Moody’s: New ratings for high-yield issuers

Moody’s Investors Service announced the impact of the implementation of its loss-given-default and probability-of-default rating methodology to existing non-financial speculative-grade corporate issuers in Europe, Middle East and Africa.

The implementation of the loss-given-default methodology follows the introduction of the methodology in September 2006. Most of the rating actions Moody’s announced relate to senior secured loans.

The agency said it developed the loss-given-default methodology in response to research demonstrating that losses for loans were lower than those for similarly rated bonds . Another reason was strong market interest in the disaggregation of ratings into their two components: probability of default and severity of loss, the agency said.

The new methodology disaggregates these two key assessments in long-term ratings, enhances the consistency in Moody’s notching practices across industries and improves the transparency and accuracy of its ratings, reflecting different experiences of recovery across the capital structure, the agency said.

The ratings changes include:

Transportation Services

• Britannia Bulk plc (B3), B2 probability-of-default rating; 11% senior secured bonds due 2011 affirmed at B3, assigned LGD4, 62%.

• CMA CGM SA (Ba1), Ba1 probability-of-default.

• Concordia Bus Nordic AB (B3), B2 probability-of-default; 9 1/8% senior secured bonds due 2009 affirmed at B3, assigned LGD4, 65%.

• Gearbulk Holding Ltd. (Ba2), Ba2 probability-of-default.

• Ship Finance International Ltd. (Ba3), Ba3 probability-of-default; senior secured bank credit facility affirmed at Ba2, assigned LGD3, 41%; senior unsecured bonds due 2013 affirmed at B1, assigned LGD5, 79%.

• Thiel Logistik AG (B2), B2 probability-of-default; 8% senior subordinated bonds due 2012 affirmed at Caa1, assigned LGD6, 90%.

Services

• Ashtead Group plc, B1; B1 probability-of-default. Ashtead Holdings plc, 8 5/8% senior secured bonds due 2015 affirmed at B3, assigned LGD5, 78%. Sunbelt Rentals, Inc., senior secured bank credit facility due 2011 affirmed at Ba3, assigned LGD2, 29%. Ashtead Capital Inc., 9% senior secured bonds due 2016 affirmed at B3, assigned LGD5, 78%.

• FS Funding A/S (B2), B2 probability-of-default; senior subordinated floating-rate notes due 2016 affirmed at Caa1, assigned LGD5, 89%; 8 7/8% senior subordinated bonds due 2016 affirmed at Caa1, assigned LGD5, 89%.

Homebuilding & Building Products

• Carmeuse Lime BV (Ba3); Ba3 probability-of-default; 10¾% senior secured bonds due 2012 affirmed at Ba3, assigned LGD3, 44%.

• Dyckerhoff AG (Ba1); Ba1 probability-of-default. Lone Star Industries Inc., 9¼% senior unsecured bonds due 2010 affirmed at Ba1, assigned LGD4, 50%.

• HeidelbergCement AG (Ba1), Ba1 probability-of-default; senior unsecured bank credit facility affirmed at Ba1, assigned LGD4, 60%; senior unsecured bonds affirmed at Ba1, assigned LGD4, 60%. Heidelbergcement Finance BV, senior unsecured bonds affirmed at Ba1, assigned LGD4, 60%.

• Kaufman & Broad SA (Ba1), Ba1 probability-of-default; 8¾% senior unsecured bonds due 2009 affirmed at Ba2, assigned LGD6, 91%.

• PERI GmbH (Ba2), Ba2 probability-of-default; senior unsecured bonds affirmed at Ba2, assigned LGD4, 53%.

Chemical

• Avecia Group plc (Caa1), Caa1 probability-of-default; preferred stock affirmed at Caa3, assigned LGD6, 100%.

• Dynea International Oy (B2), B2 probability-of-default.

• SPCM SA (B1), B1 probability-of-default; 8¼% senior unsecured bonds due 2013 affirmed at B3, assigned LGD5, 85%.

Retail, Apparel, Restaurants

• Escada AG (B1), B1 probability-of-default; 7½% senior unsecured bonds due 2012 affirmed at B1, assigned LGD3, 49%.

• Focus DIY (Investments) Ltd. (Caa3), Caa3 probability-of-default; senior secured bank credit facility affirmed at Caa2, assigned LGD3, 33%. Focus (Finance) plc, senior subordinated bonds due 2015 affirmed at Ca, assigned LGD5, 87%.

• Hornbach Baumarkt AG (Ba2), Ba2 probability-of-default; 6 1/8% senior unsecured bonds due 2014 affirmed at Ba3, assigned LGD4, 63%.

• Koninklijke Ahold NV (Ba1), Ba1 probability-of-default; senior unsecured notes affirmed at Ba1, assigned LGD4, 57%; Ahold Finance USA Inc., senior unsecured bonds affirmed at Ba1, assigned LGD4, 57%. Albert Heijn, senior unsecured bonds due 2007 affirmed at Ba1, assigned LGD4, 57%.

Aerospace and Defence

• Heckler & Koch GmbH (B2), B1 probability-of-default; 9¼% senior unsecured bonds due 2011 affirmed at B2, assigned LGD4, 65%.

• MTU Aero Engines Investment GmbH (Ba2), Ba2 probability-of-default.

• IRKUT Corp. JSC (Ba1), Ba1 probability-of-default.

Automotive

• Fiat SpA (Ba2), Ba2 probability-of-default. Fiat Finance & Trade Ltd., senior unsecured bonds affirmed at Ba2, assigned LGD4, 57%.

• ATU Auto-Teile-Unger Invtmt GmbH & Co. KG (B1), B1 probability-of-default; senior subordinated bonds due 2014 affirmed at B3, assigned LGD5, 89%.

• duerr AG (B2), B2 probability-of-default; 9¾% senior subordinated bonds due 2011 affirmed at Caa1, assigned LGD5, 86%.

• Europcar Groupe SA (Ba3), Ba3 probability-of-default; 8 1/8% subordinated bonds due 2014 affirmed at B2, assigned LGD6, 93%; senior subordinated bonds due 2013 affirmed at B1, assigned LGD5, 78%.

• TI Automotive Ltd. (Caa1), Caa1 probability-of-default; senior secured bank credit facilities affirmed at B3, assigned LGD3, 39%.

Forest Products

• M-real (B3), B3 probability-of-default; senior unsecured notes affirmed at B3, assigned LGD4, 50%.

• Lecta SA (Ba3), Ba3 probability-of-default; senior secured bonds due 2014 affirmed at Ba3, assigned LGD3, 47%; senior unsecured bonds due 2014 affirmed at B1, assigned LGD5, 78%.

• Norske Skogindustrier ASA (Ba1), Ba1 probability-of-default; senior unsecured bonds affirmed at Ba1, assigned LGD4, 55%.

• Sappi Papier Holding GmbH (Ba1), Ba1 probability-of-default; senior unsecured bonds affirmed at Ba1, assigned LGD4, 53%.

Healthcare and Pharmaceuticals

• Fresenius AG (Ba2), Ba2 probability-of-default. Fresenius Finance BV, senior unsecured bonds affirmed at Ba2, assigned LGD4, 51%.

• Nycomed A/S (B1), B2 probability-of-default.

Metals and Mining

• Kloeckner & Co AG (Ba3), Ba3 probability-of-default. Kloeckner Investment SCA, senior subordinated bonds due 2015 affirmed at B2, assigned LGD6, 92%.

• Lucchini SpA (Ba3), Ba3 probability-of-default.

• Zlomrex SA (B2), B2 probability-of-default. Zlomrex International Finance SA, 8½% senior secured bonds due 2014 affirmed at Caa1, assigned LGD5, 79%.

Natural Products Processor and Consumer Products

• Remy Cointreau SA (Ba2), Ba2 probability-of-default; senior unsecured bonds affirmed at Ba2, assigned LGD4, 53%.

• Head NV (B2), B2 probability-of-default.

• HTM Sport- und Freizeitgerate AG, senior unsecured bonds due 2014 affirmed at B3, assigned LGD4, 61%.

• Piaggio & C SpA (Ba3), Ba3 probability-of-default. Piaggio Finance SA, 10% senior unsecured bonds due 2012 affirmed at Ba3, assigned LGD4, 50%.

• Safilo SpA (Ba3), Ba3 probability-of-default. Safilo Capital Intenational SA, senior unsecured bonds due 2013 affirmed at B2, assigned LGD5, 89%.

• Barry Callebaut AG (Ba1), Ba2 probability-of-default.

• Fage Dairy Industry SA (B1), B1 probability-of-default; 7½% senior unsecured bonds due 2015 affirmed at B1, assigned LGD4, 50%.

• OJSC Myronivsky Hliboproduct (B2), B2 probability-of-default. MHP SA, 10¼% senior unsecured bonds due 2011 affirmed at B2, assigned LGD4, 51%.

• JSC RG Brands (B2), B2 probability-of-default.

Gaming, Lodging and Leisure

• Codere Finance (Luxembourg) SA (B1), B1 probability-of-default; 8¼% senior unsecured bonds due 2015 affirmed at B1, assigned LGD4, 58%.

• Georgica plc (B2), B2 probability-of-default; senior secured bonds due 2012 affirmed at Caa1, assigned LGD5, 77%.

• Ladbrokes plc (Ba2), Ba2 probability-of-default; senior unsecured medium-term note program affirmed at Ba2, assigned LGD4, 50%. Hilton Group Finance plc, senior unsecured bonds affirmed at Ba2, assigned LGD4, 50%.

Manufacturing

• Clondalkin Industries BV (B1), B1 probability-of-default; 8% senior unsecured bonds due 2014 affirmed at B3, assigned LGD5, 88%.

• CNH Global NV (Ba3), Ba3 probability-of-default. Case Corp. 7¼% senior unsecured bonds due 2016 affirmed at Ba3, assigned LGD4, 52%. Case Credit Corp., 6¾% senior unsecured bonds due 2007 affirmed at Ba3, assigned LGD4, 52%. Case New Holland Inc., senior unsecured bonds affirmed at Ba3, assigned LGD4, 52%.

• FCI International SAS (B1), B2 probability-of-default; senior secured bank credit facility affirmed at B1, assigned LGD3, 30%.

• FKI plc (Ba2), Ba2 probability-of-default; 6 5/8% senior unsecured bonds due 2010 affirmed at Ba2, assigned LGD4, 58%.

• Gerresheimer Holdings GmbH (B2), B2 probability-of-default; 7 7/8% senior subordinated bonds due 2015 affirmed at Caa1, assigned LGD6, 92%.

• Gildemeister AG (Ba3), Ba3 probability-of-default; 9¾% senior subordinated bonds due 2011 affirmed at B2, assigned LGD5, 88%.

• Heating Finance plc (Ba3), Ba3 probability-of-default; senior secured bank credit facility affirmed at Ba3, assigned LGD3, 44%; 7 7/8% senior secured bonds due 2014 affirmed at B2, assigned LGD6, 94%.

• Yioula Glassworks SA (B2), B2 probability-of-default; 9% senior unsecured bonds due 2015 affirmed at B3, assigned LGD4, 63%.

• Treofan Germany GmbH & Co. KG (B3), B3 probability-of-default, 11% senior subordinated bonds due 2013 affirmed at Caa1, assigned LGD4, 65%.

Energy

• British Energy Holdings plc (Ba2), Ba2 probability-of-default; 7% senior unsecured bonds due 2022 affirmed at Ba3, assigned LGD5, 85%.

• Compagnie Generale De Geophysique-Veritas (Ba2), Ba2 probability-of-default; senior secured bank credit facility affirmed at Ba2, assigned LGD3, 41%; senior unsecured bonds affirmed at Ba3, assigned LGD4, 63%. CGGVeritas Services, Inc., senior secured bank credit facility affirmed at Ba2, assigned LGD3, 41%.

• Elan Corp. plc (B3), B2 probability-of-default. Elan Finance plc, senior unsecured bonds affirmed at B3, assigned LGD4, 65%.

• Ocean Rig Norway AS (B3), B3 probability-of-default; senior secured bonds affirmed at B3, assigned LGD4, 57%.

• Petrol AD (B2), B2 probability-of-default, 8.375% senior unsecured bonds due 2011 affirmed at B3, assigned LGD5, 75%.

• Petroleum Geo-Services ASA (Ba3), Ba3 probability-of-default; senior secured bank credit facility affirmed at Ba3, assigned LGD4, 57%.

• Tristan Oil Ltd. (B2), B2 probability-of-default; 10½% senior secured bonds due 2012 affirmed at B2, assigned LGD4, 50%.

Telecommunications

• Hellas Telecommunications II Sarl (B2), B2 probability-of-default; subordinated bonds due 2015 affirmed at Caa1, assigned LGD5, 85%. Hellas Telecommunications (Luxembourg) III, 8½% senior unsecured bonds due 2013 affirmed at B3, assigned LGD4, 63%. Hellas Telecommunications (Luxembourg) V, senior secured bonds due 2012 affirmed at B1, assigned LGD3, 33%.

• Millicom International Cellular SA (Ba3), Ba3 probability-of-default; 10% senior unsecured bonds due 2013 affirmed at B2, assigned LGD5, 85%.

• Kabel Deutschland GmbH (Ba3), Ba3 probability-of-default; senior unsecured bonds affirmed at B2, assigned LGD5, 88%.

• OJSC Vimpel-Communication (Ba2), Ba2 probability-of-default; senior unsecured bonds affirmed at Ba2, assigned LGD4, 52%.

• Partner Communications Co. Ltd. (Ba1), Ba1 probability-of-default.

• Gateway Telecommunications plc (B3), B3 probability-of-default; 9 7/8% senior secured bonds due 2013 affirmed at B3, assigned LGD4, 50%.

• Antenna TV SA (B1), B1 probability-of-default; 7¼% senior unsecured bonds due 2015 affirmed at B1, assigned LGD4, 56%.

• Cable & Wireless plc (Ba3), Ba3 probability-of-default; 4% senior unsecured convertible bonds due 2010 and 8¾% senior unsecured bonds due 2012 affirmed at B1, assigned LGD4, 60%. Cable & Wireless International Finance BV, 8 5/8% senior unsecured bonds due 2019 affirmed at B1, assigned LGD4, 60%.

• Cableuropa SAU (B1), B1 probability-of-default. ONO Finance plc, senior unsecured eurobonds affirmed at B3, assigned LGD6, 92%. ONO Finance II plc, senior unsecured bonds due 2014 affirmed at B3, assigned LGD6, 92%.

• COLT Telecom Group Ltd. (B2), B1 probability-of-default; 7 5/8% senior unsecured bonds due 2009 affirmed at B2, assigned LGD4, 65%.

• Completel SAS (B3), B2 probability-of-default; 11% senior secured bonds due 2012 affirmed at B3, assigned LGD4, 67%.

• Eutelsat Communications SA (Ba2), Ba3 probability-of-default; senior unsecured bank credit facility affirmed at Ba3, assigned LGD4, 55%.

• Global Crossing (UK) Finance plc (B3), B2 probability-of-default; senior secured bonds affirmed at B3, assigned LGD4, 63%.

Media

• Liberty Global Inc. (Ba3), Ba3 probability-of-default.

• Central European Media Enterprises Ltd. (Ba3), Ba3 probability-of-default; senior unsecured bonds affirmed at Ba3, assigned LGD4, 59%.

• Seat Pagine Gialle SpA (Ba3), Ba3 probability-of-default. Lighthouse International Co. SA, 8% senior secured bonds due 2014 affirmed at B2, assigned LGD5, 86%.

• TVN Finance Corp. plc (Ba3), Ba3 probability-of-default; 9½% senior unsecured bonds due 2013 affirmed at B1, assigned LGD4, 63%.

• Yell Group plc (Ba3), B1 probability-of-default.

• Odyssee 1 SAS (B1), B2 probability-of-default.

• Gallery Media Group Ltd. (Caa1), Caa1 probability-of-default. Gallery Capital SA, 10 1/8% senior secured bonds due 2013 affirmed at Caa1, assigned LGD3, 48%.

Technology

• ASML Holding NV (Ba1), Ba1 probability-of-default.

• Getronics NV (B2), B2 probability-of-default; 5½% senior unsecured convertible bonds due 2008 affirmed at Caa1, assigned LGD5, 79%.

• Invensys plc (Ba3), Ba3 probability-of-default; senior unsecured bonds affirmed at B2, assigned LGD6, 92%.

• NXP BV (Ba3), Ba3 probability-of-default; senior secured bonds affirmed at Ba2, assigned LGD3, 40%; senior unsecured notes affirmed at B2, assigned LGD5, 86%.

• VAC Finanzierung GmbH (B2), B2 probability-of-default; senior secured bonds due 2016 affirmed at B3, assigned LGD4, 58%.

• Vestel Elektronik Sanayi Ve Ticaret AS (Ba3), Ba3 probability-of-default. Vestel Electronics Finance Ltd. 8¾% senior unsecured bonds due 2012 affirmed at Ba3, assigned LGD4, 50%.

Metals and Mining

• Magnitogorsk Iron & Steel Works (Ba3), Ba3 probability-of-default. MMK Finance SA, senior unsecured bonds due 2008 affirmed at Ba3, assigned LGD4, 50%.

• Novolipetsk Steel OJSC (Ba1), Ba1 probability-of-default.

• Severstal OAO (Ba3), Ba3 probability-of-default; senior unsecured bonds affirmed at B1, assigned LGD5, 75%.

• TMK (B1), B1 probability-of-default. TMK Capital SA, 8½% senior unsecured bonds due 2009 affirmed at B2, assigned LGD5, 71%.

• Zaporizhstal OJSC (B3), B3 probability-of-default.

• Alrosa Finance SA (Ba2), Ba2 probability-of-default; senior unsecured bonds affirmed at Ba2, assigned LGD4, 50%.

• Kremikovtzi AD (Caa1), Caa1 probability-of-default. Bulgaria Steel Finance BV, senior secured bonds due 2013 affirmed at Caa1, assigned LGD4, 55%.

Natural Products Processor and Consumer Products

• Lebedyansky, OJSC (Ba3), Ba3 probability-of-default.

• OJSC Myronivsky Hliboproduct (B2), B2 probability-of-default. MHP SA, 10¼% senior unsecured bonds due 2011 affirmed at B2, assigned LGD4, 51%.

• Ulker Gida Sanayi ve Ticaret AS (B1), B1 probability-of-default.

• JSC RG Brands (B2), B2 probability-of-default.

Energy

• Compania Nationala de Cai Ferate CFR SA (Ba1), Ba1 probability-of-default.

• Hidroelectrica SA (Ba1), Ba1 probability-of-default.

• NJSC Naftogaz of Ukraine (Ba3), Ba3 probability-of-default; 8 1/8% senior unsecured bonds due 2009 affirmed at Ba2, assigned LGD4, 52%.

• OAO Novatek (Ba2), Ba2 probability-of-default.

• JSC OGK-5 (Ba3), Ba3 probability-of-default.

• Petrol AD (B2), B2 probability-of-default, 8.375% senior unsecured bonds due 2011 affirmed at B3, assigned LGD5, 75%.

• Tristan Oil Ltd. (B2), B2 probability-of-default; 10½% senior secured bonds due 2012 affirmed at B2, assigned LGD4, 50%.

Telecommunications

• Sistema JSFC (B1), B1 probability-of-default. Sistema Capital SA, 8 7/8% senior unsecured bonds due 2011 affirmed at B3, assigned LGD5, 78%.

• Golden Telecom Inc. (Ba3), Ba3 probability-of-default.

• JSC Concern Sitronics (B3), B3 probability-of-default. Sitronics Finance SA, 7 7/8% senior unsecured bonds due 2009 affirmed at B3, assigned LGD4, 50%.

• MegaFon OJSC (Ba3), Ba3 probability-of-default. MegaFon SA, 8% senior unsecured bonds due 2009 affirmed at Ba3, assigned LGD4, 50%.

• Mobile TeleSystems OJSC (Ba3), Ba3 probability-of-default. Mobile TeleSystem Finance SA, senior unsecured bonds affirmed at Ba3, assigned LGD4, 50%.

• Moscow City Telephone Network (MGTS) (PJSC) (Ba3), Ba3 probability-of-default.

• OJSC Vimpel-Communication (Ba2), Ba2 probability-of-default; senior unsecured bonds affirmed at Ba2, assigned LGD4, 52%.

• Partner Communications Co. Ltd. (Ba1), Ba1 probability-of-default.

• Gateway Telecommunications plc (B3), B3 probability-of-default; 9 7/8% senior secured bonds due 2013 affirmed at B3, assigned LGD4, 50%.

• Antenna TV SA (B1), B1 probability-of-default; 7¼% senior unsecured bonds due 2015 affirmed at B1, assigned LGD4, 56%.

• Cable & Wireless plc (Ba3), Ba3 probability-of-default; 4% senior unsecured convertible bonds due 2010 and 8¾% senior unsecured bonds due 2012 affirmed at B1, assigned LGD4, 60%. Cable & Wireless International Finance BV, 8 5/8% senior unsecured bonds due 2019 affirmed at B1, assigned LGD4, 60%.

• Orascom Telecom Holding SAE (Ba3), Ba3 probability-of-default. Orascom Telecom Finance SCA, 7 7/8% senior unsecured bonds due 2014 affirmed at B2, assigned LGD5, 82%.

• Turkcell Iletisim Hizmetleri AS (Ba2), Ba2 probability-of-default.

Media

• Central European Media Enterprises Ltd. (Ba3), Ba3 probability-of-default; senior unsecured bonds affirmed at Ba3, assigned LGD4, 59%.

• TVN Finance Corp. plc (Ba3), Ba3 probability-of-default; 9½% senior unsecured bonds due 2013 affirmed at B1, assigned LGD4, 63%.

• Yell Group plc (Ba3), B1 probability-of-default.

Other

• Agrokor DD (B2), B2 probability-of-default; senior secured bonds due 2011 affirmed at B2, assigned LGD4, 53%.

• CFR Marfa SA (Ba2), Ba2 probability-of-default; 10½% senior unsecured bonds due 2007 affirmed at Ba2, assigned LGD4, 53%.

• OJSC Concern Stirol (B3), B3 probability-of-default. UkrChem Capital BV, 7 7/8% senior unsecured bonds due 2008 affirmed at B3, assigned LGD4, 54%.

• Dogus Holding AS (Ba3), Ba3 probability-of-default.

• IRKUT Corp. JSC (Ba1), Ba1 probability-of-default.

• Mirax Group LLC (B2); B2 probability-of-default.

• Orco Property Group SA (B2), B2 probability-of-default.

• Ordu Yardimlasma Kurumu (Ba2), Ba2 probability-of-default.

• Ritzio Entertainment Group (B2), B2 probability-of-default.

• Savcio Holdings (Pty) Ltd. (B2), B2 probability-of-default; 8% senior secured bonds due 2013 affirmed at B2, assigned LGD3, 49%.

• OJSC Sibur Holding (Ba2) , Ba2 probability-of-default.

• Vestel Elektronik Sanayi Ve Ticaret AS (Ba3), Ba3 probability-of-default. Vestel Electronics Finance Ltd. 8¾% senior unsecured bonds due 2012 affirmed at Ba3, assigned LGD4, 50%.

• X5 Retail Group NV (B1), B1 probability-of-default.

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