/raid1/www/Hosts/bankrupt/TCRLA_Public/011231.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, December 31, 2001, Vol. 2, Issue 254
Headlines
A R G E N T I N A
AES OCEAN: S&P Lowers Local, Foreign Currency Ratings
AGUAS ARGENTINAS: S&P Cuts Foreign Currency Rating; Outlook Neg.
ARGENTINE BANKS: Government Orders Creation of Liquidity Fund
ARTE GRAFICO: S&P Reduces Local, Foreign Currency Ratings
AUTOPISTAS DEL SOL: S&P Cuts Sr Unsecured Foreign Rating
CABLEVISION SA: Foreign Currency Rating Dropped to `CC' by S&P
CAPEX SA: S&P Reduces Foreign Currency Rating; Negative Outlook
COMPANIA MEGA: S&P Drops Sr. Secured Foreign Currency Rating
COTO C.I.C.S.A.: S&P Downgrades Foreign Currency Rating
CTI HOLDINGS: S&P Downs Corp. Credit, Sr. Unsecured Ratings
DISTRIBUIDORA DE ENERGIA NORTE: S&P Cuts Local, Foreign Currency
DISTRIBUIDORA DE ENERGIA SUR: Local, Foreign Currency Downgraded
DISTRIBUIDORA Y COMERCIALIZADORA: S&P Cuts Local, Foreign Rating
EMPRESA DISTRIBUIDORA: S&P Lowers Local, Foreign Currency Ratings
FIRST TRUST: S&P Lowers Rating on $140M Argentine `05 Gain Notes
METROGAS SA: S&P Cuts Foreign Currency Rating, Outlook Negative
MULTICANAL SA: S&P Reduces Ratings On Local, Foreign Currency
TGN/TGS: S&P Reduces Foreign Currency Ratings; Negative Outlook
TRANSENER SA: S&P Lowers Foreign Currency Rating
B R A Z I L
EMBRAER: Delivering Jets Despite Tough Operating Environment
EMBRATEL: Currency Increase Boosts Shares, Cuts Loss Estimates
LIGHT: AES Rate Agreement With Government Bumps Shares Up
C O L O M B I A
VALORES BAVARIA: Avoiding Avianca's Bankruptcy Ill Received
M E X I C O
EMPRESAS ICA: Mexico City's Plans May Boost Sales In 2002
T R I N I D A D & T O B A G O
BWIA: Still Interested In Guyana's National Carrier Status
BWIA/LIAT: Join Forces To Strengthen Position, Stump Competition
- - - - - - - - - -
=================
A R G E N T I N A
=================
AES OCEAN: S&P Lowers Local, Foreign Currency Ratings
-----------------------------------------------------
Standard & Poor's lowered Thursday the local and foreign currency
ratings of AES Ocean Springs Ltd. to `CC' from `CCC-' maintaining
the same negative outlook.
The rating action follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is still uncertain.
Standard & Poor's expects that the increased use of substitute
currencies will result in a de facto devaluation, as the
"argentino" will trade at a heavy discount against the dollar.
This in turn will further weaken the earning power of local
currency-generating companies relative to foreign currency debt.
The increased likelihood of regulatory intervention also remains
a strong concern. Local currency ratings have been lowered for
companies particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
AGUAS ARGENTINAS: S&P Cuts Foreign Currency Rating; Outlook Neg.
----------------------------------------------------------------
Standard & Poor's lowered Thursday Aguas Argentinas S.A.'s
foreign currency rating to `CC' from `CCC+' with the same
negative outlook.
The rating action follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
ARGENTINE BANKS: Government Orders Creation of Liquidity Fund
-------------------------------------------------------------
An Argentine Central Bank spokesperson revealed that the
government issued a decree on Wednesday, which will see the
creation of a liquidity fund that would safeguard banks with
liquidity problems, reports Business News Americas.
The fund, to be financed by the banks themselves by setting aside
5 percent of their average peso- and foreign currency-denominated
deposits in November, would be in place for five years.
"The government will help banks with liquidity issues ... in the
current environment the measure makes sense," according to Bear
Stearns' Latin American banking analyst Jason Mollin.
The fund will be able to undertake a number of actions in order
to support troubled banks, such as buying equity stakes in the
banks, granting loans, participating in capital increases and
subscribing to commercial paper issues.
Rather than a safeguard for the financial system as a whole, the
fund is a buffer for individual banks that may face problems,
Lehman Brothers' director of Latin American equity research
Robert Lacoursiere said.
According to Mr. Lacoursiere, since the banks themselves will
finance the fund and no additional liquidity will be injected
into the system, a massive run on deposits on the day the
government lifts deposit restrictions could still break the whole
system.
However, if the public begins to withdraw deposits from smaller
banks, when the deposit restrictions are lifted, and put it into
larger banks (the so-called "flight to quality"), then the fund
would kick in.
ARTE GRAFICO: S&P Reduces Local, Foreign Currency Ratings
---------------------------------------------------------
Standard & Poor's reduced Thursday the local currency rating of
Arte Grafico Editorial Argentino S.A. to `CCC-' from `CCC+' on
CreditWatch negative.
In addition to that, the ratings agency also lowered the
Company's foreign currency rating to `CC' from `CCC+' still on
CreditWatch Negative.
The rating actions follow the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
AUTOPISTAS DEL SOL: S&P Cuts Sr Unsecured Foreign Rating
--------------------------------------------------------
Standard & Poor's cut Thursday the senior unsecured foreign
currency rating of Autopistas Del Sol S.A. to `CC' from `CCC+'
with the same negative outlook.
The rating action follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely.
Standard & Poor's notes that although exceptions appear to remain
in place allowing exporters to use export proceeds to repay
certain maturing obligations (while repatriating all other
proceeds within 15 days), it is unclear whether or for how long
these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is still uncertain.
Standard & Poor's expects that the increased use of substitute
currencies will result in a de facto devaluation, as the
"argentino" will trade at a heavy discount against the dollar.
This in turn will further weaken the earning power of local
currency-generating companies relative to foreign currency debt.
The increased likelihood of regulatory intervention also remains
a strong concern. Local currency ratings have been lowered for
companies particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
CABLEVISION SA: Foreign Currency Rating Dropped to `CC' by S&P
--------------------------------------------------------------
Standard & Poor's lowered Thursday the foreign currency rating of
Cablevision S.A. to `CC' from `CCC-' on CreditWatch negative.
The rating action follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely.
Standard & Poor's notes that although exceptions appear to remain
in place allowing exporters to use export proceeds to repay
certain maturing obligations (while repatriating all other
proceeds within 15 days), it is unclear whether or for how long
these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is still uncertain.
Standard & Poor's expects that the increased use of substitute
currencies will result in a de facto devaluation, as the
"argentino" will trade at a heavy discount against the dollar.
This in turn will further weaken the earning power of local
currency-generating companies relative to foreign currency debt.
The increased likelihood of regulatory intervention also remains
a strong concern. Local currency ratings have been lowered for
companies particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
CAPEX SA: S&P Reduces Foreign Currency Rating; Negative Outlook
---------------------------------------------------------------
Standard & Poor's lowered Thursday the foreign currency rating of
Capex S.A. to `CC' from `CCC-' with the same negative outlook.
The rating action follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely.
Standard & Poor's notes that although exceptions appear to remain
in place allowing exporters to use export proceeds to repay
certain maturing obligations (while repatriating all other
proceeds within 15 days), it is unclear whether or for how long
these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is still not known.
Standard & Poor's expects that the increased use of substitute
currencies will result in a de facto devaluation, as the
"argentino" will trade at a heavy discount against the dollar.
This in turn will further weaken the earning power of local
currency-generating companies relative to foreign currency debt.
The increased likelihood of regulatory intervention also remains
a strong concern. Local currency ratings have been lowered for
companies particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
COMPANIA MEGA: S&P Drops Sr. Secured Foreign Currency Rating
------------------------------------------------------------
Standard & Poor's downgraded Thursday the senior secured foreign
currency rating of Compania MEGA to `CC' from `CCC+' on
CreditWatch negative.
The rating action follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
COTO C.I.C.S.A.: S&P Downgrades Foreign Currency Rating
-------------------------------------------------------
Standard & Poor's downgraded Thursday the foreign currency rating
of Coto C.I.C.S.A. to `CC' from `CCC+' with the same negative
outlook.
The rating action follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
CTI HOLDINGS: S&P Downs Corp. Credit, Sr. Unsecured Ratings
-----------------------------------------------------------
Standard & Poor's on Thursday downgraded CTI Holdings S.A.'s
corporate credit rating to `CC' from `CCC' with a negative
outlook.
The ratings agency also lowered the Company's senior unsecured
debt to `C' from `CC' also with a negative outlook.
The downgrades follow the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
DISTRIBUIDORA DE ENERGIA NORTE: S&P Cuts Local, Foreign Currency
----------------------------------------------------------------
Standard & Poor's cut the local currency rating of Empresa
Distribuidora de Energia Norte S.A. to `CCC-' from `CCC+' with a
negative outlook.
S&P further downgraded the Company's foreign currency rating to
`CC' from `CCC+' also with a negative outlook.
The rating actions follow the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
DISTRIBUIDORA DE ENERGIA SUR: Local, Foreign Currency Downgraded
----------------------------------------------------------------
Standard & Poor's cut the local currency rating of Empresa
Distribuidora de Energia Sur S.A. to `CCC-' from `CCC+' with a
negative outlook.
S&P further downgraded the Company's foreign currency rating to
`CC' from `CCC+' also with a negative outlook.
The rating actions follow the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely.
Standard & Poor's notes that although exceptions appear to remain
in place allowing exporters to use export proceeds to repay
certain maturing obligations (while repatriating all other
proceeds within 15 days), it is unclear whether or for how long
these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
DISTRIBUIDORA Y COMERCIALIZADORA: S&P Cuts Local, Foreign Rating
----------------------------------------------------------------
Standard & Poor's lowered Thursday the local currency rating of
Empresa Distribuidora y Comercializadora Norte S.A. to `CCC+'
from `B-' with a negative outlook.
S&P further downgraded the Company's foreign currency rating to
`CC' from `CCC+' also with a negative outlook.
The rating actions follow the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely.
Standard & Poor's notes that although exceptions appear to remain
in place allowing exporters to use export proceeds to repay
certain maturing obligations (while repatriating all other
proceeds within 15 days), it is unclear whether or for how long
these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
EMPRESA DISTRIBUIDORA: S&P Lowers Local, Foreign Currency Ratings
-----------------------------------------------------------------
Standard & Poor's lowered Thursday the local currency rating of
Empresa Distribuidora Sur S.A. to `CCC+' from `B-' with a
negative outlook.
Moreover, the Company's foreign currency rating was downgraded by
S&P to `CC' from `CCC+' also with a negative outlook.
The rating actions follow the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
FIRST TRUST: S&P Lowers Rating on $140M Argentine `05 Gain Notes
----------------------------------------------------------------
Standard & Poor's lowered its rating on First Trust of New York
N.A. Representacion Permanente en A's $140 million 2% gain
financial trust notes due 2005 (GAIN 2005) to double-'C' from
triple-'C'-plus.
The rating action follows the downgrade of the foreign currency
rating of the respective underlying corporate obligor, Empresa
Distribuidora y Comercializadora Norte S.A. (Edenor), to double-
'C' from triple-'C'-plus. In the referred transaction, principal
and interest repayment is dependent on the creditworthiness of
this underlying obligor.
Both rating actions follow the Argentine government's
announcement over the weekend of a moratorium on the government's
foreign currency debt, more comprehensive foreign exchange
controls, and an extended bank holiday. Although the interim
government of President Adolfo Rodriguez Saa has declared that
the convertibility regime between the peso and the U.S. dollar
will be maintained, the intention to introduce a third currency
in January, the "argentino", underscores the uncertainties
related to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer rating to double-'C' for those companies such as
Edenor, that have interest or principal maturities due over the
next three months and that do not have access to external
resources to repay foreign debt (either through exports, offshore
operations, or foreign parents that Standard & Poor's expects to
assist subsidiaries in honoring maturing obligations).
The GAIN 2005 transaction benefits from a transfer and
convertibility insurance policy issued by Overseas Private
Investment Corp. The rating on the deal is based on the foreign
currency rating of Edenor, because the political risk insurance
policy covers 100% of principal but does not cover interest
payments. Additionally, the transaction also does not have a
reserve fund for timely payment of the bonds during any of the
events cover by the policy. Thus, the rating has not been
enhanced by the insurance policy and is therefore constrained by
the foreign currency rating of the respective underlying
corporate obligor.
CONTACT: Standard & Poor's Ratings Services:
Jorge Solari, Buenos Aires, +54-114-891-2114
Juan Pablo De Mollein, Buenos Aires, +54-114-891-2113
Rosario Buendia, New York, +1-212-438-2410
METROGAS SA: S&P Cuts Foreign Currency Rating, Outlook Negative
---------------------------------------------------------------
Standard & Poor's cut the foreign currency rating of Metrogas
S.A. to `CC' from `CCC+' with a negative outlook.
The downgrade follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
MULTICANAL SA: S&P Reduces Ratings On Local, Foreign Currency
-------------------------------------------------------------
Standard & Poor's cut the local currency rating of Multicanal
S.A. to `CCC-' from `CCC' on CreditWatch negative.
The ratings agency also downgraded Multicanal's foreign currency
rating to `CC' from `CCC' also on CreditWatch negative.
The downgrades follow the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
TGN/TGS: S&P Reduces Foreign Currency Ratings; Negative Outlook
---------------------------------------------------------------
Standard & Poor's cut the foreign currency rating of both
Transportadora de Gas del Norte S.A. (TGN) and Transportadora de
Gas del Sur S.A. (TGS) to `CC' from `CCC+' with a negative
outlook.
The cut follows the Argentine government's announcement over the
weekend of a moratorium on the government's foreign currency
debt, more comprehensive foreign exchange controls, and an
extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations). Most other
foreign currency issuer ratings remain equal to the issuer's
local currency rating, up to triple-'C'-plus, reflecting the
still substantial risks that parent support may weaken or that
the ability to repay obligations with export proceeds may not be
extended indefinitely. Standard & Poor's notes that although
exceptions appear to remain in place allowing exporters to use
export proceeds to repay certain maturing obligations (while
repatriating all other proceeds within 15 days), it is unclear
whether or for how long these exceptions will be maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
TRANSENER SA: S&P Lowers Foreign Currency Rating
------------------------------------------------
Standard & Poor's lowered Thursday the foreign currency rating of
Compania de Transporte de EnergĦa Elctrica en Alta Tensi˘n
TRANSENER S.A. to `CC' from `CCC+' with the same negative
outlook.
The rating action follows the Argentine government's announcement
over the weekend of a moratorium on the government's foreign
currency debt, more comprehensive foreign exchange controls, and
an extended bank holiday. Although the interim government of
President Adolfo Rodriguez Saa has declared that the
convertibility regime between the peso and the U.S. dollar will
be maintained, the intention to introduce a third currency in
January, the "argentino", underscores the uncertainties related
to the means of payment that will be used in Argentina.
The ability of Argentine companies to repay obligations
denominated in foreign currency has been further weakened by
extended foreign exchange controls. Given the uncertainty over
when and whether any hard currency payments will be authorized by
the Central Bank, Standard & Poor's has lowered the foreign
currency issuer ratings to double-'C' for those companies that
have interest or principal maturities due over the next three
months and that do not have access to external resources to repay
foreign debt (either through exports, offshore operations, or
foreign parents that Standard & Poor's expects to assist
subsidiaries in honoring maturing obligations).
Most other foreign currency issuer ratings remain equal to the
issuer's local currency rating, up to triple-'C'-plus, reflecting
the still substantial risks that parent support may weaken or
that the ability to repay obligations with export proceeds may
not be extended indefinitely. Standard & Poor's notes that
although exceptions appear to remain in place allowing exporters
to use export proceeds to repay certain maturing obligations
(while repatriating all other proceeds within 15 days), it is
unclear whether or for how long these exceptions will be
maintained.
The ability of Argentine companies to repay the local currency
equivalent of their obligations has also weakened for many
companies. The severe local credit crunch has worsened due to the
extended bank holiday, on top of limited access to cash (up to
US$250 per week or US$1,000 per month). Beginning in January,
access to cash will be in the form of "argentinos", whose value
relative to the peso or the U.S. dollar is uncertain. Standard &
Poor's expects that the increased use of substitute currencies
will result in a de facto devaluation, as the "argentino" will
trade at a heavy discount against the dollar. This in turn will
further weaken the earning power of local currency-generating
companies relative to foreign currency debt. The increased
likelihood of regulatory intervention also remains a strong
concern. Local currency ratings have been lowered for companies
particularly affected by these country risk factors.
Analyst: Lidia Polakovic, Buenos Aires (54) 114-891-2130; Laura
Feinland Katz, New York (1) 212-438-7893; Pablo Lutereau, Buenos
Aires (54) 114-891-2125
===========
B R A Z I L
===========
EMBRAER: Delivering Jets Despite Tough Operating Environment
------------------------------------------------------------
In an official press release, Mesa Air Group, Inc. (Nasdaq:
MESA), announced Thursday that it has taken delivery of two new
Embraer ERJ 145s. The company has also completed the financing on
two additional ERJ 145s for delivery in early January 2002. The
four new jets, which will be used in the US Airways Express
system, will bring Mesa's total ERJ fleet to 25 aircraft.
"Given the current difficult operating environment, we are
delighted to work with Embraer and our lessors to finalize this
transaction," said Jonathan Ornstein, Mesa's Chairman and Chief
Executive Officer. "We believe these deliveries signify the
continuing confidence of the financial markets in our business
plan and will allow us to move forward with our regional jet
expansion. We anticipate the delivery of approximately 13
regional jets over the next two years."
Mesa currently operates 116 aircraft with 832 daily system
departures to 153 cities, 38 states, Canada and Mexico. It
operates in the west and mid-west as America West Express, the
midwest and east as US Airways Express, in partnership with
Midwest Express out of Kansas City and in New Mexico as Mesa
Airlines. It will also begin codesharing with Frontier Airlines
out of Denver February 17, 2002. The Company, which was founded
in New Mexico in 1982, has approximately 3,000 employees. Mesa is
a member of Regional Aviation Partners.
To see company's latest financial statements:
http://www.bankrupt.com/misc/Embraer.pdf
CONTACT: Benet J. Wilson of Mesa Air Group, Inc.
+1-602-685-4018
Benet.Wilson@mesa-air.com
EMBRAER:
Press office
Phone +55 12 3945 1311
Fax + 55 12 3945 2411
Press office mgr. Bob Sharp
bob.sharp@embraer.com.br
Press officer Wagner Gonzalez
wagner.gonzalez@embraer.com.br
EMBRATEL: Currency Increase Boosts Shares, Cuts Loss Estimates
--------------------------------------------------------------
Embratel Participacoes SA preferred shares rose 3.8 percent to
9.84 reais, according to a report by Bloomberg.
An analyst at Santander Central Hispano Investment reduced
estimated losses for Brazil's largest long-distance phone company
in 2001, as the real's appreciation against the dollar in the
past months should help Embratel to decrease financial expenses
in fourth quarter.
Embratel's debts at the end of the third quarter were R$2.6
billion, with almost 100 percent in foreign currency. Rumors
concerning a possible sale of Embratel are still rife in the
market.
To see company's financial statements:
http://www.bankrupt.com/misc/Embratel.pdf
CONTACT: Embratel Participacoes S.A.
Investor Relations
Silvia M.R. Pereira, (55 21) 2519-9662
fax: (55 21) 2519-6388
invest@embratel.com.br
or
Press Relations
Wallace Borges Grecco, (55 21) 2519-7282
fax: (55 21) 2519-8010
cmsocial@embratel.net.br
LIGHT: AES Rate Agreement With Government Bumps Shares Up
---------------------------------------------------------
Light Servicos de Eletricidade SA shares rose 5 percent to 125.51
reais, as its controller shareholder AES Corp. reached an
agreement with the Brazilian government to raise rates to
compensate for losses from electricity rationing imposed since
June, says Bloomberg.
Rates increase will be phased in over the next three to four
years, AES said in a statement.
AES will get 90 percent of the cash to be generated by the
increase up front from the Brazilian government as a loan.
===============
C O L O M B I A
===============
VALORES BAVARIA: Avoiding Avianca's Bankruptcy Ill Received
-----------------------------------------------------------
Shares of Colombia's troubled Valores Bavaria conglomerate fell
slightly to 340 pesos, on trading of 137,100 shares, reports
Bloomberg.
Investors sold Valores on concern a plan to stave off bankruptcy
of its airline Avianca, including a public offering of 10 billion
pesos in shares at the carrier, will continue during most of next
year, widening Valores' loss, said Camilo Alban, president of
Davivalores SA brokerage.
Valores Bavaria is the holding company for the non-beverage
investments of Colombia's Santo Domingo family.
===========
M E X I C O
===========
EMPRESAS ICA: Mexico City's Plans May Boost Sales In 2002
---------------------------------------------------------
Empresas ICA Sociedad Controladora SA, the country's leading
construction company, saw its shares climbed 10.5 percent to 4.2
pesos, informs Bloomberg.
Investors are expecting that plans by Mexico City to improve its
infrastructure by extending the subway system to the suburbs and
building a second level on the capital's main thoroughfare may
boost sales by the company in 2002, analysts said.
ICA is said to be the best performing stock on the index this
year, having risen nearly 100 percent. But the Company still
expects to make "significant" fourth-quarter operating and net
losses on provisions and 2.16 billion pesos ($235 million) in
write-offs.
ICA has not made a profit for at least three years.
=================================
T R I N I D A D & T O B A G O
=================================
BWIA: Still Interested In Guyana's National Carrier Status
----------------------------------------------------------
BWIA maintains its interest in becoming Guyana's national carrier
even with the arrival of the country's newest airline, Universal
Airlines Inc. (UAI).
In a report released by The Trinidad Guardian, Clint Williams,
BWIA's corporate communications manager, said that the airline
had expressed interest in being Guyana's national carrier, but
has yet to apply to the Bharrat Jagdeo government.
"We have not given a formal application to the government... but
it is not something we have written off," he said.
Williams said BWIA did not know that UAI had entered the market
and had no problem with the new competition.
"The reality is that competition is good for the consumer," he
said.
On the new airline's likely impact on BWIA's revenue and
passenger flow, Williams replied said only time would tell.
" We will have to wait and see...as usual when there is something
new, people would try it."
BWIA/LIAT: Join Forces To Strengthen Position, Stump Competition
----------------------------------------------------------------
BWIA and LIAT have joined forces in an alliance, which according
to BWIA President and Chief Executive Officer Conrad Aleong, will
bring together two Caribbean carriers that have 100 years
combined service to the region.
"Through this initiative, connections between BWIA and LIAT will
be as seamless as if they were traveling on one airline.
Additionally, LIAT's Caribbean passengers will be able to easily
access international service via the key BWIA hubs of Trinidad,
Barbados and Antigua," stated Aleong.
Commenting on the agreement, LIAT Chief Executive Officer Garry
Cullen said that the importance of the role played by stable and
reliable air transport in the development of the region could not
be overstated.
"I see this alliance as a development of great significance,
leading to improved service levels and route development. The
entire region will benefit from the efficiencies that are being
created today," he said.
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter Latin American is a daily newsletter
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Psamathe P. Alfeche, Editors.
Copyright 2001. All rights reserved. ISSN 1529-2746.
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