TCR_Public/130106.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Sunday, January 6, 2013, Vol. 17, No. 5

                            Headlines

AAMES MORTGAGE 2004-1: Moody's Cuts Rating on M7 Tranche to 'C'
ANTARCTICA CFO: S&P Cuts Rating on Class D Certificates to 'CC'
APIDOS QUATTRO: Moody's Raises Rating on Class E Notes to 'Ba2'
HALCYON LOAN II: S&P Affirms 'BB' Rating on Class D Notes
JP MORGAN 2012-LC9: Moody's Rates Class G Securities 'B2'

LAKESIDE RE III: S&P Gives 'B+' Rating on $270MM Notes Due 2016
LANDMARK V: S&P Affirms 'CCC+' Rating on Class B-2L Notes
MOUNTAIN CAPITAL III: S&P Affirms 'BB-' Rating on Class B-1L Notes
NEWCASTLE CDO X: S&P Withdraws 'CC' Rating on Class F Notes
NEWSTAR 2006-1: S&P Raises Rating on Class E Notes to 'CCC+'

PHOENIX CLO III: S&P Raises Rating on Class E Notes to 'B+'

* S&P Raises Ratings on 36 Tranches From 33 CDO Transactions

                            *********

AAMES MORTGAGE 2004-1: Moody's Cuts Rating on M7 Tranche to 'C'
---------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of four
tranches from two RMBS transactions backed by Subprime loans
issued by various trusts from 2004.

Ratings Rationale

The actions are a result of the recent performance review of
Subprime pools originated before 2005 and reflect Moody's updated
loss expectations on these pools. The rating actions take into
consideration the current interest shortfalls associated with
Class M4 and Class M5 from Aames Mortgage Investment Trust 2004-1
and Class M2 from Fieldstone Mortgage Investment Trust 2004-5.
These tranches have high enhancement but have been incurring
interest shortfalls that will not be reimbursed. The servicing on
these deals was transferred to Ocwen Loan Servicing in Q3 2011.
Following servicing transfer there have been period(s) of
insufficient funds to pay interest owing to advance recoupment.
Given the transaction structure Moody's does not expect the
interest shortfalls to be recovered.

The methodologies used in these ratings were "Moody's Approach to
Rating US Residential Mortgage-Backed Securities" published in
December 2008 and "Pre-2005 US RMBS Surveillance Methodology"
published in January 2012. The approach to rating tranches with
principal and/or interest shortfall is described in "Moody's
Approach to Rating Structured Finance Securities in Default"
published in November 2009.

The above mentioned approach "Pre-2005 US RMBS Surveillance
Methodology" is adjusted slightly when estimating losses on pools
left with a small number of loans to account for the volatile
nature of small pools. Even if a few loans in a small pool become
delinquent, there could be a large increase in the overall pool
delinquency level due to the concentration risk. To project losses
on pools with fewer than 100 loans, Moody's first estimates a
"baseline" average rate of new delinquencies for the pool that is
dependent on the vintage of loan origination (11% for all vintages
2004 and prior). The baseline rates are higher than the average
rate of new delinquencies for larger pools for the respective
vintages.

Once the baseline rate is set, further adjustments are made based
on 1) the number of loans remaining in the pool and 2) the level
of current delinquencies in the pool. The volatility of pool
performance increases as the number of loans remaining in the pool
decreases. Once the loan count in a pool falls below 75, the rate
of delinquency is increased by 1% for every loan less than 75. For
example, for a pool with 74 loans from the 2004 vintage, the
adjusted rate of new delinquency would be 11.11%. In addition, if
current delinquency levels in a small pool is low, future
delinquencies are expected to reflect this trend. To account for
that, the rate calculated above is multiplied by a factor ranging
from 0.85 to 2.25 for current delinquencies ranging from less than
10% to greater than 50% respectively. Delinquencies for subsequent
years and ultimate expected losses are projected using the
approach described in the methodology publication listed above.

When assigning the final ratings to senior bonds, in addition to
the methodologies described above, Moody's considered the
volatility of the projected losses and timeline of the expected
defaults. For bonds backed by small pools, Moody's also considered
the current pipeline composition as well as any specific loss
allocation rules that could preserve or deplete the
overcollateralization available for the senior bonds at different
pace.

The above methodology only applies to pools with at least 40 loans
and a pool factor of greater than 5%. Moody's may withdraw its
rating when the pool factor drops below 5% and the number of loans
in the pool declines to 40 loans or lower unless specific
structural features allow for a monitoring of the transaction
(such as a credit enhancement floor).

The primary sources of assumption uncertainty are Moody's central
macroeconomic forecast and performance volatility as a result of
servicer-related activity such as modifications. The unemployment
rate fell from 8.9% in October 2011 to 7.7% in November 2012.
Moody's forecasts a unemployment central range of 7.5 to 8.5 for
the 2013 year. Moody's expects housing prices to gradually rise
towards the end of 2013. Performance of RMBS continues to remain
highly dependent on servicer activity such as modification-related
principal forgiveness and interest rate reductions. Any change
resulting from servicing transfers or other policy or regulatory
change can also impact the performance of these transactions.

Complete rating actions are as follows:

Issuer: Aames Mortgage Investment Trust 2004-1

Cl. M4, Downgraded to B1 (sf); previously on Jul 27, 2012
Downgraded to Aa3 (sf) and Placed Under Review for Possible
Downgrade

Cl. M5, Downgraded to B2 (sf); previously on Jul 27, 2012
Downgraded to A2 (sf) and Remained On Review for Possible
Downgrade

Cl. M7, Downgraded to C (sf); previously on Mar 17, 2011
Downgraded to Ca (sf)

Issuer: Fieldstone Mortgage Investment Trust 2004-5

Cl. M2, Downgraded to B1 (sf); previously on Jul 27, 2012 Baa2
(sf) Placed Under Review Direction Uncertain

A list of these actions including CUSIP identifiers may be found
at http://moodys.com/viewresearchdoc.aspx?docid=PBS_SF311954

A list of updated estimated pool losses, sensitivity analysis, and
tranche recovery details is being posted on an ongoing basis for
the duration of this review period and may be found at:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF237255


ANTARCTICA CFO: S&P Cuts Rating on Class D Certificates to 'CC'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class C and D notes from Antarctica CFO I Ltd., a collateralized
fund obligation (CFO) transaction managed by Antarctica
Asset Management Ltd.  At the same time, S&P affirmed the rating
on the class E notes.

Antarctica CFO I Ltd. is backed by a diversified pool of hedge
funds.  This investment vehicle type is often referred to as a
"fund of funds."

The transaction has sent redemption notices to all of its
underlying hedge fund investments and is using all of the amounts
it receives (from the redemptions) to pay down the liabilities in
a sequential manner after it pays interest and other expenses.

Since S&P's last downgrade in December 2011, the transaction fully
paid off the class B notes and has commenced paying down the class
C notes.  After the last payment period in October 2012, the class
C balance is EUR19.91 million, which is approximately 68% of its
original balance.

Though the class C balance has declined, all coverage ratios (as
calculated by the trustee) continue to fail and have declined
since S&P's previous downgrade in December 2011, reflecting the
performance of the underlying hedge fund investments and the
structural features of the transaction.  The trustee calculated
the class C coverage ratio at 111.94% as of Oct. 31, 2012, down
from 113.26 as of the Oct. 31, 2011, report that S&P used in the
analysis for the December 2011 rating actions.  Similarly, the
trustee calculated the class D and E coverage ratios at 49.66% and
45.36%, respectively, as of Oct. 31, 2012, compared with 74.13%
and 70.02% as of Oct. 31, 2011.

Standard & Poor's also notes that the class D and E notes continue
to receive their scheduled interest payments ahead of the
principal paydown to the class C notes.  This structural feature
decreases the cash available to the class C notes.

The downgrades of the class C and D notes reflect an erosion of
credit protection, and the affirmed rating on the class E notes
reflect the existing credit support.

S&P believe the extent to which the rated classes of notes receive
full principal and accrued but unpaid interest will depend on the
amount of cash proceeds they ultimately receive from the
redemption process.  However, if the timing of the redemption
process differs materially from S&P's current assumptions, the
amount of cash flow available to repay the rated liabilities
may also differ from S&P's assumptions, which could negatively
affect the ratings on the class C and class D liabilities.

Standard & Poor's will continue to monitor the CFO transactions it
rates and take rating actions, including CreditWatch placements,
when appropriate.  S&P will also continue to review whether, in
the view, the ratings currently assigned to the notes remain
consistent with the credit enhancement available to support them
and take rating actions that as we deem necessary.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.  The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at
http://standardandpoorsdisclosure-17g7.com

RATINGS LOWERED

Rating                 Current.        par amount
Class    To            From           (mil. EUR)
C        CCC (sf)      B+ (sf)         19.91
D        CC (sf)       CCC- (sf)       26.00

RATING AFFIRMED

Class   Rating        Current par amount (mil. EUR)
E       CC (sf)       4.42


APIDOS QUATTRO: Moody's Raises Rating on Class E Notes to 'Ba2'
---------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by Apidos Quattro CDO.

U.S. $21,000,000 Class B Floating Rate Notes Due January 20, 2019,
Upgraded to Aa1 (sf); previously on August 15, 2011 Upgraded to
Aa3 (sf);

U.S. $16,000,000 Class C Floating Rate Notes Due January 20, 2019,
Upgraded to A2 (sf); previously on August 15, 2011 Upgraded to
Baa1 (sf);

U.S. $14,000,000 Class D Floating Rate Notes Due January 20, 2019,
Upgraded to Baa3 (sf); previously on August 15, 2011 Upgraded to
Ba1 (sf);

U.S. $12,000,000 Class E Floating Rate Notes Due January 20, 2019,
Upgraded to Ba2 (sf); previously on August 15, 2011 Upgraded to
Ba3 (sf).

Ratings Rationale

According to Moody's, the rating actions taken on the notes
reflect the benefit of the short period of time remaining before
the end of the deal's reinvestment period in January 2013. In
consideration of the reinvestment restrictions applicable during
the amortization period, and therefore limited ability to effect
significant changes to the current collateral pool, Moody's
analyzed the deal assuming a higher likelihood that the collateral
pool characteristics will continue to maintain a positive buffer
relative to certain covenant requirements. In particular, the deal
is assumed to benefit from lower weighted average rating factor
("WARF") and higher spread levels compared to the levels assumed
at the last rating action in August 2011. Moody's modeled a WARF
of 2478 compared to 2672 at the time of the last rating action. In
addition, Moody's modeled a higher weighted average spread ("WAS")
in this rating analysis than that of the last rating action.
However, Moody's took into consideration that this deal has less
restrictive post-reinvestment trading constraints than otherwise
comparable CLOs.

Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as par, weighted average rating
factor, diversity score, and weighted average recovery rate, may
be different from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of $343 million,
defaulted par of $4.65 million, a weighted average default
probability of 15.54% (implying a WARF of 2478), a weighted
average recovery rate upon default of 49.89%, and a diversity
score of 73. The default and recovery properties of the collateral
pool are incorporated in cash flow model analysis where they are
subject to stresses as a function of the target rating of each CLO
liability being reviewed. The default probability is derived from
the credit quality of the collateral pool and Moody's expectation
of the remaining life of the collateral pool. The average recovery
rate to be realized on future defaults is based primarily on the
seniority of the assets in the collateral pool. In each case,
historical and market performance trends and collateral manager
latitude for trading the collateral are also factors.

Apidos Quattro CDO, issued in October 2006, is a collateralized
loan obligation backed primarily by a portfolio of senior secured
loans.

The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Approach to Rating Collateralized Loan Obligations"
rating methodology published in June 2011.

In addition to the base case analysis described above, Moody's
also performed sensitivity analyses to test the impact on all
rated notes of various default probabilities. Below is a summary
of the impact of different default probabilities (expressed in
terms of WARF levels) on all rated notes (shown in terms of the
number of notches' difference versus the current model output,
where a positive difference corresponds to lower expected loss),
assuming that all other factors are held equal:

Moody's Adjusted WARF -- 20% (1982)

Class A: 0
Class B: 0
Class C: +2
Class D: +3
Class E: +1

Moody's Adjusted WARF + 20% (2974)

Class A: 0
Class B: -2
Class C: -2
Class D: -1
Class E: -1

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by 1) uncertainties of
credit conditions in the general economy and 2) the large
concentration of upcoming speculative-grade debt maturities which
may create challenges for issuers to refinance. CLO notes'
performance may also be impacted by 1) the manager's investment
strategy and behavior and 2) divergence in legal interpretation of
CLO documentation by different transactional parties due to
embedded ambiguities.

Sources of additional performance uncertainties are described
below:

1) Deleveraging: The main source of uncertainty in this
transaction is whether deleveraging from unscheduled principal
proceeds will commence and at what pace. Deleveraging may
accelerate due to high prepayment levels in the loan market and/or
collateral sales by the manager, which may have significant impact
on the notes' ratings.

2) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to be
defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed defaulted
recoveries assuming the lower of the market price and the recovery
rate in order to account for potential volatility in market
prices.


HALCYON LOAN II: S&P Affirms 'BB' Rating on Class D Notes
---------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on three
classes of notes from Halcyon Loan Investors CLO II Ltd., a cash
flow collateralized loan obligation (CLO) transaction, and removed
them from CreditWatch with positive implications, where S&P placed
them on Sept. 24, 2012. "At the same time, we affirmed our ratings
on three other classes from the transaction and removed one from
CreditWatch with positive implications," S&P said.

"This transaction is currently in its reinvestment phase until
April 2014. The upgrades reflect improved credit quality since our
January 2011 rating actions. Due to this and other factors,
overcollateralization (O/C) ratios increased for the class A, B,
C, and D notes," S&P said.

The affirmations of the ratings on the class A-1-J, C, and D notes
reflect credit support commensurate with the current rating
levels.

Standard & Poor's will continue to review whether, in its view,
the ratings currently assigned to the notes remain consistent with
the credit enhancement available to support them and take rating
actions as it deems necessary.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com

RATING AND CREDITWATCH ACTIONS

Halcyon Loan Investors CLO II Ltd.
                Rating
Class        To         From
A-1-S        AAA (sf)   AA+ (sf)/Watch Pos
A-1-J        AA+ (sf)   AA+ (sf)/Watch Pos
A-2          AA (sf)    AA- (sf)/Watch Pos
B            A (sf)     A- (sf)/Watch Pos
C            BBB (sf)   BBB (sf)
D            BB (sf)    BB (sf)


JP MORGAN 2012-LC9: Moody's Rates Class G Securities 'B2'
---------------------------------------------------------
Moody's Investors Service has assigned ratings to sixteen classes
of CMBS securities, issued by J. P. Morgan Chase Commercial
Mortgage Securities Trust 2012-LC9.

Cl. A-1, Definitive Rating Assigned Aaa (sf)

Cl. A-2, Definitive Rating Assigned Aaa (sf)

Cl. A-3, Definitive Rating Assigned Aaa (sf)

Cl. A-4, Definitive Rating Assigned Aaa (sf)

Cl. A-5, Definitive Rating Assigned Aaa (sf)

Cl. A-SB, Definitive Rating Assigned Aaa (sf)

Cl. A-S, Definitive Rating Assigned Aaa (sf)*

Cl. B, Definitive Rating Assigned Aa2 (sf)*

Cl. C, Definitive Rating Assigned A2 (sf)*

Cl. EC, Definitive Rating Assigned A1 (sf)*

Cl. D, Definitive Rating Assigned Baa1 (sf)

Cl. E, Definitive Rating Assigned Baa3 (sf)

Cl. F, Definitive Rating Assigned Ba2 (sf)

Cl. G, Definitive Rating Assigned B2 (sf)

Cl. X-A, Definitive Rating Assigned Aaa (sf)**

Cl. X-B, Definitive Rating Assigned A1 (sf)**

* Classes A-S, B, C, and EC are exchangeable classes.

**Class X-A and X-B are interest-only classes.

Ratings Rationale

The Certificates are collateralized by 45 fixed rate loans secured
by 79 properties. The ratings are based on the collateral and the
structure of the transaction.

Moody's CMBS ratings methodology combines both commercial real
estate and structured finance analysis. Based on commercial real
estate analysis, Moody's determines the credit quality of each
mortgage loan and calculates an expected loss on a loan specific
basis. Under structured finance, the credit enhancement for each
certificate typically depends on the expected frequency, severity,
and timing of future losses. Moody's also considers a range of
qualitative issues as well as the transaction's structural and
legal aspects.

The credit risk of loans is determined primarily by two factors:
1) Moody's assessment of the probability of default, which is
largely driven by each loan's DSCR, and 2) Moody's assessment of
the severity of loss upon a default, which is largely driven by
each loan's LTV ratio.

The Moody's Actual DSCR of 1.67X is greater than the 2007
conduit/fusion transaction average of 1.31X. The Moody's Stressed
DSCR of 1.03X is greater than the 2007 conduit/fusion transaction
average of 0.92X.

Moody's Trust LTV ratio of 100.4% is lower than the 2007
conduit/fusion transaction average of 110.6%. Moody's Total LTV
ratio, (inclusive of subordinated debt) of 103.4% is also
considered when analyzing various stress scenarios for the rated
debt.

Moody's also considers both loan level diversity and property
level diversity when selecting a ratings approach.

With respect to loan level diversity, the pool's loan level
(includes cross collateralized and cross defaulted loans)
Herfindahl Index is 21. The transaction's loan level diversity is
similar to Herfindahl scores found in most multi-borrower
transactions issued since 2009. With respect to property level
diversity, the pool's property level Herfindahl Index is 25. The
transaction's property diversity profile is similar to the indices
calculated in most multi-borrower transactions issued since 2009.

Moody's also grades properties on a scale of 1 to 5 (best to
worst) and considers those grades when assessing the likelihood of
debt payment. The factors considered include property age, quality
of construction, location, market, and tenancy. The pool's
weighted average property quality grade is 2.11, which is lower
than the indices calculated in most multi-borrower transactions
since 2009.

The methodologies used in this rating were "Moody's Approach to
Rating U.S. CMBS Conduit Transactions" published in September
2000, and "Moody's Approach to Rating Structured Finance Interest-
Only Securities" published in February 2012.

Moody's analysis employs the excel-based CMBS Conduit Model v2.50
which derives credit enhancement levels based on an aggregation of
adjusted loan level proceeds derived from Moody's loan level DSCR
and LTV ratios. Major adjustments to determining proceeds include
loan structure, property type, sponsorship and diversity. Moody's
analysis also uses the CMBS IO calculator version 1.0 which
references the following inputs to calculate the proposed IO
rating based on the published methodology: original and current
bond ratings and credit estimates; original and current bond
balances grossed up for losses for all bonds the IO(s)
reference(s) within the transaction; and IO type corresponding to
an IO type as defined in the published methodology.

The V Score for this transaction is assessed as Low/Medium, the
same as the V score assigned to the U.S. Conduit and CMBS sector.
This reflects typical volatility with respect to the critical
assumptions used in the rating process as well as an average
disclosure of securitization collateral and ongoing performance.

Moody's V Scores provide a relative assessment of the quality of
available credit information and the potential variability around
the various inputs to a rating determination. The V Score ranks
transactions by the potential for significant rating changes owing
to uncertainty around the assumptions due to data quality,
historical performance, the level of disclosure, transaction
complexity, the modeling, and the transaction governance that
underlie the ratings. V Scores apply to the entire transaction
(rather than individual tranches).

Moody's Parameter Sensitivities: If Moody's value of the
collateral used in determining the initial rating were decreased
by 5%, 14%, and 22%, the model-indicated rating for the currently
rated junior Aaa class would be Aaa, Aa2, Aa3, respectively.
Parameter Sensitivities are not intended to measure how the rating
of the security might migrate over time; rather they are designed
to provide a quantitative calculation of how the initial rating
might change if key input parameters used in the initial rating
process differed. The analysis assumes that the deal has not aged.
Parameter Sensitivities only reflect the ratings impact of each
scenario from a quantitative/model-indicated standpoint.
Qualitative factors are also taken into consideration in the
ratings process, so the actual ratings that would be assigned in
each case could vary from the information presented in the
Parameter Sensitivity analysis.


LAKESIDE RE III: S&P Gives 'B+' Rating on $270MM Notes Due 2016
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+(sf)' rating to
the $270 million variable rate principal at risk notes due 2016
issued by Lakeside Re III Ltd. The notes cover losses in the
Canadian provinces of Alberta, British Columbia, New Brunswick,
Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward
Island, and Quebec, as well as the U.S. states of Arkansas,
California, Illinois, Indiana, Kentucky, Louisiana, Michigan,
Mississippi, Missouri, Ohio, Oregon, Tennessee, Washington, and
Wisconsin, from earthquake and ensuing damage caused by related
earth shake, fire, sprinkler leakage, volcanic disturbance or
eruption, tsunami, and flooding due to dam or levee ruptures on
an annual aggregate basis.

"The rating is based on the lowest of the following: the rating on
the catastrophe risk ('B+'); the rating on the assets in the
collateral account ('AAAm'); and the rating on the ceding insurer
('AA-')," said Standard & Poor's credit analyst Gary Martucci.

RATINGS LIST

New Rating

Lakeside Re III Ltd.
$270 mil variable rate principal at risk nts due Jan. 8, 2016
B+(sf)


LANDMARK V: S&P Affirms 'CCC+' Rating on Class B-2L Notes
---------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
A-2L, A-3L, and B-1L notes from Landmark V CDO Ltd., a U.S.
collateralized loan obligation (CLO) transaction managed by
Aladdin Capital Management LLC. "At the same time, we affirmed our
ratings on the class A-1L and B-2L notes. Additionally, we removed
the ratings on the class A-2L, A-3L, B-1L, and B-2L notes from
CreditWatch with positive implications, where we placed them on
Oct. 29, 2012," S&P said.

"We affirmed our ratings on the class A-1L and B-2L notes to
reflect the credit support available at the current rating
levels," S&P said.

"We have been notified that Sound Harbor Partners LLC is planning
to take over collateral management responsibilities from Aladdin
Capital Management LLC by assignment. Based on our review of the
information that Sound Harbor Partners LLC provided, we plan to
provide rating agency confirmation (RAC) when the assignment is
executed," S&P said.

"The upgrades mainly reflect paydowns to the class A-1L notes.
Subsequently, the credit enhancement available to support the
notes improved since April 2012, when we upgraded all of the
notes. Since that time, the transaction has paid down the class A-
1L notes by a total of $73.8 million, reducing their outstanding
note balance to 40.58% of the original balance at issuance," S&P
said.

The upgrades also reflect an improvement in the
overcollateralization (O/C) available to support the notes,
primarily due to the paydowns.
The trustee reported these O/C ratios in the November 2012 monthly
report:

    The class A-2L O/C ratio was 139.20%, compared with a reported
    ratio of 131.15% in March 2012;
    The class A-3L O/C ratio was 121.29%, compared with a reported
    ratio of 117.72% in March 2012;
    The class B-1L O/C ratio was 109.97%, compared with a reported
    ratio of 108.80% in March 2012; and
    The class B-2L O/C ratio was 104.07%, compared with a reported
    ratio of 104.02% in March 2012.

"The class B-2L note rating was constrained by the application of
the largest obligor default test, a supplemental stress test we
introduced as part of our 2009 corporate criteria update," S&P
said.

Standard & Poor's will continue to review whether, in its view,
the ratings assigned to the notes remain consistent with the
credit enhancement available to support them and take rating
actions as it deems necessary.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com

RATING AND CREDITWATCH ACTIONS

Landmark V CDO Ltd.
                   Rating
Class         To           From
A-1L          AAA (sf)     AAA (sf)
A-2L          AAA (sf)     AA+ (sf)/Watch Pos
A-3L          AA (sf)      A+ (sf)/Watch Pos
B-1L          BBB+ (sf)    BBB- (sf)/Watch Pos
B-2L          CCC+ (sf)    CCC+ (sf)/Watch Pos

TRANSACTION INFORMATION
Issuer:             Landmark V CDO Ltd.
Coissuer:           Landmark V CDO (Delaware) Corp.
Collateral manager: Aladdin Capital Management LLC
Underwriter:        Bear Stearns Cos. LLC
Trustee:            Deutsche Bank Trust Co. Americas
Transaction type:   Cash flow CDO


MOUNTAIN CAPITAL III: S&P Affirms 'BB-' Rating on Class B-1L Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on two
classes of notes from Mountain Capital CLO III Ltd., a cash flow
collateralized loan obligation (CLO) transaction and removed
the classes from CreditWatch with positive implications, where S&P
had placed it on August 17, 2012. "At the same time, we affirmed
our ratings on two other classes from the transaction and removed
one from CreditWatch with positive implications," S&P said.

"This transaction is currently in its amortization phase since the
reinvestment period ended in August 2009. 's upgrades reflect the
complete pay downs of the Class A-1LA and A-1LB notes as well as a
partial paydown of $9.5 million to the class A-2L notes since our
February 2012 rating actions. Due to this and other factors,
overcollateralization (O/C) ratios increased for the class A and
B-1L notes," S&P said.

"Our ratings on the class A-3F and A-3L notes reflect the
application of the largest obligor default test, a supplemental
stress test we introduced as part of our September 2009 corporate
criteria update," S&P said.

"The affirmations of the ratings on the class A-2L and B-1L notes
reflect credit support commensurate with the current rating
levels," S&P said.

Standard & Poor's will continue to review whether, in its view,
the ratings currently assigned to the notes remain consistent with
the credit enhancement available to support them and take rating
actions as it deems necessary.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com


RATING AND CREDITWATCH ACTIONS

Mountain Capital CLO III Ltd.
                Rating
Class        To         From
A-2L         AAA (sf)   AAA (sf)
A-3F         AA+ (sf)   A+ (sf)/Watch Pos
A-3L         AA+ (sf)   A+ (sf)/Watch Pos
B-1L         BB- (sf)   BB- (sf)/Watch Pos


NEWCASTLE CDO X: S&P Withdraws 'CC' Rating on Class F Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on class
A-1, A-2, A-3, C, D, E, and F notes from Newcastle CDO X Ltd., an
arbitrage collateralized debt obligation (CDO) transaction
collateralized primarily by commercial mortgage-backed securities.

"We withdrew our ratings as the notes are no longer outstanding,
following their cancelation as agreed to by the noteholders," S&P
said.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com


RATINGS WITHDRAWN

Newcastle CDO X Ltd.
                            Rating
Class               To                  From
A-1                 NR                  BB+ (sf)
A-2                 NR                  B+ (sf)
A-3                 NR                  B (sf)
C                   NR                  B- (sf)
D                   NR                  CCC+ (sf)
E                   NR                  CCC- (sf)
F                   NR                  CC (sf)

NR-Not rated.


NEWSTAR 2006-1: S&P Raises Rating on Class E Notes to 'CCC+'
------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
D and E notes from NewStar Commercial Loan Trust 2006-1, a U.S.
collateralized loan obligation (CLO) managed by NewStar Financial
Inc. "In addition, we affirmed our ratings on the class A-1,
A-2, B, and C notes," S&P said.

"The rating actions follow our review of the transaction's
performance using data from the trustee report dated Oct. 1,
2012," S&P said.

"Post-reinvestment period principal amortization, in combination
with excess interest proceeds used to cover losses in the
transaction, has resulted in $139.57 million in paydowns to the
class A-1 and A-2 notes since our last rating action in April
2010," S&P said.

"The ratings on the class D and E notes were previously
constrained at 'CCC+ (sf)' and 'CCC- (sf)' by the application of
the largest obligor default test, a supplemental stress test we
introduced as part of our 2009 corporate criteria update. This
constraint is no longer in place for the class D notes, and the
rating on the class E notes continues to be constrained at 'CCC+
(sf)' as a result of this test. Subject to the constraint on the
class E notes, the ratings on both classes have been raised in
accordance with the improvement," S&P said.

"Our review of this transaction included a cash flow analysis,
based on the portfolio and transaction as reflected in the
aforementioned trustee report, to estimate future performance. In
line with our criteria, our cash flow scenarios applied forward-
looking assumptions on the expected timing and pattern of
defaults, and recoveries upon default, under various interest rate
and macroeconomic scenarios. In addition, our analysis considered
the transaction's ability to pay timely interest and/or ultimate
principal to each of the rated tranches. The results of the cash
flow analysis demonstrated, in our view, that all of the rated
outstanding classes have adequate credit enhancement available at
the rating levels associated with this rating action," S&P said.

Standard & Poor's will continue to review whether, in its view,
the ratings assigned to the notes remain consistent with the
credit enhancement available to support them and take rating
actions as it deems necessary.

CAPITAL STRUCTURE AND KEY MODEL ASSUMPTIONS COMPARISON
                           December 2009     October 2012
Class                      Notional($mil)    Notional($mil)
A-1                        319.93             188.04
A-2                        32.84              25.17
B                          22.50              22.50
C                          35.00              35.00
D                          25.00              25.00
E                          13.75              13.75
Weighted Average Margin    5.56%              6.02%
Weighted Average Rating    B-                 B

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com


RATING ACTIONS

NewStar Commercial Loan Trust 2006-1
                        Rating
Class              To           From
A-1                AA+ (sf)     AA+ (sf)
A-2                AA+ (sf)     AA+ (sf)
B                  AA (sf)      AA (sf)
C                  BBB+ (sf)    BBB+ (sf)
D                  B+ (sf)      CCC+ (sf)
E                  CCC+ (sf)    CCC- (sf)


PHOENIX CLO III: S&P Raises Rating on Class E Notes to 'B+'
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the Class
A-1, B, C, D, and E notes from Phoenix CLO III Ltd., a
collateralized loan obligation (CLO) transaction managed by
ING Alternative Asset Management LLC. "At the same time, we
affirmed our rating on the transaction's Class A-2 notes. In
addition, we removed all of these ratings from CreditWatch with
positive implications, where they were placed on Oct. 29, 2012,"
S&P said.

"Phoenix CLO III Ltd. was formerly known as Avenue CLO VI Ltd. The
transaction is in its reinvestment period, which is scheduled to
end in July 2013. It passed all coverage tests as of the November
2012 monthly trustee report," S&P said.

"The upgrades of the Class A-1, B, C, D, and E notes reflect
improved performance we have observed in the transaction's
underlying asset portfolio since our last rating actions in
December 2010," S&P said.

"According to the Nov. 6, 2012, trustee report, the transaction
held $21.5 million (about 4.9% of the collateral pool) in 'CCC'
rated assets, down from $28.1 million (about 6.4% of the
collateral pool) noted in the Nov. 4, 2010, trustee report. In
addition, the aggregate principal amount of portfolio collateral
increased to $443.6 million in November 2012 from $436.1 million
in November 2010," S&P said.

"The rating on the Class E notes is driven by the largest obligor
default test, a supplemental stress test we introduced as part of
our 2009 corporate criteria update," S&P said.

The affirmation of the Class A-2 notes rating reflects the
availability of sufficient credit support at the current rating
level.

"We will continue to review whether, in our view, the ratings on
the notes remain consistent with the credit enhancement available
to support them, and we will take rating actions as we deem
necessary," S&P said.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Phoenix CLO III Ltd.
Class           To           From

A-1             AAA (sf)     AA+ (sf)/Watch Pos
A-2             AA+ (sf)     AA+ (sf)/Watch Pos
B               AA- (sf)     A+ (sf)/Watch Pos
C               A- (sf)      BBB+ (sf)/Watch Pos
D               BBB (sf)     BB+ (sf)/Watch Pos
E               B+ (sf)      CCC- (sf)/Watch Pos


* S&P Raises Ratings on 36 Tranches From 33 CDO Transactions
------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 36
tranches from 33 corporate-backed synthetic CDO transactions and
removed 32 from CreditWatch with positive implications. "In
addition, we lowered one tranche rating from one corporate-backed
synthetic CDO transaction and removed it from CreditWatch with
negative implications," S&P said.

"The upgrades are from synthetic CDOs that experienced a
combination of upward rating migration in their underlying
reference portfolios, seasoning of the underlying reference names
and an increase in the synthetic rated overcollateralization
(SROC) ratios above 100% at higher rating levels as of the
December review and at our projection of the SROC ratios in 90
days assuming no credit migration. The downgrade is from a
synthetic CDO that experienced negative rating migrations in its
underlying reference portfolio and had an SROC below 100% at its
current rating level," S&P said.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com

RATING ACTIONS

Betsen CDO Ltd.
Series 2007-2
                                 Rating
Class                    To             From
Notes                    B+ (sf)        CCC- (sf)/Watch Pos

Credit and Repackaged Securities Limited
Series 2006-4
                                 Rating
Class                    To              From
Notes                    BBB- (sf)       BB (sf)/Watch Pos

Credit Default Swap
US$300 mil Morgan Stanley Capital Services Inc. - ESP Funding I,
Ltd.
Series REF: NGNGX
                                 Rating
Class                    To           From
Tranche                  A-srb (sf)   BBBsrb (sf)/Watch Pos

Credit Default Swap
US$500 mil Credit Default Swap - CRA700426
                                 Rating
Class                    To           From
Swap                     AAsrp (sf)   AA-srp (sf)/Watch Pos

Credit Default Swap
US$500 mil Credit Default Swap - CRA700436
                                 Rating
Class                    To           From
Swap                     AAsrp (sf)   AA-srp (sf)/Watch Pos

Credit Linked Notes Ltd. 2006-1
                                 Rating
Class                    To              From
Notes                    B (sf)          B- (sf)/Watch Pos

Echo Funding Pty Ltd. Series 21
                                 Rating
Class                    To             From
Series 21                B- (sf)        CCC- (sf)/Watch Pos

Greylock Synthetic CDO 2006
Series 4
                                 Rating
Class                    To              From
A1LS                   A- (sf)         BBB (sf)/Watch Pos

Greylock Synthetic CDO 2006
Series 1
                                 Rating
Class                    To              From
A1A-$LS                  A- (sf)         BBB (sf)/Watch Pos

Greylock Synthetic CDO 2006
Series 3
                                 Rating
Class                    To             From
A1-EURLMS                A+ (sf)         A (sf)/Watch Pos

Infiniti SPC Limited
US$20 mil Infiniti SPC Limited Acting on Behalf of and for the
Account of the
Potomac Synthetic CDO 2007-2
Segregated Portfolio, Series 10A-2
                                 Rating
Class                    To              From
10A-2                    BBB- (sf)       BB+ (sf)/Watch Pos

Lorally CDO Limited Series 2007-3
                                 Rating
Class                    To               From
2007-3                   AA- (sf)         A+ (sf)/Watch Pos

Morgan Stanley ACES SPC
Series 2007-6
                                 Rating
Class                    To              From
IIA                      BBB- (sf)       BB+ (sf)/Watch Pos
IIIA                     BB+ (sf)        BB- (sf)/Watch Pos

Morgan Stanley Managed ACES SPC
Series 2005-1
                                 Rating
Class                    To              From
IV A                     B (sf)          B- (sf)/Watch Pos
IV B                     B (sf)          B- (sf)/Watch Pos

Morgan Stanley Managed ACES SPC
Series 2006-4
                                 Rating
Class                    To             From
IIIA                     A+ (sf)        BBB- (sf)/Watch Pos

Mt Kailash Series III
                                 Rating
Class                    To              From
Cr Lkd Ln                B- (sf)         B (sf)/Watch Neg

Omega Capital Investments PLC
EUR274 mil, 20 mil, US$160 mil Palladium CDO I Secured Floating
Rate Notes
Series 19
                                 Rating
Class                    To              From
A-1E                     B+ (sf)         B (sf)/Watch Pos
A-1U                     B+ (sf)         B (sf)/Watch Pos

PARCS Master Trust
US$300 mil PARCS Master Trust Class 2007-10 CDX7 10Y 10-15
(Floating Recovery)
Units
Series 2007-10
                                 Rating
Class                    To              From
Trust Unit               BBB- (sf)       BB+ (sf)/Watch Pos

Pivot Master Trust
Series 8
                                 Rating
Class                    To                  From
Series 8                 B- (sf)             CCC- (sf)

Pivot Master Trust
Series 6
                                 Rating
Class                    To                  From
Series 6                 B- (sf)             CCC- (sf)

Pivot Master Trust
Series 7
                                 Rating
Class                    To                  From
Series 7                 B- (sf)             CCC- (sf)

Pivot Master Trust
Series 5
                                 Rating
Class                    To                  From
Series 5                 B- (sf)             CCC- (sf)

Repacs Trust Series: Bayshore I
                                 Rating
Class                    To              From
B                        BB+ (sf)        BB (sf)/Watch Pos

STARTS (Cayman) Ltd.
Series 2006-3
                                 Rating
Class                    To              From
B1-D1                    B (sf)          B- (sf)/Watch Pos

STARTS (Cayman) Ltd.
Series 2006-4
                                 Rating
Class                    To              From
B2-D2                    B (sf)          B- (sf)/Watch Pos

STARTS (Cayman) Ltd.
Series 2006-7
                                 Rating
Class                    To              From
B1-H1                    B (sf)          B- (sf)/Watch Pos

STARTS (Cayman) Ltd.
Series 2006-6
                                 Rating
Class                    To              From
B1-A1                    B (sf)          B- (sf)/Watch Pos

STARTS (Cayman) Ltd.
Series 2006-9
                                 Rating
Class                    To              From
B3-D3                    B (sf)          B- (sf)/Watch Pos

STARTS (Cayman) Ltd.
200 mil Maple Hill II Managed Synthetic CDO, Series 2007-16
                                 Rating
Class                    To             From
B2-J2                    B- (sf)        CCC- (sf)/Watch Pos

STARTS (Cayman) Ltd.
US$5 mil Maple Hill II Managed Synthetic CDO, Series 2007-17
                                 Rating
Class                    To             From
B1-D1                    B- (sf)        CCC- (sf)/Watch Pos

STARTS (Ireland) PLC
Series 2006-20
                                 Rating
Class                    To              From
A1-E1                    BB- (sf)        B+ (sf)/Watch Pos

STARTS (Ireland) PLC
Series 2006-21
                                 Rating
Class                    To              From
B1-E1                    B (sf)          B- (sf)/Watch Pos

STRATA Trust, Series 2006-10
                                 Rating
Class                    To              From
Notes                    BBB- (sf)       BB+ (sf)/Watch Pos

Strata Trust, Series 2007-7
                                 Rating
Class                    To              From
Notes                    BB+ (sf)        BB- (sf)/Watch Pos


                            *********

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., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez,
Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.

Copyright 2013.  All rights reserved.  ISSN: 1520-9474.

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                  *** End of Transmission ***