/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/060324.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 Friday, March 24, 2006, Vol. 7, Issue 60 Headlines A R G E N T I N A A. BERNATAN: Verification of Claims from Creditors Ends May 19 ALTOS SERVICIOS: Claims Verification Ends on June 13 AUTOMOTORES MUSCIO: Trustee Verifies Proofs of Claim Until May 5 BODEGAS CUVILLIER: Files Reorganization Petition in Court COMODEX S.A.: Trustee Stops Accepting Claims on May 15 DIETA OPTIMA: Enters Bankruptcy on Court Orders DOLIN S.A.: Presenting Verified Claims in Court on May 2 DYZENO S.A.: Claims Verification Deadline Is May 12 FUNDACION EL DESCANSO: Seeks Reorganization Approval from Court GERMAIZ S.A.: Concludes Reorganization After Debt Pact Signed * ARGENTINA: Protesters Agree to End Roadblocks Along Border B E R M U D A ESG REINSURANCE: Fitch Affirms & Withdraws CCC+ IFS Ratings GLOBAL CROSSING: Strengthens Partnership with Limelight Networks B O L I V I A REPSOL YPF: Julio Gavito Resigns Over Oil Smuggling Controversy * BOLIVIA: Secures US$40 Million in Loans from CAF B R A Z I L BANCO DO BRASIL: Parana to Transfer Accounts from Banco Itau BANCO ITAU: Supreme Court Authorizes Parana to Transfer Accounts BRASIL FERROVIAS: Bankruptcy Ruling Affects Railway Lines Sale CEF: Court Authorizes Parana to Transfer Banco Itau's Accounts CEMIG: Postpones April 12 Payment for Complementary Dividends CST: Raises BRL650,000 from Scrap Metal Online Auction PETROLEO IPIRANGA: Gets Requisite Consents from Noteholders VARIG S.A.: Signs Code-Share Agreement with Air China * BRAZIL: Receiving US$39.5 Mil. Urban Dev't Financing from CAF C A Y M A N I S L A N D S ESPERANCE LIMITED: Sets April 6 Deadline for Filing of Claims EVANSTON LIMITED: Deadline for Claims Filing Is on April 6 GHK FIRST: Liquidator Stops Accepting Claims by April 18 HYPER FUNDING: Stops Accepting Proofs of Claim I-SECURITY SOLUTIONS: Stops Accepting Proofs of Claim I-SECURITY SOLUTIONS (HOLDINGS): Stops Accepting Proofs of Claim C O L O M B I A COLOMBIA TELECOMUNICACIONES: Auctioning Stake on April 7 TELEMAR: Will Not Bid for Colombia Movil * COLOMBIA: Obtains US$50MM Unsecured Revolving Credit from CAF D O M I N I C A N R E P U B L I C BANCO POPULAR: Internet Banking Transactions Reach US$492 Mil. FALCONBRIDGE LTD: Redeeming US$500 Mil. of Jr. Preference Shares * DOMINICAN REPUBLIC: Cyberpark & Telvent Ink Collaboration Pact E C U A D O R * ECUADOR: CAF Lends US$293 Million for Development Projects E L S A L V A D O R * EL SALVADOR: Leftist Mayors Ink Oil Agreement with Venezuela J A M A I C A AIR JAMAICA: CEO Says Airline Should Exploit Region's Potential M E X I C O AOL LATIN: Has Until May 20 to Solicit Plan Acceptances P A N A M A GRUPO BANISTMO: HSBC Close to Reaching Acquisition Deal P A R A G U A Y * PARAGUAY: Vice President Promotes Country in Visit to Florida P U E R T O R I C O MUSICLAND HOLDING: Uriarte Wants Stay Lifted to Complete Lawsuit T R I N I D A D & T O B A G O DIGICEL: Alleges Smear Campaign from Unnamed Sector U R U G U A Y * URUGUAY: Argentine Protesters Agree to End Roadblocks V E N E Z U E L A BANESCO: Expects Agriculture Sector Loans to Reach VEB40 Billion PDVSA: Explosion at Amuay Refinery Kills Two Workers * VENEZUELA: Inks Oil Deal with El Salvador's Leftist Mayors * VENEZUELA: May Sell Euro, Dollar Bonds to Refinance Debt VENEZUELA: Supplying Daily 3,000 Barrels of Crude to El Salvador - - - - - ================= A R G E N T I N A ================= A. BERNATAN: Verification of Claims from Creditors Ends May 19 -------------------------------------------------------------- The verification phase for the claims submitted by A. Bernatan S.A.C.I.I.'s creditors has started, Argentine daily Infobae reports. The verification will end on May 19, 2006. Creditors who are unable to submit claims after the said date will be excluded from receiving any distribution or payment that the company will make. Validated claims will be presented in court as individual reports, followed by the general reports. A. Bernatan S.A.C.I.I. was declared bankrupt by Buenos Aires court. Gabriel Eduardo Bigal was appointed as trustee. The trustee can be reached at: Gabriel Eduardo Bigal Pacheco de Melo 1846 Buenos Aires, Argentina ALTOS SERVICIOS: Claims Verification Ends on June 13 ---------------------------------------------------- Fernando Marziale, court-appointed trustee, will no longer verify claims against Altos Servicios S.R.L. after June 13, 2006, Argentine daily La Nacion reports. La Nacion relates that Buenos Aires' Court No. 3 declared the company bankrupt in favor of Ostrich S.R.L., whom the company owes $5,628.87. Clerk No. 6 assists the court in this case. The debtor can be reached at: Altos Servicios S.R.L. Paraguay 3482 Buenos Aires, Argentina The trustee can be reached at: Fernando Marziale Callao 930 Buenos Aires, Argentina AUTOMOTORES MUSCIO: Trustee Verifies Proofs of Claim Until May 5 ---------------------------------------------------------------- Creditors' claims against Automotores Muscio S.A. will be verified until May 5, 2006. Court-appointed trustee Hector Garcia is tasked with the verification. Infobae relates that validated claims will be presented in court as individual reports on June 6, 2006. The submission of a general report will follow on Aug. 28, 2006. A Buenos Aires court handles the company's bankruptcy case. The trustee can be reached at: Hector Garcia Uruguay 572 Buenos Aires, Argentina BODEGAS CUVILLIER: Files Reorganization Petition in Court --------------------------------------------------------- A Buenos Aires court is studying the request for reorganization submitted by local company Bodegas Cuvillier S.A., says Argentine daily Infobae. The report adds that that the Company filed a petition to reorganize after defaulting on its debt payments. COMODEX S.A.: Trustee Stops Accepting Claims on May 15 ------------------------------------------------------ Gustavo Pagliere -- the trustee appointed by the Buenos Aires court for the Comodex S.A. bankruptcy case -- will stop validating claims from the company's creditors on May 15, 2006, Infobae reports. Mr. Pagliere will present the validated claims in court as individual reports on June 27, 2006. The trustee will also submit a general report on the case on Aug. 22, 2006. The debtor can be reached at: Comodex S.A. Pasaje de la Conquista 1014 Buenos Aires, Argentina The trustee can be reached at: Gustavo Pagliere Tucuman 1424 Buenos Aires, Argentina DIETA OPTIMA: Enters Bankruptcy on Court Orders ----------------------------------------------- Dieta Optima S.A. enters bankruptcy protection after a court based in Buenos Aires ordered the company's liquidation. The order effectively transfers control of the company's assets to a court-appointed trustee who will supervise the liquidation proceedings. Infobae did not disclose on its Web site the name of the trustee assigned to the case as well as the deadlines of the verification of claims and submission of the individual and general reports. DOLIN S.A.: Presenting Verified Claims in Court on May 2 -------------------------------------------------------- The verified claims of Dolin S.A.'s creditors will be presented in court as individual reports on May 2, 2006, Infobae reports. On May 14, 2006, a general report on the company's bankruptcy case will be submitted in court. The company started winding up operations after a court based in Salta declared its bankruptcy and appointed accounting firm Estudio Torfe y Martinez as trustee. The debtor can be reached at: Dolin S.A. Tucuman 324 Ciudad de Salta Salta, Argentina The trustee can be reached at: Estudio Torfe y Martinez Vicente Lopez 425 Ciudad de Salta Salta, Argentina DYZENO S.A.: Claims Verification Deadline Is May 12 --------------------------------------------------- The verification of creditors' claims for the Dyzeno S.A. bankruptcy case has begun, states Infobae. Trustee Rafael Rodolfo Bejar Sadis of Estudio Bejar, Pantin y Asociados will stop verifying the claims on May 12, 2006. Mr. Sadis will submit the validation results as individual reports on June 27, 2006. He will also present a general report in court on Aug. 23, 2006. Infobae states that a Buenos Aires court handles the company's bankruptcy case. The trustee can be reached at: Rafael Rodolfo Bejar Sadis Estudio Bejar, Pantin y Asociados Suipacha 211 Buenos Aires, Argentina FUNDACION EL DESCANSO: Seeks Reorganization Approval from Court --------------------------------------------------------------- A Buenos Aires court is currently reviewing the merits of the reorganization petition filed by Fundacion El Descanso de Betania. Infobae reports that the company filed the request after defaulting on its debt payments. The reorganization petition, if granted by the court, will allow Fundacion El Descanso de Betania to negotiate a settlement with its creditors in order to avoid a straight liquidation. The debtor can be reached at: Fundacion El Descanso de Betania Diaz Colodrero 3161/65 Buenos Aires, Argentina GERMAIZ S.A.: Concludes Reorganization After Debt Pact Signed ------------------------------------------------------------- The reorganization of Buenos Aires-based Germaiz 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. * ARGENTINA: Protesters Agree to End Roadblocks Along Border ------------------------------------------------------------ Argentinian ecologists protesting Uruguay's construction of two paper mills along the border agreed to stop the roadblocks in order for negotiations to continue, Prensa Latina reports. Majority of the members of the Environmental Assembly in Gualeguaychu agreed to end their 45-day protest for an indefinite time. As previously reported, Uruguay's President Tabare Vasquez threatened to file suits against the protesters after it agreed to a 90-day suspension of the US$1.6 billion construction by Finnish company Metsa-Botnia Oy and Spanish firm Grupo Empresarial Ence SA. Uruguay sees the roadblocks as a serious violation of human rights, as they prevent free movement of people. Uruguay has calculated that the action has caused about EUR170 million in losses to the nation. Argentine provincial and federal authorities and environmentalist groups contends that the pulp mills with theirchlorine bleaching process are highly water and air contaminating, but Uruguay argues both mills comply with the latest and most stringent European Union regulations regarding conservation of natural resources. * * * Fitch Ratings assigns these ratings on Argentina: Rating Rating Date ------ ----------- Country Ceiling RD Dec. 14, 2005 Long Term IDR B Dec. 14, 2005 Short Term IDR B- Jun. 3, 2005 Local Currency Long Term Issuer Default Rating B Jun. 3, 2005 * * * 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 ============= B E R M U D A ============= ESG REINSURANCE: Fitch Affirms & Withdraws CCC+ IFS Ratings ----------------------------------------------------------- Fitch Ratings affirmed: -- ESG Reinsurance Bermuda Limited's, -- ESG Reinsurance Ireland Limited's, and -- European Specialty Ruckversicherung AG's -- the principal reinsurance subsidiaries of ESG Re Limited, Bermuda, Insurer Financial Strength ratings at CCC+. The agency has simultaneously withdrawn the ratings. Fitch will no longer provide rating coverage of the company. GLOBAL CROSSING: Strengthens Partnership with Limelight Networks ---------------------------------------------------------------- Global Crossing reported that it is bolstering its five-year relationship with leading content delivery network Limelight Networks. The two companies have entered into a new agreement which supports Limelight's global distributed delivery of rich content, including video on demand, music downloads and streaming media to audiences of any size. "Our customers' global audience demands uninterrupted access to a broad -- and growing -- range of digital media," said Nathan Raciborski, chief technical officer of Limelight Networks. "Global Crossing's extensive global reach, high capacity backbone and advanced peering capabilities are key components of our solution." CDNs like Limelight Networks are playing a critical role in the growth of the Internet, where new communities based on shared interests and other non-geographical criteria are creating and consuming massive amounts of on-demand online content. "Our wholly owned network and global capabilities are ideally suited to support Limelight Networks as they distribute extremely large content that is frequently and simultaneously accessed by global audiences," said Ted Higase, Global Crossing's executive vice president, worldwide carrier services. "We're focused on providing them with the unwavering quality of service and reliability that supports their business execution." An intelligently architected, high-capacity backbone that can scale quickly to handle high volumes and peak audiences without impacting performance quality is essential to the enjoyment of rich content. Global Crossing's wavelength service is a flexible alternative to dark fiber and traditional capacity services, providing bandwidth on demand, expanded market coverage and increased speed-to-market cost effectively, while eliminating unnecessary overhead and functional duplication across the network. Limelight Networks also utilizes Global Crossing's IP Transit Service at its distributed facilities for rich content transport. IPT runs over Global Crossing's worldwide, self- healing, Tier 1 IP network, utilizing more than 200 private peering interconnects with capacity of nearly 200 Gbps for high- performance, always-on, easily scalable, high-speed connectivity to the Internet. Global Crossing's uCommandr customer service portal, a unique offering that delivers 24x7 self-service autonomy to customers, enables Limelight Networks to order data services, monitor its network, create utilization reports, establish end-user and product accounts, and view monthly billing reports. A recognized industry leader and innovator, Global Crossing received Capacity's 2005 "Best Global Wholesale Provider" award for its outstanding customer service, network availability and suite of services. In addition to consistently delivering 99.999-percent availability -- the industry's highest standard -- over its global IP backbone, Global Crossing recently made network performance history when its multi-gigabit fiber optic network supported the world record in international visualization, a 19.5-Gbps stream between Amsterdam, the Netherlands, and San Diego, California, carrying a single application showing actual scientific content. About Limelight Networks Privately held Limelight Networks -- http://www.llnw.com-- is a content delivery network for Internet distribution of video, music, games, and downloads. Limelight's advanced content delivery network provides the world's top media companies high- performance delivery of media and software via the Internet. About Global Crossing Headquartered in Florham Park, New Jersey, Global Crossing Ltd. -- http://www.globalcrossing.com/-- provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. The company filed for chapter 11 protection on Jan. 28, 2002 (Bankr.S.D.N.Y. Case No. 02-40188). When the Debtors filed for protection from their creditors, they listed $25,511,000,000 in total assets and $15,467,000,000 in total debts. Global Crossing emerged from chapter 11 on Dec. 9, 2003. As of Dec. 31, 2005, Global Crossing's balance sheet reflects a $173 million equity deficit compared to a $51 million of positive equity at Dec. 31, 2004. ============= B O L I V I A ============= REPSOL YPF: Julio Gavito Resigns Over Oil Smuggling Controversy --------------------------------------------------------------- Julio Gavito, Andina SA's vice president and Repsol YPF Bolivia's director, resigned from his posts on Mar. 22, citing personal reasons while vowing to clear the name of the oil and gas company. As previously reported, the Bolivian government accused the Spanish-Argentine company of having smuggled crude valued at US$9.22 million between 2004-2005 period. The government added document falsification and tax evasion to its charges against the company. Despite a formal response from Andina denying the charges, the government issued a warrant for the arrest of Mr. Gavito. That warrant was cancelled after Spanish officials expressed concerns over the matter. However, a new arrest warrant was issued against the company's Bolivian executives resulting to the detention on Mar. 15 of Mr. Gavito and Pedro Sanchez -- Andina's chief operating officer. They were later released on bail. "I have decided to take a step to the flank in my professional race to dedicate part of my time to the defense of driving of the company and of my collaborator, in the certainty that the accusations are absolutely infundadas. I am convinced that, beyond the vicissitudes that I have had to bear in this laborious and unjust proceeding, the truth will come to the light and our innocence will be able to be demonstrated," Mr. Gavito said in a statement. Repsol said in a statement that "it maintains the decision to continue with all its operations in Bolivia, in a climate of legal security and of clear and stable rules that they allow to face the great power challenges that consider to harness the economic and social development of the country." Luis Garcia Sanchez has been named country manager of Repsol's Bolivian operations. * * * On June 20, 2005, Moody's Investors Service upgraded the ratings of Spanish-Argentine oil company Repsol YPF's local subsidiary YPF S.A. Moody's upgraded YPF's senior unsecured rating to Ba3 from B1 and the unit's domestic currency issuer rating to Baa2 from Baa3. YPF's foreign currency issuer rating of Caa1 remained unchanged, as it is constrained by the sovereign ceiling of Argentina. YPF's Corporate Family Rating (formerly known as the senior implied rating) is aligned with the foreign currency issuer rating at Caa1. * BOLIVIA: Secures US$40 Million in Loans from CAF -------------------------------------------------- The Andean Development Corporation -- CAF -- grants a total of US$40 million in loans for Bolivia, that includes US$25 million for a nationwide freeway and US$15 million to back a program to deal with natural emergencies, El Universal reports. Caracas-based CAF is the financing arm of the Andean community and the largest multilateral lender to the Andean nations. CAF present members include, in addition to Venezuela, Argentina, Bolivia, Brazil, Costa Rica, Colombia, Chile, Ecuador, Spain, Jamaica, Mexico, Panama, Paraguay, Peru, Dominican Republic, Trinidad & Tobago, Uruguay and 16 private banks in the Andean region. * * * Fitch Ratings assigns these ratings on Bolivia: Rating Rating Date ------ ----------- Country Ceiling B- Jun. 17, 2004 Long Term IDR B- Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B- Dec. 14, 2005 =========== B R A Z I L =========== BANCO DO BRASIL: Parana to Transfer Accounts from Banco Itau ------------------------------------------------------------ The Brazilian supreme court authorized the state of Parana to transfer all of its accounts to federal banks Banco do Brasil and Caixa Economica Federal aka CEF from Banco Itau, Business News Americas reports. Business News states that the Parana state government uses Banco do Brasil accounts for the payment of all its employees. CEF, on the other hand, manages the accounts for the recipients of state pension plan Paranaprevidencia. Business News relates that Itau was Parana's sole financial agent since the bank purchased former state bank Banestado in 2000. Itau's exclusive rights was supposed to end on 2005, according to the contract signed by the bank and the state, but the bank negotiated a five-year extension with former governor Jayme Lerner in 2002 for about BRL80 million. However, Roberto Requiao, Parana's current governor, suspended the contract in November 2005 and began transferring all accounts to the federal banks, according to Business News. The governor reasoned that the constitution stipulates all government accounts to be managed by federal banks. * * * As reported by the Troubled Company Reporter on March 9, 2006, Standard & Poor's Ratings Services assigned a 'BB' currency credit rating on Banco Itau S.A. * * * On Oct. 19, 2005, Moody's Investors Service upgraded Caixa Economica Federal's long-term foreign currency deposit rating to B1 from B2 with a positive outlook. The action followed Moody's upgrade of Brazil's foreign currency ceiling for deposits to B1, from B2, and the foreign currency country ceiling for bonds and notes to Ba3, from B1. The country ceilings have a positive outlook. * * * 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 ITAU: Supreme Court Authorizes Parana to Transfer Accounts ---------------------------------------------------------------- The Brazilian supreme court authorized the state of Parana to transfer all of its accounts in Banco Itau to federal banks Banco do Brasil and Caixa Economica Federal aka CEF, Business News Americas reports. The Parana state government uses Banco do Brasil accounts for the payment of all its employees, according to Business News. CEF, on the other hand, manages the accounts for the recipients of state pension plan Paranaprevidencia. Business News relates that Itau was Parana's sole financial agent since the bank purchased former state bank Banestado in 2000. Itau's exclusive rights was supposed to end on 2005, according to the contract signed by the bank and the state, but the bank negotiated a five-year extension with former governor Jayme Lerner in 2002 for about BRL80 million. However, Roberto Requiao -- Parana's current governor -- suspended the contract in November 2005 and began transferring all accounts to the federal banks, Business News states. The governor reasoned that the constitution stipulates all government accounts to be managed by federal banks. * * * As reported by the Troubled Company Reporter on March 9, 2006, Standard & Poor's Ratings Services assigned a 'BB' currency credit rating on Banco Itau S.A. * * * On Oct. 19, 2005, Moody's Investors Service upgraded Caixa Economica Federal's long-term foreign currency deposit rating to B1 from B2 with a positive outlook. The action followed Moody's upgrade of Brazil's foreign currency ceiling for deposits to B1, from B2, and the foreign currency country ceiling for bonds and notes to Ba3, from B1. The country ceilings have a positive outlook. * * * 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. BRASIL FERROVIAS: Bankruptcy Ruling Affects Railway Lines Sale -------------------------------------------------------------- The bankruptcy ruling against Brasil Ferrovias and the company's debt dispute with its creditor Scala may affect the sale of its Ferronorte, Ferroban and Novoeste railway lines, Business News Americas reports. According to Business News, Scala claimed that Ferrovias failed to pay a BRL5.6 million promissory note for four years, which made the creditor file a bankruptcy case against the company before a Sao Paulo court. As reported in the Troubled Company Reporter on March 15, 2006, Judge Caio Marcelo Mendes de Oliveira made a ruling in favor of Scala, declaring Ferrovias bankrupt. A bankruptcy ruling will paralyze the holding company's activities. Local news service Agencia Estado relates that Guilherme Lacerda -- Chief Executive of Funcef, the pension fund for Caixa Economica's employees and co-owner of a 49% stake in Ferrovias - was surprised at the court's decision. "It's strange this should happen days before receiving bids to buy the company," Mr. Lacerda told AE. According to Business News, America Latina Logistica, MRS Logistica, Bunge and Copersucar are interested in the company's sale, which was scheduled to begin on March 22, 2006. Mr. Lacerda, who is sits on the Ferrovias board, also told the news service that he had never heard of Scala. Ferrovias denied receiving any bankruptcy notice from the court. The company also denied the validity of its debt to Scala, which expired in July last year, says Business News. The company reasoned that it never received the shares. According to news service Valor Economico, Scala attorney Elias Katudjian insisted that Ferrovias did received the shares. Local press reported that Ferrovias made an appeal to the judge's decision. Business News reported earlier that the company said The company told Business News that an appeal on the bankruptcy decree will be filed to the state justice tribunal once the it receives official notice from the court. The company has 10 days to file an appeal that could suspend bankruptcy and permit the sale. The Troubled Company Reporter also reported that the company almost lost its concession of Ferroban in January after falling behind in repayments of a 280 million real debt to the land transportation bureau ANTT. Brasil Ferrovias deposited its payment just days before the concession was suspended. CEF: Court Authorizes Parana to Transfer Banco Itau's Accounts -------------------------------------------------------------- The Brazilian supreme court authorized the state of Parana to transfer all of its accounts to federal banks Caixa Economica Federal aka CEF and Banco do Brasil from Banco Itau, Business News Americas reports. Business News states that the Parana state government uses Banco do Brasil accounts for the payment of all its employees. CEF, on the other hand, manages the accounts for the recipients of state pension plan Paranaprevidencia. Business News relates that Itau was Parana's sole financial agent since the bank purchased former state bank Banestado in 2000. Itau's exclusive rights was supposed to end on 2005, according to the contract signed by the bank and the state, but the bank negotiated a five-year extension with former governor Jayme Lerner in 2002 for about BRL80 million. However, Roberto Requiao -- Parana's current governor -- suspended the contract in November 2005 and began transferring all accounts to the federal banks, according to Business News. The governor reasoned that the constitution stipulates all government accounts to be managed by federal banks. * * * As reported by the Troubled Company Reporter on March 9, 2006, Standard & Poor's Ratings Services assigned a 'BB' currency credit rating on Banco Itau S.A. * * * On Oct. 19, 2005, Moody's Investors Service upgraded Caixa Economica Federal's long-term foreign currency deposit rating to B1 from B2 with a positive outlook. The action followed Moody's upgrade of Brazil's foreign currency ceiling for deposits to B1, from B2, and the foreign currency country ceiling for bonds and notes to Ba3, from B1. The country ceilings have a positive outlook. * * * 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. CEMIG: Postpones April 12 Payment for Complementary Dividends ------------------------------------------------------------- Companhia Energetica De Minas Gerais aka CEMIG postponed the payment scheduled for April 12, 2006, for complementary dividends relative to the difference on the interest on self- owned capital, compensated with minimum mandatory divididend for the 2004 fiscal year. The Brazilian Securities Exchange Commission aka CVM instructed the company to postpone the BRL76,500,000 payment deliberated during the Board of Directors' meeting that began on March 7, 2006, and ended on March 8, 2006. There is no new date for the payment yet. The payment will be made on the date immediately after the CVM manifests itself about the shareholder base. Companhia Energetica de Minas Gerais -- http://www.cemig.com.br/ -- is one of the largest and most important electric energy utilities in Brazil due to its strategic location, its technical expertise and its market. CEMIG's concession area extends throughout nearly 96.7% of the State of Minas Gerais, Brazil. CEMIG owns and operates 52 power plants, of which six are in partnership with private enterprises, relying on a predominantly hydroelectric energy matrix. Electric energy is produced to supply more than 17 million people living in the state's 774 municipalities. In addition to those 52 plants, another three are currently under construction. CEMIG is also active in several other states, through ventures for the generation or the commercialization of energy in these Brazilian states: in Santa Catarina (generation), Rio de Janeiro (commercialization and generation), Esp�rito Santo (generation) and Rio Grande do Sul (commercialization). * * * Cemig's BRL312,500,000 12.7% debentures due Nov. 1, 2009, carry Moody's B1 rating. CST: Raises BRL650,000 from Scrap Metal Online Auction ------------------------------------------------------ Flat steel producer Companhia Siderurgica de Turbarao S.A. aka CST raised about BRL650,000 from its online auction of 180t- worth of copper and other scrap material, according to news service AE-Setorial. Business News Americas relates that the auction was hosted by Superbid -- Brazil's surplus stock e-marketplace. CST, aka Companhia Siderurgica de Turbarao SA, is part of Brazilian steelmaking group Arcelor Brasil, a subsidiary of Luxembourg-based steel company Arcelor. * * * As reported in the Troubled Company Reporter on May 12, 2005, Fitch Ratings has upgraded the foreign currency rating of Brazilian steel producer Companhia Siderurgica de Tubarao (CST) to 'BB' from 'BB-' and has assigned a rating of 'BB' to CST Overseas. Fitch has also affirmed CST's local currency rating of 'BBB-' and the company's national scale rating of 'AA-' (bra). The Rating Outlook for all the above mentioned ratings is Stable. PETROLEO IPIRANGA: Gets Requisite Consents from Noteholders ----------------------------------------------------------- Companhia Brasileira de Petroleo Ipiranga reported that it has received the requisite consents from holders of its 7.875% Step- Up Notes due 2008 (CUSIP Nos. 20440RAB2 and P3057NAA6) to adopt amendments to the Notes and the fiscal agency agreement pursuant to which the Notes were issued. On March 8, 2006, Ipiranga commenced a cash tender offer and consent solicitation relating to all of the outstanding Notes pursuant to an Offer to Purchase and Consent Solicitation Statement and a Consent and Letter of Transmittal, each dated March 8, 2006. As of 5:00 p.m., New York City time, on March 22, 2006, US$72.1 million aggregate principal amount of the Notes had been tendered (representing 53.9% of the US$133,715,000 aggregate principal amount of Notes outstanding). Ipiranga intends to enter into a supplemental fiscal agency agreement relating to the Notes that effects the Proposed Amendments described in the Offer to Purchase. The proposed amendments would, among other things, eliminate substantially all of the restrictive covenants and certain events of default contained in the Notes. The Proposed Amendments will not become operative, however, unless and until the Notes are accepted for purchase pursuant to the terms of the Tender Offer. Holders of Notes not tendered in the Tender Offer will be bound by the Proposed Amendments once they become operative. As the withdrawal rights deadline has expired, tendered Notes may no longer be withdrawn and consents delivered may no longer be revoked, except in the limited circumstances described in the Offer to Purchase. Ipiranga also announced the extension of the "Consent Payment Deadline" from 5:00 p.m., New York City time, on March 22, 2006 to 5:00 p.m., New York City time, on March 28, 2006. As a result of the extension, holders will have until the new Consent Payment Deadline to tender and receive the total consideration offered to holders by Ipiranga, which includes the US$30 per US$1,000 principal amount consent payment. The Tender Offer is scheduled to expire at 5:00 p.m., New York City time, on April 11, 2006, unless extended or earlier terminated. The Tender Offer and Consent Solicitation are subject to Ipiranga's arranging new debt financing and other customary general conditions. Banc of America Securities LLC is the exclusive dealer manager for the Tender Offer and exclusive solicitation agent for the Consent Solicitation and questions should be directed to: High Yield Special Products +(1)-888-292-0070 (U.S. toll-free) +(1)-704-388-9217 (collect) Copies of the Offer to Purchase may be obtained from the Information Agent: D.F. King & Co., Inc. +(1)-800-859-8511 (U.S. toll-free) +(1)-212-269-5550 (collect) This press release does not constitute an offer to purchase or the solicitation of an offer to sell or a solicitation of consents with respect to the Notes. The Tender Offer and Consent Solicitation may only be made in accordance with the terms of and subject to the conditions specified in the Offer to Purchase, which more fully sets forth the terms and conditions of the Tender Offer and Consent Solicitation. Except as modified, all other terms and conditions of the Tender Offer and the Consent Solicitation remain the same. Companhia Brasileira de Petroleo Ipiranga distributes diesel, gasoline, hydrated alcohol, industrial and automotive lubricating oils and greases, natural gas and other related products and activities. * * * As reported on Feb. 28, 2006, Moody's Investors Service upgraded to Ba3 from B1 the foreign currency rating of Companhia Brasileira de Petroleo Ipiranga's outstanding US$134 million step-up senior unsecured notes due 2008. The outlook of the notes rating was changed from positive to stable. The Ba3 foreign currency rating of the notes is presently not constrained by Brazil's sovereign ceiling. The rating is supported by Ipiranga's position as the second largest fuel distribution company in Brazil, and its demonstrated ability to defend and expand its market share in the Brazilian fuel distribution market while maintaining acceptable operating margins. In addition, the rating incorporates the company's efficient logistics and strong brand recognition, as well as the improved competitive environment for the diesel and gasoline markets in Brazil. At the same time, the rating is constrained by Ipiranga's volatile working capital needs, its high dependence on Petrobras' for fuel supply, the increased capex and dividends distribution which have negatively impacted its free cash flow generation, and by the fierce competition in the fast-growing ethanol market. VARIG S.A.: Signs Code-Share Agreement with Air China ------------------------------------------------------ After five years of negotiations, VARIG, S.A., and Air China finally arrived at a code-sharing deal connecting Brazil and China. Pursuant to the code-share agreement, Air China will fly from Beijing and Shanghai, in China, to Frankfurt, Germany, while VARIG will fly from Frankfurt to Sao Paolo and Rio de Janeiro, Brazil, VARIG said in a statement. VARIG and Air China began the shared flights on March 12, 2006. VARIG said it will offer two daily flights, at $5,100 in executive class and $1,350 in economy. The partnership with Air China is the first step in strengthening VARIG's presence in Asia, according to VARIG. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) * BRAZIL: Receiving US$39.5 Mil. Urban Dev't Financing from CAF --------------------------------------------------------------- The Andean Development Corporation -- CAF -- will grant Brazil loans for: -- US$21.5 million for a program on road development and -- US$18 million for a program on management of drainage and urban development. Caracas-based CAF is the financing arm of the Andean community and the largest multilateral lender to the Andean nations. CAF present members include, in addition to Venezuela, Argentina, Bolivia, Brazil, Costa Rica, Colombia, Chile, Ecuador, Spain, Jamaica, Mexico, Panama, Paraguay, Peru, Dominican Republic, Trinidad & Tobago, Uruguay and 16 private banks in the Andean region. * * * Fitch Ratings assigns these ratings on Brazil: Rating Rating Date ------ ----------- Country Ceiling BB- Nov. 18, 2004 Long Term IDR BB- Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 Local Currency Long Term Issuer Default Rating BB- Dec. 14, 2005 =========================== C A Y M A N I S L A N D S =========================== ESPERANCE LIMITED: Sets April 6 Deadline for Filing of Claims ------------------------------------------------------------- Creditors of Esperance Limited are required to submit particulars of their debts or claims on or before April 6, to Buchanan Limited, the company's appointed liquidator. Failure to do so will exclude them from receiving the benefit of any distribution that the company will make. Esperance Limited started liquidating assets on February 23, 2006. The liquidator can be reached at: Francine Jennings Buchanan Limited P.O. Box 1170 George Town Grand Cayman, Cayman Islands Telephone: (345) 949-0355 Facsimile: (345) 949-0360 EVANSTON LIMITED: Deadline for Claims Filing Is on April 6 ---------------------------------------------------------- Creditors of Evanston Limited, which is being voluntarily wound up, are required to present proofs of claim on or before April 6, 2006, to Buchanan Limited, 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. Failure to do so will exclude them from receiving the benefit of any distribution that the company will make. Evanston Limited started liquidating assets on Feb. 23, 2006. The liquidator can be reached at: Francine Jennings Buchanan Limited P.O. Box 1170 George Town Grand Cayman, Cayman Islands Telephone: (345) 949-0355 Facsimile: (345) 949-0360 GHK FIRST: Liquidator Stops Accepting Claims by April 18 -------------------------------------------------------- Creditors of GHK First Equity Fund Ltd. are required to submit particulars of their debts or claims on or before April 18, 2006, to the company's appointed liquidator -- CFS Liquidators Ltd. Failure to do so will exclude them from receiving the benefit of any distribution that the company will make. GHK First Equity Fund Ltd. started liquidating assets on February 3, 2005. The liquidator can be reached at: M David Makin CFS Liquidators Ltd. c/o Windward 1, Regatta Office Park West Bay Road, P.O. Box 31106 SMB Grand Cayman, Cayman Islands Telephone: (345) 949 - 3977 Facsimile: (345) 949 - 3877 HYPER FUNDING: Stops Accepting Proofs of Claim ---------------------------------------------- The filing of creditors' proofs of claim against Hyper Funding Corporation -- company under voluntary liquidation -- ended on March 17, 2006. Creditors with unverified claims will not receive the benefit in the company's distribution. Hyper Funding Corporation entered voluntary wind up on Feb. 13, 2006. John Cullinane and Derrie Boggess were appointed as liquidators. The liquidators can be reached at: John Cullinane Derrie Boggess c/o Walkers SPV Limited, Walker House P.O. Box 908, George Town Grand Cayman, Cayman Islands Telephone: (345) 914-6305 I-SECURITY SOLUTIONS: Stops Accepting Proofs of Claim ----------------------------------------------------- Ying Hing Chiu and Diana Chung Miu Yin -- liquidators of I- Security Solutions (Cayman Islands) Limited -- verified proofs of claim against the company until March 20, 2006. Creditors who were not able to present claims by the said date will not be included in the benefit of receiving any distribution from the company. I-Security Solutions (Cayman Islands) Limited started liquidating assets on Feb. 8, 2006. The liquidators can be reached at: Attention: Connie Pang Ying Hing Chiu Diana Chung Miu Yin Tricor Services Limited Level 28, Three Pacific Place 1 Queen's Road East, Hong Kong Telephone: (852) 2980 1994 Facsimile: (852) 2882 6700 I-SECURITY SOLUTIONS (HOLDINGS): Stops Accepting Proofs of Claim ---------------------------------------------------------------- The verification of creditors' claims against I-Security Solutions (Holdings) Limited ended on March 20, 2006. Creditors whose claims have not been verified will be disqualified from receiving any distribution that the company will make. I-Security Solutions (Holdings) Limited entered voluntary liquidation on Feb. 8, 2006. Ying Hing Chiu and Diana Chung Miu Yin were appointed as liquidators. The liquidators can be reached at: Connie Pang Ying Hing Chiu Diana Chung Miu Yin Telephone: (852) 2980 1994 Facsimile: (852) 2882 6700 =============== C O L O M B I A =============== COLOMBIA TELECOMUNICACIONES: Auctioning Stake on April 7 -------------------------------------------------------- The auction of a controlling stake in state-run telco Colombia Telecomunicaciones aka Telecom will be held on April 7, 2006, Cablecentro -- one of the potential bidders -- revealed to Dow Jones Newswires on Tuesday. The minimum bidding price for the stake will be published on March 31, 2006, Gina Paola Achuri -- Cablecentro's executive director -- told Dow Jones. According to Dow Jones, Achuri remarked that the schedule to comply with all requirements is too tight. However, Ximena Celis, press officer at the Communications Ministry, informed Dow Jones that there was no formal announcement on official dates yet. German Centeno, Telecom's press officer, had declined to confirm the dates to Dow Jones, saying that Telecom will make an announcement of the sale conditions this Friday. According to Dow Jones, the government will grant a stake of 50% plus one share in Telecom to the winning bidder, who will also have to assume COP7.58 trillion in debt -- mainly in pension liabilities. Telecom's chief executive -- Alfonso Gomez -- said the government expects to raise at least $350 million in the sale, Dow Jones relates. As reported in the Troubled Company Reporter on March 22, 2006, Cablecentro teamed up with Swedish telecoms services firm Swedtel. The two companies will bid as a consortium. Achuri, according to Dow Jones, said that Cablecentro has also hired three investment banks -- one in Europe and two in US. "We will choose one investment bank that offers the best financing conditions, " Achuri said to Dow Jones. Dow Jones did not report the name of the banks involved. What makes Telecom attractive in spite of its liabilities is its presence in 990 municipalities and its 5,000 points of service, Telecom president Alfonso Gomez Palacios told Business News Americas. Other potential bidders are Telefonica S.A., CA Nacional Telefonos de Venezuela, Telefonos de Mexico S.A. and Phone 1, Dow Jones reports. The Troubled Company Reporter also reported on March 22, 2006, that municipal telcos Empresa de Telecomunicaciones de Bogota S.A. aka ETB and Empresas Publicas de Medellin S.A. aka EPM backed out of the auction, claiming discriminatory bidding conditions. According to Business News Americas, among the conditions ETB president Rafael Orduz considered discriminatory is the requirement that no monies belonging to the Colombian people may be used in the partnership. ETB, which could only finance a strategic partnership with the state telco through currently held assets, would be forced to take out a loan. Business News reports that the tender also requires the winning company to surrender its Internet and data unit to Telecom, which Orduz found absurd. Mr. Ordiz said that with this condition, ETB would lose one of its more important units. Business News relates that Telmex made an offer in 2005 for the 50% plus one share of Telecom. The company was willing to pay about US$350 million, but the Colombian government backed out of the deal to embark on a broader bidding process. Achuri told Business News that the sale process has been overly favorable for Telmex, which has had access to Telecom's key information since August 2005. According to Dow Jones, Former central bank board member and director of think-tank National Association of Financial Institutions, Sergio Clavijo, said that the company needs a foreign partner to exit from its precarious financial condition. Colombia Telecomunicaciones is facing a COP5 trillion of pension liability. "Neither the company nor the government have a financial muscle needed to keep investing in this company," Mr. Clavijo told Dow Jones. TELEMAR: Will Not Bid for Colombia Movil ---------------------------------------- Brazil's Tele Norte Leste Participacoes aka Telemar said in reports that it's not keen on buying Colombia Movil, the third- largest mobile phone operator in Colombia. "This would not be an exceptionally good business opportunity for the company," Telemar president Ronaldo Iabrudi was reported as saying. Other than Telemar, OLA also invited: -- Mexico's America Movil, -- Spain's Telefonica, -- Venezuela's CANTV, -- Chile's Entel, -- Millicom International Cellular and -- South Korea's SK Telecom. Telemar rejected the invitation because it's interested in establishing its position in Brazil before spreading out into foreign markets. Colombia Movil is owned by Empresas de Telecomunicaciones de Bogota and Empresas Publicas de Medellin and operates under the OLA brand name with more than two million subscribers. Telemar provides telecommunication services in South America. It offers local, intra-regional long distance, and data transmission services in 16 Brazilian states, which covers approximately 64% of the country. Mobile services are provided through its wireless unit Oi, and it has acquired data transmission services provider Pegasus. * * * As reported on Mar. 2, 2006, Standard & Poor's Ratings Services said it placed the 'BB' ratings of Telemar Norte Leste S.A. on CreditWatch with positive implications following the raising of the foreign and local currency sovereign credit ratings on Brazil. * COLOMBIA: Obtains US$50MM Unsecured Revolving Credit from CAF --------------------------------------------------------------- Colombia will receive from the Andean Development Corporation, CAF, up to US$50 million in unsecured revolving borrowing facility on behalf of financial institution BBVA Colombia. "The destination of which will be for funding of external trade operations, working capital and investment projects, as well as issuance and confirmation of letters of credit," CAF said in a statement. Caracas-based CAF is the financing arm of the Andean community and the largest multilateral lender to the Andean nations. CAF present members include, in addition to Venezuela, Argentina, Bolivia, Brazil, Costa Rica, Colombia, Chile, Ecuador, Spain, Jamaica, Mexico, Panama, Paraguay, Peru, Dominican Republic, Trinidad & Tobago, Uruguay and 16 private banks in the Andean region. * * * On May 30, 2005, Fitch Ratings has affirmed Colombia's ratings as: -- Long-term foreign currency 'BB'; -- Country ceiling 'BB'; -- Local currency 'BBB-'; -- Short-term 'B'. Fitch said the Rating Outlook is Stable. =================================== D O M I N I C A N R E P U B L I C =================================== BANCO POPULAR: Internet Banking Transactions Reach US$492 Mil. -------------------------------------------------------------- Dominican Republic bank Banco Popular's Internet banking transactions have reached US$492 million since its launching three years ago, according to local daily Listin Diario. Alejandro Santelises -- the bank's branches and personal business vice president -- told Business News Americas that Internet banking has been attractive for loan request procedures in house and car purchases. Internet banking speeds up the response process to let the client know whether or not the request has been granted, Mr. Santelises said to Business News. It has also facilitated business relations between the bank and real estate agents, importers and vehicle distributors. As reported by the Troubled Company Reporter on March 4, 2005, Moody's Investors Service withdrew all of its ratings for Banco Popular Dominicano, C. por A., for business reasons. The bank has no rated foreign currency debt outstanding. Banco Popular Dominicano, C. por A., one of the largest banks in the Dominican Republic, had over $2.4 billion in assets as of September 30, 2004. The following ratings were withdrawn: -- Bank Financial Strength Rating: E+ with stable outlook; -- Foreign Currency Deposits Rating: Caa1/Not Prime with negative outlook; and -- Domestic Currency Deposits Rating: Ba1/Not Prime, with negative outlook. FALCONBRIDGE LTD: Redeeming US$500 Mil. of Jr. Preference Shares ---------------------------------------------------------------- Falconbridge Limited disclosed that it intends to redeem a total of 20,000,000, or US$500 million, of its outstanding Junior Preference Shares. The Junior Preference Shares will be redeemed on April 26, 2006 from holders of record on March 22, 2006. Falconbridge intends to utilize its internal cash resources to fund the redemption. In accordance with the terms of the Junior Preference Shares, Falconbridge will redeem shares of each series of the Junior Preference Shares on a pro rata basis as follows: 8,000,000 Junior Preference Shares, Series 1 (approximately 67% of shares outstanding, TSX: NRD.PR.X), 8,000,000 Junior Preference Shares, Series 2 (approximately 67% of shares outstanding, TSX: NRD.PR.Y), and 4,000,000 Junior Preference Shares, Series 3 (approximately 67% of shares outstanding, TSX: NRD.PR.Z). The number of shares to be redeemed from each holder within each series of Junior Preference Shares will also be determined on a pro rata basis. Each Junior Preference Share will be redeemed at a price of US$25.25 plus accrued and unpaid dividends for the period from and including March 31, 2006 to and including April 25, 2006. After giving effect to the redemption of the 20,000,000 Junior Preference Shares, the company will have outstanding 3,999,899 Junior Preference Shares, Series 1, 3,999,899 Junior Preference Shares, Series 2, and 1,999,903 Junior Preference Shares, Series 3. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel mining deposits. It employs 14,500 people at its operations and offices in 18 countries. Falconbridge's common shares are listed on the New York Stock Exchange (FAL) and the Toronto Stock Exchange (FAL.LV). Falconbridge's 5% Adjustable Rate Convertible Subordinated Debentures carry Standard & Poor's BB+ rating. * DOMINICAN REPUBLIC: Cyberpark & Telvent Ink Collaboration Pact ---------------------------------------------------------------- Telvent GIT S.A signed a collaboration agreement on Tuesday with Cyberpark of Santo Domingo, a technology center created by the Dominican Republic government. The purpose of the agreement is to develop and promote information technology in the traffic, transport, health, public administration and document security sectors in Latin America. Telvent and the Santo Domingo Cyberpark will work together to identify, exchange information and jointly participate in new and highly innovative projects related to information technology in these strategic sectors. Furthermore, the creation of centers of excellence in the health and public administration sectors will be promoted in order to generate high value employment and exports. The Cyberpark is the first industrial complex dedicated to developing information technology in the Dominican Republic. The signing of this agreement will make this center a reference point for technology companies in Latin America. Eddy Martinez, executive director of the Dominican Republic's Center for Exports and Investment and executive chairman of the Santo Domingo Cyberpark, said, "The Dominican government is pleased to see that the development of this activity and the support of Telvent for our market have finally been consolidated in this agreement. It will contribute to making our business project a success by maximizing the development of R&D+i projects in our region, and by extension, in the remaining countries in Latin America through the promotion of centers of technology excellence." According to Telvent's chairman and chief executive officer, Manuel Sanchez Ortega, "We are very satisfied with this agreement signed with the Dominican Republic which not only strengthens and consolidates our presence in Latin America but confirms our ongoing commitment to R&D+i activities in the information technology sector in a region in which we have been working for more than 15 years and which is one of the most important strategic markets that we operate in today." The signing ceremony took place on Tuesday at Telvent's Headquarters in Madrid and was overseen by Leonel Fernandez Reyna, President of the Dominican Republic; Alejandro Gonzalez Pons, Ambassador of the Dominican Republic in Spain; Eddy Martinez Manzueta, Secretary of State and Executive Chairman of the Santo Domingo Cyberpark; and Manuel Sanchez Ortega, Chairman and Chief Executive Officer of Telvent. Telvent has been present in Latin America since the 1990s and has permanent offices in Brazil, Argentina and Mexico. Its most notable projects carried out in this region recently include the contract signed in Venezuela to modernize the Caracas-Valle del Tuy railway network, in the traffic sector; the project to manage the Belo Horizonte water network in Brazil in the environmental sector and projects to manage oil pipelines with PEMEX, the Mexican oil company, in the energy sector. Telvent, the Global RealTime IT Company, specializes in high value add solutions and services in four industry sectors (Energy, Traffic, Transport and Environment). Its technology allows high performing companies to make real-time business decisions using data acquisition, control, and advanced operational applications, providing secure actionable information delivery to the enterprise. * * * As reported by Troubled Company Reporter on Aug. 1, 2005, Fitch Ratings upgraded on July 26 Dominican Republic's sovereign external bonds that were eligible for April's debt exchange but were not fully extinguished to 'CCC+' from 'DDD'. This rating action reflects the government's commitment to service this debt as demonstrated by the recent coupon payment on 2013 bond. This rating applies to the 9.50% bonds due 2006 (US$) and the 9.04% bonds due 2013. ============= E C U A D O R ============= * ECUADOR: CAF Lends US$293 Million for Development Projects ------------------------------------------------------------ The Andean Development Corporation -- CAF -- will grant Ecuador a total of US$293 million in loans. Caracas-based CAF, the financing arm of the Andean community and the largest multilateral lender to the Andean nations, will release the loans in two tranches. The first loan amount for US$250 million, will go to the Program for Enhancement of Debt Management and quality of public expense, El Universal relates. The second lending phase for Ecuador accounts for US$43 million to be used for infrastructure works. "Its major goals are to facilitate and clear traffic in the areas of Guayaquil, La Puntilla and Duran," CAF stated in a press release, as quoted by Reuters. Caracas-based CAF is the financing arm of the Andean community and the largest multilateral lender to the Andean nations. CAF present members include, in addition to Venezuela, Argentina, Bolivia, Brazil, Costa Rica, Colombia, Chile, Ecuador, Spain, Jamaica, Mexico, Panama, Paraguay, Peru, Dominican Republic, Trinidad & Tobago, Uruguay and 16 private banks in the Andean region. * * * Fitch Ratings assigns these ratings on Ecuador: Rating Rating Date ------ ----------- Country Ceiling B- Aug. 29, 2005 Long Term IDR B- Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 ===================== E L S A L V A D O R ===================== * EL SALVADOR: Leftist Mayors Ink Oil Agreement with Venezuela -------------------------------------------------------------- The Intermunicipal Energy Association for El Salvador -- Enepasa -- formed by mayors belonging to the Farabundo Mart� National Liberation Front, inked an agreement with Venezuela to purchase oil under preferential terms, El Universal reports. The pact was signed at the presidential palace of Miraflores and shipments are to begin "as soon as possible," El Salvador quoted Violeta Menjivar, who is to be inaugurated as San Salvador mayor on May 1. Operations are to be conducted through Venezuelan state-run oil corporation PDV-Caribe, the Associated Press reported. Under the agreement, Enepasa will pay 60% of oil supplied within 90 days, while paying for the rest in 23 years, with a fixed annual interest rate of one percent, plus a two-year grace period, news agency EFE reported. President Hugo Chavez conceded he reached the agreement with Enepasa because he was unable to negotiate with his Salvadoran counterpart El�as Antonio Saca's government. President Saca urged the FMLN not to try to generate among Salvadorans "false hopes" about the possibility to find cheap oil in Venezuela, El Universal relates. President Saca said in reports that oil imports requires major storage and processing facilities. "This implies we need a refinery that may cost some US$3-5 billion." * * * Fitch Ratings assigns these ratings on El Salvador: Rating Rating Date ------ ----------- Country Ceiling BB+ Jun. 18, 2004 Long Term IDR BB+ Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 Local Currency Long Term Issuer Default Rating BB+ Dec. 14, 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. ============= J A M A I C A ============= AIR JAMAICA: CEO Says Airline Should Exploit Region's Potential --------------------------------------------------------------- Michael Conway, Air Jamaica's chief executive officer, said that the airline should take advantage of its geographical position. Mr. Conway was qouted by the Jamaica Observer as saying during the Pan Caribbean Financial Services' Economic Seminar Breakfast which took place at the Terra Nova hotel in St. Andrew last week. "The entire region is growing and Air Jamaica should grow with it. Jamaica is ideally suited to be a transit point for carriers going from South and Latin America to North America. Rather than stop off in Miami they can stop off in Jamaica en route to their final destinations. Passengers are likely to find Jamaica less congested. Also Air Jamaica provides flights to North America which means that it can only benefit from these new routes," Mr. Conway said. Being aware of Spanish and Latin American visitors embracing the Riu chain of hotels, the chief officer wants Air Jamaica to look into new routes while keeping in compliance with bilateral treaties. "We want a scenario whereby we get passengers stopping over in Jamaica and also in transit to their ultimate destination. Rather than go north to arrive at south, Jamaica can reposition itself as a "country" hub seeing greater passenger through numbers." "Air Jamaica's true franchise factor is the loyalty it inspires from Jamaicans both at home and in the diaspora. Over recent years that loyalty has been tested because of its on time record and so it lost passengers. Today our on time record performance now ranks with the best in the industry." We are looking to simplify that and make the process easy and get more people flying within the island rather than sitting in their cars for up to four hours." Air Jamaica is under investigation by a congressional panel that will examine the financial and operational state of the airline which allegedly incurred losses of US$136 million since the government resumed control of the airline in December 2004. Air Jamaica lost US$99 million (J$6.25 billion) in 2004. * * * Air Jamaica's $200 million 9-3/8% notes due July 18, 2015, carries Moody's B1 rating and Standard & Poor's B rating. =========== M E X I C O =========== AOL LATIN: Has Until May 20 to Solicit Plan Acceptances ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware further extended until May 20, 2006, America Online Latin America Inc., and its debtor-affiliates' time to solicit acceptances of their Joint Plan of Reorganization and Liquidation from their creditors. As reported in the Troubled Company Reporter on Mar. 6, 2006, the Court approved the Debtors' Disclosure Statement explaining their Joint Plan of Reorganization and Liquidation. The Debtors give the Court three reasons why an extension of their solicitation period is warranted: a) it will allow the Debtors to complete the Plan solicitation process in a reasoned and well-balanced manner without being potentially distracted by alternative plans of reorganization being filed and solicited by other parties-in-interest; b) the requested extension will not harm Debtors' creditors but it will maximize value of their estates and it's in the best interest of the Debtors' estates, their creditors and other parties-in-interest; and c) the principal stockholders of the Debtors have consented to the request for an extension of the exclusive solicitation period. Headquartered in Fort Lauderdale, Florida, America Online Latin America, Inc. -- http://www.aola.com/-- offers AOL-branded Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as well as localized content and online shopping over its proprietary network. Principal shareholders in AOLA are Cisneros Group, one of Latin America's largest media firms, Brazil's Banco Itau, and Time Warner, through America Online. The Company and its debtor-affiliates filed for Chapter 11 protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778). Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at Shearman & Sterling LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $28,500,000 and total debts of $181,774,000. =========== P A N A M A =========== GRUPO BANISTMO: HSBC Close to Reaching Acquisition Deal ------------------------------------------------------- UK bank HSBC may reach a deal on the acquisition of Panama-based Grupo Banistmo as early as this week, Salvadorian daily El Diario de Hoy reports. According to El Diario, talks between the two companies are now at an advanced stage. Sources close to the negotiations revealed that HSBC would pay up to three times Banistmo's book value, which is currently about US$20 per share, El Diario relates. * * * As previously reported Nov. 9, 2005, Moody's Investors Service affirmed the D+ financial strength rating and Ba1 foreign currency deposit rating of Primer Banco del Istmo, S.A. The affirmation follows the announcement that Banistmo's shareholder, Grupo Banistmo, S.A., has agreed to purchase between 51% and 60% of Inversiones Financieras Bancosal S.A., the owner of Banco Salvadoreno, El Salvador's third largest bank. =============== P A R A G U A Y =============== * PARAGUAY: Vice President Promotes Country in Visit to Florida --------------------------------------------------------------- Paraguay's vice president, Luis A. Castiglioni, promoted his country during a visit earlier this week in Florida, USA. Mr. Castiglioni highlighted Paraguay's strategic location in the Mercosur region for Florida businesses to develop their Latin American business operations and investments. "Paraguay has had an historic and special relationship with Florida, and we are confident that this mission will lead to an expansion in the trade and investment ties between our country and this great state," Vice President Castiglioni said. He also emphasized the great importance of this mission for his country, pointing out that Florida is the top-trading partner of nearly every country in the hemisphere and Paraguay and Florida will mutually benefit from increased business ties. Paraguay's visit to Florida serves as a precursor to a trip that Florida FTAA will lead to Paraguay in July to further discuss Florida-Paraguay trade relations and promote Miami as the site for the Permanent Secretariat of the Free Trade Area of the Americas. "We are very optimistic following this meeting that the relationship between Florida and Paraguay continues to strengthen," said Florida FTAA President, Jorge L. Arrizurieta. "Meetings with key leaders like Vice President Castiglioni continue to serve as major stepping stones toward securing the Permanent Secretariat in Miami. We are optimistic about the possibility of future support from Paraguay in our efforts, and we trust to make progress on this front when Florida FTAA leads a delegation there in July." Paraguay is Florida's thirty-first largest trading partner, with a bilateral relationship of more than $572 million dollars in 2004, a 26.7% increase from the previous year. Last year alone, merchandise exports to Paraguay from Florida increased by 40%, making the country Florida's nineteenth largest export destination. The Free Trade Area of the Americas -- FTAA, currently being negotiated by 34 democratically elected Western Hemisphere nations, is intended to be the most far-reaching trade agreement in history. It is an effort to unite the economies of the Western Hemisphere into a single free trade agreement comprising 800 million consumers with a combined gross domestic product of $14 trillion. Florida FTAA, Inc., is a private-public entity led by Governor Jeb Bush and officials throughout the State of Florida with the mission that Miami, Florida, becomes the site of the Permanent Secretariat of the Free Trade Area of the Americas. It is chaired by Ambassador Charles E. Cobb, Jr. and managed by President Jorge L. Arrizurieta. The administrative offices are located at the Biltmore Hotel Conference Center of the Americas in Coral Gables, Florida. * * * Moody's assigns these ratings to Paraguay: -- CC LT Foreign Bank Deposit, Caa2 -- CC LT Foreign Curr Debt, Caa1 -- CC ST Foreign Bank Deposit, NP -- CC ST Foreign Currency Debt, NP -- LC Currency Issuer Rating, Caa1 -- FC Curr Issuer Rating, Caa1 -- Local Currency LT Debt, WR * * * Standard & Poor's assigns these ratings to Paraguay: -- Foreign Currency LT Debt B- -- Local Currency LT Debt B- -- Foreign Currency ST Debt C -- Local Currency ST Debt C ===================== P U E R T O R I C O ===================== MUSICLAND HOLDING: Uriarte Wants Stay Lifted to Complete Lawsuit ---------------------------------------------------------------- Gene J. Stonebarger, Esq., at Lindsay & Stonebarger, in Sacramento, California, relates that on Feb. 2, 2005, Marisa Uriarte, individually, and on behalf of a class of California residents, initiated a state court litigation against Musicland Group, Inc., alleging violations of Section 432.8 of the California Labor Code. Section 432.8 protects the rights of an applicant for employment or an employee from disclosing information about a conviction related to the possession of marijuana where the conviction is more over two years old. After months of litigation, the parties to the Action entered into a stipulation and agreement to settle class action on Dec. 14, 2005. Judge Shelleyanne W.L. Chang of the Sacramento County Superior Court issued an order conditionally granting the joint motion for preliminary approval on Jan. 18, 2006 -- the same day that the Debtors filed a notification of bankruptcy filing and suggestion of stay. Pursuant to the Class Action Settlement, the parties agreed to conditionally certify a Class to be comprised of all applicants to Suncoast Motion Picture Company's California stores who submitted a pre-employment job application between Feb. 3, 2004, and Sept. 30, 2005, that included a question about prior criminal convictions without exclusion for Marijuana-Related Convictions. Suncoast Motion Picture Company agreed to provide to each class member who submits a timely claim form a settlement voucher for $30 for use at any Suncoast store, with an expiration date of 120 days after the date it is mailed to the class member. In addition, the parties agreed that the Debtors would pay Ms. Uriarte $1,000, for attorney's fees and costs, not to exceed $45,000, and that Defendants other than Suncoast Motion Picture Company would be released from any liability as to the Action. Ms. Uriarte asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay so as to finalize Court approval of the Class Action Settlement and allow the Action to be brought to completion. Mr. Stonebarger asserts that allowing a matter to proceed in another forum can constitute a cause for lifting the automatic stay. It would be a waste of judicial and legal resources for the Action to be reinstituted in the Bankruptcy Court, he says. In addition, Mr. Stonebarger notes, the Action only involves issues of state law and California law must be applied in approving the Class Action Settlement. Mr. Stonebarger adds that granting relief from the automatic stay to allow the Action to conclude would not prejudice the Debtors' estate and would actually promote the efficient administration of the estate, as the claims made through the Action can be disposed of with prejudice if the stay is lifted. About Musicland Holding 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) ================================= T R I N I D A D & T O B A G O ================================= DIGICEL: Alleges Smear Campaign from Unnamed Sector --------------------------------------------------- Digicel Ltd. said that it had observed a "malicious and concerted" public campaign designed to cast the company in a poor light, according to a report from the Trinidad Guardian. The company is concerned that the "smear campaign could prejudice and may have been intended to prejudice the outcome of dispute proceedings currently under way with respect to interconnection." The statement from Digicel did not indicate who was behind the smear campaign. But it did state "categorically" that the company will not be responsible for as much as a one cent increase in any services-landline or mobile-currently being offered in T&T, the Guardian says. Digicel also said in its statement that it stood by its track record of bringing lower prices to Caribbean countries and predicted that the experience in this country will be the same. Digicel is currently negotiating an interconnection agreement with the Telecommunication Services of Trinidad and Tobago. In January, the company said 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 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. * * * 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. ============= U R U G U A Y ============= * URUGUAY: Argentine Protesters Agree to End Roadblocks ------------------------------------------------------- Argentinian ecologists protesting Uruguay's construction of two paper mills along the border agreed to stop the roadblocks in order for negotiations to continue, Prensa Latina reports. Majority of the members of the Environmental Assembly in Gualeguaychu agreed to end their 45-day protest for indefinite time. As previously reported, Uruguay's President Tabare Vasquez threatened to file suits against the protesters after it agreed to a 90-day suspension of the US$1.6 billion construction by Finnish company Metsa-Botnia Oy and Spanish firm Grupo Empresarial Ence SA. Uruguay sees the road blocks as a serious violation of human rights, as they prevent free movement of people. Uruguay has calculated that the action has caused about EUR 170 million in losses to the nation. Argentine provincial and federal authorities and environmentalist groups state that the pulp mills with theirchlorine bleaching process are highly water and air contaminating, but Uruguay argues both mills comply with the latest and most stringent European Union regulations regarding conservation of natural resources. * * * Fitch Ratings assigns these ratings on Argentina: Rating Rating Date ------ ----------- Country Ceiling RD Dec. 14, 2005 Long Term IDR B Dec. 14, 2005 Short Term IDR B- Jun. 3, 2005 Local Currency Long Term Issuer Default Rating B Jun. 3, 2005 * * * 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 ================= V E N E Z U E L A ================= BANESCO: Expects Agriculture Sector Loans to Reach VEB40 Billion ---------------------------------------------------------------- Venezuela's Banco Universal aka Banesco expects loans for the agriculture sector to reach about VEB40 billion this year, according to local daily El Carabobeno reports. Luis Granadillo -- agrifinance division regional manager -- told El Carabobeno that the loans will be used to finance cattle farming, infrastructures and logging. Mr. Granadillo, according to Business News Americas, revealed that there are two credit lines of VEB100 million to purchase new farm machinery. Banesco will finance 75% with loan maturities of up to four years. Banco Universal aka Banesco offers a wide range of commercial, consumer, mortgage, micro and agrifinancing. It is one of the largest banks in Venezuela, with about 2.5 million clients. * * * As reported by the Troubled Company Reporter on May 19, 2005, International rating agency Fitch affirmed the international debt ratings of Venezuelan bank Banesco Banco Universal and revised the Outlook to Negative from Stable. The ratings affirmed are: -- Long-term foreign currency at 'B' -- Short-term foreign currency at 'B' -- Individual affirmed at 'D' -- Support affirmed at '5' -- Long-term national rating at 'A-(ven)' -- Short-term national rating at 'F2(ven)' PDVSA: Explosion at Amuay Refinery Kills Two Workers ---------------------------------------------------- An explosion at the Amuay oil refinery of state-run oil firm Petroleos de Venezuela S.A. aka PDVSA killed two workers, energy minister and company president Rafael Ramirez told news service EFE on Wednesday. According to EFE, Mr. Ramirez revealed that the accident occurred on Tuesday at 5:30 p.m. at the Amuay complex in western Falcon state. One worker died instantly while another suffered serious burns before dying. One of those killed in the explosion was 48-year old Marcos Teran, state oil firm PDVSA said in a statement. The company did not identify the other victim. Contract workers who were in the vicinity of the hydrogen plant and suffered minor injuries were released after undergoing medical evaluations, according to the statement. Mr. Ramirez gave no details to EFE regarding the current status of the refinery and how much damage the explosion caused. However, he did say that an investigation had already been launched to determine the causes of the explosion and what administrative steps must be taken. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * On Jan. 23, 2005, Fitch Ratings upgraded the local and foreign currency ratings of Petroleos de Venezuela S.A. aka PDVSA to 'BB-' from 'B+'. The rating of PDVSA's export receivable future flow securitization, PDVSA Finance Ltd, was also upgraded to 'BB+' from 'BB'. In addition, Fitch has assigned PDVSA a 'AAA(ven)' national scale rating. The Rating Outlook is Stable. Both rating actions follow Fitch's November 2005 upgrade of Venezuela's sovereign rating. * VENEZUELA: Inks Oil Deal with El Salvador's Leftist Mayors ------------------------------------------------------------ The Intermunicipal Energy Association for El Salvador -- Enepasa -- formed by mayors belonging to the Farabundo Mart� National Liberation Front, inked an agreement with Venezuela to purchase oil under preferential terms, El Universal reports. The pact was signed at the presidential palace of Miraflores and shipments are to begin "as soon as possible," El Salvador quoted Violeta Menjivar, who is to be inaugurated as San Salvador mayor on May 1. Operations are to be conducted through Venezuelan state-run oil corporation PDV-Caribe, the Associated Press reported. Under the agreement, Enepasa will pay 60% of oil supplied within 90 days, while paying for the rest in 23 years, with a fixed annual interest rate of one percent, plus a two-year grace period, news agency EFE reported. President Hugo Chavez conceded he reached the agreement with Enepasa because he was unable to negotiate with his Salvadoran counterpart El�as Antonio Saca's government. President Saca urged the FMLN not to try to generate among Salvadorans "false hopes" about the possibility to find cheap oil in Venezuela, El Universal relates. President Saca said in reports that oil imports requires major storage and processing facilities. "This implies we need a refinery that may cost some US$3-5 billion." * * * Fitch Ratings assigns these ratings on El Salvador: Rating Rating Date ------ ----------- Country Ceiling BB+ Jun. 18, 2004 Long Term IDR BB+ Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 Local Currency Long Term Issuer Default Rating BB+ Dec. 14, 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: May Sell Euro, Dollar Bonds to Refinance Debt ---------------------------------------------------------- An unnamed official from Venezuela's Finance Ministry told Bloomberg News, that the government considers selling euro- or dollar-denominated bonds in the local market in order to refinance its US$16 billion of local-currency debt. Details of the refinancing plan will be announced later this month, the unnamed official told Bloomberg. As part of the plan, the government may offer a swap, giving investors bonds with longer maturities in exchange for securities maturing over the next three years. About three-fourths of the government's local currency debt matures in 2008. Finance Minister Nelson Merentes said on March 1 that he wants to extend those maturities out to as long as 2015 to lighten up the debt load over the next few years, Bloomberg says. "Pushing back maturities would free up cash and make it easier for them to weather any potential storm down the line," Alejandro Gonzalez, a bond trader with Solfin Sociedad de Corretaje de Valores, explained to Bloomberg in an interview. He said the government may offer investors in a swap a combination of bonds denominated in dollars, bolivars and indexed to inflation. Venezuela may not sell bonds in the international market this year having oil tax revenue covering most of its cash needs. The official told Bloomberg that the country may buy back some of its global dollar bonds next year. As previously reported, Venezuela announced its plans to to buy back US$3.9 billion of outstanding Brady bonds to help lower its international debt to 18.3% by the end of 2007 from 23.4% at the end of last year. Venezuela also plans to pay back about US$779 million in loans to the World Bank and commercial banks ahead of schedule this month. * * * 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: Supplying Daily 3,000 Barrels of Crude to El Salvador ---------------------------------------------------------------- Venezuela will be delivering as much as 3,000 barrels of crude per day to El Salvador, Dow Jones Newswires reports. This is part of an agreement signed this week between the Venezuelan government and the El Salvadoran leftist mayors from the party Frente Farabundo Marti para la Liberacion Nacional aka FMLN. During a televised appearance on Tuesday, Venezuelan president Hugo Chavez said that El Salvador would be paying his government for the delivered crude. As agreed, the mayors will pay 60% of the oil bill within 90 days after delivery, President Chavez said. The rest would be financed over many years at a 1% interest rate. The president added that the Salvadoran mayors could seek alternative means of payment if they do not have the money. Dow Jones quoted President Chavez as saying, "I told them that if they don't have enough money they can pay us with agricultural products." According to Dow Jones, it is yet unclear when the delivery of the oil would begin. As reported in the Troubled Company Reporter on March 8, 2006, the FMLN mayors was scheduled to sign an accord on March 20, 2006, with the Venezuelan government for the creation of a joint oil company, which will supply El Salvador's low-income areas with low priced fuel. The company will serve to cut out oil middlemen and speculators that make fuel more expensive, FMLN politicians and Venezuela National Assebly President Nicolas Maduro told ABN. Dow Jones relates that the agreement will be signed without the involvement of El Salvador's President Antonio Saca. 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 co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Lyndsey Resnick, Marjorie C. Sabijon and Sheryl Joy P. Olano, Stella Mae Hechanova, Editors. Copyright 2006. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *