text: TCREUR_Public/101201.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, December 1, 2010, Vol. 11, No. 237 HeadlinesA U S T R I AA-TEC INDUSTRIES: AE&E In Talks With Costain Over Belvedere JobG E R M A N YPROMISE-I MOBILITY: Moody's Cuts Rating on Class E Notes to Caa3TUI AG: Preparing to Sell Hapag-Lloyd StakeG R E E C E* GREECE: Corporate Bankruptcies Up 44% in 2010, ESEE SaysI R E L A N DALLIED IRISH: Fitch Cuts Rating on Tier 2 Subordinated Debt to BANGLO IRISH: Strategy to Wind Down Loan Book Ready by JanuaryANGLO IRISH: DBRS Cuts Ratings on Subordinated Notes to 'D'BANK OF IRELAND: Plans to Raise EUR2.2 Billion in CapitalBANK OF IRELAND: Fitch Cuts Rating on Lower Tier 2 Debt to 'BB'EIRCOM GROUP: May Breach Loan Covenants; Assesses OptionsFOUR STAR: High Court Confirms Appointment of ExaminerMCINERNEY GROUP: Oaktree Seeks Approval to Acquire Two Units* S&P Changes Ratings on Irish Banks; Retains CreditWatch NegativeR U S S I AHOME CREDIT: S&P Changes Outlook to Stable; Affirms 'B+' RatingMOBILE TELESYSTEMS: Fitch Affirms 'BB+' Issuer Default RatingsRUSSIAN STANDARD: S&P Gives Stable Outlook; Affirms 'B+' RatingSISTEMA JOINT: Fitch Affirms 'BB-' Issuer Default RatingsSTROYKREDIT BANK: Moody's Assigns 'B3' Rating to Senior DebtS E R B I A & M O N T E N E G R OAGROZIV DD: Perutnina Eyes AcquisitionS P A I NAYT GENOVA: S&P Puts Credit Ratings on Notes on Watch PositiveAYT GENOVA: S&P Affirms Rating on Class D Notes at 'BB- (sf)'T U R K E YTOPLU KONUT: Fitch Gives Positive Outlook; Affirms 'BB+' Rating* Fitch Gives Positive Outlook on Istanbul's 'BB+' RatingsU K R A I N EZHYTOMYRSKI LASOSCHI: Faces Liquidation Amid Ownership DisputeU N I T E D K I N G D O MAFREN PLC: S&P Assigns 'B-' Long-Term Corporate Credit RatingAFREN PLC: Fitch Assigns 'B' Long-Term Issuer Default RatingANGLO IRISH: Dec. 2 Hearing Set for Request to Question Ex-ChiefATRIUM EUROPEAN: S&P Raises Corporate Credit Rating to 'BB'BALL BROTHERS: Goes Into AdministrationCATTLES: Reveals Rescue Plan to Avoid AdministrationCONNAUGHT PLC: Auditor Policeman Probes PwCEUROCASTLE CDO: S&P Junks Ratings on Two Classes of NotesGHOST: Retail Tycoon Forced to Pay GBP2.5 MillionGLAMALCO: Goes Into Administration; 140 Jobs AxedLOCAL HEROES: Goes Into AdministrationLOWRY HOMES: Enters AdministrationQUIBELL CONSTRUCTION: Two Building Firms Go Into AdministrationSHEFFIELD WEDNESDAY: Has Takeover Deal; Averts AdministrationTURBO FINANCE: Fitch Assigns 'BB+' Rating to Class C NotesVEDANTA RESOURCES: S&P Keeps 'BB' Long-Term Corp. Credit Rating *********=============A U S T R I A=============A-TEC INDUSTRIES: AE&E In Talks With Costain Over Belvedere Job---------------------------------------------------------------Jamie Dunkley at The Telegraph reports that construction groupCostain has entered into talks about the financing of theBelvedere power plant in London after one of its key contractorsfiled for insolvency.The Telegraph relates that the company revealed it is owedGBP22 million by AE&E Innova of Switzerland, whose German parentcollapsed last week.Costain, which is a sub-contractor for the "construction anddelivery of a significant part of the energy-from-waste facility",said it could not be certain AE&E Inova will make all futurepayments under the terms of its contract, The Telegraph discloses."In light of the insolvency of AE&E Group, Costain is engaged inactive discussions with both AE&E Innova and Cory Environmentalregarding the financing and completion of the project," Costainsaid in a statement, according to The Telegraph.Belvedere -- a GBP120 million project near the Dartford Crossing-- is one of the largest alternative energy projects in the UK andwill be used by London boroughs to reduce their spending onlandfill. The plant's output is expected to provide power for upto 50,000 homes across London.As reported in the Troubled Company Reporter-Europe on Nov. 26,2010, Bloomberg News said A-Tec Industries AG's AE&E constructionunit received court clearance to reorganize debt after it failedto sell the company or unfreeze a EUR798 million (US$1.06 billion)credit line. AE&E will be managed by an administrator after itfiled for reorganization proceedings at the Vienna CommercialCourt on November 24. AE&E said under the restructuring, which ispart of the insolvency process, creditors are being offered 20% ofwhat they are owed.The AE&E unit, which builds power plants for clients such asutilities or steel makers, is A-Tec's biggest unit with 60% of thegroup's revenue and 83% of pretax profit in 2009. Bloomberg notedfailure to keep it afloat would diminish the funds for creditors.A-Tec Industries AG is an engineering company based in Vienna,Austria.=============G E R M A N Y=============PROMISE-I MOBILITY: Moody's Cuts Rating on Class E Notes to Caa3----------------------------------------------------------------Moody's Investors Service has downgraded the ratings of 3 classesof notes issued by Promise-I Mobility 2005-1.This transaction is a synthetic balance sheet collateralized loanobligations of senior corporate loans to SME borrowersincorporated in Germany. All loans were originated by IKBDeutsche Industriebank AG.The affected notes are:Issuer: Promise-I-Mobility 2005-1 plc -- EUR27.8M A Notes, Confirmed at A1 (sf); previously on Nov 5, 2010 A1 (sf) Placed Under Review for Possible Downgrade -- EUR8.3M B Notes, Confirmed at Baa2 (sf); previously on Nov 5, 2010 Baa2 (sf) Placed Under Review for Possible Downgrade -- EUR7.5M C Notes, Downgraded to Ba2 (sf); previously on Nov 5, 2010 Ba1 (sf) Placed Under Review for Possible Downgrade -- EUR5.3M D Notes, Downgraded to B3 (sf); previously on Nov 5, 2010 B1 (sf) Placed Under Review for Possible Downgrade -- EUR5.3M E Notes, Downgraded to Caa3 (sf); previously on Nov 5, 2010 Caa1 (sf) Placed Under Review for Possible Downgrade Ratings RationaleThese rating actions are mainly driven by: 1) the deterioration ofthe asset pool reflected in the occurrence of additional creditevents (increase by EUR9 million), delinquencies (increase byEUR3.3 million), and negative credit migration since the lastrating actions in May 2009 as evident from the latest investorsreport and 2) the revision of IKB's internal rating scale andprocess used to assess the creditworthiness of SME borrowers.The Aaa rating of class A+ was maintained while classes A and Bsaw their ratings confirmed given the short weighted average lifeof these tranches (0.5 year for class A+ and 0.9 year for classesA and B) and the strengthening of their credit enhancement levelsdue to the relatively low level of losses experienced by theportfolio in relation to its initial size (0.5%) coupled with fastand substantial amortization of the portfolio (71% amortizationsince August 2009 when redemption of notes started).In order to assess the default probabilities of each of theborrowers in the pool, Moody's relies on the internal creditscores assigned to each borrower by IKB as originator of thetransaction. Following the recent revision by IKB of its internalcredit score scale which provides a more detailed assessment ofcredit risk levels, Moody's revisited its mapping to IKB creditscores i.e. the way the bank's internal credit scores aretranslated into Moody's idealized default probabilities. Thegreater conservativeness embedded in IKB's revised credit scoresdrives IKB internal ratings to map to higher Moody's defaultprobabilities and therefore has a negative impact on the ratingsof the notes.As a base case, Moody's analyzed the underlying collateral poolwith a weighted average rating factor of 2762 (B3) includingassets mapping to a Ca rating, which translated into 1508 (Ba3)when such assets were excluded. A weighted average recovery rateof 52.21% was used in this analysis.Moody's additionally ran sensitivity analyses on key parametersfor the rated notes. Among these, Moody's considered the impactof recovery rates deviating by plus or minus 5% from their meanvalue of 52.21% and observed that the model results for alltranches, except class A+, would likely be impacted by not morethan 2 notches. Moody's also considered the impact of furtherstresses to large single exposures: a downgrade of the mappedrating of the largest obligor (1.86%) in the pool from Ba1 to Caa2had an impact lower than 2 notches on the rated notes. Given thatcredit events can be called in this transaction only forbankruptcy and failure to pay, Moody's considered a defaultprobability of 100% only on the portion of obligors currentlyundergoing a restructuring that are likely to default within ayear. This adjustment permitted to avoid the occurrence of"artificial" credit events in Moody's model which wouldunnecessarily erode the credit enhancement below the rated notes.Moody's Investors Service did not receive or take into account athird-party due diligence report on the underlying assets orfinancial instruments related to the monitoring of thistransaction in the past six months.TUI AG: Preparing to Sell Hapag-Lloyd Stake-------------------------------------------TUI AG, the biggest single shareholder in the Hapag-Lloydsteamship company, is working with three banks to prepare the saleof its stake in the container line, Aaron Kirchfeld, Zijing Wu andHolger Elfes at Bloomberg News report, citing four people withknowledge of the process.According to Bloomberg, the people, who declined to be identifiedbecause the matter is private, said Credit Suisse Group AG,Deutsche Bank AG and Goldman Sachs Group Inc. are advising TUI onthe sale, which would likely be done through an initial publicoffering. Bloomberg relates two of the people said the IPO of thestake in Hapag, Germany's biggest container line, would happennext year, possibly in the second quarter."TUI hasn't made any decision yet on how to dispose of its stakein Hapag," said Robin Zimmermann, a spokesman for TUI, bytelephone, according to Bloomberg. "We are still examining alloptions to dispose of the stake to generate a maximum of value forTUI's shareholders."TUI holds 43% in Hapag and said Sept. 22 that its stake willincrease to 49.8% by the end of the year after some debt isrefinanced, Bloomberg discloses. The increase of its stake is theresult of the conversion of a hybrid loan for Hapag into equity,Bloomberg says, citing the company's statement in September.Bloomberg notes TUI has repeatedly said it wants to dispose of itsstake in Hapag to focus on tourism.TUI AG -- http://www.tui-group.com/en/-- is a Germany-based company mainly engaged in the tourism sector, focusing on themarkets of Central, Northern and Western Europe. TUI owns anetwork of travel agencies and tour operators, including airtours, Thomson, First Choice and TUI Deutschland. It alsooperates several airlines, including Corsairfly, Thomsonfly andFirst Choice Airways, among others. The Company is structuredinto three segments: TUI Travel, TUI Hotels and Resorts, andCruises. TUI Travel comprises the Company's distribution, touroperating, airline and incoming activities and services over 30million customers in 180 countries. The TUI Hotels and Resortsdivision offers a portfolio of 238 hotels, located in Spain,Greece, Egypt, France, Turkey, Tunisia, the Balearics and theCaribbean, among others. The Cruises sector comprises Hapag-LloydKreuzfahrten GmbH and TUI Cruises which provide luxury cruises,and cruises within the German-speaking countries, respectively. * * *As reported by the Troubled Company Reporter-Europe on Sept. 29,2010, Moody's Investors Service affirmed the Corporate FamilyRating and Probability of Default Rating of TUI AG at Caa1; theunsecured rating and the subordinated ratings are also affirmed atCaa2 and Caa3, respectively. Moody's said the outlook is changedto stable from negative.===========G R E E C E===========* GREECE: Corporate Bankruptcies Up 44% in 2010, ESEE Says----------------------------------------------------------Xinhua, citing National Confederation of Greek Trade (ESEE),reports that corporate bankruptcies in Greece increased by 44% in2010 on an annual basis due to the severe economic crisis that hashit the country.According to Xinhua, ESEE President Vassilis Korkidis, presentingthe organization's annual report, said that approximately one intwo major enterprises or 43.7% intend to proceed to massdismissals of employees in 2011.Xinhua relates noting the pessimistic projections of Greekentrepreneurs on the short-term future, regarding sales, revenuesand investments, Mr. Korkidis stressed that 65% of major companiesforecasts further drops in investments and 60% of small and bigenterprises expects less sales and revenues in 2011.=============I R E L A N D=============ALLIED IRISH: Fitch Cuts Rating on Tier 2 Subordinated Debt to B----------------------------------------------------------------Fitch Ratings has downgraded Allied Irish Banks plc's and Bank ofIreland's lower tier 2 subordinated debt to 'B' from 'BB' and 'BB'from 'BBB+', respectively. It has also downgraded AIB's uppertier 2 to 'CC' from 'B' Rating Watch Negative and tier 1 debtsecurities to 'CC' from 'B-' RWN and 'CCC'. The ratings of theUT2 and T1 securities are removed from RWN. The other ratings ofthe two banks are unaffected by this action.The rating action reflects Fitch's belief that the risks in thesubordinated debt instruments have worsened as a result of thefinancial package likely to be provided to Ireland by the IMF andEU, which could result in increased government ownership of thesetwo banks.Although the contents of the package are not yet known, Fitchexpects AIB and BoI to receive additional government capital. Inthe case of AIB, any extra capital is likely to bring the bankcloser to being 100% Irish government-owned. The agency believesthat the prospects of enforced burden sharing for T1, UT2 and LT2debt holders is much more likely, although still not certain, whengovernment ownership approaches or reaches100%.For BoI, the agency believes that Irish government ownership mayincrease from its current level of 36%, but will probably notreach 100%. Consequently, the agency continues to distinguishbetween the greater risk it sees in AIB's LT2 debt and thesmaller, but increased, risk it sees in BoI's LT2 debt.Allied Irish Banks -- Long-term IDR 'A-' unaffected; Negative Outlook -- Short-term IDR 'F1' unaffected -- Individual 'D/E' unaffected -- Support Rating '1' unaffected -- Support Rating Floor 'A-' unaffected -- Commercial paper 'F1' unaffected -- Senior unsecured notes 'A-' unaffected -- Sovereign-guaranteed notes 'A+' unaffected -- Sovereign-guaranteed deposits 'A+' unaffected -- Sovereign-guaranteed interbank liabilities 'A+' unaffected -- Sovereign-guaranteed deposits 'F1' unaffected -- Sovereign-guaranteed commercial paper 'F1' unaffected -- Sovereign-guaranteed interbank liabilities 'F1' unaffected -- Lower tier 2 subordinated debt downgraded to 'B' from 'BB' -- Upper Tier 2 downgraded to 'CC' from 'B' RWN -- Tier 1 (XS0257734037) downgraded to 'CC' from 'B-' RWN -- Tier 1 downgraded to 'CC' from 'CCC'Bank of Ireland -- Long-term IDR 'A-' unaffected; Negative Outlook -- Short-term IDR 'F1' unaffected -- Individual 'C/D' unaffected -- Support Rating '1' unaffected -- Support Rating Floor 'A-' unaffected -- Commercial paper 'F1' unaffected -- Senior unsecured notes 'A-' unaffected -- Sovereign-guaranteed notes 'A+' unaffected -- Sovereign-guaranteed deposits 'A+' unaffected -- Sovereign-guaranteed interbank liabilities 'A+' unaffected -- Sovereign-guaranteed deposits 'F1' unaffected -- Sovereign-guaranteed commercial paper 'F1' unaffected -- Sovereign-guaranteed interbank liabilities 'F1' unaffected -- Lower tier 2 subordinated debt downgraded to 'BB' from 'BBB+' -- Upper tier 2 'B' RWN unaffected -- Tier 1 'CCC' unaffectedANGLO IRISH: Strategy to Wind Down Loan Book Ready by January-------------------------------------------------------------BBC News reports that the Republic of Ireland's central bank hassaid that a strategy to wind down Anglo Irish Bank's loan bookshould be ready by the end of January.BBC says the plan will then be submitted for approval by Europeanand International Monetary Fund authorities.BBC relates in a statement the central bank said that Anglo'srestructuring plan would be submitted by the end of January, asagreed by Dublin and the European finance ministers. BBC notesthe central bank emphasized that it would take years to wind downAnglo's loans, required as part of Dublin's EUR85 billion (GBP72.1billion) bail-out.According to BBC, Anglo is likely to be split into two banks, withthe heavily-indebted "bad" half wound down or eventually sold.The bank is on course to cost the Republic's taxpayers betweenEUR29 billion and EUR34 billion by the time it is fully wounddown, BBC states. About Anglo Irish BankAnglo Irish Bank Corp PLC -- http://www.angloirishbank.com/-- operates in three core areas: business lending, treasury andprivate banking. The Bank's non-retail business is made up ofmore than 11,000 commercial depositors spanning commercialentities, charities, public sector bodies, pension funds, creditunions and other non-bank financial institutions. The Company'sretail deposits comprise demand, notice and fixed term depositaccounts from personal savers with maturities of up to two years.Non-retail deposits are sourced from commercial entities,charities, public sector bodies, pension funds, credit unions andother non-bank financial institutions. In addition, at Sept. 30,2008, its non-retail deposits included deposits from IrishLife Assurance plc. The Private Bank offers tailored products andsolutions for high net worth clients and operates the Bank'slending business in Ireland and the United Kingdom. * * *As reported by the Troubled Company Reporter-Europe on Oct. 29,2010, 2010, Standard & Poor's Ratings Services lowered its ratingon Anglo Irish Bank Corp. Ltd.'s nondeferrable dated subordinateddebt (lower Tier 2) securities to 'D' from 'CCC'. The downgradeof the lower Tier 2 debt rating reflects S&P's opinion that thebank's exchange offer is a "distressed exchange" and tantamount todefault in accordance with its criteria.ANGLO IRISH: DBRS Cuts Ratings on Subordinated Notes to 'D'-----------------------------------------------------------DBRS has downgraded the ratings of the Euro Dated SubordinatedNotes (specifically the EUR325.2 million Floating RateSubordinated Notes due 2014, EUR500 million Callable SubordinatedFloating Rate Notes due 2016 and the EUR750 million DatedSubordinated Floating Rate Notes due 2017) (collectively referredto as the 2017 Notes) issued by Anglo Irish Bank CorporationLimited (Anglo Irish or the Bank) to 'D' from 'C'. The downgradefollows the execution of the Bank's note exchange offer. Thedefault status for the exchanged and now-extinguished 2017 Notesreflects DBRS's view that bondholders were offered limitedoptions, which, as discussed in DBRS's press release dated October25, 2010, is considered a default per DBRS policy.Concurrently, DBRS has assigned a AA rating to the new FloatingRate Notes due 2011 (the New Notes) of Anglo Irish issued inconsideration of the tendered subordinated notes. The New Notesare eligible securities under the Irish Government's EligibleLiabilities Guarantee Scheme 2010 (ELG Scheme). As such, theratings reflect the Republic of Ireland's ability to honor theguarantee as determined by DBRS's rating of the sovereign. Therating is Under Review with Negative Implications, reflecting thereview status of the sovereign rating, which was placed underreview on October 5, 2010.Previously DBRS maintained one-rating on its website for all DatedSubordinated Debt maturing after September 29, 2010, issued byAnglo Irish. To reflect the results of the exchange offer, DBRShas individually listed each subordinate bond.BANK OF IRELAND: Plans to Raise EUR2.2 Billion in Capital---------------------------------------------------------BreakingNews.ie reports that Bank of Ireland has said it will betrying to raise almost EUR2.2 billion of capital by February.According to BreakingNews.ie, the move would bring the bank, whichis already 36% government-owned, close to nationalization.BreakingNews.ie relates the bank unveiled its plan just a dayafter the EUR85 billion rescue loan terms for Ireland were agreed.Headquartered in Dublin, Bank of Ireland --http://www.bankofireland.com/-- provides a range of banking and other financial services. These include checking and depositservices, overdrafts, term loans, mortgages, business andcorporate lending, international asset financing, leasing,installment credit, debt factoring, foreign exchange facilities,interest and exchange rate hedging instruments, executor, trustee,life assurance and pension and investment fund management, fundadministration and custodial services and financial advisoryservices, including mergers and acquisitions and underwriting.The Company organizes its businesses into Retail Republic ofIreland, Bank of Ireland Life, Capital Markets, UK FinancialServices and Group Centre. It has operations throughout Ireland,the United Kingdom, Europe and the United States. * * *As reported by the Troubled Company Reporter-Europe on Nov. 4,2010, Moody's Investors Service assigned A3/P-2 bank depositratings and a D+ bank financial strength rating to Bank of Ireland(UK) plc. Moody's said the outlook is stable.BANK OF IRELAND: Fitch Cuts Rating on Lower Tier 2 Debt to 'BB'---------------------------------------------------------------Fitch Ratings has downgraded Allied Irish Banks plc's and Bank ofIreland's lower tier 2 subordinated debt to 'B' from 'BB' and 'BB'from 'BBB+', respectively. It has also downgraded AIB's uppertier 2 to 'CC' from 'B' Rating Watch Negative and tier 1 debtsecurities to 'CC' from 'B-' RWN and 'CCC'. The ratings of theUT2 and T1 securities are removed from RWN. The other ratings ofthe two banks are unaffected by this action.The rating action reflects Fitch's belief that the risks in thesubordinated debt instruments have worsened as a result of thefinancial package likely to be provided to Ireland by the IMF andEU, which could result in increased government ownership of thesetwo banks.Although the contents of the package are not yet known, Fitchexpects AIB and BoI to receive additional government capital. Inthe case of AIB, any extra capital is likely to bring the bankcloser to being 100% Irish government-owned. The agency believesthat the prospects of enforced burden sharing for T1, UT2 and LT2debt holders is much more likely, although still not certain, whengovernment ownership approaches or reaches100%.For BoI, the agency believes that Irish government ownership mayincrease from its current level of 36%, but will probably notreach 100%. Consequently, the agency continues to distinguishbetween the greater risk it sees in AIB's LT2 debt and thesmaller, but increased, risk it sees in BoI's LT2 debt.Allied Irish Banks -- Long-term IDR 'A-' unaffected; Negative Outlook -- Short-term IDR 'F1' unaffected -- Individual 'D/E' unaffected -- Support Rating '1' unaffected -- Support Rating Floor 'A-' unaffected -- Commercial paper 'F1' unaffected -- Senior unsecured notes 'A-' unaffected -- Sovereign-guaranteed notes 'A+' unaffected -- Sovereign-guaranteed deposits 'A+' unaffected -- Sovereign-guaranteed interbank liabilities 'A+' unaffected -- Sovereign-guaranteed deposits 'F1' unaffected -- Sovereign-guaranteed commercial paper 'F1' unaffected -- Sovereign-guaranteed interbank liabilities 'F1' unaffected -- Lower tier 2 subordinated debt downgraded to 'B' from 'BB' -- Upper Tier 2 downgraded to 'CC' from 'B' RWN -- Tier 1 (XS0257734037) downgraded to 'CC' from 'B-' RWN -- Tier 1 downgraded to 'CC' from 'CCC'Bank of Ireland -- Long-term IDR 'A-' unaffected; Negative Outlook -- Short-term IDR 'F1' unaffected -- Individual 'C/D' unaffected -- Support Rating '1' unaffected -- Support Rating Floor 'A-' unaffected -- Commercial paper 'F1' unaffected -- Senior unsecured notes 'A-' unaffected -- Sovereign-guaranteed notes 'A+' unaffected -- Sovereign-guaranteed deposits 'A+' unaffected -- Sovereign-guaranteed interbank liabilities 'A+' unaffected -- Sovereign-guaranteed deposits 'F1' unaffected -- Sovereign-guaranteed commercial paper 'F1' unaffected -- Sovereign-guaranteed interbank liabilities 'F1' unaffected -- Lower tier 2 subordinated debt downgraded to 'BB' from 'BBB+' -- Upper tier 2 'B' RWN unaffected -- Tier 1 'CCC' unaffectedEIRCOM GROUP: May Breach Loan Covenants; Assesses Options---------------------------------------------------------John Glover and Finbarr Flynn at Bloomberg News report thatEircom Group said it may breach the terms of its loans asIreland's austerity measures imposed to combat the collapse of thebanking system force consumers to cut spending.Bloomberg relates Eircom's Chief Financial Officer Peter Crosssaid on a conference call on Friday that the company, which has toservice EUR3.15 billion (US$4.2 billion) of debt used to fund itsbuyout by Temasek Holdings Pte Ltd., is assessing its options."We have positive headroom as of September, so it is something wehave some time to deal with," said Mr. Cross said, according toBloomberg. Mr. Cross reiterated he's confident Eircom can avoiddefault with an equity injection or by renegotiating the covenantswith lenders, Bloomberg discloses.Bloomberg notes Eircom said in a statement declining revenue hascombined with "high" debt levels to push the company close to acovenant breach. Eircom, as cited by Bloomberg, said thecompany's loan covenants may be violated in the next 12 months ifno action is taken.Headquartered in Dublin, Ireland, Eircom Group --http://www.eircom.ie/-- is an Irish telecommunications company, and former state-owned incumbent. It is currently the largesttelecommunications operator in the Republic of Ireland andoperates primarily on the island of Ireland, with a point ofpresence in Great Britain.FOUR STAR: High Court Confirms Appointment of Examiner------------------------------------------------------The Irish Times reports that the High Court has confirmed theappointment of an examiner to the Four Star Pizza takeaway chainafter being told that an independent accountant believes it has areasonable prospect of survival if certain steps are taken.The Irish Times relates Neil Hughes of Hughes Blake, who wasappointed interim examiner earlier this month, was confirmed asexaminer on Monday by Mr. Justice Brian McGovern.According to The Irish Times, Four Star Pizza Ltd and its holdingparent company, Zowington Ltd, had sought the court's protectionbecause it was insolvent and unable to pay its debts.The Irish Times notes Rossa Fanning, for Mr. Hughes, said thecompany's outlets in Athlone, Cavan and Waterford had closed.Ms. Fanning, as cited by The Irish Times, said the examiner hopedas few of them as possible would shut, but the number could riseto seven.The court heard previously that, while Four Star had made smallprofits last year and so far this year, its troubles were theresult of increased competition, the downturn in the economy anddifficulty for franchisees with paying rents, The Irish Timesrecounts.Four Star Pizza Ltd has 40 outlets and is the second largesttakeaway franchise in Ireland, employing 29 people directly and400 indirectly.MCINERNEY GROUP: Oaktree Seeks Approval to Acquire Two Units------------------------------------------------------------Gavin Daly at The Sunday Business Post Online reports thatinternational investment firm Oaktree Capital has sought thego-ahead from the Competition Authority to buy two firms in theMcInerney building group.According to The Post, the authority has started a preliminaryinvestigation into the proposed acquisition of McInerney Homes andMcInerney Contracting by an Oaktree company called Pilgrim.The Post notes McInerney group has been in examinership sinceSeptember, with its 100-day period of court protection due to runout at the end of this week.Oaktree has been trying to strike a deal to buy McInerney'sEUR113 million debt from its banks -- Anglo Irish Bank, Bank ofIreland and KBC -- for EUR25 million, The Post discloses.Unsecured creditors would get 7% of what they are owed under theOaktree proposal, The Post states.The Post relates the majority of McInerney's creditors backedOaktree's EUR48 million rescue scheme for the business at ameeting on Friday.The examiner, Billy O'Riordan of PricewaterhouseCoopers, will nowseek High Court approval for the plan, The Post says.McInerney Holdings plc -- http://www.mcinerneyholdings.eu/-- is a home builder and regional home builder in the North and Midlandsof England. It also undertakes commercial and leisure projects inIreland, United Kingdom and Spain. It operates in Ireland, theUnited Kingdom and Spain. The main trading activities of theCompany's Irish home building business during the year endedDecember 31, 2008, consisted of construction of private houses,trading in developed sites and land, development of residentialland for third-parties and in joint-ventures, and contracting forthird-parties. The Company's commercial property developmentdivision, Hillview Developments Ltd (Hillview), developsindustrial units in the Greater Dublin area. Hillview completed1,223 square meters of industrial units as of December 31, 2008.Its Spanish division, Alanda Group, is developing freeholdapartment schemes. As of December 31, 2008, the Company completed1,359 private and contracting residential units in Ireland, theUnited Kingdom and Spain.* S&P Changes Ratings on Irish Banks; Retains CreditWatch Negative------------------------------------------------------------------Standard & Poor's Ratings Services said that it has revised itsratings on these Irish banks: S&P has lowered the counterpartycredit ratings on Anglo Irish Bank Corp. Ltd. to 'B/B' from'BBB/A-2'. The ratings remain on CreditWatch with negativeimplications.S&P has lowered the long-term counterparty credit rating on AlliedIrish Banks PLC to 'BBB' from 'BBB+', and placed it, and the 'A-2'short-term counterparty credit rating, on CreditWatch negative.At the same time, S&P has lowered its ratings on AIB's whollyowned U.K. subsidiary, AIB Group (UK) PLC to 'BBB-/A-3' from'BBB/A-2', and placed them on CreditWatch negative. Further, S&Phas lowered AIB's lower Tier 2 subordinated debt rating by threenotches to 'B' from 'BB'. S&P continue to factor four notches ofsupport into the counterparty credit ratings on AIB above itsrevised 'bb-' stand-alone credit profile.S&P has lowered the long-term counterparty credit rating on Bankof Ireland to 'BBB+' from 'A-', and placed it, and the 'A-2'short-term counterparty credit rating, on CreditWatch negative.In addition, S&P has lowered BOI's lower Tier 2 subordinated debtrating by two notches to 'BB-' from 'BB+'. S&P continue to factorfour notches of support into the counterparty credit ratings onBOI above its revised 'bb' SACP. S&P has lowered the long-termcounterparty credit rating on Irish Life & Permanent PLC to 'BBB'from 'BBB+', and placed it, and the 'A-2' short-term counterpartycredit rating, on CreditWatch negative. In addition, S&P haslowered IL&P's lower Tier 2 subordinated debt rating by one notchto 'BB-' from 'BB'. S&P has lowered its view of the SACP ofIL&P's banking operations to 'bb' from 'bb+', but maintain twonotches of support above the 'bb+' SACP of IL&P (which in turnincorporates a one-notch uplift for its view of the betterfinancial strength of its life insurance operations). S&P haslowered the long-term counterparty credit and insurer financialstrength ratings on Irish Life Assurance PLC to 'BBB' from 'BBB+',and placed them on CreditWatch negative, in line with its bankingparent.In addition S&P lowered ILA's junior subordinated debt rating byone notch to 'BB+' from 'BBB-'.The rating action does not affect those issuances by these fourbanks which are guaranteed by the Republic of Ireland.S&P has lowered the long- and short-term counterparty creditratings on Barclays Bank Ireland PLC to 'A+/A-1' from 'AA-/A-1+',and placed them on CreditWatch negative.S&P has placed the 'A/A-1' long- and short-term counterpartycredit ratings on Ulster Bank Ltd. and core Irish subsidiary,Ulster Bank Ireland Ltd., on CreditWatch negative.S&P has placed the 'A-/A-2' long- and short-term counterpartycredit ratings on KBC Bank Ireland PLC on CreditWatch negative. Domestically Owned BanksThe rating actions follow a turbulent period for the Irish bankingsystem, which in S&P's view has led to the fortunes of the Irishsovereign becoming increasingly intertwined with those of itsbanking system. On Nov. 23, 2010, S&P lowered the ratings on theRepublic of Ireland to A/Watch Neg/A-1 from AA-/Negative/A-1+,reflecting its view that the government will have to shoulderadditional costs associated with further capital injections intoIreland's troubled banking system.In recent months, S&P saw that the domestically owned Irish bankshave struggled to source term funding, even when governmentguaranteed. S&P also observed that the banks have also sufferedsignificant deposit outflows from institutional clients and becomehighly reliant on central bank funding. S&P expects no near-termrespite and S&P believes the prospects for these banks to returnto near stand-alone funding profiles in the medium term arereceding.In addition, S&P considers that the path back to profitability forthese banks is likely to be even more difficult than S&Ppreviously expected, based on its revised expectations for lowereconomic growth in Ireland (S&P now expects close to zero nominalGDP growth for 2011 and 2012 and S&P does not envisage GDPexceeding 2% a year in real terms before 2013). This view alsoreflects the multiple pressures S&P observes on liability spreads,arising from increased wholesale funding costs and high depositcompetition squeezing margins, and the banks' limited ability tomeaningfully offset this through further asset repricing.Taken together, S&P considers that the funding pressures andweaker profitability outlook have led to a weakening in thedomestically owned banks' SACPs. The SACP takes into account allexisting government support S&P sees.The funding weakness of these banks has contributed to the Irishgovernment agreeing to request financial support from the EU andthe International Monetary Fund. The Irish government has statedthat a central element of the EU/IMF program will be to supportfurther deep restructuring and the restoration of the long-termviability and financial health of the Irish banking system. S&Punderstands some of this support may be directed towardsignificantly improving the capitalization of the mostsystemically important Irish banks.While this initiative may eventually succeed in addressinginvestors' current lack of confidence in the system, S&P considersthat it is likely to be a long, slow process for AIB, BOI, and ILPto wean themselves off this support.In S&P's view, these developments also indicate that the Irishgovernment's ability to provide further extraordinary support tothe banks has weakened, although this support could yet beforthcoming through the EU/IMF assistance program. While S&Pbelieves that considerable uncertainty remains, on balance S&P hasdecided to maintain for the time being the existing notches ofsupport factored into the ratings on the domestically owned banks.The CreditWatch placement indicates that S&P may take ratingaction in the event that the sovereign rating is further lowered,but also its intent to review the notches of explicit governmentsupport factored into the ratings and the banks' SACPs.Anglo Irish Bank Corp. Ltd.The rating actions on Anglo reflect S&P's view that the Irishgovernment may be forced to reconsider its current supportivestance toward Anglo's unguaranteed debt. S&P bases its view onthe role of the EU/IMF, which may force a new Irish government toreappraise the existing strong statements of support, and the factthat the Irish government has expressed its desire for Anglo to besplit into two and wound down over time. S&P considers Anglo tobe of lower systemic importance than AIB, BOI, and IL&P. Theratings on Anglo remain on CreditWatch negative, where they hadbeen placed on Jan. 26, 2010. S&P plans to resolve theCreditWatch placement once S&P has reviewed Anglo's restructuringplan. S&P would expect, on resolution of the CreditWatch, toclassify Anglo as a government-related entity. Depending on itsview of Anglo's role and link to the government, and its view ofits SACP, S&P could lower the ratings by one or more notches. Allied Irish Banks PLCThe rating actions on AIB reflect S&P's reassessment of its SACPin light of the weak market conditions. S&P considers AIB to be ahighly systemically important institution. S&P has lowered theratings on AIB's subordinated debt (lower Tier 2) by three notchesbecause S&P believes that the likelihood of AIB being whollynationalized has increased. If this occurs S&P would expect,based upon the experience that S&P has observed at nationalizedlenders Anglo Irish and Irish Nationwide (not rated), thatsubordinated bondholders may suffer loss. The ratings will remainon CreditWatch negative pending the outcome of the sovereignrating review. In addition, S&P could lower the ratings on AIB inparticular if S&P considers that the prospects for its SACP willdeteriorate further. Irish Life & Permanent PLCThe rating actions on IL&P reflect S&P's reassessment of the SACPof its banking operations in light of the weak market conditions.S&P considers IL&P to be a highly systemically importantinstitution. S&P has lowered the subordinated debt ratings onIL&P by one notch, thus maintaining the four-notch differentialfrom the counterparty credit rating. S&P notes that IL&P has notreceived any capital injections from the government. The ratingswill remain on CreditWatch negative pending the outcome of thesovereign rating review. S&P also notes that IL&P is one of twopreferred bidders (the other is a non-Irish institution) forgovernment-owned mortgage and savings lender, EBS (not rated).S&P understand that final bids are not required until mid-December. IL&P's management has stated that, if successful in thebid process, it intends to split its enlarged banking operationsfrom that of its life insurance company. Bank of IrelandThe rating actions on BOI reflect S&P's reassessment of the bank'sSACP in light of the weak market conditions. S&P considers BOI tobe a highly systemically important institution. S&P has loweredthe ratings on BOI's subordinated debt by two notches because S&Pperceive an incremental risk that these bondholders will berequired to share the burden of supporting the bank. The ratingswill remain on CreditWatch negative pending the outcome of thesovereign rating review, but S&P does anticipate that BOI's SACPmay emerge as the strongest of the domestically owned Irish banks.Despite the high level of support that S&P factors into theratings on BOI, S&P would currently not equalize them with thesovereign rating. Foreign-Owned, Domestically Active BanksS&P has also considered the immediate implications of thesovereign rating action on the three rated foreign-owned,domestically active banks: BBI, KBCI, and UBIL. While notsupported by the Irish government, these banks are typically ratedmore highly than their domestically owned peers due to S&P's viewson the likelihood of parental support.In S&P's view, these three banks have not seen the sort of stressexperienced by their domestic peers, particularly in access tofunding. However, under S&P's ratings methodology, S&P onlymaintain ratings on financial institution above that of thesovereign in exceptional circumstances. S&P only does so whereS&P conclude that the operating and financial characteristics ofan entity provide a high probability that it can meet its debtobligations even when the sovereign cannot. Barclays Bank Ireland PLCThe ratings have been lowered to 'A+/A-1' from 'AA-/A-1+' andplaced on CreditWatch negative pending the outcome of thesovereign rating review. Given the exceptional circumstances S&Psee, S&P has not lowered the ratings to be in line with the 'A'sovereign rating, instead allowing a one-notch differential. Thisis because:* S&P sees no problem with BBI or its parent being able to find sufficient foreign or local currency to refund its liabilities and all deposits; In S&P's view, BBI would be very easily supported by its parent due to its small relative size and the fact that the parent is highly rated, not being a government- supported institution itself; and* Its core status reflects S&P's view that substantial support would be forthcoming. The CreditWatch placement reflects S&P's view that, if the sovereign rating is lowered again, S&P would likely lower the ratings on BBI, maintaining the one-notch differential. KBC Bank Ireland PLCThe ratings have been placed on CreditWatch negative pending theoutcome of the sovereign rating review. This is because:* While some of the factors cited with regard to BBI apply to KBCI, S&P does not see a convincing case to rate above the sovereign, not least because S&P views the bank as strategically important as opposed to core to a parent that is itself government-supported; and* While S&P still rates KBCI lower than the sovereign, the sovereign rating may yet be lowered by more than one notch, in which case S&P would likely lower the ratings on KBCI. Ulster Bank Ireland Ltd., Ulster Bank Ltd.The ratings have been placed on CreditWatch negative pending theoutcome of the sovereign rating review. This is because:* S&P considers that UBIL is core to U.K.-incorporated UBL, being about 70% of the consolidated assets, and highly integrated, and that a deterioration of UBIL would weaken UBL;* While some of the factors cited with regard to BBI apply in this case, S&P does not see a convincing case to rate above the sovereign, not least because UBL is strategically important to a parent that is itself government-supported;* UBIL is now rated the same as the sovereign, and if the sovereign rating is lowered again, S&P would likely lower the ratings on UBIL; and* If S&P lowered the ratings on UBIL S&P would likely do the same to those on UBL. Ratings List Downgraded; CreditWatch Action; Ratings Affirmed Anglo Irish Bank Corp. Ltd. To From -- ---- Counterparty Credit Rating B/Watch Neg/B BBB/Watch Neg/A-2 Senior Unsecured B/Watch Neg BBB/Watch Neg Allied Irish Banks PLC To From -- ---- Counterparty Credit Rating BBB/Watch Neg/A-2 BBB+/Negative/A-2 Senior Unsecured BBB/Watch Neg BBB+ Subordinated B/Watch Neg BB AIB Group (UK) PLC To From -- ---- Counterparty Credit Rating BBB-/Watch Neg/A-3 BBB/Negative/A-2 Irish Life & Permanent PLC To From -- ---- Counterparty Credit Rating BBB/Watch Neg/A-2 BBB+/Negative/A-2 Senior Unsecured BBB/Watch Neg BBB+ Subordinated BB-/Watch Neg BB Irish Life Assurance PLC To From -- ---- Counterparty Credit Rating BBB/Watch Neg/-- BBB+/Negative/-- Financial Strength Rating BBB/Watch Neg/-- BBB+/Negative/-- Junior Subordinated BB+/Watch Neg BBB- Bank of Ireland To From -- ---- Counterparty Credit Rating BBB+/Watch Neg/A-2 A-/Negative/A-2 Senior Unsecured BBB+/Watch Neg A- Subordinated BB-/Watch Neg BB+ Barclays Bank Ireland PLC To From -- ---- Counterparty Credit Rating A+/Watch Neg/A-1 AA-/Negative/A-1+ KBC Bank Ireland PLC To From -- ---- Counterparty Credit Rating A-/Watch Neg/A-2 A-/Stable/A-2 Senior Unsecured A-/Watch Neg A- Ulster Bank Ireland Ltd. Ulster Bank Ltd. To From -- ---- Counterparty Credit Rating A/Watch Neg/A-1 A/Stable/A-1 NB: This list does not include all ratings affected.===========R U S S I A===========HOME CREDIT: S&P Changes Outlook to Stable; Affirms 'B+' Rating---------------------------------------------------------------Standard & Poor's Ratings Services said that it revised itsoutlook on Russia-based Home Credit and Finance Bank LLC to stablefrom negative. At the same time, S&P affirmed the 'B+' long-termand 'B' short-term counterparty credit ratings on the bank."The outlook revision reflects S&P's view that the financialperformance of HCFB has improved owing to stabilizing operatingconditions in Russia," said Standard & Poor's credit analystVictor Nikolskiy. "In particular, the bank has recentlydemonstrated positive commercial dynamics and an improvement inits asset quality and funding profile."The ratings on HCFB continue to be constrained by the bank'sstrong focus on the consumer finance market, which S&P regards asinherently high risk, and a still relatively high, albeitlessening, reliance on wholesale funding. S&P considers thesenegative factors to be partly offset by the bank's adequate creditrisk management, increasingly diverse funding profile, and strongcapitalization. The ratings reflect HCFB's stand-alone creditprofile and do not include any uplift for extraordinary externalsupport. HCFB is owned by PPF Group N.V. (not rated). However,S&P note that HCFB has benefited from PPF's support, in terms ofcapital, funding, technology, risk management, and informationtechnology."The stable outlook reflects the gradually stabilizing operatingconditions in Russia, which S&P think have reduced externalpressures on the bank's liquidity and asset quality," saidMr. Nikolskiy.MOBILE TELESYSTEMS: Fitch Affirms 'BB+' Issuer Default Ratings--------------------------------------------------------------Fitch Ratings has changed Russia-based Sistema Joint StockFinancial Corp.'s and subsidiary OJSC Mobile TeleSystems'sOutlooks to Positive from Stable. Sistema's Long-term foreign andlocal currency Issuer Default Ratings have been affirmed at 'BB-',respectively, and its foreign and local currency senior unsecuredratings affirmed at 'BB-'. Sistema's national long-term ratingwas affirmed at 'A+(rus)' and assigned a Positive Outlook and itsnational senior unsecured rating was affirmed at 'A+(rus)'.A full rating breakdown of Fitch's rating actions on MTS isdetailed below.The Outlook change reflects Fitch's expectation that Sistema willbe able to reduce debt at the holding level, including off-balanceliabilities, and to improve leverage to below 2.5x net debt(including off-balance sheet debt)/dividends on a sustainablebasis. This will likely require a cap on Sistema's debt exposureat its loss-making Indian telecom subsidiary, Sistema ShyamTeleServices Ltd.Sistema has achieved notable deleveraging on a group-wide basis.Net debt/EBITDA ratio improved to 1.7x at end-Q210 on an LTM basisfrom 2.4x at end-2009. The key contributor to this was improvingoperating and financial performance of Bashneft, Sistema's oil andenergy subsidiary, and debt reduction as a result of Sistema'sasset swap with the Svyazinvest group. In addition, corporatereorganization at Bashneft and a merger of MTS and Comstar allowedSistema to substantially reduce the amount of debt at the holdinglevel; this declined to US$2,557 million at end-Q210 from US$4,276million at end-Q209.However, Sistema's off-balance sheet liabilities significantlyincreased and remain substantial, primarily as a result of rapidexpansion at Shyam. An expected US$600 million investment by theRussian government into Shyam's equity will likely be guaranteedby Sistema.Shyam's operating and financial performance and its strategicpositioning remain a key constraint on Sistema's credit quality.In Q210 Shyam generated a US$85 million EBITDA loss onUS$23 million of revenues. The Indian mobile market is extremelycompetitive, penetration is already high in key metropolitan areasand ARPUs are low which calls into question the longer-termviability of all new entrants including Shyam.Sistema's ratings continue to be supported by its strong operatingand financial performance, robust free cash generation and modestleverage at MTS. In view of MTS's low leverage of 0.8x netdebt/EBITDA at LTM to Q310, Sistema retains a flexibility toincrease dividend from this company without jeopardizing MTS'sstand-alone ratings.Sistema's currency risks declined considerably over the past 12months. The proportion of rouble debt increased to 63% at thegroup level and 66% at the holdco level at end-Q210 from 33% and39% respectively at end-Q209. The group's and holdco's maturityprofiles have improved since Q209; Sistema does not facerefinancing risks till end-2011.MTS rating actions: -- Long-term foreign currency IDR affirmed at 'BB+'; Outlook changed to Positive from Stable -- Short-term foreign currency IDR affirmed at 'B' -- Senior unsecured foreign currency rating affirmed at 'BB+' -- Long-term local currency IDR affirmed at 'BB+'; Outlook changed to Positive from Stable -- Short-term local currency IDR affirmed at 'B' -- Senior unsecured local currency rating affirmed at 'BB+' -- National Long-term rating affirmed at 'AA(rus)'; Outlook changed to Positive from Stable -- National senior unsecured rating affirmed at 'AA(rus)'RUSSIAN STANDARD: S&P Gives Stable Outlook; Affirms 'B+' Rating---------------------------------------------------------------Standard & Poor's Ratings Services said that it revised itsoutlook on Russian Standard Bank CJSC to stable from negative. Atthe same time, S&P affirmed its 'B+' long-term and 'B' short-termcounterparty credit ratings on the bank. In addition, the 'ruA'Russia national scale rating was affirmed."The outlook revision reflects S&P's view that the financialperformance of Russian Standard Bank has improved on the back ofstabilizing operating conditions in Russia," said Standard &Poor's credit analyst Ekaterina Trofimova.Specifically, asset quality and profitability have improved andthe bank has increased its funding base via customer deposits.S&P regard RSB as having a leading position in Russia's consumerfinance market with a dominant market share of the credit cardbusiness (36.8%), as well as sound credit risk management and debtcollection. However, S&P considers these positive rating factorsto be tempered by high lending risks, which are typical forunsecured consumer lending, and still relatively high, albeitreducing, wholesale debt.With total assets of $4.4 billion as of Sept. 30, 2010, RSB ranksamong the top-30 Russian banks. In response to a deep recessionin Russia that began in the fourth quarter of 2008, RSBsubstantially decreased its loan portfolio. Following Russia'semergence from recession, RSB has resumed its issuance of creditcards and point-of-sale loans. S&P understands that the bank istargeting a continuation of this growth in 2011. RSB'snonperforming loans decreased to 2.7% of total loans as of Sept.30, 2010, from 5.4% as of year-end 2009. At the same time, theannual rate of net charge-offs for loans was a high 11.32% for theyear to Sept. 30, 2010, which S&P views as typical for consumerfinance banks. S&P notes that problem-loan indicators point to amarked improvement in the portfolio's performance in 2010, as wellas good results in debt collection. S&P expects theseimprovements to continue in 2011 due to stabilizing economicconditions in Russia."The stable outlook reflects stabilizing operating conditions inRussia, which S&P think reduce pressure on the bank's liquidityand asset quality," said Ms. Trofimova.SISTEMA JOINT: Fitch Affirms 'BB-' Issuer Default Ratings---------------------------------------------------------Fitch Ratings has changed Russia-based Sistema Joint StockFinancial Corp.'s and subsidiary OJSC Mobile TeleSystems'sOutlooks to Positive from Stable. Sistema's Long-term foreign andlocal currency Issuer Default Ratings have been affirmed at 'BB-',respectively, and its foreign and local currency senior unsecuredratings affirmed at 'BB-'. Sistema's national long-term ratingwas affirmed at 'A+(rus)' and assigned a Positive Outlook and itsnational senior unsecured rating was affirmed at 'A+(rus)'.A full rating breakdown of Fitch's rating actions on MTS isdetailed below.The Outlook change reflects Fitch's expectation that Sistema willbe able to reduce debt at the holding level, including off-balanceliabilities, and to improve leverage to below 2.5x net debt(including off-balance sheet debt)/dividends on a sustainablebasis. This will likely require a cap on Sistema's debt exposureat its loss-making Indian telecom subsidiary, Sistema ShyamTeleServices Ltd.Sistema has achieved notable deleveraging on a group-wide basis.Net debt/EBITDA ratio improved to 1.7x at end-Q210 on an LTM basisfrom 2.4x at end-2009. The key contributor to this was improvingoperating and financial performance of Bashneft, Sistema's oil andenergy subsidiary, and debt reduction as a result of Sistema'sasset swap with the Svyazinvest group. In addition, corporatereorganization at Bashneft and a merger of MTS and Comstar allowedSistema to substantially reduce the amount of debt at the holdinglevel; this declined to US$ 2,557 million at end-Q210 fromUS$4,276 million at end-Q209.However, Sistema's off-balance sheet liabilities significantlyincreased and remain substantial, primarily as a result of rapidexpansion at Shyam. An expected US$600 million investment by theRussian government into Shyam's equity will likely be guaranteedby Sistema.Shyam's operating and financial performance and its strategicpositioning remain a key constraint on Sistema's credit quality.In Q210 Shyam generated a US$85 million EBITDA loss onUS$23 million of revenues. The Indian mobile market is extremelycompetitive, penetration is already high in key metropolitan areasand ARPUs are low which calls into question the longer-termviability of all new entrants including Shyam.Sistema's ratings continue to be supported by its strong operatingand financial performance, robust free cash generation and modestleverage at MTS. In view of MTS's low leverage of 0.8x netdebt/EBITDA at LTM to Q310, Sistema retains a flexibility toincrease dividend from this company without jeopardizing MTS'sstand-alone ratings.Sistema's currency risks declined considerably over the past 12months. The proportion of rouble debt increased to 63% at thegroup level and 66% at the holdco level at end-Q210 from 33% and39% respectively at end-Q209. The group's and holdco's maturityprofiles have improved since Q209; Sistema does not facerefinancing risks till end-2011.MTS rating actions: -- Long-term foreign currency IDR affirmed at 'BB+'; Outlook changed to Positive from Stable -- Short-term foreign currency IDR affirmed at 'B' -- Senior unsecured foreign currency rating affirmed at 'BB+' -- Long-term local currency IDR affirmed at 'BB+'; Outlook changed to Positive from Stable -- Short-term local currency IDR affirmed at 'B' -- Senior unsecured local currency rating affirmed at 'BB+' -- National Long-term rating affirmed at 'AA(rus)'; Outlook changed to Positive from Stable -- National senior unsecured rating affirmed at 'AA(rus)'STROYKREDIT BANK: Moody's Assigns 'B3' Rating to Senior Debt------------------------------------------------------------Moody's Investors Service has assigned a B3 long-term global localcurrency debt rating to the Stroykredit Bank's senior unsecureddebt. The rating carries a stable outlook. Any subsequent seniorunsecured debt issuance by Stroykredit Bank will be rated at thesame rating level subject to there being no material change in thebank's overall credit rating. -- Ru.Rub1000M 13.25% Senior Unsecured Regular Bond Due 2011 Ratings RationaleThe assigned rating is in line with Stroykredit Bank's globallocal currency deposit rating of B3. The rating is constrainedby: (i) narrow franchise; (ii) significant credit-riskconcentration and deteriorating asset quality; (iii) undiversifiedfunding base and (iv) weak corporate governance practices. At thesame time, BSK's historically good recurring earnings power andadequate capital cushion support the ratings. The rating does notincorporate any expectation of systemic support from theauthorities in case of need.Headquartered in Moscow, Russia, Stroykredit Bank reported totalIFRS assets of RUB13.15 billion (US$435 million) and net losses ofRUB667 million (US$22 million) according to IFRS at YE 2009.=====================================S E R B I A & M O N T E N E G R O=====================================AGROZIV DD: Perutnina Eyes Acquisition--------------------------------------Boris Cerni at Bloomberg News, citing STA newswire, reports that aSlovenian foodmaker Perutnina Ptuj d.d. is interested in acquiringAgroziv d.d., which is undergoing bankruptcy proceedings.According to Bloomberg, Stevan Moldovan, who is overseeing thebankruptcy process, as cited by the Slovenian state-ownednewswire, said Agroziv may be valued at EUR35.4 million (US$46.6million).Agroziv d.d. is a Serbian agribusiness firm. It is based in thecity of Pancevo.=========S P A I N=========AYT GENOVA: S&P Puts Credit Ratings on Notes on Watch Positive--------------------------------------------------------------Standard & Poor's Ratings Services placed on CreditWatch positiveits credit ratings on the class B, C, and D notes in AyT GenovaHipotecario VIII Fondo de Titulizacion Hipotecaria and AyT GenovaHipotecario IX Fondo de Titulizacion Hipotecaria. At the sametime, S&P affirmed its ratings on the class A2 notes in bothtransactions, and on all classes of notes in AyT GenovaHipotecario X Fondo de Titulizacion Hipotecaria.The Genova deals are Spanish residential mortgage-backedsecurities transactions backed by pools of first-ranking mortgagessecured over owner-occupied residential properties in Spain.Loans in Genova VIII were originated between September 2001 andDecember 2005, between January 2002 and May 2006 in Genova IX, andmainly between January 2005 and December 2006 in Genova X.Levels of credit enhancement available to the rated notes haveincreased since S&P's last review due to the deleveraging featureembedded in these transactions. The performance of the underlyingcollateral has so far been relatively stable.S&P's analysis indicates that as of the latest available investorreports (September 2010 for Genova X, October 2010 for Genova IX,and November 2010 for Genova VIII), the ratio of cumulativedefaults over the original collateral balance was 0.08% for GenovaVIII, 0.21% for Genova X, and 0.33% for Genova IX. (Defaultedloans in this securitization are defined as loans in arrears formore than 18 months.)Based on the current level of defaults and delinquencies in theunderlying portfolios, the structural features embedded in each ofthe transactions, and the increase in the level of creditenhancement available to the rated notes, S&P has affirmed thecurrent ratings on Genova Hipotecario X. For Genova VIII and IX,S&P believes a positive rating action is likely following afurther analysis of these transactions, so S&P has placed theratings on CreditWatch positive and affirmed the 'AAA (sf)'ratings. Ratings List AyT Genova Hipotecario VIII Fondo de Titulizacion Hipotecaria EUR2.1 Billion Mortgage-Backed Floating-Rate Notes Rating Affirmed A2 AAA (sf) Ratings Placed on CreditWatch Positive Rating ------ Class To From ----- -- ---- B A+ (sf)/Watch Pos A+ (sf) C BBB (sf)/Watch Pos BBB (sf) D BB (sf)/Watch Pos BB (sf) AyT Genova Hipotecario IX Fondo de Titulizacion Hipotecaria EUR1 Billion Mortgage-Backed Floating-Rate Notes Rating Affirmed A2 AAA (sf) Ratings Placed on CreditWatch Positive Rating ------ Class To From ----- -- ---- B A (sf)/Watch Pos A (sf) C BBB+ (sf)/Watch Pos BBB+ (sf) D BB- (sf)/Watch Pos BB- (sf) AyT Genova Hipotecario X Fondo de Titulizacion Hipotecaria EUR1.05 Billion Mortgage-Backed Floating-Rate Notes Ratings Affirmed Class Rating ----- ------ A2 AAA (sf) B A (sf) C BBB+ (sf) D BB- (sf)AYT GENOVA: S&P Affirms Rating on Class D Notes at 'BB- (sf)'-------------------------------------------------------------Standard & Poor's Ratings Services affirmed its credit ratings onall classes of notes in AyT Genova Hipotecario XI Fondo deTitulizacion Hipotecaria.The rating action follows S&P's analysis of the transaction'sperformance based on the September 2010 investor report. S&P hasdetermined that the performance and credit enhancement for AyTGenova Hipotecario XI is commensurate with the current ratings onthe notes.The notes are currently supported by credit enhancement of 5.94%for the class A notes, 4.05% for the class B notes, 2.29% for theclass C notes, and 1.04% for the class D notes.S&P's analysis indicates that as of September 2010, the ratio ofcumulative defaults (defaulted loans in this securitization aredefined as loans in arrears for more than 18 months) was 0.57% ofthe initial balance of the pool, and thus well below the firsttrigger level of 4% for the class D notes.As of September 2010, the reserve fund has been partially used andis at 82% of its required level. Nevertheless, S&P believes thatcredit enhancement levels are sufficient to maintain the ratingson all classes of notes.Based on the current level of defaults and delinquenciesexperienced by the underlying portfolio and the structuralfeatures protecting the rated notes, the transaction is in S&P'sopinion performing well, which supports S&P's affirmation of itsratings on all classes of notes.The Genova deals are Spanish residential mortgage-backedsecurities transactions backed by pools of first-ranking mortgagessecured over owner-occupied residential properties in Spain. TheSpanish subsidiary of Barclays Bank PLC originated the loans,which were underwritten to include lower loan-to-value ratios andhigher borrower income levels than typically seen. Thetransaction closed in December 2007. Ratings List AyT Genova Hipotecario XI Fondo de Titulizacion Hipotecario EUR1.2 Billion Mortgage-Backed Floating-Rate Notes Ratings Affirmed Class Rating ----- ------ A1 AAA (sf) A2 AAA (sf) B A (sf) C BBB+ (sf) D BB- (sf)===========T U R K E Y===========TOPLU KONUT: Fitch Gives Positive Outlook; Affirms 'BB+' Rating---------------------------------------------------------------Fitch Ratings has revised the Outlook on Turkey's Toplu KonutIdaresi Baskanligi to Positive from Stable, following the agency'ssovereign rating action earlier this week.The agency has also affirmed TOKI's Long-term foreign and localcurrency ratings at 'BB+', respectively. Its National Long-termrating has been affirmed at 'AA+(tur)' with Stable Outlook.On 24 November, Fitch revised the Outlook on the Republic ofTurkey's Long-term foreign currency and local currency IssuerDefault ratings of 'BB+' to Positive from Stable.TOKI's ratings are credit linked to the sovereign because of itsspecial public sector status, the sovereign's tight control,through the Prime Minister's Office, over the entity and itsimportant role in the government's housing policy.* Fitch Gives Positive Outlook on Istanbul's 'BB+' Ratings----------------------------------------------------------Fitch Ratings has revised the Outlook on Metropolitan Municipalityof Istanbul's ratings to Positive and affirmed the ratings: -- Long-term foreign currency rating: affirmed at 'BB+'; Outlook revised to Positive from Stable -- Long-term local currency rating: affirmed at 'BB+'; Outlook revised to Positive from Stable -- National Long-term rating: affirmed at 'AA(tur); Outlook revised to Positive from Stable -- Short-term foreign currency rating: affirmed at 'B'The rating action follows the revision of the Outlook on theRepublic of Turkey's Long-term foreign currency and local currency'BB+' Issuer Default Ratings to Positive from Stable.The ratings reflect Istanbul's strong socio-economic profile andcontinued sound fiscal performance. The ratings also take intoaccount sharply rising direct risk, in particular from the publicentity IETT (Istanbul City Bus and Public Transport Authority) andits significant capital expenditure needs. IETT's debt has beenconsidered in the overall assessment of Istanbul as it is not selfsupporting. MMI's direct debt, and the Fitch classified debt ofIETT, is increasing, largely due to transport-related investments.However MMI's total public-sector debt is still manageable, givenstrong operating margins and still moderate debt dynamics.Nevertheless, its financial position is being stretched, withsignificant foreign currency risk and challenging liquiditymanagement.Istanbul's operating performance remained resilient in challengingeconomic conditions in 2009 due to its large and diversified localtax base. With the recovery of the economy in 2010, Istanbulexpects to outperform its revenue budget. However, risinginterest payments due to a higher debt burden have accounted foran increasing portion of operating balance and may result inrelatively lower current margins from previous years, at mid-40%levels during 2010-2012, although margins are still expected to bestrong. Capital expenditure accounts for more than 60% of totalspending. Large transport-related projects, which might bedifficult to postpone, account for an increasing proportion ofcapital expenditure, limiting flexibility compared with previousyears. However, the administration ultimately maintains controlof the rate of investment.With almost 13 million inhabitants (18% of the nationalpopulation), Istanbul plays a key role in Turkey's economy, as itis the country's main financial and commercial centre. Itsresponsibilities are focused on investment, primarily in transportinfrastructure, and the provision of municipal services such aspublic transport and water. Its main source of revenue is taxescollected by central government and shared among the metropolitanmunicipalities on which Istanbul has no rate setting discretion.=============U K R A I N E=============ZHYTOMYRSKI LASOSCHI: Faces Liquidation Amid Ownership Dispute--------------------------------------------------------------Interfax-Ukraine, citing Uriadovy Kurier newspaper, reports thatCJSC Zhytomyrski Lasoschi is to go into liquidation.The decision on the liquidation of Zhytomyrski Lasoschi throughthe merger with Kyiv-based Budstyle-XXI was made at anextraordinary general meeting of the CJSC's shareholders held onNovember 20, 2010, Interfax-Ukraine says, citing a report of theliquidation commission.According to Interfax-Ukraine, the report said the claims ofcreditors can be submitted within two months.Interfax-Ukraine notes control over the company is being fought byU.S. citizens Yuriy Leschynsky and Roman Katznelson on the oneside, and Ihor Boiko on the other.The conflict over Zhytomyrski Lasoschi became public when theinvestigation department of the tax police in Zhytomyr region inApril 2010 opened a criminal case against non-payment of taxes onan especially large scale by Zhytomyrski Lasoschi officials,Interfax-Ukraine recounts.Mr. Leschynsky, who at the start of the conflict was head of theCJSC's supervisory board, said Mr. Boiko has gained operatingcontrol over the company, Interfax-Ukraine discloses. Hisopponents tried to regain control, Interfax-Ukraine states.Interfax-ukraine notes Mr. Leschynsky said the former managementviolated the stockholders' rights to control finances, corporaterights and managerial decisions, as well as being involved inpolitical activity to the detriment of the confectionery'sinterests.CJSC Zhytomyrski Lasoschi is a confectionery maker.===========================U N I T E D K I N G D O M===========================AFREN PLC: S&P Assigns 'B-' Long-Term Corporate Credit Rating-------------------------------------------------------------Standard & Poor's Ratings Services said that it has assigned its'B-' long-term corporate credit rating to U.K.-based oil and gasexploration and production company Afren PLC. The outlook ispositive.S&P is assigning a 'B-' long-term rating to Afren PLC's proposedbonds.S&P's classification of Afren's business risk profile as"vulnerable" reflects the company's high Nigerian country risk,production concentration, and relatively small sized production.While Afren has assets in various African countries, S&P believesits production will likely remain concentrated in Nigeria(B+/Stable/B). Key related risks are important security issues,with a risk of disruptions especially to onshore oil production,and uncertainties surrounding the 2011 presidential elections.Although the new Petroleum Bill under discussion could also leadto fiscal changes, S&P believes these will not be detrimental forAfren.S&P classify Afren's financial risk profile as "aggressive," giventhe uncertain pace of acquisitions and potential future debtincreases, continued large capital spending needs for developingreserves, and the high dependence of cash flows on the successfulstartup of the Ebok field.On Sept. 30, 2010, the company had net debt of US$192 million (proforma for the acquisition by FHN)."The positive outlook reflects the possibility of a one-notchupgrade by year-end 2011," said Standard & Poor's credit analystLucas Sevenin."Such a move would hinge on favorable production and cash flows atthe Ebok field, improved visibility on any further acquisitions,as well as a further evidence of a supportive financial policy,particularly in terms of leverage and liquidity," said Mr.Sevenin.Secondarily, S&P will monitor uncertainties related to theupcoming presidential elections in Nigeria and ongoing securityrisks.Rating upside would be less likely in case of material delays inproduction start-up at the Ebok field, which S&P and the companyexpect by the end of 2010. Similarly, if Afren's Nigerian taxregime or royalties materially increase, or if sizable debt-fundedacquisitions occur and result in higher leverage than S&Pcurrently assume, an upgrade would be unlikely.AFREN PLC: Fitch Assigns 'B' Long-Term Issuer Default Rating------------------------------------------------------------Fitch Ratings has assigned African-based oil producer Afren plc aLong-term foreign currency Issuer Default Rating of 'B', andassigned Afren's upcoming US$ notes issue an expected foreigncurrency senior unsecured rating of 'B' and an expected recoveryrating of 'RR4'. The Outlook for the IDR is Stable. The finalsenior unsecured rating for the instrument is contingent uponreceipt of final bond documentation conforming materially toinformation already received by Fitch.Fitch's expected senior unsecured rating assigned to the notes isbased on the agency's assessment of possible limitations realizingcollateral granted for the benefit of noteholders. Fitch's viewsof recovery upon default are reflected in the 'RR4' rating.Fitch's recovery rating currently assumes maximum prior-rankingdebt of US$230 million in the company's capital structure. Ifthis amount were to increase significantly, the recovery ratingand senior unsecured rating of the notes could be negativelyimpacted.Afren's rating reflects its niche positioning in the Nigerianupstream oil production market with strong growth potential and anexperienced management team with developed local relationships.Afren's rating is influenced by its ability to commence and ramp-up production at the Ebok field largely on schedule and withinbudget, which should lead to its oil and gas production roughlytripling over the next 12 months (nine-month average production toSeptember 30, 2010 of 16.1 kboed) and leverage declining to agross adjusted forecast ratio below 1x in 2011.Fitch believes that the inherent execution risk in the Ebokdevelopment (e.g. delays and/or cost overruns) is mitigated to acertain extent by Afren's track record of successfully developingits projects (e.g. production at the Okoro Setu commenced in 2008at a rate of 3.1 kbopd and increased to an average of 18.8 kbopdin 2009), the advanced stage of Ebok's development, and the factthat this field is not technologically challenging (shallowwaters).The rating also reflects that in 2009, Afren was well placedcompared with its oil and gas peers based on its strongprofitability (EBITDAR margin of 72.1% and EBITDA per boe ofUS$26/boe) and cash flow generation (CFO/revenue of 75%).However, its leverage-related ratios (gross adjusted leverage of2.5x and gross adjusted debt to proven reserves of US$13.5/boe)were high compared with its counterparts. Fitch believes that theexpected improvement of the group's credit metrics following theimplementation of the expansion strategy will make it betterplaced among its peers.Furthermore, the rating takes into account Afren's small scale ofoperations and low reserves life compared with other oil and gascompanies rated in the 'B'/'BB' rating categories. The company'sability to book additional reserves is reliant on the success ofits exploration activities and/or acquisitions. Fitch believesthat Afren's prospective resources base of 2.3bn boe provideslarge exploration potential, the outcome of which, however,contains a high degree of uncertainty and risk.In addition, the rating considers a high concentration of theproducing assets base consisting of one field at present andexpected to be expanded to two fields from end-2010, which makesthe company more vulnerable to any disruption of operations at theassets. The rating also takes into consideration the highpolitical risk (including risk of militant attacks on oil and gasinfrastructure, etc) in Nigeria, the main country of Afren'soperations at present. The impact of this risk on the group'sbusiness and financial profile could be further exacerbated by thecompany's small size and production concentration primarily at twoassets (following commencement at Ebok).ANGLO IRISH: Dec. 2 Hearing Set for Request to Question Ex-Chief----------------------------------------------------------------Colm Keena at The Irish Times reports that a hearing will be heldon December 2 on Anglo Irish Bank's request to question its formerchief executive, David Drumm.The Irish Times relates Anglo has asked the U.S. Bankruptcy Courtfor the District of Massachusetts to allow it to question Mr.Drumm at the offices of its Boston lawyers in relation to hisapplication for bankruptcy. According to The Irish Times, Angloalso said it should be allowed to get access to certain documents.In support of its claim, the bank said it was Mr. Drumm's largestcreditor, being owed EUR8.5 million, The Irish Times notes.Judge Frank Bailey in Boston has advised the parties concernedthat he is going to hold a hearing on the matter on December 2,The Irish Times notes. The hearing is to be "non-evidentiary" innature, The Irish Times states. If, in the course of the hearing,the court decides there is a disputed and material issue of fact,it will schedule a further evidentiary hearing, The Irish Timessays, citing a notice posted Monday.Mr. Drumm has asked the court to reject or constrain the bank'sapplication that it be allowed to question him extensively abouthis debts to the bank, the circumstances behind his gettingresidency in the US and the litigation he is involved in with thebank in Ireland, according to The Irish Times. About Anglo Irish BankAnglo Irish Bank Corp PLC -- http://www.angloirishbank.com/-- operates in three core areas: business lending, treasury andprivate banking. The Bank's non-retail business is made up ofmore than 11,000 commercial depositors spanning commercialentities, charities, public sector bodies, pension funds, creditunions and other non-bank financial institutions. The Company'sretail deposits comprise demand, notice and fixed term depositaccounts from personal savers with maturities of up to two years.Non-retail deposits are sourced from commercial entities,charities, public sector bodies, pension funds, credit unions andother non-bank financial institutions. In addition, at Sept. 30,2008, its non-retail deposits included deposits from IrishLife Assurance plc. The Private Bank offers tailored products andsolutions for high net worth clients and operates the Bank'slending business in Ireland and the United Kingdom. * * *As reported by the Troubled Company Reporter-Europe on Oct. 29,2010, 2010, Standard & Poor's Ratings Services lowered its ratingon Anglo Irish Bank Corp. Ltd.'s non-deferrable dated subordinateddebt (lower Tier 2) securities to 'D' from 'CCC'. The downgradeof the lower Tier 2 debt rating reflects S&P's opinion that thebank's exchange offer is a "distressed exchange" and tantamount todefault in accordance with its criteria.ATRIUM EUROPEAN: S&P Raises Corporate Credit Rating to 'BB'-----------------------------------------------------------Standard & Poor's Ratings Services said that it raised its long-term corporate credit rating on Jersey-based real estate companyAtrium European Real Estate Ltd. to 'BB' from 'BB-'. The short-term corporate credit rating on Atrium is unchanged at 'B'. Theoutlook remains stable."The upgrade follows Atrium's improved operating performance inthe nine months to end-September, its successful deleveraging, andimprovements in its operating margins," said Standard & Poor'scredit analyst Maxime Puget. "It also takes into account S&P'sopinion that Atrium will pursue a prudent growth strategycommensurate with the quality and size of its real estateportfolio."Atrium owns, manages, and develops retail real estate propertiesin Central and Eastern Europe. On June 30, 2010, the market valueof its portfolio was EUR2.2 billion. S&P notes that the companyis subject to a litigation dating back to its existence as MeinlEuropean Land. As S&P is not at present able to assess the effectof this pending litigation on credit quality, S&P has not factoredit into the current ratings.The ratings on Atrium are constrained by S&P's view of the lack ofvisibility on the timing of the company's execution of its growthstrategy, as well as ongoing pressure on its portfolio assetvalues. Atrium also has a short track record of improvements incorporate governance, an area that in S&P's opinion remains key torestoring investor confidence.These negative factors are balanced by the company's improvedcapital structure and stronger credit metrics resulting from thedebt deleveraging; and what S&P considers an adequate liquidityposition, with no major debt refinancing in the next two years.In S&P's view, Atrium's stabilizing operating performance andsolid capital structure support the current ratings. S&P believesthat the company will maintain a prudent debt leverage until itsproperty portfolio is able to generate stable cash flows, albeitat a higher LTV ratio than currently. S&P also anticipate thatthe company will manage its development projects prudently.S&P could raise the ratings should the recovery in Atrium's mainreal estate markets prove to be more dynamic than S&P anticipate,providing higher rental growth prospects.Conversely, the ratings could come under pressure if marketconditions become more difficult than S&P anticipate, or if debt-financed acquisitions reduce the company's financial flexibility.S&P would also view negatively any unexpected change in thecapital structure or corporate governance that adversely affectsinvestors' confidence. Furthermore, the ratings could be loweredin the event that litigation results in additional liabilities forAtrium.BALL BROTHERS: Goes Into Administration---------------------------------------Balls Brothers has gone into administration.Morning Advertiser reports that Zolfo Cooper has been brought into lead the restructuring process and Zolfo Cooper said all siteswould continue trading with no immediate job losses.According to Morning Advertiser, it is believed that the companyhad repeatedly breached its banking covenants and owes BarclayBank GBP7 million.In the year to January 2009, Morning Advertiser notes, the lastaccounts at Companies House show that the company slumped from apost-tax profit of GBP2.6 million to a loss of GBP224,000.Last week, the report says, the group appointed a new interimchief operating officer following the departure of chief executiveChris Sullivan, who was appointed by the banks back in April.Headquartered in London, Balls Brothers is a wine bar andrestaurant operator.CATTLES: Reveals Rescue Plan to Avoid Administration----------------------------------------------------The Press Association reports that Cattles has unveiled a last-ditch rescue plan as part of a bid to stave off administration.According to the report, the company has put on the table a dealthat would see bondholders paid just GBP49 million of the GBP750million they are owed, while shareholders would receive 1p pershare. The Press Association relates that if the offer isrejected when shareholders and creditors are given the opportunityto vote in the new year, the management will put the company intoadministration.The report notes that the proposal was announced on the same daythe company released results showing it made a pre-tax loss ofGBP685.4 million in 2009, compared with a GBP764.6 million lossthe previous year.The Press Association notes bosses are hopeful that the rescuepackage will be approved because it already has the backing ofsome of its biggest creditors.The Press Association notes that it would be run by a "shell"company, called Bovess, under the same management team, and itwould continue to collect its loans, some of which have a lifespanof two years. The Press Association relates that it would alsoallow the company to preserve jobs, at least in the short-term, asit could gradually reduce its 2,800 staff, whereas administratorsmight make drastic redundancies.The terms of the offer have been thrashed out following weeks ofdiscussions with bondholders and banks, The Press Associationsays.The report relates that there are no plans to carry on lendingthrough its main trading arm, Welcome Finance. But its doorsteplending and debt collection businesses have now returned to profitand could continue trading for the foreseeable future, The PressAssociation adds.Headquartered in Batley, Cattles is a loan specialist.CONNAUGHT PLC: Auditor Policeman Probes PwC-------------------------------------------The accounting policeman said that it has begun a probe into howPwC audited the books of Connaught PLC, Reuters reports.According to Reuters, Connaught PLC went into administration inSeptember after its bank lenders, owed 215 million pounds, refusedit a second emergency loan.The Accountancy and Actuarial Discipline Board, part of theFinancial Reporting Council, said it has also launched aninvestigation into conduct of members of the Institute ofChartered Accountants in England and Wales (ICAEW), Reuters notes.The report says that the probes will look at how accounts wereprepared and approved for the year ended August 31, 2009, andinterim financial statements for the six months ended February 28,2010. About Connaught plcConnaught plc -- http://www.connaught.plc.uk/-- is a United Kingdom-based company engaged in the provision of integrated assetservices to the public and private sectors. The Company operatesin two business segments: social housing and compliance. SocialHousing segment provide social housing landlords throughout theUnited Kingdom with a range of planned and response maintenanceservices, as well as compliance and estate management. TheCompliance segment provides safety, health and risk managementsolutions. It has information, advisory, training and servicingcapabilities to provide integrated compliance solution throughoutthe United Kingdom. On July 22, 2009, the Company completed theacquisition of UK Fire (International) Limited and Igrox Limited.On September 15, 2008, the Company completed the acquisition ofLowe Group Holdings Ltd. On November 26, 2008, the Companycompleted the acquisition of certain assets of Predator PestControl Plc.EUROCASTLE CDO: S&P Junks Ratings on Two Classes of Notes---------------------------------------------------------Standard & Poor's Ratings Services lowered its credit ratings onEurocastle CDO II PLC's class A-2, B, C, D, and E notes. At thesame time, S&P affirmed the rating on the class A-1 notes.S&P's most recent rating action on Eurocastle CDO II took place inMay 2010, when S&P lowered its ratings on all classes of notes. Capital Structure Rtgs Rtgs Amount as Current CE as CurrentClass from to of May amount(%) of May(%) CE(%)----- ---- ---- --------- --------- --------- -------A-1 AA (sf) AA (sf) 190.51 187.59 34.41 29.67A-2 A (sf) BBB+ (sf) 33.00 33.00 23.05 17.30B BB+ (sf) BB (sf) 28.50 28.50 13.24 6.62C BB (sf) B- (sf) 8.75 8.88 10.22 3.29D B+ (sf) CCC- (sf) 10.00 10.06 6.78 0.00E B (sf) CCC- (sf) 3.12 3.15 5.70 0.00Sub. NR NR 13.50 13.50 N/A N/ANote: The amounts reported above are the amounts used in S&P'sanalysis leading to its rating actions both and in May.CE - Credit enhancement = (Performing balance + cash balance + recovery on defaulted obligations - tranche balance [including tranche balance of all senior tranches]) / (Performing balance + cash balance + recovery on defaulted obligations).NR - Not rated.NA -Not applicable.The rating actions follow S&P's assessment of a decrease in thecredit enhancement available for all rated notes compared with itsprevious rating action, mainly due to further defaults in theportfolio. The amount of defaulted assets currently accounts for10.1% of the total collateral, compared with 3.3% on the previousrating action date.As a result, the existing ratings on the class A-2, B, C, D, and Enotes are in S&P's opinion no longer commensurate with theavailable credit enhancement, and S&P has therefore lowered theratings on these notes. Transaction Key Features As of May Current --------- ------- Balance of performing assets 288.8 258.6 Number of defaulted assets 1 4 Balance of defaulted assets 10.0 29.7 Recovery value of defaulted assets 1.6 2.1 Principal cash 0.0 6.0 Total collateral 290.4 266.7 Weighted-average spread (%) 1.21 1.27 Senior par value ratio (%) 99.25 89.23 Mezzanine par value ratio (%) 92.48 82.93 Class A par value ratio (%) 111.82 100.76Note: The amounts reported above are the amounts used in S&P'sanalysis leading to its rating actions both and in May.On Nov. 3, S&P understand that the issuer notified the trusteethat an event of default had occurred following a breach of theclass A collateral test. On the same day, the trustee sent anotice to the noteholders, requesting that they disclose theirpositions and relay their directions in relation to the EurocastleCDO II notes.The terms of the notes provide that if an event of default istriggered, a portfolio liquidation can only occur if:* The trustee determines that the anticipated proceeds of a sale of the collateral based on an estimate obtained from an internationally recognized investment banking firm would allow all of the noteholders (including the subordinate classes) to be paid in full, and at least 51% by principal amount of the holders of the controlling class agree with such determination; or* Two thirds (by principal amount outstanding) of each of the class A, B, C, and D noteholders' consent to the sale of the collateral.In S&P's view, these conditions make it unlikely that theportfolio will be liquidated.The trustee has at present directed the portfolio manager toretain the collateral intact, collect all payments from thecollateral, and continue making payments in accordance with thepriorities of payments. S&P also received confirmation from themanager that there is no envisaged change in the priorities ofpayments.For these reasons, S&P believes that the occurrence of the eventof default, in and of itself, should not affect its ratings onthese notes.S&P will continue to monitor the collateral performance, as wellas the noteholders' directions to the trustee with regards to theEurocastle CDO II notes.Eurocastle CDO II is a cash collateralized debt obligation ofstructured finance assets--involving largely U.K. commercialmortgage-backed securities, residential mortgage-backedsecurities, and commercial asset-backed securities--managed byFortress Investment Group LLC. The transaction closed in May 2005and entered its post-reinvestment period in June 2010. Ratings List Eurocastle CDO II PLC EUR300 Million Senior and Mezzanine Deferrable-Interest Fixed- And Floating-Rate Notes Ratings Lowered Rating ------ Class To From ----- -- ---- A-2 BBB+ (sf) A (sf) B BB (sf) BB+ (sf) C B- (sf) BB (sf) D CCC- (sf) B+ (sf) E CCC- (sf) B (sf) Rating Affirmed Class Rating ----- ------ A-1 AA (sf)GHOST: Retail Tycoon Forced to Pay GBP2.5 Million-------------------------------------------------Jason Hesse at Real Business reports that Kevin Stanford, theentrepreneur who co-founded Karen Millen, has been forced to shellout GBP2.5 million of his own fortune after personallyguaranteeing a bank loan to his failed fashion brand Ghost, whichwent into administration in 2008.According to the report, Kevin Stanford had a 50% stake in Ghost,which had 32 stores in the UK when it fell into administration in2008, owing GBP5 million to Icelandic bank VB Investment Bank.The report notes the Daily Telegraph said that Iceland's SupremeCourt found Kevin Stanford personally liable for half of the loanto VB, since he owned half of Ghost jointly with investmentpartner Arev. The Daily Telegraph, Real Business says, said thata panel of three judges ruled that according to contractualdocuments, there was no collateral apart from Kevin Stanford's ownword that he would back the loan.Real Business relates that Ghost was later rescued fromadministration by Touker Suleyman, the owner of shirt retailerHawes & Curtis.Kevin Stanford co-founded Karen Millen and went on to own stakesin All Saints, House of Fraser and Mosaic -- all which wereIcelandic-backed businesses, Real Business discloses. Mr.Stanford, who once had a fortune of GBP220 million, lost controlof several of these investments when the Icelandic banking systemcollapsed in 2008, the report adds.Ghost is a fashion brand.GLAMALCO: Goes Into Administration; 140 Jobs Axed-------------------------------------------------Glamalco has made 140 people redundant before going intoadministration, BBC News reports.According to BBC News, sixteen staff have been retained to helpadministrators KPMG. The report relates that KPMG said theredundancies were made before the company went intoadministration."Glamalco has encountered cashflow difficulties, which hasresulted in its inability to fund ongoing construction contracts,and unfortunately, the business is unable to continue to trade.We will now be pursuing an orderly wind-down of the business," thereport quoted Joff Pope, joint administrator and associate partnerat KPMG, as saying.The administrators have been appointed for Glamalco and theholding company, Glamorgan Aluminium Co Ltd.Headquartered in Cardiff, Glamalco is an aluminium company. Thecompany, whose main site is on Ipswich Road, employs 156 staffacross three sites making and installing aluminium materials inthe construction industry. Glamalco has three sites - in Cardiff,Andover in Hampshire and Redditch in Worcestershire. The companywas created in the early 1970s as Glamorgan Aluminium with a staffof five working on shop fronts and domestic windows.LOCAL HEROES: Goes Into Administration--------------------------------------Local Heroes Pub Company has collapsed into administration.Paul Charity at Morning Advertiser reports that the company hasceased trading on Thursday, November 25, 2010.According to Morning Advertiser, two iconic York pubs hit by themove were Tap And Spile, in Monkgate and the Golden Fleece.Local Heroes Pub Company runs 18 pubs in the north-east. It ranoutlets within Northumberland, Durham, Teesside, North & WestYorkshire. The directors of Local Heroes are Bill Overin, AndyMullin and Ian Perrett.LOWRY HOMES: Enters Administration----------------------------------Rachel Constantine at Business Sale reports that KPMG has beencalled in to Lowry Homes, which has been placed intoadministration.According to the report, Paul Flint and Brian Green of KPMG arethe joint administrators to Lowry Homes, along with two otherbusinesses of the same group -- Lowry Properties and LowryRenaissance.Business Sale notes that KPMG is reported to have confirmed thatmost of the group's remaining properties, along with most of thestaff, were transferred over to Prospect before the administrationprocess began."The administrators are dealing with a number of remainingproperties, which are owned by the two group companies," thereport quoted KPMG as saying.It is understood that Prospect took on four development sites fromLowry Homes, the report notes.The last recorded accounts for Lowry Homes for the year to the endof December 2008 reveal revenues of GBP17.8 million and pre-taxlosses of GBP1.4 million, the report adds.Headquartered in Salford Quays, Lowry Homes, which was establishedin 1997, specialized in house building to include town houses,apartments, conversions and accommodation for the elderly. Itsparent Jackson Holdings is a large development company.QUIBELL CONSTRUCTION: Two Building Firms Go Into Administration---------------------------------------------------------------Aaron Morby at Construction Inquirer reports that two Hullbuilding firms that form a key part of the Quibell ConstructionGroup have been placed into administration.According to Construction Inquirer, administrators fromPricewaterhouseCoopers have axed more than 90 jobs from Quibell &Son (Hull) and Humber Joiners.The report notes that nine staff members at Quibell & Son (Hull)have been kept on to help wind down the companies. ConstructionInquirer relates that the two other businesses within the group,Quibell & Son Holding and Quibell & Son Development, continue tooperate normally.Mark Loftus of PricewaterhouseCoopers said that both companies hadbeen making losses for a several years, the report notes."Trading has suffered in recent years and the administration isclearly disappointing news for the stakeholders and employees inparticular," the report quoted Mr. Loftus as saying.The firms are understood to have been hit by Government spendingcutbacks and the delay of a significant contract which hitcashflows, Construction Inquirer says.Construction Inquirer adds that four months ago QuibellConstruction Group announced it was shutting down its stonemasonryand restoration division resulting in the loss of 15 jobs.Quibell & Son (Hull) traces a history stretching back nearly 135years, including building Hull's Guildhall building. It acted asthe main building contractor at the groupworking on hospital andschools projects, and had secured places on the Yorbuild frameworkcovering work valued up to GBP1 million.SHEFFIELD WEDNESDAY: Has Takeover Deal; Averts Administration-------------------------------------------------------------Michael Kavanagh at The Financial Times reports that Serbia-bornbusinessman Milan Mandaric has agreed to rescue SheffieldWednesday from the threat of administration by taking over thefootball club for a nominal GBP1 (US$1.6).According to the FT, the deal will see Mr. Mandaric, who haspreviously owned a string of clubs including Portsmouth, Charleroiof Belgium and Nice of France, pay up to GBP300,000 to HM Revenue& Customs to avert a winding up order scheduled for today,December 1.The FT says Mr. Mandaric's investment vehicle, UK FootballInvestments, will also pay GBP9 million to reach agreement withcreditors, allowing the League One club to clear its debts.The club had accumulated debts of GBP26 million -- most of whichwas owed to the Co-operative Bank -- and seen its tradingprospects hit this summer by relegation from the Championship toLeague One, the FT discloses. About Sheffield WednesdaySheffield Wednesday Football Club is a football club based inSheffield, South Yorkshire, England, who will compete in theFootball League One in the 2010/11 season, in England. SheffieldWednesday is one of the oldest professional clubs in the world andthe third oldest in the English league.TURBO FINANCE: Fitch Assigns 'BB+' Rating to Class C Notes----------------------------------------------------------Fitch Ratings has assigned expected ratings to Turbo Finance Plcnotes backed by UK auto loan receivables originated by theFirstRand Bank Limited, London Branch (rated 'BBB+'/Stable/'F2'): -- GBP289m Class A: 'AAA(EXP)sf'; Outlook Stable; Loss Severity Rating 'LS-1' -- GBP63.6m Class B: 'A(EXP)sf'; Outlook Stable; LS Rating 'LS- 2' -- GBP40.26m Class C: 'BB+(EXP)sf'; Outlook Stable; LS Rating 'LS-3'The final ratings are contingent on the receipt of final documentsconforming to information already received.The expected ratings of the new issuance are based on Fitch'sassessment of the origination and servicing procedures of FRB,Fitch's expectations of future asset performance, the availablecredit enhancement, and the transaction's legal structure. Creditenhancement will be provided to the rated notes by subordinationand a cash reserve account funded at closing. The Class A notesbenefit from 28% credit enhancement (26.4% subordination, 1.6%cash reserve), the Class B notes from 11.8% credit enhancement(10.2% subordination, 1.6% cash reserve) and the Class C notesfrom 1.6% credit enhancement (1.6% cash reserve). The Class Cnote rating is capped at that of the servicer due to potentialcommingling risk exposure; however, this is not currently aconstraining factor given the higher rating of FRB. The ratingsdo not address payment of the additional subordinated interestcomponent on the Class C notes.At closing, the proceeds of the Class A to C notes shall beapplied to purchase an amortizing pool of UK auto loan receivablesfrom the originator. The preliminary portfolio, as at 31 October2010, comprised 71,705 loans with an average current balance ofGBP5,479. The portfolio consists primarily of used car loans(89.4% by balance), with weighted average seasoning of 11 monthsand a weighted average remaining term of 39 months. The portfoliois diverse with respect to regional and manufacturer distribution.The loans were originated by FRB under the trading name of CarlyleFinance. Carlyle Finance is the fourth largest independentprovider of point of sale car finance within the UK, andoriginates loans via car dealers and specialized car financebrokers. The Carlyle Finance business was acquired by FRB in2006. The origination and servicing operations are based inCardiff, Wales.In Fitch's opinion the future performance of the underlyingreceivables is a key rating driver. Fitch analyzed obligor creditrisk by forming base case default and recovery assumptions andthen stressing these assumptions according to the rating level ofeach note. Although the underlying contracts do not feature anydirect residual value risk, Fitch notes that 90% of the underlyingreceivables are regulated by the Consumer Credit Act and aretherefore exposed to voluntary termination losses. In Fitch'sopinion average used car values, original loan to value ratios andoriginal loan tenors are key drivers of voluntary terminationrisk. Fitch formed a view on the extent of VT losses byestimating the future car values relative to loan balances indifferent rating scenarios.In common with other UK auto loan ABS transactions, title to theunderlying vehicle will be retained by the originator; however,the issuer has the right to receive all sale proceeds from thevehicles. Based on the transaction structure, specifically theprovision for an administrator recovery incentive payment, Fitch'squantitative analysis has assumed that the issuer will be able torealize sale proceeds from defaulted and voluntarily terminatedvehicles.From closing, FRB will act as servicer; a replacement servicershall be identified in the event that FRB is downgraded below'BBB-'. The issuer will enter into two fixed / floating rate swapagreements with BNP Paribas, London Branch (rated 'AA-'/Stable/'F1+') to hedge the interest rate mismatch in relation tothe Class A and B notes respectively. BNP Paribas, London Branchwill also act as account bank to the issuer.Fitch has a stable asset and rating performance outlook for the UKauto ABS sector. Fitch considers that unemployment levels as wellas used car value are key drivers of asset performance in the UKauto ABS sector.VEDANTA RESOURCES: S&P Keeps 'BB' Long-Term Corp. Credit Rating---------------------------------------------------------------Standard & Poor's Ratings Services said that it has kept its 'BB'long-term foreign currency corporate credit rating on VedantaResources PLC as well as the 'BB' issue rating on all of thecompany's debt issuances on CreditWatch, where they were placedwith negative implications on Aug. 17, 2010.S&P has maintained the ratings on Vedanta on CreditWatch withnegative implications to reflect the lack of clarity on theapprovals from the Indian government and government-relatedentities that are necessary for the company's proposed acquisitionof Cairn India Ltd. to be completed."S&P originally placed the ratings on CreditWatch, followingVedanta's announcement that it will acquire a controlling stake inIndia-based oil and gas company Cairn," said Standard & Poor'scredit analyst Craig Parker. "The CreditWatch placement reflectsS&P's view that the proposed acquisition could significantlyincrease Vedanta's debt and weaken its financial risk profile tolevels below its expectation for the rating."S&P aim to resolve the CreditWatch action following its discussionwith Vedanta on the final funding structure for the acquisitionand its effect on the company's financial risk profile. Inaddition, S&P will assess the potential effects on Vedanta'sbusiness risk profile from petroleum-based earnings and the coststructure at Cairn. S&P will also review Cairn's forecastperformance and the final capital structure at Vedanta. Thatsaid, the acquisition is subject to approval from the Indiangovernment. *********Monday's edition of the TCR delivers a list of indicative pricesfor bond issues that reportedly trade well below par. Prices areobtained by TCR editors from a variety of outside sources duringthe prior week we think are reliable. Those sources may not,however, be complete or accurate. The Monday Bond Pricing tableis compiled on the Friday prior to publication. Prices reportedare not intended to reflect actual trades. Prices for actualtrades are probably different. Our objective is to shareinformation, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy orsell any security of any kind. It is likely that some entityaffiliated 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 withinsolvent balance sheets whose shares trade higher than US$3 pershare in public markets. At first glance, this list may look likethe definitive compilation of stocks that are ideal to sell short.Don't be fooled. Assets, for example, reported at historical costnet of depreciation may understate the true value of a firm'sassets. A company may establish reserves on its balance sheet forliabilities that may never materialize. The prices at whichequity securities trade in public market are determined by morethan a balance sheet solvency test.A list of Meetings, Conferences and Seminars appears in eachThursday's edition of the TCR. Submissions about insolvency-related conferences are encouraged. Send announcements firstname.lastname@example.com Friday's edition of the TCR includes a review about a book ofinterest to troubled company professionals. All titles areavailable at your local bookstore or through Amazon.com. Go tohttp://www.bankrupt.com/booksto order any title today. *********S U B S C R I P T I O N I N F O R M A T I O NTroubled Company Reporter-Europe is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills,Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA.Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,Joy A. Agravante, Frauline S. Abangan and Peter A. Chapman,Editors.Copyright 2010. All rights reserved. ISSN 1529-2754.This material is copyrighted and any commercial use, resale orpublication in any form (including e-mail forwarding, electronicre-mailing and photocopying) is strictly prohibited without priorwritten permission of the publishers.Information contained herein is obtained from sources believed tobe reliable, but is not guaranteed.The TCR Europe subscription rate is US$625 per half-year,delivered via e-mail. Additional e-mail subscriptions for membersof the same firm for the term of the initial subscription orbalance thereof are US$25 each. For subscription information,contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *