/raid1/www/Hosts/bankrupt/TCRLA_Public/060321.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, March 21, 2006, Vol. 7, Issue 57
Headlines
A R G E N T I N A
AGROCAMP S.A.: Concludes Reorganization After Debt Pact Signed
CAMATU S.A.C.I.F.I.: Individual Reports Due in Court on March 31
CAPEX: S&P Raises Long-Term Corp. Rating to B- from D
CARILO GARDEN: Trustee Verifies Creditors' Claims Until April 3
CONINTEL S.R.L.: Trustee Stops Accepting Claims After May 16
CUENCA SUR: Enters Bankruptcy Proceeding on Court Orders
DIETA OPTIMA: Claims Verification Ends on May 29
FERRAPEL S.A.: Trustee Verifies Creditors' Claims Until April 7
INARGOL S.A.: Closes Reorganization After Debt Pact Homologated
INVERSORA LANCKLEY: Sets Claims Verification Deadline on April 7
SH SALUD: Verification Deadline for Creditors' Claims Is June 6
TELECOM ARGENTINA: S&P Affirms B- Rating with Stable Outlook
B E R M U D A
AES CORPORATION: Delays Filing of 2005 Annual Report
B R A Z I L
BANCO BRADESCO: Closing Deal to Purchase Amex's Local Operations
BANCO DO BRASIL: Lending BRL27 Bil. to Local Agricultural Sector
BANCO GMAC: Moody's Assigns D- Bank Financial Strength Rating
BANCO RURAL: Losses Reached BRL220 Million in November 2005
BANCO SUDAMERIS: Minority Holders Block Stock Swap with ABN Amro
BNDES: Receives Financing Proposals from MRS Logistica
COPEL: Power Market Grows 3.6% in 2005
COSAN: Incurs US$19.52 Net Loss for Quarter Ended Jan. 31
CVRD: Management to Propose Stock Merger with Subsidiary
MRS LOGISTICA: Submits Financing Proposals to BNDES
C A Y M A N I S L A N D S
ABH BRANDS: Alejandro Rivero Resigns as Voluntary Liquidator
AHL ALPHA: Creditors Must File Claims by April 5
ARROI LIMITED: Creditors Have Until April 6 to File Claims
BEAM CAPITAL: Creditors Claim Filing Deadline Is on April 6
BRONZEWOOD LIMITED: Sets April 6 Claims Filing Deadline
C O L O M B I A
SANTA FE DE BOGOTA: S&P Affirms BB Long-Term Currency Rating
D O M I N I C A N R E P U B L I C
AES CORP: Government Seeks US$80M Payment for Damage on Beaches
F R E N C H G U I A N A
DIGICEL: Acquiring Bouygues Telecom to Penetrate French Market
DIGICEL: Bouygues Purchase Prompts Moody's to Hold Low-B Ratings
G R E N A D A
* GRENADA: S&P Affirms B- Long-term Sovereign Credit Ratings
G U A T E M A L A
BANCO INDUSTRIAL: Gets $40M from Cabei to Finance Occidente Buy
P U E R T O R I C O
DORAL FINANCIAL: Inks Consent Orders With Banking Regulators
DORAL FIN'L: Consent Orders Cue Fitch to Keep Rating on Watch
FIRST BANCORP: Fitch Affirms Low-B Negative Rating Outlook
G+G RETAIL: Court Sets General Claims Bar Date for May 15
MUSICLAND HOLDING: Panel Taps Donlin Recano as Information Agent
OCA, INC.: List of the Debtors' 30-Largest Unsecured Creditors
R&G FINANCIAL: Fitch Puts Ratings on Rating Watch Negative
T R I N I D A D & T O B A G O
DIGICEL: Unable to Ink Interconnection Pact with TSTT
U R U G U A Y
* URUGUAY: Inks Twelve Free Trade Agreements with Venezuela
* URUGUAY: Fitch Rates US$500 Mil. Global Bonds Due 2036 at B+
V E N E Z U E L A
EDC: Posts US$78.2 Million Earnings in 2005
PETROLEO BRASILEIRO: Seeks New Natural Gas Projects in Venezuela
* American Airlines Asks US to Upgrade Venezuela's Safety Rating
* VENEZUELA: Fears Negative Impact from US-Colombia FTA
* VENEZUELA: Inks Twelve Free Trade Agreements with Uruguay
* VENEZUELA: Wants Chevron to Pay US$43 Million in Back Taxes
- - - - -
=================
A R G E N T I N A
=================
AGROCAMP S.A.: Concludes Reorganization After Debt Pact Signed
--------------------------------------------------------------
The reorganization of Buenos Aires-based Agrocamp S.A. has
ended. Data revealed by Infobae on its Web site indicated that
the process was concluded after the city's court homologated the
debt agreement signed between the company and its creditors.
CAMATU S.A.C.I.F.I.: Individual Reports Due in Court on March 31
----------------------------------------------------------------
Individual reports on the verified claims of Camatu
S.A.C.I.F.I.'s creditors are due in court on March 31, 2006.
Infobae relates that the submission of a general report is
slated for May 17, 2006.
As reported by the Troubled Company Reporter on Oct. 10, 2005,
the deadline for the individual reports was initially set on
Feb. 15, 2006. The general report submission was set on March
29, 2006.
Camatu S.A.C.I.F.I. began reorganization following the approval
of its petition by the Argentine court.
Mr. Ricardo Guillermo Chelala was appointed as trustee, who
verified creditors' claims until Dec. 2, 2005.
CAPEX: S&P Raises Long-Term Corp. Rating to B- from D
-----------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
corporate credit rating on Argentinian electricity generator
CAPEX S.A. to 'B-' from 'D' after it completed restructuring its
financial debt through the effective exchange of defaulted
notes. The outlook is stable.
The ratings on Argentine electricity generator CAPEX S.A.
reflect the company's weak business and financial risk profiles,
which derive from the high political and regulatory risk in
Argentina as well as from the company's relatively high foreign-
exchange risk and limited financial flexibility. The ratings
also incorporate CAPEX's low cost position for electricity
generation in Argentina and favorable debt maturity schedule
after the debt restructuring.
CAPEX's financial risk profile benefited from the completion of
its financial debt restructuring in September 2005, which
resulted in a 14% reduction of its debt (to about US$250 million
as of Jan. 31, 2006, from about US$300 million as of July 31,
2005) and in a significant extension of its debt maturity
profile (CAPEX will not face principal debt maturities in the
next two years). As a result, CAPEX's leverage improved to 58%
as of Jan. 31, 2006, if measured by total debt to total
capitalization, compared with 74.5% as of April 2005. In
addition, CAPEX's cash generation significantly improved since
the fiscal year ending April 30, 2004, mainly because of higher
electricity prices and somewhat because of higher oil and
liquefied natural gas prices. The higher electricity prices in
fiscal 2005 mainly reflect the higher variable cost of natural
gas plants as a result of the natural gas price increases set by
the Argentine government in 2004.
Standard & Poor's Ratings Services expects CAPEX's funds from
operations to represent 15%-20% of total debt in the next four
years under a conservative scenario, assuming a relatively
stable foreign exchange rate. In that scenario, CAPEX should
prepay long-term debt in accordance with mandatory cash-sweep
clauses included in the terms and conditions of the new debt,
which should result in better debt service coverage ratios and
financial flexibility.
CAPEX's primary business is generating electricity in the
Comahue region in southwestern Argentina. Its thermal plant,
with six gas-fired units and one steam unit, has an installed
nominal capacity of 672 MW, representing about 3% of total
installed capacity in the Sistema Argentino de Interconexi˘n.
Although CAPEX engages in nonregulated businesses, such as crude
oil exploration and production as well as liquefied petroleum
gas and gasoline production, power generation continues to be
the company's core business (contributing about 60% of sales).
CAPEX is controlled by Compa¤ˇa Asociadas Petroleras S.A., a
privately owned company that explores for, develops, produces,
and sells oil.
CAPEX's financial flexibility and liquidity should remain
restricted after the debt restructuring, with limited access to
the financial markets. Standard & Poor's does not expect CAPEX
to maintain significant cash reserves in the medium term (the
company must keep a minimum cash position of US$5 million),
mainly because the new debt contains certain mandatory cash-
sweep clauses that will oblige CAPEX to apply most of the
potential excess cash flow to prepay debt and also carry out
additional capital expenditures. CAPEX's cash reserves amounted
to US$7 million as of Jan. 31, 2006. In addition, the terms and
conditions of the new debt contain various restrictive
covenants, including limitations on additional debt; maximum
capital expenditures and investments; and dividends.
The stable outlook reflects Standard & Poor's expectation that
CAPEX will generate excess cash flow during the next three years
and partly apply it to reducing outstanding debt, resulting in
better debt service coverage ratios. This scenario assumes a
relatively stable foreign exchange rate and some recovery of
electricity prices in the spot market in U.S. dollar terms. The
ratings on the company could be raised if debt service coverage
ratios and financial flexibility significantly improve.
Nevertheless, the ratings could be lowered if the company's cash
flow generation is significantly affected by further government
intervention resulting in lower electricity prices in U.S.
dollar terms.
CARILO GARDEN: Trustee Verifies Creditors' Claims Until April 3
---------------------------------------------------------------
Creditors' claims against Carilo Garden S.A. will be verified
until April 3, 2006. Court-appointed trustee Jose Luis
Carriquiry is tasked with the verification.
Infobae relates that validated claims will be presented in court
as individual reports on May 24, 2006.
The submission of a general report will follow on July 7, 2006.
A Buenos Aires court handles the company's bankruptcy case.
The debtor can be reached at:
Carilo Garden S.A.
Garay 431
Buenos Aires, Argentina
The trustee can be reached at:
Jose Luis Carriquiry
Loyola 660
Buenos Aires, Argentina
CONINTEL S.R.L.: Trustee Stops Accepting Claims After May 16
------------------------------------------------------------
Conintel S.R.L.'s creditors are required to present their claims
against the company to Marcos Livszyc, the company's trustee, on
May 16, 2006. Claims submitted after the said date will no
longer be entertained.
Argentine daily La Nacion relates that Buenos Aires' Court No.
9 declared the company's bankruptcy in favor of the company's
creditor Jose Luis Melian for nonpayment of about $7,210 in
debt.
Clerk No. 18 assists the court with the proceedings.
The debtor can be reached at:
Conintel S.R.L.
Boyaca 1606
Buenos Aires, Argentina
The trustee can be reached at:
Marcos Livszyc
Nunez 6387
Buenos Aires, Argentina
CUENCA SUR: Enters Bankruptcy Proceeding on Court Orders
--------------------------------------------------------
Cuenca Sur S.A. enters bankruptcy protection after a court based
in Rosario 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.
Argentine bankruptcy law requires a court-appointed 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. Deadlines for the submission
of reports are yet to be disclosed.
A report from Infobae did not disclose if a trustee has been
named for the company.
The debtor can be reached at:
Cuenca Sur S.A.
Santa Fe 1261
Rosario, Santa Fe
Argentina
DIETA OPTIMA: Claims Verification Ends on May 29
------------------------------------------------
Leonor Veiga, the court-appointed trustee, has started verifying
claims against Dieta Optima S.A. The verification will end on
May 29, 2006.
La Nacion relates that Buenos Aires' Court No. 23 declared the
company bankrupt in favor of Pablo Martinez Mon, whom the
company owes $3,052.
Clerk No. 46 assists the court in this case.
The debtor can be reached at:
Dieta Optima S.A.
Gascon 574
Buenos Aires, Argentina
The trustee can be reached at:
Leonor Veiga
Humahuaca 4165
Buenos Aires, Argentina
FERRAPEL S.A.: Trustee Verifies Creditors' Claims Until April 7
---------------------------------------------------------------
Mauricio Leon Zafran -- the trustee appointed by the Buenos
Aires court for the Ferrapel S.A. bankruptcy case -- will stop
validating claims from the company's creditors on April 7, 2006.
Mr. Zafran will present the validated claims in court as
individual reports on May 23, 2006. The trustee will also
submit a general report on the case on July 7, 2006.
The debtor can be reached at:
Ferrapel S.A.
Alsina 1535
Buenos Aires, Argentina
The trustee can be reached at:
Mauricio Leon Zafran
Avenida Callao 420
Buenos Aires, Argentina
INARGOL S.A.: Closes Reorganization After Debt Pact Homologated
---------------------------------------------------------------
The reorganization of Inargol S.A. has been concluded. Data
revealed by Infobae on its Web site indicated that the process
was concluded after a court based in Buenos Aires homologated
the debt agreement signed between the company and its creditors.
INVERSORA LANCKLEY: Sets Claims Verification Deadline on April 7
----------------------------------------------------------------
The verification of creditors' claims for the Inversora Lanckley
S.A. bankruptcy will end on April 7, 2006, Infobae reports.
Carlos Enrique Wulff, the trustee appointed by the Buenos Aires
court for the company's liquidation -- will submit the
validation results as individual reports on May 24, 2006. He
will also present a general report in court on July 7, 2006.
The debtor can be reached at:
Inversora Lanckley S.A.
Reconquista 1011
Buenos Aires, Argentina
The trustee can be reached at:
Carlos Enrique Wulff
Virrey del Pino 2354
Buenos Aires, Argentina
SH SALUD: Verification Deadline for Creditors' Claims Is June 6
---------------------------------------------------------------
The verification of creditors' claims for the SH Salud S.R.L.
bankruptcy case is set to end on June 6, 2006, states Infobae.
Monica Olga Rajo, the court-appointed trustee tasked with
examining the claims, will submit the validation results as
individual reports on Sep. 11, 2006. He will also present a
general report in court on Nov. 13, 2006.
Infobae adds that a Buenos Aires court handles the company's
bankruptcy case.
The debtor can be reached at:
SH Salud S.R.L.
Velez Sarsfield 67
Buenos Aires, Argentina
The trustee can be reached at:
Monica Olga Rajo
Viamonte 2359
Buenos Aires, Argentina
TELECOM ARGENTINA: S&P Affirms B- Rating with Stable Outlook
------------------------------------------------------------
The Standard & Poor's assigned 'B-/Stable/--' ratings on Telecom
Argentina S.A. reflect the financial and regulatory challenges
of operating in the Argentine environment and the exposure to
currency-mismatch risks (given the high proportion of foreign-
currency debt to be served with still-frozen and pesified
revenues). These factors are mitigated by the company's
financial improvements after restructuring its financial debt in
August 2005, its efficient operations, and its good market
position as one of the two incumbent telephone companies in
Argentina.
Regulatory uncertainty is still high as the contract and tariff
renegotiation (which was mandated by the government in early
2002), has not been accomplished yet. In March 2006, the
company signed a memorandum of understanding with the government
regarding the contract renegotiation. The memorandum includes
the possibility of raising international incoming calling rates
and the equalization of the off-peak time for local and long-
distance calls (this would extend peak time and result in lower
rate discounts). TECO would also continue investing in both its
fixed and mobile segments. The agreement has to meet additional
legal requirements, including having a public hearing to treat
the principles settled in the memorandum. After the public
hearing is concluded, TECO's shareholders would have to suspend
the lawsuit filed in the World Bank's international arbitration
court against the Argentine government, and withdraw it if it
reaches a final renegotiation with the government. Initially,
the changes proposed in the memorandum are expected to have a
limited impact on the company's current situation and credit
quality. Nevertheless, it is still very early to predict the
effect of the final renegotiation conditions on the future
regulatory framework.
During 2005, the significant expansion of Argentina's mobile
industry and the gradual recovery of the fixed-telephony
business allowed TECO to offset to a great extent the important
decline in margins (associated with higher subscriber
acquisition costs in mobile and cost adjustments) and to
maintain an adequate EBITDA generation. In this sense, the
increase in consolidated sales of about 27% over 2005 (measured
in Argentine pesos) compensated for the decline in the company's
EBITDA margin to 35.0% in that period (from 45.5% in 2004), and
resulted in a relatively slight decline in EBITDA generation (of
2.2% year on year). Margin pressures are expected to continue
in the short term as a result of the intense competition in the
mobile and asymmetric digital subscriber lines segments, until
these markets reach a higher degree of maturity, at which point
operators should start to privilege profitability. In addition,
the company's future cash-flow generation and financial profile
will be tied to the sustainability and stability of the economic
recovery in Argentina and the result of the final contract
renegotiations with the government.
Despite the restructuring closed in August 2005 (that resulted
in a decline in nominal debt to $1.7 billion as of December
2005, from $3.4 billion), TECO still maintains a somewhat
aggressive capital structure, with debt at 72% of capitalization
as of December 2005, given the significant net-worth erosion
(suffered during the Argentine economic crisis in 2002).
Assuming relatively stable U.S. dollar and Euro exchange rates
and inflation levels in Argentina, and depending on the final
contract renegotiation, TECO should be able to continue to
reduce debt and gradually consolidate its financial profile.
Nortel Inversora S.A. controls TECO with a 57.74% share, while
TECO's employees own about 4.68% through an employee stock
ownership program, and the remainder of the stock (40.58%)
trades on the Buenos Aires, New York, and Mexico City stock
exchanges. Nortel is a holding company jointly controlled by
Telecom Italia SpA (BBB+/Stable/A-2) and a local investor group,
which together own 67.79% of its equity.
TECO's liquidity remains tight due to the exposure to currency
mismatch risks (under an scenario of tariff freeze and
pesification) and to the mandatory prepayment provisions
included in the new debt. This is mitigated by the company's
manageable maturity schedule after the restructuring (with no
principal maturities for TECO on individual basis until late
2008) and some incipient access to the local markets.
In December 2005, to gain flexibility to conclude the mobile
network expansion, the company's mobile subsidiary, Telecom
Personal S.A. (TP), refinanced most of its debt of $410 million
as of December 2005. This resulted in some changes in TP's
maturity schedule with a manageable impact for TECO.
Subsequently, in February 2006, TECO launched a consent
solicitation to modify certain conditions contained in the
indenture of Series A and B bonds. Changes consist of the
elimination of the limitation on capital expenditures of TP and
the obligation of TECO to reinvest in TP any distributions
received from TP. The increased flexibility in capital
expenditure and distributions at TP were already factored in
Standard & Poor's Ratings Services' analysis and do not affect
the credit quality of TECO or TP.
As of December 2005, cash holdings and investments amounted to
$212 million, part of which would be devoted to prepay debt in
accordance with the provisions included in the terms of the new
debt.
The stable outlook reflects our expectation that the company's
good competitive position and the relatively stable economic
scenario will allow TECO to further reduce debt and to
consolidate financial improvements after the restructuring. The
rating upside is limited given the current business environment
in Argentina, especially with regard to regulatory risk and the
persistence of currency mismatch risks. The ratings could be
pressured by higher competition in the mobile segment, the
persistence of fixed-tariff inflexibility under a higher-than-
expected inflationary and exchange-rate scenario, an increase in
government intervention in the fixed segment, or deterioration
in its financial flexibility.
=============
B E R M U D A
=============
AES CORPORATION: Delays Filing of 2005 Annual Report
----------------------------------------------------
The AES Corporation was not able to file its 2005 Annual Report
on Form 10-K with the Securities and Exchange Commission by
March 15, 2006.
The Company's 2005 annual report could not be filed due to the
delay in completing its 2005 audit. The delay was due to the
fact that the Company had to allocate significant time and
resources to restate its 2004 annual report on Form 10-K and its
quarterly report on Form 10-Q for the first quarter of 2005.
The amended reports were filed on Jan. 26, 2006.
The Company currently anticipates that its Form 10-K will be
filed no later Mar. 30, 2006.
AES Corporation -- http://www.aes.com/-- is a global power
company. The Company operates in South America, Europe, Africa,
Asia and the Caribbean countries. Generating 44,000 megawatts
of electricity through 124 power facilities, the Company
delivers electricity through 15 distribution companies.
* * *
As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's affirmed the ratings of The AES Corporation, including
its Ba3 Corporate Family Rating and the B1 rating on its senior
unsecured debt. Moody's said the rating outlook remains stable.
===========
B R A Z I L
===========
BANCO BRADESCO: Closing Deal to Purchase Amex's Local Operations
----------------------------------------------------------------
Banco Bradesco will conclude its purchase of American Express'
-- Amex -- credit card operations in Brazil this month or in
April, local financial daily Valor Economico reports. Unnamed
sources close to the negotiations told the local daily that the
purchase could amount to US$1 billion.
Bradesco earned the right of first refusal to acquire Amex's
local credit card operations in February, according to local
press.
"Bradesco wants to increase and improve its credit card
business," Alexandre Umberti -- Ibope Inteligencia analyst
-- told Business News Americas.
Mr. Umberti said that Bradesco's current credit card operations
cater consumers with lower income while Amex has high-income
clients, Business News says.
High-income clients may be lesser in Brazil than those who earn
low, but they are faithful customers with higher expenses and a
lot of added value, Mr. Umberti explained to Business News.
Business News states that as local market grew in recent years
Amex, according to Mr. Umberti, grew much less and lost market
share.
According to Business News, Mr. Umberti supposed that Amex may
be accounted for 2% of all credit cards circulation, with a
revenue share around 10% of the total, although Amex does not
release figures for its operations in Brazil. Umberti added
that at one point, Amex held up to 10% of all credit cards with
a 12.5% revenue share.
Business News relates that Mr. Umberti believed that hindrance
to Amex's growth in Brazil include the limited number of
businesses that accept the company's card along with the higher
rates that the company charges.
On the other hand, a recent report by Credicard -- a local
credit card issuer -- indicated that circulation of credit cards
for lower-income customers rose 33% in 2005 to 15.1 million.
By the end of 2005, Bradesco, Business News says, had about 10.2
million credit cards in circulation, with 5.5 million issued by
Finasa -- its financial arm.
Bradesco could also buy Amex's travel agencies in the country,
says Valor Economico.
Business News states that if Amex sells its travel agencies, it
would abandon all operations in Brazil.
A source confirmed the possibility of the purchase to Business
News, but said that there was yet no decision regarding the
price.
Banco Bradesco and Amex gave no comments regarding the purchase,
according to Business News.
Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. Banco
-- http://www.bradesco.com.br/-- prides itself on serving low-
and medium-income individuals in Brazil since the 1960s.
Bradesco is Brazil's largest private bank, with more than 3,000
banking branches, and also a leader in insurance and private
pension management. Bradesco has branches throughout Brazil as
well as one in New York, two in the Bahamas, and four in the
Cayman Islands. Bradesco offers Internet banking, insurance,
pension plans, annuities, credit card services (including
football-club affinity cards for the soccer-mad population), and
Internet access for customers. The bank also provides personal
and commercial loans, along with leasing services.
* * *
As reported by Troubled Company Reporter on Feb. 23, 2006,
Moody's Investors Service shifted Banco Bradesco S.A.'s 'C-'
bank financial strength rating to positive from stable.
BANCO DO BRASIL: Lending BRL27 Bil. to Local Agricultural Sector
----------------------------------------------------------------
Banco do Brasil -- a Brazilian federal bank -- will lend about
BRL27 billion (US$12.8 billion) to the local agricultural sector
for the 2005-6 harvest, the company said in a report.
Jose Carlos Vaz -- the bank's executive director for
agribusiness -- told the local daily Valor Economico that
producers were more cautious of this harvest that they preferred
to use less financial resources during the planting cycle.
According to Business News Americas, the bank has made about
BRL21 billion payment since the beginning of the harvest in July
last year, until the end of last month.
Business News relates that Banco do Brasil had granted about
BRL21.6 billion in loans during the same period of the 2004-5
harvest.
Total loans to the sector during the 2004-5 harvest reached
BRL25.5 billion, Business News reports.
* * *
As reported on Mar. 3, 2006, Standard & Poor's Ratings Services
raised its foreign currency counterparty credit ratings on Banco
do Brasil S.A. to 'BB' from 'BB-'. The foreign and local
currency ratings of this bank are now equalized at 'BB'. S&P
said the outlook is stable.
BANCO GMAC: Moody's Assigns D- Bank Financial Strength Rating
-------------------------------------------------------------
Moody's Investors Service assigned first time ratings to Banco
GMAC S.A. These are a D minus bank financial strength rating,
long-term global local currency deposit rating of Ba2, under
review for downgrade, and short-term global local currency
deposit rating of Not Prime, with a stable outlook. Moody's
also assigned a national scale deposit rating of Aa3.br in the
long-term and BR-1 in the short-term, both under review for
downgrade. The long and short-term foreign currency deposit
ratings of B1 and Not Prime, respectively, are at Brazil's
country ceiling, and have a positive outlook.
Moody's said that ratings for Banco GMAC are supported by the
bank's financial metrics, and its profitability and granular
asset quality, in particular, which compare well to peers', and
which reflect the bank's niche business strategy centered in
vehicle financing for General Motors' operations in Brazil. The
bank's core earnings are robust, and they are indicative of high
margins prevailing in its consumer business.
Banco GMAC is a subsidiary of General Motors Acceptance
Corporation -- GMAC, and as such, it benefits from the parent's
expertise in consumer financing and corporate solutions,
including systems and credit monitoring. Banco GMAC's franchise
is intrinsically linked to the operations of General Motors do
Brasil; the bank finances a substantial percentage of GM's
retail car sales, largely using GM's network of authorized car
dealers as agents for loan origination. Moreover, the bank's
operational performance is linked to the factory's goals as it
determines product and marketing strategies, including pricing
incentives, which may affect the bank's earnings.
Moody's Ba2/NP global local-currency deposit ratings assigned to
Banco GMAC incorporate the potential support of its parent
company, GMAC, which is rated Ba1 for senior unsecured debt, and
Not Prime, for short term. Moody's changed the review status of
GMAC's Ba1 long-term rating to "review for possible downgrade"
from "review with direction uncertain", and confirmed GMAC's Not
Prime short-term rating. Those actions are reflected in the
ratings of the Brazilian subsidiary. Please refer to the press
release entitled "Moody's reviews ratings of GM, GMAC and RESCAP
for possible downgrade", dated March 16, 2006.
Banco GMAC is headquartered in Sao Paulo, Brazil. As of
December 2005, the bank had total assets of approximately R$3.1
billion (US$1.3 billion) and equity of R$574 million (US$245
million).
These ratings were assigned to Banco GMAC S.A.:
-- Bank Financial Strength Rating: D-, stable outlook.1
-- Global Local Currency Rating: Ba2 long-term local
currency deposit rating, under review for downgrade, and
Not-Prime short-term local currency deposit rating, stable
Outlook.
-- Foreign Currency Deposit Rating: B1 long-term foreign
currency deposit rating, and Not Prime short-term foreign
currency deposit rating, positive outlook.
-- National Scale Deposit Ratings: Aa3.br long-term deposit
rating and BR-1 short-term deposit rating, under review
for downgrade.
BANCO RURAL: Losses Reached BRL220 Million in November 2005
-----------------------------------------------------------
Banco Rural's losses amounted to BRL220 million in November last
year, according to preliminary results posted on the central
bank.
The losses could have been caused by a continuing political
scandal in June. According to Business News Americas, the bank
is accused of transferring unregistered campaign donations to
political parties during the 2002 and 2004 elections.
Business News relates that assets had dropped 54.7% to BRL2.4
billion at the end of November 2005. The bank's loan portfolio
fell 53.3% to BRL1.4 billion while deposits plunged 60% to
BRL1.2 billion.
About 900 employees were laid off while roughly 44% of the
bank's branches were closed last November, states Business News.
Banco Rural reported losses of BRL130 million in the first half
of 2005. The bank had reported in 2004 a full-year net profit
of BRL132 million.
Banco Rural has until the end of March to release its 2005
financial statement.
* * *
As reported by Troubled Company Reporter on Feb. 20, 2006,
Moody's Investors Service has withdrawn all of its ratings for
Banco Rural S.A. for business reasons. Moody's stressed this
action does not reflect a change in Banco Rural's
creditworthiness.
The bank has no rated foreign currency debt outstanding.
Banco Rural had total assets of US$1.9 billion as of June 2005.
These ratings were withdrawn:
* Bank Financial Strength Rating: E+, negative outlook
* Long and Short Term Foreign Currency Deposit Ratings:
B2/Not Prime, negative outlook
* Long and Short Term Local Currency Deposit Ratings:
B2/Not Prime, negative outlook
* Long and Short Term National Scale Deposit Ratings:
Ba1.br/BR-4
BANCO SUDAMERIS: Minority Holders Block Stock Swap with ABN Amro
----------------------------------------------------------------
Banco Sudameris' minority shareholders managed to stop majority
shareholder ABN Amro from acquiring their shares, Business News
Americas reports.
Business News states that the minority holders had obtained a
court order to stop the exchange of their stock for shares in
ABN Amro. The shareholders had filed their complaint with
securities regulator Comissao de Valores Mobiliarios -- CVM.
Recently, ABN Amro Real incorporated Sudameris shares into its
listing on the Sao Paulo Bovespa stock exchange after the city's
court made a ruling in favor of Dutch parent ABN Amro, Business
News relates. Sudameris shareholders' shares would then be
exchanged for ordinary ones in ABN Amro.
However, ABN Amro's stock trades on the Amsterdam Stock Exchange
and none on Bovespa, Business News says.
According to Business News, Sudameris minority shareholder had
complained that they were going to receive shares that cannot be
traded in Brazilian market.
ABN Amro attempted to purchase all of Sudameris shares in 2004.
However, the minority holders opposed the operation that started
the ongoing legal battle, Business News relates.
* * *
As reported by Troubled Company Reporter on Oct. 19, 2005,
Moody's Investors Service upgraded Banco Sudameris S.A.'s long-
term foreign currency deposit rating to B1 from B2 with a
positive outlook.
BNDES: Receives Financing Proposals from MRS Logistica
------------------------------------------------------
MRS Logistica has submitted financing proposals to Banco
Nacional de Desenvolvimento Economico e Social S.A. aka BNDES,
Business News Americas reports.
BNDES announced in February the launching of a special credit
line for railroad investments. The bank will finance up to 90%
of the project.
The credit line, Business News says, will charge 1.5% annually
above the bank's long-term interest rates known as TJLP,
currently set at 9.75%.
Julio Fontana, MRS Logistica's president, revealed to Economico
Valor, that his company submitted several financing proposals to
BNDES, stating that BNDES' conditions will offer fast solutions
to problems on railroad infrastructure.
"Railroad infrastructure problems are not the responsibility of
concessionaires, but in many cases the government does not act
adequately to solve them," Mr. Fontana told Valor.
Business News says that ALL Logistica is due to present a
preliminary proposal to BNDES. FCA has also shown interest,
although it has not confirmed a proposal. Concessionaires in
the north and northeast of Brazil are also expected to hand in
their proposals.
* * *
As reported by Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Banco Nacional de Desenvolvimento
Economico e Social S.A. aka BNDES to 'BB' with a stable outlook
from 'BB-' with a positive outlook. The company's local
currency credit rating was also shifted to 'BB+' with a stable
outlook from 'BB' with a positive outlook.
* * *
As reported on Nov. 10, 2005, Standard & Poor's Ratings Services
revised the outlook on the BB- long-term foreign currency rating
of MRS Logistica S.A. to positive from stable, following the
revision of the foreign currency outlook of the Federative
Republic of Brazil.
COPEL: Power Market Grows 3.6% in 2005
--------------------------------------
Total power consumption billed by COPEL in 2005 reached 18,696
GWh -- a growth of 3.6% compared to the previous year. If the
contracts with Carbocloro and Volkswagen -- expired at the end
of 2004 -- had been taken into account, consumption would have
decreased 0.2% in the period.
Residential consumption -- which accounts for 24.9% of COPEL's
market -- grew by 4.2% in 2005 as attested by the rate of
consumption per residential customer, which reached 151.4
kWh/month in 2005, or 1.5% higher than that recorded in the
previous year -- 149.2 KWh/month. The growth resulted mostly
from higher sales of electronics, particularly DVD players, TV
sets, and personal computers, following a credit expansion to
the customers which began last year.
Commercial consumption -- accounted for 17.3% of COPEL's market
-- recorded the best performance among major customer
categories, with a 6.8% growth. The expansion resulted from the
favorable conditions the tertiary sector has experienced. The
retail business benefited from the greater availability of
credit to individual consumers, from the overall increase in the
number of consumers -- 2.5% over 2004 -- and from the opening of
new businesses, particularly malls, which have recorded high
sales figures.
The 5.2% growth in rural consumption was due mainly to the
increase in average consumption, which resulted from higher
income for producers on account of good harvests in 2002/2003
and 2003/2004, enabling them to invest in electric machinery.
Consumption by the industrial segment -- taking into account
only COPEL Distribution's customers -- dropped by 9.3% due to
the transfer of free customers to COPEL Generation in April
2005. However Copel's total industrial consumption grew by 1.8%
through the addition of free customers supplied by COPEL
Generation.
Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense
de Energia SA -- http://www.copel.com/-- transmits and
distributes electricity to more than 3 million customers in the
state of Paran and has a generating capacity of nearly 4,600 MW,
primarily from hydroelectric plants. COPEL also offers
telecommunications, natural gas, engineering, and water and
sanitation services. The company restructured its utility
operations in 2001 into separate generation, transmission, and
distribution subsidiaries to prepare for full privatization,
which has been indefinitly postponed. In response, COPEL is re-
evaluating its corporate structure. The government of Paran
controls about 59% of COPEL.
* * *
Copel's BRL100,000,000 debentures due March 1, 2007, is rated
Ba3 by Moody's.
COSAN: Incurs US$19.52 Net Loss for Quarter Ended Jan. 31
---------------------------------------------------------
Cosan SA, Brazil's largest sugar and ethanol group, posted net
loss of 41.2 million Brazilian reals (US$19.52 million) for the
quarter ended Jan. 31, 2006, reversing a net profit of BRL23.5
million seen in the same period a year ago, Dow Jones Newswires
reports. The company attributed the loss to the cost of its
November 2005 initial public share offering.
The company posted net operating revenue of BRL656.5 million in
the period, up sharply from BRL388.6 million seen in the
comparable period a year ago.
For the 12 months ended Jan. 31, Cosan posted a net loss of
BRL63.7 million, reversing a net profit of BRL15.8 million seen
in the previous comparable period.
Cosan's sugar exports rose 31% to 512,000 tonnes, while domestic
sales were up 34% from a year before at 103,200 tonnes during
the quarter, compared with a year ago, Reuters reports.
Cosan's sugar stocks amounted to 544,000 tonnes on Jan. 31.
Cosan said it gave priority to domestic ethanol sales, which
totaled 242.4 million liters, an increase of 141% from the same
quarter a year ago. Exports totaled 41.3 million liters, down
from 46.2 million liters a year earlier, Reuters says.
It noted that increased demand from flex-fuel cars, as well as
strong world ethanol demand. European Union sugar reform, poor
Asian harvests and lower world sugar stocks boosted demand for
Brazilian sugar.
According to Dow Jones, Cosan releases its results for different
quarterly periods compared with other industries in Brazil
because of the peculiarities of the sugar and ethanol industry.
* * *
On Mar. 7, 2006, Standard & Poor's Ratings Services assigned a
'BB' foreign currency rating to Cosan S.A. Industria e Comercio.
The company was assigned a 'BB' corporate credit rating with a
stable outlook.
CVRD: Management to Propose Stock Merger with Subsidiary
--------------------------------------------------------
Companhia Vale do Rio Doce and its subsidiary, Caemi Mineracao e
Metalurgia S.A., disclosed that their management submitted a
proposal for CVRD stock merger with Caemi during the
Extraordinary General Shareholders' Meetings.
In a meeting held on Jan. 23, 2006, the shareholders of Valepar
S.A. -- direct controlling shareholder of CVRD and indirect
controlling shareholder of Caemi -- issued voting instructions
to its representatives in the Board of Directors of CVRD, aiming
to approve the proposal from CVRD's Executive Board to perform
the merger.
On Jan. 26, 2006, the Board of Directors of CVRD ratified the
proposal set out by the Executive Board to forward the merger of
all shares issued by CAEMI, which shall be submitted to the
approval from the shareholders of the companies. In this
occasion, the CVRD Fiscal Council members who were present in
the CVRD Board of Directors' meeting became aware of the
proposal of merger of shares.
On March 14, 2006, the terms and conditions of the merger of
shares were approved during the meeting were held by the Boards
of Directors of CVRD and CAEMI. The Fiscal Council members of
Caemi, who were present at the Meeting of the Board of Directors
of the Merged Company, acknowledged the proposal of merger of
shares.
The merger of shares is still subjected to the opinions of the
members of the Fiscal Councils of CVRD and Caemi, in accordance
with Article 163, III of the Brazilian Corporate Law.
Corporate Arrangements
That Preceded the Merger of Shares
Until Feb. 16, 2006, CVRD indirectly held the totality of the
common shares -- except six common shares held by the members of
the Board of Directors of Caemi -- and 40.06% of the preferred
shares issued by Caemi through its subidiary Amazon Iron Ore
Overseas, Co. Ltd., in Cayman Islands.
As a preliminary measure to the merger of shares, redemption of
shares issued by Amazon was performed on Feb. 16, 2006, and the
payment was made in shares issued by Caemi to CVRD.
Upon the conclusion of corporate transactions involving the
transfer of the totality of the shares issued by Caemi
previously held by Amazon, CVRD became the holder of the
interest.
The main purpose of this merger of shares is to allow the
consolidation of the companies into a sole vehicle with presence
on the capital market, concentrating investments in shares of a
single company. It is also expected that such unification will
favor the dispersion of free float of shares, with liquidity
increase, and will simplify the corporate structure with
favorable effects.
The companies expect these benefits to result from the merger:
-- consolidation of the capital structure;
-- rationalization and optimization of the investment plans;
-- stronger financial capacity, increase and diversification
of the alternatives related to the raising of funds;
-- higher efficiency of the corporate structure and
execution of strategic decisions; and
-- potential increase of productivity and competitiveness,
mainly in iron ore operations.
The merger of shares, as proposed, preserves and creates value
for the shareholders of the companies in light of the fact that
it allows a decrease in corporate costs and raising of synergies
at an estimated amount of approximately BRL300 million.
Regarding specifically to the current shareholders of Caemi,
which will continue to be exposed to its assets and results, the
companies foresee these benefits:
-- full exposure to CVRD's performance, which invested
US$10.5 billion over the last five years and plans to
invest US$4.6 billion in 2006, and currently is
developing a portfolio of 22 projects and a global
research and development program;
-- acquisition of voting rights equal to the political
rights granted to the holders of common shares issued by
CVRD in all matters subjected to resolution of the
General Meeting, except indication of members for the
Board of Directors;
-- access to CVRD dividend policy, oriented by financial
flexibility, transparency and risk minimization for its
shareholders;
-- greater liquidity of its investments, in light of the
fact that CVRD shares are tradable at the Sao Paulo Stock
Exchange (Bovespa), where holds a highlighted position at
Ibovespa, and at the New York Stock Exchange, where their
American Depositary Receipts aka ADRs are among the most
actively traded ADRs listed on that stock exchange; and
-- large access to the global capital market available for
investment grade rated companies and shareholders in more
than twenty countries, a fact that enables the reduction
of its cost of capital and increases the potential for
shareholder value creation, CVRD's shareholders, besides
the benefits, will have full exposure to Caemi's world
class assets and results.
The merger of shares shall result in the increase of CVRD's
capital stock, in view of the merger of all the shares issued by
CAEMI into CVRD equity.
The capital stock increase at CVRD, to be carried out in light
of the merger of shares, shall be performed based on the report
dated March 14, 2006, prepared by Banco Merrill Lynch de
Investimentos S.A., established in the City of Sao Paulo, State
of Sao Paulo, at Av. Brigadeiro Faria Lima 3400, 18th floor,
enrolled with the Brazilian Legal Entities Taxpayers Roll of the
Ministry of Finance (CNPJ/MF) under the number 62.073.200/0001-
21 (Merrill Lynch), in accordance with Exhibit I of the
Protocol.
The report prepared by Merril Lynch contains the evaluation of
the entirety of shares issued by Caemi based on the exchange
market value criteria of Caemi shares, according to the rates of
Bovespa throughout the 90 days that preceding the first press
release related to the transaction, issued on Jan. 23, 2006. As
a result, were considered the closing rates for the trading
sessions during the period from Oct. 26, 2005 to Jan. 23, 2006,
including these dates, and the result was an average rate of
BRL3.52311 for each preferred share issued by Caemi, being
attributed for the totality of shares of the Merged Company the
amount of BRL13,809,698,679.97.
The swap ratio of preferred shares issued by Caemi for Class A
preferred shares issued by CVRD shall be performed based on the
market value of such shares, in accordance with their average
rating at Bovespa.
In light of the high rates of liquidity and dispersion presented
by the preferred shares issued by CVRD and by Caemi, both listed
in the Ibovespa Index, in which such shares hold, respectively,
the third and the sixth places among the most negotiated shares
at Bovespa, according to the theoretical portfolio of such index
for the period from January to April 2006, the companies
understand that the substitution rate of the preferred shares
issued by Caemi to be merged to the shareholder's equity of CVRD
with new shares issued by CVRD, must be set up based on their
respective market values, as established by Article 11 of CVM
Instruction 319/99. This criteria is, in accordance with the
opinion of the companies, what ensures equal treatment to their
shareholders, due to the fact that it reflects the value
attributed by the market to the shares of the merging company
and of the merged company.
The companies understand that the closing average of the 90 days
that preceded the first press release related to the merger of
shares, which presents an adequate sample of the current market
value of such shares and, at the same time, eliminates eventual
distortion caused by the volatility and special conditions of
the market. Therefore, were considered the closing rates for
the trading sessions during the period from Oct. 26, 2005, to
Jan. 23, 2006, including this date, being obtained the average
rate of BRL85.61640 for Class A preferred share issued by CVRD
and BRL3.52311 for the preferred share issued by Caemi,
respectively, as indicated in Exhibit II of the Protocol.
As result of the abovementioned, the substitution rate to be
adopted upon the Merger of Shares shall be as follows: each
preferred share issued by Caemi to be merged will entitle its
holder to receive 0.04115 Class A preferred shares issued by
CVRD.
Shares Fraction
The remaining fractions of Class A preferred shares issued by
CVRD, shall be grouped in whole numbers, and then sold at an
auction to be held at BOVESPA, according to the terms of the
shareholders notice to be published after the Extraordinary
General Shareholder's Meeting of CVRD that approves the Merger
of Shares. The net values due to the referred sale shall be
available to the holders of fractions of Class A preferred
shares issued by CVRD, proportionally to their participation in
each share sold.
CVRD'S Capital Stock After The Merger Of The Shares
Due to the merger of shares, the capital stock of CVRD shall be
increased by BRL5,492,400,974.56, equivalent to the value of
CAEMI shares to the be merged into CVRD's equity.
The exchange of the preferred shares issued by CAEMI for Class A
preferred shares issued by CVRD aims at being on the level with
the political rights of all preferred shares involved in this
operation, without the need to create a new class with rights
differentiated from those granted to the already existing
shares.
CVRD Class A preferred shares issued in the benefit of CAEMI
shareholders, as a result of the Merger of Shares, shall be
entitle to all rights granted in the Bylaws of the Merging
Company regarding the shares of that same kind, and the holders
of such shares shall be entitled to fully receive any dividends
or interest on shareholders equity eventually declared by CVRD
as of the date of the General Extraordinary Shareholders'
Meeting of CVRD which deliberates about the Merger of Shares of
Caemi.
After the implementation of the Merger of Shares, the rights
granted to the three shares of special class of CVRD owned by
the Brazilian Government -- Golden Shares -- will remain
unchanged. CVRD will not issue new shares of that kind, which
are exclusively held by the Brazilian government.
Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio
Doce -- http://www.cvrd.com.br/-- engages primarily in mining
and logistics businesses. It engages in iron ore mining, pellet
production, manganese ore mining, and ferroalloy production, as
well as in the production of nonferrous minerals, such as
kaolin, potash, copper, and gold.
* * *
On Jan. 5, 2006, Fitch Ratings assigned a long-term foreign
currency rating of 'BB' to Vale Overseas Limited's proposed
US$300 million issuance due 2016. Vale Overseas is a wholly
owned subsidiary of Companhia Vale do Rio Doce, a large
diversified mining company located in Brazil. The notes are
unsecured obligations of Vale Overseas and are unconditionally
guaranteed by CVRD. The obligation to guarantee the notes rank
pari passu with all of CVRD's other unsecured and unsubordinated
debt obligations. Fitch expects the proceeds of this issuance
to be used for general corporate purposes and primarily to pay
down US$300 million of Vale Overseas' 9.0% guaranteed notes due
2013.
Fitch also maintains these ratings for CVRD and CVRD Finance
Ltd., a wholly owned subsidiary of CVRD:
-- CVRD foreign currency rating: 'BB', Outlook Positive;
-- CVRD local currency rating: 'BBB' Outlook Stable;
-- CVRD national scale rating: 'AAA(bra)', Outlook Stable;
-- CVRD Finance Ltd.: series 2000-1 and series 2000-3: 'BBB';
-- CVRD Finance Ltd., series 2000-2 and series 2003-1: 'AAA'.
MRS LOGISTICA: Submits Financing Proposals to BNDES
---------------------------------------------------
MRS Logistica has submitted financing proposals to Banco
Nacional de Desenvolvimento Economico e Social S.A. aka BNDES,
Business News Americas reports.
BNDES announced in February the launching of a special credit
line for railroad investments. The bank will finance up to 90%
of the project.
The credit line, Business News says, will charge 1.5% annually
above the bank's long-term interest rates known as TJLP,
currently set at 9.75%.
Julio Fontana, MRS Logistica's president, revealed to Economico
Valor, that his company submitted several financing proposals to
BNDES, stating that BNDES' conditions will offer fast solutions
to problems on railroad infrastructure.
"Railroad infrastructure problems are not the responsibility of
concessionaires, but in many cases the government does not act
adequately to solve them," Mr. Fontana told Valor.
Business News says that ALL Logistica is due to present a
preliminary proposal to BNDES. FCA has also shown interest,
although it has not confirmed a proposal. Concessionaires in
the north and northeast of Brazil are also expected to hand in
their proposals.
* * *
As reported by Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Banco Nacional de Desenvolvimento
Economico e Social S.A. aka BNDES to 'BB' with a stable outlook
from 'BB-' with a positive outlook. The company's local
currency credit rating was also shifted to 'BB+' with a stable
outlook from 'BB' with a positive outlook.
* * *
As reported on Nov. 10, 2005, Standard & Poor's Ratings Services
revised the outlook on the BB- long-term foreign currency rating
of MRS Logistica S.A. to positive from stable, following the
revision of the foreign currency outlook of the Federative
Republic of Brazil.
===========================
C A Y M A N I S L A N D S
===========================
ABH BRANDS: Alejandro Rivero Resigns as Voluntary Liquidator
------------------------------------------------------------
Alejandro Rivero has resigned as the voluntary liquidator of ABH
Brands Co. The company's sole shareholder resolved to accept
Mr. Rivero's resignation on Feb. 2, 2006.
Mr. Diego Munoz was appointed to take the place of Alejandro
Rivero as voluntary liquidator.
The new voluntary liquidator can be reached at:
Attention: Richard Addlestone
Diego Munoz
c/o P.O. Box 265 George Town
Walker House
Mary Street, George Town
Grand Cayman, Cayman Islands
AHL ALPHA: Creditors Must File Claims by April 5
------------------------------------------------
Creditors of AHL Alpha (Cayman) Ltd., which is being voluntarily
wound up, are required to present proofs of claim on or before
April 5, 2006, to Q&H Nominees Ltd., the company's liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
AHL Alpha (Cayman) Ltd. began wind up process on Dec. 15, 2005.
The liquidator can be reached at:
Attention: Greg Link
Q&H Nominees Ltd.
P.O Box 1348 George Town
Grand Cayman, Cayman Islands
Telephone: 949 4123
Facsimile: 949 4647
ARROI LIMITED: Creditors Have Until April 6 to File Claims
----------------------------------------------------------
Arroi Limited's creditors are required to submit particulars of
their debts or claims on or before April 6, 2006, to the
company's appointed liquidator, Buchanan Limited. Failure to do
so will exclude them from receiving the benefit of any
distribution that the company will make.
Arroi Limited started liquidating assets on Feb. 23, 2006.
The liquidator can be reached at:
Attention: Francine Jennings
Buchanan Limited
P.O. Box 1170 George Town
Grand Cayman, Cayman Islands
BEAM CAPITAL: Creditors Claim Filing Deadline Is on April 6
-----------------------------------------------------------
Beam Capital Corporation, which is being voluntarily wound up,
are required on or before April 6, 2006, to present proofs of
claim to Martin Couch and Emile Small, the company's
liquidators.
Creditors must send their full names, addresses, descriptions,
the full particulars of their debts or claims and the names and
addresses of their solicitors (if any) to the liquidator.
Beam Capital Corporation began liquidating assets on Feb. 17,
2006.
The liquidators can be reached at:
Martin Couch
Emile Small
Maples Finance Limited
P.O. Box 1093 George Town
Grand Cayman, Cayman Islands
BRONZEWOOD LIMITED: Sets April 6 Claims Filing Deadline
--------------------------------------------------------
Creditors of Bronzewood Limited are required to submit
particulars of their debts or claims on or before April 6, 2006,
to Jon Roney and Richard Gordon, the company's appointed
liquidators. Failure to do so will exclude them from receiving
the benefit of any distribution that the company will make.
Bronzewood Limited started liquidating assets on Feb. 21, 2006.
The liquidators can be reached at:
Jon Roney
Richard Gordon
Maples Finance Limited
P.O. Box 1093 George Town
Grand Cayman, Cayman Islands
===============
C O L O M B I A
===============
SANTA FE DE BOGOTA: S&P Affirms BB Long-Term Currency Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said today that it affirmed
its 'BB' long-term foreign currency issuer credit rating on the
Capital District of Santa Fe de Bogota the capital of the
Republic of Colombia, and revised its outlook on the rating to
positive from stable. Standard & Poor's also affirmed its BBB-
local currency issuer credit rating on the District. The
outlook on the local currency rating remains stable.
The outlook revision on Bogota follows Standard & Poor's Feb.
22, 2006, revision of its outlooks on its 'BB' long-term foreign
and 'BBB' long-term local currency sovereign ratings on Colombia
to positive from stable, which reflects the sovereign's better
economic prospects as well as ongoing improvements in the
country's external indicators.
According to Standard & Poor's credit analyst Patricia Calvo,
the ratings on the District are supported by its well-
diversified dynamic local economy and its status as Colombia's
financial, commercial, and administrative center.
"Also supporting the ratings are Bogota's sophisticated and
competent management, above-average fiscal flexibility, robust
financial performance, and good liquidity position," Ms. Calvo
said.
Bogota's dynamic, mainly service-based local economy accounts
for about 22.5% of Colombia's GDP. The District's gross
regional product growth rate now exceeds Colombia's, as does its
GRP per capita growth rate.
"An experienced management team conducts an active, albeit
prudent, financial and investment policy," explained Ms. Calvo.
"Bogota's accounting and budgetary systems are fully automated,
and the District consistently posts its financial statements on
the Internet and in local newspapers," she added.
Ms. Calvo said that Bogota enjoys a healthy degree of
independence from the central government regarding revenue.
Modifiable revenue, which accounted for 66.3% of operating
revenue in 2004, has posted a two-digit growth rate since 2002.
This, together with anti-evasion policies and room for tax
increases, indicates that that revenue independence is likely to
continue in 2006 and thereafter.
"The stable outlook on the local currency rating reflects
Standard & Poor's expectation that Bogota will maintain a
balanced budget structure and conservative debt management
policies," Ms. Calvo noted. "Positive economic growth prospects
should help sustain future revenue growth, which, in turn,
should help maintain strong operating balances and keep the
local currency rating at its current level, while any
instability that affects the District's main macroeconomic
indicators, such as interest and exchange rates, could pressure
the local currency rating. The positive outlook on the foreign
currency rating mirrors that of Colombia," she concluded.
===================================
D O M I N I C A N R E P U B L I C
===================================
AES CORP: Government Seeks US$80M Payment for Damage on Beaches
---------------------------------------------------------------
The government of Dominican Republic is seeking $80 million
payment from AES Corp. for 82,000 tons of coal ash dumped on its
beaches, the Associated Press reports.
According to the AP, the government claimed that the tons of ash
are causing sickness to the residents and are harming the
tourism industry.
The government told the AP that the tons of ash were left on the
beaches in Manzanillo and the Samana Bay port town of Arroyo
Barril between October 2003 and March 2004 without proper
government permits. These tons of ash were transported from an
AES Plant in Guayama, Puerto Rico.
"'s had a devastating impact upon the economy of these two
communities. Their tourist traffic is off 70% in Samana and
down sharply in Manzanillo as well," Bart Fisher, the Washington
lawyer hired by the Dominican government, told AP. "'s had a
devastating impact on the health of the people living near the
toxic dumps in terms of respiratory problems and asthma, and
some have died in fact."
According to the AP, the government hired a Washington attorney
to attempt to open settlement talks with AES Corp. If that
fails, the lawyer will file a lawsuit in US courts against the
company before a two-year statute of limitations expires later
this week.
Mr. Fisher told the AP that the Dominican Republic is seeking at
least $80 million in compensation for economic damage,
environmental cleanup and monitoring, and health screening of
the local population. He added that the present administration
commissioned environmental studies to determine the ash's impact
on ocean life.
Mr. Fisher revealed that townspeople in Manzanillo were hired to
move the ash without protective gear such as masks.
The dumpsite is next to a mangrove swamp where cattle, goats and
pigs feed, and there is fear toxins have entered the food chain,
Mr. Fisher added.
AES Corp. confirmed to the Associated Press that the ash
originated at its plant. However, it said that it did nothing
improper and that the dispute is between the Dominican
government and a Florida businessman Roger Charles Fina, whose
firm was hired by AES to transport the ash.
"We think they're unsubstantiated and have no merit," AES
spokeswoman Robin Pence told the AP.
AES Corp. revealed to the AP that an official in the Dominican
Republic's previous administration said in 2004 that the ash was
harmless and that proper permits were obtained to dispose of it.
According to the Associated Press, the Dominican government has
pursued a corruption case against a former environmental
official accused of granting improper permits for the ash
disposal, and is trying to extradite Mr. Fina.
Ari Hershowitz -- a member of the Natural Resources Defense
Council -- told the Associated Press that his group recently
became aware of AES' ash dumping case. The council is
researching it before deciding whether to pursue action in
Washington.
"We're always concerned when U.S. companies dump materials
overseas," Mr. Hershowitz said to the Associated Press. "Coal
ash is something that needs controlled management and there are
detailed U.S. laws on how to properly manage and dispose of the
waste, and this is the kind of stuff you wouldn't want your kids
to play on."
Mr. Fina is not available to give comment on the case and the
lawyer representing him in the Dominican Republic gave no
immediate comment, according to the Associated Press.
AES Corporation -- http://www.aes.com/-- is a global power
company. The Company operates in South America, Europe, Africa,
Asia and the Caribbean countries. Generating 44,000 megawatts
of electricity through 124 power facilities, the Company
delivers electricity through 15 distribution companies.
* * *
As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's affirmed the ratings of The AES Corporation, including
its Ba3 Corporate Family Rating and the B1 rating on its senior
unsecured debt. Moody's said the rating outlook remains stable.
=========================
F R E N C H G U I A N A
=========================
DIGICEL: Acquiring Bouygues Telecom to Penetrate French Market
--------------------------------------------------------------
Digicel Group disclosed its intention to acquire Bouygues
Telecom Caraibe -- the wholly-owned subsidiary of Bouygues
Telecom with assets in Martinique, Guadeloupe and French Guiana.
The proposed acquisition is pending approval of both the
company's stakeholders and regulators, the Nation News reports.
"Digicel will be able to offer a portfolio of innovative
products to local customers and visitors throughout these French
West Indian territories, all supported by our top-rated customer
service and reliable coverage," Colm Delves, group chief
executive officer of Digicel said.
Once completed, the merger will allow Digicel to challenge
incumbent Orange Caraibe and a new market entrant -- ONLY.
Headquartered in Martinique, Bouygues Telecom Caraibe directly
employs approximately 80 people. With an established pre-paid
and post-paid customer base, it operates an advanced GSM network
that spans across Martinique, Guadeloupe and French Guiana.
Digicel currently employs more than 1,500 people throughout the
Caribbean and its investments in the region surpass US$1
billion.
Digicel Limited is a wireless services provider in the Caribbean
region founded in 2000, and controlled by Denis O'Brien. The
company started operations in Jamaica in April 2001 and now
offers GSM mobile services in 13 countries of the Caribbean
including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada,
Barbados, Cayman, and Curacao among others. Digicel finished
FY2005 with 1.722 million total subscribers -- 97% pre-paid --
estimated market share of 67% and revenues and EBITDA of US$478
million and US$155 million, respectively.
the jamaica observer
* * *
As reported on Mar. 10, 2006, Fitch affirmed the 'B' rating of
Digicel Limited, senior unsecured debt, including the US$300
million senior notes due 2012, following the announcement that
it is in the process of acquiring Bouygues Telecom Caraibe.
Fitch said the Outlook for the Ratings is Stable.
Based on the terms of the agreement, the acquisition is expected
to be entirely funded with additional senior debt and will
moderately increase leverage and subordination to the senior
note holders. Better than expected operating cash flow and
EBITDA performance during the fiscal year, support the
incremental debt leverage, which should remain consistent with
the current rating category. Any material changes to terms of
the acquisition could affect that rating level.
Fitch continues to expect improvements in financial leverage
over the next few years, although any additional future
acquisitions funded with debt could weaken the company's credit
quality.
The acquisition of BTC will improve the geographic
diversification, its revenue base, and moderately increase
operating EBITDA. Proforma to the acquisition, Digicel's fiscal
year 2007 aka FY2007 hard currency revenue mix is also expected
to increase.
BTC has operations in the French West Indies -- consisting of
Martinique, Guadeloupe, French Guiana, St. Barth and French St.
Martin, serving 160 thousand subscribers, 63% postpaid. BTC's
GSM network and spectrum licenses have enough capacity to grow
existing operations without additional material capital
expenditures. BTC's main competitor, Orange Caraibe, has
approximately 80% market share.
Digicel's ratings reflects its position as the leading provider
of wireless services in the Caribbean, its strong brand
recognition and growing portfolio of wireless assets, and its
manageable, yet high, financial leverage. Digicel benefits from
rapidly growing operating cash flow in its core operating
assets.
The company's operating cash flow is still concentrated in
Jamaica -- Digicel's largest market -- despite operating in a
diverse set of 13 Caribbean markets. Jamaica is by far the most
populated country from the ones which it currently delivers
services, accounting for 75% of subscribers.
With the recently acquired licenses in Trinidad and Haiti,
licensed pops now amount to slightly over 14 million.
For the first nine months of FY2006, Digicel Jamaica represented
69% and 83% of revenues and EBITDA, respectively. Jamaican
contribution to consolidated EBITDA should decrease to
approximately 60% to 65% by 2008, as newer operations start-up
and mature, primarily from its Trinidad & Tobago operation. The
ratings incorporate sovereign risks including transfer and
convertibility risks associated with investments in Jamaica.
Digicel's short operating history has been successful. The
company has rapidly gained leading market share in most of its
markets served by successfully executing a strategy of launching
operations with extensive initial geographic coverage, good
customer service, effective branding and strong product
offerings. This strategy has proved successful in turning
operations EBITDA positive in a short period of time and gaining
subscribers at a rapid pace. The company quickly gained leading
market share positions versus incumbent operators in most
markets it serves.
Digicel's market share range between 37% and 72% with an
aggregate market share of 67%; Digicel Jamaica's market share is
72%. Both the growth in existing islands and the subscribers
acquired via this transaction will drive Digicel's subscriber
numbers to, in excess of 2 million.
Wireless penetration level in most of Digicel's markets is high,
ranging between 45% and 90%. Aggregate estimated wireless
penetration in markets served is estimated to be approximately
71%. Penetration rates in the new markets of Martinique,
Guadeloupe and French Guiana averages 67%. High wireless
penetration rates are the result of low fixed-line penetration
levels, long waiting periods to get fixed-line connections, good
network coverage by wireless service providers, and substitution
of fix by mobile. The combination of Digicel's high market
shares and wireless penetration rates should result in more
moderate EBITDA growth than has been in the recent past.
Digicel is expected to maintain relatively high leverage and
debt levels after the completion of the proposed debt issuance,
consistent with the rating category.
Proforma consolidated total debt to EBITDA ratio should increase
approximately to between 3.5-4 times from slightly below 3
times. Better than expected operating performance and the
incorporation of BTC operations should partially offset increase
indebtedness related to the acquisition in order to meet Fitch
pre-acquisition expectations of leverage for FY2007 and FY2008.
Year-end FY2007 leverage is still expected to decrease between
2.5 times to 3 times, and below 2.5 times by the end of FY2008.
The company maintains good liquidity and debt service is
expected to be manageable.
The US$300 million senior notes will continue to be subordinated
to the senior secured bank debt after the completion of BTC's
acquisition. Structural subordination risks have been eliminated
through upstream guarantees from all of Digicel's existing 100%
owned operating companies.
DIGICEL: Bouygues Purchase Prompts Moody's to Hold Low-B Ratings
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Digicel Ltd.
including the B1 corporate family rating and the B3 senior
unsecured debt rating. The rating outlook remains positive.
This ratings action follows the announcement that the company
will purchase Bouygues Telecom Caraibe in an all-cash
transaction funded almost entirely by additional senior secured
bank debt.
Since Moody's assigned initial ratings to Digicel in July 2005,
the company has outperformed Moody's expectations with better
revenue and cash flow growth putting upward pressure on the
ratings. While the pending all debt-financed acquisition
dilutes Digicel's financial strength in the near term, Moody's
expects Digicel's credit metrics to resume their improvement
after the acquisition of BTC, such that the ratings are likely
to move higher within the next 18 to 24 months.
The acquisition of BTC will expand Digicel's wireless operations
into the French West Indies markets of Martinique, Guadeloupe
and French Guiana. Funds for the acquisition will come
primarily from expanding the company's existing senior secured
credit facilities that rank ahead of the rated senior notes.
This will increase near-term amortization requirements, limiting
financial flexibility. Pro forma for the acquisition of BTC,
Digicel will remain moderately leveraged, with total debt to pro
forma EBITDA of just over 3 times.
Moody's remains concerned that despite the low leverage as
measured by debt relative to EBITDA, the substantial
amortization requirements of the senior secured bank debt in the
company's capital structure reduces Digicel's financial
flexibility. In the fiscal year ending March 31, 2007,
scheduled amortization totals just under $60 million, climbing
to over $80 million in fiscal 2008. This large debt service
burden will keep fixed charge coverage close to 1 times.
Nonetheless, Moody's expects Digicel to continue to improve its
cash flows in order to comfortably meet these amortization
requirements.
Moody's perceives a high level of business risk for Digicel as
so much of the company's operations are located in developing
economies, and currency fluctuations could drive up the cost of
servicing US dollar denominated debt as the majority of the cash
flows are generated in Jamaican dollars. Therefore adverse
regulatory and economic developments in Digicel's operating
environments will likely have a negative rating impact.
For the ratings to move higher, Moody's must be confident that
Digicel can sustainably improve EBITDA margins above 40% and
free cash flow in excess of 7% of total debt. The ratings are
likely to face downward pressure should Digicel begin to lose
market share, if operational shortfalls reduce profitability, or
should the company make significant additional investments or
acquisitions that defer material free cash flow expansion.
Digicel is the largest provider of wireless telecommunications
in the Caribbean with over 1.8 million subscribers at Dec. 31,
2005.
=============
G R E N A D A
=============
* GRENADA: S&P Affirms B- Long-term Sovereign Credit Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' long-term and
'C' short-term sovereign credit ratings on Grenada. The outlook on
the long-term ratings remains stable.
The ratings on Grenada are constrained by large government debt,
which, at an estimated 118% of GDP in 2006 (98% of GDP on a net
basis), is one of the highest among the 110 sovereigns rated by
Standard & Poor's. The debt burden has been partly alleviated by
the restructuring completed in November 2005, which extended the
maturity of roughly US$261 million (or 44% of the total) in debt to
2025 and reduced the interest payment by more than half, to about
2.5% of GDP in 2006.
However, fiscal pressures remain high and fiscal flexibility is
limited. Expenditure needs are also pressing, reflecting
reconstruction activity in the wake of 2004's devastating Hurricane
Ivan and capital projects that must be implemented to sustain
Grenada's economic recovery. In particular, capital expenditure in
2005, standing at 16% of GDP, was over 50% higher than the average
spending rate over the past five years. At the same time, revenue
collection has been hampered by the slowdown in economic activity
and the remaining deficiencies of the tax system (i.e., reliance
upon import-based taxes and tax exemptions). The government is
therefore heavily dependent upon the continuous inflow of grants.
Donor support stood at 28% of government revenue and 11% of GDP in
2005, but will be lower in 2006. This, combined with continuing
high capital spending, will result in a deteriorating fiscal
performance. To keep fiscal deficits in check, the government has
introduced new revenue measures in the 2006 budget and is committed
to addressing structural weaknesses affecting the fiscal accounts.
The general government deficit is projected at 0.5% of GDP for 2006
(including 3.1% of the central government deficit and 2.6% of
social security surplus), compared to a 2.7% of GDP surplus in 2005
(including 0.3% central government deficit and 3% of social
security surplus).
Despite the prevailing high debt burden and challenging fiscal
situation, Standard & Poor's does not expect the sovereign to
reopen debt-restructuring negotiations with its commercial
creditors. There are two key factors behind the terms of the 2005
debt restructuring (i.e., no principal haircut). Since more than
60% of Grenada's external commercial debt is held by Caribbean
investors, the country has an inherent regional responsibility to
both ECCU members and to other Caribbean neighbors. In addition,
Caribbean investors have played an important role in developing
Grenada's economy, and will continue to do so. Therefore, given
the ensuing importance of these creditors in reviving the Grenadian
economy, both through further financial lending and foreign
investment, the likelihood of additional commercial debt
renegotiations is low.
Rebuilding the economy, which was destroyed in 2004, remains a
priority. The progress in revitalizing two main pillars of
Grenada's economy-agriculture and tourism-has been uneven. While
the tourism sector is on the rebound, with more hotels reopening
and under construction in anticipation of the 2007 World Cup
Cricket tournament, recovery of the agriculture sector will be more
difficult and prolonged. Overall, real GDP growth is expected to
increase to 6% in 2006 from 1.5% in 2005 and a 3% contraction in
2004. Medium-term economic growth is projected at 4%.
The stable outlook assumes that Grenada's government will remain
committed to a fiscal effort that will ultimately lead to the
reduction of the country's heavy debt burden. This has to be
supported by the ongoing economic restructuring, effective
government capital spending program, and rising private
investment-a scenario crucially dependent upon political
consensus. Without this, the ongoing and expected positive fiscal
and economic adjustment could be hampered. In this case, the
government's creditworthiness will be negatively affected.
=================
G U A T E M A L A
=================
BANCO INDUSTRIAL: Gets $40M from Cabei to Finance Occidente Buy
---------------------------------------------------------------
Guatemala's largest bank, Banco Industrial S.A., has obtained a
US$40 million loan from Honduras-based development bank, Central
American Bank of Economic Integration, to finance a portion of
its acquisition of Banco Occidente, Business News Americas
reports.
In February, Banco Industrial requested regulatory approval to
acquire Banco de Occidente for an undisclosed amount.
According to Business News, Banco Industrial will have a 25%
market share and more than 22.2 billion quetzales (US$2.9
billion) in assets after the deal closes, while parent company
Corporacion BI will have over US$3.7 billion in assets. The
transaction is expected to close this month.
The acquisition will also give Banco Industrial a big lead over
its closest rival Banco G&T Continental, which has a 15% market
share by assets, Business News says.
Banco Industrial has a US$72.3 million credit line with Cabei.
* * *
On March 20, 2006, Moody's Ratings Services affirmed Banco
Industrial S.A.'s 'D' bank financial strength rating.
Moody's affirmed the ratings of Banco Industrial following the
Guatemalan bank's announcement that its shareholders have
entered into an agreement with the controlling shareholders of
Banco de Occidente aka Occidente to acquire a majority stake in
Occidente, the fifth largest bank in the system. The
transaction is still pending approval from the Guatemalan
banking regulator. The expected closing date of the transaction
is March 31, 2006.
Moody's also affirmed Industrial's 'Baa2' and Prime-3 long and
short term global local currency deposit ratings, respectively,
and its 'Ba3' and Not Prime long and short term foreign currency
deposit ratings. All the ratings have stable outlooks.
Moody's said that the goodwill and debt arising from the
transaction would put pressure on the bank's capitalization and
would require the strong support of its shareholders. The
affirmation of Industrial's D bank financial strength rating aka
BFSR, which is a measure of the bank's intrinsic
creditworthiness and solvency, is however based on the
understanding that the acquisition will be financed primarily
with equity or equity-like capital. The combined entity is
expected to maintain risk-weighted capital levels at or above
Industrial's historical levels.
The merger with Occidente would add about five percentage points
to Industrial's current asset market share of 20% to 25%,
cementing its position as the largest bank by far, as well as
substantially enhancing its position in the western part of
Guatemala. Occidente also brings with it a relatively low cost,
sticky deposit base and a solid balance sheet.
The acquisition should strengthen Industrial's already solid
franchise and bolster its potential for earnings growth,
geographic diversification, and further scale economies.
Moody's views these factors as the principal drivers behind
Industrial's ratings.
Because of the in-market nature of the acquisition, the expected
synergies and cost savings from the merger should also help
cushion the effect of unforeseen integration and credit costs on
the bank's liquidity and capital, said Moody's.
Customer attrition, particularly the potential loss of deposit
funding, could also affect the liquidity of the combined
operation. Moody's views this risk to be moderate, as both
Industrial's and Occidente's brand value with Guatemalan
companies and individuals is very strong. The combined
operation should therefore become a more competitive force in
providing the range of corporate and retail banking services.
Moody's said it would continue to monitor the tangible effects
of the acquisition once regulatory approvals have been received
and the acquisition has been completed. The agency noted that
deterioration of risk-weighted capital levels; asset quality or
liquidity metrics could result in negative pressure on the bank
financial strength rating.
Supporting Industrial's 'Baa2' long term global local currency
deposit rating is Moody's view that as the dominant deposit
taking institution, and because of the Guatemalan financial
system's moderate dollarization, Industrial would have high
access to institutional support for its local currency deposits
in a situation of high stress, in order to ensure a smooth
functioning of the local payments system.
Moody's warned, however, that increasing dollarization of
Industrial's balance sheet would raise its vulnerability to
credit risk and currency fluctuations, with the potential for
downward pressure on the global local currency rating.
Banco Industrial S.A. was the largest bank in Guatemala in terms
of deposits and loans as of December 31, 2005 with consolidated
assets of approximately $3 billion and equity of $212 million.
Banco de Occidente, S.A. was the fifth largest bank in terms of
loans and sixth largest in deposits with unconsolidated assets
of $586 million and equity of $60 million.
=====================
P U E R T O R I C O
=====================
DORAL FINANCIAL: Inks Consent Orders With Banking Regulators
------------------------------------------------------------
Doral Financial Corporation (NYSE: DRL) and its principal Puerto
Rico banking subsidiary, Doral Bank, entered into consent orders
with the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation and the Commissioner of
Financial Institutions of Puerto Rico. Doral Bank, FSB, Doral
Financial's New York City based thrift institution, is not a
party to the consent orders.
The orders arise out of the previously disclosed restatement of
Doral Financial's financial statements to correct the accounting
for certain mortgage loan sale transactions and the valuation of
the Company's interest only strips. On Feb. 27, 2006, Doral
Financial filed its audited restated financial statements for
the 2000-2004 periods as part of its related Form 10K/A.
Under the terms of the consent orders, Doral Financial, Doral
Bank and the respective regulatory agencies recognize that Doral
Financial and Doral Bank neither admit nor deny any unsafe and
unsound banking practices. The mutually agreed upon orders
require Doral Financial and Doral Bank to conduct reviews of
their mortgage portfolios, and submit plans regarding the
maintenance of capital adequacy and liquidity. No fines or
monetary penalties were assessed against Doral Financial or
Doral Bank under the orders. The Company stated that Doral
Financial and each of its banking subsidiaries expect to remain
"well-capitalized" under applicable regulatory capital
guidelines as of Dec. 31, 2005.
Under the terms of the consent order with the FDIC and the
Commissioner, Doral Bank may not pay a dividend or extend credit
to, or enter into certain asset purchase and sale transactions
with Doral Financial or its subsidiaries, without the prior
consent of the FDIC and the Commissioner. Since its acquisition
by Doral Financial, Doral Bank has never paid a dividend to
Doral Financial.
The consent order with the Federal Reserve contains similar
restrictions on Doral Financial from obtaining extensions of
credit from, or entering into certain asset purchase and sale
transactions with, Doral Bank, without the prior approval of the
Federal Reserve. The consent order also restricts Doral
Financial from paying dividends on its capital stock without the
prior written approval of the Federal Reserve. Doral Financial
is required to request permission for the payment of dividends
on its common stock and preferred stock not less than 30 days
(five days in the case of the first request following the
effective date of the order) prior to a proposed dividend
declaration date.
"These orders, with which Doral Financial and Doral Bank have
agreed, reflect sound practices, policies and procedures," John
A. Ward III, the Company's Chairman and Chief Executive Officer,
said. "Doral is committed to taking all initiatives necessary
by our regulators to assure that it has in place the appropriate
procedures and controls from both business and regulatory
perspectives. We are pleased to acknowledge that many of the
requirements outlined in the orders are already underway."
A full-text copy of the consent orders is available at no charge
at http://ResearchArchives.com/t/s?6af
About Doral Financial Corporation
Doral Financial Corporation -- http://www.doralfinancial.com/
-- a financial holding company, is the largest residential
mortgage lender in Puerto Rico, and the parent company of Doral
Bank, a Puerto Rico based commercial bank, Doral Securities, a
Puerto Rico based investment banking and institutional brokerage
firm, Doral Insurance Agency, Inc. and Doral Bank FSB, a federal
savings bank based in New York City.
Doral Financial Corporation's 7.65% Senior Notes due 2016 carry
Moody's Investor's Service's Ba3 rating and Standard & Poor's
BB- rating.
DORAL FIN'L: Consent Orders Cue Fitch to Keep Rating on Watch
-------------------------------------------------------------
The ratings for Doral Financial Corporation and its subsidiary
bank, Doral Bank remains on Rating Watch Negative by Fitch
Ratings.
Doral announced that it and its principal Puerto Rico banking
subsidiary, Doral Bank, have entered into consent orders with
the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation and the Commissioner of
Financial Institutions of Puerto Rico. Under the terms of the
consent order, Doral Bank may not pay a dividend or extend
credit to, or enter into certain asset purchase and sale
transactions with Doral Financial or its subsidiaries, without
the prior consent of the FDIC and the Commissioner. The consent
order with the Federal Reserve contains similar restrictions on
Doral Financial from obtaining extensions of credit from, or
entering into certain asset purchase and sale transactions with,
Doral Bank, without the prior approval of the Federal Reserve.
Additionally, the company is required to engage an independent
party to review their mortgage loan portfolios and develop a
written plan to address the findings of the review.
Fitch's rating actions for Doral in 2005 incorporated the fact
that Fitch believed Doral was operating under closer regulatory
scrutiny. Fitch views the emergence of the formal regulatory
agreements as documenting and detailing the regulatory
restrictions that it has been operating under since the
emergence of its accounting and related problems in early 2005.
Although dividend payments and sales transactions must be
approved by the regulators, no absolute restrictions have been
placed on Doral.
In addition, Doral Financial has not been reliant on dividends
from Doral Bank to service holding company obligations. Doral
has made progress in filing restatements as seen by the recent
issuing of audited financials through Dec. 31, 2004 and is
currently addressing many of the internal control issues.
Also, Fitch believes Doral is making progress toward fully
addressing the transactions that had been previously classified
as loan sales and are now accounted for as secured borrowings.
Doral is expected to continue to remain well capitalized through
this process. Fitch believes the regulatory oversight will
expedite Doral's restatement process and quicken their return to
a normal operating environment.
These ratings remain on Rating Watch Negative by Fitch:
Doral Financial Corporation
-- L-T Issuer Default Rating 'BB-';
-- Short-term 'B';
-- Senior Unsecured 'BB-';
-- Preferred Stock 'B'
-- Individual 'D';
-- Support '5'.
Doral Bank
-- L-T Issuer Default Rating 'BB';
-- Short-term 'B';
-- Individual 'C/D';
-- Support '5'.
-- Long-term deposits 'BB+';
-- Short-term deposits 'B'.
FIRST BANCORP: Fitch Affirms Low-B Negative Rating Outlook
----------------------------------------------------------
Fitch Ratings has affirmed the ratings and Outlook for First
Bancorp and FirstBank Puerto Rico: long-term Issuer Default
Rating 'BB'/short-term 'B'. The Rating Outlook remains
Negative.
This rating action follows FBP's announcement that it entered
into a formal agreement with the banking regulators. The
agreement consents to a Cease and Desist Order relating to
mortgage transactions with Doral Financial and R&G Financial
Corporation. In addition to restricting activity with these two
organizations, FBP will be required to take a number of actions
including the submission of a capital and liquidity contingency
plan, engaging an independent party to review its mortgage
portfolios, and providing notice prior to engaging in any debt
or capital related activity. The order also requires the bank
to obtain regulatory approval prior to paying dividends after
those payable in March.
Fitch expected that the degree and nature of the accounting and
internal control issues would likely introduce some form of
regulatory action when FBP's ratings were lowered on Oct. 24,
2005. While regulators will now be required to approve all bank
and corporate dividends, there are no predetermined limits on
dividends, no restrictions on types of funding (including
brokered deposits), and no excess requirements on capital.
There are also no restrictions on other activities that would
affect daily operations. The lack of overly restrictive terms
is currently viewed by Fitch as a positive. However, FBP's
ability to navigate a proper course of corrective action within
the confines of a regulatory agreement does present a challenge
that Fitch will be monitoring closely.
The requirements outlined in the agreement are viewed as
formalizing the regulatory restrictions FBP has been operating
under since its accounting issues emerged last year. Further,
Fitch believes the regulatory agreement provides FBP with
constructive guidance to address its recent problems. Fitch
believes that FBP and the other financial institutions are
already working on implementing corrective actions, particularly
toward reducing exposure to Doral and R&G. Fitch also views the
$110 million capital infusion from the holding company to the
bank as a proactive step in maintaining an appropriate level of
capital at the bank without creating additional debt service
needs at the holding company.
Resolution of the Negative Outlook will focus on the near-term
challenges of managing through the accounting, funding and
financial aspects related to the mortgage transactions. A
return to a Stable Rating Outlook will likely not precede the
conclusion of the audited financials, SEC investigation, and
regulatory agreements, and will require a period of steady state
performance.
These ratings are affirmed with a Negative Outlook:
First BanCorp
-- Long-term IDR at 'BB';
-- Short-term at 'B';
-- Individual at 'C/D';
-- Support '5'.
FirstBank Puerto Rico
-- Long-term IDR at 'BB';
-- Long-term deposit obligations at 'BB+';
-- Short-term deposit obligations at 'B';
-- Short-term at 'B';
-- Individual at 'C/D';
-- Support at '5'.
G+G RETAIL: Court Sets General Claims Bar Date for May 15
---------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York, set May 15, 2006, at 5:00 p.m. as the deadline for all
creditors owed money by G+G Retail, Inc. on account of claims
arising prior to Jan. 25, 2006, to file their proofs of claim.
Creditors must file written proofs of claim on or before the May
15 claims bar date and those forms must be delivered to:
If by overnight courier or hand delivery:
United States Bankruptcy Court
Southern District of New York
G+G Retail, Inc., Claims Processing
Alexander Hamilton Custom House
One Bowling Green
New York, NY 10004-1408
If by standard mail (including U.S. Express mail):
G+G Retail, Inc., Claims Processing
P.O. Box #5047
Bowling Green Station
New York, NY 10274-5047
The claims bar date for for governmental units is set for July
24, 2006.
Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor
filed for Chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura
Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.
Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
assets of more than $100 million and debts between $10 million
to $50 million.
MUSICLAND HOLDING: Panel Taps Donlin Recano as Information Agent
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Musicland
Holding Corp. and its debtor-affiliates seeks the U.S.
Bankruptcy Court for the Southern District of New York's
authority to retain Donlin, Recano & Company, Inc., as its
information agent, nunc pro tunc to February 9, 2006.
Curtis Roberts, co-chairman of the Creditors Committee, states
that the retention of Donlin Recano to assist the Committee in
complying with its obligation under Section 1102(b)(3) of the
Bankruptcy Code will add to the efficiency and reduce the
overall expense of administering the Debtors' Chapter 11 cases.
As an information agent, Donlin Recano will:
(a) provide access to information for the Committee's
constituents through web-based technology developed by
Donlin Recano, which include certain information:
* General case information including case docket, access
to docket filings, composition of the Committee, their
counsel, and the date, place and time of Section 341
meeting;
* Answers to frequently asked questions, discussing a
general overview of the chapter 11 process, the role
of the Committee, the responsibility of committee
members, and the filing of a proof of claim;
* Committee reports section providing monthly operating
reports filed by the debtor and monthly Committee
written reports summarizing recent proceedings, events
and public financial information;
* A password protected confidential information access
section whereby creditors who have executed a
confidentiality agreement may retrieve confidential
information;
* case calendar section which will include case matters
of relevance to the unsecured creditors;
* section providing the creditor the ability to e-mail a
question and receive a response;
* Press releases issued by each of the Committee and the
Debtors;
* Highlights of significant events in the cases;
* Links to other relevant Web sites; and
* Any other information to be posted at the direction of
the Court, the Committee or its counsel.
(b) solicit and receive comments from unsecured creditors
through the Committee Web site and the ability of the
creditors to e-mail comments and questions;
(c) establish and maintain a telephone number & call center
for unsecured creditors to call with questions;
(d) provide notice to the unsecured creditors as to the
existence of the Committee Web site; and
(e) provide other services as required by the Court, the
Committee or its counsel to assist the Committee in
complying with the requirements of Section 1102(b)(3) of
the Bankruptcy Code.
The Committee believes that Donlin Recano is particularly well-
suited to perform those tasks because it is a data-processing
firm whose principals and senior staff have more than 15 years
of in-depth experience in performing noticing, Web site services
and other administrative tasks in large complex Chapter 11
cases.
The Debtors will pay Donlin Recano for its services in these
amounts:
Category Amount
-------- ------
Monthly Base Fee $150 per month
Posting Documents to Web site $50 per document
Web site Maintenance and Monitoring $115 - $250 per hour
Data Entry $35 per hour
Imaging/Storage $0.18 per image
Facsimile Noticing $0.12 per page
Photocopying & Laser Printing $0.10 per page
E-mail Transmission (attachments only) $0.015 per kilobyte
Out-of-Pocket Expenses At Cost
Louis A. Recano, a principal at Donlin Recano, assures the Court
that the firm and its employees are "disinterested persons" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Donlin Recano has no adverse interests in the Committee or the
Debtors' estates.
Headquartered in New York, New York, Musicland Holding Corp., is
a specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000)
OCA, INC.: List of the Debtors' 30-Largest Unsecured Creditors
--------------------------------------------------------------
OCA, Inc., and its dozens of debtor-affiliates delivered a
consolidated list of their 30-largest unsecured creditors to the
United States Bankruptcy Court for the Eastern District of
Louisiana. This list is prepared in accordance with Rule
1007(d) of the Federal Rules of Bankruptcy Procedure. The list
does not include (1) persons who come within the definition of
"insider" set forth in 11 U.S.C. Sec. 101, or (2) secured
creditors unless the value of the collateral is such that the
unsecured deficiency places the creditor among the holders of
the 30 largest unsecured claims.
Creditor Claim Amount
-------- ------------
Applied Discovery, Inc.
13427 NE 16th St., Suite 200
Bellevue, WA 98005
Fax: 1-425-467-3010 $596,771.94
Navigant Consulting, Inc.
4511 Paysphere Circle
Chicago, IL 60674
Fax: 1-312-573-5678 $538,621.13
BV & K Direct
P.O. Box 78189
Milwaukee, WI 53278-0189
Fax: 1-602-867-3966 $524,832.17
American Orthodontics
1714 Cambridge Ave.
Sheboygan, MI 53082-1048
Fax: 1-800-558-5633 $192,839.90
Ormco
P.O. Box 51885
Los Angeles, CA 95001-6185
Fax: 1-800-317-6012 $147,271.60
Rogers Towers
Attorneys At Law
1301 Riverplace Blvd., Suite 1500
Jacksonville, FL 32207
Fax: 1-904-396-0663 $125,567.86
Meckler Bulger & Tilson, LLP
123 North Wacker Dr., Suite 1800
Chicago, IL 60606
Fax: 1-312-474-7898 $123,103.13
Spencer Mead
865 Merrick Avenue
Westbury, NY 11590
Fax: 1-800-400-2029 $113,904.51
Buckley King
1400 Bank One Center
Cleveland, OH 44114-2652
Fax: 1-216-579-1020 $94,065.58
Jones Walker
Attn: Accounting
8555 United Plaza Blvd.
Baton Rouge, LA 70809
Fax: 1-225-248-2010 $89,789.88
Levine, Hirsch, Segall, Mackenzie & Friedsam
100 S. Ashley Dr., #1600
Tampa, FL 33602
Fax: 1-813-229-7210 $77,411.93
Align Technology, Inc.
P.O. Box 49265
San Jose, CA 95161-9265
Fax: 1-877-651-7128 $74,929.61
Unitek Corporation
Attn: Kelli Tencate-A/R Dept.
File # 56561
2724 South Peck Rd.
Monrovia, CA 91016
Fax: 1-800-400-2029 $71,298.50
Henry Schein Inc
Attn: Timothy Ingoglia, M-393
135 Duryea Road
Melville, NY 11747-3834
Fax: 1-800-704-2380 $60,234.38
Wilke, Fleury, Hoffelt, Gould & Birney, LLP
400 Capitol Mall, 22nd Floor
Sacramento, CA 95814-4416
Fax: 1-916-442-6664 $55,303.72
Stichter, Riedel, Blain & Prosser, Pa
110 East Madison St., Suite 200
Tampa, FL 33602
Fax: 1-813-229-1811 $55,045.95
Callaway Partners, LLC
7000 Central Parkway, Suite 1660
Atlanta, GA 30328
Fax: 1-770-730-0903 $45,291.68
CDW Direct, LLC
P.O. Box 75723
Chicago, IL 60675-5723
Fax: 1-312-705-0651 $44,771.21
Owens, Clary, Aiken, LLP
700 North Pearl St., Suite 1600
Dallas, TX 75201
Fax: 1-214-698-2121 $42,591.30
Boundas Skarzynski Walsh & Black, LLC
200 East Randolph Dr., Suite 7200
Chicago, IL 60601
Fax: 1-312-946-4272 $37,405.27
WSB-TV
P.O. Box 102198
Annex 68
Atlanta, GA 30368
Fax: 1-404-897-6444 $30,770.00
Standard and Poor's
2542 Collection Center Drive
Chicago, IL 60693
Fax: 1-713-237-5399 $30,584.00
Steven J. Solomon
Adorno & Yoss
2525 Ponce De Leon Blvd., Suite 400
Coral Gables, FL 33134
Fax: 1-305-460-1422 $29,624.80
Ortho Technology
P.O. Box 48077
Tampa, FL 33647-0118
Fax: 1-813-991-5986 $22,640.43
Ernst & Young, LLP
701 Poydras Street, 39th Floor
New Orleans, LA 70139
Fax: 1-504-596-4233 $20,330.00
Office Depot
P.O. Box 633211
Cincinnati, OH 45263-3211
Fax: 1-800-342-1062 $19,515.59
WFLA-TV 8
Remittance Processing Center
P.O. Box 26425
Richmond, VA 23260-6425
Fax: 1-813-221-5787 $17,340.00
Alverson, Taylor, Mortensen & Sanders
7401 West Charleston Blvd.
Las Vegas NV 89117-1401
Fax: 1-702-385-7000 $17,289.95
WXIA-TV
1611 West Peachtree St NE
Atlanta GA 30309-0000
Fax: 1-404-881-0493 $16,320.00
KING-TV 5
Dept 890933
P.O. Box 120933
Dallas TX 75312-0933
Fax: 1-206-448-3697 $15,810.00
R&G FINANCIAL: Fitch Puts Ratings on Rating Watch Negative
-------------------------------------------------------------
The ratings for R&G Financial Corporation and its two subsidiary
banks remain on Rating Watch Negative by Fitch.
RGF announced that it and its principal Puerto Rico banking
subsidiary, R-G Premier Bank of Puerto Rico, have entered into
consent orders with bank regulators. Among some of the terms,
the consent order requires that the company submit a capital and
liquidity contingency plan and engage a third party to review
its mortgage loans. In addition, the company may not pay a
dividend or extend credit to, or enter into certain asset
purchase and sale transactions with its subsidiaries, without
the prior consent of the regulators. These recent regulatory
agreements come on the heels of similar regulatory restrictions
for RGF's Florida-based bank, R-G Crown Bank, which were
formalized via an agreement put in place by the Office of Thrift
Supervision.
Fitch's rating actions for RGF in 2005 incorporated the fact
that Fitch believed RGF was operating under closer regulatory
scrutiny. Fitch views the emergence of the formal regulatory
agreements as documenting and detailing the regulatory
restrictions that RGF has been operating under since the
emergence of its accounting and related problems in early 2005.
RGF is in the process of correcting many of the internal control
and accounting issues highlighted by the regulators. Although
dividend payments and sales transactions must be approved by the
regulators, no absolute restrictions have been placed on RGF.
RGF is expected to continue to remain well capitalized. Fitch
believes the regulators' oversight will expedite RGF's
restatement process and quicken its return to a normal operating
environment.
R&G Financial Corporation
-- Long-term Issuer Default Rating 'BBB-';
-- Preferred stock 'BB';
-- Individual 'C';
-- Support '5'.
R&G Mortgage
-- L-T IDR 'BBB-'.
R-G Premier Bank
-- L-T IDR 'BBB-';
-- Short-term 'F3';
-- Individual 'C';
-- Support '5';
-- L-T deposit obligations 'BBB';
-- S-T deposit obligations 'F2'.
R-G Crown Bank
-- L-T IDR 'BBB-';
-- Short-term 'F3';
-- Individual 'C';
-- Support '5';
-- L-T deposit obligations 'BBB'.
=================================
T R I N I D A D & T O B A G O
=================================
DIGICEL: Unable to Ink Interconnection Pact with TSTT
-----------------------------------------------------
Digicel Limited has yet to agree with Telecommunication Services
of Trinidad and Tobago for an interconnection rate despite
months of negotiations mediated by the Telecommunications
Authoriyt of Trinidad and Tobago, the Trinidad & Tobago Express
reports.
TATT said that the matter has been referred to an arbitration
committee in accordance with dispute resolution proceedings,
following a lengthy meeting between stakeholders TSTT and
Digicel and their legal representatives, the T&T Express
relates. Due to confidentiality clauses governing the process,
TATT representatives would say only that the move was taken by
Digicel because of commercial issues related to interconnection
between Digicel and TSTT.
The arbitration team consists of Rory Mc Millan, a UK-based
lawyer who also practises in the US and Canada, economist and
TATT director Dr. Ronald Ramkissoon and TATT director Dr. Shahid
Hussain.
The panel has a maximum of three months to finalise the
arbitration process.
Digicel said in January that it is losing millions as a result
of the interconnection delay. It was first hoping for
interconnection to be achieved by November 30, 2005.
TSTT has maintained that all interconnection equipment should be
installed by March 31, 2006, in keeping with the schedule given
to the company by Nortel, the T&T Express relates.
Digicel Limited is a wireless services provider in the Caribbean
region founded in 2000, and controlled by Denis O'Brien. The
company started operations in Jamaica in April 2001 and now
offers GSM mobile services in 13 countries of the Caribbean
including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada,
Barbados, Cayman, and Curacao among others. Digicel finished
FY2005 with 1.722 million total subscribers -- 97% pre-paid --
estimated market share of 67% and revenues and EBITDA of US$478
million and US$155 million, respectively.
* * *
On Mar. 10, 2006, Fitch affirmed the 'B' rating of Digicel
Limited, senior unsecured debt, including the US$300 million
senior notes due 2012, following the announcement that it is in
the process of acquiring Bouygues Telecom Caraibe. Fitch said
the Outlook for the Ratings is Stable.
Based on the terms of the agreement, the acquisition is expected
to be entirely funded with additional senior debt and will
moderately increase leverage and subordination to the senior
note holders. Better than expected operating cash flow and
EBITDA performance during the fiscal year, support the
incremental debt leverage, which should remain consistent with
the current rating category. Any material changes to terms of
the acquisition could affect that rating level.
Fitch continues to expect improvements in financial leverage
over the next few years, although any additional future
acquisitions funded with debt could weaken the company's credit
quality.
The acquisition of BTC will improve the geographic
diversification, its revenue base, and moderately increase
operating EBITDA. Proforma to the acquisition, Digicel's fiscal
year 2007 aka FY2007 hard currency revenue mix is also expected
to increase.
BTC has operations in the French West Indies -- consisting of
Martinique, Guadeloupe, French Guiana, St. Barth and French St.
Martin, serving 160 thousand subscribers, 63% postpaid. BTC's
GSM network and spectrum licenses have enough capacity to grow
existing operations without additional material capital
expenditures. BTC's main competitor, Orange Caraibe, has
approximately 80% market share.
Digicel's ratings reflects its position as the leading provider
of wireless services in the Caribbean, its strong brand
recognition and growing portfolio of wireless assets, and its
manageable, yet high, financial leverage. Digicel benefits from
rapidly growing operating cash flow in its core operating
assets.
The company's operating cash flow is still concentrated in
Jamaica -- Digicel's largest market -- despite operating in a
diverse set of 13 Caribbean markets. Jamaica is by far the most
populated country from the ones which it currently delivers
services, accounting for 75% of subscribers.
With the recently acquired licenses in Trinidad and Haiti,
licensed pops now amount to slightly over 14 million.
For the first nine months of FY2006, Digicel Jamaica represented
69% and 83% of revenues and EBITDA, respectively. Jamaican
contribution to consolidated EBITDA should decrease to
approximately 60% to 65% by 2008, as newer operations start-up
and mature, primarily from its Trinidad & Tobago operation. The
ratings incorporate sovereign risks including transfer and
convertibility risks associated with investments in Jamaica.
Digicel's short operating history has been successful. The
company has rapidly gained leading market share in most of its
markets served by successfully executing a strategy of launching
operations with extensive initial geographic coverage, good
customer service, effective branding and strong product
offerings. This strategy has proved successful in turning
operations EBITDA positive in a short period of time and gaining
subscribers at a rapid pace. The company quickly gained leading
market share positions versus incumbent operators in most
markets it serves.
Digicel's market share range between 37% and 72% with an
aggregate market share of 67%; Digicel Jamaica's market share is
72%. Both the growth in existing islands and the subscribers
acquired via this transaction will drive Digicel's subscriber
numbers to, in excess of 2 million.
Wireless penetration level in most of Digicel's markets is high,
ranging between 45% and 90%. Aggregate estimated wireless
penetration in markets served is estimated to be approximately
71%. Penetration rates in the new markets of Martinique,
Guadeloupe and French Guiana averages 67%. High wireless
penetration rates are the result of low fixed-line penetration
levels, long waiting periods to get fixed-line connections, good
network coverage by wireless service providers, and substitution
of fix by mobile. The combination of Digicel's high market
shares and wireless penetration rates should result in more
moderate EBITDA growth than has been in the recent past.
Digicel is expected to maintain relatively high leverage and
debt levels after the completion of the proposed debt issuance,
consistent with the rating category.
Proforma consolidated total debt to EBITDA ratio should increase
approximately to between 3.5-4 times from slightly below 3
times. Better than expected operating performance and the
incorporation of BTC operations should partially offset increase
indebtedness related to the acquisition in order to meet Fitch
pre-acquisition expectations of leverage for FY2007 and FY2008.
Year-end FY2007 leverage is still expected to decrease between
2.5 times to 3 times, and below 2.5 times by the end of FY2008.
The company maintains good liquidity and debt service is
expected to be manageable.
The US$300 million senior notes will continue to be subordinated
to the senior secured bank debt after the completion of BTC's
acquisition. Structural subordination risks have been eliminated
through upstream guarantees from all of Digicel's existing 100%
owned operating companies.
=============
U R U G U A Y
=============
* URUGUAY: Inks Twelve Free Trade Agreements with Venezuela
-----------------------------------------------------------
The Presidents of Uruguay and Venezuela, Tabare Vazquez and Hugo
Chavez, respectively, signed 12 trade agreements last week.
One of the trade pact highlights is the purchase of Venezuela's
state-owned holding Petroleo de Venezuela aka Pdvsa of 50% stake
of Uruguayan state oil firm Ancap in its Argentine branch
Petrolera del Cono Sur, El Universal reports.
Furthermore, the two presidents signed:
-- two deals providing for the supply of Uruguayan goods to
the Venezuelan Guayana Corporation;
-- one agreement with the Housing Ministry for the
construction of dwellings, and
-- one deal under which Venezuelan state bank Bandes
purchased Uruguayan cooperative Cofac.
Venezuela and Uruguay also inked:
-- technological cooperation pact,
-- healthcare programs agreement,
-- a letter of intent between Venezuelan airline Conviasa and
Uruguayan carrier Pluna, and
-- a deal for development of joint satellite programs.
Rarael Ramirez, Pdvsa president and Venezuela's Energy and
Petroleum minister, told El Universal that the purchase of a 50%
stake in Petrolera del Sur requires a US$15 million investment.
This deal will give Pdvsa a stake in some 150 gas stations in
Argentina.
As for Cofac, Bandes told El Universal that the operation
involves a US$10 million trust for the value of assets and
liabilities, in addition to the "capital necessary to ensure a
healthy operation of the new institution."
* * *
Fitch Ratings assigns these ratings on Uruguay:
Rating Rating Date
------ -----------
Country Ceiling BB- Mar. 7, 2005
Long Term IDR B+ Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB- Mar. 7, 2005
Venezuela's foreign currency long-term debt is rated B2 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* * *
On Nov. 29, 2005, Fitch Ratings assigned expected 'BB-' ratings
to the pending issues of Venezuelan government bonds maturing
Feb. 26, 2016, and Dec. 9, 2020. The 2016 bond has a 5.75%
fixed coupon and the 2020 bond has a 6% fixed coupon. The bonds
are being marketed in Venezuela to be purchased in local
currency at the official exchange rate but under New York law,
with all coupon and principal payments in U.S. dollars.
Venezuela's sovereign ratings are supported by superior
international liquidity and low external financing
requirements relative to similarly rated sovereigns. The
ratings are constrained by vulnerability to external shocks
because of oil dependency; diminished capacity of the private
sector to absorb shocks because of heavy government
intervention in the productive sector; recent spending
increases that reduce fiscal flexibility; and concerns about
the rule of law and potential political instability. Fitch said
the Rating Outlook is Stable.
* URUGUAY: Fitch Rates US$500 Mil. Global Bonds Due 2036 at B+
--------------------------------------------------------------
Fitch Ratings has assigned a 'B+' rating to Uruguay's US$500
million in global bonds due in 2036. Proceeds from the bond issue
will be used for general budgetary purposes. The Rating Outlook is
Stable.
Uruguay's sovereign ratings reflect its improving debt dynamics
underpinned by currency strength, economic growth, and fiscal
prudence. On the other hand, public and external debt ratios are
still higher than peers, concerns about long-term economic growth
persist, and the highly dollarized financial system remains
vulnerable.
=================
V E N E Z U E L A
=================
EDC: Posts US$78.2 Million Earnings in 2005
-------------------------------------------
Electricidad de Caracas aka EDC's 2005 earnings increased to
$78.2 million from 2004's $6.2 million after it a 96% reduction
in its financing costs, the company said in a statement.
Business News Americas relates that EDC reported earnings of $35
million for the fourth quarter of 2005, about 3.2% higher than
that of 2004.
The company's 2005 EBITDA -- earnings before interest, taxes,
depreciation and amortization -- dropped 9% from a year earlier
to around $315 million, states Business News.
EDC revealed that its 2005 financing costs were $109.9 million
lower than that of 2004. The company said it was due to early
payment of external debt obligations, Business News reports.
EDC is a vertically integrated utility in Venezuela, operating
in electricity distribution, transmission, and generation in the
capital city of Caracas and its metropolitan area. It is the
largest private electric utility in the country and is owned by
US-based AES Corp. (B+/Positive/--). S&P does not expect the
support from the parent company to be a meaningful credit factor
for EDC.
* * *
On Feb 9, 2006, Standard & Poor's Ratings Services affirmed its
'B' long-term corporate credit rating on C.A. La Electricidad de
Caracas aka EDC and its 'B' rating on Electricidad de Caracas
Finance B.V.'s $260 million senior unsecured notes. S&P said
the outlook is stable.
On Feb. 3, 2006, S&P raised the long-term local and foreign
currency sovereign credit ratings on the Bolivarian Republic of
Venezuela to 'BB-' from 'B+'. The decision to raise the ratings
on Venezuela was supported by the continued sharp improvements
in Venezuela's external indicators, which are attributable to a
large current account surplus, a high level of international
reserves, and lower external debt in addition to buoyant
economic growth and the potential buyback of external debt.
PETROLEO BRASILEIRO: Seeks New Natural Gas Projects in Venezuela
----------------------------------------------------------------
Petroleo Brasileiro S.A. aka Petrobas -- an oil firm run by the
state of Brazil -- wants to participate in further natural gas
projects in Venezuela with the state run firm Petroleos de
Venezuela aka PDVSA, Dow Jones Newswires reports.
According to Dow Jones, Petrobras' Gas and Energy Director Ildo
Sauer revealed on Wednesday that Petrobras has expectations and
interest to participate in further gas projects in Venezuela.
"As far as this depends on Petrobras, we will participate," Mr.
Sauer said told Dow Jones. He added that the company will
analyze possible new projects with care and interest.
Any future joint projects between the two companies depend
mainly on PDVSA's interest to have Petrobras as a partner, Mr.
Sauer told Dow Jones.
"If you want to go to a party, you need to be invited. But I
can tell that the relationship between Petrobras and PDVSA is at
a level of excellent cooperation," the Gas and Energy Director
explained to Dow Jones.
Dow Jones says that an initial agreement between PDVSA and
Petrobras was signed in September to cooperatively develop the
Mariscal Sucre gas project. The agreement was estimated to need
an investment of $2.2 billion.
Petrobas said in September that the development of the fields of
Mejillones, Patao and Dragon was one of the agenda in the
preliminary agreement of the Mariscul Sucre project, Dow Jones
relates. The fields have combined reserves of 11 trillion cubic
feet. A final deal on the project is still outstanding.
The pre-agreement between Petrobas and PDVSA began after the
announced non-participation of the Royal Dutch Shell in the
Mariscal Sucre project in August. Shell and Venezuela had been
in talks for three years about the project.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro
S.A. aka Petrobras was founded in 1953. The company explores,
produces, refines, transports, markets, distributes oil and
natural gas and power to various wholesale customers and retail
distributors in the country.
* * *
Petroleo Brasileiro SA's long-term corporate family rating is
rate Ba3 by Moody's and its foreign currency long-term debt is
rated BB- by Fitch.
* * *
Fitch assigns these ratings to Petroleo Brasileiro's senior
unsecured notes:
Maturity Date Amount Rate Ratings
_____________ ______ ____ _____
April 1, 2008 $400,000,000 9% BB-
July 2, 2013 $750,000,000 9.125% BB-
Sept. 15, 2014 $650,000,000 7.75% BB-
Dec. 10, 2018 $750,000,000 8.375% BB-
* American Airlines Asks US to Upgrade Venezuela's Safety Rating
----------------------------------------------------------------
Peter Dolara, American Airlines Inc.'s senior vice president for
the Caribbean, South America and Mexico, recommended to the U.S.
Federal Aviation Administration to rate Venezuela as category 1
in aeronautics safety and to send experts to Venezuela as soon
as possible to check compliance of standards in the Simon
Bolivar International Airport, according to a report from the El
Universal.
As previously reported, Venezuela announced that certain U.S.
airlines will be banned from flying to the country by March 30
absent a higher safety rating from the United States. In 1995,
the FAA downgraded Venezuelan airlines to safety category 2.
Mr. Dolora told El Universal that Venezuela's Maiquetia airport
is one of the best worldwide. He insisted that FAA should set a
date to perform an audit of Venezuela's airport.
"What we cannot let happen is a disruption in service," Mr.
Dolora informed El Universal that American Airlines expects to
fly over 70,000 passengers from Venezuela to Dallas, New York
and Miami during the next Holy Week.
The Venezuelan Association of Airlines also called upon the
United States aviation authority and the International Civil
Aviation Organization to send delegations to Venezuela as soon
as possible to launch talks with domestic aviation agencies, El
Universal relates.
"We hope the move the Venezuelan aeronautics authority made (to
suspend US carriers' flights) may be understood by FAA in its
true technical and legal sense and that no political connotation
is attached," said ALAV in a press statement. "Regardless of
the reasons the FAA had to downgrade Venezuela to category 2 in
1995, it is a notorious fact that the country has made
significant progress to achieve a leadership in the fields of
legal regulations, air safety and staff training."
* * *
Venezuela's foreign currency long-term debt is rated B2 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* * *
On Nov. 29, 2005, Fitch Ratings assigned expected 'BB-' ratings
to the pending issues of Venezuelan government bonds maturing
Feb. 26, 2016, and Dec. 9, 2020. The 2016 bond has a 5.75%
fixed coupon and the 2020 bond has a 6% fixed coupon. The bonds
are being marketed in Venezuela to be purchased in local
currency at the official exchange rate but under New York law,
with all coupon and principal payments in U.S. dollars.
Venezuela's sovereign ratings are supported by superior
international liquidity and low external financing
requirements relative to similarly rated sovereigns. The
ratings are constrained by vulnerability to external shocks
because of oil dependency; diminished capacity of the private
sector to absorb shocks because of heavy government
intervention in the productive sector; recent spending
increases that reduce fiscal flexibility; and concerns about
the rule of law and potential political instability. Fitch said
the Rating Outlook is Stable.
* VENEZUELA: Fears Negative Impact from US-Colombia FTA
-------------------------------------------------------
As previously reported, Colombia signed a free trade agreement
with the United States that aims to tear down barriers to
commerce and help fight drugs in the Latin American nation.
In Venezuela, the Colombian-US FTA has met opposing positions,
El Universal reports.
Three visions prevail:
-- First, Venezuelan's fear that the impact on Colombian-
Venezuelan trade will be negative;
-- Second, there could be a negative impact in the medium
term, but a positive one in the short term; and
-- Third, some Venezuelan's aniticipate good prospects
resulting from the trade pact.
External Trade Vice-Minister Roger Figueroa told Bolivarian News
Agency that the FTA could reduce the Colombian-Venezuelan
balance of trade and hinder intra-regional commerce. On the
other hand, Francisco Mendoza, the speaker of Venezuelan
exporters, thinks that exactly the opposite will happen.
Minister Figueroa noted that some Venezuelan exports to Colombia
will be replaced with US goods, El Universal reports. The
senior official emphasized that it will also directly affect
producers of Colombia and the Andean Community, because the
United States offers great subsidies to local farmers and
industrials at the bottom of economy.
For his part, Mr. Mendoza believes that Venezuelan exports could
find a new niche in the Colombian-US FTA, El Universal says. In
his opinion, since Colombia has to deprive the local market from
a number of goods in order to meet the US demand, this will
create a market for Venezuelan traders.
Venezuela exports to Colombia 6,000 tariff items. "It would be
hardly to define which will be the most benefited sectors. It is
too early," Mr. Mendoza said.
* * *
Venezuela's foreign currency long-term debt is rated B2 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* * *
On Nov. 29, 2005, Fitch Ratings assigned expected 'BB-' ratings
to the pending issues of Venezuelan government bonds maturing
Feb. 26, 2016, and Dec. 9, 2020. The 2016 bond has a 5.75%
fixed coupon and the 2020 bond has a 6% fixed coupon. The bonds
are being marketed in Venezuela to be purchased in local
currency at the official exchange rate but under New York law,
with all coupon and principal payments in U.S. dollars.
Venezuela's sovereign ratings are supported by superior
international liquidity and low external financing
requirements relative to similarly rated sovereigns. The
ratings are constrained by vulnerability to external shocks
because of oil dependency; diminished capacity of the private
sector to absorb shocks because of heavy government
intervention in the productive sector; recent spending
increases that reduce fiscal flexibility; and concerns about
the rule of law and potential political instability. Fitch said
the Rating Outlook is Stable.
* VENEZUELA: Inks Twelve Free Trade Agreements with Uruguay
-----------------------------------------------------------
The Presidents of Uruguay and Venezuela, Tabare Vazquez and Hugo
Chavez, respectively, signed 12 trade agreements last week.
One of the trade pact highlights is the purchase of Venezuela's
state-owned holding Petroleo de Venezuela aka Pdvsa of 50% stake
of Uruguayan state oil firm Ancap in its Argentine branch
Petrolera del Cono Sur, El Universal reports.
Furthermore, the two presidents signed:
-- two deals providing for the supply of Uruguayan goods to
the Venezuelan Guayana Corporation;
-- one agreement with the Housing Ministry for the
construction of dwellings, and
-- one deal under which Venezuelan state bank Bandes
purchased Uruguayan cooperative Cofac.
Venezuela and Uruguay also inked:
-- technological cooperation pact,
-- healthcare programs agreement,
-- a letter of intent between Venezuelan airline Conviasa and
Uruguayan carrier Pluna, and
-- a deal for development of joint satellite programs.
Rarael Ramirez, Pdvsa president and Venezuela's Energy and
Petroleum minister, told El Universal that the purchase of a 50%
stake in Petrolera del Sur requires a US$15 million investment.
This deal will give Pdvsa a stake in some 150 gas stations in
Argentina.
As for Cofac, Bandes told El Universal that the operation
involves a US$10 million trust for the value of assets and
liabilities, in addition to the "capital necessary to ensure a
healthy operation of the new institution."
* * *
Fitch Ratings assigns these ratings on Uruguay:
Rating Rating Date
------ -----------
Country Ceiling BB- Mar. 7, 2005
Long Term IDR B+ Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB- Mar. 7, 2005
Venezuela's foreign currency long-term debt is rated B2 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* * *
On Nov. 29, 2005, Fitch Ratings assigned expected 'BB-' ratings
to the pending issues of Venezuelan government bonds maturing
Feb. 26, 2016, and Dec. 9, 2020. The 2016 bond has a 5.75%
fixed coupon and the 2020 bond has a 6% fixed coupon. The bonds
are being marketed in Venezuela to be purchased in local
currency at the official exchange rate but under New York law,
with all coupon and principal payments in U.S. dollars.
Venezuela's sovereign ratings are supported by superior
international liquidity and low external financing
requirements relative to similarly rated sovereigns. The
ratings are constrained by vulnerability to external shocks
because of oil dependency; diminished capacity of the private
sector to absorb shocks because of heavy government
intervention in the productive sector; recent spending
increases that reduce fiscal flexibility; and concerns about
the rule of law and potential political instability. Fitch said
the Rating Outlook is Stable.
* VENEZUELA: Wants Chevron to Pay US$43 Million in Back Taxes
-------------------------------------------------------------
The Venezuelan government alleges that Chevron Corp., the
second-largest U.S. oil company, owes 92.7 billion bolivars
(US$43 million) in back income taxes from the 2001-through-2004
period, Bloomberg News reports.
The National Tax Service, Seniat, said in a statement that
Chevron will have to pay an addition 10% in penalties and
interest if they make amends within 15 days. If not, Chevron
could face fines of up to 250% percent. Chevron refuted
Venezuela's statement, saying it has paid its taxes in full.
"Chevron is confident that we have accurately calculated and
paid our taxes every year according to the laws of Venezuela,"
company spokesman Donald Campbell said in an e- mailed statement
to Bloomberg. "We fully cooperated with the tax authority in
the development of their findings and will work with them to
resolve any differences in our perspectives."
Last week, Venezuela shut the offices of French oil giant, Total
SA, after it failed to pay US$107 million in alleged back taxes.
The multi-million tax dispute accounts for Total's retroactive
tax increase between 2001 and 2004 after, Seniat decided that
oilfield operators should pay 50% taxes instead of 34%.
San Ramon, California-based Chevron is a partner in Venezuela in
the Hamaca heavy oil joint venture, which produces 200,000
barrels of crude a day. The company also holds shares in joint
ventures operating the Boscan and LL-652 oil fields and has a
chain of gasoline stations in Venezuela, Bloomberg relates.
Venezuela Energy and Oil Minister Rafael Ramirez said last year
the government was investigating 22 private oil companies that
might owe more than US$3 billion in back taxes, Bloomberg
relates.
* * *
Venezuela's foreign currency long-term debt is rated B2 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* * *
On Nov. 29, 2005, Fitch Ratings assigned expected 'BB-' ratings
to the pending issues of Venezuelan government bonds maturing
Feb. 26, 2016, and Dec. 9, 2020. The 2016 bond has a 5.75%
fixed coupon and the 2020 bond has a 6% fixed coupon. The bonds
are being marketed in Venezuela to be purchased in local
currency at the official exchange rate but under New York law,
with all coupon and principal payments in U.S. dollars.
Venezuela's sovereign ratings are supported by superior
international liquidity and low external financing
requirements relative to similarly rated sovereigns. The
ratings are constrained by vulnerability to external shocks
because of oil dependency; diminished capacity of the private
sector to absorb shocks because of heavy government
intervention in the productive sector; recent spending
increases that reduce fiscal flexibility; and concerns about
the rule of law and potential political instability. Fitch said
the Rating Outlook is Stable.
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter - Latin America is a daily newsletter
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Maryland USA. Lyndsey Resnick, Marjorie C. Sabijon and Sheryl
Joy P. Olano, Stella Mae Hechanova, Editors.
Copyright 2006. All rights reserved. ISSN 1529-2746.
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