% senior unsecured notes
due 2014," explained Standard & Poor's credit analyst Charles
Pinson-Rose.  The downgrade also follows the recent announcement
that holders of notes at Golden Nugget Inc., Landry's subsidiary,
are accelerating payment as a result of Landry's financial
reporting delay.  Standard & Poor's will review the rating once
the company's financing plans are announced.  "We could lower
ratings if the company is unable to obtain new financing to fund
the redemption," added Mr. Pinson-Rose.


LANDRY'S RESTAURANT: Moody's Lowers Corporate Family Rating to B2
-----------------------------------------------------------------
Moody's Investors Service lowered the corporate family, senior
secured, and speculative grade liquidity ratings of Landry's
Restaurant Inc.'s, in addition to affirming the company's senior
unsecured note rating and placing all long term ratings on review
for possible downgrade as:

Ratings lowered are:

    -- Corporate family rating lowered to B2 from B1

    -- Probability of default rating lowered to B2 from B1

    -- $150 million senior secured term loan B, due Dec. 28, 2010,
       lowered to Ba2/14%/ LGD2 from Ba1/14%/LGD2

    -- $300 million senior secured revolving credit facility due
       Dec. 28, 2009, lowered to Ba2/14%/LGD2 from Ba1/14%/LGD2

    -- Speculative grade liquidity rating lowered to SGL-4 from
       SGL-2

Ratings affirmed are:

    -- $400 million, 7.75% guaranteed senior global notes, due
       Dec. 15, 2014, rated B3/76%/ LGD5

All long term ratings were placed on review for possible
downgrade.

The downgrade of the corporate family rating to B2 from B1 was
prompted by the company's recent announcement that due to the
company's inability to file its financial statements in a timely
manor, a majority of bondholders have requested the trustee under
the indenture covering the company's $400 million of senior
unsecured notes to declare the unpaid principle and accrued and
unpaid interest on all of the notes outstanding to be due and
payable immediately pursuant to the indenture.  The downgrade of
the speculative grade liquidity rating to SGL-4 indicates weak
liquidity, the company's reliance on external sources of financing
and the availability of that financing in Moody's opinion is
uncertain.

The review for possible downgrade reflects the uncertainty
regarding the company's ability to successfully address the
noteholders request for full payment of principle and accrued
interest as requested by the trustee, its success in seeking a
waiver from its current bank group regarding the current default
under the bank agreement due to the acceleration of the notes, and
its inability to provide audited and reviewed financial statements
to the SEC, its bank group, and bondholders in a timely manner.

Landry's Restaurants, Inc., headquartered in Houston, Texas, owns
and operates full service casual dining restaurants concepts
including Landry's Seafood House, Rainforest Cafe, The Crab House,
Charley's Crab, The Chart House, and Saltgrass Steak House.  In
addition, Landry's owns and operates the Golden Nugget Hotel and
Casino through a wholly-owned unrestricted subsidiary.  For the
year end Dec. 31, 2006, the company generated revenue of about
$869 million.


LAUREATE EDUCATION: Weak Cash Flow Cues S&P's B Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating and negative outlook to Laureate Education Inc.

At the same time, Standard & Poor's assigned its 'B' bank loan
rating, at the same level as the corporate credit rating, and '3'
recovery rating to the company's $1.20 billion first-lien bank
facilities.  The recovery rating indicates that lenders can expect
meaningful (50%-70%) recovery in the event of a payment default.
The facilities consist of a $400 million revolving credit facility
maturing in 2014, a $695 million term loan B maturing in 2014, and
a $100 delayed-draw term loan due 2014.  S&P also assigned a 'B-'
rating to the company's $685 million senior unsecured notes due
2015 and a 'CCC+' rating to the company's $310 million senior
subordinated notes due 2017.

Baltimore, Maryland-based Laureate Education operates a network of
61 for-profit college campuses located in 16 countries in Latin
America, Europe, and Asia.  Pro forma total debt at June 30, 2007,
was $1.84 billion.

"The rating reflects heightened debt leverage and weakened cash
flow protection resulting from the impending leveraged acquisition
of Laureate Education by a group of private-equity concerns," said
Standard & Poor's credit analyst Hal F. Diamond.

The ratings also consider the challenges to the company inherent
in managing its fast growth, and its debt-financed expansion
plans.  These risks are only partially offset by the company's
position in the highly fragmented and competitive international
postsecondary education market.


MERRILL LYNCH: Fitch Affirms B- Rating on $1.3MM Class P Certs.
---------------------------------------------------------------
Fitch Ratings affirms Merrill Lynch Mortgage Trust's commercial
mortgage pass-through certificates, series 2003-KEY1, as:

  -- $1.9 million class A-1 at 'AAA';
  -- $172.3 million class A-1A at 'AAA';
  -- $75 million class A-2 at 'AAA';
  -- $130 million class A-3 at 'AAA';
  -- $482.9 million class A-4 at 'AAA';
  -- Interest-only class XC at 'AAA';
  -- Interest-only class XP at 'AAA';
  -- $34.3 million class B at 'AA';
  -- $15.8 million class C at 'AA-';
  -- $25.1 million class D at 'A';
  -- $10.6 million class E at 'A-';
  -- $11.9 million class F at 'BBB+';
  -- $7.9 million class G at 'BBB';
  -- $10.6 million class H at 'BBB-';
  -- $5.3 million class J at 'BB+';
  -- $5.3 million class K at 'BB';
  -- $4.0 million class L at 'BB-';
  -- $6.6 million class M at 'B+';
  -- $2.6 million class N at 'B';
  -- $1.3 million class P at 'B-'.

Fitch does not rate the $11.9 million class Q, classes WW-1
through WW-3, or the interest-only class WW-X.

The rating affirmations reflect the stable pool performance and
minimal paydown and defeasance since issuance.  As of the July
2007 distribution date, the pool has paid down 3.8% to $1.02
billion from $1.06 billion at issuance.

One loan (0.4%) backed by a multifamily property in Euless, TX is
currently in special servicing and is in foreclosure.

Fitch reviewed the credit assessments of the following four loans:
77 West Wacker Drive (14%); Solomon Pond Mall (11.1%); Miami
International Mall (9.5%); and Mall at Fairfield Commons (2.7%).
All four loans maintain investment grade credit assessments due to
stable debt service coverage ratios and occupancy as of year-end
2006.


METHANEX CORP: Earns $35.7 Million in Quarter Ended June 30
-----------------------------------------------------------
For the second quarter of 2007, Methanex Corp. realized revenue of
$466.4 million and net income of $35.7 million.  The company had
revenue of $461 million and net income of $83 million for the
second quarter of 2006.

Total sales volumes for the three months ended June 30, 2007, were
1.7 billion, down from 1.8 billion for the three months ended
June 30, 2006.

At June 30, 2007, the company had total assets of $2.4 billion,
total liabilities of $1.2 billion, and total stockholders' equity
of $1.2 billion.

                  Liquidity and Capital Resources

Cash flows from operating activities before changes in non-cash
working capital in the second quarter of 2007 were $67 million
compared with $129 million for the same period in 2006.

During the second quarter of 2007, the company repurchased for
cancellation a total of 3.2 million common shares at an average
price of $24.79 per share, totaling $79 million.  This includes
1.9 million common shares repurchased under a normal course issuer
bid that expired May 16, 2007, and 1.3 million common shares
repurchased under a new normal course issuer bid that commenced
May 17, 2007.

On closing of the normal course issuer bid that expired at May 16,
2007, the company had repurchased a total of 7.5 million common
shares at an average price of $23.85 per share, totaling
$179 million.  On May 7, 2007, the new normal course issuer bid
was approved.  This bid commenced May 17, 2007, and expires May
16, 2008, and allows the company to repurchase for cancellation up
to 8.7 million common shares.

Also during the second quarter of 2007, the company's Board of
Directors approved a 12% increase in our regular quarterly
dividend to shareholders, from $0.125 per share to $0.14 per
share.  During the second quarter of 2007, the company paid
quarterly dividends of about $14 million.

In May 2007, the company reached financial close for the company's
project to construct a 1.3 million tonne per year methanol
facility at Damietta on the Mediterranean Sea in Egypt.  The
company is developing the project through a joint venture in which
it has a 60% interest.  The joint venture has secured limited
recourse debt of $530 million.

The company expects commercial operations from the methanol
facility to begin in early 2010 and it will purchase and sell 100%
of the methanol from the facility. The total estimated future
costs to complete the project over the next three years, excluding
financing costs and working capital, are expected to be about $800
million.  The company's 60% share of future equity contributions,
excluding financing costs and working capital, over the next three
years is estimated to be about $215 million and it expects to fund
these expenditures from cash generated from operations and cash on
hand.

Cash balance at June 30, 2007 was $484 million and the company has
a strong balance sheet with an undrawn $250 million credit
facility.  Its planned capital maintenance expenditure program
directed towards major maintenance, turnarounds and catalyst
changes is currently estimated to total about $90 million for the
period to the end of 2009.

Bruce Aitken, president and chief executive officer of Methanex,
commented, "Our average realized price in the second quarter was
$286 per tonne, similar to our Q2-2006 average realized price of
$279 per tonne.  We commented at the end of the first quarter that
our pre-tax earnings would be lower in the second quarter by
$35 million as a result of selling higher cost opening inventory.
This fact, together with the disappointing level of production
from our assets in Chile, reduced earnings below what we would
regard as normal in the current positive operating environment in
the methanol industry."

Mr. Aitken added, "While our operational performance in Chile
during the second quarter was disappointing, our production
outlook for the second half of the year looks much better.  As
recent technical issues impacting gas supply are currently being
resolved, we expect to restart our plants in Chile on a staged
basis and have all four production plants operating by the fourth
quarter."

Mr. Aitken continued, "Industry fundamentals continue to be
positive, with markets expected to remain balanced under a normal
industry operating environment.  As expected, under the current
price environment, China reverted back to being a net importer of
methanol during the second quarter.  Industry pricing remains
healthy, with July posted contract prices averaging approximately
$300 per tonne in all of the major regions.  Overall, the global
demand outlook for traditional chemical derivatives remains
strong, as does the longer-term outlook for significant new
methanol demand growth from emerging energy related uses including
biodiesel, DME, and fuel blending."

Mr. Aitken concluded, "With $124 million in cash flow from
operations generated during the second quarter, we continue to be
in a very strong financial position with liquidity to meet the
financial requirements related to our methanol project in Egypt,
pursue opportunities to accelerate gas development in southern
Chile, pursue other strategic growth initiatives, and continue to
deliver on our commitment to return excess cash to shareholders."

                       About Methanex Corp.

Based in Vancouver, Canada, Methanex Corp. (TSX: MX)(NASDAQ: MEOH)
-- http://www.methanex.com/-- is a publicly traded company
engaged in the worldwide production and marketing of methanol.

                           *     *     *

Methanex Corp. carries Moody's Investors Service's Ba1 long-term
corporate family, senior unsecured debt, and probability-of-
default ratings.  The ratings outlook remains stable.


NEWCASTLE CDO: S&P Rates $14 Million Class F Notes at BB
--------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to
Newcastle CDO X Ltd./Newcastle CDO X LLC's $1,361,741,692 notes.

Newcastle CDO X Ltd./Newcastle CDO X LLC is a cashflow CDO backed
primarily by CMBS, RMBS, REIT debt securities, other ABS, and
loans.

The ratings reflect:

     -- The adequate credit support provided in the form of
        overcollateralization, subordination, and excess spread;

     -- The characteristics of the underlying collateral pool,
        consisting primarily of CMBS, REIT debt securities, other
        ABS, and loans;

     -- The hedge agreements entered into with an appropriately
        rated counterparty to mitigate the interest rate risk
        created by having certain fixed-rate assets and floating-
        rate liabilities;

     -- Scenario default rates of 19.25% for class S, A-1, A-2,
        and A-3; 16.24% for class B; 13.96% for class C; 10.06%
        for class D; 7.86% for class E; and 6.01% for class F;
        and break-even default rates of 80.00% for class S,
        36.46% for class A-1, 28.71% for class A-2, 22.11% for
        class A-3, 21.39% for class B, 18.10% for class C, 12.75%
        for class D, 10.71% for class E, and 9.23%% for class F;

     -- Weighted average rating of 'BBB+';

     -- Weighted average maturity for the portfolio of seven
        years;

     -- S&P default measure of 0.43%;

     -- S&P variability measure of 1.21%; and

     -- S&P correlation measure of 1.84.

Interest on the class C, D, E, and F notes may be deferred up
until the legal final maturity of July 2052 without causing a
default under these obligations.  The ratings on the class C, D,
E, and F notes, therefore, address the ultimate payment of
interest and principal.

                          Ratings Assigned
             Newcastle CDO X Ltd./Newcastle CDO X LLC

        Class               Rating       Amount
        -----               ------       ------
        S                   AAA        $24,241,692
        A-1                 AAA       $80,000,000
        A-2                 AAA       $140,000,000
        A-3                 AAA        $99,750,000
        B                   AA         $28,000,000
        C                   A          $40,250,000
        D                   BBB        $22,000,000
        E                   BBB-       $13,500,000
        F                   BB         $14,000,000
        Preference shares   NR         $62,500,000

                        NR-Not rated.


NEWFIELD EXPLORATION: Earns $150 Million in Second Quarter 2007
---------------------------------------------------------------
Newfield Exploration Company reported net income of $150 million
for the second quarter of 2007.  The results reflect the impact of
commodity derivative income of $55 million associated with
unrealized changes in the fair market value of open derivative
contracts that are not designated for hedge accounting.

Without the effect of unrealized commodity derivative income, net
income for the quarter would have been $114 million.  Revenues in
the second quarter of 2007 were $528 million. Net cash provided by
operating activities before changes in operating assets and
liabilities was $380 million.

Newfield's production in the second quarter of 2007 was 71 Bcfe,
an increase of 10% over first quarter 2007 production and 22%
above the second quarter of 2006.

                      Operational Highlights

    -- Seven Seas Prospect Successful -- In early July, Newfield
       drilled a successful appraisal well on its Seven Seas
       prospect on License Area 48-7C in the U.K. North Sea.  The
       well, located approximately 14 kilometers east of the West
       Sole Fields, was drilled to appraise a 1990s discovery.
       The Seven Seas well was drilled horizontally within
       the reservoir for 3,500 feet and tested at an equipment-
       limited rate of 47 MMcfe/d. Newfield operates with an 80%
       interest in this undeveloped field.

    -- Grove Field Commences Production -- On April 25, the Grove
       Field in the U.K. North Sea commenced production.  The G-1
       and G-2 wells have produced as high as 37 MMcfe/d and 38
       MMcfe/d, respectively. The field is currently producing
       36 MMcfe/d (gross).  Newfield operates the field with an
       85% interest.  Newfield plans to sell all its subsidiaries
       which do business in the U.K.

    -- Wrigley Field On-Line -- In early July, first production
       commenced from Newfield's Wrigley development in the
       deepwater Gulf of Mexico.  Gross production is currently
       40 MMcfe/d and continues to ramp up to an expected rate of
       about 60 MMcfe/d. The field is operated by Newfield
       with the Company holding a 50% working interest.

    -- Abu Field Commences Production -- In May, the Abu Field
       offshore Malaysia commenced production.  The field is
       currently producing 10,000 BOPD and is ramping to an
       expected run rate of 15,000 BOPD.  Due to the timing of oil
       liftings, reported second quarter 2007 production
       includes no Abu volumes. Newfield has a 50% interest in
       Abu.

    -- Stiles/Britt Ranch Reaches Record Production -- In the
       second quarter, production from the Stiles/Britt Ranch
       Field in the Texas Panhandle reached a record production
       rate of 74 MMcfe/d.  There are five operated rigs running
       in the field today.  Newfield operates this growing
       development with a 95-100% working interest across the
       field.

    -- Val Verde Production Surpasses 100 MMcfe/d -- In the second
       quarter, production from the Val Verde Basin of West Texas
       reached a new high rate of more than 100 MMcfe/d (gross).
       Newfield's working interest across the Val Verde Basin
       averages about 70%.

    -- South Texas JV Production Reaches 82 MMcfe/d -- In the
       second quarter, production from Newfield's joint venture
       with Exxon-Mobil in South Texas reached a new high of
       82 MMcfe/d (gross).  Newfield's interest in this joint
       venture is about 50%.  Newfield has an inventory of
       20 ready-to-drill prospects under this venture and is
       currently operating two drilling rigs.

    -- Fastball Tests at 60 MMcfe/d -- During the second quarter,
       Newfield tested its recent Fastball Prospect, located at
       Viosca Knoll 1003 in the deepwater Gulf of Mexico, at
       43 MMcf/d and 3,000 BCPD (gross).  The field will be
       developed as a tie back to existing infrastructure with
       first production expected in the first half of 2009.
       Newfield operates Fastball with a 66% working interest.

    -- Woodford Shale Production at 115 MMcfe/d -- Newfield is
       currently completing its first 40-acre pilot with four
       wells expected to commence production in August.  Newfield
       has now spud 110 operated horizontal wells and has an
       interest in 175 horizontal wells, or 60% of the
       industry's 291 horizontal wells drilled in the play to
       date.

At June 30, 2007, the company $7.7 billion in total assets,
$4.6 billion in total liabilities, and $3.1 billion in total
stockholders' equity.

                       Capital Expenditures

During the second quarter, Newfield invested $522 million,
excluding the $577 million acquisition of the Rocky Mountain
assets.  Year-to-date, Newfield has invested $1.6 billion,
including the acquisition and expects its full-year capital budget
to be approximately $2.1 billion.

"Our production in the second quarter was strong and provides
great momentum as we move into the remainder of 2007 and into
2008," said David A. Trice, Newfield chairman, president and chief
executive officer.  "The sources of our production growth are
diverse -- we hit new production highs in our Woodford Shale Play,
in the Val Verde Basin and in our South Texas JV.  Although not
reflected in our second quarter results, we recently commenced
production from significant new developments offshore Malaysia and
in the deepwater Gulf of Mexico.  These fields will add
significant volumes in the second half of 2007 and in 2008.

                       Management's Comments

"Our production guidance for the full year 2007 is well ahead of
our previously provided forecast," continued Trice.  "In fact, if
you consider that we expect to divest of approximately 45 Bcfe of
production in 2007, our full-year volumes would have been above
our previous full year 2007 guidance of 265 - 279 Bcfe.  This is
great news and indicates that our development drilling programs
are contributing to growth as expected.  We are in the process of
divesting of our assets on the shelf, all of our assets in the
U.K. North Sea, our producing fields in Bohai Bay and select
properties in the Mid-Continent and South Texas.  For 2008, we
expect to have at least 10% pro-forma production growth -- or a
range of 215 - 230 Bcfe."

                    About Newfield Exploration

Newfield Exploration Company (NYSE: NFX) -- http://www.newfld.com/
-- engages in the exploration, development, and acquisition of
crude oil and natural gas properties primarily in the United
States.  As of Dec. 31, 2006, the company had proved reserves of
2.3 trillion cubic feet equivalent.  The company was founded in
1988 and is based in Houston, Texas.

                          *      *     *

As of June 25, 2007, Newfield Exploration Company continues to
carry Fitch's BB+ long term issuer default rating.  Fitch rates
the company's bank loan debt and senior unsecured debt at BB+
while its senior subordinate rating is at BB-.  The outlook
remains stable.

At the same time, the company also bears Moody's Investor
Services' Ba2 long term corporate family rating and probability of
default rating, Ba1 senior unsecured debt, Ba3 senior subordinate
rating, and B1 preferred stock rating.  The outlook is stable.

The company also continues to carry Standard & Poor's BB+ long
term foreign and local issuer debt ratings.  The outlook remains
stable.


NOE FULINARA: Case Summary & 19 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Noe Fulinara
        Merilyn Fulinara
        2819 McAndrew Court
        San Jose, CA 95121

Bankruptcy Case No.: 07-52218

Chapter 11 Petition Date: July 24, 2007

Court: Northern District of California (San Jose)

Judge: Marilyn Morgan

Debtor's Counsel: Lars T. Fuller, Esq.
                  60 North Keeble Avenue
                  San Jose, CA 95126
                  Tel: (408) 295-5595

Total Assets: $4,735,068

Total Debts:  $4,478,106

Debtor's 19 Largest Unsecured Creditors:

Entity                      Nature of Claim       Claim Amount
------                      ---------------       ------------
Regional Medical Center                               $163,961
of San Jose
P.O. Box 538620
Atlanta, GA
30353-8620

Wells Fargo Bank            value of collateral:      $115,652
P.O. Box 54180              $50,472
Los Angeles, CA
90054-0180

American Express                                       $78,585
P.O. Box 0001
Los Angeles, CA
90096-0001

I.R.S. Centralized                                     $57,658
Insolvency Operation

Navy Federal Credit                                    $21,748

Bank of America                                        $18,104

Franchised Tax Board                                   $11,306
Special Procedures

San Jose Medical Group                                 $10,309

Marshal Rosario, M.D.                                   $4,680

Gentiva Health Services                                 $4,074

South Bay Patholog                                      $3,533
Medical Association
Regional Medical Center

J.C. Penney                                             $3,121

Bright Now Dental, Inc.                                 $3,038

G.E. Money Bank             value of collateral:        $3,038
                            $500

Dell Preferred Account      value of collateral:        $2,329
Payment Processing Center   $500

Central Valley Imaging                                  $2,515

Sears Credit Cards                                      $1,988

Galen Inpt. Phys., Inc.                                 $1,557

BrightNow Dental, Inc.                                  $1,500


OGLEBAY NORTON: S&P Places Ratings Under Developing CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Oglebay
Norton Co., including its 'B' corporate credit rating, on
CreditWatch with developing implications following the company's
announcement that it had engaged J.P. Morgan Securities Inc. to
assist the company's management and board of directors in
exploring options to enhance shareholder value.

In resolving the CreditWatch listing, we will monitor developments
associated with the company's pursuit of strategic alternatives.
The CreditWatch developing placement indicates that the ratings
might be affirmed, raised, or lowered, depending on Oglebay's
credit profile following a potential transaction.

"An acquisition by a strategic buyer with a stronger credit
profile may result in an upgrade," said Standard & Poor's credit
analyst Marie Shmaruk.  "Alternatively, an acquisition by a
financial buyer, resulting in a material increase in leverage,
could result in a downgrade.  As the company may not provide
ongoing guidance relative to its progress, we may decide to
resolve the CreditWatch listing at a later date if it appears a
transaction is not likely to occur."


ORECK CORP: S&P Withdraws All Ratings at Company's Request
----------------------------------------------------------
Standard & Poor's Ratings Services withdrew all ratings on New
Orleans, Louisiana-based Oreck Corp, including its 'CCC-'
corporate credit ratings.  S&P made the ratings withdrawal at the
company's request.

Ratings List

Not Rated Action; CreditWatch/Outlook Action
                           To                 From
Oreck Corp.
Corporate Credit Rating   NR/--              CCC-/Negative/--

Not Rated Action

Senior Secured
  Local Currency           NR                 CCC-


PILGRIM'S PRIDE: Declares 2-1/4 Cents Per Share Quarterly Dividend
------------------------------------------------------------------
The Board of Directors of Pilgrim's Pride Corporation has declared
a quarterly dividend of 2-1/4 cents per share.  The quarterly
dividend is payable on Sept. 28, 2007, to shareholders of record
at the close of business on Sept. 14, 2007.

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico.  Pilgrim's Pride employs about 40,000
people and has major operations in Texas, Alabama, Arkansas,
Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania,
Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with
other facilities in Arizona, Florida, Iowa, Mississippi and Utah.

                          *     *     *

Pilgrim's Pride Corp. carries Moody's Investors Service's B1
senior unsecured credit rating, B2 senior subordinated notes, and
Ba3 corporate family ratings.  PPC's planned new $250 million
senior unsecured notes also bears Moody's B1 rating and its new
$200 million senior subordinated notes bears Moody's B2 rating.
The outlook on all ratings is stable.

Standard & Poor's Ratings Services gave Pilgrim's Pride Corp. a
'BB-' corporate credit rating.


PSS WORLD: Net Income Downs to $8.7 Mil. in Quarter Ended June 29
-----------------------------------------------------------------
PSS World Medical Inc. had net sales for fiscal 2008 first quarter
ended June 29, 2007, of $438.9 million, an increase of 6.2%,
compared with net sales of $413.1 million for the three months
ended June 30, 2006.  Net sales for the three months ended June
29, 2007, for the Physician Business increased by 7.7%, while net
sales for the Elder Care Business increased by 3.1%.

Income from operations for the three months ended June 29, 2007,
was $14.5 million compared with income from operations for the
three months ended June 30, 2006, of $18.7 million.  Net income
for the three months ended June 29, 2007, was $8.7 million,
compared with net income for the three months ended June 30, 2006,
of $11 million.

The company noted that the first quarter operating income was
negatively impacted by:

   -- costs associated with new state pedigree laws, particularly
      within the state of Florida, for the sale and distribution
      of pharmaceutical products ($2.7 million);

   -- costs associated with integration of a recently acquired
      company ($0.7 million);

   -- sales training and marketing program costs to launch a new
      product category in its Physician Business ($1.2 million);

   -- lower than expected equipment sales in its Physician
      Business, primarily resulting from lost selling time used
      for program launch and training ($0.5 million).

At June 30, 2007, the company's balance sheet showed total
assets of $806.4 million, total liabilities of $416 million, and
total stockholders' equity of $390.4 million.

David A. Smith, chairman and chief executive officer, commented,
"This first quarter set back has challenged and energized the
determination of our officer team to execute our plans for the
next three quarters of the year.  Our field teams are very pleased
and excited by the new programs and products we have invested in
for their future growth.  We have good momentum in the business, a
solid plan, and are attractively positioned for future strategic
growth."

David M. Bronson, executive vice president and chief financial
officer, commented, "The costs we recognized in this first quarter
tended to mask some otherwise very good performance.  Other than
the shortfall in equipment revenue, traction in our key marketing
strategies was very strong with good revenue growth in Select(TM),
pharmaceuticals, and home care.  Continued focus on working
capital generated operating cash flow that exceeded our
expectations.  Our operating and shared service teams are focused
on building on that momentum to meet our earnings targets for the
remainder of the fiscal year."

                         About PSS World

Based in Jacksonville, Florida, PSS World Medical Inc. (NASDAQ:
PSSI) -- http://www.pssworldmedical.com/-- is a national
distributor of medical products to physicians and elder care
providers through its two business units.  Since its inception
in 1983, PSS operated in two market segments focused on customer
services, a consultative sales force, strategic acquisitions,
strong arrangements with product manufacturers and a unique
culture of performance.

                          *     *     *

To date, PSS World Medical Inc. carries Standard & Poor's Ratings
Services' BB long-term foreign and local issuer credit ratings.
The rating outlook remains stable.


RESIDENTIAL ACCREDIT: Fitch Lowers Ratings on Four Cert. Classes
----------------------------------------------------------------
Fitch Ratings has taken action on these Residential Accredit Loan,
Inc. mortgage-pass through certificates:

Series 2003-QS16

  -- Class A affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class M-3 affirmed at 'BBB';
  -- Class B-1 affirmed at 'BB';
  -- Class B-2 affirmed at 'B'.

Series 2005-QS5

  -- Class A affirmed at 'AAA'
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class M-3 affirmed at 'BBB';
  -- Class B-1 downgraded to 'B+' from 'BB';
  -- Class B-2 downgraded to 'C' from 'B' and assigned a DR
     rating of 'DR4'.

Series 2005-QS17

  -- Class A affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class M-3 affirmed at 'BBB';
  -- Class B-1 downgraded to 'B+' from 'BB';
  -- Class B-2 downgraded to 'C' from 'B' and assigned a DR
     rating of 'DR4'.

Series 2006-QS10

  -- Class A affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class M-3 affirmed at 'BBB'.
  -- Class B-1 affirmed at 'BB';
  -- Class B-2 rated 'B', placed on Rating Watch Negative.

Series 2006-QS12

  -- Class A affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class M-3 affirmed at 'BBB';
  -- Class B-1 rated 'BB', placed on Rating Watch Negative.
  -- Class B-2 rated 'B', placed on Rating Watch Negative.

Series 2006-QS13 Group I

  -- Class I-A affirmed at 'AAA';
  -- Class I-M-1 affirmed at 'AA';
  -- Class I-M-2 affirmed at 'A';
  -- Class I-M-3 affirmed at 'BBB';
  -- Class I-B-1 affirmed at 'BB';
  -- Class I-B-2 rated 'B', placed on Rating Watch Negative.

Series 2006-QS13 Group II

  -- Class II-A affirmed at 'AAA'
  -- Class II-M-1 affirmed at 'AA';
  -- Class II-M-2 affirmed at 'A';
  -- Class II-M-3 affirmed at 'BBB';
  -- Class II-B-1 affirmed at 'BB';
  -- Class II-B-2 affirmed at 'B'.

Series 2006-QS14
  -- Class A affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class M-3 affirmed at 'BBB';
  -- Class B-1 affirmed at 'BB';
  -- Class B-2 rated 'B', placed on Rating Watch Negative.

Series 2006-QS16

  -- Class A affirmed at 'AAA'
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class M-3 affirmed at 'BBB';
  -- Class B-1 affirmed at 'BB';
  -- Class B-2 rated 'B', placed on Rating Watch Negative.

Series 2006-QS17

  -- Class A affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class M-3 affirmed at 'BBB';
  -- Class B-1 affirmed at 'BB';
  -- Class B-2 rated 'B', placed on Rating Watch Negative.

Series 2006-QS18 Group I

  -- Class I-A affirmed at 'AAA';
  -- Class I-M-1 affirmed at 'AA';
  -- Class I-M-2 affirmed at 'A';
  -- Class I-M-3 affirmed at 'BBB';
  -- Class I-B-1 rated 'BB', placed on Rating Watch Negative;
  -- Class I-B-2 rated 'B', placed on Rating Watch Negative.

Series 2006-QS18 Group II

  -- Class II-A affirmed at 'AAA'
  -- Class II-M-1 affirmed at 'AA';
  -- Class II-M-2 affirmed at 'A';
  -- Class II-M-3 affirmed at 'BBB';
  -- Class II-B-1 affirmed at 'BB';
  -- Class II-B-2 affirmed at 'B'.

Series 2006-QO7

  -- Class A affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA+';
  -- Class M-2 affirmed at 'AA+';
  -- Class M-3 affirmed at 'AA';
  -- Class M-4 affirmed at 'A+';
  -- Class M-5 affirmed at 'BBB+';
  -- Class M-6 affirmed at 'BBB';
  -- Class M-7 affirmed at 'BBB-'.

The affirmations, affecting approximately $6.3 billion of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss.  The downgrades, affecting
approximately $6.5 million, reflect a deteriorating relationship
between CE and expected losses.  Classes B-1 and B-2 from the 2005
transactions are downgraded due to high delinquencies and expected
losses.

For series 2005-QS5, the amount of loans in Foreclosure and REO,
as a percentage of the current collateral balance, is 1.27%.  The
CE for classes B-1 and B-2 is 1.00% and 0.53%, respectively.  To
date, the transaction has experienced losses of approximately
$297,000 or 0.14% of the original collateral balance.  For series
2005-QS17, the amount of loans in Foreclosure and REO, as a
percentage of the current collateral balance, is 1.36%.  The CE
for classes B-1 and B-2 is 1.01% and 0.49%, respectively.  To
date, the transaction has experienced losses of approximately
$184,000 or 0.03% of the original collateral balance.

Several classes from the 2006 vintage RALI transactions are placed
on Rating Watch due to current trends in the relationship between
serious delinquency and credit enhancement.  For the affected
transactions, the 90+ DQ ranges from 1.63% to 2.67% of the current
collateral balance.  The affected B-2 bonds have CE ranging from
0.41% to 0.55%, while the affected B-1 bonds have CE of 0.92%
(QS12) and 1.05% (QS18).

As of the June 2007 distribution date, the pool factors of the
above transactions range from 46% (series 2003-QS16) to 92%
(series 2006-QS17 & 2006-QS18, Group 1).  The seasoning ranges
from 6 months (series 2006-QS17 and 2006-QS18) to 46 months
(series 2003-QS16).

The collateral of the above transactions primarily consists of 30-
year and 15-year fixed-rate mortgage loans extended to Alt-A
borrowers.  The loans are primarily secured by first liens on one-
to four-family residential properties.  All of the above
transactions are master serviced by GMAC-RFC, (rated 'RMS1' by
Fitch).


REYNOLDS AMERICAN: Earns $325 Million in Quarter Ended June 30
--------------------------------------------------------------
Reynolds American Inc. reported a $325 million net income on net
sales of $2,348 million for the three months ended June 30, 2007,
compared to net income of $376 million on net sales of
$2,291 million for the three months ended June 30, 2006.

As of June 30, 2007, the company's balance sheet showed total
assets of $17,630 million, total liabilities of $10,413 million
and total shareholders' equity of $7,217 million.

The company states that reported EPS for both periods was down
due to unusually high, undiscounted, volume at wholesale and
extraordinary tax gains in the prior-year periods.  Adjusted EPS
was down for the quarter, but up 1.8 percent for the first half.
Second-quarter reported and adjusted 2007 EPS included a charge
of approximately $20 million, or about 4 cents per share, related
to debt refinancing that smooths out maturities and reduces the
company's cost of debt.

Reynolds American expects to see substantial improvements in
second-half earnings comparisons due to the significant quarterly
fluctuations throughout 2006.  Reynolds American has raised the
low end of its prior full-year 2007 guidance by 5 cents and now
expects reported EPS of $4.45 to $4.60.  The company said it
remains on track to deliver year-over-year reported EPS growth
of 9 percent to 12 percent.

Commenting on the results, Susan M. Ivey, the company's chairman,
president and chief executive officer, said, "Reynolds American's
first-half results position us well to deliver strong earnings
growth for the full year."

Ms. Ivey relates that the first half of 2007 was highlighted by:

     * R.J. Reynolds' margin improvements and total growth-brand
       gains;

     * Conwood's continued share and volume gains, and double-
       digit profit growth;

     * Continuing benefits from productivity initiatives;

     * Debt refinancing to smooth out maturities and reduce
       cost; and

     * Credit rating upgrades based on RAI's performance and
       improved risk profile.

She noted that the company's financial strength in the first half
of 2007 is clouded by comparisons to a particularly strong prior-
year period that benefited from an unusual wholesale inventory
build and $74 million of extraordinary tax gains.

"Our guidance and dividend increases clearly demonstrate our
confidence in RAI's 2007 performance," Ms. Ivey said. "We're
solidly on track to deliver strong full-year results."

                          Revised Full-Year Forecast

"Our first-half results fully met our expectations and reflect a
difficult prior-year comparison," said Dianne M. Neal, the
company's chief financial officer.  "All of our businesses are
producing solid results, we're continuing see growth on key
brands, and we're on track to generate full-year productivity
gains of $75-to-$100 million.

"Based on our first-half accomplishments and our full-year
expectations, we've raised the low end of our prior guidance by
5 cents," Neal said. "We now expect to deliver full-year reported
EPS of $4.45 to $4.60. That represents an increase of 9 percent to
12 percent, compared with RAI's prior-year earnings."

Ms. Neal said that the company's first-half 2007 highlights
also include:

   -- The repayment of $300 million in debt;

   -- Rating-agency upgrades of RAI's revolving credit facility
      and its senior secured notes;

   -- The successful refinancing of a $1.55 billion term loan
      over a longer, staggered term and at lower rates; and

   -- The return of the $100 million appeal bond in the Engle
      case.

Ms. Neal noted that the dividend increase keeps the company in
line with its policy of returning about 75 percent of current-year
net income to shareholders in the form of dividends.

"We continue to face external challenges in terms of FDA
regulation, and state and federal excise tax proposals," she said.
"However, we continue to address these challenges, and we're
confident that we will deliver strong financial results and
continue to build value for our shareholders."

                   About Reynolds American Inc.

Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. (NYSE: RAI) is the ultimate parent company of wholly owned
subsidiaries, R.J. Reynolds Tobacco Company (manufactured
cigarettes), Santa Fe Natural Tobacco Company (additive free
tobacco cigarettes), Lane Limited (roll your own tobacco brands)
and Conwood Holdings, Inc. (smokeless tobacco products).

                               *     *     *

As reported in the Troubled Company Reporter on June 22, 2007,
Moody's Investors Service affirmed Reynolds American Inc.'s Ba1
corporate family rating and its' speculative grade liquidity
rating of SGL-2.  The rating outlook is positive.

In addition, Standard & Poor's Ratings Services assigned Reynolds
American Inc.'s corporate credit rating at 'BB+', which reflects
the company's participation in the contracting domestic cigarette
industry, its declining shipment volumes and market share, and
significant litigation risk partly offset by relatively moderate
financial policies.  The outlook is positive.


SAINT VINCENT'S: Creditors Vote to Accept Amended Plan
------------------------------------------------------
The First Amended Plan of Saint Vincent's Catholic Medical Centers
of New York and its debtor-affiliates, Andrew M. Troop, Esq., at
Cadwalader, Wickersham & Taft LLP, in New York informs the United
States Bankruptcy Court for the Southern District of New York, has
been expressly supported by the Official Committee of Unsecured
Committee and the Official Committee of Tort Claimants, and has
been overwhelmingly accepted by all Classes that actually voted
on it.

As reported in the Troubled Company Reporter on June 8, 2007, the
Debtors filed an Amended Chapter 11 Plan that was in act, six
separate plans-- a plan of reorganization for Saint Vincents
Catholic Medical Centers of New York and separate plans of
liquidation for each of the five Other Debtors.

The Debtors' Amended Plan is designed to permit them to emerge
from Chapter 11 as a financially healthy enterprise capable not
only of satisfying Allowed Claims, but also capable of remaining
an important, integrated and substantial provider of health care
and employment in New York City and Westchester County.

"The First Amended Plan represents a highly successful and,
importantly, consensual conclusion for the Debtors' Chapter 11
cases," Mr. Troop asserts.

James Katchadurian, vice president of Epiq Bankruptcy Solutions,
LLC, presents a tabulation of properly completed and executed and
timely filed Ballots:

                               Accept             Reject
                      ---------------------  ------------------
Class                    Amount     Number    Amount   Number
-----                 -----------  --------  -------- ---------
Class 2-2              $25,000,000         1        $0         0
Aptium Secured Claims       (100%)    (100%)      (0%)      (0%)

Class 3               $137,811,958       715   $17,495         4
Gen. Unsecured Claims     (99.99%)  (99.44%)   (0.01%)   (0.56%)

Class 4                       $111       111        $6         6
MedMal-BQ Claims          (94.87%)  (94.87%)   (5.13%)   (5.13%)

Class 5                        $60        60        $3         3
MedMal-MW Claims          (95.24%)   (95.24%)  (4.76%)   (4.76%)

Class 6                        $58        58        $4         4
MedMal-SI Claims          (93.55%)  (93.55%)   (6.45%)   (6.45%)

Class 8                $37,975,772         4        $0         0
Intercompany Claims         (100%)    (100%)      (0%)      (0%)

Class 9                 $6,765,721         1        $0         0
DASNY Subordinated          (100%)    (100%)      (0%)      (0%)

Class A3                   $12,136         1        $0         0
Gen. Unsecured Claims       (100%)    (100%)      (0%)      (0%)
against MS-SVH

Class A4                       $1          1        $0         0
Equity Interest in MS-SVH  (100%)     (100%)      (0%)      (0%)

Class B3                       $0          0        $0         0
Gen. Unsecured Claims        (0%)       (0%)      (0%)      (0%)
against SSSV

Class B4                       $0          0        $0         0
Equity Interest in SSSV      (0%)       (0%)      (0%)      (0%)

Class C3                       $0          0        $0         0
Gen. Unsecured Claims        (0%)       (0%)      (0%)      (0%)
Against CMC-CS

Class C4                       $0          0        $0         0
Equity Interest in CMC-CS    (0%)       (0%)      (0%)      (0%)

Class D3                       $0          0        $0         0
Gen. Unsecured Claim         (0%)       (0%)      (0%)      (0%)
Against CMC-PS

Class D4                       $0          0        $0         0
Equity Interest in CMC-PS    (0%)       (0%)      (0%)      (0%)

Class E3                  $45,229          1        $0         0
Gen. Unsecured Claims      (100%)     (100%)      (0%)      (0%)
against CMC-RS

Class E4                       $0          0        $0         0
Equity Interest in CMC-RS    (0%)       (0%)      (0%)      (0%)

Not a single Class voted to reject the First Amended Plan, Mr.
Troop points out.

"The fundamental fairness of the First Amended Plan and the
appropriate, honest and with good intention way it balances
competing interests in these cases is demonstrated by the
consensus it reflects and the support it has received from the
Creditors' Committee, the Tort Committee, various parties-in-
interest who have reached agreement with the Debtors over the
treatment of their claims and the overwhelming number and amount
of interested parties who have voted in favor of the Plan," Mr.
Troop says.

In fact, the Debtors note, the only remaining substantive
objection to confirmation of the Plan is the one filed by the
U.S. Trustee.

Mr. Troop argues that the First Amended Plan complies in all
respects with applicable law and need not be modified to address
the U.S. Trustee's concerns for these reasons:

  * Limited exculpation provisions as those contained in the
    First Amended Plan are routinely approved by courts, in
    light of the recognition that absent these provisions,
    negotiated Chapter 11 plans would not be possible.

  * The provisions of the First Amended Plan which enjoin the
    assertion of certain claims against certain non-Debtor
    parties are narrowly tailored and justified under applicable
    authority. They are not blanket releases purporting to
    enjoin the assertion of a broad spectrum of direct claims
    against non-Debtor parties, Mr. Troop maintains.

    Rather, the First Amended Plan only enjoins actions against
    certain specified non-Debtor parties to the extent those
    actions seek to recover on account of Claims and Equity
    Interests subject to the First Amended Plan.

    Although the Debtors are not at present aware of the right
    of any third party to bring any such action against any of
    the Released Parties, if and to the extent that right exists
    and is later asserted, the applicable Released Party likely
    would be entitled to assert a corresponding indemnification
    claim against the applicable Debtor.  Under these
    circumstances, the limited non-Debtor release provisions
    contained in the First Amended Plan are entirely appropriate
    under governing case law in this jurisdiction and should be
    approved.

  * The Litigation Trustee and the MedMal Trustee were selected
    based upon the Debtors' due diligence and after consultation
    with the Creditors Committee and the Tort Committee, as
    applicable.  The Debtors and the Committees believe the
    parties selected to serve as Litigation Trustee and MedMal
    Trustee are reliable and, accordingly, that there is no need
    for either the MedMal Trustee or the Litigation Trustee to
    be bonded.

  * The Debtors have demonstrated in supporting declarations,
    and will further demonstrate at the Confirmation Hearing as
    necessary, that they are fully capable of satisfying all of
    their payment obligations under the First Amended Plan and
    that these Chapter 11 Cases are not likely to be followed by
    the need for further bankruptcy proceedings.

Moreover, the First Amended Plan satisfies all applicable
requirements of the Bankruptcy Code, including Sections 1122,
1123, 1125, 1126 and 1129, Mr. Troop avers.

Moreover, the First Amended Plan provides that SVCMC will enter
into a $320,000,000 Exit Facility on the Effective Date.  SVCMC
anticipate that the substantial liquidity available to it under
the Exit Facility, together with its existing assets of as of the
Effective Date, will be sufficient to enable it to satisfy their
cash obligations under the Plan as well as its working capital
needs upon and subsequent to the Effective Date.

The Debtors contend that the First Amended Plan should be
confirmed to enable them to concentrate their efforts on emerging
from Chapter 11 and continuing to provide quality health care
services to the greater New York community.

The Court is set to consider confirmation of the Debtors' Amended
Plan, today, July 27.

                        About Saint Vincent's

Based in New York City, Saint Vincent's Catholic Medical Centers
of New York -- http://www.svcmc.org/-- the healthcare provider in
New York State, operates hospitals, health centers, nursing homes
and a home health agency.  The hospital group consists of seven
hospitals located throughout Brooklyn, Queens, Manhattan, and
Staten Island, along with four nursing homes and a home health
care agency.

The company and six of its affiliates filed for chapter 11
protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945
through 05-14951).  Gary Ravert, Esq., and Stephen B. Selbst,
Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter
11 cases.  On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil,
Gotshal & Manges LLP took over representing the Debtors in their
restructuring efforts.  Martin G. Bunin, Esq., at Thelen Reid &
Priest LLP, represents the Official Committee of Unsecured
Creditors.  As of Apr. 30, 2005, the Debtors listed $972 million
in total assets and $1 billion in total debts.  The Debtors filed
their Chapter 11 Plan of Reorganization accompanying a disclosure
statement explaining that Plan on Feb. 9, 2007.  On June 1, 2007,
the Debtors filed an Amended Plan & Disclosure Statement.  (Saint
Vincent Bankruptcy News, Issue No. 59  Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


SAINT VINCENT'S: Inks Stipulation Resolving DASNY's Plan Objection
------------------------------------------------------------------
The Dormitory Authority of the State of New York is the holder of
certain claims pursuant to that certain stipulation between
DASNY, Saint Vincent's Catholic Medical Centers of New York and
its debtor-affiliates, and the Official Committee of Unsecured
Creditors approved by the U.S. Bankruptcy Court or the Southern
District of New York on December 29, 2005.

DASNY has opposed the approval of the Disclosure Statement, but
certain of the objections raised were deferred until the hearing
on the confirmation of the Debtors' First Amended Plan.

Specifically, DASNY has contended that the Plan does not provide
for the treatment of the DASNY Subordinated Claims in a manner
that is consistent with the provisions of the December 29
Stipulation and thus cannot be confirmed.

Accordingly, to resolve their dispute, the parties stipulate that
in full payment and satisfaction of the DASNY Subordinated
Claims:

  -- the Debtors will shall pay DASNY $2,865,721, together with
     accretions accruing from the Effective Date until the 2nd
     Effective Date Anniversary on the amount of the $2,865,721
     outstanding at DASNY's cost of funds, beginning on the 2nd
     Effective Date Anniversary, in 16 equal installments to be
     made on a quarterly basis over a four-year period; and

  -- DASNY will receive a subordinated beneficial interest in
     the Litigation Trust totaling $3,900,000, plus DASNY's
     reasonable legal fees and expenses incurred in the Debtors'
     Chapter 11 cases in an amount to be agreed upon by the
     Debtors and DASNY or in the absence of agreement as
     determined by the Bankruptcy Court.

The DASNY Litigation Trust Claim will be entitled payment under
the Litigation Distribution Schedule, which will be modified
from the Litigation Distribution Schedule in the Plan.

The Litigation Distribution Schedule means the distribution of
Litigation Claims Proceeds and other Litigation Trust Assets by
the Litigation Trust in this manner:

  * First, to pay Litigation Claims Costs;

  * Second, to Reorganized SVCMC to pay back the Litigation
    Trust Loan;

  * Third, to pay down the remaining principal portion of the
    GUC Litigation Trust Interest;

  * Fourth, to pay down the accreted portion of the GUC
    Litigation Trust Interest;

  * Fifth, after the GUC Litigation Trust Interest is satisfied
    in full and until the Secured Obligation is paid in full,
    50% to pay down the Secured Obligation and 50% to the
    MedMal Trusts, allocated among the MedMal Trusts in
    accordance with their respective Pro Rata Shares, and
    applied to obligations under the MedMal Trust Funding
    Schedule in inverse order of maturity;

  * Sixth, after the Secured Obligation is paid in full and
    until the Unsecured Obligation is paid in full, 50% to pay
    down the Unsecured Obligation and 50% to the MedMal Trusts,
    allocated among the MedMal Trusts in accordance with their
    respective Pro Rata Shares, and applied to obligations
    under the MedMal Trust Funding Schedule in inverse order of
    maturity;

  * Seventh, to the MedMal Trusts until Reorganized SVCMC's
    payments under the MedMal Trust Funding Schedule will have
    been fully paid or the obligation to make those payments
    will have ceased and all required Shortfall Payments due,
    outstanding, and unpaid at the time of distribution will
    have been paid in full;

  * Eight, to the Pension Plan until the Pension Plan is fully
    funded under applicable ERISA requirements and all minimum
    funding requirements up until the date of payment under this
    eighth payment level have been paid in full;

  * Ninth, to DASNY until the DASNY Litigation Trust Claim is
    paid in full;

  * Tenth, to the Pension Plan.

DASNY also consents to the release of all security interests in
and mortgages on the Debtors' property and assets securing the
DASNY Subordinated Claims.  On the Effective Date of the Plan,
those security interests and mortgages will be deemed released,
discharged and satisfied.

DASNY will be granted a mortgage on O'Toole Real Estate to
secure payment of only the DASNY Secured Claim, which mortgage
will be subordinate in priority and payment only to SVCMC's exit
financing and any replacement financing.

The parties' Stipulation will be effective only upon approval of
the Court.

DASNY notes that if the Court does not approve the Stipulation,
the current treatment of the DASNY DIP Loan Claim under the First
Amended Plan violates its rights and renders the First Amended
Plan unconfirmable.

Accordingly, DASNY reserves its rights to prosecute its objection
to confirm the First Amended Plan if the Stipulation is not
approved.

                        About Saint Vincent's

Based in New York City, Saint Vincent's Catholic Medical Centers
of New York -- http://www.svcmc.org/-- the healthcare provider in
New York State, operates hospitals, health centers, nursing homes
and a home health agency.  The hospital group consists of seven
hospitals located throughout Brooklyn, Queens, Manhattan, and
Staten Island, along with four nursing homes and a home health
care agency.

The company and six of its affiliates filed for chapter 11
protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945
through 05-14951).  Gary Ravert, Esq., and Stephen B. Selbst,
Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter
11 cases.  On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil,
Gotshal & Manges LLP took over representing the Debtors in their
restructuring efforts.  Martin G. Bunin, Esq., at Thelen Reid &
Priest LLP, represents the Official Committee of Unsecured
Creditors.  As of Apr. 30, 2005, the Debtors listed $972 million
in total assets and $1 billion in total debts.  The Debtors filed
their Chapter 11 Plan of Reorganization accompanying a disclosure
statement explaining that Plan on Feb. 9, 2007.  On June 1, 2007,
the Debtors filed an Amended Plan & Disclosure Statement.  (Saint
Vincent Bankruptcy News, Issue No. 59  Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


SOUNDVIEW HOME: Moody's Rates Class M-10 Certificates at Ba1
------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by Soundview Home Loan Trust 2007-OPT2 and
ratings ranging from Aa1 to Ba1 to the subordinate certificates in
the deal.

The securitization is backed by adjustable-rate and fixed-rate,
first lien, subprime residential mortgage loans originated by
Option One Mortgage Corporation.  The ratings are based primarily
on the credit quality of the loans and on the protection against
credit losses by subordination, overcollateralization, and excess
spread.  The ratings also benefit from an interest rate swap
agreement and an interest rate cap agreement both provided by The
Bank of New York.  Moody's expects collateral losses to range from
5.70% to 6.20%.

Option One Mortgage Corporation will service the mortgage loans in
the transaction.  Moody's assigned Option One its servicer quality
rating of SQ2+ as a primary servicer of subprime residential
mortgage loans.

The complete rating actions are:

Soundview Home Loan Trust 2007-OPT2

Asset-Backed Certificates, Series 2007-OPT2

    -- Cl. I-A-1, Assigned Aaa
    -- Cl. II-A-1, Assigned Aaa
    -- Cl. II-A-2, Assigned Aaa
    -- Cl. II-A-3, Assigned Aaa
    -- Cl. II-A-4, Assigned Aaa
    -- Cl. M-1, Assigned Aa1
    -- Cl. M-2, Assigned Aa2
    -- Cl. M-3, Assigned Aa3
    -- Cl. M-4, Assigned A1
    -- Cl. M-5, Assigned A2
    -- Cl. M-6, Assigned A3
    -- Cl. M-7, Assigned Baa1
    -- Cl. M-8, Assigned Baa2
    -- Cl. M-9, Assigned Baa3
    -- Cl. M-10, Assigned Ba1


SPECIALTY UNDERWRITING: Losses Prompt S&P to Lower Ratings
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on five
classes issued by Specialty Underwriting and Residential Finance
Trust Series 2003-BC2 and 2003-BC3.  Of the five lowered ratings,
S&P placed one on CreditWatch with negative implications, and S&P
removed the ratings on three from CreditWatch negative.
Furthermore, S&P affirmed its ratings on the remaining classes
from these two transactions.

The lowered ratings reflect a continuous increase in realized
losses, which has depleted overcollateralization and caused
monthly losses to significantly outpace monthly excess interest.

As of the June 25, 2007, distribution date, the failure of excess
interest to cover monthly losses has caused O/C to fall
approximately 58% below its target balance.  Cumulative losses
range from 1.41% (series 2003-BC3) to 2.09% (series 2003-BC2) of
the original pool balances.  In addition, 90-plus-day
delinquencies range from 12.26% (series 2003-BC3) to 19.59%
(series 2003-BC2) of the current pool balances.

Standard & Poor's will continue to closely monitor the performance
of the class M-2 certificates from series 2003-BC2.  If losses
continue to outpace excess spread, S&P will take further negative
rating action on this class within the next several months.
Conversely, if this trend reverses, S&P will affirm the rating and
remove it from CreditWatch.

S&P removed the ratings on classes B-1 and B-2 from series 2003-
BC2 and the rating on class B-3 from series 2003-BC3 from
CreditWatch negative because they were lowered to 'CCC'.
According to Standard & Poor's surveillance practices, ratings
lower than 'B-' on classes of certificates or notes from RMBS
transactions are not eligible to be on CreditWatch negative.

The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings on these securities.

Credit support for these transactions is derived from a
combination of subordination, excess interest, and O/C.  The
collateral supporting these transactions consists of subprime
mortgage loans.

                         Rating Lowered

       Specialty Underwriting and Residential Finance Trust
               Mortgage pass-through certificates

                                        Rating
                                        ------
          Series    Class          To             From
          ------    -----          --             -----
          2003-BC3  B-2            B              BBB

        Rating Lowered and Placed on Creditwatch Negative

       Specialty Underwriting and Residential Finance Trust
               Mortgage pass-through certificates

                                         Rating
                                         ------
         Series    Class          To               From
         ------    -----          --               ----
         2003-BC2  M-2            BBB/Watch Neg    AA

      Ratings Lowered and Removed from Creditwatch Negative

       Specialty Underwriting and Residential Finance Trust
                Mortgage pass-through certificates

                                         Rating
                                         ------
          Series    Class          To             From
          ------    -----          --             -----
          2003-BC2  B-1            CCC            BBB/Watch Neg
          2003-BC2  B-2            CCC            B/Watch Neg
          2003-BC3  B-3            CCC            BB-/Watch Neg

                        Ratings Affirmed

     Specialty Underwriting and Residential Finance Trust
                Mortgage pass-through certificates

        Series     Class                        Rating
        ------     -----                        ------
        2003-BC2   S                            AAA
        2003-BC2   M-1                          AAA
        2003-BC3   A                            AAA
        2003-BC3   S                            AAA
        2003-BC3   M-1                          AAA
        2003-BC3   M-2                          AA
        2003-BC3   M-3                          A
        2003-BC3   B-1                          BBB+


SPECTRUM BRANDS: Global Operations President K. Biller to Retire
----------------------------------------------------------------
Kenneth V. Biller, President of Global Operations of Spectrum
Brands, Inc., disclosed his retirement from the company effective
Sept. 30, 2007.  Mr. Biller's responsibilities will be assumed by
other members of Spectrum's senior management team.

"Ken is completing a distinguished 35 year career with Spectrum
Brands during which he was integral to the company's growth from a
locally owned Midwestern battery manufacturer to a global, multi-
brand consumer products company," Kent Hussey, Chief Executive
Officer, said.  "His expertise and leadership were instrumental to
the successful integration of our acquisitions, and he most
recently spearheaded the consolidation of Spectrum Brands' Global
Operations division into our Global Batteries & Personal Care,
Home & Garden and Global Pet Supplies business units.  Throughout
his years at the company, Ken has been a relentless advocate of
quality, efficiency and superior technology, and a mentor to many
of our senior managers.  We wish Ken all the best in his well-
earned retirement."

Mr. Biller, 59, joined Rayovac Corporation in 1972 and held a
series of management positions in technology and manufacturing
operations.  He was appointed Senior Vice President of Operations
in 1998 and a year later was named Executive Vice President of
Operations.  In 2005 he became President of Global Operations,
with responsibility for nearly 6000 employees around the globe.
His many accomplishments include the integration and consolidation
of technology, manufacturing and supply chain operations acquired
along with VARTA AG in Germany in 2002, Remington Products LLC in
2003, Brazilian battery manufacturer Microlite S.A. and Ningbo
Baowang China Battery Company in 2004, and United Industries and
Tetra GmbH in 2005.

Mr. Biller currently serves on the Dean's Advisory Board for the
University of Wisconsin's School of Business and in recent years
has served as a member of the Advisory Board for the University of
Wisconsin Operations and Technology Management program.  He holds
a Bachelor of Science in chemical engineering and a Masters of
Business Administration from the University of Wisconsin.

                     About Spectrum Brands

Headquartered in Atlanta, Georgia, Spectrum Brands (NYSE: SPC)
-- http://www.spectrumbrands.com/-- is a consumer products
company and a supplier of batteries and portable lighting, lawn
and garden care products, specialty pet supplies, shaving and
grooming and personal care products, and household insecticides.
Spectrum Brands' products are sold by the world's top 25 retailers
and are available in more than one million stores in 120 countries
around the world.  The company has manufacturing and distribution
facilities in China, Australia and New Zealand, and sales offices
in Melbourne, Shanghai, and Singapore.

                           *     *     *

As reported in the Troubled Company Reporter on April 30, 2007,
Fitch Ratings affirmed the ratings of Spectrum Brands Inc.,
including its CCC issuer default rating, its CCC- rating of the
company's $700 million 7-3/8% senior subordinated note due 2015
and its CCC- rating of the company's $350 million 11.25% Variable
Rate Toggle Interest pay-in-kind Senior Subordinated Note due
2013.  The Outlook remains Negative.


SYNCHRONOUS AEROSPACE: Moody's Rates Proposed $95 Mil. Loan at B2
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 first time rating to
Synchronous Aerospace Group's proposed $95 million senior secured
credit facility consisting of a $75 million term loan due 2014 and
a $20 million revolver due 2013.  Also, Moody's assigned to
Synchronous a B2 Corporate Family Rating.  The rating outlook is
stable.

The purpose of the proposed credit facilities is to partially fund
the acquisition of the company by LJ Synch Holdings, Inc., an
affiliate of private equity group Littlejohn & Co., LLC.

On June 29, 2007, LJ Synch Holdings entered into a definitive
agreement to acquire all of the outstanding stock of Synchronous.
This acquisition will be partially funded by an equity investment
from Littlejohn and management.  The balance will be funded
through use of a $75 million senor secured term loan facility.
The senior secured credit facility also includes a $20 million
revolving credit facility, which is expected to be un-drawn upon
close of the acquisition financing.

Synchronous' ratings reflect the company's relatively high debt
levels resulting from LBO financing, its small and concentrated
sales base, and integration risk associated with operating
transformations that the company has undertaken in its relatively
short history.  The ratings also take into account Moody's
concerns over the company's thin projected free cash flow levels,
and risk to the stability of these cash flows in the event of
unexpected market developments.

Despite these risks, the company's high level of revenue
predictability based on its role as a supplier of key components
to leading aircraft OEM's in along with a trend of improving
operating margins suggests that cash flow and credit metrics will
improve in the near-term to levels more consistent with a B2
rating.

The stable rating outlook reflects Moody's expectations that
Synchronous will maintain operating margins at least at current
levels through FY 2008, resulting in modestly positive free cash
flow over the near term. Such cash generation would likely result
in a small amount of debt repayment in FY 2008, with improvements
in credit metrics to levels more strongly supportive of a B2
rating.

Ratings or their outlook could be subject to downward revision if
sales levels drop due to unexpected reduction in OEM delivery
levels, or the loss of a significant contract, or if margins were
to deteriorate as a result of poor prolonged industry conditions
or increased competitive pressures.  Ratings could also be lowered
if debt is increased for any reason, for large levered
acquisitions or equity distributions in particular.  These credit
metric levels may result in a downgrade:

Leverage: Debt/EBITDA in excess of 7.5 times;

Interest Coverage: EBIT/Interest below 1 time;

Cash Flow: Retained cash flow/Debt below 5%; or

Margins: Operating Margin below 10%.

Ratings or their outlook could be raised if the company could
expand its sales and customer base while maintaining margins
without substantial impairment of cash flow generation by unduly
large increases in working capital or CAPEX spending.  An upgrade
or positive outlook would be most likely if improvements in
operating performance result in substantial reduction in debt.
These credit metric levels may positively affect ratings:

Leverage: Debt/EBITDA below 5 times;

Interest Coverage: EBIT/Interest of greater than 1.7 times; and

Cash Flow: Retained cash flow/Debt in excess of 10%.
These ratings have been assigned:

Synchronous Aerospace Group:

-- Senior secured credit facilities at B2 (LGD3, 33%)

-- Corporate Family Rating of B2

-- Probability of Default Rating of B3

The B3 Probability of Default rating was assigned one notch below
the Corporate Family Rating due to an assumed family loss given
default rate of 35% considered in Moody's loss given default
methodologies.  The lower loss/higher recovery rate assumption was
used since the entirety of the company's debt structure comprises
first lien secured bank debt.

Synchronous Aerospace Group headquartered in Santa Ana, CA, is a
manufacturer of structural components for the commercial and
military aerospace and space industries.


SYNCHRONOUS AEROSPACE: S&P Rates Proposed $95MM Facility at B
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Synchronous Aerospace Group.  The outlook is
stable.  At the same time, Standard & Poor's assigned its 'B'
rating and '3' recovery rating to the company's proposed
$95 million senior secured credit facility, indicating
expectations of a meaningful (50%-70%) recovery in the event of
payment default.

"The ratings on Synchronous Aerospace reflect a highly leveraged
financial profile, a small revenue base with limited customer and
program diversity, and the cyclical and competitive nature of the
commercial aerospace market," said Standard & Poor's credit
analyst Christopher DeNicolo.  "These factors are offset somewhat
by currently strong demand for commercial aircraft and long term
agreements with customers," the analyst continued.

The proceeds from the new credit facility will be used to
partially finance the acquisition of the company by an affiliate
of Littlejohn & Co. LLC, a private equity firm.  Leverage will be
high at close, with debt to EBITDA of almost 5x.  Other credit
protection measures will also be weak, with funds from operations
to debt in the 10%-15% range and EBITDA interest coverage about
2x.  Some improvement is expected as earnings grow and debt is
repaid with excess cash flows.

Santa Ana, California-based Synchronous Aerospace is a Tier II
supplier of highly complex machined parts, assemblies, kits, and
replacement spare parts mostly for commercial aircraft, but also
military fixed wing aircraft, military rotorcraft, and space.
Production of commercial aircraft has been increasing steadily
since bottoming out in 2003 and should continue to rise in the
near term.  However, the industry is cyclical and there is a fair
amount of competition at this level of the supply chain.  Military
aircraft and rotorcraft production has been supported by high
levels of defense spending and the start of new programs.
Customer and program diversity is somewhat limited, but the
company participates on several popular, mostly Boeing Co.,
commercial aircraft programs and most business is under long term
agreements with leading OEMs.

The company has grown through a series of acquisitions, mostly of
entities that were having financial or operational difficulties.
Profitability has been increasing steadily as operations improve
at the acquired facilities and unprofitable contracts are
renegotiated or exited.  Operating margins are expected to be
good, although the absolute amount of earnings is small.

Increasing production of commercial aircraft is expected to
support revenue growth in the intermediate term.  Improving
profitability and debt reduction using excess cash flows should
enable the company to maintain a financial profile consistent with
current ratings.  S&P does not expect to revise the outlook to
positive or negative in the near term.


TEXAS SOUTHERN: Moody's Cuts Bond's Rating to Ba3 & Retains Watch
-----------------------------------------------------------------
Moody's downgraded Texas Southern University's underlying Revenue
Financing System bond rating to Ba3 from Baa3 and the rating
remains on watchlist for further downgrade.

The continued watchlist is based on Moody's continued concern
regarding the enrollment, financial, managerial, and governance
stability of the University as well as the continued level of
state oversight and support.  The underlying Ba3 rating action
applies to $111 million of Revenue Financing System bonds,
detailed at the end of this report.  Moody's rates the
University's constitutional appropriation bonds at the Aa2 level,
based on an appropriation in the Texas State constitution.

                          Legal Security

A pledge of Revenue Funds, which includes the revenues, incomes,
receipts, rentals, rates, charges, fees, grants, and tuition
levied or collected from any public or private source by the
University.  Debt service reserve fund.

                            Strengths

As a public university long dedicated to serving African-American
students and an urban education mission in Houston, TSU has
received strong support from the Aa1-rated State of Texas during
periods of financial difficulties.  In the recent biennial
session, the University received a supplemental appropriation for
the current fiscal year of 2007 of over $13.6 million.  Full
receipt of this funding, however, is contingent upon a
reorganization plan to be approved by the Legislative Budget Board
and the Governor, or the placing of the University under
conservatorship.  The legislature also approved $25 million of
supplemental appropriations for fiscal years 2008 and 2009
($12.5 million each year) with the same contingency in place.
Further, the University received authority for additional tuition
revenue bonds.

About 90% of the University's outstanding revenue financing system
bonds are "tuition revenue bonds" for which TSU receives debt
service reimbursement from the State.  The State, however, is not
legally obligated to provide this funding and the actual payment
obligation is TSU's alone.

                          Challenges

The University's ongoing viability is contingent upon continued
strong state support.  Moody's believes there is significant
uncertainty regarding political decisions surrounding the future
of the University.

Management, governance, and oversight of the University remain in
flux.  The University's nine-member board was forced to resign and
was replaced by a new five member board in May.  The President and
Chief Financial Officer positions remain filled on an interim
basis, and there has been a change in the interim financial
officer since Moody's last report.  It is not clear when a
reorganization plan will be complete to facilitate the release of
the supplemental appropriations, nor is it clear what level of
oversight of the University's financial operations will be
provided by the state.

The University's financial condition is such that it required a
supplemental appropriation to conclude fiscal year 2007. It now
has essentially no financial reserves.  An external auditor,
Deloitte and Touche, was hired to conclude an audit for fiscal
years 2006 and 2005 but was unable to do so due to the poor
condition of the University's records and internal controls.
Moody's believes the accuracy of any reported data is uncertain
and unreliable, and prior year audited financial statements might
also be not fully reliable.

Failure to make timely debt service payments on two separate
occasions within the past two years despite having sufficient
funds on hand to do so, in part due to inadequate staffing and
procedures.  It is unclear that appropriate administrative systems
have been put in place to prevent a reoccurrence of these
problems.

The University's payment ability on related and contingent
obligations is questionable.  In 2004, the University financed
parking improvements through the use of a limited liability
corporation, with payment ultimately secured by a mandatory
student fee that the University agreed to levy and transfer to the
bond trustee.  The student fee was never levied and management
reports that the bonds are in default.  Similarly, 2003 bonds also
issued under an LLC structure for student housing are in danger of
default due to construction problems and inadequate project
performance.

Under an occupancy agreement related to this financing, the
University agreed to lease vacant rental units in order to achieve
break-even occupancy of 95%.  The nature of the University's
obligations under both these transactions has led Moody's to
classify and view them as direct debt obligations of TSU, with
default on these transactions having significant negative impact
on Moody's view of the University's ability and willingness to pay
on all obligations.  Finally, payments under a disputed energy
conservation contract entered into the 1990s remain in litigation.

Expected enrollment declines, with management projecting a 15%
drop for Fall 2007, following on a 5% decline over the past two
years. Fall 2006 enrollment stood at over 9,800 full-time
equivalent students.

Management reports that a federal audit of the University's
financial aid program is expected this fall.  The University's
mismanagement of its financial aid programs led to its last fiscal
crisis in the mid-1990s, which also resulted in a state bail-out
at that time.

Moody's remains concerned about TSU's future accreditation by the
Southern Association of Colleges and Schools.  At this point, no
public action has been taken regarding accreditation for the
University.  However, accrediting actions are frequently taken in
cases where financial viability and unstable management and
governance are present; should the University lose its full
accreditation, the enrollment and financial impact could be
severe.
                           Outlook

The rating remains on watchlist for potential further downgrade.
Moody's will be monitoring the continued evolution of state
support and oversight for the University, enrollment trends, the
federal audit of the university's financial aid programs, and any
potential accreditation issues that arise from the university's
governance, administrative, and financial turmoil.

What could change the rating - Up

Strong action at the state level to provide fiscal support and
oversight for the University and an ability to demonstrate
stabilized enrollment and revenues in support of debt service.

What could change the rating - Down

Failure by the state to provide the necessary level of financial
support and oversight to enable the University to recover from its
latest crisis, change of federal financial aid status, loss of
accreditation, larger than expected enrollment declines.

Ten year rating history:

July 2007: Rating downgraded to Ba3 and remains on watchlist for
downgrade

April 2007: Rating downgraded to Baa3, from A3, remains on
watchlist for downgrade

February 2007: Constitutional Appropriation Bonds downgraded to
Aa2 from Aa1

January 2007: Rating placed on watchlist for downgrade

June 2006: Negative outlook placed on rating at A3 level

March 2004: Rating upgraded to A3 from Baa1

May 2003: Rating outlook changed to positive at the Baa1 level

March 2002: Rating upgraded to Baa1 from Baa3

March 1998: Baa3 rating assigned to Series 1998 Bonds

Key data and ratios

Total FTE Enrollment: 9,807

Total Direct Debt: $111 million of Revenue Financing System,
$38 million Constitutional Appropriation Bonds, $25 million of
Houston Student Housing II LLC bonds, and $35 million of Crawford
Educational Facilities Corporation Bonds

Reliance on State Funding: 45.5%

State of Texas Rating: Aa1, Stable

Rated Debt

Revenue Financing System Bonds:

-- Series 1998 A-1, Series 2002: Ba3, Aaa insured (MBIA)
-- Series 1998 A-2 and B, Series 2004: Ba3, Aaa insured (Ambac)
-- Series 2003: Ba3, Aaa insured (FGIC)

Constitutional Appropriation Bonds:

-- Series 2004 and 2005: Aa2

Crawford Education Facilities Corporation, University Parking
System Project:

-- Aa2/VMIG1 based on credit facility from BNP Paribas


VERTIS INC: American Color Merger Cues Moody's to Review Ratings
----------------------------------------------------------------
Moody's Investors Service placed the ratings of Vertis, Inc. under
review for possible downgrade following the announcement that the
company plans to merge with American Color Graphics, Inc.

Ratings placed under review for possible downgrade:

Vertis, Inc.

    -- $350 million 10.875% senior notes due 2009 - Caa1

    -- $293 million 13 1/2% senior subordinated notes due 2009 -
       Caa3

    -- $350 million 9 3/4% senior secured second lien notes due
       2009 - B1

    -- Corporate Family rating - Caa1

    -- Probability of Default rating - Caa1

The review for possible downgrade reflects Moody's expectation of
a recapitalization as well as heightened concern regarding the
companies' weak financial metrics, strained liquidity and the
pressure of approaching debt maturities.

The rating review will consider:

   i. the probability that the companies will successfully
      conclude the proposed merger;

  ii. the likelihood that debt holders will face losses if the
      expected recapitalization involves an exchange of notes at
      less than full value, or if debtholders interests are
      otherwise compromised; and

iii. the ability of ACG to fund its near- term interest expense
      obligations and the ability of both companies to fund
      scheduled maturities of principal, absent a restructuring.

Vertis and ACG recently announced that both have signed a non-
binding letter of intent to merge their businesses.  Management of
both companies expect to conclude a definitive merger agreement by
Aug. 13, 2007, which will be subject to the amendment, refinancing
or payment in full of the companies' senior secured credit
facilities and the successful exchange of the companies'
outstanding notes.  Management expects that the merger will result
in significant synergies.

Vertis Inc., a leading provider of integrated advertising products
and marketing services, recorded revenues of $1.4 billion for the
LTM period ended March 31, 2007.  The company is headquartered in
Baltimore, Maryland.


WR GRACE: Judge Fitzgerald Okays Sale of Washcoat Business
----------------------------------------------------------
The Hon. Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware authorized W.R. Grace & Co. and its debtor-
affiliates to sell their Washcoat Business to Rhodia, Inc., for
$21.9 million.

Judge Fitzgerald rules that the proposed Break-Up Fee will not be
paid to Rhodia pending further determination by the Court that
the amount of that fee bears a reasonable relationship to
Rhodia's costs and expenses.

The insurance policies issued by the Fireman's Fund Insurance
Company and its rights under certain agreements it entered with
the Debtors will not be assumed and assigned or otherwise
transferred to Rhodia, the Court rules.

The Debtors are directed to execute termination statements,
instruments of satisfaction, releases of all Liens of the
Acquired Assets on behalf of any person or entity, including the
treasurer of Hamilton County, that has filed financing
statements, mortgages and mechanic's liens.

                      About W.R. Grace

Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub,
P.C., represent the Debtors in their restructuring efforts.  The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants.  The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.

The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004.  On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement.  The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005.  The
Debtors' exclusive period to file a chapter 11 plan expires on
July 23, 2007.

At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.  (W.R.
Grace Bankruptcy News, Issue No. 133; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WR GRACE: Responds to Exclusive Periods Extension Plea Objections
-----------------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates obtained permission
from the U.S. Bankruptcy Court for the District of Delaware to
file a reply to address the objections of the  Asbestos Personal
Injury Committee, the Asbestos Property Damage Committee, and the
Future Claims Representative to the Debtors' tenth request to
extend their exclusive periods to file a plan of reorganization
and solicit acceptances of that plan.

The Debtors assert that global negotiations of the asbestos
claims have failed whereas individual negotiations with key
constituents have proven to be effective.

James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub, LLP, in Wilmington, Delaware, relates that in the
past months, settlement of asbestos claims has been pursued on
two paths:

  * One involving global settlement of both property damage and
    personal injury claims, and

  * The other involving settlement of PD claims before the
    settlement of PI Claims.

Both settlement processes have been active, Mr. O'Neill tells the
Court.  In effect, agreements have been executed or settlements-
in-principle have been reached with all but two firms, Speights &
Runyan and Motley Rice.

The Debtors are also engaged in individualized negotiations with
the counsel for the Zonolite Attic Insulation claimants regarding
how to address potential ZAI claims.  The Debtors believe that
success with respect to the resolution of the treatment of PI
Claims under a plan of reorganization will only occur if the
discussions involve the key attorneys representing PI claimants,
not merely Committee counsel.

The Debtors also assert that the Asbestos Constituents "new"
argument in favor of a briefing schedule was earlier rejected by
the Court and promises only distraction that will not result in a
quicker exit from Chapter 11.

Accordingly, the Debtors ask the Court to overrule the Asbestos
Constituents' objections and extend their exclusive periods.

               Cal. Gen. Services Dept. Responds

The California Department of General Services argues that the
Debtors presented an incomplete and misleading picture of the
extent of their efforts and progress in resolving the asbestos
claims.

The Debtors stated that they have reached settlements with all
law firms except Speights & Runyan and Motley Rice.  However, the
Debtors have not even initiated or engaged in any settlement
discussions with the Gen. Services Department nor its counsel
regarding the Debtors' "product identification" objections to
which the Court overruled in June 2007,  Leslie Heilman, Esq., at
Ballard Spahr Andrews & Ingersoll, LLP, in Wilmington, Delaware,
reports.

The Debtors sweeping representation about its settlement efforts
and disregard of the Department's PD Claims are particularly
curious, Ms. Heilman notes, given the Debtors' indication in open
Court that they were not interested in pursuing mediation while
its summary judgment motion on statute of limitations ground were
still pending.

                       Debtors Talk Back

The Debtors acknowledge that, in addition to the claims
represented by Speights & Runyan and Motley Rice, PD claims
asserted by the Gen. Services Department and by the owners of the
Macerich Fresno shopping mall and a claim relating to the Solow
case in New York remain and have not been subject to settlement
discussions.

In the case of the Department and Macerich, the claims are the
subject of dispositive motions argued to the Court that are
currently under advisement, Mr. O'Neill says.  The Solow claim
relates to a matter for which judgment was entered against the
Debtors before the Petition Date, the judgment is on appeal, and
the Court previously denied an effort to lift the automatic stay
to complete the appeal.

The Debtors are not ignoring these claims, Mr. O'Neill asserts.
These claims were simply not addressed in the discussion of
settled claims due to their procedural posture.

            Anderson Supports Asbestos Constituents
                and U.S. Trustee's Objections

Anderson Memorial Hospital, individually and on behalf of several
claimants, supports the objections of the Asbestos Constituents
and the U.S. Trustee.

                      About W.R. Grace

Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub,
P.C., represent the Debtors in their restructuring efforts.  The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants.  The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.

The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004.  On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement.  The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005.  The
Debtors' exclusive period to file a chapter 11 plan expires on
July 23, 2007.

At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.  (W.R.
Grace Bankruptcy News, Issue No. 134; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WELLMAN INC: Posts $11.4 Million Net Loss in Qtr. Ended June 30
---------------------------------------------------------------
Wellman Inc. reported a net loss of $11.4 million for the quarter
ended June 30, 2007.  This compares to a net loss of
$11.7 million for the same period in 2006.

For the first six months of 2007, Wellman reported a net loss of
$38.7 million, compared to a net loss from continuing operations
attributable to common stockholders of $33.4 million for the same
period in 2006.

For the quarter ended June 30, 2007, the company generated net
sales of $333.7 million, compared with $345.2 million for the
quarter ended June 30, 2006.

At June 30, 2007, the company had accounts receivable of
$186 million, inventories of $146 million, and net debt of
$600 million.

Tom Duff, Wellman's chairman and chief executive officer, stated,
"Demand for PET resins remained strong in the second quarter.
Force majeures on PTA and PIA kept the NAFTA PET resin market
tight by limiting the introduction of net capacity additions into
the market.  In addition, as part of our strategy to focus on our
U.S. chemical-based business, we have agreed to sell our European
recycled-based polyester staple fiber business to an affiliate of
AURELIUS AG, a publicly traded group focused on investing in
medium-sized industrial companies.  The sale is expected to be
completed this week."

Keith Phillips, Wellman's Chief Financial Officer, stated, "Our
second quarter 2007 EBITDA, as defined, improved substantially,
compared to first quarter 2007, as a result of continued strong
PET resin demand and improved PET resin margins."

                         About Wellman

Wellman Inc. manufactures and markets PET (polyethylene
terephthalate) packaging resins under the PermaClear brand name
and polyester staple fibers under the Fortrel brand name.

                         *     *     *

Moody's Investors Service confirmed the B3 corporate family rating
for Wellman, Inc., and the existing ratings on the company's debt
and revised the outlook to negative.  Moody's also rates $265
Million Second Lien Term Loan due 2010 at Caa1.


WELLS FARGO: Fitch Rates $2.5 Million Class B-7 Certs. at B
-----------------------------------------------------------
Fitch rates Wells Fargo mortgage asset-backed pass-through
certificates, series 2007-PA4, as:

  -- $538,704,100 classes I-A-1, I-A-2, I-A-IO, I-A-R, II-A-1,
     II-A-2, II-A-IO, III-A-1, III-A-2, III-A-IO, IV-A-1, IV-A-2,
     IV-A-IO, V-A-1 and V-A-IO (senior certificates) 'AAA';

  -- $13,431,000 class B-1 'AA';

  -- $4,573,000 class B-2 'A+';

  -- $2,000,000 class B-3 'A';

  -- $1,429,000 class B-4 'A-';

  -- $2,286,000 class B-5 'BBB';

  -- $4,572,000 class B-6 'BB';

  -- $2,573,000 class B-7 'B'.

The 'AAA' ratings on the senior certificates reflect the 5.75%
subordination provided by the 2.35% class B-1, the 0.8% class B-2,
the 0.35% class B-3, the 0.25% class B-4, the 0.4% class B-5, the
0.8% privately offered class B-6, the 0.45% privately offered
class B-7, and the 0.35% privately offered class B-8.  The ratings
on the class B-1, B-2, B-3, B-4, B-5, B-6 and B-7 certificates are
based on their respective subordination.  Class B-8 is not rated
by Fitch.

Fitch believes the amount of credit enhancement available will be
sufficient to cover credit losses.  The ratings also reflect the
high quality of the underlying collateral, the integrity of the
legal and financial structures, and the primary servicing
capabilities of Wells Fargo Bank, N.A. rated 'RPS1' by Fitch.

The certificates represent ownership interests in a trust fund
that consists of five pools of mortgage loans.  The senior
certificates whose class designation begins with I, II, III, IV
and V, correspond to pools I, II, III, IV and V, respectively.  In
certain limited circumstances, principal and interest collected
from loan group I, II, III, IV or V may be used to pay principal
or interest, or both, to the senior certificates related to the
other of those five loan groups.

The transaction consists of 1,445 fully amortizing, one- to four-
family, adjustable-rate mortgage loans that provide for a fixed
interest rate during an initial period of approximately 77 months,
with remaining weighted average term to maturity of approximately
358 months.  Thereafter, the interest rate will adjust on an
annual basis.  The interest rate of each mortgage loan will adjust
to equal the sum of the index and a gross margin.  Approximately
80.65% of the mortgage loans are interest-only loans, which
require only payments of interest generally until the month
following the first adjustment date.

The aggregate unpaid principal balance of the pool is $571,572,575
as of July 1, 2007, and the average principal balance is $395,552.
The weighted average original loan-to-value ratio of the loan pool
is approximately 74.53%; 11.42% of the loans have an OLTV greater
than 80%.  The weighted average coupon of the mortgage loans is
6.655%, and the weighted average FICO score is 731.  The states
that represent the largest geographic concentration are California
(47.38%), Florida (9.12%), and New York (5.54%).  All other states
represent less than 5% of the outstanding balance of the pool.


XEROX CORP: Earns $266 Million in Quarter Ended June 30
-------------------------------------------------------
Xerox Corporation's net income increased 2% to $266 million for
the three months ended June 30, 2007 from net income of
$260 million for the three months ended June 30, 2006.

Total revenues also increased 6% to $4,208 million for the three
months ended June 30, 2007 from total revenues of $3,977 million
for the three months ended June 30, 2006.

Post-sale and financing revenue increased 7 percent.  Both total
revenue and post-sale revenue included a currency benefit of
2 percentage points as well as the benefit from Xerox's
acquisition of Global Imaging Systems, which was completed in
early May.

The company's balance sheet at June 30, 2007 showed total assets
of $23,006 million, total liabilities of $15,457 million, and
total common shareholders' equity of $7,549 million.

"Our results in the second quarter reflect the strategic
importance of annuity and acquisitions flowing through to boost
revenue and strengthen our position in the marketplace," said
Anne M. Mulcahy, Xerox chairman and chief executive officer.
"With the Global Imaging team now on board, we've increased our
reach to U.S. small and mid-size businesses by 50 percent.  At the
same time, our investment in delivering the industry's broadest
portfolio of color technology is paying off with the annuity from
our color business increasing 16 percent.  And, Xerox's global
relationships with large customers are contributing to annuity
growth from our consulting and managed services business."

During the second quarter, the company's install activity
increased 54% for its color multifunction devices that print,
copy, fax and scan.  In addition, activity grew for color
production systems as more commercial printers and graphic arts
customers installed Xerox digital presses to meet their clients'
demand for personalization, book publishing and promotional
marketing materials.

Price declines and the mix of products sold continued to put
pressure on equipment sales revenue.  Xerox reported a 3% increase
in equipment sales revenue, which includes a 2-point benefit from
currency.

Since the beginning of the year, Xerox has introduced 28 new
products, 10 of which are color devices, doubling the 14 total
product launches in 2006.  More than two-thirds of Xerox's
equipment sales revenue comes from products launched in the past
two years.

Revenue from color grew 12 percent in the second quarter and now
represents 38 percent of Xerox's total revenue, up 4 points from
the second quarter of 2006.  Xerox color presses produce the
highest volume of pages in the industry and last year more than 30
billion color pages were printed on Xerox technology.  In the
second quarter, the number of color pages grew 30 percent, and now
represent 12 percent of total pages, up 3 points from the prior
year.  Color performance excludes Global Imaging Systems.

Through multiyear, multimillion dollar contracts, the company's
document management services generated more than $1.6 billion in
annuity revenue in the first half of the year, an 8 percent
increase in post-sale revenue from services.  Xerox recently
signed its largest services contract to date, finalizing a
seven-year deal with the United Kingdom's Department for Work
and Pensions for a Xerox-led group to serve as the department's
primary supplier of print and related services, supporting more
than 2,000 DWP offices across the U.K.

Gross margins were 40.3 percent, a less than one point decline
from second quarter of 2006.  Selling, administrative and general
expenses were 25.7 percent of revenue, about the same as the prior
year.  Xerox generated operating cash flow of $388 million in the
second quarter and closed the quarter with $870 million in cash
and short-term investments.

Since launching its stock buyback program in October 2005, the
company to date has repurchased about 117 million shares, totaling
$1.8 billion of its $2.5 billion program.

Xerox expects third-quarter 2007 earnings in the range of
24-26 cents per share.  The company increased its range of
earnings expectations for full-year 2007 to $1.16-$1.18.

                           About Xerox Corp.

Headquartered in Stamford, Connecticut, Xerox Corp. (NYSE: XRX)
-- http://www.xerox.com/-- develops, manufactures, markets,
services and finances a range of document equipment, software,
solutions and services.  Xerox operates in over 160 countries
worldwide and distributes products in the Western Hemisphere
through divisions, wholly owned subsidiaries and third-party
distributors.  The company maintains operations in France, Japan,
Italy, Nicaragua, and the United Kingdom, among others.

                             *     *     *

As reported in the Troubled Company Reporter on May 16, 2007,
Fitch Ratings placed Xerox Corp.'s trust preferred securities
rating at 'BB' with a stable outlook.  The rating still applies
to date.


* BOOK REVIEW: Bankruptcy: A Feast for Lawyers
----------------------------------------------
Author:     Sol Stein
Publisher:  Beard Books
Paperback:  341 pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1893122123/internetbankrupt

Described by the Chicago Tribune as a "latter-day version of
Dicken's Bleak House," this book is a shattering indictment of
bankruptcy law by a CEO who lived through the experience of a
Chapter 11.

The author exposes a system that is supposed to provide an
opportunity for troubled companies to reorganize, but kills more
than 70 percent of the businesses that take refuge in it while
enriching legions of lawyers.

In the nightmare world of Chapter 11, the gainers are seldom the
creditors or the debtor company, but rather the bankruptcy bar,
impeached in this book by its own conduct and the condemnation of
its ethical brethren.

Besides his own experience, the author draws examples from diverse
industries including trucking, food, real estate, oil and
publishing.

Sol Stein, the author of this book, was the former CEO of now-
defunct Stein and Day, one of the last independent American
publishing houses operating in the 1980s.

                             *********

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 ***