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        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

            Friday, July 22, 2005, Vol. 6, Issue 144

                            Headlines


A R G E N T I N A

BANCO DE LA EDIFICADORA: Court Rules, Bankruptcy Official
BULFOR S.R.L.: To Propose Settlement Plan to Creditors
CARNES CARCARANA: Initiates Bankruptcy Proceedings
CONEMAR S.R.L.: Individual Reports Expected by Monday
EGAM S.A.I.C.: Claims Validation Ends Monday

KEY ENERGY: Provides June Rig Hours, Select Financial Data
LA ESTIBADORA: Trustee Winding Up Claims Review Process
STORAGE SYSTEMS: Creditor Claims Review to End Soon


B E R M U D A

SEA CONTAINERS: Declares Cash Dividend on Common Shares


B R A Z I L

ARACRUZ CELULOSE: S&P's Issues Ratings Analysis
BANCO SANTOS: Fraud Investigation Becomes International Issue
CESP: Government to Conclude $427M Capital Increase by July `06
GLOBOPAR: Announces Completion of Debt Restructuring
UNIBANCO: Board OKs Capital Stock Payment to Shareholders

UNIBANCO: Approves Fixed Rate Securities Issuance
UNIBANCO: Moody's Assigns Ba2 Rating to Cayman Unit's Securities
* BRAZIL: To Make Early Repayment on IMF Obligations


C O L O M B I A

GRANAHORRAR: Staff Gets First Priority to Participate in Sale


C O S T A   R I C A

ICE: Comptroller General Doubtful of Financial Future


D O M I N I C A N   R E P U B L I C

* DOMINICAN REPUBLIC: Weak External Indicators Constrain Ratings


E L   S A L V A D O R

CAESS: S&P Releases Credit Analysis on Company, Affiliates


J A M A I C A

AIR JAMAICA: Chairman Predicts Positive Restructuring Result


M E X I C O

AXTEL: Ratings Reflect Improving Financial Performance
BALLY TOTAL: Board Re-Affirms Support to CEO Paul Toback
BANCO INTERACCIONES: Moody's Assigns Initial Ratings
CINTRA: Renews Agreements With Sabre Travel Network
EMPRESAS ICA: To Carry Out APM Project With Austrian Partner
GRUPO ELEKTRA: Analysts Expect 86% 2Q Net Profit Increase

GRUPO POSADAS: Rating Reflects High Financial Leverage
TV AZTECA: Flat Revenue Growth Forecast Released


P E R U

SPCC: Sells $800M Worth of Bonds


V E N E Z U E L A

PDVSA: To Build $2.5B Oil Refinery With Brazil's Petrobras
PDVSA: Reviews Ecuador Crude Refining Opportunity


     - - - - - - - - - -


=================
A R G E N T I N A
=================

BANCO DE LA EDIFICADORA: Court Rules, Bankruptcy Official
---------------------------------------------------------
Banco de la Edificadora de Olavarria S.A. enters bankruptcy
protection after Court No. 1 of Olavarria civil and commercial
tribunal ordered the Company's liquidation. The order
effectively transfers control of the Company's assets to a
court-appointed trustee who will supervise the liquidation
proceedings.

Infobae reports that the court selected Eduardo Alzueta and Ana
Maria Santillan as receivers. The receivers will be verifying
creditors' proofs of claim until the end of the verification
phase on Aug. 16, 2005.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the Company's accounting
and business records. The individual reports will be submitted
on Sep. 27, 2005 followed by the general report, which is due on
Nov. 9, 2005.

CONTACT: Banco de la Edificadora de Olavarria S.A.
         Rivadavia 3000
         Olavarria

         Mr. Eduardo Alzueta & Ms. Ana Maria Santillan, Trustees
         Alvaro Barros 3369
         Olavarria


BULFOR S.R.L.: To Propose Settlement Plan to Creditors
------------------------------------------------------
Rosario-based company Bulfor S.R.L. will present to its
creditors a settlement plan in an informative assembly on
Monday, July 25, 2005. Creditors of the Company will vote to
ratify the completed settlement plan during the said assembly.

Bulfor S.R.L. started its reorganization after Court No. 1 of
Rosario's (Santa Fe) civil and commercial tribunal granted its
"concurso" motion.


CARNES CARCARANA: Initiates Bankruptcy Proceedings
--------------------------------------------------
Santa Fe's civil and commercial Court No. 1 declared Carnes
Carcarana S.R.L. "Quiebra," reports Infobae.

The court will appoint a trustee to verify creditors' claims and
prepare individual reports out of the verified claims. The
trustee will also be expected to submit to court a general
report. The dates for the deadline of the verification as well
as submission of reports are yet to be disclosed.

The case will close with the liquidation of the Company's assets
to repay its creditors.

CONTACT: Carnes Carcarana S.R.L.
         Abrate 785
         Carcarana
         Depto San Lorenzo (Santa Fe)


CONEMAR S.R.L.: Individual Reports Expected by Monday
-----------------------------------------------------
The individual reports on the validated claims of the creditors
of Conemar S.R.L. will be submitted for court approval on
Monday, July 25, 2005. Mr. Miguel Daniel Pellejero Herrero, the
trustee assigned to supervise the liquidation of Conemar S.R.L.,
is tasked to prepare these reports, which explain the basis for
the accepted and rejected claims.

The trustee is also required by the court to submit a general
report of the case on Sep. 7, 2005. Court No. 20 of Buenos
Aires' civil and commercial tribunal handles the Company's
bankruptcy case with the assistance of the city's Clerk No. 39.

CONTACT: Mr. Miguel Daniel Pellejero Herrero, Trustee
         Raul Scalabrini Ortiz 2835
         Buenos Aires


EGAM S.A.I.C.: Claims Validation Ends Monday
--------------------------------------------
The authentication of the claims of the creditors of bankrupt
company Egam S.A.I.C. will end on Monday, July 25, 2005. Ms.
Marta Magdalena Comba, the assigned trustee for the Company's
liquidation, will prepare individual reports on the forwarded
claims. They are to be presented to court for approval. The
trustee will also submit a general report.

Buenos Aires' civil and commercial Court No. 7 handles the
Company's case with assistance from Clerk No. 13.

CONTACT: Ms. Marta Magdalena Comba, Trustee
         Hipolito Yrigoyen 1349
         Buenos Aires


KEY ENERGY: Provides June Rig Hours, Select Financial Data
----------------------------------------------------------
Key Energy Services, Inc. (OTC Pink Sheets: KEGS) announced
Wednesday rig hours for the month of June 2005 and provided
select financial data for the month ended May 31, 2005.  The
Company is providing this information to investors as part of
the consent from the holders of the Company's 6 3/8% senior
notes due 2013 and its 8 3/8% senior notes due 2008.

                    ACTIVITY LEVELS

                                   Month Ending
                     6/30/2005       5/31/2005     6/30/2004
    Working Days        22              21            22
    Rig Hours         227,150         218,774       211,289
    Trucking Hours    207,028         214,373       240,642

The Company calculates working days as total weekdays for the
month less any company holidays that fall in that month. For the
month of July 2005, there are 21 working days.

                   SELECT FINANCIAL DATA

Set forth below is certain financial information for the Company
for the month ended May 31, 2005. The information provided has
been prepared by management in accordance with generally
accepted accounting principles but is unaudited and has not been
reviewed by the Company's independent accountants. The table
does not contain all the information or notes that would be
included in the Company's financial statements.

                                      Month Ended
                                         5/31/05
                                 (In thousands - Unaudited)
    Select Operating Data:
    Revenues
      Well servicing (A)                             $80,215
      Pressure Pumping                                11,507
      Fishing and Rental Services                      6,533
      Other (B)                                       (4,266)
    Total revenues                                   $93,989

    Costs and Expenses
      Well servicing (C)                             $53,141
      Pressure Pumping                                 7,402
      Fishing and Rental Services                      4,592
      General and administrative                      11,873
      Interest (D)                                     6,094

                                                5/31/05
                                    (In thousands - Unaudited)
    Select Balance Sheet Data:
    Current Assets
      Cash and cash equivalents (E), (F)            $100,739
        Short term investments                        32,850
        Accounts receivable, net of allowance
         for doubtful accounts                       193,058
        Inventories                                   20,206
        Prepaid expenses and other
         current assets                               17,900
    Total current assets                            $364,753

    Current Liabilities
      Accounts payable                                63,603
      Other accrued liabilities                       77,310
      Accrued interest                                 7,300
      Current portion of long-term debt and
       capital lease obligations                       3,791
    Total current liabilities                       $152,004

    Long-term debt, less current portion (G)        $473,773
    Capital lease obligations, less current portion    7,582
    Deferred Revenue                                     458
    Non-current accrued expenses                      38,566

                         NOTES

     (A)  The Well Servicing category includes the financial
results of the Company's remaining contract drilling assets
which are located in Argentina, Appalachia and the Powder River
Basin of Wyoming.

     (B)  Other revenue includes an estimated loss on the sale
of Michigan assets of approximately $3,992,000.  This estimate
is subject to the ongoing restatement process and, therefore,
may be reflected in 2003 or prior years upon completion of the
restatement process.

     (C)  Well Servicing direct expense includes a $4.0 million
expense
          associated with a vehicular accident.
     (D)  Interest expense includes amortization of deferred
debt issue costs, discount and premium of approximately $165,000
for the month ended May 31, 2005.

     (E)  Cash and short term investments at July 19, 2005
totaled approximately $99.8 million.

     (F)  Capital expenditures were approximately $10,534,000
for the month ended May 31, 2005.

     (G)  There were no outstanding borrowings under the
Company's revolving credit facility at July 19, 2005.

The information herein represents the results for only one
month; ordinarily the Company reports financial information on a
quarterly basis, and the information herein is not necessarily
indicative of the results that may be reported for the full
quarter ended June 30, 2005, or the fiscal year ended December
31, 2005. The information herein is selected financial data and
does not represent a complete set of financial statements, which
would include additional financial data and notes to financial
statements. Until the restatement of the Company's prior year
financial statements is completed, the unaudited information
herein may differ from its restated financial statements. It is
possible that the process of restating the prior year financial
statements could require additional changes to the Company's
financial statements for 2005 that individually or in the
aggregate could be material to the Company's financial position,
results of operations or liquidity.

Key Energy Services, Inc. is the world's largest rig-based well
service company. The Company provides oilfield services
including well servicing, contract drilling, pressure pumping,
fishing and rental tools and other oilfield services. The
Company has operations in all major onshore oil and gas
producing regions of the continental United States and
internationally in Argentina.

CONTACT: KEY ENERGY SERVICES, INC.
         John Daniel
         (713) 651-4300


LA ESTIBADORA: Trustee Winding Up Claims Review Process
-------------------------------------------------------
Ms. Ana Maria Blugerman, trustee appointed by Buenos Aires civil
and commercial Court No. 2 for the La Estibadora S.A. bankruptcy
case, will stop accepting claims from the Company's creditors on
Monday, July 25, 2005.

After reviewing the submitted claims, Ms. Blugerman will prepare
individual reports and present them to court for approval on
Sep. 12, 2005. The trustee will also submit a general report of
the case on Oct. 25, 2005.

Clerk No. 3 assists the court on this case that will end with
the sale of the Company's assets. Proceeds from the sale will
be used to repay the Company's debts.

CONTACT: Ms. Ana Maria Blugerman, Trustee
         Parana 774
         Buenos Aires


STORAGE SYSTEMS: Creditor Claims Review to End Soon
---------------------------------------------------
The deadline for the verification of claims of the creditors of
Storage Systems S.A. will be on Monday, July 25, 2005. Court-
appointed trustee Alberto Menendez will prepare individual
reports based on the forwarded claims, and a general report
containing an audit of the Company's accounting and business
records as required by the Argentine bankruptcy law. The
individual reports will be submitted on Sep. 6, 2005 followed by
the general report, which is due on Oct. 19, 2005.

Storage Systems S.A. entered bankruptcy protection after Court
No. 19 of Buenos Aires' civil and commercial tribunal, with the
assistance of Clerk No. 38, ordered the Company's liquidation.

CONTACT: Storage Systems S.A.
         Luis Saenz Pena 352
         Buenos Aires

         Mr. Carlos Alberto Menendez, Trustee
         Ventura Bosch 7098
         Buenos Aires



=============
B E R M U D A
=============

SEA CONTAINERS: Declares Cash Dividend on Common Shares
-------------------------------------------------------
The Board of Directors of Sea Containers Ltd. declared Wednesday
quarterly cash dividends on the Company's Class A and Class B
common shares.

The dividend will be $0.025 per share on the Class A common
shares and $0.0225 per share on the Class B common shares.
Class B common shares are convertible at any time into Class A
common shares.  The dividends will be payable August 22, 2005 to
shareholders of record August 5, 2005.

The Class A and B common shares of Sea Containers Ltd. are
listed on the New York Stock Exchange under the symbols SCRA and
SCRB, respectively.

CONTACT: Sea Containers Ltd.
         William W. Galvin
         Phone: 203 / 618-9800
         URL: http://www.seacontainers.com



===========
B R A Z I L
===========

ARACRUZ CELULOSE: S&P's Issues Ratings Analysis
-----------------------------------------------
RATIONALE

The 'BB-' foreign currency rating on Aracruz Celulose S.A.
(Aracruz) mirrors the foreign currency rating assigned to the
Federative Republic of Brazil. The 'BBB-' local currency rating
reflects Aracruz's ability to remain protected against the
peculiarities of the Brazilian economy, stemming from:

    * The company's virtual total sales to the external market;
    * Its strong competitive position in the market pulp
business as a low-cost producer, bearing one of the lowest cash
costs in the world; and
    * Its free cash flow generation since 2004.

On the other hand, Standard & Poor's Ratings Services also
considers that a prolonged economic crisis in Brazil could
potentially curtail the company's financial flexibility in the
medium term, as its ability to sustain cash generation at
current strong levels and to execute adequate investment
decisions to support its long-term growth could be impaired. The
continuity of Brazil's improving economic and political
environment provides Aracruz with more stable conditions under
which to manage its financial position.

Aracruz's accumulated first-half 2005 results show another
record volume sold of 1,208,000 tons, 8% higher than the volume
for first-half 2004. The higher volume sold and average list
pulp prices about 9% higher than the same period last year in
the global market supported the 13.8% increase in net revenues
for the accumulated first-half 2005 compared with those of
first-half 2004. Even though larger net sales have notably
contributed to the company's financial performance in the
period, the lower wood requirements purchased from third parties
was also key to keeping Aracruz's historically great
profitability level. As the appreciation of Brazilian local
currency raises Aracruz's costs and expenses (about 60% of total
cash costs and expenses are local currency-denominated), the
average 14% appreciation of the local currency experienced in
first-half 2005 was offset by minor costly wood purchases from
third parties to some 14% of total needs from about 30% in the
beginning of the year. By increasing the level of self-
sufficiency in the period, Aracruz was able to counterbalance
about 50% of the cash effect of local currency appreciation on
cash costs.

As a result, Aracruz's EBITDA grew about 16% in the same period
(US$317.4 million in first-half 2005 and US$272.9 million in
first-half 2004), a significant increase even considering that
60% of Aracruz's cash costs and expenses are denominated in
local currency (Real). Also in first-half 2005, EBITDA to gross
interest coverage was enhanced and hit 5.25x (4.76x in first-
half 2004), and funds from operations (FFO) to total gross debt
(including Veracel's 50% debt portion) reached 33.8%, which is
higher compared to 30% in the same period last year. Aracruz's
higher FFO in first-half 2005 of US$300.7 million (US$228.5
million in first-half 2004) derives from the same grounds as the
EBITDA growth. The company's credit metrics in first-half 2005
are in line with Standard & Poor's previous expectations.

For analytical purposes, Standard & Poor's projections
proportionally incorporate Aracruz's USGAAP financial figures,
50% of the Veracel debt, and 50% of its projected cash
generation, as Aracruz guarantees 50% of the debt and will
benefit from 50% of Veracel's pulp production. In 2005, Aracruz
is expected to sell 130,000 tons of pulp coming from this plant.
Veracel is a 900,000-ton pulp project in association with
Sweden-based pulp and paper producer Stora Enso. This plant
started production in late May 2005 and the learning curve
should end in 2006, when Veracel will be able to deliver 900,000
tons of pulp.

Aracruz is the world's leading producer of bleached eucalyptus
Kraft pulp (BEKP), accounting for some 31% of the global supply,
or some 2.5 million tons per year, not considering Veracel's
output portion. Since the Fiberline C project began, Aracruz is
no longer self sufficient in its fiber needs. However, the
company's higher wood requirements are being supplied by the
Veracel project. In 2004, 35% of Aracruz's wood requirements
were supplied by Veracel, and the company's projection for 2005
is 15%. Aracruz has already invested in its self-sufficiency
projects and is expected to be self sufficient in fiber again by
2006.

LIQUIDITY

Liquidity remains comfortable and is one of the key rating
factors that sustains Aracruz's average financial risk. The
acquisitions of the GuaĦba mill in 2003 and the Veracel project
led its formerly average debt position to increase about US$600
million from second-semester 2003 until now. Even though Aracruz
has focused on the international credit markets, it also enjoys
strong access to the local credit market (although bank lines
are not committed in Brazil) and benefits from a "flight to
quality" during a stressed macroeconomic environment.

Aracruz has shown a positive free cash flow since 2004, and
Standard & Poor's projections indicate that it will remain
positive, even considering Aracruz's portion of investments to
be completed in the Veracel project. The company is expected to
use its free cash to amortize long-term debt. It is also part of
Aracruz's financial strategy to seek to stretch the total debt
amortization schedule, which is aimed at strengthening the
company's financial flexibility. This action is highlighted by
its short-term to total debt ratio of 20% in first-half 2005.
Moreover, Aracruz has established a financial policy directive
in which cash holdings are targeted to be at least equivalent to
12 months of amortization (in first-half 2005 it represents 24
months), which improves its financial flexibility in the event
of an unexpected credit crunch.

As of full-year 2004, about 46% of Aracruz's partially
consolidated debt with Veracel was its export future flow
securitization, and the remaining were long-term trade finance
(20%) and BNDES transactions (some 25%), with a comfortable
amortization schedule. According to Standard & Poor's
projections, total gross debt is expected to remain at US$1.6
billion at the end of 2005 (or about US$1.2 billion when
considering the total debt net of cash holdings), when it will
gradually start to decline. From 2006 on, Aracruz will face
higher debt amortization amounts, but the company should benefit
from larger cash generation as a result of the Veracel full
output coming on stream.

OUTLOOK

The stable outlook on Aracruz's foreign currency rating reflects
that of the sovereign rating of the Federative Republic of
Brazil. The stable outlook on the local currency rating reflects
the expectation that the current economic, financial, and
political conditions in Brazil will allow Aracruz to sustain
strong profitability and access to long-term funding either
internationally or locally. Rating stability also considers that
from 2006 on, the company (partially consolidated with Veracel)
will be able to sustain coverage ratios (EBITDA to gross
interest) of about 6x and total gross debt to EBITDA of about
2x, as Aracruz will benefit from Veracel's full output coming on
stream. If the company's performance deteriorates as a result of
a change in its fundamentals, and from 2006 on, Aracruz fails to
deliver FFO to total debt of about 35% and total debt to EBITDA
of close to 2x, the outlook could be revised to negative.

Primary Credit Analyst(s):
Marcelo Costa, Sao Paulo (55) 11-5501-8955;
marcelo_costa@standardandpoors.com
Secondary Credit Analyst(s):
Milena Zaniboni, Sao Paulo (55) 11-5501-8945;
milena_zaniboni@standardandpoors.com


BANCO SANTOS: Fraud Investigation Becomes International Issue
-------------------------------------------------------------
The investigation into alleged fraud at Brazilian bank Banco
Santos has expanded internationally. According to Reuters,
regulators from Brazil and the Caribbean have agreed to exchange
information to speed up the recovery of missing funds for the
bank's creditors.

Creditors have lost nearly US$1 billion invested in banks owned
or linked to financier Edemar Cid Ferreira. Citing liquidation
proceedings, Brazil's central bank said some US$230 million was
lost in Brazil while around US$700 million is the combined
shortfall of two offshore banks.

Investigators suspect Ferreira, along with his wife and son, set
up a series of holding companies and trusts linked to two banks
they apparently controlled -- Bank of Europe in Antigua and
Alsace Lorraine Ltd. in the British Virgin Islands.

Using the offshore banks, Banco Santos allegedly required
investors to deposit cash in Bank of Europe as collateral for
loans in Brazil.

Needing to recapitalize because of a gaping shortfall, Banco
Santos raised cash by selling junk bonds to the offshore banks,
investigators said.

Some of the money invested offshore went back to Banco Santos.
Ferreira spent between $30 million and $40 million buying art.

Ferreira's lawyer has denied that the two offshore banks, now in
liquidation, were owned by Ferreira or his relatives.

"These companies were not opened by him (Edemar) nor by members
of his family," the lawyer, Sergio Bermudes, said.


CESP: Government to Conclude $427M Capital Increase by July `06
---------------------------------------------------------------
The state of Sao Paulo wants to complete a BRL1-billion
(US$427mn) capital increase at its power generation company CESP
by July 2006, reports Business News Americas. The capital
increase is equivalent to expected proceeds from the sale of
control of its power transmission company CTEEP.

The state has already pledged a full subscription of the capital
increase, prompting an agreement from Brazil's national
development bank BNDES to extend the grace period and maturity
for CESP to pay down a BRL1.2 billion loan it obtained from the
bank.

CESP is burdened by a BRL10 billion debt for which it does not
have enough revenue to pay short-term obligations.

The Company is Brazil's and Latin America's third-largest
electricity generator, with 7,456 MW of installed capacity. The
company operates six hydroelectric power plants and is
responsible for 57% of the total energy produced in the state of
Sao Paulo, which generates 40% of Brazil's GDP. CESP is a state-
owned company, whose primary shareholder is the state government
of Sao Paulo, with 53% of total capital and 74% of the voting
common shares.

CONTACT:  Companhia Energetica De Sao Paulo (CESP)
          Rua da ConsolaO o, 1.875
          CEP 01301 -100 S o Paulo, Brazil
          Phone: +55-11-234-6322
          Fax: +55-11-287-0871
          Home Page: http://www.CESP.com.br/
          Contact:
          Mauro G. Jardim Arce, Chairman
          Ruy M. Altenfelder Silva, Vice Chairman
          Vicente Kazuhiro Okazaki, Finance Director


GLOBOPAR: Announces Completion of Debt Restructuring
----------------------------------------------------
Globo Comunicacoes e Participacoes S.A. (Globopar) announced
Wednesday the successful completion of the restructuring of
approximately US$1.3 billion of its debt. Converted bonds will
be issued, and cash will be paid pursuant to the previously
announced Dutch Auction and Mandatory Purchase, in each case as
soon as practicable. The restructuring is to result in the
issuance of the following series of bonds in the following
approximate principal amounts:

- Series A1: US$41,053,000
- Series A2: R$42,849,000
- Series B: US$547,450,000
- Series C: US$542,866,074
- Series D: R$370,617,432

Immediately following the issuance of the converted bonds, a
payment of cash proceeds from the sale of an interest in Net
Servicos de Comunicacao S.A. to Telmex is to be made on the
converted bonds and an amortization payment is to be made on the
Series A1 and Series A2 Notes. After giving effect to such
payments, outstanding principal amounts with respect to each
series will be as follows:

- Series A1: US$36,163,217
- Series A2: R$38,628,813
- Series B: US$495,930,014
- Series C: US$493,822,161
- Series D: R$370,617,432

In addition to various cash payments on the converted notes,
US$110,000,000 will be deposited into a debt service reserve
account to be accessed and applied in accordance with the
Consolidated Trust Deed governing the converted notes.

Roberto Irineu Marinho, President of the Organizacoes Globo,
said: "We could not be more pleased with today's successful
conclusion of our debt restructuring. Our team and the
creditors' committees have worked hard over a long period. The
result is restructured debt on terms attractive to the market
that provides our group with a sound and stable capital
structure."

The financial advisors to Globopar were Houlihan Lokey Howard &
Zukin Capital and Goldman Sachs & Co. Debevoise & Plimpton LLP
and Barbosa, Mussnich and Aragao served as legal advisors to
Globopar.

CONTACT: Globo Comunicacoes e Participacoes S.A. - Globopar
         Stefan Alexander or Marta Meirelles
         Phone: 55 21 2540 4444
         E-mail: IR@Globopar.com.br

         International Media Contact
         Robert Mead
         Gavin Anderson & Company
         Phone: 1 212 515 1960
         E-mail: rmead@gavinanderson.com

         Brazilian Media Contact
         Jo Ristow
         Companhia de Noticias
         Phone: 55 11 36432713
         E-mail: jo@cdn.com.br]


UNIBANCO: Board OKs Capital Stock Payment to Shareholders
---------------------------------------------------------
The Board of Directors of Unibanco -  Uniao De Bancos
Brasileiros S.A. (Unibanco) and of Unibanco Holdings S.A.
(Unibanco Holdings) approved, as proposed by their respective
Boards of Officers on July 5, 2005, the payment of interest on
capital stock only to the shareholders of Unibanco Holdings. The
payment shall be considered part of the mandatory dividend
corresponding to the 2004 fiscal year.

The payment, only to the shareholders of Unibanco Holdings, of
interest on capital stock, qualified as complementary to the
interest on capital paid related to the profit ascertained in
the 2004 fiscal year, in the gross amount of R$2.8 million and
total net amount of R$2.4 million, to be made on July 29, 2005.

This payment shall be considered as part of the mandatory
dividend corresponding to the fiscal year of 2004, in accordance
with the provisions of article 9th of Federal Law 9,249/95 and
Article 35, sole paragraph, of the By-laws of Unibanco Holdings.

Pursuant to the approved proposal, the shareholders of Unibanco
Holdings shall have the right to receive the interest on capital
stock in accordance with the gross and net amounts set forth in
the table below. Such values correspond to one (1) share, one
(1) Share Deposit Certificate ("Unit")*, or one (1) Global
Depositary Share ("GDS")**, as the case may be. An income tax
rate of fifteen percent (15%) will be withheld from such gross
amounts, resulting in the net values set forth below:

In R$    HOL-ON       HOL-PN       UNIT        GDS
         UBHD3        UBHD6        UBBR11      NYSE-UBB
Gross
Value    0.0033367    0.0033367    0.0033367   0.0166835
Net
Value    0.0028361    0.0028361    0.0028361   0.0141805

(*) Each UNIT represents one preferred share of Unibanco and one
preferred share of Unibanco Holdings.
(**)Each GDS listed on the New York Stock Exchange (NYSE: UBB)
is equivalent to 5 Units.

The payment of Quarterly Interests, related to the second
quarter of 2005, in the gross total amounts of R$56.7 million
and R$28.0 million, and net total amount of R$48.2 million and
R$23.8 million, respectively to Unibanco and Unibanco Holdings,
to be made on July 29, 2005.

This payment shall be considered as part of the mandatory
dividend corresponding to the fiscal year of 2005, in accordance
with the provisions of article 9th of Federal Law 9,249/95,
Article 44, paragraph 8th of the By-laws of Unibanco and Article
35, sole paragraph, of the By-laws of Unibanco Holdings.

As per the proposals approved by the respective Boards of
Directors, the shareholders of Unibanco and Unibanco Holdings
shall have the right to receive interest on capital stock in
accordance with the gross and net amounts set forth in the table
below. Such values correspond to one (1) share, one (1) Unit, or
one (1) GDS, as the case may be. An income tax rate of fifteen
percent (15%) will be withheld from such gross amounts,
resulting in the net values set forth below:

In R$ UBB-ON    UBB-PN    HOL-ON    HOL-PN    UNIT      GDS
      UBBR3     UBBR4     UBHD3     UBHD6     UBBR11    NYSE-UBB
Gross
Value 0.0388235 0.0427059 0.0337633 0.0337633 0.0764692
0.3823460

Net
Value 0.0330000 0.0363000 0.0286988 0.0286988 0.0649988
0.3249940

The payment of interest on capital stock, qualified as
complementary to the interest on capital paid related to the
profit ascertained in the first semester of 2005, in the total
gross amount of R$219.1 million and R$104.2 million, and total
net amount of R$186.2 and R$88.5 million, respectively to
Unibanco and Unibanco Holdings, to be made on July 29, 2005.

This payment shall be considered as part of the mandatory
dividend corresponding to the fiscal year of 2005, in accordance
with the provisions of article 9th of Federal Law 9,249/95,
Article 44, paragraph 8th, of the By-laws of Unibanco and
Article 35, sole paragraph, of the By-laws of Unibanco Holdings.

Pursuant to the proposals approved by the respective Boards of
Directors, the shareholders of Unibanco and Unibanco Holdings
shall have the right to receive the interest on capital stock in
accordance with the gross and net amounts set forth in the table
below. Such values correspond to one (1) share, one (1) Unit, or
one (1) GDS, as the case may be. An income tax rate of fifteen
percent (15%) will be withheld from such gross amounts,
resulting in the net values set forth below:

In R$ UBB-ON    UBB-PN    HOL-ON    HOL-PN    UNIT      GDS
      UBBR3     UBBR4     UBHD3     UBHD6     UBBR11    NYSE-UBB
Gross
Value 0.1499554 0.1649509 0.1254328 0.1254328 0.2903837
1.4519185

Net
Value 0.1274620 0.1402082 0.1066178 0.1066178 0.2468260
1.2341300

Considering the payments described in items (I), (II) and (III)
above, the total amount to be paid in interests on capital stock
on July 29, 2005 is the gross amounts of R$275.8 million and
R$135.0 million, and the net amounts of R$234.4 million and
R$114.7million, respectively to Unibanco and Unibanco Holdings.
Such values correspond to: (I) complementary interest on capital
paid related to the profit ascertained in the 2004 fiscal year
of Unibanco Holding; (II) quarterly interest of Unibanco and
Unibanco Holding related to the second quarter of 2005; and
(III) complementary interest on capital paid related to the
profit ascertained in the first semester of 2005 of Unibanco and
Unibanco Holdings.

CONTACT: Unibanco - Uniao de Bancos Brasileiros S.A.
         Investor Relations Area
         Ave. Eus,bio Matoso, 891 - 15th floor - Sao Paulo, SP
         05423-901- Brazil
         Tel.: (55 11) 3097-1980
         Fax: (55 11) 3097-6182
         E-mail: investor.relations@unibanco.com
         URL: http://www.ir.unibanco.com


UNIBANCO: Approves Fixed Rate Securities Issuance
-------------------------------------------------
The Board of Directors of Uniao de Bancos Brasileiros S.A. has
approved in a July 19 meeting the issuance, through its Grand
Cayman branch, of fixed rate Perpetual Non - Cumulative Junior
Subordinated Securities (Securities), in the principal amount
between two hundred million dollars (US$200,000,000.00) and
three hundred million dollars (US$300,000,000.00).

SUMMARY MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF
UNIBANCO - UNIAO DE BANCOS BRASILEIROS S.A., HELD ON JULY 19,
2005.

VENUE AND TIME: Av. Eusebio Matoso, n. 891, 4 Floor, in the city
of Sao Paulo, State of Sao Paulo, at 10:30 a.m.

CHAIRMAN: Gabriel Jorge Ferreira

QUORUM: More than a half of the elected members.

PROVISIONS UNANIMOUSLY APPROVED:

1. The Company has approved the issuance, through its Grand
Cayman branch, of fixed rate Perpetual Non - Cumulative Junior
Subordinated Securities (Securities), in the principal amount
between two hundred million dollars (US$200,000,000.00) and
three hundred million dollars (US$300,000,000.00), in accordance
with other conditions set forth in the Offering Memorandum.

The Securities shall be classified as a Tier 2 capital,
according to the Resolution n. 2837/01 of the Brazilian Monetary
Council and shall rank pari passu among themselves and in
priority to Company's preferred and common shares (as defined by
Brazilian corporate legislation). The Company intends to require
the Brazilian Central Bank's approval in order to qualify the
Securities as Tier 1 capital. Hence the Tier 1 capital
Securities shall become subordinated to all of the Company's
subordinated debt and shall rank pari passu with the Company's
preferred shares. The proceeds from the sale of the Securities
will be used solely by and in favor of the Company and of its
shareholders.

2. In view of the above mentioned decision, any two Officers of
the Company are hereby authorized, as per the Company's By-Laws,
to practice any and all acts which shall be deemed convenient,
useful or necessary for the effectiveness of the above mentioned
issuance of Securities, including, but not limited to, the
execution of any and all documents, warnings, statements,
letters, instruments and agreements in connection with the
issuance and sale of the Securities.

3. The Board of Executive Officers is duly and lawfully
authorized to analyze the feasibility of structuring Company's
shares buy back programs. Furthermore, any eventual Board of
Executive Officers' analysis and proposals of implementing
shares buy back programs must be submitted to the analysis of
the Company's Board of Directors, it being understood that any
such proposal of buy back shares programs must be strictly in
conformity with Brazilian laws and applicable regulations.

Sao Paulo, July 19, 2005. (authorized signatures) Arminio Fraga
Neto, Gabriel Jorge Ferreira, Joaquim Francisco de Castro Neto e
Israel Vainboim. These minutes are a revised copy of the minutes
registered in the Company's appropriated book.

CONTACT: Unibanco - Uniao de Bancos Brasileiros S.A.
         Investor Relations Area
         Ave. Eus,bio Matoso, 891 - 15th floor - Sao Paulo, SP
         05423-901- Brazil
         Tel.: (55 11) 3097-1980
         Fax: (55 11) 3097-6182
         E-mail: investor.relations@unibanco.com
         URL: http://www.ir.unibanco.com


UNIBANCO: Moody's Assigns Ba2 Rating to Cayman Unit's Securities
----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Unibanco --
Uniao de Bancos Brasileiros S.A.- Grand Cayman Branch's US$250
million perpetual non-cumulative junior-subordinated securities.
The Ba2 rating is the result of joint probabilities of default
that are incorporated into Bradesco's credit risk rating, which
is indicated by its A3 global local currency rating, and by
Brazil's B1 foreign currency ceiling for bonds and notes. The
outlook on the rating is positive.

Moody's noted that the subordination was taken into
consideration in the assignment of the bond rating. However, at
high rating levels on the global local currency scale, the
notching that would usually be applied to subordinated issues
does not affect the final rating outcome.

Unibanco is the third largest privately-owned bank in Brazil,
with assets of approximately US$31 billion as of March 2005. The
bank's established presence in the wholesale and retail banking
markets is complemented by a strong position in the consumer
finance segment, as well as by a growing participation in
insurance and credit card businesses. Unibanco's efforts to both
develop alternative distribution channels and to capture
additional clientele have yielded increasing client penetration
and cross-selling, which translate into improving core earnings.

Unibanco -- Uniao de Bancos Brasileiros S.A. is headquartered in
Sao Paulo, Brazil, and it had total assets of approximately
US$31 billion as of March 2005.

The following rating was assigned:

Unibanco Grand Cayman Branch's US$250 million perpetual non-
cumulative junior- subordinated securities -- Ba2 long-term
foreign currency subordinated bond rating, positive outlook


* BRAZIL: To Make Early Repayment on IMF Obligations
----------------------------------------------------
On July 13, 2005, the Brazilian authorities announced their
intention to repay early the outstanding Supplemental Reserve
Facility (SRF) obligations to the International Monetary Fund
(IMF) amounting to SDR 3.42 billion (about US$5 billion). The
outstanding SRF obligations of Brazil had all been contracted
under the Stand-By Arrangement that was approved by the
Executive Board on September 6, 2002 and extended on December
12, 2003.

Mr. Rodrigo de Rato, the Managing Director of the IMF, welcomed
this announcement and commended the Brazilian authorities for
their economic achievements over the last few years. He noted
that "Brazil's ability to repay the SRF obligations ahead of
schedule reflects the strong macroeconomic and institutional
framework in place and a balance of payments position that is
much stronger than previously anticipated, in large part
reflecting an impressive export performance. Sound economic
policies and reforms have significantly lessened economic
vulnerabilities and bolstered confidence in the economy."

Total drawings under the recently completed Stand-By Arrangement
were equivalent to SDR 17.20 billion (about US$25.08 billion),
out of a total of SDR 27.38 billion (about US$39.92 billion)
that were made available. SDR 7.61 billion (about US$11.10
billion) of the drawings were under the SRF, of which SDR 4.19
billion (about US$6.11 billion) have already been repaid. Under
the original schedule, the final repayment of outstanding SRF
obligations would have taken place in March 2006. Following the
early repayment of SRF obligations, Brazil's outstanding loans
from the IMF will be SDR 10.79 billion (about US$15.73 billion).

CONTACT:  International Monetary Fund
          700 19th Street, NW
          Washington, D.C. 20431 USA

          IMF EXTERNAL RELATIONS DEPARTMENT
          Public Affairs: 202-623-7300 - Fax: 202-623-6278
          Media Relations: 202-623-7100 - Fax: 202-623-6772



===============
C O L O M B I A
===============

GRANAHORRAR: Staff Gets First Priority to Participate in Sale
-------------------------------------------------------------
The employees and cooperatives at Granahorrar will have the
first option to participate in the upcoming privatization of the
state-run mortgage lender, reports Business News Americas
reports.

An official at the country's deposit insurance fund Fogafin
revealed these groups will have 60 days starting next week to
participate in the sale of Granahorrar shares. After which, a
new process will be opened to private companies and investors.

Fogafin private investment relations officer Adriana Silva
disclosed recently that both international and local firms have
shown interest in Granahorrar, which the government intervened
during the financial crisis in the late 1990s to avoid a
collapse.

Fogafin director Juan Ortega expects the sale of Granahorrar to
bring in as much as COP438 billion pesos (US$189mn). The entity
has some COP130 billion in equity.



===================
C O S T A   R I C A
===================

ICE: Comptroller General Doubtful of Financial Future
-----------------------------------------------------
State telecoms and electricity monopoly ICE received a warning
from the comptroller general that its financial situation is
becoming unstable, particularly its electricity department,
reveals Business News Americas.

The comptroller said ICE's liquidity and profitability dropped
between 2001 and 2004 and the Company's electricity division's
short-term debts now exceed its assets and revenues.

Purchases by ICE telecom in 2002 were three times higher than
2001, reaching CRC210 billion (US$437mn) compared to CRC67.8
billion in 2001. ICE electric's purchases rose five times to
CRC63 billion in 2002 compared to CRC10.1 billion a year
earlier.

The comptroller has ordered ICE to study which areas of the
Company are dragging down its finances. The authority also asked
ICE to take measures to prevent risks and problems related to
liquidity and debt.

In June, a government committee approved a motion giving ICE
autonomy to increase its debt by up to US$100 million a year.
Until the approval, ICE had to request permission from the
central bank and the finance ministry to take out debt of any
amount.



===================================
D O M I N I C A N   R E P U B L I C
===================================

* DOMINICAN REPUBLIC: Weak External Indicators Constrain Ratings
----------------------------------------------------------------
MAJOR RATING FACTORS

STRENGTHS:
    * A moderate stock of debt.

WEAKNESSES:
    * Weak external indicators.
    * Weak institutions.
    * Diminished fiscal flexibility.

RATIONALE

The ratings (B/Stable/B) on the Dominican Republic are
constrained by a number of factors, including weak external
indicators and government institutions along with diminished
fiscal flexibility. However, its general government debt to GDP,
at under 50% for 2005, is much lower than the 'B' median's 74%
and tends to support the country's creditworthiness. As noted,
the country has weak external indicators. External liquidity as
measured by its gross financing gap (current account position,
plus errors and omissions, plus short-term external debt, plus
long-term external amortization) to liquid international
reserves is over 200%, indicating continued liquidity
constraints despite a significant current account adjustment and
a rise in international reserves. Furthermore, the Dominican
Republic historically has had weak institutions and poor
economic policy implementation.

Additionally, there is diminished fiscal flexibility due to a
higher interest burden. As a result of increased debt levels and
the sharp depreciation of the Dominican peso, the government's
interest burden as measured by interest expenditure to revenue
is expected to surpass 20% in 2005, up from just 7% in 2002.
However, as noted the Dominican Republic has a moderate stock of
general government debt, although general government debt to GDP
will only reach 50% in 2005, well below the 'B' median's 69%.
Furthermore, much of this debt is composed of lower-cost
multilateral and bilateral loans.

OUTLOOK

The stable outlook balances improved economic prospects and
moderate government debt levels with weak institutions and the
large quasi-fiscal deficits of the central bank that constrain
monetary policy. Further improvements in governance, along with
sustained economic growth and further fiscal measures to contain
the fiscal deficits and tackle the quasi-fiscal deficits of the
central bank, could lead to improved creditworthiness. On the
other hand, further political problems or policy reversals could
lead to negative rating actions.

Primary Credit Analyst: Richard Francis, New York (1) 212-438-
7348; richard_francis@standardandpoors.com



=====================
E L   S A L V A D O R
=====================

CAESS: S&P Releases Credit Analysis on Company, Affiliates
----------------------------------------------------------
Corporate Credit Rating: BB+/Stable/--

Debt maturities:
- 2004: $14.7 million
- 2005: $17.8 million
- 2006: $22.4 million
- 2007: $25.6 million
- 2009 and thereafter: $102.9 million
Total: $183.4 million

OUTSTANDING RATING(S:)

AES Corp. (The)
- Corporate Credit Rating B+/Positive/--
- Sr unsecd debt B-
- Sr secd debt
- Local currency BB
- Sub debt
- Local currency B-
- Pfd stk
- Local currency CCC+

AES China Generating Co. Ltd.
- Corporate Credit Rating B+/Stable/--
- Sr unsecd debt
- Foreign currency B+

AES Gener S.A.
- Corporate Credit Rating BB+/Stable/--
- Sr unsecd debt
- Foreign currency BB+
- Sr secd debt
- Foreign currency BB+

AES Sul Distribuidora Gaucha de Energia S.A.
C.A. La Electricidad De Caracas
- Corporate Credit Rating
- Foreign currency B/Stable/--
- Sr unsecd debt
- Foreign currency B

Distribuidora Electrica de Usulutan, S.A. de C.V.
- Corporate Credit Rating BB+/Stable/--

Empresa Electrica de Oriente, S.A. de C.V.
- Corporate Credit Rating BB+/Stable/--

IPALCO Enterprises Inc.
- Corporate Credit Rating BB+/Positive/NR
- Sr unsecd debt
- Local currency BB-

Chivor S.A. E.S.P.
- Corporate Credit Rating B/Positive/--
- Sr secd debt
- Foreign currency B

Indianapolis Power & Light Co.
Corporate Credit Rating BB+/Positive/NR
- Sr unsecd debt
- Local currency BB-
- Sr secd debt
- Local currency BBB-
- Pfd stk
- Local currency B+

BUSINESS SUMMARY

- Compania de Alumbrado Electrico de San Salvador S.A. de C.V.
(CAESS): BB+/Stable/--
- Empresa Electrica de Oriente S.A. de C.V. (EEO): BB+/Stable/--
- Distribuidora Electrica de Usulutan S.A. de C.V. (DEUSEM):
BB+/Stable/--
- US$120 million CAESS-EEO-DEUSEM fixed-rate notes due 2011: AAA
- Bond insurance provider: MBIA Insurance Corp.
- Co-issuer: Distribuidora Electrica de Usulut n S.A. de C.V.
and Empresa Electrica de Oriente S.A. de C.V.

OVERVIEW

CAESS and EEO distribute electricity to about 70% of El
Salvador's 6.9 million people and served approximately 729,685
customers as of the first quarter of 2005. Both companies are
subsidiaries of El Salvador Energy Holding Ltd. (ESEH), and the
ultimate holding company is AES Corp.

CAESS is the largest distribution company in El Salvador and is
located in the central portion of the country. Its service
territory includes the capital city, San Salvador. As of the
first quarter of 2005, CAESS had more than 481,340 customers.
EEO is smaller than CAESS and is located in the eastern region
of the country. It had 195,814 customers as of March 2005. EEO's
service territory includes El Salvador's third-largest city, San
Miguel. DEUSEM is located in the southeastern region of El
Salvador. It had 52,531 customers as of March 2005.

CORPORATE STRUCTURE

The corporate structure is adequate for the rating level and
sufficiently insulates note holders from a potential bankruptcy
at AES. El Salvador Energy Holdings is the holding company
through which AES owns the three operating companies. AES has a
diversified asset base, with 112 plants and 17 distribution
systems in operation or construction throughout the world. AES
is also diversified in terms of fuel type, with generating
assets consisting of about 16% hydro, 41% coal, 39% natural gas,
and 4% oil.

BUSINESS PROFILE

El Salvador (BB+/Stable/B) is the smallest but the most densely
populated Central American country, with an estimated population
of 6.9 million as of 2004. GDP growth remains at about 2.4% per
year. In early 2001, El Salvador began to implement full
dollarization, in which US$1 equals 8.75 El Salvadoran colones
(SC). The country's policymakers' prime objectives were to lower
nominal interest rates and eliminate exchange-rate risk. As a
result, El Salvador essentially has no monetary policy.
Inflation, therefore, likely will follow U.S. patterns.

REGULATION

Regulatory risk for the companies is moderate. CAESS, EEO, and
DEUSEM are regulated by an independent state regulatory agency
called Superintendencia General de Electricidad y
Telecomunicaciones (SIGET). SIGET is an autonomous organization
headed by a director, who serves a seven-year term and is
appointed by the president. In addition, SIGET is staffed with
two other directors, one appointed by El Salvador's supreme
court and the other appointed by the country's private sector.

The country's electricity law governs the generation,
transmission, and distribution of electricity. This law provides
the basis for private-sector participation and competition in
the energy sector, allowing the unbundling of generation,
transmission, and distribution.

The law requires transmission companies to expand the existing
network based on the studies of the country's wholesale
electricity market administrator, Unidad de Transacciones (UT),
approved by SIGET. UT is a company owned by transmission
companies, generators, and distributors. The UT calculates the
energy and payment balances of each participant in the market.
It also operates the spot market to maintain a balance between
supply and demand. The UT, however, is not able to buy and sell
energy for its own account. The wholesale market consists of a
bilateral market based on predetermined contracts on the Mercado
Regulador del Sistema (the spot market).

TARIFF DESIGN

The tariff contains three components:

    * Energy charge. This is based on the average spot market
price of energy and is adjusted twice a year. The energy charge
is the product of the energy price by kilowatt-hour (kWh)
consumed. CAESS and EEO have mitigated the risk of fluctuations
in the spot prices by entering into contracts for the purchase
of energy at discounted prices.
    * Commercialization charge. SIGET examines this charge every
five years. If the CPI is greater than 3%, then the company can
adjust the charge. It includes costs relating to billing
notifications and everything related to the commercialization
service.
    * Distribution charge (core business). SIGET adjusts this
charge every five years and annually based on inflation (the
next adjustment will take place in 2008). SIGET determines the
adjustment using the following parameters: average cost of
investment, operations and maintenance in an efficiently sized
and operated network, taking into consideration "customary
international efficiency standards" as well as local costs. The
average cost of investment will be the cost of a new replacement
network, taking into consideration the useful life of the assets
and using a real rate of return of 10% (before tax) and includes
cost of operating the UT.

Tariff formulation allows for the distribution companies to
effectively pass through energy charges to end-users. Of the
total billing, 73% came from energy charges, 5% from
commercialization, and 22% from distribution as of the first
quarter of 2005. Standard & Poor's Ratings Services considers
the risk in the energy component of the tariff to be minimal and
limited to timing differences.

The last significant regulatory change was in May 2003, when
local regulator (SIGET) modified the tariff formula, restricting
the companies to revising tariffs on a semi-annual basis instead
of a monthly basis, which did not have a significant impact on
the companies. The next scheduled regulatory review of tariffs
is not due until 2008. However, the tariff formula remains
untested in a stress scenario, such as fluctuations in costs for
the generators or heightened macroeconomic risk.

MARKETS

Energy demand in the Salvadoran electricity sector grew by 7% in
2004, which is well above GDP growth of 2.4%. It is expected to
increase 5% in 2005. This percentage compares well with the 6%
of the compound annual electricity demand growth rate from 1998
to 2004.

The total installed generating capacity as of mid 2004 was 1,095
MW, which came mostly from private companies. Thermal sources
accounted for 39%; hydropower, 30%; and geothermal, 21%. The
remaining 10% was supplied by imports from Guatemala and, since
June 2004, Panama. As of December 2004, though, thermal plants
were the principal source of generation, and hydro has been
increasing in the last couple of years.

The government has been developing new projects: a 67 MW El
Chaparral hydroelectric project in the San Miguel's region and
Juay£a, a thermal plant. These two projects will increase El
Salvador's installed capacity, and the companies could benefit
from lower prices.

Another project still in place is the Central American
countries' agreement to integrate their electricity grids,
creating a regional wholesale electricity market. The first
stage of the project is constructing the Sistema de
Interconexi˘n Electrica de los Paises America Central (SIEPAC),
a 1,144-mile transmission line interconnecting Panama, Costa
Rica, Honduras, Nicaragua, El Salvador, and Guatemala. The
SIEPAC system is expected to be operational in 2006. Standard &
Poor's expects that CAESS and EEO will benefit from this
transmission network because it will open new possibilities to
buy energy from other countries.

OPERATIONS

As of December 2004, the companies purchased 66% of all energy
in the contract market and 34% in the spot market. According to
the UT, if AES's ownership in CLESA is included, AES
subsidiaries purchased 67% of all energy in El Salvador as of
December 2004. The market position of the AES subsidiaries gives
them cost advantages in purchasing supplies, most notably
energy.

SUBSIDIES

Subsidies for customers that consume less than 100 kWh per month
have been in effect since 1996. However, CAESS and EEO are not
directly affected by the subsidies because they have received
compensation from a government fund called FINET (National
Investment Fund for Electricity and Telecommunications) since
2002. Standard & Poor's views a future risk to the distributors
if the government becomes unstable and can no longer afford to
support the subsidies.

CAESS

CAESS has the largest number of customers of the four
distribution companies in El Salvador, and its territory
includes the most densely populated and industrialized areas of
El Salvador. CAESS owns the distribution network covering the
Central-North regions of El Salvador, including 70% of the
greater metropolitan San Salvador area. As of the first quarter
of 2005, the customer mix was 91% residential, 8.7% commercial,
and 0.3% industrial. The company derived about 36% of its
revenues from residential customers, 27% from industrial
customers, and 43% from commercial.

METERING AND COLLECTION

Bills to customers begin to accrue interest after 30 days, and
nongovernment customers can be disconnected after 60 days of
nonpayment. CAESS has a low past-due rate from its commercial
and industrial accounts because these customers are required to
post deposits or bank guarantees for two months of billings to
connect to the system. Government past-due accounts vary
according to the budget-approval process, but CAESS collects
most of the government receivable on time or with a lag of 20
days.

In emerging markets, billing tends to be the more important
component of collection because once the customers are billed,
they typically pay. In addition to the new billing and
collection system, both CAESS and EEO have added customer
service centers throughout the service territory to facilitate
payment. AES has had success in improving collections in other
emerging markets by implementing the same type of programs.

Under El Salvadoran law, customers must be compensated at 200%
of the energy component of the tariff for any interruption.
CAESS has incorporated this provision in all of its power-
purchase agreements and has effectively passed this penalty on
to the generator to the extent that the generator causes the
interruption.

DISTRIBUTION LOSSES

In the past, CAESS experienced a low level of losses that has
averaged about 7.4% for the past five years. About 80% of the
losses have been primarily associated with technical losses
relating to improper metering equipment or customers that do not
have meters. The company expects losses to remain at about 7%
over the next several years through diligent metering. Standard
& Poor's believes the company will be successful in maintaining
the actual level of losses, as it has been doing.

DEUSEM

DEUSEM was established as an electric distribution company in
the southeastern region of the county along the Pacific coast.
In this region, there is a potential increase in electricity
demand because of industrial and commercial development in the
region-La Concordia industrial park, the Cutuco Port
construction, and some hotels.

EEO

EEO is located in the eastern region of the county, which has a
population of 927,890. It serves about 195,814 customers. EEO's
territory was the hardest hit by the civil war in El Salvador.
About 77% of the population has electricity, which provides the
company an opportunity to expand the network and add new
customers. The customer mix was 93.84% residential, 6.08%
commercial, and 0.08% industrial as of the first quarter of
2005.

At the end of September 2001, Salvadoran lawmakers approved a
loan that the Japanese government offered to develop the Cutuco
Port Project. EEO expects these projects to increase the demand
for electricity in the region. The project is expected to start
operation in 2007.

One of the biggest challenges for EEO is its ability to reduce
line losses. It reduced losses to 12.60% in 2004 from 13.31% in
2003, and it plans to reduce losses to about 10% by 2005. EEO is
currently updating and replacing its network to reduce losses
through the replacement of low-voltage lines, the acquisition of
new transformers, and the installation of new meters.

COMPETITIVENESS

There is no exclusive franchise or monopoly area for
distribution companies in El Salvador, but CAESS and EEO have no
competition except in a small border area between CAESS's
territory and that of another utility called DELSUR. CAESS and
EEO provide high-quality services, have a large residential base
of customers, and have recorded low losses, all of which
mitigate the possible risk of competition.

FINANCIAL PROFILE

ACCOUNTING

The companies' financial statements have been prepared in
accordance with the International Financial Reporting Standards
(formerly the International Accounting Standards). Historically,
the functional currency was the El Salvadoran colon. Beginning
in January 2001, the exchange rate between the colon and the
dollar was fixed at SC8.75 per US$1, and the dollar became the
legal currency. In 2003, CAESS changed its books and records to
dollars, and now it is completely dollarized. It records
revenues from the sale of electricity under the full accrual
method, whereby it estimates and records unbilled electricity
sales each month. DEUSEM's financial information is consolidated
into CAESS's accounts.

CORPORATE GOVERNANCE/RISK TOLERANCE/FINANCIAL POLICIES

The financial policy of the company is moderate. The companies'
total debt reached US$183 million, consisting largely of two
long-term loans. CAESS, EEO, and DEUSEM are jointly responsible
for the payment of the loans, which are collateralized by a
negative pledge on assets at the operating companies and a
first-priority pledge on all of the stock of the operating
companies. The operating companies are not prohibited by law to
pay out in excess of 100% of earnings. Dividends paid by the
operating companies will be used to service debt at the holding
company.

In December 2001, CAESS and EEO entered into an interest rate
swap to hedge their floating interest rate exposure on the their
$120 million loan from the IFC. The interest rate swap, which
was required under the credit agreement, hedges approximately
10% of the floating-rate interest payments related to the loan.

CASH-FLOW ADEQUACY

The companies have adequate internally generated cash flow to
finance continuing operations. In addition to a six-month debt-
service reserve on both of the IFC loans, CAESS and EEO will
likely have some access to local capital through the banks. As
of March 2005, the companies had several lines of credit with
various banks under which they can borrow up to US$13 million.

CAESS and EEO reported revenues of US$265 million in December
2004, an increase of 3% compared with December 2003; revenue and
EBITDA growth are expected to remain moderate going forward.
Funds from operations interest coverage was 3.5x in 2004, which
is good compared with the last couple of years of 3.4x.

Standard & Poor's expects capital expenditures to remain
moderate at about $10 million per year, which should continue to
result in modest free cash flow. Although debt maturities are
relatively low through 2008, the companies might need to
refinance a portion of maturities to maintain current dividend
payout rates.

Standard & Poor's expects CAESS's and EEO's operating margins to
remain strong and flat over the next two years at about 12.9%.
The operating margins compare well with those of other Latin
American distribution companies.

CAPITAL STRUCTURE AND FINANCIAL FLEXIBILITY

There is no additional debt forecast, which should keep the
companies comfortably in compliance with financial covenants
(total debt/total capitalization was 54% as of December 2004 and
similar as of March 2005 compared to the 60% required by the
covenant). The debt has minimal currency exposure because El
Salvador has been using the dollar as its currency since Jan. 1,
2001. Currently, the companies receive virtually all of their
revenues in dollars. Although devaluation risk in the short-term
is therefore minimized, Standard & Poor's assumes dollarization
could be reversed in the case of a severe sovereign stress
scenario, though this is not expected.

Primary Credit Analyst: Fabiola Ortiz, Mexico City (52) 55-5081-
4449; fabiola_ortiz@standardandpoors.com

Secondary Credit Analyst: Federico Mora, Mexico City (52) 55-
5081-4436; federico_mora@standardandpoors.com



=============
J A M A I C A
=============

AIR JAMAICA: Chairman Predicts Positive Restructuring Result
------------------------------------------------------------
Air Jamaica's continuing efforts to pursue a financial and
operational restructuring will give the carrier some breathing
room "especially in the repayment of old debts which are
becoming due," according to executive chairman Dr. Vincent
Lawrence.

Air Jamaica lost over $60 million in its first five months of
operation as a full government entity to May 31 2005. As part of
an effort to reduce the losses, Lawrence cut the fleet from just
over 20 to 15, as well as staff and routes.

Lawrence expressed confidence that with the completion of major
maintenance activities, the airline was back on track and was
now intensifying its marketing and promotional activities.

Lawrence's comments follow a recent recommendation from Dr.
Marshall Hall, Chairman of the Jamaica Producers Group, to
immediately sell Air Jamaica.

Dr. Hall had said that the carrier's losses are not likely to be
repaid from future earnings and instead of further indebtedness
and continued borrowing, the government should stop the bleeding
by hugging up the losses and putting the airline for sale.

CONTACT: AIR JAMAICA
         Corporate Communications
         Tel: 876-922-3460 ext 4060-5
         URL: www.airjamaica.com



===========
M E X I C O
===========

AXTEL: Ratings Reflect Improving Financial Performance
------------------------------------------------------
MAJOR RATING FACTORS

STRENGTHS:
    * Improving financial performance;
    * Niche player with a well-thought out gradual growth plan;
    * A modern, convergent technology network; and
    * The incumbent's convenience of having healthy although
      distant competitors within local access.

WEAKNESSES:
    * Relatively small operator, with its competitor having
      significantly larger resources;
    * Growth appetite;
    * Still dependent on a technology whose long-term viability
      has yet to be proven;
    * Relatively short operating history; and
    * An evolving regulatory environment.

RATIONALE

The ratings (B/Stable/--) on Axtel S.A. de C.V. reflect business
risks related to the strong competition from Mexico's
telecommunications incumbent; a perceived growth appetite that
could take the company to commit larger debt-funded investments
than anticipated; its wireless local loop-based model, for which
longer-term viability has yet to be proven; and a short
operating history. Tempering factors include the company's
telecommunications products portfolio, its technologically
advanced network and services, a convenient capital structure
due to a debt renegotiation completed in early 2003, improving
financial performance, and experienced equity partners.

Axtel has effectively been in operation since June 1999, and it
has been EBITDA positive since 2001. The company has
continuously improved its performance thanks to a growing scale
of operation, providing telecom services in 12 Mexican cities to
490,231 active lines as of March 2005 (33% higher than a year
earlier) and cost contention measures. Axtel has built one of
the largest fixed wireless networks of its kind in the world,
and it also offers other access technologies, including point-
to-point and point-to-multipoint radio links, optic fiber, and
copper, which have allowed it to target business customers.

Although the company offers a differentiated service, this alone
is not likely to offset a number of competitive advantages that
incumbent Telefonos de Mexico S.A. de C.V. (Telmex, rated
BBB/Stable/-- in foreign currency) has, including significant
financial resources and economies of scale, negotiating power
with vendors, brand awareness, and operating experience.
However, Axtel and its flexible pricing schemes represent an
attractive viable option to those that choose not to be
customers of the incumbent. In addition, under current
regulations whereby cable-TV companies are required to have an
association with a local-service provider but for Telmex, Axtel
announced an agreement with Mexico's second largest (in terms of
customers) cable-TV company Cablem s S.A. de C.V. to jointly
offer video, voice, and data. A significant development in the
long term, it is Standard & Poor's expectation that under this
agreement, the rollout of this combined effort will be gradual
at its early stages and then could speed up on results achieved,
without committing expenditures that could compromise its
existing ratings.

For the last 12 months (LTM) period ended March 31, 2005,
Axtel's revenues were US$369 million, up 34% from a year before,
and its EBITDA amounted to $118 million, which represented a 25%
increase year-over-year. Except for its largest customer, who
represented about 17% of revenues for each of the past few
years, Axtel's customer base is fairly disseminated; although
the loss of this customer would significantly affect Axtel's
financial results, it is considered that this customer will
preserve its interest in Axtel's services for several years
more, an interest that is continuously monitored.

Axtel's EBITDA margin decreased to 32.1% for the above-mentioned
LTM period, from 34.2% the previous year, basically because of
expenses growing due to Axtel's geographic expansion. Axtel
launched services in six new cities during the second half of
2004, trying to grow and diversify its business (80% of its
active lines are based in Mexico's three largest cities). Going
forward, EBITDA and operating cash flow generation growth will
remain driven by the increase in the number of subscribers,
expansion efforts, and continued cost reduction efforts. While
the company's results have shown a clear positive trend, new
growth investments might pressure its profitability and/or cash
flow measures, challenges that are being monitored.

Balance-sheet strength is derived from Axtel's March 2003 debt
renegotiation. Before its completion, the company's total debt
was about $512 million, the bulk of it representing a liability
with its technology provider Nortel. The restructuring included
a combination of capital contributions from shareholders, debt
capitalization, repayment, and forgiveness. As of March 2005,
Axtel's debt amounted to $288 million, 2.4x its LTM EBITDA. This
ratio is expected to get closer to 2.0x over the next few years;
however, committing into larger expansion plans through debt-
funded investments might challenge this expectation, unless a
change in Axtel's capital structure takes place.

As for the company's EBITDA interest expenses coverage, it
should be close to 4.0x in the years to come, evidenced by its
4.6x relation for the full year 2004, and 4.4x for the same 12-
month period ended three months later. The company's improved
balance sheet; its reinforced strategy to enter new markets,
though now privileging its venture with Cablemas focusing on
attractive demographics (i.e., high population density and
above-national average population growth); and its policy to
remain cost efficient could gradually further improve Axtel's
credit protection measures and free cash flow. In addition,
Axtel's cross currency swaps for most of its debt notes' worth
mitigates its results volatility at least until 2008.

LIQUIDITY

With the additional US$75 million from its January 2005 notes
reopening issuance (the initial $175 million notes due 2013 were
issued in December 2003), Axtel will enjoy adequate liquidity in
the next two years, as its capex (US$137 million during 2004)
still exceeds its FFO (US$91 million), a situation that will
most likely be mirrored in 2005. Standard & Poor's Ratings
Services assumes that the company's growth will consume these
proceeds only gradually, but we monitor this situation
constantly. As of December 2004, Axtel did not have significant
debt maturities for the next several years.

OUTLOOK

The outlook is stable. The company is expected to continue to
demonstrate modest levels of cash from operations, although
enough to cover debt interests, and EBITDA margins slightly
short of the mid-30% range. The pace and funding of Axtel's
expansion plans are the main triggers for any rating action.
Preserving these measures despite Axtel's growth strategy could
trigger a positive action, while a sustained negative impact of
its growth strategy in its main debt-related ratios could result
in a negative action.

Primary Credit Analyst: Manuel Guerena, Mexico City (52) 55-
5081-4411; manuel_guerena@standardandpoors.com


BALLY TOTAL: Board Re-Affirms Support to CEO Paul Toback
--------------------------------------------------------
Bally Total Fitness Holding Corp. (NYSE: BFT) re-affirmed its
support to the Company's CEO Paul Toback, management team and
business plan. The Independent Directors of the Board of
Directors of the Company wrote to Mr. Pearlman of Liberation
Investment Group on Wednesday saying:

We are in receipt of your letter. We met yesterday as a Board to
consider your requests and our response.

We are writing to express to you and our shareholders the
Board's unanimous and unqualified support for our CEO Paul
Toback and the efforts of Bally's management team. We are
pleased that under Mr. Toback's leadership the Company has made
significant progress with its turnaround plan, particularly the
significant growth in new memberships and improved free cash
flow. Paul has adeptly stabilized the Company and navigated
through multiple government investigations and restatements,
while at the same time instituting a new turnaround plan that is
beginning to produce results. We consider your request that we
initiate a search for a new CEO not to be in the best interests
of shareholders, as it represents further diversion to
completing Mr. Toback's very important turnaround efforts.

We have every confidence that Mr. Toback and his team are on the
right track and have the right plan to restore Bally to
financial success. Any efforts to destabilize the Company,
particularly during a critical debt consent solicitation
process, are damaging to our ability to return Bally to
profitability. Given your past involvement with the Company as a
financial advisor to former Bally CEO Lee Hillman during the
years that we are now in the process of restating, we are
surprised by your lack of understanding of the time and
resources required to remedy the accounting so we can resume
normal reporting.

We have also considered and unanimously decline your request to
be appointed to the Board.

During your role as an advisor to the Company, Bally paid you
millions in fees and the stock price, during 2002 alone, fell
from a high in the mid 20s to a low of 6. You had years of
opportunity to contribute to making Bally a successful company.
Instead, you and your colleagues rewarded Bally shareholders
with unprecedented levels of new debt and expensive
acquisitions, without an operating plan or a capital market plan
to increase shareholder value. Our shareholders have already
experienced your approach to creating value, and we think your
historical actions -- and the millions of dollars your ideas
have cost the Company and shareholders to date -- speak for
themselves.

CONTACT: Bally Total Fitness
         Matt Messinger
         Phone: 773-864-6850
         URL: www.ballyfitness.com
                    or
         MWW Group
         Public Relations
         Carreen Winters
         Phone: 201-507-9500


BANCO INTERACCIONES: Moody's Assigns Initial Ratings
----------------------------------------------------
Moody's Investors Service assigned a bank financial strength
rating (BFSR) of E+ to Banco Interacciones, S.A.
(Interacciones). At the same time, Moody's assigned to the
entity long- and short-term global local- and foreign-currency
deposit ratings of Ba3 / Not Prime. The bank was given long- and
short-term Mexican National Scale deposit ratings of A3.mx and
MX-2, respectively. The outlook on all ratings is stable,
according to the rating agency.

Moody's said that Interacciones' E+ BFSR reflects the bank's
modest financial fundamentals. Although profitability is
recovering and the bank shows a mild turnaround from past
losses, it has yet to demonstrate its ability to maintain
consistent profits over time.

Moody's points out that the rating is also constrained by the
limited scope of its franchise, which makes the bank more
vulnerable to the intense competition exerted by the dominant
players in Mexico.

The BFSR incorporates Interacciones' specialization as an active
lender to public entities, with a substantial portion of its
loans going to states and municipalities. Concentration risk is
high, but these exposures have relatively low credit risks.

Moody's believes that management may be challenged to sustain
profits and to strengthen the bank's funding mix, which is
largely wholesale of a short-term and expensive nature. The
much-needed optimization of the cost structure would also
bolster financial strength.

The Ba3 / Not Prime for deposits and the Mexican National Scale
ratings of A3.mx / MX-2 incorporate the likelihood that
Interacciones' shareholders would contribute support --as
demonstrated in the past -- and would inject additional capital
into the bank.

Moody's noted that the stable outlook on Interacciones' ratings
reflects the bank's ability to maintain its current financial
metrics over the medium term. The stable outlook also considers
that the bank would succeed in preventing any significant
deterioration in asset quality and in generating consistent
profitability over time

The following ratings were assigned:

Outlook Stable

Bank Financial Strength Rating: E+

Global Local Currency Deposits: Ba3 / Not Prime

Foreign Currency Deposits: Ba3 / Not Prime

Mexican National Scale A3.mx / MX-2


CINTRA: Renews Agreements With Sabre Travel Network
---------------------------------------------------
Cintra S.A. de C.V., Holding Company for the leading airlines in
Mexico, Aeromexico and Mexicana, renewed on July 12, 2005
collaboration agreements with Sabre Travel Network, worldwide
leader in Global Distribution Systems and Travel Technology.

This agreement will allow Cintra's Airlines to continue to
benefit from Sabre's technology and commercial resources to
promote and distribute content to travel agencies and end
consumers during this transcendent period in the development of
the Travel Industry in Mexico.

Also, with the renewal of these agreements the Joint Venture
between Cintra and Sabre in Mexico, Sabre Sociedad Tecnologica,
is strengthened and Travel Agencies and Corporations who use
Sabre's technology and products will receive great benefits.

It is important to point out that as a result from the
negotiations between Cintra and Sabre, the basis are completed
in order to capitalize on commercial opportunities and
strategies from the sell-off process of Cintra's companies. In
particular, the increased opportunities to optimize distribution
channels for the airlines, including travel agencies and
corporate travel in Mexico where Sabre is the leading GDS and
undisputed Market Leader.

With these, Cintra reinforces its commitment to stay on the
cutting edge and work with the best technology to provide all of
the users and customers for its companies with the best
technology and service in Mexico.

Cintra is the Holding company for Grupo Aeromexico and Grupo
Mexicana de Aviacion, companies that provide air transportation
services for passengers and cargo in and out of Mexico. Cintra
has 99.5% of Aeromexico's shares through Grupo Aeromexico and
99.9% of the shares of Mexicana de Aviacion through Grupo
Mexicana. Approximately 87% of Cintra's income comes from the
operation of these two airlines that are the market leaders in
Mexico.

Grupo Aeromexico includes Aeromexico and Aerolitoral.  Grupo
Mexicana includes Mexicana de Aviacion and Click. Both Groups
are also partners in Alas de America, Aeromexpress, Servicios de
Apoyo en Tierra (SEAT) and Aerosys (Sabre Sociedad Tecnologica).
Also, Cintra has an ownership stake in Truboreactores (ITR).

Sabre Travel Network, a Sabre Holdings company, provides access
to the world's leading global distribution system (GDS) enabling
agents at more than 53,000 agency locations worldwide to be
travel experts.  The Sabre GDS, the first system to connect the
buyers and sellers of travel (developed in 1960), today includes
more than 400 airlines, approximately 60,000 hotels, 37 car
rental companies, nine cruise lines, 35 railroads and 220 tour
operators.  Key brands of Sabre Travel Network include GetThere,
the leading Web-based corporate travel reservation technology,
and Jurni Network, the unique leisure travel agency consortium
that enables members to sell more products from preferred travel
suppliers using sophisticated market intelligence.

Sabre Holdings Corporation (NYSE: TSG) is a world leader in
travel commerce, retailing travel products and providing
distribution and technology solutions for the travel industry.

CONTACT: Cintra S.A. de C.V.
         Av Xola 535 piso 16 col. del Valle Mexico
         Phone: (5)448 - 8000
         E-mail: infocintra@cintra.com.mx
         Web site: http://www.cintra.com.mx


EMPRESAS ICA: To Carry Out APM Project With Austrian Partner
------------------------------------------------------------
Mexican construction firm Empresas ICA, S.A. de C.V. and its
Austrian partner Doppelmayr (DCC) were awarded by Mexican
federal airport operator a contract to carry out the Automated
People Mover (APM) project in Mexico City's international
airport (AICM).

Business News Americas reports that the partners were the only
group making a firm bid for the APM project in July 11. The
companies will sign the agreement for the project July 26.

The contract is to build a transport system to carry people
between terminals 1 and 2 of the AICM. The project will cost
MXN677 million (US$63.7 million).

CONTACT: Empresas ICA Sociedad Controladora S.A. de C.V.
         Col. Escandon Del Migual Hidalgo
         Mexico City, 11800
         Mexico
         Phone: 525-272-9991
         URL: http://www.ica.com.mx


GRUPO ELEKTRA: Analysts Expect 86% 2Q Net Profit Increase
---------------------------------------------------------
Analysts expect Mexican retailer Grupo Elektra to post an 86%
increase in its second-quarter net profit as revenue in its
credit business helped offset sluggish sales at electronics
stores, reports Reuters. Five analysts surveyed by Reuters this
week forecast, on average, that Elektra would post net profit of
MXN641 million (US$59 million), up from MXN344 million in the
same quarter of 2004, though estimates varied widely.

"We expect the credit business to be the main driver again while
the retail business could show a slight recovery in the negative
(same-store sales) momentum," Deutsche-Ixe brokerage said.

Elektra's Banco Azteca banking unit has grown rapidly since its
launch in 2002. This year Elektra opened bank operations in
Panama, the first step in a strategy to stretch its financial
arm into Central America and as far south as Peru. Costs of
expansion have cut into profits in recent quarters, though they
are coming under more control analysts said.

Grupo Elektra is Latin America's leading specialty retailer,
consumer finance and banking services company.

CONTACT: Grupo Elektra S.A. de C.V.
         Esteban Galindez, CFA
         Director of Finance and I.R.
         Phone: 52 (55) 1720-7819
         Fax: 52 (55) 1720-7822
         E-mail: egalindez@elektra.com.mx


GRUPO POSADAS: Rating Reflects High Financial Leverage
------------------------------------------------------
RATIONALE

The 'BB-' rating on Grupo Posadas S.A. de C.V. reflects its
somewhat high financial leverage, the cyclicality of the hotel
industry, and geographic concentration within Mexico. These
factors are offset by the company's position as the largest
hotel operator in Mexico, a diversified hotel portfolio with
well-recognized brands, and the development of competitive
advantage through technology.

As of first-quarter 2005, Posadas operated 92 hotels with a
total of 17,395 rooms. The company's operations are concentrated
in Mexico, where it runs 74 hotels (81% of total rooms). It also
operates 11 hotels in Brazil, six in the U.S., and one in
Argentina. Approximately 29% of Posadas' rooms were located in
the coastal hotels, and the remaining 71% in interior-city
hotels.

During this quarter, the company opened three new hotels in
Mexico under managed contracts, which is in line with the
intention of Posadas to gradually change its business mix. The
company has 19 hotels with more than 2,600 rooms under
development to be opened within the next two years.
Nevertheless, Posadas will only contribute 5% of the total
required investment, as the majority of these openings will be
under management and lease agreements. Nevertheless, its owned
hotels still contribute the highest portion of the company's
revenues (54% of the total revenues for the quarter ended March
2005), followed by leased hotels (18%), management hotels (17%),
and Vacation Club and others (11%).

In terms of occupancy, there is a favorable trend seen since
last year. The occupancy rate as of March 2005 was 63% in the
owned and leased hotels, an increase of six percentage points
compared with the same period of 2004 (59%). Moreover, the
company was able to increase by 5% its revenue per available
room for urban hotels and, most noticeable, by 38% for coastal
hotels, compared with first-quarter 2004. The latter is
explained by the full integration of the room Central Inventory
with centralized reservations, the promotion developed by the
company ("Free Ticket" promotion), and by a seasonal effect
given that the Easter vacation in 2004 happened during the
second quarter, while in this year it happened during March.

As of March 2005, the total debt of the company was $355
million, representing a total debt-to-capitalization ratio of
46.6%, which in the next few years should gradually decrease to
45%. The operating margin was affected during first-quarter 2005
mainly because of the energy price increase. EBITDA interest
coverage for the preceding 12 months was 3.2x, compared to 3.4x
for the 12 months ended March 2005. The EBITDA margin,
meanwhile, decreased to 23.7% in the 12 months ended March 31,
2005, compared to 24.1% for the same period ended December 2004,
especially due to energy price increases. Standard & Poor's
Ratings Services expects margins to improve in the medium term
as a result of the company's potential to operate hotels with
minimum capital investment and the efficiencies obtained by
applying the technology that has already helped the company
reduce costs and improve distribution.

LIQUIDITY

At March 31, 2005, Posadas had about $37 million in cash, its
quarterly funds from operations amounted to $15 million, and it
has approximately $64 million available in uncommitted credit
lines. In turn, Posadas' short-term financial obligations amount
to $51 million that represents 14% of the total debt.

In January 2005, the company reopened its $150 million notes due
October 2011, issued on October 2004, and increased these notes'
total to $225 million. The whole proceeds of the notes have been
used to refinance outstanding debt.

Posadas' capital expenditures were mainly driven by maintenance
of furniture, fixtures, and equipment of existing properties
(around 60% of the total capital expenditures). We expect the
company to continue to expand its business through investment
capital provided by third parties.

OUTLOOK

The stable outlook reflects our perception that the company will
continue improving its operating performance gradually and that
it will be able to generate stable cash flows, even under
adverse economic conditions. The rating could be pressured
downward if the company's financial profile deteriorates
considerably.

Primary Credit Analyst: Fabiola Ortiz, Mexico City (52) 55-5081-
4449; fabiola_ortiz@standardandpoors.com

Secondary Credit Analyst: Manuel Guerena, Mexico City (52) 55-
5081-4411; manuel_guerena@standardandpoors.com


TV AZTECA: Flat Revenue Growth Forecast Released
------------------------------------------------
Despite ending the second quarter with an 8% year-on-year rise
in net profit to MXN497.4 million, broadcaster TV Azteca SA
still expects little or no revenue growth for the full year,
says Dow Jones Newswires.

"For the second half, we have a tough comparable, because the
third quarter has to cope with the lack of the Olympics this
year," Bruno Rangel, director of investor relations, said in a
conference call Wednesday to discuss the Company's second-
quarter results.

"That might make the year as a whole to be practically flat in
absolute terms," said Mr. Rangel.

But the Company expects growth in Mexico's economy and
competition to compensate for the absence of any big advertising
events. Political advertising in the run-up to next year's
presidential election is also expected to continue to be a
"partial" contributor to revenue growth.

Meanwhile, analysts gave mostly positive reviews on the
Company's results, though they remain wary about the ongoing
investigations by U.S. and Mexican authorities into a 2003 debt
transaction in which TV Azteca Chairman Ricardo Salinas Pliego
allegedly profited $109 million.

Analysts at Deutsche Ixe said that while the results were in
line with expectations, "we maintain our sell rating on the
stock due to the continued uncertainty related to the ongoing
legal procedures in the U.S. and Mexico."

Investor Relations:

  Bruno Rangel
  + 52 (55) 1720 9167
  jrangelk@tvazteca.com.mx

  Rolando Villarreal
  + 52 (55) 1720 0041
  rvillarreal@gruposalinas.com.mx

  Press Relations:

  Tristan Canales
  + 52 (55) 1720 1441
  tcanales@gruposalinas.com.mx

  Daniel McCosh
  + 52 (55) 1720 0059
  dmccosh@tvazteca.com.mx



=======
P E R U
=======

SPCC: Sells $800M Worth of Bonds
--------------------------------
Southern Peru Copper Corp., Peru's second-largest copper
producer, sold Wednesday US$800 million of debt in Peru's
biggest-ever corporate bond sale, reports Bloomberg. The 30-year
term is the longest on record for a Peruvian corporate bond.

The Grupo Mexico unit sold US$600 million of 30-year bonds at a
price to yield 7.5 percent. It also sold $200 million of 10-year
bonds at a price to yield 6.375 percent, according to Citigroup
Inc., which managed the sale.

SPCC posted a 28% increase in second-quarter profit to US$307.2
million, compared with the same period last year. The results
are the Company's first quarterly earnings following its merger
with Grupo Mexico's Minera Mexico operations on April 1.

SPCC said Monday it will pay a dividend worth US$1.043 per
share, payable Aug. 19. The dividend will be paid to
shareholders on record at the close of business on Aug. 5.

CONTACT:  SOUTHERN PERU COPPER CORP.
          Avenida Caminos del Inca #171
          Chacarilla del Estanque
          Santiago de Surco
          Lima, 33
          Peru
          Website: http://www.southernperu.com
          Phone: +51-(0)1-372-1414
          Officers: Oscar Gonzalez Rocha, Pres.

          GRUPO MEXICO S.A. DE C.V.
          Avenida Baja California 200,
          Colonia Roma Sur
          06760 Mexico, D.F., Mexico
          Phone: +52-55-5264-7775
          Fax: +52-55-5264-7769
          Web site: http://www.gmexico.com



=================
V E N E Z U E L A
=================

PDVSA: To Build $2.5B Oil Refinery With Brazil's Petrobras
----------------------------------------------------------
Venezuela's state oil company PDVSA and its Brazilian
counterpart, Petrobras, will build a US$2.5 billion oil refinery
in the northeastern Brazilian state of Pernambuco. President
Hugo Chavez and his Brazilian counterpart, Luiz Inacio Lula da
Silva, are expected to officially announce the joint venture at
end-September start-October.

PDVSA and Petrobras signed a memorandum of understanding (MOU)
on February 14 to carry out feasibility studies for the
refinery, which is expected to have processing capacity of
150,000-200,000 barrels of oil a day. It would take two years to
build and create jobs for 10,000 workers.


PDVSA: Reviews Ecuador Crude Refining Opportunity
-------------------------------------------------
Ecuador's government and state oil company Petroecuador will be
sending a technical team of representatives to Venezuela next
week to further talks on refining crude at the refineries of
Venezuela's state oil firm PDVSA, according to a Business News
Americas report.

Discussions on PDVSA refining Petroecuador's crude began on July
19 with Presidents Alfredo Palacio of Ecuador and Hugo Chavez of
Venezuela at the Andean presidential meeting in Peru's capital
Lima.

According to a spokesperson at Ecuador's energy and mines
ministry, the minister Ivan Rodriguez could attend next week's
meeting but Palacio will not.

Despite Petroecuador producing some 300,000 barrels a day (b/d)
of crude, it exports approximately 146,000b/d of that due to its
lack of refining capacity and must then import expensive refined
products to meet domestic demand for diesel and gasoline.

If the deal with Venezuela goes through, Ecuador would ship that
crude to Venezuela to be refined.

"Instead of exporting it, we would refine it and sell oil
derivatives," the spokesperson said.



                            ***********


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