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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

          Tuesday, July 4, 2006, Vol. 7, Issue 131

                             Headlines

A R G E N T I N A

AQUILINO MARTINEZ: Seeks Court Approval to Reorganize Business
ASOCIACION GREMIAL: Claims Verification Deadline Is on Aug. 21
BANCO HIPOTECARIO: Launches Cash Tender Offer for Eligible Notes
BANCO MACRO: Moody's LatAm Puts BB Rating on US$18-Million Debt
BANCO PATAGONIA: Moody's LatAm Rates US$80-Million Notes at BB

BUSINESS MEDICAL: Asks for Court Approval to Restructure Debts
CENTRAL PUERTO: Restructuring US$412 Million Debts
CUESTA YOLANDA: Bertolino Named as Trustee for Bankruptcy Case
DUKING COMPUTACION: Claims Verification Deadline Is on Aug. 29
FIDEICOMISOS APEX: Fitch Arg Puts BB Rating on US$300K Debt

FIDEICOMISO BACS: Fitch Arg Junks Ratings on Two Debts
FIDEICOMISO BHN: Fitch Arg Junks Rating on US$6.9-Million Debt
FRANCISCO GALLEGO: Individual Reports Due in Court on July 7
FUNDACION EL DESCANSO: Trustee Verifies Claims Until Sept. 12
PROVINCIA DEL CHACO: Moody's LatAm Rates US$50-Mil. Debt at D

PROVINCIA DE FORMOSA: Moody's LatAm Puts D Ratings on Two Debts
PSB SA: Asks Court's Permission to Reorganize Business
SALOMON TARBUCH: Deadline for Claims Verification Is on Sept. 11
TEMUX SA: Verification of Proofs of Claim Is Until Sept. 13

* ARGENTINA: Buying Bolivian Gas at US$5 Per Million BTU

B A H A M A S

WINN-DIXIE: Court Approves Compromise Pact With Schreiber Foods

B E R M U D A

ARCH CAPITAL: S&P Assigns BB+ Preferred Stock Rating
LORAL SPACE: Skynet Will Pay Interest on Sr. Notes on July 17
LORAL SPACE: Unit Secures Satellite Contract from Echostar

B O L I V I A

* BOLIVIA: Inks US$5 Gas Price Hike Accord with Argentina

B R A Z I L

BANCO ABC: Fitch Upgrades Foreign Currency Rating to BB from BB-
BANCO BRADESCO: Fitch Ups Foreign Currency Rating to BB from BB-
BANCO DE AMAZONIA: Fitch Ups Foreign Curr. Rating to BB from BB-
BANCO DO BRASIL: Fitch Ups Foreign Curr. Rating to BB from BB-
BANCO DO ESTADO: Fitch Ups Foreign Curr. Rating to BB from BB-

BANCO ITAU: Fitch Ups Foreign Currency Rating to BB from BB-
BANCO ITAU BBA: Fitch Ups Foreign Curr. Rating to BB from BB-
BANCO ITAU HOLDING: Fitch Ups Foreign Currency Rating to BB
BANCO NACIONAL: Finances Green Line Expansion with BRL313MM
BANCO PACTUAL: Fitch Ups Foreign Currency Rating to BB from BB-

BANCO SAFRA: Fitch Ups Foreign Currency Rating to BB from BB-
BANCO SANTANDER BRASIL: Fitch Ups Foreign Curr. Rating to BB
BANCO SANTANDER MERIDIONAL: Fitch Ups Foreign Curr. Rating to BB
BANCO VOTORANTIM: Fitch Ups Foreign Curr. Rating to BB from BB-
BRADESCO SEGUROS: Fitch Ups Financial Strength Rating to BBB-

BRASIL TELECOM: Finalizes Venture with Supplier to Launch IPTV
COMPANHIA ENERGETICA: S&P Raises Corporate Credit Rating to CCC+
COMPANHIA SIDERURGICA: Fitch Ups Foreign Curr. Rating to BB+
FURNAS CENTRAIS: Moody's LatAm Ups Issuer Rating to Ba1 from Ba2
PACTUAL OVERSEAS: Fitch Upgrades Foreign Currency Rating to BB

UNIAO DE BANCOS: Fitch Ups Foreign Curr. Rating to BB from BB-
VARIG SA: Brazilian Judge Ayoub Holding Another Auction

C A Y M A N   I S L A N D S

ACA INC: Last Day to File Proofs of Claim Is on July 26
ACA NO.1: Deadline for Proofs of Claim Filing Is on July 26
DBI INC: Creditors Must File Proofs of Claim by July 26
EOLE LIMITED: Proofs of Claim Filing Deadline Is on July 26
GALAPAGOS INC: Proofs of Claim Must be Filed by July 26

GARNET PROPERTIES: Proofs of Claim Must be Filey by July 26
GLOBAL PRECIOUS: Proofs of Claim Must be Filed by July 26
INDOSIRES LIMITED: Claims Filing Deadline Is on July 26
MERRILL LYNCH: Liquidator Won't Accept Claims After July 26
RET HOLDINGS: Proofs of Claim Filing Deadline Is Set for July 26

SUCCESSOR HURRICANE MODELED: Moody's Rates Class B Notes at B1

C O L O M B I A

* COLOMBIA: Buying Back Up to COP2.5 Trillion of Peso Bonds

C O S T A   R I C A

BAC BAHAMAS: S&P Says Ratings Reflect Risks of Offshore Business
BANCO BAC: S&P Says Ratings Reflect Highly Dollarized Economy

* COSTA RICA: IDB Grants US$550,000 in Support of Coffee Growers

D O M I N I C A N   R E P U B L I C

FALCONBRIDGE LTD: Superior Court Dismisses Xstrata Application

E L   S A L V A D O R

BANCO CUSCATLAN: S&P Says Limited Growth Areas Constrain Ratings

J A M A I C A

DIGICEL LTD: Sees Growing Market for Mobile Content in Caribbean
KAISER ALUMINUM: American Re Settlement Pact Gets Court's Nod

M E X I C O

ALERIS INTERNATIONAL: Commences Tender Offer for Senior Notes
BERRY PLASTICS: Apollo & Graham Extends US$2.25B Purchase Offer
BERRY PLASTICS: Apollo Merger Cues Moody's to Review Ratings
HERBALIFE INTERNATIONAL: Moody's Rates Proposed Bank Loan at Ba1
HERBALIFE INT'L: S&P Ups Corporate Credit Rating to BB+ from BB

J.L. FRENCH: Emerges from Bankruptcy Protection
MERIDIAN AUTOMOTIVE: Can Ink Fee Letters with Potential Lenders
NORTEL NETWORKS: Outlines Biz Plan to Improve Operating Margins
NORTEL NETWORKS: Prices US$2 Billion Senior Notes Offering

P A N A M A

CHIQUITA BRANDS: Panama Requests Payment Terms Negotiation

P U E R T O   R I C O

ADELPHIA: Court OKs ACOM-M.L. Media Mediator's Final Report
ADELPHIA COMMS: Monitor Files Report on Modified Plan Term Sheet
CLINICA DE MEDICINA: Case Summary & 13 Largest Unsec. Creditors
DORAL FINANCIAL: Closes Sale of Mortgage Loans to Westernbank
GLOBAL HOME: Court Okays Dinsmore & Shohl as Special Counsel

MUSICLAND: Submits List of 60 Rejected Contracts & Leases
SUNCOM WIRELESS: Eric Haskell Continues Stint as CFO

T R I N I D A D   &   T O B A G O

BWIA WEST: Unable to Negotiate New CBA with Unions

V E N E Z U E L A

ELECTRICIDAD DE CARACAS: Gets US$50-Mil. Loan from Andean Dev't
INT'L PAPER: Selling Kraft Biz to Stone Arcade for US$155 Mil.
PETROLEOS DE VENEZUELA: May Realize US$30 Million 2006 Surplus

* VENEZUELA: Andean Dev't Approves US$800 Million in Loans


                          - - - - -


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


AQUILINO MARTINEZ: Seeks Court Approval to Reorganize Business
--------------------------------------------------------------
Aquilino Martinez e Hijos S.A.A.C.I. y F. filed with Court No.
22 in Buenos Aires a petition to reorganize its business after
defaulting on its obligations on May 2006.

The petition, once approved by the court, will allow Aquilino
Martinez to negotiate a settlement with its creditors in order
to avoid a straight liquidation.

Clerk No. 44 assists the court in the proceeding.

The debtor can be reached at:

    Aquilino Martinez e Hijos S.A.A.C.I. y F.
    Azcuenaga 597
    Buenos Aires, Argentina


ASOCIACION GREMIAL: Claims Verification Deadline Is on Aug. 21
--------------------------------------------------------------
Liliana Cecilia Bozzano, the court-appointed trustee for the
bankruptcy case of Asociacion Gremial del Personal de las
Administradoras de Fondos de Jubilaciones y Pensiones de la
Republica Argentina, will verify creditors' proofs of claim
until Aug. 21, 2006.

Court No. 23 in Buenos Aires declared Asociacion Gremial
bankrupt at the request of Cofibal Compania Financiera S.A.,
which it owes US$198,000.

Clerk No. 43 assists the court in this case.

The debtor can be reached at:

    Asociacion Gremial del Personal de las Administradoras de
    Fondos de Jubilaciones y Pensiones de la
    Republica Argentina
    Moreno 1140
    Buenos Aires, Argentina

The trustee can be reached at:

    Liliana Cecilia Bozzano
    11 de Septiembre 2140
    Buenos Aires, Argentina


BANCO HIPOTECARIO: Launches Cash Tender Offer for Eligible Notes
----------------------------------------------------------------
Banco Hipotecario S.A. commenced a tender offer to purchase for
cash all of its outstanding:

   -- Series 1 10% Notes due 2003,
   -- Series 3 10.625% Notes due 2006,
   -- Series 4 13% Notes due 2008,
   -- Series 6 12.25% Notes due 2002,
   -- Series 16 12.625% Notes due 2003,
   -- Series 17 9% Notes due 2002,
   -- Series 22 8.75% Notes due 2002,
   -- Series 23 10.75% Notes due 2004,
   -- Series 24 9% Notes due 2005, and
   -- Series 25 8% Notes due 2005.

Each series of Eligible Notes is currently in payment default.
The purpose of the offer is to repurchase the Eligible Notes
that were not exchanged in the bank's exchange offer consummated
in January 2004 following the Argentine economic crisis.

Under the tender offer, for all series of Eligible Notes, Banco
Hipotecario will pay 108% of the principal amount of the
Eligible Notes validly tendered.  No additional amount will be
paid in respect of accrued but unpaid interest or past due
interest on these Eligible Notes.

Banco Hipotecario will conduct the tender offer in accordance
with terms and conditions described in its Offer to Purchase
dated June 30, 2006.  The tender offer will expire at 11:59
p.m., New York City time on July 31, 2006, unless extended or
earlier terminated.

Holders who validly tender Eligible Notes will not have
withdrawal rights, unless Banco Hipotecario materially modifies
the terms of the tender offer as described in the Offer to
Purchase.

Citigroup Global Markets Inc. is acting as the Dealer Manager
for the Tender Offer, Dexia Banque Internationale a Luxembourg
is acting as the Luxembourg Depository, Citibank Agency & Trust
is acting as the Depositary, and Global Bondholder Services
Corporation is acting as the Information Agent.  Questions may
be directed to:

       Citigroup Global Markets Inc.
       Attention: Liability Management Group
       Tel: (800) 558-3745 for toll free
            +1-212-723-6108 for collect

Requests for documents should be directed to the information
agent at:

        Global Bondholder Services Corporation
        Tel: (866) 873-7700 for toll free
             +1-212-430-3774 for collect

Banco Hipotecario S.A. is a sociedad anonima formed under the
laws of Argentina in September 1997 to continue the business of
Banco Hipotecario Nacional.  The Bank distributes its products
through a network of 24 branches and 14 sales offices located
throughout Argentina.

                        *    *    *

As reported in the Troubled Company Reporter on March 28, 2006,
Standard & Poor's Ratings Services raised to B the foreign and
local currency counterparty credit ratings on Banco Hipotecario
S.A.  This rating action followed the upgrade on the
Republic of Argentina.

S&P raised the bank's global foreign and local currency
ratings on Argentina to 'B' from 'B-' and the ratings on the
national scale to 'raAA-' from 'raA', reflecting Argentina's
improved external and fiscal flexibility.

S&P said the outlook on the sovereign rating is stable.

S&P's transfer and convertibility risk assessment for Argentina
was raised to 'BB-', two notches higher than Argentina's foreign
currency rating.

S&P raised the rating on Banco Hipotecario one notch to
'B/Stable/--', in tandem with the sovereign upgrade on
Argentina, reflecting the close linkage between the credit
quality of the sovereign and that of its financial system.

                        *    *    *

On June 4, 2006, Moody's Investors Service took these rating
actions on Banco Hipotecario S.A.:

   -- Bank Financial Strength Rating: upgraded to E+ from E,
      with positive outlook;

   -- Long-term global local-currency deposit rating: Ba3 with
      stable outlook;

   -- Short-term global local-currency deposit rating: Not Prime
      with stable outlook; and

   -- National scale rating for foreign currency deposits:
      Ba1.ar with stable outlook.

Moody's affirmed these ratings:

   -- National scale rating for local-currency deposits: Aa1.ar
      with stable outlook;

   -- Long-term foreign currency-deposit rating: Caa1 and

   -- Short-term foreign currency-deposit rating: Not Prime.

                        *    *    *

As reported in the Troubled Company Reporter on May 16, 2006,
Fitch Ratings assigned these ratings to Banco Hipotecario S.A.:

   -- long term Issuer Default Ratings 'B-';
   -- foreign and local currency short term IDRs 'B';
   -- individual rating 'D'; and
   -- support rating '5'.

Fitch said the rating outlook is stable.


BANCO MACRO: Moody's LatAm Puts BB Rating on US$18-Million Debt
---------------------------------------------------------------
Banco Macro S.A.'s Obligaciones Negociables Subordinadas - Serie
V for US$18 million is rated BB by Moody's Latin America.


BANCO PATAGONIA: Moody's LatAm Rates US$80-Million Notes at BB
--------------------------------------------------------------
Banco Patagonia S.A.'s Obligaciones Negociables Serie 3 for
US$80 million is rated BB by Moody's Latin America.


BUSINESS MEDICAL: Asks for Court Approval to Restructure Debts
--------------------------------------------------------------
Business Medical Group S.A. filed with Court No. 11 in Buenos
Aires a petition to restructure its debts after defaulting on
its obligations on February 2006.

The petition, once approved by the court, will allow Business
Medical to negotiate a settlement with its creditors in order to
avoid a straight liquidation.

Clerk No. 2 assists the court in the proceeding.

The debtor can be reached at:

    Business Medical Group SA
    Reconquista 672
    Buenos Aires, Argentina


CENTRAL PUERTO: Restructuring US$412 Million Debts
---------------------------------------------------
Nosis reports that Central Puerto, Argentina's largest power
generator, has reached an agreement with its creditors to
restructure its debts for US$412 million.  The total amount is
comprised of US$319.6 million in capital plus US$92.6 million in
unpaid interests.

After 4 years of negotiations, Central Puerto's creditors agreed
to lower its debts by US$184.9 million, reducing the company's
indebtedness to US$227.1 million.

The refinanced debt will become due in 2011 with a fixed rate of
5% and 6.1% per year.  The agreement allows Central Puerto to
keep (from 2009) 20% of net income to reinvest and pay
dividends.

Central Puero negotiated the agreement with Merryll Lynch and
its legal counsel:

       Perez Alati, Grondona, Benites,
       Arntsen & Martinez de Hoz, Jr.
       Suipacha 1111, 18th Floor
       1368 Buenos Aires, Argentina
       Tel: +54-11-4114-3000
       Fax: +54-11-4114-3001; +54-11-4114-3002

               -- and --

       Shearman & Sterling LLP
       599 Lexington Avenue
       New York, NY 10022-6069

Central Puerto SA generates around 9% of Argentina's electricity
consumption.  It reported losses of ARS86,085,121 for the year
ended Dec. 31, 2005.  In 2004, the company registered losses of
ARS26.8 million.


CUESTA YOLANDA: Bertolino Named as Trustee for Bankruptcy Case
--------------------------------------------------------------
A court in Rosario, Santa Fe, appointed Gisela Bertolino to
supervise the bankruptcy proceeding of Cuesta Yolanda R.A.
Under bankruptcy protection, control of the company's assets is
transferred to Ms. Bertolino.

As trustee, Ms. Bertolino will:

   -- verify creditors' proofs of claim; and

   -- prepare and present individual and general reports in
      court after the claims are verified.

The verification deadline and the report submission dates have
not been disclosed.

The trustee can be reached at:

    Gisela Bertolino
    San Martin 791, Rosario
    Santa Fe, Argentina


DUKING COMPUTACION: Claims Verification Deadline Is on Aug. 29
--------------------------------------------------------------
Juan Manuel Vila Perbeils, the court-appointed trustee for
Duking Computacion S.R.L.'s bankruptcy proceeding, will verify
creditors' proofs of claim until Aug. 29, 2006.

Creditors who fail to present their proofs of claims won't
receive any post-liquidation distribution.

Under Argentine bankruptcy law, Mr. Perbeils must present in
court individual reports based on the verified claims and a
general report that contains an audit of Duking Computacion's
accounting and banking records.  The report submission dates
have not been disclosed.

The trustee can be reached at:

    Juan Manuel Vila Perbeils
    Vidal 1670
    Buenos Aires, Argentina


FIDEICOMISOS APEX: Fitch Arg Puts BB Rating on US$300K Debt
-----------------------------------------------------------
The Argentine arm of Fitch Ratings rates Fideicomisos
Financieros APEX I's debts:

   -- Valores de Deuda Fiduciaria Clase B for up to US$300,000

      * Rated date: June 26, 2006
      * Rate: BB

   -- Valores de Deuda Fiduciaria Clase A for up to U$350,000

      * Rated date: June 26, 2006
      * Rate: BBB (arg)


FIDEICOMISO BACS: Fitch Arg Junks Ratings on Two Debts
------------------------------------------------------
The Argentine arm of Fitch Ratings assigned these ratings on
Fideicomio Financiero BACS I's four debts:

   -- TD Class AV VN US$30,000,000, B-(arg)
   -- TD Class AF VN US$65,000,000, B-(arg)
   -- TD Class B VN US$12,164,000, CC(arg)
   -- CP VN US$8,689,933, C(arg)

The rates given are based on the improvements registered in 2005
and during the first three months of 2006.  The ratings also
show the unresolved legal issues resulting from the pesofication
of the titles, which affects the holders of the TD Class B.

Some holders of the TD senior debts have presented legal claims
after the pesofication was done on the TD Class AV and AF.

Considering the claims done in the pesofication of the titles,
the Fiduciario has restricted the payment of the interests of
the TD Class B and mantains them apart until the court issues a
decision, which affects the holders of the TD Class B, which
remain, together with the CP, in the hands of Banco Hipotecario.


FIDEICOMISO BHN: Fitch Arg Junks Rating on US$6.9-Million Debt
--------------------------------------------------------------
Fitch Argentina assigned these ratings on Fideicomiso Financiero
BHN II's debts:

   -- TD Class A1 VN US$44,554,000, B(arg)
   -- TD Class A2 VN US$51,363,000, B(arg)
   -- TD Clase B VN US$3,730,000, B-(arg)
   -- CP VN US$6,927,337, CCC(arg)

The rates are based on the unresolved issues from the
pesofication of the debts that have negatively affected the
investors.  The problem arose because the conversion did not
include the interests for the funds retained despite being
cancelled.  The total of money retained reached US$9.5 million,
which is enough to pay the TD Class A1, A2 debts assuming their
values in peso.

Some holders of the TD Class A1 & A2 have presented in the
Argentine court an action so that the pesofication of TD Class
A1 & A2, are resolved.  Meanwhile, representatives of the
Fideicomiso say that the titles were turned into pesos because
they were issued under Argentine law.

If considering the pesofication and payments done, the TD Class
A1 & A2 would have been canceled on March 2004 and the TD Class
B on April 2005.  But the majority of the holders of the TD
Class A1 and A2 asked the Fiduciario not to make the payments
until the court resolves the issues.


FRANCISCO GALLEGO: Individual Reports Due in Court on July 7
------------------------------------------------------------
The individual reports for the bankruptcy case of Francisco
Gallego y Remigio Hugo Gallego S.H. is due in court on
July 7, 2006.  A general report that contains an audit of the
company's accounting and banking records will follow on
Aug. 4, 2006.

The company's creditors will cast their votes on March 13, 2007,
on a settlement plan that Francisco Gallego will lay on the
table.

A court in San Miguel de Tucuman handles the case.


FUNDACION EL DESCANSO: Trustee Verifies Claims Until Sept. 12
-------------------------------------------------------------
Leandro Jose Villari, the court-appointed trustee for Fundacion
El Descanso de Betania's bankruptcy case, will verify creditors'
proofs of claim until Aug. 29, 2006.

Creditors who fail to present their proofs of claims won't
receive any post-liquidation distribution.

The verified claims will be submitted in court as individual
reports on Oct. 24, 2006.  A general report that contains an
audit of Fundacion El Descanso's accounting and banking records
will follow on Dec. 5, 2006.

The debtor can be reached at:

    Fundacion El Descanso de Betania
    Diaz Colodrero 3161/65
    Buenos Aires, Argentina

The trustee can be reached at:

    Leandro Jose Villari
    Talcahuano 316
    Buenos Aires, Argentina


PROVINCIA DEL CHACO: Moody's LatAm Rates US$50-Mil. Debt at D
-------------------------------------------------------------
Provincia del Chaco's US$50-million debt guaranteed by resource
of Federal Coparticipation is rated D by Moody's Latin America.
The debt was issued on Jan. 14, 2001.


PROVINCIA DE FORMOSA: Moody's LatAm Puts D Ratings on Two Debts
---------------------------------------------------------------
Provincia de Formosa's debts are assigned these ratings by
Moody's Argentina:

   -- Serie 02 titles of debt guaranteed by the Federal
      Coparticipation of taxes due in 2005 for US$36,000,000

      * Rated date: June 27, 2006
      * Rate: D
      * Public titles with date on Sept. 9, 1999

   -- Serie 01 of the titles of debt guaranteed by the
      coparticipation of taxes due on 2005 for US$70,000,000

      * Rated date: June 27, 2006
      * Rate: D
      * Date of document: March 31, 1999


PSB SA: Asks Court's Permission to Reorganize Business
------------------------------------------------------
Court No. 14 in Buenos Aires is studying the merits of P.S.B.
S.A.'s petition to reorganize its business after failing to pay
its debts on June 14, 2006.

The petition, once approved by the court, will allow P.S.B. S.A.
to negotiate a settlement with its creditors in order to avoid a
straight liquidation.

Clerk No. 27 assists the court in the proceeding.

The debtor can be reached at:

    P.S.B. S.A.
    Arce 949
    Buenos Aires, Argentina


SALOMON TARBUCH: Deadline for Claims Verification Is on Sept. 11
----------------------------------------------------------------
Court-appointed trustee Rut Noemi Alfici for Salomon Tarbuch e
Hijos S.R.L.'s reorganization proceeding will verify creditors'
proofs of claim until Sept. 11, 2006.

Creditors who fail to present their proofs of claims won't
receive any post-liquidation distribution.

The verified claims will be submitted in court as individual
reports on Oct. 25, 2006.  A general report that contains an
audit of Fundacion El Descanso's accounting and banking records
will follow on Dec. 7, 2006.

The company's creditors will cast their votes on April 13, 2007,
on a settlement plan that Salomon Tarbuch will lay on the table.

The trustee can be reached at:

    Rut Noemi Alfici
    Rodriguez Pena 565
    Buenos Aires, Argentina


TEMUX SA: Verification of Proofs of Claim Is Until Sept. 13
-----------------------------------------------------------
Court-appointed trustee Liliana Maria Montoro for Temux S.A.'s
bankruptcy proceeding will verify creditors' proofs of claim
until Sept. 13, 2006.

Creditors who fail to present their proofs of claims won't
receive any post-liquidation distribution.

The verified claims will be submitted in court as individual
reports on Oct. 26, 2006.  A general report that contains an
audit of Fundacion El Descanso's accounting and banking records
will follow on Dec. 7, 2006.

The trustee can be reached at:

    Liliana Maria Montoro
    Sarmiento 517
    Buenos Aires, Argentina


* ARGENTINA: Buying Bolivian Gas at US$5 Per Million BTU
--------------------------------------------------------
Argentina has agreed to a 47% hike for the price of natural gas
it imports from Bolivia, from US$3.38 to about US$5 per million
British thermal units for the rest of the year.

The two countries' presidents, Argentine Nestor Kirchner and
Bolivian Evo Morales, signed the gas accord on June 29.  Along
with the increase, the two countries also agreed to construct a
natural gas pipeline linking Bolivia's Southern gas fields with
Northern Argentina.  President Morales assured his counterpart
that Bolivia will increase the volume of gas it sells to
Argentina, which currently purchases 7.7 million cubic meters
daily.

President Morales, in a speech in Buenos Aires, expressed his
gratitude for President Kirchner's acceptance of the price hike.

"After long negotiations, after meetings between our government
ministers, I say "thank you!" for the great effort you have
taken, to sign this agreement establishing the price of US$5 to
benefit my nation," Mr. Morales told Mr. Kirchner, the Dominican
Today relates.

President Morales has been campaigning to raise gas prices to
benefit his country's indigenous population.

                       *    *    *

Fitch Ratings assigned 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




=============
B A H A M A S
=============


WINN-DIXIE: Court Approves Compromise Pact With Schreiber Foods
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
approve a compromise between Winn-Dixie Stores, Inc., and its
debtor-affiliates and Schreiber Foods, Inc., to resolve all
issues in dispute between them, including pending litigation,
past and future business relationship issues, and associated
bankruptcy claims.

As reported in the Troubled Company Reporter on June 16, 2006,
the terms of the compromise agreement includes:

    (a) Dismissal with prejudice of the lawsuit entitled
        Winn-Dixie Stores, Inc., v. Schreiber Food, Inc.,
        pending in the Eastern District of Wisconsin, Green
        Bay Division, including all issues raised in the
        complaint, the counterclaim and other filings.

    (b) Rejection of the Supply Agreement between Winn-Dixie
        Stores, Inc., and Schreiber, dated April 2, 2002,
        including any amendments.

    (c) Execution of a new supply agreement in the name of
        Winn-Dixie Procurement, Inc., that will have:

        * A three-year duration;

        * No liability termination right in favor of the Debtors
          in the event the Debtors' Chapter 11 plan of
          reorganization is not confirmed or does not become
          effective;

        * Exclusivity for Schreiber as the Debtors' sole
          Winn-Dixie branded cheese supplier;

        * No minimum volume purchase obligations on the part of
          the Debtors, but price incentives (discounts) in favor
          of the Debtors based on the pounds of product
          purchased;

        * Agreed upon pricing and agreed terms for packaging and
          promotion; and

        * Credit terms for the Debtors of net 15 EFT.

    (d) Disallowance of Claim No. 10961 against Winn-Dixie
        Stores, Inc., for US$4,066,838, when the Debtors'
        confirmed Chapter 11 plan of reorganization becomes
        effective.  However, if the new supply agreement is
        terminated because the Debtors' chapter 11 plan of
        reorganization is not confirmed or does not become
        effective, then Claim No. 10961 will be allowed as a
        general unsecured claim for US$4,066,838.

    (e) Waiver by Schreiber of all claims it had or may have had
        against the Debtors as of May 10, 2006, including,
        without limitation, any claim for liquidated damages
        arising from early termination of the Original Contract
        or any claim for rejection damages arising from the
        rejection of the Original Contract.

    (f) Waiver by the Debtors of all claims they had or may have
        had against Schreiber as of May 10, 2006, including,
        without limitation, any claim under Chapter 5 of the
        Bankruptcy Code.

Mr. Baker asserts that in the absence of the compromise, the
parties would incur costs in the continuing Litigation and the
Debtors would be forced to:

    (i) reject the Original Contract and incur the potential
        disruption of finding an alternative supplier, along
        with a significant rejection damage claim; or

   (ii) assume the Original Contract with all of its burdens and
        incur cure obligations that would have administrative
        claim status.

                         Background

Schreiber Foods, Inc., is a manufacturer and distributor of
various food products, including natural and processed cheese.
On April 2, 2002, Schreiber purchased from the Debtors a cheese
manufacturing facility.  As part of the transaction, Schreiber
and the Debtors:

    (a) entered into a 10-year supply agreement, under which
        Schreiber agreed to supply cheese products to the
        Debtors; and

    (b) settled patent infringement allegations made by
        Schreiber relating to a machine the Debtors used at the
        manufacturing facility, with the Debtors agreeing to
        make payments or provide credits to Schreiber not to
        exceed US$6,000,000, depending on contingencies.

At the time of the transaction, Schreiber was involved in patent
litigation against the manufacturer of the machine at issue.

D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, tells the Court that the Debtors agreed to the
Patent Settlement only because Schreiber had successfully
obtained on appeal the reinstatement of a US$26,000,000 jury
verdict against the machine manufacturer.  Nevertheless,
Winn-Dixie's US$6,000,000 obligation was structured to be
contingent upon further developments in Schreiber's patent
litigation against the manufacturer.

However, the trial court later vacated the reinstated jury
verdict on which the Debtors relied in agreeing to the Patent
Settlement.  Although the appeals court agreed that the jury
verdict was properly vacated, it held that Schreiber was
entitled to a new trial.

As of May 26, 2006, no new trial has ensued, due in part to
Schreiber's waiver of its damage claim against the machine
manufacturer, Mr. Baker tells the Court.

                         Litigation

The Debtors have paid US$2,300,000 of the US$6,000,000 owed
under the Patent Settlement and Schreiber was seeking to collect
the balance.

Upon learning of the events in Schreiber's patent litigation,
the Debtors filed a lawsuit against Schreiber in the United
States District Court for the Eastern District of Wisconsin,
Green Bay Division:

    (a) alleging material misrepresentation in the negotiation
        of the Patent Settlement; and

    (b) seeking a return of amounts paid and cancellation of
        further obligations owed.

Schreiber counterclaimed for the remaining amount due under the
Patent Settlement.

As of the Petition Date, the Litigation was pending and the
Original Contract continued in effect with a remaining term of
six years.

Schreiber filed in the Debtors' Chapter 11 cases proofs of claim
against the Debtors for:

    -- US$4,066,838, representing remaining amounts allegedly
       owed under the Patent Settlement; and

    -- US$2,200,408, representing prepetition amounts allegedly
       owed under the Original Contract for sales of product by
       Schreiber to the Debtors.

On Oct. 7, 2005, Schreiber also sought to compel the Debtors
to assume or reject the Original Contract.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 41; Bankruptcy Creditors' Service, Inc., 215/945-
7000).




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


ARCH CAPITAL: S&P Assigns BB+ Preferred Stock Rating
----------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
'BBB' senior debt, 'BBB-' subordinated debt, and 'BB+' preferred
stock ratings to Arch Capital Group Ltd.'s recently filed
universal shelf registration.

Standard & Poor's also said that it affirmed its 'BBB'
counterparty credit rating on ACGL and its 'A-' counterparty
credit and financial strength ratings on ACGL's operating
subsidiaries.

The outlook on all these companies is stable.

"The ratings are supported by the group's growing business
franchise, strong operating performance, strong capital
adequacy, and strong financial flexibility," said Standard &
Poor's credit analyst Laline Carvalho.  "These positive factors
are partially offset by Arch's relatively short operating
history and significant proportion of casualty writings that
have not fully matured."

The new shelf has an unlimited notional amount, which is in
accordance with the new SEC rules as of Dec. 1, 2005.  At this
stage, Standard & Poor's does not expect any potential issuances
under the shelf to lead to a material change in the group's
financial leverage, which remains within Standard & Poor's
expectations.

Standard & Poor's expects that Arch's net exposures in property
and other short-tail lines of business (particularly in Arch's
reinsurance division) will grow moderately in 2006, reflecting
the expectation of substantially improved market conditions in
these lines. Other lines of business are expected to show flat
growth for the year.

Assuming normal catastrophe losses, Standard & Poor's expects
the group's 2006 operating results to be very strong.  The
capital adequacy ratio is expected to remain strong in 2006,
reflecting anticipated strong earnings for the year, partially
offset by expected increased net exposures in property and other
short-tail lines.  Standard & Poor's expects total debt plus
preferred leverage to remain supportive of the ratings at about
18%-20% over the medium term, with fixed charge coverage
remaining very strong at more than 8x.


LORAL SPACE: Skynet Will Pay Interest on Sr. Notes on July 17
-------------------------------------------------------------
Loral Space & Communications Inc. disclosed that Loral Skynet
Corp. will pay the interest on the 14% Senior Notes on
July 17, 2006, to holders of record as of July 1, 2006 covering
the period from November 21, 2005, the issuance date of the
security, through July 14, 2006.

As previously reported, the payment period for the Loral Skynet
Notes and the Loral Skynet Preferred Stock covers from November
21, 2005, the issuance date of both securities, through
July 15, 2006.  Both were set to be payable on July 14, 2006, to
holders of record as of the close of business on July 3, 2006.

The dividend on the 12% Series A Non-Convertible Preferred Stock
will be paid on July 14, 2006 to holders of record as of July 4,
2006 covering the period from November 21, 2005, the issuance
date of the security, through July 13, 2006.  As a consequence
of the change in the payment period and the finalized
calculation of annualized Adjusted EBITDA, Loral Skynet
Corporation has updated both the final amount of the dividend
and the percentage of the dividend to be paid in cash.  The
preferred stock dividend, determined to be US$15.53 million or
US$15.53 dollars per share, will be paid 8.2% in cash and 91.8%
in PIK shares.  Any fractional PIK shares will be rounded down,
with the remainder paid in cash.  After issuance of the PIK
shares, there will be US$214.3 million of Loral Skynet Preferred
Stock outstanding.

The interest determination was made in accordance with the terms
of the Indenture dated as of November 21, 2005 governing the
Loral Skynet Notes, and the dividend determination and its
allocation between cash and PIK were made in accordance with the
terms of the Preferred Stock contained in the Restated
Certificate of Incorporation of Loral Skynet Corporation and
Exhibit A thereto.

                    About Loral Skynet

Loral Skynet -- http://www.loralskynet.com/-- delivers service
quality and range of satellite and global network service
solutions that have made it an industry leader for more than 40
years.  Through the broad coverage of the Telstar satellite
fleet, in combination with its global fiber network
infrastructure, Skynet meets the needs of companies around the
world for broadcast and data network services, Internet access,
IP and systems integration.

                    About Loral Space

Loral Space & Communications -- http://www.loral.com/-- is a
satellite communications company.  It owns and operates a fleet
of telecommunications satellites used to broadcast video
entertainment programming, distribute broadband data, and
provide access to Internet services and other value-added
communications services.  Loral also is a world-class leader in
the design and manufacture of satellites and satellite systems
for commercial and government applications including direct-to-
home television, broadband communications, wireless telephony,
weather monitoring and air traffic management.

The Company and various affiliates filed for chapter 11
protection (Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003.
Stephen Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal
& Manges LLP, represented the Debtors in their successful
restructuring and prosecution of their Fourth Amended Joint Plan
of Reorganization to confirmation on Aug. 1, 2005.  As of
Dec. 31, 2004, the Company listed assets totaling approximately
US$1.2 billion and liabilities totaling approximately US$2.3
billion.


LORAL SPACE: Unit Secures Satellite Contract from Echostar
----------------------------------------------------------
Space Systems/Loral, a subsidiary of Loral Space &
Communications entered into a contract with a subsidiary of
EchoStar Communications Corporation, Englewood Colo., to build a
1300-series satellite.

This new order from EchoStar is one of four satellite contracts
awarded to Space Systems/Loral to date in 2006.

EchoStar Communications Corporation serves more than 12.2
million satellite TV customers through its DISH NetworkT, the
fastest growing U.S. provider of advanced digital television
services in the last five years.  DISH Network offers hundreds
of video and audio channels, Interactive TV, HDTV, sports and
international programming, together with professional
installation and 24-hour customer service.

                 About Space/Systems Loral

Headquartered in Palo Alto, Calif., Space Systems/Loral -
http://www.ssloral.com/ -- is a premier designer, manufacturer,
and integrator of powerful satellites and satellite systems.
SS/L also provides a range of related services that include
mission control operations and procurement of launch services.
The company has an international base of commercial and
governmental customers whose applications include broadband
digital communications, direct-to-home broadcast, defense
communications, environmental monitoring, and air traffic
control.  SS/L satellites have amassed more than 1,300 years of
reliable on-orbit service. SS/L is ISO 9001:2000 certified.

                   About Loral Space

Loral Space & Communications -- http://www.loral.com/-- is a
satellite communications company.  It owns and operates a fleet
of telecommunications satellites used to broadcast video
entertainment programming, distribute broadband data, and
provide access to Internet services and other value-added
communications services.  Loral also is a world-class leader in
the design and manufacture of satellites and satellite systems
for commercial and government applications including direct-to-
home television, broadband communications, wireless telephony,
weather monitoring and air traffic management.

The Company and various affiliates filed for chapter 11
protection (Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003.
Stephen Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal
& Manges LLP, represented the Debtors in their successful
restructuring and prosecution of their Fourth Amended Joint Plan
of Reorganization to confirmation on Aug. 1, 2005.  As of
Dec. 31, 2004, the Company listed assets totaling approximately
US$1.2 billion and liabilities totaling approximately US$2.3
billion.




=============
B O L I V I A
=============


* BOLIVIA: Inks US$5 Gas Price Hike Accord with Argentina
---------------------------------------------------------
Argentina has agreed to a 47% hike for the price of natural gas
it imports from Bolivia, from US$3.38 to about US$5 per million
British thermal units for the rest of the year.

The two countries' presidents, Argentine Nestor Kirchner and
Bolivian Evo Morales, signed the gas accord on June 29.  Along
with the increase, the two countries also agreed to construct a
natural gas pipeline linking Bolivia's Southern gas fields with
Northern Argentina.

President Morales assured his counterpart that Bolivia will
increase the volume of gas it sells to Argentina, which
currently purchases 7.7 million cubic meters daily.

President Morales, in a speech in Buenos Aires, expressed his
gratitude for President Kirchner's acceptance of the price hike.

"After long negotiations, after meetings between our government
ministers, I say "thank you!" for the great effort you have
taken, to sign this agreement establishing the price of US$5 to
benefit my nation," Mr. Morales told Mr. Kirchner, the Dominican
Today relates.

President Morales has been campaigning to raise gas prices to
benefit his country's indigenous population.

                         *    *    *

Fitch Ratings assigned 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 ABC: Fitch Upgrades Foreign Currency Rating to BB from BB-
----------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco ABC Brasil S.A.:

   -- Foreign currency long-term IDR: to BB from BB-;

   -- Local currency long-term IDR: to BB+ from BB;

   -- National long-term rating: to 'AA-(bra)' from 'A(bra)';
      and

   -- National short-term rating to 'F1+(bra) 'from 'F1(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco ABC Brasil,
   -- Banco ABN AMRO Real,
   -- ABN Amro Arrendamento Mercantil,
   -- Banco de Investimento Credit Suisse (Brasil),
   -- Banco do Estado de Sao Paulo S.A. (Banespa),
   -- Banco Santander Brasil,
   -- Banco Santander Meridional,
   -- BankBoston Banco Multiplo,
   -- BankBoston Leasing - Arrendamento Mercantil,
   -- Banco Standard de Investimento,
   -- Banco Volkswagen,
   -- Banco Votorantim and
   -- BV Leasing - Arrendamento Mercantil

are support-driven and reflect the financial strength of their
respective ultimate parents, all of which carry a Local currency
long-term IDR investment grade ratings by Fitch; the Support
ratings of '3' assigned to these banks reflect Fitch's belief
that their parents have both the capacity and willingness to
support these entities.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO BRADESCO: Fitch Ups Foreign Currency Rating to BB from BB-
----------------------------------------------------------------
Fitch Ratings upgrades these ratings of Banco Bradesco S.A., in
the wake of the upgrade of the country's foreign and local
currency Issuer Default Ratings to 'BB'.

   -- Foreign currency long-term IDR: to BB from BB-;

   -- Local currency long-term IDR: to BBB- from BB+; and

   -- National long-term rating: to 'AA+(bra)' from 'AA(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco Bradesco,
   -- Bradesco Leasing Arrendamento Mercantil,
   -- Banco Itau Holding Financeira,
   -- Banco Itau,
   -- Banco Itau BBA,
   -- Banco ItauLeasing,
   -- Unibanco,
   -- Banco Safra and
   -- Safra Leasing

reflect the banks' intrinsic financial strength, evident in the
Individual ratings of the banks.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO DE AMAZONIA: Fitch Ups Foreign Curr. Rating to BB from BB-
----------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco da Amazonia S.A.
aka Basa:

   -- Foreign currency long-term IDR to BB from BB-;

   -- Local currency long-term IDR to BB from BB-;

   -- National long-term rating to 'AA-(bra)' from 'A+(bra)';
      and

   -- National short-term rating to 'F1+(bra) 'from 'F1(bra)'.

The long-term Outlook is Stable.

The upgrade of the Local currency long-term IDR of Banco do
Brasil and Banco da Amazonia as well as the upgrade of the
national ratings of the latter are driven by potential support
from local authorities as well as the improved financial
performance over recent years and the historical deposit
stability exhibited by Banco do Brasil.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO DO BRASIL: Fitch Ups Foreign Curr. Rating to BB from BB-
--------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco ddo Brasil S.A.:

   -- Foreign currency long-term IDR to BB from BB-; and
   -- Local currency long-term IDR to BB+ from BB.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR of Banco do
Brasil and Banco da Amazonia as well as the upgrade of the
national ratings of the latter are driven by potential support
from local authorities as well as the improved financial
performance over recent years and the historical deposit
stability exhibited by Banco do Brasil.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO DO ESTADO: Fitch Ups Foreign Curr. Rating to BB from BB-
--------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco do Estado de Sao
Paulo S.A. aka Banespa:

   -- Foreign currency long-term IDR to BB from BB-;

   -- Local currency long-term IDR to BBB- from BB+; and

   -- National long-term rating to 'AA+(bra)' from 'AA(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco ABC Brasil,
   -- Banco ABN AMRO Real,
   -- ABN Amro Arrendamento Mercantil,
   -- Banco de Investimento Credit Suisse (Brasil),
   -- Banco do Estado de Sao Paulo S.A. (Banespa),
   -- Banco Santander Brasil,
   -- Banco Santander Meridional,
   -- BankBoston Banco Multiplo,
   -- BankBoston Leasing - Arrendamento Mercantil,
   -- Banco Standard de Investimento,
   -- Banco Volkswagen,
   -- Banco Votorantim and
   -- BV Leasing - Arrendamento Mercantil

are support-driven and reflect the financial strength of their
respective ultimate parents, all of which carry a Local currency
long-term IDR investment grade ratings by Fitch; the Support
ratings of '3' assigned to these banks reflect Fitch's belief
that their parents have both the capacity and willingness to
support these entities.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures. The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries. Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO ITAU: Fitch Ups Foreign Currency Rating to BB from BB-
------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco Itau S.A.:

   -- Foreign currency long-term IDR to BB from BB-;

   -- Local currency long-term IDR to BBB- from BB+; and

   -- National long-term rating to 'AA+(bra)' from 'AA(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco Bradesco,
   -- Bradesco Leasing Arrendamento Mercantil,
   -- Banco Itau Holding Financeira,
   -- Banco Itau,
   -- Banco Itau BBA,
   -- Banco ItauLeasing,
   -- Unibanco,
   -- Banco Safra and
   -- Safra Leasing

reflect the banks' intrinsic financial strength, evident in the
Individual ratings of the banks.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO ITAU BBA: Fitch Ups Foreign Curr. Rating to BB from BB-
-------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco Itau BBA S.A.:

   -- Foreign currency long-term IDR to BB from BB-;

   -- Local currency long-term IDR to BBB- from BB+; and

   -- National long-term rating to 'AA+(bra)' from 'AA(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco Bradesco,
   -- Bradesco Leasing Arrendamento Mercantil,
   -- Banco Itau Holding Financeira,
   -- Banco Itau,
   -- Banco Itau BBA,
   -- Banco ItauLeasing,
   -- Unibanco,
   -- Banco Safra and
   -- Safra Leasing

reflect the banks' intrinsic financial strength, evident in the
Individual ratings of the banks.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO ITAU HOLDING: Fitch Ups Foreign Currency Rating to BB
-----------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco Itau Holding
Financeira S.A.:

   -- Foreign currency long-term IDR to BB from BB-;

   -- Local currency long-term IDR to BBB- from BB+; and

   -- National long-term rating to 'AA+(bra)' from 'AA(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco Bradesco,
   -- Bradesco Leasing Arrendamento Mercantil,
   -- Banco Itau Holding Financeira,
   -- Banco Itau,
   -- Banco Itau BBA,
   -- Banco ItauLeasing,
   -- Unibanco,
   -- Banco Safra and
   -- Safra Leasing

reflect the banks' intrinsic financial strength, evident in the
Individual ratings of the banks.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO NACIONAL: Finances Green Line Expansion with BRL313MM
-----------------------------------------------------------
The vice president of Banco Nacional de Desenvolvimento
Economico e Social aka BNDES, Armando Mariante, and the
president of Sao Paulo Subway, Luiz Carlos David, signed on
June 28, 2006, a BRL313 million financing agreement for Green
Line expansion to Ana Rosa-Alto do Ipiranga that extends 3.4 km,
and the construction of the Chacara Klabin, Imigrantes and Alto
do Ipiranga stations, in Sao Paulo.

The project will benefit a population of about 200,000 users of
the Sao Paulo Subway.  According to the director of the Social
Inclusion Area, Elvio Gaspar, BNDES has been supporting the
urban development of large Brazilian cities, playing its role of
stimulating and investing in the public sector, contributing
directly to the citizens' quality of life.  "It is always needed
to stress out that BNDES belongs to the country, and therefore
assists all states regardless of political colors.

According to Mr. David, "This financing allows for the Sao Paulo
Subway expansion to Ana Rosa and Alto do Ipiranga.  This will be
the first time in which the subway performs two lines
simultaneously, the two and the four."  He emphasized that the
state invested BRL950 million in line two, of which BRL331
million came from BNDES.

                        *    *    *

As reported in the 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.


BANCO PACTUAL: Fitch Ups Foreign Currency Rating to BB from BB-
---------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco Pactual S.A.:

   -- Foreign currency long-term IDR to BB from BB- with stable
      outlook; and

   -- Local currency long-term IDR to BB from BB-, still on
      rating watch positive;

   -- National long-term rating to 'AA+(bra)' from 'AA(bra)'.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

A well-defined strategy and philosophy that relies on
experienced partners, strict risk controls and technical
capabilities to preserve capital while operating profitably are
the drivers for the upgrade on Banco Pactual's and Pactual
Overseas Corporation's Local currency long-term IDR.

Additionally, the upgrade of the foreign currency long-term IDR
reflect ratings that were capped by the sovereign rating of
Brazil and remain in most cases below the Local currency long-
term IDR of the issuers.

The local currency long-term IDR for Banco Pactual S.A. and
Pactual Overseas Corporation remain on Watch Positive following
the announcement of the agreement between the shareholders of
Pactual to sell the bank and its subsidiaries to UBS A.G. (Rated
long-term IDR 'AA+'/ Outlook Stable).

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO SAFRA: Fitch Ups Foreign Currency Rating to BB from BB-
-------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco Safra S.A.:

   -- Foreign currency long-term IDR to BB from BB-;
   -- Local currency long-term IDR to BB+ from BB; and
   -- National long-term rating to 'AA(bra)' from 'AA-(bra)'.

The long-term outlook is stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco Bradesco,
   -- Bradesco Leasing Arrendamento Mercantil,
   -- Banco Itau Holding Financeira,
   -- Banco Itau,
   -- Banco Itau BBA,
   -- Banco ItauLeasing,
   -- Unibanco,
   -- Banco Safra and
   -- Safra Leasing

reflect the banks' intrinsic financial strength, evident in the
Individual ratings of the banks.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures. The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries. Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO SANTANDER BRASIL: Fitch Ups Foreign Curr. Rating to BB
------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco Santander Brasil
S.A.:

   -- Foreign currency long-term IDR to BB from BB-;
   -- Local currency long-term IDR to BBB- from BB+; and
   -- National long-term rating to 'AA+(bra)' from 'AA(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco ABC Brasil,
   -- Banco ABN AMRO Real,
   -- ABN Amro Arrendamento Mercantil,
   -- Banco de Investimento Credit Suisse (Brasil),
   -- Banco do Estado de Sao Paulo S.A. (Banespa),
   -- Banco Santander Brasil,
   -- Banco Santander Meridional,
   -- BankBoston Banco Multiplo,
   -- BankBoston Leasing - Arrendamento Mercantil,
   -- Banco Standard de Investimento,
   -- Banco Volkswagen,
   -- Banco Votorantim and
   -- BV Leasing - Arrendamento Mercantil

are support-driven and reflect the financial strength of their
respective ultimate parents, all of which carry a Local currency
long-term IDR investment grade ratings by Fitch; the Support
ratings of '3' assigned to these banks reflect Fitch's belief
that their parents have both the capacity and willingness to
support these entities.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO SANTANDER MERIDIONAL: Fitch Ups Foreign Curr. Rating to BB
----------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco Santander
Meridional S.A.:

   -- Foreign currency long-term IDR to BB from BB-;
   -- Local currency long-term IDR to BBB- from BB+; and
   -- National long-term rating to 'AA+(bra)' from 'AA(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco ABC Brasil,
   -- Banco ABN AMRO Real,
   -- ABN Amro Arrendamento Mercantil,
   -- Banco de Investimento Credit Suisse (Brasil),
   -- Banco do Estado de Sao Paulo S.A. (Banespa),
   -- Banco Santander Brasil,
   -- Banco Santander Meridional,
   -- BankBoston Banco Multiplo,
   -- BankBoston Leasing - Arrendamento Mercantil,
   -- Banco Standard de Investimento,
   -- Banco Volkswagen,
   -- Banco Votorantim and
   -- BV Leasing - Arrendamento Mercantil

are support-driven and reflect the financial strength of their
respective ultimate parents, all of which carry a Local currency
long-term IDR investment grade ratings by Fitch; the Support
ratings of '3' assigned to these banks reflect Fitch's belief
that their parents have both the capacity and willingness to
support these entities.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BANCO VOTORANTIM: Fitch Ups Foreign Curr. Rating to BB from BB-
---------------------------------------------------------------
Fitch Ratings upgraded these ratings of Banco Votorantim S.A.:

   -- Foreign currency long-term IDR: to BB from BB-;
   -- Local currency long-term IDR: to BBB- from BB+; and
   -- National long-term rating: to 'AA+(bra)' from 'AA(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco ABC Brasil,
   -- Banco ABN AMRO Real,
   -- ABN Amro Arrendamento Mercantil,
   -- Banco de Investimento Credit Suisse (Brasil),
   -- Banco do Estado de Sao Paulo S.A. (Banespa),
   -- Banco Santander Brasil,
   -- Banco Santander Meridional,
   -- BankBoston Banco Multiplo,
   -- BankBoston Leasing - Arrendamento Mercantil,
   -- Banco Standard de Investimento,
   -- Banco Volkswagen,
   -- Banco Votorantim and
   -- BV Leasing - Arrendamento Mercantil

are support-driven and reflect the financial strength of their
respective ultimate parents, all of which carry a Local currency
long-term IDR investment grade ratings by Fitch; the Support
ratings of '3' assigned to these banks reflect Fitch's belief
that their parents have both the capacity and willingness to
support these entities.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BRADESCO SEGUROS: Fitch Ups Financial Strength Rating to BBB-
-------------------------------------------------------------
Fitch Ratings upgraded these ratings of Bradesco Seguros S.A.:

   -- Insurer financial strength rating to 'BBB-' from 'BB';
      and

   -- National Insurer financial strength rating to 'AA+(bra)'
      from 'AA(bra)'.

The long-term Outlook is Stable.

A leading market position, integration with its parent and a
solid business operations are the drivers for the upgrades on
Bradesco Seguro's Insurer Financial Strength and National
Insurer Financial Strength ratings.

Additionally, the upgrade of the Foreign currency long-term IDR
reflect ratings that were capped by the sovereign rating of
Brazil and remain in most cases below the Local currency long-
term IDR of the issuers.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


BRASIL TELECOM: Finalizes Venture with Supplier to Launch IPTV
--------------------------------------------------------------
Director Marcelo Frasson of Brasil Telecom Participacoes S.A.,
announced at the IMS Forum in Sao Paulo that the company is in
its final stages of negotiation with a telecoms supplier, whose
name the company would not disclose, to launch its IPTV program,
Business News Americas reports.

According to Agencia Estado, Mr. Frasson disclosed that the
launching of the IPTV program will be on September.

At the forum, Mr. Frasson did not say how much is the investment
cost for the program but said that the supplier would handle
most of it.

"The [telecoms] supplier will receive payment from sales of the
service," M. Frasson told BNamericas.

Mr. Frasson related to BNamericas that the program is directed
to a selective market in its client base in order to:

   -- reduce costs;
   -- deliver new services;
   -- deliver video-on-demand programs;
   -- offer services such as interactive games and live
      images of callers.

                        *    *    *

Brasil Telecom SA is controlled by Brasil Telecom Participacoes
SA which is the publicly-listed holding company for 10 fixed-
line operating companies located in the western, central, and
southern regions of Brazil and in the Federal District region.

Brasil Telecom Participacoes' local currency long-term debt
carries Fitch's BB+ rating.


COMPANHIA ENERGETICA: S&P Raises Corporate Credit Rating to CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Companhia Energetica de Sao Paulo and the ratings on
several of CESP's debt issues to CCC+ from CCC.  At the same
time, Standard & Poor's raised its Brazil national scale ratings
on CESP and several of the company's issues to 'brCCC+' from
'brCCC'.  The outlook was revised to positive from stable in
both scales.

CESP is Brazil's and Latin America's third-largest electricity
generator, with 7,456 MW of installed capacity and 3,916 MW of
assured energy.  CESP is a state-owned company whose primary
shareholder is the government of the state of Sao Paulo, with
74% of the voting common shares.

"The upgrade on CESP mirrors the conclusion of the sale of
Companhia de Transmissao de Energia Eletrica Paulista by the
state of Sao Paulo, which will use the resources to capitalize
CESP and pay down Banco Nacional de Desenvolvimento Economico e
Social debts due in the short and long terms," said Standard &
Poor's credit analyst Juliana Gallo.

"This, coupled with Brazilian real 650 million resources from
CESP's recently launched credit rights investment fund
transaction, will help the company manage part of its short-term
requirements and reduce overall financial risk," said Ms. Gallo.

The CCC+ ratings also incorporate that CESP will continue to
work on its short-term debt refinancing during 2006.  In
addition, CESP's cash generation looks more predictable from
2006 on, as it is fully contracted for electricity sales in the
next two years.

The outlook revision to positive from stable reflects the
potential for an upgrade after the expected successful
conclusion of CESP's new share offer in 2006, which would allow
the company to raise a material amount of new money to pay off
debts and improve its amortization profile. This, coupled with
expected higher average prices for electricity in CESP's
contracts, might result in higher cash generation and better
credit protection measures for the company.

Moreover, we believe that the state of Sao Paulo is somewhat
willing to help CESP resolve its debt profile for a future
privatization.


COMPANHIA SIDERURGICA: Fitch Ups Foreign Curr. Rating to BB+
------------------------------------------------------------
Fitch Ratings upgraded these ratings of Companhia Siderurgica
Nacional aka CSN:

   -- Foreign Currency IDR: To BB+ with Stable Outlook, from BB
      with Positive Outlook;

   -- National Long-term Rating: To 'AA(bra)' from 'AA-(bra)';
      and

   -- BRL1.5 billion 2nd, 3rd and 4th Debenture Issuances due
      2006, 2008 and 2012: To 'AA(bra)' from 'AA-(bra)'.

These rating actions follow Fitch's upgrade of the long-term
foreign and local currency IDRs of the Federative Republic of
Brazil to BB, from BB- on June 29, 2006.

"Our foreign currency corporate upgrades reflect Brazil's
improving external balance sheet, which translates to lower risk
for the Brazilian corporates", said Daniel R. Kastholm, head of
Latin America Corporate Ratings at Fitch.  "Lower transfer and
convertibility risk and a more robust sovereign and economic
environment bode well for corporate fundamentals.  Exporters in
particular have benefited from a favorable global environment
and maintained strong performance despite the strengthening of
the Brazilian Real."

"Brazilian corporates have taken advantage of strong global
liquidity to extend maturities, lower financing costs and
increase equity capital which collectively have strengthened
many corporate balance sheets," said Rafael Guedes, Managing
Director of Fitch Brasil. "Lower nominal and real interest rates
in Brazil, further underpin economic recovery in Brazil, which
should benefit many of the private sector corporates.
Improvement in regulated industries and high commodity prices
have also helped bolster corporate credit fundamentals.  These
factors, among others are reflected in our national scale long-
term rating upgrades."

Fitch's upgrade of the Federative Republic of Brazil's ratings
are a result of the country's on-going improvement in public and
private external finances and a macroeconomic policy framework
that has proved robust in the face of political and financial
market pressures.  The rating upgrades also reflect Brazil's
enhanced external balance sheet and the fact that the country
has weathered the latest storm affecting the capital markets in
emerging countries.  Fitch believes that Brazil's next
administration will continue to maintain prudent fiscal and
monetary policies but that it is unlikely to implement deep
structural reforms.

Many Brazilian corporate ratings continue to be linked to the BB
foreign currency IDR of the sovereign.


FURNAS CENTRAIS: Moody's LatAm Ups Issuer Rating to Ba1 from Ba2
----------------------------------------------------------------
Moody's America Latina upgraded the Issuer Rating of Furnas
Centrais Eletricas S.A. to Ba1 from Ba2 on its global scale and
to Aa1.br from Aa3.br on its Brazilian national scale.  The
upgrade reflects strong financial performance that is
underpinned by contractual arrangements, and the benefits of
ownership by Centrais Eletricas Brasileiras S.A. -- Eletrobras.
This rating action concludes the review for possible upgrade.
The rating outlook is stable.

Over 99% of Furnas' shares are owned by Eletrobras.  About 78%
of the voting shares and 66% of the total shares of Eletrobras
are held directly and indirectly by the Federal Government of
Brazil (Ba3; positive outlook).  Accordingly, Eletrobras would
be classified as a Government Related Issuer or GRI in
accordance with Moody's rating methodology for GRIs if it was a
rated issuer.  Moody's believes that there is a high likelihood
that Eletrobras would receive support from the Federal
Government if needed, and its credit quality is also viewed as
having a high dependence relationship with the government.

The rating of Furnas incorporates one-notch uplift in the global
scale from its ownership by Eletrobras, reflecting a substantial
degree of financial and operational integration.  Furnas has
benefited from the regular support from Eletrobras and the
Federal Government via direct loans and guarantees that
represent some 66% and 27%, respectively, of the company's total
adjusted debt of BRL 4,555 million at December 31, 2005.
Moody's believes that Furnas has critical importance for
Eletrobras' strategic role in the nation's power sector,
representing some 25% and 34% of Eletrobras' total power
generation and transmission capacity, respectively.

In accordance with Moody's global rating methodology for
electric utilities, Furnas is viewed as being in the lowest
third of the high industry risk category due to a significant
regulatory risk in terms of predictability and stability of
regulated cash flows.  Moody's classifies the supportiveness of
the Brazilian regulatory environment as 4.  Prospective key
financial metrics include a ratio of FFO/Debt that is expected
to be about 25% over the next several years, which would be
consistent with other Brazilian electric utilities rated in the
Ba category, such as Rio Grande Energia and Companhia Paranaense
de Energia -- Copel.

Furnas' rating reflects its position as one of Brazil's largest
electricity generation and transmission companies, with revenues
and cash flow that are underpinned by long-term power
agreements.  The low operating costs of Furnas' hydropower
plants contribute to healthy EBITDA margins of about 30%.  The
rating also considers risks that include devaluation and
interest rate exposures arising from unhedged debt, and the
potential for increased leverage to support capital spending.

The Aa1.br national scale rating assigned to Furnas reflects the
standing of the company's issuance credit quality relative to
its domestic peers.  Moody's National Scale Ratings are intended
as relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs in Brazil are designated by
the ".br" suffix.  NSRs differ from global scale ratings in that
they are not globally comparable to the full universe of Moody's
rated entities, but only with other rated entities within the
same country.

Furnas' revenues are backed by long-term power purchase
agreements and transmission service contracts.  The company
participated in 3 out of 5 energy auctions held so far within
the new regulatory framework, having achieved above-average
rates resulting in more predictable operating margins and cash
flows.  Under the present regulatory framework, Brazilian power
generation companies bear the ultimate risk of energy demand
fluctuation, with consequent eventual exposure to the spot
market. Moody's believes that the low operating costs of Furnas'
hydropower plants, which result in EBITA margins in the high 20%
range (excluding the effect of trading activity of
Eletronuclear's energy that provides marginal gains), partially
mitigates the demand fluctuation risk.

The combination of strong internal cash generation, disciplined
dividends distribution, and moderate indebtedness have sustained
healthy coverage metrics, such as RCF to Debt of 24% and FFO to
Interest of 4.2x, based on a 3-year average.  Free cash flow
coverage metrics, however, have been affected by Furnas'
substantial capital expenditure outlays following the 2001-2002
rationing period, when the company invested about BRL4 billion
in power generation and transmission projects to support the
country's anticipated energy needs.  Moody's believes that
Furnas will continue to focus on the expansion of its power
generation and transmission capacity in the foreseeable future,
and expects that the company will continue to finance its
investments prudently in order to maintain adequate credit
metrics for its rating category.

The stable outlook reflects Moody's expectation that the company
will continue to benefit from the country's increasing demand
for electricity, while prudently managing its investments in
order to maintain adequate debt coverage metrics for the rating
category, including a ratio of FFO to Debt of at least 25%.

Headquartered in Rio de Janeiro, Brazil, Furnas Centrais
Eletricas S.A. is one of Brazil's largest electricity generation
and transmission utilities.


PACTUAL OVERSEAS: Fitch Upgrades Foreign Currency Rating to BB
--------------------------------------------------------------
Fitch Ratings upgraded these ratings of Pactual Overseas Corp.:

   -- Foreign currency long-term IDR to BB from BB- with stable
      outlook; and

   -- Local currency long-term IDR to BB from BB-, still on
      rating watch positive.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

A well-defined strategy and philosophy that relies on
experienced partners, strict risk controls and technical
capabilities to preserve capital while operating profitably are
the drivers for the upgrade on Banco Pactual's and Pactual
Overseas Corporation's Local currency long-term IDR.

Additionally, the upgrade of the Foreign currency long-term IDR
reflect ratings that were capped by the sovereign rating of
Brazil and remain in most cases below the Local currency long-
term IDR of the issuers.

The Local currency long-term IDR for Banco Pactual S.A. and
Pactual Overseas Corporation remain on Watch Positive following
the announcement of the agreement between the shareholders of
Pactual to sell the bank and its subsidiaries to UBS A.G. (Rated
long-term IDR 'AA+'/ Outlook Stable).

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


UNIAO DE BANCOS: Fitch Ups Foreign Curr. Rating to BB from BB-
--------------------------------------------------------------
Fitch Ratings upgraded these ratings of Unibanco-Uniao de Bancos
Brasileiros S.A.:

   -- Foreign currency long-term IDR to BB from BB-;

   -- Local currency long-term IDR to BB+ from BB; and

   -- National long-term rating to 'AA(bra)' from 'AA-(bra)'.

The long-term Outlook is Stable.

Fitch Ratings disclosed the several rating upgrades affecting
Brazilian banks, in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB'.

The upgrade of the Local currency long-term IDR and national
ratings of:

   -- Banco Bradesco,
   -- Bradesco Leasing Arrendamento Mercantil,
   -- Banco Itau Holding Financeira,
   -- Banco Itau,
   -- Banco Itau BBA,
   -- Banco ItauLeasing,
   -- Unibanco,
   -- Banco Safra and
   -- Safra Leasing

reflect the banks' intrinsic financial strength, evident in the
Individual ratings of the banks.

Fitch's upgrade of Brazil's ratings is a result of the country's
on-going improvement in public and private external finances and
a macroeconomic policy framework that has proved robust in the
face of political and financial market pressures.  The rating
upgrades also reflect Brazil's enhanced external balance sheet
and the fact that the country has weathered the latest storm
affecting the capital markets in emerging countries.  Fitch
believes that Brazil's next administration will continue to
maintain prudent fiscal and monetary policies but that it is
unlikely to implement deep structural reforms.

Fitch recognizes the impact of a improving external accounts of
the sovereign, the benefits of economic stabilization,
decreasing interest rates and inflation on the operating
environment for the Brazilian banking system, which will enable
the strongest institutions to further expand operations and
diversify earnings stream.


VARIG SA: Brazilian Judge Ayoub Holding Another Auction
-------------------------------------------------------
VARIG, S.A., is back on the auction block after Judge Luiz
Roberto Ayoub of the 8th District Bankruptcy Court in
Rio de Janeiro, Brazil, scheduled a new auction of its assets.

According to published reports, the auction will take place
after a meeting of VARIG's creditors on July 10, 2006, to
consider Volo Logistics Brasil's US$500,000,000 offer.

The auction will be held on July 12, 2006, The Associated Press
says.  Macauhub.com reports that the airline will be auctioned
off on July 11.

Aside from Volo, no other party has tendered a bid for VARIG.

Volo acquired VARIG's cargo transport unit, Varig Logistica S.A.
in January 2006.  Volo have been extending help to keep VARIG
running.  As previously reported, Volo gave VARIG more than
US$3,000,000 on June 26, 2006, so the airline could pay its
bills and avert a shutdown.

According to Investnews (Brazil), Volo had already made its
fifth deposit to VARIG's cash flow on June 30.  Since June 28,
Volo had already deposited US$4.8 million, Investnews says.

Macauhub.com says the funds will be returned, together with a
10% premium, if Volo lose out in the auction.

                         About 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. 24; Bankruptcy
Creditors' Service, Inc., 215/945-7000)




===========================
C A Y M A N   I S L A N D S
===========================


ACA INC: Last Day to File Proofs of Claim Is on July 26
-------------------------------------------------------
Aca Inc.'s creditors are required to submit proofs of claim by
July 26, 2006, to the company's liquidator:

   Griffin Management Limited
   Caledonian Bank & Trust Limited
   Caledonian House, 69 Dr. Roy's Drive
   P.O. Box 1043, George Town
   Grand Cayman, Cayman Islands

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Aca Inc.'s shareholders agreed on June 5, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

  Janeen Aljadir
  Caledonian Bank & Trust Limited
  Caledonian House, 69 Dr. Roy's Drive
  P.O. Box 1043, George Town
  Grand Cayman, Cayman Islands
  Tel: (345) 949-4943
  Fax: (345) 814-4859


ACA NO.1: Deadline for Proofs of Claim Filing Is on July 26
-----------------------------------------------------------
Aca No.1 Inc.'s creditors are required to submit proofs of claim
by July 26, 2006, to the company's liquidator:

   Griffin Management Limited
   Caledonian Bank & Trust Limited
   Caledonian House, 69 Dr. Roy's Drive
   P.O. Box 1043, George Town
   Grand Cayman, Cayman Islands

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Aca No.1's shareholders agreed on June 5, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

  Janeen Aljadir
  Caledonian Bank & Trust Limited
  Caledonian House, 69 Dr. Roy's Drive
  P.O. Box 1043, George Town
  Grand Cayman, Cayman Islands
  Tel: (345) 949-4943
  Fax: (345) 814-4859


DBI INC: Creditors Must File Proofs of Claim by July 26
-------------------------------------------------------
DBI Inc.'s creditors are required to submit proofs of claim by
July 26, 2006, to the company's liquidator:

   Griffin Management Limited
   Caledonian Bank & Trust Limited
   Caledonian House, 69 Dr. Roy's Drive
   P.O. Box 1043, George Town
   Grand Cayman, Cayman Islands

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

DBI Inc.'s shareholders agreed on June 5, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

  Janeen Aljadir
  Caledonian Bank & Trust Limited
  Caledonian House, 69 Dr. Roy's Drive
  P.O. Box 1043, George Town
  Grand Cayman, Cayman Islands
  Tel: (345) 949-4943
  Fax: (345) 814-4859


EOLE LIMITED: Proofs of Claim Filing Deadline Is on July 26
-----------------------------------------------------------
Eole Limited's creditors are required to submit proofs of claim
by July 26, 2006, to the company's liquidator:

   Buchanan Limited
   P.O. Box 1170, George Town
   Grand Cayman, Cayman Islands

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Eole Limited's shareholders agreed on June 15, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

   Francine Jennings
   P.O. Box 1170 GT, Grand Cayman
   Tel: (345) 949-0355
   Fax: (345) 949-0360


GALAPAGOS INC: Proofs of Claim Must be Filed by July 26
-------------------------------------------------------
Galapagos Inc.'s creditors are required to submit proofs of
claim by July 26, 2006, to the company's liquidator:

   Griffin Management Limited
   Caledonian Bank & Trust Limited
   Caledonian House, 69 Dr. Roy's Drive
   P.O. Box 1043, George Town
   Grand Cayman, Cayman Islands

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Galapagos Inc.'s shareholders agreed on June 15, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

   Janeen Aljadir
   Caledonian Bank & Trust Limited
   Caledonian House, 69 Dr. Roy's Drive
   P.O. Box 1043, George Town
   Grand Cayman, Cayman Islands
   Tel: (345) 949-4943
   Fax: (345) 814-4859


GARNET PROPERTIES: Proofs of Claim Must be Filey by July 26
-----------------------------------------------------------
Garnet Properties Corp.'s creditors are required to submit
proofs of claim by July 26, 2006, to the company's liquidators:

   Mark Wanless
   Liam Jones
   Maples Finance Jersey Limited
   2nd Floor, Le Masurier House
   La Rue Le Masurier
   St. Helier, Jersey JE2

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Garnet Properties' shareholders agreed on June 14, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


GLOBAL PRECIOUS: Proofs of Claim Must be Filed by July 26
---------------------------------------------------------
Global Precious Metals Fund Limited's creditors are required to
submit proofs of claim by July 26, 2006, to the company's
liquidators:

   Glen Trenouth
   BDO Tortuga, 5th Floor
   Zephyr House, Mary Street
   Grand Cayman, Cayman Islands

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Global Precious' shareholders agreed on Feb. 1, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

   Glen Trenouth
   P.O. Box 31118 SMB
   Grand Cayman, Cayman Islands
   Tel: (345) 943 8800
   Fax: (345) 943 8801


INDOSIRES LIMITED: Claims Filing Deadline Is on July 26
-------------------------------------------------------
Indosires Limited's creditors are required to submit proofs of
claim by July 26, 2006, to the company's liquidator:

   David Dyer
   Deutsche Bank (Cayman) Limited
   P.O. Box 1984, George Town
   Grand Cayman, Cayman Islands

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Indosires Limited's shareholders agreed on June 16, 2006, for
the company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


MERRILL LYNCH: Liquidator Won't Accept Claims After July 26
-----------------------------------------------------------
Merrill Lynch QA Long/Short Equity Master Fund Limited's
creditors are required to submit proofs of claim by
July 26, 2006, to the company's liquidators:

   John Cullinane
   Derrie Boggess
   c/o Walkers SPV Limited
   P.O. Box 908, George Town
   Grand Cayman, Cayman Islands
   Tel: (345) 914-6305

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Merrill Lynch's shareholders agreed on June 16, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


RET HOLDINGS: Proofs of Claim Filing Deadline Is Set for July 26
----------------------------------------------------------------
Ret Holdings, Inc.'s creditors are required to submit proofs of
claim by July 26, 2006, to the company's liquidators:

   Mark Wanless
   Liam Jones
   Maples Finance Jersey Limited
   2nd Floor, Le Masurier House
   La Rue Le Masurier
   St. Helier, Jersey JE2

Creditors who are not able to comply with the July 26 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Ret Holdings' shareholders agreed on June 14, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


SUCCESSOR HURRICANE MODELED: Moody's Rates Class B Notes at B1
--------------------------------------------------------------
Moody's Investors Service assigned ratings to these Notes issued
by Successor Hurricane Modeled Ltd., a special purpose Cayman
Islands exempted company for the benefit of Swiss Reinsurance
Company:

   -- B1 to the $42,250,000 Series 1 Class B Principal At-Risk
      Variable Rate Notes due December 6, 2007.

Investors in the Notes effectively provide reinsurance coverage
to Swiss Reinsurance Company from certain hurricanes in the
North Atlantic.

Moody's ratings address the ultimate cash receipt of all
required interest and principal payments as provided by the
governing documents, and is based on the expected loss posed to
the note holders relative to the promise of receiving the
present value of such payments.

The rating is based on Moody's analysis of the probability of
occurrence of qualifying events, their timing and the severity
of losses experienced by investors should those events occur
during the risk period.

Moody's review of the transaction has included extensive review
of the technical basis, methodology and historical data used to
develop the probabilistic risk model used by EQECAT for the
analysis of potential losses and sensitivity analysis of
critical parameters of the model.

This review, together with a detailed analysis of the
transaction's legal structure and the financial strength of the
various parties to the transaction, provided Moody's with
sufficient comfort that the resulting ratings adequately
captures the risk to investors in these securities.




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


* COLOMBIA: Buying Back Up to COP2.5 Trillion of Peso Bonds
-----------------------------------------------------------
Colombia plans to buy back as much as 2.5 trillion pesos (US$969
million) of local peso-denominated bonds in a bid to bolster
demand and push down yields, Bloomberg News reports.

Finance Minister Alberto Carrasquilla was quoted by Bloomberg as
saying that the government will repurchase the bonds within the
next 90 days.  The minister did not say what particular bonds
the government will repurchase.

The repurchase, according to economist Matthew Festa at 4Cast
Inc., suggests the government's concern of overselling in the
local market.

"We're seeing inefficiencies in our bond curve, reflected by the
price of the bonds, and some of these may be caused by a lack of
liquidity,'' Minister Carrasquilla told Bloomberg. "This move
should help yields fall to levels which reflect the positive
news out of Colombia."

To refinance the repurchase, the government may sell bonds in
international markets while waiting to collect the proceeds from
the sale of state-owned Bancafe and Ecogas, public credit
director Julio Torres said, Bloomberg says.

Minister Carrasquilla disclosed that the government may start
selling this year the US$1.5 billion of foreign bonds it has
planned for its 2007 budget, Bloomberg relates.

Additionally, Colombia will buy back a few weeks ahead of
schedule fixed-rate local bonds maturing in August.  The
purchase of the securities maturing in July will put about 6
trillion pesos into the bond market, Bloomberg says.

                        *    *    *

On May 30, 2005, Fitch Ratings 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.




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


BAC BAHAMAS: S&P Says Ratings Reflect Risks of Offshore Business
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned these ratings to BAC
Bahamas Bank:

   -- foreign currency credit rating:  BB/Stable/B;

   -- foreign currency counterparty credit rating: BB/Stable/B;
      and

   -- foreign currency certificate of deposit: BB/B.

The ratings assigned to BAC Bahamas Bank are based on the
foreign currency ratings assigned to Banco BAC San Jose S.A.
BAC Bahamas is the offshore bank of BAC San Jose and mirrors the
Costa Rican onshore bank.  The two entities share the same
client base, and follow the same corporate policies, with the
vast majority of business and assets originated in Costa Rica,
denominated in U.S. dollars, and registered offshore.  The
outlook is stable.

As of March 2006, BAC Bahamas had reported assets of US$276
million, of which 84% was represented by loans granted to Costa
Rican companies, and the rest represented mainly cash and
securities.  Loans and deposits are originated in Costa Rica,
following BAC San Jose's standards.  Although Costa Rican
regulation has made progress in supervising consolidated groups,
including both the on-shore and the offshore operations,
fractional control over the offshore operations still poses
risks to the Costa Rican banking system, based on the contingent
liability that offshore units could represent to the banks'
domestic operations.  In the case of BAC, there has been more
openness than with other players in the country to be regulated
in a consolidated manner; however, the contingency continues for
the system as a whole.  In addition, the increasing
dollarization of the Costa Rican economy could affect asset
quality in the system in general, and BAC Bahamas in particular.
The bank and the system are exposed to foreign-exchange currency
risk in the case of a devaluation of the Costa Rican colon. The
entire loan portfolio is dollar-denominated and most of the
bank's clients are not net dollar generators.

The evolution of asset quality has been good, with nonperforming
assets representing 0.4% of the total loan portfolio, and
reserve coverage of 5x as of March 2006.  Profitability remains
adequate with an annualized ROA of 2.2% as of March 2006, aided
by a slightly higher interest margin and low operating expenses.
The bank received a capital injection of $6 million in 2004 to
support loan expansion.  With this, the adjusted common equity-
to-assets ratio was strengthened to 11.9%, compared to 8.9% in
2003.  The ratings on BAC Bahamas are constrained by the foreign
currency rating assigned to BAC San Jose, because the ability of
the Costa Rican entity to support the Bahamian bank is limited
by its ability to contribute foreign currency.

The stable outlook mirrors the outlook on the sovereign credit
ratings on Costa Rica, and reflects BAC San Jose's and BAC
Bahamas Bank's significant exposure to that country.  All things
being equal, a rating or outlook change on the sovereign would
prompt a similar change on the ratings or outlook on the banks.
The stable outlook takes into consideration expectations that
the banks will continue to perform adequately and expand their
businesses under the current policies.


BANCO BAC: S&P Says Ratings Reflect Highly Dollarized Economy
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned these ratings on
Banco BAC San Jose:

   -- Local currency credit rating:  BB+/Stable/B;
   -- Foreign currency credit rating:  BB/Stable/B;
   -- Local currency counterparty credit:  BB+/Stable/B;
   -- Foreign currency counterparty credit:  BB/Stable/B;
   -- Local currency certificate of deposit:  BB+/B; and
   -- Foreign currency certificate of deposit:  BB/B.

The ratings on Banco BAC San Jose S.A. reflect the risks
inherent in a highly dollarized balance sheet, and the
nondiversification of the Costa Rican economy.  The ratings on
Banco BAC San Jose S.A. are underpinned by the bank's good
financial profile, the benefits from its ownership by one of the
most important financial institutions in Central America, BAC
International Bank Inc. (BIB; BBB-/Stable/A-3), and its
increasing position in the growing retail sector in Costa Rica.

The increasing dollarization of the economy could affect asset
quality in the system in general, and BAC San Jose in
particular.  In this sense, the bank and the system are exposed
to foreign-exchange currency risk in the case of a devaluation
of the Costa Rican colon, as more than 50% of the system loan
portfolios are dollar-denominated, and most of their clients are
not net dollar generators.  The bank's capital adequacy could
also be compromised, as the majority of risk-weighted assets are
in dollars.  In addition, as there is no deposit insurance in
Costa Rica for private banks, and as the government is the
guarantor of deposits held at public banks, in a systemic
crisis, there is a potential risk of the clients transferring
their deposits to public from private banks, inducing fragility
for the private banks.  The bank protects itself against
devaluation risk with conservative loan-to-values and stringent
underwriting policies.

Although Costa Rican regulation has made progress in supervising
consolidated groups, including both the on-shore and the
offshore operations, fractional control over the offshore
operations still poses risks to the Costa Rican banking system,
based on the contingent liability that offshore units could
represent to the banks' domestic operations.  In the case of
BAC, there has been more openness than with other players in the
country to be regulated in a consolidated manner; however, the
contingency continues for the system as a whole.

Ratings are underpinned by BAC San Jos,'s good financial
profile.  Profitability has been high, with ROAs of more than
2.8% in the past four years thanks to its business mix and
decreasing funding costs.  Profitability is expected to remain
high, leveraging on high-yield, and commission-intensive loans,
and good prospects for growth.  In addition to being profitable,
asset quality has been adequate, as nonperforming assets have
been low, thanks to a diversified loan portfolio with no
significant concentrations by industry, economic group, or
individual exposures, which is unusual for a bank operating in a
small market.  NPAs have been maintained below 1% in the past
three years as a consequence of conservative underwriting
policies and adequate collection.  At the same time, loan-loss
reserves have been maintained above 1.1x in the same period.
Adequate asset quality is expected to continue in the future.
Nevertheless, the high exposure to dollar-denominated loans
continues to be an important risk to the overall loan portfolio.

The ownership of BIB and Credomatic International Corp. gives
BAC San Jose access to a common brand and regional presence.  In
addition, BAC San Jos,'s increasing participation in cash
management services has provided an edge in the Costa Rican
market, as this participation, along with its credit card
business, allows the bank to generate a significant amount of
fee income.  BAC San Jose is increasing its position in the
growing retail sector in Costa Rica, mainly in high-end mortgage
loans and credit cards with conservative LTVs and revenues-to-
debt ratios.

The stable outlook mirrors the outlook on the sovereign credit
ratings on Costa Rica, and reflects BAC San Jos,'s significant
exposure to that country.  All things being equal, a rating or
outlook change on the sovereign would prompt a similar change on
the ratings or outlook on the bank.  The stable outlook takes
into consideration expectations that the bank will continue to
perform adequately and expand its businesses under the current
policies.


* COSTA RICA: IDB Grants US$550,000 in Support of Coffee Growers
----------------------------------------------------------------
The Inter-American Development Bank's Social Entrepreneurship
Program will support with US$550,000 an agricultural
diversification project for small-scale coffee growers in one of
the most disadvantaged areas of Costa Rica.

The resources from the Norwegian Development Fund for Latin
America consist of a US$415,000 loan, repayable in colones, and
a US$135,000 technical cooperation grant for the project's
executing agency, Asociacion de Productores Agricolas y de
Comercializacion de Santa Cruz de Leon Cortes or APACO.

The project will help APACO coffee farmers in 50 communities in
the Oriental Central Region to start growing alternative crops
such as passion fruit, bananas, mulberries and avocados.  The
latter, besides providing shade for coffee trees, are
particularly well suited to the area's climate and are harvested
at a different time than coffee cherries.

Since Costa Rica grows only 10 percent of the avocados it
consumes, there are excellent market opportunities for APACO's
members, who can compete with imports because they are close to
the main domestic consumer markets:

   -- San Jose,
   -- Cartago,
   -- Heredia and
   -- Alajuela.

The loan will be used to finance farm investments, working
capital and the construction and equipment of a bulking and
packing facility for APACO, which will provide US$205,000 for
the project.

The grant resources will pay for training for farmers in
managing new crops, the modernization of APACO's information
systems, the design of the new plant, the production of
promotional material and the participation of its staff in trade
fairs and technical exchange missions.

The Social Entrepreneurship Program, managed by the IDB's Micro,
Small and Medium Enterprise Division, supports community
development projects that combine solid business principles with
a strong social commitment.

                        *    *    *

Costa Rica is rated by Moody's:

      -- CC LT Foreign Bank Depst Ba2
      -- CC LT Foreign Curr Debt  Ba1
      -- CC ST Foreign Bank Depst NP
      -- CC ST Foreign Curr Debt  NP
      -- Foreign Currency LT Debt Ba1
      -- Local Currency LT Debt   Ba1

Fitch assigned these ratings to Costa Rica:

      -- Foreign currency long-term debt, BB
      -- Local currency long-term debt, BB
      -- Foreign currency short-term debt, B

Costa Rica carries these ratings from Standard & Poor's:

      -- Foreign Currency LT Debt BB
      -- Local Currency LT Debt   BB+
      -- Foreign Currency ST Debt B
      -- Local Currency ST Debt   B




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


FALCONBRIDGE LTD: Superior Court Dismisses Xstrata Application
--------------------------------------------------------------
The Ontario Superior Court of Justice has dismissed the
application filed by Xstrata plc alleging Falconbridge Ltd.'s
violations to the Ontario Business Corporations Act or OBCA.

Xstrata's Application to the Court demands that Falconbridge be
forced to call an early Annual General Meeting of Shareholders
on the basis of alleged violations of the Ontario Business
Corporations Act by Falconbridge.

In its ruling, the Superior Court confirmed that Falconbridge
had acted in accordance with the OBCA.  As a result, the court
upheld Falconbridge's decision to hold its Annual General
Meeting no later than October 9, 2006, in accordance with the
provisions of the rules of the TSX.

                       About Xstrata

Xstrata plc -- http://www.xstrata.com/-- is a major global
diversified mining group, listed on the London and Swiss stock
exchanges.  The Group is and has approximately 24,000 employees
worldwide, including contractors.

Xstrata does business in six major international commodities
markets: copper, coking coal, thermal coal, ferrochrome,
vanadium and zinc, with additional exposures to gold, lead and
silver.  The Group's operations and projects span four
continents and nine countries: Australia, South Africa, Spain,
Germany, Argentina, Peru, Colombia, the U.K. and Canada.

                     About Falconbridge

Headquartered in Toronto, Ontario, Falconbridge Limited
(TSX:FAL.LV)(NYSE: FAL) -- 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
orebodies.  It employs 14,500 people at its operations and
offices in 18 countries.  The Company owns nickel mines in
Canada and the Dominican Republic and operates a refinery and
sulfuric acid plant in Norway.  It is also a major producer of
copper (38% of sales) through its Kidd mine in Canada and its
stake in Chile's Collahuasi mine and Lomas Bayas mine.  Its
other products include cobalt, platinum group metals, and zinc.

                        *    *    *

Falconbridge's CDN$150 million 5% convertible and callable bonds
due April 30, 2007, carries Standard & Poor's BB+ rating.




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


BANCO CUSCATLAN: S&P Says Limited Growth Areas Constrain Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned these ratings on
Banco Cuscatlan S.A.:

   -- credit rating: BB/Stable/B;
   -- counterparty credit rating: BB/Stable/B; and
   -- certificate of deposit: BB/B.

These ratings are constrained by limited growth prospects in El
Salvador due to its economy's small size and diversification,
credit quality of its loan portfolio, and the current strong
competitive environment, which pressures earnings.  The ratings
are based on the bank's

   -- strong market position in El Salvador,
   -- adequate profitability, and
   -- increasing recognition of the Cuscatlan brand in the
      region.

Asset quality has shown improvements and the main indicators
have evolved satisfactorily; for example, nonperforming assets
that include nonperforming loans, restructured loans, and
repossessed assets, decreased to 7.8% as of March 2006 from 11%
at year-end 2003.  Important efforts have been made to reduce
foreclosed assets, but NPAs continue to be high.  Asset quality
continues to be a challenge for the bank.  Participation of
loans classified in the B and C categories in the overall loan
portfolio is greater than for peers.  Reported NPLs show a
better picture and decreased to 2% as of March 2006 from 3% in
2003.  Although the bank has tightened its credit underwriting
conditions, enhanced borrower surveillance, and taken a slightly
more conservative approach toward loan restructurings, residual
problems from coffee and construction loans continue to affect
asset quality. We expect NPAs to decrease slowly.

Banco Cuscatlan has maintained its market position as the
second-largest bank in El Salvador, holding more than 20% of the
system's deposits and loans.  El Salvador's economy is small,
concentrated in few sectors, and has exhibited lower economic
growth than have other Central American countries.  Although
economic performance has been slow in El Salvador, Banco
Cuscatlan has achieved higher loan growth than have its peers,
as it has been more aggressive than its competition, mainly in
corporate and mortgage loans to high-end clients.

Banco Cuscatlan has maintained adequate profitability ratios in
the El Salvador market, with 1.1% ROAs in the past three years.
There has been margin compression for the Salvadorian banks in
general and for Banco Cuscatlan in particular as a consequence
of the important competition in the market and rising interest
rates.  As Banco Cuscatlan has been the most active bank in El
Salvador to use funds from international capital markets, the
effect of higher international rates has been more important
than for peers.  To compensate the slow growth in the net
interest margin, the bank has increased trading activities,
which although they are a volatile source of earnings, are
adequate for the current rating level.  As a consequence,
market-sensitive income now represents around 15% of total
revenues, compared to 9% in 2002.  As are other players in the
system, Banco Cuscatlan is placing great emphasis on greater
growth in the retail segment, which should partially offset
downward pressure on margins.

Banco Cuscatlan's main funding source is customer deposits,
which at March 2006 represented 70% of total liabilities.  As
with other banks in the country, there is a maturity gap as
long-term loans are funded by short- and medium-term
liabilities.  With 31% of assets comprised of cash and
securities, the bank maintains a high level of liquidity, in
part because of regulatory requirements.  In general, Banco
Cuscatlan has been more active in the capital markets than have
its peers, and the liability side has been well managed.

As of December 2005, Banco Cuscatlan reported a 13.4% regulatory
capital ratio, which is expected to remain going forward.
Adjusted total equity to adjusted assets is similar to that of
other banks, standing at 9.8%.  With reinvestment of most of its
profits, internal capital generation should finance capital
future needs and expected loan growth.

The stable outlook reflects our opinion that the bank's
strategies and operations should maintain profitability at
adequate levels in a stable economic environment.  An economic
downturn or the continuation of low growing prospects of the
Salvadorian economy, however, could affect the bank's overall
performance, putting pressure on the ratings.  Ratings could be
raised if there is a strong positive development in economic
conditions, along with consistent improvements in asset quality
and profitability measures, together with improved capital
ratios.




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


DIGICEL LTD: Sees Growing Market for Mobile Content in Caribbean
----------------------------------------------------------------
Digicel Limited expects a growing market for mobile content in
the region as penetration of cutting-edge handsets continues to
increase among its customers.  The company notes that sports
content is a key area that taps a cultural common ground
throughout a diverse group of countries in the pan-Caribbean
region.

As Caribbean nations continue to advance technologically, fans
across the region are swiftly beginning to interact with sports
content on their mobile phones.  A key factor in the adoption is
Digicel's ability to roll out state of the art GSM
infrastructure from partners such as Ericsson and handset
manufacturer KONKA that can support customers growing demand for
mobile content.

Since 2004, Digicel rolled-out a mobile content offering
starting with an integrated initiative to support its five-year
title sponsorship deal for West Indies Cricket by providing fans
with mobile team news, match commentaries, scores, a java
cricket game, pictures, trivia, and player profiles.  On
average, customers have downloaded approximately 1000 images of
players and matches per month, and more than 60,000 entries for
mobile cricket competitions.  Digicel recently kicked-off its
second season as title sponsor in April 2006.

Digicel added World Cup football content this year to tap the
local fan base in many of its markets especially Trinidad &
Tobago, home of the Soca Warriors who made their first World Cup
appearance this year.  The mobile content gained traction with
fans immediately recording approximately 500,000 game alerts
sent to mobile handsets since the start of the competition.  In
countries such as Haiti, the company has been running a first of
its kind text based football competition that has been popularly
received by its growing customer base.

"We know our customers love sports so we didn't waste anytime
bringing this interaction to the Caribbean mobile market," said
Ben Atherton, marketing director for Digicel.  "Our mobile
content for sports is by far one of the most successful
entertainment offerings we have created for our customers."

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.


KAISER ALUMINUM: American Re Settlement Pact Gets Court's Nod
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Kaiser Aluminum & Chemical Corporation's Settlement Agreement
with American Re-Insurance Company and Executive Risk Indemnity
Company.

Judge Fitzgerald instructs the Debtors to dismiss without
prejudice their claims, counterclaims or cross-claims against
American Re-Insurance Company and Executive Risk Indemnity
Company no later than 14 days after the Court Order becomes
final.

Upon the occurrence of the Trigger Date, the dismissal will be
deemed to be a dismissal with prejudice.

Judge Fitzgerald allows the parties to modify the Settlement
Agreement without further Court Order, provided that:

   (a) any modification is not material; and

   (b) to the extent practicable, notice of any modification
       should be delivered to the counsel to the Official
       Committee of Unsecured Creditors, the future claimants'
       representatives, and the Asbestos Claimants Committee
       at least five days prior to the modification's effective
       date.

As reported in the Troubled Company Reporter on Jun 07, 2006,
KACC, on its own behalf and on behalf of the KACC Parties,
entered into a settlement agreement with American Re and
Executive Risk to resolve certain matters relating to the
Subject Policies, the coverage for Channeled Personal Injury
Claims, and other present and future liabilities.

The Settlement Agreement will also resolve KACC's other claims
against American Re and Executive Risk Parties with respect to
the other policies.

A copy of the Settlement Agreement is available for free at
http://researcharchives.com/t/s?aa5

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company, along with its Jamaican subsidiaries
-- Alpart Jamaica Inc. and Kaiser Jamaica Corporation -- filed
for chapter 11 protection on February 12, 2002 (Bankr. Del. Case
No. 02-10429), and has sold off a number of its commodity
businesses during course of its cases.  Corinne Ball, Esq., at
Jones Day, represents the Debtors in their restructuring
efforts.  On June 30, 2004, the Debtors listed US$1.619 billion
in assets and US$3.396 billion in debts.  (Kaiser Bankruptcy
News, Issue No. 99; Bankruptcy Creditors' Service, Inc.,
215/945-7000)




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


ALERIS INTERNATIONAL: Commences Tender Offer for Senior Notes
-------------------------------------------------------------
Aleris International, Inc. (NYSE: ARS) offered to purchase for
cash any and all of its outstanding 10-3/8% Senior Secured Notes
Due 2010 (CUSIP No. 449681AC9) and 9% Senior Notes Due 2014
(CUSIP No. 014477AA1), on the terms and subject to the
conditions in the Offer to Purchase and Consent Solicitation
Statement dated June 30, 2006, and the Consent and Letter of
Transmittal.

Aleris is also soliciting consents from holders of the Notes to,
among other things, eliminate or make less restrictive
substantially all of the restrictive covenants and the events of
default and amend certain related provisions in the indentures
under which the Notes were issued.  The tender offer and consent
solicitation is being conducted in connection with, and is
contingent on the consummation of, the acquisition of the
downstream aluminum business of Corus Group plc.

The consent solicitation will expire at 5 p.m. New York City
time, on July 14, 2006, unless earlier terminated or extended.
The tender offer will expire at midnight, New York City time, on
July 28, 2006, unless terminated or extended.

The total consideration for each US$1,000 principal amount of
Notes validly tendered and accepted for purchase, subject to the
terms and conditions of the tender offer and consent
solicitation, on or prior to the Consent Date will be
US$1,100.78 for the 10-3/8% Notes and US$1,134.96 for the 9%
Notes.  The total consideration includes a consent payment equal
to US$20 per US$1,000 for the 10-3/8% Notes and the 9% Notes.
The tender offer consideration for each US$1,000 principal
amount of Notes validly tendered and accepted for purchase,
subject to the terms and conditions of the tender offer and
consent solicitation, tendered after the Consent Date but on or
prior to the Expiration Date (and not validly withdrawn)
pursuant to the Offer shall be US$1,080.78 for the 10-3/8% Notes
and US$1,114.96 for the 9% Notes.  The total consideration and
the tender offer consideration to be paid for each US$1,000 in
principal amount of Notes will be paid in cash.  In either case,
all holders who validly tender their Notes will receive accrued
but unpaid interest up to, but not including, the date of
settlement.

In connection with the tender offer, Aleris is also seeking
consents to certain proposed amendments with respect to the
Notes.  The purpose of the proposed amendments is to, among
other things, eliminate or make less restrictive substantially
all of the restrictive covenants and the events of default and
to amend certain related provisions under the Indentures.
Holders who desire to tender their Notes must consent to the
proposed amendments.  A holder may not deliver consents without
tendering the related Notes.  The tender offer is subject to the
satisfaction of certain conditions, including receipt of
consents sufficient to approve the proposed amendments to the
Indentures, obtaining the requisite funding and the Acquisition
having occurred or occurring substantially concurrent with the
Expiration Date.

The proposed amendments to the Indentures for which consents are
being solicited will be set forth in two supplemental indentures
and are described in more detail in the Offer Documents.  The
supplemental indentures will not be executed unless and until
Aleris has received consents from holders of a majority in
principal amount of the applicable Notes outstanding, and the
amendments will not become operative unless and until Aleris has
accepted for purchase at least a majority in principal amount of
the applicable Notes pursuant to the Offer Documents.

Deutsche Bank Securities Inc. is acting as dealer manager for
the tender offer and as the solicitation agent for the consent
solicitation and can be contacted at (212) 250-6008 (collect).
Mackenzie Partners, Inc. is the depositary and information agent
and can be contacted at (212) 929-5500 (collect) or (800) 322-
2885 (toll-free).  Copies of the Offer Documents and other
related documents may be obtained from the information agent.

                  About Aleris International

Headquartered in Beachwood, Ohio, a suburb of Cleveland, Aleris
International, Inc. -- http://www.aleris.com/-- is a major
North American manufacturer of rolled aluminum products and is a
global leader in aluminum recycling and the production of
specification alloys.  The company is also a leading
manufacturer of value-added zinc products that include zinc
oxide, zinc dust and zinc metal.  The Company operates 42
production facilities in the United States, Brazil, Germany,
Mexico and Wales, and employs
approximately 4,200 employees.

                        *    *    *

As reported in the Troubled Company Reporter on Mar. 23, 2006,
Standard & Poor's Rating Services placed its 'BB-' corporate
credit and its other ratings on Aleris International Inc. on
CreditWatch with negative implications.  The action followed the
announcement that Aleris has entered into a non-binding letter
of intent to acquire the downstream aluminum operations of Corus
Group PLC (BB-/Watch Pos/B) for approximately US$840 million
plus the assumption of EUR28 million of debt, and EUR98 million
of debt-like pension liabilities.

Moody's Investors Service also placed the debt ratings of Aleris
International Inc., under review for possible downgrade.  These
ratings were B1 Corporate Family Rating; B2 senior secured
US$210 million 10.375% notes due 2010; and B3 senior unsecured
US$125 million 9% notes due 2014.


BERRY PLASTICS: Apollo & Graham Extends US$2.25B Purchase Offer
---------------------------------------------------------------
BPC Holding Corporation, the parent of Berry Plastics
Corporation, and the private equity firms Apollo Management,
L.P. and Graham Partners have signed a definitive agreement for
Apollo and Graham to acquire BPC Holding Corporation from
Goldman Sachs Capital Partners and JPMorgan Partners for an
enterprise value of US$2.25 billion in aggregate consideration.
The transaction is subject to regulatory approval and other
customary closing conditions.  The parties expect to complete
the transaction by the end of the third quarter.  After the
transaction, Apollo will own a majority of Berry's common stock.

"We are very excited to be purchasing Berry Plastics which we
believe is a true franchise business and one of the best
positioned, highest margin specialty packaging businesses in the
industry," said Joshua Harris, a founding partner of Apollo
Management.  "We are particularly pleased to be partnering with
Ira Boots and the management team of Berry, which is among the
strongest we've encountered in the packaging or any other
industry.  We look forward to continuing to successfully
implement Berry's proven growth strategy in the years to come."

"The Graham Group is very pleased to partner with Apollo and the
outstanding management team Ira Boots has assembled at Berry in
the acquisition of the Company," said Steve Graham, Senior
Managing Principal at Graham Partners.  "We believe Berry offers
an ideal platform to capitalize on the abundant growth
opportunities in the rigid plastic packaging industry."

Mr. Ira Boots will remain President and Chief Executive Officer
and the existing senior management team will continue to lead
Berry Plastics following the transaction.  "This is a tremendous
opportunity for our business and employees to have an
opportunity to partner with Apollo and Graham Partners in the
next phase of Berry's evolution," said Mr. Boots.  "We have
successfully executed our business strategy over the last few
years thanks to tireless work by our employees and loyal support
from our customers.  We look forward to working with our new
owners to continue to build Berry into one of the strongest
specialty plastic packaging companies in the world."

Joe Gleberman, Managing Director at Goldman Sachs Capital
Partners, said, "We have enjoyed our partnership with the
management of Berry and are confident they will continue to do a
great job serving their customers and building the company in
partnership with Apollo and Graham Partners."

Goldman, Sachs & Co. and JPMorgan served as financial advisors
to Berry Plastics on this transaction.

                   About Apollo Management

Apollo Management, L.P., is among the most active and successful
private investments firms in the United States in terms of both
number of investment transactions completed and aggregate
dollars invested.  Since its inception, Apollo has managed the
investment of an aggregate of approximately US$13 billion in
equity capital in a wide variety of industries, both
domestically and internationally.

                    About Graham Partners

Graham Partners is a leading middle market industrial private
equity firm based in suburban Philadelphia with over US$850
million under management.  Graham Partners is sponsored by the
privately held Graham Group of York, Pennsylvania, an industrial
and investment concern with global interests in plastics,
packaging, machinery, building products and outsource
manufacturing.

                    About Berry Plastics

Based in Evansville, Indiana -- http://www.berryplastics.com/
-- is a leading manufacturer and marketer of rigid plastic
packaging products.  Berry Plastics provides a wide range of
rigid open top and rigid closed top packaging as well as
comprehensive packaging solutions to over 12,000 customers,
ranging from large multinational corporations to small local
businesses.  The company has more than 6,800 employees and 25
manufacturing facilities in the United States, Mexico, Canada,
Europe and China.


BERRY PLASTICS: Apollo Merger Cues Moody's to Review Ratings
------------------------------------------------------------
Moody's Investors Service placed the ratings for Berry Plastics
Corporation under review for possible downgrade in response to
the company's announcement that private equity firms Apollo
Management, L.P. and Graham Partners intend to acquire Berry and
its direct parent, BPC Holding Corporation, for approximately
US$2.25 billion.

Although Moody's expects Berry's operations to remain sound and
liquidity to remain very good, Moody's is concerned that
additional leverage would pressure financial metrics that
already are at the lower end of its existing B1 Corporate Family
Rating.  For the twelve months ended April 2, 2006, Berry had,
including Moody's standard adjustments for operating leases,
total debt to EBITDA of over 5 times, free cash flow to debt of
less than 5%, and EBIT interest coverage on the order of 1.5
times.  The announced transaction is expected to close by the
end of the third quarter of 2006.

Moody's placed these ratings under review:

   * US$150 million senior secured revolver maturing
     March 31, 2010, B1

   * US$789 million senior secured term loan due
     December 2, 2011, B1

   * US$335 million 10.75% senior subordinated notes due
     July 15, 2012, B3

   * Corporate Family Rating, B1

Moody's review for possible downgrade will focus on the
financing of the proposed transaction, anticipated business
plans and financial policies, and the capital mix from a
subordination standpoint.  The review also will consider Berry's
relatively strong operating profile, solid liquidity, and good
competitive position.

Based in Evansville, Indiana -- http://www.berryplastics.com/
-- is a manufacturer and marketer of rigid plastic packaging
products.  Berry Plastics provides a wide range of rigid open
top and rigid closed top packaging as well as comprehensive
packaging solutions to over 12,000 customers, ranging from large
multinational corporations to small local businesses.  The
company has more than 6,800 employees and 25 manufacturing
facilities in the United States, Mexico, Canada, Europe and
China.


HERBALIFE INTERNATIONAL: Moody's Rates Proposed Bank Loan at Ba1
----------------------------------------------------------------
Moody's Investors Service rated the proposed bank loan of
Herbalife International, Inc., at Ba1 and upgraded the corporate
family rating to Ba1.  Herbalife will use proceeds from the new
debt to repay the existing term loan and to redeem the US$165
million issue of 9.5% senior subordinated notes (2011).  The
upgrade of the rating reflects the decline in leverage as a
result of the refinancing transaction coupled with Moody's
expectation that the company will continue to grow sales and
cash flow.

The rating outlook is stable.

These ratings are assigned:

   -- US$100 million secured revolving credit facility: Ba1;
      and

   -- US$200 million secured term loan at Ba1.

This rating is upgraded:

   -- Corporate Family Rating to Ba1 from Ba2.

The ratings on the existing bank loan and the US$165 million
issue of 9.5% senior subordinated notes (2011) issued by the
holding company Herbalife Ltd. will be withdrawn following
completion of the proposed refinancing transaction.  The
corporate family rating will be assigned at the Herbalife
International, Inc., level once the rating on the senior
subordinated notes is withdrawn.

Herbalife's corporate family rating of Ba1 balances certain key
quantitative and qualitative rating drivers that have investment
grade characteristics against Moody's opinion that many credit
attributes for a company without substantial tangible assets are
always likely to be stronger than for conventional retailers or
consumer products companies that are similarly rated.
Profitable rapid growth across many geographies and product
categories and the company's pattern of repaying debt with a
portion of discretionary cash flow have solid investment grade
characteristics.  Important factors with non-investment grade
characteristics are the company's relatively small size compared
to many higher rated companies, the unpredictability of demand
for many products in the vitamin, nutritional supplement, and
personal care categories, as well as the inherent challenges of
managing the high reseller attrition that is a common
characteristic of a multi-level marketing business model.

The stable rating outlook reflects Moody's expectations that
revenue growth will continue to be strong and that the company
will use the bulk of free cash flow for prudent purposes such as
repaying debt ahead of schedule.  An upgrade is unlikely within
the medium-term while concerns remain with respect to returns on
expected investment increases in China and the use of the
potential incremental US$200 million from the bank loan.  Given
the nature of the company's business in which intangible assets
provide most of the collateral value, Moody's likely always will
expect stronger credit metrics than for similarly-rated retail
or consumer products companies. Ratings are unlikely to increase
for at least the next two years; however, Moody's believes that
the Herbalife is comfortably positioned within its rating
category.  Important components of an eventual upgrade would be
profitable expansion of the company's revenue base and an
increased comfort level with potential uses of discretionary
cash flow beyond the repayment of debt.  The rating and/or
outlook would be negatively impacted following difficulties in
recruiting new resellers that lead to an overall decline in the
company's primary sales force, financial policy decisions that
causes a decrease in fixed charge coverage (such as EBIT to
interest expense falling toward 4 times or a tightening of the
currently comfortable liquidity position, or insufficient
returns on investment in China and other locations.

Herbalife International, Inc, with corporate headquarters in Los
Angeles, California, is a marketer of weight management
products, nutritional supplements and personal care items that
are sold through a global network of independent distributors in
more than 60 countries.  Equity of Herbalife, LTD, the company's
ultimate parent through a series of intermediate holding
companies, is publicly traded.  Net revenue for the twelve
months ended March 2006 was almost US$1.7 billion.


HERBALIFE INT'L: S&P Ups Corporate Credit Rating to BB+ from BB
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on direct
marketer, Herbalife International Inc., including its corporate
credit rating to BB+ from BB.  Standard & Poor's also raised its
ratings on Herbalife's parent, Herbalife Ltd., including the
corporate credit rating to BB+ from BB.

The outlook is stable.

"This rating action is based on Herbalife's strong operating
performance for the past two years as well as a significant
strengthening of its credit measures," said Standard & Poor's
credit analyst Ana Lai.

The speculative-grade ratings on Herbalife reflect the risks
associated with the company's network marketing business model,
the intensely competitive and fragmented nature of the weight
management and nutritional supplements industries, and the high
level of competition in the network marketing business, as well
as risks of product liability and negative publicity.

Herbalife is a network marketer of weight management products,
nutritional supplements, and personal care products.  The
company generates stable cash flow from its geographically
diversified operations.  Further, the direct-selling business
model has resulted in consistent cash flow generation because of
minimal capital requirements and efficient working capital.
Still, the company faces intense competition from other
marketers of weight management products, as well as a high level
of competition from other network marketers to recruit
distributors.

Herbalife has achieved relatively strong operating performance.
Sales increased 20% in fiscal 2005, reflecting good retention
and recruitment of distributors, new product launches, success
in the growing Mexican market while the core U.S. market
continues to recover.  Operating margins have benefited from
product cost savings from new supply contracts and lower
expenses over the last few years, expanding to about 17% in 2005
from 15% a year ago.  Positive operating momentum continued into
the first quarter ended March 31, 2006, with sales increasing
23%.  Although management initiatives to renew focus on
distributors and new product launches, as well as increased
distributor support, contributed to some recovery in sales in
Japan, operating results in this market remain weak.

Due to improving earnings and debt reduction, Herbalife has
strengthened its capital structure and achieved greater
financial flexibility.  Debt leverage has declined, with total
debt to EBITDA dropping to about 1.2x for the 12 months ended
March 31, 2006, from 2.7x in fiscal 2004.  Given Herbalife's
business risk profile, Standard & Poor's expects the company to
maintain credit ratios that are above average for the rating.


J.L. FRENCH: Emerges from Bankruptcy Protection
-----------------------------------------------
J.L. French Automotive Castings, Inc., disclosed Friday that its
Plan of Reorganization had gone into effect.  As a result, the
company has emerged from Chapter 11 protection.  The company's
new financing has also gone into effect and includes a US$50
million revolver available to fund working capital needs.

Disbursements under the Plan to satisfy creditor claims in
various classes will take place as soon as practical, as stated
in the company's Plan of Reorganization.  Stock certificates and
warrants in the newly reorganized company will also be
distributed in accordance with the terms of the Plan.

As reported in the Troubled Company Reporter on June 22, 2006,
the U.S. Bankruptcy Court for the District of Delaware confirmed
J.L. French and its debtor-affiliates' Plan of Reorganization
after only 18 weeks under Chapter 11 protection.

Jack F. Falcon, chairman, CEO and president said "When we emerge
on June 30, J.L. French will have shed US$465 million in first
and second lien senior secured debt and US$28.9 million in 11.5%
senior subordinated unsecured notes.  We will have acquired
US$130 million in new equity investment and US$255 million in
new financing.  In recent months, our major customers have made
new business commitments to us, and we expect to grow solidly
into the future.  Our work in Europe and China is progressing to
plan, and the opportunities in these markets are encouraging.
With a strong balance sheet and capable production centers, we
foresee controlled, steady growth."

Upon emergence, the participants in the US$130 million rights
offering will hold 92% of the common stock in the newly
reorganized company.  The holders of second lien debt will
receive the remaining 8% of new common stock in satisfaction of
approximately US$170 million of claims.  The approved Plan of
Reorganization also calls for three tranches of warrants to be
made available to certain creditor classes with an exercise
period five years from the Plan's effective date.

The US$130 million of new money investment, along with a new
US$205 million term loan that is part of the exit facility, will
pay off first lien debt of approximately US$295 million, as well
as fund certain costs associated with exiting bankruptcy.  The
newly reorganized company will then have US$231 million in long-
term debt comprised of the term loan and some US$26 million in
other secured debt.  The company's debt leverage will be
approximately 3.5x projected 2006 earnings before certain
deductions, as compared to a pre-reorganization leverage of
approximately 8.5x earnings.

The new US$205 million term facility is structured as US$140
million and US$65 million in first and second lien term loans,
respectively.  The US$255 million exit facility also contains a
US$50 million revolver available to fund working capital needs.

Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior
Funding, Inc are providing exit financing.

                      About J.L. French

Headquartered in Sheboygan, Wisconsin, J.L. French Automotive
Castings, Inc. -- http://www.jlfrench.com/-- is a global
supplier of die cast aluminum components and assemblies with
nine manufacturing locations around the world including plants
in the United States, United Kingdom, Spain, and Mexico.  The
company has fourteen engineering/customer service offices to
support its customers near their regional engineering and
manufacturing locations.  The Company and its debtor-affiliates
filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del.
Case No. 06-10119 to 06-06-10127).  James E. O'Neill, Esq.,
Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at
Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C.,
at Kirkland & Ellis LLP, represent the Debtors in their
restructuring efforts.  Ricardo Palacio, Esq., and William
Pierce Bowden, Esq., at Ashby & Geddes, PA, represents the
Official Committee Of Unsecured Creditors.  When the Debtor
filed for chapter 11 protection, it estimated assets and debts
of more than US$100 million.


MERIDIAN AUTOMOTIVE: Can Ink Fee Letters with Potential Lenders
---------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for
the District of Delaware authorized Meridian Automotive Systems,
Inc., and its debtor-affiliates to enter into the Fee Letters
with the Prospective Lenders provided that:

    (a) the Debtors will have copies circulated to the counsel
        for the Official Committee of Unsecured Creditors for
        review and comment at least three business days prior to
        execution of the Fee Letters; and

    (b) in the event the Creditors' Committee will have any
        objections, the Debtors will work with the Committee in
        good faith to resolve the objections prior to the
        execution of the Fee Letters.

As reported in the Troubled Company Reporter on June 8, 2006,
the Fee Letters will require the Debtors to:

    (a) pay due diligence fees and out-of-pocket expenses,
        including legal fees of the Potential Lenders in
        connection with their non-binding proposals to provide
        the Debtors with exit financing; and

    (b) provide indemnification of the Potential Lenders in
        connection with the exit financing.

The Debtors anticipate that each Potential Lender will ask the
Debtors to enter into a Fee Letter, which will require, among
other things, that the Debtors pay Work Fees associated with the
Potential Lenders' reasonable out-of-pocket expenses, including
legal fees, that may be incurred in connection with their due
diligence and documentation efforts.

The Debtors are still negotiating the specific terms of the Fee
Letters with the Potential Lenders.

The Potential Lenders do not wish to undertake a costly and time
consuming due diligence process to achieve a final financing
package if they must bear all of the execution risks attendant
to the financing not closing.  For this reason, the Potential
Lenders have asked the Debtors to seek advance authority to pay
the Work Fees.

Moreover, each Potential Lender has asked the Debtors to
indemnify the Potential Lenders from and against any and all
claims, liabilities and expenses, except to the extent the
claim, liability, or expense is found to have resulted primarily
from the Indemnified Party's gross negligence, bad faith, or
willful misconduct.

The Debtors believe that the benefits of having a competitive
financing process will outweigh the costs associated with the
Potential Lenders' due diligence efforts.

The total Work Fees payable to any single Potential Lender will
not exceed US$250,000.  The Work Fees payable to all Potential
Lenders will not exceed US$600,000 in the aggregate.

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck manufacturers.
Meridian operates 22 plants in the United States, Canada and
Mexico, supplying Original Equipment Manufacturers and major
Tier One parts suppliers.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 26, 2005 (Bankr. D.
Del. Case Nos. 05-11168 through 05-11176).  James F. Conlan,
Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan
Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S.
Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq.,
and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts.  Eric
E. Sagerman, Esq., at Winston & Strawn LLP represents the
Official Committee of Unsecured Creditors.  The Committee also
hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti,
Biden & Balick, P.A., to prosecute an adversary proceeding
against Meridian's First Lien Lenders and Second Lien Lenders to
invalidate their liens.  When the Debtors filed for protection
from their creditors, they listed US$530 million in total assets
and approximately US$815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
Service, Inc., 215/945-7000).


NORTEL NETWORKS: Outlines Biz Plan to Improve Operating Margins
---------------------------------------------------------------
In connection with its business transformation plan to increase
competitiveness by improving operating margins and overall
business performance, Nortel Networks Corp. reported:

   * significant changes to its North American pension programs;

   * a net reduction of approximately 1,100 positions globally;
     and

   * a series of new initiatives to create a world-class
     Operations organization.

The report is the latest in a series of actions Nortel is taking
to achieve a targeted operating-margin expansion in excess of
US$1.5 billion in 2008.

"I am confident in the progress we are making in turning around
Nortel and recreating a great company," Mike Zafirovski, Nortel
president and CEO, said.  "In the past few months we've taken
important steps, some with near-term impact, and others with
longer-term benefits, toward transforming our operations to be
more efficient and customer-focused."

Key Company actions include:

   * Pension Plan: changes to control costs and align with
     industry-benchmarked companies.  These changes are expected
     to result in an estimated annual reduction of US$100
     million in pension expense starting in 2008 and savings of
     more than US$400 million in cash by the year 2012.  This
     will reduce the Company's unfunded pension liability
     deficit by US$400 million.

   * Global Operations: initiatives designed to create a world-
     class Operations organization to speed customer
     responsiveness and to instill process excellence while
     reducing costs.

   * Organizational Simplification: flatten the organization and
     shift to a culture marked by agility and accountability.

The latter two actions result in a reduction of 1,900 positions
globally and the creation of approximately 800 new positions in
Operations Centers of Excellence.  Total cost, both the charge
to the income statement and cash, for the Global Operations
restructuring and the organizational simplification, is
estimated to be US$100 million over the next two years, of which
US$35 million of the charge to the income statement is expected
to be taken in the second quarter of 2006.  The cash cost is
expected to be incurred equally over a two-year period.  Annual
savings from these actions is targeted to be US$100 million in
2007 and US$175 million by 2008.

                    Pension Plan Changes

Beginning Jan. 1, 2008, Nortel will introduce key changes to the
current Nortel Capital Accumulation and Retirement Program in
the United States and Canada.  Employees currently in defined
benefit pension plans will be moved to defined contribution
retirement programs.  Employees already in defined contribution
programs will stay in defined contribution programs.  The
defined contribution programs will have a new formula, which is
comprised of an automatic employer contribution equal to two
percent of employees' eligible earnings.  In addition, Nortel
will provide a 50% match on employee contributions of up to 6%
of eligible earnings, for a total maximum five percent employer
contribution.

Current post-retirement healthcare benefits will be eliminated
for employees who are not age 50 with five years of service on
July 1, 2006.  All future retirees who do not meet this age and
service criteria will continue to have access to healthcare
coverage at their own cost through Nortel's preferred provider,
given they meet eligibility requirements when they retire.

These changes will not go into effect for 18 months.  Between
now and then employees will continue to earn benefits under the
current plans.  Also, employees will keep their rights to all
benefits already earned in their current plans.  Those benefits
will be available when they retire or leave Nortel.  The Company
will provide financial education and modeling assistance to help
employees through the transition.

Current retirees in both the U.S. and Canada will not see any
change to their pension income benefit.  Some retirees in the
U.S. will see a change in the cost-sharing formula for medical
benefits.

         Creating a World-Class Operations Organization

To realize the vision of a world-class Operations organization
that delivers high quality service at low cost to customers,
Nortel reports a number of actions designed to increase customer
responsiveness, as well as product and service reliability.  The
action plan to deliver these savings and transform Nortel's
Global Operations includes:

   * Operations Centers of Excellence: The creation of two new
     world-class Nortel Operations Centers of Excellence in
     Mexico and Turkey powered by state-of-the-art tools, Six
     Sigma processes and Nortel's own technology.  These
     locations were selected for a number of reasons including
     Nortel's established operations in these countries, a
     strong labor pool, cost competitiveness, and proximity to
     major customers based in these regions.  The long-term plan
     is to consolidate more than 100 sites globally into fewer
     operations centers of excellence focused on delivering
     engineering, product and technical support, order
     management, purchasing and data analysis, among other
     functions.  As Nortel consolidates these sites, the company
     will eliminate 1,200 Operations positions globally, in part
     through attrition.  Nortel expects to create 800 new
     operations positions for these and other centers of
     excellence by 2008.

   * High-Touch Customer Centers: An increased focus on
     high-customer-interaction processes delivering strategic
     capabilities such as network design, project engineering,
     consulting and advisory work to support Nortel's new
     Services strategy.  These activities will be led out of
     major Nortel locations including Ottawa, Ontario;
     Richardson, Texas; and Research Triangle Park, North
     Carolina, as well as locations supporting Europe, the
     Middle East and Africa, Caribbean and Latin America and
     Asia Pacific.

   * Procurement Effectiveness: Driving process excellence
     through the implementation of three major initiatives:

     a) supplier life cycle management, which maps supplier
        capabilities including agility, volume and capacity to
        the different stages in a product's life cycle;

     b) smart, simple design or parts standardization; and

     c) Clean Sheet Analysis, a data-intensive best practice
        that enables Nortel to identify what a product, or
        component "should" cost and then use that data in
        supplier negotiations.

                Organizational Simplification

In addition to the actions taken to create a world-class
Operations organization, Nortel will eliminate 350 middle
management positions throughout the company and through business
unit efficiencies 350 additional positions globally.

                    About Nortel Networks

Headquartered in Ontario, Canada, Nortel Networks Corporation --
http://www.nortel.com/-- is a recognized leader in delivering
communications capabilities that enhance the human experience,
ignite and power global commerce, and secure and protect the
world's most critical information.  Serving both service
provider and enterprise customers, Nortel delivers innovative
technology solutions encompassing end-to-end broadband, Voice
over IP, multimedia services and applications, and wireless
broadband designed to help people solve the world's greatest
challenges.  Nortel does business in more than 150 countries
including Mexico.

                        *    *    *

As reported in the Troubled Company Reporter on June 20, 2006,
Moody's Investors Service affirmed the B3 corporate family
rating of Nortel; assigned a B3 rating to the proposed US$2
billion senior note issue; downgraded the US$200 million 6.875%
Senior Notes due 2023 and revised the outlook to stable from
negative.

Standard & Poor's Ratings Services removed its ratings on
Brampton, Ontario-based Nortel Networks Limited from CreditWatch
with negative implications, where they were placed
March 10, 2006, following a ratings review.

At the same time, Standard & Poor's affirmed its 'B-' long-term
and 'B-2' short-term corporate credit ratings on the company,
and assigned its 'B-' senior unsecured debt rating to the
company's proposed US$2 billion notes.  The outlook is stable.


NORTEL NETWORKS: Prices US$2 Billion Senior Notes Offering
--------------------------------------------------------
Nortel Networks Corporation prices the offering of US$2 billion
aggregate principal amount of senior notes by its principal
direct operating subsidiary, Nortel Networks Limited, to
qualified institutional buyers pursuant to Rule 144A under the
U.S. Securities Act of 1933, as amended, and to persons outside
of the United States pursuant to Regulation S under the
Securities Act.  The placement of the Notes is subject to
customary closing conditions and is expected to close on
July 5, 2006.

The Notes to be issued by NNL will consist of US$450 million of
Senior Notes due 2016, US$550 million of Senior Notes due 2013
and US$1 billion of Floating Rate Senior Notes due 2011 and will
be fully and unconditionally guaranteed by the Company and
initially guaranteed by the Company's indirect subsidiary,
Nortel Networks Inc.

The 2016 Fixed Rate Notes will pay interest semi-annually at a
rate per annum of 10.75%, the 2013 Fixed Rate Notes will pay
interest semi-annually at a rate per annum of 10.125%, and the
Floating Rate Notes will pay interest quarterly at a rate per
annum, reset quarterly, equal to three-month LIBOR plus 4.25%.

NNL expects that the net proceeds from the sale of the Notes
will be approximately US$1,956 million, after deducting
discounts and other offering expenses.  NNL plans to use US$1.3
billion of these net proceeds to repay the US$1.3 billion one-
year credit facility that NNI entered into in February 2006, and
the remainder for general corporate purposes, including to
replenish recent cash outflows of US$150 million for the
repayment at maturity of the outstanding aggregate principal
amount of the 7.40% Notesdue June 15, 2006, issued by the
Company's indirect finance subsidiary, Nortel Networks Capital
Corporation, and fully and unconditionally guaranteed by NNL,
and US$575 million (plus accrued interest of US$5 million)
deposited into escrow on June 1, 2006, pursuant to the proposed
class action settlement first announced on Feb. 8, 2006.

                    About Nortel Networks

Headquartered in Ontario, Canada, Nortel Networks Corporation
-- http://www.nortel.com/-- is a recognized leader in
delivering communications capabilities that enhance the human
experience, ignite and power global commerce, and secure and
protect the world's most critical information.  Serving both
service provider and enterprise customers, Nortel delivers
innovative technology solutions encompassing end-to-end
broadband, Voice over IP, multimedia services and applications,
and wireless broadband designed to help people solve the world's
greatest challenges.  Nortel does business in more than 150
countries including Mexico.

                        *    *    *

As reported in the Troubled Company Reporter on June 20, 2006,
Moody's Investors Service affirmed the B3 corporate family
rating of Nortel; assigned a B3 rating to the proposed US$2
billion senior note issue; downgraded the US$200 million 6.875%
Senior Notes due 2023 and revised the outlook to stable from
negative.

Standard & Poor's also affirmed its 'B-' long-term and 'B-2'
short-term corporate credit ratings on the company, and
assigned its 'B-' senior unsecured debt rating to the company's
proposed US$2 billion notes.  The outlook is stable.




===========
P A N A M A
===========


CHIQUITA BRANDS: Panama Requests Payment Terms Negotiation
----------------------------------------------------------
Chiquita Brands International has been requested by the
government of Panama regarding payment terms in the sales
contract on Cooperativa de Servicios Multiples de Puerto
Armuelles RL aka Coosemupar bananas, according to a report from
Fresh Plaza.

Fresh Plaza relates that a special government commission that
attends Coosemupar's financial crisis received a notice from
Chiquita saying that the latter's executives had not yet defined
their position towards the negotiation.

According to Fresh Plaza, Chiquita will disclose its position
this week.

The delay of Chiquita's decision, says Fresh Plaza, may pose a
problem as the Sitrachilco, a workers union, has set the
deadline at the start of July.

A rupture would result between Chiquita and Coosemupar, Fresh
Plaza states.

Prism Business Media Inc. reported on Oct. 1, 2003, that
Chiquita had signed an accord with union leaders and the
Panamanian government to sell the assets of its Puerto Armuelles
Fruit Co division to worker cooperative Coosemupar for US$19.8
million.

                      About Coosemupar

M£ltiple Services Cooperative (Coosemupar) produces half the
bananas exported from Panama on 3,000 hectares of land.  It is
formally owned by the workers.  This cooperative is led by
members of the Armuelles banana workers union, Sindicato
Industrial de Trabajadores de la Chiriqui Land Co y Empresas
Afines or Sitrachilco.

                    About Chiquita Brands

Chiquita Brands International is a Cincinnati, Ohio-based
producer and distributor of bananas and other produce, under a
variety of subsidiary brand names, collectively known as
Chiquita.  Chiquita is the successor to the United Fruit Company
and is the leading distributor of bananas in the United States.
The company also owns a German produce distribution company,
Atlanta AG, which it acquired in 2003.  It markets, produces and
distributes fresh fruits, processed fruits and vegetable
products.

On June 15, 2006, Standard & Poor's Ratings Services affirmed
its ratings on Cincinnati, Ohio-based Chiquita Brands
International Inc., including the 'B+' corporate credit rating.
S&P said the rating outlook is negative.




=====================
P U E R T O   R I C O
=====================


ADELPHIA: Court OKs ACOM-M.L. Media Mediator's Final Report
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the Final Report of mediator Tina L. Brozman, Esq.,
pertaining to negotiations between Adelphia Communications
Corporation and M.L. Media Partners L.P.

Adelphia and M.L. Media had exchanged mediation statements and
relevant documents, and provided to the Mediator confidential
evaluations of their positions.  The Parties engaged in a good
faith mediation conference on April 17 and 18 with the Mediator
at the New York office of Bingham McCutchen LLP.

The mediation conference focused on the amicable resolution of
disputes between the Parties arising out of a joint venture
relationship.  More particularly, the disputes involved the
determination of liability and appropriate damages for an
alleged breach of a leveraged recapitalization agreement, along
with the determination of the allowability of various proofs of
claim filed in the ACOM Debtors' cases.

Ms. Brozman tells the Court that the Mediation Sessions resulted
in a settlement in principle of the Parties' disputes and the
Bankruptcy Court approved the parties' settlement agreement.

Accordingly, the Mediator delivered to the Court her Final
Report.  The mediator also attached a fee statement for services
through May 31, 2006.

Ms. Brozman reports that she and her colleagues at Bingham
McCutchen LLP spent 115.6 hours reviewing documents, preparing
for mediation, facilitating mediation, and communicating with
the parties regarding the settlement.  The fees for professional
services total US$64,774.  The Mediator also incurred US$2,944
in necessary expenses.

The Mediator asks the Court to discharge her and direct the
Parties to pay to Bingham McCutchen LLP the Mediator's fees and
expenses.

Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country.  Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks.  The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002.  Those cases
are jointly administered under case number 02-41729.  Willkie
Farr & Gallagher represents the ACOM Debtors.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.  (Adelphia Bankruptcy News, Issue No. 138;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ADELPHIA COMMS: Monitor Files Report on Modified Plan Term Sheet
----------------------------------------------------------------
Judge Cecelia Morris, as the Monitor appointed by the U.S.
Bankruptcy Court for the Southern District of New York in the
chapter 11 cases of Adelphia Communications Corporation and its
debtor-affiliates, delivered to the Court on June 21, 2006, her
report containing a term sheet that is based on her observations
of the give and take between:

    (a) representatives of the ad hoc committee of holders of
        ACC Senior Notes represented by Hennigan, Bennett &
        Dorman LLP, the ad hoc committee of holders of ACC
        Senior Notes and Arahova Notes represented by Pachulski
        Stang Ziehl Young Jones & Weintraub LLP, the Ad Hoc
        Committee of Arahova Noteholders, the Ad Hoc Committee
        of FrontierVision Noteholders, and W.R. Huff Asset
        Management Co., L.L.C.; and

    (b) representatives of the Debtors and the Official
        Committee of Unsecured Creditors.

Judge Morris said she presided over several weeks of negotiation
sessions until the parties reached a compromise and settlement.

Judge Morris contends that the proposed term sheet is a better
alternative to (i) the plans that have been filed by the Debtors
with the Court, (ii) the process and procedures proposed by the
Debtors under Section 363 of the Bankruptcy Code, and (iii)
continuing proceedings under the Motion in Aid Process.

According to Judge Morris, the Parties have agreed that the
Debtors will modify, amend and re-document the Plan and
Disclosure Statement so that the Plan will incorporate a global
compromise and settlement pursuant to Rule 9019 of the Federal
Rules of Bankruptcy Procedure.

In addition to the US$635,000,000 of value designated for
transfer to ACOM in the Debtors' Settlement Plan, the global
settlement provides, among other things, that (1) an added
US$270,000,000 from third party give ups, (2) an added
US$125,000,000 advance from Arahova, and (3) a give up of
US$50,000,000 from Arahova and potential additional value from
"Identified Sources" -- for a total amount of not less than
US$445,000,000 representing an aggregate addition of not less
than US$1,080,000,000 of Plan consideration, exclusive of CVV
Interests -- will be made available for distribution to holders
of the ACC Senior Notes Claims and the ACC Trade Claims on the
Effective Date.

For purposes of Initial Distributions, the Deemed Value of the
TWC Class A Common Stock is US$4,700,000,000.

The Parties recognize and agree that consistent with Section 510
of the Bankruptcy Code and the absolute priority rule, except as
otherwise provided and unless otherwise agreed by the Creditor
Parties, there will be no distributions, other than junior CVV
Interests to the holders of the ACC Subordinated Notes or to
holders of equity interests in ACC.

The Parties consent to the adjournment of the Motion in Aid
Hearings through July 31, 2006.  Upon the Debtors' filing of the
Modified Plan and related disclosure statement consistent in all
material respects with the term sheet, the Motion in Aid
Hearings, but not related Rule 2004 discovery pertaining to the
ACC Committee, will be adjourned so long as the Modified Plan
has not been withdrawn, terminated or modified in a manner
adverse to a Party absent written consent of that Party.

Unless otherwise agreed to in writing by the Parties, the
Effective Date of the Consensual Plan will be the later of
Sept. 15, 2006, or 15 days after the closing of the TWC Sale.
In no event will the Effective Date be later than
Oct. 31, 2006.

The Effective Date will be conditioned on:

    (i) distribution of TWC Class A Common Stock to creditors
        will be materially completed prior to October 31, 2006,
        and

  (iii) the Debtors being in a position to distribute to ACC on
        the Effective Date or immediately thereafter value
        totaling at least US$1,080,000,000 from the Initial ACC
        Settlement Consideration, the Third Party Give Ups, the
        Incremental Arahova Advance and Identified Sources above
        US$125,000,000.

A full-text copy of the Monitor's Report is available for free
at http://ResearchArchives.com/t/s?c83

Judge Morris relates that with respect to the US$85,000,000
FrontierVision give-up, the term sheet as currently drafted,
failed to provide the holders of FrontierVision notes with
senior CVV interests.  Thus, the Monitor supplements the term
sheet by providing senior CVV interests to FrontierVision so
that FrontierVision will dilute the senior CVV interests
distributed to ACC and Arahova pro rata to the limited extent --
after payment of the amounts due to the Justice Department under
the Settlement Agreement or as otherwise agreed by the Justice
Department, with respect to each dollar of CVV recovery,
FrontierVision will receive a percentage of each dollar as
determined by a fraction the numerator of which will be
US$85,000,000 and the denominator will be the total of the
US$575,000,000 to Arahova plus the dollar value of the ACC
deficiency on the Effective Date plus US$85,000,000.  It is
agreed that per US$1 billion of CVV recovery, the minimum
distribution to FrontierVision will be 2.5%.

Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country.  Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks.  The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002.  Those cases
are jointly administered under case number 02-41729.  Willkie
Farr & Gallagher represents the ACOM Debtors.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.   (Adelphia Bankruptcy News, Issue No. 138;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CLINICA DE MEDICINA: Case Summary & 13 Largest Unsec. Creditors
---------------------------------------------------------------
Debtor: Clinica de Medicina Integral y Acupuntura, M.I.A., Inc.
        P.O. Box 70114
        San Juan, Puerto Rico 00936-8114

Bankruptcy Case No.: 06-02091

Chapter 11 Petition Date: June 30, 2006

Court: District of Puerto Rico (Old San Juan)

Debtor's Counsel: Francisco R. Moya Huff, Esq.
                  BCO Popular Building, Suite 401
                  Tetuan 206
                  San Juan, Puerto Rico 00901-1802
                  Tel: (787) 723-0714
                  Fax: (787) 724-2447

Total Assets: US$1,700,000

Total Debts:  US$1,909,437

Debtor's 13 Largest Unsecured Creditors:

      Entity                              Claim Amount
      ------                              ------------
      Carlos Seda Munoz                       US$400,000
      [Address not provided]

      Dr. Marisell Velazquez Vicente          US$110,000
      P.O. Box 70114
      San Juan, PR 00936-8114

      Marife Rodriguez - Ema Pujada            US$50,000
      [Address not provided]

      Puerto Rico Telephone                    US$24,000
      P.O. Box 71535
      San Juan, PR 00936-8635

      Internal Revenue Services                US$20,000
      Philadelphia, PA 19255-0030

      Humana                                    US$6,500

      Neo Medics                                US$3,500

      Autoridad de Enrigia Electrica            US$2,580

      Dunsdemand                                  US$850

      UMECO                                       US$796

      Autoridad De Acueductos y Alcantarillado    US$672

      Praxair Puerto Rico B.V.                    US$578

      Advance Collection Services                 US$246


DORAL FINANCIAL: Closes Sale of Mortgage Loans to Westernbank
-------------------------------------------------------------
W Holding Company, Inc., disclosed that its bank subsidiary,
Westernbank Puerto Rico, acquired certain additional rights from
Doral Financial Corporation and its affiliates, in order to
perfect the acquisition of a series of mortgage loans pools
acquired since 1995 with an aggregate actual unpaid principal
balance of US$937.3 million.  These same loans were the subject
of the company's previous announcements regarding "true sale"
accounting.

Both parties originally accounted for the acquisitions of the
mortgage loan pools as sales of the mortgage loans, but
Westernbank subsequently determined that it had to
re-characterize the transactions as commercial loans secured
with real property mortgages for financial statement purposes.
Following that determination, Westernbank and Doral have now
agreed to restructure the transactions as:

   -- Westernbank agreed to accept a cash payment from Doral
      in connection with its agreement to transfer and assign
      to Westernbank 100% of the retained interest related to
      the mortgage loans pools and to terminate in full Doral's
      call rights under the original mortgage sale agreements;

  -- Doral agreed to repurchase from Westernbank all mortgage
     loans previously sold under the original Mortgage Sale
     Agreements that were 90 or more days delinquent with a
     aggregate unpaid principal balance of US$17.1 million; and

  -- Westernbank agreed to accept a cash payment from Doral
     to discharge and terminate in full Doral's recourse
     obligations under the original mortgage sale agreements.

Commenting on the transaction, Mr. Freddy Maldonado, President
and Chief Investment Officer of W Holding Company, stated, "As a
result of this transaction, the bank will record the loan
acquisitions as 'true sales.' Thus, the bank will record the
mortgage loans as its own, rather than a financing transaction
with Doral.  As consideration for the four main conditions
stated in the preceding paragraphs, the bank received a total
net compensation of US$42.8 million, including US$17.1 million
for the sale to Doral of the delinquent loans."

                  About W Holding Company

W Holding Company is the parent of Westernbank Puerto Rico,
which provides consumer and business banking services through
almost 55 branches.  Services include deposit accounts, credit
cards, and trust and brokerage services.  Subsidiary Westernbank
Insurance sells a full range of coverage.  One of the largest
banks on the island, Westernbank has been expanding in San Juan,
some new locations offer a smaller, more casual setting
(espresso is served) to attract more consumer clients.  The
company's overall loan mix, however, leans toward business
lending, including commercial mortgages and asset-based loans,
which accounts for about 65% of its portfolio.

                About Westernbank Puerto Rico

Westernbank Puerto Rico, a wholly owned subsidiary of W Holding
Company, Inc., is the second-largest commercial bank in Puerto
Rico, based on total assets, operating throughout 55 full-
fledged branches, including 33 in the southwestern region of
Puerto Rico, 7 in the northeastern region, 13 in the San Juan
Metropolitan area of Puerto Rico and 2 in the eastern region of
Puerto Rico, and a fully functional banking site on the
Internet.

                    About Doral Financial

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.

                        *    *    *

As reported in the Troubled Company Reporter on June 13, 2006,
Standard & Poor's Ratings Services lowered its long-term ratings
on Doral Financial Corp. (NYSE: DRL), including the company's
long-term counterparty rating, to 'B+' from 'BB-'.  At the same
time, Doral's outlook remains on CreditWatch with negative
implications.


GLOBAL HOME: Court Okays Dinsmore & Shohl as Special Counsel
------------------------------------------------------------
Global Home Products, L.L.C., and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Dinsmore & Shohl, L.L.P., as their special
counsel, nunc pro tunc to April 10, 2006.

Dinsmore & Shohl will:

     a) provide advice and counsel to the Debtors on their
        general corporate and transactional matters occurring in
        the normal course of business;

     b) provide advice and counsel to the Debtors on their
        corporate governance matters occurring in the normal
        course of business;

     c) provide advice and counsel to the Debtors on their
        consumer product enforcement and regulatory matters,
        including matters before the Consumer Product Safety
        Commission;

     d) defend against CPSC enforcement claims;

     e) provide advice and counsel to the Debtors on
        intellectual property matters, including preservation of
        Debtors' intellectual property through renewal of
        Debtors' rights before the U.S. Patent, Copyright and
        Trademark Office, and similar agencies in foreign
        markets as Debtors will transact their business;

     f) file, assist with the filing and renewing of these
        intellectual property rights in all jurisdictions in
        which Debtors transact their business;

     g) defend these intellectual property rights on Debtors'
        behalf;

     h) provide advice and counsel on such maters as the Debtors
        may request as is consistent with D&S's pre-petition
        representation of the Debtors.

The Debtors tell the Court that the Firm's professional bill:

    Professional             Designation        Hourly Rate
    ---------------          -----------        -----------
    John Jevicky, Esq.       Partner                US$360
    John Jolley, Esq.        Partner                US$245
    Kim Martin Lewis, Esq.   Partner                US$440
    Martin Miller, Esq.      Partner                US$350
    Jason Sims, Esq.         Partner                US$270
    Peter Draugleis, Esq.    Associate              US$200
    Jennifer Hickey, Esq.    Associate              US$160
    Clare Iery, Esq.         Associate              US$215
    Joshua Lorentz, Esq.     Associate              US$215
    John Reed, Esq.          Associate              US$265
    James Sutton, Esq.       Associate              US$170
    Jeffrey Willis, Esq      Associate              US$170
    Linda Pucket             Paralegal              US$145
    Tracy Shannon            Paralegal              US$145

    Designation                Hourly Rate
    ---------------            -----------
    Partners                 US$225 - US$440
    Associates               US$150 - US$265
    paralegals               US$105 - US$160

To the best of the Debtors' knowledge, the firm does not
represent any interest adverse to their estates.

Headquartered in Westerville, Ohio, Global Home Products, LLC
-- http://www.anchorhocking.com/and http://www.burnesgroup.com/
--  sells houseware and home products and manufactures high
quality glass products for consumers and the food services
industry.  The company also designs and markets photo frames,
photo albums and related home decor products.  The company and
16 of its affiliates , including Burnes Puerto Rico, Inc., and
Mirro Puerto Rico, Inc., filed for Chapter 11 protection on
Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340).  Laura Davis
Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and
Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub LLP, represent the Debtors.  Bruce Buechler,
Esq., at Lowenstein Sandler P.C., represents the Official
Committee of Unsecured Creditors.  When the company filed for
protection from their creditors, they estimated assets between
US$50 million and US$100 million and estimated debts of more
than US$100 million.


MUSICLAND: Submits List of 60 Rejected Contracts & Leases
---------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York's
authority to reject five executory contracts and 55 unexpired
leases pursuant to the Court-approved Expedited Rejection
Procedures, for the period June 1 to 15, 2006.

The Leases to be rejected are:

                                                 Proposed
      Shopping Center/Mall                    Rejection Date
      --------------------                    --------------
      Macomb Mall Suite 655                        6/11/06
      209 Quaker Bridge Mall                       6/11/06
      Three Rivers Mall                            6/12/06
      Sierra Vista Mall                            6/12/06
      Northway Mall                                6/12/06
      Phillipsburg Mall                            6/12/06
      Great Lakes Mall                             6/12/06
      Bel Air Mall                                 6/12/06
      Hulen Mall                                   6/12/06
      Triangle Town Center                         6/12/06
      River Pointe S/C                             6/12/06
      Boardwalk Center                             6/12/06
      Echelon Mall                                 6/15/06
      Chesapeake Square Mall                       6/15/06
      Southland Mall                               6/18/06
      2415 Sagamore Pkwy                           6/18/06
      Palisades Center                             6/18/06
      Muncie Mall                                  6/19/06
      Town East Mall                               6/19/06
      Spotsylvania Mall                            6/19/06
      Galleria At Tyler                            6/19/06
      Regency Mall                                 6/19/06
      Pecanland Mall                               6/19/06
      Sunland Park Mall                            6/19/06
      Ocean County Mall                            6/19/06
      Pierre Mall                                  6/19/06
      Butte Plaza Mall                             6/19/06
      Woodland Mall                                6/19/06
      Parkdale Mall                                6/21/06
      Northtown Plaza                              6/21/06
      Eastridge Mall                               6/23/06
      Cordova Mall                                 6/23/06
      Shops at Willow Lawn                         6/23/06
      Crystal Mall                                 6/23/06
      River Hills Mall                             6/23/06
      St. Marys Square SC                          6/23/06
      Wayne Town Plaza                             6/23/06
      2000 Center                                  6/23/06
      Edgewater Plaza                              6/23/06
      Santa Maria Town Center East                 6/24/06
      City Center                                  6/24/06
      Northpark Mall                               6/25/06
      Midland Mall                                 6/25/06
      Towne East Square                            6/25/06
      Tyrone Square                                6/25/06
      Crabtree Valley Mall                         6/25/06
      Rockingham Park                              6/25/06
      Washington Square                            6/26/06
      Market Place Shopping Center                 6/26/06
      708 Orland Square Dr G-03                    6/26/06
      Fashctr at Pentagon City                     6/26/06
      Laguna Hills Mall                            6/26/06
      Square One                                   6/26/06
      Quail Springs Mall                           6/26/06
      Sattler Square                               6/26/06

The Contracts to be rejected are:
                                                      Rejection
Counter Party                Description                 Date
-------------                -----------              ---------
HR-Ease/ Secova              Service Agreement          6/14/06
IVN Communications, Inc.     License Agreement          6/14/06
MCS Life Insurance, Inc.     Service Agreement          6/14/06
Neopost Leasing              Lease of mail machine      6/14/06
PRA Fulfillment Services     Client Agreement           6/14/06

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 US$100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SUNCOM WIRELESS: Eric Haskell Continues Stint as CFO
----------------------------------------------------
Eric Haskell has agreed to serve as the Executive Vice President
and Chief Financial Officer of SunCom Wireless Holdings Inc. and
its subsidiaries until February 3, 2007.

Prior to his permanent appointment, Mr. Haskell had served as
SunCom's interim Executive Vice President and Chief Financial
Officer since December 20, 2005.  Mr. Haskell currently also
serves as a director of SunCom and as its interim Chief
Executive Officer while SunCom's Chief Executive Officer and
Chairman, Michael E. Kalogris, recovers from injuries sustained
in an automobile accident.

If Mr. Haskell's employment agreement is not terminated on or
before February 3, 2007, the employment agreement will be
automatically extended for successive 60 day periods unless
either party elects to terminate the agreement by giving 60
days' prior notice.

Under his employment agreement, Mr. Haskell will receive an
annual base salary of US$285,000 and is eligible to receive an
annual performance-based bonus equal to his base salary
multiplied by the percentage of the goals associated with that
year's bonus achieved during that year.  The bonus amount will
be prorated based upon the portion of the calendar year Mr.
Haskell is employed.

Based in Berwyn, Pennsylvania, SunCom Wireless Holdings Inc.
-- http://www.suncom.com/-- fka Triton PCS, Inc., is licensed
to provide digital wireless communications services in the
southeastern United States, Puerto Rico and the U.S. Virgin
Islands.  As of Dec. 31, 2005, the network covers approximately
14.8 million potential customers in North Carolina, South
Carolina, Tennessee and Georgia and 4.1 million potential
customers in Puerto Rico and the U.S. Virgin Islands.

At March 31, 2006, the company's stockholders' deficit widened
to US$228,312,000 from an US$83,266,000 deficit at
Dec. 31, 2005.

                        *    *    *

As reported in the Troubled Company Reporter on March 22, 2006,
Standard & Poor's Ratings Services held its ratings on Berwyn,
Pennsylvania-based SunCom Wireless Holdings Inc. and its
operating subsidiaries, including the 'CCC+' corporate credit
rating, on CreditWatch, where they were placed with negative
implications on Jan. 23, 2006.

The 'B-' bank loan rating for Suncom Wireless Inc. remained on
CreditWatch with negative implications, but the bank loan
recovery rating of '1' is not on CreditWatch, indicating high
expectations for full (100%) recovery of principal in the event
of bankruptcy or payment default.




=================================
T R I N I D A D   &   T O B A G O
=================================


BWIA WEST: Unable to Negotiate New CBA with Unions
--------------------------------------------------
The Trinidad & Tobago Express says that British West Indies
Airways aka BWIA failed to agree on a new collective bargaining
agreement with the Aviation Communication and Allied Workers
Union during their latest round of talks on June 29.  The
negotiations have been going on for months.

Present during the meeting were workers retrenched from 2001 to
2003.  Some of BWIA's retrenchments were against the collective
agreements the company made with its employees.

A BWIA statement said:

"In the circumstances the chairman, Arthur Lok Jack has asked
the CEO to present to the board of directors a report with his
analysis and professional recommendations as to the future
viability of BWIA by June 30, 2006.

"The proposals made by the company reflect salary increases in
line with the ability of the company-to create an environment
whereby BWIA can provide a safe customer driven profitable
service that is sustainable within the current global aviation
industry," it said.

It explained that the inability to reach an agreement has meant
that BWIA continues to suffer significant losses and the
business recovery plan submitted to the Government,
"specifically designed to reduce those losses, is now in
jeopardy".

"Furthermore, the recent industrial action by certain members of
staff has aggravated the loss position of the airline and has
caused damage to BWIA's reputation amongst customers.

"The Government has mandated the board to achieve the financial
viability of the airline and given the gravity of the situation
with the unions, the board has a responsibility to ensure that
all stakeholders are fully aware of the Company's tenuous
position.

"The company will therefore be informing all stakeholders
directly of the current state of negotiations and the
implications of the failure to reach agreements for the future
of the airline."

BWIA was founded in 1940, and for more than 60 years has been
serving the Caribbean islands from Trinidad and Tobago, the hub
of the Americas, linking the twin island republic and many other
Caribbean islands with North America, South America, the United
Kingdom and Europe.

The airline has reportedly been losing US$1 million a week due
to poor operational management.  An employee survey revealed
that lack of responsibility by the management is a major issue
in the company.




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


ELECTRICIDAD DE CARACAS: Gets US$50-Mil. Loan from Andean Dev't
---------------------------------------------------------------
The Andean Development Corp. has provided La Electricidad de
Caracas a US$50 million financing.

As stated by Andean Development's chief executive officer,
Enrique Garcia, such grants ratified the body as major
multilateral funding source of Venezuela.  From 2001 to 2005, a
number of loans totaling US$3.4 billion was granted to
Venezuela.

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/--).  EDC reported net profits
of US$20.6 million from January to March, versus net losses of
US$26.9 the same period in 2005.

                        *    *    *

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 US$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.


INT'L PAPER: Selling Kraft Biz to Stone Arcade for US$155 Mil.
--------------------------------------------------------------
International Paper signed a definitive agreement to sell its
kraft papers business to Stone Arcade Acquisition Corp. for
approximately US$155 million in cash, subject to certain closing
and post-closing adjustments, and two payments totaling up to
US$60 million, payable five years from the close of the
transaction, contingent upon business performance.  The kraft
papers business generated approximately US$220 million in sales
in 2005 and includes the Roanoke Rapids, North Carolina, paper
mill and the Ride Rite(R) dunnage bag plant in Fordyce,
Arkansas.

The agreement is part of IP's transformation plan to focus on
uncoated papers and packaging.  Proceeds from divestitures
announced to date, including kraft papers, total approximately
US$9.3 billion.

The sale is expected to close in the third quarter, subject to
satisfaction of various closing conditions, including regulatory
approval and approval by Stone Arcade shareholders.  After
closing, the company will be called KapStone Kraft Paper
Corporation -- a division of KapStone Paper and Packaging
Corporation.  Tim Keneally, currently vice president of IP's
kraft papers business, will lead the KapStone Kraft Paper
business.

"Kraft Papers has been a solid niche business for International
Paper and we're pleased to see that a number of interested
parties, including Stone Arcade, agree with us," said Carol
Roberts, senior vice president of IP Packaging Solutions.  "This
agreement speaks to the quality of the people and the assets of
this business."

"The acquisition of IP's kraft papers business is an important
first step for our company, Stone Arcade," said Roger Stone,
chairman and CEO of Stone Arcade.  "It provides us with a very
solid platform from which we hope to expand.  We look forward to
working with the current management group to develop internal
growth opportunities while we simultaneously explore strategic
acquisitions."

"We are very excited regarding the acquisition of IP's kraft
paper business," Matt Kaplan, Stone Arcade president and chief
operating officer, added.  "Over the past several weeks, we have
had the opportunity to visit the operations and meet many of its
employees.  Needless to say, we have been very impressed."

International Paper's kraft papers business produces
approximately 400,000 tons of kraft papers, used in a variety of
end-use products including approximately 9 million Ride Rite(R)
dunnage bags.  The business employs approximately 700 people.
International Paper accounted for the results of its kraft
papers business as a discontinued operation and wrote down the
business' assets in the first quarter of 2006.

Stone Arcade Acquisition Corporation (OTCBB: SCDE) is a publicly
traded special purpose acquisition company founded in August
2005.  Stone Arcade was formed for the purpose of identifying
and effecting an asset acquisition or business combination with
an unidentified business in the paper, packaging, forest
products, and related industries.

Based in Stamford, Connecticut, International Paper Company --
http://www.internationalpaper.com/-- is a leader in the forest
products industry for more than 100 years.  The company is
currently transforming its operations to focus on its global
uncoated papers and packaging businesses, which operate and
serve customers in the U.S., Europe, South America and Asia.
Its South American operations include, among others, facilities
in Argentina, Brazil, Bolivia, and Venezuela.  These businesses
are complemented by an extensive North American merchant
distribution system.  International Paper is committed to
environmental, economic and social sustainability, and has a
long-standing policy of using no wood from endangered forests.

                        *    *    *

Moody's Investors Service assigned a Ba1 senior subordinate
rating and Ba2 Preferred Stock rating on International Paper
Company in Dec. 5, 2005.


PETROLEOS DE VENEZUELA: May Realize US$30 Million 2006 Surplus
--------------------------------------------------------------
According to economist, Alejandro Grisanti at Ecoanalitica,
Petroleos de Venezuela's income for 2006 will be well beyond its
estimates.  The company estimated oil price to be at US$26 per
barrel.  Market prices however, are at least US$56, giving
Petroleos de Venezuela at least a US$30 surplus, El Universal
relates.

Based on current performance, Petroleos de Venezuela will have
available additional US$9 billion for expenses and investments.
As a result, the Venezuelan government will get additional US$21
billion for its social programs, the same report says.

"Such an amount will enable President Ch vez to spend US$400
million weekly," Mr. Grisanti told the El Universal.  "Price
performance allows for mass resources and high levels of
international reserves.  As a result, when oil prices drop,
there will be an adjustment period of 18 months."

The economist also noted Venezuela's high oil prices and
increasing expenditors resulted to economic growth.  However,
the country's growth does little to alleviate the labor market.

"However, despite recovery, employment has not grown in the same
proportion.  For instance, in 2005, 270,000 people entered the
workforce, but 230,000 left the labor market, because they
stopped looking for a job.  As a result, only 38,000 jobs were
created," Mr. Grisanti told El Universal.

Petroleos de Venezuela SA 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.  Fitch said the Rating Outlook
is Stable.  Both rating actions followed Fitch's November 2005
upgrade of Venezuela's sovereign rating.


* VENEZUELA: Andean Dev't Approves US$800 Million in Loans
----------------------------------------------------------
The Andean Development Corp. has approved an US$800 million
financing for Venezuela, El Universal reports.

The funds, El Universal says, will support the country's
implementation of public investment programs, and to release
resources for budget management.  Of the total amount, US$400
million are linked with the Habitat Plan. The remaining US$400
million is associated with the Public Investment Program in Mass
Transportation.

Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.



                         ***********


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.  Marjorie C. Sabijon, Sheryl Joy P. Olano, Stella
Mae Hechanova, and Christian Toledo, Editors.

Copyright 2006.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
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               * * * End of Transmission * * *