Taking Advantage of Mortgage Rates Now (New York Times)

March 19, 2010
When Not to Pay Down a Mortgage
By RON LIEBER

This week, the Federal Reserve reaffirmed its intention to stop buying mortgage-backed securities, signaling the likelihood that the mortgage rates you can get today are as good as they’re going to be for a long while. Once the Fed stops buying, after all, rates are likely to go up.

And current rates are quite good. At about 5 percent, in fact, they’re so good that they’ve helped change the age-old debate over whether homeowners should make extra mortgage payments to pay off their debt well before their loan periods are up.

Back when rates ran at 7 or 8 percent, making extra payments offered what amounted to a guaranteed return on your money. When you’re ridding yourself of debt that costs you much less, however, it’s easier to imagine a future when you could more easily earn a higher return by investing those potential extra mortgage payments someplace else.

Meanwhile, at a time when just about everyone knows someone who is unemployed or who owes more on a home loan than the house is worth, keeping extra cash someplace more liquid than a mortgage seems like a safer approach.
So is the case against extra payments closed for good, given that so many people have locked in rock-bottom mortgage rates for the long haul?

The answer depends on two things: how likely you are to leave the extra money in savings and how good it would feel to wipe your debt out years earlier than your mortgage requires.

THE BASICS First, let’s dispense with the standard boilerplate. Don’t even think about making extra mortgage payments unless you’ve paid off higher-interest debt. Credit card debt is the easiest win here.

Also, if you’re not saving enough to get the full match from your employer in a 401(k) or similar account, increase your savings there first. And don’t make extra mortgage payments if you don’t already have a decent emergency fund set aside.

YOUR REAL INTEREST RATE Now, take a look at the interest rate on your mortgage. That 5 percent? It’s not your real rate if you get some of the interest back each year in the form of a tax deduction.

Let’s say you have a household income of $175,000 and are paying 35 percent of that in total to the state and federal tax collectors. If you pay $20,000 in mortgage interest each year on a loan that charges 5 percent, the deduction effectively brings your taxable income down to $155,000.

As a result, you’re paying $7,500 (35 percent of $20,000) less in taxes than you would have without the deduction. So ultimately, you’re not really paying $20,000 in interest at all; your net cost is $12,500 after you subtract the $7,500 tax savings.

And that makes your effective, after-tax interest rate on your loan just 3.25 percent, which is simply 35 percent (your tax rate) less than the original 5 percent.

BETTER RETURNS? So any money you set aside in lieu of making extra mortgage payments would need to earn more than 3.25 percent annually. That seems like a reasonable possibility in the future.

In fact, you could have done that well during the supposedly lost decade we just finished. Vanguard Wellington, for instance, a popular low-cost mutual fund that holds about 65 percent stocks and 35 percent bonds and other short-term securities, earned an average annual return of 6.15 percent in the 10 years ended Dec. 31, 2009.

The Vanguard Balanced Index Fund would not have outperformed our 3.25 percent benchmark, however, as it only returned 2.64 percent over the same 10-year period.

STORING THE SAVINGS Wouldn’t taxes eat into the returns from the money you’d save instead of making extra mortgage payments? Not if you place it into an account shielded from taxes. A Roth individual retirement account would fit the bill here, as would a 529 college savings account or health savings account.

Bruce Primeau, whose note to his financial planning clients at Wide Financial Group in Minneapolis on this topic inspired me to re-examine it, adds that this isn’t simply about keeping more assets under his watch so he can earn a better living. “I’m not telling them that the money has to come to me,” he said. “A 401(k) match beats the return on paying a mortgage off automatically. There’s real estate and buying employer stock through a purchase plan at a 15 percent discount and all kinds of things.”

Then you need to preserve those savings. When extra money goes toward a mortgage, it’s hard to get at it when the urge strikes to flee to an Asian beach for a few weeks of playtime. If the money is not locked up in retirement or college savings, however, you may be tempted to spend it.

THE LIQUIDITY PROBLEM Capital-gains taxes might eventually come due with some of these investments, and the rate could well rise above the current 15 percent long-term rate before too long. Still, having some of your savings in a taxable account makes sense for several reasons.

If you hit a stretch of long-term unemployment after having plowed most of your extra cash into paying down your mortgage, your bank probably won’t pat you on the back for being a good saver and give the money back to you. Nor is it likely to let you borrow it through a home equity loan if you have no income with which to repay it.

Elaine Scoggins, who had the mortgage department chief reporting to her at a bank before she became a financial planner, suggests imagining a situation where you need to move quickly but can’t sell your home or extract equity to use as a down payment in your new town. Given that possibility, why create more home equity through extra mortgage payments than you have to?

“The whole housing debacle has reminded us all, including me, that real estate is not liquid,” said Ms. Scoggins, who is the client experience director for Merriman, a planning firm in Seattle. “And it takes cash to support it.”

Those who have used their cash in an attempt to be conscientious have learned some tough lessons, meanwhile. Imagine people who scraped together a 5 percent down payment and bought a home in Florida or Arizona in 2005 and then made extra mortgage payments the first two years to try to increase their equity. Now, post-collapse, they owe, say, 30 percent more than their homes are worth and need to seriously consider walking away from the loan — and all of those extra payments.

REASON AND EMOTION So the reasoned case for making no extra payments is very strong. But there’s one counterpoint that almost always carries the day, even when there’s only a mild risk with the financial strategy of putting extra money elsewhere.

And it’s this: I need to be able to sleep at night.

Even Mr. Primeau concedes here. “Emotionally, you’re right, and financially I’m right, and emotionally, you win,” he said. “If emotionally, people want to pay down their debt, then that’s what I help them to do.”

If you’ve just started paying down your mortgage, any extra payments should go toward principal (make sure your mortgage company is applying it properly). That will have the effect of shortening the term of your loan from, say, 30 to 25 years, depending on how many extra payments you make. The extra payments won’t lower your monthly payment, but they will reduce your balance.

Many people who are years into their mortgages — and perhaps paying less in interest and getting less of a tax break as a result — tend to develop stronger feelings about making extra payments. Those feelings are often even more acute as retirement approaches and homeowners become determined to quit work with no debt to their names.

Those who do retire their debt rarely regret it or wring their hands over the big gains they might have scored by investing the money elsewhere. Tim Maurer, a financial planner and co-author of “The Financial Crossroads,” describes the feeling that washes over people who have paid their last mortgage bill as “beholden to no one.”

So he doesn’t feel as if it’s his business to separate people from their emotions if they feel strongly about working toward a debt-free existence. “The whole point of planning is to make life better,” he said. “It’s not to have more dollars at the end of the day.”

Should you walk away from your mortgage? (WSJ)

REAL ESTATE DECEMBER 17, 2009

Debtor's Dilemma: Pay the Mortgage or Walk Away
In Down Real-Estate Market, Homeowners Are Deciding to Abandon Their Loan Obligations Even if They Can Afford the Payments

By JAMES R. HAGERTY and NICK TIMIRAOS
PHOENIX -- Should I stay or should I go? That is the question more Americans are asking as the housing market continues to drag.

In good times, it would have been unthinkable to stop paying the mortgage. But for Derek Figg, a 30-year-old software engineer, it now seems like the best option.

Mr. Figg felt trapped in a home he bought two years ago in the Phoenix suburb of Tempe for $340,000. He still owes about $318,000 but figures the home's value has dropped to $230,000 or less. After agonizing over the pros and cons, he decided recently to stop making loan payments, even though he can afford them.

Mr. Figg plans to rent an apartment nearby, saving about $700 a month.

A growing number of people in Arizona, California, Florida and Nevada, where home prices have plunged, are considering what is known as a "strategic default," walking away from their mortgages not out of necessity but because they believe it is in their best financial interests.

A standard mortgage-loan document reads, "I promise to pay" the amount borrowed plus interest, and some people say that promise should remain good even if it is no longer convenient.
George Brenkert, a professor of business ethics at Georgetown University, says borrowers who can pay -- and weren't deceived by the lender about the nature of the loan -- have a moral responsibility to keep paying. It would be disastrous for the economy if Americans concluded they were free to walk away from such commitments, he says.


Walking away isn't risk-free. A foreclosure stays on a consumer's credit record for seven years and can send a credit score (based on a scale of 300 to 850) plunging by as much as 160 points, according to Fair Isaac Corp., which provides tools for analyzing credit records. A lower credit score means auto and other loans are likely to come with much higher interest rates, and credit card issuers may charge more interest or refuse to issue a card.

In addition, many states give lenders varying degrees of scope to seize bank deposits, cars or other assets of people who default on mortgages.Even so, in neighborhoods with high concentrations of foreclosures, "it's going to be really difficult to prevent a cascade effect" as one strategic default emboldens others to take that drastic step, says Paola Sapienza, a professor of finance at Northwestern University. A study by researchers at Northwestern and the University of Chicago found that as many as one in four defaults may be strategic.



Driving this phenomenon is the rising number of households that are deeply "under water," owing much more than the current value of their homes. First American CoreLogic, a real-estate information company, estimates that 5.3 million U.S. households have mortgage balances at least 20% higher than their homes' value, and 2.2 million of those households are at least 50% under water. The problem is concentrated in Arizona, California, Florida, Michigan and Nevada.
Josh Cotner, who owns an insurance agency, says his mortgage balance is about $100,000 more than the market value of his home in Gilbert, Ariz. Mr. Cotner could rent a bigger home nearby for $600 a month, far below the $1,655 he now pays on his mortgage, home insurance and property tax. He says he recently stopped making mortgage payments because his lender wouldn't help him reduce the principal on his loan under a federal program in which he believes he is qualified to participate. Given the sometimes lengthy legal process of foreclosure, he may be able to stay in the home for at least another nine months without making any payments.

Banks warn they may get tough with strategic defaulters by pursuing legal claims on a borrower's other assets. "We will try to reduce people's payments if they have a hardship," says Thomas Kelly, a spokesman for J.P. Morgan Chase & Co. "But we have a financial responsibility to get people to pay what they owe if they can afford it."Steven Olson, a loan officer and roof installer in Roseville, Minn., defaulted in 2007 on a plot of land in Florida he had bought as an investment. "I thought I could move on with my life," he says. But the lender, RBC Bank, a subsidiary of Royal Bank of Canada, sued him, seeking to make him pay more than $400,000 to the bank to cover its losses on the loan. Mr. Olson has hired a Florida lawyer, Roy Oppenheim, to resist the claim. An RBC spokesman declined to comment.

States where lenders generally can pursue such legal claims include Florida and Nevada but not California and Arizona, where laws generally prohibit lenders from pursuing other assets of mortgage borrowers. A new Nevada law will protect many borrowers from these judgments if they bought a home for their own use after Sept. 30, 2009.
Another risk for defaulters is that banks could sell the rights to pursue claims to collection agencies or other firms, which could then dun the borrowers for up to 20 years after a foreclosure. Such threats appear to deter some borrowers. A recent study from the Federal Reserve Bank of Richmond found that under-water borrowers were 20% more likely to default in a state where mortgage lenders can't pursue claims on other assets than in those where they can.

Brent White, an associate law professor at the University of Arizona who has written about this issue, says homeowners should make the decision on whether to keep paying based on their own interests, "unclouded by unnecessary guilt or shame." He says borrowers can take a cue from lenders that "ruthlessly seek to maximize profits or minimize losses irrespective of concerns of morality or social responsibility."

But it isn't just a matter of the borrower's personal interest, says John Courson, chief executive of the Mortgage Bankers Association, a trade group. Defaults hurt neighborhoods by lowering property values, he says, adding: "What about the message they will send to their family and their kids and their friends?"

In Mesa, another suburb of Phoenix, low prices are helping to draw buyers who may walk away from other homes. Christina Delapp bought a house out of foreclosure in July for $49,000 in cash. She says she will stop paying the mortgage on another home she still owns in Tempe if she can't sell in the next few months for more than the $312,000 that she owes.

Ms. Delapp, who has been jobless for 18 months, says that the new home is part of her survival strategy. "I feel very fortunate," she says. "Regardless of what happens to my credit, we've managed to put together the best safety plan that I possibly could."

Mr. Figg says that deciding to default on his loan was "the toughest decision I ever made." He worried that if he ever loses his job he would be marooned in a home that he couldn't sell for enough to pay off his loan, limiting his ability to find work in other parts of the country: "I couldn't move up. I couldn't move down. I couldn't move out of the city. It was a very claustrophobic situation."

By moving to an apartment, Mr. Figg expects to lower his costs by about $700 a month. He plans to put that into his savings account and says he is willing to rent for the next five years or so.

Lenders are guilty of having "manipulated" the housing market during the boom by accepting dubious appraisals, Mr. Figg says. "When I weighed everything," he says, "I was able to sleep at night."

Write to James R. Hagerty at bob.hagerty@wsj.com and Nick Timiraos at nick.timiraos@wsj.com

Printed in The Wall Street Journal, page A22

Ford Tender Offers on Debt (SEC Filings)

FORD MOTOR CREDIT COMPANY ANNOUNCES LAUNCH OF CASH TENDER OFFERS AS PART OF FORD MOTOR COMPANY’S DEBT RESTRUCTURING PLAN

Financial Times: GM deadline nears

GM fights to avoid bankruptcy protection
By Julie MacIntosh and Nicole Bullock in New York and John Reed in Detroit and Bernard Simon in Toronto

Published: February 9 2009 19:37 | Last updated: February 9 2009 23:43

General Motors is working to convince key stakeholders to help it avoid the need to seek bankruptcy protection but, because such an effort would probably require more government money, its most critical task will be addressing the US Treasury’s concerns over the terms of its investment.

GM must present a plan proving its long-term viability to Congress by next Tuesday as a condition of the $13.4bn emergency bridge loan it was granted in December.

Several sets of negotiations are taking place simultaneously. They revolve around GM’s proposal to swap up to two-thirds of its debt for equity, and fresh concessions from the United Auto Workers, including the financing of a new union-administered healthcare fund.

Only advisers to the various parties are currently involved in the talks, which are expected to centre on due diligence issues for the next day or two, one person familiar with the negotiations said.

The US government has the power to either endorse GM’s plans or push it into bankruptcy and the US Treasury’s decision to hire advisers Cadwalader, Wickersham & Taft, Sonnenschein Nath & Rosenthal and Rothschild suggest it may be toughening its stance.

“The government is the biggest stakeholder here,” one person close to the matter said. “Unless they agree the plan is viable and they consent, the debt becomes due.”

If the government gives GM additional funding, the structure and terms of both its old and new investments could come up for debate, including whether taxpayers’ interests should come before those of current debtholders.

The government’s role as stakeholder reduces GM’s options. But it also gives it more weight in negotiations with unions, auto dealers and bondholders.

“The carrot is, this is in everybody’s best interest,” said Don Workman, a bankruptcy lawyer at Baker & Hostetler LLP. “The stick is, they’re saying that if we don’t do this consensually, GM and Chrysler will go into bankruptcy court and the judge will prime you.”

Separately, GM is negotiating with bankrupt Delphi, its largest supplier, to take over some of Delphi’s manufacturing plants, a person briefed on the talks said.

The move could give GM more flexibility in its negotiations with the United Auto Workers, the labour union.

Bondholders said their talks with GM were ongoing. The company’s long-term bonds were quoted at their low of 13 cents on the dollar. In an indication of the severity of the situation, the same bonds were quoted at around 80 cents a year ago.

Copyright The Financial Times Limited 2009

Business Week on The Weakest Links ( Vulnerable Companies as of October 15)

BusinessWeek Investing October 22, 2008, 4:53PM EST text size: TT
S&P's List of Companies Vulnerable to Default
Data as of Oct. 15, 2008.


Rating Combination And Subsector Issuer Debt (US$ Mil) Country

B-/CreditWatch Negative
Automotive
Ford Motor Co.
116,914
U.S.


Automotive
General Motors Corp.
81,178
U.S.


CP&ES
Pliant Corp.
543
U.S.


Consumer products
Cott Corp.
275
Canada


Consumer products
MEGA Brands Inc.
267
Canada


Forest
AMH Holdings Inc.
611
U.S.


Forest
WII Components Inc.
120
U.S.


Health care
Chem Rx Corp.
117
U.S.



Media and entertainment
Advanstar Inc.
775
U.S.


Media and entertainment
Endurance Business Media Inc.
160
U.S.


Media and entertainment
Fontainebleau Las Vegas Holdings LLC
1,725
U.S.


Media and entertainment
Jobson Medical Information LLC
132
U.S.


Media and entertainment
NextMedia Operating Inc.
340
U.S.


Media and entertainment
Panavision Inc.
430
U.S.


Oil and gas EP
Agri International Resources Pte. Ltd.
150
Singapore


Oil and gas EP
Frontier Drilling A.S.A
265
Norway


Oil and gas EP
VeraSun Energy Corp.
660
U.S.


Transportation
JetBlue Airways Corp.
425
U.S.


Transportation
US Airways Group Inc.
1,744
U.S.











Rating Combination And Subsector Issuer Debt (US$ Mil) Country

B-/Outlook Negative

Automotive
Accuride Corp.
825
U.S.


Automotive
Hilite International Inc.
164
U.S.


Automotive
Keystone Automotive Operations Inc.
375
U.S.


Automotive
Mark IV Industries Inc.
988
U.S.


Automotive
TI Automotive Ltd.
657
U.K.


Bank
CentroCredit Bank JSC
0
Russia


Bank
Nadra Bank
0
Ukraine


Brokerage Investment Company
Veles Capital LLC
0
Russia


Capital goods
Baxi Holdings Ltd.
173
U.K.


CP&ES
Arclin Canada Ltd.
460
Canada


CP&ES
Exopack Holding Corp.
220
U.S.


CP&ES
Synagro Technologies Inc.
440
U.S.


CP&ES
United Site Services Inc.
265
U.S.


Consumer products
Broder Bros. Co.
225
U.S.


Consumer products
Dole Food Co. Inc.
2,080
U.S.


Consumer products
Fage Dairy Industry S.A.
177
Greece


Consumer products
IT Holding SpA
252
Italy


Consumer products
JFC Group Co. Ltd. (CJSC)
0
Russia


Consumer products
Rafaella Apparel Group Inc.
172
U.S.


Consumer products
Targus Group International Inc.
273
U.S.


Consumer products
Wilton Products Inc.
700
U.S.


Consumer products
WP Evenflo Holdings Inc.
165
U.S.


Finance companies
DriveTime Automotive Group, Inc.
270
U.S.


Forest
AbitibiBowater Inc.
6,488
Canada


Forest
Advance Agro Public Co. Ltd.
250
Thailand


Forest
Builders FirstSource Inc.
275
U.S.


Forest
Caraustar Industries Inc.
229
U.S.


Forest
Grant Forest Products Inc.
0
Canada


Forest
Industrias Unidas S.A. de C.V.
0
Mexico


Forest
Jacuzzi Brands Corp.
320
U.S.


Forest
Mandra Forestry Finance Ltd.
195
British Virgin Islands


Forest
M-real Corp.
1,619
Finland


Forest
NTK Holdings Inc.
1,776
U.S.


Forest
United Subcontractors Inc.
360
U.S.


Health care
CCS Medical
424
U.S.


Health care
Cohr Holdings Inc.
140
U.S.


Health care
InSight Health Services Corp.
315
U.S.


Health care
Spheris Inc.
125
U.S.


Health care
TLC Vision Corp.
85
U.S.


High technology
Consona ERP Inc.
185
U.S.


High technology
NXP B.V.
11,771
Netherlands


High technology
Palm Inc.
400
U.S.


Home/RE
Hovnanian Enterprises Inc.
2,655
U.S.


Home/RE
Neo-China Land Group (Holdings) Ltd.
400
China


Home/RE
Standard Pacific Corp.
1,154
U.S.


Home/RE
William Lyon Homes
550
U.S.


Insurance
Arrowhead General Insurance Agency Inc.
170
U.S.


Insurance
USI Holdings Corp.
950
U.S.








Rating Combination And Subsector Issuer Debt (US$ Mil) Country

B-/Outlook Negative (continued)

Media and entertainment
Downstream Development Authority
197
U.S.


Media and entertainment
Education Media & Publishing Group Ltd.
6,650
Ireland


Media and entertainment
Gateway Casinos & Entertainment Inc.
947
Canada


Media and entertainment
Gray Television Inc.
925
U.S.


Media and entertainment
Little Traverse Bay Bands of Odawa Indians
120
U.S.


Media and entertainment
Motorsport Aftermarket Group Inc.
160
U.S.


Media and entertainment
MTR Gaming Group Inc.
255
U.S.


Media and entertainment
Realogy Corp.
6,295
U.S.


Media and entertainment
Spanish Broadcasting System Inc.
400
U.S.


Media and entertainment
Station Casinos Inc.
2,550
U.S.


Media and entertainment
Tribune Co.
13,577
U.S.


Media and entertainment
Trump Entertainment Resorts Holdings L.P.
1,250
U.S.


Media and entertainment
Univision Communications Inc.
10,200
U.S.


Media and entertainment
Workflow Management Inc.
415
U.S.


Metals, mining, and steel
Bemax Resources Ltd.
175
Australia


Metals, mining, and steel
G Steel Public Co. Ltd.
170
Thailand


Metals, mining, and steel
USEC Inc.
650
U.S.


Oil and gas EP
Dune Energy Inc.
300
U.S.


Retail/restaurants
A.T.U Auto-Teile-Unger
204
Germany


Retail/restaurants
BCBG Max Azria Group, Inc.
200
U.S.


Retail/restaurants
BI-LO LLC
0
U.S.


Retail/restaurants
Claire's Stores Inc.
2,385
U.S.


Retail/restaurants
Eddie Bauer Holdings Inc.
225
U.S.


Retail/restaurants
El Pollo Loco Inc.
225
U.S.


Retail/restaurants
Guitar Center Holdings Inc.
1,427
U.S.


Retail/restaurants
Krispy Kreme Doughnuts Inc.
110
U.S.


Retail/restaurants
MAPCO Express Inc.
296
U.S.


Retail/restaurants
Mastro's Restaurants LLC
100
U.S.


Retail/restaurants
Mothers Work Inc.
90
U.S.


Retail/restaurants
Perkins & Marie Callender's Inc.
322
U.S.


Retail/restaurants
Sagittarius Restaurants LLC
295
U.S.


Savings and loans
Downey Financial Corp.
200
U.S.


Telecommunications
Bite Finance International B.V.
408
Lithuania


Telecommunications
Charter Communications Inc.
22,408
U.S.


Telecommunications
Securus Technologies Inc.
194
U.S.


Telecommunications
U.S. TelePacific Holdings Corp.
199
U.S.


Transportation
AMR Corp.
4,071
U.S.


Transportation
Swift Corp.
4,275
U.S.


Transportation
Titan Petrochemicals Group Ltd.
400
Hong Kong


Transportation
Trailer Bridge Inc.
85
U.S.


Transportation
UAL Corp.
3,390
U.S.







Rating Combination And Subsector Issuer Debt (US$ Mil) Country

CCC+/CreditWatch Negative
Capital goods
Electrical Components International Inc.
305
U.S.


CP&ES
Polymer Holdings LLC
585
U.S.


Forest
Building Materials Holding Corp.
350
U.S.


Forest
Chesapeake Corp.
335
U.S.


Media and entertainment
Barrington Broadcasting LLC
398
U.S.


Media and entertainment
Cambium Learning Inc.
128
U.S.









Rating Combination And Subsector Issuer Debt (US$ Mil) Country

CCC+/Outlook Negative

Automotive
Chrysler LLC (Chrysler Holding LLC)
9,000
U.S.


Automotive
Lazy Days' R.V. Center Inc.
125
U.S.


Automotive
Metaldyne Corp.
860
U.S.


Capital goods
Euramax International Inc.
667
U.S.


CP&ES
Constar International Inc.
395
U.S.


CP&ES
Foamex L.P.
600
U.S.


CP&ES
Georgia Gulf Corp.
1,600
U.S.


CP&ES
Millennium Inorganic Chemicals
0
U.S.


Consumer products
KIK Custom Products Inc.
645
Canada


Finance companies
Checksmart Financial Co.
195
U.S.


Finance companies
DaimlerChrysler Financial Services Americas LLC
6,000
U.S.


Forest
Treofan Holdings GmbH
231
Germany


Forest
White Birch Paper Co.
550
U.S.


Health care
LifeCare Holdings Inc.
402
U.S.


Home/RE
Stanley-Martin Communities LLC
133
U.S.


Media and entertainment
Affinity Group Holding Inc.
436
U.S.


Media and entertainment
Alpha Media Group Inc.
160
U.S.


Media and entertainment
American Media Operations Inc.
1,005
U.S.


Media and entertainment
CommerceConnect Media Holdings Inc.
0
U.S.


Media and entertainment
Freedom Communications Inc.
650
U.S.


Media and entertainment
GateHouse Media Operating Inc.
1,195
U.S.


Media and entertainment
Head N.V.
152
Netherlands


Media and entertainment
ION Media Networks Inc.
867
U.S.


Media and entertainment
Morris Publishing Group LLC (Morris Communications
475
U.S.


Media and entertainment
Muzak Holdings LLC
375
U.S.


Media and entertainment
Six Flags Inc.
3,140
U.S.


Media and entertainment
Triple Crown Media LLC (Triple Crown Media Inc.)
120
U.S.


Metals, mining, and steel
Indalex Holding Corp.
270
U.S.


Retail/restaurants
Loehmann's Holdings Inc.
110
U.S.


Retail/restaurants
Oriental Trading Co. Inc.
590
U.S.


Retail/restaurants
Sbarro Inc.
333
U.S.


Sovereign
Islamic Republic of Pakistan
5,952
Pakistan


Telecommunications
Hawaiian Telcom Communications Inc.
985
U.S.


Utility
Cheniere Energy Inc.
2,177
U.S.










Rating Combination And Subsector Issuer Debt (US$ Mil) Country

CCC/CreditWatch Negative

Media and entertainment
Alliance Film Holdings Inc
351
Canada


Media and entertainment
Mount Airy #1 LLC
455
U.S.



CCC/Outlook Negative
CP&ES
Tegrant Corp.
290
U.S.


Consumer products
Airborne Health Inc.
160
U.S.


Consumer products
Best Brands Corp.
245
U.S.


Consumer products
Human Touch LLC.
100
U.S.


Consumer products
Merisant Worldwide Inc.
546
U.S.


Consumer products
True Temper Sports Inc.
235
U.S.


Consumer products
Waterford Wedgwood PLC
226
Ireland


Finance companies
Geneva Finance Ltd.
0
New Zealand


Health care
InterDent Inc.
80
U.S.


Health care
Rotech Healthcare Inc.
287
U.S.


Home/RE
Rhodes Co.'s LLC (The)
393
U.S.


Media and entertainment
Black Gaming LLC
573
U.S.


Media and entertainment
MediaNews Group Inc.
1,047
U.S.


Media and entertainment
Progressive Gaming International Corp.
0
U.S.


Media and entertainment
Young Broadcasting Inc.
990
U.S.


Oil and gas EP
Petrol AD
136
Bulgaria


Retail/restaurants
Finlay Enterprises Inc.
200
U.S.


Retail/restaurants
Uno Restaurant Holdings Corp.
142
U.S.


Transportation
Atlantic Express Transportation Corp.
185
U.S.


Utility
November 2005 Land Investors, LLC
232
U.S.



CCC-/Outlook Negative
Financial institutions
Transtel Intermedia, S.A.
170
Colombia


High technology
ASAT Holdings Ltd.
150
Hong Kong


Home/RE
Fleetwood Enterprises Inc.
100
U.S.


Insurance
Conseco Senior Health Insurance Co. (Conseco Inc.)
0
U.S.










Rating Combination And Subsector Issuer Debt (US$ Mil) Country

CC/CreditWatch Negative

Forest
Masonite International Inc.
1,175
Canada


Health care
Angiotech Pharmaceuticals Inc.
575
Canada


Insurance
Penn Treaty Network America Insurance Co.
0
U.S.



CC/Outlook Negative

Consumer products
EuroFresh Inc.
214
U.S.


Telecommunications
P.T. Mobile-8 Telecom Tbk
100
Indonesia