/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090316.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 16, 2009, Vol. 13, No. 74 Headlines ABITIBIBOWATER INC: Bowater Affiliates Amend Credit Facilities ABITIBIBOWATER INC: Delays Filing of 2008 Annual Report ABITIBIBOWATER INC: To Sell 60% Stake in Power Plant for C$615MM ABITIBIBOWATER INC: Unveils Plan to Reduce Debt by $2.4 Billion ABITIBIBOWATER INC: DBRS Comments on Proposed Recapitalization ABITIBIBOWATER INC: DBRS Junks Rating on Canadian Forest Products ALIQUIPPA COMMUNITY: Laid Off Workers Demand Payment of Salaries AMERICAN APPAREL: Enters Into Private Financing Pact With Lion AMERICAN INT'L: Will Pay Unit Workers $450 Million in Bonuses APARTMENT INVESTMENT: S&P Puts 'BB+' to WatchNeg From Stable APPALACHIAN OIL: Closes Convenience Store in Virginia ATHEROGENICS INC: Disclosure Statement Hearing Set for March 31 ATHEROGENICS INC: Selects Stalking Horse Bidder for AGI-10167 BALTIMORE OPERA: Board to Seek Opera's Liquidation Under Ch. 7 BEARINGPOINT INC: Court Set April 17 as Claims Bar Date BEARINGPOINT INC: Files Schedules of Assets and Liabilities BEAZER HOMES: Difficult Market Cues Fitch's Junk Ratings BERNARD L. MADOFF: Lists Up to $826MM in Assets After Fraud Leak BOISE INC: Moody's Cuts to 'B1' on Modest Cushion Under Covenants BUFFALO THUNDER: S&P Withdraws 'CCC' Ratings on Request CAPITAL AUTOMOTIVE: S&P Places 'BB' Rating on Watch Negative CANWEST MEDIA: DBRS Junks Issuer Rating, Under Review-Negative CASCADES INC: DBRS Assigns BB (high) Issuer Rating CATALYST PAPER: DBRS Assigns 'BB' Issuer Rating, Negative Trend CERTIFICHECKS INC: South Kingstown Chamber to Accept Gift Checks CHARLES RIVER: Moody's Gives Neg. Outlook; Affirms 'Ba1' Rating CHC HELICOPTER: S&P Downgrades Corporate Credit Rating to 'B+' CITIGROUP INC: Will Nominate Four Financial Experts to Board CMP SUSQUEHANNA: S&P Downgrades Corporate Credit Rating at 'CC' CST INDUSTRIES: Moody's Affirms 'B2' Corporate Family Rating ENERGY PARTNERS: Bondholders Form Group; In Restructuring Talks EXCHANGE INSURANCE: A.M. Best Changes Final Strength Rating to E FAIRPOINT COMMUNICATIONS: S&P Puts 'BB' Rating on Negative Watch FIRST INDUSTRIAL: S&P Cuts Rating From 'BBB-' to 'BB', WatchNeg FLEETWOOD ENTERPRISES: Wants to Access Lenders' Cash Collateral FLEETWOOD ENTERPRISES: Wants KCC as Claims and Noticing Agent GOTTSCHALKS INC: Bid Proposes April 3 to July 15 Closing Sales GRAFTECH INTERNATIONAL: S&P Keeps 'BB-' on Steel-Industry Woes GRAIN DEALERS: A.M. Best Cuts Fin'l Strength Rating to B (Fair) GREEK CATHOLIC UNION: AM Best Cuts Fin'l Strength Rating to Weak GREEN VALLEY: Section 341(a) Meeting Slated for April 16 in Texas GULFSTREAM APT: Voluntary Chapter 11 Case Summary H&E EQUIPMENT: Moody's Affirms Corporate Family Rating to 'B1' IMPAC MORTGAGE: Defers Interest Payment on Trust Preferred Stock KMART CORP: To Shutter Stores, Cut At Least 250 Workers LEHMAN BROS: Nomura to Shut Down Unit With Former Lehman Staff LEHMAN BROTHERS: Holdings Had $214.2BB in Assets Upon Bankruptcy LEHMAN BROTHERS: Commercial Paper Files Asset & Debt Schedules LEHMAN BROTHERS: Seeks Approval of Sixth Gear Funding Settlement LEHMAN BROTHERS: Court Dismisses Swiss Unit's Chapter 11 Case LEHMAN BROTHERS: Hong Kong Investors Sue HSBC, BoNY for $1.6BB LYONDELL CHEMICAL: Simpson Thacher Plays Key Role in DIP Loan MASCO CORPORATION: Fitch Cuts Issuer Default Rating to 'BB+' MASTER ASSET VEHICLE: CIBC Seeks $115MM in Additional Collateral MBIA INSURANCE: Moody's Withdraws Ratings on 11,000 Bonds MERUELO MADDUX: May File for Chapter 11 Bankruptcy Protection MGIC INVESTMENT: Fitch Puts 'BB' Bond Ratings on Negative Watch MGM MIRAGE: May be Broken to Pieces; Must Raise Over $1 Billion MILACRON INC: Wants to Hire Rothschild Inc. as Investment Banker MILACRON INC: Wants to Hire KCC as Noticing and Disbursing Agent MUZAK HOLDINGS: Silver Point Wants Same Right to Extend Deadlines NATIONAL SEMICONDUCTOR: S&P Pares Corp. Credit Rating to 'BB+' NATIONWIDE HEALTH: Fitch Raises Preferred Stock Rating from 'BB+' PACIFIC SCP: A.M. Best Affirms & Removes Fair FSR Upon Merger PACIFIC ENERGY: Secures Creditor Protection in Canada PALLAS CAPITAL: Fitch Affirms Counterparty Risk Rating PALM INC: Completes Offering of $23.1MM Shares; to Get $83.9MM PALM INC: Elevation Partners Has 34.2% Equity Stake POWERMATE CORP: Wants Plan Filing Period Extended to July 10 RADIAN ASSET: Moody's Pares Insurance Strength Ratings to 'Ba1' REDMAN-HIRAHARA FOUNDATION: Files for Chapter 11 Bankruptcy RH DONNELLEY: Hires Lazard to as Financial Adviser SALEM LOGISTICS: Case Summary & 20 Largest Unsecured Creditors SEALY CORP: Human Resource VP Dabiero Discloses Equity Stake SEARS HOLDINGS: To Shutter Kmart Stores, Cut At Least 250 Workers SEMGROUP LP: Court Sets April 20 Bar Date for Claims vs. Holdings SOURCE INTERLINK: Rising Debt Leverage Cues S&P's Junk Rating SPECTRUM BRANDS: $235MM DIP Facility Revised; Court OKs Loan SPECTRUM BRANDS: Equity Panel Drew Positive Raves from Investors SPECTRUM BRANDS: Gets Final Approval to Use Lenders' Collateral SPECTRUM BRANDS: U.S. Trustee & Insite File Disclosure Objections STANDARD PACIFIC: Difficult Housing Market Cues Fitch's CCC Rtng. STANFORD GROUP: Restrictions on Releasing Brokerage Accounts Set STAR TRIBUNE: Will Resume Talks With Union Over Cost Cuts STRASBURG-JARVIS INC: Files for Chapter 11 Bankruptcy Protection TRIBUNE CO: Asks Court to Establish June 12 as Claims Bar Date TRIBUNE CO: In Talks With Barclays on $225-Mil. Asset-Backed Loan TRIBUNE CO: Seeks July 6 Extension of Lease Decision Period TRIBUNE CO: Settles Rift With U.S. Trustee on Lazard Retention UNITED AUTO INSURANCE: AM Best Cuts Fin'l Strength Rating to Weak UNIVERSAL CITY: Moody's Downgrades Corporate Family Rating to B2 UTAH 7000: Court OKs Ch. 11 Plan; Major Lenders to Take Control VERENIUM CORP: Human Resource VP Dabiero Discloses Equity Stake VERSO PAPER: S&P Puts 'B' Corporate Rating on Negative Watch WOLF HOLLOW: S&P Puts 'B' Rating on Facilities on Negative Watch * S&P Takes Ratings Action on Various U.S. REIT * BOND PRICING -- For the Week From March 9 - 13, 2009 ********* ABITIBIBOWATER INC: Bowater Affiliates Amend Credit Facilities -------------------------------------------------------------- Bowater Incorporated, a subsidiary of AbitibiBowater, Bowater Newsprint South LLC, a subsidiary of AbitibiBowater, and certain of Bowater's subsidiaries and affiliates have entered into amendments to Bowater's U.S. and Canadian credit agreements. The amendment to the U.S. credit agreement was entered into among AbitibiBowater, Bowater, Newsprint South and certain subsidiaries and affiliates of Bowater and Newsprint South, certain lenders party thereto and Wachovia Bank, National Association, as administrative agent for the various lenders under that credit agreement. The amendment to the Canadian credit agreement was entered into among AbitibiBowater, Bowater, Bowater Newsprint South, Bowater Canadian Forest Products Inc., an indirect subsidiary of Bowater, and certain subsidiaries and affiliates of Bowater, Newsprint South and BCFPI, certain lenders party thereto and The Bank of Nova Scotia, as Administrative Agent for the lenders party to that credit agreement. The amendments to the credit agreements provide for lender consent to $12,000,000 of additional liquidity provided to BCFPI by Fairfax Financial Holdings Limited, and amend and modify each of Bowater's U.S. and Canadian credit agreements to, among other things: (i) increase the commitment under the Canadian credit agreement in an aggregate amount of $30,000,000 to add two additional tranches of loans, one tranche in the principal amount of $12,000,000, representing the Additional Liquidity previously funded, and the other in the principal amount of $18,000,000, representing loans funded upon the closing of the amendments, (ii) provide that the Additional Loans are not subject to the borrowing base requirements contained in the Canadian credit agreement, (iii) allow the collateral securing the Canadian credit agreement -- other than certain fixed assets of Newsprint South and certain of its subsidiaries -- to secure the Additional Loans on a last-out basis, (iv) temporarily increase the limit on the amount of foreign accounts receivable that may be included in the borrowing base, (v) modify the scheduled reductions to the commitment amounts under each agreement, and (vi) increase the interest rate under each agreement by 1.00%. A full-text copy of the Ninth Amendment and Consent, dated as of February 27, 2009 to the Credit Agreement dated as of May 31, 2006 by and among Bowater Incorporated, Bowater Newsprint South LLC, certain subsidiaries and affiliates of Bowater Incorporated and Bowater Newsprint South LLC party thereto, AbitibiBowater Inc., the Lenders and the Canadian Lenders party thereto and Wachovia Bank, National Association, as administrative agent for the Lenders party thereto, is available at no charge at: http://ResearchArchives.com/t/s?3a4d The aggregate principal amount of all outstanding Extensions of Credit and Canadian Extensions of Credit under the Wachovia facility: U.S. EXTENSIONS OF CREDIT (All U.S. Dollar Denominated) Revolving Credit Loans US$238,750,707.00 Swingline Loans US$0 Letters of Credit US$70,260,410.00 ----------------- Total U.S. Extensions of Credit US$309,011,117.00 CANADIAN EXTENSIONS OF CREDIT: Canadian Dollar Denominated Letters of Credit C$33,358,173.00 Canadian Dollar Denominated Revolving Credit Loans C$61,110,910.83 ----------------- Total Canadian Dollar Denominated Canadian Extensions of Credit C$94,469,083.83 US Dollar Denominated Letters of Credit US$586,532.00 US Dollar Revolving Credit Loans US$29,500,000 US Dollar Denominated Swingline Commitment US$10,000,000 ---------------- Total US Dollar Denominated Canadian Extensions of Credit US$40,086,532 A full-text copy of the Eleventh Amendment and Consent, dated as of February 27, 2009, to the Credit Agreement dated as of May 31, 2006 by and among Bowater Canadian Forest Products Inc., Bowater Incorporated, Bowater Newsprint South LLC, certain subsidiaries and affiliates of Bowater Incorporated, Bowater Canadian Forest Products Inc. and Bowater Newsprint South LLC party thereto, AbitibiBowater Inc., the Lenders and the U.S. Lenders party thereto and The Bank of Nova Scotia, as administrative agent for the Lenders party thereto, is available at no charge at: http://ResearchArchives.com/t/s?3a4e The aggregate principal amount of all outstanding U.S. Extensions of Credit and Extensions of Credit under the Bank of Nova Scotia Facility is: CANADIAN EXTENSIONS OF CREDIT Canadian Dollar Denominated Letters of Credit C$33,358,173.00 Canadian Dollar Denominated Revolving Credit Loans C$61,110,910.83 --------------- Total Canadian Dollar Denominated Canadian Extensions of Credit C$94,469,083.83 US Dollar Denominated Letters of Credit US$586,532.00 US Dollar Revolving Credit Loans US$29,500,000.00 US Dollar Denominated Swingline Commitment US$10,000,000.00 ---------------- Total US Dollar Denominated Canadian Extensions of Credit US$40,086,532.00 U.S. EXTENSIONS OF CREDIT Revolving Credit Loans US$238,750,707.00 Swingline Loans US$0.00 Letters of Credit US$70,260,410.00 ---------------- Total U.S. Extensions of Credit US$309,011,117.00 Citibank Waiver Until March 27 Abitibi-Consolidated Inc., a subsidiary of AbitibiBowater Inc., certain of Abitibi's subsidiaries and affiliates, Citibank N.A., Eureka Securitisation, plc and Citibank N.A., London Branch on February 26, 2009, entered into a waiver and amendment to Abitibi's Amended and Restated Receivables Purchase Agreement dated January 31, 2008. The parties entered into the Waiver and Amendment following the Agent's prior notification to Abitibi that the average of the delinquency ratios for the month of January and the two immediately preceding calendar months exceeded the maximum percentage permitted, which constituted an event of termination under the terms of the RPA. Pursuant to the Waiver and Amendment, the parties agreed to waive: (a) the event of termination under the RPA, and (b) Abitibi's potential non-compliance with the delinquency ratios, until the earliest of: (i) March 27, 2009, (ii) the date on which Abitibi or any of its affiliates enter into any amendment to Abitibi's term loan, and (iii) the date on which the term loan becomes due and payable or is prepaid or repaid in full. The Waiver and Amendment also reduced the maximum commitment under the RPA from $350 million to $210 million. As of February 27, 2009, Abitibi had roughly $201 million outstanding under the RPA. A full-text copy of the Waiver and Amendment No. 3 to Amended and Restated Receivables Purchase Agreement is available at no charge at: http://ResearchArchives.com/t/s?3a4f As consideration for entering into the Waiver and Amendment, Abitibi is required to pay a fee equal to 5% of $210 million, of which $7 million was paid on February 26, 2009 and $3.5 million must be paid on the earliest of (i) March 19, 2009, (ii) the Waiver Termination Date and (ii) the termination of the RPA. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of US$302 million on sales of US$1.7 billion for the third quarter 2008. These results compare with a net loss of US$142 million on sales of US$815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. As reported by the TCR on January 29, 2009, Moody's Investors Service downgraded the corporate family rating of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa3 from Caa1. The rating action, according to Moody's, was prompted by AbitibiBowater's weakened liquidity position and the deteriorating economic and industry conditions. "The Caa3 corporate family ratings of Abitibi and Bowater reflect a heightened probability of default in the near term given the anticipated challenges of refinancing or paying down their significant short term debt obligations through asset sales, either of which may prove to be difficult in the current market environment." The ratings of both Abitibi and Bowater also reflect the accelerating decline in demand for newsprint and other paper grades manufactured by both companies as consumers continue to migrate to online news and other forms of electronic media. The TCR reported on February 12, 2009, that Standard & Poor's Ratings lowered its long-term corporate credit rating on newsprint producers AbitibiBowater Inc. and subsidiaries Bowater Inc. and Bowater Canadian Forest Products Inc. two notches to 'CC' from 'CCC'. S&P also lowered the long-term corporate credit rating on Abitibi-Consolidated Inc. one notch to 'CCC-' from 'CCC'. ABITIBIBOWATER INC: Delays Filing of 2008 Annual Report ------------------------------------------------------- AbitibiBowater Inc. has yet to file with the U.S. Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2008. The Company explained it requires additional time to finalize its accounting for certain transactions and to complete its accounting analysis, primarily related to goodwill impairment and long-lived asset impairment, in connection with the finalization of its consolidated financial statements and related disclosures required in its annual report. The Company also requires additional time to more accurately reflect the outcome of a significant pending debt refinancing in its Form 10-K. The Company expects the offer by certain of its direct and indirect subsidiaries to exchange roughly $1.8 billion of debt securities for two series of new senior secured notes to have a significant impact on its financial condition, including its liquidity, capital resources and prospects for its future operations. On Friday, the Company also announced the second phase of its comprehensive recapitalization proposal with respect to its Abitibi-Consolidated Inc. subsidiary. The Recapitalization aims to reduce the company's debt by $2.4 billion and enhances liquidity. The Recapitalization of Abitibi-Consolidated will provide a stronger financial base for the execution of AbitibiBowater's operating strategy and enhance the long-term value of the company. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of US$302 million on sales of US$1.7 billion for the third quarter 2008. These results compare with a net loss of US$142 million on sales of US$815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. As reported by the TCR on January 29, 2009, Moody's Investors Service downgraded the corporate family rating of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa3 from Caa1. The rating action, according to Moody's, was prompted by AbitibiBowater's weakened liquidity position and the deteriorating economic and industry conditions. "The Caa3 corporate family ratings of Abitibi and Bowater reflect a heightened probability of default in the near term given the anticipated challenges of refinancing or paying down their significant short term debt obligations through asset sales, either of which may prove to be difficult in the current market environment." The ratings of both Abitibi and Bowater also reflect the accelerating decline in demand for newsprint and other paper grades manufactured by both companies as consumers continue to migrate to online news and other forms of electronic media. The TCR reported on February 12, 2009, that Standard & Poor's Ratings lowered its long-term corporate credit rating on newsprint producers AbitibiBowater Inc. and subsidiaries Bowater Inc. and Bowater Canadian Forest Products Inc. two notches to 'CC' from 'CCC'. S&P also lowered the long-term corporate credit rating on Abitibi-Consolidated Inc. one notch to 'CCC-' from 'CCC'. ABITIBIBOWATER INC: To Sell 60% Stake in Power Plant for C$615MM ---------------------------------------------------------------- AbitibiBowater Inc. has signed a non-binding agreement in principle with Hydro-Quebec for the sale of its 60% interest in the hydroelectric facility located on the Manicouagan River for gross proceeds of C$615 million. Both parties have committed to an expedited timeline, consistent with the company's comprehensive recapitalization plan. Due diligence for this transaction is currently under way. The facility, located in Quebec, Canada, was established in 1949 and has the capacity to generate roughly 335 MW of electricity. AbitibiBowater, through its Abitibi-Consolidated Company of Canada subsidiary, owns a 60% interest in the Facility. "This transaction is a key step in AbitibiBowater's overall plan to ensure greater liquidity and financial flexibility," stated David J. Paterson, President and Chief Executive Officer. "Deleveraging the Company's balance sheet is important to all AbitibiBowater stakeholders." The non-binding proposal for the sale of AbitibiBowater's 60% interest in the Facility is subject to certain terms and conditions, including, but not limited to, satisfactory due diligence, obtaining the required consents and approvals, the execution of definitive agreements -- including a long-term power supply agreement for AbitibiBowater's Baie-Comeau, Quebec paper mill -- and other customary conditions. No assurances can be provided as to when or if definitive agreements will be executed. The proposal does not include the sale of the Baie-Comeau mill, nor does it in any way impact other company hydroelectric facilities. Since last year, significant progress has been made in lowering the Baie-Comeau mill's operating costs and improving its highly competitive cost position. Given this transaction, the company is committed to undertake new investment opportunities at the site. AbitibiBowater has and will continue to keep workers and local communities informed about the sale of its interest in the Facility as the process advances. The Company owns additional hydro assets, including an installed share of capacity of 162.5 MW in the province of Quebec. In February 2009, AbitibiBowater completed the sale of roughly 76,724 hectares -- 189,508 acres -- of private timberlands in Quebec, Canada, for C$70 million in cash. AbitibiBowater plans to use the proceeds from this sale for general corporate purposes. The Seigneurie of Perthuis, located in the Mauricie region, was sold to a newly formed limited partnership composed of Societe de gestion d'actifs forestiers Solifor, s.e.c. and the principal shareholder of Scierie Dion & Fils inc., a local sawmill operator. The Seigneuries of Nicolas Riou and Lac Metis, both located in the Bas-Saint-Laurent region, were sold to two newly formed limited partnerships created by Societe de gestion d'actifs forestiers Solifor, s.e.c. Scotia Capital Inc. acted as exclusive financial advisor to AbitibiBowater for this sale process. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of US$302 million on sales of US$1.7 billion for the third quarter 2008. These results compare with a net loss of US$142 million on sales of US$815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. As reported by the TCR on January 29, 2009, Moody's Investors Service downgraded the corporate family rating of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa3 from Caa1. The rating action, according to Moody's, was prompted by AbitibiBowater's weakened liquidity position and the deteriorating economic and industry conditions. "The Caa3 corporate family ratings of Abitibi and Bowater reflect a heightened probability of default in the near term given the anticipated challenges of refinancing or paying down their significant short term debt obligations through asset sales, either of which may prove to be difficult in the current market environment." The ratings of both Abitibi and Bowater also reflect the accelerating decline in demand for newsprint and other paper grades manufactured by both companies as consumers continue to migrate to online news and other forms of electronic media. The TCR reported on February 12, 2009, that Standard & Poor's Ratings lowered its long-term corporate credit rating on newsprint producers AbitibiBowater Inc. and subsidiaries Bowater Inc. and Bowater Canadian Forest Products Inc. two notches to 'CC' from 'CCC'. S&P also lowered the long-term corporate credit rating on Abitibi-Consolidated Inc. one notch to 'CCC-' from 'CCC'. ABITIBIBOWATER INC: Unveils Plan to Reduce Debt by $2.4 Billion --------------------------------------------------------------- AbitibiBowater Inc. unveiled on Friday a second phase of its comprehensive recapitalization proposal with respect to its Abitibi-Consolidated Inc. subsidiary. The Recapitalization aims to reduce the Company's debt by $2.4 billion and enhances liquidity. The Recapitalization of Abitibi-Consolidated will provide a stronger financial base for the execution of AbitibiBowater's operating strategy and enhance the long-term value of the Company. All obligations to trade creditors and to employees, including under the company's pension and benefit plans, are unaffected by the Recapitalization and the transaction will ensure business continuity for them as well as for customers. These unsecured notes of Abitibi-Consolidated will be affected by the Recapitalization: * 7.875% notes due 2009; * 15.50% notes due 2010; * 8.55% notes due 2010; * 7.75% notes due 2011; * Floating rate notes due 2011; * 6.0% notes due 2013; * 8.375% notes due 2015; * 7.4% debentures due 2018; * 7.5% debentures due 2028; * 8.5% debentures due 2029; and * 8.85% debentures due 2030 The Recapitalization includes these key elements: -- The conversion of $2.9 billion of eligible unsecured notes issued by Abitibi-Consolidated into: (i) New Notes consisting of roughly $321 million aggregate principal amount of 12.5% First Lien Notes due March 31, 2014 and roughly $810 million aggregate principal amount of 11% Second Lien Notes due June 30, 2014, (ii) roughly 86.7 million shares of AbitibiBowater Common Stock, and (iii) an aggregate of roughly 230.7 million Warrants -- divided among Series A Warrants, Series B Warrants and Series C Warrants -- to purchase one share of AbitibiBowater Common Stock per warrant at an exercise price equal to, respectively, $1.00, $1.25 and $1.50 per share. -- A Concurrent Offering of roughly $389 million of First Lien Notes and 222.2 million Series D Warrants to purchase one share of AbitibiBowater Common Stock per warrant at $1.25 per share, for an aggregate purchase price of roughly $350 million. Certain investors have provided binding commitments to subscribe for $150 million thereof. AbitibiBowater and Abitibi-Consolidated are in advanced discussions to secure additional commitments. Qualifying noteholders may participate in the Concurrent Offering for an aggregate purchase price of up to $100 million of additional First Lien Notes. The uncommitted portion of the Concurrent Offering may be backstopped as permitted by market conditions. There can be no assurance that AbitibiBowater and Abitibi-Consolidated will enter into any Such additional commitments or backstops. -- The repayment in full of the company's $413 million 13.75% Secured Notes due 2011, and any accrued and unpaid interest thereon. -- Interest accrued but not paid as well as a portion of the Principal outstanding under the existing term loan facility due March 30, 2009, will be repaid cash such that the principal amount outstanding will be reduced to $200 million and the maturity date will be extended to March 31, 2012. -- The Commercial Division of the Superior Court of Quebec in Montreal will be asked to grant an interim order under the Canada Business Corporations Act in connection with the Recapitalization, including calling meetings of the affected noteholders and lenders. -- The Recapitalization is conditional upon, among other things: * final Court approval; * the completion of the sale of the company's 60% interest In Manicouagan Power Company. As reported in today's Troubled Company Reporter, the company has accepted a non-binding proposal from Hydro-Quebec which could result in gross proceeds of C$615 million; * the completion of the exchange offers, notes offering and private placement by AbitibiBowater's subsidiaries, Bowater Incorporated, Bowater Canada Finance Corporation and Bowater Finance II LLC.; * the closing of the Concurrent Offering resulting in gross proceeds of $350 million; * the completion of the amendment of the convertible notes of AbitibiBowater, into $190.0 million of new convertible notes of AbitibiBowater which will be convertible for AbitibiBowater's Common Shares at a price of $1.75 per share. * If approved, implementation of the Recapitalization is expected to occur by early May 2009. Noteholders holding in excess of roughly $1 billion of outstanding Abitibi Notes -- roughly 34% of the total outstanding -- have agreed to vote in favor of the Recapitalization. AbitibiBowater will solicit additional support for the Recapitalization from other noteholders, from its secured noteholders and from its lenders. "This Recapitalization is another important step in AbitibiBowater's ongoing efforts to deleverage the Company and refinance its current debt obligations," stated David J. Paterson, President and Chief Executive Officer. "The transaction offers substantial benefits to AbitibiBowater, increasing its financial stability while also reducing the Company's annual interest costs and improving overall liquidity." AbitibiBowater's Board of Directors has determined that the Recapitalization is in the Company's best interests and its stakeholders, given, among other reasons, that it will reduce net debt by roughly $2.4 billion, and significantly improves AbitibiBowater's capital structure. The Board of Directors relied on many factors in arriving at its determination, including recommendations by Company Management. AbitibiBowater's financial advisor, BMO Capital Markets has provided an opinion to the Board of Directors in connection with the transaction. "With this comprehensive Recapitalization, AbitibiBowater is significantly reducing its debt levels and improving its liquidity," said Dick Evans, Chairman of the Board of Directors. "The Board and management believe this solution creates a stronger Company in the interest of all stakeholders, and allows the Company to move forward with confidence to meet the needs of its customers." Effect on Affected Noteholders and Lenders If the Recapitalization is completed, affected noteholders and lenders will be affected as described below. (A) Abitibi Notes Noteholders will receive, for each $1,000 principal amount of Abitibi Notes, the principal amount of New Notes, and numbers of Common Shares and Warrants: Principal Amount of -------------- First Second Lien Lien Common Series A Series B Series C Eligible Notes Notes Notes Shares Warrants Warrants Warrants ---------------------------------------------------------------- ----- 7.875% Notes due 2009 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 15.50% Notes due 2010 $175 $320 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 8.55% Notes due 2010 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 7.75% Notes due 2011 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- Floating Rate Notes due 2011 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 6.0% Notes due 2013 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 8.375% Notes due 2015 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 7.4% Debentures due 2018 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 7.5% Debentures due 2028 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 8.5% Debentures due 2029 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- 8.85% Debentures due 2030 $75 $270 29.422 26.107 26.107 26.107 ---------------------------------------------------------------- ----- Accrued and unpaid interest up to April 1, 2009, will be satisfied through the issuance of First Lien Notes. In addition, in the Concurrent Offering for each $1,000 principal amount of Abitibi Notes held on the specified claims measurement date, qualifying noteholders will be entitled to -- but will not have the obligation to -- submit $33.95 in cash in consideration for $37.72 of additional First Lien Notes and 21.553 Series D Warrants to purchase one AbitibiBowater Common Share per warrant at exercise price of $1.25 per share. (B) Term Loan Facility Interest accrued but not paid, as well as a portion of the principal outstanding under the term loan facility due March 30, 2009 will be paid such that the principal amount outstanding will be reduced to $200 million. The term loan facility will also be replaced to, among other things, change the interest rate to LIBOR + 600 basis points and the maturity date to March 31, 2012. (C) Secured Notes The Secured Notes, and any accrued and unpaid interest, will be repaid in full in cash. Bowater Exchange Offer On Tuesday, Bowater Finance II LLC, an indirect wholly owned subsidiary of AbitibiBowater, extended the expiration date for its private exchange offers, consent solicitation and concurrent private notes offering until 11:59 p.m., New York City time, on March 13, 2009, unless further extended. The Exchange Offers, Consent Solicitation and Concurrent Notes Offering had been scheduled to expire at 11:59 p.m., New York City time, on March 9. As of March 9, roughly 54.5% of the outstanding 9.00% Debentures due 2009, 63.8% of the outstanding Floating Rate Senior Notes due 2010, 64.8% of the outstanding 7.95% Notes due 2011, 68.6% of the outstanding 9.50% Debentures due 2012, 79.2% of the outstanding 6.50% Notes due 2013 and 40.4% of the outstanding 9.375% Debentures due 2021 were validly tendered and not validly withdrawn in the Exchange Offers. BowFin commenced the Exchange Offers with respect to the outstanding debt securities issued by either Bowater Incorporated or its wholly owned subsidiary Bowater Canada Finance Corporation on February 9, 2009. In connection with the Exchange Offers, the AbitibiBowater and Bowater entered into exchange and support agreements with certain holders of Bowater Notes. As of February 20, 2009, the company and Bowater have entered into Support Agreements with holders of roughly $846 million in aggregate principal amount of Bowater Notes, which represents roughly 47% of the outstanding Bowater Notes and roughly 74% of the Bowater Notes that are required to achieve the minimum tender condition in the Exchange Offers. Since February 9, the company and Bowater have also entered into additional backstop commitment agreements with certain holders of Bowater Notes. The Exchange Offers and Concurrent Notes Offering are being made only to qualified institutional buyers inside the United States and to certain non-U.S. investors located outside the United States. Meetings of Noteholders and Lenders The Commercial Division of the Superior Court of Quebec in Montreal will be asked to call meetings of the holders of Abitibi Notes, holders of Secured Notes and lenders under the Senior Term Loan Facility respectively to obtain their approvals for the Recapitalization under the CBCA. Details of the Recapitalization will be provided in an information circular expected to be sent to noteholders, secured noteholders and lenders by early April 2009, and the meetings are expected to be held at the Fairmont Queen Elizabeth Hotel, 900 Rene-Levesque Blvd West Montreal, QC H3B 4A5, Canada on or about April 30, 2009. Issuance of Common Shares and Warrants and Related Stock Exchange Matters AbitibiBowater intends to issue Common Shares and warrants convertible into Common Shares that would, on a fully-diluted basis, constitute in excess of 90% of the currently outstanding Common Shares. The transaction and such issuance would normally require approval of the AbitibiBowater stockholders according to the Shareholder Approval Policy of the New York Stock Exchange. However, in connection with the approval of the Recapitalization, and pursuant to an exception provided by the NYSE's Shareholder Approval Policy, the Board of Directors and Audit Committee of AbitibiBowater determined that the delay in the Recapitalization that would be caused if AbitibiBowater were to secure stockholder approval prior to the launch and publication of the Recapitalization, given the pending maturities of Abitibi-Consolidated's debt instruments, severe constraints on Abitibi-Consolidated's liquidity, and the current state of the credit and capital markets, would seriously jeopardize AbitibiBowater's financial viability. Accordingly, AbitibiBowater's Board of Directors and Audit Committee, pursuant to an exception provided by the NYSE Shareholder Approval Policy, expressly approved AbitibiBowater's omission to seek stockholder approval of the Recapitalization that would otherwise have been required. The NYSE has accepted AbitibiBowater's application of the exception. In reliance on the exception and in accordance with NYSE policy, AbitibiBowater is mailing a letter to all its stockholders notifying them of its intention to issue the Common Shares and warrants convertible into Common Shares without seeking their approval. AbitibiBowater also intends to rely on an exemption from the Toronto Stock Exchange stockholder approval requirements, permitted by Section 602(g) of the TSX Company Manual, by relying on such exception of the NYSE, AbitibiBowater's principal trading exchange. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of US$302 million on sales of US$1.7 billion for the third quarter 2008. These results compare with a net loss of US$142 million on sales of US$815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. As reported by the TCR on January 29, 2009, Moody's Investors Service downgraded the corporate family rating of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa3 from Caa1. The rating action, according to Moody's, was prompted by AbitibiBowater's weakened liquidity position and the deteriorating economic and industry conditions. "The Caa3 corporate family ratings of Abitibi and Bowater reflect a heightened probability of default in the near term given the anticipated challenges of refinancing or paying down their significant short term debt obligations through asset sales, either of which may prove to be difficult in the current market environment." The ratings of both Abitibi and Bowater also reflect the accelerating decline in demand for newsprint and other paper grades manufactured by both companies as consumers continue to migrate to online news and other forms of electronic media. The TCR reported on February 12, 2009, that Standard & Poor's Ratings lowered its long-term corporate credit rating on newsprint producers AbitibiBowater Inc. and subsidiaries Bowater Inc. and Bowater Canadian Forest Products Inc. two notches to 'CC' from 'CCC'. S&P also lowered the long-term corporate credit rating on Abitibi-Consolidated Inc. one notch to 'CCC-' from 'CCC'. ABITIBIBOWATER INC: DBRS Comments on Proposed Recapitalization -------------------------------------------------------------- AbitibiBowater Inc. has announced that it is planning the recapitalization of its Abitibi-Consolidated Inc. subsidiary to reduce debt and improve liquidity. The recapitalization plan includes the conversion of existing debt into a combination of new debt, ABH common shares and warrants; a concurrent offering of additional warrants; the repayment of maturing debt; and cash generated from the pending sale of the Company's interest in the Manicouagan Power Company (Manicouagan). Dominion Bond Rating Service said views the announcement as positive for ABH, but a rating action is currently not warranted. The ratings of the Company and its subsidiaries remain Under Review with Negative Implications, given the execution risk related to the proposed restructuring as several conditions must be met for approval of the plan and the significant near-term liquidity risk faced by ABH. The recapitalization plan for its Abitibi-Consolidated Inc. subsidiary includes the conversion of $2.9 billion of eligible unsecured notes into a combination of (1) new notes totaling roughly $1.1 billion (including $321 million in 12.5% first-lien notes due March 2014 and $810 million 11% second-lien notes due June 2014), (2) roughly 86.7 million ABH common shares and (3) roughly 230.7 million warrants (Series A to C). In addition, a concurrent offering of $389 million in first-lien notes and 222.2 million warrants (Series D) for an aggregate purchase price of $350 million. Certain investors and noteholders will have the option for an additional $150 million in warrants and $100 million in first-lien notes, respectively. Furthermore, the Company has proposed the repayment of its $413 million 13.75% secured notes due 2011 and a portion (up to $200 million outstanding) of its existing term loan (and maturity extended to 2012 from March 30, 2009) with cash. As part of the recapitalization, ABH expects to generate gross proceeds of C$615 million from the sale of its 60% interest in its hydroelectric facility located on the Manicougan River in Quebec, which follows the previously announced sale of its interest in hydroelectric facilities in Ontario for gross proceeds of C$197.5 million Upon successful completion of the proposed recapitalization, ABH expects to reduce debt by $2.4 billion, reduce annual interest expense by $162 million and provide $350 million of new capital. However, while the recapitalization is expected to be completed in May 2009, it is conditional on several factors, including (1) final court approval; (2) completion of the Manicouagan sale; (3) completion of the previously announced exchange offers, notes offering and private placement by Bowater Inc., Bowater Canada Finance Corp. and Bowater Finance II LLC (all wholly owned ABH subsidiaries -- as announced on February 9, 2009); (4) the closing of the concurrent $350 million warrants offering; and (5) completion of the amendment of the convertible notes of ABH into $190 million of new convertible notes of the Company, which will be convertible for ABH's common shares (for $1.75 per share). The several approvals that are required lead to material execution risk facing ABH in completing the plan. DBRS notes that the completion of the recapitalization plan as proposed would be positive for the Company's credit profile. The elimination of debt maturing in 2009 and 2010 would help the Company survive a prolonged economic slump without the near-term risk of a liquidity crisis. The Company indicated that noteholders with more than $1 billion in outstanding ABH notes (roughly 34%) have so far agreed to vote in favour of the recapitalization, which is also positive. However, there remains uncertainty regarding ABH's ability to complete the plan and, as a result, manage the current liquidity crisis that it is facing. ABITIBIBOWATER INC: DBRS Junks Rating on Canadian Forest Products ----------------------------------------------------------------- Dominion Bond Rating Service said its rating on AbibitiBowater, Bowater Canadian Forest Products Inc.'s Senior Debentures -- issued a March 3, 2009, news statement -- was incorrect. The correct rating for the Senior Debentures is CCC. DBRS assigned default recovery ratings of RR1 to the secured debt of Abitibi Consolidated Company of Canada and RR4 to the unsecured debt of Abitibi Consolidated Inc. (Abitibi) and subsidiary companies. DBRS has also assigned default recovery ratings of RR1 to the secured debt of Bowater Inc. (Bowater) and subsidiaries and RR5 to the unsecured debt of Bowater Inc. and subsidiaries. Pursuant to DBRS's Leveraged Finance Rating Methodology, default ratings are the result of hypothetically stressing the Company's operations to the point of default, assessing the market value of the company as a going concern at the point of default, and then calculating the likelihood of recovering the company's secured and unsecured debt. A RR1 recovery rating anticipates a recovery of 90% to 100% of the principal, a RR4 recovery rating 30% to 50%, and a RR5 recovery rating 10% to 30%. The ratings of AbitibiBowater Inc. (ABH or the Company) and its subsidiary companies remain Under Review with Negative Implications, where they were placed on October 30, 2008, due to the refinancing risk facing the Company over the near term, the direct result of the ongoing global credit crisis and deteriorating industry fundamentals. DBRS is concerned that substantial debt maturities and limited cash availability may adversely affect ABH's ability to successfully refinance debt maturities in the next 12 months. The successful completion of a recently announced exchange offer of second and third lien notes and the new issue of first lien notes by Bowater Finance would eliminate the near-term refinancing risk of one of ABH's subsidiaries. However, Abitibi-Consolidated Company of Canada still has a $347 million term loan due the end of March 2009, and a successful refinancing or repayment of this loan would be required to remove the Under Review with Negative Implications designation. The successful completion of the Bowater exchange offer would also necessitate a change in Bowater's recovery rating. The outlook for newsprint, market pulp and lumber markets, the key drivers of ABH's earnings and cash flows, remains bleak. The rate of decline in North American newsprint consumption has increased in recent months and will require aggressive production curtailments to support current product prices. Failure to keep supply close to demand would trigger another downward trend in prices that would negatively impact earnings and cash flows. In addition, reduced global economic activity has lowered demand for all paper and packaging products and the associated raw material, market pulp. Rapidly rising pulp inventories have negatively impacted pulp prices, a condition that is expected to be maintained through H12009, adding further pressure on corporate earnings. As a result, the near-term profitability outlook for ABH is negative as the benefits of a weaker Canadian dollar and stable, albeit low, lumber demand and prices (lumber demand and prices are close to trough levels for this cycle) are outweighed by the negative influence of weaker pulp and newsprint markets. ABH's credit profile is expected to worsen from 2008 levels. ALIQUIPPA COMMUNITY: Laid Off Workers Demand Payment of Salaries ---------------------------------------------------------------- WPXI.com reports that almost 200 former Aliquippa Community Hospital workers have gone to court, claiming that the Company still owes them money for working about two months when they weren't compensated. According to WPXI.com, the former employees said that Aliquippa Community which closed in December. WPXI.com states that the former workers claimed that the Company still owes them money for working about two months when they weren't compensated. Citing the former workers, WPXI.com relates that Aliquippa Community was required to provide 60 days notice before it could shut down. The workers, WPXI.com states, said that they weren't informed that the hospital was going to close. "It's been difficult. I mean, we all have money to pay off. And where is the money coming from? The executives got their money, and they were still getting it," WPXI.com quoted former employee Marcy Hughes as saying. Headquartered in Aliquippa, Pennsylvania, Aliquippa Community Hospital is a 104-acute care hospital established in 1957. The hospital employs 480 people, with a medical staff of 200 and 90 volunteers enrolled in the volunteer program. The hospital provides extensive community health education programs and works with other community organizations in providing primary care in medically underserved areas. The Company filed a Chapter 11 petition on Sept. 5, 2002 (Bankr. W.D. Penn. Case No. 02-29616). Anthony L. Lamm, Esq., at Groen, Laveson, Goldberg & Rubenstone, and David W. Lampl, Esq., at Leech Tishman Fuscaldo & Lampl, LLC, represented the Debtor in its restructuring efforts. The Court confirmed the Debtor's plan on Sept. 23, 2004. AMERICAN APPAREL: Enters Into Private Financing Pact With Lion --------------------------------------------------------------- American Apparel, Inc., has entered into a private financing agreement with Lion Capital LLP for $80 million in secured second lien notes maturing December 31, 2013 with detachable warrants. The transaction was expected to close on March 13, 2009. "We are excited that Lion Capital, a leading private equity firm in the consumer sector, has decided to make a substantial investment in American Apparel. In light of unprecedented market conditions, we believe Lion Capital's investment serves as a strong endorsement of our company and the tremendous potential of our brand," said Dov Charney, Founder and CEO of American Apparel. "This investment provides us with a long term solution for our capital structure and an enhanced ability to grow our brand both domestically and internationally over the coming years. Lion Capital's singular focus on the consumer sector and their extensive experience with growing consumer brands makes them an ideal partner as American Apparel continues to develop into a leading, global apparel brand." "We are extremely pleased to have the opportunity to partner with Dov and the management team at American Apparel. The strong growth of the brand over the last few years is a testament to Dov's vision and business acumen and we believe the company will continue that exciting growth into the future, both in the United States and around the world," said Neil Richardson, Partner of Lion Capital. "American Apparel fits well with our focus of investing in strong, differentiated consumer brands and we look forward to a successful and enjoyable collaboration with Dov and his team." The notes will have a coupon of 15%, payable in cash or payable in-kind (PIK) at the Company's option. The notes are callable at any time at par plus accrued interest. The notes provide for a security interest in all assets of the company and its subsidiaries, subject to prior liens with respect to such assets under the Company's existing revolving credit facility. Lion Capital also received detachable warrants for an aggregate amount of 16 million shares of the Company's common stock, exercisable at a strike price set at a 5% premium to the 30- trading day, trailing stock price average as of market close on March 12, 2009, which equates to $2.00 per share. The warrants expire in March 2016. Assuming conversion of the warrants into common stock, the warrants would equate to a pro forma ownership in American Apparel of approximately 18%. In connection with the investment, Neil Richardson and Jacob Capps of Lion Capital intend to join the board of directors of American Apparel. American Apparel will use the proceeds of the investment to retire in full the outstanding amounts on the Company's existing second lien credit facility with SOF Investments, L.P. -- Private IV, an affiliate of MSD Capital, L.P. Consequently, American Apparel will not issue any additional warrants to SOF Investments as provided in the December 2008 amendment to the SOF Investments credit agreement. American Apparel will use the remaining proceeds principally to reduce the outstanding balance under the Company's revolving credit facility, repay a portion of a shareholder note, pay fees and expenses related to the transaction, and for working capital purposes. Financo Inc. served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to American Apparel in this transaction. Simpson Thacher & Bartlett LLP served as legal advisor to Lion Capital. About American Apparel American Apparel, Inc. (NYSE Alternext US: APP) -- http://store.americanapparel.net-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel based in downtown Los Angeles, California. As of October 31, 2008, American Apparel employed more than 10,000 people and operated more than 230 retail stores in 19 countries, including the United States, Canada, Mexico, United Kingdom, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea, Austria, China, and Brazil. American Apparel also operates a leading wholesale business that supplies T-shirts and other casual wear to distributors and screen printers. In addition to its retail stores and wholesale operations, American Apparel operates an online retail e-commerce Web site at http://store.americanapparel.net. American Apparel had $329.0 million in total assets, including $201.3 million in current assets; and $196.3 million in total debts, including $172.1 million in current debts as of September 30, 2008. As reported by the Troubled Company Reporter on Nov. 18, 2008, American Apparel said that it violated a covenant in its SOF Credit Agreement that prohibited it from making capital expenditures in excess of $50 million for the fiscal year ending December 31, 2008. The default under the SOF Credit Agreement also resulted in a cross default under the revolving credit facility with LaSalle Bank. On December 19, 2008, American Apparel, Inc., said it has entered into amendments to its revolving credit facility and its second lien credit facility which extend the maturities of these loans for three months. The amendments, which also modify certain covenants and impose additional obligations, provide the company with the ability to operate its business according to its plan while continuing discussions with its lenders and other parties regarding longer-term financing. The Company has filed copies of these amendments and related documentation with the Securities and Exchange Commission on a Form 8-K, available for free at http://researcharchives.com/t/s?3926 AMERICAN INT'L: Will Pay Unit Workers $450 Million in Bonuses ------------------------------------------------------------- Liam Pleven at The Wall Street Journal reports that American International Group Inc. will pay about $450 million in bonuses to workers at its financial products unit. WSJ relates that the $450 million in payments to those workers was disclosed in January 2009. The unit, says WSJ, caused AIG massive losses and was mainly responsible for the Company's collapse in 2008. WSJ states that AIG CEO Edward Liddy mentioned in a letter sent to Treasury Secretary Timothy Geithner on Saturday that they met on Wednesday to talk about "compensation arrangements" at the financial products unit and AIG in general. According to WSJ, Mr. Liddy said, "Quite frankly, AIG's hands are tied." The next payments to the financial products unit were due on Sunday, WSJ relates, citing Mr. Liddy. Those payments, says WSJ, are in addition to $121.5 million in last year's incentive bonuses that AIG will begin paying this month to about 6,400 of its 116,000 workers. According to the report, AIG is also making over $600 million in retention payments to over 4,000 employees. The three programs could result in $1.2 billion in retention and bonus payments, the report states. "Outside counsel" had advised that the previously agreed payments to the financial products unit workers are "legal, binding obligations of AIG," and there are "serious legal, as well as business, consequences for not paying," WSJ says, citing Mr. Liddy. "I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them.... Honoring contractual commitments is at the heart of what we do in the insurance business," the report quoted Mr. Liddy as saying. Citing AIG, WSJ states that the payments to the workers at the unit were agreed to last year before the government bailout. AIG said that about $55 million was paid out in December 2008, according to WSJ. According to WSJ, Mr. Liddy said in his letter to Mr. Geithner that AIG, in response to the Treasury official's request, is proposing further changes to bonus proposals for the Company's senior partners. Mr. Liddy said that he and other top executives will get no 2008 bonus, WSJ relates. Mr. Liddy, says the report, warned that AIG "cannot attract and retain the best and brightest talent . . . if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury." WSJ reports that the $121.5 million in bonuses for 2008 will mostly be paid in March. According to the report, AIG's top seven employees at the company won't get bonuses, and 40 high ranking executives will get the bonuses in part this month and in part later in the year. The bonus payments will be linked to AIG's performance in meeting goals like the implementation of parts of the restructuring of the Company, the report states. Top White House economic adviser Lawrence Summers described the AIG bonuses "outrageous," but said that the government can't simply abrogate the contracts that AIG managers had with executives, WSJ relates. Rep. Barney Frank, the House Financial Services Committee chairperson, said that stricter limits should have been put on AIG from the start of the government bailout, WSJ states. The Obama administration has "gotten tougher" on banks and other companies seeking bailouts than the Bush administration was, the report says, citing Mr. Frank. Counterparties to CDS, GIA & Securities Lending Transactions AIG, recognizing the importance of upholding a high degree of transparency with respect to the use of public funds, is disclosing information identifying certain credit default swap counterparties, municipal counterparties, and securities lending counterparties. Before disclosing this information, AIG consulted with the Federal Reserve about the potential public benefit of counterparty disclosure and the potential that the disclosure would cause competitive harm to the Company or its counterparties. Severe valuation losses on the super senior multi-sector credit default swap portfolio of AIG Financial Products Corp. (AIGFP) triggered collateral provisions in the swap contracts, creating a liquidity crisis for AIG in September 2008. The Federal Reserve Bank of New York (FRBNY) provided an emergency $85 billion loan to AIG to meet short-term cash needs. The aid received by AIG helped avoid severe financial disruptions by providing liquidity to important financial institutions and municipalities. Using funds from the emergency loan, financial counterparties received a total of $22.4 billion in collateral relating to CDS transactions from AIGFP between September 16, 2008, and December 31, 2008. This amount represents funds provided to those counterparties after the date on which AIG began receiving government assistance. The counterparties received additional collateral from AIG prior to September 16, 2008. These counterparties are listed at attachment A at: http://ResearchArchives.com/t/s?3a50 On November 10, 2008, AIG and the FRBNY established Maiden Lane III, a financing entity, to purchase the securities underlying certain CDS contracts from the counterparties to such contracts, allowing the cancellation of the contracts. The payments that Maiden Lane III made to the counterparties are listed at attachment B. Municipalities in the states listed on Attachment C received a total of $12.1 billion from AIGFP between September 16, 2008, and December 31, 2008, in satisfaction of Guaranteed Investment Agreement (GIA) obligations. GIAs are structured investments with a guaranteed rate of return. Municipalities typically use GIAs to invest the proceeds from bond issuances until the funds are needed. Public aid was also used to satisfy obligations to financial counterparties related to AIG's securities lending operations. Securities lending counterparties listed on Attachment D received $43.7 billion from September 18, 2008, to December 31, 2008. AIG has used the balance of the public aid it received during that time period for other purposes, including the funding of Maiden Lane II and III, debt repayment and capital support for some of its businesses. Mr. Liddy said that the counterparty and collateral information show that billions in government assistance flowed to dozens of financial counterparties and municipalities during a time of acute stress in the economy. Mr. Liddy emphasized that AIG's disclosure of the counterparties does not change AIG's commitment to maintaining the confidentiality of its business transactions. "Our decision to disclose these transactions was made following conversations with the counterparties and the recognition of the extraordinary nature of these transactions," Mr. Liddy said. About American International Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on September 8, 2008, to $4.76 on September 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On September 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At September 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since September 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to September 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At September 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the US Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. APARTMENT INVESTMENT: S&P Puts 'BB+' to WatchNeg From Stable ------------------------------------------------------------ Standard & Poor's Ratings Services recently took rating actions on 10 U.S. real estate investment trusts: S&P lowered its ratings on two companies and placed S&P's ratings on nine companies on CreditWatch with negative implications. These actions affect roughly 16% of S&P's rated 62-company universe and were prompted by continued constrained access to debt and equity capital for many REITs and S&P's concern that sharply deteriorating economic conditions will result in greater pressure on portfolio-level cash flows than previously contemplated. In the current environment, S&P remains very highly focused on REIT liquidity and balance sheet strength. In S&P's view, heavy credit revolver usage (in excess of 50%), weak debt service coverage, and an over-reliance on earnings from fee-driven and/or asset sales activity are key areas of focus. With regard to REIT common dividend coverage, S&P would view even the modest funding of a dividend shortfall with debt as a negative credit factor, given the balance-sheet implications and the need for REITs to preserve precious liquidity in the current environment. From a property fundamentals standpoint, most sectors will come under stress this year, though to varying degrees. The sharp curtailment in consumer spending since last fall is hitting retailers hard, which has increased tenant default risk for retail and net-lease REIT portfolios. Retrenching or contracting commercial tenants will pressure occupancy and rents for office and industrial landlords. And recently accelerating job losses may now have a negative impact on the currently better-positioned multifamily and self-storage sectors. While S&P consider most healthcare REIT property portfolios to be currently fairly defensively postured, even this asset class could come under pressure if government and private insurer reimbursement schemes are meaningfully altered. As it stands now, S&P believes that the downside scenario that S&P considered last fall (see "The Recession May Bring More Negative Rating Actions To U.S. REITs And Real Estate Operating Companies," published Nov. 7, 2008) may be coming to pass. At that time, S&P took negative rating actions on 19 companies. Now, with the recession shaping up to be deeper and longer than S&P originally modeled for, S&P believes more REIT ratings will come under pressure. While S&P believes the bulk of the REITs that S&P rate face relatively manageable 2009 capital needs, 2010 and 2011 could be more challenging, absent an improvement in capital market conditions and/or a nearer-term economic turnaround. Despite these broader negative trends facing the sector, S&P continues to evaluate each rated REIT on its own merits and believe most companies remain highly focused on maintaining and/or improving their liquidity positions. While property transaction volumes have contracted substantially on a national level, the generally higher quality of REIT property holdings has enabled many companies to continue to sell assets and source attractively priced secured mortgage financing. In addition, development pipelines are contracting (which should reduce future funding needs) and a number of REITs are either cutting their dividends or considering stock dividends in an effort to retain more capital. S&P also acknowledges that the current capital and asset pricing dislocations in the market will eventually present very attractive investment opportunities for those REITs with dry powder. Most of the companies affected by S&P's recent rating actions previously carried negative outlooks. With respect to the nine CreditWatch actions, S&P expects to completes its analyses and resolve the placements within the month, in conjunction with a full review of all U.S. REIT ratings. Please see RatingsDirect for complete, company-specific articles that address each of S&P's rating actions. S&P will publish additional REIT ratings commentary in early April and S&P will hold a teleconference to discuss S&P's broader U.S. REIT ratings perspective on Thursday April 9, 2009. Creditwatch Listings Property Focus To From -------- -- ---- Apartment Investment & Management Co. Multifamily BB+/Watch Neg BB+/Stable BRE Properties Inc. Multifamily BBB/Watch Neg BBB/Stable Capital Net Lease Automotive LLC (auto) BB/Watch Neg BB/Neg Colonial Properties Multifamily BBB-/Watch Neg BBB- /Neg Developers Diversified Realty Corp. Retail BBB-/Watch Neg BBB- /Neg Hospitality Properties Trust Net Lease (hotel) BBB/Watch Neg BBB/Neg ProLogis Industrial BBB-/Watch Neg BBB- /Neg UDR Inc. Multifamily BBB/Watch Neg BBB/Stable Rating Changes Property Focus To From -------- -- ---- Camden Property Trust Multifamily BBB/Stable BBB+/Neg First Industrial Industrial BB/Watch Neg BBB- /Neg APPALACHIAN OIL: Closes Convenience Store in Virginia ----------------------------------------------------- The Bristol Herald Courier reports that Appalachian Oil Co. has closed its convenience store in Virginia, after months of struggling to stay in business. As reported by the Troubled Company Reporter on March 11, 2009, the Hon. Marcia Parsons of the U.S. Bankruptcy Court for the Eastern District of Tennessee allowed Appalachian Oil to use cash collateral to pay workers, overdue health insurance premiums, and utility deposits. Appalachian Oil paid its 451 workers on Monday. Titan Global CEO Bryan Chance assured U.S. Trustee Patricia Foster that he and his team are near at securing "debtor in possession" financing so that Appalachian Oil can reorganize and put gas and products back into its 58 stores. Ms. Foster asked whether Titan Global was considering selling the stores if the DIP financing didn't come through. "We would entertain that, but I don't think given the financial climate we're in it would achieve the desired outcome for [secured creditor] Greystone Business Credit or the unsecured creditors," Convenience Store News reports quoted Mr. Chance as saying About Appalachian Oil Bountville, Tennessee-based Appalachian Oil Co. is a fuel distributor and operator of 60 convenience stores. It has 22.5 million-gallon terminal serving customers in six states. Appalachian Oil sought Chapter 11 protection before the U.S. Bankruptcy Court for the Eastern District of Tennessee on February 9, 2009. The Company's creditors with the biggest unsecured claims are BP Plc's Amoco/BP, owed $2.41 million, and fuel distributor Crescent Oil Co., owed $1.64 million. ATHEROGENICS INC: Disclosure Statement Hearing Set for March 31 --------------------------------------------------------------- Atherogenics Inc. will present the disclosure statement to its proposed Chapter 11 plan to the U.S. Bankruptcy Court for the Northern District of Georgia on March 31, 2009, at 11:00 a.m. At the hearing, the Court will consider whether the Disclosure Statement contains adequate information necessary for creditors to make an informed judgement of the Chapter 11 plan filed on Feb. 11, 2009. Upon obtaining approval of the Disclosure Statement, the Debtor intends to solicit support, and confirmation, of the Plan based on this schedule: -- April 1, 2009, record date for determination of creditor/equity holder status; -- April 6, 2009, deadline for mailing solicitation packages; -- April 10, 2009, deadline for newspaper publication; -- May 5, 2009, deadline for receipt of ballots; -- May 5, 2009, deadline for objections to plan confirmation; -- May 5, 2009, deadline for filing Rule 3018(a) motions; -- May 11, 2009, deadline for submission of tabulation report; -- May 12, 2009, hearing on Rule 3018(a) motions; and -- May 12, 2009, plan confirmation hearing. The Debtor believes that the Plan, which provides for the sale of its non-cash assets through an auction process, would best serve the interests of creditors, and provides a substantially greater return to holders of Claims than would a liquidation under Chapter 7 of the Bankruptcy Code. In line with this objective, the Debtor has retained Merriman Curhan Ford & Co. to conduct an extensive marketing effort in order to identify potential purchasers or investors. Plan Summary Pursuant to the Plan, all property of the Debtor and its Estate, including Cash, will vest automatically in the Post-Confirmation Debtor and the Liquidating Fund on the Plan's Effective Date, free and clear of all liens, claims, and interests. A Liquidating Agent will be appointed to administer any assets in the Liquidating Fund and to make distributions to holders of claims pursuant to the terms of the Plan. The Post-Confirmation Debtor will be vested with all of the Debtor's previously unsold assets (including its Causes of Action), which will be administered, liquidated, prosecuted, settled, and enforced under the direction and control of the Liquidating Agent. The Debtor will continue to exist after the Effective Date as a separate corporate entity, pursuant to an Amended Certificate of Incorporation and an Amended By Laws, pending the subsequent dissolution of the Post-Confirmation Debtor after the Final Distribution Date. Classes and Treatment of Claims The Plan segregates the various claims against and interests into nine separate classes: Class Description Treatment ----- --------------------- ---------------------------- 1 Secured Claims Unimpaired; Deemed to Accept 2 Priority Claims Unimpaired; Deemed to Accept 3 2008 Note Holder Impaired; Entitled to Vote Claims 4 2011 Note Holder Impaired; Entitled to Vote Claims 5 2012 Note Holder Impaired; Entitled to Vote Claims 6 General Unsecured Impaired; Entitled to Vote Claims 7 Rejection Damages Impaired; Entitled to Vote Claims 8 Unsecured Convenience Impaired; Entitled to Vote Claims 9 Interests Impaired; Deemed to Reject Ballots will be furnished only to holders of claims in Classes 3, 4, 5, 6, 7, and 8 for the purpose of soliciting their votes on the Plan. Classes 1, 2, and 3 are unimpaired and are, therefore, deemed to accept the Plan. Holders of Interests in Class 9 will not receive or retain any property under the Plan of account of such Interests and are, therefore, deemed to reject the Plan and are not entitled to vote. Pursuant to the Plan, holders of General Unsecured Claims under Class 6, holders of 2008 Convertible Notes under Class 3, holders of 2011 Convertible Notes under Class 4, holders of 2012 Convertible notes under Class 5, and holders of Rejection Damages Claims under Class 7 will all receive on the Initial Distribution Date and continuing on each subsequent Distribution Date up to and including the Final Distribution Date a pro rata Distribution of any available Liquidation Proceeds that remain after the payment and satisfaction of Allowed Administrative Expense Claims, Allowed Priority Tax Claims, Allowed Gap Period Claims, and Allowed Claims in Classes 1, 2 and 8, subject to Retained Proceeds. Holders of Unsecured Convenience Claims under Class 8 will receive, on either (i) the first Distribution Date after the applicable Claims Objection Deadline has occurred, if no objection to such Claim has been timely filed or (ii) the first Distribution Date after the date on which any objection to such Unsecured Convenience Claim is settled, withdrawn or overruled pursuant to a Final Order of the Bankruptcy Court, in full and final satisfaction of such Holder's Allowed Class 8 Claim, a one-time Cash payment in an amount equal to [_] percent ([_]%) of the Holder's Allowed Class 8 Claim. All Interests of the Debtor that are held by a person other than the Debtor, if any, will be deemed cancelled and extinguished. Holders of Class 9 interests will not receive any Distribution on account of such Interests. "Cramdown" Provision of the Bankruptcy Code Assuming that at least one Impaired Class votes to accept the Plan, the Debtor intends to invoke Section 1129(b) of the Bankruptcy Code, which permits the confirmation of a plan notwithstanding the non-acceptance by one or more impaired classes of Claims or Interests. Under this provision of the Bankruptcy Code, a plan may be confirmed if (a) the plan has been accepted by at least one impaired class of claims and (b) the Court determines that the plan does not discriminate unfairly and is "fair and equitable" with respect to the non-accepting classes. A full-text copy of Atherogenics, Inc.'s Disclosure Statement explaining its Chapter 11 Plan is available at: http://bankrupt.com/misc/Atherogenics.DisclosureStatement.pdf About AtheroGenics Inc. Headquartered in Alpharetta, Georgia, AtheroGenics, Inc. -- http://www.atherogenics.com/-- is a research-based pharmaceutical company focused on the discovery, development and commercialization of drugs for the treatment of chronic inflammatory diseases, including diabetes and coronary heart disease. It has one late stage clinical drug development program. On September 15, 2008, five creditors holding claims totaling $20,413,000 pursuant to the company's 4.5% Convertible Notes Due 2008 filed an involuntary Chapter 7 petition against the Debtor (Bankr. N.D. Georgia Case No. 08-78200). The petitioning noteholders were: -- AQR Absolute Return Master Account, L.P.; -- CNH CA Master Account, L.P.; -- Tamalpais Global Partner Master Fund, LTD; -- Tang Capital Partners, LP; and -- Zazove High Yield Convertible Securities Fund, L.P. On October 6, the Debtor filed its consent to entry for order for relief and motion to convert its Chapter 7 case to one under Chapter 11 (Bankr. N.D. Ga. Case No. 08-78200). James A. Pardo, Jr., Esq., and Michelle Carter, Esq., at King & Spalding, LLP, represent the Debtor as counsel. Akin Gump, Esq., at Strauss Hauer & Feld LLP, and Frank W. DeBorde, Esq., at Morris, Manning & Martin, LLP, represent the Official Committee of Unsecured Creditors as counsel. The Debtor selected Administar Services Group LLC as Claims Agent. As reported in the Troubled Company Reporter on Feb. 21, 2009, at December 31, 2008, the Debtor had total assets of $51,659,219, total liabilities of $307,171,466, and a stockholders' deficit of $255,512,247. ATHEROGENICS INC: Selects Stalking Horse Bidder for AGI-10167 ------------------------------------------------------------- Atherogenics Inc. asks the U.S. Bankruptcy Court for the Northern District of Georgia to approve auction procedures for its primary non-cash assets AGI-10167, an antioxicant and anti-inflammatory drug candidate. The Debtor proposes to sell its assets on an expedited basis. The Debtor proposes: -- a March 23, 2009 deadline to submit bids. -- a sale hearing then an auction on March 24, 2009. The Debtor is now in talks with King & Spalding LLP, designated stalking-horse bidder, regarding the sale of its assets. The parties are nearing an agreement that will provide for these terms: -- Purchase Price: $2,000,000, paid in immediately available funds at closing; -- Purchased Assets: substantially all of the Debtor's assets other than cash; -- Assumed Liabilities: include "cure" payments under assumed contracts and certain pro-rated costs, expenses and liabilities; -- Deposit: $200,000, tendered on the execution date of the Agreement; and -- Post-Closing Indemnification: none. Competing bidders must submit an initial overbid plus a $200,000 deposit before the bid deadline to (i) AtheroGenics, Inc., 8995 Westside Parkway, Alpharetta, Georgia 30004, Attention: Joseph M. Gaynor, Jr.; (ii) King & Spalding LLP, 1180 Peachtree Street, Atlanta, Georgia 30309, Attention: Paul Ferdinands, counsel for the Debtor; (iii) Office of the United States Trustee, 75 Spring Street, S.W., Atlanta, Georgia 30303; and (iv) Akin Gump Strauss Hauer & Feld, LLP, One Bryant Park, New York, New York 10036, Attention: David A. Botter, counsel for the Official Committee of Unsecured Creditors. King & Spalding will receive $200,000 break-up fee in the event the Debtor consummates the sale to another party as bid protections. The sale will enable it to preserve and maximize the value of the assets for the benefit of its creditors, the Debtor says. A full-text copy of the Debtor's asset purchase agreement is available for free at: http://ResearchArchives.com/t/s?3a48 Merriman Curhan & Ford Co. was retained by the Debtor to assist marketing its assets. About Atherogenics Headquartered in Alpharetta, Georgia, AtheroGenics, Inc. -- http://www.atherogenics.com/-- is a research-based pharmaceutical company focused on the discovery, development and commercialization of drugs for the treatment of chronic inflammatory diseases, including diabetes and coronary heart disease. It has one late stage clinical drug development program. On September 15, 2008, five creditors holding claims totaling $20,413,000 pursuant to the company's 4.5% Convertible Notes Due 2008 filed an involuntary Chapter 7 petition against the Debtor (Bankr. N.D. Georgia Case No. 08-78200). The petitioning noteholders were: -- AQR Absolute Return Master Account, L.P.; -- CNH CA Master Account, L.P.; -- Tamalpais Global Partner Master Fund, LTD; -- Tang Capital Partners, LP; and -- Zazove High Yield Convertible Securities Fund, L.P. On October 6, the Debtor filed its consent to entry for order for relief and motion to convert its Chapter 7 case to one under Chapter 11 (Bankr. N.D. Ga. Case No. 08-78200). James A. Pardo, Jr., Esq., and Michelle Carter, Esq., at King & Spalding, LLP, represent the Debtor as counsel. Akin Gump, Esq., at Strauss Hauer & Feld LLP, and Frank W. DeBorde, Esq., at Morris, Manning & Martin, LLP, represent the Official Committee of Unsecured Creditors as counsel. The Debtor selected Administar Services Group LLC as Claims Agent. As reported in the Troubled Company Reporter on Feb. 21, 2009, at December 31, 2008, the Debtor had total assets of $51,659,219, total liabilities of $307,171,466, and a stockholders' deficit of $255,512,247. BALTIMORE OPERA: Board to Seek Opera's Liquidation Under Ch. 7 -------------------------------------------------------------- The Associated Press reports that the Baltimore Opera Company's board of trustees will seek for the Company's liquidation under Chapter 7 of the U.S. Bankruptcy Code. Citing Baltimore Opera General Manager M. Kevin Wixted, The AP states that the Company didn't have enough money to continue operations. Baltimore Opera would never get ahead and could never raise enough money to have one season of opera, the report says, citing Mr. Wixted. Baltimore Opera board chairperson Allan Jensen said that the economy made it impossible to make significant progress in keeping the Company operating, according to the report. The AP relates that the board wants sell off Baltimore Opera's assets, including costumes, equipment, warehouse, and scenery and use the proceeds to pay creditors. Baltimore Opera -- http://www.baltimoreopera.com-- held opera shows in Baltimore, Maryland. Michael Harrison is the Company's artistic director. The Baltimore Opera Co. filed for Chapter 11 protection before the U.S. Bankruptcy Court for the District of Maryland on December 10, 2008. BEARINGPOINT INC: Court Set April 17 as Claims Bar Date ------------------------------------------------------- The Hon. Robert E. Gerber the United States Bankruptcy Court for the Southern District of New York set April 17, 2009, at 5:00 p.m. (Eastern Time) as the deadline for creditors of BearingPoint Inc. and its debtor-affiliates, and all governmental units to file proofs of claim that arose prior before the Debtors' bankruptcy filing. Proofs of claim must be at any of these addresses: A. If by overnight courier or hand delivery to: The Garden City Group Inc. Attn: BearingPoint Inc. 105 Maxess Road Melville, New York 11747 B. If by first-class mail, to: The Garden City Group, Inc. Attn: BearingPoint, Inc. P.O. Box 9000 #6525 Merrick, New York 11566 C. Or if by hand delivery to: United States Bankruptcy Court, SDNY One Bowling Green, Room 534 New York, New York 10004 About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc. fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of Sept. 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BEARINGPOINT INC: Files Schedules of Assets and Liabilities ----------------------------------------------------------- BearingPoint Inc. and its debtor-affiliates filed with the United States Bankruptcy Court for the Southern District of New York their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ------------- A. Real Property B. Personal Property $463,865,993 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $407,324,602 E. Creditors Holding Unsecured Priority Claims $763,497,300 F. Creditors Holding Unsecured Non-priority Claims ----------- ------------ TOTAL $463,865,993 $1,170,821,902 A full-text copy of the Debtor's schedules of assets and liabilities, is available at: http://ResearchArchives.com/t/s?3a47 About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc. fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of Sept. 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BEAZER HOMES: Difficult Market Cues Fitch's Junk Ratings -------------------------------------------------------- Fitch Ratings has downgraded Beazer Homes USA, Inc.'s Issuer Default Rating and other outstanding debt ratings: -- IDR to 'CCC' from 'B-'; -- Secured revolving credit facility to 'B+/RR1' from 'BB-/RR1'. -- Senior notes to 'CC/RR5' from 'CCC+/RR5'; -- Convertible senior notes to 'CC/RR5' from 'CCC+/RR5'; -- Junior subordinated debt to 'C/RR6' from 'CCC-/RR6'. The Rating Outlook is Negative. The Recovery Rating of 'RR1' on Beazer's secured revolving credit facility indicates outstanding recovery prospects for holders of this debt issue. The 'RR5' on Beazer's senior unsecured notes indicate below-average recovery prospects for holders of these debt issues. Beazer's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debt holders. The 'RR6' on Beazer's junior subordinated notes indicates poor recovery prospects in a default scenario. Fitch applied a liquidation value analysis for these RRs. The downgrade reflects the current very difficult U.S. housing market and Fitch's expectations that the housing environment remains challenging for the remainder of the year and perhaps into 2010. The sharply contracting economy and impaired mortgage markets are, of course, contributing to the housing shortfall. The ratings changes also reflect persistent negative trends in Beazer's operating margins and further deterioration in credit metrics, notably leverage (with little debt reduction in recent years and erosion in tangible net worth from non-cash real estate charges and operating losses). Cash flow from operations will probably sharply decline in 2009 and may shift to negative in 2010. Real estate impairments should moderate this year, but will persist so long as home prices decline and the sales absorption rate shrinks. Beazer filed its financials for fiscal year 2007 and its 2008 first and second quarter 10Qs in May 2008. As a consequence the company became current on all of its required SEC filings. The company's audit committee completed its independent investigation and made its recommendations, which Beazer has enacted. The company settled with the SEC in September 2008. Beazer is still under investigation by the U.S. Attorney's office in the Western District of North Carolina and other state and Federal agencies. Civil lawsuits are also pending. In August 2008, Beazer completed the amendment to its revolving credit facility. As part of the amendment, the commitments under the revolving credit facility were reduced from $500 million to $400 million and the collateralization requirement was increased. The credit facility is also subject to further reductions if Beazer's tangible new worth falls below certain thresholds. As of Sept. 30, 2008, the facility size was reduced to $250 million as the company's TNW fell below $350 million. Additionally, certain financial covenants, including leverage and interest coverage requirements, were eliminated. The amended credit facility contains a TNW covenant and a new liquidity test requiring Beazer to maintain either a minimum ratio of cash flow from operations to interest incurred or a minimum liquidity reserve. The potential of further real estate impairment charges and operating losses could prompt a breach in covenant compliance over the next 12-18 months. At Dec. 31, 2008, there was no debt outstanding, but $56 million of letters of credit were outstanding under the revolver. After giving effect to the amendment, Beazer had no additional borrowing capacity under the revolver. The company expects to add more real estate assets to the borrowing base over the coming months in order to increase availability under the revolver. The company completed its fiscal 2009 first quarter (ended Dec. 31, 2008) with $436.9 million of cash on the balance sheet. Although the company has generated $215 million of cash from operations during the latest 12-month period (ending Dec. 31, 2008), cash from operations during the first three months of fiscal 2009 was a negative $112 million. For all of fiscal 2009, Fitch expects Beazer to be slightly cash flow negative, excluding a second-quarter tax refund of $168 million. The company has limited near-term debt maturities, with $180 million maturing in May 2011. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels and especially free cash flow trends and uses, and the company's cash position. BERNARD L. MADOFF: Lists Up to $826MM in Assets After Fraud Leak ---------------------------------------------------------------- Court documents say that Bernard Madoff disclosed $823 million to $826 million in assets weeks after his Ponzi scheme was disclosed. Chad Bray at The Wall Street Journal reports that most of Mr. Madoff's assets came in the $700 million he valued for Bernard L. Madoff Investment Securities. WSJ notes that Mr. Madoff's asses include: -- a mansion in Palm Beach, Fla., estimated at $11 million; -- half-interest in a BLM Air Charter aircraft valued at $12 million; and -- a Steinway piano valued at $39,000. WSJ states that prosecutors said that they may seek more than $170 billion in forfeiture, including money and property traceable to the alleged fraud. WSJ notes that much of that figure came from funds investors deposited into Mr. Madoff's fraudulent investment operation and later dispersed to other investors. WSJ relates that about $1 billion in assets has been recovered so far by court-appointed trustee Irving H. Picard. According to WSJ, many of the assets, except one of four houses, were held in Ruth Madoff's name. WSJ relates that almost all of the $17,031,717 in cash Mr. Madoff said he held as of December 31, 2008, was deposited in a Wachovia bank account owned by Mrs. Madoff, while about $21,717 was kept in the couple's joint account at Bank of New York. According to court documents, Mr. Madoff's New York apartment, currently valued at $7 million, was purchased by Mrs. Madoff in 1984 for $1 million home in 2000 or 2001. Mrs. Madoff, the court documents say, acquired a Palm Beach residence in 1994. In 1979, the couple purchased a house in Montauk, New York, valued at about $3 million, according to WSJ. WSJ notes that these three automobiles were also listed in Mrs. Madoff's name: -- a 1999 Mercedes SLK convertible, -- a 2001 Mercedes station wagon, and -- a 2004 Volkswagen Touareg. Mr. Madoff had been free on a $10 million personal recognizance bond under 24-hour detention and electronic monitoring at his Upper East Side apartment since mid-December. Private security guards also monitored the entrances to his home to prevent flight or harm to Mr. Madoff. Mr. Madoff, court documents say, estimated monthly expenses for the couple's properties, including spending $140,000 for the private security company at the New York apartment and $100,000 in legal fees. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on Dec. 15, 2008, the Securities and Exchange Commission charged Bernard L. Madoff and his investment firm, Bernard L. Madoff Investment Securities LLC, with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Madoff's fraud were allegedly at least $50 billion. Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Mr. Madoff, if found guilty of all counts, would be imprisoned for 150 years, but legal experts expect the actual sentence to be much lower and would still be an effective life sentence for the 70- year-old defendant, WSJ notes. Mr. Madoff, WSJ relates, would also face millions of dollars in possible criminal fines. The report says that Mr. Madoff has been free on bail since his arrest on December 11, 2008. There was no plea agreement with Mr. Madoff in which leniency in sentencing might be recommended, the report states, citing prosecutors. BOISE INC: Moody's Cuts to 'B1' on Modest Cushion Under Covenants ----------------------------------------------------------------- Moody's Investors Service downgraded Boise Inc.'s corporate family rating to B1 from Ba3. The company's other existing debt ratings were also downgraded. The rating action more closely aligns the company's long-term debt ratings with expected near-to-mid term credit metrics and anticipates continued weak demand trends within the paper and packaging sectors, slower overall market conditions, and volatility of the credit markets. The outlook remains negative. Moody's believes the company's operating performance will continue to be challenged by the economic slowdown, reduced demand, and still high fiber and chemical costs. Moody's also believes lower prices will likely pressure operating margins in 2009, reducing free cash flow generation and heightening leverage. As a result, Moody's expects the company to manage a modest cushion under its covenant compliance with a potential need to renegotiate covenant levels over the near term. The B1 corporate family rating reflects the company's market position as the third largest producer of uncoated free sheet paper in North America and the potential for cost improvements over the intermediate term due to recent rationalization actions and reduced energy costs. The negative outlook considers the tightening financial covenants during an economic slowdown, high leverage, input cost pressures, declining product demand, and expected price pressure in 2009. Moody's also affirmed the company's SGL-3 speculative grade liquidity rating. The rating reflects adequate liquidity, but Moody's expects covenant compliance to be tighter over the next four quarters with a potential need to renegotiate covenant levels over the near term. Boise maintains a $250 million senior secured bank credit facility that is committed until 2013. At December 31, 2008, aggregate outstanding amounts were $60 million, with availability of approximately $164 million after considering outstanding letters of credit. The company currently has approximately $23 million of cash on the balance sheet with approximately $26 million of debt due in 2009 and $22 million due in 2010. The first lien term loans are guaranteed by operating subsidiaries and secured by all assets of the company, which provide substantial collateral coverage to the proposed facilities. Thus, the ratings are notched up from the B1 corporate family rating to Ba3. The second lien term loan is secured by a second priority security interest, resulting in a two-notch differential from the B1 corporate family rating to B3. The two-notch downgrade of the second lien term loan resulted from Moody's assumptions regarding usage under the company's first lien revolver as Boise's corporate family rating is lowered. Ratings Downgraded: -- Corporate Family Rating, B1 from Ba3 -- First Lien Secured Revolver, Ba3 (LGD3, 35%) from Ba2 -- First Lien Secured Term Loan A, Ba3 (LGD3, 35%) from Ba2 -- First Lien Secured Term Loan B, Ba3 (LGD3, 35%) from Ba2 -- Second Lien Secured Term Loan, B3 (LGD5 78%) from B1 Moody's last rating action was on November 11, 2008 when Boise's SGL rating was lowered to SGL-3 from SGL-2 and the outlook was changed to negative from stable. Boise Inc., headquartered in Boise, Idaho, is the third largest North American producer in uncoated free sheet paper and has a significant presence in the markets for linerboard, corrugated containers, and specialty and premium paper products. BUFFALO THUNDER: S&P Withdraws 'CCC' Ratings on Request ------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on the Buffalo Thunder Development Authority per the Authority's request. Ratings List Withdrawn Buffalo Thunder Development Authority To From -- ---- Corporate Credit Rating NR CCC/Negative/-- Senior Unsecured NR CCC NR - Not rated. CAPITAL AUTOMOTIVE: S&P Places 'BB' Rating on Watch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services recently took rating actions on 10 U.S. real estate investment trusts: S&P lowered its ratings on two companies and placed S&P's ratings on nine companies on CreditWatch with negative implications. These actions affect roughly 16% of S&P's rated 62-company universe and were prompted by continued constrained access to debt and equity capital for many REITs and S&P's concern that sharply deteriorating economic conditions will result in greater pressure on portfolio-level cash flows than previously contemplated. In the current environment, S&P remains very highly focused on REIT liquidity and balance sheet strength. In S&P's view, heavy credit revolver usage (in excess of 50%), weak debt service coverage, and an over-reliance on earnings from fee-driven and/or asset sales activity are key areas of focus. With regard to REIT common dividend coverage, S&P would view even the modest funding of a dividend shortfall with debt as a negative credit factor, given the balance-sheet implications and the need for REITs to preserve precious liquidity in the current environment. From a property fundamentals standpoint, most sectors will come under stress this year, though to varying degrees. The sharp curtailment in consumer spending since last fall is hitting retailers hard, which has increased tenant default risk for retail and net-lease REIT portfolios. Retrenching or contracting commercial tenants will pressure occupancy and rents for office and industrial landlords. And recently accelerating job losses may now have a negative impact on the currently better-positioned multifamily and self-storage sectors. While S&P consider most healthcare REIT property portfolios to be currently fairly defensively postured, even this asset class could come under pressure if government and private insurer reimbursement schemes are meaningfully altered. As it stands now, S&P believes that the downside scenario that S&P considered last fall (see "The Recession May Bring More Negative Rating Actions To U.S. REITs And Real Estate Operating Companies," published Nov. 7, 2008) may be coming to pass. At that time, S&P took negative rating actions on 19 companies. Now, with the recession shaping up to be deeper and longer than S&P originally modeled for, S&P believes more REIT ratings will come under pressure. While S&P believes the bulk of the REITs that S&P rate face relatively manageable 2009 capital needs, 2010 and 2011 could be more challenging, absent an improvement in capital market conditions and/or a nearer-term economic turnaround. Despite these broader negative trends facing the sector, S&P continues to evaluate each rated REIT on its own merits and believe most companies remain highly focused on maintaining and/or improving their liquidity positions. While property transaction volumes have contracted substantially on a national level, the generally higher quality of REIT property holdings has enabled many companies to continue to sell assets and source attractively priced secured mortgage financing. In addition, development pipelines are contracting (which should reduce future funding needs) and a number of REITs are either cutting their dividends or considering stock dividends in an effort to retain more capital. S&P also acknowledges that the current capital and asset pricing dislocations in the market will eventually present very attractive investment opportunities for those REITs with dry powder. Most of the companies affected by S&P's recent rating actions previously carried negative outlooks. With respect to the nine CreditWatch actions, S&P expects to completes its analyses and resolve the placements within the month, in conjunction with a full review of all U.S. REIT ratings. Please see RatingsDirect for complete, company-specific articles that address each of S&P's rating actions. S&P will publish additional REIT ratings commentary in early April and S&P will hold a teleconference to discuss S&P's broader U.S. REIT ratings perspective on Thursday April 9, 2009. Creditwatch Listings Property Focus To From -------- -- ---- Apartment Investment & Management Co. Multifamily BB+/Watch Neg BB+/Stable BRE Properties Inc. Multifamily BBB/Watch Neg BBB/Stable Capital Net Lease Automotive LLC (auto) BB/Watch Neg BB/Neg Colonial Properties Multifamily BBB-/Watch Neg BBB- /Neg Developers Diversified Realty Corp. Retail BBB-/Watch Neg BBB- /Neg Hospitality Properties Trust Net Lease (hotel) BBB/Watch Neg BBB/Neg ProLogis Industrial BBB-/Watch Neg BBB- /Neg UDR Inc. Multifamily BBB/Watch Neg BBB/Stable Rating Changes Property Focus To From -------- -- ---- Camden Property Trust Multifamily BBB/Stable BBB+/Neg First Industrial Industrial BB/Watch Neg BBB- /Neg CANWEST MEDIA: DBRS Junks Issuer Rating, Under Review-Negative -------------------------------------------------------------- Dominion Bond Rating Service has downgraded Canwest Media Inc.'s Issuer Rating to C from CCC along with its various debt instrument ratings. At the same time, DBRS has downgraded Canwest Media's wholly owned subsidiary, Canwest Limited Partnership (Canwest LP). Canwest LP's Issuer Rating has been downgraded to C (high) from CCC (high) along with its various debt instrument ratings. All ratings remain Under Review with Negative Implications, pending the outcome of a recapitalization of Canwest Global Communications Corp. The ratings were originally placed Under Review -- Negative following DBRS's previous downgrade of Canwest LP and Canwest Media on February 23, 2009. DBRS notes that while Canwest Media and its secured bank debt lenders have agreed to extend a waiver on certain covenants under its credit facility until April 7, 2009 (the previous waiver expired March 11, 2009), the Company has indicated that it will not make its March 15, 2009 interest payment on its 8% senior subordinated notes (approximately $30.4 million) and has commenced discussions with an ad hoc committee of these noteholders. DBRS notes that this committee represents a majority of the Company's $761 million of notes outstanding with Canwest Media having a 30 day cure period (which would end on April 14, 2009) to make this interest payment before these noteholders can issue a default notice. Canwest Media believes that discussions with these noteholders are aimed at allowing sufficient time to recapitalize Canwest in a manner that is satisfactory to all of its stakeholders, including its senior lenders and noteholders. As such, today's downgrade reflects DBRS's expectation that a recapitalization could include both Canwest Media and Canwest LP (and possibly other entities within Canwest). DBRS notes that Canwest Media's probability of default is greater than that of Canwest LP, hence its Issuer Rating is rated lower at C versus Canwest LP's C (high) Issuer Rating. The recovery rating for Canwest Media's Secured Bank debt remains unchanged at RR1 indicating anticipated recovery prospects of between 90% to 100%. As a result the Secured Bank Debt rating has been lowered to CC from B which remains three notches above Canwest Media's C Issuer Rating. Furthermore, the recovery rating on Canwest Media's Senior Subordinated Notes remains unchanged at RR5 indicating anticipated recovery prospects of between 10% to 30%. As a result, the Senior Subordinated Notes rating of Canwest Media has been lowered to C (low) from CCC (low) which remains one notch below Canwest Media's C Issuer Rating. For Canwest LP, the recovery rating remains unchanged at RR3 indicating anticipated recovery prospects of between 50% to 70%. As a result the Secured Bank Debt rating has been lowered to CC (low) from B (low) which remains one notch above Canwest LP's C (high) Issuer Rating. Additionally, the recovery rating of Canwest LP's Senior Subordinated Notes remains unchanged at RR6. As a result, the Senior Subordinated Notes rating of Canwest LP has been lowered to C (low) from CCC (low) which remains two notches below Canwest LP's C (high) Issuer Rating. As part of its review, DBRS expects to continue to monitor Canwest's negotiations in terms of a recapitalization and its obligations to make its interest payments at all borrowing levels. DBRS expects its ratings at Canwest Media and/or Canwest LP will be lowered to a D rating (indicating a default) at the earlier of: (a) a default either during or following the expiry of any cure period; or (b) a formalized recapitalization plan where principal and interest obligations are compromised; or (c) the initiation of a formal bankruptcy proceeding. CASCADES INC: DBRS Assigns BB (high) Issuer Rating -------------------------------------------------- Dominion Bond Rating Service assigned Cascades Inc. an Issuer Rating of BB (high) and has confirmed its Senior Unsecured Debt at BB (high). The trend has been changed to Negative. Pursuant to DBRS's Leveraged Finance rating methodology, a recovery rating of RR4 (30% to 50% recovery) has been assigned to the Company's Senior Unsecured Debt, which corresponds to the BB (high) rating. The Company's value-added packaging, specialty product sales mix and high containerboard converting integration levels (a strategy that has improved earnings stability through industry cycles relative to producers with a larger proportion of commodity products and limited integration) reduces business risk. In addition, a large and comparatively stable earnings contribution from Cascades' tissue business provides a counterbalance to the commodity products businesses, further enhancing the Company's business profile. However, leverage is high for a company with cyclical product lines, and debt and cash flow coverage ratios are expected to remain weak in 2009, keeping financial risk at high levels. The change to a Negative trend reflects the fact that the Company's credit profile is weak for the current rating. In addition, near-term market conditions do remain challenging. A slower-than-expected U.S. economy, a reversal in recent Canadian dollar weakness, and the chance that industry supply management efforts may not be sufficient to stabilize paper prices could put more pressure on the Company's operating performance. In the event that Cascades cannot stabilize its financial performance and credit metrics continue to deteriorate from current levels, the current rating would be at risk. Despite the Company's positive business aspects, its current credit metrics reflect challenging industry conditions. Product price increases were obtained in each of the Company's business segments in 2008. However, rising raw material costs (primarily recycled fibre and commercial pulp), high energy and energy- related prices, and strength in the Canadian dollar offset most of the benefits of higher product prices in the first half of 2008. In the near term, the earnings and cash flow outlook is neutral, as widespread supply management tactics are expected to limit recent commodity containerboard product price erosion. Average annual containerboard prices in 2009 are expected to be close to the average attained in 2008. Tissue and specialty packaging product prices are expected to stabilize in 2009. Although weaker market conditions will lead to lower sales volumes in 2009, stable average annual product prices and reduced operating costs are expected to translate into earnings and cash flows that are close to levels seen in previous years. Profit initiatives, including the closure of uncompetitive mills/machines and non-core asset divestitures, are also expected to benefit earnings. Coincident with relatively stable earnings and cash flows, debt levels and credit metrics are not expected to substantially change from levels recorded in the last twelve months. Capex is expected to be $100 million substantially less than depreciation in 2009 and cash flow from operations should be more than sufficient to fund capital expenditures next year. Although free cash flow is expected to be positive, it is unlikely to be sufficient to produce a major improvement in the financial profile. As a result, leverage is forecasted to remain high. There are no significant debt repayments in the next two years, which provides the Company with the flexibility to focus on operating cash requirements. Cascades had cash and available credit facilities of approximately $300 million at December 31, 2008. Hence short-term liquidity is not a problem. Cascades has evolved into a strong industry player through a series of successfully integrated acquisitions. Despite challenging industry conditions, the Company has generated positive earnings and funded operations internally, in contrast to the large net losses and free cash flow deficits experienced by many of its paper industry peers. As a result, the Company is well positioned to grow earnings and cash flows when industry conditions improve. DBRS has simulated a default scenario for Cascades in order to analyze the potential recovery for the Company's senior unsecured debt in the event of default. The scenario assumes a prolonged period of severe economic conditions, regardless of how hypothetical or unlikely the conditions may be, in which product demand and prices plummet. EBITDA quickly declines and turns negative over the forecasted period. DBRS assumes that the Company would be reorganized as a going concern in the event of default, and has derived a recovery rating of RR4 for the senior unsecured debt. RR4 corresponds to recovery prospects of between 30% and 50% for senior unsecured debtholders. CATALYST PAPER: DBRS Assigns 'BB' Issuer Rating, Negative Trend --------------------------------------------------------------- Dominion Bond Rating Service has assigned Catalyst Paper Corporation an Issuer Rating of BB and confirmed its Senior Debt at BB, both with a Negative trend. Pursuant to DBRS's Leveraged Finance Rating Methodology, a recovery rating of RR4 (30% to 50%) has been assigned to the Company's Senior Debt, which corresponds to the BB rating. Catalyst has performed slightly better than expected and corporate earnings are forecasted to remain close to 2008 levels, despite weak market conditions. The retention of a Negative trend reflects the potential that the Company's credit profile will weaken over the near term, mainly related to a slower-than- expected U.S. economy, a reversal in recent Canadian dollar weakness and the chance that industry supply management efforts may not be sufficient to stabilize paper prices. Despite the improvement in earnings, cash flows and credit metrics in 2008, the Company's credit ratios are aggressive for the rating. In the event that Catalyst generates weaker earnings and cash flows in the near term, and credit metrics deteriorate from current levels, the rating could come under pressure. Earnings are expected to be pressured in 2009. Widespread capacity curtailments are expected to stabilize paper prices in the near term, resulting in higher average annual paper prices in 2009 compared to the previous year. A lower Canadian dollar and reduced energy, chemical and transportation costs will positively impact operating costs. Slightly higher newsprint and directory paper earnings (generated by higher average annual prices and a full year contribution from the acquired Snowflake, Arizona newsprint mill) and lower freight and raw material costs in all paper product lines are expected to offset weaker contributions from market pulp. However, a severe economic recession could temporarily negate the ability of the industry and the Company to manage supply. Rapidly declining demand and pricing would result in sharply lower earnings and cash flows, adding pressure to the rating, mainly related to the impact on cash flow. Capex is forecasted to be substantially below depreciation in 2009 -- a strategy that will positively impact cash generation. The Company is committed to stemming cash outflows by curtailing production when operating costs fall below break-even levels, a strategy that will conserve cash until market conditions rebound. The Company is well positioned to weather an extended period of weak market conditions. There are no significant debt repayments until 2011, which provides the Company with the flexibility to focus on operating cash requirements. Catalyst had cash and available credit facilities of $180 million at December 31, 2008. Hence, short-term liquidity is not a problem. CERTIFICHECKS INC: South Kingstown Chamber to Accept Gift Checks ---------------------------------------------------------------- Liz Boardman at South County Independent reports that the Board of the South Kingstown Chamber of Commerce has decided to continue to accept CertifiChecks, Inc.'s gift checks. As reported by the Troubled Company Reporter on March 3, 2009, CertifiChecks ceased operations, blaming an extremely difficult economic environment. CertifiChecks stopped administering gift certificate programs and has stopped its gift certificate sales. WCSI reports that CertifiChecks filed for Chapter 7 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Ohio, leaving many local businesses and residents wondering what to do with the certificates from CertifiChecks. According to WCSI, Columbus Area Chamber of Commerce President Jack Hess said, "Retailers and restaurants -- don't accept them as a form of payment." WCSI quoted Seymour Chamber of Commerce president Bill Bailey as saying, "Any individual who is holding a CertifiChecks gift certificate should come into the Chamber so we can make a photo copy of it." WCSI relates that chamber merchants will continue accepting the checks for purchases but must redeem them at the South Kingstown Chamber office. CertifiChecks, Inc. -- http://www.certifichecks.com/-- is headquartered in Dayton, Ohio serving consumers and merchants nationwide. Its gift certificate offers business merchants redemption, similar to a bank check. CertifiChecks has developed a customizable gift certificate that processes like a check through the national Federal Reserve banking system. Each gift certificate is customer personalized and merchant branded. CHARLES RIVER: Moody's Gives Neg. Outlook; Affirms 'Ba1' Rating --------------------------------------------------------------- Moody's Investors Service changed the rating outlook of Charles River Laboratories International, Inc. to negative from stable. At the same time, Moody's affirmed the ratings including the Ba1 Corporate Family Rating and Probability of Default ratings and the Speculative Grade Liquidity Rating of SGL-2. The change in outlook to negative reflects Moody's belief that Charles River faces several headwinds over the intermediate-term, resulting in lowered expectations for revenue and operating margins. Macroeconomic and industry-specific factors have led to a deceleration in demand from biopharmaceutical companies. Further, significant announced consolidation among Charles River's customers could lead to project delays and cancellations during the integration period. The negative outlook also reflects Moody's belief that increased capacity in the CRO industry could lead to meaningful pricing pressure during this period of diminished demand. Increased capacity, combined with the high fixed cost nature of the business, is likely to result in considerable margin compression over the intermediate term. The Ba1 Corporate Family Rating is supported by Charles River's leading market positions in its core markets, good geographic and customer diversity, strong operating cash flow generation and moderate financial policies. The SGL-2 rating is supported by the expectation for improved free cash flow generation in 2009 due to reduced capital expenditures, $244 million in unrestricted cash and ample cushion on financial covenants. For further information, see Charles River's Credit Opinion on Moodys.com. Ratings Affirmed: -- Corporate Family Rating, Ba1 -- Probability of Default Rating, Ba1 -- Speculative Grade Liquidity Rating, SGL-2 -- Senior Secured $200 million Revolving Credit Facility due 2011, Baa3 (LGD2, 20%) -- Senior Secured $156 million Term Loan facility ($85.8 million outstanding at 12/27/2008) due 2011, Baa3 (LGD2, 20%) -- Outlook to negative from stable The last rating action was August 11, 2008 when Moody's downgraded the Speculative Grade Liquidity rating to SGL-2 from SGL-1. Charles River Laboratories International, Inc., headquartered in Wilmington, Massachusetts, is a contract research organization that provides research tools and services for drug discovery and development. The company's revenues are evenly split between the Research Models and Services business, involving the commercial production and sale of animal research models; and the Preclinical Services business, involving the development and safety testing of drug candidates. The company reported revenues of $1.3 billion for the twelve months ended December 27, 2008. CHC HELICOPTER: S&P Downgrades Corporate Credit Rating to 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Vancouver-based CHC Helicopter Inc. to 'B+' from 'BB-' and its issue level rating on the company's senior subordinated notes to 'B-' from 'B'. The ratings reflect S&P's assessment of CHC Helicopter's business risk profile and financial risk profile. At the same time, S&P removed all ratings from CreditWatch with developing implications, where they were placed Feb. 22, 2008. As noted in S&P's February 2008 release, the ratings for CHC were originally placed on CreditWatch pending details from the company regarding the then future capital structure of CHC following its acquisition by funds managed by First Reserve Corp. S&P has now resolved the CreditWatch following S&P's review of CHC's post-acquisition capital structure and business plan. The outlook is stable. At the same time S&P withdrew all ratings upon the Company's request. CITIGROUP INC: Will Nominate Four Financial Experts to Board ------------------------------------------------------------ Citigroup Inc. will nominate four financial experts, including two former bank chief executives, to join the Company's board of directors, David Enrich, Robin Sidel, and Joann S. Lublin at The Wall Street Journal report, citing people familiar with the matter. According to WSJ, federal officials have been pressuring Citigroup Chairperson Richard Parsons to oust some longtime directors and recruit new ones. WSJ notes that Citigroup has been trying to attract new directors to its board, but potential candidates have been reluctant. WSJ, citing a person familiar with the matter, states that Citigroup has tried to overcome the snags by pitching the director slots as a "national obligation." Citing the sources, WSJ relates that these are the possible recruits: -- former U.S. Bancorp CEO Jerry Grundhofer, who previously turned down overtures by Citigroup; -- former Bank of Hawaii Corp. CEO Michael O'Neill,; and -- former co-head of bond-giant Pimco, William S. Thompson. Citigroup, according to WSJ, would add at least one more director with a risk-management background, likely a finance professor. WSJ states that the nominations will be subject to a shareholder vote. Citigroup, WSJ says, would disclose the boardroom changes this week, when it files its annual proxy statement with securities regulators. Citing people familiar with the matter, WSJ relates that Citigroup would disclose the retirement of current directors Kenneth Derr and Franklin Thomas. WSJ notes that three other Citigroup directors have said that they will step down. About Citigroup Based in New York, Citigroup (NYSE: C) -- http://www.citigroup.com -- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citigroup had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of Sept. 30, 2008. As reported in the Troubled Company Reporter on Nov. 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve will backstop residual risk in the asset pool through a non-recourse loan. CMP SUSQUEHANNA: S&P Downgrades Corporate Credit Rating at 'CC' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on CMP Susquehanna Radio Holdings Corp. to 'CC' from 'CCC+'. In addition, S&P lowered the issue-level rating on the company's 9.875% senior subordinated notes due 2014 to 'C' from 'CCC-'. The corporate credit rating and all issue-level ratings on CMP Susquehanna, including the 'CCC+' rating on the company's $800 million secured credit facilities, remain on CreditWatch with negative implications. These actions follow the company's announcement that it is offering to exchange up to $15 million of new variable-rate senior subordinated notes, $35 million of series A preferred stock, and warrants exercisable for up to 40% of the outstanding common stock for the company's existing senior subordinated notes. The new senior subordinated notes and preferred stock represent up to 27% of the par value of the 9.875% senior subordinated notes. S&P has assumed a minimal value of the warrants. As a result, and given S&P's previously stated concern that S&P believes the company could face difficulty in maintaining covenant compliance over the near term, S&P views the exchanges as being tantamount to default given the distressed financial condition of the company. Upon consummation of the transactions, S&P expects to lower the 9.875% senior subordinated notes rating to 'D' and the corporate credit rating to 'SD' (selective default). As soon as is possible thereafter, S&P will reassess CMP's capital structure and assign new ratings. "It is our preliminary expectation that, in the event the exchange succeeds, the corporate credit rating would likely be in the 'CCC+' category following the consummation of the exchange transactions," noted Standard & Poor's credit analyst Jeanne Mathewson. The exchange offer, if successful, should enable the company to improve its headroom under its total leverage covenant at a time when radio broadcasters' revenues are declining steeply. The company would likely have greater capacity to weather the current recession over at least the next couple of quarters. However, CMP's ability to successfully meet covenants over the intermediate term would still rely on a substantial moderation of the recent advertising revenue declines and/or further reduction in debt, as the leverage covenant steps down three times in 2009, from 10.5x at the end of 2008 to 9.5x at the end of 2009. EBITDA declined 23% in the quarter ended Sept. 30, 2008. If declines of this magnitude continue or accelerate in 2009, S&P believes that the company would likely violate covenants in the second half of the year even if the deleveraging exchange offer is successful. The ratings are on CreditWatch with negative implications. Upon consummation of the transaction, S&P expects to lower the corporate credit rating to 'SD' (selective default). As soon as possible thereafter, S&P will reassess the company's financial profile and assign a new rating. It is S&P's preliminary expectation that, in the event the exchange is successful, S&P will raise the corporate credit rating back to 'CCC+', barring unanticipated developments that would meaningfully change S&P's current view of the company's credit profile and business prospects. The revised capital structure would improve covenant headroom, but covenant compliance, particularly the total leverage covenant, could still come under pressure in the second half of 2009. If the transaction is not consummated, S&P would expect to raise the corporate credit rating to 'CCC', because without the benefit of leverage reduction that it would gain from the debt exchange, the company, in S&P's view, would have an imminent need to amend the bank facilities in order to avoid a covenant breach. CST INDUSTRIES: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of CST Industries, Inc. (including the B2 corporate family rating). The rating outlook was revised to negative from stable. The negative outlook reflects Moody's concerns about CST's ability to comply with its financial covenants under the first lien credit agreement and the potential impact on CST of softness in certain of its industrial end markets. Moody's believes that deteriorating economic conditions could pressure credit metrics and may require the company to obtain covenant relief during the first half of the year. Notwithstanding the impact of financial covenants which have stepped down since the first lien facility was originally put in place, adequate liquidity is provided by a healthy cash balance and an undrawn $20 million revolving credit facility at December 31, 2008. The B2 corporate family rating assumes that CST will maintain orderly access under its credit agreement and attain any covenant relief that may be required. The B2 corporate family rating continues to reflect the company's small size, high leverage, and a moderately acquisitive financial philosophy. The ratings are supported by Moody's expectation for breakeven to positive free cash flow, the company's leading position in a segment of the pre-fabricated tank market, and its broad customer base and diverse end markets. Proprietary technologies, including glass-fused-to-steel and epoxy coating products, provide the company with a competitive advantage over many of its less differentiated, smaller competitors. Ratings affected by the actions include: -- B2 corporate family rating affirmed -- B2 probability of default rating affirmed -- B1 (LGD 3; 36%) rating on senior secured revolving credit facility affirmed -- B1 (LGD 3; 36%) rating on senior secured first lien term loan affirmed -- Outlook revised to negative from stable The last rating action was on April 24, 2008, when the ratings of CST Industries were affirmed (including the B2 corporate family rating). CST's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of CST's core industry and CST's ratings are believed to be comparable to those of other issuers of similar credit risk. CST Industries, Inc., headquartered in Kansas City, Kansas, is a global manufacturer and erector of pre-engineered factory-coated storage tanks and aluminum geodesic domes, covers and roofing systems. CST's products are used in municipal water, agricultural, wastewater, oilfield, alternative energy, plastics, chemicals, dry bulk and architectural markets. ENERGY PARTNERS: Bondholders Form Group; In Restructuring Talks --------------------------------------------------------------- Double Black Diamond Offshore LDC, Carlson Capital, L.P., Asgard Investment Corp., said they have discussed, and expect to continue to discuss, their investment in Energy Partners' Ltd.'s 9.75% bonds due 2014, and the potential restructuring of the bonds with other holders of such Bonds. Clint D. Carlson, the president, Carlson Capital et al., also have had, and expect to continue to have, discussions with Energy Partners and its representatives, together with other holders of Bonds, and separately. The discussions, Mr. Carlson said, may involve proposals to revise the terms of the Bonds, to exchange Bonds for equity of the company, or otherwise. Carlson Capital et al., and other holders of the Bonds have jointly retained counsel connection with their investments in the Bonds, and have formed an Ad Hoc Committee, to negotiate on behalf of bondholders in connection with the potential restructuring of such debt. Carlson Capital et al., believe that the Ad Hoc Committee is not a "group" for purposes of Section 13(d) of the Securities Exchange Act of 1934. The Ad Hoc Committee has engaged in discussions with the company's representatives and with the company's stakeholders, proposed that the Ad Hoc Committee and company negotiate the terms of a transaction in which debt issued by the company would be exchanged for equity in the Issuer, and made proposals to the company with respect to the composition of the company's board of directors and other matters. Carlson Capital et al., anticipate that the Ad Hoc Committee will continue to engage in discussions or negotiations with company representatives and with other stakeholders in the future regarding the company's performance and prospects, proposals for a financial restructuring of the company, and other matters. Each holder of Bonds will make an independent decision regarding any proposal to or from the company relating to its investment in the Bonds, Mr. Carlson said. Carlson et al. have not presented any plan or proposal to the company. They intend to review their investment in the company on a continuing basis. Depending on various factors including, without limitation, the company's financial position and strategic direction, price levels of the shares of company's common stock and the Bonds, conditions in the securities market, general economic and industry conditions, and actions taken by the company's board, Carlson et al. may in the future take actions with respect to their investment as they deem appropriate including, without limitation, purchasing additional shares of Common Stock or selling some or all of their shares, electing persons to the board, and, alone or with others, pursuing discussions with the company, other stockholders, other holders of the company's debt and third parties with regard to their investment or otherwise changing their intentions with respect to any and all matters. Carlson et al., hold 2.9 million shares of Energy Partners Ltd. common stock., representing a 9.3% equity stake. Carlson et al. own roughly $45 million aggregate principal amount of the Bonds, representing roughly 10% of the outstanding principal amount of the Bonds, which Bonds were acquired in open market purchases. As of the close of business on March 6, 2009, Carlson et al. beneficially owned an aggregate of 2,994,968 shares of Common Stock, constituting roughly 9.3% of the shares of Common Stock outstanding. As of November 3, 2008, 32,082,960 shares of the company's Common Stock are outstanding. In a separate filing, Wellington Management Company, LLP, disclosed that it no longer holds shares of Energy Partners Ltd. About Energy Partners Ltd. Energy Partners Ltd. (NYSE: EPL) -- http://www.eplweb.com/-- is an independent oil and natural gas exploration and production company based in New Orleans, Louisiana. Founded in 1998, the company's operations are focused along the U.S. Gulf Coast, both onshore in south Louisiana and offshore in the Gulf of Mexico. * * * As reported in the Troubled Company Reporter on March 3, 2008, Moody's Investors Service downgraded Energy Partners Ltd.'s Corporate Family Rating to Caa1 from B3, its Probability of Default to Caa1 from B3, and the ratings on its $300.0 million senior unsecured fixed rate notes and $150.0 million senior unsecured floating rate notes to Caa2 (LGD 4, 67%) from Caa1 (LGD 4, 65%). The downgrade reflects EPL's continued weak capital productivity, especially as evidenced by its 2007 results, negative sequential quarterly production trends, and continued high financial leverage. The rating outlook remains negative. The TCR reported on March 2, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on independent exploration and production firm Energy Partners Ltd. to 'CCC+' from 'B-'. The outlook is negative. EXCHANGE INSURANCE: A.M. Best Changes Final Strength Rating to E ---------------------------------------------------------------- A.M. Best Co. has changed the financial strength rating to E (Under Regulatory Supervision) from C (Fair) and the issuer credit rating to "rs" from "ccc" of The Exchange Insurance Company Limited (Exchange). This action removes the under review with negative implications status originally assigned to the ratings in November 2008. The ratings of Exchange have been changed because the company has been placed into administration and due to the cessation of its normal activities as an insurance company. Exchange's management continues discussions with potential investors to sell the company. A successful conclusion to these talks will lead to a review of the ratings. FAIRPOINT COMMUNICATIONS: S&P Puts 'BB' Rating on Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings, including the 'BB' corporate credit rating, on Charlotte, North Carolina-based FairPoint Communications Inc. on CreditWatch with negative implications. "This rating action was prompted by the company's accelerated access-line losses and continued high leverage," said Standard & Poor's credit analyst Catherine Cosentino, "as well as heightened uncertainty about its prospects to remedy these factors in 2009 in light of the current weak economic environment." FairPoint, which closed on a merger with Verizon's New England properties in March 2008, only recently transitioned from Verizon's systems to its own. Access-line losses have increased over the past year, and totaled 11.7% on a year-over-year basis as of Dec. 31, 2008. "Also, leverage remains high for the rating, at about 6x," added Ms. Cosentino. FIRST INDUSTRIAL: S&P Cuts Rating From 'BBB-' to 'BB', WatchNeg --------------------------------------------------------------- Standard & Poor's Ratings Services recently took rating actions on 10 U.S. real estate investment trusts: S&P lowered its ratings on two companies and placed S&P's ratings on nine companies on CreditWatch with negative implications. These actions affect roughly 16% of S&P's rated 62-company universe and were prompted by continued constrained access to debt and equity capital for many REITs and S&P's concern that sharply deteriorating economic conditions will result in greater pressure on portfolio-level cash flows than previously contemplated. In the current environment, S&P remains very highly focused on REIT liquidity and balance sheet strength. In S&P's view, heavy credit revolver usage (in excess of 50%), weak debt service coverage, and an over-reliance on earnings from fee-driven and/or asset sales activity are key areas of focus. With regard to REIT common dividend coverage, S&P would view even the modest funding of a dividend shortfall with debt as a negative credit factor, given the balance-sheet implications and the need for REITs to preserve precious liquidity in the current environment. From a property fundamentals standpoint, most sectors will come under stress this year, though to varying degrees. The sharp curtailment in consumer spending since last fall is hitting retailers hard, which has increased tenant default risk for retail and net-lease REIT portfolios. Retrenching or contracting commercial tenants will pressure occupancy and rents for office and industrial landlords. And recently accelerating job losses may now have a negative impact on the currently better-positioned multifamily and self-storage sectors. While S&P consider most healthcare REIT property portfolios to be currently fairly defensively postured, even this asset class could come under pressure if government and private insurer reimbursement schemes are meaningfully altered. As it stands now, S&P believes that the downside scenario that S&P considered last fall (see "The Recession May Bring More Negative Rating Actions To U.S. REITs And Real Estate Operating Companies," published Nov. 7, 2008) may be coming to pass. At that time, S&P took negative rating actions on 19 companies. Now, with the recession shaping up to be deeper and longer than S&P originally modeled for, S&P believes more REIT ratings will come under pressure. While S&P believes the bulk of the REITs that S&P rate face relatively manageable 2009 capital needs, 2010 and 2011 could be more challenging, absent an improvement in capital market conditions and/or a nearer-term economic turnaround. Despite these broader negative trends facing the sector, S&P continues to evaluate each rated REIT on its own merits and believe most companies remain highly focused on maintaining and/or improving their liquidity positions. While property transaction volumes have contracted substantially on a national level, the generally higher quality of REIT property holdings has enabled many companies to continue to sell assets and source attractively priced secured mortgage financing. In addition, development pipelines are contracting (which should reduce future funding needs) and a number of REITs are either cutting their dividends or considering stock dividends in an effort to retain more capital. S&P also acknowledges that the current capital and asset pricing dislocations in the market will eventually present very attractive investment opportunities for those REITs with dry powder. Most of the companies affected by S&P's recent rating actions previously carried negative outlooks. With respect to the nine CreditWatch actions, S&P expects to completes its analyses and resolve the placements within the month, in conjunction with a full review of all U.S. REIT ratings. Please see RatingsDirect for complete, company-specific articles that address each of S&P's rating actions. S&P will publish additional REIT ratings commentary in early April and S&P will hold a teleconference to discuss S&P's broader U.S. REIT ratings perspective on Thursday April 9, 2009. Creditwatch Listings Property Focus To From -------- -- ---- Apartment Investment & Management Co. Multifamily BB+/Watch Neg BB+/Stable BRE Properties Inc. Multifamily BBB/Watch Neg BBB/Stable Capital Net Lease Automotive LLC (auto) BB/Watch Neg BB/Neg Colonial Properties Multifamily BBB-/Watch Neg BBB- /Neg Developers Diversified Realty Corp. Retail BBB-/Watch Neg BBB- /Neg Hospitality Properties Trust Net Lease (hotel) BBB/Watch Neg BBB/Neg ProLogis Industrial BBB-/Watch Neg BBB- /Neg UDR Inc. Multifamily BBB/Watch Neg BBB/Stable Rating Changes Property Focus To From -------- -- ---- Camden Property Trust Multifamily BBB/Stable BBB+/Neg First Industrial Industrial BB/Watch Neg BBB- /Neg FLEETWOOD ENTERPRISES: Wants to Access Lenders' Cash Collateral --------------------------------------------------------------- Fleetwood Enterprises, Inc., along with its affiliates, asks the U.S. Bankruptcy Court for the Central District of California to: a) authorize it to use cash collateral; b) authorize it to grant adequate protection to Bank of America, N.A., the administrative agent, under a prepetition secured credit facility, on its own behalf and on behalf of the lenders under that facility, to the extent of any postpetition decreases in the value of their interest in their collateral; and c) vacate and modify the automatic stay to the extent necessary. The Debtors, BofA and Wells Fargo Foothill, Inc., f/k/a Foothill Capital Corporation; Textron Financial Corporation; PNC Bank, National Association; Wachovia Capital Finance Corporation (Western); are parties to a Third Amended and Restated Credit Agreement dated as of Jan. 5, 2007. The Debtors granted BofA a security interest in substantially all of the personal property of each of FEI, Fleetwood International and the Borrowers. The Prepetition Collateral consists of: a) $41 million of receivables; b) $76 million of raw materials; c) $314 million of finished goods; d) $20 million of Real Estate Subfacility Assets; e) $38 million of real estate "boot collateral"; f) $18 million of other assets, including machinery and equipment; and g) $23 million of work in process. In sum, the Prepetition Collateral is valued at approximately $247 million and supports a borrowing base of $71 million. Terms of Cash Collateral Use The Debtors will use the cash collateral for working capital to fund payroll and payroll taxes and to pay normal operating expenses. As adequate protection for BofA and the Prepetition Secured Parties interests in the Prepetition Collateral liens will be granted on (i) all property and assets of the Debtors that were subject to the Prepetition Liens and (ii) all of the Debtors' unencumbered assets. The Replacement Liens are granted solely to secure any diminution in BofA's and the Prepetition Secured Parties' interest in (i) Cash Collateral and (ii) the Consumable Prepetition Collateral during the Cash Collateral Period. As additional adequate protection, to the extent that any Diminution reduces the value of the Replacement Liens below the outstanding balance of the Prepetition Claims, then BofA, on behalf of Gibson, Dunn & Crutcher LLP itself as Agent and on behalf of the Prepetition Secured Parties, will be granted, to the extent of the net decrease, superpriority claims under Section 507(b) of the Bankruptcy Code, and the Prepetition Lender Superpriority Claim will have priority in payment over any and all administrative expense claims of any kind under the Bankruptcy Code except for the fees and expenses of the Office of the United States Trustee and the Clerk of the United States Bankruptcy Court for the Central District of California. The Debtors will continue to pay, as and when due, all interest and letter of credit fees and all fees and expenses accruing on account of the Prepetition Claims during the Cash Collateral Period. About Fleetwood Enterprises Based in Riverside, California, Fleetwood Enterprises, Inc. -- http://www.fleetwood.com/-- produces recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection March 10, 2009, (Bankr. C.D. Calif. Lead Case No.: 09- 14254) Craig Millet, Esq. at Gibson, Dunn & Crutcher LLP represents the Debtors in their restructuring efforts. The Debtors have selected Ernst & Young LLP to serves as Auditor; FTI Consulting Inc. as Consultant; and Greenhill & Co. LLC as Financial Advisor. The Debtors listed estimated assets of $500 million to $1 billion and estimated debts of $500 million to $1 billion. FLEETWOOD ENTERPRISES: Wants KCC as Claims and Noticing Agent ------------------------------------------------------------- Fleetwood Enterprises, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Central District of California to employ Kurtzman Carson Consultants LLC as claims and noticing agent for the Court and the Bankruptcy Clerk. KCC, at the request of the Debtors or the Clerk's Office, will act as the claims and noticing Agent. KCC will assist the Debtors with, among other things, (a) the preparation and filing of schedules of assets and liabilities and statements of financial affairs, (b) maintenance of the Debtors' master creditor list, and (c) the preparation, mailing and tabulation of ballots for the purpose of voting to accept or reject a chapter 11 plan. KCC will be paid a $50,000 evergreen retainer for services performed and expenses incurred in relation to these Chapter 11 cases. To the best of the Debtors' knowledge, KCC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Fleetwood Enterprises Based in Riverside, California, Fleetwood Enterprises, Inc. -- http://www.fleetwood.com/-- produces recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection March 10, 2009, (Bankr. C.D. Calif. Lead Case No.: 09- 14254) Craig Millet, Esq. at Gibson, Dunn & Crutcher LLP represents the Debtors in their restructuring efforts. The Debtors have selected Ernst & Young LLP to serves as Auditor; FTI Consulting Inc. as Consultant; and Greenhill & Co. LLC as Financial Advisor. The Debtors listed estimated assets of $500 million to $1 billion and estimated debts of $500 million to $1 billion. GOTTSCHALKS INC: Bid Proposes April 3 to July 15 Closing Sales -------------------------------------------------------------- Reuters reports that liquidators could start conducting going-out- of-business sales at Gottschalks Inc's 58 retail stores and distribution center on or around April 3 if they win the company auction. According to Reuters, the sales could end by July 15. As reported by the Troubled Company Reporter on March 12, 2009, Gottschalks obtained approval from the U.S. Bankruptcy Court for the District of Delaware to auction off its assets of business on March 30. The Company hopes that a bidder offers a going concern transaction, i.e., a proposal to keep the business intact. A group of liquidators made the first bid. Gottschalks signed a deal with liquidators who have guaranteed an 85% return on the cost of the inventory, but the deal is still subject to higher and better offers. Judge Kevin Carey said the bidding process was designed to encourage a going concern sale, but Gottschalks will push through with the liquidation if no buyer emerges by March 30. Gottschalks, Reuters relates, said that it had appointed a joint venture comprised of liquidators SB Capital Group LLC, Tiger Capital Group LLC, Great American Group LLC, and Hudson Capital Partners LLC as a "stalking horse" bidder. About Gottschalks Inc. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., will serve as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts as of January 3, 2009. GRAFTECH INTERNATIONAL: S&P Keeps 'BB-' on Steel-Industry Woes -------------------------------------------------------------- Standard & Poor's Ratings Service revised its outlook on GrafTech International to stable from positive. At the same time, Standard & Poor's affirmed all other ratings, including its 'BB-' corporate credit rating. "The outlook revision reflects our assessment that a higher rating is not likely to occur within our outlook time horizon, even though S&P expects the company's financial profile to remain at a level S&P consider good for the current rating -- with debt to EBITDA of less than 3x," said Standard & Poor's credit analyst Sherwin Brandford. Previously, a higher rating was primarily predicated on leverage being maintained at less than 1.5x and operating margins be maintained at more than 20%. However, in S&P's view, due to prolonged weakness in the global steel industry, which will likely result in sharply weaker demand for the company's graphite electrodes, as well as significantly higher prices for needle coke, which is the company's main raw material, S&P does not expect GrafTech will be able to maintain operating margins of more than 20% in fiscal 2009. The ratings on GrafTech International Ltd. reflect the company's significant exposure to the cyclical steel industry, limited supplier diversity, and continued raw-material cost pressure. Still, the company maintains a good market position in graphite electrodes, has healthy margins due to current favorable industry conditions, and has a good liquidity position. GrafTech manufactures carbon-based materials for use in various applications. Its primary product, graphite electrodes, accounts for about 80% of its sales. The stable outlook reflects S&P's expectation that, despite the weakness in its end-markets, GrafTech will be able to achieve margins and volumes that are sufficient to generate adequate operating income such that credit metrics remain in line with S&P's rating, with debt to EBITDA of less than 3x. A positive rating action could occur if the company's operating performance throughout the cyclical downturn results in leverage being maintained at less than 1.5x and overall liquidity remains at or above current levels. S&P may take a negative rating action if volumes and/or margins are materially weaker than expected, resulting in S&P's assessment that leverage will increase and be maintained at more than 3x or if GrafTech is not successful at refinancing its revolving facility well in advance of its maturity date, thus reducing its liquidity position. GRAIN DEALERS: A.M. Best Cuts Fin'l Strength Rating to B (Fair) --------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating (FSR) to B (Fair) from B+ (Good) and the issuer credit rating (ICR) to "bb" from "bbb-" of Grain Dealers Mutual Insurance Company (Grain Dealers) (Indianapolis, IN). The outlook for both ratings is negative. These rating actions reflect Grain Dealers' deteriorated capital position, its history of volatile operating performance, uncertainty regarding its future pension liability and its ongoing exposure to weather-related losses. Offsetting these negative rating factors are Grain Dealers' efforts to lower its catastrophe losses and expand its catastrophe reinsurance program. The rating outlook reflects A.M. Best's concerns that operating results remain subject to both weather-related and pension charges that could further negatively impact Grain Dealers risk-adjusted capitalization. The dramatic loss of nearly 50% of the company's surplus through year-end 2008 was driven by a combination of storm losses that did not individually reach the levels that would have triggered Grain Dealers' reinsurance program, as well as sizable investment losses and unexpectedly high pension fund expenses. The significant drop off in investment earnings triggered the requirement for additional funding of the company's defined benefit pension fund. Grain Dealers is a multiple line carrier providing coverage primarily in the Southeast and Midwest, with a premium-based business mix of roughly 65% commercial and 35% personal lines. The company's production emphasis in recent years has continued to be small to mid-sized commercial businesses. GREEK CATHOLIC UNION: AM Best Cuts Fin'l Strength Rating to Weak ---------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to C- (Weak) from B (Fair) and issuer credit ratings to "cc" from "bb" of Greek Catholic Union of the USA (GCU) (Beaver, PA). The outlook for both ratings is negative. GCU is a fraternal benefit society. These rating actions reflect the 75% decline in GCU's unassigned funds to $6.4 million in 2008 from $26.6 million in 2007. This decline primarily was due to investment losses, both realized and unrealized, inherent under the current volatile investment markets. As a result, GCU's risk-adjusted capitalization has weakened considerably, and A.M. Best notes that regulatory capital ratios are very low. The rating actions also reflect GCU's continuing high position in commercial mortgage-backed securities, below investment grade bonds and preferred and common stocks relative to its modest surplus position. In addition, A.M. Best notes that GCU's exposure to fixed annuities has increased in each of the past five years and represents more than nine-tenths of its total reserves, with a significant portion of its fixed annuities without surrender protection. Partially offsetting these factors are GCU's long established presence as a fraternal benefit society and its generally positive operating results over the past five-year period. GCU's management is taking a number of steps to strengthen those areas, which have hampered surplus growth, in spite of generally favorable operating results. GREEN VALLEY: Section 341(a) Meeting Slated for April 16 in Texas ----------------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of creditors in Green Valley Growers, Inc.'s Chapter 11 case on April 16, 2009, at 10:00 a.m., at Suite 3401, 515 Rusk Ave, Houston, Texas. 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 Willis, Texas, Green Valley Growers, Inc. -- http://www.greenvalleygrowers.net/-- is a wholesale grower of blooming tropical, palms, perennials, crape myrtles, ferns, grasses, trees, ground covers, topiaries, and ornamental shrubs. The Debtor filed for Chapter 11 protection on March 9, 2009, (Bankr. S.D. Tex. Case No.: 09-31630) Alan D. Bynum, Esq. at Rolston & Bynum represents the Debtor in its restructuring efforts. The Debtor listed total assets of $18,567,174 and total debts of $20,653,605. GULFSTREAM APT: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Gulfstream Apt. Portfolio, LLC 3250 Wilshire Blvd., Suite 1106 Los Angeles, CA 90010-1577 Bankruptcy Case No.: 09-15342 Type of Business: The Debtor owns and operates apartment units. Chapter 11 Petition Date: March 10, 2009 Court: Central District Of California (Los Angeles) Judge: Samuel L. Bufford Debtor's Counsel: Bernard D Bollinger, Jr., Esq. bbollinger@buchalter.com Buchalter Nemer 1000 Wilshire Blvd., Suite 1500 Los Angeles, CA 90017 Tel: (213) 891-5009 Fax: (213) 630-5736 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor did not file a list of 20 largest unsecured creditors. H&E EQUIPMENT: Moody's Affirms Corporate Family Rating to 'B1' -------------------------------------------------------------- Moody's has affirmed the B1 corporate family and probability of default ratings of H&E Equipment Services, Inc. In addition, the B3, LGD 5 rating on H&E's $250 million 8.375% senior unsecured notes due 2016 has been affirmed. The rating outlook is stable. The B1 rating has been affirmed despite an expectation of declining non-residential construction activity through 2010 and likelihood of used equipment price declines near term. H&E's low leverage and good liquidity profile have positioned the company well to weather the severe construction downcycle. H&E had 2008 debt to EBITDA of 2.0 times on a Moody's adjusted basis, the lowest leverage of all equipment rental companies rated by Moody's. Moody's estimates that H&E should be able to further reduce debt in 2009, as operating cash flow after low capital spending permits enough free cash flow to repay all the revolver borrowing that existed at December 31, 2008 -- approximately $76 million. However, despite expected debt reduction, leverage metrics should weaken as utilization rates suffer through the downturn; as well, the company's return on total asset measures should weaken even though fixed asset book values will likely decline with deferred capital spending and fleet depreciation. The stable outlook reflects an expectation that H&E's conservative leverage and good liquidity profile should enable the company to maintain a B1 rating profile though the construction downcycle. H&E's good liquidity profile stems chiefly from a $320 million secured, asset-based revolving credit facility that matures in August 2011. As of December 31, 2008, the $320 million revolver was backed by $520 million of eligible collateral and had $83 million of utilization. Although the revolving credit facility features a minimum fixed charge coverage test, the test activates when availability declines below $25 million. Likelihood of test activation is low due to the low revolver utilization level and the high eligible collateral surplus. Moody's last rating action on H&E occurred March 11, 2008 when the corporate family rating was affirmed. H&E is a multi-regional equipment rental company with 64 locations throughout the Intermountain, Southwest, Gulf Coast, Mid Atlantic, West Coast and Southeast regions of the United States. H&E has over 18,871 pieces of equipment having an original acquisition cost of approximately $786 million at December 2008. The company is a distributor for JLG, Gehl, Genie Industries (Terex), Komatsu, Bobcat, Yale Material, and Manitowoc. IMPAC MORTGAGE: Defers Interest Payment on Trust Preferred Stock ---------------------------------------------------------------- Impac Mortgage Holdings Inc. delivered its annual report on Form 10-K to the SEC Friday afternoon, disclosing disclosed that its Board of Directors decided in December 2008 to defer interest payments to holders of trust preferred securities. During the deferral period, interest on the trust preferred securities bear additional interest at a rate equal to the coupon rate on the respective security. Unless Impac again elects to defer interest payments, the Company is required to pay all accrued interest together with the additional interest at the next payment date. Furthermore, during the time that Impac defers interest payments, it may not, with limited exceptions, pay dividends on or redeem or purchase its capital stock nor make any payments on outstanding debt obligations that rank equally with or junior to the trust preferred obligations and, in some cases, it may not allow subsidiaries to pay dividends. In January 2009, Impac agreed to restructure (subject to definitive documentation) $51.3 million in trust preferred securities issued by Impac Capital Trust #1 and Impac Capital Trust #3. Under the terms of the restructuring, the interest rates are reduced from 8% to 2% through 2013 and increase one percentage point per year through 2017. Starting in 2018, the interest rates become variable at 3-month LIBOR plus 375 basis points. In connection with the restructuring, the Company paid a 2% consent fee to holders of Impac Capital Trust #1 and Impac Capital Trust #3 preferred shares for the January 2009 and December 2008 fourth quarter deferred interest payments. Impac has deferred interest on the remaining $12.0 million in trust preferred securities of $257,000 at December 31, 2008. At the end of the deferral period (five years) Impac must pay all deferred and accrued interest amounts or the securities become due. About Impac Mortgage Headquartered in Irvine, California, Impac Mortgage Holdings Inc. (NYSE: IMH) -- http://www.impaccompanies.com/-- is a mortgage REIT, that actively invested in non-conforming Alt A mortgage loans and to a lesser extent small balance commercial and multi- family loans. At December 31, 2008, Impac's balance sheet shows $6.7 billion in assets and $6.7 billion of liabilities. In 2005, the company's balance sheet showed $27.7 billion in assets. KMART CORP: To Shutter Stores, Cut At Least 250 Workers ------------------------------------------------------- In the process of shutting down underperforming stores in Florida, Kmart Corp. laid off more than 240 workers, Tampa Bay Business Journal reports. Two of the stores being closed are at 2800 34th St. North and 3951 34th St. South in St. Petersburg. The two stores employ 108 employees who may qualify for jobs in other Kmart or Sears outlets or get severance pay, St. Petersburg Times reports. According to the Orlando Business Journal, Kmart is also cutting 58 jobs at its Winter Park stores effective May 8, 2009. A list of store closings as of February 26, 2009, posted at the Web site of Kmart's parent, Sears Holdings Corporation, may be accessed for free at: http://www.searsmedia.com/tools/closing_02262009.pdf Kmart'S parent, Sears Holdings, has reported its fourth quarter and full year 2008 results: * net income for the quarter of $190 million as compared to net income of $426 million in the fourth quarter of 2007; * fully diluted earnings per share for the quarter of $1.55 as compared to fully diluted earnings per share of $3.17 in the fourth quarter of 2007; * adjusted EBITDA of $885 million in the fourth quarter as compared to $1 billion in the fourth quarter of 2007; * total impairment, store closing and severance charges of $336 million for the fourth quarter of fiscal 2008; * Kmart adjusted EBITDA increased 18% to $321 million in the fourth quarter of fiscal 2008 as compared to the fourth quarter of fiscal 2007; * implemented actions to improve operational efficiency in response to the economic climate which contributed to a reduction of $211 million in domestic selling and administrative expenses during the fourth quarter of fiscal 2008 and a $1 billion reduction in domestic inventory; * reduced total short-term borrowings on our $4 billion revolving credit facility from $1.9 billion at November 1, 2008 to $435 million at January 31, 2009; * repurchased 2.9 million shares for $120 million and debt securities for $29 million during the fourth quarter; * maintained strong balance sheet and liquidity position; and * Kmart began operating its own footwear business on January 1, 2009, which had previously been operated by a third party. According to W. Bruce Johnson, Sears Holdings' interim chief executive officer and president, fiscal year 2008 was a very difficult year for the U.S. economy, and its effect on consumer confidence reflects the turmoil that has enveloped the retail industry and Sears' business. However, he reveals that Sears is pleased with Kmart's performance, which increased its adjusted EBITDA in the quarter from the prior year despite the difficult environment. A full-text copy of Sears' fourth quarter and full year 2008 results containing, among others, the company's adjusted EBITDA and financial statements is available for free at: http://bankrupt.com/misc/Sears2008.pdf About Kmart Corp. Kmart Corporation is a predecessor operating company of Kmart Holding. In January 2002, Kmart Corp. and 37 of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the federal bankruptcy laws. The Debtors emerged from bankruptcy on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. Kmart completed its merger with Sears, Roebuck and Co. on March 24, 2005. About Sears Holdings Corporation Based in Hoffman Estates, Illinois, Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- parent of Kmart Holding Corp. and Sears, Roebuck and Co., is a broadline retailer with 2,317 full-line and 1,150 specialty retail stores in the United States operating through Kmart and Sears and 380 full-line and specialty retail stores in Canada operating through Sears Canada Inc., a 70%-owned subsidiary. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. * * * In February 2009, Standard & Poor's placed Sears Holdings 'BB-' corporate credit rating on Negative watch. Moody's Investor Service placed Sears Holdings Corporation's probability of default rating at 'Ba1' in September 2006. The rating still hold to date with a stable outlook. LEHMAN BROS: Nomura to Shut Down Unit With Former Lehman Staff -------------------------------------------------------------- Nomura Holdings, Inc., according to a March 12, 2009, Bloomberg News report, will shut down an investment banking department containing former Lehman Brothers, Inc., staff on April 1. The former Lehman bankers, according to the report, will be transferred to a newly created investment banking business development department, which will carry research and consulting for Nomura. Other former Lehman bankers will go to Nomura departments on merger and acquisitions advisory and corporate finance, the report added. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Holdings Had $214.2BB in Assets Upon Bankruptcy ---------------------------------------------------------------- Lehman Brothers Holdings Inc. filed with the U.S. Bankruptcy Court for the Southern District of New York on March 12, 2009, its schedules of assets and liabilities, disclosing: A. Real Property 27 Commerce Drive, Cranford, NJ - Land $5,467,500 27 Commerce Drive, Cranford, NJ - Bldg. 6,078,290 10350 Park Meadows Drive, Littleton, CO 3,244,718 B. Personal Property B.1 Cash on hand 25 B.2 Bank Accounts Citibank Acct. # 40615202 546,321,948 Citibank Acct. # 3062-2222 (633,120) First National Bank Acct. # 9015175 6,031,109 Bank of America Acct. # 606420805010 3,385,081 HSBC Bank Middle East Ltd. 3,050,420 Citibank Handlowy 2,637,973 Royal Bank of Canada 2,048,493 Bank of America, New York 2,024,613 Citibank Pty Limited 1,372,986 Bank of America Acct. # 601430058013 1,188,386 Citibank Acct. # 307757763 1,099,244 Citibank, A.S. Acct. # 0091803003 1,047,431 Citibank, A.S. Acct. # 201492017 687,812 Israel Discount Bank 583,382 Swedbank 385,296 National Bank of Kuwait 371,601 Citibank Rt. 333,599 Ceskoslovenska Obchodni Banka 325,048 ABN-AMRO 247,210 Others 9,478,036,075 B.3 Security Deposits Equity Owner Holdings Los Angeles 150,834 Middlefield Park Associates 165,000 Consultatio Inversora S.A. Buenos Aires 100,000 Electric Deposit: Con Edison 88,290 Refundable Retainer: Denver 3,386 Refundable Retainer: Nine Penn Center 1,440 Electric Deposit: Niagara Mohawk Power 400 Rent Deposit: Huntsville NC 850 Auto Lease Deposit: Audi Auto Lease 749 Rent Deposit: Leonard E. Dwyer 800 B.5 Art objects and other Collectibles 1,783,426 B.9 Interests in Insurance Policies 14,149,391 See http://bankrupt.com/misc/lbhi_b9.pdf B.13 Business Interests and stocks 26,457,361,306 See http://bankrupt.com/misc/lbhi_b13.pdf B.14 Interests in partnerships Trust Preferred 37,678,885 ECAPS, LLC 17,877,000 LB UK CAP Fund 4LP 13,922,370 Corporate Principal Investments (3,755,111) Wilton Re 183,841,317 CLS 870,034 Better Alternative Trading Systems 67,500,000 Lehman Housing Capital 1,000 Lehman Loan Funding 250 IMX Mortgage Exchange 15,511 B.16 Accounts Receivable 151,377,099,057 See http://bankrupt.com/misc/lbhi_b16.pdf B.18 Other Liquidated Debts State and Local Taxes LBHI and Subs - Nebraska 1,000 LBHI and Subs - Alaska 1,000 LBHI and Subs - Portland, Oregon 7,300 LBHI and Subs - Kansas 2,000 LBHI and Subs - Minnesota 533,823 LBHI and Subs - Oregon 164,284 LBHI and Subs - Utah 77,352 LBHI - Ohio 3,000 B.21 Other Contingent & Unliquidated Claims Prepaid Pension 156,914,837 Federal & Foreign Income Taxes 940,000,000 State Taxes - LBHI & Subs. Arizona 359,950 California 11,419,425 Colorado 1,588,560 Hawaii 1,005,815 Illinois 834,937 Massachusetts 2,312,689 New York State 9,024,094 New York City 14,678,823 State Taxes - LBHI New Jersey 432,660 B.25 Vehicles 36,131 B.28 Office equipment, furnishings and supplies 271,863,587 B.29 Machinery 357,284,594 B.30 Inventory 23,164,886,703 B.35 Other Personal Property 1,127,868,509 TOTAL SCHEDULED ASSETS $214,280,701,870 ======================================================= C. Property Claimed as Exempt Undetermined D. Secured Claim Undetermined See http://bankrupt.com/misc/lbhi_schedD.pdf E. Unsecured Priority Claims Undetermined See http://bankrupt.com/misc/lbhi_schedE. F. Unsecured Non-priority Claims Corporate Guarantee Undetermined See http://bankrupt.com/misc/lbhischedF_guarantee.pdf Debt Undetermined See http://bankrupt.com/misc/lbhischedF_debt.pdf Intercompany Funding Agreements Undetermined See http://bankrupt.com/misc/lbhischedF_intercomp.pdf Litigation Undetermined See http://bankrupt.com/misc/lbhischedF_litigation.pdf Payables Undetermined See http://bankrupt.com/misc/lbhischedF_payables.pdf TOTAL SCHEDULED LIABILITIES Undetermined ======================================================== Lehman Brothers Holdings, Inc., also filed schedules of its executory contracts and non-residential real property leases: * Data Center License Agreement, available for free at http://bankrupt.com/misc/lbhischedG1.pdf * Derivative Contracts, available for free at http://bankrupt.com/misc/lbhischedG2.pdf * Expatriate Agreements, available for free at http://bankrupt.com/misc/lbhischedG3.pdf * Insurance Agreements, available for free at http://bankrupt.com/misc/lbhischedG4.pdf * Intercompany Funding Agreements, available for free at http://bankrupt.com/misc/lbhischedG5.pdf * Lease Agreements, available for free at http://bankrupt.com/misc/lbhischedG6.pdf * Open Trade Contracts, available for free at http://bankrupt.com/misc/lbhischedG7.pdf * Proprietary Trading Agreements, available for free at http://bankrupt.com/misc/lbhischedG8.pdf * Restricted Stock Unit Agreements, available for free at http://bankrupt.com/misc/lbhischedG9.pdf * Severance Agreements, available for free at http://bankrupt.com/misc/lbhischedG10.pdf * Sub-lease Agreement, available for free at http://bankrupt.com/misc/lbhischedG13.pdf * Tax Allocation Agreements, available for free at http://bankrupt.com/misc/lbhischedG14.pdf * Vendor Contracts, available for free at http://bankrupt.com/misc/lbhischedG11.pdf * Warehouse and Storage Agreements, available for free at http://bankrupt.com/misc/lbhischedG12.pdf Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Commercial Paper Files Asset & Debt Schedules -------------------------------------------------------------- Lehman Commercial Paper Inc. filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities on March 12, 2009, disclosing: A. Real Property $0 B. Personal Property B.1 Cash on hand B.2 Bank Accounts 9,907,079 B.9 Interests in Insurance Policies SAFECO Insurance Company Undetermined B.13 Business Interests and stocks 737 Portfolio Trust 20,258,845 Bromley, LLC 13,690,479 East Dover Limited 105,584,150 Ivanhoe Lane Pty Limited 5,829,474 Jet Partners, LLC 6,514,186 Laminar Holdings, LLC 6,105,486 LB Global Investment Corp., Inc. 812,708 LCPI Properties, Inc. 1,022,901,872 Lehman ABS Corporation 66,509,230 Lehman Pass-through Securities 587,053,823 Leveraged Loan Trading Holdings, Inc. 224,661,589 LW-RTC, Inc. 20,830,606 N.P. Holdco, Inc. 3,492,947 Pentaring, Inc. 166,098,622 Pindar Pty Ltd. 4,582,030 Select Asset, Inc. 3,644,741 Structured Asset Securities Corporation 42,395,576 Tallus, Inc. 10,071,872 West Dover, LLC 2,929,851 Others (30,662,971) B.16 Accounts Receivable 40,588,094,686 See http://bankrupt.com/misc/lcpi_b16.pdf B.28 Office equipment, furnishings & supplies 1,678,011 B.30 Inventory 10,063,557,149 B.35 Other Personal Property 525,472,040 TOTAL SCHEDULED ASSETS $53,472,014,081 ======================================================== C. Property Claimed as Exempt Undetermined D. Secured Claim Undetermined See http://bankrupt.com/misc/lcpischeduleD.pdf E. Unsecured Priority Claims Undetermined F. Unsecured Non-priority Claims Litigation Undetermined See http://bankrupt.com/misc/lcpischedF_litigation.pdf Payables Undetermined See http://bankrupt.com/misc/lcpischedF_payables.pdf TOTAL SCHEDULED LIABILITIES Undetermined ======================================================== Lehman Commercial Paper, Inc., also filed a schedule of its executory contracts and non-residential real property leases, available for free at http://bankrupt.com/misc/lcpi_schedG.pdf Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Seeks Approval of Sixth Gear Funding Settlement ---------------------------------------------------------------- Lehman Commercial Paper, Inc., asks Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to approve its settlement agreement with Sixth Gear Funding Trust and its affiliates. The companies entered into the agreement dated March 6, 2009, to settle their dispute, which ensued following LCPI's rejection of their master repurchase agreement with Sixth Gear. The MRA permitted Sixth Gear Funding Trust, Sixth Gear Solutions Corp. and Sixth Gear Inc. to get funding from LCPI to purchase automobile retail installment contracts from automobile dealers. About 89% of the funding for the Sixth Gear Companies' purchases comes from the sale of their receivables to LCPI under the agreement. The rejection of the MRA was approved by the Court in an order dated November 21, 2008. The same order also authorized Sixth Gear Funding and its affiliates to file proof of claims for any damages resulting from the rejection. The salient terms of the settlement agreement are: (1) Collections received after March 6, 2009, on receivables outstanding as of that date should be divided between LCPI and Sixth Gear on a 50/50 basis and should be distributed monthly, in accordance with the times stated in the MRA. LB Group I Inc. agreed that it will not receive any distribution as a preferred shareholder from the companies' 50% share. (2) Sixth Gear Funding and its affiliates should ensure the direction of the collections into the controlled accounts designated under the MRA and should no longer permit the collections to be deposited in separate accounts under their control. (3) LCPI should manage all aspects related to the servicing of the receivables outstanding as of March 6, 2009, subject, in certain instances, to the consent of Sixth Gear Inc. (4) The parties acknowledge that Sixth Gear Solutions is the legal owner of the auto finance loans underlying the receivables. (5) All cash and assets of Sixth Gear Funding and its affiliates, other than the outstanding receivables and collections received after March 6, 2009, should be first utilized to pay the liabilities of those companies, and then should be apportioned according to the preferred equity ownership in Sixth Gear Inc. and distributed to the preferred holders. (6) Sixth Gear Funding and its affiliates have agreed to pay all fees, costs and expenses including costs of counsel, of LCPI and LB Group related to transactions involving them, provided that they will not be required to pay fees, costs and expenses in excess of $75,000 incurred in connection with the documentation, negotiation and efforts to procure approval from the Court of the settlement agreement, or the termination of the MRA. (7) Sixth Gear Funding and its affiliates, Warburg Pincus Private Equity IX L.P., LCPI and LB Group have agreed to release each other from all claims resulting from the MRA, among other things. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Court Dismisses Swiss Unit's Chapter 11 Case ------------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York dismissed the Chapter 11 case of Lehman Brothers Finance AG, also known as Lehman Brothers Finance SA. In an order dated March 12, 2009, Judge Peck said that the commencement of LBF's Chapter 15 case and the recognition of its bankruptcy proceeding in Switzerland as a foreign main proceeding warrant the dismissal of its Chapter 11 case. Judge Peck held that the lawsuit filed by Declan Kelly in October 2008 against LBF will continue to be administered by the Court in connection with LBF's Chapter 15 case and the Chapter 11 cases of Lehman Brothers Holdings Inc. and its units. Prior to the entry of the order, Millennium International, Ltd., asked the Court to deny PwC's motion arguing that LBF is not entitled to recognition as a foreign main proceeding pursuant to Section 1517(b) of the U.S. Bankruptcy Code. Millennium asserted that continuing LBF's Chapter 11 case will be far more efficient and cost effective so that the U.S. Bankruptcy Court can, among others, address claims objections and disputes over the interpretation of LBF's English language contracts, rather than subjecting creditors to the Swiss Proceeding conducted in German. Millennium, an investment fund incorporated under the laws of the Cayman Islands, is a party to an ISDA transaction with LBF. PwC, in response to Millennium's objection, maintained that LBF's Chapter 11 case should be dismissed and its Swiss Proceeding should be recognized as a foreign main proceeding. PwC related that LBF managed its affairs from its headquarters in Switzerland, where its primary assets were booked and operations were undertaken. PwC asserted that Millennium will not be prejudiced by the immediate entry of the recognition order because the recognition order can be modified or terminated if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist. Moreover, PwC said Millennium has already filed a claim in the Swiss proceeding. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Hong Kong Investors Sue HSBC, BoNY for $1.6BB -------------------------------------------------------------- Six Hong Kong investors -- Siu Lui Ching, Chun IP, Jin Liu, Yin Ying Leung, Lai Mei Chan, Sing Heung on behalf of Ka Kin Wong and other similarly situated Hong Kong investors -- filed an adversary proceeding before the U.S. Bankruptcy Court for the Southern District of New York against HSBC USA, Inc., HSBC Bank PLC, Pacific international Finance Limited, HSBC Bank (Cayman) Limited, HSBC Holdings PLC, Scott Aitken, Cereita Lawrence, Sarah Coombs, Janet Crawshaw, Sylvia Lewis, The Bank of New York Mellon Corporation, and Lehman Brothers Special Financing Inc. The complaint seeks the return of $1.6 billion securing the collateral for structured notes linked to Lehman Brothers Holdings, Ltd., rather than allow the Lehman estates to seize the collateral, Debra Mao and Kelvin Wong of Bloomberg News reported. According to the report, the complaint says HSBC and its affiliates are the issuer, trustee, and custodian of about $2 billion of derivatives marketed as "minibonds," while BNY Mellon is a custodian of part of the collateral. The complaint accuses HSBC of failing to protect the collateral and seeks damages from HSBC for alleged breach of contract, breaches of fiduciary duties, and negligence. "The Hong Kong legal system cannot help us get back our money, so we have to bring our case to the U.S.," Peter Chan, head of the group of Hong Kong investors, told The International Herald Tribune. According to the newspaper, the adversary proceeding seeks class-action status for about 33,000 minibond investors in Hong Kong. Bloomberg said Hong Kong's securities regulator is investigating complaints about Lehman minibonds, while the city's legislature is holdings its own hearings. Bloomberg, citing a study by the Hong Kong Securities and Futures Commission published in February 2009, said a total of HK$13.9 billion, or US$1.8 billion, of the credit-linked notes arranged by a local Lehman unit were sold to Hong Kong investors. The Hong Kong investors are represented by Coughlin Stoia Geller Rudman & Robbins, LLP, in the complaint. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Simpson Thacher Plays Key Role in DIP Loan ------------------------------------------------------------- Law firm Simpson Thacher & Bartlett has played a key role in the $8 billion debtor-in-possession financing facility for Lyondell Chemical Company. Simpson Thacher advised UBS Securities LLC (as lead arranger) and UBS AG, Stamford Branch (as administrative agent) in connection with the DIP financing facility for Lyondell. The $6.5 billion term loan, along with a $1.54 billion asset-based revolving facility arranged by Citigroup, closed on March 3 and will fund continued domestic and international operations of Lyondell. The funding of DIP loans has become increasingly hard to come by in recent months, with several prominent DIP lenders pulling back as the recession worsened. Often, pre-petition lenders need to provide the DIP funding. The Lyondell financing was provided by a group of 14 financial institutions and hedge funds that participated in the DIP through some intense negotiations and court proceedings. In addition to UBS and Citigroup, participants in the DIP loan included Goldman Sachs, Merrill Lynch, ABN Amro, as well as Appaloosa Capital, Apollo Management, Angelo Gordon, Farallon, Oaktree Capital Management, Oak Hill Advisors, Silver Oak Capital, Silver Point, and Strategic Value Partners. "Besides providing a vital lifeline to Lyondell, this transaction signals that large-scale debtor financing may be available in an otherwise highly challenged market if you're willing to negotiate with existing lenders through novel structures and unavoidably tough terms," said Simpson Thacher corporate partner Stephan Feder, one of four Simpson attorneys leading the UBS representation, alongside credit and banking partner William Sheehan, litigation partner Linda Martin and, bankruptcy senior counsel Kathrine McLendon. Simpson Thacher played multiple roles in advancing the deal -- not least turning an initial term sheet into a credit agreement that required non-stop negotiation for two months until the court approved the financing on February 27. The firm also had to help the DIP group overcome a series of objections to the deal from Lyondell's unsecured creditors and from one of its own bank participants, which challenged some of the structural aspects of the facility. "This was a fast-moving situation following the precipitous filing of a major company and culminated in the consummation of a complex credit facility with novel domestic and foreign elements," Mr. Feder explained. A key provision of the DIP facility -- one which the Simpson attorneys believe is likely to become more common in future debtor financings -- is its "roll-up" feature. In addition to $3.25 billion in new money term loans, the package includes another $3.25 billion "roll-up" of a portion of Lyondell's existing pre- petition senior secured loans. Roll-ups, the designation of certain pre-petition loans as post- petition loans with a higher priority in the capital structure, can be an important enticement to existing lenders when contemplating a DIP loan. Several other recent DIP financings have included roll-up components, including facilities for Aleris International, Inc., and VeraSun Energy Corporation. The Lyondell DIP is different, however, because it includes the roll-up by some, but not all, pre-petition lenders. Simpson's Ms. McLendon believes this is the first time this structure has been utilized. "A roll-up of only a portion of pre-petition indebtedness puts enormous burdens on the administration of the facility," Mr. Feder explained. "UBS did a fabulous job in stepping up to take the lead role as agent." "In addition," Mr. Sheehan added, "UBS' active participation in building a consensus among the DIP lenders made our job infinitely easier." A few other details that make the Lyondell financing stand far apart from the typical DIP deal: From Term Sheet to Credit Agreement Three days after Lyondell's Chapter 11 filing on January 6, the lenders provided $2.17 billion of financing without a fully negotiated credit agreement. As Simpson Thacher's Mr. Sheehan said, "It's highly unusual for a group of banks to fund a multi-billion dollar loan with only a term sheet and some promissory notes. From the day the term sheet was presented to the court on January 7 until closing, our job was to convert it into a robust credit agreement that would withstand numerous challenges and ultimately be acceptable to a disparate group of investors, not to mention the company and its existing claimholders." When the term sheet was first presented, a lead agent had yet to be named. "There was a line in the document that said 'To be determined,'" Mr. Sheehan said. "At the 11th hour, UBS stepped up and took on the role of lead arranger and administrative agent, which was significant given the risks and leadership required by the role." Because the DIP participants had already committed a substantial portion of funding even before the definitive credit agreement had closed, "all 14 parties had to be satisfied by the final credit agreement. That definitely added some color to our negotiations," Mr. Sheehan explained. Mr. Sheehan, who has worked on numerous billion-dollar syndicated loans for acquisitions and restructurings, said that the Lyondell deal "is absolutely on my short list of most challenging transactions." Evidentiary Hearings/Objections Even with round-the-clock negotiations between the Company and its lenders, the DIP facility still faced challenges from key parties, including Lyondell's Official Committee of Unsecured Creditors. Among other things, the Committee objected to the loan's one-year maturity date, as well as what they perceived were overly ambitious milestone dates in completing a plan of reorganization. The Committee further pressed concerns that certain covenants in the DIP would allow the lender group to take over Lyondell in a so-called "loan-to-own" plan. One of the bank lenders participating in the DIP raised its own objections to certain structural features of the roll-up provisions, a development Ms. Martin confirmed "was really quite unusual." The parties gathered for three days of evidentiary hearings before U.S. Bankruptcy Judge Robert Gerber, during which the various objections were aired. Multiple witnesses, including Lyondell's CFO and a senior official from UBS defended the funding. Ms. Martin said, "A three-day evidentiary hearing to approve a loan is definitely not the norm, and illustrates how complicated this financing was, and how so many parties needed to be accommodated before the deal could be completed." Judge Gerber ruled that the terms of the financing were negotiated in good faith and at arm's length from the Company, and that it was in the best interests of Company and its creditors. "Judge Gerber made small tweaks to the agreement, modifying some of the milestone dates to accommodate the court's schedule, but the final agreement stood, a really satisfying outcome for all of us, given that virtually every single term was the result of consensus- driven negotiation," Ms. Martin said. "More than just a debtor financing, the Lyondell DIP represents a complex corporate deal within a bankruptcy context, which is important to keep in mind as more of these scenarios play out in the months ahead," Mr. Feder stated. "The scale of Chapter 11 cases is obviously growing, which, in a volatile economy, puts a premium on the ability of counsel to move expeditiously on numerous parallel paths. The transactions needed to turn companies around demand sophisticated capabilities in a variety of disciplines, such as corporate, litigation, banking, tax and international finance as well as bankruptcy advice." Other members of the Simpson Thacher UBS team included David Eisenberg, Walt Looney, Christian Struck, Joshua Koenig, Ursula Mackey and Benjamin Wells (corporate); Anne Knight and Jason Friedman (bankruptcy); Natalie Drucker, Daniel Stujenske, Edward Bauer and David Tejtel (litigation); Rob Holo and Jason Vollbracht (tax); Mardi Merjian and Julia Rubin (real estate); Lori Lesser and Marcela Robledo (intellectual property); Adeeb Fadil and Tim Mulvihill (environmental); Greg Grogan (executive compensation & benefits); along with paralegals Christina Mauricio and Elisabeth Juterbock. Lyondell was represented by Cadwalader Wickersham & Taft; Citigroup was represented by Davis, Polk & Wardell; and certain pre-petition agents were represented by Mayer Brown. About Lyondell Chemical Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries -- http://www.lyondellbasell.com/-- the world's third largest independent chemical company. Lyondellbasell produces polypropylene and advanced polyolefins products, is a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. About a year after completing the merger, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc., filed for Chapter 11. LyondellBasell is not part of the bankruptcy filing. LyondellBasell's non-U.S. operating entities are also not included in the Chapter 11 filing. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MASCO CORPORATION: Fitch Cuts Issuer Default Rating to 'BB+' ------------------------------------------------------------ Fitch Ratings has downgraded Masco Corporation's ratings: -- Issuer Default Rating to 'BB+' from 'BBB-'; -- Senior unsecured to 'BB+' from 'BBB-'; -- Unsecured bank credit facility to 'BB+' from 'BBB-'. The downgrade and Negative Outlook reflect Fitch's expectation that the deterioration of Masco's financial results and credit metrics during 2008 is likely to continue through 2009, driven by the expected further decline in U.S. housing metrics, lower home- improvement spending, and weaker European markets. Net sales for the fourth quarter of 2008 (4Q'08, ended Dec. 31, 2008) dropped 25% year-over-year due to lower sales volume to the new home construction market and the continued decline in consumer spending for home improvement products. Gross margins for the quarter were down 550 basis points to 20.1% from 25.6% during the 4Q'07. Selling, general and administrative expenses declined from $486 million during 4Q'07 to $422 million during 4Q'08, but increased as a percentage of sales by 290 bps to 21.3%. Excluding impairment charges for goodwill and other intangible assets, Masco reported a pre-tax loss of $112 million during the 4Q'08 compared with pre-tax income of $131 million during 4Q'07. Masco continues to generate significant free cash flow (cash flow from operations less capital expenditures and dividends), although lower than compared to previous years. The company generated $261 million of free cash flow during 2008, compared with $675 million for fiscal year 2007 and $471 million during fiscal year 2006. The company's 2008 credit metrics deteriorated compared to the end of 2007. Masco's leverage as measured by debt to EBITDA increased from 2.7 times (x) at Dec. 31, 2007, to 4.7x at Dec. 31, 2008. Interest coverage declined from 5.9x during fiscal year 2007 to 3.7x during fiscal year 2008. Fitch is encouraged that management has taken steps to preserve its liquidity position during these uncertain times. The company has been more restrained in its share repurchases during most of the year, which has allowed the company to build its cash position from $635 million at March 31, 2008 to $1.03 billion at the conclusion of 2008. In 2008, the company repurchased approximately 9 million shares of its common stock for $160 million, compared with $857 million of share buybacks during 2007. The company has not repurchased stock since July 2008 and has put its share repurchase program on hold. Masco's management will also recommend to its Board that the quarterly dividend be reduced from $.235 per common share ($.94 annually) to $0.075 per share ($.30 annually), saving approximately $225 million per year. The company's strong cash position somewhat mitigates the risk that Masco violates the covenants under its unsecured revolving credit facility with operating losses or further non-cash impairment charges. Currently, the company has approximately $486 million of borrowing headroom or $324 million of equity cushion to stay within its required 60% debt-to-capitalization covenant ratio. Masco has started discussions with its bank group to modify the covenants under the revolving credit facility. Future ratings and Outlooks will be influenced by broad housing and home improvement market trends, as well as company specific activity, particularly free cash flow trends and uses. Founded in 1929, Masco Corporation manufactures, sells and installs home improvement and building products, with emphasis on brand name products and services holding leadership positions in their markets. The company is among the largest manufacturers in North America of brand name consumer products designed for home improvement and new construction markets. MASTER ASSET VEHICLE: CIBC Seeks $115MM in Additional Collateral ---------------------------------------------------------------- Canadian Imperial Bank of Commerce has delivered trigger event notices to Master Asset Vehicle I and Master Asset Vehicle II requesting additional collateral. According to Dominion Bond Rating Service's Canadian Structured Finance Newsletter dated February 19, 2009, CIBC is the swap counterparty for four leveraged credit default swaps collateralized by the MAVs that are not subject to the 18-month moratorium period applicable to all other CDS transactions entered into by the MAVs. The collateralization triggers on these transactions were breached on March 3, 2009, prompting CIBC to deliver trigger event notices to the MAVs requesting additional collateral. On March 6, and March 9, 2009, CIBC delivered subsequent trigger event notices to the MAVs with respect to subsequent trigger breaches. The additional collateral demanded under the March 9 trigger event notice was withdrawn two days later. The total amount of additional collateral demanded by CIBC now stands at $95.4 million for MAVI and $19.3 million for MAVII. CIBC has stated that the deadline for providing additional collateral is 5:00 p.m. on March 13, 2009. DBRS said it had not been informed of the posting of additional collateral. DBRS said the failure of the MAVs to post additional collateral will result in a partial or total unwind of the CIBC transactions with the MAVs. For MAVII, the resulting reduction in collateral supporting the notes is capped at $107,742,597 (or approximately 1.1% of the assets of MAVII). The MAVs hold one other transaction that retained the original collateralization triggers and is not subject to the 18-month moratorium period. The Class 15 Ineligible Asset Tracking Note is unrated by DBRS and is secured by a leveraged CDS with Royal Bank of Scotland (RBS) as swap counterparty. Unlike the CIBC transactions, these trades were siloed from the MAVs and as such, the performance of the RBS transactions will not affect the Notes. For greater certainty, the breach of the collateralization triggers for transactions not subject to the 18-month moratorium does not count as a breach of any of the five spread-loss matrices that all of the other leveraged CDS transactions reference. As such, a partial or total unwind of these transactions would not be the first step toward the MAVI and MAVII transactions converting from a spread-loss regime for collateral calls to a mark-to-market regime. On March 6, 2009, DBRS confirmed the ratings of the MAVI and MAVII Class A-1 and Class A-2 Notes at "A". DBRS said the potential for transactions not subject to the 18-month moratorium to unwind was considered by DBRS when assigning the "A" rating to the Notes, and no rating action is warranted at this time. MBIA INSURANCE: Moody's Withdraws Ratings on 11,000 Bonds --------------------------------------------------------- Moody's has withdrawn the ratings on approximately 11,000 municipal bonds that were identified by MBIA Insurance Corporation as legally defeased. This rating action is a result of the recent determination made by MBIA Insurance Corporation that its liability under municipal bond insurance policies is extinguished upon a legal defeasance of insured debt. Moody's has been advised directly by other investment grade municipal bond insurance companies that, at the present time, their companies' insurance policies remain available to pay claims notwithstanding a legal defeasance by the issuer. The most recent rating action on the affected bonds was on November 7, 2008, when MBIA Insurance Corporation's insurance financial strength rating was downgraded to Baa1 from A2. On February 18, 2009, the insurance financial strength rating of MBIA Insurance Corporation was downgraded to B3 from Baa1 and the Baa1 insurance financial strength rating of MBIA Insurance Corporation of Illinois was placed on review for possible upgrade. MERUELO MADDUX: May File for Chapter 11 Bankruptcy Protection ------------------------------------------------------------- The San Francisco Chronicle reports that Meruelo Maddux Properties Inc. said that it may have to file for Chapter 11 bankruptcy protection. According to San Francisco Chronicle, Meruelo Maddux said that it has failed to service much of its debt. Meruelo Maddux said in a statement that it has stopped making payments on loans totaling $266 million. Meruelo Maddux, San Francisco Chronicle relates, said that it is seeking workout agreements with some lenders and has cut expenses by suspending projects and laying off some workers. Meruelo Maddux said that it is trying to sell some projects, but is finding few buyers due to the poor economy, San Francisco Chronicle states. Los Angeles-based Meruelo Maddux Properties Inc. owns, redevelops, and develops property in downtown Los Angeles and other California urban markets. It is one of downtown Los Angeles' largest landlords. MGIC INVESTMENT: Fitch Puts 'BB' Bond Ratings on Negative Watch --------------------------------------------------------------- Fitch Ratings has placed the ratings of holding company MGIC Investment Corp. and its subsidiaries Mortgage Guaranty Insurance Corp. and MGIC Australia Pty Ltd. on Rating Watch Negative. Mortgage Guaranty Insurance Corp. MGIC Australia Pty Ltd -- Insurer Financial Strength 'A-'. MGIC Investment Corp. -- Long-Term Issuer Rating 'BBB-'; -- $200 million 5.625% senior notes due Sept. 15, 2011 'BBB-'; -- $300 million 5.375% senior notes due Nov. 1, 2015 'BBB-'; -- $390 million 9% convertible junior subordinated debentures due 2063 'BB'. The rating action results from MGIC Investment's decision to defer interest payments on its $390 million convertible junior subordinated debentures due 2063. The 'BB' rating assigned to the convertible junior subordinated debt reflected Fitch's view of MGIC Investment's liquidity pressures and the risk that MGIC Investment would exercise its option to suspend payments. Notwithstanding, the announced deferral on $390 million of MGIC Investment's debt obligations is an indicator of the increasing financial pressure facing the company and the mortgage insurance sector as a whole. Fitch notes that MGIC Investment's liquidity remains adequate to meet intermediate term needs, with approximately $394 million of cash held at MGIC Investment as of Dec. 31, 2008. This level of cash serves to mitigate the risk of breaching certain covenants on the company's $200 million bank line by providing MGIC Investment with the ability to pay off the credit facility prior to a potential financial covenant breach (primarily risk-in force to capital limits) or at its due date in 2010. Under such a scenario, MGIC Investment would still maintain about $200 million of cash to service its other debt. Fitch expects to resolve the Rating Watch Negative on the ratings of the holding company and its subsidiaries following a review of the company's liquidity and capital plans in conjunction with an updated review of the operating environment for mortgage insurance companies. MGIC Investment is a holding company and through its wholly owned subsidiary MGIC is a leading provider of mortgage insurance in the U.S. As of Dec. 31, 2008, MGIC maintained U.S. risk in force net of reinsurance of $54.5 billion and consolidated U.S. statutory capital of $3.7 billion for a risk to capital ratio of 14.7:1. MGM MIRAGE: May be Broken to Pieces; Must Raise Over $1 Billion --------------------------------------------------------------- MGM Mirage could be broken into pieces, as it tries to negotiate new terms with lenders to avoid defaulting on its debts, Jeffrey McCracken and Tamara Audi at The Wall Street Journal report, citing people familiar with the matter. WSJ quoted a source as saying, "Basically everything MGM owns is for sale." According to WSJ, potential buyers have been considering purchasing MGM's Bellagio casino as well as its MGM Grand Detroit. WSJ, citing people familiar with the matter, relates that MGM has discussed selling the Bellagio but hasn't received an attractive bid. WSJ notes that MGM recently agreed to sell its Treasure Island casino hotel in Las Vegas to casino magnate Phil Ruffin for $775 million. WSJ relates that MGM is seeking for cash to pay off debts. MGM, says WSJ, must raise more than $1 billion to fund a massive, 67- acre resort and residential project in Las Vegas called City Center, but it has to cut debt. WSJ notes that MGM has about $1.27 billion in bond payments due later this year, in addition to $674 million in existing interest payments. Citing people familiar with the matter, WSJ states that MGM's annual cash flow has dropped to an estimated $1 billion this year from $2 billion in 2007. The sources said that MGM was negotiating with a group of lending banks on Friday to hand up to $2 billion in liens directly on its assets, according to the report. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported by the Troubled Company Reporter on March 12, 2009, Moody's Investors Service downgraded MGM Mirage's Probability of Default rating to Caa2 from Caa1 and its Corporate Family Rating to Caa1 from B3. As reported by the Troubled Company Reporter on March 3, 2009, Fitch Ratings downgraded MGM MIRAGE's Issuer Default Rating to 'CCC' from 'B'. Fitch said that the rating outlook remains negative. According to the TCR on March 3, 2009, Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Las Vegas-based MGM MIRAGE by two notches; the corporate credit rating was lowered to 'B-' from 'B+'. These ratings remain on CreditWatch with negative implications, where they were initially placed on Jan. 30, 2009. MILACRON INC: Wants to Hire Rothschild Inc. as Investment Banker ---------------------------------------------------------------- Milacron Inc. and its debtor-affiliates seek authority the United States Bankruptcy Court for the Southern District of Ohio to employ Rothschild Inc. as investment banker and financial advisor. Rothschild will: a) identify and initiate potential "transactions", to the extent deemed desirable by the Debtors; b) review and analyze the business plans and financial projections prepared by the Debtors including, but not limited to, testing assumptions and comparing those assumptions to historical trends of the Debtors and Debtors' industry; c) evaluate the Debtors' debt capacity in light of its projected cash flows and assist in the determination of an appropriate capital structure for the Debtors; d) assist the Debtors and their other professionals in reviewing the terms of any proposed Transaction or other transaction, in responding thereto and, if directed, in evaluating alternative proposals for a Transaction; e) determine a range of values for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Transaction; f) advise the Debtors on the risks and benefits of considering a Transaction with respect to the Debtors' intermediate and long-term business prospects and strategic alternatives to maximize the business enterprise value of the Debtors; g) assist in soliciting debtor-in-possession and/or exit financing; h) assist or participate in negotiations with the parties-in- interest, including, without limitation, any current or prospective creditors of, holders of equity in, or claimants against the Debtors and their respective representatives in connection with a Transaction; i) advise the Debtors with respect to and attend meetings of the Debtors' board of directors, creditor groups, official constituencies and other interested parties, as necessary; j) if requested by the Debtors, participate in hearings before the Bankruptcy Court and provide relevant testimony with respect to the matters described herein and issues arising in connection with any proposed Transaction or Plan; and k) render other financial advisory and investment banking services as may be agreed upon by Rothschild and the Debtors in connection with any of the foregoing. The Debtors relate that Rothschild will carry out unique functions and will use reasonable efforts to coordinate with the Debtors' other employed professionals to avoid unnecessary duplication of services. Neil Augustine, managing director at Rothschild, tells the Court that the firm's fee structure provides for these terms: a) Whether or not a "recapitalization transaction" is proposed or consummated, a cash advisory fee of $175,000 per month. b) A recapitalization fee of $3 million, payable upon the earlier of (i) the confirmation and effectiveness of a Plan or (ii) the substantial consummation of another Recapitalization Transaction. c) A fee provided that the minimum fee per transaction will be no less than $500,000, if Rothschild, at the request of the Debtors, assists the Debtors with the sale or acquisition of any assets of equity interests or any securities convertible into, or options, warrants or other rights to acquire the equity interests, which sale or acquisition does not constitute a Recapitalization Transaction, which fee will be payable upon the closing of any the sale or acquisition. Aggregate M&A Fee Consideration Percentage $25 million 2.50% $50 million 2.20% $100 million 1.75% $200 million 1.30% $300 million 1.10% $400 million 1.00% $500 million 0.90% $500+ million 0.85% d) A new capital fee equal to (i) 1.5% of any senior secured debt raised excluding any debtor-in-possession financing raised; (ii) 2.5% of the face amount of any junior secured debt raised; (iii) 4.0% of any senior or subordinated unsecured debt raised and (iv) 5.0% of any equity or hybrid capital raised. A new Capital Fee will be payable upon the closing of the transaction by which the new capital is committed. For the avoidance of doubt, the term "raised" will include the amount committed or otherwise made available to the Debtors whether or not the amount is drawn down at closing or is ever drawn down. No New Capital Fee will be assessed for new money equity investments made by Avenue Capital Management, H.I.G., Bayside Capital, DDJ Capital Management, Marathon Capital Management, any other holder of the Senior Secured Notes or General Electric Capital Corporation. Under the Fee Structure, Rothschild will credit against any Recapitalization Fee 50% of the Monthly Fees paid in excess of $1,050,000, and 50% of the New Capital Fees; provided, that the sum of the Monthly Fee Credit and the New Capital Fee Credit will not exceed the Recapitalization Fee against which it is to be credited. Mr. Augustine adds that prior to the petition date, the Debtors paid Rothschild approximately $175,000 to serve as a general retainer, which retainer amount will be returned to the Debtors once all amounts due to Rothschild under the Engagement Letter are paid. In addition, Rothschild was (i) paid $440,322 on account of monthly fees, (ii) reimbursed for $6,878 of expenses and (iii) advanced $20,000 for estimated expenses. Mr. Augustine assures the Court that Rothschild is a "disinterested person: as that term is defined in Section 101(14) of the Bankruptcy Court. About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. supplies plastics- processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron is also manufactures synthetic water-based industrial fluids used in metalworking applications. The company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead case No. 09-11235). Kim Martin Lewis, Esq., and Patrick Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Torys LLP as counsel to the CCAA proceeding; Conway Del Genio Gries & Co. LLC as restructuring and financial advisor; Rothschild Inc. as banker and financial advisor; Kurtzman Carson Consultants LLC as claims agent; and RSM Richter Inc. as CCAA monitor. When the Debtors filed for protection from their creditors, they listed assets and debts between $500 million to $1 billion. MILACRON INC: Wants to Hire KCC as Noticing and Disbursing Agent ---------------------------------------------------------------- Milacron Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Ohio to employ Kurtzman Carson Consultants as noticing, balloting and disbursing agent. The Debtors relate that they have thousands of creditors and potential creditors and numerous other parties-in-interest in these chapter 11 cases. Due to the large quantity of creditors that the Debtors have, the Debtors submit that the engagement of an independent third party to provide consulting services is the most effective and efficient manner by which to perform certain tasks. KCC will: i) perform noticing of motions and other pleadings; ii) perform claims management and reconciliation; iii) oversee the distribution of solicitation materials; iv) receive, review and tabulate ballots; v) perform other administrative tasks as maintaining creditor lists and mailing notices; vi) provide computer software support and database management; and vii) provide other administrative support to the Debtors throughout the bankruptcy proceedings. Michael Frisberg, vice president for corporate restructuring services of KCC, tells Court that the firm will be paid a $75,000 evergreen retainer for services and expenses in connection with these cases. Mr. Frisberg assures the Court that KCC is a "disinterested person: as that term is defined in Section 101(14) of the Bankruptcy Court. About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. supplies plastics- processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron is also manufactures synthetic water-based industrial fluids used in metalworking applications. The company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead case No. 09-11235). Kim Martin Lewis, Esq., and Patrick Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Torys LLP as counsel to the CCAA proceeding; Conway Del Genio Gries & Co. LLC as restructuring and financial advisor; Rothschild Inc. as banker and financial advisor; Kurtzman Carson Consultants LLC as claims agent; and RSM Richter Inc. as CCAA monitor. When the Debtors filed for protection from their creditors, they listed assets and debts between $500 million to $1 billion. MUZAK HOLDINGS: Silver Point Wants Same Right to Extend Deadlines ----------------------------------------------------------------- Silver Point Capital, L.P., tells the U.S. Bankruptcy Court for the District of Delaware, that as the largest creditor of Muzak Holdings LLC, et al., it should be given the same rights given by the prepetition secured lenders to the Official Committee of Unsecured Creditors with respect to extending deadlines for major milestones in the Debtors' Chapter 11 proceedings. On the Petition Date, the Debtors requested the Court to grant it authority to the the Prepetition Lenders' Cash Collateral on an interim and final basis. On February 12, 2009, the Court authorized the Debtors' use of cash collateral from the petition date through the date which is the earliest to occur of (a) the expiration date of the Remedies Notice Period or (b) August 15, 2009 (the "Specified Period"). The proposed final cash collateral order provides that prior to the expiration of the Specified Period, or the milestones to: (i) file a plan and disclosure statement (May 5, 2009); (ii) obtain approval of a disclosure statement (June 15, 2009); (iii) obtain a final order not otherwise subject to appeal confirming a plan (August 10, 2009), the Committee may, upon notice, extend such deadlines by an additional 35 days. In its limited objection which was filed on March 11, 2009, Silver Point Capital, L.P., relates that while the Committee's interests and its interests are likely to be aligned with respect to extending such deadlines, as it is the largest creditor of the Debtors, and because of its debt holdings, no Chapter 11 plan can be confirmed without its accceptance thereof, Silver Point should not be required to depend upon the Committee to exercise such right if Silver Point believes that the circumstances militate in favor of an additional short extension of 35 days. About Muzak Holdings LLC Headquartered in Fort Mill, South Carolina, Muzak Holdings LLC -- http://www.muzak.com-- creates a variety of music programming from a catalog of over 2.6 million songs and produces targeted custom in-store and on-hold messaging. Through its national service and support network, Muzak designs and installs professional sound systems, digital signage, drive-thru systems, commercial television and more. The company and 14 affiliates filed for Chapter 11 protection on Feb. 10, 2009 (Bankr. D. Del., Lead Case No. 09-10422). Moelis & Company is serving as financial advisor to the company. Kirkland & Ellis LLP is the Debtor's counsel. Klehr Harrison Harvey Branzburg & Ellers has been tapped as local counsel. In its bankruptcy petition, the company estimated assets and debts of $100 million to $500 million each. NATIONAL SEMICONDUCTOR: S&P Pares Corp. Credit Rating to 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it removed its ratings on Santa Clara, California-based National Semiconductor Corp. from CreditWatch and lowered its corporate credit and senior unsecured ratings on the company to 'BB+' from 'BBB-'. At the same time, S&P assigned a recovery rating of '3' to the company's senior unsecured debt, indicating a meaningful (50%-70%) recovery in the event of a payment default. The outlook is stable. "While the company's announcement that it amended key covenants in its bank agreements lifted a near-term concern about covenant compliance, S&P expects continued pressure on profitability for the near-to-intermediate term," said Standard & Poor's credit analyst Lucy Patricola. As a result, S&P expects debt to EBITDA could approach 4x before the industry experiences a meaningful recovery, which S&P does not expect before mid-2010. Despite near-term earnings pressure, the rating reflects the company's leading position in high performance analog semiconductors and good liquidity. The portfolio historically generated high profit margins and good cash flow. These factors are offset by concentration in the mobile phone industry, the high operating leverage that has exposed the company to sharp erosion of margin when volumes decline, and the concentration of maturing debt over the next three years. NATIONWIDE HEALTH: Fitch Raises Preferred Stock Rating from 'BB+' ----------------------------------------------------------------- Fitch Ratings has upgraded the ratings for Nationwide Health Properties, Inc.: -- Issuer Default Rating to 'BBB' from 'BBB-'; -- Unsecured bank credit facility to 'BBB' from 'BBB-'; -- Senior unsecured notes to 'BBB' from 'BBB-'; -- Preferred stock to 'BBB-' from 'BB+'. The Rating Outlook is Stable. Fitch's rating action is supported by improvements in NHP's leverage and debt service coverage ratios. NHP's debt plus preferred stock to undepreciated book capital was 41.2% as of Dec. 31, 2008, down from 52.6% and 48% at Dec. 31, 2006, and Dec. 31, 2007, respectively. Additionally, NHP's debt-to- recurring EBITDA ratio improved to 4.5 times (x) as of Dec. 31, 2008 compared to 5.6x as of Dec. 31, 2007. The ratings upgrade also reflects NHP's improved fixed-charge coverage ratio (defined as recurring EBITDA less capital expenditures and straight-line rents, divided by interest expense, capitalized interest, and distributions on preferred stock) of 2.9x for the 12 months ending Dec. 31, 2008, up from 2.5x in 2007 and 2.0x in 2006. The rating action acknowledges the increased diversity of NHP's asset base, particularly as a result of its agreement with Pacific Medical Buildings to acquire 18 medical office buildings for $747.6 million, a 50% interest in a full-service property management service provider, and an exclusive right (but not the obligation) to acquire up to $1 billion of additional medical office assets to be developed by PMB in the future. To date NHP has acquired 10 of the 18 medical office buildings plus two additional medical office buildings that were outside of the contribution agreement, totaling $260 million. Fitch notes that the PMB acquisition has grown NHP's existing asset base, increased its exposure to new, highly occupied medical office buildings, and decreased its reliance on revenue from its top senior housing and long-term care operators. As of year-end 2008, the acquisition of the PMB buildings increased the occupancy of NHP's medical office building portfolio by 3% and accounted for over 57% of the net operating income generated by such portfolio. Fitch also notes that NHP has a large and geographically diverse portfolio of 582 properties in 43 states including 546 consolidated properties comprised of 260 assisted and independent living facilities, 189 skilled nursing facilities, 10 continuing care retirement communities, seven specialty hospitals, and 80 medical office buildings. As of Dec. 31, 2008, 84% of the company's investments were subject to master leases. In addition, the majority of NHP's leases contain cross-collateralization and cross-default provisions. This minimizes adverse selection risk on weaker facilities in the portfolio. Fitch views positively NHP's full availability under its $700 million unsecured credit facility and its manageable debt maturity schedule, both of which provide NHP with financial flexibility. The ratings also point to the strength of NHP's management team. A key Fitch credit concern is the operator concentration inherent within NHP's portfolio. NHP's top five operators represented 40% of its total cash rents in the fourth quarter of 2008 (4Q'08). Fitch acknowledges that NHP's operator concentration has declined from 48% in 1Q'07. Fitch also notes that the current economic crisis and the restricted flow of credit could adversely affect NHP's tenants' ability to operate and meet obligations going forward. However, Fitch acknowledges that the bulk of NHP's portfolio is net-leased to operators, and the cash flow coverage levels at its facilities are generally solid. The Stable Outlook centers on NHP's strong liquidity position supported by $82.3 million of available cash, and full availability under its $700 million unsecured credit facility, both of which have contributed to an expected liquidity surplus of over $500 million through December 2010. In addition, NHP's large pool of unencumbered assets which cover unsecured debt by 2.5x, and NHP's manageable level of debt maturities with only 13% of total debt maturing through 2010 and 38% through 2011, position the company well over the next several years. The Stable Outlook further reflects NHP's diverse, well-leased portfolio of 84 operators, with cash rent derived from no more than 16% of any one geographic area or operator, as well as the master lease structure on the majority of its assets. Additionally, the company is well-positioned to benefit from long- term demand created by aging "baby boomers". Fitch's existing ratings and Outlook for NHP could come under pressure if (i) Fitch-defined fixed charge coverage were to fall below 2.5x or lower for several consecutive quarters, (ii) if NHP's ratio of total debt plus preferred stock to undepreciated book capital were to increase to above 50% for several consecutive quarters, (iii) if NHP's portfolio undergoes a declining trend in operating performance for several consecutive quarters, and (iv) if NHP were to increase its exposure to its top operators. Conversely, the current ratings or Outlook may improve if NHP were to increase the size of the company substantially, further diversify the lines of trade within its portfolio, maintain a manageable level of exposure to its top care operators while maintaining a minimum fixed charge coverage of 3x, and a maximum total debt plus preferred stock to undepreciated book capital ratio below 40% on a sustained basis. Based in Newport Beach, California, Nationwide Health Properties is a self-managed and self-administered real estate investment trust that invests in senior housing facilities, long-term care facilities, and medical office buildings. As of Dec. 31, 2008, the company had investments in 582 health care facilities in 43 states. PACIFIC SCP: A.M. Best Affirms & Removes Fair FSR Upon Merger ------------------------------------------------------------- A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength rating (FSR) of B (Fair) and issuer credit rating (ICR) of "bb" of Surety Company of the Pacific (SCP) (Encino, CA) as the company was acquired by American Contractors Indemnity Company (ACIC) (Los Angeles, CA), a subsidiary of HCC Insurance Holdings, Inc. (Houston, TX) [NYSE: HCC] on February 20, 2009. Following the acquisition, A.M. Best withdrew the ratings and assigned an NR-5 (Not Formally Followed) to the FSR and an "nr" to the ICR as SCP was dissolved and merged into ACIC. The outlook for these ratings was negative, and the ratings of ACIC are unchanged. SCP's ratings were placed under review with negative implications on November 25, 2008, following the net operating losses reported earlier in 2008, the significant reduction in capital caused by these losses and the statutory earnings drag associated with the company's unearned premium reserves. The under review status also contemplated the pending sale of the company to ACIC and the rating consequences that would have occurred if the transaction was not consummated. On March 3, 2009, HCC announced that ACIC had received regulatory approval of the deal from the California Department of Insurance. Concurrent with the acquisition of SCP by ACIC, the company's ratings were removed from under review and affirmed. Shortly following the acquisition, SCP was merged into ACIC, with all its assets and liabilities absorbed by ACIC. Upon SCP's merger and dissolution, its ratings were withdrawn. Prior to being merged, SCP was a leading provider of contractor license and permit bonds in California. PACIFIC ENERGY: Secures Creditor Protection in Canada ----------------------------------------------------- Pacific Energy Resources Ltd. has obtained creditor protection in Canada under the Companies' Creditors Arrangement Act (Canada) pursuant to an initial order granted on March 12, 2009, by the Supreme Court of British Columbia. The Company's Board of Directors authorized the Company to take this action as the best alternative for the long-term interests of the Company, its employees, creditors and other stakeholders. CCAA protection will stay creditors, suppliers and others from enforcing any rights against the Company and will afford the Company the opportunity to restructure its affairs. The Court has granted CCAA protection for an initial period expiring April 9, 2009, to be extended thereafter as the Court deems appropriate. If by April 9, 2009, the Company has not filed a restructuring plan or obtained an extension of the CCAA protection, creditors and others will no longer be stayed from enforcing their rights. The Company will provide a further news release on or before April 9, 2009, which will provide an update. While under CCAA protection, the Company's management remains responsible for the day-to-day operations of the Company. The Court has appointed Todd McMahon Inc. as Monitor, who will be responsible for monitoring the course and conduct of the U.S. proceedings as well as the Company's ongoing operations and reporting to the Court. The Company also announces that it has now closed on a $44 million debtor-in-possession financing and has received initial funding from the lenders. The DIP financing combined with the Company's operating revenue will provide sufficient liquidity to fund working capital, meet ongoing obligations and ensure that normal operations continue without interruption during its restructuring. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com-- engage in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09- 10785). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Rutan & Tucker LLP as their corporate counsel; Schully, Roberts, Slattery & Marino as special oil and gas counsel; Devlin Jensen as Canadian counsel; Zolfo Cooper as financial advisor; Lazard Freres & Co. LLC and Albrecht & Associates Inc. as investment bankers; and Omni Management Group LLC as noticing and claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. PALLAS CAPITAL: Fitch Affirms Counterparty Risk Rating ------------------------------------------------------ Fitch Ratings has affirmed Pallas Capital Corporation: -- Counterparty risk rating affirmed at 'AAA/F1+' Since Fitch's last review and affirmation on June 11, 2008, there has been a considerable increase in asset price volatility coupled with a decrease in the liquidity of many collateral types. In addition, Fitch downgraded the repo counterparty, Depfa Bank Plc, to 'A-/F1' from 'AA-/F1+'. Given these developments, Pallas has taken steps to increase their credit profile to be consistent with a 'AAA/F1+' rating. These steps include amendments to their existing requirements for short-term liquidity, advance rate levels, and eligible asset collateral types and concentrations limits. Pallas has maintained sufficient collateral for the program to pass its collateralization tests. As of Feb. 27, 2009, there was approximately 40% of subordination to the guaranteed investment contract holders for the collateral within Pallas. The subordination is on a market value basis and reflects the market price declines experienced in 2008. Eligible collateral now includes non-auction-rate 'AAA' FFELP student loan ABS, 'AAA' CMBS and corporate debt securities with ratings of 'B-' or greater. Corporate debt securities are limited to a maximum of 6.5% in securities with ratings below 'BB-', and a maximum of 3% in issuer exposure. In addition, the short term liquidity requirement has been increased to F1+ from F1. The rating affirmation is therefore due to these program amendments, which are consistent with Fitch's market value criteria at a 'AAA/F1+' level. Pallas issues GICs and enters into reverse repurchase agreements with eligible counterparties. Eligible counterparties will post collateral to the program and will receive funding for the market value of those assets less the amounts indicated by program advance rates. Required subordination levels based upon program advance rates are maintained via weekly margin calls. Pallas will also invest in short term investments with short-term ratings of F1+ in order to maintain the minimum liquidity level for the program. Currently, the only counterparty in the program is Depfa Bank Plc (IDRs rated 'A-/F1'). PALM INC: Completes Offering of $23.1MM Shares; to Get $83.9MM -------------------------------------------------------------- Palm Inc. on Friday said it has consummated the public offering of 23,125,000 shares of its common stock together with 3,468,750 additional shares sold pursuant to the exercise by the underwriters of their over-allotment option. On March 9, 2009, Palm said it has increased the size of its public offering of common stock to roughly 23.125 million shares at an offering price to the public of $6.00 per share. As reported by the Troubled Company Reporter, Palm said it has increased the size of its public offering of common stock to roughly 23.125 million shares, including roughly 18.5 million common shares underlying 49% of the units of Series C preferred stock and warrants acquired by Elevation Partners in January 2009. The public offering price per share is $6.00. Palm said it would receive net proceeds of roughly $83.9 million. Palm expects to use the proceeds to strengthen its working capital position and to further bolster the resources it is devoting to the launch of the Palm(R) Pre(TM) and future product-development efforts. Palm said the underwriters will have a 30-day option to purchase roughly 3.5 million additional shares of common stock from Palm to cover over-allotments, if any. Elevation Partners, which will recoup the $49 million it originally paid for the units, will use those funds to purchase roughly 8.2 million shares of Palm's common stock in the offering at the public offering price, Palm said. A full-text copy of Palm's Prospectus is available at no charge at: http://ResearchArchives.com/t/s?3a49 On March 3, 2009, Palm announced preliminary results for the third quarter of fiscal year 2009, ended February 27, 2009. Palm is scheduled to report financial results on March 19, 2009. Palm expects to report revenues for the third quarter of fiscal year 2009 in the range of $85 million to $90 million. The revenue declines versus the second quarter of fiscal year 2009 and third quarter of fiscal year 2008 are the result of reduced demand for our maturing legacy smartphone products, the challenging economic environment and later-than-expected shipments of the TreoTM Pro in the United States. Palm expects declining revenues and continued margin pressure from its legacy product lines in the fourth quarter of fiscal year 2009. Palm said cash used in its operations for the third quarter of fiscal year 2009 is expected to be between $95 million and $100 million. Cash, cash equivalents and short-term investments balance is expected to be between $215 million and $220 million at the end of the third quarter of fiscal year 2009. Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc. served as joint book-running managers for the offering. Palm Clarifies Investor's Interview On March 5, 2009, Bloomberg L.P. broadcast an interview with Roger McNamee, a Palm investor, on its Bloomberg TV television station at 1:10 pm Eastern time. Later that day Bloomberg posted the interview on its Web site, Bloomberg.com, and published an article written by Rochelle Garner and Hugo Miller via Bloomberg's news service and on Bloomberg.com. Both the interview and article discussed Palm and the Palm(R) Pre(TM) smartphone, which Palm plans to introduce during the first half of 2009 to win back customers from Apple's iPhone and Research in Motion's Blackberry. Mr. McNamee is Co-Founder and Managing Director at Elevation Partners, which in December increased its stake in Palm to 39%. Mr. McNamee, according to Bloomberg, said Palm new Pre smart phone will lure customers away from Apple Inc.'s iPhone when subscribers' contracts start expiring in June. "You know the beautiful thing: June 29, 2009, is the two- year anniversary of the first shipment of the iPhone," Mr. McNamee told Bloomberg. "Not one of those people will still be using an iPhone a month later." Palm said in a regulatory filing that Mr. McNamee's statement is an exaggerated prediction of consumer behavior pattern and is withdrawn. Mr. McNamee told Bloomberg "there are aspects of the Pre that are unlike any phone you've every seen before," and that "the Pre is the first one that is the next generation" and "the result is it does a lot of things the others guys don't do." Palm clarified that Palm Pre will be running on a different platform -- Palm webOS(TM) -- and as a result will have different operating characteristics and features than other phones. Palm said the Pre is still under development and it is premature to compare its full functionality with that of other phones. About Palm Inc. Headquartered in Sunnyvale, California, Palm Inc. (Nasdaq:PALM) -- http://www.palm.com/-- provides mobile computing solutions worldwide. The company offers Palm Treo smartphones, Palm LifeDrive mobile managers, and Palm handheld computers, as well as software, services, and accessories. * * * The Troubled Company Reporter said March 6, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Palm Inc. to 'CCC' from 'CCC+'. The outlook is negative. The action reflects significant further declines in revenues and liquidity, said Standard & Poor's credit analyst Bruce Hyman. As of November 30, 2008, the company's balance sheet showed total assets of $660,926,000, total liabilities of $811,503,000, Series B redeemable convertible preferred stock of $260,496,000, resulting in total stockholders' deficit of $411,073,000. PALM INC: Elevation Partners Has 34.2% Equity Stake --------------------------------------------------- Elevation Partners, L.P., reports that it holds 65.6 million shares of Palm, Inc., representing a 34.2% stake in the company. On March 9, 2009, Palm delivered a notice to Elevation and Elevation Employee Side Fund, LLC exercising its right pursuant to the parties' Securities Purchase Agreement to require Elevation and Side Fund to sell an aggregate of 49,000 Units pursuant to an underwritten public offering. Elevation and Side Fund entered into an Underwriting Agreement with Palm, Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc., pursuant to which Elevation and Side Fund agreed to sell an aggregate of 49,000 Units to the Underwriters at the same price paid by Elevation and Side Fund for such Units. In addition, Elevation and Side Fund agreed to purchase from the Underwriters 8,163,500 and 3,166 shares of Common Stock being offered in such Public Offering, respectively. As reported in today's Troubled Company Reporter, the sale of the Units to the Underwriter and the purchase of Common Stock in the Public Offering closed on March 13, 2009. Pursuant to the terms of the Securities Purchase Agreement, Palm will reimburse Elevation and Side Fund for expenses incurred by them in connection with the Forced Resale. In connection with the execution of the Underwriting Agreement and pursuant to the terms therein, Elevation and Side Fund have entered into commitments with the Underwriters not to engage in any sales of shares of Common Stock or securities convertible into or exercisable or exchangeable for Common Stock other than pursuant to the Underwriting Agreement for a period ending 60 days from the date on which Palm's Prospectus Supplement with respect to the Offering (the "Prospectus") is filed. In addition, Elevation Partners' Roger McNamee and Fred Anderson, in their capacity as members of Palm's board of directors, have each executed a letter agreement to the Underwriter restricting each of them from engaging in any sales of shares of Common Stock or securities convertible into or exercisable or exchangeable for Common Stock for a period ending 90 days from the date on which the Prospectus is filed. On March 10, 2009, Elevation Partners, and Messrs. McNamee and Anderson filed Form 4s disclosing their ownership of Palm securities. Elevation also holds Palm's Series C Convertible Preferred Stock and warrants to buy more Palm shares. Messrs. McNamee and Anderson may be deemed to indirectly own the securities. A full-text copy of Elevation's Form 4 filing is available at no charge at: http://ResearchArchives.com/t/s?3a4a A full-text copy of Roger McNamee's Form 4 filing is available at no charge at: http://researcharchives.com/t/s?3a4b A full-text copy of Fred Anderson's Form 4 filing is available at no charge at: http://researcharchives.com/t/s?3a4c About Palm Inc. Headquartered in Sunnyvale, California, Palm Inc. (Nasdaq:PALM) -- http://www.palm.com/-- provides mobile computing solutions worldwide. The company offers Palm Treo smartphones, Palm LifeDrive mobile managers, and Palm handheld computers, as well as software, services, and accessories. * * * The Troubled Company Reporter said March 6, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Palm Inc. to 'CCC' from 'CCC+'. The outlook is negative. The action reflects significant further declines in revenues and liquidity, said Standard & Poor's credit analyst Bruce Hyman. As of November 30, 2008, the company's balance sheet showed total assets of $660,926,000, total liabilities of $811,503,000, Series B redeemable convertible preferred stock of $260,496,000, resulting in total stockholders' deficit of $411,073,000. POWERMATE CORP: Wants Plan Filing Period Extended to July 10 ------------------------------------------------------------ Powermate Holding Corp., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive periods within which only they may file a Chapter 11 plan and solicit acceptances of that plan through and including July 10, 2009, and September 10, 2009, respectively. This is the Debtors' third exclusivity extension request. On December 5, 2008, the Court extended the Debtors' exclusive filing and solicitation periods to March 12, 2009, and May 12, 2009, respectively. The Debtors tell the Court that they have already liquidated the majority of their assets and have been actively focused on resolving their disputes with the Lowe's Companies, Home Depot, and the Pension Benefit Guaranty Association, and thus, have not had sufficient time to begin the Chapter 11 plan process. About Powermate Corp. Headquartered in Aurora, Illinois, Powermate Corp. -- http://www.powermate.com/-- manufactures portable and home standby generators, air compressors, and pressure washers. Powermate Holding Corp. is the parent of Powermate Corp. In turn, Powermate Corp. owns 100% of Powermate International Inc. Powermate Corp. operates the companys assets located in the United States. Powermate International has sales employees in Hong Kong and the Philippines. Powermate Holding has no employees or operations. Sun Capital Partners bought 95% of Powermate in 2004. Powermate Holding has two other non-debtor subsidiaries, Powermate Canadian Corp., located in Canada and Powermate S. de R.L. de C.V., which is domiciled in Mexico. The three companies filed for Chapter 11 protection on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498). Neil Herman, Esq., at Morgan, Lewis & Bokius, represents the Debtors as counsel. Kenneth Enos, Esq., and Michael Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors as local counsel. Monika J. Machen, Esq., at Sonnenschein Nath Rosenthal LLP, represents the Official Committee of Unsecured Creditors as counsel. Charlene D. Davis, Esq., Eric M. Sutty, Esq., Daniel A. O'Brien, Esq., at Bayard P.A., represent the Creditors Committee as local counsel. In schedules filed with the Court, the Debtors listed total assets of and debts of over $69 million and $144 million, respectively. RADIAN ASSET: Moody's Pares Insurance Strength Ratings to 'Ba1' --------------------------------------------------------------- Moody's Investors Service has downgraded to Ba1 from A3 the insurance financial strength ratings of Radian Asset Assurance and its wholly owned subsidiary, Radian Asset Assurance Limited. The rating action concludes a review for possible downgrade that was initiated on October 10, 2008, and follows Moody's downgrade of Radian Group Inc.'s primary mortgage insurance subsidiaries (to Ba3 for insurance financial strength) on February 13, 2009. The outlook for Radian Asset's insurance financial strength ratings is stable. The rating actions have implications for the various transactions wrapped by Radian Asset as discussed later in this press release. Moody's said that the downgrade of Radian Asset reflects the substantial deterioration in the credit profile of Radian Guaranty, the group's main mortgage insurance operating company and parent of Radian Asset, coupled with increased loss estimates on Radian Asset's pooled corporate exposures. According to Moody's, Radian Group's management has stated that it has discontinued, for the foreseeable future, writing any new financial guaranty business in light of current market conditions, and that it intends to utilize Radian Asset's available capital to support its mortgage insurance operations. The rating agency said that, while Radian Asset's capital profile remains strong currently, it could well decline over time as capital resources are diverted from the company to support Radian's substantially weakened mortgage insurance platform. This risk is partially mitigated by regulatory constraints on dividend distributions from the financial guarantor, added Moody's. As discussed in several recent Moody's Special Reports, credit conditions for residential mortgage-backed securities, corporate CDOs and CMBS have continued to deteriorate, which has negatively affected Moody's estimates of Radian Asset's expected-case and stress-case losses. While Radian Asset has limited exposure to mortgage-related risks in its insured portfolio, approximately 40% of the company's net par outstanding is concentrated in highly- rated mezzanine tranches of pooled corporate exposures. These large and potentially correlated risks could meaningfully weaken the company's capital adequacy position should the performance of these exposures deteriorate, particularly in light of the current economic environment. Moody's stated that the stable outlook reflects Radian Asset's significant capital cushion relative to expected and stress loss levels, together with regulatory limitations on the extraction of capital from the financial guarantor. Treatment Of Wrapped Transactions Moody's ratings on securities that are guaranteed or "wrapped" by a financial guarantor are generally maintained at a level equal to the higher of these: a) the rating of the guarantor (if rated at the investment grade level); or b) the published underlying rating (and for structured securities, the published or unpublished underlying rating). Moody's approach to rating wrapped transactions is outlined in Moody's special comment entitled "Assignment of Wrapped Ratings When Financial Guarantor Falls Below Investment Grade" (May, 2008); and Moody's November 10, 2008 announcement entitled "Moody's Modifies Approach to Rating Structured Finance Securities Wrapped by Financial Guarantors". In light of the downgrade of Radian Asset to below the investment grade level, Moody's will position the ratings of all structured transactions wrapped by Radian Asset at the higher of the underlying rating of the structured security -- regardless of whether the underlying rating is published or not -- and Radian Asset's Ba1 rating. For all other transactions wrapped by Radian Asset, including municipal securities, Moody's will withdraw the ratings for which there are no published underlying ratings in accordance with current rating agency policy. For these transactions, if the rating of Radian Asset should subsequently move back into the investment grade range, or if the agency should subsequently publish the underlying rating, Moody's would reinstate the rating to the wrapped instruments. List Of Rating Actions These ratings have been downgraded, with a stable outlook: * Radian Asset Assurance Inc. -- insurance financial strength to Ba1 from A3; * Radian Asset Assurance Limited -- insurance financial strength to Ba1 from A3. The last rating action related to Radian Asset occurred on October 10, 2008, when Moody's placed the company's ratings on review for possible downgrade. Radian Group, Inc. is a US based holding company which owns a mortgage insurance platform comprised of Radian Guaranty, Radian Insurance and Amerin Guaranty, as well as a financial guaranty insurance company, Radian Asset. The group also has investments in other financial services entities. As of December 31, 2008, Radian Group had total assets of $8.1 billion and $2.0 billion in shareholder's equity. REDMAN-HIRAHARA FOUNDATION: Files for Chapter 11 Bankruptcy ----------------------------------------------------------- Ramona Turner at Santa Cruz Sentinel reports that Redman-Hirahara Foundation has filed for Chapter 11 bankruptcy protection. According to Santa Cruz Sentinel, people who are trying to restore the historic Redman-Hirahara farmhouse off Highway 1 said that Redman-Hirahara Foundation would have been foreclosed on Tuesday, the same day it filed for bankruptcy. Santa Cruz Sentinel relates that those people were trying to turn the farmhouse into a visitors' center that will tell the history of the Pajaro Valley. Santa Cruz Sentinel relates that Redman-Hirahara Foundation bought the 14-acre property for $1.9 million in 2005, less than the $2.4 million that the property owner, Green Farm LLC, was seeking. Citing Redman-Hirahara Foundation, the report says that an appraisal in 2008 revealed that the property wasn't worth either price. "The property should not be valued at such an appraised value because it's zoned as agriculture," the report quoted Redman-Hirahara Foundation board member Dean Cooley as saying. Mr. Cooley, the report states, said that two higher prices were based on assumptions that the property would be commercially developed. According to the report, Mr. Cooley said, "We had it reappraised a year ago and it was $945,000. That's significantly lower than $2.4 million." Santa Cruz Sentinel, citing Mr. Cooley, states that the lower appraisal became an issue with the board. Redman-Hirahara Foundation started trying to renegotiate the property and stopped making its mortgage payments last year, says Santa Cruz Sentinel. Santa Cruz Sentinel reports that the mortgage holder, Green Farm LLC, has agreed to knock a couple hundred thousand off the purchase price to $1.5 million, about $200,000 out of Redman- Hirahara Foundation's price range. "We paid twice as much as it's worth. We either need to get out of the mortgage or try another route. Our mission is the house not the mortgage," Santa Cruz Sentinel quoted Redman-Hirahara Foundation board member Barbara Powell as saying. According to Santa Cruz Sentinel, Redman-Hirahara Foundation owes $68,000 in back taxes. "We thought we could get a welfare exemption to lower the taxes," but the foundation didn't qualify and has since worked out a payment plan, the report says, citing Ms. Powell. Santa Cruz Sentinel relates that Redman-Hirahara Foundation has more than $2 million in liabilities. The Company will meet with its creditors on April 15, according to the report. The report states that the Company's creditors include: -- Green Farm Limited Partnership, owed about $1.7 million; -- Mark Frederickson, owed about $240,000; -- Michael Garavaglia, owed about $5,200; -- RJL Inc (Fresno House Movers), owed about $56,000; and -- Santa Cruz County Treasurer-Tax Collector, owed about $68,000 Redman-Hirahara Foundation -- http://www.redmanhouse.com/-- is based in Watsonville, California. The Company is trying to restore the historic Redman-Hirahara farmhouse off Highway 1. RH DONNELLEY: Hires Lazard to as Financial Adviser -------------------------------------------------- Reuters reports that R.H. Donnelley Corp. said that it has hired Lazard Freres to help evaluate its capital structure. According to Reuters, R.H. Donnelley said on Thursday that it was undertaking restructuring efforts with bondholders as it continues to deal with a sharp decline in advertising revenue. R.H. Donnelley Chief Financial Officer Steven Blondy, Reuters relates, said that the Company will begin negotiations with its bondholders and banks on amending, refinancing or restructuring its debt obligations. About R.H. Donnelley Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp., -- http://www.rhdonnelley.com/-- (NYSE: RHD) publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * As reported by the Troubled Company Reporter on February 16, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating for R.H. Donnelley Corp. by three notches to 'CCC+' from 'B+'. S&P said that the rating outlook is negative. According to the TCR on February 11, 2009, Moody's Investors Service downgraded R.H. Donnelley's Corporate Family Rating to Caa1 and its Probability of Default Rating to Caa2, prompted by concerns that the company may determine that a complete debt restructuring represents the best alternative of addressing its currently challenged capital structure. The TCR reported on February 9, 2009, that Fitch Ratings downgraded these ratings of R.H. Donnelley Corp (RHD): -- Issuer Default Rating to 'CC' from 'B'; -- Senior unsecured notes to 'C/RR6' from 'CCC+/RR6'. SALEM LOGISTICS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Salem Logistics Management, LLC 301 North Main Street, Suite 2600 Winston-Salem, NC 27107 Bankruptcy Case No.: 09-50504 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Salem Logistics Distribution Services, LLC 09-50505 Overbrook Holdings, LLC 09-50506 Type of Business: The Debtors provide inbound logistic services. See: http://www.salemlogistics.com/ Chapter 11 Petition Date: March 11, 2009 Court: Middle District of North Carolina (Winston-Salem) Debtor's Counsel: R. Bradford Leggett, Esq. rbleggett@allmanspry.com 380 Knollwood St., Suite 700 P.O. Box 5129 Winston-Salem, NC 27113-5129 Tel: (336) 722-2300 Fax: (336) 722-8720 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A full-text copy of the Debtors' petition together with its list of 20 largest unsecured creditors: http://bankrupt.com/misc/ncmb09-50504.pdf The petition was signed by David F. Eshelman. SEALY CORP: Human Resource VP Dabiero Discloses Equity Stake ------------------------------------------------------------ Carmen J. Dabiero, Sr. VP-Human Resources at Sealy Corp., disclosed holding 577 shares of the company's common stock. Ms. Dabiero also has options to acquire additional Sealy Corp. shares. As of January 2, 2009, there are 91,806,885 shares of Sealy Corp. common stock outstanding. About Sealy Corporation Headquartered in Trinity, North Carolina, Sealy Corporation (NYSE: ZZ) -- http://www.sealy.com/-- manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), Stearns & Foster(R), and Bassett(R) brands. Sealy operates 26 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to 2,900 customers with more than 7,000 retail outlets. Sealy is also a leading supplier to the hospitality industry. * * * In January 2009, Moody's Investors Service downgraded all of Sealy Corporation's ratings by one notch (corporate family and probability of default to B2, first lien credit facility to Ba3 and subordinated notes to Caa1) following the recent announcement that Q4 operating results were significantly weaker then expected. At the same time, Moody's assigned an SGL 3 liquidity rating to Sealy. The ratings outlook remains negative. Fourth quarter results were significantly below Moody's expectations. While Moody's expected revenue to significantly decrease in the quarter, the decrease exceeded Moody's expectations and Moody's did not expect a net loss or essentially breakeven operating cash flow. Sealy Corp. reported $2.8 million net loss for the year ended November 30, 2008, on net sales of $1.49 billion, compared to a net income of 79.3 million in year 2007 on net sales of $1.70 billion. As of November 30, 2008, Sealy Corp. had $920.8 million in total assets and $1.08 billion in total liabilities, resulting in $164.8 million in stockholders' deficit. SEARS HOLDINGS: To Shutter Kmart Stores, Cut At Least 250 Workers ----------------------------------------------------------------- In the process of shutting down underperforming stores in Florida, Kmart Corp. laid off more than 240 workers, Tampa Bay Business Journal reports. Two of the stores being closed are at 2800 34th St. North and 3951 34th St. South in St. Petersburg. The two stores employ 108 employees who may qualify for jobs in other Kmart or Sears outlets or get severance pay, St. Petersburg Times reports. According to the Orlando Business Journal, Kmart is also cutting 58 jobs at its Winter Park stores effective May 8, 2009. A list of store closings as of February 26, 2009, posted at the Web site of Kmart's parent, Sears Holdings Corporation, may be accessed for free at: http://www.searsmedia.com/tools/closing_02262009.pdf Kmart's parent, Sears Holdings, has reported its fourth quarter and full year 2008 results: * net income for the quarter of $190 million as compared to net income of $426 million in the fourth quarter of 2007; * fully diluted earnings per share for the quarter of $1.55 as compared to fully diluted earnings per share of $3.17 in the fourth quarter of 2007; * adjusted EBITDA of $885 million in the fourth quarter as compared to $1 billion in the fourth quarter of 2007; * total impairment, store closing and severance charges of $336 million for the fourth quarter of fiscal 2008; * Kmart adjusted EBITDA increased 18% to $321 million in the fourth quarter of fiscal 2008 as compared to the fourth quarter of fiscal 2007; * implemented actions to improve operational efficiency in response to the economic climate which contributed to a reduction of $211 million in domestic selling and administrative expenses during the fourth quarter of fiscal 2008 and a $1 billion reduction in domestic inventory; * reduced total short-term borrowings on our $4 billion revolving credit facility from $1.9 billion at November 1, 2008 to $435 million at January 31, 2009; * repurchased 2.9 million shares for $120 million and debt securities for $29 million during the fourth quarter; * maintained strong balance sheet and liquidity position; and * Kmart began operating its own footwear business on January 1, 2009, which had previously been operated by a third party. According to W. Bruce Johnson, Sears Holdings' interim chief executive officer and president, fiscal year 2008 was a very difficult year for the U.S. economy, and its effect on consumer confidence reflects the turmoil that has enveloped the retail industry and Sears' business. However, he reveals that Sears is pleased with Kmart's performance, which increased its adjusted EBITDA in the quarter from the prior year despite the difficult environment. A full-text copy of Sears' fourth quarter and full year 2008 results containing, among others, the company's adjusted EBITDA and financial statements is available for free at: http://bankrupt.com/misc/Sears2008.pdf About Kmart Corp. Kmart Corporation is a predecessor operating company of Kmart Holding. In January 2002, Kmart Corp. and 37 of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the federal bankruptcy laws. The Debtors emerged from bankruptcy on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. Kmart completed its merger with Sears, Roebuck and Co. on March 24, 2005. About Sears Holdings Corporation Based in Hoffman Estates, Illinois, Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- parent of Kmart Holding Corp. and Sears, Roebuck and Co., is a broadline retailer with 2,317 full-line and 1,150 specialty retail stores in the United States operating through Kmart and Sears and 380 full-line and specialty retail stores in Canada operating through Sears Canada Inc., a 70%-owned subsidiary. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. * * * In February 2009, Standard & Poor's placed Sears Holdings 'BB-' corporate credit rating on Negative watch. Moody's Investor Service placed Sears Holdings Corporation's probability of default rating at 'Ba1' in September 2006. The rating still hold to date with a stable outlook. SEMGROUP LP: Court Sets April 20 Bar Date for Claims vs. Holdings ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has established April 20, 2009, at 5:00 p.m. (prevailing Pacific Time) as the last date and time for each person or entity to file proofs of claim against SemGroup Holdings, L.P. All proofs of claim must be filed so as to be received on or before the SGHLP General Bar Date at: SemGroup Claims Processing c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 For questions regarding the SGHLP General Bar Date, claimants may contact the SemGroup Hotline at (866) 721-4779. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SOURCE INTERLINK: Rising Debt Leverage Cues S&P's Junk Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit and issue-level ratings on Bonita Springs, Florida-based Source Interlink Cos. Inc. S&P lowered the corporate credit rating to 'CCC' from 'B-'. At the same time, S&P removed the ratings from CreditWatch, where they were placed with negative implications on Dec. 18, 2008. Total debt was $1.416 billion as of Oct. 31, 2008. The rating outlook is negative. "The downgrade reflects the effect of the recession and secular trends on the company's operating performance, its rising debt leverage, and a thinning margin of compliance with its term loan financial covenant," said Standard & Poor's credit analyst Hal F. Diamond, "along with limited liquidity." It also reflects S&P's concerns regarding management's ability to achieve cost savings to offset revenue declines and generate positive discretionary cash flow. "S&P is concerned that secular and cyclical trends affecting the company's businesses, together with its tightening loan covenant, may become insurmountable," added Mr. Diamond. SPECTRUM BRANDS: $235MM DIP Facility Revised; Court OKs Loan ------------------------------------------------------------ Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Western District of Texas granted Spectrum Brands Inc. and its debtor-affiliates, on a final basis, to obtain $235 million of DIP loans from a consortium of lenders led by Wachovia Bank, National Association, as administrative agent. Judge Lynn signed an interim DIP Order on February 6, 2009. Prior to the Court's final approval of the DIP Facility, in compliance of the Court's Interim Financing Order, the Debtors informed the Court that they have executed the Ratification and Amendment Agreement for their Interim DIP Financing, dated February 5, 2009, with the Subsidiary Loan Parties led by Wachovia Bank, National Association, as Administrative Agent, Collateral Agent, and a Supplemental Loan Lender. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, discloses that the Ratification and Amendment Agreement represents the final agreement among the parties with respect to the DIP financing. As a prelude to the ratification, the parties have agreed on these amendments: (i) deletion of definitions of certain terms in the ratified agreement; and (ii) amendments to Asset Based Lending collateral agreement. A full-text copy of the Ratification Agreement is available for free at: http://bankrupt.com/misc/spectrum_DIP_ratif_agrmnt.pdf The DIP commitment consists of: (i) Revolving Loans in an amount up to $190 million; and (ii) a Supplemental Loan, in the form of an asset based revolving loan, in an amount up to $45 million, extended by D.E. Shaw & Co., Avenue Capital Management, and Harbinger Management or their affiliates. Proceeds from the DIP Loans will be used to fund the Debtors' operations in accordance with a 13-Week Budget, available for free at: http://bankrupt.com/misc/spectrum_dip_budget.pdf The Court also granted Wachovia valid and perfected first priority interests and liens effective as of the Petition Date. The prepetition and postpetition liens and security interests of Wachovia, will continue to be senior in priority to all other interests and liens. Carve-Out Expenses The Agent's liens and administrative claims related to the DIP Loans will be subordinate only to the Carve-Out, which means: -- statutory fees payable to the U.S. Trustee pursuant to Section 1930(a)(6) of the Judiciary and Judicial Procedures; -- fees payable to the Clerk of the Court; and -- the unpaid and outstanding reasonable fees and expenses actually incurred by attorneys, accountants and other professionals retained by the Debtors and any Committees under Section 327 or 1103(a) of the Bankruptcy Code in an aggregate amount not to exceed $3,000,000. At the Agent's sole discretion, it may, at any time in accordance with the Credit Agreement, establish a Reserve against the amount of Revolving Loans, Supplemental Loans or other credit accommodations that would otherwise be made available to the Debtors pursuant to the lending formulas contained in the Credit Agreement in respect of the Professional Fee Carve-Out and the other Carve-Out Expenses. So long as the Agent has not issued a Default Notice, Debtors will be permitted to pay Allowed Professional Fees of the Professionals in accordance with the Budget and any amounts paid prior the delivery of Default Notice will not reduce the Professional Fee Carve-Out. Payment of any Carve-Out Expenses, whether by or on behalf of the Agent or any Lender, will not reduce the Obligations, and will to subordinate any of the Agent's and the Lenders' liens and security interests in the Collateral or their Superpriority Claim to any junior pre- or postpetition lien, interest or claim in favor of any other party. Prepayment and Exit Fees Prior to the hearing on the final approval of the DIP Motion, Goldman Sachs Credit Partners, L.P., the Administrative Agent for a consortium of lenders who extended $1.6 billion of prepetition loans to the Debtors, asked the Court to deny the motion because: (i) the Debtors refuse to provide adequate protection of the Term Lenders' secured interests; (ii) the Exit Fees of the proposed DIP Facility are excessive and the Debtors have not met their burden of proof that the break-up fees should be awarded; and (iii) the release of the DIP Lenders is too broad, and should be be excised or modified. By refusing to provide adequate protection in the form of current payment of interest as well as fees and expenses accruing during the case, the Debtors impose entirely on the Term Lenders the risk that the Debtors will not emerge in their desired time frame, Eric B. Terry, Esq., at Haynes and Boone, LLP, in San Antonio, Texas, argued for the Term Lenders. Mr. Terry also complained that the DIP Motion does not describe the release provisions required by the DIP Lenders. The Final DIP Order provides that the Debtors will pay to the Supplemental Loan Lender, for the account of the Supplemental Loan Participants, an exit fee of 2.0% of any principal amount of the Supplemental Loan prepaid or repaid, but only in the case of a permanent repayment of that principal and other than after the exercise of secured creditor remedies during the occurrence and continuance of an Event of Default. The exit fee will be 4.0% if that principal is repaid or prepaid, other than in connection with an Excluded Circumstance, with the proceeds of any financing provided, in whole or in part, and whether directly or indirectly, by any of the Prepetition Term Loan Lenders or any of their affiliates, participants, members, agents, or representatives who are parties to the March 3, 2009, commitment letter. Equity Fee Charles F. McVay, the U.S. Trustee for Region 7, raised to the Court prior to the hearing its concern about the effect of the equity fee on the bondholder creditors not represented by the Supplemental Loan Participants, many of whom still may not have notice of the DIP Financing Motion and the proposed equity fee. The DIP Motion proposed that the Supplemental Loan Participants receive, in addition to generous monetary fees and reimbursed costs, an equity fee equal to 9.9% of the outstanding common stock of Spectrum, as reorganized. In a separate filing, Mittleman Brothers, LLC, which holds a 5.02% equity stake in Spectrum Brands, pointed out that the Equity Fee will be worth $51,678,000, which is 115% of the maximum principal amount of the $45,000,000 Supplemental Loan offered by the Noteholders. The amount, Mittleman complained, is exorbitant and out of bounds. The Final DIP Order provides that notwithstanding anything to the contrary: (a) if any holders of claims, other than the Notes, or interests will become entitled to receive shares of Spectrum Brands, Inc.'s common stock pursuant to a plan of reorganization confirmed in connection with the Chapter 11 cases, then the Equity Fee will not dilute the distribution of the Spectrum Brand's common stock to the Other Recipients; and (b) the Supplemental Loan Participants will cause U.S. Bank National Association, as indenture trustee for the Notes, to deliver to DTC for distribution to beneficial holders of the Notes, notices informing beneficial holders of the Notes of an opportunity for them to sub-participate in the Supplemental Loan, by purchasing, at a price equal to par plus all accrued and unpaid interest, from the Supplemental Loan Participants a sub-participation, in a percentage equal to its pro rata holdings of the Notes. The Noteholder must respond to the Indenture Trustee's Notice with a written expression of interest within 10 Business Days of delivery of the Notices to DTC, which includes a written certification that, among other things, that Noteholder (a) is an accredited investor and (b) holds, as of that date, a principal amount of Notes that would entitle that Noteholder to purchase a sub-participation of not less than $1,000,000. The Notices will state that (x) any Noteholder who chooses to participate in the Supplemental Loan will not have voting or other rights under the Ratification Agreement or the Supplemental Loan Junior Participation Agreement, other than the right to receive interest, repayment of principal and the fees, and (y) failure to participate in the Supplemental Loan will result in the Equity Fee distributed to the Supplemental Loan Participants diluting any distribution of Spectrum Brands' common stock, which that Noteholder will be entitled to receive in any plan of reorganization. For the avoidance of doubt, any Noteholder that expresses an interest in a sub-participation must (a) have been entitled to a sub-participation of at least $1,000,000 based on is pro rata ownership of the Notes and (b) buy a subparticipation in an amount equal to its pro rata ownership of the Notes. All qualified responses to the Notices received by the Indenture Trustee will be forwarded to a designated representative of the Supplemental Loan Participants, regarding the participation purchase documentation and funding. The Indenture Trustee has agreed solely to act in a ministerial capacity in distributing the Notices and forwarding qualified responses thereto to the Supplemental Loan Participants, and is not a party to the Ratification Agreement. The Final DIP Order also provides that the Supplemental Loan Lender will receive, for the account of, and allocable to, the Supplemental Loan Participants, shares of the common equity of Spectrum Brands, as reorganized, or the applicable reorganized affiliate or successor to Spectrum Brands, equal to 9.9% of the outstanding common stock distributed to Noteholders under the Plan, on a fully diluted basis. However, Avenue Investments, LP, or any of its affiliate, in its capacity as a Supplemental Loan Participant, will receive its pro rata share of the first 50% of the Stock Allocation and the second 50% of the Stock Allocation will be shared pro rata among the Supplemental Loan Participants. Events of Default Upon the occurrence of an Event of Default, (i) the Debtors will be bound by all restrictions, as provided in the Final Order, the Credit Agreement, the ABL Collateral Agreement and the other Loan Documents, and (ii) the Agent will be entitled to take any act or exercise any right or remedy as provided in the Final Order or any Loan Document. The Agent and the Lenders will have no obligation to lend or advance any additional funds on behalf of the Debtors, or provide any other financial accommodations to the Debtors, upon the occurrence of an Event of Default. Debtors Affirm Soundness of DIP Facility Seeking to fortify their grounds for filing their motion and to respond to the objections asserted by various parties intending to block final approval of the DIP Motion, the Debtors, prior to the hearing on the final approval of the DIP Motion, filed with the Court a memorandum of law. The Debtors maintained that they sought to obtain financing under the DIP Facility by providing security interests and superpriority claims to the Lenders pursuant to Section 364(c) of the Bankruptcy Code. The Debtors asserted that before authorizing the Section 364(c) financing proposed in the Motion, the Court must find, after notice and a hearing, that the Debtors are "unable to obtain unsecured credit allowable under Section 503(b)(1)." To satisfy this requirement, the Debtors must show that they have made reasonable efforts to obtain alternative financing. Mr. Baker said the Debtors do not have sufficient available sources of working capital and financing to operate their business without a postpetition financing facility. Thus, the Debtors negotiated the DIP Facility with Wachovia, the Prepetition Revolving Lenders and three noteholders who agreed to provide loans by participating in a portion of the DIP Facility in an aggregate amount up to $45 million. The Supplemental Loan Participants have entered into a restructuring support agreement with the Debtors pursuant to which they have agreed to support a plan of reorganization. The DIP Facility, however, does not compel the Debtors to seek confirmation of a plan of reorganization based on the terms contained in the restructuring support agreement. On February 5, 2009, the Court signed the Interim DIP Order. Motion on an interim basis and authorized the Debtors to, among other things, borrow under the DIP Facility in an amount up to $235,000,000. As a result of the authorization to borrow on an interim basis, the Debtors were able to stabilize their operations and provide the Debtors' customers, vendors and employees with the requisite security that the Debtors will be able to continue conducting their business in the ordinary course without interruption. A full-text copy of the Final DIP Order is available for free at http://bankrupt.com/misc/spectrum_finaldiporder.pdf About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc. and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPECTRUM BRANDS: Equity Panel Drew Positive Raves from Investors ---------------------------------------------------------------- The appointment of an official committee of equity security holders in the bankruptcy cases of Spectrum Brands, Inc., triggered a positive reaction among investors, Jim Steward, a finance professor at the University of Wisconsin's School of Business, told Judy Newman of the Wisconsin State Journal. The State Journal, in a report dated March 11, 2009, pointed out that on the 15 days of the past 26 days since Spectrum sought protection under Chapter 11, trading volume of its common stock has been heavy. The report noted that more than 1 million shares of the company's common stock traded hands despite the fact that the shares are trading at below $0.10 a piece. Mr. Steward told the State Journal that institutional investors may be shoring up their stakes, hoping to get part of the bankruptcy distribution, or individuals could be hoping that price of Spectrum's common stock would climb up a bit. Mr. Steward continued that the positive reaction of the investors could have been triggered by the appointment of the Official Committee of Equity Security Holders in Spectrum's bankruptcy case. He added that investors like Mittleman Brothers may "really believe there's more value in the equity than meets the eye," or "may just be threatening to hold up proceedings, as a way to leverage some kind of payment." Spectrum Brands shares closed at $0.091 on March 13, 2009, rising 33.82% from Thursday's close of $0.068; and 3.5 million shares switched hands, according to information at Yahoo! Finance. As reported by the Troubled Company Reporter on March 12, 2009, pursuant to Sections 1102(a)(1) and (b)(2) of the Bankruptcy Code, Charles F. McVay, U.S. Trustee for Region 7, appointed four members to the Equity Committee: (1) Mittleman Brothers, LLC 575 Madison Ave., 10th Fl. New York, New York 10022 Tel. No: (212) 605-0559 Fax No: (212) 605-0558 Contact: Christopher P. Mittleman E-mail: chris@mittlemanbrothers.com (2) Ralston H. Coffin 580 Sable Oak Vero Beach, Florida Tel. No: (203) 219-4909 Fax No: (772) 539-9017 Contact: Ralston H. Coffin E-mail: rhcselect@aol.com (3) Cookie Jar LLC 860 Canal Street, 3rd Floor Stamford, Connecticut 06902 Tel. No: (203) 353-7600 Fax No: (203) 353-7602 Contact: David B. Williams, Matthew Mooney E-mail: tiger@wtco.com, mooney@wtco.com (4) Peter and Karen Locke, Living Trust 846 Woodacres Road Santa Monica, California 90402 Tel. No: (310) 395-3433 Fax No: (310) 458-1241 Contact: Peter Locke E-mail: peter@peterlocke.net "We are very pleased that the U.S. Trustee has granted our request to establish an official shareholder committee to protect the interests of Spectrum Brands' existing common shareholders," said Mr. Mittleman, the Committee Chairman. "We firmly believe that substantial equity value remains for Spectrum Brands' existing shareholders, and we intend to pursue all means at our disposal to maximize that value." On February 23, 2009, Mittleman Brothers disclosed in a Schedule 13D filed with the Securities and Exchange Commission that it is deemed to beneficially own 2,655,652 shares of Spectrum Brands common stock, or 5.03% equity stake in the company. Mr. Mittleman, on February 20, sent a letter dated February 23, 2009, to the members of the Board of Directors of Spectrum Brands expressing concerns over the current management of the Debtors in connection with the Debtors' First Proposed Joint Plan of Reorganization filed on February 3, 2009. Particularly, the February 23rd Letter outlines Mittleman Brothers' belief that the Debtors' management and board of directors have engaged in, and are continuing to pursue, courses of action that are in breach of their fiduciary duties to the Debtors' shareholders, and that have resulted in, and are continuing to inflict, material harm to the shareholders. Mittleman Brothers demanded the immediate withdrawal of the Plan. Mittleman Brothers has also demanded that the Debtors fully support the appointment of an official committee of equity security holders that would negotiate a new, fair and equitable plan of reorganization that adequately compensates existing shareholders. Among other things, Mittleman Brothers noted in its letter that the Plan proposes that existing senior subordinated noteholders will exchange $1.09 billion face value in notes, and receive in return $218 million in new notes, and 100% of Spectrum's equity. The Plan projects the company -- after the reorganization -- will generate $125 million in free cash flow for fiscal year ending September 30, 2010. According to Mittleman Brothers, at a low multiple of only 10x free cash flow, there would be $1.25 billion of equity value to cover the $872 million in face value that the Noteholders would exchange. Adding the $218 million in new bonds that the Noteholders would also receive to the conservatively appraised equity value of $1.25 billion, means that Noteholders would be receiving $1.468 billion under the Plan, or $378 million more than the $1.09 billion face value of the bonds they now own. Mittleman Brothers said the $378 million of excess compensation to Spectrum's Noteholders under the Plan rightly belongs to the existing shareholders. In other words, even if 30% of the post- Plan equity was granted to existing shareholders, the Noteholders would still receive par value for their bonds with their remaining 70% of the equity. That $378 million in excess equity value equates to $7.16 per share to existing shareholders, roughly where the stock was valued as recently as June 2007, when Spectrum's near-term prospects were much less favorable. "This exercise ignores the likely substantial net present value of the net operating loss carry-forwards that Spectrum projects should total $1.25 billion for U.S. Federal taxes and $2.1 billion for state taxes as of September 30, 2009. That these NOLs represent significant potential value is underscored by Spectrum's recent efforts to preserve them, in a motion made to the Bankruptcy Court and granted on an interim basis on Feb. 6, 2009, which may allow Spectrum to limit certain shareholders from achieving a 5% ownership threshold," the letter said. A full-text copy of the February 23rd Letter is available at no charge at: http://researcharchives.com/t/s?3a38 About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPECTRUM BRANDS: Gets Final Approval to Use Lenders' Collateral --------------------------------------------------------------- Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Western District of Texas granted Spectrum Brands Inc. and its debtor-affiliates, on a final basis, permission to use cash collateral securing their more than $1.6 billion of prepetition loans. As adequate protection for the use of the collateral, pursuant to Section 361 of the Bankruptcy Code, a replacement lien and security interest in all of the Prepetition Term Loan Collateral and all of the Collateral securing the Obligations due the Prepetition Term Loan Agent and the Lenders, is granted. Notwithstanding anything to the contrary contained, the Term Loan Replacement Liens will be junior and subordinate in all respects to: -- the right of payment of all Obligations owing to the DIP Agent and Lenders; -- the liens and security interests granted to the DIP Agent and Lenders pursuant to the Final DIP Order; and -- all Carve-Out Expenses. The Prepetition Term Loan Agent and Lenders, however, cannot exercise any rights or remedies in respect of the Term Loan Replacement Liens until all Obligations owing to the DIP Agent and the Lenders have been paid and satisfied in full. A full-text copy of the Final Cash Collateral Order is available for free at: http://bankrupt.com/misc/spectrum_finaldiporder.pdf Prior to the entry of the Final Cash Collateral Order, the Term Lenders, represented by Goldman Sachs Credit Partners, L.P., as Administrative Agent, asked the Court for adequate protection, asserting that pursuant to the Debtors' Prepackaged Plan of Reorganization, the obligations under the Term Facility Loan Documents are to be "reinstated." Based on the Plan and the Disclosure Statement explaining the Plan, it appears that the Debtors believe that the obligations under the Prepetition Term Facility Loan Documents are oversecured, Eric B. Terry, Esq., at Haynes and Boone, LLP in San Antonio, Texas, pointed out for the Prepetition Agent. That position is suggested by items in the Disclosure Statement related to pre-exit needs that contemplate paying the Term Lenders in June 2009 $37,000,000 for Cash Interest Expense under the Term Loan and $7,000,000 as Mandatory Repayment of Term Loan. The Term Lenders asked the Court to direct the Debtors to provide the Term Lenders adequate protection sufficient to protect their perfected security interests in the Collateral and their equity cushion by, among others, requiring periodic payments of adequate protection to the Term Lenders sufficient to protect the Term Lenders from the risk imposed on them by the bankruptcy case, including but not limited to the risk of erosion of the Equity Cushion due to, among other things: -- the diminution in value of the Collateral; -- the time delay during the case when all parties are being paid except for the Term Lenders; and -- the highly speculative nature of the Debtors' projections, which are based on various aggressive assumptions and qualified by significant risks as detailed in their Disclosure Statement. The Term Lenders also asked, as adequate protection: (a) recognition that they have valid liens on their collateral and that those liens are oversecured; (b) a waiver of any right by the Debtors to attack these liens; (c) the Debtors to maintain and preserve the Collateral in accordance with the prepetition loan documents; (d) the Debtors to turnover any proceeds from the disposition of the Collateral directly to the Term Lenders; (e) to grant them a superpriority claim under Section 507(b) of the Bankruptcy Code on account of any of the proceeds of the Collateral that are not delivered to the Term Lenders; and (f) the Court to deny any attempt to prime or to surcharge the Term Lenders' security interest on the Collateral or the Equity Cushion. Secured creditor J. Aron & Company, in a separate filing, stated that it does not conform to the motion because it was not provided adequate protection of its interest in the Debtors' cash collateral under the Corrected DIP Financing Order. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPECTRUM BRANDS: U.S. Trustee & Insite File Disclosure Objections ----------------------------------------------------------------- Charles F. McVay, United States Trustee for Region 7, asks Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Western District of Texas to deny approval of the disclosure statement explaining the Prepackaged Joint Plan of Reorganization of Spectrum Brands Inc. and its debtor-affiliates. In the alternative, the U.S. Trustee requires the Debtors to amend the Disclosure Statement, as it does not provide creditors with adequate information to make an informed judgment concerning the release or exculpation of the Plan. Mr. McVay asserts that the creditors are entitled to the most current information concerning the Debtors' assets and liabilities as of February 3, 2009, which will be contained in their Schedules of Assets and Liabilities, and they have not filed those financial statements. The deadline for filing the Schedules has been extended to March 20, 2009, and the hearing on the approval of the Disclosure Statement is on March 19, Mr. McVay points out. Accordingly, Mr. McVay asserts that the Debtors should be required to modify the Disclosure Statement to incorporate the information contained in the Schedules. The Disclosure Statement contains provisions providing for the release or exculpation of non-debtor parties, including officers, directors, and noteholders, Mr. McVay points out. While the U.S. Trustee acknowledges that issues concerning release and exculpation are typically confirmation issues, Mr. McVay argues that the requested non-debtor release or exculpation provisions may exceed the customary release or exculpation provisions contained in plans, and there appears to be inadequate information for a creditor to make an informed judgment concerning the non-debtor releases or exculpation provisions. InSite Orrville, L.L.C., InSite Orrville (Crown), L.L.C., and InSite Orrville (Schrock), L.L.C., also ask the Court to deny approval of the Disclosure Statement unless the definition of "Allowed Rejection Damaged Claim Amount" is revised to preserve InSite's rights to pursue all its claims in the event its leases are rejected. InSite is a creditor and party-in-interest in the Debtors' cases by virtue of certain non-residential real property leases with the Debtors. InSite premises its opposition to the Disclosure Statement because "it fails to contain adequate information, pursuant to Section 125 of the Bankruptcy Code." Moreover, InSite complaints that the Disclosure Statement fails to reveal that the Plan improperly attempts to fix claims of parties to rejected executory contracts and unexpired leases to those amounts allowable under Section 502(b)(6). According to Joseph A. Friedman, Esq., at Kane, Russel, Coleman & Logan, P.C., in Dallas, Texas, in the event InSite's non- residential real property leases are rejected, Insite is prepared to assert claims that are not capped by Section 502(b)(6), specifically potential claims arising from the clean-up of environmental contamination arising from the Debtors' activities on the real property. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) STANDARD PACIFIC: Difficult Housing Market Cues Fitch's CCC Rtng. ----------------------------------------------------------------- Fitch Ratings has downgraded Standard Pacific Corp.'s Issuer Default Rating and other outstanding debt ratings: -- IDR to 'CCC' from 'B-'; -- Secured borrowings under its revolving credit facility to 'B+/RR1'from 'BB-/RR1'; -- Unsecured borrowings under its revolving credit facility to 'CC/RR5'from 'B-/RR4'; -- Senior notes to 'CC/RR5' from 'B-/RR4'; -- Senior subordinated debt to 'C/RR6' from 'CCC/RR6'. The Rating Outlook is Negative. The 'RR1' on the secured advances under Standard Pacific's revolving credit facility indicates outstanding recovery prospects for holders of this debt issue. The 'RR5' on the company's unsecured notes and unsecured advances under its revolving credit facility indicate below-average recovery prospects for holders of these debt issues. Standard Pacific's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debt holders. The 'RR6' on Standard Pacific's senior subordinated notes indicate poor recovery prospects in a default scenario. Fitch applied a liquidation value analysis for these RRs. The downgrade reflects the current very difficult U.S. housing market and Fitch's expectations that the housing environment remains challenging for the remainder of the year and perhaps into 2010. The sharply contracting economy and impaired mortgage markets are, of course, contributing to the housing shortfall. The ratings changes also reflect persistent negative trends in Standard Pacific's operating margins and further deterioration in credit metrics, notably leverage (with some debt reduction in recent years offset by erosion in tangible net worth from non-cash real estate charges and operating losses). Cash flow from operations will probably sharply decline in 2009 and may shift negative in 2010. Real estate impairments should moderate this year, but will persist so long as home prices decline and the sales absorption rate shrinks. The company had $626.4 million of cash at Dec. 31, 2008. Standard Pacific generated $263.2 million of cash during fiscal year 2008 ($62.5 million during the fourth quarter), which included $235.6 million of tax refunds received during the first quarter of 2008. For all of fiscal 2009, Fitch expects the company to be slightly cash flow positive, excluding a first quarter tax refund of $114.5 million. The company has some near term debt maturities, which will deplete some of its cash balance. Standard Pacific has these near-term debt maturities: $124.5 million in April 2009, $173 million in August 2010, and $175 million in May 2011. Standard Pacific and its joint venture partners generally provide credit enhancements in connection with JV borrowings in the form of loan-to-value maintenance agreements. At Dec. 31, 2008, approximately $172 million of its unconsolidated JV borrowings were subject to these credit enhancements. While the company has reduced its JV exposure, Standard Pacific's liquidity may be negatively impacted by potential re-margining contributions as well as cash outflow from unwinding certain JVs. Standard Pacific's bank credit facilities were amended last year wherein most of its financial covenants were eliminated. The amended credit facilities contain a liquidity test requiring the company to maintain either a minimum ratio of cash flow from operations to interest incurred or a minimum liquidity reserve. At Dec. 31, 2008, the company failed to maintain the minimum cash flow coverage covenant -- as a result, the company will set aside approximately $120 million in an interest reserve account to meet the minimum liquidity reserve covenant. Most recently, Standard Pacific further amended its bank credit facilities to allow the company to voluntarily repurchase its 5 5-1/8% senior notes due 2009, 6-1/2% senior notes due 2010 and 6-7/8% senior notes due 2011. In connection with any repurchases, the company needs to reduce balances under the revolver and Term Loan A facilities. The company has so far made $25 million of prepayments to the revolver and Term Loan A facilities. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels and especially free cash flow trends and uses and the company's cash position. STANFORD GROUP: Restrictions on Releasing Brokerage Accounts Set ---------------------------------------------------------------- The U.S. District Court overseeing the Receivership for the Stanford Financial Group, at the request of the Receiver, Ralph Janvey, issued an order permitting the transfer of certain additional customer brokerage accounts. The Court order permits the transfer of all Stanford Group Company customer brokerage accounts at Pershing LLC and J.P. Morgan Clearing Corp. not previously covered under the Court's March 5, 2009 order, except those accounts that: -- are owned by an individual Defendant or by any person who, based on records available to the Receiver, had any of the following relationships to any Defendant or to any entity owned or controlled by the Defendants (collectively "Stanford"): shareholder, member of the board of directors, member of senior management (as determined by the Receiver in his sole discretion) or registered representative or financial advisor who earned commissions or fees based on certificates of deposit or owed loans to Stanford Group Company; -- are owned for the benefit of the individual Defendants or Stanford companies; -- have at least US$250,000 in assets as of February 27, 2009 and with respect to which the Receiver has determined, by utilizing electronic data reasonably available to him through his investigation, may contain proceeds from the allegedly fraudulent products or activities; -- secure unpaid balances owed by customers or non-purpose loans made to customers; or -- are related to accounts in categories 1 through 4 by social security number or tax identification number, when available. The Court order will permit the transfer of all accounts, other than those in the above five categories, in accordance with these transfer procedures for eligible accounts under US$250,000: (1) are owned by Stanford shareholders, directors, and certain employees; (2) are owned for the benefit of Stanford companies; (3) are managed by Stanford companies; (4) secure unpaid balances owed by customers or non-purpose loans made to customers; or (5) are related to accounts in categories 1 through 4 by social security number, address or other similar indicators. Transfer procedures for the newly released accounts will be posted on the Receivership's website today, March 16, 2009. Under the order, approximately 28,600 customer accounts will be eligible for transfer, including the approximately 12,600 accounts that became eligible for transfer under the Court's March 5, 2009 order. The Court order specifically reserved the Receiver's right to later pursue claims against the owners of the released accounts if it is determined they received proceeds from the allegedly fraudulent products or activities. In analyzing whether to seek a release of any category of accounts, the Receiver has been attempting to balance the hardship on account holders of a continued hold on the accounts against the benefits of the hold to the Receivership Estate, considering both the likelihood that the accounts are tainted by fraudulent products or activities and the amount potentially recoverable by the Estate from those accounts if they are tainted. In this connection, the Receiver has been analyzing certain data to determine which accounts should be released. This data principally relates to the presence or absence of transactions in those accounts relating to Stanford International Bank certificates of deposit, or activity in such certificates by the owners of those accounts. The Receiver recently gained access to additional data that permit a more refined analysis to be made and that supported its request to the Court. On March 5, 2009, the Court issued an order permitting the transfer of Stanford Group Company customer brokerage accounts having net assets of less than US$250,000 held in custody at Pershing LLC, subject to certain exceptions. As reported in the Troubled Company Reporter-Latin America on March 9, 2009, the United States Court handling the case against Texas billionaire Robert Allen Stanford issued an order to unfreeze approximately 12,000 Stanford investor accounts held at Pershing LLC, at the request of Mr. Janvey. The U.S. SEC, on Feb. 17, charged Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. Mr. Stanford's companies include Stanford International Bank, Stanford Group Company (SGC), and investment adviser Stanford Capital Management. About SIBL Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. STAR TRIBUNE: Will Resume Talks With Union Over Cost Cuts --------------------------------------------------------- Vinnee Tong at The Associated Press reports that The Star Tribune and the union said that they will resume talks over cost cuts. The AP relates that four union representatives arrived in New York on Thursday to continue negotiations, after bankruptcy court hearings on Star Tribune's request for permission to abandon its contract with the local unit of the International Brotherhood of Teamsters. According to the report, lawyers for Star Tribune told the Hon. Robert Drain at the U.S. Bankruptcy Court for the Southern District of New York that it needs $3.5 million in concessions from its printer's union as part of $20 million in total cuts from 10 unions. The report says that if Star Tribune fails to reach a deal, it would have to go back to court for a final hearing. According to the report, the cancellation of the contract would affect 116 union members in Star Tribune. Lenders were demanding cost reductions and Star Tribune was in jeopardy without such cuts, The AP states, citing Judge Drain. A Star Tribune spokesperson Ben Taylor said that the Company hoped to reach a deal out of court, The AP relates. The report quoted Mr. Taylor as saying, "We have always hoped to achieve the savings we need through negotiation. That is how we prefer to resolve this." About Star Tribune Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com-- operate the largest newspaper in the U.S. state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10245). Marshall Scott Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. The Debtors proposed Blackstone Group LP as their financial advisor; and Curtis, Mallet-Prevost, Colt & Mosle LLP as conflict counsel; and Garden City Group Inc. as claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. STRASBURG-JARVIS INC: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------------- Kansas City Business Journal reports that Strasburg-Jarvis Inc. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Kansas. According to Business Journal, Strasburg-Jarvis listed assets of $9.18 million and debts of $7.4 million owed to 100 to 199 creditors. Business Journal states that Strasburg-Jarvis owes $5.42 million to secured creditors and $1.96 million to unsecured creditors with nonpriority claims. Court documents say that Strasburg-Jarvis is mostly owned by 11 local investors, including President Terry Jarvis of Leawood, whose trust owns 34.2% of the Company. Business Journal relates that many of the largest unsecured creditors are shareholders who loaned money to Strasburg-Jarvis. Business Journal reports that Strasburg-Jarvis' revenue dropped 7% to $27.3 million in 2008, from $29.3 million in 2007. According to the report, revenue was $3.55 million through the beginning of March. The report says that The Strasburg-Jarvis board decided on February 26, 2009, that the Company should file for Chapter 11 bankruptcy protection, based on talk about the Company's financial condition and its failure to pay its debts when they came due. Strasburg-Jarvis Inc., which does business as Strasburg Children, is a Lenexa company that makes children's and dolls' clothing and accessories. TRIBUNE CO: Asks Court to Establish June 12 as Claims Bar Date -------------------------------------------------------------- The goal of Tribune Company and its debtor affiliates is to complete their restructuring and emerge from Chapter 11 as soon as possible, Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, tells Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware. To facilitate that goal and develop a comprehensive, viable plan of reorganization, the Debtors will require complete and accurate information regarding the nature, validity, amount, and status of all claims against them that will be asserted in their Chapter 11 cases, Mr. Reilley tells the Court. In line of this, the Debtors ask the Court establish: (a) June 12, 2009, at 4:00 p.m., as the deadline for all persons and entities holding a claim against the Debtors to file proof of claim; (b) except where the Debtors have previously included a claim in the Schedules of Assets and Liabilities as disputed, contingent, or unliquidated, to establish the later of (i) the General Bar Date; or (ii) 30 days after the holder of that claim is served with notice of the applicable amendment or supplement to the Schedules, as the bar date for filing Proof of Claim with respect to the amended claims; and (c) except as otherwise set forth in any order authorizing rejection of an executory contract or unexpired lease, to establish the later of (i) the General Bar Date or (ii) 30 days after entry of any order authorizing the rejection of an executory contract or unexpired lease, as the bar date by which a Proof of Claim relating to the Debtors' rejection of contract or lease must be filed. The Debtors further propose that each person or entity asserting a claim against one or more of the Debtors is required to file a separate Proof of Claim in the bankruptcy case of each Debtor against whom a claim is asserted. Each Proof of Claim must substantially comply with the Official Bankruptcy Form 10, and must be actually received on or before the bar date associated with that claim by Epiq Bankruptcy Solutions, LLC, the Court- approved claims and noticing agent. Parties Not Required to File Proofs of Claim The Debtors propose that these persons or entities are not required to file proofs of claim: 1. Any person or entity that has already filed a Proof of Claim against the applicable Debtors with either Epiq or the Clerk of the Court for the United States Bankruptcy Court for the District of Delaware. 2. Any person or entity (i) whose claim is listed in the Debtors' Schedules, list of equity holders, and Statements of Financial Affairs or any amendments, and (ii) whose claim is not described as disputed, contingent, or unliquidated, and (iii) who does not dispute the amount or characterization of its claim as set forth in the Schedules. 3. Professionals retained by the Debtors or the Committee pursuant to orders of the Court who assert administrative claims for fees and expenses subject to the Court's approval pursuant to Sections 330, 331 and 503(b) of the Bankruptcy Code. 4. Any person or entity that asserts an administrative expense claim against the Debtors pursuant to Section 503(b), provided, however, that, any person or entity that has a claim on account of prepetition goods received by the Debtors within 20 days of the Petition Date must file a Proof of Claim on or before the General Bar Date. 5. Current officers and directors of the Debtors who assert claims for indemnification or contribution arising as a result of prepetition or postpetition services to the Debtors. 6. Any Debtor asserting a claim against another Debtor. 7. Solely in the event that the Administrative Agent under either the Credit Agreement, dated May 17, 2007, or the Senior Unsecured Interim Loan Agreement, dated December 20, 2007, files a proof of claim on account of the applicable Bank Claims, any person or entity whose claim is limited exclusively to a claim for repayment by the applicable Debtor of principal, interest and other applicable fees and charges on or under the applicable Prepetition Credit Agreement, provided that: (a) the Administrative Agent under either Prepetition Credit Agreement will be authorized, but not directed, to file on behalf of itself and all Prepetition Lenders under the applicable Prepetition Credit Agreement a single Proof of Claim on account of the applicable Bank Claims prior to the General Bar Date; (b) that single proof of claim will be deemed to have been filed by that Administrative Agent and by each Prepetition Lender against all Debtors liable under the Prepetition Credit Agreement; and (c) if the Administrative Agent files a Proof of Claim, (i) it will not be required to file with its Proof of Claim any instruments, agreements, or other documents evidencing the obligations referenced in the Proof of Claim; and (ii) any holder of a Bank Claim against a Debtor arising out of or relating to the Prepetition Credit Agreements other than a Bank Claim will be required to file a Proof of Claim on account of that claim on or before the General Bar Date. 8. Solely in the event that any of the Indenture Trustee under any of the Indentures files a Proof of Claim on account of the applicable Notice Claims, any person or entity whose claim is limited exclusively to a claim repayment by Tribune of principal, interest, and other applicable fees and charges on or under the applicable Indenture. However, the Indenture Trustees under any of the Indentures will be authorized, but not directed to file on behalf of themselves and all Noteholders under the applicable Indentures a single Proof of Claim on account of applicable Note Claims prior to the General Bar Date. A single Proof of Claim will be deemed to have been filed by that Indenture Trustee and by each Noteholder against Tribune under that Indenture. If any Indenture Trustee files a Proof of Claim: (i) the claim holder will not be required to file with its Proof of Claim any instruments, agreements, or other documents evidencing the obligations referenced in that Proof of Claim; and (ii) any Holder of a Note Claim under the Indentures that asserts a claim against any of the Debtors arising out of or relating to the Indentures other than a Note Claim will be required to file a Proof of Claim on account of that claim on or before the General Bar Date. 9. A wholly-owned non-debtor subsidiary of a Debtor asserting a claim against a Debtor. 10. Any person or entity whose claim against the Debtor has been allowed by an order of the Court entered on or before the General Bar Date. The Debtors clarify that any entity holding any interest in any Debtor, which interest is based solely on the ownership of common or preferred stock in a corporation, a membership interest in a limited liability company, warrants or rights to purchase, sell or subscribe to a security or interest need not file a proof of interest on or before the General Bar Date. However, Interest Holders that wish to assert claims against the Debtors that arise out of or relate to the ownership or purchase of an Interest, including claims arising out of or relating to the sale, issuance, or distribution of an Interest, must file Proof of Claim on or before the General Bar Date. Pursuant to Rule 3003(c)(2) of the Federal Rules of Bankruptcy Procedure, any person or entity that is required to file a timely Proof of Claim in the form and manner specified in the Bar Date Order and who fails to do so on or before the bar date associated with the claim: (i) will be forever barred, estopped, and enjoined from asserting a claim against the Debtors or thereafter filing a Proof of Claim; (ii) will not be treated as a creditor of the Debtors for the purpose of voting upon any plan of reorganization; and (iii) will not receive or be entitled to receive any payment or distribution of property from the Debtors or their successors or assigns with respect that claim. In addition, the Debtors propose procedures for providing Notice of Bar Dates and for filing Proofs of Claim: (a) Following entry of the Bar Date Order, and no later than April 13, 2009, the Debtors intend to provide notice of the Bar Dates to all known persons and entities holding potential prepetition claims against them. (b) The Debtors propose to send the Proof of Claim form to, among others, persons or entities scheduled on the their Schedules. When sent to a scheduled creditor, the Proof of Claim form will be customized to specify (a) the identity of the Debtors against which the person or entity's claim is scheduled, (b) the amount of the scheduled claim, if any, (c) whether the claim is listed as disputed, contingent, or unliquidated, and (d) whether the claim is listed as secured, unsecured, unsecured priority, or unsecured nonpriority claim. Furthermore, the Debtors intend to provide notice of the Bar Dates to unknown creditors by publishing a copy of the notice at least once no later than 20 days prior to the General Bar Date in national editions of the Wall Street Journal and The New York Times. A full-text copy of the Bar Date notice is available for free at: http://bankrupt.com/misc/Tribune_BarDateNotice.pdf The Debtors tells the Court that they have discussed the motion with the Official Committee of Unsecured Creditors and the Committee has raised no objection. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: In Talks With Barclays on $225-Mil. Asset-Backed Loan ----------------------------------------------------------------- Tribune Company and its debtor affiliates notify Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware that they are arranging a proposed amended asset-backed debtor- in-possession credit facility with Barclays Capital, Inc. Tribune Co. and its wholly owned special purpose non-debtor subsidiary, Tribune Receivables, LLC, are parties to a $300,000,000 trade receivables securitization facility under which Barclays Bank PLC is the administrative agent and Tribune Receivables is the borrower. That receivables securitization facility expires on April 10, 2009. The proposed amended asset-backed DIP Facility, according to Bryan Krakauer, Esq., at Sidley Austin, LLP, in Chicago, Illinois, will have a maturity date of up to April 10, 2010, and will consist of: -- a $75,000,000 Revolving Line of Credit, and -- a $150,000,000 Term Loan. The proposed Asset-Backed DIP Facility will have substantially the same terms as the Existing Facility, including accounts receivable advance rates, mechanics, security and account control agreements subject to certain adjustments to reflect the longer- term nature of the proposed Asset-Backed DIP Facilities. Availability under both the Revolver and Term Loan will be subject to a borrowing base. The borrowing base will be calculated on a daily basis and would be a dynamic amount determined by applying receivables eligibility criteria and certain customary accounts receivable securitization reserves. The proposed Asset-Backed DIP Financing will be secured by: (a) first priority lien on all the assets of Tribune Receivables; (b) first priority lien on all unencumbered assets of guarantors on the Petition Date; and (c) junior lien on all encumbered assets of guarantors on the Petition Date. A full-text copy of the proposed Asset-Backed DIP Financing Facilities is available for free at: http://bankrupt.com/misc/Tribune_Asset-BackedDIP.pdf The Debtors note that the information provided in the Asset- Backed Financing is preliminary in nature and is subject to change. According to Mr. Krakauer, there is no assurance the facilities will be extended on the proposed terms. The Debtors have yet to file a motion with the Court seeking the approval of the amended Asset-Backed DIP Financing Facilities. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Seeks July 6 Extension of Lease Decision Period ----------------------------------------------------------- Pursuant to Section 365(d)(4) of the Bankruptcy Code, a debtor has an initial 120-day period following the Petition Date in which to elect to assume or reject unexpired leases of non- residential real property. The bankruptcy court may extend that period by 90 days more for "cause" upon the motion of the debtor. Tribune Company and its debtor affiliates have approximately 252 real property leases in 16 states, and three foreign countries. Given the volume of other tasks required of the Debtors' personnel and professionals during the first 120 days of their Chapter 11 cases, evaluating carefully each of the approximately 252 Real Property Leases has not been possible, Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, tells Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware. Accordingly, the Debtors ask the Court to extend through July 6, 2009, their deadline to assume or reject Real Property Leases. The Debtors assert that the extension is necessary so they may preserve the maximum flexibility in restructuring their business. The Debtors aver that in the absence of an extension, they could be forced prematurely to assume Real Property Leases that may later be burdensome, giving rise to large potential administrative claims against their estates and hampering their ability to reorganize successfully. Alternatively, the Debtors note, they could be forced to reject Real Property Leases that would have been of benefit to their estates, to the detriment of all stakeholders. To date, the Debtors have rejected or sought to reject about 54 leases of real property pursuant to three motions filed with the Court. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Settles Rift With U.S. Trustee on Lazard Retention -------------------------------------------------------------- Tribune Co.'s bankruptcy counsel, Kate J. Stickles, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, submitted with the U.S. Bankruptcy Court for the District of Delaware a certification of counsel disclosing that the Debtors and the U.S. Trustee have resolved their differences and have agreed on a consent order on the employment application of Lazard Freres & Co., LLC, in the Debtors' bankruptcy case. The Consent Order provides, among other things, that: (a) the U.S. Trustee will retain the right and be entitled to object to the monthly fees, restructuring or disposition fee and other fees based the reasonableness standard under Sections 330 and 331 of the Bankruptcy Code; (b) the Restructuring Fee of Lazard is reduced to $14,000,000; (c) Lazard will not seek reimbursement for the fees and expenses of its counsel that were incurred in connection with the prosecution of the application; and (d) Lazard and its professionals will be granted a limited waiver of the information requirements of Local Rule 2016-2 for the District of Delaware to keep time records in 1-1/2 hour increments. A full-text copy of the consent order is available for free at: http://bankrupt.com/misc/lazardorder.pdf Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UNITED AUTO INSURANCE: AM Best Cuts Fin'l Strength Rating to Weak ----------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to C (Weak) from B- (Fair) and issuer credit ratings to "ccc" from "bb- " for United Automobile Insurance Group (United Auto) and its lead member, United Automobile Insurance Company (both of Miami Gardens, FL). The outlook for all ratings has been revised to negative from stable. These rating actions reflect the substantial decline in United Auto's risk-adjusted capitalization following significant reserve strengthening actions in 2008 that were related to 2006 and prior accident years, primarily in its personal injury protection (PIP) line of business . In addition, United Auto maintains elevated underwriting and investment leverage, both of which also contributed to the deterioration in its risk-adjusted capital. The negative outlook reflects A.M. Best's concern that capitalization may deteriorate further if United Auto's operating performance does not improve in the near term. UNIVERSAL CITY: Moody's Downgrades Corporate Family Rating to B2 ---------------------------------------------------------------- Moody's Investors Service downgraded Universal City Florida Holding Co. II's Corporate Family Rating to B2 from B1, its Probability of Default Rating to B3 from B1, and its senior unsecured notes to Caa1 from B3. In addition, Moody's downgraded the operating subsidiary Universal City Development Partners, Ltd's senior secured bank facility to Ba2 from Ba1 and its senior unsecured notes to B2 from B1. All ratings remain on review for possible further downgrade. The downgrades and ongoing review for possible further downgrade reflect Moody's heightened concern regarding the company's ability to refinance $950 million of bonds due in April/May 2010 at par given weak credit market conditions and the expected pressure on Universal Orlando's attendance and cash flow from the downturn in consumer spending. The maturity of UCDP's senior secured credit facility will also move up to April 1, 2010 if the bonds are not refinanced by that date and this creates additional refinancing risk. Moody's believes the company's financial sponsors (Blackstone Capital Partners and NBC Universal) will seek to preserve their investment as part of any refinancing because of the close strategic ties with Universal Studios and the expected completion of the Hollywood Rip Ride Rockit roller coaster and Wizarding World of Harry Potter attractions in the next two years that the sponsors have helped to fund and should generate consumer interest. In Moody's opinion, this suggests an exchange offer or similar restructuring is more likely than a bankruptcy filing. Moody's expects to conclude the review by the end of March with multi-notch downgrades of the CFR and PDR a strong possibility. The one notch gap between the CFR and PDR reflects Moody's view that default risk is elevated relative to other issuers with a B2 CFR, as well as the projected above-average recovery expectation for the company's creditors in an event of default scenario. Moody's has taken these rating actions: Downgrades: Issuer: Universal City Florida Holding Co. II -- Corporate Family Rating, Downgraded to B2 from B1 -- Probability of Default Rating, Downgraded to B3 from B1 -- Senior Unsecured Bonds, Downgraded to Caal, LGD5-71% from B3, LGD5-88% Issuer: Universal City Development Partners, Ltd -- Senior Secured Bank Facility, Downgraded to Ba2, LGD1-6% from Ba1, LGD2-15% -- Senior Unsecured 11.75% Bonds, Downgraded to B2, LGD3-36% from B1, LGD4-57% Outlook Actions: Issuer: Universal City Florida Holding Co. II -- Outlook, Changed To Rating Under Review From Stable Issuer: Universal City Development Partners, Ltd -- Outlook, Changed To Rating Under Review From Stable In the review, Moody's will evaluate the company's refinancing alternatives and the anticipated recovery for individual debt holders in the event of a restructuring, including the impact that Steven Spielberg's consultant fees (which have a priority interest in the parks over that of all financiers, lenders and equity holders) and put right beginning in June 2010 could have on the refinancing options. Moody's will also review the expected effect that weakness in discretionary consumer spending will likely have on attendance and revenue, the company's ability to mitigate such pressure through cost reductions, the distribution policy, and the likely effect on the company's ability to access new funding from capital markets and its equity sponsors, address its maturities, and comply with its credit facility financial maintenance covenants. The company's B2 CFR is based on Universal Orlando's strong consumer draw created by the company's movie- and entertainment- themed rides and attractions, tempered by concentration risk associated with the single-site theme parks, reliance on cyclical discretionary consumer spending, and the significant and growing refinancing risk. Moody's last rating action related to Universal Orlando was an affirmation of the B1 CFR, upgrade of UCDP's senior notes to B1 from B2, and change in the rating outlook on UCFH's notes to stable from negative on May 2, 2007. Universal Orlando's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Universal Orlando's core industry and Universal Orlando's ratings are believed to be comparable to those of other issuers of similar credit risk. UCDP, headquartered in Orlando Florida, operates the Universal Studios Florida, Universal Islands of Adventure theme parks and Universal CityWalk Orlando, a dining, retail and entertainment complex. Universal City Florida Holding Co. I and Universal City Florida Holding Co. II are holding companies that own UCDP. The company is a 50-50 joint venture of Blackstone Capital Partners and a wholly-owned subsidiary of Vivendi Universal Entertainment LLP (a subsidiary of NBC Universal). Annual revenue in 2008 was $923 million. UTAH 7000: Court OKs Ch. 11 Plan; Major Lenders to Take Control --------------------------------------------------------------- Paul Foy at The Associated Press reports that the Hon. Judith Boulden in the U.S. Bankruptcy Court for the District of Utah has approved Utah 7000 LLC's reorganization plan. According to The AP, Judge Boulden approved the Plan on Thursday after nobody objected in court. Judge Boulden approved the Plan right away because with so much money sunk into the project, Promontory is considered a prized asset that is "worth so much more operating than warehoused," The AP says, citing Thomas J. Beckett, a Salt Lake City bankruptcy lawyer for homeowners and other unsecured creditors. The AP relates that the Plan lets leading creditors represented by Credit Suisse take over the private mountain community. Credit Suisse said in court documents that Utah 7000 defaulted on $275 million in loans in December 2007. The AP relates that Credit Suisse doesn't hold the loan, which was sold to hedge funds and other investors. The bank acts as agent for the loan holders, The AP says. The AP, citing lawyers, states that Highland Capital Management owns 40% of the loans and will become a major player in the resort's reorganization. Utah 7000 could lose control of the community, according to The AP. The report quoted executive vice president Karl L. Polen Jr. as saying, "It's not what we hoped for or intended but there's been a dislocation in the economy. This protects the brand of Promontory." The AP relates that Promontory, excluding individually owned lots that have been sold or developed with about 300 homes, is valued at $560 million, according to an appraisal of developer-owned assets in June 2008. The AP reports that Promontory's major lenders have until March 19 to show that they can raise $70 million to pay some debts and sustain operations. If the lenders fail to do so, the Debtors could sell Promontory at auction, The AP notes. According to The AP, Utah 7000 said that it would be among the bidders. The AP states that creditors are expected to secure the necessary financing for a takeover, and developer-owned lot sales would pick up as the golf season approaches. The report says that the sale was delayed due to Utah 7000's bankruptcy. According to The AP, some people who previously purchased lots at Promontory were free to sell them, and current prices are at $250,000. The AP notes that the developer's own prices begin at $600,000. The AP states that developed home sites are priced at $600,000 to $1.3 million. About Utah 7000 Based in Park City, Utah, Utah 7000 LLC fka Pivotal Promontory LLC operates and develops resort community near Park City and Deer Valley ski resorts. Utah 7000 owns a 7,224-acre master-planned development near Park City, Utah, known as Promontory, On March 28, certain holders of junior and second priority liens filed for involuntary Chapter 11 petitions against the Company (Bankr. D. Utah Lead Case No.08-21869). Kenneth L. Cannon, II, Esq., at Durham Jones & Pinegar, represents the petitioners. On April 3, 2008, the Debtors gave their consent to the entry of an order for Chapter 11 bankruptcy relief. Danny C. Kelly, Esq., at Stoel Rives LLP and Eve H. Karasik, Esq., at Stutman Treister & Glatt Professional Co., represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 19 appointed an Official Committee of Unsecured Creditors in the cases. J. Thomas Beckett, Esq., at Parsons Behle & Latimer, represents the Committee. According to Bloomberg, Judge Judith A. Boulden estimated the value of Utah 7000's property at $560.1 million. The Debtor owes about $431.5 million to several secured creditors. VERENIUM CORP: Human Resource VP Dabiero Discloses Equity Stake --------------------------------------------------------------- OppenheimerFunds, Inc., reports holding 9.9 million shares of Verenium Corporation common stock, representing a 14.40% stake, as of March 9, 2009. Its Global Opportunities Fund holds 9.7 million shares, representing a 14.22% stake. Meanwhile, John R. Malloy, Jr., said it acquired 11,169 shares of the company in a cashless net exercise of an employee stock option that were due to expire on March 15, 2009. Mr. Malloy tendered to the company 5,918 shares to cover exercise price and withholding taxes. About Verenium Corporation Based in Cambridge, Massachusetts, Verenium Corporation (Nasdaq: VRNM) -- http://www.verenium.com/-- is engaged in the development and commercialization of next-generation cellulosic ethanol, an environmentally-friendly and renewable transportation fuel, as well as high-performance specialty enzymes for applications within the alternative fuels, specialty industrial processes, and animal nutrition and health markets. Going Concern/Possible Bankruptcy As reported in the Troubled Company Reporter on April 1, 2008, Ernst & Young LLP, in San Diego, expressed substantial doubt about Verenium Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring operating losses and accumulated deficit of $437.1 million at Dec. 31, 2007. As of Sept. 30, 2008, Verenium Corporation's balance sheet showed $172.4 million in total assets, $181.9 million in total liabilities, a net asset deficiency and stockholders' deficit of $29.1 million and an accumulated deficit of $610.0 million. The company reported $133.2 million in net loss for the third quarter of 2008, compared with $20.4 million in net loss in the third quarter of 2007. For the nine months ended September 30, 2008, the company had net losses of $172.9 million. The company has said it will require additional capital to fund its operations, and plans to address the expected shortfall of working capital through a combination of additional corporate partnerships and collaborations, federal and state grant funding, incremental product sales, selling or financing assets, and, if necessary and available, the sale of equity or debt securities. If the company is unsuccessful in raising additional capital from any of these sources, it will defer, reduce, or eliminate certain planned expenditures. The company will continue to consider other financing alternatives including but not limited to, a divesture of all or part of its business. There can be no assurance that the company will be able to obtain any sources of financing on acceptable terms, or at all. If the company cannot obtain sufficient additional financing in the short-term, it may be forced to restructure or significantly curtail its operations, file for bankruptcy or cease operations. On August 6, 2008, the company entered into a strategic partnership with BP Biofuels North America LLC, to accelerate the development and commercialization of cellulosic ethanol. During the initial 18-month phase of the joint development program, the company expects to receive $90 million in connection with the transaction, of which $24.5 million has been received as of September 30, 2008. In connection with the strategic partnership, the company formed a special purpose entity, Galaxy Biofuels LLC. Verenium expects the BP funding to substantially fund its working capital requirements into 2009. VERSO PAPER: S&P Puts 'B' Corporate Rating on Negative Watch ------------------------------------------------------------ Standard & Poor's Ratings Services said that it placed its ratings, including the 'B' corporate credit rating, on Memphis, Tennessee-based Verso Paper Holdings LLC on CreditWatch with negative implications. "The CreditWatch listing reflects our view that Verso could face a more challenging-than-expected operating environment over the next few quarters with significantly lower demand, intensified pressures on selling prices, and the high likelihood for additional capacity curtailments or downtime," said Standard & Poor's credit analyst Andy Sookram. As a result, S&P believes Verso's earnings and credit measures will weaken. Also, while the company's decision to exercise the pay-in-kind option for the 90-day interest period ending Jan. 2, 2009, under the $250 million unsecured term loan ($112 million outstanding) will help liquidity in the short-term, the company's already aggressive debt burden will increase from the interest accretion. Still, S&P believes liquidity is likely to remain adequate in the near-term, with about $60 million available under the revolving credit facility (due 2012) and $120 million cash on hand as of Dec. 31, 2008. There are no significant debt maturities over the next three years. In resolving the CreditWatch listing, S&P will discuss with management its operating and financial prospects for the next several quarters in light of the continued weak market conditions and whether or not it expects to continue exercising the PIK option for the interest on the term loan. WOLF HOLLOW: S&P Puts 'B' Rating on Facilities on Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed the 'B' rating on Wolf Hollow I L.P.'s first-lien credit facilities on CreditWatch with negative implications. The facilities consist of a $156 million first lien term loan (which consist of $130 million and a $26 million sub-facility revolver, $120.7 million of the $130 million outstanding as of Dec. 31, 2008), a $30 million working capital facility, and a $104 million synthetic LC facility. The recovery ratings on the first-lien facilities remain at '1'. In addition, S&P placed the 'CCC+' rating on the $110 million second-lien term loan on CreditWatch negative. The recovery rating on the second-lien facilities remains at '4'. The CreditWatch placement follows improved fourth-quarter earnings that were augmented by cash received from a heat rate call option written by the project to Eagle Energy; S&P calculate that without this cash, the project would have tripped the trailing fourth- quarter debt service coverage ratio of 1.20x, a financial covenant in the credit agreement. In addition, S&P believes the changed hedge profile for the 720 MW plant (680 MW of which are already contracted via a power purchase agreement and heat rate call option with Exelon and J. Aron, respectively) has increased operational risk; unplanned outages may result in higher replacement power obligations, an issue which contributed to gross margin reduction in 2008 even without the presence of the additional hedging agreement. Finally, the project also executed a lease agreement with Quicksilver Resources for rights to drill and extract natural gas from a portion of the project property; S&P is seeking additional information on the terms of this agreement and its impact, if any, on project lenders. * S&P Takes Ratings Action on Various U.S. REIT ----------------------------------------------- Standard & Poor's Ratings Services recently took rating actions on 10 U.S. real estate investment trusts: S&P lowered its ratings on two companies and placed S&P's ratings on nine companies on CreditWatch with negative implications. These actions affect roughly 16% of S&P's rated 62-company universe and were prompted by continued constrained access to debt and equity capital for many REITs and S&P's concern that sharply deteriorating economic conditions will result in greater pressure on portfolio-level cash flows than previously contemplated. In the current environment, S&P remains very highly focused on REIT liquidity and balance sheet strength. In S&P's view, heavy credit revolver usage (in excess of 50%), weak debt service coverage, and an over-reliance on earnings from fee-driven and/or asset sales activity are key areas of focus. With regard to REIT common dividend coverage, S&P would view even the modest funding of a dividend shortfall with debt as a negative credit factor, given the balance-sheet implications and the need for REITs to preserve precious liquidity in the current environment. From a property fundamentals standpoint, most sectors will come under stress this year, though to varying degrees. The sharp curtailment in consumer spending since last fall is hitting retailers hard, which has increased tenant default risk for retail and net-lease REIT portfolios. Retrenching or contracting commercial tenants will pressure occupancy and rents for office and industrial landlords. And recently accelerating job losses may now have a negative impact on the currently better-positioned multifamily and self-storage sectors. While S&P considers most healthcare REIT property portfolios to be currently fairly defensively postured, even this asset class could come under pressure if government and private insurer reimbursement schemes are meaningfully altered. As it stands now, S&P believes that the downside scenario that S&P considered last fall (see "The Recession May Bring More Negative Rating Actions To U.S. REITs And Real Estate Operating Companies," published Nov. 7, 2008) may be coming to pass. At that time, S&P took negative rating actions on 19 companies. Now, with the recession shaping up to be deeper and longer than S&P originally modeled for, S&P believes more REIT ratings will come under pressure. While S&P believes the bulk of the REITs that S&P rate face relatively manageable 2009 capital needs, 2010 and 2011 could be more challenging, absent an improvement in capital market conditions and/or a nearer-term economic turnaround. Despite these broader negative trends facing the sector, S&P continues to evaluate each rated REIT on its own merits and believe most companies remain highly focused on maintaining and/or improving their liquidity positions. While property transaction volumes have contracted substantially on a national level, the generally higher quality of REIT property holdings has enabled many companies to continue to sell assets and source attractively priced secured mortgage financing. In addition, development pipelines are contracting (which should reduce future funding needs) and a number of REITs are either cutting their dividends or considering stock dividends in an effort to retain more capital. S&P also acknowledges that the current capital and asset pricing dislocations in the market will eventually present very attractive investment opportunities for those REITs with dry powder. Most of the companies affected by S&P's recent rating actions previously carried negative outlooks. With respect to the nine CreditWatch actions, S&P expects to completes its analyses and resolve the placements within the month, in conjunction with a full review of all U.S. REIT ratings. Please see RatingsDirect for complete, company-specific articles that address each of S&P's rating actions. S&P will publish additional REIT ratings commentary in early April and S&P will hold a teleconference to discuss S&P's broader U.S. REIT ratings perspective on Thursday April 9, 2009. Creditwatch Listings Property Focus To From -------- -- ---- Apartment Investment & Management Co. Multifamily BB+/Watch Neg BB+/Stable BRE Properties Inc. Multifamily BBB/Watch Neg BBB/Stable Capital Net Lease Automotive LLC (auto) BB/Watch Neg BB/Neg Colonial Properties Multifamily BBB-/Watch Neg BBB- /Neg Developers Diversified Realty Corp. Retail BBB-/Watch Neg BBB- /Neg Hospitality Properties Trust Net Lease (hotel) BBB/Watch Neg BBB/Neg ProLogis Industrial BBB-/Watch Neg BBB- /Neg UDR Inc. Multifamily BBB/Watch Neg BBB/Stable Rating Changes Property Focus To From -------- -- ---- Camden Property Trust Multifamily BBB/Stable BBB+/Neg First Industrial Industrial BB/Watch Neg BBB- /Neg * BOND PRICING -- For the Week From March 9 - 13, 2009 ------------------------------------------------------ Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.75% 4/1/2012 39.13 ABITIBI-CONS FIN 7.875% 8/1/2009 27.00 ACCURIDE CORP 8.5% 2/1/2015 30.00 ACE CASH EXPRESS 10.25% 10/1/2014 14.13 ADVANTA CAP TR 8.99% 12/17/2026 9.50 AGFC CAP TRUST I 6% 1/15/2067 9.96 AHERN RENTALS 9.25% 8/15/2013 25.00 ALABAMA POWER 5.5% 10/1/2042 70.00 ALERIS INTL INC 9% 12/15/2014 0.48 ALERIS INTL INC 10% 12/15/2016 0.70 ALION SCIENCE 10.25% 2/1/2015 20.00 ALLBRITTON COMM 7.75% 12/15/2012 40.00 ALLIED CAP CORP 6% 4/1/2012 18.36 ALLIED CAP CORP 6.625% 7/15/2011 19.75 ALLIS-CHALMERS E 8.5% 3/1/2017 24.00 ALLIS-CHALMERS E 9% 1/15/2014 31.00 AMD 7.75% 11/1/2012 52.25 AMER AXLE & MFG 5.25% 2/11/2014 17.50 AMER AXLE & MFG 7.875% 3/1/2017 16.50 AMER CAP STRATEG 8.6% 8/1/2012 38.00 AMER GENL CORP 7.5% 8/11/2010 77.15 AMER GENL FIN 3% 7/15/2009 82.87 AMER GENL FIN 3.05% 6/15/2010 35.00 AMER GENL FIN 3.1% 6/15/2009 48.00 AMER GENL FIN 3.1% 7/15/2009 76.80 AMER GENL FIN 3.3% 7/15/2009 87.23 AMER GENL FIN 3.3% 11/15/2009 50.00 AMER GENL FIN 3.3% 6/15/2010 58.00 AMER GENL FIN 3.35% 5/15/2009 91.38 AMER GENL FIN 3.4% 10/15/2009 79.33 AMER GENL FIN 3.45% 4/15/2010 40.00 AMER GENL FIN 3.6% 4/15/2009 95.75 AMER GENL FIN 3.8% 4/15/2009 60.00 AMER GENL FIN 3.85% 9/15/2009 91.85 AMER GENL FIN 3.875% 10/1/2009 68.03 AMER GENL FIN 3.875% 10/15/2009 66.49 AMER GENL FIN 3.875% 11/15/2009 65.88 AMER GENL FIN 3.9% 9/15/2009 75.60 AMER GENL FIN 3.9% 4/15/2010 54.98 AMER GENL FIN 3.9% 4/15/2011 24.00 AMER GENL FIN 4% 6/15/2009 80.49 AMER GENL FIN 4% 8/15/2009 79.20 AMER GENL FIN 4% 9/15/2009 60.00 AMER GENL FIN 4% 11/15/2009 68.69 AMER GENL FIN 4% 11/15/2009 30.00 AMER GENL FIN 4% 11/15/2009 56.00 AMER GENL FIN 4% 12/15/2009 50.00 AMER GENL FIN 4% 12/15/2009 65.83 AMER GENL FIN 4% 12/15/2009 65.33 AMER GENL FIN 4% 3/15/2011 41.00 AMER GENL FIN 4% 4/15/2012 20.00 AMER GENL FIN 4.05% 5/15/2010 15.00 AMER GENL FIN 4.1% 1/15/2010 51.78 AMER GENL FIN 4.1% 5/15/2010 39.16 AMER GENL FIN 4.1% 1/15/2011 35.05 AMER GENL FIN 4.1% 7/15/2012 43.88 AMER GENL FIN 4.125% 1/15/2010 62.63 AMER GENL FIN 4.15% 11/15/2010 41.00 AMER GENL FIN 4.15% 12/15/2010 26.00 AMER GENL FIN 4.15% 1/15/2011 40.90 AMER GENL FIN 4.2% 8/15/2009 34.25 AMER GENL FIN 4.2% 10/15/2009 30.00 AMER GENL FIN 4.2% 11/15/2009 50.00 AMER GENL FIN 4.2% 10/15/2010 44.75 AMER GENL FIN 4.25% 11/15/2009 69.01 AMER GENL FIN 4.25% 10/15/2010 43.89 AMER GENL FIN 4.25% 3/15/2013 37.25 AMER GENL FIN 4.3% 5/15/2009 45.00 AMER GENL FIN 4.3% 6/15/2009 84.84 AMER GENL FIN 4.3% 9/15/2009 75.84 AMER GENL FIN 4.3% 6/15/2010 80.24 AMER GENL FIN 4.3% 7/15/2010 48.34 AMER GENL FIN 4.3% 9/15/2010 44.99 AMER GENL FIN 4.3% 10/15/2011 34.03 AMER GENL FIN 4.35% 6/15/2009 94.50 AMER GENL FIN 4.35% 6/15/2009 86.07 AMER GENL FIN 4.35% 9/15/2009 75.63 AMER GENL FIN 4.35% 3/15/2010 57.72 AMER GENL FIN 4.4% 5/15/2009 75.00 AMER GENL FIN 4.4% 7/15/2009 60.00 AMER GENL FIN 4.4% 12/15/2010 22.00 AMER GENL FIN 4.4% 12/15/2011 19.00 AMER GENL FIN 4.4% 4/15/2012 15.50 AMER GENL FIN 4.5% 7/15/2009 60.00 AMER GENL FIN 4.5% 9/15/2009 65.00 AMER GENL FIN 4.5% 3/15/2010 57.58 AMER GENL FIN 4.5% 8/15/2010 21.00 AMER GENL FIN 4.5% 11/15/2010 30.00 AMER GENL FIN 4.5% 11/15/2011 36.62 AMER GENL FIN 4.55% 10/15/2009 79.00 AMER GENL FIN 4.6% 11/15/2009 27.00 AMER GENL FIN 4.6% 8/15/2010 32.00 AMER GENL FIN 4.6% 9/15/2010 22.00 AMER GENL FIN 4.6% 10/15/2010 43.85 AMER GENL FIN 4.6% 1/15/2012 65.47 AMER GENL FIN 4.625% 5/15/2009 91.00 AMER GENL FIN 4.625% 9/1/2010 37.00 AMER GENL FIN 4.625% 3/15/2012 49.00 AMER GENL FIN 4.625% 10/15/2012 26.00 AMER GENL FIN 4.625% 12/15/2012 25.00 AMER GENL FIN 4.65% 8/15/2010 61.00 AMER GENL FIN 4.7% 12/15/2009 65.94 AMER GENL FIN 4.7% 10/15/2010 43.40 AMER GENL FIN 4.75% 6/15/2010 30.00 AMER GENL FIN 4.75% 8/15/2010 19.55 AMER GENL FIN 4.75% 5/15/2011 38.86 AMER GENL FIN 4.75% 11/15/2012 20.00 AMER GENL FIN 4.8% 8/15/2009 79.44 AMER GENL FIN 4.8% 9/15/2011 37.40 AMER GENL FIN 4.85% 10/15/2009 72.61 AMER GENL FIN 4.85% 12/15/2009 77.99 AMER GENL FIN 4.875% 5/15/2010 43.75 AMER GENL FIN 4.875% 6/15/2010 68.63 AMER GENL FIN 4.875% 7/15/2012 39.00 AMER GENL FIN 4.9% 12/15/2009 82.58 AMER GENL FIN 4.9% 3/15/2011 40.02 AMER GENL FIN 4.9% 3/15/2012 35.58 AMER GENL FIN 4.95% 11/15/2010 25.75 AMER GENL FIN 5% 9/15/2009 86.25 AMER GENL FIN 5% 1/15/2010 34.00 AMER GENL FIN 5% 6/15/2010 78.84 AMER GENL FIN 5% 9/15/2010 35.00 AMER GENL FIN 5% 10/15/2010 26.00 AMER GENL FIN 5% 11/15/2010 45.00 AMER GENL FIN 5% 12/15/2010 21.00 AMER GENL FIN 5% 12/15/2010 50.88 AMER GENL FIN 5% 12/15/2010 23.00 AMER GENL FIN 5% 1/15/2011 16.90 AMER GENL FIN 5% 1/15/2011 51.70 AMER GENL FIN 5% 3/15/2011 28.10 AMER GENL FIN 5% 6/15/2011 39.35 AMER GENL FIN 5% 10/15/2011 24.26 AMER GENL FIN 5% 12/15/2011 36.27 AMER GENL FIN 5% 3/15/2012 35.94 AMER GENL FIN 5% 8/15/2012 22.00 AMER GENL FIN 5% 9/15/2012 22.00 AMER GENL FIN 5% 12/15/2012 21.00 AMER GENL FIN 5% 5/15/2013 30.88 AMER GENL FIN 5% 8/15/2013 22.00 AMER GENL FIN 5.1% 6/15/2009 92.93 AMER GENL FIN 5.1% 9/15/2009 78.63 AMER GENL FIN 5.1% 9/15/2010 45.76 AMER GENL FIN 5.1% 3/15/2011 54.97 AMER GENL FIN 5.1% 1/15/2012 36.49 AMER GENL FIN 5.1% 12/15/2013 28.36 AMER GENL FIN 5.1% 3/15/2014 27.56 AMER GENL FIN 5.15% 6/15/2009 97.50 AMER GENL FIN 5.15% 9/15/2009 76.20 AMER GENL FIN 5.15% 10/15/2013 33.65 AMER GENL FIN 5.15% 3/15/2014 27.66 AMER GENL FIN 5.2% 6/15/2010 65.50 AMER GENL FIN 5.2% 9/15/2010 60.10 AMER GENL FIN 5.2% 5/15/2011 25.00 AMER GENL FIN 5.2% 12/15/2011 32.85 AMER GENL FIN 5.2% 5/15/2012 33.50 AMER GENL FIN 5.2% 10/15/2013 28.12 AMER GENL FIN 5.25% 6/15/2009 87.27 AMER GENL FIN 5.25% 6/15/2009 87.27 AMER GENL FIN 5.25% 7/15/2010 37.70 AMER GENL FIN 5.25% 4/15/2011 39.85 AMER GENL FIN 5.25% 6/15/2011 60.15 AMER GENL FIN 5.25% 9/15/2012 33.51 AMER GENL FIN 5.25% 12/15/2012 18.00 AMER GENL FIN 5.25% 12/15/2012 66.98 AMER GENL FIN 5.25% 5/15/2013 34.25 AMER GENL FIN 5.3% 6/15/2009 87.46 AMER GENL FIN 5.35% 6/15/2010 45.51 AMER GENL FIN 5.35% 7/15/2010 52.50 AMER GENL FIN 5.35% 9/15/2011 53.00 AMER GENL FIN 5.35% 8/15/2012 33.66 AMER GENL FIN 5.375% 9/1/2009 71.00 AMER GENL FIN 5.375% 10/1/2012 40.50 AMER GENL FIN 5.4% 6/15/2011 38.91 AMER GENL FIN 5.4% 6/15/2011 38.91 AMER GENL FIN 5.4% 5/15/2013 23.00 AMER GENL FIN 5.4% 9/15/2013 30.55 AMER GENL FIN 5.4% 6/15/2014 39.00 AMER GENL FIN 5.45% 9/15/2009 76.20 AMER GENL FIN 5.45% 6/15/2011 38.09 AMER GENL FIN 5.45% 10/15/2011 30.00 AMER GENL FIN 5.45% 9/15/2013 30.62 AMER GENL FIN 5.5% 6/15/2009 87.31 AMER GENL FIN 5.5% 12/15/2010 42.16 AMER GENL FIN 5.5% 4/15/2011 32.09 AMER GENL FIN 5.5% 6/15/2012 35.08 AMER GENL FIN 5.5% 7/15/2012 23.00 AMER GENL FIN 5.5% 8/15/2012 33.83 AMER GENL FIN 5.5% 12/15/2012 16.00 AMER GENL FIN 5.5% 12/15/2012 35.08 AMER GENL FIN 5.5% 1/15/2013 31.83 AMER GENL FIN 5.5% 1/15/2013 31.83 AMER GENL FIN 5.5% 5/15/2014 30.34 AMER GENL FIN 5.5% 6/15/2014 32.25 AMER GENL FIN 5.6% 6/15/2011 39.08 AMER GENL FIN 5.625% 8/17/2011 33.75 AMER GENL FIN 5.65% 3/15/2013 15.00 AMER GENL FIN 5.75% 5/15/2013 16.00 AMER GENL FIN 5.75% 6/15/2013 24.00 AMER GENL FIN 5.75% 8/15/2014 26.87 AMER GENL FIN 5.75% 9/15/2014 26.63 AMER GENL FIN 5.8% 9/15/2013 16.00 AMER GENL FIN 5.85% 9/15/2012 31.70 AMER GENL FIN 6% 7/15/2011 32.85 AMER GENL FIN 6% 4/15/2013 25.00 AMER GENL FIN 6% 4/15/2013 16.00 AMER GENL FIN 6% 10/15/2014 23.76 AMER GENL FIN 6% 10/15/2014 22.00 AMER GENL FIN 6% 11/15/2014 11.28 AMER GENL FIN 6% 12/15/2014 36.25 AMER GENL FIN 6% 12/15/2014 25.00 AMER GENL FIN 6% 12/15/2014 28.06 AMER GENL FIN 6% 1/15/2015 16.90 AMER GENL FIN 6.25% 7/15/2010 79.31 AMER GENL FIN 6.25% 7/15/2011 25.00 AMER GENL FIN 6.25% 7/15/2011 20.00 AMER 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ANTHRACITE CAP 11.75% 9/1/2027 9.00 APPLETON PAPERS 9.75% 6/15/2014 18.00 ARCO CHEMICAL CO 9.8% 2/1/2020 9.50 ARCO CHEMICAL CO 10.25% 11/1/2010 9.00 ARVINMERITOR 8.125% 9/15/2015 21.50 ARVINMERITOR 8.75% 3/1/2012 26.56 ASARCO INC 7.875% 4/15/2013 23.50 ASHTON WOODS USA 9.5% 10/1/2015 19.50 AT HOME CORP 0.5246% 12/28/2018 0.06 ATHEROGENICS INC 1.5% 2/1/2012 11.00 AVENTINE RENEW 10% 4/1/2017 20.01 AVIS BUDGET CAR 7.625% 5/15/2014 18.00 AVIS BUDGET CAR 7.75% 5/15/2016 18.00 BANK NEW ENGLAND 9.875% 9/15/1999 5.38 BANK OF AMER CRP 7.8% 2/15/2010 95.83 BANKUNITED CAP 3.125% 3/1/2034 8.00 BARRINGTON BROAD 10.5% 8/15/2014 12.50 BEAZER HOMES USA 4.625% 6/15/2024 21.75 BEAZER HOMES USA 6.5% 11/15/2013 20.00 BEAZER HOMES USA 6.875% 7/15/2015 21.00 BEAZER HOMES USA 8.125% 6/15/2016 23.00 BEAZER HOMES USA 8.375% 4/15/2012 24.25 BEAZER HOMES USA 8.625% 5/15/2011 33.25 BELL MICROPRODUC 3.75% 3/5/2024 18.00 BELL MICROPRODUC 3.75% 3/5/2024 15.63 BLOCKBUSTER INC 9% 9/1/2012 42.00 BON-TON DEPT STR 10.25% 3/15/2014 15.00 BORDEN INC 7.875% 2/15/2023 7.03 BORDEN INC 8.375% 4/15/2016 2.00 BORDEN INC 9.2% 3/15/2021 7.00 BOWATER INC 6.5% 6/15/2013 7.02 BOWATER INC 9% 8/1/2009 25.00 BOWATER INC 9.375% 12/15/2021 19.75 BOWATER INC 9.5% 10/15/2012 10.50 BRODER BROS CO 11.25% 10/15/2010 19.25 BROOKSTONE CO 12% 10/15/2012 48.50 BURLINGTON COAT 11.125% 4/15/2014 25.00 CALLON PETROLEUM 9.75% 12/8/2010 40.00 CAPMARK FINL GRP 7.375% 5/10/2012 19.00 CAPMARK FINL GRP 7.8% 5/10/2017 17.50 CARAUSTAR INDS 7.25% 5/1/2010 50.38 CARAUSTAR INDS 7.375% 6/1/2009 53.00 CCH I LLC 9.92% 4/1/2014 1.00 CCH I LLC 10% 5/15/2014 2.63 CCH I LLC 11.125% 1/15/2014 1.25 CCH I/CCH I CP 11% 10/1/2015 8.50 CCH I/CCH I CP 11% 10/1/2015 8.00 CELL GENESYS INC 3.125% 11/1/2011 40.00 CELL THERAPEUTIC 5.75% 12/15/2011 14.50 CENTRAL EUROPEAN 3% 3/15/2013 27.00 CHAMPION ENTERPR 2.75% 11/1/2037 12.75 CHAMPION ENTERPR 7.625% 5/15/2009 91.00 CHAPARRAL ENERGY 8.5% 12/1/2015 27.25 CHAPARRAL ENERGY 8.875% 2/1/2017 28.75 CHARTER COMM HLD 9.625% 11/15/2009 62.25 CHARTER COMM HLD 10% 5/15/2011 1.50 CHARTER COMM HLD 11.125% 1/15/2011 5.06 CHARTER COMM HLD 11.75% 5/15/2011 2.00 CHARTER COMM INC 6.5% 10/1/2027 5.50 CHENIERE ENERGY 2.25% 8/1/2012 17.00 CIRCUS CIRCUS 7.625% 7/15/2013 8.94 CIT GROUP INC 3.375% 4/1/2009 95.12 CIT GROUP INC 4.125% 11/3/2009 82.50 CIT GROUP INC 4.25% 2/1/2010 77.50 CIT GROUP INC 5.2% 11/3/2010 68.00 CIT GROUP INC 6.875% 11/1/2009 82.88 CITADEL BROADCAS 4% 2/15/2011 30.00 CITIGROUP INC 7.25% 10/1/2010 76.26 CITIZENS REPUB 5.75% 2/1/2013 28.25 CLAIRE'S STORES 9.25% 6/1/2015 24.50 CLAIRE'S STORES 10.5% 6/1/2017 19.50 CLEAR CHANNEL 4.25% 5/15/2009 88.50 CLEAR CHANNEL 4.4% 5/15/2011 15.50 CLEAR CHANNEL 4.5% 1/15/2010 35.00 CLEAR CHANNEL 4.9% 5/15/2015 10.00 CLEAR CHANNEL 5% 3/15/2012 6.50 CLEAR CHANNEL 5.5% 9/15/2014 6.90 CLEAR CHANNEL 5.5% 12/15/2016 10.31 CLEAR CHANNEL 5.75% 1/15/2013 7.00 CLEAR CHANNEL 6.25% 3/15/2011 15.50 CLEAR CHANNEL 6.875% 6/15/2018 10.50 CLEAR CHANNEL 7.25% 10/15/2027 2.00 CLEAR CHANNEL 7.65% 9/15/2010 24.65 CLEAR CHANNEL 10.75% 8/1/2016 13.75 CMP SUSQUEHANNA 9.875% 5/15/2014 4.50 COEUR D'ALENE 1.25% 1/15/2024 44.00 COMMSC-CALL03/09 1% 3/15/2024 99.81 COMPUCREDIT 3.625% 5/30/2025 23.83 CONEXANT SYSTEMS 4% 3/1/2026 43.03 CONSTAR INTL 11% 12/1/2012 2.75 COOPER-STANDARD 7% 12/15/2012 12.00 COOPER-STANDARD 8.375% 12/15/2014 11.00 CREDENCE SYSTEM 3.5% 5/15/2010 24.00 DAYTON SUPERIOR 13% 6/15/2009 59.50 DECODE GENETICS 3.5% 4/15/2011 4.38 DECODE GENETICS 3.5% 4/15/2011 5.00 DELPHI CORP 8.25% 10/15/2033 0.01 DELTA PETROLEUM 3.75% 5/1/2037 44.00 DEVELOP DIV RLTY 5.25% 4/15/2011 47.50 DEVELOPERS DIVER 3% 3/15/2012 40.38 DEVELOPERS DIVER 3.5% 8/15/2011 47.50 DEX MEDIA INC 8% 11/15/2013 8.06 DEX MEDIA WEST 5.875% 11/15/2011 24.75 DEX MEDIA WEST 8.5% 8/15/2010 44.00 DEX MEDIA WEST 9.875% 8/15/2013 16.88 DOWNEY FINANCIAL 6.5% 7/1/2014 0.50 DOWNSTREAM DEVEL 15.5% 10/4/2016 32.38 DUANE READE INC 9.75% 8/1/2011 56.00 DUNE ENERGY INC 10.5% 6/1/2012 29.60 E*TRADE FINL 7.375% 9/15/2013 30.25 E*TRADE FINL 8% 6/15/2011 38.00 E*TRADE FINL 12.5% 11/30/2017 34.00 E*TRADE FINL 12.5% 11/30/2017 34.00 EASTMAN KODAK CO 9.95% 7/1/2018 19.80 ENERGY PARTNERS 9.75% 4/15/2014 25.00 ENERGY XXI GULF 10% 6/15/2013 38.00 EOP OPERATING LP 4.25% 3/15/2009 99.05 EOP OPERATING LP 7% 7/15/2011 38.93 EPIX MEDICAL INC 3% 6/15/2024 32.50 EQUISTAR CHEMICA 7.55% 2/15/2026 10.00 EVERGREEN SOLAR 4% 7/15/2013 26.75 FGIC CORP 6% 1/15/2034 6.98 FIBERTOWER CORP 9% 11/15/2012 30.03 FINISAR CORP 2.5% 10/15/2010 52.38 FINLAY FINE JWLY 8.375% 6/1/2012 1.75 FIRST DATA CORP 4.5% 6/15/2010 55.00 FIRST DATA CORP 4.7% 8/1/2013 25.12 FIRST DATA CORP 4.85% 10/1/2014 25.00 FIRST DATA CORP 5.625% 11/1/2011 57.95 FLOTEK INDS 5.25% 2/15/2028 21.00 FONTAINEBLEAU LA 11% 6/15/2015 5.25 FORD HOLDINGS 9.3% 3/1/2030 21.00 FORD HOLDINGS 9.375% 3/1/2020 21.50 FORD MOTOR CO 7.125% 11/15/2025 21.50 FORD MOTOR CO 8.9% 1/15/2032 21.00 FORD MOTOR CO 9.215% 9/15/2021 20.00 FORD MOTOR CO 9.5% 9/15/2011 43.50 FORD 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CRED 5.25% 12/21/2009 66.39 FORD MOTOR CRED 5.25% 1/20/2010 73.74 FORD MOTOR CRED 5.25% 2/22/2011 42.90 FORD MOTOR CRED 5.25% 3/21/2011 40.83 FORD MOTOR CRED 5.25% 3/21/2011 34.23 FORD MOTOR CRED 5.25% 9/20/2011 42.00 FORD MOTOR CRED 5.3% 3/21/2011 34.00 FORD MOTOR CRED 5.3% 4/20/2011 40.00 FORD MOTOR CRED 5.35% 5/20/2009 86.00 FORD MOTOR CRED 5.35% 2/22/2011 45.00 FORD MOTOR CRED 5.4% 12/21/2009 67.00 FORD MOTOR CRED 5.4% 1/20/2011 51.13 FORD MOTOR CRED 5.4% 9/20/2011 31.17 FORD MOTOR CRED 5.4% 10/20/2011 32.75 FORD MOTOR CRED 5.4% 10/20/2011 35.50 FORD MOTOR CRED 5.45% 6/21/2010 54.00 FORD MOTOR CRED 5.45% 4/20/2011 47.43 FORD MOTOR CRED 5.45% 10/20/2011 34.50 FORD MOTOR CRED 5.5% 6/22/2009 82.07 FORD MOTOR CRED 5.5% 6/22/2009 90.00 FORD MOTOR CRED 5.5% 1/20/2010 58.54 FORD MOTOR CRED 5.5% 2/22/2010 71.00 FORD MOTOR CRED 5.5% 2/22/2010 55.90 FORD MOTOR CRED 5.5% 2/22/2010 63.74 FORD MOTOR CRED 5.5% 4/20/2011 34.50 FORD MOTOR CRED 5.5% 9/20/2011 37.00 FORD MOTOR CRED 5.55% 6/21/2010 55.00 FORD MOTOR CRED 5.55% 8/22/2011 42.00 FORD MOTOR CRED 5.55% 9/20/2011 38.85 FORD MOTOR CRED 5.6% 12/20/2010 42.96 FORD MOTOR CRED 5.6% 4/20/2011 33.00 FORD MOTOR CRED 5.6% 8/22/2011 47.53 FORD MOTOR CRED 5.6% 9/20/2011 31.84 FORD MOTOR CRED 5.6% 11/21/2011 40.00 FORD MOTOR CRED 5.6% 11/21/2011 44.00 FORD MOTOR CRED 5.65% 12/20/2010 49.00 FORD MOTOR CRED 5.65% 7/20/2011 33.00 FORD MOTOR CRED 5.65% 11/21/2011 30.89 FORD MOTOR CRED 5.65% 12/20/2011 44.00 FORD MOTOR CRED 5.65% 1/21/2014 21.58 FORD MOTOR CRED 5.7% 1/15/2010 82.06 FORD MOTOR CRED 5.7% 3/22/2010 67.97 FORD MOTOR CRED 5.7% 5/20/2011 32.64 FORD MOTOR CRED 5.7% 12/20/2011 45.50 FORD MOTOR CRED 5.7% 1/20/2012 34.50 FORD MOTOR CRED 5.75% 1/20/2010 69.64 FORD MOTOR CRED 5.75% 3/22/2010 54.12 FORD MOTOR CRED 5.75% 6/21/2010 49.49 FORD MOTOR CRED 5.75% 10/20/2010 49.83 FORD MOTOR CRED 5.75% 8/22/2011 31.62 FORD MOTOR CRED 5.75% 12/20/2011 35.94 FORD MOTOR CRED 5.75% 2/21/2012 37.29 FORD MOTOR CRED 5.75% 2/20/2014 28.00 FORD MOTOR CRED 5.75% 2/20/2014 24.00 FORD MOTOR CRED 5.8% 11/22/2010 44.57 FORD MOTOR CRED 5.8% 8/22/2011 49.02 FORD MOTOR CRED 5.85% 5/20/2010 49.71 FORD MOTOR CRED 5.85% 6/21/2010 51.59 FORD MOTOR CRED 5.85% 7/20/2010 40.00 FORD MOTOR CRED 5.85% 7/20/2011 34.00 FORD MOTOR CRED 5.85% 1/20/2012 28.00 FORD MOTOR CRED 5.9% 7/20/2011 42.00 FORD MOTOR CRED 5.95% 5/20/2010 60.08 FORD MOTOR CRED 6% 2/22/2010 58.21 FORD MOTOR CRED 6% 6/21/2010 49.14 FORD MOTOR CRED 6% 10/20/2010 43.00 FORD MOTOR CRED 6% 10/20/2010 50.30 FORD MOTOR CRED 6% 12/20/2010 60.00 FORD MOTOR CRED 6% 1/20/2012 43.00 FORD MOTOR CRED 6% 1/21/2014 27.50 FORD MOTOR CRED 6% 3/20/2014 24.10 FORD MOTOR CRED 6% 3/20/2014 24.17 FORD MOTOR CRED 6% 3/20/2014 24.67 FORD MOTOR CRED 6% 3/20/2014 27.89 FORD MOTOR CRED 6% 11/20/2014 27.10 FORD MOTOR CRED 6% 11/20/2014 24.20 FORD MOTOR CRED 6% 1/20/2015 24.00 FORD MOTOR CRED 6% 2/20/2015 21.26 FORD MOTOR CRED 6.05% 7/20/2010 58.00 FORD MOTOR CRED 6.05% 9/20/2010 51.13 FORD MOTOR CRED 6.05% 6/20/2011 41.50 FORD MOTOR CRED 6.05% 3/20/2012 24.35 FORD MOTOR CRED 6.05% 2/20/2014 21.25 FORD MOTOR CRED 6.05% 3/20/2014 20.66 FORD MOTOR CRED 6.05% 4/21/2014 23.00 FORD MOTOR CRED 6.05% 12/22/2014 16.76 FORD MOTOR CRED 6.05% 12/22/2014 22.76 FORD MOTOR CRED 6.05% 12/22/2014 24.00 FORD MOTOR CRED 6.05% 2/20/2015 20.20 FORD MOTOR CRED 6.1% 6/20/2011 34.75 FORD MOTOR CRED 6.1% 2/20/2015 24.00 FORD MOTOR CRED 6.15% 7/20/2010 49.91 FORD MOTOR CRED 6.15% 9/20/2010 46.63 FORD MOTOR CRED 6.15% 5/20/2011 42.02 FORD MOTOR CRED 6.15% 12/22/2014 16.00 FORD MOTOR CRED 6.2% 5/20/2011 33.60 FORD MOTOR CRED 6.2% 6/20/2011 48.00 FORD MOTOR CRED 6.2% 4/21/2014 23.40 FORD MOTOR CRED 6.2% 3/20/2015 25.00 FORD MOTOR CRED 6.25% 6/20/2011 33.50 FORD MOTOR CRED 6.25% 6/20/2011 32.58 FORD MOTOR CRED 6.25% 2/21/2012 25.55 FORD MOTOR CRED 6.25% 3/20/2012 30.49 FORD MOTOR CRED 6.25% 12/20/2013 24.00 FORD MOTOR CRED 6.25% 12/20/2013 20.96 FORD MOTOR CRED 6.25% 4/21/2014 27.10 FORD MOTOR CRED 6.25% 1/20/2015 25.00 FORD MOTOR CRED 6.25% 3/20/2015 28.99 FORD MOTOR CRED 6.3% 5/20/2010 68.25 FORD MOTOR CRED 6.3% 5/20/2014 20.33 FORD MOTOR CRED 6.3% 5/20/2014 23.00 FORD MOTOR CRED 6.35% 9/20/2010 53.80 FORD MOTOR CRED 6.35% 9/20/2010 57.78 FORD MOTOR CRED 6.35% 4/21/2014 30.10 FORD MOTOR CRED 6.4% 8/20/2010 59.02 FORD MOTOR CRED 6.5% 8/20/2010 59.01 FORD MOTOR CRED 6.5% 12/20/2013 26.00 FORD MOTOR CRED 6.5% 2/20/2015 24.00 FORD MOTOR CRED 6.5% 3/20/2015 20.75 FORD MOTOR CRED 6.52% 3/10/2013 24.00 FORD MOTOR CRED 6.55% 8/20/2010 50.77 FORD MOTOR CRED 6.55% 12/20/2013 27.00 FORD MOTOR CRED 6.55% 7/21/2014 25.10 FORD MOTOR CRED 6.6% 3/20/2012 44.04 FORD MOTOR CRED 6.65% 10/21/2013 21.76 FORD MOTOR CRED 6.65% 6/20/2014 27.10 FORD MOTOR CRED 6.75% 10/21/2013 28.00 FORD MOTOR CRED 6.75% 6/20/2014 25.00 FORD MOTOR CRED 6.8% 6/20/2014 25.00 FORD MOTOR CRED 6.8% 3/20/2015 25.49 FORD MOTOR CRED 6.85% 9/20/2013 32.59 FORD MOTOR CRED 6.85% 5/20/2014 27.00 FORD MOTOR CRED 6.85% 6/20/2014 22.47 FORD MOTOR CRED 6.95% 4/20/2010 56.96 FORD MOTOR CRED 6.95% 5/20/2014 28.00 FORD MOTOR CRED 6.98% 6/28/2010 70.39 FORD MOTOR CRED 7% 7/1/2010 66.00 FORD MOTOR CRED 7% 7/20/2010 49.00 FORD MOTOR CRED 7% 8/15/2012 35.88 FORD MOTOR CRED 7.05% 9/20/2013 24.00 FORD MOTOR CRED 7.1% 9/20/2013 23.00 FORD MOTOR CRED 7.1% 9/20/2013 23.50 FORD MOTOR CRED 7.15% 8/20/2010 57.52 FORD MOTOR CRED 7.2% 9/27/2010 50.44 FORD MOTOR CRED 7.25% 3/22/2010 58.83 FORD MOTOR CRED 7.25% 7/20/2017 24.19 FORD MOTOR CRED 7.35% 11/7/2011 31.57 FORD MOTOR CRED 7.35% 3/20/2015 28.65 FORD MOTOR CRED 7.35% 9/15/2015 25.17 FORD MOTOR CRED 7.5% 9/20/2010 53.02 FORD MOTOR CRED 7.5% 8/20/2032 17.83 FORD MOTOR CRED 7.55% 9/30/2015 25.43 FORD MOTOR CRED 7.72% 5/17/2010 63.20 FORD MOTOR CRED 7.875% 6/15/2010 74.00 FORD MOTOR CRED 7.9% 5/18/2015 37.50 FORD MOTOR CRED 8.625% 11/1/2010 70.00 FORD MOTOR CRED 9.75% 9/15/2010 77.00 FORD MOTOR CRED 9.875% 8/10/2011 64.06 FRANKLIN BANK 4% 5/1/2027 1.38 FREESCALE SEMICO 8.875% 12/15/2014 17.75 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4.95% 10/15/2009 62.50 GMAC LLC 5% 8/15/2009 76.75 GMAC LLC 5% 8/15/2009 76.75 GMAC LLC 5% 9/15/2009 67.67 GMAC LLC 5% 9/15/2009 74.25 GMAC LLC 5% 9/15/2009 67.00 GMAC LLC 5% 10/15/2009 63.00 GMAC LLC 5.05% 7/15/2009 76.75 GMAC LLC 5.1% 7/15/2009 78.04 GMAC LLC 5.1% 8/15/2009 72.25 GMAC LLC 5.1% 9/15/2009 73.00 GMAC LLC 5.2% 11/15/2009 66.00 GMAC LLC 5.2% 11/15/2009 59.31 GMAC LLC 5.25% 5/15/2009 90.66 GMAC LLC 5.25% 6/15/2009 83.48 GMAC LLC 5.25% 7/15/2009 65.51 GMAC LLC 5.25% 7/15/2009 50.00 GMAC LLC 5.25% 8/15/2009 72.50 GMAC LLC 5.25% 8/15/2009 61.94 GMAC LLC 5.25% 11/15/2009 64.88 GMAC LLC 5.25% 11/15/2009 66.03 GMAC LLC 5.25% 1/15/2014 21.50 GMAC LLC 5.3% 1/15/2010 55.00 GMAC LLC 5.35% 6/15/2009 82.00 GMAC LLC 5.35% 11/15/2009 63.50 GMAC LLC 5.35% 12/15/2009 68.75 GMAC LLC 5.35% 12/15/2009 68.00 GMAC LLC 5.35% 1/15/2014 20.00 GMAC LLC 5.4% 5/15/2009 86.00 GMAC LLC 5.4% 6/15/2009 70.81 GMAC LLC 5.4% 12/15/2009 61.00 GMAC LLC 5.4% 12/15/2009 61.00 GMAC LLC 5.5% 6/15/2009 82.00 GMAC LLC 5.5% 1/15/2010 51.75 GMAC LLC 5.625% 5/15/2009 90.00 GMAC LLC 5.7% 10/15/2013 20.75 GMAC LLC 5.7% 12/15/2013 24.00 GMAC LLC 5.75% 1/15/2010 56.28 GMAC LLC 5.85% 2/15/2010 53.00 GMAC LLC 5.85% 5/15/2013 25.00 GMAC LLC 5.85% 6/15/2013 28.04 GMAC LLC 5.85% 6/15/2013 26.27 GMAC LLC 5.9% 12/15/2013 24.50 GMAC LLC 5.9% 12/15/2013 24.00 GMAC LLC 6% 1/15/2010 56.66 GMAC LLC 6% 2/15/2010 55.80 GMAC LLC 6% 2/15/2010 50.42 GMAC LLC 6% 4/1/2011 45.00 GMAC LLC 6% 7/15/2013 25.05 GMAC LLC 6% 11/15/2013 18.55 GMAC LLC 6% 12/15/2013 18.79 GMAC LLC 6% 9/15/2019 18.97 GMAC LLC 6% 9/15/2019 18.00 GMAC LLC 6.05% 3/15/2010 50.00 GMAC LLC 6.05% 10/15/2019 17.82 GMAC LLC 6.1% 4/15/2009 89.88 GMAC LLC 6.1% 5/15/2013 30.65 GMAC LLC 6.1% 11/15/2013 37.39 GMAC LLC 6.125% 10/15/2019 21.00 GMAC LLC 6.15% 3/15/2010 63.00 GMAC LLC 6.15% 9/15/2013 20.24 GMAC LLC 6.15% 11/15/2013 23.00 GMAC LLC 6.15% 12/15/2013 27.05 GMAC LLC 6.15% 8/15/2019 16.84 GMAC LLC 6.15% 10/15/2019 16.83 GMAC LLC 6.25% 5/15/2009 96.19 GMAC LLC 6.25% 6/15/2009 92.63 GMAC LLC 6.25% 3/15/2013 20.60 GMAC LLC 6.25% 7/15/2013 23.38 GMAC LLC 6.25% 10/15/2013 24.00 GMAC LLC 6.25% 11/15/2013 18.61 GMAC LLC 6.3% 3/15/2013 25.00 GMAC LLC 6.3% 10/15/2013 18.00 GMAC LLC 6.3% 11/15/2013 17.50 GMAC LLC 6.3% 8/15/2019 20.50 GMAC LLC 6.3% 8/15/2019 20.50 GMAC LLC 6.35% 5/15/2013 25.07 GMAC LLC 6.35% 4/15/2019 17.75 GMAC LLC 6.375% 6/15/2010 42.79 GMAC LLC 6.375% 1/15/2014 21.30 GMAC LLC 6.4% 3/15/2013 33.00 GMAC LLC 6.4% 12/15/2018 15.00 GMAC LLC 6.4% 11/15/2019 18.83 GMAC LLC 6.4% 11/15/2019 21.30 GMAC LLC 6.45% 2/15/2013 25.00 GMAC LLC 6.5% 10/15/2009 74.77 GMAC LLC 6.5% 3/15/2010 50.92 GMAC LLC 6.5% 5/15/2012 41.66 GMAC LLC 6.5% 7/15/2012 23.00 GMAC LLC 6.5% 2/15/2013 21.98 GMAC LLC 6.5% 3/15/2013 21.50 GMAC LLC 6.5% 4/15/2013 25.00 GMAC LLC 6.5% 5/15/2013 20.75 GMAC LLC 6.5% 6/15/2013 33.11 GMAC LLC 6.5% 8/15/2013 18.89 GMAC LLC 6.5% 11/15/2013 25.00 GMAC LLC 6.5% 6/15/2018 18.80 GMAC LLC 6.5% 12/15/2018 13.80 GMAC LLC 6.5% 12/15/2018 17.48 GMAC LLC 6.5% 1/15/2020 20.50 GMAC LLC 6.55% 12/15/2019 19.50 GMAC LLC 6.55% 12/15/2019 18.35 GMAC LLC 6.6% 8/15/2016 20.50 GMAC LLC 6.6% 6/15/2019 17.00 GMAC LLC 6.6% 6/15/2019 17.79 GMAC LLC 6.625% 10/15/2011 29.71 GMAC LLC 6.65% 2/15/2013 33.25 GMAC LLC 6.65% 6/15/2018 20.50 GMAC LLC 6.65% 10/15/2018 19.00 GMAC LLC 6.7% 6/15/2009 76.84 GMAC LLC 6.7% 7/15/2009 75.00 GMAC LLC 6.7% 5/15/2014 18.50 GMAC LLC 6.7% 5/15/2014 22.00 GMAC LLC 6.7% 6/15/2014 20.00 GMAC LLC 6.7% 8/15/2016 19.02 GMAC LLC 6.7% 6/15/2018 18.32 GMAC LLC 6.7% 6/15/2018 18.00 GMAC LLC 6.7% 11/15/2018 20.00 GMAC LLC 6.7% 6/15/2019 20.01 GMAC LLC 6.7% 12/15/2019 20.50 GMAC LLC 6.75% 11/15/2009 68.00 GMAC LLC 6.75% 9/15/2011 30.85 GMAC LLC 6.75% 10/15/2011 35.00 GMAC LLC 6.75% 10/15/2011 27.78 GMAC LLC 6.75% 7/15/2012 22.27 GMAC LLC 6.75% 9/15/2012 25.09 GMAC LLC 6.75% 9/15/2012 26.70 GMAC LLC 6.75% 10/15/2012 23.72 GMAC LLC 6.75% 4/15/2013 24.83 GMAC LLC 6.75% 4/15/2013 28.58 GMAC LLC 6.75% 6/15/2014 19.35 GMAC LLC 6.75% 7/15/2016 16.00 GMAC LLC 6.75% 8/15/2016 19.55 GMAC LLC 6.75% 9/15/2016 21.90 GMAC LLC 6.75% 6/15/2017 17.75 GMAC LLC 6.75% 7/15/2018 21.58 GMAC LLC 6.75% 10/15/2018 18.00 GMAC LLC 6.75% 6/15/2019 17.00 GMAC LLC 6.8% 7/15/2009 65.00 GMAC LLC 6.8% 11/15/2009 68.02 GMAC LLC 6.8% 12/15/2009 60.00 GMAC LLC 6.8% 2/15/2013 25.00 GMAC LLC 6.8% 4/15/2013 20.00 GMAC LLC 6.8% 9/15/2018 16.00 GMAC LLC 6.8% 10/15/2018 20.50 GMAC LLC 6.85% 7/15/2009 63.21 GMAC LLC 6.85% 10/15/2009 64.87 GMAC LLC 6.875% 10/15/2012 23.42 GMAC LLC 6.875% 4/15/2013 22.00 GMAC LLC 6.875% 8/15/2016 21.00 GMAC LLC 6.9% 6/15/2009 68.64 GMAC LLC 6.9% 12/15/2009 74.50 GMAC LLC 6.9% 7/15/2018 19.50 GMAC LLC 6.9% 8/15/2018 21.00 GMAC LLC 6.95% 8/15/2009 57.84 GMAC LLC 6.95% 6/15/2017 17.82 GMAC LLC 7% 7/15/2009 64.23 GMAC LLC 7% 8/15/2009 76.40 GMAC LLC 7% 9/15/2009 64.00 GMAC LLC 7% 9/15/2009 74.00 GMAC LLC 7% 10/15/2009 59.58 GMAC LLC 7% 10/15/2009 58.73 GMAC LLC 7% 11/15/2009 59.00 GMAC LLC 7% 11/15/2009 72.00 GMAC LLC 7% 12/15/2009 61.00 GMAC LLC 7% 12/15/2009 58.28 GMAC LLC 7% 1/15/2010 51.55 GMAC LLC 7% 3/15/2010 54.00 GMAC LLC 7% 10/15/2011 33.00 GMAC LLC 7% 9/15/2012 28.57 GMAC LLC 7% 10/15/2012 23.81 GMAC LLC 7% 11/15/2012 26.00 GMAC LLC 7% 12/15/2012 23.50 GMAC LLC 7% 1/15/2013 23.27 GMAC LLC 7% 6/15/2017 20.00 GMAC LLC 7% 7/15/2017 20.00 GMAC LLC 7% 2/15/2018 16.64 GMAC LLC 7% 2/15/2018 16.00 GMAC LLC 7% 2/15/2018 19.83 GMAC LLC 7% 3/15/2018 21.65 GMAC LLC 7% 8/15/2018 17.14 GMAC LLC 7% 9/15/2018 20.00 GMAC LLC 7% 9/15/2021 18.00 GMAC LLC 7% 6/15/2022 17.75 GMAC LLC 7% 11/15/2023 20.50 GMAC LLC 7.05% 10/15/2009 59.50 GMAC LLC 7.05% 3/15/2018 16.00 GMAC LLC 7.05% 3/15/2018 16.72 GMAC LLC 7.05% 4/15/2018 16.59 GMAC LLC 7.1% 9/15/2012 27.54 GMAC LLC 7.1% 1/15/2013 26.16 GMAC LLC 7.1% 1/15/2013 23.00 GMAC LLC 7.125% 8/15/2009 74.58 GMAC LLC 7.125% 8/15/2012 26.00 GMAC LLC 7.125% 12/15/2012 25.35 GMAC LLC 7.125% 10/15/2017 20.01 GMAC LLC 7.15% 8/15/2009 69.00 GMAC LLC 7.15% 8/15/2010 60.00 GMAC LLC 7.15% 11/15/2012 22.50 GMAC LLC 7.15% 9/15/2018 15.50 GMAC LLC 7.2% 8/15/2009 73.64 GMAC LLC 7.2% 10/15/2017 18.03 GMAC LLC 7.25% 11/15/2009 63.00 GMAC LLC 7.25% 1/15/2010 57.61 GMAC LLC 7.25% 8/15/2012 26.25 GMAC LLC 7.25% 12/15/2012 23.57 GMAC LLC 7.25% 12/15/2012 25.00 GMAC LLC 7.25% 9/15/2017 20.35 GMAC LLC 7.25% 9/15/2017 21.25 GMAC LLC 7.25% 9/15/2017 18.82 GMAC LLC 7.25% 1/15/2018 17.29 GMAC LLC 7.25% 4/15/2018 16.44 GMAC LLC 7.25% 8/15/2018 19.00 GMAC LLC 7.25% 8/15/2018 19.60 GMAC LLC 7.25% 9/15/2018 19.66 GMAC LLC 7.25% 2/15/2025 20.00 GMAC LLC 7.3% 12/15/2017 20.50 GMAC LLC 7.3% 1/15/2018 22.00 GMAC LLC 7.35% 4/15/2018 22.61 GMAC LLC 7.375% 11/15/2016 21.18 GMAC LLC 7.375% 4/15/2018 20.00 GMAC LLC 7.4% 12/15/2017 18.09 GMAC LLC 7.5% 10/15/2012 28.40 GMAC LLC 7.5% 11/15/2016 21.55 GMAC LLC 7.5% 11/15/2017 19.00 GMAC LLC 7.5% 11/15/2017 22.51 GMAC LLC 7.5% 12/15/2017 21.00 GMAC LLC 7.55% 8/15/2010 53.00 GMAC LLC 7.625% 11/15/2012 25.09 GMAC LLC 7.7% 8/15/2010 66.00 GMAC LLC 7.75% 10/15/2012 26.50 GMAC LLC 7.75% 10/15/2017 17.99 GMAC LLC 7.85% 8/15/2010 45.50 GMAC LLC 7.875% 11/15/2012 27.00 GMAC LLC 8% 6/15/2010 43.78 GMAC LLC 8% 6/15/2010 41.00 GMAC LLC 8% 6/15/2010 52.00 GMAC LLC 8% 7/15/2010 25.00 GMAC LLC 8% 7/15/2010 67.79 GMAC LLC 8% 9/15/2010 53.00 GMAC LLC 8% 10/15/2017 18.65 GMAC LLC 8% 11/15/2017 24.17 GMAC LLC 8% 3/15/2025 19.55 GMAC LLC 8.05% 4/15/2010 53.00 GMAC LLC 8.125% 9/15/2009 86.63 GMAC LLC 8.125% 11/15/2017 17.27 GMAC LLC 8.2% 7/15/2010 44.84 GMAC LLC 8.4% 4/15/2010 48.76 GMAC LLC 8.5% 5/15/2010 73.88 GMAC LLC 8.5% 5/15/2010 54.14 GMAC LLC 8.5% 10/15/2010 64.02 GMAC LLC 8.5% 10/15/2010 48.50 GMAC LLC 8.5% 8/15/2015 28.00 GMAC LLC 8.65% 8/15/2015 24.90 GRAHAM PACKAGING 8.5% 10/15/2012 43.13 GREAT ATLA & PAC 5.125% 6/15/2011 50.00 GREAT LAKES CHEM 7% 7/15/2009 55.00 HAIGHTS CROSS OP 11.75% 8/15/2011 38.63 HANNA (MA) CO 6.52% 2/23/2010 51.25 HARRAHS OPER CO 5.375% 12/15/2013 10.96 HARRAHS OPER CO 5.5% 7/1/2010 32.81 HARRAHS OPER CO 5.625% 6/1/2015 11.69 HARRAHS OPER CO 5.75% 10/1/2017 11.25 HARRAHS OPER CO 6.5% 6/1/2016 11.63 HARRAHS OPER CO 8% 2/1/2011 23.83 HARRAHS OPER CO 10% 12/15/2015 29.08 HARRAHS OPER CO 10.75% 2/1/2016 17.75 HARRAHS OPER CO 10.75% 2/1/2016 15.38 HARRAHS OPER CO 10.75% 2/1/2018 10.00 HARRY & DAVID OP 9% 3/1/2013 15.00 HAWAIIAN TELCOM 9.75% 5/1/2013 4.88 HAWKER BEECHCRAF 8.5% 4/1/2015 20.50 HAWKER BEECHCRAF 9.75% 4/1/2017 15.00 HEADWATERS INC 2.5% 2/1/2014 23.00 HEADWATERS INC 2.875% 6/1/2016 10.00 HERTZ CORP 6.35% 6/15/2010 70.00 HERTZ CORP 7.4% 3/1/2011 40.00 HERTZ CORP 9% 11/1/2009 85.00 HERTZ CORP 10.5% 1/1/2016 34.00 HEXION US/NOVA 9.75% 11/15/2014 15.00 HILTON HOTELS 7.5% 12/15/2017 12.92 HILTON HOTELS 8.25% 2/15/2011 20.00 HINES NURSERIES 10.25% 10/1/2011 14.50 HOECHST C-TENDER 7.125% 3/15/2009 99.00 HOUSEHOLD FIN CO 4.75% 5/15/2009 99.50 HUMAN GENOME 2.25% 10/15/2011 39.25 HUTCHINSON TECH 3.25% 1/15/2026 23.00 IDEARC INC 8% 11/15/2016 2.20 INCYTE CORP 3.5% 2/15/2011 48.00 INCYTE CORP LTD 3.5% 2/15/2011 51.06 INN OF THE MOUNT 12% 11/15/2010 10.63 INTCOMEX INC 11.75% 1/15/2011 33.00 INTL LEASE FIN 4.375% 11/1/2009 83.25 INTL LEASE FIN 4.75% 7/1/2009 84.00 INTL LEASE FIN 4.875% 9/1/2010 62.50 INTL LEASE FIN 5% 4/15/2010 74.00 INTL LEASE FIN 5.875% 5/1/2013 53.00 ISTAR FINANCIAL 5.125% 4/1/2011 41.25 ISTAR FINANCIAL 5.15% 3/1/2012 31.29 ISTAR FINANCIAL 5.375% 4/15/2010 59.00 ISTAR FINANCIAL 5.5% 6/15/2012 31.50 ISTAR FINANCIAL 5.65% 9/15/2011 37.25 ISTAR FINANCIAL 5.7% 3/1/2014 27.00 ISTAR FINANCIAL 5.8% 3/15/2011 40.25 ISTAR FINANCIAL 5.95% 10/15/2013 30.90 ISTAR FINANCIAL 6% 12/15/2010 53.00 ISTAR FINANCIAL 6.5% 12/15/2013 27.00 ISTAR FINANCIAL 8.625% 6/1/2013 29.25 JAZZ TECHNOLOGIE 8% 12/31/2011 22.25 JEFFERSON SMURFI 7.5% 6/1/2013 5.25 JEFFERSON SMURFI 8.25% 10/1/2012 8.19 K HOVNANIAN ENTR 6.25% 1/15/2015 24.00 K HOVNANIAN ENTR 6.375% 12/15/2014 26.50 K HOVNANIAN ENTR 6.5% 1/15/2014 21.75 K HOVNANIAN ENTR 7.5% 5/15/2016 24.00 K HOVNANIAN ENTR 7.75% 5/15/2013 25.52 K HOVNANIAN ENTR 8% 4/1/2012 38.00 K HOVNANIAN ENTR 8.625% 1/15/2017 25.03 K HOVNANIAN ENTR 8.875% 4/1/2012 30.15 KAISER ALUMINUM 12.75% 2/1/2003 4.00 KELLWOOD CO 7.625% 10/15/2017 5.00 KEMET CORP 2.25% 11/15/2026 14.50 KEYSTONE AUTO OP 9.75% 11/1/2013 20.75 KIMBALL HILL INC 10.5% 12/15/2012 0.00 KKR FINANCIAL 7% 7/15/2012 23.50 KNIGHT RIDDER 4.625% 11/1/2014 12.00 KNIGHT RIDDER 5.75% 9/1/2017 12.00 KNIGHT RIDDER 6.875% 3/15/2029 7.00 KNIGHT RIDDER 7.125% 6/1/2011 13.00 KNIGHT RIDDER 7.15% 11/1/2027 14.25 KNIGHT RIDDER 9.875% 4/15/2009 90.00 KRATON POLYMERS 8.125% 1/15/2014 35.03 LANDAMERICA 3.125% 11/15/2033 10.00 LANDAMERICA 3.25% 5/15/2034 14.50 LANDRY'S RESTAUR 9.5% 12/15/2014 97.18 LAZYDAYS RV 11.75% 5/15/2012 4.90 LAZYDAYS RV 11.75% 5/15/2012 31.88 LEAR CORP 5.75% 8/1/2014 22.59 LEAR CORP 8.5% 12/1/2013 16.00 LEAR CORP 8.75% 12/1/2016 16.50 LECROY CORP 4% 10/15/2026 38.75 LEHMAN BROS HLDG 1.5% 3/23/2012 9.50 LEHMAN BROS HLDG 3.95% 11/10/2009 12.50 LEHMAN BROS HLDG 4% 4/16/2019 5.75 LEHMAN BROS HLDG 4.25% 1/27/2010 14.00 LEHMAN BROS HLDG 4.375% 11/30/2010 10.00 LEHMAN BROS HLDG 4.5% 7/26/2010 13.00 LEHMAN BROS HLDG 4.5% 8/3/2011 5.00 LEHMAN BROS HLDG 4.7% 3/6/2013 8.80 LEHMAN BROS HLDG 4.8% 2/27/2013 5.50 LEHMAN BROS HLDG 4.8% 3/13/2014 14.00 LEHMAN BROS HLDG 4.8% 6/24/2023 7.50 LEHMAN BROS HLDG 5% 1/14/2011 12.50 LEHMAN BROS HLDG 5% 1/22/2013 5.06 LEHMAN BROS HLDG 5% 2/11/2013 7.12 LEHMAN BROS HLDG 5% 3/27/2013 5.25 LEHMAN BROS HLDG 5% 6/26/2015 4.25 LEHMAN BROS HLDG 5% 8/5/2015 7.13 LEHMAN BROS HLDG 5% 12/18/2015 4.10 LEHMAN BROS HLDG 5% 5/28/2023 7.51 LEHMAN BROS HLDG 5% 5/30/2023 7.13 LEHMAN BROS HLDG 5% 6/10/2023 7.00 LEHMAN BROS HLDG 5% 6/17/2023 6.50 LEHMAN BROS HLDG 5.1% 1/28/2013 8.00 LEHMAN BROS HLDG 5.1% 2/15/2020 7.75 LEHMAN BROS HLDG 5.15% 2/4/2015 10.15 LEHMAN BROS HLDG 5.2% 5/13/2020 4.67 LEHMAN BROS HLDG 5.25% 2/6/2012 13.50 LEHMAN BROS HLDG 5.25% 2/11/2015 4.00 LEHMAN BROS HLDG 5.25% 3/8/2020 7.00 LEHMAN BROS HLDG 5.25% 5/20/2023 5.50 LEHMAN BROS HLDG 5.35% 2/25/2018 7.00 LEHMAN BROS HLDG 5.35% 3/13/2020 5.25 LEHMAN BROS HLDG 5.35% 6/14/2030 7.25 LEHMAN BROS HLDG 5.375% 5/6/2023 4.02 LEHMAN BROS HLDG 5.4% 3/6/2020 5.00 LEHMAN BROS HLDG 5.4% 3/20/2020 8.56 LEHMAN BROS HLDG 5.4% 3/30/2029 7.50 LEHMAN BROS HLDG 5.4% 6/21/2030 5.00 LEHMAN BROS HLDG 5.45% 3/15/2025 7.25 LEHMAN BROS HLDG 5.45% 4/6/2029 7.00 LEHMAN BROS HLDG 5.45% 2/22/2030 9.00 LEHMAN BROS HLDG 5.45% 7/19/2030 7.13 LEHMAN BROS HLDG 5.45% 9/20/2030 7.13 LEHMAN BROS HLDG 5.5% 4/4/2016 12.00 LEHMAN BROS HLDG 5.5% 2/4/2018 2.72 LEHMAN BROS HLDG 5.5% 2/19/2018 8.25 LEHMAN BROS HLDG 5.5% 11/4/2018 7.06 LEHMAN BROS HLDG 5.5% 2/27/2020 7.50 LEHMAN BROS HLDG 5.5% 8/19/2020 7.50 LEHMAN BROS HLDG 5.5% 3/14/2023 4.00 LEHMAN BROS HLDG 5.5% 4/8/2023 7.25 LEHMAN BROS HLDG 5.5% 4/15/2023 3.70 LEHMAN BROS HLDG 5.5% 4/23/2023 5.00 LEHMAN BROS HLDG 5.5% 8/5/2023 7.00 LEHMAN BROS HLDG 5.5% 10/7/2023 3.90 LEHMAN BROS HLDG 5.5% 1/27/2029 4.00 LEHMAN BROS HLDG 5.5% 2/3/2029 7.13 LEHMAN BROS HLDG 5.5% 8/2/2030 7.90 LEHMAN BROS HLDG 5.55% 2/11/2018 8.10 LEHMAN BROS HLDG 5.55% 3/9/2029 4.15 LEHMAN BROS HLDG 5.55% 1/25/2030 7.13 LEHMAN BROS HLDG 5.55% 9/27/2030 8.00 LEHMAN BROS HLDG 5.55% 12/31/2034 7.51 LEHMAN BROS HLDG 5.6% 1/22/2018 6.00 LEHMAN BROS HLDG 5.6% 2/17/2029 4.88 LEHMAN BROS HLDG 5.6% 2/24/2029 7.13 LEHMAN BROS HLDG 5.6% 3/2/2029 3.70 LEHMAN BROS HLDG 5.6% 2/25/2030 7.13 LEHMAN BROS HLDG 5.6% 5/3/2030 9.20 LEHMAN BROS HLDG 5.625% 1/24/2013 14.00 LEHMAN BROS HLDG 5.625% 3/15/2030 1.65 LEHMAN BROS HLDG 5.65% 11/23/2029 7.13 LEHMAN BROS HLDG 5.65% 8/16/2030 6.50 LEHMAN BROS HLDG 5.65% 12/31/2034 7.13 LEHMAN BROS HLDG 5.7% 1/28/2018 7.41 LEHMAN BROS HLDG 5.7% 2/10/2029 5.47 LEHMAN BROS HLDG 5.7% 4/13/2029 6.50 LEHMAN BROS HLDG 5.7% 9/7/2029 7.13 LEHMAN BROS HLDG 5.7% 12/14/2029 7.25 LEHMAN BROS HLDG 5.75% 4/25/2011 12.50 LEHMAN BROS HLDG 5.75% 7/18/2011 14.50 LEHMAN BROS HLDG 5.75% 5/17/2013 12.50 LEHMAN BROS HLDG 5.75% 3/27/2023 9.05 LEHMAN BROS HLDG 5.75% 9/16/2023 11.39 LEHMAN BROS HLDG 5.75% 10/15/2023 7.46 LEHMAN BROS HLDG 5.75% 10/21/2023 8.00 LEHMAN BROS HLDG 5.75% 11/12/2023 4.50 LEHMAN BROS HLDG 5.75% 11/25/2023 9.00 LEHMAN BROS HLDG 5.75% 12/16/2028 6.50 LEHMAN BROS HLDG 5.75% 12/23/2028 7.56 LEHMAN BROS HLDG 5.75% 8/24/2029 7.13 LEHMAN BROS HLDG 5.75% 9/14/2029 8.19 LEHMAN BROS HLDG 5.75% 10/12/2029 1.83 LEHMAN BROS HLDG 5.75% 3/29/2030 8.10 LEHMAN BROS HLDG 5.8% 9/3/2020 4.33 LEHMAN BROS HLDG 5.8% 10/25/2030 7.81 LEHMAN BROS HLDG 5.85% 11/8/2030 3.96 LEHMAN BROS HLDG 5.875% 11/15/2017 12.00 LEHMAN BROS HLDG 5.9% 5/4/2029 7.00 LEHMAN BROS HLDG 5.9% 2/7/2031 2.38 LEHMAN BROS HLDG 5.95% 12/20/2030 5.00 LEHMAN BROS HLDG 6% 7/19/2012 12.50 LEHMAN BROS HLDG 6% 1/22/2020 7.16 LEHMAN BROS HLDG 6% 2/12/2020 7.20 LEHMAN BROS HLDG 6% 1/29/2021 7.20 LEHMAN BROS HLDG 6% 10/23/2028 8.00 LEHMAN BROS HLDG 6% 11/18/2028 9.00 LEHMAN BROS HLDG 6% 5/11/2029 7.13 LEHMAN BROS HLDG 6% 7/20/2029 7.13 LEHMAN BROS HLDG 6% 4/30/2034 6.50 LEHMAN BROS HLDG 6% 7/30/2034 7.13 LEHMAN BROS HLDG 6% 2/21/2036 6.50 LEHMAN BROS HLDG 6% 2/24/2036 7.13 LEHMAN BROS HLDG 6% 2/12/2037 7.13 LEHMAN BROS HLDG 6.05% 6/29/2029 1.12 LEHMAN BROS HLDG 6.1% 8/12/2023 9.00 LEHMAN BROS HLDG 6.15% 4/11/2031 7.25 LEHMAN BROS HLDG 6.2% 9/26/2014 14.50 LEHMAN BROS HLDG 6.2% 6/15/2027 3.77 LEHMAN BROS HLDG 6.2% 5/25/2029 1.89 LEHMAN BROS HLDG 6.25% 2/5/2021 7.00 LEHMAN BROS HLDG 6.25% 2/22/2023 7.00 LEHMAN BROS HLDG 6.3% 3/27/2037 8.25 LEHMAN BROS HLDG 6.4% 10/11/2022 6.50 LEHMAN BROS HLDG 6.5% 2/28/2023 7.51 LEHMAN BROS HLDG 6.5% 3/6/2023 7.20 LEHMAN BROS HLDG 6.5% 10/18/2027 5.98 LEHMAN BROS HLDG 6.5% 10/25/2027 9.00 LEHMAN BROS HLDG 6.5% 1/17/2033 8.04 LEHMAN BROS HLDG 6.5% 12/22/2036 7.50 LEHMAN BROS HLDG 6.5% 2/13/2037 7.00 LEHMAN BROS HLDG 6.5% 6/21/2037 7.25 LEHMAN BROS HLDG 6.5% 7/13/2037 7.38 LEHMAN BROS HLDG 6.6% 10/3/2022 8.01 LEHMAN BROS HLDG 6.625% 1/18/2012 13.00 LEHMAN BROS HLDG 6.625% 7/27/2027 12.50 LEHMAN BROS HLDG 6.75% 7/1/2022 2.50 LEHMAN BROS HLDG 6.75% 11/22/2027 9.00 LEHMAN BROS HLDG 6.75% 3/11/2033 8.71 LEHMAN BROS HLDG 6.75% 10/26/2037 3.68 LEHMAN BROS HLDG 6.8% 9/7/2032 6.38 LEHMAN BROS HLDG 6.85% 8/16/2032 8.25 LEHMAN BROS HLDG 6.85% 8/23/2032 7.25 LEHMAN BROS HLDG 6.875% 5/2/2018 14.25 LEHMAN BROS HLDG 6.875% 7/17/2037 0.01 LEHMAN BROS HLDG 6.9% 9/1/2032 5.00 LEHMAN BROS HLDG 7% 5/12/2023 7.50 LEHMAN BROS HLDG 7% 9/27/2027 12.00 LEHMAN BROS HLDG 7% 10/4/2032 7.00 LEHMAN BROS HLDG 7% 7/27/2037 9.10 LEHMAN BROS HLDG 7% 9/28/2037 11.00 LEHMAN BROS HLDG 7% 11/16/2037 6.60 LEHMAN BROS HLDG 7% 12/28/2037 8.09 LEHMAN BROS HLDG 7% 1/31/2038 7.00 LEHMAN BROS HLDG 7% 2/1/2038 7.75 LEHMAN BROS HLDG 7% 2/7/2038 10.13 LEHMAN BROS HLDG 7% 2/8/2038 4.00 LEHMAN BROS HLDG 7% 4/22/2038 7.00 LEHMAN BROS HLDG 7.05% 2/27/2038 9.00 LEHMAN BROS HLDG 7.1% 3/25/2038 4.00 LEHMAN BROS HLDG 7.25% 2/27/2038 8.25 LEHMAN BROS HLDG 7.25% 4/29/2038 4.00 LEHMAN BROS HLDG 7.35% 5/6/2038 8.00 LEHMAN BROS HLDG 7.73% 10/15/2023 9.10 LEHMAN BROS HLDG 7.875% 11/1/2009 12.50 LEHMAN BROS HLDG 7.875% 8/15/2010 13.00 LEHMAN BROS HLDG 8.05% 1/15/2019 8.06 LEHMAN BROS HLDG 8.5% 8/1/2015 5.65 LEHMAN BROS HLDG 8.5% 6/15/2022 8.09 LEHMAN BROS HLDG 8.75% 2/6/2023 4.00 LEHMAN BROS HLDG 8.8% 3/1/2015 13.00 LEHMAN BROS HLDG 8.92% 2/16/2017 10.00 LEHMAN BROS HLDG 9.5% 12/28/2022 8.00 LEHMAN BROS HLDG 9.5% 1/30/2023 6.00 LEHMAN BROS HLDG 9.5% 2/27/2023 4.00 LEHMAN BROS HLDG 10% 3/13/2023 7.88 LEHMAN BROS HLDG 10.375% 5/24/2024 6.16 LEHMAN BROS HLDG 11% 10/25/2017 5.00 LEHMAN BROS HLDG 11% 6/22/2022 7.55 LEHMAN BROS HLDG 11.5% 9/26/2022 6.60 LEHMAN BROS HLDG 12.12% 9/11/2009 8.63 LEHMAN BROS HLDG 18% 7/14/2023 7.13 LEVEL 3 COMM INC 5.25% 12/15/2011 50.03 LEVEL 3 COMM INC 10% 5/1/2011 66.50 LEVEL 3 COMM INC 11.5% 3/1/2010 50.00 LIFECARE HOLDING 9.25% 8/15/2013 42.00 LITHIA MOTORS 2.875% 5/1/2014 89.50 LOCAL INSIGHT 11% 12/1/2017 21.88 LOEHMANNS CAP 12% 10/1/2011 45.38 LOEHMANNS CAP 13% 10/1/2011 46.38 M/I HOMES INC 6.875% 4/1/2012 50.00 MAGMA DESIGN 2% 5/15/2010 62.50 MAGNA ENTERTAINM 8.55% 6/15/2010 20.50 MAJESTIC STAR 9.5% 10/15/2010 25.06 MAJESTIC STAR 9.75% 1/15/2011 3.00 MANDALAY RESORT 6.375% 12/15/2011 39.50 MANDALAY RESORT 6.5% 7/31/2009 66.63 MANDALAY RESORTS 9.375% 2/15/2010 27.00 MASHANTUCKET PEQ 8.5% 11/15/2015 21.88 MASONITE CORP 11% 4/6/2015 2.75 MERCER INTL INC 9.25% 2/15/2013 35.00 MERISANT CO 9.5% 7/15/2013 3.00 MERIX CORP 4% 5/15/2013 24.50 MERRILL LYNCH 12% 3/26/2010 21.07 METALDYNE CORP 11% 6/15/2012 11.29 MGM MIRAGE 6% 10/1/2009 57.50 MGM MIRAGE 6.75% 9/1/2012 42.50 MGM MIRAGE 6.75% 4/1/2013 38.50 MGM MIRAGE 6.75% 4/1/2013 25.25 MGM MIRAGE 8.375% 2/1/2011 19.00 MGM MIRAGE 8.5% 9/15/2010 46.36 MICHAELS STORES 11.375% 11/1/2016 30.00 MILLENNIUM AMER 7.625% 11/15/2026 4.00 MOHEGAN TRIBAL 6.375% 7/15/2009 74.75 MOHEGAN TRIBAL 6.875% 2/15/2015 24.50 MOHEGAN TRIBAL 7.125% 8/15/2014 21.00 MOHEGAN TRIBAL 8% 4/1/2012 25.00 MOHEGAN TRIBAL 8.375% 7/1/2011 32.13 MOMENTIVE PERFOR 9.75% 12/1/2014 34.00 MOMENTIVE PERFOR 11.5% 12/1/2016 17.00 MORRIS PUBLISH 7% 8/1/2013 6.00 MRS FIELDS 10% 10/24/2014 25.00 MTR GAMING GROUP 9% 6/1/2012 50.25 MTR GAMING GROUP 9.75% 4/1/2010 71.38 NATL FINANCIAL 0.75% 2/1/2012 34.44 NCI BLDG SYSTEMS 2.125% 11/15/2024 66.50 NCO GROUP INC 11.875% 11/15/2014 10.00 NEENAH FOUNDRY 9.5% 1/1/2017 26.00 NEFF CORP 10% 6/1/2015 20.13 NETWORK COMMUNIC 10.75% 12/1/2013 15.00 NEW PLAN EXCEL 7.5% 7/30/2029 15.00 NEW PLAN REALTY 6.9% 2/15/2028 10.33 NEW PLAN REALTY 6.9% 2/15/2028 9.00 NEW PLAN REALTY 7.65% 11/2/2026 16.00 NEW PLAN REALTY 7.97% 8/14/2026 17.00 NEWARK GROUP INC 9.75% 3/15/2014 15.00 NEWPAGE CORP 10% 5/1/2012 25.00 NEWPAGE CORP 12% 5/1/2013 13.06 NORTEK INC 8.5% 9/1/2014 14.00 NORTEK INC 10% 12/1/2013 35.00 NORTH ATL TRADNG 9.25% 3/1/2012 19.50 NORTHERN TEL CAP 7.875% 6/15/2026 10.00 NTK HOLDINGS INC 0% 3/1/2014 7.00 NUVEEN INVEST 5% 9/15/2010 51.75 NUVEEN INVEST 5.5% 9/15/2015 11.70 NUVEEN INVESTM 10.5% 11/15/2015 21.63 OLD EVANGELINE 13% 3/1/2010 76.25 OSCIENT PHARM 3.5% 4/15/2011 12.75 OSI RESTAURANT 10% 6/15/2015 24.75 OUTBOARD MARINE 9.125% 4/15/2017 3.00 PALM HARBOR 3.25% 5/15/2024 25.00 PARK PLACE ENT 7.5% 9/1/2009 60.25 PARK PLACE ENT 7.875% 3/15/2010 34.00 PARK PLACE ENT 8.125% 5/15/2011 25.25 PEGASUS SOLUTION 10.5% 4/15/2015 24.63 PHH CORP 7.125% 3/1/2013 37.31 PILGRIMS PRIDE 9.25% 11/15/2013 20.25 PINNACLE AIRLINE 3.25% 2/15/2025 74.50 PLIANT CORP 11.625% 6/15/2009 40.25 PLY GEM INDS 9% 2/15/2012 17.50 PLY GEM INDS 11.75% 6/15/2013 41.50 POLYONE CORP 8.875% 5/1/2012 40.00 POPE & TALBOT 8.375% 6/1/2013 0.60 POWERWAVE TECH 1.875% 11/15/2024 21.00 POWERWAVE TECH 3.875% 10/1/2027 17.00 PREGIS CORP 12.375% 10/15/2013 39.38 PRIMUS TELECOM 3.75% 9/15/2010 3.88 PRIMUS TELECOM 8% 1/15/2014 6.50 PRIMUS TELECOMM 14.25% 5/20/2011 34.25 QUALITY DISTRIBU 9% 11/15/2010 39.00 QUANTUM CORP 4.375% 8/1/2010 45.00 RADIAN GROUP 7.75% 6/1/2011 45.00 RADIO ONE INC 6.375% 2/15/2013 18.00 RADIO ONE INC 8.875% 7/1/2011 32.00 RAFAELLA APPAREL 11.25% 6/15/2011 14.00 RATHGIBSON INC 11.25% 2/15/2014 18.88 READER'S DIGEST 9% 2/15/2017 10.13 REAL MEX RESTAUR 10% 4/1/2010 75.25 REALOGY CORP 10.5% 4/15/2014 20.00 REALOGY CORP 12.375% 4/15/2015 11.75 RENTECH INC 4% 4/15/2013 19.50 RESIDENTIAL CAP 8% 2/22/2011 33.00 RESIDENTIAL CAP 8.5% 6/1/2012 18.75 RESIDENTIAL CAP 8.5% 4/17/2013 14.10 RESIDENTIAL CAP 8.875% 6/30/2015 45.00 RESIDENTIAL CAP 8.375% 6/30/2010 39.97 RESIDENTIAL CAP 8.5% 5/15/2010 69.25 RESTAURANT CO 10% 10/1/2013 40.38 RH DONNELLEY 6.875% 1/15/2013 7.06 RH DONNELLEY 6.875% 1/15/2013 4.47 RH DONNELLEY 6.875% 1/15/2013 4.56 RH DONNELLEY 8.875% 1/15/2016 6.75 RH DONNELLEY 8.875% 10/15/2017 6.56 RH DONNELLEY INC 11.75% 5/15/2015 13.88 RITE AID CORP 6.875% 8/15/2013 14.00 RITE AID CORP 6.875% 12/15/2028 13.50 RITE AID CORP 7.7% 2/15/2027 15.05 RITE AID CORP 8.125% 5/1/2010 20.08 RITE AID CORP 8.5% 5/15/2015 31.50 RITE AID CORP 8.625% 3/1/2015 22.75 RITE AID CORP 9.25% 6/1/2013 9.75 RITE AID CORP 9.375% 12/15/2015 21.27 RITE AID CORP 9.5% 6/15/2017 20.63 RIVER ROCK ENT 9.75% 11/1/2011 48.00 RJ TOWER CORP 12% 6/1/2013 1.00 ROUSE CO LP/TRC 6.75% 5/1/2013 28.75 ROUSE COMPANY 5.375% 11/26/2013 27.00 ROUSE COMPANY 7.2% 9/15/2012 28.13 SABRE HOLDINGS 7.35% 8/1/2011 42.13 SALEM COMM HLDG 7.75% 12/15/2010 48.38 SANMINA-SCI CORP 6.75% 3/1/2013 40.00 SBARRO INC 10.375% 2/1/2015 28.75 SEQUA CORP 11.75% 12/1/2015 14.00 SERVICEMASTER CO 7.1% 3/1/2018 19.80 SIMMONS CO 7.875% 1/15/2014 14.00 SINCLAIR BROAD 3% 5/15/2027 59.00 SINCLAIR BROAD 6% 9/15/2012 31.70 SIRIUS SATELLITE 3.25% 10/15/2011 40.68 SIRIUS SATELLITE 9.625% 8/1/2013 45.00 SIX FLAGS INC 4.5% 5/15/2015 15.25 SIX FLAGS INC 8.875% 2/1/2010 26.86 SIX FLAGS INC 9.625% 6/1/2014 14.00 SIX FLAGS INC 9.75% 4/15/2013 13.00 SMURFIT-STONE 8% 3/15/2017 7.81 SNOQUALMIE 9.125% 2/1/2015 27.63 SONIC AUTOMOTIVE 8.625% 8/15/2013 25.00 SPACEHAB INC 5.5% 10/15/2010 51.10 SPECTRUM BRANDS 7.375% 2/1/2015 21.50 SPECTRUM BRANDS 12.5% 10/2/2013 21.00 SPHERIS INC 11% 12/15/2012 31.50 STALLION OILFIEL 9.75% 2/1/2015 7.63 STANDARD MTR 6.75% 7/15/2009 76.00 STANDRD PAC CORP 5.125% 4/1/2009 99.50 STANLEY-MARTIN 9.75% 8/15/2015 29.75 STATION CASINOS 6% 4/1/2012 26.00 STATION CASINOS 6.5% 2/1/2014 2.20 STATION CASINOS 6.625% 3/15/2018 5.25 STATION CASINOS 6.875% 3/1/2016 2.00 STONE CONTAINER 8.375% 7/1/2012 7.75 STRATEGIC HOTEL 3.5% 4/1/2012 35.00 SWIFT TRANS CO 12.5% 5/15/2017 11.63 TEKNI-PLEX INC 12.75% 6/15/2010 73.50 TENNECO AUTOMOT 8.625% 11/15/2014 13.50 TENNECO INC 8.125% 11/15/2015 17.00 TERPHANE HLDING 12.5% 6/15/2009 85.63 TERPHANE HLDING 12.5% 6/15/2009 85.63 TETON ENERGY COR 10.75% 6/18/2013 36.05 THORNBURG MTG 8% 5/15/2013 18.00 TIMES MIRROR CO 6.61% 9/15/2027 2.50 TIMES MIRROR CO 7.25% 3/1/2013 3.25 TIMES MIRROR CO 7.25% 11/15/2096 4.25 TIMES MIRROR CO 7.5% 7/1/2023 0.70 TOUSA INC 7.5% 3/15/2011 1.00 TOUSA INC 9% 7/1/2010 2.00 TOYS R US 7.625% 8/1/2011 33.55 TOYS R US 7.875% 4/15/2013 33.63 TOYS R US DEL 8.75% 9/1/2021 15.00 TRANS-LUX CORP 8.25% 3/1/2012 35.20 TRANSMERIDIAN EX 12% 12/15/2010 6.50 TRAVELPORT LLC 11.875% 9/1/2016 30.00 TRIBUNE CO 4.875% 8/15/2010 4.50 TRIBUNE CO 5.25% 8/15/2015 3.50 TRIBUNE CO 5.67% 12/8/2008 3.50 TRICO MARINE 3% 1/15/2027 14.00 TRICO MARINE SER 6.5% 5/15/2028 32.27 TRIMAS CORP 9.875% 6/15/2012 45.75 TRONOX WORLDWIDE 9.5% 12/1/2012 13.00 TRUE TEMPER 8.375% 9/15/2011 37.25 TRUMP ENTERTNMNT 8.5% 6/1/2015 15.00 TRW AUTOMOTIVE 7% 3/15/2014 28.67 TUBE CITY IMS 9.75% 2/1/2015 11.50 UAL CORP 4.5% 6/30/2021 38.00 UAL CORP 5% 2/1/2021 41.00 UNISYS CORP 6.875% 3/15/2010 41.00 UNISYS CORP 8% 10/15/2012 22.12 UNISYS CORP 8.5% 10/15/2015 24.75 UNISYS CORP 12.5% 1/15/2016 25.06 UNITED COMPONENT 9.375% 6/15/2013 39.50 UNIV CITY FL HLD 8.375% 5/1/2010 70.00 UNIVERSAL FOODS 6.5% 4/1/2009 91.50 UNIVISION COMM 7.85% 7/15/2011 56.00 US CONCRETE INC 8.375% 4/1/2014 35.00 US LEASING INTL 6% 9/6/2011 12.52 US SHIPPING PART 13% 8/15/2014 34.50 USFREIGHTWAYS 8.5% 4/15/2010 50.50 VENOCO INC 8.75% 12/15/2011 52.50 VERASUN ENERGY 9.375% 6/1/2017 3.06 VERENIUM CORP 5.5% 4/1/2027 25.50 VERSO PAPER 9.125% 8/1/2014 32.00 VERSO PAPER 11.375% 8/1/2016 18.00 VICORP RESTAURNT 10.5% 4/15/2011 3.00 VISTEON CORP 7% 3/10/2014 5.56 VISTEON CORP 12.25% 12/31/2016 4.88 VITESSE SEMICOND 1.5% 10/1/2024 50.03 VOUGHT AIRCRAFT 8% 7/15/2011 48.94 WASH MUT BANK NV 5.55% 6/16/2010 24.00 WASH MUT BANK NV 5.65% 8/15/2014 0.01 WASH MUTUAL INC 8.25% 4/1/2010 61.75 WATERFORD GAMING 8.625% 9/15/2014 27.13 WCI COMMUNITIES 4% 8/5/2023 2.10 WCI COMMUNITIES 6.625% 3/15/2015 3.19 WILLIAM LYONS 7.5% 2/15/2014 11.00 WILLIAM LYONS 7.625% 12/15/2012 17.00 WILLIAM LYONS 10.75% 4/1/2013 10.00 WIMAR OP LLC/FIN 9.625% 12/15/2014 1.76 WOLVERINE TUBE 10.5% 4/1/2009 81.00 XM SATELLITE 9.75% 5/1/2014 29.84 XM SATELLITE 10% 12/31/2009 38.00 XM SATELLITE 13% 8/1/2013 47.29 XM SATELLITE 7% 12/1/2014 22.91 ********* 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. The Sunday TCR delivers securitization rating news from the week then-ending. 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. Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. 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 ***