/raid1/www/Hosts/bankrupt/TCR_Public/071026.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, October 26, 2007, Vol. 11, No. 254
Headlines
1755 AQUA: Case Summary & 15 Largest Unsecured Creditors
ABITIBI-CONSOLIDATED: Inks Deal with US DOJ to Complete Merger
AEGIS MORTGAGE: Panel Wants Landis Rath as Delaware Counsel
AEGIS MORTGAGE: Panel Wants to Hire Hahn & Hessen as Co-Counsel
AGILENT TECH: Moody's Rates Proposed $500 Million Notes at Ba1
ALBERT LUCERO: Case Summary & 19 Largest Unsecured Creditors
ALERIS INTERNATIONAL: Consolidates Mexico Operations
ALIMENTATION COUCHE: S&P Revises Outlook to Positive from Stable
AMERICAN HOME: Wants Sale of GNMA Servicing Rights Approved
AMERICAN HOME: Panel, et al. Balk at GNMA Servicing Rights Sale
AMERICAN HOME: Committee Selects Cozen as Special Counsel
AMERIQUEST MORTGAGE: Moody's Reviews Ratings on 16 Tranches
AMERIQUEST MORTGAGE: Moody's Downgrades Ratings on 23 Certs.
AMORTIZING RESIDENTIAL: Realized Losses Cue S&P to Junk Ratings
ANDREW BAILEN: Case Summary & 20 Largest Unsecured Creditors
ANGIOTECH PHARMA: Low Revenues Cue Moody's to Downgrade Ratings
ANTONIO CHEVRES: Case Summary & 15 Largest Unsecured Creditors
ARGENT MORTGAGE: Moody's Lowers Rating on 23 Certificates
ATARI INC: BlueBay Buys $3 Million Guggenheim Debt Facility
BANKUNITED FINANCIAL: Earns $81.4 Million in Year Ended Sept. 30
BAYOU GROUP: Wants $106 Million in Funds Distributed to Creditors
BEECHGROVE REDEVELOPMENT: Case Summary & 39 Largest Creditors
BELLE HAVEN: Moody's Lowers and Reviews Ratings on Two Notes
BOWATER INC: Inks Deal with US DOJ to Complete Abitibi Merger
BRAND ENERGY: S&P Revises Outlook to Stable from Negative
C-BASS CBO: Moody's Lowers and Reviews Ratings on Two Notes
CABLEVISION SYSTEMS: S&P Retains Ratings Under Negative Watch
CALPINE CORP: Ct. Denies Rosetta's Request to Dismiss Complaint
CENTEX HOME: S&P Lowers Ratings on Five Securities Classes
CHAMPION PARTS: Can Hire James F. Dowden as Bankruptcy Counsel
CHAMPION PARTS: Obtains Interim Approval to Use Cash Collateral
CHAMPION PARTS: May File Schedules & Statements Until November 12
CHESAPEAKE ENERGY: Plans Exchange Offer for 6.25% Pref. Stock
CHRYSLER LLC: 55% UAW Workers Vote to Accept Tentative Pact
CNH GLOBAL: Earns $122 Million in Third Quarter Ended Sept. 30
COMMERCIAL MORTGAGE: Fitch Junks Ratings on $16MM Cert. Classes
COUNTRYWIDE FIN'L: Launches Move to Refinance $16 Billion Loans
CREDIT SUISSE: Poor Credit Support Cues S&P to Lower Ratings
CREDIT SUISSE: Moody's Downgrades Ratings on 22 Cert. Classes
CTI FOODS: Aborted Rollout Plan Cues S&P's Negative CreditWatch
CWABS INC: Low Credit Levels Prompt Moody's to Lower Ratings
DB KEY: Wants Court's Approval to Hire Rice Pugatch as Counsel
DB KEY: Wants Fisher to Assist in Sale of Key Largo Property
DB KEY: Submits Schedules of Assets and Liabilities
DELPHI CORP: Wins Court Approval of $106 Mil. Interiors Sale
DISTRICT OF COLUMBIA HOUSING: S&P Holds 'BB' Rating on Bonds
DUKE FUNDING: Poor Credit Quality Cues Moody's Ratings' Review
ELEC COMMS: Aug. 31 Balance Sheet Upside-Down by $5.3 Million
EMPIRE BEEF: Court Approves JC Jones as Financial Advisors
EMPIRE BEEF: Court Okays Triton Capital as Investment Banker
ENERGY FUTURE: Reports Prelim. Results for Period Ended Sept. 30
EPICOR SOFTWARE: Earns $8.1 Million in 3rd Quarter Ended Sept. 30
EQUITY ONE: S&P Junks Rating on Class B-2 Certificates
EUROPEAN AMERICAN: Can Hire Scroggins & Williamson as Counsel
EUROPEAN AMERICAN: Wants More Time to File Schedules & Statement
FAIRPOINT COMM: Agrees with VEC to Solve Verizon Merger Issues
FAIRPOINT COMMS: Inks Joint Settlement Pact with NH Local Carriers
FORAOIS FUNDING: S&P Junks Rating on $92.4 Million Certificates
FORD CREDIT: Moody's Rates $61 Million Class D Notes at Ba2
FOXTONS NORTH: Court Approves Forman Holt as Bankruptcy Counsel
FREEPORT-MCMORAN: Earns $763MM in Third Quarter Ended Sept. 30
FREESCALE SEMICON: Weak Results Cue Moody's to Review Ratings
GENERAL ELECTRIC: Fitch Holds Low-B Ratings on Four Certs.
GLORIA MELO: Case Summary & 16 Largest Unsecured Creditors
GOLDEN STATE: Section 341(a) Meeting Scheduled on November 16
GREAT LAKES: Inks $25 Million Purchase Agreement with Dragaport
GREENPARK GROUP: Files Second Amended Chapter 11 Liquidation Plan
GS MORTGAGE: Fitch Holds Low-B Ratings on Six Cert. Classes
GS MORTGAGE: Moody's Affirms Caa1 Rating on Class H Certs.
HARTCOURT COMPANIES: Posts $246,216 Net Loss in Qtr. Ended Aug. 31
HERCULES INC: Earns $42.4 Million Third Quarter Ended Sept. 30
HILTON HOTELS: S&P Lifts Ratings on Eight Certificate Classes
HOMEBANC MORTGAGE: Loan Servicing Sale Hearing Moved to Oct. 30
INDIANTOWN COGENERATION: S&P Holds 'BB+' Rating on $505MM Bonds
INTERNATIONAL SHIPHOLDING: Retires $110 Mil. 7-3/4% Sr. Notes
INVERNESS MEDICAL: Inks Deal to Buy Alere Medical for $302 Mil.
ISLAMIC SOCIETY: Case Summary & Seven Largest Unsecured Creditors
JACOBS FINANCIAL: Aug. 31 Balance Sheet Upside-Down by $8.3 Mil.
JAYS FOODS: Court OKs Retention of Winston & Strawn as Counsel
JAYS FOODS: Has Until Nov. 5 to File Schedules of Assets & Debts
JOCKEYS' GUILD: Section 341(a) Creditors' Meeting Set for Nov. 15
JP MORGAN: Fitch Holds Low-B Ratings on Seven Cert. Classes
JP MORGAN: Moody's Holds B- Rating on $19.9MM Class G Certs.
KINETIC CONCEPTS: Earns $59 Million in 3rd Quarter Ended Sept. 30
LAND INVESTORS: S&P Cuts Corporate Credit Rating to B from BB-
LB-UBS COMMERCIAL: Moody's Junks Rating on Class M Certificates
LENNOX INTERNATIONAL: S&P Places Ratings on Positive Watch
LEVITT CORP: Homebuilding Unit Defaults on Six Credit Facilities
LONG BEACH: S&P Cuts Rating to B and Removes Negative Watch
LSI CORP: Completes $450MM Cash Sale of Mobility Products Biz
MARK MAUERSBERGER: Case Summary & Two Largest Unsecured Creditors
MASSACHUSETTS DEV'T: Improved Financial Cues S&P to Lift Rating
MASTR ALTERNATIVE: S&P Junks Rating on Class B-5 Certificates
MAXTOR CORP: Fitch Affirms BB Sub. Debentures Rating
MEDISCIENCE TECH: Aug. 31 Balance Sheet Upside-Down by $2.7 Mil.
MERITAGE MORTGAGE: S&P Junks Ratings on Two Certificate Classes
METHANEX CORP: Earns $23.61 Million in Third Qtr. Ended Sept. 30
MOBILE MINI: Expects to Report 3rd Qtr. Revenues of $83.5 Million
MORGAN STANLEY: Fitch Affirms CCC Rating on Class M Certificates
MORGAN STANLEY: Fitch Junks Ratings on Two Cert. Classes
MORRIS PUBLISHING: Inks $115 Million Deal with Gatehouse Media
MORTGAGE ASSET: Fitch Cuts Class M-11 Certs.' Rating to BB
MOSAIC CO: Prepays $150 Mil. of Credit Facility on October 29
MOVIE GALLERY: Can File Statements and Schedules on November 30
MOVIE GALLERY: Wells Fargo Can File One Master Proof of Claim
MOVIE GALLERY: Court OKs Sale of 508 Leases & Designation Rights
MTI TECHNOLOGY: Taps Clarkson Gore as Bankruptcy Counsel
MTI TECHNOLOGY: Section 341(a) Meeting Scheduled for November 28
NUVEEN INVESTMENTs: Reports Results of Shareholder Meetings
PALM INC: Closes Recapitalization Plan with Elevation Partners
PETRO ACQUISITIONS: Receiver Quits as Bankruptcy Filing Looms
PNC MORTGAGE: Moody's Affirms Low-B Ratings on Six Certificates
POGO PRODUCING: Posts $45.9 Mil. Net Loss in 2007 Third Quarter
PRG-SCHULTZ: Completes Redemption of 9% Series A Pref. Stock
QUANTUM ENERGY: Aug. 31 Balance Sheet Upside-Down by $1.5 million
QUEST TRUST: S&P Junks Ratings on Three Certificate Classes
RAAC SERIES: Moody's Reviews Low-B Ratings on Three Certs.
RADIATION THERAPY: Sells Assets to Vestar Capital for $1.1 Billion
RAMP SERIES: S&P Junks Rating on Class M-I-2 Certificates
RED MOUNTAIN: Fitch Affirms B Rating on $1.5MM Class E Certs.
RESIDENTIAL ACCREDIT: S&P Junks Ratings on Two Classes
RYERSON INC: Platinum Equity Appoints Team of New Sr. Leaders
SACO I: Moody's Downgrades Ratings on 58 Certificate Classes
SCHOONER TRUST: Moody's Holds Low-B Ratings on Six Certificates
SEMCO ENERGY: Receives 96.7% Tenders and Consents of 2008 Notes
SERVICEMASTER CO: S&P Affirms 'B+' Rating on $2.65 Million Loan
SHERIDAN LEVIN: Case Summary & Nine Largest Unsecured Creditors
SMURFIT-STONE: Posts $96 Million Net Loss in Third Quarter 2007
SMURFIT-STONE: CEO Moore Says No Additional Plant Closures in 2007
SOLO CUP: Debt Reduction Prompts S&P's Positive CreditWatch
ST. BERNARD PARISH: S&P Lifts Debt Rating to BBB- from BB
STRUCTURED ASSET: Poor Performance Cues S&P's Ratings Downgrade
STRUCTURED ASSET: S&P Junks Rating on 2003-36XS Class M3 Certs.
TARGA RESOURCES: Completes $705 Mil. Deal of SAOU & LOU Rights
TBW MORTGAGE: High Delinquencies Cue S&P to Junk Rating
TD AMERITRADE: Earns $645.9 Million in Fiscal Year Ended Sept. 30
TECUMSEH PRODUCTS: Selling Train Operations to Platinum Equity
TEREX CORP: Earns $151.5 Mil. in Third Quarter Ended Sept. 30
TERWIN MORTGAGE: Moody's Downgrades Ratings on 52 Classes
TERWIN MORTGAGE: Moody's Lowers Rating on Class B-3 Certs. to B2
TERWIN MORTGAGE: S&P Slashes Rating on Class M-2 Notes to B
TIC INC: Court Approves Taylor & Associates as Accountant
TOUSA INC: S&P Junks Ratings on $500MM Debt and $1.1BB Notes
TRIBUNE CO: Unit To Sell Newspapers to Hearst for $62.4 Mil.
UNISYS CORP: Posts $31 Million Net Loss in Quarter Ended Sept. 30
US AIRWAYS: Pilots Picket at Philadelphia International Airport
US INVESTIGATIONS: Sells $440 Mil. Notes in Private Placement
VCA ANTECH: Earns $32.2 Million in Third Quarter Ended Sept. 30
VONAGE HOLDINGS: Verizon Settlement Cost Capped at $32 Million
WASHINGTON MUTUAL: S&P Puts Default Rating on Class C-B-5 Cert.
WELLCARE HEALTH: Purpose of Headquarters Raid Remains Unknown
WHEELING-PITTSBURGH: Amends Merger Agreement with Esmark
WINDSOR FINANCING: S&P Affirms 'BB' Rating on $52 Million Notes
WINDY CITY: Moody's Rates $885 Mil. Senior Notes at B3
WP EVENFLO: Acquires Ameda Products from Hollister
* Mark W. Wege & Edward L. Ripley Joins King & Spalding
* Sheppard Mullin Opens Office in Huangpu District, China
* BOOK REVIEW: Building American Cities: The Urban Real Estate
Game
*********
1755 AQUA: Case Summary & 15 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: 1755 Aqua Vista II LLC
11900 Biscayne Boulevard
North Miami, FL 33181
Bankruptcy Case No.: 07-19056
Chapter 11 Petition Date: October 24, 2007
Court: Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: Scott Alan Orth, Esq.
9999 Northeast 2 Avenue #204
Miami Shores, FL 33138
Tel: (305) 757-3300
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's list of its 15 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Wexford High Yield Mortgage $2,350,000
Debt Fund I LLC Collateral:
333 West Wacker Drive, $14,000,000
Suite 1600
Chicago, IL 60606
Jeffrey Levitin, Trustee Mortgage $1,900,000
4429 18 Avenue Collateral:
Brooklyn, NY 11204 $14,000,000
The Formula $1,500,000
401 East Las Olas Boulevard,
Suite 1400
Fort Lauderdale, FL 33301
Miami-Dade County $150,000
Propery Adviser Collateral:
$14,000,000
Kobi Karp, Architect $50,000
Ad Logic Graphic Design $11,974
and Print Co.
GE Modular Space $11,799
Blix.Image Graphic & $10,000
Web Design
Coastal Systems $8,000
International, Inc.
North Bay Village Mortgage/Final $7,000
Investment Trust, LLC judgment Collateral:
$14,000,000
ITC Technologies $5,000
Cleartel Communications $2,500
FPL $2,252
Devon Security $1,000
National Construction Rentals $700
ABITIBI-CONSOLIDATED: Inks Deal with US DOJ to Complete Merger
--------------------------------------------------------------
Abitibi-Consolidated Inc. and Bowater Incorporated have reached an
agreement with the United States Department of Justice that will
allow the completion of the proposed combination of the two
companies.
Under the terms of the agreement, which was signed and filed in
the U.S. Federal District Court in Washington, D.C., the companies
have agreed to divest one newsprint mill, Abitibi-Consolidated's
mill in Snowflake, Arizona.
The Snowflake mill has an annual capacity of approximately 375,000
tonnes. Scotia Capital Inc. will be engaged as exclusive
financial advisor for the sale of the Snowflake mill and related
assets, and all inquiries or expression of interest should be
forwarded directly to their attention.
The proposed combination has now received all necessary regulatory
approvals, including those from the Canadian Competition Bureau,
the Federal Minister of Industry under the Investment Canada Act,
the Quebec Superior Court and the U.S. Department of Justice, as
well as the necessary approvals from shareholders of both Abitibi-
Consolidated and Bowater.
The combination is expected to close by the end of the month,
following the completion of certain administrative formalities.
"We appreciate the hard work of the U.S. Department of Justice
staff and everyone else involved in completing this process, and
with this last approval, we look forward to closing the proposed
transaction quickly," John W. Weaver, Abitibi-Consolidated
president and chief executive officer, commented. "We are eager to
begin the work of building a new company that creates long-term
value for all of our stakeholders."
"We believe the significant synergies we anticipate to generate
from the combination will create a stronger company, better
positioned to address the challenges of the marketplace," added
David J. Paterson, chairman, president and chief executive officer
of Bowater. "We expect that a more efficient manufacturing
platform will enable us to deliver more value through better
product quality and improved logistical flexibility."
The combined company, which will be called AbitibiBowater Inc.,
will produce a range of newsprint and commercial printing papers,
market pulp and wood products. AbitibiBowater will own or operate
31 pulp and paper facilities and 35 wood product facilities
located in the United States, Canada, the United Kingdom and South
Korea. The new company's shares will trade under the stock symbol
ABH on both the New York Stock Exchange and the Toronto Stock
Exchange.
About Bowater Incorporated
Bowater Inc. (NYSE: BOW, TSX: BWX) -- http://www.bowater.com/
-- produces coated and specialty papers and newsprint. In
addition, the company sells bleached market pulp and lumber
products. Bowater has 12 pulp and paper mills in the United
States, Canada, and South Korea. In North America, it also owns
two converting facilities and 10 sawmills. Bowater's operations
are supported by approximately 835,000 acres of timberlands owned
or leased in the United States and Canada and 28 million acres of
timber cutting rights in Canada. Bowater operates six recycling
plants and is one of the world's largest consumers of recycled
newspapers and magazines.
About Abitibi-Consolidated Inc.
Headquartered in Montreal, Quebec, Abitibi-Consolidated Inc.
(NYSE: ABY, TSX: A) -- http://www.abitibiconsolidated.com/--
supplies newsprint and commercial printing papers and produces
wood products, serving clients in some 70 countries from its 45
operating facilities. Abitibi-Consolidated is one of the
recyclers of newspapers and magazines in North America.
* * *
As reported in the Troubled Company Reporter on Aug. 3, 2007,
Fitch Ratings has downgraded Abitibi Consolidated Inc.'s Issuer
Default Rating to 'B-' from 'B+'; senior unsecured debt to 'B-
/RR4' from 'B+/RR4'; secured revolver to 'B/RR3' from 'BB-/RR3'.
The rating outlook remains negative.
AEGIS MORTGAGE: Panel Wants Landis Rath as Delaware Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Aegis
Mortgage Corp. and its debtor-affiliates' bankruptcy cases asks
permission from the U.S. Bankruptcy Court for the District of
Delaware to retain Landis Rath & Cobb LLP as its Delaware counsel.
The Creditors Committee selected Landis Rath because of the
firm's expertise with creditor committee representations, and in
the field of debtor and creditor law and business reorganizations
under Chapter 11 of the Bankruptcy Code. The firm is also
familiar with the Debtors' business affairs and capital structure.
Landis Rath will:
* give legal advice with respect to the power and duties of
the Creditors Committee and other participants in the
Debtors' cases;
* assist in the investigation of the acts, conduct, assets,
liabilities and financial condition of the Debtors and the
operation of their business, and any other matters
relevant to the cases and which may affect the creditors;
* participate in negotiations with parties-in-interest with
respect to any disposition of the Debtors' assets, plan of
reorganization and disclosure statement in connection with
the plan;
* prepare legal documents and appear at Court hearings on
behalf of the Creditors Committee;
* give legal advice and perform legal services in connection
with the bankruptcy cases; and
* perform other legal services as may be requested by the
Creditors Committee.
Landis Rath will charge for its services on an hourly basis, plus
reimbursement of expenses incurred. The attorneys designated to
represent the Creditors' Committee and their corresponding hourly
rates are:
Professional Hourly Rate
------------ -----------
Richard S. Cobb, Esq. $440
Kerri K. Mumford, Esq. $290
John H. Strock $215
Richard S. Cobb, Esq., a partner at Landis Rath, in Wilmington,
Delaware, tells the Court that the firm has not represented the
Creditors Committee, the Debtors and other parties-in-interest in
matters relating to the Debtors or their estates. Mr. Cobb
assures the Court that the firm is a "disinterested person" within
the meaning of Sections 1103 and 101(14) of the Bankruptcy Code.
Headquartered in Houston, Texas, Aegis Mortgage Corporation --
http://www.aegismtg.com/-- offers a variety of mortgage loan
products to brokers through its subsidiaries.
The company together with 10 affiliates filed for chapter 11
protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119)
Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones,
Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, &
Jones, L.L.P., serve as counsel to the Debtors. When the Debtors
filed for bankruptcy, they listed assets and debts of more than
$100 million.
The Debtors' exclusive period to file a plan expires on
Dec. 11, 2007. Aegis Bankruptcy News, Issue No. 9, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
AEGIS MORTGAGE: Panel Wants to Hire Hahn & Hessen as Co-Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Aegis
Mortgage Corp. and its debtor-affiliates' bankruptcy cases seeks
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Hahn & Hessen LLP as co-counsel nunc pro tunc
Sept. 14, 2007.
The Creditors Committee selected Hahn & Hessen because the firm
is thoroughly familiar with and is experienced in Chapter 11
matters. H&H has experience with insolvencies of prime and sub-
prime mortgage lenders, and has been representing the creditors'
interests in insolvency proceedings for more than 75 years.
H&H will:
* render legal advice to the Creditors Committee with
respect to its duties and powers in these cases;
* assist in investigating the acts, conduct, assets,
liabilities and financial condition of the Debtors and
the operation of the Debtors' business;
* advise the Creditors Committee with respect to any
proposed sale of the Debtors' assets or business
operations, if any, and any other matters relevant
thereto;
* advise the Creditors Committee with respect to any
proposed plan of reorganization and the Debtors
prosecution of claims against third parties, if any, and
other matters relevant to the proceeding or to the
formulation of the plan;
* assist the Committee in requesting the appointment of a
trustee or examiner pursuant to Section 1104 of the
Bankruptcy Code, if necessary and appropriate; and
* performing other legal services, which may be required
by and which are in the best interests of the unsecured
creditors.
H&H has agreed to be compensated at its customary rates for
services rendered and for actual expenses incurred. Generally,
the hourly rates being charged by the firm range from $500 to
$600 for partners, $200 to $400 for associates, $450 to $625 for
special counsel and counsel, and $180 to $200 for paralegals.
Mark T. Power, Esq., a member of H&H, in New York, assures the
Court that the firm does not represent any interest adverse to
the Creditors Committee or the Debtors' estate in the matters
upon which it is to be engaged. He adds that H&H, while employed
by the Committee, will not represent any individual creditor in
connection with the bankruptcy cases.
Headquartered in Houston, Texas, Aegis Mortgage Corporation --
http://www.aegismtg.com/-- offers a variety of mortgage loan
products to brokers through its subsidiaries.
The company together with 10 affiliates filed for chapter 11
protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119)
Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones,
Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, &
Jones, L.L.P., serve as counsel to the Debtors. When the Debtors
filed for bankruptcy, they listed assets and debts of more than
$100 million.
The Debtors' exclusive period to file a plan expires on
Dec. 11, 2007. Aegis Bankruptcy News, Issue No. 9, Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
AGILENT TECH: Moody's Rates Proposed $500 Million Notes at Ba1
--------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Agilent
Technologies, Inc.'s proposed offering of $500 million senior
notes due 2017 and affirmed its existing ratings and stable
outlook. The new issue proceeds will be used to fund the
remaining purchases under Agilent's accelerated stock buyback
program and replenish cash balances. For the nine months ended
July 31, 2007, Agilent purchased $1.3 billion worth of common
shares, made cash acquisitions totaling $311 million and
maintained roughly $1.49 billion of unrestricted cash, down from
$2.05 billion at April 30, 2007.
Moody's noted that at the current rating category, Agilent has
capacity to incur additional debt supported by higher EBITDA
levels. Pro forma for this transaction, debt/LTM EBITDA is 1.1x
(Moody's adjusted) excluding the $1.5 billion enhanced note
obligation or 2.5x (Moody's adjusted) including the enhanced note
obligation.
The rating for the senior notes is the same as the Ba1 corporate
family rating, which reflects the company's repositioning and
transition to a business model that has the propensity to deliver
enhanced operating margins and consistently higher levels of
positive free cash flow compared to prior periods and its peers.
Agilent has adopted an outsourced manufacturing model and reduced
infrastructure costs by 35% to better align its workforce and
operating facilities with a smaller revenue base after the
disposition of its Semiconductor Products Group in 2005 and
Semiconductor Test assets in early 2006.
The rating also considers the company's more focused business
strategy in less volatile business segments affording increased
growth opportunities in Agilent's core electronic and bio-
analytical test and measurement businesses. Additionally, the
rating takes into account recent R&D and investment efforts that
were refocused to align Agilent's business with new market
opportunities to capture market share and deliver above-average
revenue growth.
The Ba1 rating is constrained by the: (i) smaller revenue base and
historic growth rates at or below the industry average; (ii)
historic single-digit operating margins (albeit improved to 10.5%
as of the recent twelve month period), with limited opportunities
for further cost savings (iii) brief track record demonstrating
sustained above-average revenue growth and consistent operating
performance relative to peers following the repositioning; (iv)
potential for a sizeable acquisition or other leveraging event
that could increase debt levels and/or reduce liquidity; and (v)
financial policies that are viewed to be more shareholder
friendly.
Moody's cited the rating also captures recent competitor actions
that include Danaher's $2.8 billion acquisition of Tektronix, a
supplier of electronic test and measurement equipment and chief
rival of Agilent. Potential risks to Agilent include Danaher's
increased scale in its Electronic Test division, Tektronix's
access to greater R&D resources, Danaher's expected implementation
of cost and manufacturing improvements at Tektronix and Danaher's
likely strategy to leverage Tektronix's Asian presence as a
platform for growing its instrumentation business which could lead
to heightened competition in Asia (Asia accounts for 40% of
Agilent's sales). Moody's will monitor these developments
closely.
The stable outlook reflects Agilent's positive operating trends
tempered by the implementation of its $2 billion share repurchase
program over a twelve-month period instead of the previously
expected 24-month timeframe. The accelerated stock repurchase
will significantly exceed the level of free cash flow (after
acquisitions) that Moody's expects the company to generate in
fiscal 2007. Moody's views this as a return to a more aggressive
use of Agilent's considerable balance sheet liquidity, requiring
the need for higher debt levels in the permanent capital
structure, which somewhat limits financial flexibility at the Ba1
level.
The stable outlook also recognizes Agilent's more stable operating
profile, refocused business strategy in less volatile business
segments, diversification across its core test and measurement
markets (which experienced improved revenue growth of 7% in the
recent quarter) and propensity for predictable free cash flow
compared to prior years.
Upward ratings pressure could occur if Agilent continues to
demonstrate solid organic revenue growth and operating margin
improvement over the next several quarters driven by sustainable
above-average growth in the electronic measurement segment as well
as evidence of financial policies that better align shareholder
and creditor interests.
The company's SGL-1 rating reflects very good liquidity and
financial flexibility. This is driven by Agilent's
$1.49 billion of unrestricted cash, Moody's expectations for free
cash flow generation (after acquisitions) of at least
$300 million in fiscal 2007 and $320 million in fiscal 2008, plus
full access to a $300 million revolver. Agilent remains in
compliance with its new unrated 5-year senior unsecured credit
facility with substantial cushion under both the interest coverage
and financial leverage maintenance covenants.
The rating for the senior notes reflect both the overall
probability of default of the company, to which Moody's previously
assigned a PDR of Ba1 and a loss given default of LGD-4 for the
senior notes. The Ba1 rating of the senior notes reflects their
senior position in Agilent's capital structure.
Agilent Technologies Inc., the issuer of the notes, is not a
parent holding company, but rather an operating entity with hard
assets, inventory and payables. As per the note offering
prospectus, the notes are structurally subordinated to the
liabilities and payables at Agilent's operating subsidiaries, and
are ranked as such in Moody's LGD waterfall. Although the notes
do not benefit from upstream guarantees, because they are located
at a first-tier operating entity, in a bankruptcy scenario they
would share the same collateral pool (on a junior basis) as the
trade creditors and lenders residing at the operating
subsidiaries.
In accordance with guidance for Moody's LGD framework, Agilent's
subsidiary's $1.5 billion floating rate enhanced note obligation
residing in the bankruptcy remote vehicle was excluded from the
LGD waterfall. However, Moody's notes that senior noteholders are
structurally subordinated to the bankruptcy remote entity's
noteholders given that trust creditors have a first priority claim
on assets and cash flows of certain foreign operating subsidiaries
that represent a substantial portion of Agilent's cash flows.
This new rating/assessment was assigned:
-- $500 million Senior Unsecured Notes due 2017 -- Ba1 (LGD-
4, 52%)
These ratings were affirmed:
-- Corporate Family Rating -- Ba1
-- Probability of Default Rating -- Ba1
-- Speculative Grade Liquidity -- SGL-1
Headquartered in Santa Clara, California, Agilent Technologies,
Inc. is a leading measurement technology company serving the
communications, electronics, life sciences and chemical analysis
industries. Net revenues for the twelve months ended July 31,
2007 were $4.7 billion.
ALBERT LUCERO: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Albert D. Lucero
Frances M. Lucero
dba Ludi's Food Market & Bakery
P.O. Box 1363
1030 6th Street
Las Vegas, NM 87701
Bankruptcy Case No.: 07-12646
Type of Business: The Debtors own and manage a retail food store.
Chapter 11 Petition Date: October 24, 2007
Court: District of New Mexico
Judge: Mark B. McFeeley
Debtor's Counsel: Albert W. Schimmel, III, Esq.
320 Gold Avenue Southwest, Suite 900
P.O. Box 8
Albuquerque, NM 87103-0008
Tel: (505) 837-4400
Fax: (505) 837-2528
Total Assets: $834,251
Total Debts: $1,196,049
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
New Mexico Taxation & Revenue Trade debt $336,000
P.O. Box 8575
Albuquerque, NM 87198
Internal Revenue Service Trade debt $85,000
Insolvency Unit
210 East Earll Drive
Phoenix, AZ 85012
Affiliated Foods, Inc. Trade debt $40,000
P.O. Box 30300
Amarillo, TX 79120
Wells Fargo Auto Finance $36,928
Bankruptcy Department
Wells Fargo Auto Finance value of collateral: $27,863
$25,000; value of
security: $25,000
Citifinancial Trade debt; value $17,734
of collateral:$
9,000; value of
security: $9,000
State Employees Credit Union value of collateral: $11,459
$13,000; value of
security: $3,173
Zanios Foods Trade debt $7,100
Southwest Financial $6,200
P.N.M. Trade debt $5,500
Citi Cards $5,145
Capital 1 Bk. $5,113
Sams Club Trade debt $3,595
New Mexico Lottery Trade debt $3,272
Alta Vista Regional Hospital $2,471
City Of Las Vegas New Mexico Trade debt $1,791
Las Vegas Optic Trade debt $940
Qwest Trade debt $750
Chase $490
ALERIS INTERNATIONAL: Consolidates Mexico Operations
----------------------------------------------------
Aleris International Inc. will consolidate the operations of its
Monterrey, Mexico facility into its Monclova, Mexico plant, which
was part of the acquired Wabash Alloys LLC.
In addition, the operations of Wabash Alloy's Guelph, Canada
facility will be consolidated into the operations of Aleris and
former Wabash Alloys facilities. Both actions are currently
underway.
The Monterrey plant, which employed approximately 41 people,
produced specification aluminum alloys that were delivered to
customers in both ingot and molten form.
The Guelph plant, which employed approximately 50 people, produced
niche specification alloys which were delivered in ingot form to
customers in Canada and the United States.
"The closures are part of our ongoing initiatives to optimize our
production footprint and maximize productivity while continuing to
provide the highest quality products and services to our valued
customers." Ed Hoag vice president and general manager,
Specification Alloys, said.
About Aleris International
Headquartered in Beachwood, Ohio, Aleris International Inc.
(NYSE: ARS) -- http://www.aleris.com/-- manufactures aluminum
rolled products and extrusions, aluminum recycling and
specification alloy production. The company is also a recycler of
zinc and a leading U.S. manufacturer of zinc metal and value-added
zinc products that include zinc oxide and zinc dust. The company
operates 55 production facilities in North America, Europe, South
America and Asia, and employs approximately 9,200 employees.
* * *
As reported in the Troubled Company Reporter on Sept. 21, 2007,
Standard & Poor's Ratings Services revised its outlook on Aleris
International Inc. to negative from stable. At the same time S&P
affirmed its 'B+' corporate credit rating and the other ratings on
the company. Concurrently, S&P assigned a 'B-' rating to the
company's recent $105 million 9% senior notes due 2014, which are
an add-on to the company's existing $600 million 9% senior notes
due 2014.
ALIMENTATION COUCHE: S&P Revises Outlook to Positive from Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on
Montreal-based Alimentation Couche-Tard Inc. to positive from
stable. At the same time, S&P affirmed the 'BB' long-term
corporate credit rating and the 'B+' subordinated debt rating.
"The revised outlook reflects ACT's improved business risk profile
and operating efficiencies," said Standard & Poor's credit analyst
Maude Tremblay. "ACT was able to complete various acquisitions in
recent years while maintaining adjusted debt to EBITDA of about
3x," Ms. Tremblay added.
The ratings reflect ACT's aggressive financial policy with respect
to growth, its exposure to volatile gasoline prices, and its
participation within the highly competitive and fragmented
convenience store industry. These features are partially
mitigated by the company's strong market position in the North
American c-store segment, the solid performance of its
merchandising program, and management's proven track record of
integrating acquisitions.
ACT is the second-largest independent c-store operator in North
America with 5,615 stores, of which 61% sell motor fuel. The c-
store industry is highly fragmented and characterized by low
barriers to entry, but ACT enjoys one of the strongest positions
within the industry, enhanced by the brand equity of its banners
and the quality of its real estate portfolio. ACT's store network,
which continues to expand mostly through tuck-in acquisitions,
spans six Canadian provinces and 29 American states. Although
motor fuel accounts for almost 60% of revenues, it is in-store
merchandise and services that generate the majority of ACT's gross
profits. Rising retail gasoline prices have also contributed to
this distortion.
The outlook is positive. ACT would need to improve credit metrics
and provide greater comfort with respect to its medium-term
acquisition appetite before S&P would consider raising the
ratings. Alternatively, S&P could revise the outlook back to
stable if operating trends reverse, or if the company engages in a
sizable debt-financed acquisition or share repurchase activity
that result in weaker credit metrics.
AMERICAN HOME: Wants Sale of GNMA Servicing Rights Approved
-----------------------------------------------------------
American Home Mortgage Investment Corp. and its debtor-affiliates
ask the U.S. Bankruptcy Court for the District of Delaware for
authority to sell rights to service loans backed by the Government
National Mortgage Association to MidFirst Bank for an undisclosed
amount.
Before filing for bankruptcy, American Home Mortgage Servicing
Inc. collected mortgage payments with respect to, and serviced,
197,000 loans with an aggregate principal amount of roughly
$46,300,000,000 as of December 31, 2006.
Several loans that the Debtors service were issued in connection
with the GNMA. As of July 31, 2007, AHM Servicing serviced 1,546
GNMA pools with an outstanding principal balance of approximately
$449,000,000 and backed by approximately 5,800 loans.
As previously reported, about three days prior to the Debtors'
bankruptcy filing, GNMA gave a notice to the Debtors that it was
terminating their rights to service the GNMA Portfolio due to the
their declining financial condition. GNMA subsequently asked the
Bankruptcy Court to compel the Debtors to comply with the notice
and turnover the GNMA Portfolio. After negotiations, GNMA agreed
to allow the Debtors to have until (i) October 9, 2007, to execute
a binding contract to sell the GNMA Portfolio to a GNMA-approved
issuer/servicer in good standing, and (ii) November 1, 2007, to
close the sale. Subsequently, AHM Servicing and MidFirst Bank
entered into a purchase agreement, pursuant to which MidFirst is
to purchase certain property, which includes servicing rights to
the GNMA-backed loans and the accompanying documents and fees, Mr.
Patton discloses.
The Debtors propose to sell the GNMA Servicing Rights to MidFirst,
according to the Purchase Agreement, on an "as is, where is"
basis, free and clear of all encumbrances, and without any
representations or warranties other than expressly set forth in
the Purchase Agreement, pursuant to Sections 105 and 363(b) of the
Bankruptcy Code.
The key terms of the Purchase Agreement are:
-- On the date of sale, which is currently set on October 31,
2007, or other date as may be mutually agreed, MidFirst
will purchase the Property from AHM Servicing. The Seller
will transfer and assign the Property to MidFirst pursuant
to an executed assignment of Seller's rights and
obligations as servicer of each of the pool or portfolio of
mortgage notes and mortgages, in connection with certain
GNMA pools of loans. On the close of business on Oct. 31,
or any agreed date, or the transfer date, MidFirst will
commence the servicing of the Loans and Seller will cease
servicing them;
-- The purchase price of the Property will be the sum of:
(a) the "purchase price percentage" multiplied by the
aggregate unpaid principal balances as of the Sale Date
of all Loans that are not three month mortgages,
defined as any Loan, which, as of the Sale Date, is 90
days or more past due, or any Loan in foreclosure,
litigation or bankruptcy; minus
(b) an amount equal to $1,500 for each Loan which, as of
the Sale Date, is 90 days or more past due, or in
bankruptcy and 30 days or more past due; minus
(c) the reduction amount of $300,000 for costs associated
with loans that cannot be transferred to the U.S.
Department of Housing and Urban Development, all claims
for mortgagee neglect, any claims for post-foreclosure
curtailments, and all claims for late foreclosure
referrals;
-- The Purchase Price will be paid by bank wire in immediately
available funds in this manner:
(a) On the Sale Date, an initial installment to Seller in
the amount equal to the greater of:
(i) 20% of the Purchase Price; and
(ii) the amounts payable by Sellers to GNMA pursuant
to the Debtors' stipulation with GNMA, provided
that Seller has performed its obligations under
the Purchase Agreement and delivered to MidFirst
the assignment required;
(b) 15 days after the Transfer Date, and upon the Seller's
complete satisfaction of the Purchase Agreement's
conditions, MidFirst will pay a second installment in
an amount equal to:
(i) 80% of the Purchase Price; minus
(ii) 100% of the amounts relating to Three Month
Mortgages; minus
(iii) the Initial Installment; minus
(iv) certain assignment holdback; minus
(v) certain custodian holdback; minus
(vi) certain tax contract holdback; plus
(vii) certain interest on the average daily balance of
the amount of the installment computed at one
month Federal Funds Target Rate Expected;
(c) An amount equal to 15% of the Purchase Price, plus the
Interest, will be paid in subsequent installments on a
pro rata basis based on the unpaid principal balances
of the Mortgage Pools, as of the Sale Date, once the
custodial file related to each Loan is complete and in
compliance with the certain requirements, with each
installment being paid on the 15 business Day of the
month; and
(d) The balance of the Purchase Price, plus the Interest,
will be paid 15 business days following the date, on
which all Loans included in each Mortgage Pool as of
the Sale Date, are in compliance with the requirements
for certification or recertification by MidFirst's
custodian and in accordance with GNMA Requirements.
The Debtors have agreed to relinquish their servicing obligations
with respect to the Property, and MidFirst has agreed to assume
the servicing obligations after close of business on November 1,
2007, or a later date mutually acceptable to MidFirst, GNMA and
the Debtors, Mr. Patton says.
Mr. Patton contends that there are sound business reasons to
justify the Sale, including the fact that if the timeline under
the Stipulation is not met, GNMA would be entitled to demand
turnover of the Property, resulting to the elimination of any
value to the bankruptcy estates relative to the Property. He
adds that MidFirst should be granted the protections of a good
faith purchaser under Section 363(m) of the Bankruptcy Code.
Request to File Under Seal
Mr. Patton relates that the Debtors have redacted portions of
Purchase Agreement that reveal the Purchase Price Percentage,
which constitutes confidential commercial information.
The Debtors have determined that the private sale of the Property
will not hinder or diminish the value of the bulk of the loan
servicing assets to be sold. However, to ensure that the Debtors
can maximize the value of the remaining servicing assets, filing
certain portions of the sale request under seal that disclose the
Purchase Price Percentage is necessary to allow them to negotiate
the best possible terms of agreements for other servicing assets,
either with a purchaser of the Debtors' servicing assets in bulk,
or with parties who are similarly situated to MidFirst.
Hence, to safeguard the Debtors' ability to negotiate even more
advantageous agreements with other potential buyers, they seek
the Court's authority to file under seal an unredacted version of
the request. They also ask the Court to direct parties filing
responsive pleadings to file unredacted pleadings under seal.
The further Debtors ask the Court for an expedited hearing on
their requests for cause exists to justify the shortening of the
notice period. He points out that if the Court does not hear the
Sale request on shortened notice, the Debtors will be unable to
meet the sale deadline set in the GNMA Stipulation, among other
things.
Accordingly, the Debtors ask Judge Sontchi to commence a hearing
on their requests.
The Debtors assure the Court that appropriate parties will be
notified, including the Office of the U.S. Trustee, the Official
Committee of Unsecured Creditors, the DIP lenders, GNMA, and the
U.S. Securities and Exchange Commission.
Previously Approved Protocol
The Court-approved sale procedures for the sale of the Debtors'
loan servicing business expressly provide that the Debtors may
seek approval of portions of the servicing business with
different purchasers to allow for the highest and best value for
the servicing assets, Mr. Patton relates. He adds that the sale
protocol also allows the Debtors to waive the certain of the
protocol to the extent that the waiver is in the best interest of
the bankruptcy estates.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors has selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000. The Debtors' exclusive period to
file a plan expires on Dec. 4, 2007. (American Home Bankruptcy
News, Issue No. 12, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: Panel, et al. Balk at GNMA Servicing Rights Sale
---------------------------------------------------------------
Several parties filed their objections to American Home Mortgage
Investment Corp. and its debtor-affiliates' request to sell rights
to service loans backed by the Government National Mortgage
Association to MidFirst Bank for an undisclosed amount.
(a) Creditors Committee
The Official Committee of Unsecured Creditors asks the U.S.
Bankruptcy Court for the District of Delaware to deny the request
because certain provisions of the Purchase Agreement could:
(i) have a material adverse effect on the values realized by
the Debtors' bankruptcy estates;
(ii) severely hamper the Debtors' ability to confirm a plan of
reorganization and make a distribution to creditors; and
(iii) make it extremely difficult to evaluate properly the
consideration that the Debtors would receive from the
sale.
David W. Carickhoff, Esq., at Blank Rome LLP, in Wilmington,
Delaware, contends that the Purchase Agreement provides no
ceiling on the amount of damages that the MidFirst can assert
against the Debtors for breaches of the Purchase Agreement, and
no time limit within which to bring claims under it. He argues
that since there is no ceiling on the Debtors' liability, the
minimum value to the bankruptcy estates of the proposed Sale
transaction is impossible to ascertain.
Accordingly, the Creditors Committee submits that the Purchase
Agreement must be amended to provide that claims against the
Debtors in connection with it (i) be limited to the 20% holdback
provided for in the agreement, and (ii) must be brought within 90
days after the Settlement Date. Moreover, the Purchase Agreement
should provide for the holdback to be placed in escrow.
The Creditors Committee further asserts that, among other things,
there is a lack of clarity as to what "property" is being sold to
MidFirst, which creates potential breaches of several provisions
of the Purchase Agreement. Mr. Carickhoff notes that the Debtors
do not own the funds in custodial accounts nor the files related
to each Loan and cannot "convey the Property" or "good and
marketable title" other than the rights, title and interests that
AHM Servicing has as servicer. Therefore, he tells the Court
that the definition of "Property" in the Purchase Agreement
should be amended to clarify that the Debtors are conveying all
right, title and interest it may have "as servicer" in all funds
in the Custodial Accounts and files relating to each Loan.
(b) Bank of America
Bank of America, N.A., tells Judge Sontchi that in the currently
structured Sale, it is unclear what, if any, benefit will inure
to the estates if the Court approves the Sale, thus, BofA objects
to the request.
Specifically, BofA objects to these terms of the Purchase
Agreement and the proposed Sale:
-- the Debtors are surrendering the Property for the Initial
Installment, which is a mere 20% of the aggregate purchase
price;
-- the deductions to the Purchase Price will unreasonably
reduce the Second Installment, and could potentially
consume the Second Installment in its entirety;
-- the installments beyond the Initial Installment to be paid
to the Debtors have so many contingencies and subject the
Debtors to additional obligations that the ultimate
payment of the installments is speculative at best;
-- the Debtors may not only be deprived of any economic
benefit from the transaction but may also be saddled with
significant administrative expense liability associated
with the Debtors' obligations under the Purchase
Agreement; and
-- even if the Debtors could satisfy the conditions
triggering MidFirst's obligation to make payment of the
subsequent installments, there is no justification for
allowing MidFirst the servicing and certain other rights,
property, documents, agreements and funds related to
certain mortgage pools in the GNMA Portfolio on an "as is,
where is" basis, free and clear of all encumbrances
without any representations or warranties other than those
set forth in the Purchase Agreement.
(c) MERS
The Mortgage Electronic Registration System, which was created by
the mortgage banking industry to streamline the mortgage process
by using electronic commerce to eliminate paper, tells the Court
that it does not object to the sale of the GNMA Portfolio, per
se. Rather, MERS only wishes to protect its rights ensure that
the Debtors comply with their obligations under certain MERS
agreement in connection with the sale.
Michael A. Bloom, Esq., at Morgan, Lewis & Bockius LLP, in
Philadelphia, Pennsylvania, contends that MERS is not a party to
the Purchase Agreement, and should not be obligated, pursuant to
certain terms of the Purchase Agreement, to provide notices or
recognize transfer of the ownership of or servicing rights
related to any loan registered on its system other than as
required by the MERS Agreement. He says that the Debtors must
update the MERS(R) System to reflect the Sale no later than
November 14, 2007. It is at this point, and not earlier, that
MERS will be able to provide MidFirst with notices associated
with loans in the GNMA Portfolio and will recognize MidFirst as
the investor for each of the Loans, he continues.
Moreover, Mr. Bloom notes, because the Debtors and MidFirst both
are MERS members, the Debtors will incur a fee of $4.95 per
eligible loan transferred to MidFirst in connection with the
Sale. He tells Judge Sontchi that the Debtors should be
obligated to represent to the Court and to MERS that it will pay
the fee associated with the transfers and that it has sufficient
assets on hand to pay the fees as and when due. Else, failure to
pay will result in the Debtors losing their status as members in
good standing of MERS, which will cause them to be in breach of
their obligations under their current debtor in possession
financing facility.
Accordingly, MERS asks the Court for an order that will provide
that MERS is not obligated to provide notices or recognize a
transfer of ownership other than in accordance with the MERS
Agreement, and that will obligate the Debtors to represent to the
Court and MERS that it will pay any fee due to MERS.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors has selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000. The Debtors' exclusive period to
file a plan expires on Dec. 4, 2007. (American Home Bankruptcy
News, Issue No. 12, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: Committee Selects Cozen as Special Counsel
---------------------------------------------------------
The Official Committee of Unsecured Creditors in American Home
Mortgage Investment Corp. and its debtor-affiliates' bankruptcy
cases ask the U.S. Bankruptcy Court for the District of Delaware
for authority to retain Cozen O'Connor as its special conflicts
counsel nunc pro tunc to August 28, 2007.
Cozen will deal with any matter in which the Creditors Committee
may be adverse to Bank of America, N.A., including the Debtors'
use of BofA's cash collateral and the investigation of the
extent, validity and priority of BofA's asserted security
interests in the Debtors' assets.
Due to certain existing relationships, the Creditors' Committee's
current counsel cannot assert claims against or otherwise be
directly adverse to BofA in any contested matter or adversary
proceeding.
Cozen agreed to be compensated on an hourly basis, plus
reimbursement of expenses. The attorneys designated to render
the services and their hourly rates are:
Mark Felger $485
Eric Freed $485
Jeffrey Waxman $320
Other professionals may also provide services to the Creditors'
Committee. Generally, the firm's rates per hour for its
professionals are:
Members $320 to $575
Associates $225 to $300
Paralegals $170 to $190
The rates do not cover out-of-pocket expenses and certain
elements of overhead that are typically billed separately.
Mark E. Felger, senior member of Cozen, in Wilmington, Delaware,
assures the Court that the firm does not have any connection with
the Debtors, creditors or any other parties-in-interest. He adds
that Cozen might have represented or may represent the Debtors'
account debtors, creditors or interest holders but only in
matters unrelated to the Debtors' bankruptcy case.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors has selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000. The Debtors' exclusive period to
file a plan expires on Dec. 4, 2007. (American Home Bankruptcy
News, Issue No. 12, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERIQUEST MORTGAGE: Moody's Reviews Ratings on 16 Tranches
-----------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings of sixteen tranches issued in four separate Ameriquest
Mortgage Securities Inc. mortgage transactions. The collateral
backing each tranche consists primarily of first-lien, fixed- and
adjustable-rate scratch and dent mortgage loans.
Each deal being reviewed has experienced an increasing proportion
of severely delinquent loans while the amount of available credit
enhancement has been reduced from losses.
Complete rating actions are:
Issuer: Ameriquest Mortgage Securities Inc., Quest Trust 2004-X1
-- Cl. M-1; Currently A2 on review for possible downgrade
-- Cl. M-2; Currently Ba3 on review for possible downgrade
-- Cl. M-3; Currently B3 on review for possible downgrade
-- Cl. M-4; Currently Caa3 on review for possible downgrade
Issuer: Ameriquest Mortgage Securities Inc., Quest Trust 2004-X2
-- Cl. M-4; Currently Baa2 on review for possible downgrade
-- Cl. M-5; Currently Baa3 on review for possible downgrade
Issuer: Ameriquest Mortgage Securities Inc., Quest Trust 2004-X3
-- Cl. M-4; Currently Baa2 on review for possible downgrade
-- Cl. M-5; Currently Baa3 on review for possible downgrade
-- Cl. M-6; Currently Ba2 on review for possible downgrade
-- Cl. M-7; Currently B1 on review for possible downgrade
Issuer: Ameriquest Mortgage Securities Inc., Quest Trust 2005-X2
-- Cl. M-1; Currently A2 on review for possible downgrade
-- Cl. M-2; Currently A3 on review for possible downgrade
-- Cl. M-3; Currently Baa1 on review for possible downgrade
-- Cl. M-4; Currently Baa2 on review for possible downgrade
-- Cl. M-5; Currently Baa3 on review for possible downgrade
-- Cl. M-6; Currently Ba1 on review for possible downgrade
AMERIQUEST MORTGAGE: Moody's Downgrades Ratings on 23 Certs.
------------------------------------------------------------
Moody's Investors Service downgraded 23 certificates and placed on
review for possible downgrade 57 certificates from 34 deals
originated in 2004 by Ameriquest Mortgage Company and Argent
Mortgage Company. The transactions are backed by adjustable and
fixed-rate subprime mortgage loans.
The actions and reviews are based on the analysis of the current
credit enhancement levels provided by excess spread,
overcollateralization, and subordinate classes relative to the
expected loss. All the deals are past or will soon be past their
stepdown date. Being that most deals are passing their triggers,
the subordinate tranches are being paid, allowing the enhancement
levels for all classes to decrease to their respective target
levels. The decreased levels of subordination combined with
higher back-ended expected losses are leading to theses actions
and reviews.
Complete rating actions are:
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R1
-- Cl. M-8, Downgraded to Ba1 from Baa2
-- Cl. M-9, Downgraded to B3 from Baa3
-- Cl. M-10, Downgraded to Caa3 from Ba1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R2
-- Cl. M-6, Placed on Review for Possible Downgrade,
currently A3
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Ba2
-- Cl. M-9, Downgraded to Ca from Caa1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R3
-- Cl. M-3, Downgraded to Baa2 from A3
-- Cl. M-4, Downgraded to Ba2 from Baa1
-- Cl. M-5, Downgraded to B1 from Baa2
-- Cl. M-6, Downgraded to B3 from Baa3
-- Cl. M-7, Downgraded to Caa3 from Ba1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R4
-- Cl. M-2, Downgraded to Baa1 from A2
-- Cl. M-3, Downgraded to Baa2 from A3
-- Cl. M-4, Downgraded to Ba2 from Baa1
-- Cl. M-5, Downgraded to B2 from Baa2
-- Cl. M-6, Downgraded to Caa1 from Baa3
-- Cl. M-7, Downgraded to Ca from Ba2
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R5
-- Cl. M-4, Downgraded to Ba2 from Baa1
-- Cl. M-5, Downgraded to B1 from Baa2
-- Cl. M-6, Downgraded to B3 from Baa3
-- Cl. M-7, Downgraded to Caa3 from Ba1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R7
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-11, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R8
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R9
-- Cl. M-6, Placed on Review for Possible Downgrade,
currently Baa1
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R10
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R11
-- Cl. M-8, Downgraded to Ba1 from Baa2
-- Cl. M-9, Downgraded to B1 from Baa3
-- Cl. M-10, Downgraded to Caa2 from Ba1
Issuer: Ameriquest Mortgage Securities Inc., Series 2004-R12
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Asset Backed Securities Corporation Home Equity Loan Trust
2004-HE6
-- Cl. M6, Placed on Review for Possible Downgrade,
currently Baa3
Issuer: Chase Funding Loan Acquisition Trust 2004-AQ1
-- Cl. B-4, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: GSAMP Trust 2004-AR1
-- Cl. B-4, Placed on Review for Possible Downgrade,
currently Ba1
-- Cl. B-5, Placed on Review for Possible Downgrade,
currently Ba2
Issuer: GSAMP Trust 2004-AR2
-- Cl. B-2, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. B-3, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. B-4, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-MCW1
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-MHQ1
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WCW1
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WCW2
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WHQ1
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WHQ2
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WWF1
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-11, Placed on Review for Possible Downgrade,
currently Ba1
AMORTIZING RESIDENTIAL: Realized Losses Cue S&P to Junk Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on seven
classes of mortgage-backed securities issued by two Amortizing
Residential Collateral Trust transactions. S&P removed three of
the lowered ratings from CreditWatch with negative implications.
Furthermore, S&P affirmed its ratings on the remaining classes
from these two ARC transactions.
The downgrades reflect realized losses that have exceeded monthly
excess interest cash flow, thereby reducing overcollateralization.
For the prior six months, average realized losses have outpaced
average excess interest by 4.5x for series 2002-BC10 ($333,800 vs.
$74,372) and 3.1x for series 2002-BC10 ($455,417 vs. $146,861).
As a result, O/C for series 2002-BC10 has dropped to $719,282
(target: $3,209,598), and there is no O/C remaining for series
2004-1 (target: $2,991,354). S&P loss projections indicate that
the current performance trends may further compromise credit
support for these classes. Furthermore, series 2004-1 will begin
to step down starting with the next remittance period, reducing
subordination for the transaction. Finally, these transactions
have sizeable loan amounts that are severely delinquent (90-plus
days, foreclosures, and REOs), which suggests that the unfavorable
performance trends are likely to continue. The severe
delinquencies relative to O/C are:
-- Series 2002-BC10: $5,641,000 (18.15%) in delinquencies
versus $719,282 in O/C; and
-- 2004-1: $18,028,000 (12.70%) in delinquencies versus $0
in O/C.
As of the September 2007 remittance report, cumulative realized
losses for the downgraded transactions, as a percentage of the
original pool principal balances, were as follows:
-- 2002-BC10: 1.76%, $11,267,799; and
-- 2004-1: 1.51%, $9,035,633.
S&P removed the ratings on classes M2 and M3 from series 2002-BC10
and the rating on class B1 from series 2004-1 from CreditWatch
negative because S&P lowered them 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 reflect credit support levels that are sufficient
to maintain the current ratings.
Subordination, O/C, and excess interest cash flow provide credit
support for these transactions. The collateral for these series
consists of 30-year subprime, fixed- or adjustable-rate mortgage
loans that are secured by first
liens on one- to four-family residential properties.
Ratings Lowered and Removed from Creditwatch Negative
Amortizing Residential Collateral Trust
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2002-BC10 M2 CCC BB-/Watch Neg
2002-BC10 M3 CCC B+/Watch Neg
2004-1 B1 CCC B/Watch Neg
Ratings Lowered
Amortizing Residential Collateral Trust
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2002-BC10 M1 B AA
2004-1 M8 BB+ BBB
2004-1 M9 B BBB-
2004-1 B2 D CCC
Ratings Affirmed
Amortizing Residential Collateral Trust
Mortgage pass-through certificates
Series Class Rating
------ ----- ------
2002-BC10 A4 AAA
2004-1 A5 AAA
2004-1 M1 AA+
2004-1 M2 AA
2004-1 M3 AA-
2004-1 M4 A+
2004-1 M5 A
2004-1 M6 A-
2004-1 M7 BBB+
ANDREW BAILEN: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Andrew S. Bailen
10 Knoll Top Court
Denville, NJ 07834
Bankruptcy Case No.: 07-25345
Chapter 11 Petition Date: October 22, 2007
Court: District of New Jersey (Newark)
Debtor's Counsel: Richard Honig, Esq.
Hellring, Lindeman, Goldstein & Siegal
One Gateway Center 8th Floor
Newark, NJ 07102
Tel: (973) 621-9020
Estimated Assets: $100,000 to $1 Million
Estimated Debts: $1 Million to $100 Million
Debtor's list of its 20 Largest Unsecured Creditors:
Entity Claim Amount
----------- ------------
New Jersey, State of $200,000
Dept. of Treasury/Div. of Taxation
50 Barrack Street
P.O. Box 269
Trenton, NJ 08695-0269
Wachovia Bank $43,895
P.O. Box 15469
Wilmington, DE 19886
Amex Business Platinum $43,681
P.O. Box 360001
Fort Lauderdale, FL 33336
M&T Credit Services LLC $34,121
American Express $30,052
Delta American Express (2) $24,836
Chase Continental (AB) $22,215
Citi AA Advantage $21,291
Bank of America (1) $19,570
Chase/Office Depot $19,498
Advanta $16,681
Sky Bank $14,929
Delta American Express (1) $13,098
Citibusiness $11,281
MBNA Quickbooks $11,000
Valley National Bank $10,295
Chevy Chase $9,405
Audi Financial Services $8,063
American Express Business Line $8,056
Chase Business Card $7,769
ANGIOTECH PHARMA: Low Revenues Cue Moody's to Downgrade Ratings
---------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
of Angiotech Pharmaceuticals Inc. to B3 from B2 and changed the
rating outlook to negative from stable. Although Moody's affirmed
the company's Speculative Grade Liquidity Rating, Moody's believes
the company is more weakly positioned within the SGL-3 category.
The downgrade of Angiotech's Corporate Family Rating to B3 is
driven primarily by the company's lowered revenue and EBITDA
guidance for fiscal 2007. As a result of continued constraints on
TAXUS drug-eluting stent sales as well as delayed and slower than
expected new product launches, Moody's anticipates that the
company's free cash flow will be negative during 2007, requiring
use of cash balances.
Diana Lee, a senior credit officer at Moody's said, "If Angiotech
begins to burn through cash at an accelerated rate, the ratings
would likely be downgraded." The company still maintains about
$132 million in cash and investments as of Sept. 30, 2007, which
is expected to provide some liquidity cushion over the near term.
Angiotech's implied rating under Moody's Global Medical Products
and Device Methodology is a "B3" based on financial data for the
twelve months ended June 30, 2007. However, in Moody's opinion,
the company's weaker liquidity and extremely poor credit metrics -
which are likely to decline further assuming no improvement in
sales - provide rationale for the negative outlook.
Ratings downgraded:
Angiotech Pharmaceuticals, Inc.
-- Corporate Family Rating, B3 from B2
-- $325 Senior Unsecured Notes, B2, LGD3, 46% from B1, LGD3,
46%
-- $250 Senior Subordinated Notes, Caa1, LGD6, 91% from B3,
LGD6, 91%
-- Probability of Default Rating, B2 from B1
Rating affirmed:
Angiotech Pharmaceuticals, Inc.
-- Speculative Grade Liquidity Rating at SGL-3
Angiotech Pharmaceuticals Inc., founded in 1992, based in
Vancouver, Canada, is a specialty pharmaceutical company that
focuses on drug-device combinations and drug-loaded surgical
biomaterial implants. The company reported nearly $324 million in
total revenue for the twelve months ended June 30, 2007.
ANTONIO CHEVRES: Case Summary & 15 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Antonio Jose Chevres
P.O. Box 3254
Lajas, PR 00667
Tel: (787) 485-0820
Bankruptcy Case No.: 07-06153
Chapter 11 Petition Date: October 22, 2007
Court: District of Puerto Rico (Old San Juan)
Debtor's Counsel: Carmen D. Conde Torres, Esq.
254 San Jose Street 5th Floor
San Juan, PR 00901-1523
Tel: (787) 729-2900
Fax: (787) 729-2203
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $100,000 to $500,000
Debtor's list of its 15 Largest Unsecured Creditors:
Entity Claim Amount
----------- ------------
Doral Bank $52,887
P.O. Box 71394
San Juan, PR 00936
Banco Santander of PR $30,620
P.O. Box 362589
San Juan, PR 00936-2589
AEE-Vega Alta $25,454
P.O. Box 363508
San Juan, PR 00936-2598
Westernbank $12,739
Land & Sea Distributing, Inc. $9,300
AEE - Villa Clementina $8,746
AEE - Plaza Alejandrino 8 $4,352
AEE - Parguera $3,747
AEE - Plaza Alejandrino $2,988
Citicard $1,571
BBVA $1,486
The Hillman Group, Inc $1,413
Citimortgage $1,100
Equip Leasing $885
AEE - Plaza Alejandrino 7 $332
ARGENT MORTGAGE: Moody's Lowers Rating on 23 Certificates
---------------------------------------------------------
Moody's Investors Service downgraded 23 certificates and placed on
review for possible downgrade 57 certificates from 34 deals
originated in 2004 by Ameriquest Mortgage Company and Argent
Mortgage Company. The transactions are backed by adjustable and
fixed-rate subprime mortgage loans.
The actions and reviews are based on the analysis of the current
credit enhancement levels provided by excess spread,
overcollateralization, and subordinate classes relative to the
expected loss. All the deals are past or will soon be past their
stepdown date. Being that most deals are passing their triggers,
the subordinate tranches are being paid, allowing the enhancement
levels for all classes to decrease to their respective target
levels. The decreased levels of subordination combined with
higher back-ended expected losses are leading to theses actions
and reviews.
Complete rating actions are:
Issuer: Argent Securities Inc., Series 2004-PW1
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Baa1
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Ba1
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently B1
-- Cl. M-11, Downgraded to C from Caa2
Issuer: Argent Securities Inc., Series 2004-W1
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Argent Securities Inc., Series 2004-W2
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Argent Securities Inc., Series 2004-W3
-- Cl. M-4, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-5, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Argent Securities Inc., Series 2004-W4
-- Cl. M-3, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-4, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Argent Securities Inc., Series 2004-W5
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Argent Securities Inc., Series 2004-W6
-- Cl. M-6, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Argent Securities Inc., Series 2004-W7
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba2
Issuer: Argent Securities Inc., Series 2004-W8
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Argent Securities Inc., Series 2004-W9
-- Cl. M-6, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Argent Securities Inc., Series 2003-W10
-- Cl. M-6, Placed on Review for Possible Downgrade,
currently Baa3
Issuer: Argent Securities Inc., Series 2004-W11
-- Cl. M-11, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Asset Backed Securities Corporation Home Equity Loan Trust
2004-HE6
-- Cl. M6, Placed on Review for Possible Downgrade,
currently Baa3
Issuer: Chase Funding Loan Acquisition Trust 2004-AQ1
-- Cl. B-4, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: GSAMP Trust 2004-AR1
-- Cl. B-4, Placed on Review for Possible Downgrade,
currently Ba1
-- Cl. B-5, Placed on Review for Possible Downgrade,
currently Ba2
Issuer: GSAMP Trust 2004-AR2
-- Cl. B-2, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. B-3, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. B-4, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-MCW1
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-MHQ1
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WCW1
-- Cl. M-7, Placed on Review for Possible Downgrade,
currently Baa2
-- Cl. M-8, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-9, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WCW2
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WHQ1
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WHQ2
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Ba1
Issuer: Park Place Securities, Inc., Asset-Backed Pass-Through
Certificates, Series 2004-WWF1
-- Cl. M-10, Placed on Review for Possible Downgrade,
currently Baa3
-- Cl. M-11, Placed on Review for Possible Downgrade,
currently Ba1
ATARI INC: BlueBay Buys $3 Million Guggenheim Debt Facility
-----------------------------------------------------------
Funds affiliated with BlueBay Asset Management plc had purchased
all of the $3 million of loans outstanding under Atari Inc.'s
Credit Facility with Guggenheim Corporate Funding LLC and that it
had entered into a Senior Secured Credit Facility with BlueBay
High Yield Investments (Luxembourg) S.A.R.L., as the successor
administrative agent.
BlueBay Asset is a significant shareholder of Infogrames
Entertainment S.A., Atari's majority stockholder.
The Senior Secured Credit Facility:
-- waives and amends certain provisions of the Guggenheim
Credit Facility;
-- increases the availability to $10 million;
-- eliminates the borrowing base requirements and certain
prepayment fees; and
-- extends the maturity of the outstanding borrowings to
Dec. 31, 2009.
The two year $10 million Senior Secured Credit Facility is a
first step in securing financing to build inventory for the 2007
calendar holiday season and for day-to-day working capital needs.
The $10 million does not fully satisfy Atari's funding
requirements and additional financing is being sought.
"This revised Credit Facility is a major step in addressing
Atari's liquidity needs and providing financing to support its
near term business plan," Curt G. Solsvig III, chief restructuring
officer of Atari, said.
The Senior Secured Credit Facility raises the borrowing
availability which was limited by a letter agreement entered into
on Oct. 1, 2007, with Guggenheim waiving non-compliance or
potential non-compliance with certain representations and
covenants and limiting the aggregate revolving commitment under
the credit facility to no more than $3 million.
About Atari Inc.
Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) -
http://www.atari.com/-- together with its subsidiaries,
publishes, develops, and distributes video game software in North
America. It offers games for various platforms. Its portfolio of
games includes action, adventure, strategy, role-playing, and
racing. Atari distributes its video game software in the United
States, Canada, and Mexico through mass merchants, retail outlets,
online outlets, specialty retailers, and distributors. The
company, founded in 1992, was formerly known as Infogrames Inc.
and GT Interactive Software Corp. It changed its name to Atari
Incorporated in 2003 and is a subsidiary of Infogrames
Entertainment SA.
Going Concern Doubt
New York-based Deloitte & Touche LLP expressed substantial doubt
about Atari's ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended March 31, 2007. The auditing firm pointed to the
company's significant operating losses.
BANKUNITED FINANCIAL: Earns $81.4 Million in Year Ended Sept. 30
----------------------------------------------------------------
BankUnited Financial Corporation, parent of BankUnited FSB,
reported net income of $81.4 million for the fiscal year ended
Sept. 30, 2007, compared to $83.9 million for the fiscal year
ended Sept. 30, 2006.
Excluding a $5.0 million pre-tax charge for other-than-temporary
impairments on various investment securities, earnings were
$84.7 million for the fiscal year ended Sept. 30, 2007.
Net income for the quarter ended Sept. 30, 2007, was $6.4 million,
compared to $0.63 per share for the same quarter last year.
Excluding the $5.0 million pre-tax charge (for other-than-
temporary impairments on various investment securities, earnings
were $9.7 million for the fourth quarter of fiscal 2007.
"While we are pleased with our earnings for the fiscal year, we
are disappointed with our fourth-quarter results," said Alfred R.
Camner, BankUnited's chairman and chief executive officer. "It is
clear that this difficult economic climate will continue. There
is significant volatility in the markets, the housing sector is
still in a downturn, and non-performing assets have not yet
leveled off. However, we do have several things in our favor: our
capital position is strong, we are a Florida-based banking
franchise, and our net charge-offs remain manageable.
"In our pre-release we reported a loan loss provision of $8 to $10
million. We have increased the provision to $19.1 million. This
change is based on industry trends, including further difficulties
in the housing markets, particularly in certain geographic areas
that have been impacted by price decreases.
"The environment will continue to be challenging. Succeeding in
this type of downturn requires focus and experience - two of
BankUnited's management team's strengths. Looking ahead, we will
concentrate on achieving efficiencies in all of our business lines
and absorbing the growth of the last two years. In addition, we
will focus on managing delinquencies in our mortgage portfolio and
implementing expense-control measures. We have built a strong
Florida franchise complemented by a national mortgage lending
operation, and we will continue to build upon this base."
Ramiro Ortiz, BankUnited's president and chief operating officer,
added, "In fiscal year 2007, our commercial and neighborhood-
banking businesses continued to perform strongly. We showed
double-digit-percentage increases in total and core deposits, and
our small business and commercial banking areas continued to add
lending and depository relationships. We look for all of our
business lines to continue on a pace of moderate growth in the
upcoming year.
"We opened three branches in the fourth quarter and ten for the
year, including entry into new markets in Indian River and
Pinellas counties. According to June 30, 2007, FDIC information,
BankUnited's deposit market share in Florida grew 17%, and, for
the second-consecutive year, our market share grew in Miami-Dade,
Broward and Palm Beach counties. Our neighborhood-banking
strategy continues to work, and our fees on loans and deposits
increased more than 28%. We intend to add fewer branches in 2008
and focus on deepening relationships with customers in the markets
we serve.
"Wholesale lending has been an important part of BankUnited's
history, and we remain committed to this line of business.
Wholesale, like every other area of our company, is focused on
streamlining and refining processes in an effort to become more
efficient. By focusing on the strategies that helped us grow the
bank in the past, we will work our way through this difficult
cycle." Net-Interest Margin
Net-interest Margin
Net-interest margin for the quarter ended Sept. 30, 2007, was
2.30%, compared to 2.40% for the preceding quarter, and 2.26% for
the same quarter last year. While the core business margin did
increase slightly, it was offset by the carrying cost of the non-
performing assets.
Net-interest margin for the fiscal year was 2.36%, up from 2.13%
for the 2006 fiscal year.
Deposit Growth
Total deposits increased 17% to $7.1 billion at Sept. 30, 2007, up
from $6.1 billion at Sept. 30, 2006. Core deposits increased to
$5.1 billion at Sept. 30, 2007, up 16% from Sept. 30, 2006. Non-
interest-bearing deposits decreased to $342 million at Sept. 30,
2007, down 13% from Sept. 30, 2006.
According to a report issued by the FDIC, BankUnited had deposit
market share in Florida of 1.94% as of June 30, 2007, up from
1.66% at June 30, 2006.
Loan Production and Balances
Total loan originations for the quarter were $1.0 billion, down
39.7% from the same quarter last year. Total loan originations
for the 2007 fiscal year were $4.6 billion, down 32.2% from the
2006 fiscal year. After loan sales and repayments, the total net
loan portfolio was $12.6 billion at Sept. 30, 2007, compared to
$12.3 billion at June 30, 2007, and $11.4 billion at Sept. 30,
2006.
Non-Interest Income
Total non-interest income, which includes the $5.0 million pre-tax
charge for other-than-temporary impairments on the various
investment securities previously mentioned, was $2.6 million for
the fourth quarter of 2007, down $7.6 million, or 75%, from the
same quarter last year. For the 2007 fiscal year, total non-
interest income was $32.6 million, down $3.0 million, or 9%, from
the 2006 fiscal year.
Balance Sheet
At Sept. 30, 2007, BankUnited Financial Corp.'s consolidated
financial statements showed $15.046 billion in total assets,
$14.234 billion in total liabilities, and $812 million in total
shareholders' equity.
About BankUnited Financial
Based in Coral Gables, Fla., BankUnited Financial Corp. (NASDAQ:
BKUNA) -- http://www.bankunited.com/ -- is the holding company
for BankUnited FSB, the largest banking institution headquartered
in Florida. Serving customers through 86 branches in 13 coastal
counties, including Miami-Dade, Broward, Palm Beach, Martin, St.
Lucie, Collier, Charlotte, Manatee, Hillsborough, Sarasota, Lee,
Indian River and Pinellas, BankUnited offers a full spectrum of
consumer and commercial banking products and services.
* * *
As reported in the Troubled Company Reporter on Sept. 12, 2007,
Fitch Ratings affirmed the ratings of BankUnited Financial Corp.
and its subsidiary BankUnited FSB, including the holding company's
and subsidiary's Long-Term Issuer Default Ratings, both at 'BB+'.
The Rating Outlook on all of the ratings is Stable.
BAYOU GROUP: Wants $106 Million in Funds Distributed to Creditors
-----------------------------------------------------------------
Jeff J. Marwil, Esq., at Jenner & Block LLP, the sole managing
member in Bayou Group LLC and its debtor-affiliates' bankruptcy
cases, is seeking an order of restitution from a U.S. district
judge to make distribution to some creditors defrauded by the
hedge fund, Bill Rochelle of Bloomberg News reports, citing a
court filing.
The funds, approximately amounting to $106 million, are the
proceeds of the series of fraudulent conveyance lawsuits filed by
Mr. Marwil against former insiders of the Debtors, Bloomberg News
relates.
The distribution is not under the jurisdiction of the U.S.
Bankruptcy Court for the Southern District of New York, according
to Bloomberg News.
Notwithstanding, the lawsuits, totaling 119, were permitted by
bankruptcy court judge Adlai S. Hardin Jr. to continue as a
condition to approval of any plan the Debtors may file.
In June 2007, the Debtors delivered to the Bankruptcy Court their
Joint Chapter 11 Plan of Reorganization. However, the Debtors
later withdrew that motion and asked for a further extension of
their exclusive period to file a plan to be able to address
complicated legal issues involved in the litigation of the pending
adversary proceedings.
Judge Hardin granted further extension of the Debtors' exclusive
period to file a Chapter 11 plan and is set to expire on Sunday,
Oct. 28, 2007.
Based in Chicago, Illinois, Bayou Group LLC operates and manages
hedge funds. The company and its affiliates filed for chapter 11
protection on May 30, 2006 (Bankr. S.D.N.Y. Case No. 06-22306).
Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors
in their restructuring efforts. Joseph A. Gershman, Esq., and
Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman,
LLP, represents the Official Committee of Unsecured Creditors.
When the Debtors filed for protection from their creditors, they
estimated assets and debts of more than $100 million.
BEECHGROVE REDEVELOPMENT: Case Summary & 39 Largest Creditors
-------------------------------------------------------------
Lead Debtor: Beechgrove Redevelopment, L.L.C.
946 Beechgrove Boulevard
Westwego, LA 70094
Bankruptcy Case No.: 07-12057
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Beechgrove Redevelopment Phase II, L.L.C. 07-12058
Chapter 11 Petition Date: October 24, 2007
Court: Eastern District of Louisiana
Debtors' Counsel: Douglas S. Draper, Esq.
Jan Marie Hayden, Esq.
Heller Draper Hayden Patrick & Horn, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, LA 70130
Tel: (504) 299-3300, (504) 581-9595
Fax: (504) 299-3399, (504) 522-0949
Estimated Assets Estimated Debts
---------------- ---------------
Beechgrove Redevelopment, $1 Million to $1 Million to
L.L.C. $100 Million $100 Million
Beechgrove Redevelopment $1 Million to $1 Million to
Phase II, L.L.C. $100 Million $100 Million
A. Beechgrove Redevelopment, LLC's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Pontchartrain Mechanical $120,193
716 Little Farms Avenue
Metairie, LA 70003
The Rightway Group contractor loan $80,000
405 Gretna Boulevard, to project
Suite 106
Gretna, LA 70056
Jefferson Housing Foundation roof materials $52,510
6540 Lapalco Boulevard
Marrero, LA 70072
Sunbelt Supplies, L.L.C. building material $52,277
Metro Disposal garbage claim $40,000
Carpet Corner carpets $36,352
C. Spencersmith, A.I.A., contractor claim $35,000
Architects
Republic National Cabinet cabinetry $31,561
Corp.
M.&M. Electric electrical $30,244
Care Services, Inc. $21,929
Peak Performance air conditioning $5,655
(H.V.A.C.)
Metro Waste $4,225
Gallagher Security $2,642
Mobile Mini storage containers $1,374
Miracle Man $618
Ameritech A/C & Heating $329
House of Time $71
Creighton B. Abadie, Esq. unknown
Edward Howell Crosby unknown
B. Beechgrove Redevelopment Phase II, LLC's 20 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Rightway Group $80,000
405 Gretna Boulevard,
Suite 106
Gretna, LA 70058
Jefferson Housing Foundation S.S.-$22,000 Assets/ $44,858
6540 Lapaico Boulevard May 5 $22,858
Marrero, LA 70072
Metro Disposal, Inc. $40,000
2500 Joseph Street
Harvey, LA 70058
Metro Waste $36,102
C. Spencersmith, A.I.A. $35,000
Architects
Care Services, Inc. $21,949
Crown Properties, Inc. $8,269
Jones, Inc. $7,500
Entergy House Meter $4,885
Pike Electric $4,875
Professional Lawn Care $3,450
Gallagher Security $2,642
Home Depot $821
Nortex $750
A.T.&T. $720
Miracle Man $615
Mack Plumbing $596
Sherwin Williams $563
Ideal Appliance $487
Pest Pro Ace Pest Control $385
BELLE HAVEN: Moody's Lowers and Reviews Ratings on Two Notes
------------------------------------------------------------
Moody's Investors placed these notes issued by Belle Haven ABS CDO
2006-1 on review for possible downgrade:
-- Class Description: $170,000,000 Class A-2 Floating Rate
Notes Due 2046
Prior Rating: Aaa
Current Rating: Aaa, on review for possible downgrade
In addition Moody's also announced that it has downgraded and left
on review for possible downgrade these notes:
-- Class Description: $29,000,000 Class D Floating Rate
Deferrable Notes Due 2046
Prior Rating: Baa2, on review for possible downgrade
Current Rating: Ba3, on review for possible downgrade
-- Class Description: $5,000,000 Class E Floating Rate
Deferrable Notes Due 2046
Prior Rating: Ba1, on review for possible downgrade
Current Rating: B3, on review for possible downgrade
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of structured
finance securities.
BOWATER INC: Inks Deal with US DOJ to Complete Abitibi Merger
-------------------------------------------------------------
Abitibi-Consolidated Inc. and Bowater Incorporated have reached an
agreement with the United States Department of Justice that will
allow the completion of the proposed combination of the two
companies.
Under the terms of the agreement, which was signed and filed in
the U.S. Federal District Court in Washington, D.C., the companies
have agreed to divest one newsprint mill, Abitibi-Consolidated's
mill in Snowflake, Arizona.
The Snowflake mill has an annual capacity of approximately 375,000
tonnes. Scotia Capital Inc. will be engaged as exclusive
financial advisor for the sale of the Snowflake mill and related
assets, and all inquiries or expression of interest should be
forwarded directly to their attention.
The proposed combination has now received all necessary regulatory
approvals, including those from the Canadian Competition Bureau,
the Federal Minister of Industry under the Investment Canada Act,
the Quebec Superior Court and the U.S. Department of Justice, as
well as the necessary approvals from shareholders of both Abitibi-
Consolidated and Bowater.
The combination is expected to close by the end of the month,
following the completion of certain administrative formalities.
"We appreciate the hard work of the U.S. Department of Justice
staff and everyone else involved in completing this process, and
with this last approval, we look forward to closing the proposed
transaction quickly," John W. Weaver, Abitibi-Consolidated
president and chief executive officer, commented. "We are eager
to begin the work of building a new company that creates long-term
value for all of our stakeholders."
"We believe the significant synergies we anticipate to generate
from the combination will create a stronger company, better
positioned to address the challenges of the marketplace," added
David J. Paterson, chairman, president and chief executive officer
of Bowater. "We expect that a more efficient manufacturing
platform will enable us to deliver more value through better
product quality and improved logistical flexibility."
The combined company, which will be called AbitibiBowater Inc.,
will produce a range of newsprint and commercial printing papers,
market pulp and wood products. AbitibiBowater will own or operate
31 pulp and paper facilities and 35 wood product facilities
located in the United States, Canada, the United Kingdom and South
Korea. The new company's shares will trade under the stock symbol
ABH on both the New York Stock Exchange and the Toronto Stock
Exchange.
About Bowater Incorporated
Bowater Inc. (NYSE: BOW, TSX: BWX) -- http://www.bowater.com/
-- produces coated and specialty papers and newsprint. In
addition, the company sells bleached market pulp and lumber
products. Bowater has 12 pulp and paper mills in the United
States, Canada, and South Korea. In North America, it also owns
two converting facilities and 10 sawmills. Bowater's operations
are supported by approximately 835,000 acres of timberlands owned
or leased in the United States and Canada and 28 million acres of
timber cutting rights in Canada. Bowater operates six recycling
plants and is one of the world's largest consumers of recycled
newspapers and magazines.
About Abitibi-Consolidated Inc.
Headquartered in Montreal, Quebec, Abitibi-Consolidated Inc.
(NYSE: ABY, TSX: A) -- http://www.abitibiconsolidated.com/--
supplies newsprint and commercial printing papers and produces
wood products, serving clients in some 70 countries from its 45
operating facilities. Abitibi-Consolidated is one of the
recyclers of newspapers and magazines in North America.
* * *
As reported in the Troubled Company Reporter on Aug. 3, 2007,
Fitch Ratings has downgraded Bowater Inc.'s issuer default rating
to 'B-' from 'BB-'; senior unsecured debt to 'B-/RR4' from 'BB-';
secured revolver to 'BB-/RR1' from 'BB'. The rating outlook
remains negative.
As reported in the Troubled Company Reporter on June 20, 2007,
Standard & Poor's Ratings Services lowered its ratings on Bowater
Inc., including its corporate credit rating, to 'B' from 'B+'.
The outlook is negative.
BRAND ENERGY: S&P Revises Outlook to Stable from Negative
---------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Brand
Energy & Infrastructure Services (formerly FR Brand Acquisition
Corp.) to stable from negative and affirmed the 'B' corporate
credit rating on the company.
At the same time, S&P affirmed the bank loan and recovery ratings
on the company's $905 million first-lien credit facility and $375
million second-lien facility. The rating actions follow the
company's announcement that it plans to increase these facilities
by $250 million. Proceeds will be used to partially fund the
acquisitions of Industrial Specialists LLC and Protherm Services
Group, and to pay down the $57 million outstanding under Brand's
revolving credit facility.
Pro forma the transaction, Brand will have approximately
$1.1 billion in debt.
"The outlook revision reflects the expected improvement to the
company's pro forma debt leverage," said Standard & Poor's credit
analyst Aniki Saha-Yannopoulos.
The acquisitions are partially funded by cash equity from
principal owner First Reserve Corp. (unrated). Also, the addition
of the two companies allows Brand to diversify its operations
geographically and offer specialty craft services, which provide
some protection against the volatility in the oil and gas
industry.
All ratings on the credit facilities are affirmed. The first-lien
facility will increase by $175 million, and the U.S. tranche of
the second lien will increase by $75 million. Pro forma for the
$250 million increase, Brand's first-lien facility will consist of
a $125 million revolving credit facility, a $25 million synthetic
LOC facility, and a $755 million term loan B. The 'B' bank loan
rating on the first lien is at the same level as the corporate
credit rating on the company. The '3' recovery rating indicates
expectation of meaningful (50%-70%) recovery in the event of a
payment default.
On the second lien, the bank loan rating on the $180 million
tranche issued by Aluma Systems Inc., a Canadian subsidiary, is
'BB-', two notches above the corporate credit rating on the parent
company. The recovery rating is '1', indicating expectation of
very high (70%-90%) recovery in event of a payment default. The
bank loan rating on the $195 million U.S. tranche is 'CCC+', two
notches below the corporate credit rating. The '6' recovery
rating indicates the expectation of negligible (0%-10%) recovery
in the event of a payment default. The ratings on Brand reflect
its highly leveraged financial profile, exposure to the volatile
energy sector, and customer concentration risk. These factors are
partially mitigated by the company's position as the largest
provider of work access services in North America, its long-term
customer relationships, and its strong maintenance component of
approximately 65% of revenues.
C-BASS CBO: Moody's Lowers and Reviews Ratings on Two Notes
-----------------------------------------------------------
Moody's Investors Service placed these notes issued by C-BASS CBO
XVI Ltd. on review for possible downgrade:
-- Class Description: $314,800,000 Class A First Priority
Senior Secured Floating Rate Notes Due 2041
Prior Rating:Aaa
Current Rating: Aaa, on review for possible downgrade
-- Class Description: $22,500,000 Class B Second Priority
Senior Secured Floating Rate Notes Due 2041
Prior Rating:Aa2
Current Rating: Aa2, on review for possible downgrade
In addition Moody's also announced that it has downgraded and left
on review for possible downgrade these notes:
-- Class Description: $26,500,000 Class C Third Priority
Secured Floating Rate Deferrable Interest Notes Due 2041
Prior Rating: A2
Current Rating: Ba1, on review for possible downgrade
-- Class Description: $9,500,000 Class D Fourth Priority
Secured Floating Rate Deferrable Interest Notes Due 2041
Prior Rating: Baa2
Current Rating: B1, on review for possible downgrade
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of RMBS
assets.
CABLEVISION SYSTEMS: S&P Retains Ratings Under Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on Bethpage,
New York-based Cablevision Systems Corp. and related subsidiaries
remain on CreditWatch with negative implications, including the
'BB' corporate credit rating. This follows Cablevision's
announcement that it did not receive enough votes to approve the
acquisition of the company by the Dolan Family Group.
"Our decision to keep the ratings on CreditWatch Negative reflects
a lack of clarity on future financial policy, given the failure of
this latest LBO after several attempts by the Dolan Family Group
in recent years to take the company private or spin off various
business lines," said Standard & Poor's credit analyst Catherine
Cosentino. "We will therefore meet with Cablevision's management
to assess its financial and operating plans."
Ratings on Cablevision, a cable TV operator, were placed on
CreditWatch with negative implications on May 2, 2007, after the
company's Board of Directors had approved the Dolan Family Group's
$8 billion offer for public shares of the company.
CALPINE CORP: Ct. Denies Rosetta's Request to Dismiss Complaint
---------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York has denied the request of Rosetta Resources Inc. to
dismiss Calpine Corp.'s fraudulent conveyance complaint, on the
ground that it is uncertain at this time as to whether Calpine's
creditors will receive a full recovery on their claims.
According to the complaint, before its July 7, 2005 Petition Date,
Calpine entered into a purchase and sale agreement to sell
substantially all of its remaining domestic oil and
gas assets, other than certain gas pipeline assets, for
$1.05 billion to a group led by Calpine insiders, the management
team of its subsidiary, Rosetta. The buyers funded the purchase
price through debt and a private placement offering of equity in
which they themselves participated. The bulk of the assets
consisted of in-ground unextracted hydrocarbons not facilely
estimated by either bankers or non-insider hydrocarbon experts.
Calpine had alleged that the reasonably equivalent value of the
stock of its affiliates acquired by Rosetta exceeded the
$1.05 billion Purchase Price "by an amount presently estimated to
be approximately $400 million." However, Rosetta insisted that
the Complaint must be dismissed pursuant to Rule 12(b)(1) of the
Federal Rules of Civil Procedure because Calpine lacks standing to
assert fraudulent transfer claims, and the Court lacks subject
matter jurisdiction over the Adversary Proceeding.
In an 11-page memorandum decision and order, dated October 24,
2007, Bankruptcy Judge Burton R. Lifland stated that, "When
considering a motion to dismiss a complaint under Federal Rule
Rule 12(b)(6), a court must accept all factual allegations in the
complaint as true, even if the allegations are doubtful in fact."
"The issue is not whether a plaintiff will ultimately prevail but
whether the claimant is entitled to offer evidence to support the
claims," Judge Lifland added, citing In re Villager Pond, Inc. v.
Town of Darien, 56 F.3d 375, 378 (2d Cir.1995).
Judge Lifland found that, in Calpine's Disclosure Statement, the
Debtor predicts, based on the estimates of future value of the
reorganized company and the value of disputed claims, that the
equity in the reorganized company may be sufficient to satisfy the
unsecured creditor claims. However, he noted, the valuation
relies on a variety of assumptions including future company
performance, market events, financing and other events that may or
may not materialize.
According to Judge Lifland, Calpine acknowledges that under some
of its own valuation models, some unsecured classes may not
receive sufficient stock to pay both the owed principal and
interest. In all events, he said, unsecured creditor claims would
be satisfied in whole or in part with distributions of equity in
the reorganized company.
Moreover, Judge Lifland found that Calpine's proposed Plan of
Reorganization provides that several classes of unsecured
creditors will be impaired because they are receiving only an
equity stake in the reorganized company.
"Accordingly it is not beyond purview that the Debtor may be able
to establish at trial that a recovery in this action will result
in a benefit to these estates and thus, the motion to dismiss on
that ground is denied," Judge Lifland stated in the issued
Memorandum.
Judge Lifland determined that Rosetta's additional arguments
challenging the Complaint are premature in light of the fact that
the allegations must be taken as true. Also, he found that the
transaction documents referred to by Rosetta are neither
identified not referred to in the operative allegations of the
Complaint and may not be considered on a motion to dismiss.
Similarly, Judge Lifland said, Rosetta's speculation that any
recovery the Debtor would obtain would be negated by a claim of
Rosetta under Section 502(h) of the Bankruptcy Code is simply that
-- speculation.
Rosetta intends to continue to vigorously defend against Calpine's
claims, and will continue to highlight for the Court the
deficiencies in Calpine's claims against Rosetta.
About Rosetta
Based in Houston, Texas, Rosetta is an independent oil and gas
company engaged in the acquisition, exploration, development and
production of oil and gas properties in North America. Its
operations are concentrated in the Sacramento Basin of California,
South Texas, the Gulf of Mexico and the Rocky Mountains.
About Calpine Corporation
Based in San Jose, California, Calpine Corporation (OTC Pink
Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers
and communities with electricity from clean, efficient, natural
gas-fired and geothermal power plants. Calpine owns, leases and
operates integrated systems of plants in 21 U.S. states and in
three Canadian provinces. Its customized products and services
include wholesale and retail electricity, gas turbine components
and services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.
The company and its affiliates filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts. Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors. As of Aug. 31, 2007, the
Debtors disclosed total assets of $18,467,000,000, total
liabilities not subject to compromise of $11,207,000,000, total
liabilities subject to compromise of $15,354,000,000 and
stockholders' deficit of $8,102,000,000.
On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC,
and Silverado Geothermal Resources, Inc., filed voluntary chapter
11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198).
On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another
affiliate, also filed a voluntary chapter 11 petition (Bankr.
S.D.N.Y. Case No. 07-12967).
On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement. On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement. Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan. On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on September 26.
(Calpine Bankruptcy News; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).
CENTEX HOME: S&P Lowers Ratings on Five Securities Classes
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on five
classes of mortgage-backed securities issued by Centex Home Equity
Loan Trust's series 2002-A and 2002-C. At the same time, S&P
removed the ratings on three of these classes from CreditWatch
with negative implications. Concurrently, S&P affirmed its
ratings on the remaining eight classes from these transactions.
The downgrades reflect a reduction in credit enhancement caused by
monthly realized losses, as well as a high amount of severe
delinquencies (90-plus days, foreclosures, and REOs). The
downgrades in series 2002-A only affect loan group 2. Over the
past six months, monthly realized losses have consistently
outpaced excess interest for both transactions. During this
period, monthly realized losses have outpaced excess interest by
an average of approximately 1.9x for loan group 2 in series 2002-A
and 1.9x for series 2002-C. Overcollateralization, originally 50
basis points of each transaction's original pool balance, has
eroded to approximately 25 bps for loan group 2 in series 2002-A
and 12 bps for series 2002-C.
Subordination, overcollateralization, and excess spread provide
credit support for these transactions. The collateral supporting
these transactions consists of fixed- or adjustable-rate mortgage
loans secured by first or second liens on one- to four-family
residential properties.
Ratings Lowered and Removed from Creditwatch Negative
Centex Home Equity Loan Trust
Rating
------
Series Class To From
------ ----- -- ----
2002-A BV CCC BBB-/Watch Neg
2002-C B-1 CCC BBB/Watch Neg
2002-C B-2 CCC BB/Watch Neg
Ratings Lowered
Centex Home Equity Loan Trust
Rating
------
Series Class To From
------ ----- -- ----
2002-A MV-1 A AA
2002-A MV-2 BB A
Ratings Affirmed
Centex Home Equity Loan Trust
Series Class Rating
------ ----- ------
2002-A AF-4, AF-5, AF-6 AAA
2002-A AV AAA
2002-A MF-1 AA
2002-A MF-2 A
2002-A BF BBB
2002-C AF-4, AF-5, AF-6 AAA
2002-C M-1 AA
2002-C M-2 A
CHAMPION PARTS: Can Hire James F. Dowden as Bankruptcy Counsel
--------------------------------------------------------------
Champion Parts Inc. obtained authority from the U.S. Bankruptcy
Court for the Western District of Arkansas to employ James F.
Dowden PA as counsel.
The firm of James F. Dowden is expected to represent the Debtor in
this and other Courts during the Chapter 11 case.
The Debtor has chosen the firm because its lawyers are competent
and qualified bankruptcy and commercial law counsels.
James F. Dowden, Esq. tells the Court that his professional hourly
rate is $235 and that the firm will be employed under the terms of
a general retainer.
Mr. Dowden assures the Court that his firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Dowden can be reached at:
James F. Dowden PA
Tenth Floor
No. 212 Center Street
Little Rock, AR 72201
Fax (501) 374-5463
Headquartered in Hope, Arkansas, Champion Parts Inc. (OTC:CREBQ)
-- http://www.championparts.net/-- remanufactures fuel system
components, air conditioning compressors, front wheel drive
assemblies, and other underhood electrical and mechanical products
for the passenger car and light truck, agricultural, heavy-duty
truck and marine parts aftermarket.
The company filed for chapter 11 bankruptcy protection on Oct. 10,
2007 (Bankr. W.D. Ark. Case No. 07-73253). James F. Dowden, Esq.
represents the Debtor in its restructuring efforts. When the
Debtor filed for bankruptcy, it listed total assets of $26,389,000
and total debts of $25,251,000.
CHAMPION PARTS: Obtains Interim Approval to Use Cash Collateral
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Arkansas
gave Champion Parts Inc. interim authority to use the cash
collateral securing prepetition loans from PNC Bank National
Association.
The Debtor says that it will use the cash collateral for its
ordinary and necessary business expenses such as pay wages for the
period Oct. 10, 2007 to Nov. 3, 2007.
As adequate protection to PNC Bank, the Debtor granted security
interest in, and liens upon substantially all of the Debtor's
assets, both tangible and intangible. As additional adequate
protection, the Debtor has agreed to pay all postpetition federal
state and county taxes as and when due.
The Debtor has agreed to deliver to the Lender financials and
other information concerning the business affairs for the Debtor
as the Lender shall request
Headquartered in Hope, Arkansas, Champion Parts Inc. (OTC:CREBQ)
-- http://www.championparts.net/-- remanufactures fuel system
components, air conditioning compressors, front wheel drive
assemblies, and other underhood electrical and mechanical products
for the passenger car and light truck, agricultural, heavy-duty
truck and marine parts aftermarket.
The company filed for chapter 11 bankruptcy protection on Oct. 10,
2007 (Bankr. W.D. Ark. Case No. 07-73253). James F. Dowden, Esq.
represents the Debtor in its restructuring efforts. When the
Debtor filed for bankruptcy, it listed total assets of $26,389,000
and total debts of $25,251,000.
CHAMPION PARTS: May File Schedules & Statements Until November 12
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Arkansas
gave Champion Parts Inc. additional until Nov. 12, 2007, to file
its schedules of assets and liabilities and statement of financial
affairs.
The Debtor tells the Court that it needs the extension because its
customer and creditor base is wide-spread since about one thousand
of its mailing matrix includes international addresses. Hence,
its chapter 11 case is not a simple one to document.
Headquartered in Hope, Arkansas, Champion Parts Inc. (OTC:CREBQ)
-- http://www.championparts.net/-- remanufactures fuel system
components, air conditioning compressors, front wheel drive
assemblies, and other underhood electrical and mechanical products
for the passenger car and light truck, agricultural, heavy-duty
truck and marine parts aftermarket.
The company filed for chapter 11 bankruptcy protection on Oct. 10,
2007 (Bankr. W.D. Ark. Case No. 07-73253). James F. Dowden, Esq.
represents the Debtor in its restructuring efforts. When the
Debtor filed for bankruptcy, it listed total assets of $26,389,000
and total debts of $25,251,000.
CHESAPEAKE ENERGY: Plans Exchange Offer for 6.25% Pref. Stock
-------------------------------------------------------------
Chesapeake Energy Corporation intended to commence an offer to
exchange shares of its common stock for any and all of its
outstanding 2,300,000 shares of 6.25% Mandatory Convertible
Preferred Stock (CUSIP No. 165167818).
The number of shares of common stock to be exchanged for each
share of Preferred Stock will be fixed after 5:00 p.m. New York
City time Friday, Nov. 16, 2007, on the basis of the applicable
pricing formula set forth herein, and publicly disclosed prior to
the opening of trading Monday, Nov. 19, 2007.
The Exchange Ratio will equal the sum of (i) 6.25 shares of common
stock and (ii) a number of additional shares of common stock equal
to $71.43 divided by the arithmetic daily volume-weighted average
price of our common stock, over a trading period beginning on Nov.
2, 2007, and ending on the Pricing Date. The Exchange Ratio will
be subject to a maximum of 8.5542 shares of common stock and a
minimum of 7.7698 shares of common stock per share of Preferred
Stock.
The exchange offer will expire at 12:00 midnight, New York City
time, Tuesday, Nov. 20, 2007, unless extended or earlier
terminated by Chesapeake. Holders may withdraw tendered shares of
Preferred Stock at any time before the exchange offer expires, or,
if not returned, a holder may withdraw any tendered shares of
Preferred Stock that are not accepted by Chesapeake on or before
Dec. 20, 2007.
The tender and withdrawal of shares of Preferred Stock pursuant to
the Exchange Offer held in "street" name are subject to compliance
with the appropriate procedures of the automated tender offer
program, or ATOP, of The Depository Trust Company.
The exchange offer will be made pursuant to an offer to exchange
and related letter of transmittal, copies of which may be obtained
without charge from the information agent for the exchange offer,
Georgeson Inc., who may be reached at (888) 605-8334 (US toll-
free).
About Chesapeake Energy Corporation
Based in Oklahoma City, Oklahoma, Chesapeake Energy Corporation
(NYSE: CHK) -- http://www.chkenergy.com/-- produces natural gas
in the U.S. The company's operations are focused on exploratory
and developmental drilling and corporate and property acquisitions
in the Mid-Continent, Barnett Shale, Fayetteville Shale, Permian
Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex
and Appalachian Basin regions of the U.S.
* * *
As reported in the Troubled Company Reporter on Sept. 14, 2007,
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on oil and gas exploration and production company
Chesapeake Energy Corp. The outlook is positive.
As reported in the Troubled Company Reporter on Aug. 10, 2007,
Fitch Ratings has affirmed Chesapeake Energy Corporation's ratings
and revised the rating outlook to negative as: (i) issuer default
rating at 'BB'; (ii) senior unsecured debt at 'BB'; (iii) senior
secured revolving credit facility and hedge facilities at 'BBB-';
and (iv) convertible preferred stock at 'B+'.
CHRYSLER LLC: 55% UAW Workers Vote to Accept Tentative Pact
-----------------------------------------------------------
Results from four major Chrysler LLC plants in Michigan came in in
favor of a tentative labor contract between the carmaker and the
United Auto Workers union, tilting the ratification scale towards
the approval of the pact, Josee Valcourt and Neal E. Boudette of
the Wall Street Journal report citing people familiar with the
matter. Except for a union local in Beldivere, Illinois, about
55% of the total vote count from 26 of 27 union locals has
accepted the tentative agreement.
As reported in yesterday's Troubled Company Reporter, 78% of the
union members at Chrysler's assembly plant in Warren, Michigan,
accepted the contract, and 86% of workers at a metal stamping
plant in Sterling Heights, Michigan, voted yes. Both plants have
a total of 5,200 workers.
As previously reported, Bill Parker, Chair of the 2007 UAW
Chrysler National Negotiating Committee, who voted against the new
tentative labor agreement between Chrysler LLC and the United Auto
Workers union, released a minority report to the members of the
UAW Chrysler Council, urging the Council to reject Chrysler's
offer and let the Committee return to the bargaining table.
The UAW Chrysler Council, which includes local union leaders from
Chrysler LLC facilities throughout the U.S., voted overwhelmingly
to recommend ratification of the tentative agreement reached on
Oct. 10, 2007.
Mr. Parker, however, disclosed that the National Negotiating
Committee had a split vote on the contract.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- 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 company has dealers worldwide, including Canada, Mexico,
U.S., Germany, France, U.K., Argentina, Brazil, Venezuela,
China, Japan and Australia.
* * *
On Oct. 1, 2007, Standard & Poor's Ratings Services placed its
corporate credit ratings on Chrysler LLC and DaimlerChrysler
Financial Services Americas LLC on CreditWatch with positive
implications.
As reported in the Troubled Company Reporter on Aug. 8, 2007,
Standard & Poor's Ratings Services revised its loan and recovery
ratings on Chrysler LLC (B/Negative/--), including a 'BB-' rating
to the $5 billion "first-out" first-lien term loan tranche. This
rating, two notches above the corporate credit rating of 'B' on
Chrysler LLC, and the '1' recovery rating indicate S&P's
expectation for very high recovery in the event of payment
default. S&P also assigned a 'B' rating to the
$5 billion "second-out" first-lien term loan tranche. This
rating, the same as the corporate credit rating, and the '3'
recovery rating indicate S&P's expectation for a meaningful
recovery in the event of payment default.
Moody's Investors Service has affirmed Chrysler Automotive LLC's
B3 Corporate Family Rating, and the Caa1 rating of the company's
$2 billion senior secured, second lien term loan in connection
with Monday's closing of DaimlerChrysler AG's sale of a majority
interest of Chrysler Group to Cerberus Capital Management LLC.
CNH GLOBAL: Earns $122 Million in Third Quarter Ended Sept. 30
--------------------------------------------------------------
CNH Global N.V. reported Tuesday third quarter 2007 net income of
$122 million, up 82% compared to net income of $67 million in the
prior year. Results include restructuring charges, net of tax, of
$26 million in the third quarter of 2007, compared with $4 million
in 2006. Net income excluding restructuring charges, net of tax,
was $148 million, up 108% compared to $71 million in the prior
year.
Total revenues were $3.834 billion for the third quarter of 2007,
compared with total revenues of $2.922 billion in the same period
last year.
Net sales of equipment, comprising the company's agricultural and
construction equipment businesses were $3.557 billion for the
third quarter of 2007, compared to $2.679 billion for the same
period in 2006. Net sales increased 33% including 6% related to
currency.
For the first nine months of 2007, net income of $445 million was
up 73% compared to net income of $257 million in 2006. Results
include restructuring charges, net of tax, of $55 million in the
first nine months of 2007, compared with $13 million in the prior
year. Net income excluding restructuring charges, net of tax, was
$500 million in the September year-to-date period, up 85% compared
to $270 million in 2006.
Total revenues were $11.630 billion for the first nine months of
2007, compared with total revenues of $9.787 billion in the same
period last year.
Net sales of equipment, comprising the company's agricultural and
construction equipment businesses were $10.894 billion for 2007,
compared to $9.126 billion for the same period in 2006. Net sales
increased 19% including 5% related to currency.
"Our Equipment Operations gross margin rose 1.9 percentage points
to 19.4%, compared with the third quarter last year -- our ninth
consecutive quarter of year-over-year gross margin improvement.
Our industrial operating margin rose 2.5 percentage points to
8.4%, making it the best third quarter margin in CNH's history,"
said Harold Boyanovsky, CNH president and chief executive officer.
"Our growth in the quarter exceeded industry performance, as our
actions to revitalize our brands, enhance our customer and quality
focus, and leverage our global footprint continue to gain
traction. We are increasing our full year 2007 financial outlook
with an expected range of diluted EPS, excluding restructuring,
forecast at $2.55 to $2.60."
Consolidated Arbitration Proceeding
CNH, in September, submitted a response in a consolidated
arbitration proceeding pending in London before the ICC
International Court of Arbitration and booked a provision of
$45 million. This cost was included in CNH's third quarter
results. The Arbitration arose under a Services Agreement between
CNH and PGN Logistics Ltd, pursuant to which PGN provided
specified logistics services for CNH in Europe.
Net Debt (Cash) and Operating Cash Flow
Equipment Operations Net Debt (Cash) position (defined as total
debt less cash and cash equivalents, deposits in Fiat affiliates
cash management pools and intersegment notes receivables) was Net
Cash of ($413 million) on Sept. 30, 2007, compared to Net Cash of
($531 million) on June 30, 2007, and to Net Debt of $263 million
on Dec. 31, 2006.
In the quarter, Equipment Operations Net Cash decreased by
$118 million. Operating activities used $120 million of cash in
the quarter, as cash generated from earnings was offset by
seasonal changes in other assets and liabilities and increases in
working capital. Capital expenditures, in the quarter, were
$80 million. Year-to-date, Equipment Operations Net Debt has been
reduced by $676 million, driven by $793 million of cash generation
from operating activities, primarily earnings.
On Aug. 1, 2007, Case New Holland Inc. redeemed the full
$1.05 billion aggregate principal amount of its outstanding 9 1/4%
Senior Notes due 2011, with a combination of cash and term
financings from Fiat Finance North America. Rubin McDougal, CNH's
chief financial officer, said that "the action improves CNH's
balance sheet structure while reducing interest expense and will
have a net positive earnings impact over time, allowing CNH to
better manage its liquidity." Third quarter charges to redeem the
notes and write-off remaining unamortized issuance costs totaled
$57 million.
Financial Services Net Debt increased by $748 million to
$7.409 billion on Sept. 30, 2007, from $6.661 billion on June 30,
2007, driven primarily by higher levels of receivables.
Balance Sheet
At Sept. 30, 2007, the company's consolidated balance sheet showed
$22.679 billion in total assets, $16.935 billion in total
liabilities, and $5.744 billion in total shareholdoers' equity.
About CNH Global
CNH Global N.V. (NYSE: CNH) -- http://www.cnh.com/-- is engaged
in agricultural and construction equipment businesses. Supported
by about 11,500 dealers in 160 countries, CNH brings together the
knowledge and heritage of its Case and New Holland brand families
with its worldwide commercial, industrial, product support and
finance organizations. CNH Global N.V. is a majority-owned
subsidiary of Fiat S.p.A. (FIA.MI).
* * *
As reported in the Troubled Company Reporter on June 4, 2007,
Standard & Poor's Ratings Services raised its corporate credit
rating on CNH Global N.V. and related entities to 'BB+' from 'BB'
following the same rating action taken by Standard & Poor's on
CNH's parent company, Italy-based Fiat SpA. The outlook is
positive.
COMMERCIAL MORTGAGE: Fitch Junks Ratings on $16MM Cert. Classes
---------------------------------------------------------------
Fitch Ratings downgrades and assigns Distressed Recovery ratings
to Commercial Mortgage Corp.'s commercial mortgage pass-through
certificates, series 2000-CKP1, as:
-- $17.7 million class B-5 to 'B' from 'BB';
-- $9.7 million class B-6 to 'CCC/DR1' from 'B-';
-- $6.3 million class B-7 to 'C/DR6' from 'CC/DR4'.
In addition, Fitch affirms these:
-- $713.7 million class A-1B at 'AAA';
-- Interest-only class S at 'AAA';
-- $51.6 million class A-2 at 'AAA';
-- $58 million class A-3 at 'AAA';
-- $16.1 million class A-4 at 'AAA';
-- $16.1 million class B-1 at 'AAA';
-- $25.8 million class B-2 at 'AA-';
-- $12.9 million class B-3 at 'A-';
-- $33.9 million class B-4 at 'BB+'.
The balances of the classes B-8, B-9 and C certificates have been
reduced to zero due to realized losses.
The rating downgrades are the result of increased expected losses
on the specially serviced loans. As of the October 2007
distribution date, the pool has been reduced 25.4% to
$961.8 million from $1.29 billion at issuance. In addition, 41
loans (36.6%) have defeased, including seven of the top 10 loans
(19.9%).
Three assets (1.2%) are currently in special servicing: one loan
that is current (0.8%), one loan that is 60+ days delinquent
(0.2%) and one real estate owned property (0.1%).
The largest specially serviced loan is collateralized by a hotel
property located in Portland, Maine and is current. The
property's flag expired in July 2007 and is operating under a four
month extension to give the borrower time to find a new flag.
The second largest specially serviced loan is 60+ day delinquent
loan and is collateralized by an office property in Birmingham,
Michigan. The special servicer is currently discussing workout
options with the borrower.
The REO asset is a self storage facility located in Hamilton, OH.
The special servicer is working to stabilize the property and has
listed it for sale.
Fitch expects losses on the specially serviced loans. Losses are
expected to deplete class B-7 and impact class B-6.
Fitch reviewed the shadow rating of the 437 Madison Avenue loan
(8.6%). The 437 Madison Avenue loan is secured by a 782,921-
square foot office property in midtown Manhattan. The servicer-
provided debt service coverage ratio for the loan remains strong
at 3.09x for year end 2006, compared to 2.77x for year-end 2005,
2.49x for YE 2004, and 1.75x at issuance. As of July 2007, the
property was 99% occupied. Based on its strong performance, the
loan maintains an investment grade credit assessment.
COUNTRYWIDE FIN'L: Launches Move to Refinance $16 Billion Loans
---------------------------------------------------------------
Countrywide Financial Corporation will launch an outbound calling
initiative to refinance or modify up to $16 billion of Countrywide
loans for borrowers who are facing an adjustable-rate mortgage
reset through the end of 2008. This is Countrywide's
comprehensive home preservation program to reach out to borrowers
at-risk of default.
"Countrywide is committed to helping its customers sustain
homeownership," David Sambol, president and chief operating
officer of Countrywide, said. "Unprecedented times call for
unprecedented remedies. We are determined to assist borrowers who
have the willingness and wherewithal to remain in their homes, but
need a little help to do it."
"Countrywide believes that none of our subprime borrowers that
have demonstrated the ability to make payments should lose their
home to foreclosure solely as a result of a rate reset," Mr.
Sambol said. "This is yet another step in our continuing effort
to identify and improve existing programs that assist our
customers."
Countrywide will offer tailored solutions to its borrowers to
proactively address the rising foreclosure rate. Teams of
Countrywide specialists will contact customers who are current in
their payments and approaching a rate reset to ascertain the
borrowers circumstances and advise them about refinance and home
preservation options. Countrywide's new and enhanced programs
include: (i) Refinance Program; (ii) Modification Program; and
(iii) Home Preservation Efforts.
Refinance Program
The program is for Countrywide borrowers currently in a subprime
loan with a strong payment history, a special refinance unit was
created to contact approximately 52,000 borrowers to offer
refinance options.
The company has identified and will work to refinance
approximately $10 billion of mortgages. For this group,
Countrywide will offer borrowers options to refinance into prime
or FHA loans.
For those with credit issues, Countrywide will offer Fannie Mae or
Freddie Mac's expanded criteria programs. Countrywide has a track
record of transitioning borrowers from subprime products to prime
loans. Year-to-date, more than 31,000 borrowers have refinanced
to prime fixed rate loans totaling more than $5 billion.
Modification Program
Countrywide is identifying and contacting prime and subprime
borrowers who are current but unable to qualify for a refinance
and are likely to have difficulty affording an upcoming reset.
Countrywide will supplement its early notification letter to
borrowers by calling no later than three months prior to the reset
to determine their financial circumstances and develop affordable
solutions.
As a result of this initiative, Countrywide will modify
$4 billion in loans for approximately 20,000 borrowers in an
existing adjustable rate mortgage through the end of 2008.
Additionally, for subprime borrowers who are currently delinquent
and are experiencing financial difficulties as a result of a
recent reset, Countrywide has implemented a simplified loan
modification process. Countrywide is in the process of sending
letters to these borrowers offering a pre-determined, pre-
approved rate reduction. It is anticipated that 10,000 additional
borrowers, totaling $2.2 billion, will receive modifications
through this initiative by year-end.
Home Preservation Efforts
So far this year, Countrywide's existing home preservation efforts
have helped more than 40,000 borrowers stay in their homes
including the completion of 20,000 loan modifications.
Countrywide's comprehensive efforts help borrowers facing
financing difficulty. These include:
-- 2,700 trained home retention specialists that work with
delinquent borrowers by providing payment alternatives in
order to help them retain their homes.
-- Countrywide borrowers with an impending rate reset are
sent a letter 180, 90 and 45 days prior to the rate
increase to ensure that borrowers understand their
options.
-- Outreach to distressed homeowners in their own
communities by setting up face-to-face meetings through
various means; hosting seminars around the country to
help borrowers avoid foreclosure; participating in
foreclosure prevention workshops, teaching them about
possible foreclosure scams; and offering loan workouts
on-site.
-- Working with non-profit and community groups across the
country to create grassroots efforts to contact and
counsel distressed borrowers, particularly in communities
that are experiencing unusually high foreclosure rates.
For more information, contact Countrywide home retention team at
800-669-6650.
About Countrywide Financial
Calabasas, California-based, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- is a diversified
financial services provider. Through its family of companies,
Countrywide originates, purchases, securitizes, sells, and
services prime and nonprime loans; provides loan closing services
such as credit reports, appraisals and flood determinations;
offers banking services which include depository and home loan
products; conducts fixed income securities underwriting and
trading activities; provides property, life and casualty
insurance; and manages a captive mortgage reinsurance company. At
July 31, 2007, Countrywide employed 61,586 workers, 34,326 of
which originate loans. The company was founded in 1969.
Bankruptcy Speculation
Kenneth Bruce, a Merrill Lynch & Co. analyst in San Francisco,
raised the possibility that Countrywide might need to seek
protection from creditors under chapter 11 in a research report
entitled "Liquidity is the Achilles heel" distributed to Merrill
Lynch clients. "If liquidations occur in a weak market, then it
is possible for CFC to go bankrupt," Mr. Bruce wrote.
With $216 billion in assets and $202 billion in liabilities,
Countrywide would be the largest chapter 11 filing in U.S.
history by those measures.
The company however gave banking customers reassurance that their
money was safe. That company cited that it has assets of more
than $100 billion; has investment-grade ratings from three major
credit rating agencies; and credit woes currently hurting its
lending business won't affect federally insured deposits.
Countrywide also disclosed that it received a $2 billion strategic
equity investment from Bank of America which was completed and
funded Aug. 22, 2007.
In September 2007, Countrywide completed more than 17,000 loan
modifications and is on target to complete nearly 25,000 in
2007, in its ongoing effort to curb foreclosures.
CREDIT SUISSE: Poor Credit Support Cues S&P to Lower Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes from CSFB Home Equity Asset Trust 2002-3. At the same
time, S&P removed its rating on class M-2 from CreditWatch with
negative implications.
The lowered ratings reflect the deterioration of credit support as
of the September 2007 remittance period. Cumulative losses were
$15.37 million as of this period, or 2.50% of the original
principal balance. The rating on class B-1 was lowered to 'D'
because the class has incurred $203,351 in realized losses since
the July 2007 remittance period and has incurred interest
shortfalls. During the September 2007 remittance period,
overcollateralization increased from zero to $34,514, which is
still below its $3.08 million target. While the pool had paid
down to 5.70% of its original principal balance, serious
delinquencies were 17.32% of the current principal balance. The
six-month average monthly net loss amount is approximately
$276,297, while the 12-month average monthly net loss amount is
approximately $289,874.
The initial pool securing the mortgage pass-through certificates
consisted of closed-end, fixed- and adjustable-rate, first- and
second-lien mortgage loans with original terms to maturity not
greater than 30 years.
Ratings Lowered
CSFB Home Equity Asset Trust 2002-3
Rating
------
Class To From
----- -- ----
M-1 A AA+
B-1 D CCC
Rating Lowered and Removed from Creditwatch Negative
CSFB Home Equity Asset Trust 2002-3
Rating
------
Class To From
----- -- ----
M-2 B A/Watch Neg
CREDIT SUISSE: Moody's Downgrades Ratings on 22 Cert. Classes
-------------------------------------------------------------
Moody's Investors Service downgraded 22 classes of certificates
from six deals issued by CSFB Home Equity Mortgage Trust in 2005.
The transactions are backed by closed-end second lien and home-
equity line of credit loans.
The projected pipeline has been continuously increasing over the
past a few months and is likely to affect the credit support for
these certificates. Furthermore, many underlying first lien loans
are likely to have pending interest rate resets, which may cause
an increase in delinquencies and defaults on the second lien loans
in the pool. The certificates are being downgraded based on the
fact that the bonds' current credit enhancement levels, including
excess spread, may be too low compared to the current projected
loss numbers at the current rating level.
Complete rating actions are:
Issuer: CSFB Home Equity Mortgage Trust 2005-3
-- Cl. M-8, Downgraded to B3 from Baa3
-- Cl. B-1, Downgraded to Ca from Ba1
-- Cl. B-2, Downgraded to C from B3
Issuer: CSFB Home Equity Mortgage Trust 2005-4
-- Cl. M-7, Downgraded to Baa3 from Baa1
-- Cl. M-8, Downgraded to Ba3 from Baa2
-- Cl. M-9A, Downgraded to Caa2 from Baa3
-- Cl. M-9F, Downgraded to Caa2 from Baa3
-- Cl. B-1, Downgraded to C from Ba1
-- Cl. B-2, Downgraded to C from B3
Issuer: CSFB Home Equity Mortgage Trust 2005-5
-- Cl. M-4, Downgraded to A3 from A1
-- Cl. M-5, Downgraded to Baa1 from A2
-- Cl. M-6, Downgraded to Ba1 from A3
-- Cl. M-7, Downgraded to B1 from Baa1
-- Cl. M-8, Downgraded to B3 from Baa2
-- Cl. M-9, Downgraded to Caa3 from Baa3
-- Cl. B-1, Downgraded to C from B2
Issuer: CSFB Home Equity Mortgage Trust 2005-HF1
-- Cl. M-9, Downgraded to Ba1 from Baa3
-- Cl. B-1, Downgraded to Ba3 from Ba1
-- Cl. B-2, Downgraded to Caa1 from Ba2
Issuer: Home Equity Mortgage Trust 2005-1
-- Cl. B-1, Downgraded to Ba3 from Ba1
-- Cl. B-2, Downgraded to Caa2 from B3
Issuer: Home Equity Mortgage Trust 2005-2
-- Cl. B-2, Downgraded to B2 from Ba2
CTI FOODS: Aborted Rollout Plan Cues S&P's Negative CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Wilder,
Idaho-based CTI Foods Holding Co. LLC, including the 'B+'
corporate credit rating, on CreditWatch with negative
implications. This means that the ratings could be affirmed or
lowered following the completion of Standard & Poor's review.
CTI Foods is a manufacturer of processed food items for the
restaurant industry. The company had about $176 million of total
debt outstanding at Sept. 8, 2007.
"The CreditWatch listing follows CTI Foods' announcement that it
halted its planned national rollout of its bean product for a key
customer, due to the customer's recent request for specification
changes to the existing product," said Standard & Poor's credit
analyst Bea Chiem. "We believe this production halt may hurt the
company's fiscal 2007 and 2008 operating results, and that
leverage will be higher than previously forecasted."
"We also expect covenant levels will be very tight for the fiscal
year ending December 2007 and into fiscal 2008," added Ms. Chiem.
CTI Foods is currently in discussions with the customer about the
specification changes to the bean product, and hopes to settle the
issue over the near term.
Credit protection measures for the quarter ended Sept. 8, 2007,
were in line with Standard & Poor's expectations. Leverage was
around 5x and interest coverage was over 2x. Liquidity was
adequate with over $3 million in cash and $31 million available on
CTI Foods' $40 million revolver.
"Cushion on its financial covenants was sufficient, but we are
concerned with the company's ability to maintain this in the near
term, due to the losses incurred by the beans business versus our
prior expectations of positive, albeit minimal, cash flow from
this startup operation for 2007," said Ms. Chiem.
Standard & Poor's will monitor CTI's discussions with its key bean
customer, and its ability to roll out the product and restore
profitability to this segment. Standard & Poor's will review and
discuss financial plans with the company before resolving the
CreditWatch listing, as well as expected future levels of cushion
on CTI's financial covenants. If CTI is unable to restore
sufficient cushion on its financial covenants for future periods,
Standard & Poor's will lower the ratings.
CWABS INC: Low Credit Levels Prompt Moody's to Lower Ratings
------------------------------------------------------------
Moody's Investors Service downgraded seven certificates from three
deals issued by Countrywide Home Loans Inc. in 2002 and 2003. The
transactions are backed by first-lien adjustable-rate and fixed-
rate subprime mortgage loans. The master servicer on the
transactions is Countrywide Home Loans Servicing LP.
The seven subordinate and mezzanine classes from the transactions
have been downgraded because existing credit enhancement levels
may be low given the current projected losses on the underlying
pool. The transactions have taken losses causing gradual erosion
of overcollateralization or the non rated subordinate classes.
Moody's complete rating actions are:
Issuer: CWABS, Inc. Asset-Backed Certificates
Depositor: CWABS, Inc.
Downgrades:
-- Series 2002-BC2; Class M-1, downgraded to A1 from Aa2.
-- Series 2002-BC2; Class M-2, downgraded to Ba2 from A2;
-- Series 2002-BC2; Class B-1, downgraded to Caa3 from B1;
-- Series 2003-BC1; Class M-2, downgraded to A2 from A1;
-- Series 2003-BC1; Class B-1, downgraded to Baa3 from Baa1;
-- Series 2003-BC2; Class M-3, downgraded to Ba2 from Baa1;
-- Series 2003-BC2; Class B-1, downgraded to Ba3 from Baa2
DB KEY: Wants Court's Approval to Hire Rice Pugatch as Counsel
--------------------------------------------------------------
D.B. Key Largo LLC asks the U.S. Bankruptcy Court for the Southern
District of Florida for authority to hire Rice, Pugatch, Robinson
& Schiller PA as its counsel, nunc pro tunc to Sept. 28, 2007.
Rice Pugatch will:
a. give advice to the Debtor with respect to its powers and
duties as a debtor-in-possession and the continued
management of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's operating guidelines and
reporting requirements and with the rules of the Court;
c. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the case;
d. protect the interest of the Debtor in all matters pending
before the Court; and
e. represent the Debtor in negotiation with its creditors in
the preparation of a plan.
Prior to the bankruptcy filing, the firm received a $20,000
retainer for its representation, along with the advance payment of
a $1,039 filing fee for the case. The retainer was paid by
M.A.M.C Inc, a servicing agent acting on behalf of the various
individual lenders who collectively hold the second mortgage on
the Debtor's real property.
However, Lisa M. Schiller, Esq. at the firm had explained to Alan
Goldberg, M.A.M.C.'s chief restructuring officer, that despite its
payment of the retainer, Rice Pugatch solely and strictly
represents the Debtor. Ms. Schiller also told Mr. Goldberg that
M.A.M.C. will have to hire a separate and independent counsel
should they elect to do so. As such, Mr. Goldberg has advised Ms.
Schiller that he agrees to the foregoing.
To the best of the Debtor's knowledge, Rice Pugatch does not
represent any interest adverse to the Debtor.
The firm can be reached at:
Lisa M. Schiller, Esq., Partner
Rice, Pugatch, Robinson & Schiller, P.A.
101 Northeast 3 Avenue, Suite 1800
Fort Lauderdale, FL 33301
Tel: (954) 462-8000
http://www.rprslaw.com/
Coconut Grove, Florida-based D.B. Key Largo LLC owns and manages
real estate. The company filed for chapter 11 bankruptcy
protection on Sept. 28, 2007 (Bankr. S.D. Fl. Case No. 07-18127).
DB KEY: Wants Fisher to Assist in Sale of Key Largo Property
------------------------------------------------------------
D.B. Key Largo LLC asks the U.S. Bankruptcy Court for the Southern
District of Florida for permission to employ Fisher Auction Co.,
Inc. as its auctioneer.
Fisher will assist the Debtor in the proposed auction of the Multi
Family Development Site at Mile Marker 104 in Key Largo, Florida.
The Debtor has proposed an "all cash" sale of the property at
closing with no post contract due diligence period. The property
has a purported value of $10 million.
Fisher has proposed a $62,360 pre-sale budget for marketing and
advertising expenses. In the event the Debtor cancels the sale,
the Debtor agrees to reimburse the auctioneer reasonable expenses,
plus 10% overhead costs. Hence, the Debtor will pay Fisher a
maximum amount of $68,596 for costs and expenses.
The Debtor believes that the highest and best value for the
property will be generated via auction. Hence, the retention of
an auctioneer is in the best interest of the estate.
The firm can be reached at:
Louis B. Fisher, III
Fisher Auction Co., Inc.
619 East Atlantic Blvd.
Pompano Beach, FL 33060
Tel: (954) 942-0917 or (800) 331-6620
Fax: (954) 782-8143
http://www.fisherauction.com/
Coconut Grove, Florida-based D.B. Key Largo LLC owns and manages
real estate. The company filed for chapter 11 bankruptcy
protection on Sept. 28, 2007 (Bankr. S.D. Fl. Case No. 07-18127).
DB KEY: Submits Schedules of Assets and Liabilities
---------------------------------------------------
D.B. Key Largo LLC submitted to the U.S. Bankruptcy Court for the
Southern District of Florida its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $10,000,000
B. Personal Property 382,165
C. Property Claimed as
Exempt
D. Creditors Holding $13,220,974
Secured Claims
E. Creditors Holding 81,251
Unsecured Priority
Claims
F. Creditors Holding 788,697
Unsecured Non-priority
Claims
----------- -----------
TOTAL $10,382,165 $14,090,922
Coconut Grove, Florida-based D.B. Key Largo LLC owns and manages
real estate. The company filed for chapter 11 bankruptcy
protection on Sept. 28, 2007 (Bankr. S.D. Fl. Case No. 07-18127).
DELPHI CORP: Wins Court Approval of $106 Mil. Interiors Sale
------------------------------------------------------------
Delphi Corporation and its affiliates have obtained the U.S.
Bankruptcy Court of the Southern District of New York's approval
to sell their global Interiors and Closures businesses for
approximately $106 million to a wholly owned subsidiary of The
Renco Group, Inc., barring a higher offer at an auction,
Bloomberg News reports.
The U.S. Bankruptcy Court-approved master sale and purchase
agreement contemplates a divestiture of Delphi's Interiors and
Closures Businesses to Inteva Products LLC, for a preliminary
purchase price of $80 million, subject to certain adjustments, and
post-closing payments of approximately $26 million.
The sale protocol outlined by Delphi contemplates an auction on
Dec. 6, 2007, with bids due Nov. 26, 2007. A final sale hearing
is anticipated to be set for Jan. 8, 2008. Inteva
will receive a break-up fee of not more than $2.4 million in the
event Delphi consummates a sale transaction with another party.
The final sale of Delphi's Interiors and Closures business is
subject to the approval of the U.S. Bankruptcy Court and other
constituencies in the U.S. and abroad.
The master sale and purchase agreement involves the entire global
Interiors and Closures business line, including: book of
business, manufacturing operations, intellectual property,
personnel, supplier contracts and share of joint ventures.
Delphi's Interiors and Closures business operates manufacturing
facilities in:
-- Gadsden, Alabama
-- Cottondale, Alabama
-- North Kansas City, Missouri
-- Orion, Michigan
-- Adrian, Michigan
-- Woerth, Germany
-- Matamoros, Mexico
-- SDADS Joint Venture (Shanghai, China)
-- KDS Joint Venture (Daegu, Korea)
-- Other contracted manufacturing locations
About Delphi
Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -
- http://www.delphi.com/-- is the single 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. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan
of Reorganization and a Disclosure Statement explaining that Plan.
(Delphi Bankruptcy News, Issue No. 88; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
DISTRICT OF COLUMBIA HOUSING: S&P Holds 'BB' Rating on Bonds
------------------------------------------------------------
Standard & Poor's Ratings Services removed its 'BB' rating on
District of Columbia Housing Finance Agency's (Parkway Overlook
East and West Apartments) multifamily housing revenue bond series
2001D from CreditWatch with developing implications where it was
placed on July 27, 2007. At the same time, Standard & Poor's
affirmed its 'BB' rating on the bonds. The outlook is negative.
The series 2001D bonds are secured by a pledge of Section 236
interest reduction payments.
The IRP under the agreement may be terminated if the mortgage
related to the FHA-insured bonds is extinguished or for other
reasons as defined in the IRP agreement documents. The
termination of the IRP could cause the holders of the series 2001D
bonds to lose all or part of their investment or expected return,
and the issuer is not responsible for the IRP. As of Oct. 24,
2007, all IRP due through October have been received as requested
by the trustee. As per the trustee, US Bank, there are sufficient
funds on hand to pay the Dec. 1, 2007, debt service payment
without drawing on the debt service reserve fund. The series
2001D bonds currently have a debt service reserve fund held with
the trustee which is funded at three months' maximum annual debt
service. The final maturity on the bonds is Dec. 1, 2008.
If the IRP is discontinued there may not be sufficient funds
available to pay bondholders in full which would result in a
default on the bonds.
Standard & Poor's will continue to monitor the situation.
DUKE FUNDING: Poor Credit Quality Cues Moody's Ratings' Review
--------------------------------------------------------------
Moody's Investors Service placed these notes issued by Duke
Funding High Grade IV, Ltd. on review for possible downgrade:
-- Class Description: $22,500,000 Class B-1 Senior Secured
Floating Rate Notes Due 2050
Prior Rating: Aa1
Current Rating: Aa1 (on review for possible downgrade)
-- Class Description: $19,500,000 Class B-2 Senior Secured
Floating Rate Notes Due 2050
Prior Rating: Aa3
Current Rating: Aa3 (on review for possible downgrade)
-- Class Description: $27,000,000 Class C-1 Junior Secured
Floating Rate Deferrable Interest Notes Due 2050
Prior Rating: A1
Current Rating: A1 (on review for possible downgrade)
-- Class Description: $27,000,000 Class C-2 Junior Secured
Floating Rate Deferrable Interest Notes Due 2050
Prior Rating: A3
Current Rating: A3 (on review for possible downgrade)
-- Class Description: $12,000,000 Class D Mezzanine Secured
Floating Rate Deferrable Interest Notes Due 2050
Prior Rating: Baa2
Current Rating: Ba2 (on review for possible downgrade)
-- Class Description: $18,000,000 Subordinated Notes Due
2050
Prior Rating: Ba2
Current Rating: Ba2 (on review for possible downgrade)
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
obligations, which consists primarily of RMBS assets.
ELEC COMMS: Aug. 31 Balance Sheet Upside-Down by $5.3 Million
-------------------------------------------------------------
eLEC Communications Corp.'s consolidated balance sheet at Aug. 31,
2007, showed $1.6 million in total assets and $6.9 million in
total liabilities, resulting in a $5.3 million total shareholders'
deficit.
The company's consolidated balance sheet at Aug. 31, 2007, also
showed strained liquidity with $170,325 in total current assets
available to pay $3.7 million in total current liabilities.
The company reported net income of $971,300 on revenues of
$268,490 for the third quarter ended Aug. 31, 2007, compared with
a net loss of $437,513 on revenues of $44,289 for the same period
ended Aug. 31, 2006.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2007, are available for
free at http://researcharchives.com/t/s?247e
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.
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.
EMPIRE BEEF: Court Approves JC Jones as Financial Advisors
----------------------------------------------------------
Empire Beef Co. Inc. obtained authority from the U.S. Bankruptcy
Court for the Western District of New York to employ JC Jones &
Associates LLC as its financial advisors and turnaround managers.
As reported in the Troubled Company Reporter on Oct. 10, 2007, the
JC Jones is expected to:
(a) develop and implement cash management processes and
strategies including coordination with DIP provider
and supply vendors;
(b) prepare financial information for court, creditors,
and parties-of-interest including required filings and
requested information;
(c) assist the Debtor, Debtor's professionals and other
parties-of-interest in preparation of any documents to
be filed with the Court or executed in connection
with the Debtor's bankruptcy case;
(d) provide communications to parties of interest on an
needed basis, including attending meetings of official
committees appointed in the bankruptcy case;
(e) identify and help implement short-term liquidity
generating initiatives;
(f) testify at hearings in connection with the case;
(g) develop and provide supporting analyses, to revised
business plans reacting to changes in circumstances in
the market, competition, and product supply;
(h) prepare information and analyses necessary for
confirmation of the Plan and disclosure statement;
(i) provide support or operational efficiency in marketing
and sales, order fulfillment, supply chain
procurement, logistics and inventory control; and
(j) provide general business advice and consulting to
management and the Debtor's professionals as requested
and consistent with the above outlined services.
Ronald S. Castor, Esq., a partner in the JC Jones, told the Court
of the professionals' hourly rates are:
Designation Hourly Rate
----------- -----------
Managing Partner $275 - $400
Professional Consultants $225 - $350
Support Personnel $100 - $150
Mr. Castor said that these individuals are specifically
assigned to work on this engagement and their hourly rates are:
Professional Designation Hourly Rate
------------ ---------------- -----------
Jeffrey Jones Managing Partner $275
Ronald Castor Consultant-Lead $245
John Bellardini Consultant $225
Michelle Burnett Consultant $225
Mr. Castor assured the Court that the firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Rochester, New York, Empire Beef Co. --
http://www.empirebeef.com/-- ships six million pounds of beef,
pork, lamb, veal, seafood, poultry, cheese, processed meats, and
multiple food products per week to more than twenty states, the
Caribbean, and other international destinations. The meat are
purchased from packers like Hormel, JBS Swift, and Perdue Farms,
Empire Beef & Redistribution distributes packers' beef, cheese,
lamb, pork, poultry, seafood, and veal in a 20 state area of the
northeastern US. The firm also offers portion-controlled
marinated and flavor-enhanced fresh and frozen meat products for
foodservice companies as well as for retail sale. Empire has
portion-control facilities in New York and Pennsylvania.
The company filed for Chapter 11 protection on Sept. 6, 2007,
(Bankr. W.D.N.Y. Case No. 07-22226). Garry M. Graber, Esq., at
Hodgson Russ LLP represent the Debtor. Peter Scribner, Esq. is
counsel to the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
assets between $1 million to $100 million.
EMPIRE BEEF: Court Okays Triton Capital as Investment Banker
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
gave Empire Beef Co. Inc., dba Empire Beef & Redistribution
Company, authority to employ Triton Capital Partners Ltd. as
its financial consultants and investment banker.
As reported in the Troubled Company Reporter on Oct. 9, 2007,
Triton Capital will provide employees to serve as financial
advisors and investment banker for the Debtor with the emphasis on
assisting the Debtor with the sale of substantially all of its
assets. These employees will also:
(a) work with the Debtor's lenders to ensure adequate
funding for the Debtor's bankruptcy process;
(b) assist the Debtor's operations with the objective of
stabilizing operations and preserving value; and
(c) assist in the management of the Debtor's bankruptcy
efforts, including working with parties-in-interest.
Triton Capital's professional hourly rates are:
Designation Hourly Rate
----------- -----------
Partners $350 - $500
Directors/Vice Presidents $250 - $450
Associates/Analysts $150 - $300
The Debtor will also pay a non-refundable retainer of $40,000 per
month for a minimum term of two months. The retainer will be paid
in cash monthly in advance with the first retainer payment made
upon the execution of agreement.
If the Debtor completed a capital placement with any party during
the term of agreement or with a covered party within 12 months
after the termination of agreement, the Debtors will also pay an
aggregate fee equal to:
(a) 1% of the cumulative amount of consideration up to
$30 million; plus
(b) 3% of the cumulative amount of consideration above
$30 million.
The Debtor has also agreed to pay a sale transaction fee in the
amount equal to one and one half times the standard Lehman Scale
with a minimum of $500,000, and break-up fee, in case of
termination of agreement prior to consummation in the amount of
$200,000. However, if the Debtor subsequently completes such
transactions, the break-up fee will be creditable againts any
transaction fee due at that time.
David J. Asmann, Esq., a partner in the Triton Capital Partners
Ltd., assures the Court that the firm holds no interest adverse to
the Debtor or its estate and is "disinterested" as defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Rochester, New York, Empire Beef Co. --
http://www.empirebeef.com/-- ships six million pounds of beef,
pork, lamb, veal, seafood, poultry, cheese, processed meats, and
multiple food products per week to more than twenty states, the
Caribbean, and other international destinations. The meat are
purchased from packers like Hormel, JBS Swift, and Perdue Farms,
Empire Beef & Redistribution distributes packers' beef, cheese,
lamb, pork, poultry, seafood, and veal in a 20 state area of the
northeastern US. The firm also offers portion-controlled
marinated and flavor-enhanced fresh and frozen meat products for
foodservice companies as well as for retail sale. Empire has
portion-control facilities in New York and Pennsylvania.
The company filed for Chapter 11 protection on Sept. 6, 2007,
(Bankr. W.D.N.Y. Case No. 07-22226). Garry M. Graber, Esq., at
Hodgson Russ LLP represent the Debtor. Peter Scribner, Esq. is
counsel to the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
assets between $1 million to $100 million.
ENERGY FUTURE: Reports Prelim. Results for Period Ended Sept. 30
----------------------------------------------------------------
Energy Future Holdings Corp. reported preliminary unaudited
consolidated financial results for the nine months ended Sept. 30,
2007.
Property, plant and equipment, net as of Sept. 30, 2007, is
expected to increase by approximately $1.5 billion, or
approximately 8%, to approximately $20.2 billion compared to
$18.8 billion at Dec. 31, 2006. This increase reflects
development and construction costs associated with new lignite
coal-fueled generation facilities, net of the impairment of
balances related to eight units suspended in February 2007, and
ongoing investment spending in existing generation operations and
the transmission/distribution system, partially offset by
depreciation expense for the period.
Operating revenues are expected to decrease by between
approximately $1.3 to $1.5 billion, or 15% to 18%, to between
approximately $7.0 and $7.2 billion compared to $8.5 billion in
the same period in 2006. This decline primarily reflects, in
approximately equal measures, lower retail electricity revenues
and net losses in 2007 from risk management and trading activities
(compared to net gains in 2006 from these activities). The lower
retail revenues reflect volume declines due to customer churn,
particularly in the first half of the year, and lower average
consumption per customer due in part to cooler, below normal
weather this past summer. The revenue decline also reflects lower
average pricing, including the effects of residential price
discounts implemented in 2007. The results from risk management
and trading activities are driven by unrealized mark-to-market net
losses associated with positions entered into as part of the long-
term hedging program due to higher forward natural gas prices.
Net income is expected to decrease by between approximately
$1.4 to 1.5 billion, or 67% to 72%, to between approximately
$600 to $700 million compared to $2.1 billion in the same period
in 2006. This decrease is driven by the factors affecting
operating revenues discussed immediately above as well as charges
arising from the suspension of development of eight coal-fueled
generation units in February 2007. Other contributing factors to
the net income performance include the effects of a planned
nuclear generation unit outage in early 2007 and higher lignite
mining costs resulting from weather-related inefficiencies,
increased selling, general and administrative costs in the retail
and generation facility development and construction operations
and the costs associated with Oncor Electric Delivery's 2006
cities rate settlement.
Adjusted EBITDA including Oncor Electric Delivery's EBITDA is
expected to decrease by between approximately $600 million to
$800 million, or 14% to 18%, to between approximately $3.6 to
$3.8 billion compared to $4.4 billion in the same period in 2006.
Adjusted EBITDA excluding Oncor Electric Delivery is expected to
decrease by between $600 million to $800 million, or 17% to 22%,
to between approximately $2.8 billion and $3.0 billion compared to
$3.6 billion in the same period in 2006. This decrease is driven
by the lower average retail pricing and the decline in retail
sales volumes referred to in the discussion of operating revenues
above and also reflects the other contributing factors cited in
the discussion of net income above.
About Energy Future Holdings
Headquartered in Dallas, Texas, Energy Future Holdings Corp. fka
TXU Corp. (NYSE: TXU) -- http://www.txucorp.com/-- is an energy
holding company that manages a portfolio of competitive and
regulated energy subsidiaries, primarily in Texas , including TXU
Energy, Luminant, and Oncor. TXU Energy provides electricity and
related services to 2.1 million electricity customers in Texas.
Luminant has over 18,300 MW of generation in Texas , including
2,300 MW of nuclear and 5,800 MW of coal-fueled generation
capacity. Oncor operates a distribution and transmission system
in Texas , providing power to three million electric delivery
points over more than 101,000 miles of distribution and 14,000
miles of transmission lines.
Texas Competitive Electric Holdings Company LLC is the holding
company for TXU Corp.'s competitive businesses, Luminant and TXU
Energy, and was formerly known as TXU Energy Company LLC.
* * *
As reported in the Troubled Company Reporter on Oct. 24, 2007,
Fitch Ratings has published a credit analysis on Energy Future
Holdings Corp., formerly TXU Corp. Fitch downgraded the long-term
Issuer Default Rating of TXU Corp. to 'B' from 'BB+' and took
various rating actions on its subsidiaries on Oct. 7, 2007. The
Rating Outlook of EFH and its indirect subsidiaries is Stable.
EPICOR SOFTWARE: Earns $8.1 Million in 3rd Quarter Ended Sept. 30
-----------------------------------------------------------------
Epicor Software Corporation reported Tuesday preliminary financial
results for its third quarter ended Sept. 30, 2007.
2007 third quarter GAAP net income increased 49% to $8.1 million,
compared to $5.4 million in the 2006 third quarter. The 2007
third quarter tax rate was 36.4%. The company's actual cash tax
rate for the 2007 third quarter was approximately 10%.
Total 2007 third quarter revenues were $103.1 million, an increase
of approximately 8% when compared to total revenues of
$95.7 million in the 2006 third quarter.
2007 third quarter non-GAAP net income increased approximately 19%
to $12.7 million, compared to non-GAAP net income of $10.7 million
in the 2006 third quarter. In addition to excluding amortization
and stock-based compensation expense, non-GAAP earnings for the
2007 third quarter also excludes restructuring charges resulting
from the company's reduction in operating costs as announced in
July 2007, all net of tax.
Epicor chairman and chief executive officer George Klaus
commented, "We had a solid overall quarter, with GAAP and non-GAAP
EPS landing within the ranges of our previously provided guidance
and our consulting and maintenance organizations continuing to
post record quarterly revenues. Additionally, we continued to
drive strong cash flow from operations of more than $20 million in
the third quarter, which brings our total cash flow from
operations for the first nine months of 2007 to more than
$40 million. We also began to deliver on our adjusted EBITDA
improvement expectations, with third quarter adjusted EBITDA of
17.6% increasing 330 basis points over first half 2007 adjusted
EBITDA of 14.3%. These positive results were somewhat offset by
software revenues that did not meet our previously provided
expectations for year-over-year growth, as well as additional
volatility in our low margin hardware business.
"Having grown software revenues organically by approximately 20%
in last year's third quarter, we knew we were faced with a very
difficult year-over-year comparison," Klaus said. "The continuing
strong growth in our worldwide pipelines firmly supported our
expectations for 2007 third quarter software revenue growth of 10%
to 13%, as provided in July, however, we did not close the deals
forecasted to reach this goal and software license revenue grew
year-over-year by approximately 1%."
At Sept. 30, 2007, the company's consolidated balance sheet showed
$604.8 million in total assets, $367.4 million in total
liabilities, and $237.4 million in total shareholders' equity.
Liquidity and Long-term Debt
The company's balance sheet at Sept. 30, 2007, included cash and
cash equivalents and short-term investments of $217.0 million,
which benefited from strong cash flow from operations of more than
$20 million during the quarter. The company's total long-term
debt balance as of Sept. 30, 2007 was $230.4 million, consisting
primarily of the $230 million obligation to holders of the
company's convertible bonds.
2007 Fourth Quarter and Full-Year Guidance
Based on resetting its expectations on the timing of larger orders
closing, the company is providing the following financial guidance
for its 2007 fourth quarter: Specifically, total revenue for the
2007 fourth quarter is expected to be in the range of $110 to
$112 million. Software license revenue for the 2007 fourth
quarter is expected to be in the range of $30 to $31 million.
Hardware revenue for the 2007 fourth quarter is expected to be
approximately $5 million. The company expects its 2007 fourth
quarter GAAP net income to be in the range of $10 to $11 million.
The company's current 2007 fourth quarter revenue expectations
equate to expectations for 2007 full-year revenue of $420 to
$422 million, an increase of 9% to 10% over 2006 full-year
revenues of $384.1 million.
Full-Year 2008 Guidance
Total revenues for the 2008 year are expected to be $458 to
$468 million, an increase of 9% to 11% over total expected 2007
full-year revenues. Full-year 2008 GAAP net income is expected to
increase approximately 36% to 39% over expected full-year 2007
GAAP net income. Software license revenue for the 2008 full-year
is expected to increase 8% to 10% over expected 2007 full-year
software license revenue.
About Epicor Software Corporation
Headquartered in Irvine, California, Epicor Software Corporation
(Nasdaq: EPIC) -- http://www.epicor.com/-- provides integrated
enterprise resource planning, customer relationship management,
supply chain management and professional services automation
software solutions to the midmarket and divisions of the Global
1000 companies. Founded in 1984, Epicor serves over 20,000
customers in more than 140 countries, providing solutions in over
30 languages. Epicor offers a comprehensive range of services
with its solutions, providing a single point of accountability to
promote rapid return on investment and low total cost of
ownership.
* * *
Epicor Software continues to carry Standard & Poor's Rating
Services' 'BB-' corporate credit rating.
EQUITY ONE: S&P Junks Rating on Class B-2 Certificates
------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes of mortgage-backed securities issued by Equity One
Mortgage Pass-Through Trust 2002-3 and removed them from
CreditWatch with negative implications. S&P lowered the rating on
class B-1 to 'BB' from 'BBB+' and the rating on class B-2 to 'CCC'
from 'BB'. Furthermore, S&P affirmed the ratings on the remaining
classes from this transaction.
The downgrades reflect realized losses that have exceeded monthly
excess interest cash flow, thereby reducing overcollateralization.
For the prior six months, average realized losses have outpaced
average excess interest by 1.7x ($115,770 vs. $67,160). As a
result, O/C has dropped to $559,660 (compared with a target of
$1,485,204). S&P loss projections indicate that the current
performance trends may further compromise credit support for these
classes. Furthermore, these transactions have sizable loan
amounts that are severely delinquent (90-plus days, foreclosures,
and REOs), which suggests that the unfavorable performance trends
are likely to continue. Severe delinquencies ($3,202,000) were
5.7x the O/C ($559,660) for the transaction. As of the September
2007 remittance report, cumulative realized losses of
$7,773,895 were 2.75% of the original pool principal balance.
S&P removed the ratings on classes B-1 and B-2 from CreditWatch
negative because S&P lowered them 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.
Credit support for this transaction is provided through a
combination of subordination, excess interest, and O/C.
The underlying collateral for this transaction is mostly fixed-
and adjustable-rate, 30-year mortgages on one- to four-family
homes. The loans were originated or purchased by Equity One Inc.
or its affiliates according to guidelines that target borrowers
with less-than-perfect credit histories. The guidelines are
intended to assess both the borrower's ability to repay the loan
and the adequacy of the value securing the mortgaged property.
Ratings Lowered and Removed from Creditwatch Negative
Equity One Mortgage Pass-Through Trust 2002-3
Rating
------
Series Class To From
------ ----- -- ----
2002-3 B-1 BB BBB+/Watch Neg
2002-3 B-2 CCC BB/Watch Neg
Ratings Affirmed
Equity One Mortgage Pass-Through Trust 2002-3
Series Class Rating
------ ----- ------
2002-3 AF-4, AV-1 AAA
2002-3 M-1 AA
2002-3 M-2 A
EUROPEAN AMERICAN: Can Hire Scroggins & Williamson as Counsel
-------------------------------------------------------------
European American Realty Ltd. obtained permission from the U.S.
Bankruptcy Court for the Northern District of Georgia to employ
Scroggins & Williamson as its counsel.
Scroggins will:
a. prepare pleadings and applications;
b. conduct examinations;
c. advise the Debtor of its rights, duties and obligations as a
debtor-in-possession;
d. consult with the Debtor and represent the Debtor with
respect to a chapter 11 plan;
e. perform those legal services incidental and necessary to the
day-to-day operation of the Debtor's business, including
institution and prosecution of necessary legal proceeding,
and general business and corporate legal advice and
assistance; and
f. take any and all other action incidental to the proper
preservation and administration of the Debtor's estate and
business.
The Debtor will pay the firm at its present rates:
Designation Hourly Rate
----------- -----------
Attorney $235 - $335
Legal Assistant $75
The firm has received $6,039 retainer from Houston Casualty
Company, $1,039 of which was in reimbursement for the Debtor's
bankruptcy filing fee and $5,000 of which is to serve as the
firm's general retainer. The Debtor will continue to pay fees
incurred by the firm which are not compensated by Houston.
Houston agreed to pay the Debtor's bankruptcy fees in connection
with the retention of Scroggins with respect to claims made under
a Professional Liability Errors and Omissions Insurance, policy
no. H704-15569.
To the best of the Debtor's knowledge, Scroggins represents no
interest adverse to the Debtor.
The firm can be reached at:
J. Robert Williamson, Esq.
Scroggins & Williamson
Suite 1500, The Candler Building
127 Peachtree Street, Northeast
Atlanta, GA 30303
Tel: (404) 893-3880
Fax: (404) 893-3886
Atlanta, Georgia-based European American Realty Ltd. is engaged in
the real estate business. The Debtor filed for chapter 11
bankruptcy protection on Sept. 21, 2007 (Bankr. N.D. Ga. Case No.
07-75353). J. Robert Williamson, Esq. at Scroggins and Williamson
represents the Debtor in its restructuring efforts. When the
Debtor filed for bankruptcy, it listed assets and debts between $1
million and $100 million.
EUROPEAN AMERICAN: Wants More Time to File Schedules & Statement
----------------------------------------------------------------
European American Realty Ltd. asks the U.S. Bankruptcy Court for
the Northern District of Georgia for further extension of one week
before the rescheduled Section 341 meeting of creditors or the
earlier of Nov. 9, 2007, to file its remaining schedules of assets
and liabilities.
The Debtor relates that the further extension is appropriate under
Rule 1007(c) since no committee or trustee has yet been appointed
in the case.
In addition, the Debtor says it is in dispute with the accountants
responsible for the preparation of its tax returns, as well as the
provider of its accounting software, and has been unable to access
much of the needed accounting information. Consequently, the
Debtor requires further time in which to complete these schedules.
Moreover, the Debtor assumes that the U. S. Trustee's Office is
going to reset to a future date the meeting of the Debtor's
creditors under Section 341 currently scheduled for Oct. 25,
2007.
The Court had initially extended the deadline to October 19 for
the Debtor to file its schedules, statements and lists.
Atlanta, Georgia-based European American Realty Ltd. is engaged in
the real estate business. The Debtor filed for chapter 11
bankruptcy protection on Sept. 21, 2007 (Bankr. N.D. Ga. Case No.
07-75353). J. Robert Williamson, Esq. at Scroggins and Williamson
represents the Debtor in its restructuring efforts. When the
Debtor filed for bankruptcy, it listed assets and debts between
$1 million and $100 million.
FAIRPOINT COMM: Agrees with VEC to Solve Verizon Merger Issues
--------------------------------------------------------------
FairPoint Communications Inc. has reached an agreement with
Vermont Electric Cooperative Inc., regarding FairPoint's proposed
acquisition of Verizon's wireline operations in Vermont, New
Hampshire and Maine.
In a Memorandum of Understanding, the two companies agreed they
have negotiated in good faith to resolve VEC's issues and concerns
regarding the FairPoint-Verizon transaction. VEC and FairPoint
filed the MOU with the Vermont public service board.
"This agreement addresses a number of concerns that VEC had
regarding the many joint arrangements we have with the telephone
company," David Hallquist, CEO of VEC, said. "We feel confident
that FairPoint and VEC will have a good working relationship going
forward."
"We are very pleased we are able to come to an understanding with
VEC and we're looking forward to working with the company in
Vermont once the acquisition is complete," Gene Johnson,
FairPoint's chairman and CEO. said. "Our goal is to provide the
best technology and the best service to our customers throughout
northern New England. VEC shares this goal, and we look forward
to working with them for the benefit of the people of Vermont."
About Vermont Electric Cooperative Inc.
Vermont Electric Cooperative Inc. is Vermont's electric utility,
serving approximately 34,000 members in some of the state's most
rural areas.
About FairPoint Communications Inc.
Based in Charlotte, North Carolina, FairPoint Communications Inc.
(NYSE: FRP) -- http://www.fairpoint.com/-- offers an array of
services to residential and business customers including: local
voice, long distance and data products. The company operates in
18 states with 311,150 access line equivalents, including voice
access lines and high speed data lines, which include digital
subscriber lines (wireless broadband and cable modem in service as
of Dec. 31, 2006).
* * *
Moody's Investor Services assigned B1 on FairPoint Communications
Inc.'s probability of default and long term corporate family
ratings on January 2005. The outlook is stable. The ratings hold
to date.
FAIRPOINT COMMS: Inks Joint Settlement Pact with NH Local Carriers
------------------------------------------------------------------
FairPoint Communications Inc. has entered into a Joint Settlement
Stipulation with BayRing Communications LLC, segTEL, Inc., and
Otel Telekom Inc., three New Hampshire competitive local exchange
carriers.
FairPoint and the CLECs filed the Joint Settlement Stipulation
with the New Hampshire Public Utilities Commission on Oct. 18,
2007.
FairPoint also has reached agreement with Sovernet Communications
and segTEL in Vermont. FairPoint has agreed to provide BayRing,
segTEL, Otel, and Sovernet -- together, called the CLEC Coalition
-- with the same services that they currently receive from
Verizon.
Meanwhile, the CLEC Coalition has agreed to support approval of
the proposed acquisition by FairPoint of Verizon's wireline
operations, which is taking place in Maine, New Hampshire and
Vermont, subject to the terms of the agreement.
Under the terms of the settlement agreements, FairPoint will adopt
or assume the inter-carrier agreements each of the carriers in the
CLEC Coalition currently has with Verizon; adopt or concur in
Verizon access and wholesale tariffs; and assume the same
agreements relating to conduit use and utility pole attachments
that Verizon currently has with each of the
CLEC Coalition carriers.
As a result, the CLEC Coalition agreed to support FairPoint's
application to the New Hampshire Public Utilities Commission
and the Vermont Public Service Board regarding the proposed
transaction.
"The CLEC Coalition is yet another group of companies that have
expressed support for the acquisition," Gene Johnson, chairman and
CEO of FairPoint, said. "We welcome the support and we look
forward to a long and successful relationship with them."
In January, FairPoint submitted its applications for approval of
the acquisition of Verizon's wireline operations in Maine, New
Hampshire and Vermont. The applications are being reviewed by the
Public Utilities Commissions of Maine and New Hampshire, and the
Public Service Board of Vermont, well as by the Federal
Communications Commission.
About FairPoint Communications Inc.
Based in Charlotte, North Carolina, FairPoint Communications Inc.
(NYSE: FRP) -- http://www.fairpoint.com/-- offers an array of
services to residential and business customers including: local
voice, long distance and data products. FairPoint owns and
operates 30 local exchange companies located in 18 states offering
an array of services, including local and long distance voice,
data, Internet and broadband offerings.
* * *
Moody's Investor Services assigned B1 on FairPoint Communications
Inc.'s probability of default and long term corporate family
ratings on January 2005. The outlook is stable. The ratings hold
to date.
FORAOIS FUNDING: S&P Junks Rating on $92.4 Million Certificates
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the
$92.4 million variable leveraged super senior certificates due
Aug. 13, 2038, issued by Foraois Funding Ltd. The rating remains
on CreditWatch, where it was placed with negative implications on
Aug. 30, 2007.
The downgrade reflects the continued decline in the market value
of the collateral pool, as reported in the Oct. 22, 2007,
valuation report.
Foraois Funding Ltd. is a leveraged super senior transaction that
provides a leveraged position on a CDO of ABS. The transaction
contains market value coverage tests. If these tests are
triggered, the investor has the option to either delever the
transaction, thereby increasing the certificate balance through a
cash injection, or unwind the transaction.
Rating Lowered and Remaining on Creditwatch Negative
Foraois Funding Ltd.
Class: Alder Series Certs
Original Balance: $92,400,000
Current Balance: $92,400,000
Original Rating: BBB-/Watch Neg
Current Rating: CCC/Watch Neg
FORD CREDIT: Moody's Rates $61 Million Class D Notes at Ba2
-----------------------------------------------------------
Moody's Investors Service assigned ratings of Prime-1 to the Class
A-1 notes, Aaa to each of the Class A-2a through A-4b notes, A1 to
the Class B notes, Baa1 to the Class C notes, and Ba2 to the Class
D notes issued by Ford Credit Auto Owner Trust 2007-B.
The complete rating action is:
Ford Credit Auto Owner Trust 2007-B
-- $771,000,000 5.29180% Class A-1 asset-backed notes, rated
Prime-1
-- $200,000,000 5.26% Class A-2a asset-backed notes, rated
Aaa
-- $863,700,000 1 Month Libor+0.33% Class A-2b asset-backed
notes, rated Aaa.
-- $410,500,000 5.15% Class A-3a asset-backed notes, rated
Aaa
-- $400,000,000 1 Month Libor+0.34% Class A-3b asset-backed
notes, rated Aaa
-- $173,100,000 5.24% Class A-4a asset-backed notes, rated
Aaa
-- $80,000,000 1 Month Libor+0.38% Class A-4b asset-backed
notes, rated Aaa
-- $91,600,000 5.69% Class B asset-backed notes, rated A1
-- $61,000,000 6.33% Class C asset-backed notes, rated Baa1
-- $61,000,000 7.79% Class D asset-backed notes, rated Ba2
Moody's said the ratings are based on the quality of the
underlying auto loans and their expected performance, the strength
of the structure, the availability of excess spread over the life
of the transaction, the reserve account of 0.50% of initial pool
balance (which is fully funded at closing and benefits all classes
of securities), and the experience of Ford Motor Credit Company as
servicer.
FOXTONS NORTH: Court Approves Forman Holt as Bankruptcy Counsel
---------------------------------------------------------------
Foxtons North America Inc. and Foxtons Inc. obtained permission
from the U.S. Bankruptcy Court for the District of New Jersey to
employ Forman Holt Eliades & Ravin LLC as its counsel.
Forman Holt will:
(a) advise the Debtor with respect to its powers and duties
in the continued management and operation of its business
and properties as debtor-in-possession, including the
rights and remedies of the Debtor with respect to its
assets and with respect to the claims of creditors;
(b) advise the Debtor with respect to preparing and obtaining
approval of its Disclosure Statement and Plan;
(c) prepare on behalf of the Debtor, as debtor-in-possession,
necessary applications, motions, complaints, answers,
orders, reports and other pleadings and documents;
(d) appear before this Court and other officials and tribunals,
if necessary, and protect the interests of the Debtor in
federal, state and foreign jurisdictions and administrative
proceedings;
(e) negotiate and prepare documents relating to the
disposition of assets, as requested by the Debtor;
(f) advise the Debtor concerning the day-to-day operations of
its business and the administration of its estate as
debtor-in-possession; and
(g) perform other legal services for the Debtor, as debtor-in-
possession, as may be necessary and appropriate.
The Debtor has agreed to pay Forman Holt a $50,000 aggregate
retainer in connection with its representation of the Debtor in
its chapter 11 proceeding.
To the best of the Debtor's knowledge, Forman Holt does not hold
or represent any interest adverse to the Debtor as debtor-in-
possession or to its estate.
The firm can be reached at:
Daniel M. Eliades, Esq.
Harry M. Gutfleish, Esq.
Michael E. Holt, Esq.
Forman Holt Eliades & Ravin LLC
218 Route 17 North
Rochelle Park, NJ 07662
Tel: (201) 845-1000
http://www.formanlaw.com/
West Long Branch, New Jersey-based Foxtons North America Inc., --
http://www.foxtons.com/-- aka YourHomeDirect.com, and its
affiliate, Foxtons Inc., are real estate agents. Foxtons Inc. is
also known as Foxtons Realty Inc., YHD Foxtons, and YHD-Foxtons
Inc.
Foxtons North and Foxtons Inc. filed for chapter 11 bankruptcy
protection on Oct. 5, 2005 (Bankr. D. N.J. Case Nos. 07-24497 and
07-24496). Garden City Group Inc. serves as claims and noticing
agent to the Debtors. In documents submitted to the Court,
Foxtons North America disclosed total assets of $487,757 and total
liabilities of $40,885,834. Foxtons Inc. disclosed total assets
of $2,618,254 and total liabilities of $480,945.
FREEPORT-MCMORAN: Earns $763MM in Third Quarter Ended Sept. 30
--------------------------------------------------------------
Freeport-McMoRan Copper & Gold Inc. reported third quarter 2007
income from continuing operations applicable to common stock of
$763 million compared with $351 million for the third quarter of
2006.
For the nine months ended Sept. 30, 2007, FCX reported income from
continuing operations applicable to common stock of
$2.3 billion compared with $970 million in the 2006 period
FCX's nine-month 2007 financial and operating results include its
wholly owned subsidiary Phelps Dodge's results following its
acquisition by FCX on March 19, 2007.
Third Quarter Highlights
FCX's consolidated sales from its mines totaled 949 million pounds
of copper, 269 thousand ounces of gold and 16 million pounds of
molybdenum for third-quarter 2007, and 2.5 billion pounds of
copper, 2.1 million ounces of gold and 33 million pounds of
molybdenum for the first nine months of 2007.
Full-year 2007 pro forma projected consolidated sales from FCX's
mines, including pre-acquisition Phelps Dodge sales, about 3.9
billion pounds of copper, 2.3 million ounces of gold and 68
million pounds of molybdenum, including 875 million pounds of
copper, 100 thousand ounces of gold and 18 million pounds of
molybdenum for fourth-quarter 2007.
FCX's operating cash flows totaled $2.2 billion for third quarter
2007 and $4.9 billion for the first nine months of 2007, including
Phelps Dodge's amounts beginning March 20, 2007.
FCX capital expenditures approximated $466 million for third-
quarter 2007 and $1.1 billion for the first nine months of 2007.
Capital expenditures are expected to approximate $1.9 billion for
2007.
Total debt approximated $8.7 billion and consolidated cash was
$2.4 billion at Sept. 30, 2007, compared with total debt of $9.8
billion and consolidated cash of $2.1 billion at June 30, 2007.
In September 2007, FCX entered into an agreement to sell its
international wire and cable business, Phelps Dodge International
Corporation, for $735 million. FCX expects to use the estimated
net proceeds approximating $620 million to repay debt.
As of Sept. 30, 2007, the company reported total assets of
$41.4 billion, total liabilities of $23.4 billion, and total
stockholders' equity of $18 billion.
Full-text copies of the company's financials are available for
free at http://ResearchArchives.com/t/s?2483.
Outlook
FCX expects to generate cash flows during 2007 significantly
greater than its capital expenditures, minority interests
distributions, dividends and other cash requirements. Assuming
average prices of $3.50 per pound of copper, $750 per ounce of
gold and $30 per pound of molybdenum in the balance of the year,
and assuming excess cash is applied to reduce debt, total debt at
year-end 2007 would approximate $7.3 billion and consolidated cash
would approximate $1.5 billion. Based on these assumptions, FCX's
term debt (which had a $1.55 billion balance at September 30,
2007) would be substantially repaid by year-end 2007.
About Freeport-McMoran
Headquartered in Phoenix, Arizona, Freeport-McMoRan Copper & Gold
Inc. (NYSE: FCX) -- http://www.fcx.com/-- is an international
mining company that operates large, long-lived, diverse assets
with significant proven and probable reserves of copper, gold and
molybdenum. FCX has a portfolio of operating, expansion and
growth projects in the copper industry and is the producer of
molybdenum.
* * *
As reported in the Troubled Company Reporter on Sept. 28, 2007,
Moody's Investors Service affirmed Freeport-McMoRan Copper & Gold
Inc.'s 'Ba2' corporate family rating, 'Ba2' probability of default
rating, and 'Ba3, LGD5, 80%' $6 billion senior unsecured notes.
Moody's revised the company's outlook to positive.
FREESCALE SEMICON: Weak Results Cue Moody's to Review Ratings
-------------------------------------------------------------
Moody's Investors Service placed the ratings of Freescale
Semiconductor Inc. under review for possible downgrade.
Moody's noted that the review was prompted by Freescale's recent
third quarter results, which continue to demonstrate weakness in
the company's wireless segment (roughly 32% of total revenues).
Wireless revenues were down 13.3% compared to the 2006 third
quarter although up 33% sequentially from the recent low point in
the 2007 second quarter. Operating performance weakness stems
principally from reduced wireless semiconductor shipments as a
result of lower cellular demand at its former parent and largest
customer, Motorola, which accounts for about 20 - 25% of
Freescale's revenues.
The review also considers the noticeable softening in Freescale's
networking segment (about 22% of revenues) which witnessed a 15%
revenue drop compared to the same period last year. Although
capital spending in Asian markets remains robust, North American
wireline and wireless infrastructure spending has remained subdued
as the large communications equipment providers have delayed
purchases amid network consolidation and slowing broadband
subscriber growth. Finally, the review expresses concerns about a
continuation of Freescale's weakened credit profile and reduced
utilization levels should the company's addressable semiconductor
markets experience a protracted period of softening demand.
With Motorola's continued woes, Moody's believes Freescale will be
challenged to expand its wireless customer base in a timely manner
to alleviate reduced wireless semiconductor volumes given the long
product development cycle required before design win activity
transitions to the production phase. Additionally, the ongoing
softness in the Networking and Computing Systems segment is a
credit negative as it does not afford the company a strong ability
to offset performance deterioration in the Wireless and Mobile
Solutions segment, especially since Transportation and Standard
Products segment growth has been flat to slightly down year over
year. The review will focus on the negative impact on Freescale's
profitability, cash flow generation and financial leverage as well
as steps the company is taking to improve revenue growth in key
market segments, alleviate operating performance weakness and
enhance liquidity.
When the Ba3 corporate family rating was assigned in November
2006, Moody's noted that it was predicated on the expectation that
Freescale would reduce leverage over the near-to-intermediate term
via rising EBITDA and strong levels of free cash flow generation.
Due to lower than expected operating cash flow, as of September
2007, the company's total debt to EBITDA metric has migrated above
6x (Moody's adjusted), which is more indicative of single-B rated
peers. Although EBITDA levels have modestly improved on a
sequential basis since the first quarter shortfall, Moody's does
not expect operating cash flow to materially recover in the fourth
quarter or free cash flow generation to meaningfully effect
financial leverage reduction to previously expected levels.
These ratings/assessments were placed under review for possible
downgrade:
-- Corporate Family Rating (New) -- Ba3
-- Probability of Default Rating -- Ba3
-- $ 750 Million Senior Secured Revolving Credit Facility
due 2012 -- Baa3 (LGD-2, 16%)
-- $3.50 Billion Senior Secured Term Loan B Facility due
2013 -- Baa3 (LGD-2, 16%)
-- $2.85 Billion Senior Unsecured Notes due 2014 -- B1 (LGD-
4, 63%)
-- $1.50 Billion Senior Unsecured Toggle Notes due 2014 --
B1 (LGD-4, 63%)
-- $1.60 Billion Senior Subordinated Unsecured Notes due
2016 -- B2 (LGD-6, 91%)
The Speculative Grade Liquidity Rating is SGL-1. The liquidity
rating will be reviewed upon conclusion of the review for possible
downgrade.
Headquartered in Austin, Texas, Freescale Semiconductor Inc.
designs and manufactures embedded semiconductors for the
transportation, networking and wireless markets. The company was
separated from Motorola via IPO in July 2004 and taken private in
a leveraged buyout in December 2006. Revenues for the twelve
months ended Sept. 30, 2007 were $5.8 billion.
GENERAL ELECTRIC: Fitch Holds Low-B Ratings on Four Certs.
----------------------------------------------------------
Fitch Ratings affirms General Electric Capital Assurance Company
Inc.'s commercial mortgage pass-through certificates, series 2003-
1 as:
-- $66.5 million class A-3 at 'AAA';
-- $270 million class A-4 at 'AAA';
-- $112.7 million class A-5 at 'AAA';
-- Interest-only class X at 'AAA';
-- $11.3 million class B certificates at 'AA+';
-- $13.4 million class C certificates at 'A+'.
-- $11.3 million class D at 'BBB';
-- $10.3 million class E at 'BBB-';
-- $12.3 million class F at 'BB+';
-- $7.2 million class G at 'BB';
-- $2.1 million class H at 'BB-';
-- $2.1 million class J at 'B-'.
Classes A-1 and A-2 have paid in full.
The rating affirmations reflect the stable pool performance and
moderate paydown since Fitch's last rating action. As of the
October 2007 distribution date, the pool has paid down 36.9%, to
$519.2 million from $822.6 million at issuance. In addition,
there are no delinquent or specially serviced loans.
This deal is comprised of low leverage loans with an average loan-
to-value significantly lower than that of a typical conduit deal
and average seasoning of six years.
The pool is geographically diverse with the highest concentration
in North Carolina (10.6%). Other concentrations include Florida
(9.9%), California (9%), Maryland (8.6%), and New York (7.3%).
The highest property type concentration in the pool is retail
(32.7%), with other concentrations including Industrial /
Warehouse (29%), office (22.7%), multifamily (14.9%) and self
storage (0.8%).
Six loans in the pool (4.2%) have been identified as Fitch loans
of concern due to decreases in DSCR, occupancy, or other
performance indicators. These loans' higher likelihood of default
was incorporated into Fitch's analysis.
GLORIA MELO: Case Summary & 16 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Gloria Melo
dba Royalty Real Estate
fdba Blackhorse Real Estate
342 San Luis Avenue
Watsonville, CA 95076
Bankruptcy Case No.: 07-53398
Type of Business: The Debtor is engaged in the real estate
business.
Chapter 11 Petition Date: October 23, 2007
Court: Northern District of California (San Jose)
Judge: Marilyn Morgan
Debtor's Counsel: Judson T. Farley, Esq.
830 Bay Avenue, Suite B
Capitola, CA 95010-2173
Tel: (831) 476-1766
Total Assets: $2,259,420
Total Debts: $2,317,847
Debtor's 16 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Remington Duque $45,390
538 Main Street
Watsonville, CA 95076
Register-Pajaronian newspaper $20,000
100 Westridge Drive advertising
Watsonville, CA 95076
American Express $9,500
P.O. Box 0001
Los Angeles, CA 90096-0001
Bank of America $4,616
Wells Fargo $3,060
Best Buy $1,995
H.S.B.C. Card Services $1,406
Discover Platinum Card $1,340
Target National Bank $699
Mervyns $532
Gottschalks $393
Lane Bryant $250
Macy's $160
J.C. Penney $101
Victoria's Secret $76
New York & Company $70
GOLDEN STATE: Section 341(a) Meeting Scheduled on November 16
-------------------------------------------------------------
The United States Trustee for Region 17 will convene a meeting of
creditors in Golden State Development LLC's chapter 11 case at
2:00 p.m. on Nov. 16, 2007, at 501 Street, 7th Floor, Room 7-500
in Sacramento, California.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases. All
creditors are invited, but not required, to attend.
This Meeting of Creditors offers an opportunity for creditors to
question a responsible office of the Debtor under oath about the
company's financial affairs and operations that would be of
interest to the general body of creditors.
Headquartered in Roseville, California, Golden State Development
filed for Chapter 11 protection on Oct. 9, 2007 (Bankr. E.D.
Calif. Case No. 07-28343). G. Dave Teja, Esq., in Yuba City,
California, represents the Debtor. When the Debtors filed for
protection against its creditors, it estimated assets of and debts
of $1 million to $100 million.
GREAT LAKES: Inks $25 Million Purchase Agreement with Dragaport
---------------------------------------------------------------
Great Lakes Dredge & Dock Corporation signed a definitive
agreement to purchase dredging equipment from Dragaport Ltda.
The terms of the agreement with Dragaport provide for Great Lakes
Dredge & Dock Company LLC, a subsidiary of Great Lakes Dredge &
Dock Corporation, to purchase from Dragaport two 5600 cubic meter
hopper dredges, the "Macapa" and "Boa Vista 1," for the aggregate
price of $25 million. These dredges are currently flagged and
located in Brazil.
The company's intent is to reflag these vessels under Marshall
Island law and deploy them to the Middle East to begin working on
projects currently in backlog. The acquisitions of the dredges
are expected to be financed with cash on hand and borrowings under
the company's senior credit facility by the end of 2007.
Douglas B. Mackie, president & chief executive officer, said,
"During the past several years, we have been increasingly
successful in being awarded projects in the Middle East. The
acquisition of these two dredges will increase our hopper
capabilities, improving our operating efficiencies on current
projects and enabling the company to negotiate more competitively
on upcoming projects. Having identified the Middle East as a
market with significant growth potential, the ability to increase
our footprint in the region and add capacity further strengthens
the company's competitive position in this geographic area."
About Dragaport Ltda.
Headquartered in Brazil, Dragaport Ltda.
-- http://www.dragaport.com.br- is a Brazilian engineering and
civil construction company, dredging activities specialized, was
founded on May 21, 1999 by the companies Wilson Sons de
Administra‡ao e Com‚rcio Ltda., Serveng-Civilsan S/A and CBO -
Companhia Brasileira de Offshore Ltda., with the objective of
sharing the Brazilian and international dredging market.
About Great Lakes
Headquartered in Oakbrook, Illinois, Great Lakes Dredge & Dock
Corporation (NASDAQ:GLDD) -- http://www.gldd.com/-- through its
operating company Great Lakes Dredge & Dock Co., provides dredging
services in the US.
* * *
In September 2006, Moody's placed the company's long-term
corporate family rating and probability of default rating at B3,
bank loan debt rating at Ba3, and senior subordinate rating at
Caa1. These ratings still hold to date. The outlook is stable.
GREENPARK GROUP: Files Second Amended Chapter 11 Liquidation Plan
-----------------------------------------------------------------
Greenpark Group LLC and its debtor-affiliates filed with the U.S.
Bankruptcy Court for the Central District of California a Second
Amended Disclosure Statement describing their Second Amended
Chapter 11 Plan of Liquidation.
GreenPark Group's debtor-affiliates are:
* California/Nevada Development LLC
* GreenPark Runkle Canyon LLC
* GreenPark Las Vegas LLC
* GreenPark South Las Vegas LLC
* McCadden Development LLC
* South Las Vegas LLC
GreenPark Group tells the Court that it owns McCadden and Runkle.
In addition, GreenPark Group owns 85% membership interest in CND
and 15% owns by Cilcorp. On the other hand, Realex Properties
Inc. owns 98% membership interest in GreenPark Group and 2% owns
by James R. Wheeler, GreenPark Group's senior vice president.
Overview of the Plan
The Plan contemplates for the payment of valid creditors from the
available cash on hand of approximately $22,600,000 on the
effective date, which is comprised of: $13,600,000 cash in DIP
account and $9,000,000 of note receivable.
The Debtors says that Runkle will collect the proceeds of the
$9,000,000 note receivable, and distributes to valid creditors.
The Debtors further says that in order for CND and McCadden to
make distributions under the Plan, GreenPark Group will contribute
$25,000 to CND and McCadden to be distributed pro rata to their
creditors.
Treatment of Claims
Under the Plan, all Administrative and Priority Tax Claims will be
paid in full on the effective date.
Unsecured Creditors of GreenPark Group, totaling $3,030,428, will
be paid 100% without interest on the effective date.
CND's Unsecured Creditors, totaling $971,311, will receive a pro
rata share of the available assets, while the Unsecured Creditors
of McCadden, totaling $2,313,402, will also receive a pro rata
share of the available assets under the Plan.
Runkle, SLV, GPSLV and GPLV's Unsecured Creditors will be paid
100% of their respective claim on the effective date.
GreenPark Group Equity Interest
Realex Properties Inc.' equity interest in GreenPark will receive
any assets remaining after all valid claims have been satisfied;
provided that $3,000,000 will reserved to satisfy Realex's
interest to the extent the interest have no been paid in
accordance with a prior Court order.
Runkle, SLV, GPSLV and GPLV Equity Interest
Equity Interest in this class will also receive any remaining
assets after all valid claims have been paid.
CND and McCadden Equity Interest
Equity Interest holders of both CND and McCadden will not be
entitled to receive any distribution on account of their interest
and will be deemed cancelled on the effective date of the Plan.
Wheeler and Kiesecker Equity Interest
Mr. Wheeler and Peter Kiesecker, a creditor of GreenPark Group,
each will receive $1,500,000, to the extent possible that the
amount has not been paid pursuant to a Court order.
About GreenPark Group
Headquartered in Seal Beach, California, GreenPark Group LLC,
is a real estate developer and building contractor. The Company
and its affiliate, California/Nevada Developments LLC, filed for
chapter 11 protection on June 23, 2006 (Bankr. C.D. Calif. Case
Nos. 06-10988 & 06-10989). Alan J. Friedman, Esq., at Irell &
Manella, LLP, represents the Debtors. The U.S. Trustee for Region
16 has not appointed an Official Committee of Unsecured Creditors
in the Debtors' bankruptcy proceedings to date. When the Debtors
filed for protection from their creditors, the Debtors estimated
assets and debts between $10 million and $50 million.
GS MORTGAGE: Fitch Holds Low-B Ratings on Six Cert. Classes
-----------------------------------------------------------
Fitch Ratings affirmed GS Mortgage Securities Corporation II, 2006
GG8, commercial mortgage pass-through certificates, as:
-- $64.4 million class A-1 at 'AAA';
-- $940.7 million class A-2 at 'AAA';
-- $52.9 million class A-3 at 'AAA';
-- $111.5 million class A-AB at 'AAA';
-- $1.598 billion class A-4 at 'AAA';
-- $196.2 million class A-1A at 'AAA';
-- $424.3 million class A-M at 'AAA';
-- $302.3 million class A-J at 'AAA';
-- Interest-only class X at 'AAA';
-- $26.5 million class B at 'AA+';
-- $53 million class C at 'AA';
-- $37.1 million class D at 'AA-';
-- $37.1 million class E at 'A+';
-- $42.4 million class F at 'A';
-- $53 million class G at 'A-';
-- $47.7 million class H at 'BBB+';
-- $53 million class J at 'BBB';
-- $26.5 million class K at 'BBB-';
-- $26.5 million class L at 'BB+';
-- $15.9 million class M at 'BB';
-- $15.9 million class N at 'BB-';
-- $10.6 million class O at 'B+';
-- $10.6 million class P at 'B';
-- $15.9 million class Q at 'B-'.
Fitch does not rate the $58.3 million class S.
The affirmations are the result of stable pool performance and
minimal pay down since issuance. As of the October 2007
distribution date, the pool's aggregate principal balance has
decreased 0.1% to $4.237 billion from $4.242 billion at issuance.
There is currently one loan 30 days delinquent.
Fitch reviewed servicer provided operating statement analysis
reports for the two shadow rated loans: One Beacon Street (5%) and
Village of Merrick Park (4%). Based on their stable performance
since issuance the loans maintain their investment grade shadow
ratings.
One Beacon Street (5%) is a 1 million square foot office property
located in the Financial District in Boston, Massachussets. Major
tenants include One Beacon Insurance (rated 'A' by Fitch),
MassHousing Finance Agency, JP Morgan Chase & Company; Skadden,
Arps, Slate, Meagher & Flom; and RBC Dain Rauscher. The sponsor
is Beacon Capital Strategic Partners IV, L.P., a closed-end
investment fund managed by the Boston-based real estate investment
firm Beacon Capital Partners LLC. As of Aug. 8, 2007, occupancy
has improved to 94.4% from 91.4% at issuance.
The Village of Merrick loan (4%) is collateralized by 488,554 sf
of a 818,554 sf regional mall and office property located in Coral
Gables, Florida. Anchor tenants include Nordstrom and Neiman
Marcus and major tenants include Bayview Financial, Borders,
Artefacto and Express. The mall is managed by General Growth
Properties, a publicly traded REIT. As of
June 30, 2007, occupancy has increased to 100% from 96.6% at
issuance.
GS MORTGAGE: Moody's Affirms Caa1 Rating on Class H Certs.
----------------------------------------------------------
Moody's Investors Service upgraded the rating of one class and
affirmed the ratings of eight classes of GS Mortgage Securities
Corporation II, Commercial Mortgage Pass-Through Certificates,
Series 1999-C1 as:
-- Class A-2, $241,393,033, affirmed at Aaa
-- Class X, Notional, affirmed at Aaa
-- Class B, $42,303,000, affirmed at Aaa
-- Class C, $44,529,000, affirmed at Aaa
-- Class D, $57,888,000, affirmed at Aaa
-- Class E, $13,359,000, affirmed at Aaa
-- Class F, $46,756,000, upgraded to Baa1 from Baa3
-- Class G, $28,944,000, affirmed at B3
-- Class H, $6,679,000, affirmed at Caa1
As of the Sept. 18, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by about 44.7% to
$492.4 million from $890.6 million at securitization. The
certificates are collateralized by 193 loans ranging in size from
less than 1% to 3.6% of the pool with the top 10 loans
representing 21.9% of the pool. Thirty loans, representing 29.5%
of the pool, have defeased and are collateralized by U.S.
Government securities.
Twenty-nine loans have been liquidated from the trust, resulting
in aggregate realized losses of about $18.3 million. Two loans,
representing 0.4% of the pool, are in special servicing. Moody's
has estimated losses of about $300,000 for all of the specially
serviced loans. Fifty loans, representing 21.1% of the pool, are
on the master servicer's watchlist.
Moody's was provided with full-year 2006 operating results for
about 95.8% of the non-defeased performing loans. Moody's
weighted average loan to value ratio is 74.9%, compared to 80.1%
at Moody's last full review in October 2006 and compared to 90.7%
at securitization. Moody's is upgrading Class F due to increased
credit enhancement, improved overall pool performance and
defeasance.
The top three non-defeased exposures represent 5.5% of the
outstanding pool balance. The largest exposure is the Atrium
Hotel Loan ($9.6 million -- 2%), which is secured by a 214-room
full service hotel located in Irvine, California. RevPAR for
calendar year 2006 was $63.90, compared to $63.16 in calendar year
2005 and compared to $49.19 in calendar year 2004. The loan is on
the master servicer's watchlist due to low debt service coverage.
Moody's LTV is in excess of 100%, compared to 95.6% at last review
and compared to 78.1% at securitization.
The second largest exposure is the Salter Healthcare Portfolio
($9.6 million -- 2%), which is secured by three nursing centers
totaling 384 beds. All of the properties are located in
Massachusetts. Performance has been stable since last review.
Moody's LTV is 52.7%, compared to 54.4% at last review and
compared to 10.3.4% at securitization.
The third largest exposure is the Tully I-10 Shopping Center Loan
($7.5 million -- 1.5%), which is secured by a 126,600 square foot
anchored retail center located in Houston, Texas. As of year-end
2006 the property was 89.2% occupied, compared to 100% at year-end
2005 and compared to 95% at securitization. The lease of the
anchor tenant, Sandy Produce Market (28% of NRA), expires in June
2008. Moody's LTV is 89.9%, compared to 72% at last review and
compared to 104.2% at securitization.
HARTCOURT COMPANIES: Posts $246,216 Net Loss in Qtr. Ended Aug. 31
------------------------------------------------------------------
The Hartcourt Companies Inc. reported a net loss of $246,216 for
the first quarter ended Aug. 31, 2007, compared with a net loss of
$126,741 for the same period ended Aug. 31, 2006.
There was no revenue during the three months ended Aug. 31, 2007,
and 2006, because the company entered into a definitive agreement
to sell the IT distribution business and therefore the sales from
IT distribution business has been classified into discontinued
operation category for three months ended Aug. 31, 2007, and
comparable period in the preceding years.
The company's consolidated balance sheet at Aug. 31, 2007, showed
$1.22 million in total assets, $1.21 million in total liabilities,
and $12,919 in total shareholders' equity.
The company's consolidated balance sheet at Aug. 31, 2007, also
showed strained liquidity with $70,434 in total current assets
available to pay $1.21 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2007, are available for
free at http://researcharchives.com/t/s?247f
Going Concern Doubt
As reported in the Troubled Company Reporter on Sept. 18, 2007,
Kabani & Company Inc., expressed substantial doubt about
Hartcourt Companies Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended May 31, 2007. The auditing firm noted that the
company incurred net losses and experienced negative cash flows
from operations in the last six years. As of May 31, 2007, the
company accumulated deficit of approximately $69 million. T
About The Hartcourt Companies
Headquartered in Shanghai, China, The Hartcourt Companies, Inc.
-- http://www.hartcourt.com-- was incorporated in Utah. The
company specializes in the Chinese information technology
market. In August 2006, the company decided to enter the post-
secondary education market in China.
HERCULES INC: Earns $42.4 Million Third Quarter Ended Sept. 30
--------------------------------------------------------------
Hercules Incorporated reported net income for the quarter ended
Sept. 30, 2007 of $42.4 million as compared to net income of
$34.2 million for the third quarter of 2006.
Net income from ongoing operations for the third quarter of 2007
was $53.4 million, an increase of 28% per diluted share as
compared to net income from ongoing operations of $40.9 million in
the third quarter of 2006.
During the quarter, the company purchased about 1.15 million
shares of common stock for a cost of about $22.8 million pursuant
to its previously announced $200 million share repurchase
authorization.
Net sales in the third quarter of 2007 were $544.2 million, an
increase of 6% from the same period last year.
Reported profit from operations in the third quarter of 2007 was
$72.9 million, an increase of 1% compared with the same period in
2006. Profit from ongoing operations in the third quarter of 2007
was $84.2 million, an increase of 10% compared with $76.4 million
in the third quarter of 2006.
Interest and debt expense was $17 million in the third quarter of
2007, up $0.3 million compared with the third quarter of 2006.
Net debt, total debt less cash and cash equivalents, was
$669 million at Sept. 30, 2007, a decrease of $154.7 million from
year-end 2006.
Capital spending was $24 million in the third quarter and
$77.8 million year to date. This compares to $26.3 million and
$49.2 million in the third quarter and year to date periods last
year, respectively.
Nine Month-Result Highlights
Net income for the nine months ended Sept. 30, 2007 was
$150.4 million as compared to a net loss of $3.4 million for the
same period in 2006.
Net income from ongoing operations for the nine months ended Sept.
30, 2007 was $134.9 million, an increase of 27% per diluted share
versus the same period in 2006.
Cash flow from operations for the nine months ended Sept. 30, 2007
was $247.5 million, an increase of $140.5 million as compared to
the same period last year.
The company has now received $223.2 million of tax refunds during
the year and expects to receive an additional $21.2 million in the
first half of 2008.
Net sales for the nine months ended Sept. 30, 2007 were
$1.596 billion, an increase of 8% as compared to the same period
in 2006, excluding the impact of the FiberVisions transaction.
Interest expense for the nine months ended Sept. 30, 2007 was
$52 million, a decrease of $2.1 million from the same period of
last year.
As of Sept. 30, 2007, the company reported total assets of
$2.7 billion, total liabilities of $2.3 billion, and total
stockholders' equity of $458.4 billion.
Full-text copies of the company's financials are available for
free at http://ResearchArchives.com/t/s?2485.
Outlook
"We continue to demonstrate solid growth in revenues, earnings per
share and cash flow," commented Craig A. Rogerson, president and
chief executive officer. "Our priority is to continue to invest
in high return opportunities supporting our two global franchises.
We also began returning excess cash flow to our shareholders by
reinstituting a common stock dividend and through share
repurchases."
About Hercules Inc
Headquartered in Wilmington, Delaware, Hercules Inc. (NYSE:HPC)
-- http://www.herc.com/-- manufactures and markets chemical
specialties globally for making a variety of products for home,
office and industrial markets. The company has its regional
headquarters in China and Switzerland, and a production facility
in Brazil.
* * *
In September 2006, Moody's placed the company's long-term
corporate family rating, senior unsecured debt rating and
probability of default rating at Ba2, senior subordinate rating at
Ba3, and junior subordinate debt rating at B1. These ratings
still hold to date. The outlook is positive.
Standard & Poor's placed the company's long-term foreign and local
issuer credits at BB which still hold to date. The outlook is
positive.
HILTON HOTELS: S&P Lifts Ratings on Eight Certificate Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on eight
classes of commercial mortgage pass-through certificates from
Hilton Hotels Pool Trust?s series 2000-HLT to 'AAA' due to the
full defeasance of a single fixed-rate whole loan.
The fixed-rate whole loan, which serves as trust collateral, was
fully defeased on Oct. 23, 2007. Before the defeasance, the loan
was secured by five cross-collateralized and cross-defaulted
Hilton hotels in San Francisco, California, Chicago, Illinois,
McLean, Virginia, Short Hills, New Jersey, and Phoenix, Arizona.
As part of the defeasance, the real estate collateral securing the
loan was released and replaced with defeasance collateral. The
defeasance collateral will provide a revenue stream sufficient to
pay each scheduled principal and interest payment when due through
Oct. 1, 2010, the maturity date of the loan.
Ratings Raised
Hilton Hotels Pool Trust Commercial mortgage
pass-through certificates series 2000-HLT
Rating
------
Classes To From
------- -- ----
A-1 AAA AA
A-2 AAA AA
B AAA A
C AAA BBB-
D AAA BB+
E AAA BB
F AAA BB-
X AAA AA
HOMEBANC MORTGAGE: Loan Servicing Sale Hearing Moved to Oct. 30
---------------------------------------------------------------
HomeBanc Mortgage Corporation and its debtor-affiliates have
obtained an adjournment to Oct. 30, 2007, at 10:00 a.m., on
the bankruptcy court hearing wherein they will seek approval to
sell their loan servicing business to the highest bidder.
HomeBanc had already obtained from the U.S. Bankruptcy Court for
the Southern District of Delaware nine-day extensions of the
scheduled auction and the hearing for the sale of their rights to
collect mortgage payments. The auction and the sale hearing were
originally scheduled for October 9 and October 16.
As of the Petition Date, the Debtors collected mortgage payments
with respect to 48,300 loans with an aggregate principal amount of
about $8,000,000,000. Federal Home Loan Mortgage Corporation,
however, has requested that the rights to service 7,140 loans,
valued at $1,381,949,212, that it purchased from the Debtors, be
sold at a separate auction.
HomeBanc has temporarily assigned its servicing rights to
creditor JPMorgan Chase Bank, N.A., pending the sale.
HomeBanc has not identified the winning bidder/s for its
servicing business. HomeBanc, however, insisted in a document
submitted to the Bankruptcy Judge Kevin J. Carey on Oct. 25,
2007, that the proposed sale is within the sound business
judgment and is for the "highest and best price" obtainable for
the servicing rights.
Representing HomeBanc, Joel A. Waite, Esq., at Young Conaway
Stargatt & Taylor, LLP, in Wilmington, Delaware asserts that the
proposed sale meets the requirements of Section 363 of the
Bankruptcy Code; hence, the objections raised by six parties
should be overruled:
-- Citibank, N.A., and its affiliates,
-- Freddie Mac,
-- U.S. Bank, N.A,
-- the Bank of New York,
-- Wells Fargo Bank, N.A., and
-- the Federal National Mortgage Association.
HomeBanc notes that a "virtually identical" proposal to sell loan
servicing rights by bankrupt American Home Mortgage Holdings,
Inc., has been approved by Delaware Bankruptcy Court Judge
Christopher S. Sontchi on Oct. 23, 2007. As in American Home, the
Court should rule that HomeBanc that no cure payments are required
in connection with the sale because the servicing rights are not
part of an executory contract, Mr. Waite contends.
Even if Judge Carey declines to follow Judge Sontchi's opinion,
the Court should still overrule the objections and rule that the
servicing rights can be assumed and assigned to the purchaser
without any cure amount being necessary, Mr. Waite avers. He adds
that HomeBanc has no single documented default with respect to its
servicing of loans.
HomeBanc says that it intends to present at the sale hearing
evidence providing "adequate assurance of future performance" by
the purchaser of its servicing business.
Headquartered in Atlanta, Georgia, HomeBanc Mortgage Corporation -
- http://www.homebanc.com/-- is a mortgage banking company
focused on originating primarily prime purchase money residential
mortgage loans in the Southeast United States.
HomeBanc Mortgage together with five affiliates filed for chapter
11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079
through 07-11084). Joel A. Waite, Esq., at Young, Conaway,
Stargatt & Taylor was selected by the Debtors to represent them in
these cases. The Official Committee of Unsecured Creditors
selected the firm Otterbourg, Steindler, Houston and Rosen, P.C.
as its counsel. The Debtors' financial condition as of June 30,
2007, showed total assets of $5,100,000,000 and total liabilities
of $4,900,000,000.
The Debtors' exclusive period to file a plan ends on Dec. 7,
2007. (HomeBanc Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Services Inc. http://bankrupt.com/newsstand/or
215/945-7000).
INDIANTOWN COGENERATION: S&P Holds 'BB+' Rating on $505MM Bonds
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'BB+' rating on
Indiantown Cogeneration Funding Corp.'s $505 million first
mortgage bonds due 2020 and the 'BB+' rating on Indiantown
Cogeneration L.P.'s $125 million tax-exempt bonds due 2025.
Standard & Poor's also removed the ratings from CreditWatch with
negative implications. The outlook is negative.
The ratings were placed on CreditWatch with negative implications
on May 15, 2007, following Cogentrix Energy Inc.'s (CEI; BB-
/Stable/--) announcement of its intention to sell its equity
interest in 14 of 18 power plants, including its 100% equity
interest in Indiantown Cogen. Indiantown Cogen is a
330 MW pulverized-coal-fired cogeneration facility in Martin
County, Florida. The ratings affirmation and resolution of the
CreditWatch listing follows CEI's sale of 80% of its equity
interest to United States Power Fund III L.P., a private equity
fund managed by Energy Infrastructure Fund, while retaining a 20%
interest in the assets.
Standard & Poor's is satisfied that CEI's 20% figure is material
enough to keep its interests independent of those of EIF. The
likelihood that the owners will agree to voluntarily file the
project for bankruptcy for non-project-related reasons is remote,
and Indiantown Cogen's 'BB+' stand-alone credit rating is
therefore not constrained by the credit rating of its owners.
The negative outlook on Indiantown Cogen primarily reflects the
continued potential for a mismatch between energy revenues and
fuel costs.
"The outlook could be revised to stable if no further
deterioration in debt service coverage ratios occurs due to
insufficient energy revenue," noted Standard & Poor's credit
analyst Chinelo Chidozie. "However, an upgrade is unlikely,
unless the project reaches an agreement with Florida Power & Light
Co. that would provide a long-term resolution to the energy
revenue/fuel cost mismatch issue," she continued.
INTERNATIONAL SHIPHOLDING: Retires $110 Mil. 7-3/4% Sr. Notes
-------------------------------------------------------------
International Shipholding Corporation has retired all of the
remaining outstanding obligations of its 7-3/4% Senior Unsecured
Notes. These Notes were issued in January 1998, at a face value
of $110 million.
During the years, the company retired a total of $71.03 million of
the outstanding Notes in advance of maturity leaving this payment
of $38.97 million as the final payment due in order to fully
retire all outstanding Notes.
The company used funds available from free operating cash to make
this final payment.
International Shipholding Corporation, headquartered in Mobile,
Alabama, is a holding company whose subsidiaries operate a
diversified fleet of ocean-going vessels that serve mainly niche
shipping markets.
* * *
As reported in the Troubled Company Reporter on Oct. 24, 2007,
Moody's Investors Service withdrew all of its ratings of
International Shipholding Corporation, including a B2 corporate
family rating, a B2 probability of default rating and a Caa1
senior unsecured regular bond/debenture rating. The withdrawals
follow the payoff on the Oct. 15, 2007 maturity date of the $38.9
million of outstanding senior unsecured notes.
To date, International Shipholding Corp. holds Standard and Poor's
B+ long-term foreign and local issuer credit ratings.
INVERNESS MEDICAL: Inks Deal to Buy Alere Medical for $302 Mil.
---------------------------------------------------------------
Inverness Medical Innovations has entered into an agreement to
acquire Alere Medical Inc. The purchase price is $302 million,
comprising approximately $125 million in cash and $177 million in
Inverness common stock.
"The acquisition of Alere Medical is an exciting opportunity to
enter the disease management industry, a move which fits naturally
with our goal of enabling individuals to take charge of their
health," Ron Zwanziger, CEO of Inverness, said. "Alere's
expertise in patient monitoring and particularly in home chronic
heart failure management complements our cardiac diagnostic
technologies being developed at Biosite in San Diego and at
Stirling Medical in Scotland. In addition, Alere brings with it
exceptional management, a solid business platform, and strong
revenues and profitability and is consistent well with our overall
acquisition strategy."
"We are thrilled to become a part of Inverness,' Ron Geraty, CEO
of Alere, said. "We believe that combining our efforts with those
of Inverness will ensure our continued growth within the care
management industry. Acceptance of disease management within the
medical community continues to accelerate and this transaction
will solidify Alere's efforts to provide better services to its
physician participants and hasten the movement towards an
'Advanced Medical Home'. We believe Inverness' entry into the
care management sector will help Alere to improve the position and
viability of care management as a solution to healthcare's
challenges."
The transaction is expected to close prior to the end of the
calendar year, subject to satisfaction of regulatory and other
customary closing conditions.
About Alere Medical Inc.
Headquartered in Reno, Nevada, Alere Medical Inc. --
http://www.alere.com/-- is a specialized health management
services focusing on a patient-centric, programmatic approach to
comprehensive personal health support. Alere's integrated care
monitoring system identifies and monitors all medium- and high-
risk patients, and prioritizes those patients to facilitate
efficient workflow. With published outcomes that exceed those of
any competitor, Alere Medical's health management programs improve
clinical outcomes for patients and maximize savings for clients.
About Inverness Medical
Based in Waltham, Massachusetts, Inverness Medical Innovations
Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops,
manufactures and markets in vitro diagnostic products for the
over-the-counter pregnancy and fertility/ovulation test market and
the professional rapid diagnostic test markets.
* * *
Moody's placed Inverness Medical's subordinated debt rating at
'Caa1' as well as the company's long term corporate family and
probability of default ratings at 'B2' in June 2007. The ratings
still hold to date with a stable outlook.
ISLAMIC SOCIETY: Case Summary & Seven Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Islamic Society of San Francisco
20 Jones Street
San Francisco, CA 94102
Bankruptcy Case No.: 07-31379
Type of Business: The Debtor is a registered non-profit
organization in the state of California which
currently manages and maintains the largest
mosque in downtown San Francisco known as Masjid
Darussalam.
Chapter 11 Petition Date: October 23, 2007
Court: Northern District of California (San Francisco)
Judge: Thomas E. Carlson
Debtor's Counsel: Iain A. Macdonald, Esq.
Law Offices of Macdonald and Assoc.
2 Embarcadero Center #1670
San Francisco, CA 94111-3930
Tel: (415) 362-0449
Total Assets: $2,060,000
Total Debts: $894,039
Debtor's list of its Seven Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
----------- --------------- ------------
Save Al-Huda School Foundation $225,000
c/o Kenneth N. Frucht, Esq.
Law Offices of Kenneth Frucht
San Francisco, CA 94104
Akram Omari 340 Alta Vista Drive $125,000
870 Market Street, Suite 1174
San Francisco, CA 94102
Ahdi Nashashibi Court and legal $75,000
99 Magellan Avenue fees
San Francisco, CA
94116-1414
Legal fees advanced $11,039
Mohammed Sheikh $10,000
Nabil Aldajani $10,000
Michael Allen, Esq. $8,000
Yusuf Bashir $5,000
JACOBS FINANCIAL: Aug. 31 Balance Sheet Upside-Down by $8.3 Mil.
----------------------------------------------------------------
Jacobs Financial Group Inc.'s consolidated balance sheet at
Aug. 31, 2007, showed $4.4 million in total assets, $2.4 million
in total liabilities, and $10.3 million in total mandatorily
redeemable preferred stock, resulting in an $8.3 million total
shareholders' deficit.
The company reported a net loss of $220,084 on total revenues of
$211,396 for the first quarter ended Aug. 31, 2007, compared with
a net loss of $304,887 on total revenues of $199,505 for the same
period ended Aug. 31, 2006.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2007, are available for
free at http://researcharchives.com/t/s?247d
Going Concern Doubt
As reported in the Troubled Company Reporter on Sept. 17, 2007,
Pittsburgh, Pa.-based Malin, Bergquist & Company LLP expressed
substantial doubt about Jacobs Financial Group Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended May 31, 2007.
The auditing firm pointed to the company's significant net working
capital deficit and operating losses.
About Jacobs Financial
Headquartered in Charleston, West Va., Jacobs Financial Group Inc.
(OTC BB: JFGI.OB) through its subsidiaries, provides investment
advising, investment management, surety business, security
brokerage, and related services. Subsidiaries include Jacobs &
Co., which provides investment advisory services; FS Investments,
a holding company organized to develop surety business through the
formation and acquisition of companies engaged in the issuance of
surety bonds, and FS Investment's wholly-owned subsidiary Triangle
Surety Agency, which places surety bonds with insurance companies.
Subsidiary Crystal Mountain Water holds mineral property in
Arkansas.
JAYS FOODS: Court OKs Retention of Winston & Strawn as Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave Jays Foods Inc. and Select Snacks Inc. permission to employ
Winston & Strawn LLP as their counsel.
Winston & Strawn will:
a. advise the Debtors of their powers and duties as debtors
in possession;
b. advise the Debtors regarding matters of bankruptcy law;
c. represent the Debtors in proceedings and hearings in the
United States District and Bankruptcy Courts for the
Northern District of Illinois;
d. prepare on behalf of the Debtors any necessary motions,
applications, orders and other legal papers;
e. provide assistance, advice and representation concerning the
sale of the Debtors as a going concern or the sale of
substantially all of the Debtors' assets;
f. provide assistance, advice and representation concerning the
confirmation of any proposed plan(s) and solicitation of any
acceptances or responding to rejections of such plan(s);
g. provide assistance, advice and representation concerning any
investigation of the assets, liabilities and financial
condition of the Debtors that may be required under local,
state or federal law;
h. prosecute and defend litigation matters and such other
matters that might arise during these chapter 11 cases;
i. provide counseling and representation with respect to
assumption or rejection of executory contracts and leases,
sales of assets and other bankruptcy-related matters arising
from these cases;
j. render advice with respect to general corporate and
litigation issues relating to these cases, including, but
not limited to, securities, corporate finance, labor, tax,
and commercial matters; and
k. perform other legal services as may be necessary and
appropriate for the efficient and economical administration
of these chapter 11 cases.
The Debtor will pay the firm at these hourly rates:
Designation Hourly Rate
----------- -----------
Partners $400 - $845
Associates $235 - $440
Paralegals $95 - $250
The primary attorneys anticipated to work on this engagement are
Mark K. Thomas, Esq., Brian I. Swett, Esq., Jeremy T. Stillings,
Esq., and Myja K. Kjaer, Esq.
Winston & Strawn has agreed that its fees incurred in this
proceeding will not be paid from proceeds of debtor in possession
financing. Rather, the fees will be paid from proceeds of
collateral realized by Debtors' senior secured lender, LaSalle
Business Credit LLC, from the sale of Debtors' assets constituting
LaSalle's collateral, which collateral proceeds otherwise solely
would be payable to LaSalle and not otherwise payable to the
Debtors' estates. The collateral proceeds carveout is separate
and distinct from the estate carveout, which is the $1,650,000
taken from Jay's Acquisition Inc.'s bid offer of $24,850,000 for
the Debtors' assets. The estate carveout will be paid to satisfy
claims against the estate, exclusive of LaSalle's claims. Winston
& Strawn has waived any right or claim to payment from the estate
carveout.
The Debtors assure the Court that Winston & Strawn's does not hold
or represent any interest adverse to the Debtors, and that Winston
& Strawn is a "disinterested person" within the meaning of section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Mark K. Thomas, Esq.
Winston & Strawn LLP
35 W. Wacker Drive
Chicago, IL 60601
Tel: (312) 558-5600
http://www.winston.com/
Chicago-based Jays Foods Inc. -- http://www.jaysfoods.com/--
wholesales confectionery products and manufactures snack chip
products. Jays Foods leases real property, and owns certain
equipment, in Chicago, Illinois where it operates a manufacturing
facility that makes snacks mostly under the Jays, O-KE-DOKE and
Krunchers brand names. Jays is 100% owned by Jays Holding
Company, Inc.
The company, then known as Jays Food LLC, first filed for chapter
11 protection on March 5, 2004 (Bankr. N.D. Ill. Case No. 04-
08681). David Missner, Esq., Marc I. Fenton, Esq. and Thomas
Zwartz, Esq. at Piper Rudnick LLP were counsels to the Debtor. In
the March 2004 case, a Section 363 sale took place and most of the
assets of former Jays Foods were sold to Jays Foods Acquisition
Inc., predecessor to Jays Foods Inc. The March 2004 case was
closed on or about March 9, 2007.
Select Snacks Inc., on the other hand, owns real property,
improvements and equipment in Jeffersonville, Indiana where it
operates a manufacturing facility that makes private label and co-
manufactured snacks for its customers. Select Snacks is 100%
owned by Select Snacks Holdings Company, Inc.
Both Select Holding and Jays Holding are 100% owned by Ubiquity
Brands LLC.
As of the Oct. 11, 2007, the Debtors had approximately 943
employees of which Select has 262 (211 union employees and, 51
non-union employees) and Jays has 681 total employees (236 union
employees and 445 non-union employees).
Jays Foods and Select Snacks filed voluntary chapter 11 petitions
on Oct. 11, 2007 (Bankr. N.D. Ill. Case Nos. 07-18768 and
07-18769). When they sought protection from their creditors, they
listed assets and debts between $10 million and $50 million.
JAYS FOODS: Has Until Nov. 5 to File Schedules of Assets & Debts
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave Jays Foods Inc. and Select Snacks Inc. until Nov. 5, 2007, to
file their schedules and statements.
The Debtors had informed the Court that it has been impossible for
them to assemble all of the necessary information required to
prepare their lists, schedules and statements due to the
complexity of the Debtors' operations. The Debtors said they are
currently assembling these materials, and anticipate that they
will file their schedules and statements within 45 days of the
bankruptcy filing. Further, the Debtors said they will file these
materials at least 10 days prior to the first meeting of creditors
convened pursuant to Section 341 of the Bankruptcy Code.
Chicago-based Jays Foods Inc. -- http://www.jaysfoods.com/--
wholesales confectionery products and manufactures snack chip
products. Jays Foods leases real property, and owns certain
equipment, in Chicago, Illinois where it operates a manufacturing
facility that makes snacks mostly under the Jays, O-KE-DOKE and
Krunchers brand names. Jays is 100% owned by Jays Holding
Company, Inc.
The company, then known as Jays Food LLC, first filed for chapter
11 protection on March 5, 2004 (Bankr. N.D. Ill. Case No. 04-
08681). David Missner, Esq., Marc I. Fenton, Esq. and Thomas
Zwartz, Esq. at Piper Rudnick LLP were counsels to the Debtor. In
the March 2004 case, a Section 363 sale took place and most of the
assets of former Jays Foods were sold to Jays Foods Acquisition
Inc., predecessor to Jays Foods Inc. The March 2004 case was
closed on or about March 9, 2007.
Select Snacks Inc., on the other hand, owns real property,
improvements and equipment in Jeffersonville, Indiana where it
operates a manufacturing facility that makes private label and co-
manufactured snacks for its customers. Select Snacks is 100%
owned by Select Snacks Holdings Company, Inc.
Both Select Holding and Jays Holding are 100% owned by Ubiquity
Brands LLC.
As of the Oct. 11, 2007, the Debtors had approximately 943
employees of which Select has 262 (211 union employees and, 51
non-union employees) and Jays has 681 total employees (236 union
employees and 445 non-union employees).
Jays Foods and Select Snacks filed voluntary chapter 11 petitions
on Oct. 11, 2007 (Bankr. N.D. Ill. Case Nos. 07-18768 and
07-18769). When they sought protection from their creditors, they
listed assets and debts between $10 million and $50 million.
JOCKEYS' GUILD: Section 341(a) Creditors' Meeting Set for Nov. 15
-----------------------------------------------------------------
The U.S. Trustee for Region 8 will convene a meeting of creditors
in Jockeys' Guild Inc.'s chapter 11 cases at 2:00 p.m., on
Nov. 15, 2007, at Louisville 341 Meeting Room, 601 West Broadway
Suite 512 in Louisville, Kentucky.
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in all bankruptcy cases. All creditors are invited,
but not required, to attend.
This Meeting of Creditors offers an opportunity for creditors to
question a responsible office of the Debtor under oath about the
company's financial affairs and operations that would be of
interest to the general body of creditors.
Headquartered in Louisville, Kentucky, Jockeys' Guild Inc. --
http://www.jockeysguild.com/-- is a labor union based in
Monrovia, California, representing thoroughbred horse racing and
quarter horse professional jockeys.
The company filed for chapter 11 bankruptcy protection on Oct. 12,
2007 (Bankr. W.D. Ky. Case No. 07-33600) in hopes to solve
problems relating to its insurance through its bankruptcy filing.
Lea Pauley Goff, Esq. and Gregory D. Pavey, Esq. at Stoll Keenon
Ogden PLLC represent the Debtor in its restructuring efforts.
When it filed for bankruptcy, the Debtor listed assets between
$100,000 and $1 million and debts between $1 million and
$100 million.
JP MORGAN: Fitch Holds Low-B Ratings on Seven Cert. Classes
-----------------------------------------------------------
Fitch Ratings affirms these classes of J.P. Morgan Chase
Commercial Mortgage Securities Corp., series 2005-CIBC12,
commercial mortgage pass-through certificates:
-- $410.1 million class A-1 at 'AAA';
-- $171.2 million class A-2 at 'AAA';
-- $122.9 million class A-3A2 at 'AAA';
-- $163.6 million class A-3A1 at 'AAA';
-- $200 million class A-3B at 'AAA';
-- $649.3 million class A-4 at 'AAA';
-- $137.4 million class A-SB at 'AAA';
-- $216.7 million class A-M at 'AAA';
-- $162.5 million class A-J at 'AAA';
-- Interest only class X-1 at 'AAA';
-- Interest only class X-2 at 'AAA';
-- $43.3 million class B at 'AA';
-- $19 million class C at 'AA-';
-- $32.5 million class D at 'A';
-- $27.1 million class E at 'A-';
-- $24.4 million class F at 'BBB+';
-- $24.4 million class G at 'BBB';
-- $29.8 million class H at 'BBB-';
-- $8.1 million class J at 'BB+';
-- $8.1 million Class K at 'BB';
-- $8.1 million Class L at 'BB-';
-- $5.4 million Class M at 'B+';
-- $8.1 million Class N at 'B';
-- $5.4 million Class P at 'B-';
-- $50 million Class UHP at 'BB'.
The $27.1 million class NR is not rated by Fitch.
The ratings affirmations are the result of stable performance and
minimal paydown since issuance. As of the October 2007 remittance
report, the transaction has paid down 2.2% to
$2.14 billion from $2.17 billion at issuance. Two loans, 0.9%,
have defeased.
Two loans (0.8%) are currently in special servicing. The largest
loan is collateralized by an 89,080 square foot suburban office
building in New London, Connecticut (0.4%) that transferred in
February 2007. Occupancy as of September 2007 was 36% and the
special servicer is working to stabilize the property.
The second specially serviced loan is collateralized by a 140,482
sf office property located in Buffalo, New York, that transferred
in September 2007 due to monetary default. Occupancy as of October
2007 was 69%. The non-rated class is sufficient to absorb any
losses.
Three loans, the Universal Hotel Portfolio (4.8%), 4250 North
Fairfax Drive (2.2%), and 450 Roxbury Drive (1.2%) maintain
investment grade shadow-ratings. Watertower Place at Celebration
has paid in full.
The Universal Hotel Portfolio consists of three hotels in Orlando,
Florida, with a total of 2,400 keys. June 2007 combined occupancy
was 85.5% compared to issuance at 81.9%. Average daily rate and
revenue per available room for the same period were $227 and $194
compared to issuance at $208 and $171, respectively.
The $50 million A-note is pooled and held in the trust. The $50
million B-note, non-pooled but in the trust, collateralizes class
UHP.
The second loan, 4250 North Fairfax Drive, is an office property
located in Arlington, Virginia, that reported June 2007 occupancy
of 100%, up from issuance occupancy of 98.6%. And finally, 450
Roxbury Drive is a medical office property in Los Angeles,
California. Occupancy as of June 2007 was 97.7%, an increase from
issuance of 88.4%.
JP MORGAN: Moody's Holds B- Rating on $19.9MM Class G Certs.
--------------------------------------------------------------
Fitch Ratings affirmed J.P. Morgan Commercial Mortgage Finance
Corp.'s mortgage pass-through certificates, series 1998-C6, as:
-- Interest-only class X at 'AAA';
-- $31.6 million class C at 'AAA';
-- $47.8 million class D at 'AAA';
-- $15.9 million class E at 'AAA';
-- $39.8 million class F at 'BBB-';
-- $19.9 million class G at 'B-'
The $2.4 million class H remains at 'C/DR5'. Classes A1, A2, A3
and B have paid in full.
Although the transaction has paid down 24% since the last rating
action, affirmations are warranted due to the increased
concentration within the pool.
As of the October 2007 distribution date, the pool's certificate
balance has been reduced 80% to $157.4 million from $796.4 million
at issuance. Currently 21 of the original 91 loans remain in the
pool, of which 48% mature between 2007 and 2009.
Two assets are in special servicing (3.2%). One loan transferred
to special servicing in October 2007 due to past due maturity
(2.2%). The property is a 58,025 square foot (sf) office building
located in Conyers, Georgia. The loan's balloon balance was not
paid in full as scheduled for
Oct. 1, 2007. Occupancy as of June 2007 was 100%.
The next specially serviced asset is a real estate-owned 26,500 sf
retail shopping center in Calumet City, Illinois (1%). The asset
became REO in June 2007; current occupancy is 38%. The special
servicer has listed the property for sale.
Of the original four shadow-rated loans in the pool, three have
paid in full and one (32%) maintains its investment grade shadow-
rating. The Crystal Gateway Marriott is a 697-room full-service
hotel in Arlington, Virginia. The servicer reported the July 2007
occupancy at 76%, average daily rate (ADR) at $179 and revenue per
available room at $135 compared to YE2006 occupancy of 82%, ADR of
$171 and RevPAR of $140.
KINETIC CONCEPTS: Earns $59 Million in 3rd Quarter Ended Sept. 30
-----------------------------------------------------------------
Kinetic Concepts, Inc. reported net earnings of $59.0 million for
the third quarter of 2007, up 21%, compared to $49.0 million for
the same period one year ago.
The company reported third quarter 2007 total revenue of
$410.9 million, an increase of 17% from the third quarter of 2006.
Total revenue for the first nine months of 2007 was $1.18 billion,
an 18% increase from the prior-year period. Foreign currency
exchange movements favorably impacted total revenue for the third
quarter and first nine months of 2007 by 2% compared to the
corresponding periods of the prior year.
For the first nine months of 2007, net earnings were
$170.7 million, up 18%, compared to $144.1 million from last year.
"I am pleased that we continued to execute on our 2007 business
plan," said Catherine Burzik, president and chief executive
officer of KCI. "V.A.C.(R) remains the only clinically-proven
system that delivers effective negative pressure wound therapy.
Looking forward, we will continue to make necessary changes and
improvements in the business to enable longer-term top and bottom
line growth for our shareholders."
Gross profit for the third quarter and first nine months of 2007
was $204.2 million and $565.5 million, respectively, representing
increases of 24% and 21% from the same periods of the prior year.
Gross profit margin improved 290 basis points in the 2007 third
quarter, compared to the year-ago period, due primarily to
increased market penetration, improved revenue realization levels
and increased sales force and service productivity.
Operating earnings for the third quarter and first nine months of
2007 were $98.9 million and $272.2 million, respectively,
representing increases of 24% and 20% from the same periods of the
prior year.
Share-Based Compensation
During the third quarter and first nine months of 2007, the
company recorded share-based compensation expense totaling
approximately $6.6 million and $17.9 million, respectively, before
income taxes, under the provisions of Statement of Financial
Accounting Standards No. 123R.
Income Tax Rate
The effective income tax rates for the third quarter and the first
nine months of 2007 were 34.2% and 33.7%, respectively, compared
to 35.0% and 32.5% for the corresponding periods in 2006. The
lower income tax rate for the first nine months of the prior year
resulted from the favorable resolution of tax contingencies. The
effective tax rate for the full year of 2006 was 33.1%.
Balance Sheet
At Sept. 30, 2007, the company's consolidated balance sheet showed
$948.0 million in total assets, $355.8 million in total
liabilities, and $592.2 million in total shareholders' equity.
Refinancing
During the third quarter of 2007, KCI completed a new $500 million
revolving credit facility due July 2012. The company used a
portion of the new facility to repay the remaining outstanding
balance of $114.1 million due on its senior credit facility due
August 2010. The company also redeemed the remaining
$68.1 million due under its 73/8% senior subordinated notes due
August 2013. The company recorded refinancing expenses associated
with these transactions of $4.5 million, net of income taxes, in
the third quarter of 2007. These expenses included the write-off
of capitalized debt issuance costs associated with the repayment
of our previous debt and the payment of a make-whole premium due
to the holders of our senior subordinated notes.
Share Repurchase Program
During the third quarter of 2007, the company's Board of Directors
authorized a one-year extension of the company's previously
announced $200.0 million share repurchase program through
Sept. 30, 2008. This program had a remaining authorized amount
for share repurchases of $87.5 million as of Sept. 30, 2007. In
addition, the company has a pre-arranged purchase plan pursuant to
Rule 10b5-1 of the Exchange Act, which is authorized through
Sept. 30, 2008. No open market repurchases were made under the
share repurchase program during the third quarter of 2007.
Outlook
As of Oct. 23, 2007, KCI is tightening its projections for 2007
total revenue to $1.58 - $1.60 billion based on continued demand
for its V.A.C. negative pressure wound therapy devices and related
supplies.
About Kinetic Concepts
Headquartered in San Antonio, Kinetic Concepts Inc. (NYSE: KCI) --
http://www.kci1.com/-- designs, manufactures, markets and
services a wide range of proprietary products that can improve
clinical outcomes and can help reduce the overall cost of patient
care.
* * *
As reported in the Troubled Company Reporter on July 24, 2007,
Moody's Investors Service assigned a Ba2 rating to Kinetic
Concepts, Inc.'s new $500 million senior secured revolving bank
facility. Moody's also affirmed the company's 'Ba2' Corporate
Family Rating. The outlook is positive.
LAND INVESTORS: S&P Cuts Corporate Credit Rating to B
-----------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on November 2005 Land Investors LLC to 'B' from 'BB-' and
revised its outlook to negative from stable. At the same time,
S&P lowered the ratings assigned to the senior secured first-lien
term loan and revolving credit facility to 'B+' from 'BB' and
revised the recovery rating to '2' from '1'. Lastly, S&P lowered
the rating assigned to the senior secured second-lien credit
facility to 'CCC+' from 'B' and revised the recovery rating to '6'
from '4'.
"The downgrade reflects this project's concentration in Las Vegas
and the challenges it faces due to this exposure to one of the
weakest housing markets in the U.S.," explained Standard & Poor's
credit analyst George Skoufis. "Speculative land sales to third
parties that the borrower planned for 2007 will likely be delayed,
resulting in weaker expected cash flow that will in turn weigh on
the borrower's liquidity and ability to meet its debt service
requirements."
While the company was in compliance with its bank covenants as of
June 30, 2007, the borrower faces a heightened risk of violating
certain financial covenants, including the first-lien term loan's
minimum 3.0x interest coverage covenant, in the next 12 to 18
months. While long-term demographic trends are favorable for Las
Vegas, the current downturn is deep and of uncertain duration.
Consortium members are contractually obligated to purchase 147
acres by the end of 2007, which, after required term debt
repayment, will provide liquidity for a period of time but may not
be sufficient to meet the company's debt service needs until the
housing market recovers. As a result, additional capital and/or a
bank waiver/amendment may be needed.
The revision of the outlook to negative reflects Standard & Poor's
expectation that a weak Las Vegas housing market will weigh on the
company's ability to monetize land parcels and constrain its
liquidity. Standard & Poor's would lower the ratings further if
the borrower is unable to generate adequate cash flow through
asset sales or enhance its liquidity through an equity infusion.
While positive ratings momentum is unlikely in the near term,
Standard & Poor's would revise the outlook back to stable if the
project produces adequate land sales, debt is reduced with cash
flow, and the company's liquidity improves.
LB-UBS COMMERCIAL: Moody's Junks Rating on Class M Certificates
---------------------------------------------------------------
Moody's Investors Service downgraded the rating of one class and
affirmed the ratings of 15 classes of LB-UBS Commercial Mortgage
Trust 2001-C2, Commercial Mortgage Pass-Through Certificates,
Series 2001-C2 as:
-- Class A-1, $95,363,824, affirmed at Aaa
-- Class A-2, $789,260,000, affirmed at Aaa
-- Class X, Notional, affirmed at Aaa
-- Class B, $49,466,000, affirmed at Aaa
-- Class C, $62,656,000, affirmed at Aaa
-- Class D, $16,488,000, affirmed at Aa1
-- Class E, $13,191,000, affirmed at Aa3
-- Class F, $19,786,000, affirmed at A2
-- Class G, $16,489,000, affirmed at Baa1
-- Class H, $23,084,000, affirmed at Ba1
-- Class J, $14,840,000, affirmed at Ba2
-- Class K, $11,541,000, affirmed at Ba3
-- Class L, $9,894,000, affirmed at B1
-- Class M, $13,190,000, downgraded to Caa1 from B3
-- Class N, $6,596,000, affirmed at Ca
-- Class P, $3,298,000, affirmed at C
As of the Oct. 17, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by about 12.8% to
$1.1 billion from $1.3 billion at securitization. The
certificates are collateralized by 127 mortgage loans ranging in
size from less than 1% to 6.4% of the pool, with the top 10 loans
representing 29.3% of the pool. The pool includes a shadow rated
component, representing 12.4% of the pool, and a conduit
component, representing 50.8% of the pool.
Forty-one loans, representing 39.1% of the pool, have defeased and
are collateralized by U.S. Government securities. Seven loans
have been liquidated resulting in about $8.6 million of realized
losses. Three loans, representing 3.4% of the pool, are in
special servicing. Moody's is estimating $7.7 million of losses
from all of the specially serviced loans. Thirty-six, loans
representing 26.8% of the pool, are on the master servicer's
watchlist.
Moody's was provided with full-year 2006 operating results for
about 91% of the pool's performing non-defeased loans. Moody's
loan to value ratio for the conduit component is 84.8%, compared
to 89.8% at Moody's last full review in February 2007 and compared
to 89.3% at securitization. Moody's is downgrading Class M due to
realized and projected losses from the liquidated and specially
serviced loans.
The largest shadow rated loan is the Westfield Shoppingtown
Meriden Loan ($73.4 million - 6.4%), which is secured by the
borrower's interest in a 914,000 square foot regional mall located
in Meriden, Connecticut. Built in 1971, and renovated and
expanded in 1999, the mall is located 22 miles south of Hartford
and 23 miles north of New Haven. The mall is anchored by Macy's,
J.C. Penney and Sears.
Other major tenants include Dick's Sporting Goods, Best Buy, Steve
& Barry's and Borders Books. The collateral securing the loan
consists of in-line space and a pad formerly occupied by Lord &
Taylor. Lord & Taylor vacated in 2004 and its premises have been
100% re-leased to Dick's Sporting Goods and Best Buy. The loan is
on the master servicer's watchlist. Moody's current shadow rating
is A1, the same as at last review and compared to Baa1 at
securitization.
The second shadow rated loan is the NewPark Mall Loan
($69.8 million -- 6%), which is secured by the borrower's interest
in a 1.2 million square foot regional mall located about 15 miles
north of San Jose in Newark, California. The mall is anchored by
Macy's, Sears, J.C. Penney, and Target. The collateral securing
the loan consists of 389,600 square feet of in-line space and an
outparcel. The loan is on the master servicer's watchlist.
Moody's current shadow rating is A2, the same as at last review
and compared to Baa1 at securitization.
The top three non-defeased conduit loans represent 8.7% of the
outstanding pool balance. The largest conduit loan is the Harmon
Meadow Plaza Loan ($54 million - 4.7%), which is secured by a
510,000 square foot mixed-use complex located in Secaucus, New
Jersey. The complex contains office, retail and a hotel ground
lease and is part of a larger master development of about 2
million square feet. The largest tenants include NBA
Entertainment (17.3%; lease expiration December 2008) and
Scholastic (11.7%; lease expiration March 2010) and AMC/Loews
Cinemas (9.6%; lease expiration December 2007). Moody's LTV is
83%, compared to 83.8% at last review and compared to 81.7% at
securitization.
The second largest conduit loan is the 215 Coles Street Loan
($23.2 million - 2%), which is secured by a 714,000 square foot
industrial building located in Jersey City, New Jersey. The loan
amortizes on a 300-month schedule. Moody's LTV is 84%, compared
to 82.4% at last review and compared to 64.2% at securitization.
The third largest conduit loan is the Pointe Chase Apartments Loan
($22.7 million -- 2%), which is secured by a 519-unit office
building located in the northwest Atlanta suburb of Norcross,
Georgia. The loan is on the master servicer's watchlist due to a
decline in debt service coverage. Moody's LTV is in excess of
100%, similar to last review and compared to 86.2% at
securitization.
LENNOX INTERNATIONAL: S&P Places Ratings on Positive Watch
----------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'BB' corporate credit rating on Lennox International Inc. on
CreditWatch with positive implications.
"The CreditWatch listing reflects the company's continued good
financial performance, which has kept credit measures at a level
that we consider strong for the current rating," said Standard &
Poor's credit analyst Thomas Nadramia.
During 2007, despite modest revenue growth, the Dallas, Texas-
based company's margins have improved as a result of steady price
increases and continued cost control, despite a somewhat
challenging market environment due to the slowdown in the housing
market.
Lennox has well-established brands in its heating, ventilation,
air conditioning, and refrigeration equipment markets.
In resolving its CreditWatch listing, S&P will meet with
management and review its expectations for operational trends and
financial strategies in the near to intermediate term,
particularly with respect to acquisitions and further share
repurchases. If S&P upgrade the company, S&P would likely limit
such a move to one notch.
LEVITT CORP: Homebuilding Unit Defaults on Six Credit Facilities
----------------------------------------------------------------
Levitt Corporation said Monday in a regulatory filing with the
Securities and Exchange Commission that its homebuilding
subsidiary, Levitt and Sons LLC has received separate notices of
default from Wachovia Bank N.A. and KeyBank National Association.
Wachovia Notices of Default
Wachovia had issued Levitt and Sons notices of defaults with
respect to three separate loan facilities.
The first notice of default from Wachovia relates to a
$125,000,000 loan made by Wachovia to Levitt and Sons. The
proceeds of the loan were utilized to fund land acquisition,
development and construction.
The defaults indicated in the first Wachovia notice included that:
(1) liens have been filed upon certain assets pledged as
security for the loan;
(2) Levitt and Sons is experiencing financial difficulties; and
(3) defaults have occurred under other loan facilities of
Levitt and Sons and its subsidiaries with Wachovia.
As of September 30, 2007, the amount advanced under the facility
was $102,351,483. The notice states that until such events of
default are cured, Wachovia will not advance additional amounts
under the facility and will not release any property from its
lien.
The second Wachovia notice of default relates to a $30,000,000
construction loan made by Wachovia to Levitt and Sons and its
wholly owned subsidiaries, Bellaggio by Levitt and Sons LLC and
Levitt and Sons of Manatee County LLC. The proceeds of this loan
were utilized to fund land acquisition, development and
construction.
The defaults indicated in the second Wachovia notice included
that:
(1) the financial projections provided to Wachovia indicate a
general inability of Levitt and Sons and its affiliates to
pay debts as they become due; and
(2) defaults have occurred under other loan facilities of
Levitt and Sons and its affiliates with Wachovia as
indicated in its other notices.
As of Sept. 30, 2007, the amount advanced under the facility was
$9,524,659. The notice states that until such time as the events
of default are cured, Wachovia will not advance any additional
amounts or release any property from its lien.
The third Wachovia notice of default relates to a $26,500,000 loan
made by Wachovia to Levitt and Sons and its wholly owned
subsidiary, Levitt and Sons at World Golf Village, LLC. The
proceeds of this loan were utilized to fund land acquisition,
development and construction.
The third notice of default asserts that the loan matured and
became due on Sept. 29, 2007 and that the failure to pay all
amounts due by October 18, 2007 constituted an event of default
under the loan. The notice also states that after October 18,
interest will accrue at the default rate and that Wachovia
reserves the right to collect the amounts due together with its
collection and enforcement expenses. As of Sept. 30, 2007, the
amount advanced under the facility was $8,592,737.
KeyBank Notice of Default
KeyBank issued Levitt and Sons a notice of default regarding a
$125,000,000 Revolving Land Acquisition, Development and
Residential Construction Borrowing Base Facility. At Sept. 30,
2007, $95,232,781 was outstanding under the facility. Amounts
outstanding are guaranteed by certain of Levitt and Sons'
subsidiaries. The event of default stated in the notice was the
failure to pay interest when due. KeyBank has demanded payment of
all outstanding and delinquent amounts by Oct. 25, 2007.
Two More Defaults
George P. Scanlon, Levitt Corporation's chief financial officer,
discloses that although they have not received any other formal
notices of default, Levitt and Sons and its subsidiaries are also
not in compliance with their obligations under loan facilities
with Bank of America and Regions Bank.
According to Mr. Scanlon, Levitt and Sons failed to make required
payments and/or maintain required development activity under the
loans.
Proceeds from both loans were utilized to fund land acquisition,
development and construction at various of Levitt and Sons'
projects in Florida and Tennessee, he says.
Unit Mulls Talks with Lenders
Mr. Scanlon notes that Levitt and Sons is not currently in a
position to cure any defaults which may arise, however, it is
pursuing negotiations with its principal lenders to obtain
meaningful concessions or agreements to restructure its
outstanding indebtedness and has ceased making interest payments
as of Oct. 10, 2007.
Levitt Corporation has also previously indicated that it would not
make any additional material advances to Levitt and Sons unless
Levitt and Sons obtains acceptable concessions or restructuring
agreements with its principal lenders, Mr. Scanlon adds.
The company warns that the defaults, if not addressed, would
entitle the respective lenders to exercise any and all remedies
available to them under the respective loan documents, including,
without limitation, acceleration of the entire amount of the
respective loans, commencement of foreclosure proceedings against
the assets securing the respective loans and other appropriate
action against the respective borrowers and guarantors.
About Levitt Corp.
Fort Lauderdale, Fla.-based, Levitt Corp. --
http://www.levittcorporation.com/-- together with its
subsidiaries, operates as a homebuilding and real estate
development company in the southeastern United States. The
company operates in two divisions, Homebuilding and Land. The
Homebuilding division primarily develops single and multi-family
homes for adults and families in Florida, Georgia, Tennessee, and
South Carolina. The Land division engages in the development of
master-planned communities in Florida and South Carolina. It
engages in the acquisition of large tracts of raw land; planning,
entitlement, and infrastructure development; the sale of entitled
land and/or developed lots to homebuilders and commercial,
industrial, and institutional end-users; and the development and
leasing of commercial space to commercial, industrial, and
institutional end-users.
LONG BEACH: S&P Cuts Rating to B and Removes Negative Watch
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class M-1
from Long Beach Mortgage Loan Trust 2000-1 to 'B' from 'A' and
removed it from CreditWatch with negative implications. The
lowered rating is due to the deterioration of credit support as of
the September 2007 remittance period. While the pool has paid
down to 4.41% of its original principal balance, it continues to
incur significant losses every month, eroding available credit
support to class M-1. The deal has incurred $64.18 million in
cumulative losses, or 6.42% of the original principal balance.
While serious delinquencies (90-plus days, foreclosures, and REOs)
for this transaction are 16.74% of the current pool balance, the
six-month average monthly net loss is approximately $349,618,
while the 12-month average monthly net loss amount is
approximately $417,689. Class M-1 is supported by the defaulted
M-3 class and the 'CCC' rated M-2 class. There is currently no
overcollateralization in this transaction, and monthly net losses
continue to outpace excess interest. The transaction consists
primarily of first-lien, adjustable- and fixed-rate residential
mortgage loans originated or acquired by Long Beach Mortgage Co.
LSI CORP: Completes $450MM Cash Sale of Mobility Products Biz
-------------------------------------------------------------
LSI Corporation has completed the sale of its mobility products
business to Infineon Technologies AG for $450 million in cash,
plus a performance-based payment of up to $50 million payable in
the first quarter of 2009.
As reported in the Troubled Company Reporter on Aug. 22, 2007,
LSI signed a definitive agreement to sell its mobility products
business to Infineon Technologies. The sale is the result of a
strategic review within LSI of its business portfolio after its
merger with Agere Systems on April 2, 2007.
Under terms of the agreement, Infineon will purchase the LSI
Mobility Products Group, which employs 700 people worldwide,
designs semiconductors and software for cellular telephone
handsets and complete chip-level solutions for satellite digital
audio radio applications.
LSI will use the proceeds from this transaction to fund the stock
repurchase program and potential future strategic acquisitions in
the storage and networking spaces.
About Infineon Technologies AG
Headquartered in Munich, Infineon Technologies AG (NYSE: IFX; FSE)
-- http://www.infineon.com/-- designs, develops, manufactures and
markets a range of semiconductors and systems solutions used in
computer systems, telecommunications systems, consumer goods,
automotive products, industrial automation and control systems,
and chip card applications.
About LSI Corporation
Headquartered in Milpitas, California, LSI Corporation (NYSE:LSI)
fka LSI Logic Corporation -- http://www.lsi.com/-- designs,
develops and markets complex, high-performance semiconductors and
storage systems. The company is a provider of silicon-to-system
solutions. It offers a portfolio of semiconductors, including
custom and standard product integrated circuits, for use in
consumer applications, high-performance storage controllers,
enterprise hard disk controllers and a range of communication
devices. The company also offers external storage systems and
software applications for storage area networks. The company
operates in two segments: the Semiconductor segment and the
Storage Systems segment. The company's products are marketed to
original equipment manufacturers that sell products to its target
markets.
* * *
As reported in the Troubled Company Reporter on Oct. 15, 2007,
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating and other ratings on LSI Corp. and revised the
outlook to stable from positive.
MARK MAUERSBERGER: Case Summary & Two Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Mark D. Mauersberger
Tina I. Mauersberger
1919 Corinth Drive
Sun Prairie, WI 53590
Bankruptcy Case No.: 07-14157
Chapter 11 Petition Date: October 23, 2007
Court: Western District of Wisconsin
Judge: Robert D. Martin
Debtor's Counsel: J. David Krekeler, Esq.
15 North Pinckney Street
P.O. Box 828
Madison, WI 53701-0828
Tel: (608) 258-8555
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's list of its Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
----------- --------------- ------------
Internal Revenue Service Personal income $36,000
Insolvency Unit tax
MAIL STOP 5301-MIL
211 West Wisconsin Avenue
Milwaukee, WI 53203-2221
Wisconsin Department of Personal income $4,830
Revenue tax
Special Procedures
Unit 5-77 Mail Stop
P.O. Box 8901
Madison, WI 53708-8901
MASSACHUSETTS DEV'T: Improved Financial Cues S&P to Lift Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating to 'BB+' from
'BB' on the $15 million, series 1998 revenue bonds issued by
Massachusetts Development Finance Agency for New England Center
for Children. The raised rating reflects sustained improvement in
NECC's financial profile, highlighted by solid operating margins
and better balance sheet measures. The outlook is stable.
"The rating action resulted from NECC's positive operating and
excess income," said Standard & Poor's credit analyst Antoinette
Maxwell. "NECC also posts adequate coverage of maximum annual
debt service."
NECC's revenue base has grown to $40 million in fiscal 2007 from
$29 million in 2002. Operations reflect positively with operating
income and excess income of $940,000 (a 2.3% margin) and $3.6
million (a 9.1% margin) for unaudited fiscal year ended June 30,
2007. Excess income includes campaign contributions of $2.4
million. NECC's balance sheet measures have improved: In fiscal
2007, long-term debt to capitalization is moderately high at 49%
but has improved from a high of 76% in fiscal 2003. NECC shows
only 49 days' cash in 2007, but days' cash has improved from a
very low 24 days in fiscal 2004. NECC's coverage of maximum
annual debt service excluding contributions is adequate at 1.8x.
NECC is a not-for-profit human service provider that offers
treatment primarily for children who are severely affected with
autism, mental retardation, and other serious behavior disorders.
MASTR ALTERNATIVE: S&P Junks Rating on Class B-5 Certificates
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B-5 mortgage pass-through certificates from MASTR Alternative Loan
Trust 2004-6 to 'CCC' from 'B'. At the same time, S&P affirmed
its ratings on the remaining 20 classes from this series.
The downgrade of class B-5 reflects collateral performance that
has eroded available credit support during recent months. Current
credit support is 0.16% of the current pool balance, and future
credit support is projected to be significantly lower than the
original credit support of 0.20%. As of the
September 2007 remittance period, cumulative losses were
approximately $733,552, or 0.11% of the original principal
balance. Total delinquencies were 2.87% of the current pool
balance, and severe delinquencies (90-plus days, foreclosures, and
REOs) were 0.88%.
The affirmations reflect current and projected credit support
percentages that are sufficient to support the certificates at
their current rating levels.
Subordination provides primary credit support for this
transaction. The underlying collateral backing the certificates
consists of Alt-A fixed-rate mortgage loans secured by first liens
on primarily one- to four-family residential properties with
original terms to maturity of 30 years or less.
Rating Lowered
MASTR Alternative Loan Trust 2004-6
Mortgage pass-through certificates
Rating
------
Class To From
----- -- ----
B-5 CCC B
Ratings Affirmed
MASTR Alternative Loan Trust 2004-6
Mortgage pass-through certificates
Class Rating
----- ------
1-A-1, 1-A-2, 2-A-1, 3-A-1, 4-A-1, 5-A-1 AAA
6-A-1, 7-A-1, 8-A-1, 9-A-1, 10-A-1 AAA
15-PO, 30-PO, 15-A-X, 30-AX-1, 30-AX-2 AAA
B-1 AA
B-2 A
B-3 BBB
B-4 BB
MAXTOR CORP: Fitch Affirms BB Sub. Debentures Rating
----------------------------------------------------
Fitch Ratings affirmed Seagate Technology HDD Holdings ratings as:
-- Issuer default rating at 'BBB-';
-- Senior unsecured debt at 'BBB-';
-- Unsecured credit facility at 'BBB-'.
In addition, Fitch has affirmed these ratings for Maxtor
Corporation, which Seagate Technology acquired on May 19, 2006:
-- Issuer default rating at 'BBB-';
-- Senior unsecured debt at 'BBB-';
-- Subordinated debentures at 'BB'.
The debt of Seagate HDD and Maxtor, wholly-owned subsidiaries of
Seagate, is irrevocably fully and unconditionally guaranteed by
Seagate. About $2.6 billion of total debt is affected by Fitch's
action, including an undrawn $500 million revolving credit
facility. The Rating Outlook is Stable.
The ratings are supported by these factors:
-- Broad product portfolio with industry leading technology
resulting in leading market share in the HDD industry
overall for the past five years with leadership positions
currently in three of the four HDD categories, consisting
of desktop, enterprise and consumer electronics, and
continued share gains in the mobility category;
-- Solid credit metrics and liquidity;
-- Consistent operating profits despite industry challenges
due to the company's significant scale and vertically
integrated business model, which reduces per unit
manufacturing costs; and
-- Continued strong unit demand led by expanding consumer
storage requirements for managing digital rich media on a
broad array of devices equipped with hard disk drives.
In addition, enterprise demand remains solid, especially
for companies that manage digital rich media for consumer
markets.
Fitch's rating concerns consist of:
-- Potential for additional debt-financed shareholder
repurchases or acquisitions. However, Seagate's credit
agreement limits additional debt issuance to 10% of
consolidated total assets as of the latest completed
fiscal year, which equates to $950 million;
-- Consistent pricing pressure due to intense competition,
commoditization of certain HDDs and generally low
switching costs, especially in the desktop computer
market;
-- Potential long-term threat of technology substitution for
certain product areas if NAND flash memory capacity
expands significantly and the cost disadvantage relative
to HDD declines materially; and
-- Seagate's high fixed cost structure due to capital
expenditure and research and development requirements
associated with a vertically integrated business model.
Total liquidity as of Sept. 28, 2007 was about $2 billion,
consisting of about $1.5 billion of cash and an undrawn
$500 million revolving line of credit due 2011. Furthermore,
liquidity is supported by annual free cash flow (cash flow from
operations less capital expenditures and dividends) that averaged
nearly $245 million from fiscal 2005 to 2007.
However, fiscal 2007 free cash flow was negative $175 million
(positive $37 million excluding dividends) due to the combination
of greater-than-normal pricing pressures and expenses associated
with the integration of Maxtor. Fitch expects significant free
cash flow improvement in fiscal 2008
as a result of continued solid industry demand, strengthening
profit margins attributable to an improving pricing environment
and Seagate's ability to leverage the additional scale provided by
the successful integration of Maxtor.
Seagate's interest coverage (operating EBITDA/ interest expense)
declined year-over-year as expected to 15x for the latest 12
months ended Sept. 28, 2007 from nearly 32x as a result of a $1.5
billion net increase in debt in the fiscal first quarter of 2007,
the proceeds of which were utilized for share repurchases.
However, leverage (debt/ operating EBITDA) declined to 1x as of
Sept. 28, 2007, down from 1.6x in the year-ago period, due to
strong revenue growth, profit margin expansion and $400 million of
debt reduction.
As of Sept. 28, 2007, total debt was nearly $2.1 billon,
consisting of:
-- $300 million of floating rate senior notes due Oct. 2009
(Seagate HDD);
-- $600 million of 6.375% senior notes due Oct. 2011
(Seagate HDD);
-- $600 million of 6.8% senior notes due Oct. 2016 (Seagate
HDD);
-- $326 million of 2.375% convertible senior notes due 2012
(Maxtor), which are currently eligible for conversion at
the holders' option on a net cash basis, whereby the
principal amount will be paid in cash upon conversion and
the excess of the conversion value over the principal
amount can be paid in either cash or stock at the
company's election;
-- $136 million of 6.8% convertible senior notes due 2010
(Maxtor);
-- $50 million of 5.75% subordinated debentures due 2012
(Maxtor); and
-- $60 million drawn from a Bank of China credit line
(Maxtor).
MEDISCIENCE TECH: Aug. 31 Balance Sheet Upside-Down by $2.7 Mil.
----------------------------------------------------------------
Mediscience Technology Corp.'s consolidated balance sheet at
Aug. 31, 2007, showed $1.1 million in total assets and
$3.8 million in total liabilities, resulting in a $2.7 million
total shareholders' deficit.
The company's consolidated balance sheet at Aug. 31, 2007, also
showed strained liquidity with $626,786 in total current assets
available to pay $3.8 million in total current liabilities.
The company reported a net loss of $1.2 million for the second
quarter ended Aug. 31, 2007, compared with a net loss of $712,754
in the same period ended Aug. 31, 2006.
The company had no revenues during the six months ending Aug. 31,
2007 and Aug. 31, 2006.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2007, are available for
free at http://researcharchives.com/t/s?247c
Going Concern Doubt
Morison Cogen LLP, in Bala Cynwyd, Pennsylvania, expressed
substantial doubt about Mediscience Technology Corp.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended Feb. 28,
2007 and 2006. The auditing firm reported that the company has no
revenues, incurred significant losses from operations, has
negative working capital and an accumulated deficit.
About Mediscience Technology
Headquartered in Cherry Hill, New Jersey, Mediscience Technology
Corp. (OBB: MDSC.OB) -- http://medisciencetech.com/-- is
principally engaged in the design, development, marketing, and
licensing of medical diagnostic instruments that detect cancer in
humans through the utilization of ultra violet light. The
company has successfully conducted certain preclinical and
clinical evaluations.
MERITAGE MORTGAGE: S&P Junks Ratings on Two Certificate Classes
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on eight
classes of mortgage-backed securities issued by Meritage Mortgage
Loan Trust 2004-1. At the same time, S&P removed the ratings on
four of these classes from CreditWatch with negative implications.
Concurrently, S&P affirmed its rating on the remaining class from
this transaction.
The downgrades of classes M-2, M-3, M-4, M-5, M-6, M-7, and M-8
reflect a high amount of severe delinquencies (90-plus days,
foreclosures, and REOs) and a reduction in credit enhancement as a
result of monthly realized losses. Monthly realized losses have
consistently exceeded excess interest during the past six months.
As of the September 2007 remittance date, the average monthly loss
outpaced excess interest by an average of approximately 2.9x over
the same period. S&P downgraded class B-1 to 'D' because
overcollateralization has been depleted and the class incurred a
principal write-down of $120,425 during the September remittance
period.
The affirmation of the 'AA' rating on class M-1 reflects
sufficient credit enhancement for the current rating. This class
has actual and projected credit support amounts that are in line
with their original levels.
Subordination, overcollateralization, and excess spread provide
credit support for this transaction. The collateral consists
primarily of fixed- and adjustable-rate, fully amortizing, and
balloon payment mortgage loans secured by first liens on one- to
four-family residential properties.
Ratings Lowered and Removed from Creditwatch Negative
Meritage Mortgage Loan Trust 2004-1
Rating
------
Class To From
----- -- ----
M-5 B+ A-/Watch Neg
M-6 B BB/Watch Neg
M-7 CCC B/Watch Neg
M-8 CCC B-/Watch Neg
Ratings Lowered
Meritage Mortgage Loan Trust 2004-1
Rating
------
Class To From
----- -- ----
M-2 A- AA-
M-3 BBB+ A+
M-4 BB A
B-1 D CCC
Rating Affirmed
Meritage Mortgage Loan Trust 2004-1
Class Rating
----- ------
M-1 AA
METHANEX CORP: Earns $23.61 Million in Third Qtr. Ended Sept. 30
----------------------------------------------------------------
For the third quarter of 2007, Methanex Corp. realized net income
of $23.61 million, as compared with a net income of $113.23
million for the third quarter of 2006. Revenues for the third
quarter ended Sept. 30, 2007, and 2006, were $395.11 million and
$519.58 million, respectively. For the third quarter of 2007,
realized adjusted EBITDA of $68.6 million, as compared with
Adjusted EBITDA of $76.5 million for the second quarter of 2007.
As of Sept. 30, 2007, the company's balance sheet showed total
assets of $2.46 billion total liabilities of $1.25 billion and
total stockholders' equity of $1.21 billion.
Bruce Aitken, president and chief executive officer of Methanex,
commented, "With lower production and a slightly lower methanol
price environment, we realized similar Adjusted EBITDA in the
third quarter compared to the second quarter. Prices have
recently increased significantly. A large number of outages in
the industry during the quarter, including our own facility in
Chile, combined with continuing strong demand, caused a severe
shortage of methanol to occur near the end of the quarter.
Contract methanol prices have risen sharply in October and our
average non-discounted prices for October are approximately
$550/tonne."
Mr. Aitken continued, "Our biggest area of disappointment during
the quarter was the continued curtailment of Argentinean natural
gas supply to our plants in Chile. Our expectation was that
natural gas supply from Argentina would be restored during the
third quarter as cold winter conditions ended and gas demand in
Argentina was reduced; however, this has not yet occurred and we
continue to be limited to operating only one plant in Chile. We
are in continuing discussions with our Argentinean natural gas
suppliers and various governmental authorities to resolve the
situation, and continue to be optimistic that we will have some
natural gas supply restored from Argentina which will enable us to
increase production in Chile and provide much needed product to
the market."
Mr. Aitken added, "Developments regarding incremental natural gas
supply from Chile have been positive. Our natural gas suppliers
in Chile, ENAP and GeoPark, have recently increased natural gas
deliveries to our plant and both have announced commercial
discoveries of natural gas near our plants as a result of their
ongoing exploration activities. In addition, the Chilean
government just announced that it has received fourteen bids for
nine natural gas exploration blocks near our plants and that the
blocks will be awarded in mid-November."
Mr. Aitken concluded, "With $132 million in cash flow from
operations after changes non-cash working capital generated during
the third quarter, we continue to be in a very strong financial
position to meet the financial requirements related to our
methanol project in Egypt, pursue opportunities to accelerate
natural gas development in southern Chile, pursue other strategic
growth initiatives, and continue to deliver on our commitment to
return excess cash to shareholders."
Liquidity and Capital Resources
Cash flows from operating activities before changes in non-cash
working capital in the third quarter of 2007 were $60 million
compared with $162 million for the same period in 2006. This
decrease was primarily due to lower earnings. During the third
quarter of 2007, our non-cash working capital decreased and this
increased its cash flow from operating activities by $73 million.
The decrease in its non-cash working capital was primarily due to
lower inventory levels and lower trade receivables.
At Oct. 24, 2007, the company had 99,167,479 common shares issued
and outstanding and stock options exercisable for 1,057,891
additional common shares.
During the third quarter of 2007, the company repurchased for
cancellation a total of 1.7 million common shares at an average
price of $24.02 per share, totaling $41 million, under a normal
course issuer bid that expires May 16, 2008. At Sept. 30, 2007,
the company has repurchased a total of 2.9 million common shares
of the maximum allowable under this bid of 8.7 million common
shares.
During the third quarter of 2007 the company paid a quarterly
dividend of $0.14 per share, or $14 million.
About Methanex
Vancouver-based Methanex Corp. (Toronto: MX) (NASDAQGM: MEOH) --
http://www.methanex.com/-- produces and markets methanol
worldwide. The company's stock also trate on foreign securities
market of the Santiago Stock Exchange in Chile under the trading
symbol "Methanex".
* * *
Moody's Investor Services' credit ratings for the company's
unsecured notes at Sept. 30, 2007, is Ba1. The outlook is stable.
MOBILE MINI: Expects to Report 3rd Qtr. Revenues of $83.5 Million
-----------------------------------------------------------------
Mobile Mini, Inc. reported Monday its preliminary financial
results for the third quarter ended Sept. 30, 2007, noting that it
expects to report total revenues and lease revenues of
approximately $83.5 million and $74.0 million, respectively.
These revenues are expected to result in EBITDA of between
$32.5 million and $33.0 million. The company plans to announce
its full financial results for the third quarter on Thursday,
November 1, before the markets open.
Mobile Mini pointed out that while lease revenues were within the
range provided by management on Aug. 7, 2007, albeit at the lower
end, EBITDA and diluted earnings per share are expected to fall
below the range previously provided. The primary reasons are
higher than expected fleet repair and maintenance expense and
costs incurred in connection with reducing the scope of certain
U.S. manufacturing operations in light of slower growth rates this
year. Mobile Mini noted that the slower growth continues to be
limited to certain geographic locations and that its European
operations have continued to achieve exceptional growth.
Based on the third quarter 2007 preliminary results, the company
is revising its guidance for the quarter ended Dec. 31, 2007. The
company now expects that it will generate lease revenues in the
$75.5 million to $76.0 million range, EBITDA of $32.5 million to
$33.5 million and diluted earnings per share of $0.34 to $0.36
during that quarter.
Steven Bunger, chairman, president & chief executive noted, "Our
fundamental business model remains intact. While our growth rate
has slowed, it remains in double digits. Furthermore, we continue
to gain market share and are not seeing any signs of serious price
competition nor yield erosion. We will have more to say about
current business conditions on November 1st.
Separately, Mobile Mini announced that it has repurchased 324,553
shares of its common stock since August 2007 when the Board of
Directors authorized the program to repurchase up to $50 million
of common stock. As of Sept. 30, 2007, approximately
$42.3 million of repurchase authority remains unused. Management
is prepared to purchase additional shares in open market purchases
or in privately negotiated transactions utilizing available
working capital to fund such purchases.
About Mobile Mini
Based in Tempe, Arizona, Mobile Mini Inc. (Nasdaq: MINI) --
http://www.mobilemini.com/-- provides portable storage solutions
through its total fleet of over 162,000 portable storage units and
portable offices with 64 branches in U.S., United Kingdom, Canada
and The Netherlands.
* * *
As of Oct. 24, 2007, the company holds Moody's Ba3 long-term
corporate family rating and B1 senior unsecured debt rating. The
outlook is positive.
Standard & Poor's also rates the company's long-term foreign and
local issuer credits at BB with a positive outlook.
MORGAN STANLEY: Fitch Affirms CCC Rating on Class M Certificates
----------------------------------------------------------------
Fitch Ratings affirmed Morgan Stanley's commercial mortgage pass-
through certificates, series 1998-HF2, as:
-- $371.5 million class A-2 at 'AAA';
-- Interest only class X at 'AAA';
-- $52.9 million class B at 'AAA';
-- $52.9 million class C at 'AAA';
-- $58.2 million class D at 'AAA';
-- $21.2 million class E at 'AAA';
-- $23.8 million class F at 'AAA';
-- $18.5 million class G at 'AA-';
-- $10.6 million class H at 'A';
-- $21.2 million class J at 'BBB-'
-- $10.6 million class K at 'BB';
-- $15.9 million class L at 'B-';
-- $10.6 million class M at 'CCC/DR3'.
Fitch does not rate the $0.6 million class N certificates. Class
A-1 has been paid in full.
The affirmations are warranted due to the high concentration of
loans with declining occupancy or a debt service coverage ratio
less than 1 times, and the increased refinance risk due to 127 of
the 132 non-defeased loans maturing in 2008.
As of the October 2007 distribution report, the pool's aggregate
certificate balance has been reduced 37% to $668.3 million from
$1.1 billion at issuance. In total forty-six loans (28%) have
defeased, 13 loans (13%) since the last Fitch review.
Currently there are 17 Fitch loans of concern (12%), including the
third largest loan in the transaction (2.9%). The Regal Business
Center is comprised of nine buildings totaling 1,133,761 square
feet of industrial/warehouse space in Arlington, Texas. The
servicer reported combined occupancy for the Center is 67% as of
July 2007.
There are no delinquent or specially serviced loans.
MORGAN STANLEY: Fitch Junks Ratings on Two Cert. Classes
--------------------------------------------------------
Fitch Ratings took rating actions on these Morgan Stanley 2006-5AR
transaction:
Series 2006-5AR
-- 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 downgraded to 'A' from 'A+';
-- Class M-5 downgraded to 'A-' from 'A';
-- Class M-6 downgraded to 'A-' from 'A';
-- Class M-7 downgraded to 'BBB+' from 'A-';
-- Class M-8 downgraded to 'BBB-' from 'BBB+';
-- Class M-9 downgraded to 'BB' from 'BBB';
-- Class B-1 downgraded to 'C/DR4' from 'BB';
-- Class B-2 downgraded to 'C/DR5' from 'B'.
The mortgage loans consist of fixed- and adjustable- rate loans,
extended to Alt-A borrowers and are secured by first liens,
primarily on one- to four-family residential properties. As of the
September 2007 distribution date, the transaction is seasoned 18
months and the pool factor (current mortgage loan principal
outstanding as a percentage of the initial pool) is 71%. The
loans are master serviced by Wells Fargo (rated 'RMS1' by Fitch)
The affirmations reflect a stable relationship between credit
enhancement and future loss expectations and affect approximately
$373 million of outstanding certificates. The downgrades reflect
deterioration in the relationship between CE and loss expectations
and affect $19.3 million in outstanding certificates.
MORRIS PUBLISHING: Inks $115 Million Deal with Gatehouse Media
--------------------------------------------------------------
GateHouse Media Inc. has signed a definitive asset purchase
agreement to acquire several daily and non-daily publications from
Morris Publishing Group for a purchase price of $115 million.
The transaction is expected to close before the end of November
and is subject to regulatory approval and customary closing
conditions.
The publications to be acquired are located in South Dakota,
Florida, Kansas, Michigan, Missouri, Nebraska, Oklahoma and
Tennessee.
"This is an excellent acquisition opportunity for GateHouse," Mike
Reed, chief executive officer of GateHouse, said. "These are
strong local media franchises in small markets, many of which are
near existing GateHouse properties and offer compelling synergy
opportunities. We are also enthusiastic about the acquisition
from a financial standpoint as we expect these assets to generate
an incremental $14 million of Adjusted EBITDA."
About GateHouse Media
Headquartered in Fairport, New York, GateHouse Media Inc. (NYSE:
GHS) -- http://www.gatehousemedia.com/-- is a publisher of
locally based print and online media in the U.S. as measured by
its 87 daily publications. The company currently serves local
audiences of more than 10 million per week across 20 states
through hundreds of community publications and local websites.
About Morris Publishing Group LLC
Headquartered in Augusta, Georgia, Morris Publishing Group LLC --
http://www.morris.com/-- is a private company. The company is a
wholly owned subsidiary of Morris Communications Company LLC.
Morris Publishing consists of 26 daily and 12 non-daily
newspapers, four city magazines and other free publications in the
United States. The Company's newspapers are The Florida Times-
Union, Jacksonville, Florida; The Augusta Chronicle, Georgia; The
Topeka Capital-Journal, Kansas; Savannah Morning News, Georgia;
Lubbock Avalanche-Journal, Texas, and Amarillo Globe-News, Texas,
which account for approximately 67% of its daily circulation.
Morris Publishing also prints and distributes periodical
publications and operates commercial printing operations. Its
newspapers serves mid-sized to small communities in Florida,
Georgia, Texas, Kansas, Nebraska, Oklahoma, Michigan, Missouri,
Minnesota, Alaska, Arkansas, South Dakota, Tennessee and South
Carolina.
* * *
Moody's Investor Service placed Morris Publishing Group LLC's
probability of default rating at 'Ba3' and bank loan debt rating
at 'Ba1' in September 2006. The outlook is stable. The
ratings still hold to date.
MORTGAGE ASSET: Fitch Cuts Class M-11 Certs.' Rating to BB
----------------------------------------------------------
Fitch Ratings took these rating action on Mortgage Asset
Securitization Transactions Asset Back Securities Trust series
2004-HE1:
Series 2004-HE1
-- Classes A-1 & A-4 affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 affirmed at 'AA+';
-- Class M-4 affirmed at 'AA+';
-- Class M-5 affirmed at 'AA';
-- Class M-6 affirmed at 'AA-';
-- Class M-7 affirmed at 'A+';
-- Class M-8 affirmed at 'A';
-- Class M-9 affirmed at 'BBB+';
-- Class M-10 affirmed at 'BBB';
-- Class M-11 downgraded to 'BB' from 'BBB-'.
The affirmations, affecting about $126 million of the outstanding
certificates, are taken as a result of a stable relationship
between credit enhancement and expected loss. The downgrade,
affecting about $4 million of the outstanding certificates, is
taken as a result of deterioration in the relationship between CE
and expected loss. Losses have exceeded excess spread for nine of
the last 12 months and as a result, the overcollateralization
amount has fallen below its target.
As of the September 2007 remittance date, the transaction is
seasoned 36 months and the pool factor is 20%. The series has
serious delinquencies (loans delinquent more than 60 days,
inclusive of loans in foreclosure, bankruptcy, and real estate
owned) of 12.03% and has experienced 0.64% of loss (as a
percentage of the original pool balance).
The collateral of the above transaction primarily consists of
conforming and non-conforming, fixed-rate and adjustable-rate
subprime mortgage loans secured by first and second liens on
residential properties. The mortgages collateralizing the series
were originated by various originators and, at issuance, over 68%
of the mortgages were covered by deep mortgage insurance policies
provided by Mortgage Guaranty Insurance Corp. The transaction is
master serviced by Wells Fargo Home Mortgage Inc. (rated 'RPS1' by
Fitch).
MOSAIC CO: Prepays $150 Mil. of Credit Facility on October 29
-------------------------------------------------------------
The Mosaic Company is notifying the lenders under its senior
secured bank credit facility of its election to prepay
$150 million principal amount of term loans under the Facility on
Oct. 29, 2007.
The prepayments will consist of:
-- $56.4 million principal amount of Term Loan A-1
borrowings;
-- $87.1 million principal amount of Term Loan B borrowings
by Mosaic; and
-- $6.5 million principal amount of Term Loan A borrowings
by its subsidiary, Mosaic Potash Colonsay ULC.
After the prepayments, outstanding term loans under the Facility
will be reduced to $8.7 million principal amount of Term Loan A
borrowings, $75.6 million principal amount of Term Loan A-1
borrowings, and $116.7 million principal amount of Term Loan B
borrowings.
The prepayments are being made from available cash generated by
the ongoing business operations of Mosaic and its subsidiaries.
Mosaic considers the prepayments to be a significant step in its
plan to reduce outstanding borrowings, strengthen its balance
sheet, and achieve investment grade credit ratings.
About The Mosaic Company
Headquartered in Plymouth, Minnesota, The Mosaic Company (NYSE:
MOS) -- http://www.mosaicco.com/-- is a producer and marketer of
concentrated phosphates and potash crop nutrients. For the
agriculture industry, Mosaic is a single source of phosphates,
potash, nitrogen fertilizers and feed ingredients.
* * *
As reported in the Troubled Company Reporter on Oct. 9, 2007,
Moody's upgraded The Mosaic Company's corporate family rating to
Ba1 from Ba3.
MOVIE GALLERY: Can File Statements and Schedules on November 30
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
extended, until Nov. 30, 2007, the deadline in which Movie
Gallery, Inc. and its debtor-affiliates can file their financial
statements and schedules with the Court.
Pursuant to Section 521 of the Bankruptcy Code, a Chapter 11
debtor must file, no later than 15 days after its petition date, a
list of creditors, its schedules of assets and liabilities, a
schedule of current income and expenditures, a schedule of
executory contracts and unexpired leases and a statement of
financial affairs.
The Debtors reasoned that because of the size and complexity of
the Debtors' operations, and the time required to compile the
needed information, an extension of time to file the statements
and schedules is necessary and appropriate.
William C. Kosturos, managing director at Alvarez & Marsal North
America LLC, and chief restructuring officer of Movie Gallery,
Inc., reminds the Court that the Debtors are the second largest
North American home entertainment specialty retailer. According
to Mr. Kosturos, the Debtors estimate they have more than 100,000
creditors and other parties-in-interest, and preparing their
statements and schedules accurately will require significant
attention from the Debtors' personnel and advisors.
Moreover, Mr. Kosturos maintains that without an extension of
time, preparation of the statements and schedules will distract
attention from the Debtors' business operations, at a critical
time when the business can ill afford any disturbance.
The Court also authorizes the U.S. Trustee to schedule the
meeting with creditors, pursuant to Section 341, more than 40
days following the date of bankruptcy filing, notwithstanding
Bankruptcy Rule 2003(a) and (b), to the extent necessary.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment specialty
retailer. The company owns and operates 4,600 retail stores that
rent and sell DVDs, videocassettes and video games.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, serve as the Debtors' local counsel. The Debtors'
claims & balloting agent is Kutzman Carson Consultants LLC. An
Official Committee of Unsecured Creditors has been appointed by
the U.S. Trustee for Region 4.
When the Debtors' filed for protection from their creditors, they
listed total assets of $891,993,000 and total liabilities of
$1,419,215,000. (Movie Gallery Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Wells Fargo Can File One Master Proof of Claim
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
authorized Wells Fargo Bank, N.A., as successor administrative
agent and collateral agent under the Second Lien Credit and
Guaranty Agreement, to file one master proof of claim on behalf of
each of the lenders pursuant to the Second Lien Credit Agreement.
This is pursuant to the claims bar date order on Oct. 18, 2007,
wherein all creditors holding claims against Movie Gallery, Inc.
and its debtor-affiliates must file their proofs of claim on or
before Jan. 25, 2008.
The Court clarified, "The filing of a Master Proof of Claim are
intended solely for the purpose of administrative convenience and
shall not affect the right of any Existing Second Lien Lender to
vote separately on any plan or plans of reorganization proposed in
the chapter 11 cases of the Debtors or the right of any party in
interest to request further information."
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment specialty
retailer. The company owns and operates 4,600 retail stores that
rent and sell DVDs, videocassettes and video games.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, serve as the Debtors' local counsel. The Debtors'
claims & balloting agent is Kutzman Carson Consultants LLC. An
Official Committee of Unsecured Creditors has been appointed by
the U.S. Trustee for Region 4.
When the Debtors' filed for protection from their creditors, they
listed total assets of $891,993,000 and total liabilities of
$1,419,215,000. (Movie Gallery Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Court OKs Sale of 508 Leases & Designation Rights
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
gave authority to Movie Gallery, Inc. and its debtor-affiliates to
auction off 508 store leases and lease designation rights
associated with those leases.
The Court also approved competitive bidding procedures for the
disposition of the Debtors' interests in the leases.
On Sept. 25, 2007, the Debtors announced the closure of roughly
520 store locations. Each of the Phase 1 Locations is subject to
lease agreements with varying terms and varying durations. The
Debtors are currently conducting store closing sales at these
locations to liquidate inventory, fixtures and equipment, and
they do not intend to conduct any business at the Phase 1
Locations following the store closing sales.
The Debtors have examined the costs associated with their
obligation to pay rent at the Phase 1 Locations, and estimate
that the annual rental cost of the Phase 1 Locations is roughly
$69,400,000 per year. In addition to their obligations to pay
rent at the Phase 1 Locations, the Debtors are also obligated to
pay certain real estate taxes, utilities, insurance and other
related charges associated with such Leases.
In their reasonable business judgment, the Debtors determined
that the costs, with the concomitant costs of operating the
locations, constitute an unnecessary drain on their resources.
The Debtors do not intend to sell off 12 of the Leases associated
with the Phase 1 Locations as they have no significant value,
particularly when compared with the costs the Leases would impose
on the Debtors' estates. The Debtors are seeking to reject the
12 Leases in a separate request filed with the Court.
The Designation Rights will consist of the right to compel the
Debtors to assume and assign one or more of the Leases to a party
designated by the holder of a Designation Right.
Any potential bidder must submit a written bid and other required
bid documents, including a check deposit equal to 10% of the bid
amount or $5,000 for each lease the bidder seeks to acquire. All
bids are due Nov. 12, 2007. The Bid Deadline may be extended
by the Debtors in their sole discretion.
The Debtors will hold the Auction Nov. 15, 2007. The Auction
may be adjourned from time to time.
The Debtors will enter into sale agreements with non-Landlords
who will be chosen as having submitted the highest or otherwise
best bid for a Lease or group of Leases. The Debtors will enter
into lease termination agreements with with Landlords that will
win the bidding for a Lease or group of Leases.
The Debtors intend to reject (a) any or all of the Leases that,
in their reasonable business judgment, are unlikely to realize
any value at the Auction and (b) those Leases that are not
actually sold pursuant to the Auction.
The Court will convene a hearing Nov. 28, 2007, at 10:00 a.m.
(prevailing Eastern Time), to consider approval of any sale
agreements, the sale of designation rights, or any lease
termination agreements. Objections, if any, are due
Nov. 26, 2007.
The Debtors will serve notice to the Landlords of the potential
disposition of the Leases. The Notice of Disposition will
identify, among other things, the Debtors' proposed cost to cure
any defaults under the Leases. Any objection to the proposed
Cure Amounts must be filed by Nov. 2, 2007.
The Debtors will undertake substantial marketing efforts prior to
the Auction with the assistance of their advisors, Keen
Consultants, the real estate division of KPMG Corporate Finance
Realty LLC.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment specialty
retailer. The company owns and operates 4,600 retail stores that
rent and sell DVDs, videocassettes and video games.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, serve as the Debtors' local counsel. The Debtors'
claims & balloting agent is Kutzman Carson Consultants LLC. An
Official Committee of Unsecured Creditors has been appointed by
the U.S. Trustee for Region 4.
When the Debtors' filed for protection from their creditors, they
listed total assets of $891,993,000 and total liabilities of
$1,419,215,000. (Movie Gallery Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MTI TECHNOLOGY: Taps Clarkson Gore as Bankruptcy Counsel
--------------------------------------------------------
M.T.I Technology Corporation asks the United States Bankruptcy
Court for the Central District of California for authority to
employ Clarkson Gore & Marsella, APLC, as its bankruptcy counsel.
As the Debtor's bankruptcy counsel, Clarkson Gore will:
a. review the prepared schedules, statements of financial
affairs, UST Disclosures and reports;
b. develop through discussion with the Debtor and other parties
in interest, the Debtor's legal positions and strategies
with respect to all facets of this case;
c. negotiate and assist in the development, approval
implementation of the Debtor's future financing, sale of
assets and plan of reorganization;
d. assist in developing and implementing the Debtor's position
with respect to all pleadings and court appearances;
e. provide certain non-securities, non-tax related corporate
legal services with respect to DIP financing closings,
assets sale closings, except for services where special
counsel is engaged by the Debtor;
f. analyze and objects claims;
g. recover analyses under Section 544, 547, 548, 549 and 550 of
the Bankruptcy Code; and
h. provide any other activities required as general bankruptcy
counsel to the Debtor.
The Debtor pays the firm a prepetition retainer of $195,000 for
services rendered and costs incurred.
The firm's professionals compensation rates are:
Professionals Hourly Rates
------------- ------------
Scott C. Clarkson, Esq. $400
Bary R. Gore, Esq. $400
Stephen A. Biegenzahn, Esq. $400
Eve A. Marsella, Esq. $350
Designations Hourly Rates
------------ ------------
Principals $350-400
Associated Counsels $350-400
Law Clerks $100-125
Paralegals $100-150
Scott C. Clarkson, Esq., a member of the firm, assures the Court
that the firm does hold any interest adverse to the Debtor's
estate and is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.
Mr. Clarkson can be reached at:
Scott C. Clarkson, Esq.
Clarkson Gore & Marsella, APLC
424 Carson St., Suite 350
Torrance, CA 90503
Tel: 310-542-0111
Fax: 310-214-7254
http://www.lawcgm.com/
Headquartered in Tustin, California, M.T.I. Technology Corp. --
http://www.mti.com/-- provides professional services and data
storage for mid- to large-sized organizations. In addition, the
Company owns all of the issued and outstanding share capital of
three European subsidiaries: MTI Technology GmbH in Germany, MTI
Technology Limited in Scotland and MTI France S.A.S. in France.
The company filed for Chapter 11 protection on October 15, 2007
(Bankr. C.D. Calif. Case No. 07-13347). The U.S. Trustee for
Region 16 has not appointed an Official Committee of Unsecured
Creditors to date in this case. When the Debtor filed for
protection against its creditors, it listed assets and debts at
$64,002,000.
MTI TECHNOLOGY: Section 341(a) Meeting Scheduled for November 28
----------------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of M.T.I
Technology Corporation's creditors on Nov. 28, 2007, 2007, at
10:00 a.m., at 411 West Fourth Street, Room 1-159 in Santa Ana,
California.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Tustin, California, M.T.I. Technology Corp. --
http://www.mti.com/-- provides professional services and data
storage for mid- to large-sized organizations. In addition, the
Company owns all of the issued and outstanding share capital of
three European subsidiaries: MTI Technology GmbH in Germany, MTI
Technology Limited in Scotland and MTI France S.A.S. in France.
The company filed for Chapter 11 protection on October 15, 2007
(Bankr. C.D. Calif. Case No. 07-13347). The U.S. Trustee for
Region 16 has not appointed an Official Committee of Unsecured
Creditors to date in this case. When the Debtor filed for
protection against its creditors, it listed assets and debts
at $64,002,000.
NUVEEN INVESTMENTs: Reports Results of Shareholder Meetings
-----------------------------------------------------------
Nuveen Investments, Inc. disclosed the results of the reconvened
shareholder meetings of the Nuveen funds which had previously
adjourned prior meetings. The meetings were held to consider,
among other things, approval of new investment management and sub-
advisory agreements to take effect upon the closing of the
proposed acquisition of Nuveen Investments by private equity
investors led by Madison Dearborn Partners, LLC, which is expected
to close during the current quarter.
Nuveen disclosed that 23 funds (representing 15 closed-end funds
and 8 open-end funds) of the 49 funds that adjourned their
meetings on Oct. 12, 2007, received the required number of votes
to approve the new investment management agreements and, if
applicable, sub-advisory agreements required as a result of the
Madison Dearborn-led acquisition. Of the 171 funds that Nuveen
offers, 145 have now approved new investment management and, if
applicable, sub-advisory agreements.
Nuveen also disclosed after the shareholder meetings that another
condition to the Madison Dearborn-led acquisition has been
satisfied. This condition in effect requires that fund
shareholder approvals and client consents be obtained so that
Nuveen's revenue run-rate, as defined in the merger agreement for
the proposed transaction, will be at least 80% of its revenue-rate
prior to the signing of the merger agreement. Other conditions to
the closing of the transaction remain to be satisfied.
In addition to taking action regarding the new investment
management and sub-advisory agreements, the funds took other
actions, including the election of directors and the approval of
registered public accounting firms. One of the two Nuveen funds
that are sub-advised by Gateway Investment Advisers,
L.P., Nuveen Equity Premium Advantage Fund, also approved new sub-
advisory agreements to become effective upon the closing of
Gateway's previously announced acquisition by Natixis Global Asset
Management, which is expected to occur in the first quarter of
2008.
Each of the funds listed on the attached Annex I hereto again
adjourned its meeting prior to taking any action as the fund
either did not yet have a quorum of shareholders present at the
meeting or had not yet received the required votes to take action
on all of the matters that were to be presented at its meeting of
shareholders. Those meetings that have been adjourned in order to
permit the funds to continue to solicit
shareholder votes will be reconvened at 3:00 P.M., Nov. 8, 2007,
at the offices of Nuveen Investments in 333 W. Wacker Drive; Suite
3100, in Chicago, Illinois.
About Nuveen Investments
Nuveen Investments Inc. (NYSE: JNC) provides high-quality
investment services designed to help secure the long-term goals
of institutions and high-net-worth investors as well as the
consultants and financial advisors who serve them. Nuveen
Investments markets its growing range of specialized investment
solutions under the high-quality brands of NWQ, Santa Barbara,
Tradewinds, Rittenhouse, Symphony and Nuveen, including the
Nuveen HydePark Group.
* * *
As reported in the Troubled Company Reporter on Oct. 19, 2007,
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Nuveen Investments Inc. to 'B+' from
'BBB' based on the contemplated capital structure. The outlook is
stable.
S&P also rated Nuveen's proposed $250 million revolving credit
facility 'BB-' with a recovery rating of '2', indicating the
expectation of substantial recovery in the event of payment
default. S&P rated Nuveen's proposed senior secured
$2.215 billion term loan 'BB-' with a recovery rating of '2';
and rated its proposed $885 million senior unsecured notes 'B-',
which is two notches below the long-term counterparty credit
rating. S&P lowered its rating on the $550 million in existing
senior notes to 'B-' from 'BBB'.
PALM INC: Closes Recapitalization Plan with Elevation Partners
--------------------------------------------------------------
Palm Inc.'s recapitalization plan with the private-equity firm
Elevation Partners has closed, positioning Palm to lead the next
phase of the smartphone and mobile-computing markets.
Elevation has invested $325 million in Palm, and the company will
utilize these proceeds along with existing cash and $400 million
of new debt to finance a $9 per share cash distribution. Palm
shareholders of record as of Oct. 24, 4 p.m. EDT, should receive
the cash distribution within about 10 business days.
Under the terms of the recapitalization plan, Elevation has
purchased $325 million of a new series of convertible preferred
stock. The conversion price is $8.50 per share. Elevation will
own about 27% of Palm's outstanding common stock on an as-
converted basis, based on the number of shares of common stock
outstanding as of Aug. 31, 2007.
The company secured commitments for $400 million of new debt and a
$30 million revolving credit facility, which will not be drawn at
closing. JPMorgan and Morgan Stanley were joint bookrunners for
these facilities.
Palm intends to use the proceeds from the sale of the preferred
stock, existing cash and the proceeds from the $400 million of new
debt to fund the cash distribution. The amount of total proceeds
to be distributed to shareholders is estimated to be about $950
million. The distribution is expected to be treated as a return
of capital for most shareholders. Elevation will not be eligible
to participate in the cash distribution.
Palm's payment agent expects to transfer funds to the Depository
Trust Company and mail checks to registered shareholders on Oct.
31, 2007, and brokers and shareholders should receive the cash
distribution shortly thereafter.
Jon Rubinstein, former senior vice president of hardware
engineering and head of the iPod division at Apple, has joined
Palm as executive chairman of the board, and Fred Anderson and
Roger McNamee, managing directors and co-founders of Elevation,
have joined Palm's board of directors. Rubinstein, Anderson, and
McNamee replace Eric Benhamou and Bruce Dunlevie, who resigned
from Palm's board of directors. The total number of directors on
the board has been increased from eight to nine in connection with
the transaction.
"This transaction lays the groundwork for Palm to recapture our
position as the leading innovator and brand of the mobile-
computing revolution. We will build on our history of innovation
to create next-generation, software-rich mobile solutions that
enable people to more effectively manage their lives and
communicate with family, friends and colleagues wherever they
are," said Ed Colligan, Palm president and chief executive
officer. "We are also pleased that we can reward our shareholders
with this $9 cash distribution, and provide them with the
opportunity to be rewarded further through their continued long-
term investment in Palm."
Mr. Rubinstein said, "I am focused on working with Ed and the team
to build on the legacy of Palm and drive innovation in the mobile-
computing market. Over the last few months, I've seen the huge
potential that lies in Palm's brand, distribution and loyal
customer base. Palm's future roadmap in terms of both the
software and products is impressive and complements the new
products that Palm has recently introduced. While there is much
work to be done, there are exciting days ahead for all of us."
Roger McNamee added, "The next generation of mobile computing will
be defined by companies that have deep software expertise as well
as leading design capabilities. We are confident that Palm can
and will drive the future of mobile computing with its integrated
software solutions, history of innovation and loyal customer base.
We look forward to working with Ed, Jon and the entire Palm team
to deliver cutting-edge products that will transform the mobile-
device market and create long-term value for Palm's shareholders."
In connection with Mr. Rubinstein's appointment as executive
chairman of the board, the company will issue to him options to
purchase an aggregate of two million shares of Palm's common stock
and an award of one million restricted stock units. The stock
options will be granted at fair market value on the date of grant,
and half of the shares underlying the options will vest on a time-
based formula.
The RSUs will have a purchase price of $0.001 per share, which
will be deemed paid through the provision of services, and half of
the shares underlying the RSUs will vest on a time-based formula.
The remaining stock options and RSUs will vest upon the later of
the achievement of certain performance targets for the company or
a time-based formula. Pursuant to Nasdaq Marketplace Rule
4350(i)(1)(A)(iv), the company will grant the stock options and
RSUs to Mr. Rubinstein as a new employee of Palm.
Morgan Stanley served as financial advisor to Palm; Houlihan Lokey
Howard & Zukin Advisory Services, Inc. provided a fairness opinion
to Palm; and JPMorgan acted as financial advisor to Elevation.
Wilson Sonsini Goodrich & Rosati, Professional Corporation, served
as outside counsel to Palm; and Simpson Thacher & Bartlett LLP
acted as legal advisor to Elevation.
About Elevation Partners
Headquartered in New York, New York, Elevation Partners
-- http://www.elevation.com/-- is a newly formed private equity
firm that makes large-scale investments in market-leading media,
entertainment, and consumer-related businesses.
About Palm Inc.
Headquartered in Sunnyvale, California, Palm Inc. (NasdaqGS: PALM)
-- http://palm.com/-- sells smartphones and handheld computers.
The company's products include Palm(R) Treo(TM) smartphones and
Palm handheld computers, as well as software, services and
accessories. Palm products are sold through select Internet,
retail, reseller and wireless operator channels throughout the
world, and at Palm Retail Stores and Palm online stores.
* * *
As reported in the Troubled Company Reporter on Oct. 3, 2007,
Palm Inc. disclosed net loss for the quarter was $841,000. Net
loss included stock-based compensation expense of about
$5.1 million, amortization of intangible assets of about
$1 million, patent acquisition cost of $5 million, restructuring
charges of about $6.6 million and gain on sale of land of about
$4.4 million which compares to net income for the first quarter of
fiscal year 2007 of $16.5 million.
In July 2007, Moody's placed the company's long-term corporate
family rating and probability of default rating at B1, and bank
loan debt rating at Ba3. These ratings still hold to date. The
outlook is stable.
Standard & Poor's placed the company's long-term foreaign and
local issuer credits at B which still hold to date. The outlook
is stable.
PETRO ACQUISITIONS: Receiver Quits as Bankruptcy Filing Looms
-------------------------------------------------------------
Leonard Z. Eppel has resigned as the court-appointed receiver for
Petro Acquisitions Inc., saying lenders involved in the case did
not want to work with him, Lisa Bernard-Kuhn at The Enquirer
reports.
A new receiver, Richard D. Nelson, Esq., at Cohen, Todd, Kite &
Stanford LLC, has been appointed to replace him, the report says.
Mr. Eppel's move came at a time when the company is just few days
away from bankruptcy filing. Petro said in court documents cited
by The Enquirer that it would begin filing for Chapter 11
protection before the month ends. Petro's lawyer, James Charles
Frooman, Esq., at Frost Brown Todd, says the filing could be
within the next week to 10 days.
The Enquirer relates that Walnut Investment Partners, a downtown
Cincinnati venture capital fund, forced Petro into bankruptcy
after it filed a lawsuit alleging breach of contract for the
company's failure to pay $2.5 million it owed Walnut as part of an
$8.75 million stock-buyback deal.
The action was followed by the resignation of Don Bloom as
AmeriStop's president and by the participation of at least 25
franchisees representing 44 area stores in Walnut's lawsuit, the
report adds.
Located in West Chester, Ohio, Petro Acquisitions Inc., operates
and franchises 140 AmeriStop gas stations and convenience stores
in Ohio, Kentucky and Indiana.
Cold Spring-based AmeriStop ranked 24th on the 2005 Deloitte
Cincinnati USA 100 list of the region's largest privately held
companies with revenues of $231 million. The company did not
participate in the ranking last year.
PNC MORTGAGE: Moody's Affirms Low-B Ratings on Six Certificates
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings of 19 classes PNC
Mortgage Acceptance Corp., Commercial Mortgage Pass-Through
Certificates, Series 2001-C1 as:
-- Class A-1, $40,237,715, affirmed at Aaa
-- Class A-2, $560,781,000 affirmed at Aaa
-- Class X, Notional, affirmed at Aaa
-- Class X-1, Notional, affirmed at Aaa
-- Class X-2, Notional, affirmed at Aaa
-- Class B, $33,060,000, affirmed at Aaa
-- Class C-1, $18,856,000, affirmed at Aa1
-- Class C-2, $12,000,000, affirmed at Aa1
-- Class C-2X, Notional, affirmed at Aa1
-- Class D, $11,020,000, affirmed at Aa2
-- Class E, $8,816,000, affirmed at A1
-- Class F, $13,224,000, affirmed at A3
-- Class G, $7,714,000, affirmed at Baa1
-- Class H, $16,530,000, affirmed at Ba1
-- Class J, $14,326,000, affirmed at Ba2
-- Class K, $5,510,000, affirmed at Ba3
-- Class L, $8,816,000, affirmed at B1
-- Class M, $4,408,000, affirmed at B2
-- Class N, $2,204,000, affirmed at B3
As of the Oct. 12, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by about 12.6% to
$770.2 million from $881.6 million at securitization. The
certificates are collateralized by 111 mortgage loans secured by
commercial and multifamily properties. The loans range in size
from less than 1% to 10.9% of the pool, with the top 10 loans
representing 30.4% of the pool. The pool includes one investment
grade shadow rated loan, representing 10.9% of the pool, and a
conduit component, representing 63.9% of the pool. Nineteen loans,
representing 25.2% of the pool, have defeased and have been
replaced with U.S. Government securities. Two loans have been
liquidated from the trust resulting in realized losses of about $5
million. There are no loans in special servicing currently.
Twenty-seven loans, representing 17.4% of the pool, are on the
master servicer's watchlist.
Moody's was provided with full-year 2006 operating results for
97.5% of the performing loans. Moody's loan to value ratio for
the conduit component is 83.6%, compared to 81.7% at Moody's last
full review in October 2006 and compared to 89.1% at
securitization.
The largest shadow rated loan is the Danbury Mall Loan
($84 million - 10.9%), which is a participation interest in a
first mortgage loan secured by a 1.3 million square foot regional
mall located in Danbury, Connecticut. The first mortgage loan,
which has a current outstanding balance of about $163.6 million,
is comprised of three notes. Only Note A2 is included in this
transaction. Notes A1 and B secure the Certificates of Danbury
Fair Mall Trust, Series 2001-DFM. The mall is anchored by Macy's,
Sears, J.C. Penney and Lord & Taylor. Moody's current shadow
rating is Aaa, the same as at last review and at securitization.
The top three conduit loans represent 8.3% of the outstanding pool
balance. The largest conduit loan is the River Center Loan ($27.1
million - 3.5%), which is secured by a 469,000 square foot
office/industrial building located in Milwaukee, Wisconsin. As of
June 2007 the property was 82.5% occupied, compared to 85.2% at
last review and compared to 90% at securitization. Moody's LTV is
91.8%, compared to 94.2% at last review and compared to 98.3% at
securitization.
The second largest conduit loan is the Deer Grove Shopping Center
Loan ($19.3 million - 2.5%), which is secured by a 214,000 square
foot retail center located about 30 miles northwest of Chicago in
Palatine, Illinois. As of year-end 2006 the property was 97.2%
occupied, compared to 96% at last review and compared to 100% at
securitization. The center is anchored by Dominick's Grocery
(30.7% GLA; lease expiration June 2016) and Linens-N-Things (23.3%
GLA; lease expiration January 2012). The property's performance
has benefited from improved cash flow and loan amortization.
Moody's LTV is 83.5%, compared to 89% at last review and compared
to 87% at securitization.
The third largest conduit loan is the Overland Crossing Shopping
Center Loan ($17.9 million - 2.3%), which is secured by a 172,000
square foot retail center located in Overland Park, Kansas. The
property is 100% leased, the same as at last review and at
securitization. The center is anchored by J.C. Penney (29.2% GLA;
lease expiration September 2012) and OfficeMax (20.8% GLA; lease
expiration May 2012). The loan has benefited from amortization
and improved cash flow. Moody's LTV is 80.4%, compared to 87.3%
at last review and compared to 91.1% at securitization.
POGO PRODUCING: Posts $45.9 Mil. Net Loss in 2007 Third Quarter
---------------------------------------------------------------
In the third quarter of 2007, Pogo Producing Company reported a
net loss of $45.9 million on revenues of $201.1 million, compared
to third quarter 2006 net income of $33.3 million on revenues of
$232.1 million.
For the first nine months of 2007, Pogo's net loss was
$111.9 million on revenues of $635.5 million, compared to net
income for the first nine months of 2006 of $462.7 million on
revenues of $713.3 million. In the third quarter of 2007, Pogo
reported a net loss from continuing operations (excludes results
from Northrock Resources) of $0.3 million.
Discretionary cash flow in the third quarter and the first nine
months of 2007 was $90.8 million and $339.0 million, respectively,
compared to discretionary cash flow of $220.3 million in the third
quarter and $489.3 million in the first nine months of 2006.
Net cash provided by operating activities during the third quarter
and the first nine months of 2007 was $89.7 million and
$502.7 million, respectively, compared to $124.1 million and
$462.3 million for the same time periods in 2006.
The results in the third quarter 2007 include the impact of these
items:
-- Loss on the sale of Pogo's Canadian investment of
$45.6 million, which closed on Aug. 14, 2007; and
-- Recognized a $4.3 million after-tax charge for early
extinguishment of Pogo's 8-1/4% $200 million senior
subordinated notes.
About Pogo Producing
Headquartered in Houston, Texas, Pogo Producing Company (NYSE:
PPP) -- http://www.pogoproducing.com/-- explores for, develops
and produces oil and natural gas. Pogo owns approximately
4,000,000 gross leasehold acres in major oil and gas provinces in
North America, 3,119,000 acres in New Zealand and 1,480,000 acres
in Vietnam.
* * *
As reported in the Troubled Company Reporter on May 31, 2007,
Standard & Poor's Ratings Services said that its 'BB' corporate
credit rating on Pogo Producing Co. remains on CreditWatch with
developing implications following the company's announcement that
it is selling its Canadian oil- and gas-producing subsidiary for
$2 billion.
PRG-SCHULTZ: Completes Redemption of 9% Series A Pref. Stock
------------------------------------------------------------
PRG-Schultz International Inc. has completed the redemption of its
9% Series A preferred stock, thus concluding the redemption of all
notes and preferred stock issued in the company's Exchange Offer
which closed in March 2006.
In the 2006 Exchange Offer the company offered a bundle of new
securities comprised of 11% Senior Notes due 2011, 10% Senior
Convertible Notes due 2011 and 9% Series A preferred stock in
exchange for $125 million in principal amount of 4.75% Convertible
Subordinated Notes due November 2006.
The company initiated the redemption of all of the securities
issued in the 2006 Exchange Offer on Sept. 17, 2007. On
Oct. 4, 2007, the redemption date for the Senior Notes and the
Senior Convertible Notes, the company has redeemed all of its
outstanding Senior Notes for an aggregate amount of approximately
$52.8 million, that all of the company's Senior Convertible Notes
were converted into shares of PRG-Schultz common stock prior to
the redemption date, and that the remaining Senior Convertible
Notes were redeemed for approximately $152 thousand.
The redemption date for the Series A preferred stock was
Oct. 19, 2007, and all of the outstanding shares of the preferred
stock were converted into shares of PRG-Schultz common stock prior
to this redemption date. The company redeemed the remaining
outstanding shares of preferred stock that did not convert for an
aggregate of approximately
$44 thousand, which included dividends accrued on the Series A
preferred stock to the redemption date.
After the completion of the redemption of the Senior Notes, the
Senior Convertible Notes and the Series A preferred stock, the
company has total debt outstanding of $45 million and has
approximately 21.5 million shares of common stock outstanding.
"The successful turnaround at PRG-Schultz was made possible by the
March 2006 acceptance by our noteholders, whose notes were then
due in November 2006, of our offer to exchange these notes for a
bundle of new securities not due until 2011," James B. McCurry,
the company's chairman, president and chief executive officer,
said. "We are therefore very pleased that the turnaround which
they made possible has allowed us to redeem the new securities
almost three and a half years sooner than expected."
About PRG-Schultz International Inc.
Headquartered in Atlanta, PRG Schultz International Inc.
(NasdaqGM: PRGX) -- http://www.prgx.com/-- is a recovery audit
firm, providing clients throughout the world with value to
optimize and manage their business transactions. Using
proprietary software and expert audit methodologies, PRG industry
specialists review client purchases and payment information to
identify and recover overpayments.
The company has operations in Brazil, Mexico, and Puerto Rico.
* * *
As of June 30, 2007, the company's balance sheet showed total
assets of $114.4 million, total liabilities of $177.5 million, and
mandatorily redeemable participating preferred stock of
$8.2 million, resulting in total stockholders' deficit of
$71.3 million.
QUANTUM ENERGY: Aug. 31 Balance Sheet Upside-Down by $1.5 million
-----------------------------------------------------------------
Quantum Energy Inc.'s consolidated balance sheet at Aug. 31, 2007,
showed $1.1 million in total assets and $2.6 million in total
liabilities, resulting in a $1.5 million total shareholders'
deficit.
The company's consolidated balance sheet at Aug. 31, 2007, also
showed strained liquidity with $190,667 in total current assets
available to pay $2.3 million in total current liabilities.
The company reported a net loss of $64,924 on oil and gas revenue
of $21,064 for the second quarter ended Aug. 31, 2007, compared
with a net loss of $148,094 on oil and gas revenue of $10,879 for
the same period ended Aug. 31, 2006.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2007, are available for
free at http://researcharchives.com/t/s?247b
Going Concern Doubt
Killman, Murrell & Company P.C. expressed substantial doubt about
Quantum Energy Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended Feb. 28, 2007. The auditing firm pointed to the
company's operating losses.
About Quantum Energy
Headquartered in Vancouver, Canada, Quantum Energy Inc. (OTC BB:
QEGY.OB) -- http://http://www.quantumenergyinc.net/-- is an oil
and gas exploration company. The company intends to acquire
interests in the properties and working interests in the
production owned by established oil and gas production companies,
whether public or private, in United States oil producing areas.
Presently the company has working interests in wells in the
Barnett Shale properties located in Cooke County, Texas.
QUEST TRUST: S&P Junks Ratings on Three Certificate Classes
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
M-2 and M-3 from Quest Trust's series 2003-X4, classes M-4 and M-5
from series 2004-X2, and classes M-4, M-5, M-6, and M-7 from
series 2004-X3. Concurrently, S&P removed the ratings on five of
these classes from CreditWatch with negative implications. In
addition, S&P affirmed the ratings on 35 other classes from eight
Quest Trust series.
The lowered ratings reflect collateral performance that has eroded
available credit support during recent months. As of the
September 2007 remittance period, cumulative losses for these
transactions ranged from 4.73% (series 2004-X3) to 7.15% (series
2003-X4) of the original principal balances, total delinquencies
ranged from 26.89% (series 2003-X4) to 34.09% (series 2004-X3) of
the current principal balances, and severe delinquencies (90-plus-
days, foreclosures, and REOs) ranged from 15.93% (series 2003-X4)
to 21.07% (series 2004-X3) of the current principal balances. In
addition, monthly realized losses for all of these transactions
have consistently exceeded excess interest. Overcollateralization
levels for these transactions are approximately 74%, 70%, and 23%
of the targeted amounts for series 2003-X4, 2004-X2, and 2004-X3,
respectively.
The affirmations reflect current and projected credit support
percentages that are sufficient to support the certificates at
their current rating levels. Cumulative losses for these
transactions range from 3.38% (series 2006-X1) to 8.77% (series
2003-X3) of the original pool balances, total delinquencies range
from 32.60% (series 2003-X3) to 41.48% (series 2006-X1) of the
current pool balances, and severe delinquencies range from 21.57%
(series 2003-X3) to 27.60% (series 2006-X1) of the current pool
balances.
Ratings Lowered and Removed from Creditwatch Negative
Quest Trust
Rating
------
Series Class To From
------ ----- -- ----
2003-X4 M-3 B BBB-/Watch Neg
2004-X2 M-4 BB- BBB/Watch Neg
2004-X2 M-5 CCC BB/Watch Neg
2004-X3 M-6 CCC BB+/Watch Neg
2004-X3 M-7 CCC B/Watch Neg
Ratings Lowered
Quest Trust
Rating
------
Series Class To From
------ ----- -- ----
2003-X4 M-2 BB BBB
2004-X3 M-4 BB BBB
2004-X3 M-5 B- BBB-
Ratings Affirmed
Quest Trust
Series Class Rating
------ ----- ------
2003-X2 M-1 AAA
2003-X2 M-2 AA
2003-X3 M-2 AA
2003-X3 M-3 BBB
2003-X4 A AAA
2003-X4 M-1 AA-
2004-X2 A AAA
2004-X2 M-1 AA
2004-X2 M-2 A
2004-X2 M-3 BBB+
2004-X3 A-1, A-2, A-3, A-4 AAA
2004-X3 M-1 AA
2004-X3 M-2 A
2004-X3 M-3 BBB+
2005-X1 A-3 AAA
2005-X1 M-1 AA
2005-X1 M-2 A
2005-X1 M-3 A-
2005-X1 M-4 BBB+
2005-X1 M-5 BBB
2005-X1 M-6, M-7 BBB-
2005-X1 M-8 BB+
2005-X2 A-2 AAA
2006-X1 A-1, A-2, A-3 AAA
2006-X1 M-1 A
2006-X1 M-2 A-
2006-X1 M-3 BBB+
2006-X1 M-4 BBB
2006-X1 M-5 BBB-
RAAC SERIES: Moody's Reviews Low-B Ratings on Three Certs.
----------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
seven certificates from RAAC Series 2005-SP2. The transaction is
backed by two groups of adjustable-rate and fixed-rate first and
second lien seasoned mortgage loans acquired by Residential
Funding Corporation. HomeComings Financial Network Inc., GMAC
Mortgage Group, Wilshire Credit Corporation, and Bank of America
N.A. will service the mortgage loans.
The two most subordinate certificates from pool one and the five
subordinate and mezzanine certificates group two have been placed
on review for possible downgrade because existing credit
enhancement levels are low given the current projected losses on
the underlying pools. The pool of mortgages has seen losses in
recent months that have exceed original expectations, and future
loss could cause a more significant erosion of the
overcollateralization in pool one and erosion of the non rated B-
II-3 certificate in pool two.
Complete rating actions are:
Review for possible downgrade:
Issuer: RAAC Series 2005-SP2
-- Class M-I-5, current rating Baa3, under review for
possible downgrade;
-- Class B-I-1, current rating Ba1, under review for
possible downgrade;
-- Class M-II-2, current rating Aa2, under review for
possible downgrade;
-- Class M-II-3, current rating A2, under review for
possible downgrade;
-- Class M-II-4, current rating Baa1, under review for
possible downgrade;
-- Class B-II-1, current rating Ba2, under review for
possible downgrade;
-- Class B-II-2, current rating B2, under review for
possible downgrade.
RADIATION THERAPY: Sells Assets to Vestar Capital for $1.1 Billion
------------------------------------------------------------------
Radiation Therapy Services, Inc. has entered into an agreement to
be purchased by private equity firm Vestar Capital Partners for
$32.50 per share plus assumed debt, for a deal valued at
$1.1 billion.
The Board of Directors of Radiation Therapy Services has approved
the merger agreement on the unanimous recommendation of a Special
Committee of independent directors and recommends that Radiation
Therapy Services' shareholders adopt the agreement.
"In Vestar, Radiation Therapy Services has found a true partner
who shares our commitment to patients," Dr. Daniel Dosoretz,
Radiation Therapy Services' Chief Executive Officer, said. "Our
mission is to create sophisticated treatment platforms to provide
the best care for cancer patients. I can think of no better
ownership structure for the Company to help us focus on this
mission."
"Radiation Therapy Services leads the industry in its reputation,
quality of patient care, professionalism of its staff, and
strength of its management team," Vestar Managing Director, James
L. Elrod, Jr. said
"Dr. Daniel Dosoretz, Dr. James Rubenstein, Chief Medical Officer,
Dr. Daniel Galmarini, Chief Technology Officer, and the management
team are recognized leaders in the field, committed to clinical
excellence," Mr. Elrod added. "We are excited to partner with
them to extend the Company's mission of using the latest
technologies to create quality outcomes for more patients in more
markets."
Dr. Dosoretz, along with other members of senior management,
currently own approximately 40% of the company's fully diluted
shares, and have pledged, in the agreement, to vote their shares
in favor of the transaction. The management team will reinvest a
significant amount in the company and will hold an important
equity position. In addition, a new management equity incentive
program will be put in place to further involve the Company's
leadership in the ongoing business.
The Special Committee, comprised of certain of Radiation Therapy
Services' independent directors, issued the following statement:
"After a market check was conducted at the direction of the
Special Committee and with the assistance of the Company's
financial advisor, Wachovia Capital Markets, LLC, Radiation
Therapy Services received an acquisition proposal from Vestar
Capital Partners and, after extensive negotiations and careful
consideration in conjunction with our financial advisor, Morgan
Joseph & Co. Inc., the Special Committee has unanimously concluded
that this transaction is in the best interest of our shareholders.
This transaction will provide Radiation Therapy Services'
shareholders with a substantial cash premium over the current
trading price of Radiation Therapy Services' common stock."
The transaction is expected to close in the first quarter of 2008,
and is subject to shareholder approval. Wachovia Securities has
committed to provide debt financing for the transaction. Morgan
Joseph & Co. Inc. serves as financial advisor to the Special
Committee and rendered an opinion to the Special Committee as to
the fairness, from a financial point of view, to Radiation Therapy
Services' shareholders (other than management shareholders) of the
consideration to be received by those shareholders in the merger
transaction and Holland & Knight, LLP is serving as its legal
counsel. Shumaker, Loop & Kendrick, LLP is serving as legal
counsel and Wachovia Capital Markets, LLC is acting as financial
advisor to Radiation Therapy Services. Vestar was advised by
Kirkland & Ellis LLP and Kennedy Covington Lobdell & Hickman,
L.L.P.
Wachovia Securities is the trade name for the corporate and
investment banking services of Wachovia Corporation and it
subsidiaries, including Wachovia Capital Markets, LLC, member
NYSE, FINRA, and SIPC, and Wachovia Bank, N.A.
About Radiation Therapy
Based in Fort Myers, Florida, Radiation Therapy Services Inc.
(Nasdaq: RTSX) -- http://www.rtsx.com/-- operates radiation
treatment centers under the name 21st Century Oncology. The
company is a provider of radiation therapy services to cancer
patients. The company's 80 treatment centers are clustered into
25 local markets in 16 states, including Alabama, Arizona,
California, Delaware, Florida, Kentucky, Maryland, Massachusetts,
Michigan, Nevada, New Jersey, New York, North Carolina,
Pennsylvania, Rhode Island and West Virginia.
* * *
As reported Troubled Company Reporter on Oct. 24, 2007, Moody's
Investors Service affirmed the ratings of Radiation Therapy
Services, Inc. following the announcement that the company
has entered into a definitive agreement to be acquired by Vestar
Capital for $32.50 per share. These ratings were affirmed: B1
rating of the company's senior secured revolving credit facility
due 2010, B1 rating of the company's senior secured term loan due
2012 (inclusive of $50 million add-on), B1 Corporate Family
Rating, and B2 Probability of Default Rating.
Standard & Poor's Ratings Services placed its ratings, including
the 'BB-' corporate credit rating, on Radiation Therapy Services
Inc. on CreditWatch with negative implications. This action
follows the announcement by Vestar Capital Partners to purchase
the company for $764 million.
RAMP SERIES: S&P Junks Rating on Class M-I-2 Certificates
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of asset-backed pass-through certificates from RAMP Series
2002-RS1 Trust. Of the three lowered ratings, two remain on
CreditWatch with negative implications and S&P removed one from
CreditWatch negative. At the same time, S&P affirmed its 'AAA'
rating on class A-I-5.
The downgrades reflect the deteriorating performance of the
collateral pool as monthly net losses continue to significantly
outpace monthly excess interest cash flows, resulting in principal
write downs to the overcollateralization for this deal.
As of the September 2007 distribution period, total delinquencies
were approximately 30%, while cumulative realized losses were
4.28%. This transaction is 68 months seasoned, with an
outstanding pool factor of about 6%. If delinquencies continue to
translate into realized losses, S&P will likely take further
negative rating actions.
S&P removed the rating on class M-I-2 from CreditWatch because S&P
lowered it 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 affirmation is based on loss coverage percentages that are
sufficient to maintain the current rating on the A-I-5 class.
Subordination, O/C, and excess interest cash flows provide credit
support for this transaction.
The collateral for this transaction originally consisted of fixed-
and adjustable-rate, first- or second-lien loans secured primarily
by one- to four- family residential properties.
Ratings Lowered and Remaining on Creditwatch Negative
RAMP Series 2002-RS1 Trust
Asset-backed pass-through certificates
Rating
------
Class To From
----- -- ----
M-I-1 BBB/Watch Neg A/Watch Neg
M-II-2 BBB/Watch Neg A-/Watch Neg
Rating Lowered and Removed from Creditwatch Negative
RAMP Series 2002-RS1 Trust
Asset-backed pass-through certificates
Rating
------
Class To From
----- -- ----
M-I-2 CCC B/Watch Neg
Ratings Affirmed
RAMP Series 2002-RS1 Trust
Asset-backed pass-through certificates
Class Rating
----- ------
A-I-5 AAA
RED MOUNTAIN: Fitch Affirms B Rating on $1.5MM Class E Certs.
-------------------------------------------------------------
Fitch Ratings affirms Red Mountain Funding's commercial mortgage
pass-through certificates, series 1995-1, as:
-- Interest-only class I-3 at 'AAA';
-- $1.5 million class E at 'B'
Fitch also maintains the 'C/DR6' rating on the $1.3 million class
F certificates.
As of the October 2007 distribution report, the transaction's
certificate balance has declined by 98% to $2.8 million from
$146.1 million at issuance.
One loan remains in the transaction, which is secured by a skilled
nursing health care property in Red Boiling Springs, Tennessee.
The loan is scheduled to mature on Nov. 1, 2007 and has a current
coupon rate of 9.25%. The June 30, 2007 servicer reported
occupancy was 80% and debt service coverage ratio was 2.54x.
RESIDENTIAL ACCREDIT: S&P Junks Ratings on Two Classes
------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes of mortgage-backed securities issued by Residential
Accredit Loans Inc.'s series 2003-QS17 and 2004-QS10. In
addition, S&P placed two other ratings from series 2003-QS4 and
2003-QS8 on CreditWatch with negative implications. At the same
time, S&P affirmed its ratings on 56 other classes from these four
series.
The lowered ratings are based on recent losses that have begun to
erode the credit support for these classes. In addition, the
level of severely delinquent loans (90-days, foreclosures, and
REOs) indicates that further losses could be possible. Severely
delinquent loans, as a percentage of the current pool balances,
were 1.03% for series 2004-SQ10 and 1.15% for series 2003-QS17.
Current credit support ranges from 0.32% to 0.36% of the current
pool balances. Cumulative losses, as a percentage of the original
pool balances, were 0.15% for series 2003-QS17 and 0.19% for
series 2004-QS10.
The CreditWatch placements are based on the level of delinquent
loans in the pools and recent losses experienced by the
transactions. Delinquent loans, as a percentage of the current
pool balances, range from 2.14% (series 2003-QS8) to 2.70% (series
2003-QS4). Current credit support ranges from 0.36% to 0.38% of
the current pool balances. Cumulative losses range from 0.18%
(series 2003-QS8) to 0.21% (series 2003-QS4) of the original pool
balances.
Standard & Poor's will closely monitor the performance of the
transactions with ratings placed on CreditWatch. If delinquency
levels decline and the levels of credit enhancement have not been
further eroded, S&P will affirm these ratings and remove them from
CreditWatch. Conversely, if the delinquent loans result in more
losses, S&P will likely take further negative rating actions.
The affirmations are based on pool performance that has allowed
credit support to remain at levels that are adequate to support
the current ratings on the certificates.
Subordination is the predominant form of credit support protecting
the certificates from losses. The underlying collateral for these
transactions consists primarily of Alt-A mortgage loans. The "QS"
deals consist of fixed-rate, fully amortizing, level monthly
payment conventional mortgage loans.
The RALI transactions are part of Residential Funding Mortgage
Securities' Expanded Criteria Mortgage Program, which is designed
for borrowers who generally would not qualify for other first
mortgage purchase programs. Examples include mortgage loans
secured by non-owner-occupied properties, mortgage loans made to
borrowers whose incomes do not need to be verified, mortgage loans
with higher loan-to-value ratios, and loans to borrowers whose
debt-to-income ratios are higher than normal.
Ratings Lowered
Rating
------
Series Class To From
------ ----- -- ----
2003-QS17 B-2 CCC B
2004-QS10 B-2 CCC B
Ratings Placed on Creditwatch Negative
Rating
------
Series Class To From
------ ----- -- ----
2003-QS4 B-2 B/Watch Neg B
2003-QS8 B-2 B/Watch Neg B
Ratings Affirmed
Series Class Rating
------ ----- ------
2003-QS4 A-1, A-2, A-3, A-4, A-5, A-6 AAA
2003-QS4 A-P, A-V AAA
2003-QS4 M-1 AA+
2003-QS4 M-2 A+
2003-QS4 M-3 BBB
2003-QS4 B-1 BB
2003-QS8 A-1, A-2, A-3, A-4, A-5, A-6 AAA
2003-QS8 A-7, A-P, A-V AAA
2003-QS8 M-1 AA
2003-QS8 M-2 A+
2003-QS8 M-3 BBB
2003-QS8 B-1 BB
2003-QS17 A-I-1, A-I-2, CB-1, CB-2, CB-3 AAA
2003-QS17 CB-4, CB-5, CB-5, CB-7, NB-1, NB-2 AAA
2003-QS17 NB-3, NB-4, A-P, A-V AAA
2003-QS17 M-1 AA
2003-QS17 M-2 A
2003-QS17 M-3 BBB
2003-QS17 B-1 BB
2004-QS10 A-1, A-2, A-3, A-4, A-5, A-6 AAA
2004-QS10 A-P, A-V AAA
2004-QS10 M-1 AA
2004-QS10 M-2 A
2004-QS10 M-3 BBB
2004-QS10 B-1 BB
RYERSON INC: Platinum Equity Appoints Team of New Sr. Leaders
-------------------------------------------------------------
Ryerson Inc. has taken the initial steps in a comprehensive
reorganization. On Oct.19, 2007, Platinum Equity LLC made several
key appointments to the company's senior leadership team:
* Robert Archambault was named interim CEO. Mr. Archambault
is a partner at Platinum Equity overseeing the Ryerson
investment.
* Stephen Makarewicz was been appointed as president and
COO. Mr. Makarewicz was president of Ryerson South.
* Terence Rogers was appointed as executive vice president
and chief financial officer. Mr. Rogers was vice
president of finance for Ryerson.
As part of the reorganization, Neil Novich, former chairman and
CEO, Jay Gratz, former CFO, and Gary Niederpruem, former EVP, have
left the company.
"We appreciate their longstanding commitment to Ryerson, their
professionalism and leadership, and we wish them great success in
the future," Mr. Archambault said. "Further details of the
reorganization will be disclosed in the weeks ahead. In the
meantime, our highest priority is to minimize any disruption
to our customers, suppliers and business partners." said
Mr. Archambault.
"The change in ownership and reorganization gives us an
opportunity to build even stronger working relationships with all
of our business partners," he said. "I have encouraged every
Ryerson employee to focus on improving service as our highest
priority."
Mr. Makarewicz said the change in ownership and reorganization
marked an important turning point for the company.
"This is an exciting new era for Ryerson, and a unique opportunity
for all of us to chart a course for the future," Mr. Makarewicz
said. "We will be reorganizing the company to improve customer
service, profitability and achieve operational excellence."
About Ryerson Inc.
Headquartered in Chicago, Illinois, Ryerson Inc. (NYSE: RYI) --
http://www.ryerson.com/-- is a distributor and processor of
metals in North America. The company services customers through a
network of service centers across the United States and in Canada,
Mexico, India, and China.
As reported in the Troubled Company Reporter on Oct. 23, 2007,
The affiliates of Platinum Equity LLC completed their acquisition
of Ryerson Inc. in a transaction valued at approximately
$2 billion.
* * *
As reported in the Troubled Company Reporter on Sept. 28, 2007,
Standard & Poor's Ratings Services affirmed its ratings on
Ryerson Inc., including its 'B+' corporate credit rating. S&P
removed all ratings from CreditWatch, where they had been placed
with negative implications on July 24, 2007, after the company
after it has agreed to be acquired by Platinum Equity for around
$2 billion.
SACO I: Moody's Downgrades Ratings on 58 Certificate Classes
------------------------------------------------------------
Moody's Investors Service downgraded 58 classes of certificates
from 13 deals issued by SACO I Trust in 2005. The transactions
are backed by closed-end second lien loans.
The projected pipeline has been continuously increasing over the
past a few months and is likely to affect the credit support for
these certificates. Furthermore, many underlying first lien loans
are likely to have pending interest rate resets, which may cause
an increase in delinquencies and defaults on the second lien loans
in the pool. The certificates are being downgraded based on the
fact that the bonds' current credit enhancement levels, including
excess spread, may be too low compared to the current projected
loss numbers at the current rating level.
Complete rating actions are:
Issuer: SACO I Trust 2005-1
-- Cl. B-2, Downgraded to Ba3 from Baa3
-- Cl. B-3, Downgraded to Ca from B3
Issuer: SACO I Trust 2005-2
-- Cl. B-2, Downgraded to B3 from Baa2
-- Cl. B-3, Downgraded to Ca from B1
-- Cl. B-4, Downgraded to C from Ca
Issuer: SACO I Trust 2005-3
-- Cl. B-3, Downgraded to Ba3 from Baa3
-- Cl. B-4, Downgraded to Ca from B3
Issuer: SACO I Trust 2005-4
-- Cl. B-2, Downgraded to Ba3 from Baa3
-- Cl. B-3, Downgraded to Caa2 from Ba1
-- Cl. B-4, Downgraded to C from B3
Issuer: SACO I Trust 2005-5
-- Cl. I-B-2, Downgraded to Ba2 from Baa2
-- Cl. I-B-3, Downgraded to B2 from Baa3
-- Cl. I-B-4, Downgraded to Ca from B1
Issuer: SACO I Trust 2005-6
-- Cl. B-2, Downgraded to Ba3 from Baa2
-- Cl. B-3, Downgraded to B3 from Ba1
-- Cl. B-4, Downgraded to C from B2
Issuer: SACO I Trust 2005-7
-- Cl. M-5, Downgraded to Baa2 from A3
-- Cl. B-1, Downgraded to Ba3 from Baa1
-- Cl. B-2, Downgraded to B3 from Baa2
-- Cl. B-3, Downgraded to Caa3 from Ba1
Issuer: SACO I Trust 2005-8
-- Cl. M-5, Downgraded to Baa2 from A3
-- Cl. B-1, Downgraded to Ba3 from Baa1
-- Cl. B-2, Downgraded to B3 from Baa2
-- Cl. B-3, Downgraded to Caa3 from Ba1
Issuer: SACO I Trust 2005-9
-- Cl. M-4, Downgraded to Baa2 from A1
-- Cl. M-5, Downgraded to Ba1 from A2
-- Cl. M-6, Downgraded to Ba3 from A3
-- Cl. B-1, Downgraded to B3 from Baa1
-- Cl. B-2, Downgraded to Caa2 from Baa2
-- Cl. B-3, Downgraded to C from Baa3
-- Cl. B-4, Downgraded to C from Ba1
Issuer: SACO I Trust 2005-10
-- Cl. I-M, Downgraded to Ba2 from A3
-- Cl. I-B-1, Downgraded to B1 from Baa1
-- Cl. I-B-2, Downgraded to Caa1 from Baa2
-- Cl. I-B-3, Downgraded to Ca from Baa3
-- Cl. I-B-4, Downgraded to C from Ba1
-- Cl. II-M-2, Downgraded to A1 from Aa2
-- Cl. II-M-3, Downgraded to A3 from Aa3
-- Cl. II-M-4, Downgraded to Baa1 from A1
-- Cl. II-M-5, Downgraded to Ba1 from A2
-- Cl. II-M-6, Downgraded to B1 from A3
-- Cl. II-B-1, Downgraded to Caa2 from Baa1
-- Cl. II-B-2, Downgraded to Ca from Baa2
-- Cl. II-B-3, Downgraded to C from Baa3
-- Cl. II-B-4, Downgraded to C from B2
Issuer: SACO I Trust 2005-WM1
-- Cl. B-3, Downgraded to B3 from Baa3
-- Cl. B-4, Downgraded to Ca from B1
-- Cl. B-5, Downgraded to C from Caa1
Issuer: SACO I Trust 2005-WM2
-- Cl. B-1, Downgraded to Ba2 from Baa1
-- Cl. B-2, Downgraded to B3 from Baa2
-- Cl. B-3, Downgraded to Ca from Baa3
Issuer: SACO I Trust 2005-WM3
-- Cl. M-2, Downgraded to A3 from Aa3
-- Cl. M-3, Downgraded to Baa3 from A1
-- Cl. M-4, Downgraded to Ba3 from A2
-- Cl. M-5, Downgraded to B2 from A3
-- Cl. B-1, Downgraded to Caa2 from Baa1
-- Cl. B-2, Downgraded to Ca from Baa2
-- Cl. B-3, Downgraded to C from Baa3
SCHOONER TRUST: Moody's Holds Low-B Ratings on Six Certificates
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings of 13 classes of
Schooner Trust, Commercial Mortgage Pass-Through Certificates,
Series 2004-CF2 as:
-- Class A-1, $132,208,193, affirmed at Aaa
-- Class A-2, $161,000,000, affirmed at Aaa
-- Class X, Notional, affirmed at Aaa
-- Class B, $8,200,000, affirmed at Aa2
-- Class C, $10,045,000, affirmed at A2
-- Class D, $9,080,000, affirmed at Baa2
-- Class E, $3,180,000, affirmed at Baa3
-- Class F, $3,179,111, affirmed at Ba1
-- Class G, $3,179,000, affirmed at Ba2
-- Class H, $1,816,635, affirmed at Ba3
-- Class J, $1,816,635, affirmed at B1
-- Class K, $1,816,635, affirmed at B2
-- Class L, $1,816,635, affirmed at B3
As of the Oct. 12, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by about 5.8% to
$342.3 million from $363.3 million at securitization. The
certificates are collateralized by 59 loans, ranging in size from
less than 1% to 11.3% of the pool, with the top 10 loans
representing 45.4% of the pool. The pool consists of two shadow
rated loans, representing 11.5% of the pool, and a conduit
component, representing 81.3% of the pool.
Six loans, representing 7.2% of the pool, have defeased and are
collateralized with Canadian Government obligations. The pool has
not experienced any losses to date and there are no loans
currently in special servicing. There are no loans on the master
servicer's watchlist. Moody's was provided with year-end 2006
operating results for 74.8% of the pool. Moody's weighted average
loan to value ratio is 83.4%, compared to 84.3% at securitization.
The largest shadow rated loan is the Daimler Chrysler Loan ($27.8
million -- 8.1%), which is secured by a leasehold interest in a
12-story, 197,000 square foot Class A office building with an
adjoining 44,716 square foot, single-story retail structure and a
multi-story parking structure located in Windsor, Ontario.
The property is subject to a ground lease through 2099. Tenants
include Daimler Chrysler Canada (67% of NRA; lease expiration
August 2022; rent guaranteed by Daimler Chrysler USA - Moody's
senior unsecured rating A3 -- positive outlook), City of Windsor
(14.2% of NRA; lease expiration August 2022), Wipro Technologies
(12.5% of NRA; lease expiration May 2008), and National Bank of
Canada (5.4% of NRA; lease expiration October 2012; Moody's senior
unsecured rating Aa2 - stable outlook). Moody's current shadow
rating is Baa3, the same as at securitization.
The second shadow rated loan is the Confederation Mall Loan ($11.5
million -- 3.3%), which is secured by a 327,474 square foot
anchored retail center located Saskatoon, Saskatchewan. The center
is anchored by Wal-Mart and Canada Safeway. The loan amortizes on
a 300-month schedule and is recourse to the borrower. Moody's
current shadow rating is Baa2, the same as at securitization.
The top three conduit loans represent 24.5% of the pool. The
largest loan is the PD Kanco Portfolio Loan ($38.7 million --
11.3%), which is secured by a portfolio of seven multifamily
properties containing a total of 736 units. The properties are
located in Kitchner, Waterloo, Cambridge and Guelph, Ontario. The
portfolio's performance has declined due to increased real estate
taxes and utilities. The loan amortizes on a 360-month schedule
and is partial recourse to the borrower. Moody's LTV is 92.9%,
compared to 89.1% at securitization.
The second largest conduit loan is the Westmount Square Loan
($28.3 million -- 8.3%), which is secured by a mixed-use
office/retail complex located in the Westmount district of
Montreal, Quebec. The property includes 248,170 square feet of
office space and 82,128 square feet of retail space. The loan
amortizes on a 300-month schedule and is recourse to the borrower.
Moody's LTV is 91.4%, compared to 92.7% at securitization.
The third largest conduit loan is the Stillwater Creek Loan ($16.8
million -- 4.9%), which is secured by a facility offering
independent living, assisted living and retirement care services.
The complex includes 204 units and is located in Nepean, Ontario.
The loan amortizes on a 300-month schedule and is recourse to the
borrower. Moody's LTV is 66.3%, compared to 69.1% at
securitization.
SEMCO ENERGY: Receives 96.7% Tenders and Consents of 2008 Notes
---------------------------------------------------------------
SEMCO ENERGY Inc. has received tenders and consents of
$145,060,000 aggregate principal of its outstanding 7-1/8% Senior
Notes due 2008, representing approximately 96.7% of the principal
amount of 2008 Notes outstanding prior to commencement of the
tender offers, as of 5 p.m. New York City time on Oct. 23, 2007.
The company also received tenders and consents of $199,860,000
aggregate principal amount its outstanding 7-3/4% Senior Notes due
2013, representing approximately 99.9% of the principal amount of
2013 Notes outstanding prior to commencement of the tender offers.
Based on the consents received, the company is expected to
execute, as soon as practicable, supplemental indentures that
will, once operative, eliminate most of the restrictive covenants
and events of default in the indentures and the Notes. Each
supplemental indenture will not become operative unless and until
Notes are accepted for purchase by the company pursuant to the
applicable tender offer.
The company's offers to purchase the Notes are subject to the
satisfaction or waiver of various conditions as described in the
Offer Documents. Notes may be tendered pursuant to each tender
offer until 5:00 p.m., New York City time, on Nov. 7, 2007, unless
extended or terminated with respect to a series of Notes.
Holders who validly tender Notes after 5:00 p.m. New York City
time, on Oct. 23, 2007, but prior to the Offer Expiration Date
will be eligible to receive the tender offer consideration
described in the Offer Documents but will not be eligible to
receive the consent payment of $30 per $1,000 principal amount of
Notes tendered.
The consideration to be paid for tendered Notes, and additional
Notes which are tendered prior to the Offer Expiration Date,
was determined as of 10 a.m., New York City time, Oct. 24, 2007,
by reference to a fixed spread of 50 basis points over the yield
on the 5-5/8% U.S. Treasury Note due May 15, 2008.
The yield for the reference security was 4.129% at such time. The
total consideration per $1,000 principal amount of 2008 Notes
validly tendered prior to the Offer Expiration Date and accepted
for payment will be $1,012.59, and the total consideration per
$1,000 principal amount of 2013 Notes validly tendered prior to
the Offer Expiration Date and accepted for payment will be
$1,053.58, including a $30 cash payment per $1,000 principal
amount in respect of all Notes validly tendered on or prior to
such date.
The tender offer consideration per $1,000 principal amount of 2008
Notes tendered after the Consent Date and on or prior to the Offer
Expiration Date, and accepted for payment, will be $982.59. The
tender offer consideration per $1,000 principal amount of 2013
Notes tendered after the Consent Date and on or prior to the Offer
Expiration Date, and accepted for payment, will be $1023.58.
Holders of Notes validly tendered and accepted for payment will
also receive accrued and unpaid interest on their Notes to, but
excluding, the payment date for the tender offer and consent
solicitation, which is expected to be on or about Nov. 9, 2007.
Credit Suisse Securities (USA) LLC is acting as Dealer Manager and
Solicitation Agent for the tender offers and consent solicitations
and can be contacted at (800) 820-1653 (toll-free) or (212) 538-
0652 (collect).
D.F. King & Co., Inc. is the Information Agent and can be
contacted at (800) 290-6431 (toll-free) or (212) 269-5550 (Banks
and Brokers may call collect). Copies of the Offer Documents and
other related documents may be obtained from the Information
Agent.
About Semco Energy Inc.
Headquartered in Port Huron, Michigan, SEMCO Energy Inc.
(NYSE:SEN) -- http://www.semcoenergy.com/-- owns and operates
businesses involved in propane distribution, intrastate pipelines
and natural gas storage in various regions of the United States.
SEMCO ENERGY distributes natural gas to more than 400,000
customers combined in Michigan, as SEMCO ENERGY GAS COMPANY, and
in Alaska, as ENSTAR Natural Gas Company.
* * *
The company continues to carry Moody's Investor Service's 'Ba2' on
its long term corporate family and senior unsecured debt ratings,
which were assigned in May 2003. The outlook is developing.
SERVICEMASTER CO: S&P Affirms 'B+' Rating on $2.65 Million Loan
---------------------------------------------------------------
Standard & Poor's affirmed its 'B+' bank loan rating on Memphis,
Tennessee-based The ServiceMaster Co.'s $2.65 billion term loan.
The rating was removed from CreditWatch, where it was originally
placed with developing implications on Aug. 3, 2007, following the
company's execution of an amendment to its new $3.3 billion senior
secured credit agreement. The facility is rated one notch above
the corporate credit rating on ServiceMaster, with a recovery
rating of '2', indicating the expectation for substantial (70%-
90%) recovery in the event of a payment default.
"The amendment provided the holders of the bank loan the right to
parcel the existing $2.65 billion term loan into two tranches, up
to 90 days from the closing date," said Standard & Poor's credit
analyst Jean Stout. "The 90-day period has expired and the term
loan remains intact."
At the same time, Standard & Poor's affirmed its other ratings on
ServiceMaster, including its 'B' corporate credit rating. The
rating outlook is negative.
ServiceMaster provides a variety of outsourcing services to both
residential and commercial customers, with major segments
including lawn care, pest control, and home warranties.
"The ratings on ServiceMaster reflect its very highly leveraged
financial profile following its acquisition by an investment group
led by Clayton, Dubilier & Rice Inc.," said Ms. Stout. "Ratings
support is provided by ServiceMaster's good business positions in
its fragmented and competitive end markets, which have
historically translated into good cash flow generation from a
fairly diverse portfolio of services."
SHERIDAN LEVIN: Case Summary & Nine Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Sheridan Levin
9066 East Evans Drive
Scottsdale, AZ 85260
Bankruptcy Case No.: 07-05567
Chapter 11 Petition Date: October 24, 2007
Court: District of Arizona (Phoenix)
Debtor's Counsel: Pernell W. Mcguire, esq.
P.O. Box 1448
Flagstaff, AZ 86002
Tel: (928) 779-1173
Fax: (928) 779-1175
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's Nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
U.S.A. Land Corp. $800,000
P.O. BOX 93988
Phoenix, AZ 85070
Bank Of America Bank loan $162,000
9000 Southside Boulevard,
Building 700
Jacksonville, FL 32256
U.S.A. Financial Group, Bank loan $160,000
L.L.C.
P.O. BOX 93988
Phoenix, AZ 85070
Wells Fargo Bank loan $90,979
Citi Financial Bank loan $30,000
Bank Of America Bank loan $31,230
Wilimington, DE
Capital One Bank loan $5,068
Bank Of America Bank loan $4,344
Tampa, FL
American Express Bank loan $4,037
SMURFIT-STONE: Posts $96 Million Net Loss in Third Quarter 2007
---------------------------------------------------------------
Smurfit-Stone Container Corporation reported third quarter 2007
net loss available to common shareholders of $96 million, compared
to net income available to common shareholders of $21 million in
the same period ended Sept. 30, 2006. These results included the
loss on the sale of the Brewton, Alabama mill of $97 million,
which reflected the allocation of $146 million of goodwill. Net
proceeds from this transaction drove debt reduction of
$328 million in the quarter.
The company reported adjusted net income of $28 million for the
third quarter 2007. These results compare to adjusted net income
of $15 million in the second quarter 2007 and $31 million in the
prior year quarter. Adjusted net income excludes gains and losses
and charges that management believes are not indicative of the
ongoing operating results of the business.
Sales for the third quarter were $1.89 billion, up 2.2% from the
third quarter 2006.
Commenting on third quarter results, Patrick J. Moore, chairman
and chief executive officer, said, "Smurfit-Stone's operating
performance has consistently improved this year with third quarter
adjusted net income nearly doubling from the second quarter.
Prices increased across all of our major product lines for the
second straight quarter. As planned, we made additional progress
with our strategic initiatives program. The divestiture of our
Brewton mill in the third quarter represented a major milestone in
our restructuring efforts and helped drive further debt
reduction."
Commenting on third quarter operations, Steven J. Klinger,
president and chief operating officer, said, "Sound execution
drove improved sequential operating results. Our mills ran full
and we achieved our highest containerboard production since the
start of our strategic program, despite several mill closures over
the past two years. At the same time, we achieved record low
third quarter containerboard inventory levels. Higher average
containerboard prices reflected the early stages of our current
price initiative. Box prices increased nearly 1% both year-over-
year and sequentially. Container shipments were down 8% from the
prior year, 5.3% due to continued efforts to rationalize box
plants and improve margins by exiting unprofitable accounts.
Benefits from our capital investment program, lower headcount, and
box plant/mill closures in the second quarter resulted in higher
initiative savings."
Earnings Outlook
While the company expects significant price improvement in the
fourth quarter, earnings will likely decrease sequentially due to
seasonal and timing factors. Results will be impacted by
significant additional mill maintenance downtime and associated
costs, higher energy usage and wood fiber costs, and the impact
from the Brewton mill sale. Commenting on the company's outlook,
Moore said, "Despite slightly lower anticipated fourth quarter
earnings, we remain on track to achieve our longer term
objectives. Our strategic initiatives program is on schedule to
reduce costs $525 million by the end of 2008. These efforts,
along with our $400 million incremental capital program, should
drive continued margin and efficiency improvements at Smurfit-
Stone."
At Sept. 30, 2007, the company's consolidated balance sheet showed
$7.405 billion in total assets, $5.654 billion in total
liabilities, and $1.751 billion in total shareholders' equity.
About Smurfit-Stone Container
Headquartered in Chicago, Illinois, Smurfit-Stone Container
Corporation (Nasdaq: SSCC) -- http://www.smurfit-stone.com/-- is
an integrated manufacturer of paperboard and paper-based packaging
products and service, and is one of the world's largest paper
recyclers. The company also provides custom, proprietary and
standard automated packaging machines, offering customers turn-key
installation, automation, line integration and packaging
solutions.
* * *
Smurfit-Stone Container Corporation still carries Fitch Ratings'
issuer default rating at 'B+', secured bank debt at 'BB+/RR1',
senior unsecured debt at 'B+/RR4', and preferred stock at
'B-/RR6'. The rating outlook remains negative.
SMURFIT-STONE: CEO Moore Says No Additional Plant Closures in 2007
------------------------------------------------------------------
Smurfit-Stone Container Corporation on Wednesday denied any intent
of further plant shutdowns this year, Euan Rocha writes for
Reuters News, citing chief executive Patrick Moore.
Mr. Moore said the company will use the fourth quarter of 2007 in
implementing the previously announced closures, the report adds.
Since 2005, the company has closed about 29 corrugated plants and
four mills.
In a Securities and Exchange Commission filing, Steven J. Klinger,
president and chief operating officer, commented on the company's
third quarter operations, "Sound execution drove improved
sequential operating results. Our mills ran full and we achieved
our highest containerboard production since the start of our
strategic program, despite several mill closures over the past two
years. . . . Benefits from our capital investment program, lower
headcount, and box plant/mill closures in the second quarter
resulted in higher initiative savings."
The company incurred a net loss of $96 million on net revenues of
$1.8 billion in the third quarter ended Sept. 30, 2007.
About Smurfit-Stone Container
Headquartered in Chicago, Illinois, Smurfit-Stone Container
Corporation (Nasdaq: SSCC) -- http://www.smurfit-stone.com/-- is
a publicly traded holding company that operates through a wholly
owned subsidiary company, Smurfit-Stone Container Enterprises Inc.
The company is an integrated producer of containerboard and
corrugated containers (paper-based industrial packaging) and is a
large collector, marketer, and exporter of recycled fiber.
Smurfit-Stone operates approximately 170 facilities and employs
approximately 22,000 people.
* * *
Smurfit-Stone Container Corporation still carries Fitch Ratings'
issuer default rating at 'B+', secured bank debt at 'BB+/RR1',
senior unsecured debt at 'B+/RR4', and preferred stock at
'B-/RR6'. The rating outlook remains negative.
SOLO CUP: Debt Reduction Prompts S&P's Positive CreditWatch
-----------------------------------------------------------
Standard & Poor's Ratings Services placed its 'CCC+' corporate
credit and other ratings on Solo Cup Co. on CreditWatch with
positive implications. This action follows significant debt
reduction with the proceeds of asset sales and a sale-leaseback of
manufacturing facilities as well as some recent improvement in
operating performance from very weak levels.
"We believe that a slight upgrade is possible if operating
performance keeps strengthening and prospects for continued
compliance with increasingly stringent financial covenants in the
company's bank credit facilities improve," said Standard & Poor's
credit analyst Cindy Werneth.
With annual revenues of about $2.2 billion, Highland Park, Ill.-
based Solo is one of the largest providers of disposable paper and
plastic cups, plates, and cutlery to foodservice distributors,
quick-service restaurants, and retailers in the U.S.
Operating margins (before depreciation and amortization) have been
very weak, in the mid-single digit percentage area. With the most
recent asset sales, total debt, which S&P adjust to include about
$300 million in capitalized operating leases and $30 million in
tax-effected postretirement obligations, should decline to about
$1.15 billion. Although pro forma debt leverage has improved from
the highly aggressive mid-teens times area, it remains high in the
upper single-digit area.
S&P expect leverage to decline somewhat if management can continue
to build on the operating improvements it has made during the last
several months, which only began to become evident in the
company's second-quarter 2007 results.
Management has had some success in reducing working capital and
selling, general and administrative costs. Ongoing efforts include
various supply chain initiatives, as well as the optimization of
pricing, salesforce productivity, and marketing outlays. In
addition, liquidity has improved dramatically, with $92 million of
bank line availability and $24 million of cash at July 1, 2007.
Nevertheless, S&P believe Solo will need to renegotiate the
financial covenants in its bank credit facility to remain in
compliance in 2008.
S&P expect to resolve the CreditWatch during the next few months
as S&P gain greater confidence that operating results will
continue to strengthen and the company can maintain access to its
bank credit facility.
ST. BERNARD PARISH: S&P Lifts Debt Rating to BBB- from BB
---------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on St.
Bernard Parish School District No. 1, Louisiana's GO debt two
notches to 'BBB-' from 'BB'. Standard & Poor's raised the rating
based on the restoration of a significant portion of the
district's property tax base and the gradual increase in student
enrollment to what appears to be a stable and sustainable level
following Hurricane Katrina. The district's continued ability to
adjust its operating expenditures to reduced enrollment-based
revenue receipts, has resulted in favorable and sustainable
financial operations.
"The stable outlook reflects our expectation that despite the slow
pace of reconstruction and recovery from Katrina, the property tax
base will remain stable and property tax collections will remain
sufficient to cover debt service on the district's bonds," said
Standard & Poor's credit analyst Horacio Aldrete-Sanchez. "The
pace of redevelopment and rate of repopulation remains critical to
the long-term stability of the revenue stream pledged to the
bonds, as well as to the overall financial stability of the
district," Mr Aldrete-Sanchez concluded.
St. Bernard Parish School District No. 1 is coterminous with St.
Bernard Parish, which is directly east of New Orleans, Louissiana.
With an estimated 25,000 residents, the district's population
remains at only 38% of its pre-Katrina levels.
The district has a very high property tax base concentration in
the industrial sector, led by two oil refineries and a sugar
producer. The district's 10 leading taxpayers now account for 71%
of taxable assessed valuation, up from 54% before Katrina. The
destruction of much of the district's commercial and residential
tax base exacerbated the property tax concentration on a few
taxpayers. However, the fact that the tax base was concentrated
on facilities that were quickly rehabilitated after the storm
reduced the severity of the impact that Katrina had on property
tax collections.
STRUCTURED ASSET: Poor Performance Cues S&P's Ratings Downgrade
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class B and M6 mortgage pass-through certificates from Structured
Asset Securities Corp. Mortgage Loan Trust Series 2005-GEL4. S&P
removed the rating on class B from CreditWatch with negative
implications. At the same time, S&P affirmed its ratings on six
additional classes from this series.
The downgrades reflect the deteriorating performance of the
collateral pool as monthly net losses continue to significantly
outpace monthly excess interest cash flows, resulting in principal
write-downs to the overcollateralization for this deal.
As of the September 2007 distribution period, total delinquencies
were 21.64% of the current pool balance, while cumulative realized
losses were 2.04% of the original pool balance. This transaction
is 24 months seasoned, with an outstanding pool factor of about
45%. If delinquencies continue to translate into realized losses,
S&P will likely take further negative rating actions.
S&P removed the rating on class B 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 loss coverage percentages that are
sufficient to maintain the current ratings on classes A, M-1, M-2,
M-3, M-4, and M-5. Subordination, O/C, and excess interest cash
flows provide credit support for this transaction.
The collateral for this deal originally consisted of conventional,
first- and second-lien, adjustable- and fixed-rate, fully
amortizing and balloon, residential mortgage loans.
Rating Lowered
Structured Asset Securities Corp. Mortgage Loan
Trust Series 2005-GEL4
Mortgage pass-through certificates
Rating
------
Class To From
----- -- ----
M6 B BBB-
Rating Lowered and Removed from Creditwatch Negative
Structured Asset Securities Corp. Mortgage Loan
Trust Series 2005-GEL4
Mortgage pass-through certificates
Rating
------
Class To From
----- -- -----
B CCC BB/Watch Neg
Ratings Affirmed
Structured Asset Securities Corp. Mortgage Loan
Trust Series 2005-GEL4
Mortgage pass-through certificates
Class Rating
----- ------
A, M-1 AAA
M-2 AA+
M-3 A+
M-4 A-
M-5 BBB+
STRUCTURED ASSET: S&P Junks Rating on 2003-36XS Class M3 Certs.
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes of mortgage pass-through certificates from Structured
Asset Securities Corp.'s series 2003-36XS. In addition, the
ratings on four classes from four other transactions issued by
Structured Assets Securities Corp. remain on CreditWatch with
negative implications. Concurrently, S&P affirmed the ratings on
179 other classes of mortgage pass-through certificates issued by
Structured Asset Securities Corp.
The lowered ratings on series 2003-36XS reflect collateral
performance that has eroded available credit support during recent
months. As of the September 2007 remittance period, cumulative
losses were approximately $1.48 million, or 0.55% of the original
principal balance, and severe delinquencies (90-plus days,
foreclosures, and REOs) were 7.95% of the current principal
balance. In addition, monthly realized losses for this
transaction have exceeded excess interest for three of the past
six months. Overcollateralization for this transaction is below
its target of $270,800 by approximately $87,900.
The ratings on class M3 from series 2003-3XS, class M3 from 2003-
25XS, class M2 from series 2003-28XS, and class 1-M3 from series
2004-4XS remain on CreditWatch due to increased delinquencies that
could significantly reduce current credit enhancement. As of the
September 2007 remittance period, cumulative losses for these
transactions range from 0.33% (series 2004-4XS) to 0.78% (series
2003-3XS) of the original principal balances, and severe
delinquencies range from 1.97% (series 2004-4XS) to 7.65% (series
2003-3XS) of the current principal balances.
Standard & Poor's will continue to closely monitor the performance
of the transactions with ratings on CreditWatch negative. If
losses decline to a point at which credit enhancement is not
further eroded, S&P will affirm the ratings on these classes and
remove them from CreditWatch. Conversely, if losses and
delinquencies continue to reduce credit support, we will likely
take further negative rating actions on these classes.
The affirmations reflect stable collateral performance as of the
September 2007 remittance period. Actual and projected credit
support percentages are sufficient to support the certificates at
their current rating levels. Cumulative losses for these
transactions range from 0.02% (series 2004-2AC) to 0.59% (series
2003-18XS) of the original pool balances, and severe delinquencies
range from 0.72% (series 2004-2AC) to 13.17% (series 2003-12XS) of
the current pool balances.
Ratings Lowered
Structured Asset Securities Corp. Mortgage
pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2003-36XS M2 BBB A
2003-36XS M3 CCC BB+
Ratings Remaining on Creditwatch Negative
Structured Asset Securities Corp. Mortgage
pass-through certificates
Series Class Rating
------ ----- ------
2003-3XS M3 BB/Watch Neg
2003-25XS M3 B/Watch Neg
2003-28XS M2 BBB/Watch Neg
2004-4XS 1-M3 BB+/Watch Neg
Ratings Affirmed
Structured Asset Securities Corp. Mortgage
pass-through certificates
Series Class Rating
------ ----- ------
2002-23XS A5, A6, A7 AAA
2002-23XS M1 AA
2002-23XS M2 A
2003-3XS A8 AAA
2003-3XS M1 AA
2003-3XS M2 A
2003-12XS A5 AAA
2003-12XS M1 AA
2003-12XS M2 A
2003-12XS M3 B
2003-18XS A5, A6, A7 AAA
2003-18XS M1 AA
2003-18XS M2 A
2003-18XS M3 BB+
2003-25XS A5, A6 AAA
2003-25XS M1 AA
2003-25XS M2 A
2003-28XS A4, A5, A-6 AAA
2003-28XS M1 AA
2003-36XS A4, A5 AAA
2003-36XS M1 AA
2004-2AC A1, A2, AX AAA
2004-2AC B1 AA
2004-2AC B2 A
2004-2AC B3 BBB
2004-2AC B4 BB
2004-2AC B5 B
2004-4XS 1-A3A, 1-A3B, 1-A4, 1-A5, 1-A6, 2-A2 AAA
2004-4XS 1-M1, 2-M1 AA+
2004-4XS 1-M2, 2-M2 A+
2004-6XS A3, A4, A5A, A5B, A6 AAA
2004-6XS M1 AA+
2004-6XS M2 A+
2004-6XS M3 A
2004-9XS 1-A4A, 1-A4B, 1-A4C, 1-A4D, 1-A5 AAA
2004-9XS 1-A6, 2-A1 AAA
2004-9XS 1-M1, 2-M1 AA+
2004-9XS 2-M2 AA-
2004-9XS 1-M2 A+
2004-9XS M3 BBB+
2004-11XS 1-A3A, 1-A3B, 1-A4A, 1-A4B, 1-A5A AAA
2004-11XS 1-A5B, 1-A6, 2-A2 AAA
2004-11XS 2-M1 AA+
2004-11XS 1-M1 AA
2004-11XS 2-M2 A+
2004-11XS 1-M2 A
2004-11XS M3(1), M3(2) BBB-
2004-17XS A3A, A3B, A4A, A4B AAA
2004-17XS M1 AA+
2004-17XS M2 AA-
2004-17XS M3 BBB
2004-21XS 1-A3, 1-A4, 1-A5, 2-A2, 2-A3, 2-A4A AAA
2004-21XS 2-A4B, 2-A5A, 2-A5B, 2-A6A, 2-6B AAA
2004-21XS 1-M1, 2-M1 AA
2004-21XS 1-M2, 2-M2 A
2004-21XS M3 BBB
2004-23XS 1-A2A, 1-A2B, 1-A3A, 1-A3B, 1-A3C AAA
2004-23XS 1-A3D, 1-A4, 2-A1, 2-A2, 2-A3, 2-AIO AAA
2004-23XS M1 AA
2004-23XS M2 A
2004-23XS M3 BBB-
2005-2XS 1-A2A, 1-A2B, 1-A3, 1-A4, 1-A5A AAA
2005-2XS 1-A5B, 2-A1, 2-A2 AAA
2005-2XS M-1 AA
2005-2XS M2 A
2005-2XS M3 BBB+
2005-4XS 1-A2A, 1-A2B, 1-A3, 1-A4A, 1-A4B AAA
2005-4XS 1-A5A, 1-A5B, 2-A1A, 2-A1B, 3-A1 AAA
2005-4XS 3-A2, 3-A3, 3-A4, 3-A5 AAA
2005-4XS M1 AA
2005-4XS 3-M1 AA+
2005-4XS M2, 3-M2 A+
2005-4XS 3-M3 A-
2005-4XS M3 BBB
2005-7XS 1-A1A, 1-A1B, 1-A1C, 1-A2A, 1-A2B AAA
2005-7XS 1-A3, 1-A4A, 1-A4B, 2-A1A, 2-A1B AAA
2005-7XS M1 AA
2005-7XS M2 A
2005-7XS M3 BBB-
2005-9XS 1-A1A, 1-A1B, 1-A2A, 1-A2B, 1-A2C AAA
2005-9XS 1-A3A, 1-A3B, 1-A3C, 1-A3D, 1-A4 AAA
2005-9XS 2-A1, 2-A2, 2-A3, 2-A4 AAA
2005-9XS M1 AA
2005-9XS M2 A+
2005-9XS M3 BBB-
TARGA RESOURCES: Completes $705 Mil. Deal of SAOU & LOU Rights
--------------------------------------------------------------
Targa Resources Partners LP has completed the acquisition of
certain natural gas gathering and processing businesses located in
west Texas and Louisiana from Targa Resources Inc. Total value of
the transaction is approximately $705 million, subject to certain
post-closing adjustments.
In addition, the Partnership also paid approximately
$24.2 million to Targa for the termination of certain hedge
transactions. Total consideration paid by the Partnership
consisted of cash of approximately $721.8 million, including the
hedge termination payment and approximately 275 thousand general
partner units issued to Targa to maintain its 2% general partner
interest in the Partnership.
On Sept. 25 and 26, 2007, Targa completed transactions to
terminate certain out of the money NGL hedges associated with the
SAOU and LOU businesses and to enter into new hedges for
approximately the same volume and term at then current market
prices.
The difference in price between the original hedges and the new
hedges results in an increase in the cash settlement for the
hedged volumes of approximately $2.6 million for the period
November through December 2007, and of approximately
$11.7 million, $9 million, $2 million and $0.3 million for years
2008 through 2011.
The Partnership financed the Acquisition with the proceeds from
its completed offering of 13,500,000 common units and borrowings
under its increased $750 million senior secured revolving credit
facility.
The management has recommended, with the increased cash flow
provided by the Acquisition, to increase the fourth quarter 2007
distribution by 18%, which will be paid in the first quarter of
2008, to 39.75› or $1.59 annually. The board of directors of the
Partnership's general partner indicated their support of the
recommended distribution which remains subject to final board
approval after a review of fourth quarter financial results.
The SAOU system consists of:
(i) the approximately 1,350 mile San Angelo natural gas
gathering system, which is located in the Permian Basin
of west Texas; and
(ii) the Mertzon, Sterling and Conger processing plants with
aggregate processing capacity of approximately
135 MMcf/d.
The LOU system consists of:
(i) an approximately 700-mile natural gas gathering system,
which is located in southwest Louisiana;
(ii) the Gillis and Acadia processing plants with aggregate
processing capacity of approximately 260 Mmcf/d; and
(iii) an integrated fractionation facility at the Gillis
processing plant with processing capacity of
approximately 13 MBbls/d.
"We are very excited to have completed this first step in Targa
Resources Inc.'s strategy of, over time, offering its businesses
to Targa Resources Partners LP, which will be our primary growth
vehicle," Rene Joyce, chief executive officer of the Partnership's
general partner and of Targa, said. "The addition of the LOU and
SAOU systems greatly increases the Partnership's scale, provides
geographic diversity and positions the Partnership for future
growth. To have completed this transaction and related financings
in the current volatile markets is a testament to the efforts of
our employees and the strength of our Partnership."
The board approved the transaction based on a recommendation from
its Conflicts Committee which consists entirely of independent
directors.
Tudor, Pickering & Co. Securities, Inc. acted as financial advisor
and rendered a fairness opinion to the Conflicts Committee.
About Targa Resources Partners
Headquartered in Houston, Texas, Targa Resources Partners LP
(NASDAQ:NGLS) -- http://www.targaresources.com/-- was formed by
Targa Resources Inc. to engage in the business of gathering,
compressing, treating, processing and selling natural gas and
fractionating and selling natural gas liquids and natural gas
liquids products. The Partnership operates in the Fort Worth
Basin in north Texas. A subsidiary of Targa Resources Inc. is the
general partner of the Partnership. Targa Resources Partners owns
a network of integrated gathering pipelines, two natural gas
processing plants and a fractionator.
About Targa Resources Inc
Headquartered in Houston, Texas, Targa Resources Inc. (Nasdaq:
NGLS) -- http://www.targaresources.com/-- is an independent
midstream energy company formed in 2003 by management and Warburg
Pincus, the global private equity firm and a leading energy
investor, to pursue gas gathering, processing and pipeline asset
acquisition opportunities.
* * *
As reported in the Troubled Company Reporter on July 23, 2007,
Moody's Investors Service affirmed Targa Resources Inc.'s B1
corporate family rating and assigned Ba3 ratings (LGD 3, 40%) to
its proposed first lien credit facilities comprised of a
$1.525 billion term loan, a $300 million revolving credit
facility, and a $300 million synthetic letter of credit facility.
TBW MORTGAGE: High Delinquencies Cue S&P to Junk Rating
-------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class B7
from TBW Mortgage-Backed Trust Series 2006-3 to 'CCC' from 'B'.
At the same time, S&P affirmed its ratings on 64 other classes
from four TBW Mortgage-Backed Trust series.
The lowered rating on class B7 from series 2006-3 reflects the
high delinquencies relative to the available credit support in the
deal. Although the transaction has incurred only $7,987 in losses
to date, it has seen a steady increase in the delinquency pipeline
over the past six months. Current credit support is 0.58% of the
current pool balance, and future credit support is projected to be
significantly lower than the original credit support. As of the
September 2007 remittance period, total delinquencies were 7.79%
of the current pool balance, and severe delinquencies (90-plus
days, foreclosures,
and REOs) were 4.68%.
The affirmations reflect stable collateral performance as of the
September 2007 remittance period. Current and projected credit
support percentages are sufficient to support the certificates at
their current rating levels. Cumulative losses are 0.00% of the
original pool balance for series 2006-4, 2006-5, and 2006-6, and
severe delinquencies ranged from 2.76% (series 2006-6) to 6.45%
(series 2006-4) of the current pool balances.
Subordination, excess spread, and overcollateralization provide
credit support for these transactions, with the exception of
series 2006-3, which derives credit support primarily from
subordination.
Rating Lowered
TBW Mortgage-Backed Trust
Rating
------
Series Class To From
------ ----- -- ----
2006-3 B7 CCC B
Ratings Affirmed
TBW Mortgage-Backed Trust
Series Class Rating
------ ----- ------
2006-3 1-A, 2-A1, 2-A2, 3-A, 4-A1, 4-A2 AAA
2006-3 4-A3, 5-A1, 5-A2, 5-A3, AP, AX AAA
2006-3 M, B1 AA
2006-3 B2 AA-
2006-3 B3 A
2006-3 B4 BBB
2006-3 B5 BBB-
2006-3 B6 BB
2006-4 A-1-A, A-1-B, A-2, A-3, A-4, A-5 AAA
2006-4 A-6, A-7, P AAA
2006-4 M-1 AA
2006-4 M-2 A+
2006-4 M-3 A-
2006-4 M-4 BBB+
2006-5 A-1, A-2-A, A-2-B, A-3, A-4, A-5-A AAA
2006-5 A-5-B, A-6 AAA
2006-5 M-1 AA
2006-5 M-2 AA-
2006-5 M-3 A+
2006-5 M-4, M-5 A
2006-5 M-6, M-7 BBB+
2006-6 A-1, A-2A, A-2B, A-3, A-4, A-5A AAA
2006-6 A-5B, A-6A, A-6B AAA
2006-6 M-1 AA+
2006-6 M-2 AA
2006-6 M-3 AA-
2006-6 M-4 A+
2006-6 M-5 A
2006-6 M-6 A-
2006-6 M-7 BBB+
2006-6 M-8 BBB
2006-6 M-9 BBB-
TD AMERITRADE: Earns $645.9 Million in Fiscal Year Ended Sept. 30
-----------------------------------------------------------------
TD AMERITRADE Holding Corporation reported net income of
$645.9 million on net revenues of $2.18 billion for the fiscal
year ended Sept. 30, 2007, compared with net income of
$526.8 million on net revenues of $1.80 billion for the fiscal
year ended Sept. 29, 2006.
"In 2007 we successfully completed the largest client integration
in the history of our industry and continued the implementation of
our client segmentation strategy. Over 80% of our revenue growth
this year was asset-based, and we plan to take that momentum into
2008," said Joe Moglia, chief executive officer.
Net revenues were $575.2 million for the fourth quarter ended
Sept. 30, 2007, compared to net revenues of $541.8 million for the
fourth quarter ended Sept. 29, 2006. Net income was
$200.4 million in the 2007 fourth quarter, compared to net income
of $158.7 million in the 2006 fourth quarter.
"Market volatility led to increased client activity, including our
largest trading day ever with 505,000 trades," Moglia continued.
"While this certainly helped fuel our record results for the
quarter, we were still able to earn approximately 60% of our net
revenues from asset-based sources and achieve 54% pre-tax
margins."
At Sept. 30, 2007, the company's consolidated balance sheet showed
$18.15 billion in total assets, $16.00 billion in total
liabilities, and $2.15 billion in total shareholders' equity.
Stock Buy-back Program
Since the stock buyback program was initiated, through Sept. 30,
2007, the company has invested approximately $325 million in
repurchasing 19 million of the 32 million shares authorized for
the program at a weighted average price of $17.10 per share.
About TD AMERITRADE Holding Corp.
TD Ameritrade Holding Corp. (NASDAQ: AMTD) -- http://www.amtd.com/
-- is the owner of TD AMERITRADE Inc., the largest online
brokerage in the world in number of online equity trades placed
per day.
* * *
TD Ameritrade Holding Corp. carries Fitch Ratings 'BB+' long-term
Issuer Default Rating. The Rating Outlook is stable.
TECUMSEH PRODUCTS: Selling Train Operations to Platinum Equity
--------------------------------------------------------------
Tecumseh Products Company has signed an agreement to sell its
Engine & Power Train business operations to affiliates of Platinum
Equity LLC for $51 million in cash, subject to customary
adjustments at closing.
The operations to be sold encompass Tecumseh's gasoline engine and
transmission manufacturing capabilities for snow throwers,
generators, and other lawn and garden, industrial, and
agricultural applications.
Locations affected include facilities in Grafton, Wisconsin,
Salem, Indiana, Dunlap, Tennessee, well as locations in the United
Kingdom and the Czech Republic.
TMT Motoco, the engine facility in Brazil that is currently idled
and undergoing a judicial restructuring, is not included in this
transaction.
Tecumseh will use the proceeds of the transaction to pay off the
remainder of the balance under its outstanding First Lien Credit
Agreement, effectively eliminating all of the company's domestic
debt.
"This agreement marks the achievement of another important step in
our ongoing efforts to re-focus on our core business operations,"
Ed Buker, Tecumseh's president and chief executive officer, said.
"The complete elimination of our domestic debt substantially
strengthens our balance sheet, and enables the Company to target
our strategic initiatives on our Compressor operations and
improving our financial performance."
Completion of the transaction, which is subject to customary
closing conditions, is currently expected to occur during the
fourth quarter of 2007.
Rothschild Inc. served as financial advisor to Tecumseh.
About Tecumseh Products Company
Headquartered in Tecumseh, Michigan, Tecumseh Products Company
(Nasdaq: TECUA, TECUB) -- http://www.tecumseh.com/-- manufactures
hermetic compressors for air conditioning and refrigeration
products, gasoline engines and power train components for lawn and
garden applications, submersible pumps, and small electric motors.
The company has offices in Italy, United Kingdom, Brazil, France,
and India.
In March of 2007, the company's Brazilian engine subsidiary, TMT
Motoco, was granted permission by the Brazilian courts to pursue a
judicial restructuring, similar to a U.S. filing for Chapter 11
bankruptcy protection. The TMT Motoco filing in
Brazil constituted an event of default with our domestic lenders.
On April 9, 2007, the company obtained amendments to its First and
Second Lien Credit Agreements that cured the cross-default
provisions triggered by the filing in Brazil.
TEREX CORP: Earns $151.5 Mil. in Third Quarter Ended Sept. 30
-------------------------------------------------------------
Terex Corporation reported income from continuing operations for
the third quarter of 2007 of $151.5 million compared to income
from continuing operations of $105.6 million for the third quarter
of 2006. All per share amounts are on a fully diluted basis.
As of Sept. 30, 2007, the company reported total assets of
$5.5 billion, total liabilities of $3.2 billion, and stockholders'
equity of $2.3 billion.
Third Quarter Highlights
Net sales reached $2,196.5 million in the third quarter of 2007,
an increase of $292.8 million, or 15.4%, from
$1,903.7 million in the third quarter of 2006.
Income from operations was $236.3 million in the third quarter of
2007, an increase of $45.2 million, or 23.7%, from
$191.1 million in the third quarter of 2006.
Interest expense was $14.6 million for the third quarter of 2007,
compared with $21.3 million in the 2006 third quarter, reflecting
the reduction in debt versus year ago levels. Other income
totaled $3.8 million for the third quarter of 2007, compared with
$0.6 million for the third quarter of 2006.
The effective tax rate for continuing operations for the third
quarter of 2007 was 34.1%, compared to the effective tax rate for
continuing operations of 33.5% for the third quarter of 2006.
Return on invested capital was 41.9% for the trailing twelve
months ended Sept. 30, 2007. Debt, less cash and cash
equivalents, decreased $9 million in the third quarter to
$189 million, reflecting the favorable impact of strong earnings,
partially offset by expenditures of about $50 million for the
repurchase of Terex common stock pursuant to a previously
announced stock repurchase program, as well as increases in
working capital.
Cash flow in the third quarter was slightly below expectations,
mainly as a result of higher than anticipated inventory levels. In
the last twelve months Debt, less cash and cash equivalents, has
decreased by $174 million.
Working capital as a percent of Trailing Three Month Annualized
Sales was 23.2% at the end of the third quarter of 2007, as
compared to about 19.2% at the end of the third quarter in 2006.
Backlog for orders deliverable during the next twelve months was
$4,058.1 million at Sept. 30, 2007, an increase of 73% versus the
third quarter of 2006.
Outlook
In July 2007, Terex provided guidance for 2007 performance,
indicating that anticipated earnings per share for the full year
would be between $5.50- $5.70 per share on net sales of between
$8.8 - $9 billion. The company's current expectation is to report
full year 2007 financial results that fall within this previously
stated range.
Full-text copies of the company's financials are available for
free at http://ResearchArchives.com/t/s?2481
"Our third quarter results reflected a continuation of the many
trends we have seen develop over the past few quarters," commented
Ron DeFeo, Terex's chairman and chief executive officer. "The
underlying story of strong global demand for our products remains
intact, contributing to our positive outlook for Terex's future
financial performance. However, the challenge of shortages in
component deliveries impacting production output, capacity
constraints on certain of our products, and a softer North
American marketplace for certain products continue to weigh on our
business. Overall, we feel our ability to improve our franchise
during these generally favorable market conditions is getting
stronger."
Mr. DeFeo added, "We continue to invest in our business with a
focus on long-term benefits to our customers and investors. Our
operating expenses have increased versus year ago levels, but
these are necessary expenses targeted at improving our
capabilities in multiple areas, such as supply management,
marketing, global sales and service, information technology and
financial services. We will continue to increase our investment
in these areas in the future, and we expect that benefits from
these investments will become more visible."
"Our overarching message today is that we are a company that is
poised for continued strong and profitable growth," said
Mr. DeFeo. "We are committed to achieving our previously stated
objective of $12 billion in sales and a 12% operating margin by
2010. We anticipate that acquisitions will be a part of this
growth strategy, and with the recent volatility in financial
markets, we are uniquely positioned to take advantage of
opportunities as they arise, as well as continuing to invest in
expanding our infrastructure in developing economies."
About Terex Corporation
Headquartered in Westport, Connecticut, Terex Corporation
(NYSE:TEX) - http://www.terex.com/-- manufactures a broad range
of equipment for use in various industries, including the
construction, infrastructure, quarrying, surface mining, shipping,
transportation, refining, and utility industries. Terex offers a
complete line of financial products and services to assist in the
acquisition of Terex equipment through Terex Financial Services.
The company operates in five business segments: Aerial Work
Platforms, Construction, Cranes, Materials Processing & Mining,
and Roadbuilding, Utility Products and Other.
* * *
In August 2007, Moody's placed the company's long-term corporate
family rating and probability of default rating at Ba2, bank loan
debt rating at Ba1, and senior subordinate rating at Ba3. These
ratings still hold to date. The outlook is stable.
Standard & Poor's placed the company's long-term foreign and local
issuer credits at BB which still hold to date. the outlook is
stable.
TERWIN MORTGAGE: Moody's Downgrades Ratings on 52 Classes
---------------------------------------------------------
Moody's Investors Service downgraded and placed on review for
possible downgrade certain classes of certificates issued by
Terwin Mortgage Trust in 2005 and 2007. The transactions are
backed by closed-end second lien and home-equity line of credit
loans.
The projected pipeline has been continuously increasing over the
past a few months and is likely to affect the credit support for
these certificates. Furthermore, many underlying first lien loans
are likely to have pending interest rate resets, which may cause
an increase in delinquencies and defaults on the second lien loans
in the pool. The certificates are being downgraded and placed on
review for possible downgrade based on the fact that the bonds'
current credit enhancement levels, including excess spread, may be
too low compared to the current projected loss numbers at the
current rating level.
The Class M-1 and Class M-2 of Terwin Mortgage Trust 2007-SL1 deal
are placed on review for possible downgrade due to the
unexpectedly high losses the pool has been taking only 8 months
after closing. With a pool factor of 89.19%, the pool has lost
3.92% of original pool balance. The Class B-1 of this deal is
supported by $26.3 million of subordinated tranches and
overcollateralization, which may be relatively low to 10.03% of
current pool balance (or $34.5 million in terms of dollar value)
that is in 60 days or more delinquency, bankruptcy, foreclosure or
real estate owned.
Complete rating actions are:
Issuer: Terwin Mortgage Trust
Review for Possible Downgrade:
-- Series 2007-1SL, Class M-1, current rating Aa2, on review
for possible downgrade;
-- Series 2007-1SL, Class M-2, current rating Aa3, on review
for possible downgrade.
Downgrade and Review for possible further downgrade:
-- Series 2007-1SL, Class M-3, Downgraded to Ba3 from A2 and
remains on review for possible further downgrade;
-- Series 2007-1SL, Class B-1, Downgraded to B3 from A3 and
remains on review for possible further downgrade.
Downgrade:
-- Series 2005-11, Class I-B-2a, Downgraded to Baa3 from
Baa1;
-- Series 2005-11, Class I-B-2b, Downgraded to Baa3 from
Baa1;
-- Series 2005-11, Class I-B-3, Downgraded to Ba3 from Baa2;
-- Series 2005-11, Class I-B-4, Downgraded to Caa2 from
Baa3;
-- Series 2005-11, Class I-B-5, Downgraded to C from Ba1;
-- Series 2005-11, Class I-B-6, Downgraded to C from B3;
-- Series 2005-11, Class I-B-7, Downgraded to C from Ca;
-- Series 2005-11, Class II-M-3, Downgraded to Ba2 from A2;
-- Series 2005-11, Class II-B-1, Downgraded to Ba3 from A3;
-- Series 2005-11, Class II-B-2, Downgraded to B3 from Baa1;
-- Series 2005-11, Class II-B-3, Downgraded to Ca from Ba1;
-- Series 2005-11, Class II-B-4, Downgraded to C from B2;
-- Series 2005-11, Class II-B-5, Downgraded to C from Ca;
-- Series 2005-13SL, Class M-1, Downgraded to Baa3 from A2;
-- Series 2005-13SL, Class B-1, Downgraded to Ba1 from A3;
-- Series 2005-13SL, Class B-2, Downgraded to Ba3 from Baa1;
-- Series 2005-13SL, Class B-3, Downgraded to B3 from Baa2;
-- Series 2005-13SL, Class B-4, Downgraded to Caa3 from Ba1;
-- Series 2005-13SL, Class B-5, Downgraded to C from B2;
-- Series 2005-13SL, Class B-6, Downgraded to C from Ca;
-- Series 2005-3SL, Class B-3, Downgraded to B3 from Baa3;
-- Series 2005-3SL, Class B-4, Downgraded to Caa3 from Ba1;
-- Series 2005-3SL, Class B-5, Downgraded to Ca from B1;
-- Series 2005-3SL, Class B-6-PI, Downgraded to C from Ca;
-- Series 2005-5SL, Class B-3, Downgraded to Ba1 from Baa2;
-- Series 2005-5SL, Class B-4, Downgraded to Ca from B3;
-- Series 2005-7SL, Class B-1, Downgraded to Baa2 from A3;
-- Series 2005-7SL, Class B-2, Downgraded to Ba3 from Baa1;
-- Series 2005-7SL, Class B-3, Downgraded to Caa2 from Baa2;
-- Series 2005-7SL, Class B-4, Downgraded to Ca from Ba1;
-- Series 2005-7SL, Class B-5, Downgraded to C from B3;
-- Series 2005-7SL, Class B-6, Downgraded to C from Ca;
-- Series 2005-9HGS, Class B-4, Downgraded to B1 from Baa3;
-- Series 2005-9HGS, Class B-5, Downgraded to Caa1 from Ba1;
-- Series 2005-9HGS, Class B-6, Downgraded to C from Ca;
-- Series 2007-1SL, Class B-2, Downgraded to C from Baa1;
-- Series 2007-1SL, Class B-3, Downgraded to C from Baa2;
-- Series 2007-1SL, Class B-4, Downgraded to C from Baa3;
-- Series 2007-1SL, Class B-5, Downgraded to C from Ba1.
TERWIN MORTGAGE: Moody's Lowers Rating on Class B-3 Certs. to B2
----------------------------------------------------------------
Moody's Investors Service downgraded the rating of one mezzanine
class from the Terwin Mortgage Trust 2003-7SL securitization. The
underlying collateral backing this transaction consists of second
lien residential mortgage loans.
The transaction currently has a pool factor of 6% and the
volatility from the tail end losses contributed to a drop in
overcollateralization, which was further exacerbated by stepdown,
and resulted in levels of credit enhancement that seem too low to
support the existing rating.
The complete rating action is:
Issuer: Terwin Mortgage Trust 2003-7SL
-- Class B-3, downgraded to B2, previously Baa2
TERWIN MORTGAGE: S&P Slashes Rating on Class M-2 Notes to B
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
M-2 mortgage-backed notes from Terwin Mortgage Trust 2004-EQR1 to
'B' from 'A'. The rating remains on CreditWatch with negative
implications. The 'AAA' rating on class M-1 also remains on
CreditWatch with negative implications.
The downgrade of the class M-2 notes reflects the deteriorating
performance of the collateral pool as monthly net losses continue
to significantly outpace monthly excess interest cash flows,
resulting in principal write downs to the overcollateralization
for this deal. As of the September 2007 distribution period,
total delinquencies were 94.12% of the current pool balance, while
cumulative realized losses were 7.68% of the original pool
balance. This transaction is 42 months seasoned, with an
outstanding pool factor of about 10%.
Subordination, O/C, and excess interest cash flows provide credit
support for this transaction. The collateral for this transaction
originally consisted of nonperforming fixed- and adjustable-rate
mortgage loans.
Rating Lowered and Remaining on Creditwatch Negative
Terwin Mortgage Trust 2004-EQR1
Mortgage-backed notes
Rating
------
Class To From
----- -- ----
M-2 B/Watch Neg A/Watch Neg
Rating Remaining on Creditwatch Negative
Terwin Mortgage Trust 2004-EQR1
Mortgage-backed notes
Class Rating
----- ------
M-1 AAA/Watch Neg
TIC INC: Court Approves Taylor & Associates as Accountant
---------------------------------------------------------
The Honorable Thomas H. Fulton of the U.S. Bankruptcy Court for
the Western District of Kentucky permitted TIC Inc. to hire Taylor
& Associates PLLC as accountant for the estate.
Taylor will:
(a) assume primary responsibilities for the preparation and
filing of necessary tax returns for the bankruptcy estate;
and
(b) provide other accounting services as may be required by the
Debtor-in-Possession from time to time.
The Debtor will pay the firm at an hourly fee of $125.
The Debtor assures the Court that Taylor is a disinterested person
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
T. Scott Taylor
Taylor & Associates PLLC
1574 Jefferson
Paducah, KY 42001
Tel: (270) 443-5722
Fax: (270) 443-5620
http://www.taylorcpas.com/
Headquartered in Kuttawa, Kentucky, TIC Inc. develops real estate.
The Debtor filed for chapter 11 bankruptcy protection on Aug. 28,
2007 (Bankr. W.D. Ky. Case No. 07-50772). Todd A. Farmer, Esq. at
Stout, Farmer & King PLLC represents the Debtor in its
restructuring efforts. The Debtor listed total assets of
$10,666,566 and total debts of $2,600,911 when it filed for
bankruptcy.
TOUSA INC: S&P Junks Ratings on $500MM Debt and $1.1BB Notes
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on TOUSA Inc. to 'CCC-'. The outlook remains negative.
Concurrently, S&P lowered the ratings assigned to roughly
$500 million in secured bank debt and $1.1 billion in unsecured
notes.
The rating actions anticipate continued strains on TOUSA's
financial profile and ongoing uncertainty regarding the company's
ability to fully meet its financial obligations amid continued
extremely weak operating conditions in its key housing markets.
In addition, S&P remain concerned with the company's comparatively
weak disclosure and corporate governance.
S&P lowered all of its ratings on TOUSA on July 12, 2007,
following a sizable refinancing, which consolidated previously
nonrecourse, secured joint venture debt onto the company's balance
sheet. S&P then revised its outlook on TOUSA on
Oct. 8, 2007, after the company suspended public guidance and
retained advisors for the purpose of reviewing its capital
structure. As part of TOUSA's refinancing in July 2007, the
company did communicate its intention to pursue asset sales and/or
monetization to achieve gradual debt reduction. However, S&P
believe that fiercely competitive industry conditions and negative
homebuyer sentiment, in conjunction with recent turmoil in the
financial markets, have likely reduced the odds that this can be
readily accomplished.
The company has not yet announced when it will report third-
quarter 2007 results. Through the first half of the year, the
company delivered just under 4,000 homes, but it was operating at
a cash flow deficit. TOUSA's restructured $700 million secured
revolver remains largely unused, but it now contains much tighter
financial covenants, which could materially reduce the company's
options should additional unforeseen liquidity constraints
surface. The lowered ratings and negative outlook reflect the
company's vulnerability to a payment default due to its
significant exposure to oversupplied Florida housing markets and
its very constrained financial profile.
Ratings Lowered; Outlook Remains Negative
TOUSA Inc.
To From
-- ----
Corporate credit CCC-/Negative/-- CCC+/Negative/--
Senior unsecured CC CCC-
Subordinated CC CCC-
Bank loan rating
1st-lien CCC(Recov rtg: 2) B-
(Recov rtg: 2) 2nd-lien CC (Recov rtg: 6) CCC- (Recov rtg: 6)
TRIBUNE CO: Unit To Sell Newspapers to Hearst for $62.4 Mil.
------------------------------------------------------------
Tribune Publishing, a division of Tribune Company, disclosed the
sale of its Southern Connecticut Newspapers, The Advocate
(Stamford) and Greenwich Time, to Hearst Corporation for
$62.4 million. The newspapers will be managed by MediaNews Group,
Inc., under an existing joint venture agreement with Hearst.
The transaction is expected to close within the next few weeks.
It does not include real estate in Stamford and Greenwich, which
Tribune plans to sell separately.
Headquartered in Chicago, Tribune Company (NYSE: TRB) --
http://www.tribune.com/-- is one of the country's top media
companies, operating businesses in publishing, interactive and
broadcasting. It reaches more than 80% of U.S. households
and is the only media organization with newspapers, television
stations and websites in the nation's top three markets. In
publishing, Tribune's leading daily newspapers include the Los
Angeles Times, Chicago Tribune, Newsday (Long Island, NY), The Sun
(Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and
Hartford Courant. The company's broadcasting group operates 23
television stations, Superstation WGN on national cable, Chicago's
WGN-AM and the Chicago Cubs baseball team.
* * *
Moody's Investor Services placed Ba3 on Tribune Company's long
term family rating and probability of default on April 2007.
Standard and Poor's rated B+ its long term foreign and local
issuer credit on July 2007.
UNISYS CORP: Posts $31 Million Net Loss in Quarter Ended Sept. 30
-----------------------------------------------------------------
Unisys Corporation reported Tuesday financial results for its
third quarter ended Sept. 30, 2007.
Unisys reported a third-quarter 2007 net loss of $31.0 million.
Tax expense in the quarter increased to $36.8 million from
$16.0 million in the third quarter of 2006. The company's third-
quarter 2007 results also included $19.3 million in other expense,
compared with $400,000 of other income in the year-ago quarter.
These results compared with a third-quarter 2006 net loss of
$77.5 million, which included a pre-tax restructuring charge of
$36.4 million. Pre-tax retirement-related expense in the third
quarter of 2007 was $22.8 million compared with $47.5 million a
year ago.
Revenue for the third quarter of 2007 declined 1% to $1.39 billion
from $1.41 billion in the year-ago quarter. Foreign currency
exchange rates had an approximately 3 percentage-point positive
impact on revenue in the quarter.
"We continue to make progress in enhancing the profitability of
our business," said Joseph W. McGrath, Unisys president and chief
executive officer. "Our operating profit rose to $44 million in
the quarter, an $87 million improvement year-over-year. In our
services business, which represented 87% of our revenue in the
quarter, we achieved an operating profit margin of 3.6%. This is
a 490 basis-point improvement from the third quarter of 2006.
Equally important, our services orders continued to grow, and we
enter the fourth quarter with a strong pipeline of opportunities.
"We are laying the foundation for improved revenue trends in
2008," McGrath said. "We are focused on continuing to enhance our
profitability in the fourth quarter and we continue to drive
toward our goal of an 8-10% operating profit margin, excluding
retirement expense."
The company's gross profit margin and operating profit margin in
the third quarter of 2007 improved to 22.2% and 3.1%,
respectively. These compared with gross and operating profit
margins of 18.3% and (3.0)%, respectively, in the third quarter of
2006, including the year-ago restructuring charge.
At Sept. 30, 2007, the company's consolidated balance sheet showed
$3.81 billion in total assets, $3.80 billion in total liabilities,
and $13.0 million in total shareholders' equity.
Cash Flow and Balance Sheet Highlights
Unisys generated $7 million of cash from operations in the third
quarter of 2007 compared with $27 million in the year-ago quarter.
The company used approximately $37 million of cash in the third
quarter of 2007 for restructuring payments compared to
approximately $71 million in the year-ago period.
Capital expenditures in the third quarter of 2007 increased to
$71 million compared to $60 million in the year-ago quarter due to
increased investments in outsourcing assets related to new
outsourcing engagements. After deducting for capital
expenditures, Unisys used $64 million of free cash in the quarter
compared with free cash usage of $33 million in the third quarter
of 2006. The company ended the third quarter with $449 million of
cash.
About Unisys
Headquartered in Blue Bell, Pennsylvania, Unisys Corporation
(NYSE: UIS) -- http://www.unisys.com/-- is an information
technology services and solutions company. The company provides
consulting, systems integration, outsourcing and infrastructure
services, combined with powerful enterprise server technology.
* * *
As reported in the Troubled Company Reporter on Aug. 22, 2007,
Moody's Investors Service placed the B2 corporate family and
senior unsecured ratings for Unisys Corporation on review for
possible downgrade.
US AIRWAYS: Pilots Picket at Philadelphia International Airport
---------------------------------------------------------------
Shortly after US Airways Group Inc. management disclosed the
airline's seventh consecutive profitable quarter, US Airways East
pilots conducted informational picketing at the Philadelphia
International Airport and expressed their frustration with
management's refusal to adjust their bankruptcy-era wages to the
level of US Airways West pilots. Both pilot groups are
represented by the Air Line Pilots Association, Intl.
US Airways East pilots each committed, on average, $1 million --
including the total loss of their pension -- to US Airways'
successful restructuring, which has paved the way to the company's
profitability. These pilots continue to work under a contract
negotiated during bankruptcy that pays them less than pilots at
every other major airline and gives management the power to
schedule them to work more hours and days, resulting in fatigue.
"Our pilots are outraged that US Airways CEO Doug Parker, who just
reported a third quarter net profit of $177 million, is still
side-stepping the pay parity issue two years after US Airways and
America West merged. He publicly touts a parity offer he made
that will tie seniority integration issues to parity, which he
knows would never be acceptable to union leaders or ratifiable by
the rank and file pilots. In addition, along with lucrative
management compensation, the entire US Airways workforce is
benefiting from 'profit sharing' that is partly being subsidized
by the US Airways East pilots being paid the lowest pilot wages of
any major airline. The result of this work environment is an
unmotivated pilot group and an airline with the industry's worst
consumer rating. How long can we continue like this?" said US
Airways Master Executive Council Chairman Jack Stephan.
More than two years after US Airways and America West Airlines
merged, US Airways is still struggling to combine its labor
workforce. Management insists that this issue does not affect its
operations; however, since the merger, US Airways consistently
ranks near the bottom in customer service
rankings and in on-time statistics, a sobering change from the
airline's top rankings just a few short years ago.
"Even management has acknowledged that you can't run a bad
operation for a long period of time," said Captain Stephan. "Our
pilots want to restore the once-proud reputation of our company,
but we need management to recognize that there are more ways to
produce profits than to squeeze and hold every available nickel
from its employees."
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts. In the Company's second bankruptcy
filing, it lists $8,805,972,000 in total assets and $8,702,437,000
in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date.
* * *
US Airways Group Inc.'s $1.6 billion secured credit facility due
2014, currently being syndicated, carries Standard & Poor's
Ratings Services 'B' rating. That rating was assigned in March
2007.
US INVESTIGATIONS: Sells $440 Mil. Notes in Private Placement
-------------------------------------------------------------
U.S. Investigations Services, Inc. disclosed the sale of
$440 million of two-part notes in the 144a private placement
market last week, according to Reuters citing market sources.
Sources say Lehman Brothers Inc. and Bank of America Securities
LLC were the joint bookrunning managers for the sale.
Headquartered in Falls Church, Virginia, U.S. Investigations
Services, LLC, provides background investigation and security
services to the United States Government and to the commercial
sector.
* * *
As reported in the Troubled Company Reporter on Oct. 24, 2007,
Standard & Poor's Ratings Services assigned its 'CCC+' debt rating
to U.S. Investigations Services Inc.'s proposed $290 million 10.5%
senior unsecured notes due November 2015 and $150 million 11.75%
senior subordinated notes due May 2016. The notes will be sold
privately under Rule 144A of the Securities Act of 1933, without
registration rights.
VCA ANTECH: Earns $32.2 Million in Third Quarter Ended Sept. 30
---------------------------------------------------------------
VCA Antech Inc. reported net income of $32.2 million for the
quarter ended Sept. 30, 2007.
For the third quarter, operating income increased 23.6% to $63.7
million. Revenue also increased 21.8% to a third quarter record
of $306.5 million. Gross profit increased 22.5% to $86.3 million
and diluted earnings per common share increased 18.8% to $0.38.
For the nine months ended Sept. 30, 2007, the company reported a
net income of $96.4 million. Operating income increased 22.1% to
$185.4 million. Revenue increased 17.7% to $872 million. Gross
profit also increased 20.7% to $252.1 million and diluted earnings
per common share was $1.13.
The nine months ended Sept. 30, 2006, included a tax benefit in
the amount of $6.8 million and excluding this benefit from 2006,
adjusted net income increased 21.4% to $96.4 million and adjusted
diluted earnings per common share increased 20.2% to $1.13.
As of Sept. 30, 2007, the company reported total assets of
$1.3 billion, total liabilities of $418.6 million, and total
stockholders' equity of $541.7 million.
Full-text copies of the company's financials are available for
free at http://ResearchArchives.com/t/s?2482.
Bob Antin, chairman and CEO, stated, "The third quarter was
highlighted by the outstanding operating performance of our
laboratory and animal hospital businesses. On a 21.8% increase in
consolidated revenue, our gross profit and operating income
increased 22.5% and 23.6%, respectively, and diluted earnings per
common share increased 18.8%.
"Our laboratory revenue increased 12.4% to $74.3 million driven
primarily by internal revenue growth of 11.6%. Our laboratory
gross profit increased 18.7% and operating income increased 19.9%.
Laboratory gross margin increased to 48% compared to 45.4% and
operating margin increased to 41.4% compared to 38.8% in the
comparable prior year quarter.
"Our animal hospital revenue increased 25% to $229.4 million
driven by acquisitions, including Healthy Pet Corp. acquired on
June 1, 2007, and same-store revenue growth, adjusted for one less
business day, of 5.7%. Our animal hospital gross profit increased
27.0% and operating income increased 29.6%. Animal hospital gross
margin increased to 20.7% compared to 20.4% and operating margin
increased to 18.2% compared to 17.6% in the comparable prior year
quarter. Our animal hospital same-store gross margin increased to
21% compared to 20.5% in the comparable prior year quarter."
About VCA Antech
Headquartered in Los Angeles, California, VCA Antech Inc.
(NASDAQ:WOOF) -- http://www.vcaantech.com/-- is an animal
healthcare services company operating in the United States. The
company provides veterinary services and diagnostic testing to
support veterinary care. It also sells diagnostic imaging
equipment, and other medical technology products and related
services.
* * *
In September 2006, Moody's placed the company's long-term
corporate family rating at Ba3 and probability of default rating
at B1. These ratings still hold to date. The outlook is stable.
Standard & Poor's placed the company's long-term foreign and local
issuer credits at BB- which still hold to date. The outlook is
positive.
VONAGE HOLDINGS: Verizon Settlement Cost Capped at $32 Million
--------------------------------------------------------------
Vonage Holdings Corp. disclosed that the cost of its settlement of
a patent dispute with Verizon Communications Inc. will be
effectively capped at a maximum of $32 million, in addition to the
$88 million already accrued and held in escrow.
The $88 million includes a $66 million cash-collateralized bond, a
$12 million second-quarter escrow payment, and a $10 million
third-quarter escrow payment made in the fourth quarter of 2007.
Vonage and Verizon have agreed to resolve their patent lawsuit.
The terms of the resolution depend on how the Court of Appeals
decides Vonage's pending petition for rehearing regarding two of
the Verizon patents (the '574 and '711). If Vonage wins rehearing
on either the '574 or '711 patent or if the injunction is vacated
as to the '574 or '711 patent, Vonage will pay Verizon $80
million. If Vonage does not win rehearing on either the '574 or
'711 patent, or if the stay is lifted reinstating the injunction,
Vonage will pay $120 million, which includes $2.5 million payable
to certain charities.
"We're pleased to put this dispute behind us and believe this
settlement is in the best interests of Vonage and its customers,"
Sharon O'Leary, Vonage Chief Legal Officer, said. "This
settlement removes the uncertainty of legal reviews and long-term
court action and allows us to continue focusing on our core
business and customers."
As reported in the Troubled Company Reporter on Sept. 27, 2007,
the U.S. Court of Appeals for the Federal Circuit partially
remanded a March 8 jury verdict in the U.S. District Court of
Alexandria, Virginia that the company infringed on three Verizon
patents. The appellate court remanded the infringement verdict on
the 880 patent and affirmed the verdict on one patent claim in
each of the 574 and 711 patents. The appellate court vacated the
entire damages award of $58 million and the 5.5 percent royalty,
and directed that the trial court retry those aspects of the
original case. Vonage's petition for a rehearing en banc was
filed on Oct. 10, 2007.
Verizon Litigation
On June 12, 2006, Verizon filed a suit against Vonage and
its subsidiary Vonage America Inc., with the U.S. District Court
for the Eastern District of Virginia.
Verizon alleged that the company infringed seven patents in
connection with providing VoIP services and sought injunctive
relief, compensatory and treble damages and attorneys' fees.
Verizon dismissed its claims with respect to two of its patents
prior to trial, which commenced on Feb. 21, 2007.
After trial on the merits, a jury returned a verdict finding that
the company infringed three of the patents-in-suit. The jury
rejected Verizon's claim for willful infringement, treble damages,
and attorneys' fees, and awarded compensatory damages in the
amount of $58 million. The trial court subsequently indicated
that it would award Verizon $1.6 million in prejudgment interest
on the $58 million jury award. The trial court issued a permanent
injunction with respect to the three patents the jury found to be
infringed effective April 12, 2007.
The trial court then permitted the company to continue to service
existing customers pending appeal, subject to deposit into escrow
of a 5.5% royalty on a quarterly basis. The trial court also
ordered that the company may not use its technology that was found
to be infringing to provide services to new customers. In
addition, Vonage posted a $66 million bond to stay execution of
the monetary judgment pending appeal.
On April 6, 2007, the company brought the trial court's ruling
to the Federal Circuit Court, which Court allowed Vonage to
continue to sign up new customers while Vonage appeals the jury's
decision.
About Vonage
Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. --
http://www.vonage.com/-- (NYSE: VG) is a provider of digital
phone services with 2.45 million subscriber lines.
WASHINGTON MUTUAL: S&P Puts Default Rating on Class C-B-5 Cert.
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
C-B-5 mortgage pass-through certificates issued by Washington
Mutual MSC Mortgage Pass-Through Certificates Series 2004-RA1
Trust to 'D' from 'CCC'. At the same time, S&P lowered its rating
on class C-B-4 from the same series to 'B' from 'BB' and removed
it from CreditWatch with negative implications. In addition, S&P
lowered its rating on class L-B-3 from series 2005-RA1 to 'BB'
from 'BBB' and removed it from
CreditWatch negative. Lastly, S&P affirmed the rating on class L-
B-4 from series 2005-RA1 and removed it from CreditWatch negative.
The lowered ratings on series 2004-RA1 are based on deteriorating
pool performance. As of August 2007, class C-B-5 had started
experiencing principal write downs. This transaction has
experienced cumulative losses of $205,758,
or 0.06% of its original pool balance. Projected losses based on
the delinquency pipeline suggest that this trend could continue.
While the mortgage pool has paid down to approximately 23.20% of
its original balance, total delinquencies were 6.76%, and serious
delinquencies (90-plus days, foreclosures, and REOs) were 1.87%,
both expressed as a percentage of the current pool balance.
The downgrade of class L-B-3 from series 2005-RA1 reflects losses
in credit support due to losses in the past 12 months. Total
realized losses on this pool are $89,595, or 0.08% of the original
pool balance. Though S&P affirmed the rating on class L-B-4 and
removed it from CreditWatch negative, both classes L-B-4 and L-B-
5, which provide credit support to class L-B-3, have been
previously downgraded. Projected credit support for these classes
has also been lowered due to delinquencies. While the mortgage
pool has paid down to approximately 51.75% of its original
balance, total delinquencies were 12.27%, and serious
delinquencies were 2.78%, both expressed as a percentage of the
current pool balance.
Standard & Poor's will continue to closely monitor the performance
of these transactions. If delinquencies continue to increase or
if these transactions realize further losses in the coming months
that continue to erode credit enhancement, S&P will take further
negative rating actions.
The collateral for series 2004-RA1 primarily consists of Alt-A,
fixed-rate loans, whereas the collateral for series 2005-RA1
primarily consists of prime jumbo, fixed-rate loans secured by
first liens on one- to four-family residential properties.
Rating Lowered
Washington Mutual MSC Mortgage Pass-Through Certificates
Rating
------
Series Class To From
------ ----- -- ----
2004-RA1 C-B-5 D CCC
Ratings Lowered and Removed from Creditwatch Negative
Washington Mutual MSC Mortgage Pass-Through Certificates
Rating
------
Series Class To From
------ ----- -- ----
2004-RA1 C-B-4 B BB/Watch Neg
2005-RA1 L-B-3 BB BBB/Watch Neg
Rating Affirmed and Removed from Creditwatch Negative
Washington Mutual MSC Mortgage Pass-Through Certificates
Rating
------
Series Class To From
------ ----- -- ----
2005-RA1 L-B-4 B B/Watch Neg
WELLCARE HEALTH: Purpose of Headquarters Raid Remains Unknown
-------------------------------------------------------------
The reason behind the raid conducted Wednesday by agents from the
Federal Bureau of Investigation, the Health and Human Services
Department and the Florida attorney general's Medicaid fraud unit
on WellCare Health Plans Inc.'s headquarters in Tampa, Florida,
remains undisclosed to date, various reports say.
WellCare is also silent about what prompted the probe, however, it
confirmed the search operations in its company Web site and said
it is "cooperating with the authorities."
"The underlying reason is unknown, and may not be known for days
if not weeks or months," Thomas Carroll, an analyst at Stifel,
Nicolaus & Co., was quoted by Bloomberg News as saying.
Meanwhile, George Stahl of The Wall Street Journal says the search
reduced WellCare's market value by more than half when the stock
reopened yesterday.
Citing Bear Stearns analyst John Rex, the Journal relates that the
lack of details on either the raid or the nature of the
government's investigation is driving the stock lower.
Headquartered in Tampa, Florida, WellCare Health Plans Inc.
-- http://www.wellcare.com/-- provides managed care services
exclusively for government-sponsored healthcare programs, focusing
on Medicaid and Medicare in the United States. It offers a range
of Medicaid and Medicare plans, including health plans for
families, children, the aged, blind and disabled, and prescription
drug plans.
* * *
As reported in the Troubled Company Reporter on Aug. 24, 2007,
Moody's Investors Service upgraded the senior secured debt
rating of WellCare Health Plans Inc. to Ba1 from Ba3 and the
insurance financial strength rating of WellCare of Florida, Inc
to Baa2 from Ba1. The outlook on the ratings is stable. The
rating action concludes the review for possible upgrade that
was initiated on June 25, 2007.
WHEELING-PITTSBURGH: Amends Merger Agreement with Esmark
--------------------------------------------------------
Wheeling-Pittsburgh Corporation and Esmark Incorporated have
entered into an amendment to their March 16, 2007, definitive
merger agreement to adjust the timing of the put and purchase
rights to be granted to Wheeling-Pittsburgh stockholders in
connection with the combination.
The agreement, as amended, now provides that each Wheeling-
Pittsburgh stockholder as of the election deadline, which will be
at least 5 business days before the special meeting of Wheeling-
Pittsburgh stockholders to vote on the combination, will have the
option to elect to receive one of these for their shares of
Wheeling-Pittsburgh common stock:
(1) the right to elect to receive $20 per share in cash;
(2) a share for share exchange in the parent company of
Wheeling-Pittsburgh and Esmark after the combination
plus a right to purchase newly issued shares of New
Esmark common stock at $19 per share; or
(3) a share for share exchange for New Esmark common stock.
The "purchase rights" and "put rights" are now structured so that
all owners of record as of the election date can make the
elections of such rights.
Further, the election of these rights now occurs prior to the date
of the special meeting of the Wheeling-Pittsburgh stockholders
rather than on the date of the meeting, and the exercise of these
rights occurs prior to the date of the meeting rather than for a
period of 10 days after the effective date of the combination.
The purchase rights and put rights
remain subject to the same caps.
The agreement was amended after discussions with the SEC staff, to
address concerns that the put rights may, in the staff's view,
technically constitute a tender offer under applicable SEC rules
if they were exercisable after the closing of the combination.
The date of the special meeting will be disclose once the
registration statement relating to the proposed combination is
declared effective by the SEC.
The proposed combination remains subject to stockholder approval
of both Wheeling-Pittsburgh and Esmark, certain regulatory
approvals and other customary conditions and is expected to close
in the fourth quarter of calendar 2007.
In addition, pending final closing of third-quarter financial
results, Wheeling-Pittsburgh anticipates a loss for the third
quarter consistent with those reported in prior quarters of 2007.
About Esmark Incorporated
Headquartered in Chicago Heights, Illinois, Esmark Incorporated --
http://www.esmark.com/-- is using steel to build its fortune.
The company was formed in 2003 and has acquired steel companies
located throughout the Eastern half of the US since then.
Esmark's subsidiaries are mostly steel service centers like
Electric Coating Technologies, Sun Steel, Century Steel, and Miami
Valley Steel Service. The company also works closely with
European steel-making giant Ferrostaal on a trading joint venture
called United Steel Group.
About Wheeling-Pittsburgh Corp.
Based in Wheeling, West Virginia, Wheeling-Pittsburgh Corp.
(NasdaqGM: WPSC) -- http://www.wpsc.com/-- is a steel company
engaged in the making, processing and fabrication of steel and
steel products using both integrated and electric arc furnace
technology. The company manufactures and sells hot rolled, cold
rolled, galvanized, pre-painted and tin mill sheet products. The
company also produces a variety of steel products including roll
formed corrugated roofing, roof deck, floor deck, bridgeform and
other products used by the construction, highway and agricultural
markets.
Going Concern Doubt
PricewaterhouseCoopers LLP, in Pittsburgh, expressed substantial
doubt about Wheeling Pittsburgh Corp.'s ability to continue as a
going concern on Aug. 9, 2007, in its report on the consolidated
financial statements included it the company's 10K/A for the year
ended Dec. 31, 2006. The auditing firm reported that the company
has suffered losses from operations and had negative operating
cash flows in the first half of 2007.
WINDSOR FINANCING: S&P Affirms 'BB' Rating on $52 Million Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'BBB-' rating on
Windsor Financing LLC's $268.5 million senior bonds due 2017 and
the 'BB' rating on the $52 million subordinated notes due 2016.
Standard & Poor's also removed the ratings from CreditWatch with
negative implications, and the outlook is now stable.
The ratings were placed on CreditWatch on May 14, 2007 following
Cogentrix Energy Inc.'s (CEI; BB-/Stable/--) announcement of its
intention to sell its equity interest in 14 of 18 power plants,
including the Spruance and Edgecombe facilities that make up
Windsor Financing's assets. The ratings affirmation and
resolution of the CreditWatch listing follows CEI's sale of 80% of
its equity interest to United States Power Fund III L.P., a
private equity fund managed by Energy Infrastructure Fund, while
retaining a 20% interest in the assets. Under the new ownership
structure, consent of both owners is required for all material
actions, including filing for bankruptcy, declaring insolvency,
issuing equity, and entering into affiliate transactions.
The stable outlook on Windsor Financing's bonds and notes is based
on the contractual revenues and costs and predominantly
investment-grade counterparties.
"There is limited upside for the rating on the project due to the
inherent risks in single-asset financings, offtaker ratings, and
exposure to mismatches in the price the project pays for coal and
the energy prices in its power purchase agreements," said Standard
& Poor's credit analyst Chienlo Chidozie. "A downgrade is
possible if operating performance materially deteriorates at the
project," she continued.
WINDY CITY: Moody's Rates $885 Mil. Senior Notes at B3
----------- ------------------------------------------
Moody's Investors Service assigned a B3 debt rating to
$885 million of 8-year senior unsecured notes that will be issued
by Windy City Acquisition Corp. (B1 corporate family rating) -- a
Delaware corporation established for the leveraged buyout of
Nuveen Investments Inc. The notes are part of a financing package
for a consortium of buyers led by Madison Dearborn Partners LLC.
Windy will merge with Nuveen at the close of the transaction, with
Nuveen being the surviving entity. Nuveen becomes the borrower
under these notes immediately upon closing of the transaction.
Moody's stated that today's rating action follows the assignment
of Windy's B1 CFR and Ba2 long-term debt ratings to its $250
million, 6-year revolving credit facility and to a $2.215 billion,
7-year senior secured term loan B on
Oct. 17, 2007. Moody's expects that Nuveen's CFR will be B1
following the completion of the transaction. The rating agency
added that it expects that Nuveen's $550 million of existing
notes, which remain rated Baa1, on review for downgrade, will
likely be rated B3 upon the conclusion of the acquisition
(expected to be in the first half of November) because of their
subordination to the new notes and to the previously announced
term loan and revolver.
According to Moody's, Nuveen's extremely high leverage level will
significantly impact the company's financial flexibility and is
the primary driver of the rating. Moody's VP/senior credit
officer Matthew Noll commented, "These new senior unsecured notes
represent the final tranche of debt that will enable the buyout of
Nuveen. The notes are to be privately placed and will rank senior
to Nuveen's existing $550 million notes, but junior to the term
loan and revolver. The new notes have no financial covenants."
According to the rating agency, Nuveen benefits from its leading
positions in closed-end funds and separately-managed accounts, its
improving diversification in terms of product and customer types,
and an expectation that it will return to higher profit margins as
it decreases leverage over time. Furthermore, Nuveen's plans for
the build-up of a larger institutional client base and a greater
international presence could be modestly accelerated under the
ownership of MDP.
Moody's added that Nuveen would see further downward rating
pressure if total debt / EBITDA or EBITDA / interest expense rises
above 8x and below 1.1x, respectively; its market share of closed
end funds and retail separately managed accounts is reduced to
less than half of its current levels; or if it experienced several
consecutive quarters of material net outflows. Conversely,
reducing total debt / EBITDA to less than 5x, increasing total AUM
to above 3% of the total US open-end mutual funds, along with
increasing institutional AUM to 30% of its total AUM could lead to
upward rating pressure.
Nuveen Investments Inc., headquartered in Chicago, is a US
domiciled holding company whose subsidiaries provide investment
management products and services to retail and institutional
investors predominantly in the US. The company's assets under
management were $170 billion as of Sept. 30, 2007.
Moody's CFR is an opinion regarding a corporate family's ability
to honor all of its financial obligations and is assigned to a
corporate family as if it had a single class of debt and a single
consolidated legal entity structure.
WP EVENFLO: Acquires Ameda Products from Hollister
--------------------------------------------------
Evenflo Company, Inc., subsidiary of WP Evenflo Holdings Inc., has
entered into an Asset Purchase Agreement to acquire Ameda
Breastfeeding Products from Hollister Incorporated of
Libertyville, Illinois. It is expected that the deal will close
in January 2008, pending completion of contractual requirements.
The acquisition of Ameda represents a defining moment in Evenflo's
ongoing strategy to deliver products and services that are "Best
for Baby" and moms. Extensive scientific research worldwide shows
that breastfeeding is the preferred feeding method for newborns
and infants. With the addition of Ameda, a leading maker of
hospital grade breast pumps and accessories, Evenflo is elevating
its commitment to breastfeeding.
"Evenflo is dedicated to developing and marketing products that
are 'Best for Baby' and, by extension, best for mothers too," Rob
Matteucci, CEO of Evenflo, said. "We want to support moms with
the highest-quality breast pumps and accessories to make it as
easy as possible for moms who want to breastfeed to do so. The
addition of Ameda to our family of products further expands our
ability to provide moms the widest range of options to enhance
their breastfeeding experience."
Evenflo will retain the Ameda brand name, which is widely
respected within the professional breastfeeding community and
among lactation experts. Under the Evenflo umbrella, Ameda will
continue to serve its core institutional market, while expanding
its reach into the premium consumer retail market. The combined
resources of the two companies create a "best-in-class"
breastfeeding business, integrating Ameda's product development
expertise and strong reputation in the professional medical sector
with Evenflo's strong retail and consumer marketing experience,
leading to significant synergies.
Evenflo plans to retain the Ameda employees to maintain industry
knowledge, and to open a dedicated Ameda office in the Chicago
area to enable continuity and minimal disruption to the business.
WHO Compliance Commitment
To further underscore its commitment to breastfeeding, Evenflo has
also pledged to become the first baby bottle manufacturer in the
U.S. to achieve compliance with the World Health Organization
International Code of Marketing of Breast Milk Substitutes. The
WHO Code was created in 1981 as a guide for marketing practices of
infant formula, bottle and nipple manufacturers to ensure that
breast milk substitutes, feeding bottles and nipples are not
marketed inappropriately.
As part of its pledge, Evenflo will immediately take these three
steps:
1) discontinue all bottle/nipple advertising directed to
consumers;
2) change its feeding packaging to align with WHO Code
guidelines; and
3) remove bottle/nipple images from its Website.
At the same time, Evenflo will continue to innovate in its core
bottle and nipple products, and work closely with retail partners
to ensure broad-scale availability for moms who do not breastfeed
or do not breastfeed exclusively. Ameda already meets all the
requirements of the WHO Code.
"The WHO code is designed to promote and protect breastfeeding
around the world, and Evenflo's decision to help support this
important objective by becoming Code compliant is to be
congratulated," Marsha Walker, Executive Director of the National
Alliance for Breastfeeding Advocacy, said. "I believe Evenflo's
actions will help encourage moms and remove barriers to
breastfeeding in the U.S. I'm gratified to see Evenflo and Ameda
delivering on their promise to develop and market products in a
manner that will not interfere with or impede breastfeeding."
"This is an exciting time for Evenflo and Ameda," Mr. Matteucci
said. "After months of intense studying and planning, Evenflo's
management team and our board of directors, as well as Ameda's
management, are convinced that this acquisition represents a
value-added combination which will grow Evenflo's and Ameda's
business and enable us to become leaders in the fast-growing
breastfeeding category."
About WP Evenflo
Headquartered in Vandalia, Ohio, WP Evenflo Holdings Inc. is the
parent company of Evenflo Company, Inc. -- http://www.evenflo.com/
-- which manufactures, markets and supplies infant and juvenile
products to key retailers such as Toys "R" Us, Babies "R" Us, Wal-
Mart, Target, and K-Mart.
* * *
As reported in the Troubled Company Reporter on Oct. 24, 2007,
Standard & Poor's Ratings Services revised its outlook on WP
Evenflo Holdings Inc. to stable from positive. At the same time,
Standard & Poor's affirmed all of the ratings on the company,
including the 'B-' corporate credit rating. WP Evenflo Holdings
Inc. is the parent company of Evenflo Company Inc., a leading
manufacturer and marketer of specialty and juvenile products.
In February 2007, Moody's Investors Service assigned a B2
corporate family rating to WP Evenflo Holdings, Inc., a holding
company that owns all the stock of Evenflo Company, Inc. Moody's
also assigned a B1 rating to WP Evenflo Holdings, Inc.'s $160
million of first lien senior secured credit facilities and a Caa1
rating to its $45 million second lien senior secured term loan.
The ratings still hold to date.
* Mark W. Wege & Edward L. Ripley Joins King & Spalding
-------------------------------------------------------
Mark W. Wege, Esq., a bankruptcy attorney with significant
experience representing entities in bankruptcies and
reorganizations across an array of industries, and Edward L.
Ripley, a business bankruptcy specialist noted for his expertise
in Chapter 11 reorganizations, have joined King & Spalding's
financial restructuring group.
They will practice from the firm's 100-lawyer Houston office, Mr.
Wege as a partner and Mr. Ripley as counsel.
"We are very excited to welcome Mark and Ed to King & Spalding and
look forward to the contributions they will make to our bankruptcy
practice," Paul K. Ferdinands, the leader of King & Spalding's
financial restructuring group, said. "They join Henry Kaim,
Mickey Sheinfeld and Jerry McDaniel, recent additions to our
Houston office, and together will provide our clients with a vast
reservoir of legal skill and experience."
Mr. Wege joins King & Spalding from Bracewell & Giuliani, where he
was a partner in the financial restructuring practice. Over the
past 15 years, he has handled multibillion dollar out-of-court
restructurings and represented debtors, DIP lenders, creditor
committees, purchasers and creditors in Chapter 11 proceedings in
bankruptcy courts throughout the United States and around the
world.
Many of his clients have been in the energy industry, including
companies in oil and gas exploration and production,
petrochemicals, integrated oil and gas, refining, electrical
generation and transmission, oil field service and supply. He has
also handled matters within the transportation, telecommunication,
grocery and convenience store, wholesale product production and
distribution, restaurant and healthcare industries.
Mr. Wege received a B.B.A. in Finance from the University of Texas
and a J.D. from Baylor University School of Law. He is chair of
the Houston Bar association's bankruptcy section.
Mr. Ripley was a partner in the bankruptcy and creditors' rights
practice of Baker Hostetler. He is experienced in all aspects of
Chapter 11 reorganizations, including the negotiation and approval
of complex plans of reorganization.
He also has experience in the litigation of contested matters,
adversary proceedings, including preference and fraudulent
conveyance actions, and bankruptcy appellate practice. He has
represented debtors in possession, creditors' committees, secured
creditors, indenture trustees and parties acquiring assets from
bankruptcy cases. He has significant involvement in the oil and
gas, manufacturing and chemical industries, as well as electric
and gas utilities, retail sales, construction, gaming and
biotechnology.
Mr. Ripley earned a B.A., magna cum laude, at the University of
Akron and a J.D. at Drake University Law School.
"I am especially delighted that Mark and Ed have joined King &
Spalding," Mr. Kaim said. "Their arrival reunites them with
Mickey Sheinfeld, Jerry McDaniel and myself as a team that has
worked together very successfully in the past. Our Houston
financial restructuring team is now well-equipped and ready to
expand our services to clients in Texas and throughout the United
States."
About King & Spalding
King & Spalding LLP -- http://www.kslaw.com/-- is an
international law firm with more than 800 lawyers in Atlanta,
Dubai, Houston, London, New York, Riyadh (affiliated office) and
Washington, D.C. The firm represents half of the Fortune 100.
King & Spalding is into financial restructuring practices. It
provides valuable knowledge and in-depth experience to virtually
all facets of corporate reorganizations, in-court and out-of-court
debt restructuring, bankruptcy and insolvency litigation, and
distressed asset mergers and acquisitions. This practice is
regularly retained in bankruptcy matters and workouts to represent
debtors, trustees, creditors' committees, institutional lenders,
other critical creditors and parties-in-interest, and potential
acquirers of businesses and large assets.
The Houston office of King & Spalding, with more than 100 lawyers,
provides a variety of services to clients the world over. Chief
among its practices are those focusing on litigation and
transactional law, especially energy, international arbitration
and Latin American matters.
* Sheppard Mullin Opens Office in Huangpu District, China
---------------------------------------------------------
Sheppard Mullin Richter & Hampton LLP celebrates its arrival in
China with a series of seminars, parties, client briefings and
receptions around the grand opening of its new offices. The new
office is housed in the Raffles City Office Tower in Shanghai's
Huangpu District, near several of the firm's existing clients.
The firm marks the occasion with major China practice
acquisitions. Joining the firm are partners Joel Lutzker and Len
Sorgi, counsel Frank Rocco, and the transfer of senior M&A
associate Will Chuchuwat from the U.S.
Mssrs. Lutzker and Sorgi's practice is focused on patent and other
intellectual property litigation, transactions, counseling and
prosecution. Mssrs. Lutzker and Sorgi have successfully litigated
and tried patent, unfair competition and trade secret cases in the
United States International Trade Commission and in numerous
district and appellate courts in diverse technical fields.
Mr. Chuchawat advises clients ranging from multi-national
corporations to private equity groups to family-oriented
businesses in various industries, such as financial services,
technology, private equity, nonprofit corporations, health care,
construction, manufacturing and defense. His principal areas of
practice are mergers and acquisition transactions, public finance,
corporate finance, general corporate law and general business
counseling.
"China is as important a priority for us as it is for our clients,
and our commitment to China is reflected in the fact that our
delegation from the U.S. is composed of 15 of our most senior
partners and practice leaders," Guy Halgren, chairman of Sheppard
Mullin, said. "It is natural that our senior management, all of
our key practices groups, and all of our other offices be
represented here as we open the doors to our new offices in
Shanghai."
"The last few months have already demonstrated the wisdom of
choosing Shanghai as our Asia hub," Mr. Gumpel, chair of Sheppard
Mullin's International practice, commented. "We are here this
week in part to advance the aggressive growth strategy that we
have developed for the region."
About Sheppard Mullin Richter & Hampton LLP
Based in Los Angeles, California, Sheppard Mullin Richter &
Hampton LLP -- http://www.sheppardmullin.com/-- is a full service
AmLaw 100 firm with more than 500 attorneys in 10 offices located
throughout California and in New York, Washington, D.C. and
Shanghai. The firm's California offices are located in Los
Angeles, San Francisco, Santa Barbara, Century City, Orange
County, Del Mar Heights and San Diego. Founded in 1927 on the
principle that the firm would succeed only if its attorneys
delivered prompt, high quality and cost-effective legal services,
Sheppard Mullin provides legal counsel to U.S. and international
clients. Companies turn to Sheppard Mullin to handle a full range
of corporate and technology matters, high stakes litigation and
complex financial transactions. In the U.S., the firm's clients
include more than half of the Fortune 100 companies.
* BOOK REVIEW: Building American Cities: The Urban Real Estate
Game
--------------------------------------------------------------
Author: Joe R. Feagin and Robert E. Parker
Publisher: Beard Books
Paperback: 332 pages
List Price: $34.95
Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587981483/internetbankrupt
This book is a volatile story of social conflict that rends the
very fabric of our society, but in the end gives shape to our
urban centers.
This second edition is the startling story of how American cities
emerge, grow, change, contract, decay, and become resuscitated.
With keen insight, the authors analyze urban social processes,
such as population migration to suburbia and the effect of foreign
capital investment on U.S. real estate ventures.
Examining patterns in the location, development, financing, and
construction decisions of small and large corporations, the book
looks at the interplay of industrial and development corporations
with various levels of government.
In addition to political aspects, it reflects on the social costs
of unbridled urban growth and decline, pollution, wasted energy,
congestion, and the negative impact on minorities.
*********
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, Joseph Medel C. Martirez, Sheena R. 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 ***